Morgan Hill City Council
December 7, 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, December 7, 2022 7:00 PM
Hybrid Meeting
17555 Peak Avenue, Morgan Hill, CA 95037 and Virtual (Link to join the meeting can be found below)
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:
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]

December 7, 2022
2 CALL TO ORDER

ROLL CALL ATTENDANCE

DECLARATION OF POSTING AGENDA

SILENT INVOCATION

PLEDGE OF ALLEGIANCE

RECOGNITIONS

PROCLAMATIONS

PRESENTATIONS

CITY COUNCIL REPORTS
Mayor Constantine

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

December 7, 2022
3 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 CITY'S ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2022
Recommendation:

Accept the City’s Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2022.

2. ACCEPT THE ANNUAL SENATE BILL (SB) 165 REPORT FOR COMMUNITY FACILITIES DISTRICT NO. 2014-1 (FISHER CREEK)
Recommendation:

Accept and file the report.

3. ADOPT RESOLUTION APPROVING AND MAKING FINDINGS RELATED TO THE ASSEMBLY BILL (AB) 1600 DEVELOPMENT IMPACT FEE ANNUAL REPORT FOR FISCAL YEAR 2021-22
Recommendation:

1. Adopt resolution making findings for unexpended development impact fees; and

2. Accept the annual development impact fee report.

4. ADOPT ODINANCE NO. 2339, NEW SERIES, APPROVING A ZONING MAP

AMENDMENT FOR A MIXED-USE DOWNTOWN PLANNED DEVELOPMENT
COMBINING DISTRICT ON A 1.09-ACRE SITE LOCATED EAST OF
MONTEREY ROAD BETWEEN 1ST STREET AND 2ND STREET (ZA2022- 0004: MONTEREY – LEAL GRANADA HOTEL) APN: 726-14-074
Recommendation:

December 7, 2022
4 Waive the reading, adopt Ordinance No. 2339, 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.

5. ADOPT ORDINANCE NO. 2340, NEW SERIES, ADDING CHAPTER 15.62 (ELECTRIC VEHICLE INFRASTRUCTURE) TO TITLE 15 (BUILDINGS AND

CONSTRUCTION) TO THE MORGAN HILL MUNICIPAL CODE REQUIRING

THE ADDITION OF ELECTRIC VEHICLE INFRASTRUCTURE FOR PARKING

THAT SERVES NEWLY CONSTRUCTED AND EXISTING BUILDINGS
Recommendation:

Waive the reading, adopt Ordinance No. 2340, 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.

6. ADOPT HAZARDOUS VEGETATION ABATEMENT RESOLUTION, EXEMPT

FROM CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) UNDER
SECTION 15304(i)
Recommendation:

Adopt resolution declaring weeds and brush to be a nuisance and setting the hazardous vegetation public hearing on February 15, 2023.

7. APPROVE CITY OF MORGAN HILL'S SANITARY SEWER MANAGEMENT

PLAN (SSMP) AS REQUIRED BY STATE WATER RESOURCES CONTROL BOARD, EXEMPT FROM CEQA UNDER SECTION 15302
Recommendation:

Adopt resolution approving the Sanitary Sewer Management Plan (SSMP).

8. APPROVE FIRST AMENDMENT TO THE SPECTRUM PACIFIC WEST, LLC

OPEN TRANSPORT NETWORK (OTN) FACILITIES LICENSE AGREEMENT, EXEMPT FROM CEQA CLASS 1, EXISTING FACILITIES
Recommendation:

Approve the First Amendment to the Spectrum Pacific West, LLC License Agreement.

9. APPROVE FINAL MAP FOR ROSEWOOD - TRACT NO. 10599 (JUAN

HERNANDEZ DRIVE AND BARRETT AVENUE) AND RELATED

SUBDIVISION IMPROVEMENTS AGREEMENT
Recommendation:

1. Approve the Final Map;

2. Authorize the City Manager to execute the Subdivision Improvements Agreement with BFH CM LLC; and

3. Authorize the recordation of the Final Map and Subdivision Improvements

December 7, 2022
5 Agreement.

10. APPROVE THE PURCHASE AND INSTALLATION OF THREE GENERATORS

FOR UTILITIES, CATEGORICALLY EXEMPT FROM CEQA UNDER
SECTION 15301
Recommendation:

Approve and authorize the City Manager to execute an agreement with Edward R. Bacon in the amount of $315,000 for the purchase and installation of three generators.

11. APPROVE CONSULTANT AGREEMENT WITH HINDERLITER DE LLAMAS &

ASSOCIATES (HDL) FOR SALES AND USE TAX AUDIT SERVICES AND

BUSINESS LICENSE ADMINISTRATION AND COMPLIANCE SERVICES Recommendation:

1. Approve an agreement with Hinderliter De Llamas and Associates (HdL), for sales and use tax audit, and business license administration and compliance services; and

2. Authorize the City Manager to execute and administer that certain agreement.

12. APPROVE FIRST AMENDMENT TO THE CAL-WEST LIGHTING AND SIGNAL MAINTENANCE, INC. MAINTENANCE SERVICE AGREEMENT, EXEMPT FROM CEQA UNDER SECTION 15301
Recommendation:

1. Approve the first amendment to the maintenance service agreement with Cal-West Lighting and Signal Maintenance, Inc. for $200,000 for a total contract amount of $587,600; and

2. Authorize the City Manager to execute and administer the first amendment to the maintenance service agreement with Cal-West Lighting and Signal Maintenance, Inc.

13. APPROVE CONSULTANT AGREEMENT WITH AKEL ENGINEERING FOR

SEWER SYSTEM MASTER PLAN UPDATE
Recommendation:

1. Authorize the City Manager to execute a consultant agreement with Akel Engineering Group, Inc. in the amount of $180,827 to update the Wastewater System Master Plan; and

2. Adopt a resolution appropriating $80,827 from Fund 641 amending the

December 7, 2022
6 Fiscal Year (FY) 2022-23 Capital Improvement Budget.

14. APPROVE THE PART-TIME TEMPORARY AND SEASONAL EMPLOYEES SALARY SCHEDULE EFFECTIVE JANUARY 1, 2023
Recommendation:

Approve the Part-Time Temporary and Seasonal Employees salary schedule effective January 1, 2023.

15. APPROVE RESPONSE TO 2022 CIVIL GRAND JURY REPORT "IF YOU ONLY READ THE BALLOT TITLE, YOU'RE BEING DUPED"
Recommendation:

1. Approve response to 2022 Civil Grand Jury Report "If You Only Read the Ballot Title, You're Being Duped," and

2. Authorize the Mayor to sign the response.

16. APPROVE PACIFIC GAS AND ELECTRIC COMPANY AGREEMENT FOR

UNDERGROUNDING OVERHEAD UTILITIES AS PART OF THE HALE

AVENUE EXTENSION PROJECT
Recommendation:

Approve and authorize the City Manager to execute and administer a Pacific Gas and Electric Company Agreement for undergrounding overhead utilities as part of the Hale Avenue Extension Project for a not to exceed amount of $63,876.72

17. APPROVE THE NOVEMBER 16, 2022 CITY COUNCIL MEETING MINUTES Recommendation:

Approve minutes.

18. DELEGATE THE AUTHORITY TO CITY MANAGER TO ACCEPT DONATIONS

FROM SHOE PALACE
Recommendation:

Delegate the authority to City Manager to accept donations from Shoe Palace.

PUBLIC HEARINGS

19. INTRODUCE ORDINANCE AMENDING THE ZONING CODE TO UPDATE

ACCESSORY DWELLING UNIT PROVISIONS TO COMPLY WITH STATE

LAW AND MAKING MINOR CORRECTIONS TO VARIOUS PROVISIONS, EXEMPT FROM CEQA UNDER SECTION 15061(b)(3)
Recommendation:

December 7, 2022
7 1. Open/close the public hearing;

2. Waive first and second reading of the Ordinance Amendment; and

3. Introduce Ordinance Amendment.

OTHER BUSINESS

20. AUTHORIZE INITIATION OF NEGOTIATIONS WITH DUB BASEBALL AND

USA BMX FOR DEVELOPMENT AT BUTTERFIELD PARK SITE
Recommendation:

Authorize staff to pursue lease/partnership agreements with Dub Baseball and USA BMX for development of portions of the Butterfield Park site.

21. INTRODUCE AN ORDINANCE UPDATING THE CITY WATER WASTE

PROVISIONS CATEGORICALLY EXEMPT FROM CEQA UNDER SECTION 15307
Recommendation:

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

2. Introduce the ordinance updating the City's water waste provisions.

22. RECEIVE MONTHLY BUDGET UPDATE AND OCTOBER 2022 FINANCIAL

AND INVESTMENT REPORTS
Recommendation:

Accept and file report.

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

December 7, 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.

December 7, 2022
9

1 CITY COUNCIL STAFF REPORT
MEETING DATE: December 7, 2022
PREPARED BY:

Dat Nguyen, Finance Director
APPROVED BY: City Manager

ACCEPT THE CITY'S ANNUAL COMPREHENSIVE FINANCIAL
REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2022

RECOMMENDATION(S)
Accept the City’s Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2022.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Preserving and Cultivating Public Trust
2022-2023 Strategic Priorities
Community Outreach, Engagement, and Messaging
REPORT NARRATIVE:

The Fiscal Year 2021-22 Annual Comprehensive Financial Report (ACFR) is presented for your review. Each year the City engages an independent firm to audit the books and accounts of the City’s general ledger. Included in this audit are the review and verification of all finance processes. An annual audit is required by state law and by bond covenants.

The ACFR presents the operations and financial activity of all the City’s various funds, including the General Fund. It includes an unmodified audit opinion from Maze & Associates, the City’s external auditors, stating that the financial statements present fairly the results of operations for the year ended June 30, 2022, in conformance with Generally Accepted Accounting Principles (GAAP). An auditor gives an Unmodified Opinion (or clean opinion) when they do not have any significant reservation in respect of matters contained in the Financial Statements.

A summary of significant highlights follows:

General Fund: The fund balance increased by $5.9 million compared to prior year mostly attributable to continued strength in certain revenue categories in addition to spending controls. Contrary to the increased revenue and conservative spending, the fair market value adjustment for the investments reduced noted increases by $1.2 million.

1 Development Services Fund: At the end of FY 21-22, the fund had a negative balance of about $0.5 million, a slight decrease of less than $0.1 million from prior year. The fund was budgeted to end the fiscal year with an operating deficit of approximately $0.4 million and require a General Fund loan. However, it ended up better than budgeted.

Nonetheless, the fund had incurred multiple years of operating deficit which necessitates the comprehensive review of the fee structure to ensure the fund’s fiscal sustainability. In 2021, staff engaged a consultant to conduct an updated fee study of Planning and Land Development Engineering to update the fees which were last updated in 2017. The updated fees were approved by the Council and went into effect in March 2022.

Enterprise Funds: Unrestricted net position at June 30, 2022, amounted to $16.3 million for Sewer Operations and $14.1 million for Water Operations. Water Operations’ unrestricted net position increased by $3.4 million compared to prior year. The operating revenues saw a decrease of $1.4 million primarily due to reduced consumption resulting from the on-going drought. Sewer Operations’ unrestricted net position increased by $3.1 million from prior fiscal year with operating revenues increasing by $1.2 million primarily due to rate adjustments. The Sewer Impact Fund had $19.5 million in net position restricted for capital improvements and expansion, a decrease of $2.6 million from prior year mainly due to investment in capital assets, while the Water Impact Fund had $2.9 million for the same purpose, a decrease of $0.5 million from prior year.

COMMUNITY ENGAGEMENT:

Inform
Finance staff presents these audited reports in an effort to keep the City Council, community, and various lenders and stakeholders informed on the financial health of the organization, which assists each one of the interested parties in making sound financial decisions.

ALTERNATIVE ACTIONS:

Not Applicable
PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The audited comprehensive financial report is presented to Council each year for the prior fiscal year ending June 30.

FISCAL AND RESOURCE IMPACT:

The resources and costs associated with the audit and preparation of the annual comprehensive financial report are budgeted and included in the Finance Division.

CEQA (California Environmental Quality Act):

Not a Project

1 Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.

2 CITY COUNCIL STAFF REPORT
MEETING DATE: December 7, 2022
PREPARED BY:

Dat Nguyen, Finance Director
APPROVED BY: City Manager
ACCEPT THE ANNUAL SENATE BILL (SB) 165 REPORT FOR
COMMUNITY FACILITIES DISTRICT NO. 2014-1 (FISHER CREEK)

RECOMMENDATION(S)
Accept and file the report.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Preserving and Cultivating Public Trust
2022-2023 Strategic Priorities
Fiscal Sustainability
Community Outreach, Engagement, and Messaging
REPORT NARRATIVE:

The Local Agency Special Tax and Bond Accountability Act (“The Act”) requires that any local special tax or local bond measure subject to voter approval contain a statement indicating the specific purposes of the special tax, require that the proceeds of the special tax be applied to those purposes, require the creation of an account into which the proceeds shall be deposited, and require an annual report containing specified information concerning the use of proceeds.

The Act was enacted by Senate Bill 165 and codified in the California Government Code Sections 53410 through 53412. The City's Community Facilities District (CFD) No. 2014-1 (Fisher Creek) falls within these reporting requirements and the attached annual report is intended to comply with the regulation.

COMMUNITY ENGAGEMENT:

Inform
This report serves to inform the community of the required reporting information for the CFD.

ALTERNATIVE ACTIONS:

Not Applicable

2 PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The City Council receives and files the SB 165 Report for CFD No. 2014-1 (Fisher Creek) annually.

FISCAL AND RESOURCE IMPACT:

The preparation of the report is a part of the Finance workplan.

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.

SENATE BILL 165
Senate Bill 165, filed with the Secretary of State on September 19, 2000, enacted the Local Agency Special Tax and Bond Accountability Act. This Act requires that any local special tax or local bond measure subject to voter approval contain a statement indicating the specific purposes of the special tax, require that the proceeds of the special tax be applied to those purposes, require the creation of an account into which the proceeds shall be deposited, and require an annual report containing specified information concerning the use of the proceeds. The Act only applies to any local special tax measure or local bond measure adopted on or after January 1, 2001 in accordance with Section 50075.1 or Section 53410 of the California Government Code.

Some of the requirements of the Act are handled at the formation of the Special Tax District and others are handled through annual reports. This Section of this report intends to comply with Section 50075.3 or Section 53411 of the California Government Code that states:
“The chief fiscal officer of the issuing local agency shall file a report with its governing body no later than January 1, 2002, and at least once a year thereafter. The annual report shall contain all of the following:
(a) The amount of funds collected and expended.
(b) The status of any project required or authorized to be funded as identified in subdivision (a) of Section 50075.1 or Section 53410.”
Purpose of Special Tax
The District was formed to fund all or a portion of the costs of the maintenance and monitoring required by the San Francisco Bay Regional Water Quality Control Board for the realignment of Fisher Creek. The special tax funds the cost of maintenance, monitoring and reporting of the Fisher Creek Realignment project; pay for administrative expenses; pay for any amounts required to establish or replenish capital improvement funds, repair and contingency funds or reserve funds; and pay for reasonable anticipated delinquent special taxes.

Collections & Expenditures
Fund
7/1/2021
Balance
Total Amount
Collected (1)
6/30/2022
Balance (2)
Amount
Expended
Service
Status
Special Tax Fund $137,840.00 $21,363.00 $132,367.00 $26,836.00 Ongoing (1) Figure represents the total amount levied for Fiscal Year 2021/22, less County Collection Fees of 1.0% of the total levy amount and delinquencies.
(2) Includes interest earned.

3 CITY COUNCIL STAFF REPORT
MEETING DATE: December 7, 2022
PREPARED BY:

Dat Nguyen, Finance Director
APPROVED BY: City Manager

ADOPT RESOLUTION APPROVING AND MAKING FINDINGS
RELATED TO THE ASSEMBLY BILL (AB) 1600 DEVELOPMENT
IMPACT FEE ANNUAL REPORT FOR FISCAL YEAR 2021-22

RECOMMENDATION(S)

1. Adopt resolution making findings for unexpended development impact fees; and

2. Accept the annual development impact fee report.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Preserving and Cultivating Public Trust
2022-2023 Strategic Priorities
Fiscal Sustainability
Community Outreach, Engagement, and Messaging
REPORT NARRATIVE:

Government Code Section 66000 et seq. requires that any city imposing development impact fees must report certain information each year. In accordance with this requirement, staff is presenting the Annual Development Impact Fee Report (Attachment 1) for the fiscal year ending June 30, 2022. The report includes a fee description, a schedule of impact fees for the reporting period as approved by City Council, and a report of the 2021-22 revenues and expenditures for each impact fee, along with the balance available for current and future projects. A description of the project that resources were used for is also included for each impact fee.

Section 66001(d) requires that for the fifth fiscal year following the collection of development fees, and every five years thereafter, the local agency shall make findings with respect to any portion of the fee collected remaining unexpended, whether committed or uncommitted. Staff identified $5,236,461 from the Storm Drain Impact Fee (Fund 303); $2,041,294 from the Public Safety Facilities Impact Fee (Fund 315); and $102,214 from the Public Facilities Impact Fee (Fund 347) in unexpended fees that were collected over five years ago (Attachment 2). These unexpended fees have been or will be appropriated into existing and future capital improvement projects:

3 1) Storm Drain Impact Fee to fund Storm System Expansions and Llagas Flood Control Project. The Storm System Expansions will expand storm system capacity in alignment with the 2018 Storm Drain System Master Plan and the Llagas Flood Control Project is to address storm water conveyance that drains into the Upper Llagas Creek Flood Protection Project (ULCFPP) and the West Little Llagas watershed. A total of $8,700,000 from Storm Drain Impact Fees has been allocated to these projects in the adopted Fiscal Year 2022-23 - 2027-28 Capital Improvement Program (CIP). 2) Public Safety Facilities Impact Fee to fund construction of the Fire Station on Butterfield Boulevard. A total of $9,100,000 from Public Safety Facilities Impact Fees has been allocated to this project in the adopted Fiscal Year 2022-23 - 2027-28 CIP. 3) Public Facilities Impact Fee to fund construction of public facilities such as expansion of the City Hall and the Corporation Yard. Based on the recently completed Maintenance and Operations Space Needs Analysis, the total cost for the expansion of the City Hall and the Corporation Yard is estimated to be about $43 million.

COMMUNITY ENGAGEMENT:

Inform
Finance staff prepares this annual report in an effort to keep City Officials, Council, Community, and stakeholders informed on the financial status of each impact fee, which assists each one of the interested parties in making sound financial decisions.

ALTERNATIVE ACTIONS:

Not Applicable
PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The annual impact fee report is presented to Council each year for the prior fiscal year ending June 30.

FISCAL AND RESOURCE IMPACT:

The preparation of the report is a part of the Finance workplan.

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.

City of Morgan Hill
AB 1600 Development Impact Fee Report
Fiscal Year 2021‐22
Impact Fee Fund Descriptions
Park Impact – This fund receives revenues from developers of properties and the fund may only be  used  for  the  design,  development, maintenance, and  construction  of  new  parks within  the City.

Storm Drain – This fund receives revenues from developers of properties to cover the costs of design and construction of new storm drain that benefit new customers residing within the City of Morgan Hill as a result of growth in population.

Traffic  Impact  –  This  fund  receives  revenues  from  developers  when  their  projects  have  an adverse  impact  on  traffic  flows,  etc.  The  funds  collected  may  be  expended  on  new  streets, traffic  signals  and  improvements  of  existing  streets  where  they  are  impacted  by  new development.

Public Safety Facilities Impact – This  fee was created as a  result of combination of Police and Fire Impact Fees. Revenues are collected from developers to cover the costs required for police and fire capital expansion projects to assist in providing services to new developments.

Community/Recreation  Center  Impact  –  Revenues  are  collected  to  finance  the  expansion  of existing and construction of new recreation and community center facilities demanded by new development.

Public Facilities – Revenues are collected to finance the expansion of public facilities necessary to  benefit  new  customers  residing  within  the  City  of  Morgan  Hill  as  a  result  of  growth  in population.

Library  Impact  – Revenues  are  collected  to  finance  the  provision  of  future  library  space  and materials  necessary  to  benefit,  and  necessary  to  provide  library  services  to,  new  residents residing in the City of Morgan Hill as a result of population growth.

Sewer  Impact  – Revenues  are  collected  to  finance  the  expansion  of  wastewater  facilities necessary to benefit, and necessary to provide   wastewater services to new customers residing in the service area within the City of Morgan Hill as a result of growth in population.

Water Impact – Revenues are collected to finance the expansion of water facilities necessary to benefit, and necessary   to provide water services to, new customers residing in the service area within the City of Morgan Hill as a result of growth in population.

Description of Fee Unit of Measure Amount
Water Impact Fee Single Family Dwelling Unit 4,264.00
Multi Family Dwelling Unit 3,847.00
Commercial/Industrial/Office per acre 12,104.00
Sewer Impact Fee Single Family Dwelling Unit 16,687.00
Multi Family Dwelling Unit 14,123.00
Commercial/Industrial/Office per GPD 54.95
Storm Drain Impact Fee Single Family Dwelling Unit 2,115.00 Multi Family Dwelling Unit (>1200SF) 1,204.00
Multi Family Dwelling Unit (<1200SF) 560.00
Commercial/Office per acre 22,901.00
Industrial per acre 16,861.00
Auto Dealership per acre 22,901.00
Hotel per room 339.00
Park Impact Fee Single Family Dwelling Unit-Sub 6,327.00 Single Family Dwelling Unit-No Sub 4,600.00
Multi Family Dwelling Unit-Sub 6,096.00
Multi Family Dwelling Unit-No Sub 4,437.00
Traffic Impact Fee Single Family Dwelling Unit 3,675.00 Multi Family Dwelling Unit (>1200SF) 2,277.00
Multi Family Dwelling Unit (<1200SF) 1,434.00
Commercial/Industrial/Office per PHT 3,675.00
Library Impact Fee Single Family Dwelling Unit 2,324.00 Multi Family Dwelling Unit 2,238.00
Public Safety Facilities Impact Fee Single Family Dwelling Unit 2,115.00 Multi Family Dwelling Unit (>1200SF) 1,870.00
Multi Family Dwelling Unit (<1200SF) 1,400.00
Commercial per acre 11,818.00
Industrial per acre 14,184.00
Office per acre 14,168.00
Auto Dealership per acre 5,668.00
Hotel per room 65.00
Public Facilities Single Family Dwelling Unit 602.00
Multi Family Dwelling Unit 580.00
Commercial per acre 1,327.00
Office per acre 1,577.00
Industrial per acre 1,857.00
Auto Dealership per acre 532.00
Hotel per room 15.00
Community Recreation Centers Single Family Dwelling Unit 4,309.00 Multi Family Dwelling Unit 3,781.00
City of Morgan Hill
Impact Fee Schedule Summary
Fiscal Year 2021-22

Project FY 21-22
FUND 301 - PARKS IMPACT FEE Number AB 1600
Revenue
Interest $ 12,273
Development Impact Fees 619,881
Project Reimbursement/Others 4,675,231
Total Revenue $ 5,307,385
% from this Total Project
Revenue Expended For Fund Expenditures
Parks Land 110097 3,029,621 $ 100.00% 3,029,621
Inclusive Playground 137015 1,552,321 100.00% 1,552,321 Madrone Channel 117022 48,395 9.03% 535,866
Butterfield Blvd Connector Path Project 148017 831,490 100.00% 831,490 W. Little Llagas Creek Trail Phase 117001 734,546 100.00% 734,546 Sports Facility Development 148018 63,350 100.00% 63,350 General Plan Update 7,704 7.00% 110,000
RCSD Services - Infrastructure Planning 75,000 26.79% 280,000 Banking Fees and Other 15,629 100.00% 15,629
Administration 43,236 2.85% 1,516,873
Total Expenditures $ 6,401,292
Revenue Less Expenditures $ (1,093,907)
Balance as of July 1, 2021 270,918
Balance as of June 30, 2022 $ (822,989)
City of Morgan Hill
Impact Fees Revenue and Expenditures
For Fiscal Year 2021-22

Project FY 21-22
FUND 303 - STORM DRAIN IMPACT FEE Number AB 1600
Revenue
Interest $ (489,240)
Development Impact Fees 1,318,401
Total Revenue $ 829,161
% from this Total Project
Revenue Expended For Fund Expenditures
Storm System Expansion 415020 $ 56,662 100.00% 56,662
Llagas Flood Control 417099 93,496 100.00% 93,496
Banking Fees and Other 116 100.00% 116
General Plan Update 7,704 7.00% 110,000
RCSD Services - Infrastructure Planning 15,000 5.36% 280,000 Administration 7,344 0.48% 1,516,873
Total Expenditures $ 180,322
Revenue Less Expenditures $ 648,839
Balance as of July 1, 2021 10,947,520
Balance as of June 30, 2022 $ 11,596,359
City of Morgan Hill
Impact Fees Revenue and Expenditures
For Fiscal Year 2021-22

Project FY 21-22
FUND 309 - TRAFFIC IMPACT FEE Number AB 1600

REVENUE
Interest $ (101,022)
Traffic Impact Fees 908,645
VTA Measure B 8,353,820
TOTAL REVENUE $ 9,161,443
% from this Total Project
Revenue Expended For Fund Expenditures
Hale Avenue Extension 546007 10,072,094 $ 100.00% 10,072,094 General Plan Update 31,896 29.00% 110,000
RCSD Services - Infrastructure Planning 75,000 26.79% 280,000 Administration 12,708 0.84% 1,516,873
Total Expenditures $ 10,191,698
Revenue Less Expenditures $ (1,030,255)
Balance as of July 1, 2021 2,217,293
Balance as of June 30, 2022 $ 1,187,038
City of Morgan Hill
Impact Fees Revenue and Expenditures
For Fiscal Year 2021-22

FY 21-22
FUND 315 - PUBLIC SAFETY FACILITIES Project # AB 1600

REVENUE
Interest $ (162,116)
Public Safety Facilities Impact Fees 230,500
TOTAL REVENUE $ 68,384
% from this Total Project
Revenue Expended For Fund Expenditures
New Fire Station 231018 286,522 $ 100.00% 286,522
Debt Service 203,629 30.35% 670,863
Banking Fees and Other 800 100.00% 800
Administration 6,552 0.43% 1,516,873
Total Expenditures $ 497,503
Revenue Less Expenditures $ (429,119)
Balance as of July 1, 2021 3,650,943
Balance as of June 30, 2022 $ 3,221,824
City of Morgan Hill
Impact Fees Revenue and Expenditures
For Fiscal Year 2021-22

Project FY 21-22
FUND 347 - PUBLIC FACILITIES IMPACT FEE Number AB 1600

REVENUE
Interest/Other $ (42,738)
Public Facilities Impact Fees 52,845
TOTAL REVENUE $ 10,107
% from this Total Project
Revenue Expended For Fund Expenditures
RCSD Services - Infrastructure Planning $ 25,000 8.93% 280,000 Administration 2,328 0.15% 1,516,873
Total Expenditures $ 27,328
Revenue Less Expenditures $ (17,221)
Balance as of July 1, 2021 1,034,272
Balance as of June 30, 2022 $ 1,017,051
City of Morgan Hill
Impact Fees Revenue and Expenditures
For Fiscal Year 2021-22

Project FY 21-22
FUND 348 - LIBRARY IMPACT FEE Number AB 1600

REVENUE
Interest $ (60,525)
Library Impact Fees 149,191
Library Lease 87,072
TOTAL REVENUE $ 175,738
% from this Total Project
Revenue Expended For Fund Expenditures
Library Expansion 251015 $ 1,722 100.00% 1,722
Civic Center Debt Service 211,008 31.45% 670,863
Administration 5,700 0.38% 1,516,873
Total Expenditures $ 218,430
Revenue Less Expenditures $ (42,692)
Balance as of July 1, 2021 1,487,275
Balance as of June 30, 2022 $ 1,444,583
City of Morgan Hill
Impact Fees Revenue and Expenditures
For Fiscal Year 2021-22

Project FY 21-22
FUND 360 - COMMUNITY/REC CENTERS IMPACT FEE Number AB 1600

REVENUE
Interest/Others $ (54,384)
Com/Rec Centers Impact Fees 277,049
TOTAL REVENUE $ 222,665
% from this Total Project
Revenue Expended For Fund Expenditures
Centennial Recreation Center Expansion 138016 280,625 $ 100.00% 280,625 Administration 516 0.03% 1,516,873
Total Expenditures $ 281,141
Revenue Less Expenditures $ (58,476)
Balance as of July 1, 2021 1,353,501
Balance as of June 30, 2022 $ 1,295,025
City of Morgan Hill
Impact Fees Revenue and Expenditures
For Fiscal Year 2021-22

Project FY 21-22
FUND 641 - SEWER IMPACT FEE Number AB 1600

REVENUE
Interest $ 143,142
Sewer Impact Fees 1,685,341
Reimbursement of Expenses 6,231,577
TOTAL REVENUE $ 8,060,060
% from this Total Project
Revenue Expended For Fund Expenditures
Sewer Plant Expansion 303093 7,547,560 $ 1017.79% 741,565 Sewer Plant Improvements 303a11 1,216,415 100.00% 1,216,415 Sewer Main Upgrades 302t17 487,650 537.66% 90,698
General Plan Update 7,704 7.00% 110,000
RCSD Services - Infrastructure Planning 25,000 8.93% 280,000 Debt Service 232,980 9.15% 2,544,863
Administration 60,384 3.98% 1,516,873
Total Expenditures $ 9,577,693
Revenue Less Expenditures $ (1,517,633)
Balance as of July 1, 2021 22,070,164
Balance as of June 30, 2022 $ 20,552,531
City of Morgan Hill
Impact Fees Revenue and Expenditures
For Fiscal Year 2021-22

Project FY 21-22
FUND 651 - WATER IMPACT FEE Number AB 1600

REVENUE
Interest $ 20,818
Water Impact Fees 469,052
TOTAL REVENUE $ 489,870
% from this Total Project
Revenue Expended For Fund Expenditures
New Water Mains 603000 $ 100.000% 3,320 3,320
Holiday Lake Improvements 624018 48,012 100.000% 48,012 Rate Studies, Plans, and Assessments 624018 56,268 100.000% 56,268 General Plan Update 7,704 7.004% 110,000
RCSD Services - Infrastructure Planning 25,000 8.93% 280,000 Debt Service 680,136 41.016% 1,658,229
Banking Fees and Other 100.000% 800 800
Administration 19,128 1.261% 1,516,873
Total Expenditures $ 840,368
Revenue Less Expenditures $ (350,498)
Balance as of July 1, 2021 3,275,094
Balance as of June 30, 2022 $ 2,924,596
City of Morgan Hill
Impact Fees Revenue and Expenditures
For Fiscal Year 2021-22

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF MORGAN HILL MAKING FINDINGS FOR

UNEXPENDED DEVELOPMENT IMPACT FEES IN

ACCORDANCE WITH CALIFORNIA GOVERNMENT
CODE SECTION 66001 AND ACCEPTING THE ANNUAL

DEVELOPMENT IMPACT FEE REPORT
WHEREAS, the Mitigation Fee Act, Government Code Section 66000 et seq., authorizes the City of Morgan Hill (“City”) to impose, collect, and expend mitigation fees to offset the impacts of development within the City; and;
WHEREAS, among the procedural requirements mandated by the Mitigation Fee Act is a requirement that beginning with the fifth fiscal year following deposit of development fees into a designated account, and each fifth fiscal year thereafter, the City make specified findings regarding any portion of the fees that remain unexpended; and
WHEREAS, a portion of the fees currently deposited in the City’s Storm Drain Impact Fee Fund, Public Safety Facilities Impact Fund, and Public Facilities Impact Fee Fund were collected over five (5) years ago, and therefore the City wishes to make the findings required by Government Code Section 66001(d); and
WHEREAS, the City also wishes to review and accept reports required by the Mitigation Fee Act under the annual information disclosure requirements of Government Code Section 66006(b), including but not limited to the amount of the fee, the beginning and ending balance of the fee account or fund, and the interest earned thereon.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MORGAN HILL DOES HEREBY FIND, DETERMINE, RESOLVE AND ORDER AS FOLLOWS:

1. The City Council has considered the full record before it, which may include, but is not limited to, the staff report, testimony by staff and the public, and other materials and evidence submitted or provided to it. Furthermore, the recitals set forth above are found to be true and correct and are incorporated herein by reference.

2. The City Council finds that the Storm Drain Impact Fee Fund currently contains Five Million Two Hundred Thirty Six Thousand Four Hundred Sixty One Dollars ($5,236,461); Public Safety Facilities Impact Fee Fund currently contains Two Million Forty One Thousand Two Hundred Ninety Four Dollars ($2,041,294); and Public Facilities Impact Fee Fund currently contains One Hundred Two Thousand Two Hundred Fourteen Dollars ($102,214) in unexpended fees that were collected over five (5) years ago.

3. In accordance with Government Code section 66001(d)(1), the City Council finds as follows:
a. The Unexpended Fees will be used to provide for the following projects:
(A) Storm Drain Impact Fee to fund Storm System Expansions and Llagas Flood Control Project. The Storm System Expansions will expand storm system capacity in alignment with the 2018 Storm Drain System Master Plan and the Llagas Flood Control Project is to address storm water conveyance that drains into the Upper Llagas Creek Flood Protection Project (ULCFPP) and the West Little Llagas watershed. The project would provide flood protection and mitigate the increased risk of flooding when the ULCFPP is completed;
(B) Public Safety Facilities Impact Fee to fund construction of the Fire Station on Butterfield Boulevard. The project will address the need for a new fire station as the community grows.
(C) Public Facilities Impact Fee to fund the expansion of the City Hall and the Corporation Yard. These projects will address the maintenance and operations space needs as the community grows. b. There exists a reasonable relationship between the Unexpended Fees and the purpose for which they were charged as described above. c. The current estimated costs that have been appropriated or will be appropriated for the Storm System Expansions and Llagas Flood Control Project are approximately Eight Million Seven Hundred Thousand Dollars ($8,700,000); costs for the Fire Station on Butterfield Boulevard are approximately Nine Million One Hundred Thousand Dollars ($9,100,000); and costs for the expansion of the City Hall and the Corporation Yard are estimated to be about Forty Three Million Dollars ($43,000,000). The City’s funding sources will include the Unexpended Fees described above and future impact fees to be collected for these projects.
d. The Unexpended Fees have been deposited in the respective Impact Fee Funds, which are the appropriate funds to finance the projects described above.

4. This Resolution shall take effect immediately upon adoption.

PASSED AND ADOPTED by the City Council of Morgan Hill at a Regular Meeting held on the 7th day of December 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-XXX, adopted by the City Council at the meeting held on December 7, 2022.

WITNESS MY HAND AND THE SEAL OF THE CITY OF MORGAN HILL DATE: _____________________ ___________________________________ MICHELLE BIGELOW, City Clerk

4 CITY COUNCIL STAFF REPORT
MEETING DATE: December 7, 2022
PREPARED BY:

Kim Mancera, Deputy City Clerk
APPROVED BY: City Manager
ADOPT ODINANCE NO. 2339, NEW SERIES, APPROVING A ZONING

MAP AMENDMENT FOR A MIXED-USE DOWNTOWN PLANNED
DEVELOPMENT COMBINING DISTRICT ON A 1.09-ACRE SITE
LOCATED EAST OF MONTEREY ROAD BETWEEN 1ST STREET AND
2ND STREET (ZA2022-0004: MONTEREY – LEAL GRANADA HOTEL) APN: 726-14-074

RECOMMENDATION(S)
Waive the reading, adopt Ordinance No. 2339, 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
2022-2023 Strategic Priorities
Economic Development
Guiding Documents
Economic Blueprint
Morgan Hill 2035 General Plan
Morgan Hill Downtown Specific Plan
REPORT NARRATIVE:

On November 16, 2022, the City Council introduced Ordinance No. 2339 New Series, by the following roll call vote: AYES: Constantine, Borgioli, McKay; NOES: Martinez Beltran, Spring; ABSTAIN: None; ABSENT: None.

The City Council held a public hearing and approved the Planned Development (PD) and Design Permit Amendment to allow for additional height that will allow the construction of a partial 5th floor to accommodate additional hotel rooms at the approved Granada Hotel on Monterey Road in Downtown. As part of that approval, the City Council directed the City Attorney and City Manager to enter into a Memorandum of Understanding (MOU) with the project developer to memorialize the listed penalties that

4 may be invoked if the performance standards are not achieved. The MOU is attached.

COMMUNITY ENGAGEMENT:

Inform
The proposed project was publicly noticed by mailing to property owners within 600-feet of the project and a 1/4 page ad in the newspaper for the minimum 10-day period.

ALTERNATIVE ACTIONS:

Not Applicable
PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

In 2014, the City of Morgan Hill, as Successor Agency to the former Morgan Hill Redevelopment Agency, began the process of disposing of former Redevelopment assets, including the former Downtown Mall located at 17490 Monterey Road (APN:726-14-074). The process included an extensive Request for Qualifications/Proposals (RFQ/P) process consistent with the Long Range Property Management Plan and with the guidance of a community-based group comprised of the Morgan Hill Economic Development Corporation, as well as representatives of the Morgan Hill Chamber of Commerce and the Morgan Hill Downtown Association. The RFQ/P process ultimately resulted in the Purchase, Sale and Grant Agreement by the Morgan Hill Oversight Board to Leal Vineyards Inc. on September 3, 2015, for a twophased project: Phase 1, the rehabilitation of the Granada Theatre for use as an entertainment, special event and assembly venue with food and beverage service, and for Phase 2, for a Market Hall/Restaurant, Boutique Hotel.

In April 2016, the Planning Commission reviewed and approved a Design Permit and a Conditional Use Permit for a new Downtown Hotel. The approvals included a new 67,940 square foot, four-story building with restaurants, bars, retail, banquet hall(s), and hotel lobby with guest rooms, services including valet parking and amenities. The Conditional Use Permit allows for an outdoor green event space, conference/meeting rooms, banquet rooms, and ancillary prep kitchens with one main kitchen to serve the hotel. The hotel also included a pool with outdoor living/ lounge area. The project was approved by the City Council on May 18, 2016.

At the October 11, 2022 Planning Commission meeting, the Commission held a duly noticed public hearing where they considered public testimony along with staff's report, exhibits, drawings, and other materials. The Planning Commission recommended approval of the PD and the Design Permit Amendment to City Council with no changes by the follow vote: 6 ayes, 0 noes, 0 abstain, and 1 absent.

FISCAL AND RESOURCE IMPACT:

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

CEQA (California Environmental Quality Act):

4 An Addendum to the DTSP Master Environmental Impact Report (MEIR) has been prepared pursuant to Title 14, Section 15164 of the California Code of Regulations and City of Morgan Hill environmental standards. The City of Morgan Hill, Development Services Department, has reviewed the proposed project and on the basis of the whole record before it, has determined that pursuant to CEQA Guidelines Section 15179, no substantial changes have occurred with respect to the circumstances under which the MEIR was certified, and there is no new available information, which was not known and could not have been known at the time that the MEIR was certified. The project, as identified in the Addendum, would not have a significant effect on the environment beyond that which was evaluated in the Downtown Specific Plan Master Environmental Impact Report. The document demonstrates that neither a subsequent EIR, nor a supplement to the MEIR is required given that the proposed modifications to the approved project would not trigger the applicable criteria set forth in the CEQA Guidelines Section 15162. The Addendum to the Downtown Specific Plan MEIR has been prepared pursuant to Title 14 Section 15164 of the California Code of Regulations and City of Morgan Hill environmental standards.

ORDINANCE NO. 2339, NEW SERIES

AN ORDINANCE OF THE CITY OF MORGAN HILL CITY

COUNCIL APPROVING A ZONING MAP AMENDMENT

FOR A MIXED-USE DOWNTOWN PLANNED
DEVELOPMENT COMBINING DISTRICT ON A 1.09-ACRE

SITE LOCATED EAST OF MONTEREY ROAD BETWEEN
1ST STREET AND 2ND STREET (ZA2022-0004:

MONTEREY – LEAL GRANADA HOTEL) APN: 726-14-074

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

SECTION 1. The proposed amendment is consistent with the General Plan and any applicable specific plan as provided by Government Code Section 65860.

The planned development will yield a project that is consistent with the Downtown Specific Plan and General Plan City and Neighborhood Form Policies CNF-14.1, CNF-14.2, CNF-14.3, and CNF-14.7 and the Economic Development Element in that the Hotel supports the implementation of the Downtown Specific plan by providing a new use that includes specialty retail, event space, and other services on the first floor along Monterey street, and supports tourism downtown by adding short- term stay for visitors. The General Plan does not specify maximums for the floor area ratio or density on the project site. The proposed development for a hotel meets the floor area ratio as identified within the Downtown Specific Plan.

SECTION 2. The proposed amendment will not be detrimental to the public interest, health, safety, convenience, or welfare of the City.

The planned development will yield a project that supports tourism by providing the convenience to stay and enjoy events within the Downtown. A hotel use will provide public interest and enhance general welfare by including ancillary uses that support Downtown as a focal point of the City. Projects will be built to comply with standard building code requirements and therefore will not be detrimental to public health, safety, and welfare.

SECTION 3. The affected site is physically suitable in terms of design, location, shape, size, and other characteristics to ensure that the permitted land uses and development will comply with the zoning code and general plan and contribute to the health, safety and welfare of the property, surrounding properties, and the community at large.

The property is an approximate 1.09-acre site that propose the development of a project that meet the design requirements and guidelines identified within the Downtown Specific Plan. This Planned Development allow for an increase in height up to five stories for a hotel use. Consistent with the Downtown Specific Plan, upper floor levels will be set back from the first and second floors which

City of Morgan Hill
Ordinance No. 2339, New Series

reduces the massing of the building and maintain the characteristics within the Downtown. As mentioned in Sections 1 and 2 above, the planned development will yield a project that contributes to the Downtown and the community at large and will not be detrimental to the health, safety, and welfare of the property and surrounding properties.

SECTION 4. The proposed development is consistent with the general plan, zoning code and any applicable specific plan or area plan adopted by the City council.

The Downtown Specific Plan allows for Planned Developments for properties to deviate from standards. The proposed Planned Development supports the approved hotel use as permitted and deviates from the height standard by adding one additional level for hotels. The Planned Development will yield a project consistent with the policies established by the General Plan and Downtown Specific Plan in that a Hotel supports tourism downtown, provides new services and amenities, and meets the Design Guidelines within the Specific Plan.

SECTION 5. The proposed development is superior to the development that could occur under the standards applicable in the existing zoning districts.

The Planned Development will allow for a use and design that supports the viability of a hotel downtown, improving the operational functionality of the hotel.

A hotel with ancillary services and amenities within downtown supports the Downtown Specific Plan and General Plan by promoting Downtown as a focal point and supports tourism that supports the economic growth of Downtown.

SECTION 6. The proposed project will provide a Substantial Public Benefit. The public benefit provided shall be of sufficient value as determined by the Planning Commission to justify deviation from the standards of the zoning district that currently applies to the property.

The Planning Commission recommended approval at a duly noticed public hearing on October 11, 2022 that included the review of the substantial public benefit. The project will incorporate a valet station for drop-off/pick-up in a location convenient for all downtown visitors in addition to the hotel guests. This will provide upfront access for all visitors/consumers downtown. In addition, the property owner/designee will have a mural displayed on the rear of the building.

The artwork for the mural will be approved by the Arts Commission.

SECTION 7. The site for the proposed development is adequate in size and shape to accommodate proposed land uses.

The site is a 1.09-acre site and shape of the site can accommodate a five- story hotel that meets the floor area ratio identified within the Downtown Specific Plan.

SECTION 8. Adequate transportation facilities, infrastructure, and public services exist or will be provided to serve the proposed development.

The site is located within the downtown fronting on Monterey road and 1st Street with valet services for guest accessed from 2nd Street. There are wet and dry utilities and infrastructure in the surrounding area that support the development of

City of Morgan Hill
Ordinance No. 2339, New Series

this site.

SECTION 9. The proposed development will not have a substantial adverse effect on surrounding property and will be compatible with the existing and planned land use character of the surrounding area.

The Planned Development will yield a project consistent with the Downtown Specific Plan and General Plan goals and policies. The increased height for a hotel will be compatible with existing and planned uses of the surrounding area in that the 5th level will be push back and central to the block which reduces massing and provides relief for future development of adjacent properties on the block.

SECTION 10. The City Council approves the Zoning Amendment application ZA2022-0004:

Monterey – Leal Granada Hotel (Granada Hotel Expansion) for a Planned Development as described in the attached Exhibit “A” and Exhibit “B” to this Ordinance.

THE FOREGOING ORDINANCE WAS INTRODUCED AT A REGULAR MEETING OF THE CITY COUNCIL HELD ON THE 16th DAY OF NOVEMBER 2022, AND WAS FINALLY ADOPTED AT A MEETING OF THE CITY COUNCIL HELD ON THE 7th DAY OF DECEMBER 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

City of Morgan Hill
Ordinance No. 2339, New Series

 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. 2339, New Series, adopted by the City Council of the City of Morgan Hill, California at their regular meeting held on the 7th day of December 2022.

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

DATE: _______________________ _________________________________ MICHELLE BIGELOW, City Clerk

City of Morgan Hill
Ordinance No. 2339, New Series

EXHIBIT A

PLANNED DEVELOPMENT STANDARDS AND USES
This Planned Development (PD) pertains to the 1.09-acre lot located mid-block east of Monterey Road, between 1st Street and 2nd Street. To proceed with the development of a Hotel that exceeds 4-stories, or 55-feet in height, the Performance Standards set forth in Section A of this Exhibit shall be met. A one-time, 2-year administrative time extension to each performance standard outlined in Section A of this Exhibit may be granted by the Development Services Director if:
1) The property owner/designee proceeded in good faith and has exercised due diligence in efforts to achieve each performance standard in a timely manner; and 2) The property owner/designee provides proof to demonstrate that the performance standard milestone(s) could not be achieved due to circumstances outside of their control.

If additional time is needed for any performance standard listed in Section A of this Exhibit after a 2-year time extension was approved, additional time extensions may be reviewed and approved by the City Manager. If the Performance Standards cannot be achieved within the timeline or approved extended timelines, the underlying Downtown Specific Plan height standard of maximum 4-stories or 55 feet in height shall be reinstated.

SECTION A: PERFORMANCE STANDARDS
1a. The property owner/designee shall enter into a Memorandum of Understanding (MOU) agreement to memorialize the understanding of listed penalties that may be invoked if these performance standards are not achieved. The MOU will be reviewed and approved by the City Attorney and City Manager. 2a. Property owner/designee is required to submit building permit application(s) and construction document(s) for the modifications and addition of the 5th floor by April 30, 2023.
3a. Property owner/designee shall secure building permit(s) for the fifth level by September 30, 2023.
4a. Construction to resume no later than August 31, 2023. 5a. Property owner/designee to complete exterior facade before interior improvements, 24 months after construction resumes.
6a. Parklets for the Granada Theater may continue operation only during nonconstruction hours. Parklet may resume to normal hours once construction of the exterior of the hotel has been completed and temporary fencing removed.

City of Morgan Hill
Ordinance No. 2339, New Series

7a. Non-essential hotel amenities (restaurant, bar, meeting rooms, etc.) should not be completed prior to the completion of hotel rooms.
8a. Hotel rooms to be operational by December 31, 2025. 9a. As part of the substantial public benefit, the property owner/designee will incorporate a valet station for drop-off/pick-up in a location convenient for all downtown visitors in addition to the hotel guests. This will provide upfront access for all visitors/consumers downtown. In addition, the property owner/designee will have a mural displayed on the rear of the building. The artwork for the mural will be approved by the Library, Culture, and Arts Commission.

Penalties
10a. If the property owner/designee doesn’t resume construction by August 31, 2023, the City may revoke the maximum building height for a hotel as described in Table B.1.

11.a MOU to identify agreed-upon liquidated damages for every day after December 31, 2025, or as amended by time extensions.

SECTION B. DEVELOPMENT STANDARDS AND USES
The Standards set herein supersede the Downtown Specific Plan and any Combining District or Overlay District. Where this Planned Development is silent on standards, the underlying mixed-use Commercial Business District (CBD) as amended shall apply.

City of Morgan Hill
Ordinance No. 2339, New Series

Development Standards Table B.1
Standard
Maximum Building Coverage No Maximum
Floor Area Ratio 2.0 or 2.25 for sites over 22,000 square feet
Maximum Building Height 4 stories or 55-feet
Maximum Building Height for a Hotel 5 stories or 70 feet* Maximum Building Height
Exceptions
Add 15-feet to maximum height for required
rooftop equipment, elevator shafts, or
stairwells
Setbacks:

Front 0-feet minimum
10-feet maximum
Side 0-feet minimum
Rear 0 feet minimum
Ground Floor “Floor-to-ceiling clear”
height 14-feet for
Ground Floor building depth: retail
depth minimums as specified within
the Downtown Specific Plan
60-feet
Parking Refer to the Downtown Specific Plan
Parking Requirements as amended
Hotel Parking
No onsite parking required, drop-off and
valet parking for guests is required on or
off-site biased on demand
* Maximum Building Height reduced to 4 stories or 55-feet in height if Section A Performance Standards are not met.

City of Morgan Hill
Ordinance No. 2339, New Series

The following uses listed in Table B.2 are allowed within this PD by right. This PD defers to the Permitted Uses Table for the mixed-use Commercial Business District (CBD) and Ground Floor Overlay District within the Downtown Specific Plan as amended, where this PD table is silent. The Ground Floor Overlay district applies to the first floor within 60-feet from property line adjacent to Monterey Road and 80-feet at 1st and 2nd Street.

P = Permitted Use
Permitted Uses and Conditionally Permitted Uses Table B.2 Commercial /Service /Retail Uses
Commercial Recreation (3,000 sq.ft. or less) P
Commercial Service P
Food Service, takeout P
Hotel* P
Bar (ancillary to a hotel or restaurant) P
Convenience Market / Specialty Food Market (ancillary to a hotel) P Restaurant (beer & wine or full bar) P
Retail Store P
Personal Services P
*Hotel as defined in this PD includes hotel lobby, restaurants with option for full service bar, bars, and retail stores. It also allows conference rooms, banquet hall rooms, and service areas including prep kitchens that support those uses.

City of Morgan Hill
Ordinance No. 2339, New Series

Exhibit B
Zoning Map Amendment
Existing Zoning Designation – Commercial Business District (Mixed Use Downtown) with Ground Floor Overlay District.

Site Area 1.9 Acres APN: 726-14-074
PD
PD Proposed Zoning Designation – Commercial Business District (Mixed Use Downtown) with Ground Floor Overlay District and Planned Development
Site Area 1.9 Acres APN: 726-14-074

5 CITY COUNCIL STAFF REPORT
MEETING DATE: December 7, 2022
PREPARED BY:

Kim Mancera, Deputy City Clerk
APPROVED BY: City Manager
ADOPT ORDINANCE NO. 2340, NEW SERIES, ADDING CHAPTER

15.62 (ELECTRIC VEHICLE INFRASTRUCTURE) TO TITLE 15
(BUILDINGS AND CONSTRUCTION) TO THE MORGAN HILL

MUNICIPAL CODE REQUIRING THE ADDITION OF ELECTRIC

VEHICLE INFRASTRUCTURE FOR PARKING THAT SERVES NEWLY

CONSTRUCTED AND EXISTING BUILDINGS

RECOMMENDATION(S)
Waive the reading, adopt Ordinance No. 2340, 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
Protecting the Environment
Maintaining and Enhancing Infrastructure
Advancing Regional Initiatives
Guiding Documents
Climate Action Plan
REPORT NARRATIVE:

On November 16, 2022, the City Council introduced Ordinance No. 2340 New Series, by the following roll call vote: AYES: Constantine, Borgioli, Martinez Beltran, McKay, Spring; NOES: None; ABSTAIN: None; ABSENT: None. The purpose of the proposed ordinance is to require installation of electric vehicle (EV) charging infrastructure as part of all new development projects and retrofit projects in the City of Morgan Hill (see Attachment 1). The proposed EV Charging Infrastructure Ordinance is the first step toward meeting Climate Action Plan (CAP) goals and action items.

COMMUNITY ENGAGEMENT:

Consult
The proposed EV Charging Infrastructure Ordinance is consistent with goals and actions approved in the City's adopted CAP. Development of the CAP goals and action items involved community outreach and engagement. The City held a Community

5 Meeting on the CAP as a kick-off to the outreach effort. Community members were invited to participate in a Working Group. Once formed, the Working Group had substantial involvement in developing the CAP over several months. In addition, a Town Hall was dedicated to the CAP.

ALTERNATIVE ACTIONS:

Not Applicable.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The Climate Emergency Resolution, adopted by the City Council on May 26, 2021, stated the following: the City of Morgan Hill commits to initiate the creation of a HighlyFocused Climate Action Plan in 2021, with strong greenhouse gas reduction targets.

The Morgan Hill CAP was adopted in December 2021 and focused on greenhouse gas emission reductions through the building and transportation sectors.

FISCAL AND RESOURCE IMPACT:

Fiscal impacts will be felt by residents and businesses doing retrofit projects, and by developers proposing new projects. It is not anticipated that the proposed EV Charging Infrastructure Ordinance will result in direct costs to the City. Since affordable housing projects are often difficult to finance, SVCE has established a special grant program that subsidizes the installation of electric vehicle charging in new low and very-low income developments built through 2025.

From an operations perspective, the Development Services Department will need to ensure the required number and type of EV charging spaces are provided for each project, and Building Department staff will need to ensure proper installation of the required chargers. The Environmental Services Division will support the Development Services Department in implementation and on review of specific projects as needed. It is anticipated that current staff can incorporate these activities within their existing work plan.

By bringing this ordinance forth to a vote prior to the end of the calendar year, the City will be the recipient of a $10,000 grant from Silicon Valley Clean Energy (SVCE).

CEQA (California Environmental Quality Act):

Categorical Exemption
The activities described in this Staff Report are categorically exempt under CEQA, specifically pursuant to Section 15308 of the CEQA Guidelines (Actions by Regulatory Agencies for Protection of the Environment). The ordinance being adopted will implement requirements for installation of EV charging infrastructure to protect the environment from the impacts of climate change.

ORDINANCE NO. 2340, NEW SERIES

AN ORDINANCE OF THE CITY OF MORGAN HILL
ADDING CHAPTER 15.62 (ELECTRIC VEHICLE
INFRASTRUCTURE) TO TITLE 15 (BUILDINGS AND

CONSTRUCTION) TO THE MORGAN HILL MUNICIPAL

CODE REQUIRING THE ADDITION OF ELECTRIC

VEHICLE INFRASTRUCTURE FOR PARKING THAT

SERVES NEWLY CONSTRUCTED AND EXISTING

BUILDINGS

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

Section 1: Chapter 15.62 of the Morgan Hill Municipal Code is hereby added to read as follows:

Chapter 15.62

ELECTRIC VEHICLE CHARGING INFRASTRUCTURE
Sections:

15.62.010 Findings and Purpose.

15.62.020 Applicability.

15.62.030 Exceptions.

15.62.040 Definitions.

15.62.050 Residential Mandatory Measures.

15.62.060 Other Mandatory Measures.

15.62.070 Direct Current Fast Charging Stations.

15.62.010 - Findings and Purpose.

The Council finds and expressly declares as follows:

A. Scientific evidence has established that the burning of fossil fuels, including gasoline and diesel used for transportation, is the largest contributor to greenhouse gas emissions emitted. Burning fossil fuels like gasoline and diesel releases significant amounts of greenhouse gas emissions into the air which contributes to global warming and climate change.

B. The following addition to the Morgan Hill Municipal Code is reasonably necessary because of local climatic, geologic and topographical conditions as listed below:

City of Morgan Hill
Ordinance No. 2340, New Series

(1) Morgan Hill is situated along a wildland-urban interface and is extremely vulnerable to wildfires and firestorms, and human activities releasing greenhouse gases into the atmosphere cause increases in worldwide average temperature, drought conditions, vegetative fuel, and length of fire seasons. (2) Morgan Hill relies on water imported into the region for groundwater recharge and climate change is already causing changes in rainfall and snowfall which threaten to interrupt the supply of imported water.

C. The following addition to the Morgan Hill Municipal Code is also reasonably necessary because of health and safety concerns as Morgan Hill residents suffer from asthma and other health conditions associated with poor air quality exacerbated by smog from cars.

D. Electric vehicles are linked to lower greenhouse gas emissions and is cost competitive because of the cost savings associated with electric vehicle designs that avoid the use of gasoline.

E. Use of electric vehicles benefit the health, welfare, and resiliency of Morgan Hill and its residents.

F. The most cost-effective time to integrate electrical infrastructure for electric vehicle charging is in the design phase of a project because electrical systems can be designed to accommodate power needs.

G. It is the intent of the council to create abundant and accessible charging opportunities as a way to encourage the use of electric vehicles over traditional gasoline driven vehicles.

15.62.020 - Applicability.

The requirements of this Chapter shall apply to all parking that will serve newly constructed buildings proposed to be located in whole or in part within the City, and also for parking that will serve existing buildings as described, except that the provisions of this Chapter will not apply to any project for which a complete development application has been submitted.

15.62.030 - Exceptions.

A. It may be determined that the requirements of this Chapter do not apply on a case-by-case basis where the City of Morgan Hill has determined EV charging and infrastructure are not feasible based upon one or more of the following conditions:
(1) Where there is no local utility power supply or the local utility is unable to supply adequate power.
(2) Where there is evidence suitable to the City of Morgan Hill substantiating that additional local utility infrastructure design requirements, directly related to the implementation of Chapter 15.62 may increase construction cost by an average of $4,500 per parking space for market rate housing or for any non-residential development, or by $400 per parking space for Affordable Housing. EV infrastructure shall be provided up to the level that would not exceed this cost for

City of Morgan Hill
Ordinance No. 2340, New Series

utility service, after including all applicable subsidies, grants, or rebates.

B. Accessory Dwelling Units (ADU) and Junior Accessory Dwelling Units (JADU) without additional parking facilities and without electrical panel upgrade or new panel installation.

Note that detached ADUs, attached ADUs, and JADUs without additional parking but with electrical panel upgrades or new panels do not qualify for an exception and must have reserved breakers and electrical capacity according to the requirements of 15.62.050(A).

15.62.040 - Definitions.

A. “Affordable Housing” means residential buildings that entirely consist of units below market rate and whose rents or sales prices are governed by local agencies to be affordable based on area median income.

B. “Automatic Load Management System (ALMS)” shall mean a control system designed to manage load across one or more electric vehicle supply equipment (EVSE), circuits, panels and to share electrical capacity and/or automatically manage power at each connection point. Unless otherwise noted, ALMS systems shall be designed to deliver no less than 3.3 kVa (208/240 volt, 16-ampere) to each EV Capable, EV Ready or EVCS space served by the ALMS, and meet the requirements of California Electrical Code.

C. “Direct Current Fast Charging (DCFC)” shall mean a parking space provided with electrical infrastructure that meets the following conditions:

1. A minimum of 48 kVa (480 volt, 100-ampere) capacity wiring.

2. Electric vehicle supply equipment (EVSE) located within three (3) feet of the parking space providing a minimum capacity of 80-ampere.

D. “Electric Vehicle (EV) Capable Space” means a vehicle space with electrical panel space and load capacity to support a branch circuit and necessary raceways, to support EV charging.

E. “Electric Vehicle Charging Station (EVCS)” means a parking space that includes installation of electric vehicle supply equipment (EVSE) at an EV Ready space. An EVCS space may be used to satisfy EV Ready space requirements. EVSE shall be installed in accordance with the California Electrical Code.

F. “Electric Vehicle (EV) Ready Space” means a vehicle space which is provided with a branch circuit and any necessary raceways terminating in a receptacle or a charger.

G. “Electric Vehicle Supply Equipment (EVSE)” shall mean the conductors, including the ungrounded, grounded and equipment grounding conductors and the electric vehicle connectors, attachment plugs, and all other fittings, devices, power outlets, or apparatus installed specifically for the purpose of transferring energy between the premises wiring and the electric vehicle.

H. “Level 2 EV Capable” means a parking space provided with electrical infrastructure that meets the following requirements:

1. Conduit that links a listed electrical panel with sufficient capacity to a junction box

City of Morgan Hill
Ordinance No. 2340, New Series

or receptacle located within three (3) feet of the parking space.

2. The conduit shall be designed to accommodate at least 8.3 kVa (208/240 volt, 40- ampere) per parking space. Conduit shall have a minimum nominal trade size of 1 inch inside diameter and may be sized for multiple circuits as allowed by the California Electrical Code. Conduit shall be installed at a minimum in spaces that will be inaccessible after construction, either trenched underground or where penetrations to walls, floors, or other partitions would otherwise be required for future installation of branch circuits, and such additional elements deemed necessary by the Building Official. Construction documents shall indicate future completion of conduit from the panel to the parking space, via the installed inaccessible conduit.

3. The electrical panel shall reserve a space for a 40-ampere overcurrent protective device space(s) for EV charging, labeled in the panel directory as “EV Capable.”

4. Electrical load calculations shall demonstrate that the electrical panel service capacity and electrical system, including any on-site distribution transformer(s), have sufficient capacity to simultaneously charge all EVs at all required EV spaces at a minimum of 40 amperes.

5. The parking space shall contain signage with at least a 12” font adjacent to the parking space indicating the space is EV Capable.

I. “Level 1 EV Ready” shall mean a parking space that is served by a complete electric circuit with the following requirements:

1. A minimum of 2.2 kVa (110/120 volt, 20-ampere) capacity wiring.

2. A receptacle labeled “Electric Vehicle Outlet” or electric vehicle supply equipment located within three (3) feet of the parking space. If EVSE is provided the minimum capacity of the EVSE shall be 16-ampere.

3. Conduit oversized to accommodate future Level 2 EV Ready (208/240 volt, 40- ampere) at each parking space.

J. “Level 2 EV Ready” shall mean a parking space that is served by a complete electric circuit with the following requirements:

1. A minimum of 8.3 kVa (208/240 volt, 40-ampere) capacity wiring.

2. A receptacle labeled “Electric Vehicle Outlet” or electric vehicle supply equipment located within three (3) feet of the parking space. If EVSE is provided the minimum capacity of the EVSE shall be 30-ampere.

K. “Low Power Level 2 EV Ready” shall mean a parking space that is served by a complete electric circuit with the following requirements:

1. A minimum of 4.1 kVA (208/240 Volt, 20-ampere) capacity wiring.

2. A receptacle labeled “Electric Vehicle Outlet” or electric vehicle supply equipment located within three (3) feet of the parking space. If EVSE is provided the minimum capacity of the EVSE shall be 16-ampere.

City of Morgan Hill
Ordinance No. 2340, New Series

3. Conduit oversized to accommodate future Level 2 EV Ready (208/240 volt, 40- ampere) at each parking space.

L. “Multifamily Dwelling” or "Multifamily" means a building that contains three or more dwelling units, with each unit providing complete, independent living facilities for one or more persons, including permanent provisions for living, sleeping, eating, cooking, and sanitation. Includes multi-family senior housing limited to occupancy by persons fifty-five years of age or older for residents who are independent and do not require assistance with everyday living ("independent living").

M. “Office Building” means a place of employment occupied by businesses providing professional, executive, management, or administrative services.

15.62.050 –Minimum Parking Spaces
All electric vehicle (EV) spaces shall count toward the minimum required parking spaces. Where two or more primary uses occupy a single site, the EV infrastructure required for each use shall be calculated separately. Calculations for the required minimum number spaces with EV infrastructure shall be rounded up to the nearest whole number. Requirements represent the minimum charging infrastructure required, and increases in installed infrastructure, such as EV Supply Equipment and delivered power, shall be permissible.

15.62.060 - Residential Mandatory Measures.

A. Parking Provided for Residential Occupancy – Units with Private Dedicated Garages.

1.New Construction. One parking space provided in the garages shall be a Level 2 EV Ready space. If a second parking space is provided, it shall be provided with a Level 1 EV Ready space.

2.Existing Buildings at Retrofit. Parking additions to new or expanded garages or electrical panel upgrades must have reserved breaker spaces to accommodate parking per the requirements of 15.62.50(A)(1).

B. Parking Provided for Multifamily Residential Occupancy - Shared Parking Facilities.

These requirements apply to parking spaces that are assigned or leased to individual dwelling units, as well as unassigned residential parking. The total number of EV charging spaces shall be one-hundred percent (100%) of dwelling units or one-hundred percent (100%) of residential parking spaces, whichever is less. Visitor parking is not included.

1. New Construction. Forty percent (40%) of parking spaces shall be EVCS with Level 2 EV Ready. Sixty percent (60%) of parking spaces shall be provided with at minimum a Level 1 EV Ready space. ALMS shall be permitted to reduce load when multiple vehicles are charging.

2. Existing Buildings at Retrofit. When a Building Permit is required for a retrofit project at a multifamily complex and the construction valuation exceeds $1,000,000 then either thirty percent (30%) of the total number of parking spaces shall be upgraded to EVCS or ten percent (10%) of the cost of the retrofit shall be spent toward meeting that goal, whichever costs less. When new parking facilities are

City of Morgan Hill
Ordinance No. 2340, New Series

added and ALMS is installed, the ALMS system shall be designed to deliver no less than 2.2 kVa (110/120 volt, 20-ampere).

15.62.070 - Other Mandatory Measures.

A. Parking Provided for Office Buildings – New Construction

1. Twenty percent (20%) of parking spaces shall be EVCS with Level 2 EV Ready.

ALMS shall be permitted to reduce load when multiple vehicles are charging.

2. Thirty percent (30%) of parking spaces provided shall be Level 2 EV Capable.

B. Parking Provided for Hotel and Motel Occupancies – New Construction

1. Ten percent (10%) of parking spaces provided shall be EVCS with Level 2 EV Ready. ALMS shall be permitted to reduce load when multiple vehicles are charging.

2. Twenty-five percent (25%) of parking spaces provided shall be Low Power Level 2 EV Ready space.

3. Ten percent (10%) of parking spaces provided shall be Level 2 EV Capable.

C. Parking Provided for All Other Nonresidential Occupancies – New Construction

1. Ten percent (10%) of parking spaces provided shall be EVCS with Level 2 EV Ready. ALMS shall be permitted to reduce load when multiple vehicles are charging.

2. Ten percent (10%) of parking spaces provided shall be Level 2 EV Capable.

D. Parking Provided for Existing Office, Hotel and Motels, and all Other Nonresidential Occupancies – at Retrofit.

1. When a Building Permit is required and the valuation exceeds $1,000,000 then either ten percent (10%) of the total number of regular parking spaces shall be upgraded to EVCS or ten percent (10%) of the cost of the retrofit shall be spent toward meeting that goal, whichever costs less.

15.62.080 - Direct Current Fast Charging Stations.

One Direct Current Fast Charging Station (DCFC) may be substituted for up to five (5) EVCS to meet the requirements of sections 15.62.050 and 15.62.060. Where ALMS serve DCFC stations, the power demand from the DCFC shall be prioritized above Level 1 and Level 2 spaces.

Section 2. This Ordinance shall be submitted to the California Building Standards Commission following adoption as consistent with state law.

Section 3. Severability. Should any provision of this ordinance be deemed unconstitutional or unenforceable by a court of competent jurisdiction, such provision shall be severed from the ordinance, and such severance shall not affect the remainder of the ordinance.

Section 4. This Ordinance shall take effect on July 1, 2023. The City Clerk is hereby directed to publish this Ordinance or a summary thereof pursuant to Government Code Section 36933.

City of Morgan Hill
Ordinance No. 2340, New Series

THE FOREGOING ORDINANCE WAS INTRODUCED AT A MEETING OF THE CITY COUNCIL HELD ON THE 16th DAY OF NOVEMBER 2022, AND WAS FINALLY ADOPTED AT A MEETING OF THE CITY COUNCIL HELD ON THE 7th DAY OF DECEMBER 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. 2340, New Series, adopted by the City Council of the City of Morgan Hill, California at their regular meeting held on the 7th day of December 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: December 7, 2022
PREPARED BY:

Nichole Martin, Community Services Coordinator
APPROVED BY: City Manager

ADOPT HAZARDOUS VEGETATION ABATEMENT RESOLUTION,

EXEMPT FROM CALIFORNIA ENVIRONMENTAL QUALITY ACT
(CEQA) UNDER SECTION 15304(I)

RECOMMENDATION(S)
Adopt resolution declaring weeds and brush to be a nuisance and setting the hazardous vegetation public hearing on February 15, 2023.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety
REPORT NARRATIVE:

Under Government Code section 39561, cities may adopt a resolution declaring weeds and dry brush to be a public nuisance and order their abatement (Attachment 1). Weed and brush abatement services constitute the City’s hazardous vegetation program and are key to reducing fire risk and protecting public safety. The City of Morgan Hill has contracted with Santa Clara County for weed and brush abatement services since 1996.

In the last several years, City and County staff have successfully worked together to streamline program administration and improve communications with Morgan Hill property owners. The County’s Consumer and Environmental Protection Agency - Weed Abatement Program manages the program.

As in prior years, staff has combined the initial resolution for both the weed and brush abatement programs. Staff proposes that the abatement program commencement hearing take place on February 15, 2023. Once the resolution is adopted, County staff will notify the affected property owners of the February 15th public hearing and of their obligations to abate hazardous vegetation before the deadline. In response to the City’s past request for more notification to the property owners, the County will also be mailing a courtesy notice out to affected property owners in the early Spring to further remind them of their obligations.

The City’s Fire Department and the County’s Weed Abatement Division are continuing to integrate their efforts and communication methods to enhance customer service. The

6 improvements instituted have eliminated customer complaints about receiving conflicting information from the two programs.

COMMUNITY ENGAGEMENT:

Empower
The hazardous vegetation abatement program relies on a full range of community engagement approaches. Much of it begins when the County Program or City Fire Department informs a property owner that a hazardous situation has been observed on their property. The owner is given several months during which they may consult and work together with program staff to understand the situation and the needed remedies.

Ultimately, each property owner is invited and empowered to remedy the situation themselves in order to minimize their program charges while maintaining public safety.

In addition, many of the properties on the original list got onto the list as a result of a complaint from a community member about a hazardous situation.

ALTERNATIVE ACTIONS:

The Council could choose not to act or delay action on this resolution. Not declaring weeds and brush to be a nuisance would potentially compromise community fire safety.

Delaying action would ultimately provide the affected property owners with less notice and time to plan for abating their hazardous vegetation.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

While this will be the first Council action addressing hazardous vegetation for the 2023 fire season, the recommended approach is consistent with the actions taken by the Council for over a decade.

FISCAL AND RESOURCE IMPACT:

The Hazardous Vegetation Program is designed to be user-fee supported. The per-lot assessment includes costs for doing the weed and brush control work plus overhead County costs to administer the program. Based on the City’s agreement with the County, the City may need to ultimately contribute to the program’s costs if user fee revenues do not completely cover all of the County’s costs. Administering this program is an activity anticipated in the Public Services and Fire Departments’ work programs and budgets. Fees imposed by the County Program do not cover the cost of the City staff time associated in providing oversight and those resources are budgeted and funded through the General Fund (010).

CEQA (California Environmental Quality Act):

Categorical Exemption
These activities are categorically exempt from environmental review under the California Environmental Quality Act pursuant to California Code of Regulations, Title 21, Section 15304(i) (Minor Alterations to Land – Fuel Management Activities).

RESOLUTION NO. 22-XXX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF MORGAN HILL DECLARING CERTAIN HAZARDOUS

VEGETATION GROWING IN THE CITY OF MORGAN

HILL TO BE A PUBLIC NUISANCE, DESCRIBING
PROPERTIES WHERE SUCH NUISANCE EXISTS;

ORDERING ABATEMENT AND SETTING A PUBLIC

HEARING THEREON
WHEREAS, the City Council finds that certain weeds and brush are growing in the City of Morgan Hill upon the various streets, alleys, sidewalks, and upon private property, which said weeds and brush bear seeds of a wingy or downy nature, or may attain such growth as to become, when dry, a fire menace, or which are otherwise noxious and dangerous; and WHEREAS, the City Council further finds and declares that said weeds and brush constitute a public nuisance.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Morgan Hill authorizes as follows:

1. That the weeds, as described in the above recital, constitute and will continue to constitute a public nuisance, and it is ordered that this public nuisance be abated in the manner provided in Title 8, Chapter 8.20 of the Morgan Hill Municipal Code.

2. That the nuisance exists upon all streets, alleys, sidewalks, and private property within said City as shown, described and delineated on the several maps of the property in the City, which are recorded in the Office of the County Recorder of the County of Santa Clara, reference in each instance for the description of any particular street, alley, or private property being hereby made to the several maps mentioned, and in the event of there being several subdivision maps on which lots are shown, reference is hereby made to the latest subdivision map.

3. That it is ordered that Wednesday, the 15th day of February 2023, at 7:00 p.m., in the Council Chambers of the City Council of the City of Morgan Hill is hereby fixed as the time and place when objections to the proposed destruction or removal of weeds shall be heard and be given due consideration.

4. That the City Clerk of the City of Morgan Hill is hereby ordered and directed to cause notice of the adoption of this Resolution and notice of hearing to be given to property owners pursuant to Section 39562.1 of the Government Code.

City of Morgan Hill
Resolution No. 22-xxx

PASSED AND ADOPTED by the City Council of Morgan Hill at a Regular Meeting held on the 7
th day of December 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-xxx, adopted by the City Council at the meeting held on December 7, 2022.

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

DATE:

MICHELLE BIGELOW, City Clerk

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

Mario Jimenez, Associate Engineer
APPROVED BY: City Manager

APPROVE CITY OF MORGAN HILL'S SANITARY SEWER

MANAGEMENT PLAN (SSMP) AS REQUIRED BY STATE WATER

RESOURCES CONTROL BOARD, EXEMPT FROM CEQA UNDER
SECTION 15302

RECOMMENDATION(S)
Adopt resolution approving the Sanitary Sewer Management Plan (SSMP).

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
Preserving and Cultivating Public Trust
2022-2023 Strategic Priorities
Fiscal Sustainability
Guiding Documents
Morgan Hill 2035 General Plan
Wastewater System Master Plan
REPORT NARRATIVE:

Introduction
The purpose of this report is to present to the City Council the 2022 Sanitary Sewer Management Plan (SSMP), Overflow Emergency Response Plan (OERP) and Water Quality Monitoring Plan (WQMP). The OERP and WQMP are elements of the SSMP and are located in the appendices of the document.

Sanitary Sewer Management Plan Overview
Agencies that operate a sanitary sewer collection system that exceed 1-mile in length must comply with the State Water Resource Control Board's (SWRCB) General Waste Discharge Order No. 2006-0003-DWQ . The City of Morgan Hill's sewer system consists of 163 miles of sewer mains. The SSMP must be approved by the City Council as the governing body responsible for the sanitary sewer collection system. The Plan

7 documents what the City has been doing to minimize sanitary sewer overflows; it does not create additional work and therefore has no additional cost impacts.

COMMUNITY ENGAGEMENT:

Inform
This report serves to inform the community of Morgan Hill's SSMP as required by the State Water Resources Control Board.

ALTERNATIVE ACTIONS:

There is no alternative to adopting a Sanitary Sewer Management Plan as it is a requirement under State Law. The City is bound to this requirement because the City owns and operates a sanitary sewer collection system.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

City Council approved the previous Sanitary Sewer Management Plan on February 21, 2018, Resolution #18-015.

FISCAL AND RESOURCE IMPACT:

There is sufficient funding in the Fiscal Year 2022-23 Utilities Division operating budget to prepare the Sanitary Sewer Management Plan. Supporting an update to the Plan was an anticipated work item for the Utilities Division.

CEQA (California Environmental Quality Act):

Categorical Exemption
The SSMP implements portions of the City's 2035 General Plan. Replacement or reconstruction of existing utility systems and/or facilities that do not expand capacity is exempt from CEQA under guideline 15302.

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
MORGAN HILL APPROVING THE 2022 SANITARY SEWER

MANAGEMENT PLAN
WHEREAS, the State Water Resources Control Board Order No. 2006-0003- Statewide General Waste Discharge Requirements (WDR) for Sanitary Sewer Systems requires the preparation of a Sanitary Sewer Management Plan (SSMP); and WHEREAS, the City of Morgan Hill Owns and operates a sanitary sewer collection system subject to the WDR requirements of the State; and
WHEREAS, the City has revised and updated its SSMP; and WHEREAS, the revised SSMP was presented to the City Council at a regularly scheduled Council Meeting on, December 7, 2022 allowing for public input prior to consideration and adoption; and
WHEREAS, the City Council determines that adoption of this Resolution is in the public interest.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MORGAN HILL DOES HEREBY FIND, DETERMINE, RESOLVE AND ORDER AS FOLLOWS:

Section 1. Approve the SSMP as required by the State Water Resources Control Board Order No. 2006-0003-Statewide General Waste Discharge Requirements for Sanitary Sewer Systems.

PASSED, APPROVED, AND ADOPTED by the City Council of the City of Morgan Hill at its meeting held on this 7th day of December, 2022 by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: 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.XXXX , adopted by the City Council at the meeting held on December 7, 2022.

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

DATE: ________________ ________________________________ Michelle Bigelow, CITY CLERK

8 CITY COUNCIL STAFF REPORT
MEETING DATE: December 7, 2022
PREPARED BY:

Mariah Dabel, Public Services Administrative Manager
APPROVED BY: City Manager

APPROVE FIRST AMENDMENT TO THE SPECTRUM PACIFIC WEST,

LLC OPEN TRANSPORT NETWORK (OTN) FACILITIES LICENSE
AGREEMENT, EXEMPT FROM CEQA CLASS 1, EXISTING FACILITIES

RECOMMENDATION(S)
Approve the First Amendment to the Spectrum Pacific West, LLC License Agreement.

COUNCIL PRIORITIES, GOALS & STRATEGIES
2022-2023 Strategic Priorities
Fiscal Sustainability
REPORT NARRATIVE:

This item recommends approval of a First Amendment with Spectrum Pacific West, LLC, formerly SSO SoCal I, LLC (dba Charter). The City of Morgan Hill has a License Agreement with Charter for use of a City-owned site on which Charter operates and maintains its Open Transport Network Facilities (OTN Facilities). The OTN Facilities support connectivity for the delivery of cable services by Charter in Morgan Hill. The current agreement term began January 1, 2013 and ends December 31, 2022.

In early 2022, Spectrum approached the City to request an amendment to extend the agreement. Based on a review of the City's property use agreement terms with other communications providers, staff is recommending an extension of the agreement term for an additional five years plus the option to extend for one additional five-year term.

Under the amendment, the annual rent payment for use of the site would increase from $18,000 to $40,000, with a 3.5% annual increase during each year of the initial and extended terms.

The proposed First Amendment to the OTN Facilities License Agreement would authorize Charter's continued use of the site for OTN Facilities and related cabling and utilities. The First Amendment would generate cumulative revenue of $469,255 to the City from Charter for the term of the agreement from January 1, 2023 through December 31, 2032. The site is located on a portion of City used property which has no conflicts with City use.

Charter's use of the location will help maintain cable and internet services in the

8 community. As the proposed amendment will increase City revenues and maintain services, staff recommends approval of the First Amendment to the Agreement.

COMMUNITY ENGAGEMENT:

Inform: This report serves to inform the community of the recommended contract amendment.

ALTERNATIVE ACTIONS:

The Council could decline to approve the First Amendment and provide direction to staff on alternative negotiation terms. The City would forego the additional revenue if the amendment is not authorized.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The City’s current License Agreement for property use by Charter to support OTN Facilities expires on December 31, 2022. This License Agreement was approved by the City Council on December 19, 2012.

FISCAL AND RESOURCE IMPACT:

The revenue from the First Amendment to the OTN Facilities License Agreement would be credited to the General Fund (010) to support City services. With execution of the First Amendment, the City’s Fiscal Year 2022-2023 revenue for this item would increase by $11,000, from $18,000 to $29,000. Under the agreement terms, the lease payment increases by 3.5% annually. The resources to negotiate and administer property use agreements are included in the work program of the Public Services Department.

CEQA (California Environmental Quality Act):

Categorical Exemption
The licensing and minor alterations to existing facilities falls within the CEQA categorical exemption of Class 1, Existing Facilities.

FIRST AMENDMENT TO LICENSE AGREEMENT

BETWEEN THE CITY OF MORGAN HILL AND
SPECTRUM PACIFIC WEST, LLC (SUCCESSOR TO CCO SoCal I, LLC) This FIRST AMENDMENT TO LICENSE AGREEMENT (”First Amendment”) between the City of Morgan Hill, a municipal corporation, or its successor, (“City” or “Licensor”), and Spectrum Pacific West, LLC, a Delaware limited liability Company, successor to CCO SoCal I, LLC (“Charter" or “Licensee"), duly authorized to do business in California and will remain so during the Term of the Agreement, amends the respective agreement of City and Licensee in regard to the Agreement granting Charter a License for the continued use and occupancy of the City owned Parcel, located at , in the City of Morgan Hill, County of Santa Clara, State of California, commonly known as (the “Parcel”). This First Amendment is made and entered into as of _________, 2022 ("First Amendment Effective Date”). Throughout this First Amendment, City and Licensee are referred to collectively as the "Parties" and individually as a "Party."

RECITALS
The following recitals are a substantive part of this First Amendment:

1. This First Amendment is entered into pursuant to the action of City Council taken on _______________, 2022.

2. Parties entered into that License Agreement made as of January 1, 2013 (“License Agreement” or “Agreement”), for the use of the City facilities described in that License Agreement.

3. In December 2018, CCO SoCal I, LLC merged with and into Spectrum Pacific West, LLC, whereby Licensee is now operating under the name of Spectrum Pacific West, LLC.

4. The License Agreement is attached as Exhibit “1” to this First Amendment and made part of and incorporated herein, as amended by this First Amendment.

5. Any capitalized term used in this First Amendment but not defined in this First Amendment has the meaning given for such term in the License Agreement.

AMENDMENT
Now, therefore, for mutual consideration the receipt and sufficiency of which is hereby acknowledged by the Parties hereto, the Parties hereby agree that all terms and conditions of the License Agreement shall remain in full force and effect, except that the following amendment shall be made as set forth below:

A. Paragraph 3 shall be amended and replaced in its entirety by the following:
“3. TERM. The term of this Agreement is effective from January 1, 2013 through December 31, 2027 ("Term"). The term of the Agreement may be extended for up to five years by mutual consent of the Parties. The City’s consent shall not be unreasonably withheld. The City Manager is authorized on behalf of the City to renew for one additional five-year term through December 31, 2032 upon the same other terms and conditions contained herein on the First Amendment Effective Date. Notwithstanding anything to the contrary contained in this Agreement, Licensee shall have the right to terminate this Agreement at any time for any reason whatsoever upon 30 days prior written notice to Licensor ("Licensee’s Termination Notice").

Upon Licensee's compliance with the terms of this section, this Agreement will terminate as of the date of termination set forth in Licensee's Termination Notice (the "Early Termination Date"), and neither Licensor nor Licensee will have any further rights or obligations under this Agreement, except with respect to those matters in this Agreement that expressly survive the termination of this Agreement. On or before the Early Termination Date, Licensee shall surrender the License Area in accordance with Section 14 of this Agreement and Licensee shall pay to Licensor an early termination fee equal to three times the then - applicable monthly license fee.” B. Paragraph 4.2 shall be amended by adding the following:
“4.2 License Fee Payments Due.

Period Monthly Fees
1/1/2023 to 12/31/2023 $3,333.33
1/1/2024 to 12/31/2027 and any renewal
period

3.5% annual increase during the primary
and renewal periods, with the first
increase 1/1/2024”
C. Paragraph 9, including all subsections, shall be amended and replaced in its entirety by the following
“9. Insurance Requirements. LICENSEE 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 LICENSEE, including its subcontractors, employees, agents, and invitees, or any other person entering upon or using the Premises, or any structure thereon, or any part thereof, or arising from LICENSEE’s use thereof, and must remain in full force and effect at all times during the period covered by this Agreement. Any self-insured retentions must be declared to and approved by City. 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. LICENSEE further understands that the CITY reserves the right to modify the insurance requirements set forth herein, with thirty (30) days’ notice provided to LICENSEE, at any time as deemed necessary to protect the interests of the CITY.

9.1 Insurance Types and Amounts.

9.1.1. Commercial General Liability (CGL). LICENSEE shall maintain CGL against claims and liabilities for personal injury, death, or property damage providing protection in the minimum amount of one million dollars ($1,000,000.00) combined single limit under LICENSEE’s combined insurance policies (including any excess or “umbrella” policies).

9.1.2. Automobile Liability. LICENSEE shall maintain Automobile Liability covering all owned, non-owned and hired automobiles (if LICENSEE does not own automobiles, then LICENSEE 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 one

million dollars ($1,000,000.00) combined single limit under LICENSEE’s combined insurance policies (including any excess or “umbrella” policies).

9.1.3. Workers’ Compensation Insurance and Employer’s Liability. LICENSEE shall maintain Workers Compensation coverage, as required by law, in the minimum amount of one million dollars ($1,000,000.00) for any one accident or occurrence available to LICENSEE under LICENSEE's combined insurance policies (including any excess or “umbrella” policies).

If LICENSEE is self-insured, LICENSEE shall provide its Certificate of Permission to Self-Insure, duly authorized by the Department of Industrial Relations.

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

9.2.1 General Liability.

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

9.2.1.2 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,

9.2.1.3 insurance shall be primary non-contributing.

9.2.2 Workers Compensation. If the performance of LICENSEE’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, LICENSEE’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.

9.3 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.

9.4 Absence of Insurance Coverage. City may direct LICENSEE to immediately cease all activities with respect to this License if it determines that LICENSEE fails to carry, in full force and effect, all insurance policies with coverages at or above the limits specified in this License. Any delays or expense caused due to stopping of work and change of insurance shall be considered LICENSEE’s delay and expense. At the City’s discretion, under conditions of lapse, City may purchase appropriate insurance and charge all costs related to such policy to LICENSEE.

9.5 Certificates. LICENSEE 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, LICENSEE shall promptly allow City of Morgan Hill to inspect copies of the Declaration pages with the premiums and deductibles redacted of all policies outlined herein. No policy subject to the LICENSEE’s agreement with the CITY shall be canceled or materially changed such that the coverage for the City is decreased below the requirements of the license except after thirty (30) days' notice by the insurer to CITY (other than due to nonpayment of premium, in which case the notice shall be 10 days). Certificates, including renewal certificates, may be mailed electronically to [email protected] or delivered to the Certificate Holder address provided herein Certificate Holder address:

City of Morgan Hill
Attn: Risk Management
17575 Peak Avenue
Morgan Hill, CA 95037
D. Address for service on the Licensee as set forth in paragraph 16 is changed to the following:

Spectrum Pacific West, LLC
c/o Charter Communications
6360 S. Fiddler’s Green Circle
Suite 100
Greenwood Village, Colorado 80111-4951
Attn: Corporate Real Estate
File No.: CA0246
With a copy to:
[email protected]
E. Signatures. The individuals executing this First Amendment represent and warrant that they have the legal capacity and authority to do so on behalf of their respective entities.

F. Conflicts. In the event of a conflict between the terms and provisions of this First Amendment and the terms and provisions of the Agreement or any earlier amendment, the terms of this First Amendment shall govern and control.

G. 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.

H. Counterparts. This First Amendment may be executed in counterparts, each of which (once executed) will constitute an original and all of which together (once executed) will constitute one and the same document.

I. Lender’s Consent. Licensor hereby represents and warrants that no lender consent is

required for this First Amendment. The effectiveness of this First Amendment is not conditioned upon Licensor receiving any lender’s consent.

J. Drafting. The Parties acknowledge that this First Amendment was fully negotiated by the Parties and that no provision of this First Amendment will be interpreted in favor of either Party, or against either Party, merely because such party or its legal representative or advisor drafted such provision.

K. Confirmation of License. The Parties confirm and ratify in all respects, the terms and conditions of the License Agreement, as amended by this First Amendment.

Signatures on the Next Page

11/28/2022
11/29/2022

EXHIBIT “1”
Copy of executed License Agreement date January 1, 2013

and incorporated herein by this reference (the "Exclusive License Area"); and (b) a right to run associated cables, conduit, coax and fiber and to install utilities, to and from a public right of way across the Parcel to the OTN Facilities in locations and routes as shown in drawings and maps submitted to and approved by Licensor (the "Non-Exclusive License Area"), which approval shall not be unreasonably withheld, conditioned or delayed. The Exclusive License Area and the Non-Exclusive License Area referenced in subsections (a), and (b) above are collectively referred to as the "License Area"). Notwithstanding anything to the contrary contained in this Agreement, any OTN Facilities, cables, conduit, coax, fibers and utilities previously installed by or on behalf of Licensee on the Parcel and existing as of the date of this Agreement ( collectively the "Existing Facilities") are deemed approved by Licensor pursuant to this Section I. Except for a Like-Kind Exchange, any other modification or alteration to the OTN Facilities shall require the prior written consent of City, which consent shall not be unreasonably withheld conditioned or delayed. If City fails to consent to or object to any proposed modification or alteration within 10 days after receipt of written notice thereof, the same shall be deemed approved. As used herein, "Like-Kind Exchange" shall mean a piece of equipment, system or a unit that: (i) has a substantially similar technological purpose or use, (ii) fits within the same or less space as the item being replaced and (iii) is mounted or connected in substantially the same manner as the equipment, system or unit being replaced. Upon installation, the Like-Kind Exchange shall be considered a part of the "Facilities" for purposes of this Agreement.

2. Permitted Activities. Licensee shall use the License Area solely for the installation, construction, operation, repair, replacement, maintenance, upgrade, modify and removal of: (a) all or a portion of the OTN Facilities (including any cabling or utilities related thereto) or any other network or communications system (including any cabling or utilities related thereto) used in connection with Licensee's business operations (collectively "Facilities"); (b) any fence, gate or other security system in or on the Licensed Area (subject to all permitting requirements of the City for any such fence, gate or security system); and (c) landscaping or weed control in or on the License Area (subsections (a), (b) and (c) are collectively the "Permitted Activities"). The aforementioned License includes access 24 hours a day, 7 days a week to the License Area from public rights of way and public easements around the License Area for the purpose of the Permitted Activities. All work performed by Licensee shall be in accordance with applicable laws and permitting requirements of the City. Subject to permitting requirements of the City, Chmier shall be permitted to use a temporary backup generator in the License Area or to install a permanent backup generator or other permanent power management device. Notwithstanding the foregoing, Licensor represents and warrants that the Existing Facilities have been constructed in accordance with the permitting requirements of the City (the "Existing City Approval").

3. Term. This Agreement shall be binding upon execution by both Licensor and Licensee and shall become effective as of the Effective Date set forth above. This Agreement shall expire on December 31, 2022 ("Tenn"). Notwithstanding anything to the contrary contained in this Agreement, Licensee shall have the right to terminate this Agreement at any time for any reason whatsoever upon 30 days prior written notice to Licensor ("Licensee's Termination Notice").

Upon Licensee's compliance with the terms of this section, this Agreement will terminate as of the date of termination set forth in Licensee's Termination Notice (the "Early Termination Date"), and neither Licensor nor Licensee will have any fmiher rights or obligations under this Agreement, except with respect to those matters in this Agreement that expressly survive the 2

termination of this Agreement. On or before the Early Termination Date, Licensee shall surrender the License Area in accordance with Section 14 of this Agreement and Licensee shall pay to Licensor an early termination fee equal to three times the then-applicable monthly license fee.

4. Consideration; License Fees

4.1. Consideration. As partial consideration for the terms and conditions set forth in this Agreement, the parties agree to enter into that "Mutual Waiver and Release" dated even date herewith ("Waiver and Release") and set fo11h on Exhibit B attached hereto.

4.2. License Fee Payments Due. Commencing as of the Effective Date, Licensee shall pay to Licensor, as monetary consideration for its use and occupancy of the License Area, the amounts shown below. Said fees shall be payable in monthly installments in advance on the first day of each month, without demand or offset except as expressly set forth herein, in the following amounts set forth below. If the Term commences on a day other than the first day of a calendar month or ends on a day other than the last day of a calendar month, then the fees will be appropriately prorated.

Period Monthly Fees
Effective Date-12/31/15 $500
1/1/16-12/31/19 $1,000
1/l /20-12/31/22 $1,500

4.3. Late Payment. Late payments shall accrue interest, from the date such payment is due, until paid, including accrned interest, at a non-compounding, annual rate of ten (10) percent. A late payment shall be (a) any payment received later than three days after the date specified herein for such payment, and /or (b) any payment of disputed amounts that is received more than forty-five (45) days after the date such payment is determined to have been due in a final resolution of such dispute.
5, Services and Utilities. Licensees shall contract directly with appropriate providers for utility services, if necessary, for the operation of its Facilities. Notwithstanding the foregoing and subject to any permitting requirements of the City, the City shall cooperate with Licensee, at no additional cost to Licensee, in the event any utility provider requires the written consent or other agreement of the City to provide such utility services.

6. Compliance with Laws. Licensee shall not use the License Area or knowingly allow anything to be done in the License Area, which will in any way conflict with any law, statute, ordinance or government rule or regulation now in force or which may hereafter to be enacted or promulgated. Licensee shall, at its sole cost and expense, promptly comply with all laws, statutes, ordinances, government rules, regulations, or requirements relating to or affecting the condition, use or occupancy of the License Area, but only to the extent directly caused by the 3

Permitted Activities. Licensee acknowledges that City has not, except as set forth herein, made any representations or warranties concerning the License Area, and Licensee shall be deemed to have inspected the License Area and accepted in its "as is" condition, subject to the express representations and warranties set forth herein. Licensee understands that certain of the Permitted Activities may require permitting or regulatory approvals from the City, or other federal, state or local regulatory or governmental entities. Licensee shall be solely responsible for obtaining any such regulatory permits or approvals. Licensee understands that to the extent such regulatory approvals are sought from the City, there is no guarantee or presumption that any such regulatory approval(s) will be issued and the City's status as an agency of the City shall in no way limit the obligation of Licensee to obtain approvals from the City or other regulatory agencies with jurisdiction over the License Area. The foregoing shall not negate the Existing City Approval of the Existing Facilities.

7. Assignment. Neither Licensee nor Licensor will assign this Agreement or any interest in this Agreement, without the prior written consent of the other party, which consent will not be unreasonably withheld, conditioned, or delayed. If the other party does not consent or object in writing to such proposed assignment within 10 days after its receipt of the request for consent, the consent will be deemed given. Notwithstanding anything to the contrary contained in this Agreement, each Licensee or Licensor shall have the right to assign this Agreement, without other party's consent, to any of its Affiliates (as defined below) or to any Successor (as defined below). Any such assignee shall have a similar right to assign this Agreement, without the other party's consent, to any of its Affiliates or Successor. As used herein, "Affiliates" means any corporation, public agency or other entity that controls, is controlled by, or is under common control with, assigning party, or any corporation, public agency or other entity that results from a merger or consolidation with assigning party. As used herein, "Successor" means, in the case of Licensee, any purchaser of all or a portion of the communications systems, equipment or business operations of Licensee or Licensee's Affiliates located on or related to the License Area, and, in the case of Licensor, any purchaser of all or a portion of the fee or property interest in the License Area. Upon any assignment of this Agreement as permitted by this section, the assigning party shall be relieved of all obligations and liabilities arising hereunder after the date of the assignment. No h·ansfer or assignment of the stock of Licensee, or any ownership interest in Licensee, whether by sale, merger, exchange or other means, shall constitute an assignment of this Agreement. Notwithstanding the foregoing, in the event of a sale, conveyance or other transfer by Licensor of the real property upon which the License Area is situated, this Agreement shall remain in full force and effect subject to its terms and conditions set forth herein. 8, Taxes and Assessments. Licensor will pay when due all real property taxes and assessments assessed, levied, or imposed during the Term on the License Area; except that the Licensee shall pay any real property taxes and assessments assessed, levied or imposed by reason of Licensee's license or leasehold interest in the License Area (i.e. possessory interest tax), if applicable). Licensee will pay when due all personal property taxes on Licensee's personal property on the License Area.
4

9. Insurance.

9.1 Required Insu!'ance. Licensee shall maintain throughout the Tenn, at Licensee's expense, insurance as follows:
(a) Comprehensive or commercial general liability insurance with limits not less than one million dollars ($1,000,000) for each occurrence combined single limit for bodily injury and property damage, personal injury, products and completed operations, fire damage and liability with limits of not less than two million dollars ($2,000,000) in the aggregate;
(b) Workers Compensation insurance as required under the California Labor Code and Employer's Liability Insurance with limits of not less than one million dollars ($1,000,000) for each accident.
(c) Comprehensive or Business Automobile Liability Insurance with limits not less than one million dollars ($1,000,000) each occurrence, combine Single Limit for Bodily Injury and Property Damage, including coverage for owned, non-owned and hired automobile as applicable, which insurance shall be required if any automobiles or any other motor vehicle are operated in connection with Licensee activity on, in or around the License Area.

9.2 Claims Made Policy. Should any of the required insurance be provided under a claimsmade form, Licensee shall maintain such coverage continuously throughout the Term and without lapse, for two (2) years beyond the expiration of this Agreement, to the effect that, should occurrences during the Tenn give rise to claims after expiration of this Agreement, such claims shall be covered by such claims-made policy.

9.3 Annual Aggregate Limit. Should any of the required insurance be provided under a form of coverage that includes a general annual aggregate limit or provides that claims investigation or legal defense cost be included in such annual aggregate limit, such annual aggregate limit shall be not less than double the occmTence limit specified above.

9.4 Additional Insul'eds. Liability policies shall name the following as additional insureds:
"the City of Morgan Hill and their officers, directors, employees and agents."

9.5 Primal'y Insul'ance; Waive!' of Sub!'ogation Rights. Insurance afforded by the additional insured endorsement shall apply as primary insurance, and other insurance maintained by the City, its officers, agents, and employees shall be excess only and not contributing with insurance provided under this policy. Additionally, such insurance shall include an insurer's waiver of subrogation in favor of the City.

9.6 General Insul'ance Mattel's. All insurance policies shall endeavor to provide thitiy (30) days prior written notice of cancellation or non-renewal to Licensor at the address for Notices specified herein below. All insurance policies shall be endorsed to provide that such insurance is primary to any other insurance available to the additional insureds with respect to claims covered 5

under the policy. All insurance policies required to be maintained by Licensee hereunder shall be issued by an insurance company or companies authorized to do business in the State of California.

10. Default; Remedies.

10.1 Event of Default by Licensee. The occurrence of any one o_r more of the following events shall constitute a default by Licensee: (a) Failure by Licensee to pay when due any fees and/or all other charges due hereunder, and such failure continues for more than ten (10) business days after receipt of written notice thereof from Licensor ("Monetary Default"); (b) Failure by Licensee to perform its obligations under this Agreement, and such failure materially disrupts Licensor's ability to conduct normal City operations from the Parcel ("City Eme1·gency Default"); or (c) any other failure by Licensee under this Agreement that is not otherwise a Monetary Default or a City Emergency Default ("City Non-Emergency Default"). If Licensee fails to commence a cure for a City Emergency Default within one business day after written notice regarding the same, or if Licensee fails to diligently pursue such cure to completion, then Licensor shall have the right, in its sole discretion, to exercise such self-help measures as may be reasonably necessary to cure the City Emergency Default; provided, however, in no event shall the same include cutting any power, cable or connections to the OTN Facilities unless the same is necessary to avert imminent harm to the health or safety of persons on or near the Parcel. If Licensee fails to commence a cure for a City Non-Emergency Default within thirty (30) days after receipt of written notice thereof from Licensor, or if Licensee fails to diligently pursue such cure to completion, then Licensor shall have the right, in its sole discretion, to exercise such selfhelp measures as may be reasonably necessary to cure the City Non-Emergency Default; provided, however, in no event shall the same include cutting any power, cable or connections to the OTN Facilities unless the same is necessary to avert imminent harm to the health or safety of persons on or near the Parcel.

10.2 Licensor Remedies. Upon a Monetary Default or a City Non-Emergency Default by Licensee and after the expiration of applicable notice and cure periods, Licensor shall, without fmther notice or demand of any kind to Licensee or to any other person, and in addition to any other remedy Licensor may have under this Agreement and at law or equity, have the ability to immediately terminate this Agreement and Licensee's right to use the License Area. Upon notice of any such termination, Licensee shall immediately discontinue its use of the License Area and vacate the License Area within 30 days, and Licensor may take any and all action to enforce Licensee's obligations hereunder. Any costs and expenses incurred by Licensor to cure a City Emergency Default or a City Non-Emergency Default, as the case may be, shall be reimbursed by Licensee upon demand.

10.3 Event of Default by Licensor and Licensee Remedies. In the event of any default by Licensor in the performance of its obligations under this Agreement, Licensee will have the rights set forth herein. The occurrence of any one or more of the following events shall constitute a default by Licensor: (a) Failure by Licensor to perform its obligations under this License, and such failure materially disrupts Licensee's ability to conduct normal business operations from the License Area (an "Emergency Default."); or (b) any other failure by Licensor under this License that is not otherwise an Emergency Default ("Non-Emergency 6

Default"). If Licensor fails to commence a cure for such Emergency Default within one business day after written notice regarding the same, or if Licensor fails to diligently pursue such cure to completi01i, then Licensee shall have the right, in its sole discretion, to exercise such self-help measures as may be reasonably necessary to cure the Emergency Default; provided, however, in no event shall the same include cutting any water, sewer or utility lines unless the same is necessary to avert imminent harm to the health or safety of persons on or near the Parcel. If Licensor fails to commence a cure for such Non-Emergency Default within thirty (30) days after receipt of written notice thereof from Licensee, or if Licensor fails to diligently pursue such cure to completion, then Licensee shall have the right, in its sole discretion, to exercise such self-help measures as may be reasonably necessary to cure the Non-Emergency Default; provided, however, in no event shall the same include cutting any water, sewer or utility lines unless the same is necessary to avert imminent harm to the health or safety of persons on or near the Parcel.

Any costs and expenses incurred by Licensee to cure an Emergency Default or a NonEmergency Default, as the case may be, shall be reimbursed by Licensor upon demand. Whether or not Licensee exercises its self-help right, the fees hereunder shall be abated from the date following expiration of the applicable cure period until the date the specified default is cured.

Without limiting the foregoing, if Licensor fails to cure any default after the expiration of the applicable notice and the applicable cure period, Licensee shall also have the right to terminate this Agreement, without penalty, upon notice to Licensor, such termination to be effective as of the termination date designated on Licensee's termination notice.

11. Indemnity.

A. Except as waived and released herein, Licensee shall indemnify Licensor, its elected or appointed officials, boards, agencies, officers, and agents ( collectively, the "City Indemnified Parties") from, and if requested, shall defend them against any and all liability, injuries, losses, costs, claims, judgments, settlements, damages, liens, fines, penalties and expenses, including without limitations, direct and vicarious liability of any kind ( collectively "Claims") arising directly out of: (1) any injury to or death of any person including, but not limited to, agents and invitees of Licensee, or damage to destrnction of any property, caused by Licensee's use of the License Area under this Agreement or any pmi thereof; (2) any failure to Licensee to observe or perform any of the tenns, covenants or condition of this Agreement; (3) the use, occupancy or condition of the License Area by Licensee, its agents or invitees, or the activities therein by Licensee or its agents or invitees; ( 4) the use of the License Area or Parcel for uses not permitted under this Agreement; (5) the actions or omissions of Licensee, its agents, employees, contractors, licensees and invitees; or (6) the discharge, removal, CERCLA or other cleanup, or restoration of the Parcel caused by Licensee's introduction of Hazardous Substances (as defined in Section 13 below) to the Parcel. This indemnity shall exclude Claims relating solely and exclusively to the gross negligence or willful misconduct of the City or the City Indemnified Parties which is not contributed to by any act of, or by any omission to perform some duty imposed by law or agreement on Licensee or its agent or invitees.

In addition to Licensee's obligation to indemnify the City Indemnified Parties, Licensee specifically acknowledges and agrees that it has an immediate and independent obligation to defend City Indemnified Pmiies from any claims that actually fall within this indemnification provision, even if the allegations are or may be groundless, false or fraudulent. 7

The foregoing indemnity obligation of Licensee include indemnification from all loss and liability, including attorneys and consultants fees, court cost, investigation and remediation cost, and all other reasonable cost and expenses incurred by the City Indemnifed Parties. Licensee's obligations under this section will survive the expiration or other termination of this Agreement.

B. Except as waived and released herein, and to the extent permissible by applicable laws, Licensor shall indemnify Licensee, its members, officers, employees, agents, parent or affiliates ( collectively, the "Charter Indemnified Parties") from, and if requested, shall defend them against, and hold them harmless from, any and all Claims arising directly out of (1) the use of the Parcel by Licensor, its agents, employees, contractors, licensees and invitees; (2) Licensor's interference with Licensee's use and enjoyment of the License Area; (3) the actions or omissions of Licensor, its agents, employees, contractors, licensees and invitees; ( 4) a breach of any representations and wairnnties by Licensor set forth in this Agreement; ( 5) the removal, CERCLA or other cleanup, or restoration of the Parcel, except for any cleanup caused by Licensee's introduction of Hazardous Substances to the Parcel or (6) the failure of Licensor to comply with the terms of this Agreement. This indemnity shall exclude Claims relating solely and exclusively to the gross negligence or willful misconduct of the Charter Indemnified Parties which is not contributed to by any act of, or by any omission to perform some duty imposed by law or agreement on Licensee or its agent or invitees.

In addition to Licensor's obligation to indemnify the Charter Indemnified Parties, Licensor specifically acknowledges and agrees that it has an immediate and independent obligation to defend the Charter Indemnified Parties from any claims that actually fall within this indemnification provision, even if the allegations are or may be groundless, false or fraudulent.

The foregoing indemnity obligation of Licensor include indemnification from all loss and liability, including attorneys and consultants fees, comt costs, investigation and remediation costs, and all other reasonable costs and expenses incurred by the Charter Indemnified Parties.

Licensor's obligations under this section will survive the expiration or other termination of this Agreement.

C. Notwithstanding anything to the contrary contained in this Agreement, in no event shall either party be liable to the other party for any consequential, punitive, special or indirect damages.

12. Intentionally Omitted.

13. Hazardous Substances, As used herein, the term "Hazardous Substances" shall mean any chemical, substance, medical or other waste, living organism or combination thereof which is or may be hazardous to the environment or human or animal health or safety due to its radioactivity, ignitability, corrosivity, reactivity, explosivity, toxicity, carcinogenicity, mutagenicity, phytotoxicity, infectiousness or other harmful or potentially harn1ful properties or effects. Hazardous Substances shall include, without limitation, petroleum hydrocarbons, including crnde oil or any fraction thereof, asbestos, radon, polychlorinated biphenyls (PCBs), methane and all substances which now or in the future may be defined as "hazardous substances," "hazardous wastes," "extremely hazardous wastes," "hazardous materials," "toxic 8

substances," "infectious wastes," "biohazardous wastes," "medical wastes," "radioactive wastes" or which are otherwise listed, defined or regulated in any manner pursuant to any Environmental Laws. As used herein, "Environmental Laws" means all present and future federal, state and local laws, statutes, ordinances, rules, regulations, standards, directives, interpretations and conditions of approval, all administrative or judicial orders or decrees and all guidelines, permits, licenses, approvals and other entitlements, and rules of common law, pertaining to Hazardous Substances, the protection of the environment or human or animal health or safety.

Licensor represents and warrants that, to the best knowledge and belief of Licensor, the Parcel contains no Hazardous Substances. Licensor will not use or conduct operations on or at the Parcel, or manufacture, store, sell, use, dispose of, release, or discharge Hazardous Substances on or at the Parcel.

Licensee shall not cause or knowingly allow any Hazardous Substance to be used, manufactured, stored, discharged, released or disposed of in, from, under or about the License Area in violation of Environmental Laws. Without limiting the generality of the foregoing, Licensee, at its sole cost, shall comply with all Environmental Laws as the same relate to the Permitted Activities. If the presence of Hazardous Substances in, on or under the License Area, is caused, or knowingly allowed, by Licensee and results in contamination of the License Area or any soil or groundwater in, on or under the Parcel, then Licensee, at its sole cost and expense, shall promptly take all actions necessary to remediate such contamination. The termination of this Agreement shall not terminate or reduce the liability or obligations of Licensee under this Section 13, or as may be required by law, to clean up, monitor or remove any Hazardous Substances. Should Licensee cause or gain actual knowledge of the presence, discharge or release or any Hazardous Substances on the License Area or the Parcel, Licensee shall promptly notify Licensor of such presence, discharge or release; provided, however, that Licensee's mere discovery or notice of any presence, discharge or release shall not, in and of itself, trigger Licensee's indemnification obligations hereunder.

14. Sun-ender. Upon the expiration or earlier termination of this Agreement, Licensee shall smrnnder to Licensor the License Area in good condition ( except for ordinary wear and tear and casualty). License Area shall be surrendered clean, free of debris, waste, Hazardous Substances introduced by Licensee, alterations made by Licensee and free and clear of all liens and encumbrances caused by Licensee. Within 30 days after the expiration or earlier termination of this Agreement, Licensee shall remove all of its Facilities, cables, conduit, coax and fiber and all utilities from the License Area and Parcel. If Licensee fails to surrender the License Area and to complete all removals as required by this section, Licensee shall indemnify Licensor from all actual, out-of-pocket damages resulting from Licensee's failure to so surrender the License Area including Licensor's cost to remove the Facilities, cables, conduits, coax, fibers and utilities from the License Area or the Parcel. Licensee obligations under this section will survive the expiration or other termination of this Agreement.

15. Attorney Fees.

15.1 Litigation Expenses. The prevailing party in any action or proceeding against the other paiiy by reason of a claimed default, or otherwise arising out of a party's performance or alleged 9

non-performance under this Agreement, shall be entitled to recover from the other party its costs and expenses of suit, including, but not limited to, reasonable attorney's fees, which fees shall be payable whether or not such action is prosecuted to judgment. "Prevailing pal'ty" within the meaning of this section shall include, without limitation, a pmiy who substantially obtains or defeats, as the case may be, the relief sought in the action, whether by compromise, settlement, judgment or the abandonment by the other party of its claim or defense. Attorneys' fees under this section shall include attorneys' fees and all other reasonable cost and expense incurred in connection with any appeal.

15.2 City Attol'ney. For purposes of this Agreement, reasonable fees of attorneys of the Office of the City Attorney shall be based on the fees regularly charged by private attorneys with an equivalent number of years of professional experience ( calculated by reference to earliest year of admission to the bar of any state) who practice in law firms located in the County of Santa Clara with approximately the same number of attorneys as employed by the Office City Attorney.

16. Notices. All notices, requests or other communications required or permitted to be given in connection with this Agreement shall be in writing and shall be personally delivered (with prompt confirmation by registered or certified mail, postage prepaid), or by commercial courier service, or by registered or ce11ified mail, postage pre-paid, return receipt requested, addressed to the party whom it is directed at the following addresses, or at such other addresses as may be designated by notice from such party in the manner provided herein:

To Licensee: CCO SoCal I, LLC
c/o Chmier Communications
6399 S. Fiddlers Green Circle, Suite 600
Greenwood Village, Colorado 80111
Attn: UGL Equis/Charter Lease Administration
Charter File No.: CA 0246
With a copy to:

CCO SoCal I, LLC
c/o Chmter Communications
6399 S. Fiddlers Green Circle, Suite 600
Greenwood Village, Colorado 80111
Attn: Kathy Carrington,
VP-Corporate Services
Charter File No.: CA 0246
To Licensor: City of Morgan Hill
17575 Peak Avenue
Morgan Hill, CA 95037
Attn: City Attorney
Telephone: (408) 779-7271
Facsimile: ( 408) 779-1592
10

All notices shall be deemed to have been served when actually received, or upon refusal of delivery; any such notice that remains unclaimed IO days after delivery shall be deemed served when delivered. Either party may change its address by giving notice to the other in accordance with this section.

17. Miscellaneous Provisions.

17.1 Non-Liability. No elected or appointed board member, commissioner, officer, employee or other agent of the City and/or City shall be personally liable to Licensee, its successors and assigns, in the event of any default or breach by Licensor or for any amount which may become due to Licensee or for any obligation of Licensor under this Agreement. Under no circumstances shall the City or their respective agents be liable for any consequential, incidental or punitive damages. Licensor's members, parent or affiliates and their members, affiliates and partners and all of their officers, directors and employees will not be personally liable to Licensor, its successors or assigns in the event of any default or breach by Licensee, or for any amounts which may become due to Licensor or for any obligation of Licensee under this Agreement.

17.2 Entire Agreement. This Agreement contains all the representations and the entire agreement between the parties with respect to the subject matter hereof.

17.3 Amendment. No amendment of this Agreement or any part thereof shall be valid unless it is in writing and signed by all of the parties hereto. The waiver by either party of any right or agreement contained in this Agreement shall not be deemed a waiver of any subsequent breach of the same or any other right or agreement contained in this Agreement.

17.4 Severnbility. If any provision of this Agreement shall be invalid or unenforceable, the remainder of this Agreement shall not be effected thereby, and each of the other provisions of this Agreement shall be valid and shall be enforceable to the fullest extent permitted by law.

17.5 Successors. The terms, covenants, agreements and conditions set forth in this Agreement shall bind and inure to the benefit of Licensor and Licensee and, except as otherwise provided herein, their personal representatives, successors and assigns.

17.6 Counterparts. This Agreement may be executed in any number of counterparts each of which shall be deemed an original and all of which shall constitute one and the same Agreement.

17.7 Authority. Each party covenants and warrants to the other that each person executing this Agreement on its behalf is duly authorized to do so. Without limiting the foregoing, Licensee covenants and warrants that it is qualified to do business in California, and that Licensee has full rights and authority to enter into this Agreement.

17.8 Time of Essence. Time is of the essence with respect to all provision of this Agreement.

17.9 Relationship of the Parties. Licensor is not, and none of the provisions of this Agreement shall be deemed to render Licensor a partner in Licensee's business, or joint venture 11

or member of any joint enterprise with Licensee. This Agreement is not intended nor shall it be constrned to create any third party beneficiary rights in any third party, unless otherwise expressly provided.

17.10 Cumulative Remedy. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity.

17.11 Choice of Law. This Agreement shall be governed by the law of the State of California without reference to its conflict of laws principles. Licensor and Licensee hereby irrevocably consent to jurisdiction of and proper venue in the Superior Court for the County of Santa Clara.

17.12 Entry for Inspection. Licensor and its authorized agents shall have the right to enter the License Area (but not any building or structure located thereon) without notice at any time for the purpose of inspecting the License Area and to determine whether the License Area is in good condition and whether Licensee is complying with its obligations under this Agreement.

17.13 Force Majeure. Notwithstanding anything to the contrary contained in this Agreement, neither party shall have liability to the other, nor will either party have any right to terminate this Agreement because of the other party's failure to perform any of its obligations in this Agreement if the failure is due in part or in full to reasons beyond that party's reasonable control, including, without limitation, strikes or other labor difficulties, war, riot, civil insurrection, accidents, acts of God and governmental preemption in connection with a national emergency.

17.14 Drafting. This Agreement has been prepared by Licensor and its professional advisors and reviewed by Licensee and its professional advisors. Licensor, Licensee and their separate advisors believe this Agreement is the product of all of their efforts, that it expresses their agreement and that it should not be interpreted in favor of either Licensor or Licensee or against either Licensor or Licensee merely because of their efforts in preparing it. 17 .15 Further Assurance. Each party agrees to cooperate with the other and its authorized representatives with regard to any reasonable requests made subsequent to execution of this Agreement to co1Tect any clerical errors contained in this Agreement and to provide any and all additional documentation deemed necessary to effectuate the transaction contemplated by this Agreement. Each party further agrees that the term "cooperate," as used in this Agreement, includes agreeing to execute or re-execute any documents that the parties reasonably deem necessary or desirable to call"y out the intent of this Agreement. Without limiting the foregoing, Licensor acknowledges that Licensee, as a licensee under the rules and regulations of the State of California and the Federal Communications Commission, is subject to certain local, state and federal requirements. Licensor shall, cooperate in good faith with Licensee in its efforts to comply with all such rules and regulations of the State of California and the Federal Communications Commission. Licensor will cooperate by providing any written verifications, reasonable consent or agreement at no additional cost to Licensee; provided however, that Licensee shall reimburse Licensor for any significant out-of-pocket cost incurred in compliance with rules and regulation of the State of California or the Federal Communications Commission. 12

17.16 Exclusive Use; Quiet Enjoyment. Provided Licensee pays the fees and performs all of the other material covenants and conditions of this Agreement to be performed by Licensee hereunder, Licensee shall be entitled to (a) the quiet enjoyment and exclusive use of the Exclusive License Area without hindrance, disturbance, or molestation by Licensor, its agents, or other licensees, and (b) the non-exclusive use of the Non-Exclusive Use License Area for the right to run associated cables, conduit, coax and fiber and to install utilities, to and from a public right of way across the Parcel to the License Area, subject to the City's use of such area so long as the City's use does not umeasonably disrupt the use of or unreasonably block access to such cables, conduit, coax, fiber and utilities for maintenance, repair or replacement.

17.17 Measurable Interference. Licensor acknowledges that Licensee's use of the License Area for the Facilities requires no measurable electronic interference ("Measurable Interference"). Accordingly, from and after the date of this Agreement, Licensor will not construct or install, nor permit the construction or installation of improvements or equipment, on the Parcel that causes a Measurable Interference with the operation of the Facilities, unless such improvement or equipment is needed primarily for the public health, safety and welfare (a "HSW Exception"). Licensor will notify Licensee in writing at least 30 days in advance of the construction or installation of any improvements or equipment on the Parcel located in the vicinity of the License Area required as a HSW Exception, and if Licensee reasonably believes that the same will cause a Measurable Interference with the OTN Facilities, then Licensor shall, in good faith, work with License regarding reasonable alternatives for the same. 17 .18 Estoppel. Licensor hereby represents and warrants that as of the date of execution of this Agreement, (a) Licensee is not in default or breach of this Agreement and (b) no event has occmTed which with the passage of time or the giving of notice would constitute such a breach or default. Licensee hereby represents and warrants that as of the date of execution of this Agreement, (i) Licensor is not in default or breach of this Agreement and (ii) no event has occurred which with the passage of time or the giving of notice would constitute such a breach or default.
13

EXHIBIT A

LICENSE AREA DESCRIPTION AND DEPICTION

EXHIBITB

MUTUAL W AIYER AND RELEASE

9 CITY COUNCIL STAFF REPORT
MEETING DATE: December 7, 2022
PREPARED BY:

Charlie Ha, Supervising Civil Engineer
APPROVED BY: City Manager
APPROVE FINAL MAP FOR ROSEWOOD - TRACT NO. 10599 (JUAN

HERNANDEZ DRIVE AND BARRETT AVENUE) AND RELATED

SUBDIVISION IMPROVEMENTS AGREEMENT

RECOMMENDATION(S)

1. Approve the Final Map;

2. Authorize the City Manager to execute the Subdivision Improvements Agreement with BFH CM LLC; and

3. Authorize the recordation of the Final Map and Subdivision Improvements Agreement.

COUNCIL PRIORITIES, GOALS & STRATEGIES
2022-2023 Strategic Priorities
Economic Development
Guiding Documents
Morgan Hill 2035 General Plan
REPORT NARRATIVE:

Rosewood -Tract No. 10599 is a 35-lot subdivision on a 10.04-acre site that consists of 34 single-family attached duet homes, 86 townhome-style condominiums, and approximately 1.98 acres of open space located on the southeast corner of Juan Hernandez Drive and Barrett Avenue (see attached Site Map – Attachment 1). The proposed residential subdivision is part of the Lillian Commons mixed-used project which also includes a future medical campus.

The developer, BFH CM LLC, has completed all the conditions specified by the Planning Commission in the approval of the project’s Vesting Tentative Map (SD2021- 0005) and Design Review Permit (SR2022-0002) on June 28, 2022. The City Council is required to approve the map if it conforms to all the requirements of the Subdivision Map Act, and any conditions of approval for the Vesting Tentative Map.

The developer has also furnished the City with the necessary documents to complete the processing of the Final Map (Attachment 2) and has made provisions to provide the

9 City with the required fees, security, and insurance prior to recordation of the Final Map.

The Final Map conforms to the requirements of the Subdivision Map Act, and conditions of approval have been met.

As required by the conditions of approval in the project’s Vesting Tentative Map and Design Review Permit, the developer is required to enter into a Subdivision Improvements Agreement (Attachment 3) with the City of Morgan Hill and provide a financial guarantee covering the project’s public improvements.

Staff recommends that City Council approve the Final Map and authorize the City Manager to sign a Subdivision Improvements Agreement pending review and approval by the City Attorney.

COMMUNITY ENGAGEMENT:

Inform
On June 28, 2022, the Planning Commission approved the project's Vesting Tentative Map and Design Review Permit. Residents within a 600-foot radius were informed of the Planning Commission's hearing on the Vesting Tentative Map and Design Review Permit for the project which allowed the public to be involved and voice their concerns over the Vesting Tentative Map and Design Review requirements.

ALTERNATIVE ACTIONS:

There is no feasible alternative action as the developer has met the requirements of the Vesting Tentative Map conditions approved by the Planning Commission to file for a Final Map approval.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

On June 28, 2022, the Planning Commission approved the project's Vesting Tentative Map and Design Review Permit.

FISCAL AND RESOURCE IMPACT:

Development review costs for this project are paid from development processing fees.

CEQA (California Environmental Quality Act):

Project
A Mitigated Negative Declaration and Mitigation Monitoring and Reporting Program was adopted by City Council on November 4, 2020 (Resolution 20-058).

10 CITY COUNCIL STAFF REPORT
MEETING DATE: December 7, 2022
PREPARED BY:

James Sylvain, Deputy Director Utility Services
APPROVED BY: City Manager

APPROVE THE PURCHASE AND INSTALLATION OF THREE

GENERATORS FOR UTILITIES, CATEGORICALLY EXEMPT FROM
CEQA UNDER SECTION 15301

RECOMMENDATION(S)
Approve and authorize the City Manager to execute an agreement with Edward R.

Bacon in the amount of $315,000 for the purchase and installation of three generators.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety
Maintaining and Enhancing Infrastructure
2022-2023 Strategic Priorities
Fiscal Sustainability
Guiding Documents
Water System Master Plan
Wastewater System Master Plan
REPORT NARRATIVE:

The City water and wastewater utilities division has 28 fixed and portable generators that are used to provide back-up power to water pump stations, wells, and sewer lift stations as well as other City facilities in the event of a power outage. These generators have a service life of approximately 15 years and therefore need to be replaced periodically. Generators may also be replaced when they no longer meet state air quality requirements.

In April, staff issued a formal bid for the purchase of three new fixed location generators for C Lift Station, I Lift Station, and Jackson Booster Station. These generators have outlived their asset life cycle and no longer meet state air quality standards. The bid notice was posted to the City website and all documents were posted to Public Purchase and to the Builders Exchange of Santa Clara County. The bid was published in the Morgan Hill Times. Specifications for the generator were designed to comply with Air Resources Board (ARB) "Tier 4 Final" standards. Tier 4 refers to a set of emissions

10 requirements established by the Environmental Protection Agency (EPA) to reduce emissions of particulate matter and air toxics from new, non-road diesel engines. The Tier 4 Final rating ensures the longest possible air quality regulatory compliance window and therefore the longest service life of the generator. We received three bids that were far apart in pricing and found there was a flaw in the specifications for one of the generators. All bids were rejected, the specifications were updated, and the project went out for rebid in July. The rebid was posted and published through all the same websites and publications as the first bid. Only one contractor showed up to the first mandatory pre-bid meeting, so there was a second pre-bid added in the hopes of more participation. Ultimately, the City received one bid for the project. The bid is reasonable and responsive and is within the budget for this project. Therefore, staff recommends awarding the agreement to Edward R. Bacon.

Bid Item
No.

Description of
Bid Item
Estimated
Quantity/Unit of
Measure
Unit
Price
Extended
Total Amount
1 C LIFT STATION
(WASTEWATER)
LS $105,000 $105,000
2 I LIFT STATION
(WASTEWATER)
LS $ 79,000 $ 79,000
3 JACKSON BOOSTER
(WATER)
LS $131,000 $131,000
Bid Schedule I Total $315,000
COMMUNITY ENGAGEMENT:

Inform
This report serves to inform the community of the proposed purchase and installation of three generators for utilities.

ALTERNATIVE ACTIONS:

Staff recommends the Council award the generator replacement contract to Edward R.

Bacon Company. However, the Council could reject the bid. This action will delay improvements to the water and wastewater infrastructure and, as such, may risk the ability to meet demand due to system failure. This action would also leave the City’s backup generators in these locations non-compliant with current state emissions regulations.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The City Council has approved previous purchases of fixed and portable generators when needed in the past. The last generator purchase was for two 150kW portable generators in the amount of $169,552. That purchase was approved by Council on

10 October 23, 2019.

FISCAL AND RESOURCE IMPACT:

Funding for this agreement is in the Council approved Capital Improvement Program Budget. The Jackson Oaks Booster generator is fully funded in Fiscal Year (FY) 2022- 23 project 608020, Water Facility Improvements. C & I Lift stations are in project 308020, Wastewater Facility Improvements. The wastewater generators are funded for $100K per fiscal year but the lead time to receive these generators is very significant due to supply chain issues. There are sufficient funds available for this purchase.

CEQA (California Environmental Quality Act):

Categorical Exemption
This project is Categorically Exempt pursuant to Section 15301 of CEQA Guidelines because the work to be performed is repair, maintenance and/or minor alteration of existing lift and booster station facilities involving no expansion of existing use.

11 CITY COUNCIL STAFF REPORT
MEETING DATE: December 7, 2022
PREPARED BY:

Dat Nguyen, Finance Director
APPROVED BY: City Manager

APPROVE CONSULTANT AGREEMENT WITH HINDERLITER DE

LLAMAS & ASSOCIATES (HDL) FOR SALES AND USE TAX AUDIT

SERVICES AND BUSINESS LICENSE ADMINISTRATION AND

COMPLIANCE SERVICES

RECOMMENDATION(S)

1. Approve an agreement with Hinderliter De Llamas and Associates (HdL), for sales and use tax audit, and business license administration and compliance services; and

2. Authorize the City Manager to execute and administer that certain agreement.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Preserving and Cultivating Public Trust
2022-2023 Strategic Priorities
Fiscal Sustainability
REPORT NARRATIVE:

The City entered into an agreement with HdL in 2018 for sales and use tax audit, and business license administration and compliance services. The current agreement is set to expire soon and requires an amendment to extend the term or begin the process for a new request for proposal (RFP). HdL has offered to extend the contract for an additional five years at the current price for sales and use tax audit services, and a slight increase for business license administration and compliance services, from $13 to $14 per processed account. Staff believe this is a good offer as a new RFP would not likely result in any savings and staff have had positive experience working with HdL in the last four years. HdL has a solid reputation as a leader in auditing and revenue solutions for public agencies. It has over 700 municipal clients across the U.S. In addition, changing the new administrator for business licenses would potentially cause difficulty and require city businesses to once again learn and be familiar with a new system.

11 COMMUNITY ENGAGEMENT:

Inform
This report serves to inform the community of the proposed consultant agreement with HdL for sales and use tax audit, and business license administration and compliance services.

ALTERNATIVE ACTIONS:

City Council could direct staff to begin the process for a new RFP.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

On December 19, 2018, the City Council approved an agreement with HdL for sales and use tax audit, and business license administration and compliance services.

FISCAL AND RESOURCE IMPACT:

The cost of these services will be sufficiently covered by the revenue generated by the activities.

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.

1 CONSULTANT AGREEMENT
Hinderliter De Llamas & Associates (HdL)
THIS AGREEMENT is entered into and becomes effective on _______________ (Effective Date), by and between the CITY OF MORGAN HILL, a municipal corporation, ("CITY" or “Client”), and Hinderliter De Llamas & Associates 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 action of the Morgan Hill City Council taken on ___________, ____, 20___.

2. Term of Agreement. This Agreement shall cover services rendered from the Effective Date of this Agreement until December 31, 2025, 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 two oneyear periods. 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 sales and use tax auditing and business license administration as further described in Exhibit A.

4. Compensation. CONSULTANT shall be compensated as follows:

4.1. Compensation to CONSULTANT under this Agreement during its initial term set forth in Section 2 above shall not exceed seven hundred thirty-seven and no/100 dollars ($737.00) per month adjusted annually by CPI for preceding 12 months, plus sales and user tax auditing services and business license administration and compliance services and shall be billed based on the rate and basis set forth in Exhibit B, subject to budget appropriations. If the City Manager extends the term of this Agreement pursuant to the provisions of Section 2 above, the City Manager shall have the authority to increase the maximum compensation allowed to be paid to 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 DocuSign Envelope ID: 8F4BC5B2-8719-49F1-B78C-302EF5C45824

2 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 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. 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 DocuSign Envelope ID: 8F4BC5B2-8719-49F1-B78C-302EF5C45824

3 ($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.

7.1.3. 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 SelfInsure, duly authorized by the Department of Industrial Relations.

7.1.4. Professional Liability.

7.1.4.1. 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.

7.1.4.2. 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.

7.1.5. Sexual Abuse/Molestation Liability (SML): If the performance of CONSULTANT's work or service 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 CONSULTANT under CONSULTANT's combined insurance policies (including any excess or “umbrella” policies), whichever is greater.

7.1.6. Crime/Fidelity Bond. If the performance of CONSULTANT’S work or service under this Agreement relates to or involves handling of CITY monies, CONSULTANT shall procure and maintain Crime insurance, in the minimum amount of: (i) three hundred thousand dollars ($300,000.00) per occurrence, DocuSign Envelope ID: 8F4BC5B2-8719-49F1-B78C-302EF5C45824

4 covering all CONSULTANT’S officers and employees, for loss of CITY monies caused by dishonesty and/or theft.

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.

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

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

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

01. 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 noncompliance with any insurance requirements in this section 7. Certificates, including renewal certificates, may be mailed electronically to [email protected] or delivered to the Certificate Holder address provided herein.

Certificate Holder address:

City of Morgan Hill
Attn: Risk Management
17575 Peak Avenue
Morgan Hill, CA 95037
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5 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 under this Agreement.

9. 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 DocuSign Envelope ID: 8F4BC5B2-8719-49F1-B78C-302EF5C45824

6 applicable wage and 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.

Confidentiality; Software Use and Warranty; Records.

CONSULTANT will comply with the requirements of the applicable laws, ordinances and/or regulations of which it has been informed by Client concerning the confidentiality of tax records.

As used herein, the term “proprietary information” means all information, techniques, processes, services or material that has or could have commercial value or other utility in CONSULTANT’s Business, including without limitation: CONSULTANT’s (i) software, computer or data processing programs; (ii) data processing applications, routines, subroutines, techniques or systems; (iii) desktop or web-based software; (iv) audit, tax or fee collection/administration or business processes, methods or routines; (v) marketing plans, analyses and strategies; and (vi) materials, techniques and intellectual property used. Except as otherwise required by law, Client must hold in confidence and may not use (except as expressly authorized by this Agreement) or disclose to any other party any proprietary information provided, learned of, or obtained by Client in connection with this Agreement.

If access to any software which CONSULTANT owns is provided to Client as part of this Agreement (including, without limitation, if Client chooses to subscribe to such software and reports option as part of the Services) (such CONSULTANT-owned software is, collectively, the “Software”), CONSULTANT hereby provides a limited, non-exclusive, non-transferable license to Client for the use by such of Client’s staff as may be designated from time to time by Client and approved by CONSULTANT in writing to use the Software pursuant to and during the Term of this Agreement. The Software must only be used by such authorized Client staff, and Client must not sublicense, sublet, duplicate, modify, decompile, reverse engineer, disassemble, or attempt to derive the source code of the Software. The license granted hereunder does not imply ownership by Client or any of Client’s staff of the Software nor any rights of Client or any of Client’s staff to sublicense, transfer or sell the Software, or rights to use the Software for the benefit of others. Client may not create (or allow the creation of) any derivative work or product based on or derived from the Software or documentation, nor modify (or allow the modification of) the Software or documentation without the prior written consent of CONSULTANT. In the event of a breach of this provision (and without limiting CONSULTANT’s remedies), such DocuSign Envelope ID: 8F4BC5B2-8719-49F1-B78C-302EF5C45824

7 modification, derivative work or product based on the Software or documentation is hereby deemed assigned to CONSULTANT. Upon termination of this Agreement or this Software license, this Software license will be deemed to have expired, and Client must immediately deactivate, cease using and remove, delete, and destroy all the Software (including, without limitation, from Client’s computers and network). CONSULTANT warrants that the Software will perform in accordance with the Software’s documentation.

All documents, preliminary drafts, communications and any and all other work product related to the Services and provided by CONSULTANT to Client either in hard copy or electronically are the property of Client. This does not include any software, programs, methodologies, or systems used in the creation of such work product, nor does it include any drafts, notes or internal communications prepared by CONSULTANT in the course of performing the Services that were not otherwise provided to Client in either hardcopy or electronic form, all of which may be protected by CONSULTANT or others’ copyrights or other intellectual property. It is possible that any documents, drafts, communications, or other work product provided to Client may be considered public records under applicable law and/or may be discoverable through litigation. CONSULTANT may publicly state that it performs the Services for Client.

Subject to applicable law, CONSULTANT is responsible for retaining all final documents and other final work product related to the Services for a period of not less than three (3) years from the date provided to Client. Retention of any other documents, preliminary drafts, communications and any and all other work product provided to Client by CONSULTANT is the responsibility of Client. CONSULTANT has no responsibility to retain any drafts, notes, communications, emails, or other writings created or received by Client in the course of performing the Services (other than the final documents and other final work product related to the Services and provided to Client for the term of years referenced above).

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:

Hinderliter De Llamas & Associates (HdL)
120 S. State College Blvd, Suite 200
Brea, CA 92028
Attention: Andrew Nickerson
[email protected]
Address of CITY is as follows:

Dat Nguyen
City of Morgan Hill
17575 Peak Avenue
Morgan Hill, CA 95037
with a copy to:

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

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.

DocuSign Envelope ID: 8F4BC5B2-8719-49F1-B78C-302EF5C45824

8 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 DocuSign Envelope ID: 8F4BC5B2-8719-49F1-B78C-302EF5C45824

9 injury, property damage or personal injury, and including reasonable attorneys' fees and expenses, that arise out of, pertain to, or relate to the performance of this Agreement or the failure to comply with any obligations contained in this Agreement by CONSULTANT, and/or its agents, officers, employees, subcontractors, or independent contractors (“CLAIM”). In no event will CONSULTANT be liable for any lost revenues or lost profits, or any special, incidental, or consequential damages of any nature. CONSULTANT’s duty to indemnify and hold harmless CITY shall not apply to claims for liability which arise from the issuance or non-issuance of any registration, license, or permit.

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.

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10 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.

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.

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

DocuSign Envelope ID: 8F4BC5B2-8719-49F1-B78C-302EF5C45824

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

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

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

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

APPROVED AS TO FORM: Hinderliter De Llamas & Associates (HdL) City Attorney By:

Donald A. Larkin
Print Name
Date:

Print Name and Title of Signer.

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

By:

Date:

Print Name and Title of Signer.

If Corporate: Secretary, Assistant
Secretary, Chief Financial Officer, or
Assistant Treasurer
U:\Legal Forms\CONSULTANT Agreements\City Standard CONSULTANT Agreement.Docx DocuSign Envelope ID: 8F4BC5B2-8719-49F1-B78C-302EF5C45824 11/29/2022 | 6:00:38 PM PST
Andrew Nickerson President/CEO
Richard Park
11/30/2022 | 10:34:57 AM PST
CFO

12 EXHIBIT A

SCOPE OF SERVICES
CONSULTANT will provide the following Services relative to Client’s sales and use tax auditing

1. Sales and Use Tax and Economic Analysis/Forecasting Services/Reports

1.1. Establish a special database identifying the name, address, and quarterly allocations of all sales tax producers within the CITY. This database will be utilized to generate special reports to CITY on major sales tax producers by rank and category, sales tax activity by categories, or business districts, identification of reporting aberrations, and per capita and outlet comparisons with regional and statewide sales.

1.2. Provide periodic updated reports to CITY identifying changes in sales by individual businesses, business groups and categories, and by geographic area. These reports may include, without limitation, quarterly aberrations due to State audits, fund transfers, and receivables, along with late or double payments, and quarterly reconciliation worksheets to assist with budget forecasting. CONSULTANT shall meet quarterly by in person or virtually with City.

1.3. Shall additionally provide following each calendar quarter a summary analysis for CITY to share with Council Members, Chamber of Commerce, other economic development interest groups and the public that analyze CITY’s sales tax trends by major groups and geographic areas without disclosing confidential individual tax records.

1.4. Establish a special database with California Department of Tax and Fee Administration (“CDTFA”) registration data for businesses within applicable district boundaries holding seller’s permit accounts.

1.5. Periodically license for the limited, non-exclusive, non-transferable use by CITY’s staff certain of CONSULTANT’s web-based sales, use and/or transactions tax program(s) containing sellers permit, registration, allocation, and related information for business outlets within CITY’s jurisdiction registered with the CDTFA.

1.6. Provide periodic updated reports endeavoring to identify and assist with budget forecasting (i) changes in allocation totals by individual businesses, business groups and categories, and (ii) aberrations due to State audits, fund transfers, and receivables, along with late or double payments.

2. Allocation and Audit Recovery Services

2.1. Conduct (when mutually agreed with CITY) initial and on-going sales and use tax audits of businesses to help identify and correct distribution and allocation errors, and to proactively affect favorable registration, reporting or formula changes thereby generating previously unrealized sales and use tax income for the CITY and/or recovering misallocated tax from registered taxpayers. Common errors that will be monitored and corrected include but are not limited to transposition errors resulting in misallocations; erroneous consolidation of multiple outlets; formula errors; misreporting of “point of sale” to the wrong location; delays in reporting new outlets; misallocating use tax payments to the allocation pools or wrong jurisdiction; and erroneous fund transfers and adjustments.

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13 2.2. Initiate contacts with the CDTFA and sales management and accounting officials in companies that have businesses where a probability of error exists to endeavor to help verify whether current tax receipts accurately reflect the local sales activity. Such contacts will be conducted in a professional and courteous manner.

2.3. Prepare and submit to the CDTFA information for the purpose of correcting any identified allocation errors, and follow-up with individual businesses and the CDTFA to promote recovery by the CITY of back or prospective quarterly payments that may be owing.

2.4. If, during the course of its audit, CONSULTANT finds businesses located in the CITY’s jurisdiction that are properly reporting sales and use tax but have the potential for modifying their operation to provide an even greater share to CITY, CONSULTANT may so advise CITY and collaborate with those businesses and CITY to encourage such changes.

3. Consulting and Other Optional Services
CONSULTANT may from time to time in its sole discretion, consult with CITY’s staff, including without limitation, regarding (i) technical questions and other issues related to sales and use tax, (ii) utilization of reports to enhance business license collection efforts; (iii) sales tax projections for proposed annexations, economic development projects and budget planning, (iv) negotiating/review of tax sharing agreements, (v) establishing purchasing corporations, (vi) meeting with taxpayers to encourage self-assessment of tax obligations, and (vii) other sales and use tax revenue-related matters.

4. Confidentiality Information
Section 7056 of the State of California Revenue and Taxation Code (“R&T Code”) specifically limits the disclosure of confidential taxpayer information contained in the records of the CDTFA.

Section 7056 specifies the conditions under which a city, county or district may authorize persons other than such city, county or district’s officers and employees to examine state sales and use tax records.

The following conditions specified in Section 7056-(b)(1) of the State of California R&T Code are hereby made part of this Agreement:

4.1. CONSULTANT is authorized by this Agreement to examine sales, use or transactions and use tax records of the CDTFA provided to CITY pursuant to contract under the BradleyBurns Uniform Local Sales and Use Tax Law R&T Code Section 7200 et.seq.

4.2. CONSULTANT is required to disclose information contained in, or derived from, those sales or transactions and use tax records only to an officer or employee of CITY who is authorized by CITY resolution provided to the CDTFA to examine the information.

4.3. CONSULTANT is prohibited from performing consulting services for a retailer (as defined in R&T Code Section 6015), during the term of this agreement.

4.4. CONSULTANT is prohibited from retaining the information contained in or derived from those sales, use or transactions and use tax records after this agreement has expired.

DocuSign Envelope ID: 8F4BC5B2-8719-49F1-B78C-302EF5C45824

14 Information obtained by examination of the CDTFA records shall be used only for purposes related to collection of local sales and use tax or for other governmental functions of the City as set forth by resolution adopted pursuant to Section 7056 (b) of the Revenue and Taxation Code. The resolution shall designate the CONSULTANT as a person authorized to examine sales and use tax records and certify that this agreement meets the requirements set forth above and in Section 7056 (b), (1) of the Revenue and Taxation Code. CONSULTANT will provide the following Services relative to Client’s business license tax administration.

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15 CONSULTANT will provide the following Services relative to Client’s business license tax administration.

1. Operations Management Services

1.1. Establish and maintain database of Client businesses.

1.2. Receive and process applications, renewals, and payments in a timely fashion.

1.3. Send renewal notices to active businesses within 30 days of the renewal period end date or at another interval specified by Client.

1.4. Provide businesses multiple options for submitting applications, renewals, payments, or support requests (including via website, email, mail, phone, and fax. CONSULTANT license specialists will be available for live interactions Monday through Friday, 8:00am to 5:00pm Pacific).

1.5. Remit revenue to Client no less than monthly.

1.6. Provide Client staff access to website portal offering business registry inquiry, reporting, and electronic department approval capabilities.

2. Compliance Services: 1) Identify and register businesses which are subject to licensure or taxation, 2) collect known debt as pertains to business license or tax, and 3) identify underreported tax liability.

2.1. Discovery Services

2.1.1. Develop a list of businesses subject to Client licensure or taxation.

2.1.2. Notify non-compliant businesses of their options tocomply or dispute their non-compliant status. Notification and support to businesses will be facilitated through the website, mail, email, phone, and fax.

2.1.3. Review information and forms submitted by the business for completion and accuracy, inclusive of any additional required documentation (i.e., home occupation permit). All submissions are filed and stored electronically and made available to Client upon request.

2.1.4. Provide businesses with detailed invoicing and options to pay via website, mail, and phone.

2.1.5. Remit revenue to Client no less than monthly, along with all business applications and any additional documentation.

2.2. Collection Services

2.2.1. Identify businesses subject to Client licensure or taxation which have known debt to Client and have failed to pay within an appropriate time frame.

2.2.2. Notify businesses of their options to comply or dispute their non-compliant status.

2.2.3. Provide businesses with detailed invoicing and options to pay via website, mail, and phone.

2.2.4. Remit revenue to Client no less than monthly.

2.3. Audit Services

2.3.1.Identify potential under-reporting and/or misclassified businesses.

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16 2.3.2. Audit businesses mutually agreed to by Client and CONSULTANT that are identified as potential under-reporting businesses.

2.3.3. Submit audit summaries to Client and discuss further actions.

2.3.4. Educate businesses on proper reporting practices.

2.3.5. Invoice and collect identified delinquencies.

3. Online Payment Processing – CONSULTANT’s services include PCI compliant payment processing services powered by FIS Global, which supports both credit card and eCheck transactions.

3.1. Client Responsibilities

3.1.1. As a condition to its receipt of the Service, Client shall execute and deliver any and all applications, agreements, certifications, or other documents required by FIS Global, Networks or other third parties whose consent or approval is necessary for the processing of Transactions by FIS Global. “Network” is an entity or association that operates, under a common service mark, a system which permits participants to authorize, route, and settle Transactions among themselves, including, for example, networks operated by VISA USA and Mastercard, Inc., NYCE Corporation, American Express, and Discover.

3.1.2.Client hereby grants CONSULTANT the full right, power, and authority to request, receive and review any Data or records reflected in a Transaction report. Client represents and warrants that it has the full right and authority to grant these rights.

DocuSign Envelope ID: 8F4BC5B2-8719-49F1-B78C-302EF5C45824

17 EXHIBIT B

SCHEDULE OF COMPENSATION
Fees For Sales and Use Tax and Economic Analysis/Forecasting Services/Report

1. Sales and Use Tax and Economic Analysis/Forecasting Services/Reports

1.1. Fees for performing the sales tax and economic analysis/forecasting Services as described above shall initially be $737 per month, commencing with the month of the Effective Date (hereafter referred to as “monthly fee”). The monthly fee shall be invoiced quarterly in arrears and shall be paid by CITY no later than 30 days after the invoice date.

1.2. CONSULTANT may change the non-hourly Fees established above upon at least 30 days’ prior written notice to CITY (but not more than once a year). Any such change must be with reference to the 12- month percent change in the most recently published annual Consumer Price Index for All Urban Consumers (CPI-U), as reported by the U.S. Bureau of Labor Statistics (the “CPI Change”).

2. Allocation and Audit Recovery Services

2.1. Fees for performing the allocation and audit recovery Services described above shall be 15% of all new, increased and recovered sales and use tax revenue received by the CITY as a result, in whole or in part, of the allocation audit and recovery services (hereafter referred to as “audit fee”). The fee shall be paid notwithstanding any related CITY assistance, work in parallel, and/or incurrence of attorneys’ fees or other costs or expenses in connection, with the relevant Services.

2.2. The Fee described above include, without limitation, State fund transfers received for back quarter reallocations and monies received in the first eight (8) consecutive reporting quarters following completion of CONSULTANT’s allocation audit and confirmation of the corrections by the CDTFA.

2.3. These Fees shall be paid by CITY upon CONSULTANT’s submittal of evidence of CONSULTANT’s relevant Services in support thereof, including, without limitation, copies of relevant communications between CONSULTANT and the CDTFA and/or taxpayers.

2.4. CONSULTANT recognizes CITY’s authority to waive or reduce the tax/fee-related debt of a business. Should CITY decide to do so for a business whose deficiency was identified by CONSULTANT, CONSULTANT shall be entitled to compensation in the amount of one half (1/2) of the Fees CONSULTANT would have otherwise earned. Deficiencies which are uncollectable due to insolvency or dissolution of the business, or for deficiencies which are otherwise incapable of collection (i.e., statute of limitation or other legal defense) shall not be considered a CITY voluntary election to waive, and thus, CONSULTANT would not be entitled to compensation related thereto under this provision.

3. Consulting and Other Optional Services

3.1. Fees for performing the consulting and other optional Services described above shall be based on the following initial hourly rates: (i) Principal - $325; (ii) Programmer - $295; (iii) DocuSign Envelope ID: 8F4BC5B2-8719-49F1-B78C-302EF5C45824

18 Senior Analyst

3.2. - $245; and (iv) Analyst - $195.

3.3. CONSULTANT may change the rates for its hourly Fees from time to time. A 30 days’ prior written notice to City will be given.

4. General Provisions Relating to Fees

4.1. Fees for travel and lodging expenses will be invoiced at cost and applied to all meetings (including implementation, training, operations, and support). Travel expenses only apply to out-of-scope travel and must therefore be pre-approved by CITY.

4.2. Fees will be invoiced monthly to CITY for Services performed during the prior month. To the extent that CONSULTANT has commercially reasonable means to do so, Fees will be netted out of CITY’s monthly revenue disbursement.

DocuSign Envelope ID: 8F4BC5B2-8719-49F1-B78C-302EF5C45824

19 Updated July 2022
Fees For Business License Tax Administration and Compliance Services

1.Operations Management Services

1.1. Fees for performing operations management services shall be $14.00/per processed account + CPI which is any account for which an application or renewal/return was processed, or active account which was sent a renewal notice.

1.2. Fees will be increased as of January 1st of each calendar year with reference to the 12- month percent change in the most recently published annual Consumer Price Index for All Urban Consumers (CPI- U), West Region, as reported by the U.S. Bureau of Labor Statistics (the “CPI Change”). Each annual increase in the Fees will be equal to the greater of two percent (2%) or the actual CPI Change and the lesser of ten percent (10%) or the actual CPI Change. For example, if the actual CPI Change is 1.5%, then the annual increase will be 2%, if the actual CPI Change is 3.5%, then the annual increase will be

3.5%, and if the actual CPI Change is 12%, then the annual increase will be 10%.

1.3. Fees related to travel and lodging expenses are billed at cost and apply to all meetings (including implementation, training, operations, and support). Travel expenses only apply to out-of-scope travel and must therefore be pre-approved by Client.

1.4. Fees will be invoiced monthly to Client for Services performed during the prior month. Fees will be netted out of Client’s monthly revenue disbursement. Client will submit payment for any balance due to CONSULTANT within 30 days of receiving the invoice.

2.Compliance Services

2.1. Fees for performing compliance Services apply to all monies received for the current tax/license period and any other prior period collected (including monies received for taxes, penalties, interest, and fees).

2.1.1.Fees for performing discovery Services shall be a contingency Fee of 30% of the revenues received as a result of the Services.

2.1.2.In the event that Client discovers a non-compliant business and reports the business to CONSULTANT (including a calculation of all taxes/fees due), CONSULTANT will categorize the business as a collection service effort and thus apply the lower collection Services contingency Fee rate.

2.1.3.Fees for performing collection Services shall be a contingency Fee of 25% of the revenues received as a result of the Services.

2.1.4.Fees for performing audit Services shall be a contingency Fee of 30% of the revenues received as a result of the Services.

2.2. CONSULTANT recognizes Client’s authority to waive or reduce the tax/fee debt of a business.

Should Client decide to do so for a business whose deficiency was identified by CONSULTANT, CONSULTANT shall be entitled to compensation in the amount of one half (1/2) of the Fees DocuSign Envelope ID: 8F4BC5B2-8719-49F1-B78C-302EF5C45824

20 Updated July 2022
CONSULTANT would have otherwise earned. Deficiencies which are uncollectable due to insolvency or dissolution of the business, or for deficiencies which are otherwise incapable of collection (i.e., statute of limitation or other legal defense) shall not be considered a Client voluntary election to waive, and thus, CONSULTANT would not be entitled to compensation related thereto under this provision.

2.3. Fees related to travel and lodging expenses are billed at cost and applied to all meetings (including implementation, training, operations, and support). Travel expenses only apply to outof-scope travel and must therefore be pre-approved by Client.

2.4. Fees will be invoiced monthly to Client for Services performed during the prior month. Fees will be netted out of Client’s monthly revenue disbursement. Client will submit payment for any balance due to CONSULTANT within 30 days of receiving the invoice.

3. Payment Processing – CONSULTANT will configure payment processing services to utilize either a taxpayer funded model (convenience fee), or Client funded model, as directed by Client.

Client may switch between these models upon written request to CONSULTANT. Fees for each of these payment processing models are detailed here.

3.1. Taxpayer funded model – Client authorizes CONSULTANT to collect each convenience fee from the taxpayer at time of payment.

3.1.1.Credit and debit card processing – 2.9% of transaction amount, minimum of $2.00

3.1.2. ACH/eCheck processing - $1.25 per transaction

3.2. Client funded

3.2.1. Credit and debit card processing – 2.9% of transaction amount

3.2.2. ACH/eCheck processing - $0.50 per transaction

3.3. Returned payments/NSF fee – Each occurrence of a card chargeback, returned payment or insufficient funds will incur a fee of $25.00, to be applied to the taxpayer’s account.

3.4. CONSULTANT reserves the right to review and adjust pricing related to payment processing services on an annual basis. CONSULTANT will communicate any such adjustment to Client in writing, with 60 days advance notice. Items that will be considered in the review of fees may include, but are not limited to regulatory changes, card association rate adjustments, card association category changes, bank/processor dues and assessments, average consumer payment amounts, card type utilization, and costs of service.

DocuSign Envelope ID: 8F4BC5B2-8719-49F1-B78C-302EF5C45824

21 Updated July 2022

EXHIBIT C

SCHEDULE OF PERFORMANCE
As directed by City Staff.

DocuSign Envelope ID: 8F4BC5B2-8719-49F1-B78C-302EF5C45824

12 CITY COUNCIL STAFF REPORT
MEETING DATE: December 7, 2022
PREPARED BY:

Cynthia Iwanaga, Management Analyst
APPROVED BY: City Manager

APPROVE FIRST AMENDMENT TO THE CAL-WEST LIGHTING AND
SIGNAL MAINTENANCE, INC. MAINTENANCE SERVICE AGREEMENT, EXEMPT FROM CEQA UNDER SECTION 15301

RECOMMENDATION(S)

1. Approve the first amendment to the maintenance service agreement with CalWest Lighting and Signal Maintenance, Inc. for $200,000 for a total contract amount of $587,600; and

2. Authorize the City Manager to execute and administer the first amendment to the maintenance service agreement with Cal-West Lighting and Signal Maintenance, Inc.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety
Maintaining and Enhancing Infrastructure
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 Cal-West Lighting and Signal Maintenance, Inc. If approved the amendment will increase the amount of the agreement by $200,000 to $587,600.

Traffic signal and lighting services' costs have been higher than anticipated due to the large number of pole knockdowns, and the increased need for underground service alert (USA) locates due to the increase in communications encroachment permits. As a result, there is an inadequate remaining balance on the contract through June 2023, for scheduled preventative maintenance and unanticipated repairs. In Fiscal Year 2021- 2022, $100,314 was spent on repairs made to streetlights and other equipment damaged by vehicles, also referred to as "pole knockdowns". These costs will

12 eventually be reimbursed through the responsible parties' insurance to recover and reimburse the Streets Maintenance Program in the General Fund (Fund 010.6100).

Also, several communications companies are currently working on upgrading and installing new communication cables, and conduit throughout the City. As a result, there has been an increase in the number of communications encroachment permits, which requires the City to locate and mark buried existing utility facilities, so that they are not damaged or destroyed during construction. To date, the City has paid Cal-West Lighting and Signal Maintenance approximately $42,608 to locate and mark buried utility facilities for the communications encroachment permits. It is anticipated that increased encroachment permit revenues will more than offset the amounts paid out of the Street Maintenance Program to fund the USA locates costs. By increasing the amount of the agreement by $200,000, preventative maintenance and unanticipated repairs will be funded through June 30, 2023.

The City has released RFPs and contracted for traffic signal, and lighting services for many years, and does not have the staffing resources or the equipment to perform the work internally. Services provided include streetlight, parking lot light, and traffic signal bulb replacements, equipment troubleshooting, emergency response services, and consultation services. The City's current contract expires on June 30, 2023. The original amount of the agreement was $387,600 for two years.

Staff has been satisfied with the services performed by Cal-West Lighting and Signal Maintenance, Inc., and recommends that the City Council authorize the City Manager to execute the attached first amendment to the agreement.

COMMUNITY ENGAGEMENT:

Inform
This staff report serves to inform the community of the proposed amendment to the CalWest Lighting and Signal Maintenance, Inc. maintenance agreement.

ALTERNATIVE ACTIONS:

The City Council could decline to approve the amendment and instead direct staff to terminate the agreement and proceed with a request for proposals (RFP) for traffic signal and lighting services. This alternative is not recommended as it would delay critical repairs necessary for City infrastructure.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The Council has previously approved contracts for traffic signaling and streetlighting services for over a decade. The City Council previously awarded the current agreement to Cal-West Lighting and Signal Maintenance, Inc. on May 5, 2021.

FISCAL AND RESOURCE IMPACT:

If approved, the total funding authorization for this agreement will increase to $587,600.

Funding for the traffic signaling and streetlighting services are accounted for in the

12 Streets Maintenance Program (010.6100) and Downtown Maintenance Program (010.5460) within the General Fund (010) in the FY 2022-2023 budget. An additional budget appropriation of funding is not necessary at this time as the City has seen lower expenses in other areas of the Street Maintenance budget. As previously noted, much of the increased expenses will ultimately be reimbursed to the City.

CEQA (California Environmental Quality Act):

Categorical Exemption
The activities described in this Staff Report are categorically exempt under CEQA, specifically pursuant to Section 15301 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.

1 FIRST AMENDMENT TO AGREEMENT
CAL-WEST LIGHTING AND SIGNAL MAINTENANCE, 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 CAL-WEST LIGHTING AND SIGNAL MAINTENANCE, INC., a California Corporation ("SERVICE PROVIDER"), 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 _________________, 2022.

2. The CITY and SERVICE PROVIDER entered into that “Maintenance Service Agreement” made as of June 3, 2021, for services for a maximum compensation of Three Hundred Eighty-Seven Thousand Six Hundred dollars ($387,600.00) (“MAINTENANCE SERVICE AGREEMENT”). The MAINTENANCE SERVICE AGREEMENT is attached as Exhibit “1” to this Agreement.

AGREEMENT
THE PARTIES MUTUALLY AGREE AS FOLLOWS:

1. Amendments: All terms and conditions of the MAINTENANCE SERVICE 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 4.1 shall be amended and replaced in its entirety by the following:
"4.1. Amount. Total compensation to SERVICE PROVIDER under this Agreement during its initial term set forth in Section 2 above shall not exceed FIVE HUNDRED EIGHTY-SEVEN THOUSAND SIX HUNDRED DOLLARS ($587,600.00) 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 pursuant to the provisions of Section 2 above, the City Manager shall have the authority to increase the maximum compensation allowed to be paid to SERVICE PROVIDER during that extended term period, so long as City Council has appropriated sufficient funds therefor, the Parties mutually agree to such amount in a writing signed by both Parties to this Agreement and provided further that in no event shall such maximum compensation allowed for each subsequent extended one-year term exceed 105% of the maximum compensation allowed to be paid to SERVICE PROVIDER for one year of service during the immediately preceding prior year of service.”

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. ///
Signatures on the Next Page

2 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 MAINTENANCE SERVICE 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: CAL-WEST LIGHTING AND SIGNAL
MAINTENANCE, INC.

Donald Larkin, City Attorney 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
Craig H. Geis, Jr. - President
11-21-22
Sherry A. Geis - Secretary
11-21-22

DocuSign Envelope ID: B4208168-AD4F-4244-BF7A-0E57O6DBB7B1

MAINTENANCE SERVICE AGREEMENT
Cal-West Lighting and Signal Maintenance, Inc.

THIS AGREEMENT is entered into and becomes effective on 6/ 3/
2021 (Effective Date), by
and between the CITY OF MORGAN HILL, a municipal corporation, ("CITY"), and Cal-West Lighting and Signal Maintenance, Inc. a California corporation ("SERVICE PROVIDER") hereinafter referred to collectively as "Parties." In consideration of the promises and the mutual covenants contained in this Agreement, the Parties agree as follows:

1. City Authority. This Agreement is entered into pursuant to the action of the Morgan Hill City Council taken on May , _s_, 20l!_.

2. Term of Agreement. This Agreement shall cover services rendered from the Effective Date of this Agreement until June 30, 2023 at which time SERVICE PROVIDER'S services shall be completed. The City Manager is authorized to extend the term of this Agreement for a maximum of three one-year extensions.

Any such extension shall be in writing and signed by both Parties to this Agreement.

3. Scope of Service. The services to be performed by SERVICE PROVIDER shall be street lighting and signal maintenance as further described Jn Exhibit A.

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

4.1. Amount. $387,600.00. Total compensation to SERVICE PROVIDER under this Agreement during its initial term set forth in Section 2 above shall not exceed Three Hundred Eighty Seven Thousand and Six Hundred dollars and shall be billed based on the rate and basis set forth in Exhibit B. If the City Manager extends the term of this Agreement pursuant to the provisions of Section 2 above, the City Manager shall have the authority to increase the maximum compensation allowed to be paid to SERVICE PROVIDER during that extended term period, so long as City Council has appropriated sufficient funds therefor, the Parties mutually agree to such amount in a writing signed by both Parties to this Agreement and provided further that in no event shall such maximum compensation allowed for each subsequent extended one-year term exceed 105% of the maximum compensation allowed to be paid to SERVICE PROVIDER for one year of service during the immediately preceding prior year of service.

4.2. Billing. SERVICE PROVIDER shall provide CITY with an invoice containing the dated, detailed, and itemized descriptions of all services performed and expenses incurred (if such expenses are reimbursable pursuant to Exhibit B) by SERVICE PROVIDER on a monthly basis unless otherwise specified in Exhibit B. All invoices shall be sent to the CITY addressed to the department head or project manager identified below in Section 14 Notices. Payment will be made to SERVICE PROVIDER within thirty (30) days of receipt of invoice by CITY. Any rate charged shall be prorated where services are interrupted or not provided for any rate period (for example, any monthly rate charge should be prorated when services were interrupted or provfded 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 lncurred in excess of the total compensation set forth in paragraph 4.1 above shall be at no cost to CITY.

5. Termination. CITY or SERVICE PROVIDER shall have the right to terminate this Agreement, without cause, by giving thirty (30) days' written notice or less under urgent circumstances. Upon such termination, 1 Updated: January 2021
EXHIBIT 1
126-04-21-022

DocuSign Envelope 10: B4208168-AD4F-4244-BF7A-0E57O6O887B1 SERVICE PROVIDER shall submit to CITY an itemized statement of services performed for which compensation has not been paid. CITY may require SERVICE PROVIDER to complete certain work product or documents and SERVICE PROVIDER shall deliver to CITY all documents in its possession without additional compensation to SERVICE PROVIDER. The City Manager is authorized to terminate this Agreement, in whole or in part, on behalf of CITY.

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

5.2. Temporary Suspension of Services. CITY'S need for services may be suspended due to unforeseeable or unavoidable circumstances beyond its control. Such circumstances include, but are not limited to, earthquake, fire, explosion, flood or other natural catastrophe; governmental legislation, condemnation, acts, orders, or regulation; war or acts of terrorism; strikes or labor difficulties; and quarantine, epidemic, or pandemic. CITY shall provide a 5- days' written notice or less under urgent circumstances to temporarily suspend services at specific CITY facilities. CITY reserves the right to request which CITY facilities are to be serviced or not serviced due to unforeseeable or unavoidable circumstances; and the level of service at each CITY facility. Upon suspension, SERVICE PROVIDER shall submit to CITY an itemized statement of services performed for which compensation has not been paid up to the date of the suspension. No further payments will be made for services provided after the date of the suspension. CITY shall provide 5 days' written notice when the circumstances for the suspension of specific facilities' services are removed for SERVICE PROVIDER to commence providing services.

6. Perfonnance of Work. SERVICE PROVIDER represents that it is qualified by virtue of experience, training, education, and expertise to accomplish these services. Services shall be performed by SERVICE PROVIDER in accordance with professional practices in a manner consistent with a level of care, competence and skill exercised by qualified members of SERVICE PROVIDER'S profession. By delivery of completed work, SERVICE PROVIDER certifies that the work conforms to the requirements of this Agreement and all applicable federal, state and local laws. SERVICE PROVIDER 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. The City Manager is authorized on behalf of CITY to modify the timeframes set forth on the Schedule of Performance within the term of this Agreement. If SERVICE PROVIDER desires to leave or store any of SERVICE PROVIDE R's equipment at a CITY site while SERVICE PROVIDER is performing work or service pursuant to this Agreement, SERVICE PROVIDER will first obtain the consent of the City Manager, or his/her delegate, to do so, and any such storage shall occur only in the manner and location allowed by such CITY official and entirely at SERVICE PROVIDER's sole risk.

7. Hazardous Materials. Without limiting any other requirement or obligation of SERVICE PROVIDER under this Agreement, if SERVICE PROVIDER needs to use any material or chemical considered to be a hazardous material under any federal, state or local law, regulation or policy, SERVICE PROVIDER agrees to fully and timely abide by and comply with all laws, regulations and policies pertaining to the use, transport, removal, handling, disposal or other activity related to any and all such materials or chemicals. Prior to commencement of work or services under this Agreement, SERVICE PROVIDER shall provide CITY with a complete list of the hazardous materials SERVICE PROVIDER reasonably anticipates it may need to use to 2 Updated: January 2021

OocuSign Envelope ID: B4208168-AO4F-4244-8F7A-0E57O6DBB7B'f provide the services of SERVICE PROVIDER under this Agreement, together with the reasonably anticipated quantities thereof, if requested by CITY.

8. Insurance Requirements. SERVICE PROVIDER shall procure and provide proof of the insurance coverage required by this section in the form of certificates and endorsements. The required insurance must cover the activities of SERVICE PROVIDER, including its subcontractors, employees and agents, relating to or arising from the performance of any work or service under this Agreement, and must remain in full force and effect at all times during the period covered by this Agreement. The coverages may be arranged under a single policy for the full limits required or by a combination of underlying policies with the balance provided by excess or "umbrella" policies, provided each such policy complies with the requirements set forth herein.

Any deductibles or self-insured retentions must be declared to and approved by City. SERVICE PROVIDER further understands that CITY reserves the right to modify the insurance requirements set forth herein, with thirty (30) days' notice provided to SERVICE PROVIDER, at any time as deemed necessary to protect the interests of CITY.

8.1. Insurance Types and Amounts.

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

8.1.2. Automobile Liability. SERVICE PROVIDER shall maintain Automobile Liability covering all owned, non-owned and hired automobiles (if SERVICE PROVIDER does not own automobiles, then SERVICE PROVIDER shall maintain Hired/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 of such insurance available to SERVICE PROVIDER under SERVICE PROVIDER's combined insurance policies (including any excess or "umbrella" policies), whichever is greater.

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

8.1.4. Pollution (Environmental) Liability. If the performance of SERVICE PROVIDER's work or service under this Agreement involves hazardous materials, contaminated soil disposal, and/or a risk of accidental release of fuel oil, chemicals or other toxic gases or hazardous materials, SERVICE PROVIDER shall procure and maintain Pollution Liability covering the SERVICE PROVIDER'S liability for bodily injury, property damage and environmental damage resulting from pollution and related cleanup costs arising out of the work or services to be performed under this Agreement. Coverage shall be provided for both work performed on site, as well as during the transport of hazardous 3 Updated; January 2021

DocuSign Envelope ID: B4208168-AD4f-4244-BF7A-OE57D6D887B1 materials. Such coverage shall be in the minimum amount of: (i) one million dollars ($1,000,000.00} for any one accident or occurrence, or (ii} the maximum amount of such insurance available to SERVICE PROVIDER under SERVICE PROVIDER's combined insurance policies (including any excess or "umbrella" policies}, whichever is greater.

8.1.5. Professional Liability.

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

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

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

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

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

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

8.2.1.2. The insurer waives the right of subrogation against the City of Morgan Hill and CITY's elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers; and,

8.2.1.3. Insurance shall be primary non-contributing.
4 Updated: January 2021

DocuSigri Envelope ID: B4208168-AD4F-4244-BF7A-0E57D6DBB7B1

8.2.2. Workers Compensation.

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

8.3. Qualification of Insurers. All insurance required pursuant to this Agreement must be issued by a company licensed and admitted, or otherwise legally authorized to carry out insurance business in the State of California, and each insurer must have a current A.M. Best's financial strength rating of "A" or better and a financial size rating of "VII" or better.

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

Certificate Holder address:

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

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

10. Compliance with Law.

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

10.2. Without limiting the provlsions of Section 10.1 above, each worker performing work under this Agreement shall be paid at a rate not less than the prevailing wage as defined in Sections 1771 and 1774 of the Labor Code. The prevailing wage rates are available online at http://www.dir.ca.gov/dlsr. SERVICE PROVIDER shall post a copy of the applicable prevailing rates at the Worksite. Pursuant to Labor Code Section 1775, SERVICE PROVIDER and any Subcontractor shall forfeit to CITY as a penalty up to two hundred dollars ($200.00) for each calendar day, or portion thereof, for each worker paid less than the applicable prevailing wage 5 Updated: January 2021

DocuSign Envelope ID: B4208168-AD4F-4244-BF7A-0E57O6DBB7B1 rate. SERVICE PROVIDER shall also pay each worker the difference between the applicable prevailing wage rate and the amount actually paid to that worker.

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

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

Final Judgments, Decisions, and Orders: For purposes of this Section, a "final judgment, decision, or order'' refers to one for which all appeals have been exhausted or the time to appeal has expired. Relevant investigatory government agencies include: the federal Department of Labor, the California Division of Labor Standards Enforcement, or any other governmental entity or division tasked with the investigation and enforcement of wage and hour laws.

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

AGREEMENT, SERVICE PROVIDER AFFIRMS THAT IT HAS DISCLOSED ANY FINAL

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

AGREEMENT - THAT SERVICE PROVIDER OR ITS SUBCONTRACTOR(S) HAS VIOLATED ANY APPLICABLE WAGE AND HOUR LAWS. SERVICE PROVIDER FURTHER

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

Judgments or Decisions During Term of Contract: If at any time during the term of this Agreement, a court or investigatory government agency issues a final judgment, decision or order finding that SERVICE PROVIDER or any subcontractor it employs to perform work under this Agreement has violated any applicable wage and hour law, or SERVICE PROVIDER learns of such a judgment, decision, or order that was not previously disclosed, SERVICE PROVIDER shall inform the City Attorney, no more than fifteen (15) days after the judgment, decision or order becomes final or of learning of the final, judgment, decision or order.

SERVICE PROVIDER and its subcontractors shall promptly satisfy and comply with any such judgment, decision, or order, and shall provide the City Attorney with documentary evidence of compliance with the final judgment, decision or order within five (5) days of satisfying the final judgment. decision or order. CITY reserves the right to require SERVICE PROVIDER to enter into an agreement with CITY regarding the manner in which any such final judgment, decision, or order will be satisfied.

City's Right to Withhold Payment: Where SERVICE PROVIDER or any subcontractor it employs to perform work under this Agreement has been found in violation of any applicable wage and hour law by a final judgment, decision or order of a court or government agency, CITY reserves the right to withhold payment to SERVICE PROVIDER until such judgment, decision or order has been satisfied in full.
6 Updated: January 2021

DocuSign Envelope ID: B4208'168-AD4F-4244-8F7A-0E57D6D887B1 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 Jaw.

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

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

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

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

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

Address of SERVICE PROVIDER is as follows:

Cal-West Lighting and Signal Maintenance, Inc.

P.O. Box 612035
San Jose, CA 95161�2035
Address of CITY is as follows:

Dale Dapp, Maint. Mgnr.

City of Morgan Hill
17575 Peak Avenue
Morgan Hill, CA 95037
with a copy to:

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

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

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

Ill
Ill
7 Updated: Januaf)' 2021

DocuSign Envelope ID: B4208168-AD4F-4244-BF7 A-0E57O6DBB7B 1

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

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

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

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

18. Familiarity with Work. By executing this Agreement, SERVICE PROVIDER represents that: (1) it has investigated the work to be performed; (2) it has investigated the site of the work and is aware of all conditions there; and (3) it understands the difficulties and restrictions of the work under this Agreement.

Should SERVICE PROVIDER discover any conditions materially differing from those inherent in the work or as represented by CITY, it shall immediately inform CITY and shall not proceed, except at SERVICE PROVIDER'S risk, until written instructions are received from CITY.

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

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

21. Attorney Fees. In any legal action, dispute or arbitration arising out of or relating to this Agreement. the prevailing party shall be entitled to an award of its reasonable attorney fees, costs and expenses incurred. 22, Defense and Indemnification.

22.1. Defense and Indemnification. SERVICE PROVIDER shall, to the fullest extent permitted by law, indemnify, defend and hold harmless CITY, its elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers ("INDEMNITEES") from and against any and all claims, liabilities, expenses, liens, or damages of any nature, including liability for bodil'y 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 8 Updated: January 2021

DocuSign Envelope ID: 84208168-AD4F-4244-BF7A-0E57D6DBB781 contained in this Agreement by SERVICE PROVIDER, and/or its agents, officers, employees, subcontractors, or independent contractors ("CLAIM").

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

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

22.4. Right to Offset. CITY shall have the right to offset against any compensation due SERVICE PROVIDER under this Agreement any amount due CITY from SERVICE PROVIDER as a result of SERVICE PROVIDER's failure to pay CITY promptly any indemnification arising under this Section (22) and any amount due CITY from SERVICE PROVIDER ar1sing from SERVICE PROVIDER's failure either to (i) pay taxes on amounts received pursuant to this Agreement or (ii) comply with applicable workers' compensation laws.

22.5. Interpretation. This Section shall constitute an agreement or contract of indemnity, incorporating the interpretations under California Civil Code Section 2778. It is expressly understood and agreed that the obligation of SERVICE PROVIDER to indemnify the INDEMNITEE shall be as broad and inclusive as permitted by the laws of the State of California and shall survive termination of this Agreement.

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

24. Governing Law and Venue. This Agreement shall be construed in accordance with the laws of the State of California. This Agreement was entered into and is to be performed in the County of Santa Clara.

Any action or dispute arising out of this Agreement shall only be brought in Santa Clara County.

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

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

27. Binding Agreement. Notwithstanding the provisions of Section 20 above, this Agreement shall bind any and all successors in interest, legal representatives and/or other permitted assignees or transferees of SERVICE PROVIDER in the same manner as if those successors in interest, legal representatives or other permitted assignees or transferees had entered into this Agreement orig1nally. 9 Updated: January 2021

DocuSign Envelope ID: B4208168-AD4F-4244-BF7A-0E5706DBB7B1

8. 2 Authority to Execute Those individuals who are signing this Agreement on behalf of entities represent and warrant that tl1ey 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·
Doi:.uSioncd by:

J.A,�\..J\.. �uty �6t.low -- - -- - - -- -
City Clerk
_Michelle Bigelow ____________ _
Print Name
Date: 6/3/2021 - - --- ------

APPROVED AS TO FORM
Donald A. Larkin
Prlnt Name
Date: 5/24/2021
847901
Contractor's License Number(s) (if applicable)
Expiration Date(s)
Seal.
10/31/2022 ----

CITY OF MORGAN HILL
-��J Turner
Print Name
-- ------- ---
Date: ----------- 6/3/2021 - ---

CAL-WEST LIGHTING & SIGNAL
MAINTENAN9
E. INC. ,t j L_-j-f'_vC,aig H Geis,Lresident By:

Print Name and Title of Signer
If hairman, President or
Date: -#,:-�)'-- 1 ___ � __ _
By:

Frank A. Garcia - Treasurer
Print Name and Title of Signer.

If Corporate: Secretary, Assistant
Secretary, Chief Financial Officer or
Assistant Treasurer
Date: _April _20....;..__20__2 1 _______ _
1000023113
Contractor's DIR Registration Nurnber(s} (tf
applicable)
Expiration Date(s) 06/30/2022 -----
10 Upci:,1e,1 .January 202,

OocuSign Ehvelor:ie ID; 84208168-AD4F-4244-BF7 A-0E57D6D8B7B1 l.J:llegal Forms\ConstJllanl Agreeme�ISICl\y Maintenance Service Agreement:Docx

LEFT BLANK INTENTIONALLY
11 Updated: January 2021

DocuSign Envelope ID: B4208168-AD4F-4244-BF7A-0E57O6DBB7B1

EXHIBIT A

SCOPE OF SERVICES
Street Lighting and Traffic Signal Scope of Work
Provide maintenance services for the City's traffic signals and lighting, streetlights, flashing beacons, lighted crosswalks, and other City equipment. The scope of work will include maintenance, emergency repair, non-emergency routine inspections and new equipment upgrade and installation work. The City operates and maintains 43 traffic signaled intersections with a variety of signal controllers, flashing beacons and lighted crosswalks.

Maintain EMTRAC Signal-Priority System on an annual basis.

Total amount of work available will be a function of routine traffic signal maintenance plus the amount of work that is required due to normal "wear and tear," collision damage, vandalism, and other factors that may result in the need for emergency response maintenance services. The City expects traffic signal technicians to be regularly assigned to the City as necessary to provide preventative maintenance and to respond to unscheduled/emergency work.

Scope of Work:
1-1 SCOPE OF SERVICE:

The Contractor will furnish all tools, equipment, apparatus, facilities, labor, service, and materials to perform all work necessary to maintain traffic signal facilities and streetlights in good and workmanlike manner. All labor, services, materials, and equipment shall be furnished and said work performed and completed by the Contractor as an independent contractor, subject to the inspection and approval of the Community Services Director of the City of Morgan Hill, or his representative.

Preventative Maintenance:

The Contractor shall provide a routine, comprehensive preventative maintenance program designed to minimize the incidence of outages and malfunction; reduce complaints; and extension the useful life of the traffic signal equipment. The Contractor will be required to furnish and use a preventative maintenance checklist form approved by the City. The Contractor shall provide one electronic copy of the maintenance checklist to the City following each inspection, to maintain a copy of the checklist in the traffic signal controller cabinet, and to maintain a copy of the maintenance checklist at the Contractor's office. The program shall include monthly inspections of each signalized intersection.

Each controller unit shall be inspected, cleaned, and adjusted during a routine inspection one time per month. This includes all accessory items such as the Emtrac system and signal interconnect systems. Each controller conflict monitor shall be tested once yearly during the month of July.

All traffic signal detection loops shall be maintained and repaired as needed.

All incandescent lamps in all signals shall be replaced based on an eighty percent (80%) depletion period. Contractor shall use only standard traffic signal lamps as manufactured by General Electric Company or Sylvania Company.
12 Updated: January 2021

DocuSign Envelope ID: B4208168-AD4F-4244-BF7A-0E57D6D8B7B1 All light emitting diode (LED) modules in all signals shall be replaced when more than two percent (2%) of the LEDs have failed. Contractor shall only use standard LED traffic signal modules approved by the California Department of Transportation (Caltrans).

The Contractor shall replace or repair any and all defective parts of the controller mechanism as needed. All lenses and reflectors shall be cleaned and polished once a year. At this time, all broken parts shall be replaced.

Contractor shall maintain the appearance of all traffic signals monthly including graffiti removal, and removal of stickers, etc.

All fixed time, semi-actuated and fully actuated signal which are installed from time to time shall be added to those already maintained by the Contractor as City notifies the Contractor of the installation thereof. These signals shall be maintained at the same rate and in the same manner as those covered by the maintenance agreement. In the event notification is made at other than the beginning of the monthly contract period, payment for that month shall be prorated from the day the Contractor is notified. The Contractor is to be at all new installation turn-on to provide technical assistance and guidance.

Contractor is to maintain by quarterly testing all Emtrac systems throughout the city at locations.

School/PED flashing beacons are to be adjusted regarding Daylight Savings Time and Pacific Standard Time as needed twice a year.

Scheduled Repair:

The Contractor shall investigate and determine the corrective requirements for each reported malfunction, failure, or outage of the traffic signal system. The Contractor shall repair or replace equipment and components that have failed, deteriorated, or malfunctioned from the normal operation of the traffic signal system. Replacement of controllers and battery backup systems will require approval of City staff prior to replacement.

Based on a Street Light Repair list sent weekly, repairs would be made within fourteen (14) calendar days. The price is for the electrician, bucket truck, and lamp. Additional items are extra cost.

Lights needing a quicker response will be billed based on labor and material.

No permanent change shall be done without prior approval of the City. Whenever equipment is removed, the City representative shall be notified by phone and e-mail within twenty-four (24) hours, except weekends and holidays (where the firm shall wait until the next calendar day to notify the City Representative).

The Contractor may be requested to input timing changes provided by the City.

Emergency Response Work:

The Contractor may be called upon from time to time by the City to repair, replace, or refurbish equipment which has been damaged by vehicle accidents, acts of God, malicious damage, natural causes, or need to install new appurtenances. In this case Contractor shall make emergency service calls when neccessary to make temporary or permanent repairs or installation to signal equipment and appurtenances such as: safety lighting, traffic signs, pedestrian signals, flashing beacons, streetlights, detector devices external to the cabinet or failure of the controller.

The City's streetlights are maintained by the City. The Contractor shall, upon request, make emergency calls to remove streetlights that have been knocked down, and deliver same to the City 13 Updated: January 2021

DocuSign Envelope ID: 84208i68-AD4F-4244-BF7A-0E57D6D88781 corporation yard. The Contractor may be requested to replace and install a new streetright and possibly, depending upon extent of damage, repair or replace the street light pole pedestal.

Contractor shall maintain a 24 hour per day emergency service for the replacement of burned-out lamps or controller malfunctions. A maximum response time of two (2) hours will be required of the Contractor. When traveling to and from the locations of the equipment to be serviced, Contractor's representative shall observe traffic signals at other designated intersections for possible malfunctions.
1-2. TERM OF SERVICE The term of the contract will be from July 1, 2021 through June 30, 2023.

The contract may be canceled or any portion thereof at any time during the term of service and such cancellations shall be effective upon giving sixty (60) days written notice. The City, at its option, may renew this contract for up to one additional year beginning on July 1, 2023. This option will be exercised only if the contractor has demonstrated superior performance in provision of traffic signal and street light maintenance services to the City.

Pricing entries in Bid Schedule of Proposal Package applies to the period of July 1, 2021 to June 30, 2023. For services beginning on July 1, 2023, the Contractor may request a percentage adjustment to the pricing for all services equal to the Consumer Price Index (CPI) for the San Francisco Bay Area Counties. This request must be in writing ninety (90) days prior to the end of July 1, 2023. 1-3 WORK HOURS
The work hours for any, and all traffic signal and street light preventative maintenance and repairs will be scheduled with City Maintenance Staff during regular business hours (7:00 a.m. to 5:00 p.m.

Monday through Friday). As authorized by the City, the Contractor may perform Unscheduled and Emergency Response Work on the traffic signal system not covered by preventative maintenance and scheduled repairs.

Deviation from the above will not be permitted except by written permission of the City Maintenance Coordinator or designated representative from the facility.

From time to time, the City may take on improvement projects or other construction. The Contractor shall cooperate with the City or its agents while said work is underway. 1-4 WORKMANSHIP AND QUALITY LEVEL
All work shall be performed by staff directly employed and supervised by the Contractor. The Contractor shall provide management and technical supervision through competent supervisors as required to provide the specified traffic signal and street light maintenance. The Contractor shall be responsible for the skills, methods and actions of all employees, subcontractors and for all work done.

The Contractor shall cooperate with the representative authorized by the City to enable them to determine the Contractor's conformity with these specifications and the adequacy of the work being performed. The Contractor shall give personal supervision to the work and will meet with the Maintenance Manager or designated City representative, a minimum of once per month, at a schedule mutually agreed upon.
1-5. LOCATIONS
A list of signalized intersections is included at the end of the Technical Specifications. 14 Updated� January 2021

DocuSign Envelope ID: B'\208168-AD4F-4244-BF7A-OE57060B87B1 1-6. MONTHLY ACTIVITY REPORT
The Contractor shall provide a computerized monthly activity report to the City by the fifteenth (15) working day of each month for the previous month. A monthly report shaH be sent via e-mail to the City with the monthly invoice. No payment will be made without submittal of the report: The report shall include:
i. Unscheduled and Emergency Response Work: Time the service calls were received, names of City staff who made the service call, time arrived at intersection, response time, nature of problem, the number of hours spent for each repair, materials used, whether the activity related to accident or vandalism, and a special listing of intersections with three or more calls in one month. ii, Scheduled Repairs: A complete record of all work that was performed on the traffic signal equipment during the previous month including the date and time, make model, and serial number of any major components or other equipment that was newly installed at each intersection. iii. Preventative Maintenance: Time and date the preventative maintenance work was performed. iv. Pending Repair List: Provide a monthly report of all pending repair work needed at each intersection. The intersection name should be listed along with a description of the repair required, problem that created the repair and level of severity (high priority repair, medium priority repair, low priority repair).
1-8. SIGNAL SHUT DOWN AND SIGNAL ON FLASH
The Contractor shall immediately notify the City's Community Services Department and Police Department of any signal turn-offs or signal-on-flash necessitated by their operation. Signal shut down of any duration and sign-on-flash operation in excess of fifteen (15) minutes must be first authorized by the Community Services Dept-Maintenance Division. 1-9. SPARE EQUIPMENT
The Contractor shall maintain adequate storage and shop facilities and sufficient stock of spare parts and signal equipment to effectively maintain the traffic signals. The Contractor shall maintain at least one fully tested standby controller that is compatible with the City's system. The Contractor will own and maintain all spare parts until installation in the City. 1-10. SALVAGED EQUIPMENT
The Contractor shall store any designated equipment, as designated by the City, at the Contractor's storage yard at no additional cost to the City. Components such as mast arms and luminaires that are undamaged may be re-used at the direction of the City. Any material or equipment declared as non-salvageable by the Community Services Department shall be taken from the City and disposed of properly by the Contractor at Contractor's cost.
1-11. SAFETY
The Contractor and staff shall follow all established safety procedures and shall take special care not to endanger the public in any way.
1-12. EMERGENCY SITUATIONS
For medical or public safety emergencies call 9-1-1. For all emergencies contact the Maintenance Manager or designated staff to report the issue immediately (24-hours/day). 15 Updated: January 2021

OocuSign Envelope ID: B4208168-AO4F-4244-BF7A-0E5706DBB781 ATTACHMENT A: Cune,it as of 4/4/2J

BID SCHEDULE-TRAFFIC SIGNAL ANO STREET LIGHT MAINTENANCE Items in Red are items that have been added lo this schedule.

CITY OF MORGAN HILL SIGNALIZED INTERSECTIONS TO BE SERVICED BY THIS CONTRACT 1 Monterey/Tilton
2 Monterey/Burnett
3 Monterey/Peebles
4 Monterey/Madrone Parkway
5 Monterey/Cochrane
6 Cochrane/Cochrane Circle
7 Cochrane/Sutterfield
8 Cochrane/Woodview (to be activated)
9 Cochrane/Sutter Boulevard
10 Cochrane/Cochrane Plaza/Madrone
11 Cochrane/DePaul
12 Cochrane/Mission View
13 Monterey/Old Monterey
14 Monterey/Wright
15 Monterey/Main
16 Main/Butterfield
17 Main/Calle Mazatan
18 Monterey / 2nd
19 Monterey/4th
20 Monterey/Dunne
21 Dunne/Church
22 Dunne/Butterfield
23 Dunne/Walnut Grove
24 Dunne/Condit
25 Dunne/Murphy
26 Dunne/Peppertree
27 Dunne/Hill
28 Monterey/Spring
29 Monterey/Cosmo
30 Monterey/Tennant-Edmundson
31 Tennant/Church
32 TennanWineyard
33 Tennant/Butterfield
34 Tennant/Juan Hernandez
35 MontereyNineyard
36 Monterey/Watsonville-Butterfield
37 Monterey/John Wilson Way
38 Butterffeld/Sutter
39 Butterfield/Digital
40 Butterfield/Central Ave
41 Butterfield/Diana
42 Butterfield/San Pedro
43 Butterfield/Barrett
RAPID FLASHING BEACONS:
1 East Main/Grand Prix
2 Monterey / Central
3 Main/Del Monte
4 W Dunne/Del Monte
5 W Edmundson/Trail Crossing
6 W Edmundson/Community Park Drive
7 Burnett Ave. at Sobrato High School
FLASHING BEACONS:
1 Tilton / Dougherty
2 17660 Monterey
3 17775 Monterey
4 Nordstrom on Dunne
5 Dunne I Saddleback
6 Edes Ct/Trail Crossing
7 Cosmo/Trail Crossing
ADVANCE SIGNAL FLASHING BEACONS:
1 Monterey / Tilton
2 Monterey / Old Monterey
3 Monterey/John Wilson Way
LIGHTED CROSS WALKS:
1 Monterey/Third Street
2 Monterey/First Street
3 Monterey/Fifth Street

DocuSign Envelope ID: 84208168-AD4F-4244-BF7A-0E57D6D88781 ATTACHMENT 8-FOAWARD LOOP
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DoouSign Envelope ID: 84208168-AD4F-4244-BF7A-0E57D6O88781

EXHIBIT B

SCHEDULE OF COMPENSATION RA TES
Please see attached Bid Schedule
16 Updated: January 2021

DocuSign Envelope ID: B4208168-AD4F-4244-BF7A-OE57D6DBB7B1 1 2

3. 4
1 2.

3. 4

5. Attachment 1 : Bid Schedule
City of Morgan Hill Traffic Signal and Street Lighting Maintenance Annual Routine Maintenance
1 •ask ��te Si::he<$ule A,
Monthly Maintenance Fee Per Intersection·
s 70.00 /month x 12 months = x 43 intersections =
Emtrac System Maintenance Annually•
s 0.00 /annual x 1 per annum=
Rapid Flashlng,Flashing Beacons, and Advance Signal Flashing Beacons•

32.00 t month x 12 months= x 1 rapid and 7 flil1it.r!g l:i!:!fllCOn, and l ilOVRlfi,I', ,.,, .. 1 Lighted Crosswalk

32.00 /month x 12 months=x 3 lighted crosswalks =
TOTAL (annual)
Based on attached Revised Intersection List (Attachment A) Time and Materials - Service Repairs
(Task Rate Schedule BJ

LABOR AND EQUIPMENT RATES FOR MAINTENANCE

STRAIGHT

LABOR SCHEDULE TIME OVERTIME
Signal Maintenance Supervisor s 125.00 s 195.00
Signal Maintenance Technician s 125.00 s 195.00
Traffic Signal Staff s 75.00 s 105.00
laborer s 75.00 s 105.00

HOURLY DAY

EQUIPMENT RATE RATE
Utility Vetiicle s 0.00 s 0.00
Service Vehicle s 25.00 s 100.00
Boom Truck s 30.00 s 120.00
Hydraulic Lift s 30.00 s 120.00
Air Compressor 0.00 0.00
A Total for 2 Hour Emergency Service Call for Pole Knockdown 8 Timing Input Call

LOOP REPAIR
As It is deemed necessary to replace damaged detection loops, cor,tractor (Includes all labor, material. and equipment)
Cost for 1 each forward loop (Attachment B)
All others (1 each) (CalTrans Standard Plan ES-5B I Attachment C)

NEW SIGNAL TURN-ON
1 each occurance

STREET LIGHT MAINTENANCE
1 each occurance
MARK-UP ON PARTS AND MATERIALS 1% PERCENTAGE MARK-UP)
Name of company. Cal-West Lighting & Signal Malntenance, Inc. s
s
$
s
s
s
s
s
I Apdl 5, 2021
Signature Date
Annual Amount
36 120.00
included
6528.00
1152.00
S43,800.00
JOB
TRIP
RATE

0.00 50.00

60.00 60.00

0.00 s 310,00
s 155.00
550,00
s
s 550.00
600.00
s

70.00 s
10 %

DocuSlgn Envelope ID: B4208168-AD4F-4244-BF7A-0E57D6DBB7B1 1-7. RESPONSE AND SERVICE

EXHIBIT C

SCHEDULE OF PERFORMANCE
i. The Contractor shall provide response and service on a twenty-four (24) hour, seven (7) day per week basis. Immediate action shall be taken to safeguard the public any time a signal installation becomes partly or totally inoperative from any cause whatsoever. The maximum response times shall be as follows:
a. Emergency and accident maintenance-one (1) hour
b. Replacement of burnt-out signal faces

1. Red faces on mast arms - two (2) hours

2. Red faces on poles - two (2) hours

3. Green and yellow faces -two (2) hours
c. All other signal maintenance -twenty-four hours
d. Safety Lighting -forty-eight (48) hours
ii. Signal on-flash, signal blackout not caused by a power outage, and any malfunction of pedestrian signals shall constitute an emergency. The City may extend the maximum response time for maintenance on a case-by-case basis if the signal remains operational in a satisfactory manner and the condition poses no immediate hazard to the public. 111. Permanent work shall be completed as soon as possible and,, in all cases, no less than fourteen (14) calendar days, unless extended in writing by the City and as agreed upon by City and Contractor. iv. Failure to meet the response time requirements by the Contractor shall be sufficient cause for the City to authorize maintenance to be completed by others and deduct the costs of said maintenance from payments due the Contractor. Repetitive failure shall be deemed sufficient cause for the City to terminate the contract.
17 Updated: January 2021