Agenda packet — Morgan Hill City Council, April 5, 2023

Regular Meeting Agenda
City Council
Mark Turner - Mayor
Rene Spring - Mayor Pro Tem
Gino Borgioli - Council Member
Marilyn Librers - Council Member
Yvonne Martínez Beltrán - Council Member
Wednesday, April 5, 2023 7:00 PM
Council Chamber Building
17555 Peak Avenue, Morgan Hill, CA 95037
Morgan Hill City Council meetings are held in person with the option for the public to attend in-person or by teleconference/video conference. Information on how the public may observe and participate in the meeting is located below.

MEETING PARTICIPATION AND PUBLIC COMMENT
City Council meetings will be live-streamed on Channel 17, the City’s website, and the City’s Facebook page.

Those members of the community that would like to participate in the meetings remotely may do so by joining virtually 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 City Council meeting virtually 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 virtually by calling the number above, dial *9 to raise your hand, and be called upon to speak for up to 3 minutes
• Public comment in writing may be submitted via email to [email protected] or by mail to the City Clerk at 17575 Peak Avenue, Morgan Hill, CA 95037. Please email your comments to the City Clerk no later than 3:00 p.m. on Tuesday (the day before the City Council meeting) for your comments to be submitted to the members of the City Council with sufficient

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April 5, 2023
2 time to review the comments. You may continue to provide written comments up to noon on Wednesday (the day of the meeting) although Council Members may not have sufficient time to review them before the meeting. Public comments submitted to the City Clerk after noon the day of the meeting will be provided to the City Council as time allows.

Written comments WILL NOT be read aloud during the City Council Meeting. Please note that written comments are posted on the City’s website, so do not include any personal information you do not want to be posted on the web.

CALL TO ORDER

ROLL CALL ATTENDANCE

DECLARATION OF POSTING AGENDA

SILENT INVOCATION

PLEDGE OF ALLEGIANCE

PROCLAMATIONS
The week of April 9 - 15, 2023 as Public Safety Telecommunicators Week/Dispatcher Appreciation Week
The month of April as Parkinson's Awareness Month
The month of April as American Red Cross Month

CITY COUNCIL REPORTS
Council Member Yvonne Martinez Beltran

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April 5, 2023
3 CITY MANAGER'S REPORT

CITY ATTORNEY'S REPORT

OTHER REPORTS

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

ADOPTION OF AGENDA

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

1. ADOPT ORDINANCE NO. 2344, NEW SERIES, APPROVING A ZONING MAP

AMENDMENT FROM PLANNED DEVELOPMENT/GENERAL COMMERCIAL
TO MIXED-USE FLEX FOR A MIXED-USE DEVELOPMENT ON A 3.82-ACRE

SITE LOCATED ON THE SOUTHWEST QUADRANT OF COCHRANE ROAD AND MONTEREY ROAD (MONTEREY – CITY VENTURES (THE GATES)) (APNS 764-10-013 AND 764-10-015)
Recommendation:

Waive the reading, adopt Ordinance No. 2344, 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.

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April 5, 2023
4 2. ADOPT RESOLUTION MAKING FINDINGS IN SUPPORT OF FINANCING

FOR THE PREVIOUSLY APPROVED REHABILITATION OF SKEELS AND

VILLA CIOLINO APARTMENTS
Recommendation:

Adopt a resolution to support Eden Housing’s ability to apply for new Low Income Housing Tax Credit financing and tax-exempt bonds to support the recapitalization and rehabilitation of Skeels and Villa Ciolino Affordable Apartment Communities.

3. APPROVE CONTRACT FOR BANKING SERVICES WITH WELLS FARGO BANK
Recommendation:

1. Approve contract for banking services with Wells Fargo Bank; and

2. Authorize the City Manager to execute and administer a banking services contract with Wells Fargo Bank through 2028 with subsequent renewal subject to budget appropriation.

4. APPROVE FIFTH AMENDMENT TO AGREEMENT WITH INNOVATIVE CLAIMS SOLUTIONS, INC.

Recommendation:

Authorize the City Manager to execute and administer a Fifth Amendment to Agreement with Innovative Claims Solutions, Inc. to provide third party claims administration for workers’ compensation extending the agreement for one additional year of service at annual amount of $35,755, for a new total contract amount of $276,735 over 8 years.

5. APPROVE THE MARCH 15, 2023 CITY COUNCIL MEETING MINUTES Recommendation:

Approve the March 15, 2023 City Council minutes.

PUBLIC HEARINGS

6. ADOPT RESOLUTION ESTABLISHING CARRY CONCEALED WEAPON (CCW) LICENSE FEE, BUSINESS LICENSE RENEWAL FEE, AND

UPDATING CREDIT CARD PAYMENT SERVICE FEE
Recommendation:

1. Open/Close public hearing; and

2. Adopt resolution establishing carry concealed weapon license fee, business license renewal fee, and updating credit card service fee for development fees and transient occupancy tax payments by credit card.

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April 5, 2023
5 OTHER BUSINESS

7. PROVIDE DIRECTION ON NEXT STEPS FOR DOWNTOWN COMMUNITY

PARKLET AND/OR ALTERNATIVE DOWNTOWN ACTIVATION OPTION
Recommendation:

Provide direction on next steps for Downtown Community Parklet and/or Alternative Downtown Activation Option.

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

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April 5, 2023
6 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.

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April 5, 2023
7

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1 CITY COUNCIL STAFF REPORT
MEETING DATE: April 5, 2023
PREPARED BY:

Kim Mancera, Deputy City Clerk
APPROVED BY: City Manager
ADOPT ORDINANCE NO. 2344, NEW SERIES, APPROVING A ZONING

MAP AMENDMENT FROM PLANNED DEVELOPMENT/GENERAL

COMMERCIAL TO MIXED-USE FLEX FOR A MIXED-USE
DEVELOPMENT ON A 3.82-ACRE SITE LOCATED ON THE

SOUTHWEST QUADRANT OF COCHRANE ROAD AND MONTEREY
ROAD (MONTEREY – CITY VENTURES (THE GATES)) (APNS 764-10- 013 AND 764-10-015)

RECOMMENDATION(S)
Waive the reading, adopt Ordinance No. 2344, 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
2022-2023 Strategic Priorities
Affordable Housing and Homelessness
Economic Development
Guiding Documents
Morgan Hill 2035 General Plan
REPORT NARRATIVE:

On February 15, 2023, the City Council introduced Ordinance No. 2344 New Series, by the following roll call vote: Ayes: Borgioli, Librers, Martinez Beltran, Turner; Noes:

Spring; Abstain: None; Absent: None.

On March 15, 2023, Ordinance No. 2344 New Series, was scheduled for adoption and neither passed nor failed due to lack of majority vote.

The Ordinance implements the Zoning Map Amendment from Planned Development/General Commercial to Mixed Use Flex for a 3.82-acre site to allow for the development of a mixed-use project consisting of 5 commercial flex units, 49 townhome-style condominiums, and associated amenities.

COMMUNITY ENGAGEMENT:

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1 A project webpage was created on the Morgan Hill website. The date and time of this meeting was publicly noticed (mailed to property owners within 600-feet of the project site and newspaper legal notice) for the minimum 10-day period and a project development sign was posted at the property location pursuant to the Planning Division requirements.

ALTERNATIVE ACTIONS:

Not Applicable.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The existing “Gateway Center” Planned Development (PD) was approved by the City Council (Ordance No. 1549) on May 1, 2002.

The Planning Commission conducted a public hearing on January 11, 2022, for the Preliminary Plan Review SR2021-0020 project proposal, as required by Section

18.115.100 (Preliminary Review) of the Morgan Hill Municipal Code (MHMC). All General Plan Amendments require a Preliminary Plan Review prior to the formal submittal of a General Plan application. After receiving input from the Planning Commission, the applicant, City Ventures, worked with City staff and changed the site layout to improve on-site circulation and address concerns regarding ingress/egress and access to the site via Monterey Road.

The Planning Commission reviewed the project on December 13, 2022 and accepted public comment on the proposed project. The Planning Commission recommended approval of the Zoning Amendment application.

On February 15, 2023, the City Council approved the MND and the Mitigation Monitoring and Reporting Program, approved the resolution approving an amendment to the General Plan land use designation, and introduced the Zoning Amendment Ordinance.

FISCAL AND RESOURCE IMPACT:

The City's 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):

An initial Study/Mitigated Negative Declaration (IS/MND) was prepared for the project by Raney Planning & Management, Inc. dated October 2022 in conformance with the California Environmental Quality Act (CEQA). The IS/MND was circulated for 30 days from November 11, 2022 to December 12, 2022. On February 15, 2023, the City Council approved the MND and the Mitigation Monitoring and Reporting Program.

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ORDINANCE NO. 2344, NEW SERIES

AN ORDINANCE OF THE CITY OF MORGAN HILL

APPROVING A ZONING MAP AMENDMENT FROM

PLANNED DEVELOPMENT/GENERAL COMMERCIAL

TO MIXED USE FLEX FOR A MIXED-USE
DEVELOPMENT ON A 3.82-ACRE SITE LOCATED ON

THE SOUTHWEST QUADRANT OF COCHRANE ROAD
AND MONTEREY ROAD (MONTEREY – CITY VENTURES
(THE GATES)) (APNS 764-10-013 AND 764-10-015)

THE CITY COUNCIL OF THE CITY OF MORGAN HILL DOES 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 proposed project is consistent with the policies of the General Plan and also the proposed General Plan designation of Mixed-Use Flex.

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

The project is a mixed use development that would provide housing and commercial opportunities. The proposed project is not expected to detrimental to public interest, health, safety, convenience, or welfare of the City. An Initial Study/Mitigated Negative Declaration (IS/MND) was prepared for the project per the California Environmental Quality Act (CEQA). A Mitigation Monitoring and Reporting Program (MMRP) has been prepared for the project which includes all measures required to reduce potentially significant environmental impacts to a lessthan significant level which will be incorporated into any approval of a future development project.

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 amendment would allow for development of a mixed-use project. Based upon analysis of the conceptual plan, the project would comply with all the required development standards outlined in the MU-F zone district. The project site is large enough to fit the proposed project and be complementary to the other residential mixed-use projects located along Monterey Road. The zone change would provide an appropriate transition from the lower density single-family detached

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City of Morgan Hill
Ordinance No. 2344, New Series

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neighborhoods to the north and west of the project site to the higher density singlefamily attached neighborhoods and commercial areas along Monterey Road.

SECTION 4. The request was considered by the Planning Commission at its regular meeting of December 13, 2022, at which time the Planning Commission recommended approval of Zoning Amendment application, ZA2021-0006: Monterey – City Ventures (The Gates).

SECTION 4. Effective Date; Posting.

This Ordinance shall take effect on the 31st day after adoption. The City Clerk is hereby directed to publish this Ordinance or a summary thereof pursuant to Government Code Section 36933.

THE FOREGOING ORDINANCE WAS INTRODUCED AT A MEETING OF THE CITY COUNCIL HELD ON THE 15TH DAY OF FEBURARY 2023, AND WAS FINALLY ADOPTED AT A MEETING OF THE CITY COUNCIL HELD ON THE 5TH DAY OF APRIL 2023, 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:

MARK TURNER, Mayor MICHELLE BIGELOW, City Clerk

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City of Morgan Hill
Ordinance No. 2344, New Series

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 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. 2344, New Series, adopted by the City Council of the City of Morgan Hill, California at their regular meeting held on the 5th day of April 2023.

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

DATE:

MICHELLE BIGELOW, City Clerk

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-1-

MEMORANDUM OF UNDERSTANDING
WITH RESPECT TO “THE GATES”
This Memorandum of Understanding (“MOU”) is made this 15th day of March, 2023, by and between CITY VENTURES, LLC, a Delaware limited liability company (“City Ventures”), and CITY OF MORGAN HILL, a municipal corporation (the “City”), with respect to the following facts:

A. City Ventures has made application to the City for the approval of the entitlements (the “Application”) with respect to a project commonly known as “The Gates” which is located at 18545-18565 Monterey Road, Morgan Hill (the “Property”). The Application presently proposes a mixed-use project with both residential and commercial uses as described in the General Plan Amendment application GPA2021-0005 and Zoning Map Amendment application ZA2021-0006: Monterey – City Ventures (The Gates) on the Property. A copy of the Application is attached hereto as Exhibit A.

B. The City is in the process of amending its General Plan covering an area within the City of Morgan Hill which includes the Property, in a manner which would allow for the Property to be developed as an all-residential project.

C. The City seeks the assurance of City Ventures that City Ventures will preserve the mixed-use designation on the site and not amend the Application or leverage any state laws to build a residential-only project.

NOW THEREFORE, for valuable consideration, the receipt and adequacy of which are hereby acknowledged, City Ventures and its successors and assigns hereby provides its assurance to the City that City Ventures and its successors and assigns will not amend the Application to build a residential-only project and will maintain the commercial space substantially as shown on the Application.

IN WITNESS WHEREOF, City Ventures and the City have executed this MOU as of the date and year first written above.

CITY VENTURES, LLC, CITY OF MORGAN HILL,
a Delaware limited liability company a Municipal corporation

By: ____________________________ By: __________________________ Name:________________________ Name: ________________________ Its: ____________________________ Executive Vice President Its: ___________________________ Samantha Hauser

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EXHIBIT

APPLICATION

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-3-

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From: Joe Baranowski
To: CityCouncil; CC Public Comment
Cc: Christina Turner; Donald Larkin; Jennifer Carman
Subject: March 15, 2023 City Council Meeting: Public Comment on Agenda Item #7 on the Consent Calendar Date: Tuesday, March 14, 2023 12:34:24 PM
Re: Ordinace 2344, the Gates Mixed-Use Flex project
Council members, staff and my neighbors,
I am aware that the above referenced item is 'only' an administrative procedure at this point with the Council having voted 4-1 a few weeks ago to approve General Plan and Zoning Amendments allowing a site with a Planned Development agreement to be changed to Mixed-Use Flex so that 49 townhouse style condos (that will be sold at market rate except as required by the City of MH inclusionary housing policy) can be built. I am wrting this Public Comment because I do not believe the Public Interest was served during that decsion-making process and I think that subsequent events show that there are still unanswered questions that should be discussed as they may impact future decisions.

A preliminary review of the Gates project was held on Jan 11, 2022.

The Planning Commission held a Public Hearing and approved the requested General Plan and Zoning Amendment on December 13,2022.

Months before the February 15th 2023 City Council meeting, Staff presented detailed presentations of ‘legislative changes’ to both the Planning Commission and the Cit Council. These included discussions of SB6 and AB 2011 (The Affordable Housing and High Road Jobs Act).

Approximately 72 hours before the Feb 15, 2023 City Council meeting the Staff Report was posted.

The staff report notes that:

The existing “Gateway Center” Planned Development (PD) was approved by the City Council (Ordance No. 1549) on May 1, 2002 (Attachment 6). The PD and Master Plan encompasses four lots:
a. The two parcels proposed to be developed with this application; and, b. The two parcels to the north are developed with an Arco gas station, AM/PM convenience market, and car wash, and a multi-tenant commercial building that includes a hair salon and Starbucks with drivethrough.

The PD includes Development Standard Guidelines and specifies the allowed uses within the PD.

The two project parcels were to be developed as a multi-tenant commercial retail building with up to 2,800 square feet of restaurant space and an office building. (bold emphasis added by me) The PD and Master Plan is in fact a ten-page document. It defines allowed uses, a design theme, site development specifications, site planning, signage and miscellaneous requirements.

The entirety of the “Alternative Actions’ section states: (again emphasis added by me) The City Council could deny the request to amend the General Plan and Zoning designation for the property from General Commercial to Mixed-Use Flex. This would prevent the development of the property as mixed-use residential. The City Council could also require the applicant to enter into a Memorandum of Understanding (MOU) to ensure that the commercial spaces are preserved

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to prevent the project from changing to a 100% residential project if the General Plan Amendment and Zoning Amendment are approved.

There is no mention whatsoever of any concern with the developer of THAT property using any state laws to build an all-residential project if their requested changes were not granted.

During the question-and-answer period on February 15th, Councilmember Spring asks about the value of the property increasing and the possibility that if the developer got the changes they were requesting, the ‘mixed use’ designation turning into ‘all residential’. His remarks lead to a discussion about the logic and rationale for granting the proposed General Plan and Zoning amendments, possibly with a memorandum of understanding being included.

A staff member states that our position is we have a planned development which is an agreement, in exchange for certain benefits to the City, which would include mixed-use, the developer is getting something they wouldn’t otherwise be able to get through straight zoning, so our position is that because there’s an agreement to develop a mixed-use project, the mixed-use project would be binding on the applicant. Absent a change in the zoning this would absolutely become a straight housing project or at least have the potential to become a straight housing project under state law that allows housing on commercial property.

This was and IS confusing because of course, the Staff recommendation was to allow the developer to REMOVE the parcels from the EXISTING Planned Development Agreement.

Councilmember Spring: So it would be taken out of the PD Zone? Staff: That is what is the proposal is, to remove it from the PD.

Councilmember Spring: So the protection you just said, is gone.

Staff: But that’s where the alternative of the MoU came to be.

Councilmember Spring: Which, according to our City Attorney, current me if I’m wrong, wouldn’t trump state law.

Staff: It’s still an agreement, we would have an agreement, that’s really what we don’t have otherwise, otherwise we just have the commercial zone that’s allowed to be built with housing.

With all due respect, how is ANYONE supposed to make an informed decision with the mumble jumble that was presented? Why didn’t the Staff Report say ANYTHING about the concern over ‘state law’ that would have allowed all interested parties to review the concern and ask appropriate questions? Why wasn’t the staff clear, even when I asked during public comment, ‘what’ state law they were talking about? The answer that was provided by email after I wrote an email would have taken sixty seconds at most to say verbally. Instead, when I wrongly guessed that SB6 was the reason for concern, the only response was head shaking. Why not just give a simple answer then? There WAS a Planned Development Agreement. The ‘master plan’ is ten pages long. During the March 3rd goal setting workshop Councilmember Spring was reminded of that when the discussion of protecting commercial land came up during the Economic Development discussion:

Councilmember Spring:I was also under the impression that the PD would protect the retail piece of a PD, but then in the same meeting (meaning the Feb 15th ‘Gates’ project agenda item) someone said that well someone could come in and build anything, so which is it? Staff: We have two different types of PDs in this city. We have PDs that are fully flushed out with zoning and development standards and the uses that are allowed in them, and then we have sites where PD’s

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were put on them but never really created. We call those ‘PD Shells’. And the ‘PD Shells’ are the ones that could be developed. PD’s that are fully flushed out have been determined to be protected by our City Attorney Office.

It's STILL NOT CLEAR – WHICH IS IT?Can you please provide a definition of ‘PD Shell’? Does that concept come from case law, text in the California legal code, something that was discussed during a legislative session or in some other forum or where?
The PD that WAS applicable on the Gates parcels did include zoning and development standards and clearly specified the uses that were allowed. Why is that a ‘PD Shell’.

I do not believe a single decision-maker nor anyone in the public had ANY reasonable way to ascertain what was in the Public Interest on February 15th, 2023. Just read the above directly quoted statements.

Whether a new state law makes it possible, and to what likelihood, that a developer could build housing on the subject parcels without the City Council granting the proposed changes that will provide significant Private Benefit to the property owner, there are many other reasons to legitimately question whether a project that would qualify under AB 2011 would be likely to get the necessary funding and be able to ‘pencil’. This point was also mentioned during the goal setting workshop. The assumption that moving forward with an MoU was the way to maximize ‘local control’ is certainly not supported by what was said in the Public Hearing and subsequently. And IMO, an opportunity to discuss whether an AB2011 project on that site would be better than another market rate condo development was missed. After all AB2011 is called the Affordable Housing and High Road Jobs Act for a reason. While not wanting to speak for residents in the most nearby neighborhoods, there are certainly already approved 'high density' projects that can reasonably by presumed to be much more impactful to existing residences than what would occur on the subject property. During the goal setting workshop it was reaffirmed that what we want and what we need is more affordable housing NOT more expensive housing – no matter how beautiful it turns out and how closely the developer has worked with the City in the past.

The decision-making process on the Gates project was at best a mess. I don’t believe anyone understood the rationale for the Staff's recommendation or their own vote. IMO, it was NOT impartial, unbiased or based on any established set of facts. This is no way to ensure that Public Interest is served and it leaves some important unanswered questions.

Regards,
Joe Baranowski
MH Resident of 21+ years
WARNING: This message is from an external user. Confidential information such as social security numbers, credit card numbers, bank routing numbers, gift card numbers, wire transfer information and other personally identifiable information should not be transmitted to this user. For question, please contact the Morgan Hill IT Department by opening a new helpdesk request online or call 408-909-0055.

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From: Christina Turner
To: Michelle Bigelow; Kim Mancera
Cc: Edith Ramirez; Jennifer Carman; Donald Larkin
Subject: FW: Basis for your rationale on "Gates" General Plan Amendment this evening Date: Thursday, March 16, 2023 1:48:39 PM
Please supplement this with the Gates items, to come back on April 5. Thank you! From: Donald Larkin <[email protected]>
Sent: Thursday, March 16, 2023 12:14 PM
To: Christina Turner <[email protected]> Subject: FW: Basis for your rationale on 'Gates' General Plan Amendment this evening FYI
From: Donald Larkin
Sent: Thursday, February 16, 2023 4:19 PM
To: Joe Baranowski
Cc: Christina Turner <[email protected]> Subject: RE: Basis for your rationale on 'Gates' General Plan Amendment this evening Hi Joe,
Beginning July 1, 2023, Article 3 of the Affordable Housing and High Road Jobs Act of 2022 (not SB 6) will require ministerial approval of a mixed-income housing development on any vacant property that is zoned for retail, office, or parking and has at least 50 feet of frontage on a commercial corridor (which includes Monterey Road). A developer would need to provide a higher level of affordability than our existing inclusionary housing ordinance to be eligible for ministerial approval, but the densities would be a minimum of 30 units/acre and they could be as high as 80 units/acre.

The statute also defines setback and height requirements that differ from City standards.

There are some other requirements that a developer would need to meet, but we believe the property where the Gates project is located would be able to meet those requirements if a different developer wanted to build there. Ministerial approval will be required until the City meets its RHNA requirements at every income level.

Thanks,
Don
Donald A. Larkin
City Attorney
City of Morgan Hill
17575 Peak Avenue
Morgan Hill, CA 95037
Tel: (408) 778-3490

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Email: [email protected]
This e-mail may contain confidential and/or attorney-client privileged material. If you have received this message in error, please immediately notify the sender and delete this e-mail message from your computer.

From: Joe Baranowski
Sent: Wednesday, February 15, 2023 11:28 PM
To: Mark Turner <[email protected]>; Donald Larkin <[email protected]>
Cc: Yvonne Martinez Beltran <[email protected]>; Marilyn Librers <[email protected]>; Rene Spring <[email protected]>; Christina Turner <[email protected]>
Subject: Basis for your rationale on 'Gates' General Plan Amendment this evening Hi Mark and Don,
I obviously have not had time to re-listen to your exact words yet so please accept my apology for what might be inaccurate paraphrasing, but as I understood your remarks tonight you both strongly implied, and Mark you based some of your decision on, the 'fact' that if the requested General Plan Amendment had been denied, the developer or some other developer would almost certainly come back with a proposal to build an all-residential project on that same site which the City would have 'no' or at least far less control over.

I believe the community has a right to understand the basis for your assumptions. Don, based on your body language to my assumption that it must be related to SB6, I honestly have zero idea. I plan to write about tonight's decision on social media and, as always, I will strive to be as accurate as possible and certainly don't want to be accused of 'misinformation'.

What is the basis for your assumptions that a property with a General Plan designation of 'commercial' that has an existing Planned Development overlay would be subject to having a developer build a residential project now or 'in less than two years'? To be clear, and to minimize the length of any response, I fully understand there are other reasons for supporting the requested change and you don't need to spend any time explaining those. I am only confused about the comments relating to the LOSS of 'local control' that you implied was a near certainty if the City did not allow the designation to be changed to MU-F so that more condos can be built.

Thanks, I look forward to discovering what I am obviously completely missing, Joe
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2 CITY COUNCIL STAFF REPORT
MEETING DATE: April 5, 2023
PREPARED BY:

Rebecca Garcia, Housing Director
APPROVED BY: City Manager

ADOPT RESOLUTION MAKING FINDINGS IN SUPPORT OF

FINANCING FOR THE PREVIOUSLY APPROVED REHABILITATION OF

SKEELS AND VILLA CIOLINO APARTMENTS

RECOMMENDATION(S)
Adopt a resolution to support Eden Housing’s ability to apply for new Low Income Housing Tax Credit financing and tax-exempt bonds to support the re-capitalization and rehabilitation of Skeels and Villa Ciolino Affordable Apartment Communities.

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

NARRATIVE:

Eden Housing, Inc. and its affiliates (“Eden Housing”) control the ownership of these two developments and they still intend to apply for new Low-Income Housing Tax Credit financing and tax-exempt bonds in April of 2023 to support their re-capitalization and rehabilitation plan. Eden Housing, Inc., a California nonprofit public benefit corporation and sponsor of several affordable housing developments in the City of Morgan Hill, previously sought and received approval in December of 2018 from the City Council to approve the assignment, modification, extension, assumption, and re-subordination of its existing City debt and ground lease in support of substantially rehabilitating Skeels Hotel and Villa Ciolino Apartments.

On December 5, 2018, the City Council approved Eden Housing's request to apply for new Low Income Housing Tax Credit financing and tax-exempt bonds to support the rehabilitation of the Skeels and Villa Ciolino Affordable Apartment Communities. Their

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2 original intent was to submit a tax credit application in early 2019. However, shortly after receiving the Council’s authorization in 2018, the State decided to significantly reduce the tax credits available for rehabilitation projects. Fortunately, now there is a window to be competitive for the tax credits and they will apply and compete in the 2023 round.

The State Tax Credit Allocation application now requires a formal resolution to be adopted by the local jurisdiction, instead of a letter of support. Although Eden Housing has not been able to conduct a full rehabilitation of Villa Ciolino, they have completed some repairs exceeding $400,000 in 2023, with more than $300,000 in dry rot repairs and repainting of the exterior. Although that repair was a substantial and immediate need for the property, there are significant rehabilitation needs remaining. The plan is to invest approximately $6 million in Low Income Housing Tax Credit proceeds in comprehensive repairs at Villa Ciolino.

The tax credit application process is competitive and they have not yet been awarded an allocation, but the hope is that they will be successful this round. If successful, the closing date would be late 2023/early 2024, at which time construction would begin. A new tax credit limited partnership controlled by Eden will be created to facilitate the tax credit investment. Eden has already received the City Council’s approval for the following actions needed on December 5, 2018.

The intent and use of the loan proceeds remains the same as what was presented to the City Council in December of 2018. They will enable Eden to repair and upgrade the properties for the long-term benefit of the residents and the community. The estimate of the repairs is in process. The proposed repairs will include roof repair and/or replacement, mechanical system upgrades, substantial repairs to the building envelope and exterior stairs and balconies, common area, and unit interior improvements. In addition, Eden will implement increased energy and water efficiency measures. The impacted housing projects are:

Skeels Apartments is located at 17305 Monterey Road and consists of 13 affordable efficiency studios for extremely-low and very-low income residents. Skeels Hotel has an existing City loan (initially for $300,000, restated April 13, 2006 for $198,331.31) with a principal balance of $147,331 and $76,487 of accrued interest at 3% simple interest as of March 15, 2023, with a maturity date of April 1, 2026. Skeels has an existing City ground lease of $1 per year.

Villa Ciolino Apartments are located at 80 Ciolino Ave and consists of 41 rental units affordable for low-income families and one staff unit. Villa Ciolino has an existing City loan in the principal amount of $2,375,000 and $2,105,896 of accrued interest at 4% simple interest as of March 15, 2023, with a maturity date of April 1, 2054.

COMMUNITY ENGAGEMENT:

Inform
ALTERNATIVE ACTIONS:

As an alternative action, the City Council may choose not to adopt a resolution to

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2 support the tax credit application to rehabilitate the projects.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

On December 5, 2018, the City Council previously consented to the assignment, modification, extension, assumption, and re-subordination of existing City loans and ground leases to new Eden Housing-controlled tax credit partnerships for the rehabilitation of Eden Housing affordable apartment communities, Skeels and Villa Ciolino apartments. Specific actions included:

1. Authorize City Manager to negotiate and approve assignment, modification, extension, assumption, and re-subordination of existing City loan in the principal amount of $162,331 and accrued interest of approximately $68,339 for rehabilitation of 13-unit Skeels Affordable Housing Apartment Complex subject to the final review and approval of the City Manager;

2. Authorize City Manager to negotiate and approve assignment, modification, extension, and assumption, of ground lease for rehabilitation of housing component of Skeels Affordable Housing Apartment Complex and potential subdivision of commercial space subject to the final review and approval of the City Manager;

3. Authorize City Manager to negotiate and approve assignment, modification, extension, assumption, and re-subordination of existing City loan in the principal amount of $2,375,000 and accrued interest of approximately $1,783,111 for rehabilitation of 42-unit Villa Ciolino Affordable Housing Apartment Complex subject to the final review and approval of the City Manager;

4. Approve a letter of commitment to support EDEN’s efforts to seek new Low Income Housing Tax Credit financing and tax-exempt bonds to support their recapitalization and rehabilitation of projects.

FISCAL AND RESOURCE IMPACT:

As indicated in the December 5, 2018 staff report, if awarded tax credits and with the execution of the refinance, the City’s Housing Fund (255) will potentially be increased by a $100,000 loan payment during Fiscal Year 2025-26, and possibly in coming years through residual receipts payments.

CEQA (California Environmental Quality Act):

These projects are Categorically Exempt pursuant to Section 15301 of CEQA Guidelines as proposed repairs, maintenance and minor alteration of existing facilities involving no expansion of existing use will not have a significant effect on the environment.

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CITY COUNCIL STAFF REPORT
MEETING DATE: December 5, 2018
PREPARED BY: Rebecca Garcia, Housing Manager
APPROVED BY: City Manager

EDEN HOUSING - APPROVE ASSIGNMENT, MODIFICATION,

EXTENSION, ASSUMPTION, AND RE-SUBORDINATION OF EXISTING

CITY LOANS AND GROUND LEASES FOR REHABILITATION OF
APARTMENTS; SKEELS, VILLA CIOLINO, WILLOWS APARTMENTS

AND DEPOT COMMONS

RECOMMENDATION(S)

4. Authorize City Manager to negotiate and approve assignment, modification, extension, and assumption, of ground lease for 20-unit Willows Affordable Housing Apartment Complex subject to the final review and approval of the City Manager; and

5. Approve a letter of commitment to support EDEN’s efforts to seek new Low Income Housing Tax Credit financing and tax-exempt bonds to support their re-capitalization and rehabilitation of projects.

COUNCIL PRIORITIES, GOALS & STRATEGIES
Ongoing Priorities
Maintaining Infrastructure
Supporting Our Youth
Seniors
and Entire Community
2020-2021 Strategic Priorities
Regional Initiatives
Fiscal Sustainability

GUIDING DOCUMENTS
Fire Services Standards of Coverage

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POLICY CONSIDERATIONS:

Should the City Council approve the assignment, modification, extension, assumption, and re-subordination of existing City loans and ground leases for the rehabilitation of Eden Housing affordable apartment communities?
REPORT NARRATIVE:

Eden Housing, Inc., a California nonprofit public benefit corporation and sponsor of several affordable housing developments in the City of Morgan Hill, requests that the City approve the assignment, modification, extension, assumption, and re-subordination of its existing City debt and ground leases in support of substantially rehabilitating Depot Commons, Skeels Hotel, Villa Ciolino, and Willows Apartments.

Eden Housing, Inc. and its affiliates (“Eden”) control the ownership of these four developments and intend to seek new Low-Income Housing Tax Credit financing and tax-exempt bonds to support their re-capitalization and rehabilitation. Eden will sell these developments to new tax credit limited partnerships controlled by Eden in order to facilitate the tax credit investment, and the new tax credit limited partnerships will need to assume the modified and extended existing City loans and ground leases. Eden is seeking the City’s approval and consent to assign, modify, extend ground leases and re-subordinate rehabilitation loans unique to each project site.

Eden proposes financing four sites together in two “bundles” to reduce transactional costs and attract a higher level of tax credit investment. Eden proposes to finance Depot Commons and The Willows together; and, Skeels Hotel and Villa Ciolino together. The non-profit developer is also considering subdividing the commercial portion of Skeels Hotel and transferring it to separate ownership that would be controlled by Eden or yet another of its affiliates. This determination will be made at a later date, depending upon the financing advantage and terms acceptable to the City.

Eden is seeking to use financing provided by a geographically-based Low Income Tax Credit “boost” that will expire at the end of this year. To qualify, Eden will need to submit an application for tax-exempt bonds to the State of California prior to December 14th.

Notice that this geographically-based tax credit boost is terminating was only recently published by the Federal Government on October 19th. By utilizing this tax credit boost, Eden can proportionately reduce any commensurate need for local sources of gap financing, preserving that financing for other affordable housing projects. To qualify, Eden must be able to demonstrate that the City of Morgan Hill will re-subordinate its loan(s) and extend/assign the ground leases which exist on each property but Depot Commons, to the newly created tax credit entity.

Morgan Hill’s policy towards its multifamily housing partnerships is to provide stewardship to guaranty investment and re-investment in quality, long term housing stock. This generally results in supporting non-profit partners as they raise rehabilitation dollars for renovation of older aging structures from the private market through a combination of sources including tax credit funds. With a goal of rehabilitation and modernization of dwelling units, it makes sense for Morgan Hill to re-subordinate its’

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position in the transactions and assign ground leases to support the modernization of the structures.

Although a letter of intent must be submitted by December 14th, 2018, Eden will have up to two years from December 14th to close the new tax credit financing and retain the tax credit boost. Prior to that, a Tax Equity and Fiscal Responsibility Act (TEFRA) hearing will be held before the Morgan Hill City Council, with rehab work intended to occur immediately thereafter. The Housing Team has worked with Eden to review the proposed improvements at each site and made recommendations regarding their intended scopes of work. The impacted housing projects are:

Depot Commons:

Depot Commons, located at 17135-17145 Depot Street, contains 12 studio apartments affordable to low-income residents and one staff apartment. Eden proposes combining Depot Commons with Willows Apartments to obtain new scattered-site financing. Depot Commons does not currently have existing City loans or a ground lease but, as part of a scattered-site project, would share financing and be cross-collateralized with The Willows Apartments, which does have a ground lease from the City.

Depot Commons has an existing residual receipts loan from the California Department of Housing and Community Development (“HCD”), with a principal amount of $600,000 and accrued interest of $394,323. Depot Commons has two existing Santa Clara County (“County”) loans with combined principal of $324,672 and accrued interest of $440,269. Eden is asking HCD and the County to approve the assignment, modification, extension, assumption, and re-subordination of those loans as well.

Eden is working with City staff to evaluate the potential of increasing the number of affordable units provided at Depot Commons by an additional three units, for a total of 15 units. With minor alterations to the footprint of the existing buildings, by reconfiguring the interior spaces, Eden may be able to create 3 new units. If agreement is reached on this strategy, Eden anticipates returning to the City for all requisite approvals. This could be an opportunity for the City to obtain much needed very low-income units in an existing building, assisting the City with its Regional Housing Needs Allocation (RHNA) Goals.

Skeels Apartments:

Skeels Apartments, located at 17305 Monterey Road, contain 13 efficiency studios affordable to low-income residents. Eden proposes combining the residential portion of Skeels Hotel with Villa Ciolino in a new scattered-site financing. They would share financing and be cross-collateralized. Eden is exploring the possibility of subdividing the commercial portion of the building and transferring it to separate ownership that is controlled by Eden or its affiliates to eliminate complications with financing and underwriting.

Skeels Hotel has an existing City loan ($300,000) with a principal balance of $162,331 and $68,339 of accrued interest at 3% simple interest with a maturity date of April 1, 2026. By the time the financing closes, Eden anticipates that additional interest would

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have accrued. Eden is proposing to extend the term of the loan and the affordability restrictions attached to the loan for a new 55-year term. In order to be compatible with new tax credit financing and to satisfy Internal Revenue Code requirements, Eden proposes recasting the principal and accrued interest at the Applicable Federal Rate (“AFR”) that will be in effect as of the date of closing for the new financing (for reference, the AFR is 3.22% as of November 1st, 2018). The residual receipts repayments of the City loan may also have to be renegotiated among the government entities that have existing loans to Skeels Hotel and Villa Ciolino. Eden is asking the City to approve the assignment, modification, extension, assumption, and resubordination of its loan and its related regulatory agreement.

Skeels Hotel has an existing City ground lease of $1 per year. Eden is proposing to extend the term of the ground lease and the affordability restrictions attached to the ground lease to satisfy the terms of new financing. Eden is asking the City to approve the assignment, modification, extension, and assumption of its ground lease, based upon the terms of the financing subject to the City of Morgan Hill’s final review. In addition, in the event that Eden subdivides the commercial portion, Eden is asking the City to approve modifying the existing ground lease to remove the commercial portion from the legal description and to enter into a new separate ground lease to encumber only the subdivided commercial parcel, under the same ground lease terms. Skeels Hotel has four existing residual receipts loans from the County, with a combined principal amount of $961,195 and accrued interest of $803,587. Eden is asking the County to approve the assignment, modification, extension, assumption, and resubordination of those loans as well.

Villa Ciolino:

Villa Ciolino Apartments, located at 80 Ciolino Ave, contains 41 rental units affordable to low-income families and one staff unit. Eden proposes combining Villa Ciolino with the residential portion, and possibly also the commercial portion, of Skeels Hotel in a new scattered-site financing. They would share financing and be cross-collateralized.

Villa Ciolino has an existing City loan in the principal amount of $2,375,000 and $1,783,111 of accrued interest at 4% simple interest with a maturity date of April 1, 2054. By the time the financing closes, Eden anticipates that additional interest would have accrued. Eden is proposing to extend the term of the loan and the affordability restrictions attached to the loan for a new 55-year term. In order to be compatible with new tax credit financing, Eden proposes recasting the principal and accrued interest at AFR as of the date of closing for the new financing. The residual receipts repayments of the City loan may also have to be renegotiated among the government entities that have existing loans to Skeels Hotel and Villa Ciolino. Eden is asking the City to approve the assignment, modification, extension, assumption, and re-subordination of its loan and its related regulatory agreement.

Villa Ciolino has an existing residual receipts loan from the County, with a principal amount of $300,000 in accrued principal and $314,705 in accrued interest. Eden is asking the County to approve the assignment, modification, extension, assumption, and re-subordination of those loans as well.

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Willows Apartments:

The Willows Apartments, located at 50 West Edmundson Ave, contains 19 rental units affordable to low-income families and one staff unit. Eden proposes combining Depot Commons with Willows Apartments in a new scattered-site financing. They would share financing and be cross-collateralized.

The Willows Apartments has an existing City ground lease that terminates in 2046.

Eden is proposing to extend the term of the ground lease and the affordability restrictions attached to the ground lease for a new year term, commensurate with their financing requirements. Eden is asking the City to approve the assignment, modification, extension, and assumption of its ground lease, subject to final review of documents.

Villa Ciolino has an existing residual receipts loan from HCD, with a principal amount of $954,228 and accrued interest of $719,857. Eden is asking HCD to approve the assignment, modification, extension, assumption, and resubordination of its loan.

Uses of the Loan Proceeds:

The uses proposed for the loan proceeds include performing critical repairs in excess of $4 million across the four sites, within 12 months of the closing of the refinancing, and customary entitlement, design, financing, and transactional costs. In addition, Eden will earn a developer fee in accordance with the Internal Revenue Code and State of California’s regulations controlling developer fee.

The loan proceeds will enable Eden to repair and upgrade the property for the long-term benefit of the residents and the community. The estimate of the repairs is in process.

The proposed repairs will include (among other items) roof repair and/or replacement, mechanical system upgrades, and common area and unit interior improvements. In addition, Eden will implement increased energy and water efficiency measures and pursue the installation of solar photovoltaic systems to offset electricity usage where feasible.

In the event that excess funds are available from the refinance, Eden proposes that the refinance transaction repay up to $100,000 of its current City loans. This pay down would be contingent on the project securing favorable tax credit and tax-exempt bond financing, and the ability to cover the costs for renovations and improvements. Eden would also ask that the City consider some lesser amount (amount to be determined) if staff and Eden determine that project funds would be best utilized to address current and unforeseen renovation scope items.

The City loans are Residual Receipt loans, which means that the City would continue to be eligible for a prorated portion of cash flow from these affordable housing developments, to the extent that there is sufficient cash flow. The proration will be made among all of the residual receipts loans from all sources, as well as deferred sources coming from Eden and its affiliates in accordance with Internal Revenue Code and State of California tax credit regulations.

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Staff has discussed with EDEN Housing the City’s desire to work together to streamline opportunities to assist individuals and families that are serviced by South County programs and the Morgan Hill school district, experiencing homelessness, and overcrowded living accommodations. One example of a connection that could be made is as new units are created, and possibly as turn over occurs, there may be an opportunity to create a bridge to permanent housing for families participating in the City’s homeless safe parking program.

COMMUNITY ENGAGEMENT: Inform. This report is intended to inform the Morgan Hill community.

ALTERNATIVE ACTIONS:

As an alternative action to the staff recommendation, the City Council may decide to not approve the recast and re-subordination of the its loans and require Eden Housing to pay the loans off in full, and the opportunity to substantially rehabilitate these projects would no longer be financially viable. Furthermore, in this circumstance, the City would lose the ability to require the projects to remain affordable to low income individuals for an additional 55 years.

The City Council may also decide to not approve the extension of the ground leases for the Skeels Apartments and Willows Apartments on City-owned land. In this circumstance, the City would compromise the financial viability of the rehabilitation projects, and the projects would not be able to qualify for tax credit financing.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The City Council previously considered the terms of the loans for the Skeels Apartments and Villa Ciolino Apartments and consented to the assignment from entities controlled by South County Housing and its affiliates and to assumption entities controlled by Eden Housing and its affiliates.

The City Council previously considered the terms of the ground leases for Skeels Apartments and The Willows Apartments and consented to the assignment from entities controlled by South County Housing and its affiliates and to assumption entities controlled by Eden Housing and its affiliates. The City Council also approved restating the annual ground rent due from Skeels Apartments and The Willows and forgiving accrued unpaid ground rent.

FISCAL AND RESOURCE IMPACT:

With execution of the refinance, the City’s Housing Fund (255) will potentially be increased by $100,000 during Fiscal Year 2019-20, and possibly in coming years through residual receipts payments.

The execution of the refinance will extend the affordability agreements associated with the Skeels Apartments, Villa Ciolino Apartments, and The Willows Apartments, continuing to make affordable housing available to the City’s low-income residents for the next 55 years.

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CEQA (California Environmental Quality Act):

LINKS/ATTACHMENTS:

1. City Commitment Letter_EDEN Rehab (002)

2. Conflicts

3. 23 Presentation

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RESOLUTION NO. 23-00_

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF MORGAN HILL AUTHORIZING MODIFICATION OF

LOAN TERMS AND GROUND LEASE AND SUBDIVISION
FOR SKEELS APARTMENTS LOCATED AT 17305

MONTEREY ROAD AND AUTHORIZING MODIFICATION

OF LOAN TERMS FOR VILLA CIOLINO APARTMETNS
LOCATED AT 80 CIOLINO ROAD ET AL AND FINDING
THAT THIS ITEM IS NOT A “PROJECT” PURSUANT TO
CEQA GUIDELINES SECTION 15378(b)(4-5)
WHEREAS, the Skeels Apartments owned by Skeels Hotel LLC and operated by Eden Housing, Inc., is a 13-unit affordable housing development with ground floor commercial located at 17305 Monterey Road in Morgan Hill providing housing for families with extremely low and very-low incomes; and
WHEREAS, Villa Ciolino owned by Villa Ciolino Associates, L.P. and operated by Eden Housing, Inc. is a 42-unit affordable housing development at 80 Ciolino Avenue in Morgan Hill providing 41 units of housing for families with very-low incomes and one staff unit; and WHEREAS, the City of Morgan Hill providing funding to acquire and substantially rehabilitate the improvements of the 17305 Monterey Road property in the form of a City loan in the original principal amount of $300,000 secured by a borrower’s note on March 17, 1995 and restated on April 13, 2006 as new principal amount of $198,331.31 and with the loan bearing 3% simple interest; and
WHEREAS, the City of Morgan Hill provided a Ground Lease to the owner of the improvements of 17305 Monterey Road property on November 1, 1994 in the amount of $1 per year; and
WHEREAS, the City of Morgan Hill provided funding to acquire and develop the 80 Ciolino Road property in the form of a City loan in the original principal amount of $2,375,000 secured by a borrower’s note on April 1, 1999 with the loan bearing 4% simple interest; and WHEREAS, the 20-year term of the Borrowers Note securing the City loan to Skeels Apartments in the amount of $300,000, restated as $198,331.31, expires on April 1, 2026; and WHEREAS, the 55-year term of the Ground Lease to the owner of the improvements of Skeels Apartments expires on November 1, 2049; and
WHEREAS the 55-year term of the Borrowers Note securing the City Loan to Villa Ciolino Apartments in the amount of $2,375,000 expires on April 1, 2054; and

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City of Morgan Hill
Resolution No. 23-00_

Page 2 of 4 ends

WHEREAS, the City of Morgan Hill supports the production and preservation of affordable housing for its lower income and vulnerable populations; and WHEREAS, the Morgan Hill General Plan includes policies to provide essential housing to all Morgan Hill residents, support efforts to prevent homelessness, and promote the integration of affordable and special needs housing projects in existing neighborhoods; and WHEREAS, the City Council has established ongoing priorities of maintaining infrastructure and supporting our youth, seniors, and entire community and 2022-2023 strategic priorities of regional initiatives and fiscal sustainability; and WHEREAS, the proposed action is exempt from the requirements of the California Environmental Quality Act (CEQA) in accordance with CEQA Guidelines Section 15378, as the action does not meet CEQA's definition of a “project,” because approving a loan term extension is not a project as it does not commit the City to a definite course of action (See City of Irvine v.

County of Orange (2013) 221 Cal 4th 846, 865) and because this action constitutes organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment; and
WHEREAS, Eden Housing plans to continue operation of the Skeels Apartments affordable housing project in accordance with all requirements of the City of Morgan Hill regulatory agreements pertaining to 17305 Monterey Street land and improvements and entered into by the City of Morgan Hill and Skeels Hotel LLC; and WHEREAS, Eden Housing plans to continue operation of the Skeels Apartments commercial units in accordance with all of the City of Morgan Hill regulatory agreements pertaining to 17305 Monterey Street land and improvements and entered into by the City of Morgan Hill and Skeels Hotel LLC; and
WHEREAS, Eden Housing intends to subdivide the commercial units from the affordable housing at 17305 Monterey Street and transfer them to an ownership entity known as “Eden Commercial, Inc.” or its Eden-controlled affiliate; and WHEREAS, Eden Housing plans to continue operation of the Villa Ciolino Apartments affordable housing project in accordable with all requirements of the City of Morgan Hill regulatory agreements pertaining to 80 Ciolino Street and entered into by the City of Morgan Hill and Villa Ciolino Associates, L.P.; and
WHEREAS, Eden Housing has sponsored a new Federal Low Income Housing Tax Credit Partnership known as “Skeels Villa, L.P.” for the purpose of substantially rehabilitating the Skeels Apartments affordable housing project at 17305 Monterey Street and the Villa Ciolino Apartments affordable housing project at 80 Ciolino Street; and,
WHEREAS, the City Council of Morgan Hill approved the Assignment, Modification, Extension, Assumptions, and Resubordination of existing City Loans and a Ground Lease for the

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City of Morgan Hill
Resolution No. 23-00_

Page 3 of 4 ends

Rehabilitation of Skeels and Villa Ciolino On December 5, 2018 to be followed by the adoption of a formal resolution on April 5, 2023; and,
WHERAS, Eden Housing has sponsored a new Federal Low Income Housing Tax Credit Partnership known as “Skeels Villa, L.P.” for the purpose of substantially rehabilitating the Skeels Apartments affordable housing project at 17305 Monterey Street and the Villa Ciolino Apartments affordable housing project at 80 Ciolino Street; and,
WHEREAS, this item was agendized in compliance state and local laws.

NOW, THEREFORE, THE MORGAN HILL CITY COUNCIL DOES RESOLVE AS FOLLOWS:

SECTION 1. Declares the above recitals to be true and correct and are incorporated herein by reference.

SECTION 2. Finds that the proposed action is exempt from the requirements of the California Environmental Quality Act (CEQA) in accordance with CEQA Guidelines Section 15378, as the action does not meet CEQA's definition of a “project,” because approving a loan extension is not a project because this action constitutes organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment pursuant to CEQA Guidelines Section 15378(b)(4). Furthermore, environmental compliance was already completed when the initial loans and ground lease were approved.

SECTION 3. Authorizes the City Manager or other authorized representative to extend, assign, and modify the City’s existing regulatory agreements, loan, and bifurcate the ground lease for 17305 Monterey Road to the new tax credit partnership (Skeels Villa, L.P.) which will own the leasehold interest and improvements of the affordable housing subdivision of the project. Authorizes the City Manager or other authorized representative to release the City’s existing regulatory agreement and loan from the proposed commercial subdivision at 17305 Monterey Road and approve transfer to Eden or one of its controlled affiliates (Eden Commercial, Inc.) which will own the leasehold interest and improvements of the commercial subdivision of the project.

SECTION 4. Authorizes the City Manager or other authorized representative to extend, assign, and modify the City existing regulatory agreements and loan for 80 Ciolino Street to the new tax credit partnership (Skeels Villa, L.P.) which will own the fee interest and improvements of the affordable housing project.

SECTION 5. Authorizes the City Manager or other authorized representative, for the affordable housing regulatory agreements, loans, and ground lease in Section 3 and Section 4, to extend the terms to a new term of 55 years. The accrued interest to the date that

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City of Morgan Hill
Resolution No. 23-00_

Page 4 of 4 ends

the construction financing closes would be capitalized into the new principal amount and the new interest rate would be reset to the Applicable Federal Rate on the date of construction finance closing, as determined by tax counsel. The exact amount of accrued interest will be determined based on the actual amount of accrued interest as of the date of the construction loan closing.

PASSED AND ADOPTED by the City Council of Morgan Hill at a Regular Meeting held on the __
th day of ________ 2023 by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

APPROVED: ATTEST:
____________________________ ________________________________ MARK TURNER, 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.23-00_ adopted by the City Council at the meeting held on ____________, 2023.

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

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3 CITY COUNCIL STAFF REPORT
MEETING DATE: April 5, 2023
PREPARED BY:

Dat Nguyen, Finance Director
APPROVED BY: City Manager

APPROVE CONTRACT FOR BANKING SERVICES WITH WELLS

FARGO BANK

RECOMMENDATION(S)

1. Approve contract for banking services with Wells Fargo Bank; and

2. Authorize the City Manager to execute and administer a banking services contract with Wells Fargo Bank through 2028 with subsequent renewal subject to budget appropriation.

COUNCIL PRIORITIES, GOALS & STRATEGIES
2022-2023 Strategic Priorities
Fiscal Sustainability
Community Outreach, Engagement, and Messaging
REPORT NARRATIVE:

The City has been banking with Wells Fargo Bank (WFB) since 2015. WFB is one of the largest commercial banks in the nation and is considered a systemically important financial institution that U.S. federal regulators determine would pose a serious risk to the economy if it were to collapse. As such, the bank is subject to extra regulatory requirements and increased scrutiny than smaller banks. In light of the recent failures of certain large regional banks, it is important that the City banks with large institutions to provide extra assurance that the City's cash is safe and banking services are not interrupted. As a government entity, the City's deposits at WFB are fully collateralized at 110%.

WFB has offered to keep the pricing at the current level and staff have had positive experience working with the bankers and customer representatives. WFB has a local branch in Morgan Hill, at the southwest corner of Monterey Road and E Main Ave. In addition, changing banks would potentially create a substantial workload for Finance staff as well as for the City's vendors and customers.

COMMUNITY ENGAGEMENT:

Inform

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3 This staff report serves to inform the community of the proposed contract for banking services with WFB.

ALTERNATIVE ACTIONS:

The City Council could direct staff to issue a new RFP for banking services.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

On October 21, 2015, the City Council approved the banking services contract with WFB.

FISCAL AND RESOURCE IMPACT:

The City paid $49,190 in banking service fees in the prior fiscal year 2021-22. Sufficient appropriations have been programmed into the City's budget for the banking service fees.

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.

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Approved for Use in Local Government Banking Only
Amendment to Master Agreement
for Treasury Management Services
Treasury Management Services

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2 Amendment to Master Agreement for Treasury Management Services | September 18, 2020 Approved for Use in Local Government Banking Only
Introduction
This Amendment supplements and modifies the Master Agreement for Treasury Management Services (“Master Agreement”) for City of Morgan Hill. “You,” “your” or “yours” refers to the customer identified in the immediately preceding sentence. The terms “we,” “us,” or “our” refer to the Bank. Capitalized terms used but not defined in this Amendment are defined in the Master Agreement. This Amendment constitutes part of the Service Documentation as defined in the Master Agreement. If there is a conflict between this Amendment and the Master Agreement or other Service Documentation, this Amendment will control. Except as expressly modified by this Amendment, all terms and provisions of Master Agreement and Service Documentation will continue to apply with full force and effect.

Amendment
We agree that the Master Agreement governing our relationship with you is amended as follows:

1. The following text is added at the end of Section 3 of the Master Agreement (titled “Changes to services”):
“Notwithstanding the immediately preceding paragraph, through the Initial Term End Date (as defined below) Bank will not change the fees for Services reflected on Attachment A, except:
• in order to reflect the impact of any change in Applicable Law; • in the event your Service usage volume is materially lower than that reflected on Attachment A; • for changes to Bank’s pricing methodology for Services, including element IDs associated with a Service, so long as the change does not increase the total price of the Services to you (unless permitted under one of the two immediately preceding bullet points).

If you implement additional Services not described on Attachment A prior to the Initial Term End Date, the fees for such additional Services will be as disclosed to you in connection with the implementation of such additional Services.”

2. The following text is added at the beginning of Section 4 (titled “Term and termination”) as a new first sentence:
“Subject to the termination provisions below, the initial term of this Agreement will commence on February 1, 2023 and expire on January 31, 2028 (“Initial Term End Date”).

3. The text of Section 12 (titled “Governing Law”) is deleted in its entirety and replaced with the following:
“Governing law. The Service Documentation will be governed by: (a) U.S. federal law and (b) the law of California, without reference to its principles of conflicts of laws (“Governing Law”).”

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3 Amendment to Master Agreement for Treasury Management Services | September 18, 2020 Approved for Use in Local Government Banking Only

4. The text of Section 14 (titled “Jurisdiction”) is deleted in its entirety and replaced with the following:
“Jurisdiction. For any proceedings regarding this Agreement (other than a proceeding subject to arbitration), you and we each hereby irrevocably submits to the jurisdiction of the courts of California or the federal courts located there and irrevocably agrees that all claims relating to the proceeding may be heard or determined in those courts.”
WELLS FARGO BANK, N.A. City of Morgan Hill
By: By:

Name: Name:

Title: Title:

Date: March 15, 2023 Date:

Zina Monroe
VP. Sr. Relationship Manager

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4 Amendment to Master Agreement for Treasury Management Services | September 18, 2020 Approved for Use in Local Government Banking Only
Attachment A1
Pricing for Specified Treasury Management Services
See Attached
1 NOTE: Attachment A should only reflect pricing for treasury management products and services governed by the Master Agreement for Treasury Management Services (i.e. it should not reflect pricing for commercial card, merchant services, securities, derivatives, foreign exchange, credit or any other products or services not governed by the Master Agreement for Treasury Management). Any references in Attachment A to products and services not governed by the Master Agreement for Treasury Management Services will not be considered part of or subject to the terms of this Amendment.

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RevisedOctober 11, 2022
Master Agreement for
Treasury Management Services
The Service Documentation contains the terms under which Wells Fargo Bank, N.A. and the banks, branches or subsidiaries listed in Appendix X (collectively, “Bank”) provide you treasury management services (each, a “Service”). “You,” “your” or “yours” refer to the Bank customer identified on the Acceptance of Services that is signed when you enroll in a Service (“Acceptance”). The terms “we,” “us,” or “our” refer to the Bank. Other capitalized terms used in this Master Agreement for Treasury Management Services (“Agreement”) are defined in this document.

You and we agree:

1. Service documentation. The Service Documentation contains the terms governing each Service and includes:
a. The Service Description (which contains terms and conditions applicable to the specific Service), b. The Acceptance (which indicates your acceptance of the Service Documentation), c. This Agreement (which contains terms and conditions applicable to all Services), d. The account agreement governing the account(s) (each, an “Account”) you use in connection with the Service, e. The Product Enrollment Form (which contains set-up information for each Service in which you are enrolling), and f. User Guides (which include our vendors’ and our documentation related to the installation, set-up function, features, operation, use, pricing or other aspects of the Services, including Terms of Use, software, software licenses, price schedules, specifications, instructions, and notices).

The documents and individual provisions of the Service Documentation are intended to be read together as one agreement between you and us. This Agreement and the Service Descriptions for Services you enroll in are posted at our Commercial Electronic Office® (CEO®) portal. If there is a conflict among the documents that are part of the Service Documentation, they will govern in the order listed above. Your use of a Service confirms your receipt of, and agreement to be bound by, this Agreement and all Service Documentation.

2. Services. You and we will agree upon the Services to be provided and the start date for each Service. Each Service is subject to the approval by our applicable branch or subsidiary. We will notify you when you have completed all requirements for enrolling in the Service and the Service is ready for you to use.

3. Changes to services. We may change (or add to) the terms and fees in the Service Documentation at any time. If a change to a Service requires a change to the Service Documentation, we will post the document(s) with the change on the CEO portal. When required by Applicable Law, we will notify you of the change. If you continue to use a Service after a change takes effect, you will be bound by the change. As used in this Agreement, the term “Applicable Law” means all applicable laws (including common or customary laws), statutes, constitutions, policies, decrees, judgments, treaties, regulations, directives, by-laws, rulings, orders or operating circulars governing our activities and/or any Transaction (see section 6-a) governed by this Agreement, including, but not limited to, the funds transfer system and clearing and settlement house rules.

4. Term and termination. Unless a Service is terminated in accordance with the Service Documentation, this Agreement and each Service will continue in effect until terminated by either party upon 30 days’ prior written notice to the other party. When a Service is terminated for any reason, the Service Documentation governing the terminated Service is also terminated.

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We may suspend or terminate any Service:
a. After we notify you of a breach of any provision of the Service Documentation or any other agreement with us, and you fail to cure the breach (if it can be cured) within 15 days of the date of the notice; or b. Without prior notice to you if:
i. We reasonably suspect that an Account associated with a Service has been compromised or otherwise subject to irregular, unauthorized, fraudulent, or illegal activity, ii. You become subject to any insolvency or bankruptcy proceeding, or any receivership, liquidation, reorganization, or other similar proceeding, or you enter into any agreement or proceeding for voluntary liquidation, dissolution, composition with or assignment for the benefit of creditors or other winding up, iii. We determine in our sole discretion that continuing to provide a Service may place us at risk of financial loss or result in an unacceptable credit exposure,
iv. Any guaranty of your obligations to us (“Guaranty”) is terminated, revoked, or its validity contested by the guarantor (“Guarantor”),
v. We determine in our sole discretion that a material adverse change has occurred in your ability to perform your obligations under the Service Documentation, or in the ability of a Guarantor to perform its obligations under a Guaranty, or
vi. The Account necessary to provide a Service is closed.

The termination of a Service will not affect your or our respective rights and obligations with respect to the Service(s) provided before the termination including without limitation Transactions. We will not be liable to you for any losses or damages you may incur as a result of any termination of any Service or termination or restriction of any CEO portal access rights under section 9(d) below.

5. Service fees. You will pay us the fees described in the Service Documentation and any taxes applicable to each Service, however designated, but excluding taxes based on our net income. We may debit your Account for any fees not covered by earnings credits and any taxes that are due, or we may send you an invoice for these amounts, which you will promptly pay. Our charges and fees are in the applicable fee schedule for Services used in connection with your Account.

6. Security procedures.
a. Unless otherwise agreed, you agree that “Security Procedure” is the applicable security procedure described in the Service Documentation for your Initiation Method for the Service, which we will use to verify the authenticity of a Transaction. The term “Initiation Method” refers to the method we offer in the product enrollment form (“Set-up Form”) or other Service Documentation for delivering your Transaction instructions to us with respect to the applicable Service and includes any applicable transmission protocols. The term “Transaction” means (i) any funds transfer, payment order, or payment instruction (including any communication cancelling or amending an instruction), and (ii) any instruction, data or other information which we receive in your name with respect to a funds transfer. The purpose of the Security Procedure is to verify the authenticity of the Transaction. We will not use the Security Procedure to detect an erroneous or duplicate Transaction. You will be responsible for any erroneous or duplicate transaction we receive in your name. You agree to be bound by each Transaction, whether or not authorized by you, issued in your name and accepted by us in compliance with the Security Procedure for the Service.
b. You agree that each Security Procedure for the Initiation Method in the Set-up Form or other Service Documentation for each of the Services (a) best meets your requirements with regard to the size, type and frequency of your Transactions, and (b) is commercially reasonable.

7. Confidential information. Unless otherwise stated in the Service Documentation, “Confidential Information” means all (a) User Guides, (b) Security Procedures, passwords, codes, security devices and related instructions and technical and non-technical information and intellectual property rights relating to our vendors’ or our technology, IT infrastructure or data security, including trade secrets, systems information security program or processes, SSAE or SOC reports, and testing procedures or results. You will not acquire any ownership interest in or rights to Confidential Information as a result of your use of any Service.

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You will:
a. Maintain the confidentiality of the Confidential Information, b. Not disclose (or permit your employees or agents to disclose), copy, transfer, sublicense, or otherwise make any of it available to any person or entity, other than your employees who have a need to use the Confidential Information in connection with the applicable Service, and c. Not decompile, reverse engineer, disassemble, modify, or create derivative works of any Confidential Information.

You will notify us immediately if you know of or suspect any unauthorized disclosure, possession, use, or knowledge (each, an “Unauthorized Use”) of any Confidential Information. If you (or your employees or agents) are responsible for the Unauthorized Use, you will, at your expense, promptly take all actions, including initiating court proceedings to recover possession and prevent further Unauthorized Use of the Confidential Information. You will also compensate us for any injury caused to us as a result of the Unauthorized Use.

8. Currency conversion. When your instructions require us to convert the amount of a Transaction from the currency in which the Account is denominated (“Account Currency”) to another currency (“Foreign Currency”), we will do so using the Applicable Exchange Rate in effect at the time we execute your Transaction. “Applicable Exchange Rate” means the exchange rate we set and use for you when we convert one currency to another currency and includes a markup.

The markup factors include costs incurred, market risks and our desired return. The exchange rate we provide to you may be different from the exchange rates you see elsewhere. Foreign exchange rates are dynamic, and rates fluctuate over time based on market conditions, liquidity, and risks.

If a financial institution designated to receive the funds does not pay the beneficiary specified in the Transaction, and the funds are returned to us, we will not be liable to you for a sum greater than the amount of the Transaction after we have converted it from the Foreign Currency to the Account Currency using the Applicable Exchange Rate in effect at the time the funds are returned to us. You accept the risks of any change in the Applicable Exchange Rate between the time you request a Transaction and the time the Transaction is either completed or is unwound due to a cancellation, an amendment, a rejection, or a return.

9. CEO portal.
a. Description of the CEO portal. The CEO portal is our electronic banking portal that is accessed -through the Internet. Your Authorized Agents (defined below) may use the CEO portal to access (i) Services in which you have separately enrolled and (ii) third-party sites we may make available through the CEO portal. We offer different channels through which you may access the CEO portal, including personal computers and mobile devices. We may add or eliminate channels at any time. A Service or third party site accessible through one channel may not be accessible through another channel.
b. Access to the CEO portal. When you enroll in the CEO portal, and as we may determine is necessary after enrollment, we will provide Log-On Credentials (defined below) to the persons who are authorized to access the CEO portal on your behalf (each, an “Authorized Agent”). Log-On Credentials mean one or more secure methods we provide to access the Services and may include user IDs, passwords, token IDs, and other methods that we adopt from time to time. We have no obligation to separately verify or authenticate any communication we receive in your name through the CEO portal, whether or not it was actually from an Authorized Agent. You assume the entire risk of (i) unauthorized use of your Log-On Credentials and (ii) unencrypted electronic transmissions. c. Administration of the CEO portal. We offer two options for administering the CEO portal: (i) Administration and (ii) Bank administration.
i. Administration. If you enroll in the Administration option, there are three categories of Authorized Agents:

Company Administrator, Administrator, or User. Unless you and we separately agree, we will provide LogOn Credentials only to your initial Company Administrator(s) who will (a) assign Log-On Credentials to other individuals and (b) designate those individuals as one of the following:
(1) A Company Administrator, who may perform all functions of your initial Company Administrator, (2) An Administrator, who may perform all functions of an Administrator including designating other Administrator(s) and User(s), or

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(3) A User, who may access the Services designated by a Company Administrator or an Administrator, as well as those Services in which we permit a User to self-enroll.

Each Company Administrator and Administrator has the authority to enroll you in additional Services. In addition to your use of Administration as described in this subsection, you may request that we assign Log-On Credentials to Users that you designate in writing to us. Your designation to us will specify the Services which the User is authorized to access in addition to those Services in which we permit a User to self-enroll.
ii. Bank administration. For the Bank administration option, there is one category of Authorized Agent:

Users. We will assign Log-On Credentials to each User you designate.

You will promptly revoke the Log-On Credentials of any Authorized Agent or User when that individual is no longer authorized to access the CEO portal. If you notify us in writing to revoke the Log-On Credentials of an Authorized Agent or User, we will have a reasonable time after receiving your written notification to revoke the individual’s access.
d. Terminating access. We may terminate or restrict any Authorized Agent’s access to any Service through the CEO portal if we determine such use:
i. Does not comply with any term applicable to the CEO portal, ii. Is not permitted by Applicable Law,
iii. Is not authorized by you or any third party whose authorization we believe is necessary, or iv. Should be denied for your or our protection (without us agreeing to or being required to make this determination in any circumstance).
e. Financial information. Financial market data, quotes, news, research, and other financial information developed by third parties and transmitted to us ("Financial Information") may be available to you at the CEO portal. The posting of any Financial Information or any other information or data at the CEO portal is not a recommendation by us of any particular Service or action. We do not guarantee the accuracy or completeness of any Financial Information, nor are we responsible for (i) the actions or omissions of the third parties developing or transmitting Financial Information or (ii) any decision you make or action you take by relying on any Financial Information. f. Miscellaneous. For purposes of this section 9 only, “Service” includes each service and product we or any of our affiliates offer that you access through the CEO portal. This section 9 will survive the termination of any Service or this Agreement.

10. Alerts.
a. Non-subscribed alerts. When you enroll in the CEO portal or other channels or Services, you consent to receiving by email or other delivery channels, servicing messages that we determine are important or urgent. You do not need to subscribe to receive such alerts and you do not pay additional service fees. b. Subscribed alerts. You may also enroll in fee-based alerts for applicable Services so that you can receive messages you subscribe to at the intervals and through delivery channels that you choose.

11. Liability and indemnification.
a. We are not obligated to honor, in whole or in part, any Transaction or other instruction that:
i. Exceeds the available balance in the Account, unless otherwise provided in the Service Documentation, ii. Does not comply with the Service Documentation or our applicable policies, procedures, or practices made available to you,
iii. We have reason to believe may not have been duly authorized, should not be honored for our or your protection, or involves funds subject to a hold, dispute, restriction, or legal process, or iv. Would possibly result in us not complying with Applicable Law. b. Neither we nor our software vendors make any express or implied representations or warranties with respect to the Services or any software used in connection with the Services, including any warranty as to the merchantability or fitness for a particular purpose, other than those expressly set forth in the Service Documentation.

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c. Any claim, action, or proceeding against us for losses or damages arising from a Service, must be brought within one year from the date of the act or omission, except as otherwise stated in the account agreement governing the Account.
d. We will have no liability for our failure to perform or delay in performing a Service if the failure or delay is due to circumstances beyond our reasonable control. If we determine that any funds transfer or communications network, Internet service provider, or other system used to provide a Service is unavailable, inaccessible, or otherwise unsuitable for use by you or us, we may, upon notice to you, suspend or discontinue the affected Service.
e. We will only be liable to you for actual damages incurred as a direct result of our failure to exercise reasonable care in providing the Services. Reasonable care requires only that we follow standards that do not vary unreasonably from the general standards followed by similarly situated banks. Our policies and procedures are general internal guidelines for our use and do not establish a higher standard of care for us than otherwise established under Applicable Law. A mere clerical error or an honest mistake will not be considered a failure by us to perform any of our obligations. Our liability to you will be limited to an amount not greater than 10 times our fees incurred in the calendar month immediately before the calendar month in which the loss or damages were incurred (or, if no fees were incurred in that month, our fees incurred in the month in which the losses or damages were incurred).
f. Except in the case of our negligence or intentional misconduct, you will indemnify and hold us, our directors, officers, employees and agents (“Representatives”) harmless from all losses or damages that arise out of:
i. The performance of a Service in compliance with the Service Documentation, including any warranty we are required to make to a third party in connection with a Service, ii. An act or omission of any of your agents, couriers, or Authorized Agents, and iii. If the Service includes a license or sublicense of any software, any use or distribution of the software by you or any person gaining access to the software through you that is inconsistent with the license or sublicense.

You will promptly provide us with written proof of loss, and notify us if you become aware of any third party claim related to a Service. You will cooperate fully (and at your own expense) with us in recovering a loss. If we reimburse you, we or our designee will be subrogated to all of your rights (i.e., we will be entitled to assert any legal rights you had relating to the claim).
g. Except as expressly provided otherwise in the Service Documentation, neither party nor its Representatives will be liable to the other party for:
i. Any special, consequential, incidental (including court costs and attorneys’ fees), indirect, or punitive losses or damages, or
ii. Business interruption, loss of profits, loss of business, loss of revenue, loss of goodwill, loss of opportunity, loss or injury to reputation, or loss of anticipated savings, whether any claim is based on contract or tort, or whether the likelihood of these losses or damages was known to the other party and regardless of the form of the claim or action.
h. When you send payments on behalf of your third party customers, you agree you are solely liable to your customers for any and all losses those customers may suffer. We exclude all and any liability of whatever nature (including those losses detailed in subsection g above) arising out of your relationship with your customer.

12. Governing law. The Service Documentation will be governed by: (a) U.S. federal law and (b) the law of (i) the U.S. state in which the office of Bank that maintains the Account is located or, if there is no such state or no account associated with such Service, (ii) the State of New York, without reference to its principles of conflicts of laws (“Governing Law”).

13. Arbitration agreement. Upon demand by you or us, any dispute or claim arising out of or relating to this Agreement, or the breach thereof, must be submitted to arbitration administered by the American Arbitration Association (“AAA”) under its Commercial Arbitration Rules, and must be heard before three arbitrators if the amount in dispute is U.S. $5,000,000 or more or its equivalent in any other currency, and before one arbitrator for amounts in dispute of less than U.S. $5,000,000 or its equivalent in any other currency. Arbitration will proceed in a location selected by AAA in

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the state of the applicable Governing Law, and if there is no such state, the place of arbitration must be New York, NY. The language of the arbitration must be English. Judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. This arbitration requirement does not limit the right of you or us to: (a) exercise self-help remedies including setoff or (b) obtain provisional or ancillary remedies such as injunctive relief or attachment, before, during or after the pendency of any arbitration proceeding. This exclusion does not constitute a waiver of the right or obligation of you or us to submit any dispute to arbitration hereunder, including those arising from the exercise of the actions detailed in (a) and (b) of this section.

14. Jurisdiction. For any proceedings regarding this Agreement (not subject to arbitration as provided in this Agreement), you hereby irrevocably submit to the jurisdiction of the courts of the Borough of Manhattan, New York City, in the State of New York or the federal courts located there and irrevocably agree that all claims in relating to the proceeding may be heard or determined in those courts.

15. Miscellaneous.
a. Severability. Any portion of the Service Documentation which is inconsistent with Applicable Law or Governing Law will be deemed modified and applied in a manner consistent therewith, and we will incur no liability to you as a result of the inconsistency or modification and application to any dispute regarding the Service Documentation.

If any portion or provision of the Service Documentation is deemed unenforceable, it will not affect the enforceability or validity of the remaining Service Documentation nor the enforceability or validity of that portion or provision under the law of any other jurisdiction.
b. Entire agreement. The Service Documentation (and any documents referred to therein):
i. Constitutes the entire agreement between you and us regarding the Services we provide for all Accounts opened with us, and
ii. Supersedes and extinguishes all prior agreements, understandings, representations and warranties of any nature (including requests for proposals and other sales material), whether oral or written, between you and us relating to any of our Services (including any other Master Agreement for Treasury Management Services, but excluding the current Commercial Account Agreement or Global Commercial Account Agreement, as applicable).
c. Electronic agreement. To facilitate execution, the Service Documentation may be executed by a party in the form of an “Electronic Record” (as defined in the Electronic Signatures in Global and National Commerce Act at 15 U.S.C. §7001 et seq. [“ESIGN Act”]). The Service Documentation may be executed in as many counterparts as may be required to reflect all parties’ approval, and all counterparts will collectively constitute a single agreement.

An “Electronic Signature” (as defined in the ESIGN Act) that can be authenticated will constitute an original and binding signature of a party. The fact that a document is in the form of an Electronic Record or is signed using an Electronic Signature will not, in and of itself, be grounds for invalidating such document. d. No waiver. Neither our failure nor any delay by us in exercising any right or remedy will be deemed to be a waiver of the right or remedy. No course of dealing or waiver of any right on one occasion will constitute a modification of the Service Documentation or be a waiver of that right on a subsequent occasion. e. Third party beneficiaries. Except as otherwise provided in the Service Documentation, no person or entity other than the parties to this Agreement will be deemed to be a third party beneficiary under the Service Documentation.
f. Financial condition. You will provide us promptly upon our request any existing financial statements or other information pertaining to your financial condition or any previously unprepared financial statements which we may require you to prepare and/or to be audited or reviewed by independent certified public accountants acceptable to us.
g. Your representations and warranties. You represent and warrant that: (i) you will not use any Service in a manner that would violate any Applicable Law by you or us; (ii) if you employ an agent in connection with its use of any Service, you represent and warrant to us that: (1) your governing body has duly authorized the agent; (2) you will exercise appropriate controls to ensure each authorized agent does not exceed the authority granted to it; and (3) you will preserve the confidentiality of the Log-On Credentials and immediately notify us if you become aware or suspect that any Log-On Credential may have been compromised. h. Use of names. You and we will not use each other’s name or refer to our relationship in any solicitation, marketing material, advertisement, news release, or other written, online or oral communication without specific prior written

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consent for each such use or release, except that we may use your name as a reference in service proposals if we obtain your prior written approval for such use.
i. Notices and communications. Either party may provide notice to the other party by mail, personal delivery, or electronic transmission.
i. You will notify us promptly in writing of any change in your name, Address, legal status, or any other changes relevant to the conduct of the Account or affecting your business relationship with us. ii. The term “Address” as used in this Agreement refers to a mailing or electronic address. iii. You will use the Address where your relationship manager or other manager is located and will address any notice to the attention of the manager.
iv. Each party will have a reasonable time after receipt of any notice to act on it. v. Any communication or notice to us from your agent about your use of a Service will be deemed to be a communication from you, and you authorize us to communicate with your agent about any such communication or Service.
vi. We are entitled to rely on any communication or notice from you that we believe in good faith was authorized by your authorized representative or Authorized Agent and, we will have no obligation to verify or authenticate an identity of a sender or signature on any notice or communication, except as expressly provided in the Service Documentation.

16. Survival. Sections 7, 9, 11 - 15 will survive termination of the Services or this Agreement.

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Appendix X
Applicable Branches or Subsidiaries of Bank

1. Wells Fargo Bank, N.A., UK Branch

2. Wells Fargo Bank, N.A., Canadian Branch

3. Wells Fargo Bank, National Association, Shanghai Branch

4. Wells Fargo Bank, National Association, Hong Kong Branch

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Wells Fargo Treasury Management Pricing
City of Morgan Hill
WF AFP
Code Code Service Description Charge Basis Price

BALANCE & COMPENSATION INFORMATION
IAMTH 000230 RECOUPMENT MONTHLY Deposit assessment 0.12750

GENERAL ACCOUNT SERVICES
22051 010000 ACCT MAINTENANCE Account 5.00000
CK021 010100 DEBITS POSTED Debit 0.07000
46106 010102 CEO BASIC BANKING - TRANSFER Transaction 0.00000 15007 010101 DESKTOP DEPOSIT-DEPOSIT CREDITED Credit 0.75000

LOCKBOX SERVICES
03302 050400 LBX TRANSMISSION BASE Lockbox 225.00000
36707 050500 LBX ONLINE DECISION BASE Lockbox 150.00000 03611 050000 LBX REMIT PROCESSED EXPRESS MAIL Remittance 2.50000 03740 050000 LBX REMIT PROCESSED CREDIT CARD Transaction 2.00000 36731 050530 LBX CORRESPONDENCE OR REJECTS Envelope 0.70000 36713 050500 LBX ONLINE DECISION EXCEPTIONS Occurrence 0.25000 03905 05011R LBX DOCUMENT SCANNED Remittance 0.05000
36791 050600 LBX 7 YEAR IMAGE ARCHIVE Image archived 0.02000 52035 050425 LBX IMAGE FILE IMPORT Image 0.05000
52076 05011R LBX WL BATCH IMAGE RETRIEVAL Image 0.06000 36745 050129 LBX VALUE ADDED KEYING Keystroke 0.01800
48200 050020 LBX WHOLETAIL BASE Lockbox 55.00000
48210 050100 LBX WT CHECKS Check 0.00000
48220 050122 LBX WT TOTAL PAYMENTS PROCESSED Coupon 0.15000 48307 059999 LBX WT STD ITEM PROCESSED NON SCAN Check 0.55000 48221 050122 LBX WT MULTI PAYMENT Coupon 0.15000
48222 050002 LBX WT PARTIAL PAYMENT Coupon 0.04000
48501 050401 LBX WT TRANSMISSION PER ITEM Remittance 0.01500

MERCHANT CARD SERVICES
41912 070223 PMT GATEWAY CREDIT CARD TRANS Transaction 0.00000 41910 070223 PMT GATEWAY MONTHLY BASIC Account 0.00000

DEPOSITORY SERVICES
08173 100100 CASH VAULT DEPOSIT Deposit 1.00000
CK197 100040 CASH ORDER FEE IN A WF BRANCH Transaction 7.00000 CK141 100040 CURRENCY FURNISHED BY WF BRANCH Dollar 0.00300 CK062 100416 CEO RETURN ITEM RETRIEVAL-IMAGE Transaction 4.00000 CK064 100416 CEO RETURN ITEM SERVICE MTHLY BASE Customer ID 0.00000 CK061 100400 RETURN ITEM - CHARGEBACK Transaction 8.00000 CK075 100402 RETURN ITEM REDEPOSITED Transaction 8.00000 Customer Price Report 1 of 3

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WF AFP
Code Code Service Description Charge Basis Price
70025 109999 SMART DECISION-ELEC CHECK ACH Check deposited 0.03000 70029 109999 SMART DECISION-ELEC CHECK ACH ONUS Check deposited 0.03000 22723 10001A BRANCH DEPOSIT POST VERIFY Deposit bag 2.25000 08290 100199 CASH VAULT CURRENCY/COIN DEPOSITED Dollar 0.00090 08071 100111 CASH VAULT DEP - NONSTD COIN BAG Coin bag 12.00000 08025 100015 MISCELLANEOUS CREDITS POSTED Transaction 1.00000 002 100225 DEPOSITED CHECK Check deposited 0.08000
706 100224 DESKTOP DEPOSIT-DEPOSITED ITEM Check deposited 0.04000 790 100230 ELECTRONIC DEPOSIT - DEP ADJUSTMENT Adjustment 17.00000 311 100225 WHOLESALE LOCKBOX - DEPOSITED CHECK Check deposited 0.10000

PAPER DISBURSEMENT SERVICES
DS191 150122 PAYEE VALIDATION STANDARD-ITEM Check paid 0.01000 22810 150500 WF CHK CASHED FOR NONACCT HOLDER Check cashed 0.00000 22030 150412 STOP PAYMENT - AUTO RENEWAL Stop payment 2.00000 12812 151352 CEO IMAGE VIEW < 90 DAYS - ITEM Image retrieved 1.00000 12816 151352 DESKTOP DEPOSIT IMAGES RETRIEVED Image 0.00000 22235 150240 OTC DEBIT BLOCK MONTHLY BASE Account 10.00000 12908 150310 POS PAY CHECKS WITH NO ISSUE RECORD Check 0.50000 12505 150222 POSITIVE PAY EXCEPTION CHECKS RETND Check returned 15.00000 12903 150310 POSITIVE PAY EXCEPTIONS - ITEM Exception 6.00000 12682 150120 POSITIVE PAY ONLY - ITEM Check issued 0.04000 12681 150030 POSITIVE PAY ONLY MONTHLY BASE Account 20.00000 MD091 150240 PYMT AUTH MAX CHECK MTHLY BASE Account 10.00000 12670 150410 STOP PAYMENT - ONLINE Stop payment 15.00000 22202 150100 DDA CHECKS PAID Check paid 0.07000
64104 151350 IFI MAINTENANCE PER PRODUCT Customer ID 100.00000 64101 151354 IFI PAID CHECKS - IMAGE Image 0.06000

PAPER DISBURSEMENT RECON SERVICES
34337 200201 CEO CHECK ISSUES-ITEM Check issued 0.20000 12687 209999 ARP AGED ISSUE RECORDS ON FILE-ITEM Record 0.01000

GENERAL ACH SERVICES
CK018 250201 ELECTRONIC CREDITS POSTED Credit 0.07000
34342 250400 ACH CEO RETURN SUBSCRIPTION - ITEM Item accessed 0.20000 Customer Price Report 2 of 3

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WF AFP
Code Code Service Description Charge Basis Price
34340 250400 ACH CEO RETURN SUBSCRIPTION-ACCOUNT ACH company ID 45.00000 ES280 250000 ACH MONTHLY BASE Subscription 25.00000
ES211 250102 ACH FUTURE DATED ITEM Transaction 0.04000
ES216 250102 ACH SAME DAY Transaction 1.50000
ES206 250120 ACH ORIGINATED - ADDENDA REC Addenda record 0.05000 ES349 250220 ACH RECEIVED ADDENDA Addenda record 0.00000 ES344 250202 ACH RECEIVED ITEM Transaction 0.10000
06504 250302 ACH RETURN ADMIN -MANUAL Return 4.00000
06502 250302 ACH RETURN ITEM-ELECTRONIC Return 6.50000
06503 250302 ACH RETURN ITEM-MANUAL Return 4.00000
06506 250312 ACH RETURN UNAUTHORIZED -MANUAL Return 4.00000 ES803 250500 ACH PAYMENTS ONLINE BATCH RELEASE Batch/file 5.00000 ES801 250501 ACH TRANSMISSION CHARGE Batch/file 5.00000 ES802 250501 ACH TRANSMISSION SPECIAL Batch/file 5.00000 ES237 250710 ACH FAX SERVICE Page 4.00000
34377 250000 ACH PAYMENTS BASE FEE Company ID 25.00000
ACH1D 250102 ACH PAYMENTS FUTURE DATED ITEM Transaction 0.03000 70033 250102 SMART DECISION-VAULT ACH Check deposited 0.03000 34333 251050 ACH CEO FRAUD FILTER REVIEW MO BASE Account 7.50000 34335 251053 ACH CEO FRAUD FILTER REVIEW - ITEM Transaction filtered 5.00000 34285 250703 CEO ACH HYP ITM DET INQ - PER ITEM Inquiry 1.50000

WIRE & OTHER FUNDS TRANSFER SERVICE
ES078 350300 WIRE IN DRAWDOWN RESPONSE-USA ACCT Message 10.00000 ES030 350300 WIRE IN TO USA ACCT-USA DOMESTIC Transfer 7.00000 ES191 350320 WIRE IN XBDR CORRESP BANK-USD/FX Transfer 7.00000 ES139 350100 WIRE OUT DOMESTIC CEO/API Transfer 8.00000

INFORMATION SERVICES
34123 40022Z CEO ALERTS SERVICE - EMAIL Email 0.25000
34121 400274 CEO INTRADAY REPORTING ITEMS RPTD Item reported 0.05000 34120 400055 CEO INTRADAY REPORTING SUBSCRIPTION Account 45.00000 34115 400271 CEO PREV DAY REPORTING ITEMS LOADED Item loaded 0.05000 34100 400052 CEO PREV DAY REPORTING SUBSCRIPTION Account 45.00000 27707 400340 CEO SEARCH Inquiry 1.00000
34212 400340 WIRE INQUIRY DETAIL PER ITEM-CEO Inquiry 3.50000 46100 40005Z CEO BASIC BANKING - MONTHLY BASE Company 20.00000 46102 40005Z CEO BASIC BANKING ADDL ACCT-MO BASE Account 10.00000 15017 400003 DESKTOP DEPOSIT MONTHLY BASE Account 25.00000 15003 400231 DESKTOP DEPOSIT REPORT PER ITEM Item reported 0.00000 Setup Charges
41918 070223 PMT GATEWAY SET UP Account 0.00000
34376 251120 ACH PAYMENTS SET UP FEE Setup 300.00000
A book transfer is a wire between two accounts on the Wells Fargo US account system initiated via CEO Wires or Payment Manager. The debit and credit accounts are in the same relationship and linked by the bank on the wire system
For additional service definitions, please contact your Treasury Management Sales Consultant or visit:
www.wellsfargo.com/accountanalysis
Customer Price Report 3 of 3

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4 CITY COUNCIL STAFF REPORT
MEETING DATE: April 5, 2023
PREPARED BY:

Michael Horta, Human Resources Director
APPROVED BY: City Manager

APPROVE FIFTH AMENDMENT TO AGREEMENT WITH INNOVATIVE
CLAIMS SOLUTIONS, INC.

RECOMMENDATION(S)
Authorize the City Manager to execute and administer a Fifth Amendment to Agreement with Innovative Claims Solutions, Inc. to provide third party claims administration for workers’ compensation extending the agreement for one additional year of service at annual amount of $35,755, for a new total contract amount of $276,735 over 8 years.

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

The current agreement with Innovative Claim Solutions (ICS) has been in effect since June 2016. During this time, ICS has administered several lengthy and complex workers’ compensation case settlements that resulted in City Council review and approval. ICS has expended significant resources and continues to educate and inform Human Resources, departmental workers’ compensation liaisons, and the City Attorney on the particular workers’ compensation cases, as well as the general aspects of workers’ compensation and case law. In early 2016, staff conducted a joint Request For Proposal (RFP) with the City of Gilroy for such services, through which ICS was selected as the most qualified firm to provide the services. ICS was also the lowest overall cost as a result of the RFP. ICS has offered to provide its services for an additional year with a slight increase to their current fees. Therefore, staff recommends that Council approve the Fifth Amendment to the Agreement, increasing the contract amount by $35,755 to a revised not to exceed amount of $276,735.

COMMUNITY ENGAGEMENT:

Inform
This report serves to inform the community of the recommended fifth amendment to the agreement.

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4 ALTERNATIVE ACTIONS:

The Council could choose not to approve the fifth amendment to the agreement with ICS and direct staff to conduct an RFP or consider a different third-party administrator for workers’ compensation in the interim.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The Council approved the City’s current agreement with ICS on May 18, 2016, as well as subsequent amendments.

FISCAL AND RESOURCE IMPACT:

The fifth amendment to the agreement would increase the compensation by $35,755 over one year. Costs for these services are budgeted and paid from the Workers’ Compensation Fund (770) (GL#:770.8220.42231).

CEQA (California Environmental Quality Act):

This is an administrative action that will not result in physical changes in the environment.

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1 FIFTH AMENDMENT TO AGREEMENT
INNOVATIVE CLAIMS SOLUTIONS, INC.

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

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

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

2. The CITY and CONSULTANT entered into that “Consultant Agreement” made as of Jun 14, 2016, for consultant services for a maximum compensation of Sixty-Nine Thousand Eighty and no/100 dollars ($69,080.00) (“CONSULTANT AGREEMENT”).

3. The CITY and CONSULTANT entered into a “First Amendment to Agreement” made as of June 7, 2018, under which the maximum compensation under the CONSULTANT AGREEMENT, as amended, was increased to One Hundred Three Thousand Four Hundred Sixty and no/100 dollars ($103,460.00) and the term was extended to June 30, 2019.

4. The CITY and CONSULTANT entered into a “Second Amendment to Agreement” made as of November 14, 2019, under which the maximum compensation under the CONSULTANT AGREEMENT, as amended, was increased to One Hundred Seventy-Two Thousand Two Hundred Twenty and no/100 dollars ($172,220.00) and the term was extended to June 30, 2021.

5. The CITY and CONSULTANT entered into a “Third Amendment to Agreement” made as of June 29, 2021, under which the maximum compensation under the CONSULTANT AGREEMENT, as amended was increased to Two Hundred Six Thousand Six Hundred and no/100 dollars ($206,600.00), and the term was extended to June 30, 2022.

6. The CITY and CONSULTANT entered into a “Fourth Amendment to Agreement” made as of May 6, 2022, under which the maximum compensation under the CONSULTANT AGREEMENT, as amended, was increased to Two Hundred Forty Thousand Nine Hundred-Eighty and no/100 dollars ($240,980.00) and the term was extended until June 30, 2023. The CONSULTANT AGREEMENT, and the First, Second, Third and Fourth Amendments thereto are attached as Exhibit “1” to this Agreement.

AGREEMENT
THE PARTIES MUTUALLY AGREE AS FOLLOWS:

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

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2 B. Paragraph 4.1 shall be amended and replaced in its entirety by the following:
"4.1. Amount. Compensation under this Agreement shall not exceed TWO HUNDRED SEVENTY-SIX THOUSAND SEVEN HUNDRED THIRTY-FIVE DOLLARS ($276,735.00) and shall be billed based on the rate and basis set forth in revised Exhibit B dated March 15, 2023.”

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

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

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

ATTEST: CITY OF MORGAN HILL
Michelle Bigelow, City Clerk Christina Turner, City Manager Date: Date:

APPROVED AS TO FORM:

Donald Larkin, City Attorney
INNOVATIVE CLAIMS SOLUTIONS, INC.

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
Pete Stephens CFO
3/21/2023
Dan Greco, VP Client Services
3/21/23

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REVISED EXHIBIT B
INNOVATIVE CLAIMS SOLUTIONS, INC.-FIFTH AMENDMENT TO AGREEMENENT March 15, 2023
City shall pay CONSULTANT:

An Annualized fee of $34,380 for the period of July 1, 2016-June 30, 2017.

An Annualized fee of $34,700 for the period of July 1, 2017-June 30, 2018.

An Annualized fee of $34,380 for the period of July 1, 2018-June 30, 2019.

An Annualized fee of $34,380 for the period of July 1, 2019-June 30, 2020.

An Annualized fee of $34,380 for the period of July 1, 2020-June 30, 2021.

An Annualized fee of $34,380 for the period of July 1, 2021-June 30, 2022.

An Annualized fee of $34,380 for the period of July 1, 2022-June 30, 2023.

An Annualized fee of $35,755 for the period of July 1, 2023-June 30, 2024.

The payments will be made in equal monthly installments of $2,979.58 for the current term July 1, 2023- June 30, 2024.

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DocuSign Envelope ID: 4A 1 F6989-87D4-4F1 D-AC6A-30D5E2738B66

FOURTH AMENDMENT TO AGREEMENT
INNOVATIVE CLAIMS SOLUTIONS, INC.

This FOURTH AMENDMENT TO AGREEMENT is entered into and becomes effective on 5/6/2022 (Effective Date), by THE CITY OF MORGAN HILL, a municipal corporation, ("CITY") and INNOVATIVE CLAIMS SOLUTIONS, INC., a California Corporation ("CONSUL TANT").

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

1. This Fourth Amendment to Agreement is entered into pursuant to the action of the Morgan Hill City Council taken on April , 1.Q_, 20�.

2. The CITY and CONSULTANT entered into that "Consultant Agreement" made as of June 14, 2016, for consultant services for a maximum compensation of Sixty-Nine Thousand Eighty and no/100 dollars ($69,080.00) ("CONSUL TANT AGREEMENT").

3. The CITY and CONSULTANT entered into a "First Amendment to Agreement" made as of June 7, 2018, under which the maximum compensation under the CONSULTANT AGREEMENT, as amended, was increased to One Hundred Three Thousand Four Hundred Sixty and no/100 dollars ($103,460.00).

5. The CITY and CONSULTANT entered into a "Third Amendment to Agreement" made as of June 29, 2021, under which the maximum compensation under the CONSULTANT AGREEMENT, as amended, was increased to Two Hundred Six Thousand Six Hundred and no/100 dollars ($206,600.00). The CONSULTANT AGREEMENT, and the First, Second and Third Amendments thereto are attached as Exhibit "1" to this Agreement.

AGREEMENT
THE PARTIES MUTUALLY AGREE AS FOLLOWS:

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

A. Paragraph 2 shall be amended and replaced in its entirety by the following:
"2. Term of Agreement. This Agreement shall be effective and cover services rendered from June 14, 2016, until June 30, 2023."
B. Paragraph 4.1 shall be amended and replaced in its entirety by the following:
"4.1. Amount. Compensation under this Agreement shall not exceed TWO HUNDRED FORTY THOUSAND NINE HUNDRED EIGHTY AND NO/100 DOLLARS ($240,980.00) and shall be billed based on the rate and basis set forth in revised Exhibit B dated March 28, 2022. 1 EXHIBIT 1

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DocuSign Envelope ID: 4A 1 F6989-87O4-4F1 D-AC6A-30O5E2738B66

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

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

ATTEST:

Date: 5/6/2022
APPROVED AS TO FORM:

Donald A. Larkin, City Attorney
DocuSigned by:

By: l>tAAl lAiii� ;5E6F0273EA2464 ...

Date: 5/5/2022
2 CITY OF MORGAN HILL
�DoouSigood by,
(Msfi!AA-ThvwY
�st1na=sJeg@'ttrner, City Manager
Date: 5/6/2022
INNOVATIVE CLAIMS SOLUTIONS, INC.

By:

Title: Dan Greco, VP of Client Services
Print Name and Title of Signer.

If Corporate: Chairman, President or
Vice President Dat�4tii
By:

Title: Pete Stephens, CFO
Print Name and Title of Signer.

If Corporate: Secretary, Assistant
Secretary, Chief Financial Officer or
Assistant Treasurer
Date: 4/4/22

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DocuSign Envelope ID: 4A 1 F6989-87O4-4F1 D-AC6A-30O5E2738B66

REVISED EXHIBIT B
INNOVATIVE CLAIMS SOLUTIONS, INC.-FOURTH AMENDMENT TO AGREEMENT MARCH 28, 2022
CITY shall pay CONSULTANT:

An annualized fee of $34,380 for the period of July 1, 2016-June 30, 2017 An annualized fee of $34,700 for the period of July 1, 2017-June 30, 2018 An annualized fee of $34,380 for the period of July 1, 2018-June 30, 2019 An annualized fee of $34,380 for the period of July 1, 2019-June 30, 2021 An annualized fee of $34,380 for the period of July 1, 2021-June 30, 2022; and An annualized fee of $34,380 for the period of July 1, 2022-June 30, 2023.

The payments will be made in equal monthly installments of $2,865.00 for the current term July 1, 2022- June 30, 2023.

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DocuSign Envelope ID: 4A 1 F6989-87D4-4F1 D-AC6A-30D5E2738B66 DocuSign Envelope ID: C6A64AF2-923F-48EF'-B101-EQ12466F0BA7 EXHIBIT 1

THIRD AMENDMENT TO AGREEMENT
INNOVATIVE CLAIMS SOLUTIONS, INC.

This THIRD AMENDMENT TO AGREEMENT is entered into and becomes effective on 6/29/202l (Effective Date), by THE CITY OF MORGAN HILL, a rnunicipal corporation, (''CITY") and .INNOVATIVE CLAIMS SOLUTIONS, INC., a California Corporation ("CONSULTANT").

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

1. This Third Amendment to Agreement is entered into pursuant to the action of the Morgan Hill City Council taken on June , �' 2021.

2. The CITY and CONSUL TANT entered into that 11Consultant Agreement" made as of June 14, 2016, for consultant services for a maximum compensation of Sixty-Nine Thousand Eighty and no/100 dollars ($69,080.00) ("CONSUL TANT AGREEMENT").

3. The. CITY and CONSULTANTentered into a "FirstAmendment to Agreement" made as of June 7, 2018, under which the maximum compensation under the CONSULTANT AGREEMENT, as amended, was increased to One Hundred Three Thousand Four Hundred Sixty and no/100 dollars ($103,460.00).

4. The CITY and CONSUL TANT entered into a "Second Amendment to Agreement" made as of November 14, 2019, under which the maximum compensation under the CONSULTANT AGREEMENT, as amended, was increased to One Hundred Seventy-Two Thousand Two Hundred Twenty and no/100 dollars ($172,220.00). The CONSUL TANT AGREEMENT, and the First, Second and Third Amendments thereto are attached as Exhibit u1" to this Agreement.

AGREEMENT
THE PARTIES MUTUALLY AGREE AS FOLLOWS:

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

A. Paragraph 2 shaO be amended and replaced in its entirety by the following:
"2. Terrn of Agreement. This Agreement shall be effective and cover services rendered from June 14, 2016, until June 30, 2022."

8. Rates as described in Exhibit B dated May 22, 2019, are continued in place through June 30, 2022.

C. Paragraph 5 shall be amended by addJng the following:
115.1 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 1

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DocuSign Envelope ID: 4A 1 F6989-87O4-4F1 D-AC6A-30D5E2738B66 DocuSign Envelope ID: C6A64AF2-923F-48EF-8101-,.E012466F0BA7 this Agreement, CITY will immediately notify CONSULT ANT 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." D. Paragraph 9 shall be amended and replaced in its entirety by the following to correct reference from SERVICE PROVIDER to CONSUL TANT:
"9. Compliance with Law.

9.1 CONSUL TANT and its, officem,, employees, agents, and subcontractors shall cornply with c;ill applicable laws, ordinances, administrative regulations, and permitting requirements in carrying out their obligations under this Agreement. CONSUL TANT and its officers, employees, agents, and �ubcontractors covenant there shall be no discrimination based upon race, color, creed, religion, gender, rnarital status, age, sexual orientation, national origin, mental disability, physical disability, medical conditioh, 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

AGREEME,NT, CONSULTANT AFFIRMS THAT IT HAS DISCLOSED ANY FINAL JUDGMENTS, DECISIONS OR ORDER$ FROM A COURT OR INVESTIGATORY GOVERNMENT AGENCY FINDING - IN THE FIVE (5) YEARS PRIOR TO EXECUTING THIS AGREEMENT - THAT CONSULTANT OR ITS SUBCONTRACTOR($) HAS VIOLATED ANY APPLICABLE WAGE AND HOUR LAWS. CONSUL TANT 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 trme during the term of this Agreement, a court or investigatory government agency isst-Jes a final Judgment, decision or ordet finding that CONSULTANT or an subcontractor it employs to perform work under this Agreement has violated any applicable wage and hour law, or CONSULT ANT learns •Of such a judgment, decision, or order that was not previously disclosed, CONSULTANT shall informthe City Attorney, no more than fifteen ( 15) days after the judgment, decision or order becomes fihal or of learning of the final judgment, decision or order. CONSUL TANT and its subcontractors shall promptly satisfy and comply with any such judgment, decision, or order, and shall provide the City Attorney with documentary evidence of compliance with the final judgment, decision, or order within five. (5} days of satisfying the fi'nal judgment, decision, or order. The City reserves the right to require CONSULTANT to enter into an 2

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Ill
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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 CONSULT ANT or any subcontractor it employs to perform work under this Agreement has been found in violation of any applicable wcige and hour law by a final judQment., decision or order of a court or governrnent agency, the City reserves the right towithhold 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 constittJtes 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 Relat(:}d to Wage Theft Prevention: Notice provided to the City Attorney as required underthis Section shall be addressed to: City Attorney, City of Morgan Hill, 17575 Peak Avenue, Morgan Hill, CA 95037. The Notjce 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." SigncJtures on the Next Page
3

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2. Conflicts. In the. event of a conflict between the terms ahd provisions of this Third Amendment to Agreement and the terms and provisions of the CONSULTANT AGREEMENT or any earner amendment, the terms of this Third Amendment to Agreement shall govern and control.

TWO SIGNATURES ARE REQUIRED FOR CORPORATIONS:
(1) CHAIRPERSON OF Tl-IE BOARD. PRESIDENT, OR VICI= PRE.SI DENT; AND (2) SECRETARY 1 ASSISTANT SECRETARY, CHIEF FINANCIAL OFFICER OR ASSIST ANT TREASURER.

ATTEST:
�lkMiligelow, City Clerk
Date: 6/2.9/202'1
APPROVED AS TO FORM:

Donald A. Larkin, City Attorney
45£8F0273EA2464 ...

Date: 6/24/202i
4 CITY OF MORGAN HILL
Date: 6/29/2021
By: �he�� ' . w�s fV--e VJ
Tffi.e: P r�sJ&�0t ___ $.- Clt,o
Date:

Print Name and Title of Signer.

If Corporate: Chairman, President or
Vice President
Print Name and Title of Signer.

If Corporate: Secretary, Assistant
Secretary, Chief Financial Officer or
Assistant Treasurer
{o (3/zo<-\
,.

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DocuSign Envelope ID: 4A 1 F6989-87D4-4F1 D-AC6A-30D5E2738B66 DocuSign Envelope ID: C6A64AF2-923F-48EF-B101-E012466F0BA7 EXHIBIT 1

SECOND AMENDMENT TO AGREEMENT
INNOVATIVE CLAIMS SOLUTIQNSi INC.

AMENDME.NT TO AGREEMENT is entered into and becomes effective on ---t--++-......,_...._._ _____ �--- (Effective. Date), by THE CITY OF MOR(3AN HILL. -� municipal · corporation, ") and INNOVATIVE CLAIMS SOLUTIONS! .INC .• a California Corp.oration f1CONSlJLTANT11 ).

RECITALS
The following recitals are a sl.lbstantive part of this Agreement:

1. This Second Amendment to Agreement is ent�red into p�rsuant tQ the actic;>n pf the Morgan Hill. City 'Council taken on •:� \,\ tJ B . 1tpi 20�

2. The CITY and CONSULT1'NTentet�d ih,to th.at,"Corisultant A!ilreement"_made as of June 14. 2016., for consultant services for a maximum con,pen�ation of ·SIXTY-NINE THOUSAND EIGHTY AND NO/100 DOLLARS ($69;080.00) C
UCONSUL TANT ,AGREEMENr).

3. The Cl)"Y and CONSULT ANT entered into a "First Am�ndment to Agreement" made as of June 7. 2018, urujer which the maxirnum compensation under the CONSUL TANT AGREEMENT, as amended, was increased to ONE HUNDRED 1HREE THOUSAND FOUR HUNDRED StXTY AND NO/100 DOLLARS ($103,460.00). The CONSULT ANT .AGREEMENT anct the First Amendment thereto ar� attached as Exhibit 111'' to tt1is Agreement

AGREEMENT
THE PARTIES MUTUALLY AGREE AS FOLl-,OW$:

1. Amendments: AU terms and conditions of the CONSUL TANT AGREEMENT. as amended, as attached as ExhibiJ "1," �h�II remain in full force and effect; ·except that the following amendments shall be made as sel'forth below:

A. Paragrap� 2 shall be amended and replaced in its entirety by the followlng:
"2. Term . of Agreement. This Agreement shall be f:3ffedive and cover services rendered from June 14, 2016. until June 30, 2021."
B. Effective July 1 1 2019, CONSULTANT'S billing rates are set forth in the revised Exhibit "B" dat�d May 22,
.
2019, approved by CITY and attached hereto and incarporated herein by this reference. Par�graph 4.1 shall be amended t:1nd replaced in its entirety by the following:
114.1. Amount. Compensation under this Agreement shall not exceed ONE HUNDRED SEVENTYTWO THOUSAND ,WO HUNDRED lWENTY AND NO/100 DOLLARS ($1721220.0Q) and shall b� biHed based on the rate and ba$1s set forth in Exhibit B. 1

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C. Paragraph 5 shall be am�nded and replaced in its entirety by the following:

S. Termination. CffYor CONSUL TANT .sha(l have the righttoterminate .this _Agreement, Without t:aui;e;, by giving thirty (30) d�ys• writter1 noUce, or less; urtd�r urgent �irc1.1rnstanc�. Upo.n such terrriinati9n, CONSULTANT shall suQmitto CITY an it�mized stat�ment Qfs�rviees 'P�rform�d for which 9ompen�ation bas not been paid .. CITY ITISY reqlJir� CONSUL TANTto complete, �rtain work product , ,or docliments and C(?NSULTANT shall deliver. to CITY all gocuments in its
posses$ion withq�t ��giJional Q9mpensation to. CON$UL TANT. The CITY Manager c,f CITY I$ -�uthprjzecj to terminat� this AGRf;EMENT, ·in whol� or in part, on behalf Qf CITY.

D. Paragraph 7.2.2 shalt be amended and teplaced in its entirety bytlle follov.ring:
7 �2,2 Workers .Cdmpehsation.

If the performance! of CQNSULTANrS work or service under 1his Agreement involves access to or activity on any prop�rty or premises owned or ocqypted bY the.CITY, inclu�fing, but npt .Umited to, CONSULTANTS- presence during $it& vi$its andmeetings, then insurer w�ives the riglit of SLJbrogatit>n· against the. City of Morgan Hill and tne CITY'a elected ot appointed officials, boards, agenciesi offi®ts, �gents:, empl9yees, ancl volunteers. 2

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DocuSign Envelope ID: 4A 1 F6989-87D4-4F1 D-AC6A-30D5E2738B66 DocuSign Envelope ID: C6A64AF2-923F-48EF-B101-E012466FOBA7

2. ,Conflicts_ In the event of a conflict between the terms and ptQvisi(ms ofthis Se.cond Amendment to Agreement and .the terms and pr<>visions of the CONSULTANT AGREEMENT or any earlier amendm�nt1 the terms of this Second Amendment to .Agreement shall govern .and control. 1WO SIGNATURES ARE REQUIRED FOR CORPORATIONS:
(1) Ct1AIRPERSON OF THE BOARD, PRESIDf=NT. OFfVICE PRESIDENT; AND (2) SECRETARY. ASSISTANT SECRETARY, CHIEF FINANCIAL QFFICER OR ASSISTANT TREASURER.

APPROVED AS TO FQRM:
rfiiald A. Larkin, �,� c� Attorney
Date: Jd -& --J 1
Christina J. Tu
Date:

IN ..

Print Name anc;t Title of Signer.

If Corporate: Chairman. President ot
Vice President

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DocuSign Envelope ID: 4A 1 F6989-87D4-4F1 D-AC6A-30D5E2738B66 DocuSign Envelope ID: C6A64AF2-923F-48EF-B101-E012466F0BA7 REVISED EXHlaJT B
INNOVATIVE Cl.AIMS SOU.)TIONS, me. -- S.ECOND AMENDMENT TO AGREt:MENT . MAY 221 :2019
City $hall pay CONSµLTANT:

1. An annualized Jee of $34;380 for the perioq of Juiy 1, ?019 - June: 30, 2020; and

2. an -annualized fee of$34,380 for the pe,tiod of July 1, 2020 """". Jµne �o, 2021.

The pc1yments wlll be mad� in equal monthly inst�11ments of $2,865.QQ� 4

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DocuSign Envelope ID: 4A 1 F6989-87D4-4F1 D-AC6A-30D5E2738866 DocuSign Envelope ID: C6A64AF2-923F-48EF-B101-E012466F0BA7 :j
EXHIBIT "1"

FIRST AMENDMENT TO AGREEMENT
INNOVATIV� cLAIMS SOLUTIONS, INC.

J
. Jhis_. Fl�ST !,\MEN.PMS.NT
.
·_' . TO AGREEM
..
·
.

ENT Is enteJ
.
.. Jd into af)d
·
.
. become$ effective
.
o
.
.
.
n.
. l'\ N.., J 1: 2o·l ·S .. (E�e Da.), by THE 91TY OF MOR(;AN Hilla a municl�I �PfP'?'�iory; ,("��J¥'') afld., 'INNOVATIVE .CLAIMS SOLUTIONS, INC., a .Oalifomia corporation ("C_QNSUL T -'NTII)�
!REelTALS
The following recitals are a substanthie part of this Agreement:

1. This First Amendment to Agtee�nt is en�r@d intc> pu.rsuaot to the 1:1ction of the Mo113ao Hill CftYCpuncil�kenon May 18, 2016.

2. The CITY and CONSULTANT entered into that 11Consultant Agreement' made as of June

14. 2016, {Qr. consultant BeNices for a maximum tQmpensation of Slx;TY-NINE THOUSAND EIGHTY AND NO/100 DOLLARS ($69,080.00) ("CONSULTANT AGREEMENT). The CQNSULTANT AGREEMENT is attach.ed es Exhibit 111
»
.to this �reement.

AGREEMENT
THE 'PARTIES MUTUALl Y AGREE AS FOLLOWS;

1. .Amendmenis: AH. �rms and .condtti01l$ of the CONSULTANT AGREEMENT, as amended, a$ attached as Exhibit "1/' shall. remain in full force end effect; ·except that the follovviog e,1mendments shall be made .as eel fQtth below:

A. Paraelliph ·2 shall be amended and replace� in its entirety by the following:
1 '2. Terin ,of Agreement. This Agreernent_shall be eff�ve and cover services rendered from June 14,.2016, untll �une 30. 2019."
B. Paragraph 4.1· sh11II be amended and replaced rn �s entirety by the following:
ll4.1. Amount Compensation Li11derthis Agreement shall not exceed ONEHUNDREO THREE THOUSAND FOUR HUNDRED SIXTY AND NO/100 DOLLARS
($103,460.00) and $hall be billed based on the rate and basis set forth m the revised Exhibit B dated Ma,y 17. 2018, llttach� hereto ·and incorporated .hereio by :this refere�ce."
C. PE!!ragraph. 9 sh�U be amended and replaced in � entirety by the follQWing:
"9. •'Co�plia�ce .with law�

9.1 SERVICE PRQVIDeR and its officem, employees. agen�1 -and subcontractors shart comply with all appflcable laws. ordinances� 'admlrilstrathle regulations, and permitting .requirements jn carrying out their obllga,tlons ullder. this Agreement, SERVICE 'PRO\I.IDl:R a.nd its officers. emptc,vees. aaents. and

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OocuSign Envelope ID: 4A 1F6989-8704-4F10-AC6A-3005E2738B66 OocuSign Envelope ID: C6A64AF2-Q23F-48EF-B101-E012466F0BA7 s1Jbcontractors coven�t tllere sh,ttbe no discriminaµori based up_on race, color, ·cr�J'ed; ,religlonj Q�f.ld�r,
.
;ma�al st,atu1,, -�;�. �e�1;1ai c;,tJ�ijtaticm.- �onaJ . origin, )ner.lfal 'qi$ability, Ph�iQSI (!i�a�mty. 11\t?dical c!).m;liticm, c,r,_aQc�sb"Y.- in any a,p'livity ,Pl.11$VJmt to this:Agreameot. · · · ·
· · -- · · ·· · · · -
,.9�.
_
. Without 1irnitii;!g the .. PfDvisipns
.
. of Secti.b.tl fo_; i ib.ove. j3Q.h wor��r
per.formfng :wo� _ unge(th1! -�gteement $hall ;be: :pal.ti .at � _r��: npt J�ss _ lh�n ihe ·prevailirjg.wa,ge :as definep in ·sections 1771 �nd-'774 -t>fJhe: L:abQ_r-Code� T:he· ·pteyailihg wag� �aiesate a�ailable ;
.QnJin.e--� httpi/lWWW;dir.:ea;govJcilsr.·��Vt91:
:pRQVIPl:R st1a11-��t a C9PY pf.th�. appli��le P,rev�il.ing rat,s �t:the·\!\'o�ite.

P�rsuant- to Labor COde ·:Sec:tjon 1775, SEijVICE PROVIDER. and .any $1Jbcoflkactor sbaD forfeit to CITY au p$nalty up·to two hundred doHars-($200.00) for each.
_
. (;alendar day I or
·portion thereof, foi' each . worker paid
.
. less than the
·appllq
able_ pr¢O�tling wage r�t�. SERVIC.E PROVID�R shalJ�ls'o pay·each.worKer :·the difference,betw��b the ijpplic'able prevaUiqgwatfe rat� �nd tt,e .EclrTIQ\j_nt, ��(U.�lly S$1d to that worker. · ·
·
9:3 DIR Re.gistraiion. Cftv·will not accepla ,Bid ProPQs.al.frQm or� into a coritra.9.l. \NiUl ·a SERVICE PROVIDER, Wftho� first receiving pr()of to -� satisfaction of CITY that
.

SERVIC� PROVIDER and
_
_ its sUt)cohtractors are
r�istered with th� ¢atfforni� -pepartment of Industrial �elatlOli$'tb p�ttorm public wo.r� unde� Lat>or:CQd$ Se�tlQh :1725;5, subject to H111ited le9,a1 -e��ptic:ms. Uode.r Lat,or Code ��ctipn 1771.4, this A.Qr�ent is subject to compHance monltoring _ anti enforcement' by the Califomic1 Departmenl of Industrial Relations.

9.4 Corraplianpt? w1th Wage .and I-lour J-�'1,t'�� SER\/ICE PROVJPE_ft a_ndJiny sµbcontr�ort
temph�ys to co�pl�eworR ta_r,der thls,"9reement, shall comply with ;al! -appli�b.!e :fed.eral. ��le �rid local wage ·�nd hour laws. AppHcable laws m,v Include., but .are no.t limi�ed to, . th� Fet;ler�J Fajr l,.abpr Stand�rA� Act a.net thf; California Labor Code! .

Flnat Ju�gmeots,, o��i�iQfls, and. Order$� Por Jiui'post$ of thi� Seclioni a "final jµ(jgment., decislen. or qrder" _ refeJ'i to, one -for Wfllch 13111 ,app�als· have �een �Xll�i.Jsted .or ,th� fim� fo am:>�al ha� expired. Reley�n� inveatigatoty·govetrurient agijnci�� includ�: -�e. f¢<1.eral Dt,pa,rtmentofLabor, tie Califqrnia E>iVls1on of Labor standard$ Eofprcerne11t. or any other gQvemrnental entity 'Or divl$i.t>n tasked wi1h the in�gatjon and enfotC$m�ntQf wage and hour l•s� . .

Prior JUC$gm�n.ts. aga,lnst SE;RVlqE_ PROVIDER a�d/or Its Subcdn_tractors: .BY SIGNiij� _
· THIS AGREEM�N'f i SER�ICE ,PRQVH�Ef{ AFFIR�.S Tl:i�T IT tfA� DISCLOSED ANY FINAL ,JUDGMENTS, DECISIONS OR QRDERS FROM � COURT OR· INVESTIGATORY GOVERNMENT AGENCY FINDING - IN TI-IE F:WE(5). V�S PRIOR TO l:XECOTING THIS AGREEfy'IENT"�THATSERY{QE PROVIDER ·OR ITS SUBCONTRACTOR(S)-HAS·VIOLATED ANY APPLICABLE WAGE,ANDHOUR LAWS .. $ERVJCE PROVIDl;R F\;JRTHER AFFiRMS THAT iT OR ITS SUBCONTRACTOR(S) HAS :SATISFIED AND COMPLIED WITH - OR HAS REACtiED AGREEMENTWfTH THE OOY REGAROINGTHE·MANNER IN WHICH ff WILL SATISFY - ANY SUCH JUDGMENTS. OECl�IONS OR ORDERS. . .
2

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DocuSign Envelope ID: 4A 1 F6989-87D4-4F1 D-AC6A-30D5E2738B66 DocuSign Envelope ID: C6A64AF2-923F-48EF-B101--E012466F0BA7 .Judgment� oqJeci�iQnS;QLJ_Mg term qf QorlJ.(Eict: _If ah1nY time durinS the 'term of ':!�is, __ Agre.��tj!, �:a :c9qrt ·-�� :inv��t!gatori'_ ;oy.�mrn�!ll _ ��e.ncy, ,is!3U�S' 8' final
Judgment, .d�1s10n:
_
or "01'.d�,
_
. finQlog . th�t
_
SER.VICI; PRQVIDER �r _ ,�tiY
·subdtmti"actor if�f1'.iploy�_)o" perf�rrn W�: µ�·q�r.flli� ��r:�E;lm_ent h_as�(ila\et� �ny, -�ppli,cable-�g�:and·hoilr'lijW, ·of�ERVIGE: P�OVIOl:R �ea_rn� ,Of k$uclj;a judgment i
-
��ciSJop� or"'?r��r .�tit ��s
_
'�ot
_
�!!=1Y.l9µs1y. �l��,o.�ed.;�E�VJ�� PRPY(9.�� -��"
:fnfQrm·the 'tnty Atlt\m�yj ·no� mpre. thaft• frfte.en (1�)' d�ys.·aft�r theJµdgment, !deci$16n'·OJ )�Tel� becomes•flnijl pt of. learning.·of the final judgment. :decision or ·<>:r�e:r. §�RY.IOI;·
.

PRqy1e>.�R
_
·;ind tts subcontractors shail )>ro.mptly �a�
isfit".an(:I.
-�mplY, -wittr .a,w .r:1uqh Ju�i:nept, d.eclsl�n •. ot
_
ordetr,-snd sball provide the.:Cilt
��rnf/ity· wit�.
· 9ocu.rn�n�.l"Y: .�V.i_�:�rn�� Q.f .c.�mpliari�_ With t�-� '.fi11al juc;fgment, :d�plsipn QT ,c;,rd�r Wi\t\ift: five
.
,(5) ·day$ ·of ,.aUS,f.ying .Jb�. fiti:at .j0,ggmeDt;• d,eci�lon �r:
order� GiTY (esf1.rves the rtghtto 'req�Jre :s_�R\lle� PROVIPEffto et'}ier h:ito an agreement with. CITY regarding the manner in which shy sucti final jlldgment. decision. or orderwm be·.satisfiect
Ci��
.

Riaht rto WithhQld pqyrtlent:
.
,.Wfter� SERVICE
.
· PRQVI_OER (>r �"Y
,sU:bco,
ntrictor ;.t ernptqys t� �om, wQtk pnderthis-�green,ent has 9�en f.�und ln violation of any applieaple yv_age,and hour law l)y·ij ,flnalju�gment1,.�is"ion or order of a cour{or gavernment agenqy; blTY r�se,y� �� r�gl)t to wiUibotd paytnent to SERVICE PRQ\11.DE�)mtil �uch juclgment. �e��i_Q11,or"r;trd�1 ha�:f;>�n ·satis.fied ih full. .. -
Material · Breach: Failure to comply with any part of this Section constitutes a n'i'at�I llr�ach of_ 1his Agreement. Such breach may serve as a basis for Im.mediate te11T1ination of this .Agr!:)ement �n.dlor any Qther remedies available u�der thls �r�C:mlent and/or law;
Notice to
_
e,ty Related to Wage Theft Prevention:
. Notice prollid� to the . City
Attproey .$$·required un�r this Sectior, sh�U be addressed Jo: City Attorney, City ofM9tgan Hill, 17575 Peak Aven�. Morgan Hill; CA.95037. T� Notic;e provisions of this Secticm are se.parate .from any. other• notice pro�isions in this Agreement and, a�rdinglyj only notice provideti t<> lh$ above J(ddr�s 6Btisfies the· noti.ce r��lre,men� 10 this $ection."
{Signatures oh Next Page]
3

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DocuSign Envelope ID: 4A 1 F6989-87D4-4F1 D-AC6A-30D5E2738B66 DocuSign Envelope ID: C6A64AF2�923F-48EF-Bto1-E012466F0BA7

2. ,Conffiim. ,, . tn the �· of � conflict betWsan itle terms and pro�s of th� First Amend,rneono AatlBltmfflt an� the terms atid provisfor-is oflhe CONSULTANT, the Jerms of this FirslA,nend,nenf to Agreem@!lt eh$lrgovem a� �
TI/VO SIGNATURES ARE REQUIRED FOR CORPORAT.ISNS:
(1) CHAIRPERSON _OF THE BOARD_. PRESID�NT. PR VICI: PRESIPENT; � (2) SECRETARY� ASSISTANT SECR�MY, CfllEF FINANCIA._ OFFICER QR ASSISTANT TREASURER.

Qate:
4 Prin_t Na?ime·and.Trtle·of Slgn�t.

If Corporate: Secretary, -Assist&nt
·Secretaryi Chief Ffnaneial Officer or
Assistant Tmasurer
. S' -2( �'2.-0 If'-

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DocuSign Envelope ID: 4A 1 F6989-87D4-4F1 D-AC6A-30D5E2738B66 DocuSign Envelope ID: C6A64AF2-923F-48EF-B101-E012466F0BA7

REVISED EXHIBIT-B
INNOVATIVE CLAIMS SOLI.JTIONS, INC. - FIRST AMEN,PMENT TO AGR�MJaNT MAY 17, 2018
City shan pay CON.$µLTANT an ,nnµal� fee on34,380 for the peri� of July 1, 2"Q1B - June 30, 2D19, and payrnents wm be m�dfl in equal monthly installment$ oi $2,88s�oo. 5

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DocuSign Envelope ID: 4A 1 F6989-87D4-4F1 D-AC6A-30D5E2738B66 DocuSign Envelope ID: C6A64AF2-923F-48EF-B101-E012466F0BA7 .EXHIBIT "l"
CONSULTANT MREEWIEN'f
Bnnovmt&vs Cli!lme Bolufltmm, Inc.
.

THl,S A�REEIVJ��T l� ,ante� bito ,-a11Q ·!mq,m� effectiv� <>n ... \J,JJ4lf �p .
.
•(Etredive ,Date}�
1:Jy and.
between �� C,ITY OF.,M()RG� �tLL :e :m,ui)iclpa� 9PIJ?D�tiqn, '(''�ITY'!), an�Jt1hqva�v.e ttalrri� :soloti�ns. lne�; a CalifQln�. corpo�on ,(!'QQNSlJLTANir') 'herel_n�er t�,8,fM� t9 c�H�il1Jv$Jy :� -�Parties/ in
r;o�l.d.eraU�n �:t.h�·pr�r.n.t�e.E;_ e.�1he njµtuE!I c;ovetumts 'c,onJatn�d In tMs Agreem�rd, the Peri�· agree·u ronows:

1. .$1llf
A�t��ri
.
�v .
. This :Ag�eement la ientersd Into puf8Uant to action of the Morgan HUI Ctly �ncH taken QO. -�l\ll·t� .
.
.. , . J 'b i 2P_lli.

2. ...
7reih1 of Agreement This Agreement ehatf cover� ttindered .titJm. the Effimive Date of this :Agreemen� · ijntjf Jµhe • �o. ··2g1a _ at which �icne ·. CONSUL TAN:P.

S services Gliall be compi•�ed. The City
l\ll�riagetf .is c1u\ij9rjz�d tp E3xl�nd the t�l)n of JtiJ� �9.reement fora maxtmum period of one ye�r. Any '3Liah ·��m�ion tit.1�11 be in wriJing al)d �Jgned by bolts Pa,ti� to this A$free,nent

3. Scope cf Service. The servfces �o be �rmed by CONSULTANT Ghallbs workeril .compensation clalms admmistrallD.n t1s further �ea.cribed in 1:Kln�Jt.A.

4. compensatio�. CONSULTANT lhall.be compermated ea foffows:

4.1. �. _$69,Q�o.�o. Tpt�I c9mpens�jiqn_ tp t,:ONS_\JLTANT ur1�$f this ·J:\glilem ent dudng lts
·1n1�1�! :te� .,etJorth i� �,�i�n �-ab�ve s.fi�11 �ot -�Xf�� -�l�_,nl�e •�o.us�11� ·e,!ilhty �PJJ1in; and shall be.�Jtfed based �n the �ie 11nd ��1s,.,�t f�Jjh In e,��b.!t B. If th�.Ctty_�ari�g�r exte"ds the term of thls Agreement for up to one-year Wl$Uant to the provisions of Section 2 11bove, the City ��ger a;h��I ��- '11� -��hofity lQ i_ncr�a,e the ma)(imum c.ompen��n �ll�Wed. to be p�id · to CON�l)�TANT �u,rin,e. tba� e,gen�ed · Jerrn perio�, so ·10n9· a� City Council hcle ·approp,�ated stiffjclertt fl:I.Q�S th�for, \he._ P�f!les_..mutu1Uy agree to such ernount In. a writing .signed, by both P�les to this AgrMment 111\d provid� further ttu\t In no ewmt ehaU · suph ��?Cimum oo!ilpijn&afl01,1 allowsd during the· extended ·tenn. �- �ftoeed en acklltional five . p�rcent (5%) · ebi;,v.e -the. compeneaUon aUQWBd. to. be paid to CONSULTANT during the i_nltlal t�® Qf this Ag�em.e11t�

4.2. Blllir,g •. CpNSULT� �I PJ'OVid& CITY�� a m�n\hly invoice contalni"g �he, dated, d-�lled,, an� ·ite,nJzed c(escriptiqna,of �It servl�s·11,�ifofffl�d ati�.e�p,e�se� i�c�rred {if jiich e�nses are relmbu�able plirauant to �hJblt B) by :�P.NS!l}LT�NT. ·�y )t�t� �harger;t sliaU be prorated Where se,vlces :�re lnJerrupted or-· n,p1 :prowled for any rate -�rlod lfor •�emplei ijny m,�nthly. �te cheme ·sb�µt�. t,tf ·pro,:at�d when $�,V(ces were . tnteirupted· or p�v�e�ffor on,y pert of tlie 111otiif:a). For·eentlceB bUled on an hourly tale, ,the mlnlmifm untt .of bllled time ihmll nm exceed one tenth • of one• ho'-'r. CITV ehall pay fGr HNicea Md �ekP.en!l�s (If so ptovided tri i.Jdldbtt'-B) up to ttte . Urriit � compe�s-ian seJ (onh :above. tilat in the CITY& jud.gment were· necessary· and reasonable. Seivices for '.,ivo* pe,tonnad and e>epanses ln®rriad In exceas·of the total compensation eel forth in paragraph 4� 1 above eball be at np coat to CITY.
5�
. Termination. ·crrv or QQNSULTANT &hall l\aVe the
.
r•ght to terrrunate this Agreenjem. wHhout
oeuae; b}' giving ttiirty (SO) days' written notice ot less .under urgenhlfcUmstances. Up�n euQh terminatipn.

CONSUL TANT ehaU .eu�mit to CIT'( an itemized stat,ment of ·aerv� �or,ned for ,mich comp.,..�Uon has not been paid. crrv rnay require CONtiULTANT to comptet� certain work p��uct �r ckJ.cume1;1t& and QONSULTANT shaU. detive.r to CITV'afl document& in it;· Polli&eion with.out additional compensation to 1

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DocuSign Envelope ID: 4A 1 F6989-87D4-4F1 D-AC6A-30D5E2738B66 DocuSign Envelope ID: C6A64AF2-923F-48EF�B1 Q1,.E012466F0BA7 \
l
I
!
CONSULTANT� The CITV Manager of CITY ls auflio)'i&ed to terminate ffi.ia AQ"8:MENT on ·�half of CITY.
-·�..
.
. :P.en-ormance of Work. CONSUqANt �rese�\e thaf {l ts -�l@f�ea bY -virtue .,f �xp�rleri:ce� .. trali}lflgi ,e�b
.oati�n·. :and: e>3>ertfse :«, acc�mp1it(h Jtl¥� seN.ip¢s. Se,vJ��- �c1.U .!J.e p�rl'Qrm.ed by J�PNS,U�TANT in .�cord.i:i�.'w.ilb prof�Jonal •p�gtlce� t.o a mi:jn�t �?ry?l�te,:Jt -�Uh � ':(ev�J <if care� -#>��t�n�ff�n�. �II· -�_,cer�� y.·q�aHJJ�� rnemb�rs'.·or :�e �NSPlT.��- prqf�sign. -�Y �il��'Y. .of c:pm,p.leted v,rQl'J(; C()�S�LTANT �es .th.al_ tqe WQrk. cpnf.�m:i�:.t�:qhercagµlretnents·of!thl_�,�.._ent arid ·a11· epp1icabte Jederat,. $late and -local �: ·Jf ·Qo,NBVn�!'!T. g�lrir,'s to - leave: .c,r .irt�re �ny of c9NS�LTANT's equJpment at a CllY �e �!'lie CO�flyq�NHtP��n.n)��·�o* ·or�rvice .pursua�t to th1s Agr'=le�ent; CONS�LTANT wlll first obtam the·consem of C.ITY'-$ _Qj,ty M.a��ger, or his defeg�te, to do so. ��a any such st.9r�a�: 8ha11 P®Ur etnly Ir) th@ manner an�· to,caUon all9wed by �ucfl CIT.V offici�l and entir�ly et CON$)JqANT�s sole risk. ·-- · · ·

7. Insurance Regui.-en1ents. ·pol'iSULTAAT shall procure an_d . .
proYtde proof of the Insurance
coverage re9Liired l?Y this, �e�on iii t�� fotm of �rtifi�B. end end�emE;!nt�.;The �ul_red (�ur,nce nJUst cov�r .the· actMtie� of CON�ULT�NT, JncJu�i,�Q :�, (S®l:91'.t��ors. rel�tirt,O: to .. or arising ftom 'th� performance of any work· or ,servJce und� Jots f\gr�,em�mj �nd n,µst r�mJ1tr, iil JuU•fC>t� enct effect at all Um$� ·during _th� p�pd,.:�vered by this Agreement .. ·Tfl� c:ov�r�g�� m.@Y ��- .�r��Jl9� .unde'r Q · t;jlngte ·pollov for the fv,tll llm,lm · requlred . or, 'by e c.«>mb1.na\ion. • cf .. upderly(qu JJOl,lcles wlih the. ·b�tanGe provided � ,excem� or �'umb,et�•• pollc1ea, provided 8;t@ -�_uch .. p�,iCV ·compiles wi� the requirement$ seUotlh her�li:I.
, -CDNS\JLTA� fp�er .µ�ile,r�ten� lh,t the QITV re.se,rvea the right to. modify the Insurance u�qulreme�ts setf foVih h�i:�il), witt) thirty :(�D) d�ys' :noti�� provided,· to CONSULTANT. at any ,me a� deemed neceNary to protect' tt.e lrileff:'sts of the CITY.

7.1. . Insurance Ty9es:and:Am0unts.

7.1.1. Corri,uerciat GeneraLLiability (CGUt CONSULTANT $hall maintain CGL agaihsl claims and liabfflti•s for p�rson.� injuty. �f;la1h, .or . ;pr9p_�rty 9�tnaoe proy4tiQg . pr$?t1on .in. t�e mlrumunf an.oµnJ pf. (I) on� wll_lJon cJQH�t� ·(�1.000.000.J)Q) for bodily iiijµ,:y or d�f3.th' to any on� per$Qn .for any. oril� ·�·9s;iaent or occu,rrenc.e and at teast on� rnllll�n doUe� ($1,000aOOO.QD) f� P�WertY .dam�ge, 'or (iO ]he ma;dmµm �mount of au'ch Insurance evallable to .CONSU.� TANT under CON�UL TAN'rs ccimbine� tnaurano:a por101� (lncluamg any e� _,r 0umbrell�' poficlea), whlbhever ie greater.

7.1.2. Automobile .l
ial>Uity. CONSULTANT. slJBJI. maintain Automoblle UmblHtY. ,:ovenng all owned, nan-owned end hired. �UlQl'.l'IQ?,Jl�. (ff C�NSUL".fANT does ·not .own automoblfes, theti C()N�ULTANT 1;hall main�lri H�on-:�ned A.utQrnoblle Llabpity) · against ·�alms ehd llabllltles for, p�reo.- ihjµry. ·_deatb.· ¢ pmp&rtY,. qQmf#ge .pro\(iair,ig p,r-9t�cti�11 in �-mlntn:aum amount of: .. (I) ooe million dollaq; ($1 ;000.000.00) for·bQdi!y in]ury-or deat�:tc;, a�y on� �re�n•fqr ariy�rie accld.erit or oµcur,ence and ·at leeet one mlUion dollars ($1;10_00,000.00) for PR?&>,rty �emage, or (Ii} ·the mmdmum amount of such insurance avallable . to .CONSULTANT under ·CONSULTANT's �.orrit;,lned ln.suranot) pollcles :(inciudlng .any �BB or nu_rnbrel�11 ·pollQies), w�phavsr is are$1er.

7.1.3. Wotkets; ,compensation 'Insurance and Employer's Liatiilitv. CONSULTANT shall marntatn WornQ .c;ompensation �ve�e. as rettulrecr by •• 1n the minimum amount of: (i) one MlHlon daUara ($1.0D0,000�00) for mpy one accldent or occunence. or (ii) the msodrnum mmount of 8UCh insurance mvailable to CONSIJLTAN:T undar CONSULTAN're combined Insurance poflQli)S (lncturltne al\y •cese or aum1Jrellm11 2

Page 74 of 125 ends

DocuSign Envelope ID: 4A 1 F6989-87D4-4F1 D-AC6A-30D5E2738B66 DocuSign Envelope ID: C6A64AF2-923F-48EF-B101-E0t2466F0BA7 pol�).
provide
whiche'1$r ls_gsuter. If CONSQL TANT js self-1.neurecl, CONEIULTANT eJ,alB It& C�ltlftcatt oj Permlalon to S.tf•lrma,., duly authotiztd by tht Department or •meu�trifll Relati�.
7�1.4 .. Poll
i
iUon· t.snvlronrilenial) .�iablfilY- :If •the perrormance of CQNSULTANT'-S work c,r :�¢.i,vic{:r. ung�r · 1h18 .
. j��6J�n\ lnv�l,V.�:
. h�rc,_ous ·!flllterlals, ct1ptai;nlnafed :sQfl
�l�p,9�1,-�rfgl�r • ris� Qf-.�9.Qkf11mtaf:refe�.s�1�Huet.Qi1_, ·ooeml,c�ls or-oth,er lQ�lcgases or bmirdou1 materials, CONSULTANT s�a11 proe,ure and _nialntato Pofh1UQn UabJfity covering the �i>r's 1.i.-�ilily fot ·b�dl!y 1oJ�rY, · pr-Qperty da�a_ge-and ,nvlronmerital da,mage reawting from polluUon ·end related cleanup. C08ll arislrig oui. of the � or eervtces te, be'pe�ed undarthls Agl'88ffl8nt. Coverage qU tJe provided for bQlh work pel'formed on�. as well as .�ring .fh&. trans� Cf h�ous matarfafs. SUth �rage ebaU ·t:>� in the mfnlm1p1fam� of: (I) pn_EJ : mUUoo �.auare ·($.1 ;e.00,000.00) for any. one acoi¢tent or occurrence; pr. (II)· Jhi· maximum amoimt Df ·$µ� ·insurance avaDab!e to · CONSULTANT under .CQ_NSULTAtfre combi� lnsurane>a .. poUcles (fncludJr,g any excess (Ir 11
umbretJtf po.ffcle&). whichever Is�-

7.1.5. P.rofessio�al Uabmt�.

7.Ui.1. If the perfonnar,ce of_ .CONSULTANT'e work or �rvlce Under th16 Agreement in:.,Ql)res pr�n'il 11ritt/cr �cw serviees (elCamp!es lflclude, but.me not Hmited to, architect&. engl� ••. fand eurvayom; and. appra�) •. CONSUL TANT ai.11 ptOCl.llJ_ end mainifdn either �- cfaifmi inadE) or oqcurrense� ErYOnJ •� Omission -li�bnlb/. tnsuraJ'ce In tbs ,nfnhnurra amount of: .(i) one munon dollars ($1,09q.oo;;,�oo) �cJl clAlrn• . ar_. (ii)· Ina ·mexi,uum aimount of .
. sµch irururanpe ·available.
·to
CONSULTANT una�r CONSULTANT'S combined lnsµrance :_poli• �nc:ludirig any . ��.ss. pr "'umbr�U�" f?oJi��), whJcb,�)fer · Is g·reater •. . Furth1ar. if CONSULT.ANT'
�li,tams a clalms--matle P9��gy; CONSULTANT shan provld,, written eviderace of sueh
�intu".ance � ihe CITY .\'or et met five (5) �ars after the ®IDJ>latlon of •WOl'k -underthte.�ruement 7� 1 .5.2. If .
. the performanca of CONSULTANT'e . wort( _ or semce under Ibis Agr�nt relates to Information T�olqgy or n$ted Qf\lic. (examples include, con$Ultan$),
but � not Dmlted
®NSUl:.TANT
to �p�
shall
programmers
plDC)Be · and ma•tn a
,. hardwllre.englna&tS,
dalms\ rrm4e
or other
Errora and
-�
Om�n Hebi)lty inaura�, lncJudrng Cyber . ��ity ai)d Data �. in ·11u3 minimum amount ot. '(i)- OflE) rnQUon dollars ($1,000,000.00) uch clalrn, •or (ii) the mmdmum . amouot .
:·- euch •.
_ Insurance . mv�Hable to C<>NS"LTANT . uoder
CONSULTANT1s .�d lneuranos policies (lnctudln9 any �- or 11urnbreUs11 pQllcl&1), which� 18 ,-.-�

7.1 .•• $, .
_ If the pijformance . dl .CONSULTANrs work or •rvt• under ,this Agreement bMIVN.. contact With minors, CONSULTANT Qhall Proctn and mmintatn Sexual #\buae 'and. Mol_�tJQn �ranee ln the mintmJAm � of. ,(tJ one mDlicm 8\f�le
dol�ra ($1,000,000.00)
·to CONSULTANT
each
� CONSULTANT& combined inBUrance polic1a
mlmi or. (11) the. rn,pdmum &moµn\ c,J 81.t� ln�rwu,,e
Onctudin,.g . ..w· � er,,-"umbrel'-' pol�). whfohever 18 ereater.

7.2� 1Endorsements •. CONSOLTANT·sh�h provide p�of of the f�Uowing endorumtmts, lleted for each poHcyfor Which endo.,.rnents·am �Uired, as outlined belpw:
3

Page 75 of 125 ends

DocuSign Envelope ID: 4A 1 F6989-87D4-4F1 D-AC6A-30O5E2738B66 DocuSign Envelope ID: C6A64AF2-923F-48EF-8101-E012466F0BA7 7 �2.1. , General Liahil�ty.
7�t1.t tij_e CitY.. or-. '.Morgan Hill� Jts e!ected or BP;J>Q:lnted offlqials, . ·
· bpard$,
'.�eenc�s, �ffi�. ag�� · e.,npl��a. l!!nct �h.1ftf�l'8 .a� �rn� :�� ai:i�Jtlori�I '
·
}r$U(�s;
7�2·�1.i.. the i01?ur�r wa·1v� '.the riglitm .�u.b,r�aJli.on �g�lnst lft� . City of ·Mom�n HIU Jlnd �a crry� el�tit�d •·�r appc,_lfl\e.cl offl�laJsf .board$, ,ag�nci_es, r;,Jfi�Nl, ·�g�. em.plo�, :ant1·vol�ntee�;. �nd.,
7 .2.1 �a. lneurance Bhan .be primary n0n-contributi09.

7.2.2. ;v,iqrkers-Gpmqen�a1ion;
The in$ur�t V@lves the. right of $Li�r�gation. sgal"'t · the .¢ity of Morg�11 Hill a"cl '.the CITY.'s ·el�e(I �r appoi�te�. QffitJa!s1 bQtards, 89,!;'RCi�, o.fflcers, agcmts, enipl!)yee�; •JmO v.Pl�nt•rs:

7.3. auallficatton of'lnsurers·. Ail fosurah� requir�d pu_r$ijant to this Agreement.fllustbe issued W t1 ·company licensed and. edmittetli :�r oJ�e.rvtis� l�gallf f3µ1horized to csny oui in�urance bu�iness in the State .of -Califotni�, .and .. �ach Jnsurer must· . have a current A.M. Best•e. fi,:ian�al .s\reflglh ra�n�· of ·uA" Qr b.e�r ·anti arrfinanciat)rite:rafl,-:19 .of,JIVll"·or .b�. . . .•

7.4. Cevtificatep. �6NrsUL1Af�lT Ghall'(urnt�h CIT(of Morgan· HUI wlUi copies of au pQJici�s .o.r certlflcat� .. as plJtlin� hereln, whether- netoV Of mgdifl�. ·
. p:romptly. µpo� r��1pt. No :policy
subject ··tQ
.
·tt:ie·
· ·®N$UL TAN"r.�· agre1tmem :�Ith Jhe: CITY eh:a11 be. c;:mce��· or m�teriatly changecf ��t after thirty :(30) .. tlays' ,noti.ctl · �Y· ihe · insurer. tQ·. CITY. Q�rtlfiQ@Les, including· .reh·�1. tertfflcetes, . ri)ay . be malfe� :el�.cttot-ic;aJly 19 llfilfil!flllil@morutinhiU:ca:gov c;>r �eJivered to tlie Certifapate Holder addres1?·P�Yi��-� ·her�h� · · · · · · Ceriificats Holder lldtii'N&:

Cly of Morgan HIU
Attn: ..
. � Management
17S75PeakAvenue
M�raan HI.ft. CA ·15037

8. .
. , Nbn�Liabifity of Officials and ·Employees of 'the ,brrv � No ofliciel or employee of CITY ihall be pe(reoljalty n
·
�ble for �n,y :d¢atilt orllabTii�y unijefJh,js.Agfe(:l'm.�; �. . . ,£ompliznce with Law. CQNSULTANT �nd � . offi,ce�. 81!)pl6yees� ag_ent6, and suti�n\fac\0?8 shaH comply "'!h �n a,ppUClQfile l�w •• oltlinao�. ed,rn.t�str�uve regulations, arid pertn"'l�g r�q1d�meni� ,n carty1ng �Uf thejr: Ql,1\galiO,!'\S llnder tt\is Agre�ment� GQNSULTANT and tts· ��rs� :�rnplQy�� ageritsJ :�nd tmbQpnl,ac.tQ� ·covenant ·there.'sh�II _be no disQrltnlriat�pn based up�n. µ1cei �l�r, �ree�, -rellgl_OI), :9end,er, miintal ·oiatus. age, sexual orjent�ir:m, .
.
11ptiooal ,otiglri,· mental -�li��bility, physical dJe�b.illty, medical ·co.�IUQl'J, or en�� tn anv,e� ��µBrit to:tbis).\greemerit. - ·· ·..

10. ·fodepentienLcontractor. CONSULTANT Is an indepgndent contrector and not en ag11mt or employeE) C>f crry. · · · .. · ·

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DocuSign Envelope ID: 4A 1 F6989-87D4-4F1 D-AC6A-30D5E2738B66 DocuSign Envelope ID: C6A64Af2..,923F-48EF-B101-E012466F0BA7 I
l.

11. . ColUWentialilv. All data, documents, � other h,formll!tion r�tved by CONSULTANT from CITY or prepared ·1n·-C011nection with CONSULTANT'S .rvioee under this AgrQemri are deemed. confidential and ehaIJ npt be dl&C4os&,d IQ any third party by CONSlJLTANTwbhout prior W,iiJen � bl( crrv.

12. _conflict of.lnieresi:a·na Reporting. CONSULTANT Bhan at all times avofd confllct �f ��st or appearance-of conflict of lnte,_st In pel'formince of this Agreement.

13. _
,Notices� All noti�·sheU,be pers�ily deQvered or meiUed, via rnt ctaas mmn to the below listed add�. Thea& addresses shall be used �r d·eu��ry Qf service Df pn,ceee. �oti� e1-11 tie �qtlve fJVe (5) •ys after dat, of maning, or upon d.ate of P'i'sonat dflh,ery. · Address Df CONSUL TANT isas fOttows:

Innovative Claims SobJliona. Inc.

P.O. Box 5128
San Ramor1. CA 94583
Address of crrv 1s as foll�;
Human Resources
City of Morgan HIii
17575 Patak Avenue
Morgan Hlli, CA 95037
with a copy to:
·City Clark
City of Morgan Hill
17575 Peak Avenus
Morgan H_BI, .CA 95037
-14. licenses, Pen.nits and.fees. CONSULTAtJT shalt obtaln-a City of Morgan HUI BUGinese Ucense. a!I permits anf.'I llet;1nses to the ext�nt required by ordinances. COdee �nt:J regur�Hone of �e f�deral, ata:t,e �nd lo�I g,;,v�r:n�nt.

15. .l\JJa1ntenance of.Records�

15.1, Maintenance� CONSUL TANT ehaU prepare.· m�ntain. arad preserve all report& and recordfi that fflSJ}' be ��i�d by federeil, &1$18, and CITY rules and ordirianCQ l'Jilated to 8SNlces provided under thki Agreement. CONSUL TANT ehaH maintain reoords ·far ,i peflod of at •st .3 years after re-lpt cf final payment under thi� Agreement.- If any litfgation. •tm, negotiation, audit -�ption, or other �n retatlng to·thla Ag�m·ent is pending at the � of th$ 3 year psnod. &hen CQNSULlANT ahaU retain said. record8 until such. actIQn is resolved.

16.2. Access: to and Audilof 'Records, The CITY ahall MVG the right lo eumine, monitor and audit all records, documents, condJtiDnsi and actMtlaa of the CONSULTANT end it& aubconlmotcn TUl&ted- to Hntices under ffl� Ag�ld. Puraumnt to Govemment Coda Sec;tlon 8548.7, ff lhJs Aerament invotvea the eJtpenditure of_ pubUo �nd�_ In excess· d'
$10,000i th� Patt.i�s Jo·t�.ls Agreement_ m�y be subject, i,t �· ��l:of'thtl .. CITY pr�� p_arl of a"y .. audit of th� errv� .to the examlnat19n and ·audit of the St.Qte Aud.it�r .perta�niog. to· m�rs connected• v.ith the pef{ormance of Jh1S Agreement (or a pert� o,f -'"8 yea,,s afte.t final �yment pnder the·A9re"1ll1'1 ..

15.3. .ownership ;of Work Product AJI document$ or othtid (r,form�tion d�yelopad or recel� by CONSUL TAf\!T. for work performed· �er this A9.reement 6�11 be th,i, property of CITY. 6

Page 77 of 125 ends

DocuSign Envelope ID: 4A 1 F6989-87D4-4F1 D-AC6A-30D5E2738B66 DocuSign Envelope ID: C6A64AF2-923F-48EF-8101-E0t2466F0BA7 CONSUL TANT shali · pat.Jvlde ¢ITV with copies of ttlese items upon d�mand or •upon termination of this �reemenl
-1��
.
.-F�mHiaritv Wlth-Worl1� ;�y-�X�\I� �His Agr�:�!P-�ti�-, '.G�NsµqANf repr�S!!fl�S that.:(1) ft has J�v�t.!ii��ea .111, wo�p9.'i?.� p·�p��ij; (�) JL»��- ·invest��t�d· t'1�·-stt� :ofJfle wortt a�d '- -a��r� of all cp11ditlC;Jl,l$• t�er�; �ri:d _ (3)', IJ'. ��-�rs\�rtd�. ,!Q� d.iffi�l.ti�a �-� re,,tn_r;tlQns of .ttie .w9Jlt · urid�r thil AQ't�ent. ,Stiti�!d- �O�SULTAN"f; �is�ovef. ,,nt '.�Q�ijl9.�s ma,w.i-11.V :glff�ring fro.Jti tIBJ,¢:ilitierent'ih the 1VV9m or ,a,· ,repf{a,S�rjted. f;)y' QiTV;,; it shall imm
:
ris\t, �ntlliwr��e.n ln�t�pljons are.te.c
�-tiifil,eJY,
elved fr�m Q
J,:tf<mn.
l°N';
-�rrv.
·
·and --JI not proceed, e,coa.pt ·rrt. CONSUtTAN"J"f:l

17. Iim� of 1:�senc_e. Ttme Is of the essence in the J)S1fc>rmanoe o� ttila Agreement 1lt __ .· No. Asstgnm�rit. ��ittier Jffis Agreement, .nor at1y ::portion snaO ,fie _ assign·i;!d 'by CONSULTANT. ,wm19·ur ;p,ijpr Vi1tnten .CQfise.nt �f ·PJTY,. AriY att�pi�ij ��sl9riment :npf first approved �y CITY, �nail Jl� .. VQip �nd, atClTY's opti�n. 'shall t�rmil)�t�·1qi� Agr�e��nt�ffEJctive .iis ofthe-date<>f·s1,1c'h attempted assfgn�eot:

19. _ .Attorney, Fees�. •n any �g�1-�ptkm, �1.s,pl,ite �r arbllratibli arising 01,Jt or_ Qrtelatbig tolhis Agt�1;3ment, the pre�iling party . shall be �ntit�ed to �Tl �w.ard -� j\§ · r�QmsbJ� att¢mey J�es.1 costs and -�,cpen� incurred. · · · · - · ·

20. Defense and.inrlemrilflcatlon ..
�p.1 �. . Oefense and lnde��ification� C().NSQL i'��T �hall,}�· 'th� fuhe,st e)�en\.P.errnltt�ci by ;law, in,demnify, 4efend and h01d:barmlees: CrTY, l_t� .. �J�ct�d _91; '.a,ppolnJed omct,1s, boards, agencles; oro�e,t�, .a.9.eJits. ��pl�y��. �11� �olt.1ol�� _(�IN[?EMNITEE$'.') from ;itjd �g�i�si any-�ncl _ aU clah�,s� ·liablJltles;: expem;esi .ll�ns, or d?mage� of any natµre� �ncludln.9 uar,nny f9r !bpdPyJ,:i],ury, prop�rty damag� or personal injuil':, a�d,.ihclLiBiqg l'.�§e>Jfat:il� ·a�9rney�• fee� aQd e}{�ns$�. th�t ari$e .out of 1 peft�ih tQ� or ,elate to ;the. perfomiarice of· this �9ree��nt or ,th,e 'f�lll:(f� ;fo . comply With ;8')Y ·objigauo_n� con�ili�d jn ttjJs Agt�em�n�, by 90NSµ,._ TANT. end(Qf It� i!��ntf;_i �f_fic�ts., ·e�pl9ye�1 subcontrac;te>rs, ·;or iJ'.ldep�rya�.�J co.nt�c�Qffi {''C.J..AIM'1 :). • ·
2p.2; Excepfions •. CONSULTANT .ls n�t reqilir.ed -to indeinnnv. tNOEM�ITEE� a·gainst lla�ii!ty for bQJ:lllY•irijµry,,:f>rop�Jty.d�rrj�gfor·p�rsoi).�UnJ�cy. ,Qr �ny.Qther. 10,$.� darn�Q� or�Mp,en�¢ �ri�lrig frQrn
Jlie s.ole neg1�g.ence ot_wlllfµt 91iscqnduct of ttJe C,IT\'�

20.�. NdLUrnited by insurance; The :jndemnity,::defen�a sn�_:t,6,ld ,harmt�·p,avasJons -Qf. t_nis Agteem�nt ,�pply to all :Ct.AIM�:. alt�.9�?- �gatn·e_t .an: lN�MNJTE,E, tegardl"s ,¢,·wh�iher any ir)SUi'art;� l;)Pl,lci�s ��--cjppllo_ab1�� ·Po,lipy li�ilS' �(). noLaQt �J :a nmuat)Qn w,on t�e ·�oufit of incJemiiificatlori:ordef�nse ,o ·be provlde4 l>y �PNSUJ..TANT.

20.�. . Right to O.ffsetL . CIT" . eh,U MVe U,e .� to �ffs� $9�nst. any compe,-tion _ due CONSULTANT.· und�t Jh1s Agree�ent �rJY am�u11t .. qu� CITY fto_m �ONSULT/\NT .iiS a, rasull .of CONS.Ul TANfs fijllJJre to pay t;ITY promptly,any indemnifigatlon �rising und�r-t�b� S.ection, '(20) and �ny am�Yl)t dµe CITV from OONSLJLTANJ �rising from. OON_SULTANTrs ,�ilure either tp (j) pay taxes on.•mour,la received punwem to this Ag_reeme�t i,r (ii) c�rnp!y·W. ilh 1appllQabl� wpr.ke�•
comper_watlon law$._
·20.s_.. Jnter'pretatioh. Tbis Sec\ion �haJi �constil,ite -�h agrfit;tn�JJl or .C?��ti:act Of ��e.rohlty, inc�rP.tirati�g Ute inte(P.)'.e�ations. ynder q�lifornia Gi\f.il' Cod� Section :271tt lt is -exp�e�sly. µn�e(stow;,_d 'ln� ;agr��d th.�t th� pbUg�tlt>n �f Jb� C .
01\!$U.J.. TANT to im:lemnlfy the INPENINJTEE �J'a�tl
6

Page 78 of 125 ends

DocuSign Envelope ID: 4A 1 F6989-87O4-4F1 D-AC6A-30O5E2738866 DocuSign Envelope ID: C6A64AF2-923F-48EF-B101�E012466F0BA7 be _as brQad am� .i�usive aa "rrriitJed ·by UN! l�ws •Qf the State of CaMomilll and -shall survive termination.of this Agreement.
*· _ ·:Entire. Agreement; .J\flodific�don;-·confHcting.'�revisio11s, Thi� Agre�,nen� cp�sl!tut�s Jh� �nti(e. -�g�J�m�nr;�tw�en the'·P�_rti�s ii.�chu�m.eoos-a'}y i>revitjiis··�gr�n,te��t :or,! of wr1i(�n. rtils A9r.¢en:ie:fli ��Y lje,_r,:tpdifiett :'?r p
_
rovis.io.�s �iye� :q:nJ� .. �1,. £\_ sµb.��9.?e"�-�u,�1 wri�e,� e'g�ee,n�Jit'��epu,.te� :l?Y CIT¥ ,and
pnMSt00
-�<;qN�l!tv�T .. _ If _J� pr��m�i.Qns -��,n��. Jff t��- ro�J� ;t;.o.�� f thJ� �g_ree�ent .conflict wlth .�ny_ contained In an exhibit to .this Agreement.;�� ,prpvasfCt!l� Qfttie �In :boqy·o.f,j�is}\gre�me.nt shall govern. end controt over any provision c,an-"'8tJJn an �xh1b!fttfth1s.�9reem�ti�: · �2;. '.Govea;riing Ls'wand Venue. Ttiis �_g,��rne�t sh�il be._ constrne.d in �cco.rdance With lhe laws·pf .the state of Qalifdrriia. T�i� Agreerr,ent .. �s �riter�g into �n� is· to be p�T;f�rm�� ih tile co�nty of Santa c1ara. ,Any a�9il o.tdlsp:Ute arislng o� t>Uhls Agreement shatr OQ'Y be'b.i<>U�ht.in San,ta-Cla� Q(itmty,

23. Jnterpreiatioi1. THl_s Agr�ement_ Is :a -n�gp\ia.Jed d�cumenJ end. sha,1 be da�med to have -J)e�n drafted Jointly't>y· the Partie�. �nd no rule of coristru°'ion or in!erpretatlon sh�l .ap�ly against any ,particular P�rty based. on ·a coi}tentlon ·that �e A9reem�n� was µrafted by cm� �Mn� l:'�rti�s-lhc:tuding. Jmf Qot,'Jimtted, 'to, �litomia Clvil �ti� § 1�54. �he:provisi6,i)s of Whi¢ti --ere hereby waived, This. J:\gref31lle�t shall 'be construed and interpretecHn a nfdnal manner. · · · · · · · · .. ·

24. Preservation of Agi•eeme"nt. If.any term,_ provision, covenent. or comiitiPn of this Agreemsht Js held bY, a court of compeientji.l�isdi�tion to. b� iovallcfor un,.e,nforcea,ble_, the rest of the Agreement stla,11 remain in fuQ force ·and ef.fe�·aJld shall _in no ""ay be -affected orinv.@UP.�t�d.

26.. Binding Agreement .. No!with�tandfng the provisions of section 18 above, cthl� Agreement sttefl blnd any _ �ntl an_ -$.U��sors 'in_ lnt�r�t. .l.esat repre�ntatives �Jiµ/or .oth�r permitted �s�ign,ees or:· transferee$ 9f CONSUL TANT in the sif;me mann�r a$-Jf -the;»�� .�ucpe�sol'.$ in tntetest, te.gi;il repre1,�Jitatives or ottler pennttted a&GlgNJes or transferees h&d entet.fd into thi� Agreement oriijinally; . ·· II
II
II
II
II
7

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DocuSign Envelope ID: 4A 1 F6989-87O4-4F1 D-AC6A-30O5E2738B66 DocuSign Envelope ID: C6A64AF2-923F-48EF-8101-E012466F0BA7 ,1
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:25, __
.·
,AuthoHt.1 ·to Eliecute; Tho�e indivkiuats.whp '
:
are sj901hg _,this Agreenn::nt pn.�half of eritiµes
·rep�e$ent end yiarrar.tt that th�y·ar�,)'��p.e.¢1v.¢Jy, d4Jy �uthpriz�d. ta,.s1g·r1, on .�tratf• of ·tt,e �tiji.� and to birid,·ttie :entities fully to ea·ch ·and ·eltoMhe 0�1jg•a,1qns,,��Jforth:ln this.A��eme�. �low.

IN WITiiE.SS THl!i!ml!OIF, these Pe11ies brave :exeClLiled this Agreement on •the day and �E!lr JhoWn AS .SET fQf.iTH. jN C� CORP. CODE .§ 313, ·TWO S.IGNA11J�S ARE REQUIRED FOR CALIFORNIA G0RP08A'TIONS:
(1) ·ef1AiRR$.�SQN O.FTHI: B�PSD, :,:,m;�IQE�T. ·(?R \ll<�E PRESIDENT:� (2) SEORET�V.. A$.�IST�N.T �l;CR.El�RV, CHJE:F FIN�CIAL OFFICER OR ASSISTANT TREASURER . . .
>6-17'§� ': . � ' ' ·()! . . . .
_, .. '"';, ' ✓-- ._···.·:

C y C.l. _ . _ ·
. lf City C,let,k
'��ichelle.WHson
__ ,.::_• ______ _
. rmnt N.ame - .
.
.

Date:
. . {1 ft 1.}J/.lf,
APPROVED AS .to FORM�
:·./hf\.
'�- ,l).� ·-
oate: ow J 14 I_Ho�_
,Steve Byoier
Date:
lnnoviltive Cla" , s So Ulio11s-
. . rrJ&LPil llladzwr
l:lV! C' n�Uf\v<.<ti.i-t11 .. .,
. r
TlUe: (lS . ., Jer,1_ · t"c: C t!> 0
... rirW N1.1m� and -ni1e 'cf Sitfner.
lf C�rporate: Chairman, Pr��eJ\t �r
Da�e: Vi.ce . ��Jd:! -S:r .J. J.
.. Le ·�- ----'----'---
.. �
iitle: _ij}(f� 1, � · 4 C lO
Date:

Pri!"f Nettie end Trtle of �gner.

If ·9orp�r:ate: .Secretary. Assistant
S.s�t�ry. Chfef Ftr-.ndel Officer or
A6Sil\ent Treasurer
s-} � ,, le,
8

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EXHIBITA

SCOPE OF SERVICES
C.laJtn$ �rnini8'ralion. ICS 6hall a1dhere·to il.Je follc,wtng ctslm$ admlnlslratlQn standards and proDB®res:

1. . . . ICS ihaheview.arad process reported clalnlSforworkem' oomper,tatio•fbenefits lhr4 have nof been �osed Date. tCS
. • of
s�H
the
llaye
Effectiv.e
flD reiponslbtffty
Date c,f this
.

P,greem�rn
other than custody of
�n� ci�d
files
··a.ilrns
and
•�re�pen abnlstical reporting
cm or after
for
th\8
claims
Efi'�
otosed
priQr t� ·1rn9 �ve �- · · -

2. Pet�tmlne DabUityfor c1.afrned lnj ... rt&& end ·UlflQ• in aQCQrdaoce W1th canfomm V\TQ�' 9ompensatlon Law&.
:3. . . Re\fle:W and pro�s siU elai1J1B in accord�nae with rules and ragulatfons 9'lm>Ji�med by th� D,ivielon of Industrial Rel•tiotlf$,i. Department of S18tMnaurenoe Plans.

4. EetebUsh flies contafrafn,g medical and factual information O{l each �d claim tc;e9h9f whit complete a��Moting re�rds ·,nd. rnai,-tn.same in.t�rdanQ&. with s.tatutory-reql.liremen��

5. ICS shell make all worker$ compo�ption d,isabUlty payments a� send el nonces in a timelyal'ld accurate manner Bt\d in conform.� In aU material �ectswith sll appUc,able provtaron� ofthe California LabQr Code and� Callfomla wcrtcerB' �pen$8tie,J:1 laws. n,alGl® encl teo\JJi?ltlons�

6. D&termlr:ae n�tur\e �lid ext� of petn,1:1ner11 dlsabUIW mtm mrrsnge for infQrrnal disability rating whenever pceslbJ� to evold \l\fotkf:)r&' Cornpenntion Appeals Board lijfgation.

7. Expla"'tQ .c1od ets$iet employ� in compl&tillJ necee,ary rmma fQr �rmenent diaabmty ratings. e. RtMew CQfflP�le an.d pav a.JI infom,1:111 rating, flndtrigs aod •�. life pen�QnS or comprom� end relea• settlements.

9. Maintaln·and establish reserve estlmetea for each reported GIilim.

10. Arrange for �nd superyise ell n&ce$Sary investigations to detennlne elfglbUlty for compensation benefit� and/or llabll� of nepl�e,nt.'1bnd partki&,

11. . ltlelltifv, recommend and oJ>teln apecteil fra� ir.veetfaationa .,. obtaining advance auth�rity from ttleCU.eN.T�
1�. AvJ �. s
'.
e�ce to lhe C�IENT, 1cswm �cnt all �XCe8$ clJims � �·reln$Urence cllfriar, �lhoush lhe.fi"al responslbntty· fonepollng such claim& Is that qf the CLIENT'a.

13. Arr11n;a 1ml supervise rehabftltalion
.�. V!Aln lndJcated.

14._ _ An'ange f4)r. end set 1,1p sMem for payment � b.Etftf!ftta and allolll,ted �• In aCCQrdance With CUENT1 needs.

15. ICS �h�II prepared wlih the asei�tan�e of the CLl�f allrei,otts, which $re now, or wm be required by thE! S1ale �of QaHfQmlsl or other govammen\. agencies wittr re•pect to eelf;Junded programs. e

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'. 16: -,�s shall-5ubscrjbe io and P.SY for �nrcillm¢nt ln_theJndex �ureau,$y�lem l!nci wiii rep,ort to the Index .aure�:i'�;\Ph·:�actrand-�_veryi�d�.mnily_�_�im.'Th�··p�_r �lafro, �o�t·o,f Ulissetvtce.�ll"1U be AA&.�ed ms flt\ . -�UoPf!te_d e�pense tp thtfC.llENT�

17.. 1Q.n beti_attQh,h_e eti�rd� IP�' wll[p��orril au �T��r� '?Q�Ji��11ori' �_;rri. re,pr,r:tl,"9· s.et)li� ra:qwre(:I J;,y tti� MQdipare�_fJ)e:�Jcai� -�rid �CM_I_P'E.xt�ri�JP.n AQ.t•(MM�EA>·�e,cti�n 111 �nda,)�ry �pprt,ing to 1he.:

Qen.�r:s fQt Medicare,& MediQaitf -�001:e� {CMS) fw th� pe.Jic@s ·td�tlfi�'jn tt,18. oc;ntr�cJ. 1 It 'ICS wlll cornplf With Ula pQttormance $tan��tds as :iequjied by' tbe City.'s"��T? ca:trle_r. · 1cs .will advise lf1�·ere are any �ptions; orw.hen'.compnm,ce with new swmde�$ m.�YJrnpa� our.��n�lf�e� B. MedlcaJ Administtetiort. ICS ehatJ ;adhere to tl\e foJtC>Wins rnedical ,admlnJetraUon &t$ndJrds: ·

1. Authprize,revlew and mo.nlm.r all medrcal treatment t�fred on injury_ or fflnEl8' Qfaitns.

2. Audit. and pay all mecUC$1 ��en'8& In a timely manner, and \'Vlffiln·Gt&tutory g"1cieHheJ. ,. tvl�lnteln (:lose _cqpt$(#. Witt, lreijting physi�i�s tq en�i.!re emplq�•s �� p� ro.dical treatm�nfand are returned iJ:fuJI e,mpJoyment a� eai'liesl:date.

4. Amtnge fot m·edicat-fegal,opinlons In d�uted ·cBSaes, <;()l'lfen'lng with medical examiner&, CLIENT, and legQI coU�1 •WIJei'eiod�ted.
$. Consutt-as requlredwith -CL1ENT on:those �es wilefle. inJury r6$iduai mlaht involve .res1fiotion �nd/or retirement potential.
c. Lege! Administrat.ion� ICS shell adhere to thefollowlng legal administration etand$rds:
t.
. J:ief�t ,H\i,gat�d c·ese�. wherr�e,r:=��. tQ �Uorr:,eys_ �omm�ntled_ by ,es end tippr�vficJ' bypL,tENT for purpose� ,9,f def�nofog · ei.,ENT's inte��ls ijefore,, Wc:,rkers' 1Compe.rii�tt0n Appt?;;a1s Board and 1he court.

2. Work cloesly With �unsel In preperl119 .def�nse of litigated cases.

3. Obtain CLl!ENT's authorization on all settlements or stipulation& when required.

4. Work clo��ly with epplicanra attome,y and legal counsel in informal dispositions of lltig-� �-

5. Attefld, ,ivhen required- WorkeffJ' tomp .. �tJon Ap�t·Boar� hearings.

6. •D.Jsct\arg� Q0 .6ena, of CLIENT; � leg�I obtlgatlons� Hs lnjµred ecnpioyaeJ lmpQD&d byWorkellj' Compen_�?lti,ori App��Js 13pard �ll� bi8tiet�urts.

7. Protect end p,eaenr(l cuEl(r•, Interests In iiR pob5ntial tub109U!iion caeee. o. Medical Cost Containment·S�rviQ&B. IC$ �ail adhere to Ula folt<,Wlng med\CEII coQt 1:0matnrnem aerviaas -darda! . . . . . . . -

1. .10s shall use e11d ci>t;tpefa'8 fully Wiih th� deslgn�ted.medip�I co� cqot�lnmeot-veruJor(�DI review and utilitat\on re.view $eNica provideJ) ip revJ�w t.�e mectica� bills for t�e: CUJ;NT and ot��r,n,dical charges. a,nr;t Pt�Md� n.��ry uUQ�tlc>,11 review-�ervic�s re,�tinp to·tr.��nt r:eque_a,Js onatl clEilm� ofjn,�us,tri�t111.)ury <1r Illness. 10

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I
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2- UJj� oflierwJse dire�. IC$ wni sele.ct �e servii:e p,._,vider �o be utilized and CLIENT \\1111 pay for sµph
Adjustnlelll
eervJ�. The Qftv :Of fv)org(:lri .ffill �an be_ �oh_.ble for:IIJI MJmaelad QQ ServlQll end Loss E�. Man�ged Care Services eha.lltt,clude medical bill iavlew, uUIJzation ievfew, ··and medica1·�m�nLC• for·s_uctr�� edin El<hlbJt'Q;�ei-, t)Jif revew seJYloa.a s,hail b& bfffed at a,. :not to.__, $80.00,per bDl. �Ad.)Uslfn-� &hall �de alD "a� ppm.wei
�lrlg,
r�sa1\rto flle,adjustment of m �lm. "1 aarclance with the 8ervioa Aenaement, but not llmlted to, feel for eng•ifm deftlnaa ccwnsel, cotart repo�, •$rt w1tn�� eihd firetd iove�atom. jnQUmad on behelf.of ttte etty bf M�rean Hilt E� information S�m�. IGS WIii pro,vl_de a. �n.,pu�f system with appr�riale d•ta bae.e maoag�t,t capabUitia& lo �1Jtfsln reCC>r� rel� .. to �e •�mfnllt��n of ff)� CIJent'e �er,' comp�on prog�rri.

ICS sh�II coord.Jr)a .. data ·ent,y for �mpl?yees Jn, th� pro9ram, !3rad for &�rvJtel? .,�pplted·by 19s� lbe CLIENT �h$II have.�. tb 1tie �'Muter system �urlng a:,prn,al w.0$.,ng �LIi$ a� �s.to the da�baae 1hrough Its own computers at tts own ,xpen_ee. ICS shall provide co.mputer-g�erated report&�� ij� reas·�nably reqLJeated Qn a r�wa·r �asle •·Jteh\i1ed in •�ction F �elow. · · - ··
F; rt&atistica1. 10S wm acfhete. to. lhe �oHowing ltatiltlcal repoit production obtrgations end provide an required reports to·11\� cUent. at �greed to JntervS,.s;

1. Reportto CLIENT, monthly �tus of daill'.l pmyments and rEtServet:1 <>nan Individual clalm.baals and in � aggr�r,ete.

2. Report to CLIENT, quarterly Ion anelym df �ima filed t,y frequency aml 1evertty. s� Aa�ist in the. preparafi.on of au rePortsrequlred by the State of California or other GQvernmJntal agenQ!es relating to.Work&�' ConiP,�tlon clsl�i

4. . .. 10S will pr�pare tte ,�de�I lnfarf111lUo,n �urn (Form 1q98) by the statutory deadUne for an payments $Ub� lo 1099 -reppJ11ng m�� by ICS on·beh�lf: of ,ne CLIENT dunog the term ofih\s l\9A!EimeJl,. $. . . AdtHtlonal ad-hoc �pons .wJII be p�vJded to CUE"'1" at �lr '8(1Uest� no ttddltional coat Special report r.eqlle.8tebltreqult'e prqarammlnu Uni$ WUl be charged toQ.IENT '1 $150 per hourt WhlQh Is our direch:o,� Our s.y•m. 1& cap'l!lbl, C>f gene� e�l$8rd� repc,rts as follmNs:

Clmlmlog&
Clalm Activity
.Clatm Cost DstaD
Clmlm Co&t ��ry .
c1a1mcoat. �rnary .by Year
EumlnerAcWJty
ex.m1nerc� Log
Ftequencw Repcnte
LOcatiP.n :suffltMIY
Managp"1
l\nultlple
Summary
' Claln'ti U8tl'l9
OccurieJ'\08 Cost
PaymentTypa T,.r&
Vendor
state
Payments Sunu�ry
Aonual Report
11

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8. AQ.;hpc repprUt queries, Which require no specific programmirtgWlll be prol\llded � no cost to CLIENT;
G. J3�n�ing Se,�� ICij wm adhe� t9 �e following iieJVi�s ·atanda�s, ,ne di�P'ted by the client&:
t. _
.

Jh� P,UENT:�9:!ieij,to :�stall.Jieh, ·funil :fin� r�l��,sfl:E.tn �,tx:i)'u� at� ��EM\��lifitlt�tlon ag�a .upon. by the P!,;l,l;N't �"P JCS fQr the nufpPS� of paying_ beO�flts to ·w�fi(�� or pare.•PT9Yfij�� to Pli'Y �11ocate·d ·
·Loss AdJilslm�nfl:)c'p�!iB�·..
. . . . . ...
�. _ All funds ih tb� C�IENIAccoontbelbngto th� .OUf::�. ICS -��alfh�Ve-�uih_only ·to wdte checks on the C'-,IENT A9_cpµnt, hoW$v,;,r,. two ·stgn�tur'i�s 'rn�y �� re_c@red -�t t;l�.n\'s �q�aaetC3.dJe,yel. 3r _ ICS shall J,�v� sutt1ority to p�y)\llocate_d �QeJ Adjustment Expe11$98 from the CLIENT Accoum to vendore. IC$ sh�II; provide ·.tfle CUl:NT v,.rt1'1 detaile� ecoountingfl C>f Cha em,enctiturea from the CUENT Account.

4. _ ICS e�r•s ·to mak&·recor'ds pertinent to the CU�NT's account available to CLIENT for audit purpoen at all reasol"l&ble ttmas wlth 11i leasf 24 hou.re' notice. 5, . ICS �grees tQ m11f�taln CLIENT'S trust f4ri� acc�unt, -� oµ��T ��eels such arrangement. Otheiwise, CLIENT is r��PDfl�ibte for·enr.ee.oncjliatipn ,�md bJ!nklna proceases inwl'!e.d With CLIE:NT a��mt. · 6; AddiUohal services, i11�1o�lngJu_t n�t�imlt��-to, fi$1th �nd fr,yestiifajlve,s�tvices._ leg�t ei'penses, .
.m�naged F�ffi_ �e�i�.e�. i11de� �urea1,t�qulges� bHI reyi�w,.sn� all s.ervlceswhicfl-are_ ertWitle'cl by-out�id& ve_or;l.ors on'behalr ,oflt)e:eµ1;NT :shall be paid.outof'the 0L1ENT'� ac�ouht, or trustaccq1Jrit H. Assignment&. ICS shall not aaeign tf\ia Agreement, nor-any part thereof.

I;__ __ _· File �orage� __ fu11Ju�nt totRR ��4D(t2. � thepat;tomia ,God_e. qf'�lt��lions ah. files�lo8$.d for . ,n.ore th�n-5:'(
fivE;) jears.�h.�11.b_e,JC,�ptlfie��-'-WON CL.,lt;NT direction ICS shau retu01 the flha.(s) to C�IEITT, d�sttQy U,e(s) Qrma]nt�in fil�(�)at. QLIEt\ff �>m�rase .�1th an·off�$l��stofl;lge facility:

J'.. _ _ �ooperat{on.. In th� ��ent of:ea_rly �nnin�on or ho!l .. ifJO�Wf!l. :b9�1l par:tt�·WiltcopperaJe in 999d falth to:ir,npJ.ernerrt• tr�nsititm:tr.>-a new Getill� p�e>)dd�wilh arii"lmu� dialU(?tibri:to the provision ofben�s -to ·workere. -1cs :_wlU m�ke '.avail.able fo client, �,fa to.a n_ev\rHMQS'�er� all file�. surn_m�- d�tai records • n,i'.inf,ormaliq!ldeveloP.ed wUh �pe:fot to··this Agr��ent1ln9l1:-1dinQ �JUo,s¢ r�tx>tds·an.da)eqoi:¢)£lyoui:
-d�scrif:1.lng :111� for��J · of;-the date taRe�.: �\Jqh Jmo..trnaiJ�ri-�hall :��, n,jij�a-�v�tlat;.'8 �e.ot�<mipally w�never :p�sJ��- Tti� CUENT .eh�I! �ssurrte all r$lponsf�111W ,for o,p�il plalrtts a� orthe �Jf�ptlve ·_gaJe of J¢rrnint:itlon.

K _ _ _ _ · Files AU cl�irrli:�-�s,_reco�s •. rep� ·and _C)th� <.10�meol$:Pertalninp t<;, emp�yee ctatr11¢ are the _prop$.rty·of'tbe CPENT;and CLIEl�Tmay �uciil onnsp�ct t®,fl_les �.anytime d�ng·n��al bu�iness hou�. IGS sh�JI t\,Jm<>ver po�S$ioh of a,U.111,� aqd QthEW d�cu!l'.le.r:rts Jo the CLIENT or Hs �fgnee promptly _upon .-tt,e. �ve d• of tennlr,mtiOn or non-renew,sl of !his A.greef'ler,rt·., The CUEN'f·shall allow JCS to '9\llew all flies aJ'l(I •r document•rWllh lnfQr,natlo,, relating to tts'.perfQrman� ��Uc;> this agreement.

L. iPer.aaljiea anci. Fines.. ics end cuen� egnsetq tt,e fotlowlng etan•s., proiocol$ e� princfp�Je reJaUng:tO the'firles ·end p�n�tti�&;
12

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1. . IC$·�� CUJ;NT her el e> ao.ltnowiedgethe v�ri6us peoilltiea �d administratn,e ftnea th� contalRed I� T't!e Caflf9miaW9-fk�• Compe�ati� ReformJ\.c\ qf1988. (effecUve JanuaJY 1. 1eeo anti Ja�uary 1, 1991) that m� l>e Imposed �n both employers �nd claim 11drnlhl�re! � .
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Page 86 of 125 ends

City Council
Meeting Minutes
Mark Turner - Mayor
Rene Spring - Mayor Pro Tem
Gino Borgioli - Council Member
Marilyn Librers - Council Member
Yvonne Martinez Beltran - Council Member
Wednesday, March 15, 2023 7:00 PM
Council Chamber Building
17555 Peak Avenue, Morgan Hill, CA 95037

CALL TO ORDER
Mayor Turner called the City Council meeting to order at 7:00 pm.

ROLL CALL ATTENDANCE
City Clerk Michelle Bigelow called the roll.

PRESENT Rene Spring, Gino Borgioli, Yvonne Martinez Beltran, Mark Turner ABSENT Marilyn Librers

DECLARATION OF POSTING AGENDA
City Clerk Michelle Bigelow declared the posting of the agenda.

SILENT INVOCATION

PLEDGE OF ALLEGIANCE

PRESENTATIONS
YAC Presentation - Asset #17 - Creative Activities

Page 87 of 125 ends

March 15, 2023
2 PROCLAMATIONS
Youth Arts Month
Solidarity with Ukraine
Cesar Chavez Day
Women's History Month

CITY COUNCIL REPORTS
None.

CITY MANAGER'S REPORT
City Manager Christina Turner provided an update on the weather event that took place on Tuesday, March 14, 2023. She shared that the Hale Avenue Extension Project is moving along, and DeWitt Ave is now open. She announced that the Citizens Police Academy is accepting applications. This Saturday the Bay Area Panthers are holding a "Meet the Players" event. She shared that the Mushroom Festival will take place this year as a smaller event at the Community and Cultural Center. City offices will be closed on Friday, March 31 in observance of Cesar Chavez Day. She shared that on April 1, 2023 the American Association of University Women is hosting the Young Womens Youth Leadership Conference at Central High School. She also noted two supplements with changes to items 9 and 12 on our Consent Calender.

CITY ATTORNEY'S REPORT
None.

OTHER REPORTS
Council Member Yvonne Martinez Beltran thanked the women that lead the City in honor of Womens History Month and those that are celebrating Cesar Chavez Day.

She mentioned a League webinar that was done on the RHNA process.She reminded everyone of the legislative priorities that were posted to the League of California Cities website and provided an update on Silicon Valley Clean Energy.

Mayor Turner spoke about the Cities Association meeting he attended. Two bills related to Valley Water were discussed. Specifically, Valley Water is looking to construct homeless housing on properties Valley Water owns. This was discussed by the policy committee, but no recommendation was made. The Council should review this item because Valley Water would like support from the City of Morgan Hill.

PUBLIC COMMENT
Public comment opened at 7:20 pm. There being no requests to speak, public comment closed.

Page 88 of 125 ends

March 15, 2023
3 ADOPTION OF AGENDA
MOTION:

Adopting the agenda as posted.

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

Time Estimate for Consent Calendar: 1 - 10 Minutes
Public comment opened at 7:23 pm. The following people were called to speak:

Joe Baranowski (Miguel Jimenez ceded his time)
Samantha Hauser - Applicant
There being no further requests to speak, public comment closed.

MOTION:

Approving consent calendar items 1 through 4, 6, 9 and 12 through 17.

1. ACCEPT THE 2022 GENERAL PLAN AND HOUSING ELEMENT ANNUAL

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March 15, 2023
4 PROGRESS REPORT (APR)
Recommendation:

Accept the 2022 General Plan and Housing Element Annual Progress Report (APR) and direct staff to file the report with the Governor's Office of Planning and Research (OPR) and the State Department of Housing and Community Development (HCD).

2. ACCEPT $595,748 IN GRANT FUNDS FROM SILICON VALLEY CLEAN ENERGY
Recommendation:

Authorize City Manager to execute and administer grant funding agreements with Silicon Valley Clean Energy.

3. ACCEPTANCE OF EAST DUNNE REHABILITATION PROJECT IN THE AMOUNT OF $2,090,840
Recommendation:

1. Accept as complete the East Dunne Rehabilitation Project;

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

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

4. ACCEPT 2022 PAVEMENT REHABILITATION PROJECT IN THE AMOUNT OF $4,001,888
Recommendation:

1. Accept as complete the 2022 Pavement Rehabilitation Project;

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

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

5. ACCEPT DONATION FROM COMMUNITY LAW ENFORCEMENT

FOUNDATION
Recommendation:

1. Accept the Community Law Enforcement donation of:
a. Canine Challenge Coins,
b. cash donation in the amount of $8,727 for equipment, and c. cash donation in the amount of $29,868 to reimburse the City of Morgan Hill for expenses related to the December 10, 2022, Gun Buyback Event.

Page 90 of 125 ends

March 15, 2023
5 2. Adopt a resolution to amend the City’s Fiscal Year 2022-23 General Fund budget, accepting a donation of $38,595 and appropriating $38,595.

MOTION:

Approving the recommended actions.

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

6. ACCEPT 2022 EMERGENCY MANAGEMENT PERFORMANCE GRANT AND

ADOPT RELATED RESOLUTIONS
Recommendation:

Adopt resolution:

1. Authorizing the City Manager to execute and administer the Memorandum of Understanding with the County of Santa Clara for the 2022 Emergency Management Performance Grant; and

2. Amending the City’s Fiscal Year 2022-23 adopted budget to recognize revenue and appropriate related expenditures, in the amount of $15,200 from the General Fund.

7. ADOPT ORDINANCE NO. 2344, NEW SERIES, APPROVING A ZONING MAP

AMENDMENT FROM PLANNED DEVELOPMENT/GENERAL COMMERCIAL
TO MIXED USE FLEX FOR A MIXED-USE DEVELOPMENT ON A 3.82-ACRE

SITE LOCATED ON THE SOUTHWEST QUADRANT OF COCHRANE ROAD AND MONTEREY ROAD (MONTEREY – CITY VENTURES (THE GATES)) (APNS 764-10-013 AND 764-10-015)
Recommendation:

Waive the reading, adopt Ordinance No. 2344, 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.

MOTION:

No action taken.

MOVER: Council Member Borgioli

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March 15, 2023
6 SECONDER: Mayor Pro Tem Spring
AYES: Council Member Borgioli, Mayor Turner
NAYS: Mayor Pro Tem Spring
ABSTAIN: Council Member Yvonne Martinez Beltran
ABSENT: Council Member Librers

8. ADOPT ORDINANCE NO. 2345, NEW SERIES, AMENDING SECTION

2.04.010 OF THE MUNICIPAL CODE, REGARDING THE TIME AND

LOCATION OF THE COUNCIL MEETINGS
Recommendation:

Waive the reading, adopt Ordinance No. 2345, 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.

MOTION:

Adopting the ordinance.

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

9. ADOPT RESOLUTION OPPOSING BALLOT INITIATIVE #21-0042A1,

SPONSORED BY CALIFORNIA BUSINESS ROUNDTABLE, LOBBYING ARM

OF THE LARGE CORPORATIONS IN CALIFORNIA
Recommendation:

1. Adopt resolution to oppose ballot Initiative #21-0042A1; and

2. Authorize staff to send a letter to the League of California Cities formalizing the City's position.

10. APPROVE PURCHASE OF MAINTENANCE DIVISION DUMP TRUCK Recommendation:

1. Approve the purchase of a 2022 Ram 5500 Chassis Cab Dump Truck from the Gilroy Chrysler Dodge Jeep Ram in the amount of $114,887 to replace vehicle D08127; and

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March 15, 2023
7 2. Authorize the disposal of the surplus vehicle D08127 in accordance with Section 3.04.400 of the City of Morgan Hill Municipal Code.

MOTION:

Reconsider item 10.

RESULT: Failed
MOVER: Council Member Martinez Beltran
SECONDER: Mayor Pro Tem Spring
AYES: Mayor Pro Tem Spring, Council Member Martinez Beltran NAYS: Council Member Borgioli, Mayor Turner
ABSTAIN: None
ABSENT: Council Member Librers
MOTION:

Approving the recommended action
RESULT: Passed
MOVER: Council Member Borgioli
SECONDER: Mayor Pro Tem Spring
AYES: Mayor Pro Tem Spring, Council Member Borgioli, Mayor Turner NAYS: Council Member Martinez Beltran
ABSTAIN: None
ABSENT: Council Member Librers

12. APPROVE THE FEBRUARY 15, 2023 CITY COUNCIL MEETING MINUTES Recommendation:

Approve the February 15, 2023 City Council Meeting Minutes

13. APPROVE SEWER AND TRAFFIC IMPACT FEE FINANCING AND SECURITY

AGREEMENT WITH JOHN MICHAEL MONACO AND NORA GAYLE
MONACO REVOCABLE LIVING TRUST AT 195 MAST ST
Recommendation:

Adopt resolution authorizing the City Manager to execute a Sewer and Traffic Impact Fee Financing and Security Agreement, consistent with the Sewer and Traffic Impact Fee Deferral Program and Government Code section 53083, with John Michael Monaco and Nora Gayle Monaco Revocable Living Trust for the approved Conditional Use (Indoor Recreation/Gym) on a property zoned for light

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March 15, 2023
8 industrial at 195 Mast Street.

14. APPROVE UPDATES TO THE SUSTAINABLE MORGAN HILL DOCUMENT

AND COUNCIL POLICY REGARDING RULES FOR CONDUCT OF CITY

COUNCIL MEETINGS, PLACEMENT OF ITEMS ON THE AGENDA, AND

MATTERS TO BE RECONSIDERED
Recommendation:

1. Adopt updates to the Sustainable Morgan Hill document; and

2. Adopt updates to City Council Policy (CP 97-01) - Rules for the Conduct of City Council Meetings, Placement of Items on the Agenda, and Matters to be Reconsidered.

15. RECEIVE ANNUAL REPORT ON 2022 CITY ENGINEER ACCEPTANCES OF

PUBLIC IMPROVEMENTS COMPLETED BY PRIVATE DEVELOPMENT

PROJECTS
Recommendation:

Accept and file Annual Report on 2022 City Engineer acceptances of public improvements completed by private development projects.

16. RECEIVE MONTHLY BUDGET UPDATE AND JANUARY 2023 FINANCIAL

AND INVESTMENT REPORTS
Recommendation:

Accept and file report.

17. TERMINATE LOCAL EMERGENCY PROCLAMATION
Recommendation:

Proclaim the termination of the local emergency related to the winter storms.

ITEM PULLED FOR DISCUSSION

11. APPROVE UPDATED EMERGENCY OPERATIONS PLAN
Recommendation:

Approve the distribution and use of the updated City of Morgan Hill’s Emergency Operations Plan.

MOTION:

Approving the recommended action.

RESULT: Passed

Page 94 of 125 ends

March 15, 2023
9 MOVER: Council Member Borgioli
SECONDER: Council Member Martinez Beltran
AYES: Mayor Pro Tem Spring, Council Member Borgioli, Council Member Martinez Beltran, Mayor Turner
NAYS: None
ABSTAIN: None
ABSENT: Council Member Librers

PUBLIC HEARINGS

18. ADOPT UPDATED WATER CAPACITY (IMPACT) FEES
Recommendation:

1. Open/Close Public Hearing; and

2. Adopt resolution approving the 2023 NBS Water Capacity Fee Analysis and updating the Water Capacity (Impact) Fee as proposed in the study.

Finance Director Dat Nguyen and Public Services Director Chris Ghione provided the report and presentation.

The public hearing opened at 7:49 pm. There being no requests to speak, the public hearing closed.

MOTION:

Approving the recommended action.

OTHER BUSINESS

19. APPROVE DESIGN CONSULTANT AGREEMENT WITH VERDE DESIGN FOR

BUTTERFIELD PARK
Recommendation:

Page 95 of 125 ends

March 15, 2023
10 1. Authorize the City Manager to execute and administer a design consultant agreement for $296,454 with Verde Design for the design of the Butterfield Park Site; and

2. Adopt a resolution to amend the City’s Fiscal Year 2022-23 adopted budget to appropriate $180,000 from the Park Impact Fund.

Public Services Director Chris Ghione provided the report and presentation.

Public comment opened at 8:06 pm. There being no requests to speak, public comment closed.

MOTION:

Approving the recommended actions.

20. APPROVE PARTNER AGREEMENT FOR BUTTERFIELD PARK

DEVELOPMENT WITH FOUNDATION FOR A BETTER RIDE IN

COLLABORATION WITH USA BMX
Recommendation:

Authorize the City Manager to execute and administer an operator agreement with Foundation for a Better Ride for the construction, operations, and maintenance of a BMX facility at the Butterfield Park site.

Public Services Director Chris Ghione provided the report and presentation.

Public comment opened at 8:23 pm.

Nick Valencia was called to speak.

There being no further requests to speak, public comment closed.

MOTION:

Approving the recommended action.

RESULT: Passed

Page 96 of 125 ends

March 15, 2023
11 MOVER: Council Member Martinez Beltran
SECONDER: Mayor Pro Tem Spring
AYES: Mayor Pro Tem Spring, Council Member Borgioli, Council Member Martinez Beltran, Mayor Turner
NAYS: None
ABSTAIN: None
ABSENT: Council Member Librers

CLOSED SESSION
City Attorney Donald Larkin read the closed session into the record.

REAL PROPERTY NEGOTIATIONS
Pursuant to: Government Code Section 54956.8
Property: APN - 81706002
Negotiating Parties: City Manager and Public Services Director Under Negotiation: Price and Terms

OPPORTUNITY FOR PUBLIC COMMENT
Public comment opened at 8:27 pm. There being no requests to speak, public comment closed.

ADJOURN TO CLOSED SESSION
The meeting adjourned to closed session at 8:27 pm.

Reconvene
The meeting reconvened at 8:44 pm.

City Attorney Donald Larkin announced that there was no reportable action.

FUTURE COUNCIL INITIATED AGENDA ITEMS
None.

ADJOURNMENT
There being no further business, Mayor Turner adjourned the meeting at 8:45 pm.

Minutes Prepared by:

Michelle Bigelow, City Clerk

Page 97 of 125 ends

6 CITY COUNCIL STAFF REPORT
MEETING DATE: April 5, 2023
PREPARED BY:

Dat Nguyen, Finance Director
APPROVED BY: City Manager

ADOPT RESOLUTION ESTABLISHING CARRY CONCEALED WEAPON
(CCW) LICENSE FEE, BUSINESS LICENSE RENEWAL FEE, AND

UPDATING CREDIT CARD PAYMENT SERVICE FEE

RECOMMENDATION(S)

1. Open/Close public hearing; and

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

To ensure the City's fiscal sustainability and as part of the staff workplan, staff regularly reviews the City's fee schedule to establish and or update fees to recover the cost of providing the services.

Establish carry concealed weapon (CCW) license fee:

The Morgan Hill Police Department does not currently have a Carry Concealed Weapon (CCW) license fee established. The Morgan Hill Police Department does not currently have any CCW licenses issued.

Pursuant to the June 23, 2022, New York v. Bruen Supreme Court decision, Carry Concealed Weapon (CCW) License applicants are no longer required to provide “proper cause” or demonstrate a “special need” to exercise the right to carry a firearm.

Subsequent to this decision and along with the processing and administration of CCW

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6 license applications shifting from the Santa Clara County Sheriff’s Office to local police municipalities, the Morgan Hill Police Department has received a significant number of inquiries from residents who are wishing to pursue a license to carry a concealed weapon.

Fees associated with a CCW license stem from State and Federal obligations as determined by the Department of Justice. As the licensing authority, the City of Morgan Hill also assumes various costs related to the processing of the application, noting pursuant to Penal Code Section 26190(b)(1) these costs may be recovered…"in an amount equal to the reasonable costs for processing the application for a new license, issuing the license, and enforcing the license…” The law also allows for the collection of 20% of this fee upon the filing of the initial CCW license application, with the remaining balance collected upon the issuance of the license. Additionally, pursuant to Penal Code Section 26190(d), local fees may be increased at a rate not to exceed the California Consumer Price Index.

Of significance, prior to 2019, language contained within Penal Code Section 26190(b)(1) identified a maximum allowance of $100 the licensing authority (The City of Morgan Hill) could recover for processing a CCW license application, specifically reading:

The licensing authority of any city, city and county, or county may charge an additional fee in an amount equal to the actual costs for processing the application for a new license, including any required notices, excluding fingerprinting and training costs, but in no case to exceed one hundred dollars ($100), and shall transmit the additional fee, if any, to the city, city and county, or county treasury.

Since 2019, and as the law remains, the language regarding the maximum amount a licensing authority may charge for the costs relating to processing a CCW license application has been omitted. As such and as legally permitted, the City of Morgan Hill is requesting full reimbursement for application processing.

Ensuing analysis from the Command Staff of the Police Department determined it will cost the City $807 to process a CCW license application for a new license; however, the Department is recommending City Council establish $800 as the City fee related to application processing. The standard CCW license would be good for two years.

The CCW fees are calculated from the fully burdened rate of the perspective police officer's time to process the application:
• Community Services Officer (6 hours total $419.52), Police Administrative Sergeant (1 hour $167.81), and a Police Captain (1 hour $209.56).

The police officers’ time is divided amongst the following processes:

Page 99 of 125 ends

6 • Review of a CCW license application, legal documents, resident documents/verification, payment collection, Livescan/Fingerprinting, review/validate three character letters, review proof of registered firearms ownership, background investigation to determine good moral character, applicant interview panel, review of psychological testing, review and validate firearms training/qualification, issuing, and enforcement.

The estimated cost for a standard Carry Concealed Weapon License is as follows:

CCW Standard License: Total cost is approx. $1,366 (This amount may fluctuate depending on what training provider the applicant selects). • DOJ Fees: $131
• City Fees: $800
• Fingerprints: $20
• Psychological Testing: $150
• Firearms Safety/Training (16 hours): Approximately $350 depending on what training agency an applicant chooses
Renewals for a Standard License: Total cost is approx. $227 (This amount may fluctuate a bit depending what training provider the applicant selects). • Department of Justice (DOJ) Fees: $52
• City Fees: $25 (per Penal Code 26190(c))
• Psychological Testing: N/A unless MHPD demonstrates a need to have a licensee see a psychologist prior to renewing their CCW • Firearms Safety/Training (4 hours): Approximately $150 dependent on the training agency an applicant chooses
Amendment/Modification to a CCW license: $10
• No DOJ Fees
• City Fees: $10 (per Penal Code 26190(e)(1).

Establish business license renewal fee:

The City currently pays HdL Companies, a 3rd party business license processor, $14 per account for every business renewing a business license annually. A fee of $14 would offset this 3rd party cost, which amounts to approximately $49,000 a year.

Update credit card service fee:

On June 23, 2021, the City Council adopted a resolution establishing new credit card service fee for development fees and transient occupancy tax (TOT) payments by credit

Page 100 of 125 ends

6 card at 2%, slightly less than 2.17% in fees paid by the City to process the transactions from the period of May 2019 to May 2021. Since then, fees have increased steadily and based on the most recent period from January 2022 to February 2023, the City pays

2.71% to process the transactions. As such, staff is proposing to increase the credit service fee to 2.7% to offset the increase in bank fees when residents and customers are paying by credit card for development fees and TOT. To continue encouraging residents and customers to sign up for autopay, online, and prompt payment, the City will continue to not charge credit card service fees for utilities, business licenses, recreation services, and other certain small fees.

COMMUNITY ENGAGEMENT:

This public hearing has been properly noticed in the Morgan Hill Times on March 24, 2023. In addition, an e-blast was sent to all registered community members.

Furthermore, an email was sent by HdL Companies, the City's third party business license processor, to Morgan Hill businesses to notify of this public hearing.

ALTERNATIVE ACTIONS:

The Council has the discretion not to adopt the proposed fees or lower them.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

On June 23, 2021, the City Council adopted a resolution to establish a credit card payment fee.

FISCAL AND RESOURCE IMPACT:

CCW license fee:

Assuming approximately 15 residents that have inquired with the Morgan Hill Police Department about CCW license, applied and qualified for CCW license, adopting the proposed fee would generate approximately $12,000 for the general fund every two years. No net impact to the general fund.

Business license renewal fee:

Adopting the proposed fee would generate approximately $49,000 for the general fund annually.

Updated credit service fee:

Adopting the updated fee would increase the net revenue for the general fund and development services fund by approximately $14,000 annually.

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.

Page 101 of 125 ends

RESOLUTION NO. 23-xxx

A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF MORGAN HILL ESTABLISHING CARRY

CONCEALED WEAPON LICENSE FEE, BUSINESS

LICENSE RENEWAL FEE, AND UPDATED CREDIT

CARD SERVICE FEE FOR DEVELOPMENT FEES

AND TRANSIENT OCCUPANCY TAX PAYMENTS BY

CREDIT CARD
WHEREAS, the City Council, pursuant to Section 3.50.010 of the Morgan Hill Municipal Code (“Code”), requires the recovery of costs reasonably born from fees and charges levied in providing the regulation, products or services enumerated in Code Chapter

3.50 – Fee and Service Charge Revenue/Cost Comparison System; and WHEREAS, the City of Morgan Hill has conducted a fee study to calculate the costs reasonably borne to provide carry concealed weapon license, business license renewal, and the specified payment by credit card, which study has been available to the public for at least ten (10) days prior to the adoption of this Resolution; and WHEREAS, the proposed establishment and updating of the fees that are the subject of this Resolution was agendized for consideration by the City Council of the City of Morgan Hill at a duly noticed public hearing of the Council held on April 5, 2023 at which hearing all interested persons were afforded an opportunity to be heard on said proposed fees; and WHEREAS, the Council heard all relevant testimony and reviewed all written materials submitted in connection with its hearing on this Resolution.

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 conducted an extensive analysis of its carry concealed weapon license, business license renewal and credit card service fees, including the cost to the City for providing the services for carry concealed weapon license, business license renewal, and payments made by credit card; and

2. Based upon the analysis and the provided information, the City (i) identifies the purpose of the proposed fees, (ii) identifies the use to which the fees will be put, (iii) demonstrates a reasonable relationship between the fees’ use and the types of services on which the fees are imposed, and (iv) demonstrates a reasonable relationship between the amount of the fees and the cost of the City's services attributable to the applications on which the fees are imposed; and

3. The City Council finds and determines the fees calculations utilized to establish carry concealed weapon license fee, business license renewal fee, and update credit card service fee for development fees and transient occupancy tax payments by credit card will not cause fee revenues to exceed the estimated cost reasonably borne of providing the services which the fees are levied; and

Page 102 of 125 ends

City of Morgan Hill
Resolution No. 23-00_

Page 2 of 7 ends

4. The City Council hereby adopts and approves the establishment of a new carry concealed weapon fee, business license renewal fee, and updated credit service fee for the development fees and transient occupancy tax payments by credit card as set forth in attached Exhibit A and incorporated by this reference; and

5. The City Council finds and determines that it is reasonable to continue to annually adjust the fees set forth in Schedule by the Consumer Price Index for Urban Wage Earners and Clerical Workers for the San Francisco, Oakland and San Jose Area, and hereby instructs, authorizes and directs the City Manager or his/her designee to so annually adjust the carry concealed weapon license fee as set forth Resolution 6503 adopted January 18, 2012 and to annually adjust business license renewal fee at the amount charges by the City’s business license processor; and

6. The City Manager or his/her designee is hereby authorized and directed to amend the City Fee Schedule to reflect the fees as set forth in Exhibit A.

7. Effective Date. This Resolution shall take effect upon its adoption; provided, however, that the New and Updated Fees established hereunder shall first be imposed and collected sixty (60) days from the date of adoption of this Resolution.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Morgan Hill at a regular meeting held on the 5th day of April, 2023.

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

APPROVED: ATTEST:
____________________________ ___________________________ MARK TURNER, Mayor MICHELLE BIGELOW, City Clerk

Page 103 of 125 ends

City of Morgan Hill
Resolution No. 23-00_

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 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. ________, adopted by the City Council at a regular meeting held on April 5, 2023.

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

DATE: _____________________ ___________________________________ Michelle Bigelow, City Clerk

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City of Morgan Hill
Resolution No. 23-00_

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EXHIBIT A

TABLE OF CONTENTS
Proposed Carry Concealed Weapon (CCW) License Fee
Updated Credit Card Service Fee
Page
1 2
Proposed Business License Renewal Fee 3

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1 City of Morgan Hill
Resolution No. 23-00_

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PROPOSED CARRY CONCEALED WEAPON (CCW)

LICENSE FEE
Personnel Hours Rate/Hr Total
Community Services Officer 6.00 $69.92 $419.52
Sergeant 1.00 $167.81 $167.81
Captain 1.00 $209.56 $209.56
Total Personnel $796.89
Permit Tracker $10.00
TOTAL COST $806.89
PROPOSED FEE $800.00

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2 City of Morgan Hill
Resolution No. 23-00_

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PROPOSED CREDIT CARD SERVICE FEE FOR DEVELOPMENT

FEES AND TRANSIENT OCCUPANCY TAX (TOT)

PAYMENTS BY CREDIT CARD
Total amount processed less utilities, debit and prepaid cards from January 2022 to February 2023 $2,068,394.23
Total credit card fees less utilities, debit and prepaid cards fees paid by City from January 2022 to February 2023 $56,107.93
Percentage 2.71%
CURRENT FEE 2.00%
PROPOSED FEE 2.70%

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3 City of Morgan Hill
Resolution No. 23-00_

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PROPOSED BUSINESS LICENSE RENEWAL FEE
Amount charges by 3rd party, HdL Companies, per account $14.00 CURRENT FEE $0.00
PROPOSED FEE $14.00

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7 CITY COUNCIL STAFF REPORT
MEETING DATE: April 5, 2023
PREPARED BY:

Edith Ramirez, Assistant City Manager
APPROVED BY: City Manager

PROVIDE DIRECTION ON NEXT STEPS FOR DOWNTOWN

COMMUNITY PARKLET AND/OR ALTERNATIVE DOWNTOWN

ACTIVATION OPTION

RECOMMENDATION(S)
Provide direction on next steps for Downtown Community Parklet and/or Alternative Downtown Activation Option.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety
Maintaining and Enhancing Infrastructure
Supporting our Youth, Seniors, and Entire Community
Enhancing Diversity and Inclusiveness
2022-2023 Strategic Priorities
Community Outreach, Engagement, and Messaging
Economic Development
Transportation
Guiding Documents
Bikeways, Trails, and Recreation Master Plan
Economic Blueprint
GIS Strategic Plan
Morgan Hill 2035 General Plan
Vision Zero
REPORT NARRATIVE:

Summary
On January 19, 2022, the City Council directed staff to take the next steps in implementing the Downtown Lane Reduction and Place Branding/Beautification project.

Within the scope of this project, the City Council approved $200,000 for a community parklet. The intent of the community parklet is to accomplish several goals, including making Downtown more walkable, supporting businesses that could not afford a parklet, and creating more community space that did not require a purchase.

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7 The primary purpose of this report is to seek feedback on the scope, goals, and process for the implementation of a community parklet and/or explore alternative Downtown activation option.

Background
The National Association of City Transportation Officials defines “Parklets” as public seating platforms that convert curbside parking spaces into vibrant community spaces.

In addition to creating additional community space, parklets serve as a buffer between cars and people, making these community spaces safer and more comfortable. The visual interest and activation that parklets provide can also encourage slower traffic.

A parklet is usually funded, constructed, and maintained by a sponsoring business. A community parklet, on the other hand, would be funded with public money, and be used by the community as a public space for seating, dining, or recreating, without the need to patronize a particular business.

In 2018, the City Council approved a Parklet Pilot Program. In 2020, in response to the COVID-19 pandemic, the City created the Al Fresco Program, streamlining Parklet permits. In May 2022, the City Council approved a Parklet Program that allows for semi-permanent parklets. The cost for designing and constructing a parklet can range between $40,000 to $90,000. In an effort to make parklets more accessible and affordable to businesses, on January 19, 2022, the Council approved $50,000 toward a Parklet Fee Financing Assistance Program to assist businesses with a $5,000 grant to help pay for the costs of parklets and comply with the new City design and safety parklet standards. In addition, the City Council approved $200,000 for a Community Parklet project to create more community spaces within the Downtown.

Through the extensive community outreach completed in 2022, City staff also heard from residents and businesses about additional ways to activate Downtown, enhancing accessibility, placemaking, and arts and culture through temporary street activations.

Temporary street activations are presented as an alternative approach to creating more community gathering spaces and opportunities.

Community Parklet Concept
The space created by the community parklet could support passive or active uses. For example, the space could provide elements such as trees, planters and benches and act as a pop-up park for seating and respite. Or it could allow for temporary displays, pop-up retail kiosks or performances. Lighting, technology, and art could be incorporated into the design and provide for enhanced beautification and branding opportunities. In order to create enough space for a community parklet, staff recommends using approximately three parking spaces. Based on the current space, visibility, and accessibility, examples of four potential locations for a community parklet have been identified below:

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7 To implement the Community Parklet, staff proposes using the Call for Artists process used for the 2015 Gateway Art Project, which resulted in the installation of multiple permanent art installations. The process includes inviting professional artists, designers, and landscape architects to submit proposals. The process entails a robust community engagement process that includes a Community Panel, a Selection Jury, and public meetings with the Library, Culture, and Arts Commission (LCAC) and City Council. The scope and selection process parameters are listed in Exhibit A (Attached).

The concept for the Community Parklet calls for artists, landscape architects or designers to develop a vision for a community parklet with an art component. While staff has identified potential locations that may fit the space needs for the Community Parklet, the final location has not been identified. Instead, staff proposes that the applicant help identify the location that best fits his/her design and proposal.

Alternative Downtown Activations
Temporary Retail Kiosks
In addition to or instead of art being incorporated into the Community Parklet, Retail Kiosks could be incorporated to activate the space and create more retail offerings and opportunities in Downtown. While Downtown restaurant offerings continue to grow, Downtown retail attractions continue to remain stagnant. The need to expand and grow retail offerings has been consistent feedback about Downtown. A retail kiosk could also act as a retail incubator and has the opportunity to build local, long-term retail investment and permanent retail tenancy in Morgan Hill.

Retail kiosks act as retail incubators, reducing the barrier to entry for independent businesses ready to grow but not quite ready to take the next step into a brick and

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7 mortar space. Retail kiosks would be available to home-based businesses as an intermediate step to a full retail lease, to new retailers curious about our market, and to existing businesses as an opportunity for a temporary expansion or to secure feedback on a new product prototype. Retail kiosks could be available through short-term, lowcost leases and could require specific hours of operation to promote greater walkability and activity during peak hours of Downtown foot traffic. A Community Parklet could incorporate two retail kiosks but would likely not be able to incorporate an art component within the existing budget.

Downtown Programming and Temporary Street Activation
Instead of or in addition to a Community Parklet, Council may choose to program Downtown with temporary street activations that are free and family friendly, promoting social and cultural connectivity across all areas of the community. The logistics for activations could include weekend street closures (Saturday and/or Sunday) of Monterey Rd, between Main and 4th Street and a collaboration with local partner organizations such as the Downtown Association, Chamber of Commerce, Visit Morgan Hill, and the Downtown Property Based Improvement District (PBID).

Programming could enhance existing events or pilot new activations. For example, the street activation could launch the first ever Downtown Morgan Hill silent disco rollerblading party or enhance the existing Wine Stroll event with the addition of a local artist show and sidewalk chalk art competition. Additional activation ideas could include: "Doggy Days of Summer" pet activation in collaboration with Operation Freedom Paws, Air for Paws, and the Santa Clara County Animal Shelter, a "Cultural Festival" in collaboration with LCAC and the Morgan Hill Historical Society, and a Picnic and Plant sale in collaboration with local farmers and growers. Day-long activations could end with a free family-friendly outdoor movie night that fits the theme of the programming. These temporary weekend street closures with programming would increase walkability, while supporting and increasing visibility for existing Downtown restaurants and retail shops.

Potential Next Steps
The main goal of the Placemaking Investment Strategy is to make the Downtown the most walkable, bike-friendly, urban, family-oriented, and transit-oriented neighborhood in Morgan Hill. While parklets contribute to making a community more inviting, temporary street closures accompanied by event programming would create a pedestrian-friendly environment, enhance visual interest and increase activation of Downtown. In addition, the Downtown activations would bring increased social, cultural, and connectivity to the community, advancing the City’s goals to make Downtown the community’s “living room.” In alignment with the goals of the original Community Parklet concept, City staff recommends the City Council consider temporary weekend street closures to create new activations or enhance existing programs.

COMMUNITY ENGAGEMENT:

COLLABORATE
Community Parklet and Downtown Activation Presentations were given at the following public meetings:

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7 February 9, 2023- Morgan Hill Chamber of Commerce Economic Development Meeting February 16, 2023- Morgan Hill Downtown Association Board Meeting February 27, 2023- Visit Morgan Hill Board Meeting
March 6, 2023- Two Community Participation Meetings
ALTERNATIVE ACTIONS:

1. The Council may provide direction on the scope, goals, and process for the community parklet selection process.

2. The Council may choose to allocate a portion of the funds for the community parklet to one of the alternative activation ideas.

3. The Council may choose to redirect the community parklet funds to one of the alternative Downtown activation ideas.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

On January 19, 2022, the Council approved the first steps to a Lane Reduction and Placebranding/Beatification project that included direction and funding for a Community Parklet with art installation.

FISCAL AND RESOURCE IMPACT:

The Council has appropriated $200,000 for the project. No additional funds are necessary to implement the Community Parklet with art.

Retail Kiosks cost approximately $50,000 each. Staff anticipates being able to construct a Community Parklet with two Retail Kiosks within the current budget. No additional funds would be necessary to implement the Community Parklet with Retail Kiosks.

Downtown Programming and Temporary Street Activations could be implemented within the existing budget. A single Downtown street activation would cost approximately $40,000. The existing budget could support between four to six activations. No additional funds are necessary to fund the Downtown Programming and Temporary Street Activations.

CEQA (California Environmental Quality Act):

Categorical Exemption
This project is categorically exempt from environmental review under CEQA pursuant to California Code of Regulations, Title 21, Section 15304(b) (Minor Alterations to Land which do not involve removal of healthy, mature, scenic trees).

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Exhibit A

COMMUNITY PARKLET AND ART INSTALLATION PROJECT
SCOPE
Design and construction of a community parklet to enliven the landscape and enrich the fabric and culture of Downtown Morgan Hill. The project should result in the creation of a new community gathering space through the utilization of parking spaces to create one or a series of installations. The community parklet can offer passive or active recreation. The design should be visually interesting and inviting. A successful installation is one that is inclusive to all people, is visually attractive and interesting, and creates place branding. Interactive art is desired but not required. Long-term sustainability and maintenance requirements are to be considered.

OPPORTUNITY
The City of Morgan Hill has budgeted $200,000 for the Downtown community parklet project. The project could be in a single location or in multiple locations located within Downtown to achieve the greatest community impact and utilization. The City may choose to award multiple projects that meet the goals of the project. Proposals should be inclusive of all project costs, including design, engineered drawings, fabrication, and installation.

Applicants are encouraged (not required) to work with partners who can provide financial support or inkind support in the form of materials, labor, or project maintenance to leverage public art funds and assist in the creation and/or maintenance of the project. Interactive art installations, use of lighting and technology is encouraged to bridge the City’s past, present, and future, embracing Morgan Hill’s location within Silicon Valley, strong roots in agriculture, and the growing bicycle culture.

LOCATION
A Community Parklet is envisioned to utilize approximately three (3) parking spaces to create a large enough space to allow for community gatherings. There are several locations along Monterey Road that offer three or more continuous parking spaces. While staff has identified potential locations that may fit the space needs for the Community Parklet, the final location has not been identified. Instead, staff proposes that the applicant help identify the location that best fits his/her design and proposal.

PROJECT PERMANANCY
Construction of the project would be semi-permanent in nature. Elements of a parklet should include some permanent elements such as signage, roadway striping (if necessary), and the use traffic control devices.

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Exhibit A

SELECTION PROCESS
The selection process will mirror the Morgan Hill Gateway Art selection process, which included a Request for Proposal (RFP), a Community Panel, a Jury of Practitioners, and review and selection by the Library, Culture, and Arts Commission (LCAC) and final approval of project/art commission by the City Council.

Phase 1—Community Panel: A Community Panel made up of representatives from LCAC, City staff and community-based organizations and community members with perspectives that are inclusive of residents, businesses, and property owners will review all the applications and recommend up to ten (10) Semi-Finalists.

Phase 2—Selection Jury: The Jury will be made up of artists with backgrounds in art history/teaching, or public art, landscape architects, and people with construction backgrounds. Jury will recommend up to four (4) semi-finalists to complete Conceptual Designs supported with a $1,000 honorarium.

Phase 3—Finalist Selection: Design Concepts completed by the semi-finalists will be reviewed by the Selection Jury. City staff and Selection Jury will make recommendations to LCAC of one or more finalist.

LCAC will make final recommendation(s) to the Morgan Hill City Council.

TENTATIVE SCHEDULE
April 2023 Issue RFP
May 2023 Proposals Due
June 2023 Community Panel selects Semi-Finalists
July 2023 Jury to hold interviews and review Conceptual Designs August 2023 Planning Commission Review
September 2023 City Council Selection & Contract Award
Summer 2024 Community Parklet & Art Installation

SELECTION CRITERIA
The following criteria will be considered:
• Concept—Artist, Landscape Architect or Designer’s vision for community parklet. Consideration will be given to creativity and use of art. The review of the project concept will include a review of the project’s proposed budget, use of materials, longevity of the project and the applicant’s ability to execute.
• Experience-- Artist, Landscape Architect or Designer’s relevant experience and qualifications of project’s personnel. Review of relevant experience of public projects or art projects in the public right-of-way.
• Project Specifics-- Appropriateness of budget, its feasibility, and maintenance requirements. • Community Impact—Project’s ability to engage and highlight the community by celebrating diversity and inclusiveness, enhancing livability, creating place branding, and celebrating Morgan Hill’s rich and diverse context.

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Exhibit A
Examples

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From: Brittney Sherman
To: Christina Turner
Subject: DOWNTOWN COMMUNITY PARKLET AND ALTERNATE ACTIVATIONS – Questions and Answers Date: Thursday, March 30, 2023

COMMUNITY PRESENTATION Q & A

1. Can we choose all three options or only one?
City Council has the option to choose (1) of the Community Parklet projects, either consisting of an art activation or retail kiosk, the (1) alternate activation idea, or a combination of both. However, the more projects the funding is spread across the less of an impact and footprint each project will have. For instance, if funding is spread between a Community Parklet and the alternative activation, it might result in no art activation or reduced number of Downtown Programming events.

2. Are the four locations outlined on the Downtown Monterey Rd map the only locations being considered for a parklet? How will the final location be selected? The (4) locations identified on the map on Monterey Rd are examples of areas where (3) adjacent parking spaces could be used to build a community parklet. The exact location of the parklet would be determined based on the selected artist’s design and which location best compliments the design.

3. Can you explain the color coding on the goals per activation slide? Council goals for the Community Parklet have been paired with all (3) of the project proposals.

How well each project addresses each goal determines whether it receives a green, yellow, or red check mark. Green signifies the goal is 100% achieved, yellow signifies portions of the goal are achieved, and red signifies the project does not meet that goal.

4. What is the lifespan and fiscal sustainability of each of the three options? The lifespan of either the community parklet with art activation or community parklet with retail kiosks would be a minimum of (7) years, in alignment with restaurant parklets operating under the Outdoor Dining Program. Ongoing maintenance and upkeep/replacement would be required over the years. The Temporary Programming and Street Activation could create anywhere from 4-6 community events based on the programming cost and whether it supports a new program or an existing event. There would be no ongoing maintenance or upkeep/replacement with this option.

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5. Regarding the retail kiosks, how much money and how long would it take for the kiosks to be constructed, implemented, and leased?
The full community parklet funding would cover the cost to build the parklet and purchase and install the retail kiosks. We would estimate the parklet and kiosks to be implemented and leased during Fall 2023.

6. As it relates to the retail kiosks, why are there required dates/times of operation? Through the years, and most recently during the Community Workshops, Morgan Hill residents have asked for more retail Downtown and longer hours of existing retail shops. Requiring retailers leasing the kiosks to operate on certain days/times of the week, is an effort to activate the streetscape when foot traffic is highest and encourage existing retailers to also stay open and encourage patronize during those times.

7. General "community parklets" in theory are great and can definitely add to our downtown.

But, what I have seen in other areas is that without oversight they can become mis-used and sometimes attract unexpected maintenance issues such as graffiti, trash, homeless use, and other unexpected concerns. I simply mention this as whatever is chosen to be created will also need solutions for these kinds of issues that might arise. When there is no private business responsibility, unfortunately it falls back on the City to keep watch and deal with issues. Will people know how to report issues and to whom? This will need to be addressed so people feel aware and confident on resolutions if anything comes up.

We have parklets in front of some of the properties we own elsewhere that are used by the businesses in the buildings and they simply love them. But even then it can become an issue of who is going to clean them up when people don't pick up their mess, or kids decide to add their "artwork" to the seats or walls etc... I don't have any solutions for your project, but I am simply bringing up that unlike current parklets that a specific business is responsible for, the public parklet clean up, maintenance and oversight will be an important aspect of this project as well.

General cleanliness, trash abatement, graffiti removal, and lighting component replacements have all been listed under the Community Parklet and Retail Kiosk activation ideas and the long-term maintenance required for each of the activations will be considered. The Temporary Programming and Street Activation idea already has maintenance built into each event budget and is limited to the number of events we can hold Downtown with a $200k overall budget. This activation is sustainable from a cleanliness and trash abatement sense, but not specifically in a long-term sense because once the $200k has been used, that is the end of the activation, unless of course another community organization manages, operates, and funds it in future years.

8. We consulted with our tenants before installing a decent parklet at one of our properties - At the time none of the tenants wanted any shade in the parklet design as it would block the view of the front of their businesses from the street. Then after they began using them and they realized the added value for their business use, now they all want shade to be added for the hot summers when people enjoy the outdoors but not the blazing sun. It is just a comment - again, I

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have no real solution to offer on this. But perhaps it will make a difference on what side of the street you may place the initial "test" parklet on for summer shade consideration.

Only two of our restaurant parklets are investing in overhead covers due to the cost of materials and an engineering review, however I am sure others would have liked to if they could have afforded it. If City Council decides to choose the Community Parklet and Art Activation idea an overhead component will be considered.

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From: Michelle Bigelow
To: Michelle Bigelow
Subject: FW: Doug Muirhead comment re: Downtown Community Parklet and Alternative Activations Presentation Date: Thursday, March 30, 2023 12:40:04 PM
From: D. Muirhead
Sent: Saturday, March 18, 2023 8:18 PM
To: Brittney Sherman <[email protected]> Subject: comment Downtown Community Parklet and Alternative Activations Hello Brittney,
I guess the new "in" word for City People is "activations".

I know I am not your target audience. When someone says "walkable" I always want to add "and other non-motorized modes of travel".

You said "city not looking to purchase". I first thought you meant not purchase land for Parklet (city takes 3 adjacent parking spaces} but later it seemed to relate to not having to buy from biz? You have goals: accessible, inclusive, free, walkable,
activate sidewalks, branding, visitor trips, support existing biz I assumed wrongly that Alternative Activations meant Parklet but Not Community rather than Not Parklet.

So as far as Parklets go, I am not in favor of your Retail Kiosk.

While I like the concept of retail incubator and low-cost entry, I feel we are already overwhelmed with advertising and want Parklets to support community interaction and not sell products or the City (branding).

Artful seating is nice. Bike parking is also nice.

So that takes us to alternative activations that have nothing to do with Parklets. Does that have to be only one or the other? Why not both! You mentioned free family-friendly events, 1-day weekend only street closure (multiple blocks), collaborate with local partners and non-profits, local rather than regional attendance, free and paid components.

My ideal would be to replace the streets in downtown with a pedestrian plaza with traffic circulating around an outside oval. But 2022 Measure B shows car lovers are still in control. So I am eager to see how the May Open Streets event from the Bike/Ped team evolves. I passed on some thoughts based on San Jose Viva Calle, although we cannot really scale a 4-6 mile route with branches down to 4-5 blocks.

Because I am visual rather than verbal, I wish you had put the slides up

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on your Econ Dev web site. I was surprised by the Open Streets alternative to Parklets, but I complement you on your range of thoughtful options.

Regards, DougM
WARNING: This message is from an external user. Confidential information such as social security numbers, credit card numbers, bank routing numbers, gift card numbers, wire transfer information and other personally identifiable information should not be transmitted to this user. For question, please contact the Morgan Hill IT Department by opening a new helpdesk request online or call 408-909-0055.

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From: Michelle Bigelow
To: Michelle Bigelow
Subject: FW: Tena Knea resident feedback re: Downtown Community Parklet and Alternative Activations Presentation Date: Thursday, March 30, 2023 12:46:49 PM
From:

Sent: Tuesday, March 21, 2023 11:00 AM
To: Brittney Sherman <[email protected]> Subject: Downtown Community Parklet
Dear Brittney,
I realize that I am sending this feedback email after yesterday's deadline, but I hope you will at least read it and give it some thought.

I am writing to express my concerns regarding the proposed Community Parklet. After reviewing the PowerPoint Slide Show, I realize that one of the criterias calls for the Parklet to be built on Monterey Road. Also one of the criterias is that it will take 3 adjacent parking spaces. Both criterias are extremely frustrating.

I am a local citizen of Morgan Hill for the past 20+ years. I have established and frequent several Downtown businesses (Hair Salon, Clothing Store, Bank, etc.) and restaurants will regularity. I also have medical issues that require the use of a disabled parking placard, or I can park in other spaces as long as they are located relatively close to the business. Please don't suggest that I use the 4th Street garage. It is located too far away from the businesses that I frequent. The availability of marked disabled spaces throughout the Downtown area are not ideal. 2 new spaces near the public lot between 2nd and 3rd supposedly are for only the use of the Giorgio's Restaurant? (Their food delivery trucks constantly park there for extended periods of time even if I was a paying customer.) The 2 spaces on 3rd Street and Monterey are difficult to maneuver. They are set back with an additional 3rd space that most drivers then encroach into the disabled spot. Boulders and poles are another challenge as you try to park, along with dealing with all of the double-parked delivery trucks. There are several new spaces near the train station, but again they are too far away from Downtown area. For these reasons I rely heavily on available street parking spaces near the businesses.

Also, the amount of restaurant parklets that have been allowed to be permitted are ridiculous. They take up large amounts of public parking spaces during the work week when they are not even open until the evening, or they do not do enough business to even put the tables out.

Mohi Social and Sushi Confidential are 2 prime examples. I know that these businesses paid their large permit fees, but for the sake of

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reasonable public parking during the day so that we can still frequent Downtown businesses?
Add to the list of reserving public parking spaces is Pediatric Pathways on 2nd Street. The business received complaints about their abuse of parent pick-up double-parking. No one would really mind if the instructors didn't chat up the parents for up to 15 minutes on the street. They have a large waiting area at their business for consults/updates. There's also email, text messages, and Zoom. But somehow they now have permission to put cones out on the street during their business hours, which is 9am5:30pm M-F? That's another 2 public parking spaces gone.

If this Community Parklet and Art Installation does move forward, please consider utilizing the one possible location that would have the least amount of impact to public parking. In my opinion it is the one marked near the Morgan Hill Amphitheater. Less congestion, more of a draw to the southern end of the Downtown area, and a parking lot nearby for accessibility.

Thank you for your time.....

Tena Knea
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Hi Ms. Sherman,
Morgan Hill Downtown Association thanks you for the recent Community Parklet presentation and opportunity to present Alternative Action to a Parklet model in the Downtown. We propose activating Temporary Weekend-Only Monterey closure(s) and have 3 groundwork concepts meeting the goals of Community Parklet.

1. Trick Or Treat - MHDA imagines an enhancement of the Safe Trick Or Treat event held Halloween Night, and we have more detail on that idea. Structure of community events have changed over the past few years making nigh�me events with large crowds a higher security risk -- especially those involving large gatherings of children. “Safe” Trick or Treat now brings with it increased security concerns. MHDA is proposing a change to this event that will increase safety, reduce traffic disrup�on, benefit downtown businesses, encourage par�cipa�on from the broader Morgan Hill community and reduce costs. The proposal is modeled a�er Pacific Grove’s Downtown Trick or Treat Event, that has run successfully for over 10 years.

Current “Safe Trick or Treat” -- Held Halloween Night, 5-7pm (after dark) • Monterey Street closed during commute hours crea�ng traffic complaints (if Halloween is Monday-Friday)
• Protec�on is needed from MHPD and costs have increased significantly year over year • Halloween night is an already busy night for any police department and current event places addi�onal demand on a lean department
• Much of the Downtown is not open for business:
o All Retail is closed by 5pm; many are not open at all on Monday and Tuesday o Many restaurants are closed Monday and Tuesday evenings • Some par�cipants have complained that some trick or treaters are wearing costumes are not family friendly
Proposed “Downtown Trick or Treat” -- Held the Saturday before Halloween, 10:00 am – 1:00 pm • Monterey Street closed Saturday morning-early a�ernoon, re-opening late a�ernoon • Daylight event does not require excess as much police department engagement • All Downtown is open for business: retail and restaurants • Families spend the a�ernoon in the Downtown enjoying fes�vi�es, restaurants, farmer’s market, etc.
• All Morgan Hill Businesses (outside of the downtown) encouraged to par�cipate with a “Trunk or Treat”. Their vehicles will be parked along Monterey Street with business signage • Event could be supplemented with family-friendly vendors • An�cipated large turnout of young families

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Benefits:
• Provides a Safer Trick or Treat environment
• Benefits downtown businesses
• Engages and benefits broader Morgan Hill business community • Eliminates traffic issues for commuters
• Enables planning consistency (consistent day of week, year to year) • Beter leverages of Police resources on Halloween night

2. Downtown Doggie Day A�ernoon – concept in the works. Comparable to the annual Carmel Poodle Day weekend (Google it for the basic idea), the MHDA event will unite pooch owners and lovers and their furry friends for a fun-filled day. Our Doggy Parade held during Brew Crawl in 2022 was a huge success and has much room for expansion to the community’s delight.

3. Downtown Fiesta – concept in the works. This could be held as a mul�-cultural family friendly event. We envision tradi�onal fare, music, dancing, art, and history embracing the roots of all in our community.

We feel the above events are the right fit addressing the Alterna�ve Ac�on and hope City is in alignment. Please let us know your thoughts and provide direc�on going forward.

Thanks for your �me and all you do for the community.

Best Regards,
David Dindak – MHDA BOD President
MHDA Board of Directors

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Morgan Hill City CouncilApril 5, 2023

Morgan Hill City Council
April 5, 2023