Indio City Council
September 18, 2023

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Item City Fund Property Monthly Price
CF43 Alberta Avenue Median $ 89.00
CF44 Fred Waring Drive Medians at HPCC $ 316.00
CF45 Coachella Valley History Museum/Archive $ 423.00
CF46 Chamber of Commerce $ 461.00
CF47 Emergency Operations Center (EOC) $ 43.00
CF48 Old Church Lot $ 533.00
CF49 Phase II Downtown Bliss Avenue/Wilson Avenue $ 81.00 CF50 Transportation Center $1,041.00
CF51 Old Hotel Indio Site $ 267.00
CFS2 45280 King Street Parking Lot $ 277.00
CF53 Museum Parking Lot/King Street $ 923.00
CFS4 82672 Miles Avenue Parking Lot $ 260.00
CFSS Wal-Mart Retention Basin $1,770.00
CF56 Turf Lot Monroe Street /John Nobles Avenue $ 310.00 CFS7 Armory $ 745.00
CFS8 Berger Building $ 810.00
CF59 Old Verizon Building $ 210.00
CF60 Applebee's Parking Lot $ 998.00
CF61 Golf Center Parkway $ 275.00
CF62 Old Town Parking Lot $ 283.00
CF63 Old Ralphs Parking Lot $1,469.00
CF64 lot at 45190 Oasis St $ 245.00
CF65 Farmer's Market Area (45225-45285 Towne St) $ 400.00 CF66 Parking Lot at 45125 &45149 Smurr St $ 91.00
CF67 Alamo Lot $ 187.00
CF68 Miles and Smurr Lot $ 279.00
CF69 Oasis and Bliss Lot $ 476.00
CF70 Cactus Lot $ 134.00
City Fund Property Landscape Maintenance Pricing Form
Annual Price
$ 1,068.00
$3,792.00
$5,076.00
$5,532.00
$ 516.00
$6,396.00
$ 972.00
$12,492.00
$ 3,204.00
$3,324.00
$11,076.00
$3,120.00
$21,240.00
$3,720.00
$8,940.00
$9,720.00
$2,520.00
$11,976.00
$ 3,300.00
$3,396.00
$17,628.00
$2,940.00
$4,800.00
$1,092.00
$2,244.00
$3,348.00
$5,712.00
$1,608.00

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 681 of 1306 Line
Item City Fund Property Monthly Price Annual Price
._·,,:--::.
·�tf.t:<"� '� ..
t •• , TOTAL $72,077.00 $864,924.00
Total Annual Price:$ $864,924.
00 Total Annual Price in words: Eight Hundred Sixty Four Thousand, Nine Hundred Twenty Four Dollars
Title:�lw/ Date: �>3
City Fund Property Landscape Maintenance Pricing Form Page I 4

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 682 of 1306 City Fund Property Additional Services Pricing Form

ADDITIONAL WORK PRICING SCHEDULE

AMOUNTS NOT TO BE INCLUDED IN BASE PRICE
City Project Number: LM-CITYFUND
LABOR
Additional Laborer $ 45.00 per hour
Additional lrrigator s 60.00 per hour
Additional Foreman s 75.00 per hour
At City's discretion, additional work may be paid for using the contractual hourly rate for labor listed above with a 15% mark up on materials or by using the unit pricing listed below.

PLANT MATERIAL REPLACEMENT
Unless otherwise described, replacement plant material will be whatever is normal and customary for the City of Indio.
1-Gallon Shrub Installed $ 17.00
5-Gallon Shrub Installed $ 45.00
15-Gallon Tree Installed* $ 145.00
24"-Box Tree Installed* $ 475.00
Note: Anything over 24" box size will be paid at the contractual hourly rate for labor, and materials at cost plus a 15% mark-up.
*Includes the following: digging of hole, setting of tree, backfilling, watering-in of tree, staking (if needed}, and securing with cinch ties

TURF MAINTENANCE
Mowing: Labor & Equipment
Turf Renovation (no seed): Labor & Equipment

IRRIGATION SYSTEM REPAIR
S 14.75
$ 14.75
per 1,000 sq. ft.
per 1,000 sq. ft.

Non-contractual irrigation repairs will be paid at the hourly rate indicated above and with a 15% mark-up on materials.

City Fund Property Additional Services Pricing Form Pag e 11

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ADDITIONAL WORK COMPENSATION

AMOUNTS NOT TO BE INCLUDED IN BASE PRICE
City Project Number: LM-CITYFUND
The City may authorize the Contractor to provide additional as-needed services at City Fund Properties up to a total amount of $300,000 per fiscal year.

A breakdown of compensation by Fiscal Year is as follows:

Base Price Add’l as Needed Work Total
FY23/24 (10/1 – 6/30) $648,693 $300,000 $848,693
FY24/25 $864,924 $300,000 $1,164,924
FY25/26 $864,924 $300,000 $1,164,924
FY26/27 $864,924 $300,000 $1,164,924
FY27/28 $864,924 $300,000 $1,164,924
Total Amount: $5,508,389

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 684 of 1306 City Project No. LMCITYFUND City of Indio

EXHIBIT C

TIME OF PERFORMANCE

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City Fund Properties Time of Performance
City Project Number: LM-CITYFUND
This Agreement shall remain and continue in effect for a period of twelve (12) months, unless sooner terminated by the City. The City may extend the Agreement for four (4) additional 12- month periods.

This Agreement shall commence on October 1, 2023 and the initial 12 month period ends on September 30, 2024.

The City may extend the Agreement for four (4) additional 12 month periods. 1st Extension: October 1, 2024 to September 30, 2025
2nd Extension: October 1, 2025 to September 30, 2026
3rd Extension: October 1, 2026 to September 30, 2027
4th Extension: October 1, 2027 to September 30, 2028

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 686 of 1306 ATTACHMENT 2
Contract for Landscape and
Lighting District Properties

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 687 of 1306 1 City Project Number: LMLLD City of Indio

AGREEMENT FOR PROFESSIONAL SERVICES
Landscape Maintenance Services – City Fund
LMLLD
THIS AGREEMENT is made and entered into on this 18th day of September 2023, by and between the City of Indio, a California municipal Corporation (“City”) and Conserve LandCare, LLC (“Contractor”). Contractor’s California State License Number is 1073122; Class A, B, & C27.

RECITALS
A. City issued a Request for Proposals (“RFP”) for Landscape Maintenance Services for the City Fund Properties, on June 22, 2023. Contractor submitted a proposal dated July 27, 2023 in response to the RFP.

B. Contractor represents that it is qualified by virtue of experience, training, education and expertise to provide these services and is able to perform the Scope of Work.

NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties agree as follows:

Section 1. Contractor’s Scope of Work. Contractor shall perform the Scope of Work described in Exhibit A ("Scope of Work"), attached to this Agreement and incorporated by this reference as though set forth in full, in a manner satisfactory to City and consistent with that level of care and skill ordinarily exercised by members of the profession currently practicing in the same locality under similar conditions.

Section 2. Term of Agreement. This Agreement shall commence on October 1, 2023, contingent upon approval by the City Council, and the Contractor shall commence work after a written notice to proceed is issued by the City’s Contract Manager. This Agreement shall remain and continue in effect for a period of 12 months, unless sooner terminated by the City.

The City may extend the Agreement for four (4) additional 12-month periods.

Section 3. Time of Performance. Contractor shall complete all services required hereunder as and when directed by City as set forth in Exhibit C ("Time of Performance"). City, however, in its sole discretion may extend the time for performance of any services.

Notwithstanding any other provisions of this Agreement, the Contractor shall not have liability for or be deemed in breach because of delays caused by any factor outside of its reasonable control, including but not limited to natural disasters, adverse weather, epidemics, pandemics (including COVID 19), or acts of the Client, third parties, or governmental agencies.

Section 4. Compensation.
(a) The method of payment for the services provided under this Agreement shall be by month. City agrees to compensate Contractor, and Contractor agrees to accept in full satisfaction for the services required by this Agreement, sixty-five thousand, six dollars per month, as more particularly described in Exhibit B (“Consideration”). Said Consideration shall constitute reimbursement of Contactor’s fee for the services as well as the actual cost of any staff time, other direct or indirect costs or fees, including the work of employees, Contractors and subcontractors, equipment, materials, and supplies necessary to provide the service (including all labor, materials, delivery, tax, assembly, and installation, as applicable).

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(b) Unless expressly provided for in Exhibit B, Contractor shall not be entitled to reimbursement for any expenses. Any expenses incurred by Contractor which are not expressly authorized by this Agreement will not be reimbursed by City. (c) In the case of a change in the scope of work or scope of the project, such change may be requested by the City pursuant to an amendment to this Agreement. Compensation for any such amendment shall be negotiated between the parties and the adjustment in the specified rates of compensation shall not be effective until authorized by an amendment to this Agreement, which is thereafter approved by the City Council and issued by the City’s Contract Manager. (d) Any work incurred by Contractor which is not expressly authorized by this Agreement or any amendment to the Agreement will not be reimbursed by City. In addition, any work incurred by Contractor prior to receipt of the written notice to proceed shall not be compensated.

Section 5. Method of Payment
(a) The method of payment for this contract will be based on lump sum. The total lump sum price paid to Contractor will include compensation for all work and deliverables, including travel and equipment described in Statement of Work of this contract. No additional compensation will be paid to Contractor, unless there is a change in the scope of the work or the scope of the project. In the instance of a change in the scope of work or scope of the project, adjustment to the total lump sum compensation will be negotiated between Contractor and the City. Adjustment in the total lump sum compensation will not be effective until authorized by contract amendment and approved by the City.
(b) Progress payments may be made monthly in arrears based on the percentage of work completed by Contractor. If Contractor fails to submit the required deliverable items according to the schedule set forth in the Statement of Work, the City shall have the right to delay payment or terminate this Contract in accordance with the provisions of Section 14 Termination. (c) Contractor shall not commence performance of work or services until this contract has been approved by the City and notification to proceed has been issued by the City’s Contract Administrator. No payment will be made prior to approval of any work, or for any work performed prior to approval of this contract.
(d) Contractor will be reimbursed, as promptly as fiscal procedures will permit, upon receipt by the City’s Contract Administrator of itemized invoices in triplicate. Invoices shall be submitted no later than 45 calendar days after the performance of work for which Contractor is billing. Invoices shall detail the work performed on each milestone, on each project as applicable.

Invoices shall follow the format stipulated for the Cost Proposal and shall reference this contract number and project title. Final invoice must contain the final cost and all credits due to the City that include any equipment purchased under the provisions of Section 28 Equipment Purchase and Capital Expenditures of this contract. The final invoice should be submitted within 60-calendar days after completion of Contractor’s work. Invoices shall be mailed to the City’s Contract Administrator at the following address:

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Parks & Facilities
83101 Avenue 45
Indio, California 92201
Invoices may also be sent electronically to the City’s Responsible Principal and/or his designee. (e) The total amount of work authorized by the City shall not exceed the total amount described in Exhibit B.

Section 6. Independent Contractor. The parties agree, understand and acknowledge that Contractor is not an employee of the City, but is solely an independent Contractor. Contractor expressly acknowledges and agrees that City has no obligation to pay or withhold state or federal taxes or to provide workers’ compensation or unemployment insurance or other employee benefits and that any person employed by Contractor shall not be in any way an employee of the City. As such, Contractor shall have the sole legal responsibility to remit all federal and state income and social security taxes and to provide for his/her own workers compensation and unemployment insurance and that of his/her employees or subcontractors.

Neither City nor any of its agents shall have control over the conduct of Contractor or any of Contractor’s employees, except as otherwise provided herein. Contractor shall not, at any time, or in any manner, represent that it or any of its agents or employees are in any manner agents or employees of City.

Section 7. Assignment. This Agreement shall not be assigned in whole or in part, by Contractor without the prior written approval of City. Any attempt by Contractor to so assign this Agreement or any rights, duties or obligations arising hereunder shall be void and of no effect.

Section 8. Responsible Principal(s).
(a) Contractor’s responsible principal, David White, shall be principally responsible for Contractor’s obligations under this Agreement and shall serve as principal liaison between City and Contractor and shall be referred to as the Project Manager. There shall be no change in Contractor’s Project Manager or key members of the project team as listed in Exhibit A without prior written consent of City.
(b) City’s responsible principal shall be Timothy T. Wassil, PE, Director of Public Works, who shall administer the terms of the Agreement on behalf of City and shall be referred to herein as the Contract Manager.

Section 9. Personnel. Contractor represents that it has, or shall secure at its own expense, all personnel required to perform Contractor’s Scope of Work under this Agreement. All personnel engaged in the work shall be qualified to perform such Scope of Work.

Section 10. Permits and Licenses. Contractor shall obtain and maintain during the Agreement term all necessary licenses, permits and certificates required by law for the provision of services under this Agreement, including a business license.

Section 11. Compliance with Law. Contractor shall comply with all applicable laws, ordinances, codes and regulations of the federal, state and local government applicable to the scope of services under this Agreement.

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Section 12. Insurance.
(a) Contractor shall at all times during the term of this Agreement carry, maintain, and keep in full force and effect, insurance as follows:
(1) A policy or policies of Comprehensive General Liability Insurance, with minimum limits of One Million Dollars ($1,000,000) for each occurrence and Two Million Dollars ($2,000,000) general aggregate, against any personal injury, death, loss or damage resulting from the wrongful or negligent acts by Contractor.
(2) A policy or policies of Comprehensive Vehicle Liability Insurance covering personal injury and property damage, with minimum limits of One Million Dollars ($1,000,000) per occurrence combined single limit, covering any vehicle utilized by Contractor in performing the Scope of Work required by this Agreement. The insurance policy shall contain a severability of interest clause providing that the coverage shall be primary for losses arising out of Contractor's performance hereunder and neither City nor its insurers shall be required to contribute to any such loss.
(3) Workers' compensation insurance as required by the State of California. (4) If this box is checked, a policy or policies of Professional Liability Insurance (errors and omissions) with minimum limits of One Million Dollars ($1,000,000) per claim and in the aggregate. Any deductibles or self-insured retentions attached to such policy or policies must be declared to and be approved by City. Further, Contractor agrees to maintain in full force and affect such insurance for one year after performance of work under this Agreement is completed. (b) Contractor shall require each of its subcontractors, if any, to maintain insurance coverage which meets all of the requirements of this Agreement. (c) The City’s Risk Manager may, in writing, amend and/or waive the insurance provisions set forth in paragraph (a) herein. In such case, the Contractor shall comply with the insurance provisions required by the City’s Risk Manager. (d) The policy or polices required by this Agreement shall be issued by an insurer admitted in the State of California and with a rating of at least a A-:VI in the latest edition of Best's Insurance Guide or by an insurer acceptable to the City’s Risk Manager. (e) Contractor agrees that if it does not keep the aforesaid insurance in full force and effect City may either immediately terminate this Agreement or, if insurance is available at a reasonable cost, City may take out the necessary insurance and pay, at Contractor's expense, the premium thereon.
(f) At all times during the term of this Agreement, Contractor shall maintain on file with the City Clerk a certificate or certificates of insurance on the form approved by the City’s Risk Manager, showing that the aforesaid policies are in effect in the required amounts. Contractor shall, prior to commencement of work under this Agreement, file with the City Clerk such certificate or certificates. The general liability insurance and vehicle insurance shall contain an endorsement naming the City as an additional insured. All of the policies required under this Agreement shall contain an endorsement providing that the policies cannot be canceled or reduced except on thirty (30) days prior written notice to City, and specifically stating that the coverage contained in the policies affords insurance pursuant to the terms and conditions as set forth in this Agreement.

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(g) The insurance provided by Contractor shall be primary to any coverage available to City. The policies of insurance required by this Agreement shall include provisions for waiver of subrogation.
(h) Any deductibles or self-insured retentions must be declared to and approved by City. At the option of City, Contractor shall either reduce or eliminate the deductibles or selfinsured retentions with respect to City, or Contractor shall procure a bond guaranteeing payment of losses and expenses.

Section 13. Indemnity.
(a) Indemnity for Design Professional Services. If Contractor is considered a “design professional” as that term is defined in Civil Code Section 2782.8 and solely in connection with its design professional services, Contractor shall hold harmless and indemnify City, and its elected officials, officers, employees, servants, designated volunteers, and those City agents serving as independent Contractors in the role of City officials (collectively, “Indemnitees”), with respect to any and all claims, demands, damages, liabilities, losses, costs or expenses, including reimbursement of attorneys’ fees and costs of defense (collectively, “Claims” hereinafter), including but not limited to Claims relating to death or injury to any person and injury to any property, which to the extent arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of Contractor or any of its officers, employees, subcontractors, or agents in the performance of its design professional services under this Agreement. (b) Other Indemnities. In connection with any and all claims, demands, damages, liabilities, losses, costs or expenses, including attorneys’ fees and costs of defense (collectively, “Damages” hereinafter) not covered by Section 13(a), Contractor shall defend, hold harmless and indemnify the Indemnitees with respect to any and all Damages, including but not limited to, Damages relating to death or injury to any person and injury to any property, which to the extent arise out of, pertain to, or relate to the acts or omissions of Contractor or any of its officers, employees, subcontractors, or agents in connection with the performance of this Agreement, including the payment of all consequential damages, reasonable attorneys’ fees, and other related costs and expenses. With respect such Claims, Contractor shall defend City, with counsel of City’s choice, and shall pay and satisfy any judgment, award, or decree that may be rendered against City. Contractor shall reimburse City for any and all legal expenses and costs actually incurred by each of them in connection therewith. Contractor’s obligation to indemnify shall not be restricted to insurance proceeds, if any, received by Contractor or City. All duties of Contractor under this Section shall survive termination of this Agreement.

Section 14. Termination.
(a) City shall have the right to terminate this Agreement for any reason or for no reason upon thirty (30) calendar days' written notice to Contractor with the reasons for termination stated in the notice. Contractor agrees to cease all work under this Agreement on or before the effective date of such notice. In the event such termination is for cause, the Contractor shall have the opportunity to cure such cause within the notice period and such termination shall only take effect if the Contractor failed to cure such cause.
(b) The City may terminate this Agreement with Contractor should Contractor fail to perform the covenants herein contained at the time and in the manner herein provided. In the event of such termination, City may proceed with the work in any manner deemed proper by the

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City. If City terminates this Agreement with Contractor, City shall pay Contractor the sum due to Contractor under this Agreement prior to termination, unless the cost of completions to City exceeds the funds remaining in the Agreement. In which case, the overage shall be deducted from any sum due Contractor under this Agreement and the balance, if any, shall be paid to Contractor upon demand.
(c) In the event of termination or cancellation of this Agreement by City, due to no fault or failure of performance by Contractor, Contractor shall be paid based on the percentage of work satisfactorily performed at the time of termination. In no event shall Contractor be entitled to receive more than the amount that would be paid to Contractor for the full performance of the services required by this Agreement. Contractor shall have no other claim against City by reason of such termination, including any claim for compensation that would exceed the maximum Consideration set forth herein.
(d) Upon receipt of a termination notice, Contractor shall promptly deliver all data, reports, estimates, summaries, and such other information and materials as may have been accumulated by Contractor in performing the services under this Agreement to City, whether completed or in progress.
(e) Notwithstanding any provisions of this Agreement, Contractor shall not be relieved of liability to City for damages sustained by City by virtue of any breach of this Agreement by Contractor, and City may withhold any payments due to Contractor until such time as the exact amount of damages, if any, due City from Contractor is determined. (f) City may temporarily suspend this Agreement, at no additional cost to City, provided that Contractor is given written notice of temporary suspension. If City gives such notice of temporary suspension, Contractor shall immediately suspend its activities under this Agreement. A temporary suspension may be issued concurrent with the notice of termination.

Section 15. City’s Responsibility. City shall provide Contractor with all pertinent data, documents, and other requested information as is available for the proper performance of Contractor’s Scope of Work.

Section 16. Non-Liability of Officials and Employees of the City. No official or employee of City shall be personally liable for any default or liability under this Agreement.

Section 17. Changes in the Scope of Work. City shall have the right to order, in writing, changes in the Scope of Work or the services to be performed. Any changes in the Scope of Work requested by Contractor must be made in writing and approved by both parties.

Section 18. Notice. Any notices, bills, invoices, etc. required by this Agreement shall be deemed received on (a) the day of delivery if delivered by hand during the receiving party's regular business hours or by facsimile before or during the receiving party's regular business hours; or (b) on the second business day following deposit in the United States mail, postage prepaid to the addresses set forth below, or to such other addresses as the parties may, from time to time, designate in writing pursuant to this section.

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If to City:

City Manager
100 Civic Center Mall
P.O. Drawer 1788
Indio, California, 92201
Fax: (760) 342-6597
If to Contractor:

Conserve LandCare
79-635 Avenue 40
Indio, CA 92201
Section 19. Contractor Reports/Meetings.
(a) The Contractor shall submit progress reports at least once a month. The report should be sufficiently detailed for the Contract Manager to determine, if the Contractor is performing to expectations, or is on schedule; to provide communication of interim findings, and to sufficiently address any difficulties or special problems encountered, so remedies can be developed.
(b) The Contractor’s Project Manager shall meet with the City’s Contract Manager, as needed, to discuss progress on this agreement.
(c) If requested by City, Contractor shall document the results of the work under this agreement to the satisfaction of the City, and if applicable, the State of California and the Federal Highway Administration. This may include but is not limited to, preparation of progress and final report, plans, specifications and estimates or similar evidence of attainment of this Agreement’s objectives as set forth in Exhibit A.
(d) Contractor or appropriate designee of Contractor shall sign all plans, specifications, estimates (PS&E) and engineering data furnished by him/her, and where appropriate, indicate his/her California registration number.

Section 20. Funding Requirements.
(a) It is mutually understood between the parties that this Agreement may have been written before ascertaining the availability of funds or appropriation of funds, for the mutual benefit of both parties, in order to avoid program and fiscal delays that would occur if the agreement were executed after that determination was made.
(b) It is mutually agreed that if sufficient funds are not appropriated, this Agreement may be amended to reflect any reduction in funds.
(c) In addition, this Agreement is subject to any additional restrictions, limitations, conditions, or any statute enacted by the Congress, State Legislature, or the City Council of the City that may affect the provisions, terms, or funding of this Agreement in any manner. (d) The parties agree that the City has the option by mutual agreement to amend this agreement to reflect any reduction of funds or void the Agreement under the termination provisions herein.

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Section 21. Modification.
(a) This Agreement constitutes the entire agreement between the parties and supersedes any other agreements, oral or written. No promises, other than those included in this Agreement, shall be valid. This Agreement may be modified only by a written agreement executed by City and Contractor.
(b) Contractor shall commence work covered by an amendment only after the amendment is executed and a notification to proceed has been issued by the City’s Contract Manager.
(c) There shall be no change in Contractor’s Project Manager or members of the project team, as listed in the approved Cost Proposal, which is a part of this Agreement without prior written approval by the City’s Contract Administrator.

Section 22. Cost Principles.
(a) The Contractor agrees that 48 CFR Part 31, Contract Cost Principles and Procedures, shall be used to determine the allowability of individual terms of cost. (b) The Contractor also agrees to comply with Federal procedures in accordance with 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirement for Federal Awards.
(c) Any costs for which payment has been made to the Contractor that are determined by subsequent audit to be unallowable under 48 CFR Part 31 or 2 CFR Part 200 are subject to repayment by the Contractor to the City.
(d) When a Contractor or Subcontractor is a Non-Profit Organization or an Institution of Higher Education, the Cost Principles for Title 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards shall apply.

Section 23. Contingent Fee. The Contractor warrants, by execution of this Agreement that no person or selling agency has been employed, or retained, to solicit or secure this Agreement upon an agreement or understanding, for a commission, percentage, brokerage, or contingent fee, excepting bona fide employees, or bona fide established commercial or selling agencies maintained by Contractor for the purpose of securing business. For breach or violation of this warranty, the City has the right to annul this Agreement without liability; pay only for the value of the work actually performed, or in its discretion to deduct from the Agreement price or consideration, or otherwise recover the full amount of such commission, percentage, brokerage, or contingent fee.

Section 24. Retention of Records/Audit. For the purpose of determining compliance with Gov. Code § 8546.7, the Contractor, Subcontractors, and the City shall maintain all books, documents, papers, accounting records, Independent CPA Audited Indirect Cost Rate workpapers, and other evidence pertaining to the performance of the Agreement including, but not limited to, the costs of administering the Agreement. All parties, including the Contractor’s Independent CPA, shall make such workpapers and materials available at their respective offices at all reasonable times during the Agreement period and for three (3) years from the date of final payment under the Agreement. The City, Caltrans Auditor, Federal Highway Association (FHWA), or any duly authorized representative of the Federal government having jurisdiction

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under Federal laws or regulations (including the basis of Federal funding in whole or in part) shall have access to any books, records, and documents of the Contractor, Subcontractors, and the Contractor’s Independent CPA, that are pertinent to the Agreement for audits, examinations, workpaper review, excerpts, and transactions, and copies thereof shall be furnished if requested without limitation.

Section 25. Audit Review Procedures.
(a) Any dispute concerning a question of fact arising under an interim or post audit of this Agreement that is not disposed of by agreement, shall be reviewed by the City’s Chief Financial Officer.
(b) Not later than 30 days after issuance of the final audit report, the Contractor may request a review by the City’s Chief Financial Officer of unresolved audit issues. The request for review will be submitted in writing.
(c) Neither the pendency of a dispute nor its consideration by the City will excuse the Contractor from full and timely performance, in accordance with the terms of this Agreement. (d) Contractor and subcontractor agreement(s), including cost proposals and indirect cost rates (ICR), are subject to audits or reviews such as, but not limited to, an Agreement audit, an incurred cost audit, an ICR Audit, or a CPA ICR audit work paper review. If selected for audit or review, the Agreement, cost proposal and ICR and related work papers, if applicable, will be reviewed to verify compliance with 48 CFR Part 31 and other related laws and regulations. In the instances of a CPA ICR audit work paper review it is Contractor’s responsibility to ensure federal, City, or local government officials are allowed full access to the CPA’s work papers including making copies as necessary. The Agreement, cost proposal, and ICR shall be adjusted by Contractor and approved by City’s Contract Manager to conform to the audit or review recommendations. Contractor agrees that individual terms of costs identified in the audit report shall be incorporated into the Agreement by this reference if directed by the City at its sole discretion. Refusal by Contractor to incorporate audit or review recommendations, or to ensure that the federal, City or local governments have access to CPA work papers, will be considered a breach of Agreement terms and cause for termination of the Agreement and disallowance of prior reimbursed costs.
(e) Contractor’s Cost Proposal may be subject to a CPA ICR Audit Work Paper Review and/or audit by the Independent Office of Audits and Investigations (IOAI). IOAI, at its sole discretion, may review and/or audit and approve the CPA ICR documentation. The Cost Proposal shall be adjusted by the Contractor and approved by the City’s Contract Manager to conform to the Work Paper Review recommendations included in the management letter or audit recommendations included in the audit report. Refusal by the Contractor to incorporate the Work Paper Review recommendations included in the management letter or audit recommendations included in the audit report will be considered a breach of the Agreement terms and cause for termination of the Agreement and disallowance of prior reimbursed costs.

1. During IOAI’s review of the ICR audit work papers created by the Contractor’s independent CPA, IOAI will work with the CPA and/or Contractor toward a resolution of issues that arise during the review. Each party agrees to use its best efforts to resolve any audit disputes in a timely manner. If IOAI identifies significant issues during the review and is unable to issue a cognizant approval letter, the City will reimburse the Contractor at an accepted ICR until a FAR

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(Federal Acquisition Regulation) compliant ICR {e.g. 48 CFR Part 31; GAGAS (Generally Accepted Auditing Standards); CAS (Cost Accounting Standards), if applicable; in accordance with procedures and guidelines of the American Association of State Highways and Transportation Officials (AASHTO) Audit Guide; and other applicable procedures and guidelines}is received and approved by IOAI.

Accepted rates will be as follows:
a. If the proposed rate is less than one hundred fifty percent (150%) - the accepted rate reimbursed will be ninety percent (90%) of the proposed rate. b. If the proposed rate is between one hundred fifty percent (150%) and two hundred percent (200%) - the accepted rate will be eighty-five percent (85%) of the proposed rate.
c. If the proposed rate is greater than two hundred percent (200%) - the accepted rate will be seventy-five percent (75%) of the proposed rate.

2. If IOAI is unable to issue a cognizant letter per paragraph E.1. above, IOAI may require the Contractor to submit a revised independent CPA-audited ICR and audit report within three (3) months of the effective date of the management letter. IOAI will then have up to six (6) months to review the Contractor’s and/or the independent CPA’s revisions.

3. If the Contractor fails to comply with the provisions of this paragraph E, or if IOAI is still unable to issue a cognizant approval letter after the revised independent CPA audited ICR is submitted, overhead cost reimbursement will be limited to the accepted ICR that was established upon initial rejection of the ICR and set forth in paragraph E.1. above for all rendered services. In this event, this accepted ICR will become the actual and final ICR for reimbursement purposes under this Agreement.

4. The Contractor may submit to the City the final invoice only when all of the following items have occurred: (1) IOAI accepts or adjusts the original or revised independent CPA audited ICR; (2) all work under this Agreement has been completed to the satisfaction of the City; and, (3) IOAI has issued its final ICR review letter. The Contractor MUST SUBMIT its final invoice to the City no later than sixty (60) calendar days after occurrence of the last of these items. The accepted ICR will apply to this Agreement and all other agreements executed between the City and the Contractor, either as a prime or subcontractor, with the same fiscal period ICR.

Section 26. Disputes. Prior to either party commencing any legal action under this Agreement, the parties agree to try in good faith, to settle any dispute amicably between them. If a dispute has not been settled after forty-five (45) days of good-faith negotiations and as may be otherwise provided herein, then either party may commence legal action against the other. (a) Any dispute, other than disputes arising out of an audit, concerning a question of fact arising under this Agreement that is not disposed of by agreement shall be decided by a

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committee consisting of City’s Contract Manager and City Engineer, who may consider written or verbal information submitted by Contractor.
(b) Not later than thirty (30) calendar days after completion of all work under the Agreement, Contractor may request review by City’s Governing Board of unresolved claims or disputes, other than audit. The request for review will be submitted in writing. (c) Neither the pendency of a dispute, nor its consideration by the committee referenced herein, will excuse Contractor from full and timely performance in accordance with the terms of this Agreement.

Section 27. Subcontracting.
(a) Nothing contained in this Agreement or otherwise, shall create any contractual relation between the City and any Subcontractors, and no sub-agreement shall relieve the Contractor of its responsibilities and obligations hereunder. The Contractor agrees to be as fully responsible to the City for the acts and omissions of its Subcontractors and of persons either directly or indirectly employed by any of them as it is for the acts and omissions of persons directly employed by the Contractor. The Contractor’s obligation to pay its Subcontractors is an independent obligation from the City’s obligation to make payments to the Contractor. (b) The Contractor shall perform the work contemplated with resources available within its own organization and no portion of the work shall be subcontracted without written authorization by the City’s Contract Manager, except that which is expressly identified in the Contractor’s approved Cost Proposal.
(c) Any sub-agreement entered into as a result of this Agreement, shall contain all the provisions stipulated in this entire Agreement to be applicable to Subcontractors unless otherwise noted.
(d) Contractor shall pay its subcontractors within Fifteen (15) calendar days from receipt of each payment made to the Contractor by the City. (e) Any substitution of subcontractors must be approved in writing by the City’s Contract Manager in advance of assigning work to a substitute Subcontractor. (f) Prompt Progress Payment

1. Contractor or subcontractor shall pay to any subcontractor, not later than fifteen (15) days after receipt of each progress payment, unless otherwise agreed to in writing, the respective amounts allowed Contractor on account of the work performed by the subcontractors, to the extent of each subcontractor’s interest therein. In the event that there is a good faith dispute over all or any portion of the amount due on a progress payment from Contractor or subcontractor to a subcontractor, Contractor or subcontractor may withhold no more than 150 percent of the disputed amount. Any violation of this requirement shall constitute a cause for disciplinary action and shall subject the licensee to a penalty, payable to the subcontractor, of 2 percent of the amount due per month for every month that payment is not made. In any action for the collection of funds wrongfully withheld, the prevailing party shall be entitled to his or her attorney’s fees and costs. The sanctions authorized

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under this requirement shall be separate from, and in addition to, all other remedies, either civil, administrative, or criminal. This clause applies to both DBE and non-DBE subcontractors.
(g) Prompt Payment of Withheld Funds to Subcontractors

1. No retainage will be held by the City from progress payments due to Contractor. Contractor and subcontractors are prohibited from holding retainage from subcontractors. Any delay or postponement of payment may take place only for good cause and with the City’s prior written approval. Any violation of these provisions shall subject the violating Contractor or subcontractor to the penalties, sanctions, and other remedies specified in Section 3321 of the California Civil Code. This requirement shall not be construed to limit or impair any contractual, administrative or judicial remedies, otherwise available to Contractor or subcontractor in the event of a dispute involving late payment or nonpayment by Contractor, deficient subcontractor performance and/or noncompliance by a subcontractor. This clause applies to both DBE and non-DBE subcontractors.

Section 28. Equipment Purchase and other Capital Expenditures. (a) Prior written authorization from the City’s Contract Manager is required before the Contractor enters into any unbudgeted purchase order, or subcontract exceeding $5,000 for supplies, equipment, or Contractor services. The Contractor shall provide an evaluation of the necessity or desirability of incurring such costs.
(b) For purchase of any item, service or consulting work not covered in the Contractor’s Scope of Work and that exceeds $5,000, with prior authorization by the City’s Contract Manager, three competitive quotations must be submitted with the request, or the absence of proposal must be adequately justified.
(c) Any equipment purchased as a result of this Agreement is subject to the following:
a. The Contractor shall maintain an inventory of all nonexpendable property.

Nonexpendable property is defined as having a useful life of at least two years and an acquisition cost of $5,000 or more. If the purchased equipment needs replacement and is sold or traded in, the City shall receive a proper refund or credit at the conclusion of the Agreement, or if the Agreement is terminated, the Contractor may either keep the equipment and credit the City in an amount equal to its fair market value, or sell such equipment at the best price obtainable at a public or private sale, in accordance with established City procedures and credit the City in an amount equal to the sales price. If the Contractor elects to keep the equipment, fair market value shall be determined at the Contractor’s expense, on the basis of a competent independent appraisal of such equipment. Appraisals shall be obtained from an appraiser mutually agreeable to by the City and the Contractor, if it is determined to sell the equipment, the terms and conditions of such sale must be approved in advance by the City.
b. Regulation 2 CFR Part 200 requires a credit to Federal funds when participating equipment with a fair market value greater than $5,000 is credited to the project.

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Section 29. Inspection of Work. The Contractor and any subcontractor shall permit the City, the State, and the Federal Highway Administration if federal participating funds are used in this Agreement, to review and inspect the project activities and files at all reasonable times during the performance period of this Agreement including review and inspection on a daily basis.

Section 30. Safety.
(a) Contractor shall comply with OSHA regulations applicable to Contractor for the services provided herein regarding necessary safety equipment or procedures. Contractor shall comply with safety instructions issued by the City or its representatives. Contractor’s personnel shall wear hard hats and safety vests at all times while working on the construction project site (if applicable).
(b) If applicable to the services herein, and pursuant to the authority contained in Section 591 of the Vehicle Code, the City has determined that such areas are within the limits of the project as described herein and are open to public traffic. Contractor shall comply with all of the requirements set forth in Divisions 11, 12, 13, 14, and 15 of the Vehicle Code. Contractor shall take all reasonably necessary precautions for safe operation of its vehicles and the protection of the traveling public from injury and damage from such vehicles. (c) Any subcontract entered into by Contractor, shall contain all of the provisions of this Section.
(d) Contractor shall have a Division of Occupational Safety and Health (CAL-OSHA) permit(s), as outlined in California Labor Code Sections 6500 and 6705, prior to the initiation of any practices, work, method, operation, or process related to the construction or excavation of trenches which are five feet or deeper.

Section 31. Ownership of Data.
(a) It is mutually agreed that all materials prepared by Contractor under this Agreement shall become the property of City, and Contractor shall have no property right therein whatsoever. Immediately upon termination, City shall be entitled to, and Contractor shall deliver to City, reports, investigations, appraisals, inventories, studies, analyses, drawings and data estimates performed to that date, whether completed or not, and other such materials as may have been prepared or accumulated to date by Contractor in performing this Agreement which is not Contractor’s privileged information, as defined by law, or Contractor’s personnel information, along with all other property belonging exclusively to City which is in Contractor’s possession.

Publication of the information derived from work performed or data obtained in connection with services rendered under this Agreement must be approved in writing by City. (b) Additionally, it is agreed that the Parties intend this to be an Agreement for services and each considers the products and results of the services to be rendered by Contractor hereunder to be work made for hire. Contractor acknowledges and agrees that the work (and all rights therein, including, without limitation, copyright) belongs to and shall be the sole and exclusive property of City without restriction or limitation upon its use or dissemination by City. (c) Nothing herein shall constitute or be construed to be any representation by Contractor that the work product is suitable in any way for any other project except the one detailed in this Contract. Any reuse by City for another project or project location shall be at City’s sole risk.

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(d) Applicable patent rights provisions regarding rights to inventions shall be included in the contracts as appropriate (48 CFR 27, Subpart 27.3 - Patent Rights under Government Contracts for federal-aid contracts).
(e) The City may permit copyrighting of reports or other agreement products. In such case, the Federal Highway Administration shall have the royalty-free nonexclusive and irrevocable right to reproduce, publish, or otherwise use and to authorize others to use, the work for government purposes.

Section 32. Claims Filed by City’s Construction Contractor. (a) If claims are filed by the City’s construction contractor relating to work performed by Contractor’s personnel, and additional information or assistance from the Contractor’s personnel is required in order to evaluate or defend against such claims, Contractor agrees to make its personnel available for consultation with the City construction contract administration and legal staff and for testimony, if necessary, at depositions and at trial or arbitration proceedings.
(b) Contractor’s personnel that the City considers essential to assist in defending against construction contractor claims will be made available on reasonable notice from the City.

Consultation or testimony will be reimbursed at the same rates, including travel costs that are being paid for the Contractor’s personnel services under this agreement. (c) Services of the Contractor’s personnel in connection with the City’s construction contractor claims will be performed pursuant to a written contract amendment, if necessary, extending the termination date of this agreement in order to finally resolve the claims.

Section 33. Confidentiality of Data.
(a) All financial, statistical, personal, technical, or other data and information relative to the City’s operations, which are designated confidential by the City and made available to the Contractor in order to carry out this Agreement, shall be protected by the Contractor from unauthorized use and disclosure.
(b) Permission to disclose information on one occasion, or public hearing held by the City relating to the Agreement, shall not authorize the Contractor to further disclose such information, or disseminate the same on any other occasion. (c) The Contractor shall not comment publicly to the press or any other media regarding the Agreement or the City’s actions on the same, except that Contractor’s own personnel involved in the performance of this Agreement, may speak at public hearings or in response to questions at such hearing.
(d) The Contractor shall not issue any news release or public relations item of any nature, whatsoever, regarding work performed or to be performed under this Agreement without prior review of the contents thereof by the City, and receipt of the City’s written permission. (e) All information related to the construction estimate is confidential and shall not be disclosed by the Contractor to any entity other than the City, Caltrans, and/or Federal Highway Association (FHWA). All of the materials prepared or assembled by the Contractor pursuant to

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performance of this Contract are confidential and the Contractor agrees that they shall not be made available to any individual or organization without the prior written approval of City or except by court order. If Contractor or any of its officers, employees, or subcontractors does voluntary provide information in violation of this Contract, City has the right to reimbursement and indemnity from Contractor for any damages caused by Contractor releasing the information, including, but not limited to, City’s attorney’s fees and disbursements, including without limitation experts’ fees and disbursements.

Section 34. National Labor Relations Board Certification. In accordance with Public Contract Code Section 10296, Contractor hereby states under penalty of perjury that no more than one final unappealable finding of contempt of court by a federal court has been issued against the Contractor within the immediately preceding two-year period, because of the Contractor’s failure to comply with an order of a federal court that orders the Contractor to comply with an order of the National Labor Relations Board.

Section 35. Evaluation of Contractor. Contractor’s performance will be evaluated by the City. A copy of the evaluation will be sent to the Contractor for comments. The evaluation together with the comments shall be retained as part of the contract record.

Section 36. Statement of Compliance/Non-Discrimination Clause. (a) Contractor’s signature affixed herein, and dated, shall constitute a certification under penalty of perjury under the laws of the State of California that the Contractor has, unless exempt, complied with, the nondiscrimination program requirements of Government Code Section 12990 and Title 2, California Administrative Code, Section 8103. (b) During the performance of this Agreement, Contractor and its subcontractors shall not deny the Agreement’s benefits to any person on the basis of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status, nor shall they unlawfully discriminate, harass, or allow harassment against any employee or applicant for employment because of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status. Contractor and subcontractors shall insure that the evaluation and treatment of their employees and applicants for employment are free from such discrimination and harassment.
(c) The Contractor and subcontractors shall comply with the provisions of the Fair Employment and Housing Act (Gov. Code §12990 et seq.), the applicable regulations promulgated there under (2 CCR §11000 et seq.), the provisions of Gov. Code §§11135-11139.5, and the regulations or standards adopted by City to implement such article. The applicable regulations of the Fair Employment and Housing Commission implementing Gov. Code §12990 (a-f), set forth 2 CCR §§8100-8504, are incorporated into this Agreement by reference and made a part hereof as if set forth in full.
(d) The Contractor shall permit access by representatives of the Department of Fair Employment and Housing and the City upon reasonable notice at any time during the normal business hours, but in no case less than twenty-four (24) hours’ notice, to such of its books, records, accounts, and all other sources of information and its facilities as said Department or City shall require to ascertain compliance with this clause.

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(e) The Contractor and its subcontractors shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other Agreement.
(f) The Contractor shall include the nondiscrimination and compliance provisions of this clause in all subcontracts to perform work under this Agreement. (g) The Contractor, with regard to the work performed under this Agreement, shall act in accordance with Title VI of the Civil Rights Act of 1964 (42 U.S.C. §2000d et seq.). Title VI provides that the recipients of federal assistance will implement and maintain a policy of nondiscrimination in which no person in the United States shall, on the basis of race, color, national origin, religion, sex, age, disability, be excluded from participation in, denied the benefits of or subject to discrimination under any program or activity by the recipients of federal assistance or their assignees and successors in interest.
(h) The Contractor shall comply with regulations relative to non-discrimination in federally-assisted programs of the U.S. Department of Transportation (49 CFR Part 21 - Effectuation of Title VI of the Civil Rights Act of 1964). Specifically, the Contractor shall not participate either directly or indirectly in the discrimination prohibited by 49 CFR §21.5, including employment practices and the selection and retention of Subcontractors.

Section 37. Debarment and Suspension Certification.
(a) The Contractor’s signature affixed herein shall constitute a certification under penalty of perjury under the laws of the State of California, that the Contractor or any person associated therewith in the capacity of owner, partner, director, officer or manager:

1. Is not currently under suspension, debarment, voluntary exclusion, or determination of ineligibility by any federal agency;

2. Has not been suspended, debarred, voluntary excluded, or determined ineligible by any federal agency with in the past three (3) years;

3. Does not have a proposed debarment pending; and

4. Has not been indicted, convicted, or had a civil judgement rendered against it by a court of competent jurisdiction in any matter involving fraud or official misconduct within the past three (3) years.
(b) Any exceptions to this certification must be disclosed to the City. Exceptions will not necessarily result in denial of recommendation for award but will be considered in determining responsibility. Disclosures must indicate the party to whom the exceptions apply, the initiating agency, and the dates of agency action.
(c) Exceptions to the Federal Government Excluded Parties List System maintained by the U.S. General Services Administration are to be determined by the Federal Highway Association (FHWA).

Section 38. Conflict of Interest.

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(a) The Contractor shall disclose any financial, business, or other relationship with City that may have an impact upon the outcome of this Agreement, or any ensuing City construction project. The Contractor shall also list current clients who may have a financial interest in the outcome of this Agreement, or any ensuing City construction project, which will follow. (b) The Contractor certifies that it has disclosed to the City any actual, apparent, or potential conflicts of interest that may exist relative to the services to be provided pursuant to this Agreement. The Contractor agrees to advise the City of any actual, apparent or potential conflicts of interest that may develop subsequent to the date of execution of this Agreement. The Contractor further agrees to complete any statements of economic interest if required either by the City ordinance or State law.
(c) The Contractor hereby certifies that it does not now have nor shall it acquire any financial or business interest that would conflict with the performance of services under this Agreement.
(d) The Contractor hereby certifies that the Contractor or subcontractor and any firm affiliated with the Contractor or subcontractor that bids on any construction contract or on any Agreement to provide construction inspection for any construction project resulting from this Agreement, has established necessary controls to ensure a conflict of interest does not exist. An affiliated firm is one, which is subject to the control of the same persons, through joint ownership or otherwise.

Section 39. Rebates, Kickbacks or Other Unlawful Consideration. The Contractor warrants that this Agreement was not obtained or secured through rebates kickbacks or other unlawful consideration, either promised or paid to any City employee. For breach or violation of this warranty, the City shall have the right in its discretion to terminate this Agreement without liability, to pay only for the value of the work actually performed or to deduct from the Agreement price or otherwise recover the full amount of such rebate, kickback or other unlawful consideration.

Section 40. Prohibition on Expending Local Agency State or Federal Funds for Lobbying.
(a) The Contractor certifies to the best of his or her knowledge and belief that:
(1) No state, federal or local agency appropriated funds have been paid, or will be paid by-or-on behalf of the Contractor to any person for influencing or attempting to influence an officer or employee of any state or federal agency; a Member of the State Legislature or United States Congress; an officer or employee of the Legislature or Congress; or any employee of a Member of the Legislature or Congress, in connection with the awarding of any state or federal contract; the making of any state or federal grant; the making of any state or federal loan; the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any state or federal contract, grant, loan, or cooperative agreement. (2) If any funds other than federal appropriated funds have been paid, or will be paid to any person for influencing or attempting to influence an officer or employee of any federal agency; a Member of Congress; an officer or

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employee of Congress, or an employee of a Member of Congress; in connection with this federal contract, grant, loan, or cooperative agreement, the Contractor shall complete and submit Standard Form-LLL, “Disclosure Form to Report Lobbying,” in accordance with its instructions. (b) This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by Section 1352, Title 31, US.

Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure and possible criminal penalties. Contractor agrees to execute any required certification documents as designated by Caltrans.
(c) The Contractor also agrees by signing this document that he or she shall require that the language of this certification be included in all lower-tier subcontracts, which exceed $100,000, and that all such sub recipients shall certify and disclose accordingly.

Section 41. Contractor’s Proposal. If this Agreement includes Contractor’s proposal or bid, such document is incorporated herein as if set forth in full. In the event of any inconsistency between the terms of the proposal or bid and this Agreement, this Agreement shall govern.

Section 42. Limitations Upon Subcontracting and Assignment. Neither this Agreement, nor any portion, shall be assigned or subcontracted by either party without prior written consent of the other party. Notwithstanding any assignment or subcontracting, the Contractor shall be responsible for the performance of work done by the subcontractor or assignee (“subcontractor”) and shall ensure that such work is performed pursuant to the terms of this Agreement. The City can at any time request that Contractor remove the subcontractor from performing any work under this Agreement in the City’s sole discretion. In such case, Contractor shall remain responsible for the completion of such work under the terms and compensation set forth in this Agreement.

Section 43. Authority to Execute. The persons executing this Agreement on behalf of the parties represent that they are duly authorized to execute this Agreement.

Section 44. Change Orders.
(a) The City’s Contract Manager is authorized to request a modification or a change to the services provided hereunder pursuant to a written change order. The change order form will document the nature and monetary impact of the proposed change on the cost and schedule for the services and must be approved in writing by the City’s Contract Manager and Contractor’s Project Manager.
(b) For the purposes of this Agreement, each duly authorized change order form shall be deemed incorporated into and part of this Agreement and each such form shall constitute a formal amendment to this Agreement adjusting fees and completion date as finally agreed upon and approved in writing for the authorized change order. In no event shall the Scope of Services be deemed altered, amended, enhanced or otherwise modified except through written approval of a change order in accordance with this Section or a written amendment to this Agreement.

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Section 45. Attorney's Fees. In the event that either party commences any legal action or proceeding to enforce or interpret the provisions of this Agreement, the prevailing party in such action shall be entitled to reasonable attorney's fees, costs and necessary disbursements, in addition to such other relief as may be sought and awarded.

Section 46. Entire Agreement. This Agreement represents the entire integrated agreement between City and Contractor, and supersedes all prior negotiations, representations or agreements, either written or oral. This Agreement may be amended only by a written instrument signed by both City and Contractor.

Section 47. Governing Law. The interpretation and implementation of this Agreement shall be governed by the domestic law of the State of California.

Section 48. City Not Obligated to Third Parties. City shall not be obligated or liable under this Agreement to any party other than Contractor.

Section 49. Exhibits; Precedence. All documents referenced as exhibits in this Agreement are hereby incorporated in this Agreement. In the event of any material discrepancy between the express provisions of this Agreement and the provisions of any document incorporated herein by reference, the provisions of this Agreement shall prevail.

Section 50. Equal Employment Opportunity. In connection with its performance under this Agreement, Contractor shall not discriminate against any employee or applicant for employment because of race, religion, color, sex, age, marital status, ancestry or national origin.

Contractor shall ensure that applicants are employed, and that employees are treated during their employment, without regard to their race, religion, color, sex, age, marital status, ancestry or national origin. Such actions shall include, but not be limited to, the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship.

Section 51. Prevailing Wage and Payroll Records.

Notice is hereby given that in accord with California Labor Code Section 1720, et seq., and 1770, et seq., as well as California Code of Regulations, Title 8, Section 16000, et seq., (“Prevailing Wage Laws”), Contractor is required to pay not less than the general prevailing rate of per diem wages for work of a similar character in the locality in which Contractor’s Services pursuant to this Agreement are performed, and not less than the general prevailing rate of per diem wages for holiday and overtime work. In that regard, the Director of the Department of Industrial Relations of the State of California is required to and has determined such general prevailing rates of per diem wages. Copies of the State prevailing wage rates and the latest revisions thereto are available on the Internet at www.dir.ca.gov. (a) Covenant to Comply. Contractor covenants that it shall fully comply with all applicable federal and state labor laws (including, without limitation, if applicable, the Prevailing Wage Laws). For purposes of this Section 25(a) only, the term “subcontractors” shall not include suppliers, manufacturers, or distributors. Contractor further covenants that it shall take all practicable steps to ensure that its subcontractors comply with Prevailing Wage Laws if applicable to work performed by subcontractors. References to “Covered Services” hereinafter shall designate such Services as are subject to Prevailing Wage Laws. (b) Payroll Records. Contractor and all subcontractors performing Covered Services

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shall keep an accurate payroll record, showing the name, address, social security number, job classification, straight time and overtime hours worked each day and week, and the actual per diem wages paid to each journeyperson, apprentice, or other employee. All payroll records shall be certified as being true and correct by Contractor or the subcontractors performing Covered Services keeping such records; and the payroll records shall be available for inspection at all reasonable hours at Contractor’s principal office.
(c) Subcontracts. Any subcontract entered into as a result of this Agreement if for more than $25,000 for public works construction or more than $15,000 for the alteration, demolition, repair, or maintenance of public works, shall contain all of the provisions of this Section.
(d) Note. The Federal “Payment of Predetermined Minimum Wage” applies only to federal-aid construction contracts.
(e) Compliance Monitoring. When applicable Contractor shall post job site notices prescribed by regulation. Certain portions of the Scope of Work are subject to compliance monitoring and enforcement by the Department of Industrial Relations ("DIR"). (f) DIR Registration. No contractor or subcontractor may work on a public works project unless registered with DIR. Contractors DIR registration number is:

Contractor: PW-LR-1000713445
(g) When prevailing wage rates apply, the Contractor is responsible for verifying compliance with the certified payroll requirements. Invoice payment will not be made until the invoice is approved by the City’s Contract Manager.
(h) Penalty

1. The Contractor and any of its Subcontractors shall comply with Labor Code §1774 and §1775. Pursuant to Labor Code §1775, the Contractor and any Subcontractor shall forfeit to the City a penalty of not more than two hundred dollars ($200) for each calendar day, or portion thereof, for each worker paid less than the prevailing rates as determined by the Director of DIR for the work or craft in which the worker is employed for any public work done under the Agreement by the Contractor or by its Subcontractor in violation of the requirements of the Labor Code and in particular, Labor Code §§1770 to 1780, inclusive.

2. The amount of this forfeiture shall be determined by the Labor Commissioner and shall be based on consideration of mistake, inadvertence, or neglect of the Contractor or Subcontractor in failing to pay the correct rate of prevailing wages, or the previous record of the Contractor or Subcontractor in meeting their respective prevailing wage obligations, or the willful failure by the Contractor or Subcontractor to pay the correct rates of prevailing wages. A mistake, inadvertence, or neglect in failing to pay the correct rates of prevailing wages is not excusable if the Contractor or Subcontractor had knowledge of the obligations under the Labor Code. The Contractor is responsible for paying the appropriate rate, including any escalations that take place during the term of the Agreement.

3. In addition to the penalty and pursuant to Labor Code §1775, the difference between

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the prevailing wage rates and the amount paid to each worker for each calendar day or portion thereof for which each worker was paid less than the prevailing wage rate shall be paid to each worker by the Contractor or Subcontractor.

4. If a worker employed by a Subcontractor on a public works project is not paid the general prevailing per diem wages by the Subcontractor, the prime Contractor of the project is not liable for the penalties described above unless the prime Contractor had knowledge of that failure of the Subcontractor to pay the specified prevailing rate of wages to those workers or unless the prime Contractor fails to comply with all of the following requirements:
a. The Agreement executed between the Contractor and the Subcontractor for the performance of work on public works projects shall include a copy of the requirements in Labor Code §§ 1771, 1775, 1776, 1777.5, 1813, and 1815. b. The Contractor shall monitor the payment of the specified general prevailing rate of per diem wages by the Subcontractor to the employees by periodic review of the certified payroll records of the Subcontractor.
c. Upon becoming aware of the Subcontractor’s failure to pay the specified prevailing rate of wages to the Subcontractor’s workers, the Contractor shall diligently take corrective action to halt or rectify the failure, including but not limited to, retaining sufficient funds due the Subcontractor for work performed on the public works project.
d. Prior to making final payment to the Subcontractor for work performed on the public works project, the Contractor shall obtain an affidavit signed under penalty of perjury from the Subcontractor that the Subcontractor had paid the specified general prevailing rate of per diem wages to the Subcontractor’s employees on the public works project and any amounts due pursuant to Labor Code §1813.

5. Pursuant to Labor Code §1775, City shall notify the Contractor on a public works project within fifteen (15) calendar days of receipt of a complaint that a Subcontractor has failed to pay workers the general prevailing rate of per diem wages.

6. If City determines that employees of a Subcontractor were not paid the general prevailing rate of per diem wages and if City did not retain sufficient money under the Agreement to pay those employees the balance of wages owed under the general prevailing rate of per diem wages, the Contractor shall withhold an amount of moneys due the Subcontractor sufficient to pay those employees the general prevailing rate of per diem wages if requested by City. (i) Hours of Labor
Eight (8) hours labor constitutes a legal day's work. The Contractor shall forfeit, as a penalty to the City, twenty-five dollars ($25) for each worker employed in the execution of the Agreement by the Contractor or any of its Subcontractors for each calendar day during which such worker is required or permitted to work more than eight (8) hours in any one calendar day and forty (40) hours in any one calendar week in violation of the provisions of the Labor Code, and in particular §§1810 to 1815 thereof, inclusive, except that work performed by employees in excess of eight

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 708 of 1306 22 City Project Number: LMLLD City of Indio
(8) hours per day, and forty (40) hours during any one week, shall be permitted upon compensation for all hours worked in excess of eight (8) hours per day and forty (40) hours in any week, at not less than one and one-half (1.5) times the basic rate of pay, as provided in §1815. (j) Employment of Apprentices

1. Where either the prime Agreement or the sub-agreement exceeds thirty thousand dollars ($30,000), the Contractor and any subcontractors under him or her shall comply with all applicable requirements of Labor Code §§ 1777.5, 1777.6 and 1777.7 in the employment of apprentices.

2. Contractors and subcontractors are required to comply with all Labor Code requirements regarding the employment of apprentices, including mandatory ratios of journey level to apprentice workers. Prior to commencement of work, Contractor and subcontractors are advised to contact the DIR Division of Apprenticeship Standards website at https://www.dir.ca.gov/das/, for additional information regarding the employment of apprentices and for the specific journey-toapprentice ratios for the Agreement work. The Contractor is responsible for all subcontractors’ compliance with these requirements. Penalties are specified in Labor Code §1777.7.

Section 52. Severability. Invalidation of any provision contained herein or the application thereof to any person or entity by judgment or court order shall in no way affect any of the other covenants, conditions, restrictions, or provisions hereof, or the application thereof to any other person or entity, and the same shall remain in full force and effect.

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 709 of 1306 23 City Project Number: LMLLD City of Indio
EXECUTED this 18th day of September, 2023, at Indio, California.

CITY OF INDIO
Bryan H. Montgomery
City Manager
ATTEST:

CYNTHIA HERNANDEZ
City Clerk

CONSERVE LANDCARE, LLC
Craig Blouin
Vice President
APPROVED AS TO FORM:

Steven P. Graham
City Attorney

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 710 of 1306 City Project No. LMLLD City of Indio

EXHIBIT A

SCOPE OF WORK

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 711 of 1306 Landscape and Lighting District Scope of Services Page | 1 Landscape and Lighting District Scope of Services
City Project Number: LM-LLD

GENERAL PROVISIONS
The following apply to all the services under this Scope of Services:

1. The work done under these specifications shall include the furnishing of all labor, materials, and equipment necessary for the provision of landscape maintenance services specified herein within the boundaries of the landscape areas as identified and shown on the attached list of locations. Bidder is to furnish all labor, tools and equipment necessary to provide service as specified herein. The Bidder shall also be required to report landscape maintenance problems such as, but not limited to, irrigation system vandalism, graffiti incidents, infestations of pests, diseased or dead plants, trees, etc. Water utilized for the services under the contract shall be furnished by the City.

2. All work which is defective in its construction or deficient in any of the requirements of the specifications shall be remedied or removed and replaced by the Contractor in an acceptable manner at their own expense.

3. If any portion of the work done under the contract is defective or not in accordance with the specifications as determined by the City, and if the imperfection in the same is not of sufficient magnitude or importance to make the work dangerous or undesirable, the City’s representative shall have the right and authority to retain the work, but he may make such deductions in the payment due the Contractor as may be just and reasonable.

4. The contractor shall recognize the rights of utility companies within the public right of way and their need to maintain and repair their facilities. The contractor shall exercise due and proper care to prevent damage to utility facilities and to adjust schedules when utility operations prevent the Contractor from maintenance during a specified time frame. No additional compensation will be allowed for complying with these requirements.

Contractor shall notify the City’s representative of any utility that is disturbed or damaged.

5. The contractor shall provide a level of quality in landscape maintenance compatible with standard practice to result in a neat, clean, safe, and attractive appearance at all sites serviced under the terms of the contract.

6. All employees of Contractor performing services shall be dressed in clean, unaltered uniforms with suitable identification and no portion of the uniform may be removed while working. Employees not in uniform shall be immediately removed from the work area.

Contractor employees shall appear neat and well-groomed at all times. Contractor employees shall wear orange safety vests when operating machinery and/or while working

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 712 of 1306 Landscape and Lighting District Scope of Services Page | 2 within five hundred (500) feet of moving traffic or such other distance required by any applicable laws.

7. If any person employed by the contractor fails or refuses to carry out the directions set forth under this agreement or if the sole opinion of the City’s representative is incompetent, unfaithful, intemperate or disorderly or uses threatening or abusive language to any person on the work representing the City, or is otherwise unsatisfactory, such person shall be removed from the City’s work upon request by the City’s Representative.

8. All refuse debris shall be removed and disposed of at the end of each day at no additional cost to City by hauling it to a location approved by the City for the disposal of solid waste and in a matter directed by City to ensure compliance with AB 939 requirements.

Contractor shall provide City with report regarding the diversion of waste in the format directed by City.

9. The Contractors employees shall have the proper license to operate the equipment; have the ability to operate equipment in accordance with the manufacturer’s recommendations; be knowledgeable of safety regulations as they relate to landscaping and traffic control; demonstrate knowledge of landscape maintenance operations; at least one member of the crew shall have an American Red Cross Standard First Aid Certification; and have the necessary certificates and licenses as required for employees and supervisors.

10. Inspection of work will be done by the City’s Public Works Department staff on a weekly basis or when deemed necessary. Any work found not to be acceptable will be noted in writing and provided to the Contractor noting these deficiencies, and the Contractor shall make a reasonable and good faith effort to correct the deficiencies within a reasonable period not to exceed three (3) days from notification or such other time as determined by the City’s representative. After this time period, if unacceptable conditions still exist, the City has the right to terminate the Agreement or deduct payment as is proportionately appropriate for noncompliance with the specified contract.

11. The Contractor shall conduct all work outlined in the contract in such a manner as to meet all accepted standards for safe practices during the maintenance operation and to safely maintain stored equipment, machines and materials or other hazards consequential or related to the work; and agrees to accept the sole responsibility for complying with all City, County, State or other legal requirements including, but limited to, full compliance with the terms of the applicable OSHA and CAL EPA Safety Orders at all times so as to protect all person, including contractor employees, agents of the City, vendors, members of the public or others from foreseeable injury or damage to their property.

12. The Contractor shall be responsible for traffic control and safety regulations as related to any city, state or county requirements while working on medians and/or roadside strips.

The design and operation of work zone traffic controls must comply with the applicable state and/or federal guidelines. Contractor shall cooperate fully with the City in the

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 713 of 1306 Landscape and Lighting District Scope of Services Page | 3 investigation of any accident, injury or death occurring on city property including a complete written report to the City’s representative within 24 hours following the occurrence.

13. The Contractor shall endeavor to maintain good public relations at all times. The work shall be conducted in a manner which will cause the least possible interference with or annoyance to the public.

14. The Contractor shall not be permitted to store equipment or materials at any contracted work area.

15. All work shall be completed to the satisfaction of and under the supervision of the City’s representative. Failure to comply with any requirement contained herein may result in suspension of work without time extension.

16. The Contractor shall display standardized warning signage when staging or working in any area that is subject to pedestrian or vehicular traffic.

17. Where work is in progress, each street shall be open to local traffic at all times unless prior arrangements have been made and approved by the City’s representative and the City’s Traffic Engineer.

SECTION A-IRRIGATION SYSTEM
A-1. Our intent is to have the water used to irrigate the areas included in this contract managed by the Contractor. Two fulltime irrigators, with knowledge of system operation and repair are required for each “Service Level” of this bid. Maintenance of all areas for proper moisture levels based on the turf and/or plants’ needs at different times of the year. All irrigation system maintenance shall be performed to insure plant health and vigor.

a. The entire irrigation system to include all components from connection at the meters to the sprinklers/dripper/bubblers shall be maintained in an operational state at all times. Contractor is required to notify City of major component failures (such as mainlines, pumps, controllers, and mainline control valves) within twentyfour (24) hours of occurrence. b. Contractual irrigation systems inspections, adjustments and repairs shall include automatic valves, electrical circuiting to valves, filter and filter screen cleaning main line maintenance, lateral line maintenance, sprinkler head height, nozzle spray pattern, nozzle cleaning and replacement, bubbler head adjustment, flush valve repair, cleaning and replacement, tree well repair; and drip emitter cleaning, replacement, and removal and plugging if plant is not to be replaced.

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 714 of 1306 Landscape and Lighting District Scope of Services Page | 4 c. The contractor shall maintain a log of current sprinkler station times. A copy of the log shall be given to the Contract Administrator after routine inspection. The log shall include, but not be limited to:

1. Controller location

2. Scheduled days to run

3. Start times

4. Station location

5. Each station’s run time

6. End time

7. Contractor’s employee initial and date
d. Non-contractual irrigation repairs shall be approved first by the City. Parts will be billed at “cost plus 15%”. All billings to the City shall be accompanied with an itemized invoice describing labor hours at the contract rate, materials costs with copies of material invoices from the suppliers(s), the location, date and time of the repair, and a work description of the repair. Each repair shall be billed separately. e. All irrigation systems shall be tested, adjusted, and cleaned as often as necessary to guarantee proper moisture levels at all times. A schedule shall be submitted at the start of the contract showing the location, day of week and time of day that each system will be tested. Any changes shall be submitted for approval prior to enactment. Contractor will be responsible for damages and costs due to underwatering and over-watering. Irrigation systems are to be adjusted as often as necessary to assure:

1. Adequate coverage of all landscape areas

2. Prevent excessive runoff and/or erosion

3. Prevent watering of all non-vegetative areas
f. The contractor shall maintain a reasonable inventory of commonly required repair parts on the service vehicle(s) in order to facilitate prompt irrigation system repairs.
g. All malfunctioning controllers, quick couplers, automatic valves and sprinkler heads must be repaired within eight (8) hours following identification and verbal notification to the City's Contract Administrator of the cost for the repair. All replacements shall be with the original type and model materials unless a substitute is approved by the Contract Administrator.

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 715 of 1306 Landscape and Lighting District Scope of Services Page | 5 h. Contractor employees shall report and flag all water leaks and/or system malfunctions to the irrigator for immediate repair.
i. The Contractor shall immediately turn off irrigation systems during periods of rainfall and at times when suspension or irrigation is desirable to conserve water while remaining within the guidelines of good horticulturally acceptable maintenance practices.
j. Washout from irrigation failure issues onto sidewalks, pavement and/or into rightof-way shall be addressed in conjunction with repairs to the irrigation. Erosion and/or damages to the landscape shall be similarly addressed in conjunction with the repair.

SECTION B-TURFGRASS MAINTENANCE
B-1. All turf areas are to be mowed to maintain a consistent turf height of 1 inch except in specific areas where it must be maintained shorter. The height of cutting shall be maintained consistently to prevent scalping or burn. The mowing height shall be appropriate to the turf species. In normal circumstances, the grass cuttings need not be removed, but, when an inordinate amount of cut grass is evident, removal may be requested. Divots, ruts, holes and depressions found in turf shall be remedied immediately. Mowing patterns shall be alternated to avoid creating ruts and compaction.

All lawn edges along sidewalks and curbs shall be edged before each mowing as required for appearance. Edging shall be performed with a blade type mechanical edger or Line trimmer.

The cut edge should appear as a clean, straight line. A monofilament line trimmer shall be used to trim around obstacles within the lawn area. Care shall be taken to insure that the bark of trees and shrubs are not damaged or stripped by the line trimmer. Lawn sprinkler heads shall only be edged to allow for proper distribution of water.

B-2. All turf areas are to be aerified by removing ½" diameter cores, not more than 6" apart and to a depth of 6 inches in the month of March and additional times if required by Level of Service. This shall be considered a specialty-type item, requiring a written schedule of the aeration process to the Contract Administrator before work commences.

B-3. A complete, chemical fertilizer shall be applied according to Level of Service to all turf areas with each application providing one pound of actual Nitrogen for each 1,000 square feet.

Turf fertilizer applications for all locations will be in January. Fertilizer application will require prior notification of the Contract Administrator. Pre-emergent herbicide combination may be necessary from late February/early March depending on rainfall and weather.

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 716 of 1306 Landscape and Lighting District Scope of Services Page | 6

SECTION C-PLANT CARE
C-1. All shrubs shall be selectively pruned as to maintain natural form. No hedging or shearing will be permitted, unless authorized. Dead branches and foliage shall be removed, as thinning cuts, as opposed to rounding the plant by tipping. When pruning shrubs that show evidence of disease; disinfect pruning equipment between jobs. Where disease is severe, disinfect pruning equipment in between cuts. Dead flower stalks shall be pruned from plants at the conclusion of flowering. If plants (such as agaves) die after flowering, Contractor will remove the entire plant and, if needed, shall repair the irrigation and backfill the hole. Major shrub pruning will take place at the optimum time for each plant and minor adjustments made as often as necessary to prevent sidewalk (horizontally and vertically to meet ADA requirements), street and sign obstruction. Many perennials, grasses, and shrubs need to be cut back severely to control size and to look their best. This is often done just prior to the new spring growth surge. The Landscape Contractor shall render renewal pruning at appropriate times. For proper plant care follow the recommendations in Pruning, Planting & Care by Eric A. Johnson, published by Ironwood Press.

C-2. Hedging is only when authorized. Rows of shrubbery shall be maintained as a hedge.

Hedges shall be trimmed with mechanical hedge trimmers to maintain uniformity on all accessible sides. Hedges shall not be cut back to leafless, woody, growth, unless directed by the City.

C-3. Groundcovers may be trimmed with hedge shears or mechanical edgers, only when authorized. Hand pruners are to be used so that the appearance is as natural as possible.

C-4. Any plant material that dies or is aesthetically undesirable due to Contractor negligence or poor cultural practices must be replaced with like size, number and species within 5 working days. The replacement of plant material loss outside of the Contractor’s control, (i.e. vandalism) is not a contractual obligation.

SECTION D-TREE CARE
D-1. The Contractor is only responsible for tree work under fifteen (15) feet in height for safety and sucker control only. Palm trees less than fifteen (15) feet in height are the responsibility of the Contractor. All other tree pruning will be addressed under a separate contract, including palm trees. Dead palm fronds and seedpods however, shall be removed from trees less than fifteen (15) feet as they appear.
a. Trees shall be pruned as needed to remove broken or diseased branches, or for traffic and pedestrian safety. Sidewalk clearance will be eight (8) feet and vehicular clearance fourteen (14) feet from grade. Trees must be maintained at seven (7) feet from playground equipment. Any broken, structurally unsound or detached limb is considered a hazard. Suckers will be removed as they appear.

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 717 of 1306 Landscape and Lighting District Scope of Services Page | 7 b. When pruning trees that show evidence of disease; disinfect pruning equipment between jobs. Where disease is severe, disinfect pruning equipment in between cuts.
c. Any tree trimming performed at the request of the City shall be consistent with the current and applicable International Society of Arboriculture (ISA) guidelines, the American National Standards Institute (ANSI) standards to promote proper form, strength, health, and appearance consistent with the intended use. No trimming will be conducted without onsite inspection of City staff. d. The Contractor shall be responsible for all tree staking. Ties will be monitored to prevent girdling. Remove ties and stakes as directed by the City. Broken stakes are to be removed and if appropriate, replaced. Stakes should not remain on the trees longer than 6 months. If the tree cannot stand upright once stakes are removed, the City will then determine whether or not to replace the stakes or remove the tree.
e. The Contractor shall be held responsible for any damages done to trees due to poor management and/or maintenance practices.
f. Any trees broken or damaged as a direct result of storm damage, wind, accident or vandalism shall be pruned and/or removed within 24 hours of notification and may be considered an Extra to the Contract. Any debris or low tree limbs blocking roadways, stop signs or parking areas shall be removed within one hour of notification to Contractor.
g. Failure(s) of any kind with regard a tree shall be reported immediately to a City arborist.

SECTION E-ISLAND AND MEDIAN MAINTENANCE
E-1. Specifics throughout the scope of work shall apply to Island and median maintenance. The City of Indio Islands and medians are as diverse as its parkways and are to be maintained to a safe, clean, pleasing and desirable appearance. Care shall be taken so that plants do not become line of sight barriers, shrubbery and trees do not encroach into the street vehicular travelway, traffic signs, markings and signals are never obstructed, ground covers do not extend past curb, trash and debris is removed on the frequency basis per contract, abandoned shopping carts are taken to a safe zone with the City of Indio Code Enforcement notified, and weeds in planter and hardscape are controlled and eliminated.

SECTION F-WEED ABATEMENT
F-1. All areas are to be kept in a weed free condition at all times. Chemical control for any unwanted vegetation may be applied on an as-needed basis. Weeds growing in cracks on sidewalks, streets, or gutters adjacent to areas covered in this contract must be controlled with

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 718 of 1306 Landscape and Lighting District Scope of Services Page | 8 herbicides. Pre-emergent may be applied as needed. All chemical applications shall be done by a licensed applicator in accordance with all applicable Federal, State, and County laws and regulations.

SECTION G-INSECT, PEST, AND RODENT CONTROL
G-1. For safety reasons, sidewalks, decomposed granite pathways, parkways, playground safety surfaces, picnic areas, hardscape, turf and planter areas shall be inspected for the presence of insects, pests and rodents. The elimination of mounding and holes generated by insects, pests and rodents shall be included in the scope of services.

SECTION H-HARDSCAPE AND PATHWAY MAINTENANCE
H-1. Hardscape/pathway maintenance is defined to include the maintenance of any sidewalk, pathway, or concrete surface under the care of the Contractor to include the removal and disposal of dirt, mud, trash and debris and the maintenance of proper grades.

H-2. Hardscape shall be maintained so as to be free of debris. All debris shall be removed from the site and disposed of at the end of each day at a location the Contractor shall disclose to the City.

H-3. At no time shall any irrigation apparatus under the care of the Contractor be adjusted to spray upon, or flood, any hardscape element or pathway.

H-4. Decomposed granite and dirt pathways shall be maintained to be free of debris, ruts and depressions.

H-5. Pathways eroded by rain shall be restored and graded within one business day of the conclusion of inclement weather. Contractor shall use displaced materials in the restoration of eroded pathways.

H-6. The Contractor shall display standardized warning signage when staging or working in any area that is subject to pedestrian or vehicular traffic.

H-7. The Contractor shall report, in writing, any condition that presents a trip hazard to Pedestrians on any hardscape element under the care of the Contractor to the General Parks Maintenance Supervisor or designated representative.

SECTION I-TRASH PICK-UP AND TRASH CAN MAINTENANCE
I-1. Contractor shall remove trash, debris, animal feces, and dead plant material from parkways, turf areas, hardscapes, pathways, medians, tot-lots, gutters, and retention areas by Level of Service frequency.

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 719 of 1306 Landscape and Lighting District Scope of Services Page | 9 I-2. Trash receptacles shall be emptied and relined by Level of Service frequency. Trash receptacle cover lids shall be wiped clean in conjunction with the servicing.

I-3. Following a storm event, water retention basins shall be serviced for trash and debris clean-up as soon as the water recedes. Parkways, turf areas, hardscapes, pathways, medians, tot-lots shall be inspected after a storm event for removal of trash, debris, and dead plant material.

SECTION J-AMENITY CARE
J-1. The City requires that City maintained tot-lots within the District be examined and any unwanted material removed. Wood chip is to be raked and care taken to assure an even dispersion of the chip. Weeds shall be removed immediately. Pour-in-place surfacing is to be blown. In the event of a flooding that displaces wood chip, the displaced chip shall be gathered, cleaned of any unwanted material, and redistributed to the tot-lot.

J-2. Tables and bench amenities within District retention basins and common areas must be cleaned of soiling from spills, food, dirt and grime. Hardscape surfaces associating with amenities shall be similarly cleaned.

J-3. Pet Waste Stations located in District retention basins and common areas are to be serviced. The City shall provide pet waste bags and trash liners for pet station receptacles and waste containers.

J-4. Abandoned shopping carts are to be taken to a safe space zone, with the City of Indio Code Enforcement notified.

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 720 of 1306 Landscape and Lighting District Scope of Services Pa ge | 10 Landscape and Lighting District Service Levels
City Project Number:  LM‐LLD
Maintenance Frequencies

SCOPE OF WORK

MAINTENANCE ACTIVITY
Level
A
Services
Level
B
Services
Level
C
Services

PLANTERS/PARKWAYS/

MEDIANS
Plant Maintenance 1x Weekly 2x Monthly 1x Monthly
Rake 1x Weekly 2x Monthly 1x Monthly
Weed Control As Needed As Needed As Needed
Remove Debris/Litter 3x Weekly 2x Weekly 1x Monthly
Fertilize 2x Yearly 1x Yearly 1x Yearly
TURF   Mow & Edge 1x Weekly 1x Weekly 1x Weekly
Aerify 3x Yearly 2x Yearly 1x Yearly
Fertilize 3x Yearly 2x Yearly 1x Yearly
TOT‐LOT SAFETY

SURFACING
Rake Wood Chip/Sand 1x Weekly 1x Weekly 1x Weekly
Remove Debris/Litter 1x Weekly 1x Weekly 1x Weekly
HARDSCAPE Remove Debris/Litter 3x Weekly 2x Weekly 1x Weekly Blow 3x Weekly 2x Weekly 1x Weekly
Remove Weeds As Needed As Needed As Needed

DECOMPOSED GRANITE

PATHWAYS
Remove Debris/Litter 1x weekly 2x Weekly 1x Monthly
Rake 1x weekly 2x Weekly 1x Monthly
Remove Weeds As Needed As Needed As Needed
PARKING LOT Remove Litter/Debris 3x Weekly 2x Monthly 1x Monthly Clean Gutters/Curbs 1x Weekly 2x Monthly 1x Monthly
Remove Weeds As Needed As Needed As Needed
PARK AMENITIES Wood chip, sand and
pour‐in‐place
1x Weekly 1x Weekly 1x Weekly
PET WASTE STATIONS Pet waste bags,
attached receptacles
3x Weekly 2x Weekly 1x Weekly
TRASH CANS Remove Trash 7x Weekly 3x Weekly 1x Weekly
Replace Liner 7x Weekly 3x Weekly 1x Weekly
Clean Trash Can 1x Weekly 2x Monthly 1x Monthly
IRRIGATION SYSTEM Inspect/Adjust 1x Weekly 1x Weekly 1x Weekly PEST CONTROL Ants/Gophers/Etc. As Needed As Needed As Needed

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 721 of 1306 City Project No. LMLLD City of Indio

EXHIBIT B

CONSIDERATION

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 722 of 1306 Landscape and Lighting District Landscape Maintenance Pricing Form City Project Number: LM-LLD
P r' N Conserve LandCare LLC ropose s ame: ____________________ _ To the Honorable Mayor and Members of the City Council:

The undersigned proposes to furnish all labor, materials, supplies, equipment, and/or services set forth herein, subject to all conditions outlined in the RFP, at the prices listed below:

PROPOSAL {based on attachments 1-4. exclude attachment 6 from bid price):

PRICING SCHEDULE

FOR LANDSCAPE MAINTENANCE SERVICES FOR LANDSCAPE AND LIGHTING DISTRICTS Line Service
Item LLD Description Level Monthly Price Annual Price
Ll Sundance LLD #1 C $ 706.00 $8,472.00
L2 Sun Tree Ranch LLD #2 C $ 185.00 $2,220.00
L3 Park Paseo LLD #3 A $ 629.00 $7,548.00
L4 Jackson Park LLD #4 C $ 479.00 $5,748.00
LS Pacesetter LLD #5 C $ 185.00 $2,220.00
L6 Whispering Palms LLD #6 B $ 898.00 $10,776.00
L7 Palmwood LLD #7 C $ 168.50 $2,022.00
L8 Lumberman's Business Park LLD #8 C $ 663.00 $7,956.00 L9 Pan American LLD #9 A $ 907.00 $10,884.00
LlO Liberty Village / Desert Song LLD #10 B $ 581.00 $6,972.00 Lll Santa Fe LLD #11 C $ 807.00 $9,684.00
L12 Park Madison LLD #12 A $ 338.00 $4,056.00
L13 Indio Center Plaza LLD #13 A $ 218.00 $2,616.00
Landscape and Lighting Distri c t Landscape Maintenance Pricing Form Page 11

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 723 of 1306 Line
Item
L14
L15
L16
L17
L18
L19
L20
L21
L22
L23
L24
L25
L26
L27
L28
L29
L30
L31
L32
L33
L34
L35
L36
L37
L38
L39
L40
L41
Service
LLD Description Level Monthly Price Annual Price
Wildflower LLD #14 A $ 283.00 $3,396.00
Villa Pacific LLD #15 C $ 164.00 $1,968.00
Zalay Ranch LLD #16 C $ 272.50 $3,270.00
Highway 111 LLD #17 A $ 602.00 $7,224.00
Encanto Homes LLD #18 A $ 493.00 $5,916.00
Palm Meadows LLD #19 C $913.00 $10,956.00
El Cid LLD #20 C $ 163.00 $1,956.00
Santa Rosa LLD #21 A $1,605.00 $19,260.00
Riverbend LLD #22 C $ 136.00 $1,632.00
: �&t'.ns�;�7-i !;.� ,"• _.,, <' }�-
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California Palms LLD #24
Verandas LLD #25
Rincon Homes LLD #26
Summer Place LLD #27
California Palms II LLD #28
Cheyenne Ranch LLD #29
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1 �-! �d··t{'. �-��f�-.;� !} i · ,t-:!\; :�J�:'�_�·}:f:+: }��.; . � .. -�� .1,.:,_· ._-.::-
�:st-.\zf: ... ,.,f,. ;-:
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Waring Palms LLD #31
Montego Dunes LLD #32
Villa Estates LLD #33
Madison Ranch LLD #34
Carta Bella LLD #35
Bella Vida LLD #36
Las Brisas North LLD #37
Villa Montego LLD #38
Monticello II LLD #39
Shadow Hills (Jackson) LLD #40
Sunburst LLD #41
A
C
B
C
C
C
. 'i,·-."• 1\'.""�:.r• .f,.� : . •>':;¥�
��· . � � - ..

C
A
A
B
A
A
A
A
A
A
A
$ 327.00
$ 585.00
$1,274.00
$ 501.00
$ 327.00
$ 819.00
•• . ...... T� A�,�;':.- '°=!iV.{".�. It
.·• �- •;-c � • :-.-:,'11;\":·i
· t�·: -r �t-:'JN s�-�;: ;\.� �-:I�:
$ 382.00
$1,845.00
$1,396.00
$1,680.00,
$ 805.00
$1,881.00
$2,412.00
$8,099.00
$2,855.00
$3,618.00
$1,737.00
$3,924.00
$7,020.00
$15,288.00
$6,012.00
$3,924.00
$9,828.00
; ., "\ ;-J -- ;,,, .••.• ·,,.. � , .
·-•-�1-.1,. ·'"'",r, ... , .. _,. '·I \ .,If-��:,�;:/;,{ r:��'-:;.;:� :,�•-': r'!!i�� $4,584.00
$22,140.00
$16,752.00
$20,160.00
$9,660.00
$22,572.00
$28,944.00
$97,188.00
$34,260.00
$43,416.00
$20,844.00
Landscape and Lighting District Landscape Maintenance Pricing Form p a g e I 2

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 724 of 1306 Service Line
Item LLD Description
.

Level Monthly Price Annual Price
L43 Whittier Ranch LLD #43 A $3,391.00
L44 Palazzo LLD #44 A $2,034.00
l45 Shadows Hills Business Park LLD #45 A $2,080.00
L46 Bella Tierra LLD #46 A $2,234.00
L47 Rancho Verde LLD #47 A $1,234.00
L48 Haciendas/ Patton Park LLD #48 A $ 4,707.00
LSO Desert Trace LLD #50 A $4,340.00
L51 Desert Meadows LLD #51 A $ 562.00
L52 Las Colinas LLD #52 A $ 257.00
LS3 Monroe Street & Avenue 42 LLD #53 A $2,051.00
L54 County Law Building LLD#54 A $ 177.00
TOTAL $65,006.00
Total Annual Price:$ -7-80----- ,072.00 ---
$40,692.00
$24,408.00
$24,960.00
$26,808.00
$14,808.00
$56,484.00
$52,080.00
$6,744.00
$3,084.00
$24,612.00
$ 2,124.00
$780,072.00
Tot a I Annual Price in words: Seven Hundred Eighty Thousand, Seventy Two Dollars Landscape and Lighting District Landscape Maintenance Pricing Form p a g e I 3

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 725 of 1306 Landscape and Lighting District Additional Services Pricing Form City Project Nt1mber: LM-LLD

AMOUNTS NOT TO BE INCLUDED IN BASE PRICE
LABOR
Additional Laborer
Additional lrrigator.

Additional Foreman
..._$_45_-_ _ oo __ perhour
.._$ __
6_
0_.o_o_per hour

75.00 "'-$ ____ per hour
At City's discretion, additional work may be paid for using the contractual hourly rate for labor listed above with a 15% mark up on materials or by using the unit pricing listed below.

PLANT MATERIAL REPLACEMENT
Unless otherwise described, replacement plant material will be whatever is normal and customary for the City of Indio.
1-Gallon Shrub Installed
5-Gallon Shrub Installed
15-Gallon Tree Installed*
24"-Box Tree Installed*
$
$
$

17. 00

45.00 145.00
475.00
Note: Anything over 24" box size will be paid at the contractual hourly rate for labor, and materials at cost plus a 15% mark-up.
*Includes the following: digging of hole, setting of tree, backfilling, watering-in of tree, staking (if needed), and securing with cinch ties

TURF MAINTENANCE
Mowing:

Turf Renovation (no seed):

IRRIGATION SYSTEM REPAIR
Labor & Equipment $ 14.75 per 1,000 sq. ft.

Labor & Equipment $ 14.75 per 1,000 sq. ft.

Non-contractual irrigation repairs will be paid at the hourly rate indicated above and with a 15% mark-up on materials.

AMOUNTS NOT TO BE INCLUDED IN BASE PRICE
Landscape and Lighting District Landscape Maintenance Additional Services Pricing Form p a g e I 1

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 726 of 1306 Landscape and Lighting District Additional Services Pricing Form City Project Number: LM-LLD
The following Landscape & Lighting Districts contain areas of turf. Annually, the City may elect to overseed all or portions of a District grass area. All additional cost for materials, labor and equipment shall be included in the estimated price,

AMOUNT NOT TO BE INCLUDED IN BASE BID
Item DESCRIPTION Turf Square ESTIMATED PRICE
No. Footage TO OVERSEED
Ll Sundance LLD #1 2,221 $ 178.00
L9 Pan American LLD #9 17,170 $ 1,374.00
LlO Liberty Village /Desert Song LLD 6,700 $ 536.00 #10 Lll Santa Fe LLD #11 47,245 $ 3,780.00
Ll9 Palm Meadows LLD #19 46,530 $ 3,722.00
L21 Santa Rosa LLD #21 49,950 $ 3,996.00
L25 Verandas LLD #25 22,420 $ 1,794.00
L26 Rincon Homes LLD #26 76,480 $ 6,118.00
L27 Summer Place LLD #27 43,490 $ 3,479.00
L28 California Palms II LLD #28 6,070 $ 486.00
L32 Montego Dunes LLD #32 21,750 $ 1,740.00
L33 Villa Estates LLD #33 16,890 $ 1,358.00
L34 Madison Ranch LLD #34 77,600 $ 6,208.00
L35 Carta Bella LLD #35 12,740 $ 1,020.00
L36 Bella Vida LLD #36 14,420 $ 1,154.00
L37 Las Brisas North LLD #37 63,900 $ 5,112.00
L38 Villa Montego LLD #38 154,860 $ 12,390.00
Landscape and Lighting District Landscape Maintenance Additional Services Pricing Form p a g e I 2

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 727 of 1306 Item
No.

L39
L41
L43
L44
L47
L48
LS0
Landscape and Lighting District Additional Services Pricing Form City Project Number: LM-LLD
DESCRIPTION Turf Square ESTIMATED PRICE
Footage TO OVERSEED
Monticello II LLD #39 29,130 $ 2,330.00
Sunburst LLD #41 13,460 $ 1,077.00
Whittier Ranch LLD #43 30,710 $ 2,457.00
Palazzo LLD #44 6,030 $ 485.00
Rancho Verde LLD #47 14,150 $ 1,132.00
Haciendas /Patton Park LLD #48 71,620 $ 5,730.00
Desert Trace LLD #SO 18,460 $ 1,477.00
Scalping/Overseeding Procedure: City will determine date for the reduction of water. Begin by lowering the height of turf during scheduled weekly mowing (approximately 3 weeks before final cut). One week before the final cut reduce the water to minimum in the turf areas. Cut turf to a height of½" or lower but do not allow blades to disturb soil. All grass clippings generated from this process will be vacuumed, swept or raked after each cut. No debris will be allowed to "stockpile". A light irrigation syringe will be applied before the final cut to keep the dust levels to a minimum per the Coachella Valley Association of Governments {CVAG) smart seeding guidelines. Actual dates for the scalping will be determined in the field with the Contract Administrator. Schedule will vary due to scheduled field use, condition of fields, and the actual mowing height needed to ensure seed to soil contact.
• The Contractor will request the Contractor Administrator to perform an inspection of the fields before rye seed is applied. The City will verify proper renovation and aeration (if applicable).
• The Contractor shall repair and replace at company expense any irrigation that was damaged or otherwise impacted by the scalping and subsequent clean up. • The scalping process shall be fully completed and approved by the Contract Administrator by the date as agreed upon in scheduling process before any seed may be applied. The Contractor shall supply the seed. The application rate for the seed shall be a minimum of 15 lbs./1000 sq. ft.
• Contractor is responsible for the order, purchase, acquisition, delivery, storage and disbursement of Rye seed.

Landscape and Lighting District Landscape Maintenance Additional Services Pricing Form p a g e I 3

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 728 of 1306 Landscape and Lighting District Additional Services Pricing Form City Project Number: LM-LLD
• Contractor will monitor the irrigation to ensure proper coverage for rye grass germination. The Contractor is responsible for notifying the City of any problems with the irrigation system immediately.

Landscape and Lighting District Landscape Maintenance Additional Services Pricing Form p a g e I 4

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 729 of 1306 City Fund Property Additional Services Pricing Form Page | 2 Landscape and Lighting District Additional Services Pricing Form City Project Number: LM-LLD

ADDITIONAL WORK COMPENSATION

AMOUNTS NOT TO BE INCLUDED IN BASE PRICE
The City may authorize the Contractor to provide additional as-needed services at Landscape and Lighting District Properties up to a total amount of $100,000 per fiscal year.

A breakdown of compensation by Fiscal Year is as follows:

Base Price Add’l as Needed Work Total
FY23/24 (10/1 – 6/30) $585,054 $100,000 $685,054
FY24/25 $780,072 $100,000 $880,072
FY25/26 $780,072 $100,000 $880,072
FY26/27 $780,072 $100,000 $880,072
FY27/28 $780,072 $100,000 $880,072
FY28/29 (7/1 – 9/30) $195,018 $100,000 $295,018
Total Amount: $4,500,360

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 730 of 1306 City Project No. LMLLD City of Indio

EXHIBIT C

TIME OF PERFORMANCE

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 731 of 1306 Landscape and Lighting District Properties Time of Performance Page | 1 City Fund Properties Time of Performance
City Project Number: LM-LLD
This Agreement shall remain and continue in effect for a period of twelve (12) months, unless sooner terminated by the City. The City may extend the Agreement for four (4) additional 12- month periods.

This Agreement shall commence on October 1, 2023 and the initial 12 month period ends on September 30, 2024.

The City may extend the Agreement for four (4) additional 12 month periods. 1st Extension: October 1, 2024 to September 30, 2025
2nd Extension: October 1, 2025 to September 30, 2026
3rd Extension: October 1, 2026 to September 30, 2027
4th Extension: October 1, 2027 to September 30, 2028

Landscape Maintenance Agreements with Conserve LandCare in the amount of... Page 732 of 1306 City of Indio
City Council
September 18, 2023

STAFF REPORT
To: City Council
From: Bryan H. Montgomery, City Manager
Prepared by: Bryan H. Montgomery, City Manager
Subject: Community Benefit Agreement with Shyrne Indio, LLC dba STIIIZY for its City of Indio Cannabis Storefront Retail Business Program Permit RECOMMENDATION:

Approve Community Benefit Agreement with Shyrne Indio, LLC dba STIIIZY for its City of Indio Cannabis Storefront Retail Business Program Permit
SUMMARY:

Council approval consideration of the required Community Benefit Agreement for Shyrne Indio, LLC dba STIIIZY
BACKGROUND INFORMATION:

On July 26, 2023, the City Council, at a duly noticed special meeting, approved the award and issuance of a City of Indio Cannabis Storefront Retail Business Program Permit to Shyrne Indio, LLC dba Stiiizy.

Section 126.33 (C) of the City of Indio Municipal Code specifies that prior to operating in the city and as a condition of issuance of a permit, the operator of each cannabis facility shall enter into an operational and/or community benefit agreement with the city setting forth the terms and conditions under which the cannabis facility will operate that are in addition to the requirements of this chapter, including, but not limited to, public outreach and education, community service, payment of fees and other charges as mutually agreed, and such other terms and conditions that will protect and promote the public health, safety and welfare. Therefore, prior to the City Manager's issuance of a City of Indio Cannabis Storefront Retail Business Program Permit for the five (5) awarded Permit recipients, City Council approval is required for the Community Benefit Agreement for each recipient.

Following the City Council's action on July 26, 2023, the City Manager's Office, City Attorney's Office and Community Development Department collaborated on the development of a draft Community Benefit Agreement document. This document was intentionally prepared to be utilized for all five (5) of the approved Cannabis Storefront Retail Business Program Permit recipients with the only substantive changes between agreements being the business, name, location, contact information and signatory (ies) information.

On August 18, 2023, City Manager Montgomery, City Attorney Graham and Community Development Director hosted a virtual meeting with all five (5) of the recipients to discuss and answer questions regarding the draft community benefit agreement. The draft agreement was provided in advance to AGENDA ITEM #9.4
Community Benefit Agreement with Shyrne Indio, LLC dba STIIIZY for its C... Page 733 of 1306 the recipients to help them prepare for the meeting. The recipients had a limited number of questions pertaining to automobile liability insurance requirements and frequency of required payments for gross receipts. Following this meeting, a final version of the Agreement was sent to each of the recipients for review and signature.

The Community Benefit Agreement specifies the roles and responsibilities of the City of Indio and of the Cannabis Storefront Retail Business Program Permit recipient. Section 3 (Community Benefits Payment) of the Agreement specifies the required payment of six (6) percent of gross receipts for a fiscal quarter to the City of Indio. These payments can be made more frequently than quarterly, but at a minimum, quarterly payments are required.

The City Manger's Office has identified a possible utilization of the aforementioned gross receipts payments subject to City Council concurrence. Specifically, this approach would allocate five (5) percent of the required six (6) percent payment to the City's General Fund to be used primarily for public safety and would allocate the remaining one (1) percent in the following manner: a) .25% to the Coachella Valley History Museum; b) .25% to the Indio Performing Arts Center; c) 25% to to the Coachella Valley Art Center; and d) .25% to the Indio Economic Development Corporation.

Section 5 (Additional Community Benefits) of the Agreement specifies that each recipient will agree to provide during each calendar year, or portion thereof, that this Agreement is in effect additional community benefits to nonprofits and civic organizations that primarily operate or provide services within the City of Indio equal to one (1) percent of gross receipts. This Section further specifies that within sixty (60) calendar days after the end of each calendar year, each recipient shall provide written documentation to the satisfaction of the City Manager or designee that the recipient has met the obligations of this Section 5.

The Community Benefit Agreement for Shyrne Indio, LLC dba STIIIZY for its City of Indio Cannabis Storefront Retail Business Program Permit comprehensively meets the requirements of Section 126.33 (C) of the City of Indio Municipal Code. The City Council's approval of this Agreement is the final Council action needed prior to the City Manager's conditional approval of City of Indio Cannabis Storefront Retail Business Program Permit for Shyrne Indio, LLC dba STIIIZY.

ATTACHMENTS:

Attachment1_IndioCommunityBenefitAgreement_ShryneIndioLLCdbaSTIIIZY APPROVAL(S):

Steven Graham, City Attorney Approved - 06 Sep 2023
Bryan H. Montgomery, City Manager Approved - 07 Sep 2023

Community Benefit Agreement with Shyrne Indio, LLC dba STIIIZY for its C... Page 734 of 1306

COMMERCIAL CANNABIS BUSINESSES

COMMUNITY BENEFITS AND

NEIGHBORHOOD COMPATIBILITY AGREEMENT
This Community Benefits Agreement (“Agreement”) is entered into as of September ___, 2023 (the “Effective Date”) by and between the CITY OF INDIO, a municipal corporation of the State of California (hereafter “City”) and SHYRNE INDIO, LLC, doing business as STIIIZY (hereafter “Operator”).

A. Concurrent with the execution of this Agreement, the City issued Operator a Commercial Cannabis Business Permit (the “CCBP”) for Operator to operate a cannabis retail facility at 82900 Avenue 42, Suites G103-106 in the City of Indio, California (the “Facility”).

B. Operator acknowledges and agrees that the City would not have approved the CCBP if Operator had not agreed to comply with all of the conditions of the CCBP, including (but not limited to) its obligation to enter into this Agreement.

C. Operator also acknowledges and agrees that, prior to its application for a Commercial Cannabis Business Permit from the City to operate the Facility, Operator was fully aware of its obligation to enter into a binding Community Benefit Agreement with the City consistent with the terms of this Agreement, and Operator chose to move forward with such application process.

NOW, THEREFORE, in consideration of the foregoing Recitals which are hereby incorporated into the operative provisions of this Agreement by this reference and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the City and the Operator agree as follows:

Section 1. PURPOSE. The purpose of this Agreement is to memorialize Operator’s commitment to provide Community Benefits to the City of Indio in accordance with Chapter 123 (Cannabis Business Activities) of the Indio Municipal Code.

Section 2. TERM. The term (“Term”) of this Agreement begins on the Effective Date, and it expires upon the earliest of any of the following:

A. the revocation or termination of the CCBP and the entry of the final court judgment of any litigation challenging such revocation or termination; B. the effective date of the final court judgment ruling that the CCBP is invalid; or

Community Benefit Agreement with Shyrne Indio, LLC dba STIIIZY for its C... Page 735 of 1306

City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement C. the effective date of any change in the law that invalidates the CCBP or that prohibits sales of cannabis or cannabis products at the Facility.

Notwithstanding any language in this Section 2 to the contrary, the provisions of Section 20 of this Agreement shall survive the termination of the Agreement for a period of five (5) years.

Section 3. COMMUNITY BENEFITS PAYMENT. Starting upon the issuance of a Certificate of Occupancy or Temporary Certificate of Occupancy, and continuing until the termination of this Agreement, Operator shall make no less than quarterly community benefit payments (each a “Payment”) to the City in the amount of SIX PERCENT (6%) of gross receipts for the quarter, or portion thereof, during the Term beginning on the date the certificate of occupancy is issued to the Facility.

Operator may make payments more frequently than quarterly, but shall, at a minimum, make quarterly payments as prescribed herein.

When Operator makes a Payment to the City, Operator shall include with the payment a financial statement in a form acceptable to the city showing the Facility’s gross receipts upon which the calculation for the Payment is made.

For the months of January through March of each year, the Payment shall be due on the last City business day of the following month April.

For the months of April through June of each year, the Payment shall be due on the last City business day of the following month July.

For the months of July through September of each year, the Payment shall be due on the last City business day of the following month October.

For the months of October through December of each year, the Payment shall be due on the last City business day of the following month January.

Notwithstanding the above, in the event the City enacts a tax on cannabis retail business activity at a rate higher than is generally applicable to all other retail business activity in the City, then the Parties agree to negotiate in good faith to amend this Agreement to reduce the amounts described in sections A and B by the amount of such new taxes on cannabis retail business activity. For example, if the City were to enact a 10% tax on gross receipts of cannabis retail businesses, then the Parties would negotiate a reduction in Section A If, on the other hand, the City enacted a generally applicable sales tax increase of 1% on all retail business activity in the City, then no change to the above would be required.

If the City voluntarily issues a Commercial Cannabis Business Permit to an entity operating a retail cannabis business other than Operator, the Parties agree to engage in good faith negotiations to amend this Agreement to ensure that Operator is not

Community Benefit Agreement with Shyrne Indio, LLC dba STIIIZY for its C... Page 736 of 1306

City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement obligated to payment of community benefits at a higher rate than the other retail cannabis business.

For the purposes of this Agreement, gross receipts includes the total of amounts actually received or receivable from sales within the City and the total amounts actually received or receivable for the performance of any act or service within the City, of whatever nature it may be, for which a charge is made or credit allowed, whether or not such act or service is done as a part of or in connection with the sale of materials, goods, wares or merchandise. Included in gross receipts shall be all receipts, cash, credits and property of any kind or nature, without any deduction therefrom on account of the cost of the property sold, the cost of materials used, labor or service costs, interest paid or payable, or losses or other expenses whatsoever. Excluded from gross receipts shall be the following:
(1) Cash discounts allowed and taken on sales.
(2) Credit allowed on property accepted as part of the purchase price, if the property may later be sold.
(3) Any tax required by law to be included in or added to the purchase price and collected from the consumer or purchaser.
(4) Such part of the sale price of property returned by the purchaser upon rescission of the contract of sale as is refunded either in cash or by credit.

Section 4. VERIFICATION OF GROSS RECEIPTS. During the term of this Agreement and for three years following its expiration, the City Manager or his/her designee may request copies of Operator’s state and federal tax returns, cash-flow reports, financial statements, income statements, books, journals, and other financial records for the Operator (“Financial Records”) to enable the City Manager to independently verify Operator’s Gross Receipts during the period for which any Payment is made. Within thirty (30) calendar days after receiving the City Manager’s written request for Financial Records under this section, Operator shall provide the City Manager copies of all Financial Records requested by the City Manager. If the City Manager determines that Operator has underpaid any Payment, Operator shall pay the City the balance owed, as determined by the City Manager, within thirty (30) calendar days following a written request for payment from the City Manager. Operator’s obligations shall survive the expiration of this Agreement.

Section 5. ADDITIONAL COMMUNITY BENEFITS. Operator agrees to provide during each calendar year, or portion thereof, that this Agreement is in effect additional community benefits to nonprofits and civic organizations that primarily operate or provide services within the City of Indio equal to ONE PERCENT (1%) of gross receipts. Within sixty (60) calendar days after the end of each calendar year,

Community Benefit Agreement with Shyrne Indio, LLC dba STIIIZY for its C... Page 737 of 1306

City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement Operator shall provide written documentation to the satisfaction of the City Manager or designee that Operator has met the obligations of this Section 5.

In lieu of the performance of the obligation above, the Operator may, after written notification to the City, elect to include an additional payment to the City in the amount of with each quarterly Community Benefits Payment, which the City will make available to nonprofits and civic organizations operating within the City of Indio.

Section 6. DEPOSIT AND USE OF PAYMENTS. City Manager will ensure that all Payments are deposited in an account administered by the City. The use and allocation of all Payment revenues, and any interest that accrues thereon, will be determined by the City of Indio in its sole discretion. All payments, and all interest that accrues thereon, shall be the property of the City.

Section 7. NEIGHBORHOOD COMPATIBILITY.

A. Conditions of Permit Approval Incorporated. Conditions placed on the Commercial Cannabis Permit issued to the Operator are hereby incorporated into this Agreement as though set forth herein in full and shall be conditions of this Agreement. Violations of the Commercial Cannabis Permit and/or any State License issued to the Operator for Operator’s Cannabis Business shall be deemed violations of this Agreement and shall constitute a material breach of this Agreement.

B. State License(s) and City Permit(s). The Operator shall obtain and maintain at all times during the Term of this Agreement a valid Commercial Cannabis Permit, and all applicable State License(s) required by the State Cannabis Laws for Operator’s Cannabis Business.

1. State License(s). As soon as practicable, the Operator shall inform the City when it obtains all applicable State License(s) and shall provide a copy of the State License(s) to the Director. The City shall cooperate with the Operator as appropriate and as needed to facilitate the State’s issuance of a State License(s) to the Operator for Operator’s Cannabis Business.

2. City Permit(s). The City shall diligently process the Operator’s applications for all City Permits. This Agreement does not commit the City in advance to approve the City Permits; nor does this Agreement constrain the City’s discretion to determine compliance with all requirements regarding issuance of any City Permits. Nothing in this Agreement relieves the Operator of the obligation to comply with all requirements and application procedures set forth in the Indio Municipal Cod, other applicable rules and regulations and/or the Cannabis Regulations.

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement C. Compliance with Applicable Law. The Operator understands, acknowledges and agrees to comply with all applicable state and local laws, rules and regulations applicable to operation of Operator’s Cannabis Business, including, without limitation, the Cannabis Regulations.

D. Operational Requirements. In addition to all operating requirements set forth in the Cannabis Regulations, the Operator shall comply with the following specific operational requirements:

1. Notification Regarding Criminal Activity. The Operator shall immediately notify the and the City of Indio Police Department of any criminal activity, or suspected criminal activity, occurring at the Subject Property. In the event of any internal security system breach, including a faulty alarm system, broken or damaged surveillance cameras or other video recording equipment, or broken or damaged locks, doors, or lighting which may increase risk of criminal activity at the Subject Property, the Operator or the Manager of Operator’s Cannabis Business shall notify the Indio Police Department as soon as practicable after becoming aware of the security system breach. The Operator shall diligently attempt to fix or resolve any such security breach immediately; if circumstances require additional time and delay to remedy, the Operator shall so notify the Indio Police Department and provide an estimated timeline of when the breach will be cured.

2. Notification Regarding Criminal Threats. If the Operator receives any criminal threats, or otherwise suspects any criminal targeting related to movement of Cannabis or Cannabis Product or cash from or to the Subject Property, the Operator shall immediately notify the Indio Police Department.

3. Site Inspections. The City Manager or any other authorized representative, official, officer, or agent of the City of Indio may perform site inspections of Operator’s Cannabis Business and the Subject Property during hours of operation with no advance notice required. The scope of the inspection shall be to ensure compliance with all conditions on Operator’s Cannabis Business, including compliance with State Cannabis Laws, such as but not limited to, track and trace requirements, product storage, labeling, and disposal of product, as well as accounting, ledgers for distribution, and other records and operating procedures. The Operator shall provide proof, including through visual observation and confirmation by City staff, of any storage, disposal or distribution of cannabis and/or cannabis product as may be necessary to ensure compliance. Should the City discover any evidence of falsification of records or other practices inconsistent with the Cannabis

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement Regulations and/or the State Cannabis Laws, the Commercial Cannabis Permit may be suspended in accordance with the Cannabis Regulations, in which event, the Operator shall, upon written notice from the City, immediately cease and desist operations until such time that the issues have been resolved to the satisfaction of the City.

Section 8. ANNUAL INSPECTION AND FEE. Pursuant to Subsection 123.34.A of the Indio Municipal Code, Operator shall maintain accurate books and records in an electronic format, detailing all of the revenues and expenses of the business, and all of its assets and liabilities for a period not less than seven years. On no less than an annual basis (at or before the time of the renewal of a cannabis business permit issued pursuant to this chapter), or at any time upon reasonable request of the city, each cannabis business shall file a sworn statement detailing the number and amount of sales by the cannabis business during the previous 12-month period (or shorter period based upon the timing of the request), provided on a per-month basis.

The statement shall also include gross sales for each month, and all applicable taxes and/or fees paid or due to be paid. On an annual basis, Operator shall submit to the city a financial audit of the business's operations conducted by an independent certified public accountant. Operator shall be subject to a regulatory compliance review and a gross receipts financial audit, where applicable, as determined by the city. Operator shall pay the Annual Regulatory Fee for Cannabis Storefront Business Permit Recipients as established by the City Council.

Section 9. ASSIGNMENT. Operator’s obligations under this Agreement shall be binding upon Operator’s successors and assigns. Operator shall not assign this Agreement, or any of its obligations under this Agreement, to any other person or entity without the advance written approval of the City, which shall be within its sole discretion to provide.

Section 10. NO THIRD-PARTY BENEFICIARIES. Nothing in this Agreement confers and rights or obligations on any person or entity that is not a party to this Agreement.

Section 11. COUNTERPARTS. The Agreement may be executed in counterparts.

Section 12. GOVERNING LAW. This Agreement shall be governed by the laws of the State of California.

Section 13. VENUE. Because the Facility will be located in Riverside County, Operator and City agree that any legal action relating in any way to this Agreement or the CCBP may only be brought and maintained in the Riverside County Superior Court.

Section 14. NOTICES. All notices which are allowed or required to be given hereunder shall be in writing and (1) shall be deemed given and received when personally delivered or (2) shall be deemed given when the same are deposited in the United States mail, with postage prepaid, to be sent by registered or certified mail or overnight mail service, addressed to the applicable designated person by one party to the other in

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement writing, and shall be deemed received on the second business day after such mailing.

If to City: City of Indio
100 Civic Center Mall
Indio, CA 925001
If to the Operator: Shyrne Indio, LLC
2001 S. Alameda Street
Los Angeles, CA 90058
Section 15. SEVERABILITY. If any part of this Agreement is declared invalid for any reason, such invalidity shall not affect the validity of the remainder of the Agreement. The other parts of this Agreement shall remain in effect as if this Agreement had been executed without the invalid part. The City and the Operator intend and desire that the remaining parts of this Agreement continue to be effective without any part or parts that have been declared invalid.

Section 16. NEGATION OF CITY. The City and the Operator acknowledge that, in entering into and performing under this Agreement, each is acting as an independent entity and not as an agent of the other in any respect. Nothing contained herein or in any document executed in connection herewith shall be construed as making the City and the Operator joint venturers, partners or employer/employee.

Section 17. WAIVER. No waiver of any provision of this Agreement shall be effective unless in writing and signed by a duly authorized representative of the party against whom enforcement of a waiver is sought.

Section 18. SECTION HEADINGS. The section headings contained in this Agreement are for convenience and identification only and shall not be deemed to limit or define the contents to which they relate.

Section 19. TIME OF ESSENCE. Time is of the essence of this Agreement, and all performances required hereunder shall be completed within the time periods specified. Any failure of performance shall be deemed as a material breach of this Agreement.

Section 20. INDEMNIFICATION. To the fullest extent permitted by law, the City shall not assume any liability whatsoever with respect to having issued a Commercial Cannabis Business Permit pursuant to this article or otherwise approving the operation of any Commercial Cannabis Business. The Operator agrees to indemnify, defend (at Operator’s sole cost and expense), and hold the City and its officers, officials, employees, representatives, and agents harmless, from any and all claims, losses, damages, injuries, liabilities or losses which arise out of, or which are in any way related to the City’s issuance of the Commercial Cannabis Business Permit, the City’s decision to approve the operation of the Commercial Cannabis

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement Business or activity, the process used by the City in making its decision, or the alleged violation of any federal, state or local laws by the Commercial Cannabis Business or any of its officers, employees or agents. Operator shall reimburse the City for all costs and expenses, including but not limited to legal fees and costs and court costs, which the City may be required to pay as a result of any legal challenge related to the City’s approval of the Operator’s Commercial Cannabis Business Permit, or related to the City’s approval of a Commercial Cannabis Activity. The City may, at its sole discretion, participate at its own expense in the defense of any such action, but such participation shall not relieve any of the obligations imposed hereunder.

Section 21. INSURANCE.

A. Prior to execution of this Agreement by City, Operator shall obtain and maintain during the performance of this Agreement the insurance coverages as specified in EXHIBIT A attached hereto and incorporated herein by this reference, issued by a company satisfactory to the Risk Manager, unless the Risk Manager waives, in writing, the requirement that Operator obtain and maintain such insurance coverages.

B. Prior to commencement of any construction under this Agreement, Operator shall file with the Risk Manager evidence of insurance coverage as specified in EXHIBIT A. Evidence of insurance coverage shall be forwarded to the Risk Manager, addressed as specified in EXHIBIT A.

C. Maintenance of proper insurance coverages by Operator is a material element of this Agreement. Operator's failure to maintain or renew insurance coverages or to provide evidence of renewal may be considered as a material breach of this Agreement.
[Signature Page Follows]

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement

COMMERCIAL CANNABIS BUSINESSES

COMMUNITY BENEFITS AND

NEIGHBORHOOD COMPATIBILITY AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the date and year first-above written.

CITY OF INDIO:
______________________________ Date: ____ / _____ / ______ Bryan H. Montgomery, City Manager

APPROVED AS TO FORM
______________________________ Date: ____ / _____ / ______ Steven Graham, City Attorney
ATTEST
______________________________ Date: ____ / _____ / ______ Sabdi Sanchez, City Clerk Administrator
OPERATOR:
______________________________ Date: ____ / _____ / ______ Printed: _______________________
Its: ___________________________
Tak Sato
President
09 01 2023

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement EXHIBIT "A"

INSURANCE
A. Insurance Requirements. Operator shall provide and maintain insurance, acceptable to the City, in full force and effect throughout the term of this Agreement, against claims for injuries to persons or damages to property which may arise from or in connection with the operation of the Facility or City’s issuance of a Commercial Cannabis Business Permit. Insurance is to be placed with insurers with a current A.M. Best's rating of no less than A:VII. Operator shall provide the following scope and limits of insurance:

General liability insurance. Operator shall maintain commercial general liability insurance with coverage at least as broad as Insurance Services Office form CG 00 01, in an amount not less than $1,000,000 per occurrence, $2,000,000 general aggregate, for bodily injury, personal injury, and property damage. The policy must include contractual liability that has not been amended. Any endorsement restricting standard ISO “insured contract” language will not be accepted.

Workers’ compensation insurance. Operator shall maintain Workers’ Compensation Insurance (Statutory Limits) and Employer’s Liability Insurance (with limits of at least $1,000,000 per accident or disease).

Operator shall submit to City, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of City, its officers, officials, agents, employees and volunteers.

Crime insurance. Operator shall maintain fidelity bond coverage or commercial crime insurance which shall be written on a “loss sustained form” or “discovery form” with limits of not less than $1,000,000 per occurrence for Employee Dishonesty, Fraud, Depositor Forgery, Money Orders & Counterfeit money, Fraudulent Fund Transfers, and Theft by Electronic Means. Said policy shall also include coverage for Money & Securities – On and Off Premises – including transportation by messenger, Fraudulent Instruction, Robbery and Burglary with limits of not less than $100,000 per occurrence.

Umbrella or excess liability insurance. As an option to meet the limits of insurance required by this Agreement, Operator may obtain and maintain an umbrella or excess liability insurance policy with limits that will provide bodily injury, personal injury and property damage liability coverage at least as broad as the primary coverages set forth above, including commercial general liability, automobile liability, and employer’s liability. Such policy or policies shall include the following terms and conditions:
• A drop-down feature requiring the policy to respond if any primary insurance that would otherwise have applied proves to be uncollectible in whole or in part for any reason; • Pay on behalf of wording as opposed to reimbursement; • Concurrency of effective dates with primary policies;

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement • Policies shall “follow form” to the underlying primary policies; and • Insureds under primary policies shall also be insureds under the umbrella or excess policies.

B. Other Provisions. Each insurance policy required by this Agreement shall be endorsed and state the coverage shall not be suspended, voided, cancelled by the insurer or either Party to this Agreement, reduced in coverage or in limits except after 30 days' prior written notice by certified mail, return receipt requested, has been given to City.

C. Other Requirements. Operator agrees to deposit with City, at or before the effective date of this contract, certificates of insurance necessary to satisfy City that the insurance provisions of this contract have been complied with. The City Attorney may require that Operator furnish City with copies of original endorsements effecting coverage required by this Section. The certificates and endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. City reserves the right to inspect complete, certified copies of all required insurance policies, at any time.

1. Upon request from the City, Operator shall furnish certificates and endorsements from each subcontractor identical to those Operator provides.

2. Any deductibles or self-insured retentions must be declared to and approved by City. At the option of City, either the insurer shall reduce or eliminate such deductibles or selfinsured retentions as respects City or its respective elected or appointed officers, officials, employees and volunteers or the Operator shall procure a bond guaranteeing payment of losses and related investigations, claim administration, defense expenses and claims.

3. The procuring of such required policy or policies of insurance shall not be construed to limit Operator’s liability hereunder nor to fulfill the indemnification provisions and requirements of this Agreement.

4. Coverage provided by Operator shall be primary and any insurance or self-insurance procured or maintained by City shall not be required to contribute with it. The limits of insurance required herein may be satisfied by a combination of primary and umbrella or excess insurance.

Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and non-contributory basis for the benefit of City before the City’s own insurance or self-insurance shall be called upon to protect it as a named insured.

5. All insurance coverage maintained or procured pursuant to this agreement shall be endorsed to waive subrogation against City, its elected or appointed officers, agents, officials, employees and volunteers or shall specifically allow Operator or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss.

Operator hereby waives its own right of recovery against City, and shall require similar written express waivers and insurance clauses from each of its subcontractors.

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement

6. General liability policies shall provide or be endorsed to provide that City and its officers, officials, employees, and agents, and volunteers shall be additional insureds under such policies. This provision shall also apply to any excess/umbrella liability policies.

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City Council
September 18, 2023

STAFF REPORT
To: City Council
From: Bryan H. Montgomery, City Manager
Prepared by: Bryan H. Montgomery, City Manager
Subject: Community Benefit Agreement with Culture CC Indio dba Culture Cannabis Club for its City of Indio Cannabis Storefront Retail Business Program Permit RECOMMENDATION:

Approve Community Benefit Agreement with Culture CC Indio dba Culture Cannabis Club for its City of Indio Cannabis Storefront Retail Business Program Permit SUMMARY:

Council approval consideration of the required Community Benefit Agreement for Culture CC Indio dba Culture Cannabis Club
BACKGROUND INFORMATION:

On July 26, 2023, the City Council, at a duly noticed special meeting, approved the award and issuance of a City of Indio Cannabis Storefront Retail Business Program Permit to Culture CC Indio dba Culture Cannabis Club.

Section 126.33 (C) of the City of Indio Municipal Code specifies that prior to operating in the city and as a condition of issuance of a permit, the operator of each cannabis facility shall enter into an operational and/or community benefit agreement with the city setting forth the terms and conditions under which the cannabis facility will operate that are in addition to the requirements of this chapter, including, but not limited to, public outreach and education, community service, payment of fees and other charges as mutually agreed, and such other terms and conditions that will protect and promote the public health, safety and welfare. Therefore, prior to the City Manager's issuance of a City of Indio Cannabis Storefront Retail Business Program Permit for the five (5) awarded Permit recipients, City Council approval is required for the Community Benefit Agreement for each recipient.

Following the City Council's action on July 26, 2023, the City Manager's Office, City Attorney's Office and Community Development Department collaborated on the development of a draft Community Benefit Agreement document. This document was intentionally prepared to be utilized for all five (5) of the approved Cannabis Storefront Retail Business Program Permit recipients with the only substantive changes between agreements being the business, name, location, contact information and signatory (ies) information.

On August 18, 2023, City Manager Montgomery, City Attorney Graham and Community Development Director hosted a virtual meeting with all five (5) of the recipients to discuss and answer questions regarding the draft community benefit agreement. The draft agreement was provided in advance to AGENDA ITEM #9.5
Community Benefit Agreement with Culture CC Indio dba Culture Cannabis C... Page 747 of 1306 the recipients to help them prepare for the meeting. The recipients had a limited number of questions pertaining to automobile liability insurance requirements and frequency of required payments for gross receipts. Following this meeting, a final version of the Agreement was sent to each of the recipients for review and signature.

The Community Benefit Agreement specifies the roles and responsibilities of the City of Indio and of the Cannabis Storefront Retail Business Program Permit recipient. Section 3 (Community Benefits Payment) of the Agreement specifies the required payment of six (6) percent of gross receipts for a fiscal quarter to the City of Indio. These payments can be made more frequently than quarterly, but at a minimum, quarterly payments are required.

The City Manger's Office has identified a possible utilization of the aforementioned gross receipts payments subject to City Council concurrence. Specifically, this approach would allocate five (5) percent of the required six (6) percent payment to the City's General Fund to be used primarily for public safety and would allocate the remaining one (1) percent in the following manner: a) .25% to the Coachella Valley History Museum; b) .25% to the Indio Performing Arts Center; c) 25% to to the Coachella Valley Art Center; and d) .25% to the Indio Economic Development Corporation.

Section 5 (Additional Community Benefits) of the Agreement specifies that each recipient will agree to provide during each calendar year, or portion thereof, that this Agreement is in effect additional community benefits to nonprofits and civic organizations that primarily operate or provide services within the City of Indio equal to one (1) percent of gross receipts. This Section further specifies that within sixty (60) calendar days after the end of each calendar year, each recipient shall provide written documentation to the satisfaction of the City Manager or designee that the recipient has met the obligations of this Section 5.

The Community Benefit Agreement for Culture CC Indio dba Culture Cannabis Club for its City of Indio Cannabis Storefront Retail Business Program Permit comprehensively meets the requirements of Section 126.33 (C) of the City of Indio Municipal Code. The City Council's approval of this Agreement is the final Council action needed prior to the City Manager's conditional approval of City of Indio Cannabis Storefront Retail Business Program Permit for Culture CC Indio dba Culture Cannabis Club.

ATTACHMENTS:

Attachment1_IndioCommunityBenefitAgreement_CultureCCIndioIncdbaCultureCannabisClub APPROVAL(S):

Steven Graham, City Attorney Approved - 06 Sep 2023
Bryan H. Montgomery, City Manager Approved - 07 Sep 2023

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COMMERCIAL CANNABIS BUSINESSES

COMMUNITY BENEFITS AND

NEIGHBORHOOD COMPATIBILITY AGREEMENT
This Community Benefits Agreement (“Agreement”) is entered into as of September ___, 2023 (the “Effective Date”) by and between the CITY OF INDIO, a municipal corporation of the State of California (hereafter “City”) and CULTURE CC INDIO, INC., doing business as CULTURE CANNABIS CLUB (hereafter “Operator”).

A. Concurrent with the execution of this Agreement, the City issued Operator a Commercial Cannabis Business Permit (the “CCBP”) for Operator to operate a cannabis retail facility at 45151 Oasis Street in the City of Indio, California (the “Facility”).

B. Operator acknowledges and agrees that the City would not have approved the CCBP if Operator had not agreed to comply with all of the conditions of the CCBP, including (but not limited to) its obligation to enter into this Agreement.

C. Operator also acknowledges and agrees that, prior to its application for a Commercial Cannabis Business Permit from the City to operate the Facility, Operator was fully aware of its obligation to enter into a binding Community Benefit Agreement with the City consistent with the terms of this Agreement, and Operator chose to move forward with such application process.

NOW, THEREFORE, in consideration of the foregoing Recitals which are hereby incorporated into the operative provisions of this Agreement by this reference and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the City and the Operator agree as follows:

Section 1. PURPOSE. The purpose of this Agreement is to memorialize Operator’s commitment to provide Community Benefits to the City of Indio in accordance with Chapter 123 (Cannabis Business Activities) of the Indio Municipal Code.

Section 2. TERM. The term (“Term”) of this Agreement begins on the Effective Date, and it expires upon the earliest of any of the following:

A. the revocation or termination of the CCBP and the entry of the final court judgment of any litigation challenging such revocation or termination; B. the effective date of the final court judgment ruling that the CCBP is invalid; or

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement C. the effective date of any change in the law that invalidates the CCBP or that prohibits sales of cannabis or cannabis products at the Facility.

Notwithstanding any language in this Section 2 to the contrary, the provisions of Section 20 of this Agreement shall survive the termination of the Agreement for a period of five (5) years.

Section 3. COMMUNITY BENEFITS PAYMENT. Starting upon the issuance of a Certificate of Occupancy or Temporary Certificate of Occupancy, and continuing until the termination of this Agreement, Operator shall make no less than quarterly community benefit payments (each a “Payment”) to the City in the amount of SIX PERCENT (6%) of gross receipts for the quarter, or portion thereof, during the Term beginning on the date the certificate of occupancy is issued to the Facility.

Operator may make payments more frequently than quarterly, but shall, at a minimum, make quarterly payments as prescribed herein.

When Operator makes a Payment to the City, Operator shall include with the payment a financial statement in a form acceptable to the city showing the Facility’s gross receipts upon which the calculation for the Payment is made.

For the months of January through March of each year, the Payment shall be due on the last City business day of the following month April.

For the months of April through June of each year, the Payment shall be due on the last City business day of the following month July.

For the months of July through September of each year, the Payment shall be due on the last City business day of the following month October.

For the months of October through December of each year, the Payment shall be due on the last City business day of the following month January.

Notwithstanding the above, in the event the City enacts a tax on cannabis retail business activity at a rate higher than is generally applicable to all other retail business activity in the City, then the Parties agree to negotiate in good faith to amend this Agreement to reduce the amounts described in sections A and B by the amount of such new taxes on cannabis retail business activity. For example, if the City were to enact a 10% tax on gross receipts of cannabis retail businesses, then the Parties would negotiate a reduction in Section A If, on the other hand, the City enacted a generally applicable sales tax increase of 1% on all retail business activity in the City, then no change to the above would be required.

If the City voluntarily issues a Commercial Cannabis Business Permit to an entity operating a retail cannabis business other than Operator, the Parties agree to engage in good faith negotiations to amend this Agreement to ensure that Operator is not

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement obligated to payment of community benefits at a higher rate than the other retail cannabis business.

For the purposes of this Agreement, gross receipts includes the total of amounts actually received or receivable from sales within the City and the total amounts actually received or receivable for the performance of any act or service within the City, of whatever nature it may be, for which a charge is made or credit allowed, whether or not such act or service is done as a part of or in connection with the sale of materials, goods, wares or merchandise. Included in gross receipts shall be all receipts, cash, credits and property of any kind or nature, without any deduction therefrom on account of the cost of the property sold, the cost of materials used, labor or service costs, interest paid or payable, or losses or other expenses whatsoever. Excluded from gross receipts shall be the following:
(1) Cash discounts allowed and taken on sales.
(2) Credit allowed on property accepted as part of the purchase price, if the property may later be sold.
(3) Any tax required by law to be included in or added to the purchase price and collected from the consumer or purchaser.
(4) Such part of the sale price of property returned by the purchaser upon rescission of the contract of sale as is refunded either in cash or by credit.

Section 4. VERIFICATION OF GROSS RECEIPTS. During the term of this Agreement and for three years following its expiration, the City Manager or his/her designee may request copies of Operator’s state and federal tax returns, cash-flow reports, financial statements, income statements, books, journals, and other financial records for the Operator (“Financial Records”) to enable the City Manager to independently verify Operator’s Gross Receipts during the period for which any Payment is made. Within thirty (30) calendar days after receiving the City Manager’s written request for Financial Records under this section, Operator shall provide the City Manager copies of all Financial Records requested by the City Manager. If the City Manager determines that Operator has underpaid any Payment, Operator shall pay the City the balance owed, as determined by the City Manager, within thirty (30) calendar days following a written request for payment from the City Manager. Operator’s obligations shall survive the expiration of this Agreement.

Section 5. ADDITIONAL COMMUNITY BENEFITS. Operator agrees to provide during each calendar year, or portion thereof, that this Agreement is in effect additional community benefits to nonprofits and civic organizations that primarily operate or provide services within the City of Indio equal to ONE PERCENT (1%) of gross receipts. Within sixty (60) calendar days after the end of each calendar year,

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement Operator shall provide written documentation to the satisfaction of the City Manager or designee that Operator has met the obligations of this Section 5.

In lieu of the performance of the obligation above, the Operator may, after written notification to the City, elect to include an additional payment to the City in the amount of with each quarterly Community Benefits Payment, which the City will make available to nonprofits and civic organizations operating within the City of Indio.

Section 6. DEPOSIT AND USE OF PAYMENTS. City Manager will ensure that all Payments are deposited in an account administered by the City. The use and allocation of all Payment revenues, and any interest that accrues thereon, will be determined by the City of Indio in its sole discretion. All payments, and all interest that accrues thereon, shall be the property of the City.

Section 7. NEIGHBORHOOD COMPATIBILITY.

A. Conditions of Permit Approval Incorporated. Conditions placed on the Commercial Cannabis Permit issued to the Operator are hereby incorporated into this Agreement as though set forth herein in full and shall be conditions of this Agreement. Violations of the Commercial Cannabis Permit and/or any State License issued to the Operator for Operator’s Cannabis Business shall be deemed violations of this Agreement and shall constitute a material breach of this Agreement.

B. State License(s) and City Permit(s). The Operator shall obtain and maintain at all times during the Term of this Agreement a valid Commercial Cannabis Permit, and all applicable State License(s) required by the State Cannabis Laws for Operator’s Cannabis Business.

1. State License(s). As soon as practicable, the Operator shall inform the City when it obtains all applicable State License(s) and shall provide a copy of the State License(s) to the Director. The City shall cooperate with the Operator as appropriate and as needed to facilitate the State’s issuance of a State License(s) to the Operator for Operator’s Cannabis Business.

2. City Permit(s). The City shall diligently process the Operator’s applications for all City Permits. This Agreement does not commit the City in advance to approve the City Permits; nor does this Agreement constrain the City’s discretion to determine compliance with all requirements regarding issuance of any City Permits. Nothing in this Agreement relieves the Operator of the obligation to comply with all requirements and application procedures set forth in the Indio Municipal Cod, other applicable rules and regulations and/or the Cannabis Regulations.

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement C. Compliance with Applicable Law. The Operator understands, acknowledges and agrees to comply with all applicable state and local laws, rules and regulations applicable to operation of Operator’s Cannabis Business, including, without limitation, the Cannabis Regulations.

D. Operational Requirements. In addition to all operating requirements set forth in the Cannabis Regulations, the Operator shall comply with the following specific operational requirements:

1. Notification Regarding Criminal Activity. The Operator shall immediately notify the and the City of Indio Police Department of any criminal activity, or suspected criminal activity, occurring at the Subject Property. In the event of any internal security system breach, including a faulty alarm system, broken or damaged surveillance cameras or other video recording equipment, or broken or damaged locks, doors, or lighting which may increase risk of criminal activity at the Subject Property, the Operator or the Manager of Operator’s Cannabis Business shall notify the Indio Police Department as soon as practicable after becoming aware of the security system breach. The Operator shall diligently attempt to fix or resolve any such security breach immediately; if circumstances require additional time and delay to remedy, the Operator shall so notify the Indio Police Department and provide an estimated timeline of when the breach will be cured.

2. Notification Regarding Criminal Threats. If the Operator receives any criminal threats, or otherwise suspects any criminal targeting related to movement of Cannabis or Cannabis Product or cash from or to the Subject Property, the Operator shall immediately notify the Indio Police Department.

3. Site Inspections. The City Manager or any other authorized representative, official, officer, or agent of the City of Indio may perform site inspections of Operator’s Cannabis Business and the Subject Property during hours of operation with no advance notice required. The scope of the inspection shall be to ensure compliance with all conditions on Operator’s Cannabis Business, including compliance with State Cannabis Laws, such as but not limited to, track and trace requirements, product storage, labeling, and disposal of product, as well as accounting, ledgers for distribution, and other records and operating procedures. The Operator shall provide proof, including through visual observation and confirmation by City staff, of any storage, disposal or distribution of cannabis and/or cannabis product as may be necessary to ensure compliance. Should the City discover any evidence of falsification of records or other practices inconsistent with the Cannabis

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement Regulations and/or the State Cannabis Laws, the Commercial Cannabis Permit may be suspended in accordance with the Cannabis Regulations, in which event, the Operator shall, upon written notice from the City, immediately cease and desist operations until such time that the issues have been resolved to the satisfaction of the City.

Section 8. ANNUAL INSPECTION AND FEE. Pursuant to Subsection 123.34.A of the Indio Municipal Code, Operator shall maintain accurate books and records in an electronic format, detailing all of the revenues and expenses of the business, and all of its assets and liabilities for a period not less than seven years. On no less than an annual basis (at or before the time of the renewal of a cannabis business permit issued pursuant to this chapter), or at any time upon reasonable request of the city, each cannabis business shall file a sworn statement detailing the number and amount of sales by the cannabis business during the previous 12-month period (or shorter period based upon the timing of the request), provided on a per-month basis.

The statement shall also include gross sales for each month, and all applicable taxes and/or fees paid or due to be paid. On an annual basis, Operator shall submit to the city a financial audit of the business's operations conducted by an independent certified public accountant. Operator shall be subject to a regulatory compliance review and a gross receipts financial audit, where applicable, as determined by the city. Operator shall pay the Annual Regulatory Fee for Cannabis Storefront Business Permit Recipients as established by the City Council.

Section 9. ASSIGNMENT. Operator’s obligations under this Agreement shall be binding upon Operator’s successors and assigns. Operator shall not assign this Agreement, or any of its obligations under this Agreement, to any other person or entity without the advance written approval of the City, which shall be within its sole discretion to provide.

Section 10. NO THIRD-PARTY BENEFICIARIES. Nothing in this Agreement confers and rights or obligations on any person or entity that is not a party to this Agreement.

Section 11. COUNTERPARTS. The Agreement may be executed in counterparts.

Section 12. GOVERNING LAW. This Agreement shall be governed by the laws of the State of California.

Section 13. VENUE. Because the Facility will be located in Riverside County, Operator and City agree that any legal action relating in any way to this Agreement or the CCBP may only be brought and maintained in the Riverside County Superior Court.

Section 14. NOTICES. All notices which are allowed or required to be given hereunder shall be in writing and (1) shall be deemed given and received when personally delivered or (2) shall be deemed given when the same are deposited in the United States mail, with postage prepaid, to be sent by registered or certified mail or overnight mail service, addressed to the applicable designated person by one party to the other in

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement writing, and shall be deemed received on the second business day after such mailing.

If to City: City of Indio
100 Civic Center Mall
Indio, CA 925001
If to the Operator: Culture CC Indio, Inc.
1 Corporate Park, Suite 112
Irvine, CA 92606
Section 15. SEVERABILITY. If any part of this Agreement is declared invalid for any reason, such invalidity shall not affect the validity of the remainder of the Agreement. The other parts of this Agreement shall remain in effect as if this Agreement had been executed without the invalid part. The City and the Operator intend and desire that the remaining parts of this Agreement continue to be effective without any part or parts that have been declared invalid.

Section 16. NEGATION OF CITY. The City and the Operator acknowledge that, in entering into and performing under this Agreement, each is acting as an independent entity and not as an agent of the other in any respect. Nothing contained herein or in any document executed in connection herewith shall be construed as making the City and the Operator joint venturers, partners or employer/employee.

Section 17. WAIVER. No waiver of any provision of this Agreement shall be effective unless in writing and signed by a duly authorized representative of the party against whom enforcement of a waiver is sought.

Section 18. SECTION HEADINGS. The section headings contained in this Agreement are for convenience and identification only and shall not be deemed to limit or define the contents to which they relate.

Section 19. TIME OF ESSENCE. Time is of the essence of this Agreement, and all performances required hereunder shall be completed within the time periods specified. Any failure of performance shall be deemed as a material breach of this Agreement.

Section 20. INDEMNIFICATION. To the fullest extent permitted by law, the City shall not assume any liability whatsoever with respect to having issued a Commercial Cannabis Business Permit pursuant to this article or otherwise approving the operation of any Commercial Cannabis Business. The Operator agrees to indemnify, defend (at Operator’s sole cost and expense), and hold the City and its officers, officials, employees, representatives, and agents harmless, from any and all claims, losses, damages, injuries, liabilities or losses which arise out of, or which are in any way related to the City’s issuance of the Commercial Cannabis Business Permit, the City’s decision to approve the operation of the Commercial Cannabis

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement Business or activity, the process used by the City in making its decision, or the alleged violation of any federal, state or local laws by the Commercial Cannabis Business or any of its officers, employees or agents. Operator shall reimburse the City for all costs and expenses, including but not limited to legal fees and costs and court costs, which the City may be required to pay as a result of any legal challenge related to the City’s approval of the Operator’s Commercial Cannabis Business Permit, or related to the City’s approval of a Commercial Cannabis Activity. The City may, at its sole discretion, participate at its own expense in the defense of any such action, but such participation shall not relieve any of the obligations imposed hereunder.

Section 21. INSURANCE.

A. Prior to execution of this Agreement by City, Operator shall obtain and maintain during the performance of this Agreement the insurance coverages as specified in EXHIBIT A attached hereto and incorporated herein by this reference, issued by a company satisfactory to the Risk Manager, unless the Risk Manager waives, in writing, the requirement that Operator obtain and maintain such insurance coverages.

B. Prior to commencement of any construction under this Agreement, Operator shall file with the Risk Manager evidence of insurance coverage as specified in EXHIBIT A. Evidence of insurance coverage shall be forwarded to the Risk Manager, addressed as specified in EXHIBIT A.

C. Maintenance of proper insurance coverages by Operator is a material element of this Agreement. Operator's failure to maintain or renew insurance coverages or to provide evidence of renewal may be considered as a material breach of this Agreement.
[Signature Page Follows]

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement

COMMERCIAL CANNABIS BUSINESSES

COMMUNITY BENEFITS AND

NEIGHBORHOOD COMPATIBILITY AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the date and year first-above written.

CITY OF INDIO:
______________________________ Date: ____ / _____ / ______ Bryan H. Montgomery, City Manager

APPROVED AS TO FORM
______________________________ Date: ____ / _____ / ______ Steven Graham, City Attorney
ATTEST
______________________________ Date: ____ / _____ / ______ Sabdi Sanchez, City Clerk Administrator

OPERATOR:
______________________________ Date: ____ / _____ / ______ Printed: _______________________
Its: ___________________________
Devon Julian
CEO
9 5 2023

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement EXHIBIT "A"

INSURANCE
A. Insurance Requirements. Operator shall provide and maintain insurance, acceptable to the City, in full force and effect throughout the term of this Agreement, against claims for injuries to persons or damages to property which may arise from or in connection with the operation of the Facility or City’s issuance of a Commercial Cannabis Business Permit. Insurance is to be placed with insurers with a current A.M. Best's rating of no less than A:VII. Operator shall provide the following scope and limits of insurance:

General liability insurance. Operator shall maintain commercial general liability insurance with coverage at least as broad as Insurance Services Office form CG 00 01, in an amount not less than $1,000,000 per occurrence, $2,000,000 general aggregate, for bodily injury, personal injury, and property damage. The policy must include contractual liability that has not been amended. Any endorsement restricting standard ISO “insured contract” language will not be accepted.

Workers’ compensation insurance. Operator shall maintain Workers’ Compensation Insurance (Statutory Limits) and Employer’s Liability Insurance (with limits of at least $1,000,000 per accident or disease).

Operator shall submit to City, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of City, its officers, officials, agents, employees and volunteers.

Crime insurance. Operator shall maintain fidelity bond coverage or commercial crime insurance which shall be written on a “loss sustained form” or “discovery form” with limits of not less than $1,000,000 per occurrence for Employee Dishonesty, Fraud, Depositor Forgery, Money Orders & Counterfeit money, Fraudulent Fund Transfers, and Theft by Electronic Means. Said policy shall also include coverage for Money & Securities – On and Off Premises – including transportation by messenger, Fraudulent Instruction, Robbery and Burglary with limits of not less than $100,000 per occurrence.

Umbrella or excess liability insurance. As an option to meet the limits of insurance required by this Agreement, Operator may obtain and maintain an umbrella or excess liability insurance policy with limits that will provide bodily injury, personal injury and property damage liability coverage at least as broad as the primary coverages set forth above, including commercial general liability, automobile liability, and employer’s liability. Such policy or policies shall include the following terms and conditions:
• A drop-down feature requiring the policy to respond if any primary insurance that would otherwise have applied proves to be uncollectible in whole or in part for any reason; • Pay on behalf of wording as opposed to reimbursement; • Concurrency of effective dates with primary policies; • Policies shall “follow form” to the underlying primary policies; and

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement • Insureds under primary policies shall also be insureds under the umbrella or excess policies.

B. Other Provisions. Each insurance policy required by this Agreement shall be endorsed and state the coverage shall not be suspended, voided, cancelled by the insurer or either Party to this Agreement, reduced in coverage or in limits except after 30 days' prior written notice by certified mail, return receipt requested, has been given to City.

C. Other Requirements. Operator agrees to deposit with City, at or before the effective date of this contract, certificates of insurance necessary to satisfy City that the insurance provisions of this contract have been complied with. The City Attorney may require that Operator furnish City with copies of original endorsements effecting coverage required by this Section. The certificates and endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. City reserves the right to inspect complete, certified copies of all required insurance policies, at any time.

1. Upon request from the City, Operator shall furnish certificates and endorsements from each subcontractor identical to those Operator provides.

2. Any deductibles or self-insured retentions must be declared to and approved by City. At the option of City, either the insurer shall reduce or eliminate such deductibles or selfinsured retentions as respects City or its respective elected or appointed officers, officials, employees and volunteers or the Operator shall procure a bond guaranteeing payment of losses and related investigations, claim administration, defense expenses and claims.

3. The procuring of such required policy or policies of insurance shall not be construed to limit Operator’s liability hereunder nor to fulfill the indemnification provisions and requirements of this Agreement.

4. Coverage provided by Operator shall be primary and any insurance or self-insurance procured or maintained by City shall not be required to contribute with it. The limits of insurance required herein may be satisfied by a combination of primary and umbrella or excess insurance.

Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and non-contributory basis for the benefit of City before the City’s own insurance or self-insurance shall be called upon to protect it as a named insured.

5. All insurance coverage maintained or procured pursuant to this agreement shall be endorsed to waive subrogation against City, its elected or appointed officers, agents, officials, employees and volunteers or shall specifically allow Operator or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss.

Operator hereby waives its own right of recovery against City, and shall require similar written express waivers and insurance clauses from each of its subcontractors.

6. General liability policies shall provide or be endorsed to provide that City and its officers, officials, employees, and agents, and volunteers shall be additional insureds under such policies. This provision shall also apply to any excess/umbrella liability policies.

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City Council
September 18, 2023

STAFF REPORT
To: City Council
From: Bryan H. Montgomery, City Manager
Prepared by: Bryan H. Montgomery, City Manager
Subject: Community Benefit Agreement with Indio West Coast Retail, LLC dba West Coast Cannabis Club for its City of Indio Cannabis Storefront Retail Business Program Permit
RECOMMENDATION:

Approve Community Benefit Agreement with Indio West Coast Retail, LLC dba West Coast Cannabis Club for its City of Indio Cannabis Storefront Retail Business Program Permit SUMMARY:

Council approval consideration of the required Community Benefit Agreement for Indio West Coast Retail, LLC dba West Coast Cannabis Club
BACKGROUND INFORMATION:

On July 26, 2023, the City Council, at a duly noticed special meeting, approved the award and issuance of a City of Indio Cannabis Storefront Retail Business Program Permit to Culture CC Indio dba Culture Cannabis Club.

Section 126.33 (C) of the City of Indio Municipal Code specifies that prior to operating in the city and as a condition of issuance of a permit, the operator of each cannabis facility shall enter into an operational and/or community benefit agreement with the city setting forth the terms and conditions under which the cannabis facility will operate that are in addition to the requirements of this chapter, including, but not limited to, public outreach and education, community service, payment of fees and other charges as mutually agreed, and such other terms and conditions that will protect and promote the public health, safety and welfare. Therefore, prior to the City Manager's issuance of a City of Indio Cannabis Storefront Retail Business Program Permit for the five (5) awarded Permit recipients, City Council approval is required for the Community Benefit Agreement for each recipient.

Following the City Council's action on July 26, 2023, the City Manager's Office, City Attorney's Office and Community Development Department collaborated on the development of a draft Community Benefit Agreement document. This document was intentionally prepared to be utilized for all five (5) of the approved Cannabis Storefront Retail Business Program Permit recipients with the only substantive changes between agreements being the business, name, location, contact information and signatory (ies) information.

On August 18, 2023, City Manager Montgomery, City Attorney Graham and Community Development Director hosted a virtual meeting with all five (5) of the recipients to discuss and answer questions AGENDA ITEM #9.6
Community Benefit Agreement with Indio West Coast Retail, LLC dba West C... Page 760 of 1306 regarding the draft community benefit agreement. The draft agreement was provided in advance to the recipients to help them prepare for the meeting. The recipients had a limited number of questions pertaining to automobile liability insurance requirements and frequency of required payments for gross receipts. Following this meeting, a final version of the Agreement was sent to each of the recipients for review and signature.

The Community Benefit Agreement specifies the roles and responsibilities of the City of Indio and of the Cannabis Storefront Retail Business Program Permit recipient. Section 3 (Community Benefits Payment) of the Agreement specifies the required payment of six (6) percent of gross receipts for a fiscal quarter to the City of Indio. These payments can be made more frequently than quarterly, but at a minimum, quarterly payments are required.

The City Manger's Office has identified a possible utilization of the aforementioned gross receipts payments subject to City Council concurrence. Specifically, this approach would allocate five (5) percent of the required six (6) percent payment to the City's General Fund to be used primarily for public safety and would allocate the remaining one (1) percent in the following manner: a) .25% to the Coachella Valley History Museum; b) .25% to the Indio Performing Arts Center; c) 25% to to the Coachella Valley Art Center; and d) .25% to the Indio Economic Development Corporation.

Section 5 (Additional Community Benefits) of the Agreement specifies that each recipient will agree to provide during each calendar year, or portion thereof, that this Agreement is in effect additional community benefits to nonprofits and civic organizations that primarily operate or provide services within the City of Indio equal to one (1) percent of gross receipts. This Section further specifies that within sixty (60) calendar days after the end of each calendar year, each recipient shall provide written documentation to the satisfaction of the City Manager or designee that the recipient has met the obligations of this Section 5.

The Community Benefit Agreement for Indio West Coast Retail, LLC dba West Coast Cannabis Club for its City of Indio Cannabis Storefront Retail Business Program Permit comprehensively meets the requirements of Section 126.33 (C) of the City of Indio Municipal Code. The City Council's approval of this Agreement is the final Council action needed prior to the City Manager's conditional approval of City of Indio Cannabis Storefront Retail Business Program Permit for Indio West Coast Retail, LLC dba West Coast Cannabis Club.

ATTACHMENTS:

Attachment1_IndioCommunityBenefitAgreement_IndioWestCoastRetailLLCdbaWestCoastCa nnabisClub
APPROVAL(S):

Steven Graham, City Attorney Approved - 06 Sep 2023
Bryan H. Montgomery, City Manager Approved - 07 Sep 2023

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COMMERCIAL CANNABIS BUSINESSES

COMMUNITY BENEFITS AND

NEIGHBORHOOD COMPATIBILITY AGREEMENT
This Community Benefits Agreement (“Agreement”) is entered into as of September ___, 2023 (the “Effective Date”) by and between the CITY OF INDIO, a municipal corporation of the State of California (hereafter “City”) and INDIO WEST COAST RETAIL, LLC, doing business as WEST COAST CANNABIS CLUB (hereafter “Operator”).

A. Concurrent with the execution of this Agreement, the City issued Operator a Commercial Cannabis Business Permit (the “CCBP”) for Operator to operate a cannabis retail facility at 80916 Highway 111 in the City of Indio, California (the “Facility”).

B. Operator acknowledges and agrees that the City would not have approved the CCBP if Operator had not agreed to comply with all of the conditions of the CCBP, including (but not limited to) its obligation to enter into this Agreement.

C. Operator also acknowledges and agrees that, prior to its application for a Commercial Cannabis Business Permit from the City to operate the Facility, Operator was fully aware of its obligation to enter into a binding Community Benefit Agreement with the City consistent with the terms of this Agreement, and Operator chose to move forward with such application process.

NOW, THEREFORE, in consideration of the foregoing Recitals which are hereby incorporated into the operative provisions of this Agreement by this reference and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the City and the Operator agree as follows:

Section 1. PURPOSE. The purpose of this Agreement is to memorialize Operator’s commitment to provide Community Benefits to the City of Indio in accordance with Chapter 123 (Cannabis Business Activities) of the Indio Municipal Code.

Section 2. TERM. The term (“Term”) of this Agreement begins on the Effective Date, and it expires upon the earliest of any of the following:

A. the revocation or termination of the CCBP and the entry of the final court judgment of any litigation challenging such revocation or termination; B. the effective date of the final court judgment ruling that the CCBP is invalid; or

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement C. the effective date of any change in the law that invalidates the CCBP or that prohibits sales of cannabis or cannabis products at the Facility.

Notwithstanding any language in this Section 2 to the contrary, the provisions of Section 20 of this Agreement shall survive the termination of the Agreement for a period of five (5) years.

Section 3. COMMUNITY BENEFITS PAYMENT. Starting upon the issuance of a Certificate of Occupancy or Temporary Certificate of Occupancy, and continuing until the termination of this Agreement, Operator shall make no less than quarterly community benefit payments (each a “Payment”) to the City in the amount of SIX PERCENT (6%) of gross receipts for the quarter, or portion thereof, during the Term beginning on the date the certificate of occupancy is issued to the Facility.

Operator may make payments more frequently than quarterly, but shall, at a minimum, make quarterly payments as prescribed herein.

When Operator makes a Payment to the City, Operator shall include with the payment a financial statement in a form acceptable to the city showing the Facility’s gross receipts upon which the calculation for the Payment is made.

For the months of January through March of each year, the Payment shall be due on the last City business day of the following month April.

For the months of April through June of each year, the Payment shall be due on the last City business day of the following month July.

For the months of July through September of each year, the Payment shall be due on the last City business day of the following month October.

For the months of October through December of each year, the Payment shall be due on the last City business day of the following month January.

Notwithstanding the above, in the event the City enacts a tax on cannabis retail business activity at a rate higher than is generally applicable to all other retail business activity in the City, then the Parties agree to negotiate in good faith to amend this Agreement to reduce the amounts described in sections A and B by the amount of such new taxes on cannabis retail business activity. For example, if the City were to enact a 10% tax on gross receipts of cannabis retail businesses, then the Parties would negotiate a reduction in Section A If, on the other hand, the City enacted a generally applicable sales tax increase of 1% on all retail business activity in the City, then no change to the above would be required.

If the City voluntarily issues a Commercial Cannabis Business Permit to an entity operating a retail cannabis business other than Operator, the Parties agree to engage in good faith negotiations to amend this Agreement to ensure that Operator is not

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement obligated to payment of community benefits at a higher rate than the other retail cannabis business.

For the purposes of this Agreement, gross receipts includes the total of amounts actually received or receivable from sales within the City and the total amounts actually received or receivable for the performance of any act or service within the City, of whatever nature it may be, for which a charge is made or credit allowed, whether or not such act or service is done as a part of or in connection with the sale of materials, goods, wares or merchandise. Included in gross receipts shall be all receipts, cash, credits and property of any kind or nature, without any deduction therefrom on account of the cost of the property sold, the cost of materials used, labor or service costs, interest paid or payable, or losses or other expenses whatsoever. Excluded from gross receipts shall be the following:
(1) Cash discounts allowed and taken on sales.
(2) Credit allowed on property accepted as part of the purchase price, if the property may later be sold.
(3) Any tax required by law to be included in or added to the purchase price and collected from the consumer or purchaser.
(4) Such part of the sale price of property returned by the purchaser upon rescission of the contract of sale as is refunded either in cash or by credit.

Section 4. VERIFICATION OF GROSS RECEIPTS. During the term of this Agreement and for three years following its expiration, the City Manager or his/her designee may request copies of Operator’s state and federal tax returns, cash-flow reports, financial statements, income statements, books, journals, and other financial records for the Operator (“Financial Records”) to enable the City Manager to independently verify Operator’s Gross Receipts during the period for which any Payment is made. Within thirty (30) calendar days after receiving the City Manager’s written request for Financial Records under this section, Operator shall provide the City Manager copies of all Financial Records requested by the City Manager. If the City Manager determines that Operator has underpaid any Payment, Operator shall pay the City the balance owed, as determined by the City Manager, within thirty (30) calendar days following a written request for payment from the City Manager. Operator’s obligations shall survive the expiration of this Agreement.

Section 5. ADDITIONAL COMMUNITY BENEFITS. Operator agrees to provide during each calendar year, or portion thereof, that this Agreement is in effect additional community benefits to nonprofits and civic organizations that primarily operate or provide services within the City of Indio equal to ONE PERCENT (1%) of gross receipts. Within sixty (60) calendar days after the end of each calendar year,

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement Operator shall provide written documentation to the satisfaction of the City Manager or designee that Operator has met the obligations of this Section 5.

In lieu of the performance of the obligation above, the Operator may, after written notification to the City, elect to include an additional payment to the City in the amount of with each quarterly Community Benefits Payment, which the City will make available to nonprofits and civic organizations operating within the City of Indio.

Section 6. DEPOSIT AND USE OF PAYMENTS. City Manager will ensure that all Payments are deposited in an account administered by the City. The use and allocation of all Payment revenues, and any interest that accrues thereon, will be determined by the City of Indio in its sole discretion. All payments, and all interest that accrues thereon, shall be the property of the City.

Section 7. NEIGHBORHOOD COMPATIBILITY.

A. Conditions of Permit Approval Incorporated. Conditions placed on the Commercial Cannabis Permit issued to the Operator are hereby incorporated into this Agreement as though set forth herein in full and shall be conditions of this Agreement. Violations of the Commercial Cannabis Permit and/or any State License issued to the Operator for Operator’s Cannabis Business shall be deemed violations of this Agreement and shall constitute a material breach of this Agreement.

B. State License(s) and City Permit(s). The Operator shall obtain and maintain at all times during the Term of this Agreement a valid Commercial Cannabis Permit, and all applicable State License(s) required by the State Cannabis Laws for Operator’s Cannabis Business.

1. State License(s). As soon as practicable, the Operator shall inform the City when it obtains all applicable State License(s) and shall provide a copy of the State License(s) to the Director. The City shall cooperate with the Operator as appropriate and as needed to facilitate the State’s issuance of a State License(s) to the Operator for Operator’s Cannabis Business.

2. City Permit(s). The City shall diligently process the Operator’s applications for all City Permits. This Agreement does not commit the City in advance to approve the City Permits; nor does this Agreement constrain the City’s discretion to determine compliance with all requirements regarding issuance of any City Permits. Nothing in this Agreement relieves the Operator of the obligation to comply with all requirements and application procedures set forth in the Indio Municipal Cod, other applicable rules and regulations and/or the Cannabis Regulations.

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement C. Compliance with Applicable Law. The Operator understands, acknowledges and agrees to comply with all applicable state and local laws, rules and regulations applicable to operation of Operator’s Cannabis Business, including, without limitation, the Cannabis Regulations.

D. Operational Requirements. In addition to all operating requirements set forth in the Cannabis Regulations, the Operator shall comply with the following specific operational requirements:

1. Notification Regarding Criminal Activity. The Operator shall immediately notify the and the City of Indio Police Department of any criminal activity, or suspected criminal activity, occurring at the Subject Property. In the event of any internal security system breach, including a faulty alarm system, broken or damaged surveillance cameras or other video recording equipment, or broken or damaged locks, doors, or lighting which may increase risk of criminal activity at the Subject Property, the Operator or the Manager of Operator’s Cannabis Business shall notify the Indio Police Department as soon as practicable after becoming aware of the security system breach. The Operator shall diligently attempt to fix or resolve any such security breach immediately; if circumstances require additional time and delay to remedy, the Operator shall so notify the Indio Police Department and provide an estimated timeline of when the breach will be cured.

2. Notification Regarding Criminal Threats. If the Operator receives any criminal threats, or otherwise suspects any criminal targeting related to movement of Cannabis or Cannabis Product or cash from or to the Subject Property, the Operator shall immediately notify the Indio Police Department.

3. Site Inspections. The City Manager or any other authorized representative, official, officer, or agent of the City of Indio may perform site inspections of Operator’s Cannabis Business and the Subject Property during hours of operation with no advance notice required. The scope of the inspection shall be to ensure compliance with all conditions on Operator’s Cannabis Business, including compliance with State Cannabis Laws, such as but not limited to, track and trace requirements, product storage, labeling, and disposal of product, as well as accounting, ledgers for distribution, and other records and operating procedures. The Operator shall provide proof, including through visual observation and confirmation by City staff, of any storage, disposal or distribution of cannabis and/or cannabis product as may be necessary to ensure compliance. Should the City discover any evidence of falsification of records or other practices inconsistent with the Cannabis

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement Regulations and/or the State Cannabis Laws, the Commercial Cannabis Permit may be suspended in accordance with the Cannabis Regulations, in which event, the Operator shall, upon written notice from the City, immediately cease and desist operations until such time that the issues have been resolved to the satisfaction of the City.

Section 8. ANNUAL INSPECTION AND FEE. Pursuant to Subsection 123.34.A of the Indio Municipal Code, Operator shall maintain accurate books and records in an electronic format, detailing all of the revenues and expenses of the business, and all of its assets and liabilities for a period not less than seven years. On no less than an annual basis (at or before the time of the renewal of a cannabis business permit issued pursuant to this chapter), or at any time upon reasonable request of the city, each cannabis business shall file a sworn statement detailing the number and amount of sales by the cannabis business during the previous 12-month period (or shorter period based upon the timing of the request), provided on a per-month basis.

The statement shall also include gross sales for each month, and all applicable taxes and/or fees paid or due to be paid. On an annual basis, Operator shall submit to the city a financial audit of the business's operations conducted by an independent certified public accountant. Operator shall be subject to a regulatory compliance review and a gross receipts financial audit, where applicable, as determined by the city. Operator shall pay the Annual Regulatory Fee for Cannabis Storefront Business Permit Recipients as established by the City Council.

Section 9. ASSIGNMENT. Operator’s obligations under this Agreement shall be binding upon Operator’s successors and assigns. Operator shall not assign this Agreement, or any of its obligations under this Agreement, to any other person or entity without the advance written approval of the City, which shall be within its sole discretion to provide.

Section 10. NO THIRD-PARTY BENEFICIARIES. Nothing in this Agreement confers and rights or obligations on any person or entity that is not a party to this Agreement.

Section 11. COUNTERPARTS. The Agreement may be executed in counterparts.

Section 12. GOVERNING LAW. This Agreement shall be governed by the laws of the State of California.

Section 13. VENUE. Because the Facility will be located in Riverside County, Operator and City agree that any legal action relating in any way to this Agreement or the CCBP may only be brought and maintained in the Riverside County Superior Court.

Section 14. NOTICES. All notices which are allowed or required to be given hereunder shall be in writing and (1) shall be deemed given and received when personally delivered or (2) shall be deemed given when the same are deposited in the United States mail, with postage prepaid, to be sent by registered or certified mail or overnight mail service, addressed to the applicable designated person by one party to the other in

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement writing, and shall be deemed received on the second business day after such mailing.

If to City: City of Indio
100 Civic Center Mall
Indio, CA 925001
If to the Operator: Indio West Coast Retail, LLC
42650 Melanie Place
Palm Desert, CA 92211
Section 15. SEVERABILITY. If any part of this Agreement is declared invalid for any reason, such invalidity shall not affect the validity of the remainder of the Agreement. The other parts of this Agreement shall remain in effect as if this Agreement had been executed without the invalid part. The City and the Operator intend and desire that the remaining parts of this Agreement continue to be effective without any part or parts that have been declared invalid.

Section 16. NEGATION OF CITY. The City and the Operator acknowledge that, in entering into and performing under this Agreement, each is acting as an independent entity and not as an agent of the other in any respect. Nothing contained herein or in any document executed in connection herewith shall be construed as making the City and the Operator joint venturers, partners or employer/employee.

Section 17. WAIVER. No waiver of any provision of this Agreement shall be effective unless in writing and signed by a duly authorized representative of the party against whom enforcement of a waiver is sought.

Section 18. SECTION HEADINGS. The section headings contained in this Agreement are for convenience and identification only and shall not be deemed to limit or define the contents to which they relate.

Section 19. TIME OF ESSENCE. Time is of the essence of this Agreement, and all performances required hereunder shall be completed within the time periods specified. Any failure of performance shall be deemed as a material breach of this Agreement.

Section 20. INDEMNIFICATION. To the fullest extent permitted by law, the City shall not assume any liability whatsoever with respect to having issued a Commercial Cannabis Business Permit pursuant to this article or otherwise approving the operation of any Commercial Cannabis Business. The Operator agrees to indemnify, defend (at Operator’s sole cost and expense), and hold the City and its officers, officials, employees, representatives, and agents harmless, from any and all claims, losses, damages, injuries, liabilities or losses which arise out of, or which are in any way related to the City’s issuance of the Commercial Cannabis Business Permit, the City’s decision to approve the operation of the Commercial Cannabis

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement Business or activity, the process used by the City in making its decision, or the alleged violation of any federal, state or local laws by the Commercial Cannabis Business or any of its officers, employees or agents. Operator shall reimburse the City for all costs and expenses, including but not limited to legal fees and costs and court costs, which the City may be required to pay as a result of any legal challenge related to the City’s approval of the Operator’s Commercial Cannabis Business Permit, or related to the City’s approval of a Commercial Cannabis Activity. The City may, at its sole discretion, participate at its own expense in the defense of any such action, but such participation shall not relieve any of the obligations imposed hereunder.

Section 21. INSURANCE.

A. Prior to execution of this Agreement by City, Operator shall obtain and maintain during the performance of this Agreement the insurance coverages as specified in EXHIBIT A attached hereto and incorporated herein by this reference, issued by a company satisfactory to the Risk Manager, unless the Risk Manager waives, in writing, the requirement that Operator obtain and maintain such insurance coverages.

B. Prior to commencement of any construction under this Agreement, Operator shall file with the Risk Manager evidence of insurance coverage as specified in EXHIBIT A. Evidence of insurance coverage shall be forwarded to the Risk Manager, addressed as specified in EXHIBIT A.

C. Maintenance of proper insurance coverages by Operator is a material element of this Agreement. Operator's failure to maintain or renew insurance coverages or to provide evidence of renewal may be considered as a material breach of this Agreement.
[Signature Page Follows]

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement

COMMERCIAL CANNABIS BUSINESSES

COMMUNITY BENEFITS AND

NEIGHBORHOOD COMPATIBILITY AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the date and year first-above written.

CITY OF INDIO:
______________________________ Date: ____ / _____ / ______ Bryan H. Montgomery, City Manager

APPROVED AS TO FORM
______________________________ Date: ____ / _____ / ______ Steven Graham, City Attorney
ATTEST
______________________________ Date: ____ / _____ / ______ Sabdi Sanchez, City Clerk Administrator
OPERATOR:
______________________________ Date: ____ / _____ / ______ Printed: _______________________
Its: ___________________________

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement EXHIBIT "A"

INSURANCE
A. Insurance Requirements. Operator shall provide and maintain insurance, acceptable to the City, in full force and effect throughout the term of this Agreement, against claims for injuries to persons or damages to property which may arise from or in connection with the operation of the Facility or City’s issuance of a Commercial Cannabis Business Permit. Insurance is to be placed with insurers with a current A.M. Best's rating of no less than A:VII. Operator shall provide the following scope and limits of insurance:

General liability insurance. Operator shall maintain commercial general liability insurance with coverage at least as broad as Insurance Services Office form CG 00 01, in an amount not less than $1,000,000 per occurrence, $2,000,000 general aggregate, for bodily injury, personal injury, and property damage. The policy must include contractual liability that has not been amended. Any endorsement restricting standard ISO “insured contract” language will not be accepted.

Workers’ compensation insurance. Operator shall maintain Workers’ Compensation Insurance (Statutory Limits) and Employer’s Liability Insurance (with limits of at least $1,000,000 per accident or disease).

Operator shall submit to City, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of City, its officers, officials, agents, employees and volunteers.

Crime insurance. Operator shall maintain fidelity bond coverage or commercial crime insurance which shall be written on a “loss sustained form” or “discovery form” with limits of not less than $1,000,000 per occurrence for Employee Dishonesty, Fraud, Depositor Forgery, Money Orders & Counterfeit money, Fraudulent Fund Transfers, and Theft by Electronic Means. Said policy shall also include coverage for Money & Securities – On and Off Premises – including transportation by messenger, Fraudulent Instruction, Robbery and Burglary with limits of not less than $100,000 per occurrence.

Umbrella or excess liability insurance. As an option to meet the limits of insurance required by this Agreement, Operator may obtain and maintain an umbrella or excess liability insurance policy with limits that will provide bodily injury, personal injury and property damage liability coverage at least as broad as the primary coverages set forth above, including commercial general liability, automobile liability, and employer’s liability. Such policy or policies shall include the following terms and conditions:
• A drop-down feature requiring the policy to respond if any primary insurance that would otherwise have applied proves to be uncollectible in whole or in part for any reason; • Pay on behalf of wording as opposed to reimbursement; • Concurrency of effective dates with primary policies; • Policies shall “follow form” to the underlying primary policies; and

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement • Insureds under primary policies shall also be insureds under the umbrella or excess policies.

B. Other Provisions. Each insurance policy required by this Agreement shall be endorsed and state the coverage shall not be suspended, voided, cancelled by the insurer or either Party to this Agreement, reduced in coverage or in limits except after 30 days' prior written notice by certified mail, return receipt requested, has been given to City.

C. Other Requirements. Operator agrees to deposit with City, at or before the effective date of this contract, certificates of insurance necessary to satisfy City that the insurance provisions of this contract have been complied with. The City Attorney may require that Operator furnish City with copies of original endorsements effecting coverage required by this Section. The certificates and endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. City reserves the right to inspect complete, certified copies of all required insurance policies, at any time.

1. Upon request from the City, Operator shall furnish certificates and endorsements from each subcontractor identical to those Operator provides.

2. Any deductibles or self-insured retentions must be declared to and approved by City. At the option of City, either the insurer shall reduce or eliminate such deductibles or selfinsured retentions as respects City or its respective elected or appointed officers, officials, employees and volunteers or the Operator shall procure a bond guaranteeing payment of losses and related investigations, claim administration, defense expenses and claims.

3. The procuring of such required policy or policies of insurance shall not be construed to limit Operator’s liability hereunder nor to fulfill the indemnification provisions and requirements of this Agreement.

4. Coverage provided by Operator shall be primary and any insurance or self-insurance procured or maintained by City shall not be required to contribute with it. The limits of insurance required herein may be satisfied by a combination of primary and umbrella or excess insurance.

Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and non-contributory basis for the benefit of City before the City’s own insurance or self-insurance shall be called upon to protect it as a named insured.

5. All insurance coverage maintained or procured pursuant to this agreement shall be endorsed to waive subrogation against City, its elected or appointed officers, agents, officials, employees and volunteers or shall specifically allow Operator or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss.

Operator hereby waives its own right of recovery against City, and shall require similar written express waivers and insurance clauses from each of its subcontractors.

6. General liability policies shall provide or be endorsed to provide that City and its officers, officials, employees, and agents, and volunteers shall be additional insureds under such policies. This provision shall also apply to any excess/umbrella liability policies.

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City Council
September 18, 2023

STAFF REPORT
To: City Council
From: Bryan H. Montgomery, City Manager
Prepared by: Bryan H. Montgomery, City Manager
Subject: Community Benefit Agreement with Indio Responsible & Compliant, LLC dba Embarc Indio for its City of Indio Cannabis Storefront Retail Business Program Permit
RECOMMENDATION:

Approve Community Benefit Agreement with Indio Responsible & Compliant, LLC dba Embarc Indio for its City of Indio Cannabis Storefront Retail Business Program Permit SUMMARY:

Council approval consideration of the required Community Benefit Agreement for Indio Responsible & Compliant, LLC dba Embarc Indio
BACKGROUND INFORMATION:

On July 26, 2023, the City Council, at a duly noticed special meeting, approved the award and issuance of a City of Indio Cannabis Storefront Retail Business Program Permit to Culture CC Indio dba Culture Cannabis Club.

Section 126.33 (C) of the City of Indio Municipal Code specifies that prior to operating in the city and as a condition of issuance of a permit, the operator of each cannabis facility shall enter into an operational and/or community benefit agreement with the city setting forth the terms and conditions under which the cannabis facility will operate that are in addition to the requirements of this chapter, including, but not limited to, public outreach and education, community service, payment of fees and other charges as mutually agreed, and such other terms and conditions that will protect and promote the public health, safety and welfare. Therefore, prior to the City Manager's issuance of a City of Indio Cannabis Storefront Retail Business Program Permit for the five (5) awarded Permit recipients, City Council approval is required for the Community Benefit Agreement for each recipient.

Following the City Council's action on July 26, 2023, the City Manager's Office, City Attorney's Office and Community Development Department collaborated on the development of a draft Community Benefit Agreement document. This document was intentionally prepared to be utilized for all five (5) of the approved Cannabis Storefront Retail Business Program Permit recipients with the only substantive changes between agreements being the business, name, location, contact information and signatory (ies) information.

On August 18, 2023, City Manager Montgomery, City Attorney Graham and Community Development Director hosted a virtual meeting with all five (5) of the recipients to discuss and answer questions AGENDA ITEM #9.7
Community Benefit Agreement with Indio Responsible & Compliant, LLC dba ... Page 774 of 1306 regarding the draft community benefit agreement. The draft agreement was provided in advance to the recipients to help them prepare for the meeting. The recipients had a limited number of questions pertaining to automobile liability insurance requirements and frequency of required payments for gross receipts. Following this meeting, a final version of the Agreement was sent to each of the recipients for review and signature.

The Community Benefit Agreement specifies the roles and responsibilities of the City of Indio and of the Cannabis Storefront Retail Business Program Permit recipient. Section 3 (Community Benefits Payment) of the Agreement specifies the required payment of six (6) percent of gross receipts for a fiscal quarter to the City of Indio. These payments can be made more frequently than quarterly, but at a minimum, quarterly payments are required.

The City Manger's Office has identified a possible utilization of the aforementioned gross receipts payments subject to City Council concurrence. Specifically, this approach would allocate five (5) percent of the required six (6) percent payment to the City's General Fund to be used primarily for public safety and would allocate the remaining one (1) percent in the following manner: a) .25% to the Coachella Valley History Museum; b) .25% to the Indio Performing Arts Center; c) 25% to to the Coachella Valley Art Center; and d) .25% to the Indio Economic Development Corporation.

Section 5 (Additional Community Benefits) of the Agreement specifies that each recipient will agree to provide during each calendar year, or portion thereof, that this Agreement is in effect additional community benefits to nonprofits and civic organizations that primarily operate or provide services within the City of Indio equal to one (1) percent of gross receipts. This Section further specifies that within sixty (60) calendar days after the end of each calendar year, each recipient shall provide written documentation to the satisfaction of the City Manager or designee that the recipient has met the obligations of this Section 5.

The Community Benefit Agreement for Indio Responsible & Compliant, LLC dba Embarc Indio for its City of Indio Cannabis Storefront Retail Business Program Permit comprehensively meets the requirements of Section 126.33 (C) of the City of Indio Municipal Code. The City Council's approval of this Agreement is the final Council action needed prior to the City Manager's conditional approval of City of Indio Cannabis Storefront Retail Business Program Permit for Indio Responsible & Compliant, LLC dba Embarc Indio.

ATTACHMENTS:

Attachment1_IndioCommunityBenefitAgreement_IndioResponsible&CompliantRetailLLCdba EmbarcIndio
APPROVAL(S):

Steven Graham, City Attorney Approved - 06 Sep 2023
Bryan H. Montgomery, City Manager Approved - 07 Sep 2023

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COMMERCIAL CANNABIS BUSINESSES

COMMUNITY BENEFITS AND

NEIGHBORHOOD COMPATIBILITY AGREEMENT
This Community Benefits Agreement (“Agreement”) is entered into as of September ___, 2023 (the “Effective Date”) by and between the CITY OF INDIO, a municipal corporation of the State of California (hereafter “City”) and INDIO RESPONSIBLE & COMPLIANT RETAIL, LLC, doing business as EMBARC INDIO (hereafter “Operator”).

A. Concurrent with the execution of this Agreement, the City issued Operator a Commercial Cannabis Business Permit (the “CCBP”) for Operator to operate a cannabis retail facility at 45835 Towne Street in the City of Indio, California (the “Facility”).

B. Operator acknowledges and agrees that the City would not have approved the CCBP if Operator had not agreed to comply with all of the conditions of the CCBP, including (but not limited to) its obligation to enter into this Agreement.

C. Operator also acknowledges and agrees that, prior to its application for a Commercial Cannabis Business Permit from the City to operate the Facility, Operator was fully aware of its obligation to enter into a binding Community Benefit Agreement with the City consistent with the terms of this Agreement, and Operator chose to move forward with such application process.

NOW, THEREFORE, in consideration of the foregoing Recitals which are hereby incorporated into the operative provisions of this Agreement by this reference and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the City and the Operator agree as follows:

Section 1. PURPOSE. The purpose of this Agreement is to memorialize Operator’s commitment to provide Community Benefits to the City of Indio in accordance with Chapter 123 (Cannabis Business Activities) of the Indio Municipal Code.

Section 2. TERM. The term (“Term”) of this Agreement begins on the Effective Date, and it expires upon the earliest of any of the following:

A. the revocation or termination of the CCBP and the entry of the final court judgment of any litigation challenging such revocation or termination; B. the effective date of the final court judgment ruling that the CCBP is invalid; or

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement C. the effective date of any change in the law that invalidates the CCBP or that prohibits sales of cannabis or cannabis products at the Facility.

Notwithstanding any language in this Section 2 to the contrary, the provisions of Section 20 of this Agreement shall survive the termination of the Agreement for a period of five (5) years.

Section 3. COMMUNITY BENEFITS PAYMENT. Starting upon the issuance of a Certificate of Occupancy or Temporary Certificate of Occupancy, and continuing until the termination of this Agreement, Operator shall make no less than quarterly community benefit payments (each a “Payment”) to the City in the amount of SIX PERCENT (6%) of gross receipts for the quarter, or portion thereof, during the Term beginning on the date the certificate of occupancy is issued to the Facility.

Operator may make payments more frequently than quarterly, but shall, at a minimum, make quarterly payments as prescribed herein.

When Operator makes a Payment to the City, Operator shall include with the payment a financial statement in a form acceptable to the city showing the Facility’s gross receipts upon which the calculation for the Payment is made.

For the months of January through March of each year, the Payment shall be due on the last City business day of the following month April.

For the months of April through June of each year, the Payment shall be due on the last City business day of the following month July.

For the months of July through September of each year, the Payment shall be due on the last City business day of the following month October.

For the months of October through December of each year, the Payment shall be due on the last City business day of the following month January.

Notwithstanding the above, in the event the City enacts a tax on cannabis retail business activity at a rate higher than is generally applicable to all other retail business activity in the City, then the Parties agree to negotiate in good faith to amend this Agreement to reduce the amounts described in sections A and B by the amount of such new taxes on cannabis retail business activity. For example, if the City were to enact a 10% tax on gross receipts of cannabis retail businesses, then the Parties would negotiate a reduction in Section A If, on the other hand, the City enacted a generally applicable sales tax increase of 1% on all retail business activity in the City, then no change to the above would be required.

If the City voluntarily issues a Commercial Cannabis Business Permit to an entity operating a retail cannabis business other than Operator, the Parties agree to engage in good faith negotiations to amend this Agreement to ensure that Operator is not

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement obligated to payment of community benefits at a higher rate than the other retail cannabis business.

For the purposes of this Agreement, gross receipts includes the total of amounts actually received or receivable from sales within the City and the total amounts actually received or receivable for the performance of any act or service within the City, of whatever nature it may be, for which a charge is made or credit allowed, whether or not such act or service is done as a part of or in connection with the sale of materials, goods, wares or merchandise. Included in gross receipts shall be all receipts, cash, credits and property of any kind or nature, without any deduction therefrom on account of the cost of the property sold, the cost of materials used, labor or service costs, interest paid or payable, or losses or other expenses whatsoever. Excluded from gross receipts shall be the following:
(1) Cash discounts allowed and taken on sales.
(2) Credit allowed on property accepted as part of the purchase price, if the property may later be sold.
(3) Any tax required by law to be included in or added to the purchase price and collected from the consumer or purchaser.
(4) Such part of the sale price of property returned by the purchaser upon rescission of the contract of sale as is refunded either in cash or by credit.

Section 4. VERIFICATION OF GROSS RECEIPTS. During the term of this Agreement and for three years following its expiration, the City Manager or his/her designee may request copies of Operator’s state and federal tax returns, cash-flow reports, financial statements, income statements, books, journals, and other financial records for the Operator (“Financial Records”) to enable the City Manager to independently verify Operator’s Gross Receipts during the period for which any Payment is made. Within thirty (30) calendar days after receiving the City Manager’s written request for Financial Records under this section, Operator shall provide the City Manager copies of all Financial Records requested by the City Manager. If the City Manager determines that Operator has underpaid any Payment, Operator shall pay the City the balance owed, as determined by the City Manager, within thirty (30) calendar days following a written request for payment from the City Manager. Operator’s obligations shall survive the expiration of this Agreement.

Section 5. ADDITIONAL COMMUNITY BENEFITS. Operator agrees to provide during each calendar year, or portion thereof, that this Agreement is in effect additional community benefits to nonprofits and civic organizations that primarily operate or provide services within the City of Indio equal to ONE PERCENT (1%) of gross receipts. Within sixty (60) calendar days after the end of each calendar year,

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement Operator shall provide written documentation to the satisfaction of the City Manager or designee that Operator has met the obligations of this Section 5.

In lieu of the performance of the obligation above, the Operator may, after written notification to the City, elect to include an additional payment to the City in the amount of with each quarterly Community Benefits Payment, which the City will make available to nonprofits and civic organizations operating within the City of Indio.

Section 6. DEPOSIT AND USE OF PAYMENTS. City Manager will ensure that all Payments are deposited in an account administered by the City. The use and allocation of all Payment revenues, and any interest that accrues thereon, will be determined by the City of Indio in its sole discretion. All payments, and all interest that accrues thereon, shall be the property of the City.

Section 7. NEIGHBORHOOD COMPATIBILITY.

A. Conditions of Permit Approval Incorporated. Conditions placed on the Commercial Cannabis Permit issued to the Operator are hereby incorporated into this Agreement as though set forth herein in full and shall be conditions of this Agreement. Violations of the Commercial Cannabis Permit and/or any State License issued to the Operator for Operator’s Cannabis Business shall be deemed violations of this Agreement and shall constitute a material breach of this Agreement.

B. State License(s) and City Permit(s). The Operator shall obtain and maintain at all times during the Term of this Agreement a valid Commercial Cannabis Permit, and all applicable State License(s) required by the State Cannabis Laws for Operator’s Cannabis Business.

1. State License(s). As soon as practicable, the Operator shall inform the City when it obtains all applicable State License(s) and shall provide a copy of the State License(s) to the Director. The City shall cooperate with the Operator as appropriate and as needed to facilitate the State’s issuance of a State License(s) to the Operator for Operator’s Cannabis Business.

2. City Permit(s). The City shall diligently process the Operator’s applications for all City Permits. This Agreement does not commit the City in advance to approve the City Permits; nor does this Agreement constrain the City’s discretion to determine compliance with all requirements regarding issuance of any City Permits. Nothing in this Agreement relieves the Operator of the obligation to comply with all requirements and application procedures set forth in the Indio Municipal Cod, other applicable rules and regulations and/or the Cannabis Regulations.

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement C. Compliance with Applicable Law. The Operator understands, acknowledges and agrees to comply with all applicable state and local laws, rules and regulations applicable to operation of Operator’s Cannabis Business, including, without limitation, the Cannabis Regulations.

D. Operational Requirements. In addition to all operating requirements set forth in the Cannabis Regulations, the Operator shall comply with the following specific operational requirements:

1. Notification Regarding Criminal Activity. The Operator shall immediately notify the and the City of Indio Police Department of any criminal activity, or suspected criminal activity, occurring at the Subject Property. In the event of any internal security system breach, including a faulty alarm system, broken or damaged surveillance cameras or other video recording equipment, or broken or damaged locks, doors, or lighting which may increase risk of criminal activity at the Subject Property, the Operator or the Manager of Operator’s Cannabis Business shall notify the Indio Police Department as soon as practicable after becoming aware of the security system breach. The Operator shall diligently attempt to fix or resolve any such security breach immediately; if circumstances require additional time and delay to remedy, the Operator shall so notify the Indio Police Department and provide an estimated timeline of when the breach will be cured.

2. Notification Regarding Criminal Threats. If the Operator receives any criminal threats, or otherwise suspects any criminal targeting related to movement of Cannabis or Cannabis Product or cash from or to the Subject Property, the Operator shall immediately notify the Indio Police Department.

3. Site Inspections. The City Manager or any other authorized representative, official, officer, or agent of the City of Indio may perform site inspections of Operator’s Cannabis Business and the Subject Property during hours of operation with no advance notice required. The scope of the inspection shall be to ensure compliance with all conditions on Operator’s Cannabis Business, including compliance with State Cannabis Laws, such as but not limited to, track and trace requirements, product storage, labeling, and disposal of product, as well as accounting, ledgers for distribution, and other records and operating procedures. The Operator shall provide proof, including through visual observation and confirmation by City staff, of any storage, disposal or distribution of cannabis and/or cannabis product as may be necessary to ensure compliance. Should the City discover any evidence of falsification of records or other practices inconsistent with the Cannabis

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement Regulations and/or the State Cannabis Laws, the Commercial Cannabis Permit may be suspended in accordance with the Cannabis Regulations, in which event, the Operator shall, upon written notice from the City, immediately cease and desist operations until such time that the issues have been resolved to the satisfaction of the City.

Section 8. ANNUAL INSPECTION AND FEE. Pursuant to Subsection 123.34.A of the Indio Municipal Code, Operator shall maintain accurate books and records in an electronic format, detailing all of the revenues and expenses of the business, and all of its assets and liabilities for a period not less than seven years. On no less than an annual basis (at or before the time of the renewal of a cannabis business permit issued pursuant to this chapter), or at any time upon reasonable request of the city, each cannabis business shall file a sworn statement detailing the number and amount of sales by the cannabis business during the previous 12-month period (or shorter period based upon the timing of the request), provided on a per-month basis.

The statement shall also include gross sales for each month, and all applicable taxes and/or fees paid or due to be paid. On an annual basis, Operator shall submit to the city a financial audit of the business's operations conducted by an independent certified public accountant. Operator shall be subject to a regulatory compliance review and a gross receipts financial audit, where applicable, as determined by the city. Operator shall pay the Annual Regulatory Fee for Cannabis Storefront Business Permit Recipients as established by the City Council.

Section 9. ASSIGNMENT. Operator’s obligations under this Agreement shall be binding upon Operator’s successors and assigns. Operator shall not assign this Agreement, or any of its obligations under this Agreement, to any other person or entity without the advance written approval of the City, which shall be within its sole discretion to provide.

Section 10. NO THIRD-PARTY BENEFICIARIES. Nothing in this Agreement confers and rights or obligations on any person or entity that is not a party to this Agreement.

Section 11. COUNTERPARTS. The Agreement may be executed in counterparts.

Section 12. GOVERNING LAW. This Agreement shall be governed by the laws of the State of California.

Section 13. VENUE. Because the Facility will be located in Riverside County, Operator and City agree that any legal action relating in any way to this Agreement or the CCBP may only be brought and maintained in the Riverside County Superior Court.

Section 14. NOTICES. All notices which are allowed or required to be given hereunder shall be in writing and (1) shall be deemed given and received when personally delivered or (2) shall be deemed given when the same are deposited in the United States mail, with postage prepaid, to be sent by registered or certified mail or overnight mail service, addressed to the applicable designated person by one party to the other in

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement writing, and shall be deemed received on the second business day after such mailing.

If to City: City of Indio
100 Civic Center Mall
Indio, CA 925001
If to the Operator: Indio Responsible &Compliant Retail, LLC 1616 Webster Street
Alameda, CA 94501
Section 15. SEVERABILITY. If any part of this Agreement is declared invalid for any reason, such invalidity shall not affect the validity of the remainder of the Agreement. The other parts of this Agreement shall remain in effect as if this Agreement had been executed without the invalid part. The City and the Operator intend and desire that the remaining parts of this Agreement continue to be effective without any part or parts that have been declared invalid.

Section 16. NEGATION OF CITY. The City and the Operator acknowledge that, in entering into and performing under this Agreement, each is acting as an independent entity and not as an agent of the other in any respect. Nothing contained herein or in any document executed in connection herewith shall be construed as making the City and the Operator joint venturers, partners or employer/employee.

Section 17. WAIVER. No waiver of any provision of this Agreement shall be effective unless in writing and signed by a duly authorized representative of the party against whom enforcement of a waiver is sought.

Section 18. SECTION HEADINGS. The section headings contained in this Agreement are for convenience and identification only and shall not be deemed to limit or define the contents to which they relate.

Section 19. TIME OF ESSENCE. Time is of the essence of this Agreement, and all performances required hereunder shall be completed within the time periods specified. Any failure of performance shall be deemed as a material breach of this Agreement.

Section 20. INDEMNIFICATION. To the fullest extent permitted by law, the City shall not assume any liability whatsoever with respect to having issued a Commercial Cannabis Business Permit pursuant to this article or otherwise approving the operation of any Commercial Cannabis Business. The Operator agrees to indemnify, defend (at Operator’s sole cost and expense), and hold the City and its officers, officials, employees, representatives, and agents harmless, from any and all claims, losses, damages, injuries, liabilities or losses which arise out of, or which are in any way related to the City’s issuance of the Commercial Cannabis Business Permit, the City’s decision to approve the operation of the Commercial Cannabis

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement Business or activity, the process used by the City in making its decision, or the alleged violation of any federal, state or local laws by the Commercial Cannabis Business or any of its officers, employees or agents. Operator shall reimburse the City for all costs and expenses, including but not limited to legal fees and costs and court costs, which the City may be required to pay as a result of any legal challenge related to the City’s approval of the Operator’s Commercial Cannabis Business Permit, or related to the City’s approval of a Commercial Cannabis Activity. The City may, at its sole discretion, participate at its own expense in the defense of any such action, but such participation shall not relieve any of the obligations imposed hereunder.

Section 21. INSURANCE.

A. Prior to execution of this Agreement by City, Operator shall obtain and maintain during the performance of this Agreement the insurance coverages as specified in EXHIBIT A attached hereto and incorporated herein by this reference, issued by a company satisfactory to the Risk Manager, unless the Risk Manager waives, in writing, the requirement that Operator obtain and maintain such insurance coverages.

B. Prior to commencement of any construction under this Agreement, Operator shall file with the Risk Manager evidence of insurance coverage as specified in EXHIBIT A. Evidence of insurance coverage shall be forwarded to the Risk Manager, addressed as specified in EXHIBIT A.

C. Maintenance of proper insurance coverages by Operator is a material element of this Agreement. Operator's failure to maintain or renew insurance coverages or to provide evidence of renewal may be considered as a material breach of this Agreement.
[Signature Page Follows]

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement EXHIBIT "A"

INSURANCE
A. Insurance Requirements. Operator shall provide and maintain insurance, acceptable to the City, in full force and effect throughout the term of this Agreement, against claims for injuries to persons or damages to property which may arise from or in connection with the operation of the Facility or City’s issuance of a Commercial Cannabis Business Permit. Insurance is to be placed with insurers with a current A.M. Best's rating of no less than A:VII. Operator shall provide the following scope and limits of insurance:

General liability insurance. Operator shall maintain commercial general liability insurance with coverage at least as broad as Insurance Services Office form CG 00 01, in an amount not less than $1,000,000 per occurrence, $2,000,000 general aggregate, for bodily injury, personal injury, and property damage. The policy must include contractual liability that has not been amended. Any endorsement restricting standard ISO “insured contract” language will not be accepted.

Workers’ compensation insurance. Operator shall maintain Workers’ Compensation Insurance (Statutory Limits) and Employer’s Liability Insurance (with limits of at least $1,000,000 per accident or disease).

Operator shall submit to City, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of City, its officers, officials, agents, employees and volunteers.

Crime insurance. Operator shall maintain fidelity bond coverage or commercial crime insurance which shall be written on a “loss sustained form” or “discovery form” with limits of not less than $1,000,000 per occurrence for Employee Dishonesty, Fraud, Depositor Forgery, Money Orders & Counterfeit money, Fraudulent Fund Transfers, and Theft by Electronic Means. Said policy shall also include coverage for Money & Securities – On and Off Premises – including transportation by messenger, Fraudulent Instruction, Robbery and Burglary with limits of not less than $100,000 per occurrence.

Umbrella or excess liability insurance. As an option to meet the limits of insurance required by this Agreement, Operator may obtain and maintain an umbrella or excess liability insurance policy with limits that will provide bodily injury, personal injury and property damage liability coverage at least as broad as the primary coverages set forth above, including commercial general liability, automobile liability, and employer’s liability. Such policy or policies shall include the following terms and conditions:
• A drop-down feature requiring the policy to respond if any primary insurance that would otherwise have applied proves to be uncollectible in whole or in part for any reason; • Pay on behalf of wording as opposed to reimbursement; • Concurrency of effective dates with primary policies; • Policies shall “follow form” to the underlying primary policies; and

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement • Insureds under primary policies shall also be insureds under the umbrella or excess policies.

B. Other Provisions. Each insurance policy required by this Agreement shall be endorsed and state the coverage shall not be suspended, voided, cancelled by the insurer or either Party to this Agreement, reduced in coverage or in limits except after 30 days' prior written notice by certified mail, return receipt requested, has been given to City.

C. Other Requirements. Operator agrees to deposit with City, at or before the effective date of this contract, certificates of insurance necessary to satisfy City that the insurance provisions of this contract have been complied with. The City Attorney may require that Operator furnish City with copies of original endorsements effecting coverage required by this Section. The certificates and endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. City reserves the right to inspect complete, certified copies of all required insurance policies, at any time.

1. Upon request from the City, Operator shall furnish certificates and endorsements from each subcontractor identical to those Operator provides.

2. Any deductibles or self-insured retentions must be declared to and approved by City. At the option of City, either the insurer shall reduce or eliminate such deductibles or selfinsured retentions as respects City or its respective elected or appointed officers, officials, employees and volunteers or the Operator shall procure a bond guaranteeing payment of losses and related investigations, claim administration, defense expenses and claims.

3. The procuring of such required policy or policies of insurance shall not be construed to limit Operator’s liability hereunder nor to fulfill the indemnification provisions and requirements of this Agreement.

4. Coverage provided by Operator shall be primary and any insurance or self-insurance procured or maintained by City shall not be required to contribute with it. The limits of insurance required herein may be satisfied by a combination of primary and umbrella or excess insurance.

Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and non-contributory basis for the benefit of City before the City’s own insurance or self-insurance shall be called upon to protect it as a named insured.

5. All insurance coverage maintained or procured pursuant to this agreement shall be endorsed to waive subrogation against City, its elected or appointed officers, agents, officials, employees and volunteers or shall specifically allow Operator or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss.

Operator hereby waives its own right of recovery against City, and shall require similar written express waivers and insurance clauses from each of its subcontractors.

6. General liability policies shall provide or be endorsed to provide that City and its officers, officials, employees, and agents, and volunteers shall be additional insureds under such policies. This provision shall also apply to any excess/umbrella liability policies.

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City Council
September 18, 2023

STAFF REPORT
To: City Council
From: Bryan H. Montgomery, City Manager
Prepared by: Bryan H. Montgomery, City Manager
Subject: Community Benefit Agreement with OTC Indio, LLC for its City of Indio Cannabis Storefront Retail Business Program Permit
RECOMMENDATION:

Approve Community Benefit Agreement with OTC Indio, LLC for its City of Indio Cannabis Storefront Retail Business Program Permit
SUMMARY:

Council approval consideration of the required Community Benefit Agreement for OTC Indio, LLC BACKGROUND INFORMATION:

On July 26, 2023, the City Council, at a duly noticed special meeting, approved the award and issuance of a City of Indio Cannabis Storefront Retail Business Program Permit to Culture CC Indio dba Culture Cannabis Club.

Section 126.33 (C) of the City of Indio Municipal Code specifies that prior to operating in the city and as a condition of issuance of a permit, the operator of each cannabis facility shall enter into an operational and/or community benefit agreement with the city setting forth the terms and conditions under which the cannabis facility will operate that are in addition to the requirements of this chapter, including, but not limited to, public outreach and education, community service, payment of fees and other charges as mutually agreed, and such other terms and conditions that will protect and promote the public health, safety and welfare. Therefore, prior to the City Manager's issuance of a City of Indio Cannabis Storefront Retail Business Program Permit for the five (5) awarded Permit recipients, City Council approval is required for the Community Benefit Agreement for each recipient.

Following the City Council's action on July 26, 2023, the City Manager's Office, City Attorney's Office and Community Development Department collaborated on the development of a draft Community Benefit Agreement document. This document was intentionally prepared to be utilized for all five (5) of the approved Cannabis Storefront Retail Business Program Permit recipients with the only substantive changes between agreements being the business, name, location, contact information and signatory (ies) information.

On August 18, 2023, City Manager Montgomery, City Attorney Graham and Community Development Director hosted a virtual meeting with all five (5) of the recipients to discuss and answer questions regarding the draft community benefit agreement. The draft agreement was provided in advance to the recipients to help them prepare for the meeting. The recipients had a limited number of questions AGENDA ITEM #9.8
Community Benefit Agreement with OTC Indio, LLC for its City of Indio Ca... Page 787 of 1306 pertaining to automobile liability insurance requirements and frequency of required payments for gross receipts. Following this meeting, a final version of the Agreement was sent to each of the recipients for review and signature.

The Community Benefit Agreement specifies the roles and responsibilities of the City of Indio and of the Cannabis Storefront Retail Business Program Permit recipient. Section 3 (Community Benefits Payment) of the Agreement specifies the required payment of six (6) percent of gross receipts for a fiscal quarter to the City of Indio. These payments can be made more frequently than quarterly, but at a minimum, quarterly payments are required.

The City Manger's Office has identified a possible utilization of the aforementioned gross receipts payments subject to City Council concurrence. Specifically, this approach would allocate five (5) percent of the required six (6) percent payment to the City's General Fund to be used primarily for public safety and would allocate the remaining one (1) percent in the following manner: a) .25% to the Coachella Valley History Museum; b) .25% to the Indio Performing Arts Center; c) 25% to to the Coachella Valley Art Center; and d) .25% to the Indio Economic Development Corporation.

Section 5 (Additional Community Benefits) of the Agreement specifies that each recipient will agree to provide during each calendar year, or portion thereof, that this Agreement is in effect additional community benefits to nonprofits and civic organizations that primarily operate or provide services within the City of Indio equal to one (1) percent of gross receipts. This Section further specifies that within sixty (60) calendar days after the end of each calendar year, each recipient shall provide written documentation to the satisfaction of the City Manager or designee that the recipient has met the obligations of this Section 5.

The Community Benefit Agreement for OTC Indio, LLC for its City of Indio Cannabis Storefront Retail Business Program Permit comprehensively meets the requirements of Section 126.33 (C) of the City of Indio Municipal Code. The City Council's approval of this Agreement is the final Council action needed prior to the City Manager's conditional approval of City of Indio Cannabis Storefront Retail Business Program Permit for OTC Indio, LLC.

ATTACHMENTS:

Attachment1_IndioCommunityBenefitAgreement_OTCIndioLLC
APPROVAL(S):

Steven Graham, City Attorney Approved - 06 Sep 2023
Bryan H. Montgomery, City Manager Approved - 07 Sep 2023

Community Benefit Agreement with OTC Indio, LLC for its City of Indio Ca... Page 788 of 1306

COMMERCIAL CANNABIS BUSINESSES

COMMUNITY BENEFITS AND

NEIGHBORHOOD COMPATIBILITY AGREEMENT
This Community Benefits Agreement (“Agreement”) is entered into as of September ___, 2023 (the “Effective Date”) by and between the CITY OF INDIO, a municipal corporation of the State of California (hereafter “City”) and OTC INDIO, LLC., doing business as OTC INDIO (hereafter “Operator”).

A. Concurrent with the execution of this Agreement, the City issued Operator a Commercial Cannabis Business Permit (the “CCBP”) for Operator to operate a cannabis retail facility at 45794 Salton Street in the City of Indio, California (the “Facility”).

B. Operator acknowledges and agrees that the City would not have approved the CCBP if Operator had not agreed to comply with all of the conditions of the CCBP, including (but not limited to) its obligation to enter into this Agreement.

C. Operator also acknowledges and agrees that, prior to its application for a Commercial Cannabis Business Permit from the City to operate the Facility, Operator was fully aware of its obligation to enter into a binding Community Benefit Agreement with the City consistent with the terms of this Agreement, and Operator chose to move forward with such application process.

NOW, THEREFORE, in consideration of the foregoing Recitals which are hereby incorporated into the operative provisions of this Agreement by this reference and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the City and the Operator agree as follows:

Section 1. PURPOSE. The purpose of this Agreement is to memorialize Operator’s commitment to provide Community Benefits to the City of Indio in accordance with Chapter 123 (Cannabis Business Activities) of the Indio Municipal Code.

Section 2. TERM. The term (“Term”) of this Agreement begins on the Effective Date, and it expires upon the earliest of any of the following:

A. the revocation or termination of the CCBP and the entry of the final court judgment of any litigation challenging such revocation or termination; B. the effective date of the final court judgment ruling that the CCBP is invalid; or

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement C. the effective date of any change in the law that invalidates the CCBP or that prohibits sales of cannabis or cannabis products at the Facility.

Notwithstanding any language in this Section 2 to the contrary, the provisions of Section 20 of this Agreement shall survive the termination of the Agreement for a period of five (5) years.

Section 3. COMMUNITY BENEFITS PAYMENT. Starting upon the issuance of a Certificate of Occupancy or Temporary Certificate of Occupancy, and continuing until the termination of this Agreement, Operator shall make no less than quarterly community benefit payments (each a “Payment”) to the City in the amount of SIX PERCENT (6%) of gross receipts for the quarter, or portion thereof, during the Term beginning on the date the certificate of occupancy is issued to the Facility.

Operator may make payments more frequently than quarterly, but shall, at a minimum, make quarterly payments as prescribed herein.

When Operator makes a Payment to the City, Operator shall include with the payment a financial statement in a form acceptable to the city showing the Facility’s gross receipts upon which the calculation for the Payment is made.

For the months of January through March of each year, the Payment shall be due on the last City business day of the following month April.

For the months of April through June of each year, the Payment shall be due on the last City business day of the following month July.

For the months of July through September of each year, the Payment shall be due on the last City business day of the following month October.

For the months of October through December of each year, the Payment shall be due on the last City business day of the following month January.

Notwithstanding the above, in the event the City enacts a tax on cannabis retail business activity at a rate higher than is generally applicable to all other retail business activity in the City, then the Parties agree to negotiate in good faith to amend this Agreement to reduce the amounts described in sections A and B by the amount of such new taxes on cannabis retail business activity. For example, if the City were to enact a 10% tax on gross receipts of cannabis retail businesses, then the Parties would negotiate a reduction in Section A If, on the other hand, the City enacted a generally applicable sales tax increase of 1% on all retail business activity in the City, then no change to the above would be required.

If the City voluntarily issues a Commercial Cannabis Business Permit to an entity operating a retail cannabis business other than Operator, the Parties agree to engage in good faith negotiations to amend this Agreement to ensure that Operator is not

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement obligated to payment of community benefits at a higher rate than the other retail cannabis business.

For the purposes of this Agreement, gross receipts includes the total of amounts actually received or receivable from sales within the City and the total amounts actually received or receivable for the performance of any act or service within the City, of whatever nature it may be, for which a charge is made or credit allowed, whether or not such act or service is done as a part of or in connection with the sale of materials, goods, wares or merchandise. Included in gross receipts shall be all receipts, cash, credits and property of any kind or nature, without any deduction therefrom on account of the cost of the property sold, the cost of materials used, labor or service costs, interest paid or payable, or losses or other expenses whatsoever. Excluded from gross receipts shall be the following:
(1) Cash discounts allowed and taken on sales.
(2) Credit allowed on property accepted as part of the purchase price, if the property may later be sold.
(3) Any tax required by law to be included in or added to the purchase price and collected from the consumer or purchaser.
(4) Such part of the sale price of property returned by the purchaser upon rescission of the contract of sale as is refunded either in cash or by credit.

Section 4. VERIFICATION OF GROSS RECEIPTS. During the term of this Agreement and for three years following its expiration, the City Manager or his/her designee may request copies of Operator’s state and federal tax returns, cash-flow reports, financial statements, income statements, books, journals, and other financial records for the Operator (“Financial Records”) to enable the City Manager to independently verify Operator’s Gross Receipts during the period for which any Payment is made. Within thirty (30) calendar days after receiving the City Manager’s written request for Financial Records under this section, Operator shall provide the City Manager copies of all Financial Records requested by the City Manager. If the City Manager determines that Operator has underpaid any Payment, Operator shall pay the City the balance owed, as determined by the City Manager, within thirty (30) calendar days following a written request for payment from the City Manager. Operator’s obligations shall survive the expiration of this Agreement.

Section 5. ADDITIONAL COMMUNITY BENEFITS. Operator agrees to provide during each calendar year, or portion thereof, that this Agreement is in effect additional community benefits to nonprofits and civic organizations that primarily operate or provide services within the City of Indio equal to ONE PERCENT (1%) of gross receipts. Within sixty (60) calendar days after the end of each calendar year,

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement Operator shall provide written documentation to the satisfaction of the City Manager or designee that Operator has met the obligations of this Section 5.

In lieu of the performance of the obligation above, the Operator may, after written notification to the City, elect to include an additional payment to the City in the amount of with each quarterly Community Benefits Payment, which the City will make available to nonprofits and civic organizations operating within the City of Indio.

Section 6. DEPOSIT AND USE OF PAYMENTS. City Manager will ensure that all Payments are deposited in an account administered by the City. The use and allocation of all Payment revenues, and any interest that accrues thereon, will be determined by the City of Indio in its sole discretion. All payments, and all interest that accrues thereon, shall be the property of the City.

Section 7. NEIGHBORHOOD COMPATIBILITY.

A. Conditions of Permit Approval Incorporated. Conditions placed on the Commercial Cannabis Permit issued to the Operator are hereby incorporated into this Agreement as though set forth herein in full and shall be conditions of this Agreement. Violations of the Commercial Cannabis Permit and/or any State License issued to the Operator for Operator’s Cannabis Business shall be deemed violations of this Agreement and shall constitute a material breach of this Agreement.

B. State License(s) and City Permit(s). The Operator shall obtain and maintain at all times during the Term of this Agreement a valid Commercial Cannabis Permit, and all applicable State License(s) required by the State Cannabis Laws for Operator’s Cannabis Business.

1. State License(s). As soon as practicable, the Operator shall inform the City when it obtains all applicable State License(s) and shall provide a copy of the State License(s) to the Director. The City shall cooperate with the Operator as appropriate and as needed to facilitate the State’s issuance of a State License(s) to the Operator for Operator’s Cannabis Business.

2. City Permit(s). The City shall diligently process the Operator’s applications for all City Permits. This Agreement does not commit the City in advance to approve the City Permits; nor does this Agreement constrain the City’s discretion to determine compliance with all requirements regarding issuance of any City Permits. Nothing in this Agreement relieves the Operator of the obligation to comply with all requirements and application procedures set forth in the Indio Municipal Cod, other applicable rules and regulations and/or the Cannabis Regulations.

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement C. Compliance with Applicable Law. The Operator understands, acknowledges and agrees to comply with all applicable state and local laws, rules and regulations applicable to operation of Operator’s Cannabis Business, including, without limitation, the Cannabis Regulations.

D. Operational Requirements. In addition to all operating requirements set forth in the Cannabis Regulations, the Operator shall comply with the following specific operational requirements:

1. Notification Regarding Criminal Activity. The Operator shall immediately notify the and the City of Indio Police Department of any criminal activity, or suspected criminal activity, occurring at the Subject Property. In the event of any internal security system breach, including a faulty alarm system, broken or damaged surveillance cameras or other video recording equipment, or broken or damaged locks, doors, or lighting which may increase risk of criminal activity at the Subject Property, the Operator or the Manager of Operator’s Cannabis Business shall notify the Indio Police Department as soon as practicable after becoming aware of the security system breach. The Operator shall diligently attempt to fix or resolve any such security breach immediately; if circumstances require additional time and delay to remedy, the Operator shall so notify the Indio Police Department and provide an estimated timeline of when the breach will be cured.

2. Notification Regarding Criminal Threats. If the Operator receives any criminal threats, or otherwise suspects any criminal targeting related to movement of Cannabis or Cannabis Product or cash from or to the Subject Property, the Operator shall immediately notify the Indio Police Department.

3. Site Inspections. The City Manager or any other authorized representative, official, officer, or agent of the City of Indio may perform site inspections of Operator’s Cannabis Business and the Subject Property during hours of operation with no advance notice required. The scope of the inspection shall be to ensure compliance with all conditions on Operator’s Cannabis Business, including compliance with State Cannabis Laws, such as but not limited to, track and trace requirements, product storage, labeling, and disposal of product, as well as accounting, ledgers for distribution, and other records and operating procedures. The Operator shall provide proof, including through visual observation and confirmation by City staff, of any storage, disposal or distribution of cannabis and/or cannabis product as may be necessary to ensure compliance. Should the City discover any evidence of falsification of records or other practices inconsistent with the Cannabis

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement Regulations and/or the State Cannabis Laws, the Commercial Cannabis Permit may be suspended in accordance with the Cannabis Regulations, in which event, the Operator shall, upon written notice from the City, immediately cease and desist operations until such time that the issues have been resolved to the satisfaction of the City.

Section 8. ANNUAL INSPECTION AND FEE. Pursuant to Subsection 123.34.A of the Indio Municipal Code, Operator shall maintain accurate books and records in an electronic format, detailing all of the revenues and expenses of the business, and all of its assets and liabilities for a period not less than seven years. On no less than an annual basis (at or before the time of the renewal of a cannabis business permit issued pursuant to this chapter), or at any time upon reasonable request of the city, each cannabis business shall file a sworn statement detailing the number and amount of sales by the cannabis business during the previous 12-month period (or shorter period based upon the timing of the request), provided on a per-month basis.

The statement shall also include gross sales for each month, and all applicable taxes and/or fees paid or due to be paid. On an annual basis, Operator shall submit to the city a financial audit of the business's operations conducted by an independent certified public accountant. Operator shall be subject to a regulatory compliance review and a gross receipts financial audit, where applicable, as determined by the city. Operator shall pay the Annual Regulatory Fee for Cannabis Storefront Business Permit Recipients as established by the City Council.

Section 9. ASSIGNMENT. Operator’s obligations under this Agreement shall be binding upon Operator’s successors and assigns. Operator shall not assign this Agreement, or any of its obligations under this Agreement, to any other person or entity without the advance written approval of the City, which shall be within its sole discretion to provide.

Section 10. NO THIRD-PARTY BENEFICIARIES. Nothing in this Agreement confers and rights or obligations on any person or entity that is not a party to this Agreement.

Section 11. COUNTERPARTS. The Agreement may be executed in counterparts.

Section 12. GOVERNING LAW. This Agreement shall be governed by the laws of the State of California.

Section 13. VENUE. Because the Facility will be located in Riverside County, Operator and City agree that any legal action relating in any way to this Agreement or the CCBP may only be brought and maintained in the Riverside County Superior Court.

Section 14. NOTICES. All notices which are allowed or required to be given hereunder shall be in writing and (1) shall be deemed given and received when personally delivered or (2) shall be deemed given when the same are deposited in the United States mail, with postage prepaid, to be sent by registered or certified mail or overnight mail service, addressed to the applicable designated person by one party to the other in

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement writing, and shall be deemed received on the second business day after such mailing.

If to City: City of Indio
100 Civic Center Mall
Indio, CA 925001
If to the Operator: OTC Indio, LLC
23 Corporate Plaza, Suite 150
Newport Beach, CA 92660
Section 15. SEVERABILITY. If any part of this Agreement is declared invalid for any reason, such invalidity shall not affect the validity of the remainder of the Agreement. The other parts of this Agreement shall remain in effect as if this Agreement had been executed without the invalid part. The City and the Operator intend and desire that the remaining parts of this Agreement continue to be effective without any part or parts that have been declared invalid.

Section 16. NEGATION OF CITY. The City and the Operator acknowledge that, in entering into and performing under this Agreement, each is acting as an independent entity and not as an agent of the other in any respect. Nothing contained herein or in any document executed in connection herewith shall be construed as making the City and the Operator joint venturers, partners or employer/employee.

Section 17. WAIVER. No waiver of any provision of this Agreement shall be effective unless in writing and signed by a duly authorized representative of the party against whom enforcement of a waiver is sought.

Section 18. SECTION HEADINGS. The section headings contained in this Agreement are for convenience and identification only and shall not be deemed to limit or define the contents to which they relate.

Section 19. TIME OF ESSENCE. Time is of the essence of this Agreement, and all performances required hereunder shall be completed within the time periods specified. Any failure of performance shall be deemed as a material breach of this Agreement.

Section 20. INDEMNIFICATION. To the fullest extent permitted by law, the City shall not assume any liability whatsoever with respect to having issued a Commercial Cannabis Business Permit pursuant to this article or otherwise approving the operation of any Commercial Cannabis Business. The Operator agrees to indemnify, defend (at Operator’s sole cost and expense), and hold the City and its officers, officials, employees, representatives, and agents harmless, from any and all claims, losses, damages, injuries, liabilities or losses which arise out of, or which are in any way related to the City’s issuance of the Commercial Cannabis Business Permit, the City’s decision to approve the operation of the Commercial Cannabis

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement Business or activity, the process used by the City in making its decision, or the alleged violation of any federal, state or local laws by the Commercial Cannabis Business or any of its officers, employees or agents. Operator shall reimburse the City for all costs and expenses, including but not limited to legal fees and costs and court costs, which the City may be required to pay as a result of any legal challenge related to the City’s approval of the Operator’s Commercial Cannabis Business Permit, or related to the City’s approval of a Commercial Cannabis Activity. The City may, at its sole discretion, participate at its own expense in the defense of any such action, but such participation shall not relieve any of the obligations imposed hereunder.

Section 21. INSURANCE.

A. Prior to execution of this Agreement by City, Operator shall obtain and maintain during the performance of this Agreement the insurance coverages as specified in EXHIBIT A attached hereto and incorporated herein by this reference, issued by a company satisfactory to the Risk Manager, unless the Risk Manager waives, in writing, the requirement that Operator obtain and maintain such insurance coverages.

B. Prior to commencement of any construction under this Agreement, Operator shall file with the Risk Manager evidence of insurance coverage as specified in EXHIBIT A. Evidence of insurance coverage shall be forwarded to the Risk Manager, addressed as specified in EXHIBIT A.

C. Maintenance of proper insurance coverages by Operator is a material element of this Agreement. Operator's failure to maintain or renew insurance coverages or to provide evidence of renewal may be considered as a material breach of this Agreement.
[Signature Page Follows]

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement

COMMERCIAL CANNABIS BUSINESSES

COMMUNITY BENEFITS AND

NEIGHBORHOOD COMPATIBILITY AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the date and year first-above written.

CITY OF INDIO:
______________________________ Date: ____ / _____ / ______ Bryan H. Montgomery, City Manager

APPROVED AS TO FORM
______________________________ Date: ____ / _____ / ______ Steven Graham, City Attorney
ATTEST
______________________________ Date: ____ / _____ / ______ Sabdi Sanchez, City Clerk Administrator
OPERATOR:
______________________________ Date: ____ / _____ / ______ Printed: _______________________
Its: ___________________________
Norman Yousif

OTC INDIO, LLC
Owner / CEO
09 05 2023

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City of Indio - Commercial Cannabis Business Program
Community Benefits and Neighborhood Compatibility Agreement EXHIBIT "A"

INSURANCE
A. Insurance Requirements. Operator shall provide and maintain insurance, acceptable to the City, in full force and effect throughout the term of this Agreement, against claims for injuries to persons or damages to property which may arise from or in connection with the operation of the Facility or City’s issuance of a Commercial Cannabis Business Permit. Insurance is to be placed with insurers with a current A.M. Best's rating of no less than A:VII. Operator shall provide the following scope and limits of insurance:

General liability insurance. Operator shall maintain commercial general liability insurance with coverage at least as broad as Insurance Services Office form CG 00 01, in an amount not less than $1,000,000 per occurrence, $2,000,000 general aggregate, for bodily injury, personal injury, and property damage. The policy must include contractual liability that has not been amended. Any endorsement restricting standard ISO “insured contract” language will not be accepted.

Workers’ compensation insurance. Operator shall maintain Workers’ Compensation Insurance (Statutory Limits) and Employer’s Liability Insurance (with limits of at least $1,000,000 per accident or disease).

Operator shall submit to City, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of City, its officers, officials, agents, employees and volunteers.

Crime insurance. Operator shall maintain fidelity bond coverage or commercial crime insurance which shall be written on a “loss sustained form” or “discovery form” with limits of not less than $1,000,000 per occurrence for Employee Dishonesty, Fraud, Depositor Forgery, Money Orders & Counterfeit money, Fraudulent Fund Transfers, and Theft by Electronic Means. Said policy shall also include coverage for Money & Securities – On and Off Premises – including transportation by messenger, Fraudulent Instruction, Robbery and Burglary with limits of not less than $100,000 per occurrence.

Umbrella or excess liability insurance. As an option to meet the limits of insurance required by this Agreement, Operator may obtain and maintain an umbrella or excess liability insurance policy with limits that will provide bodily injury, personal injury and property damage liability coverage at least as broad as the primary coverages set forth above, including commercial general liability, automobile liability, and employer’s liability. Such policy or policies shall include the following terms and conditions:
• A drop-down feature requiring the policy to respond if any primary insurance that would otherwise have applied proves to be uncollectible in whole or in part for any reason; • Pay on behalf of wording as opposed to reimbursement; • Concurrency of effective dates with primary policies; • Policies shall “follow form” to the underlying primary policies; and