Modesto City Council
October 25, 2022

- 1 -
10/25/2022 5:30:00 PM

MODESTO CITY COUNCIL
www.modestogov.com
AGENDA
City of Modesto

CITY COUNCIL MEETING
Chambers, Basement Level
Tenth Street Place, 1010 10th Street
Modesto, California
Tuesday, October 25, 2022 at 5:30 PM
*Roll Call - Councilmembers Escutia-Braaton, Kenoyer, Madrigal, Ricci, Wright, Mayor Zwahlen
* Some Councilmembers may be participating in the meeting remotely via teleconferencing or other electronic means consistent with the AB 361.
“Wordly” can translate into 25+ different languages! To access written translation during the meeting, please scan the QR Code or click this link https://attend.wordly.ai/join/RJDY-6364.
"Wordly" puede traducir a más de 25 idiomas diferentes! Para acceder a la traducción durante la reunión, por favor escanee el código QR o haga clic en el enlace https://attend.wordly.ai/join/RJDY-6364.

THIS MEETING WILL BE PHYSICALLY OPEN TO THE PUBLIC AND BY ZOOM

VIDEO CONFERENCING AND TELEPHONE
In order to minimize the spread of the COVID-19 virus, this meeting will be conducted pursuant to AB 361, which amended the Brown Act’s teleconferencing provisions.

You may observe a livestream of the meeting at http://media.modestogov.com. You may also participate in the meeting as indicated below.
- 1 -
10/25/2022
- 2 -
10/25/2022 5:30:00 PM

PARTICIPATING IN CITY COUNCIL MEETINGS IN CONFORMANCE WITH AB 361
The City of Modesto is providing alternatives to view Council meetings and provide public comments. If you wish to make either a general public comment or to comment on a specific agenda item, you may use one of the following options:

SUBMITTING COMMENTS BY E-MAIL
Written comments may be submitted via email to: [email protected] (include Agenda Item Number in the subject line). All comments will be shared with the Councilmembers and placed in the record, but will not be read aloud during the meeting. Written comments must be received by 3:00 p.m. on the day of the meeting.

VIRTUAL PARTICIPATION BY ZOOM VIDEO

CONFERENCING AND TELEPHONE
Joining the City Council meeting via Zoom
The City of Modesto is now offering the ability to view and participate in Council meetings via telephonic conferencing via “Zoom” video conferencing computer technology. The meeting may be accessed through the use of Zoom using the following options:
 Enter the following link into an Internet Browser
https://us02web.zoom.us/j/86945970570,
 Enter the following link into an Internet Browser https://zoom.us/ and using the Webinar ID 869 4597 0570
 Passcode 84326
To use Zoom, please visit: https://zoom.us/ and either sign-up for a free Zoom account or continue as a guest. Once you have downloaded the app onto your mobile device, joined from your web browser, or downloaded the Zoom software on your computer you will be ready for the upcoming Council meeting.

Joining the City Council meeting via Telephone
If you don’t have a smart phone or computer to access the meeting via Zoom, you can participate by phone, by calling 1-877-853-5257 (Toll Free) or 1-888-475-4499 (Toll Free) and enter the Webinar ID 869 4597 0570 Passcode 84326
Providing Public Comment on Zoom and by Telephone
The Mayor will request public comment during the Public Comment periods on the meeting agendas and during each Public Hearing and Regular Calendar Item on the Council Agenda.

Once the Mayor has announced the public comment period, please do one of the following.

USING A COMPUTER OR SMART PHONE APP:
 Click on the “Raise Hand” feature in the webinar controls. This will notify City staff that you have raised your hand.
- 2 -
10/25/2022
- 3 -
10/25/2022 5:30:00 PM
 City staff will unmute your microphone when it is your turn to provide public comment.
 A prompt will appear to confirm you would like to be unmuted and then you will have three minutes to provide public comment.
 Once your public comment has ended, you will be muted again.

USING A REGULAR PHONE (not using a computer or smart phone APP):
 Dial *9 (star 9), this will notify City staff that you have “raised your hand” for public comment.
 City staff will unmute your microphone when it is your turn to provide public comment.
 You will hear “you are unmuted” and then you will have three minutes to provide public comment.
 Once your public comment has ended, you will be muted again.  If your phone is unmuted, and you are unable to be heard, the host may ask that you Dial *6 to toggle mute on/off in Zoom.

Additional Zoom resources/support
Please visit Zoom’s website support page on helpful tips to prepare for the meeting:
https://support.zoom.us/hc/en-us/categories/201146643
Pledge of Allegiance to the Flag
Invocation: Cindy Marks, Pray Modesto
City Clerk’s Announcements
Declaration of Conflicts of Interest

ACKNOWLEDGEMENTS AND PRESENTATIONS

1. Stanislaus County Update (Funding Source: Not Applicable) CITY MANAGER; Joseph Lopez, 209-577-5223, [email protected]

2. Proclamation declaring November 2022 as Lung Cancer Awareness Month (Funding Source: Not Applicable)
CITY COUNCIL; Kathy Espinoza, 209-571-5597, [email protected]

MISCELLANEOUS
Appointments

3. Consider approving the Appointments Committee recommendations to fill two City of Modesto vacancies on the Blight Abatement Advisory Committee for a four-year term. (Funding Source: Not Applicable)
- 3 -
10/25/2022
- 4 -
10/25/2022 5:30:00 PM
Staff Recommendation:
 Resolution approving the appointment of Bryan Marks and Frank Ploof to the Blight Abatement Advisory Committee to serve a four-year term beginning November 1, 2022 through October 13, 2026.

CITY MANAGER; Scotty Douglass, 209-577-9149, [email protected]

PUBLIC COMMENT PERIOD
Please refer to special public comment instructions above Three-minute time limit per speaker
Only interested persons in the audience may present these matters. Under State law, Councilmembers may respond to matters being presented under this item only as follows:
a. Briefly respond to statements made or questions raised. b. Ask a question for clarification.
c. Provide a reference to staff or other resources for factual information. d. Request staff to report back at a subsequent meeting. e. Finally, a Councilmember or the Council itself may take action to direct staff to place a matter of business on a future agenda.

CONSENT ITEMS – ROLL CALL VOTE REQUIRED
Information concerning the consent items listed below has been forwarded to each Councilmember prior to this meeting for study. Unless some member of the audience or Councilmember has a question concerning an item and asks that it be withdrawn from the consent list, the Council approves the items at one time. The action taken by the Council in approving consent items is set forth in the explanation of this individual item.

Any and all of the following agenda items are subject to action by the Modesto City Council.

This Agenda is on file at the Modesto-Stanislaus Library Reference Room, 1500 I Street, Modesto, in the City Clerk’s Office, Sixth Floor, 10th Street Place, and is available on the City’s Web site at www.modestogov.com.

In accordance with the requirements of Title II of the Americans with Disabilities Act (“ADA”) of 1990, the Fair Employment & Housing Act (“FEHA”), the Rehabilitation Act of 1973 (as amended), Government Code section 11135 and other applicable codes, the City of Modesto (“City”) will not discriminate against individuals on the basis of disability in the City’s services, programs, or activities. For more information, please visit the City of Modesto website at https://www.modestogov.com/865/Americans-with-Disabilities-Act-ADA In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Clerk (209) 577-5396. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting.
- 4 -
10/25/2022
- 5 -
10/25/2022 5:30:00 PM

CONSENT
An item may be removed from consent and discussed at the request of an audience member or Councilmember.

Consent

4. Consider approving the minutes from the October 11, 2022 Council Meeting. (Funding Source: Not Applicable)
Staff Recommendation:
 Motion approving the minutes from the October 11, 2022 Council Meeting.

CITY CLERK; Diane Nayares-Perez, 209-577-5396, [email protected] Consent

5. Consider approving a Homeowner Rehabilitation Loan in the amount of $80,251 and a Homeowner Rehabilitation Grant in the amount of $10,000 for a total project cost of $90,251 to Christopher and Stacey Gates for health and safety repairs to the residential property located at 1125 Springcreek Drive, Modesto, CA 95355. (Funding Source:

Community Development Block Grant Funds)
Staff Recommendation:
 Resolution approving a Homeowner Rehabilitation Loan in the amount of $80,251 and a Homeowner Rehabilitation Grant in the amount of $10,000 to Christopher and Stacey Gates for health and safety repairs to the residential property located at 1125 Springcreek Drive, Modesto, CA 95355 and authorizing the City Manager to execute the Agreements.

CED; Jessica Hill, 209-577-5321, [email protected]
Consent

6. Consider approving a Will Serve Letter and Outside Service Agreement for Sewer Service for the property located at 2117 Parr Avenue (APN: 081-022-020). (Funding Source: Sewer Fund, General Fund)
Staff Recommendation:
 Resolution approving a Will Serve Letter and Outside Service Agreement for Sewer Service for the property located at 2117 Parr Avenue in Modesto (APN:
081-022-020), and authorizing the City Manager, or his designee, to sign the Will Serve Letter and execute the Outside Service Agreement.

CED; Toby Wells, 209-571-5542, [email protected]
Consent

7. Consider approving a one-time purchase for five Hayward Gordon Pumps from Hayward Gordon Group, Ontario, Canada, for an amount not to exceed of $135,278. (Funding Source: Wastewater Fund)
Staff Recommendation:
 Resolution approving a one-time purchase for five Hayward Gordon Pumps from Hayward Gordon Group, Ontario, Canada, for an amount not to exceed of $135,278, and authorizing the Director of Finance, or her designee to execute the Purchase Order.
- 5 -
10/25/2022
- 6 -
10/25/2022 5:30:00 PM
FINANCE DEPARTMENT; Cynthia Kline, 209-577-5412, [email protected] Consent

8. Consider approving the Award of Proposal and Agreement for the Furnishing of External Auditing Services to Vasquez and Company LLC, Glendale, California, for a three year Agreement with two one-year extension options, for an estimated annual cost of $142,228, and over five years of $715,000. (Funding Source: General Fund, Housing Urban Development Funds, Utility Funds, Community Facility Districts, and Ceres-Modesto Industrial Fire District)
Staff Recommendation:
 Resolution approving the Award of Proposal and Agreement for the Furnishing of External Auditing Services to Vasquez and Company LLC, Glendale, California, for a three-year Agreement with two one-year extension options, for an estimated annual cost of $142,228, and over five years of $715,000; and authorizing the City Manager or his designee to execute the Agreement.

FINANCE DEPARTMENT; Cynthia Kline, 209-577-58412, [email protected] Consent

9. Consider approving an Agreement with Nutrien Ag Solutions, Sacramento, CA, for Weed Abatement Chemical Premix known as (Aqumix Proprietary Custom Pre-blend) for a total amount not to exceed $350,000 over five years. (Funding Source:

Wastewater and Water Fund)
Staff Recommendation:
 Resolution approving the Sole Source Purchase Agreement with Nutrien Ag Solutions, Sacramento, CA, for Weed Abatement Chemical Premix known as (Aqumix Proprietary Custom Pre-blend) for a one-year Agreement with four one-year extension options, for an annual estimated amount of $70,000, and a total amount not to exceed $350,000 over five years and authorizing the Director of Finance, or her designee to execute the Purchase Agreement.

FINANCE DEPARTMENT; Cynthia Kline, 209-577-5412, [email protected] Consent

10. Consider accepting an informational report on the May and June 2022 grant applications and awards. (Funding Source: Not Applicable) Staff Recommendation:
 Motion accepting an informational report for the May and June 2022 grant applications and awards.

FINANCE DEPARTMENT; Maria Garnica, 209-577-5249,
[email protected]
Consent

11. Consider accepting the Fiscal Year 2022-2023 Cal Fire Rural Fire Capacity (RFC) Program Grant Award in the amount of $39,800, which includes a 50% local match, for the procurement of Wildland Firefighting Equipment. (Funding Source: General Fund)
- 6 -
10/25/2022
- 7 -
10/25/2022 5:30:00 PM
Staff Recommendation:
 Resolution accepting the Fiscal Year 2022-2023 Cal Fire Rural Fire Capacity (RFC) Program Grant Award in the amount of $39,800, which includes a 50% local match, for the procurement of Wildland Firefighting Equipment.

FIRE DEPARTMENT; Alan Ernst, 209-572-9590, [email protected] Consent

12. Consider approval of a Sole Source Renewal Agreement with CivicPlus for continued, uninterrupted hosting and maintenance of the City’s website for a four-year term for a total amount not to exceed $164,285. (Funding Source: Information Technology Fund) Staff Recommendation:
 Resolution approving the Sole Source Agreement with CivicPlus for the continued, uninterrupted hosting and maintenance of the City of Modesto’s website (www.modestogov.com) for a four-year term at an amount of $149,350 plus a 10% contingency in the amount of $14,935 for a total amount not to exceed $164,285; and authorizing the City Manager, or his designee, to execute the Agreement.

IT; Scott Conn, 209-577-5229, [email protected]
Consent

13. Consider accepting the Del Rio Tank No. 14, Well No. 68, and Pump Station Project as complete, authorizing all necessary steps to file with the County Recorder, releasing securities, and releasing payments totaling $10,203,691 to Mountain Cascade, Inc., of Livermore, CA. (Funding Source: Water Fund-CIP)
Staff Recommendation:
 Resolution accepting the Del Rio Tank No. 14, Well No. 68, and Pump Station Project as complete, authorizing all necessary steps to file with the County Recorder, releasing securities, and releasing payments totaling $10,203,691 to Mountain Cascade, Inc., Livermore, CA.

UTILITIES; Pete Kambel, 209-577-5444, [email protected] Consent

14. Consider approving an increase in the Director’s authority to issue Change Orders from 21% ($25,000) to 27% ($32,823) of the original construction contract price of $121,750; accepting the Rebid Fire Station 5 Kitchen Remodel Project as complete, authorizing all necessary steps to file with the County Recorder, releasing securities, and releasing payments totaling $154,573 to O.K. Construction, of Antelope, CA. (Funding Source: General Fund)
Staff Recommendation:
 Resolution accepting the Rebid Fire Station 5 Kitchen Remodel Project as complete, authorizing all necessary steps to file with the County Recorder, releasing securities, and releasing payments totaling $154,573 to O.K.

Construction, Antelope, CA.
 Resolution authorizing an increase to the Director of Utilities authority for Change Orders for the Rebid Fire Station 5 Kitchen Remodel Project to the total amount of $32,823 (27% of the original contract price). - 7 -
10/25/2022
- 8 -
10/25/2022 5:30:00 PM
UTILITIES; Pete Kambel, 209-577-5444, [email protected] Consent

15. Consider approving a First Amendment to the Agreement with Bartle Wells Associates, Berkeley, CA, for the Wastewater Rate Study & Proposition 218 Assistance in the amount of $29,900, for an amended total amount not to exceed $149,175. (Funding Source: Wastewater Fund)
Staff Recommendation:
 Resolution approving a First Amendment to the Agreement with Bartle Wells Associates, Berkeley, CA, for the preparation of the Wastewater Rate Study & Proposition 218 Assistance in the amount of $29,900, for a revised total amount not to exceed $149,175, and authorizing the City Manager, or his designee, to execute the Agreement.

UTILITIES; William Wong, 209-571-5801, [email protected]

COUNCIL COMMENTS & REPORTS

CITY MANAGER COMMENTS & REPORTS

HEARINGS
Published in the Modesto Bee on September 25, 2022

16. Hearing to consider the relocation request of retail dispensary Doctor’s Choice from 2039 Yosemite Boulevard to 121 Phoenix Ave and granting a residential proximity waiver. (Funding Source: Cannabis Permit Application and Annual Permit Fees) Staff Recommendation:
 Resolution approving the relocation of Type 10 Business Permit Relocation Request Doctor’s Choice Dispensary from 2039 Yosemite Avenue to 121 Phoenix Avenue, Modesto, CA 95350, and granting a residential proximity waiver.

CED; Sean Rando, 209-577-5473, [email protected]

NEW BUSINESS

17. Consider awarding Stanislaus Regional Housing Authority Loans and Grants in the total amount not to exceed $3,226,604 for the development of the Vine Street Affordable Housing Project including Vine Street Improvements and $100,000 for staff activity delivery costs. (Funding Source: Permanent Local Housing Allocation, HOME Investment Partnership, HOME Investment Partnership CHDO Set-Aside, and Community Development Block Grant Funds)
Staff Recommendation:
 Resolution approving the Award of Loans and Grants to Stanislaus Regional Housing Authority with Great Housing Development Corporation as developer in the total amount not to exceed $3,226,604 for the development of the Vine Street Affordable Housing Project including the Vine Street Road Improvements and $100,000 for staff activity delivery costs and authorizing the - 8 -
10/25/2022
- 9 -
10/25/2022 5:30:00 PM
City Manager or designee to execute Agreements.
 Resolution amending the Fiscal Year 2022-2023 multi-year fund budget (101193) to increase the budget of the Vine Street Project Fund (101185) with Community Development Block Grant (CDBG) Funds, Home Investment Partnership Funds (HOME) Home Community Housing Development Organizations (CHDO) Set Aide and Permanent Local Housing Allocation (PLHA) for development of the Vine Street Affordable Housing Project totaling $3,226,604 and an additional $100,000 budgeted for activity delivery costs and budgeting the necessary transfers and authorizing the City Manager or his designee to take the necessary steps to implement the provisions in this Resolution.

CED; Jessica Hill, 209-577-5321, [email protected]

MATTERS TOO LATE FOR THE AGENDA
These may be presented by members of the City Council and staff upon determination by a majority vote that an emergency exists, as defined by State law, or by a 2/3 vote that (1) there is a need to take immediate action, and (2) that the need for action came to the City’s attention after the agenda was posted.

ADJOURNMENT
Posted pursuant to Government Code Section 54954.2 on the bulletin board at Tenth Street Place on
at by
date time signature
- 9 -
10/25/2022

CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

October 25, 2022
Date: September 13, 2022
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Scotty A. Douglass, Deputy City Manager
SUBJECT: Committee Appointments – Blight Abatement Advisory Committee CONTACT: Scotty A. Douglass, Deputy City Manager, [email protected], 209-577-9149 DESCRIPTION:

Consider approving the Appointments Committee recommendations to fill two City of Modesto vacancies on the Blight Abatement Advisory Committee for a four-year term. (Funding Source: Not Applicable)
STRATEGIC PLAN ELEMENT:

The recommended action supports the City of Modesto’s 2020-2025 Strategic Plan Initiative: Great Quality of Life: Increase pride in Modesto’s neighborhoods and business districts through beautification efforts and by investing in community assets and amenities.

BACKGROUND:

In 1994, the City of Modesto launched the Neighborhood Environmental Action Team (NEAT), which was a program designed to promote volunteerism and solicit donations for community clean-ups through the “Adopt-An-Area” program. The adoption of an area was a promotional effort that encouraged communities, businesses, nonprofits, schools, and others to take ownership of their community by promoting volunteer opportunities for clean-up activities.

In December 2019, by Resolution 2019-555, the City Council approved the Blight Abatement Strategy that included a series of recommendations to promote public and private partnerships with a focus on increasing volunteerism and improving blight abatement programs. To ensure that these efforts are sustained, a component of the strategy included the formation of a Blight Abatement Advisory Committee (BAAC) comprised of public and private partners with a mission to promote public engagement concerning blight abatement in the city and to make recommendations to the City regarding program improvements, potential funding opportunities, and support with increasing volunteerism. The BAAC shall act in an advisory capacity to the City Council and the City Manager in all matters pertaining to blight and blight abatement efforts. Furthermore, this committee will champion the initiation and coordination of volunteer groups and donations to support the effort.

In October 2020, by Resolution 2020-428, the City Council approved the original formation of the #3..
- 10 -
City Council Meeting, October 25, 2022
Committee Appointments – Blight Abatement Advisory Committee

Blight Abatement Advisory Committee, with the following composition:

DISCUSSION:

On September 15, 2022, the Appointments Committee approved the following appointments to the Blight Abatement Advisory Committee and recommended forwarding to Council for approval:

According to the Blight Abatement Advisory Committee Bylaws, Section 3.02 states, “Nine (9) members of the Committee shall be registered electors of the City and two (2), of the nine, shall live outside the City but shall be registered electors of Stanislaus County, and each will have active involvement or interest in beautifying the City of Modesto. Preference will be provided to residents from across the community, representing the diverse neighborhoods in Modesto.”
At the time of appointment, a single vacancy remained on the Blight Abatement Advisory Committee as noted: “…two (2), of the nine, shall live outside the City but shall be registered electors of Stanislaus County.” One of the positions is still vacant, and staff will continue to pursue and solicit applications from the adjacent City of Modesto communities to fill the vacancy.

Staff recommends approval of the above-listed candidates to fill the available vacancies on the Blight Abatement Advisory Committee.

FISCAL IMPACT:

There is no fiscal impact associated with this action.

COMMITTEE RECOMMENDATION:

The Appointments Committee approved to forward the above-mentioned applicants to Council on September 15, 2022.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving the appointment of Bryan Marks and Frank Ploof to the Blight Abatement Advisory Committee to serve a four-year term beginning November 1, 2022 through October 13, 2026.

Blight Abatement Advisory Recommendations
Bryan Marks
Frank Ploof
#3..
- 11 -
City Council Meeting, October 25, 2022
Committee Appointments – Blight Abatement Advisory Committee

Approved by:

Scotty A. Douglass, Deputy City Manager
Joseph P. Lopez, City Manager
Attachment:

1. Blight Abatement Advisory Committee Appointments Resolution #3..
- 12 -
1 MODESTO CITY COUNCIL
RESOLUTION NO. 2022-xx

RESOLUTION APPROVING THE APPOINTMENTS OF BRYAN MARKS AND

FRANK PLOOF TO THE BLIGHT ABATEMENT ADVISORY COMMITTEE
TO SERVE A FOUR- YEAR TERM BEGINNING NOVEMBER 1, 2022
THROUGH OCTOBER 13, 2026
WHEREAS, Section 1102 of the Charter of the City of Modesto authorizes the City Council to appoint members to various Boards and Commissions; and WHEREAS, the Blight Abatement Advisory Committee is comprised of 7 members who are residents of the City of Modesto and 2 other members are residents of the County; and
WHEREAS, on September 15, 2022, the Appointments Committee recommended the following appointments; and
Candidate Name
Bryan Marks
Frank Ploof
WHEREAS, the terms will be for four years for each of the appointments beginning on November 1, 2022 through October 13, 2026; and NOW, THEREFORE BE IT RESOLVED by the Council of the City of Modesto that it hereby approves the appointments of Bryan Marks and Frank Ploof to the Blight Abatement Advisory Committee from November 1, 2022 through October 13, 2026.

BE IT FURTHER RESOLVED, that the City Clerk, or her designee, is directed to transmit a copy of this resolution to the appointed members of the Blight Abatement Advisory Committee, and the Secretary, thereof.
#3..
- 13 -
2 The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 25th day of October, 2022, by _______________, who moved its adoption, which motion being duly seconded by ____________________, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST: _____________________________

DIANE NAYARES-PEREZ, CMC,
City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: ________________________________
JOSE M. SANCHEZ, City Attorney
#3..
- 14 -
- 1 -
10/11/2022 5:30:00 PM

MODESTO CITY COUNCIL
www.modestogov.com

MINUTES
City of Modesto

CITY COUNCIL MEETING
Chambers, Basement Level
Tenth Street Place, 1010 10th Street
Modesto, California
Tuesday, October 11, 2022 at 5:30 PM
Roll Call – Present: Councilmembers Escutia-Braaton, Kenoyer, Madrigal, Ricci, Wright, Mayor Zwahlen

Absent: None
Pledge of Allegiance to the Flag
Invocation: Jon Apodaca, Good Life
City Clerk’s Announcements: None
Declaration of Conflicts of Interest: None
Reports from Closed Session City Attorney Sanchez reported that there was no reportable action on the closed session item.

ACKNOWLEDGEMENTS AND PRESENTATIONS

1. Presentation of Helen Putnam Award by Stephen Qualls, Cal Cities Public Affairs Manager. (Funding Source: Not Applicable)
CITY MANAGER; Joseph Lopez, 209-577-5223, [email protected] ACTION: Stephen Qualls, Cal Cities Public Affairs Manager presented the Helen Putnam Award to the City of Modesto
#4..
- 15 -
- 2 -
10/11/2022 5:30:00 PM

MISCELLANEOUS

2. Consider approving appointments to fill four City of Modesto vacancies on the Equity Commission for a four-year term. (Funding Source: Not Applicable) Staff Recommendation:
 Resolution approving the appointments of Kwei-Cee Chu, Lindsey Bird, Larry Bolton, and Fallon Ferris to the Equity Commission with a term expiration of October 1, 2026.

HUMAN RESOURCES; Christina Alger, 209-571-5126, [email protected] ACTION: (Escutia-Braaton/Zwahlen; 6/0) Resolution 2022-409 approving the appointments of Kwei-Cee Chu, Lindsey Bird, Larry Bolton, and Fallon Ferris to the Equity Commission with a term expiration of October 1, 2026. (As amended - Larry Bolton was removed from consideration.)

3. Consider approving the appointments to fill nine vacancies to the City of Modesto Youth Commission for the 2022-2023 school year from October 12, 2022 to June 30, 2023. (Funding Source: Not Applicable)
Staff Recommendation:
 Resolution approving the appointments of Hamza Modan, Ameena Pierstorff, Aheli Patel, Jossfin Garza, Noah Wong, Kayvon Banankhah, Lolamaya Evans, Abigail Manzano, and Carissa Nielson to the City of Modesto Youth Commission for the 2022-2023 school year from October 12, 2022 to June 30, 2023.

PRN; Ashley Weaver, 209-577-5428, [email protected] ACTION: (Wright/Kenoyer; 6/0) Resolution 2022-410 approving the appointments of Hamza Modan, Ameena Pierstorff, Aheli Patel, Jossfin Garza, Noah Wong, Kayvon Banankhah, Lolamaya Evans, Abigail Manzano, and Carissa Nielson to the City of Modesto Youth Commission for the 2022-2023 school year from October 12, 2022 to June 30, 2023.

PUBLIC COMMENT PERIOD
 Jerry Thompson spoke in support of lifting the ban on cruising and requested the item be considered at a Safety and Communities Committee meeting.  Louisa Bryant spoke about a building inspection at her home and asked about a permit to remove the panel to inspect the area. She asked that the documents and photos she provided be reviewed by the Council.
 Maggie Mejia, a volunteer representative for the United Farm Workers spoke about the march held that was initially planned to take place at César Chavez Park. She was disappointed and embarrassed that the City asked for fees and liability insurance for the use of the facilities and amenities. She thanked the Modesto Police Department, because they helped her every step of the way and advised her they could hold a parade with no #4..
- 16 -
- 3 -
10/11/2022 5:30:00 PM
fee. She also thanked Councilmembers Escutia-Braaton, Madrigal and Ricci because those three councilmembers reached out to her to help.
 Alissa Hagar spoke about Paul Chavez, Jr., and Officer Muncy. She also commented on Forward Together. She is disappointed and is waiting for the Council to use their platform.
 Charmaine Breedlove commented on cruising, and the culture and pride it brings to Modesto. She spoke in support of lifting the ban on cruising.  Martin Louro, stated that he represents a large group of people that are dissatisfied with the current governance and trying to address the issue and brought it to the Council this evening. He spoke about their movement which is called New California State. New California is the making of a new State. He read a statement sending notice to all Californians that the State of California is in constitutional default.  Ron DeLoach from the West Modesto People of Action Council spoke regarding the housing issue in West Modesto. He stated that there are discussions about forming a People of Action Council of South Modesto and the Airport District and they want to be heard. Housing for West Modesto is needed and the municipal golf course can provide affordable housing.
 Mylinda Mason spoke in support of New California State and continued to read the Statement/Notice/Declaration regarding New State California.  Theresa Clutter spoke about the shooting of Paul Chavez. She asked for accountability.

She further commented on Forward Together and stated that an outside auditor is needed.  Cheryl Aseltin spoke in support of New California State and continued to read the Statement/Notice/Declaration regarding New State California.  Mara Collins spoke about justice for Paul Chavez. She commented on Officers Muncy and Valencia and the shooting of Paul Chavez. She asked for accountability and more training.
 Donna Barros spoke in support of New California State and continued to read the Statement/Notice/Declaration regarding New California State.  Brittony Estrella Chavez commented on the death of her husband Paul Davis Chavez, Jr.

She spoke about the Forward Together meeting and commented on progressive civic reform.

Recessed: 7:01 pm
Reconvened: 7:06 pm
#4..
- 17 -
- 4 -
10/11/2022 5:30:00 PM
 Lora Walter spoke in support of New California State and continued to read the Statement/Notice/Declarations regarding New California State.  Johnathan Williams mentioned the names of Paul Chavez’s three sons, Paul III, Abraham and Josiah and stated that they will never see their dad again. He commented on the shooting of Paul Chavez.
 James Martin spoke in support of New California State and continued to read the Statement/Notice/Declarations regarding New California State.  Anna spoke about the shooting of Paul Chavez, Jr. She further commented on Officers Muncy and Valencia and asked for additional training.
 David Avila spoke in support of New California State and continued to read the Statement/Notice/Declarations regarding New California State.  Ramon Rodriguez spoke about Sovereign Citizens and conspiracy theorists. He further commented on the shooting of Paul Chavez and Trevor Seevor.  Patricia Shaefer spoke in support of New California State and continued to read the Statement/Notice/Declarations regarding New California and its purpose and intent.  Dawn Powers spoke in support of New California State and continued to read the Statement/Notice/Declarations regarding New California and its purpose and intent.  Chris Powers asked if anyone has had issues with City trees. He further spoke in support of New California State.
 Ron Mason spoke in support of New California State and continued to read the Statement/Notice/Declarations regarding New State California.  Gavin Schultz spoke in support of New California State and continued to read the Statement/Notice/Declarations regarding New State California.  Sean Dobbins spoke in support of New California State.  Matthew Davila spoke in support of New California State.  Howard Carmen spoke about a recent encounter with the Modesto Police Department and the spelling of his name on a police report.

CONSENT ITEMS – ROLL CALL VOTE REQUIRED
ACTION CONSENT ITEMS 4-13; (Wright/Kenoyer; 6/0)

CONSENT
Consent
#4..
- 18 -
- 5 -
10/11/2022 5:30:00 PM

4. Consider approving the minutes from the October 4, 2022 Council Meeting. (Funding Source: Not Applicable)
 Motion approving the minutes from the October 4, 2022 Council Meeting.

CITY CLERK; Diane Nayares-Perez, 209-577-5396, [email protected] ACTION: (Wright/Kenoyer; 6/0) Motion approving the minutes from the October 4, 2022 Council Meeting.

Consent

5. Consider approving final adoption of Ordinance 3751-C.S. amending Title 6 of the Modesto Municipal Code, “Business, Professions and Trades,” by adding Chapter 9, “Automobile Businesses,” related to use of Public Streets and Highways by automobile businesses. (Funding Source: Not Applicable)
 Motion approving final adoption of Ordinance 3751-C.S. amending Title 6 of the Modesto Municipal Code, “Business, Professions and Trades,” by adding Chapter 9, “Automobile Businesses,” related to use of Public Streets and Highways by automobile businesses.

CITY CLERK; Diane Nayares-Perez, 209-577-5396, [email protected] ACTION: (Wright/Kenoyer; 6/0) Motion approving final adoption of Ordinance 3751-C.S. amending Title 6 of the Modesto Municipal Code, “Business, Professions and Trades,” by adding Chapter 9, “Automobile Businesses,” related to use of Public Streets and Highways by automobile businesses.

Consent

6. Consider approving the Amended Conflict of Interest Code for the City of Modesto. (Funding Source: Not Applicable)
 Resolution approving the amended Conflict of Interest Code for the City of Modesto and rescinding Resolution No. 2020-362.

CITY CLERK; Diane Nayares-Perez, 209-577-5396, [email protected] ACTION: (Wright/Kenoyer; 6/0) Resolution 2022-411 approving the amended Conflict of Interest Code for the City of Modesto and rescinding Resolution No. 2020- 362.

Consent

7. Consider approving a resolution continuing to authorize remote teleconference meetings pursuant to Assembly Bill 361. (Funding Source: Not Applicable)  Resolution continuing to authorize remote teleconference meetings of the City of Modesto pursuant to Assembly Bill 361.

CITY ATTORNEY; Jose Sanchez, 209-577-5284, [email protected] ACTION: (Wright/Kenoyer; 6/0) Resolution 2022-412 continuing to authorize remote teleconference meetings of the City of Modesto pursuant to Assembly Bill 361 Consent
#4..
- 19 -
- 6 -
10/11/2022 5:30:00 PM

8. Consider approving the recommended budget adjustments to Fiscal Year 2022-23 Annual Operating and Capital Improvement Program Budgets. (Funding Source:

Various Funds)
 Resolution amending Fiscal Year 2022-23 Annual Operating and Capital Improvement Project Fund Budgets and authorizing the City Manager, to make the necessary steps to implement the provisions of this resolution.

BUDGET; Steve Christensen, 209-577-5390, [email protected] ACTION: (Wright/Kenoyer; 6/0) Resolution 2022-413 amending Fiscal Year 2022- 23 Annual Operating and Capital Improvement Project Fund Budgets and authorizing the City Manager, to make the necessary steps to implement the provisions of this resolution.

Consent

9. Consider approving a Fifth Amendment to the Agreement with California Property Specialists, Inc., dba CPSI, an Interwest Consulting Group, Inc. company, for additional Right-Of-Way Services for the State Route 132 West Freeway/Expressway - Phase 1 Project, increasing the Agreement amount by $177,425, plus $44,356 additional services, if needed, for a total increase of $221,781 from $3,737,413 for a total amount not to exceed $3,959,194, and forwarding to Council for approval. (Funding Source: Streets Capital Facility Fees)
 Resolution approving a Fifth Amendment to the Agreement with California Property Specialists, Inc., dba CPSI, now known as Interwest Consulting Group, Inc., for additional Right-Of-Way Services for the State Route 132 West Freeway/Expressway - Phase 1 Project, increasing the Agreement amount by $177,425, plus $44,356 additional services, if needed, for a total increase of $221,781 from $3,737,413 for a total amount not to exceed $3,959,194, and authorizing the City Manager, or his designee to execute the Fifth Amendment to Agreement.

CED; Toby Wells, 209-571-5542, [email protected]
ACTION: (Wright/Kenoyer; 6/0) Resolution 2022-414 approving a Fifth Amendment to the Agreement with California Property Specialists, Inc., dba CPSI, now known as Interwest Consulting Group, Inc., for additional Right-Of-Way Services for the State Route 132 West Freeway/Expressway - Phase 1 Project, increasing the Agreement amount by $177,425, plus $44,356 additional services, if needed, for a total increase of $221,781 from $3,737,413 for a total amount not to exceed $3,959,194, and authorizing the City Manager, or his designee to execute the Fifth Amendment to Agreement.

Consent

10. Consider approving an Agreement with the State of California Office of Emergency Services, to temporarily house and maintain a Type 6 fire engine and its associated equipment. (Funding Source: General Fund)
 Resolution approving an Agreement with the State of California Office of Emergency Services, to temporarily house and maintain a Type 6 fire engine #4..
- 20 -
- 7 -
10/11/2022 5:30:00 PM
and its associated equipment and authorizing the City Manager, or his designee to execute the Agreement.

FIRE DEPARTMENT; Alan Ernst, 209-572-9590, [email protected] ACTION: (Wright/Kenoyer; 6/0) Resolution 2022-415 approving an Agreement with the State of California Office of Emergency Services, to temporarily house and maintain a Type 6 fire engine and its associated equipment and authorizing the City Manager, or his designee to execute the Agreement.

Consent

11. Consider approving a one-time purchase with Watson Furniture Group, by utilizing the competitive bid process from the Houston-Galveston Area Council (H-GAC), for the purchase and installation of Real Time Crime Center (RTCC) workstation furniture, equipment, materials and labor for an estimated cost not to exceed $62,627. (Funding Source: Police - Grants)
 Resolution approving a one-time purchase with Watson Furniture Group, by utilizing the competitive bid process from the Houston-Galveston Area Council (H-GAC), for the purchase and installation of Real Time Crime Center (RTCC) workstation furniture, equipment, materials and labor for an estimated cost not to exceed $62,627; and authorizing the Purchasing Manager, or her designee, to issue the Purchase Order.

POLICE DEPARTMENT; Jessica Smart, 209-572-9500, [email protected] ACTION: (Wright/Kenoyer; 6/0) Resolution 2022-416 approving a one-time purchase with Watson Furniture Group, by utilizing the competitive bid process from the Houston-Galveston Area Council (H-GAC), for the purchase and installation of Real Time Crime Center (RTCC) workstation furniture, equipment, materials and labor for an estimated cost not to exceed $62,627; and authorizing the Purchasing Manager, or her designee, to issue the Purchase Order.

Consent

12. Consider approving the plans and specifications for the New Traffic Signal Installation Oakdale Road at Claratina Avenue project, accepting the bid, and awarding a contract to Tim Paxin’s Pacific Excavation, Inc. dba Pacific Excavation of Elk Grove, CA, for a total amount not to exceed $538,116. (Funding Source: Highway Safety Improvement Program, Surface Transportation Block Grant, and Measure L)  Resolution approving the plans and specifications for the New Traffic Signal Installation Oakdale Road at Claratina Avenue project, accepting the bid, and awarding a contract to Tim Paxin’s Pacific Excavation, Inc. dba Pacific Excavation of Elk Grove, CA, in the amount of $489,196, and change orders up to the cumulative amount of $48,920 for a total amount not exceed $538,116, and authorizing the City Manager, or his designee, to execute the Agreement.

PUBLIC WORKS; Scott Collins, 209-577-5431, [email protected] ACTION: (Wright/Kenoyer; 6/0) Resolution 2022-417 approving the plans and specifications for the New Traffic Signal Installation Oakdale Road at Claratina #4..
- 21 -
- 8 -
10/11/2022 5:30:00 PM
Avenue project, accepting the bid, and awarding a contract to Tim Paxin’s Pacific Excavation, Inc. dba Pacific Excavation of Elk Grove, CA, in the amount of $489,196, and change orders up to the cumulative amount of $48,920 for a total amount not exceed $538,116, and authorizing the City Manager, or his designee, to execute the Agreement.

Consent

13. Consider approving three On-Call Water Resource Grant Research and Writing Consultant Services Agreements with Provost & Pritchard Consulting Group, Modesto, CA, Woodard & Curran, Sacramento, CA, and West Yost Associates, Davis, CA, for a one-year Agreement with two one-year extension options, for an annual cost not to exceed $150,000 each, and a total not to exceed $1,350,000 over three years. (Funding Source: Various Capital Improvement Program Projects)
 Resolution approving an On-Call Water Resource Grant Research and Writing Consultant Services Agreement with Provost & Pritchard Consulting Group, Modesto, CA, for a one-year Agreement with two one-year extension options, for an annual cost not to exceed $150,000, and a total amount not to exceed $450,000 over three years; and authorizing the City Manager, or his designee, to execute the Agreement.
 Resolution approving an On-Call Water Resource Grant Research and Writing Consultant Services Agreement with West Yost Associates, Davis, CA, for a one-year Agreement with two one-year extension options, for an annual cost not to exceed $150,000, and a total amount not to exceed $450,000 over three years; and authorizing the City Manager, or his designee, to execute the Agreement.
 Resolution approving an On-Call Water Resource Grant Research and Writing Consultant Services Agreement with Woodard & Curran, Sacramento, CA, for a one-year Agreement with two one-year extension options, for an annual cost not to exceed $150,000, and a total amount not to exceed $450,000 over three years; and authorizing the City Manager, or his designee, to execute the Agreement.

UTILITIES; Miguel Alvarez, 209-577-5348, [email protected] ACTION: (Wright/Kenoyer; 6/0) Resolution 2022-418 approving an On-Call Water Resource Grant Research and Writing Consultant Services Agreement with Provost & Pritchard Consulting Group, Modesto, CA, for a one-year Agreement with two oneyear extension options, for an annual cost not to exceed $150,000, and a total amount not to exceed $450,000 over three years; and authorizing the City Manager, or his designee, to execute the Agreement.

ACTION: (Wright/Kenoyer; 6/0) Resolution 2022-419 approving an On-Call Water Resource Grant Research and Writing Consultant Services Agreement with West Yost Associates, Davis, CA, for a one-year Agreement with two one-year extension options, for an annual cost not to exceed $150,000, and a total amount not to exceed $450,000 over three years; and authorizing the City Manager, or his designee, to execute the Agreement.
#4..
- 22 -
- 9 -
10/11/2022 5:30:00 PM
ACTION: (Wright/Kenoyer; 6/0) Resolution 2022-420 approving an On-Call Water Resource Grant Research and Writing Consultant Services Agreement with Woodard & Curran, Sacramento, CA, for a one-year Agreement with two one-year extension options, for an annual cost not to exceed $150,000, and a total amount not to exceed $450,000 over three years; and authorizing the City Manager, or his designee, to execute the Agreement.

COUNCIL COMMENTS & REPORTS
Councilmember Ricci commented that their goal as a Council is to try and make Modesto a great City. He commented on the Forward Together process. They worked together to try and find solutions and are taking time to go over the recommendations and will make a decision based on all the work and input by a lot of people in the community. Recently, he mentioned a one day garage sale where all the City gets together and everyone has a garage sale at the same time. It’s a great way to create community. He’s hoping they can come up with a way to make this happen.

Mayor Zwahlen commented on the new murals downtown that are beautiful. This morning, she was told that the artist that did one of the murals has been all over the world and has never felt the hospitality anywhere else like here in Modesto.

CITY MANAGER COMMENTS & REPORTS
None

MATTERS TOO LATE FOR THE AGENDA
None

ADJOURNMENT
This meeting adjourned at 8:00 pm.

All Closed Session items heard prior to the meeting.

CLOSED SESSION

PUBLIC EMPLOYEE PERFORMANCE EVALUATION
(Pursuant to Section 54957 of the Government Code)
Title: City Clerk
Attest:____________________________
Diane Nayares-Perez, City Clerk
#4..
- 23 -

CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

October 25, 2022
Date: September 29, 2022
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Jaylen French, Community and Economic Development Director SUBJECT: Homeowner Rehabilitation Grant and Housing Rehabilitation Loan for 1125 Springcreek Drive, Modesto, CA 95355
CONTACT: Jessica Hill, Community Development Manager
[email protected], 209-577-5321
DESCRIPTION:

Consider approving a Homeowner Rehabilitation Loan in the amount of $80,251 and a Homeowner Rehabilitation Grant in the amount of $10,000 for a total project cost of $90,251 to Christopher and Stacey Gates for health and safety repairs to the residential property located at 1125 Springcreek Drive, Modesto, CA 95355. (Funding Source: Community Development Block Grant Funds)
STRATEGIC PLAN ELEMENT:

This item supports the City of Modesto’s 2020-2025 Strategic Plan Goal C - Develop Homelessness and Housing Plan.

BACKGROUND:

The Homeowner Rehabilitation Loan Program is designed to repair or eliminate health and safety hazards in residential properties for qualifying low-income households whose income is 80% or below the Area Median Income (AMI). Eligible improvements include roofing, weatherization, heating and cooling systems, plumbing, electrical, ramps, handrails and widening of doorways. Financial assistance is available in the form of low interest loans, secured by Deeds of Trust and recorded against equity qualifying owner-occupied properties.

The Housing Rehabilitation Loan Committee (HRLC) is authorized to approve loans up to $49,999, whereas loans in excess of $49,999 require City Council approval.

Financial assistance is available in the form of a grant with a maximum award of $10,000 for owner occupied single-family residential units and $20,000 for Modular Homes.Technical assistance is provided for both programs and includes preparation of work specifications, preparation and review of cost estimates, bidding assistance and coordination with local contractor(s) to ensure work is completed pursuant to applicable Federal & State regulations.

On June 3, 2022 staff received an application from Christopher and Stacey Gates. City staff completed and approved the eligibility on June 16, 2022. #5..
- 24 -
City Council, October 25, 2022
Homeowner Rehabilitation Grant and Housing Rehabilitation Loan for 1125 Springcreek Drive, Modesto, CA 95355

In review of eligibility for the program the annual income cannot exceed 80% AMI based on household size. The Gates household is six members, and the AMI was calculated at 66%, below the 80% threshold.

Additional eligibility includes both front end and back end debt ratios.The front-end debt ratio was 19% (policy section 4.4.1 not to exceed 35%) with a back-end debt ratio of 28% (policy section 4.4.2 not to exceed 45%).

On June 16, 2022 staff met with Christopher and Stacey Gates to a conduct a housing quality standard inspection (HQS) of the property located at 1125 Springcreek Drive, Modesto, CA 95355. The inspection found health and safety related items in need of repair and/or replacements such as replacement of the roof, windows, HVAC, finish plumbing and electrical, oven, and water heater.

On July 7, 2022 staff brought the project forward to the HRLC, which directedstaff to meet with the family to discuss an open Neighborhood Preservation Unit (NPU) violation and other maintenance concerns at the property and to return within 60 days to report for reconsideration of this project proposal.

On July 13, 2022 staff met with the family who successfully closed out the NPU violation by complying with the code enforcement terms. Staff has worked closely with NPU to ensure there are no other outstanding violations or maintenance concerns.

DISCUSSION:

On August 4, 2022 HRLC approved a $80,251 Homeowner Rehabilitation Loan and a $10,000 Homeowner Rehabilitation Grant for Christopher and Stacey Gates for the property located at 1125 Springcreek Drive, Modesto, CA 95355.

Although the City is not a party to the construction contract, which is between the property owner and the contractor, the City helps facilitate the bidding process.

The project was advertised on Planet Bids on August 15, 2022 and also advertised in the Modesto Bee. Four general contractors submitted sealed bid packets to the City Clerk. On September 12, 2022 the City Clerk facilitated the bid opening. Zack’s Handyman & Construction of Denair, California was the apparent low bidder. The bid tabulation is attached as attachment

2. The bid analysis is:

Number of bids received 4
Number of bids in compliance with (Section 6 subsection14.5) 3 Number of bids outside compliance with (Section 6 subsection14.5) 1 The Intent to Award was sent to Zack’s Handyman & Construction, as the apparent low bidder for project 1125 Springcreek Drive for $90,251 inclusive of a 12% contingency. #5..
- 25 -
City Council, October 25, 2022
Homeowner Rehabilitation Grant and Housing Rehabilitation Loan for 1125 Springcreek Drive, Modesto, CA 95355

Section 6: Homeowner Rehabilitation Program Policies & Procedures, Resolution 2019-513 states in Section 14.0 Cost Reasonableness: “bids received must be within 15% of the Housing Rehabilitation Specialist’s cost estimate.”
The Homeowner Rehabilitation Program was created to assist with low-income homeowners in need of rehabilitation and health and safety concerns of their property. To ensure quality work, city staff assists with procurement of the contractor and oversight of the project. City staff oversees the project to verify timelines and workmanship standards are adhered to. City only provides funding and project oversight; the homeowner goes into direct agreement with the contractor.

FISCAL IMPACT:

The Homeowner Rehabilitation Program is funded through the Community Development Block Grant Revolving Loan Fund, and Community Development Block Grant Entitlement Fund.

Sufficient funds are available to fund the requested project. There is no impact to the General Fund.

COMMITTEE RECOMMENDATION:

On August 4, 2022 HRLC approved a $80,251.00 Homeowner Rehabilitation Loan and a $10,000.00 Homeowner Rehabilitation Grant, for Christopher and Stacey Gates for the property located at 1125 Springcreek Drive, Modesto, CA 95355, with exception in accordance with Section 4.6.2 of the Section 6 Policies and Procedures and forwarded to Council for approval.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving a Homeowner Rehabilitation Loan in the amount of $80,251 and a Homeowner Rehabilitation Grant in the amount of $10,000 to Christopher and Stacey Gates for health and safety repairs to the residential property located at 1125 Springcreek Drive, Modesto, CA 95355 and authorizing the City Manager to execute the Agreements.

Approved By: _______________________________________________ Jaylen French, Community and Economic Development Director _______________________________________________
Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. Bid Tabulation

3. City of Modesto Residential Rehabilitation Loan Agreement

4. City of Modesto Residential Rehabilitation Loan Deed of Trust

5. City of Modesto Residential Rehabilitation Promissory Note

6. City of Modesto Residential Rehabilitation Grant Agreement

7. City of Modesto Residential Rehabilitation Grant Deed of Trust #5..
- 26 -
1 2022-

MODESTO CITY COUNCIL
RESOLUTION NO. 2022-

RESOLUTION APPROVING A HOMEOWNER REHABILITATION LOAN IN THE AMOUNT OF $80,251 AND A HOMEOWNER REHABILITATION GRANT IN THE AMOUNT OF $10,000 TO CHRISTOPHER AND STACEY GATES FOR

HEALTH AND SAFETY REPAIRS TO THE RESIDENTIAL PROPERTY
LOCATED AT 1125 SPRINGCREEK DRIVE, MODETSO, CA 95355 AND

AUTHORIZING THE CITY MANAGER TO EXECUTE THE AGREEMENTS
WHEREAS, on August 4, 2022 HRLC approved a $69,772 Homeowner Rehabilitation Loan and a $10,000 Homeowner Rehabilitation Grant for Christopher & Stacey Gates for the property located at 1125 Springcreek Drive, Modesto, CA 95355, and
WHEREAS, the project was advertised on Planet Bids on August 15, 2022 and also advertised in the Modesto Bee, and
WHEREAS, four general contractors submitted sealed bid packets to the City Clerk. On September 12, 2022 the City Clerk facilitated the bid opening, and WHEREAS, Zack’s Handyman & Construction of Denair, California was the apparent low bidder, and
WHEREAS, the bid analysis is as follows: number of bids received 4, number of bids in compliance with (Section 6, subsection 14.5) 3, number of bids outside compliance with (Section 6, subsection 14.5) 1, and
WHEREAS, the Intent to Award was sent to Zack’s Handyman & Construction, as the apparent low bidder for project 1125 Springcreek Drive for $90,251 inclusive of a 12% contingency, and
WHEREAS, Section 6: Homeowner Rehabilitation Program Policies & Procedures, Resolution 2019-513 states in Section 14.0 Cost Reasonableness: “bids #5..
- 27 -
2 2022-
received must be within 15% of the Housing Rehabilitation Specialist’s cost estimate,” and
WHEREAS, the Homeowner Rehabilitation Program was created to assist with low-income homeowners in need of rehabilitation and health and safety concerns of their property, and
WHEREAS, to ensure quality work, city staff assists with procurement of the contractor and oversight of the project, and
WHEREAS, City staff oversees the project to verify timelines and workmanship standards are adhered to, and
WHEREAS, City only provides funding and project oversight; the homeowner goes into direct agreement with the contractor.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves a Homeowner Rehabilitation Loan in the amount of $80,251 and a Homeowner Rehabilitation Grant in the amount of $10,000 to Christopher and Stacey Gates for health and safety repairs to the residential property located at 1125 Springcreek Drive, Modesto, CA 95355.

BE IT FURTHER RESOLVED that the City Manager or his designee is authorized to execute the agreements in a form approved by the City Attorney.

The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 25th day of October 2022, by Councilmember? who moved its adoption, which motion being duly seconded by Councilmember? was upon roll call carried and the resolution adopted by the following vote:
#5..
- 28 -
3 2022-
AYES: Councilmembers: ?
NOES: Councilmembers: ?
ABSENT: Councilmembers: ?
ATTEST: ____________________________
DANA NAYARES-PEREZ, CMC, City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: ____________________________________
JOSE M. SANCHEZ, City Attorney
#5..
- 29 -
Bid Tabulation
Project Title: 1125 Springcreek Drive Modesto, CA 95355 September 30, 2022
Project ID #: CEDD 22-02
Bid Opening: Tuesday September 13, 2022 at 11:00AM
Basis of Award: By Base Bid Designer: Samuel Perez
Designer Supervisor: Trena Ochoa
Project Description: Tear Off-Re Roof, smoke detectors, Replace Sliding Doors, Replace AC& Heat with New Insulated Ducts, Replace Water Heater, Replace Windows, Lead Safe Practice Item # Item Description Units Quantity Unit Price
Zack's Handyman & Construction
PO Box 206, 4740 Main St, Denair CA 95316
(209) 634-4477
Base Bid
1 General Door work front door LS 1 $3,000
2 Install new security screen door LS 1 $2,800
3 General Appliance work LS 1 $3,200
4 General Electrical work LS 1 $85
5 Install new kitchen bowl sink & faucet LS 1 $1,085
6 General roof work LS 1 $35,211
7 Install smoke detectors LS 1 $250
8 General door work sliding doors EA 5 $4,500
9 Permits and licenses EA 2 $1,200
10 Lead safe practices LS 1 $1,800
11 Install new gas AC & Heat package with ducts
12 Install new 40-gallon gas water heater
LS
LS
1 1
$20,100
$1,850
#5..
- 30 -
Bid Tabulation
Project Title: 1125 Springcreek Drive Modesto, CA 95355 13 General window work EA 10 $5,500
Total $80,581
Item # Item Description Units Quantity Unit Price
CAS Construction
1855 E. Tuolumne Road Turlock CA, 95382
(209) 620-4293 1855
Base Bid
1 General Door work front door LS 1 $3,000
2 Install new security screen door LS 1 $3,500
3 General Appliance work LS 1 $3,200
4 General Electrical work LS 1 $100
5 Install new kitchen bowl sink & faucet LS 1 $1,300
6 General roof work LS 1 $30,800
7 Install smoke detectors LS 1 $500
8 General door work sliding doors EA 5 $3,600
9 Permits and licenses EA 2 $2,000
10 Lead safe practices LS 1 $3000
11 Install new gas AC & Heat package with ducts
12 Install new 40-gallon gas water heater
13 General window work
LS
LS
EA
1 1
10 $19,500
$1,800
$8,800
Total $81,100
Item # Item Description Units Quantity Unit Price
Borges Construction
PO Box 1482, Hughson CA 95326
(209) 531-4121
Base Bid
1 General Door work front door LS 1 $3,000
2 Install new security screen door LS 1 $3,250
3 General Appliance work LS 1 $3,000
4 General Electrical work LS 1 $85
5 Install new kitchen bowl sink & faucet LS 1 $900
6 General roof work LS 1 $35,250
7 Install smoke detectors LS 1 $480
8 General door work sliding doors EA 5 $7,250
9 Permits and licenses EA 2 $975
10 Lead safe practices LS 1 $2,000
11 Install new gas AC & Heat package with ducts
12 Install new 40-gallon gas water heater
13 General window work
LS
LS
EA

1 1
10 $22,000
$2,500
$10,000
#5..
- 31 -
Bid Tabulation
Project Title: 1125 Springcreek Drive Modesto, CA 95355 Total $89,715
Item # Item Description Units Quantity Unit Price
Top State Construction
5013 Kimball Hill Circle Stockton CA, 95210
(209) 323-5210
Base Bid
1 General Door work front door LS 1 $3,000
2 Install new security screen door LS 1 $3,200
3 General Appliance work LS 1 $3,000
4 General Electrical work LS 1 $300
5 Install new kitchen bowl sink & faucet LS 1 $1,000
6 General roof work LS 1 $31,000
7 Install smoke detectors LS 1 $480
8 General door work sliding doors EA 5 $3,800
9 Permits and licenses EA 2 $2,500
10 Lead safe practices LS 1 $0
11 Install new gas AC & Heat package with ducts
12 Install new 40-gallon gas water heater
LS
LS
EA
1 1
10 $5,000
$2,200
#5..
- 32 -
Bid Tabulation
Project Title: 1125 Springcreek Drive Modesto, CA 95355 13 General window work

$4,500
Total $59,980
Item # Item Description Units Quantity Unit Price
Internal Estimate
Base Bid
1 General Door work front door LS 1 $2,500
2 Install new security screen door LS 1 $2,600
3 General Appliance work LS 1 $3,000
4 General Electrical work LS 1 $125
5 Install new kitchen bowl sink & faucet LS 1 $1,200
6 General roof work LS 1 $28,000
7 Install smoke detectors LS 1 $500
8 General door work sliding doors EA 5 $4,000
9 Permits and licenses EA 2 $1,000
10 Lead safe practices LS 1 $1,600
11 Install new gas AC & Heat package with ducts
12 Install new 40-gallon gas water heater
LS
LS
1 1
$17,000
$2,200
#5..
- 33 -
Bid Tabulation
Project Title: 1125 Springcreek Drive Modesto, CA 95355 13 General window work
14 Contingency
EA
LS
10 1
$7,500
$8,547
Total $79,772
#5..
- 34 -
Rehabilitation Loan Agreement
City of Modesto

RESIDENTIAL REHABILITATION LOAN AGREEMENT
This Residential Rehabilitation Loan Agreement (this “Agreement”) is entered into as of this____________, 2022, ("Effective Date") by and between the City of Modesto, a California charter city (the “City”) and Christopher Gates and Stacy Gates, A married couple (the “Borrower”). Borrower and City are collectively referred to as the "Parties"

RECITALS
WHEREAS, to further its goal of improving and preserving housing for low- and moderate-income households, the City has authorized the Residential Rehabilitation Loan Program (the “Program”) pursuant to which the City provides financial assistance to owner-occupants of single-family homes to undertake needed repairs and improvements; and
WHEREAS, Borrower is the owner of that certain real property located at 1125 Springcreek Drive in the City of Modesto, California (“Property”) as more particularly described in Exhibit A attached hereto and incorporated herein by this reference; and WHEREAS, Borrower has requested, and City has agreed, to provide a loan in the amount of Eighty Thousand Two Hundred Fifty-One Dollars and Zero Cents ($80,251) (the “Loan”) pursuant to the terms and conditions hereof for the purpose of financing a portion of the costs of designing, constructing, and/or installing the improvements to the Property (the “Improvements”); and
WHEREAS, the City has determined that (i) the Borrower meets the Program eligibility requirements, and (ii) provision of the Loan for the Improvements pursuant to the terms of this Agreement is consistent with the interests of the health, safety and welfare of the residents of the City; and
WHEREAS, concurrently herewith Borrower shall execute (i) a promissory note (the “Note”) evidencing the Loan; and (ii) a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing which shall provide City with a security interest in the Property (“Deed of Trust”) in the amount of the Loan. This Agreement, Note, and Deed of Trust are collectively hereinafter referred to as the “Loan Documents.”; and WHEREAS, Borrower has entered into that certain contract dated ___________ with Zack’s Handyman & Construction (the “Contractor”) to construct the Improvements; and
WHEREAS, pursuant to this Agreement, monies disbursed from the Loan will be sent directly to the Contractor as payment for services rendered. #5..
- 35 -
2889634.1
Rehabilitation Loan Agreement
City of Modesto
2 NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE I

LOAN TERMS

1.1 Loan Amount. City agrees to loan Borrower, and Borrower agrees to borrow from City, a sum not to exceed Eighty Thousand Two Hundred Fifty-One Dollars and Zero Cents ($80,251) (the “Loan”) upon the terms and conditions and for the purposes set forth in this Agreement. The Loan shall be evidenced by the Note, substantially in the form attached hereto as Exhibit B, which shall be dated as of the Effective Date and executed by Borrower.

1.2 Term. All principal outstanding under the Note, together with interest accrued thereon is due and payable on the 20th anniversary of the Effective Date (the “Maturity Date”).

1.3 Interest Rate. Commencing on the date of initial disbursement of the proceeds of the Loan and continuing through the date that all indebtedness and other amounts payable under this Agreement and the Note are paid in full, interest on the Loan shall accrue at the rate of zero percent per annum on the unpaid principal outstanding from time to time.

1.4 Repayment. The entire unpaid principal balance of the Loan and all other sums accrued under the Note shall be due and payable upon the earlier of (i) the Maturity Date, (ii) the occurrence of an Event of Default under Article IV of this Agreement, or (iii) the sale or transfer of the Property prior to the Maturity Date.

1.5 Prepayment. Borrower may, without premium or penalty, at any time and from time to time, prepay all or any portion of the outstanding principal balance of the Loan due under this Agreement. Prepayments shall be applied first to any unpaid late charges and other costs and fees then due, second to outstanding and accrued interest, if any, and then to principal. In no event shall any amount due under this Agreement become subject to any rights of offset, deduction or counterclaim on the part of Borrower.

1.6 Use of Proceeds. Borrower shall use the proceeds of the Loan (“Loan Proceeds”) solely and exclusively to pay for costs billed to Borrower by third-parties in connection with the design and construction of the Improvements and such other costs related to the Improvements as City may approve in writing.

1.7 Disbursement of Loan Proceeds. Provided that Borrower has satisfied the conditions set forth in Section 1.8, City shall disburse the Loan Proceeds to Borrower in accordance with the provisions of Section 1.11 herein.

1.8 Conditions Precedent to Disbursement of Proceeds. City’s obligation to fund the Loan and disburse the Loan Proceeds is conditioned upon the satisfaction of #5..
- 36 -
2889634.1
Rehabilitation Loan Agreement
City of Modesto
3 all of the following conditions:
(a) Borrower’s execution and delivery to City of this Agreement, the Deed of Trust and the Note;
(b) Borrower’s delivery to City of evidence reasonably satisfactory to City that Borrower has obtained all necessary permits (including without limitation, building permits), licenses, and approvals required to undertake the Improvements; (c) Borrower’s delivery to City of (i) the final budget for the Improvements, (ii) the construction contract, (iii) a written requisition substantially in the form attached hereto as Exhibit D; (iv) detailed receipts or invoices that match the project description and final budget; (v) proof of payment and (vi) and copies of such other documents related to the Improvements as City may reasonably request; (d) Borrower’s delivery to City of a certification from the City’s Building Department in accordance with Section 2.2.
(e) Borrower’s delivery to City of the insurance certificates required under Section 3.2 of this Agreement.

1.9 No Obligation to Disburse Proceeds Upon Default. Notwithstanding any other provision of this Agreement, the City shall have no obligation to disburse any portion of the Loan Proceeds if there is an occurrence of an Event of Default under the Loan Documents.

1.10 Security. As security for repayment of the Loan, as evidenced by the Note, Borrower shall execute the Deed of Trust in favor of the City as beneficiary pursuant to which the City shall be provided a lien against the Property. The Deed of Trust shall be dated as of the Effective Date, shall be substantially in the form attached hereto as Exhibit C, and shall be recorded in the official records of Stanislaus County.

1.11 Disbursement of Loan Proceeds. Upon satisfaction of the conditions set forth in Section 1.10 herein, City shall make Loan disbursements to Contractor following Borrower’s provision to City of a written requisition, in form and substance satisfactory to City as set forth in Exhibit D, specifying the amount and use of the requested Loan proceeds, accompanied by copies of bills and invoices and such other documentation as City may reasonably require. Subsequent disbursements shall be made to Contractor no more than once per calendar month, upon City’s receipt of written requisitions and supporting documentation as described in this Section.

ARTICLE II

CONSTRUCTION OF THE IMPROVEMENTS

2.1 Construction Schedule. Borrower shall commence construction of the Improvements within 60 days following the Effective Date. Borrower shall complete construction of the Improvements and obtain certification from the City’s Building #5..
- 37 -
2889634.1
Rehabilitation Loan Agreement
City of Modesto
4 Department in accordance with Section 2.2 no later than one hundred twenty (120) days after the commencement of construction.

2.2 Certification. Promptly after completion of the Improvements, Borrower shall obtain certification from the City’s Building Department certifying that the Improvements have been completed in accordance with Applicable Laws (defined in Section 2.10) and this Agreement.

2.3 Approval of Plans and Specifications. City shall have the right to approve the plans and specifications for the Improvements (“Plans and Specifications”).

Borrower must obtain City's written approval of any modification to the Plans and Specifications arising prior to or during the course of construction. City must also approve any additional construction work proposed to be performed during the construction of the Improvements, whether constructed with City funds or Borrower's funds, or funds from any other source.

2.4 Inspections. Borrower shall permit the City’s agents or representatives to enter upon the Property to inspect the Improvements; permit them to examine all detailed plans and shop drawings for the Improvements; and cause the general contractor and/or subcontractors to cooperate with the City in this regard, during normal business hours. If any of the work, in the reasonable opinion of the City, is not being performed in accordance with the approved Plans and Specifications, the City will provide Borrower with written notice of same. Observation by the City of construction shall be for the purpose of protecting the security of the Loan only, and such observation shall in no way be construed as an acknowledgment that the Plans and Specifications for the Improvements have been complied with or that the construction is free from defect or in compliance with the terms of this Agreement.

2.5 Project Approvals. Borrower acknowledges and agrees that execution of this Agreement by City does not constitute approval for the purpose of the issuance of building permits for the Improvements, does not limit in any manner the discretion of City in such approval process, and does not relieve Borrower from the obligation to apply for and obtain all necessary entitlements, approvals, and permits for the Improvements, including without limitation, the approval of architectural plans, the issuance of any certificates regarding historic resources required in connection with the Improvements (if any), and the completion of any required environmental review.

Borrower covenants that it shall: (i) obtain all necessary permits and approvals which may be required by City or any other governmental agency having jurisdiction over the Improvements or the Property, (ii) comply with all Conditions of Approval, (iii) comply with all mitigation measures imposed in connection with any environmental review of the Improvements, and (iv) not commence construction work on the Improvements prior to issuance of building permits required for such work.

2.6 Fees. Borrower shall be solely responsible for, and shall promptly pay when due, all customary and usual fees and charges of City in connection with obtaining building permits and other approvals for the Improvements, including without #5..
- 38 -
2889634.1
Rehabilitation Loan Agreement
City of Modesto
5 limitation, those related to the processing and consideration of amendments, if any, to the current entitlements, any related approvals and permits, environmental review, design review, architectural review, historic review, and any subsequent approvals for the Improvements or the development of the Property.

2.7 Cost of Construction. Except as expressly set forth herein, Borrower shall be solely responsible for all direct and indirect costs and expenses incurred in connection with the design, development and construction of the Improvements and compliance with the Conditions of Approval, and none of such costs and expenses shall be the obligation of the City or the City.

2.8 Equal Opportunity. During the construction of the Improvements, there shall be no discrimination on the basis of race, color, religion, creed, sex, sexual orientation, marital status, ancestry or national origin in the hiring, firing, promoting or demoting of any person engaged in construction of the Improvements, and Borrower shall direct its contractors and subcontractors to refrain from discrimination on such basis.

2.9 Prevailing Wage Requirements. Borrower shall pay or cause Borrower’s contractors and subcontractors to pay prevailing wages for the construction of the Improvements as those wages are determined pursuant to Labor Code Section 1720 et seq. (“Prevailing Wage Laws”) and shall comply or shall cause the contractors and subcontractors to comply with all applicable local, federal, and state labor standards and prevailing wage provisions.

Borrower shall indemnify, defend (with counsel approved by City) and hold the City and its respective elected and appointed officers, officials, employees, agents, consultants, and contractors (collectively, the “Indemnitees”) harmless from and against all liability, loss, cost, expense (including without limitation attorneys’ fees and costs of litigation), claim, demand, action, suit, judicial or administrative proceeding, penalty, deficiency, fine, order, and damage (all of the foregoing collectively “Claims”) which directly or indirectly, in whole or in part, are caused by, arise in connection with, result from, relate to, or are alleged to be caused by, arise in connection with, or relate to, the payment or requirement of payment of prevailing wages (including without limitation, all claims that may be made by contractors, subcontractors or other third party claimants pursuant to Labor Code Sections 1726 and 1781) or the requirement of competitive bidding in the construction of the Improvements, the failure to comply with any state or federal labor laws, regulations or standards in connection with this Agreement, including but not limited to the Prevailing Wage Laws, or any act or omission of Borrower related to this Agreement with respect to the payment or requirement of payment of prevailing wages or the requirement of competitive bidding, whether or not any insurance policies shall have been determined to be applicable to any such Claims. It is further agreed that City does not and shall not waive any rights against Borrower which they may have by reason of this indemnity and hold harmless agreement because of the acceptance by City, or Borrower’s deposit with City of any of the insurance policies described in this Agreement. The provisions of this Section 2.9 shall survive the expiration or earlier termination of this Agreement. Borrower’s #5..
- 39 -
2889634.1
Rehabilitation Loan Agreement
City of Modesto
6 indemnification obligations set forth in this Section shall not apply to Claims arising from the gross negligence or willful misconduct of the Indemnitees.

2.10 Compliance with Laws. Borrower shall carry out and shall cause its contractors to carry out the construction of the Improvements in conformity with all applicable federal, state and local laws, rules, ordinances and regulations, including without limitation, all applicable federal and state labor laws and standards, the City zoning and development standards, building, plumbing, mechanical and electrical codes, all other provisions of the City's Municipal Code, and all applicable disabled and handicapped access requirements (collectively, “Applicable Laws”).

2.11 Insurance. Borrower shall maintain, or cause to be maintained, insurance in the amounts required under Section 3.2 of this Agreement.

ARTICLE III

AFFIRMATIVE COVENANTS

3.1 Use of Funds. Borrower covenants that it shall use the Loan Proceeds solely for purpose of financing the construction of the Improvements in accordance with Section 1.7.

3.2 Insurance. Borrower covenants to cause its contractors to maintain insurance equivalent to a commercial general liability policy in the amount of One Million Dollars ($1,000,000) combined single limit, including contractual liability coverage.

Such insurance shall be written on an occurrence basis and shall name City as loss payee as their interests may appear. Borrower covenants to maintain and keep the Property insured against loss or damage by earthquake, fire and such other hazards, casualties and contingencies and by such companies on such forms and in the amount of the replacement cost of the Property, and shall deliver a copy of all such policies to City, together with receipts satisfactory to City evidencing payment of the premiums.

Borrower shall provide City not less than thirty (30) days advance written notice of the cancellation, expiration or termination of any such policy or any material change in the coverage afforded by it. Renewal policies and any replacement policies, together with premium receipts satisfactory to City, shall be delivered to City at least thirty (30) days prior to the expiration of existing policies. Neither Borrower nor City shall by reason of accepting, rejecting, approving or obtaining insurance incur any liability for the existence, nonexistence, form or legal sufficiency of such insurance, or solvency of any insurer for payment of losses. All insurance proceeds for such losses must be utilized for the repair or restoration of the Property.

3.3 Indemnification. To the maximum extent permitted by law, Borrower shall indemnify, defend (with counsel reasonably acceptable to City), and hold the Indemnitees harmless from and against, and shall pay on demand, any and all Claims arising directly or indirectly in any manner in connection with or as a result of Borrower’s failure to perform its covenants and obligations under this Agreement and any of its activities or operations related thereto, excluding the wilful misconduct or the gross #5..
- 40 -
2889634.1
Rehabilitation Loan Agreement
City of Modesto
7 negligence of the Indemnitees. It is further agreed that City do not and shall not waive any rights against Borrower which they may have by reason of this indemnity and hold harmless agreement because of the acceptance by City, or Borrower’s deposit with City of any of the insurance policies described in this Agreement. Borrower’s defense and indemnification obligations set forth in this Section 3.3 shall survive the expiration or earlier termination of this Agreement.

3.4 Obligation to Refrain from Discrimination. Borrower shall not discriminate in the hiring of contractors for the construction of the Improvements on the basis of race, color, religion, creed, sex, sexual orientation, disability, marital status, ancestry, or national origin of any person. Borrower covenants for itself and all persons claiming under or through it, and this Agreement is made and accepted upon and subject to the condition that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code.

3.5 Principal Residence. Borrower shall (i) occupy the Property as Borrower’s principal residence throughout the term of this Agreement, and (ii) shall not rent or lease the Property or portion thereof during the term of this Agreement without the prior written consent of the City. “Principal Residence” means the place where a person resides on a substantially full-time basis during not less than ten (10) months per year.

3.6 Hazardous Materials. Borrower shall not cause or permit any Hazardous Materials (as defined in below) to be brought upon, kept, stored or used in, on, or about the Property by Borrower, or the agents, employees, contractors or invitees of Borrower except for materials commonly used in construction activities similar to those related to the Improvements, or in the operation and maintenance of the Property and the Improvements, in each case in compliance with all applicable laws, and shall not cause any release of Hazardous Materials into, onto, under or through the Property. If any Hazardous Material is discharged, released, dumped, or spilled in, on, under, or about the Property and results in any contamination of the Property or adjacent property, or otherwise results in the release or discharge of Hazardous Materials in, on, under or from the Property, Borrower shall promptly take all actions at Borrower’s sole expense as are necessary to comply with all Hazardous Materials Laws (as defined below).

3.7 Definitions.

3.7.1 Hazardous Materials. As used in this Agreement, “Hazardous Materials” means any substance, material, or waste which is or becomes regulated by any local, state or federal authority, agency or governmental body, including any material or substance which is: (i) defined as a “hazardous waste,” “hazardous material,” “hazardous substance,” “extremely hazardous waste,” “restricted hazardous waste,” “pollutant, “ or any other terms comparable to the foregoing terms under any provision of California law or federal law as any such statutes and regulations now exist or may hereafter be amended, (ii) petroleum or petroleum products; (iii) asbestos; (iv) #5..
- 41 -
2889634.1
Rehabilitation Loan Agreement
City of Modesto
8 polychlorinated biphenyls, (v) radioactive chemicals, (vi) any material determined to hazardous based on deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity or toxicity, (vii) designated as a “hazardous substance” pursuant to Section 311 of the Clean Water Act (33 U.S.C. §1317); (viii) defined as a “hazardous waste” pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. §6901, et seq. (42 U.S.C. §6903); (ix) defined as “hazardous substances” pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §9601, et seq; or (x) determined by California, federal or local governmental authority to be capable of posing a risk of injury to health, safety or property.

3.7.2 Hazardous Materials Laws. As used in this Agreement, “Hazardous Materials Laws” means all federal, state and local laws, ordinances, regulations, orders and directives pertaining to Hazardous Materials, including without limitation, the laws, statutes and regulations cited in the preceding Section 3.7.1, as they may be amended from time to time.

3.8 Sale, Transfer or Refinance. All amounts due under the Note shall be immediately due and payable upon the sale or transfer of the Property. Borrower may not refinance any loans that are secured against the Property in a lien position that is higher than the Deed of Trust without the prior written consent of City.

ARTICLE IV

DEFAULT AND REMEDIES

4.1 Events of Default. The occurrence of any one or more of the following events shall constitute an event of default hereunder ("Event of Default"):
(a) If Borrower fails to pay when due the principal and interest payable under the Note and such failure continues for ten (10) calendar days after City notifies Borrower thereof in writing.
(b) If any representation or warranty contained in the Loan Documents or any certificate furnished in connection with the foregoing or in connection with any request for disbursement of Loan Proceeds proves to have been false or misleading in any material adverse respect when made.
(c) Borrower fails to commence and complete construction and/or installation of the Improvements in accordance with Section 2.1. (d) If an Event of Default shall have been declared under any other Loan Document, subject to the expiration of any applicable cure period set forth in such documents.
(e) If, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (“Bankruptcy Law”), Borrower (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Borrower in an involuntary case; (iii) #5..
- 42 -
2889634.1
Rehabilitation Loan Agreement
City of Modesto
9 consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Borrower; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due. (f) If an event of default has been declared by the holder of any debt instrument secured by a mortgage or deed of trust on the Improvements or Borrower’s interest in the Property and such holder exercises a right to declare all amounts due under that debt instrument immediately due and payable, subject to the expiration of any applicable cure period set forth in such holder’s documents. (g) If the Borrower fails to maintain insurance on the Property as required pursuant to the Loan Documents, and Borrower fails to cure such default within 60 days.
(h) Borrower, or Borrower’s heir ceases to occupy the Property as Borrower’s Principal Residence in accordance with Section 3.5. (i) Borrower defaults in the performance of any term, provision, covenant or agreement (other than an obligation enumerated in this Section 4.1) contained in this Agreement or unless a shorter cure period for such default is specified herein, the default continues for ten (10) days in the event of a monetary default or thirty (30) days in the event of a nonmonetary default after the date upon which City shall have given written notice of the default to Borrower (or such longer time as City may agree upon in writing), provided that in each case Borrower commences to cure the default within thirty (30) days and thereafter prosecutes the curing of such default with due diligence and in good faith.

4.2 Declaring Default. Whenever any Event of Default has occurred, other than failure to pay any sums due under this Agreement, City shall give written notice of default to Borrower. Any default that has occurred shall be deemed to commence on the date that written notice of default is effective pursuant to Section 5.1 of this Agreement (the "Date of Default"). If the default is not cured within thirty (30) business days after the Date of Default (defined herein), or any extension approved in writing by City, the interest rate on the loan will be raised to 3% (the “Default Rate”) and City may enforce its rights and remedies under Section 4.3 below.

4.3 Remedies and Rights Upon Default. Upon the occurrence of an Event of Default, City shall have all remedies available to it under law or equity, including, but not limited to the following, and City may, at its election, without notice to or demand upon Borrower, except for notices or demands required by law or expressly required pursuant to this Agreement, exercise one or more of the following remedies:
a) Seek specific performance to enforce the terms of this Agreement; b) Accelerate and declare the balance of the Note immediately due and payable;
c) Foreclose on the Property pursuant to the Deed of Trust; #5..
- 43 -
2889634.1
Rehabilitation Loan Agreement
City of Modesto
10 d) Pursue any and all other remedies available under law to enforce the terms of this Agreement and City's rights hereunder.

4.4 Remedies Cumulative. Each of the remedies provided herein is cumulative and not exclusive of, and shall not prejudice any other remedy provided herein. The City may exercise from time to time any rights and remedies available to it under applicable law, in addition to, and not in lieu of, any rights and remedies expressly granted in this Agreement or in any other instrument or notice.

4.5 Costs and Expenses. Borrower shall pay all reasonable costs and expenses incurred by or on behalf of City including, without limitation, reasonable attorneys’ fees, incurred in connection with City’s enforcement of the Loan Documents and the exercise of any or all of its rights and remedies hereunder and all such sums shall be a part of the indebtedness secured by the Deed of Trust.

ARTICLE V

MISCELLANEOUS

5.1 Notices. Except as otherwise specified in this Agreement, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other Party in accordance with this Section

5.1. All such notices shall be sent by:
a. personal delivery, in which case notice shall be deemed delivered upon receipt;
b. certified or registered mail, return receipt requested, in which case notice shall be deemed delivered two (2) business days after deposit, postage prepaid in the United States mail;
c. nationally recognized overnight courier, in which case notice shall be deemed delivered one (1) day after deposit with such courier; or d. facsimile transmission, in which case notice shall be deemed delivered on transmittal, provided that a transmission report is generated reflecting the accurate transmission thereof.

City: City of Modesto
Community Economic Development Department
P.O. Box 642
Modesto, CA 95353
Attn: Community and Economic Development Manager
Borrower: Christopher Gates and Stacy Gates
1125 Springcreek Drive
Modesto, CA 95355
#5..
- 44 -
2889634.1
Rehabilitation Loan Agreement
City of Modesto
11 5.2 Attorneys’ Fees. If either party initiates legal proceedings to interpret or enforce its rights under this Agreement, the prevailing party in such action shall be entitled to an award of reasonable attorneys’ fees and costs in additions to any other recovery to which it is entitled under this Agreement.

5.3 No Joint Venture; No Third-Party Beneficiary. No joint venture or other partnership exists or is created between the Parties by virtue of this Agreement. Except as expressly stated herein, this Agreement does not benefit any third party.

5.4 Successors; Assignment. This Agreement shall inure to the benefit of and shall be binding upon the Parties to this Agreement and their respective heirs, executors, administrators, successors and assigns. City shall have the right to assign all of its rights and obligations under this Agreement without the consent of Borrower.

5.5 Amendment. This Agreement may be modified only by an instrument in writing executed by the Parties or their respective successors in interest.

5.6 Authority and Execution. Each Party represents and warrants that it has full power and authority to enter into this Agreement and to undertake all of its obligations hereunder, that each person executing this Agreement on its behalf is duly and validly authorized to do so.

5.7 Severability. The invalidity or unenforceability of any term or provision of this Agreement shall not impair or affect the remainder of this Agreement, and the remaining terms and provisions hereof shall not be invalidated but shall remain in full force and effect.

5.8 Waiver; Modification. No waiver or modification of this Agreement or any covenant, condition, or limitation herein contained shall be valid unless in writing and duly executed by the Party to be charged therewith. No evidence or any waiver or modification shall be offered or received in evidence in any proceeding, arbitration, or litigation between the Parties arising out of or affecting this Agreement or the rights or obligations of any Party hereunder, unless such waiver or modification is in writing and duly executed as aforesaid. The provisions of this section may not be waived except as herein set forth. A waiver or breach of any covenant, condition or provision of this Agreement shall not be deemed a waiver of any other covenant, condition or provision hereof.

5.9 Construction. The section headings and captions used in this Agreement are for convenience of reference only and shall not modify, define, limit or amplify any of the terms or provisions hereof. This Agreement shall not be construed as if it had been prepared by one of the Parties, but rather as if both Parties have prepared it. #5..
- 45 -
2889634.1
Rehabilitation Loan Agreement
City of Modesto
12 5.10 Governing Law. This Agreement shall in all respects be governed by and construed in accordance with the laws of the State of California without regard to principles of conflicts of laws.

5.11 Time of the Essence. Time is of the essence in this Agreement as to each provision in which time is an element of performance.

5.12 Further Assurances. Each Party will, upon reasonable request of the other Party, execute, acknowledge, and deliver, or cause to be executed, acknowledged, and delivered, such further instruments and documents as may be reasonably necessary in order to fulfill the intents and purposes of this Agreement.

5.13 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all which together shall constitute one and the same instrument.

5.14 No Third-Party Claims. Nothing contained in this Agreement shall create or justify any claim against City by any third person whom Borrower may have employed or contracted or may employ or contract relative to the purchase of any material, supplies or equipment, or the furnishing or the performance of any work or services with respect to any programs or projects being undertaken by Borrower.

5.15 Entire Agreement; Exhibits. This Agreement, together with the other Loan Documents, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes any and all prior or contemporaneous oral or written agreements and negotiations between the Parties with respect thereto. Exhibits A through D attached hereto are incorporated herein by reference as though fully set forth herein.

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date set forth above.

BORROWER:

By: _______________________
Christopher Gates
By: _______________________
Stacy Gates
#5..
- 46 -
2889634.1
Rehabilitation Loan Agreement
City of Modesto
13 CITY OF MODESTO,
a municipal corporation
By: ________________________________
JOSEPH P. LOPEZ, City Manager
ATTEST:

By: ______
DANA NAYARES-PEREZ, CMC, City Clerk
(Seal)
APPROVED AS TO FORM:

JOSE M. SANCHEZ, City Attorney
By:

APPROVED AS TO RISK MANAGEMENT:

By: _________________________________
JOE F. RODRIGUEZ, Risk Manager
#5..
- 47 -
2889634.1 Rehabilitation Loan Agreement
City of Modesto
Exhibit A

PROPERTY
Description: Lot 7, in Block 1710 of Springcreek No. 2, as per map filed on March 22, 1977 in Book 26 of Maps, Page 64, Stanislaus County Records. Certificate of Correction recorded March 14, 1978 in Book 3030 of official records, at page 800, as instrument No. 57997, Stanislaus County Records.

APN: 068-004-060
#5..
- 48 -
2889634.1 Rehabilitation Loan Agreement
City of Modesto
Exhibit B
NOTE
(Attach form of promissory note.)
#5..
- 49 -
2889634.1 Rehabilitation Loan Agreement
City of Modesto
Exhibit C

DEED OF TRUST
(Attach form of deed of trust.)
#5..
- 50 -
2889634.1 Rehabilitation Loan Agreement
City of Modesto
Exhibit D

FORM OF REQUISITION
Requisition No. _____
Reference is made to that certain Residential Rehabilitation Loan Agreement, dated as of ___________, 2022 (the “Agreement”), by and between the City of Modesto (the “City”) and Christopher Gates and Stacy Gates (“Borrower”). Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Agreement.

Borrower requests a disbursement of Loan funds in the amount of $___________ for the costs incurred by the Borrower for the Improvements and accompanied by copies of bills and invoices from third parties.

Borrower requests that the disbursement be made directly to the Contractor in accordance with Section 1.11 of the Agreement.

The disbursement of the amount specified above, when added to all previous disbursements of Loan Proceeds, will result in not more than $ _________________ of Loan Proceeds having been used to pay or reimburse the Borrower for costs incurred for installation and construction of the Improvements. The balance of the Loan after disbursement of funds requested pursuant to this requisition is $ .

By: _______________________
Christopher Gates
By: _______________________
Stacy Gates
Approval: City of Modesto
___________________________________________________
By: Jessica Hill, Community Development Manager
2889634.2
#5..
- 51 -

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of Modesto
P.O. Box 642
Modesto, CA 95353
Attn: Community and Economic
Development Department

EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383
Space above this line for Recorder’s use.

APN: 068-004-060

DEED OF TRUST WITH ASSIGNMENT OF RENTS,

SECURITY AGREEMENT AND FIXTURE FILING
This DEED OF TRUST WITH ASSIGNMENT OF RENTS, SECURITY
AGREEMENT AND FIXTURE FILING (this “Deed of Trust”) is made as of _________________, 2022, by Christopher Gates and Stacy Gates, a married couple (the “Trustor”) whose address is 1125 Springcreek Drive , CA 95355 (the “Borrower Address”) to the City of Modesto, a California Charter City, as trustee (the “Trustee”), for the benefit of the City of Modesto, a California charter city (the “Beneficiary”). The Trustor and the Beneficiary are hereinafter collectively referred herein as the “Parties.”

RECITALS
A. The Trustor owns fee simple title to the land described in Exhibit A attached hereto and incorporated herein by this reference (the “Land”).

B. The Beneficiary and the Trustor have entered into a loan agreement dated as of the date hereof (the “Agreement”) pursuant to which the Beneficiary will provide a loan to the Trustor a sum of up to Eighty Thousand Two Hundred Fifty-One Dollars and Zero Cents ($80,251) (the “Loan”) for the purpose of financing a portion of the costs of designing, constructing, and/or installing certain improvements to the Property (the “Project”). The Trustor has issued to the Beneficiary a secured promissory note dated as of the date hereof (the “Note”) to evidence the Trustor’s obligation to repay the Loan. Capitalized terms used herein without definition shall have the meaning ascribed to such terms in the Agreement.

C. As a condition precedent to the making of the Loan, the Beneficiary has required that the Trustor enter into this Deed of Trust and grant to the Trustee for the benefit of the Beneficiary, a first priority lien and security interest in the Property (as hereafter defined) to secure repayment of the Note.
#5..
- 52 -
2890553.2 2
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed as follows.

1. Grant in Trust. Trustor, in consideration of the indebtedness herein recited and the trust herein created, hereby irrevocably and unconditionally grants, transfers, conveys and assigns to Trustee in trust for the benefit of Beneficiary, with power of sale and right of entry and possession, all of Trustor’s right, title and interest now held or hereafter acquired in and to the following: (a) all of that certain real property located at 3028 Snyder Ave Modesto California in the County of Stanislaus and the State of California, which is more particularly described in Exhibit A, attached hereto and incorporated herein by this reference (the “Land”); (b) all buildings, improvements and fixtures now or hereafter erected on the Land and all replacements and additions thereto (“Improvements”); (c) all easements, rights of way, appurtenances and other rights used in connection with the Land or as a means of access thereto (“Appurtenances”); (d) all fixtures now or hereafter attached to or used in and about the Land or the Improvements or hereafter located or constructed on the Land, and all renewals or replacements thereof or articles in substitution therefor, whether or not the same are, or shall be attached to the Improvements in any manner (“Fixtures and Equipment”); and (e) all leases, subleases, licenses and other agreements relating to use or occupancy of the Land (“Leases”) and all rents or other payments which may now or hereafter accrue or otherwise become payable to or for the benefit of Trustor (“Rents”) (whether or not such Leases and Rents are permitted pursuant to the Agreement).

All of the above-referenced Land, Improvements, Appurtenances, Fixtures and Equipment, Leases and Rents are herein referred to collectively as the “Property.”

2. Obligations Secured. This Deed of Trust is given for the purpose of securing payment and performance of all of the following (the “Secured Obligations”): (i) all present and future indebtedness evidenced by the Note (including all principal and all other amounts payable pursuant to the Note) and all amendments, modifications, extensions and renewals of the Note; (ii) all present and future obligations of Trustor set forth in this Deed of Trust or in the Agreement; (iii) all additional present and future obligations of Trustor to Beneficiary under any other agreement or instrument acknowledged by Trustor (whether existing now or in the future) which states that it is or such obligations are, secured by this Deed of Trust; (iv) all modifications, supplements, amendments, renewals, and extensions of any of the foregoing, whether evidenced by new or additional documents; and (v) reimbursement of all amounts advanced by or on behalf of Beneficiary to protect Beneficiary’s interests under this Deed of Trust.

3. Assignment of Rents, Issues, and Profits. Trustor hereby irrevocably, absolutely, presently and unconditionally assigns to Beneficiary the rents, royalties, issues, profits, revenue, income and proceeds of the Property. This is an absolute assignment and not an assignment for security only. Subject to the prohibition on the lease or rental of the Property as set forth in the Agreement, Beneficiary hereby confers upon Trustor a license to collect and retain such rents, royalties, issues, profits, revenue, income and proceeds as they become due and payable prior to any Event of Default hereunder. #5..
- 53 -
2890553.2 3
Upon the occurrence of any such Event of Default, Beneficiary may terminate such license without notice to or demand upon Trustor and without regard to the adequacy of any security for the indebtedness hereby secured, and may either in person, by agent, or by a receiver to be appointed by a court, enter upon and take possession of the Property or any part thereof, and sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorneys’ fees, to any indebtedness secured hereby, and in such order as Beneficiary may determine.

Beneficiary’s right to the rents, royalties, issues, profits, revenue, income and proceeds of the Property does not depend upon whether or not Beneficiary takes possession of the Property. The entering upon and taking possession of the Property, the collection of such rents, issues, and profits, and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. If an Event of Default occurs while Beneficiary is in possession of all or part of the Property and/or is collecting and applying Rents as permitted under this Deed of Trust, Beneficiary, Trustee and any receiver shall nevertheless be entitled to exercise and invoke every right and remedy afforded any of them under this Deed of Trust and at law or in equity, including the right to exercise the power of sale granted hereunder. Regardless of whether or not Beneficiary, in person or by agent, takes actual possession of the Land and Improvements, Beneficiary shall not be deemed to be a “mortgagee in possession,” shall not be responsible for performing any obligation of the lessor under any Lease, shall not be liable in any manner for the Property, or the use, occupancy, enjoyment or operation of any part of it , and unless due solely to the willful misconduct or gross negligence of Beneficiary, shall not be responsible for any dangerous or defective condition of the Property or any negligence in the management, repair or control of the Property.

4. Fixture Filing. This Deed of Trust is intended to be and constitutes a fixture filing pursuant to the provisions of the Uniform Commercial Code (“UCC”) with respect to all of the Property constituting fixtures, is being recorded as a fixture financing statement and filing under the UCC, and covers property, goods and equipment which are or are to become fixtures related to the Land and the Improvements. Trustor covenants and agrees that this Deed of Trust is to be filed in the real estate records of Stanislaus County and shall also operate from the date of such filing as a fixture filing in accordance with Section 9502 and other applicable provisions of the UCC. This Deed of Trust shall also be effective as a financing statement covering minerals or the like (including oil and gas) and accounts subject to the UCC, as amended. Trustor shall be deemed to be the "debtor" and Beneficiary shall be deemed to be the "secured party" for all purposes under the UCC. The full name of Trustor and the mailing address of Trustor are set forth in Section 7.6 of this Deed of Trust. #5..
- 54 -
2890553.2 4

5. Trustor’s Representations, Warranties and Covenants; Rights and Duties of the Parties.

5.1. Trustor’s Estate. Trustor represents and covenants that Trustor is lawfully seized of the estate hereby conveyed and has the right to grant and convey the Property.

5.2 Payment and Performance of Secured Obligations. Trustor will promptly pay and perform all obligations of the Trustor arising in connection with the Secured Obligations in accordance with the respective terms thereof.

5.3 Performance of Covenants. Trustor will observe and perform all of Trustor’s covenants and agreements set forth in the Agreement, the Note, this Deed of Trust and all other instruments secured by the Property.

5.4 Use of Loan Proceeds; Maintenance of the Property. Trustor covenants that it shall use the Loan Proceeds solely for the purpose of financing the Project in accordance with the Agreement. Trustor agrees (a) to keep the Property in good repair and in decent, safe, sanitary, tenantable condition and repair and permit no waste thereof; (b) not to commit or suffer to be done or exist on or about the Land any condition causing the Property to become less valuable; (c) to repair, restore or rebuild promptly any buildings or improvements on the Land that may become damaged or be destroyed while subject to the lien of this Deed of Trust; (d) to comply with all applicable laws, ordinances and governmental regulations affecting the Property or requiring any alteration or improvement thereof, and not to suffer or permit any violations of any such law, ordinance or governmental regulation, nor of any covenant, condition or restriction affecting the Property; and (e) not to initiate or acquiesce in any change in any zoning or other land use or legal classification which affects any of the Property without the Beneficiary’s written consent. If there arises a condition in contravention of this Section, and if the Trustor has not cured such condition within thirty (30) days after receiving a Beneficiary notice of such a condition, then in addition to any other rights available to the Beneficiary, the Beneficiary shall have the right (but not the obligation) to perform all acts necessary to cure such condition, and to establish or enforce a lien or other encumbrance against the Property to recover its cost of cure.

5.5 Appear and Defend. Trustor shall appear in and defend any action or proceeding purporting to affect the Property or the rights or powers of the Beneficiary or Trustee, and shall pay all costs and expenses, including cost of evidence of title and attorney’s fees in a reasonable sum, in any such action or proceeding in which the Beneficiary or Trustee may appear, and in any suit brought by the Beneficiary to foreclose this Deed of Trust.

5.6 Charges; Liens. Trustor shall pay prior to delinquency all taxes, assessments, and other charges, fines, and impositions affecting the Property directly to the payee thereof. Upon request of Beneficiary, Trustor shall promptly furnish to Beneficiary copies of all notices of such amounts due and shall promptly furnish to #5..
- 55 -
2890553.2 5
Beneficiary receipts evidencing all such payments made. Trustor shall pay when due each obligation secured by or reducible to a lien, charge or encumbrance which now does or later may encumber or appear to encumber all or part of the Property or any interest therein, whether or not such lien, charge or encumbrance is or would be senior or subordinate to this Deed of Trust. Trustor shall not be required to pay any tax, charge or assessment so long as Trustor is actively contesting its validity in good faith and by appropriate legal proceedings which will operate to prevent the enforcement of the lien or forfeiture of the Property or any part thereof. Trustor shall post security for the payment of such contested claims as may be requested by the Beneficiary.

5.7 Insurance. Trustor shall keep the Property insured by a standard all-risk property insurance policy in an amount equal to the replacement value of the Property with loss payable to the Beneficiary. The insurance carrier providing such insurance shall be licensed to do business in the State of California and may be chosen by Trustor, subject to approval by Beneficiary. All insurance policies and renewals thereof will be in a form acceptable to the Beneficiary, and will include a standard mortgagee clause with standard lender's endorsement in favor of the holder of any senior lien and the Beneficiary as their interests may appear and in a form acceptable to the Beneficiary. The Beneficiary shall have the right to hold, or cause its designated agent to hold, the policies and renewals thereof, and Trustor shall promptly furnish to the Beneficiary, or its designated agent, the original insurance policies or certificates of insurance, all renewal notices and all receipts of paid premiums. In the event of loss, Trustor will give prompt notice to the insurance carrier and the Beneficiary or its designated agent. The Beneficiary, or its designated agent, may make proof of loss if not made promptly by Trustor. The Beneficiary shall receive thirty (30) days advance written notice of the cancellation, expiration or termination or any material change in the coverage afforded by any of the insurance policies required under this Section.

Unless otherwise permitted by the Beneficiary in writing, insurance proceeds, subject to the rights of the holder of any senior lien, will be applied to restoration or repair of the Property damaged. If the Property is abandoned by Trustor, or if Trustor fails to respond to the Beneficiary, or its designated agent, within thirty (30) days from the date notice is mailed by either of them to Trustor that the insurance carrier offers to settle a claim for insurance benefits, the Beneficiary, or its designated agent, is authorized to collect and apply the insurance proceeds at the Beneficiary's option either to restoration or repair of the Property or to pay amounts due under the Agreement and the Note.

If the Property is acquired by the Beneficiary, all right, title and interest of Trustor in and to any insurance policy and in and to the proceeds thereof resulting from damage to the Property prior to the sale or acquisition will pass to the Beneficiary to the extent of the sums secured by this Deed of Trust immediately prior to such sale or acquisition, subject to the rights of the holder of any senior lien.

Renewal policies and any replacement policies, together with premium receipts satisfactory to the Beneficiary, shall be delivered to the Beneficiary at least thirty (30) #5..
- 56 -
2890553.2 6
days prior to the expiration of existing policies. Neither Trustee nor the Beneficiary shall by reason of accepting, rejecting, approving or obtaining insurance incur any liability for the existence, nonexistence, form or legal sufficiency of such insurance, or solvency of any insurer for payment of losses.

5.8 Use of Property. Trustor shall not permit or suffer the use of any of the Property for any purpose other than as a single-family residential dwelling.

5.9 Protection of Beneficiary’s Security. If Trustor fails to perform the covenants and agreements contained in this Deed of Trust, or if any action or proceeding is commenced which materially affects Beneficiary’s interest in the Property, including, but not limited to, eminent domain, insolvency, code enforcement, arrangements or proceedings involving a bankrupt or decedent, foreclosure of any mortgage secured by the Property or sale of the Property under a power of sale of any instrument secured by the Property, then Beneficiary, at Beneficiary’s option, upon notice to Trustor, may make such appearance, disburse such sums and take such action as is necessary to protect Beneficiary’s interest, including, but not limited to, the purchase of insurance, disbursement of reasonable attorney’s fees and entry upon the Property to make repairs. Any amounts disbursed by Beneficiary pursuant to this Section, with interest thereon, shall become additional indebtedness of Trustor secured by this Deed of Trust. Unless Trustor and Beneficiary agree to other terms of payment, such amounts shall be payable upon notice from Beneficiary to Trustor requesting payment thereof, and shall bear interest from the date of disbursement at the highest rate permissible under applicable law. Nothing contained in this Section shall require Beneficiary to incur any expense or take any action hereunder.

5.10 Inspection. Beneficiary or its agent may make or cause to be made reasonable entries upon and inspections of the Property. Beneficiary shall give Trustor notice at the time of or prior to any such inspection specifying reasonable cause for the inspection

5.11 Awards and Damages. All judgments, awards of damages, settlements and compensation made in connection with or in lieu of (a) taking of all or any part of or any interest in the Property by or under assertion of the power of eminent domain, (b) any damage to or destruction of the Property or any part thereof by insured casualty, and (c) any other injury or damage to all or any part of the Property, are hereby assigned to and shall be paid to the Beneficiary. The Beneficiary is authorized and empowered (but not required) to collect and receive any such sums and is authorized to apply them in whole or in part upon any indebtedness or obligation secured hereby, in such order and manner as the Beneficiary shall determine at its option. The Beneficiary shall be entitled to settle and adjust all claims under insurance policies provided under this Deed of Trust and may deduct and retain from the proceeds of such insurance the amount of all expenses incurred by it in connection with any such settlement or adjustment. All or any part of the amounts so collected and recovered by the Beneficiary may be released to Trustor upon such conditions as the Beneficiary may impose for its disposition. Application of all or any part of the amounts collected and #5..
- 57 -
2890553.2 7
received by the Beneficiary or the release thereof shall not cure or waive any default under this Deed of Trust. If the Property is abandoned by Trustor, or if, after notice by Beneficiary to Trustor that the condemnor offers to make an award or settle a claim for damages, Trustor fails to respond to Beneficiary within thirty (30) days after the date such notice is mailed, Beneficiary is authorized to collect and apply the proceeds, at Beneficiary’s option, either to restoration or repair of the Property or to the sum secured by this Deed of Trust.

5.12 Prohibition on Transfers of Interest. If all or any part of the Property or an interest therein is sold or transferred by Trustor without Beneficiary’s prior written consent, Beneficiary may, at Beneficiary’s option, declare all sums secured by this Deed of Trust to be immediately due and payable.

5.13 Sale or Forbearance. No sale of the Property, forbearance on the part of Beneficiary or extension of the time for payment of the indebtedness hereby secured shall operate to release, discharge, waive, modify, change or affect the liability of Trustor either in whole or in part.

5.14 Beneficiary’s Rights to Release. Without affecting the liability of any person for payment of any indebtedness hereby secured (other than any person released pursuant hereto), including without limitation any one or more endorsers or guarantors, and without affecting the lien hereof upon any of the Property not released pursuant hereto, at any time and from time to time without notice: (a) Beneficiary may in its sole discretion: (i) release any person now or hereafter liable for payment of any or all such indebtedness, (iii) extend the time for or agree to alter the terms of payment of any or all of such indebtedness, and (iii) release or accept additional security for such indebtedness, or subordinate the lien or charge hereof; and (b) Trustee, acting pursuant to the written request of the Beneficiary, may reconvey all or any part of the Property, consent to the making of any map or plot of the Land, join in granting any assessment thereon, or join in any such agreement of extension or subordination.

5.15 Reconveyance. Upon payment of all sums and satisfaction of all obligations secured by this Deed of Trust, Beneficiary shall request Trustee to reconvey the Property and shall surrender this Deed of Trust and all notes evidencing indebtedness secured by this Deed of Trust to Trustee. Trustee shall reconvey the Property without warranty and without charge to the person or persons legally entitled thereto. Such person or persons shall pay all costs of recordation, if any. The recitals in the reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof.

5.16 Notice of Claims; Reimbursement of Costs.
(a) Notice of Claims. The Trustor shall provide written notice to Beneficiary of any uninsured or partially uninsured loss affecting the Property through fire, theft, liability, or property damage in excess of an aggregate of Ten Thousand Dollars ($10,000) within three business days of the occurrence of such loss. The Trustor shall #5..
- 58 -
2890553.2 8
ensure that the Beneficiary shall receive timely notice of, and shall have a right to cure, any default under any other financing document or other lien affecting the Property and shall use best efforts to ensure that provisions mandating such notice and allowing such right to cure shall be included in all such documents. Within three business days of the Trustor’s receipt thereof, the Trustor shall provide the Beneficiary with a copy of any notice of default the Trustor receives in connection with any financing document secured by the Property or any part thereof.
(b) Compensation; Reimbursement of Costs. The Trustor agrees to pay all reasonable fees, costs and expenses charged by the Beneficiary or the Trustee for any service that the Beneficiary or the Trustee may render in connection with this Deed of Trust, including without limitation, fees and expenses related to provision of a statement of obligations or related to a reconveyance. The Trustor further agrees to pay or reimburse the Beneficiary for all costs, expenses and other advances which may be incurred or made by the Beneficiary or Trustee in any efforts to enforce any terms of this Deed of Trust, including any rights or remedies afforded to the Beneficiary or the Trustee or both of them under Section 7.2, whether or not any lawsuit is filed, or in defending any action or proceeding arising under or relating to this Deed of Trust, including reasonable attorneys’ fees and other legal costs, costs of any disposition of the Property under the power of sale granted hereunder or any judicial foreclosure, and any cost of evidence of title.

5.17 Indemnification. Trustor agrees to indemnify, defend (with counsel approved by Beneficiary) and hold the Beneficiary, its elected and appointed officers, officials, agents and employees (“Indemnitees”) harmless from and against any and all losses, damages, claims, actions, demands, judgments, penalties, costs and expenses (including reasonable attorneys’ fees) and liabilities (all of the foregoing, collectively “Claims”) which the Indemnitees may sustain or suffer directly or indirectly as a result of or arising in connection with (i) Trustor’s failure to perform any obligations as and when required by the Note, the Agreement, or this Deed of Trust, (ii) the failure at any time of any of Trustor’s representations and warranties made in connection with the Loan to be true and correct, or (iii) any action or omission by Indemnitees in connection with this Deed of Trust, except to the extent any such Claim arises due to the gross negligence or willful misconduct of Indemnitees.

6. Events of Default; Remedies

6.1 Events of Default. Any one or more of the following events shall constitute a default under this Deed of Trust (“Event of Default”):
(a) Failure of the Trustor to pay the indebtedness secured hereby or any installment thereof when and as the same become due and payable, whether at maturity or by acceleration or otherwise; (b) Failure of Trustor to timely observe or to perform any covenant condition or agreement to be observed or performed by Trustor #5..
- 59 -
2890553.2 9
pursuant to the Agreement, the Note or this Deed of Trust; (c) The occurrence of any event of default which, under the terms of the Agreement or the Note, shall entitle the Beneficiary to exercise the rights or remedies thereunder;
(d) Failure of Trustor to perform any monetary obligation which arises under this Deed of Trust, and does not cure that failure within ten (10) days following written notice from Beneficiary or Trustee; (e) If Trustor’s interest in the Property or any part thereof is voluntarily or involuntarily sold, transferred, leased, encumbered, or otherwise conveyed in violation of Section 5.12 hereof or if any other transfer occurs in violation of the Agreement;
(f) Failure of Trustor to pay taxes or assessments due on the Land or the Improvements or failure to pay any other charge that may result in a lien on the Land or the Improvements, and Trustor fails to cure such default within 15 days;
(g) Failure of Trustor to maintain the insurance coverage required under the Agreement and Trustor fails to cure such default within 60 days;
(h) If, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (“Bankruptcy Law”), Borrower (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Borrower in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Borrower; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due.
(i) If an event of default has been declared by the holder of any debt instrument secured by a mortgage or deed of trust on Borrower’s interest in the Property and such holder exercises a right to declare all amounts due under that debt instrument immediately due and payable, subject to the expiration of any applicable cure period set forth in such holder’s documents.
(j) Failure of Trustor to perform any obligation arising under this Deed of Trust other than one enumerated in this Section 6.1 and does not cure that failure either within ten (10) days ("Initial Cure Period") after written notice from Beneficiary or Trustee in the event of a monetary default, or within thirty (30) days after such written notice #5..
- 60 -
2890553.2 10
in the event of a nonmonetary default (or such longer time as Beneficiary may agree upon in writing), provided that Trustor commences to cure the default within the Initial Cure Period and thereafter prosecutes such cure with due diligence and in good faith and Beneficiary in the exercise of reasonable judgment determines that a cure cannot reasonably be completed prior to expiration of the Initial Cure Period.

6.2 Remedies. Subject to the applicable notice and cure provisions set forth herein, at any time after an Event of Default, the Beneficiary and the Trustee shall be entitled to invoke any and all of the rights and remedies described below, and may exercise any one or more or all, of the remedies set forth in the Agreement, and any other remedy existing at law or in equity or by statute. All of the Beneficiary’s rights and remedies shall be cumulative, and the exercise of any one or more of them shall not constitute an election of remedies. The Beneficiary shall be entitled to collect all expenses incurred in pursuing the remedies provided hereunder, including without limitation reasonable attorneys’ fees and costs of title evidence. (a) Acceleration. The Beneficiary may declare any or all of the Secured Obligations to be due and payable immediately.
(b) Receiver. The Beneficiary may apply to any court of competent jurisdiction for, and obtain appointment of, a receiver for the Property. (c) Entry. The Beneficiary, in person, by agent or by court-appointed receiver, may enter, take possession of, manage and operate all or any part of the Property, and may also do any and all other things in connection with those actions that the Beneficiary may in its sole discretion consider necessary and appropriate to protect the security of this Deed of Trust. Such other things may include: taking and possessing copies of all of the Trustor's or the then owner's books and records concerning the Property; entering into, enforcing, modifying, or canceling Leases on such terms and conditions as the Beneficiary may consider proper; obtaining and evicting tenants; fixing or modifying Rents; collecting and receiving any payment of money owing to the Trustor; completing any unfinished construction; and/or contracting for and making repairs and alterations. If the Beneficiary so requests, the Trustor shall assemble all of the Property that has been removed from the Land and make all of it available to the Beneficiary at the site of the Land. The Trustor hereby irrevocably constitutes and appoints the Beneficiary as the Trustor's attorney- in-fact to perform such acts and execute such documents as the Beneficiary in its sole discretion may consider to be appropriate in connection with taking these measures, including endorsement of the Trustor's name on any instruments. Regardless of any provision of this Deed of Trust, the Beneficiary shall not be considered to have accepted any property other than cash or immediately available funds in satisfaction of any obligation of the Trustor to the Beneficiary, unless the Beneficiary has given express written notice of the Beneficiary's election of that remedy in accordance with UCC Section 9621, as it may be amended or recodified from time to time.
#5..
- 61 -
2890553.2 11
(d) Cure; Protection of Security. Either the Beneficiary or the Trustee may cure any breach or default of the Trustor, and if it chooses to do so in connection with any such cure, the Beneficiary or the Trustee may also enter the Property and/or do any and all other things which it may in its sole discretion consider necessary and appropriate to protect the security of this Deed of Trust. Such other things may include:
appearing in and/or defending any action or proceeding which purports to affect the security of, or the rights or powers of the Beneficiary or the Trustee under, this Deed of Trust; paying, purchasing, contesting or compromising any encumbrance, charge, lien or claim of lien which in the Beneficiary's or the Trustee's sole judgment is or may be senior in priority to this Deed of Trust, such judgment of the Beneficiary or the Trustee to be conclusive as among the Beneficiary, the Trustee and the Trustor; obtaining insurance and/or paying any premiums or charges for insurance required to be carried hereunder; otherwise caring for and protecting any and all of the Property; and/or employing counsel, accountants, contractors and other appropriate persons to assist the Beneficiary or the Trustee. The Beneficiary and the Trustee may take any of the actions permitted under this Subsection 7.2(d) either with or without giving notice to any person, except for notices required under applicable law. Any amounts disbursed by the Beneficiary pursuant to this paragraph shall become additional indebtedness secured by this Deed of Trust.
(e) UCC Remedies. The Beneficiary may exercise any or all of the remedies granted to a secured party under the UCC.
(f) Judicial Action. The Beneficiary may bring an action in any court of competent jurisdiction to foreclose this Deed of Trust in the manner provided by law for foreclosure of mortgages on real property and/or to obtain specific enforcement of any of the covenants or agreements of this Deed of Trust.
(g) Power of Sale. Under the power of sale hereby granted, the Beneficiary shall have the discretionary right to cause some or all of the Property, including any Property which constitutes personal property, to be sold or otherwise disposed of in any combination and in any manner permitted by applicable law.

6.3 Power of Sale. If the Beneficiary elects to invoke the power of sale hereby granted, the Beneficiary shall execute or cause the Trustee to execute a written notice of such default and of its election to cause the Property to be sold to satisfy the obligations hereof, and shall cause such notice to be recorded in the office of the Recorder of each County wherein the Property or some part thereof is situated.

Prior to publication of the notice of sale, the Beneficiary shall deliver to the Trustee this Deed of Trust and the Note or other evidence of indebtedness which is secured hereby, together with a written request for the Trustee to proceed with a sale of the Property, pursuant to the provisions of law and this Deed of Trust. #5..
- 62 -
2890553.2 12
Notice of sale having been given as then required by law, and not less than the time then required by law having elapsed after recordation of such notice of default, the Trustee, without demand on the Trustor, shall sell the Property at the time and place fixed by it in the notice of sale, either as a whole or in separate parcels and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. The Trustee may, and at the Beneficiary’s request shall, postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time and place fixed by the preceding postponement. The Trustee shall deliver to the purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including the Trustor, the Trustee, or the Beneficiary, may purchase at such sale.

After deducting all costs, fees, and expenses of the Trustee and of the trust hereby created, including reasonable attorneys’ fees in connection with sale, the Trustee shall apply the proceeds of sale to payment of all sums advanced or expended by the Beneficiary or the Trustee under the terms hereof and all outstanding sums then secured hereby, and the remainder, if any, to the person or persons legally entitled thereto.

6.4 Trustee Substitution. The irrevocable power to appoint a substitute trustee or trustees hereunder is hereby expressly granted to the Beneficiary, to be exercised at any time hereafter, without specifying any reason therefor, by filing for record in the office where this Deed of Trust is recorded a deed of appointment, and said power of appointment of successor trustee or trustees may be exercised as often as and whenever the Beneficiary deems advisable. The exercise of said power of appointment, no matter how often, shall not be deemed an exhaustion thereof, and upon recording of such deed or deeds of appointment, the trustee or trustees so appointed shall thereupon, without further act or deed of conveyance, succeed to and become fully vested with identically the same title and estate in and to the Property hereby conveyed and with all the rights, powers, trusts and duties of the predecessor in the trust hereunder, with the like effect as if originally named as trustee or as one of the trustees.

6.5 Trustor's Waivers. To the fullest extent permitted by law, the Trustor waives: (a) all statutes of limitations as a defense to any action or proceeding brought against the Trustor by the Beneficiary; (b) the benefit of all laws now existing or which may hereafter be enacted providing for any appraisement, valuation, stay, extension, redemption or moratorium; (c) all rights of marshalling in the event of foreclosure; and (d) all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, notices of acceptance of this Deed of Trust and of the existence, creation, or incurring of new or additional indebtedness, and demands and notices of every kind.
#5..
- 63 -
2890553.2 13

7. Miscellaneous Provisions.

7.1 Successors and Assigns. The covenants and agreements contained in this Deed of Trust shall bind, and the benefit and advantages hereunder shall inure to, the respective heirs, executors, administrators, successors and assigns of the parties; provided however, nothing in this Section is intended to or shall modify any restrictions on assignment set forth herein or in the Note or Agreement. As used herein, the words “the Beneficiary” means the present Beneficiary or any future owner or holder, including a pledgee of the indebtedness secured hereby.

7.2 Headings; Gender, Number. The captions and headings used in this Deed of Trust are inserted only for convenience of reference and in no way define, limit, or describe the scope or intent of this Deed of Trust, or of any particular provision thereof, or the proper construction thereof. Wherever used, the singular number shall include the plural, and the plural the singular, and the use of any gender shall be applicable to all genders.

7.3 Approvals in Writing. Except as otherwise specifically provided herein, whenever any approval, notice, direction, consent, request or other action by the Beneficiary is required or permitted under this Deed of Trust, such action shall be in writing.

7.4 Joint and Several Obligations. If more than one person has executed this Deed of Trust as Trustor, the obligations of all such persons hereunder shall be joint and several.

7.5 Severability. If any provision of this Deed of Trust shall be held by a court of competent jurisdiction to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby.

7.6 Notices. Except for any notice required under applicable law to be given in another manner (a) any notice to Trustor provided for in this Deed of Trust shall be given by mailing such notice by certified mail directed to the Property address or any other address Trustor designates by notice to Beneficiary as provided herein; and, (b) any notice to Beneficiary shall be given by certified mail, return receipt requested, to Beneficiary’s mailing address stated herein or to such other address as Beneficiary may designate by notice to Trustor as provided herein. Any notice provided for in this Deed of Trust shall deem to have been given to Trustor or Beneficiary when given in the manner designated herein.

Beneficiary: City of Modesto
P.O. Box 642
Modesto, CA 95353
Attn: Community and Economic Development Dept.
#5..
- 64 -
2890553.2 14
Trustor: Christopher Gates
Stacy Gates
1125 Springcreek Drive
Modesto, CA 95355

7.7 Waiver, Modification and Amendment. Each waiver by the Beneficiary or the Trustee must be in writing, and no waiver shall be construed as a continuing waiver.

No waiver shall be implied from any delay or failure by the Beneficiary or the Trustee to take action on account of any default of the Trustor. Consent by the Beneficiary or the Trustee to any act or omission by the Trustor shall not be construed as a consent to any other or subsequent act or omission or to waive the requirement for the Beneficiary's or the Trustee's consent to be obtained in any future or other instance. No amendment to or modification of this Deed of Trust shall be effective unless and until such amendment or modification is in writing, executed by the Trustor and the Beneficiary. Without limiting the generality of the foregoing, the Beneficiary’s acceptance of payment of any sum secured hereby after its due date shall not constitute a waiver by the Beneficiary of its right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay.

7.8 Governing Law. This Deed of Trust shall be governed by the laws of the State of California without regard to principles of conflicts of laws. The Trustor agrees that any controversy arising under or in relation to this Deed of Trust shall be litigated exclusively in Stanislaus County.

IN WITNESS WHEREOF, the Trustor has executed this Deed of Trust as of the date first written above.

TRUSTOR
By: _______________________
Christopher Gates
By: _______________________
Stacy Gates
#5..
- 65 -
2890553.2 15
SIGNATURES MUST BE NOTARIZED.
#5..
- 66 -
2890553.2 16

ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

State of California )
County of Stanislaus )
On_____________ before me, _____________________________, Notary Public, , personally appeared, ___________________________________, who proved to me the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature_____________________________
#5..
- 67 -
2890553.2 17
Exhibit A
LAND
Description: Lot 7, in Block 1710 of Springcreek No. 2, as per map filed on March 22, 1977 in Book 26 of Maps, Page 64, Stanislaus County Records. Certificate of Correction recorded March 14, 1978 in Book 3030 of official records, at page 800, as instrument No. 57997, Stanislaus County Records.

APN: 068-004-060
#5..
- 68 -
2890547.1 1

SECURED PROMISSORY NOTE
City of Modesto
Residential Rehabilitation Loan Program
Loan No. ____________ 1125 Springcreek Drive
Modesto, California
$80,251 _____________, 2022
FOR VALUE RECEIVED, the undersigned, Christopher Gates and Stacy Gates, a married couple (“Borrower”), promises to pay to the City of Modesto, a California charter City (“City”), in lawful money of the United States, the principal sum of Eighty Thousand Two Hundred Fifty-One Dollars and Zero Cents ($80,251) or so much thereof as may be advanced by City pursuant to the Loan Agreement referred to below, in accordance with the terms and conditions described herein.

This Promissory Note (this “Note”) has been executed and delivered pursuant to and in accordance with the terms and conditions of a Residential Rehabilitation Loan and Grant Agreement dated as of the date hereof by and between Borrower and City (the “Loan Agreement”). This Note is subject to the terms and conditions of the Loan Agreement, which is by this reference incorporated herein and made a part hereof.

Capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Loan Agreement.

This Note is secured by that certain Deed of Trust (the “Deed of Trust”) dated as of the date hereof, executed by Borrower and recorded against the Property in the Official Records of Stanislaus County.

1. PAYMENTS

1.1 TERM. Commencing on ___________, 2022 and continuing every month through ________________ (the “Maturity Date”), Borrower agrees to a deferred loan for 20 years at three percent interest. The entire outstanding principal balance of this Amended and Restated Note, and all other sums due hereunder, is due and payable in full on the earlier of the Maturity date or upon the occurrence of an Event of Default as defined in the Agreement.

1.2 INTEREST RATE. Commencing on the date of initial disbursement of the proceeds of the Loan and continuing through the date that all indebtedness and other amounts payable under the Loan Agreement and this Note are paid in full, interest on the Loan shall accrue at the rate of three percent (3%) per annum on the unpaid principal outstanding from time to time.

1.3 PREPAYMENT. Borrower may, without premium or penalty, at any time and from time to time, prepay all or any portion of the outstanding principal balance due under this Note. Prepayments shall be applied first to any unpaid late charges and other costs and fees then due and then to principal. In no event shall any amount due #5..
- 69 -
2890547.1 2
under this Note become subject to any rights of offset, deduction or counterclaim on the part of Borrower.

1.4 MANNER OF PAYMENT. All payments on this Note shall be made to City at P.O. Box 642, Modesto, CA 95353, or such other place as City shall designate to Borrower in writing, or by wire transfer of immediately available funds to an account designated by City in writing.

2. DEFAULTS

2.1 EVENTS OF DEFAULT. The occurrence of any one or more of the following events shall constitute an event of default hereunder (“Event of Default”):
(a) If Borrower fails to pay when due the principal and interest payable under this Note and such failure continues for ten (10) calendar days after City notifies Borrower thereof in writing.
(b) If any representation or warranty contained in the Loan and Grant Documents or any certificate furnished in connection with the foregoing or in connection with any request for disbursement of Loan Proceeds proves to have been false or misleading in any material adverse respect when made.
(c) Borrower fails to commence and complete construction and/or installation of the Improvements in accordance with Section 2.1 of the Loan Agreement. (d) If an Event of Default shall have been declared under any other Loan and Grant Document, subject to the expiration of any applicable cure period set forth in such documents.
(e) If, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (“Bankruptcy Law”), Borrower (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Borrower in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Borrower; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due.
(f) If an event of default has been declared by the holder of any debt instrument secured by a mortgage or deed of trust on the Improvements or Borrower’s interest in the Property and such holder exercises a right to declare all amounts due under that debt instrument immediately due and payable, subject to the expiration of any applicable cure period set forth in such holder’s documents. (g) If the Borrower fails to maintain insurance on the Property as required pursuant to the Loan and Grant Documents, and Borrower fails to cure such default within 60 days.
#5..
- 70 -
2890547.1 3
(h) Borrower, or Borrower’s heir ceases to occupy the Property as Borrower’s Principal Residence in accordance with Section 3.5 of the Loan Agreement. (i) Borrower defaults in the performance of any term, provision, covenant or agreement (other than an obligation enumerated in this Section 4.1) contained in the Loan Agreement or unless a shorter cure period for such default is specified herein, the default continues for ten (10) days in the event of a monetary default or thirty (30) days in the event of a nonmonetary default after the date upon which City shall have given written notice of the default to Borrower (or such longer time as City may agree upon in writing), provided that in each case Borrower commences to cure the default within thirty (30) days and thereafter prosecutes the curing of such default with due diligence and in good faith.

2.2 REMEDIES. Upon the occurrence of an Event of Default hereunder, City may, at its option (i) by written notice to Borrower, declare the entire unpaid principal balance of this Note and all sums due hereunder, immediately due and payable regardless of any prior forbearance, (ii) foreclose on the Property, (iii) exercise any and all rights and remedies available to it under applicable law, and (iv) exercise any and all rights and remedies available to City under this Note, the Deed of Trust and the Loan Agreement. Borrower shall pay all reasonable costs and expenses incurred by or on behalf of City including, without limitation, reasonable attorneys' fees, incurred in connection with City's enforcement of this Note and the exercise of any or all of its rights and remedies hereunder.

3. MISCELLANEOUS

3.1 WAIVER. The rights and remedies of City under this Note shall be cumulative and not alternative. No waiver by City of any right or remedy under this Note shall be effective unless in writing signed by City. Neither the failure nor any delay in exercising any right, power or privilege under this Note will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege by City will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. To the maximum extent permitted by applicable law (a) no claim or right of City arising out of this Note can be discharged by City, in whole or in part, by a waiver or renunciation of the claim or right unless in a writing, signed by City; (b) no waiver that may be given by City will be applicable except in the specific instance for which it is given; and (c) no notice to or demand on Borrower will be deemed to be a waiver of any obligation of Borrower or of the right of City to take further action without notice or demand as provided in this Note. Borrower hereby waives presentment, demand, protest, notices of dishonor and of protest and all defenses and pleas on the grounds of any extension or extensions of the time of payment or of any due date under this Note, in whole or in part, whether before or after maturity and with or without notice.

3.2 NOTICES. Any notice required or permitted to be given hereunder shall be given in accordance with Section 5.1 of the Loan Agreement. #5..
- 71 -
2890547.1 4

3.3 SEVERABILITY. If any provision in this Note is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Note will remain in full force and effect. Any provision of this Note held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

3.4 GOVERNING LAW; VENUE. This Note shall be governed by the laws of the State of California without regard to principles of conflicts of laws. Venue shall be Stanislaus County, California.

3.5 PARTIES IN INTEREST. This Note shall bind Borrower and its successors and assigns and shall accrue to the benefit of City and its successors and assigns.

3.6 SECTION HEADINGS, CONSTRUCTION. The headings of Sections in this Note are provided for convenience only and will not affect its construction or interpretation.

3.7 RELATIONSHIP OF THE PARTIES. The relationship of Borrower and City under this Note is solely that of borrower and lender, and the loan evidenced by this Note will in no manner make City the partner or joint venturer of Borrower.

3.8 TIME IS OF THE ESSENCE. Time is of the essence with respect to every provision of this Note.

3.9. JOINT AND SEVERAL OBLIGATIONS If this Note is executed by more than one person as Borrower, the obligations of each shall be joint and several.

3.10 ASSIGNMENT BY LENDER; SUCCESSORS AND ASSIGNS. City may assign its rights to receive the proceeds under this Note to any person, and upon notice to Borrower of such assignment, all payments shall be made to the assignee. The promises and agreements herein contained shall bind and inure to the benefit of, as applicable, the respective heirs, executors, administrators, successors and assigns of the parties; provided however, Borrower may not assign this Note without City’s written consent except in accordance with the Loan Agreement and the Deed of Trust.

Executed as of the date first written above.

BORROWER
____________________________
Christopher Gates
____________________________
Stacy Gates
#5..
- 72 -
Rehabilitation Grant Agreement
City of Modesto

RESIDENTIAL REHABILITATION GRANT AGREEMENT
This Residential Rehabilitation Grant Agreement (this “Agreement”) is entered into as of this____________, 2022, ("Effective Date") by and between the City of Modesto, a California charter city (the “City”) and Christopher Gates and Stacy Gates, a married couple (the “Owner”). Owner and City are collectively referred to as the "Parties"

RECITALS
WHEREAS, to further its goal of improving and preserving housing for low- and moderate-income households, the City has authorized the Residential Rehabilitation Grant Program (the “Program”) pursuant to which the City provides financial assistance to owner-occupants of single-family homes to undertake needed repairs and improvements; and
WHEREAS, Owner is the owner of that certain real property located at 1125 Springcreek Drive in the City of Modesto, California (“Property”) as more particularly described in Exhibit A attached hereto and incorporated herein by this reference.

WHEREAS, Owner has requested, and City has agreed, to provide a grant in the amount of Ten Thousand Dollars and Zero Cents ($10,000) (the “Grant”) pursuant to the terms and conditions hereof for the purpose of financing a portion of the costs of designing, constructing, and/or installing the improvements to the Property (the “Improvements”).

WHEREAS, the City has determined that (i) the Owner meets the Program eligibility requirements, and (ii) provision of the Grant for the Improvements pursuant to the terms of this Agreement is consistent with the interests of the health, safety and welfare of the residents of the City.

WHEREAS, Owner has entered into that certain contract dated ___________, 2022 with Zack’s Handyman & Construction (the “Contractor”) to construct the Improvements.

WHEREAS, pursuant to this Agreement, monies disbursed from the Grant will be sent directly to the Contractor as payment for services rendered.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
#5..
- 73 -
Rehabilitation Grant Agreement
City of Modesto

ARTICLE I

LOAN TERMS

1.1 Grant Amount. The City agrees to provide the Grant to Owner for construction of the Improvements upon the terms and conditions and for the purposes set forth in this Agreement.

1.2 Term. The entire amount of the Grant shall be due and payable upon the occurrence of an Event of Default under Article IV of this Agreement, if such Event of Default occurs prior to the Maturity Date.

1.3 Use of Proceeds. Owner shall use the proceeds of the Grant (“Grant Proceeds”) solely and exclusively to pay for costs billed to Owner by third-parties in connection with the design and construction of the Improvements and such other costs related to the Improvements as City may approve in writing.

1.4 Disbursement of Grant Proceeds. Provided that Owner has satisfied the conditions set forth in Section 1.5, City shall disburse the Grant Proceeds to Owner in accordance with the provisions of Section 1.11 herein.

1.5 Conditions Precedent to Disbursement of Proceeds. City’s obligation to fund the Grant and disburse the Grant Proceeds is conditioned upon the satisfaction of all of the following conditions:
(a) Owner’s execution and delivery to City of this Agreement; (b) Owner’s delivery to City of evidence reasonably satisfactory to City that Owner has obtained all necessary permits (including without limitation, building permits), licenses, and approvals required to undertake the Improvements; (c) Owner’s delivery to City of (i) the final budget for the Improvements, (ii) the construction contract, (iii) a written requisition substantially in the form attached hereto as Exhibit A; (iv) detailed receipts or invoices that match the project description and final budget; (v) proof of payment and (vi) and copies of such other documents related to the Improvements as City may reasonably request; (d) Owner’s delivery to City of a certification from the City’s Building Department in accordance with Section 2.2.
(e) Owner’s delivery to City of the insurance certificates required under Section 3.2 of this Agreement.

1.6 No Obligation to Disburse Proceeds Upon Default. Notwithstanding any other provision of this Agreement, the City shall have no obligation to disburse any portion of the Grant Proceeds if there is an occurrence of an Event of Default under the Grant Documents.
#5..
- 74 -
Rehabilitation Grant Agreement
City of Modesto

1.7 Disbursement of Grant Proceeds. Upon satisfaction of the conditions set forth in Section 1.5 herein, City shall make Grant disbursements to Contractor following Owner’s provision to City of a written requisition, in form and substance satisfactory to City as set forth in Exhibit A, specifying the amount and use of the requested Grant proceeds, accompanied by copies of bills and invoices and such other documentation as City may reasonably require. Subsequent disbursements shall be made to Contractor no more than once per calendar month, upon City’s receipt of written requisitions and supporting documentation as described in this Section.

ARTICLE II

CONSTRUCTION OF THE IMPROVEMENTS

2.1 Construction Schedule. Owner shall commence construction of the Improvements within 45 days following the Effective Date. Owner shall complete construction of the Improvements and obtain certification from the City’s Building Department in accordance with Section 2.2 no later than one hundred twenty (120) days after the commencement of construction.

2.2 Certification. Promptly after completion of the Improvements, Owner shall obtain certification from the City’s Building Department certifying that the Improvements have been completed in accordance with Applicable Laws (defined in Section 2.10) and this Agreement.

2.3 Approval of Plans and Specifications. City shall have the right to approve the plans and specifications for the Improvements (“Plans and Specifications”).

Owner must obtain City's written approval of any modification to the Plans and Specifications arising prior to or during the course of construction. City must also approve any additional construction work proposed to be performed during the construction of the Improvements, whether constructed with City funds or Owner's funds, or funds from any other source.

2.4 Inspections. Owner shall permit the City’s agents or representatives to enter upon the Property to inspect the Improvements; permit them to examine all detailed plans and shop drawings for the Improvements; and cause the general contractor and/or subcontractors to cooperate with the City in this regard, during normal business hours. If any of the work, in the reasonable opinion of the City, is not being performed in accordance with the approved Plans and Specifications, the City will provide Owner with written notice of same. Observation by the City of construction shall be for the purpose of protecting the security of the Grant only, and such observation shall in no way be construed as an acknowledgment that the Plans and Specifications for the Improvements have been complied with or that the construction is free from defect or in compliance with the terms of this Agreement.

2.5 Project Approvals. Owner acknowledges and agrees that execution of this Agreement by City does not constitute approval for the purpose of the issuance of building permits for the Improvements, does not limit in any manner the discretion of #5..
- 75 -
Rehabilitation Grant Agreement
City of Modesto
City in such approval process, and does not relieve Owner from the obligation to apply for and obtain all necessary entitlements, approvals, and permits for the Improvements, including without limitation, the approval of architectural plans, the issuance of any certificates regarding historic resources required in connection with the Improvements (if any), and the completion of any required environmental review.

Owner covenants that it shall: (i) obtain all necessary permits and approvals which may be required by City or any other governmental agency having jurisdiction over the Improvements or the Property, (ii) comply with all Conditions of Approval, (iii) comply with all mitigation measures imposed in connection with any environmental review of the Improvements, and (iv) not commence construction work on the Improvements prior to issuance of building permits required for such work.

2.6 Fees. Owner shall be solely responsible for, and shall promptly pay when due, all customary and usual fees and charges of City in connection with obtaining building permits and other approvals for the Improvements, including without limitation, those related to the processing and consideration of amendments, if any, to the current entitlements, any related approvals and permits, environmental review, design review, architectural review, historic review, and any subsequent approvals for the Improvements or the development of the Property.

2.7 Cost of Construction. Except as expressly set forth herein, Owner shall be solely responsible for all direct and indirect costs and expenses incurred in connection with the design, development and construction of the Improvements and compliance with the Conditions of Approval, and none of such costs and expenses shall be the obligation of the City or the City.

2.8 Equal Opportunity. During the construction of the Improvements, there shall be no discrimination on the basis of race, color, religion, creed, sex, sexual orientation, marital status, ancestry or national origin in the hiring, firing, promoting or demoting of any person engaged in construction of the Improvements, and Owner shall direct its contractors and subcontractors to refrain from discrimination on such basis.

2.9 Prevailing Wage Requirements. Owner shall pay or cause Owner’s contractors and subcontractors to pay prevailing wages for the construction of the Improvements as those wages are determined pursuant to Labor Code Section 1720 et seq. (“Prevailing Wage Laws”) and shall comply or shall cause the contractors and subcontractors to comply with all applicable local, federal, and state labor standards and prevailing wage provisions.

Owner shall indemnify, defend (with counsel approved by City) and hold the City and its respective elected and appointed officers, officials, employees, agents, consultants, and contractors (collectively, the “Indemnitees”) harmless from and against all liability, loss, cost, expense (including without limitation attorneys’ fees and costs of litigation), claim, demand, action, suit, judicial or administrative proceeding, penalty, deficiency, fine, order, and damage (all of the foregoing collectively “Claims”) which directly or indirectly, in whole or in part, are caused by, arise in connection with, #5..
- 76 -
Rehabilitation Grant Agreement
City of Modesto
result from, relate to, or are alleged to be caused by, arise in connection with, or relate to, the payment or requirement of payment of prevailing wages (including without limitation, all claims that may be made by contractors, subcontractors or other third party claimants pursuant to Labor Code Sections 1726 and 1781) or the requirement of competitive bidding in the construction of the Improvements, the failure to comply with any state or federal labor laws, regulations or standards in connection with this Agreement, including but not limited to the Prevailing Wage Laws, or any act or omission of Owner related to this Agreement with respect to the payment or requirement of payment of prevailing wages or the requirement of competitive bidding, whether or not any insurance policies shall have been determined to be applicable to any such Claims. It is further agreed that City does not and shall not waive any rights against Owner which they may have by reason of this indemnity and hold harmless agreement because of the acceptance by City, or Owner’s deposit with City of any of the insurance policies described in this Agreement. The provisions of this Section 2.9 shall survive the expiration or earlier termination of this Agreement. Owner’s indemnification obligations set forth in this Section shall not apply to Claims arising from the gross negligence or willful misconduct of the Indemnitees.

2.10 Compliance with Laws. Owner shall carry out and shall cause its contractors to carry out the construction of the Improvements in conformity with all applicable federal, state and local laws, rules, ordinances and regulations, including without limitation, all applicable federal and state labor laws and standards, the City zoning and development standards, building, plumbing, mechanical and electrical codes, all other provisions of the City's Municipal Code, and all applicable disabled and handicapped access requirements (collectively, “Applicable Laws”).

2.11 Insurance. Owner shall maintain, or cause to be maintained, insurance in the amounts required under Section 3.2 of this Agreement.

ARTICLE III

AFFIRMATIVE COVENANTS

3.1 Use of Funds. Owner covenants that it shall use the Grant Proceeds solely for purpose of financing the construction of the Improvements in accordance with Section 1.7.

3.2 Insurance. Owner covenants to cause its contractors to maintain insurance equivalent to a commercial general liability policy in the amount of One Million Dollars ($1,000,000) combined single limit, including contractual liability coverage.

Such insurance shall be written on an occurrence basis and shall name City as loss payee as their interests may appear. Owner covenants to maintain and keep the Property insured against loss or damage by earthquake, fire and such other hazards, casualties and contingencies and by such companies on such forms and in the amount of the replacement cost of the Property, and shall deliver a copy of all such policies to City, together with receipts satisfactory to City evidencing payment of the premiums.

Owner shall provide City not less than thirty (30) days advance written notice of the #5..
- 77 -
Rehabilitation Grant Agreement
City of Modesto
cancellation, expiration or termination of any such policy or any material change in the coverage afforded by it. Renewal policies and any replacement policies, together with premium receipts satisfactory to City, shall be delivered to City at least thirty (30) days prior to the expiration of existing policies. Neither Owner nor City shall by reason of accepting, rejecting, approving or obtaining insurance incur any liability for the existence, nonexistence, form or legal sufficiency of such insurance, or solvency of any insurer for payment of losses. All insurance proceeds for such losses must be utilized for the repair or restoration of the Property.

3.3 Indemnification. To the maximum extent permitted by law, Owner shall indemnify, defend (with counsel reasonably acceptable to City), and hold the Indemnitees harmless from and against, and shall pay on demand, any and all Claims arising directly or indirectly in any manner in connection with or as a result of Owner’s failure to perform its covenants and obligations under this Agreement and any of its activities or operations related thereto, excluding the wilful misconduct or the gross negligence of the Indemnitees. It is further agreed that City do not and shall not waive any rights against Owner which they may have by reason of this indemnity and hold harmless agreement because of the acceptance by City, or Owner’s deposit with City of any of the insurance policies described in this Agreement. Owner’s defense and indemnification obligations set forth in this Section 3.3 shall survive the expiration or earlier termination of this Agreement.

3.4 Obligation to Refrain from Discrimination. Owner shall not discriminate in the hiring of contractors for the construction of the Improvements on the basis of race, color, religion, creed, sex, sexual orientation, disability, marital status, ancestry, or national origin of any person. Owner covenants for itself and all persons claiming under or through it, and this Agreement is made and accepted upon and subject to the condition that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code.

3.5 Principal Residence. Owner shall (i) occupy the Property as Owner’s principal residence throughout the term of this Agreement, and (ii) shall not rent or lease the Property or portion thereof during the term of this Agreement without the prior written consent of the City. “Principal Residence” means the place where a person resides on a substantially full-time basis during not less than ten (10) months per year.

3.6 Hazardous Materials. Owner shall not cause or permit any Hazardous Materials (as defined in below) to be brought upon, kept, stored or used in, on, or about the Property by Owner, or the agents, employees, contractors or invitees of Owner except for materials commonly used in construction activities similar to those related to the Improvements, or in the operation and maintenance of the Property and the Improvements, in each case in compliance with all applicable laws, and shall not cause any release of Hazardous Materials into, onto, under or through the Property. If any Hazardous Material is discharged, released, dumped, or spilled in, on, under, or about the #5..
- 78 -
Rehabilitation Grant Agreement
City of Modesto
Property and results in any contamination of the Property or adjacent property, or otherwise results in the release or discharge of Hazardous Materials in, on, under or from the Property, Owner shall promptly take all actions at Owner’s sole expense as are necessary to comply with all Hazardous Materials Laws (as defined below).

3.7 Definitions.

3.7.1 Hazardous Materials. As used in this Agreement, “Hazardous Materials” means any substance, material, or waste which is or becomes regulated by any local, state or federal authority, agency or governmental body, including any material or substance which is: (i) defined as a “hazardous waste,” “hazardous material,” “hazardous substance,” “extremely hazardous waste,” “restricted hazardous waste,” “pollutant, “ or any other terms comparable to the foregoing terms under any provision of California law or federal law as any such statutes and regulations now exist or may hereafter be amended, (ii) petroleum or petroleum products; (iii) asbestos; (iv) polychlorinated biphenyls, (v) radioactive chemicals, (vi) any material determined to hazardous based on deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity or toxicity, (vii) designated as a “hazardous substance” pursuant to Section 311 of the Clean Water Act (33 U.S.C. §1317); (viii) defined as a “hazardous waste” pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. §6901, et seq. (42 U.S.C. §6903); (ix) defined as “hazardous substances” pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §9601, et seq; or (x) determined by California, federal or local governmental authority to be capable of posing a risk of injury to health, safety or property.

3.7.2 Hazardous Materials Laws. As used in this Agreement, “Hazardous Materials Laws” means all federal, state and local laws, ordinances, regulations, orders and directives pertaining to Hazardous Materials, including without limitation, the laws, statutes and regulations cited in the preceding Section 3.7.1, as they may be amended from time to time.

3.8 Sale, Transfer or Refinance. All Grant Proceeds shall be immediately due and payable upon the sale or transfer of the Property prior to ____________. Owner may not refinance any loans that are secured against the Property in a lien position that is higher than the Grant Agreement without the prior written consent of City.

ARTICLE IV

DEFAULT AND REMEDIES

4.1 Events of Default. The occurrence of any one or more of the following events shall constitute an event of default hereunder ("Event of Default"):
(a) If any representation or warranty contained in the Grant Documents or any certificate furnished in connection with the foregoing or in connection with any request for disbursement of Grant Proceeds proves to have been false or misleading in any material adverse respect when made.
#5..
- 79 -
Rehabilitation Grant Agreement
City of Modesto
(b) Owner fails to commence and complete construction and/or installation of the Improvements in accordance with Section 2.1. (c) If an Event of Default shall have been declared under any other Grant Document, subject to the expiration of any applicable cure period set forth in such documents.
(d) If, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (“Bankruptcy Law”), Owner (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Owner in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Owner; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due. (e) If the Owner fails to maintain insurance on the Property as required pursuant to the Grant Documents, and Owner fails to cure such default within 60 days. (f) Owner, or Owner’s heir ceases to occupy the Property as Owner’s Principal Residence in accordance with Section 3.5.
(g) Owner defaults in the performance of any term, provision, covenant or agreement (other than an obligation enumerated in this Section 4.1) contained in this Agreement or unless a shorter cure period for such default is specified herein, the default continues for ten (10) days in the event of a monetary default or thirty (30) days in the event of a nonmonetary default after the date upon which City shall have given written notice of the default to Owner (or such longer time as City may agree upon in writing), provided that in each case Owner commences to cure the default within thirty (30) days and thereafter prosecutes the curing of such default with due diligence and in good faith.

4.2 Declaring Default. Whenever any Event of Default has occurred, other than failure to pay any sums due under this Agreement, City shall give written notice of default to Owner. Any default that has occurred shall be deemed to commence on the date that written notice of default is effective pursuant to Section 5.1 of this Agreement (the "Date of Default").

4.3 Remedies and Rights Upon Default. Upon the occurrence of an Event of Default, City shall have all remedies available to it under law or equity, including, but not limited to the following, and City may, at its election, without notice to or demand upon Owner, except for notices or demands required by law or expressly required pursuant to this Agreement, exercise one or more of the following remedies:
a) Seek specific performance to enforce the terms of this Agreement; b) Pursue any and all other remedies available under law to enforce the terms of this Agreement and City's rights hereunder.
#5..
- 80 -
Rehabilitation Grant Agreement
City of Modesto

4.4 Remedies Cumulative. Each of the remedies provided herein is cumulative and not exclusive of, and shall not prejudice any other remedy provided herein. The City may exercise from time to time any rights and remedies available to it under applicable law, in addition to, and not in lieu of, any rights and remedies expressly granted in this Agreement or in any other instrument or notice.

4.5 Costs and Expenses. Owner shall pay all reasonable costs and expenses incurred by or on behalf of City including, without limitation, reasonable attorneys’ fees, incurred in connection with City’s enforcement of the Grant Documents and the exercise of any or all of its rights and remedies hereunder and all such sums shall be a part of the indebtedness secured by the Grant Agreement.

ARTICLE V

MISCELLANEOUS

5.1 Notices. Except as otherwise specified in this Agreement, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other Party in accordance with this Section

5.1. All such notices shall be sent by:
a. personal delivery, in which case notice shall be deemed delivered upon receipt;
b. certified or registered mail, return receipt requested, in which case notice shall be deemed delivered two (2) business days after deposit, postage prepaid in the United States mail;
c. nationally recognized overnight courier, in which case notice shall be deemed delivered one (1) day after deposit with such courier; or d. facsimile transmission, in which case notice shall be deemed delivered on transmittal, provided that a transmission report is generated reflecting the accurate transmission thereof.

City: City of Modesto
Community Economic Development Department
P.O. Box 642
Modesto, CA 95353
Attn: CEDD Manager
Owner:

Christopher Gates
Stacy Gates
1125 Springcreek Drive
Modesto, CA 95355
#5..
- 81 -
Rehabilitation Grant Agreement
City of Modesto

5.2 Attorneys’ Fees. If either party initiates legal proceedings to interpret or enforce its rights under this Agreement, the prevailing party in such action shall be entitled to an award of reasonable attorneys’ fees and costs in additions to any other recovery to which it is entitled under this Agreement.

5.3 No Joint Venture; No Third-Party Beneficiary. No joint venture or other partnership exists or is created between the Parties by virtue of this Agreement. Except as expressly stated herein, this Agreement does not benefit any third party.

5.4 Successors; Assignment. This Agreement shall inure to the benefit of and shall be binding upon the Parties to this Agreement and their respective heirs, executors, administrators, successors and assigns. City shall have the right to assign all of its rights and obligations under this Agreement without the consent of Owner.

5.5 Amendment. This Agreement may be modified only by an instrument in writing executed by the Parties or their respective successors in interest.

5.6 Authority and Execution. Each Party represents and warrants that it has full power and authority to enter into this Agreement and to undertake all of its obligations hereunder, that each person executing this Agreement on its behalf is duly and validly authorized to do so.

5.7 Severability. The invalidity or unenforceability of any term or provision of this Agreement shall not impair or affect the remainder of this Agreement, and the remaining terms and provisions hereof shall not be invalidated but shall remain in full force and effect.

5.8 Waiver; Modification. No waiver or modification of this Agreement or any covenant, condition, or limitation herein contained shall be valid unless in writing and duly executed by the Party to be charged therewith. No evidence or any waiver or modification shall be offered or received in evidence in any proceeding, arbitration, or litigation between the Parties arising out of or affecting this Agreement or the rights or obligations of any Party hereunder, unless such waiver or modification is in writing and duly executed as aforesaid. The provisions of this section may not be waived except as herein set forth. A waiver or breach of any covenant, condition or provision of this Agreement shall not be deemed a waiver of any other covenant, condition or provision hereof.

5.9 Construction. The section headings and captions used in this Agreement are for convenience of reference only and shall not modify, define, limit or amplify any of the terms or provisions hereof. This Agreement shall not be construed as if it had been prepared by one of the Parties, but rather as if both Parties have prepared it.

5.10 Governing Law. This Agreement shall in all respects be governed by and construed in accordance with the laws of the State of California without regard to principles of conflicts of laws.
#5..
- 82 -
Rehabilitation Grant Agreement
City of Modesto

5.11 Time of the Essence. Time is of the essence in this Agreement as to each provision in which time is an element of performance.

5.12 Further Assurances. Each Party will, upon reasonable request of the other Party, execute, acknowledge, and deliver, or cause to be executed, acknowledged, and delivered, such further instruments and documents as may be reasonably necessary in order to fulfill the intents and purposes of this Agreement.

5.13 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all which together shall constitute one and the same instrument.

5.14 No Third Party Claims. Nothing contained in this Agreement shall create or justify any claim against City by any third person whom Owner may have employed or contracted or may employ or contract relative to the purchase of any material, supplies or equipment, or the furnishing or the performance of any work or services with respect to any programs or projects being undertaken by Owner.

5.15 Entire Agreement; Exhibit. This Agreement, together with the other Grant Documents, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes any and all prior or contemporaneous oral or written agreements and negotiations between the Parties with respect thereto. Exhibit A attached hereto are incorporated herein by reference as though fully set forth herein.

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date set forth above.

OWNER:
____________________________________
Christopher Gates
____________________________________
Stacy Gates
#5..
- 83 -
Rehabilitation Grant Agreement
City of Modesto

CITY OF MODESTO,
a municipal corporation
By: ________________________________
JOSEPH P. LOPEZ, City Manager
ATTEST:

By:

DANA NAYARES-PEREZ, CMC, City Clerk
(Seal)
APPROVED AS TO FORM:

JOSE M. SANCHEZ, City Attorney
By:

APPROVED AS TO RISK MANAGEMENT:

By: _________________________________
JOE F. RODRIGUEZ, Risk Manager
#5..
- 84 -
Rehabilitation Grant Agreement
City of Modesto

EXHIBIT A

FORM OF REQUISITION
Requisition No. _____
Reference is made to that certain Residential Rehabilitation Grant Agreement, dated as of ___________, 2022 (the “Agreement”), by and between the City of Modesto (the “City”) and Christopher Gates and Stacy Gates (“Owner”). Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Agreement.

Owner requests a disbursement of Grant funds in the amount of $______ for the costs incurred by the Owner for the Improvements and accompanied by copies of bills and invoices from third parties.

Owner requests that the disbursement be made directly to the Contractor in accordance with Section 1.8 of the Agreement.

The disbursement of the amount specified above, when added to all previous disbursements of Grant Proceeds, will result in not more than $_______ of Grant Proceeds having been used to pay or reimburse the Owner for costs incurred for installation and construction of the Improvements.
____________________________________
Christopher Gates
____________________________________
Stacy Gates
Approval: City of Modesto
_______________________________________
By: Jessica Hill, Community Development Manager
2966912.1
#5..
- 85 -

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of Modesto
P.O. Box 642
Modesto, CA 95353
Attn: Community and Economic
Development Department

EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383
Space above this line for Recorder’s use.

APN: 068-004-060

DEED OF TRUST WITH ASSIGNMENT OF RENTS,

SECURITY AGREEMENT AND FIXTURE FILING
This DEED OF TRUST WITH ASSIGNMENT OF RENTS, SECURITY
AGREEMENT AND FIXTURE FILING (this “Deed of Trust”) is made as of _________________, 2022, by Christopher Gates and Stacy Gates, a married couple (the “Trustor”) whose address is 1125 Springcreek Drive, Modesto CA 95355 (the “Borrower Address”) to the City of Modesto, a California Charter City, as trustee (the “Trustee”), for the benefit of the City of Modesto, a California charter city (the “Beneficiary”). The Trustor and the Beneficiary are hereinafter collectively referred herein as the “Parties.”

RECITALS
A. The Trustor owns fee simple title to the land described in Exhibit A attached hereto and incorporated herein by this reference (the “Land”).

B. The Beneficiary and the Trustor have entered into a grant agreement dated as of the date hereof (the “Agreement”) pursuant to which the Beneficiary will provide a grant to Trustor in the amount of Ten Thousand Dollars and Zero Cents ($10,000) (the “Grant”) for the purpose of financing a portion of the costs of designing, constructing, and/or installing certain improvements to the Property (the “Project”).

Capitalized terms used herein without definition shall have the meaning ascribed to such terms in the Agreement.

C. As a condition precedent to the making of the Grant, the Beneficiary has required that the Trustor enter into this Deed of Trust and grant to the Trustee for the benefit of the Beneficiary, a first priority lien and security interest in the Property (as hereafter defined) to secure certain resale restriction and other requirements of the Grant.
#5..
- 86 -
2966889.1 2
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed as follows.

1. Grant in Trust. Trustor, in consideration of the indebtedness herein recited and the trust herein created, hereby irrevocably and unconditionally grants, transfers, conveys and assigns to Trustee in trust for the benefit of Beneficiary, with power of sale and right of entry and possession, all of Trustor’s right, title and interest now held or hereafter acquired in and to the following: (a) all of that certain real property located at 3028 Snyder Ave in Modesto, California in the County of Stanislaus and the State of California, which is more particularly described in Exhibit A, attached hereto and incorporated herein by this reference (the “Land”); (b) all buildings, improvements and fixtures now or hereafter erected on the Land and all replacements and additions thereto (“Improvements”); (c) all easements, rights of way, appurtenances and other rights used in connection with the Land or as a means of access thereto (“Appurtenances”); (d) all fixtures now or hereafter attached to or used in and about the Land or the Improvements or hereafter located or constructed on the Land, and all renewals or replacements thereof or articles in substitution therefor, whether or not the same are, or shall be attached to the Improvements in any manner (“Fixtures and Equipment”); and (e) all leases, subleases, licenses and other agreements relating to use or occupancy of the Land (“Leases”) and all rents or other payments which may now or hereafter accrue or otherwise become payable to or for the benefit of Trustor (“Rents”) (whether or not such Leases and Rents are permitted pursuant to the Agreement).

All of the above-referenced Land, Improvements, Appurtenances, Fixtures and Equipment, Leases and Rents are herein referred to collectively as the “Property.”

2. Obligations Secured. This Deed of Trust is given for the purpose of securing payment and performance of all of the following (the “Secured Obligations”): (i) all present and future indebtedness evidenced by the Note (including all principal and all other amounts payable pursuant to the Note) and all amendments, modifications, extensions and renewals of the Note; (ii) all present and future obligations of Trustor set forth in this Deed of Trust or in the Agreement; (iii) all additional present and future obligations of Trustor to Beneficiary under any other agreement or instrument acknowledged by Trustor (whether existing now or in the future) which states that it is or such obligations are, secured by this Deed of Trust; (iv) all modifications, supplements, amendments, renewals, and extensions of any of the foregoing, whether evidenced by new or additional documents; and (v) reimbursement of all amounts advanced by or on behalf of Beneficiary to protect Beneficiary’s interests under this Deed of Trust.

3. Assignment of Rents, Issues, and Profits. Trustor hereby irrevocably, absolutely, presently and unconditionally assigns to Beneficiary the rents, royalties, issues, profits, revenue, income and proceeds of the Property. This is an absolute assignment and not an assignment for security only. Subject to the prohibition on the lease or rental of the Property as set forth in the Agreement, Beneficiary hereby confers upon Trustor a license to collect and retain such rents, royalties, issues, profits, revenue, income and proceeds as they become due and payable prior to any Event of Default hereunder. #5..
- 87 -
2966889.1 3
Upon the occurrence of any such Event of Default, Beneficiary may terminate such license without notice to or demand upon Trustor and without regard to the adequacy of any security for the indebtedness hereby secured, and may either in person, by agent, or by a receiver to be appointed by a court, enter upon and take possession of the Property or any part thereof, and sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorneys’ fees, to any indebtedness secured hereby, and in such order as Beneficiary may determine.

Beneficiary’s right to the rents, royalties, issues, profits, revenue, income and proceeds of the Property does not depend upon whether or not Beneficiary takes possession of the Property. The entering upon and taking possession of the Property, the collection of such rents, issues, and profits, and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. If an Event of Default occurs while Beneficiary is in possession of all or part of the Property and/or is collecting and applying Rents as permitted under this Deed of Trust, Beneficiary, Trustee and any receiver shall nevertheless be entitled to exercise and invoke every right and remedy afforded any of them under this Deed of Trust and at law or in equity, including the right to exercise the power of sale granted hereunder. Regardless of whether or not Beneficiary, in person or by agent, takes actual possession of the Land and Improvements, Beneficiary shall not be deemed to be a “mortgagee in possession,” shall not be responsible for performing any obligation of the lessor under any Lease, shall not be liable in any manner for the Property, or the use, occupancy, enjoyment or operation of any part of it , and unless due solely to the willful misconduct or gross negligence of Beneficiary, shall not be responsible for any dangerous or defective condition of the Property or any negligence in the management, repair or control of the Property.

4. Fixture Filing. This Deed of Trust is intended to be and constitutes a fixture filing pursuant to the provisions of the Uniform Commercial Code (“UCC”) with respect to all of the Property constituting fixtures, is being recorded as a fixture financing statement and filing under the UCC, and covers property, goods and equipment which are or are to become fixtures related to the Land and the Improvements. Trustor covenants and agrees that this Deed of Trust is to be filed in the real estate records of Stanislaus County and shall also operate from the date of such filing as a fixture filing in accordance with Section 9502 and other applicable provisions of the UCC. This Deed of Trust shall also be effective as a financing statement covering minerals or the like (including oil and gas) and accounts subject to the UCC, as amended. Trustor shall be deemed to be the "debtor" and Beneficiary shall be deemed to be the "secured party" for all purposes under the UCC. The full name of Trustor and the mailing address of Trustor are set forth in Section 7.6 of this Deed of Trust. #5..
- 88 -
2966889.1 4

5. Trustor’s Representations, Warranties and Covenants; Rights and Duties of the Parties.

5.1. Trustor’s Estate. Trustor represents and covenants that Trustor is lawfully seized of the estate hereby conveyed and has the right to grant and convey the Property.

5.2 Payment and Performance of Secured Obligations. Trustor will promptly pay and perform all obligations of the Trustor arising in connection with the Secured Obligations in accordance with the respective terms thereof.

5.3 Performance of Covenants. Trustor will observe and perform all of Trustor’s covenants and agreements set forth in the Agreement, the Note, this Deed of Trust and all other instruments secured by the Property.

5.4 Use of Grant Proceeds; Maintenance of the Property. Trustor covenants that it shall use the Grant Proceeds solely for the purpose of financing the Project in accordance with the Agreement. Trustor agrees (a) to keep the Property in good repair and in decent, safe, sanitary, tenantable condition and repair and permit no waste thereof; (b) not to commit or suffer to be done or exist on or about the Land any condition causing the Property to become less valuable; (c) to repair, restore or rebuild promptly any buildings or improvements on the Land that may become damaged or be destroyed while subject to the lien of this Deed of Trust; (d) to comply with all applicable laws, ordinances and governmental regulations affecting the Property or requiring any alteration or improvement thereof, and not to suffer or permit any violations of any such law, ordinance or governmental regulation, nor of any covenant, condition or restriction affecting the Property; and (e) not to initiate or acquiesce in any change in any zoning or other land use or legal classification which affects any of the Property without the Beneficiary’s written consent. If there arises a condition in contravention of this Section, and if the Trustor has not cured such condition within thirty (30) days after receiving a Beneficiary notice of such a condition, then in addition to any other rights available to the Beneficiary, the Beneficiary shall have the right (but not the obligation) to perform all acts necessary to cure such condition, and to establish or enforce a lien or other encumbrance against the Property to recover its cost of cure.

5.5 Appear and Defend. Trustor shall appear in and defend any action or proceeding purporting to affect the Property or the rights or powers of the Beneficiary or Trustee, and shall pay all costs and expenses, including cost of evidence of title and attorney’s fees in a reasonable sum, in any such action or proceeding in which the Beneficiary or Trustee may appear, and in any suit brought by the Beneficiary to foreclose this Deed of Trust.

5.6 Charges; Liens. Trustor shall pay prior to delinquency all taxes, assessments, and other charges, fines, and impositions affecting the Property directly to the payee thereof. Upon request of Beneficiary, Trustor shall promptly furnish to Beneficiary copies of all notices of such amounts due and shall promptly furnish to #5..
- 89 -
2966889.1 5
Beneficiary receipts evidencing all such payments made. Trustor shall pay when due each obligation secured by or reducible to a lien, charge or encumbrance which now does or later may encumber or appear to encumber all or part of the Property or any interest therein, whether or not such lien, charge or encumbrance is or would be senior or subordinate to this Deed of Trust. Trustor shall not be required to pay any tax, charge or assessment so long as Trustor is actively contesting its validity in good faith and by appropriate legal proceedings which will operate to prevent the enforcement of the lien or forfeiture of the Property or any part thereof. Trustor shall post security for the payment of such contested claims as may be requested by the Beneficiary.

5.7 Insurance. Trustor shall keep the Property insured by a standard all-risk property insurance policy in an amount equal to the replacement value of the Property with loss payable to the Beneficiary. The insurance carrier providing such insurance shall be licensed to do business in the State of California and may be chosen by Trustor, subject to approval by Beneficiary. All insurance policies and renewals thereof will be in a form acceptable to the Beneficiary, and will include a standard mortgagee clause with standard lender's endorsement in favor of the holder of any senior lien and the Beneficiary as their interests may appear and in a form acceptable to the Beneficiary. The Beneficiary shall have the right to hold, or cause its designated agent to hold, the policies and renewals thereof, and Trustor shall promptly furnish to the Beneficiary, or its designated agent, the original insurance policies or certificates of insurance, all renewal notices and all receipts of paid premiums. In the event of loss, Trustor will give prompt notice to the insurance carrier and the Beneficiary or its designated agent. The Beneficiary, or its designated agent, may make proof of loss if not made promptly by Trustor. The Beneficiary shall receive thirty (30) days advance written notice of the cancellation, expiration or termination or any material change in the coverage afforded by any of the insurance policies required under this Section.

Unless otherwise permitted by the Beneficiary in writing, insurance proceeds, subject to the rights of the holder of any senior lien, will be applied to restoration or repair of the Property damaged. If the Property is abandoned by Trustor, or if Trustor fails to respond to the Beneficiary, or its designated agent, within thirty (30) days from the date notice is mailed by either of them to Trustor that the insurance carrier offers to settle a claim for insurance benefits, the Beneficiary, or its designated agent, is authorized to collect and apply the insurance proceeds at the Beneficiary's option either to restoration or repair of the Property or to pay amounts due under the Agreement and the Note.

If the Property is acquired by the Beneficiary, all right, title and interest of Trustor in and to any insurance policy and in and to the proceeds thereof resulting from damage to the Property prior to the sale or acquisition will pass to the Beneficiary to the extent of the sums secured by this Deed of Trust immediately prior to such sale or acquisition, subject to the rights of the holder of any senior lien.

Renewal policies and any replacement policies, together with premium receipts satisfactory to the Beneficiary, shall be delivered to the Beneficiary at least thirty (30) #5..
- 90 -
2966889.1 6
days prior to the expiration of existing policies. Neither Trustee nor the Beneficiary shall by reason of accepting, rejecting, approving or obtaining insurance incur any liability for the existence, nonexistence, form or legal sufficiency of such insurance, or solvency of any insurer for payment of losses.

5.8 Use of Property. Trustor shall not permit or suffer the use of any of the Property for any purpose other than as a single-family residential dwelling.

5.9 Protection of Beneficiary’s Security. If Trustor fails to perform the covenants and agreements contained in this Deed of Trust, or if any action or proceeding is commenced which materially affects Beneficiary’s interest in the Property, including, but not limited to, eminent domain, insolvency, code enforcement, arrangements or proceedings involving a bankrupt or decedent, foreclosure of any mortgage secured by the Property or sale of the Property under a power of sale of any instrument secured by the Property, then Beneficiary, at Beneficiary’s option, upon notice to Trustor, may make such appearance, disburse such sums and take such action as is necessary to protect Beneficiary’s interest, including, but not limited to, the purchase of insurance, disbursement of reasonable attorney’s fees and entry upon the Property to make repairs. Any amounts disbursed by Beneficiary pursuant to this Section, with interest thereon, shall become additional indebtedness of Trustor secured by this Deed of Trust. Unless Trustor and Beneficiary agree to other terms of payment, such amounts shall be payable upon notice from Beneficiary to Trustor requesting payment thereof, and shall bear interest from the date of disbursement at the highest rate permissible under applicable law. Nothing contained in this Section shall require Beneficiary to incur any expense or take any action hereunder.

5.10 Inspection. Beneficiary or its agent may make or cause to be made reasonable entries upon and inspections of the Property. Beneficiary shall give Trustor notice at the time of or prior to any such inspection specifying reasonable cause for the inspection

5.11 Awards and Damages. All judgments, awards of damages, settlements and compensation made in connection with or in lieu of (a) taking of all or any part of or any interest in the Property by or under assertion of the power of eminent domain, (b) any damage to or destruction of the Property or any part thereof by insured casualty, and (c) any other injury or damage to all or any part of the Property, are hereby assigned to and shall be paid to the Beneficiary. The Beneficiary is authorized and empowered (but not required) to collect and receive any such sums and is authorized to apply them in whole or in part upon any indebtedness or obligation secured hereby, in such order and manner as the Beneficiary shall determine at its option. The Beneficiary shall be entitled to settle and adjust all claims under insurance policies provided under this Deed of Trust and may deduct and retain from the proceeds of such insurance the amount of all expenses incurred by it in connection with any such settlement or adjustment. All or any part of the amounts so collected and recovered by the Beneficiary may be released to Trustor upon such conditions as the Beneficiary may impose for its disposition. Application of all or any part of the amounts collected and #5..
- 91 -
2966889.1 7
received by the Beneficiary or the release thereof shall not cure or waive any default under this Deed of Trust. If the Property is abandoned by Trustor, or if, after notice by Beneficiary to Trustor that the condemner offers to make an award or settle a claim for damages, Trustor fails to respond to Beneficiary within thirty (30) days after the date such notice is mailed, Beneficiary is authorized to collect and apply the proceeds, at Beneficiary’s option, either to restoration or repair of the Property or to the sum secured by this Deed of Trust.

5.12 Prohibition on Transfers of Interest. If all or any part of the Property or an interest therein is sold or transferred by Trustor without Beneficiary’s prior written consent, Beneficiary may, at Beneficiary’s option, declare all sums secured by this Deed of Trust to be immediately due and payable.

5.13 Sale or Forbearance. No sale of the Property, forbearance on the part of Beneficiary or extension of the time for payment of the indebtedness hereby secured shall operate to release, discharge, waive, modify, change or affect the liability of Trustor either in whole or in part.

5.14 Beneficiary’s Rights to Release. Without affecting the liability of any person for payment of any indebtedness hereby secured (other than any person released pursuant hereto), including without limitation any one or more endorsers or guarantors, and without affecting the lien hereof upon any of the Property not released pursuant hereto, at any time and from time to time without notice: (a) Beneficiary may in its sole discretion: (i) release any person now or hereafter liable for payment of any or all such indebtedness, (iii) extend the time for or agree to alter the terms of payment of any or all of such indebtedness, and (iii) release or accept additional security for such indebtedness, or subordinate the lien or charge hereof; and (b) Trustee, acting pursuant to the written request of the Beneficiary, may reconvey all or any part of the Property, consent to the making of any map or plot of the Land, join in granting any assessment thereon, or join in any such agreement of extension or subordination.

5.15 Reconveyance. Upon payment of all sums and satisfaction of all obligations secured by this Deed of Trust, Beneficiary shall request Trustee to reconvey the Property and shall surrender this Deed of Trust and all notes evidencing indebtedness secured by this Deed of Trust to Trustee. Trustee shall reconvey the Property without warranty and without charge to the person or persons legally entitled thereto. Such person or persons shall pay all costs of recordation, if any. The recitals in the reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof.

5.16 Notice of Claims; Reimbursement of Costs.
(a) Notice of Claims. The Trustor shall provide written notice to Beneficiary of any uninsured or partially uninsured loss affecting the Property through fire, theft, liability, or property damage in excess of an aggregate of Ten Thousand Dollars and Zero Cents ($10,000.00) within three business days of the occurrence of such loss. #5..
- 92 -
2966889.1 8
The Trustor shall ensure that the Beneficiary shall receive timely notice of, and shall have a right to cure, any default under any other financing document or other lien affecting the Property and shall use best efforts to ensure that provisions mandating such notice and allowing such right to cure shall be included in all such documents.

Within three business days of the Trustor’s receipt thereof, the Trustor shall provide the Beneficiary with a copy of any notice of default the Trustor receives in connection with any financing document secured by the Property or any part thereof. (b) Compensation; Reimbursement of Costs. The Trustor agrees to pay all reasonable fees, costs and expenses charged by the Beneficiary or the Trustee for any service that the Beneficiary or the Trustee may render in connection with this Deed of Trust, including without limitation, fees and expenses related to provision of a statement of obligations or related to a reconveyance. The Trustor further agrees to pay or reimburse the Beneficiary for all costs, expenses and other advances which may be incurred or made by the Beneficiary or Trustee in any efforts to enforce any terms of this Deed of Trust, including any rights or remedies afforded to the Beneficiary or the Trustee or both of them under Section 7.2, whether or not any lawsuit is filed, or in defending any action or proceeding arising under or relating to this Deed of Trust, including reasonable attorneys’ fees and other legal costs, costs of any disposition of the Property under the power of sale granted hereunder or any judicial foreclosure, and any cost of evidence of title.

5.17 Indemnification. Trustor agrees to indemnify, defend (with counsel approved by Beneficiary) and hold the Beneficiary, its elected and appointed officers, officials, agents and employees (“Indemnitees”) harmless from and against any and all losses, damages, claims, actions, demands, judgments, penalties, costs and expenses (including reasonable attorneys’ fees) and liabilities (all of the foregoing, collectively “Claims”) which the Indemnitees may sustain or suffer directly or indirectly as a result of or arising in connection with (i) Trustor’s failure to perform any obligations as and when required by the Note, the Agreement, or this Deed of Trust, (ii) the failure at any time of any of Trustor’s representations and warranties made in connection with the Grant to be true and correct, or (iii) any action or omission by Indemnitees in connection with this Deed of Trust, except to the extent any such Claim arises due to the gross negligence or willful misconduct of Indemnitees.

6. Events of Default; Remedies

6.1 Events of Default. Any one or more of the following events shall constitute a default under this Deed of Trust (“Event of Default”):
(a) Failure of the Trustor to pay the indebtedness secured hereby or any installment thereof when and as the same become due and payable, whether at maturity or by acceleration or otherwise; (b) Failure of Trustor to timely observe or to perform any covenant condition or agreement to be observed or performed by Trustor #5..
- 93 -
2966889.1 9
pursuant to the Agreement, the Note or this Deed of Trust; (c) The occurrence of any event of default which, under the terms of the Agreement or the Note, shall entitle the Beneficiary to exercise the rights or remedies thereunder;
(d) Failure of Trustor to perform any monetary obligation which arises under this Deed of Trust, and does not cure that failure within ten (10) days following written notice from Beneficiary or Trustee; (e) If Trustor’s interest in the Property or any part thereof is voluntarily or involuntarily sold, transferred, leased, encumbered, or otherwise conveyed in violation of Section 5.12 hereof or if any other transfer occurs in violation of the Agreement;
(f) Failure of Trustor to pay taxes or assessments due on the Land or the Improvements or failure to pay any other charge that may result in a lien on the Land or the Improvements, and Trustor fails to cure such default within 15 days;
(g) Failure of Trustor to maintain the insurance coverage required under the Agreement and Trustor fails to cure such default within 60 days;
(h) If, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (“Bankruptcy Law”), Borrower (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Borrower in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Borrower; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due.
(i) If an event of default has been declared by the holder of any debt instrument secured by a mortgage or deed of trust on Borrower’s interest in the Property and such holder exercises a right to declare all amounts due under that debt instrument immediately due and payable, subject to the expiration of any applicable cure period set forth in such holder’s documents.
(j) Failure of Trustor to perform any obligation arising under this Deed of Trust other than one enumerated in this Section 6.1 and does not cure that failure either within ten (10) days ("Initial Cure Period") after written notice from Beneficiary or Trustee in the event of a monetary default, or within thirty (30) days after such written notice #5..
- 94 -
2966889.1 10
in the event of a nonmonetary default (or such longer time as Beneficiary may agree upon in writing), provided that Trustor commences to cure the default within the Initial Cure Period and thereafter prosecutes such cure with due diligence and in good faith and Beneficiary in the exercise of reasonable judgment determines that a cure cannot reasonably be completed prior to expiration of the Initial Cure Period.

6.2 Remedies. Subject to the applicable notice and cure provisions set forth herein, at any time after an Event of Default, the Beneficiary and the Trustee shall be entitled to invoke any and all of the rights and remedies described below, and may exercise any one or more or all, of the remedies set forth in the Agreement, and any other remedy existing at law or in equity or by statute. All of the Beneficiary’s rights and remedies shall be cumulative, and the exercise of any one or more of them shall not constitute an election of remedies. The Beneficiary shall be entitled to collect all expenses incurred in pursuing the remedies provided hereunder, including without limitation reasonable attorneys’ fees and costs of title evidence. (a) Acceleration. The Beneficiary may declare any or all of the Secured Obligations to be due and payable immediately.
(b) Receiver. The Beneficiary may apply to any court of competent jurisdiction for, and obtain appointment of, a receiver for the Property. (c) Entry. The Beneficiary, in person, by agent or by court-appointed receiver, may enter, take possession of, manage and operate all or any part of the Property, and may also do any and all other things in connection with those actions that the Beneficiary may in its sole discretion consider necessary and appropriate to protect the security of this Deed of Trust. Such other things may include: taking and possessing copies of all of the Trustor's or the then owner's books and records concerning the Property; entering into, enforcing, modifying, or canceling Leases on such terms and conditions as the Beneficiary may consider proper; obtaining and evicting tenants; fixing or modifying Rents; collecting and receiving any payment of money owing to the Trustor; completing any unfinished construction; and/or contracting for and making repairs and alterations. If the Beneficiary so requests, the Trustor shall assemble all of the Property that has been removed from the Land and make all of it available to the Beneficiary at the site of the Land. The Trustor hereby irrevocably constitutes and appoints the Beneficiary as the Trustor's attorney- in-fact to perform such acts and execute such documents as the Beneficiary in its sole discretion may consider to be appropriate in connection with taking these measures, including endorsement of the Trustor's name on any instruments. Regardless of any provision of this Deed of Trust, the Beneficiary shall not be considered to have accepted any property other than cash or immediately available funds in satisfaction of any obligation of the Trustor to the Beneficiary, unless the Beneficiary has given express written notice of the Beneficiary's election of that remedy in accordance with UCC Section 9621, as it may be amended or recodified from time to time.
#5..
- 95 -
2966889.1 11
(d) Cure; Protection of Security. Either the Beneficiary or the Trustee may cure any breach or default of the Trustor, and if it chooses to do so in connection with any such cure, the Beneficiary or the Trustee may also enter the Property and/or do any and all other things which it may in its sole discretion consider necessary and appropriate to protect the security of this Deed of Trust. Such other things may include:
appearing in and/or defending any action or proceeding which purports to affect the security of, or the rights or powers of the Beneficiary or the Trustee under, this Deed of Trust; paying, purchasing, contesting or compromising any encumbrance, charge, lien or claim of lien which in the Beneficiary's or the Trustee's sole judgment is or may be senior in priority to this Deed of Trust, such judgment of the Beneficiary or the Trustee to be conclusive as among the Beneficiary, the Trustee and the Trustor; obtaining insurance and/or paying any premiums or charges for insurance required to be carried hereunder; otherwise caring for and protecting any and all of the Property; and/or employing counsel, accountants, contractors and other appropriate persons to assist the Beneficiary or the Trustee. The Beneficiary and the Trustee may take any of the actions permitted under this Subsection 7.2(d) either with or without giving notice to any person, except for notices required under applicable law. Any amounts disbursed by the Beneficiary pursuant to this paragraph shall become additional indebtedness secured by this Deed of Trust.
(e) UCC Remedies. The Beneficiary may exercise any or all of the remedies granted to a secured party under the UCC.
(f) Judicial Action. The Beneficiary may bring an action in any court of competent jurisdiction to foreclose this Deed of Trust in the manner provided by law for foreclosure of mortgages on real property and/or to obtain specific enforcement of any of the covenants or agreements of this Deed of Trust.
(g) Power of Sale. Under the power of sale hereby granted, the Beneficiary shall have the discretionary right to cause some or all of the Property, including any Property which constitutes personal property, to be sold or otherwise disposed of in any combination and in any manner permitted by applicable law.

6.3 Power of Sale. If the Beneficiary elects to invoke the power of sale hereby granted, the Beneficiary shall execute or cause the Trustee to execute a written notice of such default and of its election to cause the Property to be sold to satisfy the obligations hereof, and shall cause such notice to be recorded in the office of the Recorder of each County wherein the Property or some part thereof is situated.

Prior to publication of the notice of sale, the Beneficiary shall deliver to the Trustee this Deed of Trust and the Note or other evidence of indebtedness which is secured hereby, together with a written request for the Trustee to proceed with a sale of the Property, pursuant to the provisions of law and this Deed of Trust. #5..
- 96 -
2966889.1 12
Notice of sale having been given as then required by law, and not less than the time then required by law having elapsed after recordation of such notice of default, the Trustee, without demand on the Trustor, shall sell the Property at the time and place fixed by it in the notice of sale, either as a whole or in separate parcels and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. The Trustee may, and at the Beneficiary’s request shall, postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time and place fixed by the preceding postponement. The Trustee shall deliver to the purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including the Trustor, the Trustee, or the Beneficiary, may purchase at such sale.

After deducting all costs, fees, and expenses of the Trustee and of the trust hereby created, including reasonable attorneys’ fees in connection with sale, the Trustee shall apply the proceeds of sale to payment of all sums advanced or expended by the Beneficiary or the Trustee under the terms hereof and all outstanding sums then secured hereby, and the remainder, if any, to the person or persons legally entitled thereto.

6.4 Trustee Substitution. The irrevocable power to appoint a substitute trustee or trustees hereunder is hereby expressly granted to the Beneficiary, to be exercised at any time hereafter, without specifying any reason therefor, by filing for record in the office where this Deed of Trust is recorded a deed of appointment, and said power of appointment of successor trustee or trustees may be exercised as often as and whenever the Beneficiary deems advisable. The exercise of said power of appointment, no matter how often, shall not be deemed an exhaustion thereof, and upon recording of such deed or deeds of appointment, the trustee or trustees so appointed shall thereupon, without further act or deed of conveyance, succeed to and become fully vested with identically the same title and estate in and to the Property hereby conveyed and with all the rights, powers, trusts and duties of the predecessor in the trust hereunder, with the like effect as if originally named as trustee or as one of the trustees.

6.5 Trustor's Waivers. To the fullest extent permitted by law, the Trustor waives: (a) all statutes of limitations as a defense to any action or proceeding brought against the Trustor by the Beneficiary; (b) the benefit of all laws now existing or which may hereafter be enacted providing for any appraisement, valuation, stay, extension, redemption or moratorium; (c) all rights of marshalling in the event of foreclosure; and (d) all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, notices of acceptance of this Deed of Trust and of the existence, creation, or incurring of new or additional indebtedness, and demands and notices of every kind.
#5..
- 97 -
2966889.1 13

7. Miscellaneous Provisions.

7.1 Successors and Assigns. The covenants and agreements contained in this Deed of Trust shall bind, and the benefit and advantages hereunder shall inure to, the respective heirs, executors, administrators, successors and assigns of the parties; provided however, nothing in this Section is intended to or shall modify any restrictions on assignment set forth herein or in the Note or Agreement. As used herein, the words “the Beneficiary” means the present Beneficiary or any future owner or holder, including a pledgee of the indebtedness secured hereby.

7.2 Headings; Gender, Number. The captions and headings used in this Deed of Trust are inserted only for convenience of reference and in no way define, limit, or describe the scope or intent of this Deed of Trust, or of any particular provision thereof, or the proper construction thereof. Wherever used, the singular number shall include the plural, and the plural the singular, and the use of any gender shall be applicable to all genders.

7.3 Approvals in Writing. Except as otherwise specifically provided herein, whenever any approval, notice, direction, consent, request or other action by the Beneficiary is required or permitted under this Deed of Trust, such action shall be in writing.

7.4 Joint and Several Obligations. If more than one person has executed this Deed of Trust as Trustor, the obligations of all such persons hereunder shall be joint and several.

7.5 Severability. If any provision of this Deed of Trust shall be held by a court of competent jurisdiction to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby.

7.6 Notices. Except for any notice required under applicable law to be given in another manner (a) any notice to Trustor provided for in this Deed of Trust shall be given by mailing such notice by certified mail directed to the Property address or any other address Trustor designates by notice to Beneficiary as provided herein; and, (b) any notice to Beneficiary shall be given by certified mail, return receipt requested, to Beneficiary’s mailing address stated herein or to such other address as Beneficiary may designate by notice to Trustor as provided herein. Any notice provided for in this Deed of Trust shall deem to have been given to Trustor or Beneficiary when given in the manner designated herein.

Beneficiary: City of Modesto
P.O. Box 642
Modesto, CA 95353
Attn: Community and Economic Development Dept.
#5..
- 98 -
2966889.1 14
Trustor: Christopher Gates
Stacy Gates
1125 Springcreek Drive
Modesto, CA 95355

7.7 Waiver, Modification and Amendment. Each waiver by the Beneficiary or the Trustee must be in writing, and no waiver shall be construed as a continuing waiver.

No waiver shall be implied from any delay or failure by the Beneficiary or the Trustee to take action on account of any default of the Trustor. Consent by the Beneficiary or the Trustee to any act or omission by the Trustor shall not be construed as a consent to any other or subsequent act or omission or to waive the requirement for the Beneficiary's or the Trustee's consent to be obtained in any future or other instance. No amendment to or modification of this Deed of Trust shall be effective unless and until such amendment or modification is in writing, executed by the Trustor and the Beneficiary. Without limiting the generality of the foregoing, the Beneficiary’s acceptance of payment of any sum secured hereby after its due date shall not constitute a waiver by the Beneficiary of its right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay.

7.8 Governing Law. This Deed of Trust shall be governed by the laws of the State of California without regard to principles of conflicts of laws. The Trustor agrees that any controversy arising under or in relation to this Deed of Trust shall be litigated exclusively in Stanislaus County.

IN WITNESS WHEREOF, the Trustor has executed this Deed of Trust as of the date first written above.

TRUSTOR
By: _______________________
Christopher Gates
By: _______________________
Stacy Gates
#5..
- 99 -
2966889.1 15
Exhibit A
LAND
Description: Lot 7, in Block 1710 of Springcreek No. 2, as per map filed on March 22, 1977 in Book 26 of Maps, Page 64, Stanislaus County Records. Certificate of Correction recorded March 14, 1978 in Book 3030 of official records, at page 800, as instrument No. 57997, Stanislaus County Records.

APN: 068-004-060
#5..
- 100 -

CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

October 25, 2022
Date: September 27, 2022
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Jaylen French, Director of Community and Economic Development SUBJECT: Will Serve Letter and Outside Service Agreement for sewer service for the property located at 2117 Parr Avenue
CONTACT: Toby Wells, City Engineer, [email protected], 209-571-5542 DESCRIPTION:

Consider approving a Will Serve Letter and Outside Service Agreement for Sewer Service for the property located at 2117 Parr Avenue (APN: 081-022-020). (Funding Sources: Sewer Fund, General Fund)
STRATEGIC PLAN ELEMENT:

This action supports the City Council’s 2020-2025 Strategic Plan, Goal D Ensure Safe, Efficient and Reliable Infrastructure.

BACKGROUND:

Panna YI and Ravin YI, own a property located at 2117 Parr Avenue, which is outside the Modesto City Limits but is within the City’s sphere of influence.

There is an existing residence on the property with a failing septic tank. The property owner submitted an application to the City requesting a sewer connection to serve the existing residence.

DISCUSSION:

On May 22, 2012, by Resolutions 2012-202 and 203, Council approved amending City Council Policy 5.001 and 5.002 relating to water and sewer service connections into unincorporated areas. On June 5, 2012, the Council approved final adoption of Ordinance 3566-C.S. and 3567-C.S. amending City of Modesto Municipal Code Section 11-1.05. Both of these amendments included language which required that the City Manager, upon the recommendation of the Director responsible for utility system planning, request City Council approval for all extensions of water services into unincorporated areas.

On November 25, 2014, Council approved Resolution 2014-473 amending City Council Policy

5.002. On December 9, 2014, the Council approved adoption of Ordinance 3612-C.S. #6..
- 101 -
City Council, October 25, 2022
Will Serve Letter and Outside Service Agreement for sewer service for the property located at 2117 Parr Avenue

amending City Municipal Code Section 11-1.05. Both of these amendments included language allowing the City Manager, upon the recommendation of the Director responsible for utility system planning, to approve standard agreements of service for extension of sewer services into certain unincorporated areas without Council approval. However, the subject parcel is not located within one of those designated areas and therefore requires Council approval prior to allowing the sewer connection.

Sewer service may be granted to properties outside the City limits, as described in City Council Policy 5.002, if it is determined that it is reasonable for the City to extend sewer service to the property.

Staff conducted an analysis and determined that it is reasonable to extend service to this property. The property owner will enter into agreement with the City as required for sewer service outside the City limits.

FISCAL IMPACT:

Applicant has paid the following fees:

1. Will Serve Letter - Sewer - $494.16

2. Outside Service Agreement - Sewer - $215.43
The above fees were deposited into the General Fund for staff time spent to process both the Will Serve Letter and Outside Service Agreement. There are no other direct impacts to the General Fund.

Sewer connection fees will be determined and collected at the time that the County building permit is issued, or a separate sewer permit is issued for the construction of the sewer line to the property.

COMMITTEE RECOMMENDATION:

Will Serve Letters and Outside Service Agreements approvals are not heard by Committee; therefore, this item was not presented at Committee.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving a Will Serve Letter and Outside Service Agreement for Sewer Service for the property located at 2117 Parr Avenue in Modesto (APN: 081-022-020), and authorizing the City Manager, or his designee, to sign the Will Serve Letter and execute the Outside Service Agreement.

Approved by:

Jaylen French, Director of Community and
Economic Development
Joseph P. Lopez, City Manager
#6..
- 102 -
City Council, October 25, 2022
Will Serve Letter and Outside Service Agreement for sewer service for the property located at 2117 Parr Avenue

Attachments:

1. Resolution

2. Will Serve Letter

3. Outside Service Agreement

4. Sewer Map
#6..
- 103 -
1 3/03/22/CED&D 2018-

MODESTO CITY COUNCIL
RESOLUTION NO. 2022-

RESOLUTION APPROVING A WILL SERVE LETTER AND OUTSIDE SERVICE AGREEMENT FOR SEWER SERVICE FOR THE PROPERTY LOCATED AT 2117 PARR AVENUE (APN: 081-022-020), AND AUTHORIZING THE CITY MANAGER, OR

HIS DESIGNEE, TO SIGN THE WILL SERVE LETTER AND EXECUTE THE

OUTSIDE SERVICE AGREEMENT
WHEREAS, Panna YI and Ravin YI, own a single-family house located at 2117 Parr Avenue which is located outside of Modesto City Limits and inside the City’s Sphere of Influence, and
WHEREAS, the property located at 2117 Parr Avenue , is not connected to City’s sewer system and is requesting a sewer connection for to the existing house, and WHEREAS, on November 25, 2014, City Council approved Resolution No. 2014-473 amending City Council Policy 5.002, and
WHEREAS, on December 9, 2014, City Council approved adoption of Ordinance No.3612-C.S. amending City of Modesto Municipal Code Section 11-1.05, and WHEREAS both of these amendments included language allowing the City Manager, upon the recommendation of the Director responsible for utility system planning to approve standard agreements of service for extension of sewer services into certain unincorporated areas without City Council approval, and WHEREAS, the property located at 2117 Parr Avenue is not located within one of those designated areas and therefore requires City Council approval prior to allowing the sewer connection, and
WHEREAS, City staff has completed an analysis and determined that it is reasonable for the City of Modesto to provide sewer service to this property, and #6..
- 104 -
2 3/03/22/CED&D 2018-
WHEREAS, consistent with adopted LAFCO Policy 15, the extension of sewer service is proposed to remedy a health and safety concern in an area with an existing sewer system, and
WHEREAS, the sewer connection fees shall be paid and associated permits will be obtained prior to connecting to the City sewer system, and WHEREAS, the property owner has executed an Outside Service Agreement for sewer service with the City as required to receive sewer service outside the City limits.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves the Will Serve Letter and Outside Service Agreement for sewer service for the property located at 2117 Parr Avenue (APN: 081-022-020) in Modesto.

BE IT FURTHER RESOLVED that the City Manager, or his designee, is hereby authorized to approve the Will Serve letter and execute the Outside Service Agreement for sewer service.
#6..
- 105 -
3 3/03/22/CED&D 2018-
The foregoing documents were introduced at a regular meeting of the Council of the City of Modesto held on the 25th day of October, by Councilmember , who moved its adoption, which motion being duly seconded by Councilmember , was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST: _________________________________
DIANE NAYARES-PEREZ, City Clerk
(SEAL)
APPROVED AS TO FORM:

By: ______________________________
JOSE M. SANCHEZ, City Attorney
#6..
- 106 -
Community and Economic
Development Department
Land Development
Engineering Division
P.O. Box 642
Modesto, California 95354
209.577.5200
Modestogov.com
June 22, 2022
Mr. Panna Yi
2212 Blue Gum Avenue
Modesto, Ca 95358
Subject: Sewer Will Serve Letter for 2117 Parr Avenue (APN: 081-022-020) Dear Mr. Yi:

As requested in your application dated June 22, 2022 the existing Single-Family House, located at 2117 Parr Avenue (APN: 081-022-022), will be allowed to make a single sewer service connection to the City’s sewer system to accommodate normal usage as described below.

Sewer Service:

Pursuant to Modesto City Council Resolution No. 91-434 that establishes various conditions for the extension of sewer services into unincorporated areas, it has been determined that a connection to the City’s sewer system will be allowed to accommodate normal usage by the proposed development.

In general, Resolution No. 91-434 provides that sewer service extensions may be approved by the City Manager, on a case-by-case basis, to properties located outside the Modesto Municipal Sewer District No. 1, but within the Ultimate Sewer Service Area, when all of the following conditions are met:

1. The sewer system in which the service connection will be made has sufficient capacity to receive the amount and type of discharge expected from the proposed facility.

2. An appropriately sized sewer line or manhole exists relatively close to the subject property to serve as the connection point.

3. That all applicable water and sewer connection fees are paid and associated permits be obtained prior to beginning any on-site construction. The property owner agrees to pay all associated monthly water and sewer service charges. #6..
- 107 -

4. The property owner must execute an outside service agreement with the City of Modesto.

5. In addition to the above requirements, the following items are specific conditions on the proposed project:

6. That the project’s proposed sewer demands will not change significantly from the above reference letter.

7. The property owner shall connect to the existing 8- inch sewer main in Rose more Avenue . Design of the connecting sewer main shall be per City Standards and by a registered engineer authorized to perform such work. The proposed design shall be approved by the City and all costs associated with its design, installation, and permits shall be borne by the property owner.

8. That the property owner enters into a standard sewer service agreement with the City, as required for sewer service outside the City limits. For starting the agreement process, you can contact Deborah Vilmur at (209) 342- 4712 for more information.

On May 22, 2012, the City Council approved Resolution No. 2012-203 that amended City Council Policy 5.002 relating to sewer connection into unincorporated areas. On June 5, 2012, the City Council approved final adoption of Ordinance No. 3567-C.S. amending City of Modesto Municipal Code Section 11-1.05. Both of these amendments included language which required that the City Manager, upon the recommendation of the Director responsible for utility system planning, request City Council approval for all extensions of sewer services into unincorporated areas.

Construction of the sewer service connection identified to serve the above referenced property shall be completed prior to twelve (12) months from the City Council date of this letter, and if after such time the service connections have not been made, the City’s approval of said connections will be revoked.

If you have any questions, please contact Eva Dankha-Kelly at (209) 571-5120.

Recommended By: _______________________________
Eva Dankha-Kelly, Associate Engineer
Sincerely,
City Manager
#6..
- 108 -
cc: William Wong, Director of Utilities
Jim Alves- Utilities
Kerrie Freeman- Stanislaus County- PW
Robert Englent- Wastewater- Utilities
Thomas Sinclair- Environmental Compliance- Utilities
#6..
- 109 -
#6..
- 110 -
#6..
- 111 -
#6..
- 112 -
#6..
- 113 -
#6..
- 114 -
#6..
- 115 -
#6..
- 116 -
#6..
- 117 -
#6..
- 118 -
#6..
- 119 -
#6..
- 120 -
ArcGIS Web Map
Jurisdiction
COUNTY

MODESTO
Sewer Lines
MAIN
Sewer Laterals
Sewer Manholes
Regular
Terminal
Lamphole
September 27, 2022
0 0.01 0.03 0.05 mi
0 0.02 0.04 0.09 km
1:1,200
Web AppBuilder for ArcGIS
#6..
- 121 -

CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

October 25, 2022
Date: September 27, 2022
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: DeAnna Christensen, Director of Finance
William Wong, Director of Utilities
SUBJECT: One-Time Purchase for Five Hayward Gordon Pumps CONTACT: Cynthia Kline, Purchasing Manager, [email protected], 209-577-5412 DESCRIPTION:

Consider approving a one-time purchase for five Hayward Gordon Pumps from Hayward Gordon Group, Ontario, Canada, for an amount not to exceed of $135,278. (Funding Source:

Wastewater Fund)
STRATEGIC PLAN ELEMENT:

This item supports the City of Modesto 2020-2025 Strategic Plan Focus of Governance and Service Delivery under goal H: Achieve Financial Sustainability.

BACKGROUND:

The City of Modesto, Utilities Department, Wastewater Treatment currently has a total of six Hayward Gordon pumps for the grit removal process at the Headworks in operation currently. A total of five Hayward Gordon pumps have been in operation since 2014. One of the pumps was installed during the Headworks Capital Improvement Program (CIP) which has been in operation for the past year. The other five pumps have reached their end-of-life operation due to the grit material that they pump from the Grit Vortex basins.

The grit system piping, pump pedestals, control, power supply and flows have all been designed around these pumps. City staff can make system changes but using a direct replacement pump which has proven design, performance, and reliability in this specific application for more than 25 years, is believed to be cost effective and it is not advised to purchase something other than original design. Although, this looks to be an expensive purchase, the life of these specific pumps has an extremely good return on investment. Having the capability of refurbishing the volutes and exterior impeller adjustments, allows our Maintenance teams the ability and confidence in maintaining the system.

If City staff were to change out the pumps to a different brand it could lead to additional cost, estimated at $60,000 or more. These costs – could include materials associated with the #7..
- 122 -
Council Meeting, October 25, 2022
One-Time Purchase for Five Hayward Gordon Pumps

possibility of needing to reconfigure the piping, control, and power wiring, removing, and replacing pump pedestal, new guards, and alignment. The direct replacement allows City staff to replace the pumps as needed when the failure either happens or when scheduled to be replaced.

DISCUSSION:

The City of Modesto, Utilities Department, Wastewater Treatment plant is requesting a one-time purchase of five Hayward Gordon Pumps. This purchase would be a direct replacement for pumps currently in operation that have reached their end-of-life operation.

Modesto Municipal Code Section 8-3.203 generally requires all purchases, which meet or exceed $50,000 for material, equipment, or contractual services, to be formally bid. However, MMC 8-3.204(b) provides that a purchase may be exempted from the City’s formal bidding requirements where the Purchasing Agency’s requirements can be met solely by a single article or process. Additionally, this one-time purchase of five Hayward Gordon Pumps should be exempt from the formal bidding procedure in accordance with Modesto Municipal Code 8-

3.204(b) because Hayward Gordon is the original equipment manufacturer. Therefore, this onetime purchase qualifies for exemption from the formal bidding procedures.

FISCAL IMPACTS:

Funds to cover the costs associated with this purchase will be budgeted in the Wastewater Fund in account 4210-44316-53150.

COMMITTEE RECOMMENDATION:

This item was presented to the Finance Committee on September 26, 2022, with a recommendation to forward to Council for approval.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving a one-time purchase for five Hayward Gordon Pumps from Hayward Gordon Group, Ontario, Canada, for an amount not to exceed of $135,278, and authorizing the Director of Finance, or her designee to execute the Purchase Order.

Approved by:
_________________________________________
DeAnna Christensen, Director of Finance
_________________________________________
William Wong, Director of Utilities
Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. Financial Interest Disclosure

3. Quote

4. Bid Waiver
#7..
- 123 -

MODESTO CITY COUNCIL
RESOLUTION NO. 2022-

RESOLUTION APPROVING A ONE-TIME PURCHASE FOR FIVE HAYWARD

GORDON PUMPS FROM HAYWARD GORDON GROUP, ONTARIO,
CANADA, FOR AN AMOUNT NOT TO EXCEED OF $135,278, AND

AUTHORIZING THE DIRECTOR OF FINANCE, OR HER DESIGNEE TO

EXECUTE THE PURCHASE ORDER
WHEREAS, the City of Modesto, Utilities Department, Wastewater Treatment currently has a total of six Hayward Gordon pumps for the grit removal process at the Headworks in operation currently; and
WHEREAS, a total of five Hayward Gordon pumps have been in operation since 2014. One of the pumps was installed during the Headworks Capital Improvement Program (CIP) which has been in operation for the past year; and WHEREAS, the grit system piping, pump pedestals, control, power supply and flows have all been designed around these pumps. City staff can make system changes but using a direct replacement pump which has proven design, performance, and reliability in this specific application for more than 25 years, is believed to be cost effective and it is not advised to purchase something other than original design; and WHEREAS, if City staff were to change out the pumps to a different brand it could lead to additional cost, estimated at $60,000 or more; and WHEREAS, Modesto Municipal Code Section 8-3.203 generally requires all purchases, which meet or exceed $50,000 for material, equipment, or contractual services, to be formally bid. However, MMC 8-3.204(b) provides that a purchase may be exempted from the City’s formal bidding requirement where the Purchasing Agency’s requirements can be met solely by a single article or process. Additionally, this one-time purchase of five Hayward Gordon Pumps qualifies for exemption from the formal #7..
- 124 -
bidding procedure in accordance with Modesto Municipal Code 8-3.204(b) because Hayward Gordon is the original equipment manufacturer.

NOW THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves this one-time purchase for five Hayward Gordon pumps from Hayward Gordon Group, Ontario, Canada, for an amount not to exceed of $135,278.

BE IT FURTHER RESOLVED that the Director of Finance, or her designee, is hereby authorized to execute the purchase order, in a form approved by the City Attorney.

The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 25th day of October, 2022, by Councilmember, who moved its adoption, which motion being duly seconded by Councilmember, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

Attest: _____

DIANE NAYARES-PERES, CMC,
City Clerk
APPROVED AS TO FORM:

BY:

JOSE M. SANCHEZ, City Attorney
#7..
- 125 -
#7..
- 126 -
#7..
- 127 -
5 Brigden Gate
Halton Hills, ON L7G 0A3
[email protected]
www.haywardgordon.com
Hayward Gordon ULC
5 Brigden Gate ∙ Halton Hills ∙ ON ∙ CANADA ∙ L7G 0A3
T: 905‐693‐8595
https://haywardgordon.com
nQUOTATION FOR HAYWARD GORDON SOLIDS HANDLING
PUMPS
Date: 4/27/2022 Project Reference: Modesto XR3‐11 Pumps Quotation No.: Q2‐68908‐P2B5 Rev. 0 Equipment Reference:

Customer: MISCO Water Delivery: 18 weeks
5976 West Las Positas Boulevard, Incoterms: DDP jobsite Suite 226 Freight: PREPAID
Pleasanton Terms of Payment:

CA Taxes: Not Included
94588 Price Validity 60 days
Currency: US $
Salesperson: Jesse James
Attention: Sandy Clarke Submitted By: Paul Grodde
PRODUCT:

QTY MODEL UNIT SELL PRICE LOT SELL PRICE
5 HAYWARD GORDON XR3(11) BARE PUMP $23,690.00 $118,450.00 Sales Tax @ 7.875% $9,327.94
Freight – estimate to be billed at actual amount $7,500.00 Total $135,277.94
CONSTRUCTION DETAILS:

Wet End: ASTM A532 Super Ni‐Hard (650BHN) Casing, Impeller and Wearplate Seal: Chesterton 442C Single Cartridge Seal (SC/SC) ‐ Clean Water Flush Required Ports/Flanges: 4" suction x 3" discharge ‐ 125#RF
Motor Details: Provided by others
Drive: Bare Pump‐Drive by others
Guard: Provided by others
Base/Coverplate: Provided by others
Pump Setting: Bare Pump
APPLICATION DETAILS:

Fluid: Grit Impeller Diameter: Solids:

Capacity: 250 GPM Viscosity: NPSHR: Flooded
Head: 41 ft Temperature: Ambient
Pump RPM: 1150 RPM Specific Gravity: 1.00
REMARKS:

As of the date of this quote and due to the COVID‐19 pandemic, the Hayward Gordon Group of companies have taken every precaution to minimize our product delivery schedules to our valued Customers. However due to Federal, State or Provincial mandated restrictions, the Seller may be required to adjust our product delivery lead‐times accordingly.
#7..
- 128 -
5 Brigden Gate
Halton Hills, ON L7G 0A3
[email protected]
www.haywardgordon.com
Hayward Gordon ULC
5 Brigden Gate ∙ Halton Hills ∙ ON ∙ CANADA ∙ L7G 0A3
T: 905‐693‐8595
https://haywardgordon.com
By accepting and issuing a formal purchase order in reference to one of the Hayward Gordon Group of companies 1) Hayward Gordon ULC or 2) Sharpe Mixers, Inc. or 3) Scott Turbon Mixer, Inc. quotes, hereinafter referred to as “Seller”, Seller will confirm a ship date of the order based upon the then current environmental impact on the manufacturing schedule. #7..
- 129 -
5 Brigden Gate
Halton Hills, ON L7G 0A3
[email protected]
www.haywardgordon.com
Hayward Gordon ULC
5 Brigden Gate ∙ Halton Hills ∙ ON ∙ CANADA ∙ L7G 0A3
T: 905‐693‐8595
https://haywardgordon.com
In the event that due to the COVID‐19 pandemic, order fulfilment has to be delayed, Seller will provide notice to you our valued customer. Either Party reserves the right to suspend work on this order, if operations are required to shut down due to the COVID‐19 pandemic, for a period of (2) months or longer, at which point both Seller and Buyer will mutually review and either party may terminate with written notification. Buyer agrees to pay Seller for the value of the “unpaid” work performed by Seller, at the date of the termination.

GENERAL COMMENTS:

1. Price validity is based on receipt of complete approval and release for production no more than eight weeks after drawings have been submitted by Hayward Gordon ULC.

2. Hayward Gordon ULC’s standard Terms and Conditions of Sale apply and are an integral part of this quotation unless specifically noted otherwise in this proposal.

3. All start‐up and instructional services not included unless specifically noted otherwise in this proposal.

4. All starters and control equipment are not within Hayward Gordon ULC’s scope of supply and are to be supplied by others unless specifically noted otherwise in this proposal.

5. This proposal does not include installation, wiring, field painting or any other items except as specifically described above. #7..
- 130 -
5 Brigden Gate
Halton Hills, ON L7G 0A3
[email protected]
www.haywardgordon.com
Hayward Gordon ULC
5 Brigden Gate ∙ Halton Hills ∙ ON ∙ CANADA ∙ L7G 0A3
T: 905‐693‐8595
https://haywardgordon.com

TERMS AND CONDITIONS OF SALE

FORMATION OF AGREEMENT
These Terms and Conditions of Sale apply to the purchase of Products, Services, or both, by Buyer from Hayward Gordon ULC (hereinafter referred to as “Seller”), each as identified in Seller’s quote. These Terms and Conditions, together with Seller’s quote, comprise the entire agreement between the parties (the “Agreement”).

Seller’s agreement to furnish Product or Services is expressly conditioned on Buyer’s agreement to these Terms and Conditions. An order for Products, Services or both, constitutes Buyer’s acceptance of these terms and conditions. Seller rejects any terms, conditions, or warranties in Buyer’s purchase order or other document or communication that are additional to or differ from those set out in this Agreement, unless set out in writing and signed by Seller’s authorized representative.

PRICES
Quotes. Prices in Seller’s quote are valid for 30 days from the date of the quote unless otherwise specified in writing.

Currency. Prices are in the currency specified in Seller’s quote. If no currency is specified, prices to buyers located in Canada are in Canadian dollars and prices to all other buyers are in US dollars.

Taxes excluded. Prices do not include any Taxes related to the Products or Services supplied under this Agreement, which are the responsibility of Buyer, unless Buyer presents a waiver or an exemption certificate acceptable to Seller.

PAYMENT
Terms. Buyer will pay all invoiced amounts in full, without deduction, back charge or set‐off, within 30 days from the date of Seller’s invoice. Payment is not contingent on Buyer receiving payment from Buyer’s customer.

Late Payment. If payment is not made when required, Seller may at its option take one or more of the following actions: (i) treat such failure as a repudiation of all or a portion of the order that has not been fully performed and immediately suspend performance, (ii) continue production and make shipment under reservation of title or a security interest, and demand payment against tender of documents of title; (iii) charge interest at the lesser of

1.5 % per month and the maximum rate permitted under applicable law, from the due date until paid, plus Seller’s reasonable costs of collection; and (iv) Buyer agrees that Seller may enter the premises where any Products for which Buyer has not paid are located, repossess such Products whatever the mode of their attachment to realty or other property, sell the repossessed Products, apply the proceeds to the overdue payment, and recover any deficiency from Buyer.

DELIVERY, RISK, TITLE
Delivery dates. Delivery dates stated in advance of shipment, including in Seller’s quote, are estimates only and are not guaranteed. Seller will not be liable for or penalized as a result of delays in shipment for any cause. Seller reserves the right, upon prior notice to Buyer, to make partial deliveries or partial performance, which may be separately invoiced.

Buyer Delay. If Products cannot be shipped to or received by Buyer when ready because of any cause attributable to Buyer or its other contractors, Seller may store the Products at the sole expense and risk of Buyer; in such case, Seller will invoice Buyer and terms of payment will apply as if delivery had been made on the original delivery date.

Damage/Shortage. Claims for damages or shortages must be made within 5 days after receipt of Products.

CHANGES
Orders accepted by Seller are not subject to change or cancellation by Buyer, except with Seller’s written consent. Where Seller authorizes changes (including changes to specifications, and special packaging, tests or inspections in addition to Seller’s normal procedures and not set out in Seller’s Quote), Seller may charge Buyer reasonable costs of such change.

Seller will make every effort to maintain initial prices throughout the drawing and submittals process. For the avoidance of doubt, in the instance of any change and resubmittal Seller reserves the right to adjust the price in accordance with equity and necessity.

Further, should the Buyer not respond to confirm drawings and submittals within 30 days the initial price quoted may no longer be valid and may be subject to change in accordance with equity and necessity.

INSTALLATION
All Products will be installed by and at the risk and expense of Buyer, unless otherwise specified in Seller’s quote or agreed to in writing.

WARRANTY
#7..
- 131 -
5 Brigden Gate
Halton Hills, ON L7G 0A3
[email protected]
www.haywardgordon.com
Hayward Gordon ULC
5 Brigden Gate ∙ Halton Hills ∙ ON ∙ CANADA ∙ L7G 0A3
T: 905‐693‐8595
https://haywardgordon.com
Warranty. Seller warrants that during the warranty period:
(a) all Products sold by it to Buyer pursuant to the Agreement, when properly stored, installed, used and maintained by Buyer, will in all material respects, conform to the specifications and be free from defects in materials and workmanship under normal usage; and (b) the Services performed by Seller will be performed in a good and workmanlike manner in accordance with any mutually agreed specifications.

Warranty Period. The warranty period for Products is one year from date of shipment.

Warranty Claims/Seller’s Obligations. A claim must be submitted in writing, within 30 days of discovery, within the warranty period, to give rise to Seller’s obligations. Seller’s sole liability and Buyer’s exclusive remedy for a breach of this warranty is limited to repair or replacement by Seller, in the case of the Product warranty, and re‐performance by Seller in the case of the Services warranty. Such repair, replacement or re‐performance will not
extend the warranty period. Seller may require access to complete and accurate records of operation and maintenance during the warranty period, or the return of defective parts, freight prepaid, before a warranty claim is recognized. Third‐party components. Products may contain components from third party manufacturers. Seller will use reasonable commercial efforts to extend to Buyer the benefit of any warranty given by the component manufacturer to Seller where the third party manufacturer permits it to do so.

No other warranties.

All other warranties, representations, terms and conditions (express, implied or statutory) as to quality, condition, description, merchantability, fitness for purpose, compliance with sample, or non‐infringement (except implied warranty of title) are expressly excluded to the fullest extent permitted by law.

LIMITATION OF LIABILITY
Exclusions. Without limiting the foregoing, Seller will have no liability in respect of:
(i) failure to follow Seller’s use restrictions, specifications, recommendations or instructions or any misuse of the Products; (ii) any alteration, modification, repair, or enhancement of the Products by Buyer or any third party without Seller’s prior written consent;(iii) any defect in the Product arising from designs, specifications or materials supplied by Buyer; (iv) any shipping, storage or working conditions different than those advised by Buyer after Seller’s delivery of Products to Buyer; (v) chemical attack or wear; (vi) normal wear and tear; (vii) accident; (viii) fraud, negligence or wilful misconduct of Buyer or any of its affiliates or representatives; (ix) any Product for which the purchase price has not been paid in full in accordance with the Agreement.

Limitation.
(i) In no event will Seller’ liability, in the aggregate, for damages arising out of the use of the Product or Services, or arising under this Agreement, whether in contract, tort (including negligence), or otherwise, to Buyer or any other person exceed the amount paid by Buyer to Seller under the Agreement for the Products or Services to which such claim or damages relates; (ii) Seller will not be liable for loss of profit or revenues, loss of use of equipment or systems, loss or deferral of production, interruption of business or loss of contract, loss of use, increased operating costs, or claims of Buyer’s customers for any of the foregoing, any special, consequential, incidental, indirect, or punitive damages, whether or not foreseeable at the date of Seller starting performance of the Agreement and even if Seller is advised in advance of the possibility of any such loss or damages

INDEMNITY
Each party will indemnify the other party from and against claims brought by a third party, on account of personal injury or damage to the third party's tangible property, to the extent caused by the negligence of the indemnifying party in connection with this Agreement. If the injury or damage is caused by joint or concurrent negligence of Buyer and Seller, the loss or expense will be borne by each party in proportion to its degree of negligence.

For purposes of Seller's indemnity obligation, no part of a Product is considered third party property, and “third party” does not include Buyer or any subsequent owner of the Products, their subsidiaries, parents, affiliates, agents, successors or assigns, including any operation or maintenance contractor, or their insurer.

EXCUSED PERFORMANCE/FORCE MAJEURE
A party will not be liable in respect of the non‐performance of any of its obligations to the extent such performance is prevented by any circumstances beyond its reasonable control including but not limited to, strikes, lock‐outs or labour disputes of any kind (whether relating to its own employees or others), fire, flood, explosion, natural catastrophe, military operations, blockade, sabotage, revolution, riot, civil commotion, war or civil war, acts or threats of terrorism. If such an event occurs, the time for performance will be extended by the amount of time lost by reason of the event plus such additional time as may be needed to overcome the effect of the event.

GOVERNING LAW
#7..
- 132 -
5 Brigden Gate
Halton Hills, ON L7G 0A3
[email protected]
www.haywardgordon.com
Hayward Gordon ULC
5 Brigden Gate ∙ Halton Hills ∙ ON ∙ CANADA ∙ L7G 0A3
T: 905‐693‐8595
https://haywardgordon.com
Unless otherwise agreed to in writing, the laws of the jurisdiction from which Seller ships the Product(s) will govern the interpretation and construction of this Agreement, and the Parties agree to submit to the exclusive jurisdiction of the courts of such jurisdiction.

Waiver. No waiver of any of the provisions of this Agreement will constitute a waiver of any other provision (whether or not similar).

Severability. If any provision of this Agreement is determined to be illegal, invalid or unenforceable, that provision will be severed from this Agreement and the remaining provisions will remain in full force and effect Assignment/Subcontracting. Seller may assign or novate its rights and obligations under this Agreement, in whole or in part, to any of its affiliates.

Seller may subcontract portions of the work to any third party. #7..
- 133 -
#7..
- 134 -
#7..
- 135 -

CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

October 25, 2022
Date: September 16, 2022
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: DeAnna Christensen, Director of Finance
SUBJECT: External Auditing Services Agreement
CONTACT: Cynthia Kline, Purchasing Manager, 209-577-5412, [email protected] DESCRIPTION:

Consider approving the Award of Proposal and Agreement for the Furnishing of External Auditing Services to Vasquez and Company LLC, Glendale, California, for a three (3) year Agreement with two (2) one-year extension options, for an estimated annual cost of $142,228, and over five (5) years of $715,000. (Funding Source: General Fund, Housing Urban Development Funds, Utility Funds, Community Facility Districts, and Ceres-Modesto Industrial Fire District)
STRATEGIC PLAN ELEMENT:

This item supports the City of Modesto 2020-2025 Strategic Plan focus of Governance and Service Delivery under Goal H: Achieve Financial Sustainability.

BACKGROUND:

Under Section 1306 of the Modesto City Charter requires the Council to employ independent auditors to perform an annual financial audit of the City to examine the financial records managed by City employees.

The City requests an external auditor to express an opinion on the fair presentation of its basic financial statements and schedule of expenditures from federal awards in conformity with generally accepted accounting principles, the provisions of the Federal Single Audit Act Amendments of 1996 and Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The auditor is required to express an opinion on the compliance for each major federal program as part of the single audit. The auditor will report any identified material weaknesses or significant deficiencies in internal control.

The City is the financial administrator for five (5) joint power agencies/program audits and twelve (12) Community Facilities Districts and will require the financial statement compilation and express an opinion on the financial statements and programs for these funds. The five (5) joint power agencies and program audits include the following:
#8..
- 136 -
City Council, October 25, 2022
External Auditing Services Agreement

1) Tuolumne River Regional Park (TRRP)
2) Ceres-Modesto Industrial Fire Protection JPA
3) Measure L - Local Roads First Transportation Funding Measure 4) Local Transportation Funds (LTF) - Streets and Roads and Non-motorized funds under Transportation Development Act (TDA)
5) Abandoned Vehicle Abatement (AVA)
In addition, the City is required to file the Annual State Controllers Report Financial Transaction Report to the State of California to provide fiscal year financial data and statistical information.

This report is prepared by this audit firm as part of this agreement and reviewed by City staff.

DISCUSSION:

The City Manager authorized the Purchasing Manager to issue formal Request for Proposals (RFP) for the furnishing of external auditing services.

The Purchasing Division issued RFP No. 2122-40 for external auditing services on PlanetBids via the City’s website under nine (9) commodity codes1. Prospective proposers were notified online and via email of the bid opportunity. Twenty (20) companies chose to download the RFP document.

On April 26, 2022, proposals were formally opened by the City Clerk’s Office and broadcast via Microsoft Teams Livestream. Seven (7) companies chose to respond, none of which were local companies.

An evaluation committee comprised of five (5) City staff members which included Director of Finance, Accounting Manager, Senior Financial Analyst, Budget Financial Analyst, and Community Development Services Manager who evaluated the proposals and Mayor Sue Zwahlen (Chair of Audit Committee) was chosen to observe the RFP process. The evaluation was based on technical proposal, mandatory elements, expertise and experience, audit approach, and cost.

Based on being ranked highest in total evaluation criteria, the evaluation committee recommends the award of proposal for the external auditing services to Vasquez and Company LLC. Vasquez and Company LLC is certified as a minority business enterprise and small business enterprise in the State of California and provides a wide-range of diversity in their workforce.

Modesto Municipal Code Section 8-3.203 generally requires all purchases, which meet or exceed $50,000 for material, equipment or contractual services to be formally bid. The award of proposal for the furnishing of external auditing services to Vasquez and Company LLC, Glendale, California, conforms to Modesto Municipal Code 8-3.203.

FISCAL IMPACT:
1 91800 Consulting Services; 91804 Accounting/Auditing/Budget Consulting; 91806 Administrative Consulting; 91849 Finance/Economics Consulting; 91858 Governmental Consulting; 94600 Financial Services; 94620 Auditing; 96100 Miscellaneous Services, No. 1 (Not Otherwise Classified); 96200 Miscellaneous Services, No. 2 (Not Otherwise Classified) #8..
- 137 -
City Council, October 25, 2022
External Auditing Services Agreement

Sufficient funds are budgeted in Fiscal Year 2022-23 and will be budgeted for future years through the term of this agreement, to cover the cost for this service. The prior contract for auditing services with Hudson and Henderson was an estimated $147,110 to $148,400 per audit year which has been outlined below.

Fiscal Year
Audit Period Amount
2017-18 $ 147,110
2018-19 $ 147,110
2019-20 $ 147,845
2020-21 $ 147,845
2021-22 $ 148,400
Total $ 738,310
The new agreement with Vasquez and Company is estimated at an average annual cost of $142,228 through the term of the agreement. The first audit year the agreement will be $135,000 with a 2% increase annually through the term of the agreement. Comparing the firstyear amount to the current annual cost with Hudson and Henderson this will generate a savings of about $13,400 annually. The amount also includes an additional cost for up to three (3) new Community Facility District audits over the term of the agreement.

Funding Source
Year One
Amount
General Fund - Fund 0100 $ 81,200
Housing Urban Development Funds $ 4,900
Water Fund $ 11,800
Wastewater Fund $ 8,000
Storm Drain Fund $ 1,100
Community Facility Districts $ 18,000
Tuolumne River Regional Park Joint Power Agency (JPA) $ 5,000 Ceres-Modesto Industrial Fire JPA $ 5,000
Total $ 135,000
COMMITTEE RECOMMENDATION:

This item was presented at the September 15, 2022 Audit Committee and approved to move forward to Council.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving the Award of Proposal and Agreement for the Furnishing of External Auditing Services to Vasquez and Company LLC, Glendale, California, for a three (3) year Agreement with two (2) one-year extension options, for an estimated annual cost of $142,228, and over five (5) years of $715,000; and authorizing the City Manager or his designee to execute the Agreement.
#8..
- 138 -
City Council, October 25, 2022
External Auditing Services Agreement

Approved by:

DeAnna Christensen, Director of Finance
Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. Agreement - FINAL 2022-07-26

3. Exhibit A - External Auditing Services RFP 2122-40 FINAL 2022-03-25

4. Exhibit B – Vasquez Proposal

5. Exhibit C - Pricing Detail FINAL

6. Financial Interest Disclosure
#8..
- 139 -
1 MODESTO CITY COUNCIL
RESOLUTION NO. 2022-

RESOLUTION APPROVING THE AWARD OF PROPOSAL AND

AGREEMENT FOR THE FURNISHING OF EXTERNAL AUDITING SERVICES

TO VASQUEZ AND COMPANY LLC, GLENDALE, CALIFORNIA, FOR A THREE (3) YEAR AGREEMENT WITH TWO (2) ONE-YEAR EXTENSION OPTIONS, FOR AN ESTIMATED ANNUAL COST OF $142,228, AND OVER FIVE (5) YEARS OF $715,000; AND AUTHORIZING THE CITY MANAGER OR

HIS DESIGNEE TO EXECUTE THE AGREEMENT
WHEREAS, under Section 1306 of the Modesto City Charter requires the Council to employ independent auditors to perform an annual financial audit of the City to examine the financial records managed by City employees; and WHEREAS, the City requests an external auditor to express an opinion on the fair presentation of its basic financial statements and schedule of expenditures from federal awards in conformity with generally accepted accounting principles, the provisions of the Federal Single Audit Act Amendments of 1996 and Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance); and WHEREAS, the City is the financial administrator for five (5) joint power agencies/program audits and twelve (12) Community Facilities Districts and will require the financial statement compilation and express an opinion on the financial statements and programs for these funds; and
WHEREAS, the Purchasing Division issued Request for Proposal (RFP) No. 2122-40 for external auditing services on PlanetBids via the City’s website under nine (9) commodity codes; and
WHEREAS, on April 26, 2022, proposals were formally opened by the City Clerk’s Office and broadcast via Microsoft Teams Livestream; and #8..
- 140 -
2 WHEREAS, seven (7) companies chose to respond with responsive and responsible proposals, none of which were local vendors; and WHEREAS, proposals were based on an evaluation criterion on technical proposal, mandatory elements, expertise and experience, audit approach, and cost; and WHEREAS, Modesto Municipal Code Section 8-3.203 generally requires all purchases, which meet or exceed $50,000 for material, equipment or contractual services to follow the formal bid procedures; and
WHEREAS, based on the highest evaluation scoring, the evaluation committee recommends the award of proposal for the external auditing services to Vasquez and Company LLC. Vasquez and Company LLC is certified as a minority business enterprise and small business enterprise in the State of California and provides a wide-range of diversity in their workforce.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves the award of proposal and agreement for the furnishing of external auditing services to Vasquez and Company LLC, Glendale, California, for a three (3) year agreement with two (2) one-year extension options, for an estimated annual cost of $142,228, and over five (5) years of $715,000.

BE IT FURTHER RESOLVED, that the City Manager, or his designee, is hereby authorized to execute the agreement, in a form approved by the City Attorney.

The foregoing resolution was introduced in a regular meeting of the Council of the City of Modesto held on the 25th day of October 2022, by Councilmember ________, who moved its adoption, which motion being duly seconded by Councilmember ______, was upon roll call carried and the resolution adopted by the following vote:
#8..
- 141 -
3 AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST: _____________________________
DIANE NAYARES-PEREZ, CMC, City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: _____________________________
JOSE M. SANCHEZ, City Attorney
#8..
- 142 -
1 EXTERNAL AUDITING SERVICES
THIS AGREEMENT, made and entered into in the City of Modesto, State of California, this day of , 2022 (“Effective Date”), by and between the CITY OF MODESTO, a municipal corporation of the State of California, hereinafter referred to as "City", and VASQUEZ & COMPANY LLP, a California LLP, hereinafter referred to as "Consultant."
This Agreement is made with regard to the following recitals:

A. The City has determined that auditing services are needed to support the City of Modesto.

B. Consultant represents that it is qualified, willing and able to provide the services to prepare said document(s).

NOW, THEREFORE, in consideration of this agreement, and the mutual promises, covenants, and stipulations hereinafter contained, the parties agree as follows:

1. SCOPE OF SERVICES.

Consultant shall undertake and complete the preparation of the scope of work as set forth and described in the documents attached hereto and referred to as Exhibit "A" or "Project". The Consultant shall perform the services as described in Exhibit "A" in a manner compatible with the standards of its profession, and shall produce a fully complete project that is acceptable to City.

2. TERM OF AGREEMENT.

The term of the contract shall be for a period of three (3) years, with two (2) one-year extension options at the sole discretion of City, for a total of up to five (5) years.

Pricing shall remain firm for the first three (3) years of any contract, which may be awarded pursuant to this RFP.
#8..
- 143 -
2 Price increases for subsequent contract years four and five, shall not exceed the Consumer Price Index (CPI) for West Urban Area in any one contract year, and shall be negotiated through the Purchasing Division. Requests for price increases shall be submitted by Contractor(s) in writing, at least sixty (60) days prior to the annual anniversary date of the contract to be effective for the subsequent year.

City hereby gives Consultant notice to proceed with the preparation of the Project in the manner described in Exhibit "A", as of the Effective Date of this Agreement.

Consultant shall diligently proceed with the preparation of the Project and agrees to complete said preparation within the time period set forth in Exhibit "A".

3. COMPENSATION.

Consultant agrees to accept a sum not to exceed $715,000 as full remuneration for performing all services and furnishing all staffing and materials called for in Exhibit "A" and for performance by Consultant of all of its duties and obligations under this Agreement.

The Compensation shall be paid pursuant in the manner and at the times set forth below:

All work to be performed under this Agreement shall be billed at the rates set forth in Exhibit “B” attached hereto, Consultant shall submit monthly invoices to City which include detailed tasks, hours worked, and billable rates for all work completed, and detailed receipts for any out-of-pocket, reimbursable costs paid by Consultant in connection with work performed on this Project.

4. OBLIGATIONS OF CONSULTANT.

Throughout the term of this Agreement, Consultant shall possess, or secure all licenses, permits, qualifications and approvals legally required to conduct business. Consultant warrants that it has all of the necessary professional capabilities and experience, as well as all tools, #8..
- 144 -
3 instrumentalities, facilities and other resources necessary to provide the City with the services contemplated by this Agreement. Consultant further warrants that it will follow the best current, generally accepted and professional practices to make findings, render opinions, prepare factual presentations, and provide professional advice and recommendations regarding this Project.

5. PERFORMANCE BY KEY EMPLOYEE.

Consultant has represented to City that ELISA STILWELL, PARTNER, will be the person primarily responsible for the performance of the services referred to in this Agreement. City has entered into this Agreement in reliance on that representation by Consultant.

Consultant therefore agrees that SEVEN percent (7%) or more of the time to be devoted to the project that is the subject of this Agreement will be that of the above-named person.

6. OWNERSHIP OF DOCUMENTS/TITLE TO DATA.

Ownership of Documents
All reports, drawings, designs, graphics, working papers and other incidental work or materials furnished hereunder shall become and remain the property of the City, and may be used by City as it may require without any additional cost to City. No reports shall be used by the Consultant for purposes other than this contract without the express prior written consent of City.

The deliverables or audit working papers prepared in accordance with Auditing Standards shall not be subject to the provisions of this section where the section requirements are inconsistent with such Auditing Standards. In such case, the Auditing Standards shall prevail.

Title to Data
If, as a part of this Agreement, Consultant is required to produce data such as, but not limited to, drawings, plans, specifications, calculations, models, flow diagrams, visual #8..
- 145 -
4 aids and other related materials, the originals of all such data generated under this agreement will be delivered to City upon the completion or termination of services under this Agreement.

All materials, documents, data or information obtained from the City data files or any City medium furnished to Consultant in the performance of this Agreement will at all times remain the property of the City. Such data or information may not be used or copied for direct or indirect use by Consultant after termination of this Agreement without written consent of the City.

7. NEWS AND INFORMATION RELEASE.

Consultant agrees that it will not issue any news releases in connection with either the award of this Agreement, or any subsequent amendment of or efforts under this Agreement, without first obtaining review and approval of said news releases from City through the City Manager.

8. INTEREST OF CONTRACTOR.

Consultant warrants that it presently has no interest and shall not acquire any interest, direct or indirect, which would conflict in any manner or degree with the performance of services required to be performed under this Agreement. Consultant warrants that, in performance of this Agreement, Consultant shall not employ any person having any such interest.

Consultant agrees to file a Statement of Economic Interests with the City Clerk at the start and end of this Agreement if so required at the option of City.

9. AMENDMENTS.

Both parties to this Agreement understand that it may become desirable or necessary during the execution of this Agreement, for City or Consultant to modify the scope of services provided for under this Agreement. Any material extension or change in the scope of work shall be discussed with City and the change and cost shall be memorialized in a written amendment to the original Agreement prior to the performance of the additional work. #8..
- 146 -
5 Until a change order is so executed, City will not be responsible to pay any charges Consultant may incur in performing such additional services, and Consultant shall not be required to perform any such additional services.

10. INDEPENDENT CONTRACTOR.

All acts of Consultant, its agents, officers, and employees and all others acting on behalf of Consultant relating to the performance of this Agreement, shall be performed as independent contractors and not as agents, officers, or employees of City. Consultant, by virtue of this Agreement, has no authority to bind or incur any obligation on behalf of City. Consultant has no authority or responsibility to exercise any rights or power vested in the City. No agent, officer, or employee of the City is to be considered an employee of Consultant. It is understood by both Consultant and City that this Agreement shall not under any circumstances be construed or considered to create an employer-employee relationship or a joint venture.

Consultant, its agents, officers and employees are and, at all times during the terms of this Agreement, shall represent and conduct themselves as independent contractors and not as employees of City.

Consultant shall determine the method, details and means of performing the work and services to be provided by Consultant under this Agreement. Consultant shall be responsible to City only for the requirements and results specified in this Agreement, and, except as expressly provided in this Agreement, shall not be subjected to City's control with respect to the physical action or activities of the Consultant in fulfillment of this Agreement. Consultant has control over the manner and means of performing the services under this Agreement. Consultant is permitted to provide services to others during the same period service is provided to City under this Agreement. If necessary, Consultant has the responsibility for employing other persons or firms to assist Consultant in fulfilling the terms and obligations under this Agreement. #8..
- 147 -
6 If in the performance of this Agreement any third persons are employed by Consultant, such persons shall be entirely and exclusively under the direction, supervision, and control of Consultant. All terms of employment including hours, wages, working conditions, discipline, hiring, and discharging or any other term of employment or requirement of law shall be determined by the Consultant.

It is understood and agreed that as an independent contractor and not an employee of City neither the Consultant or Consultant's assigned personnel shall have any entitlement as a City employee, right to act on behalf of the City in any capacity whatsoever as an agent, or to bind the City to any obligation whatsoever.

It is further understood and agreed that Consultant must issue W-2 forms or other forms as required by law for income and employment tax purposes for all of Consultant's personnel.

As an independent contractor, Consultant hereby indemnifies and holds City harmless from any and all claims that may be made against City based upon any contention by any third party that an employer-employee relationship exists by reason of this Agreement.

11. ASSIGNMENT.

Neither this Agreement nor any portion thereof shall be subcontracted or assigned without the express prior written consent of the City in each and every instance.

12. PATENT/COPYRIGHT MATERIALS.

Unless otherwise expressly provided in the contract, Consultant shall be solely responsible for obtaining the right to use any patented or copyrighted materials in the performance of this Agreement. Consultant shall furnish a warranty of such right to use to City at the request of City.

13. NOTICES.
#8..
- 148 -
7 Any and all notices permitted or required to be given hereunder shall be deemed duly given and effective (a) upon actual delivery, if delivery is by hand; or (b) five (5) days after delivery into the United States mail if delivery is by postage paid registered or certified (return receipt requested) mail. Each such notice shall be sent to the parties at the address respectively indicated below or to any other address as the respective parties may designate from time to time.

FOR Consultant:

Name: VASQUEZ & COMPANY LLP
Address: 655 NORTH CENTRAL AVE., SUITE 1550,
GLENDALE, CA 91203
Attention: ROGER MARTINEZ
Phone: (213) 873-1703
FOR CITY:

Name: CITY OF MODESTO, PURCHASING DIVISION
Address: 1010 10th STREET, SUITE 5200
MODESTO, CA 95354
Attention: DIANNE LOVE
Phone: (209)571-5164

14. INSURANCE REQUIREMENTS.

The Consultant shall provide at its own expense and maintain at all times the following insurance with insurance companies licensed in the State of California and shall provide evidence of such insurance to the City as may be required by the Risk Manager of the City. The policies or certificates thereof shall provide that, thirty (30) days prior to cancellation or material change in the policy, notices of same shall be given to the Risk Manager of the City by certified mail, return receipt requested, for all of the following stated insurance policies. (a) Worker's Compensation - in compliance with the statutes of the State of California, plus employer's liability with a minimum limit of liability of $1,000,000. (b) General Liability insurance with a minimum limit of liability per occurrence of $1,000,000 for bodily injury and $1,000,000 for property damage or $1,000,000 #8..
- 149 -
8 combined single limit. If commercial general liability insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required per-occurrence limit.

This insurance shall indicate on the certificate of insurance the following coverages and indicate the policy aggregate limit applying to: premises and operations; broad form contractual; independent consultants and subcontractors; products and completed operations. (c) Automobile Liability insurance with a minimum limit of liability per occurrence of $1,000,000 for bodily injury and $1,000,000 property damage or $1,000,000 combined single limit. This insurance shall cover any automobile for bodily injury and property damage.
(d) Professional Liability (Errors and Omissions) Insurance with limits not less than $2,000,000 per claim, $4,000,000 aggregate. If coverage is on a claims-made basis it shall be maintained for at least three (3) years following completion of the work.

If at any time any of said policies shall be unsatisfactory to the City, as to form or substance, or if a company issuing such policy shall be unsatisfactory to the City, the Consultant shall promptly obtain a new policy, submit the same to the Risk Manager for approval and submit a certificate thereof as hereinabove provided. Upon failure of the Consultant to furnish, deliver or maintain such insurance and certificates as above provided, this Agreement, at the election of the City, may be forthwith declared suspended or terminated. Failure of the Consultant to obtain and/or maintain any required insurance shall not relieve the Consultant from any liability under this Agreement, nor shall the insurance requirements be construed to conflict with or otherwise limit the obligations of the Consultant concerning indemnification. The City, its agents, officers, employees, and volunteers shall be named as an additional insured on all insurance policies required herein, except Workers' Compensation and Professional Liability. CONSULTANT shall provide CITY with separate endorsements evidencing proof of the CITY’s additional insured #8..
- 150 -
9 status as to both the general liability and automobile liability insurance policies. The Workers' Compensation insurer shall agree to waive all rights of subrogation against the City, its agents, officers, employees, and volunteers for losses arising from work performed by Consultant for the City. In addition, CONSULTANT shall provide CITY with a Workers Compensation subrogation waiver by way of a separate endorsement. The Consultant's insurance policy(ies) shall include a provision that the coverage is primary as respects the City; shall include no special limitations to coverage provided to additional insured; and, shall be placed with insurer(s) with acceptable Best's rating of A:VII or with approval of the Risk Manager. The Consultant must deliver certificates evidencing existence of the insurance listed above to the City prior to the time the contract is signed.

All endorsements referenced above must include the applicable policy number.

15. TERMINATION OF AGREEMENT.

Termination by City for Default of Consultant
Should Consultant default in the performance of this Agreement or materially breach any of its provisions, at its option, City may terminate this Agreement by giving written notification to Consultant. The termination date shall be the effective date of the notice.

For the purposes of this section, material breach of this Agreement shall include, but not be limited to, any of the following: failure to perform required services or duties, willful destruction of City's property by Consultant, dishonesty or theft.

Termination by City for Convenience
The City may also terminate the Consultant's performance under this Agreement, either in whole or in part, at its own discretion, or when conditions encountered during the Work make it impossible or impracticable to proceed, or when the City is prevented from proceeding with the Agreement by act of God, by law, or by official action of a public authority, or upon a determination by the City #8..
- 151 -
10 that such termination is in the best interest and convenience of the City, or whenever the City is prohibited from completing the Project for any reason. The City shall provide no less than ten (10) calendar days written notice of its intent to terminate this Agreement for convenience, and shall endeavor to provide the Consultant with consultation with the City prior to termination.

Termination by City for Lack of Budgeted Funds
The City may terminate this Agreement effective July 1 of any given year upon the City's determination to not appropriate sufficient funds for this Agreement for the ensuing fiscal year. In such event City shall give Consultant not less than 30 days written notice of termination.

Termination by City for Change of Consultant's Tax Status If City determines that Consultant does not meet the requirements of federal and state tax laws for independent contractor status, City may terminate this Agreement by giving written notice to Consultant. The termination date shall be the effective date of the notice.

Post-Termination Procedures
If this Agreement is terminated pursuant to this Section, Consultant shall:
a. Cease its work as directed in the notice of termination as of the termination date and see to it that its employees, subconsultants and agents are notified of such termination and act as specified in the notice of termination;
b. Terminate all orders and Subcontractors except as necessary to complete any portion of the Work that is not terminated; c. If directed in writing by the City to do so, assign all right, title and interest in subcontracts and materials in progress to City, in which case the City will have the right at its discretion to settle, or pay any or all claims arising out of the termination of such #8..
- 152 -
11 subconsultants, but in no event shall recovery by any Consultant or subconsultant include lost profits for portions of the Work not completed or undertaken, including materials not delivered; d. Deliver or otherwise make available to the City all data, drawings, specifications, reports, estimates, summaries and such other information and material as may have been accumulated by the Consultant in performing the Project whether completed or in process; e. Settle outstanding liabilities and claims, subject to the approval of City;
f. Complete performance of such part of the Project as has not been terminated;
g. Take such other actions as may be necessary, or as may be directed by the City for the protection and preservation of the Project and/or property related to the Project;
h. If City so requests, and at City's cost, Consultant shall provide sufficient oral or written status reports to make City reasonably aware of the status of Consultant's work on the Project. i. The Consultant understands and agrees that City may, in City's sole discretion, refuse to pay Consultant for that portion of Consultant's services which were performed by Consultant on the project prior to the termination date and which remain unacceptable and/or not useful to City as of the termination date.

City will pay Consultant an amount based on the percentage of satisfactory work completed in accordance with the notice of termination. If this Agreement is terminated pursuant to the subparagraph entitled Termination by City for Default of Consultant, Consultant #8..
- 153 -
12 understands and agrees that City may, in City's sole discretion, refuse to pay Consultant for that portion of Consultant's services which were performed by Consultant on the project prior to the termination date and which remain unacceptable and/or not useful to City as of the termination date. The final payment to the Consultant after termination for convenience shall be limited to amounts due and owing under the Agreement at time of termination, including the following:
a. The cost of settling and paying valid claims arising out of the termination of the Agreement such as subconsultant agreements or contracts for materials;
b. The Agreement price allocable to the portion of the Project properly performed or goods supplied to the work site by the Consultant as of the date of termination, as determined in accordance with the notice of termination, reduced by any sums previously paid to the Consultant.

16. CERTIFIED PAYROLL REQUIREMENT.

For consultants performing field work on public works contracts on which prevailing wages are required: The Consultant shall comply with the provisions of Section 1776 of the California Labor Code, regarding payroll records, and shall require its subconsultants and subcontractors to comply with that section as may be required by law.

17. INDEMNITY.

The Consultant shall hold the City, its agents, officers, employees, and volunteers, harmless from and save, defend and indemnify them against any and all claims, losses, liabilities, judgments or damages from every cause, including but not limited to injury to person or property or wrongful death, including reasonable costs and expenses of defense of any judicial or administrative action, arising directly or indirectly out of any act or omission of Consultant. #8..
- 154 -
13 Consultant's obligation to defend, indemnify, and hold the City, its agents, officers, and employees harmless under the provisions of this paragraph is not limited to or restricted by any requirement in this Agreement for Consultant to procure and maintain a policy of insurance.

18. ENTIRE AGREEMENT.

This Agreement and its exhibits contain the entire understanding between Consultant and City. Additional or new terms contained in this Agreement which vary from Consultant's proposal are controlling and are deemed accepted by Consultant by shipment of any article or other commencement of performance hereunder. All previous proposals, offers and communications relative to this Agreement, whether oral or written, are hereby superseded except to the extent that they have been incorporated into this Agreement. No future waiver of or exception to any of the terms, conditions, and provisions of this Agreement shall be considered valid unless specifically agreed to in writing by all the parties.

19. PARTIAL INVALIDITY.

If any provision in this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions shall nevertheless continue in full force without being impaired or invalidated in any way.

20. WAIVER.

The waiver by any party to this Agreement of a breach of any provision hereof shall be in writing and shall not operate or be construed as a waiver of any other or subsequent breach hereof unless specifically stated in writing.

21. AUDIT.

The City's duly authorized representative shall have access at all reasonable times to all reports, contract records, contract documents, contract files, and personnel necessary to audit and verify Consultant's charges to City under this Agreement. #8..
- 155 -
14 Consultant agrees to retain reports, records, documents, and files related to charges under this Agreement for a period of four (4) years following the date of final payment for Consultant services. City's representative shall have the right to reproduce any of the aforesaid documents.

22. GOVERNING LAW.

This Agreement shall be governed according to the laws of the State of California.

23. HEADINGS NOT CONTROLLING.

Headings used in the Agreement are for reference purposes only and shall not be considered in construing this Agreement.

24. COMPLIANCE WITH LAWS.

Consultant shall insure compliance with all safety and hourly requirements for employees, in accordance with federal, state, and county safety and health regulations and laws.

Consultant shall fully comply with all applicable federal, state, and local laws, ordinances, regulations and permits.

25. CITY BUSINESS LICENSE.

Consultant shall have a City of Modesto business license. #8..
- 156 -
15 IN WITNESS WHEREOF, the City of Modesto, a municipal corporation, has authorized the execution of this Agreement in duplicate by its City Manager and attestation by its City Clerk under authority of Resolution No. 2022- , adopted by the Council of the City of Modesto on the day of , 2022, and Vasquez & Company LLP has caused this agreement to be duly executed as of the Effective Date. #8..
- 157 -
1 REQUEST FOR PROPOSAL AND SPECIFICATIONS NO. 2122-40
FOR

EXTERNAL AUDITING SERVICES
PROPOSAL OPENING: APRIL 26, 2022 at 11:00 A.M.

CITY OF MODESTO CONTACT: Dianne Love, Senior Buyer
E-MAIL ADDRESS: [email protected]
PHONE: (209)571-5164
#8..
- 158 -
2 REQUEST FOR PROPOSAL AND SPECIFICATIONS NO. 2122-40

TABLE OF CONTENTS
Page
. Notice to Proposers ..............................................................................................................3 . City Contacts ........................................................................................................................4 . Calendar of Events ...............................................................................................................4 . Offer and Acceptance...........................................................................................................4 FORMS
. Proposal Acknowledgement (Signature Form).................................................................6 . Pricing Schedule (Signature Form) ...................................................................................7 . Exceptions, Clarifications, Amendments ............................................................................9 . References ..........................................................................................................................10 . Financial Interest Disclosure..............................................................................................12 . Company History Statement..............................................................................................15 . Minimum Qualifications....................................................................................................15 Technical Specifications and Requirements
. Background.........................................................................................................................18 . Technical Specifications ....................................................................................................17 . Proposal Evaluation Criteria ..............................................................................................17 . Insurance Requirements.....................................................................................................25 General Terms and Conditions
. Proposal Submittal .............................................................................................................31 . Acceptance/Rejection of Irregular Proposals ....................................................................31 . Complete Proposal Document ...........................................................................................32 . Compliance / Non-Compliance .........................................................................................32 . Pricing Format....................................................................................................................32 . Pricing Schedule.................................................................................................................32 . Award of Proposal..............................................................................................................33 . Evaluation Process .............................................................................................................33 . Term of Contract ................................................................................................................33 . Termination of Services .....................................................................................................34 . Payment ..............................................................................................................................34 . Sample Agreement .............................................................................................................42 #8..
- 159 -
3 NOTICE TO PROPOSERS
NOTICE IS HEREBY GIVEN that the City of Modesto, County of Stanislaus, State of California, will receive at the City Clerk’s office, 1010 Tenth Street, Suite 6600, Modesto, CA 95354 sealed proposals for the furnishing of External Auditing Services for the City of Modesto, Finance Department.

All equipment, materials, and supplies shall be furnished F.O.B. City of Modesto. Proposals shall be submitted on the proposal sheet and shall be downloaded from the City’s Purchasing website at http://www.modestogov.com/257/Contracting-Bid-Opportunities; such proposals shall include all necessary specifications. It is highly recommended all proposal documents be downloaded from the City’s website.

Each proposal shall be sealed and filed with the City Clerk’s office, 1010 Tenth Street, Suite 6600, Modesto, CA 95354 no later than Tuesday, April 26, 2022 at 11:00 A.M., at which time proposals will be opened and recorded. All proposals shall be available for review following City Council award approval at the Purchasing Division, 1010 Tenth Street, 5th Floor, Suite 5300, Modesto, CA 95354.

Proposals will be received only at the address shown above, and prior to the time indicated. Any proposal received at or after said time and/or date, or at a place other than the stated address cannot be considered and will be returned to the proposer unopened.

All proposals, whether delivered by an employee of the proposer, U.S. Postal Service, courier or package delivery service must be received and time stamped at the stated address prior to the time designated. The City Clerk’s time stamp shall be considered the official timepiece for the purpose of establishing the actual receipt of proposals. The City of Modesto assumes no responsibility for delay in the delivery of the proposal.

On the outside of both the proposal envelope and courier envelope, the proposer shall indicate the following:

NAME AND ADDRESS OF PROPOSER
SPECIFICATION NUMBER 2122-40

EXTERNAL AUDITING SERVICES
PROPOSAL OPENING DATE: APRIL 26, 2022 AT 11:00 A.M.

MAIL TO: CITY CLERK COURIER TO: CITY CLERK

CITY OF MODESTO CITY OF MODESTO
P.O. BOX 642 1010 10TH STREET, SUITE 6600
MODESTO, CA 95353 MODESTO, CA 95354
The City reserves the right to reject any or all proposals or to waive any informalities or minor irregularities in a proposal.

No proposer may withdraw his/her proposal for a period of one-hundred twenty (120) days after the date set for the opening thereof.
#8..
- 160 -
4 CITY CONTACTS
All questions regarding these specifications, terms, and conditions shall be submitted in writing to Dianne Love, Senior Buyer, via email at [email protected].

All contacts during the proposal process shall be through the Purchasing Division. Attempts by the proposer to contact department representatives may result in disqualification of the proposer from the proposal process.

CALENDAR OF EVENTS
Event Date
Proposal Issued March 25, 2022
Written Questions Due April 4, 2022
Addendum Issued (if required) March 12, 2022
Response Due BEFORE 11:00 A.M. on Tuesday, April 26, 2022 Proposal Award Date June 2022
Note: Award date is approximate.

Note: Deliver or mail proposals to the referenced address, only, as indicated in the Notice to proposers.

It is the responsibility of each proposer to be familiar with all of the specifications, terms and conditions and the site condition (if applicable). The proposer agrees and acknowledges all RFP specifications, terms, and conditions and indicates the ability to perform by submission of a proposal. By the submission of a proposal, the proposer certifies that if awarded a contract they will make no claim against the City based upon ignorance of conditions or misunderstanding of the specifications.

OFFER AND ACCEPTANCE:

Seller represents his/her acceptance to provide products and/or services as follows. City's offer to purchase products and/or services is expressly conditioned upon Seller's assent to the terms and conditions set forth in City purchase order or contract documents, specifications, supporting data, and these articles. Seller agrees that Seller's Order Acknowledgement terms and conditions received prior to, during, or after order placement by City are hereby rejected. City purchase orders signed by the City's Purchasing Manager or her designated agent and issued to Seller or agreement constitutes written notification to Seller of City's rejection of any and all of Seller Order Acknowledgements, counter offers and change to the City's terms and conditions.
#8..
- 161 -
5 REQUEST FOR PROPOSAL AND SPECIFICATIONS NO. 2122-40

EXTERNAL AUDITING SERVICES

PROPOSAL SUBMITTAL CHECKLIST
The bidder shall provide a complete bid in a sealed envelope before 11:00 A.M. on the bid opening date.

Failure to provide all the required documents may cause the bid to be considered non-responsive.

NAME OF BID
COMPLETE BID Page No.
. Proposal Acknowledgement (Signature)............................................................................6 . Pricing Schedule (Signature)..............................................................................................7 . Exceptions, Clarifications, Amendments (if applicable) ....................................................9 . References ..........................................................................................................................10 . Financial Interest Disclosure Form (Pg. 13 if applicable) ...............................................12 . Company History Statement .............................................................................................15 . Addenda Acknowledgement Page (if applicable) ............................................................16 . Specification/Technical Response .................................................................................N/A #8..
- 162 -
6 PROPOSAL ACKNOWLEDGEMENT
REQUEST FOR PROPOSAL AND SPECIFICATIONS NO. 2122-40

EXTERNAL AUDITING SERVICES
The City is soliciting proposals from qualified proposers to furnish its requirements per the specifications, terms and conditions contained in the above referenced proposal number. This Proposal Acknowledgement must be completed, signed by a responsible officer or employee, dated and submitted with the proposal response. Obligations assumed by such signature must be fulfilled.

1. Preparation of Proposals: (a) All prices and notations must be printed in ink or typewritten. No erasures permitted. Errors may be crossed out and corrections printed in ink or typewritten adjacent and must be initialed in ink by person signing the proposal. (b) Quote price as specified in proposal. No alterations or changes of any kind shall be permitted to the Proposal Form. Responses that do not comply shall be subject to rejection in total.

2. Failure to Submit Proposal: If you are not submitting a proposal but want to remain on the mailing list and receive future proposals, complete, sign and return this Proposal Acknowledgement and state the reason you are not pricing.

3. Taxes and Freight Charges: (a) Unless otherwise required and specified in the RFP, the prices quoted herein do not include Sales, Use or other taxes. (b) No charge for delivery, drayage, express, parcel post packing, cartage, insurance, license fees, permits, costs of bonds, or for any other purpose, except taxes legally payable by City, will be paid by the City unless expressly included and itemized in the proposal. (c) Amount paid for transportation of property to the City is exempt from Federal Transportation Tax. An exemption certificate is not required where the shipping paper shows the consignee as one (1) of the Agencies; as such papers may be accepted by the carrier as proof of the exempt character of the shipment. (d) Articles sold to the Agencies are exempt from certain Federal excise taxes. The Agencies will furnish an exemption certificate.

4. Award: (a) Unless otherwise specified by the proposer or the RFP gives notice of an all-or-none award, the City may accept any item or group of items of any proposal. (b) Proposals are subject to acceptance at any time within thirty (30) days of opening, unless otherwise specified in the RFP. (c) A valid, written purchase order mailed, or otherwise furnished, to the successful proposer within the time for acceptance specified results in a binding contract without further action by either party. The contract shall be interpreted, construed and given effect in all respects according to the laws of the State of California.

5. Patent Indemnity: Proposers who do business with the City shall hold the City, its officers, agents and employees, harmless from liability of any nature or kind, including cost and expenses, for infringement or use of any patent, copyright or other proprietary right, secret process, patented or un-patented invention, article or appliance furnished or used in connection with the contract or purchase order.

6. Samples: Samples of items, when required, shall be furnished free of expense to the City and if not destroyed by test may upon request (made when the sample is furnished), be returned at the proposer’s expense.

7. Rights and Remedies of Agencies for Default: (a) In the event any item furnished by the proposer in the performance of the contract or purchase order should fail to conform to the specifications therefore or to the sample submitted by the proposer with its proposal, the City may reject the same, and it shall thereupon become the duty of the proposer to reclaim and remove the same forthwith, without expense to the City, and immediately to replace all such rejected items with others conforming to such specifications or samples; provided that should the proposer fail, neglect or refuse so to do the City shall thereupon have the right to purchase in the open market, in lieu thereof, a corresponding quantity of any such items and to deduct from any moneys due or that may there after come due to vendor the difference between the prices named in the contract or purchase order and the actual cost thereof to the City. In the event that the proposer fails to make prompt delivery as specified for any item, the same conditions as to the rights of the City to purchase in the open market and to reimbursement set forth above shall apply, except when delivery is delayed by fire, strike, freight embargo, or Act of God or the government. (b) Cost of inspection or deliveries or offers for delivery, which do not meet specifications, will be borne by the proposer. (c) The rights and remedies of the Agencies provided above shall not be exclusive and are in addition to any other rights and remedies provided by law or under the contract.

8. Discounts: (a) Terms of less than ten (10) days for cash discount will be considered as net. (b) In connection with any discount offered, time will be computed from date of complete, satisfactory delivery of the supplies, equipment or services specified in the RFP, or from date correct invoices are received by the City at the billing address specified, if the latter date is later than the date of delivery. Payment is deemed to be made, for the purpose of earning the discount, on the date of mailing the City’s check.

9. California Government Code Section 4552: In submitting a proposal to a public purchasing body, the proposer offers and agrees that if the proposal is accepted, it will assign to the purchasing body all rights, title, and interest in and to all causes of action it may have under Section 4 of the Clayton Act (15 U.S.C. Sec. 15) or under the Cartwright Act (Chapter 2, commencing with Section 16700, of Part 2 of Division 7 of the Business and Professions Code), arising from purchases of goods, materials, or services by the proposer for sale to the purchasing body pursuant to the proposal. Such assignment shall be made and become effective at the time the purchasing body tenders final payment to the proposer.

10. No Guarantee or Warranty: The City makes no guarantee or warranty as to the condition, completeness or safety of any material or equipment that may be traded in on this order.

11. Two “Inked” Signed Original Proposal Document Requested: Failure to furnish at least one “inked” signed original proposal document may result in disqualification.

THE undersigned acknowledges receipt of the referenced RFP and/or Addenda and offers and agrees to furnish the articles and/or services specified on behalf of the proposer indicated below, in accordance with the specifications, terms and conditions of this RFP and Proposal Acknowledgement, for the pricing indicated on the Pricing Schedule.

Firm:
#8..
- 163 -
7 Address:

City/State/Zip:

Signature/Title/Date:
#8..
- 164 -
8 PRICING SCHEDULE
REQUEST FOR PROPOSAL AND SPECIFICATIONS NO. 2122-40

EXTERNAL AUDITING SERVICES
Total All-Inclusive Maximum Price for combined Fiscal Years 2022/23, 2023/24 and 2024/25 shall be used for cost evaluation
Total All-Inclusive Maximum Price
Item Fiscal Year 2022-23 Fiscal Year 2023/24 Fiscal Year 2024/25 Basic
Financial
Statements
(Audits and
Reports)
$________________________ $________________________ $________________________ Single Audit
and
Management
Letter
$________________________ $________________________ $________________________ TOTAL: $________________________ $________________________ $________________________ Detail Schedule of Professional Fees and Expenses for Fiscal 2022/23 ONLY Item Hourly Rate Total Hours TOTAL
Basic
Financial
Statements
Partners $________________________ $________________________ $________________________ Specialists $________________________ $________________________ $________________________ Supervisory $________________________ $________________________ $________________________ Staff $________________________ $________________________ $________________________ Out-ofPocket
(Misc.)
$________________________ $________________________ $________________________ TOTAL Fiscal Year 2022/23: $________________________
Detail Schedule of Professional Fees and Expenses for Fiscal 2022/23 ONLY Item Hourly Rate Total Hours TOTAL
Single Audit
and
Management
Letter
Partners $________________________ $________________________ $________________________ Specialists $________________________ $________________________ $________________________ Supervisory $________________________ $________________________ $________________________ Staff $________________________ $________________________ $________________________ Out-ofPocket
(Misc.)
$________________________ $________________________ $________________________ TOTAL Fiscal Year 2022/23: $________________________
#8..
- 165 -
9 Will proposer accept the City’s Epay Payment Program? Please check one: Yes ____ No ____ Information regarding the program is provided in Section 2.15 Payment.

City Business License No. __________ Expiration Date: __________ THE undersigned acknowledges receipt of the referenced RFP and/or Addenda and offers and agrees to furnish the articles and/or services specified on behalf of the proposer indicated below, in accordance with the specifications, terms and conditions of this RFP and Proposal Acknowledgement, for the pricing indicated on the Pricing Schedule.

Company Name (Proposer):

By (Person Submitting Proposal): (Print)
By (Person Submitting Proposal): (Signature)
Title of Person Submitting Proposal:

Business Address
(City/State/Zip):

Email Address:

Telephone Number:

Fax Number:

Date:
#8..
- 166 -
10 EXCEPTIONS, CLARIFICATIONS, AMENDMENTS
REQUEST FOR PROPOSAL AND SPECIFICATIONS NO. 2122-40

EXTERNAL AUDITING SERVICES
Exceptions, Clarifications, Amendments
List requests for proposal clarifications and exceptions below, if any, sign and submit with your proposal response.

Item No. Reference To: Description
Page No. Paragraph No.

Company Name (Proposer):
#8..
- 167 -
11 REFERENCES
REQUEST FOR PROPOSAL AND SPECIFICATIONS NO. 2122-40

EXTERNAL AUDITING SERVICES
All proposers must provide a list of five (5) current or former clients in the area provided below, identifying prior experience with the same type of services requested by the City under Scope of Work.

References shall have similar volume and requirements to those outlined in these specifications, terms and conditions. Proposer’s failing to provide references shall be deemed unacceptable.

The City may contact some or all of the references provided in order to determine the Proposers’ performance record on services similar to that described in this proposal. The City reserves the right to contact references other than those provided in the response and to use the information gained from them in the award process.

Company Name:

Address:

City, State, Zip Code:

Contact Person:

Email Address:

Telephone Number:

Type of Business:

Date of Service:

Annual Contract Value $
Company Name:

Address:

City, State, Zip Code:

Contact Person:

Email Address:

Telephone Number:

Type of Business:

Date of Service:

Annual Contract Value $
Company Name:

Address:

City, State, Zip Code
Contact Person:

Email Address:

Telephone Number:

Type of Business:

Date of Service:

Annual Contract Value $
#8..
- 168 -
12 Company Name:

Address:

City, State, Zip Code
Contact Person:

Email Address:

Telephone Number:

Type of Business:

Date of Service:

Annual Contract Value $
Company Name:

Address:

City, State, Zip Code
Contact Person:

Email Address:

Telephone Number:

Type of Business:

Date of Service:

Annual Contract Value $
Company Name (Proposer):
#8..
- 169 -
13 FINANCIAL INTEREST DISCLOSURE
REQUEST FOR PROPOSAL AND SPECIFICATIONS NO. 2122-40

EXTERNAL AUDITING SERVICES

FINANCIAL INTEREST DISCLOSURE

REQUIRED DISCLOSURE BEGINNING THE COUNCIL MEETING
OF JANUARY 7, 2003
The ordinance requiring financial interest disclosure by all parties having a direct or indirect interest of $2,000 or more (except for certain publicly traded companies) will be effective at the Council meeting of January 7, 2003. This means that any Council action on a contract, agreement or development right must be accompanied by a FINANCIAL INTEREST DISCLOSURE FORM listing by name all parties that have a material financial interest in the agreement, contract or development right.

PLEASE NOTE, any Council action that requires a FINANCIAL INTEREST DISCLOSURE cannot be considered by the City Council until the required reporting is made. That means that Agenda Items without the DISCLOSURE will be removed from the Council Agenda.

FinDisclosure12-19
#8..
- 170 -
14 FINANCIAL INTEREST DISCLOSURE
All persons included within the meaning of either of the following tests have a material financial interest in an agreement, or application for development rights, submitted for approval or disapproval by the City Council, and shall be identified by the applicant, by name.

Tests of Materiality:

1. Whether it is foreseeable to a reasonable person that the value of their interest in property available for use by an applicant, or their interest in the applicant itself, may increase or decrease by an amount greater than $2,000.00 as a direct or indirect result of Council action on the applicant’s agreement or application for development rights.

2. Whether it is foreseeable to a reasonable person that the person’s gross income from the applicant may increase or decrease by a sum greater than $2,000.00 as a direct or indirect result of Council action on the agreement or application for development rights.

It is the legal obligation of all applicants for approval of an agreement or of an application for development rights to verify in writing, under penalty of perjury, that the identity of each person having a material financial interest in the agreement or application or development rights is true, correct and complete.

The applicant understands that this information is provided under penalty of perjury, and that intentionally supplying misinformation or deception may result in either invalidation of the agreement or application, or criminal prosecution for misdemeanor violation of the Modesto Municipal Code, or both. Negligent provision of misinformation shall be grounds for invalidation. In accordance with the Modesto Municipal Code, each applicant has a continuing obligation to maintain the truth, accuracy and completeness of the financial interest disclosure information provided below until after final consideration by the City Council of any matter arising out of or relating to the agreement or application.

By signing this document I agree to the information contained within.

COMPANY NAME: ____________________________________________________ __________________________________
APPLICANT’S NAME (SIGNATURE):
__________________________________
APPLICANT’S NAME/TITLE (PRINT):
__________________________________
Applicable Names: DATE:
(See attached list)
Questions concerning the application of either test to particular facts should be resolved in advance of Council action by agreement with the department head recommending approval of its agreement/application.

DIRECTOR
#8..
- 171 -
15 FINANCIAL INTEREST DISCLOSURE
COMPANY NAME: __________________________________________ NAMES
Signature / Print:

Signature / Print:

Signature / Print:

Signature / Print:

Signature / Print:

Signature / Print:

Signature / Print:

Signature / Print:

Signature / Print:

Signature / Print:

Signature / Print:

Signature / Print:

Signature / Print:

Signature / Print:

Signature / Print:

Signature / Print:

Signature / Print:

Signature / Print:

Signature / Print:

Signature / Print:

Signature / Print:
#8..
- 172 -
16 REQUEST FOR PROPOSAL AND SPECIFICATIONS NO. 2122-40

EXTERNAL AUDITING SERVICES

COMPANY HISTORY STATEMENT
Your company shall have been in business for a minimum of three (3) continuous years (immediately prior to the time of the RFP submittal date) providing the types of services requested in this RFP.

The company history statement shall be prepared on company letterhead and provided with the proposal submittal.

MINIMUM QUALIFICATIONS
Minimum Qualifications are mandatory for proposal consideration, and at a minimum shall include the following:

Financial Stability (Provided in a sealed separate envelope):

Proposers shall submit a copy of their company’s most recent professionally prepared Financial Statements (Income Statement and Balance Sheet). These statements, if unaudited, shall be accompanied by a cover letter that states the name and title of the preparer, the basis of the financial statement presentation (cash or accrual) and whether these statements have been prepared in accordance with Generally Accepted Accounting Principles for the most recent fiscal year end of the proposer. Audited financial statements shall be submitted in their entirety, including the auditor’s opinion and notes to the financial statements.

A separate document shall be provided and signed under penalty of perjury by the proposer’s financial officer or owner that explains the proposer’s inability to provide statements for a fiscal period that ended at least eight (8) months before the required date of submittal, if such inability exists.

One complete set of Financial Statements shall be submitted in a sealed separate envelope filed with the (original proposal document), marked with the following:

FINANCIAL STATEMENTS

NAME AND ADDRESS OF PROPOSER
SPECIFICATION NO. 2122-40

EXTERNAL AUDITING SERVICES
PROPOSAL OPENING DATE: APRIL 26, 2022 AT 11:00 A.M.
#8..
- 173 -
17 REQUEST FOR PROPOSAL AND SPECIFICATIONS NO. 2122-40

EXTERNAL AUDITING SERVICES

ADDENDA ACKNOWLEDGEMENT
The bidder shall check the RFB listing on the City or PlanetBid website, periodically, and in any event, no later than the day prior to bid opening to obtain any addenda information. The changes identified in the addenda modify this request for bid and specifications. The addenda now become a part of this request for bid and specifications. Signing the Bid on the signature portion thereof, the bidder is acknowledging that the bidder has confirmed that he or she has received all addenda issued for this request for bid and specifications, and has included costs for such in the bid submitted. Failure to list and acknowledge all addenda numbers may cause the bid to be considered nonresponsive. Do not attach any of the addenda to this sheet nor include them with the bid.

This document is only required to be returned should addenda have been issued.

The Bid is submitted with respect to the changes to the request for bid and specifications included in addenda numbers:

LIST ALL ADDENDA
NUMBERS:_____________________________________________________ Company Name (Bidder):
#8..
- 174 -
18 REQUEST FOR PROPOSAL AND SPECIFICATIONS NO. 2122-40

EXTERNAL AUDITING SERVICES
Most of the material needed to present a comprehensive proposal can be placed into one of the sections listed. Responses should be complete and detailed. However, if relevant information needs to be presented to further support the proposer’s case other appropriate sections may be added.

EVALUATION
All responsive proposals submitted will be reviewed by a City of Modesto evaluation committee.

At the completion of the proposal review, finalists may be asked to provide an in-depth presentation and product demonstration in Modesto. Whether or not a presentation shall be performed is wholly within the discretion of the evaluation committee. The committee will select the proposal which best fulfills the City’s requirements and represents the best value to the City of Modesto as determined by the evaluation committee. No single factor will determine the final award decision.

Overall responsiveness to the Request for Proposals is an important factor in the evaluation process.

EVALUATION CRITERIA

1. TECHNICAL PROPOSAL

2. EXPERTISE AND EXPERIENCE

3. AUDIT APPROACH

4. COST

5. MANDATORY ELEMENTS

6. REFERENCES (Minimum of 5)
#8..
- 175 -
19 REQUEST FOR PROPOSAL AND SPECIFICATIONS NO. 2122-40

EXTERNAL AUDITING SERVICES

TECHNICAL SPECIFICATIONS AND GENERAL REQUIREMENTS

1.0 BACKGROUND:

The City of Modesto is the County seat and largest City in Stanislaus County with a population of approximately 219,294 persons. The City encompasses a total incorporated area of 37 square miles and a total General Plan area of 66.7 square miles and is located on State Route 99, which links it to other Central Valley cities, including Sacramento (82 miles north), Stockton (32 miles north), and Fresno (96 miles south). Rail service links Modesto to the greater region. Passenger service is available outside of Downtown Modesto at the Burlington Northern/Santa Fe Railroad’s (Amtrak) Lakewood East Station, in eastern Modesto. Modesto is also located adjacent to the Tuolumne River, which flows out of Yosemite National Park. The Tuolumne River Regional Park includes a parkway along the river. In combination with Dry Creek Regional Park, the City has extensive river access and excellent recreational opportunities, both regionally and locally.

Modesto is a charter city with a Council-Manager form of government. The City’s operating budget for Fiscal Year 2021/22 is approximately $478 million and approximately 1,188 active permanent employees.

The City of Modesto accounting, financial reporting and investing functions are centralized in the Finance Department. The City's main financial applications operate on Oracle, and are networked to users via PC/terminal emulation.

1.1 GENERAL REQUIREMENTS:

The City of Modesto is requesting proposals from qualified Certified Public Accountants to conduct the annual independent audit of the City’s financial statements for Fiscal Years ending June 30, 2023, 2024 and 2025, with an option to renew for Fiscal Years ending June 30, 2026 and 2027, at the sole discretion of the City.

The City desires the external auditor to express an opinion on the fair presentation of its basic financial statements and schedule of expenditures from federal awards in conformity with generally accepted accounting principles, the provisions of the federal Single Audit Act Amendments of 1996 and Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).

The auditor is not required to audit the combining and individual fund financial statements and supporting schedules. The auditor is to provide an “in-relation-to” report on the basic financial statements and supporting schedules based on the auditing procedures applied during the audit of the basic financial statements. The auditor is required to express an opinion on the compliance #8..
- 176 -
20 for each major federal program as part of the single audit. The auditor will report any identified material weaknesses or significant deficiencies in internal control but does not express an opinion on internal control.

The City is the financial administrator for two (2) joint power agencies, two (2) state programs, one (1) county wide sales tax program, known as Measure L and twelve (12) Community Facilities Districts (CFD) with the possibility of increasing to up to eighteen (18) CFDs and will require the financial statement compilation and express an opinion on the financial statements for these funds.

1.2 TECHNICAL SPECIFICATIONS:

A. The City has obtained the "Certificate of Achievement for Excellence in Financial Reporting" from the Government Finance Officers Association (GFOA) of the United States and Canada for the 38th year. It is the City's intention to continue to receive these awards annually and will expect the Annual Comprehensive Financial Report ( A C F R ) to meet the requirements of those programs. The auditor will be expected to review the final draft of the ACFR for compliance with the certificate program checklists.

B. The City has obtained the award from GFOA for the Popular Annual Financial Report (PAFR) for the 5th year. A PAFR presents financial information in a manner that appeals to the reader, is understandable and shows creativity and usefulness. It is the City’s intention to continue to receive this award annually and will expect the PAFR to meet the requirements of the GFOA award program. The auditor will be expected to review the final draft of the PAFR for compliance with the certificate program checklists.

B. The City anticipates it will prepare one or more official statements in connection with the sale of debt securities which will contain the basic financial statements and the auditor's report thereon. The auditor shall be required, if requested by the municipal advisor and/or the underwriter, to issue a "consent and citation of expertise" as the auditor, and any necessary "comfort letters."
C. The Schedule of Expenditures of Federal Awards and related auditors' report, as well as the reports on the internal controls and compliance are not to be included in the Annual Comprehensive Financial Report, but are to be issued separately.

D. The City may request additional services from the auditor, subject to compliance with independence standards, including the following:

1. The City has several debt issues that may or may not be subject to arbitrage rebate requirements or have complex accounting requirements. The auditor may be asked to prepare the necessary calculations or assist with journals and advise the City accordingly.

2. The City is occasionally confronted with complex tax issues related to #8..
- 177 -
21 employment taxes withholding and reporting, information reporting, etc. The auditor may be asked from time to time to advise the City on tax related issues and to recommend a proper course of action.

E. In addition to expressing an opinion on the City’s compliance with current governmental GAAP, the audit firm shall also be required to provide assistance and guidance in the implementation of all new GASB pronouncements not yet in effect.

F. Working Paper Retention and Access to Working Papers. All working papers and reports must be retained, at the auditor's expense, for a minimum of seven (7) years, unless the firm is notified in writing by the City of Modesto of the need to extend the retention period. The auditor will be required to make working papers available, upon request, to the following parties or their designees:

1. City of Modesto.

2. Oversight or cognizant agencies.

3. Parties designated by the federal or state governments or by the City as part of an audit quality review process.

4. Auditors of entities of which the City is a sub recipient of grant funds.

5. Auditors of entities of which the City is a component unit.

6. In addition, the firm shall respond to the reasonable inquiries of successor auditors and allow successor auditors to review working papers relating to matters of continuing accounting significance.

1.3 FUND STRUCTURE:

The City uses the following fund types and account groups in its financial reporting:

Fund Types No. of Groups
General Fund 1
Special Revenue Funds 8
Debt Service Funds 1
Capital Projects Funds 8
Enterprise Funds 9
Internal Service Funds 6
Private Purpose Trust Fund 2
Custodial Funds 4

1.4 BUDGETARY BASIS OF ACCOUNTING:

Budgets for all fund types including the General, Special Revenue and Debt Service funds are #8..
- 178 -
22 adopted on a basis consistent with generally accepted accounting principles. The modified accrual basis of accounting is employed in the preparation of the budget. At fiscal year-end, budget appropriations lapse. Capital projects and certain operating programs are budgeted on a multi-year basis. Unspent multi-year budget appropriations are carried over in the following fiscal year.

1.5 PROPOSED SCHEDULE FOR THE 2022/2023 YEAR AUDIT:

The City will have records ready for interim audit work and all management personnel available to meet with the firm’s personnel after execution of contracts. (A similar time schedule will be developed for audits of future fiscal years and will be agreed upon by City and auditors during the exit conference).

Each of the following should be completed by the auditor no later than the dates indicated.

A. Entrance Conference:

The entrance conference shall be held with City staff by March 1, 2023. The primary purpose of this meeting will be to discuss the interim work to be performed. This meeting will also be used to establish overall liaison for the audits, make arrangements for work space and other needs of the auditor, and plan for the year-end and single audits.

B. Detailed Audit Plans:

The auditor shall provide the City by March 31, 2023, both detailed audit plans and a list of all schedules to be prepared by the City.

C. Interim Work:

The auditor shall complete interim work by June 2, 2023.

D. Fieldwork:

The auditor shall complete all fieldwork by October 27, 2023.

E. Exit Conference:

The exit conference shall be held with City Management by October 27, 2023. The purpose of this meeting will be to summarize the results of the fieldwork and to review significant findings.

This meeting will also be used to establish the schedule for the new fiscal year audit.

F. Draft Reports:

The initial Draft Basic Financial Statements shall be submitted to the auditor by the City by October 16, 2023. The auditor shall have the draft Single Audit and recommendations to City Management available for review by October 16, 2023.

G. Date Final Reports are Due:
#8..
- 179 -
23 The final Basic Financial Statements are due by December 8, 2023. The final Single Audit Report and Management Letter are due by December 8, 2023.

1.6 ASSISTANCE TO AUDITOR AND REPORT PREPARATION:

A. Finance Department and Clerical Assistance:

The Finance Department staff and responsible management personnel shall be available during the audit to assist the firm by providing direction to needed sources of information, documentation and explanations. The City of Modesto shall work jointly with the auditors to prepare the confirmation letters.

B. Information & Technology Department:

IT personnel and finance management shall be available to provide systems documentation and explanations. The auditor shall be provided computer time and the use of the City of Modesto's computer hardware and software. The City's financial management system shall be available online from 7:30 AM to 5:00 PM.

C. Statements and Schedules Prepared by City Staff:

Finance department staff will prepare the lead schedules, financial statements, notes, and required supplementary schedules for the ACFR. However, auditor assistance may be required with certain note disclosures or schedules.

D. Work Area and Equipment:

The City of Modesto will provide the auditor with reasonable work space, desks and chairs and VPN access. The auditor will also be provided with access to telephone lines, photocopying facilities and FAX machines, the auditor shall provide all Wi-Fi connection for their own work computer stations. It is expected that use of such facilities and equipment be limited to reasonable and pertinent business concerning the City engagement.

E. Report Preparation:

Report preparations, Report editing and typing of the Single Audit and other reports shall be the responsibility of the auditor. Auditors will be responsible for printing of Single Audit and other financial reports.

City staff shall be responsible for preparation and printing of the Annual Comprehensive Financial Report.

1.7 DELIVERABLES/REPORTS:

Following the completion of the audit of the fiscal year’s financial statements, the auditor shall issue:

A. An audit report of the basic financial statements and assistance with the preparation of the Annual Comprehensive Financial report and review of GANN appropriations limit report.
#8..
- 180 -
24 B. A report on compliance and internal control over financial reporting based on an audit of the financial statements.

C. Testing five (5) programs for compliance with the Single Audit Act and applicable laws and regulations and issuance of a report thereon for the City and joint power agencies.

D. A report on compliance and internal control over compliance applicable to each major federal program.

E. A report on compliance with specific requirements applicable to non-major federal financial assistance programs.

F. Separate audit reports for the financial statements of the following component units and joint ventures of the City of Modesto:

1. Tuolumne River Regional Park (TRRP)

2. The Community Facilities Districts (CFDs) (currently the City has twelve (12) CFDs but the number may increase to up to eighteen (18))

3. Ceres-Modesto Industrial Fire Protection JPA

4. Measure L - Local Roads First Transportation Funding Measure G. Separate audit reports on the following State programs:

1. Local Transportation Funds (LTF) - Streets and Roads and Non-motorized funds under Transportation Development Act (TDA)

2. Abandoned Vehicle Abatement (AVA)
H. Preparation of Annual Report of Financial Transactions for the City (State Controller's Report).

I. Others, as requirements change, may be added as additional work, as covered in the RFP by the terms for such work.

J. In the required report(s) on compliance and internal controls, the auditor shall communicate any reportable conditions found during the audit. A reportable condition shall be defined as a significant deficiency in the design or operation of the internal control structure, which could adversely affect the organization's ability to record, process, summarize and report financial data consistent with the assertions of management in the financialstatements.

K. Reportable conditions that are also material weaknesses shall be identified as such in the report. Non-reportable conditions discovered by the auditors shall be reported in a separate letter to management, which shall be referred to in the reports on internal #8..
- 181 -
25 controls.

L. Reports on compliance shall include all instances of non-compliance.

Irregularities and illegal acts: Auditors shall be required to make an immediate, written report of all irregularities and illegal acts or indications of illegal acts of which they become aware to the following parties:

City Manager City Auditor
Deputy City Manager
City Attorney
Director of Finance
City Clerk
M. Reporting to the audit committee. Auditors shall assure that the City of Modesto's Audit Committee is informed of each of the following:

1. The auditor's responsibility under generally accepted auditing standards

2. Significant accounting policies

3. Management judgments and accounting estimates

4. Significant audit adjustments

5. Other information in documents containing audited financial statements

6. Disagreements with management

7. Management consultation with other accountants

8. Major issues discussed with management prior to retention

9. Difficulties encountered in performing the audit
Submittals shall include, at a minimum, the following components.

1.8 COVER LETTER:

A signed cover letter briefly stating the proposers’ understanding of the work to be done, the commitment to perform the work within the time period, and a statement why the firm believes itself to be best qualified to perform the engagement.

1.9 TECHNICAL PROPOSAL:

The technical proposal shall follow the order set forth in items A through I of this section.

The purpose of the Technical Proposal is to demonstrate the qualifications, competence and capacity of the firms seeking to undertake an independent audit of the City in conformity with the requirements of this RFP. As such, the substance of proposals will carry more weight than their form or manner of presentation. The Technical Proposal should demonstrate the qualifications of the firm and of the particular staff to be assigned to this engagement. It should also specify an audit approach that will meet the request for proposals requirements.

The Technical Proposal should address all of the points outlined in the RFP. The Proposal should be a straightforward, concise description of the proposer's capabilities to satisfy the requirements of the RFP. While additional data may be presented, the following subjects, items Nos. A through I, shall be included. They represent the criteria against which the proposal will be evaluated.
#8..
- 182 -
26 A. Independence:

The firm shall provide an affirmative statement that is independent of the City of Modesto as defined by the U.S. General Accounting Office's Government Auditing Standards (1994 edition, with all subsequent amendments).

The firm shall also provide an affirmative statement that it is independent of the component units of the City as defined by those same standards.

The firm should also list and describe the firm's (or proposed subcontractors') professional relationships involving the City or any of its component units for the past five (5) years, together with a statement explaining why such relationships do not constitute a conflict of interest relative to performing the proposed audit.

In addition, the firm shall give the City written notice of any such professional relationships entered into during the period of this agreement.

B. License to Practice in California:

An affirmative statement should be included that the firm and all assigned key professional staff are properly licensed to practice in the State of California.

C. Firm Qualifications and Experience:

The proposer shall state the size of the firm, the size of the firm's governmental audit staff, the location of the office from which the work on this engagement is to be performed, and the number and nature of the professional staff to be employed in this engagement on a full-time basis and the number and nature of the staff to be employed on a part-time basis.

If the proposer is a joint venture or consortium, the qualifications of each firm comprising the joint venture or consortium shall be separately identified and the firm that is to serve as the principal auditor shall be noted, if applicable.

The firm is also required to submit a copy of the report on its most recent external quality control review, with a statement whether that quality control review included a review of specific government engagements.

The firm shall also provide information on the results of any federal or state desk reviews or field reviews of its audits during the past three (3) years. In addition, the firm shall provide information on the circumstances and status of any disciplinary action taken or pending against the firm during the past three (3) years with state regulatory bodies or professional organizations.

D. Partner, Supervisory and Staff Qualifications and Experience:

Identify the principal, supervisory and management staff, including engagement partners, managers, other supervisors and specialists, who would be assigned to the engagement. Indicate whether each such person is registered or licensed to practice #8..
- 183 -
27 as a certified public accountant in California. Provide information on the government auditing experience of each person, including information on relevant continuing professional education for the past three (3) years and membership in professional organizations relevant to the performance of this audit.

Provide as much information as possible regarding the number, qualifications, experience and training, including relevant continuing professional education, of the specific staff to be assigned to this engagement. Indicate how the quality of staff over the term of the agreement will be assured.

Engagement partners, managers, other supervisory staff and specialists may be changed if those personnel leave the firm. These personnel may also be changed for other reasons with the express prior written permission of the City of Modesto.

However, in either case, the City retains the right to approve or reject replacements.

Consultants and firm specialists mentioned in response to this RFP can only be changed with the express prior written permission of the City, which retains the right to approve or reject replacements.

Other audit personnel may be changed at the discretion of the proposer provided that replacements have substantially the same or better qualifications or experience.

E. Prior Engagements with the City:

List separately all engagements within the last five (5) years, ranked on the basis of total staff hours, for the City by type of engagement (i.e., audit, management advisory services, other). Indicate the scope of work, date engagement partners, total hours, the location of the firm's office from which the engagement was performed, and the name and telephone number of the principal client contact.

F. Similar Engagements With Other Government Entities:

For the firm's office that will be assigned responsibility for the audit, list the most significant engagements performed (maximum of five (5) to be listed) in the last five (5) years that are similar to the engagement described in this RFP. These engagements should be ranked on the basis of total staff hours. Indicate the scope of work, date, engagement partners, total hours, and the name and telephone number of the principal client contact.

G. Specific Audit Approach:

The proposal shall set forth a work plan, including an explanation of the audit methodology to be followed, to perform the services required outlined in this RFP.

In developing the work plan, reference shall be made to such sources of information as City budget and related materials, organizational charts, manuals and programs, and financial and other management information systems.

Proposers shall be required to provide the following information on their audit approach:
#8..
- 184 -
28 1. Proposed segmentation of the engagement.

2. Level of staff and number of hours to be assigned to each proposed segment of the engagement.

3. Sample size and the extent to which statistical sampling is to be used in the engagement.

4. Describe the type and extent of analytical procedures to be used in the engagement and how analytical information will be utilized in approaching the engagement.

5. Approach to be taken to gain and document an understanding of the City's internal control structure.

6. Approach to be taken in determining laws and regulations that will be subject to audit test work.

7. Approach to be taken in drawing audit samples for purposes of tests of compliance ·
H. Identification of Anticipated Potential Audit Problems:

The proposal should identify and describe any anticipated potential audit problems, the firm's approach to resolving these problems, and any special assistance that will be requested from the City.

I. Report format:

The proposal shall include sample formats of required reports.

1.10 MANDATORY ELEMENTS:

Proposer shall provide detailed information on the following:

A. The audit firm is independent and licensed to practice in California.

B. The firm has no conflict of interest or impairment to independence with regard to any other work performed by the firm for the City.

C. The firm adheres to the instructions in this RFP on preparing and submitting their proposal.

D. The firm submits a copy of its last external quality control review report and a record of quality audit work.

1.11 EXPERTISE AND EXPERIENCE:

Proposer shall provide detailed information on the following:

A. The firm’s past experience and performance on comparable governmental engagements. #8..
- 185 -
29 B. The firm’s professional personnel and management personnel assigned to the engagement.

1.12 AUDIT APPROACH:

Proposer shall provide detailed information on the following:

A. Proposed staffing plan for the various segments of the engagement.

B. Sampling techniques.

C. Analytical procedures.

1.13 SUBCONTRACTING:

Should any firm submitting a proposal consider subcontracting portions of the engagement, that fact must be clearly identified in the proposal along with the name of the proposed subcontractor.

Following the award of the audit contract, no additional subcontracting shall be allowed without the express prior consent by the City of Modesto.

1.12 ACCOUNT MANAGER/SUPPORT STAFF
Please identify the account manager and support staff that will be assigned to this project and provide resumes. This should include the names, titles and qualifications (including education, degrees and specialization) of the Project Manager and support staff and any sub-consultants who will be performing work on the project. It should also include the Project Manager and support staffs experience, length of time with the firm and projects for organizational structure should be included.

1.13 REQUIRED LICENSES:

Prior to beginning any service that shall be furnished under this specification, the bidder shall secure the appropriate Business/Delivery license from the City of Modesto. Business/Delivery license information may be obtained by calling (209)577-5389.

If the bidder is furnishing any labor or service including installation or maintenance, the bidder shall possess the appropriate California Contractor's license(s) at the time the proposal is submitted. A contract shall not be awarded to a bidder that does not possess the appropriate Contractor's license(s). The appropriate Contractor's license(s) is that specified in this request, or if not specified, that which is otherwise required by law, and qualifies the Contractor to do business in the State of California.

1.14 INSURANCE:

The CONTRACTOR shall provide, at its own expense, and maintain at all times the following insurance with insurance companies licensed in the State of California and shall provide evidence of such insurance to the CITY as may be required by the City Clerk of the CITY. The policies or certificates thereof shall provide that, thirty (30) days prior to cancellation or material change in the policy, notices of same shall be given to the Risk Manager of the CITY by registered mail, return receipt requested, for all of the following stated insurance policies.
#8..
- 186 -
30 A. Workers' Compensation - in compliance with the statutes of the State of California, plus employer's liability with a minimum limit of liability of $1,000,000.

B. General Liability - insurance with a minimum limit of liability per occurrence of $1,000,000 for bodily injury and property damage. The insurance shall indicate on the certificate of insurance the following coverage and indicate the policy aggregate limit applying to: premises and operations; broad form contractual; independent contractors and subcontractors; products and completed operations; and/or professional liability.

C. Automobile Liability – insurance with a minimum limit of liability per occurrence of $1,000,000 for bodily injury and property damage. This insurance shall cover any automobile for bodily injury and property damage.

D. Professional Liability – insurance with a minimum limit of $1,000,000 per claim and $2,000,000 policy aggregate. If coverage is on a claims-made basis it shall be maintained for at least three (3) years following completion of the work.

If at any time any of said policies shall be unsatisfactory to the CITY, as to form or substance or if a company issuing such policy shall be unsatisfactory to the CITY, the CONTRACTOR shall promptly obtain a new policy, submit the same to Risk Manager for approval and submit a certificate thereof as hereinabove provided. Upon failure of the CONTRACTOR to furnish, deliver or maintain such insurance and certificates as above provided, this Agreement, at the election of the CITY, may be forthwith declared suspended, or terminated. Failure of the CONTRACTOR to obtain and/or maintain any required insurance shall not relieve the CONTRACTOR from any liability under this Agreement, nor shall the insurance requirements be construed to conflict with or otherwise limit the obligations of the CONTRACTOR concerning indemnification. The CITY, it agents, officers, employees, and volunteers shall be named as an additional insured on all insurance policies required herein, except Workers' Compensation.

The Workers' Compensation insurer shall agree to waive all rights of subrogation against the CITY, its agents, officers, employees, and volunteers for losses arising from work performed by CONTRACTOR for the CITY.

The CONTRACTOR's insurance policy(ies) shall include a provision that the coverage is primary as respects the CITY; shall include no special limitations to coverage provided to additional insured; and, shall be placed with insurer(s) with acceptable Best's rating of A:VII or with approval of the Risk Manager.

For any claims related to this project, the CONTRACTOR’s insurance coverage shall be primary insurance as respects the Entity, its officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by the Entity, its officers, officials, employees, or volunteers shall be excess of the Contractor’s insurance and shall not contribute with it. #8..
- 187 -
31 REQUEST FOR PROPOSAL AND SPECIFICATIONS NO. 2122-40

EXTERNAL AUDITING SERVICES

GENERAL REQUIREMENTS

2.0 PROPOSAL SUBMITTAL:

Proposer should submit two “inked” (preferably blue ink) signed original proposal documents, plus two (2) copies of the signed original proposal document and one (1) electronic copy submitted via USB. The original proposal document(s) shall be clearly marked. Photocopies do not constitute an original proposal document.

FAILURE TO FURNISH AT LEAST ONE “INKED” SIGNED ORIGINAL PROPOSAL DOCUMENT MAY RESULT IN DISQUALIFICATION.

It is the responsibility of the proposers to identify information in their proposal responses that they consider confidential under the California Public Records Act. To the extent that the City agrees with that designation, such information will be held in confidence whenever possible. All other information will be considered public.

All costs associated with the preparation of this proposal shall be borne by the proposer.

All exceptions taken to these specifications shall be specifically and clearly identified on the Exceptions, Clarifications, and Amendments Form. Failure to comply with this provision is grounds for proposal rejection.

Exceptions taken shall not affect the overall performance and quality of the services required by the City. The Purchasing Manager or her designated agent shall make the final decision regarding the acceptability of the services with exceptions.

Proposal shall be made in the format specified below. All requested exhibits shall be submitted with the completed Proposal and in the designated format. No oral, telegraph, telephone, facsimile or electronic proposals will be accepted. Failure to comply with all requirements may result in proposal rejection.

2.0.1 PROPOSAL PREPARATION:

Proposal shall be submitted in a three-ring binder with section tabs (A through Z as needed) with responses in the order described below. In those instances where specific questions are asked, each question shall be repeated in the proposal with the response following the question.

Extraneous or marketing information shall not be included.

If a service requirement cannot be met, Proposer shall indicate “No Proposal” in the relevant section of the proposal. In this case, proposer may offer an alternative equivalent service.

2.0.2 ACCEPTANCE/REJECTION OF IRREGULAR PROPOSALS:

A contract shall be awarded to the proposer whose proposal most closely satisfies the needs of the City and is deemed the most advantageous to the City. The City reserves the right to reject any or all proposals or to waive any informalities or minor irregularities in a proposal. #8..
- 188 -
32 2.0.3 COMPLETE PROPOSAL SUBMITTAL:

The following documents constitute the makeup of a complete proposal submittal:
 Proposal Acknowledgement (Signature Form)
 Pricing Schedule (Signature Form)
 Exceptions, Clarifications, Amendments
 References
 Financial Interest Disclosure (Signature Form)
 Addenda Acknowledgment Form (If Applicable)
 Company History Statement
 Minimum Qualifications (Financials)
 Technical Proposal
Failure to furnish any of these documents may result in disqualification.

2.0.4 PROPOSAL PREPARATION:

Proposals shall be prepared in the order listed in Section 2.1.3 Complete Proposal Submittal.

Proposals should be tabbed with dividers. Tabbed dividers shall be clearly marked indicating the appropriate document.

2.1 COMPLIANCE:

Proposers are required to sign the “Pricing Schedule, Financial Interest Disclosure and Proposal Acknowledgement Forms” of this proposal document, thereby acknowledging they are in full compliance with all requirements of RFP No. 2122-40, and any addendum to such proposal.

Failure to comply may result in disqualification.

The proposer guarantees that the offered equipment, material or services meet all safety requirements applicable in accordance with Cal-OSHA regulations and any other rule or regulation required by the City of Modesto.

2.2 NON-COMPLIANCE:

If you cannot comply with a specification requirement, note as an addendum on the Exceptions, Clarifications, Amendments Form specification paragraph, your exception, and your recommendation. The Purchasing Manager will evaluate your recommendation. If after evaluation it is determined that the proposer is not in compliance with the specification, the proposal may be rejected.

2.3 PRICING FORMAT:

All labor, initial background checks, drug-screening, licenses and insurance necessary to perform the services shall be included in the proposed pricing.

Unless otherwise stated, the proposer agrees that, in the event of a price decline, the benefit of such lower pricing shall be extended to the City.

2.4 PRICING SCHEDULE:

Proposers shall use the Pricing Schedule Form to present their proposed pricing. No other form or format shall be accepted.
#8..
- 189 -
33 2.5 AWARD OF PROPOSAL:

Proposals shall be evaluated by a committee and will be ranked in accordance with the RFP section entitled “Evaluation Criteria.”
The committee shall recommend award to the proposer who, in its opinion, has submitted a proposal that best serves the overall interests of the City, and attains the highest overall point score.

Award may not necessarily be made to the proposer with the lowest price.

The City reserves the right to decline to award a contract if it is determined that the proposed pricing is not competitively priced based on similar contracts with public agencies within the State of California.

The City reserves the right to select that proposal, which best suits the City’s needs. Regardless of City staff’s recommendation, the City Council reserves the right to award a contract to the proposer that best suits the City’s needs as determined by the City Council whether or not said award is consistent with City staff’s recommendation for award.

2.6 EVALUATION PROCESS:

Proposals shall be evaluated using a three (3) step process:

Level 1 – Minimum Qualifications Review: The City shall perform an initial responsiveness review to determine compliance and shall notify disqualified Proposers. Proposers that do not meet the “Minimum Qualifications” requirements shall be deemed non-responsive and/or/nonresponsible to this RFP and will receive no further consideration.

Level 2 – Proposal Content and Cost Ratings: Proposals that meet Level 1 Minimum Qualifications Review shall be evaluated based on the evaluation criteria “Proposal Evaluation Criteria”. Proposer submittals shall be evaluated and scored. Proposer cost information shall be evaluated as part of Level 2 evaluation process.

Level 3 – Short List (Oral Presentations): At the sole discretion of the Evaluation Committee, a “short list” of proposers may be developed of the highest rated written submissions, based on Level 1 and Level 2 rankings. If the Evaluation Committee chooses, these proposers would be invited to give presentations. Final scoring of “short list” proposals shall be completed upon the conclusion of presentations.

2.7 TERM OF CONTRACT:

The term of the contract shall be for a period of three (3) years, with two (2) one-year extension options at the sole discretion of City, for a total of up to five (5) years.

Pricing shall remain firm for the first two (2) years of any contract, which may be awarded pursuant to this RFP.

Price increases for subsequent contract years number and number, shall not exceed the Consumer Price Index (CPI) for West Urban Area in any one contract year, and shall be negotiated through the Purchasing Division. Requests for price increases shall be submitted by Contractor(s) in writing, at least sixty (60) days prior to the annual anniversary date of the contract to be effective for the subsequent year.
#8..
- 190 -
34 2.8 QUANTITIES:

The successful proposer shall be required to provide whatever quantities may be required during the contract term. No minimum or maximum is guaranteed or implied.

2.9 FUNDING:

All annual extensions are based upon continuous funding for that purpose by the City Council.

Failure to fund any annual extension shall result in an immediate termination of the agreement without redress.

2.10 INSPECTION AND ACCEPTANCE:

Whenever the product or service provided by the supplier has been delivered to the delivery point, the designated agent shall make the final inspection and acceptance.

If upon initial inspection the product or service is found to be defective in its construction or deficient in any of the requirements of this specification, the supplier shall remedy or remove said product in an acceptable manner at the supplier's expense. No compensation shall be allowed for such correction of product, labor, or transportation of product.

2.11 CITY BUSINESS LICENSE:

Prior to beginning any service, that shall be furnished under this specification and proposal, the Proposer shall secure the appropriate Business license from the City of Modesto. Business license information may be obtained by calling (209) 577-5389.

2.12 TERMINATION OF SERVICES:

Refer to the “Sample Agreement” for termination of services

2.13 ELECTRONIC PAYMENT:

Electronic Payment Method:

The City of Modesto provides an Epay Program which involves payment of invoices by a secure Visa account number assigned to the supplier after award of bid or contract. Notification of payments and required invoice information is issued to the supplier’s designated Accounts Receivable contact by email remittance advice at time of payment.

During the evaluation process preference may be shown to proposers that agree to accept Epay for payment of invoices. Please indicate on the Pricing Schedule whether or not your company will accept the City’s Epay Program.

Invoice to: City of Modesto
Attn: Accounts Payable
P.O. Box 642
Modesto, CA 95353
Email to: [email protected]
The preferred method for submitting invoices in electronically via email.

2.14 OTHER GOVERNMENT/PUBLICLY FUNDED AGENCIES:

If mutually agreeable to all parties, the issuance of any resultant contract/purchase order referencing these specifications and modified by mutual agreement between all parties may be #8..
- 191 -
35 extended to other government or publicly funded agencies. It shall be understood that all terms and conditions as specified herein shall apply.

2.15 NON-DISCRIMINATION:

A. During the performance of this contract, Contractor and its subcontractors shall not unlawfully discriminate against any employee or applicant for employment because of race, color, ancestry, religion, sex, national origin, marital status, age, medical condition (cancer related), physical handicap (including AIDS), or sexual orientation. Equal employment opportunity extends, but is not limited to recruitment, compensation, benefits, layoff, termination, and all other conditions of employment. Contractor and subcontractors shall ensure that the evaluation and treatment of their employees and applicants for employment are free of such discrimination. Contractor and subcontractors shall comply with the provisions of the Fair Employment and Housing Act (Government Code, Section 12900 et seq.) and the applicable regulations promulgated thereunder (California Administrative Code, Title 2, Section 7285.0 et seq.). The applicable regulations of the Fair Employment and Housing Commission implementing Government Code, Section 12900, set forth in Chapter 5 of Division 4 of Title 2 of the California Administrative Code are incorporated into this contract by reference and made a part hereof as if set forth in full.

B. 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.

C. Contractor shall include the nondiscrimination and compliance provisions of this clause in all subcontracts to perform work under the contract.

D. 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, other sources of information and its facilities as said Department or City shall require to ascertain compliance with this clause.

2.16 NON-DISCRIMINATION OF THE HANDICAPPED:

CERTIFICATION OF PROPOSER REGARDING NON-DISCRIMINATION OF THE

HANDICAPPED
By executing this agreement, the proposer hereby certifies that he/she is in compliance with the Americans with Disabilities Act of 1990, the applicable administrative requirements promulgated in response thereto, and any other applicable Federal laws and regulations relating to handicap discrimination and participation, and will continue to do so for at least the duration of the agreement and any extensions thereof.

2.17 DRUG FREE WORKPLACE:

Proposer/Contractor certifies that he/she is in compliance with Sections 8350 - 8355 of Chapter

5.5 of the Government Code, Drug Free Workplace Act. Every person or organization awarded a contract/purchase order or grant for the procurement of any property or service from any state #8..
- 192 -
36 agency (city) shall certify to the contracting or granting agency that it will provide a drug free workplace.

2.18 HOLD HARMLESS AGREEMENT:

The CONTRACTOR shall hold the CITY, its agents, officers, employees, and volunteers, harmless from and save, defend and indemnify them against any and all claims, losses, liabilities and damages from every cause, including but not limited to injury to person or property or wrongful death, with the indemnity to include reasonable attorney's fees, and all costs and expenses, arising directly or indirectly out of any act or omission of CONTRACTOR, whether or not the act or omission arises from the sole negligence or other liability of CITY, or its agents, officers, employees, or volunteers relating to or during the performance of its obligations under the Agreement.

2.19 ASSIGNMENT OF RIGHTS:

CONTRACTOR offers and agrees, and will require all subcontractors and suppliers to agree, to assign to the CITY all rights, title, and interest in and to all causes of action it and they may have under Section 4 of the Clayton Act (15 United States code, Section 15) or under the Cartwright Act (Business and Professions Code, Section 16700 et seq.), arising from the purchase of goods, services, or materials pursuant to this contract or any subcontract. The assignment made by CONTRACTOR and all assignments made by subcontractors and suppliers shall be made and become effective at the time the CITY tenders final payment to CONTRACTOR, without further acknowledgment by the parties (Government Code, Sections 4550-4554).

2.20 CITY PROCESS/PROCEDURE APPROVALS:

CITY approval of any process or procedure shall not relieve the proposer of his/her responsibility to furnish the required items and service meeting all specifications contained herein.

2.21 PROPOSAL/SELLER REPRESENTATION:

The proposer/seller represents that:

A. He/She has had an opportunity to examine and has examined any and all of the documents, including specifications, any resultant purchase order and supporting data, and that he/she has, from the information contained in such documents, specifications, and data, fully acquainted him/her with all conditions relevant to the work.

B. He/She has made all reasonable investigations essential to a full understanding of the difficulties, which may be encountered in performing the work.

C. He/She will complete the work for the compensation stated above.

D. He/She assumes full and complete responsibility for all conditions relevant to the work and all risks in connection therewith.

E. In addition thereto, the proposer/seller represents that he/she is fully qualified to do the work in accordance with the terms of any Purchase Order issued within the time specified in it.
#8..
- 193 -
37 F. Anything mentioned in the specifications and not in the Purchase Order, or mentioned in the Purchase Order and not mentioned in the specifications, shall be of like effect as if shown or mentioned in both. In case of difference between the specifications and the Purchase Order, the Purchase Order shall govern.

2.22 FAILURE TO PERFORM SATISFACTORY:

It is agreed and understood that if the CONTRACTOR fails to perform the work as specified herein, CITY's representative may (1) consent to accept such unsatisfactory service with an appropriate adjustment in contract price, based on established cost factors, (2) have such required work done by CITY forces or otherwise, and charge the cost thereof to the CONTRACTOR, or (3) recommend termination of contract between said CONTRACTOR and the City of Modesto.

Those discrepancies and deficiencies in the work that remains uncorrected after the date set for correction may be the necessary justification for a billing adjustment in the month following the occurrence. Unless otherwise negotiated, billing adjustments for this incomplete or uncorrected work shall be permanent retention of 100% of the estimated monthly cost for the work not corrected or completed.

2.23 CONTRACTOR'S RESPONSIBILITY FOR DAMAGES:

If CONTRACTOR damages any property belonging to the CITY, the CITY may either retain from the money due to CONTRACTOR an amount sufficient to repair the damage or require CONTRACTOR to repair the damage to the satisfaction of the CITY at CONTRACTOR's expense.

2.24 LABOR FORCE AND SUPERVISION:

CONSULTANT shall provide sufficient labor at all times to carry out the project properly and shall ensure that fully experienced competent licensed workers who are skilled in the type of work required are employed. CONSULTANT shall ensure that supervision is provided at all times while any work under this contract is being performed. If, in the judgment of the CITY, any person is incompetent or disorderly, CONSULTANT shall promptly remove such person from the work for the duration of the contract.

2.25 PROTEST AND APPEAL PROCEDURES:

Potential offerors, bidders, contractors, and subcontractors wishing to protest or appeal a procurement or contracting decision by the City of Modesto must follow the procedures provided by the section. Protests or appeals which are not submitted in accordance with these procedures will not be reviewed.

DEFINITIONS
For the purposes of this procedure: "Days" means working days in which City Hall is open for business, excluding holidays and weekends.
"Filing Date" or "Submission Date" means the date of receipt by the City Clerk’s office of the City of Modesto.
"Interested Party" means an actual or prospective bidder or offeror, or any contractor or subcontractor identified by name in any bid or proposal. "Bid" includes the term "offer" or "proposal" as used in the context of formal, informal, or negotiated procurements.
#8..
- 194 -
38 "Announced Decision" includes the term “Notice of Intent to Award Letter”. Once the City has issued an Announced Decision, the date noted will begin the time that an Interested Party may lodge a protest. Procurements valued at $50,000 or less normally will not have an Announced Decision.

A. PROTEST PROCEDURES

1. Any interested party may lodge a written protest to an Announced Decision with the City of Modesto's Purchasing Manager no later than ten (10) days after the Announced Decision.

2. The protest shall be delivered or sent by registered mail and postmarked by the deadline, or protest will be automatically rejected. Protestors who choose to be represented by legal counsel are responsible for the associated expenses.

3. The protest shall be accompanied by a certified or cashier's check in the amount of $300.00, (EXCEPT FOR PROTESTS OF FEDERALLY FUNDED
PROJECTS) or in such other sum as the City may establish, made payable to the Clerk of the City of Modesto. Protests filed without the requisite fee will be rejected without any additional review.

4. The protest filed with the Purchasing Manager shall:
a. Include the name, address, and business telephone number of the protestor;
b. Identify the project under protest by name, Request for Bid (RFB)/Request for Proposal (RFP) number, and bid/RFP date; c. Contain a concise statement of the grounds for protest; d. Include all supporting documentation, if any. Documentation submitted after filing deadline will not be reviewed.

All protests shall either be delivered to:

City Clerk’s Office
Attn: Purchasing Manager
1010 Tenth St. Suite 6600
Modesto CA 95354
Or mailed to:

City Clerk’s Office
Attn: Purchasing Manager
PO Box 642
Modesto CA 95353
B. PROTEST REVIEW (ANNOUNCED DECISION)
#8..
- 195 -
39 1. Protest to Purchasing Manager
Upon receipt of a complete and timely protest, the Purchasing Manager shall review all the submitted materials and shall create and retain a written record of the review. The Purchasing Manager shall respond at least generally to each material issue raised in the protest not later than ten (10) days after receipt of the protest. Notice of the Purchasing Manager's decision may be given by letter mailed through U.S. Postal Service.

2. Appeal to Deputy City Manager
The Purchasing Manager's decision may be appealed in writing to the City of Modesto's Deputy City Manager(s) no later than ten (10) days after the date of the Purchasing Manager’s Decision. The scope of the appeal shall be limited by the issues raised in the initial protest to the Purchasing Manager. The Deputy City Manager shall not be permitted to review any newly raised issues. The Deputy City Manager shall review the appeal, accompanying supporting documents, if any, and the written record of the protest review by the Purchasing Manager.

A written record of the Deputy City Manager's review shall be created and maintained. The Deputy City Manager shall give notice of his or her decision to the protestor within ten (10) days after receipt of appeal.

All protest appeals shall either be delivered to:

City Clerk’s Office
Attn: Deputy City Manager
1010 Tenth St. Suite 6600
Modesto CA 95354
Or mailed to:

City Clerk’s Office
Attn: Deputy City Manager
PO Box 642
Modesto CA 95353

3. Appeal to City Council
Any protestor seeking to appeal to the decision of the Deputy City Manager may appeal in writing to the City Council by filing with the City Clerk a written notice of such appeal not later than fifteen (15) business days after the date of the Deputy City Manager's decision. The City Clerk will calendar the protest for Council hearing and give notice of the time and place of the hearing as provided in Modesto Municipal Code Sections 1-4.01 through 1-

4.05. #8..
- 196 -
40 The City Council is the highest authority of the City of Modesto. It is possible that the City Council may reverse the decision of any City staff member at the hearing, or provide other direction to staff. In such cases, staff cannot reverse a City Council decision.

All protests shall either be delivered to:

City Clerk’s Office
Attn: City Council
1010 Tenth St. Suite 6600
Modesto CA 95354
Or mailed to:

City Clerk’s Office
Attn: City Council
PO Box 642
Modesto CA 95353
C. PROTESTS OF PROCUREMENTS EXCEEDING $250,000.00
Interested parties protesting procurements exceeding $250,000.00 shall comply with the procedures contained herein, except that in lieu of appeal to the Deputy City Manager, a protestor may request that the protest be heard and decided at an administrative hearing.

A written request for administrative hearing shall be accompanied by a certified or cashier's check in the amount of $1,500.00, (EXCEPT FOR PROTESTS OF FEDERALLY FUNDED PROJECTS; Refer to Purchasing Procedures Manual for the Transit Division and Federal Transit Administration Funded Purchases, Chapter 14) payable to the City of Modesto, and shall be received by the Purchasing Manager not later than fifteen (15) days after dispatch of the Purchasing Manager's decision. The request for hearing shall include the specific grounds of the appeal.

The City of Modesto shall select and engage an impartial and qualified person to act as hearing officer in the pending protest. The protestor shall have the right to twice reject the selected hearing officer, provided that the City is notified of such rejection within three (3) days of notice to protestor of the name of the hearing officer.

The protest shall be heard not later than twenty (20) days after receipt of protestor's request for hearing and the selection of a hearing officer. Protests not heard in a timely manner shall be deemed withdrawn, unless the City and the protestor mutually agree otherwise in writing. The protestor’s failure to accept a hearing officer after the third attempt by City staff to identify an impartial hearing officer shall be deemed a withdrawal of the protest.

The costs of the hearing officer and expenses of the protest shall be borne by the protestor. The sums deposited with the request for hearing shall be credited to the costs of the hearing officer and other hearing expenses.
#8..
- 197 -
41 The decision of the hearing officer shall be deemed as the final decision of the City, and no other appeal to City Staff or body shall be permitted.

D. PROCUREMENTS OBTAINED WITH FEDERAL FUNDS

1. If the protested procurement involves federal funds, e.g., from the Federal Transit Administration (FTA) of the United States, the Deputy City Manager, City Council, or hearing officer shall give notice, accompanying their respective decisions, to the protestor that he or she has the right to appeal to the appropriate federal agency, for which an agency name, contact (where available) and address shall be provided by City staff. Such an appeal shall be filed with the appropriate agency within seven (7) business days of the dispatch or rejection notices to the protestor. Federal agencies may entertain protests alleging that the City has failed to adopt written protest procedures or has failed to follow such procedures. Appeals to the Federal Transit Administration (FTA) shall comply with FTA Circular 4220.1E and the amendments and supplements thereto.

Additional information regarding protesting procurements obtained with Federal Funds can be found in the Purchasing Procedures Manual for the Transit Division and Federal Transit Administration Funded Purchases, Chapter 14.

2. The City Council is the highest authority of the City of Modesto. It is possible that the City Council may reverse the decision of any City staff member at the hearing before Council on the procurement at hand. In such cases, no internal appeal is possible since staff may in no case reverse a City Council decision. In such an event, a disappointed transit bidder or a contract involving expenditures of Federal funds shall have the right to appeal the City Council decision directly to the Federal Transit Administration. #8..
- 198 -
42 SAMPLE AGREEMENT
REQUEST FOR PROPOSAL AND SPECIFICATIONS NO. 2122-40

EXTERNAL AUDITING SERVICES
THIS AGREEMENT, made and entered into in the City of Modesto, State of California, this day of , 2022 (“Effective Date”), by and between the CITY OF MODESTO, a municipal corporation of the State of California, hereinafter referred to as "City", and ___________________________, a California corporation, hereinafter referred to as "Consultant."
This Agreement is made with regard to the following recitals:

A. The City has determined that auditing services are services are needed to support the City of Modesto.

B. Consultant represents that it is qualified, willing and able to provide the services to prepare said document(s).

NOW, THEREFORE, in consideration of this agreement, and the mutual promises, covenants, and stipulations hereinafter contained, the parties agree as follows:

1. SCOPE OF SERVICES.

Consultant shall undertake and complete the preparation of the scope of work as set forth and described in the documents attached hereto and referred to as Exhibit "A" or "project". The Consultant shall perform the services as described in Exhibit "A" in a manner compatible with the standards of its profession, and shall produce a fully complete project that is acceptable to City.

2. TERM OF AGREEMENT.

The term of the contract shall be for a period of three (3) years, with two (2) one-year extension options at the sole discretion of City, for a total of up to five (5) years. #8..
- 199 -
43 Pricing shall remain firm for the first two (2) years of any contract, which may be awarded pursuant to this RFP.

Price increases for subsequent contract years number and number, shall not exceed the Consumer Price Index (CPI) for West Urban Area in any one contract year, and shall be negotiated through the Purchasing Division. Requests for price increases shall be submitted by Contractor(s) in writing, at least sixty (60) days prior to the annual anniversary date of the contract to be effective for the subsequent year.

City hereby gives Consultant notice to proceed with the preparation of the project in the manner described in Exhibit "A", as of the Effective Date of this agreement.

Consultant shall diligently proceed with the preparation of the project and agrees to complete said preparation within the time period set forth in Exhibit "A".

3. COMPENSATION.

Consultant agrees to accept a sum not to exceed $_________ AND XX/100 DOLLARS ($XXX,XXX.XX) as full remuneration for performing all services and furnishing all staffing and materials called for in Exhibit "A" and for performance by Consultant of all of its duties and obligations under this Agreement.

The Compensation shall be paid pursuant in the manner and at the times set forth below:

All work to be performed under this Agreement shall be billed at the rates set forth in Exhibit “B” attached hereto, Consultant shall submit monthly invoices to City which include detailed tasks, hours worked, and billable rates for all work completed, and detailed receipts for any out-of-pocket, reimbursable costs paid by Consultant in connection with work performed on this project.

4. OBLIGATIONS OF CONSULTANT.
#8..
- 200 -
44 Throughout the term of this Agreement, Consultant shall possess, or secure all licenses, permits, qualifications and approvals legally required to conduct business.

Consultant warrants that it has all of the necessary professional capabilities and experience, as well as all tools, instrumentalities, facilities and other resources necessary to provide the City with the services contemplated by this Agreement. Consultant further warrants that it will follow the best current, generally accepted and professional practices to make findings, render opinions, prepare factual presentations, and provide professional advice and recommendations regarding this project.

5. PERFORMANCE BY KEY EMPLOYEE.

Consultant has represented to City that NAME, TITLE, will be the person primarily responsible for the performance of the services referred to in this Agreement.

City has entered into this Agreement in reliance on that representation by Consultant. Consultant therefore agrees that ____ percent (__%) or more of the time to be devoted to the project that is the subject of this Agreement will be that of the above-named person.

6. OWNERSHIP OF DOCUMENTS/TITLE TO DATA.

Ownership of Documents
All reports, drawings, designs, graphics, working papers and other incidental work or materials furnished hereunder shall become and remain the property of the City, and may be used by City as it may require without any additional cost to City. No reports shall be used by the Consultant for purposes other than this contract without the express prior written consent of City.

Title to Data
If, as a part of the agreement, Consultant is required to produce data such as, but not limited to, drawings, plans, specifications, calculations, models, flow diagrams, visual #8..
- 201 -
45 aids and other related materials, the originals of all such data generated under this agreement will be delivered to City upon the completion or termination of services under the contract.

All materials, documents, data or information obtained from the City data files or any City medium furnished to Consultant in the performance of this Agreement will at all times remain the property of the City. Such data or information may not be used or copied for direct or indirect use by Consultant after termination of this Agreement without written consent of the City.

7. NEWS AND INFORMATION RELEASE.

Consultant agrees that it will not issue any news releases in connection with either the award of this Agreement, or any subsequent amendment of or efforts under this Agreement, without first obtaining review and approval of said news releases from City through the City Manager.

8. INTEREST OF CONTRACTOR.

Consultant warrants that it presently has no interest and shall not acquire any interest, direct or indirect, which would conflict in any manner or degree with the performance of services required to be performed under this Agreement. Consultant warrants that, in performance of this Agreement, Consultant shall not employ any person having any such interest. Consultant agrees to file a Statement of Economic Interests with the City Clerk at the start and end of this contract if so required at the option of City.

9. AMENDMENTS.

Both parties to this Agreement understand that it may become desirable or necessary during the execution of this Agreement, for City or Consultant to modify the scope of services provided for under this Agreement. Any material extension or change in the scope of work shall be discussed with City and the change and cost shall be memorialized in a written amendment to the original contract prior to the performance of the additional work. #8..
- 202 -
46 Until a change order is so executed, City will not be responsible to pay any charges Consultant may incur in performing such additional services, and Consultant shall not be required to perform any such additional services.

10. INDEPENDENT CONTRACTOR.

All acts of Consultant, its agents, officers, and employees and all others acting on behalf of Consultant relating to the performance of this Agreement, shall be performed as independent contractors and not as agents, officers, or employees of City. Consultant, by virtue of this Agreement, has no authority to bind or incur any obligation on behalf of City.

Consultant has no authority or responsibility to exercise any rights or power vested in the City.

No agent, officer, or employee of the City is to be considered an employee of Consultant. It is understood by both Consultant and City that this Agreement shall not under any circumstances be construed or considered to create an employer-employee relationship or a joint venture.

Consultant, its agents, officers and employees are and, at all times during the terms of this Agreement, shall represent and conduct themselves as independent contractors and not as employees of City.

Consultant shall determine the method, details and means of performing the work and services to be provided by Consultant under this Agreement. Consultant shall be responsible to City only for the requirements and results specified in this Agreement, and, except as expressly provided in this Agreement, shall not be subjected to City's control with respect to the physical action or activities of the Consultant in fulfillment of this Agreement. Consultant has control over the manner and means of performing the services under this Agreement.

Consultant is permitted to provide services to others during the same period service is provided to City under this Agreement. If necessary, Consultant has the responsibility for employing other persons or firms to assist Consultant in fulfilling the terms and obligations under this Agreement.
#8..
- 203 -
47 If in the performance of this Agreement any third persons are employed by Consultant, such persons shall be entirely and exclusively under the direction, supervision, and control of Consultant. All terms of employment including hours, wages, working conditions, discipline, hiring, and discharging or any other term of employment or requirement of law shall be determined by the Consultant.

It is understood and agreed that as an independent contractor and not an employee of City neither the Consultant or Consultant's assigned personnel shall have any entitlement as a City employee, right to act on behalf of the City in any capacity whatsoever as an agent, or to bind the City to any obligation whatsoever.

It is further understood and agreed that Consultant must issue W-2 forms or other forms as required by law for income and employment tax purposes for all of Consultant's personnel.

As an independent contractor, Consultant hereby indemnifies and holds City harmless from any and all claims that may be made against City based upon any contention by any third party that an employer-employee relationship exists by reason of this Agreement.

11. ASSIGNMENT.

Neither this Agreement nor any portion thereof shall be subcontracted or assigned without the express prior written consent of the City in each and every instance.

12. PATENT/COPYRIGHT MATERIALS.

Unless otherwise expressly provided in the contract, Consultant shall be solely responsible for obtaining the right to use any patented or copyrighted materials in the performance of this Agreement. Consultant shall furnish a warranty of such right to use to City at the request of City.

13. NOTICES.
#8..
- 204 -
48 Any and all notices permitted or required to be given hereunder shall be deemed duly given and effective (a) upon actual delivery, if delivery is by hand; or (b) five (5) days after delivery into the United States mail if delivery is by postage paid registered or certified (return receipt requested) mail. Each such notice shall be sent to the parties at the address respectively indicated below or to any other address as the respective parties may designate from time to time.

FOR Consultant:

Name:

Address:

Attention:

Phone: ( )
FOR CITY:

Name:

Address:

Attention:

Phone: ( )

14. INSURANCE REQUIREMENTS.

The Consultant shall provide at its own expense and maintain at all times the following insurance with insurance companies licensed in the State of California and shall provide evidence of such insurance to the City as may be required by the Risk Manager of the City. The policies or certificates thereof shall provide that, thirty (30) days prior to cancellation or material change in the policy, notices of same shall be given to the Risk Manager of the City by certified mail, return receipt requested, for all of the following stated insurance policies. (a) Worker's Compensation - in compliance with the statutes of the State of California, plus employer's liability with a minimum limit of liability of $1,000,000. #8..
- 205 -
49 (b) General Liability insurance with a minimum limit of liability per occurrence of $1,000,000 for bodily injury and $1,000,000 for property damage or $1,000,000 combined single limit. If commercial general liability insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required per-occurrence limit.

This insurance shall indicate on the certificate of insurance the following coverages and indicate the policy aggregate limit applying to: premises and operations; broad form contractual; independent consultants and subcontractors; products and completed operations. (c) Automobile Liability insurance with a minimum limit of liability per occurrence of $1,000,000 for bodily injury and $1,000,000 property damage or $1,000,000 combined single limit. This insurance shall cover any automobile for bodily injury and property damage.
(d) Professional Liability (Errors and Omissions) Insurance with limits not less than $2,000,000 per claim, $4,000,000 aggregate. If coverage is on a claims made basis it shall be maintained for at least three (3) years following completion of the work.

If at any time any of said policies shall be unsatisfactory to the City, as to form or substance, or if a company issuing such policy shall be unsatisfactory to the City, the Consultant shall promptly obtain a new policy, submit the same to the Risk Manager for approval and submit a certificate thereof as hereinabove provided. Upon failure of the Consultant to furnish, deliver or maintain such insurance and certificates as above provided, this Agreement, at the election of the City, may be forthwith declared suspended or terminated.

Failure of the Consultant to obtain and/or maintain any required insurance shall not relieve the Consultant from any liability under this Agreement, nor shall the insurance requirements be construed to conflict with or otherwise limit the obligations of the Consultant concerning indemnification. The City, its agents, officers, employees, and volunteers shall be named as an #8..
- 206 -
50 additional insured on all insurance policies required herein, except Workers' Compensation and Professional Liability. CONSULTANT shall provide CITY with separate endorsements evidencing proof of the CITY ’ s additional insured status as to both the general liability and automobile liability insurance policies. The Workers' Compensation insurer shall agree to waive all rights of subrogation against the City, its agents, officers, employees, and volunteers for losses arising from work performed by Consultant for the City. In addition, CONSULTANT shall provide CITY with a Workers Compensation subrogation waiver by way of a separate endorsement. The Consultant's insurance policy(ies) shall include a provision that the coverage is primary as respects the City; shall include no special limitations to coverage provided to additional insured; and, shall be placed with insurer(s) with acceptable Best's rating of A:VII or with approval of the Risk Manager. The Consultant must deliver certificates evidencing existence of the insurance listed above to the City prior to the time the contract is signed.

All endorsements referenced above must include the applicable policy number.

15. TERMINATION OF AGREEMENT.

Termination by City for Default of Consultant
Should Consultant default in the performance of this Agreement or materially breach any of its provisions, at its option, City may terminate this Agreement by giving written notification to Consultant. The termination date shall be the effective date of the notice. For the purposes of this section, material breach of this Agreement shall include, but not be limited to, any of the following: failure to perform required services or duties, willful destruction of City's property by Consultant, dishonesty or theft.

Termination by City for Convenience
The City may also terminate the Consultant's performance under the Agreement, either in whole or in part, at its own discretion, or when conditions encountered during the #8..
- 207 -
51 Work make it impossible or impracticable to proceed, or when the City is prevented from proceeding with the Agreement by act of God, by law, or by official action of a public authority, or upon a determination by the City that such termination is in the best interest and convenience of the City, or whenever the City is prohibited from completing the Work for any reason. The City shall provide no less than ten (10) calendar days written notice of its intent to terminate the Agreement for convenience, and shall endeavor to provide the Consultant with consultation with the City prior to termination.

Termination by City for Lack of Budgeted Funds
The City may terminate this Agreement effective July 1 of any given year upon the City's determination to not appropriate sufficient funds for this Agreement for the ensuing fiscal year. In such event City shall give Consultant not less than 30 days written notice of termination.

Termination by City for Change of Consultant's Tax Status If City determines that Consultant does not meet the requirements of federal and state tax laws for independent contractor status, City may terminate this Agreement by giving written notice to Consultant. The termination date shall be the effective date of the notice.

Post-Termination Procedures
If this Agreement is terminated pursuant to this Section, Consultant shall:
a. Cease its work as directed in the notice of termination as of the termination date and see to it that its employees, subconsultants and agents are notified of such termination and act as specified in the notice of termination;
b. Terminate all orders and Subcontractors except as necessary to complete any portion of the Work that is not terminated; c. If directed in writing by the City to do so, assign all right, #8..
- 208 -
52 title and interest in subcontracts and materials in progress to City, in which case the City will have the right at its discretion to settle, or pay any or all claims arising out of the termination of such subconsultants, but in no event shall recovery by any Consultant or subconsultant include lost profits for portions of the Work not completed or undertaken, including materials not delivered; d. Deliver or otherwise make available to the City all data, drawings, specifications, reports, estimates, summaries and such other information and material as may have been accumulated by the Consultant in performing the Work whether completed or in process; e. Settle outstanding liabilities and claims, subject to the approval of City;
f. Complete performance of such part of the Work as has not been terminated;
g. Take such other actions as may be necessary, or as may be directed by the City for the protection and preservation of the Work and/or property related to the Work;
h. If City so requests, and at City's cost, Consultant shall provide sufficient oral or written status reports to make City reasonably aware of the status of Consultant's work on the project. i. The Consultant understands and agrees that City may, in City's sole discretion, refuse to pay Consultant for that portion of Consultant's services which were performed by Consultant on the project prior to the termination date and which remain
unacceptable and/or not useful to City as of the termination date. #8..
- 209 -
53 City will pay Consultant an amount based on the percentage of satisfactory work completed in accordance with the notice of termination. If the Agreement is terminated pursuant to the subparagraph entitled Termination by City for Default of Consultant, Consultant understands and agrees that City may, in City's sole discretion, refuse to pay Consultant for that portion of Consultant's services which were performed by Consultant on the project prior to the termination date and which remain unacceptable and/or not useful to City as of the termination date. The final payment to the Consultant after termination for convenience shall be limited to amounts due and owing under the Agreement at time of termination, including the following:
a. The cost of settling and paying valid claims arising out of the termination of the Work such as subconsultant agreements or contracts for materials;
b. The Agreement price allocable to the portion of the Work properly performed or goods supplied to the work site by the Consultant as of the date of termination, as determined in accordance with the notice of termination, reduced by any sums previously paid to the Consultant.

16. CERTIFIED PAYROLL REQUIREMENT.

For consultants performing field work on public works contracts on which prevailing wages are required: The Consultant shall comply with the provisions of Section 1776 of the California Labor Code, regarding payroll records, and shall require its subconsultants and subcontractors to comply with that section as may be required by law.

17. INDEMNITY.

The Consultant shall hold the City, its agents, officers, employees, and volunteers, harmless from and save, defend and indemnify them against any and all claims, #8..
- 210 -
54 losses, liabilities, judgments or damages from every cause, including but not limited to injury to person or property or wrongful death, including reasonable costs and expenses of defense of any judicial or administrative action, arising directly or indirectly out of any act or omission of Consultant whether or not the act or omission arises from the sole negligence or other liability of City, or its agents, officers, and employees or volunteers relating to or during the performance of its obligations under this agreement.

Consultant's obligation to defend, indemnify, and hold the City, its agents, officers, and employees harmless under the provisions of this paragraph is not limited to or restricted by any requirement in this Agreement for Consultant to procure and maintain a policy of insurance.

18. ENTIRE AGREEMENT.

This Agreement and its exhibits contain the entire understanding between Consultant and City. Additional or new terms contained in this Agreement which vary from Consultant's proposal are controlling and are deemed accepted by Consultant by shipment of any article or other commencement of performance hereunder. All previous proposals, offers and communications relative to this Agreement, whether oral or written, are hereby superseded except to the extent that they have been incorporated into this Agreement. No future waiver of or exception to any of the terms, conditions, and provisions of this Agreement shall be considered valid unless specifically agreed to in writing by all the parties.

19. PARTIAL INVALIDITY.

If any provision in this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions shall nevertheless continue in full force without being impaired or invalidated in any way.

20. WAIVER.
#8..
- 211 -
55 The waiver by any party to this Agreement of a breach of any provision hereof shall be in writing and shall not operate or be construed as a waiver of any other or subsequent breach hereof unless specifically stated in writing.

21. AUDIT.

The City's duly authorized representative shall have access at all reasonable times to all reports, contract records, contract documents, contract files, and personnel necessary to audit and verify Consultant's charges to City under this Agreement.

Consultant agrees to retain reports, records, documents, and files related to charges under this Agreement for a period of four (4) years following the date of final payment for Consultant services. City's representative shall have the right to reproduce any of the aforesaid documents.

22. GOVERNING LAW.

This Agreement shall be governed according to the laws of the State of California.

23. HEADINGS NOT CONTROLLING.

Headings used in the Agreement are for reference purposes only and shall not be considered in construing this Agreement.

24. COMPLIANCE WITH LAWS.

Consultant shall insure compliance with all safety and hourly requirements for employees, in accordance with federal, state, and county safety and health regulations and laws. Consultant shall fully comply with all applicable federal, state, and local laws, ordinances, regulations and permits.

25. CITY BUSINESS LICENSE.

Consultant shall have a City of Modesto business license. #8..
- 212 -
56 IN WITNESS WHEREOF, the City of Modesto, a municipal corporation, has authorized the execution of this Agreement in duplicate by its City Manager and attestation by its City Clerk under authority of Resolution No. 2022- , adopted by the Council of the City of Modesto on the day of , 2022, and CONSULTANT, INC. has caused this agreement to be duly executed in duplicate as of the Effective Date.

CITY OF MODESTO, CONSULTANT, INC.
a municipal corporation a California corporation*
By ___________________________ By________________________________ JOSEPH P. LOPEZ, City Manager Name Title

By ________________________________
Name Title
ATTEST: (Seal)
By ___________________________
DANA SANCHEZ, Interim City Clerk
Consultant’s Federal ID #XX-XXXXXXX
APPROVED AS TO FORM:

By ________________________________
JOSE M. SANCHEZ, City Attorney
APPROVED AS TO FORM:

By ________________________________
CHRISTINA D. ALGER
Director of Human Resources (Risk)
#8..
- 213 -
#8..
- 214 -
#8..
- 215 -
#8..
- 216 -
#8..
- 217 -
#8..
- 218 -
#8..
- 219 -
#8..
- 220 -
#8..
- 221 -
#8..
- 222 -
#8..
- 223 -
#8..
- 224 -
#8..
- 225 -
#8..
- 226 -
#8..
- 227 -
#8..
- 228 -
#8..
- 229 -
#8..
- 230 -
#8..
- 231 -
#8..
- 232 -
#8..
- 233 -
#8..
- 234 -
#8..
- 235 -
#8..
- 236 -
#8..
- 237 -
#8..
- 238 -
#8..
- 239 -
#8..
- 240 -
#8..
- 241 -
#8..
- 242 -
#8..
- 243 -
#8..
- 244 -
#8..
- 245 -
#8..
- 246 -
#8..
- 247 -
#8..
- 248 -
#8..
- 249 -
#8..
- 250 -
#8..
- 251 -
#8..
- 252 -
#8..
- 253 -
#8..
- 254 -
#8..
- 255 -
#8..
- 256 -
#8..
- 257 -
#8..
- 258 -
#8..
- 259 -
#8..
- 260 -
#8..
- 261 -
#8..
- 262 -
#8..
- 263 -
#8..
- 264 -
#8..
- 265 -
#8..
- 266 -
#8..
- 267 -
#8..
- 268 -
#8..
- 269 -
#8..
- 270 -
#8..
- 271 -
#8..
- 272 -
#8..
- 273 -
#8..
- 274 -
#8..
- 275 -
#8..
- 276 -
#8..
- 277 -
City of Modesto
Technical Proposal to RFP Specifications No. 2122-40 External Auditing Services 7 Pricing Schedule

PRICING SCHEDULE
REQUEST FOR PROPOSAL AND SPECIFICATIONS NO. 2122-40

EXTERNAL AUDITING SERVICES
Total All-Inclusive Maximum Price for combined Fiscal Years 2022/23, 2023/24 and 2024/25 shall be used for cost evaluation
Detail Schedule of Professional Fees and Expenses for Fiscal 2022/23 ONLY Item Hourly Rate Total Hours TOTAL
Basic
Financial
Statements
Partners $_Partners______________ 285 $______________________60 $__________________17,100 Specialists $_Manager______________180 $______________________64 $__________________11,520 Supervisory $_Supervisor____________160 $_____________________111 $__________________17,760 Staff $_Senior________________120 $_____________________226 $__________________27,120 Out-ofPocket
(Misc.)
$_Staff_________________100 $_____________________415 $__________________41,500 TOTAL Fiscal Year 2022/23: $_________________115,000
Detail Schedule of Professional Fees and Expenses for Fiscal 2022/23 ONLY Item Hourly Rate Total Hours TOTAL
Single Audit and
Management Letter
Partners $_Partners______________285 $______________________4 $___________________1,140 Specialists $_Manager_____________180 $______________________8 $___________________1,440 Supervisory $_Supervisor___________160 $_____________________16 $___________________2,560 Staff $_Senior_______________120 $_____________________58 $___________________6,960 Out-of-Pocket (Misc.) $_Staff________________100 $_____________________79 $___________________7,900 TOTAL Fiscal Year 2022/23: $__________________20,000_
Item Report Description
Fiscal Year
2022/23
Fiscal Year
2023/24
Fiscal Year
2024/25
City ACFR $ 71,000 $ 72,420 73,868$
Toulumne River Regional Park (TRRP) 5,000 5,100 5,202
Local Transportation Fund - TDA 5,000 5,100 5,202
Community Facilities Districts (12) 18,000 18,360 18,727 Ceres-Modesto Industrial Fire Protection JPA 5,000 5,100 5,202 Measure L 5,000 5,100 5,202
Abandoned Vehicle Abatement (AVA) 2,000 2,040 2,081
State Controller's Report - City Only 2,500 2,550 2,601 Review of Popular Annual Financial Report (PAFR) 1,500 1,530 1,561 Sub Total $ 115,000 $ 117,300 $ 119,646
Single Audit and Management Letter $ 20,000 $ 20,400 20,808$ TOTAL $ 135,000 $ 137,700 $ 140,454
Total All-Inclusive Maximum Price
Basic Financial
Statements
(Audits and
Reports)
Single Audit
and
Management
Letter
#8..
- 278 -
City of Modesto
Technical Proposal to RFP Specifications No. 2122-40 External Auditing Services 8 #8..
- 279 -
#8..
- 280 -
#8..
- 281 -

CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

October 25, 2022
Date: September 27, 2022
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: DeAnna Christensen, Director of Finance
William Wong, Director of Utilities
SUBJECT: Sole Source Purchase Agreement for Weed Abatement Chemical Premix CONTACT: Cynthia Kline, Purchasing Manager, [email protected], 209-577-5412 DESCRIPTION:

Consider approving an Agreement with Nutrien Ag Solutions, Sacramento, CA, for Weed Abatement Chemical Premix known as (Aqumix Proprietary Custom Pre-blend) for a total amount not to exceed $350,000 over five years. (Funding Source: Wastewater and Water Fund) STRATEGIC PLAN ELEMENT:

This item supports the City of Modesto 2020-2025 Strategic Plan Focus of Governance and Service Delivery under goal H: Achieve Financial Sustainability.

BACKGROUND:

The City of Modesto, Utilities Department has maintained over seven miles of State of California levee adjacent to the 3,000-acre ranch at the Jennings Facility for more than fifty-three (53) years. Every six-months, the levee is inspected by the Department of Water Resources to ensure the levee continues to meet the requirements of the Army Corps of Engineers. The City is required to maintain this portion of the levee system in a bare ground condition to allow thorough inspections, to help with rodent control, maintain a weed free area around the water collection areas and to lessen mosquito habitat.

DISCUSSION:

Over the years the Utilities Department, Wastewater Division has tried different chemicals which allow for safe mixing, application processes and lowering labor costs. With the weed abatement product purchased through Nutrien Ag Solutions, we’ve reduced the number of required treatments and increased the cost effectiveness of a single mixture, which can accomplish both post and pre-emergent weed control in one application.

This mixture of pesticides, which includes broad spectrum weed killers, surfactant, pre and post emergent and a proprietary suspension allowing the use of non-agitated tanks has proven to be the most efficient and cost effective. Nutrien has returnable containers designed for a closed #9..
- 282 -
Council Meeting, October 25, 2022
Sole Source Purchase Agreement for Weed Abatement Chemical Premix