Attachment F: Air Disinfection Systems
City of Montebello
City of Montebello – Air Disinfection Systems Inventory
Product: WellAir Protect 900
Quantity: 288 Units
Location: Various facilities throughout the city
Equipment Details: See specification sheet attached below
MODEL
WellAir Protect 900
Wall mountable, countertop or
stand-alone unit supplied with
6.6 ft power cord
ELECTRICAL RATING
Single Phase, 100 - 120 VAC,
60 Hz
Fuse Rated at 120 VAC, 3
Amps, Listed
POWER CONSUMPTION
Maximum 14W
CONSTRUCTION + COLOR
Precision-cut fabricated metal
casing in a silver anti-bacterial
powder coat finish
DIMENSIONS + WEIGHT
14.4" (h) × 14.4" (w) × 4.5" (d)
(36.6 × 36.6 × 11.4 cm)
Approx. 10.4 lbs (4.7 kg)
ELECTRICAL CONNECTION
Switched and fused with a
grounded, molded power cord
FAN AIR FLOW VOLUME
Speed I = 129 CFM
Speed II = 153 CFM
NOISE LEVEL
Speed I = 40 dB
Speed II = 45 dB
OPERATING CONDITIONS
50 – 9 5 °F (10 – 35 °C)
10-75% Relative Humidity
SHIPPING / STORAGE
CONDITIONS
41 – 122 °F (5 – 50 ° C)
Maximum 95% Relative
Humidity
QUALITY & SAFETY
Manufactured under ISO 9001,
ISO 14001 & OHSAS 18001
UL867 - Safety for Electrostatic
Air Cleaners
cUL
IEC 60601-1
IEC 60601-1-2
TM
Protected by
WA-POR-US-SP-002-Protect-900
©2021 WellAir
TM
Protect 900 with Stand
The WellAir Protect 900 is a medical-grade, airborne infection control device that inactivates aerosolized viruses, bacteria, mold spores and pollen within the breathing zone. Easy to use, flexible in positioning, and quiet in operation, the portable device provides the safest and most cost-effective airborne pathogen protection in a continuous manner to people in small-to-medium sized rooms or within the occupied spaces of larger rooms. The device uses two NanoStrike™ c oils with a dual-speed fan. It can be deployed using one of our specially designed stands.
Visit www.iaqdistribution.com for more information
Protect 900
Learn more at iaqdistribution.com
10year useful Life / 3 year warrantyNo filter change outs, internal components replacements, or
ongoing maintenance needed.
Zero cost of ownership
Leveraging Patented NanoStrike
Technology proven to inactivate
pathogens at the DNA level
14w low energy consumption Wall mount / table stand /
portable stand
No functional degradation over time
Under 40dB of sound output
Technology backed by manufacturer
medical advisory board
Over 70+ 3rd party studies
showing efficacy in destroying
pathogens in sub seconds
CARB certified
The Wellair 900 Difference
Attachment G: Miscellaneous Improvements
City of Montebello
City of Montebello – Bathroom Improvements
Miscellaneous improvements will be made to the men’s and women's restrooms that are next to the city manager’s office at the City Hall building. The improvements will upgrade and modernize the restrooms.
Energy Efficiency and Renewable Energy Project
Attachment H: Renewable Energy Systems
P a g e | 1
Attachment H: Renewable Energy Systems
City of Montebello
Energy Efficiency and Renewable Energy Project
Attachment H: Renewable Energy Systems
P a g e | 2
System Design
Location: Aquatic Center
Address: 1300 W Olympic Blvd, Montebello, CA 90640
Power Rating: 125.4 kW-DC
Estimated Annual Production: 202,457 kWh
Energy Efficiency and Renewable Energy Project
Attachment H: Renewable Energy Systems
P a g e | 3
Location: City Hall
Address: 1600 W Beverly Blvd, Montebello, CA 90640
Power Rating: 521.5 kW-DC (Carport only in the layout below) Estimated Annual Production: 806,208 kWh
Energy Efficiency and Renewable Energy Project
Attachment H: Renewable Energy Systems
P a g e | 4
Location: City Hall
Address: 1600 W Beverly Blvd, Montebello, CA 90640
Power Rating: 262.6 kW-DC (Rooftop only in the layout below) Estimated Annual Production: 426,033 kWh
Energy Efficiency and Renewable Energy Project
Attachment H: Renewable Energy Systems
P a g e | 5
Location: Montebello Golf Course
Address: 901 Via San Clemente, Montebello, CA 90640
Power Rating: 380.4 kW-DC
Estimated Annual Production: 647,821 kWh
Energy Efficiency and Renewable Energy Project
Attachment H: Renewable Energy Systems
P a g e | 6
Location: Montebello Golf Course
Address: 901 Via San Clemente, Montebello, CA 90640
Power Rating: 597.5 kW-DC
Estimated Annual Production: 998,505 kWh
Energy Efficiency and Renewable Energy Project
Attachment H: Renewable Energy Systems
P a g e | 7
Location: Transportation Facility
Address: 400 S Taylor Ave, Montebello, CA 90640
Power Rating: 447.9 kW-DC
Estimated Annual Production: 719,790 kWh
Energy Efficiency and Renewable Energy Project
Attachment H: Renewable Energy Systems
P a g e | 8
Location: Transportation Facility
Address: 400 S Taylor Ave, Montebello, CA 90640
Power Rating: 212.8 kW-DC
Estimated Annual Production: 352,864 kWh
Energy Efficiency and Renewable Energy Project
Attachment H: Renewable Energy Systems
P a g e | 9
Location: Youth Center
Address: 236 S Taylor Ave, Montebello, CA 90640
Power Rating: 112.1 kW-DC
Estimated Annual Production: 161,152 kWh
Energy Efficiency and Renewable Energy Project
Attachment H: Renewable Energy Systems
P a g e | 10
Assumptions:
1. All technology & equipment specified/used in this project will meet or exceed all currently applicable & proposed safety, environmental and interconnection standards, as well as all fire safety requirements.
2. All PV system equipment & components will be UL certified.
3. ABS will obtain permits (without any building and safety or planning fees from the City of Montebello) & utility approvals necessary to install the PV System.
4. Assumes all carport foundation drilling in clean dirt. All rock drilling to be at additional costs.
5. Interconnection work/outages will be scheduled during normal business hours.
6. Building department and utility inspections will be scheduled during normal bu siness hours.
7. Pricing assumes that ABS’s employees will have free and clear access to all array locations simultaneously during business hours (M-F 0700-1700).
8. ABS will provide electrical drawings stamped by a licensed California Registered Electrical Professional Engineer.
9. The planned AC electrical tie-in will not require component upgrades or improvements.
10. The System & installation will meet all requirements for interconnection with appropriate documentation. ABS will be responsible for providing all documentation.
11. System layout is acceptable to AHJ in terms of clearances.
12. Single mobilization and completion of project in one phase.
13. As built plans are available for engineering reference.
14. 7.49° tilt maximum on carports.
15. 10’ clear height maximum on carports with the exception of the carport at the bus parking lot that will have a 14’ clear height.
16. ABS is not responsible for superficial marking of parking area due to use of equipment.
17. On-site staging areas are available for storage of equipment and materials.
18. No special safety requirements beyond ABS’s standard safety regulations will be enforced.
19. Pricing includes NEMA 3R painted steel electrical equipment
20. Module pricing is based on current market value. Price is subject to adjustment based on market conditions at time of construction.
21. Steel pricing is based on current market value. Price is subject to adjustment based on market conditions at time of construction.
22. Ground penetrating radar (GPR) is accurate down to a depth of 3’ -4’. There may be underground utilities below this level that are untraceable with GPR that would require the use of an underground camera to be located at additional cost.
23. Pricing assumes the structure can support the additional loads of the PV array system as well as the erection equipment.
24. Pricing is based on prevailing wage rates.
Energy Efficiency and Renewable Energy Project
Attachment H: Renewable Energy Systems
P a g e | 11
Exclusions:
1. UL recertification of existing electrical equipment beyond our scope of work
2. Repairs of any electrical code violations at the existing facility
3. Removal and/or disposal of hazardous materials
4. Arc flash or breaker coordination studies
5. 3rd party (private) locating services
6. Pedestrian & vehicle traffic control
7. Re-creation of building plan sets
8. Union project labor agreements
9. Lightening protection systems
10. Revenue grade metering
11. ADA design/compliance
12. Sprinklers & gutters
13. Inverter enclosures
14. Phasing
15. Electrical infrastructure upgrades
Underground Exclusions:
Surfaces upon which carports are to be installed, must permit the movement and weight of the drilling or lifting equipment. ABS shall not be responsible for any damages to the surfaces due to the use of the movement, drilling, or lifting equipment. The Purchaser expressly warrants that the asphalt, concrete, or other surface of the access route and / or the area in which the Purchaser has carefully examined the work site, have been carefully examined and approved for the work contemplated and the layout of the carport. The Purchaser also approves of jackhammering and drilling of caisson type footings as part of the work contemplated.
Two (2) foot tolerance must exist in any direction where footing holes are being drilled. If two (2) foot tolerance is not feasible, ABS must be notified immediately. If the carports cannot be moved to accommodate the two -foot tolerance, the footing holes must be hand dug and the Purchaser will bear the additional expense. If it is necessary to step the carport structure down due to change in grade not previously agreed by ABS and the Purchaser, the Purchaser is responsible for any extra material and labo r expense. Installation shall not commence until a contract change order is signed by all parties involved.
The Purchaser is responsible for any investigations of sub-surface conditions in areas where work is to be performed to determine the location of u nderground objects including, but not limited to: pipelines, sewers, telephone lines, gas lines, electrical lines, conduit, sprinklers, etc. Footing holes must be hand dug if the underground objects are located within two feet of any footing hole. Instal lation shall not commence until a contract change order is signed by all parties involved. If the Purchaser fails to determine the location of the underground objects or fails to
Energy Efficiency and Renewable Energy Project
Attachment H: Renewable Energy Systems
P a g e | 12
inform ABS of the location of the underground objects, then the Purchaser is liable for any damage done to any of the underground objects.
The Purchaser indemnifies ABS and its installers from any loss, claim, and expense that ABS and its installers or subcontractors might incur as a consequence of damage done to underground objects described above.
Should site and soil or concealed conditions below the surface of the ground encountered in the performance of the work vary from those indicated by the Purchaser or should unknown physical conditions below the surface of the ground di ffer from those ordinarily encountered, an adjustment to the contract price will be agreed upon and a contract change order issued, and work will cease until the contract change order is signed by all parties involved.
The Purchaser is responsible for keeping the area where the carports are to be erected, free and clear of any / all obstructions at all times during the installation. If ABS and / or its installers / subcontractors are forced to pull off the job site for any reason beyond the installers control, the Purchaser is responsible for the security of the materials while the installer is gone. If materials are missing upon the installers return to the work site, the Purchaser will bear the expense of replacement.
ABS will remove its spoils to a jobsi te location as directed by the project manager. ABS will not be responsible for labor or cost to remove spoils from off the jobsite.
Technical Data
50/60kW, 1000Vdc String Inverters for North America
The 50 & 60kW (55 & 66kVA) medium power CPS three phase string inverters are designed for ground mount, large rooftop and carport applications. The units are high performance, advanced and reliable inverters designed specifically for the North American environment and grid. High efficiency at 98.8% peak and 98.5% CEC, wide operating voltages, broad temperature ranges and a NEMA Type 4X enclosure enable this inverter platform to operate at high performance across many applications. The CPS 50/60KTL products ship with either the Standard wire- box or the Rapid Shutdown wire-box, each fully integrated and separable with touch safe fusing, monitoring, and AC and DC disconnect switches. The integrated PLC transmitter in the Rapid Shutdown wire-box enables PVRSS certified module-level rapid shutdown when used with the Tigo TS4-F/TS4-A-F/TS4-A-2F products and APS RSD-S-PLC/RSD-D products. The CPS FlexOM Gateway enables monitoring, controls and remote product upgrades.
NEC 2017/2020 PVRSS Certified Rapid Shutdown
55 & 66kVA rating allows max rated Active Power @±0.91PF Selectable Max AC Apparent Power of 50/55kVA and 60/66kVA NEC 2014/17 compliant & UL listed Arc-Fault circuit protection 15-90° Mounting orientation for low profile roof installs Optional FlexOM Gateway enables remote FW upgrades
Integrated AC & DC disconnect switches
3 MPPT's with 5 inputs each for maximum flexibility
NEMA Type 4X outdoor rated, tough tested enclosure
UL1741 SA Certified to CA Rule 21, including SA8 through SA18 Separable wire-box design for fast service
Standard 10 year warranty with extensions to 20 years
Key Features
Datasheet
CPS SCA50KTL-DO/US-480
CPS SCA60KTL-DO/US-480
50/60KTL Standard Wire-box 50/60KTL Rapid Shutdown Wire-box CHINT POWER SYSTEMS AMERICA 2022/1-MKT NA Chint Power Systems America 6800 Koll Center Parkway, Suite 235 Pleasanton, CA 94566 Tel: 855-584-7168 Mail: [email protected] Web: www.chintpowersystems.com
Technical Data
Model Name CPS SCA50KTL-DO/US-480 CPS SCA60KTL-DO/US-480 Max. PV Power
Max. DC Input Voltage
Operating DC Input Voltage Range
Start-up DC Input Voltage / Power
Number of MPP Trackers
MPPT Voltage Range @ PF>0.99 480-850Vdc 540-850Vdc
Max. PV Short-Circuit Current (Isc x 1.25)
Number of DC Inputs
DC Disconnection Type
DC Surge Protection
Rated AC Output Power @ PF>0.99 to ±0.911 50kW 60kW
Max. AC Apparent Power (Selectable) 50/55kVA 60/66kVA
Rated Output Voltage
Output Voltage Range2
Grid Connection Type
Max. AC Output Current @480Vac 60.2/66.2A 72.2/79.4A
Rated Output Frequency
Output Frequency Range2
Power Factor
Current THD @ Rated Load
Max. Fault Current Contribution (1 Cycle RMS)
Max. OCPD Rating 110A 125A
AC Disconnection Type
AC Surge Protection
Topology
Max. Efficiency
CEC Efficiency
Stand-by / Night Consumption
Enclosure Protection Degree
Cooling Method
Operating Temperature Range3
Non-Operating Temperature Range4
Operating Humidity
Operating Altitude
Audible Noise
User Interface and Display
Inverter Monitoring
Site Level Monitoring
Modbus Data Mapping
Remote Diagnostics / FW Upgrade Functions
Dimensions (HxWxD)
Weight
Mounting / Installation Angle5
AC Termination
DC Termination6
Fused String Inputs (5 per MPPT)7
Certifications and Standards
Selectable Grid Standard
Smart-Grid Features
Standard
Extended Terms
1) Active Power Derating begins; at PF=±0.91 to ±0.8 when Max AC Apparent Power is set to 55 or 66kVA. 2) The "Output Voltage Range" and "Output Frequency Range" may differ according to the specific grid standard. 3) Active Power Derating begins; at 40°C when PF=±0.9 and MPPT ≥Vmin, at 45°C when PF=1 and MPPT ≥Vmin, and at 50°C when PF=1 and MPPT V ≥ 700Vdc. 4) See user manual for further requirements regarding non-operating conditions. 5) Shade Cover accessory required for installation angles of 75 degrees or less. 6) RSD wire-box only includes fuses/fuseholders on the positive polarity, compliant with NEC 2017, 690.9 (C). 7) Fuse values above 20A have additional spacing requirements or require the use of the Y-Comb Terminal Block. See user manual for details.
AC Output
DC Input
200-950Vdc
1000Vdc
98.8%
330V / 80W
15 inputs, 5 per MPPT
Load-rated DC switch
Load-break rated AC switch
<3%
>0.99 (±0.8 adjustable)
57 - 63Hz
60Hz
90kW (33kW per MPPT)
3 204A (68A per MPPT)
No low temp minimum to +158°F / +70°C maximum
0 to 100%
13,123.4ft / 4000m (derating from 9842.5ft / 3000m)
CPS FlexOM Gateway (1 per 32 inverters)
Transformerless
NEMA Type 4X
RSD6 and Standard Wire-box: 20A fuses provided (Fuse values up to 30A acceptable) CPS
Standard / (with FlexOM Gateway)
15 and 20 years
Warranty
Volt-RideThru, Freq-RideThru, Ramp-Rate, Specified-PF, Volt-VAr, Freq-Watt, Volt-Watt 10 years
UL1741-SA Ed. 2, UL1699B, CSA-C22.2 NO.107.1-01, IEEE1547a-2014; FCC PART15 IEEE 1547a-2014, CA Rule 21, ISO-NE
39.4 x 23.6 x 10.24in. (1000 x 600 x 260mm)
15 to 90 degrees from horizontal (vertical or angled)
Safety
M8 Stud Type Terminal Block (Wire range: #6 - 3/0AWG CU/AL , Lugs not supplied) Screw Clamp, Neg. Busbar (RSD version6) Wire range: #14 - #6AWG CU Mechanical
Inverter: 123.5lbs/56kg; Wire-box: 33lbs/15kg
Type II MOV, 2800VC, 20kA ITM (8/20µS)
SunSpec, Modbus RS485
Variable speed cooling fans
-22°F to +140°F / - 30°C to +60°C
3Φ / PE / N (Neutral optional)
422 - 528Vac
480Vac
Display and Communication
LCD+LED
<60dBA @ 1m and 25°C
64.1A (1.06/0.88 PU)
Type II MOV, 1240VC, 15kA ITM (8/20µS)
Environment
System and Performance
98.5%
<1W
129172475v1
EQUIPMENT LEASE-PURCHASE AGREEMENT
BETWEEN
ALLIANCE FUNDING SOLUTIONS, INC. , a California corporation, as Lessor AND
CITY OF MONTEBELLO, as Lessee
DATED AS OF
January __, 2023
TABLE OF CONTENTS
Page
129172475v1 -i-
ARTICLE 1 DEFINITIONS ........................................................................................................ 1
1.1 Acceptance Certificate ........................ ................................................................... 1
1.2 Acceptance Date ............................... .................... Error! Bookmark not defined.
1.3 Authorized Representative ..................... ................................................................ 1
1.4 Code .......................................... ............................................................................. 1
1.5 Governing Body ................................ .................... Error! Bookmark not defined.
1.6 Concluding Payment ............................ ................. Error! Bookmark not defined.
1.7 Commencement Date ............................. ................................................................ 1
1.8 Costs of the Equipment ........................ .................................................................. 1
1.9 Default Rate .................................. ......................................................................... 1
1.10 Equipment .................................... .......................................................................... 2
1.11 Escrow Fund .................................. ........................................................................ 2
1.12 Fiscal Year .................................. ........................................................................... 2
1.13 Lease Term.................................... ......................................................................... 2 ARTICLE 2 LEASE ..................................................................................................................... 2 ARTICLE 3 LEASE TERM ......................................................................................................... 3 ARTICLE 4 RENTAL PAYMENTS ........................................................................................... 3
4.1 Amount and Times of Payment ................... .......................................................... 3
4.2 Place of Payments ............................. ..................................................................... 3
4.3 Late Charges .................................. ........................................................................ 3
4.4 Abatement of Rental Payments .................. ............................................................ 3
4.5 Allocation of Interest ........................ ..................................................................... 4
4.6 Rental Adjustment ............................. .................................................................... 4
4.7 Covenant to Budget and Appropriate ............ ........................................................ 4
4.8 Unconditional Current Obligation .............. ........................................................... 4 ARTICLE 5 ESCROW FUND ..................................................................................................... 5
5.1 Escrow Fund ................................... ....................................................................... 5
5.2 Intentionally Omitted ......................... ................... Error! Bookmark not defined.
5.3 Termination ................................... ........................ Error! Bookmark not defined.
ARTICLE 6 RESPONSIBILITIES OF LESSEE ......................................................................... 5
6.1 Care and Use .................................. ........................................................................ 5
6.2 Inspection .................................... ........................................................................... 5
6.3 Utilities ..................................... .............................................................................. 5
6.4 Taxes ......................................... ............................................................................. 6
6.5 Alterations ................................... ........................................................................... 6
6.6 Transportation and Installation Charges ....... ......................................................... 6
6.7 Insurance ..................................... ........................................................................... 6
6.8 Risk of Loss .................................. ......................................................................... 7
6.9 Performance by the Lessor of the Lessee’s Respo nsibilities ................................. 8
TABLE OF CONTENTS
(continued)
Page
129172475v1 -ii-
6.10 Financial Statements ......................... ..................................................................... 8 ARTICLE 7 EQUIPMENT .......................................................................................................... 8
7.1 Title ......................................... ............................................................................... 8
7.2 Security Agreement ............................ ................................................................... 8
7.3 Personal Property ............................. ...................................................................... 9
7.4 Liens ......................................... ............................................................................ 10
7.5 Inspection .................................... ......................................................................... 10
7.6 Use of Equipment; Maintenance and Repairs ..... ................................................. 10
7.7 Essentiality .................................. ......................................................................... 10
7.8 Sublease ...................................... ......................................................................... 11 ARTICLE 8 WARRANTIES AND REPRESENTATIONS OF THE LESSEE ....................... 11 ARTICLE 9 WARRANTIES AND REPRESENTATIONS OF THE LESSOR ...................... 13 ARTICLE 10 INTENTIONALLY OMITTED ....... ERROR! BOOKMARK NOT DEFINED.
ARTICLE 11 TAX COVENANTS AND INDEMNIFICATION ............................................. 14
11.1 Covenants .................................... ......................................................................... 14
11.2 Further Covenants ............................ .................................................................... 15
11.3 Indemnification .............................. ...................................................................... 15 ARTICLE 12 GENERAL INDEMNIFICATION ...................................................................... 15 ARTICLE 13 INTENTIONALLY OMITTED .......................................................................... 16 ARTICLE 14 DEFAULT AND REMEDIES ............................................................................ 16
14.1 Definition of Default ........................ .................................................................... 16
14.2 Remedies on Default .......................... .................................................................. 16
14.3 Further Remedies ............................. .................................................................... 17
14.4 Reinstatement ................................ ....................................................................... 17 ARTICLE 15 INTENTIONALLY OMITTED. ......................................................................... 18 ARTICLE 16 ASSIGNMENT.................................................................................................... 18
16.1 Assignment By Lessee ......................... ................................................................ 18
16.2 Assignment By The Lessor ..................... ............................................................. 18
16.3 Escrow Assignment By the Lessor .............. ......... Error! Bookmark not defined.
ARTICLE 17 NATURE OF AGREEMENT ............................................................................. 19 ARTICLE 18 OPTION TO PURCHASE .................................................................................. 19 ARTICLE 19 MISCELLANEOUS ............................................................................................ 20
19.1 Waiver ....................................... ........................................................................... 20
TABLE OF CONTENTS
(continued)
Page
129172475v1 -iii-
19.2 Severability ................................. ......................................................................... 20
19.3 Governing Law ................................ .................................................................... 20
19.4 Notice ....................................... ............................................................................ 20
19.5 Section Headings ............................. .................................................................... 20
19.6 Entire Agreement ............................. .................................................................... 20
19.7 Binding Effect ............................... ....................................................................... 21
19.8 Time ......................................... ............................................................................ 21
19.9 Counterparts ................................. ........................................................................ 21
19.10 No Third-Party Beneficiaries ................ ............................................................... 21
19.11 Exhibits .................................... ............................................................................ 21
Lease Documents:
Equipment Lease-Purchase Agreement;
Exhibit A – Description of Equipment;
Exhibit B - Equipment Schedule, including Schedule 1 (Rental Payment Schedule); Exhibit C – Notice and Acknowledgment of Assignment;
Exhibit D – Insurance Certification;
Exhibit E – Essential Use Certificate;
Exhibit F – Incumbency and Closing Certificate;
Exhibit G – Opinion of Lessee’s Counsel;
Exhibit H – Tax Opinion of Lessee’s Counsel;
Exhibit I – INTENTIONALLY OMITTED;
Exhibit J – Post Issuance Tax Compliance Procedures;
Exhibit K – Escrow Agreement, including Schedule A (Notice and Acknowledgment of Assignment of Escrow Agreement;
Exhibit L – City Council Meeting Resolution from Meeting Held on August 24, 2022; affidavit of publication for notice of public hearing
Exhibit M – IRS Form 8038-G; and
Exhibit N – Closing Memorandum/Payment Proceeds Direction.
Other Documents:
Installation Agreement
UCC-1 Financing Statement
CDIAC Filings
Lessee’s Form W-9
Insurance Certificates
Payment and Performance Bonds, with Dual Obligee Rider naming Lessor and its successors and assigns as additional insured
129172475v1
EQUIPMENT LEASE-PURCHASE AGREEMENT
THIS EQUIPMENT LEASE-PURCHASE AGREEMENT (as amended or supplemented from time to time, this “ Lease Agreement ”) dated as of January __, 2023, between ALLIANCE FUNDING SOLUTIONS, INC., a California corporation ( together with its successors and/or assigns, the “ Lessor ”), whose mailing address is 12520 High Bluff Drive , Suite 345, San Diego, California 92130, and the CITY OF MONTEBELLO, a pol itical subdivision of the State of California (the “ Lessee ”), whose mailing address is 1600 W Beverly Bouleva rd, Montebello, California 90640.
WITNESSETH:
WHEREAS, the Lessor has agreed to purchase and leas e the Equipment (as hereinafter defined) to the Lessee, and the Lessee has agreed to lease back and purchase the Equipment from the Lessor, pursuant to the terms and conditions hereinafter set forth; NOW, THEREFORE, for and in consideration of the pre mises and of the covenants hereinafter contained, and other good and valuable considerations, the mutual parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Lease Agreement and any related documents, the following definitions will apply:
1.1 Acceptance Certificate and Payment Request. A certificate in the form attached as Exhibit A to the Escrow Agreement attached hereto a s Exhibit K by which the Lessee accepts delivery of all or a portion of the Equipment and r equests payment from the Escrow Fund in payment thereof.
1.2 Authorized Representative. Shall mean, with respec t to the Lessee, the Chairman (or similar designation) of the Governing Body or other person or officer approved by the Lessee in writing.
1.3 Code. Shall mean the Internal Revenue Code of 1986, as amended.
1.4 Commencement Date. Shall have the meaning set forth on Exhibit B.
1.5 Concluding Payment. Shall have the meaning set forth in Article 18.
1.6 Costs of the Equipment. $26,270,796, which is the total cost of acquisition and installation of the Equipment, including costs of i ssuance in connection with the execution and delivery of this Lease Agreement.
1.7 Default Rate. Shall have the meaning set forth in Section 4.3.
2 129172475v1
1.8 Equipment. The personal property described in Exhibit A to this Lease Agreement that is now or may hereafter from time to time become attached hereto and incorporated herein by reference, together and with any and all additions, modifications, attachments, substitutions, repairs, accessories, replacements and parts thereof and all insurance and/or proceeds therefrom.
1.9 Escrow Fund. The fund created under the Escrow Agr eement, as provided in Article 5 hereof.
1.10 Fiscal Year. Shall mean July 1 through June 30 of each year.
1.11 Governing Body. Shall mean the City Council of Lessee.
1.12 Lease Term. The period of time described in Article 3 of this Lease Agreement.
1.13. Rental Payments. The basic rental payments p ayable by the Lessee pursuant to Article 4 of this Lease Agreement.
1.14. State. Shall mean the State of California.
ARTICLE 2
LEASE
The Lessor hereby demises, lets and leases to the L essee, and the Lessee hereby rents, leases and hires from the Lessor, the Equipment lis ted on Exhibit A attached hereto and incorporated herein by reference. The Lessee shall be entitled to possession of each piece of the Equipment and may retain possession of the Equipmen t so long as the Lessee is not in default under this Lease Agreement. THIS LEASE IS NOT A PL EDGE OF THE FULL FAITH AND
CREDIT OF THE LESSEE, AND DOES NOT CREATE ANY OBLIG ATION ON THE PART OF THE LESSEE EXCEPT AS SPECIFICALLY STATED HEREIN. The Lessee’s obligation to pay all Rental Payments payable hereunder and the L essee’s obligations otherwise to perform its obligations under or with respect to this Lease Agr eement and the other Lease Documents, (1) constitutes a current obligation payable exclusivel y from legally available funds and shall not be construed to be an indebtedness within the meaning of any applicable constitutional or statutory limitation or requirement, and (2) are and shall be absolute and unconditional and shall not be affected by any circumstances whatsoever, including (i) any right of setoff, counterclaim, recoupment, deduction, abatement, defense or other right which the Lessee may have against the Lessor, the manufacturer or vendor of the Equipment , or any other Person, for any reason whatsoever, including, those arising or allegedly a rising out of claims (present or future, alleged or actual, and including claims arising out of stri ct liability in tort or negligence of the Lessor) o f the Lessee against the Lessor under this Lease Agreement or otherwise, (ii) any defect in the title, condition, design, operation, or fitness for use of, or any damage to or loss or destruction of all or any portion of, the Equipment, or any interruption or cessation in the use or possession thereof by the Lessee or any other Person for any reason whats oever, (iii) the existence of any collateral, guaranty or security interest, (iv) any insolvency, bankruptcy, reorganization or similar proceedings by or against Lessee, (v) any force majeure, or (vii) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. It is the intention of the parties that all Rental Payments and other amounts due hereunder shall continue to be payable in all events
3 129172475v1
in the manner and at the times set forth herein unl ess the obligation to do so shall have been terminated pursuant to the express terms hereof.
ARTICLE 3
LEASE TERM
The Lease Term shall commence on the Commencement Date and shall terminate, except as otherwise expressly provided herein, upon the first to occur of: (a) the exercise by Lessee of the option to purchase the Equipment pursuant to Articl e 18 hereof and payment of the Concluding Payment and all amounts payable in connection there with; (b) a default by the Lessee and the Lessor’s election to terminate this Lease Agreement pursuant to Articles 14; (c) ; or (d) the payment by the Lessee of all Rental Payments author ized or required to be paid by the Lessee hereunder during the Lease Term.
ARTICLE 4
RENTAL PAYMENTS
4.1 Amount and Times of Payment. The Lessee hereby agrees to pay rental payments hereunder in the amounts and on the dates identified in Exhibit B. A portion of each rental payment is paid as, and represents payment of, interest, an d the balance of each rental payment is paid as, and represents payment of, principal.
4.2 Rental Payments. All rental payments required to be made to the Lessor hereunder shall be made by wire or other form of electronic payment in accordance with written instructions provided by Lessor or, with Lessor’s consent, by su ch other commercially reasonable method of payment. The Lessee shall pay the rental payments in lawful money of the United States of America from monies legally available therefor.
4.3 Late Charges. Whenever any rental payment or other amount payable to Lessor by Lessee hereunder is not paid within ten (10) busine ss days after such due date, Lessee agrees to pay Lessor a late charge on the delinquent amount a t the “ Default Rate ,” which is one percent (1%) per month, or the maximum amount permitted under applicable law, whichever is less.
4.4 Abatement of Rental Payments. If there is substant ial interference with or loss of Lessee’s beneficial use or operation of the Equipment subject to this Lease Agreement (a “ Loss of Use or Occupancy ”), rental payments due hereunder and other amounts shall be subject to abatement during any period in which there is a Loss of Use or Occupancy in the same proportion that the portion of the Equipment unavailable for Lessee’s beneficial use and operation bears to all of the Equipment subject to this Lease Agreement; provided, however, that during such abatement, special sources of legally available and/or properl y appropriated funds may and the proceeds of funds derived from rental abatement insurance, shal l be applied to pay the rental payments in accordance with the terms of this Lease, including, without limitation, Section 6.7 hereof. For each potential Loss of Use or Occupancy, decisions on (1) whether or not abatement shall apply; (2) the date upon which abatement shall commence; (3) the applicable portion of rental payments to be abated; and (4) the concluding date of the pa rticular abatement, shall all be subject to
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determinations by Lessee and Lessor in concert with the provider of the insurance issued pursuant to Section 6.7 hereof. To the fullest extent permitted by applicable law, Lessee hereby waives the benefits of any and all rights to terminate this Le ase Agreement (including California Civil Code Sections 1932 and 1933) by virtue of any such inter ference, and this Lease Agreement shall continue in full force and effect. Lessee shall no tify Lessor in writing of any threat to its use or operation of the Equipment that will or may trigger an abatement hereunder within fifteen (15) days after it has knowledge of such threat. The obligation to make full rental payments with respect to the Equipment under this Lease Agreement shall recommence as of the date Lessee has regained beneficial use and operation of such Equipment, and the provisions of this Lease Agreement, including, but not limited to, dates on which rental payments are due, shall be extended for a period equal to the period the obligation to make rental payments was abated; provided, however, that the Lease Term shall not be extended for any period in excess of the greater of the estimated or actual useful life of the Equipment. Following an extension of the Lease Term pursuant to the provisions of this Section 4.4, the Rental Payment Schedule attached hereto as Schedule 1 to Exhibit B shall be deemed to be modified to reflect such extension.
4.5 Allocation of Interest. A portion of each rental p ayment shall be allocated to interest, with the imputed interest based on a 360-day year consisting of twelve 30-day months.
4.6 Intentionally Omitted.
4.7 Covenant to Budget and Appropriate. Lessee covenants to take such action as may be necessary to include all rental payments due under this Lease Agreement in each of its budgets during the Lease Term and to make the necessary ann ual appropriations for all such rental payments. The covenants on the part of Lessee in this Section 4.7 shall be deemed to be and shall be construed to be a duty imposed by applicable law and it shall be the duty of each and every public official of Lessee to take such action and d o such things as are required by applicable law in the performance of the official duty of such officials to enable Lessee to carry out and perform the covenants and agreements in this Lease Agreement and agreed to be carried out and performed by Lessee.
4.8 Unconditional Current Obligation. Except as expres sly set forth in this Lease Agreement (including this Article 4), Lessee agrees that as of the Commencement Date, Lessee’s obligations under this Lease Agreement are absolute and unconditional and shall continue without set-off, deduction, counterclaim, abatement, recoup ment, or reduction and regardless of any disability of Lessee to use the Equipment or any part thereof because of any reason including, but not limited to, war, act of God, governmental regul ations, strike, loss, damage, destruction, obsolescence, failure of or delay in delivery or fa ilure of the Equipment to operate properly.
Lessee’s obligation to pay rental payments and any additional amounts payable hereunder constitutes a current obligation payable exclusivel y from legally available funds and shall not be construed to be an indebtedness within the meaning of any applicable constitutional or statutory limitation or requirement.
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ARTICLE 5
ESCROW FUND
5.1 Escrow Fund. On the Commencement Date, Lessor and Lessee shall enter into an escrow agreement in form and substance attached hereto as Exhibit K (the “ Escrow Agreement ”) dated the Commencement Date, by and among Lessor, L essee, and the escrow agent named therein, relating to the non-interest bearing escrow fund (an “ Escrow Fund ”) created thereunder.
On the Commencement Date, Lessor shall deposit $19, 295,796.00 (the “ Escrowed Funds ”) into the Escrow Fund to be held in escrow and applied up on the express terms and conditions of the Escrow Agreement for the acquisition of the Equipment and payment of costs of issuance relating to the execution and delivery of this Lease Agreement, which shall be disbursed as provided for in the Closing Memorandum attached hereto and the Escrow Agreement.
ARTICLE 6
RESPONSIBILITIES OF LESSEE
6.1 Care and Use. The Lessee shall use the Equipment in a careful and proper manner, in compliance with all applicable laws and regulati ons, and at its sole cost and expense, service, repair and maintain the Equipment so as to keep the Equipment in good condition, repair, appearance and working order for the purposes inten ded, ordinary wear and tear excepted, and shall replace any part of the Equipment as may from time to time become worn out, lost, stolen, destroyed or damaged or is unfit for use. Any and all additions to or replacements of the Equipment and all parts thereof shall constitute accessions t o the Equipment and shall be subject to all the terms and conditions of this Lease Agreement and in cluded in the term “ Equipment ” as used in this Lease Agreement. If requested by the Lessor, the Lessee shall enter into or cause to be entered into, and maintained in full force and effect durin g the term of this Lease Agreement, standard maintenance contracts satisfactory to the Lessor covering the Equipment and shall comply with all its obligations thereunder. The Lessee shall furni sh evidence to the Lessor of such signed maintenance agreement at or prior to the date of th is Lease Agreement and the payment of all charges and premiums therefor. With Lessor’s prior written consent, Lessee may undertake maintenance of the Equipment by its employees in li eu of such a maintenance agreement.
Substitute maintenance may be used if first approve d by the Lessor in writing. Upon the early termination of this Lease Agreement pursuant to Art icle 14 and 15, the Lessee shall permit the Lessor to remove the Equipment from the premises in the same condition as originally received, ordinary wear and tear excepted, and in such a condition which will permit the Lessor to be eligible for such standard maintenance contract without incurring any expense to repair or rehabilitate the Equipment.
6.2 Inspection. The Lessor shall have the right upon r easonable prior notice to the Lessee to enter into and upon the premises where th e Equipment is located to inspect the Equipment and observe its use during normal business hours.
6.3 Utilities. The Lessee shall pay all charges for ga s, water, steam, electricity, light, heat or power, telephone or other utility service, if any, furnished to or used in connection with the
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Equipment during the term of this Lease Agreement. There shall be no abatement of rental payments on account of interruption of any such services.
6.4 Taxes. The Lessee agrees to pay when due any and a ll taxes relating to the Equipment and the Lessee’s obligations hereunder, i ncluding but not limited to, all license or registration fees, gross receipts tax, sales and us e tax, if applicable, license fees, documentary stamp taxes, rental taxes, assessments, charges, ad valorem taxes, excise taxes, and all other taxes, licenses and charges imposed on the ownership, poss ession or use of the Equipment by any governmental body or agency, together with any inte rest and penalties, other than taxes on or measured by the net income of the Lessor.
6.5 Alterations. Without the prior written consent of the Lessor, which consent shall not be unreasonably withheld, the Lessee shall not make any alterations, modifications or attachments to the Equipment which cannot be remove d without materially damaging the functional capabilities or economic value of the Equipment. Upon return of the Equipment and at the Lessor’s request, the Lessee at its sole cost and expense, will remove all alterations, additions and attachments and repair the Equipment as necessa ry to return the Equipment to the condition in which it was furnished, ordinary wear and tear excepted.
6.6 Transportation and Installation Charges. The Lesse e shall be responsible for all charges relating to the transportation of the Equipment to the Lessee’s location and the installation at such location.
6.7 Insurance.
(a) The Lessee shall continuously maintain at its s ole cost and expense or cause to be maintained (i) public liability insurance for death or injuries to persons, or damage to property arising out of or in any way related to the Equipme nt sufficient to protect Lessor and its assigns from liability in all events, (ii) casualty insuran ce on the Equipment covering such risks as are customarily insured against by reasonable and prude nt government bodies of like size for such equipment, and in such amounts at a minimum equal t o the greater of the outstanding principal amount under this Lease Agreement or the replacemen t value of the Equipment with such deductibles as required, and with such insurance co mpanies as shall be reasonably satisfactory to the Lessor, and (iii) workers’ compensation coverage as required by the laws of the State. Lessor shall be named as an additional insured on any such policy and all insurance for loss or damage shall provide that losses if any, shall be payable to the Lessor. Reasonable evidence of all required liability insurance shall be provided to the Lessor . The Lessee shall pay the premiums therefor and deliver to the Lessor the policies of insurance or duplicates thereof and a certification in the form of Exhibit D or other evidence reasonably sati sfactory to the Lessor of such insurance coverage. Each insurer shall also agree by endorse ment upon the policy or policies issued by it that it will give thirty (30) days prior written notice to the Lessor of cancellation, non-renewal, or material modification of such policy and ten (10) d ays prior written notice for non-payment of premium. The proceeds of such insurance, at the option of the Lessor, shall be applied: (a) toward the replacement, restoration or repair of the Equip ment, or (b) toward payment of the obligations of the Lessee hereunder. The Lessee hereby appoint s the Lessor as the Lessee’s attorney-in-fact to make claim for, receive payment of, and execute all documents, checks or drafts received in payment of loss or damage under any such insurance policy. In lieu of the insurance policies
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described above, and with the consent of the Lessor , which consent shall not be unreasonably withheld, the Lessee may self-insure the Equipment by means of a self-insurance program whereby funds are set aside and maintained for the purpose of self-insuring the property of the Lessee. If Lessee chooses to self-insure the Equipment, Lessee will, at all times, provide Lessor with evidence of the self-insurance program in form and substance satisfactory to Lessor. If at any time during the Lease Term, the Lessor in its reasonable discretion, deems it necessary so to do, the Lessee shall provide at its expense an insurance po licy covering losses to the Equipment as set forth in this Section 6.7.
(b) Lessee shall maintain or cause to be maintained at its expense, throughout the Lease Term, insurance against rental payment ab atement and loss of use of the related Equipment or portions thereof, with coverage equal to the maximum total rental payments payable by Lessee hereunder for any consecutive twenty-four (24) month period. The policy shall insure against abatement of rental payments payable by Lessee hereunder resulting from Lessee’s loss of use of the Equipment or any substantial portion the reof and caused by any and all perils, either insured or uninsured, including earthquakes and oth er acts of God. Such insurance may be maintained in conjunction with or separate from any other similar insurance carried by Lessee; provided, however, Lessee shall not be permitted to self-insure with respect to the rental abatement insurance required by this subparagraph. The net p roceeds of such insurance shall be payable to Lessor in amounts proportionate to Lessee’s rental payments, if any, hereunder, during the restoration period in sufficient amount to make Lessor whole. (c) Lessee shall provide or cause the Vendor for th e Equipment to provide to Lessor payment and performance bonds from the Vendor, each naming the Lessor as a dual oblige and issued by a surety company rated “A” or better by AM Best in an amount equal to the Equipment.
6.8 Risk of Loss. Lessee shall bear the entire risk of loss, theft, destruction of or damage to the Equipment or any part thereof from an y cause whatsoever during the Lease Term and thereafter until redelivery to a location desig nated by Lessor, and shall not be relieved of the obligation to pay rental payments or any other obli gation hereunder because of any such occurrence, subject to Section 4.8 hereof. If (a) the Equipment or any portion thereof hereunder is destroyed (in whole or in part) or is damaged by fire or other casualty or (b) title to, or the temporary use of, the Equipment or any part thereof hereunder is taken under the exercise of the power of eminent domain, Lessee shall immediately notify Lessor. Lessee and Lessor shall cause the net proceeds of any insurance claim (including self-insurance) or condemnation award to be applied, at Lessor’s option, to (i) the prompt repair, restoration, modification or replacement of the Equipment so affected or (ii) the payment in full of the then applicable Concluding Payment. Any balance of net proceeds remaining after completion of such work or payment of such Concluding Payment shall be paid promptly to Lessee. If the n et proceeds are insufficient to pay the costs of such repair, restoration, modification or replaceme nt or to pay such Concluding Payment in full, Lessee shall, at Lessor’s direction and sole discre tion, either complete the work or pay the then applicable Concluding Payment in full, and in either case pay any cost in excess of the amount of net proceeds, but only from legally available funds. In the event there is no applicable Concluding Payment set forth in the Payment Schedule, the Concluding Payment for any such prepayment set forth in this Section 6.8 shall be in an amount equ al to 104% of the outstanding principal balance of this Lease Agreement.
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6.9 Performance by the Lessor of the Lessee’s Responsib ilities. Any performance required of the Lessee or any payments required to be made by the Lessee, if not timely performed or paid, may be performed or paid by the Lessor, and in that event, the Lessor shall be immediately reimbursed by the Lessee for these payments and for any costs and expense, legal or otherwise, associated with the payments or other performance b y the Lessor, with interest thereon at the Default Rate.
6.10 Financial Statements. The Lessee agrees that it wi ll furnish the Lessor at such reasonable times as the Lessor shall request, but i n no event later than ten (10) days prior to the end of each Fiscal Year, current financial statemen ts, including without limitation the Lessee’s annual budget or other proof of appropriation for t he ensuing Fiscal Year and such other information relating to Lessee’s ability to continue the Lease Term for the next succeeding Fiscal Year, and permit the Lessor or its agents and repre sentatives to inspect the Lessee’s books and records and make extracts therefrom. Additionally, Lessee shall furnish to Lessor, upon request, as soon as available, but in no event later than one hundred eighty (180) days after the end of each Fiscal Year, the audited financial statements of Le ssee, in customary and reasonable detail including the report provided by Lessee’s auditor. The Lessee represents and warrants to the Lessor that all financial statements which have been delivered to the Lessor, if any, and accurately reflect the Lessee’s financial condition and there has been no material adverse change in Lessee’s financial condition as reflected in the statements since the date thereof.
ARTICLE 7
EQUIPMENT
7.1 Title. Title to the Equipment and any and all addi tions, repairs, replacements or modifications thereto, shall be deemed to be vested in the Lessee subject to the rights of the Lessor hereunder from and after the date of the acceptance of the Equipment so long as the Lessee shall not be in default hereunder, and shall vest permane ntly in the Lessee upon the completion of all rental payments, free and clear of any lien or secu rity interest of the Lessor therein. Immediately upon the occurrence of an event of default by the Lessee hereunder, title to the Equipment (and all additions, repairs, replacements or modifications thereto) shall revert to the Lessor, free and clear of any right, title or interest of the Lessee unless the Lessor elects otherwise, without the necessity of any further action or the execution of any docum ents by the parties. Lessee will, nevertheless, execute and deliver any such instruments as Lessor may request to evidence such transfer. Lessee irrevocably designates, makes, constitutes and appoints Lessor and its assignee as Lessee’s true and lawful attorney (and agent in-fact) with power, at such time of termination or times thereafter as Lessor in its sole and absolute discretion may determine, in Lessee’s or Lessor’s or such assignee’s name, to endorse the name of Lessee upon any bill o f sale, document, instrument, invoice, freight bill, bill of lading or similar document relating to the Equipment in order to vest title in Lessor and transfer possession to Lessor.
7.2 Security Agreement.
(a) The provisions of this Section 7.2(a) apply general ly to all Equipment, regardless of the type, and the Escrow Fund: To se cure the performance of all of Lessee’s obligations hereunder, Lessee hereby grants to Lessor, and Lessor shall have and retain, a security
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interest constituting a first priority and perfecte d lien and security interest on the Equipment delivered hereunder and on any attachments, proceed s therefrom. Lessee agrees to execute and deliver such additional documents, including, witho ut limitation, opinions of counsel, financing statements, landlord-tenant or mortgagee waivers, n otices and similar instruments, in form satisfactory to Lessor, that Lessor deems necessary or appropriate to establish and maintain its security interest in the Equipment or for the confi rmation or perfection of Lessor’s rights hereunder. As further security therefor, Lessee he reby grants to Lessor a first priority security interest in the cash and negotiable instruments fro m time to time in the Escrow Fund and all proceeds (cash and non-cash) thereof, and agrees with respect thereto that Lessor shall have all the rights and remedies of a secured party under the applicable provisions of the Uniform Commercial Code as enacted in the applicable state. Lessee, a t its expense, will protect and defend Lessee’s rights in the Equipment and Lessor’s rights and interests therein and will keep the Equipment free and clear from any and all claims, liens, encumbran ces and legal processes of Lessee’s creditors and other persons. Lessor shall have the right dur ing normal hours, upon reasonable prior notice to Lessee, to enter upon the premises where the Equ ipment is located in order to inspect the Equipment. Lessee agrees that financing statements may be filed with respect to the security interest in the Equipment.
(b) During the Lease Term, ownership and legal title of all of the Equipment and all substitutions, repairs, modifications, and replacements shall be in Lessee, and Lessee shall take all necessary action to vest such ownership an d title in Lessee. Lessor does not own the Equipment, and, by this Lease Agreement, Lessor is merely financing the acquisition of the Equipment for the Lessee. Lessor has not been in th e chain of title, does not operate, control or have possession or control over the Equipment, or L essee’s use, maintenance, operation, storage, or maintenance of the Equipment. Lessee is entitle d to use and possession of the Equipment, subject to the rights of Lessor hereunder (includin g its interest in the Equipment as the lessor hereunder). If Lessor terminates this Lease Agreem ent pursuant to the terms hereof, all rights, title, and interests in the Equipment shall immedia tely vest in Lessor free and clear of any right, title or interest of Lessee. Lessee, at its expens e, will protect and defend Lessee’s rights in the Equipment and Lessor’s rights and interests therein and will keep the Equipment free and clear from any and all claims, liens, encumbrances and le gal processes of Lessee’s creditors and other persons.
7.3 Personal Property; No Encumbrances. The Equipment is, and shall at all times be and remain, personal property notwithstanding that the Equipment or any part thereof may now be, or hereafter become, in any manner affixed or a ttached to, or imbedded in, or permanently resting upon, real property or any building thereon or any fixtures, or attached in any manner to what is permanent by any means of cement, plaster, nails, bolts, screws or otherwise. Upon request of the Lessor, Lessee shall obtain, as to any place where the Equipment is located, a waiver from the landlord and mortgagee thereof with respect to any rights they may have in and to the Equipment or the rights of levy or seizure thereon. Lessee shall not create, incur, assume or permit to exist any mortgage, pledge, lien, security inter est, charge or other encumbrance of any nature whatsoever on any of the real estate where the Equi pment is or will be located or enter into any agreement to sell or assign or enter into any sale/leaseback arrangement of such real estate without the prior written consent of Lessor; provided, that if Lessor or its assigns is furnished with a waiver of interest in the Equipment acceptable to Lessor o r its assigns in its discretion from any party
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taking an interest in any such real estate prior to such interest taking effect, such consent shall not unreasonably withheld.
7.4 Liens. The Lessee shall not directly or indirectly create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, security interest, encumbrance or claim on or with respect to the Equipment or any interest therein, except fo r the lien and security interest of the Lessor therein created under this Lease Agreement. The Le ssee shall promptly, at its own expense, take such action as may be necessary to duly discharge a ny such mortgage, pledge, lien, security interest, charge, encumbrance or claim if the same shall arise at any time.
7.5 Inspection; Acceptance and Written Notice of Defects. . Immediately upon receipt and installation of the Equipment, the Lessee shall inspect the Equipment. Unless the Lessee gives the Lessor written notice of each defect or other p roper objection to the Equipment before the execution of the Acceptance Certificate and Payment Request, it shall be conclusively presumed upon execution of an Acceptance Certificate and Payment Request, as between the Lessor and the Lessee, that Lessee has fully inspected and acknowl edged that the Equipment described in the Acceptance Certificate and Payment Request is in go od condition and repair, has been properly installed and is performing satisfactorily, and tha t the Lessee is satisfied with and has accepted such Equipment in such good condition and repair.
7.6 Use of Equipment; Maintenance and Repairs. Lessee shall keep the Equipment within the State specified on Exhibit B in the “ Equipment Location ” section and Lessee shall not remove any of the Equipment therefrom without Lesso r’s prior written consent. Lessee shall use the Equipment for the purpose for which such Equipm ent was designed. Lessee shall at all times and at the Lessee’s sole cost and expense operate, maintain, service and repair the Equipment in good operating order, repair and condition (A) in a ccordance and consistent with (1) the manufacturer’s warranties, recommendations and all maintenance and operating manuals or service agreements, whenever furnished or entered into, including any subsequent amendments or replacements thereof, issued by the manufacturer, (2) the requirements of all applicable insurance policies, (3) preserving all rights to any warranti es, indemnities or other rights or remedies (such service to include monitoring the degradation of the Equipment and enforcing or assisting with the enforcement of the applicable warranties with respect to such degradation), (4) all applicable laws, ordinances, regulations or requirements of any gove rnmental authority, official, board or department relating to its installation, possession , use or maintenance, and (5) prudent industry standards; and (B) without limiting the foregoing, so as to cause the Equipment to be in at least the same condition as when delivered to the Lessee hereunder, except for ordinary wear and tear.
Lessee shall not make any alterations, additions, o r improvements to the Equipment that are not readily removable without causing damage to or redu cing the value of the Equipment. All alterations, additions, or improvements not readily removable shall become property of Lessor.
7.7 Essentiality. Lessee represents that, with respect hereto, (a) the use and operation of the Equipment is essential to its proper, effici ent, and economic governmental operation and (b) the functions performed by the Equipment could not be transferred to other equipment available for its use. Lessee does not intend to s ell or otherwise dispose of the Equipment or any interest therein prior to the last rental payment s cheduled to be paid hereunder. On the Commencement Date, Lessee shall complete and provid e Lessor a certificate in the form of Exhibit E.
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7.8 Sublease. Lessee will not sublease or otherwise in any manner transfer, deliver or, except as expressly consented to by Lessor, relinquish possession (except on a temporary basis for repair or maintenance) or use of the Equipment without the prior written consent of Lessor.
7.9 No Warranties. Lessee acquires and leases the Equi pment “AS IS.” Lessee acknowledges that Lessor did not manufacture the Eq uipment. Lessor does not represent the manufacturer, supplier, owner or dealer, and Lessee selected the Equipment based upon Lessee’s own judgment. Lessor makes no warranties, express or implied, including warranties of merchantability or fitness for a particular purpose or otherwise or as to the Equipment’s value, design, condition, use, capacity or durability. Lessee agrees that regardless of cause, Lessor is not responsible for, and Lessee will not make any claim against Lessor for, any damages, whether consequential, direct, special or indirect incurred by Lessee in connection with the Equipment.
Neither the manufacturer, supplier or dealer nor an y salesperson, employee or agent of the manufacturer, supplier or dealer is Lessor’s agent or has any authority to speak for Lessor or to bind Lessor in any way. For and during the Lease T erm, Lessor assigns to Lessee any manufacturer’s or supplier’s product warranties, express or implied, applicable to any Equipment and Lessor authorizes Lessee to obtain the customar y services furnished in connection with such warranties at Lessee’s sole expense. Lessee agrees that (a) all Equipment will have been purchased in accordance with Lessee’s specifications from sup pliers selected by Lessee, (b) Lessor is not a manufacturer or dealer of any Equipment and has no liability for the delivery or installation of any Equipment, (c) Lessor assumes no obligation with re spect to any manufacturer’s or supplier’s product warranties or guaranties, (d) no manufactur er or supplier or any representative of said parties is an agent of Lessor, and (e) any warranty, representation, guaranty or agreement made by any manufacturer or supplier or any representative of said parties shall not be binding upon Lessor..
ARTICLE 8
WARRANTIES AND REPRESENTATIONS OF THE LESSEE
The Lessee warrants and represents to the Lessor as follows, which representations and warranties shall be continuing.
(a) The Lessee is a political subdivision of the State of California within the meaning of Section 103(c) of the Code and will do o r cause to be done all things necessary to preserve and keep in full force and effect its existence as such. Lessee has a substantial amount of one or more of the following sovereign powers: (i) the power to tax, (ii) the power of eminent domain, and (iii) police power.
(b) The Lessee is authorized under the Constitution and laws of the State of California to enter into this Lease Agreement and t he transactions contemplated hereby and to perform all of its obligations hereunder.
(c) The execution and delivery of this Lease Agreement by or on behalf of the Lessee has been duly authorized by all necessary ac tion of the Governing Body, and the Lessee has obtained such other approvals and consents as a re necessary to consummate this Lease Agreement. The Lessee further represents and warra nts that all requirements have been met and
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procedures have been followed in order to ensure th e enforceability of this Lease Agreement in accordance with its terms.
(d) The Lessee has complied with such public bidding requirements as may be applicable to this Lease Agreement and has complied or will comply with such requirements for the acquisition of the Equipment hereunder.
(e) The Lessee shall cause to be executed and delivered to the Lessor (1) an incumbency and closing certificate in substantially the form attached as Exhibit F hereto, (2) an Opinion of Lessee’s Counsel in substantially the fo rm attached as Exhibit G hereto and (3) a Tax Opinion of Lessee’s Counsel in substantially the form attached as Exhibit H hereto. (f) The Lessee has an immediate need for, and expects to make immediate use of all of the Equipment which need is not temporary or expected to diminish during the term of this Lease Agreement.
(g) The execution, delivery and performance of this Lea se Agreement and transactions contemplated herein will not violate any judgment, order, law or regulation applicable to the Lessee or result in any breach of, or consti tute a default under, any indenture, mortgage, deed of trust, bond, loan or credit agreement or other instrument to which the Lessee is a party or by which it is bound.
(h) There are no actions, suits or proceedings pending or, to the knowledge of the Lessee, threatened against or affecting the Les see in any court or before any governmental commission, board or authority which, if adversely determined, would have a material adverse effect on the ability of the Lessee to perform its obligations hereunder. (i) The Equipment is essential to and will be used only for the purpose of performing one or more governmental functions of th e Lessee consistent with the scope of the Lessee’s authority and will not be used in a trade or business of any person or entity. The Lessee shall execute and deliver to Lessor an Essential Us e Certificate in form and substance reasonably satisfactory to the Lessor.
(j) The Equipment is, and shall remain during the term of this Lease Agreement, personal property.
(k) The Lessee will promptly and duly execute and deliv er to the Lessor such further documents, instruments and assurances and take such further action as the Lessor may from time to time reasonably request in order to carry out the intent and purpose of this Lease Agreement and to establish and protect the rights and remedie s created or intended to be created in favor of the Lessor hereunder.
(l) The Lessee has sufficient funds in its budget for t he current Fiscal Year to pay the aggregate amount of the rental payments due under this Lease Agreement during the current Fiscal Year. The Lessee has never failed t o pay payments coming due under any bond issue, lease purchase agreement or other indebtedness obligation of the Lessee.
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(m) Lessee has not experienced any Loss of Use or Occup ancy, which would adversely impact its beneficial use and operation o f the Equipment and adversely affect its obligation to make full rental payments with respect to the Equipment under this Lease Agreement otherwise permit an abatement of Rental Payments under this Lease Agreement. (n) The useful life of the Equipment will not be le ss than the Lease Term. (o) The total estimated cost of the Equipment is $2 6,270,796. Lessee will pay all costs of acquiring the Equipment in excess of t he amount deposited by Lessor in the Escrow Fund allocated to payment of costs of the Equipment ($19,295,796). Lessee agrees with Lessor that no moneys shall be disbursed from the Escrow F und for costs of the Equipment until Lessee has provided to Lessor evidence of Lessee’s payment for costs of the Equipment over the amount deposited by Lessor in the Escrow Fund.
(p) Lessee is the fee owner of the real estate wher e the Equipment is and will be located and has good and marketable title theret o, and there exists no mortgage, pledge, lien, security interest, charge or other encumbrance of any nature whatsoever on or with respect to such real estate. The Equipment is not a replacement, repair, substitution or proceeds of any equipment or personal property subject to a prior lien or security interest of a third party.
ARTICLE 9
WARRANTIES AND REPRESENTATIONS OF THE LESSOR
The Lessor warrants and represents to the Lessee as follows, which representations and warranties shall be continuing.
(a) The Lessor is a corporation duly incorporated under the laws of the State of California and is in good standing with the State of California and is duly authorized to enter into the transactions contemplated by this Lease Agreement and to carry out its obligations hereunder; (b) The Lessor has full power and authority to enter into this Lease Agreement and all other documents relating thereto and the performance of the Lessor’s obligations hereunder have been duly and validly authorized, executed and delivered by the Lessor and approved under all laws, regulations and procedures applicable to Lessor and this Lease Agreement constitutes a valid, legal and binding obligation of the Lessor, enforceable in accordance with its terms; (c) Lessor hereby assigns to Lessee, to the extent that it may lawfully do so, so long as no Event of Default shall have occurred and be continuing hereunder, all rights and benefits that Lessor may have under any warranty, guaranty o r the like that may be made with respect to the Equipment by the manufacturer, seller and/or su pplier (collectively, the “ Vendor ”) thereof.
To the fullest extent permitted by applicable law, Lessor shall not be liable to Lessee or any third party for any loss, damage, injury or expense of any kind or nature caused directly or indirectly by any of the Equipment or the use or maintenance ther eof or any defect therein, the failure of operation thereof or by any interruption of service or loss of use thereof or for any loss of business or damage whatsoever and howsoever caused. Lessor makes no warranty as to the treatment of this Lease for tax or accounting purposes or as to the compliance of the Equipment with applicable
14 129172475v1
government regulations or requirements. Lessee agrees to look solely to the Vendor for any claim arising from any defect, breach of warranty, failur e or delay in delivery, mis-delivery or inability to use the Equipment for any reason whatsoever and Lessee’s obligations to Lessor hereunder shall not in any manner be affected thereby, including (w ithout limitation) Lessee’s obligations to pay Lessor all rental payments and other amounts payabl e hereunder, subject to Section 4.8 hereof.
Lessee has selected both the Equipment and the Vend or and acknowledges that Lessor has not participated in any way in Lessee’s selection of th e Equipment or the Vendor. Lessor has no obligation to install, erect, test, adjust, service or maintain the Equipment. (d) NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE
CONTRARY LESSEE HAS SELECTED EACH ITEM, TYPE, QUALI TY, QUANTITY AND
SUPPLIER OF THE EQUIPMENT BASED UPON RECOMMENDATION S OF ITS
INDEPENDENT CONSULTANTS PRIOR TO HAVING REQUESTED L ESSOR TO
FINANCE THE SAME AND THAT LESSOR HAS NOT MADE ANY, AND MAKES NO,
WARRANTEES OR REPRESENTATIONS, EXPRESS OR IMPLIED, AS TO ANY MATTER
RELATING TO THE SUITABILITY OF THE EQUIPMENT, ITS V ALUE, DESIGN,
CONDITION, DURABILITY, FITNESS FOR ANY PARTICULAR P URPOSE,
MERCHANTABILITY, OPERATION, MATERIALS, WORKMANSHIP AND/OR ITS QUALITY. AS BETWEEN LESSEE AND LESSOR, LESSEE LEAS ES, PURCHASES AND ACQUIRES THE EQUIPMENT “AS IS” “WHERE IS” AND “WITH ALL FAULTS.” (e) Lessee agrees that Lessor shall have no liability o r be obligated in any manner for any obligation, loss, expense, claim, damage, action, suit or proceeding arising out of, connected with, or resulting directly or indirectly from the Equipment, including without limitation, the manufacture, selection, delivery, i nstallation, possession, condition, lease, use, operation or return of the Equipment, notwithstandi ng the full payment of all obligations under this Lease Agreement.
ARTICLE 10
INTENTIONALLY OMITTED
ARTICLE 11
TAX COVENANTS AND INDEMNIFICATION
11.1 Covenants. The parties assume that the Lessor can exclude the interest component of the rental payments from Federal gross income. The Lessee covenants and agrees that it will (i) rebate an amount equal to any excess earnings on the Escrow Fund to the Federal Government if required by, and in accordance with, Section 148 (f) of the Code, and make the annual determinations, and maintain the records required b y and otherwise comply with all regulations applicable thereto; (ii) register in writing the ow ner of this Lease Agreement so as to meet the applicable requirements of Section 149(a)(3) of the Code; (iii) timely file a Form 8038-G with the Internal Revenue Service in accordance with Section 149(e) of the Code; (iv) not permit the Equipment to be directly or indirectly used for a private business use within the meaning of Section 141 of the Code; and (v) comply with all provisions and regulations applicable to excluding interest from Federal gross income pursuant to Section 103 of the Code.
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11.2 Further Covenants. The Lessee further covenants th at it will not take any action, or fail to take any action, if any such action or f ailure to take action would adversely affect the exclusion from gross income of the interest portion of the rental payments made hereunder under Section 103 of the Code. The Lessee will not direct ly or indirectly use or permit the use of any proceeds available from the Lessor or any other fun ds of the Lessee, or take or omit to take any action that would cause the lease purchase obligation evidenced by this Lease Agreement to be an “arbitrage bond” within the meaning of Section 148( a) of the Code. To that end, the Lessee will comply with all requirements of Section 148 of the Code to the extent applicable to the lease purchase obligation evidenced by this Lease Agreement.
11.3 Indemnification. If the Lessor receives notice, in any form, from the Internal Revenue Service that it has determined that the Lessor may not exclude any interest paid hereunder from Federal gross income because the Lessee breach ed a covenant contained herein, then the Lessee shall pay to the Lessor, within ninety (90) days after the Lessor notifies the Lessee of such determination, an amount which, with respect to the rental payments previously paid and taking into account all penalties, fines, interest and additions to tax (including all federal, state and loc al taxes imposed on the interest component of all rental payments due through the date of such event), will restore to the Lessor its after-tax yield (assuming tax at the highest marginal tax rate and taking into account the time of receipt of payments and re investment at the after-tax yield rate) on the transaction evidenced by this Lease Agreement throu gh the date of such payment. Additionally, the Lessee agrees that upon the occurrence of such an event, it shall pay as additional rent to the Lessor on such succeeding rental payment due date s uch amount as will maintain such after-tax yield to the Lessor.
ARTICLE 12
GENERAL INDEMNIFICATION
The Lessee hereby agrees to indemnify, protect and save the Lessor harmless, to the extent permitted by law, from all liability, obligations, losses, claims, damages, actions, suits, proceedings, costs and expenses, including attorney s’ fees, arising out of, connected with, or resulting directly or indirectly from the Equipment, including without limitation, the manufacture, selection, delivery, possession, condition, lease, use, operation or return of the Equipment. The indemnification arising under this section shall co ntinue in full force and effect notwithstanding the full payment of all obligations due under this Lease Agreement. Notwithstanding the foregoing, the Lessee does not waive any sovereign immunity or other defense which may be available to it under applicable law.
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ARTICLE 13
INTENTIONALLY OMITTED
ARTICLE 14
DEFAULT AND REMEDIES
14.1 Definition of Default. The Lessee shall be deemed to be in default hereunder upon the happening of any of the following events of def ault, which default (other than a monetary default under Section 14.1(a) or failure to maintai n insurance under Section 14.1(e)) is not cured within thirty (30) days after receipt of written notice thereof (an “ Event of Default ”). (a) The Lessee shall fail to make any rental payment or pay any other sum under this Lease Agreement when due or shall fail to perf orm or observe any term or condition or covenant of this Lease Agreement, subject to the last paragraph of this Section 14.1. (b) Proceedings under any bankruptcy, insolvency, reorg anization or similar litigation shall be instituted by or against the Le ssee, or a receiver, custodian or similar officer shall be appointed for the Lessee or any of its pro perty, and such proceedings or appointments shall not be vacated, or fully stayed, within sixty (60) days after the institution or occurrence thereof.
(c) Any warranty, representation or statement made by t he Lessee is found to be incorrect or misleading in any material respect on the date made. (d) An attachment, levy or execution is levied upon or against the Equipment. (e) Any insurance carrier cancels any insurance on the Equipment which is required hereunder without the Lessee first providing replacement coverage. (f) The Equipment or any part thereof is abused, illega lly used, misused, lost, destroyed or damaged beyond repair.
(g) The failure of the officer charged with the prepara tion of the Lessee’s budget to include in the budget for each Fiscal Year of the Lessee during the Lease Term a request that the Governing Body appropriate in such Fiscal Year the amount of the rental payments and other payments due under this Lease Agreement during such Fiscal Year. (h) Lessee’s failure to make the Lessee Payments as and when such payments become due.
14.2 Remedies on Default. Upon the occurrence of any Ev ent of Default, the Lessor may exercise any one or more of the following remed ies as the Lessor in its sole discretion shall elect.
(a) Declare the entire amount of rental payments hereun der immediately due and payable as to any or all items of Equipment without notice or demand to the Lessee.
17 129172475v1
(b) Proceed by appropriate court action to enforce perf ormance by the Lessee of the applicable covenants of this Lease Agreement or to recover for the breach thereof including the payment of rental payments due or to become due hereunder or any deficiency therefor following disposition of the Equipment.
(c) With or without terminating this Lease Agreement, e nter the premises where the Equipment is located and retake possessio n of the Equipment wherever situated or require Lessee at Lessee’s expense to promptly return any or all of the Equipment to the possession of Lessor at a place specified by Lessor, without a ny court order or other process of law and without liability for entering the premises and sell, lease, sublease or make other disposition of the same in a commercially reasonable manner for the ac count of the Lessee, and apply the proceeds of any such sale, lease, sublease, or other disposi tion, after deducting all costs and expenses, including court costs and reasonable attorneys’ fee s, incurred with the recovery, repair, storage and other sale, lease, sublease or other dispositio n costs, toward the balance due under this Lease Agreement, holding Lessee liable for the difference between (i) the Rental Payments and other amounts payable by Lessee hereunder plus the applic able Concluding Payment, and (ii) the net proceeds of any such sale, lease or sublease; provi ded that the amount of Lessee’s liability under this subparagraph (c) shall not exceed the Rental P ayments and other amounts otherwise due hereunder plus the remaining Rental Payments and other amounts payable by Lessee to the end of the Lease Term; and provided further that any liabilities for such remaining Rental Payments and other amounts shall be required to be paid by Lesse e only at the times provided for the payment of such amounts under the provisions of this Lease Agreement. (d) Terminate this Lease Agreement as to all or any part of the Equipment and use, operate, lease or hold the Equipment as the Lessor in its sole discretion may decide. (e) Terminate the Escrow Fund in accordance with Sectio n Error! Reference source not found. hereof.
14.3 Further Remedies. A termination hereunder shall oc cur only upon notice by the Lessor to the Lessee and only with respect to such portion or portions of the Equipment as the Lessor specifically elects to terminate in such not ice. Except as to those parts of the Equipment with respect to which there is a termination, this Lease Agreement shall remain in full force and effect and the Lessee shall be and remain liable fo r the full performance of all its obligations hereunder. All remedies of the Lessor are cumulati ve and may be exercised concurrently or separately. The exercise of any one remedy shall n ot be deemed an election of such remedy or preclude the exercise of any other remedy.
14.4 Reinstatement. Notwithstanding the re-exercise of any remedy granted by this Article 14, if all amounts that have become due and payable to the Lessor have been paid, all other things have been performed in respect of which ther e was a default and there has been paid the reasonable fees and expenses of the Lessor, including administrative expenses and attorneys’ fees paid or incurred, then the Event of Default shall b e waived without further action on the part of any party hereto. Upon such payment and waiver, this Lease Agreement shall be fully reinstated, as if it had never been terminated, and the Lessee shall be restored to the use and possession of the Equipment.
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ARTICLE 15
INTENTIONALLY OMITTED.
ARTICLE 16
ASSIGNMENT
16.1 Assignment By Lessee. The Lessee agrees not to sel l, assign, lease, sublease, pledge or otherwise encumber or suffer a lien or encumbrance upon or against any interest in this Lease Agreement or the Equipment (except for the lien and security interest of the Lessor therein) or to remove the Equipment from its place of installation without the Lessor’s prior written consent which shall not be unreasonably withheld and an opi nion of nationally recognized counsel in the area of tax exempt municipal obligations satisfacto ry to Lessor that such subleasing will not adversely affect the exclusion of the interest comp onents of the Rental Payments from gross income for federal income tax purposes. The Lessee ’s interest herein may not be assigned or transferred by operation of law.
16.2 Assignment By The Lessor. Lessor’s interest in, to and under this Lease Agreement and the Equipment may be assigned and reassigned in whole or in part to one or more assignees by Lessor without the necessity of obtaining the consent of Lessee; and such assignment, transfer or conveyance shall be made only to (i) an affiliat e of Lessor or (ii) banks, insurance companies, trusts, custodians or other financial institutions or their affiliates, but no such assignment, transfer or conveyance shall be effective as against Lessee unless and until Lessor has delivered to Lessee written notice thereof that discloses the name(s) a nd address(es) of the assignee(s) or the Lease Servicer (as hereafter provided). Nothing herein s hall limit the right of Lessor or its assignees to sell, assign or grant participation interests in this Lease Agreement to one or more entities listed in (i) or (ii); provided that if such assignment is made pursuant to a participation, custodial or similar agreement under which multiple ownership interests in this Lease Agreement are created, it shall establish a single entity, owner, servicer or other fiduciary or agent to act on behalf of all of the holders of such participation interests (herein ref erred to as the “Lease Servicer”) with respect to the rights and interests of such holders hereunder, including the exercise of rights and remedies thereunder upon the occurrence of an event of default, and further including the maintenance of a register by which a record of the names and address es of such holders as of any particular time is kept and agrees, upon request of Lessee, to furnish such information to Lessee. Lessee will retain all notices of assignment as a register of all assignees and will make all payments to the assignee, assignees or Lease Servicer designated in such regi ster. Lessee agrees to execute all documents, including notices of assignment and chattel mortgag es or financing statements that may be reasonably requested by Lessor or any assignee to protect its interest in the Equipment and in this Lease Agreement and agrees to the filing of financi ng statements with respect to the Equipment and this Agreement. Lessee will not have the right to and will not assert against any assignee any claim, counterclaim, defense, set-off or other right Lessee may have against Lessor.
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ARTICLE 17
NATURE OF AGREEMENT
The Lessor and the Lessee agree that it is their in tention that, for federal income tax purposes, the interest of the Lessor in the Equipme nt is as a secured party and the interest of the Lessee is as a debtor, and that the Lessor neither has nor will have any equity in the Equipment. It is the agreement of the Lessor and the Lessee that the aggregate rental payments provided for hereunder constitute the purchase price of the Equi pment together with the interest on the unamortized amount thereof over the term of this Lease Agreement, that each installment of Rental Payments constitutes principal and interest, which fully amortizes the purchase price of the Equipment, together with interest, over the term of this Lease Agreement, and that upon the due and punctual payment and performance of the rental payments and other amounts and obligations under this Lease Agreement, title to the Equipment shall vest permanently in Lessee as provided in this Lease Agreement, free and clear of any lien or security of the Lessor therein.
ARTICLE 18
OPTION TO PURCHASE
At the option of Lessee, and provided that no Event of Default has occurred and is continuing hereunder, Lessor’s interest in all, but not less than all, of the Equipment will be transferred, conveyed and assigned to Lessee, thereby vesting title to the Equipment permanently in Lessee, and this Lease shall terminate: (a) upo n payment in full of the rental payments and all other payments then due hereunder or (b) on any ren tal payment date hereunder, by paying to Lessor, in addition to the rental payment due on su ch date, an amount equal to the concluding payment (the “ Concluding Payment ”) shown for such rental payment date in the rental payment schedule in Schedule 1 to Exhibit B attached hereto. Lessee shall not have the option to purchase the Equipment hereunder as provided in the foregoin g clause (b) on any rental payment date hereunder for which a Concluding Payment is not sta ted in the rental payment schedule.
Notwithstanding anything to the contrary contained herein, the purchase option in this Article 18 is non-assignable and non-transferrable.
This option to purchase may be exercised by the Les see on any Payment Date on or after _________ __, 2033, and is conditioned upon:
(a) the Lessee’s having performed all of the terms and conditions of the Lease Agreement between the parties other than the paymen t of monies not yet due and payable under this Lease Agreement;
(b) the Lessee’s giving written notice to the Lessor of its election to exercise the option not less than thirty (30) days prior to the date of exercise of the option by the Lessee; and
(c) the Lessee’s payment of the Concluding Payment in cash at the time of the exercise of the option.
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ARTICLE 19
MISCELLANEOUS
19.1 Waiver. No covenant or condition of this Lease Agr eement can be waived except by the written consent of the Lessor. Any failure of the Lessor to require strict performance by the Lessee or any waiver by the Lessor of any terms , covenants or agreements herein shall not be construed as a waiver of any other breach of the same or of any other term, covenant or agreement herein.
19.2 Severability. In the event any portion of this Lease Agreement shall be determined to be invalid under any applicable law, such provision shall be deemed void and the remainder of this Lease Agreement shall continue in full force and effect.
19.3 Governing Law. This Lease Agreement shall be const rued, interpreted and enforced in accordance with the laws of the State of California.
19.4 Notice. All notices made or required to be given pursuant to this Lease Agreement shall be in writing and shall be deemed duly served if and when mailed, certified or registered mail, postage prepaid, return receipt requested, to the other party at its address set forth above or at such other address as such party shall hereafter designate in writing.
If to the Lessor, address to:
Alliance Funding Solutions, Inc.
12520 High Bluff Drive, Suite 345
San Diego, California 92130
Attention: Brad Chapman
Email: [email protected]
If to the Lessee, address to:
City of Montebello
1600 W Beverly Boulevard
Montebello, California 90640
Attention: James Enriquez, Director/City Engineer
Email: [email protected]
19.5 Section Headings. All section headings contained h erein are for convenience of reference only and are not intended to define or li mit the scope of any provision of this Lease Agreement.
19.6 Entire Agreement. This Lease Agreement, together w ith any schedules hereto, constitutes the entire agreement between the partie s and shall not be modified, amended, altered or changed except by written agreement signed by the parties.
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19.7 Binding Effect. Subject to the specific provisions of this Lease Agreement, this Lease Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.
19.8 Further Assurances. The Lessee will promptly and duly execute and deliver to the Lessor such further documents, instruments and assu rances and take such further action as the Lessor may from time to time reasonably request in order to carry out the intent and purpose of this Lease Agreement and to establish and protect t he rights and remedies created or intended to be created in favor of the Lessor hereunder.
19.9 Time. Time is of the essence of this Lease Agreement.
19.10 Counterparts. This Lease Agreement, and any exhibi t hereto, may be executed in one or more counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument.
19.11 No Third-Party Beneficiaries. This Lease Agreement and any documents or certificates executed in connection with, or pursua nt to it, are intended only for the benefit of the Lessor, the Lessee and the Escrow Agent, and no rig hts are intended, or shall be deemed to be, granted to any other parties thereby.
19.12 Exhibits. This Lease Agreement includes the Exhibits attached hereto, all of which Exhibits are made a part hereof for all purposes. Lessee and Lessor agree that if any Exhibit to this Lease Agreement contains blanks, the same shal l be completed correctly and in accordance with this Lease Agreement prior to or at the time of the execution and delivery thereof.
19.13 Electronic Transactions. The parties agree t hat the transaction described herein may be conducted and related documents may be stored by electronic means. Copies, telecopies, facsimiles, electronic files and other reproductions of original executed documents shall be deemed to be authentic and valid counterparts of such orig inal documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law.
19.14 Lessee’s Notice Filings Related to this Agree ment for SEC Rule 15c2-12. In connection with Lessee’s compliance with any contin uing disclosure undertakings (each, a “Continuing Disclosure Agreement”) entered into by Lessee on and after February 27, 2019, pursuant to SEC Rule 15c2-12 promulgated pursuant to the Securities and Exchange Act of 1934, as amended (the “Rule”), Lessor acknowledges that L essee may be required to file with the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access system, or its successor (“EMMA”), notice that Lessee has incurred obligations under this Lease Agreement and notice of certain subsequent events reflecting fina ncial difficulties in connection with this Lease Agreement. Lessee agrees that it shall not file or submit, or permit to be filed or submitted, with EMMA any documentation that includes the following unredacted sensitive or confidential information about Lessor or its affiliates: address and account information of Lessor or its affiliate, e-mail addresses, telephone numbers, fax numbers, n ames and signatures of officers, employees and signatories of Lessor or its affiliates, or any account information for any related escrow agreement, unless otherwise required for compliance with the Rule or otherwise required by law.
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Lessee acknowledges that Lessor is not responsible for Lessee’s compliance or noncompliance with the Rule or any Continuing Disclosure Agreement.
[Remainder of page intentionally left blank signature pages follow ]
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IN WITNESS WHEREOF, the parties hereto have caused this Lease Agreement to be executed as of the day and year first above written.
LESSOR:
ALLIANCE FUNDING SOLUTIONS, INC. , a
California corporation
By: ______________________________
Name: Brad Chapman
Title: President
LESSEE:
CITY OF MONTEBELLO , a political subdivision
of the State of California
By: ______________________________
Name: Kimberly Ann Cobos-Cawthorne
Title: Mayor
Exhibit A-1
129172475v1
EXHIBIT A
DESCRIPTION OF EQUIPMENT
The Equipment shall mean HVAC, controls, transformer, building envelope and solar photovoltaic systems used to reduce the Lessee’s energy consumpt ion and generate electricity installed at various facilities pursuant to that certain Installation Agreement dated January __, 2023, between the City of Montebello and Alliance Building Soluti ons, Inc., together with all replacements, substitutions, repairs, restorations, modifications , attachments, accessions, additions and improvements thereof or thereto, and all insurance and/or proceeds therefrom. See also “Scope of Work” attached hereto for a further description of the Equipment. This Description of Equipment shall be deemed to be supplemented by the descripti ons of the Equipment included in the Certificate of Acceptance and Payment Requests submitted to Lessor for approval pursuant to the Escrow Agreement dated January __, 2023, among Less or, Lessee and Banc of California, as escrow agent, which descriptions shall be deemed to be incorporated herein.
Exhibit B-1
129172475v1
EXHIBIT B
EQUIPMENT SCHEDULE
1. Lease Agreement: Equipment Lease Purchase Agree ment dated as of January __, 2023, between the City of Montebello, as lessee, and Alliance Funding Solutions, Inc., as lessor.
2. Description of the Equipment: See Exhibit A .
3. Equipment Locations: See Scope of Work attache d to Exhibit A .
4. Principal Amount: $19,295,796.00.
5. Rental Payment Schedule: The Rental Payments fo r the Equipment shall be made as set forth in Schedule 1 to Exhibit B attached hereto.
6. Interest Rate: ______%
7. Commencement Date: January __, 2023
8. Final Rental Payment: _________________, 2042
9. Lessee’s current Fiscal Year extends from July 1 through June 30 of each year.
10. The terms and provisions of the Lease Agreement are hereby incorporated into this Equipment Schedule by reference and made a part hereof.
11. Lessee hereby represents, warrants, and covenan ts that (i) its representations, warranties, and covenants set forth in the Lease Agreement are true and correct as though made on the date of execution of this Equipment Schedule, (ii) sufficie nt funds have been appropriated by Lessee for the payment of all Rental Payments due under the Lease Agreement during Lessee’s current Fiscal Year, and (iii) there has been no Loss of Use or Occupancy or other event which would adversely impact the Lessee’s obligation to make Rental Payments.
CITY OF MONTEBELLO, ALLIANCE FUNDING SOLUTIONS,
as Lessee as Lessor
By: By:
Name: Kimberly Ann Cobos-Cawthorne Name: Brad Chap man Title: Mayor Title: President
Exhibit B-2
129172475v1
SCHEDULE 1 TO EXHIBIT B
RENTAL PAYMENT SCHEDULE
Rental
Payment Date
Total
Rental Payment
Interest
Portion
Principal
Portion
Purchase
Price *
[INSERT RENTAL PAYMENT SCHEDULE]
_________________
* Lessee may exercise its option to purchase pursu ant to Article 18 of the Lease Agreement. Assumes that all Rental Payments and additional rentals due on and p rior to that date have been paid.
Exhibit C-1
129172475v1
EXHIBIT C
NOTICE AND ACKNOWLEDGEMENT OF
ASSIGNMENT OF LEASE AGREEMENT AND ESCROW AGREEMENT
Alliance Funding Solutions, Inc. (“ Lessor ”) and City of Montebello (“ Lessee ”) have entered into that certain Equipment Lease-Purchase Agreement dated as of January __, 2023 (the “Lease Agreement ”), under which Lessee has, or will have prior to i ts execution hereof, leased equipment (the “ Equipment ”) described therein.
Lessee hereby acknowledges that, pursuant to the te rms of the Lease Agreement, Lessor has assigned its right, title, and interest in and to the Lease Agreement, the leased Equipment, and the rental payments to Capital One Public Funding, LLC. (“ Assignee ”).
Lessee is hereby directed to pay any and all rental payments and other amounts due under the Lease Agreement to Assignee, as directed by Assignee, pursuant to the instructions contained in any invoice or notice. Lessee will also direct a ny and all correspondence, notice and servicing requests to the Assignee at the following address:
Capital One Public Funding, LLC
Address
Attention:
Email:
By signing this Notice and Acknowledgment, Lessee a grees that it will pay all rental payments and other amounts due under the Lease Agre ement as directed by Lessee without any set-off notwithstanding any defect in, damage to or requisition of any of the Equipment leased under the Lease Agreement, any other similar or dis similar event, any defense, set-off, counterclaim or recoupment arising out of any claim against Lessor or Assignee.
Lessee further acknowledges and agrees that Assigne e has not assumed any of Lessor’s obligations or duties under the Lease Agreement or made any warranties whatsoever as to the Lease Agreement or the Equipment. Lessee agrees th at no change may be made to the Lease Agreement without the prior written consent of Assignee.
Lessee acknowledges that Assignee is acting solely as Assignee for its own loan account and not as a fiduciary for Lessee or in the capacit y of broker, dealer, placement agent, municipal securities underwriter or municipal advisor. Assig nee has not provided, and will not provide, financial, legal, tax, accounting or other advice t o or on behalf of Lessee with respect to its purchase of the Lease Agreement. Lessee has sought and obtained financial, legal, tax, accounting and other advice (including as it relates to structure, timing, terms and similar matters) with respect to the Lease Agreement from its financial, legal and other advisors (and not Assignee) to the extent that Lessee desired to obtain such advice.
By signing this Notice and Acknowledgment, Lessee warrants that its representations and warranties under the Lease Agreement are true and correct on the date hereof.
Exhibit C-2
129172475v1
Date: January __, 2023
ALLIANCE FUNDING SOLUTIONS, INC.
By:
Name:
Title:
CITY OF MONTEBELLO, as Lessee
By:
Name: Kimberly Ann Cobos-Cawthorne
Title: Mayor
Exhibit D-1
129172475v1
EXHIBIT D
INSURANCE CERTIFICATION
Alliance Funding Solutions, Inc.
12520 High Bluff Drive, Suite 345
San Diego, California 92130
January __, 2023
Re: Equipment Lease-Purchase Agreement dated as of January __, 2023 (the “Lease Agreement”), between the City of Montebello, as les see, and Alliance Funding Solutions, Inc., as lessor
In connection with the above referenced Lease Agree ment, the City of Montebello, as lessee (the “Lessee”) certifies that it has instructed the insurance agent named below:
Name of Agent: Public Risk Innovation, Solutions, a nd Management C/O Alliant Insurance Services, Inc.
Address: 18100 Von Karman Avenue, 10
th Floor
Irvine, CA 92612
Phone: (949) 756-0271
Fax: (619) 699-0901
License No.: 0C36861
to issue the following insurance coverages:
1. Liability Insurance . Lessee is required to maintain public liability insurance, personal injury and property damage with policy lim its of $3,000,000. The policy should be endorsed to name First Security Finance, Inc. and its successors and assigns, 521 President Clinton Avenue, Suite 80 0, Little Rock, AR 72201 (the “ Additional Insured ”) as an additional insured.
2. Casualty Insurance . Lessee is required to maintain all risk extended coverage, malicious mischief and vandalism insurance for the Equipment described in the above-referenced Lease Agreement in an amount not less than the greater of $19,295,796.00 or the full replacement co st of the Equipment. Such insurance shall be endorsed to name the Additional Insured and its successors and or assigns as an additional insured and co-loss payee with respect to such Equipment.
3. Rental Interruption Insurance . Lessee is required to mai ntain insurance against rental payment abatement and loss of use of the Equ ipment or portions thereof, with coverage equal to the maximum total rental pay ments payable by Lessee under the above-referenced Lease Agreement for any consecutive twenty-four (24 ) month period. Such insurance shall name the Addi tional Insured and its successors and assigns as an additional insured.
The required insurance should also be endorsed to g ive the Additional Insured at least 30
Exhibit D-2
129172475v1
days prior written notice of the effective date of any material alteration or cancellation of coverage, and an endorsement confirming that the interest of the Additional Insured shall not be invalidated by any actions, inactions, breach of warranty or conditions or negligence of Lessee.
Proof of insurance coverage will be provided to the Additional Insured prior to and/or commensurate with the later of the Commencement Dat e of the Lease Agreement or the delivery and acceptance of the Equipment.
Very truly yours,
CITY OF MONTEBELLO, as Lessee
By:
Name: Kimberly Ann Cobos-Cawthorne
Title: Mayor
Exhibit E-1
129172475v1
EXHIBIT E
ESSENTIAL USE CERTIFICATE
Alliance Funding Solutions, Inc.
12520 High Bluff Drive, Suite 345
San Diego, California 92130
January __, 2023
Re: Equipment Lease-Purchase Agreement dated as of January __, 2023, between the City of Montebello, as lessee, and Alliance Funding Solutions, Inc., as lessor
1. What is the specific use of the Equipment?
2. What increased capabilities will the Equipment p rovide?
3. Why is the Equipment essential to your ability t o deliver governmental services?
4. Does the Equipment replace existing equipment?
(If so, please explain why you are replacing the existing equipment)
5. Why did you choose this specific Equipment?
6. For how many years do you expect to utilize the Equipment?
Very truly yours,
City of Montebello, as Lessee
By:
Name: Kimberly Ann Cobos-Cawthorne
Title: Mayor
Exhibit F-1
129172475v1
EXHIBIT F
INCUMBENCY AND CLOSING CERTIFICATE
I, Christopher Jimenez, do hereby certify that I am the City Clerk of the City of Montebello (“ Lessee ”), which is a government organization duly establi shed and validly existing as a government organization in the State of California.
I hereby certify that, as of the date hereof, the i ndividual named below is the duly elected or appointed officer of the Lessee holding the offi ce set forth opposite his name. I further certify that:
(i) The signature set opposite such officer’s name and title is such officer’s true and authentic signature,
(ii) Such officer has the authority on behalf of Le ssee to:
a. Enter into that certain Equipment Lease-Purchase Agreement dated as of January __, 2023 (the “ Lease Agreement ”), between Lessee and Alliance Funding Solutions, Inc., as lessor, and that certain Escrow Agreement dated as of January __, 2023 (the “ Escrow Agreement ”) by and among Lessee, Alliance Funding Solutions, Inc., and Banc of California, as escrow agent; and b. Execute certificate, documents, and agreements r elating to the Lease Agreement and Escrow Agreement on behalf of Lessee.
N
AME T ITLE S IGNATURE
Kimberly Ann
Cobos-Cawthorne
Mayor
(iii) The meeting of the governing body of Lessee a t which the Lease Agreement and the Escrow Agreement were approved and authorized t o be executed was duly called, regularly convened and attended throughout by the requisite majority of the members thereof or by other appropriate official approval, and the action approving the Lease Agreement and the Escrow Agreement and au thorizing the execution thereof has not been altered or rescinded. Attached hereto is a true and correct copy of the resolution or other documents constituting such official action, together with notice of public hearing.
(iv) Since June 30, 2021 (date of Lessee’s last aud ited financial statements), Lessee has not entered into any direct or contingent bond debt , lease, installment purchase or loan obligation, other than those listed below:
• ______________________________
• ______________________________
Exhibit F-2
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(v) The correct billing address for Rental Payments is as follows:
City of Montebello
1600 W. Beverly Boulevard
Montebello, CA 90640
Attention: ________________
IN WITNESS WHEREOF, I have duly executed this Certificate on behalf of the Lessee.
January __, 2023
By:
Name: Christopher Jimenez
Title: City Clerk
Exhibit G-1
129172475v1
EXHIBIT G
[Print on Counsel Letterhead]
OPINION OF LESSEE’S COUNSEL
January __, 2023
Alliance Funding Solutions, Inc.
12520 High Bluff Drive, Suite 345
San Diego, California 92130
Re: Equipment Lease-Purchase Agreement dated as of January __, 2023, between the City of Montebello, as lessee, and Alliance Funding Solutions, Inc., as lessor
Ladies and Gentlemen:
As counsel to the City of Montebello (the “ Lessee ”), I have examined that certain Equipment Lease-Purchase Agreement dated as of Janu ary __, 2023 (the “ Lease Agreement ”), between the Lessee and Alliance Funding Solutions, Inc., as lessor (“ Lessor ”), the Escrow Agreement dated as of January __, 2023, together wi th the form of Certificate of Acceptance and Payment Request (collectively, the “ Escrow Agreement ”), the Installation Agreement dated January __, 2023 (the “Installation Agreement” ), between the Lessee and Alliance Building Solutions, Inc., the proceedings taken by the Governing Body of the Lessee to authorize on behalf of the Lessee the execution and delivery of the Lea se Agreement, the Escrow Agreement and the Installation Agreement, and such other documents and matters of law as I have deemed necessary in connection with the following opinions. The Lease Agreement, the Escrow Agreement and the Installation Agreement are herein collectively refe rred to as the “ Transaction Documents .” Based upon the foregoing examination and upon an ex amination of such other documents and matters of law as we have deemed necessary or appropriate, I am of the opinion that:
1. The Lessee is a political subdivision of the Sta te of California and operates under a Governing Board, and the laws of the State of California with full power and authority to purchase the Equipment and to enter into the Transaction Documents and perform its obligations thereunder.
2. The Transaction Documents have each been duly au thorized, executed, and delivered by the Lessee. Assuming due authorizatio n, execution and delivery thereof by Lessor, the Transaction Documents constitute legal, valid, and binding obligations of the Lessee, enforceable against the Lessee in accordance with their respective terms, subject to any applicable bankruptcy, insolvency, moratorium or other laws or equitable principles affecting the enforcement of creditors’ rights generally.
3. The Equipment to be leased pursuant to the Lease Agreement constitutes personal property and, when subjected to use by the Lessee, will not be a fixture under applicable law.
Exhibit G-2
129172475v1
4. The Lessee has complied with any applicable publ ic bidding requirements and other applicable State of California and federal laws, in cluding [Note to Counsel: reference applicable California energy savings statute], in connection w ith the Transaction Documents and the transactions contemplated thereby. By proper action, the Governing Body of the Lessee authorized the execution and delivery of the Transaction Documents and certain other matters, which actions were duly taken at a meeting that was held in compl iance with all applicable laws relating to the holding of open and public meetings.
5. No litigation or proceeding is pending or, to th e best of my knowledge, threatened to restrain or enjoin the execution, delivery, or p erformance by the Lessee of the Transaction Documents or in any way to contest the validity of the Transaction Documents, to contest or question the creation or existence of the Lessee or the Governing Body of the Lessee or the authority or ability of the Lessee to execute or de liver the Transaction Documents or to comply with or perform its obligations thereunder, or the security interest of Lessor or its assigns, as the case may be, in the Equipment. There is no litigat ion pending or, to the best of my knowledge, threatened seeking to restrain or enjoin the Lessee from annually appropriating sufficient funds to pay the Rental Payments or other amounts contemplated by the Lease Agreement or which would cause a Loss of Use or Occupancy, which would affec t Lessee’s obligations to make payments under the Lease Agreement.
6. The entering into and performance of the Transac tion Documents do not and will not violate any judgment, order, law, or regulation applicable to the Lessee or result in any breach of, or constitute a default under, or result in the creation of any lien, charge, security interest, o r other encumbrance upon any assets of the Lessee or on the Equipment (as such term is defined in the Lease Agreement) pursuant to any indenture, mor tgage, deed of trust, bank loan or credit agreement, or other instrument to which the Lessee is a party or by which it or its assets may be bound. Notwithstanding the foregoing, upon the due and timely filing of a UCC-1, the Lessor will have a perfected security interest in the Equipment.
7. The authorization, execution, delivery and perfo rmance of the Transaction Documents by the Lessee do not require submission t o, approval of, or other action by any governmental authority or agency which action has not been taken and is final and non-appealable.
Capitalized terms used herein shall have the same m eanings set forth in the Lease Agreement. This opinion may be relied upon by Lessor and purchasers and assignees of Lessor’s interests in the Lease Agreement.
Respectfully submitted,
Exhibit H-1
129172475v1
EXHIBIT H
Tax Opinion – Form to be provided by Tax Counsel
[Please provide draft for review.]
Exhibit I-1
129172475v1
EXHIBIT I
INTENTIONALLY OMITTED
Exhibit J-1
129172475v1
EXHIBIT J
Post Issuance Tax Compliance Procedures – Form to be provided by Tax Counsel
Exhibit K-1
129172475v1
EXHIBIT K
ESCROW AGREEMENT
LESSOR:
Alliance Funding Solutions, Inc.
12520 High Bluff Drive, Suite 345
San Diego, California 92130
ESCROW AGENT:
Banc of California
10100 Santa Monica Boulevard, Suite 2500
Los Angeles, California 90067
LESSEE:
City of Montebello
1600 W Beverly Boulevard
Montebello, California 90640
THIS ESCROW AGREEMENT (this “Escrow Agreement”) is made as of January __, 2023, by and among Alliance Funding Solutions, Inc. (“Lessor”), the City of Montebello (“Lessee”), and Banc of California (the “Escrow Agent”).
Lessor and Lessee have heretofore entered into that certain Equipment Lease-Purchase Agreement dated as of January __, 2023 (including all exhibits thereto, the “Lease Agreement”).
The Lease Agreement contemplates that Lessor will d eposit with the Escrow Agent the amount of $19,295,796.00 (the “Deposit Amount”), for deposit into the escrow fund (the “Escrow Fund”), to be held in escrow by the Escrow Agent and applied on the express terms and conditions set forth herein. Such deposit into the Escrow Fun d, together with all interest and additions received with respect thereto, is to be applied fro m time to time to pay the vendor(s) or manufacturer(s) of the Equipment (as defined in the Lease Agreement) its invoice cost (a portion of which may, if required, be paid prior to final a cceptance of the Equipment by Lessee) and to pay certain costs of entering into the Lease Agreem ent. The Escrow Agent shall have no responsibility to review the purpose of any disburs ement. Lessee has granted to Lessor a first priority and perfected lien on and security interest in the Escrow Fund and any all proceeds, interest and other earnings thereon and investments therein to the Lessor by virtue of the execution of this Escrow Agreement and the Lease Agreement without th e need for any additional filings or financing statements.
The parties desire to set forth the terms on which the escrow is to be created and to establish the rights and responsibilities of the parties hereto.
NOW, THEREFORE, the parties agree as follows:
1. The Escrow Agent hereby agrees to serve as escrow a gent upon the terms and conditions set forth herein.
2. There is hereby created a special account to be kno wn as the “City of Montebello Escrow Fund” (the “Escrow Fund”) to be held in trust by the Escrow Agent for the purposes stated herein, for the benefit of Lessor and Lessee, to be held, disbursed and returned in accordance with the terms hereof.
Exhibit K-2
129172475v1
To the limited extent required to perfect the first , priority security interest granted by Lessee to Lessor in the cash and negotiable instrum ents from time to time held in the Escrow Fund, Lessor hereby appoints the Escrow Agen t as its security agent, and the Escrow Agent hereby accepts the appointment as secu rity agent, and agrees to hold physical possession of such cash and negotiable instruments on behalf of Lessor.
3. On the Commencement Date (as defined in the Lease A greement), Lessor shall deposit with the Escrow Agent the amount of the Deposit Amount to be held by the Escrow Agent on the express terms and conditions set forth herei n. The Escrow Agent agrees to accept the deposit of the Deposit Amount by Lessor with the Escrow Agent, and further agrees to hold the amount so deposited together with all inte rest and other additions received with respect thereto in escrow on the express terms and conditions set forth herein.
4. The Escrow Agent shall at all times segregate the Escrow Fund into an account maintained for that express purpose, which shall be clearly id entified on the books and records of the Escrow Agent as being held in its capacity as Escrow Agent. Deposits held in the Escrow Fund from time to time shall be held or registered in the name of the Escrow Agent (or its nominee).
4. Lessee hereby directs the Escrow Agent to invest the cash held in the Escrow Fund from time to time in a Banc of California non-interest b earing demand deposit account with no fees or costs or, in the event such fund is not at the time available, such other investments as Lessee may specify in writing, to the extent the same are at the time legal for investment of the funds being invested. No investment shall b e made that would cause the Lease Agreement to be deemed to be an arbitrage bond with in the meaning of Section 148(a) of the Internal Revenue Code of 1986, as amended.
5. Lessor and Lessee hereby authorize the Escrow Ag ent to take the following actions with respect to the Escrow Fund:
a. From time to time, the Escrow Agent shall pay vi a wire transfer the vendor or manufacturer of the Equipment payments then due and payable, or reimburse Lessee for amounts that it has paid to the vendor or manufacturer of the Equipment, upon receipt of the following: (a) a duly executed Certificate of Acceptance and Payment Request in the form attached as Exhibit A h ereto executed by the Lessee and approved for payment by the Lessor, (b) the ven dor(s) or manufacturer(s) invoice(s) specifying the acquisition price of the Equipment described in the requisition request, and (c) any additional documen tation required by Lessor.
Escrow Agent will rely solely upon a duly executed Certificate of Acceptance and Payment Request in the form attached as Exhibit A h ereto executed by the Lessor and Lessee in order to disburse funds within 3 business days of receipt, and Escrow Agent shall make the payments described in such document without further inquiry.
Without limiting the foregoing, Lessor shall not be required to approve any such payment unless and until Lessee shall have provided or caused to be provided to Lessor (i) certificates of insurance evidencing cov erage in accordance with the Lease Agreement and satisfactory to Lessor; and (ii ) payment and performance bonds naming Lessor and its successors and assigns as an additional obligee and
Exhibit K-3
129172475v1
issued by a surety company rated “A” or better by AM Best in form and substance satisfactory to Lessor. Further, Lessee agrees with Lessor that no moneys shall be disbursed from the Escrow Fund until Lessee has pro vided to Lessor evidence of payment of the portion of costs of the Equipment to be paid by Lessee from its own funds pursuant to Article 8 of the Lease Agreement.
b. If Lessor provides to the Escrow Agent (with a c opy to Lessee) written notice of the occurrence of an Event of Default by Lessee, the Escrow Agent shall thereupon remit to Lessor the entire balance of the Escrow Fu nd pursuant to written instructions provided by Lessor to Escrow Agent.
c. Upon receipt by the Escrow Agent of a duly execu ted Certificate of Acceptance and Payment Request identified as the final such request, the remaining moneys in the Escrow Fund shall, first be applied to all reasonable fees and expenses incurred by the Escrow Agent, if applicable, in connection h erewith as evidenced by its statement forwarded to Lessor and Lessee; and second, be paid to Lessor for application on any Rental Payment Date to all of t he remaining Rental Payments due and owing in the succeeding twelve (12) months and any remaining amounts shall be applied by the Lessor as prepayment to the remaining principal balance owing under the Lease Agreement in inverse order of Rental Payment Dates, unless Lessor directs that payment of such amount be made in such other manner directed by Lessor that, in the opinion of nationally recogn ized counsel in the area of tax exempt municipal obligations satisfactory to Lessor , will not adversely affect the exclusion of the interest components of Rental Paym ents from gross income for federal income tax purposes. If any such amount is used to prepay principal, the Payment Schedule attached to the Lease Agreement will be revised accordingly as specified by Lessor. Notwithstanding the foregoing, in no event shall this Section 5(c) apply except in the event of a full and final prepayment of the Equipment according to the Rental Payments set forth in the Payment Schedule attached to the Lease Agreement. For sake of clarity, there shall be no distribution of any moneys contained in the Escrow Fund for any partial prepayment for Rental Payments.
6. The Escrow Agent shall have no liability for act ing upon any written instruction presented by Lessee and/or Lessor in connection with this Escrow Agreement that the Escrow Agent in good faith believes to be genuine. Furthermore, the Escrow Agent shall not be liable for any act or omission in connection with this Escrow Agreement except for its own gross negligence, willful misconduct, or bad faith. The Escrow Agent shall not be liable for any loss or diminution in value of the Escrow Fund as a result of the investments made pursuant to Section 4.
7. To the extent authorized by law, Lessee hereby a gree to indemnify and save the Escrow Agent harmless against any liabilities that it may incur in the exercise and performance of its powers and duties hereunder and that are not due to the Escrow Agent’s gross negligence or willful misconduct. No indemnification will be made under this Section or elsewhere in this Escrow Agreement for damages arising solely out of gross negligence, willful misconduct, or bad faith by the Escrow Agent, its o fficers, agents, employees, successors or assigns.
Exhibit K-4
129172475v1
8. The Escrow Agent may at any time resign by givin g at least 30 days’ prior written notice to Lessee and Lessor, but such resignation shall not take effect until the appointment of the successor Escrow Agent, with such appointment to ta ke place not later than 90 days after Escrow Agent’s resignation If such appointment doe s not timely occur, Escrow Agent shall be entitled to file a suit in interpleader in Orange County, California, and the Lessee agree to indemnify Escrow Agent for all costs (including and not limited to attorneys’ fees) arising out of or relating to such action in interp leader. The substitution of another bank or trust company to act as Escrow Agent under this Escrow Agreement may occur by written agreement of Lessor and Lessee. In additio n, the Escrow Agent may be removed at any time, with or without cause, by instrument in writing executed by Lessor and Lessee.
Such notice shall set forth the effective date of the removal. In the event of any resignation or removal of the Escrow Agent, a successor Escrow Agent shall be appointed by an instrument in writing executed by Lessor and Lessee. Such successor Escrow Agent shall indicate its acceptance of such appointment by an instrument in writing delivered to Lessor, Lessee and the predecessor Escrow Agent.
Upon the effective date of resignation or removal, the Escrow Agent will transfer the Escrow Fund then held by it to the successor Escrow Agent selected by Lessor and Lessee.
9. This Escrow Agreement shall terminate upon recei pt by the Escrow Agent of the written notice from Lessor specified in Section 5(b) or Section 5(c) hereof.
10. All notices hereunder shall be in writing, sent by certified mail, return receipt requested, or by mutually recognized overnight carrier addressed to the other party at its respective address shown on page 1 of this Escrow Agreement or at such other address as such party shall from time to time designate in writing to the other parties; and shall be effective on the date or receipt.
11. This Escrow Agreement shall inure to the benefi t of and shall be binding upon the parties hereto and their respective successors and assigns. No rights or obligations of the Escrow Agent under this Escrow Agreement may be assigned without the prior written consent of Lessor and Lessee.
12. This Escrow Agreement constitutes the entire ag reement between the parties hereto with respect to the subject matter hereof, and no waiver , consent, modification, or change of terms hereof shall bind any party unless in writing signed by all parties.
13. The Escrow Agent may employ agents, attorneys a nd accountants in connection with its duties hereunder and shall not be liable for any ac tion taken or omitted in good faith in accordance with the advice of counsel, accountants, or other skilled persons.
14. This Escrow Agreement shall be governed by and be construed and interpreted in accordance with the internal laws of the State of California.
15. This Escrow Agreement may be executed in severa l counterparts, each of which so executed will be an original. In addition, the par ties agree that the transaction described herein may be conducted and related documents may b e stored by electronic means.
Copies, telecopies, facsimiles, electronic files and other reproductions of original executed
Exhibit K-5
129172475v1
documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law.
[Remainder of page intentionally left blank]
Exhibit K-6
129172475v1
IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be duly executed as of the day and year first above set forth.
LESSOR: ALLIANCE FUNDING SOLUTIONS,
INC.
By:
Name: Brad Chapman
Title: President
LESSEE: CITY OF MONTEBELLO
By:
Name: Kimberly Ann Cobos-Cawthorne
Title: Mayor
ESCROW AGENT ESCROW AGENT: BANC OF CALIFORNIA
By:
Name: Jacqueline Russell
Title: Senior Director, Relationship Manager
C
ERTIFICATE OF ACCEPTANCE AND PAYMENT REQUEST 1
129172475v1
EXHIBIT A TO ESCROW AGREEMENT
CERTIFICATE OF ACCEPTANCE AND PAYMENT REQUEST
The following payment request is directed to Banc of California (the “ Escrow Agent ”), as escrow agent under that certain Escrow Agreement dated as of January __, 2023 (the “ Escrow Agreement ”), between the City of Montebello (“ Lessee ”), Alliance Funding Solutions, Inc. (together with its successors and assigns, “ Lessor ”), and the Escrow Agent.
The Escrow Agent is hereby requested to pay from th e Escrow Fund established and maintained under the Escrow Agreement the amount set forth bel ow to the named payee(s). The amount shown is due and payable under a purchase order or contract (or has been paid by and not previously reimbursed to Lessee). The equipment described below is part or all of the Equipment leased pursuant to that certain Equipment Lease-Pur chase Agreement and Equipment Schedule both dated January __, 2023 (the “ Lease Agreement ”), between Lessor and Lessee:
QUANTITY
DESCRIPTION OF
UNITS OF
EQUIPMENT AMOUNT PAYEE
Lessee hereby certifies and represents to and agrees with Lessor as follows with respect to the Equipment described above: (i) except for the amounts due and owing to Lessor pursuant to Lessor’s mobilization, engineering, predevelopment, bonding and insurance invoice, the amount to be disbursed is not being paid in advance of the time, if any, fixed for any payment, and does not include any retained percentage entitled to be retained by Lessee at this time; (ii) no amount requested to be disbursed was included in any payme nt request previously filed with the Escrow Agent for which payment was actually made by the Es crow Agent; (iii) Lessee has made such investigation of such sources of information as are deemed necessary and is of the opinion that the applicable portion of the Equipment and related wor k has been fully paid for, and no claim or claims exist against the Lessee or the Vendor out o f which a lien based on furnishing labor or material exists or might arise; (iv) acquisition an d installation of the applicable portion of the Equipment for which payment is being requested has been completed in accordance with plans and specifications approved by the Lessee and in accordance with the terms and conditions of the Installation Agreement dated January __, 2023 (the “Installation Agreement”), between Lessee and Alliance Building Solutions, Inc., and said applicable portion of the Equipment is suitable and sufficient for the expected uses thereof, however, this statement is made without prejudice to any rights against third parties which exist at the dat e hereof or which may subsequently come into being; (v) the amount remaining in the Escrow Fund will, after payment of the amount requested, be sufficient to pay the remaining costs of the Equ ipment; (vi) a present need exists for the Equipment, which need is not temporary or expected to diminish in the near future; (vii) the Equipment is essential to and will be used by Lesse e only for the purpose of performing one or more governmental functions of Lessee consistent wi th the permissible scope of Lessee’s authority; (viii) the estimated useful life of the Equipment based upon the manufacturer’s
C
ERTIFICATE OF ACCEPTANCE AND PAYMENT REQUEST 2
129172475v1
representations and Lessee’s projected needs is not less than the term of the Lease Agreement; (ix) Lessee has conducted such inspection and/or testing of the Equipment as it deems necessary and appropriate and hereby acknowledges that it accepts the Equipment for all purposes as of the date of this Certificate; (x) the Equipment is covered b y insurance in the types and amounts required by the Lease Agreement; (xi) no Event of Default, as such term is defined in the Lease Agreement, and no event that with the giving of notice or laps e of time or both, would become an Event of Default, has occurred and is continuing on the date hereof; and (xii) sufficient funds have been appropriated by Lessee for the payment of all renta l payments due under the Lease Agreement during Lessee’s current Fiscal Year.
Based on the foregoing, the Escrow Agent is hereby authorized and directed to fund the acquisition of the Equipment set forth above by pay ing, or causing to be paid, the manufacturer(s)/vendor(s) the amounts set forth on the attached invoices from the Escrow Fund held under the Escrow Agreement in accordance with its terms.
The following documents are attached hereto and mad e a part hereof: (a) Original Invoice(s) and (b) lien waivers, if applicable.
IF REQUEST IS FOR REIMBURSEMENT, CHECK HERE . Lessee paid an invoice prior to the Commencement Date identified in the Le ase Agreement and is requesting reimbursement for such payment. A copy of evidence of such payment together with a copy of Lessee’s declaration of official intent and other e vidence required by Lessor prior to Lessor’s approval hereof that Lessee has satisfied the requi rements for reimbursement set forth in Treas.
Reg. 1.150-2 is hereby attached. Lessor’s approval hereof shall evidence that Lessee has delivered to Lessor such required documentation.
[Remainder of page intentionally left blank]
C
ERTIFICATE OF ACCEPTANCE AND PAYMENT REQUEST 3
129172475v1
IF REQUEST IS FINAL REQUEST, CHECK HERE ___. Lessee hereby certifies that (a) all of the Equipment described in the Lease Agreement has been received in good condition and has been installed in accordance with the Installation Agreement, (b) such Equipment is accepted “AS- IS, WHERE-IS”; (c) Lessee has inspected the Equipme nt, and determined that it is in good working order and complies with all purchase orders, contracts and specifications; (d) Lessee has fully and satisfactorily performed all covenants and conditions to be performed by it as of this date under the Lease Agreement with regard to such Equipment; (e) Lessee waives any right to revoke its acceptance; and (f) the Equipment is fully insu red in accordance with the Lease Agreement.
This certificate is made without prejudice to any rights against third parties which may exist as of the date hereof or which may subsequently come into being.
Date: ______________
Approved for Payment:
_____________, as Lessor CITY OF MONTEBELLO, as Les see
By:
By:
Name: Name: Kimberly Ann Cobos-Cawthorne
Title: Title: Mayor
SCHEDULE A TO ESCROW AGREEMENT
129172475v1
SCHEDULE A TO ESCROW AGREEMENT:
NOTICE AND ACKNOWLEDGEMENT OF
ASSIGNMENT OF ESCROW AGREEMENT
Alliance Funding Solutions, Inc. (“ Lessor ”), City of Montebello (“ Lessee ”), and Banc of California (“ Escrow Agent ”) have entered into an Escrow Agreement dated as o f January __, 2023 (the “ Escrow Agreement ”), pursuant to which Lessor, or its Assignee (as d efined below), has deposited cash into the Escrow Fund established thereunder, which funds are to be used by Lessee to acquire certain Equipment.
Escrow Agent is hereby notified that Lessor has ass igned all of its right, title, and interest in and to the Escrow Agreement to Capital One Public Fundi ng, LLC. (“ Assignee ”), including, in particular, but without limitation, Lessor’s security interest in the Escrow Fund and Lessor’s right to approve all payment requests submitted by Lessee.
Any and all correspondence and notices to be delive red by Escrow Agent to Assignee should be provided to Assignee as set for the below:
Capital One Public Funding, LLC
Address
Attention:
Email:
Date: January __, 2023
LESSOR: ALLIANCE FUNDING SOLUTIONS,
INC.
By:
Name: Brad Chapman
Title: President
Acknowledged:
ESCROW AGENT: BANC OF CALIFORNIA
By:
Name: Jacqueline Russell
Title: Senior Director, Relationship Manager
Exhibit L-1
129172475v1
EXHIBIT L
RESOLUTION AND AFFIDAVIT OF PUBLICATION FOR
NOTICE OF PUBLIC HEARING– TO BE PROVIDED BY
LESSEE
Exhibit M-1
129172475v1
EXHIBIT M
IRS FORM 8038-G
[To be prepared and filed by Tax Counsel--Please provide draft for review.]
Exhibit N-1
129172475v1
EXHIBIT N
CLOSING MEMORANDUM/PAYMENT PROCEEDS DIRECTION
$19,295,796.00 LEASE FOR ENERGY CONSERVATION EQUIPMENT
PURSUANT TO EQUIPMENT LEASE -PURCHASE AGREEMENT AND EQUIPMENT SCHEDULE THERETO BOTH DATED JANUARY __, 2023
BETWEEN CITY OF MONTEBELLO , AS LESSEE , AND
ALLIANCE FUNDING SOLUTIONS , INC ., AS LESSOR
Pre-Closing: Pre-Closing will be held at the Lessee’s convenien ce, on or before January __, 2023. All documents will be executed and two originals will be overnighted to Alliance Funding Solutions, Inc., Attn.: Brad Chapman 12520 High Blu ff Drive, Suite 345, San Diego, California 92130, for delivery no later than 9:00 am on the mo rning of January __, 2023 and held in trust until such time as the wires and original documents are released by the Parties.
Closing: (1) By wire transfer, on the morning of January __, 2023, the Lessor shall wire or cause to be wired the Total Lease Proceeds in the amount of $19,295,796 to the Escrow Agent, as follows:
Bank Name: Banc of California, N.A.
ABA No: _____________
Account No _____________
Account Name: _____________
(2) After receipt of the wire from Lessor referenced above, on January __, 2023, the Escrow Agent is authorized by Lessee to transfer via wire the Issuance Costs in the amount of $25,000 to Lessor as follows:
Bank Name: American River Bank
ABA Number: 121140263
Account Number: 310045298
Account Name: Alliance Funding Solutions, Inc.
Alliance Funding Solutions, Inc. will confirm disbu rsement of funds to the Lessee’s escrow account and then release all of the original docume nts held in trust to its assignee and forward a copy to the Lessee.
Exhibit N-2
129172475v1
Sources and Uses of Funds:
Principal Amount of Lease $19,295,796.00
TOTAL SOURCES $19,295,796.00
Total Equipment Cost: $18,797,327.00
Issuance Costs: 25,000.00
TOTAL LEASE PROCEEDS $19,295,796.00
Attest:
CITY OF MONTEBELLO
By: ____________________________
Name: Kimberly Ann Cobos-Cawthorne
Title: Mayor
12520 High Bluff Drive Suite 345, San Diego, CA 92130 M&V Agreement www.absenergy.com P a g e | 1
Contractor’s License # 1008135
MEASUREMENT AND VERIFICATION AGREEMENT
FOR
CITY OF MONTEBELLO
SCOPE OF SERVICES
TERMS AND CONDITIONS
ATTACHMENTS:
Attachment 1 – Guaranteed Savings Measurement & Verification • Savings Guarantee
• Measurement and Verification Methods
• Selected Measurement and Verification Options
• IPMVP Option A M&V Plan
• IPMVP Option C M&V Plan
Attachment 2 – Utility Baseline Summary
Attachment 3 – Energy Efficiency and Renewable Project Cashflow
12520 High Bluff Drive Suite 345, San Diego, CA 92130 M&V Agreement www.absenergy.com P a g e | 2
Contractor’s License # 1008135
MEASUREMENT & VERIFICATION AGREEMENT
This Measurement and Verification (“M&V”) Agreement (“Agreement”) dated / / (“Effective Date”) is made by and between:
and
SCOPE OF SERVICES
Energy Savings Measurement & Verification Service:
“ABS” will provide measurement and verification services of the energy savings associated with “Purchaser” Energy Retrofit and Renewable Installation, as described in “Scope of Work ” attached to the Installation Agreement . Energy Savings M&V reports will be provided to the “Purchaser” on an annual basis for the term specified below.
Term:
This Service Agreement shall commence upon the completion and acceptance of the Purchaser energy retrofit and renewable energy installation project and receipt of final payment for the Contract and shall continue for an initial term of (1) year. The “Purchaser” may elect to enter into further extended terms upon written notice provided to ABS not less than thirty (30) days prior to termination of the initial term. If the “Purchaser” fails to provide ABS with a written notice of extension prior to the end of the initial term or any subsequent extensions, the M&V Agreement shall be considered terminated. Once terminated, the M&V Agreement cannot be renewed. The “Purchaser” may terminate this service agreement at any time with a (30) day written notice.
However, termination of this agreement will void any savings guarantee associated with this project.
Charges:
This Agreement shall be billed once per year is due and payable 30-days after “Purchaser’s” receipt of invoice. The annual Service Agreement charge is $0 for the first year, $15,000 for the second year, $20,000 for the third year, $25,000 for the fourth year and escalated at 4% annually for every subsequent year thereafter. This rate does not include taxes.
City of Montebello
(“Purchaser”) with its principal place of business at
1600 W Beverly Blvd, Montebello, CA 90640
Alliance Building Solutions, Inc.
(“ABS”) with its principal place of business at
12520 High Bluff Drive, Ste 345, San Diego, CA 92130
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TERMS AND CONDITIONS
I. General Provisions:
I.1 Unless stated otherwise, the services provided under this Agreement shall be provided during “ABS” normal business hours. Normal business hours are Monday through Friday, 7:00AM to 4:00PM, excluding holidays. “ABS” will coordinate with the “Purchaser” so that any variations in these normal business hours necessitated by “Purchaser” Schedules can be accommodated.
I.2 The “Purchaser” shall provide reasonable means of access to the equipment being measured or verified. “ABS” shall not be responsible for any removal, replacement, or refinishing of the building structure, if required to gain access to the equipment. “ABS” shall be permitted to start and stop all equipment necessary to perform the services herein described as arranged with the “Purchaser’s” representative. “ABS” will obtain agreement from the “Purchaser’s” representative prior to any starting or stopping of equipment.
I.3 This Agreement shall supersede any previous Measurement and Verification Agreements accepted and approved by the “Purchaser” and “ABS.”
I.4 This Agreement, when accepted in writing by the “Purchaser” and approved by an authorized “ABS” representative, shall constitute the entire Agreement between the two (2) parties.
II. Charges:
II.1 For services not covered by this Agreement but performed by “ABS” upon the “Purchaser’s” prior written authorization, the “Purchaser” agrees to pay “ABS”’s invoice(s) 30 days after receipt of invoice. Failure to pay the invoice within 30 days after receipt will result in a 10% late payment penalty and failure to pay within 60 days will result in forfeiture of the entire agreement.
II.2 If emergency service is requested by the “Purchaser” and inspection does not reveal any defect for which “ABS” is liable under this Agreement, the “Purchaser” will be charged at “ABS”’s current emergency charge rates.
III. Limitations of Liability:
III.1 Neither party shall be liable for any loss, delay, injury, or damage that may be caused by circumstances beyond its control including, but not restricted to; acts of God, war, civil commotion, acts of government, fire, theft, corrosion, floods, lightning strikes, freezes, strikes, lockouts, di fferences with workmen, riots, explosions, quarantine restrictions, delays in transportation, shortage of vehicles, fuel, labor or materials, or malicious mischief. IN NO
EVENT, SHALL EITHER PARTY BE LIABLE FOR BUSINESS INTERRUPTION, LOSSE S, CONSEQUENTIAL , INDIRECT, SPECIAL OR SPECULATIVE DAMAGES.
III.2 “ABS” shall not be required to make safety tests, install new devices, or make modifications to any equipment to comply with recommendations or directives of insurance companies, governmental bodies, or for other reasons.
III.3 Section removed
III.4 “ABS” warrants that for equipment furnished and/or installed but NOT manufactured by “ABS”, “ABS” will extend the same warranty and terms and conditions, which “ABS” received from the manufacturer of said equipment.
III.5 This agreement pre -supposes that all equipment is in satisfactory working order. Should any equipment be in need of repair, “ABS” will have ninety (90) days to make such repair. If the “Purchaser” does not authorize “ABS” to make the repairs or if the “Purchaser” does not have the work performed, the equipment will be eliminated from coverage and the Agreement saving will be adjusted. Maintenance of existing equipment and systems is the responsibility of the “Purchaser”. Failure to properly maintain equipment and systems can result in reduced energy efficiency and may necessitate a baseline energy adjustment III.6 The amount of any present or future sales, use, occupancy excise, or other tax (federal, state or local) which “ABS” hereafter shall be obligated to pay, either on its own behalf or on the behalf of the “Purchaser” (shall reasonably assist “ABS” in determining the applicable requirements, it shall be “ABS”’s sole responsibility for determining and complying with all applicable laws, regulations and standards.) or otherwise, with respect to the services covered by this Agreement, shall be paid by the “Purchaser”.
III.7 If the equipment or software included under this Agreement is altered, modified, or changed by a party other than “ABS”, this Agreement shall be modified to incorporate such changes the Agreement price and/or Savings shall be adjusted accordingly.
III.8 Following twelve (12) months of service or any time thereafter, if individual item(s) cannot, in “ABS”’s opinion, be properly repaired on-site because of excessive wear, deterioration or an Act of God that is out of “ABS” control. “ABS” may withdraw the item(s) from coverage upon ninety (90) days prior written notice. Energy savings may be adjusted accordingly.
III.9 This agreement shall be governed by, construed, and enforced in accordance with the laws of the State of California.
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IV. Miscellaneous Provisions:
IV.1 The services provided hereunder may occur on active “Purchaser” sites. As such, “ABS” shall ensure that its services on and around the “Purchaser” site comply with all applicable laws, regulations and standards including but not limited t o, the fingerprinting requirements and any other legal requirements which maybe applicable to “ABS”’s activities on or about the “Purchaser” sites. The “Purchaser” shall reasonably assist “ABS” in determining the applicable laws, regulations and stands. If, at any time prior to completion of the Scope of Services, the “Purchaser” determines that there possibly might be more than limited contact between “ABS” and any minor - aged Purchaser student, the “Purchaser” may, in its sole discretion, require that “ABS” complies with the requirements of Education Code Section 45125.1, regardless of whether such requirements are otherwise applicable. In such event, “ABS” at its sole cost and expense, and without additional c ompensation from “Purchaser”, shall comply with all California Department of Justice guidelines and requirements with respect to fingerprinting of “ABS” officers, employees, agents, or other representatives who will or might be present on or at the “Purchaser” facility.
IV.2 Dispute Resolution:
IV.2.1 Disputes: This section shall apply to any disputes arising under our related to this Agreement (whether arising in contract, tort or otherwise, and whether arising at law or in equity including (a) any dispute regarding the performance, validity or enforceability of any provision of this Agreement or whether any party is in compliance with, or breach or, any provisions of this Agreement and (b) the applicability of this Section to a particular dispute. Any dispute to whi ch this section applies is referred to herein as a “Dispute”
IV.2.2 Negotiation to Resolve Disputes: If a dispute arises, the Parties shall attempt to resolve such dispute through the following procedure.
IV.2.2.1 First, the representatives of each of the Parties shall promptly meet (whether by phone or in person) in a good faith attempt to resolve the Dispute; IV.2.2.2 Second, if the Dispute is still unresolved after 20 days following the commencement of the negotiations described in Section 4.2.2.1 then a designated executive officer to each party shall meet (whether by phone or in person) in a good faith attempt to resolve the Dispute;
IV.2.2.3 Third, if the Dispute is still unresolved after 10 days following the commencement of the negotiations described in Sectio n 4.2.2.2, then either Party may submit such Dispute to litigation;
IV.2.2.4 The venue for any Dispute arising from or relating to this Agreement that is adjudicated pursuant to this Section 4.2.2.4 shall be arbitrated in Los Angeles, California. Any Dispute arising from or relating to this Agreement that is adjudicated pursuant to this Section
4.2.2.4 shall be arbitrated in Los Angeles, California. The arbitration shall be administered by JAMS in accordance with its Comprehensive Arbitration Rules and Procedures, and judgment on any award may be entered in any court of competent jurisdiction. If the Parties agree, a mediator may be consulted prior to arbitration; IV.2.2.5 Pending a final resolution of a Dispute, the Parties shall each proceed diligently and faithfully with performance of their respective obligations under this Agreement.
IV.3 Indemnification:
The Parties hereto agree to defend, indemnify, and hold harmless the other Party, it’s employees, agents, officials, officers and directors from any and all liabilities, claims, expenses, losses or damages, including attorney’s fees which may arise in connection with the work herein specified and which are caused in whole or in part by the negligent act or omi ssion of the indemnifying Party. To the extent it may lawfully do so, the Parties hereby indemnify, defend (with counsel of it choosing), and holds harmless the other party and its affiliates, directors, representatives, agents, officers, employees and volunteers from and against any and all liability or claim of liability, loss or expense, including defense costs and legal fees and claims for damages of whatsoever character, nature and kind, whether directly or indirectly arising from any third party actions from injury to or death of persons, and damage to or loss of property to the extent caused by or arising out the connected with an act or omission of the indemnifying party, or an agent, invitee, guest, employee, or anyone in, on or about he “Purchaser” sites, including, but not limited to, liability, expense, and claims for: bodily injury, death, personal injury, or property damage caused by negligence, creation or maintenance of a dangerous condition of property, breach of express or implied warranty of product, defectiveness of product, or intention al infliction of harm, including any workers’ compensation suites, liability, or expense, arising from or connected with services performed by, or on behalf of the indemnifying party, by any person pursuant to this Agreement; nonpayment for labor materials , appliances, teams or power, performed on, or furnished or contributed to the “Purchaser” sites. Notwithstanding
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the above, neither party shall be required to defend, indemnify and hold harmless the other for its own negligent acts and omissions’ or willful misconduct. It is the intent of the Parties that were negligence is determined to have been joint or contributory, principles of comparative negligence will be followed, and each Party shall bear the proportionate cost of any loss damage, expense or liability attributable to that Party’s negligence.
V. Occupational Safety and Health: The Parties hereto agree to notify each other immediately upon becoming aware of any alleged violations of, the Occupational Safety and Hea lth Act (OSHA) relating in any way to the project or project site.
VI. Audits: In accordance with Government Code Section 8546.7, the State has the right to examine, review, audit and/or copy the Records of the work during the three (3) year period following final payment to the Contracto r pursuant to the Contract. In addition, the “Purchaser” hereby has the right to examine, review, audit and/or copy the Records of the work during the three (3) year period following final payment to the Contractor pursuant to the Contract. Therefore, th e Contractor shall make the Project Records available at its offices at all reasonable time during the performance of the Work and for three (3) years from the date of final completion or filing of a Notice of Completion for the Project, whichever is later. However, if any audit is commenced within such three (3) year period, the Contractor shall make the Project Records available at all reasonable times until proceedings related to such audit are complete and all statutes of limitations related thereto ha ve expired. In the event the “Purchaser” notifies the Contractor that federal funds have been used in connection with Project, the Contractor shall retain and make available the Project Records for such longer period as may be required by federal law.
VII. Entire Agreement: This Agreement, upon acceptance, shall constitute the entire agreement between the parties and supersedes any prior representations or understandings.
VIII. Changes: No change or modification of any of the terms and conditions stated herein shall be binding upon either Party unless accepted by both Parties in writing.
IX. Severability: if one or more of the provisions of this Agreement are held to be unenforceable under laws, such provisions(s) shall be excluded from these terms and conditions and the remaining terms and conditions shall be interpreted as if such provision were so excl uded and shall be enforced in accordance to their terms and conditions.
X. Counterparts: This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrumen t. A signature on a copy of this agreement received by either party by facsi mile or portable document forma t (PDF) is binding upon the other party as an original. The parties shall treat a photocopy of such facsimile as a duplicate original.
XI. Assignment: “ABS” retains the right to assign its rights and obligations of the Agreement with written consent of “Purchaser”.
XII. Acknowledgement: Both “ABS” and the “Purchaser” acknowledge having read this Agreement and all contract documents incorporated herein and have executed this agreement on the date written above.
XIII. Approval: Each Party represents that the person that has executed this Agreement on its’ behalf is authorized to do so.
City of Montebello Alliance Building Solutions, Inc.
Signature Signature
Title Title
Date Date
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Attachment 1
Guaranteed Savings Measurement & Verification
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Guaranteed Savings Measurement & Verification
This document contains the Measurement and Verification (M&V) plan for the energy savings related to the Energy Efficiency Measures (EEMs) contained in the Installation Agreement. The following table summarize s the EEMs implemented in these Phases of work.
Site Mechanical
Upgrades
Control
Upgrades
Electrical
Upgrades
Envelope
Upgrades
Air
Disinfection
Systems
Misc.
Upgrades
Renewable
Energy
Systems
Aquatic Center X X X
City Hall X X X X
Montebello
Golf Course X
Transportation
Facility X X X X X
Youth Center X
City-Wide X
For each EEM, a specific M&V plan is submitted to provide a comprehensive overall plan for the City of Montebello. Energy savings shall be compared to the Utility Baseline Summary, as shown in Attachment 2. Each EEM’s M&V Plan provides:
• A description of how the savings shall be verified.
• The selection of the specific protocol of verification of savings. • The requirements for measurement or other means to establish savings.
ABS is responsible for pre-retrofit measurements, energy savings calculations, equipment installation, and required post retrofit verification as outlined herein. Purchaser agrees to operate and maintain all equipment installed. Proper operation and maintenance of equipment and systems is critical to long-term achievement of energy savings.
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Savings Guarantee
ABS warrants that Purchaser shall realize total annual project savings (utility savings, operational savings and capital cost avoidance) in excess of the annual lease payments. The effective date will begin on the date of final acceptance of the Installation project and receipt of final payment for the associated Installation Contract. The total project savings will exceed the installation contract amount and M&V payments associated with this agreement during the co urse of the useful life of the installed equipment. ABS agrees to complete the M&V Report on an annual basis and deliver to the Purchaser within one hundred and twenty (120) days of the anniversary date of final acceptance and annually thereafter. Project savings that are verified during the course of construction will be applied to the 1st year guaranteed project savings.
If the annual M&V Report demonstrates that the project will achie ve one hundred percent (100%) or more of the Guaranteed Project Annual Savings, then ABS shall have satisfied its energy performance guarantee obligation and the Purchaser shall accept the Annual M&V Report.
In the event that an annual M&V Report savings v alue (including any excess savings from previous years) does not meet the Guaranteed Project Savings in accordance with the M&V Plan, then ABS shall repair, replace, or substitute the E EM that is not performing at the required level, as identified in the M&V Report. Following corrective action, ABS shall re-perform the relevant M&V work for the affected E EM(s) and amend or supplement the M&V Report. If the sum of the E EMs indicates that the Guaranteed Project Savings are met or exceeded, then no further remedy shall be required.
If, after the opportunity to make corrections, the M&V Report, as amended, indicates that verified savings are less than the Guaranteed Project Savings as shown in the Savings Summary, then ABS shall pay the Purchaser the shortfall amount. However, under no circumstances will the amount(s) paid for the total of the energy savings shortfalls exceed the total lease payments associated with this contract.
The Purchaser agrees that project savings, which exceed the guaranteed amount in any one (1) year, may be applied to previous or future year’s savings to offset an energy savings shortfall. The savings guarantee will remain in effect for the term of t his agreement. Cancellation of this agreement will result in the termination of the savings guarantee.
The Utility Baseline Summary, as shown in Attachment 2, may be modified over the course of the Guarantee Period to adjust for changes in utility rates, number of days in utility billing cycle, square footage, energy using equipment, building occupancy and weather. This Guarantee is subject to the Purchaser’s adherence to the Control Parameters for HVAC and Control systems, as documented in the Installation Agreement Attachments. This guarantee assumes the annual utility rate escalator of 6% and annual solar production at 100% of the estimated solar production in kWh.
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Measurement and Verification Methods
Measurement and Verification (M&V) of energy savings is a methodology based on standard industry protocol intended to provide reasonable assurance that energy savings calculated are realized over the term of the contract.
The development of the M&V p lan is based on the International Performance Measurement and Verification Protocol (IPMVP):
Concepts and Options for Determining Energy and Water Savings, Vo lume 1. This plan contains methodology that shall provide verification of the estimated program savings through direct utility billing comparisons, engineering calculations and/or field measurements.
M&V methods can differ based on the type, size and complexity of the project, as well as the availability of data, level of assurance of saving, financing constraints, and energy costs. The M&V methods used for this project are detailed herein and were selected to be the most cost effective while still providing a reasonable assurance of the savings calculations.
IPMVP 2012 Volume 1 provides an overview of the IPMVP Options, as illustrated below:
M&V Option
M&V Methodology Description How Savings Are Calculated
Option A
Retrofit Isolation:
Key Parameter
Measurement
Savings are determined by field measurement of the key performance parameter(s) which define the energy use of the EEM’s affected system(s) and/or the success of the project.
Measurement frequency ranges from short-term to
continuous, depending on the expected variations in the measured parameter, and the length of the reporting period.
Parameters not selected for field measurement are estimated.
Estimates can be based on historical data, manufacturer’s specifications, or engineering judgment. Documentation of the source or justification of the estimated parameter is required.
The plausible savings error arising from estimation rather than measurement is evaluated.
Engineering calculation of baseline and
reporting period ener gy from short-
term or continuous measurements of
key operating parameter(s) and
estimated values. Routine and non -
routine adjustments as required.
Option B
Retrofit Isolation:
All Parameter
Measurement
Savings are determined by field measurement of the energy use of the E EM-affected system. Measurement frequency ranges from short-term to continuous, depending on the expected variations in the savings and the length of the reporting period.
Short-term or Continuous
measurements of baseline and
reporting period energy, and/or
engineering computations using
measurements of proxies of energy use.
Routine and non-routine adjustments as
required.
Option C
Whole Facility
Savings are determined by measuring energy use at the whole facility or sub -facility level. Continuous measurements of the entire facility’s energy use are taken throughout the reporting period.
Analysis of whole facility baseline and
reporting period (utility) meter data.
Routine adjustments as required, using
techniques such as simple comparison
or regression analysis. Non-routine
adjustments as required.
Option D
Calibrated
Simulation
Savings are determined through simulation of the energy use of the whole facility, or of a sub-facility. Simulation routines are demonstrated to adequately model actual energy
performance measured in the facility. This Option usually requires considerable skill in calibrated simulation.
Energy use simulation, calibrated with
hourly or monthly utility billing data.
(Energy end use metering may be used
to help refine input data.)
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Selected Measurement and Verification Options
The below table illustrates the selected IPMVP Options for the EEMs covered under this M&V plan:
Site Mechanical
Upgrades
Control
Upgrades
Electrical
Upgrades
Envelope
Upgrades
Air
Disinfection
Systems
Misc.
Systems
Renewable
Energy
Systems
Aquatic Center A, C A, C A, C
City Hall A, C A, C A, C A, C
Montebello
Golf Course A, C
Transportation
Facility A, C A, C A, C A, C A, C
Youth Center A, C
City-Wide A, C
The particular options selected for each EEM was based on a number of related issues including: EEM complexity, EEM cost, EEM savings, cost of M&V and the ability to accurately determ ine holistic building operations. If more than one option is selected, either option will be considered valid by ABS and the Purchaser.
The baseline and the post -installation energy use depend on various system and e xternal factors, such as utilized setpoints, energy demand, operating hours, occupancy, weather conditions, and energy rates . De velopment of the baseline, post installation consumption, cost avoidances and simple payback for each EEM covered by this M&V plan includes:
• Stipulated Values – These agreed upon values are important in the overall calculations for energy consumption, financial calculations, and operating conditions.
• Developed/Measured Values – These are the values determined by spot or short -term measurement. Values are determined based on a sound engineering approach to variable determination. Both values used for baseline consumption and values to be measured/determined as parts of the post installation are detailed. • Assumptions – Some values that are assumed in order to calculate energy use are necessary in certain circumstances. • Calculations – The necessary calculations for baseline energy usage, costing, and annual savings for evaluating the estimated and actual savings of EEMs.
• Pre-Retrofit Measurements – EEMs may have a section detailing the measurements required prior to the retrofit. These measurements are used to establish the baseline or adjustments required to establish an accurate baseline. • Post Retrofit Measurements – EEMs may have a section that details the measurements required if any after the retrofit is completed. This section is utilized to detail the type of measurements required for verification of the energy savings calculations.
• Adjustments – EEMs may have a section for adjustments. This section includes possible adjustments to the actual Energy Audit Report and energy information, appropriate adjustments to the M&V plan, and adjustments to any savings guarantee.
This section is utilized to anticipate changes neces sary due to field conditions and provide an appropriate response in the verification of actual energy and cost avoidances.
• Commissioning – EEMs may have a section regarding the commissioning process. This provides the detail for how the savings will be ve rified upon project completion, and the type of inspection that will be completed, and the billing method for verified savings. This section is utilized to provide a standard approach for each EEM upon project completion. • ABS will follow the agreed-upon M&V protocols for the measurement period and will prepare post installation reports with supporting documentation for the Purchaser.
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Measurement and Verification Plan
IPMVP Option A: Retrofit Isolation, Key Parameter Measurement For Mechanical System Upgrades
M&V Procedure
This option shall provide for the measurement of at least one variable pre - and post-retrofit with other variables allowed for stipulation. For this retrofit, field data shall be collected which includes, unit counts, unit capacity, nameplate electrical data and efficiency rating for each existing HVAC system.
Stipulated Values
Hours of operation, heating/cooling loads and runtime hours of the existing HVAC systems a re stipulated for purposes of M &V.
Please refer to The Mechanical Systems and Controls Systems Attachment(s) in the Installation Agreement for specific operating hours and runtime hours for each HVAC unit or area. Stipulated values are agreed to by Purchaser.
Adjustments
For this EEM, the following adjustments are allowed for the purposes of Measurement and Verification:
• Addition of new HVAC units and/or extra run time.
Savings Calculations
The calculations for the baseline energy consumption and post retrofit savings shall be completed in accordance with the industry guidelines set forth by IPMVP and methods indicated below. kWh Savings = [(Capacity of Existing HVAC Unit) x (Existing Unit Efficiency) x (Stipulated Load Factor)] – [(Capacity of New HVAC Unit) x (New Unit Efficiency) x (Stipulated Load Factor)] x (Annual Hours of Operation) Dollar Savings = (kWh Savings) x (Average Utility Baseline $/kWh Rate) Operational Savings
The Purchaser will realize maintenance and operational savings resulting from the new system installations, extended warranties, and/or service agreements provided by ABS. The operational savings are based on CEC guidelines and are stipulated and met upon the completed installation of the energy retrofit contract.
Commissioning
Commissioning shall consist of inspections and a final verification report. Inspections shall consist of:
• ABS shall include verification that each new unit is operating as specified in all modes (heat/cool).
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Measurement and Verification Plan
IPMVP Option A: Retrofit Isolation, Key Parameter Measurement For Control System Upgrades
M&V Procedure
This option shall provide for the measurement of at least one variable pre - and post-retrofit with other variables allowed for stipulation. The cooling and heating set points during occupied and unoccupied modes of the HVAC equipment will be verified and documented. For this retrofit, field data shall be collected which includes, unit counts, unit capacity, nameplate electrical data, efficiency rating, operating schedules, cooling and heating temperature setpoints for each HVAC system.
Stipulated Values
Hours of operation, heating/cooling loads and runtime hours of the existing HVAC systems a re stipulated for purposes of M &V.
Please refer to The Mechanical Systems and Controls Systems Attachment(s) in the Installation Agreement for specific operating hours and temperature setpoints. Stipulated values are agreed to by Purchaser.
Adjustments
For this EEM, the following adjustments are allowed for the purposes of Measurement and Verification:
• Addition or subtraction to the conditioned square footage of facilities. • Utility rates, billing days or degree days.
• Equipment changes or modifications.
• Changes in facility usage associated with daily occupancy times, occupancy levels and special events.
Savings Calculations
The calculations for the baseline energy consumption and post retrofit savings shall be completed in accordance with the industry guidelines set forth by IPMVP and methods indicated below. kWh Savings = (Capacity of HVAC Unit) x (Unit Efficiency) x (Stipulated Load Factor) x (Existing Annual Operating Hours – Proposed Annual Operating Hours)
Therm Savings = (Heating Capacity of HVAC Unit) x (Unit Efficiency) x (Stipulated Load Factor) x (Existing An nual Operating Hours – Proposed Annual Operating Hours)
Dollar Savings = [(kWh Savings) x (Average Utility Baseline $/kWh Rate) ] + [(Therm Savings) x (Average Utility Baseline $/therm Rate)]
Operational Savings
The Purchaser will realize maintenance and operational savings resulting from the new system installations, extended warranties, and/or service agreements provided by ABS. The operational savings are based on CEC guidelines and are stipulated and met upon the completed installation of the energy retrofit contract.
Pre-Retrofit Measurements
Existing operating hours and cooling/heating temperature setpoints for each HVAC unit or area will be ob tained from current thermostats and/or Energy Management System.
Post-Retrofit Measurements
Post-retrofit operating schedules, cooling and heating temperature setpoints in both occupied and unoccupied modes for the HVAC equipment will be obtained using the new control systems.
Commissioning
Commissioning shall consist of inspections and a final verification report. Inspections shall consist of:
• ABS shall include verification that the operating schedules, cooling and heating setpoints and controls sequences for the HVAC equipment connected to the new thermostats and/or energy management system are programmed as specified.
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Measurement and Verification Plan
IPMVP Option A: Retrofit Isolation, Key Parameter Measurement For Electrical System Upgrades
M&V Procedure
This option provides for the measurement of at least one variable pre and post retrofit with other variables allowed for stipulation. For this retrofit, a representative sample of each of the transformer types will be measured. The same sample will be used for both pre and post retrofit calculations. Wattage shall be measured with an appropriate instrument that is properly calibrated.
Stipulated Values
Operating Hours are stipulated for purposes of M&V. The hours of operation will match the hours the facili ties were operating during the baseline period. The transformers are energized 24/7 year -round for all facilities. Stipulated values are agreed to by the Purchaser. The below table illustrates stipulated existing and proposed transformer losses and percentage loading based on extensive field measurements:
Adjustments
For this EEM, the following adjustments are allowed for purposes of Measurement and Verification:
• Utility rates, billing days or degree days.
Savings Calculations
The calculations for the baseline energy consumption and post retrofit savings shall be completed in accordance with the industry guidelines set forth by IPMVP and methods indicated below. kWh Saving = EXISTING [(No Load Losses + ((On % Loading)^2*(Full Load Losses-No Load Losses))) / 1000]*(Operation Hours) + [(No Load Losses + ((OFF % Loading)^2*(Full Load Losses-No Load Losses))) / 1000]*(Operation Hours) – PROPOSED [(No Load Losses + ((On % Loading)^2*(Full Load Losses-No Load Losses))) / 1000]*(Operation Hours) + [(No Load Losses + ((OFF % Loading)^2*(Full Load Losses-No Load Losses))) / 1000]*( Operation Hours) Dollar Savings = (kWh Savings) x (Average Utility Baseline $/kWh Rate) Operational Savings
The Purchaser will realize maintenance and operational savings resulting from the new system installations, extended warranties, and/or service agreements provided by ABS. The operational savings are based on CEC guidelines and are stipulated and met upon the completed installation of the energy retrofit contract.
Commissioning
Commissioning shall consist of inspections and a final verification report. Inspections shall consist of:
• During construction, ABS shall maintain a detailed record of the types and quantities of fixtures retrofitted and fixtures installed in each facility. A post construction inspection is required by the responsible M&V party.
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Measurement and Verification Plan
IPMVP Option A: Retrofit Isolation, Key Parameter Measurement For Envelope Upgrades
M&V Procedure
This measure will lead to a reduction in energy usage as a result of reducing the cooling and heating loads of the spaces below.
Due to the complexity and required equipment to quantify the energy savings from installing the membrane roof the energy savings potential will be deemed achieved once installed. The energy savings is being treated as an added be nefit on top of the other benefits of this roofing work.
Operational Savings
The Purchaser will realize maintenance and operational savings resulting from the new system installations, extended warranties, and/or service agreements provided by ABS. The operational savings are based on CEC guidelines and are stipulated and met upon the completed installation of the energy retrofit contract.
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Measurement and Verification Plan
IPMVP Option A: Retrofit Isolation, Key Parameter Measurement For Air Disinfection Systems
M&V Procedure
This measure will lead to a cleaner indoor air quality. Due to the complexity and required equipment to quantify the energy savings from installing the disinfection systems the energy savings potential will be deemed achieved once installed. The energy savings is being treated as an added benefit on top of the other benefits of this measure.
Operational Savings
The Purchaser will realize maintenance and operational savings resulting from the new system installations, extended warranties, and/or service agreements provided by ABS. The operational savings are based on CEC guidelines and are stipulated and met upon the completed installation of the energy retrofit contract.
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Measurement and Verification Plan
IPMVP Option A: Retrofit Isolation, Key Parameter Measurement For Pool Boiler Optimization
M&V Procedure
This measure will lead to a reduction in natural gas usage because the old inefficient pool boilers of which one is non-operational are being replaced with two new high efficiency condensing pool boilers with an efficiency up to 97%. Due to the existing boilers being in disarray and the uncertainty of the existing boiler(s) being able to maintain the desired pool temperature set -point resulting in an inconsistent baseline natural gas usage the energy saving from installing the new boilers will be deemed achieved once installed. The energy savings is being treated a s an added benefit on top of the pool being able to maintain the proper temperature. The natural gas savings are expected to be significant from the optimization of the boiler system.
Operational Savings
The Purchaser will realize maintenance and operational savings resulting from the new system installations, extended warranties, and/or service agreements provided by ABS. The operational savings are based on CEC guidelines and are stipulated and met upon the completed installation of the energy retrofit contract.
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Measurement and Verification Plan
IPMVP Option A: Retrofit Isolation, Key Parameter Measurement For Installation of the Pool Cover
M&V Procedure
This measure will lead to a reduction in natural gas usage because the pool is currently not being covered resulting in a significant transfer of energy due to a high rate of evaporation. With the introduction of a pool cover during non -operating hours the reduction in the rate of evaporation will result in a significant wat er savings and natural gas savings. Due to the existing pool boilers being in mechanical disarray with only one of two boilers being functional for a period of time and the pool water temperature fluctuating during periods of cold outside air temperature the baseline energy consumption will be inconsistent.
Therefore, the energy savings will be deemed achieved once installed. The energy savings is being treated as an added benefit on top of the pool being able to maintain the proper temperature. The natural gas savings and reduction in water loss are expected to be significant from the introduction of the new pool cover when used.
Operational Savings
The Purchaser will realize operational savings resulting from the utilization of the new pool cover and the boiler systems operating at a reduced average load factor and from new system installations, extended warranties, and/or service agreements provided by ABS. The operational savings are based on CEC guidelines and are stipulated and met upon the completed installation of the energy retrofit contract.
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Measurement and Verification Plan
IPMVP Option A: Retrofit Isolation, Key Parameter Measurement For Rebuild of the Pool Pump(s) & Motor(s), New Filtration Systems and Installation of a New VFD M&V Procedure
This measure will lead to a reduction in energy usage because the pool pump is now able to be ramped down in speed resulting in a significant energy savings because of the infinity laws effect on centrifugal devices. Due to the existing pool equipment’s operating parameters during the baseline the energy savings will be deemed achieved once installed. The energy savings is being treated as an added be nefit on top of the pool being able to maintain the proper rate of filtration. The energy savings are expected to be significant with the introduction of the VFD and the proper controls monitoring the filtration process.
Operational Savings
The Purchaser will realize maintenance and operational savings resulting from the new pool system installations, extended warranties, and/or service agreements provided by ABS. The operational savings are based on CEC guidelines and are stipulated and met upon the completed installation of the energy retrofit contract.
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Measurement and Verification Plan
IPMVP Option A: Retrofit Isolation, Key Parameter Measurement For Miscellaneous Upgrades
M&V Procedure
This measure will lead to upgraded restroom facilit ies. Due to the complexity and required equipment to quantify the energy savings from installing the disinfection systems the energy savings potential will be deemed achieved once installed. The energy savings is being treated as an added benefit on top of the other benefits of this measure.
Operational Savings
The Purchaser will realize maintenance and operational savings resulting from the new system installations, extended warranties, and/or service agreements provided by ABS. The operational savings are based on CEC guidelines and are stipulated and met upon the completed installation of the energy retrofit contract.
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Measurement and Verification Plan
IPMVP Option A: Retrofit Isolation, Key Parameter Measurement For Renewable Energy Systems
M&V Procedure
This option shall provide for the measurement of at least one variable pre - and post-retrofit with other variables allowed for stipulation. For this installation, the kilowatt-hour (kWh) production from the solar PV systems shall be measured and recorded.
Stipulated Values
The solar system savings are stipulated for the purposes of M&V. Values are obtained from the expected solar kWh production outlined in the Solar Systems Attachment . The solar kWh annual production is guaranteed at 80% of the expected value. The solar panel degradation factor (0. 5%/year), avoided energy cost ( $/kWh, based on the City of Montebello rate schedule) and utility escalation rate (6%/year) are stipulated for the solar photovoltaic systems. Stipulated values are agreed to by Purchaser.
Savings Calculations
The calculations for the baseline energy cons umption and post installation savings provided the basis for the overall financial viability of these EEMs. The following equations summarize the calculation of savings:
Electricity Production: Electricity production of the PV system is determined by recording the kilowatt hours (kWh) off the net electric meter and recording the results.
Dollar Savings: After recording kWh production, each site’s avoided energy cost ($/kWh), as shown in Utility Baseline, shall be used to determine dollar savings. Dollar Savings = (Annual kWh production) x (Avoided $/kWh) = Annual $ kWh Saved
Maintenance of System
Calculation of energy cost savings from the solar PV systems are contingent upon the Purchaser maintaining an active operations and maintenance (O&M) contract with a solar service provider for the term of the solar lease agreement. This is to ensure that the solar panels are clean, operating in the intended way and free from any disruptions or damage that is beyond ABS’s control.
Pre-Retrofit Measurements
Existing utility electrical energy (kWh) consumption as shown in the Utility Baseline Summary, as shown in Attachment 2.
Post-Retrofit Measurements
Electrical energy (kWh) produced from the solar PV systems recorded from the net electrical meter.
Adjustments
For this EEM, the following adjustments are allowed for the purposes of Measurement and Verification:
• Addition or subtraction to the square footage of facilities. • Utility rates, billing days or degree days.
• Addition or subtraction of electrical load at the facilities. • Changes in the solar PV system sizing, location and layout. • Changes in the conditions at or near any of the sites, which causes additional shading, soiling, or otherwise reduced performance of the solar PV systems.
• Adjustment to the Guaranteed Production values for weather shall use local weather data as recorded during the corresponding period.
• To the extent that the System output is negatively impacted by casualty, government regulation and or restriction that is beyond the Contractor’s control to remedy within a reasonable time period, the Parties shall negotiate in good faith a modification of the Guaranteed Production.
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Excused Production Losses
For this EEM, the following events are excused f rom production losses and any necessary adjustments are allowed for the purposes of Measurement and Verification:
• Force Majeure Events: Lost production from the beginning of a Force Majeure Event until production limiting factors caused by the Force Majeure Event have been remedied.
• Grid Event: Lost production when a fluctuation in the Grid frequency or voltage causes the inverters or the System to disconnect from the Grid. The “Grid” is defined to be the system receiving power exported from the System. • Grid Outage: Lost production when a failure in the grid or Interconnection Infrastructure prevented energy from being exported from the solar facility. “Interconnection Infrastructure” means that utility -owned and maintained interconnection equipment (the substation including but not limited to transformers, switches, and protective relays) that is used to connect the Facility to the utility grid. Grid operator/owner ordered curtailments for any reason, other than an issue in the System, is a Grid Outage.
• Weather Events: Lost production from weather that limits or prevents safe operation of the solar facility including floods, snow, hurricanes, tornadoes, insolation-limiting wildfires and volcanic activity. • Purchaser Caused: Lost production when System dc capacity is off -line due to outages attributable to Purchaser’s decision to perform or cause to be performed, any investigations, studies, operations, construction, installation and maintenance work or other activities deemed appropriate by ABS at its sole discretion.
Commissioning
Commissioning shall consist of inspections and a final Commissioning report. Commissioning of the new solar PV system sha ll include securing the Utility Interconnect agreement, proper alignment of the solar panels and functional testing.
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Measurement and Verification Plan
IPMVP Option C: Whole Facility
M&V Procedure
The Measurement and Verification (M&V) Plan following IPMVP Option C protocol is designed to evaluate the energy performance of the whole facility, not just individual EEMs. The energy performance is assessed through utility meters, whole- facility meters, or sub-meters. The measurement boundary encompasses either the whole facility or a major section of the facility where EEMs were installed. Option C determines the combined savings of all the EEMs installed at the facility and is monitored by the associated energy meter. Savings reported under this Option will include the positive or negative effects of any non-EEM changes made in the facility because whole-facility meters are used.
Adjustments
Adjustments will be computed from identifiable physical facts about the energy governing characteristics of equipment within the measurement boundary. Adjus tments are used to express both pieces of measured energy data under the same set of conditions. Two types of adjustments are possible:
• Routine Adjustments are used to account for any energy -governing factors, expected to change routinely during the reporting period. Routine Adjustments are completed by developing a mathematical model of each meter’s energy-use pattern. Typically, the baseline model includes factors derived from regression analysis, which correlates energy to one or more independent varia bles such as occupancy, weather, and metering period length. Values of independent variables over the reporting period can be inputted into the baseline model to predict what the baseline energy consumption would have been had if no EEM’s were installed. • Non-Routine Adjustments are used to account for those energy -governing factors which are not usually expected to change, such as: the facility size, the design and operation of installed equipment , or the type of occupants. ABS will monitor these static fa ctors for change throughout the reporting period. A djustments will be based on industry standards and sound engineering principles as they pertain to the specific affected system.
Metering
Whole-facility energy measurements can use the utility’s meters. Utility meter data is considered 100% accurate for determining savings because this data defines the payment for energy. The energy supplier’s meter(s) may be equipped or modified to provide output that can be recorded by the facility’s monitoring equipment. Meter data can be hourly, daily or monthly whole -facility data.
Savings Calculations
The calculations for the baseline energy consumption and post retrofit savings shall be completed in accordance with the industry guidelines set forth by IPMVP and ASHRAE. The baseline period and reporting period should use complete years of continuous data (12, 24, or 36 months). The electrical consumption reduction of the facility (measured in kWh and/or kW) shall be reported as Savings, or Avoided Energy Use, in which the savings are stated under the conditions of the reporting period and determine d by the following equation:
Energy Savings (Avoided Energy Use) = (Baseline Energy ± Routine Adjustments to reporting-period conditions ± Non-Routine Adjustments to reporting-period conditions) - Reporting-Period Energy
The price schedule of the reporting period will be used to compute the “avoided cost” on a meter -by-meter basis. The price schedule will be obtained from the utility and will include all elements that are affected by metered amounts, such as consumption charges, demand charges , power factor, and demand ratchets . In the event of a significant decrease in energy prices, the price schedule used for savings reporting will be that which prevailed at the time of commitment to the investment.
Cost savings are determined by applying the appropriate rate / price schedule in the following equation:
Cost Savings (Avoided Cost) = Cost of Baseline Energy - Cost of Reporting-Period Energy
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Attachment 2
Utility Baseline Summaries
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Attachment 3
Energy Efficiency and Renewable Project Cashflow
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Cash Flow
City of Montebello
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Years 21 to 25 Years 26 to 30 Totals 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 to 2048 2049 to 2053 Energy Efficiency Savings $6,702 $33,508 $35,518 $37,650 $39,909 $42,303 $44,841 $47,532 $50,384 $53,407 $56,611 $60,008 $63,608 $67,425 $71,470 $75,758 $13,632 $14,450 $15,316 $16,235 $17,210 $102,833 $137,614 $1,103,922 O&M Savings $68,269 $341,346 $348,173 $355,136 $362,239 $369,484 $376,874 $384,411 $392,099 $399,941 $407,940 $212,129 $216,371 $220,699 $225,113 $229,615 $234,207 $238,892 $243,669 $248,543 $253,514 $0 $0 $6,128,664 Solar Savings $710,329 $749,184 $790,164 $833,386 $878,973 $927,052 $977,762 $1,031,246 $1,087,655 $1,147,150 $1,209,899 $1,276,080 $1,345,882 $1,419,501 $1,497,148 $1,579,042 $1,665,416 $1,756,514 $1,852,595 $1,953,932 $11,494,693 $15,001,756 $51,185,360 Solar Direct Pay ITC $3,797,608 $0 $0 $3,797,608
Capital Cost Avoidance $8,439,519 $0 $0 $8,439,519
Total Program Savings $8,514,490 $1,085,183 $1,132,875 $4,980,558 $1,235,534 $1,290,760 $1,348,767 $1,409,705 $1,473,729 $1,541,003 $1,611,701 $1,482,035 $1,556,060 $1,634,005 $1,716,084 $1,802,522 $1,826,881 $1,918,757 $2,015,500 $2,117,374 $2,224,656 $11,597,526 $15,139,370 $70,655,073 Total Project Amount - $26,270,796
Upfront Capital Contribution $7,000,000 $0 $0 $7,000,000 Annual Lease Payment $935,183 $982,875 $4,830,558 $1,085,534 $1,140,760 $1,198,767 $1,259,705 $1,323,729 $1,391,003 $1,461,701 $1,332,035 $1,406,060 $1,484,005 $1,566,084 $1,652,522 $1,676,881 $1,768,757 $1,865,500 $1,967,374 $1,935,876 $0 $0 $32,264,909 Total Program Payments $7,000,000 $935,183 $982,875 $4,830,558 $1,085,534 $1,140,760 $1,198,767 $1,259,705 $1,323,729 $1,391,003 $1,461,701 $1,332,035 $1,406,060 $1,484,005 $1,566,084 $1,652,522 $1,676,881 $1,768,757 $1,865,500 $1,967,374 $1,935,876 $0 $0 $39,264,909 Net Annual Cash Flow $1,514,490 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $288,779 $11,597,526 $15,139,370 $31,390,165 Net Cumulative Cash Flow $1,514,490 $1,664,490 $1,814,490 $1,964,490 $2,114,490 $2,264,490 $2,414,490 $2,564,490 $2,714,490 $2,864,490 $3,014,490 $3,164,490 $3,314,490 $3,464,490 $3,614,490 $3,764,490 $3,914,490 $4,064,490 $4,214,490 $4,364,490 $4,653,269 $16,250,795 $31,390,165
Statutory Exemptions. State code number:
_______________________________________________
Notice of Exemption Appendix E
From: (Public Agency): ____________________________
To: Office of Planning and Research
P.O. Box 3044, Room 113 _______________________________________________Sacramento, CA 95812-3044 County Clerk
(Address)
___________________________
___________________________
County of: __________________
Project Title: ____________________________________________________________________________ Project Applicant: ________________________________________________________________________ Project Location - Specific:
Project Location - City: ______________________ Project Location - County:
Description of Nature, Purpose and Beneficiaries of Project:
_____________________
Name of Public Agency Approving Project: _____________________________________________________ Name of Person or Agency Carrying Out Proj ect: ________________________________________________ Exempt Status: (check one):
Ministerial (Sec. 21080(b)(1); 15268);
Declared Emergency (Sec. 21080(b)(3); 15269(a));
Emergency Project (Sec. 21080(b)(4); 15269(b)(c));
Reasons why project is exempt:
Lead Agency
Contact Person: ____________________________
Area Code/Telephone/Extension: _______________
If filed by applicant:
1. Attach certified document of exemption finding.
2. Has a Notice of Exemption been filed by the public agency approving the project? Yes No
Signature: ____________________________ Date:
Signed by Lead Agency
Signed by Applicant
Authority cited: Sections 21083 and 21110, Public Resources Code. Date Received for filing at OPR:
Reference: Sections 21108, 21152, and 21152.1, Public Resources Code. _______________
Categorical Exemption. State type and section number: ____________________________________ ______________________________________________
______________ Title: _______________________
Revised 2011
ITEM # 6
CITY OF MONTEBELLO
CITY COUNCIL AND PUBLIC FINANCING AUTHORITY AGENDA STAFF REPORT TO: Honorable Mayor and City Council Members
FROM: René Bobadilla, City Manager
BY: Arnold Glasman, City Attorney
Alicia Fernandez, Senior Deputy City Clerk
SUBJECT: WAIVE SECOND READING AND ADOPT ORDINANCE NO. 2457 AMENDING CHAPTER 2.14 OF THE MONTEBELLO MUNICIPAL
CODE TO UPDATE THE RULES OF ORDER AND PROCEDURE FOR
THE CONDUCT OF ALL CITY COUNCIL AND SUCCESSOR AGENCY
MEETINGS, PROCEEDINGS, AND BUSINESS
DATE: December 14, 2022
RECOMMENDATION(S):
It is recommended that the City Council:
1. Introduce and waive First Reading of Reading of Ordinance No. 2457 Amending Chapter 2.14 of the Montebello Municipal Code Updating the Rules of Order and Procedure for the Conduct of all City Council and Successor Agency Meetings, Proceedings, and Business; and
2. Take such additional related action that may be desirable.
FISCAL IMPACT:
No direct financial impacts are foreseen as a consequence of updating the Council Rules of Order and Procedure.
BACKGROUND/DISCUSSION:
The rules establishing procedures to address the City Council and standards of decorum were approved in 1989 by adoption of Resolution No. 89-70. Subsequently, Resolution No. 06-22 was adopted to amend the rules addressing the procedures for addressing the City Council and standards of decorum, and to include additional rules
CITY COUNCIL AND PUBLIC FINANCING AUTHORITY AGENDA REPORT - MEETING OF DECEMBER 14, 2022
such as the order of business, public participation, and City Council oral reports. In 2011, the rules were amended once again to clarify City Council oral communications.
On October 27, 2021, the City Council adopted Ordinance No. 2443 and rescinded Resolution No.’s 89-70, 06-22, 11-89 and 19-124 to consolidate and update the rules of order for the conduct of all City Council and Successor Agency meetings, proceedings, and business. Ordinance No. 2443 maximized the efficiency of City Council meetings and provided general policies and rules pertaining to the operations of the City Council meetings. The most significant changes were establishing a new meeting start time, amending the dark meetings, establishing general meeting requirements, establishing procedures for the conduct of meetings and a proposed meeting length. This proposed Ordinance includes a number of suggested updates which would enhance the clarity of the rules including public comment and Council oral rules, incorporate existing practices, provide uniformity in protocol standards, and establish new protocol standards in accordance with Senate Bill 1100 (“SB 1100”).
This Ordinance will set forth the requirements for a quorum and voting for the temporary seven-member legislative body that will be in existence as a result of the 2022 municipal election until members elected from Districts 2 and 4 take their oath of office as a result of the November 2024 election.
Senate Bill 1100 (“SB 1100”) was signed into law in August of 2022 and authorizes the presiding member of the legislative body conducting a meeting or their designee to remove, or cause the removal of, an individual for disrupting a City Council or Successor Agency meeting. “Disrupting” means engaging in behavior during a meeting that actually disrupts, disturbs, impedes, or renders infeasible the orderly conduct of the meeting and includes but is not limited to, one of the following: (a) a failure to comply with reasonable and lawful regulations adopted by the legislative body, or (b) engaging in behavior that constitutes use of force or a true threat of force. Prior to removing an individual, the presiding officer or their designee shall warn the individual that their behavior is disrupting the meeting and that their failure to cease their behavior may result in their removal. However, removal of an individual for engaging in behavior that constitutes use of force or a true threat of force does not require any warning from the presiding officer.
The purpose of SB 1100 is to give the legislative body clear authorization to restore order to meetings in the event of actual disruptions that are disturbing, disrupting, impeding, or rendering infeasible the orderly conduct of the meeting and, thereby, preserve the rights of other members of the public at the meeting and allow the legislative body to continue its work on behalf of the public.
In addition, as a result of further research, there are certain rules for public participation established by the Fair Political Practices Commission (FPPC) which are stricter than those set forth in the attached Ordinance. The FPPC policy is attached for your reference for the City Council to evaluate and to provide guidance on whether or not to incorporate certain provisions established by the FPPC.
CITY COUNCIL AND PUBLIC FINANCING AUTHORITY AGENDA REPORT - MEETING OF DECEMBER 14, 2022
On November 16, 2022, the City Council introduced and waived the first reading of Ordinance No. 2457.
ENVIRONMENTAL:
There is no environmental impact.
ANALYSIS:
N/A
SUMMARY:
Staff is recommending that the City Council waive the second reading of Ordinance No. 2457 and adopt the proposed Ordinance No. 2457. Once the proposed Ordinance is adopted, Staff will continue to work towards creating a comprehensive handbook that will serve as a reference guide for current City Council and future members. Staff will also work on Rules of Order and Procedure for the conduct of all Commission and Committee meetings, proceedings, and business in the near future.
ATTACHMENT(S)
1. Attachment A - Ordinance No. 2457 Amending Rules of Order
2. Attachment B - FPPC Public Comment Rules
NEXT STEPS:
N/A
ORDINANCE NO. 2457
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
MONTEBELLO, CALIFORNIA, AMENDING OF CHAPTER 2.14, OF THE
CITY OF MONTEBELLO MUNICIPAL CODE UPDATING THE RULES OF
ORDER FOR THE CONDUCT OF ALL CITY COUNCIL AND
SUCCESSOR AGENCY MEETINGS, PROCEEDINGS, BUSINESS
RECITALS
WHEREAS, the City Council has, by prior Resolutions, the last of which was Resolution No. 89-70, 06-22, and 11-89, adopted rules for the conduct of its City Council (“Council”) and Successor Agency (“Agency”) meetings.; and
WHEREAS, the City Council has, by prior Resolutions, the last of which was Resolution No. 19-124, canceled on an annual basis City Council meetings on the First week of July and the second meetings of November and December to honor future summer vacations and holiday schedules; and
WHEREAS, so that there is consistency across the conduct of all City -related business, certain such rules should apply city -wide to the Council/Agency and joint meetings.
WHEREAS, Ordinance No. 2443 was passed and approved by the City Council of the City of Montebello (“City Council”) on October 27, 2021, rescinding Resolution No.’s 89-70, 06- 22,11-89, and 19 -124 to consolidate and update the rules of order for the conduct of all City Council and Successor Agency meetings, proceedings, and business.
WHEREAS, Senate Bill 1100 (“SB 1100”) was signed into law in August of 2022 and authorizes the presiding member of the legislative body conducting a meeting or their designee to remove, or cause the removal of, an individual for disrupting a City Council or Successor Agency meeting; and
WHEREAS, the purpose of SB 1100 is to give the legislative body clear authorization to restore order to meetings in the event of actual disruptions that are disturbing, disrupting, impeding, or rendering infeasible the orderly conduct of the meeting and, thereby, preserve the rights of other members of the public at the meeting and allow the legislative body to continue its work on behalf of the public; and
WHEREAS, the City Council desires to amend the Montebello Municipal Code to update the rules of conduct for the City Council and Successor Agency meetings.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF MONTEBELLO HEREBY ORDAINS AS FOLLOWS:
SECTION 1. The City Council for the City of Montebello finds and declares the foregoing true and correct, and incorporates said recitals fully into this Ordinance.
ORDINANCE NO. 2457
SECTION 2. Chapter 2.14 “City Council/Agency Meeting Rules of Order” is hereby amended to read as follows (deletions in strikethrough and additions in double underline):
Chapter 2.14 – CITY COUNCIL/AGENCY MEETING RULES OF ORDER
2.14.010 - Meetings Open to the Public.
The Council and Agency are subject to the Brown Act Open Meetings Law. (Government Code 54950 et seq). All meetings of the Council and Agency are open to the public, except for closed sessions which are authorized to be held in accordance with the applicable provisions of the Brown Act.
2.14.020 - City Council/Agency Meetings and Agenda Materials.
A. Regular Meetings. Regular meetings of the City Council and Agency shall be held at the City Hall Council Chambers at 1600 West Beverly Boulevard, Montebello, California, except as otherwise provided from time- to-time and authorized by the Brown Act. The regular meetings of the City Council and Agency shall be held on the second and fourth Wednesdays of each month. Regular meeting agendas shall be posted on the City’s website and at City Hall no later than 72 hours prior to the meeting. The City Council Closed Session will start at 5:00 p.m. The Agency Chairperson may recess the Agency meeting to take up City Council closed session items. The regular City Council/Successor Agency meeting will start immediately following the discussion of Closed Session items .
Closed Session shall not exceed 1.5 hours. Whenever the day for holding any of the meetings falls on a holiday, the meeting shall be held on the next business day unless otherwise ordered by the City Council/Agency at a prior meeting.
B. Special Meetings . Special meetings are “Special” because the presiding officer or majority of the legislative body can call them on a minimum of 24 hours’ notice, as authorized by the Brown Act. Special meetings need not be held at City Hall, as long as the alternate location is within the City. Special meeting agendas shall be posted on the City’s website and at the meeting location, if located away from City Hall in a place to which the public has unrestricted access and where the notice and agenda are not likely to be removed or obscured by other posted materials. The Council/Agency makes every effort to provide notice well in advance of 24 hours, especially when the special meeting is for the purpose of conducting a Study Session.
1. Study Sessions are meetings during which the Council /Agency receives information about Council/Agency business in an informal setting. The informal study session setting is intended to encourage in-depth discussion and detailed questioning and brainstorming by Council/Agency on issues of significant interest, including but not limited to City /Agency policy matters, budget and financial matters zoning applications, major public works projects and other related topics . The Council/Agency may discuss the material freely without following formal rules of parliamentary procedure.
Staff may be directed to bring matters back for future Council/Agency
ORDINANCE NO. 2457
consideration as no action can be taken at a study session. The Decorum rules still apply to the behavior of the Council/Agency and public.
C. Broadcasting of Meetings. All regular Council/Agency meetings shall be live streamed on the City’s website and broadcasted on the City’s Government Access Channel (Channel 3) and will be video- recorded, unless the City/Agency is unable to do so due to unforeseen technical circumstances or circumstances beyond the City’s/Agency’s control.
D. Dark Meetings. The City Council/Agency regular meetings shall go dark four (4) times throughout the year. The regular meetings that will not be held are the first and second meetings of July, and the second meetings of November and December.
E. Agenda Materials. The City Clerk office shall post the agenda materials and supplemental agenda materials on the City’s agenda website. The agenda packets are available for public inspection at the City’s website. The agenda cover sheets may also be emailed upon written request.
2.14.030 -
Order of Business.
The business of the City Council and Agency at regularly scheduled meetings shall be disposed of in the following order:
• City Council & Successor Agency - 5:00 p.m. Closed Session • Call to Order
• Roll Call
• Announcement of Closed Session Items
• Public Comments on Closed Session Items (Limited to 30 minutes) • Closed Session
• City Council & Successor Agency – Regular Session starts no later than 6:00 p.m. following Closed Session
• Closed Session Report (If there is no Closed Session, the meeting will start no later than 6:00 p.m.) Invocation
• Pledge of Allegiance
• Corrections to the Agenda
• Ceremonial Items/Presentations
• Public Comments on Non-Agenda and Agenda Items (Limited to 30 minutes and each speaker will have 3 minutes total for all items requested to speak on by each speaker. All other comments which exceed the 30 minutes will be entered into the record and distributed to the City Council.)
• Staff Communications on Items of Community Interest
• Public Hearing
• Old Business
• Regular Business
• Consent Calendar (Routine Matters)
• AB 1234 Travel Reports
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• Council/Agency Orals
• Adjournment
2.14.040 - General Requirements.
A. Attendance. Council/Agency Members, the City Clerk, City Attorney, and City Manager, along with any other city officers and department heads that have been requested to be present, shall take their regular stations in the Council chamber prior to the sta rt of any meeting, except during recognized absences . The Council/Agency expects its members to attend regularly and notify the City Clerk , Deputy City Clerk, Assistant City Manager, or City Manager of any planned absences at least two (2) hours prior to the start of any meeting. Notification shall be made via formal written and/or email notice, or confirmed verbally.
B. Quorum. In a five-member body, three (3) members of the Council/Agency shall constitute a quorum and shall be sufficient to transact business. If less than three Council/Agency members appear at a regular meeting, the Mayor /Chairperson, Mayor Pro Tem/Vice Chairperson in the absence of the Mayor/Chairperson, any Council/Agency member in the absence of the Mayor/Chairperson and Mayor Pro Tem/Vice Chairperson, or in the absence of all Council /Agency members, the City Clerk or Deputy City Clerk, shall adjourn the meeting to a stated day and hour.
Business of the Council/Agency may be conducted with a minimum of three members being present; however, pursuant to the California Government Code, matters requiring the expenditure of City funds and all Resolutions and non- urgency Ordinances must receive three (3) affirmative votes for approval (see Section 62.14.040. General Requirements, H. “Voting Procedures”).
When the November 2022 election results are certified and elected officials are sworn into office, the temporary seven- member legislative body established by Section
2.08.050(G) shall require four members of the Council/Agency to constitute a quorum and that shall be sufficient to transact business. If less than four Council/Agency members appear at a regular meeting, the Mayor/Chairperson, Mayor Pro Tem/Vice Chairperson in the absence of the Mayor/Chairperson, any Council/Agency member in the absence of the Mayor/Chairperson and Mayor Pro Tem/Vice Chairperson, or in the absence of all Council/Agency members, the City Clerk or Sr. Deputy City Cler k, shall adjourn the meeting to a stated day and hour. Business of the Council/Agency may be conducted with a minimum of four members being present; however, pursuant to the California Government Code, matters requiring the expenditure of City funds and all Resolutions and non- urgency Ordinances must receive four affirmative votes for approval (see Section 62.14.040. General Requirements, H. “Voting Procedures”) or more affirmative votes if otherwise established by law, ordinance, or contract . This paragraph will sunset on the date that the members elected from Districts 2 and 4 take their oath of office as a result of the election occurring in November 2024, reverting the legislative body from
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seven members to five members , but shall not affect the required votes as otherwise established by law, ordinance or contract.
C. Teleconference Attendance of Council/Agency Members at Meetings. The Council/Agency complies with the specific requirements relating to teleconferencing provisions per the Brown Act and shall apply to Council/Agency members. “Teleconference” is defined as a “meeting of a legislative body, the members of which are in different locations, connected by electronic means, through either audio or video, or both”. Requests by Council/Agency m embers to attend a meeting via telephonic appearance are actively discouraged. In addition, at least a quorum of the Council/Agency must participate from a location within the City (Government Code Section 54953(b)(3)).
If these two threshold requiremen ts are met, the Council/Agency member who will be appearing telephonically must ensure that:
1. The meeting agenda identifies the teleconference location and is posted at that location in an area that is accessible and visible 24 hours a day for at least 72 hours prior to the meeting.
2. The teleconference location is open and fully accessible to the public, and fully accessible under the Americans with Disabilities Act, throughout the entire meeting. These requirements apply to private residences, hotel rooms, and similar facilities, all of which must remain fully open and accessible throughout the meeting, without requiring identification or registration.
3. The teleconference technology used is open and fully accessible to all members of the public to participate, including those with disabilities.
4. Members of the public who attend the meeting at the teleconference location have the same opportunity to address the Council/Agency from the remote location that they would if they were present in Council Chambers.
5. The teleconference location must not require an admission fee or any payment for attendance.
6. All votes must be by roll call.
7. If the meeting will include a closed session, the Council/Agency m ember must also ensure that there is a private location available for that portion of the meeting.
D. Approved Teleconference Guidelines for Council/Agency Members Include:
1. Three days written notice in advance of the publication of the agenda must be given by the Council/Agency member to the City Clerk’s office; the notice
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must include the address at which the teleconferenced meeting will occur, the address the Council/Agency packet should be mailed to, who is to initiate the phone call to establish the teleconference connection, and the phone number of the teleconference location. If cellular telephones are used to participate in teleconferenced meetings, Council/Agency members need to ensure the speaker phone option is functioning.
2. The Council/Agency member is responsible for posting the Council/Agency agenda in the remote location, or having the agenda posted by somebody at the location and confirming that posting has occurred. The City Clerk will assist, if necessary, by emailing, faxing or mailing the agenda to whatever address or fax number the Council/Agency member requests; however, it is the Council/Agency member’s responsibility to ensure that the agenda arrives and is pos ted. If the Council/Agency m ember will need the assistance of the City Clerk in delivery of the agenda, the fax number or address must be included in the five-day advance written notice above.
3. The Council/Agency member must ensure that the location will be publicly accessible while the meeting is in progress.
4. The Council/Agency member must state at the beginning of the meeting that the posting requirement was met at the location and that the location is publicly accessible and must describe the location.
E. Closed Sessions. Closed sessions are the only type of agenda item that the public cannot observe, however, public comment is permitted prior to the City Council recessing into closed session . State law allows closed sessions to discuss pending litigation, employment matters, real estate negotiations, and certain other matters as authorized by the Brown Act. To the greatest extent possible, the City Attorney and City Clerk shall use standardized agenda descriptions that are consistent with Government Code Section 54954.5. Closed sessions will be scheduled at the beginning of Council/Agency meetings to the extent possible and appropriate.
1. State law requires the Council/Agency to make a public report after a closed session when certain kinds of actions are taken.
2. The City Manager and City Attorney, and/ or their designees, shall attend closed sessions unless it is necessary to excuse them. Only such additional staff shall attend as are necessary and then only if the legal privileges of confidentiality obtained in an executive session are not waived.
3. No minutes of closed sessions shall be kept. The City Attorney shall record the information necessary to comply with state law.
4. No person in attendance at a closed session may disclose the substance or effect (e.g., statements, discussions, etc.) of any matter discussed during the session; all matters are strictly confidential.
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5. No person in attendance at a closed session may disclose or share any documents/materials used during the session, printed or digital materials.
Documents/materials may include, but are not limited to: reports; memos/letters; any information related to employee matters or litigations.
6. Council/Agency may be asked to return all written materials distributed during closed session.
7. Any breach of releasing confidential information by any Council/Agency member may result in revoking or suspending the member’s right to receive further confidential information or other remedies as authorized by law.
F. Ceremonial Items/Presentation: Items presented during this item are limited to: community and Council/Agency presentations, proclamations, certificates of recognition, awards, and guest introductions. “Ceremonial Items/Presentations” shall be limited to 20 minutes. All presentations and exhibits are encouraged to be submitted in advance.
Nationally Recognized Health and Heritage months will also be acknowledged during this item. The list of approved nationally recognized health and heritage mo nths are hereby attached as “Exhibit A”. The approved list is subject to change based upon approval, removal, or amendment by Resolution or Consensus of the City Council.
Proclamations are issued for matters of local, regional, or national concern and are generally issued to organizations or events residing in, or occurring within the greater Montebello City area. Proclamations are ceremonial and do not carry any legislative or legal value. The Mayor/Chairperson, without formal action of the Council/Agency, may issue proclamations (requests must be made on an annual basis) . A Proclamation/Certificate Form, attached as “Exhibit B” (Exhibit B is subject to change based upon approval, removal, or amendment by Resolution or Consensus of the City Council), must be completed and submitted to the City Clerk’s office by the Mayor/Chairperson for all Proclamation requests at least two weeks in advance. This allows the Public Affairs office to process based on eligibility requirements. Proclamations must also be formally accepted by a recipient of the non-profit organization. The primary reasons for issuance include:
1. Recognition of an organization’s event or special action.
2. Recognition of a national or state non-profit event that coincides with a local event.
3. Significant historical commemorations.
4. Recognition of extraordinary achievement for which formal language is provided.
Proclamations will not be issued for:
1. Events or organization with no direct relationship to the City of Montebello.
2. Campaigns or events contrary to city policies.
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3. The request is for commercial/for-profit purposes.
4. The request conflicts with federally recognized months, weeks or days of observance.
Certificate of Recognition (COR) are iss ued to recognize special events, significant achievements, organizations, businesses, or individuals residing and/or located within the Montebello City area. The Mayor/Chairperson, Council/Agency members, City Staff, may issue Certificates of Recognition. A Proclamation/Certificate Request Form, attached as “Exhibit B”, must be completed and submitted to the City Clerk’s office by the Mayor/Chairperson or Council/Agency member for all COR requests at least two weeks in advance. The primary reasons for issuance include:
1. Retirement – the person must have been employed with their c urrent employer for 25 years or more.
2. Birthday – the person must be at least 80 years of age.
3. Wedding, church, or pastoral anniversary – 25 years or more.
4. Significant education/life achievement.
5. Exemplary service or significant contributions by an organization, business, or individual to the City.
6. New business openings only at the request of the City of Montebello Chamber’s Office.
7. Approved Nationally Recognized Health & Heritage months.
Additional Details:
1. City Clerk staff shall distribute procla mations/certificates of recognition in between each presentation, at the end of the presentations, or can be picked up the next business day.
2. The Council/Agency will be available for pictures.
G. Preparation of Minutes. City Clerk staff shall prepare “Action Minutes” of all public meetings of the City Council/Successor Agency. Action Minutes include very little narrative, if any, only motions and votes shown in the record. Staff shall prepare Summary Minutes for Public Hearing items.
H. Voting Procedures. On the consideration of every motion, the vote shall be taken by consensus vote (“all those in favor signify by saying ‘aye’ those opposed say ‘no’, any abstentions.) or roll call or electronic device and entered in full upon the record.
A simple majority vote of those in attendance, unless a full majority of the entire body is otherwise required by law (i.e. ordinances or resolutions), is needed to pass a motion as per Rosenberg’s Rules (e.g., in a five-member body, if the vote is three in favor and two opposed, the motion passes). As per Rosenberg’s Rules or as required by law , a super majority (two-thirds majority) vote is needed when applicable.
Every non-urgency Ordinance and any Resolution or order for franchises or payments of money shall require three (3) affirmative votes. An urgency Ordinance and certain resolutions shall require four (4) affirmative votes (e.g., adding matters to the agenda ,
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Resolution of Necessity). A roll call vote shall be used in these cases with th e Mayor/Chairperson called last.
Unless a Council/Agency member audibly votes in the affirmative, disqualifies himself or herself, or expressly declines to vote, his or her silence or any abstention shall be recorded as a vote in concurrence with the majority vote of those voting on the matter before the Council/Agency.
Council/Agency members may change their votes before the next item on the agenda is called or before adjournment of the meeting in which the vote is cast. It is the responsibility of every Council /Agency member to vote unless disqualified for cause accepted by the Council/Agency or by opinion of the City Attorney. No Council/Agency m ember can be compelled to vote.
Council/Agency members should only abstain if they are not sufficiently informed about an item, e.g. when there was a prior hearing and they were unable to view the prior meeting before the current meeting.
A Council/Agency Member who disqualifies him or herself pursuant to the Political Reform Act of 1974 because of any financial interest and/or conflict of interest shall disclose the nature of the conflict and may not participate in the discussion or the vote. A Council/Agency Member may otherwise disqualify him or herself due to personal bias or the appearance of impropriety. A Council/Agency member who is disqualified by reason of a conflict of interest in any matter shall not remain in his or her seat during the debate and vote on such matter, but shall request and be given the permission of the Presiding Officer to step down from the dais. A Council/Agency member stating such disqualification shall not be counted as part of a quorum and shall be considered absent for the purpose of determining the outcome of any vote on such matter.
In the event of a tie, the motion always fails since an affirmative vote is required to pass any motion (e.g., in a five-member body, if the vote is two in favor and two opposed, with one member absent, the motion is defeated). Before a motion is made on the next item on the agenda, any member of the Council/Agency may make a motion to continue the matter to another date. Any continuance hereunder shall suspend the running or calculation of any time in which action of the Council/Agency is required by law. Nothing herein shall be construed to prevent any Counci l/Agency member from agendizing a matter that resulted in a tie vote for a subsequent meeting.
I. One-Hour Rule. Respect the “One Hour” Rule for Staff Work. Requests for staff support should be made to the City Manager, according to the protocol for channeling communications. Any request, which would require more than one hour of staff time to research a problem or prepare a response and/or will cost $1,000 or more, will need to be approved in advance by the full Council/Agency to ensure that staff resources are allocated in accordance with overall Council/Agency priorities. Once notified that a request for information or staff support would require more than one hour and/or will cost $1,000 or more, the Council/Agency m ember may request that the City Manager place the request on an upcoming Council/Agency agenda.
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J. Confidentiality. No Council/Agency member or public employee shall, except as required in the performance of his duties, or in the course of any conduct reasonably believed to be in the performance of his duties, disclose confidential information gained by reason of his official position, nor shall he otherwise use the information for his personal interest. Confidential information shall include any information/materials declared as confidential by City Attorney and/or City Staff.
K. Use of Electronic Communication Devices on the Dais. The Council’s use of personal electronic communication devices, including but not limited to cell phones, smartphones, computers/laptops, and tablets are prohibited during a City Council meeting. The use of these devices may lead to the public’s perception that a Councilmember is not paying attention to the subject matter at hand , or that a Councilmember is receiving information relative to the subject matter at hand that other Councilmembers and members of the public are not receiving, either one of which is inimical to good government and transparency. Therefore, the Council’s use of electronic communication devices (including cell phones), other than for the purpose of accessing agenda materials that are on a Councilmember’s City I-pad or lap top computer, is prohibited during Council meetings.
2.14.050 - Public Comments.
Every Regular City Council and Agency Agendas shall contain two (2) Public Comments periods, with the exception of Special Meetings which shall contain one (1) Public Comment period. on non- agenda items and agenda items in substantially the following form: Please note that the Mayor/Chairperson, in his/her discretion, and/ or in consultation with the body, may limit or extend time for public comment as he/she may find reasonable under the circumstances. In addition, Council/Agency members shall not enter into debate or discussion with speakers during a Public Comment period.
A. Regular City Council/Agency M eetings. Meetings shall contain two 30- minute Public Comment periods; one on Closed Session Items and the other on Non- Agenda Items and Agenda Items in substantially the following form:
1. Closed Session Items : p ublic comment for matters listed under Closed Session will be allowed during the “ Public Comments on Closed Session Items” section of the meeting.
a. Speakers may not cede their time to other speakers.
b. The maximum time allotted for members of the public to speak on Closed Session Items shall not exceed three (3) minutes per person. c. “Public Comments on Closed Session Items” is limited to 30-minutes total.
2. Non-Agenda and Agenda Items: p ublic comment for matters not on the agenda (non- agenda items) and matters listed on the agenda will be allowed shall be limited to matters within the subject matter jurisdiction of
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the body (at regular meetings only). Anyone wishing to address the city council/successor agency may do so during the “Public Comments on Non- Agenda Items and Agenda Items” period section of the meeting.
a. Public comment for matters non- agenda items shall be limited to matters within the subject matter jurisdiction of the body. b. Public comment on matters on the agenda will be allowed only for items of business to be discussed by the body.
c. Speakers may not cede their time to other speakers.
d. The maximum time allotted for members of the public to speak on both Non- Agenda and Agenda Items shall not exceed three (3) minutes per person.
e. “ Public Comments on Non- Agenda Items and Agenda Items” is limited to 30-minutes total.
f. A Consent Calendar item may be pulled by the Mayor/Chairperson or Council/Agency member for discussion.
B. Special City Council/Agency Meetings. Meetings shall contain one (1) 30- minute Public Comment period to address only items listed on the agenda in substantially the following form:
1. Agenda Items Only : the general public may only address the City Council/Agency on items which have been described and listed on the agenda.
a. Speakers may not cede their time to other speakers.
b. The maximum time allotted for members of the public to speak on Agenda Items shall not exceed three (3) minutes per person. c. “ Public Comments on Agenda Items Only” is limited to 30 -minutes total.
B. Agenda Items. Public comment on matters on the agenda will be allowed only for items of business to be discussed by the body. Those wishing to address the City Council/ Agency on an item listed on the agenda may do so during the “Public Comments on Non-Agenda Items and Agenda Items” period. A Consent Calendar item may be pulled by the Mayor/Chairperson or Council/Agency member.
C. Speaker Cards. Members of the public that are interested in making public comments on both Non-Agenda and Agenda Items, must complete a Speaker Card and submit it to City Clerk staff prior to the beginning of the meeting of 5:0 0 p.m. for live meetings, or in accordance with Assembly Bill 361 for video/audio meetings. Upon receipt of the card, the City Clerk shall deliver it to the presiding officer. The public will be called upon during the Council/Agency meeting – Closed Session begins at 5:0 0 p.m. and Regular Session begins no later than 6:00 p.m., following Closed Session. If there is no Closed Session, the meeting will may start at 5:00 p.m. , but no later than 6:00 p.m.
Members of the public must be present until the item for consideration is heard. Any
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requests to provide public comment which are submitted after the deadlines indicated above will not be addressed at the Council/Agency meeting, with the exception of non- agenda item comments which will be held over to the next regularly scheduled meeting.
Please note that although it is recommended, speaker cards are not required to be filled- out for Public Hearings.
D. Written Comments. Members of the public that are interested in submitting written comments may do so via electronic mail at:
[email protected]. Written comments will be provided to members of the City Council and will be entered into the record of the proceedings to the extent they relate to matters listed on the posted agenda or otherwise address matters/issues within the subject matter jurisdiction of the City Council. Persons submitting written comments are encouraged to identify the specific item(s) on the agenda their comment(s) relate to or whether they relate to non-agendized matters. Written comments may not be read aloud and will be includ ed as part of the meeting minutes , or in accordance with Assembly Bill 361 for video/audio meetings.
E. Time Limits. Each Public Comments period is limited to 30 thirty-minutes.
State Law prohibits the Council/Agency from taking action or entertaining extended discussion on a topic not listed on the agenda. In order to conduct a timely meeting, the maximum time allotted for members of the public to speak on both Non- Agenda and Agenda Item during the Public Comment period(s) shall not exceed three (3) minutes per person. The Mayor/Chairperson, in his/her discretion, and/or in consultation with the body, may reduce, limit or extend time for public comment as he/she may find reasonable under the circumstances. Speakers may not cede their time to other speakers.
2.14.060 - Procedure for the Conduct of City Council/Agency Meetings.
A. Role of Mayor/Chairperson. The Mayor/Chairperson shall be the Presiding Officer at all meetings of the Council/Agency, and be responsible for maintaining the order and decorum of meetings. It shall be the duty and responsibility of the Mayor/Chairperson to ensure that the rules of operation and decorum contained herein are observed. The Mayor/Chairperson shall maintain control o f communication between Council/Agency members and among staff and public.
B. Communication with Council/Agency M embers. Council/Agency members shall request the floor from the Mayor/Chairperson before speaking. When one member of the Council/Agency has the floor and is speaking, other Council/Agency members shall not interrupt or otherwise disturb the speaker.
C. Communication with Members of the Public Addressing the Council/Agency. The Mayor/Chairperson shall open the floor for public comment/inquiries as appropriate. Council/Agency members may question a person addressing the Council/Agency at the conclusion of the person’s comments or upon expiration of the person’s time to speak. However, the Council/Agency should not engage in discussion or take action in connection with such comments. Once the speaker is seated, the presiding officer may refer an issue or public inquiry to the City Manager or staff for a brief response,
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further review and/ or further action, if appropriate. Alternatively, the Council/Agency may request the issue be agendized for discussion at a future Council/Agency meeting.
D. Members of the Audience.
1. All comments from the audience during Public Comments must be addressed to the Council/Agency as a body. It is the duty and responsibility of the Mayor to oversee and ensure the orderly conduct of the meeting.
2. Willful Interruption: No member of the audience shall willfully interrupt the orderly conduct at the meeting. In accordance with Government Code section 54957.9, the presiding officer may order the meeting room cleared and continue in session in the event that a meeting is willfully interrupted by a group or groups of persons so as to render the orderly conduct of such meeting unfeasible and order cannot be restored by the removal of such individuals. Only matters appearing on the agenda may be considered in such a session. The presiding officer shall direct the removal of any individual whose willful interruption or who fails to adhere to the Council meeting rules and who renders infeasible the orderly conduct of the meeting. In the event the removal of the individual or individuals willfully interrupting the meeting does not restore order, the president officer may order the meeting room cleared and continue in session. Media representatives shall be allowed to remain at the meeting except those representatives of whose willful conduct interrupted the meeting.
3. Disruptive or Threatening Behavior: Pursuant to Government Code section 54957.95, the presiding officer or their designee may remove, or cause the removal of, an individual for disrupting the meeting. The presiding officer or their designee may then remove the individual if they do not promptly cease their disruptive behavior. “Disrupting” means engaging in behavior during a meeting that actually disrupts, disturbs, impedes, or renders infeasible the orderly conduct of the meeting and includes but is not limited to, one of the following: (a) a failure to comply with reasonable and lawful regulati ons adopted by the legislative body, or (b) engaging in behavior that constitutes use of force or a true threat of force. A “true threat of force” means a threat that has sufficient indicia of intent and seriousness, that a reasonable observer would perceive it to be an actual threat to use force by the person making the threat. Prior to removing an individual, the presiding officer or their designee shall warn the individual that their behavior is disrupting the meeting and that their failure to cease their behavior may result in their removal. However, removal of an individual for engaging in behavior that constitutes use of force or a true threat of force does not require any warning from the presiding officer.
E. Rules of Procedure. In all matters not otherwise provided for herein the proceedings for the body shall be governed under “Rosenberg’s Rules of Order”, the most current edition.
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2.14.070 - Procedure for Addressing the City Council/Agency.
A. Specific Speaker Requirements . When a speaker is called, the speaker shall promptly approach the audience microphone and give his/her name in an audible tone of voice for the records . Failure to approach the audience microphone when called may preclude an opportunity to speak during that subject public comment period. A member of the public shall only address the body from the audience microphone, unless authorized by the Mayor/Chairperson to speak from another location. Members of the public shall direct all comments to the Mayor/Chairperson and the Council/Agency as a whole, and not to staff, individual members of the body, or the public. No questions shall be asked a Council or Agency or staff member except through the presiding officer.
Speakers will be permitted to complete their comments without interrupti on and no speaker may yield their allotted time to other speakers. No person shall be permitted to interrupt members of the body, staff presentations; or members of the public who are at the microphone during a meeting. Courtesy must be shown to others at all times.
The public does not need to be given an opportunity to speak on an item that has already been considered by a legislative body at a public meeting, if all interested members of the public had the opportunity to speak on the item before or duri ng its consideration, and if the item has not been substantially changed.
There shall be only one (1) opportunity for each individual for public comment on the entire consent calendar. There shall be only one (1) opportunity for each individual for public comment on multiple items of business on the agenda. There shall be only one (1) opportunity for public comment on items that are taken up for consideration together. This excludes Public Hearings.
Any person making personal, impertinent or slanderous remarks about members of the body, staff, or the public, or who shall become boisterous or threatening or personally abusive of the body, staff or members of the public shall be asked by the Mayor/Chairperson to cease and desist such activity, and may be requested or required to leave the meeting in the event the behavior continues to disrupt the meeting proceedings (see Section 112.14.090. Standards of Decorum).
B. Spokesperson for a Group. In order to expedite Council/Agency business and to avoid repetitious presentations, whenever an organization or group of persons wishes to address the Council or Agency on the same subject matter, it shall be proper for the presiding officer to inquire whether the organization or group has a spokesperson.
If so, spokespersons are subject to the same limits as other speakers.
C. Technology. Use of technology in the meeting room (such as Power Points and overhead displays) is restricted to staff, City consultants, applicants for a quasi - judicial approval, and appellant’s quasi-judicial approval.
D. Recording. Any person may record a meeting unless the body finds that the recording cannot continue without noise, illumination, or obstruction of view that constitutes, or would constitute, a persistent disruption of the proceedings.
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E. Public Hearings. Speakers wishing to address the Council/Agency on public hearing items shall not be required to fill -out a speaker card in order to be called on to speak. Speakers addressing the Council/Agency on a public hearing item shall be heard after the public hearing is opened by the presiding officer, following the Staff report presentation.
1. Call for Ex Parte C ontacts. The presiding officer shall inquire whether any member of the Council/Agency has had ex parte contacts with regard to the proceeding at the commencement of any quasi -judicial land use proceeding. Any member of the Council/Agency announcing an ex parte contact shall state for the record the nature and content of the contact. If such contact impairs the member’s impartiality, the member shall state this fact and abstain from participation in the matter.
2. Call for Abstentions. The presiding officer shall inquire whether any member of the Council/Agency must abstain from participating in the hearing due to a conflict of interest. Any member of the Council/Agency announcing a conflict of interest shall state the nature of the conflict, and shall not participate in the proceeding, unless the person’s vote is necessary to meet a requirement of a minimum number of votes necessary to take official action; provided, however, that the member shall not participate in any discussion or debate on the issue of which the conflict arises.
3. Time Limits. Speakers at hearings on legislative or administrative matters, other than legislative land use matters, will be limited to three (3) minutes.
Speakers at a hearing on a quasi-judicial matter, other than a quasi-judicial land use matter, shall be subject to the following time limits:
a. Staff Presentation (15 minutes maximum)
b. Applicant or affected party (7 minutes maximum)
c. Those in support of Appellant’s position (3 minutes per person, not to exceed 30 minutes
d. Those in opposition to Appellant’s position or other interested persons (3 minutes per person, not to exceed 30 minutes) e. Questions of Council/Agency members (No time limit)
f. Rebuttal by applicant or affected party. The scope of rebuttal i s limited to matters which were introduced during the hearing ( 5 minutes maximum)
g. The presiding officer may extend the maximum time allotted to any speaker with the concurrence of a majority of the Council/Agency.
Extensions of time shall be granted in one (1) minute increments.
4. Limitations. The presiding officer may exclude or limit cumulative, repetitious, or immaterial matter. The presiding officer may order the testimony, alternating those speaking in favor and those in opposition, or
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have all speaking in favor testify, followed by all those in opposition. The presiding officer, with the approval of the Council/Agency, may further limit the time and/or number of speakers at any public hearing; provided that the presiding officer shall announce any such restrictions prior to the commencement of the testimony.
5. Deliberations. At the end of public testimony and questions , the Council/Agency shall initiate deliberations by introducing a motion on the matter; continue the hearing; or keep the record open for additional written testimony. During deliberations, each member of the Council/Agency shall have the opportunity to comment on or discuss testimony given during the public hearing.
6. Public Documents. Documents submitted to the City as evidence or written testimony during a public hearing are public records. If such a document contains the name, address, including email address, and telephone number of the person, then it will be included in the record of the proceeding.
Because the name, address, including email address, and telephone number are part of a public record, this information will be generally disseminated to the public, and must be disclosed if a public records request is submitted for the documents.
2.14.080 Council/Agency Orals and Action Items.
A. The purpose of Council/Agency Orals is to allow Council/Agency to make general comments as a reference to staff on factual matters of community concern ; and provide updates or make brief announcements in a manner consistent with Government Code Section 54952.2.
B. All City Council/Agency requests for oral communications to be placed on an agenda shall be expressed in complete sentences and shall provide sufficient information to be in compliance with the Brown Act. All oral communications shall provide a brief, general description of each item of business to be transacted or discussed at the meeting and need not exceed 20 words.
C. Each Council/Agency Orals will generally be limited to a total of 10 minutes in length. Each Council/Agency member will be limited to a total of five (5) minutes in length to discuss all Council/Agency orals listed on the agenda, including requests for Council/Agency action items. The following guidelines apply to “Section 10.
Council/Agency Orals and Action Items”:
1. No action may be taken on Council/Agency Oral items without being placed on a subsequent agenda.
ORDINANCE NO. 2457
2. Requests for Council/Agency action items shall be introduced and explained by the Council/Agency member that placed the item on the Agenda.
3. Any action item requests and/or major policy issues to be considered on a subsequent agenda must have a Simple Majority roll call vote of the Council/Agency.
4. Any request for Council/Agency action items shall be referred back to staff to address program concepts, staffing needs, fiscal impact and implementation timelines. The City Manager shall identify a reasonable timeline to have the item return to the City Council for full consideration.
5. C ommission/Committee appointment recommendations shall also be made during Council/Agency Orals. Considering background check approval, all appointments will be made at a future meeting as a Consent Calendar action item.
D. Commission/Committee appointment recommendations shall also be made during Council/Agency Orals. Considering background check approval, all appointments will be made at a future meeting as a Consent Calendar action item.
E. No action may be taken on Council/Agency Oral items without being placed on a subsequent agenda. Any requests to be considered and/or major policy issues to be approved must have a Simple Majority roll call vote of the Council/Agency. To the extent possible, Council/Agency will confer with staff before raising matters under this agenda item. Any request for a Council action item shall be referred back to staff to address program concepts, staffing needs, fiscal impact and implementation timelines. The Cit y Manager shall identify a reasonable timeline to have the item return to the City Council for full consideration.
F. Requests for Council/Agency action items shall be introduced and explained by the Council/Agency member that placed the item on the Agenda.
Council/Agency members should endeavor to complete their presentations in three (3) minutes or less. Council/Agency members may request additional time to complete their presentations from the presiding officer. Such requests for additional time shall not be unreasonably denied. After the introduction and presentation of the item, each Council/Agency member shall be provided an opportunity to ask questions and comment on the request.
D.G. An item may be placed on a future agenda of the City Council/Agency by any of the following methods:
1. By the Mayor/Chairperson, City Manager, City Attorney, or City Clerk.
2. By a Simple Majority roll call vote of the Council/Agency (see Section
2.14.040. General Requirements, H. “Voting Procedures “Section 6.H . “Voting Procedures”)
ORDINANCE NO. 2457
All agenda items shall be placed on the agenda, and all agendas shall be prepared pursuant to the requirement of the Ralph M. Brown Act (California Government Code Section 54950 et seq.).
2.14.090 Standards of Decorum.
A. The Mayor /Chairperson shall be the presiding officer at Council/Agency meetings. The Chairperson shall be the presiding officer at Agency meetings. In the absence of the Mayor/Chairperson, the Mayor Pro Tem/ Vice Chairperson shall be presiding officer.
B. The presiding officer shall have the right to terminate any oral communication where such is not within the subject matter jurisdiction of the Council/Agency or is redundant or repetitious. Debates between Council /Agency members and the public should be discouraged.
C. Speakers shall not engage in willful conduct which interrupts the meeting or interferes with the orderly conduct of the meeting. Any person who becomes boisterous while addressing the Council/Agency or who otherwise disrupts the orderly conduct of the Council’s/Agency’s business shall be subject to removal from the Chambers after being admonished by the presiding officer.
D. Signs, placards, banners, horns, noise- making devices , or other similar items shall not be permitted in the audience during a Public Meeting if the presence of such item disturbs, disrupts or otherwise impedes the orderly conduct of the meeting. All persons attending a public meeting shall remain seated in the s eats provided, unless addressing the body at the podium or entering or leaving the meeting. No member of the audience shall willfully interrupt the orderly conduct at the meeting. The presiding officer shall direct the removal of any individual whose willf ul interruption renders infeasible the orderly conduct of the meeting. In the event the removal of the individual or individuals willfully interrupting the meeting does not restore order, the presiding officer may order the meeting room cleared and continue in session.
E. The Chief of P olice, or such other member or members of the police department or police reserve as may be designated, shall be sergeant -at-arms of the Council/Agency meetings. The sergeant-at-arms shall carry out all orders and instructions given by the presiding officer for the purpose of maintaining order and decorum at Council/Agency meetings. Upon instructions of the presiding officer, it shall be the duty of the sergeant -at-arms to remove and/or place any person who violates the order a nd decorum of the meeting under arrest, if necessary.
2.14.100 Council/Agency Meeting Length.
A. It is the intent of the Council/Agency that no item will be introduced or addressed on a Council/Agency agenda after the hour of 11:00 p.m. Furthermore, it is the Council’s/Agency’s intent that if the item introduced and being discussed by 11:00 p.m. is not concluded by 12:00 a.m., the Council/Agency should adjourn the meeting to another date. The intent and purpose of this policy is to encourage a reasonable hour in which
ORDINANCE NO. 2457
the Council/Agency business is discussed and to protect against fatigue in discussing and deciding important City issues.
2.14.110 Council/Agency and City Staff Conduct.
Governance of a City relies on the cooperative efforts of elected officials, who set policy, and City Staff, which analyze problems and issues, make recommendations, and implement and administer the Council’s/Agency’s policies. Therefore, every effort should be made by members of the City Council to be cooperative and show mutual respect for the contributions made by each individual for the good of the community.
A. It is important for the Staff to demonstrate respect for the Council/Agency , and vice versa, at all times. All Council/Agency members should be treated equally.
B. Council/Agency and Staff should treat one another as professionals. Clear, honest communication that respects the abilities, experience, and dignity of each individual is expected. Practice civility and decorum in all interactions with Council/Agency and City staff.
C. Never Members of the City Council should avoid publicly criticize criticizing an individual employee, including Council/Agency appointed officers. All critical comments about staff performance should only be made to the City Manager through the proper chain of command preferably by private correspondence or conversation. Without limiting any First Amendment, free speech rights, any City Council conduct which circumvents the employees’ privacy rights goals and objectives set forth in this Ordinance may result in the offending Councilmember being subject to criticism, public reprimand or censure by other members of the City Council.
D. C ouncil/Agency members shall deal with the administrative service solely through the City Manager, and neither the Council/Agency nor any member thereof shall give orders to any of the subordinates of the Cit y Manager, either publicly or privately .
Council/Agency members shall recognize and follow the appropriate chain of command for the entire City organization and each City Department.
E. Request for information by any Council/Agency member shall be provided to all members of the Council/Agency.
SECTION 14. Effective Date. T his Ordinance shall become effective thirty (30) days after approval by the Council.
SECTION 15. Publication. The City Clerk shall certify to the adoption of this Ordinance and shall cause the same to be published or posted according to law.
ORDINANCE NO. 2457
APPROVED AND ADOPTED this 14th day of December 2022.
_______________________________
Kimberly A. Cobos-Cawthorne, Mayor
ATTEST:
________________________
Christopher Jimenez, City Clerk
APPROVED AS TO FORM:
__________________________
Arnold M. Alvarez-Glasman, City Attorney
I HEREBY CERTIFY that the foregoing Ordinance was introduced at the regular meeting of the City Council on the 16
th day of November 2022 and was adopted by the City Council of the City of Montebello at its meeting held on the 14 th day of December 2022 by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
________________________
Christopher Jimenez, City Clerk
Exhibits:
• Exhibit A – Nationally Recognized Health and Heritage Months • Exhibit B – Proclamation/Certificate Request Form
Revised Per Council Consensus 6/8/2022
EXHIBIT A
NATIONALLY RECOGNIZED HEALTH AND HERITAGE MONTHS
January is:
• Human Trafficking Awareness Month
February is:
• Black History Month
• American Heart Month
March is:
• COVID-19 Memorial (March 13th)
• Women’s History Month
April Is:
• National Child Abuse Prevention
• National Volunteer Month (Ties into City programming) • Autism Awareness Month
• Armenian History Month
• National Donate Life Month
May Is:
• Asian Pacific Heritage Month
• National Pet Month
• Mental Health Month
• Motorcycle Safety Awareness Month
• National Military Appreciation Month
June Is:
• Lesbian/Gay/Bisexual/Transgender/Queer (LGBTQ) Pride Month • Juneteenth – Freedom Day
• Post-Traumatic Stress Disorder (PTSD) Awareness Month • National Scleroderma Awareness Month
• National Gun Violence Awareness Day
July Is:
• July is Parks and Recreation Month
• Juvenile Arthritis Awareness Month
August Is:
• National Wellness Month
September Is:
• National Hispanic Heritage Month (Sept 15- Oct 15)
• National Preparedness Month
Revised Per Council Consensus 6/8/2022
October Is:
• Breast Cancer Awareness Month
• Bullying Prevention Month
• Domestic Violence Awareness Month
• Down Syndrome Awareness Month
November Is:
• November – Events to raise awareness for men’s health issues (like prostate cancer and depression)
• Alzheimer Disease Awareness Month
December Is:
• Human Rights Month
THE FOLLOWING RECOGNIZED HEALTH AND HERITAGE MONTHS ARE SUBJECT
TO CHANGE BASED UPON APPROVAL, REMOVAL OR AMENDMENT BY
RESOLUTION OR CONSENSUS OF THE CITY COUNCIL.
EXHIBIT B
In Accordance with Ordinance No. 2443
City of Montebello
Proclamation/ Certificate Request Form
Proclamations/ Certificates are provided by the Mayor and City Council with the goal of honoring and celebrating events of increasing awareness of noteworthy issues among citizens across Montebello. These public service documents are strictly honorary and are not legally binding. Proclamation/ Certificate requests are reviewed on a case-by-case basis. The City reserves the right to decline any request as well as the right to make exceptions to the guidelines. To submit an application for a proclamation, please review the guidelines below and submit a completed Proclamation/ Certificate Request Form to the City Clerk’s Office at least two (2) weeks in advance.
Proclamations
Recognition of an organization’s event or special action. Recognition of a national or state non-profit event that coincides with a local event. Significant historical commemorations.
Recognition of extraordinary achievement for which formal language is provided.
Proclamations will not be issued for:
Proclamations are not automatically renewed. Requests must be made on an annual basis.
Proclamations for campaigns or events contrary to City policies will not be issued. Events or organization with no direct relationship to the City of Montebello. The request is for commercial/for-profit purposes.
The request conflicts with federally recognized months, weeks or days of observance.
Certificates of Recognition
Retirement – the person must have been employed with their current employer 25 years or more.
Birthday – the person must be at least 80 years of age. Wedding, church, or pastoral anniversary – 25 years or more. Significant education/ life achievements.
Exemplary service or significant contributions by an organization , business, or individuals to the City.
New business openings only at the request of the City of Montebello Chamber’s Office.
Approved Nationally Recognized Health & Heritage months.
Examples:
Recognition Type Proclamation Certificate of
Recognition
Athletic/ Academic Accomplishments
(Must be Montebello Resident)
X
Acts of Heroism
(Must be Montebello Resident)
X
In Memory of an Individual X
Regional Events
(Local, State, or National)
X
Guests from Other
(Countries or States)
X
Recognition of Corporate Support
(Local)
X
Extrodinary or significant contribution to City by
individual or group
X
Recognition of Anniversaries of Business and
Churches
X
National Health and Heritage Months X
In Accordance with Ordinance No. 2443
City of Montebello
Proclamation/ Certificate Request Form
CONTACT PERSON INFORMATION
Name of Contact Person
Street Address
City State Zip
Phone Number Cell Phone
Email
PROCLAMATION/ CERTIFICATE INFORMATION
Which one are you requesting? Proclamation Certificate
Name of Individual Group
or Organization
Name or Title of Event
Proclamation Date Choose One: Day Week Month
To be presented at the following event/ council meeting? How will you get the Proclamation/ Certificate?
Will pick up at City Clerk’s Office. Please mail to above address.
What do you want your Proclamation/ Certificate to say? A proclamation must have enough information to make four points.
ITEM # 7
CITY OF MONTEBELLO
CITY COUNCIL AND PUBLIC FINANCING AUTHORITY AGENDA STAFF REPORT TO: Honorable Mayor and City Council Members
FROM: René Bobadilla, City Manager
Arnold Alvarez-Glasman, City Attorney
BY: Arnold Glasman, City Attorney
SUBJECT: AMENDMENT OF AGREEMENT NO'S. 893, 3213, AND 3323 RELATED
TO QUIET CANNON MANAGEMENT AND ASSOCIATED BUSINESS
ENTITIES
DATE: December 14, 2022
RECOMMENDATION(S):
It is recommended that the City Council:
1. Approve the amended Agreements related to the Quiet Cannon Management (QMC) and associated hotel business entities in substantially the form as presented; and
2. Take such additional, related, action that may be desirable.
FISCAL IMPACT:
The proposed eleventh (11th) amendment to the food and beverage license agreement would result in an adjustment and update to the rent calculations relating to the gross revenue benchmarks applied in the License Agreement.
BACKGROUND/DISCUSSION:
Since 1974, Quiet Cannon Management (QCM) and its predecessor has been in contract with the City of Montebello to operate the Quiet Cannon banquet and meeting location, club house facility and related properties at the golf course. This right included exclusive rights for food and beverage sales and distribution for these various properties. When the Hilton Garden Inn and Home2Suites hotels were constructed, QCM’s exclusive rights were extended to these two properties.
CITY COUNCIL AND PUBLIC FINANCING AUTHORITY AGENDA REPORT - MEETING OF DECEMBER 14, 2022
The City has recently approved various improvements to the golf course property with the intent of remodeling and constructing new golf course facilities, a new club house property and Topgolf driving range and entertainment complex, as evidenced by recent City Council action. In addition, certain changes to the existing Quiet Cannon License Agreement have been developed to address the golf course improvements and potential golf course campus opportunities. Amendments to existing management agreements are also being presented to align the terms of the hotel management operations agreement to be consistent with the term of the Topgolf operations lease/sub-lease.
The agreements presented to the City Council are essential to accomplish the objectives of defining QCM’s role and rights vis-a-vie the new improvements at the Golf Course property and to retain continuity and consistency in the overall golf course and hotel facilities.
ENVIRONMENTAL:
Pursuant to the provisions of CEQA Section 15061(b)(3), the project is considered covered by the common sense exemption. The common sense CEQA exemption section states that “CEQA applies only to projects which have the potential for causing a significant effect on the environment” and also states that “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.” Consideration of the above-referenced agreements by the City Council does not have the potential to degrade the quality of the environment or have a significant effect on the environment.
Any future development will be subject to compliance with the Surplus Land Act, CEQA, and other applicable laws and regulations.
ANALYSIS:
N/A
SUMMARY:
There are three agreements presented to the City Council for consideration and approval:
Eleventh Amendment to the Existing License Agreement between the City and Quiet Cannon M<anagement (QCM)
Extension of the Management rights period for the Hilton Garden Inn hotel Extension of the Management rights period for the Home2Suites hotel If approved, these agreements would accomplish the following:
Establish an Eleventh Amendment to the existing License Agreement between the City and QCM
Extend the current hotel management agreements between the QCM affiliated
CITY COUNCIL AND PUBLIC FINANCING AUTHORITY AGENDA REPORT - MEETING OF DECEMBER 14, 2022
parties and the City for a period of thirty (30) years.
ATTACHMENT(S)
1. Agr. No. 3213 - First Amendment - H2S Renewal
2. Agr. No. 3323 - First Amendment - HGI Renewal
3. Agr. No. 893 - 11th Amendment to License Agreement
NEXT STEPS:
N/A
1 FIRST AMENDMENT TO AGREEMENT NO. 3213
HOTEL OPERATIONS, MANAGEMENT AND
MAINTENANCE
AGREEMENT
BETWEEN
CITY OF MONTEBELLO
AND
HOTEL2SUITES LLC
FOR
HOME2 SUITES BY HILTON
2 FIRST AMENDMENT TO HOTEL OPERATIONS, MANAGEMENT AND
MAINTENANCE AGREEMENT
This First Amendment to Hotel Operations, Management and Maintenance Agreement ("First Amendment") dated December 14, 2022, and is entered into by and between the City of Montebello, (hereinafter "City") and Hotel2Suites LLC, a California limited liability company, (hereinafter "H2S"), and pertains to the Home2 Suites by Hilton described further herein and intended to amend the term of H2S’ Hotel Operations, Management and Maintenance Agreement, dated _____________ (“Agreement”).
RECITALS
A.The City owns certain real property (the "Site") located in the City of Montebello known as 988 Via San Clemente and surrounded by the Montebello Championship Golf Course, Country Club, Quiet Cannon and Hilton Garden Inn (the "Golf Course Property"), with the Golf Course Property and the foregoing listed improvements referred to hereinafter as the "CAMPUS". The City desires the operations, management and maintenance of a premium hotel facility on the Site (the "Hotel Facility"), and desires to enter into an agreement with H2S to continue to provide the Home2 Suites by Hilton Franchise for the Hotel Facility, and to operate, manage and maintain said Hotel Facility, as well as provide food & beverage for the Hotel Facility through Quiet Cannon Montebello Inc.
B.The City has no expertise or experience with respect to providing a major Hotel franchise and food + beverage, operating, managing, or maintaining facilities such as the Hotel Facility, nor with creating and implementing an actionable long-term business plan for the Hotel Facility that compliments and works in synergy with the Golf Course Property and CAMPUS, which includes: Montebello Championship Golf Course, Hilton Garden Inn, Quiet Cannon, and Home2Suites.
C.The City desires experienced business ownership with quality operations, management and hotel room sales and marketing experience and services for the Hotel Facility with an ongoing business plan for the continued success thereof. Among other things, such expertise and services will: provide the expertise and competent management necessary to enhance City revenues and optimize the synergy between multiple operations on the Golf Course Property; bring a "Campus Environment and Guest Experience" to the CAMPUS; optimize use of the Hotel Facility; develop and manage a marketing, promotion and sales team for the Hotel Facility; enhance the reputation and image of the Hotel Facility as well as the entire CAMPUS, Montebello business community and the City of Montebello. The CAMPUS has a major impact on the overall image of the City of Montebello as viewed by the community at-large and Southern California cities, businesses, visitors, and guests.
D.H2S is in the business of developing, operating, managing, maintaining, and improving hotel facilities, including providing those services described herein the Agreement. H2S warrants and represents that it possesses the unique knowledge, skill, and experience necessary to provide the quality and level of services which the City desires.
3 E.The City is desirous of having H2S provide the services described in the Agreement with respect to the Home2 Suites Franchise, business plan and development, operations management, maintenance, and operation of the Hotel Facility commencing on the first date of the "Term" defined below, and H2S desires such engagement on the terms and conditions set forth herein.
F.It is now contemplated by City to enhance the Golf Course by building two new high-tech golf courses, one of which is night lit, along with a new clubhouse facility and Topgolf. Hotel2Suites LLC dba Home2 Suites by Hilton Los Angeles Montebello hereby agrees and approves of such improvements in place of the old Golf Course facility.
G.Condition of Effectiveness of this Agreement. This Agreement is operational and effective only upon the approval of any and all Topgolf agreements for construction and operation with the City for the Driving Range Project and Modernization Project.
NOW, THEREFORE, in consideration of the mutual promises, contained herein and other considerations the sufficiency of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:
ARTICLE I.
OPERATIONS PHASE
Section 1.1 Term. shall be amended as follows:
The "Operations Phase" shall commence on December 14, 2022 and shall continue for thirty (30) years and expire on December 13, 2052.
The extension set forth in Section 1.1 shall be subject to the determination by a qualified real estate evaluation which reviews, evaluates and concludes that the usable lifetime expectancy and economic value of the hotel is equal to or exceeds the period of thirty (30) years. Upon such evaluation being submitted to the City, the term extensions will then be in effect.
[Signatures on following page]
4 IN WITNESS WHEREOF, the parties have executed this First Amendment as of the date first written above.
“City”
ATTEST: CITY OF MONTEBELLO
By: By:
City Clerk City Manager
Approved as to form:
By:
City Attorney
Hotel2 Suites LLC
______________________________
Its Managing Member, Brad Perrin
Approved as to form:
_____________________________
John Harper, Counsel for H2S
FIRST AMENDMENT TO AGREEMENT NO. 3323
HOTEL OPERATIONS, MANAGEMENT AND MAINTENANCE
AGREEMENT BETWEEN CITY OF MONTEBELLO
AND HOTEL ADVENTURES LLC
FOR HILTON GARDEN INN BY HILTON
2 FIRST AMENDMENT TO HOTEL OPERATIONS, MANAGEMENT AND
MAINTENANCE AGREEMENT
This First Amendment to Hotel Operations, Management and Maintenance Agreement ("First Amendment") dated December 14, 2022, and is entered into by and between the City of Montebello, (hereinafter "City") and Hotel Adventures LLC, a California limited liability company, (hereinafter "HALLC"), and pertains to the Hilton Garden Inn by Hilton described further herein and intended to amend the term of HALLC’s Hotel Operations, Management and Maintenance Agreement, dated _____________ (“Agreement”).
.
RECITALS
A.The City owns certain real property (the "Site") located in the City of Montebello known as 801 Via San Clemente and surrounded by the Montebello Championship Golf Course, Country Club, Quiet Cannon and Home2 Suites by Hilton (the "Golf Course Property"), with the Golf Course Property and the foregoing listed improvements referred to hereinafter as the "CAMPUS". The City desires the operations, management and maintenance of a premium hotel facility on the Site (the "Hotel Facility"), and desires to enter into an agreement with HALLC to continue to provide the Hilton Garden Inn by Hilton Franchise for the Hotel Facility, and to operate, manage and maintain said Hotel Facility, as well as provide food & beverage for the Hotel Facility through Quiet Cannon Montebello Inc.
B.The City has no expertise or experience with respect to providing a major Hotel franchise and food + beverage, operating, managing, or maintaining facilities such as the Hotel Facility, nor with creating and implementing an actionable long-term business plan for the Hotel Facility that compliments and works in synergy with the Golf Course Property and CAMPUS, which includes: Montebello Championship Golf Course, Hilton Garden Inn, Quiet Cannon, and Home2Suites.
C.The City desires experienced business ownership with quality operations, management and hotel room sales and marketing experience and services for the Hotel Facility with an ongoing business plan for the continued success thereof. Among other things, such expertise and services will: provide the expertise and competent management necessary to enhance City revenues and optimize the synergy between multiple operations on the Golf Course Property; bring a "Campus Environment and Guest Experience" to the CAMPUS; optimize use of the Hotel Facility; develop and manage a marketing, promotion and sales team for the Hotel Facility; enhance the reputation and image of the Hotel Facility as well as the entire CAMPUS, Montebello business community and the City of Montebello. The CAMPUS has a major impact on the overall image of the City of Montebello as viewed by the community at-large and Southern California cities, businesses, visitors, and guests.
D.HALLC is in the business of developing, operating, managing, maintaining, and improving hotel facilities, including providing those services described herein the Agreement. HALLC
3 warrants and represents that it possesses the unique knowledge, skill, and experience necessary to provide the quality and level of services which the City desires.
E.The City is desirous of having HALLC provide the services described in this First Amendment with respect to the Hilton Garden Inn Franchise, business plan and development, operations management, maintenance, and operation of the Hotel Facility commencing on the first date of the "Term" defined below, and HALLC desires such engagement on the terms and conditions set forth herein.
F.It is now contemplated by City to enhance the Golf Course by building two new high-tech golf courses, one of which is night lit, along with a new clubhouse facility and Topgolf. Hotel Adventures LLC dba Hilton Garden Inn Los Angeles Montebello hereby agrees and approves of such improvements in place of the old Golf Course facility.
G.The City and HALLC desire to amend the term of HALLC to operate the Hilton Garden Inn as set forth in Section 1.1.
H.Condition of Effectiveness of this Agreement. This Agreement is operational and effective only upon the approval of any and all Topgolf agreements for construction and operation with the City for the Driving Range Project and Modernization Project.
NOW, THEREFORE, in consideration of the mutual promises, contained herein and other considerations the sufficiency of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:
ARTICLE I. OPERATIONS PHASE
Section 1.1 Term. shall be amended as follows:
The "Operations Phase" shall commence on December 26, 2022 and shall continue for thirty (30) years and expire on December 23, 2052.
The extension set forth in Section 1.1 shall be subject to the determination by a qualified real estate evaluation which reviews, evaluates and concludes that the usable lifetime expectancy and economic value of the hotel is equal to or exceeds the period of thirty (30) years. Upon such evaluation being submitted to the City, the term extensions will then be in effect.
[Signatures on following page]
4 IN WITNESS WHEREOF, the parties have executed this First Amendment as of the date first written above.
“City”
ATTEST: CITY OF MONTEBELLO
By: By:
Christopher Jimenez Rene Bobadilla
City Clerk City Manager
Approved as to form:
By:
Arnold M. Alvarez-Glasman
City Attorney
Hotel Adventures LLC
______________________________
Its Managing Member, Brad Perrin
Approved as to form:
_____________________________
John Harper, Counsel for HALLC
1 AGREEMENT NO. 893
ELEVENTH AMENDMENT TO LICENSE AGREEMENT
This Eleventh Amendment to the License Agreement (“Agreement”) effective December 14, 2022, and is entered into by and between the CITY OF MONTEBELLO, a municipal corporation (hereinafter referred to as “CITY”) and QUIET CANNON MONTEBELLO INC., a California corporation, (hereinafter referred to as “The Licensee” ), with reference to the following facts:
RECITALS
A. City and Licensee (referred to individually at times as a “Party” or jointly as the “Parties”) are Parties to that certain unrecorded License Agreement originally dated August 15, 1978, and subsequently amended on ten (10) previous occasions (the “License Agreement”), which concerns that certain real property owned by the City and generally located at 988 Via San Clemente, City of Montebello, California, 90640, and commonly known as the Montebello Municipal Golf Course (the “Property”).
B. Among other things, the License Agreement grants Licensee the exclusive right to provide, prepare, distribute, serve and sell all food, beverage, and other consumables to patrons of the 118-acre Golf Course, as well the exclusive right to operate the Quiet Cannon Conference & Events Center (“Quiet Cannon”), and the exclusive right to operate the existing clubhouse facility located on the Property.
C. By way of the Eighth Amendment, the City acknowledged Licensee’s right to provide food, beverage, and related services to the then-newly constructed Hilton Garden Inn hotel located on a portion of the Property; and subsequently, by way of the Tenth Amendment, the City acknowledged Licensee’s right to provide food, beverage, and related services to the then- newly constructed Home2Suites hotel located on a portion of the Property (jointly the “Existing Hotels”).
D. The City intends to upgrade and modernize the Property and associated amenities with a two (2)-part project: (1) construction of a modern driving range complex with entertainment, restaurant / bar, and retail amenities on a, 18-acre portion of the Golf Course that, following construction, will be operated by a third-party selected by the City under a lease agreement (“Driving Range Project”); and (2) redesign and modernization of the remainder of the Golf Course with a new 9-hole championship golf course, new clubhouse to replace the existing Clubhouse (“New Clubhouse”), and associated amenities (the “Golf Course Project”). The Licensee acknowledges that they have been included in the design and location of the Golf Course Project, including all improvements and adjustments to or construction of buildings, golf course improvements, parking realignment and related site modifications, and by entering into this Eleventh Amendment agree to the design and location of the improvements of the Golf Course Project.
E. City and Licensee desire to enter into this Eleventh Amendment to the License Agreement to memorialize their goals, rights, and objectives relating to Driving Range Project, the Golf Course Project, and the Property generally for the remaining term of the License Agreement.
2 .
AGREEMENT
1. PREMISES AMENDMENT:
Paragraph 3 of the License Agreement (PREMISES) is amended by deleting sub-paragraphs (b)(1), (b)(2), (b)(3), and (b)(4) and in their entirety, and replacing said paragraphs with a new subparagraphs (b) and (d) to read as follows:
(b) This License Agreement also permits Licensee to use the additional premises of the current golf course cart barn storage facility, current golf course pro shop facility and current golf course men’s and women’s locker rooms in accordance with the terms of the License Agreement, as such areas are shown on Exhibit “A” to the 11th Amendment to this License Agreement. Within sixty (60) days of the effective date of the 11th Amendment, City shall be responsible for the removal of items from these premises and leave Licensee with the premises in a usable condition, clean of debris and ready for interior tenant improvements, which Licensee shall have the right (but not the obligation) to improve. All F&B sales generated by the new expanded indoor and outdoor premises shall be included as revenues in accordance with percentage rent paid to City by Licensee in the existing License Agreement, while other uses such as storage space, offices, green rooms, bridal rooms and other uses will require no additional rent to be paid by Licensee to City. With the removal of the golf operation from the Clubhouse and re-formatting of the golf course, the current putting green space and starter become unneeded and shall be re-formatted by City to provide a wedding ceremony space with landscaping and lighting, as well as ancillary landscaping improvements for Licensee, which shall be available for rent in addition to F&B sales which will generate additional revenue for the City.
(d).This License Agreement among other things grants Licensee the exclusive right to provide, prepare, distribute, serve, and sell all food, beverage, and other consumables to patrons of the golf course property: specifically to the area of the current championship golf course, Bicknell Park, and any additional contiguous land areas that the CITY may acquire or control along the golf course property.
2. HOTEL FACILITIES AMENDMENT:
Paragraph (52) of the License Agreement, as added by the Eight Amendment and subsequently modified by the Tenth Amendment by adding subparagraph (b), is hereby modified by adding subparagraph (c), (d) and (e) as follows:
(c) It is hereby acknowledged by the Parties that term of the hotel management agreement the between the City of Montebello and Hotel Adventures dated November 29, 2017, pertaining to the Hilton Garden Inn by Hilton, has been extended to August 24, 2052, by way of a first amendment to the hotel management agreement dated even herewith. (d) It is hereby acknowledged by the Parties that the term of the hotel management and agreement between the City of Montebello and Hotel2Suites LLC dated May 26, 2016,