Morgan Hill City Council
November 16, 2022

Regular Meeting Agenda
City Council
Rich Constantine - Mayor
Gino Borgioli - Mayor Pro Tem
John McKay - Council Member
Yvonne Martinez Beltran - Council Member
Rene Spring - Council Member
Wednesday, November 16, 2022 7:00 PM
Hybrid Meeting
17555 Peak Avenue, Morgan Hill, CA 95037 and Virtual (Link to join the meeting can be found below)

TELECONFERENCE
Mayor Rich Constantine will be participating in the City Council meeting via teleconference as follows:

The Westin
3838 Wyllie Road
Princeville, HI 96722
The public may attend the City Council meeting and will have the opportunity for public comment from the Princeville, HI teleconference location.

Morgan Hill City Council meetings will be held as “hybrid” meetings with the option to attend by teleconference/video conference or in-person. To maximize public safety while still maintaining transparency and public access, members of the public can choose to participate remotely or attend in-person. Information on how the public may observe and participate in the meeting is located below. Santa Clara County strongly encourages masks and social distancing if attending in person.

MEETING GUIDELINES AND PUBLIC COMMENT
City Council meetings will be live-streamed on Channel 17, on the City’s website, and on the City’s Facebook page. Those members of the community who would like to participate in the meetings remotely may do so by joining the virtual meeting at:

November 16, 2022
2 https://bit.ly/MHCityCouncilMeeting or by calling (669) 900-9128, then enter the webinar id: 873 3200 8380#. Public comment may be provided in the following ways:
 Provide public comment in-person
 Join the virtual City Council meeting via the link above, when public comment is opened, raise your virtual hand and be called upon to speak for up to 3 minutes (YOU MUST BE RUNNING THE MOST CURRENT VERSION OF ZOOM TO BE

UNMUTED)
 Join the virtual meeting by calling the number above, dial *9 to raise your hand, and be called upon to speak for up to 3 minutes
 Send public comments in writing to the City Clerk at
[email protected]

CALL TO ORDER

ROLL CALL ATTENDANCE

DECLARATION OF POSTING AGENDA

SILENT INVOCATION

PLEDGE OF ALLEGIANCE

PRESENTATIONS
YAC Presentation- Asset #34- Cultural Competence

RECOGNITIONS
Recognizing the Edward Boss Prado Foundation for their support of the Magical Bridge Playground and Aquatics Center Summer Access Passes for low-income youth

PROCLAMATIONS
Proclaiming the month of November as Native American Heritage Month

CITY COUNCIL REPORTS
Council Member McKay

November 16, 2022
3 CITY MANAGER'S REPORT

CITY ATTORNEY'S REPORT

OTHER REPORTS

PUBLIC COMMENT
This opportunity for public comment is for items that are not on the agenda. If you would like to make comments on an item that is on the agenda, please wait until we get to that item to offer your comments. Members of the public are entitled to address the City Council concerning any item within the Morgan Hill City Council’s subject matter jurisdiction. Public comments are limited to no more than three minutes. Except for certain specific exceptions, the City Council is prohibited from discussing or taking action on any item not appearing on the posted agenda. Public comment is intended for comments. Questions posed during public comment are not generally answered. If you have questions, please send them to the City Clerk at
[email protected] to receive a response. (See additional noticing at the end of this agenda)

ADOPTION OF AGENDA

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

1. ACCEPT THE MORGAN HILL INCLUSIVE PLAYGROUND/MAGICAL BRIDGE

PROJECT
Recommendation:

1. Accept as complete the Morgan Hill Inclusive Playground/Magical Bridge Project;

2. Authorize the City Engineer to sign the Notice of Completion; and

3. Direct the City Clerk to file said Notice of Completion with the County Recorder's Office.

2. ADOPT ORDINANCE 2338, NEW SERIES, APPROVING A ZONING MAP

November 16, 2022
4 AMENDMENT FOR EXPANSION OF A MIXED-USE FLEX ZONE AND

PLANNED DEVELOPMENT COMBINING DISTRICT AND MASTER PLAN
FOR A 66.49-ACRE AREA LOCATED AT THE NORTHEAST QUADRANT OF COCHRANE ROAD AND HIGHWAY 101 (APNs 728-37- 001, -002, -004, -005 & -007)
Recommendation:

Waive the reading, adopt Ordinance No. 2338, 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. AMEND CONFLICT OF INTEREST CODE REPORTING CATEGORIES Recommendation:

Adopt resolution amending the list of positions subject to the City’s Conflict of Interest Code.

4. APPROVE FIRST AMENDMENT TO THE BATTALION ONE FIRE

PROTECTION MAINTENANCE SERVICE AGREEMENT
Recommendation:

1. Approve the first amendment to the maintenance service agreement with Battalion One Fire Protection, Inc. for an additional year of services for $17,969, for a total contract amount of $60,179; and

2. Authorize the City Manager to execute and administer two additional oneyear extensions of the maintenance service agreement.

5. APPROVE ACQUISITION OF SEWER EASEMENT (PATEL) APN 841-03-063

FOR THE SEWER RELIEF TRUNK LINE PROJECT
Recommendation:

1. Adopt resolution approving the purchase of a sewer easement (1,984 square feet), APN 841-03-063 for $27,000 plus escrow and closing costs from Jitendra and Nayana Patel for the Sewer Relief Trunk Line Project; and

2. Authorize the City Manager to execute all documents and make minor modifications as necessary in order to consummate the transaction.

6. APPROVE SECOND AMENDMENT TO THE JOINT VENTURE SILICON

VALLEY CONSULTANT AGREEMENT FOR THE COUNTYWIDE SOLID

WASTE SERVICES PROGRAM
Recommendation:

1. Approve the Second Amendment to the Consultant Agreement with Joint Venture Silicon Valley to add Special Projects for $49,324 for a revised

November 16, 2022
5 total contract amount of $399,324; and

2. Authorize the City Manager to execute and administer the Second Amendment to the Consultant Agreement with Joint Venture Silicon Valley.

7. APPROVE AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT WITH CSG CONSULTANTS, INC. TO PROVIDE PLAN CHECK/REVIEW

ASSISTANCE
Recommendation:

Approve the First Amendment to the professional services agreement with CSG Consultants, Inc. for Building Department review services for a total not-toexceed amount of $260,000.

8. APPROVE FRANCHISE AGREEMENT WITH RECOLOGY SOUTH VALLEY

FOR SOLID WASTE MANAGEMENT SERVICES
Recommendation:

Approve franchise agreement with Recology South Valley and authorize the City Manager to execute the agreement subject to the review and approval of the City Attorney.

9. APPROVE THE NOVEMBER 2, 2022 CITY COUNCIL MEETING MINUTES Recommendation:

Approve minutes.

10. AWARD LANDSCAPE MAINTENANCE SERVICE AGREEMENT FOR CITY

PARKS, MEDIANS, AND DOWNTOWN
Recommendation:

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.

11. RECEIVE REPORT REGARDING UPCOMING 2023 COMMISSION

VACANCIES PER MADDY ACT
Recommendation:

Receive report.

November 16, 2022
6 PUBLIC HEARINGS

12. ADOPT RESOLUTION OF FORMATION TO FORM THE MORGAN HILL

PROPERTY AND BUSINESS IMPROVEMENT DISTRICT (MHPBID)
Recommendation:

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.

13. APPEAL (AAE2022-0007) OF PLANNING COMMISSION APPROVAL OF VESTING TENTATIVE MAP (SD2021-0004), DESIGN PERMIT (SR2021-0014),

AND A DETERMINATION THAT THE PROJECT IS EXEMPT FROM
CEQA, FOR A 93-UNIT RESIDENTIAL CONDOMINIUM DEVELOPMENT PROPOSED BY DENOVA HOMES. THE PROPERTY, IDENTIFIED BY
ASSESSOR PARCEL NUMBERS 726-42-001 AND -002 ARE LOCATED

WEST OF THE MONTEREY ROAD/BURNETT AVENUE INTERSECTION
(FAMILY RV SITE)
Recommendation:

1. Grant a hearing de novo;

2. Open/close public hearing; and

3. Adopt resolution denying the appeal and reaffirming the decision of the Planning Commission to approve the project subject to Conditions of Approval.

14. APPROVE A ZONING AMENDMENT TO ADD THE PLANNED

DEVELOPMENT COMBINING DISTRICT AND APPROVE A DESIGN PERMIT AMENDMENT TO ALLOW FOR AN ADDITIONAL LEVEL (5TH FLOOR) FOR THE APPROVED GRANADA HOTEL ON A 1.09-ACRE SITE (APN726-14- 047)(ZA2022- 0004/AAE2022-0004/EA2022-0010 MONTEREY - GRANADA HOTEL)
Recommendation:

1. Open/Close Public Hearing;

2. Waive the first and second reading of the proposed ordinance;

3. Introduce a Zoning Amendment Ordinance approving a Planned Development Combining District; and

4. Adopt resolution approving a Design Permit Amendment for the addition of a 5th floor with minor facade modifications.

November 16, 2022
7 OTHER BUSINESS

15. INTRODUCE AN ORDINANCE REQUIRING ELECTRIC VEHICLE CHARGING

INFRASTRUCTURE IN NEW CONSTRUCTION
Recommendation:

1. Waive the first and second reading of the ordinance; and

2. Introduce the ordinance.

FUTURE COUNCIL INITIATED AGENDA ITEMS
Note: in accordance with Government Code Section 54954.2(a), there shall be no discussion, debate and/or action taken on any request other than providing direction to staff to place the matter of business on a future agenda.

ADJOURNMENT

November 16, 2022
8 NOTICE
Any documents produced by the City and distributed to the majority of the City Council less than 72 hours prior to an open meeting, will be made available for public inspection at the City Clerk’s Counter at City Hall located at 17575 Peak Avenue, Morgan Hill, CA, 95037 and at the Morgan Hill Public Library located at 660 West Main Avenue, Morgan Hill, California, 95037 during normal business hours. (Pursuant to Government Code 54957.5)

PUBLIC COMMENT
Members of the Public are entitled to directly address the City Council concerning any item that is described in the notice of this meeting, before or during consideration of that item. If you wish to address the Council on any issue that is on this agenda, please complete a speaker request card located in the foyer of the Council Chambers and deliver it to the Minutes Clerk prior to discussion of the item. You are not required to give your name on the speaker card in order to speak to the Council, but it is very helpful.

When you are called, proceed to the podium and the Mayor will recognize you. If you wish to address the City Council on any other item of interest to the public, you may do so during the public comment portion of the meeting following the same procedure described above. Please limit your comments to three (3) minutes or less.

Please submit written correspondence to the Minutes Clerk, who will distribute correspondence to the City Council.

Persons interested in proposing an item for the City Council agenda should contact a member of the City Council who may plan an item on the agenda for a future City Council meeting. Should your comments require Council action, your request may be placed on the next appropriate agenda. Council discussion or action may not be taken until your item appears on an agenda. This procedure is in compliance with the California Public Meeting Law (Brown Act) Government Code §54950.

City Council Policies and Procedures (CP 03-01) outlines the procedure for the conduct of public hearings. Notice is given, pursuant to Government Code Section 65009, that any challenge of Public Hearing Agenda items in court, may be limited to raising only those issues raised by you or on your behalf at the Public Hearing described in this notice, or in written correspondence delivered to the City Council at, or prior to the Public Hearing on these matters.

The time within which judicial review must be sought of the action by the City Council, which acted upon any matter appearing on this agenda is governed by the provisions of Section 1094.6 of the California Code of Civil Procedure.

For a copy of City Council Policies and Procedures CP 97-01, please contact the City Clerk’s office (408) 779-7259, (408) 779-3117 (fax) or by email [email protected].

AMERICANS WITH DISABILITIES ACT (ADA)
In compliance with the Americans with Disabilities Act, if you are a disabled person and you need a disability-related modification or accommodation to participate in this meeting, please contact the City Clerk's Office at (408)779-7259, (408)779-3117 (fax) or by email [email protected]. Requests must be made as early as possible and at least two-full business days before the start of the meeting.

November 16, 2022
9

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

Yat Cho, Senior Project Manager
APPROVED BY: City Manager

ACCEPT THE MORGAN HILL INCLUSIVE PLAYGROUND/MAGICAL

BRIDGE PROJECT

RECOMMENDATION(S)

1. Accept as complete the Morgan Hill Inclusive Playground/Magical Bridge Project;

2. Authorize the City Engineer to sign the Notice of Completion; and

3. Direct the City Clerk to file said Notice of Completion with the County Recorder's Office.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Maintaining and Enhancing Infrastructure
Supporting our Youth, Seniors, and Entire Community
2022-2023 Strategic Priorities
Economic Development
Guiding Documents
Bikeways, Trails, and Recreation Master Plan
REPORT NARRATIVE:

Since early 2015, the City and numerous volunteers have partnered to construct an inclusive playground in Morgan Hill. An "inclusive playground" not only provides a playground for those with mobility issues, it further aims to encourage and enable all children to engage with one another while using the playground.

Staff and volunteers under the Morgan Hill Community Foundation (later known as the Morgan Hill Inclusive Playground committee) worked with Verde Design to develop a conceptual plan in late 2015. The City eventually partnered with the Magical Bridge Foundation, who were hired to design the park, support grant writing and fundraise for the project. While the fundraising portion of this partnership was not as successful, the City did receive significant grant funding and the Magical Bridge Foundation provided the project's plans and specifications for bidding.

1 On March 18, 2020, City Council awarded this project to CRW Industries, Inc. in the amount of $5,562,090 with a contingency of $556,209. The scope of work for this project included the demolition of the existing community park playground area and the construction of a new expanded playground (Attachment 1 - Vicinity Map). Additional work included but was not limited to the following: earthwork, material export, grading, site drainage, parking lot, playground area, paving, fencing, signage, site furnishings, irrigation, planting, electrical, signage, striping, and a prefabricated restroom.

Work began slowly as the COVID-19 pandemic was at its peak during the start of work.

During the pandemic, CRW Industries worked with minimal sized crews to keep the project moving with limited resources for materials and labor. During the first nine months of construction, the undergrounding utility, earthwork, grading, and electrical work were completed. No significant above ground work began until Spring 2021 as there were long material delays in securing play equipment(s) and restroom. One significant material delay was a warehouse fire that caused the destruction of the slides.

It took nearly six months for the prefabrication, delivery and installation of these slides.

This delay also caused other delays to the fine grading of the slide mound as this is a critical part of the project. Once all the equipment was delivered and with the pandemic easing, CRW Industries, Inc. and their subcontractor ultimately completed the project for a grand opening on June 4, 2022. Additional miscellaneous items and closeout items were necessary post grand opening and the project was substantially completed on October 31, 2022.

The final construction contract with CRW Industries, Inc. is $6,049,822.46, which included ten change orders for a contingency amount of $487,732.46 (Attachment 2 - Project Closeout). Staff recommends accepting this project as it is completed in accordance with the plans and specifications and directing the City Clerk to file the Notice of Completion (Attachment 3 - Notice of Completion).

COMMUNITY ENGAGEMENT:

Inform
This project was brought forward by community members and is being driven by community members. The design process was developed and coordinated by the Morgan Hill Inclusive Playground Committee volunteers. This committee has continued to be involved with the design process and help drive the project to the goal of completion.

Prior to and during construction, staff informed the community regarding the progress of this project using media, social media, and the City’s website.

ALTERNATIVE ACTIONS:

Accepting the project in accordance with the contract documents is a required process and enables the City to release any retained funds owed to the contractor per California

1 Public Contract Code Section 7107.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

May 17, 2016 – City Council approved the concept designs for the Inclusive Playground Project.

June 21, 2017 – City Council approved updates for the Capital Improvement Plan, including funding in FY 2017-18 for the Inclusive Playground Project.

July 19, 2017 – City Council approved an agreement with the Magical Bridge Foundation for the support in fundraising, grant writing, and design for the Morgan Hill Inclusive Playground.

October 4, 2017 – City Council authorized the City Manager to apply for the County of Santa Clara All Inclusive Playground Grant, which the City was ultimately awarded $2 million towards the Project.

October 17, 2018 – City Council authorized the City Manager to enter into a design agreement with the Magical Bridge Foundation for the completion of designs for the Project.

December 19, 2018 – City Council approved the Magical Bridge Morgan Hill Playground Concept Design.

March 18, 2020 - City Council awarded Morgan Hill Inclusive Playground/Magical Bridge Project.

FISCAL AND RESOURCE IMPACT:

The final contract amount for the Morgan Hill Inclusive Playground/Magical Bridge Project is $6,049,822.46. The contract was awarded to CRW Industries, Inc. in the amount of $5,562,090 with an authorized contingency of $556,209 (Total of $6,118,299). The project is funded in the adopted Capital Improvement Program budget, under Project 137015, utilizing Park Impact Fund (301). The balance of $68,476.54 will be returned to Fund 301.

Significant grant funding for the project included: County All Inclusive Playground Grant ($2,000,000), County Office of Education ($200,000) and County Parks Grant ($150,000) for project reimbursement. Additionally, hundreds of thousands in donations were collected and used towards the construction of the Project.

CEQA (California Environmental Quality Act):

Categorical Exemption
Notice of Exemption was filed for the project in November 2017 based on the

1 categorical exemption 15301 - Existing Facilities 15304 - Minor Alterations to Land and 15311 - Assessory Structures.

MONTEREY
RD
CHURCH
ST

W EDMUNDSON AVE

OLYMPIC
DR
MAST
S
ST

PRING AVE

COSMO AVE
DENALI
DR
DEL
MONTE
AVE

EDES ST

LA CROSSE DR
KEITH
WAY
SUNSET
AVE

FOOTHILL CT

BARRETT AVE
PIAZZA
WAY

BRYCE DR

DONDOLARE
ST

E EDMUNDSON AVE

FERRARA CT

MATHILDA CT

EDMONDSON CT

VINEYARD BLVD
O
0 187.5 375 750 1,125 1,500
Feet

MORGAN HILL

INCLUSIVE PLAYGROUND/

MAGICAL BRIDGE PROJECT
Engineering and Utilities Department
Capital Improvement Division
G:\R-14\Proj\GIS\John\Yat_InclusiveMagical.mxd

PROJECT LOCATION

CENTENNIAL REC
CENTER

COMMUNITY PARK

CIP Contract Acceptance
Funding Closeout Statement
Project: Morgan Hill Inclusive Playground/Magical Bridge Project Project No: 137015
Date of Project
Award: 18-Mar-22 Project AwardAmount:

Funding Source: F301
Contingency
Authorized:

Date of Project
Acceptance: 16-Nov-22 Total Authorized:

Actual Base
Contract Spent:

Change Orders
Description Date
Council Approval
Reqd? (Y/N)
CO #1
Add Self Cleaning Auto Wash to (2) New
Restroom Building not in Plans
N
CO #2
Additonal Changes to Bridge and Playhouse
N
CO #3
Add Square Footage to Safety Surfacing
N
CO #4
Upgrade Guardrail Thickness and Change
from Straight Panels to Curved Panels and
Revise Fencing Material and Height N
CO #5
Add Railings not on Plans, Install Gates on
Site, and Install Fence at Playlot Area
N
CO #6
Add Receptacles at Outdoor Classroom Area,
Conduit Re-route due to Conflict
N

CO #7
Add Donor Wall, Relocate 6" Water Main at
Entry, Add Exit Ramp at Playhouse, Remove
12" Pipe and Drain Inlet in Conflict with
Bridge Foundation, Remove Concrete at
Bridge Landing, Add New Seatwall, Add Curb
at Harp Area, Credit for Cameras and Wifi,
and Credit for Striping and Signage
N
CO #8
Exisitng Irrigation Repairs
N
CO #9
Hydroseeding in Place of Seeding in Project
and Additonal Repairs to Irrigation
N
CO #10
Decomposed Granite Install in Front of Entry
Way and Maintenance Road
N
Total C.O.:

Additional Appropriations
Source Amount Date
None
Total Construction
Amount (Base
Contract plus
CO's):

Construction Fund Balance: $68,476.54

$5,562,090
$556,209
$6,118,299
$5,562,090
$27,639.35
$52,541.00
$70,830.00
$114,016.78
$68,218.81
$12,445.22

$37,734.06
$22,087.59
$55,830.01
$26,389.64
$487,732.46
$6,049,822.46

Recording Requested By:
___________________________
When Recorded Mail To:
___________________________
___________________________
___________________________
___________________________
SPACE ABOVE THIS LINE IS FOR RECORDER’S USE

NOTICE OF COMPLETION
Civil Code §§ 8182, 8184, 9204, and 9208
NOTICE IS HEREBY GIVEN THAT:

1. The undersigned is the Owner or agent of the Project described below.

2. Owner’s full name is City of Morgan Hill.

3. Owner’s address is 251 Edmundson Avenue, Morgan Hill, CA 95037.

4. The nature of Owner’s interest in the Project is:

XX Fee ownership __ Lessee __ Other:

5. Construction work on the Project performed on Owner’s behalf is generally described as follows: Demolition of existing playground and Reconstruction of an All Inclusive Playground

6. The name of the original Contractor for the Project is: CRW Industries, Inc.

7. The Project was completed on: October 31, 2022

8. The Project is located at: 251 Edmundson Avenue
Verification: In signing this document, I, the undersigned, declare under penalty of perjury under the laws of the State of California that I have read this notice, and I know and understand the contents of this notice, and that the facts stated in this notice are true and correct. __________________________ ________________________________ Date and Place Signature
________________________________
Scott Creer, City Engineer

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

Angie Gonzalez, Deputy City Clerk
APPROVED BY: City Manager
ADOPT ORDINANCE 2338, NEW SERIES, APPROVING A ZONING MAP

AMENDMENT FOR EXPANSION OF A MIXED-USE FLEX ZONE AND

PLANNED DEVELOPMENT COMBINING DISTRICT AND MASTER
PLAN FOR A 66.49-ACRE AREA LOCATED AT THE NORTHEAST
QUADRANT OF COCHRANE ROAD AND HIGHWAY 101 (APNS 728-37- 001, -002, -004, -005 & -007)

RECOMMENDATION(S)
Waive the reading, adopt Ordinance No. 2338, 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.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Maintaining and Enhancing Infrastructure
Supporting our Youth, Seniors, and Entire Community
Preserving and Cultivating Public Trust
Advancing Regional Initiatives
2022-2023 Strategic Priorities
Affordable Housing and Homelessness
Economic Development
Guiding Documents
Economic Blueprint
Morgan Hill 2035 General Plan
REPORT NARRATIVE:

On November 2, 2022, the City Council introduced Ordinance No. 2338, New Series, by the following roll call vote: AYES: Borgioli, Constantine, Martinez Beltran, McKay, Spring; NOES: None; ABSTAIN: None; ABSENT: None.

The project would involve construction of Phase II of the Cochrane Commons development on the undeveloped site adjacent to the completed Phase I. The project would consist of 498 residential units and 135,000 square feet of retail space. The

2 residential uses would be located in the northern and middle portion of the project site and commercial retail would be located in the southern portion. A General Plan Amendment was also proposed to expand the Mixed-Use Flex General Plan land use designation to the entire Phase 2 portion of the site. The City Council approved a project with a reduced General Plan Amendment area that relates directly to the residential uses planned for the site. The City Council also approved modifications to development standards and uses as recommended by the Planning Commission - reduced height and certain uses moved from permitted to conditional included. The City Council also certified the Subsequent Environmental Impact Report (SEIR) and adopted Findings of Significance and a Statement of Overriding Considerations for the project.

COMMUNITY ENGAGEMENT:

The proposed project was publicly noticed with expanded noticing (mailed to property owners within an expanded notice area – beyond 600 feet - of the project site and display notice placed in the local newspaper) for the minimum 10-day period.

Information regarding the meeting was also placed on social media and the City’s 411 information email. Prior to this public hearing, the Planning Commission also held two separate preliminary hearings in 2020 and 2021.

ALTERNATIVE ACTIONS:

Not Applicable.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The Planned Development Combining District (PD) and associated Master Plan Overlay for the project site was established by City Council Ordinance No. 1746, New Series on November 5, 2005. The Planning Commission considered the initial preliminary application at their February 11, 2020 meeting. The applicant continued to refine the application and appeared before the Planning Commission again on March 23, 2021.

The Planning Commission approved amendments to the General Plan Land Use Map and Zoning Map at their October 11 meeting.

FISCAL AND RESOURCE IMPACT:

The City development review functions are cost-recovery, with fees collected from applicants to cover cost of services. These fees have been collected.

CEQA (California Environmental Quality Act):

A Subsequent Environmental Impact Report (SEIR) was certified by City Council on November 2, 2022. The SEIR identified significant impacts to the following California Environmental Quality Act (CEQA) environmental issue area: transportation. As described in the SEIR, Vehicle Miles Traveled (VMT) impacts can be mitigated, but the project would not fall below the applicable residential VMT per capita threshold and would be considered significant and unavoidable. All other subject area impacts were determined to have no impact or less than significant with the implementation of mitigation measures.

ORDINANCE NO. 2338

AN ORDINANCE OF THE CITY OF MORGAN HILL

APPROVING A ZONING MAP AMENDMENT FOR

EXPANSION OF A MIXED-USE FLEX ZONE AND

PLANNED DEVELOPMENT (PD) COMBINING DISTRICT
AND MASTER PLAN FOR A 66.49-ACRE AREA

LOCATED AT THE NORTHEAST QUADRANT OF
COCHRANE ROAD AND HIGHWAY 101 (APNs 728-37- 001,
-002, -004, -005 & -007)

THE CITY COUNCIL OF THE CITY OF MORGAN HILL DOES ORDAIN AS FOLLOWS:

SECTION 1. The Planned Development (PD) amendment will yield a mixed-use project that is consistent with General Plan City and Neighborhood Form Policies CNF-10.3, CNF-10.6, CNF-13.1 Housing Element Policy HE-4u, Economic Development Element Policy ED7.4. There is no specific plan or area plan relating to this site.

SECTION 2. The existing PD provides for a regional shopping center and the first phase has been completed. Stand-alone, big box shopping centers are no longer a successful development model and, as such, the applicant desires to incorporate housing into the project to create a mixed-use neighborhood more consistent with the Morgan Hill 2035 General Plan and superior to the originally approved PD.

SECTION 3. There is an existing Planned Development on this property. Substantial public benefits were not required with the approval of the original PD. The incremental changes proposed by the Amendment allow housing on the site. The project will pay special attention to the connections between Phase I and II to ensure uses complement each other and there is adequate interface between uses. The project will give to the pedestrian scale of common areas and activation of the pedestrian realm. The additional activation of public spaces and connections across the property will provide benefits not only to residents of the center, but to the public as well.

SECTION 4. The site is more than adequate in size to accommodate the original regional shopping center Planned Development as well as the proposed mixed-use development that would be achievable by adding housing to the site.

SECTION 5. The site is located adjacent to Highway 101 bounded by Cochrane Road and Mission View Drive. There are wet and dry utilities and infrastructure in the surrounding area that support the development of this site.

SECTION 6. The proposed changes to the existing PD will create a mixed-use neighborhood that will be compatible with the existing and planned land use character in the area surrounding the existing center. There continues to be a significant impact under CEQA related to transportation, similar to what was approved as part of the 2005 PD and associated EIR. However, this significant impact is based on Vehicle Miles Traveled (VMT). The traffic study conducted for the General Plan based on Level of Service (LOS) demonstrated that the proposed mixed-use project would not result in any new or substantially more severe effects on intersection operations than the previously approved commercial/retail development.

SECTION 7. A Subsequent Environmental Impact Report has been prepared for this project as part of the General Plan Amendment and Zoning Amendment applications.

Mitigation measures and a monitoring program will be adopted for those environmental impacts identified in the report.

SECTION 8. The required findings for a Zoning Amendment in Section 18.114.060 can be made.

The Planned Development amendment will yield a mixed-use project that is consistent with General Plan City and Neighborhood Form Policies CNF-10.3, CNF-10.6, CNF-13.1 Housing Element Policy HE-4u, Economic Development Element Policy ED7.4. There is no specific plan or area plan relating to this site.

The inclusion of housing and the creation of a mixed-use neighborhood will not be detrimental to the public interest, health, safety, convenience, or welfare of the city. The project site is physically suitable for the proposed changes to the existing PD and the creation of a mixed-use neighborhood will create a more integrated community with easy access to goods and services.

SECTION 9. The required findings for a General Plan Amendment in Section 18.115.060 of the Municipal Code and for a Planned Development amendment in Section 18.30.050 H.7 of the Municipal Code can be made.

SECTION 10. The request was considered by the Planning Commission at its regular meeting of October 11, 2022, at which time the Planning Commission recommended approval of Zoning Amendment application, ZA2019-0003: COCHRANE – MORGAN HILL RETAIL VENTURE CENTER and the Planned Development Master Plan as described in the attached Exhibit “A” dated October 30, 2019, and revised on March 13, 2020, and further revised by applicant on October 11, 2022 and further revised by the Planning Commission on October 11, 2022, and by this reference incorporated herein. The City Council accepts the recommendation of the Planning Commission and adds a maximum height and number of stories for residential uses.

City of Morgan Hill
Ordinance No. 2338, New Series

THE FOREGOING ORDINANCE WAS INTRODUCED AT A MEETING OF THE CITY COUNCIL HELD ON THE 2ND DAY OF NOVEMBER 2022, AND WAS FINALLY ADOPTED AT A MEETING OF THE CITY COUNCIL HELD ON THE 16THDAY OF NOVEMBER 2022, AND SAID ORDINANCE WAS DULY PASSED AND ADOPTED IN ACCORDANCE WITH LAW BY THE FOLLOWING VOTE:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

APPROVED: ATTEST:
______________________________ ________________________________ RICH CONSTANTINE, Mayor MICHELLE BIGELOW, City Clerk
 CERTIFICATE OF THE CITY CLERK 

I, MICHELLE BIGELOW, CITY CLERK OF THE CITY OF MORGAN HILL, CALIFORNIA, do hereby certify that the foregoing is a true and correct copy of Ordinance No. 2338, New Series, adopted by the City Council of the City of Morgan Hill, California at their regular meeting held on the 16th day of November 2022.

WITNESS MY HAND AND THE SEAL OF THE CITY OF MORGAN HILL.

DATE: _______________________ _________________________________ MICHELLE BIGELOW, City Clerk
City of Morgan Hill
Ordinance No. 2338, New Series

EXHIBIT A – Planned Development Master Plan
City of Morgan Hill
Ordinance No. 2338, New Series

MIXED USE PROJECT
COCHRANE ROAD AND HIGHWAY 101

A DINAPOLI, BROWMAN, GUGLIELMO DEVELOPMENT

PD GUIDELINES

MORGAN HILL, CA
October 2022
Location
Cochrane Commons is located at the northeast quadrant of the Cochrane Road overpass at Highway 101.

Introduction and Intent
The intent of this narrative is to describe the architectural theme and site development plans which will guide the future development of this site relative to architectural compatibility, site design, landscape features, and signage concepts. These development standards are designed to provide flexibility to allow creative freedom and diversity, which is necessary for maintaining and attracting national retail tenants and future residents to the Cochrane Commons mixed use project. This document outlines the guidelines under which all businesses and residents can synergistically coexist in a competitive market and in close proximity to Cochrane Commons Shopping Center. Except as otherwise modified and amended herein the existing and approved PUD shall remain in full force and effect, including without limitation the permitted and conditionally permitted uses as well as the original site plan.

Development Guideline Format
These PD guidelines are organized as follows:

Section 1: Allowable Uses
Section 2: Site Development Concept
Section 3: Landscape and Lighting Concepts and Guidelines Section 4: Parking and Loading/Circulation
Section 5: Architectural Concepts and Guidelines
Section 6: Site Design Guidelines
Section 7: Utilities and Appurtenant Uses / Devices
SECTION 1: ALLOWABLE USES
All capitalized terms herein shall have the meaning set forth in the Morgan Hill Zoning Code, as adopted on June 6, 2018.

City of Morgan Hill
Ordinance No. 2338, New Series

Permitted Uses:
• Small, medium and big box Retail, (including, but not limited to General Retail, Convenience Markets, Home Improvement Centers, Grocery stores, Liquor Stores, Drug Stores, and/or Large Commodity Retail)
• Residential Land Uses (8-24 dwelling units per acre), rentals or for sale (including, but not limited to, Duplexes, Triplexes, Group Housing, Live/Work Units, Mixed Use Residential, Multi-Family Dwellings, Single-Family Dwellings, Single-Family Attached Dwellings, and/or Single Family Detached Dwellings) • Residential Care Facilities, Small
• Day Care Centers and/or Home Day Care
• Colleges and Trade Schools, Community Assembly, Cultural Institutions, Instructional Services, Schools
• Eating and Drinking Uses (including, but not limited to, Restaurants, Fast Food Restaurants, SitDown, quick service, fast casual, café, market hall, cafeteria style, drive in and full service) • Up to five (5) Drive-Through Facilities. Drive-Through Facilities in addition to those permitted above, shall be permitted within the shopping center with the approval of a conditional use permit. • Commercial Recreation (including indoor health clubs and group fitness facilities), Cinemas and Theaters, Parks and Recreational Facilities, Plant Nurseries • Pop-up shops, food trucks and/or temporary food kiosks (day or night) • Farmers Market
• Indoor Animal Boarding
• Professional Offices, Medical Offices and Clinics, Banks and Financial Institutions, Veterinarian Clinics and Hospitals, Government Offices, Service Commercial Uses, Business Support Services, and/or coworking spaces • Personal Services, Social Services, and/or Public Safety Facilities • Vehicle Rental and Vehicle Showroom
• Parking Lots and Structures
• Recycling Facilities in conjunction with or required as a part of an allowed use • Wireless Communication Facilities
• Urban Agriculture
• Wholesaling
• Warehousing, storage, and distribution, as a part of a retail or otherwise allowed use including curbside and in store pick-up services, return and delivery services • Ecommerce Fulfillment Services business as part of a retail or other allowable use; • Any other use listed as a permitted use in the original Project PUD approvals, in the GC, General Commercial District in the Morgan Hill Municipal Code, or Mixed-Use Flex designation in the General Plan
Conditional:
• Any Drive-Through and Drive-In Facilities that is proposed beyond the five (5) that are permitted above shall require a conditional use permit.
• A maximum of one (1) of each: Fuel and Service Stations, Vehicle Washing, and Convenience Markets, unless such use is a part of a Retail tenant located or to be located in the Shopping Center in which case more than one of each of the foregoing shall be permitted. • Nursing Homes, Long-Term Care, Residential Care Facilities, and/or • Lodging Facilities, only full service or boutique hotel lodging allowed • Bars and Nightclubs, Tasting Rooms, Breweries, Beer Gardens • Fuel and Service Stations, Vehicle Sales and Leasing, Vehicle Washing City of Morgan Hill
Ordinance No. 2338, New Series

• Vehicle Repair and Maintenance, Minor (such as a tire shop, oil changer, car audio shop, or other similar auto oriented uses)
SECTION 2: SITE DEVELOPMENT CONCEPT: Notwithstanding anything contained herein to the contrary, the original Site Development Concept in Section 2 of Ordinance No. 1746 dated December 8, 2005 (“First PD”) shall continue in full force and effect, except as added or modified herein.

1. The mixed use site development plan consists of multiple retail areas and residential areas, with vehicular roadways bisecting the site N/S from Cochrane Road at De Paul Drive and E/W from Mission View Drive.

2. Building setbacks along Cochrane Road shall be an average of 25 ft; along Mission View an average of 15 feet,(with all setback distances measured from the property line); however, encroachments into the setback area are permissible to accommodate the architectural and functional needs of the development as long as the overall average is maintained. Building setbacks along rear or side yard property lines adjacent to property not a part of the PD shall be an average of 10’. For all property within the Project that is subject to the PD there shall be no minimum building setback requirements required between buildings or other improvements, uses, or properties within the Project boundaries.

3. The First PD site plan, and the Site Plan and elevations submitted with the PD Application adopted in Ordinance No. 1746 dated December 8, 2005 shall not require further review or approval.

4. The project site plan and project design elevations shall be subject to Administrative Design Review.

City of Morgan Hill
Ordinance No. 2338, New Series

Project Site Plan
SECTION 3: LANDSCAPE AND LIGHTING CONCEPTS AND GUIDELINES Landscape

5. Project landscaping shall be substantially consistent with the Project Site Plan and attached general landscape plan submitted as part of the Amended PD, but will require Administrative Design Review. All street trees and trees planted within the front setback areas shall be a minimum 15 gallon size. Except as permitted under the approved PD Amendment or otherwise shown on approved Project landscape drawings, and except for landscaping adjacent to buildings, all landscape areas shall comply with city code.

6. The general characteristics of the plant palette for the Project shall be a combination of year‐ round color and textural interest. Plants shall be selected on the basis of color combinations complementary to the existing architectural theme, growing patterns, low maintenance and water conservation characteristics.

7. An average 20 foot wide landscape strip (excluding sections of hardscape elements such as driveways or sidewalks) shall be provided along Cochrane road, and a 15 foot wide landscape strip (excluding sections of hardscape elements such as driveways or sidewalks) shall be provided along Mission View Drive. Encroachments into all landscape setbacks shall be permissible to accommodate the architectural and functional needs of the development as long as the remaining landscaped areas maintains the overall average or a substantial portion of the landscape strip equals or exceeds 15 foot requirement. Acceptable mitigation for such encroachments shall include, without limitation: additional landscape planting, an earthen City of Morgan Hill
Ordinance No. 2338, New Series

berm, or screen walls. Berms shall be an average height of 3 feet with a minimum height of 1.5 feet, and shall undulate where possible to be aesthetically pleasing. Except as provided herein, the design of the landscaping strip referred to above shall substantially conform to the Landscape Plan submitted as part of the PD Master Plan.

8. Canopy‐providing treesshall be planted in the parking lot planter islandsto produce shade.

9. The main project entrance at DePaul Drive shall be well landscaped and serve as a focal point, and may include attractive landscape walls, project signage, and other features.

10. Shrubs or vine planting shall be provided to screen utilities and trash enclosures.

11. The main parking field and/or any parking structure shall be screened from view of public streets by use of berming and/or bushes of a minimum of 3 feet effective height (18 months after planting), as measured from the top of the nearest street curb.

12. Where possible, landscaping shall be used to soften the appearance of fences and walls and front elevations of large scale retail buildings which lack fenestration or other architectural detailing.

13. All service areas fronting on public streets shall be screened by landscaping, berms, screens, and/or walls, substantially consistent with the colors and materials shown in the ‘colors and materials pallet’ packet on file in the Development Services Center.

14. Special paving or materials such as integral color concrete or asphalt, pavers, and/or scored concrete paving shall be provided at key on‐site intersections. Pedestrian walkways shall be provided connecting groupings of retail structures to other retail areas, mixed use areas, and/or residential areas, and to parking areas. Walkways which cross traffic lanes shall have special markings such as integral colored concrete, scored or raised concrete, colored paving, special striping, and/or paving stones.

Landscape Site Plan
Lighting
City of Morgan Hill
Ordinance No. 2338, New Series

15. Any decorative lighting on the pedestrian pathways parallel to the main driveway from Cochrane Road shall be reduced in height and scale, to create a more human‐scale feeling and atmosphere.

16. The design of the exterior retail building lighting shall be compatible with the existing architectural style of the project. The design of the exterior residential and/or mixed use building lighting shall be complementary with the existing architectural style of the project, and/or provide an architectural transition to the adjacent residential projects.

17. The main parking lot lighting fixtures shall be consistent throughout the project, provided, however the mixed use and/or residential portions of the project shall complement the other portions of the project and will help identify neighborhoods within the project. The maximum pole height (including the base) shall be 33 feet except that lighting poles along Mission View project edge and the Cochrane Road project edge shall be limited to a maximum height (excluding the base) of 15 feet. Further conditions regarding residentially zoned properties are imposed under guideline #18 below.

18. All lighting shall be shielded and directed in such a manner so as not to directly cast light on neighboring residentially zoned properties outside the Project. The Applicant shall pay special attention to ensure that there is no unacceptable spillage of light outside the applicable boundaries of the project. Prior to issuance of site construction permits, Applicant shall provide a photometric plan evidencing conformance of the lighting plan to these guidelines.

SECTION 4: PARKING AND LOADING/CIRCULATION

19. The main parking field shall be screened from public view on Cochrane Road primarily through constructed buildings, the use of berming and/or hedge row plantings, shrubs, trees or any combination thereof, in a manner substantially consistent with the project Landscape Plan.

20. 90 degree parking, angled parking, compact parking, RV parking, parallel parking, one‐way drive aisles, and round‐abouts shall be permitted.

21. Parking areas shall be designed to include provision for pedestrian walkways for access to building entrances. Walkways which cross traffic lanes shall have special markings such as integral color concrete, scored or raised concrete, colored paving, specialstriping and/or paving stones. Walkway strips shall be intermittently provided through landscaped areas to protect landscaping from foot traffic damage.

22. In order to facilitate on‐site traffic flow and vehicle and pedestrian safety, parking stalls shall not be located directly adjacent to the front of a retail anchor tenant occupying a ground floor area that is 100,000 square feet or larger (i.e. Major 1 (Target) as shown on the PD Master Plan).

23. Reciprocal access and shared parking between properties shall be permitted and used, whenever possible, and for purposes of calculating parking ratios residential portions of the project shall be allowed to share parking stalls from the retail portion of the project in meeting the guest stall parking requirements. Given the benefits of the walkable and mixed‐use nature of the project the Residential portion of the Project shall be permitted to receive an overall reduction in its parking requirements by up to 15% off the total parking required for the residential portion of the Project.

24. Cross access easements shall be provided throughout the project.

25. Shared access easements and drivewaysshall be provided.

City of Morgan Hill
Ordinance No. 2338, New Series

26. Drive aisles shall allow for circulation within the project, with sufficient width for emergency vehicles.

27. Provisions for connecting driveways and walkways between adjacent properties within the project are encouraged.

28. Emergency vehicle accessshall be provided throughout the project.

29. Loading areas and docks shall be screened from view along Mission View Drive by landscaping or a screening structure. Screen walls or other screening structures shall be architecturally treated, and may be constructed with metal, concrete, concrete block, wood or a combination thereof (see attached exhibit for an example of acceptable screening). Alternatively, screening along the northern property may be compromised of dense evergreen plantings, or other similar screenings.

30. All truck deliveries between the hours of 10pm to 6am shall enter and exit through the DePaul Drive project driveway (main vehicular entry from Cochrane Road).

31. Parking required for the development shall meet the requirements set forth in this PD Amendment. The project shall benefit from and received credit for shared parking throughout the project and among a mix of uses.

SECTION 5: ARCHITECTURAL CONCEPTS AND GUIDELINES

32. The architectural concept shall create a campus of mixed use residential and commercial structures which vary in character, massing, materials, and colors but remaining complementary to the existing theme of the PD Master Plan. Each structure shall be complementary to the existing architectural theme or most directly adjacent structure, but may maintain its own uniqueness prioritizing thoughtful transitions from differing styles within the project and the context of the neighborhood. Building facades may contain design features and variances in scale to create interest in character. The design of entertainment uses may be enhanced by featured elements which may include some or all of the following: neon, tower, marquee, theater lights and statement lobby glazing. The development shall include tower and/or entry features, bold cornices, and varying facades, and a variety of materials, colors and storefronts.

Awnings, light sconces, site lighting, and/or street furniture shall be situated at appropriate locations as determined by Applicant to enhance the pedestrian and/or human scale feel of the project.

33. No lodging use shall exceed 68 feet in height to the top of the parapet except that tower and accent features of buildings may exceed such height limitations as long as (i) the scale and design of such features are complementary to the existing architectural design of the project; (ii) such exceptions affects no more than 25% of the applicable building; (iii) such features shall not exceed 75 feet at the highest point. Notwithstanding the above, no building sharing a frontage with Mission View shall exceed 2 stories in height, excluding roof decks or other outdoor space which in this case shall not be included in the total number of building stories. No residential use shall exceed 4 stories or 55 feet in height.

34. Rooflines may be flat and/or provide variation in height, cascading rooflines, or a combination of the above, which shall be complementary to the existing architectural theme established for the development.

35. Large, continuous structures shall incorporate breaks in horizontal planes by varying architectural features and designs and recessing windows and entrances, to provide substance and scale.

City of Morgan Hill
Ordinance No. 2338, New Series

36. Windows shall be enhanced by use of various sizes and shapes, and highlighted by the use of accent trim (e.g. molding, pop‐out or wood trim). The design shall be complementary to the architectural style of the project.

37. Architectural treatment shall be applied to the front façade of all building elevations consistent with the below design elevation concepts and complementary to the existing retail development and surrounding residential neighborhoods; complementary architectural treatment shall also be applied to other areas of any building clearly visible from any public street. Final building designs shall be a staff level design review approval.

38. Building design shall be compatible with the immediate adjacent building and provide harmonious transition between various uses.

39. Gutters and downspouts shall be made of quality materials and treated to blend into the façade to which it is attached, unless as a design element, in which case the color shall be consistent with the color schemes of the building.

40. No mechanical equipmentshall be exposed on the wallsurface of any building.

41. All roof‐mounted mechanical equipment or ductwork which project vertically above the roof or parapet shall be screened consistently with the building design.

42. Any outdoor storage of goods, materials or equipment (e.g. garden center, lumber yard) shall be located within an enclosed area. The fencing and/or screening enclosing such area shall be complementary to the existing architectural theme of the PD Master Plan and designed in a manner complementary to the building design and site layout. Chain link fencing with wood inserts is not an acceptable manner of screening.

43. Fences and walls shall be designed to be compatible with the surrounding landscape and architectural style of the PD.

44. Trash enclosures shall be constructed of solid material, and shall be a minimum of six feet in height, with solid view obstructing gates. Reasonable efforts shall be made to screen trash enclosures or locate them in inconspicuous locations.
3 Story Multi‐Family
City of Morgan Hill
Ordinance No. 2338, New Series

4 Story Multi‐Family
Retail
Bungalows
City of Morgan Hill
Ordinance No. 2338, New Series

Townhomes
Townhomes
SECTION 6: SIGN DESIGN GUIDELINES

45. This PD shall permit two (2) pylon sign structures along Highway 101 near the north end of the site and one pylon structure along Highway 101 near Cochrane Road consistent with the original PD application (8/22/05), subject, if necessary, to approval by the SCVWD. The two pylon signs near the north end of the site shall be a maximum height of 68 ft, as measured to the top of the horizontal cornice. The pylon sign near Cochrane Road shall be a maximum height of 50 ft, as measured at the top of the horizontal cornice. Decorative architectural features may extend above the 68 ft and 50 ft height limits as depicted on the sign elevations date stamped October 27, 2005, on file at the Community Development Department. This PD shall also permit one monument sign structure consistent with the original PD application (8/22/05) at the intersection of Cochrane Road and Mission View Drive. This monument sign shall be a maximum overall height of 20 feet, and shall not be illuminated in the evenings after 10pm. In addition, this PD shall permit directional signage, other residential project signage, landscape wall signs including but not limited to landscape wall signs along Cochrane and Mission View, and other signage consistent with a leasing office.

46. Except as permitted above, the uniform sign program for the Project shall control the signage requirements and placement of signs within the project. The uniform sign program shall be applicable to all buildings and uses within the PD. Tenant identification signs and “now leasing” signs will be allowed on the sides of the buildings that are visible to Highway 101. Signs, Banners and posters shall be permitted and must be of a high quality with character, and ambiance complementary to the existing architectural theme and the standards of the PD Master Plan. Address numbers shall contrast with their background and shall be a minimum of six inches in height.

City of Morgan Hill
Ordinance No. 2338, New Series

47. Poster boards containing retail displays (including advertising), for sale/for rent signs incorporating an artistic component or displaying information of community interest shall be permitted.

SECTION 7: UTILITIES AND APPURTENANT USES / DEVICES

48. Easements for the installation and maintenance of utilities, walkways, roads, shared driveways, parking and drainage facilities shall be recorded as part of any subdivision map or lot line adjustment.

49. Detention ponds and/or bioswales may be located within any setback area or outside a setback area.

50. Utility equipment may be located with landscaped or setback areas provided they are located as far from the street frontage as feasibly possible, and adequately screened and/or landscaped to limit the visibility of such equipment.

51. Uses within the PD that utilize shopping carts shall provide indoor or outdoor screened storage of the carts and shall provide for architecturally treated collection areas throughout the parking lots.

52. Vending machines, bike and/or scooter racks, rideshare pick up areas, solar panel installations, newspaper racks, coin operated devices, electric vehicle parking and/or charging stations or other similar devices may be placed on the exterior and/or walkway and/or parking lot or garage adjacent to proposed buildings, provided the area in which the device is located is neat, attractive, attractive or otherwise architecturally treated or landscaped. Once installed, such devices and locations shall be maintained in a high quality manner.

City of Morgan Hill
Ordinance No. 2338, New Series

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

Angie Gonzalez, Deputy City Clerk
APPROVED BY: City Manager

AMEND CONFLICT OF INTEREST CODE REPORTING CATEGORIES

RECOMMENDATION(S)
Adopt resolution amending the list of positions subject to the City’s Conflict of Interest Code.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Preserving and Cultivating Public Trust
REPORT NARRATIVE:

The Political Reform Act requires every local government agency to review its Conflict of Interest Code (Code) biennially (even years) to determine if it is accurate or must be amended. The Leadership Team, including the City Attorney and Deputy City Clerk, has conducted the review. Based on said review, staff recommends that the City Council adopt the resolution (Attachment 1) amending the Code to update the reporting categories. The categories to be deleted are shown as strike-outs, and the categories that have been added or amended are shown as underscored/bold.

Staff has identified the recommended changes below to the Code to comply with Government Code Section 87306 to update the reporting categories and to comport with the current employee classifications:
 Add the following reporting categories:
a. Senior Human Resources Analyst
b. Administrative Analyst
c. Economic Development Coordinator
d. Planning Manager
e. Building Manager
f. Building Inspector
g. Assistant/Associate Planner
h. Police Administrative Manager
i. Emergency Services Coordinator
j. Program Analyst
k. Public Services Administrative Manager

3 l. Senior Recreation Supervisor
m. Environmental Services Manager
n. Housing Director
o. Environmental Services Administrator
p. Supervising Civil Engineer
 Remove the following reporting categories:
a. Council Services and Records Manager
b. Communications & Engagement Director
c. Economic Development Manager
 The following titles have been amended:
a. City Clerk/Public Information Officer
b. Maintenance Service Coordinator
c. Utility Operations Manager
COMMUNITY ENGAGEMENT:

Inform
This report serves to inform the community about the amendments to the City’s Conflict of Interest Code.

ALTERNATIVE ACTIONS:

Not Applicable.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The City’s Conflict of Interest Code is required to be reviewed biennially. It was last reviewed and approved on August 5, 2020.

FISCAL AND RESOURCE IMPACT:

There are no fiscal or resource impacts associated with this action.

CEQA (California Environmental Quality Act):

Not a project. Administrative activities of governments that do not result in direct physical changes in the environment do not qualify as a project for purposes of CEQA.

RESOLUTION NO. 22-0XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF MORGAN HILL AMENDING RESOLUTION NO. 20-043

PERTAINING TO THE CITY'S CONFLICT OF INTEREST

CODE BY AMENDING EXHIBIT A (DESIGNATED

POSITIONS) TO REFLECT CURRENT CITY POSITION(S)

AND DISCLOSURE CATEGORIES
WHEREAS, pursuant to Government Code 87300, Resolution No. 1827 was adopted on September 21, 1983, and subsequently amended by various resolutions; and WHEREAS, the Political Reform Act requires every local government agency to review its Conflict of Interest Code biennially or as deemed appropriate; and WHEREAS, the Fair Political Practices Commission has adopted Title 2 of the California Code of Regulations § 18730, which contains the terms of a standard model conflict of interest, which can be incorporated by reference, and which may be amended by the Fair Political Practices Commission after public notice and hearings to conform to amendments to the Political Reform Act; and
WHEREAS, a review has been conducted and a determination has been reached that certain amendments are required to update the Code and maintain its accuracy as outlined in Exhibit A – Persons Subject to the Conflict of Interest Code; and WHEREAS, the Mayor, Council Members, City Manager, City Attorney, City Treasurer, and Planning Commission are not listed in the City’s Conflict of Interest Code as they are governed by § 87200 of the Government Code.

NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF MORGAN HILL adopts the attached Exhibit A – Persons Subject to the Conflict of Interest Code; and Exhibit B – Conflict of Interest Code for the City of Morgan Hill.

City of Morgan Hill
Resolution No. 22-0XX

PASSED AND ADOPTED by the City Council of Morgan Hill at a Regular Meeting held on the 16th day of November 2022 by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

APPROVED: ATTEST:
____________________________ _________________________________ RICH CONSTANTINE, Mayor MICHELLE BIGELOW, City Clerk
 CERTIFICATION 
I, Michelle Bigelow, City Clerk of the City of Morgan Hill, California, do hereby certify that the foregoing is a true and correct copy of Resolution No.22-0XX, adopted by the City Council at the meeting held on November 16, 2022.

WITNESS MY HAND AND THE SEAL OF THE CITY OF MORGAN HILL.

DATE: _____________________ ________________________________ MICHELLE BIGELOW, City Clerk

City of Morgan Hill
Resolution No. 22-0XX

EXHIBIT A
Persons Subject to the Conflict of Interest Code
Listed below are the designated positions in the local agency that are required to file Disclosure Statements.

Category 1 is defined as:

A designated employee, board member, and commissioner must report all interests in real property having a direct or indirect relationship to, and which may foreseeably be affected by, the official duties and responsibilities of each such designated position.

Category 2 is defined as:

A designated employee, board member, and commissioner in this category must report all investments having a direct or indirect relationship to, and which may foreseeably be affected by, the official duties and responsibilities of each such designated position.

Category 3 is defined as:

A designated employee, board member, and commissioner in this category must report income and business entities in which he or she is a director, officer, partner, trustee, and employee or holds any position of management having a direct or indirect relationship to, and which may foreseeably be affected by, the official duties and responsibilities of each such designated position.

Disclosure
Persons Subject to the Conflict of Interest Code Category

Administrative Services
Finance Director 1,2,3
Human Resources Director 1,2,3
City Clerk/Public Information Officer 1,2,3
Budget Manager 1,2,3
Council Services & Records Manager 1,2,3
City Attorney’s Office
Assistant City Attorney 1,2,3
Deputy City Attorney 1,2,3
City Manager’s Office
Communications & Engagement Director 1,2,3
Development Services
Assistant City Manager for Development Services 1,2,3
Development Services Director 1,2,3
Economic Development Director 1,2,3
Economic Development Manager 1,2,3
Economic Development Coordinator 1,2,3
Principal Planner 1,2,3
Housing Director 1,2,3
Building Official 1,2,3
Building Manager 1,2,3

City of Morgan Hill
Resolution No. 22-0XX

Senior Planner 1,2,3
Fire Department
Fire Chief 1,2,3
Assistant Fire Chief 1,2,3
Fire Marshal 1,2,3
Battalion Chief 1,2,3
EMS Chief 1,2,3
Police Department
Police Chief 1,2,3
Police Captain 1,2,3
Information Technology Director 1,2,3
Police Support Services Manager 1,2,3
Public Services
Public Services Director 1,2,3
Public Services Administrative Manager 1,2,3
Community Services
Program Administrator 1,2,3
Recreation Manager 1,2,3
Community Services Supervisor 1,2,3
Older Adult Services Supervisor 1,2,3
Senior Recreation Supervisor 1,2,3
Maintenance Manager 1,2,3
Maintenance Services Coordinator 1,2,3
Environmental Services Manager 1,2,3
Environmental Services Administrator 1,2,3
Engineering and Utilities
Deputy Director for Engineering/City Engineer 1,2,3
Deputy Director for Utility Services 1,2,3
Utility Systems Operations Manager 1,2,3
-Senior Project Manager 1,2,3
-Senior Civil Engineer 1,2,3
-Supervising Civil Engineer 1,2,3
Successor Agency to the Morgan Hill Redevelopment Agency Board Members 1,2,3 Morgan Hill Financing Authority Board Members 1,2,3
Morgan Hill Wastewater Facilities Financing Corporation Board Members 1,2,3 Library, Culture & Arts Commissioners 1,2,3
Parks and Recreation Commissioners 1,2,3
Parking Authority of the City of Morgan Hill 1,2,3
Consultants* 1,2,3
*Consultants shall be included in the list of designated employees and shall disclose pursuant to Category 1, 2, and 3, based on the scope of work performed for the City of Morgan Hill, in consultation with the City Attorney.

City of Morgan Hill
Resolution No. 22-0XX

EXHIBIT B

CONFLICT OF INTEREST CODE FOR

THE CITY OF MORGAN HILL
The Political Reform Act, Government Code Sections 81000, et seq., requires state and local government agencies to adopt and promulgate conflict of interest codes. The Fair Political Practices Commission has adopted a regulation, Title 2, California Code of Regulations, Section 18730, which contains the terms of a standard conflict of interest code which can be incorporated by reference, and that may be amended by the Fair Political Practices Commission to conform to amendments in the Political Reform Act after public notice and hearings. Therefore, the terms of Title 2, California Code of Regulations Section 18730, and any amendments to it duly adopted by the Fair Political Practices Commission, are hereby incorporated by reference. These terms, along with the attached Appendix which designates officials and employees subject to the code and disclosure categories, constitute the Conflict of Interest Code of the City of Morgan Hill.

Pursuant to Section 4 of the Standard Code, designated employees, boards, and commissioners shall file statements of economic interests with the City of Morgan Hill - City Clerk. The City Clerk is to retain these statements. Upon receipt of the statements of the members of the City Council, City Manager, City Attorney, City Treasurer, and members of the Planning Commission; the City Clerk of the City of Morgan Hill shall make and retain a copy and forward the original of these statements to the Fair Political Practices Commission.

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

Cynthia Iwanaga, Management Analyst
APPROVED BY: City Manager

APPROVE FIRST AMENDMENT TO THE BATTALION ONE FIRE

PROTECTION MAINTENANCE SERVICE AGREEMENT

RECOMMENDATION(S)

1. Approve the first amendment to the maintenance service agreement with Battalion One Fire Protection, Inc. for an additional year of services for $17,969, for a total contract amount of $60,179; and

2. Authorize the City Manager to execute and administer two additional one-year extensions of the maintenance service agreement.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety
2022-2023 Strategic Priorities
Fiscal Sustainability
REPORT NARRATIVE:

The purpose of this report is to provide the City Council with an opportunity to consider a First Amendment to the City's maintenance service agreement with Battalion One Fire Protection, Inc. for fire protection sprinkler inspections, testing, maintenance, and repair services at City facilities.

The City has contracted with Battalion One Fire Protection, Inc. since January 1, 2021 to provide quarterly, annual, and five-year fire protection sprinkler inspections, testing, and maintenance services at City facilities including the City Hall campus, Community and Cultural Center campus, Centennial Recreation Center, Aquatics Center, Corporation Yard, Downtown Parking Garage, and the Depot Train Station. Repair services are also provided via an extra services allocation of $10,000 per year. In October 2020, the City released a Request for Bids (RFB) for these services. Seven proposals were received, and Battalion One Fire Protection, Inc. was the responsible bidder with the lowest cost proposal. The original amount of the agreement was $42,210 for two years with three additional one-year extensions. Since the amount of

4 the original agreement was below the $60,000 threshold for City Council approval, it was approved per authority of the City Manager pursuant to Chapter 3.04 of the Morgan Hill Municipal Code on December 8, 2020.

The current agreement with Battalion One Fire Protection, Inc. expires on December 31, 2022. This proposed First Amendment includes an increase of $17,969 for an additional year of service that would extend the term to December 31, 2023 and increase the total amount of the agreement from $42,210 to $60,179. This represents a 5% increase in annual costs. Since the five-year inspections have been completed for all the City facilities, they will be removed from the contract's scope of work, and the First Amendment's costs will reflect only the quarterly inspections, annual inspections, maintenance, and an allocation for extra repairs. The First Amendment would also authorize the City Manager to execute and administer two (2) additional one-year extensions of the maintenance service agreement in annual amounts that would not increase the price of the contract by more than five (5%) percent annually. The maximum not-to-exceed amount with two (2) additional one-year extensions would be $98,000.

Maintenance staff has been very satisfied with the service that Battalion One Fire Protection, Inc. has provided to date and is recommending that the First Amendment be approved to extend the agreement one year and increase the agreement amount to $60,179.

COMMUNITY ENGAGEMENT:

Not Applicable
Since fire protection sprinkler inspection, testing, maintenance, and repair services are a regular and expected City maintenance service, no specific engagement activities were conducted to inform the community about this proposed contract amendment.

ALTERNATIVE ACTIONS:

The City Council could decline to approve the First Amendment and instead direct staff to proceed with a request for proposals (RFP) for fire protection sprinkler inspection, testing, maintenance, and repair services. Since Battalion One Fire Protection's agreement expires on December 31, 2022, the City Council could authorize an extension of the contract to March 31, 2023 allowing staff time to conduct an RFP process and have a new agreement in place by April 30, 2023. This is not recommended as maintenance staff continues to be satisfied with their service, and does not believe an RFP will result in improved pricing.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The City Council has not taken prior action on this agreement. The amount of the original agreement was $42,210, therefore it was approved per City Manager authority pursuant to Chapter 3.04 of the Morgan Hill Municipal Code on December 8, 2020.

4 FISCAL AND RESOURCE IMPACT:

This contract is budgeted in and will be funded by the Public Services Department - Maintenance Services Division's budgets for the individual facilities (Fund 010 - General Fund and Fund 740 - Building Maintenance). The First Amendment would add $17,969 to the agreement, including $7,969 in annual inspection, testing, and preventative maintenance costs, and up to $10,000 in extra repair services.

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.

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

David Gittleson, Associate Engineer
APPROVED BY: City Manager
APPROVE ACQUISITION OF SEWER EASEMENT (PATEL) APN 841-
03-063 FOR THE SEWER RELIEF TRUNK LINE PROJECT

RECOMMENDATION(S)

1. Adopt resolution approving the purchase of a sewer easement (1,984 square feet), APN 841-03-063 for $27,000 plus escrow and closing costs from Jitendra and Nayana Patel for the Sewer Relief Trunk Line Project; and

2. Authorize the City Manager to execute all documents and make minor modifications as necessary in order to consummate the transaction.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety
Protecting the Environment and Preserving Open Space and Agricultural Land Maintaining and Enhancing Infrastructure
2022-2023 Strategic Priorities
Fiscal Sustainability
Guiding Documents
Morgan Hill 2035 General Plan
Wastewater System Master Plan
REPORT NARRATIVE:

Hydroscience Engineers, Inc. were initially hired in May of 2016 to design a sewer trunk line between Highland Avenue to Cohansey Avenue. The following year, City Council extended the design to Renz Lane in Gilroy, approximately seven miles in total length, to complete the full design. To date, the alignment has been approved by the City of Gilroy City Council and the plans are 90% complete. With the current alignment, there are five sewer easements that will need to be acquired by the City of Morgan Hill in order to install the sewer trunk. One easement is needed from PG&E, another by the City of Gilroy, and three easements from private citizens. This staff report focuses on one private citizen (Patel). Associated Right of Way Services is actively pursuing the remaining private sewer easements needed for the project. The City is working with

5 PG&E and the City of Gilroy to obtain those sewer easements.

In September 2021, the City notified the Patel family that a sewer easement was required for the Sewer Relief Trunk Project. In January 2022, the City made an initial offer to the Patel family for an appraised value of $18,000, which consisted of 1,984 square feet of easement. The Patel family reviewed the City's offer and countered with $27,000, citing the appraisal was more then 6 months old and that the property had development potential. Since an updated appraisal cost is $5,000 and takes a few months to prepare, staff concluded that agreeing to their offer is more efficient and avoids high condemnation costs should an agreeable amount not be reached.

Subsequently, a Property Purchase Agreement was prepared and signed by the property owner (Attachment No. 1). Staff, therefore, recommends that City Council approve the property purchase as: 1) the property is required for the project, 2) the owner is a willing seller, 3) the settlement increase is relatively small, and 4) the cost to litigate would be substantially greater. The purchase price is thus $27,000 plus escrow, closing costs, and title insurance.

COMMUNITY ENGAGEMENT:

Numerous community engagement and design meetings were held throughout the early planning and design phases of the project. In addition, the Environmental Report process also included opportunities for the community to provide input regarding the scope, content, and potential environmental impacts from the project.

ALTERNATIVE ACTIONS:

No feasible alternative options. Without the sewer easements, the City would not be able to install the sewer relief trunk line as designed. The current alignment was previously approved by the City of Gilroy. Changing the alignment now would be cost prohibitive and would not guarantee that other easements would not be required.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:
 On May 4, 2016, City Council approved a design agreement with HydroScience Engineers, Inc. for $651,760 for the preparation of design plans and specifications for the sewer trunk segment between Highland and Cohansey.  On April 19, 2017, City Council approved a First Amendment with Hydroscience Engineers, Inc. for $521,900 to accelerate the design and complete the design to Renz Lane in Gilroy.

FISCAL AND RESOURCE IMPACT:

Sufficient funds for the $27,000 sewer easement acquisition plus escrow and closing costs have been budgeted for the project. The project is budgeted in the approved

5 Fiscal Year 2022-23 Capital Improvement Program under CIP #308A08 with $3,000,000 from the Sewer Impact Fund (641).

CEQA (California Environmental Quality Act):

Not a Project
The sewer easement acquisition is not considered a project, as defined in Section 15378 of the State CEQA Guidelines. However, the Sewer Relief Trunk Line project itself is a project and requires CEQA review. David J. Powers has prepared an Initial Study to identify and mitigate all environmental impacts from the project. At the time the construction contract is awarded, City Council will be asked to adopt a mitigated negative declaration.

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF MORGAN HILL APPROVING A

PROPERTY PURCHASE AGREEMENT FOR A
SEWER EASEMENT (APN 841-03-063) FROM

PATEL, FOR THE SEWER RELIEF TRUNK LINE

PROJECT
WHEREAS, the Sewer Relief Trunk Line Project is included in the Fiscal Years 2022-23 Capital Improvement Program under CIP#308A08 with funding budgeted for purchasing right of way and design professional services. The subject property from Jitendra and Nayana Patel is required in order to construct the project, and therefore in the public’s interest to acquire a portion of the real property for the public Project (Hale Avenue Extension Project); and WHEREAS, on January 20, 2022, the City of Morgan Hill made a voluntary offer to purchase a sewer easement (1,984 square feet) from Jitendra and Nayana Patel for the appraised value of $18,000 from a state certified MAI appraiser; and
WHEREAS, on September 23, 2022, the property owners, Jitendra and Nayana Patel signed a Property Purchase Agreement for an administrative settlement amount of $27,000; and NOW, THEREFORE, City Council of the City of Morgan Hill, based upon the foregoing and all documents, statements and facts known to City Council, does hereby resolve:

SECTION 1. Approval of Property Purchase Agreement. City Council approves the Property Purchase Agreement to acquire a sewer easement (1,984 SF) for a total amount of $27,000 from Jitendra and Nayana Patel, see Attachment A. The Settlement amount of $27,000 plus the escrow and closing costs are hereby approved.

SECTION 2. Authority to City Manager. City Council authorizes the City Manager to execute the Agreement and all documents necessary to consummate the transactions contemplated therein, including without limitation, accepting the Grant Deed. City Council further authorizes the City Manager to make minor modifications to the foregoing described documents which may be necessary to consummate the transactions.

SECTION 3. CEQA.

Not a Project
The sewer easement acquisition is not considered a project, as defined in Section 15378 of the State CEQA Guidelines. However, the Sewer Relief Trunk Line project itself is a project and requires CEQA review. David J. Powers has prepared an Initial Study to identify and mitigate all environmental impacts from the project. At the time the construction contract is awarded, City Council will be asked to adopt a mitigated negative declaration.

PASSED AND ADOPTED by the City Council of Morgan Hill at a Regular Meeting held on the 16th day of November 2022 by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

APPROVED: ATTEST:
____________________________ ___________________________ RICH CONSTANTINE, Mayor MICHELLE BIGELOW, City Clerk
 CERTIFICATION 
I, Michelle Bigelow, City Clerk of the City of Morgan Hill, California, do hereby certify that the foregoing is a true and correct copy of Resolution No. xx-xxx, adopted by the City Council at a regular meeting held on November 16, 2022.

WITNESS MY HAND AND THE SEAL OF THE CITY OF MORGAN HILL.

DATE: _____________________ _______________________________ MICHELLE BIGELOW, City Clerk

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

Cynthia Iwanaga, Management Analyst
APPROVED BY: City Manager

APPROVE SECOND AMENDMENT TO THE JOINT VENTURE SILICON

VALLEY CONSULTANT AGREEMENT FOR THE COUNTYWIDE SOLID

WASTE SERVICES PROGRAM

RECOMMENDATION(S)

1. Approve the Second Amendment to the Consultant Agreement with Joint Venture Silicon Valley to add Special Projects for $49,324 for a revised total contract amount of $399,324; and

2. Authorize the City Manager to execute and administer the Second Amendment to the Consultant Agreement with Joint Venture Silicon Valley.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Protecting the Environment
REPORT NARRATIVE:

The purpose of this report is to provide the City Council with an opportunity to consider a Second Amendment to the City's Consultant Agreement with Joint Venture Silicon Valley (JVSV) that would add special projects to the agreement's scope of work for the administration and implementation of Santa Clara County's Countywide Food Recovery Program (FRP).

In 2019, the Santa Clara County Recycling and Waste Reduction Commission (RWRC) voted to fund JVSV to develop, launch and facilitate the Countywide Food Recovery Program (FRP) to comply with SB 1383 food recovery requirements. The FRP is responsible for providing documentation to support participating jurisdictions with SB 1383 compliance, educating commercial food generators, increasing commercial food generators' access to food recovery organizations and food recovery services, monitoring commercial edible food generators' compliance with SB 1383, and increasing food recovery capacity if they do not have sufficient capacity.

In July 2021, City of Morgan Hill staff began providing Technical Advisory Committee (TAC) Administrator and Contracting Agent roles for administering the work of the

6 RWRC as Countywide Solid Waste Services. As contracting agent, the City of Morgan Hill entered into an agreement with JVSV for $300,000 to administer and implement Santa Clara County's Countywide Food Recovery activities through June 30, 2023.

In June 2022, the City entered into a First Amendment with JVSV to incorporate Inspection Program services for the Food Recovery Program in the amount of $100,000 for FY 2022-2023, and remove $50,000 for extra services from the contract resulting in a revised contract amount of $350,000.

On October 13, 2022, the County RWRC Implementation Committee voted to award an additional $49,324 to JVSV to implement special projects to enhance food recovery efforts in Santa Clara County. The proposed Second Amendment will add the special projects' scopes of work, which is both the development of a detailed scoping plan for commercial food waste prevention, and food recovery solutions designed to amplify the food waste reduction impacts of SB 1383 implementation. The food recovery solutions may include promoting existing technologies, building new partnerships and collaborations, and/or launching new projects and pilots, with an eye towards making Santa Clara County a leader in using innovative approaches to maximize the efficiency and effectiveness of food waste prevention and food recovery efforts.

The scoping plan will build on best practices and success stories within and beyond Santa Clara County, with a special focus on aligning with the best practices that other California counties are using to expand food recovery in response to SB 1383. It will be especially valuable in identifying solutions for recovering prepared foods as Tier Two Edible Food Generators (e.g.,restaurants, health facilities, education facilities, hotels, and large event venues) will begin to comply with SB 1383 on or before January 1, 2024.

Staff recommends entering into the Second Amendment with Joint Venture Silicon Valley to incorporate special projects into the Santa Clara County Food Recovery Program to enhance the countywide food recovery efforts in the amount of $49,324 for FY 2022-23, resulting in a total revised contract amount of $399,324.

COMMUNITY ENGAGEMENT:

Not Applicable
The subject of this staff report is entirely administrative in nature, and does not impact services directly provided to the Morgan Hill community. Given this, no community engagement was conducted prior to this meeting.

ALTERNATIVE ACTIONS:

The City Council could decline to approve the Second Amendment, which would leave the Santa Clara County FRP without a consultant to administer the special projects that would enhance food recovery in Santa Clara County.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The original Consultant Agreement was approved via City Manager authority on June

6 30, 2021. The City Council approved the First Amendment to the Agreement on June 1, 2022. Per Ordinance 2321, purchases up to $300,000 can be made under the City Manager's purchasing authority if they were made exclusively with countywide funds for the administration of the waste management program.

FISCAL AND RESOURCE IMPACT:

The funding for the addition of the special projects to the Joint Venture Silicon Valley Consultant Agreement is included in the Fund 246 contract services line item of the Countywide Solid Waste Administration Services in the Recommended Budget for FY 2022-23. Funding for this program is obtained from solid waste fees that are collected countywide and transferred to the City to utilize in supporting this countywide service.

CEQA (California Environmental Quality Act):

Not a Project
The activities associated with this item are administrative activities that will not result in direct changes to the physical environment.

1 SECOND AMENDMENT TO AGREEMENT

JOINT VENTURE SILICON VALLEY
This SECOND AMENDMENT TO AGREEMENT is entered into and becomes effective on ______________________ (Effective Date), by THE CITY OF MORGAN HILL, a municipal corporation, in its capacity as contracting agent on behalf of the County of Santa Clara Recycling and Waste Reduction Commission Implementation Committee ("CITY") and JOINT VENTURE SILICON VALLEY, a California non-profit corporation ("CONSULTANT"), hereinafter referred to collectively as the “Parties".

RECITALS
The following recitals are a substantive part of this Agreement:

1. This Second Amendment to Agreement is entered into pursuant to the action of the Morgan Hill City Council taken on ____________________, 2022.

2. The CITY and CONSULTANT entered into that “Consultant Agreement” made as of June 30, 2021, for consultant services for a maximum compensation of Three Hundred Thousand Dollars ($300,000.00) (“CONSULTANT AGREEMENT”).

3. The CITY and CONSULTANT entered into a “First Amendment to Agreement” made as of June 16, 2022, under which the maximum compensation under the CONSULTANT AGREEMENT, as amended, was increased to Three Hundred Fifty Thousand Dollars ($350,000.00) and extended the term until December 31, 2022. The CONSULTANT AGREEMENT and the First Amendment thereto are attached as Exhibit “1” to this Agreement.

AGREEMENT
THE PARTIES MUTUALLY AGREE AS FOLLOWS:

1. Amendments: All terms and conditions of the CONSULTANT AGREEMENT, as amended, as attached as Exhibit "1,” shall remain in full force and effect; except that the following amendments shall be made as set forth below:
$. Paragraph 3. Scope of Service shall be amended by adding “Exhibit A Additions To Scope of Services as of 2FWREHU 13, 2022,” attached hereto and incorporated herein by this reference.
%. Paragraph 4.1 is amended and replaced in its entirety by the following:
"4.1. Amount. Compensation under this Agreement shall not exceed THREE HUNDRED

NINETY-NINE THOUSAND THREE HUNDRED TWENTY-FOUR DOLLARS
($399,324.00) and shall be billed based on the rate and basis set forth in Exhibit B, Exhibit B Additions to Schedule of Compensation Rates as of July 1, 2022, and Exhibit B Additions to Schedule of Compensation Rates as of 2FWREHU 13, 2022, attached hereto, and incorporated herein by this reference.”
&. Paragraph 6. Performance of Work shall be amended by adding “Exhibit C Additions to Schedule of Performance as of 2FWREHU 13, 2022,” attached hereto, and incorporated herein by this reference.

2 2. 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.

3. Conflicts. In the event of a conflict between the terms and provisions of this Second Amendment to Agreement and the terms and provisions of the CONSULTANT AGREEMENT or any earlier amendment, the terms of this Second Amendment to Agreement shall govern and control.

TWO SIGNATURES ARE REQUIRED FOR 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
Michelle Bigelow, City Clerk Christina Turner, City Manager Date: Date:

APPROVED AS TO FORM:

Donald Larkin, City Attorney

JOINT VENTURE SILICON VALLEY
By:

By:

Date: Title:

Date:

Print Name and Title of Signer.

If Corporate: Chairman, President,
or Vice President
By:

Title:

Date:

Print Name and Title of Signer.

If Corporate: Secretary, Assistant
Secretary, Chief Financial Officer, or
Assistant Treasurer
October 21, 2022

EXHIBIT A

ADDITIONS TO SCOPE OF SERVICES
As of October 13, 2022
Santa Clara County Food Recovery Program
FY 22-23 Special Projects to Enhance Food Recovery:

Scoping Plan for Commercial Food Waste Prevention and Food Recovery Solutions Joint Venture Silicon Valley will expand the scope of services for the Consultant Agreement to administer and implement Santa Clara County’s SB 1383 Food Recovery Program countywide activities to include Special Projects to Enhance Food Recovery and related deliverables for the additional cost of $49,324.00 per the Revised Exhibit B-Schedule of Compensation.

Additional scope of work between Joint Venture Silicon Valley and Morgan Hill approved by the Recycling and Waste Reduction Commission Implementation Committee on October 13, 2022.

Scope of Work
In alignment with Strategy 6.4 of the County of Santa Clara County Food System Workplan, and using the goals and recommendations laid out in Making the Most of Surplus Food in Santa Clara County as a guide, Joint Venture will develop a detailed plan for commercial food waste prevention and food recovery solutions designed to amplify the food waste reduction impacts of SB 1383 implementation. These solutions may include promoting existing technologies, building new partnerships and collaborations, and/or launching new projects and pilots, with an eye toward making Santa Clara County a leader in using innovative approaches to maximize the efficiency and effectiveness of food waste prevention and food recovery efforts.

The scoping plan will build on learnings, best practices and success stories within and beyond Santa Clara County, with special focus on aligning the best practices other California counties are using to expand food recovery in response to SB 1383. As an example, the scoping plan will include the solution of providing capacity building grants for refrigeration being pursued in neighboring counties.

The scoping plan will also be especially valuable in identifying solutions for recovering prepared foods, an area ripe for new solutions which is expected to grow as Tier Two Edible Food Generators begin to comply with SB 1383 on or before January 1, 2024. As an example, the scoping plan will include the solution of using emerging technologies and services to distribute surplus food, efficiently and cost-effectively, directly from Tier 2 businesses and organizations, reducing pressure on the traditional food recovery sector.

The Santa Clara County Food Recovery Steering Committee will serve as the advisory body for this project. The Steering Committee will meet regularly to vet potential solutions and build the necessary connections within the County to help the work progress. The Steering Committee membership, structure and mandate are currently being reconfigured as it has completed its role in overseeing the creation of the Santa Clara County Food Recovery Program, a process that will be completed by December 2022.

Joint Venture will track progress as the scoping plan is developed and as solutions, projects and pilots are launched, in Airtable, a cloud-based platform that enables stakeholders to contribute and track updates in real-time.

EXHIBIT B

ADDITIONS TO SCHEDULE OF COMPENSATION RATES
As of October 13, 2022
Activity FY 2022-23
Staff Time: Project Lead – Supervise external contractor, and any pro bono student teams engaged to complete research and review; establish criteria for inclusion in the scoping plan; prepare deliverables $24,139
Staff time: Director – Program Management $7,320
Contractor Time: Conduct research and review of solutions (including apps, programs, resources) nationwide $7,000 Travel: Program Director – Conduct site visits as needed (mostly in the Bay Area) to assess solution feasibility for SCC $1,000 Program Overhead $9,865
Total $49,324
Summary of Revised Contract Amount Per Second Amendment:

Description Amount
ORIGINAL CONSULTANT AGREEMENT AMOUNT:

Food Recovery Program FY 21-22 and 22-23 @
$250,000 and Extra Services @ $50,000 $300,000
First Amendment deleted $50,000 for Extra Services ($ 50,000) First Amendment added $100,000 for Year 2: FY 22-
23 Monitoring/Inspection Program $100,000
FIRST AMENDMENT AMOUNT: $350,000
Second Amendment added $49,234 for Special Projects to
Enhance Food Recovery $ 49,324
SECOND AMENDMENT AMOUNT $399,324

EXHIBIT C

ADDITIONS TO SCHEDULE OF
PERFORMANCE As of October 13, 2022
Additional Deliverables for Special Projects to Enhance Food Recovery: Scoping plan for Commercial Food Waste Prevention and Food Recovery Solutions Fiscal Year 2022-2023.

1. A fully scoped plan listing the solutions that tie to Making the Most recommendations can enhance the infrastructure and long-term stability (beyond state-mandated programs) of commercial food waste prevention and food recovery in Santa Clara County. Each solution will be scoped to include the following elements, supported where possible with data, case studies, and success stories:
a. A detailed description of the solution and plans for piloting or launching it locally
b. Recommendations for partners and collaborators who can provide the expertise, experience and resources required
c. Proposed budgets/estimated funding levels required
d. Potential funders, funding sources and/or funding models e. Proposal sketches

2. Written proposals and funding solicitations for at least two of the solutions, utilizing any funding the RWRC may be able to dedicate as “matching” funds.

Deliverables will be submitted by June 30, 2023.

DocuSign Envelope ID: OFFOF417-E78E-48D7-BOOB-036892C26552

FIRST AMENDMENT TO AGREEMENT

JOINT VENTURE SILICON VALLEY
This FIRST AMENDMENT TO AGREEMENT is entered into and becomes effective on 6/16/2022 (Effective Date), by THE CITY OF MORGAN HILL, a municipal corporation, in its capacity as contracting agent on behalf of the County of Santa Clara Reduction and Solid Waste Commission Implementation Committee ("CITY") and JOINT VENTURE SILICON VALLEY, a California non-profit corporation ("CONSUL TANT").

RECITALS
The following recitals are a substantive part of this Agreement:

1. This First Amendment to Agreement is entered into pursuant to the action of the Morgan Hill City Council taken on June , _1_, 20_R.

2. The CITY and CONSULTANT entered into that "Consultant Agreement" made as of June 30, 2021, for consultant services for a maximum compensation of Three Hundred Thousand Dollars ($300,000.00) ("CONSUL TANT AGREEMENT"). The CONSUL TANT AGREEMENT is attached as Exhibit "1" to this Agreement.

AGREEMENT
THE PARTIES MUTUALLY AGREE AS FOLLOWS:

1. Amendments: All terms and conditions of the CONSULTANT AGREEMENT, as amended, as attached as Exhibit "1," shall remain in full force and effect; except that the following amendments shall be made as set forth below:

A. Paragraph 3 Scope of Service shall be amended by adding "Exhibit A Additions To Scope of Services as of July 1, 2022", attached hereto and incorporated herein by this reference.

B. Paragraph 4.1 is amended and replaced in its entirety by the following:
"4.1. Amount. Compensation under this Agreement shall not exceed THREE HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($350,000.00) and shall be billed based on the rate and basis set forth in "Exhibit B" and "Exhibit B Additions to Schedule of Compensation Rates as of July 1, 2022". If the City Manager extends the term of this Agreement for up to one year 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 CONSUL TANT, 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 the term exceed the City Manager's authority pursuant to Chapter 3.04 of the Morgan Hill Municipal Code, unless otherwise authorized by City Council."
C. Paragraph 6 Performance of Work shall be amended by adding the "Exhibit C Additions to Schedule of Performance as of July 1, 2022", attached hereto and incorporated herein by this reference."
Signatures on the Next Page
128-04-21-054

DocuSign Envelope ID: 0FF0F417-E78E-4BD7-B00B-036892C26552

2. Conflicts. In the event of a conflict between the terms and provisions of this First Amendment to Agreement and the terms and provisions of the CONSUL TANT AGREEMENT, the terms of this First Amendment to Agreement shall govern and control.

TWO SIGNATURES ARE REQUIRED FOR CORPORATIONS:
(1) CHAIRPERSON OF THE BOARD, PRESIDENT, OR VICE PRESIDENT; AND (2) SECRETARY, ASSISTANT SECRETARY, CHIEF FINANCIAL OFFICER, OR ASSISTANT TREASURER.

ATTEST:

Date: 6/16/2022
APPROVED AS TO FORM:

Donald Larkin, City Attorney
GOocuSlgned by:

By: �t,Mf,1 (.Af1:ikv
5E6F0273EA2464 ...

Date: 6/8/2022
2 CITY OF MORGAN HILL
• tmiA�m�r. City Manager
Date: 6/16/2022

JOINT VENTURE SILICON VALLEY
Title:

By:
1�
Russell
President
Hancock
&
�
CEO
Print Name and Title of Signer.

If Corporate: Chairman, President or
Vice President
Date:
��
May 10, 2022
By: Michael Greco
Title: --------------
CFO
Print Name and Title of Signer.

If Corporate: Secretary, Assistant
Secretary, Chief Financial Officer or
Assistant Treasurer
Date: May 10, 2022

DocuSign Envelope ID: 0FF0F417-E78E-4BD7-B00B-036892C26552

EXHIBIT A

ADDITIONS TO SCOPE OF SERVICES
As of July 1, 2022
Santa Clara County Food Recovery Monitoring Program and Deliverables Joint Venture Silicon Valley will expand the scope of services for the Consultant Agreement to administer and implement Santa Clara County's SB 1383 Food Recovery Program countywide activities to include a monitoring program and related deliverables for the additional cost of $100,000 per the Revised Exhibit B-Schedule of Compensation.

Additional scope of work between Joint Venture Silicon Valley and Morgan Hill approved by Recycling and Waste Reduction Commission on December 15, 2021.

Monitoring Program and Deliverables
o Solicit, collect and synthesize Tier One and Food Recovery Organization and Services Food Recovery Program Reports for both the August 1, 2022 reporting date and the May 1, 2023 reporting date. o Prioritize the Inspection Prioritization List, deciding which non-compliant entities should be inspected based on potential volume of recovered food o Complete at least 10% of Tier One Entity in-person inspections, and at least 23 virtual inspections (these may be either first-time inspections, or follow up inspections to confirm compliance)
o Should any city receive a complaint about a regulated entity, Joint Venture will take all necessary steps, short of enforcement, to ensure compliance, in accordance with state law SB 1383
o Communicate with jurisdictions, in accordance with the Program Overview, Responsibilities Section, to monitor regulated entities as needed and refer them to the jurisdiction for enforcement if necessary. o Design and send mailings necessary for the program: yearly educational notices, noncompliance notices, other notices as appropriate

DocuSign Envelope ID: OFFOF417-E78E-4BD7-BOOB-036892C26552

EXHIBIT B

ADDITIONS TO SCHEDULE OF COMPENSATION RATES
As of July 1, 2022
Activity FY 2022-23
Inspection Program support: lpad, hotspot
subscription, insurance, workers comp, trainings,
travel, other tech support if needed $5,000
Inspector Staff time $30,000
Mailings -- yearly edu/enforcement notices and staff
time to create/follow up $2,000
Staff time -- Program Director $26,000
Data collection tool, staff time building necessary
add-ons, data strategy, and methodology $17,000
Overhead $20,000
Total $100,000
JVSV will no longer need the added $50,000 initially allocated and specified in the original contract for undetermined additional scope of services (extra services). Total compensation for July 1 2021 through June 30, 2023 not to exceed $350,000.
s ummary o fR
Description
ev,se d C t on rac tA
Year 1 and Year 2: FYs21-22 and 22-23:
moun
Food Recovery Program Scope of Work #1 to
#6
tP er F 1rs tA men
Amount
$250,000
Year 1 and Year 2: $50,000 Extra Services: Delete $0
Year 2: FY 22-23: Monitoring/Inspection
Program $100,000
REVISED FIRST AMENDMENT AMOUNT $350,000
d men: t

DocuSign Envelope ID: 0FF0F417-E78E-4BD7-B00B-036892C26552

EXHIBIT C

ADDITIONS TO SCHEDULE OF PERFORMANCE
As of July 1, 2022
Additional Deliverables for Monitoring and Inspection Program to be delivered between July 1, 2022 and June 30, 2023.
o Solicit, collect and synthesize Tier One and Food Recovery Organization and Services Food Recovery Program Reports for both the August 1, 2022 reporting date and the May 1, 2023 reporting date. o Prioritize the Inspection Prioritization List, deciding which non-compliant entities should be inspected based on potential volume of recovered food o Complete at least 10% of Tier One Entity in-person inspections, and 23 virtual inspections (these may be either first-time inspections, or follow up inspections to confirm compliance)
o Should any city receive a complaint about a regulated entity, Joint Venture will take all necessary steps, short of enforcement, to ensure compliance, in accordance with state law SB 1383
o Communicate with jurisdictions, in accordance with the Program Overview, Responsibilities Section, to monitor regulated entities as needed and refer them to the jurisdiction for enforcement if necessary. o Design and send mailings necessary for the program: yearly educational notices, noncompliance notices, other notices as appropriate

DocuSign Envelope ID: 0FF0F417-E78E-4BO7-B00B-036892C26552 EXHIBIT 1
CONSULTANT AGREl:MENT
Joint Venture Silicon Valley
THIS AGREEMENT is entered into and becomes effective on 6/,30/2021 (Effective Date), by· and between the CITY OF MORGAN HILL, a municipal corporation, in its capacity as contracting agent on behalf of the County of Santa Clara Reduction and Solid Waste Commission Implementation Committee ("CITY"), arid Joint Venture -Silicon Valley a California nonprofit corporation ("CONSULTANT") hereinafter referred to collectively as ''Parties." In consideration of the promises and the mutua! oovenants contained jn this Agreement, the Parties agree as follows:
1 . City Authority. This Agreement Is entered into pursuant to the authority of the City . Manager pursuant to Chapter 3.04 of the Morgan Hill Municipal Code.

2. Term -of Agreement. This Agreement shall cover servlGes rendered from the Effective Date of this Agreement unHI June 30, 2023 �t which time CONSULTANT'S services .shql.l be cpmpletea. The City .Manager is authorized to extend the term of this Agreement for a maximum period of ane year. 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 CONSULTANT shall be administratiQr't and implementation of Santa Clara County SB 1383 Food Recovery Program countywide activities as further desGribed in Exhibit A.

4. Compensation. CONSULTANT,shall be compensated as follows:

4.1. Amount. $300,000.00. "Total compensation . to CONSULTANT under this Agreement during its Initial term set forth in Section 2 above st:lall not exceed Three Hundred Thousand dollars and shall be billed pased on the rate and basis set forth in Exhlbit B. If the City Manager extends the t�rm of thts Agreement for up to one year pur.suant to the provisions of Section 2 above, the City Manager shall have the a1,1thority to increas� the maxirnum compensation allowed to be paid to· CONSULTANTf so long as_ City Councll has appropriated sufficient funds therefor, the Parties mutually agree fo such amount.in a writing signed by both Parties to this Agreement anc;I provided ,further that in no event shall -such maximum compehsatk>n allowed for the term exceed the City Manager's- authority pursu.ant lo Chapter 3.04 of the Morgan Hill Municipal �ode, unless qtherwise authorized by City Council.

4.2. Billing. CONSULIANT sba1I provide ClTY with an invoice containing the dated, detailed, and itemized .descriptions of c!II services petfoi:med and· expenses 1ncurred (if s1:1ch expenses are reimbursable pursµarit to Exhibit B) by CONSULT ANT on a monthly basis unless otherwise specified in Exhiblt.B. All invoices shall be sentt0 the CITY addressed to the department head or project manager identified belpw in Section 13 Notices. Any rate charged shall be. protated where services are interrupted dr not provided for any rate period (for example, any month\y rate char:ge should be pror�ted when setvices 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. ClTY sl)a\\ pay fi!>r serifices and expenses {if so provided' in Exhibit B) Up to the limit ·of compensation set forth above, that in the CITY's judgment were necessaJiy anti reasonable. Services for work perfonned and expenses incurred in excess pf the total compensation set forth in paragraph 4 .. 1 above shall be at no cost to CITY.

5. Termination. CITY or CONSUL TANT shall have the right to terminate this Agreement, without cause, by giving fhirty (30) days' written notice or less under urgent circumstances. Upon such term1ination, CONSUL TANT shall submit to CITY an itemized statement of services performed for which compensation 1 Upi:lated March 2021

has not been paid. CITY may require CONSUL TANT to complete certain work product or documents and CONSULTANT shan deliver to CITY a11 documents in its possession without additional compensation to CONSUL TANT. The City Manager of CITY is authorized to terminate this Agreement, in whole or in part, on behalf of CITY.

5.1. Non-Appropriations. Notwithstanding anything contajned in this Agreement to the . contrary, if insufficient fl.Inds 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 CONSULTANT 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 ar:e otherwise available for payments.

6. Performance of Work. CONSUL TANT represents that it is qualified by virtue of experience, training, educatior:i, and expertise to accomplish these services. Services shall be performed by CONSULTANT in accordance With professional practices in a manner consistent with a level of care, competence and skill exercised by qualified members of the CONSULT ANT'S professjon. By delivery of completed work, CONSULT ANT certifies that the work conforms to the requirements of this Agreement and all applicable federal, state and loca.l laws. CONSULTANT shall perform all work and services under this Agreement in conformance with the time schedule set forth on Exhibit C, "Schedule of Performance," attached hereto and incorporated herein by this r,eference. CITY's 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. If CONSUL TANT desires to leave or store any of CONSUL TANT's equipment at a CITY site while CONSULTANT is performing work or service pursuant to this Agreement, CONSULT ANT will first obtain the consent of CITY's City Manager, or his/her de.legate, to do so, .and any su0h storage shall occur only· in the manner and location allowed by such CITY official and entirely at CONSULT ANT's sole risk.

7. Insurance Requirements. CONSUL TANT 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 CONSULTANT, 1ncluding ils subcontr.aGtors, employees and agents, relating to or arising from the performance of any work or service under this Agreement, and must remaiA 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 q 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 retentipns must be declared to and -approved by City. CONSUL TANT further understands that the CITY reserves the right to modify the Insurance.requirements set forth here'in, with thirty (30) days' netice provided to CONSULTANT, at any time as deemed riece.ssary to protect the interests of the CITY.
7 .1. Insurance Types and Amounts.

7.1.1. C0mmercial General Liabllitv (CGU. CONSULTANT 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 limitfor any one aecide.nt or occurrence, or (ii) the maximum amount of such insurance available to CONSUL TANT under CONSULTANT's combined insurance policjes (including any excess or •·umbrella" policies), Whichever is greater.

7.1.2. Automobile Liability. CONSUL TANT shall maintain Allfomobile liab1lity covering all owned, non-owned and hired automobiles (if CONSULTANT does not own automobiles, then CONSUL TANT shall maintain Hired/Non-owned Automobile LiabiliW) against _ claims and liabilities for personal injury, death, or property damage 2 updated March 2021

DocuSign Envelope ID: 0FF0F417-E78E-4BD7-B00B-036892C26552 providing protection in the minimum amount of: (i) one million dollars ($1,000,000.00) combined single limit for any one accid.e.nt or occurrence, or (ii) the maximum amount of such Insurance availabfe to CONSULTANT under CONSUL TANT's combined insur�nce policies (incJOping any excess or ''umbrella" policies), whichever is greater. 7 .1.3. Workers' Compensation Insurance and Employer's Liability. CONSUL TANr shall ,maintain Workers Compensation coverage, as required by law, in the n,in'imum. amount of: (i) one million dollars ($1,000,000.00) for any one accident or occurrence, or (ii) the maximum amount of such insurance avaflable to CONSUL TANT under CONSlJLTANT's combined insurance policies (including any excess or "umbrella'' policies), whichever is greater. If CONSULTANT is seif-insured, CONSUL TANT shall provide its Certificate of Permission to.Self-lrisur:e, duly authorized by the D�partrnent of Industrial Relations.

7.1.4. Pollution (Environmental) Liability. lf the pe.rforrnance of CONSULTANT'S work or service under ·this Agreement involves haz,:1rdous material�, contaminated soil disposal, and/or a risk of aceidental release of fuel oil., chemicals or ether toxic gases or hazardous materials, CONSUL TANT shall procure and maintain Pollu.tion liability covering the CONSULTANTS liability for bodily injury, prop!;!rty damage and environmental damage re.sulti'ng from pollution and related cleanup costs arising out of the worJ<, or serviGes to be p�rf.om,.ed under this Agreement. Coveta9e shall be provided fo.r beth 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 dollats (.$1,000.,000.00) for any- one accident or occurrence, or (ii) the maximum amount of ,such insurance available to CONSULTANT under CONSULTANT's combined insurance! policJes (including any excess or \1mbrella" policies), whichever is greater. 7 .1.5. Professional Liability.

7.1.5.1. If the perf0rmance of CONSt.:ILTANT's work or service under this Agreement 1nv0Nes professional qnd/or technical �ervices (examples include, but.are not limit!=!d to, architects, engineers, land surveyors, and �ppraisers), CONSULTANT shall procure and maintain either a claims made pr occurrenoe Errors and Omission liability insurance in the minimum amount of: (i} one million dollars ($1,000,000.00) eaoh claim, or (ii) the rnax_imum amount of such insurance avaijable to CONSUL TANT under CONSULTANT's combined insurance policies (in.eluding any excess or ''umbrella'' policies), whichever is greater. Further, if CONSUL TANT maintains a ciaims-made policy, CONSU� TANT shall provide written eViden.ce of such insurance ,to the Cl1Y for at leas1 five (5) years after the completion of work performed under this Agreement.
7,1.5.2. If the petform�nce of CONSULTANT's work or service under this Agreement relates to Information Technology or related services (examples include, but are not limited to computer programmers, software designers, hardware engineers, or other systems consultants)., CONSUL TANT shall procure and maintain a claims made Errors and Omission liability ihsurance, including Cyber Liability and Datp 'Breach, in the minimum .amount of: (i) one million .dollars ($'1,000,000.00) each claim, or (ii), the maximum amount of .such il'ls�mmce available to CONSUL TANT under CONSUL iANT's combined insurance policdes (including any excess or "1;1rnbre1Ja" policies), whichevA;ir is greater.
3 Updated March 2021

DocuSign Envelope ID: OFFOF417-E78E-48D7-BOOB-036892C26552 7 .1.6. Sexual Abuse/Molestation Liability (SMU: If the performance of CONSUL TANT's work or ser:vice under this Agreement Involves contact with minors, CONSULTANT 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 CONSUL TANT under CONSULTANT's combined insurance policies (inaludihg any excess or "umbrella� policies), whichever is greater.

7.2. Endorsements. CONSULTANT shall proVide proof of the following endorsements, Jisted for each policy for which endorsements are required, as outlined below:

7.2.1. General Liability and pollution liability (when pollution liability applies). 7 .2.1.1. The City of Morgan Hill, jts elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers are named as additional insureds;

7.2.1.2, The 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; and,
7 .2.1.3. Insurance shall be primary non-contributing.

7.2.2. Workers Compensation.

If the performance of CONSULTANT'S work or service under this AgreemeAt involves access to or activity on any property or premises owned or occupied by the CITY, including, but not lirnited to, CONSULTANrS 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.
7 .3. Qualification of Insurers. All insur-ance required pl)rsuant 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 CeJifornia, 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. 7A. Certificates. CONSUL TANT shall furnish CITY of Morgan Hill with copies of all certificates as outlined herein, whether new or modified, promptly upon receipt. In the event of a claim or:
legal action, CONSUL TANT shall promptly fumish CITY of Morgan Hill with copies of all policies outlined t:ierein. No policy subjecno the CONSULTANT's agreement with the CITY sh�II 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 nqn-compliance wi� any lnsura,rice requirements in this section 7. Certificates, including renewal certificates, may be malled electronically to [email protected] or delivered to the Certificate Holder address provided herein.

Certificate Holder address:

City of Morgan Hill
Attn: Risk Management
17ff75 Peak Avenue
Morgan Hill, CA 95037
4 Updated March 2021

OocuSign Envelope ID: OFFOF417-E78E-4B07-BOOB-036892C26552

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

9. Compliance with Law.

9.1. CONSUL TANT and its office-rs, employees, agents, and subcontractors, shall comply with all appUcable· laws; ordinances, administrative regulations, arid permittrng requirements in ·carrying out their obligations under this Agreement. CONSULT ANT 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 disabilit
y, medical condition, or ancestry, in any activity .pursuant to this Agreement.

9.2. Compliance with Wage and Hour Laws: Consultant, and any subcontractor it employs to complete work under this Agreement, shall comply with all applicable federaf, 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 oi this Section, a "final judgment, deeision, 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 Department of Labor, the California Division of Labor Standards Enforcement, or any other governmental enfity or division tasked with the investigation and enforc ement of wage and
hour laws.

Prior Judgments against CONSUL TANT and/or its Su@contrae::ters: BY SIGNING "TTHIS AGREEMENT, CONSUL TANT AFFIRMS THAT IT HAS DISCLOSED #JY FINAL

JUDGMENTS, DECISIONS OR ORDERS FROM A COURT OR INVESTIGATORY GOVERNMENT AGENCY FINDING- IN THE FIVE (5) YEARS PRIOR TO EXECUTING THIS

AGREEMENT-THAT CONSULTANT OR ITS SUBCONTRACTOR(S) HAS VIOLATED ANY APPLICABLE WAGE AND HOUR LAWS. CONSULT,ANT FURTHER AFFIRMS THAT IT OR lTS 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 govemment agency issues a final judgment, decision or order finding that CONSULTANT or an subcontractor it employs to perform work under this Agreement has violated any applicable wage· and hour law, or CONSULT ANT learns of-such a judgment, decision, or order that was not previously disclosed, CONSULTANT 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, de.cision or ·order. CONSUL TANT 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. The City reserves the right to require CONSULTANT to·enter into an agreement with the City regarding the manner In which any sllch final judgment, decision, or order will be satisfied.
5 Updated March 2021

DocuSign Envelope ID: 0FF0F417-E78E-4BD7-B00B-036892C26552 City's Right to Withhold Payment: Where CONSUL TANT or any subcontractor it employs to perform work under this Agreement has been found in violation of any applicable Wijge and hour Jaw by a final judgment, decision or order of a court or government agency, the City reserves the right to withhold payment to CONSUL TANT 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 Sectioh 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.

10. Independent Contractor. CONSULTANT ·is an independent contractor and not an agent or employee of CITY.

11. Confidentiality. All data, documents, or other information received by CONSUL TANT from CITY or prepared in connection with CONSULTANT'S services under this Agreement are deemed confidential and shall not be disclosed ta i:iny third party by CONSUL TANT without prior written consent 'by CITY. 12, Conflict of Interest .and Repo.rting. CONSULTANT shall at all times avoid conflict of interest. or appearance of conflict of interest in performance of this Agreement.

13. Notice$, All notices shall be personally delivered 0r mailed, via first class ma'il 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 CONSULTANT is as follows:

Joint Venture Silicon Valley
Robin Franz. Mar:tin, Executive Dir:ector, Silicon Valley Food -Recovery 84 West Santa Clara Street, Ste. 800
San Jose, CA 95113
Address of CITY is as follows:

Environmental Services Mgnr.

Cit;y of Morgan Hill
1757'5 Peak Avenue
Morgan Hill, CA 95037
with a copy to:

City Clerk
City of Mor:gan Hill
17575 Peak Avenue
Morgan Hill, CA 95037
14, Licenses, Permits and Fees. CONSULTANT 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.
6 Updated Maren 2021

OocuSign Envelope ID: 0FF0F417-E78E-4BO7-B00B-036892C26552

15. Consultant's Proposal. If applicable, this Agteement shall include CONSULTANT'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.

16. Maintenance of Records.

16.1. Maintenance. CONSULTANT shall prepare, maintain, and preserve all reports and records that may be required by feder-al, state, and CITY rules and ordinances related to services provided under this Agreement. CONSUL TANT shall rnaintain records for a period ofat least 3 years.after rece.ipt 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 CONSULTANT shall retain said records until such action is resolved.

16.2. Access to and Audit of Record.s. The CITY shall have the right, to examine, monitor and audit all records, documents, conditions, and aGtivities of the CONSUL TANT 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 the CITY or as part of any audit ot the 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.

16.3. Ownership of Work Product. Ali documents or other information developed or received by CONSULTANT ·for work performed under this Agreement shall be the property of CITY.

CONSULT ANT shall provide CITY with copies of these items upon demand or upon termination .of this Agreement.

17. Fammarity with Wo·rk. By executing this Agreement, CONSULTANT represents that: (1) it has investigated the work. to be performed; (2) it has investigated the site of the work a110 is aware of all conditions there; and (3) it understands the difficulties and restrlctions of the work under this Agreement. Should CONSULTANT-discover any conditions materially differing from those inherent in the work or as represented by CITY, it shall immediately inform CITY and st,aU not proceed, except at CONSULTANT'S risk, until written instructions are received from CITY.

18.. Time of Essence. Time is of the essence in the perform�nce of this Agreement.

19. No Assignment. Neither this Agreement nor any portion shall be assigned by CONSUL TANT, 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 ass,ghment.

20. 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.

21. Defense -and lndemnification.

21.1. Defense and Indemnification. CONSULTANT shall, to the fullest extent permitted by law, indemnify, defend and hold harmless CITY, its eleeted Dr appointed officials, boards, a,gendes, officers, agents, empJoyees, and volun�ers ("INDEMNJrEES") 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 ari_se out of, pertain to, or relate to the performance of this Agreement or the failure to comply with any obligations 7 Updated March 2021

DocuSign Envelope ID: 0FF0F417-E78E-4BO7-B00B-036892C26552 contained in this Agreement by CONSUL TANT, and/or its agents, officers, employees, subcontractors, or independent contractors (''CLAIM").

21.2. Exceptions. CONSULTANT is not required to indemnify INDEMNITEES against liability for bodily injury, property damage or personal injury, or any other loss, damage or expense aris1ng from the sole negligence or willful misconduct of the CITY.

21.3. 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, defe11se to be provided by CONSUL TANT.

21.4_ Right to Offset. CITY shall have the right to offset against any compensation due CONSUL TANT under this Agreement any amount due CITY from CONSUL TANT as a result of CONSULTANrs failure to pay CITY promptly any indemnification arising under. this Section (21) ancf any amount due CITY from CONSULTANT arising from CONSUL TANT's failure either to (i) pay taxes on amounts received pur-suant to this Agreement or (ii) comply with appliGable workers' compensation laws.

21.5. Interpretation. This Section shall constitute an agreement or contract of indemnity, incorporating the interpretations under California Civil Code -Section 2778. It is expressly understood and agreed that the obligation of the CONSULTANT 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.

22. 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 oniy by a subsequent mutual written agreement execl!lted by CITY and CONSULTANT. If the provisions con�ined in the main body of thi.s 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 exhioit to this-Agreement.

23. Governing Law and Venue. This Agreement shall be construed in accordance with the laws of1he 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 ir'l Santa Clara County.

24. 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.

25. 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 test of the Agreement shall remain in full force and effect and shall In no Way be affected or invalidated.

26. Binding Agreement. Notwithstanding the provisions of Section 19 above, this Agreement shall bind any and all successors in inter.est, legal representatives andlor other permitted assignees or transferees oJ CONSULT ANT in the sarne manner as if those successors in interest, legal representatives or other permitted assignees or transferees had entered into this Agreement originally. 8 Updated March 2021

DocuSign Envelope ID: 0FF0F417-E78E-48D7-B00B-036892C26552

27. D Data Sharing. This Agreement requires access by CONSULTANT to C!TY's Geographic Information System (GIS) DATA for CONSULTANT to perform the wor)<. CITY agrees to provide the GIS DATA to CONSUL TANT solely for the purpose of performance of contracted work with the CITY upon the terms and conditions specified in Exhibit D, incorporated herein by this reference. [Signatures on Next Page]
9 Updated March 2021

OocuSign Envelope ID: OFFOF417-E78E-4B07-BOOB-036892C26552

28. 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 Āehalf of the entities and to bind the entities fully to each and all of the obligations set forth 1 in this Agreement.

IN WITNESS THEREOF, these Parties have exe'cuted 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�
�ty City Clerk
Michelle Bigelow
Print Name
Date: 6/30/2021
APPROVED AS TO FORM:

Donald A. Larkin
Print Name
Date:
6/2.9/2021

CITY OF MORGAN HILL
Christina J. Turner
Print Name
Date: 6/30/2021
JOINT VENTURE SlLICON VALLEY
,��
By:

Russell Hancock
President & CEO
Print Name and Title of Signer.

If Corporate: Chairman, President or
Vice President
Date: June 25, 2021
By:

Michael Greco, CFO
Print Name and Title of Signer.
'If .Corporate: Secretary, Assistant
Secretary,- Chief Financial Officer or
Assistant Treasurer
Dÿte: June 25, 2021
10 Updated March 2021

DocuSign Envelope ID: 0FF0F417-E78E-4BD7-B00B-036892C26552 U:\Legal Forms\Consultant Agreements\City Standard Consultant Agreement.Docx '11
Updated March 2021

DocuSig� Envelope ID: 0FF0F417-E78E-4BD7-B00B-036892C26552

EXHIBIT A

SCOPE OF SERVICES

1. Data Collection from Generators and Food Recovery Organil;ations • Support Food Recovery Organizati0ns and Commercial Edible Food Generators with compliance:
o. Contract support for standardized agreements required .by SB 1383. o Technical assistance with County-wide reporting system.

Create an online toot to collect reportab\e information from Food Recovery Organ\zati0ns and Services as well as Tier 1 and 2 generators if reporting is a part of the final ordinances for Tier 1 and 2. • Data collectlon tool will include all information
- decrded upon in the local ordinances.
a Education of Generators and FROs. Work with jurisdictions or other entities doing education a.nd outreach to clearly articulate data requirements for food recovery organizations and Tier 1 generator� in prepar.ation for SB 1383.
• Synthesize data, then distr,ibute data With those jurisdictions With appropriate formatting for Cal Recycle.

2. Educatio.n and Outreach
• Maintain a list of food recovery organlzations and food recovery services operating within the county, and post that list on a .shared, county-wide website. • Maintain and continue to refine the rontent of a websjte for th� Santa (:Iara county food Recovery Program.
• Unified outreach and education" including managing support of the San Jose Conservation Corps to reach out to generators across cities with a su.rvey and educ�tional material�.

3. Capacity Builcf ing
• Based upon needs id�htified thre�gh the Sante Clara Co.unty Capacity Analysis, devefop capacity building strategies to support increasing capac;ity County-wide • Work with other entities to identify ap-prnpriate funding :streams to fond these efforts, and support food recovery organizat1oris in their efforts to request fee-for-serv1ce and other methods of paying for· nec;;essary capacity ,increases.

Document potential plans to increase �dible food recovery capacity 1f the analysis indicates that the jurisdictions in Santa Clara County d9 not have-sufficient capacity to meet edible food recovery needs.

To include options for increasing.edible food recovery capacity, amounts of fuhding needed,. and 12 Updated March 2021

DocuSig� Envelope ID: 0FF0F417-E78E-4BD7-B00B-036892C26552 suggestions for fund,ng options,

4. Documentation
foint Venture will offer each jurisdiction relevant documents supporting its compliance with the lmplementatfon Record including:
• A description of the increases in commercial edible food generator access to food recovery organizations and food recovery services.
• A list of food recovery organizations and food recovery services in the-jurisdiction and their edible food re�overy capacity.
• Do<mmentation of county-wide actions taken to increase edible food r ecovery capacity. • Recommendations for future years: fundif'!g/time estimates to run the program, handbook for new entityJ recommer:idatjCins for funding streams, Recruitment Committee ma·nagement, training of new staff.
• Any other Documentation required for implementatjon rei::or.d/jurisdictional record-keeping.

5. Management
• Continue projects related to the previous contract Scope of Work:
• Manage the four (4) subcommittees ofthe Steering Committee relating to SB 1383 food recovery program tasks.
• Continue to support work en.a unified ordinance.approach. All or.dinances must facilitate edible . food standards, county-wide data collection and capacity in<,reases; at a minimum. • Continue to upd.ate the TAC on progres�, and solicit input when necessary. • Work with the contractor creating the Santa Clara -County Capacity Analysis to ensure that next steps on increasing capacity are implemented ceunty-w'ide, wjth multiple strategies employed.

6. Develop Monitoring and Inspection Strategy
• Implementation monitoring and feedback to TAC and the Commission. , Develop Inspection and Monitor>ing Strategy in conjunctio"n with input from the Monitoring and Enforcement Subcommittee as well as other stakeholders. • Work towards the goal of �II jur,sdictions coordin�ting 'Or approving a centralized_, .s41ndardized approach.
13 Updated March 2021

DocuSign Envelope ID: 0FF0F417-E78E-4BO7-B00B-036892C26552

EXHIBIT B

SCHEDULE OF COMPENSATION RA TES
25,000 25,000
Build data collection website, collect data, 30,000 20,000 develop an incentive program to encourage
participation if necessary. Staff time, bu.
ild
website- contractor time.
' Maintain website, Santa Clara County Food 2Ā,000 15,006 . i Recovery Organization list, Tier 2 ID, Manage
, . � San Jose Conservation Corps outreach,
• technical assistance.
: : Based upon needs identified through the 10,000 10,000 LFU.::'l-�ln�W.�li!A"�i.uJ�- .,,
· , Santa Clara County Capacity Analysis,
,· :� develop capacity bu!fding strategies to f. .... , ·•-:-:, support increasing capacity county-wide ,· • 4•,• � Recommendations for future years: 15,000 25,000 lblV..lr����;™���-� &:.
it�::f. funding/time estimates to run the program,
. �,;' ·::_ :.,_-•"·handbook for new entity, recommendations · �- for funding streams, Recruitment Committee · management, training of new staff. ,K { Documentation required for implementation
: �- "t record, jurisdictional record-keeping.
� · -•- Work with subcommittees, TAC, Food 5,000 5,000 Rf���;mnY���-�i::,�. -.e· System Alliance, and other groups to � integrate SB 1383
,v,, - aevelop, in conjunction with the 15,000 25,000
·•�· .; Enforcement and Ordinance Subcommittee, � " - _ � , •:· a monitoring and inspection strategy, then ��1,J.,:,11.,1,.,.�ti'tt�-'t'!.
'i-/,
F., � , assist in the coordination of centralized
inspections and monitoring as needed.
125,000 125,000
1ÿ
Updated March 2021

DocuSign Envelope ID: 0FF0F417-E78E-4BD7-B00B-036892C26552 Monthly lnvo\ce amount is $10,416 {total yearly amount not to exceed $125,000) If City staff approves additional scope of work beyond stated scope of services in Exhibit A, the hourly rate will be $1.20.00 per hour. The amount for addition�! scope of work activities shall hot exceed fifty thousand dollars (,$50,000).
15 Updated March 2Q21

DocuSig� Envelope ID: 0FF0F417-E78E-4BD7-B00B-036892C26552 Deliverables:

August 31, 2021

EXHIBIT C
SCHEDULE OF P�RFORMANCE
Web site up and maintained with current information. Technical assistance provided to San Jose Conservation Corps and jurisdictions to complete outreach and education tasks, and all first-round edl.!Jcation and outreach tasks completed. Tier 2 identified, and education process begun.

D�cember 31, 2021
Interim report and presentation to TAC. Data collection tool designed, county--wide portions of the food recovery program ordinance complete, food recovery organizations and generator outreach and education complete. Monitoring and inspection strategy complete.

June 30, 2022
Input on Santa Clara County Capacity Analysis complete, with all items in Scope ofServiee,s on this topic accomplished. Recr.uitment Committee, for long-term program home, created.

August 31, 2022
Report to TAC on progress on all .items within the Scope of Services. Items to jurisdictions for necessary rep0r:ts. Data -collection system fully functional and used for data collection.

December 31, 2022.

Interim report to TAC. Permanent home identified, and all data collection tasks from Scope -of Seiv1ces completed. Long term home identified, draft handbook and transition materials created.

June 30, 2023.

Final Report and presentation to TAC on all items within the Scbpe of Services .. 16 Updated March 2021

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

Daniel Cardwell, Building Inspector Supervisor
APPROVED BY: City Manager

APPROVE AMENDMENT TO PROFESSIONAL SERVICES
AGREEMENT WITH CSG CONSULTANTS, INC. TO PROVIDE PLAN

CHECK/REVIEW ASSISTANCE

RECOMMENDATION(S)
Approve the First Amendment to the professional services agreement with CSG Consultants, Inc. for Building Department review services for a total not-to-exceed amount of $260,000.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety
Maintaining and Enhancing Infrastructure
2022-2023 Strategic Priorities
Fiscal Sustainability
REPORT NARRATIVE:

BACKGROUND:

The City uses consultant services to assist with residential and non-residential plan reviews. Currently, the City outsources plan review services to CSG Consultants, INC. (CSG). The services performed by CSG are on an as-needed basis and include the following: residential and non-residential building plan reviews, structural only plan reviews, fire plan reviews, expedited plan reviews, building plan reviews and certified access specialist (CASp) consultation. CSG plays a vital role in assisting the Building Division with timely processing of residential and non-residential plan reviews.

NARRATIVE:

The Building Division reviews construction plans, issues permits, and provides field inspections for all construction and property development activities to ensure

7 compliance with mandated regulations. In addition to issuing building permits, the Building Division is responsible for fire prevention, plan review, inspections, and complaint-based Code Compliance activities. The Building Division processes approximately 2,700 building permits annually. Plan reviews are supported by the Building Official, Building Manager, and Plan Check Engineer. The City has to rely on consulting services to meet required turn-around deadlines. The City is experiencing a major increase in permit activity due to an increase in commercial and residential development as well as a significant amount of home renovations that were inspired during the COVID pandemic that required people to stay home. Additionally, new legislation will require expedited and streamlined plan review that will further impact the City's ability to meet required deadlines.

The current CSG contract for $60,000 expires on March 1, 2023 (Attachment 1). The existing contract amount is anticipated to be depleted by the end of calendar year 2022.

The purpose of this First Amendment (Attachment 2) is to increase the total not-toexceed contract amount by $200,000 and to extend the term of the contract to June 30, 2024, which will result in a total not-to-exceed contract amount of $260,000. The required funds were budgeted in the City's FY 2022-2024 Budget, so no additional appropriation is required. Should an extension be necessary, the City Manager may approve a contract extension of up to 105% of the original contract cost provided sufficient funds are budgeted and appropriated.

The following table identifies the projects the building staff was able to outsource to CSG. Based on the amount of continued project submittals, the amended agreement will provide plan review assistance to ensure the staff maintains the highest quality of service to the public.

Date Permit # Address CSG Amount
3/30/2022 BRES2022-0144 16625 Del Monte
Ave
$3,084.90
4/6/2022 MST2021-0001 thru 0003 Spring Ave $8,033.17
4/28/2022 MST2022-0006 Manzanita Park $13,629.20
5/12/2022 BRES2022-0220 105 Sanchez Dr $1,424.80
5/26/2022 MST2022-0013 The Lumberyard $13,254.80
6/10/2022 Bres2022-0257,0258 761 Dakota Dr $3,993.60
6/23/2022 MST2022-0014 The Lumberyard $5,296.85
COMMUNITY ENGAGEMENT:

Inform:

This report serves to inform the community of the recommended amendment to approve a professional services agreement with CSG Consultants, INC. to provide plan check/review assistance.

7 ALTERNATIVE ACTIONS:

The Council could decide not to approve this amendment. This will result in no project review support services by CSG until a new consultant contract is approved. This alternative is not recommended as it will delay project approvals for the remainder of FY 2022-2024 and would likely result in violations of the Permit Streamlining Act.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The City Manager approved current CSG contract number 128-04-22-009 on March 20, 2022.

FISCAL AND RESOURCE IMPACT:

This item is included in the FY 2022-2023 and 2023-2024 budgets and is part of the Building Division workplan in the Development Services Fund 206.5130.42231.

CEQA (California Environmental Quality Act):

Not a Project: Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment are exempted from environmental review under Section 15061(b)(3) of the State CEQA Guidelines. The contract is covered by the general rule that CEQA applies only to projects which have the potential to cause a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

1 FIRST AMENDMENT TO AGREEMENT
CSG CONSULTANTS, INC.

This FIRST AMENDMENT TO AGREEMENT is entered into and becomes effective on ______________________ (Effective Date), by THE CITY OF MORGAN HILL, a municipal corporation, ("CITY") and CSG CONSULTANTS, INC., a California Corporation ("CONSULTANT"), hereinafter referred to collectively as the “Parties".

RECITALS
The following recitals are a substantive part of this Agreement:

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

2. The CITY and CONSULTANT entered into that “Consultant Agreement” made as of March 30, 2022, for consultant services for a maximum compensation of Sixty Thousand Dollars ($60,000.00) (“CONSULTANT AGREEMENT”). The CONSULTANT AGREEMENT is attached as Exhibit “1” to this Agreement.

AGREEMENT
THE PARTIES MUTUALLY AGREE AS FOLLOWS:

1. Amendments: All terms and conditions of the CONSULTANT AGREEMENT, as amended, as attached as Exhibit "1,” shall remain in full force and effect; except that the following amendments shall be made as set forth below:

A. Paragraph 2 shall be amended and replaced in its entirety by the following:
"2. Term of Agreement. This Agreement shall be effective and cover services rendered from March 30, 2022, until June 30, 2024. The City Manager is authorized to extend the term of this Agreement for a maximum period of one year. Any such extension shall be in writing and signed by both parties to this Agreement."
B. Paragraph 4.1 shall be amended and replaced in its entirety by the following:
"4.1. Amount. Compensation under this Agreement shall not exceed TWO HUNDRED SIXTY THOUSAND AND NO/100 DOLLARS ($260,000.00) 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 for up to one year 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 CONSULTANT 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 the extended term exceed the City Manager's authority pursuant to Chapter 3.04 of the Morgan Hill Municipal Code, unless otherwise authorized by City Council.”

2. 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 DocuSign Envelope ID: 27621580-EBDD-4E61-B47C-D3965D4D0BF9

2 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.

3. Conflicts. In the event of a conflict between the terms and provisions of this First Amendment to Agreement and the terms and provisions of the CONSULTANT AGREEMENT, the terms of this First Amendment to Agreement shall govern and control.

TWO SIGNATURES ARE REQUIRED FOR 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
Michelle Bigelow, City Clerk Christina Turner, City Manager Date: Date:

APPROVED AS TO FORM:

Donald Larkin, City Attorney
CSG CONSULTANTS, INC.

By:

By:

Date: Title:

Date:

Print Name and Title of Signer.

If Corporate: Chairman, President,
or Vice President
By:

Title:

Date:

Print Name and Title of Signer.

If Corporate: Secretary, Assistant
Secretary, Chief Financial Officer, or
Assistant Treasurer
DocuSign Envelope ID: 27621580-EBDD-4E61-B47C-D3965D4D0BF9 President Cyrus Kianpour
10/21/2022
Nourdin Khayata Vice President
10/21/2022

DocuSign Envelope ID: 05024292- 5529- 449A- AAGG- A50354463E58 I 8- ®- q _

CONSULTANT AGREEMENT
CSG CONSULTANTS INC.

THIS AGREEMENT is entered into and becomes effective on 3/ 20/ 2022 ( Effective Date), by and between the CITY OF MORGAN HILL, a municipal corporation, (" CITY"), and CSG CONSULTANTS INC. a California corporation (" CONSULTANT") 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 authority of the City Manager pursuant to Chapter 3. 04 of the Morgan Hill Municipal Code.

2. Term of Agreement. This Agreement shall cover services rendered from the Effective Date of this Agreement until March 1, 2023 at which time CONSULTANT' S services shall be completed. The City Manager is authorized to extend the term of this Agreement for a maximum period of one year. 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 CONSULTANT shall be providing plan review services for the Building Division as further described in Exhibit A.

4. Compensation. CONSULTANT shall be compensated as follows:

4..1. Amount. $ 60, 000. 00. Total compensation to CONSULTANT under this Agreement during its initial term set forth inSection 2 above shall not exceed SIXTY THOUSAND 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 for up to one year 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 CONSULTANT, 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 the term exceed the City Manager' s authority pursuant to Chapter 3. 04 of the Morgan Hill Municipal Code, unless otherwise authorized by City Council.

4. 2. Billing. CONSULTANT 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 CONSULTANT 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 13 Notices. 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 excess of the total compensation set forth in paragraph 4. 1 above shall be at no cost to CITY.

5. Termination. CITY or CONSULTANT 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, CONSULTANT shall submit to CITY an itemized statement of services performed for which compensation has not been paid. CITY may require CONSULTANT to complete certain work product or documents and CONSULTANT shall deliver to CITY all documents in its possession without additional compensation to 1 Updated March 2021
EXHIBIT 1
DocuSign Envelope ID: 27621580-EBDD-4E61-B47C-D3965D4D0BF9

DocuSign Envelope ID: 05024292- 5529- 449A- AACC- A50354463E58 CONSULTANT. The City Manager of CITY 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 CONSULTANT 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.

6. Performance of Work. CONSULTANT represents that it is qualified by virtue of experience, training, education, and expertise to accomplish these services. Services shall be performed by CONSULTANT in accordance with professional practices in a manner consistent with a level of care, competence and skill exercised by qualified members of the CONSULTANT' S profession. By delivery of completed work, CONSULTANT certifies that the work conforms to the requirements of this Agreement and all applicable federal, state and local laws. CONSULTANT shall perform all work and services under this Agreement in conformance with the time schedule set forth on Exhibit C, " Schedule of Performance," attached hereto and incorporated herein by this reference. CITY's 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. If CONSULTANT desires to leave or store any of CONSULTANT's equipment at a CITY site while CONSULTANT is performing work or service pursuant to this Agreement, CONSULTANT will first obtain the consent of CITY' s 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 CONSULTANT' s sole risk.

7. Insurance Requirements. CONSULTANT 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 CONSULTANT, 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. CONSULTANT further understands that the CITY reserves the right to modify the insurance requirements set forth herein, with thirty 30) days' notice provided to CONSULTANT, at any time as deemed necessary to protect the interests of the CITY.

7. 1. Insurance Types and Amounts.

7. 1. 1. Commercial General Liability ( CGL). CONSULTANT 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 CONSULTANT under CONSULTANT' s combined insurance policies including any excess or " umbrella" policies), whichever is greater.

7. 1. 2. Automobile Liability. CONSULTANT shall maintain Automobile Liability covering all owned, non -owned and hired automobiles ( if CONSULTANT does not own automobiles, then CONSULTANT 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) one million dollars ($ 1, 000,000. 00) combined single limit for any one accident or occurrence, or ( ii) the maximum amount 2 Updated March 2021
DocuSign Envelope ID: 27621580-EBDD-4E61-B47C-D3965D4D0BF9

DocuSign Envelope ID: 05024292-5529- 449A-AACC- A50354463E58 of such insurance available to CONSULTANT under CONSULTANT' s combined insurance policies ( including any excess or "umbrella" policies), whichever is greater.

7. 1. 3. Workers' Compensation Insurance and Employer' s Liability. CONSULTANT 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 CONSULTANT under CONSULTANT' s combined insurance policies ( including any excess or " umbrella" policies), whichever is greater. If CONSULTANT is self-insured, CONSULTANT shall provide its Certificate of Permission to Self -Insure, duly authorized by the Department of Industrial Relations.

7. 1. 4. Pollution ( Environmental) Liability. If the performance of CONSULTANT' 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, CONSULTANT shall procure and maintain Pollution Liability covering the CONSULTANT' 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 CONSULTANT under CONSULTANT' s combined insurance policies ( including any excess or "umbrella" policies), whichever is greater.

7. 1. 5. Professional Liabilit

7. 1. 5. 1. If the performance of CONSULTANT' 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), CONSULTANT 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 CONSULTANT under CONSULTANT' s combined insurance policies ( including any excess or umbrella" policies), whichever is greater. Further, if CONSULTANT maintains a claims -made policy, CONSULTANT shall provide written evidence of such insurance to the CITY for at least five ( 5) years after the completion of work performed under this Agreement.

7. 1. 5. 2. If the performance of CONSULTANT' 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), CONSULTANT 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 CONSULTANT under CONSULTANT' s combined insurance policies ( including any excess or " umbrella" policies), whichever is greater.

7. 1. 6. Sexual Abuse/ Molestation Liability (SML): If the performance of CONSULTANT' s work or service under this Agreement involves contact with minors, CONSULTANT shall 3 Updated March 2021
DocuSign Envelope ID: 27621580-EBDD-4E61-B47C-D3965D4D0BF9

DocuSign Envelope ID: 05024292- 5529- 449A- AACC- A50354463E58 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 CONSULTANT under CONSULTANT' s combined insurance policies ( including any excess or " umbrella" policies), whichever is greater.

7. 2. Endorsements. CONSULTANT shall provide proof of the following endorsements, listed for each policy for which endorsements are required, as outlined below:

7. 2. 1. General Liability and pollution liability ( when pollution liability applies).

7. 2. 1. 1. The City of Morgan Hill, its elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers are named as additional insureds;

7. 2. 1. 2. The 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; and,

7. 2. 1. 3. Insurance shall be primary non- contributing.

7. 2. 2. Workers Compensation.

If the performance of CONSULTANT' 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, CONSULTANT' 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.

7. 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.

7. 4. Certificates. CONSULTANT shall furnish CITY of Morgan Hill with copies of all certificates as outlined herein, whether new or modified, promptly upon receipt. In the event of a claim or legal action, CONSULTANT shall promptly furnish CITY of Morgan Hill with copies of all policies outlined herein. No policy subject to the CONSULTANT' s agreement with the 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 non- compliance with any insurance requirements in this section 7. Certificates, including renewal certificates, may be mailed electronically to riskmgmtomoroanhill. ca. gov 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
4 Updated March 2021
DocuSign Envelope ID: 27621580-EBDD-4E61-B47C-D3965D4D0BF9

DocuSign Envelope ID: 05024292- 5529- 449A- AACC- A50354463E58 91 No official or employee of CITY shall be
any oetaun or
Compliance with Law

9. 1. CONSULTANT 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. CONSULTANT 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.

9. 2. Compliance with Wage and Hour Laws: Consultant, 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 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 CONSULTANT and/ or its Subcontractors: BY SIGNING THIS

AGREEMENT, CONSULTANT 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 CONSULTANT OR ITS SUBCONTRACTOR( S) HAS VIOLATED ANY APPLICABLE WAGE AND HOUR LAWS. CONSULTANT 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 CONSULTANT or an subcontractor it employs to perform work under this Agreement has violated any applicable wage and hour law, or CONSULTANT learns of such a judgment, decision, or order that was not previously disclosed, CONSULTANT 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. CONSULTANT 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. The City reserves the right to require CONSULTANT to enter into an agreement with the City regarding the manner in which any such final judgment, decision, or order will be satisfied.

City' s Right to Withhold Payment: Where CONSULTANT or any subcontractor it employs to perform work under this Agreement has been found in violation of any applicable wage and 5 Updated March 2021
DocuSign Envelope ID: 27621580-EBDD-4E61-B47C-D3965D4D0BF9

DocuSign Envelope ID: 05024292- 5529- 449A- AACC- A50354463E58 hour law by a final judgment, decision or order of a court or government agency, the City reserves the right to withhold payment to CONSULTANT 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.

10. Independent Contractor. CONSULTANT is an independent contractor and not an agent or employee of CITY.

11. Confidentiality. All data, documents, or other information received by CONSULTANT from CITY or prepared in connection with CONSULTANT' S services under this Agreement are deemed confidential and shall not be disclosed to any third party by CONSULTANT without prior written consent by CITY.

12. Conflict of Interest and Reporting. CONSULTANT shall at all times avoid conflict of interest or appearance of conflict of interest in performance of this Agreement.

13. 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 CONSULTANT is as follows:

CSG CONSULTANTS INC.
550 Pilgrim Drive,
Foster City, CA 94404
Attn: Cyrus Kianpour, President, Email: contracts( a)csgenor. com cc: CSG Consultants, Inc. 550 Pilgrim Drive,
Foster City, CA 94404, Attn: Michael Loomis
Address of CITY is as follows:

Eric Blomquist with a copy to:

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

14. Licenses. Permits and Fees. CONSULTANT shall obtain a City of Morgan Hill Business License, all per and licenses to the extent required by ordinances, codes and regulations of the federal, state and local government.
6 Updated March 2021
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15. Consultant' s Proposal. If applicable, this Agreement shall include CONSULTANT' 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.

16. Maintenance of Records.

16. 1. Maintenance. CONSULTANT 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. CONSULTANT 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 CONSULTANT shall retain said records until such action is resolved.

16.2. Access to and Audit of Records. The CITY shall have the right to examine, monitor and audit all records, documents, conditions, and activities of the CONSULTANT 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 the CITY or as part of any audit of the 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.

16. 3. Ownership of Work Product. All documents or other information developed or received by CONSULTANT for work performed under this Agreement shall be the property of CITY.

CONSULTANT shall provide CITY with copies of these items upon demand or upon termination of this Agreement.

17. Familiarity with Work. By executing this Agreement, CONSULTANT 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 CONSULTANT 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 CONSULTANT' S risk, until written instructions are received from CITY.

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

19. No Assignment. Neither this Agreement nor any portion shall be assigned by CONSULTANT, 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.

20. 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.

21. Defense and Indemnification.

21. 1. Defense and Indemnification. CONSULTANT 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 7 Updated March 2021
DocuSign Envelope ID: 27621580-EBDD-4E61-B47C-D3965D4D0BF9

DocuSlgn Envelope ID: 05024292- 5529- 449A- AACC- A50354463E58 contained in this Agreement by CONSULTANT, and/ or its agents, officers, employees, subcontractors, or independent contractors (" CLAIM").

21. 2. Exceptions. CONSULTANT 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 the CITY.

21. 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 CONSULTANT.

21. 4. Right to Offset. CITY shall have the right to offset against any compensation due CONSULTANT under this Agreement any amount due CITY from CONSULTANT as a result of CONSULTANT' s failure to pay CITY promptly any indemnification arising under this Section ( 21) and any amount due CITY from CONSULTANT arising from CONSULTANT' s failure either to (i) pay taxes on amounts received pursuant to this Agreement or (ii) comply with applicable workers' compensation laws.

21. 5. Interpretation. This Section shall constitute an agreement or contract of indemnity, incorporating the interpretations under California Civil Code Section 2778. It is expressly understood and agreed that the obligation of the CONSULTANT 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.

22. 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 CONSULTANT. 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.

23. 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.

24. 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.

25. 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.

26. Binding Agreement. Notwithstanding the provisions of Section 19 above, this Agreement shall bind any and all successors in interest, legal representatives and/ or other permitted assignees or transferees of CONSULTANT in the same manner as if those successors in interest, legal representatives or other permitted assignees or transferees had entered into this Agreement originally. 8 Updated March 2021
DocuSign Envelope ID: 27621580-EBDD-4E61-B47C-D3965D4D0BF9

DocuSign Envelope ID: 05024292- 5529- 449A- AACC- A50354463E58

27. Data Sharing. This Agreement requires access by CONSULTANT to CITY's Geographic Information System ( GIS) DATA for CONSULTANT to perform the work. CITY agrees to provide the GIS DATA to CONSULTANT solely for the purpose of performance of contracted work with the CITY upon the terms and conditions specified in Exhibit D, incorporated herein by this reference.

Signatures on Next Page]
9 Updated March 2021
DocuSign Envelope ID: 27621580-EBDD-4E61-B47C-D3965D4D0BF9

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28. 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. below.

IN WITNESS THEREOF, these Parties have executed this Agreement on the day and year shown 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:
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1 1 WIL aow
C40eWDOmty City Clerk
Michelle Bigelow
Print Name
Date: 3/ 21/ 2022
APPROVED AS TO FORM:

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by:

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Donald A. Larkin
Print Name
Date: 3/ 16/ 2022

CITY OF MORGAN HILL
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Christina J. Turner
Print Name
Date: 3/ 20/ 2022
CGS CONSULTANTS, INC.
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By IAC12FF2224A4B2...

Cyrus Kianpour, President
Print Name and Title of Signer.

If Corporate: Chairman, President or
Vice President
Date: 2/ 28/ 2022
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by:

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Nourdin Khayata, Secretary
Print Name and Title of Signer.

If Corporate: Secretary, Assistant
Secretary, Chief Financial Officer or
Assistant Treasurer
Date: 3/ 15/ 2022
U:\ Legal Forms\ Consultant Agreements\ City Standard Consultant Agreement. Docx 10 Updated March 2021
DocuSign Envelope ID: 27621580-EBDD-4E61-B47C-D3965D4D0BF9

DocuSign Envelope ID: 05024292- 5529- 449A- AACC- A50354463E58

EXHIBIT A

SCOPE OF SERVICES
CONSULTANT shall provide CITY with plan review services through registered engineers and/ or ICC certified, engineers with a range of experiences including LEED, OSHPD 3 and CASp. Projects may include residential new construction, residential additions, residential remodels, commercial new construction, commercial remodels, and tenant improvements.

Plan review services may include:

Residential and Non -Residential Building Plan Review
Structural Only Plan Review
Expedited Building Plan Review
Building Plan Review
Fire Plan Review
CASp Consultation
Expedited Plan Review
CSG will coordinate the pickup and return of all plans via CSG staff or licensed courier service 11 Updated March 2021
DocuSign Envelope ID: 27621580-EBDD-4E61-B47C-D3965D4D0BF9

DocuSign Envelope ID: 05024292- 5529- 449A- AACC- A50354463E58

EXHIBIT B

SCHEDULE OF COMPENSATION RATES
CONSULTANT fee schedule will be based on a percentage of the City' s plan check fees and include initial plan review and two subsequent reviews. Additional reviews, deferred submittals, revisions and RFIs will be charged at the appropriate hourly rate below. RFIs for larger developments will be performed at an hourly rate, and turnaround times will be agreed upon in advance with CITY.

REVIEW TYPE / ROLE
Residential and Non -Residential Building Plan Review
Structural Only Plan Review
Expedited Building Plan Review
Building Plan Review
Fire Plan Review
CASA Consultation
Expedited Plan Review

ALL INCLUSIVE FEE / HOURLY RATE
65% of City' s Plan Check Fee
50% of City' s Plan Check Fee
90% of City' s Plan Check Fee
130
130
145

1. 5 x Hourly Rate
All hourly rates include salaries, benefits, workers compensation insurance, local travel and miscellaneous office expenses. Should the scope of work change, or circumstances develop which necessitate special handling, CONSULTANT will notify CITY prior to proceeding. Overtime services will be billed at 1. 5x the applicable hourly rate. On each anniversary of the contract start date, CSG will initiate a rate increase for all hourBy rates based on change in CPI for the applicable region.

CONSULTANT will invoice once a month for services rendered during the previous month. 12 Updated March 2021
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EXHIBIT C

SCHEDULE OF PERFORMANCE

TYPE OF REVIEW INITIAL REVIEW
BUSINESS DAYS) 2
Residential New Construction 10
Residential Additions 10
Small Residential Remodels 10
Commercial New Construction
Large/ Complex Projects * 1 10
Commercial Additions 10
Small Commercial Remodels/
Tenant Improvements 10
Expedited 5

RE -CHECK
BUSINESS DAYS) 2
5 5
5 5
5 1Turnaround time may vary with the complexity and magnitude of the project. If a review is anticipated to take longer than the maximum turnaround time, CONSTULANT will notify the CITY'S representative and negotiate additional time required to ensure an appropriate level of review.

The number of working days associated with the plan check turnaround time is based on time of project submittal. The first working day will be the day the project is received by CONSTULANT if submitted by 3: 00 PM. For a project that is received by CONSULTANT after 3: 00 PM, the first working day will be the next business day.
13 Updated March 2021
DocuSign Envelope ID: 27621580-EBDD-4E61-B47C-D3965D4D0BF9

Certificate Of Completion
Envelope Id: 27621580EBDD4E61B47CD3965D4D0BF9 Status: Completed Subject: Complete with DocuSign: CSG - First Amendment.pdf Source Envelope:

Document Pages: 15 Signatures: 2 Envelope Originator:

Certificate Pages: 5 Initials: 0 City Clerk's Office
AutoNav: Enabled
EnvelopeId Stamping: Enabled
Time Zone: (UTC-08:00) Pacific Time (US & Canada)
17575 Peak Ave
Morgan Hill, CA 95037
[email protected]
IP Address: 68.189.124.152
Record Tracking
Status: Original
10/21/2022 8:42:47 AM
Holder: City Clerk's Office
[email protected]
Location: DocuSign
Security Appliance Status: Connected Pool: StateLocal
Storage Appliance Status: Connected Pool: City of Morgan Hill Location: DocuSign Signer Events Signature Timestamp
Cyrus Kianpour
[email protected]
President
Security Level: Email, Account Authentication
(None) Signature Adoption: Pre-selected Style
Using IP Address: 162.193.104.185
Sent: 10/21/2022 8:47:10 AM
Viewed: 10/21/2022 8:51:02 AM
Signed: 10/21/2022 8:51:59 AM
Electronic Record and Signature Disclosure:

Accepted: 10/21/2022 8:51:02 AM
ID: 561b711f-5bfe-4ec5-a7e6-b620fe064698
Nourdin Khayata
[email protected]
Vice President
Security Level: Email, Account Authentication
(None) Signature Adoption: Drawn on Device
Using IP Address: 107.127.14.88
Signed using mobile
Sent: 10/21/2022 8:52:01 AM
Viewed: 10/21/2022 1:37:25 PM
Signed: 10/21/2022 1:37:40 PM
Electronic Record and Signature Disclosure:

Accepted: 10/21/2022 1:37:25 PM
ID: abc3903f-7639-49bb-991a-e887d8de4845
In Person Signer Events Signature Timestamp
Editor Delivery Events Status Timestamp
Agent Delivery Events Status Timestamp
Intermediary Delivery Events Status Timestamp
Certified Delivery Events Status Timestamp
Carbon Copy Events Status Timestamp
Daniel Cardwell
[email protected]
Building Inspector Supervisor
Security Level: Email, Account Authentication
(None)
Sent: 10/21/2022 1:37:41 PM
Electronic Record and Signature Disclosure:

Carbon Copy Events Status Timestamp
Accepted: 1/27/2022 3:55:16 PM
ID: 242acc40-0d99-4d01-b4b4-628b9dd5fae6
Kim Mancera
[email protected]
Municipal Services Assistant
City of Morgan Hill
Security Level: Email, Account Authentication
(None)
Sent: 10/21/2022 1:37:42 PM
Electronic Record and Signature Disclosure:

Not Offered via DocuSign
Witness Events Signature Timestamp
Notary Events Signature Timestamp
Envelope Summary Events Status Timestamps
Envelope Sent Hashed/Encrypted 10/21/2022 8:47:11 AM
Certified Delivered Security Checked 10/21/2022 1:37:25 PM Signing Complete Security Checked 10/21/2022 1:37:40 PM Completed Security Checked 10/21/2022 1:37:42 PM
Payment Events Status Timestamps
Electronic Record and Signature Disclosure

ELECTRONIC RECORD AND SIGNATURE DISCLOSURE
From time to time, City of Morgan Hill (we, us or Company) may be required by law to provide to you certain written notices or disclosures. Described below are the terms and conditions for providing to you such notices and disclosures electronically through the DocuSign system.

Please read the information below carefully and thoroughly, and if you can access this information electronically to your satisfaction and agree to this Electronic Record and Signature Disclosure (ERSD), please confirm your agreement by selecting the check-box next to ‘I agree to use electronic records and signatures’ before clicking ‘CONTINUE’ within the DocuSign system.

Getting paper copies
At any time, you may request from us a paper copy of any record provided or made available electronically to you by us. You will have the ability to download and print documents we send to you through the DocuSign system during and immediately after the signing session and, if you elect to create a DocuSign account, you may access the documents for a limited period of time (usually 30 days) after such documents are first sent to you. After such time, if you wish for us to send you paper copies of any such documents from our office to you, you will be charged a $0.00 per-page fee. You may request delivery of such paper copies from us by following the procedure described below.

Withdrawing your consent
If you decide to receive notices and disclosures from us electronically, you may at any time change your mind and tell us that thereafter you want to receive required notices and disclosures only in paper format. How you must inform us of your decision to receive future notices and disclosure in paper format and withdraw your consent to receive notices and disclosures electronically is described below.

Consequences of changing your mind
If you elect to receive required notices and disclosures only in paper format, it will slow the speed at which we can complete certain steps in transactions with you and delivering services to you because we will need first to send the required notices or disclosures to you in paper format, and then wait until we receive back from you your acknowledgment of your receipt of such paper notices or disclosures. Further, you will no longer be able to use the DocuSign system to receive required notices and consents electronically from us or to sign electronically documents from us.

All notices and disclosures will be sent to you electronically Electronic Record and Signature Disclosure created on: 5/29/2020 4:52:24 PM Parties agreed to: Cyrus Kianpour, Nourdin Khayata, Daniel Cardwell

Unless you tell us otherwise in accordance with the procedures described herein, we will provide electronically to you through the DocuSign system all required notices, disclosures, authorizations, acknowledgements, and other documents that are required to be provided or made available to you during the course of our relationship with you. To reduce the chance of you inadvertently not receiving any notice or disclosure, we prefer to provide all of the required notices and disclosures to you by the same method and to the same address that you have given us. Thus, you can receive all the disclosures and notices electronically or in paper format through the paper mail delivery system. If you do not agree with this process, please let us know as described below. Please also see the paragraph immediately above that describes the consequences of your electing not to receive delivery of the notices and disclosures electronically from us.

How to contact City of Morgan Hill:

You may contact us to let us know of your changes as to how we may contact you electronically, to request paper copies of certain information from us, and to withdraw your prior consent to receive notices and disclosures electronically as follows:

To contact us by email send messages to: [email protected] To advise City of Morgan Hill of your new email address To let us know of a change in your email address where we should send notices and disclosures electronically to you, you must send an email message to us at [email protected] and in the body of such request you must state: your previous email address, your new email address. We do not require any other information from you to change your email address.

If you created a DocuSign account, you may update it with your new email address through your account preferences.

To request paper copies from City of Morgan Hill
To request delivery from us of paper copies of the notices and disclosures previously provided by us to you electronically, you must send us an email
to [email protected] and in the body of such request you must state your email address, full name, mailing address, and telephone number. We will bill you for any fees at that time, if any.

To withdraw your consent with City of Morgan Hill
To inform us that you no longer wish to receive future notices and disclosures in electronic format you may:

i. decline to sign a document from within your signing session, and on the subsequent page, select the check-box indicating you wish to withdraw your consent, or you may; ii. send us an email to [email protected] and in the body of such request you must state your email, full name, mailing address, and telephone number. We do not need any other information from you to withdraw consent.. The consequences of your withdrawing consent for online documents will be that transactions may take a longer time to process..

Required hardware and software
The minimum system requirements for using the DocuSign system may change over time. The current system requirements are found here: https://support.docusign.com/guides/signer-guidesigning-system-requirements.

Acknowledging your access and consent to receive and sign documents electronically To confirm to us that you can access this information electronically, which will be similar to other electronic notices and disclosures that we will provide to you, please confirm that you have read this ERSD, and (i) that you are able to print on paper or electronically save this ERSD for your future reference and access; or (ii) that you are able to email this ERSD to an email address where you will be able to print on paper or save it for your future reference and access. Further, if you consent to receiving notices and disclosures exclusively in electronic format as described herein, then select the check-box next to ‘I agree to use electronic records and signatures’ before clicking ‘CONTINUE’ within the DocuSign system.

By selecting the check-box next to ‘I agree to use electronic records and signatures’, you confirm that:
 You can access and read this Electronic Record and Signature Disclosure; and  You can print on paper this Electronic Record and Signature Disclosure, or save or send this Electronic Record and Disclosure to a location where you can print it, for future reference and access; and
 Until or unless you notify City of Morgan Hill as described above, you consent to receive exclusively through electronic means all notices, disclosures, authorizations, acknowledgements, and other documents that are required to be provided or made available to you by City of Morgan Hill during the course of your relationship with City of Morgan Hill.

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

Tanya Carothers, Environmental Services Administrator
APPROVED BY: City Manager

APPROVE FRANCHISE AGREEMENT WITH RECOLOGY SOUTH

VALLEY FOR SOLID WASTE MANAGEMENT SERVICES

RECOMMENDATION(S)
Approve franchise agreement with Recology South Valley and authorize the City Manager to execute the agreement subject to the review and approval of the City Attorney.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Protecting the Environment and Preserving Open Space and Agricultural Land Maintaining and Enhancing Infrastructure
REPORT NARRATIVE:

The purpose of this item is to provide the City Council with an opportunity to approve a new solid waste franchise agreement with Recology South Valley.

For many decades, the City has partnered with Recology South Valley, and its predecessor companies, to provide the full range of solid waste management services for the community. During this time, City residents and businesses have enjoyed excellent services from the company provided at competitive prices. The company also supports community events and participates in civic institutions. The City has a franchise agreement with Recology that defines the legal relationship that the City has with the company.

With the franchise agreement scheduled to expire in 2022, City staff have negotiated a replacement agreement with Recology. Negotiations for this agreement have been ongoing for the last several years and required short-term extensions approved by the City Council to support this process. The negotiations with Recology are just now complete and the recommended franchise agreement (Attachment 1) is ready for Council consideration.The recommended franchise is scheduled to begin on January 1, 2023 and terminate on June 30, 2033. Based on our positive experience with Recology, and the likelihood that any change would result in increased costs and/or reduced services, staff informed Council in 2020 that we would be conducting direct negotiations with Recology to prepare a new franchise agreement when the current agreement

8 expires at the end of this year. Staff's recommendation to approve the agreement is legally consistent with Section 3.04.420 (4) of the Morgan Hill Municipal Code which explicitly exempts the action of entering into a solid waste management franchise from the City's purchasing ordinance.

While the expiration of any franchise agreement would typically involve some updating and modernization of the document, changes in California laws and regulations have required the City and Recology to include significant changes in the services provided.

Most notably, SB 1383 and its accompanying regulations mandate that the City take fairly extreme and significant actions to require local residents, businesses, and institutions to divert compostable and recyclable wastes away from the garbage stream.

In addition to the marketing and communication efforts that have typically been implemented to encourage recycling, these new regulations require inspections, enforcement, and significant recordkeeping if the City is to achieve compliance with the State law. State regulations also now require the City to purchase a significant quantity of compost or other products made from the diverted organic materials and oversee/support the recovery of edible food. In addition, the City is now required to ensure that litter is removed from the streets and kept out of the stormdrain system.

Failure to comply with these mandates will ultimately result in significant fines from the State.

The City has worked with Recology to develop a franchise agreement with the following attributes:
 Recology continues to perform all of the services they are currently providing including collection, management, disposal, transfer, street sweeping, and billing;  Recology will initiate a new bulky item collection program for multifamily residences and will cooperate with City efforts to collect waste in special and unusual circumstances at the City's request;
 Recology staff are largely responsible for the maximum amount of SB 1383 compliance activities that State law allows private parties to perform including outreach to customers, inspections, audits, recordkeeping etc.;  Recology staff will provide the City with enforcement referrals, as needed, to enforce the City's ordinance as required by State law;
 Recology will cooperate with the City's efforts to procure compost or other materials as required by law;
 Recology will provide the City with implementation funds required by the City to comply with State, regional, and/or local laws; and
 Service rates will be adjusted based on updated relevant cost factors and the amount of support required by the City for regulatory compliance.

These additional services will require an increase in the rates paid by customers. The initial increase, if the agreement is approved, will be 11.35% effective January 1. This increase can be broken down into the following elements:
 2.88% - Adjustment that would have normally taken effect on July 1, 2022 but

8 was delayed due to pending negotiations;
 1.97% - Adjustment for additional staff and resources required for SB 1383 compliance;
 2.25% - Adjustment for new bulky item collection program;  4.25% - Adjustment for changes in recycling market revenues in which recycling commodities, which used to have value, now actually cost money to be recycled.

The increase above does not include any payment to the City of implementation funds, any compost procurement, or any special collection services as the rate impacts associated with these items will vary depending on the City's request and do not begin on January 1. The earliest some of these charges could be included is July 1, 2023.

Staff believes that the rate adjustment is reasonable given the new services required and changes in the marketplace that have impacted Recology financially. Many communities have seen rate adjustments required of over 20% as a result of these same factors. In addition, the City has negotiated for Recology to perform the maximum amount of regulatory services legally permissible in order to avoid the need for additional City staff to maintain compliance.

COMMUNITY ENGAGEMENT:

Inform and Involve
With regard to the franchise agreement approval at hand, the City held a town hall earlier this year to inform the community about the process and did not receive significant input. In the short run, services provided to the public will be largely the same.

As efforts to comply with SB 1383 evolve, however, significant community engagement efforts, for both residents and businesses, will be required to achieve the State mandates. As these activities will require the public to change their behavior at home, at work, and in the community, the City and Recology's efforts to engage the community are really just beginning with the approval of the franchise. These efforts will be quite significant in that they will need to be multidisciplined and long-lasting.

ALTERNATIVE ACTIONS:

The Council could direct staff to reopen negotiations with Recology to achieve other objectives or to negotiate another extension with Recology while a different course of action is pursued. Either of these options would delay the City's implementation actions to comply with State mandates.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The City Council has taken numerous actions addressing the solid waste franchise agreement with Recology and its predecessors over the past 60 years. Particularly of note were the Council's actions to approve short term extensions to the current agreement in order to allow additional time for the renewal process and support the

8 development of the new services needed to comply with new State mandates.

FISCAL AND RESOURCE IMPACT:

With the above-described increase in service rates, the City's resulting franchise fees will increase by the same 11.35 percent. This equates to an annual increase of approximately $210,000, each fiscal year. Since the new franchise is beginning in the middle of the fiscal year, only one-half of this increase should be realized in FY 2022-

23. CEQA (California Environmental Quality Act):

Not a Project
The City's approval of this franchise agreement is an administrative activity of government that will not result in direct or indirect physical changes in the environment.

1 FRANCHISE AGREEMENT
THIS AGREEMENT (Agreement), dated _______________ is entered into by and between the CITY OF MORGAN HILL, a Municipal Corporation (“CITY”) and RECOLOGY SOUTH VALLEY, a California Corporation (“COMPANY”).

RECITALS
This Agreement is entered into on the basis of the following facts, understandings, and intentions of the parties:

A. The Legislature of the State of California, by enactment of the California Integrated Waste Management Act of 1989 (Public Resources Code Section 40000, et seq.; hereinafter the “Act”) established a solid waste management process which requires cities and other local jurisdictions to implement source reduction, reuse, and recycling as integrated waste management practices; and B. The State of California has found and declared that the amount of refuse generated in California, coupled with diminishing Disposal capacity and potential adverse environmental impacts from landfilling and the need to conserve natural resources, have created an urgent need for State and local agencies to enact and implement aggressive integrated waste management programs. The State has, through enactment of AB 939 and subsequent related legislation including, but not limited to: the Jobs and Recycling Act of 2011 (AB 341), the Event and Venue Recycling Act of 2004 (AB 2176), SB 1016 (Chapter 343, Statutes of 2008 [Wiggins, SB 1016]), the Mandatory Commercial Organics Recycling Act of 2014 (AB 1826), and the Short-Lived Climate Pollutants Bill of 2016 (SB 1383), directed the responsible State agency, and all local agencies, to promote diversion and to maximize the use of feasible waste reduction, reuse, recycling, and composting options in order to reduce the amount of refuse, including Organic Waste, that must be disposed; and
C. Pursuant to California Public Resources Code Section 40059(a)(2), the City has determined that the public health, safety, and well-being require that an exclusive right be awarded to a qualified contractor to provide for the collection of Recyclable Materials, Organic Materials, Construction and Demolition Debris, and Solid Waste; and
D. The City Council has enacted Chapter 13 of the Morgan Hill Municipal Code, which establishes standards for the Collection and removal of Solid Waste and Recyclables, the Disposal of Solid Waste, the Recycling of Recyclables, and requirements for Collection Agreements; and

2 E. CITY and COMPANY have implemented a new, expanded system of waste collection and management services to more efficiently provide for the collection of such materials, and to facilitate achievement of City’s obligations pursuant to the Act and to further expand collection and management services to facilitate achievement of CITY'S obligations pursuant to SB 1383, SB 341, SB 1826 and AB 827; and
F. Pursuant to this Agreement, CITY desires to engage COMPANY as an independent contractor to exclusively provide Solid Waste, Organic Materials and Recyclable Materials Collection Services in the City. COMPANY shall furnish all personnel, equipment, and supplies necessary to collect, or otherwise remove and dispose of all Solid Waste, Organic Materials and Recyclable Materials, as defined herein, generated or accumulated at all Residential and Commercial/Industrial Premises within the City, on the terms and conditions specified herein and except as otherwise specifically provided herein; and G. COMPANY represents and warrants to CITY that it has the experience, responsibility, and qualifications to implement the collection of Solid Waste, Organic Materials and Recyclable Materials, and to arrange with residents and other entities in the City for the collection, safe transport, Processing, and Disposal of all materials in compliance with Applicable Law and the provisions of this Agreement; and
H. CITY and COMPANY are mindful of the provisions of the laws governing the safe collection, transport, Recycling, and Disposal of Solid Waste, including the Act, RCRA, and CERCLA; and
I. COMPANY currently uses natural gas to fuel the collection vehicles that collect waste throughout the City’s incorporated limits. When alternatives to natural gas become commercially available, City and COMPANY mutually desire to explore, in a mutually agreed manner, collection vehicle fueling alternatives such as electricity, hydrogen, SB 1383 compliant biofuels, and hybrid propulsion in order to further reduce air pollution, carbon emissions and noise and to enhance community health as well as address SB 1383 procurement mandates.

J. CITY and COMPANY recognize that CITY may have the need for temporary services to be provided by COMPANY that arise and fluctuate over time and that the provision of these services result in additional costs (EXCEPTIONAL COSTS).

K. City has negotiated an agreement for waste disposal capacity with Waste Solutions Group of San Benito that is close to COMPANY’s transfer facilities and City desires that COMPANY deliver waste to this facility in order to reduce air

3 pollution and greenhouse gas emissions associated with transportation of solid waste collected in CITY; and
L. CITY and COMPANY desire to leave no doubts as to their respective roles and to make it clear that by entering into this Agreement, CITY is not thereby becoming a “generator” or “arranger” as those terms are used in the context of CERCLA Section 107 (a) (3), and that COMPANY will not make any claims that CITY is “arranging for” the Collection of Solid Waste, Construction and Demolition Debris, Organic Materials and Recyclable Materials from Residential and Commercial/Industrial Premises in the City, and transporting of same for Disposal, Recycling of Recyclables, and Processing of Organic Materials; and M. As a material inducement to CITY entering into this Agreement, COMPANY has agreed to fully indemnify CITY in the manner set forth in Section 13 hereof against all claims, losses, lawsuits or actions relating to any Hazardous Waste at any place where COMPANY transfers, stores, processes, or disposes of Solid Waste, Organic Materials or Recyclables pursuant to this Agreement, or its activities pursuant to this Agreement that result in a release of hazardous substances into the environment; and
N As a further material inducement to CITY entering into this Agreement, COMPANY has agreed to fully indemnify CITY against all claims, losses, lawsuits or actions relating to any Hazardous Waste at Pacheco Pass Landfill relating to Solid Waste Collected by COMPANY from within the City and disposed of before or after the date of this Agreement; and NOW, THEREFORE, in consideration of the mutual covenants and conditions herein contained, the parties agree to as follows:

Definitions
Whenever any term used in this Agreement has been defined by Section 13.28 of Chapter 13 of the Morgan Hill Municipal Code, the definitions in Section 13.28 shall apply unless the term is otherwise defined in this Agreement. Whenever any term used in this Agreement has been defined by Division 30, Part 1, Chapter 2 of the California Public Resources Code, the definitions in Division 30, Part 1, Chapter 2, shall apply, unless the term is otherwise defined in this Agreement or in Chapter 12 of the City Code. Whenever any term used in this Agreement has been defined by Title 14, Division 7, Chapter 12, Article 1 of the California Code of Regulations, the definition in Title 14, Division 7, Chapter 12, Article 1 of the California Code of Regulations shall apply unless the term is otherwise defined in this agreement, Chapter 12 of the City Code or Division 30, Part 1, Chapter 2 of the California Public Resources Code. In addition, the following definitions are hereby incorporated into this Agreement:
1 “Act” means the California Integrated Waste Management Act of 1989.

4 2 “Applicable Law” means all laws, ordinances, regulations, rules, orders, judgments, decrees, permits, approvals, or other requirement of any governmental body that are in force on the Date of this Agreement and as they may be enacted, issued or amended during the Term.
3 “CERCLA” means the Comprehensive Environmental Responsibility Compensation and Liability Act, 42 U.S.C.A. Section 9601 et seq., as amended or superseded, and the regulations promulgated thereunder.
4 “Change in Law” means any of the following events or conditions, which has a material and adverse effect on the performance by the parties of their respective obligations under this Agreement (except for payment obligations):
(a) the enactment, adoption, promulgation, issuance, modification, or written change in administrative or judicial interpretation of any Applicable Law on or after the date of this Agreement; or
(b) the order or judgment of any governmental body, on or after the date of this Agreement, to the extent such order or judgment is not the result of willful or negligent action, error or omission or lack of reasonable diligence of CITY or of COMPANY, whichever is asserting the occurrence of a Change in Law; provided, however, that the contesting in good faith or the failure in good faith to contest any such order or judgment shall not constitute or be construed as such a willful or negligent action, error or omission or lack of reasonable diligence. 5 “City Code” means the Municipal Code of the City of Morgan Hill, California, as it presently exists or may subsequently be amended.
6 “City Facilities” means: City Hall, Council Chamber Building, El Toro Fire Station, Dunne Hill Fire Station, Morgan Hill Historical Society/Villa Vira Monte, Community and Cultural Center, Police Facility, Outdoor Sports Center, Aquatics Center, Community Garden, Parking Garage, Playhouse, Corporation Yard, City parks, city garbage cans, if any, on city streets, and any other facility or real property used primarily by the CITY that may be constructed by, acquired by or leased to CITY during the Term.
7 “CalRecycle” means the California Department of Resources Recycling and Recovery.
8 “Collection Services” means all of the duties and obligations of COMPANY hereunder.
9 “Compost” shall have the meaning set forth in Public Resources Code Section 40116, as it now exists or may subsequently be amended.

5 10 “Consumer Price Index” or “CPI” means the Consumer Price Index (CPI) All Urban Consumers for the San Francisco - Oakland - San Jose Metropolitan Area, base period 1982- 84=100.
11 “Construction and Demolition Debris” means discarded materials removed from construction, remodeling, repair, demolition, or renovation operations on any pavement, house, commercial building, or other structure, or from landscaping. Such materials include, but are not limited to, dirt, sand, rock, gravel, bricks, plaster, gypsum wallboard, aluminum, glass, asphalt material, plastics, roofing material, cardboard, carpeting, cinder blocks, concrete, copper, electrical wire, fiberglass, Formica, granite, iron, lead, linoleum, marble, plaster, plant debris, pressboard, porcelain, steel, stucco, tile, vinyl, wood, masonry, rocks, trees, remnants of new materials, including paper, plastic, carpet scraps, wood scraps, scrap metal, building materials, packaging and rubble resulting from construction, remodeling, renovation, repair and demolition operations on pavements, houses, commercial buildings and other structures. 12 “Control” means, for purposes of this Agreement, the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a corporation, partnership, joint venture, or other association.
13 “Diversion” means diversion as defined in Public Resources Code §40124. 14 “Diversion Rate” means the percent of Solid Waste diverted from Disposal. 15 “Environmental Statutes” means, for the purposes of this Agreement, 42 U.S.C.

Sections 6901, et seq. and Sections 9600, et seq., and California Health and Safety Code Sections 25300, et seq., or successor statutes.
16 “Final Regulations” means the regulations under SB 1383 issued in November 2020.
17 “Food Scraps” means the following materials, that have been source-separated from other Solid Waste Matter : (i) all kitchen and table food waste; (ii) animal or vegetable waste that is generated during or results from the storage, preparation, cooking or handling of food stuffs; (iii) discarded paper (including paper containers and cartons) that is not coated, lined or waxed, and that is contaminated with Food Scraps; (iv) fruit waste, grain waste, dairy waste, meat waste, and fish waste; and (v) vegetable trimmings and houseplant trimmings. Food Scraps excludes manure, pet wastes, dead animals, and rotten material. Food Scraps are a subset of Organic Materials.
18 “Gross Rate Revenues” means all Rate revenues collected by COMPANY for providing Collection Services.

6 19 "Hazardous Waste" means all substances defined as Hazardous Waste, acutely Hazardous Waste, or extremely Hazardous Waste by the State of California in Health and Safety Code §25110.02, §25115, and §25117 or in the future amendments to or recodifications of such statutes or identified and listed as Hazardous Waste by the U.S.

Environmental Protection Agency (EPA), pursuant to the Federal Resource Conservation and Recovery Act (42 USC §6901 et seq.), all future amendments thereto, and all rules and regulations promulgated thereunder.
20 “Organic Material(s)” means Food Scraps and/or Yard Trimmings, either commingled or separate, that have been source-separated from other Solid Waste Matter. 21 “Owner” means the person holding the legal title or having a right to possession to the real property to which Collection Services are provided. 22 “Rates” means the service charges and Special Charges for Collection Services charged to each Subscriber receiving service under this Agreement. 23 “Reasonable Increased Costs” and EXCEPTIONAL COSTS shall include a profit margin to COMPANY calculated based on an operating margin of 90% on all costs except:
governmental or regulatory fees, franchise fees, the cost of a performance audit under section 2(B), the cost of compost provided under 6(J), or temporary services provided by COMPANY to CITY and charged at the rates in Exhibit A.
24 “Recyclable Material(s)” or “Recyclables” means the following materials, that have been source-separated from other Solid Waste Matter: (a) newspaper; (b) aluminum and ferrous cans; (c) glass jars and bottles; (d) certain plastic containers and certain packing materials; (e) certain scrap metals; (f) mixed paper including mail, magazines, catalogs, paperboard boxes, envelopes, advertisements, books without hardbound covers, and phone books; (g) corrugated cardboard; and (h) such other material that Company and City mutually agree may be accepted or removed from the foregoing for curbside recycling under this Agreement. 25 “Related Party” means any other Person under the same ownership and/or Control as Recology South Valley.
26 “Residue” means materials that remain after Processing Recyclable Materials and Organic Materials, which cannot be recycled, marketed, or otherwise utilized, including but not limited to materials such as rocks, contaminated paper, putrescible waste, and other debris. 27 “Schedule of Rates” means a listing of all charges per unit of measure established at amounts contained in Exhibit A and modified pursuant to the terms and conditions in Section 9 or Exhibit A2.
28 “Solid Waste” or “Refuse” means solid waste as defined in California Public

7 Resources Code, Division 30, Part 1, Chapter 2, Section 40191 and regulations promulgated thereunder, but excluding Recyclable Material, Organic Material, Construction and Demolition Debris, ashes, industrial wastes, abandoned vehicles and parts thereof, discarded home and industrial appliances, sewage sludge, biosolids, and manure. Notwithstanding any provision to the contrary, Solid Waste may include de minimis volumes or concentrations of waste of a type and amount normally found in Residential Solid Waste after implementation of programs for the safe collection, Recycling, treatment, and Disposal of Household Hazardous Waste in compliance with Section 41500 and 41802 of the California Public Resources Code as may be amended from time to time.
29 “Special Charges” means extra charges for certain special services for Residential and Commercial/Industrial Subscribers that are contained on the Schedule of Rates, and that may be billed by COMPANY.
30 “State” means the State of California.
31 “Street Sweeping Fines” means material collected as a result of street sweeping operations.
32 “Subscriber” or “Customer” means an individual or entity that subscribes to Collection Services provided by COMPANY pursuant to this Agreement. 34 “Term” means the term of this Agreement, as set forth in Section 2. 35 “Yard Trimmings” means the following materials, that have been source-separated from other Solid Waste Matter: green trimmings, grass, weeds, leaves, prunings, branches, dead plants, brush, tree trimmings, dead trees, Christmas trees, small pieces of unpainted and untreated wood, and other types of plant materials resulting from normal yard and landscaping maintenance, provided that all such materials are less than six inches (6”) in diameter and three feet (3’) in length. Notwithstanding the foregoing, Yard Trimmings do not include palm fronds, oleander, poison ivy or poison oak. Yard Trimmings are a subset of Organic Materials. 36 “Tipping Fee” means the fee charged by a Disposal or Processing facility to dispose or process one (1) Ton of municipal Solid Waste, not including any charges for Special Wastes, Bulky Waste, or Special Items.
37 “Ton” means a “short ton” of 2,000 pounds.

Section 1. Franchise Grant
CITY grants to COMPANY, and COMPANY hereby accepts from CITY the exclusive right, franchise and privilege to collect and dispose of all Solid Waste Matter produced, kept or accumulated in the City of Morgan Hill, together with the right and privilege to use and operate

8 upon the CITY maintained streets and other rights-of-way to the extent necessary to perform COMPANY’s obligations under this Franchise Agreement.

The right and privilege herein granted shall be subject to compliance with the provisions of CITY’s ordinances pertaining to the accumulation, collection and removal of Solid Waste Matter as they presently exist or as they may be amended during the term hereof, or any extension thereof, and any applicable State and Federal statutory or administrative laws and rules. For the purposes of this Agreement “Solid Waste Matter” is defined to mean Solid Waste, Recyclable Material, Organic Material, and Construction and Demolition Debris. COMPANY’s exclusive rights shall be subject to the following exceptions:
(A) Nonresidential recyclable materials source separated from other wastes by the waste generator that can be at least 95% recycled and for which the COMPANY cannot collect and recycle at a complete cost to the customer equal to or less than the complete cost to the customer charged by other vendors. “Complete cost” means all fees charged by a vendor to a nonresidential generator for recycling, hauling, or other services. (B) Any materials for which there is no charge for the hauling, handling, or disposal or any other fee designed to compensate the vendor removing the materials.

This Agreement shall become effective on the date set forth in the introductory paragraph.

Company accepts the terms of this Agreement as defining the scope of its exclusive rights to collect and dispose of Solid Waste Matter produced, kept or accumulated in the City of Morgan Hill, and this Agreement supersedes all prior franchise rights and prior agreements, including but not limited to the Original Agreement. Company waives any right or claim to provide solid waste and recyclables collection services in the City under any prior grant of franchise, contract, license or permit, including but not limited to the Original Agreement, and any right under Section 49520, et seq. of the Public Resources Code. THIS PROVISION SHALL SURVIVE THE EXPIRATION OR TERMINATION OF THIS AGREEMENT.

Section 2. Franchise Term and Renewal
(A) The term of the Agreement shall be for a period of ten (10) years and six (6) months, commencing at 12:01 a.m. on the 1st day of January, 2023, and ending at 11:59 p.m. on the 30th day of June 2033, except if earlier terminated as herein otherwise specified. During calendar year 2031, the parties shall meet and confer on the possible extension of the Term. (B) City has the right, at any time during the term of this agreement, to conduct an audit of the performance of COMPANY (herein called the “Performance Audit”), which shall be conducted as set forth in subsection (C) of this Section 2. (i) If after the City Council of CITY has reviewed a particular Performance Audit and has considered any evidence presented by COMPANY in connection therewith, the

9 council determines to its satisfaction that all covenants, provisions, terms and conditions of this Agreement on the part COMPANY to be performed, kept and observed, have not been fully and faithfully performed, kept and observed, then City may provide a notice of default as provided in Section 22(B), setting forth the specific instances of non-performance of this Agreement that City wishes company to correct. If Company fails to correct such instances of non-performance within the time frames required by Section 22(B), then this Agreement may be terminated by CITY at its option and without prejudice to any other remedy to which it may entitled to either at law, in equity, or under this Agreement by giving written notice of termination either by mail or personal service, to COMPANY not less than thirty (30) days prior to the date upon which the termination is to become effective. This right of termination shall be in addition to the right of CITY to terminate this Agreement under the provisions of Section 22 hereof.
(ii) In connection with the review of a particular Performance Audit, CITY reserves the right to propose any amendment or amendments of this Agreement which the City Council of CITY determines to be necessary by reason of the findings or results of the Performance Audit to carry out the intent of the terms and conditions of this Agreement.
(iii) In conjunction with any Performance Audit, CITY reserves the right to require changes to COMPANY’S operations that CITY determines to be necessary or appropriate by reason of the findings or results of the Performance Audit to carry out the intent of the terms and conditions of this Agreement. If the changes to the COMPANY’S operations entail additional costs or require additional services to be provided, COMPANY and CITY shall mutually agree on the compensation to be provided to COMPANY in advance of COMPANY’s implementation of such change.
(C) The performance audit shall:
(i) be performed by a qualified firm to be selected by CITY. (ii) be totally paid for by COMPANY and included as EXCEPTIONAL COSTS that are recovered in the next annual rate adjustment, and (iii) address all appropriate areas including, but not limited to the following areas, and shall provide specific recommendations for improvement in each area, namely:
(a) Overall organizational structure and management systems and procedures.

10 (b) Efficiency of collection operations, including any analysis of routes, schedules and the impact of franchise requirements.
(c) Compliance by COMPANY with provisions of this Agreement and the provisions of the SB 1383 regulations that apply directly to COMPANY by operation of law or are included in Exhibit C of this Agreement. (d) Staffing and management practices, including the deployment of management and supervisory personnel.
(e) Financial management practices, including COMPANY’s billing and collection system and its policies with regard to uncollected accounts. (f) Procedures for receiving and resolving customer complaints and concerns, including damage to customer-owner containers and disappearance of container covers.

(g) Procedures for the acquisition, maintenance and replacement of equipment; types of equipment; rationale for recent capital investments; and financing options.
(h) Utilization and management of facilities.

Section 3. City Fees
CITY and CONTRACTOR acknowledge that an exclusive franchise is a special agreement that has been negotiated between CITY and CONTRACTOR. The exclusive franchise that has been granted through this Agreement is intended to allow CONTRACTOR to use CITY property to provide collection services. The amount of the fees paid by COMPANY to CITY as set forth in this Agreement, in the aggregate, does not exceed CITY’s reasonable costs in conferring the benefits or granting the privileges conferred or granted by this Agreement to COMPANY, including, without limitation, access to CITY streets to operate heavy equipment, to collect refuse, and to place or to allow to be placed COMPANY’s collection containers within public rights of way; and the exclusive right to collect refuse within CITY’s jurisdiction for profit. Such costs to CITY are impossible or impracticable to calculate, but include, without limitation, staff time and the costs of legal counsel and other outside consultants to negotiate and to administer this Agreement, in addition to the City’s costs to maintain its streets and sidewalks, which COMPANY uses in the performance of services hereunder, it being agreed and understood that COMPANY’s vehicles used in performing those services are heavier than average vehicle weights such that they may cause greater wear and tear on CITY streets than typical vehicles.

In consideration of the exclusive franchise granted to CONTRACTOR by this Agreement,

11 CITY shall be paid and retain a franchise fee of fifteen and one-half percent (15.5%) (which was negotiated in good faith and at arms-length, does not exceed the fair market value of CITY property used by CONTRACTOR pursuant to this Agreement, and is consistent with the franchise fees paid by franchise waste haulers in other, similar jurisdictions in California) of all revenues received by the COMPANY from customers for services provided by the COMPANY in the CITY hereunder.

These revenues shall include, but shall not be limited to, fees received from customers for all regularly scheduled services, fees for “on-call” services, and all other revenues received by the COMPANY resulting from the COMPANY’s provision of services within the CITY, but excluding revenues received from recyclable commodities or compost.

Quarterly franchise fee payments must be computed and paid by COMPANY to CITY's Finance Department on or before April 30, July 31, October 31, and January 31 for the prior calendar quarter.

If any franchise fee payment, or recomputed amount, is not made on or before the due dates specified above, COMPANY must pay as additional compensation, an interest charge, computed from the applicable due date, at an annual rate equal to the prevailing commercial prime interest rate in effect on the due date, plus one percent (1%).

In addition to any late payment made in accordance with the above paragraph, if a payment is overdue by sixty (60) days or more, COMPANY will pay to CITY a sum of money equal to five percent (5%) of the amount due in order to defray additional costs and expenses incurred by CITY as a consequence of that delinquent payment.

No acceptance of any payment by CITY may be construed as an accord that the amount is in fact the correct amount, nor may acceptance of payment be construed as a release of any claim CITY may have against COMPANY for any additional sums payable under the provisions of this Agreement.

All amounts paid are subject to independent audit and recomputation by CITY. If, after audit, such recomputation indicates a franchise fee underpayment, COMPANY shall pay to CITY the amount of the underpayment within twenty (20) days of receipt of written notice from CITY that such is the case. If, after audit, any recomputation indicates a franchise fee underpayment of more than three percent (3%), COMPANY must also reimburse CITY, within twenty (20) days of written notification, for all reasonable costs and expenses incurred in connection with that audit and recomputation.

Section 4. Reserved
Section 5. Customer Billing Practices
COMPANY shall bill all customers on a monthly, bimonthly, or quarterly basis. Customer bills shall be on a format approved by the CITY and must be clear, concise, and understandable.

12 Bills also must clearly delineate all activity during the billing period, including optional charges, rebates, and credits. All bills shall only contain charges and rates that have been approved by the CITY for services performed under this contract.

COMPANY’s bills to customers shall be due 60 days after the billing date. COMPANY may charge customers who have not paid their bill on time a late fee equal to one and one-half percent (1.5%) per month of the bill amount.

The first billing to a customer after the start of service or a change of service shall be prorated based upon when the new or changed service commenced. Customers shall not be charged a late fee or otherwise penalized for any failure by COMPANY, including the failure to timely or correctly bill the customer.

In case of a billing dispute, COMPANY shall respond in writing to a written complaint from a customer within thirty (30) days.

COMPANY shall provide credits or refunds to customers who have been missed upon request provided that: (A) the customer notifies COMPANY by the end of the next business day; and (B) COMPANY is unable to provide collection within two (2) days after notification. For each event that service has been missed, the credit shall equal a pro-rata share of the billing for one full week. All credits for service must be issued no later than the customer's next billing cycle following the determination that a credit is warranted. Credit determinations by COMPANY shall be completed within thirty (30) days. For customers terminating service, refunds shall be issued promptly, but no later than thirty (30) days after the customer’s last day of service.

COMPANY shall enter into good faith negotiations with the owners or managers of mobile home parks and other commonly-billed developments to develop an equitable billing and monitoring system.

Unless otherwise expressly provided in this Agreement, all services provided by COMPANY hereunder shall be provided to customers that sign up for service with COMPANY and at rates not exceeding the rates provided for in this Agreement.

Section 6. Franchise Services
(A) COMPANY shall furnish the personnel, labor and equipment required for the billing, payment acceptance, collection, removal, handling, transfer, processing, marketing and disposal of all Solid Waste Matter generated within the corporate limits of the City of Morgan Hill, and to sweep all public streets and parking lots of City Facilities (as designated in Exhibit G) as set forth in Exhibit F, all in accordance with the terms and conditions set forth in this Agreement.

COMPANY shall also provide equipment, vehicles, personnel and supervision for the curbside collection of Recyclable Material and Organic Material to all single-family units and multi-family

13 units receiving residential Refuse collection and disposal service from COMPANY in Morgan Hill and for the collection of Recyclable Material and Organic Material from business establishments receiving Refuse collection and disposal service from COMPANY in Morgan Hill, all in accordance with the terms and conditions set forth in this Agreement. All containers provided by COMPANY shall conform to the provisions of Exhibit C. COMPANY shall collect all Recyclable Material and Organic Material placed in appropriate containers and properly set out by the generator.
(i) Organic Material shall be placed by the customer in a COMPANY-provided container or customer provided thirty-two-gallon (32-gallon) container or tied in bundles no greater than three (3) feet in length and two (2) feet in diameter. For residential customers with cart service, up to seven (7) additional thirty-two gallon (32-gallon) containers or bundles may be set out for collection by COMPANY. (ii) Upon request from a resident, COMPANY may send a representative to a home to verify that excess Yard Trimmings generated have been generated from that resident’s home. COMPANY will provide the resident a voucher(s) sufficient to dispose of Yard Trimmings at the San Martin Transfer Station or a different facility owned by COMPANY without a charge. Upon delivery to the San Martin Transfer Station or different facility owned by COMPANY, resident must provide said voucher and proof of residency where voucher was issued.
(iii) The COMPANY shall not be required to collect, and may leave on the curbside, any container or bundle which is contaminated by or mixed with Hazardous Waste, substantially contaminated by or mixed with non-Recyclable Material or non-Organic Material (for Recyclable Material and Organic Material containers, respectively), or any material that is in such a quantity as to indicate that it was not generated by the average reasonable use of the property. COMPANY shall leave notice with the load explaining why it was not collected.
(iv) Upon request, the COMPANY shall enter into good faith negotiations with the owners or managers of mobile home parks and other commonly-billed developments to institute recycling and organics collection systems that addresses the special needs of these properties. This provision is not intended, however, to require the COMPANY to use specialized equipment or containers at these properties, absent agreement with the mobile home parks or other commonly-billed developments to do so. (v) COMPANY shall collect household batteries that are contained in zipper plastic bags provided by the customer and placed on top of the container designated for Recyclable Material and used motor oil and filters that are placed in a COMPANY provided, sealed, oil container or COMPANY provided oil filter bag.
(B) COMPANY also agrees, as a part of the consideration for the awarding to it of the right, franchise and privilege for collecting Solid Waste Matter in the City of Morgan Hill, to

14 collect for CITY, without any charge, Solid Waste Matter from all City Facilities, at the locations and service levels specified in Exhibit G. Upon written notice to COMPANY, CITY may modify the City Facilities receiving service and the service levels for any City Facility from among the available service options set forth on the rate sheet. Notwithstanding the foregoing, COMPANY shall be entitled to compensation for collection services at CITY operated premises that significantly exceed those provided as of the date of this Agreement as EXCEPTIONAL COSTS in the event that such additional CITY services result in COMPANY creating an additional route or adding personnel to service such locations. Compensation for such additional services shall be in an amount equal to the number of additional services provided at the then established rate for the specific additional services.

Upon written direction from CITY, COMPANY will also collect Refuse generated at Cityidentified homeless encampments or other sites with extraordinary litter or refuse collection needs and provide any carts, bins, and debris boxes necessary for that purpose. The material must be loaded into the COMPANY-provided containers either by CITY personnel or other CITY contractors or discarded into the COMPANY-provided containers by residents of the homeless encampments themselves. COMPANY may recover its then-applicable franchised rates for performing these services as EXCEPTIONAL COSTS under Section 9 in its rates for the year following provision of the services.

All Recyclable Material and Organic Material collected from CITY premises will be sent for processing for diversion from landfill disposal if it is reasonably source separated from other Solid Waste Matter.

CITY staff and contractors serving CITY Facilities may haul and deposit Solid Waste, Construction and Demolition Debris, Recyclable Materials, Yard Trimmings and other Organic Materials generated in the course of routine CITY business (this would not include demolition of buildings or large construction projects) directly to any Transfer Station owned by COMPANY or another corporation affiliated with COMPANY without any charge for as long as the Transfer Station is owned by COMPANY, its current parent corporation, or its successor or assignee.

COMPANY also agrees to provide weekly parking lot sweeping services at all CITY premises, buildings, city-owned parking lots, and installations.
(C) Collection of Solid Waste, Recyclable Material and Organic Material shall be at the curbside of the customer’s property unless arrangements are made with COMPANY by the customer for on-premises, side yard or backyard pickup and payment of the additional rate for side yard or backyard pickups. COMPANY will collect and process Organic Materials in conformance with the Organic Materials provisions described in detail in Exhibit C to this Agreement. (D) COMPANY may provide additional services upon request of CITY subject to the establishment of a rate therefor. Provided, however, if COMPANY elects not to provide a proposed new service and so notifies CITY in writing, CITY retains the right to perform the proposed new service itself or to contract with another business entity to provide it, provided that the proposed

15 new service does not conflict with the exclusive rights granted to COMPANY by this Agreement. (E) COMPANY shall provide unlimited pickup service for residences with cart service and shall provide vouchers for community cleanup purposes in a form acceptable to CITY twice per year. There shall be no charge to customers or CITY for items brought to the transfer station with a voucher providing the materials brought to the transfer station comply with the limitations established by the voucher. Upon one (1) year notice by CITY, COMPANY shall no longer provide unlimited pickup service for residences and a volume-based (per container) system shall be implemented immediately. If a volume-based system is implemented, COMPANY shall make vouchers (commonly referred to as “extra can stickers”) for the temporary expansion of Solid Waste Matter collection service beyond the service level subscribed to by each customer available at two or more locations within the City of Morgan Hill and through the mail. One of these locations must be open a minimum of two (2) hours after 6 p.m. at least one evening per week and four (4) hours on Saturday or Sunday. If a volume-based system is implemented, COMPANY shall provide all residential customers with one (1) free voucher per year as an insert in a bill and that may only be used by Morgan Hill residents. In the event such vouchers are issued, COMPANY may implement a program to verify eligibility for voucher use.

For residential premises with bin service, COMPANY shall establish an “On-Call Bulky Item Collection Program” to collect bulky items and other difficult to collect items. COMPANY shall provide up to the Specified Amount of on-call bulky item collections to each premises per calendar year, at the request of the customer (i.e., the building owner or manager, not a tenant), and at no additional charge to the customer. For residential premises with bin service, the Specified Amount shall equal one-half of the number of units in the premises, rounded up (e.g., 10 collections/year for a 19-unit building). By mutual consent with any residential customer with bin service, COMPANY may replace some or all of the Specified Amount of on-call bulky item collections for such customer with equivalent volume debris box service for the collection of bulky items.

To be eligible for collection, bulky items must be set out by the customer within three feet of the public roadway, or any other location agreed by COMPANY and the customer that can be safely and efficiently accessed by COMPANY’S collection crew and vehicle. In addition, the customer must notify COMPANY, at the time the customer requests the service, what the bulky items will be. Bulky item collection shall be scheduled at a time mutually agreed by COMPANY and the customer during COMPANY’S normal collection hours.

For each bulky item collection, a customer may set out either:
(a) Up to two cubic yards of solid waste, properly bagged or bundled, or containerized in customer-provided disposable containers.
(b) Up to two pieces of furniture or appliances (emptied of any contents, if applicable).

A mattress/box spring set is eligible for collection as equivalent to one piece of furniture.

16 COMPANY shall not be required to collect: any individual item that weighs more than two hundred (200) pounds or is more than six feet (6’) in length; Construction and Demolition Debris; Hazardous Waste other than electronic waste; motor vehicles or parts; tires; liquids or sludge; dirt, rock, concrete or asphalt; or stumps or large limbs.

COMPANY shall provide information and CITY-approved guidelines on the program to the residential customers, including owners and/or property managers at housing complexes, at least annually. COMPANY shall provide draft guidelines to CITY and solicit CITY approval thirty (30) days prior to planned finalization of guidelines.

Unused bulky item collections shall not roll over to subsequent years. If a customer requests a bulky item collection in excess of the numbers specified above, COMPANY shall provide the service at the normal bulky item collection rate approved by CITY after notifying the customer of the charge.
(F) COMPANY shall provide regular, scheduled collection service for Residential collection of Recyclable Material on a biweekly (once every two weeks) basis on the same day as regular Refuse collection service. COMPANY shall provide a calendar to all residential customers by December 1 of each year indicating the biweekly collection schedule and street sweeping schedule affecting their residence during the following year. Collection from businesses shall be performed on a weekly schedule as arranged by the COMPANY with the participating businesses. (G) COMPANY shall not alter or adjust collection schedules without providing prior notice of at least (14) days to all service addresses, and any schedule modification shall not result in reduced service frequency to any customer. COMPANY shall collect and remove from any and all premises, within twenty-four (24) hours after demand, notice or request, any and all Solid Waste Matter that COMPANY shall have failed to collect and remove as required at the regular schedule time.
(H) CITY and COMPANY shall mutually agree upon the routes, days and hours for the collection of Solid Waste Matter. Unless so agreed, routes serving residential areas shall not reach the first customer earlier than 6:00 a.m. and must end no later than 7:00 p.m., and collections need only be made Monday-Friday, excluding holidays.
(I) Reserved
(J) CITY desires to purchase compost on behalf of compost customers of COMPANY up to a certain number of tons per calendar year to be determined by CITY on an annual basis. No later than December 1 of each calendar year of the Agreement, CITY shall notify COMPANY in writing of the number of tons of compost that the CITY will commit to purchase on behalf of COMPANY’s compost customers during the upcoming calendar year (the “Annual Compost Commitment”). CITY and COMPANY shall mutually agree on a form of documentation that may

17 be used by eligible customers to request CITY to pay COMPANY for compost tendered to such customer. The form will be published on the CITY website and, provided that CITY has not already met its Annual Compost Commitment, be made available by COMPANY to compost customers desiring to purchase at least forty (40) cubic yards or twenty (20) tons of compost and COMPANY shall inform such customers about the opportunity to have their compost paid for by CITY upon such customers submission and acceptance of the paperwork required by CITY. CITY shall supply COMPANY with documentation authorizing its purchase of compost hereunder prior to COMPANY’s tender of compost that is to be paid for by CITY. The compost customer shall be required to pay all transportation and any other costs associated with their purchases. CITY agrees that the price per ton of compost that CITY will pay for compost purchased under this section will be COMPANY’s then applicable market rate at the time of the sale and such price will be noted on the documentation approved by CITY that authorizes each sale.

At the end of each calendar year, COMPANY shall calculate the total price of all compost purchased by CITY under this section as set forth on the documentation approved by CITY throughout the year and include that amount as an EXCEPTIONAL COST in its rate application for the year following the sale of the compost. Notwithstanding the foregoing, in the event that COMPANY is unable to recover any amounts owed to COMPANY under this section through a corresponding adjustment to the maximum service rates for any reason, CITY shall pay COMPANY directly for such costs in quarterly installments over a twelve month period beginning on the date that a claim is made by any person, entity, agency, or party that would, if successful, prevent COMPANY from recovering payment for compost sold under this section or if COMPANY is restricted or prevented in any manner from including such costs in its EXCEPTIONAL COSTS or recovering amounts owed through the rates.

Notwithstanding anything else in this Agreement, CITY shall indemnify COMPANY against any and all losses, liabilities, fines, penalties, claims, damages, liabilities or judgments, including attorney’s fees, arising out of or relating to CITY’s or COMPANY’s alleged or actual failure to comply with Article XIlIC or XIIID of the California Constitution or SB 1383 with respect to the CITY’s or COMPANY’s performance under this Section 5(J). In contrast, COMPANY shall have no defense, indemnity or other obligation to CITY with respect to any and all losses, liabilities, fines, penalties, claims, damages, liabilities or judgments, including attorney’s fees, arising out of or relating to CITY’s or COMPANY’s alleged or actual failure to comply with Article XIlIC or XIIID of the California Constitution or SB 1383 with respect to CITY’s or COMPANY’s performance under this Section 5(J). Nothing in this Agreement shall be deemed an admission by CITY or COMPANY that Articles XIIIC or XIIID of the California Constitution apply to any portion of the rates charged by COMPANY under this Agreement and COMPANY does not represent or warrant that the provision of compost under this Agreement shall satisfy any of CITY’s obligations under SB 1383. (K) Provided that CITY has made a written funding request to COMPANY prior to January 31, COMPANY shall pay CITY a solid waste implementation fee in an amount to be set

18 by CITY, in addition to the franchise fee in an amount to be set by CITY. The proceeds of the solid waste implementation fee shall be used to fund the costs incurred by CITY to provide trash capture and litter abatement requirement activities, SB 1383 enforcement activities, and/or for other related CITY implementation activities as required by Local, Regional, State, or Federal permits, laws, and/or regulations relating to the collection and/or management of trash or solid wastes and the amount of the fee set by CITY shall not exceed the reasonably anticipated costs to be incurred by CITY for the foregoing activities. CITY may change the amount of the solid waste implementation fee from time to time based on its estimated actual costs for providing such activities, provided, however, that COMPANY shall not be required to pay the initial implementation fee or any changed fee until the rate adjustment required by Section 9(C) has taken effect. CITY shall provide COMPANY with a written funding request prior to January 31 of each year for payment requirements to become effective July 1 of the same calendar year and proportional payments will be made by COMPANY to CITY on a quarterly basis and submitted at the same time as the quarterly franchise fee payment. COMPANY may include these solid waste implementation fee funds as EXCEPTIONAL COSTS in its rate application for the year the implementation fee is to be paid by COMPANY to CITY.
(L) COMPANY shall comply with each of the following requirements:
(i) All collection vehicles and equipment shall be modern and so constructed and maintained to prevent leakage, spillage and overflow. COMPANY shall maintain all vehicles, detachable containers and debris boxes in a clean and sanitary condition and shall perform such maintenance as is necessary to assure that each vehicle and piece of equipment is capable of performing all functions for which it was designed. COMPANY shall maintain an equipment replacement schedule to be provided to CITY upon its request.
(a) All trucks and equipment shall be clearly identified with COMPANY name, a current local business telephone number, and a vehicle identification number in letters not less than two and one-half (2-1/2) inches in height. (b) CITY may refuse to permit the operation within the City limits of any vehicle not adequately serviced, cleaned or in need of repair. Removal of vehicles for servicing and repair shall not relieve the COMPANY from maintaining all collection schedules.
(ii) COMPANY shall not litter premises in the process of making collections nor allow Solid Waste Matter to blow or fall from any vehicles used for collections.

COMPANY shall replace lids or covers on containers immediately after emptying the same and shall repair or replace at its expense any containers damaged as a result of its handling thereof, normal wear and tear excepted. COMPANY shall clean up all spills including oil and debris on the streets resulting from its operation.

19 (iii) COMPANY shall establish and maintain an office where complaints may be made.

Such office shall have a responsible individual available daily between the hours of eight o’clock a.m. and five o’clock p.m., excepting Saturday, Sunday and such holidays as are recognized by COMPANY and approved by CITY. The following holidays have been approved by City: New Year’s Day, Martin Luther King Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, the day after Thanksgiving, and Christmas Day. Calls for missed collections shall be received twenty-four (24) hours per day.
(iv) CITY agrees to require all customers to place their Refuse in metal containers or wheeled carts provided by the COMPANY. COMPANY shall offer residents their choice of 32-gallon, 48-gallon, 64-gallon, and 96-gallon carts for Refuse collection.

Customers may place any excess Refuse that does not fit into their cart or container in plastic bags alongside their cart or container. No container provided by the customer shall exceed 32 gallons in size and 70 pounds in weight when full, and COMPANY shall not be required to pick up materials that are not placed in containers as above specified. COMPANY shall provide all residential customers with one 48gallon wheeled cart for Refuse collection at no additional charge. At the customer’s request, smaller containers may be provided if COMPANY opts to provide smaller containers.
(v) COMPANY shall provide residents with appropriate recycling containers reasonably acceptable to CITY for the collection of Recyclable Materials. At all times the containers shall be the property of the COMPANY. CITY and COMPANY agree that all curbside containers provided by the CITY prior to the effective date of this AGREEMENT shall be the property of the COMPANY.

COMPANY shall make a reasonable effort to maintain or replace damaged or lost recycling containers and to ensure that new customers are provided recycling containers within one week of commencing service.

COMPANY shall offer residents their choice of containers including bins, 32- gallon carts and 64-gallon carts for Recyclable Material and 64-gallon and 96- gallon carts for Organic Material. Residents that do not typically set out Yard Trimmings will also be offered a 32-gallon cart for Organic Material. The initial mix of containers offered to residents by the COMPANY shall include one cart for Recyclable Material and one cart for Organic Material, in addition to the cart for Solid Waste. Upon customer request, COMPANY shall provide and deliver indoor food waste collection containers to residential customers. COMPANY shall assist customers in locking organic collection containers upon request.

COMPANY shall provide additional containers to any resident requesting additional containers for Recyclable Material or Organic Material collection service provided the request is consistent with the amount of Recyclable Material

20 or Organic Material potentially generated at the residence.

COMPANY shall provide businesses with recycling containers adequately sized to contain cardboard for recycling and reasonably acceptable to CITY for the collection of Recyclable Material. At all times the containers shall be the property of the COMPANY.
(vi) COMPANY shall replace all Solid Waste, Recyclable Material, and Organic Material containers used by its customers in an upright position, in approximately the same location where the containers were immediately before COMPANY emptied them and use best efforts to replace containers with lids closed.

COMPANY shall return all commercial bins to the location where the containers were immediately before COMPANY emptied them, within any enclosures provided and shall make reasonable efforts to close bin lids and shall close any doors or gates provided for screening the bins. COMPANY shall instruct its employees to comply with the foregoing requirements and shall exercise sufficient supervision of its employees to assure that these instructions are followed. (vii) COMPANY shall not collect Yard Trimmings during the collection of Solid Waste unless the Yard Trimmings are not reasonably visible to the COMPANY employee.

COMPANY shall make reasonable efforts to not collect corrugated cardboard during the collection of residential garbage unless the cardboard is not reasonably visible to the COMPANY employee. If, prior to servicing the container, yard trimmings or cardboard become visible to a COMPANY employee, said employee shall not empty that container. COMPANY employees shall leave a CITYapproved explanatory notice on all garbage containers not emptied because they contained yard trimmings or cardboard. If a customer requests that the COMPANY return to an address to collect garbage that has had Yard Trimmings or cardboard removed from it and is now collectable, COMPANY shall return within 24 hours after the customer has agreed to pay the extra collection fee contained in Exhibit A, Schedule of Rates.
(viii) COMPANY shall be responsible for transporting Solid Waste, Construction and Demolition Debris, Recyclable Material and Organic Material collected under this Agreement to designated processing facilities. As of the date of this Agreement, the current designated processing facilities are identified on Exhibit D. COMPANY and CITY acknowledge that the designated facilities are subject to change throughout the term of this agreement based on external factors and market conditions.
(ix) COMPANY will make reasonable efforts to ensure that all Recyclable Material are not disposed of in landfills.

21 (x) When recyclables are not collected from any customer for any reason including the presence or suspected presence of Hazardous Waste or contaminants, COMPANY shall notify its customer in writing why the collection was not made. COMPANY has represented to CITY that COMPANY will carry out its duties to notify all agencies with jurisdiction, including the California Department of Toxic Substance Control and Local Emergency Response Providers, and if appropriate, the National Response Center, of reportable quantities of Hazardous Waste, found or observed in solid waste anywhere within the CITY, including on, in, under or about CITY property, including streets, easements, rights of way and city waste containers. In addition to other required notifications, if COMPANY observes any substance which it or its employees reasonably believe or suspect to contain Hazardous Waste unlawfully disposed of or released on CITY property, including streets, storm drains, or public right of way, COMPANY also will immediately notify the City Manager, or the City Manager's designee.
(xi) COMPANY shall satisfactorily provide comprehensive customer service for waste diversion programs, including but not limited to responding to complaints, answering questions and handling missed pick-ups. Missed pick-ups shall be collected within one business day of being reported. A record of customer complaints and disposition shall be maintained by COMPANY and made available to CITY at CITY’s request.
(xii). COMPANY shall develop and implement an outreach and education program as set forth on Exhibit E and shall also provide supplemental education and outreach related to Organic Material collection as set forth in Exhibit C. Upon mutual agreement, COMPANY may also provide additional assistance in conducting the public awareness/education program. Such assistance may include but is not limited to: 1) providing assistance in developing educational and promotional programs and materials; 2) distributing educational and promotional materials; 3) providing recycling vehicle(s) and personnel for appearances at special events such as parades, fairs, etc.; and 4) distributing an annual calendar for recycling collection and street sweeping. CITY may, at its discretion, require substantial and extraordinary additional education and outreach activities to be provided by COMPANY beyond those described above. COMPANY may recover its reasonable and necessary costs for performing these activities as EXCEPTIONAL COSTS in its rate application for the year following provision of the services. (xiii) Within thirty (30) days after the end of each month, COMPANY shall submit to CITY written monthly reports, in a format reasonably acceptable to the CITY, that provide the following information:
a. Collected Tonnages - a monthly summary of the quantity, by weight, of each recyclable material collected.

22 b. Participation Rates - a monthly reasonably estimated summary of the total number of households served per route, the actual number of households participating, the number of pickups per route, the percentage of pickups by route, and the number of businesses participating in the cardboard recycling program.
c. Recycling Costs and Revenues - a monthly summary of the total dollar amount received in revenue or paid out in processing cost for Recyclable Materials collected
(xiv) Equipment Maintenance - COMPANY shall maintain all equipment in a clean condition and in good repair at all times. All parts and systems of the equipment shall operate properly and be maintained in a condition reasonably satisfactory to CITY. COMPANY shall repaint all equipment on a frequency necessary to maintain a positive public image as reasonably determined by the CITY. (xv) Bins and carts for Garbage, Recyclable Material and Organic Material shall be delivered to the customer within five (5) working days of the request for service by the customer.
(xvi) Care shall be taken by the COMPANY’s employees to prevent damage to bins and carts by unnecessary rough handling. Bins and carts damaged by the COMPANY’s employees shall be replaced by the COMPANY, at COMPANY’s sole expense, within five (5) working days of the request by the customer or by the CITY. (xvii) Change in bin size. COMPANY shall within five (5) working days of request by customer, exchange bins for a larger or smaller size bin. Customer may request a change in bin size twice a year at no additional charge. Additional bin exchanges shall be subject to a handling fee.
(xviii) Bin Cleaning. COMPANY shall within five (5) working days of request by customer, exchange bins to provide a clean bin. Customer may request a clean bin once a year at no additional charge. Additional bin exchanges shall be subject to a handling fee.

Section 7. Performance Standards and Liquidated Damages (A) General. The Parties find that as of the time of the execution of this Agreement, it is impractical, if not impossible, to reasonably ascertain the extent of damages which shall be incurred by City as a result of a breach by COMPANY of its obligations under this Agreement.

The factors relating to the impracticability of ascertaining damages include, but are not limited to, the fact that: (i) substantial damage results to members of the public who are denied services or

23 denied quality or reliable service; (ii) such breaches cause inconvenience, anxiety, frustration, and deprivation of the benefits of the Agreement to individual members of the general public for whose benefit this Agreement exists, in subjective ways and in varying degrees of intensity which are incapable of measurement in precise monetary terms; (iii) exclusive services might be available at substantially lower costs than alternative services and the monetary loss resulting from denial of services or denial of quality or reliable services is impossible to calculate in precise monetary terms; and (iv) the termination of this Agreement for such breaches, and other remedies are, at best, a means of future correction and not remedies which make the public whole for past breaches. (B) Service Performance Standards; Liquidated Damages for Failure to Meet Standards. The Parties further acknowledge that consistent, reliable Collection Services, as described in detail in Section 6 of this Agreement, are of utmost importance to City and that CITY has considered and relied on COMPANY’s representations as to its quality-of-service commitment in awarding the Agreement to it. The Parties recognize that some quantified standards of performance are necessary and appropriate to ensure consistent and reliable service and performance. The Parties further recognize that if COMPANY fails to achieve the performance standards or fails to submit required documents in a timely manner, CITY and its residents and businesses will suffer damages, and that it is, and will be, impractical and extremely difficult to ascertain and determine the exact amount of damages that CITY will suffer. Therefore, without prejudice to CITY’s right to treat such non-performance as an event of default, the Parties agree that the Liquidated Damages amounts established in this Agreement represent a reasonable estimate of the amount of such damages considering all of the circumstances existing on the Effective Date of this Agreement, including the relationship of the sums to the range of harm to CITY that reasonably could be anticipated and the anticipation that proof of actual damages would be costly or impractical.

Before assessing Liquidated Damages, CITY shall give COMPANY notice of its intention to do so. The notice will include a brief description of the incident(s) and non-performance. CITY may review (and make copies at its own expense) all information in the possession of COMPANY relating to incident(s) and/or non-performance. COMPANY may, within ten (10) Business Days after receipt of notice, request a meeting with CITY. CITY may present evidence of nonperformance in writing and through testimony of its employees and others relevant to the incident(s) and non-performance. CITY Contract Manager will provide COMPANY with a written explanation of their determination on each incident(s) and non-performance prior to authorizing the assessment of Liquidated Damages under this Section 6.

Should such notices of CITY intention to assess Liquidated Damages exceed $10,000 in total during any 120-day period, COMPANY may within ten (10) Working Days of receipt of such notice representing the amount exceeding $10,000 for such period request the opportunity to meet with the City Manager or their designee to respond to the intended assessment. If COMPANY has made such request within the required timeframe, the intended assessment of Liquidated Damages will not be imposed on COMPANY until COMPANY has been afforded the opportunity to meet with the City Manager or their designee to respond to the intended assessment. In such case, the decision of the City Manager or their designee shall be final and COMPANY shall not be subject

24 to, or required to exhaust, any further administrative remedies. If the City Manager or their designee is acting as the City Contract Manager, the City Manager or their designee shall designate an alternative City representative to meet with COMPANY. Should COMPANY not exercise its right to respond to the assessment as described in this paragraph, and in all other cases, the decision of City Contract Manager shall be final and COMPANY shall not be subject to, or required to exhaust, any further administrative remedies. COMPANY shall pay CITY the amount assessed within 30 days of receipt of the original assessment or the Director’s decision, whichever is later.

Notwithstanding the foregoing or anything else in this Agreement, COMPANY shall not be required to pay Liquidated Damages in excess of the then applicable Annual Liquidated Damages Maximum during each twelve-month period beginning July 1 and ending June 30 of each agreement year. The initial Annual Liquidated Damages Maximum shall be equal to $30,000. The Annual Liquidated Damages Maximum shall be increased or decreased throughout the Term as follows:
i) The Annual Liquidated Damages Maximum shall be increased from $30,000 to $60,000 effective the year following any year that the Annual Liquidated Damages Maximum was $30,000 during such year and COMPANY was assessed Liquidated Damages of $30,000 or more during such year and such assessment was determined to be justified after a meeting between COMPANY and CITY Manager; ii) The Annual Liquidated Damages Maximum shall be increased to $90,000 effective the year following any year that the Annual Liquidated Damages Maximum was $60,000 during such year and COMPANY was assessed Liquidated Damages of $60,000 or more during such year and such assessment was determined to be justified after a meeting between COMPANY and CITY Manager;
iii) The Annual Liquidated Damages Maximum shall be decreased to $60,000 effective the year following any year that the Annual Liquidated Damages Maximum was $90,000 and COMPANY was assessed Liquidated Damages of less than $60,000; and iv) The Annual Liquidated Damages Maximum shall be decreased to $30,000 effective the year following any year that the Annual Liquidated Damages Maximum was $60,000 and COMPANY was assessed Liquidated Damages of less than $30,000.

For the avoidance of doubt, Liquidated Damages in excess of the applicable Annual Liquidated Damages Maximum shall not be carried over to subsequent years. The Annual Liquidated Damages Maximum shall remain the same from year to year unless and until one of the events in (i) through (iv) above trigger a modification to such amount. In the event that CITY conducts a Performance Audit during any year that the Annual Liquidated Damages Maximum is $90,000, such Performance Audit will not be considered an EXCEPTIONAL COST and COMPANY shall be responsible for the cost of such Performance Audit up to a maximum of $50,000. (C) Amount. City may assess $300 Liquidated Damages for each calendar day or

25 event, as appropriate, for which COMPANY is determined to have failed to meet the performance standards described and listed in Section 6(L)(i) through 6(L)(xviii). In calculating the total assessment, each customer experiencing the substandard service shall count as a separate instance or event. It is agreed and understood that any time period for performance of duties stated in Section 6(L)(i) to (xviii) is a material provision of this Agreement.

Section 8. Franchise Representative and Inspections
(A) COMPANY shall assign a qualified person to be in charge of its operations in the CITY and shall inform CITY of such person’s identity and experience, and provide direct contact information for such person, without an intermediary person, including e-mail address and telephone number. It shall be such person’s responsibility to assure that all collection operations are effectively performed and all complaints courteously handled and satisfactorily resolved. (B) To ensure that the laws governing the performance of this Agreement are complied with, a representative of CITY may inspect, review and observe the operations of COMPANY during the term of this Agreement without prior notice. At CITY’s request, COMPANY shall make designated personnel available to accompany CITY inspectors provided a minimum of twenty-four (24) hour notice has been given to COMPANY by CITY.

Section 9. Franchise Collection Rates
(A) COMPANY shall not charge any amount in excess of the approved schedule of service rates for any services required or permitted to be performed by the terms of this Agreement.

The approved service rates are those set forth in Exhibit A attached hereto and incorporated herein by reference, as such Schedule of Rates may hereafter be adjusted as provided herein. (B) COMPANY shall submit a request for an adjustment of service rates no later than March 1 of any given year if an annual adjustment under this subsection (B) is desired by the COMPANY. Any approved change in service rates under this subsection shall become effective on July 1 of the same calendar year. For purposes of adjustment, the base rates shall be the rates in effect on January 1, in the calendar year the adjustment is made.

The annual adjustment under this subsection shall be calculated using the formula set forth in Exhibit A2.
(C) In addition to the adjustment provided for in Section 9(B) herein, the parties agree that service rates shall be adjusted in an amount sufficient to cover COMPANY’S Reasonable Increased Costs resulting from any extraordinary changes in circumstances that increase the COMPANY’s costs of providing service hereunder and that are substantially beyond the control of the COMPANY (including, without limitation, revisions to laws, ordinances, regulations, or other Applicable Law, or the interpretation or enforcement thereof; any change in governmental or regulatory fees; and the unavailability for reasons beyond COMPANY’s control of any facility

26 to which COMPANY delivers material).

The parties furthermore agree to adjust the service rates in a mutually agreed manner to cover COMPANY’s Reasonable Increased Costs of the following, which adjustment shall be a condition to COMPANY implementing the following:
(i) City’s direction of CONTRACTOR to implement volume-based rates for residential collection;
(ii) Following prior written approval by City of a COMPANY proposal, costs of testing and implementing alternative collection vehicle fueling strategies such as electricity, hydrogen and hybrid propulsion, as described in Recital I; and (iii) Changes in the franchise fee, implementation fee, or any other fee payable to CITY pursuant to this Agreement.

In addition to the above changes in the service rates, COMPANY shall also be entitled to temporary one-year adjustments in the service rates to recover the Reasonable Increased Costs for additional temporary services provided by COMPANY upon written request by CITY (EXCEPTIONAL COSTS). The temporary adjustment will not be included in the base rate used to calculate the following year’s rate adjustment request. EXCEPTIONAL COSTS shall include, but are not limited to, the reasonable and necessary costs associated with:
a. A performance audit required by CITY pursuant to Section 2(B) unless the performance audit is conducted during any year that the Annual Liquidated Damages Maximum is $90,000. In the event that a Performance Audit is conducted during any year that the Annual Liquidated Damages Maximum is $90,000, the first $50,000 in performance audit costs are excluded from the calculation of EXCEPTIONAL COSTS;
b. Cleanups of homeless encampments and other sites pursuant to Section 6(B); c. Special on-call collections conducted upon written request by CITY, provided that such collections are not made for the personal benefit of a public official or appointed city employee;
d. Additional vouchers provided to residents, institutions, or businesses at City’s request for free disposal at the San Martin Transfer Station; e. Additional temporary public education services beyond those otherwise required by Exhibits C and E as set forth in Section 6(L)(xii); f. Additional city services that qualify for additional compensation as described in Section 6(B);
g. Compost provided or delivered by COMPANY as described in Section 6(J); and

27 h. Any other temporary services requested by CITY the costs of which the parties mutually agree shall be treated as EXCEPTIONAL COSTS.
(D) Upon confirmation by CITY that COMPANY has submitted an accurate and correctly calculated request for an adjustment of service rates, CITY shall approve new maximum service rates and shall notify COMPANY of such maximum service rates on or before May 1 of the year the adjustment is made. COMPANY may charge service rates that are less than or equal to the maximum service rates approved by CITY.

Should an index named in Exhibit A2 not be published in October of any given year, the calculations shall be performed using the most recent index values of a month immediately preceding the October contemplated by this Amendment.
(E) COMPANY agrees to provide eligible low-income residents with a 20% discount for residential service provided that:
(i) The resident applying for the discount can prove that they are eligible to receive the “lifeline” discount rate offered by Pacific, Gas & Electric. COMPANY may require reverification of eligibility annually. In the event that this utility discount is no longer offered, the COMPANY and the CITY shall meet to agree upon a replacement measure of eligibility. A change in the eligibility requirements for PG&E’s “lifeline” discount rate shall be treated as a change in Applicable Law under subsection (C) above; and
(ii) The resident subscribes to single-can garbage service if a volume-based system is implemented.

Section 10. Company Providing Criteria to Review Development Plans.

If requested by CITY, COMPANY shall provide CITY with examples of specific criteria by which development plans for residential and nonresidential units may be reviewed by CITY concerning the location of Solid Waste Matter containers and appropriate screening thereof, which criteria CITY may choose to utilize in the review of development plans.

Section 11. Franchise Service Termination.

COMPANY may terminate service to residential customers who are one hundred twenty (120) days in arrears in payment of rate charges and nonresidential customers who are sixty (60) days in arrears in payment of rate charges, respectively, provided COMPANY:
(A) Shall give a customer whose service may be cut off at least (30) days written notice prior to the proposed service termination date.

28 (B) Shall notify CITY in advance of each proposed service termination by property location.
(C) Shall monitor each property location at which service has been terminated and notify CITY of any problems observed, including accumulation of garbage on the premises. (D) Shall promptly restore service when all amounts owing have been paid.

Section 12. Franchise Disaster Assistance
(A) In the event a wartime, natural, physical or other disaster in or proximate to the CITY limits resulting in the declaration of a State of Emergency by the duly authorized authority or City Council, COMPANY shall make available to CITY, all trucks, equipment and personnel normally performing services under this Agreement, for emergency operations conducted or directed by the CITY emergency organization, provided that CITY and COMPANY mutually agree it is safe and practicable to do so.
(B) Upon consent from COMPANY, such consent which shall not be unreasonably withheld based on the circumstances giving rise to the State of Emergency, CITY shall have the right to take temporary possession of all such equipment provided by COMPANY, and to temporarily employ all COMPANY personnel who voluntarily agree to serve as emergency operation forces of CITY, under the direction and control of the CITY Emergency Services Director.
(C) COMPANY shall use efforts to make available, in addition to the equipment and personnel above, equipment and personnel from those COMPANY operations and resources not serving CITY, to the extent necessary to conduct effective refuse, waste and debris removal during any declared State of Emergency to the specifications of the CITY Emergency Services Director. (D) CITY shall not be required to compensate COMPANY in any manner or form for COMPANY provision of vehicles, personnel or equipment that conforms with the regular level of service provided under this Agreement within the CITY limits, when made available during a declared State of Emergency. When additional vehicles, personnel hours or equipment are provided during an emergency that exceed the level of service provided under this Agreement, CITY shall compensate COMPANY for actual expenses incurred by COMPANY in providing additional vehicles, personnel hours or equipment upon submission by COMPANY to CITY of detailed records of costs and expenses actually borne by COMPANY, and upon approval by the Federal government of CITY as reimbursement of expenses incurred by COMPANY during a disaster.

Section 13. Franchise Indemnification