63 (2) Termination. All contracts in excess of $10,000 must address termination for cause and for convenience by the non-federal entity including the manner by which it will be effected and the basis for settlement. (3) Davis-Bacon Act, as amended (40 U.S.C. §§ 3141 – 3148). When required by federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. §§ 3141 – 3144, and 3146 – 3148) as supplemented by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-federal entity must report all suspected or reported violations to the federal awarding agency. The contracts must also include a provision for compliance with the Copeland “Anti-Kickback” Act (40 U.S.C. § 3145), as supplemented by Department of Labor regulations (29 CFR Part 3, “Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States”).
The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of a public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-federal entity must report all suspected or reported violations to the federal awarding agency.
(4) Contract Work Hours and Safety Standards Act (40 U.S.C. §§ 3701 – 3708).
Where applicable, all contracts awarded by the non-federal entity in excess of $100,000 that involve the employment of mechanics or laborers must include a provision for compliance with 40 U.S.C. §§ 3702 and 3704, as supplemented by Department of Labor regulations (29 CFR Part 5). Under 40 U.S.C. § 3702 of the Act, each contractor must be required to compute the wages of every mechanic and laborer based on a standard work week of 40 hours. Work in excess of the standard work week is permissible provided that the worker is compensated at a rate of not less than one and a half times the basic rate of pay for all hours worked in excess of 40 hours in the work week.
The requirements of 40 U.S.C. § 3704 are applicable to construction work and provide that no laborer or mechanic must be required to work in
64 surroundings or under working conditions which are unsanitary, hazardous or dangerous. These requirements do not apply to the purchases of supplies or materials or articles ordinarily available on the open market, or contracts for transportation or transmission of intelligence.
(5) Rights to Inventions Made Under a Contract or Agreement. If the federal award meets the definition of “funding agreement” under 37 C.F.R. § 401.2(a) and the recipient or subrecipient wishes to enter into a contract with a small business firm or nonprofit organization regarding the substitution of parties, assignment or performance of experimental, developmental, or research work under that “funding agreement,” the recipient or subrecipient must comply with the requirements of 37 CFR Part 401, “Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements,” and any implementing regulations issued by the awarding agency.
(6) Clean Air Act (42 U.S.C. §§ 7401 – 7671q.) and the Federal Water Pollution Control Act (33 U.S.C. §§ 1251 – 1388), as amended. Contracts and subgrants of amounts in excess of $150,000 must contain a provision that requires the non-federal award to agree to comply with all applicable standards, orders or regulations issued pursuant to the Clean Air Act (42 U.S.C. §§ 7401 – 7671q) and the Federal Water Pollution Control Act as amended (33 U.S.C. §§ 1251 – 1388). Violations must be reported to the Federal awarding agency and the Regional Office of the Environmental Protection Agency (EPA).
(7) Debarment and Suspension (Executive Orders 12549 and 12689). A covered transaction (see 2 C.F.R. §§ 180.220 and 1200.220) must not be entered into with any party listed on the governmentwide exclusions in the System for Award Management (SAM), in accordance with the OMB guidelines at 2 C.F.R. 180 that implement Executive Orders 12549 (31 U.S.C. § 6101 note, 51 Fed. Reg. 6370,) and 12689 (31 U.S.C. § 6101 note, 54 Fed. Reg. 34131), “Debarment and Suspension.” SAM Exclusions contains the names of parties debarred, suspended, or otherwise excluded by agencies, as well as parties declared ineligible under statutory or regulatory authority other than Executive Order 12549. The Recipient agrees to include, and require each Third Party Participant to include, a similar provision in each lower tier covered transaction, ensuring that each lower tier Third Party Participant:
(1) Complies with federal debarment and suspension requirements; and
65 (2) Reviews the SAM at https://www.sam.gov, if necessary to comply with U.S. DOT regulations, 2 CFR Part 1200.
(8) Restrictions on Lobbying (31 U.S.C. § 1352). Contractors that apply or bid for an award exceeding $100,000 must file the certification required by 49 CFR Part 20. Each tier certifies to the tier above that it will not and has not used federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any federal contract, grant or any other award covered by 31 U.S.C. § 1352. Each tier must also disclose any lobbying with non-federal funds that takes place in connection with obtaining any Federal award. Such disclosures are forwarded from tier to tier up to the non-federal award.
(9) Solid Wastes. A Recipient that is a state agency or agency of a political subdivision of a state and its contractors must comply with section 6002 of the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act. The requirements of Section 6002 include procuring only items designated in guidelines of the Environmental Protection Agency (EPA) at 40 CFR Part 247 that contain the highest percentage of recovered materials practicable, consistent with maintaining a satisfactory level of competition, where the purchase price of the item exceeds $10,000 or the value of the quantity acquired during the preceding fiscal year exceeded $10,000; procuring solid waste management services in a manner that maximizes energy and resource recovery; and establishing an affirmative procurement program for procurement of recovered materials identified in the EPA guidelines.
(e) Geographic Restrictions. The Recipient agrees that it will not use any state or local geographic preference, except as permitted by federal law (for example, Section 25019 of the Infrastructure Investment and Jobs Act of 2021, Pub. L. 117- 58), regulation, requirement, or guidance.
(f) In-State Bus Dealer Restrictions. The Recipient agrees that any state law requiring buses to be purchased through in-state dealers will not apply to purchases of vehicles supported with federal assistance appropriated or made available for 49 U.S.C. chapter 53, as provided in 49 U.S.C. § 5325(i).
(g) Organizational Conflict of Interest. The Recipient agrees that it will not enter into a procurement that involves a real or apparent organizational conflict of interest. (h) Project Labor Agreements. As a condition of a third party contract award, the Recipient may require the Third Party Contractor or Subcontractor to have an
66 affiliation with a labor organization, such as a Project Labor Agreement, consistent with Executive Order No. 13502, “Use of Project Labor Agreements for Federal Construction Projects,” February 6, 2009 (74 Fed. Reg. 6985). (i) Force Account. The Recipient agrees that FTA may determine the extent to which Federal assistance may be used to participate in force account costs. (j) FTA Technical Review. The Recipient agrees that FTA may review and approve the Recipient’s technical specifications and requirements to the extent FTA believes necessary to ensure proper administration of the Underlying Agreement. (k) Relationship of the Award to Third Party Contract Approval. The Recipient agrees that the terms of the Underlying Agreement do not, by themselves, constitute approval of any non- competitive third party contract associated with the Award, unless FTA indicates otherwise in writing.
(l) National Intelligent Transportation Systems Architecture and Standards. The Recipient agrees to conform to the National Intelligent Transportation Systems (ITS) Architecture requirements of 23 U.S.C. § 517(d), unless it obtains an exemption from those requirements, and to follow FTA Notice, “FTA National ITS Architecture Policy on Transit Projects,” 66 Fed. Reg. 1455, January 8, 2001, and all other applicable federal guidance.
(m) Rolling Stock. The Recipient agrees that any procurement for rolling stock will comply with 49 U.S.C. § 5325 (Contract Requirements), 49 U.S.C. § 5323(j) (Buy America Requirements), 49 U.S.C. § 5323(m) (Pre-Award and Post Delivery Requirements), and 49 U.S.C. § 5318(e) (Bus Testing Requirements), 49 U.S.C. § 5323(u) (limitation on certain rolling stock procurements), and their implementing regulations.
(n) Bonding. The Recipient agrees to comply with the following bonding requirements and restrictions as provided in federal regulations and guidance:
(1) Construction. As provided in federal regulations and modified by FTA guidance, for each Project or related activities implementing the Underlying Agreement that involve construction, it will provide bid guarantee bonds, contract performance bonds, and payment bonds.
(2) Activities Not Involving Construction. For each Project or related activities implementing the Underlying Agreement not involving construction, the Recipient will not impose excessive bonding and will follow FTA guidance. (o) Architectural Engineering and Related Services. When procuring architectural engineering or related services supported with federal assistance appropriated or
67 made available for 49 U.S.C. chapter 53 or provided in any other law requiring the Award to be administered under 49 U.S.C. chapter 53, the Recipient agrees to comply and assures that each of its Subrecipients will comply with 49 U.S.C. § 5325(b).
(p) Design-Build Projects. As provided in 49 U.S.C. § 5325(d), the Recipient may use a design- build procurement to carry out its Design-Build Project, provided that it complies with applicable federal laws, regulations, and requirements, and follows federal guidance.
(q) Award to Other than the Lowest Bidder. As permitted under 49 U.S.C. § 5325(c), the Recipient may award a third party contract to other than the lowest bidder, if that award furthers an objective (for example, improved long-term operating efficiency and lower long- term costs) consistent with the purposes of 49 U.S.C. chapter 53 and any implementing federal regulations, requirements, or guidance that FTA may issue.
(r) Award to Responsible Third Party Contractors. The Recipient agrees to award third party contracts only to contractors able to carry out the procurement successfully, as provided in 49 U.S.C. § 5325(j), and before awarding a third party contract, it will consider the proposed contractor’s integrity, compliance with public policy, past performance, and financial and technical resources.
(s) Access to Third Party Contract Records. The Recipient agrees to require, and assures that each of its Subrecipients will require, its Third Party Contractors at each tier to provide:
(1) The U.S. Secretary of Transportation and the Comptroller General of the United States, the state, or their duly authorized representatives, access to all third party contract records (at any tier) as required under 49 U.S.C. § 5325(g); and
(2) Sufficient access to all third party contract records (at any tier) as needed for compliance with applicable federal laws, regulations, and requirements or to assure proper management of Underlying Agreement as determined by FTA. (t) Electronic and Information Technology. The Recipient agrees that reports or information it provides to or on behalf of the Federal Government will use electronic or information technology that complies with the accessibility requirements of Section 508 of the Rehabilitation Act of 1973, as amended, 29 U.S.C. § 794d, and U.S. ATBCB regulations, “Electronic and Information Technology Accessibility Standards,” 36 CFR Part 1194.
68 (u) Veterans Preference. As provided in 49 U.S.C. § 5325(k), to the extent practicable, the Recipient agrees and assures that each of its Subrecipients:
(1) Will give a hiring preference to veterans, as defined in 5 U.S.C. § 2108, who have the skills and abilities required to perform construction work required under a third party contract in connection with a Capital Project supported with federal assistance appropriated or made available for 49 U.S.C. chapter 53; and
(2) Will not require an employer to give a preference to any veteran over any equally qualified applicant who is a member of any racial or ethnic minority, female, an individual with a disability, or a former employee. (v) Acquisition by Lease. The Recipient agrees that if it intends to acquire Project property through a lease it will comply, as applicable, with 49 U.S.C. chapter 53 and section 3019 of the FAST Act.
(w) Bid Protests. The Recipient agrees to provide FTA, as part of the annual or quarterly Milestone Progress Report, with a list of all bid protests and appeals for solicitations or contracts in excess of $500,000. The Recipient also should be mindful of the requirement in Section 39, Disputes, that the Recipient must promptly notify the FTA Chief Counsel, or FTA Regional Counsel for the Region in which the Recipient is located, of significant current or prospective legal matters that may affect the Federal Government.
Section 17. Patent Rights.
(a) General. The Recipient agrees that:
(1) Depending on the nature of the Underlying Agreement, the Federal Government may acquire patent rights when the Recipient or Third Party Participant produces a patented or patentable invention, improvement, or discovery;
(2) The Federal Government’s rights arise when the patent or patentable information is conceived or reduced to practice with federal assistance provided through the Underlying Agreement; or
(3) When a patent is issued or patented information becomes available as described in the preceding section 17(a)(2) of this Master Agreement, the Recipient will notify FTA immediately and provide a detailed report satisfactory to FTA.
(b) Federal Rights. The Recipient agrees that:
69 (1) Its rights and responsibilities and each Third Party Participant’s rights and responsibilities in that federally assisted invention, improvement, or discovery will be determined as provided in applicable federal laws, regulations, requirements, and guidance, including any waiver thereof; and (2) Unless the Federal Government determines otherwise in writing, irrespective of its status or the status of any Third Party Participant as a large business, small business, state government, state instrumentality, local government, Indian tribe, nonprofit organization, institution of higher education, or individual, the Recipient will transmit the Federal Government’s patent rights to FTA, as specified in 35 U.S.C. § 200, et seq., and U.S. Department of Commerce regulations, “Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements,” 37 CFR Part 401. (c) License Fees and Royalties. Consistent with the applicable U.S. DOT Common Rules, the Recipient agrees that license fees and royalties for patents, patent applications, and inventions produced with federal assistance provided through the Underlying Agreement are program income, and must be used in compliance with applicable federal requirements.
Section 18. Rights in Data and Copyrights.
(a) Definition of “Subject Data.” As used in this section, “subject data” means recorded information, whether or not copyrighted, that is delivered or specified to be delivered as required by the Underlying Agreement. Examples of subject data include, but are not limited to computer software, standards, specifications, engineering drawings and associated lists, process sheets, manuals, technical reports, catalog item identifications, and related information, but do not include financial reports, cost analyses, or other similar information used for performance or administration of the Underlying Agreement.
(b) General Federal Restrictions. The following restrictions apply to all subject data first produced in the performance of the Underlying Agreement:
(1) Prohibitions. The Recipient may not publish or reproduce any subject data, in whole, in part, or in any manner or form, or permit others to do so. (2) Exceptions. The prohibitions do not apply to publications or reproductions for the Recipient’s own internal use, an institution of higher learning, the portion of subject data that the Federal Government has previously released or approved for release to the public, or the portion of data that has the Federal Government’s prior written consent for release.
70 (c) Federal Rights in Data and Copyrights. The Recipient agrees that:
(1) General. It must provide a license to its subject data to the Federal Government that is royalty-free, non-exclusive, and irrevocable. The Federal Government’s license must permit the Federal Government to reproduce, publish, or otherwise use the subject data or permit other entities or individuals to use the subject data provided those actions are taken for Federal Government purposes; and
(2) U.S. DOT Public Access Plan – Copyright License. The Recipient grants to U.S. DOT a worldwide, non-exclusive, non-transferable, paid-up, royaltyfree copyright license, including all rights under copyright, to any and all Publications and Digital Data Sets as such terms are defined in the U.S. DOT Public Access plan, resulting from scientific research funded either fully or partially by this funding agreement. The Recipient herein acknowledges that the above copyright license grant is first in time to any and all other grants of a copyright license to such Publications and/or Digital Data Sets, and that U.S. DOT shall have priority over any other claim of exclusive copyright to the same.
(d) Special Federal Rights in Data for Research, Development, Demonstration, Deployment, Technical Assistance, and Special Studies Programs. In general, FTA’s purpose in providing federal assistance for a research, development, demonstration, deployment, technical assistance, or special studies program is to increase transportation knowledge, rather than limit the benefits of the Award to the Recipient and its Third Party Participants. Therefore, the Recipient agrees that:
(1) Publicly Available Report. When an Award providing federal assistance for any of the programs described above is completed, it must provide a report of the Underlying Agreement that FTA may publish or make available for publication on the Internet.
(2) Other Reports. It must provide other reports related to the Award that FTA may request.
(3) Availability of Subject Data. FTA may make available its copyright license to the subject data, and a copy of the subject data to any FTA Recipient or any Third Party Participant at any tier, except as the Federal Government determines otherwise in writing.
(4) Identification of Information. It must identify clearly any specific confidential, privileged, or proprietary information submitted to FTA.
71 (5) Incomplete. If the Award is not completed for any reason whatsoever, all data developed with federal assistance for the Award becomes subject data and must be delivered as the Federal Government may direct. (6) Exception. This section does not apply to an adaptation of any automatic data processing equipment or program that is both for the Recipient’s use, and acquired with FTA capital program assistance.
(e) License Fees and Royalties. Consistent with the applicable U.S. DOT Common Rules, the Recipient agrees that license fees and royalties for patents, patent applications, and inventions produced with federal assistance provided through the Underlying Agreement are program income, and must be used in compliance with federal applicable requirements.
(f) Hold Harmless. Upon request by the Federal Government, the Recipient agrees that if it intentionally violates any proprietary rights, copyrights, or right of privacy, and if its violation under the preceding section occurs from any of the publication, translation, reproduction, delivery, use or disposition of subject data, then it will indemnify, save, and hold harmless the Federal Government against any liability, including costs and expenses of the Federal Government’s officers, employees, and agents acting within the scope of their official duties. The Recipient will not be required to indemnify the Federal Government for any liability described in the preceding sentence, if the violation is caused by the wrongful acts of federal officers, employees or agents, or if indemnification is prohibited or limited by applicable state law.
(g) Restrictions on Access to Patent Rights. Nothing in this section of this Master Agreement pertaining to rights in data either implies a license to the Federal Government under any patent, or may be construed to affect the scope of any license or other right otherwise granted to the Federal Government under any patent. (h) Data Developed Without Federal Assistance or Support. The Recipient agrees that in certain circumstances it may need to provide to FTA data developed without any federal assistance or support. Nevertheless, this section generally does not apply to data developed without federal assistance, even though that data may have been used in connection with the Award. The Recipient agrees that the Federal Government will not be able to protect data developed without federal assistance from unauthorized disclosure unless that data is clearly marked “Proprietary,” or “Confidential.”
(i) Requirements to Release Data. The Recipient understands and agrees that the Federal Government may be required to release data and information that the Recipient submits to the Federal Government as required under:
72 (1) The Freedom of Information Act (FOIA), 5 U.S.C. § 552; (2) The U.S. DOT Common Rules;
(3) The U.S. DOT Public Access Plan, which provides that the Recipient agrees to satisfy the reporting and compliance requirements as set forth in the U.S.
DOT Public Access plan, including, but not limited to, the submission and approval of a Data Management Plan, the use of Open Researcher and Contributor ID (ORCID) numbers, the creation and maintenance of a Research Project record in the Transportation Research Board’s (TRB) Research in Progress (RiP) database, and the timely and complete submission of all required publications and associated digital data sets as such terms are defined in the DOT Public Access plan. Additional information about how to comply with the requirements can be found at
http://ntl.bts.gov/publicaccess/howtocomply.html; or
(4) Other federal laws, regulations, requirements, and guidance concerning access to records pertaining to the Award, the accompanying Underlying Agreement, and any Amendments thereto.
Section 19. Use of Real Property, Equipment, and Supplies. (a) Federal Interest. The Recipient agrees that the Federal Government retains a federal interest in all real property, equipment, and supplies acquired or improved for use in connection with a Project (Project property) until, and to the extent that, the Federal Government removes its federal interest.
(b) FTA Requirements and Guidance for Use of Project Property. The Recipient agrees that:
(1) Satisfactory Continuing Control. It will maintain continuing control of the use of its Project property as satisfactory to FTA, which is defined as the legal assurance that Project property will remain available to be used for its originally authorized purpose throughout its useful life or until disposition. (2) Appropriate Use. It will use its Project property for appropriate purposes (including joint development purposes as well as uses that provide program income to support public transportation) for the duration of the useful life of its Project property, which may extend beyond the duration of the Award, and consistent with other requirements FTA may impose.
(3) Delay or Failure to Use Project Property. The Federal Government may require it to return the entire amount of federal assistance spent on its Project
73 property if, during the useful life of its Project property, it has unreasonably delayed using its Project property, or failed to use its Project property. (4) Notification. It will notify FTA immediately when it uses any of its Project property in a manner substantially different from the representations in its Application or other documents submitted in support of the Award, or the requirements of the accompanying Underlying Agreement, or it withdraws any of its Project property from appropriate use.
(5) FTA Guidance. It will consult FTA guidance through its circulars or other written documents for ways in which FTA property requirements should be implemented. FTA guidance will apply unless FTA determines otherwise in writing.
(c) General Federal Requirements. The Recipient agrees to comply with the applicable U.S. DOT property management provisions as provided in the U.S. DOT Common Rules and this Master Agreement. The Recipient also agrees to follow FTA’s reimbursement provisions pertaining to premature dispositions of certain equipment, as provided in this Master Agreement and FTA guidance.
(d) Maintenance. As provided in federal laws, regulations, requirements, and guidance, the Recipient agrees to maintain its Project property in good operating order, and comply with FTA regulations, “Transit Asset Management” and “National Transit Database,” 49 CFR Parts 625 and 630.
(e) Property Records. The Recipient agrees to keep satisfactory records of its use of its Project property, and, upon request, it will provide FTA the necessary information required to assure compliance with this Master Agreement. (f) Incidental Use.
(1) The Recipient agrees that any incidental use of Project property will not exceed what is permitted under applicable federal requirements and federal guidance.
(2) As provided in 49 U.S.C. § 5323(p), it may permit nontransit public entities and private entities to have incidental use of its federally assisted alternative fueling facilities and equipment, only if:
(i) The incidental use does not interfere with public transportation operations or violate the provisions of the Underlying Agreement and any Amendments thereto;
74 (ii) It fully recaptures all the costs related to the incidental use from any nontransit public entity or private entity that uses the alternative fueling facilities or equipment;
(iii) It uses revenues it receives from the incidental use in excess of costs for planning, capital, and operating expenses that are incurred in providing public transportation; and
(iv) Private entities pay all applicable excise taxes on fuel. (g) Reasonable Access for Private Intercity or Charter Transportation Operators. The Recipient agrees to comply with 49 U.S.C. § 5323(r), and may not deny reasonable access for a private intercity or charter transportation operator to federally funded public transportation facilities, including intermodal facilities, park and ride lots, and bus-only highway lanes. In determining reasonable access, capacity requirements of the Recipient and the extent to which access would be detrimental to existing public transportation services must be considered.
(h) Encumbrance of Project Property. Absent the express consent of the Federal Government in writing, the Recipient agrees to preserve the federal interest in its Project property, and to maintain satisfactory continuing control of its Project property as follows:
(1) Written Transactions. The Recipient agrees that it will not execute any documents that would either adversely affect the federal interest in or impair its continuing control of the use of its Project property including, but not limited to, lease, transfer of title, lien, pledge, mortgage, encumbrance, third party contract, subagreement, grant anticipation note, alienation, innovative finance arrangements, such as a cross-border or leveraged lease, or other types of innovative financing arrangements, or any restriction, constraint, or commitment that may apply to the Project property. Upon request, the Recipient will provide a copy of any document described above to FTA. (2) Oral Transactions. The Recipient agrees it will not obligate itself in any way through an oral statement to any third party with respect to its Project property that would either adversely affect the federal interest in or impair its continuing control of the use of its Project property.
(3) Other Actions. The Recipient agrees that it will not take any other action that would either adversely affect the federal interest in or impair its continuing control of the use of its Project property.
(i) Useful Life of Project Property. The Recipient agrees that:
75 (1) Determining the Useful Life. FTA may establish the useful life of Project property;
(2) Required Use. It will use its Project property continuously and appropriately throughout the useful life of that property;
(3) Expired Useful Life. When the useful life of its Project property has expired, it will comply with FTA’s disposition requirements; and (4) Premature Withdrawal. The Federal Government retains a federal interest in the fair market value of Project property or remaining useful life in Project property calculated based on straight line depreciation (including Project equipment acquired by a state). Therefore, if the Recipient withdraws that property from public transportation use prematurely, it will notify FTA immediately when any of its Project property is prematurely withdrawn from appropriate use, whether by planned withdrawal, misuse, or casualty loss. (i) Amount of Federal Interest. The federal interest in the Recipient’s or any of its Subrecipients’ Project property will be determined based on the ratio of the federal assistance provided for that property to the actual cost of that property.
(ii) Financial Commitments to the Federal Government. Except as otherwise approved in writing by the Federal Government, the Recipient agrees that if its Project property is prematurely withdrawn from appropriate use:
(A) It will return an amount equal to the remaining federal interest in the withdrawn property to the Federal Government; or (B) With FTA approval, it will invest an amount equal to the remaining federal interest in the withdrawn property in other transit property eligible for federal assistance provided through the Underlying Agreement.
(j) Calculating the Value of Prematurely Withdrawn Project Property. The Recipient agrees that the fair market value of Project property prematurely withdrawn from use in support of the Award (including the fair market value of project equipment acquired or improved by a state) will be calculated as follows:
(1) Equipment and Supplies. The fair market value of project equipment or supplies will be calculated by straight-line depreciation, based on the useful life of that equipment or supplies as established or approved by FTA. The fair market value of the Project equipment and supplies withdrawn from
76 proper use will be based on the value of that property immediately before it was withdrawn from appropriate use irrespective of whether the Project property was withdrawn from use due to fire, casualty, or natural disaster, and irrespective of the extent of insurance coverage.
(2) Real Property. The Recipient agrees that the fair market value of Project real property shall be determined by:
(i) Competent appraisal based on an appropriate date as approved by FTA, consistent with U.S. DOT regulations, “Uniform Relocation Assistance and Real Property Acquisition for Federal and FederallyAssisted Programs,” 49 CFR Part 24; (ii) Straight line depreciation of improvements to the Project real property coupled with the value of the land determined by FTA based on appraisal; or
(iii) Other applicable federal laws, regulations, and requirements. (3) Exceptional Circumstances. The Recipient agrees that the Federal Government may require another method of valuation to be used to determine the fair market value of Project real property withdrawn from service. In unusual circumstances, the Recipient may request permission to use another reasonable valuation method including, but not limited to accelerated depreciation, comparable sales, or established market values. (k) Insurance Proceeds. The Recipient agrees to use any insurance proceeds it receives for Project property that has been damaged or destroyed (including insurance proceeds for Project equipment acquired or improved by a state) as follows:
(1) Replacement. It may apply those insurance proceeds to the cost of replacing that damaged or destroyed property;
(2) Another Purpose. It may use those insurance proceeds for another authorized purpose, provided that it has obtained FTA’s consent in writing; or (3) Return to the Federal Government. It may return to the Federal Government an amount equal to the amount of the remaining federal interest in that property that has been damaged or destroyed.
(l) Misused or Damaged Project Property. If any damage to Project property results from abuse or misuse occurring with the Recipient’s knowledge and consent, the Recipient agrees to restore the Project property that has been damaged to its original condition, or refund the value of the federal interest in its Project property (including
77 the remaining federal interest in Project equipment acquired by a state), as the Federal Government may require.
(m) Disposition of Project Property. The Recipient agrees that disposition of its Project property may be made as provided in FTA’s enabling legislation, 49 U.S.C. § 5334(h), U.S. DOT Common Rules, and the most recent edition of FTA Circular 5010.1, to the extent consistent with applicable federal laws, regulations, requirements, and guidance. The Recipient understands and agrees that under certain circumstances, the Recipient must obtain disposition instructions from FTA before disposing of Project property, including real property, equipment including rolling stock, and supplies. Disposition performed under any authority is subject to 49 U.S.C. § 5334(h)(4)(B) (“Reimbursement”).
(n) Responsibilities After Closeout. The Recipient agrees that closeout of the Award will not change the Recipient’s property management responsibilities for its Project property as provided in federal laws, regulations, requirements, and guidance effective now or at a later date, and this section of this Master Agreement.
Section 20. Transit Asset Management.
(a) Transit Asset Management Plan. The Recipient agrees to develop a Transit Asset Management Plan that complies with federal transit laws, specifically 49 U.S.C. § 5326, FTA regulations, “Transit Asset Management,” 49 CFR Part 625, and “National Transit Database,” 49 CFR Part 630, and other applicable federal laws, regulations, and requirements.
(b) When Compliance is Required. The Recipient agrees to, and assures that each Third Party Participant will, comply with FTA regulations, “Transit Asset Management; National Transit Database,” 49 CFR Parts 625 and 630, and follow applicable federal guidance.
Section 21. Insurance.
(a) Flood Insurance. The Recipient agrees and assures that its Third Party Participants will agree to comply with flood insurance laws and guidance as follows:
(1) It will have flood insurance as required by the Flood Disaster Protection Act of 1973, 42 U.S.C. § 4012a(a), for any building located in a special flood hazard area (100-year flood zone), before accessing federal assistance to acquire, construct, reconstruct, repair, or improve that building. (2) Each such building and its contents will be covered by flood insurance in an amount at least equal to the federal investment (less estimated land cost) or to the maximum limit of coverage made available with respect to the particular
78 type of property under the National Flood Insurance Act of 1968, 42 U.S.C. § 4001, et seq., whichever is less.
(3) It will follow FTA guidance, except to the extent FTA determines otherwise in writing.
(b) Other Insurance Requirements. It will comply with the insurance requirements normally imposed by its state and local laws, regulations, and ordinances.
Section 22. Relocation and Real Property.
(a) Relocation Protections. Irrespective of whether federal assistance is used to pay relocation costs required under federal laws, regulations, or requirements, the Recipient agrees to:
(1) Provide fair and equitable treatment to displaced individuals and businesses that must be relocated as a result of any Project for which the FTA has provided federal assistance; and
(2) Comply with federal transit laws, specifically 49 U.S.C. § 5323(b), which requires compliance with the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended, 42 U.S.C. § 4601, et seq., and U.S. DOT regulations, “Uniform Relocation Assistance and Real Property Acquisition for Federal and Federally Assisted Programs,” 49 CFR Part 24.
(b) Nondiscrimination in Housing. The Recipient agrees that when it must provide housing for individuals as a result of relocation, it will comply with Title VIII of the Civil Rights Act of 1968, as amended (Fair Housing Act), 42 U.S.C. § 3601, et seq., and facilitate and follow Executive Order No. 12892, “Leadership and Coordination of Fair Housing in Federal Programs: Affirmatively Furthering Fair Housing,” January 17, 1994, 42 U.S.C. § 3608 note, (59 Fed. Reg. 2939), except as the Federal Government determines otherwise in writing.
(c) Prohibition Against the Use of Lead-Based Paint. The Recipient agrees that if it constructs or rehabilitates residential structures on behalf of individuals displaced by its any Project, it will not use lead-based paint, and it will comply with Section 401(b) of the Lead-Based Paint Poisoning Prevention Act, 42 U.S.C. § 4831(b), and U.S. Housing and Urban Development regulations, “Lead-based Paint Poisoning Prevention in Certain Residential Structures,” 24 CFR Part 35. (d) Real Property Acquisition Protections. Irrespective of whether federal assistance is used to pay real property acquisition costs required to implement the Award, the Recipient agrees to provide fair and equitable treatment to owners of real property or
79 interests in real property that must be acquired as a result of any Project, and comply with federal transit laws, specifically 49 U.S.C. § 5323(b), which requires compliance with the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended, 42 U.S.C. § 4601, et seq., and U.S. DOT regulations, “Uniform Relocation Assistance and Real Property Acquisition for Federal and Federally-Assisted Programs,” 49 CFR Part 24. (e) Covenant Against Discrimination. The Recipient agrees to include a covenant in the title of the real property acquired for use in any Project that assures nondiscrimination during the useful life of that real property. (f) Recording the Title to Real Property. The Recipient agrees to record the federal interest in the title to real property used in connection with any Project if FTA so requires.
(g) FTA Approval of Changes in Real Property Ownership. Unless it receives permission or instructions from FTA, the Recipient agrees that it will not dispose of, modify the use of, or change the title to real property used in any Project, or any other interests in the site and facilities used in any Project.
Section 23. Construction.
(a) Construction Plans and Specifications. The Recipient agrees to comply with all applicable statutes, regulations, and requirements, and follow FTA guidance in the development and implementation of construction plans and specifications, including drafting, review, and approval, for the Award.
(b) Seismic Safety. The Recipient agrees to comply with the Earthquake Hazards Reduction Act of 1977, as amended, 42 U.S.C. § 7701, et seq., and U.S. DOT regulations, “Seismic Safety,” 49 CFR Part 41, specifically, 49 C.F.R. § 41.117. (c) Supervision of Construction. The Recipient agrees to maintain competent and adequate engineering supervision at the construction site of any Project to ensure that the completed work conforms to the approved plans and specifications. (d) Construction Reports. For any Project or related activities involving construction, the Recipient agrees to provide progress reports and other relevant information or data, as required by FTA or the state in which construction takes place. (e) Major Capital Investment Projects. If the Recipient’s Project involves a Major Federal Project, it agrees to comply with all applicable federal regulations, including FTA regulations, “Major Capital Investment Projects,”49 CFR Part 611, and “Project Management Oversight,” 49 CFR Part 633, to the extent that they are
80 consistent with applicable federal legislation, regulations, and requirements, and follow all applicable federal guidance.
Section 24. Employee Protections.
(a) Awards Involving Construction. The Recipient agrees to comply and assures that each Third Party Participant will comply with all federal laws, regulations, and requirements providing protections for construction employees involved in each Project or related activities with federal assistance provided through the Underlying Agreement, including the:
(1) Prevailing Wage Requirements of:
(i) Federal transit laws, specifically 49 U.S.C. § 5333(a), (FTA’s “DavisBacon Related Act”); (ii) The Davis-Bacon Act, 40 U.S.C. §§ 3141 – 3144, 3146, and 3147; and
(iii) U.S. DOL regulations, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction (also Labor Standards Provisions Applicable to Nonconstruction Contracts Subject to the Contract Work Hours and Safety Standards Act),” 29 CFR Part 5.
(2) Wage and Hour Requirements of:
(i) Section 102 of the Contract Work Hours and Safety Standards Act, as amended, 40 U.S.C. § 3702, and other relevant parts of that Act, 40 U.S.C. § 3701, et seq.; and
(ii) U.S. DOL regulations, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction (also Labor Standards Provisions Applicable to Nonconstruction Contracts Subject to the Contract Work Hours and Safety Standards Act),” 29 CFR Part 5.
(3) “Anti-Kickback” Prohibitions of:
(i) Section 1 of the Copeland “Anti-Kickback” Act, as amended, 18 U.S.C. § 874;
(ii) Section 2 of the Copeland “Anti-Kickback” Act, as amended, 40 U.S.C. § 3145; and
81 (iii) U.S. DOL regulations, “Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States,” 29 CFR Part 3.
(4) Construction Site Safety of:
(i) Section 107 of the Contract Work Hours and Safety Standards Act, as amended, 40 U.S.C. § 3704, and other relevant parts of that Act, 40 U.S.C. § 3701, et seq.; and
(ii) U.S. DOL regulations, “Recording and Reporting Occupational Injuries and Illnesses,” 29 CFR Part 1904; “Occupational Safety and Health Standards,” 29 CFR Part 1910; and “Safety and Health Regulations for Construction,” 29 CFR Part 1926.
(b) Awards Not Involving Construction. The Recipient agrees to comply and assures that each Third Party Participant will comply with all federal laws, regulations, and requirements providing wage and hour protections for nonconstruction employees, including Section 102 of the Contract Work Hours and Safety Standards Act, as amended, 40 U.S.C. § 3702, and other relevant parts of that Act, 40 U.S.C. § 3701, et seq., and U.S. DOL regulations, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction (also Labor Standards Provisions Applicable to Nonconstruction Contracts Subject to the Contract Work Hours and Safety Standards Act),” 29 CFR Part 5. (c) Awards Involving Commerce. The Recipient agrees to comply and assures that each Third Party Participant will comply with the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201, et seq. to the extent that the FLSA applies to employees performing work with federal assistance provided through the Underlying Agreement involving commerce, and as the Federal Government otherwise determines applicable. (d) Public Transportation Employee Protective Arrangements. As a condition of award of federal assistance appropriated or made available for FTA programs involving public transportation operations, the Recipient agrees to comply and assures that each Third Party Participant will comply with the following employee protective arrangements of 49 U.S.C. § 5333(b):
(1) U.S. DOL Certification. When its Award, the accompanying Underlying Agreement, or any Amendments thereto involve public transportation operations and are supported with federal assistance appropriated or made available for 49 U.S.C. §§ 5307 – 5312, 5316, 5318, 5323(a)(1), 5323(b), 5323(d), 5328, 5337, 5338(b), or 5339, or former 49 U.S.C. §§ 5308, 5309, 5312, or other provisions of law as required by the Federal Government, U.S.
DOL must provide a certification of employee protective arrangements
82 before FTA may provide federal assistance for that Award. The Recipient agrees that the certification issued by U.S. DOL is a condition of the Underlying Agreement and that the Recipient must comply with its terms and conditions.
(2) Special Warranty. When its Underlying Agreement involves public transportation operations and is supported with federal assistance appropriated or made available for 49 U.S.C. § 5311, U.S. DOL will provide a Special Warranty for its Award, including its Award of federal assistance under the Tribal Transit Program. The Recipient agrees that its U.S. DOL Special Warranty is a condition of the Underlying Agreement and the Recipient must comply with its terms and conditions.
(3) Special Arrangements for Underlying Agreements for Federal Assistance Authorized under 49 U.S.C. § 5310. The Recipient agrees, and assures that any Third Party Participant providing public transportation operations will agree, that although pursuant to 49 U.S.C. § 5310, and former 49 U.S.C. §§ 5310 or 5317, FTA has determined that it was not “necessary or appropriate” to apply the conditions of 49 U.S.C. § 5333(b) to any Subrecipient participating in the program to provide public transportation for seniors (elderly individuals) and individuals with disabilities, FTA reserves the right to make case-by-case determinations of the applicability of 49 U.S.C. § 5333(b) for all transfers of funding authorized under title 23, United States Code (flex funds), and make other exceptions as it deems appropriate.
Section 25. Early Systems Work Agreement.
(a) Statutory Requirements. If FTA enters into an Early System Work Agreement (ESWA) with the Recipient to advance the implementation of the Recipient’s Capital Project, the Recipient agrees that the provisions of 49 U.S.C. § 5309(k)(3) will apply to that ESWA, the Recipient, and FTA.
(b) ESWA Provisions. Except to the extent that the Federal Government determines otherwise in writing, the Recipient understands and agrees that the following provisions apply to its ESWA, unless the ESWA contains specific requirements to the contrary:
(1) Recipient Representations. In view of the standards and commitments imposed on the Recipient by 49 U.S.C. § 5309(k)(3), the Recipient has provided sufficient representations and information to FTA so that FTA has reason to believe the following:
83 (i) FTA and the Recipient will enter into a Full Funding Grant Agreement for the Project; and
(ii) The terms of the ESWA will promote the ultimate completion of the Project more rapidly and at less cost.
(2) FTA Commitments. By entering into an ESWA with the Recipient, FTA has agreed to provide for reimbursement of the preliminary costs of carrying out the Project, including:
(i) Land acquisition;
(ii) Timely procurement of system elements for which the specifications are decided; and
(iii) Other activities that FTA decides are appropriate to make efficient, long-term Project management easier.
(3) Time Period of the ESWA. FTA reserves the right to determine the period of time in which the ESWA will remain in effect, even if that period extends beyond the time of the authorization of federal funding that will support the Project costs covered by the ESWA.
(4) Interest and Other Financing Costs. Interest and other financing costs of carrying out the ESWA efficiently and within a reasonable time are eligible ESWA costs, provided that:
(i) The interest and financing costs claimed do not exceed the cost of the most favorable financing terms reasonably available for the Project at the time of borrowing;
(ii) The Recipient has certified that it will show reasonable diligence in seeking the most favorable financing terms; and
(iii) The Recipient is able to show reasonable diligence in seeking the most favorable financing terms to support this ESWA.
(5) Contingent Commitment. In providing funding for the ESWA:
(i) In its discretion, FTA may include a commitment, contingent on amounts made available under a later-enacted law, to obligate an additional amount from future available budget authority to support the costs of the Recipient’s ESWA; and
84 (ii) If FTA does make a commitment to provide funding contingent on future amounts to be specified in law, that commitment is not an obligation of the Federal Government.
(6) Failure to Carry Out the Project. If, for reasons within its control, the Recipient does not carry out the Project for which its ESWA was made available by FTA, the Recipient must:
(i) Repay all Federal Grant funds awarded under the ESWA from all Federal funding sources for all Project activities, facilities, and equipment; and
(ii) Pay reasonable interest and penalty charges:
(A) As established by FTA before or after FTA provided funding for the ESWA; or
(B) Allowable under law.
Section 26. Environmental Protections.
(a) General. The Recipient agrees to, and assures that its Third Party Participants will, comply with all applicable environmental and resource use laws, regulations, and requirements, and follow applicable guidance, now in effect or that may become effective in the future, including state and local laws, ordinances, regulations, and requirements and follow applicable guidance.
(b) National Environmental Policy Act. An Award of federal assistance requires the full compliance with applicable environmental laws, regulations, and requirements.
Accordingly, the Recipient agrees to, and assures that its Third Party Participants will:
(1) Comply and facilitate compliance with federal laws, regulations, and requirements, including, but not limited to:
(i) Federal transit laws, such as 49 U.S.C. § 5323(c)(2), and 23 U.S.C. § 139;
(ii) The National Environmental Policy Act of 1969 (NEPA), as amended, 42 U.S.C. §§ 4321, et seq., as limited by 42 U.S.C. § 5159, and CEQ’s implementing regulations 40 CFR Part 1500 – 1508; (iii) Joint FHWA and FTA regulations, “Environmental Impact and Related Procedures,” 23 CFR Part 771 and 49 CFR Part 622;
85 (iv) Executive Order No. 11514, as amended, “Protection and Enhancement of Environmental Quality,” March 5, 1970, 42 U.S.C. § 4321 note (35 Fed. Reg. 4247); and
(v) Other federal environmental protection laws, regulations, and requirements applicable to the Recipient or the Award, the accompanying Underlying Agreement, and any Amendments thereto. (2) Follow the federal guidance identified herein to the extent that the guidance is consistent with applicable authorizing legislation:
(i) Joint FHWA and FTA final guidance, “Interim Guidance on MAP-21 Section 1319, Accelerated Decisionmaking in Environmental Reviews,” January 14, 2013;
(ii) Joint FHWA and FTA final guidance, “SAFETEA-LU Environmental Review Process (Public Law 109-59),” 71 Fed. Reg. 66576, November 15, 2006; and
(iii) Other federal environmental guidance applicable to the Recipient or the Award, the accompanying Underlying Agreement, and any Amendments thereto.
(c) Other Environmental Federal Laws. The Recipient agrees to comply or facilitate compliance, and assures that its Third Party Participants will comply or facilitate compliance, with all applicable federal laws, regulations, and requirements, and will follow applicable guidance, including, but not limited to, the Clean Air Act, Clean Water Act, Wild and Scenic Rivers Act of 1968, Coastal Zone Management Act of 1972, the Endangered Species Act of 1973, Magnuson Stevens Fishery Conservation and Management Act, Resource Conservation and Recovery Act, Comprehensive Environmental Response, Compensation, and Liability Act, Executive Order No. 11990 relating to “Protection of Wetlands,” and Executive Order No. 11988, as amended, “Floodplain Management.”
(d) Corridor Preservation. The Recipient agrees that:
(1) It will not develop any right-of-way acquired under 49 U.S.C. § 5323(q) in anticipation of implementing its Award until all required environmental reviews for each Project or related activities have been completed; and (2) It will follow FTA Final Guidance on the Application of 49 U.S.C § 5323(q) to Corridor Preservation for a Transit Project, October 27, 2014.
86 (e) Use of Certain Public Lands. The Recipient agrees to comply, and assures that its Third Party Participants will comply, with U.S. DOT laws, specifically 49 U.S.C. § 303 (often referred to as “section 4(f)”), and joint FHWA and FTA regulations, “Parks, Recreation Areas, Wildlife and Waterfowl Refuges, and Historic Sites,” 23 CFR Part 774, and referenced in 49 CFR Part 622.
(f) Historic Preservation. The Recipient agrees to, and assures that its Third Party Participants will:
(1) Comply with U.S. DOT laws, including 49 U.S.C. § 303 (often referred to as “section 4(f)”), which requires certain findings be made before an Award may be undertaken if it involves the use of any land from a historic site that is on or eligible for inclusion on the National Register of Historic Places. (2) Encourage compliance with the federal historic and archaeological preservation requirements of section 106 of the National Historic Preservation Act, as amended, 54 U.S.C. § 306108.
(3) Comply with the Archeological and Historic Preservation Act of 1974, as amended, 54 U.S.C. § 312501, et seq.
(4) Comply with U.S. Advisory Council on Historic Preservation regulations, “Protection of Historic Properties,” 36 CFR Part 800.
(5) Comply with federal requirements and follow federal guidance to avoid or mitigate adverse effects on historic properties.
(g) Indian Sacred Sites. The Recipient agrees to, and assures that its Third Party Participants will, facilitate compliance with federal efforts to promote the preservation of places and objects of religious importance to American Indians, Eskimos, Aleuts, and Native Hawaiians, and facilitate compliance with the American Indian Religious Freedom Act, 42 U.S.C. § 1996, and Executive Order No. 13007, “Indian Sacred Sites,” May 24, 1996, 42 U.S.C. § 3161 note (61 Fed. Reg. 26771). (h) Mitigation of Adverse Environmental Effects.
(1) The Recipient agrees to comply with all environmental mitigation measures that may be identified as conditions that the Federal Government might impose in its finding of no significant impact or record of decision or commitments in the environmental documents that apply to the Award, such as environmental assessments, environmental impact statements, categorical exclusions, memoranda of agreement, documents required under 49 U.S.C. § 303, and other environmental documents.
87 (2) The Recipient agrees that:
(i) Any mitigation measures agreed on will be incorporated by reference and made part of the Underlying Agreement and any Amendments thereto;
(ii) Any deferred mitigation measures will be incorporated by reference and made part of the Underlying Agreement and any Amendments thereto as soon as agreement with the Federal Government is reached; and
(iii) Any mitigation measures agreed on will not be modified or withdrawn without the written approval of the Federal Government. (i) Energy Conservation. The Recipient agrees to, and assures that its Subrecipients will, comply with the mandatory energy standards and policies of its state energy conservation plans under the Energy Policy and Conservation Act, as amended, 42 U.S.C. § 6321, et seq., and perform an energy assessment for any building constructed, reconstructed, or modified with federal assistance required under FTA regulations, “Requirements for Energy Assessments,” 49 CFR Part 622, subpart C.
Section 27. State Management and Monitoring Systems.
The Recipient agrees to comply with joint FHWA and FTA regulations, “Management and Monitoring Systems,” 23 CFR Part 500, and FTA regulations, “Transportation Infrastructure Management,” 49 CFR Part 614.
Section 28. Charter Service.
(a) Prohibitions. The Recipient agrees that neither it nor any Third Party Participant involved in the Award will engage in charter service, except as permitted under federal transit laws, specifically 49 U.S.C. § 5323(d), (g), and (r), FTA regulations, “Charter Service,” 49 CFR Part 604, any other federal Charter Service regulations, federal requirements, or federal guidance.
(b) Exceptions. Apart from exceptions to the Charter Service restrictions in FTA’s Charter Service regulations, FTA has established the following additional exceptions to those restrictions:
(1) FTA’s Charter Service restrictions do not apply to equipment or facilities supported with federal assistance appropriated or made available for 49 U.S.C. § 5307 to support a Job Access and Reverse Commute (JARC)- type Project or related activities that would have been eligible for assistance under repealed 49 U.S.C. § 5316 in effect in Fiscal Year 2012 or a previous
88 fiscal year, provided that the Recipient uses that federal assistance for FTA program purposes only; and
(2) FTA’s Charter Service restrictions do not apply to equipment or facilities supported with the federal assistance appropriated or made available for 49 U.S.C. § 5310 to support a New Freedom-type Project or related activities that would have been eligible for federal assistance under repealed 49 U.S.C. § 5317 in effect in Fiscal Year 2012 or a previous fiscal year, provided the Recipient uses that federal assistance for FTA program purposes only. (c) Violations. If it or any Third Party Participant engages in a pattern of violations of FTA’s Charter Service regulations, FTA may require corrective measures and remedies, including withholding an amount of federal assistance as provided in FTA’s Charter Service regulations, 49 CFR Part 604, appendix D, or barring it or the Third Party Participant from receiving federal assistance provided in 49 U.S.C. chapter 53, 23 U.S.C. § 133, or 23 U.S.C. § 142.
Section 29. School Bus Operations.
(a) Prohibitions. The Recipient agrees that neither it nor any Third Party Participant that is participating in its Award will engage in school bus operations exclusively for the transportation of students or school personnel in competition with private school bus operators, except as permitted by federal transit laws, 49 U.S.C. § 5323(f) or (g), FTA regulations, “School Bus Operations,” 49 CFR Part 605, and any other applicable federal “School Bus Operations” laws, regulations, requirements, or applicable federal guidance.
(b) Violations. If a Recipient or any Third Party Participant has operated school bus service in violation of FTA’s School Bus laws, regulations, or requirements, FTA may require the Recipient or Third Party Participant to take such remedial measures as FTA considers appropriate, or bar the Recipient or Third Party Participant from receiving federal transit assistance.
Section 30. Geographic Information and Related Spatial Data.
The Recipient agrees that each Project or related activity that implements the Award will conform to the Federal Geographic Data Committee’s National Spatial Data Infrastructure if the Project or related activity directly or indirectly involves spatial data, or geographic information systems, and it will follow U.S. OMB Circular A-16, “Coordination of Geographic Information and Related Spatial Data Activities,” August 19, 2002, and U.S. OMB Circular A-16 Supplemental Guidance, “Geospatial Line of Business,” November 10, 2010.
89 Section 31. Federal “$1 Coin” Requirements.
The Recipient agrees to comply with section 104 of the Presidential $1 Coin Act of 2005, 31 U.S.C. § 5112(p), its equipment and facilities will be fully capable of accepting and dispensing $1 coins when coins or currency are required to use that equipment or those facilities, and it will display signs and notices of the $1 coin capability of its equipment and facilities on its premises, including vending machines, where coins or currency are used.
Section 32. Public Transportation Safety.
The Recipient agrees to comply with applicable federal laws, regulations, and requirements and follow applicable guidance that implement the Public Transportation Safety Program provisions of 49 U.S.C. § 5329.
Section 33. Motor Carrier Safety.
(a) Financial Responsibility. The Recipient agrees to comply and assures that its Third Party Participants will comply with the economic and insurance registration requirements of the:
(1) U.S. Federal Motor Carrier Safety Administration (U.S. FMCSA) regulations, “Minimum Levels of Financial Responsibility for Motor Carriers,” 49 CFR Part 387, if it is engaged in operations requiring compliance with 49 CFR Part 387, it is engaged in interstate commerce, and it is not within a defined commercial zone; and
(2) The provisions of 49 U.S.C. § 31138(e)(4), which supersede inconsistent provisions of 49 CFR Part 387, and reduce the amount of insurance the Recipient must obtain to the highest amount required by any state in which the public transportation provider operates, if it operates within a public transportation service area located in more than one state, and receives federal assistance under 49 U.S.C. §§ 5307, 5310, and 5311. (b) U.S. FMCSA Requirements. The Recipient agrees to comply and assures that its Third Party Participants will comply with:
(1) The safety requirements of U.S. FMCSA regulations, “Federal Motor Carrier Safety Regulations,” 49 CFR Parts 390 – 397, to the extent applicable; and (2) The driver’s license requirements of U.S. FMCSA regulations, “Commercial Driver’s License Standards, Requirements, and Penalties,” 49 CFR Part 383, and “State Compliance with Commercial Driver's License,” 49 CFR Part 384, to the extent applicable, with the substance abuse requirements and guidance of U.S. FMCSA’s regulations, “Controlled Substances and Alcohol
90 Use and Testing,” 49 CFR Part 382, and implementing federal guidance, to the extent applicable.
Section 34. Safe Operation of Motor Vehicles.
(a) Seat Belt Use. The Recipient agrees to implement Executive Order No. 13043, “Increasing Seat Belt Use in the United States,” April 16, 1997, 23 U.S.C. § 402 note, (62 Fed. Reg. 19217), by:
(1) Adopting and promoting on-the-job seat belt use policies and programs for its employees and other personnel that operate company-owned vehicles, company-rented vehicles, or personally operated vehicles; and (2) Including a “Seat Belt Use” provision in each third party agreement related to the Award.
(b) Distracted Driving, Including Text Messaging While Driving. The Recipient agrees to comply with:
(1) Executive Order No. 13513, “Federal Leadership on Reducing Text Messaging While Driving,” October 1, 2009, 23 U.S.C. § 402 note, (74 Fed.
Reg. 51225);
(2) U.S. DOT Order 3902.10, “Text Messaging While Driving,” December 30, 2009; and
(3) The following U.S. DOT Special Provision pertaining to Distracted Driving:
(i) Safety. The Recipient agrees to adopt and enforce workplace safety policies to decrease crashes caused by distracted drivers, including policies to ban text messaging while using an electronic device supplied by an employer, and driving a vehicle the driver owns or rents, a vehicle Recipient owns, leases, or rents, or a privately-owned vehicle when on official business in connection with the Award, or when performing any work for or on behalf of the Award; (ii) Recipient Size. The Recipient agrees to conduct workplace safety initiatives in a manner commensurate with its size, such as establishing new rules and programs to prohibit text messaging while driving, re-evaluating the existing programs to prohibit text messaging while driving, and providing education, awareness, and other outreach to employees about the safety risks associated with texting while driving; and
91 (iii) Extension of Provision. The Recipient agrees to include the preceding Special Provision of section 34(b)(3)(i) – (ii) of this Master Agreement in its third party agreements, and encourage its Third Party Participants to comply with this Special Provision, and include this Special Provision in each third party subagreement at each tier supported with federal assistance.
Section 35. Substance Abuse.
(a) Drug-Free Workplace. The Recipient agrees to:
(1) Comply with the Drug-Free Workplace Act of 1988, as amended, 41 U.S.C. § 8103, et seq.;
(2) Comply with U.S. DOT regulations, “Governmentwide Requirements for Drug-Free Workplace (Financial Assistance),” 49 CFR Part 32; and (3) Follow and facilitate compliance with U.S. OMB regulatory guidance, “Governmentwide Requirements for Drug-Free Workplace (Financial Assistance),” 2 CFR Part 182, particularly where the U.S. OMB regulatory guidance supersedes comparable provisions of 49 CFR Part 32. (b) Alcohol Misuse and Prohibited Drug Use.
(1) Requirements. The Recipient agrees to comply and assures that its Third Party Participants will comply with:
(i) Federal transit laws, specifically 49 U.S.C. § 5331; (ii) FTA regulations, “Prevention of Alcohol Misuse and Prohibited Drug Use in Transit Operations,” 49 CFR Part 655; and
(iii) Applicable provisions of U.S. DOT regulations, “Procedures for Transportation Workplace Drug and Alcohol Testing Programs,” 49 CFR Part 40.
(2) Remedies for Non-Compliance. The Recipient agrees that if FTA determines that the Recipient or a Third Party Participant receiving federal assistance under 49 U.S.C. chapter 53 is not in compliance with 49 CFR Part 655, the Federal Transit Administrator may bar that Recipient or Third Party Participant from receiving all or a portion of the federal transit assistance for public transportation it would otherwise receive.
92 Section 36. Protection of Sensitive Security and Other Sensitive Information.
The Recipient agrees to comply with the following requirements for the protection of sensitive security information:
(a) The Homeland Security Act, as amended, specifically 49 U.S.C. § 40119(b), and U.S. DOT regulations, “Protection of Sensitive Security Information,” 49 CFR Part 15;
(b) The Aviation and Transportation Security Act, as amended, 49 U.S.C. § 114(r), and U.S. Department of Homeland Security, Transportation Security Administration regulations, “Protection of Sensitive Security Information,” 49 CFR Part 1520; (c) U.S. DOT Common Rules, which require the Recipient to implement, and to require its Subrecipients, if any, to implement reasonable measures to safeguard protected personally identifiable information as well as any information that the FTA or passthrough entity designates as sensitive; and (d) National Archives and Records Administration regulations, “Controlled Unclassified Information,” 32 CFR Part 2002.
Section 37. Special Notification Requirements for States. (a) Types of Information. To the extent required under federal law, the State, as the Recipient, agrees to provide the following information about federal assistance awarded for its State Program, Project, or related activities:
(1) The Identification of FTA as the federal agency providing the federal assistance for a State Program or Project;
(2) The Catalog of Federal Domestic Assistance Number of the program from which the federal assistance for a State Program or Project is authorized; and (3) The amount of federal assistance FTA has provided for a State Program or Project.
(b) Documents. The State agrees to provide the information required under this provision in the following documents: (1) applications for federal assistance, (2) requests for proposals or solicitations, (3) forms, (4) notifications, (5) press releases, and (6) other publications.
93 Section 38. Freedom of Information.
(a) Applicability. The Recipient agrees that the Freedom of Information Act (FOIA), 5 U.S.C. § 552, as amended, applies to most information submitted to FTA and U.S.
DOT, whether electronically or in typewritten hard copy. (b) Records. The Recipient agrees that all records it submits to FTA will become federal agency records and may be subject to release in response to a FOIA request unless FTA in its sole discretion determines that a valid exemption under FOIA or another statute applies. Unless FTA explicitly states otherwise in writing, FTA does not make any assurance that it will keep private any records submitted to FTA. (c) Confidentiality. President Obama’s “Memorandum for the Heads of Executive Departments and Agencies on the Freedom of Information Act,” dated January 21, 2009, directs federal agencies to adopt a presumption that information should generally be disclosed when requested, and therefore the Recipient agrees that:
(1) Unless a federal law or regulation requires that a document or other information be withheld, FTA does not consent to withhold information, irrespective of its format, merely because it is accompanied by a “routine” confidentiality statement that may appear on:
(i) Information about the Award, the accompanying Underlying Agreement, and any Amendments thereto;
(ii) Information accompanying or supplementing the Award, the accompanying Underlying Agreement, and any Amendments thereto; or
(iii) Any other information FTA may obtain.
(2) As provided in federal laws, regulations, requirements, and guidance, FTA will review the information and documents that are the subject of each FOIA request to determine the extent to which FTA must or should exercise its discretion to withhold that information or those documents. (3) Any genuinely confidential, privileged, or sensitive security information will be marked clearly and specifically as confidential or privileged, and justified as confidential or privileged under FOIA standards. The Recipient will mark all sensitive security information (SSI), as defined by 49 C.F.R. § 15.5, as set forth in 49 C.F.R. § 1520.13. The Recipient will not mark non-SSI material as SSI. Also refer to Section 36 of this Agreement, regarding the protection of SSI and other sensitive information.
94 Section 39. Disputes, Breaches, Defaults, and Litigation. (a) FTA Interest. FTA has a vested interest in the settlement of any violation of federal law, regulation, or requirement, or any disagreement involving the Award, the accompanying Underlying Agreement, and any Amendments thereto including, but not limited to, a default, breach, major dispute, or litigation, and FTA reserves the right to concur in any settlement or compromise.
(b) Notification to FTA; Flow Down Requirement. If a current or prospective legal matter that may affect the Federal Government emerges, the Recipient must promptly notify the FTA Chief Counsel and FTA Regional Counsel for the Region in which the Recipient is located. The Recipient must include a similar notification requirement in its Third Party Agreements and must require each Third Party Participant to include an equivalent provision in its subagreements at every tier, for any agreement that is a “covered transaction” according to 2 C.F.R. §§ 180.220 and 1200.220.
(1) The types of legal matters that require notification include, but are not limited to, a major dispute, breach, default, litigation, or naming the Federal Government as a party to litigation or a legal disagreement in any forum for any reason.
(2) Matters that may affect the Federal Government include, but are not limited to, the Federal Government’s interests in the Award, the accompanying Underlying Agreement, and any Amendments thereto, or the Federal Government’s administration or enforcement of federal laws, regulations, and requirements.
(3) Additional Notice to U.S. DOT Inspector General. The Recipient must promptly notify the U.S. DOT Inspector General in addition to the FTA Chief Counsel or Regional Counsel for the Region in which the Recipient is located, if the Recipient has knowledge of potential fraud, waste, or abuse occurring on a Project receiving assistance from FTA. The notification provision applies if a person has or may have submitted a false claim under the False Claims Act, 31 U.S.C. § 3729, et seq., or has or may have committed a criminal or civil violation of law pertaining to such matters as fraud, conflict of interest, bid rigging, misappropriation or embezzlement, bribery, gratuity, or similar misconduct involving federal assistance. This responsibility occurs whether the Project is subject to this Agreement or another agreement between the Recipient and FTA, or an agreement involving a principal, officer, employee, agent, or Third Party Participant of the Recipient. It also applies to subcontractors at any tier. Knowledge, as used in this paragraph, includes, but is not limited to, knowledge of a
95 criminal or civil investigation by a Federal, state, or local law enforcement or other investigative agency, a criminal indictment or civil complaint, or probable cause that could support a criminal indictment, or any other credible information in the possession of the Recipient. In this paragraph, “promptly” means to refer information without delay and without change. This notification provision applies to all divisions of the Recipient, including divisions tasked with law enforcement or investigatory functions. (c) Federal Interest in Recovery. The Federal Government retains the right to a proportionate share of any proceeds recovered from any third party, based on the percentage of the federal share for the Underlying Agreement. Notwithstanding the preceding sentence, the Recipient may return all liquidated damages it receives to its Award Budget for its Underlying Agreement rather than return the federal share of those liquidated damages to the Federal Government, provided that the Recipient receives FTA’s prior written concurrence.
(d) Enforcement. The Recipient must pursue its legal rights and remedies available under any third party agreement or any federal, state, or local law or regulation.
Section 40. Amendments to the Underlying Agreement.
(a) When Required. An Amendment to the Underlying Agreement is required under the following circumstances:
(1) A change in the scope of work or an addition of federal assistance to an existing Award (regardless of whether the source of assistance is the same or different);
(2) A change to the scope of work that necessitates a change in the distribution of federal assistance across scope codes or activities; or (3) The Award includes multiple sources of financial assistance and the action requires the addition of a new Scope to a Project.
(b) Process. An amendment to the Underlying Agreement must be submitted and approved in TrAMS, and must meet the same application requirements as would apply to a request for a new Award.
Section 41. FTA’s Transit Award Management System (TrAMS).
The Recipient agrees to submit its application for an Award, reports, documents, or other information required by federal law, regulations, or requirements, through FTA’s Transit Award Management System (TrAMS). To submit its application, reports, documents, or information required to FTA, any signature submitted for use in TrAMS must comply with the requirements
96 of the Electronic Signatures in Global and National Commerce Act (E-Sign Act), 15 U.S.C. §§ 7001, et seq.
Section 42. Information Obtained through Internet Links.
Although this Master Agreement may include electronic links to federal laws, regulations, requirements, and guidance, FTA does not guarantee the accuracy of the information that may accessed through such links. Accordingly, the Recipient understands and agrees that any information obtained through any electronic link within this Master Agreement does not represent an official version of a federal law, regulation, or requirement, and might be inaccurate.
Therefore, any information that is obtained through such links is neither incorporated by reference nor made part of this Master Agreement. The Federal Register and the Code of Federal Regulations are the official sources for regulatory information pertaining to the Federal Government.
Section 43. Severability.
The Recipient agrees that if any provision of the Underlying Agreement or any Amendment thereto is determined to be invalid, then the remaining provisions thereof that conform to federal laws, regulations, requirements, and guidance will continue in effect.
97 SPECIAL PROVISIONS FOR SPECIFIC PROGRAMS
Section 44. Special Provisions for All Public Transportation Innovation, Technical Assistance or Workforce Development Programs.
(a) Applicability. The Recipient understands and agrees that this section of the Master Agreement applies to the following programs to which FTA provides federal assistance, including the following programs:
(1) Programs authorized under 49 U.S.C. § 5312, irrespective of the fiscal year for which the appropriations that supported the Underlying Agreement were authorized;
(2) Programs authorized under former 49 U.S.C. § 5313, irrespective of the fiscal year for which the appropriations that supported the Underlying Agreement were authorized;
(3) Programs authorized under 49 U.S.C. § 5314, irrespective of the fiscal year for which the appropriations that supported the Underlying Agreement were authorized;
(4) Programs authorized by the repealed section 3045 of SAFETEA-LU; (5) Programs authorized by the repealed section 3046 of SAFETEA-LU; and (6) Other similar Programs for which FTA awards federal assistance under 49 U.S.C. §§ 5312 or 5314, as amended, or other similar research-type or technical assistance authorizing legislation.
(b) Provisions for Underlying Agreements for Public Transportation Innovation or Technical Assistance and Workforce Development Awards. The Recipient agrees that the following provisions will apply to the Underlying Agreement for a Public Transportation Innovation or Technical Assistance and Workforce Development Project or related activities:
(1) Report. The Recipient agrees that in addition to any other Report FTA may require, the Recipient will prepare and submit to FTA a Report of each Project and related activities that describes the subject (or subjects) investigated, the methods used, the results, and the conclusions reached, is satisfactory, sufficiently organized, well-written, and comprehensive. (2) Disclaimer. The Report must contain the following disclaimer: “This document is disseminated under the sponsorship of the United States Department of Transportation, Federal Transit Administration, in the interest
98 of information exchange. The United States government assumes no liability for the contents or use thereof. The United States government does not endorse products or manufacturers. Trade or manufacturers’ names appear herein solely because they are considered essential to the contents of the report.”
(3) Format. The Report must comply with the accessibility requirements of Section 508 of the Rehabilitation Act of 1973, as amended, 29 U.S.C. § 794d, and U.S. ATBCB regulations, “Electronic and Information Technology Accessibility Standards,” 36 CFR Part 1194, and the specific publication elements and report style guide at
http://www.fta.dot.gov/research/program_requirements. The Report must identify clearly and precisely any specific information or data that is confidential, privileged, or proprietary and is contained within any report or document.
(4) Publication. Except for confidential, privileged, or proprietary information in the Report, FTA may publish the Report, and make it available for publication on the Internet or in any other venue.
(5) Identification of Federal Assistance. The Recipient agrees that:
(i) It will display information on any product developed with federal assistance for 49 U.S.C. § 5312 for which the U.S. Department of Transportation, Federal Transit Administration provided federal assistance to support the development of the product that is tangible and is produced from, or is a result of, a Project, is a deliverable, and visible to the public, or is or will be made available to other research organizations, or public transportation providers, and consists of equipment, a prototype, hardware, construction, reports, data, software, internet pages, or any similar item.
(ii) The information required will be given using an appropriate sign, designation, or notice.
(c) Special Disposition Provision. In addition to other disposition provisions, FTA may vest title in tangible personal property used in the conduct of basic or applied scientific research in a nonprofit institution of higher education or in a nonprofit organization whose primary purpose is conducting scientific research, provided the requirements of 31 U.S.C. § 6306 are met.
(d) Protection of Human Subjects. The Recipient agrees to comply with the protections for human subjects involved in a Project or related activities supported with federal assistance through the Underlying Agreement, as required by the National Research
99 Act, as amended, 42 U.S.C. § 289, et seq., and U.S. DOT regulations, “Protection of Human Subjects,” 49 CFR Part 11.
(e) Protection of Animals. The Recipient agrees to comply with the protections for animals involved in a Project or related activities, as required by the Animal Welfare Act, as amended, 7 U.S.C. § 2131, et seq., and U.S. Department of Agriculture regulations, “Animal Welfare,” 9 CFR Parts 1, 2, 3, and 4. (f) Export Control. The Recipient understands and agrees that before exporting any information that is subject to federal export requirements, it must first obtain the necessary federal license(s), and comply with the federal export control regulations of the U.S. Department of Commerce, Bureau of Industry and Security, “Export Administration Regulations,” specifically, 15 CFR Parts 730, et seq., U.S.
Department of State, U.S. Department of the Treasury, and U.S. Department of Defense.
Section 45. Special Provisions for the State Safety Oversight Grant Program.
In administering any State Safety Oversight Grant Program Award under 49 U.S.C. § 5329(e)(6), the Recipient agrees to comply with 49 U.S.C. § 5329(e)(6).
Section 46. Special Provisions for the State Infrastructure Bank (SIB) Program. (a) Federal Laws, Regulations, Requirements, and Guidance. The State, as the Recipient, agrees to administer its Underlying Agreement to support its SIB consistent with federal laws, regulations, requirements, and guidance, including, but not limited to:
(1) Title 23, U.S.C. (Highways), specifically 23 U.S.C. § 610, to the extent required under the FAST Act, and other applicable federal legislation; (2) Federal transit laws, specifically 49 U.S.C. § 5323(o), which requires compliance with 49 U.S.C. §§ 5307, 5309, and 5337 for Underlying Agreements to which MAP-21 and the FAST Act apply;
(3) Section 350 of the National Highway System Designation Act of 1995, as amended, (NHS Act), 23 U.S.C. § 101 note, to the extent this section has not been superseded by 23 U.S.C. § 610;
(4) Any federal law enacted or federal regulation or requirements promulgated at a later date applicable to the Underlying Agreement;
(5) All other applicable federal guidance that may be issued;
100
(6) The terms and conditions of any U.S. DOL certification(s) of employee protective arrangements;
(7) The SIB Cooperative Agreement establishing the SIB in the state, signed by the Executive Director of the Build America Bureau, the Federal Transit Administrator, authorized state official(s) or their authorized designees, and if applicable, the administrator (or designee) for any other federal modal agency that the State wishes to include in its SIB; and (8) The FTA Grant Agreement providing federal assistance for the Underlying Agreement in support of its SIB, except that any provision of this Master Agreement that would otherwise apply to a SIB Project does not apply to the Underlying Agreement if it conflicts with any other federal law or regulation applicable to a SIB, federal SIB Guidelines, the SIB Cooperative Agreement, or the Underlying Agreement, but the conflicting provision of this Master Agreement will prevail, however, if FTA expressly determines so in writing. (b) Limitations on Accessing Federal Assistance in the Transit Account. The Recipient understands that the total amount of federal assistance awarded under the Grant Agreement to be supported with SIB deposits may not be available for immediate withdrawal. The State and the Recipient agree to restrict the amount of federal assistance it withdraws from its SIB to an amount not exceeding the limits specified in its Grant Agreement in support of the SIB or the Award Budget for that Grant Agreement.
Section 47. Special Provisions for the TIFIA and RRIF Programs. (a) Federal Laws, Regulations, Requirements, and Guidance. The Recipient agrees to administer any Underlying Agreement for TIFIA or RRIF credit assistance as required by and in accordance with the terms of the Underlying Agreement. (b) Default. The Recipient agrees that FTA may declare the Recipient in violation of this Master Agreement if there has been an Event of Default according to an Underlying Agreement for TIFIA or RRIF assistance, and that Event of Default is not cured within 90 days.
(c) Order of Precedence. Any provision of this Master Agreement that is applicable to the Recipient’s Underlying Agreement for TIFIA or RRIF assistance but that conflicts with the laws, regulations, and requirements applicable to the Recipient’s Underlying Agreement for TIFIA or RRIF assistance, will not apply to the Recipient’s TIFIA or RRIF Loan, Loan Guarantee, Line of Credit, or Master Credit Agreement, unless FTA determines otherwise in writing.
101
Section 48. Special Provisions for the Joint FTA–FRA Program. (a) General Legal Requirements. When both FTA and the U.S. Federal Railroad Administration (FRA) make federal assistance available for the same Underlying Agreement, the Recipient understands and agrees to administer the Underlying Agreement to achieve maximum compliance with FTA’s statutory and regulatory requirements, FRA’s statutory and regulatory requirements, and other federal statutory requirements.
(b) Disadvantaged Business Enterprises.
(1) The Recipient acknowledges and understands that the statutory and regulatory provisions relating to disadvantaged business enterprises (DBE) differ significantly between FTA and FRA, including Section 1101(b) of the FAST Act (23 U.S.C. § 101 note) and U.S. DOT regulations, “Participation by Disadvantaged Business Enterprises in Department of Transportation Financial Assistance Programs,” 49 CFR Part 26, both of which apply to FTA, but not to FRA.
(2) FRA is not authorized to use FTA’s DBE regulations, and consequently the Recipient agrees to comply with the statutory and regulatory DBE provisions that apply to federal assistance provided by FTA when using that federal assistance for purchases.
(3) The Recipient agrees to use the “contracting with small and minority firms, women's business enterprise” provisions of the applicable U.S. DOT Common Rules.
(c) Buy America. The Recipient agrees that statutory and regulatory Buy America provisions that apply to federal assistance authorized for FTA differ from those that apply to federal assistance authorized for FRA. Therefore, the Recipient agrees that:
(1) It must comply with FTA’s statutory and regulatory Buy America provisions to the extent that the purchases are for a Project or related activities that implement the Underlying Agreement;
(2) It must comply with FRA’s statutory and regulatory Buy America provisions, section 301(a) of the Passenger Rail Investment and Improvement Act of 2008 (PRIIA), Pub L. 110-432, October 16, 2008, and 49 U.S.C. § 24405(a), to the extent that the purchases are required to comply with FRA Buy America requirements; and
102
(3) If it uses federal assistance authorized for FTA and for FRA to finance a purchase, the Recipient agrees to comply with both FTA’s and FRA’s requirements.
(d) Force Account – Procurement. The Recipient agrees that FTA deems section 16(j) of this Master Agreement to be satisfied for work that is performed by the railroad’s force account employees if a Project or related activities are being conducted on the property of a railroad, and under the railroad’s collective bargaining agreements with its employees, certain work to be performed for the Recipient must be performed by force account employees.
(e) Procurement of Rolling Stock. The Recipient agrees that if FRA requires the Recipient to acquire any rolling stock for the Underlying Agreement from the Next Generation Corridor Equipment Pool Committee that has been established under section 305 of PRIIA, FTA deems section 15 of this Master Agreement to be satisfied.
(f) Use of Real Property, Equipment, and Supplies. The Recipient agrees that application of section 19 of this Master Agreement is reserved. (g) Davis-Bacon. The Recipient agrees that, as provided in 49 U.S.C. § 24312, wages paid to railroad employees at rates provided in a collective bargaining agreement negotiated under the Railway Labor Act, 45 U.S.C. § 151, et seq., are deemed to comply with the requirements of the Davis-Bacon Act, 40 U.S.C. § 3141, et seq., and satisfy section 24 of this Master Agreement.
(h) Employee Protective Arrangements. The Recipient agrees to pass down to a railroad employee subject to the Railway Labor Act, 45 U.S.C. § 151, et seq., protective arrangements as provided in a special Attachment to FTA’s Grant Agreement or Cooperative Agreement with the Recipient, and not pass down employee protective arrangements as provided in section 24 of this Master Agreement. (i) Motor Carrier Safety. The Recipient agrees that railroad signal employees and their employers must comply with the hours of service requirements of 49 U.S.C. § 21104, see 49 U.S.C. § 21104(e), and FRA’s hours of service regulation, specifically 49 CFR Part 228, and that section 33 of this Master Agreement does not apply to railroad signal employees concerning hours of service. (j) Railroad Safety. The Recipient agrees that a railroad subject to FRA’s safety jurisdiction must comply with the federal railroad safety laws.
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APPENDIX A
TRIBAL TRANSIT PROGRAM—APPLICABLE PROVISIONS
FTA recognizes that several provisions of this Master Agreement generally applicable to other programs do not apply to the Tribal Transit Programs or the Indian Tribes that are the Direct Recipients of federal assistance under those Programs. The following sections of this Master Agreement are not applicable to the Tribal Transit Programs:
Section 14(a)(1) and 14(b) – Private Enterprise
Section 22(e) – Relocation and Real Property
Section 27 – State Management and Monitoring Systems
Section 30 – Geographic Information and Related Spatial Data Section 37 – Special Notification Requirement for States However, this list is not intended to be comprehensive and FTA may determine that other provisions are not applicable depending upon the Underlying Agreement for the Tribal Transit or a Tribe having entered into a compact and funding agreement with the U.S. Department of Transportation pursuant to the Tribal Transportation Self-Governance Program (23 U.S.C. 207; 49 CFR Part 29).
Cost of Needs
N/A
$ -
Cost of Needs
$ -
Option Term Option Term
YEAR ONE YEAR TWO YEAR THREE YEAR FOUR YEAR FIVE
5,168 5,168 5,168 5,168 5,168
Exhibit D: Cost Proposal Sheet
(Fill-in Yellow Highlighted Cells)
Table 1: Scope of Work Task Pricing
Table 2: Equipment Purchases
Task 8: System Decommissioning and Site Restoration
Station Equipment
Task 1: Project Management
Description
Task 2: Design and Permitting
Costs proposed in this section shall not include the cost of the station equipment. Cost of the station equipment is to be included in Table 2.
The cost for all other elements of Task 2 will be included here.
Task 3: Installation
Task 4: Commissioning
Task 5: Training
Task 6: Maintenance and Support Services
Cost proposed in this section shall be the total cost for maintenance and support services, as outlined in Task 6, for the initial term of three years.
Task 7: Provision of Fuel
N/A as cost proposed in this section shall be included in Table 3.
Other Charges (must define and list below)
Estimated Annual Fuel Usage (kg)
Table 3: Fuel Charges
Maximum Not to Exceed Price
SUBTOTAL
Initital Term
Begins with Commmissioing of Station
Price of Product ($ per kg)
SUBTOTAL
Tube Trailer Rental ($ per month)
Taxes
Delivery Charge ($ per delivery)
SUBTOTAL
ATTACHMENT B
MBL
Temporary Hydrogen Refueling Solution- Revised 5/28/2026
JONATHAN PALACIOS-AVILA
ZEROUP ENERGY, INC
EIN: 33-3519502
323-804-5067
[email protected]
15188 Horizon St Fontana, CA 92336 Unit #2
1. Executive Summary
ZeroUp Energy is pleased to present a flexible and scalable mobile hydrogen fueling proposal to support Montebello Bus Lines’ transition to zero-emission transportation.
Building upon our experience supporting hydrogen transit operations throughout California, this proposal is specifically designed to provide Montebello with a rapid-deployment, lowrisk, and cost-eGective fueling solution for its initial fleet of New Flyer Fuel Cell Electric Buses (FCEBs).
Recognizing the importance of operational flexibility and minimal infrastructure impacts, this proposal includes two mobile fueling options designed to accommodate both nearterm fleet deployment and long-term expansion. Both solutions are centered around proven high-pressure hydrogen storage technology and are intended to minimize permitting complexity, reduce installation timelines, and provide reliable hydrogen fueling availability with little to no permanent site modifications.
The proposed solutions are designed to:
• Support immediate deployment of hydrogen bus operations • Minimize upfront infrastructure and construction requirements • Provide safe, code-compliant fueling operations
• Allow future scalability as the fleet expands
• Reduce operational disruptions to existing transit activities • Maintain flexibility while permanent fueling infrastructure is evaluated Both fueling approaches utilize high-pressure gaseous hydrogen storage and are supported by ZeroUp Energy’s operational expertise in hydrogen logistics, mobile fueling operations, and transit fleet support. Each option provides unique advantages while maintaining the same core commitments of safety, reliability, rapid deployment, regulatory compliance, and operational support.
Option 1: Mobile Nozzle-Only Fueling Configuration (Zero Power / Minimal Infrastructure)
Option 1 utilizes a high-pressure hydrogen storage trailer with a simplified nozzle-based fueling configuration requiring no external electrical connection, trenching, or permanent site work.
Hydrogen fueling is performed through direct high-pressure cascade fueling principles, providing a simple and highly deployable fueling solution for smaller transit fleets.
Key advantages include:
• No external power or utility connection required
• No trenching, permanent foundations, or major site modifications • Rapid deployment with minimal installation requirements • Lower overall project complexity and cost
• Reduced permitting and construction impacts
• Flexible mobile fueling operations tailored to small fleet deployments This option represents the simplest and fastest pathway for Montebello Bus Lines to begin hydrogen fueling operations while maintaining flexibility for future infrastructure planning.
Option 2: Mobile Hydrogen Fueling System with Compression-Assisted Dispensing Option 2 consists of a high-pressure hydrogen storage trailer integrated with a mobile compression-assisted dispensing system capable of fueling buses at 350 bar utilizing industry-standard fueling protocols and connectors.
This option is intended to provide a fueling experience similar to a permanent hydrogen station while maintaining the flexibility and mobility of a temporary fueling solution.
Key advantages include:
• Enhanced fueling performance and optimized bus fills through compressionassisted dispensing • Improved fueling consistency across varying trailer pressures • Minimal permanent infrastructure requirements
• Modular and self-contained fueling architecture
• Scalable design capable of supporting additional buses in the future • Compliance with applicable SAE fueling standards and transit fueling requirements This configuration is ideal for agencies seeking a higher-performance fueling solution while still avoiding the cost and schedule impacts associated with permanent station construction.
Phased Deployment and Future Transition Strategy
ZeroUp Energy understands that Montebello Bus Lines is currently evaluating long-term fueling infrastructure associated with the future Truck Way site improvements and fleet expansion plans. As a result, the proposed mobile fueling approach is intentionally designed to support a phased transition strategy.
Under this approach, Montebello may initially deploy Option 1 as an immediate, low-cost, and low-infrastructure fueling solution to support early hydrogen bus operations while minimizing permitting, construction, and utility coordination requirements at the current facility.
Once the future Truck Way site is operational and capable of supporting additional infrastructure, Montebello may seamlessly transition to Option 2 by integrating a compression-assisted mobile dispenser system capable of providing enhanced fueling performance and a station-like fueling experience.
This phased approach provides several strategic advantages:
• Immediate hydrogen fueling capability without waiting for permanent site development
• Reduced upfront infrastructure costs during early fleet deployment • Flexibility to scale fueling operations alongside fleet growth • Ability to utilize existing mobile hydrogen assets during future expansion • Reduced operational disruption during site transition activities • A clear pathway toward more advanced fueling infrastructure over time By structuring the project in phases, Montebello Bus Lines can begin zero-emission hydrogen operations immediately while preserving long-term flexibility as the Truck Way facility and future fueling needs evolve.
Shared Benefits of Both Options
Regardless of the fueling configuration selected, ZeroUp Energy provides the following core project benefits:
• Rapid deployment aligned with bus delivery schedules
• Mobile fueling architecture designed to minimize site impacts • Hydrogen fuel meeting SAE J2719 purity specifications • Compliance with applicable NFPA, SAE, IFC, CGA, ASME, and related safety standards
• Fuel delivery coordination and operational support services • Preventative maintenance and technical support
• Safety training and fueling procedures for transit personnel • Emergency response coordination and operational troubleshooting support • Flexible fueling schedules coordinated around transit operations
• Scalable infrastructure capable of supporting future fleet growth As Montebello expands its hydrogen fleet, the proposed mobile fueling platform can be expanded through additional storage trailers, increased delivery frequency, or future integration into permanent station infrastructure without disrupting ongoing operations.
A Flexible and Low-Risk Pathway to Zero-Emission Transit ZeroUp Energy brings extensive experience in hydrogen fueling operations, mobile fueling deployments, hydrogen logistics, and transit fleet support throughout California and the western United States.
Our team understands the operational realities associated with deploying hydrogen transit fleets and has developed this proposal to provide Montebello Bus Lines with:
• A practical and operationally simple fueling strategy • A low-risk deployment pathway
• Minimal infrastructure and permitting challenges
• Reliable hydrogen availability and fueling support
• A scalable platform for long-term fleet transition goals Montebello Bus Lines’ transition toward hydrogen fuel-cell transportation represents an important step toward achieving long-term zero-emission goals. Our dual-option approach allows the agency to select the fueling strategy that best aligns with operational priorities, project timelines, infrastructure constraints, and budget considerations while maintaining safety, reliability, and future scalability.
ZeroUp Energy welcomes the opportunity to partner with Montebello Bus Lines and support the successful deployment of its zero-emission hydrogen fleet.
2. Team Qualifications
ZeroUp Energy is a hydrogen solutions provider focused on delivering reliable, scalable, and operationally practical fueling solutions for transit agencies and zero-emission fleets throughout California. Founded by industry professionals with more than a decade of direct experience in hydrogen fueling infrastructure, fuel-cell vehicle support, and station operations, ZeroUp specializes in mobile fueling deployments, hydrogen logistics coordination, and temporary fueling infrastructure for transit and heavy-duty transportation applications.
The ZeroUp team brings extensive hands-on experience supporting hydrogen fueling operations across a variety of environments, including transit agencies, heavy-duty trucking demonstrations, industrial applications, ports, and temporary fueling deployments. Our experience spans station development, hydrogen supply coordination, mobile dispensing systems, permitting support, safety compliance, fleet operations, and onsite fueling management.
ZeroUp’s operational model is specifically designed to provide agencies with flexible and rapidly deployable fueling solutions that minimize infrastructure impacts while maintaining safety, reliability, and compliance with applicable industry standards.
Our team’s expertise includes:
• Mobile hydrogen fueling operations and deployment
• Hydrogen logistics and fuel supply coordination
• High-pressure gaseous hydrogen storage systems
• Compression-assisted and cascade fueling systems
• Transit fleet fueling operations and scheduling
• Hydrogen station development and commissioning
• Regulatory compliance and safety planning
• Operator and first-responder training
• Preventative maintenance and operational support
• Fuel quality management and SAE compliance
ZeroUp has successfully supported hydrogen fueling projects throughout California utilizing both permanent and temporary fueling configurations. Our experience includes direct trailer-to-vehicle fueling, mobile dispenser deployments, compression-assisted fueling, and rapid-response fueling support for transit and demonstration projects.
The company’s technical and operational experience allows us to deliver a complete turnkey solution that includes fuel supply coordination, equipment deployment, onsite fueling support, maintenance coordination, safety management, and operational oversight.
Project Leadership & Key Personnel
Jonathan Palacios-Avila – Administration Lead
Jonathan oversees all aspects of project coordination, fuel supply management, customer relations, and operational execution. With academic backgrounds in Biochemistry and Public Administration from California State University Los Angeles, Jonathan brings over 10 years of direct hydrogen industry experience, including hydrogen station development, fuel-cell technologies, fueling operations, permitting coordination, and zero-emission fleet support.
His experience includes co-founding hydrogen infrastructure initiatives, supporting transit fueling deployments, and managing operational logistics associated with mobile hydrogen fueling systems throughout California.
John Avila – Development Manager
John manages engineering coordination, site planning, permitting support, commissioning activities, and operational implementation. With more than 27 years of civil engineering and infrastructure development experience, John provides expertise in utility coordination, construction oversight, land development, public works, and hydrogen fueling infrastructure.
His background includes hydrogen station construction support, utility coordination with major California utilities, permitting management, and oversight of complex infrastructure projects requiring multi-agency coordination.
Melissa Gilbert – Business Operations Manager
Melissa oversees project logistics, procurement coordination, operational administration, financial management, and compliance tracking. She brings more than 16 years of experience in operations management, transportation logistics, procurement, and vendor coordination, including several years directly supporting hydrogen fueling operations and zero-emission fleet projects.
Her experience managing logistics and operational workflows supports reliable project execution, fuel delivery coordination, and ongoing operational continuity.
Hydrogen Operations & Mobile Fueling Experience
ZeroUp’s team has direct experience supporting hydrogen fueling operations for both temporary and permanent applications throughout California. Our operational capabilities include:
• Mobile transit bus fueling
• High-pressure hydrogen trailer deployments
• Compression-assisted fueling operations
• Temporary fueling support during station outages or construction • OEM and demonstration fleet support
• Hydrogen delivery coordination and logistics management • Fueling operations in constrained and active operational environments Our team maintains operational familiarity with applicable industry standards and fueling protocols, including:
• NFPA 2 – Hydrogen Technologies Code
• NFPA 55 – Compressed Gases and Cryogenic Fluids Code
• SAE J2601 / J2601-2 Fueling Protocols
• SAE J2799 Communications Standards
• SAE J2719 Hydrogen Purity Standards
• DOT transportation regulations
• Applicable IFC, IBC, ASME, ANSI, and CGA standards
These standards govern fueling safety, fueling communication protocols, hydrogen purity, equipment placement, trailer operations, emergency response procedures, and fueling consistency.
Relevant Project Experience
Project Name/Image Location Description
Omnitrans - Hydrogen Fuel and Trailer
Supply
San
Bernardino,
CA
5-year contract supplying 45,000+ kg of
fuel cell–grade hydrogen annually for 4
buses, with weekly deliveries feeding a
HySpencer system. Includes trailer
rental and all-inclusive fuel supply.
Cummins – Class 8 Truck
Demonstration
West
Sacramento
24-month project to supply 50-100kf of
hydrogen per day to Cummins to test
class 8- hydrogen fuel cell trucks. The
team used a trailer swap delivery
method, with integrated dispensing.
ZeroUp team coordinated all permitting
and logistics for the project, with GTL
handling the logistics.
H2B2 – Temporary Infrastructure
Support
Fresno H2B2 leased a GTM-1500 to provide
temporary hydrogen storage and
dispensing for Fresno Area Express's
FCEV buses while their permanent
infrastructure was being developed.
This allowed them to efficiently fuel the
3 buses directly from their green
hydrogen production facility.
StanRTA – Hydrogen Fuel Supply &
Mobile Fueling Services
Modesto,
CA
Multi-year hydrogen fueling services
agreement supporting StanRTA’s fuel
cell electric bus deployment program.
Scope includes temporary/mobile
hydrogen fueling infrastructure,
hydrogen trailer rental, fuel supply,
delivery logistics, and ongoing
operational support utilizing
HySpencer-compatible fueling
systems. The project includes
coordinated hydrogen deliveries,
fueling operations management, and
contingency supply planning to support
uninterrupted transit operations and
future fleet expansion.
Montebello Bus Lines – Temporary
Hydrogen Fueling Support
Montebello,
CA
Temporary hydrogen fueling
deployment supporting Montebello Bus
Lines’ fuel cell electric bus operations.
Scope includes mobile hydrogen
fueling equipment, trailer deployment,
hydrogen fuel supply, delivery
coordination, and operational support
for New Flyer fuel cell buses. The
project was designed to provide a
rapidly deployable fueling solution
while permanent fueling infrastructure
options are evaluated. Includes trailer
rental, fuel deliveries, logistics
coordination, and fueling operations
support.
Regulatory Compliance & Safety
Safety and regulatory compliance are central to ZeroUp Energy’s operational approach. All fueling operations are designed and managed in accordance with applicable hydrogen safety standards and operational best practices.
Our team has experience supporting hydrogen deployments under:
• NFPA 2 and NFPA 55 requirements
• SAE fueling and hydrogen purity standards
• DOT transportation regulations
• IFC and IBC temporary equipment placement requirements • ASME and ANSI vessel requirements
• CGA high-pressure gas handling guidance
ZeroUp’s safety procedures include:
• Site-specific safety planning
• Hazard mitigation and emergency response procedures
• Equipment inspections and preventative maintenance
• Operator and personnel safety training
• Controlled fueling perimeters and operational protocols • Coordination with local AHJs and emergency responders when required Our experience supporting transit agencies, demonstration programs, and mobile fueling operations throughout California positions ZeroUp Energy to provide Montebello Bus Lines with a safe, compliant, reliable, and scalable hydrogen fueling solution capable of supporting both immediate fleet deployment and long-term zero-emission transit goals.
3. Timeline & Scheduling
This section outlines ZeroUp Energy’s proposed project schedule for deployment of the mobile hydrogen fueling solution for Montebello Bus Lines. The proposed schedule is specifically structured around Option 1 — the Mobile Nozzle-Only Fueling Configuration — which was intentionally designed to minimize infrastructure requirements, reduce permitting complexity, and accelerate deployment timelines.
Because Option 1 utilizes a mobile, trailer-based fueling configuration requiring no permanent electrical infrastructure, trenching, or major site modifications, the system can typically be reviewed, coordinated, and operational within approximately 4–6 weeks following Notice to Proceed (NTP), depending on final site coordination and agency review requirements.
ZeroUp’s equipment platform is modular, commercially available, and deployment-ready, allowing the project team to move quickly through design coordination, operational planning, equipment mobilization, and commissioning activities.
Additionally, this phased approach provides Montebello Bus Lines with a clear transition pathway toward Option 2 — the compression-assisted dispenser configuration — once the future Truck Way site is operational and ready to support additional infrastructure. Based on similar deployments and anticipated permitting requirements, ZeroUp anticipates that Option 2 could be fully permitted, deployed, and operational within approximately 90 days following site readiness and authorization to proceed.
3.1 Overall Project Schedule
Week 0 – Notice to Proceed (NTP)
Project kickoG meeting with Montebello Bus Lines operations, facilities, and project stakeholders. During this phase, ZeroUp will:
• Confirm project schedule and deployment milestones
• Finalize fueling location and operational layout
• Coordinate hydrogen supply logistics
• Confirm vehicle fueling schedules and operational procedures • Initiate safety planning and site coordination activities NTP + 1 Week – Site Survey & Operational Review
ZeroUp will complete a detailed site assessment within approximately one week of NTP.
The review will include:
• Trailer positioning and operational access
• Vehicle circulation and fueling flow
• NFPA setback verification
• Safety perimeter evaluation
• Grounding locations and fueling access
• Emergency access and operational coordination
Because Option 1 requires minimal permanent infrastructure, the site review process is significantly streamlined compared to traditional hydrogen station development.
NTP + 2 Weeks – Design & Safety Documentation
ZeroUp will prepare and submit all required operational and safety documentation, including:
• Site layout drawings
• Trailer placement plans
• Fueling procedures
• Safety and emergency response plans
• Equipment specifications
• Operational coordination documents
Due to the temporary and mobile nature of Option 1, permitting requirements are anticipated to be minimal relative to permanent fueling infrastructure.
NTP + 4–6 Weeks – Equipment Deployment & Commissioning
Following completion of site coordination and any required approvals, ZeroUp will mobilize the mobile fueling equipment to the project site.
Deployment activities include:
• Trailer delivery and placement
• Safety inspections
• Fueling system setup
• Functional testing
• Operational verification
• Initial hydrogen delivery coordination
Based on the proposed Option 1 configuration, ZeroUp anticipates full operational readiness within approximately 4–6 weeks following NTP.
Stab Training & Operational Readiness
Immediately following commissioning, ZeroUp will provide onsite operational training for Montebello personnel and applicable stakeholders. Training will include:
• Fueling procedures and operations
• Hydrogen safety protocols
• Emergency shutdown procedures
• Site safety requirements
• Trailer operations and handling awareness
• Incident response coordination
Operational support and technical assistance will remain available throughout the deployment period.
3.2 Future Transition to Option 2 (Truck Way Site)
As Montebello Bus Lines advances development of the future Truck Way facility, ZeroUp’s phased deployment strategy allows the agency to seamlessly transition from the initial mobile fueling configuration to a more advanced compression-assisted fueling system.
Once the Truck Way site is operational and capable of supporting additional utility and infrastructure requirements, ZeroUp can deploy Option 2, which incorporates:
• Compression-assisted dispensing
• Enhanced fueling performance
• Improved fill consistency
• Expanded fleet fueling capability
• Station-like fueling operations
Based on anticipated site conditions and permitting requirements, ZeroUp estimates that Option 2 can typically be permitted, deployed, and commissioned within approximately 90 days following authorization to proceed and site readiness.
This phased approach allows Montebello to:
• Begin hydrogen bus operations immediately
• Minimize upfront infrastructure costs
• Avoid delays associated with permanent station construction • Scale fueling capability alongside fleet expansion
• Transition toward long-term fueling infrastructure over time
3.3 Milestone Schedule Table
Milestone Description Estimated Completion
Notice to Proceed (NTP) Contract execution and kickoG
meeting
Week 0
Site Survey &
Operational Review
Site inspection, trailer layout,
NFPA setback review
NTP + 1 Week
Safety & Design
Documentation
Layout plans, safety
procedures, operational
coordination
NTP + 2 Weeks
Equipment Allocation &
Scheduling
Trailer assignment and
deployment coordination
Weeks 2–4
Equipment Delivery Mobile fueling trailer delivered
onsite
Weeks 4–6
Setup &
Commissioning
Testing, inspections,
operational verification
Weeks 4–6
Stab Training Fueling operations and safety
training
Immediately following
commissioning
Operational Readiness Mobile fueling system fully
operational
Approximately 4–6 Weeks
from NTP
Future Option 2
Deployment
Compression-assisted
dispenser system at Truck Way
site
Approximately 90 Days
from Site Readiness
3.4 Fuel Delivery & Operational Support
ZeroUp Energy’s fuel delivery strategy is designed to ensure reliable, uninterrupted hydrogen availability throughout the duration of the project. Our operational approach incorporates coordinated hydrogen supply scheduling, mobile storage management, and responsive delivery logistics to support Montebello Bus Lines’ fueling needs.
The proposed fueling platform is designed to provide:
• High-purity hydrogen meeting SAE J2719 requirements
• Reliable fueling availability aligned with transit operations • Flexible delivery scheduling based on fleet demand
• Rapid response capability for supplemental fuel deliveries • Mobile storage capacity suGicient for anticipated fleet operations • Ongoing operational and technical support
ZeroUp will coordinate all hydrogen deliveries, operational logistics, and fueling support activities directly with Montebello Bus Lines to ensure safe, reliable, and uninterrupted fueling operations as the agency transitions toward long-term zero-emission fleet deployment.
4. Hydrogen Supply Strategy & Fuel Delivery Plan
Reliable Hydrogen Supply Strategy
ZeroUp Energy’s hydrogen supply strategy is designed to provide Montebello Bus Lines with a highly reliable, flexible, and operationally resilient fueling solution capable of supporting uninterrupted fuel-cell bus operations throughout the duration of the project.
To minimize operational risk and ensure long-term supply reliability, ZeroUp has established a hydrogen supply model centered around K2 Pure Solutions, one of California’s established hydrogen production facilities, supported by coordinated logistics, mobile storage assets, and supplemental backup supply capabilities.
This approach provides Montebello with:
• Reliable access to high-purity hydrogen fuel
• Flexible delivery scheduling aligned with transit operations • Redundant supply planning for operational continuity
• Rapid-response delivery capability
• Scalable fueling support as fleet operations expand
• Reduced risk associated with market disruptions or supply interruptions Hydrogen supplied under this program will meet or exceed SAE J2719 fuel-cell grade hydrogen purity standards, ensuring compatibility with fuel-cell bus systems and long-term vehicle performance.
Additionally, hydrogen supplied through the K2 Pure Solutions platform provides significant environmental benefits and supports California’s broader decarbonization and clean transportation goals. The hydrogen supply maintains a low carbon intensity (CI) profile of approximately 21 gCO2e/MJ, representing greater than 60% renewable content under California’s Low Carbon Fuel Standard (LCFS) methodology.
This lower-carbon hydrogen pathway helps Montebello Bus Lines:
• Reduce lifecycle greenhouse gas emissions associated with fleet operations • Support state and regional zero-emission transportation objectives • Enhance the environmental benefits of fuel-cell electric bus deployment • Improve sustainability reporting and emissions reduction metrics
• Align with California clean fuel and air quality initiatives By utilizing lower-carbon hydrogen fuel, Montebello Bus Lines is not only transitioning to zero-emission vehicle technology at the tailpipe level, but also supporting a cleaner upstream fuel supply chain that further reduces overall transportation-related emissions.
Primary Hydrogen Supply Source – K2 Pure Solutions
The primary hydrogen source for Montebello Bus Lines will be K2 Pure Solutions, a California-based hydrogen producer with established operational capabilities and experience supporting mobility applications throughout the state.
ZeroUp Energy will coordinate all logistics, scheduling, transportation, delivery sequencing, and operational planning associated with hydrogen deliveries to Montebello Bus Lines.
Responsibilities include:
• Hydrogen delivery scheduling
• Trailer dispatch coordination
• Fuel inventory management
• Route planning and delivery timing
• Supply forecasting and operational planning
• Communication and delivery coordination with Montebello staG • Supplemental delivery management when required
The K2 supply platform provides several operational advantages, including:
• Reliable production availability
• Consistent fuel quality meeting SAE J2719 standards
• Low carbon intensity hydrogen (~21 gCO2e/MJ)
• Greater than 60% renewable hydrogen content
• Flexible delivery scheduling
• Rapid response capability for additional fueling needs • Scalable supply support for future fleet growth
This supply structure allows ZeroUp to maintain predictable and dependable fueling operations while minimizing operational disruptions to transit activities.
Backup Supply & Operational Redundancy
To further strengthen operational reliability, ZeroUp Energy maintains access to additional hydrogen supply channels and mobile delivery capabilities that can be utilized in the event of:
• Scheduled production maintenance
• Temporary supply interruptions
• Increased fleet demand
• Emergency fueling requirements
• Regional hydrogen market fluctuations
This layered supply strategy provides Montebello Bus Lines with additional operational assurance and allows ZeroUp to maintain fueling continuity under a wide range of operating conditions.
Through coordinated logistics planning and mobile trailer deployment capabilities, ZeroUp can rapidly adjust delivery schedules, redirect supply routes, or deploy supplemental fuel deliveries as needed to support uninterrupted bus operations.
Fuel Delivery & Operational Scheduling
ZeroUp Energy will work directly with Montebello Bus Lines to establish a fueling and delivery schedule aligned with fleet operations, bus utilization, and anticipated hydrogen consumption.
The fueling schedule will be structured to:
• Maintain suGicient onsite hydrogen inventory
• Prevent fueling interruptions
• Align deliveries with operational windows
• Minimize disruption to transit yard activities
• Provide flexibility for changing operational demands
Deliveries can be coordinated during standard operational windows and adjusted as needed to support transit scheduling requirements.
Key operational commitments include:
• Scheduled fuel deliveries coordinated around transit operations • Flexible delivery timing based on operational needs
• Supplemental delivery capability when required
• Weekend and holiday operational support availability
• Rapid-response support for operational contingencies
Sample Weekly Fuel Delivery Schedule
Day Activity Operational Notes
Monday Primary hydrogen delivery / trailer
top-oG
Delivery coordinated around fleet
operations
Tuesday Bus fueling operations Normal fueling activities Wednesday Fuel inventory review Operational monitoring and usage tracking
Thursday Normal fueling operations No scheduled delivery required under normal demand
Friday Supplemental delivery or trailer
swap (if required)
Based on fleet usage and operational
conditions
Saturday Optional supplemental fueling
support
Available if operationally required
Sunday Optional supplemental fueling
support
Available if operationally required
Actual delivery frequency may vary depending on:
• Fleet utilization
• Bus mileage
• Seasonal operating conditions
• Fuel consumption patterns
• Future fleet expansion
Estimated Fuel Consumption & Delivery Planning
Based on anticipated fleet operations, ZeroUp Energy will develop a detailed delivery schedule designed to maintain adequate hydrogen inventory levels at all times.
The proposed mobile fueling platform is capable of supporting recurring transit fueling operations while maintaining flexibility for:
• Increased fuel demand
• Fleet expansion
• Supplemental fueling needs
• Operational contingencies
• Future transition to the Truck Way facility
This delivery model provides Montebello Bus Lines with a scalable and operationally practical fueling solution that supports both immediate fleet deployment and long-term zero-emission transportation goals.
Future Scalability & Transition Planning
As Montebello Bus Lines expands hydrogen operations and transitions to the future Truck Way facility, ZeroUp’s supply and fueling strategy can scale accordingly through:
• Increased delivery frequency
• Additional mobile storage assets
• Compression-assisted fueling infrastructure
• Expanded onsite fueling capability
• Integration with future permanent station infrastructure This phased and scalable approach allows Montebello to begin hydrogen bus operations immediately while preserving long-term flexibility for future infrastructure development and fleet growth.
4. Cost Proposal
ZeroUp Energy’s proposed pricing structure is designed to provide Montebello Bus Lines with a flexible, scalable, and operationally practical hydrogen fueling solution while minimizing upfront infrastructure costs and allowing for future expansion as fleet operations grow.
The proposed pricing model reflects the phased deployment strategy outlined in this proposal, allowing Montebello to begin operations with a low-infrastructure mobile fueling solution under Option 1, while preserving the ability to transition to a higher-performance compression-assisted fueling configuration under Option 2 at the future Truck Way facility.
All pricing below is preliminary and subject to final project scope, fueling schedules, delivery frequency, hydrogen market conditions, and final operational requirements.
Option 1 – Mobile Nozzle-Only Fueling Configuration
(Zero Power / Minimal Infrastructure)
Option 1 is designed to provide Montebello Bus Lines with the fastest and lowestcomplexity pathway to begin hydrogen fueling operations. This configuration utilizes a mobile high-pressure hydrogen storage trailer with direct cascade fueling and requires no permanent electrical infrastructure, trenching, or major site modifications.
Under this configuration, each weekly trailer delivery is expected to provide an estimated usable fueling yield of approximately 380–426 kg of hydrogen, depending on fueling patterns, trailer pressure conditions, ambient temperature, and operational usage.
Option 1 Pricing Structure
Cost Component Pricing
Mobile Hydrogen Trailer Rental $19,000 per month
Hydrogen Fuel $18.00 per kg
Hydrogen Delivery Charge Estimated $3,000–$4,000 per delivery* Estimated Delivery Frequency Approximately 1 delivery per week *Delivery pricing is variable and may fluctuate based on current hydrogen transportation costs, diesel pricing, delivery routing, and regional market conditions. Delivery costs may decrease if transportation and fuel market conditions improve over time.
Estimated Monthly Operating Cost – Option 1
Item Estimated Monthly Cost
Trailer Rental $19,000
Hydrogen Fuel (1,520–1,704 kg/month @ $18/kg) ~$27,360 – $30,672 Delivery Charges (4 deliveries/month) ~$12,000 – $16,000 Estimated Total Monthly Cost ~$58,360 – $65,672/month
Included Services
Option 1 pricing includes:
• Mobile hydrogen storage trailer deployment
• Fuel delivery coordination
• Hydrogen supply management
• Trailer positioning and operational support
• Safety planning and operational procedures
• Standard operational support and coordination
• Fueling training and onboarding assistance
• Ongoing logistics coordination
Estimated Operational Profile
Based on current fleet assumptions, the proposed weekly delivery schedule is expected to adequately support anticipated hydrogen bus operations while maintaining operational flexibility for changing service demands.
This option is specifically intended to:
• Minimize upfront infrastructure costs
• Accelerate deployment timelines
• Reduce permitting complexity
• Provide operational flexibility during early fleet deployment • Support transition planning toward future permanent infrastructure Option 2 – Compression-Assisted Mobile Dispensing System (Enhanced Fueling Performance)
Option 2 incorporates a compression-assisted mobile dispensing system designed to provide enhanced fueling performance and a station-like fueling experience once the future Truck Way facility is operational and capable of supporting additional infrastructure requirements.
This configuration improves fueling consistency, enhances bus fill performance, and supports long-term fleet scalability while maintaining the flexibility of a modular mobile fueling platform.
Under this configuration, the compression-assisted fueling system is expected to increase usable hydrogen recovery and fueling eGiciency, allowing each trailer delivery to yield approximately 460 kg of usable hydrogen per week.
Option 2 Pricing Structure
Cost Component Pricing
Compression & Mobile Dispenser System $11,000 per month Mobile Hydrogen Trailer Rental $16,000 per month
Hydrogen Fuel $17.00 per kg
Hydrogen Delivery Charge Estimated $3,000–$4,000 per delivery* Estimated Delivery Frequency Approximately 1 delivery per week *Delivery pricing is variable and may fluctuate based on current hydrogen transportation costs, fuel pricing, delivery routing, and regional market conditions. Delivery costs may decrease if transportation and fuel market conditions improve over time.
Estimated Monthly Operating Cost – Option 2
Item Estimated Monthly Cost
Compression & Dispenser System $11,000
Trailer Rental $16,000
Hydrogen Fuel (1,840 kg/month @ $17/kg) ~$31,280
Delivery Charges (4 deliveries/month) ~$12,000 – $16,000 Estimated Total Monthly Cost ~$70,280 – $74,280/month
Included Services
Option 2 pricing includes:
• Compression-assisted fueling equipment
• Mobile dispenser system
• High-pressure hydrogen storage trailer
• Fuel delivery and logistics coordination
• Equipment commissioning and testing
• Operational training
• Safety planning and operational procedures
• Ongoing technical support
• Preventative maintenance coordination
Future Deployment Strategy
Option 2 is intended as a future phased upgrade once the Truck Way facility is completed and capable of supporting:
• Additional utility infrastructure
• Enhanced fueling operations
• Increased fleet fueling demand
• Expanded operational throughput
Based on similar deployments, ZeroUp anticipates that Option 2 can typically be permitted, deployed, and operational within approximately 90 days following site readiness and authorization to proceed.
Pricing Assumptions & Notes
The pricing provided in this proposal is based on the following assumptions:
• Approximately one hydrogen delivery per week
• Mobile fueling operations at the current Montebello facility • Standard operational access during normal delivery windows • Fuel-cell grade hydrogen meeting SAE J2719 standards
• Hydrogen supplied through the K2 Pure Solutions platform • Current transportation and logistics market conditions Pricing may be adjusted based on:
• Changes in fleet size or hydrogen consumption
• Increased delivery frequency
• Changes in hydrogen commodity pricing
• Transportation fuel cost fluctuations
• Operational schedule modifications
• Final site requirements and permitting conditions
ZeroUp Energy remains committed to working collaboratively with Montebello Bus Lines to structure a fueling solution that is operationally practical, cost-eGective, scalable, and aligned with the agency’s long-term zero-emission transportation goals.
CITY OF MONTEBELLO
PROFESSIONAL SERVICES AGREEMENT NO. 4522
WITH ZEROUP ENERGY, INC.
THIS PROFESSIONAL SERVICES AGREEMENT (“Agreement”) is made and entered into on June. 25, 2026 (“Effective Date”), by and between the CITY OF MONTEBELLO, a California municipal corporation (the “CITY”) and ZeroUp Energy, Inc. (the “VENDOR”). The CITY and the VENDOR are sometimes referred to herein individually as the “Party,” and collectively as the “Parties.”
RECITALS
WHEREAS, the CITY desires to retain a qualified professional vendor to provide a temporary hydrogen refueling solution within the CITY; and WHEREAS, the VENDOR represents that it is fully qualified to perform such services by virtue of its experience and the training, education, technical expertise, and specialized qualifications of its principals, employees, and personnel.
NOW THEREFORE, in consideration of performance by the Parties of the covenants and conditions herein contained, the Parties hereto agree as follows:
SECTION 1. INCORPORATION OF RECITALS AND OTHER CONTRACT
DOCUMENTS
a. The above-referenced Recitals constitute a material part hereof and shall hereby be incorporated by reference. Moreover, this Agreement consists of the following documents, in order of precedence, all of which are incorporated herein and made part of this Agreement, as though fully set forth herein:
1. This Agreement and its Exhibits, including any and all addenda or supplemental agreements.
2. Proposal referenced and Best Final Offer received by the successful proposer.
3. All other documents, including but not limited to all applicable bonds, insurance certificates, notices, schedules, forms, certifications, and affidavits.
b. These documents shall be collectively referred to herein as the “Contract Documents.” In the event of a conflict among the Contract Documents, the order of precedence list above shall apply.
SECTION 2. SERVICES / COMPENSATION.
a. The VENDOR shall provide to the CITY those services set forth fully in the VENDOR’S Scope of Services and associated cost proposal attached hereto as Exhibit “A” and incorporated fully herein by this reference (the “Scope of Services”).. b. The VENDOR shall complete the Scope of Services in a timely manner and in accordance with the agreed-upon project schedule established by the Parties. c. The VENDOR shall be compensated in an amount not-to-exceed One
PROFESSIONAL SERVICES AGREEMENT NO. 4522
Million Four Hundred Eighty-Four Thousand Four Hundred Twenty Dollars ($1,484,420) for performance of the Professional Services as set forth in the Schedule of Compensation attached hereto as Exhibit “A” and incorporated fully herein by this reference (“Compensation”). The VENDOR shall provide an itemized invoice to the CITY for services performed. The VENDOR shall not incur fees or costs which exceed the Compensation without the prior written consent of the CITY.
SECTION 3. TERM.
a. This Agreement shall commence upon issuance of a written “Notice to Proceed” (as further defined below) by the CITY and shall expire two (2) years from the Effective Date, unless terminated earlier as hereinafter provided. This Agreement may be extended for up to one (1) one-year extension upon such terms and conditions mutually agreed upon by the Parties in writing. b. Notice to Proceed. Any work or service contemplated under this Agreement shall not commence until the CITY has issued a written Notice to Proceed issued by CITY’s applicable, department head.
SECTION 4. PERFORMANCE.
a. The VENDOR shall at all times, faithfully, competently, and to the best of its ability, experience, and talent, perform all tasks described herein. b. The VENDOR shall employ, at a minimum, generally accepted standards and practices utilized by companies engaged in providing similar services, as are required of VENDOR hereunder, in meeting its obligations under this Agreement. c. The VENDOR shall be knowledgeable of and subject to all CITY ordinances, rules and regulations, standard operating procedures, and the supervisory chain of command.
d. The VENDOR shall have the right to retain, subject to the CITY's approval, additional individuals, VENDORs or subVENDORs to assist in the completion of services as herein defined. Compensation for additional individuals, VENDORs or subVENDORs shall be the sole and exclusive responsibility of the VENDOR. e. The VENDOR shall retain all original reports, field and office notes, correspondence, calculations, maps, and other documents specifically related to the services provided by the VENDOR pursuant to this Agreement, other than documents which are exempt from disclosure pursuant to the attorney-client privilege or any other law. Said documents shall be made available for inspection by the CITY upon request.
SECTION 5. WORK PRODUCT.
a. The VENDOR hereby agrees that all work product produced pursuant to this Agreement, and provided to the CITY during and upon completion of this Agreement, shall be the property of the CITY, and ownership of said work product shall be retained by the CITY. The VENDOR may take and retain copies of such written products as desired, but no such written products shall be the subject of a copyright application by the VENDOR.
PROFESSIONAL SERVICES AGREEMENT NO. 4522
b. All data, documents, discussion, or other information developed or received by the VENDOR or provided for performance of this Agreement are deemed confidential and shall not be disclosed by the VENDOR without prior written consent by the CITY. The CITY shall grant such consent if disclosure is legally required. All such written products shall be returned to the CITY upon the termination or expiration of this Agreement. The VENDOR agrees that the covenants contained in this Section shall survive the expiration or termination of this Agreement.
SECTION 6. EXTRA SERVICES.
No extra services over and above the Compensation shall be rendered by the VENDOR under this Agreement unless such extra services first shall have been duly authorized in writing by the CITY’s City Manager (the “City Manager”).
SECTION 7. CITY SUPERVISION.
The City Manager shall have the right of general supervision of all work performed by the VENDOR and shall be the CITY’s agent with respect to obtaining the VENDOR’s compliance hereunder. No payment for services rendered under this Agreement shall be made without the prior approval of the City Manager.
SECTION 8. TERMINATION.
In the event that either Party hereto fails or refuses to perform any of the provisions of this Agreement at the time and in the manner required, the non-defaulting party shall give the defaulting party written notice of the default, the nature of the default, and of the steps necessary to cure the default.
a. Termination for Cause. In the event that any of the provisions of the Agreement are violated by either party, the non-defaulting Party may terminate the Agreement by serving written notice upon the other Party, listing the violation(s) and its intent to terminate such Agreement unless within ten (10) days after the serving of such notice, such violation shall cease or be rectified, the contract shall upon the expiration of an additional thirty (30) days cease and terminate. Violations by the VENDOR which cannot be corrected within ten (10) days, said contract shall at the option of the CITY cease and terminate upon the giving of like notice. In the event of any such termination for default by the VENDOR, the CITY may take over the work and prosecute the same to completion by contract or otherwise for the account and at the expense of the VENDOR. The VENDOR and his sureties shall be liable to the CITY for any excess cost occasioned in the event of any such termination.
This change shall not be construed to prevent the termination, for other causes authorized by law or other provisions of this contract. In the event of a termination for cause, the VENDOR shall only be entitled to the Compensation for those Professional Services satisfactory performed on or before the effective date of termination.
b. Termination for Convenience. The CITY shall have the option, at its sole discretion and without cause, to terminate this Agreement in whole, or in part, by giving ten (10) business days’ written notice to the VENDOR. Upon the termination of this Agreement as provided herein, the CITY shall provide to the VENDOR the part of Compensation which would otherwise be payable to the VENDOR for services the VENDOR had completed as of the date of termination, less the amount of all previous payment with respect to the Compensation. Further, upon such a
PROFESSIONAL SERVICES AGREEMENT NO. 4522
termination for convenience by the CITY, the Parties agree that the VENDOR shall be reimbursed for any “non-refundable” costs that the VENDOR has incurred for its services under this Agreement, provided that: (1) such “non- refundable” costs were incurred by the VENDOR prior to the date of termination, and (2) that the VENDOR provides the CITY with adequate proof that the VENDOR incurred the costs, and is unable to be seek a refund for such costs. Such “non-refundable” costs may include, but are not limited to, travel reservations incurred by the VENDOR for its performance of services under this Agreement. The VENDOR agrees to cease all work under this Agreement on or before the effective date of any notice of termination.
SECTION 9. EMPLOYMENT OF CITY EMPLOYEES.
No regular employee of the CITY shall be employed by the VENDOR during the term of this Agreement.
SECTION 10. NON-LIABILITY OF CITY OFFICIALS AND EMPLOYEES.
No official or employee of the CITY shall be personally liable to the VENDOR in the event of any default or breach by the CITY, or for any amount which may become due to the VENDOR.
SECTION 11. INDEPENDENT VENDOR.
a. The VENDOR is and shall, at all times, remain as to the CITY a wholly independent VENDOR. Neither the CITY nor any of its elected officials, officers, employees, or agents shall have control over the conduct of the VENDOR except as expressly set forth in this Agreement. The VENDOR shall not at any time or in any manner represent that he or she is in any manner an elected official, officer, employee, or agent of the CITY. No employee benefits shall be available to the VENDOR in connection with the performance of this Agreement. Except as provided in this Agreement, the CITY shall not pay salary, wages, or other compensation to the VENDOR for performance hereunder for the CITY, the CITY shall not be liable for compensation to the VENDOR, the VENDOR’s employees or the VENDOR’s subVENDORs for injury or sickness arising out of performing services hereunder.
b. The parties further acknowledge and agree that nothing in this Agreement shall create or be construed to create a partnership, joint venture, employment relationship or any other relationship except as set forth in this Agreement. c. The CITY shall not deduct from the Compensation paid to the VENDOR any sums required for Social Security, withholding taxes, FICA, state disability insurance or any other federal, state or local tax or charge which may or may not be in effect or hereinafter enacted or required as a charge or withholding on the compensation paid to the VENDOR. The CITY shall have no responsibility to provide the VENDOR, its employees or subVENDORs with workers’ compensation insurance or any other insurance.
SECTION 12. CalPERS ANNUITANTS AND ELIGIBILITY INDEMNITY. a. If the VENDOR is a California Public Employees’ Retirement System (“CalPERS”) annuitant, the VENDOR must provide the City with written notification
PROFESSIONAL SERVICES AGREEMENT NO. 4522
of such fact a minimum of 14 calendar days prior to commencement of services under this Agreement. Failure to provide such notification may result in termination of the Agreement, and any penalties or other costs relating thereto shall be borne by the VENDOR. If this Agreement remains in place, the VENDOR shall execute any amendment(s) to this Agreement requested by the City in order to comply with all laws and regulations applicable to CalPERS annuitants. b. In the event that the VENDOR or any employee, agent, or subVENDOR of the VENDOR providing services under this Agreement claims or is determined by a court of competent jurisdiction or CalPERS to be eligible for enrollment in CalPERS as an employee of the CITY, the VENDOR shall indemnify, defend, and hold harmless the CITY for the payment of any employee and/or employer contributions for CalPERS benefits on behalf of the VENDOR or its employees, agents, or subVENDORs, as well as for the payment of any penalties and interest on such contributions, which would otherwise be the responsibility of the CITY. c. Notwithstanding any other agency, state or federal policy, rule, regulation, law or ordinance to the contrary, the VENDOR and any of its employees, agents, and subVENDORs providing service under this Agreement shall not qualify for or become entitled to, and hereby agree to waive any claims to, any compensation, benefit, or any incident of employment by the CITY, including but not limited to eligibility to enroll in PERS as an employee of the CITY and entitlement to any contribution to be paid by the CITY for employer contribution and/or employee contributions for PERS benefits.
SECTION 13. LEGAL RESPONSIBILITIES.
The VENDOR shall at all times observe and comply with all applicable laws, ordinances, codes, and regulations of the federal, state, and local governments including, but not limited to the Montebello Municipal Code. The CITY, and its appointed or elected officers, employees, or agents, shall not be liable at law or in equity occasioned by failure of the VENDOR to comply with this section.
SECTION 14. INDEMNIFICATION.
The VENDOR agrees to, and shall defend, indemnify, protect and hold harmless, the CITY, its elected and appointed boards, officers, officials, employees, agents and volunteers from and against any and all claims, demands, lawsuits, defense costs, civil, penalties, expenses, causes of action, and judgments at law or in equity, or liability of any kind or nature which the CITY, its elected and appointed boards, officers, officials, employees, agents and volunteers may sustain or incur or which may be imposed upon them for injuries or deaths of persons, or damage to property arising out of the VENDOR’s negligent or wrongful act, or omission under the terms of this Agreement, except only liability arising out of the sole negligence of the CITY.
SECTION 15. INSURANCE COVERAGE.
a. During the term of this Agreement, the VENDOR shall carry, maintain, and keep in full force and effect insurance against claims for death or injuries to persons or damages to property that may arise from or in connection with VENDOR’s performance of this Agreement. Such insurance shall be of the types and in the amounts as set forth below:
PROFESSIONAL SERVICES AGREEMENT NO. 4522
Commercial General Liability (CGL): Insurance Services Office Form CG 00 01 covering CGL on an “occurrence” basis for bodily injury and property damage, including products-completed operations, personal injury, and advertising injury, with limits no less than $2,000,000 per occurrence. If a general aggregate limit applies, the limit shall be twice the required occurrence limit.
Automobile Liability Insurance: Insurance Services Office Form Number CA 0001 covering, Code 1 (any auto), or if VENDOR has no owned autos, Code 8 (hired) and 9 (non-owned), with limit no less than $1,000,000 per accident for bodily injury and property damage. Worker's Compensation insurance as required by the laws of the State of California, with Statutory Limits, and Employer’s Liability Insurance with limit of no less than $1,000,000 per accident for bodily injury or disease.
Professional Liability insurance appropriate to the VENDOR’S profession, with limit no less than $1,000,000 per occurrence or claim, $1,000,000 aggregate.
b. If the VENDOR maintains higher limits than the minimums shown above, the CITY requires and shall be entitled to coverage for the higher limits maintained by the VENDOR.
c. The CONTACTOR shall require each of its subVENDORs, if any, to maintain insurance coverage that meets all of the requirements of this Agreement. d. The policy or policies required by this Agreement shall be issued by an insurer admitted in the State of California and with a current rating of at least A:VII in the latest edition of Best's Insurance Guide.
e. Each insurance policy required above shall state that coverage shall not be canceled, except after thirty (30) days’ prior written notice (ten [10] days for non-payment) has been given to the CITY. The VENDOR agrees that if it does not keep the aforesaid insurance in full force and effect the CITY may either (i) immediately terminate this Agreement for Cause; or (ii) take out the necessary insurance and pay, at the VENDOR’s expense, the premium thereon. f. Evidence of Insurance prior to commencement. The Contractor shall provide to the CITY Certificate(s) of Insurance evidencing such coverage together with copies of the required policy endorsements no later than five (5) business days prior to commencement of service and at least fifteen (15) business days prior to the expiration of any policy. Unreasonable failure to provide such evidence may be cause for termination of the Agreement as provided herein or delay the services’ commencement date. The evidence of insurance shall be U.S. mail or email to:
City of Montebello
Attn: Risk Manager
1600 West Beverly Boulevard
Montebello, CA 90640
PROFESSIONAL SERVICES AGREEMENT NO. 4522
Email: [email protected]
Coverage shall not be suspended, voided, cancelled, reduced in coverage or in limits, non-renewed, or materially changed for any reason, without thirty (30) days prior written notice thereof given by the insurer to the CITY by U.S. mail, or by personal delivery, except for nonpayment of premiums, in which case ten (10) days prior notice shall be provided.
g. Evidence of Insurance during the entire term of the Agreement. At all times during the term of this Agreement, the VENDOR shall maintain on file with the CITY’s Risk Manager a certificate or certificates of insurance showing that the aforesaid policies are in effect in the required amounts and naming the CITY as an additional insured. The VENDOR shall, prior to commencement of work under this Agreement, file with the CITY’s Risk Manager such certificate(s). h. The VENDOR shall provide proof that policies of insurance required herein expiring during the term of this Agreement have been renewed or replaced with other policies providing at least the same coverage. Such proof will be furnished at least two (2) weeks prior to the expiration of the coverages. i. The general liability and automobile policies of insurance required by this Agreement shall contain an endorsement naming the CITY, its officers, employees, agents and volunteers as additional insureds. All of the policies required under this Agreement shall contain an endorsement providing that the policies cannot be canceled or reduced except on thirty days’ prior written notice to the CITY. The VENDOR agrees to require its insurer to modify the certificates of insurance to delete any exculpatory wording stating that failure of the insurer to mail written notice of cancellation imposes no obligation, and to delete the word “endeavor” with regard to any notice provisions.
j. The insurance provided by the VENDOR shall be primary to any coverage available to the CITY. Any insurance or self-insurance maintained by the CITY, its officers, employees, agents, or volunteers, shall be in excess of VENDOR’s insurance and shall not contribute with it.
k. All insurance coverage provided pursuant to this Agreement shall not prohibit the VENDOR, and VENDOR’s employees, agents or subVENDORs, from waiving the right of subrogation prior to a loss. The VENDOR hereby waives all rights of subrogation against the CITY.
l. Any deductibles or self-insured retentions must be declared to and approved by the CITY. At the option of the CITY, the VENDOR shall either reduce or eliminate the deductibles or self-insured retentions with respect to the CITY, or the VENDOR shall procure a bond guaranteeing payment of losses and expenses. m. Procurement of insurance by the VENDOR shall not be construed as a limitation of the VENDOR'S liability or as full performance of VENDOR’s duties to indemnify, hold harmless and defend under the indemnity covenants of this Agreement.
PROFESSIONAL SERVICES AGREEMENT NO. 4522
SECTION 16. SUBCONTRACT, ASSIGNMENT OR DELEGATION.
The VENDOR shall not subcontract, delegate, or assign its duties or rights hereunder, either in whole or in part, without the prior written consent of the CITY.
Any proposed subcontract, delegation, or assignment shall provide a description of the services to be covered, identification of the proposed sub-VENDOR, delegee, or assignee, and an explanation of why and how the same was selected, including the degree of competition involved.
Any subcontract, delegation or assignment shall be made in the name of the VENDOR and shall not bind or purport to bind the CITY and shall not release the VENDOR from any obligations under this Agreement including, but not limited to, the duty to properly supervise and coordinate the work of employees, assignees, delegees or sub-VENDORs. No such subcontract, delegation or assignment shall result in any increase in the amount of total compensation payable to the VENDOR under the Agreement.
SECTION 17. NO WAIVER.
Waiver by any party hereto of any term, condition or covenant of this Agreement shall not constitute the waiver of any other term, condition, or covenant hereof.
SECTION 18. DISPUTE RESOLUTION; GOVERNING LAW.
Disputes regarding the interpretation or application of any provision(s) of this Agreement shall, to the extent reasonably feasible, be resolved through good faith negotiations between the Parties. If any action at law or in equity is brought to enforce this Agreement or because of alleged dispute, breach, default or misrepresentation in connection with the provisions of this Agreement, the prevailing party in such action shall be entitled to reasonable attorney’s fees, expert fees, costs and necessary disbursements incurred in that action or proceeding, in addition to such other relief as may be sought and awarded. The venue for any litigation shall be County of Los Angeles, California. The Parties agree that the covenants contained in this Section shall survive the expiration or termination of this Agreement.
SECTION 19. ATTORNEY’S FEES AND COSTS.
If litigation is reasonably required to enforce or interpret the provisions of this Agreement, the prevailing party in such litigation shall be entitled to an award of reasonable attorney's fees and costs in addition to any other relief to which it may be entitled.
SECTION 20. WARRANTIES.
Each of the parties represents and warrants to one another as follows:
a. It has received independent legal advice from its attorneys with respect to the advisability of entering into and executing this Agreement; b. In executing this Agreement, it has carefully read this Agreement, knows the contents thereof, and has relied solely on the statements expressly set forth herein
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and has placed no reliance whatsoever on any statement, representation, or promise of any other party, or any other person or entity, not expressly set forth herein, nor upon the failure of any other party or any other person or entity to make any statement, representation or disclosure of any matter whatsoever; and c. It is agreed that each party has the full right and authority to enter into this Agreement, and that the person executing this Agreement on behalf of either party has the full right and authority to fully commit and bind such party to the provisions of this Agreement.
SECTION 21. MISCELLANEOUS.
a. The descriptive paragraph headings of this Agreement are included for purposes of convenience only and shall not control or affect the construction of interpretation of any of its provisions.
b. Whenever the context hereof shall so require, the singular shall include the plural, the male gender shall include the female gender, and the neuter and vice versa.
c. In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision hereof and this Agreement shall be construed as if such invalid, illegal, or unenforceable provisions had never been contained herein.
d. The representations and warranties made by the parties to this Agreement shall survive the consummation of the transaction herein described. e. This Agreement may be signed in any one or more counterparts all of which taken together shall be but one and the same Agreement. Any signed copy of this Agreement or of any other document or agreement referred to herein, or copy or counterpart thereof, delivered by facsimile transmission, shall for all purposes be treated as if it were delivered containing an original manual signature of the party whose signature appears in the facsimile and shall be binding upon such party in the same manner as though an originally signed copy had been delivered. f. Each of the parties acknowledges that it has been represented by independent counsel of its own choosing, or if it has not been so represented, it has been admonished to obtain independent counsel and has freely and voluntarily waived and relinquished the right to counsel. Each party who has not obtained independent counsel acknowledges that the failure to have independent legal counsel will not excuse such party’s failure to perform under this Agreement or any agreement referred to in this Agreement.
SECTION 22. NOTICE.
All notices, demands, requests or approvals to be given under this Agreement shall be given in writing and conclusively shall be deemed served when delivered via email (an “Electronic Notice” as further defined below), personally or on the second (2nd) business day after the deposit thereof in the United States mail, postage prepaid, registered or certified, addressed as hereinafter provided. All notices, demands, requests, or approvals hereunder shall be given to the following
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addresses or such other addresses as the Parties may designate by written notice:
If to CITY: City of Montebello
Attn: Raul Alvarez, City Manager
1600 West Beverly Boulevard
Montebello, CA 90640
(323) 887-1200
Email: [email protected]
With a copy to: City of Montebello – Department of Transportation Attn: John Soria, Director of Transportation
400 South Taylor Avenue
Montebello, CA 90640
(323) 558-1625 ext.
Email: [email protected]
If to VENDOR: ZeroUp Energy, Inc.
Attn: Jonathan Palacios-Avila
15188 Horizon St, Unit 2
Fontana, CA 92336
(323) 804-5067
Email: [email protected]
An electronic communication (“Electronic Notice”) shall be deemed written notice for purposes of this section if sent to the electronic mail address specified above.
Electronic Notice shall be deemed received at the time the party sending Electronic Notice receives verification of receipt by the receiving party. Any party receiving Electronic Notice may request and shall be entitled to receive the notice on paper, in a nonelectronic form.
SECTION 23. NON-DISCRIMINATION AND EQUAL OPPORTUNITY EMPLOYER.
In the performance of this Agreement, the VENDOR shall not discriminate against any employee, sub-VENDOR, or applicant for employment because of race, color, creed, religion, sex, marital status, national origin, ancestry, age, physical or mental handicap, mental condition or sexual orientation. The VENDOR will take affirmative action to ensure that sub-VENDOR and applicants are employed, and that employees are treated during employment, without regard to their race, color, creed, religion, sex, marital status, national origin, ancestry, age, physical or mental handicap, medical condition or sexual orientation.
SECTION 24. CONFLICT OF INTEREST.
The VENDOR covenants that it presently has no interest and shall not acquire any interest, direct or indirect, which may be affected by the services to be performed by the VENDOR under this Agreement, or which would conflict in any manner with the performance of its services hereunder. The VENDOR further covenants that, in performance of this Agreement, no person having any such interest shall be employed by it. Furthermore, the VENDOR shall avoid the appearance of having any interest that would conflict in any manner with the performance of its services pursuant to this Agreement.
The VENDOR covenants not to give or receive any compensation, monetary or
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otherwise, to or from the ultimate vendor(s) of services to the CITY as a result of the performance of this Agreement, or the services that may be procured by the CITY as a result of the recommendations made by the VENDOR. The VENDOR's covenant under this section shall survive the termination of this Agreement.
SECTION 25. ENTIRE AGREEMENT.
This Agreement contains the entire understanding between the CITY and the VENDOR. Any prior agreements, promises, negotiations or representations not expressly set forth herein are of no force or effect. Subsequent modifications to this Agreement shall be effective only if in writing and signed by each party. If any term, condition, or covenant of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions of this Agreement shall be valid and binding.
[SIGNATURE PAGE TO FOLLOW]
PROFESSIONAL SERVICES AGREEMENT NO. 4522
IN WITNESS WHEREOF, the parties, through their respective authorized representatives, have executed this Agreement as of the date first written above. (“CITY”) (“VENDOR”)
CITY OF MONTEBELLO ZEROUP ENERGY, INC.
Raul Alvarez, City Manager Jonathan Palacios-Avila, CEO ATTEST:
Christopher Jimenez, City Clerk
APPROVED AS TO FORM:
Arnold M. Alvarez-Glasman, City Attorney
EXHIBITS:
Exhibit A – Contractor’s Proposal
EXHIBIT “A”
Contractor’s Proposal and Schedule of Compensation
ITEM # 30
CITY OF MONTEBELLO
CITY COUNCIL AGENDA STAFF REPORT
TO: Honorable Mayor and City Council Members
FROM: Raul Alvarez, City Manager
BY: Joseph Palombi, Director of Planning & Community Development SUBJECT: ADOPTION OF ORDINANCE NO. 2496 GRANTING OIL PIPELINE FRANCHISE TO CRIMSON CALIFORNIA PIPELINE L.P.
DATE: June 24, 2026
RECOMMENDATIONS:
It is recommended that the City Council:
1. Adopt Ordinance No. 2496 granting an oil pipeline franchise to Crimson California Pipeline L.P.; and
2. Authorize the continuation of pipeline operations within the public right-of-way under the updated terms and conditions set forth in the ordinance; and,
3. Take such additional and/or related action that may be desirable.
FISCAL IMPACT:
The City will continue to receive annual franchise fee revenue based on pipeline length and diameter, consistent with California Public Utilities Code Section 6231.5.
The proposed ordinance maintains annual Consumer Price Index (CPI) adjustments to the franchise fee, ensuring that revenue remains current and keeps pace with inflation over time. The City historically receives approximately $3,500 annually from this franchise.
BACKGROUND/DISCUSSION:
On January 14, 2009, the City Council adopted Ordinance No. 2327, granting Crimson California Pipeline L.P. a ten (10) year franchise to operate and maintain an existing pipeline system within the City's public right-of-way, and establishing the terms and conditions governing compensation, maintenance, and operational requirements. The
CITY COUNCIL AGENDA REPORT - MEETING OF JUNE 24, 2026
subject pipeline system is located within City rights-of-way, including Lincoln Avenue, Montebello Boulevard, and Beverly Boulevard, and has been in existence for many years, transporting crude oil to regional refineries.
Union Oil Company previously held a twenty-five (25) year pipeline franchise in the City, which expired in 1996. Tosco Corporation subsequently acquired the pipeline and was granted a franchise by the City. Crimson Pipeline L.P. ("Crimson") later acquired the pipeline system and continues to operate under the authority of Ordinance No. 2327.
On January 5, 2026, Crimson formally submitted a request to renew its existing franchise. After review by City staff, it was recommended to propose an amendment to Ordinance No. 2327 to continue as is, with CPI adjustments applied over time.
ENVIRONMENTAL:
The proposed action is not considered a “project” under the California Environmental Quality Act (CEQA) pursuant to Section 15378, as it involves the continuation of an existing service and does not result in a direct or reasonably foreseeable physical change in the environment.
Alternatively, the project is exempt under CEQA Guidelines Section 15301 (Existing Facilities), as it consists of the operation, repair, maintenance, or minor alteration of existing public facilities involving negligible or no expansion of use.
ANALYSIS:
The proposed ordinance grants a new franchise for an initial term of ten (10) years, with an option for an additional ten (10) year extension, consistent with prior franchise structures. While Crimson has requested a renewal of its existing franchise, the City retains the authority to establish updated terms and conditions through the adoption of a new ordinance.
The proposed ordinance incorporates the following key provisions:
1. Consumer Price Index (CPI) Adjustments – The franchise fee will continue to be adjusted annually based on CPI to ensure that compensation reflects current economic conditions.
2. CPI Confirmation Prior to Extension – Any future extension of the franchise will require that CPI adjustments are calculated and agreed upon prior to approval, ensuring that outdated rates are not carried forward.
3. City Council Approval – The extension of the franchise is not automatic and requires formal approval by the City Council.
4. Updated Franchise Terms – Any extension will be subject to updated franchise terms, including revised compensation, ensuring consistency with current City standards and practices.
CITY COUNCIL AGENDA REPORT - MEETING OF JUNE 24, 2026
These provisions ensure that the City maintains appropriate oversight of the use of public rights-of-way while securing fair and updated compensation.
SUMMARY:
The proposed ordinance allows for the continued operation of an existing pipeline system within the City while incorporating updated provisions to ensure appropriate CPI adjustments over time.
Approval of the ordinance will maintain continuity of service, preserve an ongoing revenue source, and ensure that the franchise remains consistent with current City policies and financial practices.
ATTACHMENT(S)
1. Attachment A - Ordinance No. 2496
2. Attachment B - Ordinance No. 2327
ORDINANCE NO. 2496
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
MONTEBELLO, CALIFORNIA, GRANTING CRIMSON CALIFORNIA
PIPELINE, L.P., ITS SUCCESSORS AND ASSIGNS, A FRANCHISE TO
LAY AND USE PIPES AND APPURTENANCES FOR TRANSMITTING
AND DISTRIBUTING OIL OR PRODUCTS THEREOF, FOR ANY AND
ALL PURPOSES IN, UNDER, ALONG, ACROSS OR UPON THE PUBLIC
STREETS, WAYS, ALLEYS AND PLACES, AS THE SAME NOW OR
MAY HEREAFTER EXIST, WITHIN THE CITY OF MONTEBELLO
WHEREAS, the City of Montebello received a request from Crimson California Pipeline, L.P. for a franchise to lay and use pipes and appurtenances for transmitting and distributing oil or products thereof, for any and all purposes in, under, along, across, or upon the public streets, ways, alleys, and places within the City of Montebello.
WHEREAS, the City has previously granted a pipeline franchise to Crimson California Pipeline, L.P. pursuant to Ordinance No. 2327; and WHEREAS, City staff has completed a review of the existing franchise granted pursuant to Ordinance No. 2327 and has determined that, provided the franchise continues to include annual adjustments based on the Consumer Price Index (CPI), the franchise remains appropriate to continue under substantially similar terms; and WHEREAS, the City desires to ensure that all applicable CPI adjustments are calculated and agreed upon by the City and Grantee, and incorporated into the franchise fee prior to any renewal or extension of the Franchise; and WHEREAS, upon completion and agreement of such CPI adjustments, the City Council may consider approval of a franchise term of ten (10) years, with an additional ten (10) year option to extend, subject to City Council approval; and WHEREAS, the City requires that any renewal or extension of the Franchise reflect updated franchise terms, including revised compensation, for review and approval by the City Council;
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF MONTEBELLO HEREBY ORDAINS AS FOLLOWS:
ORDINANCE NO. 2496
SECTION 1. DEFINITIONS
Whenever in this ordinance the words or phrases defined in this section are used, they shall have the meanings assigned to them in the following definitions:
A. “City” shall mean the City of Montebello, a municipal corporation of the State of California, in its present incorporated form or in any later reorganized, consolidated, enlarged or reincorporated form.
B. “Administrator” shall mean the City Administrator of the City.
C. “Engineer” shall mean the City Engineer of the City, or the Engineer’s written designee.
D. “Franchise” shall mean and include the authorization by the City to transmit and distribute oil or products thereof for any and all purposes under, along, across, or upon the public streets, ways, alleys, and places in the City by means of pipes and appurtenances.
E. “Grantee” shall mean Crimson California Pipeline, L.P., a limited partnership organized and existing under, and by virtue of the laws of the State of California, and its lawful successors or assigns.
F. “Lay and Use” shall mean to lay, construct, erect, install, operate, maintain, use, repair, replace, and remove or abandon-in-place.
G. “Oil or products thereof” shall mean oil, gas, gasoline, petroleum, wet gas, hydrocarbon substances, water, waste, mud, steam, and other liquid substances not more hazardous than the aforesaid substance.
H. “Pipes and appurtenances” shall mean pipes, pipelines, traps, vaults, appliances, manholes, valves, appurtenances, and service connections necessary or convenient for the operation of said pipes or pipelines, including conduits, cathodic protection devices, wires, cables, other appurtenances, and fiber optic communications systems necessary or convenient for the exercise of the Grantee’s business in, upon, along, across, under, or over those streets of the City which are described in Exhibit “A” Attached hereto.
I. “Streets” shall mean the public streets, ways, alleys, and places within the City as the same now or may hereafter exist, and in which the City has the authority to grant a franchise.
ORDINANCE NO. 2496
SECTION 2. GRANTING CLAUSE/RIGHTS TO GRANTEE; TERM OF FRANCHISE A. The right, privilege, and franchise, subject to all of the terms and conditions contained in this ordinance and pursuant to the provisions of Division 3, Chapter 2 of the California Public Utilities Code, known as the Franchise Act of 1937, is hereby granted to Grantee, to use, or to lay and use pipes and appurtenances for transmitting and distributing oil or products thereof for any and all purposes, under, along, across, or upon the public streets within the City, as described in Exhibit “A” attached hereto.
In addition, the City also hereby grants to Grantee the right to install, operate, maintain, replace, repair, abandon in place and/or remove such scraper traps, manholes, flanges, conduits, culverts, vaults, valves, appliances, cathodic protection systems, attachments and other appurtenances (collectively hereinafter called “appurtenances”) as may be necessary or convenient for the proper maintenance and operation of the pipelines under this Franchise; provided, however, that Grantee shall first secure the requisite permits and/or approvals from City for construction or excavation.
This Franchise is granted in lieu of all other franchises for pipelines held by the Grantee, or by any successor of the Grantee, for transmitting and distributing oil or products thereof within the limits of the City, as such limits now or may hereafter exist. The acceptance of this Franchise shall operate as an abandonment of all such franchises within the limits of the City, as such limits now or may hereafter exist, in lieu of which this Franchise is granted, and as an agreement to comply with all terms and conditions hereof.
B. This Franchise shall be for a term of ten (10) years from and after the effective date of this Ordinance (hereinafter referred to as “initial term”), or until such earlier time that:
(1) It is voluntarily surrendered or abandoned by the Grantee; or (2) The State of California, or some municipal or public corporation thereunto duly authorized by law, shall purchase by voluntary agreement, or shall condemn and take under the power of eminent domain, all property actually used and useful in the exercise of this Franchise, and situated within the territorial limits of the public entity purchasing or condemning such property; or
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(3) This Franchise is forfeited for noncompliance by the Grantee with its terms and provisions.
C. Grantee shall have the option to extend this Franchise for one additional ten (10) year period, subject to approval by the City Council.
Prior to consideration of any such extension, the franchise terms shall be updated to reflect all applicable Consumer Price Index (CPI) adjustments, as calculated and agreed upon by the City and Grantee, and any revised terms, subject to review and approval by the City Council.
The parties shall commence good faith negotiations on such extension upon notification from Grantee to the City of its election to renew this Franchise, which notice shall be given no later than twelve (12) months prior to the expiration of the initial term.
SECTION 3. COMPENSATION.
Grantee shall pay to the City of Montebello the following:
A. Base Annual Free
During the term of this Franchise, Grantee shall pay to the City a base annual fee for this Franchise as set forth below, said fee to be in accordance with California Public Utilities Code, Section 6231.5, provided that said fee is subject to increase to the maximum rate established in subsequent amendments of the California Public Utilities Code. The Franchise fee shall be prorated for the remainder of the calendar year based on a 360- day year, with the first payment of the Franchise fee accruing from September 1, 2026.
Notwithstanding updated franchise terms, including revised compensation, this ordinance is intended as a continuation and extension of the prior franchise, and franchise fees shall be deemed to have accrued without interruption.
The base annual fee, subject to adjustment in accordance with paragraph B of this Section 3, is determined as follows:
(1) Pipe of eight inches or less in nominal internal diameter: the annual fee shall be twenty-nine cents ($0.29) per linear foot;
(2) Pipe greater than eight inches in nominal diameter: the annual fee shall be twentynine cents ($0.29) per linear foot for the first eight inches of nominal internal diameter, plus four cents ($0.04) per nominal internal diameter inch for each inch or fraction thereof over eight inches.
ORDINANCE NO. 2496
In the event of partial abandonment of pipelines as provided in the Ordinance, or in the event of partial removal of such pipelines by the Grantee, the payments otherwise due the City for occupancy of the streets by such pipelines shall be reduced by the length and diameter of pipeline abandoned or the actual pipeline removed, beginning with the first day of the next succeeding Franchise year, and for each Franchise year thereafter; provided, however, that the base rate shall be modified to reflect the increase (per paragraph B of this Section) applicable to such abandoned or removed pipeline at the beginning of the next succeeding Franchise year following abandonment or removal.
Said base annual fee shall be due and payable annually, during the term of the Franchise, within thirty (30) days after receipt of a written demand from the City and the filing of the report required and outlined in Paragraph C of this Section 3. Any fees charged or expenses charged to Grantee by City pursuant to this Section, or any other provision of this Ordinance, unless disputed in good faith, shall be paid when due, or shall be deemed delinquent. Any undisputed delinquent amounts shall accrue interest commencing thirty (30) days after due date, at the rate of one and one-half percent (1.5%) per month (based upon a 30-day calendar month) or any lesser amount if required by law. Any neglect, omission or refusal by said Grantee to pay any undisputed delinquent fee with any late charges, within thirty (30) days of delinquency, at the times or in the manner herein provided, shall be grounds for a declaration of a forfeiture of this Franchise and of all rights hereunder.
Payments are to be made to the Office of Treasurer, City of Montebello, or at such place as the City shall, from time to time, designate in writing. The base annual fee described herein shall be paid annually during the life of the Franchise, including the year of granting the Franchise.
B. Annual Increase
The amount of each annual payment of the base annual fee shall be subject to an increase after the first-year of the Franchise and each subsequent year during the term of this Franchise, based on the provision of California Public Utilities Code Section 6231.5, as amended.
The increase to said compensation as provided for subsequent years, shall be based on the Consumer Price Index (CPI), All Urban Consumers, for the Los Angeles-Long BeachAnaheim area (1982-84 = 100), as published by the United States Bureau of Labor Statistics, Department of Labor or Bureau of Labor Statistics for the month of September immediately preceding the month in which payment is due and payable, divided by the Consumer Price Index, All Urban Consumers, for the Los Angeles- Long Beach-Anaheim area, for the month of September 2002, which equals 183.4. If the index is discontinued or revised during the term of this Franchise, such other governmental price index or
ORDINANCE NO. 2496
computation with which it is replaced, chosen by the City, shall be used in order to obtain substantially the same result as would be obtained if the Index had not been discontinued or revised.
The Engineer shall determine the adjustment in CPI in accordance with this paragraph and provide the Grantee with the correct schedule prior to December 1 preceding the month of January in which payment shall be due and payable. All CPI adjustments shall be calculated and agreed upon by the City and Grantee prior to the implementation of any renewal or extension of this Franchise.
In no event shall the adjusted franchise fee be less than the fee in effect for the immediately preceding year. The Parties acknowledge that the franchise fee is derived from a statutory base rate and that any CPI adjustment modifies, but does not replace, such base rate.
C. Reports Required
The Grantee shall file with the City Clerk and Director of Finance, within three months after the expiration of the calendar year, or fractional calendar year, following the date of the granting of this Franchise and within three months after the expiration of each calendar year thereafter, two copies of a report duly verified by the oath of the Grantee or by the oath of a duly authorized representative of the Grantee, showing for the immediately preceding franchise period:
1. The length of pipelines in lineal feet covered by this Franchise;
2. The nominal internal diameter of such pipelines expressed in inches;
3. The rate per foot per year; and
4. The total amount due the City.
SECTION 4. RIGHTS OF THE CITY.
A. This Franchise granted hereunder shall not in any manner or to any extent impair or affect any right of the City to acquire the property of the Grantee, either by purchase or through the exercise of the right of eminent domain, subject to Grantee’s rights, remedies and defenses thereto, and nothing herein contained shall be construed to contract away, or to modify or to abridge, either for a term or in perpetuity, the City’s right of eminent domain in respect to the Grantee, nor shall this Franchise be given of any value before any court or other public authority in any proceeding of any character in excess of the necessary publication costs and
ORDINANCE NO. 2496
any other sums paid by Grantee to the City at the time of the acquisition of this Franchise.
B. In connection with any change in grade, alignment, or width of any public street, way, alley, or place, or the construction of any subway or viaduct, or any other street improvement of any kind by the City, Grantee shall, at the request of the City and at Grantee’s sole cost and expense, comply with all of the following provisions, as applicable:
(1) Within ninety (90) days after receipt by Grantee of a notice in writing from the City that work is to be done pursuant to any reserved right and specifying the general nature of the work and the area in which the same is to be performed, the Grantee shall commence to do all things necessary to protect and support its franchise property during the progress of such work. If so ordered by the City, Grantee shall disconnect, remove, or relocate those pipes and appurtenances installed, used, and maintained within the street to such extent, in such manner, and for such period as shall be necessary to permit the performance of such work in an economical manner, and to permit the maintenance, operation, and use of such street improvement. (2) Grantee shall pay the City the full amount of any increase in cost for the construction, installation or repair of any bridge, or any artificial support in or underlying any street in which any pipes or appurtenances of the Grantee are located, if such increase in cost is required in order to provide for the installation, maintenance or operation of Grantee’s pipes or appurtenances in or on the street area which the bridge or other artificial support covers or underlies.
(3) Grantee shall cooperate with the City to take all actions reasonably necessary in order to accomplish the completion of any City street improvement project within a reasonable period of time. After receipt by Grantee of a notice in writing from the City that work is to be done, the Grantee shall diligently prosecute such work to completion.
In the decision process necessary to determine if Grantee's pipelines and/or appurtenances thereto, are required to be relocated, the City shall also consider all known future projects that, if done separately, may cause multiple relocation of the pipelines and/or appurtenances. If such known future projects can be identified, full consideration of concurrent projects shall be given by City. If the City requires the relocation within the public street, way, alley or place more than once within a period of ten (10) years, the City shall pay the cost of the second and all subsequent relocations within such ten (10) year period.
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Prior to the commencement of any rearrangement of pipelines which Grantee is required to make hereunder, the Grantee shall be given not less than ninety (90) days written notice, which notice shall specify the time that work is to be accomplished. In the event that the City shall change the planned rearrangement of pipelines, or the notice given to Grantee, the Grantee shall be given an additional period of not less than sixty (60) days to accomplish such work.
Except as provided herein in the paragraphs above, when City requires a rearrangement, and such rearrangement is done for the accommodation of any person, firm, corporation or public agency other than the City, the cost of such rearrangement shall be borne by the accommodated party. Such accommodated party, in advance of such rearrangement, shall (a) deposit with the Grantee either cash or a corporate surety bond in an amount, as in the reasonable discretion of the Grantee, to pay the costs of such rearrangement, and (b) execute an instrument agreeing to indemnify, defend and hold harmless Grantee from any and all damages or claims caused by such rearrangement. This provision shall not be construed to require Grantee to rearrange facilities. Any accommodation for rearrangement of Grantee's facilities shall be made at the sole discretion of Grantee.
Nothing in this Franchise contained herein shall be construed to require the City to move, alter, or relocate any of its pipelines upon said streets at its own expense, for the convenience, accommodation or necessity of any other public utility, person, firm or corporation, now or hereafter owning a public utility system of any type or nature, or to move, alter, or relocate any part of its pipelines upon said streets for the convenience, accommodation or necessity of the Grantee.
SECTION 5. OTHER OBLIGATIONS OF GRANTEE; INDEMNIFICATION; INSURANCE.
The Grantee of this Franchise shall comply with all of the following provisions:
A. Within sixty (60) days after the City Council adopts and passes the ordinance granting this Franchise, Grantee shall file with the Engineer improvement plans relating to all facilities located within the City of Montebello, and a map or maps showing the location, length, and size of all such facilities which have been installed, relocated, removed, or abandoned.
B. Within six (6) months after the installation or any new pipelines under this Franchise, Grantee shall file with the Engineer an “as built” map or maps showing the location, length, and size of all pipelines so installed.
C. Grantee shall construct, install, and maintain all pipes and appurtenances in a good and workmanlike manner, and of good materials, and operate in conformity with all applicable ordinances, rules, and regulations heretofore or hereafter adopted by the legislative body of the city, the governing State, and
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Federal agencies having jurisdiction, including but not limited to, the State of California Office of State Fire Marshall (Pipeline Safety Division) and the U.S.
Department of Transportation, and all applicable requirements concerning pipeline design, construction, testing, maintenance surveillance and operation of utility gathering, transmission and distributing pipeline systems. In case of public utilities subject to the jurisdiction of the Public Utilities Commission of the State of California, the rules, regulations and orders of the Public Utilities Commission of the State of California, the rules, regulations and orders of the Public Utilities Commission shall govern whenever any conflict may exist between them and the applicable ordinances, codes, rules, and regulations adopted or prescribed by the City. The Grantee shall obtain and maintain a permit from the California Office of the State Fire Marshal (OSFM) to construct, install, use, operate, repair, or modify facilities or pipelines within facilities of flammable or combustible liquids.
D. Grantee shall pay to the City, on demand, the cost of all repairs to public property made necessary by any operations of the Grantee under this Franchise, provided Grantee fails to make such repairs after notice and reasonable opportunity to complete such repairs.
E. Grantee shall indemnify, defend and hold harmless the City, its elected officials, officers, agents and employees, from and against any and all claims, losses, Iiabilities, damages, demands, actions, judgments, causes of action, assessments, penalties, costs and expenses (including, without limitation, reasonable fees of legal counsel, expert witnesses and accountants) arising out of or resulting from Grantee's operations under this Franchise, and for all damages resulting from the failure of Grantee to faithfully observe and perform each and every provision of this Franchise and of Division 3, Chapter 2 of the California Public Utilities Code. Grantee shall be solely responsible for complying with all laws, regulations, and other orders which are applicable to the installation, repair, relocation, or removal of its facilities, whether federal, state, or local. City's approval of such installation, repair, relocation, or removal shall not be deemed to relieve Grantee of any liability Grantee may have for contaminated soils or other environmental liability attributable to or arising from Grantee's pipes, appurtenances, and other facilities. Grantee acknowledges that the City has no obligation or responsibility for conducting or accomplishing any such installation, repair, relocation or removal, or for compliance with any laws, regulations, or orders applicable thereto, and Grantee agrees that the City shall not be liable or responsible in any manner for any loss, claim, or damage, including environmental damage, attributable to or arising out of Grantee's activities involved in the installation, repair, relocation or removal of Grantee's pipes, appurtenances and other facilities. Any fee paid by Grantee pursuant to this Franchise shall in no way limit Grantee's obligation to
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compensate City for any damage, claim, expense, or loss whatsoever, as set forth in this paragraph.
F. Grantee shall, at Grantee's sole cost and expense, keep or cause to be kept in full force and effect, for the mutual benefit of City and Grantee, a comprehensive form of general liability insurance against claims and liability for personal injury, death or property damage arising from the use, construction, maintenance or operation of the Franchise, of at least Two Million Dollars ($2,000,000.00) for any one accident, in ident or occurrence, and at least One Million Dollars ($1,000,000.00) for property damage.
All insurance required by express provisions of this Ordinance and Franchise shall be carried only with responsible insurance companies licensed to do business in the State of California. All such policies shall contain language to the effect that (1) the insurer waives the right of subrogation against City and City’s agents and representatives, (2) the policies are primary and noncontributing with any insurance that may be carried by City, and (3) the policies cannot be cancelled or materially changed without thirty (30) days written notice to the City by insurer. Grantee shall furnish City with copies of all such policies promptly upon receipt of them, or endorsements evidencing the insurance. For commencement of the Franchise, Grantee shall furnish City with binders representing all insurance required by this Ordinance. Grantee may effect, for its own account, any insurance not required under this ordinance. All insurance policies for property damage and personal injury required by this Ordinance and Franchise shall be issued to Grantee and shall name the City as additional insured.
Grantee shall deliver to City, in the manner provided for notices, copies, or endorsements of all insurance policies required by this Ordinance, within the following time limits:
(1) For insurance required at the commencement of this Ordinance, within thirty (30) days after this Ordinance becomes effective; (2) For insurance becoming required at a later date, at least ten (10) days before the requirement becomes effective, or as soon thereafter as the requirement, if new, becomes effective; and
(3) For any renewal or replacement of a policy already in existence, at least twenty (20) days after expiration or other termination of the existing policy.
If Grantee fails or refuses to procure or maintain insurance as required by this Ordinance or fails or refuses to furnish City with required proof that the insurance has been procured
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and is in force and paid for, City shall have the right, at City's election with ten (10) days written notice, to declare this Franchise in default.
SECTION 6. ASSIGNABILITY.
Grantee may not sell, transfer or assign this Franchise or any interest therein directly or indirectly, or any of the rights or privileges hereby granted, without the written consent of City, said consent to not be unreasonably withheld. Notwithstanding the above statement, Grantee may transfer or assign this Franchise to any parent, subsidiary or affiliate without obtaining the consent of City, provided Grantee provides written notification within thirty (30) days of said transfer or assign and submits written evidence of the same, including a certification executed by a duly authorized officer of the Grantee. Upon compliance with the foregoing, this Franchise shall be binding on the successors and assigns of the parties hereto, and shall insure to the benefit of the successors and assigns of the parties hereto.
SECTION 7. EXCAVATIONS.
A. The Grantee shall obtain an excavation permit, and pay the applicable fee therefore, prior to commencing any excavation in any street or public right-of-way, or before disturbing the earth beneath the surface of the street, except in the case of an emergency. The Grantee may obtain an excavation permit by filing a set of excavation plans or drawings with the Engineer, which plans shall be subject to the Engineer's review and approval. The excavation plans shall show the location of the proposed excavation, as well as the location of all existing pipes, sewers, conduits, improvements and other facilities in or under any Street or public property in which the Franchise property is located or proposed to be located. Thereafter, Grantee shall enter an 811 DigAlert ticket and comply with its requirements. To the extent that existing pipes, sewers, conduits, improvements, and other facilities of third parties require a modification to Grantee’s proposed excavation plans, Grantee will submit modified plans to the City. The excavation plans shall also contain an adequate description of the proposed work including an estimate of the duration of interference with any street traffic. Prior to the issuance of any excavation permit for the construction or installation of a pipeline for the transmission of flammable or combustible liquids, gases or hazardous materials, a permit shall be obtained from the California Office of the State Fire Marshal. If the proposed location of the excavation does not, or will not, unreasonably interfere with the use of the Streets by the City, and complies with all applicable laws, the Engineer shall approve the same, and issue permit(s) therefore.
B. Where it is necessary to lay any underground pipes through, under or across any portion of a paved or macadamized street, such work, where practicable and economically feasible, shall be done by a tunnel or bore so as not to disturb the foundation of such paved or macadamized street. If the same cannot be done, or if it is necessary to cut the street in order to access existing pipes and
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appurtenances, such work shall be done pursuant to an excavation permit, as provided in paragraph A above, to be issued by the Engineer upon application therefore.
C. All work shall be subject to inspection by the Engineer. All street coverings or openings, valves, vaults and manholes shall at all times be kept flush with the surface of the streets; provided, however, that vents for underground vaults and manholes as well as cathodic protection devices, including pole-mounted rectifiers may, subject to the prior approval of the Engineer, extend above the surface of the streets when such vents and cathodic protection devices, including pole-mounted rectifiers, are located in parkways, between the curb and the property line. The Grantee shall provide adequate traffic safety barriers, signs, devices, and traffic safety warning equipment in accordance with City ordinances, rules, or regulations, and shall comply with such additional safety measures as the Engineer may direct.
D. In emergencies, Grantee may commence excavation of streets without prior permit; provided, however, Grantee acts in a reasonable and diligent manner as soon as practicable after said emergency to obtain a permit authorizing such work.
E. Grantee acknowledges that the City’s records may not be able to complete and that pipes and appurtenances previously unknown to the City are frequently discovered. Consequently, by granting this Franchise or by approving any excavation permit requested by Grantee, the City does not warrant the accuracy of information supplied to the Grantee by the City regarding the location or existence of other facilities. Nothing herein shall be deemed to make the City, or any officer, agent or employee of the City, responsible or liable to the Grantee or to any other person by virtue of the City’s approval of excavation permit plans, regardless of whether any information is supplied by the City to the Grantee pertaining to the location of existing pipes, facilities or other improvements on, in or under any street or other public property.
SECTION 8. GRANTEE’S EMERGENCY RESPONSE PLAN; PIPELINE ACCIDENTS.
A. The Grantee shall develop and maintain an emergency response plan. In general, an emergency response plan meeting the requirements of Federal and State Law and containing the information contained in this section shall be acceptable. Proof of arrangements capable of providing emergency response services, including but not limited to traffic control, street excavation pipeline repair, supplies, and services as necessary, must meet the requirements of the federal and state governing agencies, including the Pipeline and Hazardous Materials Safety Administration, and the California Department of Fish and Wildlife. Any changes in or revisions to Grantee’s emergency response plan shall be submitted to the Engineer on the first working day of the subsequent calendar year.
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B. Whenever any pipeline or appurtenance breaks or leaks so as to cause the release of oil or products thereof into the public right-of-way, Grantee, and any other person using or controlling the pipeline or appurtenance, shall notify the California Governor’s Office of Emergency Services and the National Response Center of the U.S. Environmental Protection Agency pursuant to state and federal regulatory requirements and shall implement precautionary safety measures including traffic control, system shutdown, and valve closures. In the event of an emergency that threatens life, health, safety, or property, and where it is not possible to obtain an excavation permit prior to commencement of the work, the Grantee may commence such work; provided, however, that within seventy-two (72) hours thereafter the Grantee shall make application to the Engineer for an excavation permit in accordance with the procedures specified herein. The Engineer may impose conditions upon the issuance of the excavation permit, and all work shall be subject to inspection. Adequate traffic safety barriers shall be maintained at all times, and any damaged portion of the street shall be restored to at least the condition that existed immediately prior to the damage.
C. If any portion of the any City street is damaged by reason of defects, breaks or leaks in any of the pipes and appurtenances maintained or constructed by Grantee, or by reason of any other cause attributable to or arising from the operation of any pipes and appurtenances constructed or maintained by Grantee, the Grantee shall, at its sole cost and expense, immediately repair all damage and restore the street to the condition existing before such damage occurred. All such work shall be done under the direction of the Engineer and to the reasonable satisfaction of the City codes. Grantee shall repair such damage and restore the street within a reasonable period of time after written demand therefore by the Engineer.
If the Grantee, after reasonable notice, fails or refuses to pave, surface, grade, repave, resurface, or regrade any damaged street as required by the provisions of this Franchise, the City may cause the work to be done and shall keep an itemized account of all costs incurred. The Grantee agrees to, and shall, reimburse the City for all such costs, including reasonable administrative overhead expenses, within thirty (30) days after presentation to Grantee of an itemized account of such costs.
SECTION 9. ABANDONMENT.
Should Grantee elect to abandon all or any part of the pipes and appurtenances which encompass this Franchise, such abandonment shall be accomplished by Grantee as required by the State of California Pipeline Safety Act, or other governing State or Federal laws or statutes. Grantee shall not owe the City any compensation for the privilege of said abandonment. The ownership of all franchised property so abandoned in place as defined as a regulatory abandonment and for which Franchisee ceases to maintain all or any part
ORDINANCE NO. 2496
of the Pipes and appurtenances, disclaims any responsibility for them, or otherwise fails to comply with its continuing obligations with respect to such abandoned facilities, title thereto shall immediately vest in the City.
SECTION 10. DEFAULT.
A. Effect of Default
In the event that the Grantee shall default in the performance of any of the terms, covenants and conditions herein, and such default is curable, the City may give written notice to Grantee of such default. In the event that the Grantee does not without good cause commence the work necessary to cure such default within sixty (60) days after such notice is sent or prosecute such work diligently to completion, the City may declare this Franchise forfeited. Upon giving written notice thereof to Grantee, this Franchise shall be void, and the rights of the Grantee hereunder shall terminate, and the Grantee shall execute an instrument of surrender and deliver same to City. ln the event of noncompliance by the Grantee with any of the conditions hereof, the City may, in addition to all other remedies provided for herein, bring suit for the forfeiture or termination of this Franchise.
B. Force Majeure
ln the event Grantee is unable to perform any of the terms of this Franchise by reason of strikes, riots, acts of God, acts of public enemies, or other such causes beyond its control, it shall not be deemed to be in default or have forfeited its rights hereunder, if it shall commence and prosecute such performance with reasonable promptness, as soon as possible to do so.
C. Cumulative Remedies
No provision herein made for the purpose of securing the enforcement of the terms and conditions of this Franchise shall be deemed an exclusive remedy, or to afford the exclusive procedure, for the enforcement of said terms and conditions, but the remedies and procedures herein provided, in addition to those provided by law, shall be deemed to be cumulative.
SECTION 11. DISPUTE RESOLUTION.
If a dispute arises between the parties relating to this Franchise, the parties agree to use the following procedure prior to either party pursuing other available legal remedies. A meeting shall be held promptly between the parties, attended by individuals with decisionmaking authority regarding the dispute, to attempt in good faith to negotiate a resolution of the dispute. If, within thirty (30) days after such meeting the parties have not succeeded in negotiating a resolution of the dispute, they agree to submit the dispute to mediation.
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City and Grantee shall equally advance a proportionate share of the costs of mediation.
The parties shall jointly appoint a mutually acceptable mediator within thirty (30) days from the conclusion of the negotiation period. The parties agree to participate in good faith in the mediation and negotiations related thereto, for a period of sixty (60) days. Any decision of the mediator shall be supported by written findings of facts and conclusions of law. If the parties are not successful in resolving the dispute through the mediation, the matter may be submitted to a court of law. If any action at law or in equity is brought, the prevailing party in such litigation shall be entitled to an award of reasonable attorneys' fees in addition to any other relief to which it may be entitled.
SECTION 12. NOTICE.
Any notice required to be given under the terms of this Franchise, the manner of service of which is not specifically provided for here, may be served to the following identified addresses, or to such other address as may from time to time be furnished in writing by one party to the other, and by depositing said notice in the United States mail, postage prepaid. When the services of any such notice is made by mail, the time such notice shall begin with and run from, is the date of deposit of the same in the United States mail.
Upon City: City of Montebello
Joseph Palolmbi
Director of Planning & Community Development
1600 W. Beverly Blvd.
Montebello, CA 90640
Upon Grantee: Crimson California Pipeline, L.P.
370 17th Street, Suite 3100
Denver, CO 80202
With a copy to:
Crimson California Pipeline, L.P.
Attn: Land and Right of Way Manager
1900 Main Street, Suite 600
Irvine, CA 92614
SECTION 13. GRANTEE’S ACCEPTANCE OF FRANCHISE.
Except as otherwise stated herein, Grantee shall, within thirty (30) days after passage and adoption of this ordinance granting the Franchise, file with the officers of the City designated herein the following instruments or documents:
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A. File with the City Clerks Grantee’s written acceptance of the terms and conditions of this ordinance.
B. File with City Clerk certified copies of the policies of liability insurance and workers’ compensation insurance, or, in lieu thereof, certificates evidencing such insurance, which policies shall be in accordance with the terms and conditions of this ordinance. Notwithstanding anything to the contrary, Grantee may provide a program of self-insurance, provided it can demonstrate that it has a new worth of Ten Million Dollars ($10,000,000.00) within the preceding year. The City, at its sole discretion, may allow Grantee to self-insure, provided the self-insurance program complies with the provisions and specified limits contained herein, and is approved by the City Administrator and City Attorney.
C. File with the City Clerk, within ten (10) business days after the City Council adopts and passes the ordinance granting this Franchise, keep on file with the City Clerk a bond issued by an admitted surety insurer, and in a form approved by the City Attorney, in the penal sum of One Hundred Thousand Dollars ($100,000.00), conditioned upon that the Grantee shall well and truly observe, fulfill, and perform each condition of the Franchise and that, in case of any breach of condition of the bond, the whole amount of the penal sum therein specified shall be recoverable from the principal and surety upon said bond. If said bone is not filed, or if it does not receive the approval of the City Attorney, the Franchise may be revoked or forfeited, and any money paid to the City in connection therewith shall be retained by the City.
SECTION 14. REIMBURSEMENT FOR CITY’S POSTING AND PUBLICATION EXPENSES.
The Grantee shall pay to the City a sum of money sufficient to reimburse the City for all posting and publication expenses incurred in connection with the granting of this Franchise. Such payment shall be made by Grantee within thirty (30) days after the City provides to the Grantee a written statement of such expenses.
SECTION 15. MISCELLANEOUS PROVISIONS.
A. Captions. The Captions here are for convenience and reference only, and are not part of this Franchise, and do not in any way limit, define, or amplify the terms and provisions hereof.
B. Severability. If any section, subsection, sentence, clause, phrase, or portion of this Franchise is for any reason held to be invalid or unconstitutional by the decisions of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Franchise.
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C. Governing Law. This Franchise has been made and shall be construed and interpreted in accordance with the laws of the State of California.
D. Integration. This ordinance integrates all terms and conditions in connection with the Franchise, and supersedes all negotiations and prior understandings, either oral or in writing. This Franchise shall not be modified unless in writing and duly approved by each of the parties.
E. Execution. The Mayor of this City shall approve and sign and the City Clerk shall attest to the passage of this ordinance. This Ordinance shall take effect thirty (30) days from the date of its adoption, and prior to the expiration of fifteen (15) days from the adoption hereof, the City Clerk, pursuant to Government Code Section 36933(c)(1}, shall cause a summary of this Ordinance to be published in a local newspaper, along with the record of the vote for approval and adoption, and shall post a certified copy of the full text of this Ordinance, along with the record of the vote thereon. Once this Franchise becomes effective, it shall be deemed to be applicable as of September 1, 2026.
SECTION 16. The City Clerk shall attest and certify to the passage and adoption of this ordinance, which shall take effect thirty (30) days after the date of its adoption, and shall cause the same to be published as required by law.
PASSED, APPROVED, AND ADOPTED 24th DAY OF JUNE 2026.
_______________________________
Georgina Tamayo, Mayor
ATTEST:
_______________________________
Christopher Jimenez, City Clerk
ORDINANCE NO. 2496
APPROVED AS TO FORM:
_______________________________
Arnold M. Alvarez-Glasman, City Attorney
I HEREBY CERTIFY that the foregoing Ordinance was introduced at the regular meeting of the City Council on the 24th day of June, 2026, and was adopted by the City Council of the City of Montebello at its meeting held on the 24th day of June, 2026 by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
_______________________________
Christopher Jimenez, City Clerk
ORDINANCE NO. 232 7
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF MONTEBELLO GRANTING TO CRIMSON CALIFORNIA PIPELINE L. P., ITS SUCCESSORS AND ASSIGNS, A FRANCHISE TO LAY AN3 USE PIPES AND APPURTENANCES FOR TRANSMITTING AND
DISTRIBUTING OIL OR PRODUCTS THEREOF, FOR ANY AND ALL PURPOSES IN,
UNDER, ALONG, ACROSS OR UPON THE PUBLIC STREETS, WAYS, ALLEYS AND
PLACES, AS THE SAME NOW OR MAY HEREAFTER EXIST, WITHIN THE CITY OF MONTEBELL .
WHER AS, the City of Montebello received a request from Crimson California Pipeline L. P. for a franc iise to lay and use pipes and appurtenances for transmitting and distributing oil or products the eof, for any and all purposes in, under, along, across or upon the public streets, ways, alleys an J places within the City of Montebello.
WHER AS, Union Oil Company had a twenty- five year pipeline franchise in the City of Montebello tha expired in 1996. Tosco Corporation purchased Union Oil Company and was granted a Fran hise by the City of Montebello. Recently, Crimson California Pipeline L. P. acquired said ipelines from Tosco Corporation, and seeks to be granted by the City, a franchise for to 1 ( 10) years, for the same pipelines.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MONTEBELLO DOES HEREBY ORDAIN ASFOLLOW:
SECTION 1. Definitions
Whenever in this ordinance the words or phrases defined in this section are used, they shall have the meani igs assigned to them in the following definitions:
A. " City' shall mean the City of Montebello, a municipal corporation of the State of California, in its present incorporated form or in any later reorganized, consolidated, enlarged or reincorporated form.
B. " Administrator' shall mean the City Administrator of the City.
C. ' En ineer' shall mean the City Engineer of the City, or the Engineer' s written D. 1r, chise" shall mean and include the authorization by the City to transmit and dist ibuta oil or products thereof for any and all purposes under, along, across or up n the public streets, ways, alleys and places in the City by means of pipes and E. " Gral shall mean Crimson California Pipeline L. P., a corporation organized and existing under, and by virtue of the laws of the State of California, and its lawful suc essors or assigns.
F. " Lay and use" shall mean to lay, construct, erect, install, operate, maintain, use, repair, replace, or remove.
G. " Oil or products thereof' shall mean oil, gas, gasoline, petroleum, wet gas, hydrocarbon substances, water, waste water, mud, steam and other liquid substances not more hazardous than the aforesaid substances.
H. " Pipes and appurtenances" shall mean pipes, pipelines, manholes, values, appurtenances and service connections necessary or convenient for the operation of said pipes or pipelines, including conduits, cathodic protection devices, wires, cables, other appurtenances and fiber optic communications systems necessary or convenient for the exercise of the Grantee' s business in, upon, along, across, under or over those streets of the City which are described in Exhibit " A" Attached hereto.
Str ets" shall mean the public streets, ways, alleys and places within the City as thesame now or may hereafter exist, and in which the City has the authority to qra t a franchise.
SECTION 2 Granting Clause/ Rights to Grantee; Term of Franchise A. The right, privilege and franchise, subject to all of the terms and conditions contained in this ordinance and pursuant to the provisions of Division 3, Chapter 2 of the California Public Utilities Code, known as the Franchise Act of 1937, is hereby granted to Grantee, to use, or to lay and use pipes and appurtenances for transmitting and
distributing oil or products thereof for any and all purposes, under, along, across or upon the public streets within the City, as described in Exhibit " A" attached hereto.
In addition, the City also hereby grants to Grantee the right to install, operate, maintain, replace, repair, abandon in place and/ or remove such scraper traps, manholes, flanges, conduits, culverts, vaults, valves, appliances, cathodic protection systems, attachments and other appurtenances ( collectively hereinafter called " appurtenances") as may be necessary or convenient for the proper maintenance and operation of the pipelines under this Franchise; provided, however, that Grantee shall first secure the requisite permits and/ or approvals from City for construction or excavation.
This Franchise is granted in lieu of all other franchises for pipelines held by the Grantee, or by any successor of the Grantee, for transmitting and distributing oil or products thereof within the limits of the City, as such limits now or may hereafter exist.
The acceptance of this franchise shall operate as an abandonment of all such franchises within the limits of the City, as such limits now or may hereafter exist, in lieu of which this franchise is granted, and as an agreement to comply with all terms and conditions hereof.
B. This Franchise shall be for a term of ten ( 10) years from and after the effective date of this Ordinance ( hereinafter referred to as " initial term"), or until such earlier time that:
1) It is voluntarily surrendered or abandoned by the Grantee; or 2) The State of California, or some municipal or public corporation thereunto duly authorized by law, shall purchase by voluntary agreement, or shall condemn and take under the power of eminent domain, all property actually used and useful in the exercise of this franchise, and situated within the territorial limits of the public entity purchasing or condemning such property; or
3) This franchise is forfeited for noncompliance by the Grantee with its terms and provisions.
C. Grantee shall further have an option to extend this Franchise for an additional ten ( 10) year period of time, prior to the end of the initial term of this Franchise, upon written approval by the City. The parties shall commence good faith negotiations on such extension upon notification from Grantee to the City of its election to renew this Franchise, which notice shall be given no later than twelve ( 12) months prior to the expiration of the initial term.
SECTION 3. Compensation
Grantee shall pay to the City of Montebello the following:
A. Base Annual Fee
During the term of this Franchise, Grantee shall pay to the City a base annual fee for this Franchise as set forth below, said fee to be in accordance with California Public Utilities Code, Section 6231. 5, provided that said fee is subject to increase to the maximum rate established in subsequent amendments of the California Public Utilities Code. The Franchise fee shall be prorated for the remainder of the calendar year based on a 360 -day year, with the first payment of the Franchise fee accruing from September 1, 2008.
The base annual fee, subject to adjustment in accordance with paragraph B of this Section 3, is determined as follows:
1) Pipe of eight inches or less in nominal internal diameter: the annual fee shall be twenty- nine cents ($ 0.29) per linear foot;
2) Pipe greater than eight inches in nominal diameter: the annual fee shall be twenty- nine cents ($ 0. 29) per linear foot for the first eight inches of nominal internal diameter, plus four cents ($ 0. 04) per nominal internal diameter inch for each inch or fraction thereof over eight inches.
In the event of partial abandonment of pipelines as provided in the Ordinance, or in the event of partial removal of such pipelines by the Grantee, the payments otherwise due the City for occupancy of the streets by such pipelines shall be reduced by the length and diameter of pipeline abandoned or the actual pipeline removed, beginning with the first day of the next succeeding Franchise year, and for each franchise year thereafter; provided, however, that the base rate shall be modified to reflect the increase ( per paragraph B of this Section) applicable to
such abandoned or removed pipeline at the beginning of the next succeeding Franchise year following abandonment or removal.
Said base ann jal fee shall be due and payable annually, during the term of the franchise, within thirty ( 30) day after receipt of written demand from the City and the filing of the report required and outlined in Paragraph C of this Section 3. Any fees charged or expenses charged to Grantee by Cty pursuant to this Section, or any other provision of this Ordinance, unless disputed in good faith, shall be paid when due, or shall be deemed delinquent. Any undisputed delinquent amounts shall accrue interest commencing thirty ( 30) days after the due date, at the rate of one and one- half percent ( 1. 5%) per month ( based upon a 30 -day calendar month) or any lesser amount if required by law. Any neglect, omission or refusal by said Grantee to pay any undisputed delinquent fee with any late charges, within thirty ( 30) days of delinquency, at the times or in the manner herein provided, shall be grounds for a declaration of a forfeiture of this Franchise and of all rights hereunder.
Payments are to be made to the Office of Treasurer, City of Montebello, or at such place as the City shall, frotime to time, designate in writing. The base annual fee described herein shall be paid annus ly during the life of the franchise, including the year of granting the franchise.
A
The amount ol each annual payment of the base annual fee shall be subject to an increase after the first year Of the Franchise and each subsequent year during the term of this Franchise, based on the provision of California Public Utilities Code Section 6231. 5, as amended.
The increase o said compensation as provided for subsequent years, shall be based on the Consumer Pri a Index ( CPI), All Urban Consumers, for the Los Angeles -Anaheim -Riverside area ( 1982- 84 = 100), as published by the United States Bureau of Labor Statistics, Department of Labor, for ft e month of September immediately preceding the month in which payment is due and payable, divided by the Consumer Price Index, All Urban Consumers, for the Los Angeles - Anaheim -Rive side area, for the month of September 2002, which equals 183. 4. If the index is discontinued c r revised during the term of this Franchise, such other governmental price index or computation with which it is replaced chosen by the City shall be used in order to obtain substantially Me same result as would be obtained if the Index had not been discontinued or revised.
The Engineer shall determine the adjustment in CPI in accordance with this paragraph and provide the Gantes with the correct schedule prior to December 1 preceding the month of January in whi h payment shall be due and payable.
C. 196Dorts Reauired
The Grantee shall file with the City Clerk and Director of Finance, within three months after the expiration of the calendar year, or fractional calendar year, following the date of the granting of this Franchise and within three months after the expiration of each calendar year thereafter, two copies of a report duly verified by the oath of the Grantee or by the oath of a duly authorized representative of the Grantee, showing for the immediately preceding franchise period:
1. The length of pipelines in lineal feet covered by this Franchise;
2. The nominal internal diameter of such pipelines expressed in inches;
3. The rate per foot per year; and
4. The total amount due the City.
SECTION 4. Rights of the City
A. Tt is Franchise granted hereunder shall not in any manner or to any extent impair or of ect any right of the City to acquire the property of the Grantee, either by purchase or through the exercise of the right of eminent domain, subject to Grantee' s rights, re nedies and defenses thereto, and nothing herein contained shall be construed to cc ntract away, or to modify or to abridge, either for a term or in perpetuity, the City' s richt of eminent domain in respect to the Grantee, nor shall this franchise be given a y value before any court or other public authority in any proceeding of any ch racter in excess of the necessary publication costs and any other sums paid by G antee to the City at the time of the acquisition of this franchise.
B. Inconnection with any change in grade, alignment or width of any public street, way, alley or place, or the construction of any subway or viaduct, or any other street improvement of any kind by the City, Grantee shall, at the request of the City and at
Grantee' s sole cost and expense, comply with all of the following provisions, as applicable:
1) Within ninety ( 90) days after receipt by Grantee of a notice in writing from the City that work is to be done pursuant to any reserved right and specifying the general nature of the work and the area in which the same is to be performed, the Grantee shall commence to do all things necessary to protect and support its franchise property during the progress of such work. If so ordered by the City, Grantee shall disconnect, remove or relocate those pipes and appurtenances installed, used and maintained within the street to such extent, in such manner, and for such period as shall be necessary to permit the performance of such work in an economical manner, and to permit the maintenance, operation and use of such street improvement. 2) Grantee shall pay the City the full amount of any increase in cost for the construction, installation or repair of any bridge, or any artificial support in or underlying any street in which any pipes or appurtenances of the Grantee are located, if such increase in cost is required in order to provide for the installation, maintenance or operation of Grantee' s pipes or appurtenances in or on the street area which the bridge or other artificial support covers or underlies.
3) Grantee shall cooperate with the City to take all actions reasonably necessary in order to accomplish the completion of any City street improvement project within a reasonable period of time. After receipt by Grantee of a notice in writing from the City that work is to be done, the Grantee shall diligently prosecute such work to completion.
In the decision process necessary to determine if Grantee' s pipelines and/ or appurtenances thereto, are required to be relocated, the City shall also consider all known future projects that, if done separately, may cause multiple relocation of the pipelines and/ or appurtenances. If such known future projects can be identified, full consideration of concurrent projects shall be given by City. If the City requires the relocation within the public street, way, alley or place more than once within a period of ten ( 10) years, the City shall pay the cost of the second and all subsequent relocations within such ten ( 10) year period.
Prior to the commencement of any rearrangement of pipelines which Grantee is required to make hereunder, the Grantee shall be given not less than ninety ( 90) days written notice, which notice shall specify the time that work is to be accomplished. In the event that the City shall change the planned rearrangement of pipelines, or the notice given to Grantee, the Grantee shall be given an additional period of not less than sixty ( 60) days to accomplish such work.
Except as provided herein in the paragraphs above, when City requires a rearrangement, and such rearrangement is done for the accommodation of any person, firm, corporation or public agency other than the City, the cost of such rearrangement shall be borne by the accommodated party. Such accommodated party, in advance of such rearrangement, shall ( a) deposit with the Grantee either cash or a corporate surety bond in an amount, as in the reasonable discretion of the Grantee, to pay the costs of such rearrangement, and ( b) execute an instrument agreeing to indemnify, defend and hold harmless Grantee from any and all damages or claims caused by such rearrangement. This provision shall not be construed to require Grantee to rearrange facilities. Any accommodation for rearrangement of Grantee' s facilities shall be made at the sole discretion of Grantee.
Nothing in this Franchise contained herein shall be construed to require the City to move, alter, or relocate any of its pipelines upon said streets at its own expense, for the convenience, accommodation or necessity of any other public utility, person, firm or corporation, now or hereafter owning a public utility system of any type or nature, or to move, alter, or relocate any part of its pipelines upon said streets for the convenience, accommodation or necessity of the G rantee.
SECTION 6. Other obligations of Grantee; Indemnification; Insurance The Grantee of this franchise shall comply with all of the following provisions:
A. Within sixty ( 60) days after the City Council adopts and passes the ordinance granting this franchise, Grantee shall file with the Engineer improvement plans relating to all facilities located within the City of Montebello, and a map or maps showing the location, length and size of all such facilities which have been installed, relocated, removed or abandoned.
rd
B. W thin six ( 6) months after the installation or any new pipelines under this franchise, Grantee shall file with the Engineer an " as built" map or maps showing the location, length and size of all pipelines so installed.
C. Grantee shall construct, install and maintain all pipes and appurtenances in a good a d workmanlike manner, and of good materials, and operate in conformity with all applicable ordinances, rules and regulations heretofore or hereafter adopted by the Is 3islative body of the city, the governing State and Federal agencies having ju isdiction, including but not limited to, the State of California Office of State Fire Marshall ( Pipeline Safety Division) and the U. S. Department of Transportation, and at applicable requirements concerning pipeline design, construction, testing, maintenance, surveillance and operation of utility gathering, transmission and di tributing pipeline systems. In case of public utilities subject to the jurisdiction of th Public Utilities Commission of the State of California, the rules, regulations and or ers of the Public Utilities Commission shall govern whenever any conflict may e ist between them and the applicable ordinances, codes, rules and regulations a opted or prescribed by the City. The Grantee shall obtain and maintain a permit fr m the Los Angeles County Fire Department to construct, install, use, operate, re air or modify a pipeline for the transportation of flammable or combustible D. G antee shall pay to the City, on demand, the cost of all repairs to public property m de necessary by any operations of the Grantee under this Franchise, provided G antee fails to make such repairs after notice and reasonable opportunity to c mplete such repairs.
E. G antee shall indemnify, defend and hold harmless the City, its elected officials, officers, agents and employees, from and against any and all claims, losses, lie bilities, damages, demands, actions, judgments, causes of action, assessments, penalties, costs and expenses ( including, without limitation, reasonable fees of legal counsel, expert witnesses and accountants) arising out of or resulting from G antee' s operations under this franchise, and for all damages resulting from the Is lure of Grantee to faithfully observe and perform each and every provision of this franchise and of Division 3, Chapter 2 of the California Public Utilities Code.
G antee shall be solely responsible for complying with all laws, regulations, and of er orders which are applicable to the installation, repair, relocation or removal of itc facilities, whether federal, state or local. City' s approval of such installation, re air, relocation or removal shall not be deemed to relieve Grantee of any liability G antee may have for contaminated soils or other environmental liability attributable to or arising from Grantee' s pipes, appurtenances and other facilities. Grantee acknowledges that the City has no obligation or responsibility for conducting or a complishing any such installation, repair, relocation or removal, or for compliance wi h any laws, regulations, or orders applicable thereto, and Grantee agrees that ti City shall not be liable or responsible in any manner for any loss, claim, or damage, including environmental damage, attributable to or arising out of Grantee' s activities involved in the installation, repair, relocation or removal of Grantee' s pi es, appurtenances and other facilities. Any fee paid by Grantee pursuant to this Franchise shall in no way limit Grantee' s obligation to compensate City for any d mage, claim, expense or loss whatsoever, as set forth in this paragraph. antee shall, at Grantee' s sole cost and expense, keep or cause to be kept in full ce and effect, for the mutual benefit of City and Grantee, a comprehensive form general liability insurance against claims and liability for personal injury, death or perty damage arising from the use, construction, maintenance or operation of s Franchise, of at least Two Million Dollars ($ 2, 000, 000. 00) for any one accident, ident or occurrence, and at least One Million Dollars ($ 1, 000, 000. 00) for property AI insurance required by express provisions of this Ordinance and Franchise shall b carried only with responsible insurance companies licensed to do business in ti State of California. All such policies shall contain language to the effect that ( 1) ti insurer waives the right of subrogation against City and City' s agents and re resentatives, ( 2) the policies are primary and non- contributing with any insurance that may be carried by City, and ( 3) the policies cannot be cancelled or materially changed without thirty ( 30) days written notice to the City by insurer.
Grantee shall furnish City with copies of all such policies promptly upon receipt of them, or endorsements evidencing the insurance. For commencement of the Franchise, Grantee shall furnish City with binders representing all insurance re uired by this Ordinance. Grantee may effect, for its own account, any insurance not required under this ordinance. All insurance policies for property damage and
personal injury required by this Ordinance and Franchise, shall be issued to Grantee, and shall name the City as additional insured.
Grantee shall deliver to City, in the manner provided for notices, copies or endorsements of all insurance policies required by this Ordinance, within the following time limits:
1) For insurance required at commencement of this Ordinance, within thirty ( 30) days after this Ordinance becomes effective; 2) For insurance becoming required at a later date, at least ten ( 10) days before the requirement becomes effective, or as soon thereafter the requirement, if new, becomes effective; and 3) For any renewal or replacement of a policy already in existence, at least twenty ( 20) days after expiration or other termination of the existing policy.
If Grantee fails or refuses to procure or maintain insurance as required by this Ordinance or fails or refuses to furnish City with required proof that the insurance has been procured and is in force and paid for, City shall have the right, at City' s election with ten ( 10) days written notice, to declare this franchise in default.
SECTION 6. Assignability
Grantee may not sell, transfer or assign this Franchise or any interest therein directly or indirectly, or any of the rights or privileges hereby granted, without the written consent of City, said consent to not be unreasonably withheld. Notwithstanding the above statement, Grantee may transfer or assign this Franchise to any parent, subsidiary or affiliate without obtaining the consent of City, provided Grantee provides written notification within thirty ( 30) days of said transfer or assign and submits written evidence of the same, including a certification executed by a duly authorized officer of the Grantee. Upon compliance with the foregoing, this Franchise shall be binding on the successors and assigns of the parties hereto, and shall insure to the benefit of the successors and assigns of the parties hereto.
SECTION 7. Excavations
A. The Grantee shall obtain an excavation permit, and pay the applicable fee therefore, prior to commencing any excavation in any street or public right- of- way, or before disturbing the earth beneath the surface of the street, except in the case of an emergency. The Grantee may obtain an excavation permit by filing a set of excavation plans or drawings with the Engineer, which plans shall be subject to the Engineer' s review and approval. The excavation plans shall show the location of the proposed excavation, as well as the location of all existing pipes, sewers, conduits, improvements and other facilities in or under any Street or public property in which the franchise property is located or proposed to be located. The excavation plans shall also contain an adequate description of the proposed work including an estimate of the duration of interference with any street traffic. Prior to the issuance of any excavation permit for the construction or installation of a pipeline for the transmission of flammable or combustible liquids, gases or hazardous materials, a permit shall be obtained from the Los Angeles County Fire Department. If the proposed location of the excavation does not, or will not, unreasonably interfere with the use of the Streets by the City, and complies with all applicable laws, the Engineer shall approve the same, and issue permit( s) therefore.
B. Where it is necessary to lay any underground pipes through, under or across any portion of a paved or macadamized street, such work, where practicable and economically feasible, shall be done by a tunnel or bore so as not to disturb the foundation of such paved or macadamized street. If the same cannot be done, or if it is necessary to cut the street in order to access existing pipes and appurtenances, such work shall be done pursuant to an excavation permit, as provided in paragraph A above, to be issued by the Engineer upon application therefore.
C. All work shall be subject to inspection by the Engineer. All street coverings or openings, valves, vaults and manholes shall at all times be kept flush with the surface of the streets; provided, however, that vents for underground vaults and manholes as well as cathodic protection devices, including pole -mounted rectifiers may, subject to the prior approval of the Engineer, extend above the surface of the streets when such vents and cathodic protection devices, including pole - mounted
rectifiers, are located in parkways, between the curb and the property line. The Grantee shall provide adequate traffic safety barriers, signs, devices and traffic safety warning equipment in accordance with City ordinances, rules or regulations, a d shall comply with such additional safety measures as the Engineer may direct.
D. In emergencies, Grantee may commence excavation of streets without prior permit; pr vided, however, Grantee acts in a reasonable and diligent manner as soon as practicable after said emergency to obtain a permit authorizing such work.
E. Grantee acknowledges that the City' s records may not be complete and that pipes arid appurtenances previously unknown to City are frequently discovered.
Consequently, by granting this franchise or by approving any excavation permit requested by Grantee, the City does not warrant the accuracy of information Supplied to the Grantee by the City regarding the location or existence of other fa ilities. Nothing herein shall be deemed to make the City, or any officer, agent or employee of the City, responsible or liable to the Grantee or to any other person by virtue of the City' s approval of excavation permit plans, regardless of whether any information is supplied by the City to the Grantee pertaining to the location of existing pipes, facilities or other improvements on, in or under any street or other Public property.
SECTION 8. I Grantee' s Emergency Response Plan; Pipeline Accidents A. The Grantee shall develop and maintain an emergency response plan, satisfactory to the Engineer, which covers all franchise operations within the City. In general, ar emergency response plan meeting the requirements of Federal and State law ar d containing the information contained in this section shall be acceptable. The emergency response plan shall include a 24- hour notification program and proof of ar, angements capable of providing emergency response services, including but not limited to traffic control, street excavation pipeline repair, supplies and services as necessary, within two ( 2) hours of notification of any problem, and such other in ormation as the Engineer shall reasonably require. Repairs to a public street, at ey or parkway shall be completed within seventy- two ( 72) hours if reasonably possible unless otherwise authorized by the Engineer. The Engineer shall be n4 tilled ten ( 10) days in advance of any proposed change in such arrangements.
A iy changes in or revisions to Grantee' s emergency response plan shall be st bmitted to the Engineer on the first working day of the subsequent calendar year.
B. Whenever any pipeline or appurtenance breaks or leaks so as to cause the release of oil or products thereof into the public right- of- way, Grantee, and any other person using or controlling the pipeline or appurtenance, shall immediately notify the City' s Police Department and Engineering Division and shall implement precautionary safety measures including traffic control, system shutdown, valve closures, and public notification. In the event of an emergency which threatens life, health, safety, or property, and where it is not possible to obtain an excavation permit prior to cc mmencement of the work, the Grantee may commence such work; provided, however, that within seventy- two ( 72) hours thereafter the Grantee shall make application to the Engineer for an excavation permit in accordance with the prDcedures specified herein. The Engineer may impose conditions upon the issuance of the excavation permit, and all work shall be subject to inspection.
Adequate traffic safety barriers shall be maintained at all times, and any damaged portion of the street shall be restored to at least the condition that existed iry mediately prior to the damage.
C. If any portion of any City street is damaged by reason of defects, breaks or leaks in a y of the pipes and appurtenances maintained or constructed by Grantee, or by reason of any other cause attributable to or arising from the operation of any pipes ar d appurtenances constructed or maintained by Grantee, the Grantee shall, at its sc le cost and expense, immediately repair all damage and restore the street to the cc ndition existing before such damage occurred. All such work shall be done under th direction of the Engineer and to the reasonable satisfaction of the Engineer.
Gi antee shall repair such damage and restore the street within three ( 3) working clys after written demand therefore by the Engineer, or such other period as the E gineer may authorize when required for the protection of the public health and e Grantee, after reasonable notice, fails or refuses to pave, surface, grade, ive, resurface or regrade any damaged street as required by the provisions of franchise, the City may cause the work to be done and shall keep an itemized unt of all costs incurred. The Grantee agrees to, and shall, reimburse the City
for all such costs, including reasonable administrative overhead expenses, within thirty ( 30) days after presentation to Grantee of an itemized account of such costs.
SECTION 9. Abandonment
Should Grantee elect to abandon all or any part of the pipes and appurtenances which encompass this Franchise, such abandonment shall be accomplished by Grantee as required by the State of California Pipeline Safety Act, or other governing State or Federal laws or statutes. Grantee shall not owe the City any compensation for the privilege of said abandonment. The ownership of all franchised property so abandoned in place, shall immediately vest in the City.
SECTION 10. Default
A. Effect of Default
In the event that the Grantee shall default in the performance of any of the terms, covenants and conditions herein, and such default is curable, the City may give written notice to Grantee of such default. In the event that the Grantee does not commence the work necessary to cure such default within sixty ( 60) days after such notice is sent, or prosecute such work diligently to completion, the City may declare this Franchise forfeited. Upon giving written notice thereof to Grantee, this Franchise shall be void, and the rights of the Grantee hereunder shall terminate, and the Grantee shall execute an instrument of surrender and deliver same to City. In the event of noncompliance by the Grantee with any of the conditions hereof, the City may, in addition to all other remedies provided for herein, bring suit for the forfeiture or termination of this Franchise.
B. Force Majeure
In the event Grantee is unable to perform any of the terms of this Franchise by reason of strikes, riots, acts of God, acts of public enemies, or other such causes beyond its control, it shall not be deemed to be in default or have forfeited its rights hereunder, if it shall commence and prosecute such performance with reasonable promptness, as soon as possible to do so.
C. Cumulative Remedies
No provision herein made for the purpose of securing the enforcement of the terms and conditions of this Franchise shall be deemed an exclusive remedy, or to afford the exclusive procedure, for the enforcement of said terms and conditions, but the remedies and procedures herein provided, in addition to those provided by law, shall be deemed to be cumulative.
SECTION 11. Dispute Resolution
If a dispute arises between the parties relating to this Franchise, the parties agree to use the following procedure prior to either party pursuing other available legal remedies. A meeting shall be held promptly between the parties, attended by individuals with decisionmaking authority regarding the dispute, to attempt in good faith to negotiate a resolution of the dispute. If, within thirty ( 30) days after such meeting the parties have not succeeded in negotiating a resolution of the dispute, they agree to submit the dispute to mediation. City and Grantee shall equally advance a proportionate share of the costs of mediation. The parties shall jointly appoint a mutually acceptable mediator within thirty ( 30) days from the conclusion of the negotiation period. The parties agree to participate in good faith in the mediation and negotiations related thereto, for a period of sixty ( 60) days. Any decision of the mediator shall be supported by written findings of facts and conclusions of law. If the parties are not successful in resolving the dispute through the mediation, the matter may be submitted to a court of law. If any action at law or in equity is brought, the prevailing party in such litigation shall be entitled to an award of reasonable attorneys' fees in addition to any other relief to which it may be entitled.
SECTION 12. Notice
Any notice required to be given under the terms of this Franchise, the manner of service of which is not specifically provided for here, may be served to the following identified addresses, or to such other address as may from time to time be furnished in writing by one party to the other, and by depositing said notice in the United States mail, postage prepaid.
When the services of any such notice is made by mail, the time such notice shall begin with and run from, is the date of deposit of the same in the United States mail.
Upon City:
Upon Grantee
With a copy to
SECTION 13.
Except as oth,
adoption of thi
herein the folio
A. Fil
thi
lity of Montebello
Richard Torres
City Administrator
1600 West Beverly Boulevard
Montebello, CA 90640
Crimson Pipeline, L. P.
410 17'" Street, # 1010
Denver, CO 80202
Mr. Larry W. Alexander
Crimson Pipeline, L. P.
2459 Redondo Avenue
Long Beach, CA 90806
Grantee' s Acceptance of Franchise
rwise stated herein, Grantee shall, within thirty ( 30) days after passage and ordinance granting the Franchise, file with the officers of the City designated Ning instruments or documents:
with the City Clerk Grantee' s written a, ep(anoe Af. ofOe terms and conditions ordinance.
g.
with City Clerk certified copies of tfie policies of liabijiyinsurance and workers' npensation insurance, or, in lieu thereof; cprt0icates: evidencing such insurance, ich policies shall be in accordagee with ' the tetn69 : and conditions of this finance. Notwithstanding anything; td, the co6trarty, r6rantee may provide a gram of self- insurance provided it can' demvlisG& tg;ttlat it had a net worth of Ten Ilion Dollars ($ 10, 000, 000. 00) within the preceding year. The City, at its sole cretion, may allow Grantee to self - insure provided the self- insurance program mplies with the provision and specified limits contained herein, and is approved the City Administrator and City Attorney.
C. Fie with the City Clerk, within ten ( 10) business days after the City Council adopts ar d passes the ordinance granting this franchise, and thereafter at all times during the life of the franchise, keep on file with the City Clerk a bond issued by an admitted surety insurer, and in a form approved by the City Attorney, in the penal sum of One Hundred Thousand Dollars ($ 100, 000. 00), conditioned upon that the G antee shall well and truly observe, fulfill, and perform each condition of the franchise and that, in case of any breach of condition of the bond, the whole a iount of the penal sum therein specified shall be recoverable from the principal and surety upon said bond. If said bond is not filed, or if it does not receive the approval of the City Attorney, the franchise may be revoked or forfeited and any rr oney paid to the City in connection therewith shall be retained by the City.
SECTION 14 Reimbursement for City' s posting and publication expenses The Grantee 3hall pay to the City a sum of money sufficient to reimburse the City for all posting and publication expenses incurred in connection with the granting of this franchise. Such payment shal be made by Grantee within thirty ( 30) days after the City provides to the Grantee a written statement of such expenses.
SECTION 15 Miscellaneous Provisions
A. a tions. The captions here are for convenience and reference only, and are not art of this Franchise, and do not in any way limit, define or amplify the terms and provisions hereof.
B. Severability. If any section, subsection, sentence, clause, phrase or portion of this Franchise is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Franchise.
C. overning Law. This Franchise has been made and shall be construed and interpreted in accordance with the laws of the State of California.
D. I to ration. This ordinance integrates all terms and conditions in connection with tie Franchise, and supersedes all negotiations and prior understandings, either oral r in writing. This Franchise shall not be modified unless in writing and duly approved by each of the parties.
E.
Execution. The Mayor of this City shall approve and sign and the City Clerk shall attest to the passage of this ordinance. This Ordinance shall take effect thirty ( 30) days from the date of its adoption, and prior to the expiration of fifteen ( 15) days from the adoption hereof, the City Clerk, pursuant to Government Code Section 36933( c)( 1), shall cause a summary of this Ordinance to be published in a local newspaper, along with the record of the vote for approval and adoption, and shall post a certified copy of the full text of this Ordinance, along with the record of the vote thereon. Once this Franchise becomes effective, it shall be deemed to be applicable as of September 1, 2008.
SECTION 16. The City Clerk shall attest and certify to the passage and adoption of this ordinance, which shall take effect thirty ( 30) days after the date of its adoption, and shall cause the same to be published as required by law.
PASSED AND APPROVED this 141" day of January, 2009
ATTEST:
YL '/ 1Z
Robert J. King, City Clerk
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF MONTEBELLO )
Vasquez, Mayor
APPROVED AS TO FORM:
4A- ldaA41Var44Glasman, City Attorney
I, Robert J. King, City Clerk of the City of Montebello, do hereby certify that the foregoing Ordinance No. 2327 was introduced, on January 14, 2009 was passed and duly adopted by the City Council of the City of Montebello at their regular meeting of January 28, 2009, and carried by the following vote:
AYES: Members: Molinari, Urteaga, Salazar, Saucedo- Rodriguez, Vasquez NOES: Members: None
ABSTAIN: Members: None
ABSENT: Members: None
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of said City on this 28th day of January 2009.
x'6
Robert J. King, City Clerk
10
ITEM # 31
CITY OF MONTEBELLO
CITY COUNCIL AGENDA STAFF REPORT
TO: Honorable Mayor and City Council Members
FROM: Raul Alvarez, City Manager
BY: David Sosnowski, Director of Recreation and Community Services SUBJECT: APPROVE PROFESSIONAL SERVICES AGREEMENT NO. 4546 WITH
STAFFORD LIGHTS FOR CITY HALL LIGHTING INSTALLATION
DATE: June 24, 2026
RECOMMENDATIONS:
It is recommended that the City Council:
1. Approve Professional Services Agreement No. 4546 with Stafford Lights for City Hall lighting installation in an amount not-to-exceed $59,999; and
2. Authorize the City Manager to take actions necessary to execute and finalize an agreement on behalf of the City of Montebello; and
3. Take such additional, related action that may be desirable.
FISCAL IMPACT:
The total not-to-exceed cost for City Hall light installation from Stafford Lights under the proposed agreement (Attachment A) is $59,999.
This project is considered a public works project as it requires permanent installation to City facilities and will comply with all prevailing wage requirements. Accordingly, the project falls under Montebello Municipal Code Section 3.20.140, which provides that, in accordance with the Uniform Public Construction Cost Accounting Act, public projects with a value of $75,000 or less may be procured through a negotiated contract or purchase order and do not require formal competitive bidding.
Although formal quotes were not required, staff researched several commercial lighting options and obtained quotations from two additional vendors offering comparable systems. After evaluating the available options, staff selected Stafford Lights because it is the locally authorized distributor and installer of the BlueHopper lighting system and provided the best overall value for the City.
The project will be funded utilizing the Arts in Public Places fund (Account No. 252-30-
CITY COUNCIL AGENDA REPORT - MEETING OF JUNE 24, 2026
510-7115, Arts in Public Places, Public Works, Facilities, Building Improvements). The Fiscal Year 2026-27 adopted budget includes appropriations for the anticipated use of this funding for various permissible projects. Therefore, no budget amendment is needed as part of the recommended action as sufficient appropriations exist in Fund 252.
BACKGROUND/DISCUSSION:
At the April 8, 2026 City Council meeting, the City Council directed staff to explore the feasibility of adding uplighting to City Hall in order to enhance visibility and civic pride.
Staff researched available lighting options and obtained quotes from multiple vendors.
Based on this evaluation, staff recommends Stafford Lights. Stafford Lights offers competitive pricing and is the authorized local distributor and installer of BlueHopper lighting systems.
BlueHopper devices are powered by MeshTek, a patented, bi-directional, long-range Bluetooth mesh technology recognized as a leader in the smart device control industry.
Staff has determined that BlueHopper lights are a durable and reliable solution that provides the quality, functionality, and flexibility needed by the City. Key features include vibrant color displays, low-profile installation, year-round scheduling capabilities, and seamless automated integration.
The Stafford Lights quote includes the installation of City Hall roofline lighting, tree lighting, column lighting, lights along the signage wall, and flood lights along the walls of the front of City Hall. The lighting installation would allow staff to program the lighting for events, celebrations, national and local causes, holidays and more.
ENVIRONMENTAL:
N/A
ANALYSIS:
N/A
SUMMARY:
It is recommended that the City Council authorize the City Manager to execute Professional Services Agreement No. 4546 with Stafford Lights in an amount not-toexceed $59,999 and authorize the City Manager to take actions necessary to execute and finalize an agreement on behalf of the City of Montebello.
ATTACHMENT(S)
1. Attachment A - Draft Agreement No. 4546
CITY OF MONTEBELLO
PROFESSIONAL SERVICES AGREEMENT NO. 4546
WITH STAFFORD LIGHTS
THIS PROFESSIONAL SERVICES AGREEMENT (“Agreement”) is made and entered into on June 24, 2026 (“Effective Date”), by and between the CITY OF MONTEBELLO, a California municipal corporation (the “CITY”) and STAFFORD LIGHTS (the “CONSULTANT”). The CITY and the CONSULTANT are sometimes referred to herein individual as the “Party,” and jointly as the “Parties.”
RECITALS
WHEREAS, the CITY desires to retain a qualified professional consultant to provide City Hall lighting installation in the CITY; and WHEREAS, the CONSULTANT represents that it is fully qualified to perform such services by virtue of its experience and the training, education and expertise of its principals and employees.
NOW THEREFORE, in consideration of performance by the Parties of the covenants and conditions herein contained, the Parties hereto agree as follows:
SECTION 1. INCORPORATION OF RECITALS AND OTHER CONTRACT
DOCUMENTS
a. The above-referenced Recitals constitute a material part hereof and shall hereby be incorporated by reference. Moreover, this Agreement consists of the following documents, in order of precedence, all of which are incorporated herein and made part of this Agreement, as though fully set forth herein:
1. This Agreement and its Exhibits, including scope of work, fee schedules, and any and all addenda or supplemental agreements.
2. All other documents, including but not limited to all applicable bonds, insurance certificates, permits, notices, schedules, forms, certifications, and affidavits.
b. These documents shall be collectively referred to herein as the “Contract Documents.” In the event of a conflict among the Contract Documents, the order of precedence list above shall apply.
SECTION 2. SERVICES / COMPENSATION.
a. To the extent of a conflict between the terms of this Agreement and that set forth in any exhibits or attachments hereto, the terms of this Agreement shall govern.
b. The CONSULTANT shall provide to the CITY all labor, equipment, materials and incidental necessary to provide aquatic center annual maintenance and preventative services as set forth fully in the scope of work, as such is set forth fully in Exhibit “A” attached hereto and incorporated fully herein by this reference (hereinafter “Professional Services”).
ATTACHMENT A
PROFESSIONAL SERVICES AGREEMENT NO. 4546
c. The CONSULTANT shall be compensated for performance of the Professional Services as set forth in the Schedule of Compensation attached hereto as Exhibit “A” and incorporated fully herein by this reference (“Compensation”).
The CONSULTANT shall provide an itemized billing statement to the CITY each month for Professional Services performed. The CONSULTANT shall no incur fees or costs which exceed the Compensation without the prior written consent of the CITY.
SECTION 3. TERM.
a. This Agreement shall commence upon issuance of a written “Notice to Proceed” (as further defined below) by the CITY and shall expire six (6) months from the Effective Date, unless terminated earlier as hereinafter provided. This Agreement may be extended for up to one (6) month extension upon such terms and conditions mutually agreed upon by the Parties in writing. b. Notice to Proceed. Any work or service contemplated under this Agreement shall not commence until the CITY has issued a written Notice to Proceed issued by CITY’s applicable, department head.
SECTION 4. PERFORMANCE.
a. The CONSULTANT shall at all times, faithfully, competently, and to the best of its ability, experience, and talent, perform all tasks described herein. b. The CONSULTANT shall employ, at a minimum, generally accepted standards and practices utilized by companies engaged in providing similar services, as are required of Consultant hereunder, in meeting its obligations under this Agreement.
c. The CONSULTANT shall be knowledgeable of and subject to all CITY ordinances, rules and regulations, standard operating procedures, and the supervisory chain of command.
d. The CONSULTANT shall have the right to retain, subject to the CITY's approval, additional individuals, consultants or subconsultants to assist in the completion of services as herein defined. Compensation for additional individuals, consultants or subconsultants shall be the sole and exclusive responsibility of the CONSULTANT.
e. The CONSULTANT shall retain all original reports, field and office notes, correspondence, calculations, maps, and other documents specifically related to the services provided by the CONSULTANT pursuant to this Agreement, other than documents which are exempt from disclosure pursuant to the attorneyclient privilege or any other law. Said documents shall be made available for inspection by the CITY upon request.
SECTION 5. WORK PRODUCT.
a. The CONSULTANT hereby agrees that all work product produced pursuant to this Agreement, and provided to the CITY during and upon completion of this Agreement, shall be the property of the CITY, and ownership of said work product shall be retained by the CITY. The CONSULTANT may take and retain copies of
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such written products as desired, but no such written products shall be the subject of a copyright application by the CONSULTANT.
b. All data, documents, discussion, or other information developed or received by the CONSULTANT or provided for performance of this Agreement are deemed confidential and shall not be disclosed by the CONSULTANT without prior written consent by the CITY. The CITY shall grant such consent if disclosure is legally required. All such written products shall be returned to the CITY upon the termination or expiration of this Agreement. The CONSULTANT agrees that the covenants contained in this Section shall survive the expiration or termination of this Agreement.
SECTION 6. EXTRA SERVICES.
No extra services over and above the Compensation shall be rendered by the CONSULTANT under this Agreement unless such extra services first shall have been duly authorized in writing by the CITY’s City Manager (the “City Manager”).
SECTION 7. CITY SUPERVISION.
The City Manager shall have the right of general supervision of all work performed by the CONSULTANT and shall be the CITY’s agent with respect to obtaining the CONSULTANT’s compliance hereunder. No payment for services rendered under this Agreement shall be made without the prior approval of the City Manager.
SECTION 8. TERMINATION.
In the event that either Party hereto fails or refuses to perform any of the provisions of this Agreement at the time and in the manner required, the non-defaulting party shall give the defaulting party written notice of the default, the nature of the default, and of the steps necessary to cure the default.
a. Termination for Cause. In the event that any of the provisions of the Agreement are violated by either party, the non-defaulting Party may terminate the Agreement by serving written notice upon the other Party, listing the violation(s) and its intent to terminate such Agreement unless within ten (10) days after the serving of such notice, such violation shall cease or be rectified, the contract shall upon the expiration of an additional thirty (30) days cease and terminate. Violations by the CONSULTANT which cannot be corrected within ten (10) days, said contract shall at the option of the CITY cease and terminate upon the giving of like notice. In the event of any such termination for default by the CONSULTANT, the CITY may take over the work and prosecute the same to completion by contract or otherwise for the account and at the expense of the CONSULTANT. The CONSULTANT and his sureties shall be liable to the CITY for any excess cost occasioned in the event of any such termination. This change shall not be construed to prevent the termination, for other causes authorized by law or other provisions of this contract.
In the event of a termination for cause, the CONSULTANT shall only be entitled to the Compensation for those Professional Services satisfactory performed on or before the effective date of termination.
b. Termination for Convenience. The CITY shall have the option, at its sole discretion and without cause, to terminate this Agreement in whole, or in part, by giving ten (30) business days’ written notice to the CONSULTANT. Upon the
PROFESSIONAL SERVICES AGREEMENT NO. 4546
termination of this Agreement as provided herein, the CITY shall provide to the CONSULTANT the part of Compensation which would otherwise be payable to the CONSULTANT for services the CONSULTANT had completed as of the date of termination, less the amount of all previous payment with respect to the Compensation. Further, upon such a termination for convenience by the CITY, the Parties agree that the CONSULTANT shall be reimbursed for any “nonrefundable” costs that the CONSULTANT has incurred for its services under this Agreement, provided that: (1) such “non- refundable” costs were incurred by the CONSULTANT prior to the date of termination, and (2) that the CONSULTANT provides the CITY with adequate proof that the CONSULTANT incurred the costs, and is unable to be seek a refund for such costs. Such “non-refundable” costs may include, but are not limited to, travel reservations incurred by the CONSULTANT for its performance of services under this Agreement. The CONSULTANT agrees to cease all work under this Agreement on or before the effective date of any notice of termination.
SECTION 9. EMPLOYMENT OF CITY EMPLOYEES.
No regular employee of the CITY shall be employed by the CONSULTANT during the term of this Agreement.
SECTION 10. NON-LIABILITY OF CITY OFFICIALS AND EMPLOYEES.
No official or employee of the CITY shall be personally liable to the CONSULTANT in the event of any default or breach by the CITY, or for any amount which may become due to the CONSULTANT.
SECTION 11. INDEPENDENT CONSULTANT.
a. The CONSULTANT is and shall, at all times, remain as to the CITY a wholly independent consultant. Neither the CITY nor any of its elected officials, officers, employees, or agents shall have control over the conduct of the CONSULTANT except as expressly set forth in this Agreement. The CONSULTANT shall not at any time or in any manner represent that he or she is in any manner an elected official, officer, employee, or agent of the CITY. No employee benefits shall be available to the CONSULTANT in connection with the performance of this Agreement. Except as provided in this Agreement, the CITY shall not pay salary, wages, or other compensation to the CONSULTANT for performance hereunder for the CITY, the CITY shall not be liable for compensation to the CONSULTANT, the CONSULTANT’s employees or the CONSULTANT’s subconsultants for injury or sickness arising out of performing services hereunder. b. The parties further acknowledge and agree that nothing in this Agreement shall create or be construed to create a partnership, joint venture, employment relationship or any other relationship except as set forth in this Agreement. c. The CITY shall not deduct from the Compensation paid to the CONSULTANT any sums required for Social Security, withholding taxes, FICA, state disability insurance or any other federal, state or local tax or charge which may or may not be in effect or hereinafter enacted or required as a charge or withholding on the compensation paid to the CONSULTANT. The CITY shall have no responsibility to provide the CONSULTANT, its employees or subconsultants with workers’ compensation insurance or any other insurance.
PROFESSIONAL SERVICES AGREEMENT NO. 4546
SECTION 12. CALPERS ANNUITANTS AND ELIGIBILITY INDEMNITY. a. If the CONSULTANT is a California Public Employees’ Retirement System (“CalPERS”) annuitant, the CONSULTANT must provide the City with written notification of such fact a minimum of 14 calendar days prior to commencement of services under this Agreement. Failure to provide such notification may result in termination of the Agreement, and any penalties or other costs relating thereto shall be borne by the CONSULTANT. If this Agreement remains in place, the CONSULTANT shall execute any amendment(s) to this Agreement requested by the City in order to comply with all laws and regulations applicable to CalPERS annuitants.
b. In the event that the CONSULTANT or any employee, agent, or subconsultant of the CONSULTANT providing services under this Agreement claims or is determined by a court of competent jurisdiction or CalPERS to be eligible for enrollment in CalPERS as an employee of the CITY, the CONSULTANT shall indemnify, defend, and hold harmless the CITY for the payment of any employee and/or employer contributions for CalPERS benefits on behalf of the CONSULTANT or its employees, agents, or subconsultants, as well as for the payment of any penalties and interest on such contributions, which would otherwise be the responsibility of the CITY.
c. Notwithstanding any other agency, state or federal policy, rule, regulation, law or ordinance to the contrary, the CONSULTANT and any of its employees, agents, and subconsultants providing service under this Agreement shall not qualify for or become entitled to, and hereby agree to waive any claims to, any compensation, benefit, or any incident of employment by the CITY, including but not limited to eligibility to enroll in PERS as an employee of the CITY and entitlement to any contribution to be paid by the CITY for employer contribution and/or employee contributions for PERS benefits.
SECTION 13. LEGAL RESPONSIBILITIES.
The CONSULTANT shall at all times observe and comply with all applicable laws, ordinances, codes, and regulations of the federal, state, and local governments including, but not limited to the Montebello Municipal Code. The CITY, and its appointed or elected officers, employees, or agents, shall not be liable at law or in equity occasioned by failure of the CONSULTANT to comply with this section.
SECTION 14. INDEMNIFICATION.
The CONSULTANT agrees to, and shall defend, indemnify, protect and hold harmless, the CITY, its elected and appointed boards, officers, officials, employees, agents and volunteers from and against any and all claims, demands, lawsuits, defense costs, civil, penalties, expenses, causes of action, and judgments at law or in equity, or liability of any kind or nature which the CITY, its elected and appointed boards, officers, officials, employees, agents and volunteers may sustain or incur or which may be imposed upon them for injuries or deaths of persons, or damage to property arising out of the CONSULTANT’s negligent or wrongful act, or omission under the terms of this Agreement, except only liability arising out of the sole negligence of the CITY.
PROFESSIONAL SERVICES AGREEMENT NO. 4546
SECTION 15. INSURANCE COVERAGE.
a. During the term of this Agreement, the CONSULTANT shall carry, maintain, and keep in full force and effect insurance against claims for death or injuries to persons or damages to property that may arise from or in connection with CONSULTANT’s performance of this Agreement. Such insurance shall be of the types and in the amounts as set forth below:
• Commercial General Liability (CGL): Insurance Services Office Form CG 00 01 covering CGL on an “occurrence” basis for bodily injury and property damage, including products-completed operations, personal injury, and advertising injury, with limits no less than $2,000,000 per occurrence. If a general aggregate limit applies, the limit shall be twice the required occurrence limit.
• Automobile Liability Insurance: Insurance Services Office Form Number CA 0001 covering, Code 1 (any auto), or if CONSULTANT has no owned autos, Code 8 (hired) and 9 (non-owned), with limit no less than $1,000,000 per accident for bodily injury and property damage. • Worker's Compensation insurance as required by the laws of the State of California, with Statutory Limits, and Employer’s Liability Insurance with limit of no less than $1,000,000 per accident for bodily injury or disease.
b. If the CONSULTANT maintains higher limits than the minimums shown above, the CITY requires and shall be entitled to coverage for the higher limits maintained by the CONSULTANT.
c. The CONTACTOR shall require each of its subconsultants, if any, to maintain insurance coverage that meets all of the requirements of this Agreement. d. The policy or policies required by this Agreement shall be issued by an insurer admitted in the State of California and with a current rating of at least A:VII in the latest edition of Best's Insurance Guide.
e. Each insurance policy required above shall state that coverage shall not be canceled, except after thirty (30) days’ prior written notice (ten [10] days for nonpayment) has been given to the CITY. The CONSULTANT agrees that if it does not keep the aforesaid insurance in full force and effect the CITY may either (i) immediately terminate this Agreement for Cause; or (ii) take out the necessary insurance and pay, at the CONSULTANT’s expense, the premium thereon. f. Evidence of Insurance prior to commencement. The Contractor shall provide to the CITY Certificate(s) of Insurance evidencing such coverage together with copies of the required policy endorsements no later than five (5) business days prior to commencement of service and at least fifteen (15) business days prior to the expiration of any policy. Unreasonable failure to provide such evidence may be cause for termination of the Agreement as provided herein or delay the services’ commencement date. The evidence of insurance shall be U.S. mail or email to:
City of Montebello
PROFESSIONAL SERVICES AGREEMENT NO. 4546
Attn: Risk Manager
1600 West Beverly Boulevard
Montebello, CA 90640
Email: [email protected]
Coverage shall not be suspended, voided, cancelled, reduced in coverage or in limits, non-renewed, or materially changed for any reason, without thirty (30) days prior written notice thereof given by the insurer to the CITY by U.S. mail, or by personal delivery, except for nonpayment of premiums, in which case ten (10) days prior notice shall be provided.
g. Evidence of Insurance during the entire term of the Agreement. At all times during the term of this Agreement, the CONSULTANT shall maintain on file with the CITY’s Risk Manager a certificate or certificates of insurance showing that the aforesaid policies are in effect in the required amounts and naming the CITY as an additional insured. The CONSULTANT shall, prior to commencement of work under this Agreement, file with the CITY’s Risk Manager such certificate(s). h. The CONSULTANT shall provide proof that policies of insurance required herein expiring during the term of this Agreement have been renewed or replaced with other policies providing at least the same coverage. Such proof will be furnished at least two (2) weeks prior to the expiration of the coverages. i. The general liability and automobile policies of insurance required by this Agreement shall contain an endorsement naming the CITY, its officers, employees, agents and volunteers as additional insureds. All of the policies required under this Agreement shall contain an endorsement providing that the policies cannot be canceled or reduced except on thirty days’ prior written notice to the CITY. The CONSULTANT agrees to require its insurer to modify the certificates of insurance to delete any exculpatory wording stating that failure of the insurer to mail written notice of cancellation imposes no obligation, and to delete the word “endeavor” with regard to any notice provisions.
j. The insurance provided by the CONSULTANT shall be primary to any coverage available to the CITY. Any insurance or self-insurance maintained by the CITY, its officers, employees, agents, or volunteers, shall be in excess of CONSULTANT’s insurance and shall not contribute with it. k. All insurance coverage provided pursuant to this Agreement shall not prohibit the CONSULTANT, and CONSULTANT’s employees, agents or subconsultants, from waiving the right of subrogation prior to a loss. The CONSULTANT hereby waives all rights of subrogation against the CITY. l. Any deductibles or self-insured retentions must be declared to and approved by the CITY. At the option of the CITY, the CONSULTANT shall either reduce or eliminate the deductibles or self-insured retentions with respect to the CITY, or the CONSULTANT shall procure a bond guaranteeing payment of losses and expenses.
m. Procurement of insurance by the CONSULTANT shall not be construed as a limitation of the CONSULTANT'S liability or as full performance of CONSULTANT’s duties to indemnify, hold harmless and defend under the indemnity covenants of
PROFESSIONAL SERVICES AGREEMENT NO. 4546
this Agreement.
SECTION 16. SUBCONTRACT, ASSIGNMENT OR DELEGATION.
The CONSULTANT shall not subcontract, delegate, or assign its duties or rights hereunder, either in whole or in part, without the prior written consent of the CITY.
Any proposed subcontract, delegation, or assignment shall provide a description of the services to be covered, identification of the proposed sub-consultant, delegee, or assignee, and an explanation of why and how the same was selected, including the degree of competition involved.
Any subcontract, delegation or assignment shall be made in the name of the CONSULTANT and shall not bind or purport to bind the CITY and shall not release the CONSULTANT from any obligations under this Agreement including, but not limited to, the duty to properly supervise and coordinate the work of employees, assignees, delegees or sub-consultants. No such subcontract, delegation or assignment shall result in any increase in the amount of total compensation payable to the CONSULTANT under the Agreement.
SECTION 17. NO WAIVER.
Waiver by any party hereto of any term, condition or covenant of this Agreement shall not constitute the waiver of any other term, condition, or covenant hereof.
SECTION 18. DISPUTE RESOLUTION; GOVERNING LAW.
Disputes regarding the interpretation or application of any provision(s) of this Agreement shall, to the extent reasonably feasible, be resolved through good faith negotiations between the Parties. If any action at law or in equity is brought to enforce this Agreement or because of alleged dispute, breach, default or misrepresentation in connection with the provisions of this Agreement, the prevailing party in such action shall be entitled to reasonable attorney’s fees, expert fees, costs and necessary disbursements incurred in that action or proceeding, in addition to such other relief as may be sought and awarded. The venue for any litigation shall be County of Los Angeles, California. The Parties agree that the covenants contained in this Section shall survive the expiration or termination of this Agreement.
SECTION 19. ATTORNEY’S FEES AND COSTS.
If litigation is reasonably required to enforce or interpret the provisions of this Agreement, the prevailing party in such litigation shall be entitled to an award of reasonable attorney's fees and costs in addition to any other relief to which it may be entitled.
SECTION 20. WARRANTIES.
Each of the parties represents and warrants to one another as follows:
a. It has received independent legal advice from its attorneys with respect to the advisability of entering into and executing this Agreement; b. In executing this Agreement, it has carefully read this Agreement, knows the
PROFESSIONAL SERVICES AGREEMENT NO. 4546
contents thereof, and has relied solely on the statements expressly set forth herein and has placed no reliance whatsoever on any statement, representation, or promise of any other party, or any other person or entity, not expressly set forth herein, nor upon the failure of any other party or any other person or entity to make any statement, representation or disclosure of any matter whatsoever; and c. It is agreed that each party has the full right and authority to enter into this Agreement, and that the person executing this Agreement on behalf of either party has the full right and authority to fully commit and bind such party to the provisions of this Agreement.
SECTION 21. MISCELLANEOUS.
a. The descriptive paragraph headings of this Agreement are included for purposes of convenience only and shall not control or affect the construction of interpretation of any of its provisions.
b. Whenever the context hereof shall so require, the singular shall include the plural, the male gender shall include the female gender, and the neuter and vice versa.
c. In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision hereof and this Agreement shall be construed as if such invalid, illegal, or unenforceable provisions had never been contained herein.
d. The representations and warranties made by the parties to this Agreement shall survive the consummation of the transaction herein described. e. This Agreement may be signed in any one or more counterparts all of which taken together shall be but one and the same Agreement. Any signed copy of this Agreement or of any other document or agreement referred to herein, or copy or counterpart thereof, delivered by facsimile transmission, shall for all purposes be treated as if it were delivered containing an original manual signature of the party whose signature appears in the facsimile and shall be binding upon such party in the same manner as though an originally signed copy had been delivered. f. Each of the parties acknowledges that it has been represented by independent counsel of its own choosing, or if it has not been so represented, it has been admonished to obtain independent counsel and has freely and voluntarily waived and relinquished the right to counsel. Each party who has not obtained independent counsel acknowledges that the failure to have independent legal counsel will not excuse such party’s failure to perform under this Agreement or any agreement referred to in this Agreement.
SECTION 22. NOTICE.
All notices, demands, requests or approvals to be given under this Agreement shall be given in writing and conclusively shall be deemed served when delivered via email (an “Electronic Notice” as further defined below), personally or on the second (2nd) business day after the deposit thereof in the United States mail, postage prepaid, registered or certified, addressed as hereinafter provided. All notices,