Morgan Hill City Council
November 16, 2022

29 (A). Indemnification of CITY. COMPANY agrees that it shall protect, defend with counsel reasonably acceptable to CITY, indemnify and hold harmless CITY, its officers, employees, and agents from and against any and all losses, liabilities, fines, penalties, claims, damages, liabilities or judgments, including attorney’s fees, arising out of or resulting in any way from COMPANY's performance of this franchise, unless such claim is due to the negligence or willful acts of the CITY, its officers, employees, agents, contractors or volunteers. Upon demand of the CITY, made by and through the City Attorney, COMPANY shall appear in and defend the CITY and its officers, employees, and agents, in any claims or actions, whether judicial, administrative or otherwise which are within the scope of the foregoing indemnity.

THIS PROVISION SHALL SURVIVE THE EXPIRATION OF THE PERIOD DURING

WHICH SOLID WASTE AND RECYCLABLES COLLECTION, PROCESSING AND DISPOSAL SERVICES ARE TO BE PROVIDED UNDER THIS AGREEMENT. (B) Hazardous Substance Indemnification. COMPANY shall indemnify, defend with counsel reasonably acceptable to CITY, protect and hold harmless CITY, its officers, employees, agents, volunteers, assigns and any successor or successors to CITY's interest from and against all claims, actual damages (including special and consequential damages but excluding punitive damages), natural resources damage, injuries, cost, response, remediation and removal costs, losses, liabilities, causes of action, suits, legal or administrative proceedings, interest, fines, charges, penalties and expenses (including but not limited to attorneys' and expert witness fees and costs incurred in connection with defending against any of the foregoing or in enforcing this indemnity) of any kind whatsoever paid, incurred or suffered by, or asserted against, CITY or its officers, employees, or agents arising from or attributable to any repair, cleanup or detoxification, or preparation and implementation of any removal, remedial, response, closure or other plan (regardless of whether undertaken due to governmental action) concerning any Hazardous Substance or Hazardous Wastes at any place owned by COMPANY or its affiliates where COMPANY processes or stores material for recycling pursuant to this Agreement, unless such claim is due to the sole negligence or willful acts of the CITY, its officers, employees, agents, contractors or volunteers. The foregoing indemnity is intended to operate as an agreement pursuant to Section 107(e) of the Comprehensive Environmental Response, Compensation and Liability Act, "CERCLA", 42 U.S.C. Section 9607(e), and California Health and Safety Code Section 25364, to defend, protect, hold harmless and indemnify CITY from liability. THIS

PROVISION SHALL SURVIVE THE EXPIRATION OF THE PERIOD DURING WHICH

SOLID WASTE AND RECYCLABLES COLLECTION, PROCESSING AND DISPOSAL SERVICES ARE TO BE PROVIDED UNDER THIS AGREEMENT.
(C) State Mandate Indemnification. COMPANY agrees to protect, defend, with counsel reasonably acceptable to CITY, and indemnify CITY against fines or penalties imposed by CalRecycle in the event that the CITY fails to meet its AB 939 waste reduction goals or fulfill its obligations pursuant to the SB 1383 Final Regulations due to the COMPANY’s failure to satisfactorily fulfill its obligations pursuant to this Agreement, unless such claim is due to the sole negligence or willful acts of the CITY, its officers, employees, agents, contractors or volunteers.

30 Section 14. Franchise Insurance and Bond.
(A) This Agreement and the privileges herein granted to COMPANY is and are conditioned upon the faithful performance by COMPANY and by each and every one of his subcontractors, if any, of each and all of the covenants and provisions herein agreed to be performed by COMPANY or required to be performed by its subcontractors; and payment of all license fees and other monies herein agreed to be paid by COMPANY. (B) Upon execution of this Agreement, COMPANY shall furnish to CITY and shall file with the City Clerk of CITY a corporate surety bond, in substantially the form of the bond filed with CITY in 2021 (or in such other form as may be approved by the City Manager and approved as to form by the City Attorney) executed by COMPANY as principal and by a corporate surety as surety, in the sum of $1,000,000 (One Million Dollars), conditioned upon the faithful performance by COMPANY and its subcontractors, if any, of this Agreement. (C) COMPANY agrees to maintain and submit evidence to CITY of, during the life of this Agreement, insurance policies as specified in Exhibit B, Insurance Requirements.

Evidence of insurance shall be in the form of an ACORD form Certificate of Insurance and original endorsements to policies each naming the CITY and its officers, employees and agents as additional insureds on all policies. In the event of cancellation of any coverage, thirty (30) days prior written notice of termination shall be given to the CITY. Notice shall be sent to:

City Manager
City of Morgan Hill
17555 Peak Avenue
Morgan Hill, California 95037
Section 15. Franchise Assignment
(A) COMPANY shall not assign, sell, subcontract or otherwise delegate authority to perform any portion of this Agreement, including but not limited to a sale, exchange or other transfer of substantially all of COMPANY’s assets dedicated to service under this Agreement to a third party, or between a subsidiary and a parent company or Related Party, without the prior written express approval of CITY. Use of third-party disposal or processing facilities shall not be deemed subcontracting or delegation of authority. In the event of any assignment duly authorized by CITY, the assignee shall assume the liability of COMPANY. (B) No sale, gift, or transfer of stock or other interest of COMPANY, including but not limited to any reorganization, consolidation, merger recapitalization, stock issuance or re-issuance, voting trust, pooling agreement, escrow arrangement, liquidation or other transaction to which COMPANY or any of its shareholders is a party, which would result in a change of Control of COMPANY, shall be made without prior written approval of the City Council. Violation of this

31 provision shall be a breach of this Agreement and grounds for termination by CITY without the need for compliance with the notification requirements of Section 20. (C) If COMPANY shall at any time during the Term become insolvent, or if proceedings in bankruptcy shall be instituted by or against COMPANY (and, if against COMPANY, not dismissed or stayed within 90 days), or if COMPANY shall be adjudged bankrupt or insolvent by any court, or if a receiver or trustee in bankruptcy or a receiver of any property of COMPANY shall be appointed in any suit or proceeding brought by or against COMPANY, or if COMPANY shall make an assignment for the benefit of creditors, then and in each and every such case, this Agreement shall immediately cease, terminate, and be canceled upon written notice by CITY and without the necessity of suit or other proceeding. (D) If COMPANY requests CITY’s consideration of and consent to an assignment, CITY may deny or approve such request in its complete discretion. CITY need not consider any request by COMPANY for consent to an assignment unless and until COMPANY has met the following requirements:
(i) COMPANY shall pay to CITY the transfer fee described in Section 15 (E). (ii) COMPANY shall furnish CITY with audited financial statements of the proposed assignee’s operations for the immediately preceding five (5) operating years. (iii) COMPANY shall furnish CITY with satisfactory proof that the proposed assignee has the demonstrated technical capability to perform all Collection Services, including: (a) that the proposed assignee has at least 10 years of experience in the provision and management of Solid Waste and Recyclables Collection Services on a scale equal to or exceeding the scale of operations conducted by COMPANY under this Agreement; (b) in the last five (5) years, the proposed assignee has not suffered any significant citations or other censure from any State, federal or local agencies and the assignee has provided CITY with a complete list of such citations and censures; (c) the proposed assignee has at all times conducted its operations in a environmentally safe and conscientious fashion; (d) the proposed assignee conducts its Solid Waste and Recyclables Collection Services in accordance with sound Solid Waste and Recyclables practices, and in full compliance with all federal, State and local laws regulating the collection and Disposal of Solid Waste including hazardous substances; and (e) any other information required by CITY to ensure the proposed assignee can fulfill the terms of this Agreement in a timely, safe and effective manner.
(E) Any application for an assignment transfer shall be made in a manner prescribed by the City Manager. The application shall include a nonrefundable transfer fee in the amount of Fifty Thousand Dollars ($50,000) to cover the cost of all direct and indirect administrative expenses including consultants and attorneys, necessary to adequately analyze the application and to reimburse CITY for all direct and indirect expenses. In addition, COMPANY shall reimburse CITY for any and all additional costs related to the assignment requested and not covered by the transfer fee. Bills shall be supported with evidence of the expense or cost incurred. COMPANY shall pay such bills within (30) days of receipt. The transfer fees are over and above any

32 COMPANY Fees specified in this Agreement.
(F) If CITY consents to an assignment, COMPANY shall cooperate with CITY and the assignee to assist in an orderly transition.

Section 16. Franchise Waste
It is expressly understood that all Solid Waste, Recyclable Material, Organic Material, and Construction and Demolition Debris collected under this Agreement becomes the property of COMPANY at the point in time it is loaded onto COMPANY’S vehicle, subject to the requirement of delivery of Solid Waste to a disposal site, Recyclable Material to a recycling facility, and Organic Material to an organic waste facility, and Construction and Demolition Debris to an appropriate disposal or processing facility. However, title to Hazardous Waste shall not pass to COMPANY pursuant to Section 6(A)(v) or 6(E) of this Agreement and shall remain with the generator, unless purposefully collected by COMPANY pursuant to one of the Hazardous Waste collection programs provided for in this Agreement. At no time does CITY obtain any right of ownership or possession of solid waste or recyclables placed for collection, and nothing in this Agreement shall be construed as giving rise to any inference that CITY has any such rights. CITY and COMPANY agree that, for the purposes of the Uniform Commercial Code and all other laws imposing liability for defective products, it is COMPANY, and not CITY that is to be considered the “merchant” of goods recycled pursuant to this AGREEMENT.

COMPANY shall ensure that all disposal, transfer, Recyclable Material processing, and Organic Material processing and Construction and Demolition Debris processing and/or disposal facilities owned and used by the COMPANY or other corporations affiliated with COMPANY in the performance of this Agreement are properly permitted and in material compliance with Applicable Law at all times during the Term. COMPANY shall immediately inform the City Manager in writing in the event of any material noncompliance with Applicable Law by such facility, and CITY, in its sole discretion, shall have the right to require the use of a different facility, to be selected by COMPANY. The City Council may also, in its sole discretion, require the use of a different site at any time during the Term if any such facility (as the case may be) is found to not be in material compliance with the provisions of this Section, and the City Council determines that such facility (as the case may be) is not acceptable due to a failure to comply with the terms of this Section or a finding by State or federal regulatory agencies that it is not in material compliance with Applicable Law, including the Environmental Statutes, and is unable to accept City’s Solid Waste, Construction and Demolition Debris, Organic Material or Recyclable Material (as the case may be).

COMPANY's written arrangements with its customers for collection of Recyclable Material or Organic Material within CITY (if any) will provide that, subject to the right of the customers to claim lost property, title and the right to possession, and liability for all recyclables which are set out for collection on the regularly scheduled collection day shall pass to COMPANY at the time they are placed in the COMPANY’s truck. The COMPANY shall have the right to

33 retain any benefit or profit resulting from its right to retain, recycle, compost, dispose of or use the recyclables that it collects. At no time does the CITY obtain any right of ownership or possession of recyclables placed for collection, and nothing in this Agreement shall be construed as giving rise to any inference that CITY has any such rights. COMPANY will utilize their best efforts to implement and maintain waste recovery or recycling programs. COMPANY shall have the first right and option and right of first refusal for the recycling of any type of material within the CITY subject to applicable laws. However, if COMPANY chooses not to recycle a type of material which CITY deems recyclable, CITY may, at its option, cause or implement independent recycling programs to handle said waste, provided that the proposed program does not conflict with the exclusive rights granted to COMPANY by this Agreement.

Section 17. Franchise Waiver
The waiver by CITY of any breach or violation of any term, covenant or condition of this Agreement or of any provision, ordinance or law shall not be deemed to be a permanent waiver of such term, covenant, condition, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, ordinance or law. The subsequent acceptance by CITY of any franchise or other fee or of any other monies which may become due hereunder to CITY shall not be deemed to be a waiver of any preceding breach of violation by COMPANY of any term, covenant or condition of this Agreement or of any applicable law or ordinance.

Section 18. Franchise Administration
The administration and enforcement of this Agreement shall be the responsibility of the City Manager or designated representatives of that office.

Section 19. Franchise Independent Contractor Status
It is agreed that COMPANY is an independent contractor, and all persons working for or under the direction of the COMPANY are the COMPANY's agents, servants, employees, and said persons shall not be deemed agents, servants or employees of CITY.

Section 20. Franchise Notice
All notices shall be personally delivered or mailed, via first class mail or nationally recognized overnight courier, to the below listed addresses. These addresses shall be used for delivery of service of process. Notices so sent shall be effective five (5) days after date of mailing, or upon date of personal delivery.

Address of COMPANY is as follows:

RECOLOGY SOUTH VALLEY

34 1351 Pacheco Pass Highway
Gilroy, CA 95020
with a copy to:

Recology South Valley
Attn: Legal Department
50 California Street, 24th Floor
San Francisco, CA 94111
Address of CITY is as follows:

City Manager
City of Morgan Hill
17575 Peak Ave.

Morgan Hill, CA 95037
with a copy to:

City Clerk
17575 Peak Avenue
Morgan Hill, CA 95037
Section 21. Continuity of Services
None of the following are to be considered an excuse from performance, and COMPANY shall be obligated to continue to provide service notwithstanding the occurrence of any or all of such events: (a) general economic conditions, interest or inflation rates, or currency fluctuation or changes in the cost of fuel, commodities, supplies or equipment; (b) changes in the financial condition of COMPANY or any of its subcontractors affecting their ability to perform their obligations; (c) the consequences of errors, neglect or omissions by COMPANY, or any subcontractor; (d) failure of any subcontractor or supplier to furnish labor, materials, service or equipment; (e) equipment failure; (f) changes in market prices for, or the unavailability of markets for, the sale or purchase of Recyclables; (g) the availability of any Disposal site or Processing facility; (h) labor unrest, including but not limited to strike, work stoppage or slowdown, sickout, picketing, or other concerted job action conducted by COMPANY’s, employees or directed at COMPANY, or a subcontractor. In the case of labor unrest or job action directed at a third party over whom COMPANY has no control, however, the inability of COMPANY to make collections due to the unwillingness or failure of the third party to provide reasonable assurance of the safety of COMPANY’s employees while making collections or to make reasonable accommodations regarding container placement and point of delivery, time of collection, or other operating circumstances to minimize any confrontation with pickets or the number of persons necessary to make collections, shall, to that limited extent, excuse performance. The foregoing excuse shall be conditioned on COMPANY’s cooperation in making collection at different times and in different locations.

In addition to any and all other legal or equitable remedies, in the event that COMPANY, for any reason whatsoever, fails, refuses or is unable to perform any Collection Service at the time and in the manner provided in this Agreement, and if, as a result thereof, Solid Waste accumulates

35 in the City to such an extent, in such a manner, or for such a time that the City Manager finds that such accumulation endangers or menaces the environment, public health, safety or welfare, then CITY shall have the right, but not the obligation, upon twenty-four (24) hours prior notice to COMPANY, to do either one or both of the following during the period of such emergency as determined by City Manager: (i) cause to be performed such services with other personnel without liability to COMPANY; (ii) to take possession of any or all of COMPANY’s land, equipment and other property used or useful in providing one or more of the Collection Services and to provide one or more of the Collection Services. Should CITY take possession of COMPANY’s equipment and other property pursuant to this Section, CITY shall exercise reasonable, ordinary care in the use of the equipment and property. Any action by CITY pursuant to this Section shall be without payment to COMPANY.

Notice of COMPANY’s failure, refusal or neglect to perform one or more Collection Services that meets the requirements of the previous paragraph may be given orally by telephone to COMPANY at its principal office and shall be effective immediately. Written confirmation of such oral notification shall be sent to COMPANY within twenty-four (24) hours of the oral notification. COMPANY further agrees that in such event:
(a) It shall fully cooperate with CITY to affect the transfer of possession of property to CITY for CITY’s use.
(b) It shall, if CITY so requests and to the extent feasible, keep in good repair and condition all of such property, provide all motor vehicles with fuel, oil and other service, and provide such other service as may be necessary to maintain the property in operational condition.

If CITY takes possession of COMPANY’S equipment and causes the equipment to be operated in the performance of any one or more Collection Services, as herein contemplated, CITY shall ensure that operators of the equipment are experienced, knowledgeable, and licensed to operate the equipment taken possession of by CITY. CITY shall indemnify, defend, and hold COMPANY harmless from any and all liability, claims, damages, suits, costs, and expenses that arise out of or in any way relate to CITY’s use of COMPANY’S equipment or property except from liability, claims, damages, suits, costs, and expenses that are the result of defects in COMPANY’S equipment or property. Further, as a condition precedent to exercising any rights described herein, CITY shall provide COMPANY with evidence of insurance reasonably satisfactory to COMPANY that would cover CITY’S conduct of any one or more Collection Services that CITY undertakes pursuant to this section. Such insurance shall include general liability, automobile liability, and workers compensation insurance and each policy maintained by the CITY shall name COMPANY as additional insured. CITY shall also provide maintenance of equipment and property in accordance with standard industry practices during the period of its use and shall return equipment and property to COMPANY in substantially the same condition and repair as on the date CITY took possession, normal wear and tear expected.

CITY’s exercise of its contractual rights under this Section does not constitute a taking of private property for which compensation must be paid; (ii) shall not create any liability on the part of CITY to COMPANY; and (iii) does not exempt COMPANY from the indemnity

36 provisions of Section 12, which are meant to extend to circumstances arising under this Article, provided that COMPANY is not required to indemnify CITY against claims and damages that are solely caused by the established active negligence or willful misconduct of City officers, employees, agents, or volunteers acting under this Section. CITY shall not affect a permanent taking of COMPANY’s property pursuant to this Section.

CITY’s right to retain temporary possession of COMPANY’s property, and to provide one or more Collection Services shall continue until COMPANY can demonstrate to CITY’s satisfaction that it is ready, willing and able to resume such services. CITY has no obligation to maintain possession of COMPANY’s property or continue its use in performing one or more Collection Services for any period of time and may, at any time, in its sole discretion, relinquish possession to COMPANY.

Separate from or in addition to assessing liquidated damages, CITY may also at its sole discretion promptly secure, or direct COMPANY to promptly secure, at COMPANY’s sole expense, substitute services, satisfactory to CITY, for when COMPANY is in breach, upon the same terms and conditions as provided in this Agreement.

Section 22. Franchise Termination
(A) All terms and specifications of this Agreement are material and binding, and failure to perform any portion of the work described herein shall be considered a breach of this Agreement. Failure or delay by either party to perform any term or provision of this Agreement constitutes a breach under this Agreement. The party who so fails or delays must immediately commence to cure, correct, or remedy such failure or delay and shall complete such cure, correction or remedy with reasonable diligence.
(B) Except as set forth in Sections 2(B) and 15 (B) and (C), neither party may exercise any rights or remedies upon a default by the other party, unless and until such default continues for a period of seven (7) days after written notice thereof from the non-defaulting party. If the nature of the default is such that more than seven (7) days are reasonably required for its cure, then the defaulting party shall not be deemed to be in default if it has commenced a cure within the seven (7) day period and thereafter diligently prosecutes such cure to completion within thirty (30) days after receipt of written notice thereof unless CITY and COMPANY mutually agree that curing the default will take longer than thirty (30) days and mutually determine a reasonable longer deadline. No such additional time to cure shall be allowed for failure to pay any amount due to either party under this Agreement, or if the nature of the default is such that the health, welfare, or safety of the public is endangered as determined by the City Manager. The notice of default shall specify the default complained of by the injured party. In the event of any conflict between the cure periods set forth in this subsection and any shorter cure periods set forth in an applicable Section of this Agreement, the shorter period shall control. (C) Delay in giving a notice of default shall not constitute a waiver of any default nor shall it change the time of default. Any failures or delays by either party in asserting any of its

37 rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies, nor deprive either party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies.
(D) If the City Manager determines that COMPANY’s performance pursuant to this Agreement may not be in conformity with the provisions of this Agreement, the Act (including, but not limited to requirements for Diversion, source reduction and Recycling as to the waste stream subject to this Agreement), or any other Applicable Law, including but not limited to, the laws governing transfer, storage or Disposal of Solid Waste or Hazardous Waste, the City Manager may advise COMPANY in writing of such suspected default in accordance with subsection 22(B), specifying the default in reasonable detail (the “Notice of Default”), and including the time within which COMPANY is to cure the default and respond, in accordance with subsection 22(B). COMPANY may request additional time to cure the default; CITY shall not unreasonably deny any such request.
(i) The City Manager shall review any written response from COMPANY and decide the matter or refer the matter to the City Council for consideration pursuant to this Section. If the City Manager’s decision is adverse to COMPANY, the City Manager may order remedial actions to cure any deficiencies or invoke any other remedy in accordance with this Agreement and, in the event the City Manager determines that there has been a material breach and that termination is the appropriate remedy, terminate this Agreement. The City Manager shall promptly inform COMPANY of the City Manager’s decision. In the event the decision is adverse to COMPANY, the City Manager shall inform COMPANY, in writing, of the specific facts found and evidence relied on, and the legal basis in provisions of this Agreement or other laws, for the City Manager’s decision and any remedial action taken or ordered. An adverse decision by the City Manager shall be final and binding on COMPANY unless COMPANY files a “Notice of Appeal” with the City Clerk (with copies to the City Manager and City Attorney) within seven (7) days of receipt of the notification of the adverse decision by the City Manager. (ii) In any “Notice of Appeal” to the City Council, COMPANY shall state all of its factual and legal contentions, citing provisions of this Agreement or other laws to support its contentions. Within twenty-one (21) days of the filing of the Notice of Appeal with the City Clerk, COMPANY shall deliver to the City Clerk three (3) copies of all relevant affidavits, documents, photographs and recordings that COMPANY may choose to submit. (E) If a matter is referred by the City Manager to the City Council, or an adverse decision of the City Manager is appealed to the City Council by COMPANY, the City Clerk shall set the matter for a hearing before the City Council. The City Clerk shall give COMPANY thirty (30) days written notice of the time and place of the hearing. At the hearing, the City Council shall consider the administrative record, including the following:
(i) A staff report by the City Manager, summarizing the proceedings to date and outlining the City Council’s options;

38 (ii) The City Manager’s written Notice of Default;
(iii) COMPANY’s response to the Notice of Default;
(iv) The City Manager’s written notification to COMPANY of adverse decision;
(v) COMPANY’s Notice of Appeal to the City Clerk; and
(vi) Any evidence submitted by COMPANY pursuant to paragraph (ii) of subsection 22(D).

No new legal issues may be raised, or new evidence submitted by COMPANY at this or at any further point in the proceedings, absent a showing of good cause. COMPANY’s representatives and other interested persons shall be provided a reasonable opportunity to be heard. (F) Based on the administrative record, the City Council shall determine by resolution whether the decision or order of the City Manager should be upheld. A tie vote of the City Council shall be regarded as upholding the decision of the City Manager. If, based upon the administrative record, the City Council determines that the performance of COMPANY is in breach of any provision of the Agreement or of any applicable federal, State or local statute or regulation, the City Council, in the exercise of its discretion, may order COMPANY to take remedial actions to cure the breach or impose any other remedy in accordance with this Agreement, including but not limited to termination. The decision or order of the City Council shall be final and binding.
(G) COMPANY’s performance under this Agreement is not excused during the period of time prior to a final determination as to whether or not COMPANY’s performance is in material breach of this Agreement, or the time set by CITY for COMPANY to discontinue a portion or all of its services pursuant to this Agreement.
(H) CITY reserves the right to terminate this Agreement in the event that COMPANY fails to cure any default within the applicable cure periods, including but not limited to the following:
(i) if COMPANY violates any material provision of any Applicable Law; (ii) if COMPANY fails to maintain the insurance or bonds required by Section 14, or fails to pay to CITY any monies due CITY pursuant to this Agreement, and fails to remedy such default within five (5) days after written notice thereof from CITY; (iii) there is a seizure or attachment (other than a prejudgment attachment) of, or levy affecting possession on, the operating equipment of COMPANY, including without limit its vehicles, maintenance or office facilities, or any part thereof of such proportion as to impair

39 COMPANY’s ability to perform under this Agreement and which cannot be released, bonded, or otherwise lifted within forty-eight (48) hours excluding weekends and Holidays; (iv) COMPANY fails to provide reasonable assurances of performance; (v) COMPANY fails to notify CITY in a timely manner of any receipt by COMPANY of any notice of violation or official communication from those regulatory agencies regulating Solid Waste, Construction and Demolition Debris, Recyclable Materials, and Organic Material Collection Services, transportation, Processing or Disposal activities, or street sweeping activities;
(vi) If COMPANY violates in any material respect any orders or filings of any regulatory body having jurisdiction over COMPANY relative to this Agreement, provided that COMPANY may contest any such orders or filings by appropriate proceedings conducted in good faith, in which case no breach of this Agreement shall be deemed to have occurred until a final decision adverse to COMPANY is entered;
(vii) if COMPANY ceases to provide Collection Services as required under this Agreement over all or a substantial portion of the area within the City, for a period of two (2) days or more, for any reason within the control of COMPANY, including but not limited to labor disputes;
(viii) if COMPANY fails to make any payment required under this Agreement and/or refuses to provide CITY with required information, reports, and/or records in a timely manner as provided for in this Agreement;
(I) Notwithstanding Sections 22 (A), 22(B) and 22(C), CITY reserves the right to terminate this Agreement, without the need to provide COMPANY an opportunity to cure, in the event of any of the following:
(i) if COMPANY practices, or attempts to practice, any fraud or deceit upon CITY, or practiced any fraud or deceit or made any misrepresentations in the negotiations which preceded the execution of this Agreement;
(ii) if COMPANY has received three (3) or more written Notices of Default in any twelve (12) month period, irrespective of whether or not the act or omission set forth in the notice was corrected or remedied within the time set forth in the notice, but excluding notices where, after investigation, the City Manager or City Council has determined that no default occurred, and also excluding notices relating to matters that are trivial.

Section 23. Compliance With Laws and Regulations
In the performance of this Agreement, COMPANY shall comply with all applicable laws, including implementing regulations, as they may be amended from time to time, including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act

40 ("CERCLA") 42 U.S.C. Sections 9601 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901, et seq., the California Integrated Waste Management Act of 1989, the provisions of the SB 1383 Final Regulations that apply directly to COMPANY by operation of law or are duties of COMPANY under this Agreement, all applicable air pollution control laws, applicable California labor laws, and all other applicable laws of the United States of America, the State of California, the County of Santa Clara, ordinances of the City, the requirements of Local Enforcement Agencies and other agencies with jurisdiction.

Section 24. General Contract Provisions
(A) Amendment & Modification. No amendments, modifications, alterations or changes to the terms of this Agreement shall be effective unless and until made in a writing signed by both parties hereto.
(B) Americans with Disabilities Act of 1990. Throughout the term of this Agreement, the COMPANY shall comply fully with all provisions of the Americans with Disabilities Act of 1990 (“the Act”) in its current form and as it may be amended from time to time that are directly applicable to COMPANY’s performance of this Agreement. ADA liability is not excluded from the indemnification and defense obligations of COMPANY under this Agreement.
(C) Attorneys’ Fees. If any action at law or in equity, including an action for declaratory relief, is brought to enforce or interpret the provisions of this Agreement, the prevailing party will be entitled to reasonable attorneys’ fees, which may be set by the court in the same action or in a separate action brought for that purpose, in addition to any other relief to which that party may be entitled.
(D) Captions. The captions and headings of the various sections, paragraphs and subparagraphs of the Agreement are for convenience only and shall not be considered nor referred to for resolving questions of interpretation.
(E) Compliance with Laws. The COMPANY shall keep itself informed of all Applicable Laws which directly relate to and affect those engaged or employed in the work, or the materials used in the work, or which in any way affect the conduct of the work performed by COMPANY under this Agreement. Without limiting the foregoing, COMPANY agrees to observe the provisions of the Municipal Code of the CITY OF MORGAN HILL, obligating every contractor or subcontractor under a contract or subcontract to the CITY OF MORGAN HILL for public works or for goods or services to refrain from discriminatory employment or

41 subcontracting practices on the basis of the race, color, sex, religious creed, national origin, ancestry of any employee, applicant for employment, or any potential subcontractor. (F) Conflict of Interest. COMPANY certifies that to the best of its knowledge, no CITY employee or officer of any public agency interested in this Agreement has any pecuniary interest in the business of COMPANY that may result in a violation of Government Code Section 1090 or the California Political Reform Act.
(G) Entire Agreement. This Agreement supersedes any and all prior agreements, whether oral or written, between the parties hereto with respect to the rendering of services by COMPANY for CITY and contains all the covenants and agreements between the parties with respect to the rendering of such services in any manner whatsoever. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein, and that no other agreement, statement or promise not contained in this Agreement shall be valid or binding.

No other agreements or conversations with any officer, agent or employee of CITY prior to execution of this Agreement shall affect or modify any of the terms or obligations contained in any documents comprising this Agreement. Such other agreements or conversations shall be considered as unofficial information and in no way binding upon CITY. (H) Governing Law and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to the conflict of laws provisions of any jurisdiction. The exclusive jurisdiction and venue with respect to any and all disputes arising hereunder shall be in state and federal courts located in Santa Clara County, California.
(I) Notices. Any notice to be given hereunder by either party to the other may be effected either by personal delivery in writing or by mail, registered or certified, postage prepaid with return receipt requested. Mailed notices shall be addressed to the parties at the addresses appearing in Exhibit “A”, Section V.H. but each party may change the address by written notice in accordance with this paragraph. Notices delivered personally will be deemed delivered as of actual receipt; mailed notices will be deemed delivered as of three (3) days after mailing. (J) Partial Invalidity. If any provision in this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions will nevertheless continue in full force without being impaired or invalidated in any way.

42 (K) Waiver. COMPANY agrees that waiver by CITY of any one or more of the conditions of performance under this Agreement shall not be construed as waiver(s) of any other condition of performance under this Agreement.

IN WITNESS THEREOF, these parties have executed this Agreement on the day and year shown below.

ATTEST: THE CITY OF MORGAN HILL
City Clerk City Manager
Date: Date
APPROVED: RECOLOGY SOUTH VALLEY
Risk Manager By:

Date: Date:

APPROVED AS TO FORM:

City Attorney
Date:

43 EXHIBIT A

SCHEDULE OF RATES
(Effective January 1, 2023)

Add
Current Current New
DESCRIPTION Rates 11.35% Rates
Residential Rates
BASIC SINGLE FAMILY 34.32 3.90 38.22
SGL FAM - NO STREET SWEEPING 33.90 3.85 37.75
HILLSIDE RESIDENTIAL 37.34 4.24 41.58
HILLSIDE RESIDENTIAL - NO SWEEPING 36.81 4.18 40.99
LOW INCOME 3.13 27.58 30.71
LOW INCOME - NO ST SWEEPING 27.24 3.09 30.33

EX YW CONTAINER RENT
BULKY MATERIAL (1-3 ITEMS) 45.70 5.19 50.89
BULKY MATERIAL (EACH EXTRA ITEM) 18.26 2.07 20.33
SIDE/BACKYARD SERV 13.70 1.56 15.26
SIDE/BACKYARD SERV Disabled FREE FREE FREE
TOTER RENTAL 5.80 0.66 6.46
RETURNED TRIP COLLECTION 35.76 4.06 39.82
Commercial Rates

GARBAGE
1 CAN COMM (32 GALLON) 21.00 2.38 23.38
2 CANS COMM (64 GALLON) 34.41 3.91 38.32
3 CANS COMM (96 GALLON) 47.91 5.44 53.35
4 CANS COMM (128 GALLON) 61.41 6.97 68.38
5 CANS COMM (160 GALLON) 74.89 8.50 83.39
6 CANS COMM (192 GALLON) 88.40 10.04 98.44
7 CANS COMM (224 GALLON) 101.83 11.56 113.39
8 CANS COMM (256 GALLON) 115.29 13.09 128.38
9 CANS COMM (288 GALLON) 128.78 14.62 143.40
10 CANS COMM (320 GALLON) 142.26 16.15 158.41
1 CAN COMM (32 GALLON) w/cart 29.84
2 CANS COMM (64 GALLON) w/cart 44.78
3 CANS COMM (96 GALLON) w/cart 59.81

ORGANICS
32 GALLON 1 X WEEK 1.91 16.80 18.71
32 GALLON 2 X WEEK 35.48
32 GALLON 3 X WEEK 52.24
32 GALLON 4 X WEEK 69.00
32 GALLON 5 X WEEK 85.77
32 GALLON CONTAMINATED Recycle and Organics 39.82
64 GALLON 1 X WEEK 3.13 27.53 30.66
64 GALLON 2 X WEEK 58.13
64 GALLON 3 X WEEK 85.60
64 GALLON 4 X WEEK 113.08
64 GALLON 5 X WEEK 140.55
64 GALLON CONTAMINATED Recycle and Organics 39.82
96 GALLON 1 X WEEK 4.35 38.32 42.67
96 GALLON 2 X WEEK 80.91
96 GALLON 3 X WEEK 119.13
96 GALLON 4 X WEEK 157.37
96 GALLON 5 X WEEK 195.60
96 GALLON CONTAMINATED Recycle and Organics 39.82

RECOLOGY SOUTH VALLEY

CITY OF MORGAN HILL
RATES EFFECTIVE JANUARY 1, 2023

Add
Current Current New
DESCRIPTION Rates 11.35% Rates

RECOLOGY SOUTH VALLEY

CITY OF MORGAN HILL
RATES EFFECTIVE JANUARY 1, 2023
Commercial Rates

GARBAGE
1 YD 1 X WEEK 179.85 20.42 200.27
1 YD 2 X WEEK 341.01 38.72 379.73
1 YD 3 X WEEK 502.14 57.01 559.15
1 YD 4 X WEEK 663.31 75.31 738.62
1 YD 5 X WEEK 824.43 93.61 918.04
1 YD 6 X WEEK 984.38 111.77 1,096.15
2 YD 1 X WEEK 260.66 29.60 290.26
2 YD 2 X WEEK 494.22 56.11 550.33
2 YD 3 X WEEK 727.75 82.63 810.38
2 YD 4 X WEEK 961.31 109.15 1,070.46
2 YD 5 X WEEK 1,194.81 135.66 1,330.47
2 YD 6 X WEEK 1,426.65 161.98 1,588.63
1/2 3 YD 1 X WEEK (Grandfather) 188.78 21.43 210.21
3 YD 1 X WEEK 377.57 42.87 420.44
3 YD 2 X WEEK 719.01 81.64 800.65
3 YD 3 X WEEK 1,060.54 120.42 1,180.96
3 YD 4 X WEEK 1,401.94 159.18 1,561.12
3 YD 5 X WEEK 1,743.40 197.95 1,941.35
3 YD 6 X WEEK 2,084.85 236.72 2,321.57
4 YD 1 X WEEK 488.55 55.47 544.02
4 YD 2 X WEEK 928.46 105.42 1,033.88
4 YD 3 X WEEK 1,368.41 155.37 1,523.78
4 YD 4 X WEEK 1,808.37 205.32 2,013.69
4 YD 5 X WEEK 2,248.28 255.27 2,503.55
4 YD 6 X WEEK 2,688.22 305.22 2,993.44
6 YD 1 X WEEK 729.96 82.88 812.84
6 YD 2 X WEEK 1,396.97 158.61 1,555.58
6 YD 3 X WEEK 2,063.98 234.35 2,298.33
6 YD 4 X WEEK 2,731.02 310.08 3,041.10
6 YD 5 X WEEK 3,398.06 385.82 3,783.88
6 YD 6 X WEEK 4,065.07 461.55 4,526.62
SPECIAL COLLECTION 30.00 3.41 33.41

ORGANICS
1 YD 1 X WEEK 16.34 143.88 160.22
1 YD 2 X WEEK 30.97 272.80 303.77
1 YD 3 X WEEK 45.61 401.71 447.32
1 YD 4 X WEEK 60.25 530.64 590.89
1 YD 5 X WEEK 74.89 659.54 734.43
1 YD 6 X WEEK 89.41 787.51 876.92
1 YD CONTAMINATED Recycle and Organics 50.07
2 YD 1 X WEEK 23.68 208.53 232.21
2 YD 2 X WEEK 44.89 395.37 440.26
2 YD 3 X WEEK 66.10 582.20 648.30
2 YD 4 X WEEK 87.32 769.05 856.37
2 YD 5 X WEEK 108.53 955.85 1,064.38
2 YD 6 X WEEK 129.59 1,141.32 1,270.91
2 YD CONTAMINATED Recycle and Organics 72.57
3 YD 1 X WEEK 34.30 302.06 336.36
3 YD 2 X WEEK 65.31 575.22 640.53
3 YD 3 X WEEK 96.33 848.43 944.76
3 YD 4 X WEEK 127.34 1,121.56 1,248.90
3 YD 5 X WEEK 158.36 1,394.72 1,553.08
3 YD 6 X WEEK 189.37 1,667.87 1,857.24
3 YD CONTAMINATED Recycle and Organics 105.11
4 YD 1 X WEEK 44.38 390.85 435.23

Add
Current Current New
DESCRIPTION Rates 11.35% Rates

RECOLOGY SOUTH VALLEY

CITY OF MORGAN HILL
RATES EFFECTIVE JANUARY 1, 2023
4 YD 2 X WEEK 84.34 742.78 827.12
4 YD 3 X WEEK 124.30 1,094.72 1,219.02
4 YD 4 X WEEK 164.26 1,446.69 1,610.95
4 YD 5 X WEEK 204.22 1,798.62 2,002.84
4 YD 6 X WEEK 244.18 2,150.58 2,394.76
4 YD CONTAMINATED Recycle and Organics 136.01
6 YD 1 X WEEK 66.30 583.97 650.27
6 YD 2 X WEEK 126.89 1,117.57 1,244.46
6 YD 3 X WEEK 187.48 1,651.19 1,838.67
6 YD 4 X WEEK 248.07 2,184.81 2,432.88
6 YD 5 X WEEK 308.66 2,718.44 3,027.10
6 YD 6 X WEEK 369.24 3,252.06 3,621.30
6 YD CONTAMINATED Recycle and Organics 203.21
SPECIAL COLLECTION Per yard 2.72 23.99 26.71
REGULAR COMPACTOR (PER YARD) 47.39 5.38 52.77
RECYCLE COMPACTOR (PER YARD) 28.01 3.18 31.19
SUPER COMPACTOR (PER YARD) 94.74 10.76 105.50
20 YARD DEBRIS BOX 521.51 59.21 580.72
35 YARD DEBRIS BOX 745.03 84.59 829.62
40 YARD DEBRIS BOX 869.25 98.70 967.95

ORGANICS
20 YARD DEBRIS BOX 47.37 417.21 464.58
35 YARD DEBRIS BOX 67.67 596.02 663.69
40 YARD DEBRIS BOX 78.96 695.40 774.36
Debris Box Contaminated
20 YARD DEBRIS BOX Contaminated 580.72
35 YARD DEBRIS BOX Contaminated 829.62
40 YARD DEBRIS BOX Contaminated 967.95
Debris Box Return Trip Fee 75.00
PERM RENTAL 276.30 31.37 307.67
PERM DISPOSAL (PER YARD) 25.99 2.95 28.94
CARDBOARD COMPACTOR w/ garbage serviceFREE FREE FREE
20 YARD CARDBOARD w/ garbage service FREE FREE FREE
40 YARD CARDBOARD w/ garbage service FREE FREE FREE
20 YARD OTHER RECYCLABLES 266.57 30.27 296.84
40 YARD OTHER RECYCLABLES 444.33 50.45 494.78
20 YARD DEBRIS BOX HILLSIDE 650.24 73.83 724.07
40 YARD DEBRIS BOX HILLSIDE 997.49 113.26 1,110.75
Compactor Front Loader Service
2 YARD COMPACTOR 1 X WEEK 410.68 46.63 457.31
2 YARD COMPACTOR 2 X WEEK 821.35 93.26 914.61
2 YARD COMPACTOR 3 X WEEK 1,232.03 139.89 1,371.92
3 YARD COMPACTOR 1 X WEEK 616.03 69.94 685.97
3 YARD COMPACTOR 2 X WEEK 1,232.03 139.89 1,371.92
Super Compactor Front Loader Service
2 YARD COMPACTOR 1 X WEEK 821.17 93.24 914.41
2 YARD COMPACTOR 2 X WEEK 1,642.33 186.47 1,828.80
2 YARD COMPACTOR 3 X WEEK 2,463.50 279.71 2,743.21
3 YARD COMPACTOR 1 X WEEK 1,231.74 139.85 1,371.59
3 YARD COMPACTOR 2 X WEEK 2,463.50 279.71 2,743.21
Special Street Sweeping
M-F 8:00AM-5:00PM (PER HOUR) 75.00 - 75.00
ALL OTHER HOURS (MINIMUM + HOURLY) - 500.00 500.00

44 EXHIBIT A2

RATE ADJUSTMENT FORMULA

45 EXHIBIT B

INSURANCE REQUIREMENTS
COMPANY shall, for the duration of the franchise agreement, procure, maintain, and provide proof of the insurance coverage required herein in the form of certificates and endorsements acceptable to City. The required insurance must cover the activities of COMPANY including its subcontractors, employees, and agents, relating to or arising from the performance of the work and activities under this agreement. The coverages may be arranged under a single policy for the full limits required or by a combination of underlying policies with the balance provided by excess or “umbrella” policies, provided each such policy complies with the requirements set forth herein. All required insurance must be issued by a company licensed and admitted, or otherwise legally authorized to carry out insurance business in the State of California, and each such insurer must have an A.M. Best’s financial strength rating of “A-” or better and a financial size rating of “VIII” or better. If COMPANY fails to provide any of the required coverage in full compliance with the requirements of the Agreement Documents, City may, at its sole discretion, purchase such coverage at COMPANY’s expense and deduct the cost from payments due to COMPANY, or terminate the agreement for default. COMPANY further understands that City reserves the right to modify the insurance requirements set forth herein, with thirty (30) days’ notice provided to COMPANY, at any time as deemed necessary to protect the interests of City. The procurement of the required insurance will not be construed to limit COMPANY's liability under this agreement or to fulfill COMPANY's indemnification obligations under this agreement. (A) Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared to and approved by the City. If the City’s Risk Manager determines that the deductibles and/or self-insured retentions are unacceptably high, at City’s option, COMPANY must either reduce or eliminate the deductibles and/or self-insured retentions as they apply to City and all required Additional Insured; or must provide a financial guarantee, to City’s satisfaction, guaranteeing payment of losses and related investigation, claim administration, and legal expenses.
(B)
(B) Policies and Limits. The following insurance policies and limits are required for this Agreement:
(1) Commercial General Liability Insurance (“CGL”). COMPANY shall maintain CGL and must include coverage for liability arising from COMPANY’s or its Subcontractors’ acts or omissions in the performance of its work and activities against claims and liabilities for personal injury, death, or property damage providing protection in the minimum amount of: (i) five million dollars ($5,000,000.00) combined single limit for any one accident or

46 occurrence and a general aggregate limit of ten million dollars ($10,000,000.00) under COMPANY’s combined insurance policies (including any excess or “umbrella” policies).
(2) Workers’ Compensation Insurance and Employer’s Liability:

COMPANY shall maintain Workers Compensation coverage, as required by law. The policy must comply with the requirements of the California Workers’ Compensation Insurance and Safety Act and provide protection in the minimum amount of: (i) Two Million Dollars ($2,000,000.00) for any one accident or occurrence. If COMPANY is self-insured, COMPANY must provide its Certificate of Permission to Self-Insure, duly authorized by the Department of Industrial Relations.
(3) Automobile Liability: COMPANY shall maintain Automobile Liability covering all owned, non-owned and hired automobiles (if COMPANY does not own automobiles, then COMPANY shall maintain Hired/Non-owned Automobile Liability) against claims and liabilities for personal injury, death, or property damage providing protection in the minimum amount of: (i) Five Million Dollars ($5,000,000.00) combined single limit for any one accident or occurrence, or (ii) the maximum amount of such insurance available to COMPANY under COMPANY’s combined insurance policies (including any excess or “umbrella” policies), whichever is greater.
(4) Pollution (Environmental) Liability: Because the performance of COMPANY’s work or service under this Agreement involves hazardous materials, COMPANY shall procure and maintain Pollution Liability covering COMPANY's liability for bodily injury, property damage and environmental damage resulting from pollution and related cleanup costs arising out of the work or services to be performed under this Agreement. Coverage shall be provided for both work performed on site, as well as during the transport of hazardous materials. Such coverage shall be in the minimum amount of Two Million Dollars ($2,000,000.00) for any one accident or occurrence. (C) Required Endorsements. COMPANY must provide proof of the following endorsements, listed for each policy for which endorsements are required, as outlined below:

47 (1) For all Policies:
a. “Waiver of Subrogation” endorsements providing that the carrier agrees to waive any right of subrogation it may have against the City of Morgan Hill and the City’s elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers.
(2) General Liability, Automobile, and Pollution Liability:
a. “Additionally Insured” endorsements naming the City of Morgan Hill, its elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers as additional insureds on a form at least as broad as ISO Form CG 20 10 for ongoing operations;
b. “Primary and Non-Contributing” endorsements stating that the policy is primary non-contributing and will not seek contribution from the City’s insurance or self-insurance and shall be at least as broad as ISO Form CG 20 01;
(3) General Liability:
a. “Separation of Insureds” endorsements stating that the inclusion of more than one insured will not operate to impair the rights of one insured against another, and the coverages afforded will apply as though separate policies have been issued to each insured.
(D) Subcontractors. COMPANY will request all subcontractors performing work in connection with this Agreement to maintain the following minimum insurance: Workers’ Compensation in accordance with applicable law or regulation, Employer’s Liability with limits of $500,000, Commercial General Liability with limits of $1,000,000 per occurrence and $2,000,000 in the annual aggregate, and Automobile Liability insurance with limits of $1,000,000. The insurance requirements for subcontractors do not replace or limit the COMPANY’s insurance obligations.
(E) Certificates. COMPANY must furnish City with copies of all certificates as outlined herein, whether new or modified, promptly upon receipt. In the event of a claim or legal action, COMPANY shall furnish CITY of Morgan Hill with redacted copies of policies applicable to claim or legal action. No policy subject to COMPANY’s Agreement with City shall be reduced, canceled, allowed to expire, or its liability limits and coverages altered except after endeavoring to provide thirty (30) days' notice by the insurer to City, unless due to non-payment of premiums, in which case ten (10) days written notice must be made to City. A “material change” is a change that results in non-compliance with any insurance requirements in this section 8. Certificates, including renewal certificates, may be

48 mailed electronically to [email protected] or delivered to the Certificate Holder address as follows:

City of Morgan Hill
Attn: Risk Management
17575 Peak Avenue
Morgan Hill, CA 95037

49 EXHIBIT C
SB 1383 RELATED MATTERS
Defined Terms. This Exhibit uses certain terms defined in Section 18982 of the Final SB 1383 Regulations issued in November 2020 (the “Final Regulations”). For ease of reference, when such terms are used herein, they are generally capitalized. Unless otherwise defined in this Agreement or unless the context otherwise requires, as used in this Exhibit, terms defined in said Section 18982 shall carry the meanings set forth therein.

Compliance Method. The following SB 1383 requirements assume the use of a “standard” compliance approach in accordance with the Final Regulations. For information purposes only, and without intending to modify City or Contractor’s obligations under this Agreement or applicable law, it is understood between the parties that a "standard” compliance approach means an approach to compliance other than a Performance-Based Approach pursuant to Section 18998.1 of the Final Regulations, so that the city shall not be entitled to compliance exemptions under Section 18998.2 of the Final Regulations.

City and Contractor agree to meet and confer as needed to discuss changes to Contractor’s operations related to Exhibit C as necessary or appropriate to meet CalRecycle’s expectations for compliance with SB 1383. If the changes to the Contractor’s operations entail additional costs or require additional services to be provided, Contractor and City shall mutually agree on the compensation to be provided to Contractor in advance of Contractor’s implementation of such change.

During the Term of this Agreement, City may elect to pursue a “performance-based Source Separated collection service” approach in accordance with Section 18998.1 as set forth in the Final Regulations. In general terms, based on the Final Regulations, the performance-based compliance approach would require provision of at least three Containers for Source Separated Collection of Discarded Materials to ninety percent (90%) of Residential Customers and to ninety percent (90%) of Commercial Customers, while reducing some requirements for the City and the Contractor, as described in Section 18998.2. The performance-based compliance approach places significant added responsibility on Processors; Contractor would coordinate with the Approved Facility(ies) as necessary to ensure Organic Materials and Recyclable Materials are provided in a form that allows for Processing in accordance with the Final Regulations. Contractor would also coordinate with the Approved Facility(ies) as necessary to ensure Solid Waste characterization studies can be conducted in accordance with the Final Regulations. Should the City elect to pursue such a performance-based compliance approach, the City Contract Manager and Contractor shall meet and confer at least one (1) year prior to the implementation of the performance-based approach.

Notwithstanding the foregoing or any other provision, Contractor shall not be required to implement the performance-based approach or any related services unless and until the parties mutually agree in writing as to the specific obligations Contractor is to perform and the compensation to Contractor for the same.

50 Key SB 1383 Staff. Contractor shall hire three (3) half time fully qualified individuals for the new Contractor staff positions of SB 1383 Compliance Specialist, Outreach and Education Specialist, and Hauler Route Reviewer(s). The SB 1383 Compliance Specialist and Outreach and Education Specialist shall have primary responsibility for planning and executing all compliance, outreach, issuance of communication and follow-up levels, and technical assistance activities necessary to ensure successful implementation of all SB 1383-related requirements of Contractor set forth in this Agreement, including managing the work of any technical assistance Subcontractors hired by Recology at Recology’s sole discretion, as applicable, and ongoing close coordination with the City Contract Manager and their designees.

Section 1. SB 1383 Inspections and Follow-Up
General. Contractor shall perform Customer Compliance Reviews and Complaint Investigations as described in this Section commencing as soon as practicable after the Effective Date of the contract and no later than June 30, 2023, and at least annually thereafter, unless otherwise noted.

1.1 Commercial Generator Desktop Compliance Reviews
Contractor shall complete a compliance review of all Multi-Family and Commercial Customers that subscribe for two (2) cubic yards or more per week of Solid Waste, including Organic Materials, to determine whether they:
(i) are subscribed for Organic Materials collection service and/or Recyclable Material collection service, as applicable,
(ii) have an applicable waiver,
(iii) have notified Contractor in writing that they are in compliance with the SelfHauling requirements set forth in Section 18988.3 of the Final Regulations and the Morgan Hill City Code, including whether such Commercial Customer is complying through Back-Hauling Organic Materials, or
(iv) have indicated on their waiver application or in a separate writing to Contractor that a hired landscaper hauls their organic waste and that organic waste generation post-hauling is below the organics recycling subscription threshold (in which case they need to apply for a De Minimis Waiver, see Section 6.1).

Commercial Generator Desktop Compliance Reviews shall consist of a “desk” review of records to determine Customers’ compliance with the above requirements and does not require on-site observation of service.

51 1.2 Annual Hauler Route Reviews
Beginning as soon as practicable after the Effective Date of the contract and no later than June 30, 2023, and annually thereafter, the Contractor shall initiate annual Hauler Route Reviews of Commercial, Multi-Family, and Single-Family customers in accordance with the terms set forth in Section 2 of this Exhibit C.

1.3 Food Recovery Compliance Reviews
The City anticipates fulfilling the City’s obligations to address edible food recovery through its participation in regional programs coordinated by other entities. Contractor acknowledges that the collection of and regulatory activities addressing recoverable edible food that are contemplated by the SB 1383 regulations are outside of the exclusive rights City grants to Contractor in this Agreement. Should these other programs fail to adequately address the City’s obligations for edible food recovery, City and Contractor may discuss expanding Contractor’s activities in order to fulfill City’s regulatory obligations. Should the City and Contractor mutually elect to utilize Contractor’s services to support the Food Recovery Program, Contractor may recover its reasonable and necessary costs for performing these services as EXCEPTIONAL COSTS in its rate application for the year following provision of the services.

1.4 Complaint Investigations for SB 1383-Noncompliance
A. Reporting to City. Prior to commencement of investigation of complaints received in which a Person alleges that an entity is in violation of SB 1383 requirements, Contractor shall provide a brief complaint report to the City Contract Manager for each SB 1383-noncompliance complaint within five (5) Working Days of receipt of such complaint.

B. Investigation. Contractor shall assist City in meeting its obligation to investigate written and oral complaints by commencing an investigation within ten (10) business days of receiving a complaint in the following circumstances: (i) upon Contractor receipt of a complaint that an entity may not be compliant with SB 1383; and (ii) upon City Contract Manager request to investigate a complaint received by City.

Contractor is required to investigate complaints against Customers only, and not against Edible Food recovery organizations, Edible Food recovery services, and other entities regulated by SB 1383, and is only required to investigate complaints related to services provided by Contractor.

52 Contractor shall investigate the complaint by:
i) Reviewing the Service Level of the Customer; Reviewing the waiver list, if applicable, to determine if the entity has a valid, City-approved de minimis, space constraint, or Collection frequency waiver;
ii) Reviewing the Self-Haul customer list, if applicable, to determine if the customer is on the list;
iii) Contacting the entity to gather more information and inspecting Premises of the entity identified by the complainant, if warranted;
iv) If non-compliance is confirmed during the process of investigation, then the Contractor shall proceed through the levels of communication and follow-up detailed below in Section 1.5 (A) or (B) as applicable.

C. Documentation of Complaints. The Contractor shall enter all complaints received or investigated by Contractor as required in the Contractor Implementation Record including an electronic investigation complaint log that documents the Customer account in question, the nature of the complaint, the investigation performed, dates of outreach conducted and/or communication and follow-up levels issued per Section

1.5 (A) or (B), as applicable, whether or not the customer investigated was found to be in violation of SB 1383, and the final resolution. This information shall be available to the City Contract Manager as described in Section 8, Reporting, below.

1.5 Communication and Follow-Up for Desktop Compliance Reviews and Complaint Investigations
A. Non-Compliant Entities through December 31, 2023. When compliance reviews or complaint investigations are performed by Contractor, Contractor shall provide City-approved educational materials where Contractor has determined a Customer is either not properly subscribed for service based on the results of a Commercial Generator Desktop Compliance Review, where Contractor has identified Prohibited Container Contaminants during the performance of a Hauler Route Review (as described in Section 2), or if a Complaint Investigation confirms a violation.

Contractor shall provide these educational materials to the non-compliant Customers within two (2) Working Days of determination of any non-compliance discovered as a result of a Commercial Generator Desktop Compliance Review or Complaint Investigation or immediately upon identification of Prohibited Container Contaminants during a Hauler Route Review.

53 B. Communication and Follow-Up for Commercial Generator Desktop Compliance Reviews and Complaint Investigations Beginning January 1, 2024.

If a Commercial Generator Desktop Compliance Review leads to the determination that a customer is not properly subscribed for service, or if a Complaint Investigation confirms a violation then Contractor shall proceed through the levels of communication and follow-up including:
i) issuance of a Notice of Referral to the City requiring compliance within 40 days of the issuance of that notice, to be issued within two (2) Working Days of determination of non-compliance, accompanied by outreach and educational materials;
ii) issuance of a 25-day warning letter that reiterates the non-compliance issue, action items, and deadline for compliance;
iii) issuance of a 10-day warning letter that reiterates the non-compliance issue, action items, and deadline for compliance; and
iv) referral to City if non-compliance issue remains unresolved after 45 days of determination of non-compliance.

For the purpose of this document, the Notice of Referral to City is defined as a notice that a violation has occurred that includes a compliance date for the noncompliant customer to avoid an action by City to seek penalties.

When a violation is referred to the City, the Contractor shall provide the following information at the time of referral: Customer’s account information, the nature of the violation, then-current Service Level, Contractor’s efforts to resolve the violation to-date, and any other documentation that may be useful to the City as they escalate communication and follow-up to enforcement that may include penalties and fines.

C. Documentation of Communication and Follow-Up. City Contract Manager shall be immediately notified of contamination or compliance issues when it will result in a Referral to the City by the Contractor. This will provide an opportunity for the City to witness contamination and take photo documentation.

Contractor shall keep up-to-date records and documents required in the Contractor Implementation Record including Customers and Generators with SB 1383 violations, the type of educational materials provided, levels of communication and follow-up issued, and the resolution, along with dates the outreach and/or levels of communication and follow-up were issued. This information shall be available to the City Contract Manager per the requirements of Section 8, Reporting, below.

54 Section 2. Hauler Route Review Methodology / SB 1383 Contamination Minimization Program
Contractor shall assist in minimizing Contamination by helping to educate Customers on acceptable and non-acceptable materials, by monitoring the contents of Collection Containers, and by refusing to Collect Containers with visible Prohibited Container Contaminants.

Commencing with the Effective Date of the contract, Contractor shall hire staff or a consultant to complete the Hauler Route Reviews in accordance with the procedures described in this Section (Section 2). The Hauler Route Reviews shall be completed no later than December 31of each year of the Agreement. The Contractor shall conduct Hauler Route Reviews for Prohibited Container Contaminants in Containers in a manner that is deemed safe by the Contractor and is conducted in a manner that results in all Hauler Routes being reviewed annually. Annual Hauler Route Reviews shall be conducted in accordance with the Annual Hauler Route Review Methodology set forth in this section. The following reflects the original methodology as established at the effective date of this agreement. Contractor and City shall annually review and amend the methodology as needed to ensure SB 1383 compliance, and any change in methodology agreed to shall be documented in writing and shall be deemed to be incorporated herein by this reference.

2.1 Annual Hauler Route Review Methodology
At least once annually, Contractor shall conduct a Route Review for each Hauler Route. A Hauler Route is the designated weekly itinerary or sequence of stops scheduled to be performed by one collection vehicle providing regularly scheduled Solid Waste, Recyclable Material or Organic Material collection services (not on-call or Bulky Item Collection Program services) within the service area.

For each Route Review, the Contractor shall visually inspect the contents of the number of Containers set forth below. Each inspection shall involve observing the contents of the Container (whether by lifting the lid, using a camera, or other method deemed appropriate by Contractor), but shall not require Contractor to disturb the contents or open any bags.

The Containers shall be randomly selected by a method approved by the City Contract Manager. For the avoidance of doubt, Contractor shall not be required to annually inspect every Container on a Hauler Route.

If Contractor finds Prohibited Container Contaminants in a Container during a Route Review, Contractor shall notify the customer of the violation in writing by following the communication and follow-up levels described below in Section 2.3. Contractor may dispose of the contents of any Container found to contain Prohibited Container Contaminants.

55 2.2 Number of Inspections
Containers on Hauler Routes shall be inspected consistent with the Table shown below.

Contractor may if it wishes, but shall not be required to, inspect more than the number of Containers identified in the table. Contractor’s practice shall be to only inspect one Container per customer service location per Route Review (e.g., 40 Containers = 40 locations). Contractor may inspect more Containers per location if Contractor wishes, but those additional Containers shall not count towards the number in the table.

Route Size (# accounts
serviced per week)
Number of Containers
to be Inspected per
Hauler Route in City’s
Collection
service area
Less than 1,500 25
1,500-4,000 30
4,001-7,000 35
7,001 or more 40

City reserves the right to require additional inspections if the City determines that the amount of inspections conducted by the Contractor is insufficient. City may require the Contractor to prioritize inspections of entities that the City determines are more likely to be out of compliance. Contractor shall be entitled to recover its reasonable and necessary costs for performing any additional inspections as EXCEPTIONAL COSTS in its rate application for the year following provision of the services.

2.3 Communication and Follow-Up for Hauler Route Reviews If Prohibited Container Contaminants are discovered during a Hauler Route Review, then Contractor shall proceed through the levels of communication and follow-up immediately upon determination of non-compliance, including:
i. issuance of a Courtesy Notice with Educational Materials for containers with <10% contamination by volume; and
ii. issuance of a Notice of Non-Collection with Educational Materials for containers with >10% contamination by volume, in addition to a Return Trip Fee and, if applicable, an additional Garbage Collection Fee as described in Section 2.5.

56 2.4 Documentation of Hauler Route Reviews
The Contractor shall maintain documentation for each Hauler Route Review conducted.

The documentation shall include all records and documents relating to Hauler Route Reviews that are required to be included in the Contractor Implementation Record, including noncompliant account numbers, locations of contamination issues, date of identified contamination, summary of findings, notifications/education issued, number of containers on route, and number of containers inspected. The foregoing information shall be available to the City Contract Manager per the requirements of Section 8, Reporting, below.

Contractor shall permit observation of Route Reviews by the City. In addition, Contractor shall upon request by City provide email notice to the City’s Contract Manager of the upcoming scheduled Hauler Route reviews that includes the specific time(s) and location(s).

2.5 Assessment of Contamination Fees/Return Trip Fee
No sooner than one hundred twenty (120) days following the Commencement Date, Contractor and City shall meet and confer to discuss potential use of Contamination Fees for Customers that do not properly sort their Discarded Materials. In the event Contractor leaves a Customer a non-collection notice as a result of contamination, Contractor shall return to Customer Premises to Collect Contaminated materials as garbage and charge a return trip fee and, if applicable, additional garbage collection fee.

2.6 Communications with Customers
Contractor shall be the primary contact with customers for the communication and follow-up set forth in Section 1.3 of this document.

2.7 Disposal of Contaminated Materials
Contractor may Dispose of Contaminated materials observed in Customer’s Organic Materials Container or Recyclable Materials Container.

2.8 Reporting Requirements
Contractor shall maintain records and report to the City Contract Manager on Contamination monitoring activities and actions taken as required per the Contractor Implementation Record. This information shall be available to the City Contract Manager per the requirements of Section 8, Reporting, below.

Section 3. SB 1383 Container Requirements

57 To ensure continued compliance with SB 1383 Container color and labeling requirements, and in coordination with any related activities that occur prior to the Commencement Date, Contractor shall confer with the City Contract Manager prior to placing any orders for, purchasing, taking delivery of, and/or utilizing any new Containers when there are material changes in the cart style, sizes, labels, colors, etc.

3.1 Color Standards
Contractor shall provide Collection Containers to customers that comply with color requirements when replacing containers with any containers that have been newly purchased by Contractor. Colors shall be green for organic wastes, blue for recycling, and grey for landfill waste. Containers provided to customers starting service shall conform to the above color scheme. Recology and City shall agree to work collaboratively on Debris Box color standards and labeling.

3.2 Labeling Requirements
Imprinted or In-Mold Labels for New Containers. Commencing with the Effective Date of the contract, all new Containers provided by the Contractor that are purchased by Contractor shall be imprinted with text or graphic images that indicate the primary materials accepted and the primary materials prohibited in that Container. Labels shall clearly indicate items that are Prohibited Container Contaminants for each Container. Prior to ordering any Containers or lids with in-mold labels, Contractor shall submit a sample of its proposed label, proposed location(s) for placement of labels on each type of Container, and its labeling plan to the Contract Manager for approval.

Section 4. Food Recovery Program
The City anticipates fulfilling the City’s obligations to address edible food recovery through its participation in regional programs coordinated by other entities. Contractor acknowledges that the collection and regulatory activities addressing recoverable edible food that are contemplated by the SB 1383 regulations are outside of the exclusive rights City grants to Contractor in this Agreement. Should these other programs fail to adequately address the City’s obligations for edible food recovery, City and Contractor may discuss expanding Contractor’s activities in order to fulfill City’s regulatory obligations. Should the City and Contractor mutually elect to utilize Contractor’s services to support the Food Recovery Program, Contractor may recover its reasonable and necessary costs for performing these services as EXCEPTIONAL COSTS in its rate application for the year following provision of the services.

58 Section 5. Education and Outreach
All program related education and outreach materials designed by Recology and in collaboration with the City and distributed by the Contractor in compliance with the requirements of the Agreement, shall be translated into Spanish. This includes both printed materials and digital outreach including social media posts, website, etc. All program related education and outreach efforts designed by Recology and in collaboration with the City shall be documented for inclusion in the Contractor Implementation Record including number of people reached, type of message delivered, distribution type, etc.

Section 6. SB 1383 Generator Waiver Program Coordination The following SB 1383 waivers are defined in Section 18984.11 as set forth in the Final Regulations, for implementation, individually or collectively, at City discretion. Should the City elect to allow one or more Generator waivers pursuant to SB 1383, Contractor shall coordinate with City as necessary to comply. Contractor understands and accepts that Contractor’s scope of services, and provision of services may be affected by City grant of waivers.

Contractor shall cooperate with and coordinate with the City regarding verification of eligibility for waivers in accordance with the following steps: 1) Contractor shall respond to Customers requesting De Minimis or Physical Space waivers and provide the Customer with the appropriate City application form; 2) Contractor shall verify the information provided by the customer on the application, and submit to the City for review; 3) City reviews waiver application materials, approves or declines the waiver application, and returns to Contractor the completed application form that has been updated with City’s approval or denial of the waiver for Contractor to distribute to Customer; 4) Contractor provides Customer with completed application form that indicates City’s approval or denial of the waiver application; 5) Contractor maintains an up-to-date list in the Contractor Implementation Record of Customers that have been granted waivers by City; and 6) at least every five years from the date of issuance, Contractor shall verify that commercial businesses are still meeting requirements of granted de minimis and physical space waivers. All parts of the waiver issuance process shall be recorded on one form including Customer application, Contractor verification, and City approval/denial.

Contractor shall verify information included in waiver applications in the following manner and indicate findings on the application form:
i. For Physical Space Waiver applications, Contractor will verify whether the Container storage area(s) at the service address are in Contractor’s opinion sufficient to add a Recyclable Materials and/or Organic Materials container (whichever one(s) the Customer is seeking a physical space waiver for). “Container storage area” means a contiguous area designated by the Customer for storage of Refuse, Recyclable Materials, and/or Organic Materials Containers.

59 ii. For De Minimis Waiver applications, Contractor will verify the estimated weekly volume of Organic Materials and/or Recyclable Materials generated by the Customer and discarded in the Solid Waste Containers at the service address. The estimate shall be based on a single visual inspection of the contents of Container(s) at the service address.

Each inspection shall involve observing the contents of the Container(s) by the method deemed appropriate by Contractor but shall not require Contractor to disturb the contents or open any bags.

6.1 De Minimis Waivers (Three-Container Systems)
The City may elect to waive a Commercial Customer’s obligation to comply with some or all of the Recyclable Materials and Organic Materials requirements as set forth in this Agreement, pursuant to SB 1383, and in the Municipal Code if the Commercial Customer provides documentation or the City has evidence demonstrating one of the following de minimis conditions:
i) The Commercial Customer’s total Solid Waste Collection service is two (2) cubic yards or more per week, and its Organic Materials or Recyclable fibers comprises less than twenty (20) gallons per week of organic waste subject to collection, per applicable Container, of the Commercial Business’ total waste; or, ii) The Commercial Customer’s total Solid Waste Collection service is less than two (2) cubic yards per week, and its Organic Materials or Recyclable fibers comprises less than ten (10) gallons per week of organic waste subject to collection, per applicable Container, of the Commercial Business’ total waste.

When a Customer submits an application for a De Minimis Waiver and the Customer indicates on their application that a landscaper hauls away green waste, Contractor shall collect contact information from the Customer’s application for the landscaping company that is removing the organic waste from the site and provide that information to the City as part of the De Minimis Waiver application.

6.2 Physical Space Waivers
The City may elect to waive a Commercial Customer’s or Property Owner’s obligation to comply with some or all of the Recyclable Materials or Organic Materials Collection service requirements as set forth in this Agreement, pursuant to SB 1383, and in the Morgan Hill City Code if the Commercial Customer or Property Owner provides documentation, or the City has evidence from its staff, the Contractor, licensed architect, engineer, or similarly qualified source demonstrating that the Premises lacks adequate space for Recyclable Materials and/or Organic Materials Containers. Should the City elect to grant such physical space waivers, Multi Family Customers that do not have sufficient space to comply with some or all of the Organic Materials Collection service

60 requirements set forth in this Agreement may be required to Self-Haul Organic Materials to the Approved Facility, subject to Applicable Law.

6.3 Collection Frequency Waivers
The City may elect to allow the Contractor to provide Collection of Solid Waste once every fourteen (14) days, rather than once per week, for Customers that have been granted a Collection frequency waiver from the City.

6.4 Contractor Recordkeeping of Generators Granted Waivers Contractor shall maintain waiver-related records identified on the Contractor Implementation Record and report on waiver verifications per the requirements of Section 8, Reporting, below.

Section 7. SB 1383 Procurement Requirements
Contractor’s responsibilities regarding compost procurement arrangements are identified in Recital I and Section 5.J of the Agreement. Contractor shall be proactive in evaluating commercially available SB 1383-compliant vehicle fuel for use in Contractor vehicles.

Section 8. Record Keeping
Contractor shall supply City with the following categories of complete and up-to-date records as required in the Contractor Implementation Record:
• Route Reviews
• Waivers and Exemptions
• Education and Outreach
• Compliance Reviews
• Complaint Investigation
• Edible Food Recovery (if Recology support of Food Recovery Program becomes needed) • Contamination Minimization (in event of a switch to Performance-Based Approach) Contractor and City shall mutually agree on the format of all forms required as part of the Contractor Implementation Records, as well as the setup of the electronic folder system where all forms shall be stored in the agreed-upon folders. As of the date of this Agreement, the City and Contractor agree that the accompanying documentation shall be organized into the appropriate files as identified in the Contractor Implementation Record, once the format and contents are mutually agreed upon by Contractor and City as stated above.

Contractor shall enter required data into the Contractor Implementation Record and save corresponding documentation in the agreed-upon Filing System within five (5) business days of

61 any change affecting data within any required reporting category and within one (1) business day of notification from CalRecycle request to review implementation record. All information shall be entered into a shared electronic platform that meets data security and confidentiality criteria agreed upon by Contractor and City.

62 EXHIBIT D

DESIGNATED FACILITIES
As of July 1, 2022, the designated facilities for disposal or processing of Solid Waste Matter are as follows:
(i) Solid Waste shall be disposed of at John Smith Road Landfill in Hollister, California or another facility designated by Waste Solutions Group of San Benito, LLC in accordance with the CITY’s disposal agreement.
(ii) Recyclable Material shall be transferred at COMPANY’s San Martin Transfer Station and then processed at GreenWaste Recovery in San Jose, California or other facilities determined by COMPANY.
(iii) Organic Material shall be processed at COMPANY’s affiliate’s South Valley Organics facility in Gilroy, California.
(iv) Construction and Demolition Debris shall be processed at Pacific Coast Recycling in Gilroy, California or other facilities determined by COMPANY.

63 EXHIBIT E

COMMUNITY EDUCATION AND OUTREACH

CORE REQUIREMENTS
Recology’s outreach in Morgan Hill will be comprised of the items listed below. All printed materials, web and other content will have cohesive appearance. The Recology corporate branding will serve as the default, except in cases where the City and Recology have agreed on a different visual theme.

All materials will be provided in English and Spanish and/or using universal imagery or symbols.

The organics stream will be included and at times emphasized to assist the City with SB 1383 compliance.

Strategic Outreach Plan
In collaboration with City staff, Recology will create a Strategic Outreach Plan will be created in Year 1 of the contract that will guide the overall approach and major deliverables. The Plan will be updated on an annual basis by Recology, in collaboration with City staff.

Website
COMPANY will update the existing website upon initiation of the new Agreement. Subsequent updates will be made over the duration of the Agreement.

Recycling Guide
A guide will be distributed to all three customer types (Commercial, Multifamily, and Residential) at the beginning of each calendar year. The guide will provide “how-to” information for all three streams (Waste, Recycling, and Organics), using text and helpful images. In addition, the guide will contain helpful information about the bulky item pick-up program and safe disposal of household hazardous waste, sharps, prescription drugs, and other hard-to-dispose items.

New Start Packets
New Start Packets will be designed for each customer segment, and will contain the following collateral:

Residential
• Welcome letter with customer service, billing and other basic information. • Residential Recycling Guide

64 • Calendar indicating recycling and street sweeping information Multifamily
• Welcome letter
• Multi-family Recycling Guide
• In-unit “buddy bags” to assist residents with transport of recyclables to the common recycling area(s) or chutes. Buddy bags will depict program information and Recology’s contact information.

Commercial
• Welcome letter
• Commercial Recycling Guide
• Supply sheet with information on how to request sorting posters, internal containers, etc.

Quarterly Communications
Quarterly communications to customers may include the following methods, as determined jointly by the City and Recology:
• Print newsletter
• Electronic newsletter
• Bill insert/flyer, printed
• Bill insert/flyer, electronic
• Direct-mail, such as letters or postcards
• Social Media
• Other collateral, as agreed upon by the City and Recology Technical Assistance
Recology will provide technical assistance to the following customer types:

Commercial
• Recology staff will work to enroll all eligible businesses, institutions, and other commercial customers for all three streams.
• Recology will provide trainings to staff to help them engage in their programs and properly sort material.
• Recology will offer tailored outreach to specific commercial sectors and accounts, focusing on contamination reduction and increased diversion.

MFD
• Recology staff will work to enroll all multi-family complexes in all three streams. • Recology staff will provide trainings to building managers, custodial staff, and other stakeholders.

65 • Recology will offer tailored outreach to specific multi-family complexes, focusing on contamination reduction and increased diversion.

Schools/Youth
• Recology will give presentations to schools and closely affiliated groups.

66 EXHIBIT F

STREET SWEEPING
(a) Scope of Services.
(i) Contractor shall perform street sweeping operations using appropriate vehicles on all designated City streets, as identified by the City and approved by the Contractor, no less frequently than once every two weeks, weather permitting, except as provided below.
(ii) Contractor shall perform street sweeping operations using appropriate vehicles in City business districts and on arterial streets, as identified by the City and approved by the Contractor, noless frequently than once per week, weather permitting. (iii) Contractor shall perform street sweeping operations using appropriate vehicles on the parking lots at City Facilities (as designated on Exhibit G), no less frequently than once every two weeks, weather permitting.

Notwithstanding the foregoing or anything else in this agreement, Contractor shall not be required to perform street sweeping operations on any street, parking lot, or portion thereof that Contractor determines is unsafe or poses a threat of damage to Contractor’s equipment. (b) Performance Requirements.
(i) Contractor will provide sufficient equipment to guarantee uninterrupted service to City, at Contractor's sole cost and expense. Contractor shall maintain the equipment in good repair and operating condition and shall provide all fuel, lubricants, tires, and all materials and supplies for the operation thereof. (ii) Contractor, at its sole cost and expense, shall furnish competent personnel to operate all equipment and such other employees as required to furnish adequately the service required in this Section and will further comply with the following:
o In the performance of the street sweeping services described in this Exhibit F, Contractor agrees to comply with all requirements of Chapter 1 of Part 7 of Division 2 of the Labor Code as they are directly applicable to such services, including requirements pertaining to wages, working hours and workers’ compensation insurance. o Contractor shall take cognizance of the prevailing wage requirements set forth in California Labor Code Sections 1720, et seq. and 1770, et seq. applicable to certain “public works” and Maintenance” projects and that the performance of the street sweeping services described in this Agreement is subject to compliance monitoring and enforcement by the Department of Industrial Relations.

67 o Contractor shall not enter into a contract with a subcontractor for the performance of the street sweeping services described in this Exhibit F unless the subcontractor is registered with the California Department of Industrial Relations to perform public work under Labor Code Section 1725.5, subject to limited legal exceptions.
(iii) Contractor shall be solely responsible for disposal of all sweepings collected by Contractor in the performance of services pursuant to this Section. (iv) Contractor shall not be required to perform street sweeping in any new subdivision or development in the City until the public improvements of the subdivision or development have been accepted by the City. (v) Contractor shall be provided with access and the materials necessary to obtain water from City water hydrants and shall be allowed to use such water as necessary to perform duties under this Section free of charge. (c) Service Exclusions. Contractor and City agree that the street sweeping performed by Contractor pursuant to this Agreement shall be limited to the collection and disposal of routine debris from streets. For the avoidance of doubt, Contractor is not required to perform the following:
(i) Street sweeping to clear debris from public emergencies and traffic accidents; and
(ii) The clearing of hazardous waste.

68 EXHIBIT G

SERVICES TO CITY FACILITIES
(as of December 1, 2022)

CORPORATION YARD

COMMUNITY PARK

CIVIC CENTER - COUNCIL CHAMBER

EL TORO FIRE STATION

DUNNE HILL FIRE STATION

VILLA MIRAMONTE/MORGAN HILL HISTORICAL SOCIETY

COMMUNITY CULTURAL CENTER

MORGAN HILL POLICE DEPARTMENT

MORGAN HILL OUTDOOR SPORTS CENTER

CIVIC CENTER - CITY HALL

GALVAN PARK

MORGAN HILL OUTDOOR SPORTS CENTER

MORGAN HILL COMMUNITY GARDEN

AQUATICS CENTER

PARKING GARAGE

PLAYHOUSE

CITY STREET CANS

City Council
Meeting Minutes
Rich Constantine - Mayor
Gino Borgioli - Mayor Pro Tem
John McKay - Council Member
Yvonne Martinez Beltran - Council Member
Rene Spring - Council Member
Wednesday, November 2, 2022 7:00 PM
Hybrid Meeting
17555 Peak Avenue, Morgan Hill, CA 95037 and Virtual (Link to join the meeting can be found below)

CALL TO ORDER
Mayor Constantine called the City Council meeting to order at 7:00 p.m.

ROLL CALL ATTENDANCE
Deputy City Clerk Kim Mancera called the roll.

PRESENT Rich Constantine, Rene Spring, Gino Borgioli, John McKay, Yvonne Martinez Beltran (arrived at 7:03 p.m.)

DECLARATION OF POSTING AGENDA
Deputy City Clerk Kim Mancera declared the posting of the agenda.

PROCLAMATIONS
Proclaiming the month of November 2022 as Philanthropy Month.

CITY COUNCIL REPORTS
Mayor Pro Tem Borgioli announced that he met with the Jewish Community about two months ago, at the Palo Alto Jewish Community Center. They had representatives there from the State Attorney General's Office. Representative Anna Eshoo and about

November 2, 2022
2 30 other elective officials all proclaimed to do whatever they can about hate speech and anti-semitism. He had a meeting regarding the Upper Llagas Flood Control last week. He advised that the tunnel is slightly behind but the project is on schedule. It is in preparation for the conduit from PG&E and various communication vehicles, such as Frontier and Charter, to put their lines in the tunnel. They are getting close to where PG&E comes in and starts laying their lines in the tunnel and following them is the communication vehicles. PG&E is not able to provide the crew what they had promised and they are putting together a plan to mitigate that to make sure that this project is on schedule.

November 2, 2022
3 CITY MANAGER'S REPORT
City Manager Christina Turner mentioned that we are thankful for the rain but are still in a drought. We need to continue to conserve and always conserve. November 1st marked the beginning of our new irrigation schedule. Tuesday November 1st - February 28th, watering is limited to Wednesdays only. This applies to all potable water, including wells. Irrigation is allowed before 9am and after 7pm. You can find out more information on our website.

She was excited to share that Morgan Hill Open Studios is scheduled for November 5th and 6th at multiple locations. This was created in collaboration with the Library, Culture and Arts Commission (LCAC) and our City. Open Studios operates as a project under Morgan Hill Community Foundation's El Toro Culture and Arts Committee. There are 52 artists throughout the area that are showcasing their art media. You can visit morganhillopenstudios.org to find out where the artists are and to see some samples.

This Saturday, November 5th at 2:30 p.m., at our Magical Bridge Playground is the Dia de los Muertos celebration. Join our Kindness Ambassadors and our Youth Action Council leaders for art projects, face painting and a talent show on the playhouse stage.

Another item that was brought forward by LCAC and members of our community with Congregation Emeth is the United Against Hate week. This is observed nationally from November 13-19th. The City's LCAC Commission will be leading this effort along with other community organizations and Congregation Emeth. Since our City has adopted several anti-hate resolutions in the past, the primary goal of this campaign is to bring this message to our community. You can go online and download a poster about Morgan Hill standing against hate. There will be a kick-off event on Sunday, November 13th from 2:00 -3:30 p.m. with music and different events.

Additionally, there are two items related to our City's core value of professional development. First is the Next Generation Silicon Valley Committee. She serves as a member on that committee and this Next Gen committee offers programs to enhance knowledge about local government agencies, career opportunities and skill advancement. In October, we hosted Tomorrow's Department Head Forum, which brings together City Managers, department heads, and recruiters to learn what it takes to move to the next level. Individuals in our County, as well as San Mateo, met and learned a variety of career and professional items on panels and breakout sessions. A couple of our teammates, Matt Mahood and Chris Ghione, participated. It also involved rounds of speed coaching, all in the spirit of professional development.

She concluded by sharing that we hosted the Santa Clara County Leadership Academy at the Community and Cultural Center. We were excited to host here as most of the events in the Silicon Valley are happening in the North. Two of our teammates went through the program, Elysa Olivares, Senior Human Resources Analyst, and Keri Russell, our Maintenance Manager, graduated from the program

November 2, 2022
4 and we celebrated the graduation here. This is a large-scale, multi-month academy that involves people from multiple disciplines. They engage in different activities each month and do a group project. Our City along with San Jose, sponsored one of the projects about continuity of operations during and after a large scale disaster and Jennifer Ponce helped out with that effort.

CITY ATTORNEY'S REPORT
None.

OTHER REPORTS
Council Member Martinez Beltran reminded everyone that it is the last chance to visit the Dia de los Muertos alter on Monterey in Downtown. It will come down tomorrow.

Today is Dia de los Muertos and an exciting time to celebrate the joyous time of those who have passed and whom we love and remember.

Council Member McKay would like to honor and celebrate Native American Heritage Month. It is the month of November.

PUBLIC COMMENT
Public comment opened at 7:11 p.m. The following people were called to speak:

Joe Baranowski with ceded time from Rob Guynn
Pilar Furlong
There being no further requests to speak, public comment closed.

Public Comment Supplement 1

ADOPTION OF AGENDA
MOTION:

Adopting the agenda as posted.

RESULT: Passed
MOVER: Council Member Martinez Beltran
SECONDER: Mayor Pro Tem Borgioli
AYES: Mayor Constantine, Council Member Spring, Mayor Pro Tem Borgioli, Council Member McKay, Council Member Martinez Beltran
NAYS: None
ABSTAIN: None
ABSENT: None

November 2, 2022
5 CONSENT CALENDAR
Items appearing on the Consent Calendar are considered routine and may be approved by one motion. Pursuant to City Council Policies and Procedures (CP 97- 01), any member of the Council or public may request to have an item removed from the Consent Calendar for comment and action.

Time Estimate for Consent Calendar: 1 - 10 Minutes
MOTION:

Approving consent calendar items 1 and 3 through 5.

RESULT: Passed
MOVER: Council Member Martinez Beltran
SECONDER: Council Member McKay
AYES: Mayor Constantine, Council Member Spring, Mayor Pro Tem Borgioli, Council Member McKay, Council Member Martinez Beltran
NAYS: None
ABSTAIN: None
ABSENT: None

1. ADOPT ORDINANCE 2336, NEW SERIES, AMENDING SECTION 14.04.040 (GENERAL REQUIREMENTS) AND SECTION 14.040.060 (CONTINUED

AFFORDABILITY AND CITY REVIEW OF OCCUPANCY) OF CHAPTER

14.04 (INCLUSIONARY HOUSING) OF TITLE 14 (HOUSING) TO CLARIFY

INCLUSIONARY HOUSING REGULATIONS AND ENACTING CHAPTER

18.48 (DENSITY BONUS) OF TITLE 18 (ZONING) OF THE MUNICIPAL

CODE OF THE CITY OF MORGAN HILL REGARDING GRANTING OF

DENSITY BONUS, INCENTIVES/CONCESSIONS AND WAIVERS OR

REDUCTION OF DEVELOPMENT STANDARDS FOR HOUSING PROJECTS

THAT INCLUDE AFFORDABLE UNITS, AS REQUIRED BY STATE LAW (AB 1763)
Recommendation:

Waive the reading, adopt Ordinance No. 2336, New Series, and declare that said title, which appears on the agenda, shall be determined to have been read by title and further reading waived.

3. APPROVE THE REVISED COMMUNITY SERVICE OFFICERS

ASSOCIATION (CSOA) SALARY SCHEDULES
Recommendation:

Approve the revised Community Service Officers Association (CSOA) salary schedules to include the approved Community Services Officer position.

November 2, 2022
6 4. APPROVE THE SEPTEMBER 28, 2022 CITY COUNCIL MEETING MINUTES Recommendation:

Approve minutes.

5. APPROVE THE OCTOBER 19, 2022 CITY COUNCIL MEETING MINUTES Recommendation:

Approve minutes.

ITEMS PULLED FOR DISCUSSION

2. APPROVE CONTRACT WITH EXELOO CORPORATION FOR THE

PURCHASE OF A SELF-CLEANING RESTROOM AT GALVAN PARK
Recommendation:

Authorize the City Manager to execute a contract with Exeloo Corporation for a not to exceed amount of $300,000 to purchase a self-cleaning restroom at Galvan Park.

Public comment opened at 7:23 p.m. There being no requests to speak, public comment closed.

MOTION:

Approving the recommended action.

RESULT: Passed
MOVER: Mayor Pro Tem Borgioli
SECONDER: Council Member Spring
AYES: Mayor Constantine, Council Member Spring, Mayor Pro Tem Borgioli, Council Member McKay, Council Member Martinez Beltran
NAYS: None
ABSTAIN: None
ABSENT: None

PUBLIC HEARING

6. ADOPT ORDINANCE 2337, NEW SERIES, AMENDING CHAPTERS 15.08 (BUILDING CODE),15.12 (ELECTRICAL CODE), 15.16 (MECHANICAL CODE), 15.20 (PLUMBING CODE), AND 15.44 (FIRE CODE) TO ADOPT BY REFERENCE THE 2022 CALIFORNIA STATE BUILDING STANDARDS

CODES KNOWN AND DESIGNATED AS CALIFORNIA CODE OF
REGULATIONS, TITLE 24 AMENDING CHAPTER 15.25 (PROPERTY

November 2, 2022
7 MAINTENANCE) TO ADOPT BY REFERENCE THE 2021 INTERNATIONAL

PROPERTY MAINTENANCE CODE AND TO MAKE MINOR CHANGES TO
SECTIONS IN CHAPTERS 15.65 (SUSTAINABLE BUILDING
REGULATIONS) AND 15.66 (SWIMMING POOLS) OF TITLE 15 (BUILDING

AND CONSTRUCTION) OF THE MORGAN HILL MUNICIPAL CODE
Recommendation:

1. Open/close the public hearing;

2. Waive the second reading of the ordinance; and

3. Adopt the ordinance.

Building Official Eric Blomquist gave a report.

The public hearing opened at 7:25 p.m. There being no requests to speak, public comment closed.

MOTION:

Waiving the second reading of the ordinance.

RESULT: Passed
MOVER: Council Member Spring
SECONDER: Mayor Pro Tem Borgioli
AYES: Mayor Constantine, Council Member Spring, Mayor Pro Tem Borgioli, Council Member McKay, Council Member Martinez Beltran
NAYS: None
ABSTAIN: None
ABSENT: None
MOTION:

Adopting the ordinance.

RESULT: Passed
MOVER: Council Member Spring
SECONDER: Council Member McKay
AYES: Mayor Constantine, Council Member Spring, Mayor Pro Tem Borgioli, Council Member McKay, Council Member Martinez Beltran
NAYS: None
ABSTAIN: None
ABSENT: None

November 2, 2022
8 OTHER BUSINESS

7. APPROVE CONCEPTUAL DESIGN FOR THE BUTTERFIELD FIRE STATION

PROJECT
Recommendation:

1. Approve Conceptual Design for the Butterfield Fire Station Project; and

2. Adopt resolution approving and making the required findings as outlined in the staff report.

Senior Project Manager Yat Cho and Jeff Katz of COAR Design Group gave a presentation and answered questions.

Public comment opened at 7:50 p.m. The following people were called to speak:

Joe Baranowski
Sean Reese
There being no further requests to speak, public comment closed.

MOTION:

Approving the recommended action.

RESULT: Passed
MOVER: Council Member McKay
SECONDER: Mayor Pro Tem Borgioli
AYES: Mayor Constantine, Council Member Spring, Mayor Pro Tem Borgioli, Council Member McKay, Council Member Martinez Beltran
NAYS: None
ABSTAIN: None
ABSENT: None

PUBLIC HEARING

8. APPROVE AMENDMENTS TO THE GENERAL PLAN AND CERTIFY A

SUBSEQUENT ENVIRONMENTAL IMPACT REPORT (SEIR), ADOPT

FINDINGS OF SIGNIFICANCE AND A STATEMENT OF OVERRIDING

CONSIDERATIONS AND APPROVE MITIGATION MONITORING

REPORTING PLAN FOR THE COCHRANE COMMONS RETAIL CENTER
AND ASSOCIATED LAND. THE PROPERTIES, IDENTIFIED BY ASSESSOR PARCEL NUMBERS: 728-37-056, -069, AND -041, ARE LOCATED ON THE NORTHEAST CORNER OF HIGHWAY 101, COCHRANE ROAD, AND

MISSION VIEW DRIVE, (MORGAN HILL RETAIL VENTURE LP, OWNER) Recommendation:

1. Open/Close public hearing;

November 2, 2022
9 2. Adopt resolution certifying the SEIR, adopt Findings of Significance and Statement of Overriding Considerations and approve the Mitigation Monitoring and Reporting Program prepared for the project;

3. Adopt resolution approving an amendment to the General Plan land use designation;

4. Waive the first and second reading of Zoning Amendment Ordinance; and

5. Introduce Zoning Amendment Ordinance
Development Services Director Jennifer Carman gave a presentation and answered questions.

The public hearing opened at 8:42 p.m.

Applicant Darryl Browman of Browman Development Co. gave a presentation and answered questions.

The meeting recessed at 9:21 pm and reconvened at 9:31 pm.

The following public speakers were called to speak:

Rick Kent
Gene Guglielmo
Joe Baranowski with ceded time from Rob Guynn
There being no further requests to speak, the public hearing closed.

MOTION:

Adopting resolution certifying the SEIR.

RESULT: Passed
MOVER: Council Member Martinez Beltran
SECONDER: Council Member McKay
AYES: Mayor Constantine, Council Member Spring, Mayor Pro Tem Borgioli, Council Member McKay, Council Member Martinez Beltran
NAYS: None
ABSTAIN: None
ABSENT: None
MOTION:

Adopting the resolution approving an amendment to the General Plan land use designation.

RESULT: Passed
MOVER: Council Member Martinez Beltran
SECONDER: Council Member Spring

November 2, 2022
10 AYES: Mayor Constantine, Council Member Spring, Mayor Pro Tem Borgioli, Council Member McKay, Council Member Martinez Beltran
NAYS: None
ABSTAIN: None
ABSENT: None
MOTION:

Waiving the first and second reading of the ordinance with the addition of the 55' height restriction.

RESULT: Passed
MOVER: Council Member Martinez Beltran
SECONDER: Council Member Spring
AYES: Mayor Constantine, Council Member Spring, Mayor Pro Tem Borgioli, Council Member McKay, Council Member Martinez Beltran
NAYS: None
ABSTAIN: None
ABSENT: None
MOTION:

Introducing the ordinance.

RESULT: Passed
MOVER: Council Member Martinez Beltran
SECONDER: Council Member Spring
AYES: Mayor Constantine, Council Member Spring, Mayor Pro Tem Borgioli, Council Member McKay, Council Member Martinez Beltran
NAYS: None
ABSTAIN: None
ABSENT: None

FUTURE COUNCIL INITIATED AGENDA ITEMS
Mayor Pro Tem Borgioli requested a discussion on electric bicycles on walking paths.

Council Member Spring requested further discussion and clarification of the terms boutique and full service hotel.

November 2, 2022
11 Council Member Martinez Beltran requested to address and discuss the comment from the Carpenters Union on the project.

ADJOURNMENT
There being no further business, Mayor Constantine adjourned the meeting at 9:54 p.m.

Minutes Prepared by:

Kim Mancera, Deputy City Clerk

10 CITY COUNCIL STAFF REPORT
MEETING DATE: November 16, 2022
PREPARED BY:

Cynthia Iwanaga, Management Analyst
APPROVED BY: City Manager

AWARD LANDSCAPE MAINTENANCE SERVICE AGREEMENT FOR

CITY PARKS, MEDIANS, AND DOWNTOWN

RECOMMENDATION(S)

1. Award a Maintenance Service Agreement to Brightview Landscape Services, Inc. in the amount of $274,608 for a two-year period ($137,304 annually) to service Group 1: Park Mowing at City Parks; Group 3: Street Medians, Streetscapes, and Parking Lots; and Group 6: Downtown Area and extra services, with three consecutive one-year extensions, subject to future annual budget appropriations by the City Council; and

2. Authorize the City Manager to execute and administer said Agreement.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety
Protecting the Environment and Preserving Open Space and Agricultural Land 2022-2023 Strategic Priorities
Fiscal Sustainability
REPORT NARRATIVE:

The purpose of this report is to summarize the recent Request for Proposals (RFP) process and provide the City Council with an opportunity to award a landscape maintenance service agreement to Brightview Landscape Services, Inc. in the not-toexceed amount of $274,608, and authorize the City Manager to execute and administer the said agreement. Services provided under this agreement include park mowing and edging, landscape maintenance, and irrigation management of street medians, streetscapes, and City facilities located throughout the City and in the Downtown.

The City has contracted with professional landscape contractors for various landscape maintenance services for many years as an approach to cost effectively serve the City.

The work has been divided into six separate groups as a way to diversify the City's bidding opportunities. This Request for Proposals (RFP) was released for two years of

10 service for Group 1 (Parks Mowing and Edging), Group 3 (Street Medians, Streetscapes, Parking Lots, and Miscellaneous City Facilities), and Group 6 (Downtown).

As the City's current maintenance service agreement expires on December 31, 2022, the Request for Proposals (RFP) was released on August 8, 2022. Three proposals were received on September 16, 2022, from Bayscape Management, Brightview Landscape Services, and New Image Landscape Company. In soliciting proposals for this agreement, the City advertised in the Morgan Hill Times on August 5, 2022 and August 12, 2022. The RFP was posted on the City website, Public Purchase, and the Builders' Exchange of Santa Clara County. Contractors registered on the City's Informal Bidders List with the required Contractor State Licensing Board (CSLB) license Class C27 (Landscape Contractor) were also notified of the RFP. The RFP may be viewed on the City website via the following link: https://www.morganhill.ca.gov/bids.aspx?bidID=398 The proposals were reviewed in a two-step process. Proposals were first evaluated based on narrative responses to questions. They were scored for previous work experience, work quality, references, staff qualifications, and communication systems. A total of 40 points were available for the narrative responses to questions. Proposals receiving a minimum 30 out of 40 points were then evaluated based on weighted averages for each firm's pricing for Group 1, Group 3, Group 6, average hourly rates, and percentage % mark-up. All three contractors received the minimum 30 points in the narrative section and their cost schedules were then evaluated in the second step of the review process. Bayscape Management inadvertently misstated their unit pricing for Diana Park and Howard Weichert Park higher than they intended, but staff was unable to make changes to pricing after the proposals were submitted. It is noted for informational purposes that correcting the misstated pricing would not have changed the outcome of the RFP. Attached is the scoring summary.

Based on the narrative responses and the weighted cost proposal scoring, Brightview Landscape Services is the responsive bidder with the lowest cost proposal. Brightview Landscape Services has successfully partnered with Bay Area municipalities for over 10 years. They are the City of Morgan Hill's current landscape maintenance services provider.

Staff recommends the award of the landscape maintenance service agreement to Brightview Landscape Services, Inc. for the not-to-exceed amount of $274,608 for two years, which is $137,304 per year, subject to future annual budget appropriations by the City Council (Attachment 2). The annual amount of $137,304 includes a base amount of $107,304 for scheduled services and up to $30,000 in extra services such as irrigation valve replacements and the rejuvenation of landscape areas. The agreement specifies that extra services are only to be provided with the prior approval of the City's Maintenance Manager or their designee. The new agreement would have a two-year term from January 1, 2023 to December 31, 2024, with authorization for the City Manager to execute three consecutive one-year extensions subject to future annual budget appropriations by the City Council. The amount of each amendment may not

10 increase more than five percent (5%) annually, that is, the amendment amount may not exceed 105% of the previous year's annual amount. The maximum not-to-exceed amount for the two-year agreement with three one-year extensions is $729,101.

COMMUNITY ENGAGEMENT:

Inform
As landscape maintenance services are a regular and expected City service, no efforts were made to inform the community about this proposed agreement. The actual landscape maintenance work resulting from this agreement is shared via City communication tools, including "The Scoop," a weekly maintenance activities update on the City website and Nextdoor Morgan Hill. Signs will be posted when landscape maintenance services are performed that will affect or impair access to the street or public sidewalks.

ALTERNATIVE ACTIONS:

An alternative action would be to not approve this agreement or to modify the approval in some way, however, this is not recommended as it would jeopardize ongoing landscape maintenance and safety.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The City Council awarded the prior landscape maintenance service agreement for Groups 1, 3, and 6 to Brightview Landscape Services, Inc. on December 6, 2017.

FISCAL AND RESOURCE IMPACT:

The funding for landscape maintenance services is included in many areas of the City's operating budget (Fund 010 - General Fund) including Street Maintenance, Park Maintenance, and Downtown Maintenance, and in the Landscape Assessment Districts.

CEQA (California Environmental Quality Act):

Categorical Exemption
The activities described in this Staff Report are categorically exempt under CEQA, specifically pursuant to Section 15301 (c) of the CEQA Guidelines (Existing Facilities), as the subject work involves the repair, maintenance or minor alteration of existing City facilities involving negligible or no expansion of use of those facilities.

Morgan Hill: 2022 Landscape Maintenance Groups 1, 3 and 6 RFP Scoring Matrix

NARRATIVE SCORING

NARRATIVE
Points
Available Bayscape Brightview New Image

15.0 14.7 12.7 12.310.0 9.0 8.5 8.2
Qualifications of Staff to be assigned to provide landscape maintenance services 5.0 4.3 4.0 4.2

10.0 8.8 8.0 8.7
SUBTOTAL‐ NARRATIVE POINTS 40.0 36.8 33.2 33.3COST PROPOSAL COST PROPOSAL SCORING Item
Price from
Lowest Bidder Bayscape Brightview New Image
Points
Available Bayscape Brightview New Image
Group 1 Total Bid 36,144.00 153,502.00 36,144.00 37,872.00 20.0 4.7 20.0 19.1 Group 3 Total Bid 37,680.00 104,123.00 37,680.00 71,088.00 20.0 7.2 20.0 10.6 Group 6 Total Bid 33,480.00 91,626.00 33,480.00 48,108.00 15.0 5.5 15.0 10.4 Average of Extra Work Hourly
Rates 59.75 89.75 59.75 132.00 3.0 2.0 3.0 1.4% Material Mark‐Up Over Costs 10.00 15.00 10.00 30.00 2.0 1.3 2.0 0.7
SUBTOTAL‐PRICING POINTS 60.0 20.8 60.0 42.2
GRAND TOTAL 100.0 57.6 93.2 75.5
Assessment of Work Quality, Performance and Working Relationships with Clients that indicate high levels of satisfaction and effectiveness
Previous Experience providing a superior level of landscape maintenance services at like‐sized facilities w/similar scopes of work
Organized Communication Systems and reporting capabilities that demonstrate efficiency and effectiveness

1 Updated: July 2022

MAINTENANCE SERVICE AGREEMENT
Brightview Landscape Services, Inc.

Groups 1, 3 & 6
THIS AGREEMENT is entered into and becomes effective on _______________ (Effective Date), by and between the CITY OF MORGAN HILL, a municipal corporation, ("CITY"), and Brightview Landscape Services, Inc. a California corporation ("SERVICE PROVIDER") hereinafter referred to collectively as “Parties.” In consideration of the promises and the mutual covenants contained in this Agreement, the Parties agree as follows:

1. City Authority. This Agreement is entered into pursuant to the action of the Morgan Hill City Council taken on ___________, ____, 20___.

2. Term of Agreement. This Agreement shall cover services rendered from the Effective Date of this Agreement until December 31, 2024 at which time SERVICE PROVIDER’S services shall be completed. The City Manager is authorized to extend the term of this Agreement for a maximum of three one-year extensions. Any such extension shall be in writing and signed by both Parties to this Agreement.

3. Scope of Service. The services to be performed by SERVICE PROVIDER shall be landscape maintenance services for groups 1, 3 & 6 as further described in Exhibit A.

4. Compensation. SERVICE PROVIDER shall be compensated as follows:

4.1. Amount. $274,608.00. Total compensation to SERVICE PROVIDER under this Agreement during its initial term set forth in Section 2 above shall not exceed Two Hundred Seventy-Four Thousand Six Hundred Eight dollars and shall be billed based on the rate and basis set forth in Exhibit B. If the City Manager extends the term of this Agreement pursuant to the provisions of Section 2 above, the City Manager shall have the authority to increase the maximum compensation allowed to be paid to SERVICE PROVIDER during that extended term period, so long as City Council has appropriated sufficient funds therefor, the Parties mutually agree to such amount in a writing signed by both Parties to this Agreement and provided further that in no event shall such maximum compensation allowed for each subsequent extended one-year term exceed 105% of the maximum compensation allowed to be paid to SERVICE PROVIDER for one year of service during the immediately preceding prior year of service.

4.2. Billing. SERVICE PROVIDER shall provide CITY with an invoice containing the dated, detailed, and itemized descriptions of all services performed and expenses incurred (if such expenses are reimbursable pursuant to Exhibit B) by SERVICE PROVIDER on a monthly basis unless otherwise specified in Exhibit B. All invoices shall be sent to the CITY addressed to the department head or project manager identified below in Section 14 Notices. Payment will be made to SERVICE PROVIDER within thirty (30) days of receipt of invoice by CITY. Any rate charged shall be prorated where services are interrupted or not provided for any rate period (for example, any monthly rate charge should be prorated when services were interrupted or provided for only part of the month). For services billed on an hourly rate, the minimum unit of billed time shall not exceed one tenth of one hour. CITY shall pay for services and expenses (if so provided in Exhibit B) up to the limit of compensation set forth above, that in the CITY’S judgment were necessary and reasonable. Services for work performed and expenses incurred in

2 Updated: July 2022
excess of the total compensation set forth in paragraph 4.1 above shall be at no cost to CITY.

5. Termination. CITY or SERVICE PROVIDER shall have the right to terminate this Agreement, without cause, by giving thirty (30) days' written notice or less under urgent circumstances. Upon such termination, SERVICE PROVIDER shall submit to CITY an itemized statement of services performed for which compensation has not been paid. CITY may require SERVICE PROVIDER to complete certain work product or documents and SERVICE PROVIDER shall deliver to CITY all documents in its possession without additional compensation to SERVICE PROVIDER. The City Manager is authorized to terminate this Agreement, in whole or in part, on behalf of CITY.

5.1. Non-Appropriations. Notwithstanding anything contained in this Agreement to the contrary, if insufficient funds are appropriated, or funds are otherwise unavailable in the budget for CITY for any reason whatsoever in any fiscal year, for payments due under this Agreement, CITY will immediately notify SERVICE PROVIDER of such occurrence, and this Agreement shall terminate after the last day during the fiscal year for which appropriations shall have been budgeted for CITY or are otherwise available for payments.

5.2. Temporary Suspension of Services. CITY’S need for services may be suspended due to unforeseeable or unavoidable circumstances beyond its control. Such circumstances include, but are not limited to, earthquake, fire, explosion, flood, or other natural catastrophe; governmental legislation, condemnation, acts, orders, or regulation; war or acts of terrorism; strikes or labor difficulties; and quarantine, epidemic, or pandemic.

CITY shall provide a 5-days’ written notice or less under urgent circumstances to temporarily suspend services at specific CITY facilities. CITY reserves the right to request which CITY facilities are to be serviced or not serviced due to unforeseeable or unavoidable circumstances; and the level of service at each CITY facility. Upon suspension, SERVICE PROVIDER shall submit to CITY an itemized statement of services performed for which compensation has not been paid up to the date of the suspension. No further payments will be made for services provided after the date of the suspension. CITY shall provide 5 days’ written notice when the circumstances for the suspension of specific facilities’ services are removed for SERVICE PROVIDER to commence providing services.

6. Performance of Work. SERVICE PROVIDER represents that it is qualified by virtue of experience, training, education, and expertise to accomplish these services. Services shall be performed by SERVICE PROVIDER in accordance with professional practices in a manner consistent with a level of care, competence and skill exercised by qualified members of SERVICE PROVIDER’S profession. By delivery of completed work, SERVICE PROVIDER certifies that the work conforms to the requirements of this Agreement and all applicable federal, state, and local laws. SERVICE PROVIDER is liable for any property damage caused by SERVICE PROVIDER or its Subcontractors during performance of the services and shall notify the CITY of damage within 24 hours of the occurrence. SERVICE PROVIDER must promptly repair or replace any real or personal property damage, and must promptly restore the property to its original or intended condition. CITY may repair or replace the real or personal property damage if SERVICE PROVIDER fails to do so, and the cost of the repairs or replacement may be deducted or offset from any compensation due to SERVICE PROVIDER.

6.1. Schedule. SERVICE PROVIDER shall perform all work and services under this Agreement in conformance with the time schedule set forth on Exhibit C, "Schedule of

3 Updated: July 2022
Performance," attached hereto and incorporated herein by this reference. The City Manager is authorized on behalf of CITY to modify the timeframes set forth on the Schedule of Performance within the term of this Agreement.

6.2. Storage of Service Provider’s Equipment. If SERVICE PROVIDER desires to leave or store any of SERVICE PROVIDER'S equipment at a CITY site while SERVICE PROVIDER is performing work or service pursuant to this Agreement, SERVICE PROVIDER will first obtain the consent of the City Manager, or his/her delegate, to do so, and any such storage shall occur only in the manner and location allowed by such CITY official and entirely at SERVICE PROVIDER'S sole risk.

7. Hazardous Materials. Without limiting any other requirement or obligation of SERVICE PROVIDER under this Agreement, if SERVICE PROVIDER needs to use any material or chemical considered to be a hazardous material under any federal, state, or local law, regulation or policy, SERVICE PROVIDER agrees to fully and timely abide by and comply with all laws, regulations and policies pertaining to the use, transport, removal, handling, disposal, or other activity related to any and all such materials or chemicals. Prior to commencement of work or services under this Agreement, SERVICE PROVIDER shall provide CITY with a complete list of the hazardous materials SERVICE PROVIDER reasonably anticipates it may need to use to provide the services of SERVICE PROVIDER under this Agreement, together with the reasonably anticipated quantities thereof, if requested by CITY.

8. Insurance Requirements. SERVICE PROVIDER shall procure and provide proof of the insurance coverage required by this section in the form of certificates and endorsements. The required insurance must cover the activities of SERVICE PROVIDER, including its subcontractors, employees, and agents, relating to, or arising from, the performance of any work or service under this Agreement, and must remain in full force and effect at all times during the period covered by this Agreement. The coverages may be arranged under a single policy for the full limits required or by a combination of underlying policies with the balance provided by excess or “umbrella” policies, provided each such policy complies with the requirements set forth herein. Any deductibles or self-insured retentions must be declared to and approved by City. SERVICE PROVIDER further understands that CITY reserves the right to modify the insurance requirements set forth herein, with thirty (30) days’ notice provided to SERVICE PROVIDER, at any time as deemed necessary to protect the interests of CITY.

8.1. Insurance Types and Amounts.

8.1.1. Commercial General Liability (CGL). SERVICE PROVIDER shall maintain CGL against claims and liabilities for personal injury, death, or property damage providing protection in the minimum amount of: (i) one million dollars ($1,000,000.00) combined single limit for any one accident or occurrence, or (ii) the maximum amount of such insurance available to SERVICE PROVIDER under SERVICE PROVIDER’S combined insurance policies (including any excess or “umbrella” policies), whichever is greater.

8.1.2. Automobile Liability. SERVICE PROVIDER shall maintain Automobile Liability covering all owned, non-owned and hired automobiles (if SERVICE PROVIDER does not own automobiles, then SERVICE PROVIDER shall maintain Hired/Nonowned Automobile Liability) against claims and liabilities for personal injury, death, or property damage providing protection in the minimum amount of: (i) one million dollars ($1,000,000.00) combined single limit for any one accident or occurrence, or (ii) the maximum amount of such insurance available to SERVICE

4 Updated: July 2022
PROVIDER under SERVICE PROVIDER'S combined insurance policies (including any excess or “umbrella” policies), whichever is greater.

8.1.3. Workers’ Compensation Insurance and Employer’s Liability. SERVICE PROVIDER shall maintain Workers Compensation coverage, as required by law, in the minimum amount of: (i) one million dollars ($1,000,000.00) for any one accident or occurrence, or (ii) the maximum amount of such insurance available to SERVICE PROVIDER under SERVICE PROVIDER'S combined insurance policies (including any excess or “umbrella” policies), whichever is greater. If SERVICE PROVIDER is self-insured, SERVICE PROVIDER shall provide its Certificate of Permission to Self-Insure, duly authorized by the Department of Industrial Relations.

8.1.4. Pollution (Environmental) Liability. If the performance of SERVICE PROVIDER’S work or service under this Agreement involves hazardous materials, contaminated soil disposal, and/or a risk of accidental release of fuel oil, chemicals or other toxic gases or hazardous materials, SERVICE PROVIDER shall procure and maintain Pollution Liability covering the SERVICE PROVIDER’S liability for bodily injury, property damage and environmental damage resulting from pollution and related cleanup costs arising out of the work or services to be performed under this Agreement. Coverage shall be provided for both work performed on site, as well as during the transport of hazardous materials. Such coverage shall be in the minimum amount of: (i) one million dollars ($1,000,000.00) for any one accident or occurrence, or (ii) the maximum amount of such insurance available to SERVICE PROVIDER under SERVICE PROVIDER'S combined insurance policies (including any excess or “umbrella” policies), whichever is greater.

8.1.5. Professional Liability.

8.1.5.1. If the performance of SERVICE PROVIDER’S work or service under this Agreement involves professional and/or technical services (examples include, but are not limited to, architects, engineers, land surveyors, and appraisers), SERVICE PROVIDER shall procure and maintain either a claims made or occurrence Errors and Omission liability insurance in the minimum amount of: (i) one million dollars ($1,000,000.00) each claim, or (ii) the maximum amount of such insurance available to SERVICE PROVIDER under SERVICE PROVIDER'S combined insurance policies (including any excess or “umbrella” policies), whichever is greater. Further, if SERVICE PROVIDER maintains a claims-made policy, SERVICE PROVIDER shall provide written evidence of such insurance to CITY for at least five (5) years after the completion of work performed under this Agreement.

8.1.5.2. If the performance of SERVICE PROVIDER’S work or service under this Agreement relates to Information Technology or related services (examples include, but are not limited to computer programmers, software designers, hardware engineers, or other systems consultants), SERVICE PROVIDER shall procure and maintain a claims made Errors and Omission liability insurance, including Cyber Liability and Data Breach, in the minimum amount of: (i) one million dollars ($1,000,000.00) each claim, or (ii) the maximum amount of such insurance available to SERVICE PROVIDER under SERVICE PROVIDER'S

5 Updated: July 2022
combined insurance policies (including any excess or “umbrella” policies), whichever is greater.

8.1.6. Sexual Abuse/Molestation Liability (SML): If the performance of SERVICE PROVIDER'S work or service under this Agreement involves contact with minors, SERVICE PROVIDER shall procure and maintain Sexual Abuse and Molestation insurance in the minimum amount of: (i) two hundred thousand dollars ($200,000.00) each claim, or (ii) the maximum amount of such insurance available to SERVICE PROVIDER under SERVICE PROVIDER'S combined insurance policies (including any excess or “umbrella” policies), whichever is greater.

8.2. Endorsements. SERVICE PROVIDER shall provide proof of the following endorsements, listed for each policy for which endorsements are required, as outlined below:

8.2.1. General Liability and pollution liability (when pollution liability applies).

8.2.1.1. “Additionally Insured” - The City of Morgan Hill, its elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers are named as additional insureds on a form at least as broad as ISO Form CG 20 10 for ongoing operations.

8.2.1.2. “Waiver of Rights of Subrogation” - The insurer waives the right of subrogation against the City of Morgan Hill and CITY’S elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers; and

8.2.1.3. “Primary and Non-Contributing” - Insurance shall be endorsed to be primary and non-contributory and will not seek contribution from the City’s insurance or self-insurance and shall be at least as broad as ISO Form CG 20

01. 8.2.2. Workers Compensation.

If the performance of SERVICE PROVIDER’S work or service under this Agreement involves access to or activity on any property or premises owned or occupied by the CITY, including, but not limited to, SERVICE PROVIDER’S presence during site visits and meetings, then insurer waives the right of subrogation against the City of Morgan Hill and the CITY’S elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers.

8.3. Qualification of Insurers. All insurance required pursuant to this Agreement must be issued by a company licensed and admitted, or otherwise legally authorized to carry out insurance business in the State of California, and each insurer must have a current A.M.

Best's financial strength rating of “A” or better and a financial size rating of “VII” or better.

8.4. Certificates. SERVICE PROVIDER shall furnish CITY with copies of all certificates as outlined herein, whether new or modified, promptly upon receipt. In the event of a claim or legal action, SERVICE PROVIDER shall promptly furnish CITY of Morgan Hill with copies of all policies outlined herein. No policy subject to SERVICE PROVIDER’S agreement with CITY shall be canceled or materially changed except after thirty (30) days' notice by the insurer to CITY. A "material change" is a change that results in nonPage 246 of 747 6 Updated: July 2022
compliance with any insurance requirements in this section 8. Certificates, including renewal certificates, may be mailed electronically to [email protected] or delivered to the Certificate Holder address provided herein.

Certificate Holder address:

City of Morgan Hill
Attn: Risk Management
17575 Peak Avenue
Morgan Hill, CA 95037

9. Non-Liability of Officials and Employees of CITY. No official or employee of CITY shall be personally liable for any default or liability under this Agreement.

10. Compliance with Law.

10.1. SERVICE PROVIDER and its officers, employees, agents, and subcontractors shall comply with all applicable laws, ordinances, administrative regulations, and permitting requirements in carrying out their obligations under this Agreement. SERVICE PROVIDER and its officers, employees, agents, and subcontractors covenant there shall be no discrimination based upon race, color, creed, religion, gender, marital status, age, sexual orientation, national origin, mental disability, physical disability, medical condition, or ancestry, in any activity pursuant to this Agreement.

10.2. Without limiting the provisions of Section 10.1 above, each worker performing work under this Agreement shall be paid at a rate not less than the prevailing wage as defined in Sections 1771 and 1774 of the Labor Code. The prevailing wage rates are available online at http://www.dir.ca.gov/dlsr. SERVICE PROVIDER shall post a copy of the applicable prevailing rates at the Worksite. Pursuant to Labor Code Section 1775, SERVICE PROVIDER and any Subcontractor shall forfeit to CITY as a penalty up to two hundred dollars ($200.00) for each calendar day, or portion thereof, for each worker paid less than the applicable prevailing wage rate. SERVICE PROVIDER shall also pay each worker the difference between the applicable prevailing wage rate and the amount actually paid to that worker.

10.3. DIR Registration. CITY will not accept a Bid Proposal from or enter into a contract with a SERVICE PROVIDER, without first receiving proof to the satisfaction of CITY that SERVICE PROVIDER and its subcontractors are registered with the California Department of Industrial Relations to perform public work under Labor Code Section 1725.5, subject to limited legal exceptions. Under Labor Code section 1771.4, this Agreement is subject to compliance monitoring and enforcement by the California Department of Industrial Relations.

10.4. Compliance with Wage and Hour Laws: SERVICE PROVIDER, and any subcontractor it employs to complete work under this Agreement, shall comply with all applicable federal, state, and local wage and hour laws. Applicable laws may include, but are not limited to, the Federal Fair Labor Standards Act and the California Labor Code.

Final Judgments, Decisions, and Orders: For purposes of this Section, a “final judgment, decision, or order” refers to one for which all appeals have been exhausted or the time to appeal has expired. Relevant investigatory government agencies include: the federal

7 Updated: July 2022
Department of Labor, the California Division of Labor Standards Enforcement, or any other governmental entity or division tasked with the investigation and enforcement of wage and hour laws.

Prior Judgments against SERVICE PROVIDER and/or its Subcontractors: BY SIGNING

THIS AGREEMENT, SERVICE PROVIDER AFFIRMS THAT IT HAS DISCLOSED ANY

FINAL JUDGMENTS, DECISIONS OR ORDERS FROM A COURT OR
INVESTIGATORY GOVERNMENT AGENCY FINDING – IN THE FIVE (5) YEARS PRIOR TO EXECUTING THIS AGREEMENT – THAT SERVICE PROVIDER OR ITS SUBCONTRACTOR(S) HAS VIOLATED ANY APPLICABLE WAGE AND HOUR LAWS.

SERVICE PROVIDER FURTHER AFFIRMS THAT IT OR ITS SUBCONTRACTOR(S) HAS SATISFIED AND COMPLIED WITH – OR HAS REACHED AGREEMENT WITH THE CITY REGARDING THE MANNER IN WHICH IT WILL SATISFY – ANY SUCH JUDGMENTS, DECISIONS OR ORDERS.

Judgments or Decisions During Term of Contract: If at any time during the term of this Agreement, a court or investigatory government agency issues a final judgment, decision or order finding that SERVICE PROVIDER or any subcontractor it employs to perform work under this Agreement has violated any applicable wage and hour law, or SERVICE PROVIDER learns of such a judgment, decision, or order that was not previously disclosed, SERVICE PROVIDER shall inform the City Attorney, no more than fifteen (15) days after the judgment, decision or order becomes final or of learning of the final judgment, decision or order. SERVICE PROVIDER and its subcontractors shall promptly satisfy and comply with any such judgment, decision, or order, and shall provide the City Attorney with documentary evidence of compliance with the final judgment, decision, or order within five (5) days of satisfying the final judgment, decision, or order. CITY reserves the right to require SERVICE PROVIDER to enter into an agreement with CITY regarding the manner in which any such final judgment, decision, or order will be satisfied.

City’s Right to Withhold Payment: Where SERVICE PROVIDER or any subcontractor it employs to perform work under this Agreement has been found in violation of any applicable wage and hour law by a final judgment, decision or order of a court or government agency, CITY reserves the right to withhold payment to SERVICE PROVIDER until such judgment, decision or order has been satisfied in full.

Material Breach: Failure to comply with any part of this Section constitutes a material breach of this Agreement. Such breach may serve as a basis for immediate termination of this Agreement and/or any other remedies available under this Agreement and/or law.

Notice to City Related to Wage Theft Prevention: Notice provided to the City Attorney as required under this Section shall be addressed to: City Attorney, City of Morgan Hill, 17575 Peak Avenue, Morgan Hill, CA 95037. The Notice provisions of this Section are separate from any other notice provisions in this Agreement and, accordingly, only notice provided to the above address satisfies the notice requirements in this Section.

11. Independent Contractor. SERVICE PROVIDER is an independent contractor and not an agent or employee of CITY.

12. Confidentiality. All data, documents, or other information received by SERVICE PROVIDER from CITY or prepared in connection with SERVICE PROVIDER’S services under this Agreement are

8 Updated: July 2022
deemed confidential and shall not be disclosed to any third party by SERVICE PROVIDER without prior written consent by CITY.

13. Conflict of Interest and Reporting. SERVICE PROVIDER shall at all times avoid conflict of interest or appearance of conflict of interest in performance of this Agreement.

14. Notices. All notices shall be personally delivered or mailed, via first class mail to the below listed address. These addresses shall be used for delivery of service of process. Notices shall be effective five (5) days after date of mailing, or upon date of personal delivery.

Address of SERVICE PROVIDER is as follows:

Brightview Landscape Services, Inc.
825 Mabury Road
San Jose, CA 95133
Attn: Karine Stuimer, Group Vice President
Address of CITY is as follows:

Keri Russell, Maintenance
Manager
City of Morgan Hill
17575 Peak Avenue
Morgan Hill, CA 95037
with a copy to:

City Clerk
City of Morgan Hill
17575 Peak Avenue
Morgan Hill, CA 95037

15. Licenses, Permits and Fees. SERVICE PROVIDER shall obtain a City of Morgan Hill Business License, all permits and licenses to the extent required by ordinances, codes, and regulations of the federal, state, and local government.

16. Service Provider’s Proposal. If applicable, this Agreement shall include SERVICE PROVIDER'S proposal or bid which is incorporated herein. In the event of any inconsistency between the terms of the proposal and this Agreement, this Agreement shall govern.

17. Maintenance of Records.

17.1. Maintenance. SERVICE PROVIDER shall prepare, maintain, and preserve all reports and records that may be required by federal, state, and CITY rules and ordinances related to services provided under this Agreement. SERVICE PROVIDER shall maintain records for a period of at least 3 years after receipt of final payment under this Agreement. If any litigation, claim, negotiation, audit exception, or other action relating to this Agreement is pending at the end of the 3-year period, then SERVICE PROVIDER shall retain said records until such action is resolved.

17.2. Access to and Audit of Records. CITY shall have the right to examine, monitor and audit all records, documents, conditions, and activities of SERVICE PROVIDER and its subcontractors related to services under this Agreement. Pursuant to Government Code Section 8546.7, if this Agreement involves the expenditure of public funds in excess of $10,000, the Parties to this Agreement may be subject, at the request of CITY or as part of any audit of CITY, to the examination and audit of the State Auditor pertaining to matters connected with the performance of this Agreement for a period of three years after final payment under the Agreement.

9 Updated: July 2022

17.3. Ownership of Work Product. All documents or other information developed or received by SERVICE PROVIDER for work performed under this Agreement shall be the property of CITY. SERVICE PROVIDER shall provide CITY with copies of these items upon demand or upon termination of this Agreement.

18. Familiarity with Work. By executing this Agreement, SERVICE PROVIDER represents that:
(1) it has investigated the work to be performed; (2) it has investigated the site of the work and is aware of all conditions there; and (3) it understands the difficulties and restrictions of the work under this Agreement. Should SERVICE PROVIDER discover any conditions materially differing from those inherent in the work or as represented by CITY, it shall immediately inform CITY and shall not proceed, except at SERVICE PROVIDER'S risk, until written instructions are received from CITY.

19. Time of Essence. Time is of the essence in the performance of this Agreement.

20. No Assignment. Neither this Agreement nor any portion shall be assigned by SERVICE PROVIDER, without prior written consent of CITY. Any attempted assignment not first approved by CITY shall be void and, at CITY'S option, shall terminate this Agreement effective as of the date of such attempted assignment.

21. Attorney Fees. In any legal action, dispute or arbitration arising out of or relating to this Agreement, the prevailing party shall be entitled to an award of its reasonable attorney fees, costs and expenses incurred.

22. Defense and Indemnification.

22.1. Defense and Indemnification. SERVICE PROVIDER shall, to the fullest extent permitted by law, indemnify, defend and hold harmless CITY, its elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers (“INDEMNITEES”) from and against any and all claims, liabilities, expenses, liens, or damages of any nature, including liability for bodily injury, property damage or personal injury, and including reasonable attorneys' fees and expenses, that arise out of, pertain to, or relate to the performance of this Agreement or the failure to comply with any obligations contained in this Agreement by SERVICE PROVIDER, and/or its agents, officers, employees, subcontractors, or independent contractors (“CLAIM”).

22.2. Exceptions. SERVICE PROVIDER is not required to indemnify INDEMNITEES against liability for bodily injury, property damage or personal injury, or any other loss, damage or expense arising from the sole negligence or willful misconduct of CITY.

22.3. Not limited by insurance. The indemnity, defense and hold harmless provisions of this Agreement apply to all CLAIMS alleged against an INDEMNITEE, regardless of whether any insurance policies are applicable. Policy limits do not act as a limitation upon the amount of indemnification or defense to be provided by SERVICE PROVIDER.

22.4. Right to Offset. CITY shall have the right to offset against any compensation due SERVICE PROVIDER under this Agreement any amount due CITY from SERVICE PROVIDER as a result of SERVICE PROVIDER'S failure to pay CITY promptly any indemnification arising under this Section (22) and any amount due CITY from SERVICE PROVIDER arising from SERVICE PROVIDER'S failure either to (i) pay taxes on amounts received pursuant to this Agreement or (ii) comply with applicable workers' compensation laws.

22.5. Interpretation. This Section shall constitute an agreement or contract of indemnity, incorporating the interpretations under California Civil Code Section 2778. It is expressly

10 Updated: July 2022
understood and agreed that the obligation of SERVICE PROVIDER to indemnify the INDEMNITEE shall be as broad and inclusive as permitted by the laws of the State of California and shall survive termination of this Agreement.

23. Entire Agreement; Modification; Conflicting Provisions. This Agreement constitutes the entire Agreement between the Parties and supersedes any previous agreements, oral or written. This Agreement may be modified or provisions waived only by a subsequent mutual written agreement executed by CITY and SERVICE PROVIDER. If the provisions contained in the main body of this Agreement conflict with any provision contained in an exhibit to this Agreement, the provisions of the main body of this Agreement shall govern and control over any provision contained in an exhibit to this Agreement.

24. Governing Law and Venue. This Agreement shall be construed in accordance with the laws of the State of California. This Agreement was entered into and is to be performed in the County of Santa Clara. Any action or dispute arising out of this Agreement shall only be brought in Santa Clara County.

25. Interpretation. This Agreement is a negotiated document and shall be deemed to have been drafted jointly by the Parties, and no rule of construction or interpretation shall apply against any particular Party based on a contention that the Agreement was drafted by one of the Parties including, but not limited to, California Civil Code § 1654, the provisions of which are hereby waived. This Agreement shall be construed and interpreted in a neutral manner.

26. Preservation of Agreement. If any term, provision, covenant, or condition of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, the rest of the Agreement shall remain in full force and effect and shall in no way be affected or invalidated.

27. Binding Agreement. Notwithstanding the provisions of Section 20 above, this Agreement shall bind any and all successors in interest, legal representatives and/or other permitted assignees or transferees of SERVICE PROVIDER in the same manner as if those successors in interest, legal representatives or other permitted assignees or transferees had entered into this Agreement originally.

28. Electronic Signatures. Unless otherwise prohibited by law or CITY policy, the Parties agree that an electronic copy of a signed contract, or an electronically signed contract, has the same force and legal effect as a contract executed with an original ink signature. The term “electronic copy of a signed contract” refers to a transmission by facsimile, electronic mail, or other electronic means of a copy of an original signed contract in a portable document format. The term “electronically signed contract” means a contract that is executed by applying an electronic signature using technology approved by the CITY.
///
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Signatures are on the following page.

11 Updated: July 2022

29. Authority to Execute. Those individuals who are signing this Agreement on behalf of entities represent and warrant that they are, respectively, duly authorized to sign on behalf of the entities and to bind the entities fully to each and all of the obligations set forth in this Agreement.

IN WITNESS THEREOF, these Parties have executed this Agreement on the day and year shown below.

AS SET FORTH IN CA. CORP. CODE § 313, TWO SIGNATURES ARE REQUIRED FOR CALIFORNIA CORPORATIONS:
(1) CHAIRPERSON OF THE BOARD, PRESIDENT, OR VICE PRESIDENT; AND (2) SECRETARY, ASSISTANT SECRETARY, CHIEF FINANCIAL OFFICER OR ASSISTANT TREASURER.

ATTEST: CITY OF MORGAN HILL
City Clerk/Deputy City Clerk City Manager
Michelle Bigelow Christina J. Turner
Print Name Print Name
Date: Date:

APPROVED AS TO FORM: BRIGHTVIEW LANDSCAPE SERVICES, INC.

City Attorney By:

Donald A. Larkin
Print Name
Date:

Print Name and Title of Signer.

If Corporate: Chairman, President or
Vice President
Date:

By:

Date:

Print Name and Title of Signer.

If Corporate: Secretary, Assistant
Secretary, Chief Financial Officer or
Assistant Treasurer
266211 1000005364
Contractor’s License Number(s) (if applicable) Contractor’s DIR Registration Number(s) (if applicable) Expiration Date(s) 03/31/2024 Expiration Date(s) 06/30/2023 U:\Legal Forms\Consultant Agreements\City Maintenance Service Agreement.Docx Brett Urban, CFO
10/10/2022
-HII+HUROG3UHVLGHQW


12 Updated: July 2022

EXHIBIT A

SCOPE OF SERVICES
Please see next page for attached Scope of Work and Specifications.

Exhibit A-Scope of Services 1

EXHIBIT A

SCOPE OF SERVICES
LANDSCAPE MAINTENANCE SERVICES (GROUPS 1, 3, & 6)

CITY OF MORGAN HILL PARKS MOWING, MEDIANS, STREETSCAPE, PARKING LOTS,

DOWNTOWN, AND MISCELLANEOUS LANDSCAPING

TABLE OF CONTENTS
SECTION 2.1: SCOPE OF WORK

2.1-1 SCOPE AND LOCATION OF WORK

2.1-2 ADDITIONAL AND EXTRA WORK; MARK-UP

2.1-3 CHANGES IN AGREEMENT PRICE

2.1-4 OUTCOME-BASED AGREEMENT AND INSPECTION PROBLEM RESOLUTION PROCESS

2.1-5 INSPECTION OF SITE WORK
SECTION 2.2: GENERAL CONDITIONS

2.2-1 NORMAL HOURS AND DAYS OF MAINTENANCE SERVICES

2.2-2 PERIODIC PROJECT INSPECTIONS

2.2-3 PERFORMANCE DURING INCLEMENT WEATHER

2.2-4 NOTICE TO PROCEED

2.2-5 ACCEPTANCE

2.2-6 LICENSES REQUIRED FOR DURATION OF AGREEMENT

2.2-7 SAFETY

2.2-8 RESPONSE

2.2-9 QUALIFIED SERVICE PROVIDER SUPERVISION

2.2-10 SERVICE PROVIDER'S EMPLOYEES

2.2-11 EMPLOYER PROVIDED UNIFORMS

2.2-12 SERVICE PROVIDER'S EQUIPMENT

2.2-13 LOCKS AND KEYS

2.2-14 VANDALISM AND ACCIDENTAL DAMAGE

2.2-15 WATER MANAGEMENT PROGRAM

2.2-16 PLANT LOSS

2.2-17 TURF AERATION

2.2-18 FERTILIZATION

2.2-19 BARK AND MULCH

2.2-20 TREE PRUNING

2.2-21 MOWING AND EDGING

2.2-22 REFUSE DISPOSAL

2.2-23 TRAFFIC CONTROL

Exhibit A-Scope of Services 2
SECTION 2.3: LOCATIONS AND SERVICES REQUIRED

2.3-1 GROUP 1 – PARK MOWING AND EDGING

2.3-2 GROUP 3 – MEDIAN, STREETSCAPE, PARKING LOT & MISC. FACILITY LANDSCAPE

MAINTENANCE

2.3-3 GROUP 6 – DOWNTOWN

2.3-4 EXTRA WORK
SECTION 2.4: SCOPE OF WORK EXHIBITS
A. CITY OF MORGAN HILL LANDSCAPE MAINTENANCE STANDARDS
B. INTEGRATED PEST MANAGEMENT (IPM) PLAN (Provided to Service Provider in Request for Proposals)

Exhibit A-Scope of Services 3
Section 2.1: Scope of Work

2.1-1 SCOPE AND LOCATION OF WORK
The Landscape Maintenance Service Agreement ("Agreement") is an outcome-based Agreement where the City has established specific landscape standards as outcomes. The total cost for each service group for a two-year period. The City will inspect the work of the Service Provider against the stated standards to determine compliance and payment.

The work to be performed under the Agreement consists of the furnishing of all labor, insurance, materials, and equipment needed for complete landscape maintenance services in the following service groups:

Group 1 Parks Mowing and Edging
Group 3 Medians, Streetscape, Parking Lots & Miscellaneous Facility Landscape Maintenance Group 6 Downtown
Extra Work All Locations

2.1-2 ADDITIONAL AND EXTRA WORK
City has the authority to direct additional and extra work including, but not limited to, work for vandalism, City initiated improvements, various repair and maintenance functions, and the addition of new sites with the understanding that the Service Provider is entitled to additional compensation.

Additional and extra work outside the Scope of Services will require written approval from City prior to the commencement of work. Costs for additional work completed by the Service Provider prior to receiving written approval from the City shall be the responsibility of the Service Provider.

2.1-3 CHANGES IN AGREEMENT PRICE
Other provisions of the Agreement Documents notwithstanding, the Agreement Price may be changed only by an amendment duly authorized by the City Manager or his or her designee. The value of any work covered by an amendment or of any claim for increase or decrease in the Agreement Price shall be determined by one or more of the following methods in the order of precedence listed below:

A. Unit price previously approved.

B. An agreed lump sum.

Unless an amendment has been so executed, it shall be conclusively presumed that all work performed is included in the Agreement Price.

The City recognizes the inherent complexity of "maintenance", "standards", and building an agreement that covers every potential scenario. Below is a list of additional items that the City will deem as "extra work". Items may be added or deleted through the negotiation process.

The following shall be treated as "extra work:

Renovations (thatching, over seedings, drainage installation, irrigation upgrades, etc.) Landscape Conversions

Exhibit A-Scope of Services 4
Fence Repair
Repair of significant vandalism
Bid requests for hourly rates, unit costs, markups, etc. can be found in the bid form.

2.1-4 OUTCOME-BASED AGREEMENT AND INSPECTION PROBLEM RESOLUTION PROCESS City will regularly inspect the Service Provider's work and rate it according to the landscape maintenance standards in Section 2.4- Exhibit A: City of Morgan Hill Landscape Maintenance Standards. Service Provider shall operate and maintain an e-mail address at which the City may send inspection reports largely consisting of photos taken of areas that the Service Provider maintains. The e-mail address must have sufficient capacity to accept numerous inspection reports from the City without delay or rejection.

The Service Provider will be paid for work rated as "meets standards." Service Provider will not be paid for work rated as "below standard" until conditions improve and rate as "meet standards" if the below standard work is attributed to neglect on the part of the Service Provider. If an area does not meet City standards, it will be considered "below standard". Service Provider will not be paid additional amounts for remedial work required to improve "below standard" areas if the below standard work is attributed to neglect on the part of the Service Provider. City staff will work closely with Service Provider's representatives to achieve the results described in the standards and inspection criteria. However, responsibility for meeting standards rests with the Service Provider.

The Service Provider shall be responsible for maintaining landscapes as described in this agreement and per the maintenance standards outlined in Section 2.4- Exhibit A: City of Morgan Hill Landscape Maintenance Standards. The cost of maintaining the areas are included in the Agreement’s Exhibit B:

Schedule of Compensation unless otherwise called out as "extra work.” The Service Provider shall perform quality assurance inspections a minimum of every month, or more frequently if deemed necessary by the Service Provider.

The Service Provider will provide electronic versions of the monthly inspections to the City by the 10th of the following month as to each site's compliance with City standards. An action plan with deadlines must be provided to the City to indicate when corrections will be made if an area is deemed "below standard". Failure to turn in inspections by the deadline will result in a monthly payment being withheld until inspections are turned in, and one-hundred-dollar ($100) deduction from their monthly payment.

There will be a financial impact to the Agreement if any scheduled use, (including, but not limited to, special events or recreation programs) of City facilities are impacted by neglect on the Service Provider's part. Any costs associated with re-scheduling the event/activity/program may be the responsibility of the Service Provider for staffing and costs, including, but not limited to lost revenue, staff salaries and alternate Service Provider costs, etc.

The City will perform weekly inspection reports, which will be e-mailed to the Service Provider. The first time a site fails to meet City Standards as a result of these inspections the Service Provider will have two (2) weeks to bring the site back into compliance. For Group 6 – Downtown, the Service Provider will have one (1) week to bring the site back into compliance. If the same site is not in compliance for the same standard at any time after the first warning, no warning will be given, and penalties will be

Exhibit A-Scope of Services 5
incurred. If a site is not brought back into compliance within the allotted timeframe the following penalties will occur:

1. First Penalty: Service Provider to receive warning.

2. Second Penalty: At the same site within twelve (12) months of the First Penalty Assessment, the Service Provider will be assessed a $25 monthly deduction per deficiency.

3. Third Penalty: At the same site within (12) months of the First Penalty Assessment, the Service Provider will be assessed a $75 monthly deduction per deficiency.

The parties will observe the following progressive problem resolution process:

1. Written notice of the problem.

2. Field conference with City inspector and Service Provider’s field representative to identify problem and agree on solution as presented by Service Provider.

3. Conference between City's representative and Service Provider's principal.

4. Imposition of penalties and/or correcting defect at Service Provider's cost.

5. Termination of Agreement.

2.1-5 INSPECTION OF SITE WORK
Service Providers are required to inspect the site of the work in order to satisfy themselves, by personal examination or by such other means as they may prefer, of the location of the proposed work and the actual conditions of and at the site. Service Providers may apply to the City for additional information and explanation before submitting proposals. However, no supplemental information requested or furnished shall vary the terms of the Agreement Documents or affect the Service Provider's sole responsibility to satisfy itself as to the conditions of the work to be performed. No claim for additional compensation will be allowed which is based upon a lack of knowledge of the actual conditions or location of the work.

Submission of a proposal by a Service Provider shall constitute acknowledgment that the Service Provider has relied, and is relying, on its own examination of: (a) the site of the work; (b) access to the site; (c) all other data, matters, and things requisite to the fulfillment of the work and, on his/her own knowledge of existing facilities on and in the vicinity of the site of the work and not on any representation or warranty of the lack of knowledge of the above items.

Section 2.2: General Conditions

2.2-1 NORMAL HOURS AND DAYS OF MAINTENANCE SERVICES

A. For the Third Street Creek Park and Nob Hill Trail Park work hours shall be every Monday and Thursday between 7:00am and 5:00 pm.

B. At all other locations, the Service Provider shall perform the required maintenance services between the hours of 7:00 a.m. and 5:00 pm Monday through Friday and on weekends with prior City approval.

C. The Service Provider shall conduct the work at all times in a manner which will not interfere with normal recreation programs, school programs, pedestrian traffic on adjacent sidewalks, or vehicular traffic on adjacent streets.

Exhibit A-Scope of Services 6
D. Any modification in the hours and days of maintenance services as stated in the Service Provider's service schedule is subject to approval by the City.

2.2-2 PERIODIC PROJECT INSPECTIONS
Upon request, the Service Provider will walk the project with the City's representative to determine and confirm compliance with the specifications or to discuss required work. The Service Provider's representative must be authorized to sign documents and make changes to the work.

2.2-3 PERFORMANCE DURING INCLEMENT WEATHER
During periods of excessive rainfall that hinders normal operations, the Service Provider shall adjust its workforce to accomplish those activities that are not affected by weather. The prime factors in assigning work shall be the safety of the workforce and damage to parks, landscaping and neighboring properties.

2.2-4 NOTICE TO PROCEED
Upon execution of agreement and receipt of acceptable insurance certificates by City, the start date for this Agreement will be January 1, 2023.

2.2-5 ACCEPTANCE
A. Acceptance by the City of any services furnished under the Agreement shall occur only subsequent to the final review of authorized employees of the City.

B. The City shall reject and refuse to pay for, any and all non-conforming services.

C. Nothing in this section shall limit or restrict the warranty and remedy obligations of the Service Provider specified in the Standard Maintenance Service Agreement.

2.2-6 LICENSES REQUIRED FOR DURATION OF AGREEMENT
x C-27 Landscape Service Provider License
x City of Morgan Hill Business License
x Qualified Applicator License (includes Santa Clara County Registration) x Registered with the California Dept. of Industrial Relations as a Public Works Service Provider (PWC)

2.2-7 SAFETY
Safety provisions shall conform to Cal-OSHA Safety Orders, and all other applicable federal, state, county, and local laws, ordinances, codes, and regulations in performing the work under this Agreement.

Where any of these are in conflict, the more stringent requirement shall be followed. The Service Provider's failure to thoroughly familiarize themselves with the aforementioned safety provisions shall not relieve them from compliance with the obligations and penalties set forth therein.

The Service Provider shall develop and maintain for the duration of the Agreement, a safety program that will effectively incorporate and implement all required safety provisions. The Service Provider shall

Exhibit A-Scope of Services 7
appoint an employee who is qualified and authorized to supervise and enforce compliance with the safety program.

2.2-8 RESPONSE
Service Provider’s supervisors shall be immediately available at all times when Service Provider employees are working on sites, must be available from 7:00 am to 10:00 pm each day via telephone, and must respond to an emergency situation/major discrepancy in the Agreement within two (2) hours of initial contact.

2.2-9 QUALIFIED SERVICE PROVIDER SUPERVISION

All of Service Provider's supervisors must be qualified, proficient in English, trained and capable of providing adequate supervision and direction to all Service Providers’ employees and must demonstrate verbal and written communication skills sufficient for the work required herein.

2.2-10 SERVICE PROVIDER'S EMPLOYEES
Only Service Provider's employees or Subcontractor’s employees are allowed on City premises where work is being performed. The City shall have the right to have Service Provider remove from assignment to City facilities such Service Provider and/or Subcontractor’s employees as shall be deemed incompetent, careless, insubordinate, or in any way objectionable, or any personnel whose actions may be contrary to the public interest or inconsistent with the best interest of the City. Service Provider's employees and Subcontractor’s employees shall not smoke tobacco on any City property.

2.2-11 EMPLOYER PROVIDED UNIFORMS
The Service Provider shall provide each of its employees with uniforms. Uniform apparel shall be kept neat, clean, and in good repair. All uniforms shall include the Service Provider's name and logo. Service Provider and Subcontractor’s personnel shall wear uniforms at all times.

2.2-12 SERVICE PROVIDER'S EQUIPMENT
The on-site supervisor shall ensure that all Service Provider-supplied equipment is in good working order. Any damaged equipment or equipment in need of repair shall be removed from the site. Service Provider shall be responsible for any damage to the work sites, City or private property, or any injuries caused by Service Provider's equipment or personnel.

2.2-13 LOCKS AND KEYS
The Service Provider shall be responsible for the series of keys assigned to it and shall assign these keys to its personnel for use in maintaining the facilities. The Service Provider shall properly use and keep safe all keys or locks issued by the City to the Service Provider.

Exhibit A-Scope of Services 8
The Service Provider shall report all lost or stolen keys or locks to the City within twenty-four (24) hours of discovery. The Service Provider shall reimburse the City for the total cost of replacement keys and/or locks that have been lost.

Upon termination or cancellation of the Agreement, the Service Provider shall immediately return all keys, cards, remotes, etc., to the City. The Service Provider shall reimburse the City for the total cost of lost items.

2.2-14 VANDALISM AND ACCIDENTAL DAMAGE
City assumes responsibility for the cost of repairing or replacing appurtenances significantly damaged by persons other than the Service Provider or its agents. Vandalism or accidental damage repair costs shall be based on unit costs submitted by Service Provider in the proposal or on time and materials quotes for work not called out in the proposal. Service Provider shall be responsible for reporting damage to City and repairing or replacing all appurtenances damaged by Service Provider or Service Provider's agents.

2.2-15 WATER MANAGEMENT PROGRAM
Each month, the Landscape Maintenance Service Provider must provide to the City a report of irrigation controller settings for the current month in electronic format. This report will include the following information:

A. All irrigation programs set on controllers.

B. lrrigation schedule start times for each irrigation program.

C. lrrigation run days for each irrigation program.

D. lrrigation cycle length, in minutes for each station in an irrigation program.

E. Number of repeat cycles for each station in an irrigation program.

All required scheduling and operation of the automatic irrigation controllers reflecting weather changes and water needs will be covered under this Agreement. Service Provider shall make all adjustments and setting of automatic controllers to establish frequency and length of watering periods. Any malfunction of controllers must be reported to the City along with a proposal for correction with costs.

All systems shall be programmed as needed to maintain plants in a healthy, vigorous condition. The irrigation controller program is to be sufficient to keep the plant material healthy without excessive water use.

A. Controller programs shall incorporate the following conditions: Meet City Water Management requirements
B. Program around Park and Facility use and events
C. Reflect actual evapotranspiration (E.T.) requirements D. Reflect actual requirements of soil and plants
E. Eliminate runoff onto streets, sidewalks, and other non-target areas The Water Management Program is designed to optimize park and landscape water usage through field testing and irrigation schedule development. Soil moisture levels can be compared to irrigation

Exhibit A-Scope of Services 9
schedules and plant water requirements to assist in responsible management of each park and landscape irrigation valve zone.

A. lrrigation Schedule Analysis:

The Service Provider will provide the City with the current month's irrigation schedules and monthly report on the required system check no later than the 10th day of the month. The irrigation schedules are analyzed by comparing the minutes of irrigation run time, plant water requirement and the level of environmental demand (evapotranspiration). Valve areas appearing to be over or under watered are to be further tested by the Service Provider as outlined below.

B. Soil Moisture Testing:

Valve areas suspected to be over or under watered should be tested by the Service Provider by removing a soil sample and testing the moisture content. Soil probing is conducted to determine soil moisture levels for automated overhead irrigation circuits.

C. lrrigation Base Schedule Development:

A monthly irrigation base schedule is developed based upon current controller settings and the feedback of moisture probing results. Adjustments are made at the controller either up or down where soil is found to be too dry or too wet. Once the Service Provider has the correct run times for any given month, the starting "base schedule" is acquired. Adjustments to the "base schedule" shall occur throughout the month to accommodate changes in area use and/or environmental changes to individual sites.

D. Drought Impact on Irrigation:

The Service Provider shall comply with all water use regulations and restrictions. In addition, Service Provider shall comply with City directed changes in irrigation in response to drought conditions.

E. lrrigation System Evaluation:

Annually the City will turn off all landscape water accounts November through March (if warmer than expected weather occurs this might be altered.) When accounts are turned back on in March each year the Service Provider shall perform a complete system check of every irrigation system. The Service Provider shall supply the City with a written report of every system as it is completed. Needed repairs shall occur throughout that same time period, and with the approval of the City, to ensure a fully operational system at the beginning of each spring. System evaluations of head, valves, quick couplers, etc. shall also occur monthly, at a minimum, March through November.

For any controller schedule or system check report not supplied by the 10th day of the current month by Service Provider in any month, a $50.00 penalty per controller will be assessed.

City will provide all the water and electricity necessary for the Service Provider to perform the services except instances where excessive costs are incurred by the City due to waste or negligence by the Service Provider. If the City determines that excessive utility costs due to waste or negligence have occurred and are a result of Service Provider's actions, the City may withhold from payment to Service Provider those funds necessary to reimburse the City for these additional costs. If there is a difference of opinion between the City and the Service Provider as to the whether or not there has been waste due to the negligence of the Service Provider, the opinion of the City will prevail.

Exhibit A-Scope of Services 10
Irrigation system repair shall occur and be compensated as stated below.

A. Irrigation system repair will be the responsibility of the Service Provider. All replacement materials are to be with new original types and models, unless a substitute is approved by the City. The Service Provider shall implement repairs in accordance with all effective warranties, and no separate payment shall be made for repairs on equipment covered by warranties.

B. Maintenance, repair, and replacement of malfunctioning sprinkler heads and quick couplers, including risers, swing joints, shall be included in the Service Provider's Schedule of Compensation.

The Service Provider shall provide labor for the above items at no extra charge and shall bill the City for the required parts with a maximum mark up of 10% over cost.

C. Maintenance and repair of valves, filters, valve boxes, batteries and wiring shall be covered in the Service Provider's Schedule of Compensation. The Service Provider shall provide labor for the above items at no extra charge and shall bill the City for the required parts with a maximum mark up of 10% over cost.

D. Replacement of valves, filters, valve boxes, and wiring shall be considered "extra work" in their entirety. Decisions regarding repair verses replacement will be made by the Service Provider and the City jointly. In the event that there is a disagreement with regards to how to proceed, the City's choice will prevail.

E. Repair and replacement of lateral lines, main lines, check valves, and controllers shall be considered "extra work” in their entirety.

F. Repairs and replacements of any irrigation component or property damaged by the Service Provider or as a result of negligence, error, or omission by the Service Provider shall not be submitted to the City for payment and are the responsibility of the Service Provider.

G. Repair and replacement of any irrigation components or property that is a result of vandalism, or unintentional damage, caused by the public shall be considered "extra work" in its entirety. All vandalized components must be presented to the City within one working day of the repair or replacement in order for the Service Provider to be compensated for the repair or replacement. If the vandalized components are not presented within one working day the Service Provider will be paid based on the above stated criteria for repair and replacement.

H. When the Service Provider observes or is notified of water waste due to excessive overspray, overwatering for irrigation system malfunction, he/she shall respond within 24 hours.

Repairs/adjustments shall be completed promptly to prevent damage to the landscape.

2.2-16 PLANT LOSS
It is one of the Service Provider's prime responsibilities to prevent loss of plants caused by pests, diseases, insects, soil conditions, nutrient, micro-climatic conditions, improper planting, or problems in irrigation.

Service Provider agrees to be continuously alert in locating and defining problems and agrees to exercise prompt and proper corrective action. A preliminary written report shall be submitted for major corrective problems not covered in the Agreement along with the costs.

Service Provider agrees to replace, at the Service Provider's cost, any dead, stunted, or damaged that are the result primarily of the Service Provider's negligence including, but not limited to, irrigation malfunctions that are not addressed within a reasonable amount of time based on environmental

Exhibit A-Scope of Services 11
conditions. Plants lost from Service Provider's negligence shall be replaced, at the Service Provider's expense, within thirty (30) days of discovery. Replacement plants shall be comparable in size to the lost plant up to a maximum size of a thirty-six (36) inch box, or if smaller, the size shall be approved by the City.

The Service Provider shall not be held responsible for plant losses due to maladies beyond the Service Provider's control; this includes, but is not limited to, disease or insect attack for which there is no legal recommended control, acts of vandalism, earthquakes, fires, storms, freezing/frost, and related events.

Service Provider shall report all such conditions to the City in writing within seventy-two (72) hours of occurrence, and submit a proposal for the work or repairs along with the costs. The Service Provider shall obtain City's written permission/direction or authorization prior to proceeding with the work.

Failure to notify the City within seventy-two (72) hours of occurrence will result in replacement at the Service Provider's cost as if the cause was Service Provider negligence.

The City shall approve all replacement plants that differ in species. However, it is agreed that replacing plants shall not be used by the Service Provider as a substitute for proper care. The City will consider Service Provider negligence a major breach of Agreement with full responsibility for costs and losses.

Dead plants and those in a state of decline shall be brought to the City's attention immediately and before removal. The City shall pay labor and material for plant replacement not caused by Service Provider negligence, as deemed by the City, on an actual time and material basis.

All new plant material and irrigation installations or repairs shall be guaranteed for a period of ninety (90) days for unhealthy plant installation and/or poor workmanship. Exceptions include damage or death of plant material due to wind or storm, or vandalism, theft, or other willful acts over which the Service Provider has no control. Existing plants shall be replaced by Service Provider if they die due to Service Provider's negligence. All replacement plants and materials shall be inspected and approved by City prior to installation.

At the end or termination of the Agreement, the City reserves the sole right to withhold final payment(s) in the amount necessary to replace any damaged or dying plant material that is a result of Service Provider negligence or to restore any site which is in a condition that is worse than when the Agreement was executed.

2.2-17 TURF AERATION
The Service Provider shall perform core aerations of turf (no mow areas excluded) as part of the base bid price stated in the Schedule of Compensation. Two (2) aerifications are required in all turf areas each year. Aeration plugs shall be properly destroyed so as to not pose a safety issue or interfere with the use of parks and facilities. The aeration schedule shall be coordinated with the City during the first month of the Agreement period. Additional turf aerations may be proposed, as "extra work" by the Service Provider, in order to meet the designated standard. All proposals, and costs, must be approved by the City prior to additional turf aerations occurring.

2.2-18 FERTILIZATION

Exhibit A-Scope of Services 12
The Service Provider will be responsible for performing all fertilizations of turf and landscape and shall be included in the base bid price stated in the Schedule of Compensation. The fertilization schedule shall be coordinated with the City during the first month of the Agreement period.

All turf areas (excluding no-mow) shall receive fertilizer applications four times per year. Approximate dates of these are April 1, June 1, September 1, and November 1. Turf is to be maintained in good condition with horticultural acceptable growth and color, and additional fertilization may be required as extra work. Variations to these dates may be required under individual circumstances. All fertilizer shall be approved by the City prior to application.

All shrub, groundcover and no-mow turf areas shall receive fertilizer applications two times per year.

Approximate dates of these are March 1 and September 1. Intent is to maintain plants in good condition with horticultural acceptable growth and color. Variations to these dates may be required under individual circumstances. All fertilizer shall be approved by the City prior to application.

2.2-19 BARK AND MULCH
The Service Provider will be responsible for notifying the City when areas are in need of new bark or mulch. The City reserves the right to have the bark installed in any manner that it sees fit and by whomever it sees fit. In the event that the City requests that new bark or mulch be added by the Service Provider, it will be considered "extra work” in its entirety.

2.2-20 TREE PRUNING
The Service Provider shall prune trees for clearance as part of the base bid price stated in the Schedule of Compensation. Pedestrian clearance shall be eight feet (8') and vehicular clearance shall be fifteen feet (15'). Responsibility for structural grid pruning, weight reduction pruning, etc. shall not be contained in the base bid and will be considered "extra work”. The City reserves the right to perform this work in any manner that it deems appropriate.

2.2-21 MOWING AND EDGING
Lawn mowing and edging shall be performed as needed to meet the City landscape standards. When lawns cannot be cut on the scheduled day due to rain, they must be cut as soon as weather and ground conditions permit. This trimming shall include cutting all grass along walls, fences, foundations, curbs, sidewalks, shrubs, tree basins, poles, guy wires, irrigation & utility boxes, and any other object within or immediately adjacent to the lawn areas. Turf and plantings around sprinkler heads shall be trimmed to provide maximum water coverage. Trimming shall be done by power edgers or by hand, but in no case will herbicides be permitted without prior written approval. Clippings shall be removed from all adjacent walkways and other paved surfaces immediately after each mowing/edging.

Seed heads on no-mow turf shall be removed on an annual basis. No-mow turf shall be edged as needed to keep from encroaching on walls, fences, sidewalks, etc.

2.2-22 REFUSE DISPOSAL

Exhibit A-Scope of Services 13
All refuse and recycling materials are to be placed in the trash dumpsters and recycling containers located at the City of Morgan Hill Corporation Yard. Green waste is to be placed in bins provided by the City at the Bus Yard across the street from the Corporation Yard.

2.2-23 TRAFFIC CONTROL
Traffic control shall conform to the latest Caltrans Standards to ensure safe flow of traffic and safety of workers in traffic zones. All traffic control costs shall be included in the prices paid for the various Agreement items of work and no additional compensation will be allowed, therefore.

The Maintenance Manager shall be notified prior to any road closures. No traffic lanes on Dunne Avenue, Cochrane Road, Butterfield Blvd., Tennant Ave., or Monterey Road may be closed before 9:00 a.m. or after 3:00 p.m. without written permission from the Maintenance Manager. Access to driveways shall be maintained at all times.

When entering or leaving roadways which bear public traffic, the Service Provider's equipment, whether empty or loaded, shall in all cases yield to public traffic.

The provisions in this section may be modified or altered if, in the opinion of the Maintenance Manager, public traffic will be better served, and work expedited. Such modifications or alterations shall not be adopted until approved in writing by the Maintenance Manager.

14 Section 2.3: Locations and Services Required

2.3-1 GROUP 1 – Parks Mowing and Edging:

In Group 1 the Service Provider shall provide complete turf mowing and edging services only at the following locations:

Group 1 Locations Location Year-Round Frequency
Community Park 171 W Edmundson Ave Weekly (March thru Oct.); Bi-Weekly* (Nov. thru Feb.)
Galvan Park 17666 Crest Ave Weekly (March thru Oct.);
Bi-Weekly (Nov. thru Feb.)
Paradise Park La Crosse Ave & Calle Enrique Weekly (March thru Oct.); Bi-Weekly (Nov. thru Feb.)
Diana Park 505 Diana Ave Weekly (March thru Oct.);
Bi-Weekly (Nov. thru Feb.)
Howard Weichert Park 860 Via Del Castille Weekly (March thru Oct.); Bi-Weekly (Nov. thru Feb.)
Nordstrom Park E Dunne Ave & Murphy Ave Weekly (March thru Oct.); Bi-Weekly (Nov. thru Feb.)
Jackson Park 16695 Trail Drive Weekly (March thru Oct.); Bi-Weekly (Nov. thru Feb.)
*Bi-Weekly means every two weeks.

2.3-2 GROUP 3 – Arterial Medians and Miscellaneous Sites In Group 3 the Service Provider shall provide complete landscape maintenance services as described in this document for the locations shown below. Minimum frequencies for trash & recycling material removal, litter removal, pavement and site furnishing cleaning frequencies are shown:

Group 3 Locations Year-Round Frequency
Arterial medians Biweekly**
Friendly Inn and Parking Lot Weekly
El Dorado Biweekly**
Sunrise Meadows Biweekly**
** Bi-weekly means every two weeks.

Exhibit A-Scope of Services 15

2.3-3 GROUP 6 – Downtown
In Group 6 the Service Provider shall provide complete landscape maintenance services as described in this document for the locations below.

Group 6 Locations: Map #1
Downtown Parking Lots, Train Station, Parks,
Year-Round Frequency
Parking Lots (Area 1, 2, 3, 4) Weekly
Train Station West of RR Tracks (Area 5) Weekly
Community Demonstration Garden/County Courthouse (Area 6) Weekly 3rd Street Landscape Areas
(between Monterey Road and Depot Street) (Area 7)
Weekly
4th Street Landscape Areas
(between Monterey Road and Depot Street) (Area 8)
Weekly
Railroad Park (Area 9) Weekly
Third Street Creek Park (Area 10) Biweekly (M/Th)*
Nob Hill Trail Park (Area 11) Biweekly (M/Th)
Parking Garage Bioswale (Area 12) Weekly
*Bi-weekly means every two weeks.

Group 6 Locations: Map #2
Depot Street Landscape Areas
Year-Round Frequency
Parkway Areas Weekly

Exhibit A-Scope of Services 16

2.3-4 Extra Work
Extra work for Groups 1, 3 & 6 must be preauthorized by Maintenance Services Manager or other designated City staff.

The Regular Time Labor Rate (including work truck and tools) and the Emergency After Hour Response Labor Rate (including work truck and tools) for extra work are stated in this Agreement’s Exhibit B-Schedule of Compensation.

The equipment rates for spray equipment, tractor with implements, slit seeder, and mower are also stated in this Agreement’s Exhibit B-Schedule of Compensation.

Section 2.4: Exhibits
Exhibit A: City of Morgan Hill Landscape Maintenance Standards All landscaped areas shall be maintained to have a neat and well- tended appearance and to provide a safe environment for the general public at all times.

1. Turf

1.1. General Use Standard

1.1.1. All turf areas will support their designed uses

1.1.2. Turf will be healthy with an even and uniform surface, color, and soil moisture that benefits the plant without disrupting the user’s experience. Turf will not exhibit bare spots. Turf will be pest-free. Shall be maintained in accordance with Turf Maintenance Section, Irrigation and Disease and Pest Control Section standards.

1.2. Turf Maintenance

1.2.1. Mowing

1.2.1.1. Maintained Turf Height 2.5-3 inches

1.2.2. Edging - Complete site edging of trees, curbs, sidewalks, beds, buildings, sprinklers, valve boxes, meter boxes, etc., shall be performed to ensure that the site looks groomed and neat at all times.

1.2.3. Aeration - As needed to maintain standard. Minimum of two times per year.

1.2.4. Weeds - Turf will be weed free. (Excluding Group 2 Park Mowing)

1.2.5. Reseeding or Sod Replacement - Reseeding or sod replacement shall be done on an as needed basis to meet standards.

1.2.6. Fertilizer

1.2.6.1. Fertilizer shall be applied to turf four (4) times per year. Additional applications may be required to maintain standard based on soil conditions.

1.2.6.2. Fertilizer analysis will be determined based on plant needs.

2. Irrigation

2.1. General

Exhibit A-Scope of Services 17

2.1.1. Irrigation systems shall be checked as needed at each site to meet standards and conform to the City's conservation efforts and all applicable ordinances, regulations, and laws. All systems will comply with State and local laws regarding prevention and protection of the public water system. All controllers that are on the central system shall be used to their fullest programming capability.

2.1.2. lrrigation preventative maintenance system checks shall be done as needed; all zones will be checked for operation, and repairs made immediately. General inspections of turf and plant materials shall be done routinely for sign of stress or damage. Service Providers must provide the City with a monthly irrigation schedule for all controllers including verification that the controllers are on the central irrigation system. Repairs must be initiated within twenty-four (24) hours of discovery.

2.1.3. Water Usage & Scheduling

2.1.3.1. lrrigation systems will deliver optimum water to each plant type at the lowest cost with maximum resource conservation.

2.1.3.2. Water will be delivered primarily during non-use hours and not between 8:00 am and 5:00 pm.

2.1.3.3. Each station shall be adjusted to meet the needs of the specific area unless authorized by the City, as well as, adjusted due to weather conditions.

2.1.3.4. Supplemental day-time watering shall be performed as needed to maintain standard

3. Disease and Pest Control

3.1. Turf, trees and landscaping shall be disease and pest free. Any signs of stress or damage to trees, turf or planting materials and/or safety concern shall be addressed using an Integrated Pest Management Approach. Service Provider’s work shall be in compliance with the City’s Integrated Pest Management Program. (Exhibit I)

4. Shrubs, Ground Cover Areas

4.1. General Standard

4.1.1. Fertilization, irrigation and cultivation (when applicable) shall be adjusted to serve the requirements of the plant species.

4.1.2. Shall be maintained in healthy, attractive condition that lends variety and interest to the landscape.

4.1.3. Bark mulch shall be placed around and between plants and maintained on an as needed basis.

4.1.4. Removal and Replacement - All failed or damaged plant materials shall be removed and replaced, after City inspection, within thirty (30) days of notice. Replacement plant material shall be the same size and species as the damaged or failed plants, if possible.

The City shall approve replacement of plant materials not meeting these specifications.

4.1.5. Litter and Debris Removal - All areas shall be maintained free of trash and debris.

4.1.6. Weed Control - Plant beds shall be free of weeds. Beds shall be weeded as needed to meet standard.

4.1.7. Trimming All shrubs shall be pruned as needed to meet the intent of the landscape design and have a neat appearance. Ground covers shall be edged as needed to keep plant growth from extending beyond curbs, onto sidewalks, buildings, and turf areas. Ground cover in medians shall not be allowed to extend beyond the curb or sidewalk. Pruning shall occur three (3) times per year or as plant material growth dictates to meet standard.

Exhibit A-Scope of Services 18

4.1.8. All hedge and shrub heights along fences and walls will be maintained at the height of the fence line or at an approved height.

5. Rose and Flower Beds

5.1. Shall be maintained in accordance with the standards listed in Shrubs, Ground Cover, and Mulch Areas.

5.2. Flowering plants shall be dead headed and trimmed on an ongoing basis so that wilted blossoms and other defects do not detract from the decorative nature of the plantings

5.3. lrrigation timers shall be coordinated with scheduled use, and maintained in compliance with lrrigation standards.

6. Trees

6.1. General Standards

6.1.1. Shall provide shade, wind breaks, sound attenuation, and otherwise enhance the park or landscape setting. Trees shall conform to the general shape and height of the species:
significantly deformed specimens shall be removed after authorization.

6.1.2. Weed Control - Mechanical grass trimming around trees shall be accomplished in a way that will not scar the trunk in any way.

6.1.3. Trimming - Tree limbs shall be kept at a safe height for the users anticipated in the vicinity: Eight feet (8') for pedestrian clearance (including over turf areas) and fifteen feet (1 5') for vehicular street clearance.

6.1.4. Trees shall not exhibit broken or cracked limbs or other structural damage, and all suckers shall be removed.

6.1.5. Staking - Young trees shall be properly staked to assist in support until roots are firmly established, especially in wind prone areas. Once firmly established, stakes shall be removed with no protrusion above ground. Trees must be straight. Ties on the stakes shall be checked periodically to ensure they are adjusted properly. Tight or damaged ties or stakes shall be replaced or repaired.

6.1.6. Removal and Replacement - All damaged trees shall be removed and replaced, after authorization, and within thirty (30) days of notice. All replacement trees shall be the same size and species of tree as the damaged tree up to 36" box tree. If the tree cannot be matched, the City will determine an appropriate replacement species.

7. Paved Surfaces

7.1. Paved surfaces include areas topped with asphalt, concrete, brick and pavers.

7.2. Pathways, parking lots, tennis courts and other paved areas shall be free of sand, debris, leaves and litter so at no time it detracts from the look or safety of the area.

7.3. Sand and decomposed gravel shall be removed from sidewalks.

7.4. All surfaces shall be weed free.

7.5. No standing water from irrigation shall be permitted on pathways.

7.6. Surfaces shall be cleaned of all spills, gum, paint, chalk, dirt & debris.

8. Unpaved Walkways, Other Unplanted Areas

8.1. Unpaved surfaces include designated paths and trails with porous surfacing.

8.1.1. All unpaved surfaces shall be free of leaves, weeds, debris, and litter so at no time it detracts from the look or safety of the area.

Exhibit A-Scope of Services 19

8.1.2. No standing water from irrigation shall be permitted on pathways.

8.1.3. Unpaved walkways shall be maintained in a safe, level, and smooth manner

8.2. Fencing, Walls - Notify City of any vandalism, defects, safety items within twenty-four (24) hours of discovery.

9. Playground Maintenance

9.1. Playgrounds shall be maintained two (2) times per week to ensure an even distribution of material across the surface.

9.2. Organic and non-organic debris shall be removed from all play areas immediately upon discovery.

9.3. The City shall be notified of any vandalism, defects, safety items as soon as possible and no more than within twenty-four (24) hours of discovery.

10. Litter Removal and Trash & Recycle Container Servicing

10.1. Trash and & recycling containers shall be emptied as needed when they are half full or more or have a foul odor at the time of service.

10.2. Site shall be free of all litter after each landscape service.

11. Site Furnishings (Benches, Tables, Trash Containers, Fountains, etc)

11.1. Site furnishings such as benches, tables, trash containers, drinking fountains, water features, bollards, etc. shall be inspected on a monthly basis for condition and defects.

11.2. Site furnishings shall be pressure washed and/or cleaned as needed to maintain in clean condition.

11.3. Hazardous debris shall be removed immediately upon discovery.

11.4. The City shall be notified of any vandalism, defects, and/or safety items within twenty-four (24) hours of discovery.

12. Downtown Parks

12.1 Nob Hill Trail Park: The selected Service Provider will be given vehicle access to Nob Hill Trail Park via a Service Provider’s code to the keypad at the gate. The scope of work for Nob Hill Trail Park includes the maintenance of the landscape areas, litter control on the trails throughout the park, site furnishing cleaning, plant maintenance as noted in the planting and irrigation plans and weed abatement in the natural grass area. Please note that litter removal along the trail that goes up from Creek Park on the left side of Third Street from the East Third Street Bridge and then down Del Monte Avenue to Nob Hill Terrace will also be part of the scope of work.

12.2 Railroad Park : The scope of work for Railroad Park is landscape maintenance and litter control.

12.3 Third Street Creek Park: The scope of work for Third Street Creek Park is landscape maintenance and litter control.

13 Updated: July 2022

EXHIBIT B

SCHEDULE OF COMPENSATION RATES
Please see next page for attached breakdown of Schedule of Compensation Rates.

Group 1: Park Mowing
Area Monthly # of months Total Annual Amt
Community Park $ 1,664.00 12.00 $ 19,968.00
Galvan Park $ 416.00 12.00 $ 4,992.00
Paradise Park $ 416.00 12.00 $ 4,992.00
Diana Park $ 145.00 12.00 $ 1,740.00
Howard Weicert $ 216.00 12.00 $ 2,592.00
Nordstrom Park $ 12.00 70.00 $ 840.00
Jackson Park $ 12.00 85.00 $ 1,020.00
GRAND TOTAL $ 36,144.00
Group 3: Medians and Misc. Sites
Area
Monthly
Maintenance Irrigation Total Annual Amt
Arterial Medians $ 265.00 2,250.00 $ $ 30,180.00
Friendly Inn & Parking Lot $ 35.00 243.00 $ $ 3,336.00
El Dorado $ 15.00 55.00 $ $ 840.00
Sunrise Meadows $ 48.00 229.00 $ $ 3,324.00
GRAND TOTAL $ 363.00 2,777.00 $ $ 37,680.00
Group 6: Downtown
Area
Monthly
Maintenance Irrigation Total Annual Amt
Parking Lots (Areas 1, 2, 3, 4) $ 30.00 257.00 $ $ 3,444.00 Train Station West of Railroad Tracks
(Area 5) $ 20.00 170.00 $ $ 2,280.00
Community Demonstration
Garden/County Courthouse (Area 6) $ 30.00 257.00 $ $ 3,444.00 3rd Street Landscape Areas (Area 7) $ 30.00 257.00 $ $ 3,444.00 4th Street Landscape Areas (Area 8) $ 15.00 85.00 $ $ 1,200.00 Railroad Park (Area 9) $ 40.00 346.00 $ $ 4,632.00
Third Street Creek Park (Area
10) $ 40.00 346.00 $ $ 4,632.00
Nob Hill Trail Park (Area 11) $ 40.00 346.00 $ $ 4,632.00 Parking Garage Bioswale
(Area 12) $ 15.00 80.00 $ $ 1,140.00
Depot Street Parkway Areas (Map 2) $ 346.00 $ 40.00 $ 4,632.00 GRAND TOTAL $ 2,490.00 $ 300.00 $ 33,480.00
Annual Total for Contract Services $ 107,304.00
Two-Year Contract Services Amount $ 214,608.00
Two-Year Allocation for Extra Services @ $30,000 per year $ 60,000.00 Grand Total for Two-Year Contract $ 274,608.00
BRIGHTVIEW LANDSCAPE SERVICES, INC.

January 1, 2023 to December 31, 2024

EXHIBIT B-SCHEDULE OF COMPENSATION

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Extra Work Category Hourly Rates
Regular Time Labor Rate including work
truck and tools
Landscape Maintenance Laborer $ 50.00
Skilled Technician $ 70.00
Supervisor/Foreman $ 65.00
Emergency/After Hour Response - Labor
Rate including work truck and tools
Landscape Maintenance Laborer $ 75.00
Skilled Technician $ 105.00
Supervisor/Foreman $ 97.50
Equipment
Spray Equipment $ -
Tractor with implements $ 100.00
Slit seeder $ 35.00
Mower $ -
Supplies
% Mark up over costs 10%
Brightview Landscape -Groups 1, 3 & 6
January 1, 2023 to December 31, 2024
Extra Services Rates

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14 Updated: July 2022

EXHIBIT C

SCHEDULE OF PERFORMANCE
Maintenance services to be scheduled per Exhibit A-Scope of Services in coordination with the City Maintenance Manager or other designated City staff. Extra services to be coordinated with City Maintenance Manager or other designated City staff.

11 CITY COUNCIL STAFF REPORT
MEETING DATE: November 16, 2022
PREPARED BY:

Angie Gonzalez, Deputy City Clerk
APPROVED BY: City Manager
RECEIVE REPORT REGARDING UPCOMING 2023 COMMISSION

VACANCIES PER MADDY ACT

RECOMMENDATION(S)
Receive report.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Supporting our Youth, Seniors, and Entire Community
Fostering a Positive Organizational Culture
Preserving our Community History
Enhancing Diversity and Inclusiveness
2022-2023 Strategic Priorities
Community Outreach, Engagement, and Messaging
REPORT NARRATIVE:

Government Code Section 54972 (Maddy Act) requires that before December 31st of each year, the City Council cause to be prepared a list of appointments to all ongoing boards, commissions, and committees that the City Council appoints. The list includes which terms will expire during the next calendar year with the name of the incumbent appointee, the date of appointment, the date the term expires, and the necessary qualifications for the position.

Chapter 2.22.010 - Master Provisions for Boards and Commissions of the Municipal Code established the following commissions: Planning Commission (PC); Parks and Recreation Commission (PRC); and the Library, Culture, and Arts Commission (LCAC).

Chapter 2.22.010, Section B, states that: “Unless otherwise set forth, all members of boards, commissions and committees shall be residents of the city and shall continue to be residents of the city during their terms of office. Notwithstanding the foregoing, individuals who reside within the Morgan Hill Unified School District boundary and who do not otherwise reside in any city other than Morgan Hill may be appointed to boards, commissions and committees provided that no more than thirty percent of the members of any board, commission or committee shall be non-Morgan Hill residents.” Planning Commissioners with terms due to expire in 2023 are highlighted in the

11 attached “Local Appointment List.” The PC will have four (4) members with terms due to expire on June 1, 2023. No terms for the LCAC or PRC will expire in the 2023 calendar year.

COMMUNITY ENGAGEMENT:

This report serves to inform the public of the upcoming board, commission, and committee vacancies.

ALTERNATIVE ACTIONS:

Not Applicable.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

Per Resolution No. 7082, adopted by the City Council on December 17, 2014, this report is being presented as an informational item. The City Clerk’s Office will post the “Local Appointment List” in accordance with Government Code Section 54972.

FISCAL AND RESOURCE IMPACT:

The time necessary to prepare this report is accommodated in the Administrative Services Budget.

CEQA (California Environmental Quality Act):

Not a Project. This is an administrative activity that will not result in direct or indirect physical changes in the environment.

4/12/2019 Morgan Hill, CA Code of Ordinances
Chapter 2.22 - MASTER PROVISIONS FOR BOARDS AND COMMISSIONS* Sections:

2.22.01 O - Establishment of boards and commissions.

A. There are established within the city the following boards and commissions:

1. Planning commission;

2. Parks and recreation commission;

3. Library, culture and arts commission; and

4. Disaster council.

B. Unless otherwise set forth, all members of boards, commissions and committees shall be residents of the city and shall continue to be residents of the city during their terms of office.

Notwithstanding the foregoing, individuals who reside within the Morgan Hill Unified School District boundary and who do not otherwise reside in any city other than Morgan Hill may be appointed to boards, commissions and committees provided that no more than thirty percent of the members of any board, commission or committee shall be non-Morgan Hill residents.

C. Members shall be appointed by the mayor subject to approval of a majority vote of the city council and may be removed without cause by vote of any three members of the city council.

D. The appointment terms of members may be extended, at the discretion of the city council, until such time as a successor member may be appointed and take office.

E. Vacancies in the commission occurring other than by expiration of term shall be filled for the unexpired term in the same manner as original appointments.

F. The members of the commission shall organize the commission and shall elect from its members a chair and vice-chair and such other officers as may be necessary in accordance with adopted city council policy.
(Ord. 1778 N.S. § 2 (part), 2006)
(Ord. No 1930 N.S., § 2, 4-22-2009; Ord. No. 1935 N.S., § 1, 6-3-2009)

2.22.030 - Clerk and secretary.

The city clerk or designate shall also act as clerk for each of the boards and commissions and shall have authority to sign any official notices and also to certify any resolution of the commissions or boards. The city council may appoint a person not a member of the commission or board to act as secretary of the 1/3

4/12/2019 Morgan Hill, CA Code of Ordinances
commission or board. The secretary shall keep a record of all proceedings of said board or commission, its resolutions, its findings and actions, which records shall be a public record and kept with the city clerk in the City Hall building.
(Ord. 1778 N.S. § 2 (part), 2006)

2.22.040 - Rules of procedure.

A. The chair shall preside at all meetings of the board or commission. The vice chair shall assume the duties of the chair in the absence of or in case of inability of the chair.

B. A majority of the members of the commission or board shall constitute a quorum for the transaction of business.

C. Unless otherwise specified herein, each board or commission may adopt its own rules and regulations for the transaction of its business. Such rules shall be subject to approval of the city council before becoming effective.
(Ord. 1778 N.S. § 2 (part), 2006)

2.22.050 - Rules of attendance.

If any member is absent from three of any six consecutive regular board or commission meetings, unless such absence is with the permission of the chair, or vice chair in absence of the chair, expressed in the official minutes, the member's seat shall be deemed vacated. The city manager shall so notify the city council and the council shall take action to fill the seat within a reasonable period of time. (Ord. 1778 N.S. § 2 (part), 2006)

2.22.060 - Meetings.

Unless otherwise specified, the commission shall hold regular meetings once every two months at a designated time and place which shall be fixed and determined by the commission and entered upon in its minutes. Special meetings of the commission may be called at any time by the chair or by a majority of the members of the board upon notice being given to all members of the board and to all news media at least twenty-four hours in advance of the meetings, as required by the laws of the state of California. (Ord. 1778 N.S. § 2 (part), 2006)
(Ord. No. 1930 N.S., § 3, 4-22-2009)

2.22.070 - Compensation.
2/3

4/12/2019 Morgan Hill, CA Code of Ordinances
Members of the boards and commissions shall serve without compensation but may receive reimbursement for actual and necessary expenditures made or incurred in the performance of their prescribed duties in accordance with state law and the Municipal Code and policies of the city of Morgan Hill.
(Ord. 1778 N.S. § 2 (part), 2006)

2.22.080 - Effect.

Nothing in this chapter shall be construed as restricting or curtailing any of the powers of the city council or city officers as defined by the laws of the state of California or by this Municipal Code. Except as otherwise set forth in Chapter 2.36, the city council declares that the public interest and convenience require the appointment of the boards and commissions established pursuant to Section 2.22.010 to act purely in an advisory capacity to the city council.
(Ord. 1778 N.S. § 2 (part), 2006)
3/3

Chapter 2.32 - PARKS AND RECREATION COMMISSION*
Sections:

2.32.010 - Created.

There is established a new commission which is entitled the "Morgan Hill parks and recreation commission" to serve in an advisory capacity to the city council. (Ord. 1778 N.S. § 4 (part), 2006)

2.32.020 - Membership—Terms of office.

The commission shall consist of seven members. Members shall not be officials or employees of the city nor be paid members of any organization receiving financial support from the city. Notwithstanding any language to the contrary, the mayor and city council may appoint a Morgan Hill Unified School District official as a member of the commission.

For the first seven members appointed, the terms of three of the members shall expire on May 1, 1999, and the terms of four of the members shall expire on May 1, 2000. All new full term appointments after April 1, 2006 shall be for a period of four years. (Ord. 1778 N.S. § 4 (part), 2006)

2.32.030 - Powers and duties.

The powers and functions of the commission shall be as follows, provided that nothing in this Chapter 2.32 shall be construed to give the commission power or duty to supervise or administer any public buildings, public parks, streets or other public property or programs:

A. To hold hearings on matters pertaining to planning and development of parks, trails, recreation programs for all segments of the population, bicycle facilities, and capital expenditures related to parks, trails, recreational facilities, and bicycle facilities; B. To facilitate coordination of the efficient and effective use of recreation facilities by other public, private, and non-profit groups and organizations to city residents; C. To consider, formulate and propose fiscally prudent programs, activities, resources, plans and development designed to provide for, regulate, and direct the future growth and development of the parks facilities and recreation programming for the people of the city; D. To make investigations and reports for future acquisition of park sites; E. To review opportunities for joint use of recreation/parks, and storm retention/detention; F. To act on behalf of the city and function as the City of Morgan Hill Bicycle and Trails Advisory Committee;
G. To conduct such other hearings as are necessary and in accordance with its own rules and regulations for the transaction of its business, or rules for conduct; and H. To report its decisions and recommendations relating to the above matters, in writing to the city council.
(Ord. 1778 N.S. § 4 (part), 2006)
(Ord. No. 1930 N.S., § 4, 4-22-2009)

4/12/2019 Morgan Hill, CA Code of Ordinances
Chapter 2.36 - PLANNING COMMISSION*
Sections:

2.36.01 O - Created-Statutory authority.

The planning commission is established pursuant to the authority contained in Chapter 3 of Title VII of the California Government Code, entitled "Local Planning, " as existing or hereafter amended. Reference shall be made to said Chapter 3 for interpretation of this chapter. (Ord. 811 N.S. § 1 (11-3-1), 1987)

2.36.020 - Membership-Terms of office-Vacancies.

A. The city planning commission shall consist of seven members. Members of the planning commission shall serve the following terms:

1. In the year 1998, three members shall be appointed to serve terms ending June 1, 2001;

2. The four members who were appointed in 1996 shall serve terms ending June 1, 1999;

3. Thereafter, all terms shall be for four years and shall expire on June 1st. (Ord. 1778 N.S. § 5, 2006: Ord. 1407 N.S. § 2, 1998; Ord. 1083 N.S. § 1, 1992; Ord. 811 N.S. § 1 (11-3-2), 1987)

2.36.030 - Meetings.

The commission shall hold regular meetings at least twice a month or as otherwise deemed necessary by the commission. All meetings of the commission shall be held in the city council chambers at City Hall or other location designated by minute order of the city council or at a location deemed necessary or appropriate by the planning commission.
(Ord. 1197 N.S. § 1 (part), 1994: Ord. 811 N.S. § 1 (11-3-3), 1987)

2.36.040 - Powers and duties.

The planning commission shall have the powers and shall perform all the duties conferred and imposed upon city planning commissions by the applicable provisions of Chapter 3 of Title VII of the Government Code of the state and, in addition, the planning commission shall:

A. Perform all the functions assigned to the commission by the subdivision and zoning ordinances (Titles 17 and 18 of this code) of the city, and all general laws of the state of California;
B. Serve as an advisory body to the city council on matters related to city growth and 1/2

4/12/2019 Morgan Hill, CA Code of Ordinances
development and on such other matters as may be requested by the council; C. Promote public interest in and understanding of the subdivision and zoning ordinances of the city, and also of all master plans and other official plans and regulations pertaining to planning which have been approved officially by the city council; D. Review and advise the city council on all proposed amendments to Title 17, Subdivisions, and Title 18, Planning and Land Use Regulations; E. Approve or disapprove application for designation of cultural resources and historic districts pursuant to Chapter 18.75 of this code, or as amended; F. Approve or disapprove permits sought to remove or demolish a cultural resource, cultural resource site or historic district pursuant to Chapter 18.75 of this code, or as amended.
(Ord. 1111 N.S. §§ 2, 3, 1992; Ord. 899 N.S. § 18, 1989; Ord. 811 N.S. § 1 (11-3-4), 1987) 2/2

Chapter 2.68 - LIBRARY, CULTURE AND ARTS COMMISSION
Sections:

2.68.010 - Created.

There is established a new commission which is entitled the "library, culture and arts commission" to serve in an advisory capacity to the city council.
(Ord. 1778 N.S. § 9 (part), 2006: Ord. 1374 N.S. § 1 (part), 1998)

2.68.020 - Membership—Terms of office.

The commission shall consist of seven members. Members shall not be officials or employees of the city, county library employees nor paid members of any organization receiving financial support from the city for library and art services.
(Ord. 1778 N.S. § 9 (part), 2006: Ord. 1559 N.S. § 1, 2002: Ord. 1407 N.S. § 5, 1998; Ord. 1382 N.S. § 1, 1998; Ord. 1374 N.S. § 1 (part), 1998)

2.68.030 - Powers and duties.

The powers and functions of the commission shall be as follows:

A. To act in an advisory capacity to the city council in all matters pertaining to library, culture and arts in the community;
B. To serve as a liaison between the city and the Santa Clara County library; C. To consult with private community groups supportive of library, culture and art programs and serve as a liaison between such groups and the city;
D. To provide advice and recommendations regarding the adequacy of existing library facilities and operations;
E. To look for opportunities for participation of artists and performers in city-sponsored activities, and ways to encourage community involvement in the arts; F. To work cooperatively with city boards and commissions and other public and private organizations in creating and promoting art and cultural programs and activities within the city; G. To coordinate and strengthen existing organizations in the arts and develop cooperation with regional organizations;
H. To make recommendations to the city council regarding the funding of community art projects, including the search for private and public grants, and regarding the disbursement of revenues consistent with the needs of the community;
I. To review and make recommendations to the city council upon all works of art to be acquired by the city, either by purchase, gift or otherwise, and exterior works of art installed in the city on public property;
J. To recommend to the city council the adoption of such ordinances or policies as it may deem necessary for the administration and preservation of the arts and cultural development of the city;
K. To perform such other tasks as may be expressly requested of it by the city council;

L. To conduct such other hearings as are necessary and in accordance with its own rules and regulations for the transaction of its business, or rules for conduct; and M. To report its decisions and recommendations relating to the above matters, in writing to the city council.
(Ord. 1778 N.S. § 9 (part), 2006: Ord. 1374 N.S. § 1 (part), 1998)

17555 PEAK AVENUE MORGAN HILL CALIFORNIA 95037
[email protected]
POSTED ON November 17, 2022 PER MADDY ACT

LOCAL APPOINTMENTS LIST
Unless otherwise set forth, all members of boards, commissions and committees shall be residents of the city and shall continue to be residents of the city during their terms of office. Notwithstanding the foregoing, individuals who reside within the Morgan Hill Unified School District boundary and who do not otherwise reside in any city other than Morgan Hill may be appointed to boards, commissions and committees provided that no more than thirty percent of the members of any board, commission or committee shall be non-Morgan Hill residents.

LIBRARY, CULTURE & ARTS COMMISSION (Four Year Term)
Meets monthly to serve as a liaison with the County Library, advise the City Council and City staff on culture and art related projects and programming, and support efforts to initiate art and cultural events in the community.

Date Appointed Name Term Expires
July 22, 2020 Emily Borchers April 1, 2026
June 6, 2018 Poonam Chabra April 1, 2024
July 22, 2020 Patrice Lyn April 1, 2026
March 20, 2019 Suman Ganapathy April 1, 2024
May 3, 2017 Katie Khera April 1, 2024
May 4, 2022 Cindy Blanton April 1, 2026
April 21, 2021 Amanda Santiago April 1, 2024
PARKS & RECREATION COMMISSION (Four Year Term)
Meets monthly to make recommendations regarding the planning and development of parks, cultural facilities and recreation programs.

Date Appointed Name Term Expires
May 4, 2022 Harpreet Vittal April 1, 2026
February 21, 2018 Maureen Grzan-Pieracci April 1, 2026
May 4, 202 Shweta Maniar April 1, 2026
February 17, 2016 Richard Scott April 1, 2024
July 22, 2020 David Lovato April 1, 2024
May 4, 1998 Craig C. van Keulen April 1, 2026
July 22, 2020 John Moniz April 1, 2024
PLANNING COMMISSION (Four Year Term)
Meets twice monthly to advise on matters related to City growth and development.

Date Appointed Name Term Expires
July 15, 2015 Liam Downey June 1, 2023
May 3, 2017 Mohammad Habib June 1, 2025
August 3, 2022 James Wilson June 1, 2025
April 17, 2019 Malisha Kumar June 1, 2025
January 28, 1989 Joseph Mueller June 1, 2023
March 2, 2022 Paul Lake June 1, 2023
April 25, 2007 Wayne Tanda June 1, 2023
Note: Yellow Highlighted Commissioners have terms expiring in 2023

RESOLUTION NO. 7082

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

MORGAN HILL, ACCEPTING THE CITY CLERK'S REPORT
ON UPCOMING 2015 COMMISSION VACANCIES, DIRECTING
THE CITY CLERK TO PREPARE A "LOCAL APPOINTMENT
LIST" OF ALL ONGOING BOARDS, COMMISSIONS AND

COMMITTEES APPOINTED BY THE CITY COUNCIL, AND

THAT THE LIST OF APPOINTMENTS TO BE POSTED
ACCORDING TO LAW PRIOR TO DECEMBER 31, 2014 AND
PRIOR TO EVERY DECEMBER 31, THEREAFTER
WHEREAS, the "Maddy Act" was enacted to maximize public awareness of local appointments made by the City Council; and
WHEREAS, the Maddy Act takes into consideration a vast and largely untapped reservoir of talent which exits among the citizenry that all too frequently are not aware of the opportunities for participation on local regulatory and advisory boards and commissions; and WHEREAS, in accordance with Government Code Sections 54972, the City Council shall cause to be prepared a list of appointments (Local Appointment List) of all ongoing boards, commissions and committees that are appointed by the City Council; and WHEREAS, the "Local Appointment List" is to include the terms due to expire during the next calendar year with the name of the incumbent appointee, the date of appointment, the date the term expires, and the necessary qualifications for the position.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MORGAN HILL,

CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:

SECTION 1 . Pursuant to Government Code 54972, the City Council directs the City Clerk to prepare the "Local Appointment List" to include all the information required by law.

SECTION 2 . That the City Clerk, or his /her designee, is directed to post the "Local Appointment List" according to law prior to December 31, 2014 and every December 31 thereafter.

SECTION 3 . That the City Clerk shall forward to the City Council the "Local Appointment List," as an informational report.

SECTION 4. That City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions.

City of Morgan Hill
Resolution No. 7082

PASSED AND ADOPTED by the City Council of the of the City of Morgan Hill at a Regular Meeting held on the 17 day of December 2014 by the following vote:

AYES: COUNCIL MEMBERS: Larry Carr, Rich Constantine, Marilyn Librers, Gordon Siebert, Steve Tate
NOES: COUNCIL MEMBERS: None
ABSTAIN: COUNCIL MEMBERS: None
ABSENT: COUNCIL MEMBERS: None
ATTEST:

IRMA TORRE,Z STEMTTATE, Mayor
City Clerk
CERTIFICATION cz
1, Irma Torrez, City Clerk of the City of Morgan Hill, California, do hereby certify that the foregoing is a true and correct copy of Resolution No. 7082, adopted by the City Council at the meeting held on December 17, 2014.

WITNESS MY HAND AND THE SEAL OF THE CITY OF MORGAN HILL. 7 DATE:

IRM.kORREZ, City Perk

City of Morgan Hill
Resolution No. 7082

CITY OF MORGAN HILL
17575 PEAK AVENUE MORGAN HILL CALIFORNIA 95037
eneral a nioreanhill ca eov
POSTED ON 2014 PER MADDY ACT

LOCAL APPOINTMENTS LIST
Unless otherwise set forth, all members of boards, commissions and committees shall be residents of the city and shall continue to be residents of the city during their terms of office. Notwithstanding the foregoing, individuals who reside within the Morgan Hill Unified School District boundary and who do not otherwise reside in any city other than Morgan Hill may be appointed to boards, commissions and committees provided that no more than thirty percent ofthe members of any board, commission or committee shall be non- Morgan Hill residents LIBRARY, CULTURE & ARTS COMMISSION Two Year Term)
Serves as liaison with the County Library and meets monthly to advise on the adequacy of library services.

Date Appointed Name Term Expires
January 13, 2011 Susan Brazelton April 1, 2015
May 16, 2012 Loren Burks - Winzeler. April 1, 2016
September 17, 2014 Cecilia Clark April 1, 2015
April 16, 2014 Judith Cowan April 1, 2016
April 16, 2014 Bill Haskell April 1, 2016
April 25, 2007 Tim Hennessey April 1, 2015
April 16, 2014 Paul Lake April 1, 2016
PARKS & RECREATION COMMISSION Four Year Term)
Meets monthly to make recommendations regarding the planning and development of parks, cultural facilities and recreation programs.

Date Appointed Name Term Expires
November 7, 2007 Martin Cheek April 1, 2016
April 16, 2014 LaRene Green April 1, 2018
May 16, 2012 Matthew Kelly April 1, 2016
April 26, 2006 Kimberly Leiser April 1, 2018
October 2, 2013 Ronald Locicero April 1, 2018
April 16, 2014 Mary Seehafer April 1, 2016
May 4, 1998 Craig C. van Keulen April 1, 2018
School District Liaison Bob Benevento N/A
Lx -Officio Member:

PLANNING COMMISSION Four Year Terra)
Meets twice monthly to advise on matters related to City growth and development.

Date Appointed Name Term Expires
May 18, 2011 John Kim KcKay June 1, 2017
February 9, 2005 Susan Koepp -Baker June 1,2015
February 5, 2014 Zenon Komarcyzk June 1, 2015
January 28, 1989 Joseph Mueller June 1, 2015
September 1, 2014 Michael Orosco June 1, 2017
May 16, 2012 Rene Angelo Spring June 1, 2017
April 25, 2007 Wayne Tanda June 1, 2015

12 CITY COUNCIL STAFF REPORT
MEETING DATE: November 16, 2022
PREPARED BY:

Matthew Mahood, Economic Development Director
APPROVED BY: City Manager

ADOPT RESOLUTION OF FORMATION TO FORM THE MORGAN HILL

PROPERTY AND BUSINESS IMPROVEMENT DISTRICT (MHPBID)

RECOMMENDATION(S)

1. Open/close public hearing;

2. At the close of the public hearing, order the tabulation of ballots; and

3. If ballots in support of MHPBID formation exceed ballots in opposition to MHPBID formation, adopt resolution forming the MHPBID.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety
2022-2023 Strategic Priorities
Economic Development
Guiding Documents
Economic Blueprint
Morgan Hill 2035 General Plan
Vision Zero
REPORT NARRATIVE:

Background:

The Morgan Hill Property Business Improvement District (MHPBID) is a benefit assessment district whose main goal is to provide improvements and activities which constitute and convey a special benefit to assessed parcels. This approach has been used successfully in other cities throughout the country to provide special benefits to property owners, namely increased sales, attraction of new tenants, increased occupancies, and specifically increased property values. There are over 100 PBIDs throughout California and upwards of 1,500 throughout the country.

Over the last six months, City staff has been working alongside Civitas Advisors and a Downtown Property Owners Steering Committee on the creation of the Management

12 District Plan, the PBID assessment formula, and the Owners' Association formation. In addition to working with the Steering Committee, an extensive outreach effort has been underway to connect with all 59 Downtown property owners. The outreach included one-on-one meetings, mailers, and an in-person meeting held on September 19, 2022.

On September 28, 2022, the City Council approved the Resolution of Intention to Form the Morgan Hill Property and Business Improvement District and authorized the City Manager to sign the ballot and other related documents for all City-owned properties in support of the formation of the Morgan Hill Property and Business Improvement District.

On September 29, 2022, City staff mailed formal PBID ballots to all Downtown Property Owners within the Assessment District. Completed PBID ballots are being returned to the City Clerk in a sealed envelope. On November 16, 2022, once the PBID Formation hearing is opened by the City Council, the ballots will be opened and the results will be reported by the City Clerk. The PBID formation requires that a majority (51%) of the returned ballots from Downtown property owners be in support of approving the assessment and District formation.

Management District Plan
The MHPBID will be governed in accordance with a written Management District Plan (Attachment 1), pursuant to Streets and Highways Code Section 36622. The Management District Plan includes the proposed boundary of the MHPBID, a service plan, assessment methodology, budget, proposed means of governance, and Engineer’s Report. The MHPBID includes parcels north of Dunne, east of Del Monte, south of Main, and west of Butterfield, as shown on the map in the Management District Plan. Within the District, there are 98 properties owned by 59 individual property owners, of which three (3) are non-profit organizations. Single family, multi-family, vacant land, and open space properties are not subject to the assessment.

The MHPBID will have a five (5) year life beginning January 1, 2024, or as soon as possible thereafter, through December 31, 2028, or five (5) years after the start date.

Once per year, beginning on the anniversary of the MHPBID formation, there is a 30- day period in which property owners paying more than 50% of the assessment may protest and initiate proceedings to terminate the MHPBID.

As provided by State Law, the MHPBID assessment will appear as a separate line item on annual property tax bills prepared by the County of Santa Clara (County). Parcels which do not receive property tax bills will be invoiced by the County. Property tax bills are generally distributed in the fall, and payment is expected by lump sum or installment. The County of Santa Clara shall distribute funds collected to the City of Morgan Hill which shall forward them to the MHPBID. Existing laws for enforcement and appeal of property taxes, including penalties and interest, apply to the MHPBID assessments. The City shall be paid an administration fee to cover its costs of collection and administration.

The MHPBID proposed assessment rate (cost to the parcel owner) is based on parcel type and square footage, and in some cases, linear frontage. The initial annual

12 assessment rate applied to commercial parcels will be $0.10 per square foot per year.

The three non-profit parcels will be issued a reduced assessment of $0.04 per square foot per year. Frontage rates are applied to high traffic areas and parcels fronting Monterey Rd., Depot St., and East 3rd St. Frontage rates are applied based on a parcel’s linear frontage. Commercial parcels will be assessed at $5.00 per linear foot of frontage and non-profit parcels will be assessed at a reduced rate of $2.00 per linear foot of frontage. City parcels will be assessed at the commercial rate. Assessment rates may be subject to an increase of no more than three percent (3%) per year.

The Management District Plan has been revised since it was last introduced during the Resolution of Intention hearing. The budget has been updated to reflect the most recent parcel information from the previous estimation of $282,680.72 to $249,356.52. The Engineer’s Report and all calculations in the Management District Plan have been recalculated using the new budget. As a result of this update, the City's revised annual contribution would be $108,155.50, reduced from the original assessment of $134,991.70.

In addition to the assessed funds, the MHPBID is required to secure an annual nonassessment fund of approximately $35,283.44. These monies are outside the assessment and can be secured through grants, event revenue, and/or donations.

Furthermore, an update to the annual report requirements has been made in the Management District Plan. In addition to the requirements of Streets and Highways Code §36650, a copy of the previous year’s accepted federal and state tax filings must be submitted as part of the annual report.

MHPBID District Management
The MHPBID shall be governed by the Downtown Morgan Hill Improvement District (DMHID) Board, with oversight from the Morgan Hill City Council. DMHID, shall serve as the Owners’ Association described in the Streets and Highways Code §36612. DMHID will be formed as a new 501(c)(6) not-for-profit organization. The DMHID Board of Directors and its staff are charged with the day-to-day operations of the MHPBID. The Owners’ Association is charged with managing funds in accordance with this Management District Plan and must submit an annual report to the City. The DMHID Board of Directors will include representation of Downtown property owners, business owners, residents, and the City. The proposed structure of the Board includes up to two City seats similar to the Visit Morgan Hill (TBID) Board of Directors. DMHID will assist in administering the approximate $106,000 remaining funds from the previous PBID assessment in accordance with the previous PBID Management District Plan. In addition to managing the District's property assessments, the Owners' Association will also have the responsibility to manage and source non-assessment funding in the form of grants, corporate sponsorships, event income, and other miscellaneous funds.

Article V - Directors
The proposed articles of incorporation for the Downtown Morgan Hill Improvement District (DMHID) Board requires a five (5) to nine (9) person Board, serving a minimum of a three (3) year term. The board shall have at a minimum three (3) Directors representing property owners paying the assessment within the District, two (2)

12 Directors from the City of Morgan Hill staff members representing Public Services and Economic Development; and up to four (4) Directors that may represent a combination of property owners, business owners, or community residents within the District.

Members from the Steering Committee that have been working alongside staff to form the business district have agreed to serve on the initial DMHID Board of Directors. The steering committee meets the representation requirements outlined in the DMHID bylaws.

After the District is formed, the DMHID Board of Directors will call for nominations from eligible property owners, business owners, or community residents within the District; and then conduct interviews to select and approve the 2 remaining open board seats.

MHPBID Formation Process
September 28, 2022 RESOLUTION OF INTENTION HEARING (COMPLETED) Upon the submission of a written petition, signed by the property owners in the proposed MHPBID who will collectively pay more than 50 percent (50%) of the assessments proposed to be levied, the City Council may initiate proceedings to form a district by the adoption of a resolution expressing its intention to form a district.

Petition Status: Petitions in favor of district formation were submitted by 26 property owners, which represent 87.45% of the total MHPBID assessment. This majority petition allowed the Council to initiate proceedings for MHPBID formation at the September 28, 2022 meeting.

September 29, 2022 NOTICE & PROPOSITION 218 BALLOT (COMPLETED) The Property and Business Improvement District Law of 1994 and Proposition 218 require the City to mail written notice and assessment ballots to the owners of all property proposed to be assessed within the MHPBID. Mailing the notice and assessment ballot starts a mandatory forty-five (45) day period in which owners may cast ballots.

November 16, 2022 FINAL PUBLIC HEARING
The City Council will open a public hearing and receive public testimony. At the end of testimony, Council will close the public hearing and direct tabulation of assessment ballots returned, and not withdrawn, to determine whether there is a majority protest against the assessment. A majority protest exists if the ballots returned in opposition to the proposed assessment outweigh the ballots returned in support of the proposed assessment, weighted by the amount of the assessment each individual owner will pay.

If there is no majority protest, the Council may adopt a resolution declaring the results of the majority protest proceedings and forming the MHPBID.

COMMUNITY ENGAGEMENT:

Inform/ Involve/ Collaborate
 In November and December 2021, City staff engaged Downtown property owners to gauge interest in a Downtown PBID formation. A survey of needs and wants identified the top issues property owners would like to see addressed,

12 including safety, maintenance, and beautification.
 City staff conducted three Steering Committee Meetings with Downtown property owners and City staff to develop the Management District Plan.  City staff has reached out to all 59 Downtown property owners, and we have been in direct communication with 36 property holders in the Downtown District.  In July and August 2022, City staff provided updates to the Morgan Hill Downtown Association on the process and status of the PBID formation.  On August 18, 2022, City staff mailed PBID awareness and marketing materials to every assessed Downtown property owner.
 On September 7, 2022, City staff presented an update on the PBID formation process to the Morgan Hill Chamber of Commerce.
 On September 19, 2022, City staff conducted an outreach meeting, inviting all Downtown Property Owners to participate.
 On September 29, 2022, City staff mailed formal PBID ballots to all Downtown Property Owners within the Assessment District.

ALTERNATIVE ACTIONS:

The City Council may provide alternative direction for staff or choose not to adopt the resolution, resulting in the City not establishing the Property Based Improvement District. Staff does not recommend this option.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

On September 28, 2022, the City Council approved the Resolution of Intention to Form the Morgan Hill Property and Business Improvement District; and authorized the City Manager to sign the ballot and other related documents for all City-owned properties in support of the formation of the Morgan Hill Property and Business Improvement District.

On March 2, 2022, the City Council approved and authorized the City Manager to execute and administer a consulting agreement with Civitas Advisors to form a Morgan Hill Downtown Property Business Improvement District. During that time, City Council also gave direction to the City Manager to sign the MHDPBID petition, indicating the City’s support of the PBID formation.

On January 19, 2022, the City Council directed staff to bring forward a consulting contract to implement a Property Based Improvement District (PBID) for Downtown.

In July 2017, the City Council adopted the Economic Blueprint which identified the reestablishment of a PBID as action item # 21, and reads as follows: "Downtown needs continual care and nurturing. Unlike shopping centers that have one or a limited number of owners, Downtowns are comprised of multiple property and business owners, making it complicated to care for the Downtown business district. Often, property owners or business associations need to come together to collectively promote and enhance the Downtown. The City should work with the Downtown property owners and Downtown

12 businesses to create a Business Improvement District (BID) to Support Downtown Improvements and Programming (Action #21)."
In 2006, the City of Morgan Hill worked with the Downtown property owners to establish a Property Based Improvement District (PBID) and entered into an agreement with the Morgan Hill Downtown Property Business Improvement District (MHDPBID) non-profit to govern the district. In 2011, the PBID was renewed for an additional five years, after receiving approval by the Downtown commercial property owners. The PBID assessments were used to fund capital improvements, pedestrian security and safety, economic development, marketing, and to support public policy and advocacy. In July 2013, the City Council terminated the PBID management agreement due to a lapse in MHDPBID’s tax-exempt corporation status. The incurred tax liability was eventually resolved. The prior non-profit will be dissolved and replaced with a new 501c6 owner's association formed to manage the MHPBID moving forward.

FISCAL AND RESOURCE IMPACT:

There is no immediate financial impact.

If the MHPBID formation is successful, then the City’s annual contribution would be $108,155.50 for the first year of operation, beginning in Fiscal Year 2023-2024. While the City will need to contribute to the PBID, the City may have the opportunity to save on current one-time expenses by having the PBID fund these types of project expenses in the future.

Following the MHPBID formation, the City will be required to enter into a contract with the Owners’ Association for the collection and distribution of the funds. The City will be paid two percent (2%) of the amount of assessment collected to cover its costs of collection and administration. Through this contract the City can stipulate the repayment of the commitments made by the Downtown property owners, including repayment of the costs associated with the creation of the MHPBID ($64,500).

CEQA (California Environmental Quality Act):

Not a Project
Pursuant to CEQA, organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment are therefore exempt activities.

2024-2028
October 18, 2022 Prepared pursuant to the Property and Business Improvement District Law of 1994, Streets and Highways Code section 36600 et seq.

MORGAN HILL

PROPERTY AND BUSINESS IMPROVEMENT DISTRICT
MANAGEMENT DISTRICT PLAN AND ENGINEER’S REPORT

Contents
I. Overview......................................................................................................................... 1 II. Impetus........................................................................................................................... 3 III. Background ..................................................................................................................... 4 IV. Boundaries....................................................................................................................... 5 V. Service Plan & Budget ..................................................................................................... 6 VI. Assessment Rate............................................................................................................ 10 VII. Governance ................................................................................................................... 11 VIII. Engineer’s Report.......................................................................................................... 12 Appendix 1 – Maximum Annual Assessment Rates........................................................................ 26 Appendix 2 – PBID Law................................................................................................................ 27 Appendix 3 – Map ......................................................................................................................... 39 Appendix 4 – Parcel Assessment Calculations................................................................................ 40 Appendix 5 – Total Estimated Maximum Cost Of Improvements, Maintenance, And Activities ... 52 Prepared by Civitas
www.civitasadvisors.com
(800)999-7781

October 18, 2022
Morgan Hill PBID Management District Plan

I. OVERVIEW
Developed by a growing coalition of property owners, the Morgan Hill Property and Business Improvement District (MHPBID) is a benefit assessment district whose main goal is to provide improvements, maintenance, and activities which constitute and convey a special benefit to assessed parcels. This approach has been used successfully in other cities throughout the country to provide special benefits to property owners, namely increased sales, attraction of new tenants, increased occupancies, and specifically increased property values. As required by state law, property owners have created this Management District Plan (Plan) to form the MHPBID.

Location: The MHPBID includes parcels north of Dunne, east of Del Monte, south of Main, and west of Butterfield, as shown on the map in Section IV.

Purpose: The purpose of the MHPBID is to provide improvements, maintenance, and activities which constitute and convey a special benefit to assessed parcels. The MHPBID will provide Clean and Safe programs, Capital Improvements and Art Installations, Marketing and Special Events, and related Management and Administration directly and only to assessed parcels within its boundaries.

Budget: The MHPBID annual assessment budget for the initial year of its five (5) year operation is anticipated to be $249,356.52. The annual assessment budget may be subject to an increase in assessment rates of no more than three percent (3%) per year.

The assessment funds will be supplemented by non-assessment funds (such as grants and event income), so that the total budget for the initial year is estimated at $284,639.96. The amount of non-assessment funds is the minimum amount necessary to pay for the general benefit provided by MHPBID programs. Further detail on the separation of special and general benefit is provided in Section VIII.

Cost: The assessment rate (cost to the parcel owner) is based on parcel type, parcel square footage, and in some cases, linear frontage. To determine a parcel’s assessment, the applicable square footage and linear frontage rates in the table below is applied to the parcels within the MHPBID. Frontage rates are applied to parcels fronting East 3rd St, after Monterey Rd. intersection, Monterey Rd., and Depot St. Frontage rates are applied based on a parcel’s frontage street. The initial annual assessment rates are shown below. Assessment rates may be subject to an increase of no more than three percent (3%) per year.

Parcel type Square Footage
Assessment rate (sq. ft.)
Linear Frontage
Assessment rate (ln. ft.)
Commercial $0.10 $5.00
Non-profit $0.04 $2.00
Formation: MHPBID formation requires submittal of petitions from property owners representing more than 50% of the total assessment. The “Right to Vote on Taxes Act” (also known as Proposition 218) requires a ballot vote in which more than 50%

October 18, 2022
Morgan Hill PBID Management District Plan

of the ballots received, weighted by assessment, be in support of the MHPBID formation.

Duration: The MHPBID will have a five (5) year-life beginning January 1, 2024, or as soon as possible thereafter, through December 31, 2028, or five (5) years after the start date.

Near the expiration of the MHPBID, the petition, ballot, and City Council hearing process must be repeated for the MHPBID to be renewed.

Management:The Downtown Morgan Hill Improvement District (DMHID) will serve as the Owners’ Association for the MHPBID. The Owners’ Association is charged with managing funds in accordance with this Plan and must submit an annual report to the City.

October 18, 2022
Morgan Hill PBID Management District Plan

II. IMPETUS
There are many benefits to the Downtown property owners to form the MHPBID, including:

1. Downtown Morgan Hill has become a Destination for Residents and Visitors alike.

While the City of Morgan Hill provides basic maintenance and repair in the Downtown district, the City’s aging landscape infrastructure, City parks, and new parking garage all demand more attention. Additionally, an increase in use and visitor trips cause even greater wear and tear; increased demand on public safety, and increased outdoor dining requires enhanced sidewalk cleaning and more consistent litter abatement.

2. Property Based Improvement Districts are good investments.

Property Business Improvement Districts ensure there are adequate services for growing districts and support activities that local municipalities cannot or are not able to fund. The Downtown Morgan Hill business district is maturing and has become a growing sales tax producing district within the City.

In order to protect and grow this investment, and to support continued sales tax growth within the Downtown district, parcel owners must be partners in the process that determines the level and frequency of services, and how new improvements and projects are implemented. The MHPBID will allow these owners to lead and shape future services and improvements through the MHPBID.

3. An Opportunity to Create a Private/Public Partnership with a Unified Voice for Downtown Morgan Hill.

Because parcel owners would be investing financial resources through the MHPBID, they will be looked upon as a strong partner in negotiations with the City and other public agencies. This partnership will have the ability to leverage the parcel owners’ investment with additional public and private investment in Downtown Morgan Hill.

4. An Opportunity to Establish Private Sector Management and Accountability.

Pursuant to an agreement with the City, a non-profit, private organization formed for the sole purpose of improving Downtown Morgan Hill will manage the services provided to the MHPBID. Annual MHPBID work plans and budgets are developed by a board composed of Downtown Morgan Hill property owners and stakeholders. Improvements and activities provided by the MHPBID are subject to performance standards, controls, and accountability.

October 18, 2022
Morgan Hill PBID Management District Plan

III. BACKGROUND
The International Downtown Association estimates that more than 1,500 Property and Business Improvement Districts (PBIDs) currently operate throughout the United States and Canada. PBIDs are a time-tested tool for property owners who wish to come together and obtain collective services which benefit their properties.

PBIDs provide supplemental services in addition to those provided by local government. They may also finance physical and capital improvements. These improvements and activities are concentrated within a distinct geographic area and are funded by a special parcel assessment. Services and improvements are only provided to those who pay the assessment.

Although funds are collected by the local government, they are then directed to a private nonprofit.

The nonprofit implements services and provides day-to-day oversight. The nonprofit is managed by a Board of Directors representing those who pay the assessment, to help ensure the services meet the needs of property owners and are responsive to changing conditions within the PBID.

PBIDs all over the globe have been proven to work by providing services that improve the overall viability of commercial districts, resulting in higher property values, lease rates, occupancy rates, and sales volumes.

The MHPBID will be established pursuant to a state law that took effect in January of 1995. The “Property and Business Improvement District Law of 1994,” which was signed into law by Governor Pete Wilson, ushered in a new generation of Property and Business Improvement Districts in California. Key provisions of the law include:
➢ Allows a wide variety of services which are tailored to meet specific needs of assessed properties in each individual PBID;
➢ Requires property owner input and support throughout the renewal process; ➢ Requires written support on both a petition and ballot from property owners paying 50% of proposed assessments;
➢ Allows for a designated, private nonprofit corporation to manage funds and implement programs, with oversight from property owners and the City; ➢ Requires limits for assessment rates to ensure that they do not exceed the amount owners are willing to pay; and
➢ Requires the PBID be renewed after a certain time period, making it accountable to property owners.

The “Property and Business Improvement Business District Law of 1994” is provided in Appendix 2 of this document.

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IV. BOUNDARIES
The service area includes approximately 92 properties with 58 property owners. The MHPBID boundary is illustrated by the map below. A larger map is available on request by calling (916)437- 4300 or (800)999-7781 or visit https://www.choosemorganhill.com/mhpbid.

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V. SERVICE PLAN & BUDGET
A. Establishment
Property and business owners in Downtown Morgan Hill have been concerned about the need for coordinated supplemental services in the area for several years. City services and efforts in the area have been welcomed, but limited resources have not allowed for a more comprehensive approach to managing the Downtown and commercial area.

A service plan to provide special benefits to assessed properties was developed using several methods.

A series of property owner meetings, a survey of property owners, and an analysis of current property conditions and needs were all conducted. The primary needs identified were: Clean and Safe programs, Capital Improvements and Art Installations, and Marketing and Special Events. The MHPBID can provide these services to the District and directly benefit the assessed parcels within its boundaries.

B. Improvements, Maintenance, and Activities
The MHPBID will provide supplemental improvements, maintenance, and activities that are above and beyond those provided by the City and other government agencies. None of the services to be provided by the MHPBID are provided by the City or other government agencies. The improvements, maintenance and activities will be provided directly and only to assessed parcels; they will not be provided to parcels that are not assessed. Each and every service is unique to the MHPBID, thus the benefits provided are particular and distinct to each assessed parcel.

1. Clean & Safe Programs
Safety and security services may include dedicated efforts to improve safety in Downtown. Programs may include installation of security cameras, additional Morgan Hill Police Department (MHPD) patrols, expanded MHPD Cadet Program services, or supplemental private security patrols. The patrol could serve as both a deterrent by creating a visible presence, and a respondent to incidences that occur. This program can offer concierge-type services to the Downtown visitors. The goal of the program is to increase usability of assessed parcels and address issues which discourage property owners, tenants, and customers from visiting assessed parcels, ultimately constituting and providing unique, special benefits to assessed parcels. These services may include, but are not limited to:
• Enhanced partnerships with local law enforcement to provide property and business owners direct communication with local law enforcement;
• A safety and patrol program to deter and report illegal street vending, illegal dumping, and street code violations. This program could address a myriad of quality-of-life problems including: public intoxication, panhandling, loitering, trespassing, and scavenging; • A safety program may be implemented to improve day and evening safety in the MHPBID by controlling vagrancy, property damage, encampment, and petty crimes; • Support crime prevention on assessed parcels by working closely with local law enforcement; and
• Respond and work to reduce nuisance behaviors which can deter tenants and customers on assessed parcels.

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The Clean & Safe program will make the MHPBID cleaner, more accessible, and more attractive to potential tenants and customers, and a safer place to do business through enhanced maintenance services. A regular schedule would be established for most of the maintenance services. Some maintenance services could be provided on an as-needed basis, while others could be provided on a regular basis. Maintenance services may include, but are not limited to:
• Installation of decorative lights;
• Regular litter removal services, including garbage, debris, and leaves; • Removal of bulky items and street sweeping services;
• On-demand graffiti removal services;
• Washing sidewalks adjacent to assessed properties on an as needed basis; and • Maintenance of landscaping, including the trimming and planting of trees and flowers.

2. Capital Improvements and Art Installations
The Capital Improvements and Art Installation program may use a multi-faceted approach to planning, design, and management of public spaces in the MHPBID. MHPBID funds could be leveraged to create a unique sense of place, which may include ongoing installation and maintenance of the twinkle lighting on street trees, rooftop lighting, wayfinding signage, seasonal banners and enhanced parking lot and street lighting, parking lot maintenance, and other public space improvements. Capital improvements will be funded to make the MHPBID more accessible, inviting, and useable. Small-scale improvements may include landscaping features, trash receptacles, and art installations and/or removal of concrete benches and raised planters; these funds will also be leveraged to seek additional money for large-scale projects. In order to pay for large-scale improvements, this portion of the budget may be held in reserve until such time as the balance is sufficient to pay for the improvement.

3. Marketing and Special Events
Marketing and Special Events would be provided to create an image of the MHPBID as a single destination with a set of unique opportunities. Further, the marketing program garners positive media coverage of the MHPBID and its services and attempts to improve the overall image of the MHPBID.

The program developed by the property owners will also include several tools to support the efforts of individual property owners and brokers to attract and retain tenants. The MHPBID will facilitate consistent and frequent communications with property owners and tenants. The marketing program may feature advertising, direct mail, special events and promotions designed to promote the assessed parcels, increase sales, and boost occupancy and lease rates.

4. Administration
The administration portion of the budget will be utilized for administrative costs associated with providing the activities and improvements for the MHPBID. These costs may include rent, telephone charges, legal fees, accounting fees, postage, administrative staff, insurance, and other general office expenses.

5. Contingency/Reserve
The budget also includes a prudent fiscal reserve. Changes in data, lower than anticipated collections, higher than expected program costs, and other issues may change the revenue and expenses. In order to buffer the MHPBID for unexpected changes in revenue, and/or allow the Owners’ Association to fund other overhead or renewal costs, the reserve is included as a budget item. Should contingency

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funds remain at the expiration of the MHPBID, and property owners wish to renew the MHPBID, the remaining funds may be used for the costs of renewal.

6. Collection Fee
The City of Morgan Hill will retain two percent (2%) of the assessment to cover its actual costs in collecting and administering the assessment.

C. Annual Assessment Budget
A projected five (5) year assessment budget for the MHPBID is provided below. The overall assessment budget shall remain consistent with this Plan. In the event of a legal challenge, assessment funds may be used to defend the MHPBID. The annual assessment budget is based on the following assumptions and guidelines:

1. The cost of providing improvements, maintenance, and activities may vary depending upon the market cost for those improvements, maintenance, and activities. Expenditures may require adjustment up or down to continue the intended level of improvements, maintenance, and activities.

2. The Owners’ Association and their Board shall have the authority to adjust budget allocations between the categories by no more than fifteen percent (15%) of the total budget per year.

Any change will be submitted by the Owners’ Association and submitted with the Annual Report.

3. Funds not spent in any given year may be rolled over to the next year.

4. The assessment rate may be subject to annual increases that will not exceed three percent (3%) per year. Increases will be determined by the Owner Associations’ Board and will vary each year. The projections in the chart in Section E below illustrate the maximum annual three percent (3%) increase for all budget items.

D. Service Budget
The total improvements, maintenance, and activities assessment budget for 2024 that would be funded by property assessments is $249,356.52. In addition to the assessment revenue, the programs will be supplemented by non-assessment funds. The total of non-assessment funds, and the determination of special and general benefit, is included in the Engineer’s Report. The total of assessment and nonassessment funds is provided in Appendix 5. Below is an illustration of the estimated total assessment budget allocations for each budget category for the initial year of the five (5) year life of the MHPBID, rounded to the nearest dollar. Non-assessment funds may be shifted between budget categories as needed by the Owners’ Association Board of Directors.……………………………………………

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E. Annual Maximum Budget
The budget below assumes the maximum annual increase of three percent (3%) is enacted and that there are no changes to the categorical budget allocations.

Year Clean & Safe
Capital
Improvements &
Art Installations
Marketing &
Special Events Administration Contingency/Reserve
Collection
Fee Total
2024 $149,613.91 $37,403.48 $24,935.65 $24,935.65 $7,480.70 $4,987.13 $249,356.52 2025 $154,102.33 $38,525.58 $25,683.72 $25,683.72 $7,705.12 $5,136.74 $256,837.21 2026 $158,725.40 $39,681.35 $26,454.23 $26,454.23 $7,936.27 $5,290.85 $264,542.33 2027 $163,487.16 $40,871.79 $27,247.86 $27,247.86 $8,174.36 $5,449.57 $272,478.60 2028 $168,391.78 $42,097.94 $28,065.30 $28,065.30 $8,419.59 $5,613.06 $280,652.97 Total $794,320.58 $198,580.14 $132,386.76 $132,386.76 $39,716.04 $26,477.35 $1,323,867.63 Clean & Safe,
$149,613.91, 60%
Capital Improvements
and Art Installations,
$37,403.48, 15%
Marketing and Special
Events, $24,935.65, 10%
Administration,
$24,935.65, 10%
Contingency/Reserve,
$7,480.70, 3%
Collection Fee,
$4,987.13, 2%
Total Assessment Budget: $249,356.52

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VI. ASSESSMENT RATE
A. Assessment Formula
Individual assessed parcels shall be assessed a rate according to each assessed parcel’s proportionate special benefit derived from the services provided to each assessed parcel, as shown in the table below.

Parcel type Square Footage
Assessment rate (sq. ft.)
Linear Frontage
Assessment rate (ln. ft.)
Commercial $0.10 $5.00
Non-profit $0.04 $2.00
B. Changes in Zoning, Ownership, Building Square Footage, or Parcel Size If the zoning, ownership, building square footage, or parcel size within the MHPBID boundary changes during the term of the MHPBID, the assessment amount may be modified according to the assessment methodology detailed in this Plan that is applicable to the parcel. These changes may be a result of land adjustments (including but not limited to lot splits, consolidations, right away setbacks, etc.), new construction, new ownership, or changes in zoning.

C. Assessment Ballot and Public Notice
During the hearing process, an Assessment Ballot and a Public Notice will be sent to owners of each parcel in the MHPBID. The Assessment Ballot provides an estimated assessment. The final individual assessment for any particular parcel may change, up or down, if the parcel square footage or type differ from those used to calculate the amount shown on the Assessment Ballot. A list of parcels to be included in the MHPBID is provided in Appendix 1.

D. Time and Manner for Collecting Assessments
As provided by State Law, the MHPBID assessment will appear as a separate line item on annual property tax bills prepared by the County of Santa Clara (County). Parcels which do not receive property tax bills will be invoiced by the County. Property tax bills are generally distributed in the fall, and payment is expected by lump sum or installment. The County of Santa Clara shall distribute funds collected to the City of Morgan Hill which shall forward them to the MHPBID. Existing laws for enforcement and appeal of property taxes, including penalties and interest, apply to the MHPBID assessments.

E. Bonds
Bonds shall not be issued.

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VII. GOVERNANCE
A. Owners’ Association
The MHPBID shall be governed by Downtown Morgan Hill Improvement District (DMHID) Board, with oversight from the Morgan Hill City Council. DMHID, shall serve as the Owners’ Association described in the Streets and Highways Code §36612. The Board of Directors of the DMHID and its staff are charged with the day-to-day operations of the MHPBID.

A majority of the Board of Directors of the DMHID must be parcel owners paying the assessment.

In addition, the Board of Directors must represent a variety of interests within the MHPBID and respond to the needs of all properties within the MHPBID.

B. Brown Act & Public Records Act Compliance
An Owners’ Association is a private entity and may not be considered a public entity for any purpose, nor may its board members or staff be considered to be public officials for any purpose. The Owners’ Association is, however, subject to government regulations relating to transparency, namely the Ralph M. Brown Act (“Brown Act”) and the California Public Records Act. These regulations are designed to promote public accountability. The Owners’ Association must act as a legislative body under the Brown Act (Government Code §54950 et seq.). Thus, meetings of the Owners’ Association Board of Directors and certain committees must be held in compliance with the public notice and other requirements of the Brown Act. The Owners’ Association is also subject to the record keeping and disclosure requirements of the California Public Records Act.

C. Annual Report
The Owners’ Association shall present an annual report at the end of each year of operation to the City Council pursuant to Streets and Highways Code §36650 (see Appendix 2). The annual report is a prospective report for the upcoming year and must include:

1. Any proposed changes in the boundaries of the MHPBID or in any benefit zones or classification of property within the district;

2. The improvements, maintenance, and activities to be provided for that fiscal year;

3. The estimated cost of providing the improvements, maintenance, and activities to be provided for that fiscal year;

4. The method and basis of levying the assessment in sufficient detail to allow each real property owner to estimate the amount of the assessment to be levied against his or her property for that fiscal year;

5. The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal year; and

6. The estimated amount of any contributions to be made from sources other than assessments levied pursuant to this Plan.

7. A statement confirming that all required annual federal and state filings to ensure corporate good standing and to maintain tax-exempt status are completed and up-to-date.

8. A copy of the previous year’s accepted federal and state tax filings.

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VIII. ENGINEER’S REPORT
The MHPBID’s parcel assessments will be imposed in accordance with the provisions of Article XIII D of the California Constitution. Article XIII D provides that “only special benefits are assessable,”1 and requires the City to “separate the general benefits from the special benefits conferred on a parcel.”2 Special benefits are a “particular and distinct benefit over and above general benefits conferred on real property located in the district or to the public-at-large.”3 Conversely, a general benefit is “conferred on real property located in the district or to the public-at-large.”4 Assessment law also mandates that “no assessment shall be imposed on any parcel which exceeds the reasonable cost of the proportional special benefit conferred on that parcel.”5
The Engineer determined the total cost of the improvements and activities, quantified the general benefit accruing to the public-at-large and non-assessed parcels adjacent to and within the MHPBID, and separated that amount from the special benefit accruing to the assessed parcels. Then, the Engineer determined the proportional special benefit derived by each parcel and allocated the special benefit value of the improvements, maintenance, and activities accordingly. The Engineer’s determinations and detailed calculations are summarized in this report.

A. Separation of General and Special Benefits
Each of the improvements and activities, and the associated costs and assessments within the MHPBID, were reviewed, identified, and allocated based on special and general benefits pursuant to Article XIII D of the California Constitution. The assessment has been apportioned based on the proportional special benefits conferred to the assessed parcels located within the MHPBID boundaries as determined below.

1. General Benefits
Unlike special benefits, which are conferred directly and only upon assessed parcels, a general benefit is conferred on the general public or non-assessed parcels. Existing City and other public services, which are provided to every person and parcel, everywhere within the City, are an example of a general benefit. Although the MHPBID’s boundaries have been narrowly drawn, programs have been carefully designed to provide special benefits, and activities and improvements will only be provided directly to assessed parcels, it is acknowledged that there will be general benefits as a result of the MHPBID’s activities and improvements.

The California Constitution mandates that “only special benefits are assessable, and an agency shall separate the general benefits from the special benefits.”6 “Generally, this separation and quantification of general and special benefits must be accomplished by apportioning the cost of a service or improvement between the two and assessing property owners only for the portion of the cost representing special benefits.”7 The first step that must be undertaken to separate general and special benefits provided by the MHPBID’s activities and improvements is to identify and quantify the general benefits. There are two bodies who can receive general benefits: the public-at-large within the MHPBID, and non-assessed parcels within and surrounding the MHPBID. 1 Cal. Const., art. XIII D, §4(a)
2 Cal. Const., art. XIII D, §4(a)
3 Id, §2(i)
4 Cal Const., art XIII D §2(i)
5 Cal. Const., art. XIII D, §4(a)
6 Cal. Const., art XIII D §4(a)
7 Golden Hill Neighborhood Association v. City of San Diego (2011) 199 Cal.App.4th 416

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a. General Benefit to the Public-at-Large
Although the activities and improvements are narrowly designed and carefully implemented to specially benefit the assessed parcels, and only provided directly to assessed parcels, they will generate a general benefit to the public-at-large within the MHPBID. State law indicates that “Activities undertaken for the purpose of conferring special benefits upon property to be assessed inherently produce incidental or collateral effects that benefit property or persons not assessed.”8 However, “the mere fact that special benefits produce incidental or collateral effects that benefit property or persons not assessed does not convert any portion of those special benefits or their incidental or collateral effects into general benefits.”9 Further, “the value of any incidental or collateral effects that arise from the improvements, maintenance or activities of a property-based district and that benefit property or persons not assessed shall not be deducted from the entirety of the cost of any special benefit or affect the proportionate special benefit derived by each identified parcel.”10 Thus, although there may be some incidental benefit to persons engaged in business on the assessed parcels, that incidental benefit is not considered general benefit because it is inherently produced by activities and improvements that provide special benefits to the assessed parcels. There is, however, a general benefit to persons not engaged in business on the assessed parcels.

Intercept surveys conducted in similar districts have found that approximately 97.3% of pedestrian traffic within PBID boundaries is engaged in business on assessed parcels, while the remaining approximately 2.7% is simply passing through and not engaging in business on the assessed parcels11.

The 2.7% of traffic passing through does not have any connection to the assessed parcels, and therefore does not represent a special benefit to the assessed parcels. The 2.7% will, however, receive a derivative and indirect general benefit as a result of the activities and improvements being provided in the MHPBID. Therefore, it is estimated that 2.7% of the benefit created by the MHPBID’s services is general benefit provided to the public-at-large. To ensure that the assessment dollars do not fund general benefits to the public-at-large, that portion of the cost of activities and improvements will be paid for with funds not obtained through assessments. Using the 2.7% figure, based on the initial year activity and improvement budget, the value of this general benefit to the public-at-large is $7,685.28 ($284,639.96*0.027).
b. General Benefit to Non-Assessed Parcels
Although they are only provided directly to the assessed parcels, the MHPBID’s activities and improvements may also confer general benefits upon non-assessed parcels within and surrounding the MHPBID. One study examining property values in PBID areas found “no evidence of spill-over impacts (either good or bad) on commercial properties located just outside the PBID’s boundaries;”12 however, the California Court of Appeals has stated that “services specifically intended for assessed parcels concomitantly confer collateral general benefits to surrounding properties.”13 It is reasonable to conclude that activities and improvements within the MHPBID will have an incidental impact on non-assessed parcels surrounding or within the MHPBID boundaries. Although the legislature has indicated that “the value of any incidental or collateral effects that arise from the improvements, 8 Streets and Highways Code section 36601(h)(2)
9 Ibid
10 Streets and Highways Code Section 36622(k)(2)
11 Surveys conducted in: North Park, San Diego (January 2015); Mack Road, Sacramento (July 2014); and Sunrise MarketPlace, Citrus Heights (December 2013)
12 Furman Center for Real Estate & Urban Policy; The Impact of Business Improvement Districts on Property Values: Evidence from New York City (2007) p. 4
13 Beutz v. Riverside (2010) 184 Cal.App.4th 1516

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maintenance, or activities of a property-based district and that benefit property or persons not assessed shall not be deducted from the entirety of the cost of any special benefit,”14 the California Court of Appeals has noted that “the characterization of a benefit may depend on whether the parcel receives a direct advantage from the improvement…or receives an indirect, derivative advantage resulting from the overall public benefits of the improvement.”15 Those derivative and indirect impacts are considered general benefits and will be quantified and separated.

In this Engineer’s opinion, because activities and improvements are provided only within the MHPBID and on its perimeter, parcels separated from the MHPBID by either at least one intervening parcel or an impassable physical barrier such as a wall, freeway, or ditch will not receive spill over benefits. Parcels separated from the MHPBID will not benefit because they are physically removed from the actual location of activities and improvements provided, and do not face serviced parcels.

Therefore, this analysis considers non-assessed parcels within the MHPBID’s boundaries and surrounding parcels that are immediately adjacent to and accessible from the MHPBID’s boundaries.

The total MHPBID activity and improvement budget for the first year is $284,639.96. After reducing the activity and improvement budget by the general benefit to the public-at-large ($7,685.28), the remaining benefit to parcels is $276,954.68. This benefit has been distributed to both assessed and non-assessed parcels using the following methodology. The general benefit to the public-at-large has been proportionally allocated to the MHPBID’s activity and improvement categories as shown in the following table.

Category Benefit to Parcels Benefit to
Public-at-Large Total
Clean & Safe $166,789.92 $4,628.29 $171,418.21
Capital Improvements & Art
Installations $40,823.24 $1,132.81 $41,956.05
Marketing & Special Events $27,798.32 $771.38 $28,569.70 Administration $27,695.47 $768.53 $28,464.00
Contingency/Reserve $8,308.64 $230.56 $8,539.20
Collection Fee $5,539.09 $153.71 $5,692.80
Total $276,954.68 $7,685.28 $284,639.96
To determine the general benefit to parcels, the Engineer assigned each parcel group a benefit factor, determined the appropriate parcel characteristic to use in the calculation, multiplied the benefit factor by the benefit characteristic to determine the benefit units attributable to each parcel group, and apportioned the remaining service cost (service cost minus general benefit to the public) in accordance with the benefit units derived by each parcel group.
14 Streets and Highways Code section 36622(k)(2)
15 Tiburon v. Bonander (2009) 180 Cal.App.4th 1057, 1077

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i. Benefit Factors
All parcels within and adjacent to the MHPBID have been assigned a benefit factor to mathematically represent the proportional special and general benefit and quantify the value of each. The determination of benefit factors for each type of activity and improvement follows.

Improvements
The improvements to be provided by the MHPBID provide two types of special benefits:
• Improvement – The primary special benefit provided by the MHPBID’s improvements is the improvements themselves, which are available to tenants and customers of assessed parcels. • Proximity – The MHPBID’s improvements also provide the special benefit of being in proximity to a parcel that is benefitting from an improvement, as parcels will enjoy the spillover benefits of neighboring parcels utilizing the improvements.

The majority of the benefit is the improvements themselves; proximity is a lesser benefit. It is this Engineer’s estimation that eighty-five percent (85%) of the special benefit from the MHPBID’s improvements is the improvement, while the proximity special benefit accounts for fifteen percent (15%) of the special benefit. Assessed parcels will receive both benefits; non-assessed parcels within and adjacent to the MHPBID will not be directly improved, and therefore only receive the general benefit of proximity.

Tangible Activities
The tangible activities (those that are physically provided via a person or people working throughout the district) to be provided by the MHPBID generate three types of special benefits:
• Service – The primary special benefit provided by the MHPBID’s physical activities is the actual service. That is, the actual cleanliness and safety created by security and maintenance clean and safe personnel.
• Presence – The MHPBID’s physical activities also provide the special benefit of an individual’s presence on the assessed parcel as the activities are provided, which can have a deterrent effect and creates a positive impression that the area is well-maintained and safe. The “Disneyland effect” is the benefit the parcels receive from the observation that parcels are being maintained. There are studies which link the perception of cleanliness to a perception of increased security.
• Proximity – The MHPBID’s physical activities also provide the special benefit of being in proximity to a cleaner, safer parcel. Neighboring parcels enjoy the spillover benefits of being adjacent to increased safety and cleanliness.

The majority of the benefit received by the parcels is the results of the MHPBID’s services; onsite presence and proximity are lesser benefits. It is this Engineer’s estimation that seventy-five percent (75%) of the special benefit from the MHPBID’s physical activities is the service, while the presence and proximity benefits each account for twelve and one-half percent (12.5% presence, 12.5% proximity) of the special benefit. Assessed parcels will receive all three benefits; non-assessed parcels within and adjacent to the MHPBID will not be directly serviced and therefore only receive the general benefit of proximity.

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Intangible Activities
Some of the MHPBID’s activities, such as marketing, are distinct in that they are not provided to a targeted area within the MHPBID, rather they are provided via internet, radio, and other forms of media and targeted at an audience outside the MHPBID in an effort to bring the audience into the MHPBID. These activities provide two types of special benefits:

Direct Exposure – The primary special benefit provided by the MHPBID’s intangible activities is exposure. The intangible activities increase awareness of the MHPBID as a commercial and business destination and lead to increased patronage.

Incidental Exposure – The MHPBID’s intangible activities will also have a secondary special benefit of incidental exposure, such as word-of-mouth exposure, that results from the direct exposure and increases awareness of the MHPBID as a commercial and business destination.

The majority of the benefit from these activities is the direct exposure; the incidental exposure is a lesser benefit. It is this Engineer’s estimation that ninety percent (90%) of the special benefit from the intangible activities is direct exposure, while ten percent (10%) is incidental exposure. Assessed parcels will receive both as special benefits; non-assessed parcels within and adjacent to the MHPBID will not be directly marketed and therefore only receive the general benefit of incidental exposure.

Factors Determined
Based on the foregoing analysis, all assessed parcels within the MHPBID specially benefit from the MHPBID’s activities and improvements, and have been assigned a benefit factor of 1.0. Parcels that are not assessed have been assigned benefit factors based on the portion of the benefit they will receive, as described above. The non-assessed parcels will benefit from fifteen percent (15%) of the improvements, twelve and one-half percent (12.5%) of the tangible activities, and ten percent (10%) of the intangible activities; therefore they have been assigned benefit factors of 0.15, 0.125, and 0.10 respectively.
ii. Non-Assessed Benefit Characteristics
There are two types of parcels that are not assessed; those within the MHPBID and those immediately adjacent to and accessible from the MHPBID. Because they generally benefit in a differing manner, distinct parcel characteristics are used to quantify the general benefit to each type. • Inside – Non-assessed parcels inside of the MHPBID are surrounded by parcels that are assessed and receiving the full special benefits; they will, therefore, receive the general benefit of proximity. These parcels are impacted on more than one side by the MHPBID’s activities and improvements and activities and improvements are provided all around them. Because these parcels are surrounded by specially benefitted parcels, it is appropriate that parcel square footage be used to measure the general benefit they receive. • Adjacent – Adjacent parcels are those that are immediately adjacent to or directly across the street from specially benefitted parcels, and accessible from specially benefitted parcels. These parcels generally benefit differently than those inside the MHPBID, because these parcels are adjacent to, rather than surrounded by, specially benefitted parcels. Square footage is not an appropriate measure of benefit to these parcels. Because the parcels are not surrounded by serviced parcels, a long, shallow parcel with the same square footage as a deep, narrow parcel will receive a different level of general benefit. Likewise, two parcels with the same depth but a different width adjacent to serviced parcels will benefit differently. To account for this

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difference, it is appropriate that parcel linear frontage be used to measure the general benefit the adjacent parcels receive. The linear footage is the length of parcels fronting public streets.

The amount listed for “assessed linear feet” is the value for all assessed parcels within the MHPBID and the amount listed for “non-assessed linear feet” is the value for all non-assessed parcels adjacent to the district boundary.
iii. Calculations
To quantify and separate the general benefit to non-assessed parcels, the following calculations were undertaken for each budget category.

1. The total service budget for each category was determined and the amount of general benefit to the public-at-large was subtracted from the category budget.

2. The benefit factor applicable to each activity or improvement was multiplied by the parcel square footage or linear frontage of assessed and non-assessed parcels, to determine the number of benefit units received by each parcel group.

3. The benefit units for all parcel groups were summed, and the percentage of benefit units attributable to each parcel group was calculated.

4. The total remaining activity and improvement budget, less the amount already determined to be general benefit to the public-at-large, was allocated to general and special benefit categories for each parcel group using the calculated benefit percent and applicable benefit characteristic methodology.

5. The special and general benefit resulting from the administration and contingency / reserve portions of the budget were determined based on the proportional allocation of benefits derived from activities and improvements.

Clean & Safe
The Clean & Safe budget, minus the amount of general benefit to the public-at-large, is $166,789.92.

The calculations below determine the amount of general benefit to non-assessed parcels within the MHPBID.

Parcel Type
Square
Footage
Benefit
Factor Benefit Units
Benefit
Percent
Remaining
Budget
Assessed 2,188,802 X1.000 =2,188,802 92.595% X$166,789.92 =$154,438.35 NonAssessed 1,400,437 X0.125 =175,054.63 7.405% X$166,789.92 =$12,351.57 The Clean & Safe budget, minus the amount of general benefit to the public at-large and non-assessed parcels within the MHPBID, is $154,438.35. The calculations below determine the amount of general benefit to parcels adjacent to the MHPBID.

Parcel Type
Linear
Frontage
Benefit
Factor Benefit Units
Benefit
Percent
Remaining
Budget
Inside 15,564 1.000 =15,564.00 96.876% X$154,438.35 =$149,613.91 Adjacent 4,015 0.125 =501.88 3.124% X$154,438.35 =$4,824.44 Therefore, the allocation of the clean & safe budget is as follows: