Agenda packet — Half Moon Bay City Council, May 19, 2026 (part 2 of 2)

BUSINESS OF THE COUNCIL OF THE CITY OF HALF MOON BAY

AGENDA REPORT
For meeting of: May 19, 2026
TO: Honorable Mayor and City Council
VIA: Matthew Chidester, City Manager
FROM: Dale Leda, Interim City Engineer
TITLE: SEWER AUTHORITY MID-COASTSIDE REVISED FISCAL YEAR 2026-27

OPERATIONS AND MAINTENANCE (GENERAL) BUDGET
______________________________________________________________________________ RECOMMENDATION:

Adopt a resolution approving the Sewer Authority Mid-Coastside General (Operations and Maintenance) Budget for FY 2026-27.

FISCAL IMPACT:

The proposed SAM General Budget for FY 2026-27 is $11,555,125, including $7,305,125 for operations and maintenance and $4,250,000 for infrastructure projects. This represents an increase of $1,482,859, or approximately 15%, from the FY 2025-26 adopted budget.

The total member agency assessment for FY 2026-27 is $11,423,588. Half Moon Bay’s share is $6,988,951, an increase of $999,751, or approximately 17%, from the FY 2025-26 adopted assessment of $5,989,200. The City’s assessment is based on its 61.18% flow allocation, using Calendar Year 2025 wastewater flows.

The City’s share will be paid through sewer user fee revenues from the Sewer Operating Fund and authorized transfers from the Sewer Capital Fund, as appropriate. Sufficient funds are available for the proposed FY 2026-27 assessment; however, the infrastructure budget includes estimated costs for the Montara Force Main rehabilitation project that may change once SAM receives the contractor’s Guaranteed Maximum Price, currently anticipated in June. If the final project cost exceeds the amount included in the adopted SAM budget, SAM may need to return to the member agencies with a budget adjustment, which could increase the City’s costs.

The City is exploring consultant support to prepare an updated sewer rate study. The study will evaluate the adequacy of current sewer rates to support ongoing operations, capital needs, and regional wastewater obligations, including any updated costs related to the Montara Force Main rehabilitation project.
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STRATEGIC ELEMENT:

This action supports the Infrastructure and Environment, Healthy Communities and Public Safety, and Fiscal Sustainability elements of the Strategic Plan.

BACKGROUND:

The Sewer Authority Mid-Coastside (SAM) is a Joint Powers Authority composed of three member agencies: the City of Half Moon Bay, Granada Community Services District, and Montara Water and Sanitary District. SAM manages regional wastewater treatment and related infrastructure on behalf of the member agencies.

Each year, SAM prepares a General Budget for operations, maintenance, and infrastructure projects. The budget is organized into four divisions: Administrative Services, Treatment, Environmental Compliance, and Infrastructure. Under the Joint Exercise of Powers Agreement, operation and maintenance expenses are shared by the member agencies based on their respective wastewater flows into the consolidated treatment plant.

For FY 2026-27, the flow-based allocation percentages are:
• Half Moon Bay: 61.18%
• Granada Community Services District: 18.21%
• Montara Water and Sanitary District: 20.61%
These percentages are based on Calendar Year 2025 wastewater flows and are updated annually. Half Moon Bay’s allocation increased from 60.24% in FY 2025-26 to 61.18% in FY 2026-27.

DISCUSSION:

SAM’s FY 2026-27 General Budget continues funding for wastewater treatment, environmental compliance, system operations, and capital improvements that support the regional wastewater system. The budget is organized into operating divisions — Administrative Services, Treatment, and Environmental Compliance — and a separate Infrastructure division for capital projects.

Because infrastructure costs can fluctuate significantly depending on capital project timing and scope, it is useful to distinguish between the operating and infrastructure components of the budget. The operating budget increase is driven primarily by personnel, equipment, utilities, chemicals, insurance, and professional services. Personnel costs reflect cost-of-living and merit increases, benefit costs, and retirement-related costs. Equipment costs reflect non-project capital improvements and equipment repair/replacement needs that support ongoing plant operations.

The infrastructure budget includes projects identified in SAM’s capital improvement program.

Major projects include rehabilitation of the SAM Force Main situated in Montara, replacement of Effluent Pumps 1, 2, and 3, replacement of Pump 1 at the Montara Pump Station, and 191

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replacement of Pump 1 at the Portola Pump Station. These costs are included in SAM’s overall infrastructure program and allocated among the member agencies in the same manner as the rest of the General Budget.

The Montara Force Main rehabilitation project is the largest infrastructure component in the FY 2026-27 budget. The current amount is based on available project estimates, but SAM expects to receive the contractor’s Guaranteed Maximum Price in June. The GMP may refine the total project cost and could result in a higher infrastructure funding need than currently budgeted. If additional funding is required, SAM may return to the member agencies with a budget adjustment, and Half Moon Bay’s share would be determined under the applicable allocation methodology.

The City is also proceeding with an updated sewer rate study to evaluate whether current sewer rates are sufficient to support ongoing operations, capital needs, and regional wastewater obligations, including any updated costs associated with the Montara Force Main rehabilitation project.

Approval of the FY 2026-27 SAM General Budget will allow SAM to continue providing wastewater treatment, environmental compliance, system operations, and infrastructure improvements for the member agencies and their ratepayers. Staff recommends approval to support continued operation of these essential regional wastewater services.

CONCLUSION:

SAM provides critical wastewater treatment, environmental compliance, and regional infrastructure services for the City of Half Moon Bay and the other member agencies. The FY 2026-27 General Budget supports continued operation of these services and funds necessary infrastructure improvements through SAM’s capital improvement program. The City’s updated sewer rate study will further evaluate long-term sewer revenue needs, including any changes in regional infrastructure obligations. Staff recommends that the City Council adopt a resolution approving the FY 2026-27 SAM General Operations and Maintenance Budget.

ATTACHMENT:

1. Resolution approving the Sewer Authority Mid-Coastside Revised General (Operations and Maintenance) Budget for FY 2026-27

2. SAM O&M FY 2026-27 Staff Report
192
Resolution No. C-2026-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HALF MOON BAY APPROVING THE

SEWER AUTHORITY MID-COASTSIDE GENERAL (OPERATIONS AND MAINTENANCE) BUDGET FOR FISCAL YEAR 2026-27
WHEREAS, City of Half Moon Bay representatives have reviewed and provided input on the proposed General Budget of the Sewer Authority Mid-Coastside (SAM) for Fiscal Year (FY) 2026- 27; and
WHEREAS, SAM provides regional wastewater treatment, environmental compliance, operations, maintenance, and infrastructure services for the benefit of the member agencies and their ratepayers; and
WHEREAS, the proposed SAM General Operations and Maintenance Budget for FY 2026-27 totals $11,555,125, including operations and maintenance expenses, infrastructure project costs, and total member agency assessments of $11,423,588; and WHEREAS, the City of Half Moon Bay’s share of the FY 2026-27 member agency assessment is $6,988,951, based on its flow allocation of 61.18%; and WHEREAS, the FY 2026-27 SAM General Operations and Maintenance Budget includes $4,250,000 for infrastructure projects identified in SAM’s capital improvement program; and WHEREAS, the infrastructure portion of the budget includes continued funding for the Montara Force Main rehabilitation project, and SAM may return to the member agencies with a budget adjustment if updated project costs require additional funding; and WHEREAS, the costs of SAM operations and infrastructure for FY 2026-27 will be funded from City Sewer Enterprise Funds, including the Sewer Operating Fund and authorized transfers from the Sewer Capital Fund, as appropriate.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Half Moon Bay approves the General (Operations and Maintenance) Budget of SAM for FY 2026-27 attached as Exhibit A to this resolution.
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I, the undersigned, hereby certify that the foregoing resolution was duly passed and adopted on the 19th day of May 2026, by the City Council of Half Moon Bay by the following vote:

AYES, Councilmembers:

NOES, Councilmembers:

ABSENT, Councilmembers:

ABSTAIN, Councilmembers:

ATTEST: APPROVED:
___________________________ ______________________________ Maggie Rodriguez, Interim City Clerk Debbie Ruddock, Mayor 194
General Budget
Fiscal Year 2026/27
195

OPERATIONS BUDGET

EXECUTIVE SUMMARY
The Joint Exercise of Powers Agreement (Agreement) that created SAM and governs its day-to-day operations specifies that “The total expenses of operation and maintenance shall be shared in a manner based on flows into the single consolidated plant.” The General Budget is divided into Administrative Services, Treatment, Environmental Compliance, and Infrastructure.

The General Budget includes obligations for wages and benefits defined in employment and bargaining contracts, increases in retirement contributions, and other non-discretionary expenses.

JPA Income & Expenses – General Budget
Operating Income
Assessments - City of Half Moon Bay 6,988,951
Assessments - Granada Community Services District 2,080,235 Assessments - Montara Water & Sanitary District
Interest Income
2,354,401
78,500
NDWSCP Fees 53,037
Total Operating Income $11,555,125
Operating Expenses
Wages 2,078,100
Benefits 1,167,050
Legal Services 200,000
Engineering Services 160,800
Professional & Technical Services 965,625
Professional Memberships 76,200
Insurance Premiums 265,000
Miscellaneous Expenses 120,800
Utilities 839,300
Travel & Training 64,400
Equipment Rental/Lease 29,300
Building & Maintenance Services 176,000
Chemicals 470,000
Permits & Licenses 62,100
Supplies 128,450
Equipment 417,000 196
Infrastructure Projects 4,250,000
Claims & Penalties 85,000

Total Expenses $11,555,125
Total Operating Expenses (less Infrastructure) $7,305,125 Contribution to Reserve Funds
(Revenues less Expenses)
$0

The overall increase from the adopted budget for Fiscal Year 2025/26 to the adopted budget for Fiscal Year 2026/27 is $1,482,859 (15%). This is primarily due to an increase in budget related to equipment and infrastructure.

Of the total General Budget, $3.2 million (28%) is for Wages and Benefits. The cost of Infrastructure Improvements is $4.25 million (37%). Legal, Engineering and Professional Services is $1.3 million (11%) and accounts for a significant percentage of the budget due to SAM’s dependency on contractors and consultants for technical and specialized services. Other expenses (including Utilities, Insurance, Equipment Rental, Maintenance Services, Chemicals, Permits, Supplies, Equipment, and Claims) represent 24% of the budget.
*All Other Expenses include: Utilities, Insurance, Equipment Rental, Maintenance Services, Chemicals, Permits, Supplies, Equipment, and Claims.

Wages and
Benefits
$3,245,150
28%
Legal and Professional
Services
$1,326,425
11%
Infrastructure
$4,250,000
37%
All Other
Expenses*
$2,733,550
24%
Expenses by Category
Total $11.55 million
197
Division Budgets by Fiscal Year
FY 2023/24
Actual
FY 2024/25
Actual
FY 2025/26
Adopted
FY 2026/27
Proposed
$
Change
%
Change
Administration $2,046,988 $2,148,035 $1,793,907 $1,846,725 $52,818 3% Treatment $4,176,443 $4,170,680 $4,421,346 $5,222,650 $801,305 18% Environmental
Compliance $196,956 $192,050 $212,013 $235,750 $23,737 11% Total
Operating
Budget
$6,420,387 $6,510,765 $6,427,266 $7,305,125 $877,859 14% Infrastructure $3,258,684 $3,388,625 $3,645,000 $4,250,000 $605,000 17% Total General
Budget $9,679,071 $9,899,390 $10,072,266 $11,555,125 $1,482,859 15% The Administrative Services division increased $52,818 (3%). Mainly due to the projected increase of Professional Services related to web hosting & IT support. In addition, Professional Memberships & Fees is expected to increase due to SAM’s continued participation in the First Flush program.

The Treatment division increased $801,305 or 18%, which is due to the known COLA & Merit increase of 4%.

In addition, we are expecting and 11% increase in the cost of Health Benefits as well as payments of Retirement Contributions to CalPERS. We have budgeted an additional $400K in the equipment line item to account for Non-Project Capital related expenses incurred by SAM on an annual basis.

The Environmental Compliance division budget increased by $23,737 or 11% primarily due to the projected Payroll and Benefits increases.

The Infrastructure division increased $605,000 to address various projects in the Authority Capital Improvement Plan.

BUDGET ALLOCATION AND ASSESSMENTS
The Joint Exercise of Powers Agreement (JEPA) stipulates that the total expenses of operation and maintenance of all the components of the Present Project (intertie pipeline and attendant pump facilities, ocean outfall, treatment plant) shall be shared in a manner based on flows.

Flow Results for Budget Allocations*

HMB GCSD MWSD
FY 2026/27 61.18% 18.21% 20.61% (Based on Calendar Year 2025) FY 2025/26 60.24% 18.84% 20.92% (Based on Calendar Year 2024) Variance 0.94% -0.63% -0.31%
* The member agency assessments are allocated based on flow percentages from the previous calendar year. This allocation varies each year. 198
Total Assessments for Each Member Agency*
FY 2023/24
Actual
FY 2024/25
Actual
FY 2025/26
Adopted
FY 2026/27
Proposed
$
Change
%
Change
Half Moon Bay $5,331,608 $5,642,255 $5,989,200 $6,988,951 $999,751 17% Granada CSD $1,651,497 $1,766,336 $1,873,116 $2,080,235 $207,119 11% Montara WSD $1,686,174 $1,868,382 $2,079,915 $2,354,401 $274,486 13% Total $8,669,279 $9,273,973 $9,942,231 $11,423,588 $1,481,357 15% * The assessments to the Member Agencies are rounded to nearest dollar.

HMB
$6,988,951

61.18%
GCSD
$2,080,235

18.21%
MWSD
$2,354,401

20.61%
Assessments for FY 2026‐27
Based on Calendar Year 2025 Flow
199
Assessments History by Agency (in 1,000’s)
200

OVERALL OPERATIONS BUDGET SUMMARY
(Includes: Administrative Services, Treatment, Environmental Compliance, and Infrastructure) Key Changes
Personnel costs: Increase due COLA and Merit increases and labor negotiations Legal Services: Decrease expected due to conclusion of labor negotiations $ 263,338
$ (35,000)
Professional Services: Increase due to estimates based on Year-to-Date Actuals $ 56,025 Utilities: Increase due to estimates based on Year-to-Date Actuals Equipment: Increase due to inclusion of Non-Project plant repairs $ 33,003
$ 404,259
Chemicals: Based on Year-to-Date Actuals $ 24,137
Insurance Premiums: Increase due to estimates based on Year-to-Date Actuals $ 15,018 All other Operating Expenses: Increase due to CPI and adjustments to other operating expenses $ 117,079 TOTAL GENERAL OPERATING EXPENDITURES BUDGET INCREASE $ 877,859 Infrastructure: Increase result of CIP (includes engineering costs, reclassified) $ 605,000 TOTAL GENERAL OPERATING EXPENDITURES BUDGET INCREASE $ 1,482,859

201
Key Changes
Assessments reflect Increased funding for Infrastructure Projects, Maintenance, Staff $ 1,481,357 TOTAL GENERAL OPERATING REVENUE BUDGET INCREASE $ 1,481,357

202

FINANCIAL DETAILS
The following is a list of key budget lines for FY2025/26 and 2026/27 budgets with brief explanations of the changes from year to year. This is a “budget to budget” comparison and does not necessarily represent current expenditures. Underlined items indicate a budget change in excess of $10,000 year to year.

Budget Line # FY 2025/26 FY 2026/27

1. Wages $1,786,300 $1,906,100
Increase is a result of PY COLA & Merit increase being
estimated higher than necessary.

2. Premium Pay $144,100 $172,000
Overtime paid for staff to perform tasks outside of
normal work times.

3. Health Benefits $354,596 $400,750
The cost of medical, dental, and vision benefits
provided to employees based on the MOU and
Unrepresented Employees.

4. Retirement Contributions $541,000 $591,400
SAM pays the employer contribution to CalPERS for
retirement benefits as well as the unfunded liability.

5. Retiree Medical/OPEB $44,960 $62,850
Includes contributions to a Health Retirement Account
for future retirees as well as current retiree medical
premiums.

6. Misc. Benefits $110,856 $112,050
Includes Medicare, long-term and short-term disability, workers compensation, and matching funds to a 457
plan.

7. Personnel Subtotal
Subtotal of all wage and benefit costs.
$2,981,812 $3,245,150

8. Legal Services $235,000 $200,000
Includes general counsel and employment
legal fees

9. Engineering Services
Increased to provide design and project
$150,243 $160,800
management related to treatment division.
203
Budget Line # FY 2025/26 FY 2026/27

10. Professional Services $909,600 $965,625
Includes ongoing services that are specialized and
need to be performed by consultants rather than staff.

11. Professional Memberships $60,001 $76,200
Includes memberships in professional organizations for
SAM and employees that keeps them current in
industry practices and improves how SAM serves the
community.

12. Insurance Premiums $249,982 $265,000
Property, liability, and pollution premiums based on
utilization rates.

13. Misc. Expenses $86,566 $120,800
Includes incidental expenses (uniforms laundry
services, radio and alarm systems, offsite storage,
postage, claims, copier, phone system support, etc.)
not reflected in other categories.

14. Utilities $806,297 $839,300
Electricity, water, telephone, solid waste, etc.

15. Travel & Training $57,011 $64,400
Training and travel related costs for attendance at
industry conferences and seminars, and other related
events to allow staff to keep current on technical skills and industry best practices.

16. Equipment Rental/Lease $27,875 $29,300
Short-term rental or lease of equipment (generators,
storage tanks, etc.).

17. Building & Maintenance Services $148,100 $176,000
Includes janitorial, landscaping, and other regular
building maintenance services.

18. Chemicals
Includes chemicals used in the treatment of wastewater
$445,863 $470,000
to meet regulatory standards.

204
Budget Line # FY 2025/26 FY 2026/27

19. Permits & Licenses
Annual costs for permits with local, regional and state agencies.
$55,997 $62,100

20. Supplies
Office, computer, breakroom, and safety supplies.
$120,178 $128,450

21. Equipment Purchase
Purchase of equipment use at SAM facilities not
included in infrastructure projects.
$12,741 $417,000

22. Infrastructure Projects
Includes costs of projects included in 5-Year CIP.

Includes engineering costs associated.
$3,645,000 $4,250,000

23. Claims/Penalties
Reflects claims expenses not covered by insurance.
$80,000 $85,000

25. Non-Personnel Subtotal
Subtotal of all costs not associated with wages and
benefits.
$7,090,454 $8,309,975

26. Total
Total of all costs (sum of Personnel and Non-Personnel
subtotals).
$10,072,266 $11,555,125

205

ADMINISTRATIVE SERVICES
By Category
206

ADMINISTRATIVE SERVICES
By Category
Key Changes
Personnel Costs: Expected reduction of hours for admin division employee $ (3,385) Legal Services: Decrease expected due to conclusion of labor negotiations Professional Services
$ (35,000)
$ 25,861
Insurance Premiums: Increased based on expected increase in premiums $ 15,018 Claims/Penalties $ 0
All other Operating Expenses: Increase due to CPI and adjustments to other operating expenses 50,324 TOTAL ADMINISTRATION EXPENDITURES BUDGET INCREASE $ 52,818 Key Changes
Key Changes
Assessments reflect increases in Professional Services and Insurance Premiums $ 44,318 TOTAL ADMINISTRATION REVENUE BUDGET INCREASE $ 44,318
207

TREATMENT
By Category
Key Changes
Personnel Costs: Increase due COLA and merit increases as well as the cost of Benefits $ 254,274 Utilities
Professional Services
$ 44,953
$ 22,473
Equipment $ 400,896
Chemicals $ 22,637
All other operating expenses: Increase due to CPI and adjustments to other Operating Expenses $ 56,072

TOTAL TREATMENT EXPENDITURES BUDGET INCREASE
$ 801,305
208

TREATMENT
By Category
Assessments reflect net increased funding for Personnel, Utilities, Chemicals & Equipment $ 808,302 TOTAL TREATMENT REVENUE BUDGET INCREASE $ 808,302
Key Changes
209

ENVIRONMENTAL COMPLIANCE
By Category

Key Changes
Personnel Costs: Increase due to Merit and COLA increases $ 12,449 Professional Services: based on current trends $ 7,691
Net increase in Wages, Utilities, Services, and Supplies $ 3,597 TOTAL ENVIRONMENTAL COMPLIANCE EXPENDITURES BUDGET INCREASE $ 23,737 210

ENVIRONMENTAL COMPLIANCE
By Category
Assessments reflect Increased funding for Wages, Benefits, and Other Expenses $ 23,737 TOTAL ENVIRONMENT COMPLIANCE REVENUE BUDGET INCREASE $ 23,737 Key Changes
211

INFRASTRUCTURE
By Category
Key Changes
Increased to address the projects identified in the FY2026-27 Capital Improvement Plan Budget TOTAL INFRASTRUCTURE EXPENDITURES BUDGET INCREASE $ 605,000

212

INFRASTRUCTURE
By Category
Key Changes
Increased to address the projects identified in the FY2026-27 Capital Improvement Plan Budget TOTAL INFRASTRUCTURE REVENUE BUDGET INCREASE $ 605,000

213

HIGHLIGHTS
 Infrastructure Projects addressed in FY 2025/26
 SAM Force Main Refurbishment Montara Segment – Progressive Design Build in Progress
 Completed installation of Boiler #1. Awaiting Boiler #2.  Electrical Building Relocation- Design in Progress.
 Completed Installation of Primary Sludge Pumps
 Completed Installation of Grit Pumps
 Completed installation of #3 Water Pumps

214
Project: Rehabilitation of SAM Force Main situated in Montara Priority: Rehabilitation/Replacement/Safety
The SAM Force Main situated in Montara Rehabilitation (MFM) Project addresses aging, at‐risk pipeline within the Intertie Pipeline System. The MFM conveys wastewater from the Montara and Moss Beach communities to SAM’s Wastewater Treatment Plant in Half Moon Bay. The MFM is approximately 16,750 feet in length, ranging from 12 to 14‐inches in diameter and was constructed of ductile iron pipe (DIP) in the early 1980s.

A 2017 project replaced the first 2,500 feet of MFM from Montara Pump Station to the end of Vallemar Street with high‐density polyethylene (HDPE) pipe and replaced the associated air/vacuum relief valves.

A 12‐inch‐diameter DIP portion of the MFM experienced failure during the atmospheric river storm that started on December 31, 2022, which was declared as a disaster at both the State and Federal levels.

SAM’s emergency response included replacement of an 850‐ft portion of the impacted force main with HDPE. It is proposed to replace the remaining 13,400 feet of the MFM project before June 30, 2026.

CIP Total Cost: $10,000,000
Project Funding: This project will be funded by SAM’s Infrastructure Program Basis of Priority: This priority project continues the best practice of rehabilitating aging force main to mitigate sanitary sewer overflows, human health risks, environmental damages, and other regulatory violations.

Annual Cost Distribution and Schedule
CIP Total FY2024/25 FY2025/26 FY2026/27 FY 2027/28 FY 2028/29

10.160M 3.0M 3.510M 3.65M ‐ ‐
215
SEWER AUTHORITY MID‐COASTSIDE
CAPITAL IMPROVEMENT PROGRAM FY2026 ‐ FY2027
Project: Replace Effluent Pumps 1, 2, and 3
This project involvesreplacing effluent pumps/motors 1, 2, and 3. These pumps are old and exceeded their useful lives. These pumps are no longer manufactured and replacement parts must be custom fabricated when necessary. Equipment have been purchased and require installation.

Effluent pumps 1, 2, and 3
CIP Total Cost: $450,000
Project Funding: This project will be funded by SAM’s Infrastructure Program Reason: This project is a priority because these pumps are responsible for conveying all flow out of the WWTP during storm events and high tide when ocean outfall can no longer flow by gravity. Since the WWTP could potentially flood in an eventsuch asthis, the pumps must be maintained in peak reliable condition at all times.

Annual Cost Distribution and Schedule
CIP Total FY2026
450,000 450,000
216
SEWER AUTHORITY MID‐COASTSIDE
CAPITAL IMPROVEMENT PROGRAM FY2026 ‐ FY2027
Project: Montara Pump Station ‐ Replace Pump 1
Priority: Rehabilitation/Replacement
This project involves replacing pumps No. 1 at the Montara Pump Station with submersible grinder style pump similar to pump No. 3. This pump has been purchased and needs to be installed.

CIP Total Cost: $100,000
Project Funding: This project will be funded by SAM’s Infrastructure Program Basis of Priority: This is a discretionary project that will benefit the performance and reliability of the Montara Pump Station by replacing pump No. 1 with a higher efficiency grinder style pump.

Annual Cost Distribution and Schedule
CIP Total FY2026
100,000 100,000
217
SEWER AUTHORITY MID‐COASTSIDE
CAPITAL IMPROVEMENT PROGRAM FY2026 ‐ FY2027
Project: Portola Pump Station ‐ Replace Pump 1
Priority: Rehabilitation/Replacement
This project replaces pump 1. Pump 1 is the most frequently used pump at the station and sees the most run time. The pump is old and comprised of multiple different parts of varying age and presumed reliability. The pump has been purchased and needs to be installed.

Pumps 1, 2, 3, and 4 (from left to right)
CIP Total Cost: $50,000
Project Funding: This project will be funded by SAM’s Infrastructure Program Basis of Priority: This project is a priority since the components of pump are old and require replacement.

Annual Cost Distribution and Schedule
CIP Total FY2026
50,000 50,000
218
Position Control List
Classifications Authorized
Positions
Administrative Services:

General Manager 1.0
Finance Officer
Accounting Technician

1.0 1.0
Administrative Assistant 1.0

4.0 Operations & Maintenance:

Engineering & Construction Contracts Manager (Defunded) Supervisor of Treatment / Field Operations

0.0 0.75
Maintenance Mechanic I/II/III 2.0
Operator I/II/III 2.0
Lead Operator 4.0
Utility Worker (Defunded) 0.0

8.75 Environmental Compliance:

Supervisor of Treatment / Field Operations .25
Total Authorized – General Budget 13.0
Collection Services:

Collection Maintenance Worker I/II/III 3.0
Maintenance Mechanic I/II/III 1.0
Total Authorized – Collections Services 4.0
Grand Total Authorized Authority 17.0
219
March 9, 2026
Agenda Item No: 4B

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BOARD MEMBERS: N. Marsh B. Dye S. Boyd
P. Nagengast D. Ruddock K. Slater-Carter
ALTERNATE MEMBERS: W. Bowles B. Softky J. Randle
M. Allen

SEWER AUTHORITY MID-COASTSIDE
Staff Report
TO: Honorable Board of Directors
FROM: Kishen Prathivadi, General Manager
SUBJECT: Discuss Proposed General Budget for FY 2026/27 and Authorize the General Manager to Submit it to Member Agencies for Approval.

Executive Summary
The purpose of this report is to discuss the proposed General Budget for FY 2026/27 and authorize the General Manager to submit it to Member Agencies for approval.

Fiscal Impact
The Operation and Maintenance expenditure budget for FY 2026/27 is $11.5 million, including infrastructure project expenses. This is an overall increase of $1,482,859 from the FY 2025/26 adopted budget. The impact to the member agency assessments is:

Assessments for Each Member Agency
220
March 9, 2026
Agenda Item No: 4B

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BOARD MEMBERS: N. Marsh B. Dye S. Boyd
P. Nagengast D. Ruddock K. Slater-Carter
ALTERNATE MEMBERS: W. Bowles B. Softky J. Randle
M. Allen
Strategic Plan Compliance
The recommendations in the proposed budget comply with SAM Strategic Plan Goal 3: “Consider longterm costs and ensure that finances are stable and understandable by the board, member agencies, and the public.”
Background and Discussion/Report
The General Budget includes all Operation and Maintenance (O&M) costs for SAM and are allocated to four divisions: Administrative Services, Treatment, Environmental Compliance, and Infrastructure. The proposed budget includes obligations for wages and benefits defined in employment and bargaining contracts, increases in retirement contributions, and other non-discretionary expenses.

Staff made the following assumptions in determining changes from the FY 2025/26 adopted budget. • The position of Engineering & Construction Contracts Manager continues to be defunded. • All applicable merit step increases will be earned per the MOU with Local No. 39. • All authorized positions are funded. Salaries for filled positions are estimated at one step up.

Salaries for currently vacant positions are estimated at mid-step. There are a total of 17 positions:
• 7 employees are scheduled for a step increase.
• One is the General Manager who is on a contract.

HMB
$6,988,951

61.18%
GCSD
$2,080,235

18.21%
MWSD
$ 2,354,401

20.61%
Assessments for FY 2026/27
Based on Calendar Year 2025 Flow
221
March 9, 2026
Agenda Item No: 4B

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BOARD MEMBERS: N. Marsh B. Dye S. Boyd
P. Nagengast D. Ruddock K. Slater-Carter
ALTERNATE MEMBERS: W. Bowles B. Softky J. Randle
M. Allen
• All services, supplies, and utilities will be increased by a 5% CPI unless specific adjustment was deemed necessary based on actual experience or known factors.

Budget Overview
The General Budget, including the proposed infrastructure projects, has been discussed by the Member Agency Managers and by the Finance Committee. The presentation today is for the Board to review and follow-up with agency staff and respective Council/Boards for comment. Final approval of the proposed budget will take place later in the process.

The overall increase from the adopted budget for Fiscal Year 2025/26 to the proposed budget for Fiscal Year 2026/27 is $1,482,859 or 15%. This is primarily due to an increase in the estimated cost of infrastructure improvements as well as expected non-project capital improvements.

Of the total General Budget, $3.24 million (28%) is for Wages and Benefits. The cost of Infrastructure improvements is $4.25 million (37%). Legal, Engineering and Professional Services is $1.33 million (11%) and accounts for a significant percentage of the budget due to SAM’s dependency on contractors and consultants for technical and specialized services.

All other expenses (including Utilities, Insurance, Equipment Rental, Maintenance Services, Chemicals, Permits, Supplies, Equipment, and Claims) represent the remaining $2.73 million (23%) of the budget. 222
March 9, 2026
Agenda Item No: 4B

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BOARD MEMBERS: N. Marsh B. Dye S. Boyd
P. Nagengast D. Ruddock K. Slater-Carter
ALTERNATE MEMBERS: W. Bowles B. Softky J. Randle
M. Allen
*
All Other Expenses include: Utilities, Insurance, Equipment Rental, Maintenance Services, Chemicals, Permits, Supplies, Equipment, and Claims.

Significant Budget Changes
The Administrative Services division increased $52,818 or (3%). The net increase is mainly a result of expected increases in the areas of Professional Services (11%) [increase in cost of IT support & web hosting services], Professional Memberships (33%) [First flush program increase], Insurance Premiums (6%) and Miscellaneous Expenses (44%) [sharp increase in the cost of document storage services].

The Treatment division increased $801,305 or 18%, which is due to the known COLA & Merit increase of 4% and 3% respectively as well as the expected increase of the cost of Healthcare and Retirement Benefits for Treatment division employees. In addition, management has budgeted an additional $400,000 of Non-Project Capital Improvements which was not done in the earlier years.

The Environmental Compliance division budget increased $23,737 or (11%) primarily due to the increase in personnel costs as well as the increase in Professional Services (off-site testing costs).

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BOARD MEMBERS: N. Marsh B. Dye S. Boyd
P. Nagengast D. Ruddock K. Slater-Carter
ALTERNATE MEMBERS: W. Bowles B. Softky J. Randle
M. Allen
The Infrastructure division increased $605,000 to address various projects in the Authority Capital Improvement Plan.

Detail Changes in Expenses
The significant overall changes in the expense categories are as follows. The numbers are correlated to the line items on the budget spreadsheets.

1. Wages: Increase of $119,800 due to known increases in merit and COLA.

2. Premium Pay: Increase of $27,900 due to standby pay, certification pay, and overtime pay.

3. Health Benefits: Increase of $46,154 due to labor negotiation approval of 100% coverage of SAM staff as well as increased health insurance costs, budgeted for 11% based on history.

4. Retirement Contributions: Increase of $50,400 primarily due to the estimation of retirement costs related to the unfunded liability portion in the prior year’s budget. (Every year this amount is estimated but the actual amount is not in our control and is not known until we are officially notified by CalPERS after the fiscal year is over).

5. Retirement Medical: Increase of $17,890 for contributions as negotiated inthe MOU and the Unrepresented Employees as well as a contribution of $18,000 to SAM’s section 115 OPEB trust administered by PARS.

6. Misc. Benefits: Increase of $1,194 for benefits as negotiated in the MOU and the Unrepresented Employees.

7. Personnel Subtotal: Increase of $263,338 in personnel costs primarily due to the annual funding of SAM’s CalPERS Unfunded Liability.

8. Legal Services: Decrease of $35,000 due to the completion of labor negotiations with Local No. 39 and expected reduced involvement of General Counsel/Special Counsel.

9. Engineering Services: Increase of $10,557 due to continued involvement with Authority Engineering team.

10. Professional Services: Increase of $56,025.

The major contracting firms and the status of their contracts, if applicable, are as follows:
• Calcon Systems, electrical services: Existing contract in next fiscal year not to exceed $400,000.
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March 9, 2026
Agenda Item No: 4B

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BOARD MEMBERS: N. Marsh B. Dye S. Boyd
P. Nagengast D. Ruddock K. Slater-Carter
ALTERNATE MEMBERS: W. Bowles B. Softky J. Randle
M. Allen
• RVE Accounting, financial & accounting services: As Needed. • Alpha Analytical Laboratories, essential lab services: As Needed. • Peninsula Pump, handles pump repair, generally an emergency repair: As Needed. • Precision IT, computer equipment maintenance: IT support as and when needed.

11. Professional Memberships: Increase of 27% expected due to the continued participation in the First Flush program.

12. Insurance Premiums: Increase of $15,018 due to increased cost of coverage.

13. Misc. Expenses: Increase of $34,234 anticipated based on detailed review of current year expenditures, increase due mainly to the cost of document storage services.

14. Utilities: Increase of $33,003 for electricity, gas, solid waste disposal, and water consistent with current costs.

15. Travel & Training: Increase of $7,389 based on expectation that conference attendance will continue to increase.

16. Equipment Rental: Increase of $1,425 due to the completion of specific maintenance projects.

17. Building & Maintenance Services: Decrease of $27,900 mainly due to recurring roof work at the SAM office.

18. Chemicals: Increase of $24,137 based on anticipated expenses consistent with recent experience and expected industry increases.

19. Permits & Licenses: Increase of $6,103, cost of permit was over budget for current fiscal year.

20. Supplies: Increase of $8,272 based on current year expenditures.

21. Equipment: Increase of $404,259, non-project capital improvements.

22. Infrastructure: Increase of $605,000 to address the projects identified in the adopted 5-year CIP (adopted November 25, 2024) and additional projects as indicated in Infrastructure details of the General Budget.

23. Claims/Penalties: Increase $5,000.

24. Non-Personnel Subtotal: Total Increase of $1,219,521 or 17%. 225
March 9, 2026
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BOARD MEMBERS: N. Marsh B. Dye S. Boyd
P. Nagengast D. Ruddock K. Slater-Carter
ALTERNATE MEMBERS: W. Bowles B. Softky J. Randle
M. Allen
Revenue Allocation
Of the total O&M revenue, the majority (98.86%) is from assessments paid by the JPA member agencies. The allocation between the agencies is based on the flow from the preceding calendar year.

The flow allocations fluctuate from year to year.

The remaining revenue comes from Waste Processing Services that are currently classified in the NonDomestic Waste Source Control Program Fees category of our AR System (0.4%), and interest earnings (0.6%).
226
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BOARD MEMBERS: N. Marsh B. Dye S. Boyd
P. Nagengast D. Ruddock K. Slater-Carter
ALTERNATE MEMBERS: W. Bowles B. Softky J. Randle
M. Allen
Staff Recommendation
Staff recommends that the Board of Directors review the budget with their respective staff and contemporaries and return comments to the SAM General Manager on or before April 30, 2026, for evaluation and approve a final budget before May 31, 2026.

Supporting Documents
Attachment A: SAM General Budget for FY 2026/27
Assessments
$11,423,588

98.86%
NDWSCP Fees
(Waste Processing Services)
$53,037

0.40%
Interest Earnings
$78,500

0.60%
227

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BUSINESS OF THE COUNCIL OF THE CITY OF HALF MOON BAY

AGENDA REPORT
For meeting of: May 19, 2026
TO: Honorable Mayor and City Council
VIA: Matthew Chidester, City Manager
FROM: Dale Leda, Interim City Engineer
TITLE: HALF MOON BAY SEWER COLLECTION SERVICES BUDGET AND SYSTEM

MAINTENANCE AGREEMENT WITH SEWER AUTHORITY MID-COASTSIDE ______________________________________________________________________________ RECOMMENDATION:

Adopt a resolution:

1. Approving the FY 2026-27 Sewer Authority Mid-Coastside Contract Collection Services Budget of $912,935 and the total participating agency revenue requirement of $960,622 included as Exhibit A to this resolution, of which the City’s share is $331,415.

2. Authorizing the City Manager to execute Amendment No. 9 to the sewer collection system maintenance professional services agreement with SAM, establishing the FY 2026-27 annual cost for the City’s share at $331,415 and extending the Agreement for one additional year, through June 30, 2027.

FISCAL IMPACT:

The FY 2026-27 cost for SAM collection system maintenance services is $331,415, which represents an increase of $97,750, or approximately 42%, from the FY 2025-26 adopted amount of $233,665. The cost has been included in the proposed FY 2026-27 Sewer Operating Budget. Collection system maintenance services are funded by sewer user fees and were anticipated as part of the City’s sewer rate structure.

SAM’s total FY 2026-27 proposed Contract Collection Services Budget is $912,935, with total required agency revenue of $960,622 after accounting for a $47,687 adjustment related to the difference between collections assessment revenue and collections expenses identified in SAM’s Fiscal Year End June 30, 2025, audited financial statements. Half Moon Bay’s share of the FY 2026-27 agency assessment is $331,415, or approximately 34.5% of the total, with the remaining shares allocated to Granada Community Services District and Montara Water and Sanitary District.
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STRATEGIC ELEMENT:

This action supports the Infrastructure and Environment, Healthy Community/Public Safety, and Fiscal Sustainability elements of the Strategic Plan.

BACKGROUND:

The City owns and operates approximately 35 miles of sewer main lines, including three pump stations and three force mains, collectively known as the sewer collection system. These facilities require routine cleaning, inspection, maintenance, emergency response, and regulatory support to ensure proper operation and compliance with applicable wastewater collection system requirements.

Since 2018, the City has used a hybrid model for sewer collection system maintenance. Under this model, SAM provides contracted field maintenance and response services, while City staff performs fats, oils, and grease inspections and closed-circuit television inspections. SAM’s services include routine sewer main cleaning, designated hot spot cleaning, lift station services, sanitary sewer overflow response, 24/7 emergency response, and related planning, management, and reporting. SAM has provided collection system maintenance services to its member agencies since 1988, and the scope of services has evolved over time to meet changing regulatory requirements and the operational needs of the member agencies.

Last year, the City Council approved the FY 2025-26 SAM Collections Budget and Amendment No. 8, establishing the annual cost at $233,665 and extending the agreement through June 30, 2026. For FY 2026-27, Staff recommends approval of Amendment No. 9 to continue these services for one additional year.

DISCUSSION:

As a Joint Powers Authority, SAM is authorized to provide contract services to its member agencies. Each year, SAM prepares a Contract Collection Services Budget in coordination with member agency staff and presents the budget to the SAM Board of Directors before submitting it to the participating agencies for approval.

For FY 2026-27, SAM has proposed a total Contract Collection Services Budget of $912,935. The budget is allocated among the three participating agencies based on the percentage of work required for each agency. Half Moon Bay’s proposed share is $331,415, Granada Community Services District’s share is $273,777, and Montara Water and Sanitary District’s share is $355,430. Half Moon Bay’s share represents approximately 34.5% of the total agency allocation. The distribution of collection costs are outlined in the 1988 Collections Agreement and are based on several values, including the linear feet of pipeline requiring cleaning each year, the number of hotspots requiring supplemental cleaning, and the number of lift stations and manholes requiring basic inspection and cleaning services.

The scope of services remains generally consistent with the existing agreement. SAM will continue to provide sewer main cleaning, hot spot cleaning, lift station maintenance, emergency response, and related collection system support services. These services are 229

Page 3 of 3 ends

essential to maintaining the reliability of the City’s sewer collection system and reducing the risk of sanitary sewer overflows.

The FY 2026-27 increase is primarily driven by personnel costs, which represent the majority of the proposed budget. SAM’s staff report notes that collection system maintenance is a staffintensive activity, with wages and benefits accounting for approximately 91% of the total budget. Other significant costs include insurance premiums and supplies, estimated at $38,500 and $31,500, respectively. SAM identified the significant budget change as an increase in personnel expenses related to an approved 4% cost-of-living adjustment and applicable 3% step increases.

SAM’s FY 2026-27 budget also includes a $47,687 adjustment to account for the difference between collections assessments received from member agencies and collections expenditures identified in SAM’s FYE June 30, 2025 audited financial statements. This adjustment is incorporated into the total revenue required from the member agencies for FY 2026-27.

CONCLUSION:

Staff recommends approval of Amendment No. 9 to update the City’s annual contract amount to $331,415 and extend the agreement for one additional year, through June 30, 2027.

Continuing the agreement will allow SAM to provide uninterrupted collection system maintenance and emergency response services for the City.

ATTACHMENT:

1. Resolution

2. SAM FY 2026-27 Collections Staff Report
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1 of 2
Resolution No. C-2026-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HALF MOON BAY APPROVING THE FISCAL YEAR 2026-27 SEWER AUTHORITY MID-COASTSIDE (SAM) COLLECTIONS BUDGET AND AUTHORIZING THE CITY MANAGER TO EXECUTE AMENDMENT NO. 9 TO THE PROFESSIONAL

SERVICES AGREEMENT WITH THE SEWER AUTHORITY MID-COASTSIDE FOR SEWER

COLLECTION SYSTEM CLEANING, MAINTENANCE AND RELATED SERVICES WHEREAS, City of Half Moon Bay representatives have reviewed and provided input on the proposed Collections (Contract Services) Budget of the Sewer Authority Mid-Coastside (SAM) for Fiscal Year 2026-27; and
WHEREAS, the proposed SAM Collections Budget totals $912,935 for FY 2026-27, an increase from the FY 2025-26 adopted budget of $763,556; and WHEREAS, the total FY 2026-27 revenue requirement for the participating Member Agencies is $960,622, which includes a $47,687 adjustment related to the difference between collections assessments received from Member Agencies and collections expenditures identified in SAM’s FYE June 30, 2025 audited financial statements; and WHEREAS, the City’s share of the FY 2026-27 SAM Collections Budget totals $331,415, representing approximately 34.5 percent of the total; and WHEREAS, the City entered into a professional services agreement with the Sewer Authority Mid-Coastside on July 23, 2018, with annual amendments; and WHEREAS, the City has worked with SAM and the Member Agencies to develop a costsharing arrangement for FY 2026-27; and WHEREAS, the cost-sharing agreement calls for continuance of the same level of cleaning, no less than 50 percent of all lines plus “Hot Spots”; and WHEREAS, the agreement continues to allow the City to manage its Fats, Oils, and Grease (FOG) program.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Half Moon Bay hereby:

1. Approves the Collections Budget of SAM for FY 2026-27 of $912,935 and the total participating agency revenue requirement of $960,622 attached as Exhibit A to this resolution, of which the City’s share is $331,415; and

2. Authorizes the City Manager to execute Amendment No. 9 to the Professional Services Agreement with the Sewer Authority Mid-Coastside, extending the expiration date to June 30, 2027.
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2 of 2
***************************************************************** I, the undersigned, hereby certify that the foregoing resolution was duly passed and adopted on the 19th day of May 2026, by the City Council of Half Moon Bay by the following vote:

AYES, Councilmembers:

NOES, Councilmembers:

ABSENT, Councilmembers:

ABSTAIN, Councilmembers:

ATTEST: APPROVED:
___________________________ _____________________________ Maggie Rodriguez, Interim City Clerk Debbie Ruddock, Mayor 232

CONTRACT COLLECTION SERVICES BUDGET
Consolidated (Half Moon Bay, GCSD, MWSD)
FY 2024/25
ACTUAL
FY 2025/26

ADOPTED
FY 2025/26

PROJECTED
FY 26/27

PROPOSED

EXPENDITURES
Personnel
1 Wages 428,087                            411,473              465,000              491,000                79,527 19% 2 Premium Pay                56,738                62,809                56,631                62,800    (9) (0%) 3 Health Benefits              131,782              147,525              145,948              172,900                25,375 17% 4 Retirement Cont.                33,869                35,250                46,674                49,550                14,300 41% 5 Retiree Med/OPEB 658 7,300 7,650   9,000 1,700 23%
6 Misc. Benefits                26,968                30,921                31,889                38,900 7,979 26% 7 Subtotal 678,102                            695,278              753,790              824,150              128,872 19% Non‐Personnel
8 Legal Services ‐ ‐ ‐ ‐ ‐   ‐
9 Engineering Services ‐ ‐ ‐ ‐ ‐   ‐
10 Professional Services 41 ‐ ‐ ‐ ‐   ‐
11 Prof. Memberships ‐ ‐ ‐ ‐ ‐   ‐
12 Insurance Premiums                33,403                26,038                36,217                38,500                12,462 48% 13 Misc. Expenses 4,615 5,926 5,416 6,915 989 17%
14 Utilities 5,804 7,151 6,950 7,620 469 7%
15 Travel & Training 2,324 2,815 2,625 4,250 1,435 51%
16 Equipment Rental ‐ ‐ ‐ ‐ ‐   ‐
17 Bldg & Maint Services ‐ ‐ ‐ ‐ ‐   ‐
18 Chemicals ‐ ‐ ‐ ‐ ‐   ‐
19 Permits & Licenses ‐ ‐ ‐ ‐ ‐   ‐
20 Supplies                16,856                26,348                29,154                31,500 5,152 20% 21 Equipment ‐ ‐ ‐ ‐ ‐   ‐
22 Infrastructure ‐ ‐ ‐ ‐ ‐   ‐
23 Claims/Penalties ‐ ‐ ‐ ‐ ‐   ‐
24 Repairs & Maintenance ‐ ‐ ‐ ‐ ‐   ‐
25 Subtotal 63,042                                68,278                80,362                88,785                20,507 30% 26 TOTAL             741,144             763,556             834,152             912,935             149,379 20% FY 2024/25
ACTUAL
FY 2025/26

ADOPTED
FY 2025/26

PROJECTED
FY 26/27

PROPOSED

REVENUE
By Type:
27 JPA Assessments              624,145              763,556              687,251              912,935              149,379 20% 28 NDWSCP Fees ‐ ‐ ‐ ‐ ‐   ‐
31 Interest Earnings ‐ ‐ ‐ ‐ ‐   ‐
32 Misc. Revenue ‐ ‐ ‐ ‐ ‐   ‐
33 (From)/To Reserves (*) ‐               (76,305) ‐                47,687 34 REVENUE TOTAL             624,145             687,251             687,251             960,622             149,379 22% By Agency:
35 Half Moon Bay              212,209              233,665              233,665              331,415                97,750 42% 36 Granada CSD              174,761              192,431              192,431              273,777                81,346 42% 37 Montara WSD              237,175              261,155              261,155              355,430                94,275 36% 38 TOTAL             624,145             687,251             687,251             960,622             273,371 40% PASS THROUGH
17A Pass Through Expenses              297,736
29 Pass Through Revenue              297,736
Balance ‐
(*) Figure represents difference between collections assessments received from Member Agencies  & Collections expenditures as noted in the FY 24‐25 audited financial statements and added to the budgeted expense.

VARIANCE
FY26/27 versus FY25/26

VARIANCE
FY26/27 versus FY25/26
Under/(Over)
DRAFT
3/3/2026
233

CONTRACT COLLECTION SERVICES BUDGET
Consolidated (Half Moon Bay, GCSD, MWSD)
FY 2024/25
ACTUAL
FY 2025/26

ADOPTED
FY 2025/26

PROJECTED
FY 26/27

PROPOSED

ADOPTED
FY 2025/26

PROJECTED
FY 26/27

PROPOSED

VARIANCE
FY26/27 versus FY25/26

VARIANCE
FY26/27 versus FY25/26
Under/(Over)
DRAFT
3/3/2026
234
March 9, 2026
Agenda Item No: 4A

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BOARD MEMBERS: N. Marsh B. Dye S. Boyd
P. Nagengast D. Ruddock K. Slater-Carter
ALTERNATE MEMBERS: B. Softky J. Randle W. Bowles
M. Allen

SEWER AUTHORITY MID-COASTSIDE
Staff Report
TO: Honorable Board of Directors
FROM: Kishen Prathivadi, General Manager
SUBJECT: Discuss Proposed Contract Collection Services Budget for FY 2026/27 and Authorize the General Manager to Submit it to the Member Agencies for Approval
Executive Summary
The purpose of the report is to discuss the Contract Collection Services Budget for FY 2026/27 and authorize the General Manager to submit it to the Member Agencies for approval.

Fiscal Impact
This contract is separate from the SAM Operating Budget, since it is a contract for SAM to provide maintenance services for the three Member Agencies’ wastewater systems.

The total cost to provide the Member Agency requested services for Fiscal Year 2026/27 is $912,935. This amount is payable to SAM as contract service fees from the served Member Agencies, allocated by the percentage of work required for each agency. This is an overall increase in fees of $149,379 from FY 2025/2026. The following table shows the history of fees for each agency for the past two years, the current year, and the upcoming year.

Please note, FY 2026/2027 budgeted member agency Collections Assessment has been increased by $47,687. This amount represents the difference between Collections assessment revenue and Collections expenses as noted in SAM’s FYE June 30, 2025 audited financial statements.
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BOARD MEMBERS: N. Marsh B. Dye S. Boyd
P. Nagengast D. Ruddock K. Slater-Carter
ALTERNATE MEMBERS: B. Softky J. Randle W. Bowles
M. Allen
Contract Fees for Each Contracting Agency
The pie-chart below details the allocation of the proposed budget for each Member Agency Strategic Plan Compliance
The recommendations in the proposed budget comply with SAM Strategic Plan Goal

5.6: “SAM is committed to providing quality collection system maintenance service for the Coastside. It will seek to offer the type of agile and responsive service and cost that wins that business. However, SAM resources should not be used to backstop collection service without appropriate compensation and pre-planning so it does not impact SAM operations and maintenance.”
Background and Discussion/Report
The Proposed Contract Collections Services Budget has been discussed by the member agency managers and by the Finance Committee. The presentation today is HMB
$331,415

34.5%
GCSD
$273,777

28.5%
MWSD
$355,430

37.0%
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March 9, 2026
Agenda Item No: 4A

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BOARD MEMBERS: N. Marsh B. Dye S. Boyd
P. Nagengast D. Ruddock K. Slater-Carter
ALTERNATE MEMBERS: B. Softky J. Randle W. Bowles
M. Allen
for the Board to review and follow-up with agency staff and respective Council/Board for comment. Approval of the proposed budget will take place later.

SAM has provided collection system maintenance services to its member agencies since 1988. The scope of services has changed over the years to meet regulatory requirements and individual needs of the Member Agencies. The cost allocation methodology has evolved over the years as well. Couple of years back, the Member Agency Managers, the SAM Manager, and consultants worked in concert to develop a method of allocation based on the needed services of each agency. We are confident that the cost allocation presented reflects more accurately that method and those needs.

Beginning July 1, 2020 the minimum service level provided by SAM entailed cleaning at least fifty percent (50%) of the collection system’s pipelines, cleaning of designated Hot Spots per an agreed upon schedule, providing lift station services as defined, providing emergency response throughout the year, and planning, managing and reporting as needed to ensure all needs of each Member Agency’s service area collection system are met.

The proposed budget includes obligations for wages and benefits as stipulated in employment and bargaining contracts. It also includes utilities, fuel, and other expenses needed to perform all the contracted services.

The pie chart on the next page details budget expenditures. 237
March 9, 2026
Agenda Item No: 4A

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BOARD MEMBERS: N. Marsh B. Dye S. Boyd
P. Nagengast D. Ruddock K. Slater-Carter
ALTERNATE MEMBERS: B. Softky J. Randle W. Bowles
M. Allen
The performance of collection system maintenance is a very staff-intensive activity and as a result most costs (91%) as shown above are Wages and Benefits for personnel to perform the work. Other significant costs are Insurance Premiums & the cost of supplies estimated to be $38,500 and $31,500 respectively. All other costs combined are around 2% of the total overall budget.

Significant Changes to the Budget:

1. Increase of Personnel expenses by $79,527 based on the approved MOU increase of 4% COLA and applicable step increase which is 3%.

Staff Recommendation
Staff recommends that the Board of Directors authorize the General Manager to submit the Contract Collection Services Budget for Fiscal Year 2026/27 to the participating agencies for approval.

Supporting Documents
Attachment A: Contract Collection Services Budget for FY 2026/27 Wages
$553,800
Benefits 61%
$270,350
30%
Utilities/Misc Expense
$18,785
2%
Supplies
$31,500
3%
Insurance Premiums
$38,500
4%
238
1 BUSINESS OF THE COUNCIL OF THE CITY OF HALF MOON BAY

AGENDA REPORT
For meeting of: May 19, 2026
TO: Honorable Mayor and City Council
VIA: Matthew Chidester, City Manager
FROM: Todd Seeley, Interim Public Works Director
TITLE: PURCHASE OF A NEW CAT 249D3 COMPACT TRACK LOADER ______________________________________________________________________________ RECOMMENDATION:

Adopt a resolution authorizing the City Manager to execute a purchase agreement in the amount of $80,513.63 with Peterson CAT for purchase of a CAT 249D3 Compact Track Loader.

FISCAL IMPACT:

Funding for the purchase of this equipment is available in the adopted FY 2025-26 Emergency Services Operating Budget, mostly due to multiple staff vacancies.

STRATEGIC ELEMENT:

This purchase supports all Elements of the Strategic Plan.

BACKGROUND:

An ongoing part of the Public Works maintenance program includes maintaining ten (10) City parks and two (2) undeveloped park sites, as well as emergency preparations and response during storms and other events, which can be demanding on equipment. The addition of the recently renovated John L. Carter Park to the City’s maintenance responsibilities has resulted in the identification of a need for specialized equipment necessary to access the lower portions of the park in the likely event of future flooding. The proposed piece of equipment would primarily serve in an emergency response capacity but can also be used in many different areas of maintenance, making it a valuable addition to the Public Works Department.

DISCUSSION:

In preparing the FY 2025-26 budget, Public Works staff evaluated all vehicle and equipment needs and ranked the addition of compact track loader as a high priority. However, due to fiscal constraints the Department did not ask for the funding necessary to acquire this piece of equipment. After reviewing the Emergency Services budget, staff identified enough available funding for the purchase of the compact track loader.
239
The opening of John L. Carter Park has clearly identified a need for equipment capable of accessing the lower level of the park. The ramp access was originally designed to allow for small vehicle access, but there were issues getting the grades to work with the original design and the ramp had to be changed to allow for ADA access. This design leaves Public Works with only one piece of equipment capable of accessing the stage and restroom areas, a Polaris XP1000 utility task vehicle. The Polaris has a very small dump bed which must be loaded manually, and was primarily acquired to address any potential issues on the beaches. Based on historical cycles, it is highly likely that City staff will need equipment to access John L. Carter Park in the next 10 years to clear debris from the park due to flooding from the nearby Pilarcitos Creek.

Maintenance staff looked at several different models of compact track loaders and determined that a CAT 249D3 was the best suited for maintenance needs. The unit is adequately sized for the Maintenance team and comes configured to maximize use. The new compact track loader is a fully modernized unit complete with a Tier 4 engine which is the most environmentally friendly option for new commercial engines. The compact track loader also has an enclosed cab which will allow the skid steer to supplement our existing backhoe in emergency situations. The decision to pursue a CAT compact track loader was based on evaluating available options and discussions with current users of the various products. The CAT 249D3 is noted for superior hydraulic flow, pressurized cabs which lead to operator comfort, and the highest resale values in the industry. Also, discussions with two local contractors with large equipment fleets identified that they use CAT track loaders and are happy with their purchases of CAT equipment.

Included in the purchase package of the new tractor is a 74” loader bucket which is essential for the maintenance of City infrastructure as well as the potential removal of debris in emergency scenarios. The compact track loader also comes with high-flow hydraulics which will allow for additional attachments to be acquired in the future. Some of these include sweeping brooms, cold planers, breaking hammers, and mulching attachments. Public Works will identify future attachment needs based on evaluations and operational necessities.

Per the City’s purchasing policy, staff solicited and received a proposal for a new CAT 249D3 Compact Track Loader from Peterson CAT. This quote was obtained through Sourcewell, cooperative purchasing agency that provides negotiated pricing to governmental agencies by negotiating significantly lower prices than a similar unit sold to non-governmental agencies. The City participates in this cooperative to ensure fairness in accordance with Section VII of the purchasing policy. Because of prudent spending practices, there is available funding in the Emergency Services Operating Budget to cover this equipment request.

ATTACHMENTS:

1. Resolution

2. Purchase Quote from Peterson CAT

3. Sourcewell Agreement
240
Resolution No. C-2026-___

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HALF MOON BAY

AUTHORIZING THE CITY MANAGER TO EXECUTE A PURCHASE AGREEMENT WITH PETERSON CAT OF SAN LEANDRO FOR THE PURCHASE OF A CAT 249D3 COMPACT TRACK LOADER WHEREAS, the Public Works Department has identified funding to purchase a new compact track loader; and
WHEREAS, the addition of John L. Carter Park to the City’s maintenance responsibilities has resulted in the identification of a need for specialized equipment necessary due to the design of the trail to access the bottom of the park in the likely event of future flooding; and WHEREAS, in addition to accessing the lower level of John L. Carter Park, a compact track loader can be used to support numerous City functions including sidewalk repairs, brush clearing, earth moving in tight spaces, and debris removal as part of an emergency response; and
WHEREAS, staff has evaluated several compact track loaders and determined that the CAT 249D3 is the best piece of equipment to address the City’s emergency response and maintenance needs; and
WHEREAS, the department has solicited a bid through Sourcewell which provides the lowest possible pricing to qualified governmental agencies in accordance with the City’s Purchasing Policy.

NOW, THEREFORE, BE IT RESOLVED THAT the City Council of the City of Half Moon Bay hereby authorizes the City Manager to execute a purchase agreement with Peterson CAT to purchase a CAT 249D3 Compact Track Loader in the amount of $80,513.63. ***************************************************************** I, the undersigned, hereby certify that the foregoing Resolution was duly passed and adopted on the 19th day of May 2026, by the City Council of Half Moon Bay by the following vote:

AYES, Councilmembers:

NOES, Councilmembers:

ABSENT, Councilmembers:

ABSTAIN, Councilmembers:

ATTEST: APPROVED:
241
___________________________ _____________________________ Maggie Rodriguez, Interim City Clerk Debbie Ruddock, Mayor 242

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Apr 01, 2026

CITY OF HALF MOON BAY
501 MAIN ST

HALF MOON BAY
California
94019
Attention: Todd Seeley
RE: Quote 247047-01
Sourcewell Contract 011723-CAT Quote
Dear Sir,
We would like to thank you for your interest in our company and our products. We are pleased to quote the following for your consideration.

One (1) New Caterpillar Model: 249D3 Compact Construction Equipment STOCK NUMBER: PM05191 SERIAL NUMBER: 0WKD02363

MACHINE SPECIFICATIONS
249D3 COMPACT TRACK LOADER 568-4729
LANE 2 ORDER 0P-9002
CAB PACKAGE, ULTRA 658-8754
TRACK,RUBBER,400MM(15.7 IN)BAR 420-9886
RIDE CONTROL 568-4499
BATTERY,HD,DISCONNECT, 850 CCA 579-2412
REAR LIGHTS 356-6082
DOOR, CAB, POLYCARBONATE 545-6278
SEAT BELT, 3'' 542-6995
HYDRAULIC OIL, STANDARD 601-4753
CERTIFICATION ARR, P65 563-1163
INSTRUCTIONS, ANSI, USA 512-4447
INSTRUCTIONS, ENGLISH 580-1439
FILM, RIDE CONTROL, ANSI 422-3445
PACKING, CONTAINER 0P-0223
PRODUCT LINK, CELLULAR PL243 641-1758
AIR CONDITIONING, R134A REF 661-7350
249D3 M205 CPM 651-3782
BUCKET-MP, 74'', BOCE 426-6536
243

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SELL PRICE $72,608.88
EXT WARRANTY $1,003.58
NET BALANCE DUE $73,612.46
SALES TAX (9.375%) $6,901.17
AFTER TAX BALANCE $80,513.63

WARRANTY
Standard Warranty: 24 Months, 2000 Hours Standard Warranty Extended Warranty: 249-60 MO/2500 HR POWERTRAIN + HYDRAULICS + TECH F.O.B/TERMS:

Halfmoon Bay
Accepted by___________________________________ on ____________________ ______________________________
Signature
This Quote is valid for 30 days, after which time we reserve the right to re-quote. If there are any questions, please do not hesitate to contact me.

Sincerely,
Mathew Durflinger
Machine Sales Representative
Peterson CAT
+1 (510) 2541203
[email protected]
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Solicitation Number: RFP # 011723

CONTRACT
This Contract is between Sourcewell, 202 12th Street Northeast, P.O. Box 219, Staples, MN 56479 (Sourcewell) and Caterpillar Inc., 100 NE Adams Street, Peoria, IL 61629 (Supplier).

Sourcewell is a State of Minnesota local government unit and service cooperative created under the laws of the State of Minnesota (Minnesota Statutes Section 123A.21) that offers cooperative procurement solutions to government entities. Participation is open to eligible federal, state/province, and municipal governmental entities, higher education, K-12 education, nonprofit, tribal government, and other public entities located in the United States and Canada.

Sourcewell issued a public solicitation for Heavy Construction Equipment with Related Attachments and Technology from which Supplier was awarded a contract.

Supplier desires to contract with Sourcewell to provide equipment, products, or services to Sourcewell and the entities that access Sourcewell’s cooperative purchasing contracts (Participating Entities).

1. TERM OF CONTRACT
A. EFFECTIVE DATE. This Contract is effective upon the date of the final signature below.

B. EXPIRATION DATE AND EXTENSION. This Contract expires April 14, 2027, unless it is cancelled sooner pursuant to Article 22. This Contract may be extended one additional year upon the request of Sourcewell and written agreement by Supplier.

C. SURVIVAL OF TERMS. Notwithstanding any expiration or termination of this Contract, all payment obligations incurred prior to expiration or termination will survive, as will the following: Articles 11 through 14 survive the expiration or cancellation of this Contract. All other rights will cease upon expiration or termination of this Contract.

2. EQUIPMENT, PRODUCTS, OR SERVICES
A. EQUIPMENT, PRODUCTS, OR SERVICES. Supplier will provide the Equipment, Products, or Services as stated in its Proposal submitted under the Solicitation Number listed above.

Supplier’s Equipment, Products, or Services Proposal (Proposal) is attached and incorporated into this Contract.

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Pursuant to Section 10(b), Supplier will subcontract certain obligations under this Contract to its dealers. Only those dealers that sign a Participation Agreement with Supplier obligating them to comply with the terms of this Contract will be eligible to provide Equipment, Products, or Services as a subcontractor under this Contract. In the event there is no dealer who has entered into a Participation Agreement available to provide Equipment, Products, or Services to a Participating Entity, Supplier will be under no obligation to provide Equipment, Products, or Services to such Participating Entity under this Contract. Supplier will provide a copy of this Contract to its dealers that would normally service Participating Entities and invite such dealers to enter into a Participation Agreement as a subcontractor of Supplier under the terms of this Contract.

All Equipment and Products provided under this Contract must be new and the current model.

Supplier may offer close-out or refurbished Equipment or Products if they are clearly indicated in Supplier’s product and pricing list. Unless agreed to by the Participating Entities in advance, Equipment or Products must be delivered as operational to the Participating Entity’s site.

This Contract offers an indefinite quantity of sales, and while substantial volume is anticipated, sales and sales volume are not guaranteed.

B. WARRANTY. Supplier warrants that all Equipment, Products, and Services furnished are free from liens and encumbrances, and are free from defects in design, materials, and workmanship.

In addition, Supplier warrants the Equipment, Products, and Services are suitable for and will perform in accordance with the ordinary use for which they are intended. Supplier’s dealers and distributors must agree to assist the Participating Entity in reaching a resolution in any dispute over warranty terms with the manufacturer. Any manufacturer’s warranty that extends beyond the expiration of the Supplier’s warranty will be passed on to the Participating Entity.

C. DEALERS, DISTRIBUTORS, AND/OR RESELLERS. Upon Contract execution and throughout the Contract term, Supplier must provide to Sourcewell a current means to validate or authenticate Supplier’s authorized dealers, distributors, or resellers relative to the Equipment, Products, and Services offered under this Contract, which will be incorporated into this Contract by reference. It is the Supplier’s responsibility to ensure Sourcewell receives the most current information.

3. PRICING
All Equipment, Products, or Services under this Contract will be priced at or below the percentage list discount stated in the supplier’s proposal.

Upon request made to a participating CAT dealer, from a Participating Entity identifying themselves as a Sourcewell member by providing their Sourcewell member number and contract number; formal quotes will list all costs, including all delivery expenses, such as freight and permits (when required).

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Alternatively, Participating Entities may choose to make their own transportation arrangements. In such case, there would be no delivery charges from the local participating Cat dealer.

Regardless of the payment method chosen by the Participating Entity, the total cost associated with any purchase option of the Equipment, Products, or Services must always be disclosed in the pricing quote to the applicable Participating Entity at the time of purchase.

A. SHIPPING AND SHIPPING COSTS. All delivered Equipment and Products must be properly packaged. Damaged Equipment and Products may be rejected. If the damage is not readily apparent at the time of delivery, Supplier must permit the Equipment and Products to be returned within a reasonable time at no cost to Sourcewell or its Participating Entities.

Participating Entities reserve the right to inspect the Equipment and Products at a reasonable time after delivery where circumstances or conditions prevent effective inspection of the Equipment and Products at the time of delivery. In the event of the delivery of nonconforming Equipment and Products, the Participating Entity will notify the Supplier as soon as possible and the Supplier will replace nonconforming Equipment and Products with conforming Equipment and Products that are acceptable to the Participating Entity.

Supplier must arrange for and pay for the return shipment on Equipment and Products that arrive in a defective or inoperable condition.

Sourcewell may declare the Supplier in breach of this Contract if the Supplier intentionally delivers substandard or inferior Equipment or Products.

B. SALES TAX. Each Participating Entity is responsible for supplying the Supplier with valid taxexemption certification(s). When ordering, a Participating Entity must indicate if it is a taxexempt entity.

C. HOT LIST PRICING. At any time during this Contract, Supplier may offer a specific selection of Equipment, Products, or Services at discounts greater than those listed in the Contract.

When Supplier determines it will offer Hot List Pricing, it must be submitted electronically to Sourcewell in a line-item format. Equipment, Products, or Services may be added or removed from the Hot List at any time through a Sourcewell Price and Product Change Form as defined in Article 4 below.

Hot List program and pricing may also be used to discount and liquidate close-out and discontinued Equipment and Products as long as those close-out and discontinued items are clearly identified as such. Current ordering process and administrative fees apply. Hot List Pricing must be published and made available to all Participating Entities.

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4. PRODUCT AND PRICING CHANGE REQUESTS
Supplier may request Equipment, Product, or Service changes, additions, or deletions at any time. All requests must be made in writing by submitting a signed Sourcewell Price and Product Change Request Form to the assigned Sourcewell Supplier Development Administrator. This approved form is available from the assigned Sourcewell Supplier Development Administrator.

At a minimum, the request must:
• Identify the applicable Sourcewell contract number;
• Clearly specify the requested change;
• Provide sufficient detail to justify the requested change; • Individually list all Equipment, Products, or Services affected by the requested change, along with the requested change (e.g., addition, deletion, price change); and • Include a complete restatement of pricing documentation in Microsoft Excel with the effective date of the modified pricing, or product addition or deletion. The new pricing restatement must include all Equipment, Products, and Services offered, even for those items where pricing remains unchanged.

A fully executed Sourcewell Price and Product Request Form will become an amendment to this Contract and will be incorporated by reference.

5. PARTICIPATION, CONTRACT ACCESS, AND PARTICIPATING ENTITY REQUIREMENTS A. PARTICIPATION. Sourcewell’s cooperative contracts are available and open to public and nonprofit entities across the United States and Canada; such as federal, state/province, municipal, K-12 and higher education, tribal government, and other public entities. Supplier may not enter into a contract with a U.S. Federal Government entity prior to obtaining necessary internal approvals and shall not be obligated to provide Equipment, Products or Services to any U.S. Federal Government entity under this Contract unless separately agreed in writing. Caterpillar may work with such parties and may agree to provide equipment or services under the Contract on a case-by-case basis.

The benefits of this Contract should be available to all Participating Entities that can legally access the Equipment, Products, or Services under this Contract. A Participating Entity’s authority to access this Contract is determined through its cooperative purchasing, interlocal, or joint powers laws. Any entity accessing benefits of this Contract will be considered a Service Member of Sourcewell during such time of access. Supplier understands that a Participating Entity’s use of this Contract is at the Participating Entity’s sole convenience and Participating Entities reserve the right to obtain like Equipment, Products, or Services from any other source.

Supplier is responsible for familiarizing its sales and service forces with Sourcewell contract use eligibility requirements and documentation and will encourage potential participating entities DocuSign Envelope ID: E74F7137-AC67-4B07-965B-33CD3E77A89B DocuSign Envelope ID: 9AA872AA-9802-4A6D-8065-BECD9EB74C88 248 312
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to join Sourcewell. Sourcewell reserves the right to add and remove Participating Entities to its roster during the term of this Contract.

B. PUBLIC FACILITIES. Supplier’s employees may be required to perform work at governmentowned facilities, including schools. Supplier’s employees and agents must conduct themselves in a professional manner while on the premises, and in accordance with Participating Entity policies and procedures, and all applicable laws.

6. PARTICIPATING ENTITY USE AND PURCHASING
A. ORDERS AND PAYMENT. To access the contracted Equipment, Products, or Services under this Contract, a Participating Entity must clearly indicate to Supplier that it intends to access this Contract; however, order flow and procedure will be developed jointly between Sourcewell and Supplier. Typically, a Participating Entity will issue an order directly to Participating Dealers with payments made to the Participating Dealers. If a Participating Entity issues a purchase order, it may use its own forms, but the purchase order should clearly note the applicable Sourcewell contract number. All Participating Entity orders under this Contract must be issued prior to expiration or cancellation of this Contract; however, Supplier performance, Participating Entity payment obligations, and any applicable warranty periods or other Supplier or Participating Entity obligations may extend beyond the term of this Contract.

Supplier’s acceptable forms of payment are included in its attached Proposal. Participating Entities will be solely responsible for payment and Sourcewell will have no liability for any unpaid invoice of any Participating Entity.

B. ADDITIONAL TERMS AND CONDITIONS/PARTICIPATING ADDENDUM. Additional terms and conditions to a purchase order, or other required transaction documentation, may be negotiated between a Participating Entity and Supplier’s Participating Dealer, such as job or industry-specific requirements, legal requirements (e.g., affirmative action or immigration status requirements), or specific local policy requirements. Some Participating Entities may require the use of a Participating Addendum, the terms of which will be negotiated directly between the Participating Entity and Supplier’s Participating Dealer or its authorized dealers, distributors, or resellers, as applicable. Any negotiated additional terms and conditions must never be less favorable to the Participating Entity than what is contained in this Contract.

C. SPECIALIZED SERVICE REQUIREMENTS. In the event that the Participating Entity requires service or specialized performance requirements not addressed in this Contract (such as ecommerce specifications, specialized delivery requirements, or other specifications and requirements), the Participating Entity and the Supplier may enter into a separate, standalone agreement, apart from this Contract. Sourcewell, including its agents and employees, will not be made a party to a claim for breach of such agreement.

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D. TERMINATION OF ORDERS. Participating Entities may terminate an order, in whole or in part, immediately upon notice to Supplier in the event of any of the following events:

1. The Participating Entity fails to receive funding or appropriation from its governing body at levels sufficient to pay for the equipment, products, or services to be purchased; or

2. Federal, state, or provincial laws or regulations prohibit the purchase or change the Participating Entity’s requirements.

E. GOVERNING LAW AND VENUE. The governing law and venue for any action related to a Participating Entity’s order will be determined by the Participating Entity making the purchase.

7. CUSTOMER SERVICE
A. PRIMARY ACCOUNT REPRESENTATIVE. Supplier will assign an Account Representative to Sourcewell for this Contract and must provide prompt notice to Sourcewell if that person is changed. The Account Representative will be responsible for:
• Maintenance and management of this Contract;
• Timely response to all Sourcewell and Participating Entity inquiries; and • Business reviews to Sourcewell and Participating Entities, if applicable.

B. BUSINESS REVIEWS. Supplier must perform a minimum of one business review with Sourcewell per contract year. The business review will cover sales to Participating Entities, pricing and contract terms, administrative fees, sales data reports, performance issues, supply issues, customer issues, and any other necessary information.

8. REPORT ON CONTRACT SALES ACTIVITY AND ADMINISTRATIVE FEE PAYMENT A. CONTRACT SALES ACTIVITY REPORT. Each calendar quarter, Supplier must provide a contract sales activity report (Report) to the Sourcewell Supplier Development Administrator assigned to this Contract. Reports are due no later than 45 days after the end of each calendar quarter. A Report must be provided regardless of the number or amount of sales during that quarter (i.e., if there are no sales, Supplier must submit a report indicating no sales were made).

The Report must contain the following fields:
• Participating Entity Name (e.g., City of Staples Highway Department); • Participating Entity Physical Street Address;
• Participating Entity City;
• Participating Entity State/Province;
• Participating Entity Zip/Postal Code;
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• Participating Entity Contact Name;
• Participating Entity Contact Email Address;
• Participating Entity Contact Telephone Number;
• Sourcewell Assigned Entity/Participating Entity Number; • Item Purchased Description;
• Item Purchased Price;
• Sourcewell Administrative Fee Applied; and
• Date Purchase was invoiced/sale was recognized as revenue by Supplier.

B. ADMINISTRATIVE FEE. In consideration for the support and services provided by Sourcewell, the Supplier will pay an administrative fee to Sourcewell on all Equipment, Products, and Services provided to Participating Entities. The Administrative Fee must be included in, and not added to, the pricing. Supplier may not charge Participating Entities more than the contracted price to offset the Administrative Fee.

The Supplier will submit payment to Sourcewell for the percentage of administrative fee stated in the Proposal multiplied by the total sales of all Equipment, Products, and Services purchased by Participating Entities under this Contract during each calendar quarter. Payments should note the Supplier’s name and Sourcewell-assigned contract number in the memo; and must be mailed to the address above “Attn: Accounts Receivable” or remitted electronically to Sourcewell’s banking institution per Sourcewell’s Finance department instructions. Payments must be received no later than 45 calendar days after the end of each calendar quarter.

Supplier agrees to cooperate with Sourcewell in auditing transactions under this Contract to ensure that the administrative fee is paid on all items purchased under this Contract.

In the event the Supplier is delinquent in any undisputed administrative fees, Sourcewell reserves the right to cancel this Contract and reject any proposal submitted by the Supplier in any subsequent solicitation. In the event this Contract is cancelled by either party prior to the Contract’s expiration date, the administrative fee payment will be due no more than 30 days from the cancellation date.

9. AUTHORIZED REPRESENTATIVE
Sourcewell's Authorized Representative is its Chief Procurement Officer.

Supplier’s Authorized Representative is the person named in the Supplier’s Proposal. If Supplier’s Authorized Representative changes at any time during this Contract, Supplier must promptly notify Sourcewell in writing.

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10. AUDIT, ASSIGNMENT, AMENDMENTS, WAIVER, AND CONTRACT COMPLETE A. AUDIT. Pursuant to Minnesota Statutes Section 16C.05, subdivision 5, the books, records, documents, and accounting procedures and practices relevant to this Contract are subject to examination by Sourcewell or the Minnesota State Auditor for a minimum of six years from the end of this Contract. This clause extends to Participating Entities as it relates to business conducted by that Participating Entity under this Contract.

B. ASSIGNMENT. Neither party may assign or otherwise transfer its rights or obligations under this Contract without the prior written consent of the other party and a fully executed assignment agreement. Such consent will not be unreasonably withheld. Any prohibited assignment will be invalid. Provided, however, that Supplier is permitted to subcontract certain of its rights and obligations to Supplier Participating Dealers for performance without Sourcewell’s prior written consent.

C. AMENDMENTS. Any amendment to this Contract must be in writing and will not be effective until it has been duly executed by the parties.

D. WAIVER. Failure by either party to take action or assert any right under this Contract will not be deemed a waiver of such right in the event of the continuation or repetition of the circumstances giving rise to such right. Any such waiver must be in writing and signed by the parties.

E. CONTRACT COMPLETE. This Contract represents the complete agreement between the parties. No other understanding regarding this Contract, whether written or oral, may be used to bind either party. For any conflict between the attached Proposal and the terms set out in Articles 1-22 of this Contract, the terms of Articles 1-22 will govern.

F. RELATIONSHIP OF THE PARTIES. The relationship of the parties is one of independent contractors, each free to exercise judgment and discretion with regard to the conduct of their respective businesses. This Contract does not create a partnership, joint venture, or any other relationship such as master-servant, or principal-agent.

11. INDEMNITY AND HOLD HARMLESS
Intentionally omitted.

12. GOVERNMENT DATA PRACTICES
Supplier and Sourcewell must comply with the Minnesota Government Data Practices Act, Minnesota Statutes Chapter 13, as it applies to all data provided by or provided to Sourcewell DocuSign Envelope ID: E74F7137-AC67-4B07-965B-33CD3E77A89B DocuSign Envelope ID: 9AA872AA-9802-4A6D-8065-BECD9EB74C88 252 316
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under this Contract and as it applies to all data created, collected, received, maintained, or disseminated by the Supplier under this Contract.

13. INTELLECTUAL PROPERTY, PUBLICITY, MARKETING, AND ENDORSEMENT A. Intentionally Deleted.

B. PUBLICITY. Any publicity regarding the subject matter of this Contract must not be released without prior written approval from the Authorized Representatives. Publicity includes notices, informational pamphlets, press releases, research, reports, signs, and similar public notices prepared by or for the Supplier individually or jointly with others, or any subcontractors, with respect to the program, publications, or services provided resulting from this Contract.

C. MARKETING. Any direct advertising, marketing, or offers with Participating Entities must be approved by Sourcewell. Send all approval requests to the Sourcewell Supplier Development Administrator assigned to this Contract.

D. ENDORSEMENT. The Supplier must not claim that Sourcewell endorses its Equipment, Products, or Services.

14. GOVERNING LAW, JURISDICTION, AND VENUE
The substantive and procedural laws of the State of Minnesota will govern this Contract. Venue for all legal proceedings arising out of this Contract, or its breach, must be in the appropriate state court in Todd County, Minnesota or federal court in Fergus Falls, Minnesota.

15. FORCE MAJEURE
Neither party to this Contract will be held responsible for delay or default caused by acts of God or other conditions that are beyond that party’s reasonable control. A party defaulting under this provision must provide the other party prompt written notice of the default.

16. SEVERABILITY
If any provision of this Contract is found by a court of competent jurisdiction to be illegal, unenforceable, or void then both parties will be relieved from all obligations arising from that provision. If the remainder of this Contract is capable of being performed, it will not be affected by such determination or finding and must be fully performed.

17. PERFORMANCE, DEFAULT, AND REMEDIES
A. PERFORMANCE. During the term of this Contract, the parties will monitor performance and address unresolved contract issues as follows:

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1. Notification. The parties must promptly notify each other of any known dispute and work in good faith to resolve such dispute within a reasonable period of time. If necessary, Sourcewell and the Supplier will jointly develop a short briefing document that describes the issue(s), relevant impact, and positions of both parties.

2. Escalation. If parties are unable to resolve the issue in a timely manner, as specified above, either Sourcewell or Supplier may escalate the resolution of the issue to a higher level of management. The Supplier will have 30 calendar days to cure an outstanding issue.

3. Performance while Dispute is Pending. Notwithstanding the existence of a dispute, the Supplier must continue without delay to carry out all of its responsibilities under the Contract that are not affected by the dispute. If the Supplier fails to continue without delay to perform its responsibilities under the Contract, in the accomplishment of all undisputed work, the Supplier will bear any additional costs incurred by Sourcewell and/or its Participating Entities as a result of such failure to proceed.

B. DEFAULT AND REMEDIES. Either of the following constitutes cause to declare this Contract, or any Participating Entity order under this Contract, in default:

1. Nonperformance of contractual requirements, or

2. A material breach of any term or condition of this Contract.

The party claiming default must provide written notice of the default, with 30 calendar days to cure the default. Time allowed for cure will not diminish or eliminate any liability for liquidated or other damages. If the default remains after the opportunity for cure, the non-defaulting party may:
• Exercise any remedy provided by law or equity, or
• Terminate the Contract or any portion thereof, including any orders issued against the Contract.

18. INSURANCE
A. REQUIREMENTS. At its own expense, Supplier must maintain insurance policy(ies) in effect at all times during the performance of this Contract with insurance company(ies) licensed or authorized to do business in the State of Minnesota having an “AM BEST” rating of A- or better, with coverage and limits of insurance not less than the following:

1. Workers’ Compensation and Employer’s Liability.

Workers’ Compensation: As required by any applicable law or regulation.

Employer's Liability Insurance: must be provided in amounts not less than listed below:

Minimum limits:
$500,000 each accident for bodily injury by accident
$500,000 policy limit for bodily injury by disease
$500,000 each employee for bodily injury by disease
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2. Commercial General Liability Insurance. Supplier will maintain insurance covering its operations, with coverage on an occurrence basis, and must be subject to terms no less broad than the Insurance Services Office (“ISO”) Commercial General Liability Form CG0001 (2001 or newer edition), or equivalent. At a minimum, coverage must include liability arising from premises, operations, bodily injury and property damage, independent contractors, products-completed operations including construction defect, contractual liability, blanket contractual liability, and personal injury and advertising injury. All required limits, terms and conditions of coverage must be maintained during the term of this Contract.

Minimum Limits:
$1,000,000 each occurrence Bodily Injury and Property Damage $1,000,000 Personal and Advertising Injury
$2,000,000 aggregate for products liability-completed operations $2,000,000 general aggregate

3. Commercial Automobile Liability Insurance. During the term of this Contract, Supplier will maintain insurance covering all owned, hired, and non-owned automobiles in limits of liability not less than indicated below. The coverage must be subject to terms no less broad than ISO Business Auto Coverage Form CA 0001 (2010 edition or newer), or equivalent.

Minimum Limits:
$1,000,000 each accident, combined single limit

4. Umbrella Insurance. During the term of this Contract, Supplier will maintain umbrella coverage over Employer’s Liability, Commercial General Liability, and Commercial Automobile.

Minimum Limits:
$2,000,000
Failure of Supplier to maintain the required insurance will constitute a material breach entitling Sourcewell to immediately terminate this Contract for default.

B. CERTIFICATES OF INSURANCE. Prior to commencing under this Contract, Supplier must furnish to Sourcewell a certificate of insurance, as evidence of the insurance required under this Contract. Prior to expiration of the policy(ies), renewal certificates must be mailed to Sourcewell, 202 12th Street Northeast, P.O. Box 219, Staples, MN 56479 or sent to the Sourcewell Supplier Development Administrator assigned to this Contract. The certificates must be signed by a person authorized by the insurer(s) to bind coverage on their behalf.

Failure to request certificates of insurance by Sourcewell, or failure of Supplier to provide certificates of insurance, in no way limits or relieves Supplier of its duties and responsibilities in this Contract.

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C. ADDITIONAL INSURED ENDORSEMENT AND PRIMARY AND NON-CONTRIBUTORY INSURANCE CLAUSE. Supplier agrees to list Sourcewell and its Participating Entities, including their officers, agents, and employees, as an additional insured under the Supplier’s commercial general liability insurance policy with respect to liability arising out of activities, “operations,” or “work” performed by or on behalf of Supplier, and products and completed operations of Supplier. The policy provision(s) or endorsement(s) must further provide that coverage is primary and not excess over or contributory with any other valid, applicable, and collectible insurance or self-insurance in force for the additional insureds. A Participating Dealer may name a Participating Entity as an additional insured on a case-by-case basis.

WAIVER OF SUBROGATION. Supplier waives and must require (by endorsement or otherwise) all its insurers to waive subrogation rights against Sourcewell and other additional insureds for losses paid under the insurance policies required by this Contract or other insurance applicable to the Supplier or its subcontractors. The waiver must apply to all deductibles and/or selfinsured retentions applicable to the required or any other insurance maintained by the Supplier or its subcontractors.

D. UMBRELLA/EXCESS LIABILITY/SELF-INSURED RETENTION. The limits required by this Contract can be met by either providing a primary policy or in combination with umbrella/excess liability policy(ies), or self-insured retention.

19. COMPLIANCE
A. LAWS AND REGULATIONS. All Equipment, Products, or Services provided under this Contract must comply fully with applicable federal laws and regulations, and with the laws in the states and provinces in which the Equipment, Products, or Services are sold.

B. LICENSES. Supplier’s Participating Dealers must maintain a valid and current status on all required federal, state/provincial, and local licenses, bonds, and permits required for the operation of the business that the Participating Dealer conducts with Sourcewell and Participating Entities.

20. BANKRUPTCY, DEBARMENT, OR SUSPENSION CERTIFICATION
Supplier certifies and warrants that it is not in bankruptcy or that it has previously disclosed in writing certain information to Sourcewell related to bankruptcy actions. If at any time during this Contract Supplier declares bankruptcy, Supplier must immediately notify Sourcewell in writing.

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Supplier certifies and warrants that neither it nor its principals are presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from programs operated by the State of Minnesota; the United States federal government or the Canadian government, as applicable; or any Participating Entity. Supplier certifies and warrants that neither it nor its principals have been convicted of a criminal offense related to the subject matter of this Contract. Supplier further warrants that it will provide immediate written notice to Sourcewell if this certification changes at any time.

21. PROVISIONS FOR NON-UNITED STATES FEDERAL ENTITY PROCUREMENTS UNDER

UNITED STATES FEDERAL AWARDS OR OTHER AWARDS
Intentionally omitted.

22. CANCELLATION
Sourcewell or Supplier may cancel this Contract at any time, with or without cause, upon 60 days’ written notice to the other party. However, Sourcewell may cancel this Contract immediately upon discovery of a material defect in any certification made in Supplier’s Proposal. Cancellation of this Contract does not relieve either party of financial, product, or service obligations incurred or accrued prior to cancellation.

Sourcewell Caterpillar Inc.

By: __________________________ By: __________________________ Jeremy Schwartz Patrick Kearns
Title: Chief Procurement Officer Title: Vice President Sales & Marketing, Construction Industries
Date: ________________________ Date: ________________________ Approved:

By: __________________________
Chad Coauette
Title: Executive Director/CEO
Date: ________________________
DocuSign Envelope ID: E74F7137-AC67-4B07-965B-33CD3E77A89B 5/5/2023 | 9:41 AM CDT 5/24/2023 | 9:13 AM PDT
5/24/2023 | 12:16 PM CDT
DocuSign Envelope ID: 9AA872AA-9802-4A6D-8065-BECD9EB74C88 257 321
RFP 011723 - Heavy Construction Equipment with Related
Attachments and Technology
Vendor Details
Company Name: Caterpillar Inc
Address:
100 NE Adams St
Peoria, IL 61629
Contact: Sean Egel
Email: [email protected]
Phone: 309-675-1399
HST#:

Submission Details
Created On: Tuesday November 15, 2022 14:22:18
Submitted On: Tuesday January 17, 2023 16:10:22
Submitted By: Sean Egel
Email: [email protected]
Transaction #: aeaa61ae-0c73-4610-8208-b80e2e0b4448
Submitter's IP Address: 192.189.129.23
Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: E74F7137-AC67-4B07-965B-33CD3E77A89B DocuSign Envelope ID: 9AA872AA-9802-4A6D-8065-BECD9EB74C88 258 322
Specifications
Table 1: Proposer Identity & Authorized Representatives General Instructions (applies to all Tables) Sourcewell prefers a brief but thorough response to each question. Do not merely attach additional documents to your response without also providing a substantive response. Do not leave answers blank; respond “N/A” if the question does not apply to you (preferably with an explanation).

Line
Item Question Response *
1 Proposer Legal Name (one legal entity only):
(In the event of award, will execute the
resulting contract as "Supplier")
Caterpillar Inc.
*
2 Identify all subsidiary entities of the Proposer
whose equipment, products, or services are
included in the Proposal.

N/A
*
3 Identify all applicable assumed names or DBA
names of the Proposer or Proposer's
subsidiaries in Line 1 or Line 2 above.

N/A
*
4 Provide your CAGE code or Unique Entity
Identifier (SAM):
11083 *
5 Proposer Physical Address: 5212 N O'Connor Blvd Ste. 1100, Irving, TX 75039 * 6 Proposer website address (or addresses): https://www.caterpillar.com/, https://www.cat.com/en_US.html * 7 Proposer's Authorized Representative (name,
title, address, email address & phone) (The
representative must have authority to sign
the “Proposer’s Assurance of Compliance” on
behalf of the Proposer and, in the event of
award, will be expected to execute the
resulting contract):

Primary Contact: Patrick Kearns
Title: Vice President Sales & Marketing
Address: 100 NE Adams St, Peoria, IL 61629
Email: [email protected]
Phone: (309) 675-5181
*
8 Proposer's primary contact for this proposal
(name, title, address, email address & phone):

Primary Contact: Sean Egel
Title: Governmental Sales Consultant
Address: 100 NE Adams St, Peoria, IL 61629
Email: [email protected]
Phone: (309) 675-1399
*
9 Proposer's other contacts for this proposal, if
any (name, title, address, email address &
phone):

Primary Contact: Marta Sevilla
Title: Governmental Marketing Manager
Address: 100 NE Adams St, Peoria, IL 61629
Email: [email protected]
Phone: (309) 578-1150
Table 2: Company Information and Financial Strength
Line
Item Question Response *
Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: E74F7137-AC67-4B07-965B-33CD3E77A89B DocuSign Envelope ID: 9AA872AA-9802-4A6D-8065-BECD9EB74C88 259 323
10 Provide a brief history of your company,
including your company’s core values,
business philosophy, and industry longevity
related to the requested equipment, products
or services.

The history of Caterpillar is all about doing: creating, building, problem solving, innovating, testing, servicing and improving. We’re proud of the ingenious machines that are part of our rich heritage. More importantly, we are proud of the people who founded and built the company one breakthrough at a time. Beginning with Benjamin Holt and C. L. Best, the people of Caterpillar have always been - and continue to be - extraordinary.

In 1925, when Holt and Best merged to form their new tractor company, they used the name so familiar to people around the world: Caterpillar. The Caterpillar Tractor Company is today known as Caterpillar Inc.

With 2021 sales and revenues of $51.0 billion, Caterpillar Inc. is the world’s leading manufacturer of construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. For nearly 100 years, we’ve been helping customers build a better, more sustainable world and are committed and contributing to a reduced-carbon future. Our innovative products and services, backed by our global dealer network, provide exceptional value that helps customers succeed. Caterpillar does business on every continent, principally operating through three primary segments – Construction Industries, Resource Industries and Energy & Transportation – and providing financing and related services through our Financial Products segment.

Our Worldwide Code of Conduct, first published in 1974, defines what we stand for and believe in, documenting the uncompromisingly high ethical standards our company has upheld since its founding in 1925. The Code helps Caterpillar employees put our values and principles into action every day by providing detailed guidance on the behaviors and actions that support our values of Integrity, Excellence, Teamwork, Commitment and Sustainability.

Caterpillar's Code of Conduct that can be found at
https://www.caterpillar.com/en/company/code-of-conduct.html *
11 What are your company’s expectations in the
event of an award?
Caterpillar is honored to have served Sourcewell and its members who have purchased Cat® construction equipment, attachments (work tools), and electrical power generation products through Sourcewell since 2008. Furthermore, we are proud to have
earned the Sourcewell Legacy Award in 2019, and have recently been awarded contracts 060122-CAT and 092222-CAT.

Caterpillar's expectations in the event of an award would be to focus on customer needs and continued growth across all governmental segments. Sourcewell has built a strong reputation within the industry that has shown the importance of how this cooperative contract delivers upon customer needs. This contract will be a top factor in our go to market strategy within our strong Cat dealer network. If awarded, we will send out an email to our entire sales force, applicable to governmental, introducing the contract along with ways to train our salesforce, market, and grow the contract.

We look forward to the opportunity to further grow business and serve member needs together in this new Heavy Construction Equipment RFP opportunity. *
12 Demonstrate your financial strength and
stability with meaningful data. This could
include such items as financial statements,
SEC filings, credit and bond ratings, letters
of credit, and detailed reference letters.

Upload supporting documents (as applicable)
in the document upload section of your
response.

Caterpillar Inc. is a publicly traded company, and as such, its financial information is updated quarterly and available at: https://investors.caterpillar.com/overview/default.aspx Caterpillar's 2021 Annual Report provides details about our financial position. Our SEC filing documents can be found at:
https://investors.caterpillar.com/financials/sec-filings/default.aspx. Both documents are included as attachments in our Financial Strength and Stability Documents.

As 2022 results are yet to be released, below you can find a summary of our full year 2021 financials.

In 2021 full year sales and revenues were $51B of which, North American sales were $22B. Operating profit was $6.9B with a profit per share of USD $11.83.

Dividends paid per share of USD $4.28.
*
13 What is your US market share for the
solutions that you are proposing?
Caterpillar is a significant contributor to the overall Heavy Equipment sector within the US and Canada. Market share information beyond what is made publicly available through our annual reports is considered confidential. *
14 What is your Canadian market share for the
solutions that you are proposing?
Caterpillar is a significant contributor to the overall Heavy Equipment sector within the US and Canada. Market share information beyond what is made publicly available through our annual reports is considered confidential. *
15 Has your business ever petitioned for
bankruptcy protection? If so, explain in detail.

No. *
Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: E74F7137-AC67-4B07-965B-33CD3E77A89B DocuSign Envelope ID: 9AA872AA-9802-4A6D-8065-BECD9EB74C88 260 324
16 How is your organization best described: is
it a manufacturer, a distributor/dealer/reseller,
or a service provider? Answer whichever
question (either a) or b) just below) best
applies to your organization.
a) If your company is best described as
a distributor/dealer/reseller (or similar entity),
provide your written authorization to act as a
distributor/dealer/reseller for the manufacturer
of the products proposed in this RFP. If
applicable, is your dealer network
independent or company owned?
b) If your company is best described as
a manufacturer or service provider, describe
your relationship with your sales and service
force and with your dealer network in
delivering the products and services
proposed in this RFP. Are these individuals
your employees, or the employees of a third
party?
Caterpillar is a world class manufacturer which distributes products through a vast and capable independent dealer network. Our dealers are strong independently owned companies and in North America alone our 47 dealers have a combined net worth of billions of dollars. Their large valuation is a competitive advantage because it allows them to have the infrastructure to support customers regardless of location, industry, fleet size, or application.

Another advantage of independently owned dealers is that they know their customers and market well. They tailor their services specifically to their customers' needs.

Although we will sign this contract as a manufacturer, our Cat dealers will be given the
opportunity to avail themselves of the opportunity presented by the contract and will execute all the transactions with governmental customers as they do today. This includes but is not limited to consultation, quoting, accepting payment, delivery, warranty support, parts sales, and service.

Caterpillar dealers heartily embrace the other Sourcewell contracts currently available to them (032119-CAT, 092222-CAT, 062320-CAT, 060122-CAT). They have all been trained on contract usage. In fact, the current Heavy Equipment contract is leveraged by
95% of our dealers in North America. Caterpillar offers specific discounts to Sourcewell members. By using any Sourcewell Contract, our dealers agree to honor those discounts.
*
17 If applicable, provide a detailed explanation
outlining the licenses and certifications that
are both required to be held, and actually
held, by your organization (including third
parties and subcontractors that you use) in
pursuit of the business contemplated by this
RFP.

Caterpillar and its subsidiaries operate across the globe in a variety of markets that require Caterpillar to adhere to all locally mandated laws and regulations in order to do business. With regards to the territories covered by this RFP, Caterpillar will comply with applicable laws in order to do business in the territories described herein.

As an equipment manufacturer focused on quality, Caterpillar created the Caterpillar Quality Management System, which is a process-based, ISO 9001:2015 compliant quality management system used throughout Caterpillar to continually improve the quality of our products and services to meet customer, statutory, and regulatory requirements. It is registered with IRCA (International Register of Certificated Auditors) as Caterpillar Quality Management System CAT791A. *
18 Provide all “Suspension or Debarment”
information that has applied to your
organization during the past ten years.

N/A
*
Table 3: Industry Recognition & Marketplace Success
Line
Item Question Response *
Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: E74F7137-AC67-4B07-965B-33CD3E77A89B DocuSign Envelope ID: 9AA872AA-9802-4A6D-8065-BECD9EB74C88 261 325
19 Describe any relevant industry awards or
recognition that your company has received
in the past five years
Please note: To list all the awards received in the past 5 years would unnecessarily lengthen our response. For brevity, we are highlighting some recognition received in 2020, 2021 and 2022. Also note there are many global awards.

Fortune Magazine #78 on the Fortune 500 2021
Fortune Magazine World's Most Admired Companies
World & North America Dow Jones Sustainability Index
Forbes Best Employers for diversity 2020 and 2021
#82 Best Global Brands- Interbrand 2021
The Wall Street Journal Best Managed Companies in 2020 and 2021 The Wall Street Journal World's Most Sustainably Managed Companies Human Rights Campaign Foundation Corporate Equality Index Dow Jones Sustainability Index (World and North America) 21 years World’s Most Sustainably Managed Companies – The Wall Street Journal United Way World Wide’s Global Corporate Leadership Program
U.S. President’s Volunteer Service Award from Junior Achievement Corporate Equality Index – Human Rights Campaign Foundation CSR China Top 100 – the 4th CSR China Education Award (China) China CSR Excellence Award – China Philanthropy Times (China)
Corporate Social Responsibility Research Center of Southern Weekly (China) Outstanding Contribution to Poverty Alleviation – China Foundation for Poverty Alleviation (China)
2020 Global 500 – Fortune Magazine
America’s Most Responsible Companies 2020, 2021 & 2022 – Newsweek Best-Managed Companies of 2020 & 2021 – The Wall Street Journal Top Companies for Customer Satisfaction – The Wall Street Journal The CEO Leaderboard: COVID-19 Reputation Rankings – SJR All-America Executive Team – Institutional Investor
Top 150 Global Licensors – Global License Best Global Brands Top 100 – Interbrand World’s Most Valuable Brands 2020 – Forbes
2020 Best Places to Work for Disability Inclusion – Disability Equality Index World’s Best Employers 2020 – Forbes
Best Employers for Women 2020 – Forbes
America’s Best Employers by State 2020 – Forbes
America's Best Employers for Diversity 2020 – Forbes
Best Employers for New Grads 2020 – Forbes
Global 2000 – Forbes 2020, 2021 & 2022
Best Employers for Veterans 2020 and 2021– Forbes
Top Veteran-Friendly Company – U.S. Veterans Magazine
#1 Great Place to Work – Great Place to Work Institute (Brazil) #1 Great Place to Work in the Ag Business - Great Place to Work Institute (Brazil) Chile’s 20 Best Places in 2020 to Work for LGBTQ Equality, pwc Human Rights Campaign
Top of Mind Company “Industry category” (Piracicaba, Brazil) Certification on Promoting Work-Life Balance in Hyogo Prefecture – Hyogo Work and Life Center (Japan)
Hyogo’s Women’s Success in Business Promotion Company – Hyogo Women Empowerment &
Promotion Center (Japan)
Hanada Award for WIN Akashi – Hyogo Women and Future Association (Japan) Hyogo Childcare Supporting Company Award (Japan)
Science & Technology Industry Summit: Outstanding Contribution – The Economic Observer (China)
*
20 What percentage of your sales are to the
governmental sector in the past three years
The governmental and educational sector is extremely important to Caterpillar. We have a dedicated team to support governmental customers and their specific needs. However, percentage of sales to governmental is considered confidential. *
21 What percentage of your sales are to the
education sector in the past three years
The governmental and educational sector is extremely important to Caterpillar. We have a dedicated team to support governmental customers, including the education sector, and their specific needs. However, percentage of sales to education is considered confidential.
*
22 List any state, provincial, or cooperative
purchasing contracts that you hold. What is
the annual sales volume for each of these
contracts over the past three years?
While Cat dealers would typically hold contracts with states and provinces, as an exception Caterpillar holds the state contract with Ohio and NY.

Additionally, we are contract holders with OMNIA and NASPO ValuePoint.

Just as we would never share Sourcewell sales information with other cooperatives, we also keep the sales volumes from other cooperatives confidential. *
Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: E74F7137-AC67-4B07-965B-33CD3E77A89B DocuSign Envelope ID: 9AA872AA-9802-4A6D-8065-BECD9EB74C88 262 326
23 List any GSA contracts or Standing Offers
and Supply Arrangements (SOSA) that you
hold. What is the annual sales volume for
each of these contracts over the past three
years?
Listed below are the current GSA contracts that Caterpillar holds:

SIN 333924 Utility Trucks and Tractors: 2020=$6,857,211 2021=$14,071,364 SIN 333120 Street Repair and Cleaning Equipment and Attachments:
2020=$0 / 2021=$143,837
SIN 335999 Power Distribution Equipment: 2020=$151,267.70 / 2021=$9,473.07 These contracts are used by Caterpillar, but we do not allow our dealers to use GSA contracts.

Final sales for the year 2022 have yet to be fully reported. *
Table 4: References/Testimonials
Line Item 24. Supply reference information from three customers who are eligible to be Sourcewell participating entities.

Entity Name * Contact Name * Phone Number *
Baltimore County, MD Jamie Donahue 410-952-6981 *
Washington DC Fleet Greg Harrelson 202-437-3799 *
Town of Scituate Mass. Kevin Cafferty 781-545-8732 *
Table 5: Top Five Government or Education Customers
Line Item 25. Provide a list of your top five government, education, or non-profit customers (entity name is optional), including entity type, the state or province the entity is located in, scope of the project(s), size of transaction(s), and dollar volumes from the past three years.

Entity Name Entity Type * State /
Province * Scope of Work * Size of Transactions * Dollar Volume Past ThreeYears * Virginia
Department of
Transportation -
Central
Government Virginia - VA State Department of
Transportation for Virginia.

Caterpillar requests that
Sourcewell treat the information
in this table as confidential.

Purchased 41 units. $12,321,972
*
State of Idaho Government Idaho - ID State of Idaho.

Caterpillar requests that
Sourcewell treat the information
in this table as confidential.

Purchased 39 units. $10,304,218
*
Alaska
Department of
Transportation
Government Alaska - AK State Department of
Transportation for Alaska.

Caterpillar requests that
Sourcewell treat the information
in this table as confidential.

Purchased 37 units. $12,176,875
*
Arkansas State Government Arkansas - AR State of Arkansas.

Caterpillar requests that
Sourcewell treat the information
in this table as confidential.

Purchased 28 units. $10,053,000
*
Suwannee
County
Government Florida - FL A county local to Florida.

Caterpillar requests that
Sourcewell treat the information
in this table as confidential.

Purchased 26 units. $6,567,420
*
Table 6: Ability to Sell and Deliver Service
Describe your company’s capability to meet the needs of Sourcewell participating entities across the US and Canada, as applicable.

Your response should address in detail at least the following areas: locations of your network of sales and service providers, the number of workers (full-time equivalents) involved in each sector, whether these workers are your direct employees (or employees of a third party), and any overlap between the sales and service functions.

Line
Item Question Response *
Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: E74F7137-AC67-4B07-965B-33CD3E77A89B DocuSign Envelope ID: 9AA872AA-9802-4A6D-8065-BECD9EB74C88 263 327
26 Sales force. The Cat dealer salesforce is highly capable and trained in the construction industry.

The Cat dealer salespeople are consultants to their customers and advise their customers on the best solutions for their application and job. As a manufacturer we request our dealers to follow strict training protocols to ensure our sales force remains current on all product updates. Specifically, as it relates to governmental sales, each dealer has one or more people named to be a key liaison between us as manufacturer and their dealer sales team. They're offered additional in depth training on Sourcewell and ensures that all contract terms are followed.

Caterpillar has Operational Excellence Programs that recognize dealers' excellence in marketing and sales processes and operations, among other areas of the business.

In North America, our dealers employ more than 53,000 people across the machine, energy, parts and service divisions. The dealer sales teams are supported by a network of Caterpillar professionals. Each dealer has in territory support of 5 to 8 Caterpillar sales/marketing employees. It is the responsibility of these people to ensure that the dealer and Caterpillar are working well together to constantly improve and to adapt to marketplace changes. Beyond the territory experts, the sales and marketing department at Caterpillar is staffed by more than 600 people whose mission is to focus on customer satisfaction. Even more are employed "behind-the scenes" to ensure industry leading product design, up to date product information, and maintaining the ease of doing business in an increasingly connected marketplace. *
27 Dealer network or other distribution
methods.

The Cat dealer network is key to the success of our company. Boasting over 160 dealers throughout 193 countries worldwide, the Cat dealer network is widely considered to be the best in industry. Within Canada and the United States, we have 47 dealers and more than 800 dealer owned locations that sell and rent equipment.

Please refer to our directory listing of Cat dealer locations and our easy to view locations map in the attached "Additional Documents" zip file. Cat dealers are independently-owned. Each dealer has multiple branches and a mobile service fleet than can serve customers regardless of location. These are full physical locations our governmental customers can use.

Because of the size of Cat dealers, they are exceptionally capable to serve governmental customers. Dealers have trained specialists that cover many industries including heavy equipment.

Collectively, Cat dealers' large net worth permits them to stock a high volume of replacement parts - allowing governmental customers the fastest turnaround on parts availability and repair time. Cat dealers recognize the importance of governmental business to their overall success and they each have one or more governmental specialists whose job it is to serve governmental agencies well.

Please refer to the Cat dealer locations map included in "Additional Documents". Additionally, you can leverage https://www.cat.com/en_US/support/dealerlocator.html to locate dealers by location. *
Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
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28 Service force. At Caterpillar we are very proud of the saying "The sales department sells the first machine; the service department sells every one after that." The Cat dealer network in North America collectively employs more than 20,000 factory trained technicians, parts experts, product support managers and
other service-oriented staff. These subject matter experts are supported by the best repair shop equipment and materials. As machines and engines are constantly updated, so too are our service experts. We conduct product-specific training every week of the year. Technician shortage is an industry-wide concern, but because Cat dealers are large, long established companies, they can offer strong compensation and benefit packages that encourage the best people to seek employment and to retain them once hired. Caterpillar works very closely with dealers and through a program called "ThinkBIG", we are able to keep the pipeline of high quality employees full. ThinkBIG is a Caterpillar-specific instructional program that pays the student while they train to become a technician. It is a 2-year program with lab and classroom work, and a paid internship at a sponsoring Cat Dealer. As a result, the student will graduate with an accredited degree backed with over 2,000 hours of work experience.

In addition to the technicians and mechanics that work on the machines directly, each dealer has a service support staff that includes customer-facing consultants who are responsible for working with customers to set up maintenance and repair schedules to ensure the best possible up-time.

Collectively, service support staff makes up the bulk of each dealers' staff. Roughly half of their personnel investment goes to ensuring customer success via product support.

The dealer service teams are supported by a network of Caterpillar professionals.

Each dealer has in territory support of 5 to 8 Caterpillar parts/service employees. It is the responsibility of these specialists to ensure that the dealer and Caterpillar are working well together to constantly improve and to adapt to marketplace changes.

Beyond the territory experts, the service and support groups at Caterpillar are staffed by thousands of people whose mission is to focus on post-sale customer satisfaction.

Even more are employed "behind-the-scenes" to ensure technical literature is up to date, service standards are adhere to and repair questions are answered quickly. We exceed our 95% 2-hour response rate target in responding to dealer service inquiries. *
29 Describe the ordering process. If orders
will be handled by distributors, dealers or
others, explain the respective roles of the
Proposer and others.

Our simple order process has been and will continue to be well appreciated by Sourcewell and Sourcewell members:
1) When a member decides to purchase a new Cat machine, they simply include their Sourcewell member number on the Purchase Order they issue to the Cat dealer. 2) The Cat dealer then accepts the PO, issues the invoice, accepts payment and delivers the machine.
3) After the machine has been delivered, the dealer, as part of their normal process, includes the member number when filing their sales claims with Caterpillar. 4) At month's end, Caterpillar aggregates these reports and sends the sales information quarterly to Sourcewell along with the administrative fee.

IMPORTANT NOTE: Should a member wish to include additional terms and conditions to this contract, or to otherwise request a Participating Addendum, that agreement / PA should be executed between the member and Cat dealer directly. *
Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
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30 Describe in detail the process and
procedure of your customer service
program, if applicable. Include your
response-time capabilities and
commitments, as well as any incentives
that help your providers meet your stated
service goals or promises.

We are proud that our reputation stands on having the best customer support in the industry. In fact, our capabilities are industry leading. In the event a customer ever has a problem or issue with a machine, their Cat dealer is empowered to resolve that issue locally. If the problem is a result of a defect in material or workmanship, within the standard warranty period, the local Cat dealer will work with Caterpillar to apply the appropriate warranty, and keep the customer informed. Every Cat dealer has a common detailed service process in place. Caterpillar supports and verifies that all the dealer service technicians are supplied with the tools and equipment needed to repair all Cat products.

Technicians have access to an electronic library of technical information including Service Letters, Technical Information Bulletins, System Operations, Troubleshooting and Disassembly and Assembly manuals. These manuals are provided for every Cat product. Each dealer also has one or more "Technical Communicators" who are dedicated to supporting the service technicians by acting as a liaison between the shop personnel and Caterpillar.

The service technicians also have a dealer support network (DSN) system with direct access to Caterpillar's Service Engineers. Caterpillar responds to more than 95% of all high priority tickets within one hour.

Caterpillar is got everything customers need to keep their Cat machines in top shape. Whether they want Genuine Cat parts, manuals and resources to do maintenance and repairs themselves, or prefer to have one of our expert dealer technicians do the work. We make it easy to keep their Cat equipment running.

Some of our service solutions include:
-Cat Fleet Management (Condition Monitoring) - Lowers the total cost of ownership of machine. By connecting your fleet, you will be able to: track the location of your assets, monitor & manage the fuel consumption, identify the operators who would need extra training, and plan & schedule your maintenance. All of which will maximize your uptime.
-Customer Value Agreements (CVA) - Customizable plans for your equipment new or used - to do more work with lower, more predictable costs. It's a convenient plan to get the most from your equipment throughout its life. Examples of CVAs may include but are not limited to: Maintenance CVAs, Component CVAs, and Machine CVAs. -S•O•S SM Services - A fluid analysis program that provides results that you can trust including trend analysis that provides benefit to your machine and fleet. -Cat Inspect - A digital way to perform checklists, pre-work inspections, annual inspections and PM checklists. All of which can be captured in the easy to use app. *
31 Describe your ability and willingness to
provide your products and services to
Sourcewell participating entities in the
United States.

We are proud to serve all geographic areas and all Sourcewell member sectors within the United States to offer our complete products and services. Caterpillar has successfully and proudly utilized Sourcewell to sell machines in all 50 states.

Caterpillar's global reach and presence is unmatched in the industry, and we serve customers around the globe. Our manufacturing, marketing, logistics, services, research and development and related facilities, along with our dealer locations, total more than 500 locations worldwide. North America specifically is home to 47 factories and 10 parts distribution centers, which make up 40% of our global footprint! The Caterpillar parts network delivers 98% of the parts orders within 24 hours.

In addition to our facilities listed above, Cat Parts are available through the Cat dealer network in at different price points, including: Cat New, Cat General Duty and Cat Reman. The Cat dealer network also have the capability to provide dealer exchange components, dealer rebuilt components and used parts when available.

Each dealer can match the appropriate parts offering to match the customers application and productivity. For example, Cat dealers offer Cat factory remanufactured parts (Cat reman) to follow the same quality, performance, and reliability as Cat new parts. This product line provides the same as new parts warranty, includes critical engineering changes, reduces waste, and protects the environment and saves critical repair time on machines. Cat reman also uses 100% Cat parts in the remanufacture process.

Our 1.4 million parts are available to order 24/7 on Parts.Cat.Com. *
Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
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32 Describe your ability and willingness to
provide your products and services to
Sourcewell participating entities in Canada.

We are serve all geographic areas and all Canoe member sectors within Canada with our complete product and service offerings. In fact, we see the Canadian market as a significant growth opportunity for Canoe through Sourcewell contract usage. We have gained momentum with our current contract 032119-CAT in Canada.

Each dealer can match the appropriate parts offering to match the customers application and productivity. For example, Cat® dealers offer Cat® factory remanufactured parts (Cat reman) to follow the same quality, performance, and reliability as Cat new parts. This product line provides the same as new parts warranty, includes critical engineering changes, reduces waste, and protects the environment and saves critical repair time on machines. Cat reman also uses 100% Cat parts in the remanufacture process.

Our 1.4 million parts are available to order 24/7 on Parts.Cat.Com. *
33 Identify any geographic areas of the United
States or Canada that you will NOT be
fully serving through the proposed contract.

We are proud to serve all geographic areas of the United States and Canada. *
34 Identify any Sourcewell participating entity
sectors (i.e., government, education, not-forprofit) that you will NOT be fully serving through the proposed contract. Explain in
detail. For example, does your company
have only a regional presence, or do other
cooperative purchasing contracts limit your
ability to promote another contract?
We are proud to serve all Sourcewell Member sectors within the United States and Canada with our complete product and service offering through Sourcewell.

Caterpillar's cooperative purchasing contracts are non-exclusive; i.e. none of them restrict Caterpillar from promoting our Sourcewell contracts. *
35 Define any specific contract requirements
or restrictions that would apply to our
participating entities in Hawaii and Alaska
and in US Territories.

There are no restrictions or limitations for sales to members in Hawaii, Alaska or U.S. Territories. *
Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: E74F7137-AC67-4B07-965B-33CD3E77A89B DocuSign Envelope ID: 9AA872AA-9802-4A6D-8065-BECD9EB74C88 267 331
Table 7: Marketing Plan
Line
Item Question Response *
36 Describe your marketing strategy for
promoting this contract opportunity.

Upload representative samples of your
marketing materials (if applicable) in
the document upload section of your
response.

Our current marketing strategy with Sourcewell contract 032119-CAT proves to be effective with year over year sales growth. Our primary strategy to promote this contract with participating entities is through our Cat dealers' sales force. We provide group and individual training to our dealer sales reps, focusing on benefits from selling through cooperative contracts vs bids. We proudly announce the award publicly through our multiple customer facing touchpoints which may include:
1) Press Release
2) Government Solutions Magazine (Caterpillar produced magazine distributed to governmental customers in the US and Canada)
3) Government Training & Safety Days (Government customer training events at Caterpillar facilities)
4) Announcement in our governmental customer e-newsletter 5) Feature on our governmental focused website: www.cat.com/governmental 6) Announcement on our social media channels (FB, Instagram, LinkedIn) 7) Display mentions at all governmental tradeshows we attend. (NACE Annual Conference, APWA Snow Show, Waste EXPO, GFX, NIGP Annual Forum & Products Expo, and APWA PWX & Annual Roadeo)
8) Update literature with the new contact information. (An updated version can be found within our attached marketing plan attachment.)
*
37 Describe your use of technology and
digital data (e.g., social media,
metadata usage) to enhance
marketing effectiveness.

Caterpillar and the Cat dealer network are leaders in using technologies to reach our customers.
- Focus on organic search and Search Engine Optimization (SEO) to help our customers digitally find our products and the information they need. - Leverage Caterpillar's social media platforms (YouTube, Facebook, LinkedIn, Instagram, etc) and ability to target governmental segments.
- Leverage predictive data analytics (past purchase history and financing information) to recognize in advance when customers may be considering replacing machines they currently own.
- Leverage Deltek's GovWIN data in the US and Canada for governmental lead generation.

Caterpillar has a Customer Interaction Center available 24/7 who handles digital leads received from cat.com, social media, etc. Our team qualifies those leads and passes them on to our Cat Dealer network using the Salesforce platform (Customer Relationship Management system). We have processes that allows us to confirm our Cat dealers have reached out to those customers.
*
38 In your view, what is Sourcewell’s role
in promoting contracts arising out of
this RFP? How will you integrate a
Sourcewell-awarded contract into your
sales process?
Sourcewell is a well-respected contracting agency within the public procurement industry. It is important, in the event of an award, that our products and logos be included in Sourcewell marketing and website. We believe that the most important role that Sourcewell can play in marketing our contract and products, is to market themselves and promote contract purchasing across the industry.

In the event of an award, Caterpillar will put high priority in building awareness and enthusiasm within our dealer network and customer base to leverage the Sourcewell contract as our go to market strategy.
*
39 Are your products or services
available through an e-procurement
ordering process? If so, describe your
e-procurement system and how
governmental and educational
customers have used it.

We do offer a e-procurement ordering process for parts via parts.cat.com. We can also integrate into a variety of procurement systems for high volume customers.

Our wide machine portfolio and multiple configurations per machine model allows us to provide the best machine for the customer need. Our Cat dealers are trained to configure our equipment and advise the customer on the best machine and configuration for their application. Therefore, a consultative salesperson is integral in this process, and we do not use an e-procurement machine ordering process.
*
Table 8: Value-Added Attributes
Line
Item Question Response *
Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: E74F7137-AC67-4B07-965B-33CD3E77A89B DocuSign Envelope ID: 9AA872AA-9802-4A6D-8065-BECD9EB74C88 268 332
40 Describe any product, equipment,
maintenance, or operator training
programs that you offer to
Sourcewell participating entities.

Include details, such as whether
training is standard or optional,
who provides training, and any
costs that apply.

All dealers offer basic operation, safety, and maintenance training with every sale. Should a customer desire more advanced training, such as productivity improvement or advanced repairs, each of our dealers can supply that training. Often there is a cost associated with that specific training and it would be negotiated between the dealer and the customer.

Caterpillar also offers training programs directly to customers in three areas: operation, safety and service. Members may access courses online, via CD's, or through instructor-led classes leading to operator certifications. The fees for these services vary depending on the depth of training desired. These high-level instruct-led courses can be conducted at one of our dedicated training facilities in the US or on a customer's local site using their own equipment.

Caterpillar also has a licensed supplier that offers Cat Simulators to teach operational techniques from real job sites. For more information visit: https://catsimulators.com/ *
Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: E74F7137-AC67-4B07-965B-33CD3E77A89B DocuSign Envelope ID: 9AA872AA-9802-4A6D-8065-BECD9EB74C88 269 333
41 Describe any technological
advances that your proposed
products or services offer.

Cat technology gives you the power to track, monitor, automate and manage all types of assets- from a single machine, engine, to an entire fleet. We even offer technologies that protect your people. Listed below are a few technology offerings (standard and optional) that are used throughout the world in our Cat equipment.

Next Generation Excavators:

Cat Vision Link - Delivering valuable data with connected machine.

Cat Payload - Precisely load targets every time for faster cycle times.

Cat Skid Steer and Compact Track Loaders:

Electronic Torque Management System - Helps maximize performance, minimize fuel consumption.

Sealed and Pressurized Cabs - Provides a cleaner, quieter work environment.

Cat Backhoe Loaders:

Selectable Power Management Modes - Saves fuel while maintaining machine performance.

Load-Sensing Hydraulic System - Provides excellent response for improved hoe and loader productivity and greater bucket breakout force.

Cat Tractors:

Stable Blade - Produces a smoother surface finish.

Autocarry - Automatic raising and lowering of blade to maximize pushing capacity and prevent excessive track slippage.

Cat Wheel Loaders:

Operator Assist - Helps the operator reduce tire slippage, automatic rimpull management and provides up to 10% better cycle time resulting in higher productivity.

Autodig - consistent high bucket fill factors delivers up to 10% more productivity.

Cat Off Highway Trucks:

Adaptive Economy Mode - Automatically optimizes fuel consumption without affecting productivity just pressing a button.

Truck Production Management System (TPMS) - Weighting system with side indicator lights showing the operator when they are on last pass and when the truck is fully loaded.

Cat Articulated Trucks:

Advanced Automatic Traction Control (AATC) - Technology that proactively applies inter- and cross-axle differential locks ‘on-the-go’ when needed without assistance from operator's interaction.

Cat Detect with Stability Assist - Warns the operator if machine is approaching a pre-set angle during operation, when driving and tipping.

Machine/Operator Safety Technology:

Machine Security System - Gives you control over who can operate your machines and when. Prevents theft.

Seat Belt Reminder - Cost effective safety upgrade that significantly improves operator safety.

Cat Detect for Personnel - Alert ground crews in close proximity to mobile equipment. Cat® Detect for Personnel sounds an immediate, unique alert that cuts through the white noise of engines, generators, cell phones and job site chatter to protect ground workers from equipment backing incidents.

Cat Command - Remote control in operations where an operator could be at safety risk.

Whether you're looking to add technology to your current machine, or want new ways to get more value out of the technology on your equipment, we have options for you. *
Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: E74F7137-AC67-4B07-965B-33CD3E77A89B DocuSign Envelope ID: 9AA872AA-9802-4A6D-8065-BECD9EB74C88 270 334
42 Describe any “green” initiatives
that relate to your company or to
your products or services, and
include a list of the certifying
agency for each.

Caterpillar shares the concerns of governments and the public about the risks of climate change and supports global efforts to mitigate its impact. We are committed to contributing to a reduced-carbon future.

We demonstrate this in many ways including through our significant progress in reducing greenhouse gas (GHG) emissions from our operations and our continued investment in new products, technologies and services.

Caterpillar is engineering a brighter future through:
- Product innovations
- Advanced technologies leveraging know-how and R&D
- Usage of renewable fuels and fluids
- Solutions to improve jobsite efficiency
- Maintenance solutions
- Manufacturing operations’ carbon efficiency
Caterpillar's long-standing commitment to sustainability inspires us to set and achieve meaningful environmental, social and governance (ESG) goals and develop innovative products, technologies and services to support our customers on their sustainability journey.

Caterpillar is fully committed to our customers’ success by not only the design and manufacture of durable, reliable, innovative and rebuildable construction equipment, but also through our extensive and unmatched dealer network that provides you the best service and support to keep your equipment running, regardless of the environment or challenges.

We consider this as we work toward a vision of a world in which people's basic needs - such as shelter, clean water, education, and reliable energy - are fulfilled. We provide work environments, products, services, and solutions that make productive and efficient use of resources as we strive to achieve our vision. We believe this commitment supports the enduring success of our customers, stockholders, dealers, and our people.

Caterpillar is a proud 20-year member of the Dow Jones Sustainability Indices, including both the World and
North America Indices. The annuals DJSI process follows a best-in-class approach, evaluating numerous corporate economic, environmental, and social performance factors.

For more on sustainability please visit our full report attached in the Financial and Stability attachment section.
*
43 Identify any third-party issued ecolabels, ratings or certifications that your company has received for
the equipment or products
included in your Proposal related
to energy efficiency or
conservation, life-cycle design
(cradle-to-cradle), or other
green/sustainability factors.

Plants certified with IDO 14001:2004 Environmental Management System include:
1) Anchor Coupling - Goldsboro NC, ISO 14001:2004- Sept 2018 2) Anchor Coupling - Menominee - ISO 14001: 2015 - Jan. 2021 3) Gen Sets - Newberry 0 ISO 14001:2004 - Nov. 2017
4) Mapleton - 14001:2004 self-certification issued Jan 2013 5) Reman Services - Corinth MS - ISO 14001-2015- Sept. 2021 6) Reman Services - Franklin - ISO 14001:2004-May 2017
*
Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: E74F7137-AC67-4B07-965B-33CD3E77A89B DocuSign Envelope ID: 9AA872AA-9802-4A6D-8065-BECD9EB74C88 271 335
44 Describe any Women or Minority
Business Entity (WMBE), Small
Business Entity (SBE), or veteran
owned business certifications that
your company or hub partners
have obtained. Upload
documentation of certification (as
applicable) in the document
upload section of your response.

Caterpillar has long drawn on the diversity of its people as a source of innovation and competitive advantage. We are proud that our people come from across the globe, with diverse backgrounds, experiences and perspectives. Despite our differences – in geography, culture, language and business – we are one Caterpillar, one company united by these common principles with a shared commitment to the highest standards of conduct.

For example: Foley Equipment, a Cat® dealer, with territory primarily in Kansas and Missouri, is woman owned. In addition to Foley equipment, there are 31 other women in our North American dealer network who hold the titles of President, Vice President or Director.

One of the more recognized initiatives within Caterpillar's Global Supply Network Division is the Caterpillar Inc. Proprietary Information Supplier Diversity Program which spurs economic growth by increasing business opportunities to minority-owned, women-owned, veteran and service disabled veteran-owned, small disadvantaged businesses and those certified in HUBZones, all while ensuring expectations are met with regards to quality, velocity, capacity, and cost. Currently more than 37% of our direct and indirect purchasing is conducted with suppliers in these categories.

Caterpillar is a proud member of the National Minority Supplier Development Council (NMSDC). We also use the System for Aware Management (SAM), SBA, and NMSDC databases to locate SDB, VOSB, SDVOSB and HUBZone suppliers.

Supplier Diversity is discussed with Global Supply Network Division leadership during the Monthly Operating Results Review meetings. This in turn forces accountability for supplier inclusion by measuring drivers, such as the number of sourcing projects, which include Divers Suppliers and the values of the projects in which they participate. The goal is to create greater transparency to determine which teams are creating inclusive environments and which are not.

For more detail, please see our attached 2021 Global Diversity & Inclusion Report in the Additional Documents folder.
*
Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: E74F7137-AC67-4B07-965B-33CD3E77A89B DocuSign Envelope ID: 9AA872AA-9802-4A6D-8065-BECD9EB74C88 272 336
45 What unique attributes does your
company, your products, or your
services offer to Sourcewell
participating entities? What makes
your proposed solutions unique in
your industry as it applies to
Sourcewell participating entities?
BEST OVERALL VALUE / LOWEST LIFE CYCLE COST:

Cat products deliver the best value for the money. While we rarely have the lowest initial purchase price, we are happy to demonstrate to customers that our machines offer the lowest overall owning and operating costs when factors such as fuel efficiency, repair frequency, productivity, and resale value are factored in. We believe that government agencies are tasked to be the best stewards of taxpayer funds and our products can prove that they are the best solution. Sourcewell members are in the best position to allow these discussions to take place in contrast to a local bid situation where the focus is often only on initial price.

CAT SAFETY SERVICES / SAFETY FEATURES:

In addition to the tangible, measurable aspects of the life cycle cost equation, we also bring our focus on safety to every product that we manufacture. Quantifying a human life or debilitating injury is impossible, but each machine has industry-leading features that strive to minimize the possibility for accidents.

In addition to built-in safety features, we also offer products and services that are unique in the industry.

Cat Safety Services include, but are not limited to, the following:

Safety Perception Survey - Used to establish a baseline safety-culture assessment by measuring employee perceptions and gaps in beliefs between management and employees on the front line across 20 Safety Culture Indicators.

Safety Leadership Assessment - Used to measure individual safety leadership capability around four domains of safety leadership.

Worksite Assessment - Compares onsite observations of safety practices and employee interview data to the documented processes and procedures.

Continuous Improvement Process - Involving all levels of the organization to generate engagement, involvement, and ownership in the safety improvement process.

Training - can be conducted with e-learning courses on http://safelyhome.cat.com, instructorled training products or as Supplier-facilitated workshops. Topics available include, but are not limited to, safety culture, effective communication, supervisor safety training, recognition, etc.

Fleet Management & Services through Caterpillar Job Site Solutions:

We leverage the power of Caterpillar and our dealers by designing innovative solutions that solve customer problems and that have a positive impact on their bottom line. We approach each site differently, striving to deliver exactly what’s needed — no more, no less.

Every solution includes a unique mix of Caterpillar and dealer capabilities using industry best products, technology, services and expertise necessary to meet the customer’s definition of success. The goal is to leave customers better off tomorrow than they are today.

Details on products and services are available at www.cat.com/safety. More information can be found in the additional document section. Pricing can be found in the pricing document section.
*
Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: E74F7137-AC67-4B07-965B-33CD3E77A89B DocuSign Envelope ID: 9AA872AA-9802-4A6D-8065-BECD9EB74C88 273 337
Table 9: Warranty
Describe in detail your manufacturer warranty program, including conditions and requirements to qualify, claims procedure, and overall structure. You may upload representative samples of your warranty materials (if applicable) in the document upload section of your response in addition to responding to the questions below.

Line
Item Question Response *
46 Do your warranties cover all products, parts, and
labor?
Caterpillar has extensive warranty coverage. Please see our warranty statements attached in the warranty information documents. *
47 Do your warranties impose usage restrictions or
other limitations that adversely affect coverage?
Please see applicable warranty statements in the attached documents. * 48 Do your warranties cover the expense of
technicians’ travel time and mileage to perform
warranty repairs?
Caterpillar does not cover travel time and mileage. Dealer territories vary considerably from state to state as do their policies about travel time and mileage during the warranty period.
*
49 Are there any geographic regions of the United
States or Canada (as applicable) for which you
cannot provide a certified technician to perform
warranty repairs? How will Sourcewell
participating entities in these regions be provided
service for warranty repair?
One of our key differentiating strengths is our ability to service equipment regardless of where it is located. Please see applicable warranty statements in the attached documents. *
50 Will you cover warranty service for items made by
other manufacturers that are part of your proposal,
or are these warranties issues typically passed on
to the original equipment manufacturer?
Warranty service for machines ordered from a Caterpillar facility are generally provided by Caterpillar and performed by Cat dealers. Some items, such as tires, are covered under their manufacturers' warranties. *
51 What are your proposed exchange and return
programs and policies?
Please see applicable warranty statements in the attached documents. * 52 Describe any service contract options for the
items included in your proposal.

We have a large variety of service contract options which can all be customized according to customer needs. Below are just two examples.

More solutions are available and we encourage members and dealers to explore all options.
1) Equipment Protection Plans (EPP): After the initial warranty period ends, members may choose to purchase additional protection plans to reduce their exposure to unplanned costs. These policies are written based on months and hours of operation. There are four standard levels of coverage:
1) Powertrain
2) Powertrain + Hydraulics
3) Powertrain + Hydraulics + Technology
4) Premier
A description of all these options is included in the attached Equipment Protection Plans document. EPP can be purchased at the same time as the machine purchase, or anytime before the standard warranty expires. 2) Customer Value Agreements (CVA's):

A member may choose to enter into an agreement with their Cat dealer to perform routine maintenance and/or repairs. These contracts are customizable based on member needs.

The selling Cat dealer can take responsibility for some or all the required service and maintenance needs to allow the agency to gain efficiency by focusing on the performance demands more than maintenance. CVA's are a useful tool to manage expenses. CVAs can be purchased at the same time as the machine purchase, or anytime after. Cat Financial also offers CVAs, which can be performed by Cat dealers in the United States, and are particularly helpful for customers who move their machine fleet to multiple locations which may have different servicing Cat dealers. *
Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: E74F7137-AC67-4B07-965B-33CD3E77A89B DocuSign Envelope ID: 9AA872AA-9802-4A6D-8065-BECD9EB74C88 274 338
Table 10: Payment Terms and Financing Options
Line
Item Question Response *
53 Describe your payment terms and accepted payment
methods.

Cat dealers are independently owned businesses. As such their payment terms and accepted payment methods vary, but all will be stated on individual invoices. The most common terms are net 30. *
54 Describe any leasing or financing options available for use by educational or governmental entities.

We offer both leasing and financing options to governmental members of Sourcewell at rates lower than available to the general public.

Caterpillar has its own financing arm, Cat Financial.

Cat Financial was founded in 1981 and serves Cat customers and dealers. With over 1,900 employees, Cat Financial is active in more than 40 countries covering more than 148,000 customers worldwide.

Cat Financial offers you a complete solution for your acquisition needs:
- Equipment & Attachments
- Parts
- Service
- Rebuilds
Financial products are aligned and customized with the project and work site requirements such as operating lease, loan or finance lease. Find more information from Cat Financial here:
https://www.cat.com/en_US/support/financing-protection.html *
55 Describe any standard transaction documents that you propose to use in connection with an awarded contract
(order forms, terms and conditions, service level
agreements, etc.). Upload a sample of each (as
applicable) in the document upload section of your
response.

Cat dealers are independently owned businesses. As such their standard transaction documents will vary.
*
56 Do you accept the P-card procurement and payment
process? If so, is there any additional cost to Sourcewell participating entities for using this process?
Because Cat dealers will be receiving payments directly from members, accepting P-card procurement will be at their discretion.

Many dealers do accept this method without additional fees. Some have limitations on the amount that can be processed.
*
Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: E74F7137-AC67-4B07-965B-33CD3E77A89B DocuSign Envelope ID: 9AA872AA-9802-4A6D-8065-BECD9EB74C88 275 339
Table 11: Pricing and Delivery
Provide detailed pricing information in the questions that follow below. Keep in mind that reasonable price and product adjustments can be made during the term of an awarded Contract as described in the RFP, the template Contract, and the Sourcewell Price and Product Change Request Form.

Line
Item Question Response *
57 Describe your pricing model (e.g., line-item discounts or product-category discounts). Provide detailed pricing data (including standard or list pricing and the Sourcewell
discounted price) on all of the items that you want
Sourcewell to consider as part of your RFP response. If applicable, provide a SKU for each item in your proposal.

Upload your pricing materials (if applicable) in the
document upload section of your response.

We offer a deep list discount off the current Caterpillar machine and work tool list prices to all Sourcewell members. We have provided base machine list pricing in the document pricing section.

Base machines must be properly configured with other mandatory and optional items from the price list before they are considered operational. For the execution of the agreement we will ask our Cat dealer and Sourcewell member to use the Caterpillar price list that is current at the time of the quote. Dealers, in consultation with the member, will configure the machine to the desired specifications and apply the stated list discount to that configured list price amount. Dealer and members should remember to factor in any expected price increases if a machine will be built to order. The pricing document, in the applicable pricing document attachment section, shows the list discount offered for each new machine.

Additionally, we are pleased to offer a list discount of 15% off all products and consulting services under Cat Safety Services. *
58 Quantify the pricing discount represented by the pricing proposal in this response. For example, if the pricing in your response represents a percentage discount from
MSRP or list, state the percentage or percentage range.

Pricing in this proposal is a percentage discount from list on current machine and work tools list prices. Our discount range varies between 3 - 34% off of the list price depending on the product family or model.
*
59 Describe any quantity or volume discounts or rebate
programs that you offer.

Our dealers are empowered to consider purchase order volume, repeat purchases, etc. They may offer members additional discounts and /or services at their discretion.
*
60 Propose a method of facilitating “sourced” products or related services, which may be referred to as “open
market” items or “nonstandard options”. For example, you may supply such items “at cost” or “at cost plus a
percentage,” or you may supply a quote for each such
request.

Sourced goods / Open Market Items are available to members from Cat dealers. The prices for these good or services will represent fair marketing value and will be determined between the member and the selling dealer. We encourage our dealers and members to use these options as it facilitates complimentary products and streamlines the procurement process. Customers and dealers are responsible for including their Sourcewell member numbers on all documentation related to these
purchases. Caterpillar Inc. is not a party to these sales and is exempted from including them in quarterly reports.

For audits, inclusion of a customer's Sourcewell member number on the PO and /or invoice shall be deemed sufficient.
*
61 Identify any element of the total cost of acquisition that is NOT included in the pricing submitted with your response.

This includes all additional charges associated with a
purchase that are not directly identified as freight or shipping charges. For example, list costs for items like predelivery inspection, installation, set up, mandatory training, or initial inspection. Identify any parties that impose such costs and their relationship to the Proposer.

Machines are unique in their requirements for preparation prior to use. Some may require local final assembly due to their large size others may have locally installed options (fire suppression, beacons, auto lube systems for example). When a dealer issues a quote for a machine, any dealer costs (like pre-delivery inspection, installation, set up, training, etc.) will be itemized separately and are not subject to the Caterpillar list discount for Sourcewell members. *
62 If freight, delivery, or shipping is an additional cost to the Sourcewell participating entity, describe in detail the complete freight, shipping, and delivery program.

There is no additional cost to members who choose to pick up their machines from the Cat dealer. Dealers may charge fees for delivery to the Sourcewell member's location.
*
63 Specifically describe freight, shipping, and delivery terms or programs available for Alaska, Hawaii, Canada, or any
offshore delivery.

Just as for members in the 48 contiguous states, there is no additional cost to members who choose to pick up their machine from their Cat dealer. Dealers may charge fees for delivery to the Sourcewell members' location.
*
64 Describe any unique distribution and/or delivery methods or options offered in your proposal.

Machines are large purchases and if there are unique Sourcewell member requirements our dealers will be happy to discuss on a case by case basis.
*
Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: E74F7137-AC67-4B07-965B-33CD3E77A89B DocuSign Envelope ID: 9AA872AA-9802-4A6D-8065-BECD9EB74C88 276 340
Table 12: Pricing Offered
Line
Item The Pricing Offered in this Proposal is: * Comments 65 b. the same as the Proposer typically offers to GPOs, cooperative procurement organizations, or state purchasing departments.

Caterpillar wants to provide
the governmental customer
the best list discount possible
to allow them to be good
stewards of tax-payers funds.

We want our governmental
customers to have the ability
to choose which cooperative
contract better fits their needs.

Table 13: Audit and Administrative Fee
Line
Item Question Response *
66 Specifically describe any self-audit process or program that you plan to employ to verify compliance with your proposed Contract with Sourcewell. This process includes ensuring that Sourcewell participating entities obtain the proper pricing, that the Vendor reports all sales under the Contract each quarter, and that the Vendor remits the proper administrative fee to Sourcewell. Provide sufficient detail to support your ability to report quarterly sales to Sourcewell as described in the Contract template.

We plan to continue our very robust process to ensure
reporting speed, accuracy, and contract compliance.

Caterpillar and our Cat dealers have very close and trusting relationships. Our dealers are long-established, and the current process (under contract #032119-CAT) is working well. 1) To ensure pricing accuracy, we maintain our current
Sourcewell customer discount sheet on our dealer facing pricing pages. Dealers integrate these numbers automatically in their quoting software.
2) To ensure new machines and work tool sales are
recorded properly, we use our post-sale credit system. In a nutshell, this means that we
corporately support the pricing offered in this contract at a level below what's available to other customers. To receive this additional monetary support after the machine is
delivered, dealers must supply the member's name, address, and member number. There is no additional burden or cost to our dealers to use the Sourcewell contract and this is part of the reason for their high engagement and our high reporting accuracy.
3) At month end, we gather the new machine and work tool sales data attributed to Sourcewell and aggregate it for our reporting.
4) After quarter end, we will send the quarterly sales report and administration fee payment to Sourcewell for all items that are subject to the administrative fee.
*
67 If you are awarded a contract, provide a few examples of internal metrics that will be tracked to measure whether you are having success with the contract.

We regularly track the % of sales that are sold using a cooperative contract. We will continue this practice if we are awarded a contract for RFP 011723.
*
68 Identify a proposed administrative fee that you will pay to Sourcewell for facilitating, managing, and promoting the Sourcewell Contract in the event that you are awarded a Contract. This fee is typically calculated as a percentage of Vendor’s sales under the Contract or as a per-unit fee; it is not a line-item addition to the Member’s cost of goods. (See the RFP and template Contract for additional details.)
Per amendment #1 to Contract #032119-CAT, we will be
pleased to offer an administrative fee of 0.33% of
Caterpillar's list price for each piece of new equipment and serialized work
tools purchased by Sourcewell's Participating Entities.

Caterpillar will pay this fee and will not ask dealers or members to pay the fee.
*
Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: E74F7137-AC67-4B07-965B-33CD3E77A89B DocuSign Envelope ID: 9AA872AA-9802-4A6D-8065-BECD9EB74C88 277 341
Table 14A: Depth and Breadth of Offered Equipment Products and Services Line
Item Question Response *
69 Provide a detailed description of the
equipment, products, and services that you
are offering in your proposal.

The Cat equipment product line, consisting of more than 300 machines, sets the standard for our industry. We plan to help you meet your needs with our equipment, with our distribution and product support system, and the continual introduction and updating of products.

Caterpillar is pleased to offer a wide variety of products for Sourcewell members.

Excluding paving products, equipment and services awarded on 060122-CAT these include:
- Cat Backhoe Loaders (9 models offered)
- Cat Compact Track Loader/Skid Steer Loader (14 models offered) - Cat Track/Wheel Hydraulic Excavators (41 models offered) - Cat Motor Graders (7 models offered)
- Cat Telehandlers (8 models offered)
- Cat Track Loaders (3 models offered)
- Cat Track/Wheel Dozers (15 models offered)
- Cat Wheel Loaders (19 models offered)
- Cat Wheel Tractor Scrapers (7 models offered)
- Cat Articulated Trucks (5 models offered)
- Cat Rigid Frame Trucks (2 models offered)
- Cat Material Handlers (3 models offered)
- Cat Landfill Compactors (3 models offered)
- Product offerings by model and discount can be found in the pricing attachment within the applicable proposal pricing section.

Services and support include:
- Cat Attachments (Worktools)
- Cat Technology
- Cat Safety Services
- Cat Job Site Solutions
- Product offerings by model and discount can be found in the pricing attachment within the applicable proposal pricing section.
- Services and support brochures can be found in the additional documents section by name of offering.

For more detailed information on each of these products/offerings see the following website: https://www.cat.com/en_US.html
*
70 Within this RFP category there may be
subcategories of solutions. List subcategory
titles that best describe your products and
services.

N/A
*
Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
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Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
Table 148: Depth and 8readth of Offered Equipment Products and Services Indicate below if the listed types or classes of equipment, products, and services are offered within your proposal. Provide additional comments in the text box provided, as necessary.

Line Item Categor\ or T\pe Offered Comments
71 Wheeled, tracked, and backhoe loaders Yes
No
Manufactured by Caterpillar. Offerings
listed in applicable pricing attachment
section.
7 Motor Graders Yes
No
Manufactured by Caterpillar. Offerings
listed in applicable pricing attachment
section.
73 Wheeled and tracked excavators Yes
No
Manufactured by Caterpillar. Offerings
listed in applicable pricing attachment
section.
74 Bulldozers, compactors, scapers, articulated and
rigid haulers
Yes
No
Manufactured by Caterpillar. Offerings
listed in applicable pricing attachment
section.
75 Cranes Yes
No
NIA
76 Accessories or attachments for the offering in #71-
75 above
Yes
No
Manufactured by Caterpillar. Offerings
listed in applicable pricing attachment
section.
77 Technology or services for the offering in #71-75
above
Yes
No
Manufactured or offered by Caterpillar.

Offerings listed in applicable pricing
attachment section.

Table 14C: Required Offering of Equipment
Indicate below if the proposer's proposal includes at least one (1) of the following listed types or classes of equipment. Provide additional comments in the text box provided, as necessary.

Line Item Categor\ or T\pe Offered Comments
78 Wheel loader with published net horsepower (HP)
of at least 300 HP
Yes
No
Manufactured by Caterpillar. Offerings
listed in applicable pricing attachment
section.
79 Wheeled or tracked excavator with a published net
horsepower (HP) of at least 150 HP
Yes
No
Manufactured by Caterpillar. Offerings
listed in applicable pricing attachment
section.
80 Motor Grader with a published maximum operating
weight of at least 30,000 lbs.

Yes
No
Manufactured by Caterpillar. Offerings
listed in applicable pricing attachment
section.
81 Rough terrain, all terrain, crawler, floating, lattice, or telescopic crane with a published maximum lifting
capacity of at least 300 tons and a published
maximum boom length of at least 150 feet
Yes
No
NIA
Exceptions to Terms, Conditions, or Specifications Form Only those Proposer Exceptions to Terms, Conditions, or Specifications that have been accepted by Sourcewell have been incorporated into the contract text.

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Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
Documents
Ensure your submission document(s) conforms to the following:

1. Documents in PDF format are preferred. Documents in Word, Excel, or compatible formats may also be provided.

2. Documents should NOT have a security password, as Sourcewell may not be able to open the file. It is your sole responsibility to ensure that the uploaded document(s) are not either defective, corrupted or blank and that the documents can be opened and viewed by Sourcewell.

3. Sourcewell may reject any response where any document(s) cannot be opened and viewed by Sourcewell.

4. If you need to upload more than one (1) document for a single item, you should combine the documents into one zipped file. If the zipped file contains more than one (1) document, ensure each document is named, in relation to the submission format item responding to. For example, if responding to the Marketing Plan category save the document as "Marketing Plan." Pricing - Machine Pricing.zip - Tuesday January 17, 2023 15:29:45 Financial Strength and Stability - Fin Strength and Stability.zip - Tuesday January 17, 2023 10:31:16 Marketing PlanISamples - Marketing Plan.pdf - Tuesday January 17, 2023 14:53:49 WMBEIMBEISBE or Related Certificates (optional)
Warranty Information - Warranty Combined.pdf - Monday January 16, 2023 10:36:31 Standard Transaction Document Samples (optional)
Upload Additional Document - Additional Documents.zip - Tuesday January 17, 2023 16:05:29 DocuSign Envelope ID: E74F7137-AC67-4B07-965B-33CD3E77A89B DocuSign Envelope ID: 9AA872AA-9802-4A6D-8065-BECD9EB74C88 280 344
Addenda, Terms and Conditions

PROPOSER AFFIDAVIT AND ASSURANCE OF COMPLIANCE
I certify that I am the authorized representative of the Proposer submitting the foregoing Proposal with the legal authority to bind the Proposer to this Affidavit and Assurance of Compliance:

1. The Proposer is submitting this Proposal under its full and complete legal name, and the Proposer legally exists in good standing in the jurisdiction of its residence.

2. The Proposer warrants that the information provided in this Proposal is true, correct, and reliable for purposes of evaluation for contract award.

3. The Proposer, including any person assisting with the creation of this Proposal, has arrived at this Proposal independently and the Proposal has been created without colluding with any other person, company, or parties that have or will submit a proposal under this solicitation; and the Proposal has in all respects been created fairly without any fraud or dishonesty. The Proposer has not directly or indirectly entered into any agreement or arrangement with any person or business in an effort to influence any part of this solicitation or operations of a resulting contract; and the Proposer has not taken any action in restraint of free trade or competitiveness in connection with this solicitation. Additionally, if Proposer has worked with a consultant on the Proposal, the consultant (an individual or a company) has not assisted any other entity that has submitted or will submit a proposal for this solicitation.

4. To the best of its knowledge and belief, and except as otherwise disclosed in the Proposal, there are no relevant facts or circumstances which could give rise to an organizational conflict of interest. An organizational conflict of interest exists when a vendor has an unfair competitive advantage or the vendor’s objectivity in performing the contract is, or might be, impaired.

5. The contents of the Proposal have not been communicated by the Proposer or its employees or agents to any person not an employee or legally authorized agent of the Proposer and will not be communicated to any such persons prior to Due Date of this solicitation.

6. If awarded a contract, the Proposer will provide to Sourcewell Participating Entities the equipment, products, and services in accordance with the terms, conditions, and scope of a resulting contract.

7. The Proposer possesses, or will possess before delivering any equipment, products, or services, all applicable licenses or certifications necessary to deliver such equipment, products, or services under any resulting contract.

8. The Proposer agrees to deliver equipment, products, and services through valid contracts, purchase orders, or means that are acceptable to Sourcewell Members. Unless otherwise agreed to, the Proposer must provide only new and first-quality products and related services to Sourcewell Members under an awarded Contract.

9. The Proposer will comply with all applicable provisions of federal, state, and local laws, regulations, rules, and orders.

10. The Proposer understands that Sourcewell will reject RFP proposals that are marked "confidential" (or "nonpublic," etc.), either substantially or in their entirety. Under Minnesota Statutes Section 13.591, subdivision 4, all proposals are considered nonpublic data until the evaluation is complete and a Contract is awarded. At that point, proposals become public data. Minnesota Statutes Section 13.37 permits only certain narrowly defined data to be considered a "trade secret," and thus nonpublic data under Minnesota's Data Practices Act.

11. Proposer its employees, agents, and subcontractors are not:

1. Included on the “Specially Designated Nationals and Blocked Persons” list maintained by the Office of Foreign Assets Control of the United States Department of the Treasury found at: https://www.treasury.gov/ofac/downloads/sdnlist.pdf;

2. Included on the government-wide exclusions lists in the United States System for Award Management found at:
https://sam.gov/SAM/; or

3. Presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from programs operated Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
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by the State of Minnesota; the United States federal government or the Canadian government, as applicable; or any Participating Entity. Vendor certifies and warrants that neither it nor its principals have been convicted of a criminal offense related to the subject matter of this solicitation.

By checking this box I acknowledge that I am bound by the terms of the Proposer’s Affidavit, have the legal authority to submit this Proposal on behalf of the Proposer, and that this electronic acknowledgment has the same legal effect, validity, and enforceability as if I had hand signed the Proposal. This signature will not be denied such legal effect, validity, or enforceability solely because an electronic signature or electronic record was used in its formation. - Sean Egel, Sales Support Consultant, Caterpillar Inc.

The Proposer declares that there is an actual or potential Conflict of Interest relating to the preparation of its submission, and/or the Proposer foresees an actual or potential Conflict of Interest in performing the contractual obligations contemplated in the bid.

Yes No
The Bidder acknowledges and agrees that the addendum/addenda below form part of the Bid Document.

Check the box in the column "I have reviewed this addendum" below to acknowledge each of the addenda.

File Name
I have reviewed the
below addendum and
attachments (if
applicable)
Pages
Addendum_5_Heavy_Construction_Equipment_RFP_011723
Tue January 10 2023 08:47 AM
1 Addendum_4_Heavy_Construction_Equipment_RFP_011723
Fri January 6 2023 09:51 AM
2 Addendum_3_Heavy_Construction_Equipment_RFP_011723
Thu December 29 2022 12:33 PM
2 Addendum_2_Heavy_Construction_Equipment_RFP_011723
Wed December 21 2022 01:49 PM
1 Addendum_1_Heavy_Construction_Equipment_RFP 011723
Thu December 15 2022 09:27 AM
1 Bid Number: RFP 011723 Vendor Name: Caterpillar Inc
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TM-20-01077

SOURCEWELL TRADEMARK LICENSE ADDENDUM
This Addendum is by and between SOURCEWELL, 202 – 12th Street NE, PO Box 219, Staples, Minnesota 56479 (“Sourcewell”) and Caterpillar Inc., having its principal place of business at 5212 N. O’Connor Blvd., Suite 1100, Irving, TX 75039, and offices at 100 NE Adams Street, Peoria, Illinois, 61629 (“Caterpillar” or “Vendor”). Sourcewell and Caterpillar may be referred to in this Agreement as a “Party” and collectively as the “Parties.”
The Parties maintain a contractual relationship for Vendor to provide equipment, products, or services to Sourcewell’s cooperative purchasing contracts as follows:

Sourcewell Contract 011723 – CAT (Solicitation Number: 011723) Sourcewell and Vendor each own all right, title, and interest in their respective names, trademarks, service marks, related logos, and all other rights in the names, designs, likenesses and visual representations thereof (“Licensed Trademarks”), and desire to grant each other a royalty-free license to use certain Licensed Trademarks owned by the other Party under the terms and conditions set forth herein.

ARTICLE I: GRANT OF LICENSE
A. GRANT OF LICENSE. During the term of the Contract:

1. Sourcewell grants to Vendor a royalty-free, worldwide, non-exclusive right and license to use Sourcewell’s Licensed Trademarks provided to Vendor by Sourcewell in advertising and promotional materials for the purpose of marketing Sourcewell’s relationship with Vendor.

2. Vendor grants to Sourcewell a royalty-free, worldwide (except for those jurisdictions that are prohibited by applicable Anti-Corruption and International Trade Laws), non-exclusive right and license to use Vendor’s Licensed Trademarks provided to Sourcewell by Vendor in advertising and promotional materials for the purpose of marketing Vendor’s relationship with Sourcewell. “Anti-Corruption and International Trade Laws” means all statutes, regulations, rules, executive orders, supervisory requirements, directives, ordinances, circulars, opinions, interpretive letters, and official releases of or by any government, or any authority, department or agency thereof or selfregulatory organization related to bribery, fraud, corruption, or international trade.

3. The Parties agree that each is the owner of all rights, including without limitation common law rights and goodwill, in relation to their respective Licensed Trademarks, and that any goodwill derived from the use of Licensed Trademarks by the other Party shall inure to the owner of the respective Licensed Trademarks.

B. LIMITED RIGHT OF SUBLICENSE. The rights and licenses granted herein includes a limited right of each Party to grant sublicenses to its and their respective distributors, marketing representatives, and agents (collectively “Permitted Sublicensees”) in advertising and promotional materials for the purpose of marketing the Contract. Any sublicense granted will be subject to the terms and conditions of this Addendum. Each Party will be responsible for any breach of this Article by any of their respective sublicensees.

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C. USE; QUALITY CONTROL.

1. Neither Party may alter the other Party’s Licensed Trademarks from the form provided by the other Party and must comply with the other Party’s removal requests as to specific uses of its Licensed Trademarks.

2. Each Party agrees to use, and to cause its Permitted Sublicensees to use, the other Party’s Licensed Trademarks only in good faith and in a dignified manner consistent with such Party’s use of the Licensed Trademarks. Upon written notice to the breaching Party, the breaching Party or their Permitted Sublicensees have thirty (30) days of the date of the written notice to cure the breach or the license will be terminated.

3. Beyond what is permitted in this Addendum, neither Party will:
a. attempt to register, or register any trademark, service mark, symbol, logo, get-up or device which is confusingly similar to any of the other Party’s Licensed Trademarks in any jurisdiction;
b. represent that it has any rights of any nature in the Licensed Trademarks other than those enjoyed under the terms of this Agreement;
c. use the other Party’s trademarks, service marks or copyrights, translations thereof or marks similar thereto, as part of its corporate name, trade name or a d/b/a name, favicons, social media names/handles, email addresses, email extensions, or domain names without prior written approval from the other Party; or d. use the other Party’s trade names, trademarks, or service marks on any collateral business materials (e.g., business cards, letterhead, invoices, pens, notepads, fax cover sheets, etc.), unless otherwise approved in writing by the other Party.

ARTICLE II: TERM, TERMINATION, AND MISCELLANEOUS.

A. EFFECTIVE DATE. This Addendum is effective upon the date of the final signature below.

B. TERMINATION. Unless earlier terminated in accordance with this Article, this Addendum expires immediately upon the expiration or termination of the Contract.

1. Termination for Convenience. This Addendum may be terminated by either Party at any time upon ninety (90) days’ prior written notice to the other Party.

2. Termination for Breach. This Addendum may be terminated by either Party upon a breach of the terms of this Addendum by the other Party, upon written notice of breach to the breaching Party, and only if such breach is not cured within thirty (30) days of the date of the written notice.

3. Effect of Termination. Upon the termination of this Addendum for any reason, each Party will have thirty (30) days to, and require its Permitted Sublicensees to, remove all Licensed Trademarks from signage, websites, and the like bearing the other Party’s name or logo DocuSign Envelope ID: E74F7137-AC67-4B07-965B-33CD3E77A89B DocuSign Envelope ID: 9AA872AA-9802-4A6D-8065-BECD9EB74C88 284 348
TM-20-01077
(excepting Sourcewell’s pre-printed catalog of vendors which may be used until the next printing). Vendor must return all marketing and promotional materials, including signage, provided by Sourcewell, or dispose of it according to Sourcewell’s written directions.

4. Miscellaneous. The terms and conditions of this Addendum shall have no effect on the terms and conditions of any other trademark licenses signed by the Parties.

All other terms of the Contract remain in full force and effect, unless otherwise terminated.

SOURCEWELL
By: _________________
Name:

Title:

Date:

Caterpillar Inc.

By: _________________
Name:

Title:

Date:

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Director of Operations and Procurement/CPO
Jeremy Schwartz Patrick Kearns
5/24/2023 | 12:48 PM PDT
Vice President Sales & Marketing - North America
285 349

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BUSINESS OF THE COUNCIL OF THE CITY OF HALF MOON BAY

AGENDA REPORT
For meeting of: May 19, 2026
TO: Honorable Mayor and City Council
VIA: Matthew Chidester, City Manager
FROM: Karen Decker, Interim Deputy City Manager
TITLE: CARTER PARK FEE SCHEDULE
______________________________________________________________________________ RECOMMENDATION:

Adopt a resolution approving a tiered fee schedule for Carter Park and direct staff to monitor utilization and return with adjustments as needed.

FISCAL IMPACT:

No cost is associated with this item. Revenue generated through facility rentals will offset direct costs including staff time for event coordination and oversight, routine maintenance, utilities, and long-term asset upkeep.

STRATEGIC ELEMENT:

This update supports the Fiscal Sustainability, Inclusive Governance, and Infrastructure and Environment Elements of the Strategic Plan.

BACKGROUND:

Carter Park was identified in the Parks Master Plan adopted in 2018 as an underutilized community space and was recently renovated and designed to accommodate community gatherings, performances, and small-to-medium-sized events. As a newly enhanced park, establishing a clear and equitable fee structure is necessary to guide its use, ensure fair access, and support ongoing maintenance and operations.

To inform the proposed fee schedule, staff conducted a comparative analysis of similar publicly operated outdoor venues throughout the Bay Area, along with a review of private event and ceremony pricing within Half Moon Bay. This dual analysis provides both a public-sector benchmark and a market-based context for pricing.

DISCUSSION:

Local Market Context (Half Moon Bay)
Private event and ceremony venues in Half Moon Bay demonstrate strong pricing demand, particularly for coastal locations:
286

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• Luxury venues, such as The Ritz-Carlton, typically charge ceremony site fees of approximately $1,500 to $3,000 or more, often tied to larger food and beverage minimums.
• Mid-range venues, including Oceano Hotel & Spa, offer bundled wedding packages ranging from approximately $15,000 to $28,000 or more.
• Smaller venues and restaurant buyouts generally range from approximately $2,300 to $8,000 for modest-sized events.

Even simplified ceremony-only events frequently cost several thousand dollars, reflecting the premium associated with coastal destinations. This context supports the value of a publicly accessible venue that offers a more affordable alternative while still capturing appropriate market value.

Public-Sector Benchmarking
Staff evaluated comparable municipally operated outdoor venues to establish an appropriate pricing range:
• The Leo J. Ryan Park Amphitheater in Foster City charges approximately $164 to $342 per hour, translating to roughly $1,300 to $2,700 for a full-day use. This facility represents the closest comparable in scale and function. • The Jerry Garcia Amphitheater in San Francisco charges approximately $2,892 per day for nonprofit users and $5,785 for commercial events, reflecting a larger, high-demand regional venue.
• Smaller neighborhood parks, such as Memorial Park in Cupertino, offer highly subsidized rates as low as $55 to $75 for short-duration use.

This analysis indicates that Carter Park falls between a neighborhood park and a regional destination venue.

Pricing Positioning
Based on the analysis, Staff recommends that Carter Park is best positioned as a mid-tier civic amphitheater, with pricing that:
• Preserves access for local community organizations
• Reflects the value of a coastal event space
• Aligns with regional public-sector benchmarks
• Avoids underpricing a high-demand public asset
A target daily rate range of approximately $1,000 to $2,500 for typical use is consistent with comparable facilities, with higher rates for commercial or high-impact events.

The proposed fee schedule is designed to achieve partial cost recovery for the operation, maintenance, and administration of the Carter Park Amphitheater while maintaining affordable access for community-based organizations.
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Proposed Fee Structure
Tiered User Categories
The proposed model aligns with industry best practices by differentiating fees based on user type:
• Local Nonprofit / Community Organizations: Subsidized rates to support community programming
• Residents / Private Events: Moderate cost recovery
• Non-Resident / Regional Users: Higher cost recovery
• Commercial Events: Market-rate pricing for revenue-generating activities Certain events may be more appropriately managed under a special event or negotiated license agreement. This determination will be made at staff discretion based on their size, impact, and nature.

Proposed Rates
User Category Hourly Half-Day (Up to 5 Hours) Full Day (Up to 10 Hours) Local Nonprofit / Community $100 $450 $800
Resident / Private Event $200 $900 $1,600
Non-Resident / Regional $250 $1,125 $2,000
Commercial / Ticketed Event $350 $1,650 $3,150
This structure provides predictable pricing while incentivizing longer bookings through discounted half-day and full-day rates.

Cost Recovery and Additional Fees
To ensure the City does not subsidize high-impact or resource-intensive events, additional cost recovery measures are recommended:
• Application fee: $150 (non-refundable)
• Security deposit: $300–$500
• Staffing (required): approximately $50 per hour
• Overtime: 1.5 times hourly rate
• Setup/teardown (additional day): 50% of daily rate
• Cleaning: actual cost, with a minimum of $150
• Insurance requirement: $1 million to $2 million coverage These fees are consistent with standard practices across comparable agencies and ensure that operational costs are appropriately recovered.

Optional Pricing Enhancements
To ensure cost recovery and address the increased operational impacts associated with higher attendance levels, the following tiered fee adjustments may be applied:
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Capacity-Based Adjustments
To reflect increased operational impacts:
• 1–50 attendees: base rate
• 51–150 attendees: +25%
• 151–300 attendees: +50%
• 300+ attendees: subject to special event permit and custom pricing Implementation of these adjustments may be phased in the future, following an initial evaluation period to assess usage patterns, operational demands, and cost recovery outcomes.

Commercial Event Pricing
For ticketed or revenue-generating events, the City may consider:
• A base rental fee plus 10–15% of gross revenue, or
• A higher flat fee for ease of administration
Other Key Considerations
In developing the fee structure, staff identified several best practices:
• Ensure staff time and operational costs are fully accounted for • Maintain clear differentiation between user types to promote equity • Provide flexible pricing options (hourly, half-day, full-day) • Capture appropriate value for commercial uses without limiting community access The Parks and Recreation Commission received a presentation on April 22, 2026 and recommends adoption of the proposed tiered fee structure for Carter Park.

CONCLUSION:

Following implementation, staff will:
• Monitor utilization and demand over a 12–18 month period • Evaluate cost recovery performance
• Recommend adjustments to rates as needed based on market conditions and usage patterns
• Explore long-term agreements or permits for recurring events where appropriate The proposed fee schedule positions Carter Park as a mid-tier civic amphitheater with community-first pricing and scalable rates for private and commercial use. This approach balances equitable access, fiscal responsibility, and alignment with regional market conditions, ensuring the long-term sustainability of the facility while supporting community activation.

ATTACHMENTS:

1. Resolution

2. Proposed Fee Schedule
289
RESOLUTION NO. C‐2026-__

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HALF MOON BAY ADOPTING A

TIERED FEE SCHEDULE FOR CARTER PARK
WHEREAS, Carter Park was identified in the City’s adopted Parks Master Plan as an underutilized community space and has since been renovated to accommodate community gatherings, performances, and small- to medium-sized events; and WHEREAS, establishing a clear and equitable fee structure is necessary to guide use of the facility, provide transparent expectations for users, and support ongoing maintenance and operations; and
WHEREAS, a comparative analysis of similar publicly operated outdoor venues throughout the Bay Area, as well as a review of private event pricing within Half Moon Bay, helped inform the recommended fee structure; and
WHEREAS, the proposed tiered fee schedule differentiates user categories to promote equitable access, including local nonprofit organizations, residents, non-residents, and commercial users; and
WHEREAS, additional cost recovery measures, including application fees, security deposits, staffing costs, and insurance requirements, are consistent with industry standards and ensure that high-impact events do not impose undue costs on the City.

NOW, THEREFORE, BE IT RESOLVED THAT the City Council of Half Moon Bay adopts the proposed tiered fee schedule for Carter Park:
***************************************************************** I, the undersigned, hereby certify that the forgoing Resolution was duly passed and adopted on the 19th day of May 2026, by the City Council of Half Moon Bay by the following vote:

AYES, Councilmembers:

NOES, Councilmembers:

ABSENT, Councilmembers:

ABSTAIN, Councilmembers:

ATTEST: APPROVED:

Maggie Rodriguez, Interim City Clerk Debbie Ruddock, Mayor 290
Attachment 2
Proposed Fee Schedule
John L. Carter Park
Amphitheater
Auditorium: 661
User Category Hourly Half Day (up to 5 hours) /
Full Day (up to 10 hours)
Deposit
Local Nonprofit/ Community $100 $450 / $800 $300
Private Event $200 $900 / $1600 $500
Non-resident/ Regional User $250 $1125 / $2000 $500
Commercial / Ticketed event $350 $ 1650 / $ 3150 $500
Proposed Additional Fees
• Application fee: $150 (non-refundable)
• Staffing (required): approximately $50 per hour
• Overtime: 1.5 times hourly rate
• Setup/teardown (additional day): 50% of daily rate
• Cleaning: actual cost, with a minimum of $150
• Insurance requirement: $1 million to $2 million coverage 291

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BUSINESS OF THE COUNCIL OF THE CITY OF HALF MOON BAY

AGENDA REPORT
For meeting of: May 19, 2026
TO: Honorable Mayor and City Council
FROM: Matthew Chidester, City Manager
TITLE: AGREEMENT FOR LAW ENFORCEMENT SERVICES WITH COUNTY OF SAN MATEO SHERIFF’S OFFICE
______________________________________________________________________________ RECOMMENDATION:

Review the updated contract for Sheriff services beginning July 1, 2026, and provide direction on next steps, including any recommended changes for negotiation prior to approval at a future Council meeting.

FISCAL IMPACT:

The updated contract includes a Fiscal Year 2026-27 Budget for Sheriff services of $7,251,351, which represents an increase of 9.1% over the previous fiscal year, mostly due to negotiated increases in personnel wages and support services. The budget is based on estimated costs for services, which historically results in credits back to the city for actual costs at the end of the fiscal year.

STRATEGIC ELEMENT:

This action supports the Healthy Communities and Public Safety and Fiscal Sustainability elements of the Strategic Plan.

OVERVIEW:

On June 7, 2011, the City Council entered into an Agreement with the County of San Mateo (County) to provide law enforcement services and personnel to the City of Half Moon Bay. The initial agreement ran for a five-year period ending June 30, 2016. The original Agreement addressed the complex issues associated with a transfer of City police services to the County Sheriff.

Over the course of the last 15 years, the City has not only realized annual cost savings and long-term savings in retirement/pension related costs but also benefitted from increased efficiencies and services for both City residents. The contract model has provided access to a wider variety of resources which the community and residents of Half Moon Bay have benefitted from. Examples of some of the expanded resources provided by the Sheriff’s Department include, but aren’t limited to, additional resource officers dedicated to community policing efforts, access to the Crime Suppression Unit, a large multi-disciplinary investigations unit, and the Sheriff’s Activity League, which serves the youth of our community with educational, athletic and leadership activities and programs. 292

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The January 23, 2023, mass shooting incident and subsequent investigations served as a tangible example of the benefits of our contractual relationship with the Sheriff and their relationships with the District Attorney, federal law enforcement and other emergency services. The City has received positive feedback from Fire and EMS that communications and related emergency response was seamless during the event and immediate aftermath. Additionally, the Sheriff was instrumental in the successful implementation of the CARES Team program on the Coastside and is now working with the County’s Mobile Crisis Response Team.

BACKGROUND:

The original Agreement has been extended a total of 17 times since its inception. Amendment 17, approved by the City Council on January 21, 2025, increased the annual budget for law enforcement services to $6,269,114 through June 30, 2025. Due to the ongoing leadership turmoil in the Sheriff’s Office at the time, the agreement expired and services have continued under the same terms and conditions. In March 2025 the County provided an updated fee schedule totaling $6,643,773, which was included in the City’s FY 2025-26 Revised Budget. Without an amendment of the contract and Council approval of the increased costs, the City can only pay up to the amount previously approved in the last fiscal year. Fortunately, the actual costs of services, which are reconciled at the end of each fiscal year, have historically been less than the budgeted amount, resulting in a credit of the fees paid in excess. It is unlikely that the actual costs of services for FY 2025-26 will exceed authorized payment amount, and the City and County are focused on the future of the contractual relationship.

DISCUSSION:

In November 2025, the County appointed Kenneth Binder as the new Sheriff, filling the remainder of the term from the previously elected Sheriff. Since that time, the Sheriff’s Office has stabilized, and many of the positions that were vacant have been filled. The County has now provided an updated agreement for the City’s consideration, which would extend Sheriff services to Half Moon Bay for a term of four years beginning July 1, 2026, and expiring on June 30, 2030. The updated contract is generally similar to the previously amended contract, but fully consolidated and simplified. The contract also incorporates several changes including, but not limited to:

1. The detailed response time standard (4-minute response to high priority calls) has been removed – needs discussion

2. CARES program coordination (mental health alternative response with El Centro de Libertad) has been removed - acceptable

3. Mandatory community events (3 per year, Sheriff-led trust-building events) have been removed – needs discussion

4. Additional traffic control during summer/tourist months has been removed – needs discussion

5. The special Events coordinator role (Pumpkin Festival, 4th of July, etc.) has been removed – needs discussion

6. Detailed quarterly reporting requirements (response times, crime trends, arrest stats, timespent analysis) has been reduced to periodic reporting "at City Manager's discretion" – needs discussion
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7. Community satisfaction survey has been removed – needs discussion

8. Semi-annual meetings between Sheriff and City Manager have been removed - acceptable

9. Issuance of licenses/permits (massage establishments, fishing licenses, taxi cabs, etc.) has been removed - acceptable

10. The School Resource Officer (SRO) commitment has been removed – needs discussion

11. Utilities and maintenance responsibilities at the substation have been simplified – needs discussion
In previous Council discussions, there has been a desire to review the contract relationship in more detail, explore changes to better reflect the unique challenges of Half Moon Bay, and negotiate a contract that meets those needs. At this time, with the previous contract expired and the new administration in place, the County desires to enter into a contract beginning in the fiscal year.

Although the proposed contract includes a term of four years, either party may terminate the agreement on twelve months’ notice. This would allow for the City and County to continue the relationship while negotiating changes to the contract. If the City determined that the relationship was no longer in its best interest, or a more preferable option were to become available, the contract could be terminated.

Staff recommends that the Council reviews the attached draft agreement, provides feedback and direction on any minor changes recommended to be negotiated with the Sheriff, and then staff will return with the final agreement for approval prior to the end of the fiscal year.

ATTACHMENT:

Draft law enforcement services agreement between the County of San Mateo and the City of Half Moon Bay dated May 13, 2026
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LAW ENFORCEMENT

SERVICES AGREEMENT
Between the County of San Mateo
and the City of Half Moon Bay
July 1, 2026 through June 30, 2030
Version: May 13, 2026
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A G R E E M E N T

FOR LAW ENFORCEMENT SERVICES BETWEEN THE

COUNTY OF SAN MATEO AND CITY OF HALF MOON BAY
THIS AGREEMENT, entered into on the 1st day of July, 2026, by and between the CITY OF HALF MOON BAY, a general law city in the County of San Mateo, State of California, hereinafter referred to as "City" and the COUNTY OF SAN MATEO, a political subdivision of the State of California, hereinafter referred to as "County.”

W I T N E S S E T H
WHEREAS, pursuant to Government Code §§51300, et seq. County may contract with City for the performance of City functions by the appropriate officers and employees of County; and WHEREAS, City is desirous of having the County provide law enforcement services through the Sheriff's Office, as hereinafter set forth, for and on behalf of City, within the territorial limits of said City, and the County is willing to perform such services as provided herein below:

NOW, THEREFORE, IT IS HEREBY AGREED as follows:

1. EXHIBITS AND ATTACHMENTS.

1.1 The following exhibits and attachments are included hereto and incorporated by reference herein:
▪ Exhibit A – Services
▪ Exhibit B - Rates / Payments

2. SERVICES TO BE PERFORMED BY COUNTY.

2.1 In consideration of the payments set forth herein and in Exhibit B, County shall provide law enforcement and police services within City. Said services are described in Exhibit A.

2.2 The City is not limited to the services identified in Exhibit A, and may request and fund additional services in the field of public safety, law enforcement or related fields within the legal authority of the Sheriff to provide, subject to additional service costs.

3. PAYMENTS.

3.1 The City shall pay the County for the services provided under the terms of this Agreement at the rates set forth in Exhibit B.

3.1.1 At the City’s request, the City will receive a quarterly overtime, salary, and benefits 296
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report that will include year-to-date expenditures for overtime, salary, special pays, and benefits. The report will provide a summary level comparison between the actual expenditures and budgeted amounts based on the costs for personnel outlined in the adopted Exhibit B.

3.1.2 An annual reconciliation will be completed at the end of each fiscal year wherein the Sheriff’s Office will reconcile the amount in this Agreement against the actual cost of services delivered. Any surplus funds will be set aside in an interestearning account held by the County and available to the City to cover potential future deficits or other one-time needs. However, if this excess revenue exceeds $1M, the balance exceeding $1M will be returned to the City at year-end for the City to utilize at its discretion.

3.2 The rates set forth in Exhibit B shall be readjusted by the County annually effective July 1 st of each year, and attached as an Amendment to this Agreement, to reflect the cost of such services as provided in Government Code Section 51350 and in accordance with the policies and procedures for the determination of such rates as approved by the County Board of Supervisors. County shall provide City with the proposed rates for the following contract year on or before April 1 of each year.

3.3 The City shall be billed based on the service level provided within the parameters of Exhibit A.

3.4 The cost of additional services, requested by City, in the field of public safety, law or related fields within the legal authority of the Sheriff to provide not set forth in Exhibit A shall be reflected in an amendment to Exhibits A and B.

3.5 Retirement – Unfunded Actuarial Accrued Liabilities.

3.5.1 Retirement rates reflected in Exhibit B are calculated using the County’s employer rate, consisting of a normal cost component and an amortization component for the Unfunded Actuarial Accrued Liability (UAAL). Upon annual receipt of City’s CALPERS Actuarial Valuation for the Safety Plan documenting the City’s annual UAAL cost for Police Only, and subject to Section 3.5.2, County will credit subsequent quarterly invoices in the amount due from City to CalPERS for UAAL payments made on behalf of the Safety members from prior law enforcement service.

3.5.2 Under no circumstances will this credit exceed County's Total UAAL attributed to the Half Moon Bay Agreement or result in City’s obligation for retirement costs to County being below the County’s normal cost as reflected in the annual actuarial valuation provided by SamCERA.

3.5.3 It is City’s responsibility to provide County with an official CalPERS report detailing the amount of UAAL for Police Only. The credit will not include any amounts paid for other Safety members including Fire or non-Safety members.

3.5.4 In determining the threshold for normal cost, if County does not receive its annual SamCERA actuarial report prior to the first invoice, normal cost will be calculated using the prior year’s SamCERA actuarial report until the new report is received.

The invoice immediately following receipt of the SamCERA report will reflect a retroactive adjustment due to the change in normal cost, when such change results in a reduction or addition to City liability to County.

3.5.5 City must provide County with proof of payment by July 31st of each year. If 297
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payment made to CalPERS for purposes identified in 3.5.1 is less than the applied credit, City will be billed for the difference. If payment made to CalPERS for purposes identified in 3.5.1 is higher than the credit received, City will receive a retroactive adjustment subject to section 3.5.2 on the first invoice immediately following receipt of proof of such payment.

3.5.6 City will receive a credit that is based on the amortization of side fund payment and other UAAL contributions identified in future valuations for police subject to limitations identified in section 3.5.2. This credit will be adjusted annually to reflect actual payments.

3.5.7 Proof of payment shall be a copy of canceled check in addition to any documentation sent to CalPERS with the payment.

4. TERM.

4.1 This Agreement shall be in full force and effect from: JULY 1, 2026 to JUNE 30, 2030.

4.2 City shall notify County by each January 1
st of its desire for the Sheriff’s Office to continue
to provide law enforcement services for and on behalf of City within the territorial limits of City, and the parties shall thereafter endeavor to reach a mutual agreement for said law enforcement services to take effect upon expiration of this Agreement.

5. RIGHT OF TERMINATION.

5.1 Either party may terminate this Agreement with or without cause effective as of the first day of July of the following year upon written notice to the other party of not less than twelve (12) months prior thereto.

5.2 In the event of termination, each party shall fully discharge all obligations owed to the other party accruing prior to the effective date of such termination, and, except as otherwise provided herein, each party shall be released from all obligations which would otherwise accrue subsequent to the date of termination.

5.3 The City may terminate this Agreement or a portion of the services referenced in the Exhibits based upon City’s unavailability of funds, by providing written notice to County as soon as is reasonably possible after the City learns of said unavailability of funding.

5.4 If City terminates for non-appropriation, it will be liable to pay County for: (1) the portion of the contract costs attributable to all services performed, on or before the effective date of the termination; and (2) reasonable costs and expenses that County incurs as a result of early termination of the Agreement.

6. HOLD HARMLESS.

6.1 City shall defend, hold harmless and indemnify County, its officers, agents, and/or employees from any and all claims for injuries to persons and/or damage to property which arise out of the terms and conditions of this Agreement and which result from the negligent acts or omissions of City, its officers, agents and/or employees.

6.2 County shall defend, hold harmless and indemnify City, its officers, agents and/or employees from any and all claims for injuries to persons and/or damage to property which arise out of the terms and conditions of this Agreement and which result from the negligent 298
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acts or omissions of County, its officers, agents, and/or employees.

6.3 In the event of the concurrent negligence of City, its officers, agents and/or employees, and County, its officers, agents and/or employees, then the liability for any and all claims for injuries or damages which arise out of the terms and conditions of this Agreement shall be apportioned under California’s Theory of Comparative negligence as presently established or may be hereafter modified.

7. INSURANCE.

7.1 Both parties shall maintain sufficient insurance, self-insurance or a combination thereof to comply with the following requirements, and, if requested, each party shall furnish the other party with certificates of insurance evidencing the required coverage. Thirty (30) days' notice must be given, in writing, to County of any pending change in the limits of liability or of any cancellation or modification of the policy.

7.1.1 Worker's Compensation and Employer's Liability Insurance. Both parties shall have in effect during the entire life of this Agreement Worker’s Compensation and Employer's Liability Insurance, or an acceptable program of self-insurance providing full statutory coverage. In signing this Agreement, parties certify, as required by Section 1861 of the California Labor Code, that they are aware of the provisions of Section 3700 of the California Labor Code which requires every employer to be insured against liability for Worker's Compensation or to undertake self-insurance in accordance with the provisions of the Code, and parties will comply with such provisions before commencing the performance of the work of this Agreement.

7.1.2 Liability Insurance. City and County shall take out and maintain during the life of this Agreement such Bodily Injury Liability and Property Damage Liability Insurance for services covered by this Agreement from any and all claims for damages for bodily injury, including accidental death, as well as any and all claims for property damage which may arise from City’s and County’s operations under this Agreement, whether such operations be by himself/herself or by any sub-contractor or by anyone directly or indirectly employed by either of them. Such insurance shall be combined single limit bodily injury and property damage for each occurrence and shall be not less than the amount specified below.

Such insurance shall include:
 Comprehensive General Liability $5,000,000
 Motor Vehicle Liability Insurance $5,000,000

8. NON-DISCRIMINATION AND OTHER REQUIREMENTS.

8.1 Section 504. City and County shall comply with § 504 of the Rehabilitation Act of 1973, and the Americans with Disabilities Act of 1990, as amended, which provide that no otherwise qualified handicapped individual shall, solely by reason of a disability, be excluded from the participation in, be denied the benefits of, or be subjected to 299
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discrimination in the performance of this Agreement, and that reasonable and legallyspecified accommodations will be made to serve individuals with disabilities.

8.2 General Non-discrimination. No person shall, on the grounds of race, color, religion, ancestry, gender, age (over 40), national origin, medical condition (cancer), physical or mental disability, sexual orientation, pregnancy, childbirth or related medical condition, marital status, or political affiliation be denied any benefits or subject to discrimination under this Agreement.

8.3 Equal Employment Opportunity. City and County shall ensure equal employment opportunity based on objective standards of recruitment, classification, selection, promotion, compensation, performance evaluation, and management relations for all employees under this Agreement. City’s and County’s equal employment policies shall be made available to either party upon request.

8.4 Violation of Non-discrimination Provisions. Violation of the non-discrimination provisions of this Agreement shall be considered a breach of this Agreement and may result in termination of this Agreement, and /or legal action to recover any Court-imposed damages incurred as a result of said violation(s). To effectuate the provisions of this section, the County Manager and City Manager may request authorization to examine City’s or County’s employment records relating to this Agreement, as the case may be with respect to compliance with this paragraph, and City and County shall not unduly withhold authorization.

8.5 Compliance with Equal Benefits Ordinance. With respect to the provision of employee benefits, City shall comply with the County Ordinance which prohibits contractors from discriminating in the provision of employee benefits between an employee with a domestic partner and an employee with a spouse.

8.6 Other Statutory Compliance. City and County shall comply fully with the nondiscrimination requirements required by 41 CFR 60-741.5 (a), which is incorporated herein as if fully, set forth. All services to be performed pursuant to this Agreement shall be performed in accordance with all applicable Federal, State, County, and municipal laws, including, but not limited to, Health Insurance Portability and Accountability Act of 1996 (HIPAA) and all Federal regulations promulgated thereunder, as amended.

8.7 Compliance with Contractor Employee Jury Service Ordinance. City and County shall comply with the County Ordinance with respect to provision of jury duty pay to employees and have and adhere to a written policy that provides that its employees shall receive from the City, on an annual basis, no less than five days of regular pay for actual jury service in San Mateo County. The policy may provide that employees deposit any fees received for such jury service with the City or that the City deduct from the employees regular pay the fees received for jury service.

9. RETENTION OF RECORDS.

9.1 Each party agrees to provide to the other party, to any federal or state department having monitoring or reviewing authority, to County’s or City’s authorized representatives and/or their appropriate audit agencies upon reasonable notice, access to and the right to examine and audit records and documents necessary to determine compliance with relevant federal, state, and local statutes, rules, and regulations, and this Agreement, and to evaluate the quality, appropriateness and timeliness of services performed.

9.2 City and County shall maintain and preserve all financial records relating to this 300
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Agreement for a period of four (4) years from the termination date of this Agreement, or until audit findings are resolved, whichever is greater.

10. MERGER CLAUSE.

10.1 This Agreement and the Transfer Agreement including the Exhibits attached to each constitutes the sole Agreement of the parties hereto and correctly states the rights, duties, and obligations of each party as of this document's date. Any prior agreement, promises, negotiations, or representations between the parties not expressly stated in this document are not binding. All subsequent modifications to either Agreement shall be in writing and signed by the parties.

11. CONTROLLING LAW.

11.1 The validity of this Agreement and of its terms or provisions, as well as the rights and duties of the parties hereunder, the interpretation, and performance of this Agreement shall be governed by the laws of the State of California.

12. DISPUTE RESOLUTION.

12.1 Should any dispute arise out of this Agreement, the parties shall first meet and confer in an attempt to resolve the dispute. Should such efforts fail to resolve the dispute within twenty (20) days, the parties shall meet in mediation and attempt to reach a resolution with the assistance of a mutually acceptable mediator. Neither party shall file legal action without first meeting in mediation and making a good faith attempt to reach a mediated resolution. The costs of the mediator, if any, shall be paid equally by the parties. If a mediated settlement is reached neither party shall be deemed the prevailing party for purposes of the settlement and each party shall bear its own legal costs.

13.FINES AND FORFEITURES.

13.1 City shall be entitled to the fines and forfeitures to which City would otherwise be entitled pursuant to Penal Code Section 1463.001, et seq.

13.2 As legally permitted and in compliance with federal, state, and local rules and regulations, City shall remain entitled to the following revenue during the duration of this agreement:
• Abandoned Vehicle Recovery
• First Chance Fee
• SB 90 Reimbursements
• Drunk Driving Cost Recovery
• Vehicle Release Fee
• Accident Reports Fee
• Crime Reports
• Good Conduct Letter
• Incident Photos
• Repo Vehicle Info Entering Fee

13.3 Unless otherwise specified in this agreement, City shall remain responsible for the billing and collection of these fees. Information obtained by County that is required by City to complete the billing will be forwarded upon the request of City. 301
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13.4 Collection of Fees.

13.4.1 Any fees collected at 330 Bradford Street by the County on City’s behalf will be collected in accordance with City’s fee schedule and shall be credited to the City’s interest-bearing account.

13.4.2 Any fees collected on behalf of the County at the Half Moon Bay Substation will be collected in accordance with the County’s fee schedule and forwarded to County in a manner that is mutually agreed upon.

13.4.3 City will provide and maintain currency drawers. The assigned Records Technician will balance the currency drawer as required by the City.

13.5 POST Reimbursements. City shall be credited for all POST reimbursements received by County for backfill of City’s assigned deputies. All other POST reimbursements will remain revenue of County.

13.6 Third Party Providers. For any costs currently charged to the Half Moon Bay Police Department, directly or indirectly, by third party providers other than the Sheriff’s Office, the City reserves the right to either recover directly, or with the County’s agreement, have those costs recovered by the County and credited against the Agreement for Law Enforcement Services with County.

14.NOTICES.

14.1 Any notice, request, demand, or other communication required or permitted hereunder shall be deemed to be properly given when deposited in the United State mail, postage prepaid, or when deposited with a public telegraph company for transmittal, charges prepaid, and addressed to:

In the case of County, to:

San Mateo County Sheriff’s Office
ATTN: Sheriff
330 Bradford Street, 5th Floor
Redwood City, CA 94063
In the case of City, to:

City of Half Moon Bay
ATTN: City Manager
501 Main St
Half Moon Bay, CA 94019
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IN WITNESS WHEREOF, the parties hereto, by their duly authorized representatives, have affixed their hands.

COUNTY OF SAN MATEO
A Political Sub-division of the
State of California
BY:

President, Board of Supervisors
DATE:

ATTEST:

BY:

Clerk of Said Board

CITY OF HALF MOON BAY
BY:

City Manager
DATE:

ATTEST:

BY:

City Clerk
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EXHIBIT A

SERVICES
Agreement for Law Enforcement Services between the
County of San Mateo and City of Half Moon Bay
In consideration of the payments set forth in Exhibit B, County shall provide City with the following services:

1. DESCRIPTION OF SERVICES PROVIDED BY COUNTY.

1.1 LAW ENFORCEMENT SERVICES.

1.1.1 The County agrees, through the Sheriff of the County of San Mateo (hereinafter referred to as “Sheriff”), to provide general law enforcement services within the corporate limits of the City to the extent and in the manner hereinafter set forth in this Agreement.

1.1.2 Except as otherwise specifically set forth in this Agreement, such services shall only encompass duties and functions of the type coming within the jurisdiction of and customarily rendered by the Sheriff under the County Charter, the statutes of the State of California, and under the City municipal codes.

1.1.3 General law enforcement services performed hereunder may include, if requested by the City, supplemental security support, supplemental sworn officer support, and supplemental professional civilian support staff.

1.2 SUPPORT SERVICES.

1.2.1 Administrative staff provided to City, as outlined in Exhibit A, will provide general administrative support and will perform the services necessary for the collection of Abandoned Vehicle Recovery Fees and Alarms Permits & Response Fees.

1.2.2 Alarm Permit & Response Fees. City shall remain responsible for the actual billing and collection of Alarms Permit and Response revenue. Administrative staff will maintain and forward the necessary information to City’s Finance Department for the billing and collection of said revenue upon request of City.

1.2.3 Records Fees. County’s Sheriff’s Records Bureau will perform the services necessary and collect fees on behalf of City for the following:
• Vehicle Release Fee
• Accident Reports
• Crime Reports
• Good Conduct Letter

2. ADMINISTRATION OF PERSONNEL.

2.1 The rendition of the services performed by the Sheriff’s Office, the standards of performance, the discipline of personnel, and other matters incident to the performance of such services and the control of personnel so employed shall remain with the County.

2.2 In the event of a dispute between the parties to this Agreement as to the extent of the duties and functions to be rendered hereunder, or level of services or manner of performance of such services, the Sheriff and the City shall meet and confer to resolve such disputes.

2.3 All City employees who work in conjunction with the Sheriff’s Office pursuant to this Agreement shall remain employees of the City and shall not have any claim or right to 304
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employment, civil service protection, salary, or benefits or claims of any kind from the County based on this Agreement.

2.4 The City shall not be called upon to assume any liability for the direct payment of any Sheriff’s Office salaries, wages, or other compensation to any County personnel performing services hereunder for said City. Except as herein otherwise specified, the City shall not be liable for compensation or indemnity to any County employee or agent of the County for injury, disability or illness arising out of services provided under this Agreement.

3. DEPLOYMENT OF PERSONNEL.

3.1 Services performed hereunder shall be developed in conjunction with the Sheriff and detailed in Exhibit A, Section 8 - Assignment / Selection of Personnel.

4. REPORTS.

4.1 The Sheriff or Sheriff’s designee shall report periodically to the City Council, at the City Manager’s discretion, all violations of law within its borders coming to the Sheriff’s attention.

Quarterly statistical reports will be provided to City by the Sheriff upon request.

5. UNIFORMS & INSIGNIA.

5.1 Personnel performing such law enforcement services as herein provided shall be in the prescribed uniform of the San Mateo County Sheriff’s Office during the performance of their duties.

5.2 Similarly, patrol vehicles used by deputies assigned to provision of services under this Agreement shall bear the markings and insignia of both the Sheriff’s Office and City’s logo.

Any future changes to the markings and insignia of the Half Moon Bay Bureau vehicles may be made by mutual agreement of the Sheriff and the City Manager.

5.3 If the City should desire any customization of uniforms or insignia relative to services provided, the City shall notify Sheriff of same, and the Sheriff in their sole discretion may decide whether it is feasible and agreeable to do so. In that case, the cost of modification to uniforms and/or insignia shall be borne by the City.

6. CITY OBLIGATIONS.

6.1 City shall furnish at its own cost and expense all necessary office space, furniture and furnishings, office supplies, janitorial service, telephone, light, water and other utilities, in order for the Sheriff to maintain a substation office in the City. The area to be utilized for the substation is located at 501 Main St in Half Moon Bay.

6.2 It is expressly further understood that such areas may be used by the Sheriff or the County of San Mateo in connection with the performance of duties in territory outside of City and adjacent thereto.

6.3 Notwithstanding the foregoing, it is agreed that in all instances where special supplies, stationery, notices, forms, and the like must be issued in the name of City, the same shall be supplied by said City at its own cost and expense.

7. PERFORMANCE OF AGREEMENT.

7.1 For the purpose of performing said general law enforcement services, County shall furnish and supply all necessary labor, supervision, equipment and supplies necessary to maintain the agreed level of services to be rendered hereunder.

7.2 Notwithstanding the foregoing, the City may provide additional resources for the County to 305
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utilize in performance of the services.

8. ASSIGNMENT/SELECTION OF PERSONNEL.

8.1 Assigned Personnel.

POSITION # of FTE
Captain 0.75
Sergeants 2.00
Deputies 9.00
Community Service Officers (1 FT) 1.00
Administrative Assistant 0.50
Records Technician 1.00
TOTAL # (FTE) 14.25

9. ASSIGNMENT OF SPECIFIC PERSONNEL.

9.1 In the event that the position of Captain assigned to the City (via this Agreement) needs to be filled, the Sheriff will provide City with up to three (3) candidates for consideration, contingent upon availability and vacancies in the Captain classification. City Manager shall select one of the three candidates.

9.2 The City Manager may request reassignment of personnel assigned to the City at any time.

The Sheriff and City Manager shall meet and confer regarding the request within ten (10) days.
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EXHIBIT B

RATES / PAYMENTS
Agreement for Law Enforcement Services between the County of San Mateo and City of Half Moon Bay In consideration of the services described in Exhibit A, City shall pay County based on the following fee schedule:

1. CHARGES FOR SERVICES.

1.1 City shall pay County for services described in this Agreement as calculated based on the formulas set forth in Section 6, Calculated Rates, attached hereto and incorporated by reference herein.

1.2 Section 6, Calculated Rates, shall be readjusted by the County annually effective July 1 of each year and attached hereto as an updated / revised Section 6.

2. INVOICING / BILLING.

2.1 On a quarterly basis in accordance with Section 3 below, Sheriff’s Office Fiscal Services Bureau shall submit an invoice to the City. At the end of each fiscal year, the Sheriff’s Office will reconcile the amount in this Agreement against the actual cost of services delivered.

Any surplus funds will be set aside in an interest-earning account held by the County and available to the City to cover potential future deficits or other one-time needs. However, if this excess revenue exceeds $1M, the balance exceeding $1M will be returned to the City at year-end for the City to utilize at its discretion.

2.2 Payments and questions regarding invoicing shall be directed to the Sheriff’s Office Fiscal - Invoicing at [email protected] or be mailed to:

San Mateo County Sheriff’s Office
Fiscal Services Bureau
330 Bradford Street, 5th floor
Redwood City, CA 94063

3. PAYMENTS.

3.1 Total charges due for the period of July 1, 2026 through June 30, 2027 are $7,251,351.

Invoices will be issued according to the following schedule:

Invoice Issued Amount
July 1, 2026 $1,812,837.75
October 1, 2026 $1,812,837.75
January 1, 2027 $1,812,837.75
April 1, 2027 $1,812,837.75
NOTE: UAAL credits are not reflected in the above amounts.

3.2 Future Fiscal Year payments will be in accordance with the revised Calculated Rates effective July 1 of each year. Payments will be due the first day of each quarter for each subsequent year of this Agreement.

4. BOOKING / MESSAGE SWITCH/ FORENSIC LABORATORY FEES.
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4.1 City shall not be responsible for paying Jail Access Fees, Booking Fees, Message Switch Fees, or Forensic Laboratory Fees to the County.

5. JOINT POWERS AGREEMENTS.

5.1 City shall continue to be responsible for fees set forth in the Joint Powers Agreements pertaining to the Narcotics Task Force (NTF) Department of Emergency Management (DEM).

6. CALCULATED RATES.

6.1 Rates for FY 2026-27 are outlined below.
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Rev. 3/2022 1
Caterpillar: Confidential Green
Solicitation Number: RFP # 011723