2024-08-12_item_4.24_award_construction_contract_to_gse_construction_company_inc._for_construction_of_cip_ww_22-38_ctf_phase_3_expansion

ITEM 4.24

CITY MANAGER'S REPORT
AUGUST 12, 2024 CITY COUNCIL REGULAR MEETING
ITEM: AWARD CONSTRUCTION CONTRACT TO GSE
CONSTRUCTION COMPANY, INC. FOR
CONSTRUCTION OF CIP WW 22-38, CTF PHASE 3

EXPANSION, APPROVE BUDGET AMENDMENT, AND

APPROVE UPDATED FUNDING AGREEMENT WITH

RIVER ISLANDS DEVELOPMENT, LLC
RECOMMENDATION: Adopt Resolution Awarding a Construction Contract to GSE Construction Company, Inc. for CIP WW 22-
38, CTF Phase 3 Expansion, Approving Budget
Amendment and Approving Updated Funding
Agreement with River Islands Development, LLC
SUMMARY:

On June 3, 2021, during the Budget Hearing process the City Council approved the creation of Capital Improvement Project (CIP) WW 22-38, Consolidated Treatment Facility (CTF) Phase 3 Expansion, to increase the City's wastewater treatment capacity from 2.5 Million Gallons per Day (MGD) to 5.0 MGD (Project).

The Notice to Contractors advertising the plans and specifications for the construction of the Project were formally noticed for bid on June 14, 2024 and June 21, 2024, pursuant to California Public Contract Code (PCC) 20160 and Lathrop Municipal Code (LMC) 2.36.060. The City Clerk received and opened seven (7) bids on August 6, 2024. Based on the review and evaluation of the bids, the lowest and most responsible bidder for the Project was determined to be GSE Construction Company, Inc. (GSE Construction) with a Base Bid of $39,348,400.

This report is requesting three approval actions from Council. First, staff requests the City Council award a construction contract to GSE Construction for the construction of the Project in the amount of $39,348,400, and a 10% construction contingency of $3,934,840 for a total contract amount not to exceed $42,283,240.

Since the approval of this project in 2021, and during the planning stages of this • estimated the project to be around
$25,000,000. However, over the course of the last three years the economy experienced significant inflation rate increases. Inevitably, the cost of construction materials and labor has increased significantly. Therefore, the funds allocated in the approved Fiscal Year (FY) 2024-25 budget, for CIP WW 22-38, are currently insufficient. Therefore, the second request is the approval of a budget amendment transferring $5,500,000 from the Sewer Connection Fee Fund (6030) and $13,733,240 from the Developer Fund (2710) to the CIP Project Fund.

CITY MANAGER'S REPORT PAGE 2
AUGUST 12, 2024 CITY COUNCIL REGULAR MEETING
AWARD CONSTRUCTION CONTRACT TO GSE CONSTRUCTION COMPANY, INC.

FOR CONSTRUCTION OF CIP WW 22-38, CTF PHASE 3 EXPANSION, APPROVE

BUDGET AMENDMENT, AND APPROVE UPDATED FUNDING AGREEMENT WITH

RIVER ISLANDS DEVELOPMENT, LLC
The third request is the approval of the revised and updated Design and Construction Funding Agreement by and between the City of Lathrop and River Islands Development, LLC Related to the Phase 3 Expansion of the Existing Lathrop Consolidated Treatment Facility (Funding Agreement). On February 12, 2024, the City Council approved the Design and Construction Funding Agreement by and between the City of Lathrop and River Islands Development, LLC Related to the Phase 3 Expansion of the Existing Lathrop Consolidated Treatment Facility (Funding Agreement).

Payment terms and estimated amounts contained in the Funding Agreement were based upon an engineer's estimate plus 10% contingency for a total cost of $27.5M; however, the actual cost for the construction contract and 10% contingency is $42,283,240, which is over 50% higher than that estimated in the Funding Agreement. Therefore, staff requests City Council approve an updated Funding Agreement, Attachment C, which includes modifications to the original Funding Agreement. The updated Funding Agreement changes the payment terms for River Islands including an increase in the total contribution from $22,000,000 to $34,626,592, and adjustment of the initial payment to $11,773,100, the six quarterly payments to $3,809,000, and the payment guarantee value to $10,226,900.

BACKGROUND:

The CTF's wastewater treatment capacity was last increased from 1.0 MGD to 2.5 MGD via CIP WW 14-14 in 2018 to keep pace with development. As residential and commercial development continues at a fast pace, additional wastewater treatment capacity will soon be needed to accommodate planned development in the River Islands area and throughout the City.

Pacific Advanced Civil Engineering (PACE) prepared the plans and technical was also included as a bid alternate to provide a mechanical shop.

Staff released the plans and specifications for formal bid solicitation on June 10, 2024 pursuant to CA PCC 20160 and LMC 2.36.060. Seven (7) bids were received and opened by the City Clerk on August 6, 2024, all determined to be responsive and from responsible bidders.

CITY MANAGER'S REPORT PAGE 3
AUGUST 12, 2024 CITY COUNCIL REGULAR MEETING
AWARD CONSTRUCTION CONTRACT TO GSE CONSTRUCTION COMPANY, INC.

FOR CONSTRUCTION OF CIP WW 22-38, CTF PHASE 3 EXPANSION, APPROVE

BUDGET AMENDMENT, AND APPROVE UPDATED FUNDING AGREEMENT WITH

RIVER ISLANDS DEVELOPMENT, LLC
The bid results are summarized in Table 1 below:

Table 1: Summary of Bid Results-CTF Phase 3 Expansion
Contractor Base Bid
GSE Construction $39,348,400
Overaa Construction $39,869,000
Gateway Pacific Contractors $40,290,560
Mountain Cascade $41,471,876
Auburn Constructors $41,792,300
Myers & Sons Construction $47,427,000
Swinerton Builders $57,074,163
Staff reviewed and evaluated the bids, and determined that the lowest most responsible bidder is GSE Construction, with a base bid of $39,348,400. Staff requests the City Council award a construction contract to GSE Construction for the construction of the Project in the amount of $39,348,400, and a 10% construction contingency of $3,934,840 for a total contract amount not to exceed $42,283,240.

REASON FOR RECOMMENDATION:

The proposed improvements will increase the City's wastewater treatment capacity from 2.5 MGD to 5.0 MGD, which is necessary to serve additional development occurring in River Islands and throughout the City. This project also supports the overall financial sustainability of the city.

FISCAL IMPACT:

The proposed construction contract with GSE Construction is for $39,348,400. A 10% construction contingency is requested for $39,348,400 for a total Construction Contract cost not to exceed $42,283,240.

The City executed the Funding Agreement with River Islands in February 2024, which stipulated an 80%/20% share of the construction cost, plus contingency for the Project between River Islands and the City, respectively. The portions of funding needed from each entity to fund the Project Construction plus 10% contingency are depicted below in Table 2, below:

Table 2: Summary of Funding Responsibility
Item Cost City share River Islands share
@ 20% @ 80%
Construction + Contingency $42,283,240 $7,656,648 $34,626,592

CITY MANAGER'S REPORT
AUGUST 12, 2024 CITY COUNCIL REGULAR MEETING
AWARD CONSTRUCTION CONTRACT TO GSE CONSTRUCTION COMPANY, INC.

FOR CONSTRUCTION OF CIP WW 22-38, CTF PHASE 3 EXPANSION, APPROVE

BUDGET AMENDMENT, AND APPROVE UPDATED FUNDING AGREEMENT WITH

RIVER ISLANDS DEVELOPMENT, LLC
Payment terms and estimated amounts for the City and River Islands contained in the Funding Agreement were based upon a combined construction contract plus 10% contingency cost of $27.5M; however, the actual cost for the construction contract and 10% contingency is $42,283,240, which is over 50% higher than that estimated in the Funding Agreement. Therefore, staff requests City Council approve the updated Funding Agreement, Attachment C.

Sufficient funds were not allocated to CIP WW 22-38 in the approved Fiscal Year 2024/25 budget to award the contract; therefore, staff is requesting a budget amendment transferring $5,500,000 from the Sewer Connection Fee Fund (6030) and $13,733,240 from the Developer Fund (2710) to the CIP Project Fund as detailed below.

A. Resolution Awarding a Construction Contract to GSE Construction Company, Inc. for CIP WW 22-38, CTF Phase 3 Expansion, Approving Budget Amendment and Approving Updated Funding Agreement with River Islands Development, B. Construction Contract with GSE Construction Company, Inc. for CIP WW 22- 38, CTF Phase 3 Expansion
C. Updated Design and Construction Funding Agreement by and between the City of Lathrop and River Islands Development, LLC Related to the Phase 3 Expansion of the Existing Lathrop Consolidated Treatment Facility CITY MANAGER'S REPORT PAGE 5
AUGUST 12, 2024 CITY COUNCIL REGULAR MEETING
AWARD CONSTRUCTION CONTRACT TO GSE CONSTRUCTION COMPANY, INC.

FOR CONSTRUCTION OF CIP WW 22-38, CTF PHASE 3 EXPANSION, APPROVE

BUDGET AMENDMENT, AND APPROVE UPDATED FUNDING AGREEMENT WITH

RIVER ISLANDS DEVELOPMENT, LLC
APPROVALS:
don beed 8-7-2024
<en Reed Date
Senior Construction Manager
FOR 8.1.2024
Brad Taylor Date
City Engineer
8/7/2024
Thomas Hedegard Date
Deputy City Manager

8. 1.2024
Michael King Date
Assistant City Manager

8.7-2014
Salvador Navarrete Date
City Attorney

8.7.24 Steptien J. Salvatore Date
City Manager
RESOLUTION NO. 24-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LATHROP AWARDING A CONSTRUCTION CONTRACT TO GSE CONSTRUCTION COMPANY, INC. FOR CTF PHASE 3 EXPANSION, CIP WW 22-38, APPROVING BUDGET AMENDMENT

AND APPROVING UPDATED FUNDING AGREEMENT WITH RIVER ISLANDS

DEVELOPMENT, LLC
WHEREAS, on November 8, 2021, City Council approved the creation of Consolidated Treatment Facility (CTF) Phase 3 Expansion, Capital Improvement Project (CIP) WW 22-38 (Project) to expand the treatment capacity of the existing wastewater treatment plant from 2.5 Million Gallons per Day (MGD) to 5.0 MGD; and WHEREAS, on June 10, 2024, the City solicited bids for the construction of the Project pursuant to PCC 20160 and LMC 2.36.060; and WHEREAS, a total of seven (7) bids were received and opened by the City Clerk on August 6, 2024; and
WHEREAS, upon review and evaluation of the bids, the responsible bidder with the lowest responsive Base Bid for the Project was determined to be GSE Construction Company, Inc. (GSE Construction) with a Base Bid of $39,348,400; and WHEREAS, staff requests City Council award a construction contract to GSE Construction in the amount of $39,348,400 for the construction of the Project contemplated by the Base Bid; and
WHEREAS, staff also requests Council authorize a 10% construction contingency in the amount of $3,934,840 and authorize staff to spend the contingency as necessary to achieve the goals of the Project for a total construction cost not to exceed $42,283,240; and
WHEREAS, pursuant to the Design and Construction Funding Agreement By and Between the City of Lathrop and River Islands Development, LLC (River Islands) Related to the Phase 3 Expansion of the Existing Lathrop Consolidated Treatment Facility executed on February 12, 2024 (Funding Agreement), River Islands will pay for 80% of the total project construction and construction contingency cost, which amounts to $34,626,592 based on the Project's total construction cost; and WHEREAS, the Funding Agreement's payment terms for River Islands' 80% share of the construction contract plus 10% contingency cost were based upon an estimated value of $27,500,000; and
WHEREAS, the lowest bid for the construction of the Project submitted by GSE plus 10% contingency amounts to $42,283,240, which is over 50% higher than the Funding Agreement's estimated construction cost; and
WHEREAS, staff request City Council approve an updated Funding Agreement changing the payment terms for River Islands to include an increase in the total contribution from_$22,000,000 to $34,626,592, and adjustment of the initial payment to $11,773,100, the six quarterly payments to $3,809,000, and the payment guarantee value to $10,226,900; and
WHEREAS, sufficient funds were not allocated to CIP WW 22-38 in the adopted Fiscal Year 2024/25 budget for the City's 20% share of the construction cost of the Project; therefore, a budget amendment transferring $5,500,000 from the Sewer Connection Fee Fund (6030) and $13,733,240 from the Developer Fund (2710) to the CIP Project Fund is requested as detailed below:

Increase Revenue
2710-8000-372-0100 $13,733,240
Increase Transfer Out
6030-9900-990-9010 $5,500,000
2710-9900-990-9010 $13,733,240
Increase Transfer In
6090-9900-393-0000 WW 22-38 $19,233,240
Increase Appropriation
6090-8000-420-1200 WW 22-38 $19,233,240
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Lathrop hereby awards a construction contract for $39,348,400 to GSE Construction Company, Inc. for the construction of CTF Phase 3 Expansion, CIP WW 22-38; and BE IT FURTHER RESOLVED, that the City Council of the City of Lathrop does hereby approve a 10% construction contingency of $3,934,840 for the construction of the Project and authorizes staff to spend up to this amount as necessary to accomplish the goals of the Project; and
BE IT FURTHER RESOLVED, that the City Council of the City of Lathrop does hereby approve a budget amendment transferring $5,500,000 from the Sewer Connection Fee Fund (6030) and $13,733,240 from the Developer Fund (2710) to the CIP Project Fund; and
BE IT FURTHER RESOLVED, that the City Council of the City of Lathrop does hereby approve the updated Design and Construction Funding Agreement By and Between the City of Lathrop and River Islands Development, LLC (River Islands) Related to the Phase 3 Expansion of the Existing Lathrop Consolidated Treatment Facility to replace the original Funding Agreement executed on February 12, 2024.

The foregoing resolution was passed and adopted this 12t day of August, 2024 by the following vote of the City Council, to wit:

AYES:

NOES:

ABSTAIN:

ABSENT:

Sonny Dhaliwal, Mayor
ATTEST: APPROVED AS TO FORM:

Teresa Vargas, City Clerk Salvador Navarrete, City Attorney ATTACHMENT " B
SECTION 00500
CTF PHASE 3 EXPANSION CONSTRUCTION CONTRACT
CIP WW 22-38

CONSTRUCTION CONTRACT
This Contract, dated August 12, 2024 is entered into by and between the City of Lathrop, a municipal corporation of the State of California (City), and GSE Construction Company, Inc., (Contractor), whose Taxpayer Identification Number is 94-2667247.

For and in consideration of the following covenants, terms and conditions, City and Contractor (the parties) agree:

1. Term. This Contract shall commence on, and be binding on the parties on, the date of execution of this Contract, and shall expire on the date of recordation of the Notice of Substantial Completion, or, if no such notice is required to be filed, on the date that final payment is made hereunder, subject to the earlier termination of this Contract.

2. General Scope of Project and Work. Construction Documents for CTF PHASE 3 EXPANSION, CIP WW 22-38 (Project). Contractor shall furnish labor, services, materials and equipment in connection with the construction of the Project and complete the Work in accordance with the covenants, terms and conditions of this Contract to the satisfaction of City
The work to be performed under this contract includes all work contained in the Construction Documents, as detailed in Paragraph 3 below, including, but not limited to demolition of a few existing components and construction of three (3) new and replacement of three (3) existing MBR trains and typical appurtenances, and a new sludge handling building.

Following issuance of Notice to Proceed the Project shall be completed as follows:
• Phase Three Operational: within 375 Working Days
• Completion of Project: within 425 Working Days
The Work shall be complete, and all appurtenant work, materials, and services not expressly shown or called for in the Construction Documents which may be necessary for the complete and proper construction of the Work in good faith shall be performed, furnished, and installed by the Contractor as though originally specified or shown. The Contractor will be compensated for actual work performed in accordance with the unit prices and provisions contained in these Construction Documents.

Base Bid Total: $39,348,400 (Thirty-Nine Million, Three Hundred Forty Eight Thousand, Four Hundred Dollars)
Construction Documents. This Contract shall include the Construction Documents which are on file with the Public Works Department and are hereby incorporated by reference (i.e. Project Specifications, Project Plans, addenda, performance bond, labor and materials bond, certification of insurance, workers compensation certification, and Warranty Bond Acknowledgement) and the Bid Documents submitted by GSE Construction Company, 1 of 11
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Inc. on August 6, 2024. For the purposes of construing, interpreting and resolving inconsistencies between the provisions of this Contract, these documents and the provisions thereof are set forth in the order of precedence described in Article 3 of the General Conditions.

4. Compensation. In consideration of Contractor's performance of its obligations hereunder, City shall pay to Contractor the amount set forth in Contractor's Bid in accordance with the provisions of this Contract and upon the receipt of written invoices and all necessary supporting documentation within the time set forth in the Construction Documents.

Contractor hereby shall not be permitted to invoice the City nor accept compensation for work not yet complete. In no event, shall the Contractor be entitled to payment for work not included in the approved scope of work, a written task order, or change order signed by the City's Public Works Director prior to commencement of any work.

5. Insurance. On or before the Date of Execution, Contractor shall obtain and maintain the policies of insurance coverage described in Section 5.2 of the General Conditions on terms and conditions and in amounts as may be required by the City. City shall not be obligated to take out insurance on Contractor's personal property or the personal property of any person performing labor or services or supplying materials or equipment under the Project.

Contractor shall furnish City with the certificates of insurance and with original endorsements affecting coverage required under this Contract on or before the Date of Execution. The certificates and endorsements for each insurance policy shall be signed by a person who is authorized by that insurer to bind coverage in its behalf. Proof of insurance shall be mailed to the Project Manager to the address set forth in Section 15 of this Contract.

6. Indemnification. Contractor agrees to protect, defend, indemnify and hold City, its City Council members, officers, employees, engineer, and construction manager harmless from and against any and all claims, demands, liabilities, losses, damages, costs, expenses, liens, penalties, suits, or judgments, arising in whole or in part, directly or indirectly, at any time from any injury to or death of persons or damage to property as a result of the willful or negligent act or omission of Contractor, or which results from Contractor's noncompliance with any Law respecting the condition, use, occupation or safety of the Project site, or any part thereof, or which arises from Contractor's failure to do anything required under this Contract or for doing anything which Contractor is required not to do under this Contract, or which arises from conduct for which any Law imposes strict liability on Contractor in the performance of or failure to perform the terms and conditions of this Contract, except as may arise from the sole willful or negligent act or omission of City or any of its City Council members, officers, employees. This indemnification shall extend to any and all claims, demands, or liens made or filed by reason of any construction, renovation, or remodeling work performed by Contractor under this Contract at any time during the term of this Contract, or arising thereafter.

Assumption of Risk. Contractor agrees to voluntarily assume any and all risk of loss, damage, or injury to the property of Contractor which may occur in, on, or about the Project site at any time and in any manner, excepting such loss, injury, or damage as may be caused by the sole willful or negligent act or omission of City or any of its City Council members, officers, or employees.
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Waiver. The acceptance of any payment or performance, or any part thereot, shall not operate as a waiver by City of its rights under this Contract. A waiver by City of any breach of any part or provision of this Contract by Contractor shall not operate as a waiver or continuing waiver of any subsequent breach of the same or any other provision, nor shall any custom or practice which may arise between the parties in the administration of any part or provision of this Contract be construed to waive or to lessen the right of City to insist upon the performance of Contractor in strict compliance with the covenants, terms and conditions of this Contract.

Compliance with Laws. Contractor shall comply with all Laws now in force or which may hereafter be in force pertaining to the Project and Work and this Contract, with the requirement of any bond or fire underwriters or other similar body now or hereafter constituted, with any discretionary license or permit issued pursuant to any Law of any public agency or official as well as with any provision of all recorded documents affecting the Project site, insofar as any are required by reason of the use or occupancy of the Project site, and with all Laws pertaining to nondiscrimination and affirmative action in employment and hazardous materials.

DEPARTMENT OF INDUSTRIAL RELATIONS- COMPLIANCE MONITORING UNIT DIR Registration.
a) Contractor and Subcontractor Compliance. Strict compliance with DIR registration requirements pursuant to Labor Code Section 1725.5 is a material obligation of the Contractor under the Contract Documents. The foregoing includes without limitation, compliance with DIR Registration requirements at all times during performance of the Work by the Contractor and all Subcontractors of any tier. The failure of the Contractor and all Subcontractors of every tire to be DIR registered at all times during the performance of the Work is the Contractor's default of a material obligation of the Contractor under the Contract Documents.
b) No Subcontractor Performance of Work Without DIR Registration. No portion of the Work is permitted to be performed by a Subcontractor of any tier unless the Subcontractor is a DIR Registered contractor.
c) Contractor Obligation to Verify Subcontractor DIR Registration Status. An affirmative and on-going obligation of the Contractor under the Contract Documents is the Contractor's verification that all Subcontractors, of all tiers, are at all times during performance of Work in full and strict compliance with DIR Registration requirements.

The Contractor shall not permit or allow any Subcontractor of any tier to perform any Work without the Contractor's verification that all such Subcontractors are in full and strict compliance with DIR Registration requirements.
d) Contractor Obligation to Request Substitution of Non-DIR Registered Subcontractor. If any Subcontractor identified in the Contractor's Subcontractor List submitted with the Contractor's proposal for the Work is not DIR Registered at the time of opening of 3 of 11
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proposals for the Work or if a Subcontractor's DIR registration lapses prior to or during a Subcontractor's performance of Work, the Contractor shall request the CITY's consent to substitute the non-DIR registered Subcontractor pursuant to Labor Code Section 1771.1(c)(3) and/ or Labor Code Section 1771.1(d).

Certified Payroll Records
a) Compliance with Labor Code Section 1771.4 and 1776. A material obligation of the Contractor under the Contract Documents is: (i) the Contractor's strict compliance with the requirements pursuant to Labor Code Section 1771.4 and 1776 for preparation and submittal of Certified Payroll Records ("CPR"); and (ii) the Contractor's enforcement of CPR preparation and submittal for all Subcontractors of every tier. b) Express Condition Precedent to Payment of Contact Price. Strict compliance with CPR requirements established pursuant to Labor Code Section 1776 is an express condition precedent to the CITY's obligation to: (i) process any request for payment of any portion of the Contract Price; or (ii) to disburse any portion of the Contract Price to the Contractor.

The Contractor shall demonstrate strict compliance with CPR preparation and submittal requirements by delivery to the CITY of electronic files or hard copies of all CPR's submitted by the Contractor and/ or Subcontractors for Work pursuant to Labor Code Section 1771.4 and 1776 concurrently with the submittal thereof to the Labor Commissioner. The CITY: (i) shall not be obligated to process or disburse any portion of the Contract Price; or (ii) shall not be deemed in default of the CITY's obligations under the Contract Documents unless the Contractor's demonstrates strict compliance with CPR preparation and submittal requirements.
c) PWR Monitoring and Enforcement. During the Work pursuant to Labor Code Section 1771.4(a)(4), the Department of Industrial Relations shall monitor and enforce the obligation of the Construction and Subcontractors of every tier to pay the laborers performing any portion of the work the PWR established for the classification of work/ labor performed.

RECORD OF WAGES PAID: INSPECTION
Pursuant to Labor Code section 1776, Contractor stipulates to the following:
a) Contractor and each subcontractor shall keep an accurate payroll record, showing the name, address, social security number, work classification, straight time and overtime hours worked each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker, or other employee employed by him or her in connection with the public work under the Facilities lease and Construction Provisions. Such records shall be on forms provided by the Division of Labor Standards Enforcement or shall contain the same information of such forms. The payroll records may consist of payroll data that are maintained as computer records, if printouts contain the same information as the forms provided by the division and the printouts are verified as specified in subdivision (a) of Labor Code section 1776.
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b) The payroll records enumerated under subdivision (a) shall be certified and shall be available for inspection at all reasonable hours at the principal office of Contractor on the following basis:
(1) A certified copy of an employee's payroll record shall be made available for inspection or furnished to such employees or his or her authorized representative on request.
(2) A certified copy of all payroll records enumerated in subdivision (a) shall be made available for inspection or furnished upon request to a representative of the CITY, the Division of Labor Standards Enforcement, and Division of Apprenticeship Standards of the Department of Industrial Relations.
(3) A certified copy of all payroll records enumerated in subdivision (a) shall be made available upon request by the public for inspection or copies thereof. However, a request by the public shall be made through either the CITY, the Division of Apprenticeship Standards, or the Division of Labor Standards Enforcement. If the requested payroll records have not been provided pursuant to paragraph (2), the requesting party shall, prior to being provided the records, reimburse the costs of preparation by Contractor, subcontractors, and the entity through which the request was made. The public shall not be given access to such records at the principal office of Contractor.
c) Contractor shall file a certified copy of the records enumerated in subdivision (a) with the entity that requested such records within ten (10) days after receipt of the written request. d) Any copy of records made available for inspection as copies and furnished upon request to the public or any public agency, by the CITY, the Division of Apprenticeship Standards, or the division of Labor Standards Enforcement shall be marked or obliterated in such a manner as to prevent disclosure of an individual's name, address and social security number. The name and address of contractor awarded the contract or performing the contract shall not be marked or obliterated.
e) Contractor shall inform the CITY of the location of the records enumerated under subdivision (a), including the street address, city, and county, and shall, within (5) working days, provide a notice of a change of location and address.

In the event of noncompliance with the requirements of this Article, Contractor shall have ten (10) days in which to comply subsequent to receipt of written notice specifying in what respects Contractor must comply with this Article. Should noncompliance still be evident after such 10-day period, Contractor shall pay a penalty of One- Hundred Dollars ($100.00) to the CITY for each calendar day, or portion thereof, for each worker, until strict compliance is effectuated. Upon the request of the Division of Apprenticeship Standards or the Division of Labor Standards Enforcement, such penalties shall be withheld from the progress payment then due.
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The responsibility for compliance with this Article shall rest upon Contractor.

10. Bonds. As a condition precedent to City's obligation to pay compensation to Contractor, and on or before the date of Execution, Contractor shall furnish to the Project Manager the Bonds as required under Section 00700 - 5.1A.

11. Representations and Warranties. In the supply of any materials and equipment and the rendering of labor and services during the course and scope of the Project and Work, Contractor represents and warrants:
(1) Any materials and equipment which shall be used during the course and scope of the Project and Work shall be vested in Contractor;
(2) Any materials and equipment which shall be used during the course and scope of the Project and Work shall be merchantable and fit to be used for the particular purpose for which the materials are required;
(3) Any labor and services rendered and materials and equipment used or employed during the course and scope of the Project and Work shall be free of defects in workmanship for a period of one (1) year after the recordation of the Notice of Substantial Completion, or, if no such notice is required to be filed, on the date that final payment is made hereunder;
(4) Any manufacturer's warranty obtained by Contractor shall be obtained or shall be deemed obtained by Contractor for and on behalf of City. (5) Any information submitted by Contractor prior to the award of Contract, or thereafter, upon request, whether or not submitted under a continuing obligation by the terms of the Contract to do so, is true and correct at the time such information is submitted or made available to the City;
(6) Contractor has not colluded, conspired, or agreed, directly or indirectly, with any person in regard to the terms and conditions of Contractor's Bid, except as may be permitted by the Notice to Contractors;
(7) Contractor has the power and the authority to enter into this Contract with City, that the individual executing this Contract is duly authorized to do so by appropriate resolution, and that this Contract shall be executed, delivered and performed pursuant to the power and authority conferred upon the person or persons authorized to bind Contractor;
(8) Contractor has not made an attempt to exert undue influence with the Project Manager or any other person who has directly contributed to City's decision to award the Contract to Contractor;
(9) There are no unresolved claims or disputes between Contractor and City which would materially affect Contractor's ability to perform under the Contract; 6 of 11
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(10) Contractor has furnished and will furnish true and accurate statements, records, reports, resolutions, certifications, and other written information as may be requested of Contractor by City from time to time during the term of this Contract; (11) Contractor and any person performing labor and services under this Project is duly licensed as a contractor with the State of California as required by California Business & Professional Code Section 7028, as amended; and (12) Contractor has fully examined and inspected the Project site and has full knowledge of the physical conditions of the Project site.

12. Assignment. This Contract and the performance required hereunder is personal to Contractor, and it shall not be assigned by Contractor. Any attempted assignment shall be null and void.

13. Claims of Contractor. All claims pertaining to extra work, additional charges, or delays within the Contract Time or other disputes arising out of the Contract shall be submitted by Contractor in accordance with the General Conditions.

14. Audits by City. During the term of this Contract and for a period of not less than three (3) years after the expiration or earlier termination of this Contract, City shall have the right to audit Contractor's Project-related and Work-related writings and business records, as such terms are defined in California Evidence Code Sections 250 and 1271, as amended, during the regular business hours of Contractor, or, if Contractor has no such hours, during the regular business hours of City.

15. Notices. All contracts, agreements, appointments, approvals, authorizations, claims, demands, Change Orders, consents, designations, notices, offers, requests and statements given by either party to the other shall be in writing and shall be sufficiently given and served upon the other party if (1) personally served, (2) sent by the United States mail, postage prepaid, (3) sent by private express delivery service, or (4) in the case of a facsimile Personal service shall include, without limitation, service by delivery and service by facsimile transmission.

To City: City of Lathrop
City Clerk
390 Towne Centre Drive
Lathrop, CA 95330
Copy to: City of Lathrop
epartment of Public Work
90 Towne Centre Driv
Lathrop, CA 95330
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PHONE: (209) 941-7363
FAX: (209) 941-7449
ATTN: Senior Construction Manager
To Contractor:

Mailing Address:

Phone:

Email:

ATTN:

16. Miscellaneous.
(1) Bailee Disclaimer. The parties understand and agree that City does not purport to be Contractor's bailee, and City is, therefore, not responsible for any damage to the personal property of Contractor.
(2) Consent. Whenever in this Contract the approval or consent of a party is required, such approval or consent shall be in writing and shall be executed by a person having the express authority to grant such approval or consent. (3) Controlling Law. The parties agree that this Contract shall be governed and construed by and in accordance with the Laws of the State of California. (4) Definitions. The definitions and terms are as defined in these specifications. (5) Force Majeure. Neither party shall be deemed to be in default on account of any delay or failure to perform its obligations under this Contract, which directly results from an Act of God or an act of a superior governmental authority. (6) Headings. The paragraph headings are not a part of this Contract and shall have no effect upon the construction or interpretation of any part of this Contract. (7) Incorporation of Documents. All documents constituting the Construction Documents described in Section 3 hereof and all documents which may, from time to time, be referred to in any duly executed amendment hereto are by such reference incorporated in this Contract and shall be deemed to be part of this Contract. (8) Integration. This Contract and any amendments hereto between the parties constitute the entire contract between the parties concerning the Project and Work, and there are no other prior oral or written contracts between the parties that are not incorporated in this Contract.
(9) Modification of Contract. This Contract shall not be modified or be binding upon the parties unless such modification is agreed to in writing and signed by the parties. 8 of 11
SECTION 00500
CTF PHASE 3 EXPANSION CONSTRUCTION CONTRACT
CIP WW 22-38
(10) Provision. Any contract, covenant, condition, clause, qualification, restriction, reservation, term or other stipulation in the Contract shall define or otherwise control, establish, or limit the performance required or permitted or to be required of or permitted by either party. All provisions, whether covenants or conditions, shall be deemed to be both covenants and conditions.
(11) Resolution. Contractor shall submit with its Bid a copy of any corporate or partnership resolution or other writing, which authorizes any director, officer or other employee or partner to act for or on behalf of Contractor or which authorizes Contractor to enter into this Contract.
(12) Severability. If a court of competent jurisdiction finds or rules that any provision of this Contract is void or unenforceable, the provisions of this Contract not so affected shall remain in full force and effect.
(13) Status of Contractor. In the exercise of rights and obligations under this Contract, Contractor acts as an independent contractor and not as an agent or employee of City. Contractor shall not be entitled to any rights and benefits accorded or accruing to the City Council members, officers or employees of City, and Contractor expressly waives any and all claims to such rights and benefits. (14) Successors and Assigns. The provisions of this Contract shall inure to the benefit of, and shall apply to and bind, the successors and assigns of the parties. (15) Time of the Essence. Time is of the essence of this Contract and each of its provisions. In the calculation of time hereunder, the time in which an act is to be performed shall be computed by excluding the first Day and including the last. If the time in which an act is to be performed falls on a Saturday, Sunday, or any Day observed as a legal holiday by City, the time for performance shall be extended to the following Business Day.
(16) Venue. In the event that suit is brought by either party hereunder, the parties agree hat trial of such action shall be vested exclusively in the state courts of Californi in the County of San Joaquin or in the United States District Court for the Easter (17) Recovery of costs. The prevailing party in any action brought to enforce the terms of this Contract or arising out of this Contract, including the enforcement of the indemnity provisions), may recover its reasonable costs, including reasonable attorney's fees, incurred or expended in connection with such action against the non-prevailing party.
(18) Contractor and subcontractors must comply with all applicable standards, orders, or requirements issued under Section 306 of the Clean Air Act (42 USC 1857(h)), Section 508 of the Clean Water Act (33 USC1368), Executive Order 11738, and Environmental Protection Agency Regulations at 40 CFR Part 15. 9 of 11
SECTION 00500
CTF PHASE 3 EXPANSION CONSTRUCTION CONTRACT
CIP WW 22-38
(19) Contractors and subcontractors must comply with mandatory standards and policies relating to the energy efficiency which are contained in the State Energy Conservation Plan issued in compliance with the Energy Policy and Conservation ACT (Public Law 94-163, 89 stat 871).
(20) The Contractor shall provide access to the site for the Environmental Protection Agency and its duly authorized representatives, and the City. (21) If during the course of construction evidence of deposit of historical or archaeological interest is found, the Contractor shall cease operation affecting the find and shall notify the City, who shall notify the EPA and the State Historic Preservation Officer. No further disturbance of the deposits shall ensue until the Contractor has been notified by the City that construction may proceed. The City will issue a notice to proceed only after the state official has surveyed the find and made a determination to the EPA and the City. Compensation to the contractor, if any, for lost time or changes in construction to avoid the find, shall be determined in accordance with changed conditions or change order provisions of the Construction Documents.
(22) Notice to Proceed. Prior to commencing work under this Contract, CONTRACTOR shall receive a written "Notice to Proceed" from CITY. A Notice to Proceed shall not be issued until all necessary bonds and insurances have been received. City shall not be obligated to pay CONTRACTOR for any services prior to issuance of the Notice to proceed.
(23) Signatures. The individuals executing this Contract represent and warrant that they have the right, power, legal capacity, and authority to enter into and to execute this Contract on behalf of the respective legal entities of the CONTRACTOR and the CITY. This Contract shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns.
(24) This project is a public works project: Contractor shall comply with requirements of California Labor Code § 1700 and following, and prevailing wages shall be paid for work performed on this project.
(25) The statutory provisions for penalties for failing to comply with the State of California wage and labor laws will be enforced, as well as that for failing to pay prevailing wages.

EXHIBITS:

EXHIBIT A: Contractor's Submitted Bid Packet
Comication of incatoes hat for manched pay in bonds and car ete City Council's approval with resolution.
10 of 11
SECTION 00500
CTF PHASE 3 EXPANSION CONSTRUCTION CONTRACT
CIP WW 22-38
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above stated in Lathrop, California.

CONTRACTOR:

By:

Name:

Title:

CITY OF LATHROP

APPROVEDASTOFORA
Salvador Navarrete, City Attorney
RECOMMENDED FOR APPROVAL:

By:

Michael King, Assistant City Manager
APPROVED:

By:

Stephen J. Salvatore, City Manager
11 of 11
ATTACHMENT " C"

UPDATED DESIGN AND CONSTRUCTION FUNDING AGREEMENT

BY AND BETWEEN THE CITY OF LATHROP

AND RIVER ISLANDS DEVELOPMENT, LLC
RELATED TO THE PHASE 3 EXPANSION OF THE EXISTING

LATHROP CONSOLIDATED TREATMENT FACILITY
This Design and Construction Funding Agreement ("Agreement") is made and entered into as of August 12, 2024, by and between the CITY OF LATHROP, a municipal corporation (CITY ) and RIVER ISLANDS DEVELOPMENT, LLC, a Delaware limited liability company ("DEVELOPER"). DEVELOPER and CITY are referred to herein individually as "party" and collectively as "parties."

RECITALS
A. CITY operates the existing Lathrop Consolidated Treatment Facility ("LCTE") with a permitted flow capacity of 2.5 million gallons per day ("MGD") in accordance with NPDES CA00853559 Order R5-2022-0044 ("NPDES Order"). CITY also operates its recycled water system under the State Water Resources Control Board Recycled Water General Order WQO 2016-0068-DDW ("General Order").

B. At this time, the parties desire to expand the existing LCTF treatment capacity to 5.0 MGD by adding a total of 2.5 MGD capacity to the existing LCTF ("Phase 3 Expansion") as depicted in the 100% Construction plans developed by PACE Engineering dated titled City of Lathrop Consolidated Treatment Facility Phase 3 Expansion, WW 22-38. These plans were bid to outside contractors and seven bids were received on August 6, 2024.

C. CITY and DEVELOPER are parties to a series of prior funding agreements that are identified in Schedule 1 ("Prior Funding Agreements") attached hereto. This Agreement shall apply to the Phase 3 Expansion only. To the extent of any conflicts between the Prior Funding Agreements (whether or not specifically included in Schedule 1) and this Agreement, this Agreement shall control and supersede as to any specific items pertaining to the Phase 3 Expansion only. All terms of the Prior Funding Agreements not specifically addressing the Phase 3 Expansion shall remain in full force and effect.

D. The parties desire to execute this Agreement to set forth their definitive understanding with respect to the funding of pre-design, design, permitting, programming, construction costs and standby charges, including all outside consultant costs and City staff costs relating to the Phase 3 Expansion as more particularly set forth herein. This Agreement supersedes the previous Design and Construction Funding Agreement by and between the City of Lathrop and River Islands Development, LLC Related to the Phase 3 Expansion of the Existing Lathrop Consolidated Treatment Facility dated February 12, 2024.

NOW THEREFORE, in consideration of the promises and covenants contained herein, the above recitals and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

AGREEMENT

1. Incorporation of Recitals.

The parties agree that the foregoing Recitals are true and correct and are incorporated as a part of this Agreement as if set forth in full herein

2. Overall Cost; Phase 3 Expansion.
a. The parties acknowledge that the cost of expanding the existing LCTF to 5.0 MGD for the Phase 3 Expansion (e.g., adding a total of 2.5 MGD to the existing LCTF) is $43,283,240 as set forth in Exhibit A ("Revised Base Bid Schedule") plus a 10% contingency. 1 Of this amount, $3,250,000 has been previously funded by CITY for design costs and for the purchase and installation of the headworks facility.
b. Upon execution of this Agreement, CITY shall use commercially reasonable efforts to complete the Phase 3 Expansion in a timely manner, subject to force majeure delays, including without limitation obtaining all applicable permits and approvals necessary to proceed with the Phase 3 Expansion. By executing this Agreement, CITY agrees to fund its 20% portion of the costs identified in Exhibit C as detailed in Section 3b.

3. Expansion; Payment of Costs; Sewer Allocation and Overpayment. a. Sewer Capacity. Subject to DEVELOPER's compliance with the terms of this Agreement, CITY will provide DEVELOPER with the capacity allocations and percentage share in the Phase 3 Expansion as set forth in Exhibit B ("Sewer Capacity Allocations"). The available sewer capacity flow allocation may be limited subject to the design wastewater strength loading for Biological Oxygen Demand (BOD), Total Nitrogen (TN) and Total Suspended Solids (TSS) allocations (Ibs/day) set forth in Exhibit B.
b. Payments and Credits. DEVELOPER and CITY shall pay their pro-rata share of the costs ($34,626,592 and $8,656,648 respectively) as illustrated in Exhibit C ("Share of Project Costs") as follows:
i. DEVELOPER shall pay $11,773,100 ("Initial Payment") to CITY not later than ten (10) business days after DEVELOPER receives actual notification from CITY that CITY has selected the Contractor to build the construction contract for the Phase 3 Expansion. ii. DEVELOPER shall then pay $3,809,000 every three months after the Initial Payment until the remaining total of $22,853,500 has been paid, for a total of 6 payments. ill. CITY shall receive credit for the $3,250,000 in funding it has already paid.

CITY shall transfer the remaining $$5,406,648 from the Sewer Connection Fee fund into the CIP WW 22-38 Project no later than ten (10) business days after CITY provides notification of selection of Contractor to DEVELOPER.

Payment Guarantee. Concurrent with the timing of the Initial Payment, DEVELOPER shall provide CITY with a payment guarantee, in the form of a set-aside from RIPFA CFD bond, for the total value of $10,226,900 (original Funding Agreement payment guarantee was $14,500,000, adjusted to exclude the increase between the Initial Payment for this Funding Agreement and Initial Payment of the original Funding Agreement, an amount of $4,273, 100) to be used by CITY for the construction of the Phase 3 Expansion in the event that DEVELOPER does not make a payment as required above subject to a notice and cure period. In the event a DEVELOPER payment is not made by the appropriate date, CITY shall provide written notice to DEVELOPER of its lack of payment and DEVELOPER will have a ten (10) business day cure period to make the payment. The payment guarantee shall remain in place and may not be reduced until after DEVELOPER makes the fourth payment at which time the payment guarantee may be reduced to $7,616,800 to reflect the remaining two payments. When the 5' payment is made, the payment guarantee may be reduced to $3,809,000. In no event shall the payment guarantee be reduced to a value less than the remaining funds due by DEVELOPER. CITY shall release any remaining payment guarantee immediately upon receipt of the 6th payment. d. Use of Contingency; Cost Overruns.
i. Exhibit A identifies a Contingency of $3,934,840. Subject to the terms below, the parties agree that CITY may use the Contingency for any cost overruns for the Phase 3 Expansion without obtaining the prior approval of DEVELOPER, provided that CITY shall (A) promptly notify DEVELOPER of the use of Contingency funds, (B) such cost overruns requiring Contingency funds do not include any changes or increases in scope and (C) CITY shall 2 meet and confer with DEVELOPER regarding the use of Contingency funds upon DEVELOPER's request and prior to such use of Contingency funds.
il. If CITY exhausts the Contingency and CITY reasonably believes that it must incur costs in excess of the Contingency to complete the Phase 3 Expansion ("Excess Costs"), CITY shall (A) promptly notify DEVELOPER of such Excess Costs ("Notice of Excess Costs"), (B) CITY shall meet and confer with DEVELOPER regarding the Excess Costs so that CITY may proceed with the work and (C) after mutual agreement, DEVELOPER shall pay their respective share of Excess Costs within ten (10) business days after receipt of the approved Notice of Excess Costs. If the Parties do not reach a mutual agreement on the Excess Cost within ten (10) business days after receipt of Notice of Excess Cost, CITY will pay the Excess Cost to the Contractor to allow the project to proceed and include the disputed sum as amounts to be resolved during the Final Accounting as detailed in Section 3(e)(i) of this Agreement. e. Final Accounting.
i. Upon completion of construction and prior to CITY acceptance of the Phase 3 Expansion, CITY shall provide a draft final accounting of all construction costs incurred by CITY including Excess Cost ("Final Accounting") to DEVELOPER. DEVELOPER shall have the right to review the Final Accounting. Thereafter, the Parties shall meet and confer on the Final Accounting. Should the Parties agree upon the Final Accounting, CITY shall (A) provide the approved Final Accounting to DEVELOPER, (B) proceed with CITY COUNCIL acceptance of the Phase 3 Expansion and (C) pursue final signoff by the Regional Water Quality Control Board ("Regional Board"); and DEVELOPER shall (A) provide written notice of approval of the Final Accounting ("Notice of Approval of Final Accounting") to CITY within ten (10) business days of receiving the Approved Final Accounting and (B) pay their respective remaining share of any Excess Costs as set forth in the Final Accounting concurrently with the Notice of Approval of Final Accounting. Should the Parties not agree upon the Final Accounting, the Parties shall meet and confer to reach agreement within 30 days of completion of construction. If the Parties do not agree within the 30 days, any amount disputed will be presented to City Council to be paid by CITY to the Contractor within ten (10) business days thereafter, and the final resolution of the disputed amount shall be determined by binding arbitration pursuant to the requirements set forth in Section 6 herein.
ii. To the extent that the approved Final Accounting illustrates cost savings (e.g. the Phase 3 Expansion was constructed for less than the Expansion Costs contributed by DEVELOPER, including any savings of Contingency amounts contributed by DEVELOPER), CITY shall reimburse to DEVELOPER its pro-rata share of such cost savings within thirty (30) days after CITY'S issuance of the Notice of Approval of Final Accounting.

4. Restrictions on Reliance or Use of Sewer Allocation by DEVELOPER; Other Restrictions.

Notwithstanding anything to the contrary contained herein, the following shall apply to restrict DEVELOPER's reliance upon or use of its Sewer Allocation in the Phase 3 Expansion ("Sewer Allocation").
a. DEVELOPER acknowledges and understands that DEVELOPER cannot rely upon or use their Sewer Allocation until (i) final completion and CITY acceptance of the Phase 3 Expansion and (ii) final signoff of the completed Phase 3 Expansion by the Regional Board. As used herein, "rely" shall mean the ability to rely upon the availability of such capacity for CITY approval of final maps, and "use" shall mean CITY approval of building permits. b. Use of Float Capacity. CITY recognizes that there is an approximate one-year delay between allocation of sewer capacity to residential lots within a subdivision during final map approval and the actual sewer flow being received at the treatment facility ("Float Capacity").

Completion of the Phase 3 Expansion and final signoff by the Regional Board is expected within two years of the execution of this Agreement. If completion is delayed beyond the approximated 3 two year expectation and (i) DEVELOPER has exhausted all of their existing sewer capacity, as shown in Exhibit D and (ii) DEVELOPER has fully funded their share of this expansion as detailed in Section 2(a) of this Agreement, DEVELOPER shall be permitted to allocate float capacity to residential lots within a subdivision during final map approval to not exceed 119,024 gallons per day (10% of DEVELOPER's total existing sewer capacity). DEVELOPER shall not be permitted to allocate Float Capacity to uses other than residential lots within a subdivision as the use of Float Capacity is based on data from existing residential lot allocations and this basis may not be representative of non-residential uses.
c. No transfer of Sewer Allocations to DEVELOPER or third parties under this Agreement shall be effective unless and until such DEVELOPER or third party has provided to CITY the information required in Schedule 2 attached hereto ("Transfer Information" for City approval which shall not be unreasonably withheld, conditioned or delayed. Item 5 of Schedule 2 requires the purchaser of Sewer Allocations to commit to obtaining a building permit, parcel map or final map within one year of City approval of a transfer or sell the units back to CITY, unless Council approves an alternative time limit. DEVELOPER may be exempt from this time limit on a case-by-case basis and if Council approves the exemption at the time of the transfer for unique situations such as a sale of capacity that exceeds DEVELOPER's project build out sewer demand.

DEVELOPER is exempt from the conditions of Schedule 2 if the Sewer Allocation is part of a large lot or final map.

5. Previous Oversizing; Oversizing Reimbursements. Nothing in this Agreement changes or alters DEVELOPER's right to oversizing reimbursement detailed in previous agreements.

Default.
a. If any party materially breaches or fails to comply with any of its obligations under this Agreement, such breaching party shall have thirty (30) days after receipt of written notice of breach from a non-defaulting party ("Breach Notice") to cure such breach or noncompliance (as such period may be extended as set forth below "Cure Period"). If such breaching party does not cure such breach or noncompliance within the Cure Period, it shall be deemed in default ("Default") under this Agreement, provided that if the nature of the breach or noncompliance reasonably requires more than thirty (30) days to cure, the breaching party shall not be in Default under this Agreement so long as the breaching party commences such cure within the Cure Period and diligently pursues such cure and the Breach Notice sets forth in reasonable detail the nature of the breach, noncompliance or default, as the case may be. The party sending the Breach Notice shall provide a copy to all parties hereunder. b. Subject to the provisions of Section 6(c) below, upon a Default pursuant to Section

6.a., the parties shall first mediate the dispute in good faith using a mutually acceptable mediator, which mediation shall be scheduled and concluded not later than sixty (60) days after the expiration of the Cure Period. The mediation shall be conducted in accordance with the Construction Industry Mediation Rules of the American Arbitration Association currently in effect.

Claims, controversies or disputes not resolved by mediation shall be resolved by binding arbitration unless the parties mutually agree otherwise. Arbitration shall be conducted in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association currently in effect. The demand for arbitration shall be filed in writing with the other party to this Agreement and the American Arbitration Association. Notwithstanding the foregoing, any party may seek injunctive or other immediate equitable relief, if applicable, in a court of law, pending resolution of the dispute through mediation or arbitration. c. Subject to the foregoing, in the event of a payment default hereunder that is not cured within ten (10) business days after DEVELOPER's receipt of a Breach Notice from CITY, (i) CITY may immediately suspend DEVELOPER's ability to use its Sewer Allocation and (ii) City may sell DEVELOPER's Capacity Allocation on a pro-rata basis to other developers. 4 7. Counterparts. This Agreement may be executed in counterparts, each of which shall be considered an original.

8. Advice of Counsel. Each of the parties has received the advice of legal counsel prior to signing this Agreement. Each party acknowledges no other party, agent or attorney has made a promise, representation or warranty whatsoever, express or implied, not contained herein concerning the subject matter herein to induce the other party to execute this Agreement. The parties agree no provision or provisions may be subject to any rules of construction based upon any party being considered the party drafting this Agreement.

9. Governing Law. The validity, interpretation and effect of this Agreement are governed by and shall be construed in accordance with the laws of the State of California.

10. Severability. It any provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable but the remainder of the Agreement can be enforced without failure of material consideration to any party, then this Agreement shall not be affected and shall remain in full force and effect. However, if the invalidity or unenforceability of any provision of this Agreement results in a material failure of consideration, all parties shall meet and negotiate in good faith not less frequently then every ten (10) days and formulate new terms that substitute the stricken clause with other provisions that provide substantially similar terms as the stricken clause. If the parties are unable to agree, then the parties shall resolve the issues through mediation as set forth in Section 6.

11. Authorization. The person(s) executing this Agreement on behalf of the parties hereto warrant that (i) such party is duly organized and existing, (i) the person(s) executing this Agreement are dully authorized to execute and deliver it on behalf of such party, (iii) by such Person(s) so executing this Agreement, such party is formally bound to the provisions of this Agreement and (iv) entering into this Agreement does not violate any provision of any other agreement to which such party is bound. CITY has obtained any necessary approvals from the Consortium (as defined in the Consortium Agreement described in Schedule 1) and other property owners and developers to execute this Agreement and be bound by the terms hereof.

12. Other Agreements Not Affected. This Agreement constitutes the entire agreement between the Parties hereto with respect to the Phase 3 Expansion and supersedes all prior understandings or agreements with respect to the subject matter hereof, provided that this Agreement does not supersede, amend nor replace any prior written agreement relating to any matter not expressly set forth in this Agreement relating to this specific Phase 3 Expansion Project including without limitation the parties' separate Consortium Agreement (as defined in Schedule 1), as amended from time to time. This Agreement may be modified only by specific reference describing a mutual intent and agreement to amend this Agreement in written documents signed by both parties hereto.

13. Greenlighting Future Expansions. Nothing herein supersedes, amends or replaces any prior written agreement with respect to DEVELOPER's ability to "greenlight" future expansions in accordance with the parties' other written agreements regarding "greenlighting."

14. Incorporation of Recitals. The parties agree that the foregoing Recitals are true and correct and are incorporated as a part of this Agreement as if set forth in full herein.

15. Notices. All notices which are allowed or required to be given hereunder shall be in writing and (i) shall be deemed given and received when personally delivered or (i) shall be deemed given when the same are deposited in the United States Mail, with sufficient postage prepaid, to be sent by registered or certified mail or overnight mail service, addressed to the designated person by one party to another in writing, and shall be deemed received on the fifth business day after such mailing. Any notice shall be given to all of the following:
5 CITY With a copy to:

City of Lathrop
City of Lathrop
390 Towne Centre Drive
390 Towne Centre Drive Lathrop, CA 95330
Lathrop, CA 95330
Attn: City Clerk Attn: City Attorney

DEVELOPER
River Islands Development, LLC
73 W. Stewart Road
Lathrop, CA 95330
Attn: Susan Dell'Osso, President

16. Further Assurances. The parties agree to perform such further acts and to execute and deliver such further instruments as are reasonably necessary to accomplish the intent and purpose of this Agreement.

17. Assignment and Transfer. This Agreement shall inure to the benefit of and bind the successors and permitted assigns of the parties. Except for an assignment to an Affiliate (defined below) of DEVELOPER, DEVELOPER may not assign this Agreement without the prior written consent of CITY, which shall not be unreasonably withheld, conditioned or delayed. Without limiting the foregoing, prior to DEVELOPER assignment, (i) DEVELOPER shall notify CITY of the proposed assignment and provide reasonable information to CITY regarding the proposed assignee and (ii) any potential assignee must reasonably demonstrate to CITY's satisfaction that the proposed assignee has the financial ability and experience to fulfill DEVELOPER's obligations under this Agreement. DEVELOPER may assign this Agreement to an Affiliate with notice to CITY. As used herein, the term "Affiliate" means any person, entity or organization as to which DEVELOPER has a controlling interest. As used herein, "controlling interest" means the right to control the management decisions of such person or entity, whether by contract or otherwise.

18. Time is of the Essence. Time is of the essence of this Agreement.

19. Construction. All parties have been represented by counsel in the preparation of this Agreement and no presumption or rule that ambiguity shall be construed against a drafting party shall apply to interpretation or enforcement hereof. Captions on sections and subsections are provided for convenience only and shall not be deemed to limit, amend or affect the meaning of the provisions(s) to which they pertain.

20. No Joint Venture or Partnership. Nothing in this Agreement or in any document executed in connection with this Agreement shall be construed as creating a joint venture, partnership or any agency relationship between CITY and DEVELOPER. CITY shall have no responsibility for any public improvements unless and until accepted by CITY.

21. Waiver. No waiver of any provision of this Agreement shall be effective unless such waiver is in writing and signed by a duly authorized representative of the party against whom enforcement is sought.
6 22. Table of Exhibits. The following exhibits are attached hereto and made a part hereof:

Exhibit A: Opinion of Probable Costs
Exhibit B: Sewer Capacity Allocations
Exhibit C: Share of Project Costs
Exhibit D: Accounting of Existing Sewer Capacity
Schedule 1: Prior Funding Agreements
Schedule 2: Transfer Information
[SIGNATURES ON THE FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date or dates set forth below.

CITY OF LATHROP, a municipal
Corporation of the State of California
BY:_
Stephen J. Salvatore
City Manager
Dated:

ATTEST:

BY:

Teresa Vargas
City Clerk
Dated:

APPROVED AS TO FORM BY THE CITY OF DEVELOPER:

LATHROP CITY ATTORNEY: RIVER ISLANDS DEVELOPMENT, LLC,
a Delaware limited liability company
BY:_
Salvador V. Navarrete BY: Susan Dell'Osso
City Attorney Its: President
8 EXHIBIT A
Revised Base Bid Schedule
CTF Phase 3 Expansion, Lathrop, CA
CTF PHASE 3 EXPANSION, CIP WW 22-38

REVISED BASE BID SCHEDULE

BID DESCRIPTION UNIT EXTENDED

ITEM QUANTITY UNITS PRICE
TOTAL
A. General Conditions
1 Mobilization / Bonds / Insurance 1 LS $1,800,000 $1,800,000 2 Implement City-Provided SWPPP 1 LS $410, 000 $40,000
3 General Conditions LS 1$2,000,000 $2,000, 000
4 ALLOWANCE: Caterpillar 908 Wheel
1 LS $168,000 $168,000
Loader per Attachment F
5 Jobsite Trailer for City's Con Mgr., per
1 LS
Spec. Sec. 01510 $50, wo 450,000
6 General Items Not Included Above 1 LS $1,000 $1,000
SUBTOTAL A $4,059,000
B. Civil Works Including Labor
Demolition, Including Removal &
Disposal of Pond Liner and 2 Chlorine LS
Tanks $200,000 $200,000
8 Dewatering, Excavation, Backfill LS
$1,300,000 $1,300,000
9 Site Grading / Rock / Paving LS
0800,000 $500,000
10 Operations Building 1 LS
152,500, 000 1$2,500,000
11 Sludge Pad Concrete LS $1,200,000 $1, 200,000
Winter Sludge Storage Building LS $600,000 $ 600,000
13 Sludge Dewatering Building 1 LS $500,000
1$500,000
14 Yard Piping LS $2,000,000
1$2,000,000
Structural Concrete 1 $4,600,000 $4,500,000
16 Civil Works Items Not Included Above 1 LS

5.000 $1,000
SUBTOTAL B $13,901,000
C. Mechanical Equipment
17 ALLOWANCE: Kovalus Membranes,
1 LS $2,566,300 $2,566,300
Blowers, Instrumentation, Etc.
18 ALLOWANCE: Existing Neuros
Blowers Modifications 1 LS $86,000 $86,000
19 ALLOWANCE: Kovalus Membrane
1 LS $1,364,400 $1,364,400
Upgrade
9 20 Screw Press Systems - FKC or equal LS
$1,500,000 $1,500,000
Remaining Mechanical Equipment LS
$4,299, 200 $4,299,700
22 Overhead Bridge Crane Extension LS $1,20,000 $120,000 23 Misc. Mech. Piping, Tubing, Sleeves 1 LS 53,600,000 $3,600,00 Beams, Catwalks, Guiderails, and
Grating LS $1,500, 000 $1,800,00
25 Items Not Included Above 1 LS $1,000 $ 1000
SUBTOTAL C $15,337,400
D. Instrumentation Equipment
26 Instrumentation Equipment (Outside
Headworks) LS $650,000 $650,000
27 Instrumentation Items Not Included
Above 1 LS $1,000 $1,000
SUBTOTAL D $ 651,000
E. Electrical Equipment
28 Yard Electrical Power LS
$1,200 poo $1, 200,000
29 Yard Electrical Control LS
$1, 200,000 $1, 200,000
30 lew MSB-I Gear, Msg-l Renovation -
guare D or equal LS $ 600,000
$600,000
31 Phase 2 Electrical Modifications 1 LS $600,000 $600,000 MCC-3 - Square D or equal LS $800,000 $500,000
S5 18 Pulse 100hp Drives., Pumps &
LS
30400,000 $400,000
34 LS $150,000
Disconnects - - Square D or equal $150,000
35 Electrical Items Not Included Above LS $450,000
$450,000
SUBTOTAL E 1$5,400, 000
TOTAL BASE BID (A+B+C+D+E): $39, 348,400
TOTAL BASE BID IN WORDS hurry round three hundred for y eught 10 EXHIBIT B
Sewer Capacity Allocations
CTF Phase 3 Expansion, City of Lathrop, CA
Name of Party Flow Capacity (gpd) % of Expansion
City of Lathrop 500,000 20%
River Islands 2,000,000 80%
Total 2,500,000 100%
Biological Oxygen Total Nitrogen Total Suspended
Demand (mg/L) (mg/L) Solids (mg/L)
City of Lathrop
11 EXHIBIT C
Share of Project Costs
CTF Phase 3 Expansion, Lathrop, CA
Name of Party % of Expansion Cost Share
City of Lathrop 20% 8,656,648
River Islands 80% 34,626,592
Total 100% $43,283,240
12 EXHIBIT D
Accounting of Existing Sewer Capacity
Accounting of Existing Sewer Capacity
Capacity (gpd)
Phase 0 100,000
Phase 1 200,000
Phase 2 652,840
Reserve 237,396
Total Capacity 1,190,236
Allocated (as of 1/16/2024) (850,692)
Remaining Capacity 339,544
SCHEDULE 1
Prior Funding Agreements
WRP-1 MBR 0.75 MGD Expansion (CIP# WW 01-21)

1. Agreement for Financing Design, Construction, Maintenance and Operation of Additional Sanitary Sewer Facilities and Acquisition of Lands Necessary for Such Project, dated April 29, 2003 (as amended) "Consortium Agreement")

2. Agreement among the City of Lathrop, Crossroads CREA Investors, LLC, and Califia, LLC for Design, Construction, Maintenance and Operation of Additional Sanitary Sewer Facilities and Acquisition of Lands Necessary for Such Projects, dated April 29, 2003 (as amended)

3. First Amendment to the Agreement for Financing, Construction, Maintenance and Operation of Additional Sanitary Sewer Facilities in the City of Lathrop, dated August 1, 2003

4. First Amendment to Agreement among the City of Lathrop Crossroads CREA Investors LLC and Califia LLC for Design Construction Maintenance and Operation of Additional Sanitary Sewer Facilities and Acquisition of Lands Necessary for Such Projects, dated August 1, 2003

5. Second Amendment to the Agreement for Financing, Construction, Maintenance and Operation of Additional Sanitary Sewer Facilities in the City of Lathrop, dated September 1, 2003
LCTF Phase 1 Expansion (CIP# WW 10-15)

6. Integrated Greenlighting and Funding Agreement, dated August 19, 2013 LCTF Phase 2 Expansion (CIP# WW 14-14)

7. Funding Agreements for The City's Pre-Construction Costs Related to the Phase 2 Expansion of the Lathrop Consolidated Treatment Facility, (six funding agreements were issued to participating Developer between March 17, 2015, and March 10, 2016)

8. Design and Construction Funding Agreement Related to the Phase 2 Expansion of the Existing Lathrop Consolidated Treatment Facility, dated November 21, 2016 14 SCHEDULE 2
Transfer Information

WASTEWATER CAPACITY TRANSFER CRITERIA
Any developer or third party who has acquired wastewater capacity under this Agreement and who wishes to transfer some or all of its wastewater capacity shall apply for the transfer through the City's Public Works Director. The application shall include the following information and be submitted with the requisite fee(s):

1. Name of transferor and proposed transferee.

2. Address and/or APN of the parcel(s) to benefit from the transfer.

3. The number of Equivalent Capacity Units (ECUs) or Interceptor System Units (ISUs) needed.

4. A description of the proposed development in sufficient detail to identify the potential impacts and benefits of the proposed development.

5. A letter from the purchaser committing to obtain a building permit, parcel map or final map with one year from City approval of the transfer, or to sell the units back to the City at the end of one year unless Council approves an alternative time limit. The repurchase price shall be the same as the cost paid by the transferee at the time the transfer took place, less the City's administrative fee.

6. An application fee to cover the cost of staff efforts, including the preparation of staff reports for Council action and ten percent (10%) deposit toward the cost of the units.

7. An acknowledgement that it is the purchaser's responsibility to provide any sewer line extensions and related facilities necessary to utilize the ECUs or ISUs.

The City's Public Works Director shall consider the following factors in approving or denying a transfer request:

1. Is the request consistent with the City's General Plan?

2. Is the request consistent with the City's Sewer Master Plan?

3. Is the request consistent with the City's Zoning Ordinance?

4. Is the request consistent with any other applicable local, state or federal laws, regulations or ordinances?
Upon receipt of a written request and payment of the appropriate fee(s), the City Engineer will prepare a report for City Council consideration and action. The City Council may approve the request and authorize the City Manager to execute an agreement approved by the City Attorney with the applicant, or deny the request based on the foregoing factors. If the City Council approves a transfer of ECUs or ISUs from one parcel(s) to a different parcel(s), the applicant shall pay all costs to prepare and record an agreements) for the transfer. The agreements) will be recorded and advise future property owners of the transfer and limitations on future development.
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Lathrop City CouncilAugust 12, 2024

Lathrop City Council
August 12, 2024