request, of the necessary submission requirements for each application for a permit or other entitlement for use in advance, and shall review said application and schedule the application for review by the appropriate authority.
3.3.4 Modification or Suspension by State or Federal Law. In the event that State, County or Federal laws or regulations, enacted after the Effective Date of this Agreement, prevent or preclude compliance with one or more of the provisions of this Agreement, such provisions of this Agreement shall be modified or suspended as may be necessary to comply with such State or Federal laws or regulations; provided, however, that this Agreement shall remain in full force and effect to the extent it is not inconsistent with such laws or regulations and to the extent such laws or regulations do not render such remaining provisions impractical to enforce. () The Parties recognize that California has adopted, through ballot initiative and California legislative enactments, the Medical and Adult Use Cannabis Regulation and Safety Act ("MAUCRSA"), and may adopt through initiative or legislative action other laws and regulations pertaining to either medical or adult use of cannabis. The Parties intend through this Agreement that Owner shall have the right to cultivate, distribute, and sell at retail cannabis as allowed by the current MAUCRSA, or any other law or initiative adopted in California pertaining to the cultivation, distribution and retail sale of cannabis. To the extent the changes in California law change the legal process or structure by which cannabis cultivators, distributors or retailers can or may operate (i.e., for-profit vs non-profit entities, size and number oflicenses, etc.), the Parties intend this Agreement to be flexible to allow such changes and may alter the procedures specified herein, by Operating Agreement as defined below, or otherwise, as may be necessary. (ii) Operating Agreement. The provisions of this Agreement require a close degree of cooperation between City and Owner. It is anticipated due to the term of this Agreement that refinements to the approvals may be appropriate with respect to the details of performance of City and Owner. Accordingly, Owner shall retain a certain degree of flexibility as provided herein with respect to the matters, items and provisions covered in general under this Agreement for land use and development of the Property; provided, however, that City shall retain a certain degree of control with respect to the operational and regulatory requirements of the commercial cannabis uses operating on the Property as a business in the City. City and Owner thus mutually understand and agree that Owner shall remain at all times subject to the conditions and requirements of the Operating Agreement entered into between City and Owner, in accordance with Chapter 5-8 of the Gustine Municipal Code, and nothing in this Agreement shall be construed to override or preempt such Operating Agreement with regard to the operational requirements and conditions of the cannabis business. If City and Owner find it necessary or appropriate to make changes, adjustments or clarifications to the business and regulatory licensing and operations of the cannabis business on the Property, the Parties may make such changes to the Operating Agreement executed by the Parties. The Operating Agreement, and any changes thereto, shall not constitute an amendment to this Agreement. The City Attorney shall be authorized upon consultation with Owner, to determine whether a requested modification or clarification to the uses or business may be effectuated under the Operating Agreement pursuant to this Section or whether the requested modification or clarification is of such character to constitute an amendment to the Agreement. The authority to enter into such Operating Agreement is hereby delegated to the City Manager, and the City Manager is hereby authorized to execute any Operating Agreement or amendments hereunder without further City Council action. -10
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3.3.5 Intent. The Parties acknowledge and agree that City is restricted in its authority to limit certain aspects of its police power by contract and that the foregoing limitations, reservations and exceptions are intended to reserve to City all of its police power that cannot be or are not expressly so limited. This Agreement shall be construed, contrary to its stated terms if necessary, to reserve to City all such power and authority that cannot be or is not by this Agreement's express terms so restricted.
3.4 Regulation by Other Public Agencies. It is acknowledged by the Parties that other public agencies not within the control of the City may possess authority to regulate aspects of the development of the Property separately from or jointly with City and this Agreement does not limit the authority of such other public agencies.
3.5 Timing of Development. The Owner shall be obligated to comply with the terms and conditions of the Development Approvals and this Agreement at those times specified in either the Development Approvals or this Agreement. The Parties acknowledge that the Owner cannot at this time predict with certainty when or the rate at which the Property will be developed. Such decisions depend upon numerous factors which are not all within the control of the Owner, such as market orientation and demand, interest rates, competition and other factors. Because the California Supreme Court held in Pardee Construction Co. v. City of Camarillo, 3 7 Cal.3d 465 (1984), that the failure of the Parties therein to provide for the timing of development resulted in a later adopted initiative restricting the timing of development controlling the Parties' agreement, it is the intent of City and the Owner to hereby acknowledge and provide for the right of the Owner to develop the Project in such order and at such rate and times as the Owner deems appropriate within the exercise of its sole and subjective business judgment, subject to the terms, requirements and conditions of the Development Approvals and this Development Agreement. City acknowledges that such a right is consistent with the intent, purpose and understanding of the Parties to this Development Agreement, and that without such a right, the Owner's development of the Project would be subject to the uncertainties sought to be avoided by the Development Agreement laws, (California Government Code {$ 65864 et seq.), City Council findings, and this Agreement. The Owner will use its best efforts, in accordance with their business judgment and taking into consideration market conditions and other economic factors influencing the Owner's business decision, to commence or to continue development, and to develop the Project in a regular, progressive and timely manner in accordance with the provisions and conditions of this Agreement and with the Development Approvals.
3.6 Conditions, Covenants and Restrictions. Owner shall have the ability to reserve and record such covenants, conditions, and restrictions (CC&Rs) against the Property as Owner deems appropriate, in its sole and absolute discretion. Such CC&Rs may not conflict with this Agreement or the General Plan. Before recording any CC&Rs, Owner shall provide a copy of the CC&Rs to the City for review and approval by the City Attorney. The City Attorney's review shall be limited to determining if the CC&Rs substantially comply with this Agreement. Within thirty (30) days after receiving a copy of the proposed CC&Rs from Owner, the City Attorney shall provide Owner with either (i) a statement that the CC&Rs comply with this Agreement ("CC&R Approval") or (ii) written comments identifying each aspect of the CC&Rs which the City Attorney believes not to be in compliance with this Agreement (a "Statement of NonCompliance"). If the City Attorney fails to provide Owner with either CC&R Approval or a Statement of Non-Compliance within thirty (30) days following a written request by Owner, City -11
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shall be deemed to have approved the CC&Rs and Owner may record the CC&Rs against the Property. If the City Attorney provides a Statement of Non-Compliance, Owner shall have thirty (30) days in which to respond to the Statement of Non-Compliance. Upon submittal of Owner's response, the procedure described above for the initial submittal and City Attorney review of proposed CC&Rs shall again be followed. This procedure shall be followed until Owner either ( 1) receives CC&R Approval, (2) submits the compliance issues to binding arbitration pursuant to the rules of the American Arbitration Association, (3) files an action for declaratory relief in Merced County Superior Court seeking a judicial determination of the compliance of the proposed CC&Rs, or (4) agreement is otherwise reached between the Parties allowing for the recording of the CC&Rs. The CC&Rs may run with the land and bind Owner's successors and assigns. Except as provided above, any dispute between the Parties regarding the City's approval or rejection of the CC&Rs shall be subject to immediate and binding arbitration pursuant to the rules of the American Arbitration Association.
4. PUBLIC BENEFITS.
4.1 Intent. The Parties acknowledge and agree that development of the Property will result in substantial public needs that will not be fully met by the Development Plan and further acknowledge and agree that this Agreement confers substantial private benefits on Owner that should be balanced by commensurate public benefits. Accordingly, the Parties intend to provide consideration to the public to balance the private benefits conferred on Owner by providing more fully for the satisfaction of the public needs resulting from the Project.
4.2 Public Bene lits. In addition to complying with the Project conditions of approval which are designed to mitigate any significant environmental impacts of the Project, Owner has committed by this Agreement to contribute to the acquisition, construction and maintenance of certain "Public Benefits" through payment of "Community Benefit Fees" to the City. The Community Benefit Fees shall be paid by Owner to City, as mutually agreed in writing in the Operating Agreement executed by the Parties and referenced in Section 3.3 .4(ii) of this Agreement and incorporated herein by this reference, to provide for projects, programs, and other services and activities that will positively contribute to the community and account for the adverse impacts or increases in need for services caused by the operation of a commercial cannabis business in the City. Payment of such Community Benefit Fees, as applicable and agreed to by the Parties in the Operating Agreement, shall remain an obligation and condition of this Agreement to ensure that development of the Project according to the Development Plan remains commensurate with the public needs of the City.
4.3 Development Impact Fees.
4.3.1 Time pf Payment. Unless otherwise specified herein, City-imposed development impact fees applicable to the Development, and sewer and water connection fees shall be due and payable by the Owner prior to the issuance of a certificate of occupancy for the building in question.
4.3.2 Future Development Impact Fees; Increases, The Parties hereby agree that the Project shall be subject to the imposition of any Development Impact Fee that becomes effective after the Effective Date of this Agreement. In addition, the Project shall be subject to -12
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any increase, amendment or alteration of any Development Impact Fee that becomes effective after the Effective Date. To this end, the City retains discretion to revise such fees as the City deems appropriate, in accordance with applicable law. If the City revises such fees on a city-wide basis (as opposed to revising such fees on an ad hoc basis that applies solely to the Project) prior to the Owner obtaining a certificate of occupancy, then the Owner shall thereafter pay the revised fee.
The Owner may, at its sole discretion, participate in any hearings or proceedings regarding the adjustment of such fees. Nothing in this Agreement shall constitute a waiver by the Owner of its right to challenge such changes in fees in accordance with applicable law provided that the Owner hereby waives its right to challenge the increased fees solely on the basis of any vested rights that arc granted under this Agreement.
4.3.3 Prepayment In no event shall the prepayment of any Development Impact Fees required hereunder establish a vested right on the part of Owner or any other owner of the Property or any person or entity with an interest therein to develop the Project or the Property following the expiration, cancellation or termination of the Term of this Agreement. Following the expiration, cancellation or termination of this Agreement, all Development Impact Fees then in effect shall be applicable to the Project and Property notwithstanding any provision of this Agreement and notwithstanding any prepayment.
4.4 Wastewater Treatment Capacity, The Owner shall pay the applicable connection charge in effect pursuant to City-wide ordinance at the time of building permit issuance, if applicable. The Owner acknowledges that connection charge may increase substantially over time and increases may be substantial.
4.5 Reimbursement for Property Taxes. Prior to issuance of building permits, Owner shall record a covenant on the title to the Project site regarding property tax payments. The covenant shall include a permanent obligation for the property owner to make payments to the City in lieu of the City's share of otherwise-required property taxes in the event that the Property is acquired or master leased by an entity exempt from payment of property taxes. Wording of the covenant is subject to review and approval of the City Attorney.
4.6 Financing Of Public Jmprovemenls. Owner may propose, and if requested by City shall cooperate in, the formation of any special assessment district, community facilities district or alternate financing mechanism to pay for the construction and/or maintenance and operation of public infrastructure facilities required as part of the Development Plan. To the extent any such district or other financing entity is formed and sells bonds in order to finance such reimbursements, Owner may be reimbursed to the extent that Owner spends funds or dedicates land for the establishment of public facilities. Notwithstanding the foregoing, it is acknowledged and agreed by the Parties that nothing contained in this Agreement shall be construed as requiring City or the City Council to form any such district or to issue and sell bonds.
5. REVIEW FOR COMPLIANCE.
5 .1 Periodic Review. The City shall review this Agreement annually, on or before the anniversary of the Effective Date, in order to ascertain the compliance by Owner with the terms of the Agreement. Owner shall submit an Annual Monitoring Report, in a form acceptable to the City Manager, within thirty (30) days after written notice from the City Manager. The Annual -13
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Monitoring Report shall be accompanied by an annual review and administration fee sufficient to defray the estimated costs of review and administration of the Agreement during the succeeding year. The amount of the annual review and administration fee shall be set annually by resolution of the City Council.
5.2 Special Review. The City Council may order a special review of compliance with this Agreement at any time. The City Manager, or his or her designee, shall conduct such special reviews.
5.3 Procedure.
(a) During either a periodic review or a special review, Owner shall be required to demonstrate good faith compliance with the terms of the Agreement. The burden of proof on this issue shall be on Owner.
(b) Upon completion of a periodic review or a special review, the City Manager, or his or her designee, shall submit a report to the Planning Commission setting forth the evidence concerning good faith compliance by Owner with the terms of this Agreement and his or her recommended finding on that issue.
(c) If the Planning Commission finds and determines on the basis of substantial evidence that Owner has complied in good faith with the terms and conditions of this Agreement, the review shall be concluded.
(d) If the Planning Commission finds and determines on the basis of substantial evidence that Owner has not complied in good faith with the terms and conditions of this Agreement, the Commission may recommend to the City Council modification or termination of this Agreement. Owner may appeal a Planning Commission determination pursuant to this Section
5.3(d) pursuant to City's rules for consideration of appeals in zoning matters then in effect. Notice of default as provided under Section 6.3 of this Agreement shall be given to Owner prior to or concurrent with proceedings under Section 5.4 and Section 5.5.
5.4 Proceedings Upon Modification or Termination. If, upon a finding under Section
5.3, City determines to proceed with modification or termination of this Agreement, City shall give written notice to Owner of its intention so to do. The notice shall be given at least ten (I 0) calendar days prior to the scheduled hearing and shall contain:
(a) The time and place of the hearing;
(b) A statement as to whether or not City proposes to terminate or to modify the Agreement; and,
(c) Such other information that the City considers necessary to inform Owner of the nature of the proceeding.
5.5 Hearing on Modification or Termination. At the time and place set for the hearing on modification or termination, Owner shall be given an opportunity to be heard. Owner shall be -14
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required to demonstrate good faith compliance with the terms and conditions of this Agreement.
The burden of proof on this issue shall be on Owner. If the City Council finds, based upon substantial evidence, that Owner has not complied in good faith with the terms or conditions of the Agreement, the City Council may terminate this Agreement or modify this Agreement and impose such conditions as arc reasonably necessary to protect the interests of the City. The decision of the City Council shall be final.
5.6 Certificate of Agreement Compliance. If, at the conclusion of a Periodic or Special Review, Owner is found to be in compliance with this Agreement, City shall, upon request by Owner, issue a Certificate of Agreement Compliance ("Certificate") to Owner stating that after the most recent Periodic or Special Review and based upon the information known or made known to the City Manager and City Council that: (I) this Agreement remains in effect; and (2) Owner is not in default. The Certificate shall be in recordable form, shall contain information necessary to communicate constructive record notice of the finding of compliance, shall state whether the Certificate is issued after a Periodic or Special Review and shall state the anticipated date of commencement of the next Periodic Review. Owner may record the Certificate with the County Recorder.
Whether or not the Certificate is relied upon by assignees or other transferees or Owner, City shall not be bound by a Certificate if a default existed at the time of the Periodic or Special Review, but was concealed from or otherwise not known to the City Manager or City Council.
6. DEFAULT AND REMEDIES.
6.1 Remedies in General. It is acknowledged by the Parties that City would not have entered into this Agreement if it were to be liable in damages under this Agreement, or with respect to this Agreement or the application thereof. In general, each of the Parties hereto may pursue any remedy at law or equity available for the breach of any provision of this Agreement, except that City shall not be I iable in damages to Owner, or to any successor in interest of Owner, or to any other person, and Owner covenants not to sue for damages or claim any damages:
(a) For any breach of this Agreement or for any cause of action that arises out of this Agreement; or
(b) For the taking, impairment or restriction of any right or interest conveyed or provided under or pursuant to this Agreement; or
( c) Arising out of or connected with any dispute, controversy or issue regarding the application or interpretation or effect of the provisions of this Agreement.
6.2 Release. Except for non-monetary remedies, Owner, for itself, its successors and assignees, hereby releases City, its officers, agents and employees from any and all claims, demands, actions, or suits of any kind or nature arising out of any liability, known or unknown, present or future, including, but not limited to, any claim or liability, based or asserted, pursuant to Article I, Section 19 of the California Constitution, the Fifth and Fourteenth Amendments to the United States Constitution, or any other law or ordinance which seeks to impose any other liability or damage, whatsoever, upon City because it entered into this Agreement or because of the terms -15
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of this Agreement. Owner hereby acknowledges that it has read and is familiar with the provisions of California Civil Code Section 1542, which is set forth below:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
THAT THE CREDITOR OR RELEASING PARTY DOES NOT
KNOW OR SUSPECT TO EXIST TN HIS OR HER FAVOR AT
THE TIME OF EXECUTING THE RELEASE AND THAT, IF
KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR
OR RELEASED PARTY."
By initialing below, Owner hereby waives the provisions of Section 1542 in connection with the matters that are the subject of the foregoing waivers and releases.
Owner's Initials
6.3 Termination or Modification of Agreement for Default of Owner. City may terminate or modify this Agreement for any failure of Owner to perform any material duty or obligation of Owner under this Agreement, or to comply in good faith with the terms of this Agreement (hereinafter referred to as "default"); provided, however, City may terminate or modify this Agreement pursuant to this Section only after providing written notice to Owner of default setting forth the nature of the default and the actions, if any, required by Owner to cure such default and, where the default can be cured, Owner has failed to take such actions and cure such default within sixty (60) days after the effective date of such notice or, in the event that such default cannot be cured within such sixty (60) day period but can be cured within a longer time, has failed to commence the actions necessary to cure such default within such sixty (60) day period and to diligently proceed to complete such actions and cure such default.
6.4 Termination of Agreement for Default of City. Owner may terminate this Agreement only in the event of a default by City in the performance of a material term of this Agreement and only after providing written notice to City of default setting forth the nature of the default and the actions, if any, required by City to cure such default and, where the default can be cured, City has failed to take such actions and cure such default within sixty (60) days after the effective date of such notice or, in the event that such default cannot be cured within such sixty (60) day period but can be cured within a longer time, has failed to commence the actions necessary to cure such default within such sixty (60) day period and to diligently proceed to complete such actions and cure such default.
7. LITIGATION.
7.1 Third Party Litigation Concerning Agreement. Owner shall defend, at its expense, including attorneys' fees, indemnify, and hold harmless City, its agents, officers and employees from any claim, action or proceeding against City, its agents, officers, or employees to attack, set aside, void, or annul the approval of this Agreement, or the approval of any permit granted pursuant -16
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to this Agreement. City shall promptly notify Owner of any claim, action, proceeding or detennination included within this Section 8.1, and City shall cooperate in the defense. If City fails to promptly notify Owner of any such claim, action, proceeding or determination, or if City fails to cooperate in the defense, Owner shall not thereafter be responsible to defend, indemnify, or hold hannless City. City may in its discretion participate in the defense of any such claim, action, proceeding or determination.
7 .2 Environmental Assurances. Owner shall indemnify and hold City, its officers, agents, and employees free and harmless from any liability, based or asserted, upon any act or omission of Owner, its officers, agents, employees, subcontractors, predecessors in interest, successors, assigns and independent contractors for any violation of any federal, state or local law, ordinance or regulation relating to industrial hygiene or to environmental conditions on, under or about the Property, including, but not limited to, soil and groundwater conditions, and Owner shall defend, at its expense, including attorneys' fees, City, its officers, agents and employees in any action based or asserted upon any such alleged act or omission. City may in its discretion participate in the defense of any such action.
7.3 Reservation of Rights. With respect to Section 7.1 and Section 7.2 herein, City reserves, the right to either (1) approve the attomey(s) that the indemnifying party selects, hires or otherwise engages to defend the indemnified party hereunder, which approval shall not be unreasonably withheld, or (2) conduct its own defense; provided, however, that the indemnifying party shall reimburse the indemnified party forthwith for any and all reasonable expenses incurred for such defense, including attorneys' fees, upon billing and accounting therefor.
7.4 Challenge to Existing Land Use Approvals. By accepting the benefits of this Agreement, Owner, on behalf of itself and its successors in interest, hereby expressly agrees and covenants not to sue or otherwise challenge any land use approval affecting the Property and in effect as of the Effective Date. Such agreement and covenant includes, without limitation, the covenant against any direct suit by Owner or its successor in interest, or any participation, encouragement or involvement whatsoever that is adverse to City by Owner or its successor in interest, other than as part of required response to lawful orders of a court or other body of competent jurisdiction. Owner hereby expressly waives, on behalf of itself and its successors in interest, any claim or challenge to any land use approval affecting the Property and in effect as of the Effective Date. In the event of any breach of the covenant or waiver contained herein, City shall, in addition to any other remedies provided for at law or in equity, be entitled to:
(a) impose and recover (at any time, including after sale to a member of the public or other ultimate user) from the party breaching such covenant or waiver, the full amount of Development Impact Fees that the breaching party would have been required to pay in the absence of this Development Agreement; and (b) impose any subsequently adopted land use regulation on those land use approvals for which the breaching party had not, as of the time of such breach, obtained a building permit.
Owner hereby acknowledges that it has read and is familiar with the provisions of California Civil Code Section 1542, which is set forth below:
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"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
THAT THE CREDITOR OR RELEASING PARTY DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT
THE TIME OF EXECUTING THE RELEASE AND THAT, IF
KNOWN BY HIM OR HER, WOULD HA VE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR
OR RELEASED PAR TY. II
By initialing below, Owner hereby waives the provisions of Section 1542 in connection with the matters that are the subject of the foregoing waivers and releases.
Owner's Initials
7.5 Prevailing Wages. Owner acknowledges the requirements of California Labor Code § I 720, et seq., and 1770, et seq., as well as California Code of Regulations, Title 8, Section 16000 et seq. ("Prevailing Wage Laws"), which require the payment of prevailing wage rates and the performance of other requirements on "public works" and "maintenance" projects, as defined. If work on- or off-site improvements pursuant to this Agreement is being performed by Owner as part of an applicable "public works" or "maintenance" project, as defined by the Prevailing Wage Laws, Owner agrees to fully comply with such Prevailing Wage Laws. Owner understands and agrees that it is Owner's obligation to determine if Prevailing Wages apply to work done on the Project or any portion of the Project. Upon Owner's request, the City shall provide a copy of the then current prevailing rates of per diem wages. Owner shall make available to interested Parties upon request, copies of the prevailing rates of per diem wages for each craft, classification or type of worker needed to execute the work subject to Prevailing Wage Laws, and shall post copies at the Owner's principal place of business and at the Project site. Owner shall defend, indemnify and hold the City, its elected officials, officers, employees and agents free and harmless pursuant to the indemnification provisions of this Agreement from any claim or liability arising out of any failure or alleged failure by Owner to comply with the Prevailing Wage Laws associated with any "public works" or "maintenance" projects associated with Project development.
7 .6 Survival. The provisions of this Section 8, inclusive, shall survive the termination of this Agreement.
8. MORTGAGEE PROTECTION.
The Parties hereto agree that this Agreement shall not prevent or limit Owner, in any manner, at Owner's sole discretion, from encumbering the Property or any portion thereof or any improvement thereon by any mortgage , deed of trust or other security device securing financing with respect to the Property. City acknowledges that the lenders providing such financing may require certain Agreement interpretations and modifications and agrees upon request, from time to time, to meet with Owner and representatives of such lenders to negotiate in good faith any such request for interpretation or modification. City will not unreasonably withhold its consent to any such requested interpretation or modification provided such interpretation or modification is 28859.00023\40663313.1
consistent with the intent and purposes of this Agreement. Any Mortgagee of the Property shall be entitled to the following rights and privileges:
(a) Neither entering into this Agreement nor a breach of this Agreement shall defeat, render invalid, diminish or impair the lien of any mortgage on the Property made in good faith and for value, unless otherwise required by law.
(b) The Mortgagee of any mortgage or deed of trust encumbering the Property, or any part thereof, which Mortgagee, has submitted a request in writing to the City in the manner specified herein for giving notices, shall be entitled to receive written notification from City of any default by Owner in the performance of Owner's obligations under this Agreement. (c) If City timely receives a request from a mortgagee requesting a copy of any notice of default given to Owner under the terms of this Agreement, City shall provide a copy of that notice to the Mortgagee within ten ( l 0) days of sending the notice of default to Owner. The Mortgagee shall have the right, but not the obligation, to cure the default during the remaining cure period allowed such party under this Agreement.
(d) Any Mortgagee who comes into possession of the Property, or any part thereof, pursuant to foreclosure of the mortgage or deed of trust, or deed in lieu of such foreclosure, shall take the Property, or part thereof, subject to the terms of this Agreement. Notwithstanding any other provision of this Agreement to the contrary, no Mortgagee shall have an obligation or duty under this Agreement to perform any of Owner's obligations or other affirmative covenants of Owner hereunder, or to guarantee such performance; provided, however, that to the extent that any covenant to be performed by Owner is a condition precedent to the performance of a covenant by City, the performance thereof shall continue to be a condition precedent to City's performance hereunder, and further provided that any sale, transfer or assignment by any Mortgagee in possession shall be subject to the provisions of Section 2.5 of this Agreement.
9. MISCELLANEOUS PROVISIONS.
9.1 Recordation of Agreement. This Agreement and any amendment or cancellation thereof shall be recorded with the Merced County Recorder by the Clerk of the City within ten (10) days after the City enters into the Agreement, in accordance with Section 65868.5 of the Government Code. If the Parties to this Agreement or their successors in interest amend or cancel this Agreement, or if the City terminates or modifies this Agreement as provided herein for failure of the Owner to comply in good faith with the terms and conditions of this Agreement, the City Clerk shall have notice of such action recorded with the Merced County Recorder.
9.2 Entire Agreement. This Agreement sets forth and contains the entire understanding and agreement of the Parties, and there are no oral or written representations, understandings or ancillary covenants, undertakings or agreements that are not contained or expressly referred to herein. No testimony or evidence of any such representations, understandings or covenants shall be admissible in any proceeding of any kind or nature to interpret or determine the terms or conditions of this Agreement.
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9.3 Severability. If any term, provision, covenant or condition of this Agreement shall be determined invalid, void or unenforceable, the remainder of this Agreement shall not be affected thereby to the extent such remaining provisions are not rendered impractical to perform taking into consideration the purposes of this Agreement. Notwithstanding the foregoing, the provision of the Public Benefits set forth in Section 4 of this Agreement, including the payment of the Development Impact Fees set forth therein, are essential elements of this Agreement and City would not have entered into this Agreement but for such provisions, and therefore in the event such provisions are determined to be invalid, void or unenforceable, this entire Agreement shall be null and void and of no force and effect whatsoever.
9.4 lnterpretation and Governing Law. This Agreement and any dispute arising hereunder shall be governed and interpreted in accordance with the laws of the State of California.
This Agreement shall be construed as a whole according to its fair language and common meaning to achieve the objectives and purposes of the Parties hereto, and the rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in interpreting this Agreement, all Parties having been represented by counsel in the negotiation and preparation hereof.
9.5 Section Headings. All section headings and subheadings are inserted for convenience only and shall not affect any construction or interpretation of this Agreement.
9.6 Singular and Plural. As used herein, the singular of any word includes the plural.
9.7 Joint and Several Obligations. Ifat any time during the Term of this Agreement the Property is owned, in whole or in part, by more than one Owner, all obligations of such Owners under this Agreement shall be joint and several, and the default of any such Owner shall be the default of all such Owners. Notwithstanding the foregoing, no Owner of a single lot that has been finally subdivided and sold to such Owner as a member of the general public or otherwise as an ultimate user shall have any obligation under this Agreement except as expressly provided for herein.
9.8 Time of Essence. Time is of the essence in the performance of the provisions of this Agreement as to which time is an clement.
9.9 Waiver. Failure by a party to insist upon the strict performance of any of the provisions of this Agreement by the other party, or the failure by a party to exercise its rights upon the default of the other party, shall not constitute a waiver of such party's right to insist and demand strict compliance by the other party with the terms of this Agreement thereafter.
9.10 No Thi.rd Pany Beneficiaries. This Agreement is made and entered into for the sole protection and benefit of the Parties and their successors and assigns. No other person shall have any right of action based upon any provision of this Agreement. 9 .11 Force Majeure. Neither party shall be deemed to be in default where failure or delay in performance of any of its obligations under this Agreement is caused by floods, earthquakes, other Acts of God, fires, wars, riots or similar hostilities, strikes and other labor difficulties beyond the party's control, (including the party's employment force), government -20
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regulations, court actions (such as restraining orders or injunctions), or other causes beyond the party's control. If any such events shall occur, the Term of this Agreement and the time for performance by either party of any of its obligations hereunder may be extended by the written agreement of the Parties for the period of time that such events prevented such performance, provided that the Term of this Agreement shall not be extended under any circumstances for more than five (5) years.
9.12 Mutual Covenants. The covenants contained herein are mutual covenants and also constitute conditions to the concurrent or subsequent performance by the party benefited thereby of the covenants to be performed hereunder by such benefited party.
9.13 Successors in Interest. The burdens of this Agreement shall be binding upon, and the benefits of this Agreement shall inure to, all successors in interest to the Parties to this Agreement. All provisions of this Agreement shall be enforceable as equitable servitudes and constitute covenants running with the land. Each covenant to do or refrain from doing some act hereunder with regard to development of the Property: (a) is for the benefit of and is a burden upon every portion of the Property; (b) runs with the Property and each portion thereof; and (c) is binding upon each party and each successor in interest during ownership of the Property or any portion thereof.
9.14 Counterparts. This Agreement may be executed by the Parties in counterparts, which counterparts shall be construed together and have the same effect as if all of the Parties had executed the same instrument.
9.15 Jurisdiction and Venue. Any action at law or in equity arising under this Agreement or brought by a party hereto for the purpose of enforcing, construing or determining the validity of any provision of this Agreement shall be filed and tried in the Superior Court of the County of Merced, State of California, and the Parties hereto waive all provisions of law providing for the filing, removal or change of venue to any other court.
9.16 Project as a Private Undertaking. It is specifically understood and agreed by and between the Parties hereto that the development of the Project is a private development, that neither party is acting as the agent of the other in any respect hereunder, and that each party is an independent contracting entity with respect to the terms, covenants and conditions contained in this Agreement. No partnership, joint venture or other association of any kind is formed by this Agreement. The only relationship between City and Owner is that of a government entity regulating the development of private property and the owner of such property.
9.17 Further Actions and Instruments. Each of the Parties shall cooperate with and provide reasonable assistance to the other to the extent contemplated hereunder in the performance of all obligations under this Agreement and the satisfaction of the conditions of this Agreement.
Upon the request of either party at any time, the other party shall promptly execute and file or record such required instruments and writings and take any actions as may be reasonably necessary under the terms of this Agreement to carry out the intent and to fulfill the provisions of this Agreement or to evidence or consummate the transactions contemplated by this Agreement. -21-
28859.00023\40663313.1
9 .18 Eminent Domain. No provision of this Agreement shall be construed to limit or restrict the exercise by City of its power of eminent domain. 9 .19 Agent for Service of Process. In the event Owner is not a resident of the State of California or it is an association, partnership or joint venture without a member, partner or joint venturer resident of the State of California, or it is a foreign corporation, then in any such event, Owner shall file with the City Manager, upon its execution of this Agreement, a designation of a natural person residing in the State of California, giving his or her name, residence and business addresses, as its agent for the purpose of service of process in any court action arising out of or based upon this Agreement, and the delivery to such agent of a copy of any process in any such action shall constitute valid service upon Owner. If for any reason service of such process upon such agent is not feasible, then in such event Owner may be personally served with such process and such service shall constitute valid service upon Owner. Owner is amenable to the process so served, submits to the jurisdiction of the Court so obtained and waives any and all objections and protests thereto.
9.20 Authority to Execute. The person or persons executing this Agreement on behalf of Owner warrants and represents that he or she/they have the authority to execute this Agreement on behalf of his or her/their corporation, partnership or business entity and warrants and represents that he or she/they has/have the authority to bind Owner to the performance of its obligations hereunder.
-22
28859.00023\40663313.1
IN WITNESS WHEREOF, the Parties hereto have executed this Development Agreement on the last day and year set forth below.
Owner
1Ly-«0pan
Gustine, a California
y
Flavor
By
Its:
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City
City OF GUSTINE, a California municipal
corporation
Dated: eAPPROVED AS TO LEGAL FORM:
BEST BEST & KRIEGER LLP
Ann Sip#eife
City Attorney
-23
28859.00023\40663313. l
EXHIBIT "A"
Legal Description of the Property
Property: 355 4 Street, Gustine CA 95322
APN: 020-044-015
Zoning: C-1 Downtown Commercial
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28859.00023\40581673.1
EXHIBIT "B"
Map of the Property
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PROJECT DATA
40' WIDE ALLEY
355 4TH STREET
GUSTINE, CA. 95322
A.P.N. 020-044-015
FLAVOR FARMS
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28859.00023\40581673.4
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EXHIBIT ·C"
Development Plan
(Begins on following page)
28859.00023\4058 I 673. I
DEVELOPMENT PLAN
Flavor Farms LLC
Project Description
Property
355 4" Street, Gustine CA 95322
APN: 020-044-015
Zoning: C-1 Downtown Commercial
Business Owner: Flavor Farms LLC
Property Owner: Amandeep Singh and Andres Sanchez
Project Overview:
Flavor Farms Gustine LLC (Hereinafter referred as Flavor Farms) proposes a commercial cannabis multi-use facility inclusive of indoor cultivation and distribution activities. Flavor Farms shall obtain all required State Licenses from the Department of Cannabis Control.
The subject site is located at the above address within the City of Gustine within the C-1 Downtown Commercial Zone and Retail Business District General Plan Designation Area.
Number of Employees (Full Time): Cultivation (5); Distribution (3); (8) (Maximum/Shift) [Combined Activities]
Total Maximum Number of Employees on Site: (15)
Hours of Operation: The hours of operation at the facility shall be from 7:00 am to 7:00 pm, Monday through Sunday.
Cultivation Procedures
There are three (3) stages involved in the cultivation phase including 1) Propagation; 2) Vegetation; and 3) Flowering.
Once the facility is fully operational, each stage of cultivation will take place simultaneously in different grow rooms throughout the facility. These 'grow rooms' shall include two (2) Flower Rooms wherein cannabis plants shall be grown to full maturity with flowers to be harvested therefrom. During hours of operation, a team of five (5) full-time Cultivation Technicians will be responsible for management of the Cultivation process throughout the cultivation area of the facility. Depending on the clones sourced from other third-party, State licensed nurseries, propagation and Vegetation may also take place within these 'Flower Rooms'.
Cultivation Lighting Wattage: 50-Watt Lights used for Propagation; 200-Watt Lights will be used for Vegetation; and 1,000-Watt Lights will be used for Flowering. 28859 00023\40396539.1 1
During each phase of cultivation, cultivation technicians will monitor the cultivation systems in each room. These systems will be comprised of either 50-watt, 200-watt and 1,000-watt cultivation lamps, on-site water tanks which will be filled from the main water line and drawn into an automated nutrient injection system with irrigation lines running to each room where the plants will be fed, air-conditioning, dehumidification, and ventilation systems, as well as Sonic Wave Harmonizers which stimulate the plants stomata, aiding plant growth.
Moreover, all three stages involve implanting seeds, or plants in varying stages of growth into soil pots and/or soilless, organic mediums which will facilitate the transfer of water and nutrients from the facility's water tanks through an automated nutrient injection system to each individual plant.
Following Flavor Farms' receipt of a State license to operate, each stage will also involve the repeated application of unique identifiers and recording of data into the State's "Track and Trace System" as the plants mature through the various phases.
The on-site operations manager will monitor the cultivation technicians, advise them as to best practices, and enter information into the State's "Track and Trace" system as necessary during each shift.
I)Propagation-At the onset of the propagation stage, cultivation technicians will implant cannabis seeds or immature clones into a small organic medium comprised or rock-wool where, during a two-week period the plantings will sit under 50-Watt lamps with eighteen (18) hours of light and six (6) hours of darkness to take root prior to the vegetation stage. Propagation may take place within Grow Room (s) 1 and 2.
2)Vegetation-At the onset of the vegetation stage, the same organic mediums with plantings intact will be placed by technicians into larger organic mediums or soil pots, where, during a three to four-week period the immature plants will sit under 200-Watt lamps with eighteen (18) hours of light and six (6) hours of darkness as they develop more robust stalks to support themselves prior to the flowering stage. Vegetation may also take place within Grow Room (s) 1 and 2.
3)Flowering (Mature Canopy Area)-At the onset of the flowering stage, the same organic mediums with now mature plants intact will be transferred from one of the 'Vegetation' Grow Rooms and placed by technicians into even larger organic mediums, or soil pots within the Flower Rooms' where, during a seven to nine-week period they will sit under 1,000-Watt lamps with twelve (12) hours of light and twelve (12) hours of darkness, causing the plant flowers to bloom. Trellis infrastructure will be set up within these grow rooms to support the plants as they flower. Ten days into the flowering phase, the plants will be pruned by the cultivation technicians to optimize plant health, yield, and quality; Flowering will take place in Grow Rooms l and 2.
28859.00023\40396539. 2
Pest Management Plan:
List of Products and Active Ingredients:
All pesticides and chemicals shall be stored inside locked cabinets within the Chemical/Pesticide Storage Area adjacent to Grow Room 2. These shall be accessed only as necessary and returned to the storage cabinets where they shall remain securely stored upon completion of their application.
Regarding the use of Pesticides on the premises Flavor Farms shall:
I) Use only properly labeled pesticides and comply with all pesticide label directions; 2) Store all chemicals inside securely locked metal cabinets; 3) Immediately contain any chemical leak and clean up any spill; 4) Apply the minimum amount of product necessary to control the target pest; 5) Prevent any off-site drift;
Water Source, Distribution, and Conservation Measures: The irrigation and nutrient injection system utilized at the facility with the main infrastructure to be located in the Water Storage Tank Area will operate on a closed loop. Water drawn from the utility line will be transferred either directly or from storage tanks within the water room and distributed through an automated nutrient injection system with irrigation lines running to the cannabis plants in each room.
Internal grow room dehumidification systems create condensate which will be reclaimed and placed back into storage wells. 40% of the total water drawn and distributed through the system will be recaptured and reused with the remainder absorbed and evaporated. Reclaimed water registers contaminants at zero parts per million upon recapture. No water run through this system will be dumped into storm or sewer drains.
Processing:
There are three stages involved in the processing phase including l) Harvest and 2) Trimming and 3) Packaging. During hours of operation, a team of Processing Technicians will be responsible for the Harvest and Trimming of Cannabis Flowers.
I)Harvest-Once the plants have flowered and are ready for harvest, processing technicians will remove the larger 'Sun Leaves' and extraneous organic material from the flowered plant stalks, leaving the flowers, and hang them in Harvested Cannabis Storage and/or Processing, Packaging and Labeling Room(s). The harvested flower stalks will hang to cure for a period of five (5) to eight (8) days prior to the Trimming Stage.
28859.00023\40396539 1 3
Once fully operational, one grow room will be ready for harvest every seven (7) to ten (10) days.
The on-site operations manager will monitor the processing technicians, advise them as to best practices, and enter information into the State's 'Track and Trace' system as necessary during each shift.
2)Trimming-Once the flowers have cured on the stalk, they will clipped them from their stalks by Cultivation Technicians, and hand trimmed to remove the finer leaves. Once fully trimmed, the flower from each plant will be separated into different 'batches'. Each batch will be placed into a package to which a unique identifier will be applied. This process will take two (2) to three (3) days following each room being harvested.
3) Packaging- Once fully trimmed, the flowers from each plant will be separated into different 'batches'. Each batch will be placed into a sealed package to which a unique identifier will be applied.
During processing, the Operations Manager will monitor the cultivation technicians, advise them as to best practices, and enter information into the State's 'Track and Trace' system as necessary during each shift.
Cannabis Waste Destruction, Storage, and Disposal:
Upon accumulation of cannabis waste, such waste will be mixed with the spent organic mediums or soil utilized for delivery of water and nutrients to individual cannabis plants. The organic mediums and cannabis waste shall be co-mingled and ground down to a uniform mixture, such that the cannabis waste is destroyed and unrecognizable from its previous state. In the event a Flavor Farms' finished cannabis flower batch is not fit for wholesale or distribution, it shall be deemed cannabis waste and become subject to destruction and disposal.
Flavor Farms shall dispose of cannabis waste in a secured waste receptacle located in the Processing, Packaging & Labeling Room. As organic waste accumulates on site, cultivation technicians will be responsible for collecting and placing said waste into 50-gallon plastic storage totes which shall be secured within the Processing, Packaging & Labeling Room. Once the totes have reached capacity, the organic waste will be transferred to a fully permitted transfer/ processing facility or maned transfer/processing operation by Flavor Farms employees.
The Operations Manager will be responsible for monitoring the collection and disposal of waste and entering information into the State's "Track and Trace System" as necessary. Flavor Farms shall maintain comprehensive records regarding cannabis waste that accounts for, reconciles, and evidences all activity related to the generation or disposition of cannabis waste.
Dist+button Procedures
The primary purpose of Flavor Farms' Distribution license and premises shall be to facilitate movement of cannabis produced at Flavor Farms' facility to licensees purchasing its products. 28859.00023\40396539.1 4
The primary activities involved in the operation of the distribution premises at the Flavor Farms' facility would involve the wholesale purchase and resale of cannabis goods, as well as the provision of contract services, for processing, packaging, storage for lab testing, and transportation of cannabis goods to licensed retailers and distributors, including cannabis flower, cannabis concentrates, and edible cannabis goods. All cannabis products purchased wholesale or taken in for service by Flavor Farms shall be sourced only from State licensed Cultivators, Manufacturers, and Distributors.
Such cannabis goods may arrive pre-packaged for distribution into the commercial market, or in bulk to be processed and packaged by Flavor Farms prior to testing and distribution to retailers and distributors.
All product transactions, including the physical transfer of cannabis goods, shall take place wholly within the secure facility structure.
On-Site Product Transportation and Storage:
Fol1owing harvest of cannabis from one of the facility's Flower Rooms, Cultivation Technicians shall place the raw cannabis flower intact on the stalk and transport the product from the grow room to the centrally Harvested Cannabis Storage and/or Processing, Packaging & Labeling Room. The finished cannabis flower shall be hung from metal framing in the Dry room for a period 0f 5-7 days until it is ready for final cure. Once dried, the finished cannabis product shall be hung from metal framing for a period of 2-3 to cure days until ready for bulk packaging.
Once cured, the cannabis flower shall be processed, packaged, and labeled as individual batches of cannabis flower for storage.
The finished cannabis flower will be packaged in air-sealed Mylar Bags in I-pound and 5-pound quantities and placed in lockable storage totes within the 'Storage Room'.
The bags and storage totes will be appropriately labeled with the Unique Identifier Number associated with the relevant Harvest Batch from which it came.
Once the finished product is appropriately bagged, organized, and labeled for storage, the plastic totes shall be pad-locked with lock keys accessible only to the Operations Manager.
The locked totes will then be transported directly into the Harvested Cannabis Storage room for storage until the product is shipped off-site by a licensed distributor.
The product is anticipated to remain in storage for no longer than two weeks, after which it shall be shipped for wholesale to state licensed Distributors. 28859.00023\403965391 5
Harvested Cannabis Storage [Limited Access Area]:
The Harvested Cannabis Storage Room shall house Flavor Farms' finished cannabis flower batches within this room. It shall be accessible only to the Security Manager, Operations Manager and Flavor Farms Executives.
The Harvested Cannabis Storage Room shall be climate controlled via the facility HV AC system with complimentary dehumidifiers and ventilated with appropriate air filtration systems including wall-mounted circular fans integrated with the HVAC and including at least one (1) industrial carbon filter to ensure that no offensive odor emanates outside of the facility.
The Harvested Cannabis Storage Room shall be monitored by interior surveillance cameras accessible to Security Administrators, the Operations Managers, the Site Security Manager, Security Administrators, Flavor Farms Executives, as well as the Gustine Police Department upon request.
Office:
The office will serve as the central location for Management and Administration for operation of Flavor Farms' facility. It will also house the facility's computer systems and administrative equipment, as well as records and documentation required to be housed on site under City of Gustine Municipal Code and State Law.
These records shall be maintained by Flavor Farms for a period of seven (7) years and shall be made available to the City of Gustine upon request. In addition to all other formats that Flavor Farms may maintain, these records shall be stored or produced on location in a printed format upon request.
Any loss, damage or destruction of the records shall be reported to Gustine Police Department within 24 hours of the loss, destruction or damage.
Record Keeping:
Flavor Farms tenant-operators wil1 maintain the following records on premises including but not limited to:
1. All Cultivation and Distribution Permits and licenses;
2. Cultivation and Distribution Plans and Operating Procedures;
3. All records evidencing compliance with environmental protection measures;
4. All supporting documentation for data or information input into the track-andtrace system;
5. All unique identifiers (UID's) assigned to product in inventory and all unassigned UID's. UID's that have been retired from the track-and-trace system shall be maintained for six (6) months after the tags are retired;
6. Financial records including but not limited to bank statements, tax records, sales invoices, and sales receipts;
28859 00023\40396539. 6
7. Personnel records, including each employee's full name, social security, or tax ID number, date of beginning employment, and date of tennination of employment where applicable;
8. Records related to employee training for the track and trace system including the date(s) training occurred, description of the training provided, and the names of the employees that received the training;
9. Contracts with other state licensed cannabis businesses; I 0. Security Records;
11. Records associated with the disposal of cannabis waste;
12. Documentation associated with any loss of access to the track-and-trace system;
Inventory Control and Record Keeping:
In addition to utilizing Mctrc for purposes of tracking and reporting commercial cannabis inventory and transactions as required by the State, Flavor Farms shall maintain an in-house inventory control and reporting system that accurately documents the present location, amounts, and descriptions of all cannabis and cannabis products it intends to place into the commercial market for all stages of the growing and production or manufacturing, laboratory testing, and distribution processes until purchase as set forth under MAUCRSA.
Flavor Farms shall maintain such books and records in an electronic format detailing all revenues and expenses of the business, as well as its assets and liabilities. Such records will include monthly statements detailing the number of sales under each permit, respectively, including gross receipts for each month and all applicable taxes paid or due to be paid. Such records shall also demonstrate that all cannabis or cannabis products have been obtained from and are provided to other locally and state pennitted and licensed cannabis operations.
Sales and Invoicing:
Flavor Fanns shall prepare a sales invoice or receipt, along with an electronic manifest for every sale or transport of cannabis product to another licensee.
Each sales invoice shall include:
1. Flavor Farms' name, business address, and license numbers;
2. The purchaser's name, business address and license numbers;
3. The date of sale or transfer to the licensee receiving the cannabis product;
4. An invoice or receipt number;
5. The weight or quantity of cannabis product sold;
6. A description for each item including strain or cultivar;
7. The signature of the Flavor Farms representative authorized to make the sale or transfer acknowledging the accuracy of the cannabis products being shipped;
8. The signature of the purchaser or designated representative, acknowledging receipt or rejection of the cannabis product.
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Reporting and Tracking of Product and of Gross Sales:
Flavor Farms shall maintain a point of sale and inventory management and tracking system to track and report all aspects of the commercial cannabis activity in which it engages, including tracking product, inventory data, and gross sales (by weight and by sale).
Non-Laboratory Quality Control Procedures
Preventing Deterioration and Response to Product Recalls:
Flavor Farms shall ensure the interior and exterior of its premises are maintained in an orderly and cleanly manner to avoid the accumulation of dust, standing water, mold, bacteria, or any other microbiological contaminants by:
I. Daily sweeping and mopping with a sanitizing agent of the interior premises where cannabis goods are handled or stored;
2. Maintaining the internal temperature of the licensed premises at approximately 70 degrees Fahrenheit;
3. Ensuring all interior and exterior drainage systems are in good working order to prevent standing water which could become a harborage for pests;
4. Ensuring all openings to the facility are properly sealed, including doors, windows, vents, etc., to avoid pests from entering the building;
5. Storing cannabis goods in a dimly lit, cool atmosphere;
6. Performing regular maintenance on the commercial HV AC systems to ensure effective temperature and environmental controls.
In the event Flavor Farms receives cannabis goods from a licensee that it discovers is either nonconforming or defective, Flavor Farms shall arrange for a return of such cannabis goods to the licensee from which the goods were obtained. Such cannabis goods shall be tagged and designated for returns and segregated from other inventory within the Processing, Packaging and Labeling Room prior to the return occurring. Flavor Farms shall arrange for such return by transmitting a shipping manifest to the licensee and Department of Cannabis Control indicating the return of such non-conforming or defective goods in exchange for conforming or nondefective goods. Once the shipping manifest is successfully transmitted to and confirmed by the licensee from which such goods were obtained, Flavor Farms shall transport the defective goods back to such licensee and execute an exchange for non-defective or conforming goods at the time of the return.
Proper Packaging and Labeling Prior to Sale:
Cannabis and cannabis products being transferred between licensees, including Flavor Farms' own Cultivation and Distribution Licensed premises, and its Distribution Inventory shall be segregated within separate batches or packages according to the sales invoice and/or shipping manifest for the relevant shipment or transaction. Prior to accepting cannabis goods into Distribution inventory, Flavor Farms shall compare the physical goods against the sales invoice and/or shipping manifest related to the particular-cannabis goods transaction. Such records 28859 00023\40396539.1 8
include the name, license number, date of production, batch number, and unique identifiers, when available, a description of the cannabis goods, the weight and/or quantity of units in the package, and the expiration or sell-by date, if applicable. Prior to acceptance of cannabis goods into its Distribution Inventory, such goods shall be physically inspected and visually scrutinized to ensure that all the above information is properly noted on the above referenced shipping records, as well as completely and accurately reflected on the cannabis goods packages and/or labels.
Testing the Products:
Flavor Farms shall quarantine and store all cannabis goods which are awaiting lab testing prior to transporting such products to Retailers within its distribution premises 'Batch Sampling Area' within the Room Labeled 'Processing, Packaging and Labeling Room. Such products shall be labeled accordingly and stored separately from other cannabis goods in Flavor Farms inventory within the Cannabis Product Storage Area, also located within the Processing, Packaging and Labeling Room.
Flavor Farms shall make testing arrangements within 24 hours of taking physical possession of cannabis goods batches, whereby lab testing representatives shall obtain representative samples of cannabis batches at Flavor Farms' facility which will then be taken to a lab testing facility for analysis.
Flavor Farms shall ensure cannabis goods batches taken into its possession are stored separately and distinctly from other cannabis goods batches on premises and be labeled with the following information:
1. The Name, License Number and Licensed Premises Address of the manufacturer or cultivator who provided the batch;
2. The date of entry into Flavor Farms storage area;
3. The unique identifiers and batch numbers associated with the batch;
4. A description of such cannabis goods with enough detail to easily identify the batch;
5. The weight of or quantity of units in the batch (not to exceed applicable limits based on the type of cannabis goods);
6. The best-by, sell by, or expiration date of the cannabis goods, if any. Flavor Farms shall ensure that its employees have no contact with such cannabis goods or sampling equipment by maintaining a physical distance of at least 5 feet from lab testing personnel during the sampling procedure.
Upon receipt of a certificate of analysis indicating a failed sample, Flavor Farms shall designate such cannabis goods as waste and place them in its waste holding and destruction area for on-site destruction, or transportation to a licensed manufacturer to attempt remediation.
In the event a cannabis goods batch associated with a failed sample is designated for transport to a manufacturer for attempted remediation, a shipping manifest shall be prepared and transmitted to such manufacturer, with confirmation of receipt to be obtained from the manufacturer prior to transporting such cannabis goods. Following remediation measures taking place, the cannabis 28859 00023\403965391 9
goods shall be transported back to Flavor facility where its shall be quarantined until it is retested.
Upon receipt of certificate of analysis (COA) indicating cannabis goods in Flavor Farms' possession have met compliance standards, such the COA shall be filed, with the COA number to be entered into the appropriate field in Flavor Farms' inventory log. Accordingly, all cannabis goods which are packaged from such a batch shall be labeled with the batch number associated with the corresponding batch.
Flavor Farms shall enter in the track and trace system all information related to cannabis goods testing procedures conducted at its behest within 24 hours of batch sampling, or receipt of any COA related to batch sampling.
Following receipt of any certificate of analysis (COA) following testing procedures, Flavor Farms shall physically inspect and scrutinize such COA to ensure that COA corresponds to the appropriate batch sampled, and that all the information verified by Flavor Farms is accurately reflected on the COA, such as the time of sampling, batch number, as well as the weight, quantity, or number of units contained within the batch associated with the COA.
Disposal of Unused Cannabis:
In the event the cannabis goods are deemed waste and designated for destruction, Flavor Farms shall mix such cannabis waste in a 50-50 proportion with soil or organic mediums utilized in the Cultivation Process and grind the cannabis to a uniform mixture such that the cannabis waste is unrecognizable from its original form.
Transportation Procedures
Transferring/ Transporting Cannabis Products to and from Premises:
Flavor Farms intends to transport cannabis and cannabis products via its licensed Distribution operation.
Upon Transport of cannabis and cannabis products, Flavor Farms will store such cannabis in the rear cargo area of its distribution vehicle within a lockbox secured to the vehicle floor panel or a cage separating the cannabis cargo from the passenger area.
Cannabis goods shall be secured within containers placed into the secure lockbox, and or a cage as noted above. The vehicle shall always remain locked when a Flavor Farms employee is not present, with its burglar alarm system and permanently affixed GPS device activated.
The containers used for storage of cannabis are opaque, as is the lockbox within which the cannabis goods containers are stored. Finally, Flavor Farms' Distribution Vehicles shall be equipped with wall panels surrounding the cargo area, such that the contents of the cargo area are not visible or identifiable outside of the vehicle.
Each vehicle shall be equipped with an alarm system, which must be armed whenever the distribution driver is not in the vehicle and must be disarmed by the driver to enter or exit the vehicle. Finally, each vehicle shall have a permanently affixed, unique GPS number which allows dispatchers to track vehicle movement in real time. 28859 00023\40396539.1 10
Flavor Farms' Manager shall constantly monitor the present location of the Distribution Vehicle with the capability to remain in contact with the Distribution Driver during transportation of cannabis goods. Prior to arrival or departure from any licensed facility, Flavor Farms shall coordinate with facility personnel to ensure the premises is free of any security or safety threat.
Further, no cannabis goods shall be loaded onto or unloaded from the vehicle unless security clearance has been verified by facility personnel.
Odor Control Plan
Air Treatment Procedures:
Flavor Farms' Facility has been designed for the operation of Commercial Cannabis Cultivation, and Distribution uses. The facility will generate cannabis-related odors throughout the day.
However, the following odor mitigation plan shall limit and control the cannabis odor such that it is undetectable off site. In no case shall untreated air be vented outside of the facility.
The odor control and reduction system will include carbon filters, a commercial heating, ventilation, and air conditioning (HV AC) air ventilation system, and air-tight packaging. Each odor-emitting area will contain air filters and carbon filters to circulate and scrub the air throughout the workday.
A. Operational Processes and Maintenance Plan:
The Operations Manager will monitor and replace all filters according to the manufacturer's specifications and, as necessary, to maintain optimal operating performance. The filters will be integrated into an exhaust system. Exhaust will pass from each filter into activated carbon filters before entering a sealed ducting system. Exhaust is then filtered through ceiling ventilation hatches before finally leaving the facility. Rooms with cannabis will operate under negative pressure (i.e. air seepage will come into the room rather than out of the room). Therefore, all indoor air will move through the HV AC system and thus the carbon filtration. Each room will also be insulated.
Flavor Farms' Operations Manager(s) will monitor and replace carbon filters per the manufacturer's instructions or as needed, to ensure optimal performance. Flavor Farms has considered several vendors whose products meet the standards of their odor control plan and their exemplary expectations. 'Active Air' carbon filters (or equivalent) will be used for Flavor Farms' air exchange system.
Once the Odor Control Mitigation Plan is fully approved and implemented, the Operations Manager will inspect the interior and exterior of the facility to evaluate the efficiency of odor control measures. Periodic odor testing will also be performed to both establish a baseline and to monitor mitigation efforts.
In the event of an emergency or power outage, Flavor Farms will have a backup generator for critical areas of the facility, thus odor control methods will continue to operate.
A. Staff Training Procedures:
28859 00023140396539. I 11
Following full implementation of the Odor Control Mitigation Plan including necessary orientation per manufacturers instruction and any consultation with equipment installation contractors, and odor control specialists, managers overseeing operations will conduct initial training with staff members in their respective departments. This training will include:
• Establishing staff knowledge and ability to effectively control and monitor both the HV AC and Air Filtration equipment;
• Tutorials on identifying system deficiencies or malfunctions; • Tutorials on replacement of filtration systems for both Activated Carbon Filters, and Filtered Air Ventilation units;
• Establishing schedule for inspection of facilities and Odor Control equipment to ensure effectiveness.
As systems are replaced, or upgraded, all Operations Managers and designees will be required to undergo subsequent orientations to familiarize themselves with new equipment or controls.
Accordingly, staff training will be conducted as needed, but no less than on a bi-annual basis.
B. Engineering Controls:
Carbon Filtration
Flavor Farms will utilize carbon filters throughout the facility as part of the odor control plan.
The cannabis facility will route air through a carbon filtration system, deodorizing the air before it exhausts to the exterior of the building. Industrial carbon filters are combined with 10" circular fans in each grow room. Activated carbon air filters, also known as charcoal impregnated air filters, are an effective method of removing and preventing odor buildup in recirculated air.
Charcoal impregnated air filters are an effective mitigator for organic based odors.
Carbon filtration employs a bed of activated carbon to remove contaminants and impurities, through chemical adsorption. Each granule of carbon has a large surface area, maximizing exposure to the active sites within the filter media. One pound (450 g) of activated carbon contains a surface area of approximately l 00 acres (40 Hectares). Activated carbon works through the process of adsorption, whereby pollutant molecules in the fluid (air) to be treated, adhere to the carbon substrate. Active charcoal carbon filters are most effective at removing chlorine, sediment, volatile organic compounds (VOCs), taste and odor from both air and water.
This process physically and permanently removes odor causing molecules from the air; it does not mask the odor with another odor.
The more porous the activated carbon, the better, as this will increase the amount of surface space available for contaminants to adhere to when air passes through the filter. A combination of fresh-air wall-ports, filtered ceiling ventilation hatches and industrial grade carbon filters will remediate cannabis odors and act as a failsafe in case of HV AC failure.
HVACSystem
In addition to carbon filters, Flavor Farms will augment the facilities filtered ceiling ventilation hatches to remediate odors, achieve temperature balance and to maintain air flow.
Flavor Farms may increase the number of air exchanges in the facility. The average HV AC system in a cannabis business has an average of ten to eighteen air exchanges per hour. Flavor 28859.00023\40396539.1 12
Farms will use a formula to determine the appropriate number of air exchanges necessary to scrub the air of unwanted odor. Flavor Farms has devised the following formula Cubic Feet of Room Space% 3 = Cubic Feet per Minute (CFM) of airflow necessary. Additional air exchanges increase the odor removal system as air passes through filters more often before being recirculated. Air exchanges also offer the added benefits of maintaining appropriate levels of humidity.
Insulation
Flavor Farms' facility shall be properly sealed and insulated. Flavor Farms will operate the rooms under negative pressure and insulate each room where cannabis odors are produced to limit air intake and maintain negative pressure. Employees will regularly inspect negative pressure rooms. In addition, the Operations Manager will ensure mechanical and ventilation systems are up-to-date and operating properly through daily inspections.
Additional Solutions
Flavor Farms will utilize air-tight packaging to limit odor. Each batch of cannabis product produced will be placed in an air-sealed container. Before a purchased cannabis product leaves Flavor Farms' facility, cannabis products will be sealed inside a tamper-evident, odor-locking package. Further, any cannabis products considered as waste will be mixed with soil and ground to a uniform mixture until the cannabis waste is undiscemible from its original form.
Flavor Farms believes these measures coupled with proactive maintenance will sufficiently eliminate odors that would otherwise emanate from the cannabis facility. In the unlikely event that these steps are not enough to mitigate odors, Flavor Farms is prepared modify their Odor Control Plan and take additional action based on community and state recommendations.
Government Documentation
In accordance with the state of California, Flavor Farms will provide copies of its records upon request. Records will include but will not be limited to the original Odor Control Plan, any changes/updates to the Odor Control Plan, maintenance, malfunctions, installations, and community complaints. If any renovations or modifications are made to the cannabis facility that modify the control of odor, Flavor Farms will submit an updated Odor Control Plan within 30 days of the modifications/renovation to City of Gustine.
Security Plan
Logistics and Operational Security Measures
Transactional SecurityFlavor Farms shall be responsible for transporting cannabis produced at its facility to other State licensed Distributors and Retailers via licensed Distribution Premises at the facility, and/or in limited circumstances, pickup of finished Cannabis Flower by other State Licensed Distributors.
Facility access shall be coordinated by the Operations Manager and Security Manager in collaboration with authorized vendors and staff members tasked with facilitating such transactions.
Product and Currency Transfers:
28859 00023\403965391 13
Transfers of product and currency in and out of the facility will be conducted only during hours of operation at random time intervals, with transporters using varying routes to and from the facility. Access in and out of the facility for Value Transfers will be facilitated through collaboration between the Operations Manager, Security Personnel and Flavor Farms Executives.
Prior to arrival or departure of a logistics vehicle, Operations Manager will monitor the surveillance system and maintain communication with the security staff member near the entrance to the facility to confirm that the facility is free of any security threat. The Security staff member will then authorize entry into and exit from the premises through the Roll up door to the Receiving Area adjacent to Grow Room 2,
Receipt of Shipment of Cannabis Goods at Distribution Premises:
The Distribution Receiving Area will be accessible only by the authorized Flavor Farms' personnel and vendors transacting business on site. Entry into the value transfer area will be facilitated by the Operations Manager and facility security personnel. Such transactions will take place by appointment only.
Following verification of identification and credentials of the Distribution Driver by the Security staff members, and the logistics vehicle gaining access to the premises, Distribution Driver(s) will be directed to drive to the west side of the building to the roll-up door located at the shipping/loading/unloading area. Once the area is confirmed to be free of any security threat, the Security Manager will open the roll up door to allow the distribution driver into the facility with the product being shipped, then close and lock the roll-up door once the driver is inside. The distribution shipment shall then be verified against the purchase order and electronic manifest related to the transaction by the Operations Manager.
Fallowing verification of the shipment, the cannabis product will be transferred by the Distribution Inventory Clerk into the Processing, Packaging and Labeling Room to be securely stored and locked. The Receiving Area will be monitored by exterior surveillance cameras accessible to the Operations Manager, Security Administrators, Flavor Farms' Executives.
Transport of cannabis goods to Licensees from Distribution Premises:
Shipments of cannabis goods to licensed distributors and retailers from the distribution premises shall originate from the Processing, Packaging and Labeling Room and shall ship from the Receiving Area which shall remain locked during preparation of shipments prior to departure.
All facility access points, including the roll-up door to the Receiving, shall remain closed and locked while the shipment is being loaded into the distribution vehicle. Prior to departure of the shipment, the Operations Manager shall coordinate with security staff to ensure that the premises and its general vicinity are free of any security threat.
Currency Transfers from Distribution Premises:
Currency will be transferred off-site at irregular intervals, with notification of such transfers only to the Operations Manager, security staff, Flavor Farms' Executives, and transporters contracted to facilitate such transfers.
Upon a transfer of currency off-site, after verification of credentials and access to the facility being granted by security staff, the transport vehicle will be directed to drive up to the west side of the facility. Once the transport vehicle is positioned at the Receiving Area, the roll-up door 28859.00023\40396539.1 14
will be opened to allow the courier inside of the facility, then immediately closed and locked.
The Distribution Manager will then transfer currency from the Distribution Premises to the logistics vehicle parked in the Receiving Area to be transported off site.
Distribution Driver Security:
Flavor Farms' distribution driver shall maintain a fully charged cellular phone enabling constant contact with Flavor Fanns' Executives, as well as a Personal Distress Alarm which will notify Flavor Farms' Executives and Emergency Responders in the event of a security threat.
Distribution Vehicle Security:
All distribution vehicle doors shall remain locked with windows closed and secured when the vehicle is unoccupied. The Operations Manager on site at Flavor Farms' premises shall continuously electronically monitor the location of distribution vehicle(s) while in transit. The vehicles shall be outfitted with a dedicated, permanently affixed Global Positioning System (GPS) device owned by the Flavor Farms' tenant-operator to determine its current geographic location. The vehicles shall also be outfitted with an active vehicle alarm system, which shall be activated at any time the Distribution driver is not present with the vehicle.
During off hours, Flavor Farms' distribution vehicle shall be stored within the Receiving Area.
Unless product is in transit, all Flavor Farms' cannabis goods shall be stored and locked within the Processing, Packaging and Labeling Room.
SAFETY AND SECURITY PLAN
At least one (1) armed Security Guard shall be present at the facility 24 hours per day in addition to the entirety of the facility, except the Office, employee break room and restrooms, being under the constant monitoring of security cameras surveillance systems.
Security Staff shall be responsible for monitoring and maintainin g facility perimeter security, facilitating access for vendors and visitors to the facility, preventing loitering, and serving as a deterrent to any unlawful or threatening activity on site. The surveillance cameras shall be live monitored by Flavor Fanns' Security Manager. Footage shall be kept and stored for a minimum of 90 days. The surveillance feeds and footage shall be accessible to the Operations Manager, Flavor Farms Executives, and Gustine Police Department upon request.
Safety Plan
Emergency Numbers and NotificationsIn the event of an emergency, Flavor Farms Personnel shall be trained to call 911 as soon as possible from a safe location. Security and key personnel will assist until police, fire, or medical responders arrive.
Emergency Training and protocol will include a directive for the following information to be provided to on-site security or emergency dispatch in the event of an emergency:
• Nature of the emergency;
• Assistance needed;
28859.00023\40396539.1 15
• Name of the caller and telephone number from which the call was made; • Flavor Farms name, and precise location on site from which the call was made.
Contact:
• Direct line to on-site security: TBD;
• California Highway Patrol (non-emergency): (209) 365-6600; • Gustine PD: 911;
• Flavor Farms Member and Property Owner: Andy Sanchez (209) 324-3853 Example:
• "This is an emergency." (Describe nature of emergency.) • "I need (ambulance/police/fire) assistance. 11
• "I am at Flavor Farms Facility located at 355 4" Street in Gustine." • "I am in (room or office area). 11
Fire Prevention and SuppressionBased on the nature of the proposed use for indoor cultivation of cannabis using artificial light, and distribution, the primary potential fire hazard would be a malfunction related to the cultivation lamps located within the grow rooms. The risk of this occurring is minimal.
Nonetheless, to protect against this potential hazard, the entire facility will be equipped with a fire sprinkler system with wet pendent heads throughout, including the interior of each grow room. Furthermore, fire extinguishers will be mounted in each suite.
In the event of a fire, Flavor Farms personnel shall be trained to:
ALERT others on the floor by activating a manual fire alarm pull station and direct others to begin immediate evacuation.
REPORT the fire to 911 and Flavor Farms Management at (209) 324-3 853 as soon as possible from a safe location.
ATTEMPT TO EXTINGUISH the fire only if trained and feel comfortable doing so. Do not attempt to extinguish a fire which is larger than a trash can. Always leave yourself a good escape route from the area while attempting to extinguish the fire. If the fire cannot be safely and quickly contained, leave the area immediately and close all doors behind you as you exit.
EVACUATION: During business hours, security and key personnel will assist with a quick and orderly evacuation, search the facility, and assist disabled vendors and staff members. Proceed to the parking lot which will serve as the designated evacuation area.
Treat all alarms as an emergency.
Once outside of the building, stay clear of the structure to avoid falling glass, or flaming ash and debris emanating from the fire.
If you must move through smoke, heat, and fumes, drop to your hands and knees, take short breaths through your nose, and crawl to an escape exit by staying in contact with an outside wall. 28859.00023\40396539 1 16
Following an outside wall will lead to an exit. The air will be best near the floor since the heat, fumes, and smoke rises.
Do not open hot doors! Feel doors at the top, the door handle or frame with the back of your hand before opening. If the door is hot, don't open it! If the door is cool, open the door slowly and stay behind the door, ready to close it if necessary. Close the door immediately after entering or exiting.
ISOLA TE the fire by closing all doors behind you as you exit.
AUTHORITY in a fire or other emergency rests with the Gustine Fire Department and other emergency responders, and with Flavor Farms Management.
Hazardous Materials SpillIn the event of hazardous materials Incident:
REMAIN CALM
IMMEDIATELY EXIT THE AREA
DO NOT ALLOW OTHERS INTO THE AREA. Do not attempt to contain or clean up the spill unless you have been trained and have all proper safety, disposal and personal protective equipment.
NOTIFY SECURITY. Give as much detailed information as you can about the nature of the spill. Security will call California Poison Control Authorities at 1-800-222-1222.
REFER to Material Safety Data Sheet (MSDS) if possible.
FOLLOW INSTRUCTIONS of Fire Department personnel and/or Security/Flavor Farms Management when they arrive.
Medical EmergencyIn the event of a medical emergency:
Remember that it is best to err on the side of caution. If a person is experiencing significant distress, call for professional assistance immediately.
CALL 911. Give the following information:
• Nature of medical emergency;
• Exact location and name of sick or injured person and age; • What type of assistance is needed or is being provided; • Your name and contact phone number;
• Stay on the phone until the dispatcher has all the information needed and releases you;
• Ambulance should arrive at 355 4" Street in Gustine
CALL SECURITY. Security will contact Flavor Farms' Executives and follow up with emergency responders as necessary to arrange escort paramedics to your location. 28859.00023\40396539.1 17
NOTIFY individuals trained in CPR and First Aid that may assist until emergency responders arrive. Take all reasonable precautions to prevent disease transmission.
Assign someone to wait at the facility entrance to assist responding medical personnel in finding location of person(s) needing medical attention.
Do not move victims if you suspect back or neck injuries. Assess victims for airway, breathing, circulation, and possible injuries before administering any sort of aid. Keep the person warm and comfortable. You should also offer to call a family member or friend for assistance/support, or notification.
Workplace ViolenceIn the event of a violent incident in the workplace or there is a threat to your safety or the safety of another person:
CALL 911.
RELAY ALL KNOWN INFORMATION: Exact location, nature ofthe situation, brief description of subject(s) involved, injuries. Stay on the phone until the dispatcher releases you.
USE COMMON SENSE to safeguard yourself and others; do not engage in unnecessary attempts at intervention.
EarthquakeIn the event an earthquake strikes:
• Drop, Cover and Hold! Get under a sturdy structure such as a desk or workstation and remain there until the earthquake subsides. In a hallway, kneel with your back against the wall. Cover your head with your arms and tuck down to your knees. • Keep as calm as possible.
• If inside, stay inside. If outside, stay in the open, away from the building, overhead power lines, or any other objects at risk of falling. Do not rush to the exits. • Keep away from windows or objects that are likely to fall. • Stay under cover until it appears the earthquake is over. Be prepared for aftershocks. • Report any damage/injuries to emergency responders by calling 911 as soon as possible.
Notify Flavor Farms Management. Give whatever assistance you can to injured or disabled people. Use common sense and keep safety as a top priority when attempting to search and rescue.
• Follow instructions given from emergency personnel.
Bomb ThreatIn the event of a bomb threat:
Assume that any bomb threat is a real danger to occupants and property. Be calm and courteous.
Listen and do not interrupt the caller. If possible, ask someone else to notify security while the caller is on the line. If a device is spotted a runner should be sent to notify security immediately.
Questions to ask if possible:
28859.00023\40396539 I 18
• When is the bomb going to explode?
• Where is it right now?
• What does it look like?
• What kind of bomb is it?
• What will cause it to explode?
• Why Did you place the bomb?
• What is your name?
Take Note of:
• Whether the callers voice is male/female, age approximation; • Tone of Voice and Language used;
• Background noises;
• Any other remarks.
Carefully make a visual survey of your immediate working space. If you see/hear anything unusual, DO NOT TOUCH; report it to security immediately. Follow any instructions for evacuation by security, or emergency responders.
BlackoutsIn the event of a blackout:
Emergency location: Employees should not evacuate the building unless instructed to do so by Security or Flavor Farms' Management.
Accessibility issues: Plan for accommodating employees who have limited mobility to ensure they will be able to move about or relocate their workspace to an area where risk can be avoided.
Protection of equipment: Tum off power supplies, surge protectors, power strips etcetera to protect electronic equipment when the electricity is turned back on.
Emergency Backup: Ensure that any backup generator sources are tested and readily available to power critical equipment. In the case of battery operated devices, batteries should be checked and fully charged.
Contact lists: Ensure that your agency or department's phone trees are current and that complete and continuously updated list of emergency contacts is distributed, as appropriate. 28859 00023\40396539 1 19
EXHIBIT E
RESOLUTION 2024-XXXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GUSTINE
APPROVING THE PROPOSED AMENDMENTS TO THE EXISTING OPERATING AGREEMENT WITH FLAVOR FARMS, LLC TO OPERATE A COMMERCIAL CANNABIS BUSINESS AT 355 4TH STREET WHEREAS, the City of Gustine has previously entered into an Operating Agreement with Flavor Farms, LLC to operate a commercial cannabis business; and WHEREAS, the Agreement is a requirement for the continued operation of the business; and
WHEREAS, Gustine Police Department reports the existing cannabis business in the City to date has not provided any sort of nuisance in the city, including providing no increase in crime that is attributable to the start of the business; and WHEREAS, the operation of the existing cannabis business in the City has provided a significant economic impact to the City; and
WHEREAS, the City of Gustine and the applicant agree to proposed minor changes to the signed Operating Agreement as shown in the attached Amendment No. 01 ; and WHEREAS, the attached Amendment allows the City to retain all of the original protections, assurances and requirements of the Existing Agreement; and WHEREAS, the Planning Commission approved a Resolution at its October 23, 2024 meeting recommending the City Council approve the proposed amendments; NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Gustine, that it adopts the proposed Amendment No. 01 in regard to the commercial cannabis business at the above address.
THE FOREGOING RESOLUTION of the City Council of the City of Gustine was passed by the Council at a regular meeting held on the 19th day of November 2024, and the resolution was adopted by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
ATTEST:
Melanie Correa, Deputy City Clerk
City of Gustine
APPROVED:
Patrick Nagy, Mayor
City of Gustine
EXHIBIT E-1
AMENDMENT NO. 01
TO THE OPERA TING AGREEMENT
BETWEEN
CITY OF GUSTINE
AND
FLAVOR FARMS, LLC
This Amendment No. 01 to the Operating Agreement ("Amendment No. 01") is made and entered into as of this _day of __ , 2024, by and between City of Gustine ("City") and Flavor Farms, LLC. (Owner"). City and Owner are sometimes individually referred to as "Party" and collectively as "Parties."
Recitals
A. Existing Agreement. The Parties have entered into an agreement entitled First Amended Operating Agreement dated August 16, 2022 ("Existing Agreement) which is incorporated herein by reference as if fully set forth herein, for the purpose of the development and operation of a Commercial Cannabis establishment.
B. Amendment Purpose. City and Owner wish to amend the Existing Agreement to extend the expiration date and to modify one small section of the agreement for clarity.
C. Amendment Authority. This Amendment No. 01 is authorized pursuant to Section 3 of the Existing Agreement and Section 17.
Amendment
Now therefore, the Parties hereby modify the Existing Agreement as follows:
1. Definitions. All capitalized terms used in this Amendment No. 01 shall have the same meaning as set forth in the Existing Agreement if defined in the Existing Agreement.
2. Section 3 of the Existing Agreement. Section 3 of the Existing Agreement is hereby replaced with the following italicized text:
Term of Agreement. The Term of this Agreement shall commence on the Amendment Date and continue until December 31, 2026 ("Amended Term"), subject to variable payment obligations as set forth in Section 6, unless earlier terminated as specified in this Agreement. Prior to the expiration of the Initial Term and any subsequent Renewal Period, the Parties may mutually agree to extend the Term of this Agreement for an additional term to be negotiated upon a written request for such extension (each a "Renewal Period").
3. Section 6 (D.) ii of the Existing Agreement. Section 6 (D.) ii of the Existing Agreement is hereby replaced with the following italicized section that changes the commencement date for annual donation and removes a portion of the language of the first sentence to now read as follows:
ii. The Cannabis Business agrees to donate $20,000 to the City per fiscal year, beginning the City Fiscal year in which the business opens, unless otherwise reasonably agreed by the City due to timing of State licensing and commencement of business operations. The acceptance and use of the donations shall be subject to City Council approval, with input from the Cannabis Business. Nothing in this Agreement binds the City to acceptance of the donations or use of funds for particular events, nor shall this Agreement in any way operate to restrict or bind the City Council's discretion and legislative authority.
4. Continuing Effect of Agreement. All provisions of the Existing Agreement otherwise remain in full force and effect and are reaffirmed. From and after the date of this Amendment No. 01, whenever the term "Agreement" appears in the Existing Agreement, it shall mean the Existing Agreement as amended by this Amendment No. 01.
5. 6.
Adequate Consideration. The Parties hereto irrevocably stipulate and agree that they have each received adequate and independent consideration for the performance of the obligations they have undertaken pursuant to this Amendment No. 01.
Severability. If any portion of this Amendment No. 01 is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect.
CITY OF GUSTINE
Approved By:
Printed Name
Title
Signature
Date
FLAVOR FARMS, LLC
Approved By:
Printed Name
Title
Signature
Date
OPERA TING AGREEMENT FOR CANNABIS BUSINESS
LOCATED IN THE CITY OF GUSTINE
FLAVOR FARMS -355 4TH STREET, GUSTINE, CA 95322
This Operating Agreement for a Cannabis Business (hereinafter "Agreement"), dated 1144at_[l@, 2 2j-("Effective Date"), is entered into by and between tie City of Gustine (the jjy"), a California municipal corporation, and Flavor Farms Gustine, LLC ("Cannabis Business"), a California corporation. The City and Cannabis Business may be referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, the Cannabis Business submitted an application to the City for a use permit to conduct certain commercial cannabis uses in the City, located at 355 4th Street, Gustine, California 95322 ("Subject Property"); and
WHEREAS, the City granted a use permit to the Cannabis Business on August 16, 2022, to permit indoor cannabis cultivation and cannabis distribution activities at the Subject Property, subject to conditions of approval, issuance of a cannabis business permit, and execution of this Agreement; and
WHEREAS, Section 5-8-6(a)(9) of the Gustine Municipal Code provides that the City shall enter into an Operating Agreement and Indemnification, in conjunction with the issuance of a cannabis business permit, in which the Cannabis Business agrees to abide by the requirements of the Municipal Code and any other operating terms and conditions as mutually agreed by the Parties; and
WHEREAS, the City Council of the City of Gustine has determined that both community benefits and potential adverse impacts may result from the operation of cannabis businesses in the City, and therefore desires to ensure all such impacts are adequately mitigated and offset by the potential community benefits the businesses can provide to the City and its residents; and WHEREAS, the Cannabis Business and the City have mutually agreed to certain minimum payments to the City to provide for projects, programs, and other services and activities that will positively contribute to the community and account for any adverse impacts or increases in need for services caused by the operation of the Cannabis Business in the community.
NOW, THEREFORE, in consideration of the mutual promises, conditions, and covenants set forth herein, the Parties agree as follows:
AGREEMENT
1. Incorporation of Recitals. The Recitals, and all defined terms set forth in this Agreement, are hereby incorporated into this Agreement as if set forth herein in full.
2. Definitions. The following terms shall have the following meanings for purposes of this Agreement, but other terms may be defined elsewhere in this Agreement. 28859.00023\40581 312. l
A. "Cannabis business permit" means the regulatory permit issued by the City to the Cannabis Business pursuant to the provisions of Chapter 8 of Title 5 (hereafter, "Chapter 5-8") of the Gustine Municipal Code.
B. "Canopy" means the designated area(s) at a licensed premises that will contain mature plants at any point in time. Canopy shall be calculated in square feet and measured using clearly identifiable boundaries of all area(s) that will contain mature plants at any point in time, including all of the space(s) within the boundaries. Canopy may be noncontiguous but each unique area included in the total canopy calculation shall be separated by an identifiable boundary such as an interior wall or by at least ten feet of open space. If mature plants arc being cultivated using a shelving system, the surface area of each level shall be included in the total canopy calculation.
C. "City Manager" means the City Manager and his or her designee.
D. "City Permits" means and includes all building permits, use permits, zoning amendments, operating agreements, development agreements, and other permits, including the cannabis business permit, licenses, entitlements, and agreements that the City, acting in its governmental capacity, must issue or approve for the Cannabis Business to operate in accordance with the City's regulations and this Agreement.
E. "Commencement Date" means the date that all ofthc following have occurred: (1) the City has issued all necessary City Permits; (2) the Cannabis Business has obtained all necessary State Licenses to operate; and (3) the Cannabis Business has obtained a certificate of occupancy.
F. "Cultivation" means and includes any activity involving the planting, growing, harvesting, or processing (including drying, curing, grading, trimming, storing, packaging, or labeling) of nonmanufactured cannabis. Cultivation includes indoor, mixed-light, natural light, or nursery cultivation.
G. "Distribution" means the procurement, sale, and transport of cannabis and cannabis products between entities licensed pursuant to state and local law.
H. "Effective Date" means the date first entered above as the Effective Date that both Parties have signed this Agreement.
I. "Gross Receipts" means the total amount actually received or receivable from sales and the total amounts actually received or receivable for the performance of any act or service, of whatever nature it may be, for which a charge is made or credit allowed, whether or not such act or service is done as a part of or in connection with the sale of materials, goods, wares or merchandise. Included in "gross receipts" shall be all receipts, cash, credits and property of any kind or nature, without any deduction therefrom on account of the cost of the property sold, all cost of materials used, labor or service costs, interest paid or losses or other expenses. The following shall not be included in the definition of "Gross Receipts: (1) Cash discounts allowed and taken on 2 28859.00023\40581312.1
sales; (2) Such part of the sale price of property returned by purchasers upon rescission of the contract of sale as is refunded either in cash or by credit; and (3) Receipts of refundable deposits, except that refundable deposits forfeited and taken into income of the business shall not be excluded.
J. "Manager" means a person with responsibility and authority over the establishment, management, supervision, or oversight of the operation of the Cannabis Business.
K. "State License" means all licenses required to be issued by the State of California for operation of the Cannabis Business pursuant to Division 10 of the Business and Professions Code and applicable state regulations, including but not limited to Division 42 of Title 16, Division 8 of Title 3, and Division 1 of Title 17 of the California Code of Regulations, as those provisions may be amended.
L. "Term" means the period of time this Agreement is in effect, and any renewal periods, as specified in Section 3.
M. "Use Permit" means the use permit, including any and all conditions of approval, issued by the City to the Cannabis Business pursuant to the City's Zoning Code, as approved by the City Council on or about September 3, 2019, as may be amended, related to the operation of a commercial cannabis business at the Subject Property.
3. Term of Agreement. The Term of this Agreement shall commence on the Effective Date and continue until December 31, 2024 ("Initial Term"), subject to variable payment obligations as set forth in Section 6, unless earlier terminated as specified in this Agreement. Prior to the expiration of the Initial Term and any subsequent Renewal Period, the Parties may mutually agree to extend the Term of this Agreement for an additional term to be negotiated upon a written request for such extension (each a "Renewal Period").
4. General Terms and Conditions. The Cannabis Business shall comply with al1 of the following terms and conditions for the Tenn of this Agreement:
A. This Agreement is only valid for the Cannabis Business to operate at the Subject Property identified in this Agreement. The rights and obligations set forth in this Agreement shall not be transferred, assigned, or assumed unless agreed to in advance in writing by the City. The Cannabis Business expressly acknowledges, understands and agrees that nothing in this Agreement confers any ongoing vested property right or entitlement to conduct the Cannabis Business, or any other commercial cannabis activity, at the Subject Property; this Agreement sets forth only the operational requirements of the Cannabis Business as otherwise approved by the City.
B. Conditions placed on any City Permits, expressly including the Cannabis Business Permit, the Use Permit, and the Development Agreement, as applicable, shall be conditions and requirements of this Agreement. Violations of the City Permits shall be deemed violations of this Agreement and shall constitute a material breach of this Agreement. Violations of any applicable State Licenses shall be deemed violations of this Agreement and shall constitute a material breach of this Agreement. 3 28859.00023\40581312.1
C. The Cannabis Business shall obtain and maintain at all times a valid Cannabis Business Permit, Use Permit, and applicable State License(s) prior to and during operation of the Cannabis Business.
i. As soon as practicable, the Cannabis Business shall inform the City when it obtains its necessary State License(s), and shall provide a copy of the State License(s) to the City Manager. The City shall cooperate with the Cannabis Business as appropriate and as needed to facilitate the State's issuance of a State License(s) to the Cannabis Business.
11. The Cannabis Business agrees to provide City with copies of any reports provided to a State cannabis licensing agency, including any required financial or compliance reports, within thirty (30) days of that submission and further agrees to keep such records in accordance with State law and Chapter 5-8 of the Gustine Municipal Code.
iii. The City shall diligently process the Cannabis Business's applications for all City Permits. This Agreement does not commit the City in advance to approve the City Permits; nor does this Agreement constrain the City's discretion to determine compliance with all requirements regarding issuance of any City Permits.
Nothing in this Agreement relieves the Cannabis Business of the obligation to comply with all requirements and application procedures set forth in Chapter 5-8 of the Gustine Municipal Code.
D. The Cannabis Business understands, acknowledges and agrees to comply with all applicable then-existing state and local laws and regulations applicable to operation of the Cannabis Business, including Chapters 5-8 of the Gustine Municipal Code.
E. The City shall have the power to audit and examine all books and records of the Cannabis Business, including both State and Federal income tax returns, California sales tax returns, or other evidence documenting the gross receipts of the Cannabis Business. for the purpose of ascertaining the gross receipts to determine the amount of the Community Benefit Payment required to be paid by this Agreement, and for the purpose of verifying any statements or item thereof when filed by the Cannabis Business. If the Cannabis Business, after written demand by the City, refuses to make available for audit, examination, or verification such books or records as the City requests, the City may, after full consideration of all information within his or her knowledge, make an assessment he or she determines to be the closest, best estimate of the Cannabis Business's Community Benefit Payment due.
5. Operational Requirements. In addition to all operating requirements set forth in Chapter 5-8 of the Gustine Municipal Code, the Cannabis Business shall comply with the following specific operational requirements:
A. The Cannabis Business shall immediately notify the City Police Department of any criminal activity, or suspected criminal activity, occurring at the Subject Property. In the event of any internal security system breach, including a faulty alann system, broken or damaged surveillance cameras or other video recording equipment, or broken or 4 28859.00023\40581312.1
damaged locks, doors, or lighting which may increase risk of criminal activity at the Subject Property, the Manager of the Cannabis Business shall notify the City Police Department as soon as practicable after becoming aware of the security system breach.
The Cannabis Business shall diligently attempt to fix or resolve any such security breach immediately; if circumstances require additional time and delay to remedy, the Cannabis Business shall so notify City police and provide an estimated timeline the breach will be cured.
B. If the Cannabis Business receives any criminal threats, or otherwise suspects any criminal targeting related to movement of product or cash from or to the Subject Property, the Cannabis Business shall immediately notify the City Police Department.
C. The Cannabis Business shall abide by the following hours of operation:
i. Indoor Cultivation (not open to the public)7a.m. to 7 p.m., seven (7) days per week on a regular basis. However, the Cannabis Business may extend these business hours during peak cultivation periods, in the Cannabis Business's sole discretion, in order to operate up to a maximum of 24 hours per day, upon notice to the City.
ii. Distribution (not open to the public) -7a.m. to 7 p.m., seven (7) days per week.
6. Consideration. As consideration for the rights and benefits it enjoys under this Agreement, including its operation of approved cannabis uses in the City during the Term, the Cannabis Business shall do all of the following:
A. Community Benefit Payments. The Cannabis Business shall pay to the City a community benefit fee in the amounts and on the schedule set forth below:
28859.00023\40581312.1
Cultivation
Commencing on Effective Date and
terminating on December 31, 2023: 2.5% of
Gross Receipts derived from cannabis
Cultivation, to be paid on a monthly basis as
set forth in Section 6.B. No fee will be
charged when Cultivation activities are
undertaken exclusively for the benefit of the
5
Cannabis Business, and the Cannabis Business
does not realize any Gross Receipts from such
Cultivation activities.
Commencing on January 1, 2024 and
terminating on December 31, 2024: 3.5% of
Gross Receipts derived from cannabis
Cultivation, to be paid on a monthly basis as
set forth in Section 6.8. No fee will be
charged when Cultivation activities are
undertaken exclusively for the benefit of the
Cannabis Business, and the Cannabis Business
does not realize any Gross Receipts from such
Cultivation activities.
Commencing on Effective Date and
terminating on December 31, 2023: 3% of
Gross Receipts derived from cannabis
Distribution, to be paid on a monthly basis as
set forth in Section 6.B. No fee will be
charged when Distribution activities are
undertaken exclusively for the benefit of the
Cannabis Business, and the Cannabis Business
does not realize any Gross Receipts from such
Distribution activities.
Distribution
Commencing on January 1, 2024 and
terminating on December 31, 2024: 6% of
Gross Receipts derived from cannabis
Distribution, to be paid on a monthly basis as
set forth in Section 6.B. No fee will be
charged when Distribution activities are
undertaken exclusively for the benefit of the
Cannabis Business, and the Cannabis Business
does not realize any Gross Receipts from such
Distribution activities.
B.Monthly Payments: The Monthly Cultivation Payment and Monthly Distribution Payment (collectively, "Monthly Payments") shall be paid together and calculated per calendar month, due and payable on the I5th day of the subsequent calendar month. By way of example only, Monthly Payments for the month of September would be calculated from September 1 through September 30, due and payable on October 15.
6 28859.00023\40581312.1
a. If a Monthly Payment is not paid in full within fifteen (15) days after it is due and payable, the Monthly Payment shall accrue a penalty of five percent (5%) compounding for each month the Monthly Payment is late, until the Monthly Payment and all penalties are paid in full. b. Monthly Payments shall be made to the City's Finance Department.
In the event the Cannabis Business intends to pay a Monthly Payment in cash in an amount that exceeds $10,000, the Cannabis Business shall notify the City in advance to make prior arrangements. c. The Cannabis Business shall keep accurate and adequate records and documentation to reflect its monthly Gross Receipts. Pursuant to Chapter 5-8 of the Gustine Municipal Code, the Cannabis Business shall maintain all such records for at least three (3) years, and shall produce those records to the City within 24 hours after receipt of the City's request.
d. Accompanying the Monthly Payments, the Cannabis Business shall deliver to the City a report ("the Monthly Report") showing (1) Gross Receipts of the Cannabis Business for the immediate prior month; 2) a cumulative total of all amounts of Gross Receipts received by the Cannabis Business to date for the calendar year, (3) a calculation of the Monthly Payment currently due to the City; and (4) a calculation of the cumulative total of all Monthly Payments made to the City to date for the calendar year.
C. Cannabis Tax: In the event that City voters approve a cannabis-specific tax to be imposed on cannabis businesses operating in the City, including the Cannabis Business, the Cannabis Business shall pay the cannabis tax or the Monthly Payments, whichever is greater, for the remaining term of this Agreement. Nothing in this Agreement shall relieve the Cannabis Business of the obligation to pay all applicable State and local taxes, including a possible future City cannabis tax.
D. Communitv Contributions. The Cannabis Business, as part of its project proposal submitted to the City and accepted and approved by the City Council, promised to make certain additional community contributions to the City of Gustine to ensure that any potential adverse impacts of the Cannabis Business are adequately offset by the business's positive community contributions. Accordingly, the Cannabis Business agrees to provide the following:
i. Cannabis Business shall strive to hire or contract with local Gustine residents and businesses, as applicable and in accordance with all federal and state laws, if such residents and businesses apply and are qualified for the position or role sought. The purpose of this commitment is to promote and foster increased job opportunity and growth in the City, as promised and projected by the Cannabis Business. Cannabis Business shall not engage in unlawful discriminatory hiring practices, nor shall this Agreement be construed to condone discriminatory hiring practices
7 28859.00023\40581312.
ii. The Cannabis Business agrees to donate $20,000 to the City per fiscal year, beginning Fiscal Year 2023, unless otherwise reasonably agreed by the City due to timing of State licensing and commencement of business operations, to be used toward a community event or events held in the City. The acceptance and use of the donations shall be subject to City Council approval, with input from the Cannabis Business. Nothing in this Agreement binds the City to acceptance of the donations or use of funds for particular events, nor shall this Agreement in any way operate to restrict or bind the City Council's discretion and legislative authority.
7. Termination. The City and/or Cannabis Business may terminate this Agreement prior to expiration of the Term for the reasons and subject to the requirements set forth below. The Cannabis Business understands and acknowledges that the right to operate the Cannabis Business is expressly contingent on full execution of an Operating Agreement, as required by Section 5-8-6(a)(9) of the Gustine Municipal Code. As such, termination of this Agreement shall result in the immediate termination of the Cannabis Business's operations, unless and until a new Operating Agreement is executed by the Parties
A. City's Termination Rights Without prejudice to its other remedies at law or in equity, the City may terminate this Agreement, at any time and in its sole discretion, effective thirty (30) days after the City provides written notice of termination to the Cannabis Business, if any of the following circwnstances occurs:
i. The Cannabis Business breaches its obligation to pay the Monthly Payments when due and fails to cure the breach within thirty (30) days after the City provides the Cannabis Business with a written notice of default. ii. The Cannabis Business breaches its obligation to perform in accordance with any material provision of this Agreement, other than the obligation to pay the Monthly Payment, and: (A) does not cure the breach within thirty (30) days after the City provides the Cannabis Business with a written notice of breach or, if the breach cannot reasonably be cured within 30 days, (B) does not begin work to cure the breach within thirty (30) days after the City provides the Cannabis Business with a written notice of breach. The Parties may mutually agree in writing to extend the time period to cure the breach. The express designation in this Agreement of a provision as "material" does not imply that other provisions are not material.
iii. The Cannabis Business fails to obtain and maintain at all times prior to and during operation of the Cannabis Business a valid Cannabis Business Permit and State License(s), or violates any provision law or condition of approval of the Use Permit or other City Permits, as determined in the City's sole discretion. iv. The uses and business activities of the Cannabis Business are declared unlawful by order of Court, or become illegal by operation of State law.
B. Cannabis Business's Termination Rights, The Cannabis Business may, at any time and in its sole discretion, effective thirty (30) days after the Cannabis Business provides 8 28859.00023\40581312.1
written notice of termination to the City, may terminate this Agreement if the Cannabis Business has permanently ceased operations, or intends to cease operations within thirty (30) days, in the City of Gustine.
8. Release & Indemnification. The Cannabis Business shall release and hold harmless the City, its agents, officers, elected officials, staff and employees (collectively, "City Parties") from any and all claims, injuries, damages, or liabilities of any kind arising from: (i) any repeal or amendment of Chapter 5-8 of the Gustine Municipal Code, or any provision of the Zoning Code relating to the Cannabis Business, and (ii) any arrest or prosecution of the Cannabis Business or its owners, Managers, staff, employees, or members for violation of state or federal laws. The Cannabis Business shall further defend, indemnify and hold harmless the City Parties from and against any and all claims or actions: (i) brought by adjacent or nearby property owners or any other parties for any damages, injuries, or other liabilities of any kind arising from or related to the Cannabis Business operations at the Subject Property, and (ii) brought by any party for any problems, injuries, damages, or other liabilities of any kind, including bodily injury, death or property damage, arising out of the distribution and delivery of cannabis or cannabis products from or to the Subject Property. The obligations in this Section 8 shall survive any expiration or termination of this Agreement.
9. Insurance.
A. Time for Compliance. The Cannabis Business shall not begin operations until it has provided evidence satisfactory to the City that it has secured all insurance required under this section. Failure to provide and maintain all required insurance shall constitute a material breach of this Agreement.
B. Types of Required Coverages, Without limiting the indemnity provisions of this Agreement, the Cannabis Business shall procure and maintain in full force and effect during the term of the Agreement, the following policies of insurance:
i. Commercial General Liability, Commercial General Liability Insurance which affords coverage at least as broad as Insurance Services Office "occurrence" form CG 0001, with minimum limits of at least $1,000,000 per occurrence.
Defense costs shall be paid in addition to the limits.
The policy shall contain no endorsements or provisions limiting coverage for (1) products and completed operations; (2) contractual liability; (3) third party action over claims; or (4) cross liability exclusion for claims or suits by one insured against another.
ii. Automobile Liability. Automobile Liability Insurance with coverage at least as broad as Insurance Services Office Form CA 0001 covering "Any Auto" (Symbol 1) with minimum limits of $1,000,000 each accident. iii. Workers' Compensation, Workers' Compensation Insurance, as required by the State of California and Employer's Liability Insurance with a limit of not less than $1,000,000 per accident for bodily injury and disease. 9 28859.00023\40581312.1
If coverage is written on a claims-made basis. the retroactive date shall precede the effective date of the initial Agreement and continuous coverage will be maintained or an extended reporting period wi 11 be exercised for a period of at least three (3) years from termination or expiration of this Agreement.
C. Endorsements.
i. The policy or policies of insurance required by this section for Commercial General Liability and Automobile Liability shall be endorsed to provide the following:
a. Additional [nsured, The City's indemnified parties shall be additional insureds with regard to liability and defense of suits or claims arising out of the performance of the Agreement. Additional Insured Endorsements shall not (1) be restricted to "ongoing operations"; (2) exclude "contractual liability"; (3) restrict coverage to "sole" liability of Consultant; or (4) contain any other exclusions contrary to the Agreement.
b. Primary Insurance and Non-Contributing Insurance, This insurance shall be primary and any other insurance, deductible, or self-insurance maintained by the indemnified parties shall not contribute with this primary insurance.
c. Severa hi I it v. In the event of one insured, whether named or additional, incurs liability to any other of the insureds, whether named or additional, the policy shall cover the insured against whom claim is or may be made in the same manner as if separate policies had been issued to each insured, except that the limits of insurance shall not be increased thereby.
d. Cancellation. The policy shall not be canceled or the coverage suspended, voided, reduced or allowed to expire until a thirty (30) day prior written notice of cancellation has been served upon the City except ten (10) days prior written notice shall be allowed for non-payment of premium.
e. Duties, Any failure by the named insured to comply with reporting provisions of the policy or breaches or violations of warranties shall not affect coverage provided to the indemnified parties.
f. Applicability, That the coverage provided therein shall apply to the obligations assumed by the Cannabis Business under the indemnity provisions of this Agreement, unless the policy or policies contain a blanket form of contractual liability coverage.
ii. The policy or policies of insurance required by this section for Workers' Compensation shall be endorsed, as follows:
10 28859 00023\40581312.1
a. Waiver of Subrogation; A waiver of subrogation stating that the insurer waives all rights of subrogation against the City's indemnified parties. b. Cancellation, The policy shall not be canceled or the coverage suspended, voided, reduced or allowed to expire until a thirty (30) day prior written notice of cancellation has been served upon the City except ten (10) days prior written notice shall be allowed for non-payment of premium.
D. Deductible. Any deductible or self-insured retention must be approved in writing by the City and shall protect the City's indemnified parties in the same manner and to the same extent as they would have been protected had the policy or policies not contained a deductible or self-insured retention.
E. Evidence of Insurance. The Cannabis Business shall, concurrently with execution of this Agreement or as soon thereafter as may be authorized by the City, deliver either certified copies of the required policies, or original certificates and endorsements on forms approved by the City. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf. At least fifteen ( 15) days prior to the expiration of any such policy, evidence of insurance showing that such insurance coverage has been renewed or extended shall be filed with the City. If such coverage is cancelled or reduced, the Cannabis Business shall, within ten ( I 0) days after receipt of written notice of such cancellation or reduction of coverage, file with the City evidence of insurance showing that the required insurance has been reinstated or has been provided through another insurance company or companies.
F. Failure to Maintain Coverage. The Cannabis Business agrees to suspend and cease all operations hereunder during such period of time if the required insurance coverage is not in effect and evidence of insurance has not been furnished to the City.
G. Acceptability of Insurers. Each such policy shall be from a company or companies with a current A.M. Best's rating of no less than A:VII and authorized to do business in the State of California, or otherwise allowed to place insurance through surplus line brokers under applicable provisions of the California Insurance Code or any federal law.
H. Insurance for Subcontractors. All subcontractors shall be included as additional insureds under the Cannabis Business's policies, or the Cannabis Business shall be responsible for causing subcontractors to purchase the appropriate insurance in compliance with the terms of this Agreement, including adding the City as an Additional Insured.
10. Notice. Any notice or other communication provided pursuant to this Agreement must be in writing and shall be considered properly given and effective only when mailed or delivered in the manner provided by this Section to the persons identified below. A mailed notice or other communication shall be considered given and effective on the third day after it is deposited in the United States Mail (certified mail and return receipt requested). A notice or other communication sent in any other manner will be effective or will be considered properly given when actually 11 288859.00023\40581312 1
delivered. A Party may change its address for these purposes by giving written notice of the change to the other Party in the manner provided in this Section.
If to the City:
City of Gustine
Attn: City Manager
352 Fifth Street, Gustine CA 95322
If to Cannabis Business:
Flavor Farms
Attn: Andres Sanchez
2813 Canyon Falls Drive, Merced CA
95341
11. Force Majeure.
A. "Force Majeure Event" means a cause of delay that is not the fault of the Party who is required to perform under this Agreement and is beyond that Party's reasonable control, including the elements (such as floods, earthquakes, windstorms, and unusually severe weather), fire, energy shortages or rationing, riots, acts of terrorism, war or war-defense conditions, acts of any public enemy, epidemics, the actions or inactions of any governmental entity (excluding the City) or that entity's agents, litigation, labor shortages (including shortages caused by strikes or walkouts), and materials shortages.
B. Except as otherwise expressly provided in this Agreement, if the performance of any act required by this Agreement to be performed by either the City or Cannabis Business is prevented or delayed because of a Force Majeure Event, then the time for performance shall be extended for a period equivalent to the period of delay, and performance of the act during the period of delay will be excused.
12. Waiver. A Party's failure to insist on strict performance of this Agreement or to exercise any right or remedy upon the other Party's breach of this Agreement shall not constitute a waiver of any performance, right, or remedy. A Party's waiver of the other Party's breach of any provision in this Agreement shall not constitute a continuing waiver or a waiver of any subsequent breach of the same or any other provision. A waiver is binding only if set forth in writing and signed by the waiving Party.
13. Relationship of Parties. This Agreement does not create any employment relationship, ownership interest, or other association between the City and Cannabis Business. Nothing herein shall be construed to create the relationship of principal and agent, partnership or other joint venture between the City and Cannabis Business.
14. Attorneys' Fees. The Party prevailing in any litigation concerning this Agreement, the Subject Property, or the Cannabis Business operations, shall be entitled to an award by the court ofreasonable attorneys' fees and litigation costs. If the City is the prevailing party, then this Section shall apply whether the City is represented in the litigation by the designated City Attorney or by outside counsel.
15. Severability. lf a court with jurisdiction finds any provision of this Agreement to be invalid, void, or unenforceable, then the remaining provisions shall remain in full force and effect, and to this end this Agreement shall be severable.
12 28859.00023\40581312.1
16. Counterparts. The parties may execute this Agreement in counterparts, each of which shall constitute an original, but all of which shall collectively constitute this same Agreement.
17. Integration and Modification. This Agreement sets forth the Parties' entire understanding and agreement regarding the matters addressed herein. This Agreement supersedes all prior or contemporaneous agreements, representations, and negotiations (written, oral, express, or implied) and may be modified only by written agreement signed by both Parties. (Signature Page Follows)
13 28859.00023\40581312.1
City of Gustine
(M{l
4ij 41 Dae: lo2/2oi
Approved as to Form
Gustine City Attorney
By:
14
RESOLUTION 2024-086
A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF GUSTINE
RECOMMENDING THE CITY COUNCIL APPROVE PROPOSED AMENDMENTS TO THE
EXISTING DEVELOPMENT AGREEMENT WITH TIP TOP FARMS, LLC TO OPERATE A COMMERCIAL CANNABIS BUSINESS AT 377 4TH STREET
WHEREAS, the City of Gustine has previously entered into a Development Agreement with Tip Top Farms, LLC to operate a commercial cannabis business; and WHEREAS, the City Council subsequently approved a First Amendment to that agreement; and
WHEREAS, the Agreement is a requirement for the continued operation of the business; and
WHEREAS, Gustine Police Department reports the existing cannabis business in the City to date has not provided any sort of nuisance in the city, including providing no increase in crime that is attributable to the start of the business; and WHEREAS, the operation of the existing cannabis business in the City has provided a significant economic impact to the City; and
WHEREAS, the City of Gustine and the applicant agree to proposed minor changes to the signed Development Agreement as shown in the attached Amendment No. O I-A; and
WHEREAS, the attached Amendment allows the City to retain all of the original protections, assurances and requirements of the Existing Agreement; and WHEREAS, the Planning Commission is acting with this Resolution in its function of providing recommendations to the City Council;
NOW, THEREFORE, BE IT RESOLVED, by the Planning Commission of the City of Gustine, that it recommends that the City Council adopt the proposed Amendment No. 01-A in regard to the commercial cannabis business at the above address.
THE FOREGOING RESOLUTION of the Planning Commission of the City of Gustine was passed by the Commission at a regular meeting held on the 23 day of October 2024, and the resolution was adopted by the following vote:
AYES: Duprel, Medeiros, Lackey
NOES: None
ABSTAIN: None
ABSENT: Gomes
Planning Commission Choir
APPRO� � /h�
ATTE�----=====.
Melanie Correa, Deputy City Clerk
City of Gustine
RESOLUTION 2024-087
A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF GUSTINE
RECOMMENDING THE CITY COUNCIL APPROVE PROPOSED AMENDMENTS TO THE
EXISTING OPERATING AGREEMENT WITH TIP TOP FARMS, LLC TO OPERATE A COMMERCIAL CANNABIS BUSINESS AT 377 4TH STREET
WHEREAS, the City of Gustine has previously entered into an Operating Agreement with Tip Top Farms, LLC to operate a commercial cannabis business; and WHEREAS, the City Council subsequently approved a First Amendment to that agreement; and
WHEREAS, the Agreement is a requirement for the continued operation of the business; and
WHEREAS, Gustine Police Department reports the existing cannabis business in the City to date has not provided any sort of nuisance in the city, including providing no increase in crime that is attributable to the start of the business; and WHEREAS, the operation of the existing cannabis business in the City has provided a significant economic impact to the City; and
WHEREAS, the City of Gustine and the applicant agree to proposed minor changes to the signed Operating Agreement as shown in the attached Amendment No. O1-A; and
WHEREAS, the attached Amendment allows the City to retain all of the original protections, assurances and requirements of the Existing Agreement; and WHEREAS, the Planning Commission is acting with this Resolution in its function of providing recommendations to the City Council;
NOW, THEREFORE, BE IT RESOLVED, by the Planning Commission- of the City of Gustine, that it recommends that the City Council adopt the proposed Amendment No. 01-A in regard to the commercial cannabis business at the above address.
THE FOREGOING RESOLUTION of the Planning Commission of the City of Gustine was passed by the Commission at a regular meeting held on the 23 day of October 2024, and the resolution was adopted by the following vote:
AYES: Duprel, Medeiros, Lackey
NOES: None
ABSTAIN: None
ABSENT: Gomes
ATTEST:�------------
Melanie Correa, Deputy City Clerk
City of Gustine
APPROVED/?7
/=
RESOLUTION 2024-088
A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF GUSTINE
RECOMMENDING THE CITY COUNCIL APPROVE PROPOSED AMENDMENTS TO THE
EXISTING DEVELOPMENT AGREEMENT WITH FLAVOR FARMS, LLC TO OPERATE A COMMERCIAL CANNABIS BUSINESS AT 355 4TH STREET
WHEREAS, the City of Gustine has previously entered into a Development Agreement with Flavor Farms, LLC to operate a commercial cannabis business; and WHEREAS, the Agreement is a requirement for the continued operation of the business; and
WHEREAS, Gustine Police Department reports the existing cannabis business in the City to date has not provided any sort of nuisance in the city, including providing no increase in crime that is attributable to the start of the business; and WHEREAS, the operation of the existing cannabis business in the City has provided a significant economic impact to the City; and
WHEREAS, the City of Gustine and the applicant agree to proposed minor changes to the signed Development Agreement as shown in the attached Amendment No. 01; and
WHEREAS, the attached Amendment allows the City to retain all of the original protections, assurances and requirements of the Existing Agreement; and WHEREAS, the Planning Commission is acting with this Resolution in its function of providing recommendations to the City Council;
NOW, THEREFORE, BE IT RESOLVED, by the Planning Commission of the City of Gustine, that it recommends that the City Council adopt the proposed Amendment No. 01 in regard to the commercial cannabis business at the above address.
T THE FOREGOING RESOLUTION of the Planning Commission of the City of Gustine was passed by the Commission at a regular meeting held on the 23 day of October 2024, and the resolution was adopted by the following vote:
AYES: Duprel, Medeiros, Lackey
NOES: None
ABSTAIN: None
ABSENT: Gomes
an" Wm6.
M�t_y_C-_it y_C_-l er_k __
City of Gustine
Chair
RESOLUTION 2024-089
A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF GUSTINE
RECOMMENDING THE CITY COUNCIL APPROVE PROPOSED AMENDMENTS TO THE
EXISTING OPERATING AGREEMENT WITH FLAVOR FARMS, LLC TO OPERATE A COMMERCIAL CANNABIS BUSINESS AT 355 4TH STREET
WHEREAS, the City of Gustine has previously entered into an Operating Agreement with Flavor Farms, LLC to operate a commercial cannabis business; and WHEREAS, the Agreement is a requirement for the continued operation of the business; and
WHEREAS, Gustine Police Department reports the existing cannabis business in the City to date has not provided any sort of nuisance in the city, including providing no increase in crime that is attributable to the start of the business; and WHEREAS, the operation of the existing cannabis business in the City has provided a significant economic impact to the City; and
WHEREAS, the City of Gustine and the applicant agree to proposed minor changes to the signed Operating Agreement as shown in the attached Amendment No. O1; and WHEREAS, the attached Amendment allows the City to retain all of the original protections, assurances and requirements of the Existing Agreement; and WHEREAS, the Planning Commission is acting with this Resolution in its function of providing recommendations to the City Council;
NOW, THEREFORE, BE IT RESOLVED, by the Planning Commission of the City of Gustine, that it recommends that the City Council adopt the proposed Amendment No. 01 in regard to the commercial cannabis business at the above address.
THE FOREGOING RESOLUTION of the Planning Commission of the City of Gustine was passed by the Commission at a regular meeting held on the 23 day of October 2024, and the resolution was adopted by the following vote:
A YES: Duprel, Medeiros, Lackey
NOES: None
ABSTAIN: None
ABSENT: Gomes
ATTEST: I##tr
Awoygg
/z<_
Planning Commission Chair
Melanie Correa, Deputy City Clerk
City of Gustine
ITEM NO. 7
COUNCIL AGENDA ITEM
NOVEMBER 19, 2024
PREPARED BY: Jami Westervelt, Economic and Community Development Director SUBJECT: REAP 2.0 Local Allocation
BACKGROUND
The City continues to complete the necessary steps on its Sixth Cycle Housing Element (HE) required by the State of California. Beyond participation in the Merced County Multi-Jurisdictional Housing Element (MJHE) effort, the City has a substantial amount of additional works it is mandated to complete to implement the HE.
In order to complete the City-specific works the City contracted with Rincon Consultants, Inc., which is the consultant group that is putting together the documents for the MJHE submission as a whole. The additional contract approved by the Council in July 2024 included $155,299 for the most essential work.
At the time Council considered the contract, staff relayed that the City may be able to use additional housing-related funding to pay for that contract. Staff worked with HCD and was able to utilize its LEAP grant funds as it hoped, receiving reimbursement by check recently from HCD for approximately $65,000. Now, the City has received word that it will receive $103, 142 in the second round of Regional Early Action Planning (REAP
2.0) grant funding.
DISCUSSION
Merced County Association is charged with administering the REAP program funding, including REAP 2.0. There are two components to REAP 2.0: Regional competitive project funds and Local Sub-allocation funds that each jurisdiction may apply for.
The City of Gustine applied for its sub-allocation amount prior to the end of 2023 and revised the application in July 2024, based on additional direction that MCAG provided in light of conversations with HCD. MCAG notified the City on October 25, 2024 that the MCAG Governing Board approved its sub-allocation award. Attached to this item are the MCAG Grant agreement and the updated grant application that will be an attachment to the agreement. In order to accept the award, Council needs to approve the attached resolution.
Assuming the REAP 2.0 dollars can pay for the full remainder of the City-specific Rincon contract, which is approximately $90,000, the City would have nearly $13,000 in REAP
2.0 that the City could use on additional zoning work related to the Housing Element outside of the Rincon contract approved in July.
The City has more than enough additional work in this realm to utilize the REAP 2.0 dollars beyond the Rincon contract. Therefore, staff also asks Council to appropriate the remainder of the REAP funding at this time, anticipated not to exceed $13,000, which would allow staff to immediately utilize remaining REAP 2.0 to complete
additional work allowable in the award agreement.
FISCAL IMPACT
The REAP 2.0 program grant will provide $103,142 in funding for important and required HE and zoning work for the City. Without these dollars, the City would need to seek other funding sources, including its own general fund, to complete the necessary work.
If approved, staff will track the revenue and reimbursement from this grant and put this back into the General Fund (001) .
RECOMMENDATION
Staff recommends that the City Council adopt a resolution:
1. Approve the attached agreement accepting the REAP 2.0 Local Sub-Allocation grant funds and directing the City Manager to sign the grant agreement required by MCAG.
2. Amend the Fiscal Year 2024-2025 budget by increasing appropriations in the General Fund 001 in the amount of $13,000.00 to allow for the full claim and reimbursement of the REAP 2.0 Local Sub-Allocation Grant.
EXHIBIT(S)
A) MCAG Grant Agreement and Updated City of Gustine REAP 2.0 application.
B) Resolution 2024-XXXX Accepting the REAP 2.0 Sub Allocation Award by MCAG ¢ w )'
APPROVED BY: _
Soknirorn Than, City Manager
EXHIBIT A: MCAG Grant Agreement and Updated City of Gustine REAP 2.0 Application REAP 2.0 MCAG Grant Agreement
REAP 2.0 GRANT AGREEMENT
between
MERCED COUNTY ASSOCIATION OF GOVERNMENTS
and the
CITY OF GUSTINE
This Regional Early Action Planning (REAP) 2.0 Grant Agreement ("AGREEMENT"), effective _, 2024, is entered into by and between Merced County Association of Governments, a joint powers authority pursuant to California Government Code Section 6500 et seq. (MCAG), and the City of Gustine, ("GRANTEE") for the Housing Element Zoning Updates ("PROJECT").
RECITALS
A. Merced County Association of Governments (MCAG) is a joint powers authority formed by the six incorporated cities in Merced County and the County of Merced (its "Members") and has been designated as the Metropolitan Planning Organization for Merced County (MPO).
B. The California Department of Housing and Community Development ("HCD") has provided grant funds to MCAG through the Regional Early Action Planning Grants of 2021("REAP 2.0") Program; and
C. On April 3, 2023, MCAG and HCD executed Agreement Number 22-REAP2-17548 for REAP 2.0 funding; and
D. In October of 2023, MCAG developed grant applications and issued calls for projects to member agencies for the Local Suballocation Grant Program and Regional Competitive Grant Program; and GRANTEE submitted the ("Grant Application") to MCAG proposing Housing Element Zoning Updates ("Project"), dated December 20,2023, a true and correct copy of which is attached hereto as Exhibit A and incorporated herein by reference; and E. On August 15, 2024, the MCAG Governing Board approved the Grant Application and authorized the Executive Director to enter into an Agreement with GRANTEE.
NOW, THEREFORE, it is mutually agreed by and between the parties as follows:
ARTICLE I: FUNDING ALLOCATION
This AGREEMENT authorizes MCAG to allocate REAP 2.0 funds awarded to MCAG by the State in accordance with the State's REAP 2.0 Guidelines for MPOs to the RECIPENT based on the PROJECT's satisfaction of the following criteria:
• The PROJECT is located in the MCAG region;
• The PROJECT meets all three REAP 2.0 Program Objectives; • The PROJECT was recommended by the scoring committee (Regional Competitive Grant Program) or met the threshold criteria {Local Suballocation Grant Program); and
REAP 2.0 MCAG Grant Agreement
• The PROJECT was approved by the MCAG Governing Board.
ARTICLE II: PROJECT SCOPE, COSTS, AND SCHEDULE
A. Project Scope
1. The PROJECT funding allocation was approved by the MCAG Governing Board for Housing Element Zoning Updates.
2. In utilizing REAP 2.0 funding, only work commencing after April 3, 2023 will be eligible for reimbursement.
B. Project Costs
1. The PROJECT has been approved by the MCAG Governing Board in an amount not to exceed $103,142.00.
2. The GRANTEE is responsible for any PROJECT cost overruns as REAP 2.0 funding is one-time funding.
3. Funding allocated to RECPIENT for the PROJECT that remains unspent at the completion of the PROJECT will either be reallocated to other eligible projects, pending approval from the MCAG Governing Board, or returned to the State.
C. Project Schedule
1. GRANTEE shall adhere to the schedule outlined in the approved grant application (Exhibit A) to complete the PROJECT in a timely manner.
2. The GRANTEE has three months from the date of this AGREEMENT to execute consultant contracts or initiate work if done by the GRANTEE's staff.
4. If no costs have been invoiced for a three-month period, GRANTEE agrees to submit for each phase a written explanation of the absence of the PROJECT's activity along with target billing date and target billing amount.
5. Funding allocated to the PROJECT that remains unused at the conclusion of the PROJECT schedule above (including any extensions authorized by MCAG) may be redistributed to other projects at the discretion of the MCAG Governing Board.
D. Changes to Project
Changes to the PROJECT scope will require an amendment to this AGREEMENT, requiring action from both parties.
ARTICLE Ill: FUNDING AND EXPENDITURES
A. MERCED COUNTY ASSOCIATION OF GOVERNMENTS (MCAG) OBLIGATIONS
1. MCAG shall reimburse the GRANTEE following the receipt of funds from HCD for allowed PROJECT costs, with the exception of costs associated with compliance with the requirements outlined in Article IV, Section A of this AGREEMENT.
REAP 2.0 MCAG Grant Agreement
2. MCAG shall provide the reimbursement forms and documentation requirements for the submission of invoices to GRANTEE no later than thirty (30) days following the date of this AGREEMENT.
3. MCAG shall determine whether GRANTEE has adequately performed to the satisfaction of MCAG the item(s) for which GRANTEE seeks payment, and shall submit eligible cost to HCD for reimbursement. Upon receipt of funds from HCD, MCAG shall remit payment thereof to GRANTEE.
4. If MCAG determines that GRANTEE has not adequately performed any such task or services, MCAG shall inform GRANTEE of those acts in writing which are necessary for satisfactory completion of the item(s). GRANTEE shall undertake any and all work to satisfactorily complete the item(s) at no additional charge to MCAG. In the event there is a dispute over an alleged error or omission by GRANTEE, MCAG shall have the right to withhold payment of GRANTEE's fees in the disputed amount.
B. GRANTEE'S OBLIGATIONS
1. GRANTEE shall perform all work necessary to complete the PROJECT. The GRANTEE shall perform those services as described in Exhibit A. In the event of any inconsistency between this Agreement and Exhibit A, such inconsistency shall be resolved by giving precedence in the following order of priority: (1) to the text of this Agreement; (2) to Exhibit A.
2. GRANTEE shall perform the task and services contemplated by this Agreement substantially according to the proposed work schedule as set forth in Exhibit A, and according to the requirements of this Agreement.
3. GRANTEE shall submit invoices with adequate supporting documentation of work billed and costs charged by Task as set forth in Exhibit A, to MCAG, specifying those services which GRANTEE believes have been completed. The invoice shall specify: (1) a summary of the work completed by task, (2) an itemization of hours worked and incurred direct costs and/or subcontractor fees; (3) the total amount billed for the current period, (4) the total amount billed to-date for the project. The invoice shall include a written progress report adequately describing the services billed and provided, and summarizing the status of the PROJECT in regard to task completion, time lines, and budget.
4. If no costs have been incurred, GRANTEE must at a minimum submit quarterly updates to MCAG on the project's progress.
5. GRANTEE must account for REAP 2.0 funds separately. The accounting system shall provide adequate internal controls and audit trails to facilitate an annual compliance audit for each fund type and the respective usage and application of said funds. MCAG and its representatives and agents shall have the right at any reasonable time to inspect and copy any accounting records related to such funds, except to the extent specifically prohibited by applicable law.
6. GRANTEE shall return to MCAG any funds which HCD has disallowed within 90 days following notice to GRANTEE.
ARTICLE IV: REPORTING REQUIREMENTS
REAP 2.0 MCAG Grant Agreement
A. REQUIREMENTS AND WITHOLDING
GRANTEE shall comply with each of the reporting requirements set forth below. If GRANTEE fails to comply with one or more of these requirements, MCAG may withhold reimbursement payment for the PROJECT until full compliance is achieved.
1. As a means to keep the public informed, the GRANTEE, at a minimum, shall provide quarterly updates of current and accurate information on GRANTEE's website (if applicable) and to MCAG related to the PROJECT's progress.
2. GRANTEE shall make its administrative officer or designated staff available upon request to render a report or answer any and all inquiries in regard to GRANTEE's receipt, usage, and/or compliance with audit findings regarding the PROJECT.
3. GRANTEE agrees that MCAG may review and/or evaluate the PROJECT pursuant to this AGREEMENT. This may include visits by representatives, agents or nominees of MCAG to observe GRANTEE's project or program operations, to review project or program data and financial records, and to discuss the project with GRANTEE's staff or governing body.
ARTICLE V: OTHER PROVISIONS
A. INDEMNITY BY GRANTEE
Neither MCAG nor its governing body, elected officials, officers, consultants, agents or employees shall be responsible for any damage or liability occurring by reason of anything done or omitted to be done by GRANTEE in connection with the funds distributed to GRANTEE for the PROJECT pursuant to this AGREEMENT. It is also understood and agreed, pursuant to Government Code Section 895.4, that GRANTEE shall fully defend, indemnify and hold harmless MCAG, its governing body, elected officials, officers, agents and employees from any liability imposed on MCAG for injury (as defined in Government Code Section 810.8) occurring by reason of anything done or omitted to be done by GRANTEE for the PROJECT in connection with the Regional Projects funds distributed to GRANTEE pursuant to this AGREEMENT.
B. INDEMNITY BY MCAG
Neither GRANTEE nor its governing body, elected officials, officers, consultants, agents or employees shall be responsible for any damage or liability occurring by reason of anything done or omitted to be done by MCAG under or in connection with any work, authority or jurisdiction delegated to MCAG under this AGREEMENT. It is also understood and agreed, pursuant to Government Code Section 895.4, that MCAG shall fully defend, indemnify and hold harmless GRANTEE, its governing body, elected officials, officers, agents and employees from any liability imposed on GRANTEE for injury (as defined in Government Code Section 810.8) occurring by reason of anything done or omitted to be done by MCAG under or in connection with any work, authority or jurisdiction delegated to MCAG under this AGREEMENT.
C. JURISDICTION AND VENUE
The laws of the State of California will govern the validity of this AGREEMENT, its interpretation and performance, and any other claims to which it relates. All legal actions arising out of this AGREEMENT shall be brought in a court of competent jurisdiction in Merced County, California.
D. ATTORNEY'S FEES
REAP 2.0 MCAG Grant Agreement
Should it become necessary to enforce the terms of this AGREEMENT, the prevailing party shall be entitled to recover reasonable expenses and attorney's fees from the other party.
E. TERM
The term of this AGREEMENT shall become effective as of the Effective Date and shall remain in full force and effect through December 31, 2026, unless sooner terminated or unless its term is extended and amended in writing.
F. NON-ALLOCATION OF FUNDS
The terms of this AGREEMENT, and the services to be provided hereunder, are contingent on the approval of funds by the appropriating government agency. GRANTEE services and reimbursements beyond June 30, 2025, are subject to the inclusion and funding agency approval of this project in the MCAG FY 2025-26 Overall Work Program. Should sufficient funds not be allocated, the services to be provided hereunder may be modified, or this AGREEMENT terminated at any time by MCAG's giving the GRANTEE thirty (30) days advance written notice.
In the event of any termination of this AGREEMENT, all finished and unfinished work materials, including, without limitation, notes, minutes, research, documents, maps, graphs, and studies, shall be MCAG's property, and at MCAG's sole option, shall be delivered by GRANTEE to MCAG.
G. SEVERABILITY
If any provision of this AGREEMENT is found by a court of competent jurisdiction to be unenforceable, such provision shall not affect the other provisions of the AGREEMENT, but such unenforceable provisions shall be deemed modified to the extent necessary to render it enforceable, preserving to the fullest extent permissible the intent of the parties set forth in this AGREEMENT.
H. ENTIRE AGREEMENT; MODIFICATION
This AGREEMENT, as well Exhibit A, constitutes the entire AGREEMENT and supersedes all prior written or oral understandings regarding funding for the PROJECT. This AGREEMENT may only be modified by a written agreement executed by both parties.
IN WITNESS WHEREOF, the parties have executed this AGREEMENT by their duly authorized officers as of the date first written below.
CITY OF GUSTINE (GRANTEE) MERCED COUNTY ASSOCIATION OF GOVERNMENTS (MCAG) By:
Name
Title
Approved as to Budget/Financial Controls:
By:
By:
Stacie Guzman
Executive Director
Reviewed as to Budget/Financial Controls:
By:
Date Date
REAP 2.0 MCAG Grant Agreement
Name
Title
Approved as to Legal Form:
By:
Name
Legal Counsel
Date
Date
Nav Bagri
Deputy Executive Director
Approved as to Legal Form:
By:
Emily Haden
Legal Counsel to MCAG
Date
Date
Note: This is the Exhibit A to the MCAG contract.
MERCED COUNTY ASSOCIATION OF GOVERNMENTS
Regional Early Action Planning Grants of 2021 (REAP 2.0)
LOCAL SUBALLOCATION GRANT PROGRAM (LSGP)
APPLICATION
Deadline: REVISED TO JULY 2024
A. Background
This application to the Merced County Association of Governments (MCAG) is for the Local Suballocation Grant Program, a grant authorized under the Regional Early Action Planning Grants of 2021 (REAP 2.0) provisions. The REAP 2.0 program was established through AB 140 (July 2021) for transformative and innovative projects that implement a region's Sustainable Communities Strategy (SCS) and help achieve the objectives of more housing and transportation options that reduce reliance on cars. REAP 2.0 builds on actions completed through the REAP
1.0 grant program but expands the focus by integrating housing and vehicle miles traveled (VMT) reduction, and by allowing for broader planning and implementation investments, including infrastructure investments supporting housing development. This includes accelerating housing production and facilitating compliance with the Sixth Cycle of the housing element.
REAP 2.0 is specifically designed to provide Eligible Entities with tools and resources to help implement and advance plans, primarily including Sustainable Communities Strategies (SCS) as part of Regional Transportation Plans to pursue greenhouse gas emission reduction targets through land use and transportation changes.
The REAP 2.0 Program Framework includes two core components:
1. Local Suballocation Grant Program
2. Regional Competitive Grant Program
This is the application for the REAP 2.0 Local Suballocation Grant Program. The Local Suballocation Grant Program sets aside $905,386 for jurisdictions throughout the region for eligible projects which meet all REAP 2.0 goals and objectives. The goal of this suballocation program is to provide MCAG member jurisdictions an opportunity to propose REAP 2.0 eligible projects while allowing for both implementation and planning uses. All projects or programs must achieve all REAP 2.0 goals, objectives, and pass thresholding criteria. Full guidance and requirements for this grant program can be found in the MCAG REAP 2.0 Local Suballocation Grant Program Final Guidelines.
B. REAP 2.0 Program Objectives
The goals of the REAP 2.0 program are to invest in housing, planning, and Infill Housing-supportive infrastructure across the entire state in a manner that reduces VMT, increases Housing affordability, and advances equity. The REAP 2.0 program has three objectives that any single use of the fund must further. The three objectives are:
• Accelerating Infill Development that Facilitates Housing Supply, Choice, and Affordability • Affirmatively Furthering Fair Housing (AFFH)
• Reducing Vehicle Miles Traveled (VMT)
Regional Early Action Planning Grants of 2021 (REAP 2.0)
LOCAL SUBALLOCATION GRANT PROGRAM APPLICATION
C. Submission Instructions
Applicants must submit the following to MCAG by 5:00 PM on December 22, 2023 to be considered for the award:
1. A completed REAP 2.0LSGP application along with all required supporting documents.
2. A fully executed Government Agency Taxpayer ID Form (see Attachment 1).
All applications must be submitted electronically to MCAG by email to [email protected]. No hard copies will be accepted.
D. Timeline
Below is a tentative schedule, which is subject to change in the final guidelines:
• August 15, 2023: Release draft LSGP Guidelines for public review • October 19, 2023: MCAG adopts final LSGP Program guidelines, releases call for applications • December 22, 2023: Final applications from eligible applicants due to MCAG • January 2024: Grant applications are reviewed and evaluated • February 2024: MCAG approves awarded grants
• March 2024: Execute grant agreements with REAP 2.0 awardees • June 30, 2024: Deadline to encumber REAP 2.0 funds
• March 31, 2026: All REAP projects and activities must be completed; final activity reports due to MCAG; final project invoices due to MCAG
E. Contact
If you have questions regarding this application or the REAP 2.0 program, contact Meg Prince at [email protected].
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Regional Early Action Planning Grants of 2021 (REAP 2.0}
LOCAL SUBALLOCATION GRANT PROGRAM APPLICATION
1. Application Information
Agency Name City of Gustine
Agency Type City
Applicant's Mailing Address* PO Box 16
City Gustine
Zip Code 95322
Website www.cityofgustine.com
Authorized Representative Name Soknirorn Than
Authorized Representative Title City Manager
Phone (209) 854-6471
Email [email protected]
Contact Person Name Jami Westervelt
Contact Person Title Economic & Community Development Director Phone (209) 854-6471
Email [email protected]
Grant Amount (See the program $103,142
guidelines Section 2 for amount
which your jurisdiction is eligible to
apply)
*Ensure the Government Agency Taxpayer ID Form matches the Applicant's Mailing Address listed above exactly. (See Attachment 1, "Government Agency Taxpayer ID Form") 3
Regional Early Action Planning Grants of 2021 (REAP 2.0)
LOCAL SUBALLOCATION GRANT PROGRAM APPLICATION
2. Signature and Threshold Requirements
Project elements will be rated on a pass or fail basis. Any project that fails one or more of the REAP 2.0 objectives or primary factors will be rejected. Projects that meet all REAP 2.0 objectives and goals will be considered for approval as eligible projects. In the box below, indicate whether your project meets each threshold criteria.
Threshold Criteria
REAP 2.0 Objectives - Does the project: Yes No
1. Accelerate Infill Development? (see Section Sa below for more detail) X
2. Affirmatively Further Fair Housing? (see Section Sb below for more X detail)
3. Reduce VMT? (see section Sc below for more detail) X Primary Factors - Does the project:
1. Advance Housing Element Compliance? X
2. Result in Transformative Planning and Implementation Activities? (see X Section 6b below for more detail)
3. Include a public engagement process in the planning scope or arise from X or go through a public process to solicit community input?
4. Benefit to Disadvantaged and Historically Underserved Populations? X (see section 6d below for more detail)
5. Have Significant Beneficial Impacts? (see section 6e below for more X detail)
6. Advance California Planning Priorities per Government Code 65041.1? X As the official designated by the governing body, I hereby certify that the proposed project is consistent with the MCAG REAP 2.0 Local Suballocation Final Program Guidelines and meets all program requirements.
I further certify that, if approved by MCAG for a suballocation of funding through the REAP 2.0 program, the City of Gustine assumes the responsibilities specified in this application and certifies that the information statements and other content contained in this application are true and correct.
Signature: Name: _
Date: Title; _
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Regional Early Action Planning Grants of 2021 (REAP 2.0)
LOCAL SUBALLOCATION GRANT PROGRAM APPLICATION
3. Eligible Activities Checklist
Eligible uses under the LSGP must accelerate infill development, affirmatively further fair housing, reduce vehicles miles traveled, support housing element implementation and create expanded opportunities for local efforts to align with MCAG's regional plans, and support state planning goals. The full list of eligible and ineligible activities can be found in the State's REAP 2.0 Guidelines for MPOs.
Check one or more eligible activity category that most closely matches the proposed project. Proposed projects falling under these general project categories below must be shown to meet all threshold criteria in Section 2 through the project narrative section of this application to be approved for funding.
X Projects or programs leading to or supporting affordable housing development programs or unit production or preservation;
Planning activities that lead to increased residential and/or mixed-use zoned capacity in areas identified as infill (see Section Sa for infill definition), or land use planning, related studies and/or programs that X result in implementable/adoptable programs and policies (meaning subject to adoption or approval of the legislative body) required to meet the programs, projects, and commitments in draft, adopted and/or compliant 6" Cycle Housing Elements;
X Program-level environmental clearance for infill projects (see Section Sa for infill definition) with AFFH component (See Section Sb for more detail on AFFH);
Upgrading infrastructure for sewer, water, and dry utility systems that may serve affordable infill housing;
Housing mobility strategies that serve affordable housing; X Reductions to barriers to higher density Housing, buildings with four or more units, and accessibility; Outreach strategies to address local opposition to Proposed Use; Anti-displacement protections;
Expanded Housing options;
Housing-supportive infrastructure;
Activities that develop, support, or implement land use planning, policies, or investment strategies that result in substantial changes to travel behavior from increasing population and employment densities, land use mix, street network connectivity, linkages and pathways with active transportation X infrastructure, accessibility between destinations, and/or contiguousness of land uses and transportation networks; Activities, subject to applicable program funding requirements, that would develop, support, or implement transportation planning, policies, and investment strategies that support Infill development that facilitates housing supply, choice, and affordability such as increasing transit services and access;
Building at walkable community scales;
Enhancing pedestrian and bicycling safety measures;
Protecting pedestrian and bicycling amenities;
Multi modal infrastructure connections with multimodal-mobility transportation systems.
X Other Eligible Activity consistent with the program guidelines. 5
Regional Early Action Planning Grants of 2021 (REAP 2.0)
LOCAL SUBALLOCATION GRANT PROGRAM APPLICATION
4. Project Description
Provide a description of the project including a description of the project's impact on accelerating housing production, affirmatively furthering fair housing, and reducing vehicle miles traveled. Describe how your project implements the eligible activities indicated in Section 3- Eligible Activities Checklist. Include whether plans will be adopted. If consultants are used, identify what tasks they will be responsible for. This box will overflow to add additional pages if additional space is needed.
The City of Gustine proposes to use these funds to complete important work necessary to implement its Sixth Cycle Housing Element (HE), especially in relationship to Zoning updates and Environmental Review for sites identified in the Element.
In order to implement its HE the City must update its Land Use Element definitions in its General Plan.
The City adopted its current General Plan in 2002. Although the City has experienced limited growth since that time, the City needs to update these specific Land Use Definitions in order to be consistent with the HE as well as the Zoning Code changes the City will be making.
The City will be examining all of its Residential Zoning Codes and working to approve changes that are needed in order to implement high-density housing units and to encourage affordable housing, as well as to stimulate housing unit production in general-all of which is identified in the HE and a part of the state-approved RHNA requirements for the City.
In addition, the City is updating its Safety and Environmental Justice elements as necessary with this Housing Element taking place.
The City is able to contract with the same firm that is completing the Merced County MultiJurisdictional Housing Element (MJHE) for all of Merced County to meet its goal of completing the work as efficiently, quickly and affordably as possible. The work will cost in excess of this grant, with the estimate of $155,299. The City is working with the State to see if another potential grant can help defray the costs but the City will have to pay the difference if not.
With fewer than 6,000 residents, and no more than 2,000 residences receiving water services through the City, the City lacks the rooftops and the commercial development of larger cities, meaning the City constantly struggles with stretching general fund revenues it receives through property tax and sales tax for planning services. There isn't a funding source outside of various State grants-which the City isn't necessarily eligible for at this point since its HE is not currently in compliance-that the City could use to pay for this important yet costly work.
It is for this reason that the City respectfully requests that the full $103,142 allocation be granted if at all possible for the purpose of assisting with the City implementing this $155,299 contract as much as possible.
6
Regional Early Action Planning Grants of 2021 (REAP 2.0)
LOCAL SUBALLOCATION GRANT PROGRAM APPLICATION
5. REAP 2.0 Objectives (300-word limit each)
a. Explain how the project accelerates infill development near jobs and other key destinations to support housing choice and affordability that effectively reduces VMT and greenhouse gas emissions. "Accelerating Infill Housing Production" or "Accelerating Infill Development, Including Housing" means planning, infrastructure, and other investment and actions that improve the affordability, timing, cost, feasibility, approval, and amount of Housing development.
Include the address(es) of the project area(s), satellite map (Google Maps or similar) of the project site(s) including surrounding parcels so MCAG can verify that the project is not adjacent to natural or agricultural lands and is in an appropriate infill site. If a zoning map is available to show the project location and associated land use designation, that will help assist in confirming the project is in an eligible infill area.
"Infill", for the purposes of the REAP 2. 0 Program, means areas where all the following apply: (1) the area consists of unused or underutilized lands (2) within existing development patterns (3) that is or will be accessible to destinations and daily services by transit, walking, or bicycling and located in either:
a. An urban center, urban corridor, or area with transit-supportive densities, or b. An established community that meets all the following criteria:
i. The area consists or previously consisted of qualified urban uses ii. The area is predominantly surrounded (approximately 75 percent of the perimeter) by parcels that are developed or previously developed with qualified urban uses. In counting this, perimeters bordering navigable bodies of water and improved parks shall not be included, and
iii. No parcel within or adjoining the area is classified as agricultural or natural and working lands.
Updates to the Land Use Plan and Zoning Code will provide a clear pathway for accelerating housing development of all types. The City needs to update its Land Use Element to develop the density definitions for consistency with the Sixth Cycle housing element it is currently working to submit-which will all provide for the building of more affordable housing and facilitate approval times. The Environmental Clearance for the sites in the HE is essential to be able to utilize these for the higher-density and affordable housing as required by the City's RHNA allocation. b. Explain how the project affirmatively furthers fair housing. "Affirmatively Furthering Fair Housing", pursuant to Government Code section 8899.50, means taking meaningful actions, in addition to combating discrimination, that overcome patterns of segregation and foster inclusive communities free from barriers that restrict access to opportunity based on protected characteristics. Specifically, Affirmatively Furthering Fair Housing means taking meaningful actions that, taken together, address significant disparities in Housing needs and in access to opportunity, replacing segregated living patterns with truly integrated and balanced living patterns, transforming racially and ethnically concentrated areas of poverty into areas of opportunity, and fostering and maintaining compliance with Civil Rights and Fair Housing Laws. HCD provides an AFFH Data Viewer which may assist the applicant in identifying the project's AFFH impacts.
The Sixth Cycle housing element the city is currently working to submit will address this fully, as required by that submission. In order to implement that Element, the City will need to make all that changes that it is requesting that this allocation fund. The changes to the code are required to implement several of the AFFH programs.
7
Regional Early Action Planning Grants of 2021 (REAP 2.0)
LOCAL SUBALLOCATION GRANT PROGRAM APPLICATION
c. Explain how the project reduces Vehicle Miles Traveled (VMT) and is consistent with the MCAG 2022 RTP/SCS strategies.
By updating the specified sections of the City General Plan as well as all the City Zoning codes, and thereby enabling the implementation of the Sixth Cycle housing element, the city will bolster housing inventory and be able to provide additional housing units that will have the ability to reduce commuting, specifically related to employers in the City's largest employment sectors, including a manufacturing, the school district and agriculture. Lack of inventory for those hoping to live and work in the City currently contributes to additional VMT for the City. 8
Regional Early Action Planning Grants of 2021 (REAP 2.0)
LOCAL SUBALLOCATION GRANT PROGRAM APPLICATION
6. Primary Factors (300-word limit each)
a. Explain how the project advances compliance with your jurisdiction's draft 6" Cycle Housing Element.
As stated above, the City must make changes to its General Plan, specifically its Land Use Element and Safety Elements and to add the Environmental Justice Element; in support of its Sixth Cycle Housing Element and implementation of housing projects. b. Explain how the project will result in Transformative Planning and Implementation Activities. "Transformative planning and implementation activities" means housing, planning, infrastructure investments supporting infill housing, and other actions that enable meeting housing goals that also result in per capita vehicle miles traveled reductions, including accelerating infill development, supporting residents through realizing Multimodal Communities, shifting travel behavior through reducing driving, and increasing transit ridership.
As stated above, the City must make these changes to implement its Sixth Cycle housing element and implementation of housing projects anticipated as part of that Plan. c. Explain the public engagement that will be included in the scope of work for this planning effort. Also, explain if the proposed project arose from or went through a public process to solicit community input.
Although still early in its Sixth Cycle Housing Element (HE) development, the City has already completed significant community outreach specifically to the City of Gustine, including multiple public workshops and public meetings that provided ample opportunity for public comment. The City has already received a large amount of public engagement regarding its HE outreach as it opened its draft Site Inventory to public comment to make sure that the public had a chance to review even prior to the HE draft. The City also engaged the public during the Public Comment period for the full Draft HE which was released to the public in May 2024. Public comment periods will continue to include significant public outreach. For the remainder of this work, the City will use strategies to gather public input which are similar to those utilized in the HE including: public workshops and meetings, online materials and surveys, email lists for interested parties, public noticing for specific site changes, reaching out via social meeting and utilizing the local changeable message board in town.
d. Explain how the project has a Benefit to Disadvantaged and Historically Underserved Communities. "Disadvantaged and Historically Underserved Communities" includes concentrated areas of poverty; Areas of High Segregation and Poverty and areas of low to moderate access to opportunity (TCAC/HCD Opportunity Area Maps); Communities of Concern, Disadvantaged Communities (SB 535 Disadvantaged Communities Map), and Low-Income Communities pursuant to Senate Bill 535 (De Len, Chapter 830, Statutes of 2012) and Assembly Bill 1550 (Gomez, Chapter 369, Statutes of 2016); areas of high Housing cost burdens; areas with high vulnerability of displacement; areas related to Tribal Entities; and other areas experiencing disproportionate impacts of California's Housing and climate crisis.
As is being addressed in the Sixth Cycle housing element, the project will aid in the implementation of housing projects anticipated as part of that Plan. The City has no tribal entities or land in or near its City limits.
e. Explain how your project has Significant Beneficial Impacts. Significant beneficial impacts must lead to substantial changes in land use patterns and travel behaviors. In demonstrating significant beneficial impacts, applicants may consider rates of change (e.g., percent increase over a baseline), the magnitude 9
Regional Early Action Planning Grants of 2021 (REAP 2.0)
LOCAL SUBALLOCATION GRANT PROGRAM APPLICATION
of impact relative to variables or targets, the proportion of need achieved, and the impact relative to past trends, policies, and practices. Variables or targets may include but are not limited to benefitting households by income group; Regional Housing Needs Assessment; Housing units (new construction, preservation/conservation, and rehabilitation); density; infrastructure; infrastructure capacity and accessibility; public space; community amenities; investments; Vehicle Miles Traveled reduction goals or targets; regional or local equity policies and programs included in an adopted RTP/SCS; and GHG reduction goals or targets.
Updates described in this scope will provide a clear pathway for accelerating housing development of all types and projects to benefit all of the above impacts. f. Explain how your project Advances California Planning Priorities per Government Code 65041.1.
Updates to the General Plan will accelerate housing development of all types. The Sixth Cycle housing element for the City requires an update to its Land Use and the City needs to update its Safety and Environmental Justice Elements as well. The updates will provide for the building of more affordable housing, promote infill, preserve agriculture by limiting sprawl with good planning, and provide for using land efficiently. This work provides for appropriately planning for growth and promotes development consistent with the priorities of both the City and the State. 10
Regional Early Action Planning Grants of 2021 (REAP 2.0)
LOCAL SUBALLOCATION GRANT PROGRAM APPLICATION
7. Project Schedule and Budget
All tasks, budget amounts, dates and deliverables should be included under one line item. Indicate what tasks will be completed by the consultant and include dates for draft and final deliverables if applicable. Budget must account for the full amount the jurisdiction is applying for.
All tasks and spending must be completed by March 31, 2026.
Project Title:
Start End Tasks Budget Date Date Description and Deliverables Development of $103, 142 7/17/24 3/1/26 The City has already approved a contract with General Plan Elements Rincon Consultants, Inc for this work. The including Land Use deliverables will include a revised Land Use Element Element, Zone Code Changes, revisions to the
Zoning Map, and submission of Environmental
documents for sites in the City Sixth Cycle
Housing Element.
Total: $103,142
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Attachment 1: Government Agency Taxpayer ID Form
Financial Information System for California (FI$Cal)
GOVERNMENT AGENCY TAXPAYER ID FORM
2000 Evergreen Street, Suite 215
Sacramento, CA 95815
www.fiscal.ca.gov
1-855-347-2250
FI$Cal
Financiai Information System for California
The principal purpose of the information provided is to establish the unique identification of the government entity.
Instructions: You may submit one form for the principal government agency and all subsidiaries sharing the same TIN. Subsidiaries with a different TIN must submit a separate form. Fields bordered in red are required. Hover over fields to view help information. Please print the form to sign prior to submittal.
You may email the form to: [email protected], or fax it to (916) 576-5200, or mail it to the address above.
Principal
Government
Agency Name
Remit-To
Address (Street
or PO Box)
City
City of Gustine
PO Box 16
Gustine State Zip Code+4 95322-0016
Government Type: [ls
Tl spedal ostaic
D Other (Specify)
D County
D Federal
Federal
Employer
Identification
Number
(FEIN)
EIN: 94-6000715
List other subsidiary Departments, Divisions or Units under your principal agency's jurisdiction who share the same FEIN and receives payment from the State of California.
Dept/Division/Unit
Name
Dept/Division/Unit
Name
Dept/Division/Unit
Name
Dept/Division/Unit
Name
Contact Person
Phone number
Signature
Jami Westervelt
209-854-6471
Complete
Address
Complete
Address
Complete
Address
Complete
Address
Title
Email Address
Date '' 12/20/2023
[email protected]
Economic & Community Development Director
RESOLUTION 2024-XXXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GUSTINE ACCEPTING THE REAP 2.0 SUB
ALLOCATION GRANT AWARD, DIRECTING THE CITY MANAGER TO SIGN THE GRANT
AGREEMENT REQUIRED BY MERCED COUNTY ASSOCIATION OF GOVERNMENTS AND INCREASING APPROPRIATIONS IN THE GENERAL FUND BY $13,000 TO FULLY CLAIM THE FUNDS WHEREAS, the City must comply with mandates in State of California laws, including requirements for its Sixth Cycle Housing Element and required related actions; and WHEREAS, the City has contracted with consultants to complete work on its Sixth Cycle Housing element and related items, including Safety and Environmental Justice Elements, general plan text amendments, zoning code modifications and related environmental approvals; and
WHEREAS, Merced County Association of Governments (MCAG) is administering the second-round funding of the Regional Early Action Planning grants (REAP 2.0 here forward) from the State of California as it applies to all of Merced County; and WHEREAS, MCAG Governing Board approved the REAP 2.0 Local Suballocation application for award for the City of Gustine in the amount of $103,142; and WHEREAS, without this REAP 2.0 award, the City would need to utilize General Fund dollars to fund the work of the consultants on behalf of the City; and WHEREAS, the City Council hereby finds that based on the foregoing recitals and the facts described in the staff report associated with this resolution, it is necessary and advisable to accept the REAP 2.0; and
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Gustine:
Section 1. Approve the attached agreement accepting the REAP 2.0 Local Sub-Allocation grant funds and directing the City Manager to sign the grant agreement required by MCAG.
Section 2. Amend the Fiscal Year 2024-2025 budget by increasing appropriations in the General Fund 001 in the amount of $13,000.00 to allow for the full claim and reimbursement of the REAP 2.0 Local Sub-Allocation Grant.
THE FOREGOING RESOLUTION of the City Council of the City of Gustine was passed at a regular meeting held on the 19th day of November 2024 and the resolution was adopted by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
ATTEST:
Melanie Correa, Deputy City Clerk
City of Gustine
APPROVED:
Patrick Nagy, Mayor
City of Gustine
ITEM NO. 8
COUNCIL AGENDA ITEM
NOVEMBER 19, 2024
PREPARED BY: Mario Gouveia, City Engineer
SUBJECT: Resolution of the City Council of the City of Gustine Accepting Bid and Awarding a Contract to Graham Contractors, Inc., for the Schmidt Park Trail Slurry Seal Project and Authorizing the City Manager to Execute the Agreement
BACKGROUND/DISCUSSION
The Schmidt Park Multi-Purpose Trail was completed in August of 2021. The 10-foot-wide asphalt concrete trail is approximately ¾ of a mile long and requires periodic maintenance as needed.
As part of a maintenance program, the City of Gustine will need to apply a Type II slurry seal to the asphalt concrete surface in order to extend the useful life of the pavement.
The work consists primarily of furnishing and applying pavement crack sealing, furnishing and placing approximately 38 tons of slurry seal, and furnishing and apply paint striping.
Following an informal bidding process, the project was advertised on the City's website on October 18, 2024, and proposals were due no later than October 30, 2024 @ 5:00p.m.
The City received a total of three (3) proposals. The proposals have been reviewed, and the lowest responsive and responsible bid was submitted by Graham Contractors, Inc. in the amount of fifty-five thousand five hundred five dollars and zero cents ($55,505.00).
The bid results were as listed:
CONTRACTOR
Graham Contractors, Inc.
Pavement Coatings Co.
VSS International, Inc.
Engineers Estimate
$
$
$
$
TOTAL BID
55,505.00
62,110.00
95,120.00
53,400.00
FISCAL IMPACT
This project is a council-initiated project. Staff was directed to proceed forward and bring this project back for award and budget appropriation once the construction cost is known. Staff recommend that the council amend the Fiscal Year 2024-2025 budget by increasing appropriations in the Measure V- Alt Fund 202 in the amount of $61,005.00. This include a l 0% contingency ($5,500.00) for the project. Currently, there is sufficient fund balance ($150,000) in the Measure V - Alt Fund.
RECOMMENDATION
Staff recommends that the City Council adopt a resolution:
1 . Accepting the low bid from Graham Contractors, Inc. in the amount of fifty-five
thousand five hundred five dollars and zero cents ($55,505.00) for the Schmidt Park Trail Slurry Seal and authorizing the City Manager to execute the Agreement and any associated change order, up to 10% of the project cost ($5,500.00), on behalf of the City of Gustine.
2. Amend the Fiscal Year 2024-2025 budget by increasing appropriations in the Measure V- Alt Fund 202 in the amount of $61,005.00
EXHIBIT(S)
A) Resolution
B) Proposal
C) Abstract of Bids
D) Sample Agreement
APPROVED BY:
------------ Sok n i ro rn Than, City Manager
RESOLUTION 2024-XXXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GUSTINE ACCEPTING BID AND AWARDING A CONSTRUCTION CONTRACT TO GRAHAM CONTRACTORS INC. FOR THE
SCHMIDT PARK TRAIL SLURRY SEAL PROJECT AND AUTHORIZING THE CITY MANAGER TO
EXECUTE THE AGREEMENT
WHEREAS, the City of Gustine recognized the need for routine maintenance at the Schmidt Park Multi-Purpose Trail; and
WHEREAS, the request for proposals for the Schmidt Park Trail Slurry Seal Project was advertised on the City's website on October 18, 2024, and proposals were due no later than October 30, 2024 @ 5:00 p.m.; and
WHEREAS, a total of three (3) Proposals were received at the Gustine City Hall,; and
WHEREAS, the bid results were as listed below; and
CONTRACTOR TOTAL BID
Graham Contractors, Inc. $ 55,505.00
Pavement Coatings Co. $ 62,110.00
VSS International, Inc. $ 95,120.00
Engineers Estimate $ 53,400.00
WHEREAS, the bids have been reviewed and Graham Contractors, Inc. submitted the lowest responsive and responsible bid.
WHEREAS, there is sufficient fund balance in the Measure V - Alternate Mode to accommodate this project.
NOW THEREFORE BE IT RESOLVED by the City Council of the City of Gustine:
Section 1. Adopt a Resolution to award a contract to Graham Contractors, Inc. in the amount of fifty-five thousand five hundred five dollars and zero cents ($55,505.00) and authorize the City Manager to execute an agreement and any associated change order, up to 10% of the project cost ($5,500.00), with Graham Contractors, Inc. on behalf of the City of Gustine.
Section 2. Amend the Fiscal Year 2024-2025 budget by increasing appropriations in the Measure V- AIt Fund 202 in the amount of $61,005.00 Section 3. This Resolution will become effective immediately.
THE FOREGOING RESOLUTION of the City Council of the City of Gustine was passed by the City Council at a regular meeting held on the 19th day of November, 2024, and the resolution was adopted by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
ATTEST:
Melanie Correa, City Clerk
City of Gustine
APPROVED:
Patrick Nagy, Mayor
City of Gustine
REQUEST FOR PROPOSALS
CITY OF GUSTINE
Schmidt Park Trail Slurry Seal
City of Gustine, Public Works Department
3 5 2 Fifth Street
Gustine, California 9 5 3 2 2
Telephone (209)854-6471
October 2024
Prepared by
Gouveia Engineering, Inc.
955.06 Request for Proposals, Schmidt Park Trall Slurry Seal
GENERAL INFORMATION
OVERVIEW:
RFP ISSUE DATE:
RFP RESPONSE DUE DATE:
RFP AWARD AND NOTICE OF
AWARD DATE:
NOTICE TO PROCEED:
TIME TO COMPLETE PROJECT:
CONTACT PERSON(S)
PHONE NUMBER:
EMAIL:
OWNER:
955.06 Request for Proposals, Schmidt Park Trail Slurry Seal The City of Gustine, herein called the
"OWNER", is hereby requesting sealed
proposals for construction of the "Schmidt
Park Trail Slurry Seal" Project. Construction
consists primarily of crack sealing, placing a
Type II slurry seal and applying paint/striping
to the trail pavement in accordance with the
description, drawings, specifications, and
details in this Request for Proposal (RFP).
October 18, 2024
October 30, 2024 @ 5:00p.m.
November 5, 2024 (tentative)
November 12, 2024 (tentative)
15 Working Days after the date of the Notice
to Proceed. Date for completion is December
13, 2024. (tentative)
Soknirorn Than, City Manager
209-854-6471
[email protected]
or
Gary Ingram, Public Works Director
209-854-6183
[email protected]
City of Gustine
352 Fifth Street
Gustine, California 95322
Public Works Department
Attn: Nirorn Than, City Manager
1]Page
PROJECT DESCRIPTION AND REQUIREMENTS
The project work will take place at the Schmidt Park Trail in the City of Gustine. The work consists primarily of furnishing and applying pavement crack sealing, furnishing and placing approximately 38 tons of slurry seal, and furnishing and applying paint striping as shown on the attached drawings.
Proposal shall include all material, equipment and labor costs required to complete the work.
Each proposal must be submitted in a sealed envelope, addressed to the OWNER at 352 Fifth Street, Gustine, California 95322. Each sealed envelope containing a proposal must be plainly marked on the outside as "Schmidt Park Trail Slurry Seal", and the envelope should bear on the outside, the name of the CONTRACTOR, his address, and his contractor's license number. If forwarded by mail, the sealed envelope containing the proposal must be enclosed in another envelope addressed to the OWNER at PO Box 16, Gustine, California 95322. Emailed and faxed submittals will not be accepted.
All proposals must be made on the attached Bid Schedule. All blank spaces for BID prices must be filled in, in ink or typewritten, and the Bid Schedule must be fully completed when submitted unless otherwise indicated. Only one copy of the Bid Schedule is required. The proposal must also include filled out Contractor's Certification Regarding Worker's Compensation Insurance and List of Subcontractors forms included in the RFP.
The OWNER may waive any informalities or minor irregularities or reject any and all proposals.
In accordance with the provision of Section 3300 of the Public Contract Code, at the time this contract is awarded, the Contractor shall possess a Class A or C-12 California State Contractor's License. Bids are required for the entire work described herein.
This contract is subject to state contract nondiscrimination and compliance requirements pursuant to Government Code, Section 12990.
Pursuant to Section 1773 of the Labor Code, the general prevailing wage rates in the county, or counties, in which the work is to be done have been determined by the Director of the California Department of Industrial Relations. These wages are set forth in the General Prevailing Wage Rates for this project, available from the California Department of Industrial Relations' Internet web site at http://www.dir.ca.gov/DLSR/PWD.
Registration with California Department of Industrial Relations (DIR) A Contractor or Subcontractor shall not be qualified to bid on, or be listed in a bid proposal, subject to the requirements of Section 4104 of the Public Contract Code, or engage in the performance of any contract for public work, as defined in this chapter, unless currently 2[Page
955.06 Request for Proposals, Schmidt Park Trail Slurry Seal
registered and qualified to perform public work pursuant to Section 1725.5. It is not a violation of this section for an unregistered contractor to submit a bid that is authorized by Section 7029.1 of the business and Professions Code or by Section 10164 or 20103.5 of the Public Contract Code, provided the Contractor is registered to perform public work pursuant to Section 1725.5 at the time the Contract is awarded. Labor Code Section 1771.l(a) requires Contractors and their Subcontractors to possess and maintain such registration with DIR in order to be awarded and to perform on public works projects (regardless of funding source).
Pursuant to Section 1771.4, each CONTRACTOR and SUBCONTRACTOR shall furnish certified payroll records to the Labor Commissioner at least monthly and in a format prescribed by the Labor Commissioner of the DIR. This project is subject to compliance monitoring and enforcement by the Department of Industrial Relations.
Contractor shall provide a one-year warranty for the project, including labor and materials, beginning on the date of the Notice of Completion. A performance/warranty bond for 100% of the proposed amount is required prior to issuance of the Notice to Proceed and shall remain in full force during the entire warranty period.
Within 10 calendar days of the Notice of Award date the Contractor shall provide and maintain the following commercial general liability and automobile liability insurance:
A. General Liability - One million dollars ($1,000,000) per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the Project/location (with the ISO CG 2501 or insurer's equivalent endorsement provided to the Owner) or the general aggregate limit shall be twice the required occurrence limit.
B. Automobile Liability - One million dollars ($1,000,000) per accident for bodily injury and property damage combine single limit.
C. The Contractor shall provide employer's liability insurance in the amount of, at least, $1, 000, 000 per accident for bodily injury and disease.
D. The Contractor shall provide the Owner with a certificate of Workers' Compensation and Employers liability insurance coverage.
A minimum of two (2) working days prior to beginning any of the work, The CONTRACTOR shall post signs at each entrance to the trail notifying the public of the work schedule and of when the public will not be able to access the trail. The notice needs to be in English and Spanish and has to be approved by the City before being posted.
CONTRACTOR shall pay the sum of $250.00 as liquidated damages for each consecutive calendar day after the due date of completion.
3[Page
955.06 Request for Proposals, Schmidt Park Trail Slurry Seol
The CONTRACTOR shall submit to the City an electronic copy of the following submittals for review and approval prior to beginning construction .
1. Slurry Seal Mix Design
2. Crack Seal Mix Design
3. Pavement Paint
4. Notice (in English and Spanish)
4]Page
955.06 Request for Proposals, Schmidt Park Trall Slurry Seal
BID SCHEDULE
FOR
CITY OF GUSTINE
SCHMIDT PARK TRAIL SLURRY SEAL
Item Estimated
No. Item Description Quantity Unit Price Item Total
1 Furnish and Apply Crack Seal 1 LS $ 15,000.00 $ 15,000.00 2 Furnish and Apply Slurry Seal 38 TN $ 730.00 $ 27,740.00 3 Apply Paint Striping 3,700 LF $ 3.45 $ 12,765.00
TOTAL BID $ 55,505.00
TOTAL BID IN WORDS Fifty-Five Thousand Five Hundred Five Dollars and Zero Cents. 5[Page
955.06 Request for Proposals, Schmidt Park Trail Slurry Seal
CONTRACTOR'S CERTIFICATION REGARDING WORKERS'
COMPENSATION INSURANCE
State of California
County of Merced
I am aware of the provisions of Section 3700 of the Labor Code which require every employer to be insured against liability for workers' compensation or to undertake self-insurance in accordance with the provisions of that code, and I will comply with such provisions before commending the performance of the work of this Contract.
Graham Contractors, Inc.
(Name of Contractor)
David Graham, President
Date: October 29, 2024
6]Page
955.06 Request for Proposals, Schmidt Park Trall Slurry Seal
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In compliance with the Request for Proposals the undersigned, as bidder, hereby offers to provide to the Owner, the stated total bid amount quoted on this Bid Form for the work of Schmidt Park Trail Slurry Seal
Licensed in conformance with an act providing for the registration of Contractors, License No. 315789
-----------
Classification(s)_Sh-·
au resistrato No. _" -LR-10009887°
Date: October 29, 2024
Graham Contractors, Inc.
[s.
Sign
Here
Name of Bidder Graham Contractors, Inc.
Business Address 860 Lonus Street
San Jose, CA 95126
< wl = David Graham, President
Signature and Title of Bidder
Telephone No: ( ) (408) 293-9516 Email: info@grahamcontractors, com ----------
8[Page
955.06 Request for Proposals, Schmidt Park Trail Slurry Seal
TECHNICAL SPECIFICATIONS
SECTION 1
PAVEMENT CRACK SEALING
1-1 GENERAL
Pavement crack sealing consists of placing a sealing material in cracks in the asphalt surface as specified in the Special Provisions and as directed by the Engineer.
Sealant compound shall not be placed unless the joint is dry, clean and free of dust. All cracks which have an average clear opening width of ¼ inch to ¾ inch shall be cleaned and sealed with a minimum sealant depth of ½ inch.
1-2 MATERIALS
The material shall be formulated from polymer-modified asphalt, virgin synthetic rubber and reclaimed rubber compounds.
Crack sealing material shall conform to the following:
Test Specification
Softening point {ASTM D36) 222F min.
Cone Penetration (ASTM D5329) 40 max.
Resilience (ASTM D5329) 30% min.
Flow @ 140F (ASTM D5329) 0
Ductility, 77F (ASTM D113) 30 cm min.
Flexibility (Utah Procedure) Pass at 3OF
Asphalt Compatibility (ASTM 03407) Complete
Tensile Adhesion (ASTM D3583) 400% min
Safe Heating Temperature 410F
Recommended Pour Temperature 390F
1-3 EQUIPMENT
All equipment to be used under this section shall be of sufficient size and in such mechanical condition to be capable of adequately completing the work.
Air Compressors for cleaning the cracks shall be capable of producing an air volume of at least 150 cubic feet per minute.
A double boiler melter using heat transfer oil as the heat transfer medium, with a positive displacement, hydraulically driven, gear type pump shall be used to melt and apply the cracks sealing material. The melter shall be fully agitated and shall be capable of heating the material to the required application temperature and maintaining that temperature. The melter shall be equipped with thermometers to monitor both the temperature of the material and that of the heat transfer oil.
Alternate equipment may be acceptable at the discretion of the Engineer.
PAVEMENT CRACK SEALING 1 of 1
955.06
1-4 APPLICATION
The cracks to be sealed will be thoroughly cleaned using compressed air.
Installation of the sealant shall be such that the in-place sealant shall be well bonded to the existing asphaltic concrete and free of voids or entrapped air.
The cracks shall be sealed in a neat and workmanlike manner so that upon completion of the work the surface of the sealant material will be approximately 1/8 inch below the adjacent pavement surface. The Contractor shall refill all low cracks before final acceptance.
A manual "V" type squeegee will be used to force the crack sealing material into the crack. The sealant is intended to be placed entirely within the crack. All care will be taken to keep the surface band of material to a minimum.
1-5 MEASUREMENT AND PAYMENT
Crack sealing will not be measured for payment. Payment shall be made at the applicable lump sum price bid in the Bid Schedule, and shall include full compensation for furnishing all labor, materials, tools, and equipment for completing all crack sealing work. - END OF SECTION
PAVEMENT CRACK SEALING 1 of 2
955.06
SECTION 2
SLURRY SEAL
2-1 GENERAL
Slurry sealing consists of applying a mixture of asphaltic emulsion, water, and aggregate to existing asphalt concrete pavement as show on the Drawings. 2-2 MATERIALS
Slurry seal shall conform to Section 37 of the Standard Specifications. Slurry seal shall be Type II. Slurry seal shall be spread at a rate between 13 and 15 pounds of dry aggregate per square yard. Asphaltic emulsion shall conform to Section 37-2.02A of the Standard Specifications and shall be added at a rate of 16% of the weight of dry aggregate. 2-3 APPLICATION
Placing of the slurry seal shall be in accordance with Section 37-2.06 at the specified rate.
Mixing and spreading equipment shall conform to Section 37-2.05.
A minimum of 10 calendar days is required between the application of the crack sealer and slurry seal, unless otherwise approved by the Engineer. 2-4 MEASUREMENT AND PAYMENT
Slurry seal will be measured by the ton. The quantity of slurry seal to be paid for will be the combined weight of the aggregate and asphaltic emulsion used in the slurry seal mixture. The weight of added water and set-control additives used in the slurry seal mixture will not be included in the weight of the slurry seal to be paid for.
Payment shall be made at the applicable unit price bid in the Bid Schedule and shall include full compensation for furnishing all labor, materials, tools, and equipment for completing all slurry sealing work.
- END OF SECTIONSLURRY SEAL 1 of 1
955.06
SECTION 3
PAINTED STRIPES AND MARKINGS
3-1 GENERAL
Painted traffic striping and traffic markings shall be applied in accordance with the Drawings. Exact locations of striping and markings shall be as shown on the Drawings or as determined by the Engineer. Removal of existing striping and/or markings will not be required. 3-2 MATERIALS
Painted traffic stripes and pavement markings shall be in accordance with Section 84-3 of the State of California, Department of Transportation, Standard Specifications. 3-3 MEASUREMENT AND PAYMENT
Paint application shall be measured per square foot of paint markings and linear foot of striping installed. Payment shall be made at the applicable unit price in the Bid Schedule and shall include all compensation for removal of existing striping/marking if required, application of paint and all other appurtenant work.
- END OF SECTION -
PAINTED TRAFFIC STRIPES AND MARKINGS 1 of 1
955.06
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10/16/2024 MG
City of Gustine
Schmidt Park Trail Slurry Seal
ENGINEER'S ESTIMATE
BID SCHEDULE
Item Item Description Estimated Unit Price Item Total
No. Quantity
1 Crack Seal 1 LS $ 8,000.00 $ 8,000.00
2 Slurry Seal 38 TN $ 1,000.00 $ 38,000.00
3 Paint Striping 3,700 LF $ 2.00 $ 7,400.00
955.06
TOTAL S 53,400.00
ABSTRACT OF BIDS FOR
CITY OF GUSTINE
SCHMIDT PARK TRAIL SLURRY SEAL
Request for Proposal Response Due Date: October 30, 2024, @ 5:00 p.m.
Graham Contractors, Inc. Pavement Coatings Co. VSS International, Inc.
Engineer's Estimate 860 Lonus Street 2150 Bell Ave. Suite 125 3785 Channel Drive San Jose, CA 95126 Sacramento, CA 95838 West Sacramento, CA 9569 Item Item Quantity
No. Description and Unit Unit Price Amount Unit Price Amount Unit Price Amount Unit Price Amount 1 Crack Seal I LS 8,000.00 8,000.00 15,000.00 15,000.00 27,500.00 27,500.00 18,532.00 18,532.00 2 Slurry Seal 38 TN 1,000.00 38.000.00 730.00 27,740.00 570.00 21,660.00 1,700.00 64,600.00 3 Paint Striping 3,700 LF 2.00 7,400.00 3.45 12,765.00 3.50 12,950.00 3.24 11,988.00 BID TOTAL $53,400.00 $55,505.00 $62,110.00 $95,120.00
Subcontractors Listed: Tri Valley Striping Chrisp Company Graham Contractors, Inc.
Specialized Pavement
Marking, LLC
CITY OF GUSTINE
DEPARTMENT OF PUBLIC WORKS
SCHMIDT PARK TRAIL SLURRY SEAL
CONTRACT NO. 955.06-2024
THIS AGREEMENT made this day of ,2024, between the City of Gustine party of the first part, and Graham Contractors, Inc., Contractor, party of the second part.
ARTICLE 1.--WITNESSETH, That for and in consideration of the payments and agreements hereinafter mentioned, to be made and performed by the said party of the first part, and under the conditions expressed in the Performance bond, bearing even date with these presents, and hereunto annexed, the said party of the second part agrees with the said party of the first part, at his own proper cost and expense, to do all the work and furnish all the materials, except such as are mentioned in the specifications to be furnished by said party of the first part, necessary to construct and complete in a good, workmanlike and substantial manner and to the satisfaction of the City of Gustine, the work described in the request for proposals and the project plans described below, including any addenda thereto. and also, in conformance with current California Department of Transportation Standard Plans, the Standard Specifications, and the Labor Surcharge and Equipment Rental Rates in effect on the date the work is accomplished, which said special provisions, project plans, Standard Plans, Standard Specifications, and Labor Surcharge and Equipment Rental Rates are hereby specially referred to and by such reference made a part hereof.
The Contract Documents for the work to be done are dated October 2024 and are entitled:
CITY OF GUSTINE
DEPARTMENT OF PUBLIC WORKS
REQUEST FOR PROPOSALS
FOR THE
SCHMIDT PARK TRAIL SLURRY SEAL PROJECT
The term "Contract Documents" means and includes the following and are hereby incorporated herein by reference:
A General Information
B. Project Description and Requirements
C. Bid Schedule
D. Agreement
E. Certificate of Contractor
F. Performance Bond
G. Notice of Award
H. Notice to Proceed
I. Technical Specifications prepared or issued by Gouveia Engineering, Inc.
J. Drawings prepared or issued by Gouveia Engineering numbered C-101 through C-102.
ARTICLE II.--The said party of the first part hereby promises and agrees with the said Contractor to employ, and does hereby employ, the said Contractor to provide the materials and to do the work according to the terms and conditions herein contained and referred to, for the prices hereinafter set forth, 955.06
AGREEMENT 1-3
and hereby contracts to pay the same at the time, in the manner and upon the conditions herein set forth; and the said parties for themselves, their heirs, executors, administrators, successors and assigns, do hereby agree to the full performance of the covenants herein contained.
ARTICLE Ill. -- The State general prevailing wage rates determined by the Director of industrial Relations are hereby made a part of this contract. It is further expressly agreed by and between the parties hereto that should there be any conflict between the terms of this instrument and the bid or proposal of said Contractor, then this instrument shall control and nothing herein shall be considered as an acceptance of the said terms of said proposal conflicting herewith.
ARTICLE IV. --By my signature hereunder, as Contractor, I certify that I am aware of the provisions of Section 3700 of the Labor Code which require every employer to be insured against liability for worker's compensation or to undertake self-insurance in conformance with the provisions of that code, and I will comply with such provisions before commencing the performance of the work of this contract.
ARTICLE V.--And the said Contractor agrees to receive and accept the following prices as full compensation for furnishing all materials and for doing all the work contemplated and embraced in this agreement; also for all loss or damage, arising out of the nature of the work aforesaid, or from the action of the elements, or from any unforeseen difficulties or obstructions which may arise or be encountered in the prosecution of the work until its acceptance by the CITY OF GUSTINE, DEPARTMENT OF PUBLIC WORKS, and for all risks of every description connected with the work; also for all expenses incurred by or in consequence of the suspension or discontinuance of work and for well and faithfully completing the work, and the whole thereof, in the manner and according to the plans and specifications, and the requirements of the Engineer under them, to wit:
BID SCHEDULE
1 2
3 Crack Seal
Slurry Seal
Paint Striping
ESTIMATED
QUANTITY
1 LS $
$
$
UNIT
PRICE
ITEM
TOTAL
ITEM
NO. BID ITEM DESCRIPTION
15,000.00 $ ----�- 15,000.00 - 730.00 $ ____ 27 .,___� 740.00
3.45 $ ----12�-- ,765.00
TOTAL BID $ 55,505.00
IN WITNESS WHEREOF, the parties to these presents have here-unto set their hands the year and date first above written
CITY OF GUSTINE
By: _
Soknirorn Than, City Manager
By:
GRAHAM CONTRACTORS, INC.
Authorized Representative of Contractor
(Seal if Corporation)
(Attach Acknowledgement for Authorized Representative of Contractor) 955.06
AGREEMENT 2-3
Certificate of Contractor
I,--------------------------------------
(Name)
certify that I am a/the _
(Title)
designate sole proprietor, partner in partnership, or corporate officer with Contractor License Number 315789 in the entity named as Contractor in the foregoing Agreement.
I hereby expressly certify that the name of the entity to which I am associated is Graham Contractors Inc.
(Company Name)
that this entity is in good standing and has complied with all applicable laws and regulations, and that I have been expressly authorized by the proper parties in this entity to execute the Agreement on behalf of the above-named entity.
ATTEST:
Signature: _
This form must be acknowledged before a Notary Public. The acknowledgement must be attached. 955.06
AGREEMENT 3-3