Montebello City Council
December 21, 2022

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and additions thereto are true, correct, and complete to the best of Grantee’s knowledge. In the event that any part of the application and any approved modification and addition thereto is untrue, incorrect, incomplete, or misleading in such a manner that would substantially affect Cal ICH approval, disbursement, or monitoring of the funding and the grants or activities governed by this Agreement, then Cal ICH may declare a breach of this Agreement and take such action or pursue such remedies as are legally available.

4) Reporting, Evaluation, and Audits

a) Reporting Requirements

i. Grantee is required to provide Cal ICH or its agents with all data and outcomes that may inform an assessment of the funded project. Grantees shall report quarterly and have one Final Work Product submitted prior to this Agreement’s termination. Grantees will be required to provide:

• Outreach and service path data at the anonymized, individual level; • Current housing status of persons served in the aggregate; • Status of funding as presented in the Cal ICH approved, standardized budget; and
• C ontinued confirmation that projects receiving ERF funds are populated timely into HMIS and use Cal ICH supplied funding codes.

Cal ICH’s discretion in identifying which information shall be included in these reports is absolute and final.

Pursuant to Health and Safety Code (HSC) Section 50254, grantees shall provide data elements, including, but not limited to, health information, in a manner consistent with state and federal law, to their local Homeless Management Information System for tracking in the statewide Homeless Data Integration System.

Pursuant to HSC Section 50254(b)(3), Grantees shall report individual, client-level data for persons served by grant funding to the council, in addition to any data reported through local Homeless Management Information System, as required by the council for the purposes of research and evaluation of grant performance, service pathways, and outcomes for people served.

Pursuant to HSC Section 50254(b)(4), Council staff may use information reported directly from grantees and through statewide Homeless Data Integration System for the purposes of research and evaluation of grant performance, service pathways, and outcomes for people served.

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ii. The quarterly reports shall be submitted on a template to be provided by Cal ICH at least 90 days prior to the first reporting deadline. Cal ICH may request interim reports as needed and will provide no less than 30 days’ notice to Grantees.

iii. If the Grantee fails to provide any such report, Cal ICH may recapture any portion of the amount authorized by this Agreement with a 14-day written notification.

b) Evaluation

i. At Cal ICH’s discretion, Grantees shall participate in a program evaluation regarding their implementation of ERF awards. To support this effort, the Cal ICH will contract a third party to complete the evaluation.

ii. Grantees are expected to be close partners with Cal ICH for this program evaluation and for all evaluative aspects of this Program. This means timely and accurate reporting, candid communication of success or challenges, and availability of persons, information, or materials. More specifically, Grantees must cooperate with Cal ICH or its designee as reasonably required to implement an evaluation plan. This includes providing or facilitating the collection of data and materials as reasonably requested by Cal ICH or its designee.

iii. For the purpose of evaluation, Cal ICH or its designee may visit sites related to the project and film, tape, photograph, interview, and otherwise document Grantee’s operations during normal business hours and with reasonable advance notice. Cal ICH will comply with Grantee’s site visit terms during any site visits.
iv. Grantees should maintain active data, documents, and filings in anticipation of this evaluation. Special care should be taken to organize and preserve internal work products that guided implementation by the Grantee or subgrantee.

v. Grantees shall notify Cal ICH and provide copies of any reports or findings if Grantee conducts or commissions any third-party research or evaluation regarding their funded project.

vi. All terms and conditions that apply to reporting similarly apply to evaluation.

c) Auditing

Cal ICH reserves the right to perform or cause to be performed a financial audit.

At Cal ICH request, the Grantee shall provide, at its own expense, a financial

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audit prepared by a certified public accountant. Should an audit be required, the Grantee shall adhere to the following conditions:

i) The audit shall be performed by an independent certified public accountant.

ii) The Grantee shall notify Cal ICH of the auditor's name and address immediately after the selection has been made. The contract for the audit shall allow access by Cal ICH to the independent auditor's working papers.

iii) The Grantee is responsible for the completion of audits and all costs of preparing audits.

iv) If there are audit findings, the Grantee must submit a detailed response acceptable to Cal ICH for each audit finding within 90 days from the date of the audit finding report.

5) Inspection and Retention of Records

a) Record Inspection

Cal ICH or its designee shall have the right to review, obtain, and copy all records and supporting documentation pertaining to performance under this Agreement. The Grantee agrees to provide Cal ICH, or its designee, with any relevant information requested. The Grantee agrees to give Cal ICH or its designee access to its premises, upon reasonable notice and during normal business hours, for the purpose of interviewing employees who might reasonably have information related to such records, and of inspecting and copying such books, records, accounts, and other materials that may be relevant to an investigation of compliance with the Encampment Resolution Funding Program laws, Cal ICH guidance or directives, and this Agreement.

b) Record Retention

The Grantee further agrees to retain all records described in subparagraph A for a minimum period of five (5) years after the termination of this Agreement.

If any litigation, claim, negotiation, audit, monitoring, inspection, or other action has been commenced before the expiration of the required record retention period, all records must be retained until completion of the action and resolution of all issues which arise from it.

6) Breach and Remedies

a) Breach of Agreement

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Breach of this Agreement includes, but is not limited to, the following events:

i. Grantee’s failure to comply with the terms or conditions of this Agreement.

ii. Use of, or permitting the use of, Encampment Resolution funds provided under this Agreement for any ineligible activities.

iii. Any failure to comply with the deadlines set forth in this Agreement.

b) Remedies for Breach of Agreement

In addition to any other remedies that may be available to Cal ICH in law or equity for breach of this Agreement, Cal ICH may:

i. C onduct a program monitoring which will include a corrective action plan (CAP) with findings, remedies, and timelines for resolving the findings.

ii. Bar the Grantee from applying for future Encampment Resolution funds;

iii. Revoke any other existing Encampment Resolution award(s) to the Grantee;

iv. Require the return of any unexpended Encampment Resolution funds disbursed under this Agreement;

v. Require repayment of Encampment Resolution funds disbursed and expended under this Agreement;

vi. Require the immediate return to Cal ICH of all funds derived from the use of Encampment Resolution funds

vii. Seek, in a court of competent jurisdiction, an order for specific performance of the defaulted obligation or participation in the technical assistance in accordance with Encampment Resolution requirements.

c) All remedies available to Cal ICH are cumulative and not exclusive.

d) Cal ICH may give written notice to the Grantee to cure the breach or violation within a period of not less than 14 days.

7) Waivers

No waiver of any breach of this Agreement shall be held to be a waiver of any prior or subsequent breach. The failure of Cal ICH to enforce at any time the provisions of this Agreement, or to require at any time, performance by the Grantee of these

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provisions, shall in no way be construed to be a waiver of such provisions nor to affect the validity of this Agreement or the right of Cal ICH to enforce these provisions.

8) Nondiscrimination

During the performance of this Agreement, Grantee and its subrecipients shall not unlawfully discriminate, harass, or allow harassment against any employee or applicant for employment because of sex (gender), sexual orientation, gender identity, gender expression, race, color, ancestry, religion, creed, national origin (including language use restriction), pregnancy, physical disability (including HIV and AIDS), mental disability, medical condition (cancer/genetic characteristics), age (over 40), genetic information, marital status, military and veteran status, denial of medical and family care leave or pregnancy disability leave, or any other characteristic protected by state or federal law. Grantees and Sub grantees shall ensure that the evaluation and treatment of their employees and applicants for employment are free from such discrimination and harassment. Grantee and its subrecipients shall comply with the provisions of California’s laws against discriminatory practices relating to specific groups: the California Fair Employment and Housing Act (FEHA) (Gov. Code, Section 12900 et seq.); the regulations promulgated thereunder (Cal. Code Regs., tit. 2, Section 11000 et seq.); and the provisions of Article 9.5, Chapter 1, Part 1, Division 3, Title 2 of the Government Code (Gov. Code, Section 11135 - 11139.5). Grantee and its subrecipients shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreement.

9) Conflict of Interest

All Grantees are subject to state and federal conflict of interest laws. Failure to comply with these laws, including business and financial disclosure provisions, will result in the application being rejected and any subsequent contract being declared void. Other legal action may also be taken. Additional applicable statutes include, but are not limited to, Government Code Section 1090 and Public Contract Code Sections 10410 and 10411.

a) Current State Employees: No State officer or employee shall engage in any employment, activity, or enterprise from which the officer or employee receives compensation or has a financial interest, and which is sponsored or funded by any State agency, unless the employment, activity, or enterprise is required as a condition of regular State employment. No State officer or employee shall contract on his or her own behalf as an independent Grantee with any State agency to provide goods or services.

b) Former State Employees: For the two-year period from the date he or she left State employment, no former State officer or employee may enter into a contract

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in which he or she engaged in any of the negotiations, transactions, planning, arrangements, or any part of the decision-making process relevant to the contract while employed in any capacity by any State agency. For the twelve- month period from the date he or she left State employment, no former State officer or employee may enter into a contract with any State agency if he or she was employed by that State agency in a policy-making position in the same general subject area as the proposed contract within the twelve-month period prior to his or her leaving State service.

c) Employees of the Grantee: Employees of the Grantee shall comply with all applicable provisions of law pertaining to conflicts of interest, including but not limited to any applicable conflict of interest provisions of the Political Reform Act of 1974 (Gov. Code, Section 81000 et seq.).

d) Representatives of a County: A representative of a county serving on a board, committee, or body with the primary purpose of administering funds or making funding recommendations for applications pursuant to this chapter shall have no financial interest in any contract, program, or project voted on by the board, committee, or body on the basis of the receipt of compensation for holding public office or public employment as a representative of the county.

10) Drug-Free Workplace Certification

Certification of Compliance: By signing this Agreement, Grantee hereby certifies, under penalty of perjury under the laws of State of California, that it and its subrecipients will comply with the requirements of the Drug-Free Workplace Act of 1990 (Gov. Code, Section 8350 et seq.) and have or will provide a drug-free workplace by taking the following actions:

Publish a statement notifying employees and subrecipients that unlawful manufacture distribution, dispensation, possession, or use of a controlled substance is prohibited and specifying actions to be taken against employees, Grantees, or subrecipients for violations, as required by Government Code Section 8355, subdivision (a)(1).

a) Establish a Drug-Free Awareness Program, as required by Government Code Section 8355, subdivision (a)(2) to inform employees, Grantees, or subrecipients about all of the following:

i. The dangers of drug abuse in the workplace;

ii. Grantee’s policy of maintaining a drug-free workplace;

iii. Any available counseling, rehabilitation, and employee assistance program; and

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iv. Penalties that may be imposed upon employees, Grantees, and subrecipients for drug abuse violations.

b) Provide, as required by Government Code Section 8355, subdivision (a)(3), that every employee and/or subrecipient that works under this Agreement:

i. Will receive a copy of Grantee’s drug-free policy statement, and

ii. Will agree to abide by terms of Grantee’s condition of employment or subcontract.

11) Child Support Compliance Act

For any Contract Agreement in excess of $100,000, the Grantee acknowledges in accordance with Public Contract Code 7110, that:

a) The Grantee recognizes the importance of child and family support obligations and shall fully comply with all applicable state and federal laws relating to child and family support enforcement, including, but not limited to, disclosure of information and compliance with earnings assignment orders, as provided in Chapter 8 (commencing with Section 5200) of Part 5 of Division 9 of the Family Code; and

b) The Grantee, to the best of its knowledge is fully complying with the earnings assignment orders of all employees and is providing the names of all new employees to the New Hire Registry maintained by the California Employment Development Department.

12) Special Conditions – Grantees/Subgrantee

The Grantee agrees to comply with all conditions of this Agreement including the Special Conditions set forth in Exhibit E
. These conditions shall be met to the
satisfaction of Cal ICH prior to disbursement of funds. The Grantee shall ensure that all Subgrantees are made aware of and agree to comply with all the conditions of this Agreement and the applicable State requirements governing the use of Encampment Resolution funds. Failure to comply with these conditions may result in termination of this Agreement.

a) The Agreement between the Grantee and any Subgrantee shall require the Grantee and its Subgrantees, if any, to:

i. Perform the work in accordance with Federal, State and Local housing and building codes, as applicable.

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ii. Maintain at least the minimum State-required worker’s compensation for those employees who will perform the work or any part of it.

iii. Maintain, as required by law, unemployment insurance, disability insurance, and liability insurance in an amount that is reasonable to compensate any person, firm or corporation who may be injured or damaged by the Grantee or any Subgrantee in performing the Work or any part of it.

iv. Agree to include and enforce all the terms of this Agreement in each subcontract.

13) Compliance with State and Federal Laws, Rules, Guidelines and Regulations

The Grantee agrees to comply with all state and federal laws, rules and regulations that pertain to construction, health and safety, labor, fair employment practices, environmental protection, equal opportunity, fair housing, and all other matters applicable and/or related to the Encampment Resolution program, the Grantee, its subrecipients, and all eligible activities.

Grantee shall also be responsible for obtaining any and all permits, licenses, and approvals required for performing any activities under this Agreement, including those necessary to perform design, construction, or operation and maintenance of the activities. Grantee shall be responsible for observing and complying with any applicable federal, state, and local laws, rules or regulations affecting any such work, specifically those including, but not limited to, environmental protection, procurement, and safety laws, rules, regulations, and ordinances. Grantee shall provide copies of permits and approvals to Cal ICH upon request.

14) Inspections

a) Grantee shall inspect any work performed hereunder to ensure that the work is being and has been performed in accordance with the applicable federal, state and/or local requirements, and this Agreement.

b) Cal ICH reserves the right to inspect any work performed hereunder to ensure that the work is being and has been performed in accordance with the applicable federal, state and/or local requirements, and this Agreement.

c) Grantee agrees to require that all work that is determined based on such inspections not to conform to the applicable requirements be corrected and to withhold payments to the subrecipient until it is corrected.

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15) Litigation

a) If any provision of this Agreement, or an underlying obligation, is held invalid by a court of competent jurisdiction, such invalidity, at the sole discretion of Cal ICH, shall not affect any other provisions of this Agreement and the remainder of this Agreement shall remain in full force and effect. Therefore, the provisions of this Agreement are and shall be deemed severable.

b) The Grantee shall notify Cal ICH immediately of any claim or action undertaken by or against it, which affects or may affect this Agreement or Cal ICH, and shall take such action with respect to the claim or action as is consistent with the terms of this Agreement and the interests of Cal ICH.

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Encampment Resolution Funding Program
Standard Agreement

EXHIBIT E

SPECIAL TERMS AND CONDITIONS

1) All proceeds from any interest-bearing account established by the Grantee for the deposit of funds, along with any interest-bearing accounts opened by subrecipients to the Grantee for the deposit of funds, must be used for eligible activities and reported on as required by Cal ICH.

2) Grantee shall utilize its local Homeless Management Information System (HMIS) to track Encampment Resolution funded projects, services, and clients served. Grantee will ensure that HMIS data are collected in accordance with applicable laws and in such a way as to identify individual projects, services, and clients that are supported by funding (e.g., by creating appropriate - Encampment Resolution specific funding sources and project codes in HMIS).

3) Grantee shall participate in and provide data elements, including, but not limited to, health information, in a manner consistent with federal law, to the statewide Homeless Management Information System (known as the Homeless Data Integration System or “HDIS”), in accordance with their existing Data Use Agreement entered into with the Council, if any, and as required by Health and Safety Code Section 50254. Any health information provided to, or maintained within, the statewide Homeless Management Information System shall not be subject to public inspection or disclosure under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code). For purposes of this paragraph, “health information” means “protected health information,” as defined in Part 160.103 of Title 45 of the Code of Federal Regulations, and “medical information,” as defined in subdivision (j) of Section 56.05 of the Civil Code. The Council may, as required by operational necessity, amend or modify required data elements, disclosure formats, or disclosure frequency. Additionally, the Council, at its discretion, may provide Grantee with aggregate reports and analytics of the data Grantee submits to HDIS in support of the Purpose of this Agreement and the existing Data Use Agreement.

4) Grantee agrees to accept technical assistance as directed by Cal ICH or by a contracted technical assistance provider acting on behalf of Cal ICH and report to Cal ICH on programmatic changes the grantee will make as a result of the technical assistance and in support of their grant goals.

5) Grantee should establish a mechanism for people with lived experience of homelessness to have meaningful and purposeful opportunities to inform and shape

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all levels of planning and implementation, including through opportunities to hire people with lived experience.

6) Cal ICH maintains sole authority to determine if a grantee is acting in compliance with the program objectives and may direct grantees to take specified actions or risk breach of this Agreement. Grantees will be provided reasonable notice and Cal ICH’s discretion in making these determinations are absolute and final.

ITEM # 13

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:

Michael Solorza, Director of Finance
SUBJECT: APPROVE PROFESSIONAL SERVICES AGREEMENT NO. 4055 WITH URBAN FUTURES, INC. TO PROVIDE CONTINUING DISCLOSURE

SERVICES

DATE: December 21, 2022

RECOMMENDATION(S):

It is recommended that the City Council:

1. Approve Professional Services Agreement No. 4055 with Urban Futures, Inc. (Urban Futures, Inc.) in an amount not to exceed $99,600 ($33,200 annually) over an initial three (3) year term; and

2. Take any additional actions necessary to effectuate the procurement of services.

FISCAL IMPACT:

The total amount of this agreement shall not exceed $99,600 ($33,200 annually) over the initial three (3) year term. Sufficient funds for this expenditure will be budgeted annually in Fund 410 (Debt Service), Fund 620 (Hilton Garden Inn), and Fund 625 (Home 2 Suites). The services provided will be for continuing disclosure and post-issuance compliance services related to the City’s various outstanding debt issues.

BACKGROUND/DISCUSSION:

The Department of Finance relies on financial advisors' specialized expertise and resources to assist with specific financial and operational projects. For long-term debt financing, the City hires the services of a financial advisor that develops issuance strategies, provides bond marketing options, and general guidance to assist in market

CITY COUNCIL AND PUBLIC FINANCING AUTHORITY AGENDA REPORT - MEETING OF DECEMBER 21, 2022

opportunity monitoring and rating agency presentation. Additionally, the financial advisor helps City staff in policy development, operational reviews, financial modeling and analysis, specialized forecasts, financial reports, and capital planning. The financial advisor provides a high degree of technical expertise, skills, and knowledge unavailable from City staff.

According to their continuing disclosure agreements, bonds issued by local governments are subject to ongoing monitoring and reporting for compliance with tax and disclosure requirements. In addition to securities and tax requirements, governmental issuers may face a variety of other compliance obligations, such as bond indenture requirements, state and local law, and policy requirements. To meet these obligations, staff requests authorization to establish an agreement with Urban Futures Inc. (UFI) for continuing disclosure and post-issuance compliance services related to the City’s security, debt, loan, and other outstanding obligations.

Urban Futures is based in Southern California. They have over 75 years of experience providing financial services for private and public entities. Their public management group brings a dynamic blend of technical and practical approaches to financial management. UFI has assisted the City with two recent bond issues: Lease Revenue Bond Series 2022A (Golf Course Renovation) and Lease Revenue Bond Series 2022B (Topgolf Project). UFI currently serves as the City's Financial Advisor (FA) and provided continuing disclosure assistance with the 2022A and 2022B bond issuances. Staff is confident their services can best meet the needs of the City.

The services provided by Urban Futures are professional and exempt from the competitive bidding process pursuant to Montebello Municipal Code 3.20.050H, which states:

Purchases of supplies and equipment for city use shall be made and accomplished in conformity with Section 3.20.080 or Section 3.20.090 except:

Nothing shall be construed to preclude the City from awarding a written contract for professional type services, as defined by case or statutory law, without complying with the provisions of this article. The term "professional services" means services entailing a high degree of specialized technical or mental skill, in a recognized field of expertise. 741

ENVIRONMENTAL:

N/A

ANALYSIS:

N/A

CITY COUNCIL AND PUBLIC FINANCING AUTHORITY AGENDA REPORT - MEETING OF DECEMBER 21, 2022

SUMMARY:

Staff recommends the City Council authorize the City Manager to execute Professional Service Agreement No. 4055 with Urban Futures Inc. Upon approval, Urban Futures will provide continuing disclosure and post-issuance compliance services for the City’s various outstanding debt obligations.

ATTACHMENT(S)

1. Attachment A - Agr. 4055 Urban Futures

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ITEM # 14

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:

Michael Solorza, Director of Finance
SUBJECT: UPDATE ON SALE OF CITY'S WATER SYSTEM TO SAN GABRIEL

VALLEY WATER COMPANY

DATE: December 21, 2022

RECOMMENDATION(S):

It is recommended that the City Council:

1. Receive and file this update on the sale of the City’s water system to San Gabriel Valley Water Company (SGVWC).

FISCAL IMPACT:

The City of Montebello will receive $15.857 million for the sale of its Water System and related assets to the San Gabriel Valley Water Company (SGVWC). The funding will be received once escrow officially closes and various title documents are executed. Moreover, the City retains certain water rights and will lease such rights to SGVWC – generating additional revenue to the General Fund. The estimated ten year value of the water rights lease is $1,950,000. (Refer to Attachment A for details on fiscal impacts and related matters, as discussed in the March 25, 2020 City Council agenda report).

BACKGROUND/DISCUSSION:

Discussions surrounding the sale of the City’s water system go back several years. There is documented City Council approved actions related to the potential sale of the system in 2016, 2019 and 2020, with many more non-formal actions taken at the staff level during that time. Furthermore, one of the recommendations in the 2018 State

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Auditor report was for the City to explore the sale of its water system.

San Gabriel Valley Water Company currently provides management of the water system, through an agreement with the City. Staff has noted that the water system requires significant capital investments. While the system operates with a slight annual surplus – operating revenue matching or exceeding operating expenses – there is a lack of reserves necessary to invest in infrastructure upgrades.

The City determined that it was in the best interests of the community and customers to pursue the sale of the water system. With assistance from the passage of Assembly Bill 2339 (Gipson, September 28, 2018), which amended Government Code Section 37422, Montebello was authorized to sell their water system, subject to various requirements. The March, 25, 2020 agenda report attached to this report provides background on AB 2339 as well as additional historical and operational information on the sale of the water system (Attachment A).

The sale proceeded after the action taken on March 25, 2020, with escrow opening in October 2020 and various hearings set with the California Public Utilities Commission (PUC) – as required by law. Decisions by the Administrative Law judge – based on the letter of the law as it existed at the time – required a subsequent amendment to Government Code, which was accomplished by passage of Assembly Bill 850, sponsored by Assemblymember Gallagher. A more complete treatment of the history of the water sale – including decisions by the PUC – can be found in the official decision attached (Attachment B).

In short, on December 1, 2022 the PUC authorized the sale of the City’s water system to the San Gabriel Valley Water Company. This item is being presented as a receive and file to memorialize the authorization of the sale and to provide an update to the City Council and the community.

Staff have been working closely with SGVWC personnel throughout the sale process. There are final documents which must be executed related to title. In addition, there are some right of way/encroachment actions which must be worked out administratively between the City and SGVWC.

Staff will continue to provide updates to the City Council on the close of the sale and when proceeds will be available.

ENVIRONMENTAL:

N/A

ANALYSIS:

N/A

SUMMARY:

CITY COUNCIL AND PUBLIC FINANCING AUTHORITY AGENDA REPORT - MEETING OF DECEMBER 21, 2022

To receive and file this update on the sale of hte City's water system to SGVWC.

ATTACHMENT(S)

1. Attachment A - Staff Report, Water Sale-Purchase - Item 18, March 25, 2020

2. Attachment B - Approval of Montebello Acquisition of Water System PUC Decision

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ITEM #18

CITY OF MONTEBELLO

CITY COUNCIL AGENDA STAFF REPORT

TO: Honorable Mayor and Members of the City Council

FROM: René Bobadilla, City Manager

BY: Danilo Batson, Director of Public Works

SUBJECT: Resolution Pursuant to California Government Code Section 37422 Setting a Date for a Public Hearing for the Sale of the City of Montebello Water System(s) and Related Assets

DATE: March 25, 2020

RECOMMENDATION:

It is recommended that the City Council:

1) Adopt a Resolution pursuant to Goverenment Code Section 37422 setting a date for a Public Hearing for the Sa le of the City of Montebello Water System (s) and Related Assests for the regular meeting scheduled on May 27, 2020 at 6:30 PM;

2) Direct staff to prepare and publish the Resolution as required by Government Code Section 37422; and

3) Direct staff to prepare and mail a notice of the sale to customers of the Water System(s).

BACKGROUND

On September 28, 2018, the Governor signed Assembly Bill 2339 – Gipson (A-B-2339), which authorized the cities of El Monte, Montebello and Willows to sell their municipal water systems by Jaunary 1, 2022, subject to the following requirements:

(1) The legislative body of the city shall not sell the water utility property for less than its fair market value, as defined in Section 1263.320 of the Code of Civil Procedure.

(2) The legislative body of the city shall not sell the water utility property without a four-fifths vote of the city’s legislative body.

(3) There are at least two water suppliers that provide drinking water to residents in the city prior to the sale.

CITY COUNCIL AGENDA REPORT – MEETING OF MARCH 25, 2020

CONSIDER ADOPTING A RESOLUTION OF THE CITY COUNICL OF THE CITY OF

MONTEBELLO, CALIFORNIA, PURSUANT TO CALIFORN IA GOVERNMENT CODE SECTION 37422 SETTIN G A DATE FOR A PUBLI C HEARING FOR THE SA LE OF

THE CITY OF MONTEBELLO WATER SYSTEM(S) AND RELATED ASSETS

(4) The city has deferred necessary maintenance for aging or failing water infrastructure of public water systems operated by the public utility. The necessity of the maintenance shall be demonstrated by a study conducted by an independent third party that evaluates performance of the system applying American Water Works Association standards or other equivalent standards.

(5) The receiving water system’s service area borders the service area of the subsumed water system.

(6) The subsumed water system’s customers shall not pay water rates different from customers already r eceiving service from the receiving water system.

Consolidation of the water systems shall be economically feasible for the ratepayers of the subsumed water system. Ratepayers of the subsumed water system shall be notified of the applicable rate that will be in effect during the first year after consolidation has been completed. Any rate increases following the sale of a public utility for furnishing water service shall be phased in over time.

(7) Consolidation of the water systems is technically and economically feasible.

(8) (A) The legislative body of the city shall not sell its public utility for furnishing water service unless it considers oral and written protests at its second regularly scheduled meeting following the adoption of a resolution pursua nt to Sections 37422 and publication pursuant to subparagraph (B). In addition to the requirements of Section 37422, the resolution shall allow 45 days for hearing protests to the sale and shall state the city’s intended use of the sale proceeds.

Notice of the sale may be given by including notice in the agency’s regular billing statement. One written protest per parcel, filed by an owner or tenant of the parcel, shall be counted in calculating a protest. The city shall maintain all written protests for a minimum of two years following the date of the hearing to consider written protests.

On July 10, 2019, after obtaining offers from three (3) interested purchasers, the City Council approved the sale of the City of Montebello Water System(s) and Related Assets to San Gabriel Valley Water for the amount of $15,857,000, plus a 10-year lease of water rights for an additional $1,950,000*.

*Estimated 10-year lease of water rights

CITY COUNCIL AGENDA REPORT – MEETING OF MARCH 25, 2020

CONSIDER ADOPTING A RESOLUTION OF THE CITY COUNICL OF THE CITY OF

MONTEBELLO, CALIFORNIA, PURSUANT TO CALIFORN IA GOVERNMENT CODE SECTION 37422 SETTIN G A DATE FOR A PUBLI C HEARING FOR THE SA LE OF

THE CITY OF MONTEBELLO WATER SYSTEM(S) AND RELATED ASSETS

ANALYSIS

The proposed Resoultion complies with all the aforementioned requirements and as such it is recommended for consideration and adoption. Additionally, attached are the following documents:

1) AB 2339 legislation
2) Map of the water purveyors in the City of Montebello, including the City’s 3) The independent third party performance and maintenance evaluation report

The City is in receipt of the independent third party performance analysis of the City’s Water System(s). The analysis was completed by Stetson Engineers, Inc. and the final report submitted to the City on March 18, 2020. The report estimates that the 10-year Capital Improvement Project for the Water System is $25,600,000. If the City elects to keep operating the system, with an estimated 1,500 customers, it will need to increase customer’s monthly fees by approximately $142.00 per month for 10 years, not including the monthly water usage and meter fee currently charged to customers.

FISCAL IMPACTS:

At this time the only fiscal impact to the City is the cost to prepare, publish and mail the notices and Resolution. It is recommended that these costs be funded by the Water Fund in Account No. 605-99-6040.10 (Outside Contracts).

For the sale proceeds, staff is recommendeing the following one-time projects/expenses (not listed in any order of priority):

 Infrastructure Improvements – streets, sidewalks sewer, storm drains, etc.  Buidling Improvements – roof, ADA. HVAC - lighting improvements to city buildings, etc.
 Park Improvements – upgrades/repairs to playgrounds, walk ays, parking lots, irrigation, lighting, etc.
 Landscape Improvements – refurbishment of medians and landscape at city buildings, including plant materials, efficient irrigation system, entry monuments, etc.
 Purchase or replacement of vehic les – police, fire, public works and parks vehicles.
 City Council Chambe r Audio/Visual Improvements – upgrade/installation of a new audi/video equipement and software.
 Tree Planting or Reforestation Citywide – enhance or increase planting of parkway trees thoroughout the City.

CITY COUNCIL AGENDA REPORT – MEETING OF MARCH 25, 2020

CONSIDER ADOPTING A RESOLUTION OF THE CITY COUNICL OF THE CITY OF

MONTEBELLO, CALIFORNIA, PURSUANT TO CALIFORN IA GOVERNMENT CODE SECTION 37422 SETTIN G A DATE FOR A PUBLI C HEARING FOR THE SA LE OF

THE CITY OF MONTEBELLO WATER SYSTEM(S) AND RELATED ASSETS

 Water Fund Debt – repay the General Fund for past subsidies and loans to the Water Fund, such as the loan from Central Basin to retrofit the Golf Course to recycled water.
 Golf Course Improvements – installing a driving range barrier/ fence to appropritate height and upgrading the driving range itself to increase use and revenues.

SUMMARY:

The City Council will consider:

1) Adopting a Resolution pursuant to Goverenment Code Section 37422 setting a date for a Public Hearing for the Sale of the City of Montebello Water System(s) and Related Assests for the regular meeting scheduled on May 27, 2020 at 6:30 PM,

2) Directing staff to prepare and publish the Resolution as req uired by Government Code Section 37422,

3) Directing staff to prepare and mail a notice of the sale to customers of the Water System(s)

ATTACHMENTS:

Resolution
Assembly Bill 2339 – Gipson, approved by the Governor on Sept. 28, 2018 Montebello Water Purveyors Map
Water System Performance and Maintenance Evaluation Report

499447537 - 1 -
ALJ/ABT/nd3 Date of Issuance 12/5/2022

Decision 22-12-002 December 1, 2022

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of SAN GABRIEL

VALLEY WATER COMPANY
(U337W) for an Order Authorizing the
Purchase of the City of Montebello’s
Water System Assets and related
Approvals.

Application 20-10-004

DECISION AUTHORIZING SAN GABRIEL VALLEY WATER COMPANY’S PURCHASE OF THE CITY OF MONTEBELLO’S WATER SYSTEM ASSETS

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TABLE OF CONTENTS
Section Page

DECISION AUTHORIZING SAN GABRIEL VALLEY WATER
COMPANY’S PURCHASE OF THE CITY OF MONTEBELLO’S WATER
SYSTEM ASSETS ..............................................................................................................1 Summary ............................................................................................................................2

1. Background ................................................................................................................2

1.1. Procedural Background ..................................................................................2

1.2. San Gabriel Valley Water Company .............................................................5

1.3. Montebello’s Water System ............................................................................5

1.4. California State Auditor’s Report ..................................................................6

2. Issues Before the Commission .................................................................................6

3. Applicable Legal Framework ..................................................................................7

3.1. Section 10061 and Gov. Code Section 37420.5(a), as Modified by AB 850 ................................................................................................................7

3.2. Section 2718 et seq. ...........................................................................................7

3.3. Section 851 et seq. .............................................................................................8

3.4. Ratepayer Indifference Standard vs. Tangible Ratepayer Benefit Standard ............................................................................................................9

4. Burden of Proof ........................................................................................................10

5. Discussion .................................................................................................................11

5.1. The Proposed Acquisition Complies with Statutory
Requirements of Gov. Code Section 37420.5, as Amended .....................11

5.2. The Proposed Acquisition is in the Public Interest ...................................11

5.2.1. Section 2718 et seq. Considerations ................................................12

5.2.2. Section 851 et seq. Considerations ..................................................12

5.2.3. Public Interest Analysis ...................................................................14

5.3. Acquisition Price Constitutes Fair Market Value .....................................21

5.4. Acquisition Price and Ratemaking Treatment ..........................................25

5.4.1. Updating Asset Ages to 2022 ..........................................................26

5.4.2. Disallowing Additional Service Lives for Fully
Depreciated Assets ...........................................................................26

5.4.3. Veteran’s Tract ..................................................................................27

5.4.4. Bluff Road Well .................................................................................29

5.5. Ratemaking Treatment of Lease of Montebello’s Water Rights .............30

5.6. The Proposed Increased Rates To Be Charged to the Ratepayers Are Just and Reasonable ...............................................................................31

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5.7. San Gabriel is Financially Qualified to Acquire Montebello’s Water System Assets .....................................................................................32

5.8. San Gabriel is Qualified to Operate the Montebello Water Service .......33

6. Environmental and Safety Matters .......................................................................33

6.1. California Environmental Quality Act Review Is Not Required for This Transaction .......................................................................................33

6.2. The Proposed Acquisition Aligns With the Commission’s Environmental and Social Justice (ESJ) Action Plan ................................34

6.3. Safety ...............................................................................................................36

7. Conclusion ................................................................................................................37

8. Comments on Proposed Decision .........................................................................37

9. Assignment of Proceeding .....................................................................................38 Findings of Fact ...............................................................................................................38 Conclusions of Law ........................................................................................................42 ORDER .............................................................................................................................43

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DECISION AUTHORIZING SAN GABRIEL VALLEY WATER COMPANY’S PURCHASE OF THE CITY OF MONTEBELLO’S WATER SYSTEM ASSETS

Summary
This decision authorizes San Gabriel Valley Water Company (San Gabriel) to purchase the City of Montebello’s water system assets for the purchase price of $15,857,000 and authorizes $15,367,356 to be included in rate base. To arrive at this rate base amount, we started with the fair market value of $15,857,000 and deducted $206,203 (for fully depreciated assets), $203,441 (for the Veteran’s Tract pipelines), and $80,000 (for the Bluff Road Well that ceased to be used and useful). We will review the ratemaking treatment of the water rights lease as part of San Gabriel’s future general rate cases.

This proceeding is closed.

1. Background

1.1. Procedural Background
On October 2, 2020, San Gabriel Valley Water Company (San Gabriel) (U337W) filed Application (A.) 20-10-004 (Application) pursuant to Public Utilities (Pub. Util.) Code Sections 2718-2720.1 The Application seeks a California Public Utilities Commission (Commission) order authorizing San Gabriel to purchase, and City of Montebello (Montebello) to sell, Montebello’s water system and associated assets (Proposed Acquisition) per the terms of the Agreement for Purchase and Sale of Water System Assets and Lease of Water Rights between San Gabriel and Montebello dated September 29, 2020 (Purchase Agreement).2 The Application also requests that the Commission:
 Approve the Purchase Agreement;

1 All statutory references are to the Public Utilities Code, unless otherwise noted. 2 Attachment 1 to the Application.

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 Authorize expansion of San Gabriel’s certificate of public convenience and necessity (CPCN) for its Los Angeles
(L.A.) County division to include current Montebello water service customers who are not already located within the boundaries of the existing L.A. County division;
 Establish the rate base for the Proposed Acquisition to be the full purchase price of $15,857,000;
 Authorize incorporation of the established rate base for the Proposed Acquisition in San Gabriel’s next general rate case (GRC); and
 Find that it is just and reasonable to charge customers of the acquired Montebello water service the rates and
charges for water utility service that are currently in effect for all L.A. County division customers at the time of
closing of the Proposed Acquisition.

On November 16, 2020, the Public Advocates Office of the California Public Utilities Commission (Cal Advocates) filed a protest. San Gabriel filed a reply on November 25, 2020.

A prehearing conference was held on December 8, 2020, during which the parties agreed on procedural matters and the substantive and ratemaking issues to be scoped into the proceeding. However, parties disagreed on whether compliance with Section 10061 and Government (Gov.) Code Section 37420.5 should be in the scope and subject to threshold legal briefing.

The assigned Administrative Law Judge (ALJ) issued a ruling on December 11, 2020, directing the filing of briefs on statutory compliance. On December 23, 2020, Montebello filed a motion for party status, which was granted via ALJ Ruling on January 4, 2021.

On January 14, 2021, parties filed opening briefs on compliance with statutory requirements. Parties filed reply briefs on January 28, 2021. The assigned Commissioner issued a Scoping Memo and Ruling on June 16, 2021

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(Scoping Ruling), setting forth the issues, need for hearing, schedule, category, and other matters.

On July 2, 2021, the assigned ALJ issued a proposed decision denying San Gabriel’s Application. The denial was based on Gov. Code Section 37420.5(a), which required the water system assets being proposed for acquisition be wholly within the boundaries of Montebello.

On October 8, 2021, Governor Gavin Newsom signed Assembly Bill (AB) 850 (Gallagher, Stats. 2021, Ch. 705). This bill amended Gov. Code Section 37420.5(a) to remove the prior requirement that Montebello’s water system assets be wholly within the boundaries of Montebello to qualify for the treatment established by that code section.

On October 12, 2021, given the change to Gov. Code Section 37420.5(a), the ALJ withdrew the proposed decision and issued a ruling with a revised schedule to resolve the outstanding issues. Based on that new schedule, Cal Advocates served prepared direct testimony in January 2022, and San Gabriel and Montebello served prepared rebuttal testimony in February 2022. The Commission held status conferences on February 22, 2022, and March 1, 2022.

The Commission held evidentiary hearings on March 2, 2022, and March 3, 2022.

On March 18, 2022, the assigned Commissioner issued a First Amendment to the Scoping Ruling, which extended the statutory deadline and resolution date to December 30, 2022. Parties filed concurrent opening briefs on April 11, 2022, and filed concurrent reply briefs on April 25, 2022.

On September 27, 2022, an ALJ Ruling was issued, indicating that no additional information was needed and that the matter was submitted.

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1.2. San Gabriel Valley Water Company
San Gabriel is a California corporation and a Class A public utility water company engaged in the business of producing, treating, storing, distributing, and selling water to approximately 97,300 customers in two operating divisions (the L.A. County division and the Fontana Water Company division) in portions of L.A. and San Bernardino counties, subject to the Commission’s jurisdiction.3 San Gabriel holds a CPCN (U337W),4 which established San Gabriel’s right to serve most of the northern part of Montebello, including approximately 1,600 of San Gabriel’s own L.A. County division customers. Additionally, approximately 650 of Montebello’s 1,650 municipal water system customers who are the subject of the Proposed Acquisition are already located within San Gabriel’s currently authorized CPCN area.5

1.3. Montebello’s Water System
Montebello’s water system is a publicly-owned, municipal water system largely located within Montebello’s boundaries but also serving approximately 125 non-residential customers located in the cities of Commerce and Rosemead.

The water system provides service to approximately 1,650 customers, approximately 650 of which are already located within the boundaries of San Gabriel’s existing L.A. County division service area. The water system has been operating at a significant deficit since at least 2007, due to “increased costs of imported water, operations, maintenance, and necessary capital improvements.”6

3 Application at 10.
4 D.60381 issued on July 12, 1960.
5 Application at 10 and Attachment 3 to the Application. 6 Application at 9.

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Under an operating agreement, San Gabriel’s L.A. County division employees have operated Montebello’s water system since 2013.

1.4. California State Auditor’s Report
In 2018, the California State Auditor conducted an audit of Montebello as part of its High-Risk Local Government Agency audit program. In its final report to the Governor and legislative leaders, the State Auditor concluded that Montebello is a high-risk local government agency and recommended, among other things, that Montebello sell its water system to address its risks in a reasonable amount of time.7

2. Issues Before the Commission
The Scoping Ruling identified the following issues:

1. Whether the Proposed Acquisition complies with statutory requirements, including Section 10061 and Gov. Code
Section 37420.5;

2. Whether the Proposed Acquisition will be in the public interest;

3. What is the appropriate rate base value for the acquired water system and how to appropriately calculate that
value;

4. Whether the proposed rates to be charged to former
Montebello water service customers are just and
reasonable;

5. Whether San Gabriel is financially qualified to acquire Montebello’s water service assets; and

6. Whether San Gabriel is qualified to operate Montebello’s water service.

7 California State Auditor, Report 2018-802 at 1.

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3. Applicable Legal Framework
San Gabriel filed this Application seeking Commission authorization to purchase Montebello’s water system assets, and other related approvals. The applicable legal framework is set forth below.

3.1. Section 10061 and Gov. Code
Section 37420.5(a), as Modified by AB 850
Prior to selling municipal water systems, Section 10061 required any municipality seeking to do so to first hold a special election. As of October 8, 2021, Gov. Code Section 37420.5(a), as modified by AB 850, permits the Cities of El Monte, Montebello, and Willows to sell their water systems without first holding such special elections, so long as they first determine “that it is uneconomical and not in the public interest to own and operate the public utility for furnishing water service, subject to all of the following requirements . . . .”8

3.2. Section 2718 et seq.

The Public Water System Investment and Consolidation Act of 1997 (Consolidation Act), codified as Sections 2718-2720, sought to achieve economies of scale in public water systems, given the increasing amounts of capital required to finance necessary investments. The Consolidation Act sets forth compelling public policies favoring consolidation of small, struggling water systems where scale economies are achievable.

Section 2720(a) also incentivizes water corporations to acquire other water systems by setting the fair market value of the acquired system as the standard when establishing rate base. Section 2720(a) states that “fair market value” shall have the same meaning as set forth in Code of Civil Procedure (Civ. Proc.)

8 Gov. Code § 37420.5(a), as modified by AB 850.

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Section 1263.320, which provides two possible pathways for the determination of fair market value in acquisitions. The first, Code of Civ. Proc. Section 1263.320(a), defines fair market value as the highest price agreed upon by a willing buyer and willing seller. The second, Code of Civ. Proc. Section 1263.320(b), applies in special circumstances like utilities and provides for a “just and equitable” valuation in cases where no relevant, comparable market exists; however, if “the fair market value exceeds reproduction cost,” Section 2720(b) allows for the inclusion in rate base of an acquisition premium if “the commission . . . finds that the additional amounts are fair and reasonable.”
Here, the Proposed Acquisition is governed by Section 2720(a), as Section 2720(b) only becomes applicable when the fair market value exceeds reproduction cost, which, based on the evidence, is not the case.

3.3. Section 851 et seq.

Section 851, in relevant part, requires Commission approval before a public utility may sell the whole or any part of its property or rights “necessary or useful in the performance of its duties to the public.” The Commission has long interpreted Section 851 et seq. to prohibit acquisitions, mergers, and transfers of control unless the Commission finds the proposed transaction is in the public interest.9
Section 854(a) requires Commission authorization before any person or corporation may acquire or merge with any public utility. Section 854 also sets forth the required findings and required factors the Commission must consider in evaluating whether a proposed transaction is in the public interest.

9 We acknowledge that while the letter of Section 851 et. seq. may not explicitly apply to sales of municipal water utilities, the Commission has consistently considered the public interest factors addressed in these statutes for guidance in acquisitions by water utilities under our jurisdiction. (See Decision (D.) 16-11-014 at 10.)

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In addition, public interest considerations are at the center of all water utility acquisition proceedings filed under Sections 2718-2720, such as this Application. Accordingly, this decision will weigh pertinent public interest considerations, including those set forth in Section 851 et seq., as we have done in our similar water acquisition reviews.

3.4. Ratepayer Indifference Standard vs.

Tangible Ratepayer Benefit Standard
In weighing whether a proposed transaction is in the public interest, the Commission has used both the ratepayer indifference standard (i.e., a showing that no negative effects result from the change of control) and tangible ratepayer benefit standard (i.e., a showing that the transaction offers ratepayers some tangible and equitable share of the benefits).

In D.00-05-047, the Commission approved the purchase under the ratepayer indifference standard.10 In D.01-09-057, the Commission applying the ratepayer benefit standard concluded that, for an acquisition subject to Section 272011 to be in the public interest under Section 851 and Section 854(a), it must offer ratepayers an equitable share of the benefits the transaction will generate.12
In both decisions, the Commission noted that although the public interest considerations listed in Section 854(b) and Section 854(c) may not by their terms

10 D.00-09-042, which denied rehearing of D.00-05-047, concluded that D.00-05-047, although expressly relying only on ratepayer indifference, also satisfied the more stringent ratepayer benefit standard by finding definite, quantifiable benefits flowing from the purchase. The dissent stated that approvals for transfers of utility property under Section 851 et seq. should include a finding of ratepayer benefit.
11 Section 2720 is part of the Consolidation Act, which sets out a procedure for establishing rates at fair market value following the completion and approval of an acquisition of a public water system by a regulated water utility.
12 D.01-09-057, Conclusion of Law (COL) 8.

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apply to water utilities, the Commission still may and does consider the extent to which the factors set forth in those sections bear on the public interest as they may inform the Commission’s deliberations on how to strike the public interest balance.13
Here, the parties disagree as to the applicable standard. San Gabriel argues that no standard is necessary, while Cal Advocates argues in favor of applying the higher bar of “tangible ratepayer benefit.”
We are guided by the legislatively declared public interests as set forth in the Consolidation Act, and, in keeping with the majority of prior Commission decisions considering public water utility transactions, we apply the ratepayer indifference standard to the Proposed Acquisition. As applied, ratepayer indifference standard means that while the transaction need not meet every requirement from Sections 854(b)-(c), the factors when weighed should demonstrate that there are no negative impacts to ratepayers affected by the transfer of control.14

4. Burden of Proof
This is a ratesetting proceeding.15 As such, the evidentiary standard is preponderance of the evidence.16 Preponderance of the evidence is defined “in terms of probability of truth, e.g., ‘such evidence, when weighed with that opposed to it, has more convincing force and the greater probability of truth.’”17 As the applicant, San Gabriel bears the burden of proof.

13 Id. at COL 9.
14 Id. at 51-52. (See also D.11-12-007 at 6-7.)
15 Resolution ALJ 176-3473 and Scoping Ruling.
16 See D.16-12-063 at 9, citing D.12-12-030 at 44.
17 D.12-12-030 at 42, aff'd D.15-07-044 at 28-30.

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5. Discussion
Below we discuss the six issues set forth in the Scoping Ruling.

5.1. The Proposed Acquisition Complies with
Statutory Requirements of Gov. Code
Section 37420.5, as Amended
When San Gabriel filed the Application, Section 10061 required any municipality seeking to sell its water system to first hold a special election. On October 8, 2021, Gov. Code Section 37420.5(a) was amended to permit Montebello and other specified cities to sell their water systems without first holding these special elections.18 Now, for Montebello to sell its water system, it only has to determine “that it is uneconomical and not in the public interest to own and operate the public utility for furnishing water service, subject to all of the following requirements . . . .”19
Here, the Montebello City Council adopted Resolution No. 20-68 on August 26, 2020, which made the findings required under Gov. Code Section 37420.5, as modified by AB 850. Thus, we find that Montebello complied with Gov. Code Section 37420.5, as modified.

5.2. The Proposed Acquisition is in the Public
Interest
As discussed below, we review and weigh the competing public interest factors relevant to the Proposed Acquisition under Section 2718 et seq. and Section 851 et seq., and we find the Proposed Acquisition is in the public interest.

18 On October 12, 2021, the assigned ALJ issued a ruling that, in part, gave parties an opportunity to raise any potential issues concerning the recent change in the law. No party filed a brief.
19 Gov. Code § 37420.5(a), as modified by AB 850.

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5.2.1. Section 2718 et seq. Considerations
To begin our review, we first look to Section 2718 et seq., the Consolidation Act,20 which sets forth clear and compelling public policies that encourage consolidation of small, struggling water systems where scale economies are achievable, as follows:
(a) Public water systems are faced with the need to replace or upgrade the public water system infrastructure to meet
increasingly stringent state and federal safe drinking
water laws and regulations governing fire flow standards for public fire protection;
(b) Increasing amounts of capital are required to finance the necessary investment in public water system
infrastructure;
(c) Scale economies are achievable in the operation of public water systems; and
(d) Providing water corporations with an incentive to achieve these scale economies will provide benefits to ratepayers.

Here, we cannot ignore these strong public interest policies favoring consolidations.

5.2.2. Section 851 et seq. Considerations
With that backdrop, and consistent with historic practices of reviewing sales and acquisitions of water utilities,21 we also look to Section 851 et seq. public interest considerations for additional discretionary guidance in our review of the Proposed Acquisition. As discussed above in Section 3.4. of this decision, the

20 San Gabriel suggests that the Commission may lack “authority to assess the reasonableness of the purchase price in a case such as the present one, where the acquired water system is that of a municipal water system not within the Commission’s jurisdiction and where the sale of assets therefore is not subject to Section 851.” (Joint Reply Brief at 8.) We will not address that issue here. That issue was not briefed and is not part of the Scoping Ruling. 21 D.16-11-014 at 10.

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Commission may, but need not, consider the extent to which the factors set forth in Sections 854(b)-(c) bear on the public interest.22 Thus, under Section 854(b) public interest considerations, we may consider:
(1) Short and long-term economic benefits to ratepayers; (2) Equitable distribution of those total benefits between shareholders and ratepayers (i.e., not less than 50 percent to ratepayers); and
(3) No adverse impact on competition.

We may also weigh the following Section 854(c) public interest considerations as to whether the Proposed Acquisition will:
(1) Maintain or improve the financial condition of the
resulting public utility doing business in the state;
(2) Maintain or improve the quality of service to public utility ratepayers in the state;
(3) Maintain or improve the quality of management of the resulting public utility doing business in the state;
(4) Be fair and reasonable to affected public utility
employees, including both union and nonunion
employees;
(5) Be fair and reasonable to the majority of all affected public utility shareholders;
(6) Be beneficial on an overall basis to state and local economies, and to the communities in the area served by the resulting public utility;
(7) Preserve the jurisdiction of the commission and the capacity of the commission to effectively regulate and
audit public utility operations in the state; or
(8) Provide mitigation measures to prevent significant
adverse consequences that may result.

22 D.01-09-057, COL 9.

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The above public interest considerations reflect a mix of interests:
ratepayer interests, shareholder interests, public utility employee interests, as well as local and statewide community interests. As indicated above, while the transaction need not meet every requirement of Sections 854(b)-(c), the factors when weighed should demonstrate that there are no negative impacts to ratepayers affected by the transfer of control.23

5.2.3. Public Interest Analysis
Below, we examine and weigh these public interest considerations and apply the ratepayer indifference standard, which, as discussed in Section 3.4 and Section 5.2.2. of this decision, requires San Gabriel to demonstrate to the Commission that, on balance, the Proposed Acquisition will not harm or otherwise have an adverse impact to the ratepayers.

Here, the State of California has recognized that small communities, like the community served by Montebello’s water system, likely face difficulty in maintaining adequate water systems.24 Adding to the urgency, the California State Auditor concluded that Montebello is a high-risk local government agency and recommended, among other things, that Montebello sell its water system to address its risks in a reasonable amount of time.25
On March 18, 2020, Stetson Engineers, Inc. completed an independent third-party performance and maintenance evaluation report for Montebello (Stetson Report) per Gov. Code Section 37420.5(a)(4).26 The Stetson Report finds that, if Montebello performed the needed capital improvements to Montebello’s

23 D.01-09-057 at 51-52. (See also D.11-12-007 at 6-7.) 24 State Water Resources Control Board Resolution No. 2008-0048. 25 California State Auditor, Report 2018-802 at 1.
26 Attachment 7 to the Application.

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water system, it will cost Montebello a total of $25.6 million in capital improvements recommended over the next 10 years. If Montebello performed these capital improvements at an average of $2.56 million per year for 10 years, it would cost the average Montebello customer an estimated additional $142 per month, on top of the current average monthly bill of $67.89, over the next 10 years.

In comparison, San Gabriel’s engineering department also separately prepared its own 10-year capital improvement plan, estimating that if Montebello retains municipal ownership and if San Gabriel performed the needed capital improvements to Montebello’s water system, it would cost San Gabriel a total of $12.1 million in capital improvements recommended over the next 10 years.27 If San Gabriel performed these capital improvements at an average of $1.21 million per year for 10 years, it would cost each Montebello water service customer an estimated additional $67 per month, on top of the current average monthly bill of $67.89, over the next 10 years. Even an increase of $67 per month (as opposed to $142 per month), is nearly double the average monthly bill and is a high price to pay for the sake of retaining municipal ownership. If Montebello retains municipal ownership, it is apparent that Montebello’s water system — with its small customer base and no prospects for significant customer growth — will not be able to provide safe and reliable water service going forward at costs Montebello residents could reasonably afford.28 On the other hand, if the Proposed Acquisition was approved and San Gabriel acquired Montebello’s water system, San Gabriel would spread that

27 Attachment 8 to the Application.
28 Application at 17 and Attachment 7 to the Application.

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same 10-year capital improvement plan cost ($12.1 million, or $1.21 million per year) over all of its approximately 51,000 customers (served in the region by San Gabriel and Montebello). Assuming such budgeted improvements were in addition to the L.A. County division’s existing capital budget, San Gabriel states that the resulting rates would increase by an average of only $1.27 per customer per month, over the next 10 years.29
Upon consolidation, San Gabriel points out that even with the anticipated rate increases described above, current Montebello customers will have a reasonable and fiscally feasible pathway to much needed infrastructure capital improvements, safe and reliable drinking water, and many other significant benefits. For instance, current Montebello customers who qualify for San Gabriel’s low-income rate assistance program will experience an estimated decrease in their monthly bills of $5.11, or 7.5 percent.30 Montebello water service customers will also gain access to conservation programs offered by San Gabriel, including conservation kits, K-12 education, gardening workshops, irrigation controller and nozzle retrofit programs, high-efficiency toilet distribution programs, commercial and industrial water audits, and recycled water retrofits.31 In addition, Montebello customers are currently billed bi-monthly; but after the Proposed Acquisition transaction, these customers will be billed monthly, a more convenient alternative that promotes conservation and affordability.32 Thus, current Montebello customers would benefit from the Proposed Acquisition.

29 Application at 18.
30 Id. at 7.
31 Id. at 20.
32 Ibid.

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Current San Gabriel customers will also benefit from the Proposed Acquisition. For example, under the terms of the Purchase Agreement, San Gabriel will lease water pumping rights from Montebello at an initial rate of $450 per acre feet.33 Over the 10-year life of the lease, San Gabriel estimates that it will realize total net savings in water production costs in the L.A. County division of approximately $1.7 million.34
According to San Gabriel’s 2018 L.A. County division Master Plan Update, the two L.A. County division pressure zones that are located within Montebello and directly adjacent to Montebello’s water system currently have combined water storage deficit of 10.5 million gallons.35 But with the water lease as part of the Proposed Acquisition, San Gabriel’s current customers can benefit by utilizing Montebello’s reservoirs to provide approximately 5.6 million gallons of much needed additional storage capacity; this helps meet the combined water system needs for operational, emergency and fire flow requirements.36 In San Gabriel’s 2019 GRC, San Gabriel proposed two storage-related capital projects totaling $11.5 million.37 San Gabriel abandoned these two proposed storage-related capital projects because following San Gabriel’s acquisition of Montebello’s water system, San Gabriel will be able to utilize Montebello’s reservoirs to provide approximately 5.6 million gallons of much needed additional storage capacity.

33 This includes annual increases equal to the percentage change in the Full Service Untreated Volumetric Cost of water charged by the Metropolitan Water District of Southern California. 34 Attachment 9 to the Application.
35 Attachment 10 to the Application.
36 Application at 23.
37 Id. at 24.

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Thus, the Proposed Acquisition is a win-win from a public interest perspective because current San Gabriel customers will get the additional storage that they need, San Gabriel will not need to build additional storage projects at a cost of $11.5 million, and current Montebello water customers will also benefit for all the reasons discussed above.

Cal Advocates argues that San Gabriel does not need that additional water storage.38 Cal Advocates points out that San Gabriel already complies with the Commission’s General Order (GO) 103-A, which requires utilities to meet fire flow requirements.39 Cal Advocates also points out that if a disaster “interrupts the supply of all wells at Plant No. 8, the combined pressure zones would still have 18,500 gallon per minute (GPM) remaining from other wells.40 Accordingly, Cal Advocates argues that San Gabriel can meet the maximum daily demand requirement of 18,142 GPM, as well as other demands such as fire flow demands.

Based on this, Cal Advocates argues that the Commission should find that San Gabriel’s L.A. Division does not need the Montebello water system’s reservoirs.

We are not persuaded by Cal Advocates’ argument regarding the reservoirs. Instead, we are persuaded by the rebuttal testimony from witness DiPrimio, who testified that because of the lack of groundwater wells in the vicinity of Montebello:
. . . the water storage reservoirs are the only source of supply in this area. . . . Without sufficient storage capacity, San Gabriel would risk its water system running dry during days of high water usage, wildfires, and other emergencies

38 Cal Advocates Opening Brief at 2 and 17.
39 GO 103-A; see also Ex. Cal Advocates-1.
40 Ex. Cal Advocates-1 at 41:7-13.

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that require water to be distributed during both planned and unplanned water system outages.41
While the precise extent of the need is unclear, witness DiPrimio’s testimony is persuasive and clearly demonstrates water system risks “during days of high water usage, wildfires, and other emergencies” that must be anticipated and that the additional water storage and well will help to provide an “instantaneous flow rate whenever needed for fire suppression for an extended period of time over the entire duration of the fire.”42 That convinces us that planning for the additional water storage is prudent and in the public interest.

In the context of our public interest analysis here and irrespective of whether and how much San Gabriel needs the additional storage, there is no harm or adverse impact associated with San Gabriel’s L.A. Division access to the Montebello reservoirs and the additional water storage.

While the transaction need not meet every requirement of Sections 854(b)-(c), we will briefly list a few additional factors that, when weighed, demonstrate that there are no negative impacts to ratepayers resulting from the Proposed Acquisition. As indicated above, the Proposed Acquisition would result in short and long-term economic benefits to ratepayers, in the form of cost savings and more affordable alternatives. There is no evidence — and Cal Advocates does not argue — that the Proposed Acquisition would adversely impact competition. Montebello’s water system is struggling, while San Gabriel is financially qualified to operate Montebello’s water system; thus, the Proposed Acquisition would improve the financial condition of the resulting public utility

41 DiPrimio Rebuttal at 9.
42 Ibid.

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doing business in the state. Because San Gabriel will bring economies of scale, internal expertise, access to resources, and greater knowledge and experience, it will help maintain the highest standards of water quality and improve infrastructure development, will improve the quality of service to public utility ratepayers in the state, and will maintain or improve the quality of management of the resulting public utility doing business in the state. There is no evidence — and Cal Advocates does not argue — that the Proposed Acquisition would be unfair or unreasonable to affected public utility employees or to the majority of all affected public utility shareholders. The Proposed Acquisition would be beneficial on an overall basis to state and local economies, and to the communities in the area served by the resulting public utility. The Proposed Acquisition also preserves the jurisdiction of the Commission and the capacity of the Commission to effectively regulate and audit public utility operations in the state. Lastly, because San Gabriel would still be under Commission jurisdiction and would require ongoing GRC authorizations for ongoing matters, such as the water lease, the Proposed Acquisition provides mitigation measures to prevent significant adverse consequences that may result.

To be clear, Cal Advocates does not dispute San Gabriel’s contention that this Proposed Acquisition is in the public interest. Specifically, Cal Advocates does not oppose the Proposed Acquisition, “as long as the purchase price paid by ratepayers is reasonable.”43 Cal Advocates admits that Montebello’s water system has been a drain on Montebello’s budget for years, and that Montebello lacks the funds to make the required infrastructure repairs.44

43 Cal Advocates Opening Brief at 2.
44 Ibid.

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When applying the ratepayer indifference standard and weighing the above public interests, we realize that the rate impact of this Proposed Acquisition cannot be eliminated. But those ratepayer impacts are one of several factors that form the public interest. On balance, we find that: (1) the Proposed Acquisition meets the ratepayer indifference standard; (2) the public interest benefits of the Proposed Acquisition are compelling; and (3) the Proposed Acquisition promotes the legislatively declared post-transaction public interest objectives. As indicated above, from a public interest perspective the Proposed Acquisition is a win-win for current San Gabriel customers and current Montebello water customers. We are convinced that San Gabriel has met its burden of proving that the Proposed Acquisition is in the public interest and that the Proposed Acquisition will not harm or otherwise adversely impact the ratepayers.

5.3. Acquisition Price Constitutes
Fair Market Value
As discussed below, the purchase price of $15,857,000 for Montebello’s water system assets constitutes fair market value.

In pertinent part, Section 2720 reads as follows:
(a) The commission shall use the standard of fair market value when establishing the rate base value for the
distribution system of a public water system acquired by a water corporation. This standard shall be used for
ratesetting.
(b) If the fair market value exceeds reproduction cost, . . . the commission may include the difference in the rate base for ratesetting purposes if it finds that the additional amounts are fair and reasonable.

Here, we find that Section 2720 subsection (a) applies to the Proposed Acquisition; subsection (b) would only apply if fair market value exceeds

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reproduction cost. Although the Reconstruction Cost New Less Depreciation (RCNLD) Analysis dated April 22, 2019, shows an estimated RCNLD value of $15,856,768, the difference between fair market value and the estimated RCNLD is nominal.45 Thus, we conclude that fair market value does not exceed reproduction cost.

Section 2720(a)(2) provides that for the purposes of this section, “fair market value” of the acquired water system shall have the same meaning as set forth in Code of Civ. Proc. Section 1263.320, which provides two valuation approaches:
(a) The fair market value of the property taken is the highest price on the date of valuation that would be agreed to by a seller, being willing to sell but under no particular or urgent necessity for so doing, nor obliged to sell, and a buyer, being ready, willing, and able to buy but under no particular necessity for so doing, each dealing with the other with full knowledge of all the uses and purposes for which the property is reasonably adaptable and available. (b) The fair market value of property taken for which there is no relevant, comparable market is its value on the date of valuation as determined by any method of valuation that is just and equitable.

As to these two valuations approaches, San Gabriel argues in favor of subdivision (a), while Cal Advocates argues for subdivision (b). Below, we first discuss why subdivision (b) is inapplicable; therefore, we then conclude that subdivision (a) applies.

Cal Advocates points to the Legislative Committee Comments, which state that subdivision (b) was “added to the definition because there may be no relevant market for some types of special purpose properties such as schools,

45 $15,857,000 - $15,856,768 = $232.

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churches, cemeteries, parks, utilities, and similar properties.”46 The Commission, however, has already considered the “no relevant market” argument.47 In some situations and for certain types of special purpose properties, there may be no relevant market; but this does not mean that these special purpose properties will always lack a relevant, comparable market. Today, we reiterate:

Nothing in Code of [Civ. Proc. S]ection 1263.320 states that utilities are so unique that they can only be valued using subdivision (b). Rather it indicates only that in some situations there may be no relevant market. In addition, contrary to Cal Advocates’ claims, there is no requirement that an
applicant demonstrate a comparable market for the
Commission to use the subdivision (a) method to determine the fair market value.48 (Emphasis in original.)
In some situations, if there is no relevant market, we would apply Code of Civ. Proc. Section 1263.320(b) in those situations. However, for the reasons discussed below, we agree that subdivision (b) does not apply to the facts in this case. Instead, as discussed below, we agree that subdivision (a) applies.

Next, we discuss why the valuation from Code of Civ. Proc.

Section 1263.320(a) is applicable. The purchase price was the result of arms’ length negotiations between a willing and knowledgeable buyer and seller.49 To begin the sale process, Montebello issued two requests for proposals in 2016, and San Gabriel and others submitted competing proposals.50 In April 2019,

46 Code of Civ. Proc. § 1263.320 (Legislative Committee Comments – Senate). 47 D.21-01-023 at 7.
48 Ibid.
49 Cal Advocates also argues that because customers of a utility buyer ultimately end up paying the purchase price of an acquired water system (through rate base), a “utility buyer is thus not a ‘willing buyer’ as used in Code of Civ. Proc. § 1263.320(a), but can more aptly be described as a ‘willing lender.’” This creative argument lacks merit.
50 Ex. SG-2 at 11-13.

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Montebello asked parties to revise their previous proposals, San Gabriel was among those that did so, Montebello accepted one of the options proposed by San Gabriel, and they then negotiated the terms of the Purchase Agreement at arms’ length.51
Here, the evidence includes a purchase price of $15,857,00052 supported by a RCNLD Analysis dated April 22, 2019, showing a RCNLD value of $15,856,768.53 Cal Advocates did not provide its own RCNLD report. Hence, we are not dealing with a situation involving two competing RCNLD analyses.54 There is only one RCNLD study in evidence.

In addition, as to the recommended Capital Improvement Plan, we credit the testimony of witness DiPrimio, who explained that San Gabriel developed its Capital Improvement Plan based on its seven years of operating Montebello’s water system and the economies of scale that can be achieved by integrating Montebello’s smaller water system with San Gabriel’s larger one.55 Thus, we conclude that $15,857,000 generally represents the fair market value of the water system assets.

51 Id. at 15-16.
52 Attachment 1 to the Application.
53 Attachment 13 to the Application.
54 Rather than provide its own RCNLD analysis, Cal Advocates argues that “the proposed purchase price is excessive in light of the needed repairs” to Montebello’s water system assets. (Cal Advocates Opening Brief at 1.) Cal Advocates focuses on the overall repair estimates if Montebello were to continue to operate the Montebello water system on a stand-alone basis. For San Gabriel, however, the repair costs will be less than what was proposed in the Stetson Report because of economies of scale, full system-wide integration, and San Gabriel’s experience operating Montebello’s water system. (Ex. SG-2 at 18.)
55 Ex. SG-2 at 18.

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5.4. Acquisition Price and
Ratemaking Treatment
The $15,857,000 fair market value of the water system assets is the starting point for purposes of ratesetting. While the Commission “shall use the standard of fair market value when establishing the rate base value . . . ,” per Section 2720(a), the plain meaning of this statute indicates that the Commission plays an active role and has discretion when establishing the rate base value. The phrase “when establishing” describes an action and a process. Nothing in the statute suggests that the Commission serves in a ministerial capacity, that the statute strips the Commission of its discretion, and that the Commission must accept the fair market value as likewise constituting the rate base value.

To strip away the Commission’s discretion would serve to delegate the Commission’s duty to evaluate whether a proposed transaction is in the public interest per Section 854, or whether rates are just and reasonable per Section 451, delegating these important public duties to contracting parties. Delegating these or other public duties to contracting parties would impair the Commission’s exercise of its essential government function. That was not the intent of Section 2720(a). Thus, during the active process of establishing the rate base value, the Commission shall use the standard of fair market value as the starting point or main factor, but nothing in the statute limits the Commission to unconditionally accept fair market value as the only factor.

As discussed below, in exercising our discretion and in considering other factors, we arrive at the authorized rate base amount by deducting $206,203 (for fully depreciated assets), $203,441 (for the Veteran’s Tract pipelines), and $80,000 (for the Bluff Road Well that has ceased to be used and useful) from the fair market value amount.

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5.4.1. Updating Asset Ages to 2022
Cal Advocates requests that the Commission “update” San Gabriel’s RCNLD Analysis dated April 22, 2019, to increase depreciation accruals from the 2019 analysis to 2022. This proposed depreciation “update” fails to reflect increases in construction and materials costs and general inflation over that same period. We cannot update a valuation piecemeal by focusing only on one factor (depreciation) and ignoring all other factors, such as increases in construction and materials costs and general inflation.

Moreover, Code of Civ. Proc. Section 1263.320 focuses on “the date of valuation.” In general, there are often delays between the valuation date and the closing date, between the valuation date and the Commission decision, etc.

However, in the absence of a new analysis with a 2022 date of valuation, we are not inclined to update the 2019 valuation of the Montebello water system assets simply by updating the depreciation of certain assets.

5.4.2. Disallowing Additional Service
Lives for Fully Depreciated Assets
San Gabriel witness DiPrimio testified that the RCNLD Analysis “assumes a remaining useful life of one to three years for assets that have remained in service longer than the average lives of assets in that group.”56 The RCNLD Analysis lists 12 assets that met or exceeded their useful life.57 As per the RCNLD Analysis dated April 22, 2019, all of these fully depreciated assets were accorded a value of three percent across the board — regardless of installation year — for a combined total value of $206,203 for assets that remained in service longer than

56 Id. at 33.
57 One of these assets met its 50-year useful life in 2018, two assets exceeded their useful lives by two years, one asset by three years, one asset by seven years, two assets by eight years, and five assets by 13 years. (Attachment 13 to the Application.)

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the average lives of assets in that group.58 The RCNLD Analysis “assumes a remaining useful life of 1 to 3 years . . .”59 This assumption is pure speculation — not evidence. Moreover, assumptions and speculation do nothing to help applicants meet their burden of proof.

Even if San Gabriel can continue to use certain fully depreciated assets to provide service, we agree with Cal Advocates that those assets still had adequate time to be paid off by Montebello’s ratepayers, and that there is no reason why San Gabriel’s L.A. Division customers should pay for those assets again as part of the purchase price.60 San Gabriel suggests that these assets may not have been paid for,61 but, if so, that would be applicants’ burden to prove. The evidence failed to establish that these assets have not been depreciated as would be typical under basic ratemaking principles.62 Therefore, San Gabriel did not prove that it is entitled to additional depreciation or a different depreciation schedule.

Based on the evidence, we conclude that it is neither just nor reasonable to include in rate base the value of $206,203 for these 12 assets that were listed as fully depreciated in the RCNLD Analysis dated April 22, 2019.

5.4.3. Veteran’s Tract
The eight pipelines in the Veteran’s Tract of homes in Montebello’s North System are in poor condition and have been recommended for replacement.63

58 Attachment 13 to the Application. Specifically, these 12 assets were valued as follows:
$30,324 + $32,408 + $1,881 + $18,112 + $5,831 + $4,010 + $31,682 + $140 + $57,283 + $11,021 + $12,371 + $1,140 = $206,203. (Note: The four italicized amounts are also included below in Section 5.4.3. of this decision.)
59 Ex. SG-2 at 33.
60 Cal Advocates Reply Brief at 3.
61 Joint Opening Brief at 13-14.
62 Cal Advocates Reply Brief at 3, citing Standard Practice U-4-W at 4. 63 Stetson Report at 2-8.

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The Stetson Report states that “San Gabriel operators indicate there are many maintenance issues associated with pipelines within the Veteran’s Tract due to age.”64 The report explains that the Veteran’s Tract four to six-inch cast iron pipelines are primarily located on easements within backyards and are therefore “hard to access and difficult to serve.”65 In addition, the Stetson Report also recommended relocating the associated service laterals and meters.66 San Gabriel agrees that these eight Veteran’s Tract pipelines must be replaced.67 A majority of homes in the Veteran’s Tract area were constructed between 1947 and 1957.68 As to the Veteran’s Tract pipelines, the Stetson Report states that “the ages of these pipelines are unknown.”69 One of San Gabriel’s witnesses testified that the RCNLD Analysis estimated that the Veteran’s Tract pipelines were installed in 1955, but that it is unknown when the pipelines were actually placed in service.70
Despite these estimates and unknowns, the RCNLD Analysis assigns more than $286,166 in value to these eight Veteran’s Tract assets.71 Cal Advocates argues that if the Veteran’s Tract pipelines were actually installed closer to 1947, this would mean they had already surpassed their service life when San Gabriel

64 Ibid.
65 Ibid.
66 Ibid.
67 Hearing Transcript, Volume 1 at 56:18-57:2.
68 Stetson Report at 2-8.
69 Ibid.
70 Hearing Transcript at 53:15-19.
71 Attachment 13 to the Application. Specifically, these eight pipeline assets were valued as follows: $28,274 + $6,120 + $30,324 + $32,408 + $1,881 + $18,112 + $157,302 + $11,745 = $286,166. (Note: The four italicized amounts were also included above in Section 5.4.2. of this decision.)

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conducted its initial RCNLD Analysis in 2019.72 Even under the assumed 1955 installation date, four of these pipelines already surpassed their service life.

We discussed four of the eight pipelines in Section 5.4.2. above. For purposes of clarification, the four Veteran’s Tract pipelines that were fully depreciated were allocated a combined value of $82,725 in the RCNLD Analysis.73 Therefore, the other remaining four Veteran’s Tract pipelines are valued in the RCNLD Analysis at $203,441.74
Cal Advocates also argues that it is unreasonable to force ratepayers to pay for old pipes that have repeatedly been recommended for replacement, only to then have ratepayers pay for new pipes to replace those same pipelines; this calls into question how these assets can be worth $286,166, when all parties agree the assets need to be replaced at an estimated replacement cost of $4.4 million.75 We agree; this is unreasonable.

Based on (1) the poor condition of the four remaining pipelines at issue; (2) the Stetson Report recommendation that the Veteran’s Tract pipelines be replaced; and (3) the other relevant evidence in the record, we conclude that it is neither just nor reasonable to include in rate base the value of $203,441 for these four Veteran’s Tract pipelines.

5.4.4. Bluff Road Well
The Bluff Road Well, which is part of Montebello’s Southern Water System Facilities, was installed in 1972, was listed in the RCNLD Analysis at 46 age years

72 Cal Advocates Opening Brief at 11.
73 $30,324 + $32,408 + $1,881 + $18,112 = $82,725.
74 $286,166 - $82,725 = $203,441. Alternatively, $28,274 + $6,120 + $157,302 + $11,745 = $203,441. 75 Cal Advocates Opening Brief at 12.

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with four remaining life years, and was valued at $80,000.76 The Bluff Road Well is currently offline.77 Based on the evidence in the record, it is apparent that the Bluff Road Well is neither used nor useful at the present time.

It is a fundamental principle of ratemaking that assets must be physically used and useful to ratepayers — i.e., must be in use and providing service — in order to be included within rate base. “Over the years, this Commission has closely adhered to the ‘used and useful’ principle, which requires that utility property be actually in use and providing service in order to be included in the utility’s rate base.”78 Removing the value of the Bluff Road Well, which has ceased to be used and useful, from rate base is essential to ensuring that utility customers are not paying for capital investments that are not providing service to customers.79
Thus, we conclude that it is neither just nor reasonable to include in rate base the value of $80,000 for the Bluff Road Well.

5.5. Ratemaking Treatment of Lease
of Montebello’s Water Rights
The Application does not expressly identify the ratemaking issue concerning the annual cost that San Gabriel will incur upon leasing Montebello’s water rights as part of the Proposed Acquisition.80 Lease of Montebello’s water rights is not one of the six scoped issues set forth in the Scoping Ruling.

76 Attachment 13 to the Application.
77 Ex. Cal Advocates-3 (Excerpt from Data Request Response AA9-002) at 2. 78 D.84-09-080 and D.11-05-018 at 49; see also §§ 701.10, 455.5. 79 If, at some future time, the Bluff Road Well becomes used and useful, such asset can be returned to the rate base as part of San Gabriel’s GRC. 80 Joint Applicants Reply Brief at 21-22.

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Cal Advocates urges the Commission not to assess the reasonableness of the water rights lease in this proceeding, but rather to review the reasonableness of these expenses in San Gabriel’s future GRCs.81 We agree. Thus, per the Application and Scoping Ruling, we conclude that the question of whether to include the ratemaking treatment of the lease of Montebello’s water rights is not an issue before the Commission.82

5.6. The Proposed Increased Rates
To Be Charged to the Ratepayers
Are Just and Reasonable
We acknowledge that transactions authorized under the Consolidation Act, like this one, may lead to rate increases, but such transactions also likely lead to other important ratepayer benefits envisioned by the Consolidation Act. “Applying Section 2720 places a cost on ratepayers: that of supporting a rate base higher than it would otherwise be because it is set at fair market value.”83 That is by design because “[p]roviding water corporations with an incentive to achieve these scale economies will provide benefits to ratepayers,” as stated in Section 2719(d). Other legislatively imputed public interests, set forth in statute and discussed in this decision, also support these added costs.

The existing framework stemming from D.99-10-064 (Framework Decision) does not analyze the rate impact of an acquisition on existing customers of the acquiring utilities, as it only discusses rates for customers of the utility being

81 Cal Advocates Opening Brief at 20-21
82 There is another reason to wait until San Gabriel’s future GRCs to address the issue surrounding the lease of water rights. The Commission recently issued an Order Instituting Rulemaking “to develop an updated framework that will provide guidelines for the Commission’s review of acquisitions involving Commission-regulated water utilities.” (Rulemaking (R.) 22-04-003 at Ordering Paragraph 2.) One of the issues addressed as part of R.22-04-003 is how water rights should be considered in water utility system acquisitions. 83 D.01-09-057 at 28.

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acquired.84 From a universal public interest perspective, however, we are interested in the rate impacts of the Proposed Acquisition on all customers.

As discussed in Section 4.2.3. of this decision, we understand the Proposed Acquisition will result in rate increases for Montebello and San Gabriel customers. On balance, however, those rate increases are better than the alternatives. The Proposed Acquisition will also result in cost-savings because of the expenses avoided, the low-income rate assistance program, the economies of scale, etc. Thus, we find that the proposed rate increases are just and reasonable.

However, because the proposed rates in the Application are based, in part, on the use of the $15,857,000 purchase price in the new rate base, San Gabriel shall adjust the proposed rates based on our authorization to include $15,367,356 — not the $15,857,000 purchase price — in rate base.

5.7. San Gabriel is Financially Qualified to
Acquire Montebello’s Water System Assets
In acquisitions, mergers, and transfers of control, Sections 851-854 require that a transferee meet certain financial requirements. San Gabriel is a corporation duly organized and existing under the laws of the State of California, and it has been in existence for well over 70 years.85 With its Application, San Gabriel included a balance sheet as of June 30, 2020, together with an income statement covering the twelve months ending June 30, 2020, showing net income of $27,967,000.86 Cal Advocates does not challenge San Gabriel’s financial qualifications to acquire Montebello’s water system assets. There is no evidence presented that raises concerns regarding San Gabriel’s financial qualifications to

84 D.99-10-064 and see R.22-04-003 at 11.
85 Application at 31.
86 Attachment 16 to the Application.

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acquire Montebello’s water system assets. As such, we find that San Gabriel met its burden of proving that it is financially qualified to acquire Montebello’s water system assets.

5.8. San Gabriel is Qualified to
Operate the Montebello Water Service
In acquisitions, mergers, and transfers of control, Sections 851-854 also require that a transferee be qualified to operate the acquired utility. Since 2013, San Gabriel’s L.A. County division employees have operated the Montebello water system per an operating agreement in compliance with D.10-10-019.87 Cal Advocates does not challenge San Gabriel’s qualifications to operate Montebello’s water system assets. There is no evidence presented that raises concerns regarding San Gabriel’s qualifications to operate Montebello’s water system assets. Thus, we find that San Gabriel met its burden of proving that it is qualified to operate Montebello’s water system assets.

6. Environmental and Safety Matters

6.1. California Environmental Quality Act
Review Is Not Required for This Transaction
Rule 2.4 of the Commission’s Rules of Practice and Procedure (Rules) requires applications to address the applicability of the California Environmental Quality Act of 1970 (CEQA), as amended and codified in Public Resources Code Section 21000 et seq., to the proposed project or transaction that is the subject of the application.88 The Proposed Acquisition that is the subject of this Application is not within the applicability of CEQA because it does not constitute a “project” within the meaning of CEQA. Projects under CEQA are those specifically

87 Application at 9.
88 On July 16, 2018, the Montebello Board of Supervisors approved a Categorical Exclusion under the National Environmental Policy Act. (Application at 2.)

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defined as any “activity which may cause either a direct physical change [to] the environment, or a reasonably foreseeable indirect physical change in the environment.”89
This Application seeks Commission approval of San Gabriel’s acquisition of Montebello’s water system assets. The Commission has consistently held such a transfer of control and operation of existing water system facilities does not result in any changes to the environment, and thus, an application seeking authorization for such a transaction is not subject to CEQA.90 Because no “direct or reasonably foreseeable indirect physical change in the environment” will occur, the Proposed Acquisition is not subject to the provisions of CEQA.

6.2. The Proposed Acquisition Aligns With
the Commission’s Environmental and
Social Justice (ESJ) Action Plan
In February 2019, the Commission adopted its ESJ Action Plan as a comprehensive strategy and framework for addressing ESJ issues in each proceeding.91 The community served by Montebello’s water service is considered by the Department of Water Resources to be a Disadvantaged Community.

The Commission’s ESJ Action Plan identifies existing inequities and proposes actions for how the Commission can use its regulatory authority to address health and safety, consumer protection, program benefits, and enforcement to encompass all the industries it regulates, including energy, water,

89 See California Public Resources Code § 21065.
90 See D.13-01-033 and D.11-03-016.
91 Environmental justice means the fair treatment of people of all races, cultures, and incomes with respect to the development, adoption, and enforcement of environmental laws, regulations, and policies. See
https://www.cpuc.ca.gov/news-and-updates/newsroom/environmental-and-social-justice-act ion-plan.

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and communications programs. Goal 3 of the Commission’s ESJ Action Plan is to improve access to high-quality water, communications, and transportation services for ESJ communities.92 For water utilities, objectives for this goal include (1) consolidating small water systems; and (2) expanding low-income programs.93
With respect to the first objective, the Commission’s ESJ Action Plan recognizes that consolidation is an important tool to ensure safe and reliable water. The Commission has previously recognized that:

Smaller water companies often do not have the resources or expertise to operate in full compliance with increasingly stringent and complex water quality regulations. Many water companies are too small to be viable in the long-term, raising questions as to whether they will be able to continue to provide clean and reliable water in the future.94
San Gabriel will bring economies of scale, internal expertise, access to resources, and greater knowledge and experience.95 These will help maintain the highest standards of water quality and improve infrastructure development.96 San Gabriel’s size, financial strength, and the breadth of expertise of its employees, allow it to implement strong conservation programs and setting rates that balance investment, conservation, and affordability.97 In addition, San Gabriel can spread costs to operate, maintain, and invest over a much larger

92 Environmental and Social Justice Action Plan, Version 1.0, February 21, 2019 (ESJ Action Plan) at 7.
93 ESJ Action Plan at 16.
94 California Public Utilities Commission 2010 Water Action Plan at 9. 95 Application at 16-19.
96 Id. at 5-7, 23-26, and Attachment 8 to the Application. 97 Application at 20, 28, and 31.

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customer base.98 San Gabriel’s resources will be used to improve the water quality and level of customer service in Montebello.99
With respect to the second objective, San Gabriel has a well-established low-income support program to help customers with their monthly bills.100 Qualifying low-income customers would experience a decrease in their monthly bills of $10.48, or 15.4 percent.101 Small water systems like Montebello’s do not have a sufficient customer base to support such a program.

As discussed in Section 5.2.3. of this decision, there is a public interest benefit for San Gabriel to acquire Montebello’s water system assets and leverage their customer service, operations experience, and resources to improve the water system’s reliability, to improve compliance with health and safety regulations, and to achieve economies of scale that are not possible for a water system of Montebello’s relatively small size. Therefore, we conclude that approval of this Application will help promote and further the Commission’s ESJ Action Plan goals.

6.3. Safety
Prior to approving this Application, the Commission must ensure that there are no safety issues or concerns. The Proposed Acquisition will allow San Gabriel to improve the water quality and reliability of Montebello’s water

98 Id. at 18.
99 Id. at 9 and 20.
100 Id. at 7 and 28.
101 Id. at 28.

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service.102 San Gabriel will also address all outstanding repairs, improvements, and compliance issues that are present with Montebello’s water system assets.103 We find that the acquisition promotes safety by helping to ensure that Montebello water service customers have long-term access to safe and reliable water. There are no additional safety issues that need to be addressed in this Application.

7. Conclusion
San Gabriel’s request to purchase Montebello’s water system assets is approved. The $15,857,000 purchase price represents the fair market value of the water system assets. As discussed in this decision, of the $15,857,000 purchase price, only the amount of $15,367,356 is authorized to be included in rate base.

To calculate the rate base, we started with the fair market value of $15,857,000 and deducted $206,203 (for fully depreciated assets), $203,441 (for the Veteran’s Tract pipelines), and $80,000 (for the Bluff Road Well that ceased to be used and useful).

8. Comments on Proposed Decision
The proposed decision of ALJ Rosas in this matter was mailed to the parties in accordance with Pub. Util. Code Section 311 and comments were allowed under Rule 14.3. On November 8, 2022, San Gabriel and Montebello filed joint opening comments, and Cal Advocates filed opening comments. On November 14, 2022, San Gabriel and Montebello filed joint reply comments, and Cal Advocates filed reply comments. We considered the comments and made appropriate modifications.

102 Id. at 5-7, 9, 20, and 23-26.
103 Id. at 18, Attachment 8 to the Application, and Ex. SG-2 at 18.

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9. Assignment of Proceeding
Darcie L. Houck is the assigned Commissioner and Michelle Cooke and Alberto Rosas are the co-assigned ALJs in this proceeding.

Findings of Fact

1. San Gabriel filed Application 20-10-004 seeking authorization to purchase Montebello’s water system assets and related approvals (Proposed Acquisition).

2. The Proposed Acquisition is subject to Sections 851-854, requiring the Applicant to seek Commission approval regarding the transfer of utility property.

3. The Proposed Acquisition is subject to the Consolidation Act, codified as Sections 2718 - 2720, requiring San Gabriel to seek Commission assessment of the fair market value of the acquisition assets.

4. In weighing the public interest considerations, we follow the large body of Commission decisions and apply the ratepayer indifference standard, where no harm or adverse impact to the ratepayer is identified.

5. Montebello issued two requests for proposals in 2016, and San Gabriel and others submitted competing proposals; in April 2019, Montebello asked parties to revise their previous proposals. San Gabriel was among those that did so; Montebello accepted one of the options proposed by San Gabriel; and they then negotiated the terms of a purchase agreement.

6. San Gabriel and Montebello entered into an Agreement for Purchase and Sale of Water System Assets and Lease of Water Rights dated September 29, 2020, whereby San Gabriel would purchase Montebello’s water system assets for $15,857,000.

7. The purchase price of $15,857,000 was the result of arms’ length negotiations between a willing and knowledgeable buyer and seller.

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8. The fair market value of Montebello’s water system assets is $15,857,000.

This same amount represents the estimated value of water system assets per the RCNLD Analysis dated April 22, 2019.

9. San Gabriel holds a CPCN (U337W), which establishes San Gabriel’s right to serve most of the northern part of Montebello, including approximately 1,600 of San Gabriel’s own L.A. County division customers.

10. Approximately 650, or 39 percent of Montebello’s 1,650 municipal water system customers who are the subject of the Proposed Acquisition are located within San Gabriel’s CPCN area.

11. Montebello is a high-risk local government agency; and Montebello’s water system has been operating at a significant deficit since at least 2007, due in large part to increased costs of imported water, operations, maintenance, and necessary capital improvements.

12. The Montebello City Council adopted Resolution No. 20-68 on August 26, 2020, which made the findings required under Gov. Code Section 37420.5, as modified by AB 850.

13. Since 2013, San Gabriel’s L.A. County division employees have operated Montebello’s water system under an operating agreement between San Gabriel and Montebello.

14. Montebello is faced with the need to replace or upgrade the public water system infrastructure to meet increasingly stringent state and federal safe drinking water laws and regulations governing fire flow standards for public fire protection.

15. Increased amounts of capital for Montebello’s water system are required to finance the necessary investment in public water system infrastructure.

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16. Montebello’s water system, with its small customer base and no prospects for significant customer growth, will not be able to provide safe and reliable water service going forward at costs Montebello’s residents will be able to reasonably afford.

17. The RCNLD Analysis lists 12 assets that met or exceeded their useful life; one of these assets met its 50-year useful life in 2018; two assets exceeded their useful lives by two years; one asset by three years; one asset by seven years; two assets by eight years; and five assets by 13 years.

18. The eight pipelines in the Veteran’s Tract of homes in Montebello’s North System are in poor condition and require replacement; and four of the Veteran’s Tract pipelines met or exceeded their useful life.

19. The Bluff Road Well was installed in 1972 as part of Montebello’s Southern Water System Facilities; and at the moment, this well is not used or useful.

20. Upon consolidation of Montebello’s water system with San Gabriel’s L.A.

County division, customers now served by Montebello’s water system and who qualify for San Gabriel’s low-income rate assistance program, will experience a decrease in their monthly bills.

21. Upon consolidation of Montebello’s water system with San Gabriel’s L.A.

County division, Montebello water service customers will have access to conservation programs offered by San Gabriel, including conservation kits, K-12 education, gardening workshops, irrigation controller and nozzle retrofit programs, high-efficiency toilet distribution programs, commercial and industrial water audits, and recycled water retrofits.

22. Montebello water service customers are currently billed bi-monthly; but after the Proposed Acquisition, these customers will be billed monthly.

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23. San Gabriel is financially qualified to acquire Montebello’s water system assets.

24. Due to its size, fiscal backing, familiarity, and sophistication, San Gabriel is in a superior position to use economies of scale, resources, and knowledge to better service the water needs of Montebello customers; therefore, the Proposed Acquisition complies with Section 2718 et seq.

25. San Gabriel is qualified to operate Montebello’s water system.

26. The Proposed Acquisition will maintain or improve the financial condition and management of the utility, will improve the quality of service to the utility’s ratepayers, and will be generally beneficial to the community served by the public utility.

27. The Proposed Acquisition promotes safety by helping to ensure that Montebello water service customers have long term access to safe and reliable water.

28. To calculate the rate base, we deducted $206,203 (for fully depreciated assets), $203,441 (for the Veteran’s Tract pipelines), and $80,000 (for the Bluff Road Well that ceased to be used and useful) from the fair market value amount of $15,857,000.

29. There are no safety issues that need to be addressed in the Application.

30. The Proposed Acquisition will not cause direct or reasonably foreseeable indirect physical change in the environment.

31. Approval of this Application will help promote and further the Commission’s ESJ Action Plan goals.

32. Code of Civ. Proc. Section 1263.320(a) defines fair market value as the highest price agreed upon by a willing buyer and willing seller.

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33. The appropriate evidentiary standard in a ratesetting matter is preponderance of the evidence.

Conclusions of Law

1. The Application 20-10-004 should be approved.

2. San Gabriel should be authorized to purchase Montebello’s water system assets and be granted related approvals as discussed in this decision.

3. The Application and the Proposed Acquisition comply with Sections 851-854.

4. The Proposed Acquisition complies with Gov. Code Section 37420.5, as modified by AB 850.

5. San Gabriel’s acquisition of Montebello is in the public interest.

6. The proposed acquisition purchase price of $15,857,000 is the fair market value of the acquisition assets.

7. For purposes of calculating the rate base, it is reasonable to deduct $206,203 (for fully depreciated assets), $203,441 (for the Veteran’s Tract pipelines), and $80,000 (for the Bluff Road Well that ceased to be used and useful) from the fair market value amount of $15,857,000 to arrive at rate base amount of $15,367,356.

8. San Gabriel should be authorized to include $15,367,356 in rate base for the acquired system into the L.A. division for ratemaking purposes.

9. It is just and reasonable for San Gabriel to charge customers of Montebello’s water system the rates and charges for water utility service that are currently in effect for all L.A. County division customers at the time of closing of the Proposed Acquisition.

10. No CEQA review is required for our approval of the Proposed Acquisition.

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11. The Proposed Acquisition aligns with the goals set forth in the Commission’s ESJ Action Plan.

12. This proceeding should be closed.

O R D E R
IT IS ORDERED that:

1. The Agreement for Purchase and Sale of Water System Assets and Lease of Water Rights dated September 29, 2020, as proposed in Application 20-10-004, is approved; and San Gabriel Valley Water Company is authorized to purchase the City of Montebello’s water system assets for $15,857,000 per the terms and conditions of the Agreement for Purchase and Sale of Water System Assets and Lease of Water Rights dated September 29, 2020, as proposed in Application 20-10-004.

2. Upon acquisition of the City of Montebello’s water system assets, San Gabriel Valley Water Company is authorized to include $15,367,356 in rate base for the acquired system into the Los Angeles County division for ratemaking purposes.

3. San Gabriel Valley Water Company (San Gabriel) may lease the City of Montebello’s water pumping rights per the terms and conditions of the Agreement for Purchase and Sale of Water System Assets and Lease of Water Rights dated September 29, 2020. The water rights lease shall not be reflected in rates at this time. The water rights lease may be addressed as part of San Gabriel’s next general rate case.

4. San Gabriel Valley Water Company is authorized to expand its certificate of public convenience and necessity (U337W) for its Los Angeles (L.A.) County division to include current Montebello water system customers who are not already located within the boundaries of the existing L.A. County division.

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5. San Gabriel Valley Water Company (San Gabriel) shall, upon closing of the acquisition, immediately consolidate the City of Montebello’s water system into San Gabriel’s Los Angeles County division for operational purposes.

6. Within 30 days from receipt of its operating permit, San Gabriel Valley Water Company (San Gabriel) shall file a Tier 1 Advice Letter to expand its certificate of public convenience and necessity to include and add the City of Montebello’s water system service area and to charge San Gabriel’s existing Los Angeles County division rates in the newly acquired area.

7. Within 10 days of the completion of the sale of the City of Montebello’s water system to San Gabriel Valley Water Company (San Gabriel), San Gabriel must notify the Commission’s Director of the Water Division in writing that the sale has been completed.

8. San Gabriel Valley Water Company is bound by all Commission decisions, rules, and regulations applicable to regulated water utilities.

9. Today’s decision is effectively immediately.

10. Application 20-10-004 is closed.

Dated December 1, 2022, at San Francisco, California.

ALICE REYNOLDS
President

CLIFFORD RECHTSCHAFFEN

GENEVIEVE SHIROMA
DARCIE L. HOUCK

JOHN REYNOLDS
Commissioners

RESOLUTION NO. 22-95

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MONTEBELLO

APPROVING AND ALLOWING CERTAIN CLAIMS AND DEMANDS

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MONTEBELLO HEREBY RESOLVES, FINDS, AND DECLARES AS FOLLOWS:

SECTION 1. That the reference is hereby made to that certain Reg ister of Audited Demand No.1542, consisting of 19 pages, and including:

Warrant No.

General: Checks No. 598103 through 598413
ACH No. 3129 through 3321

Successor Agency: Check No. 1497 through 1497

On file in the office of the City Clerk, the same having been audited and approved by the Assistant Director of Finance as required by law.

SECTION 2. That the said City Council having examined each such demand does hereby approve and direct the payment of same, as set forth in said Register, except the following Warrant No.

______________________________

______________________________

______________________________

SECTION 3. That the City Clerk shall certify to the passage and adoption of this Resolution and that the same shall be in full force and effect.

APPROVED AND ADOPTED this 14h day of December 2022.

_______________________________
Kimberly A. Cobos-Cawthorne, Mayor

ATTEST: APPROVED AS TO FORM:

RESOLUTION NO. 22-95

 Exhibit A – Warrant Register

_______________________ ________________________________ Christopher Jimenez, City Clerk Arnold M. Alvarez-Glasman, City Attorney

STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) SS:

CITY OF MONTEBELLO )

I, Christopher Jimenez, City Clerk of the City of Montebello, County of Los Angeles, State of California, hereby certify that th e foregoing Resolution No.22 -95 was passed and adopted by the City Council of the City of Montebello, signed by the Mayor and attested by the City Clerk at a regular meeting of said Council held on the 14th day of December 2022 and that said Resolution was adopted by the following vote, to-wit:

AYES:

NOES:

ABSTAIN:

ABSENT:

The undersigned, City Clerk of the City of Montebello, does hereby attest and certify that the foregoing Resolution is a true, full and correct copy of a resolution duly adopted at a meeting of said City which was duly convened and held on the date stated thereon, and that said document has not been amended, modified, repealed or rescinded since its date of adoption and is in full force and effect as of the date hereof.

DATE: __
Christopher Jimenez, City Clerk

EXHIBIT A
WARRANT # DATE AMOUNT ACCOUNT DESCRIPTION VENDOR # VENDOR NAME General Account
3129 11/03/2022 $1,058.14 TRAINING 3163 BANK OF AMERICA 3130 11/03/2022 $6,578.07 SUPPLIES 3163 BANK OF AMERICA 3131 11/03/2022 $439.58 SUPPLIES 3163 BANK OF AMERICA
3132 11/03/2022 $1,191.05 SUPPLIES 3163 BANK OF AMERICA 3133 11/03/2022 $3,000.00 ADVERTISING/PRINTING SERVICES 1293 923 MEDIA GROUP INC 3134 11/03/2022 $17,345.50 ADVERTISING/PRINTING SERVICES 2689 ACRO PRINTING INC 3135 11/03/2022 $3,802.39 SUPPLIES 2586 AMAZON CAPITAL SERVICES INC 3136 11/03/2022 $95,314.66 CONTRACT SERVICES 3016 ANTARES GOLF LLC 3137 11/03/2022 $2,231.92 CONTRACT SERVICES 2889 COMLOCK SECURITY GROUP INC 3138 11/03/2022 $23,986.18 SUPPLIES 408 DEKRA-LITE INDUSTRIES INC 3139 11/03/2022 $60.62 SUPPLIES 3108 MARIO ESPINOSA
3140 11/03/2022 $47,091.05 CONTRACT SERVICES 371 FLO-SERVICES INC 3141 11/03/2022 $945.75 VEHICLE MAINTENANCE/EXPENSES 270 HARBOR DIESEL AND EQUIPMENT INC 3142 11/03/2022 $1,716,545.81 CONTRACT SERVICES 2793 IBE DIGITAL 3143 11/03/2022 $2,072.85 SUPPLIES 26670 LIFE-ASSIST INC 3144 11/03/2022 $608.30 CONTRACT SERVICES 3276 MARK ROBERT LOPEZ 3145 11/03/2022 $5,501.00 CONTRACT SERVICES 26880 SEBASTIAN WATERWORKS INC 3146 11/03/2022 $263.25 VEHICLE MAINTENANCE/EXPENSES 1385 MUNCIE RECLAMATION AND SUPPLY COMPANY 3147 11/03/2022 $640.00 CONTRACT SERVICES 19250 N/S CORPORATION 3148 11/03/2022 $25,463.90 CONTRACT SERVICES 35250 NATIONWIDE ENVIRONMENTAL SERVICES 3149 11/03/2022 $130.34 SUPPLIES 1120 BLUETRITON BRANDS INC 3150 11/03/2022 $20,000.00 CONTRACT SERVICES 61050 REDFLEX TRAFFIC SYSTEMS 3151 11/03/2022 $4,336.25 IMPROVEMENTS OTHER THAN BUILDING 3369 SALLY SWANSON ARCHITECTS INC 3152 11/03/2022 $11,176.65 ADVERTISING/PRINTING SERVICES 2594 THE SAUCE CREATIVE SERVICES CORP 3153 11/03/2022 $94,027.33 FUEL INVENTORY 1059 AMBER RESOURCES LLC 3154 11/03/2022 $1,194.43 SUPPLIES 2686 THE SHERWIN-WILLIAMS CO City of Montebello
Register of Demands No. 1542
From Payment Date 10/28/22 - To Payment Date 12/01/22

EXHIBIT A
WARRANT # DATE AMOUNT ACCOUNT DESCRIPTION VENDOR # VENDOR NAME City of Montebello
Register of Demands No. 1542
From Payment Date 10/28/22 - To Payment Date 12/01/22
3155 11/03/2022 $1,408.51 SUPPLIES 3088 WAXIES ENTERPRISES LLC 3156 11/03/2022 $67.90 CONTRACT SERVICES 3140 WEX HEALTH INC 3157 11/10/2022 $125.00 TRAINING 3163 BANK OF AMERICA
3158 11/10/2022 $344.86 SUPPLIES 3163 BANK OF AMERICA
3159 11/10/2022 $160.07 SUPPLIES 3163 BANK OF AMERICA
3160 11/10/2022 $9,290.42 SUPPLIES 3163 BANK OF AMERICA 3161 11/10/2022 $5,180.98 CONTRACT SERVICES 3163 BANK OF AMERICA 3162 11/10/2022 $24.10 MAIL/ POSTAL EXPENSE 3163 BANK OF AMERICA 3163 11/10/2022 $1,493.70 SUPPLIES 3163 BANK OF AMERICA 3164 11/10/2022 $448.30 SUPPLIES 3163 BANK OF AMERICA
3165 11/10/2022 $3,428.46 SUPPLIES 3163 BANK OF AMERICA 3166 11/10/2022 $482.01 SUPPLIES 3163 BANK OF AMERICA
3167 11/10/2022 $86.15 SUPPLIES 3163 BANK OF AMERICA
3168 11/10/2022 $163.80 DUES & SUBSCRIPTIONS 3163 BANK OF AMERICA 3169 11/10/2022 ($695.00) TRAINING 3163 BANK OF AMERICA 3170 11/10/2022 $20.27 DUES & SUBSCRIPTIONS 3163 BANK OF AMERICA 3171 11/10/2022 $256.29 SUPPLIES 3163 BANK OF AMERICA
3172 11/10/2022 $314.42 SUPPLIES 3163 BANK OF AMERICA
3173 11/10/2022 $3,523.60 SUPPLIES 3163 BANK OF AMERICA 3174 11/10/2022 $2,120.42 TRAVEL & MEETINGS 3163 BANK OF AMERICA 3175 11/10/2022 $81,027.00 CONTRACT SERVICES 3411 AIM CONSULTING SERVICES 3176 11/10/2022 $82.00 SUPPLIES 67210 AIR SOURCE INDUSTRIES INC 3177 11/10/2022 $7,898.99 SUPPLIES 2586 AMAZON CAPITAL SERVICES INC 3178 11/10/2022 $1,033.59 SUPPLIES 62880 AMERICAN MARKER 3179 11/10/2022 $5,299.87 VEHICLE MAINTENANCE/EXPENSES 47980 AMERICAN MOVING PARTS 3180 11/10/2022 $105.85 ADVERTISING/PRINTING SERVICES 35980 SAEED RADMEHR 3181 11/10/2022 $1,476.48 CONTRACT SERVICES 1237 AZTECA LANDSCAPE 3182 11/10/2022 $345.00 CONTRACT SERVICES 2102 JOHN P BEROKOFF

EXHIBIT A
WARRANT # DATE AMOUNT ACCOUNT DESCRIPTION VENDOR # VENDOR NAME City of Montebello
Register of Demands No. 1542
From Payment Date 10/28/22 - To Payment Date 12/01/22
3183 11/10/2022 $921.67 TRAVEL & MEETINGS 2636 RENE BOBADILLA 3184 11/10/2022 $96.00 TRAVEL & MEETINGS 17880 ANI CHUKHURYAN 3185 11/10/2022 $518.87 SUPPLIES 10000 CLEAN SWEEP SUPPLY CO INC 3186 11/10/2022 $500.00 MACHINERY & EQUIPMENTS 72 COGRAN SYSTEMS LLC 3187 11/10/2022 $24,720.00 CONTRACT SERVICES 3025 COMPLETE LANDSCAPE CARE INC 3188 11/10/2022 $34.00 CONTRACT SERVICES 23660 DAIOHS USA 3189 11/10/2022 $7,210.00 CONTRACT SERVICES 371 FLO-SERVICES INC 3190 11/10/2022 $539.78 VEHICLE MAINTENANCE/EXPENSES 270 HARBOR DIESEL AND EQUIPMENT INC 3191 11/10/2022 $2,768.76 CONTRACT SERVICES 46870 HDL COREN & CONE 3192 11/10/2022 $5,240.66 SUPPLIES 43860 MYERS & SONS HI-WAY SAFETY INC 3193 11/10/2022 $2,991.64 COPIER REPAIR/SERVICES 2793 IBE DIGITAL 3194 11/10/2022 $10,810.00 CONTRACT SERVICES 1612 JCL TRAFFIC SERVICES 3195 11/10/2022 $7,051.95 CONTRACT SERVICES 2152 JOHNSON CONTROLS INC 3196 11/10/2022 $1,966.25 CONTRACT SERVICES 2892 KTU & A 3197 11/10/2022 $558.00 SUPPLIES 26670 LIFE-ASSIST INC
3198 11/10/2022 $8,199.00 CONTRACT SERVICES 3301 MATER MONTEBELLO LTD PARTNERSHIP 3199 11/10/2022 $80,965.29 CONTRACT SERVICES 35250 NATIONWIDE ENVIRONMENTAL SERVICES 3200 11/10/2022 $13,745.00 IMPROVEMENTS OTHER THAN BUILDING 3028 ONWARD ENGINEERING 3201 11/10/2022 $5,907.11 CONTRACT SERVICES 54240 PDQ ENTERPRISES INC 3202 11/10/2022 $203.00 CONTRACT SERVICES 3285 DIANA E RAMIREZ 3203 11/10/2022 $60,751.00 CONTRACT SERVICES 952 RELIANT IMMEDIATE CARE MEDICAL GROUP INC 3204 11/10/2022 $2,034.84 ADVERTISING/PRINTING SERVICES 2594 THE SAUCE CREATIVE SERVICES CORP 3205 11/10/2022 $3,427.02 SUPPLIES 33960 DAVID SOSNOWSKI 3206 11/10/2022 $25,695.33 CONTRACT SERVICES 3439 SPORTFIVE GOLF LLC 3207 11/10/2022 $14,834.66 CONTRACT SERVICES 3133 ULTIMATE MAINTENANCE SERVICE 3208 11/10/2022 $271.68 CONTRACT SERVICES 57140 UNDERGROUND SERVICE ALERT OF SOUTHERN CA 3209 11/10/2022 $7,000.00 CONTRACT SERVICES 3433 VECTIS DC LLC 3210 11/10/2022 $4,532.51 SUPPLIES 3088 WAXIES ENTERPRISES LLC

EXHIBIT A
WARRANT # DATE AMOUNT ACCOUNT DESCRIPTION VENDOR # VENDOR NAME City of Montebello
Register of Demands No. 1542
From Payment Date 10/28/22 - To Payment Date 12/01/22
3211 11/17/2022 $3,947.35 MACHINERY & EQUIPMENTS 2586 AMAZON CAPITAL SERVICES INC 3212 11/17/2022 $870.98 SUPPLIES 62880 AMERICAN MARKER
3213 11/17/2022 $40.00 CARPOOL INCENTIVE 61470 ERIKA L ANDRADE 3214 11/17/2022 $400.00 CONTRACT SERVICES 2365 LETICIA TORRES 3215 11/17/2022 $23,021.39 CONTRACT SERVICES 3016 ANTARES GOLF LLC 3216 11/17/2022 $3,169.48 CONTRACT SERVICES 3588 ANTHONYS PORTABLE RESTROOMS INC 3217 11/17/2022 $40.00 CARPOOL INCENTIVE 3809 SAMANTHA CHENELIA 3218 11/17/2022 $2,415.40 SUPPLIES 10000 CLEAN SWEEP SUPPLY CO INC 3219 11/17/2022 $314.04 CONTRACT SERVICES 2889 COMLOCK SECURITY GROUP INC 3220 11/17/2022 $9,070.29 CONTRACT SERVICES 2624 CRAFCO INC 3221 11/17/2022 $618.86 SUPPLIES 70920 DECALS BY DESIGN INC 3222 11/17/2022 $3,287.13 VEHICLE MAINTENANCE/EXPENSES 75340 DELTA MOTOR COMPANY INC 3223 11/17/2022 $40.00 CARPOOL INCENTIVE 3384 ALICIA FERNANDEZ 3224 11/17/2022 $34.00 CONTRACT SERVICES 23660 DAIOHS USA 3225 11/17/2022 $40.00 CARPOOL INCENTIVE 2572 MARLENE GIL 3226 11/17/2022 $307.43 MACHINERY & EQUIPMENTS 2654 GOLDEN STAR TECHNOLOGY INC 3227 11/17/2022 $40.00 CARPOOL INCENTIVE 3123 NEIRA YESSIE GRANADOS 3228 11/17/2022 $2,091.00 VEHICLE MAINTENANCE/EXPENSES 270 HARBOR DIESEL AND EQUIPMENT INC 3229 11/17/2022 $7,500.00 CDBG - HEART OF COMPASSION 1349 HEART OF COMPASSION 3230 11/17/2022 $30.00 CARPOOL INCENTIVE 3196 MICAH HERD 3231 11/17/2022 $40.00 CARPOOL INCENTIVE 4280 NADINE HERNANDEZ 3232 11/17/2022 $11,978.39 SUPPLIES 43860 MYERS & SONS HI-WAY SAFETY INC 3233 11/17/2022 $126.24 COPIER REPAIR/SERVICES 2793 IBE DIGITAL 3234 11/17/2022 $8,281.94 VEHICLE MAINTENANCE/EXPENSES 29680 INLAND KENWORTH INC 3235 11/17/2022 $1,000.00 EDUCATION REIMBURSEMENT 2351 RYAN LANDRUM 3236 11/17/2022 $40.00 CARPOOL INCENTIVE 3810 ALEXIS LUCERO 3237 11/17/2022 $966.00 CONTRACT SERVICES 1501 MAKAI SOLUTIONS 3238 11/17/2022 $116,539.73 CONTRACT SERVICES 2954 MANHOLE ADJUSTING INC

EXHIBIT A
WARRANT # DATE AMOUNT ACCOUNT DESCRIPTION VENDOR # VENDOR NAME City of Montebello
Register of Demands No. 1542
From Payment Date 10/28/22 - To Payment Date 12/01/22
3239 11/17/2022 $250.00 TRAINING 116 ADAM MITCHELL
3240 11/17/2022 $2,727.91 VEHICLE MAINTENANCE/EXPENSES 1385 MUNCIE RECLAMATION AND SUPPLY COMPANY 3241 11/17/2022 $83,467.38 CONTRACT SERVICES 35250 NATIONWIDE ENVIRONMENTAL SERVICES 3242 11/17/2022 $40.00 CARPOOL INCENTIVE 2203 SAMANTHA NEVAREZ 3243 11/17/2022 $40.00 CARPOOL INCENTIVE 59960 JO ANN PANOSIAN 3244 11/17/2022 $750.00 CONTRACT SERVICES 3147 PMC PLUMBING INC 3245 11/17/2022 $40.00 CARPOOL INCENTIVE 3712 MATTHEW ROBERT RAMOS 3246 11/17/2022 $331.24 SUPPLIES 1120 BLUETRITON BRANDS INC 3247 11/17/2022 $3,469.42 SUPPLIES 2594 THE SAUCE CREATIVE SERVICES CORP 3248 11/17/2022 $30.00 CARPOOL INCENTIVE 69960 NICOLE I SAUCEDO 3249 11/17/2022 $36,489.13 FUEL INVENTORY 1059 AMBER RESOURCES LLC 3250 11/17/2022 $40.00 CARPOOL INCENTIVE 2985 KEVIN SAYCOCIE 3251 11/17/2022 $303.19 SUPPLIES 2686 THE SHERWIN-WILLIAMS CO 3252 11/17/2022 $40.00 CARPOOL INCENTIVE 24280 MARTIN SOLANO 3253 11/17/2022 $40.00 CARPOOL INCENTIVE 3001 MICHAEL SOLORZA 3254 11/17/2022 $886.56 SUPPLIES 31270 STARBOARD TACK SUPPLY INC 3255 11/17/2022 $40.00 CARPOOL INCENTIVE 3053 MICHAEL TELLES 3256 11/17/2022 $80.00 CARPOOL INCENTIVE 1091 JANELLE TORRES 3257 11/17/2022 $3,245.00 CONTRACT SERVICES 217 TRACKIT LLC 3258 11/17/2022 $2,403.00 CONTRACT SERVICES 3133 ULTIMATE MAINTENANCE SERVICE 3259 11/17/2022 $2,063.91 SUPPLIES 3088 WAXIES ENTERPRISES LLC 3260 11/17/2022 $474.00 CONTRACT SERVICES 183 WECK LABORATORIES ENVIRONMENTAL SERVICES INC 3261 11/17/2022 $4,829.68 CONTRACT SERVICES 1657 OSCAR ZAVALAS 3262 11/23/2022 $973.44 MACHINERY & EQUIPMENTS 2586 AMAZON CAPITAL SERVICES INC 3263 11/23/2022 $2,602.43 VEHICLE MAINTENANCE/EXPENSES 1101 BLACK AND WHITE EMERGENCY VEHICLES LLC 3264 11/23/2022 $9,140.00 CONTRACT SERVICES 56540 COMPLETE PAPERLESS SOLUTIONS LLC 3265 11/23/2022 $856.56 CONTRACT SERVICES 2057 EVERNORTH BEHAVIORAL HEALTH 3266 11/23/2022 $15,230.80 CONTRACT SERVICES 3490 INTER-CON SECUIRTY SYSTEMS INC

EXHIBIT A
WARRANT # DATE AMOUNT ACCOUNT DESCRIPTION VENDOR # VENDOR NAME City of Montebello
Register of Demands No. 1542
From Payment Date 10/28/22 - To Payment Date 12/01/22
3267 11/23/2022 $1,957.56 CONTRACT SERVICES 2152 JOHNSON CONTROLS INC 3268 11/23/2022 $156.10 SUPPLIES 1120 BLUETRITON BRANDS INC 3269 11/23/2022 $3,313.13 FUEL 1059 AMBER RESOURCES LLC 3270 11/23/2022 $15,000.00 CONTRACT SERVICES 3602 THE PUN GROUP LLP 3271 11/23/2022 $123.37 SUPPLIES 3066 V & V MANUFACTURING INC 3272 12/01/2022 $3,073.98 SUPPLIES 3163 BANK OF AMERICA 3273 12/01/2022 $457.21 SUPPLIES 3163 BANK OF AMERICA
3274 12/01/2022 $4,792.92 SUPPLIES 3163 BANK OF AMERICA 3275 12/01/2022 $4,721.95 TRAINING 3163 BANK OF AMERICA 3276 12/01/2022 $97.76 FUEL 3163 BANK OF AMERICA
3277 12/01/2022 $2,629.20 SUPPLIES 3163 BANK OF AMERICA 3278 12/01/2022 $3,070.45 TRAVEL & MEETINGS 3163 BANK OF AMERICA 3279 12/01/2022 $1,670.56 SUPPLIES 3163 BANK OF AMERICA 3280 12/01/2022 $1,078.35 TRAINING 3163 BANK OF AMERICA 3281 12/01/2022 $466.59 SUPPLIES 3163 BANK OF AMERICA
3282 12/01/2022 $57.31 SUPPLIES 3163 BANK OF AMERICA
3283 12/01/2022 $475.29 SUPPLIES 3163 BANK OF AMERICA
3284 12/01/2022 $99.17 SUPPLIES 3163 BANK OF AMERICA
3285 12/01/2022 $146.53 SUPPLIES 3163 BANK OF AMERICA
3286 12/01/2022 $154.49 SUPPLIES 3163 BANK OF AMERICA
3287 12/01/2022 $2.99 DUES & SUBSCRIPTIONS 3163 BANK OF AMERICA 3288 12/01/2022 $159,199.56 TRANSFER IN 17870 THE BANK OF NEW YORK MELLON 3289 12/01/2022 $136,480.13 INTEREST EXPENSE 17870 THE BANK OF NEW YORK MELLON 3290 12/01/2022 $169,793.76 TRANSFER IN 17870 THE BANK OF NEW YORK MELLON 3291 12/01/2022 $436,714.78 INTEREST EXPENSE 17870 THE BANK OF NEW YORK MELLON 3292 12/01/2022 $1,757,330.25 INTEREST PAYABLE 17870 THE BANK OF NEW YORK MELLON 3293 12/01/2022 $534.64 SUPPLIES 3163 BANK OF AMERICA
3294 12/01/2022 $920.21 ADVERTISING/PRINTING SERVICES 3163 BANK OF AMERICA

EXHIBIT A
WARRANT # DATE AMOUNT ACCOUNT DESCRIPTION VENDOR # VENDOR NAME City of Montebello
Register of Demands No. 1542
From Payment Date 10/28/22 - To Payment Date 12/01/22
3295 12/01/2022 $4,936.85 SUPPLIES 3163 BANK OF AMERICA 3296 12/01/2022 $140,255.39 CONTRACT SERVICES 37720 ADVANCED APPLIED ENGINEERING INC 3297 12/01/2022 $7,752.50 CONTRACT SERVICES 38010 ADVANCED AVANT-GARDE CORPORATION 3298 12/01/2022 $33,041.08 CONTRACT SERVICES 3411 AIM CONSULTING SERVICES 3299 12/01/2022 $59,124.27 MACHINERY & EQUIPMENTS 20350 ALLSTAR FIRE EQUIPMENT INC 3300 12/01/2022 $6,729.96 SUPPLIES 2586 AMAZON CAPITAL SERVICES INC 3301 12/01/2022 $943.74 SUPPLIES 62880 AMERICAN MARKER
3302 12/01/2022 $35,815.48 CONTRACT SERVICES 3016 ANTARES GOLF LLC 3303 12/01/2022 $72,242.33 NOTES PAYABLE 19120 CENTRAL BASIN MUNICIPAL WATER DISTRICT 3304 12/01/2022 $1,688.52 SUPPLIES 10000 CLEAN SWEEP SUPPLY CO INC 3305 12/01/2022 $2,464.66 CONTRACT SERVICES 2889 COMLOCK SECURITY GROUP INC 3306 12/01/2022 $6,333.10 LEASE PAYMENT 74920 EXECUTIVE CAR LEASING COMPANY 3307 12/01/2022 $2,060.00 CDBG-CV 3169 FOOTHOLD TECHNOLOGY INC 3308 12/01/2022 $3,553.60 CONTRACT SERVICES 1175 GRAPHIC ELECTRIC INC 3309 12/01/2022 $66.72 VEHICLE MAINTENANCE/EXPENSES 22560 H & H AUTO PARTS WHOLESALE 3310 12/01/2022 $2,365.65 COPIER REPAIR/SERVICES 2793 IBE DIGITAL 3311 12/01/2022 $36,558.95 CONTRACT SERVICES 2152 JOHNSON CONTROLS INC 3312 12/01/2022 $450.00 CONTRACT SERVICES 16760 LIEBERT CASSIDY WHITMORE 3313 12/01/2022 $1,260.71 SUPPLIES 26670 LIFE-ASSIST INC 3314 12/01/2022 $608.30 CONTRACT SERVICES 3276 MARK ROBERT LOPEZ 3315 12/01/2022 $8,546.00 CONTRACT SERVICES 3028 ONWARD ENGINEERING 3316 12/01/2022 $11,247.66 CONTRACT SERVICES 54240 PDQ ENTERPRISES INC 3317 12/01/2022 $5,763.41 CONTRACT SERVICES 2925 R-DOORS INC 3318 12/01/2022 $8,678.43 CONTRACT SERVICES 2382 SAFE USA INC 3319 12/01/2022 $2,602.81 ADVERTISING/PRINTING SERVICES 2594 THE SAUCE CREATIVE SERVICES CORP 3320 12/01/2022 $1,800.42 FUEL 1059 AMBER RESOURCES LLC 3321 12/01/2022 $195.46 SUPPLIES 2686 THE SHERWIN-WILLIAMS CO ACH Total $6,032,749.62

EXHIBIT A
WARRANT # DATE AMOUNT ACCOUNT DESCRIPTION VENDOR # VENDOR NAME City of Montebello
Register of Demands No. 1542
From Payment Date 10/28/22 - To Payment Date 12/01/22
598103 11/03/2022 $4,786.83 VEHICLE MAINTENANCE/EXPENSES 3333 A & A FLEET PAINTING INC 598104 11/03/2022 $789.49 UTILITY SERVICES 2257 AIRESPRING INC 598105 11/03/2022 $8,230.00 CONTRACT SERVICES 14 ALCORN FENCE COMPANY 598106 11/03/2022 $5,460.00 CONTRACT SERVICES 69480 ALLTECH INDUSTRIES INC 598107 11/03/2022 $548.85 UTILITY SERVICES 38380 AT&T
598108 11/03/2022 $589.57 UTILITY SERVICES 39550 AT&T
598109 11/03/2022 $3,362.60 CONTRACT SERVICES 16710 ATKINSON ANDELSON LOYA RUUD & ROMO 598110 11/03/2022 $1,991.25 CONTRACT SERVICES 3499 AVIDEX INDUSTRIES LLC 598111 11/03/2022 $192.50 CONTRACT SERVICES 2769 KATALINA BELTRAN 598112 11/03/2022 $1,701.00 CONTRACT SERVICES 370 BK SIGNS INC 598113 11/03/2022 $12,300.00 CONTRACT SERVICES 3104 CALIFORNIA ADVOCACY LLC 598114 11/03/2022 $20,000.00 CONTRACT SERVICES 11080 CALIFORNIA WATER SERVICE CO 598115 11/03/2022 $1,283.92 UTILITY SERVICES 47580 CALIFORNIA WATER SERVICE COMPANY 598116 11/03/2022 $765.70 CONTRACT SERVICES 40850 MARIA E CASAS 598117 11/03/2022 $81.60 VEHICLE MAINTENANCE/EXPENSES 45170 MONTEBELLO AUTO GROUP LLC 598118 11/03/2022 $288.61 CONTRACT SERVICES 36870 CINTAS CORPORATION NO 3 598119 11/03/2022 $9,805.63 CONTRACT SERVICES 52710 CLEAN ENERGY FUELS 598120 11/03/2022 $1,189.47 SUPPLIES 2455 HASA, INC.
598121 11/03/2022 $525.00 CONTRACT SERVICES 2759 D F POLYGRAPH 598122 11/03/2022 $1,555.00 CONTRACT SERVICES 2019 DEWEY SERVICES INC 598123 11/03/2022 $5,477.40 CONTRACT SERVICES 3334 EAGLE PORTABLES SANITATION LLC 598124 11/03/2022 $693.75 SUPPLIES 7610 EWING IRRIGATION PRODUCTS 598125 11/03/2022 $111.46 MAIL/ POSTAL EXPENSE 22400 FEDERAL EXPRESS CORPORATION 598126 11/03/2022 $407.73 VEHICLE MAINTENANCE/EXPENSES 29160 FORD OF MONTEBELLO 598127 11/03/2022 $5,450.76 MACHINERY & EQUIPMENTS 3350 GARVEY EQUIPMENT COMPANY 598128 11/03/2022 $700.39 VEHICLE MAINTENANCE/EXPENSES 33720 GILLIG LLC 598129 11/03/2022 $16,895.00 CONTRACT SERVICES 74240 GLOBAL CTI GROUP INC

EXHIBIT A
WARRANT # DATE AMOUNT ACCOUNT DESCRIPTION VENDOR # VENDOR NAME City of Montebello
Register of Demands No. 1542
From Payment Date 10/28/22 - To Payment Date 12/01/22
598130 11/03/2022 $127.31 CONTRACT SERVICES 1650 GOLDEN STATE ELEVATOR SERVICE INC 598131 11/03/2022 $19,725.03 CONTRACT SERVICES 33460 GOODYEAR TIRE & RUBBER COMPANY 598132 11/03/2022 $2,020.87 ADVERTISING/PRINTING SERVICES 3063 HALO BRANDED SOLUTIONS INC 598133 11/03/2022 $650.00 CONTRACT SERVICES 2942 JAIROS PLUMBING INC 598134 11/03/2022 $992.25 SUPPLIES 1169 JCM AND ASSOCIATES INC 598135 11/03/2022 $600.00 CONTRACT SERVICES 3383 KELLER TRANSLATION DEVELOPMENT SERVICE LLC 598136 11/03/2022 $560.20 CONTRACT SERVICES 3035 LA COUNTY SHERIFF'S DEPARTMENT 598137 11/03/2022 $4,300.00 CONTRACT SERVICES 41130 MIHM INC 598138 11/03/2022 $528.96 TRAINING 790 CITY OF MONTEBELLO PETTY CASH 598139 11/03/2022 $21,538.84 UTILITY SERVICES 4760 MONTEBELLO LAND & WATER CO 598140 11/03/2022 $30.00 CONTRACT SERVICES 2958 RACHEL YVONNE HOSKINS 598141 11/03/2022 $613.20 SUPPLIES 12180 MS FLOWERS
598142 11/03/2022 $1,556.34 SUPPLIES 2480 SOCAL AUTO & TRUCK PARTS INC 598143 11/03/2022 $225.00 CONTRACT SERVICES 26370 NAVARROS TOWING SERVICE 598144 11/03/2022 $8,313.58 CONTRACT SERVICES 3225 NELSON NYGAARD CONSULTING ASSOC INC 598145 11/03/2022 $1,501.95 CONTRACT SERVICES 41180 MANUEL NUNEZ 598146 11/03/2022 $353.46 SUPPLIES 15620 OFFICE DEPOT INC 598147 11/03/2022 $4,008.92 FURNITURE & FIXTURES PURCHASES 3530 OFFICE RELIEF INC 598148 11/03/2022 $224.58 UNIFORM EXPENSE 161 PREMIERE CUSTOM SILKSCREENING 598149 11/03/2022 $440.00 CONTRACT SERVICES 42750 PSYCHOLOGICAL CONSULTING ASSOCIATES INC 598150 11/03/2022 $11,576.61 CONTRACT SERVICES 43510 QUIET CANNON MONTEBELLO INC 598151 11/03/2022 $300.00 CONTRACT SERVICES 1681 JAIME RODRIGUEZ 598152 11/03/2022 $105.00 TRAVEL & MEETINGS 34990 SAN GABRIEL VALLEY CITY MANAGERS ASSOC 598153 11/03/2022 $400.00 DUES & SUBSCRIPTIONS 3710 SAN GABRIEL VALLEY POLICE CHIEFS ASSOC 598154 11/03/2022 $91,289.33 UTILITY SERVICES 14730 SAN GABRIEL VALLEY WATER CO 598155 11/03/2022 $525.00 CONTRACT SERVICES 68000 JORGE SOTO 598156 11/03/2022 $134,828.91 UTILITY SERVICES 45630 SOUTHERN CALIFORNIA EDISON 598157 11/03/2022 $666.41 FRINGE BENEFITS 1990 STANDARD INSURANCE COMPANY

EXHIBIT A
WARRANT # DATE AMOUNT ACCOUNT DESCRIPTION VENDOR # VENDOR NAME City of Montebello
Register of Demands No. 1542
From Payment Date 10/28/22 - To Payment Date 12/01/22
598158 11/03/2022 $2,707.48 MISCELLANEOUS REVENUE 13330 STATE WATER RESOURCES CONTROL BOARD 598159 11/03/2022 $6,486.43 UTILITY SERVICES 526 T-MOBILE USA INC 598160 11/03/2022 $4,244.62 VEHICLE MAINTENANCE/EXPENSES 60710 THE AFTERMARKET PARTS COMPANY LLC 598161 11/03/2022 $625.00 ADVERTISING/PRINTING SERVICES 3462 THE WALKING MAN INC 598162 11/03/2022 $522.59 SALES TAX LIABILITY 3110 TOMAS ALVARADO 598163 11/03/2022 $4,200.00 SUPPLIES 2611 TURBOSCAPE INC 598164 11/03/2022 $17,500.00 CONTRACT SERVICES 2699 KIM TUNRER 598165 11/03/2022 $2,129.81 SUPPLIES 45120 ULINE INC
598166 11/03/2022 $653.44 SUPPLIES 131 UNITED SITE SERVICES INC 598167 11/03/2022 $18,069.28 CONTRACT SERVICES 3406 UNIVERSAL PROTECTION SERVICE LP 598168 11/03/2022 $7,217.44 COPIER REPAIR/SERVICES 2747 US BANK EQUIPMENT FINANCE 598169 11/03/2022 $3,886.00 CONTRACT SERVICES 37 US SECURITY ASSOCIATES INC 598170 11/03/2022 $38.01 UTILITY SERVICES 23610 VERIZON WIRELESS 598171 11/03/2022 $393.99 SUPPLIES 3864 VORTEX USA INC. 598172 11/03/2022 $192.32 SUPPLIES 9470 W W GRAINGER INC 598173 11/03/2022 $250.71 VEHICLE MAINTENANCE/EXPENSES 25860 WAYNE HARMEIER INC 598174 11/03/2022 $100,812.00 CONTRACT SERVICES 40860 WEST COAST ARBORISTS INC 598175 11/03/2022 $494.87 SUPPLIES 67320 WINZER CORPORATION 598176 11/03/2022 $1,160.87 CONTRACT SERVICES 3006 WORLD OIL ENVIRONMENTAL SERVICES 598177 11/03/2022 $1,141.00 CONTRACT SERVICES 71170 YOUNG ELECTRIC SIGN COMPANY 598178 11/03/2022 $1,554.00 CONTRACT SERVICES 3662 YOUTH EVOLUTION ACTIVITIES 598179 11/10/2022 $270.50 TRAVEL & MEETINGS 3454 KIMBERLY GUILLEN 598180 11/10/2022 $19.85 ADVERTISING/PRINTING SERVICES 24200 AAT INC 598181 11/10/2022 $59.03 UTILITY SERVICES 1732 AT&T CORP 598182 11/10/2022 $143.50 FUEL 22520 HENRY AGUILAR JR
598183 11/10/2022 $1,386.00 CONTRACT SERVICES 1287 ALTA LANGUAGE SERVICES INC 598184 11/10/2022 $4.76 UTILITY SERVICES 39550 AT&T
598185 11/10/2022 $4,100.00 CONTRACT SERVICES 3868 ATLANTIC STRATEGIES, LLC

EXHIBIT A
WARRANT # DATE AMOUNT ACCOUNT DESCRIPTION VENDOR # VENDOR NAME City of Montebello
Register of Demands No. 1542
From Payment Date 10/28/22 - To Payment Date 12/01/22
598186 11/10/2022 $1,298.84 CONTRACT SERVICES 27170 BEVERLY HOSPITAL 598187 11/10/2022 $330.00 CONTRACT SERVICES 3130 BLAIS & ASSOCIATES LLC 598188 11/10/2022 $15,000.00 CONTRACT SERVICES 3616 BRIDGE GROUP INVESTMENTS II LLC 598189 11/10/2022 $17,464.00 CONTRACT SERVICES 3611 CALIFORNIA CONSULTANTS 598190 11/10/2022 $1,711.00 PUBLIC SAFETY 58240 STATE OF CALIFORNIA-DEPARTMENT OF JUSTICE 598191 11/10/2022 $10,856.75 UTILITY SERVICES 47580 CALIFORNIA WATER SERVICE COMPANY 598192 11/10/2022 $400.00 CONTRACT SERVICES 3892 CYNTHIA CAMACHO 598193 11/10/2022 $998.43 UTILITY SERVICES 55830 CHARTER COMMUNICATIONS 598194 11/10/2022 $351.65 CONTRACT SERVICES 36870 CINTAS CORPORATION NO 3 598195 11/10/2022 $56,271.18 LEASE PAYMENT 1872 FIRST SECURITY FINANCE 598196 11/10/2022 $1,450.00 ADVERTISING/PRINTING SERVICES 1354 DAILY JOURNAL CORPORATION 598197 11/10/2022 $353.28 TRAINING 54160 MONIQUE DELLIBOVI 598198 11/10/2022 $6,350.00 CONTRACT SERVICES 50120 ENVIRONMENTAL SYSTEMS RESEARCH INSTITUTE INC 598199 11/10/2022 $96.50 CONTRACT SERVICES 1117 FILE KEEPERS LLC 598200 11/10/2022 $4,344.49 UNIFORM EXPENSE 55650 GALLS LLC 598201 11/10/2022 $2,120.20 VEHICLE MAINTENANCE/EXPENSES 30190 IB AUTO PARTS INC 598202 11/10/2022 $2,181.57 ADVERTISING/PRINTING SERVICES 3307 HASHTAG PROMOTIONS LLC 598203 11/10/2022 $2,450.00 CONTRACT SERVICES 3781 HECTOR VILLALPANDO 598204 11/10/2022 $649.42 CONTRACT SERVICES 1357 IRON MOUNTAIN INC 598205 11/10/2022 $13,278.00 CONTRACT SERVICES 3302 JACOB GREEN & ASSOCIATES INC 598206 11/10/2022 $3,608.00 CONTRACT SERVICES 3321 JOSE LUIS ZAVALA 598207 11/10/2022 $22,736.00 CONTRACT SERVICES 3044 KAIZER RANGWALA 598208 11/10/2022 $541.80 PERMITS AND FEES 56850 LOS ANGELES COUNTY FIRE DEPARTMENT 598209 11/10/2022 $749.00 PERMITS AND FEES 56850 LOS ANGELES COUNTY FIRE DEPARTMENT 598210 11/10/2022 $7,900.00 CONTRACT SERVICES 41130 MIHM INC 598211 11/10/2022 $380.00 DUES & SUBSCRIPTIONS 2355 MONTEBELLO ROTARY CLUB 598212 11/10/2022 $12,010.28 VEHICLE MAINTENANCE/EXPENSES 54300 SHAK ENTERPRISES INC 598213 11/10/2022 $5,215.50 CONTRACT SERVICES 53120 NATIONAL CONSTRUCTION RENTALS

EXHIBIT A
WARRANT # DATE AMOUNT ACCOUNT DESCRIPTION VENDOR # VENDOR NAME City of Montebello
Register of Demands No. 1542
From Payment Date 10/28/22 - To Payment Date 12/01/22
598214 11/10/2022 $150.00 GENERAL GOVERNMENT 3886 ANETTE NAVARRO 598215 11/10/2022 $225.00 CONTRACT SERVICES 26370 NAVARROS TOWING SERVICE 598216 11/10/2022 $432.27 SUPPLIES 15620 OFFICE DEPOT INC 598217 11/10/2022 $70.00 PARKS AND RECREATION 3885 VERONICA ORTIZ 598218 11/10/2022 $2,700.00 CONTRACT SERVICES 1843 PASSAGE ENTERTAINMENT 598219 11/10/2022 $50.56 UTILITY SERVICES 100 PICO WATER DISTRICT 598220 11/10/2022 $57,584.52 LEASE PAYMENT 2357 PNC BANK NATIONAL ASSOCIATION 598221 11/10/2022 $596.83 CONTRACT SERVICES 3279 PROCURE AMERICA INC 598222 11/10/2022 $208.38 SUPPLIES 56260 PRUDENTIAL OVERALL SUPPLY 598223 11/10/2022 $209.30 TRAVEL & MEETINGS 3849 GARY T ROBINSON 598224 11/10/2022 $70.00 PARKS AND RECREATION 3884 SHIRAK SARGSYAN 598225 11/10/2022 $6,578.00 CONTRACT SERVICES 3583 SHOCKWAVE ELECTRIC INC 598226 11/10/2022 $937.52 PERMITS AND FEES 28240 SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT 598227 11/10/2022 $151.85 PERMITS AND FEES 28240 SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT 598228 11/10/2022 $8,618.01 UTILITY SERVICES 51430 SOUTH MONTEBELLO IRRIGATION DISTRICT 598229 11/10/2022 $21,448.60 UTILITY SERVICES 45630 SOUTHERN CALIFORNIA EDISON 598230 11/10/2022 $43,000.38 FUEL INVENTORY 40520 SOUTHERN CALIFORNIA GAS CO 598231 11/10/2022 $1,042.61 CONTRACT SERVICES 3397 STERICYCLE INC 598232 11/10/2022 $621.00 CONTRACT SERVICES 3762 SUPERIOR PROTECTION SERVICES CA INC 598233 11/10/2022 $1,280.75 VEHICLE MAINTENANCE/EXPENSES 60710 THE AFTERMARKET PARTS COMPANY LLC 598234 11/10/2022 $650.00 CONTRACT SERVICES 71210 STAR-DUST TOURS INC 598235 11/10/2022 $192.61 DUES & SUBSCRIPTIONS 41430 THOMSON REUTERS - WEST 598236 11/10/2022 $4,464.69 CONTRACT SERVICES 652 TIMECLOCK PLUS 598237 11/10/2022 $14,852.66 CONTRACT SERVICES 3187 TRISTAR RISK MANAGEMENT 598238 11/10/2022 $1,098.10 CONTRACT SERVICES 131 UNITED SITE SERVICES INC 598239 11/10/2022 $8,365.60 CONTRACT SERVICES 3406 UNIVERSAL PROTECTION SERVICE LP 598240 11/10/2022 $365.00 TRAINING 3883 UNIVERSAL PUBLIC PROCUREMENT CERTIFICATION COUNCIL 598241 11/10/2022 $7,305.52 UTILITY SERVICES 23610 VERIZON WIRELESS

EXHIBIT A
WARRANT # DATE AMOUNT ACCOUNT DESCRIPTION VENDOR # VENDOR NAME City of Montebello
Register of Demands No. 1542
From Payment Date 10/28/22 - To Payment Date 12/01/22
598242 11/10/2022 $84,154.00 CONTRACT SERVICES 40860 WEST COAST ARBORISTS INC 598243 11/10/2022 $9,320.00 CONTRACT SERVICES 2857 WOLVERINE FENCE COMPANY INC 598244 11/10/2022 $2,035.00 CONTRACT SERVICES 17870 THE BANK OF NEW YORK MELLON 598245 11/10/2022 $50,000.00 LIABILITY INSURANCE 3368 SAM PERLMUTTER CLIENT TRUST ACCOUNT 598246 11/17/2022 $3,416.00 CONTRACT SERVICES 3824 AAA RENTS AND EVENTS INC 598247 11/17/2022 $9,179.01 SUPPLIES 1670 ADAMSON POLICE PRODUCTS 598248 11/17/2022 $1,927.50 CONTRACT SERVICES 3488 ASPIRE RX INC 598249 11/17/2022 $2,556.61 UTILITY SERVICES 39550 AT&T 598250 11/17/2022 $4,099.04 UTILITY SERVICES 39550 AT&T 598251 11/17/2022 $22.71 UTILITY SERVICES 73760 AT&T TELECONFERENCE SERVICES 598252 11/17/2022 $15,725.26 CONTRACT SERVICES 16710 ATKINSON ANDELSON LOYA RUUD & ROMO 598253 11/17/2022 $8,200.00 CONTRACT SERVICES 3868 ATLANTIC STRATEGIES, LLC 598254 11/17/2022 $200.00 CONTRACT SERVICES 2769 KATALINA BELTRAN 598255 11/17/2022 $6,092.50 CONTRACT SERVICES 3130 BLAIS & ASSOCIATES LLC 598256 11/17/2022 $8,007.30 BUILDING IMPROVEMENTS 3033 OFFICE SOLUTIONS BUSINESS PRODUCTS & SERVICES LLC 598257 11/17/2022 $40.00 TRAINING 21620 BURRO CANYON ENTERPRISES INC 598258 11/17/2022 $650.00 TRAINING 3900 CALIFORNIA POLICE CHIEFS ASSOCIATION 598259 11/17/2022 $103.97 UTILITY SERVICES 47580 CALIFORNIA WATER SERVICE COMPANY 598260 11/17/2022 $69.98 UTILITY SERVICES 55830 CHARTER COMMUNICATIONS 598261 11/17/2022 $5,468.57 UTILITY SERVICES 55830 CHARTER COMMUNICATIONS 598262 11/17/2022 $577.22 CONTRACT SERVICES 36870 CINTAS CORPORATION NO 3 598263 11/17/2022 $1,000.00 CONTRACT SERVICES 2683 COLIBRI ENTERTAINMENT INC 598264 11/17/2022 $1,611.32 SUPPLIES 2455 HASA, INC.
598265 11/17/2022 $641.00 CONTRACT SERVICES 11990 CUMMINS ALLISON CORP 598266 11/17/2022 $3,140.72 VEHICLE MAINTENANCE/EXPENSES 950 CUMMINS INC 598267 11/17/2022 $480.76 CONTRACT SERVICES 3869 EARLYCHILDHOOD, LLC 598268 11/17/2022 $226.81 CONTRACT SERVICES 1894 ECONOMY RENTAL INC 598269 11/17/2022 $2,005.24 SUPPLIES 7610 EWING IRRIGATION PRODUCTS

EXHIBIT A
WARRANT # DATE AMOUNT ACCOUNT DESCRIPTION VENDOR # VENDOR NAME City of Montebello
Register of Demands No. 1542
From Payment Date 10/28/22 - To Payment Date 12/01/22
598270 11/17/2022 $29.26 MAIL/ POSTAL EXPENSE 22400 FEDERAL EXPRESS CORPORATION 598271 11/17/2022 $1,976.40 UNIFORM EXPENSE 55650 GALLS LLC 598272 11/17/2022 $40.00 CARPOOL INCENTIVE 3706 ALEX GILLMAN 598273 11/17/2022 $127.31 CONTRACT SERVICES 1650 GOLDEN STATE ELEVATOR SERVICE INC 598274 11/17/2022 $351.00 TRAINING 32140 GOLDEN WEST COLLEGE 598275 11/17/2022 $702.00 TRAINING 32140 GOLDEN WEST COLLEGE 598276 11/17/2022 $9,227.40 CONTRACT SERVICES 33460 GOODYEAR TIRE & RUBBER COMPANY 598277 11/17/2022 $1,689.00 CONTRACT SERVICES 3235 ION SECURITY SYSTEMS 598278 11/17/2022 $3,904.98 CONTRACT SERVICES 3129 IXSYSTEMS INC 598279 11/17/2022 $6,800.00 CONTRACT SERVICES 2942 JAIROS PLUMBING INC 598280 11/17/2022 $686.85 CONTRACT SERVICES 39380 LAWRENCE ROLL-UP DOORS INC 598281 11/17/2022 $80.00 CARPOOL INCENTIVE 3893 MICHAEL FRANCO LOPEZ 598282 11/17/2022 $6,012.60 CONTRACT SERVICES 4810 LA COUNTY DEPT OF PUBLIC WORKS 598283 11/17/2022 $11,412.62 ADVERTISING/PRINTING SERVICES 3116 MONARCH LITHO INC 598284 11/17/2022 $21,720.00 PREPAID EXPENSES 1690 MONTEBELLO FIRE FIGHTERS ASSOCIATION 598285 11/17/2022 $55.56 VEHICLE MAINTENANCE/EXPENSES 54300 SHAK ENTERPRISES INC 598286 11/17/2022 $9,116.54 CDBG - YMCA 97 YOUNG MENS CHRISTIAN ASSOC OF LOS ANGELES 598287 11/17/2022 $40.00 CARPOOL INCENTIVE 3657 STACEY MORALES 598288 11/17/2022 $1,469.17 VEHICLE MAINTENANCE/EXPENSES 2480 SOCAL AUTO & TRUCK PARTS INC 598289 11/17/2022 $58,908.00 MACHINERY & EQUIPMENTS 3834 OPTIBUS INC. 598290 11/17/2022 $750.00 CONTRACT SERVICES 3896 ROBERT J ORTIZ 598291 11/17/2022 $40.00 CARPOOL INCENTIVE 65330 WENDY PEREZ 598292 11/17/2022 $20.77 UTILITY SERVICES 36610 CITY OF PICO RIVERA 598293 11/17/2022 $262.01 UNIFORM EXPENSE 161 PREMIERE CUSTOM SILKSCREENING 598294 11/17/2022 $1,739.00 CONTRACT SERVICES 2944 RESERV CONSTRUCTION 598295 11/17/2022 $40.00 CARPOOL INCENTIVE 3584 BRENDA RODRIGUEZ 598296 11/17/2022 $166.00 EDUCATION REIMBURSEMENT 3894 JOSE ESCAMILLA ROSAS 598297 11/17/2022 $200.00 TRAINING 121 ROSEMARY SANCHEZ

EXHIBIT A
WARRANT # DATE AMOUNT ACCOUNT DESCRIPTION VENDOR # VENDOR NAME City of Montebello
Register of Demands No. 1542
From Payment Date 10/28/22 - To Payment Date 12/01/22
598298 11/17/2022 $7,405.00 CONTRACT SERVICES 3201 SIMPLY BACKFLOW INC 598299 11/17/2022 $250.00 CONTRACT SERVICES 68000 JORGE SOTO 598300 11/17/2022 $1,798.87 VEHICLE MAINTENANCE/EXPENSES 716 SOUTH BAY FORD INC 598301 11/17/2022 $26,984.71 FUEL 45630 SOUTHERN CALIFORNIA EDISON 598302 11/17/2022 $3,217.24 CONTRACT SERVICES 3762 SUPERIOR PROTECTION SERVICES CA INC 598303 11/17/2022 $836.00 CONTRACT SERVICES 9270 TANK SPECIALIST OF CALIFORNIA 598304 11/17/2022 $5,146.06 VEHICLE MAINTENANCE/EXPENSES 60710 THE AFTERMARKET PARTS COMPANY LLC 598305 11/17/2022 $2,483.19 UTILITY SERVICES 72570 US TELEPACIFIC CORP 598306 11/17/2022 $93,185.98 CONTRACT SERVICES 3187 TRISTAR RISK MANAGEMENT 598307 11/17/2022 $7,814.40 CONTRACT SERVICES 37 US SECURITY ASSOCIATES INC 598308 11/17/2022 $2,350.20 VEHICLE MAINTENANCE/EXPENSES 2701 VARGAS DIESEL INC 598309 11/17/2022 $6,045.53 PUBLIC SAFETY 3895 EVELINA VILLA 598310 11/17/2022 $15,114.64 MACHINERY & EQUIPMENTS 3529 VOLCANIC PARTNERS LLC 598311 11/17/2022 $477.95 CONTRACT SERVICES 3572 JIM WARINO 598312 11/17/2022 $6,147.03 VEHICLE MAINTENANCE/EXPENSES 25860 WAYNE HARMEIER INC 598313 11/17/2022 $63.95 CONTRACT SERVICES 3006 WORLD OIL ENVIRONMENTAL SERVICES 598314 11/17/2022 $894.53 ADVERTISING/PRINTING SERVICES 61850 X-IGENT PRINTING INC 598315 11/23/2022 $18,060.00 CONTRACT SERVICES 69480 ALLTECH INDUSTRIES INC 598316 11/23/2022 $75.00 CONTRACT SERVICES 13070 ANTHONY ALMEIDA 598317 11/23/2022 $2,385.56 UTILITY SERVICES 38380 AT&T 598318 11/23/2022 $252.85 UTILITY SERVICES 39550 AT&T
598319 11/23/2022 $58.01 UTILITY SERVICES 39550 AT&T
598320 11/23/2022 $68.64 SUPPLIES 3822 BRIGGS & STRATTON LLC 598321 11/23/2022 $708.00 PUBLIC SAFETY 58240 STATE OF CALIFORNIA-DEPARTMENT OF JUSTICE 598322 11/23/2022 $58.61 UTILITY SERVICES 47580 CALIFORNIA WATER SERVICE COMPANY 598323 11/23/2022 $270.86 SUPPLIES 409 CARAVAN CANOPY INTL INC 598324 11/23/2022 $1,654.03 CONTRACT SERVICES 2922 ARA H BALAYAN 598325 11/23/2022 $293.46 UTILITY SERVICES 55830 CHARTER COMMUNICATIONS

EXHIBIT A
WARRANT # DATE AMOUNT ACCOUNT DESCRIPTION VENDOR # VENDOR NAME City of Montebello
Register of Demands No. 1542
From Payment Date 10/28/22 - To Payment Date 12/01/22
598326 11/23/2022 $1,113.68 SUPPLIES 2455 HASA, INC.
598327 11/23/2022 $2,641.65 ADVERTISING/PRINTING SERVICES 1354 DAILY JOURNAL CORPORATION 598328 11/23/2022 $7,000.00 CONTRACT SERVICES 3556 DEMSEY FILLIGER & ASSOCIATES LLC 598329 11/23/2022 $13,803.15 CONTRACT SERVICES 3334 EAGLE PORTABLES SANITATION LLC 598330 11/23/2022 $214.47 SUPPLIES 3869 EARLYCHILDHOOD, LLC 598331 11/23/2022 $7,296.66 VEHICLE MAINTENANCE/EXPENSES 29160 FORD OF MONTEBELLO 598332 11/23/2022 $250.00 GENERAL GOVERNMENT 3897 MARIBEL HERNANDEZ 598333 11/23/2022 $560.20 CONTRACT SERVICES 3035 LA COUNTY SHERIFF'S DEPARTMENT 598334 11/23/2022 $19,251.73 CONTRACT SERVICES 3489 MARK THOMAS & COMPANY INC 598335 11/23/2022 $2,663.96 VEHICLE MAINTENANCE/EXPENSES 54300 SHAK ENTERPRISES INC 598336 11/23/2022 $1,500.00 CONTRACT SERVICES 3413 ANDREW J NINMER 598337 11/23/2022 $1,191.67 SUPPLIES 15620 OFFICE DEPOT INC 598338 11/23/2022 $1,848.67 SUPPLIES 22 POSITIVE PROMOTIONS 598339 11/23/2022 $400.00 TRAINING 979 PRADO FAMILY SHOOTING RANGE 598340 11/23/2022 $542.34 TRAINING 121 ROSEMARY SANCHEZ 598341 11/23/2022 $549.00 TRAINING 1560 SOUTHERN CA INTERGOV TRAINING & DEV CENTER 598342 11/23/2022 $174.63 CONTRACT SERVICES 28240 SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT 598343 11/23/2022 $24,508.24 NOTES PAYABLE 45630 SOUTHERN CALIFORNIA EDISON 598344 11/23/2022 $27,156.12 UTILITY SERVICES 40520 SOUTHERN CALIFORNIA GAS CO 598345 11/23/2022 $15,500.00 CONTRACT SERVICES 2708 STRYKE SECURITY INC 598346 11/23/2022 $1,187.50 CONTRACT SERVICES 65440 TIERRA WEST ADVISORS 598347 11/23/2022 $8,755.28 CONTRACT SERVICES 3406 UNIVERSAL PROTECTION SERVICE LP 598348 12/01/2022 $4,004.36 UTILITY SERVICES 1732 AT&T CORP 598349 12/01/2022 $6,792.92 CONTRACT SERVICES 3577 ACTION DOOR REPAIR CORPORATION 598350 12/01/2022 $789.49 UTILITY SERVICES 2257 AIRESPRING INC 598351 12/01/2022 $75.00 CONTRACT SERVICES 13070 ANTHONY ALMEIDA 598352 12/01/2022 $5,920.13 UTILITY SERVICES 39550 AT&T 598353 12/01/2022 $105.00 CONTRACT SERVICES 2769 KATALINA BELTRAN

EXHIBIT A
WARRANT # DATE AMOUNT ACCOUNT DESCRIPTION VENDOR # VENDOR NAME City of Montebello
Register of Demands No. 1542
From Payment Date 10/28/22 - To Payment Date 12/01/22
598354 12/01/2022 $279.00 TRAINING 1285 LIFELINE TRAINING 598355 12/01/2022 $200.00 DUES & SUBSCRIPTIONS 11000 CALIFORNIA ASSOCIATION OF CODE ENFORCEMENT OFFICERS 598356 12/01/2022 $428,623.00 MISCELLANEOUS EXPENSE 3286 DEPARTMENT OF TRANSPORTATION 598357 12/01/2022 $608.20 CONTRACT SERVICES 40850 MARIA E CASAS 598358 12/01/2022 $1,122.50 CONTRACT SERVICES 2922 ARA H BALAYAN 598359 12/01/2022 $27,520.00 BUILDING IMPROVEMENTS 1303 CERTIFIED ROOFING APPLICATORS INC 598360 12/01/2022 $185.00 VEHICLE MAINTENANCE/EXPENSES 45170 MONTEBELLO AUTO GROUP LLC 598361 12/01/2022 $1,501.90 RETIREMENT 3128 CITY OF BELL GARDENS 598362 12/01/2022 $290.00 CONTRACT SERVICES 3204 COASTAL OCCUPATIONAL MEDICAL GROUP 598363 12/01/2022 $3,852.31 VEHICLE MAINTENANCE/EXPENSES 950 CUMMINS INC 598364 12/01/2022 $10,330.99 MACHINERY & EQUIPMENTS 26080 L N CURTIS & SONS 598365 12/01/2022 $350.00 ADVERTISING/PRINTING SERVICES 1354 DAILY JOURNAL CORPORATION 598366 12/01/2022 $13,421.68 MACHINERY & EQUIPMENTS 13360 DELL MARKETING LP 598367 12/01/2022 $455,125.61 CONTRACT SERVICES 1146 DOUG MARTIN CONTRACTING COMPANY INC 598368 12/01/2022 $43.93 CONTRACT SERVICES 1117 FILE KEEPERS LLC 598369 12/01/2022 $525.00 CONTRACT SERVICES 1595 FROG ENVIRONMENTAL INC 598370 12/01/2022 $5,645.00 CONTRACT SERVICES 3846 GREGORY A MILES 598371 12/01/2022 $5,250.00 VEHICLE MAINTENANCE/EXPENSES 3501 JUSTIN HILL 598372 12/01/2022 $1,994.92 LEASE PAYMENT 2405 JCB FINANCE 598373 12/01/2022 $250.00 GENERAL GOVERNMENT 3901 JESSE JIMENEZ 598374 12/01/2022 $250.00 GENERAL GOVERNMENT 3603 JOHN R JOSEPH 598375 12/01/2022 $16,617.12 CONTRACT SERVICES 3489 MARK THOMAS & COMPANY INC 598376 12/01/2022 $399,800.00 CONTRACT SERVICES 3422 MIKE BUBALO CONSTRUCTION CO INC 598377 12/01/2022 $10,000.00 CONTRACT SERVICES 3844 EMAD MIRGOLI 598378 12/01/2022 $149.50 VEHICLE MAINTENANCE/EXPENSES 54300 SHAK ENTERPRISES INC 598379 12/01/2022 $70.00 PARKS AND RECREATION 3899 ALFREDO MONTENEGRO 598380 12/01/2022 $1,005.82 VEHICLE MAINTENANCE/EXPENSES 2480 SOCAL AUTO & TRUCK PARTS INC 598381 12/01/2022 $12,879.00 PREPAID EXPENSES 25080 GOVERNMENTJOBS COM INC

EXHIBIT A
WARRANT # DATE AMOUNT ACCOUNT DESCRIPTION VENDOR # VENDOR NAME City of Montebello
Register of Demands No. 1542
From Payment Date 10/28/22 - To Payment Date 12/01/22
598382 12/01/2022 $250.00 GENERAL GOVERNMENT 3903 PEDRO V NORIEGA 598383 12/01/2022 $971.85 CONTRACT SERVICES 41180 MANUEL NUNEZ 598384 12/01/2022 $588.83 SUPPLIES 15620 OFFICE DEPOT INC 598385 12/01/2022 $5,103.00 CONTRACT SERVICES 33510 PACIFIC FLOOR COMPANY INC 598386 12/01/2022 $8,200.00 CONTRACT SERVICES 1843 PASSAGE ENTERTAINMENT 598387 12/01/2022 $456.06 RETIREMENT 42490 LINDA PAYAN
598388 12/01/2022 $100.00 CONTRACT SERVICES 2709 ERNEST PERALTA 598389 12/01/2022 $250.00 GENERAL GOVERNMENT 3906 ALMA PEREZ 598390 12/01/2022 $799.00 CONTRACT SERVICES 3055 CHARLES R ONEAL 598391 12/01/2022 $177.69 CONTRACT SERVICES 51 PODS ENTERPRISES LLC 598392 12/01/2022 $6,455.26 CONTRACT SERVICES 3279 PROCURE AMERICA INC 598393 12/01/2022 $2,315.92 SUPPLIES 503 QUADIENT INC
598394 12/01/2022 $6,681.00 CONTRACT SERVICES 2944 RESERV CONSTRUCTION 598395 12/01/2022 $3,005.97 UTILITY SERVICES 14730 SAN GABRIEL VALLEY WATER CO 598396 12/01/2022 $53,368.36 CONTRACT SERVICES 14730 SAN GABRIEL VALLEY WATER COMPANY 598397 12/01/2022 $565.00 CONTRACT SERVICES 3904 SARAH C MOORE 598398 12/01/2022 $600.00 CONTRACT SERVICES 61140 MICHAEL SAVEDRA 598399 12/01/2022 $44,911.09 IMPROVEMENTS OTHER THAN BUILDING 20770 SEQUEL CONTRACTORS INC 598400 12/01/2022 $6,331.42 CONTRACT SERVICES 673 SILVER & WRIGHT LLP 598401 12/01/2022 $468.27 UTILITY SERVICES 45630 SOUTHERN CALIFORNIA EDISON 598402 12/01/2022 $263.70 UTILITY SERVICES 40520 SOUTHERN CALIFORNIA GAS CO 598403 12/01/2022 $1,810.94 CONTRACT SERVICES 11240 TED LEVINE DRUM COMPANY 598404 12/01/2022 $3,941.41 UTILITY SERVICES 72570 US TELEPACIFIC CORP 598405 12/01/2022 $494,704.89 CONTRACT SERVICES 2789 TREND SPORTS LLC 598406 12/01/2022 $535.60 RETIREMENT 27300 ROBERT C TUFANO 598407 12/01/2022 $315.00 TRAINING 3883 UNIVERSAL PUBLIC PROCUREMENT CERTIFICATION COUNCIL 598408 12/01/2022 $55.00 GENERAL GOVERNMENT 3902 BENJAMIN VENTURA 598409 12/01/2022 $494.50 UTILITY SERVICES 23610 VERIZON WIRELESS

EXHIBIT A
WARRANT # DATE AMOUNT ACCOUNT DESCRIPTION VENDOR # VENDOR NAME City of Montebello
Register of Demands No. 1542
From Payment Date 10/28/22 - To Payment Date 12/01/22
598410 12/01/2022 $1,189.06 VEHICLE MAINTENANCE/EXPENSES 25860 WAYNE HARMEIER INC 598411 12/01/2022 $612.00 CONTRACT SERVICES 51770 WILLDAN FINANCIAL SERVICES 598412 12/01/2022 $1,141.00 CONTRACT SERVICES 71170 YOUNG ELECTRIC SIGN COMPANY 598413 12/01/2022 $840.00 CONTRACT SERVICES 3662 YOUTH EVOLUTION ACTIVITIES Total $3,731,619.85
Successor Agnecy (SA)
1497 11/10/2022 $6,150.00 CONTRACT SERVICES 15180 STEARNS CONRAD AND SCHMIDT CONSULTING ENG SA Total $6,150.00
Grand Total $9,770,519.47

ITEM # 16

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 21, 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 21, 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

CITY COUNCIL AND PUBLIC FINANCING AUTHORITY AGENDA REPORT - MEETING OF DECEMBER 21, 2022

 Extend the current hotel management agreements between the QCM affiliated 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,

3 pertaining to the Home2Suites by Hilton, has been extended to August 24, 2052, by way of a first amendment to the hotel management agreement dated even herewith.

3. F&B RIGHTS FOR FUTURE IMPROVEMENTS:

The License Agreement is amended to add paragraph (56) relating to future improvements at the Property:
(56) FUTURE IMPROVEMENTS ON THE PROPERTY.

City acknowledges that Licensee desires to facilitate the planning, design, develop, building, construction, operation and management of a New Conference and Events Center to be located on a portion of the Property, together with two (2) new hotels, restaurant(s), and similar facilities that will complement and increase revenue opportunities of the existing City-owned facilities and other amenities now existing or under development on the Property, with the construction and operation of such future improvements to be without any cost to the City. The City agrees and commits to working cooperatively and collaboratively with Licensee to conduct due diligence, environmental and planning studies to determine the feasibility of developing and operating such facilities on the Property. Consistent with the terms of the License Agreement, the parties acknowledge and agree that, to the extent such future facilities include or offer food and beverage service, Licensee has and shall have the exclusive right to provide such food and beverage service, regardless of whether said facilities are owned or developed by Licensee or a third-party.

4. COMPENSATION:

Paragraph 6 of the License Agreement (COMPENSATION) is hereby amended as follows:
(a) In subparagraph (a), the term “one million dollars” shall be replaced with “ten million dollars”.
(b) In subparagraph (b), the phrase “in excess of one million dollars, but less than one million two hundred fifty thousand dollars” shall be replaced with “in excess of ten million dollars, but less than twelve million dollars”.
(c) In subparagraph (c), the phrase “in excess of one million two hundred fifty thousand dollars, but less than one million five hundred thousand dollars” shall be replaced with “in excess of twelve million dollars, but less than fourteen million dollars”. (d) In subparagraph (d), the phrase “in excess of one million five hundred thousand dollars, but less than one million seven hundred fifty thousand dollars” shall be replaced with “in excess of fourteen million dollars, but less than sixteen million dollars”. (e) In subparagraph (e), the phrase “in excess of one million seven hundred fifty thousand dollars” shall be replaced with “in excess of sixteen million dollars, but less than eighteen million dollars”.
(f) In subparagraph (f), the phrase “in excess of two million dollars” shall be replaced with “in excess of eighteen million dollars”
(g) A new subparagraph (g) is hereby added to paragraph 6 as follows:
(g) All revenues generated from the Land Tariff, Resort Fee, Tourism Fee, Energy Tariff, Environmental Fee, Hospitality Fee and any similar future fees, taxes or tariffs imposed

4 on the Property (or any portion thereof) shall not be included in the calculation of “gross receipts.”

5. FIXTURES:

The License Agreement is amended to add a paragraph (57) relating to fixtures within the Quiet Cannon Events Center and ownership thereof:
(57) QUIET CANNON FIXTURES:

All trade fixtures and equipment, signs, appliances, furniture, and other personal property of any nature located within or on the Quiet Cannon premises as of the date of the 11th Amendment, or purchased and installed by Licensee in the future for Quiet Cannon and installed on the premises shall not become a part of the real property and may be removed by Licensee from the premises at any time prior to sixty (60) days following the expiration or termination of this License Agreement. Notwithstanding the forgoing, at any time Quiet Cannon may choose to donate any or all of the trade fixtures, equipment, signs, appliances, furniture and other personal property to the City, subject to the City’s acceptance of the property offered by the Quiet Cannon This section shall supersede and prevail over any other term or provision in the License Agreement relating to fixtures prior to the effective date of the 11th Amendment.”

6. EFFECT OF ELEVENTH AMENDMENT OF LICENSE AGREEMENT:

Except as hereby amended by this Eleventh Amendment, the License Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties hereto cause this Agreement to be executed on the day and year first written.

CITY:

CITY OF MONTEBELLO
By: ___________________________________
Approved as to Form: Its Mayor, Kimberly Cobos-Cawthorne ________________________________ By: ___________________________________ Arnold Alvarez-Glasman Its City Manager, Rene Bobadilla City Attorney

5 ________________________________ QUIET CANNON MONTEBELLO INC.

City Clerk
_________________________________ By: ___________________________________ QCM Counsel, John Harper Its President/CEO, Brad Perrin