Morgan Hill City Council
October 4, 2023

Davidson Parcels Conservation Easement
12 “Landowner Indemnified Party,” and collectively, the “Landowner Indemnified Parties”) from and against any and all liabilities, penalties, costs, losses, damages, expenses (including, without limitation, reasonable attorneys' and experts’ fees and costs), causes of action, claims, demands, orders, liens or judgments (each a “Claim” and, collectively, “Claims”), arising from or in any way connected with: (i) the activities of Easement Holder on the Property, including without limitation the Easement Holder’s performance of monitoring activities set forth in the Management Plan; (ii) breach by Easement Holder of any provision of this Agreement; (iii) any injury to or the death of any person, or physical damage to any Property occurring on or about the Property resulting from any act, omission, condition, or other matter related to, an activity on, or use of, the Property by Easement Holder , unless due solely to the negligence or willful misconduct of the Landowner Indemnified Parties; and (iv) any violation of, or failure to comply with, any state, federal or local law, regulation or requirement, by Easement Holder in any way affecting, involving or relating to the Property.

If any action or proceeding is brought against the Landowner or any of the Landowner Indemnified Parties because of any such Claim, Easement Holder shall, at the election of and upon written notice from Landowner, defend such action or proceeding by counsel acceptable to the Landowner or any Landowner Indemnified Party.

12. Extinguishment. The Conservation Easement created by this Agreement constitutes a property right. It is the Parties’ intention that this Agreement shall be carried out in perpetuity.

Liberal construction is expressly required for purposes of effectuating the Conservation Easement in perpetuity, notwithstanding economic hardship or changed conditions of any kind. If circumstances arise in the future that render the purposes of this Agreement impossible to accomplish, this Agreement can only be terminated or extinguished, in whole or in part, by judicial proceedings in a court of competent jurisdiction. In addition, no such extinguishment shall affect the value of Easement Holder’s interest in the Property, and if the Property, or any interest therein, is sold, exchanged or taken by power of eminent domain after such extinguishment, Easement Holder shall be entitled to receive the fair market value of the Conservation Easement at the time of such extinguishment. If such extinguishment occurs with respect to fewer than all acres of the Property, the amounts described above shall be calculated based on the actual number of acres subject to extinguishment.

13. Condemnation. Pursuant to California Code of Civil Procedure Section 1240.055, this Conservation Easement is “property appropriated to public use,” as used in Article 6 (commencing with section 1240.510) and Article 7 (commencing with section 1240.610) of Chapter 3 of Title 7 of the Code of Civil Procedure. A person authorized to acquire property for public use by eminent domain shall seek to acquire the Property, if at all, only as provided in Code of Civil Procedure section 1240.055. CDFW is a public entity that imposed conditions on approval of a project that were satisfied, in whole or in part, by the creation of this Conservation Easement. If any person seeks to acquire the Property for public use, Grantee shall provide notice to CDFW and comply with all obligations of the holder of a conservation easement under Code of Civil Procedure section 1240.055. If the Conservation Easement is condemned, the net proceeds from the condemnation shall be used in compliance with Government Code section 65966(j).

Davidson Parcels Conservation Easement
13 14. Transfer of Conservation Easement. This Agreement may be transferred by Easement Holder upon written approval of the Third-Party Beneficiaries, which approval shall not be unreasonably withheld or delayed; provided, that Easement Holder shall give the Third-Party Beneficiaries at least sixty (60) calendar days prior written notice of the proposed assignment or transfer. Easement Holder may transfer its rights under this Agreement only to an entity or organization: (a) authorized to acquire and hold conservation easements pursuant to California Civil Code Section 815.3 and California Government Code Section 65967 (and any successor or other provisions then applicable), or the laws of the United States; and (b) otherwise reasonably acceptable to the Third-Party Beneficiaries. Easement Holder shall require the transferee to record the conveyance in the Official Records of Santa Clara County. The failure of Easement Holder to perform any act provided in this section shall not impair the validity of this Agreement or limit its enforcement in any way. Any transfer under this section shall be subject to the requirements of Section 15 below.

15. Transfer of Property. Landowner agrees to incorporate the terms of this Agreement by reference in any deed or other legal instrument by which Landowner divests itself of any interest in all or any portion of the Property, including, without limitation, a leasehold interest. Landowner further agrees to give written notice to Easement Holder and the Third-Party Beneficiaries of the intent to transfer any interest at least thirty (30) calendar days prior to the date of such transfer.

Easement Holder and the Third-Party Beneficiaries shall have the right to prevent subsequent transfers in which prospective subsequent claimants or transferees are not given notice of the covenants, terms, conditions, and restrictions of this Agreement. The failure of Landowner to perform any act provided in this section shall not impair the validity of this Agreement or limit its enforceability in any way. Any successor in interest of Landowner, by acceptance of a deed, lease, or other document purporting to convey an interest in the Property, shall be deemed to have consented to, reaffirmed and agreed to be bound by all of the terms, covenants, restrictions, and conditions of this Agreement.

16. Notices.
(a) Any notice, demand, request, consent, approval, or communication that Landowner, Easement Holder, or any Third-Party Beneficiary desires or is required to give to the others shall be in writing and be served personally or sent by recognized overnight courier that guarantees next-day delivery or by first class mail, postage fully prepaid, addressed as follows:

To Landowner: Santa Clara Valley Habitat Agency
535 Alkire Avenue, Suite 100
Morgan Hill, CA 95037
Attn: Executive Officer
With Copy To: Santa Clara Valley Habitat Agency
535 Alkire Avenue, Suite 100

Davidson Parcels Conservation Easement
14 Morgan Hill, CA 95037
Attn: General Counsel
To Easement Holder: Land Trust of Santa Clara Valley
605 Tennant Avenue, Suite H
Morgan Hill, CA 95037
Attn: Executive Director
To USFWS: United States Fish and Wildlife Service
Sacramento Fish and Wildlife Office
Coast-Bay Division
2800 Cottage Way, Room W-2605
Sacramento, CA 95825
Attn: Coast-Bay Division Supervisor
To CDFW: California Department of Fish and Wildlife
Bay Delta Region
2825 Cordelia Road, Suite 1000
Fairfield, CA 94534
Attn: Regional Manager
With a copy to: California Department of Fish and Wildlife Office of the General Counsel
715 P Steet
Sacramento, California 95814
Attn: General Counsel
or to such other address as a Landowner, Easement Holder or Third-Party Beneficiary shall designate by written notice to the others. Notice shall be deemed effective upon delivery in the case of personal delivery or delivery by overnight courier or, in the case of delivery by first class mail, five (5) calendar days after deposit into the United States mail. (b) Coordinating Communication. Communication related to advance notice and approval for property access by Easement Holder for the purpose of conducting actions as outlined in the Management Plan may be provided and responded to electronically (e.g., email). Easement Holder’s request to access the property shall be provided with enough advanced notice for Landowner to reasonably review the request.

17. Amendment. This Agreement may not be amended, modified or otherwise changed in any manner, except by a written amendment executed by the parties hereto, or their successors in interest, it being understood that no easement holder or landowner will ever be obligated to negotiate or enter into any such amendment; and no discretionary approval that this Agreement may allow to be made from time to time by a party will operate to amend or modify any of the terms of this

Davidson Parcels Conservation Easement
15 Agreement to any extent or in any manner. Any such amendment shall be subject to the prior written consent of the Third-Party Beneficiaries; any amendment made without such consent is void and without effect. Any such amendment shall be consistent with the purposes of the Conservation Easement and shall not affect the perpetual duration of the Conservation Easement. Any such amendment must refer to this Agreement by reference to its recordation data, and must be recorded in the Official Records of Santa Clara County.

18. Merger. The doctrine of merger shall not operate to extinguish the Conservation Easement if the Conservation Easement and the Property become vested in the same party. If, despite this intent, the doctrine of merger applies to extinguish the Conservation Easement then, a replacement conservation easement, with a new Easement Holder identified by the Implementing Entity and approved by the Third-Party Beneficiaries, containing the same protections embodied in this Agreement shall be recorded against the Property.

19. No Hazardous Materials Liability. Landowner represents and warrants that, after reasonable review of Landowner’s records as of the date of this Agreement, Landowner has no knowledge or notice of any Hazardous Materials (as defined below) or underground storage tanks existing, generated, treated, stored, used, released, disposed of, deposited or abandoned in, on, under, or from the Property, or transported to or from or affecting the Property Landowner further represents and warrants that Landowner shall comply with all Environmental Laws (as defined below) in using the Property and that Landowner shall keep the Property free of any material environmental defect, including, without limitation, contamination from Hazardous Materials (as defined below). Without limiting the obligations of Landowner under this Agreement, Landowner hereby releases and agrees to indemnify, protect and hold harmless the Easement Holder Indemnified Parties (as defined in Section 11(a)) from and against any and all Claims (as defined in Section 11(a)) arising from or connected with any Hazardous Materials or underground storage tanks present, alleged to be present, or otherwise associated with the Property at any time, except any Hazardous Materials placed, disposed or released by Easement Holder Indemnified Parties, or their employees or agents. This release and indemnification include, without limitation, Claims for (a) injury to or death of any person or physical damage to any Property; and (b) the violation or alleged violation of, or other failure to comply with, any Environmental Laws (as defined below). If any action or proceeding is brought against any of the Easement Holder Indemnified Parties because of any such Claim, Landowner shall, at the election of and upon written notice, defend such action or proceeding by counsel acceptable to the Easement Holder Indemnified Party.

Despite any contrary provision of this Agreement, the parties do not intend this Agreement to be, and this Agreement shall not be, construed such that it creates in or gives to Easement Holder or the Third Party Beneficiaries any of the following:
(a) The obligations or liability of a "Landowner" or "operator," as those terms are defined and used in Environmental Laws (as defined below), including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601 et seq.; hereinafter, "CERCLA"); or

Davidson Parcels Conservation Easement
16 (b) The obligations or liabilities of a person described in 42 U.S.C. Section 9607(a)(3) or (4); or
(c) The obligations of a responsible person under any applicable Environmental Laws; or
(d) The right to investigate and remediate any Hazardous Materials associated with the Property; or
(e) Any control over Landowner's ability to investigate, remove, remediate or otherwise clean up any Hazardous Materials associated with the Property.

The term “Hazardous Materials” includes, without limitation, (a) material that is flammable, explosive or radioactive; (b) petroleum products, including by-products and fractions thereof; and (c) hazardous materials, hazardous wastes, hazardous or toxic substances, or related materials defined in CERCLA, the Resource Conservation and Recovery Act of 1976 (42 U.S.C.

Section 6901 et seq.; hereinafter “RCRA”); the Hazardous Materials Transportation Act (49 U.S.C.

Section 6901 et seq.; hereinafter “HTA”); the Hazardous Waste Control Law (California Health & Safety Code Section 25100 et seq.; hereinafter “HCL”); the Carpenter-Presley-Tanner Hazardous Substance Account Act (California Health & Safety Code Section 25300 et seq.; hereinafter “HAS”), and in the regulations adopted and publications promulgated pursuant to them, or any other applicable Environmental Laws now in effect or enacted after the date of this Agreement.

The term “Environmental Laws” includes, without limitation, CERCLA, RCRA, HTA, HCL, HSA, and any other federal, state, local or administrative agency statute, ordinance, rule, regulation, order or requirement relating to pollution, protection of human health or safety, the environment or Hazardous Materials.

20. Representations and Warranties. Landowner hereby makes the following representations and warranties for the benefit of Easement Holder and the Third-Party Beneficiaries:
(a) Authority. Landowner has good and sufficient title to the Property (including all appurtenances thereto, including, without limitation, all minerals and mineral rights and all water and water rights, and Landowner has full right and authority to enter into this Agreement and convey the Conservation Easement to Easement Holder. There are no monetary liens and encumbrances recorded against the Property, except as expressly identified in Exhibit E. All deeds of trust and mortgages, if any, recorded against the Property, or any portion thereof, are and shall continue to be subordinated to this Conservation Easement. A subordination agreement regarding the use restrictions applicable to a portion of the Easement Area set forth in Document No. 13338719 recorded June 20, 1996, in the Official Records of the Santa Clara County Recorder (“Official Records”) will be recorded simultaneously with this Agreement; documentation of such subordination is contained in Exhibit E-1.

Davidson Parcels Conservation Easement
17 (b) Compliance with Laws. Landowner has not received notice of, and has no knowledge of, any material violation of any federal, state, county or other governmental or quasi-governmental statute, ordinance, regulation, law or administrative or judicial order with respect to the Property.
(c) No Litigation. There is no action, suit or proceeding which is pending or threatened against the Property or any portion thereof relating to or arising out of the Landownership or use of the Property, or any portion thereof, in any court or in any federal, state, county, or municipal department, commission, board, bureau, agency or other governmental instrumentality.

21. General Provisions.
(a) Controlling Law; Jurisdiction; Venue. The interpretation and performance of this Agreement shall be governed by the laws of the State of California, disregarding the conflicts of law principles of such state, and by applicable federal law. Any suit, mediation, arbitration, litigation, hearing or proceeding relating to this Agreement shall be brought only in Santa Clara County, California.
(b) Liberal Construction. It is the intent of this Agreement to preserve the condition of the Property and each of the Conservation Values protected herein, notwithstanding economic, or other hardship or changes in circumstances or conditions. The provisions of this Agreement shall be liberally construed to effectuate the purposes of the Conservation Easement and to allow Landowner’s use and enjoyment of the Property to the extent consistent with such purposes. Liberal construction is expressly required for purposes of effectuating this Agreement in perpetuity, notwithstanding changed conditions of any kind. The Conservation Easement created by this Agreement is the intended best and most productive use of the Property. No remedy or election given by any provision in this Agreement shall be deemed exclusive unless so indicated, but it shall, wherever possible, be cumulative with all other remedies at law or in equity. The parties acknowledge that each party and its counsel have had the opportunity to review and revise this Agreement and that no rule of construction that ambiguities are to be resolved against the drafting party shall be employed in the interpretation of this Agreement. In the event of any conflict between the provisions of this Agreement and the provisions of any use and zoning restrictions of the State of California, the County of Santa Clara, or any other governmental entity with jurisdiction, the more restrictive provisions shall apply. If any provision in this instrument is found to be ambiguous, an interpretation consistent with the purposes of this Agreement that would render the provision valid shall be favored over any interpretation that would render it invalid.
(c) Meet and Confer. In the event either party determines there is a need to meet and confer to resolve any discrepancy of findings related to, or to validate or determine compliance with, this Conservation Easement, then authorized representatives from all affected parties will act in good faith to meet and confer in order to resolve the discrepancy

Davidson Parcels Conservation Easement
18 or issue in a timely manner, before any additional adverse action, finding or litigation is pursued.
(d) Severability. If a court of competent jurisdiction voids or invalidates on its face any provision of this Agreement, such action shall not affect the remainder of this Agreement. If a court of competent jurisdiction voids or invalidates the application of any provision of this Agreement to a person or circumstance, such action shall not affect the application of the provision to other persons or circumstances. (e) Entire Agreement. This instrument sets forth the entire agreement of the parties with respect to this Agreement and supersedes all prior discussions, negotiations, understandings, or agreements relating to this Agreement. No alteration or variation of this instrument shall be valid or binding unless contained in an amendment in accordance with Section 17.
(f) No Forfeiture. Nothing contained herein will result in a forfeiture or reversion of Landowner's title, rights, or interest in or to the Property in whole or in part, in any respect.
(g) Successors. The covenants, terms, conditions, and restrictions of this Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective personal representatives, heirs, successors, and assigns and shall constitute a servitude running in perpetuity with the Property.
(h) Termination of Rights and Obligations. A party's rights and obligations under this Agreement terminate upon transfer of the party's interest in the Agreement, except that liability for acts or omissions occurring prior to transfer shall survive transfer. (i) Captions and Headings. The captions and headings used in this Agreement have been inserted solely for convenience of reference and are not a part of this Agreement and shall have no effect upon its construction or interpretation. (j) Additional Easements. Landowner shall not grant any additional easements, rights of way or other interests in the Property (other than a security interest that is subordinate to this Agreement) or grant or otherwise abandon or relinquish any water right or agreement relating to the Property, without first obtaining the written consent of Easement Holder and the Third-Party Beneficiaries. Easement Holder and the Third-Party Beneficiaries may withhold such consent if it determines that the proposed interest or transfer is inconsistent with the purposes of this Conservation Easement or will impair or interfere with the Conservation Values. This section shall not prohibit transfer of a fee or leasehold interest in the Property that is subject to this Agreement and complies with Section 15.

Davidson Parcels Conservation Easement
19 (k) Recording. Easement Holder shall record this Agreement in the Official Records of Santa Clara County and may re-record it at any time as Easement Holder deems necessary to preserve its rights hereunder.
(l) Authority. Each person executing this Agreement on behalf of a Party to this Agreement warrants and represents that he or she is duly authorized to execute and deliver this Agreement on such Party's behalf.
(m) Compliance with Laws. Easement Holder, the Easement Holder Indemnified Parties, Landowner, the Landowner Indemnified Parties, and the Third-Party Beneficiaries shall at all times comply with all local, state, and federal laws while on, in or about the Property.
(n) Counterparts. The Parties may execute this Agreement in two or more counterparts, which shall, in the aggregate, be signed by both parties; each counterpart shall be deemed an original instrument as against any party who has signed it. In the event of any disparity between the counterparts produced, the recorded counterpart shall be controlling. //
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Davidson Parcels Conservation Easement
20 IN WITNESS WHEREOF, Landowner and Easement Holder have executed this Agreement the day and year first above written.

LANDOWNER:

Santa Clara Valley Habitat Agency, a California Joint
Powers Authority
By: _________________________
Name: Edmund Sullivan
Title: Executive Officer
APPROVED AS TO FORM:

By: _______________________________
Name: Valerie Armento
Title: General Counsel for SCVHA
EASEMENT HOLDER:

Land Trust of Santa Clara Valley, a California 501(c)3
Non-Profit Corporation
By: __________________________
Name: Trina Hineser
Title: Executive Director

Davidson Parcels Conservation Easement
21 EXHIBITS:

Exhibit A -- Legal Description of the Property
Exhibit B -- Maps of the Property
Exhibit C -- Initial Conservation Values
Exhibit D -- Allowed Uses
Exhibit E -- Title Exceptions
Exhibit E -1 Subordination Agreement

Davidson Parcels Conservation Easement
A-1
Exhibit A
Legal Description of the Property
Real property in the City of Morgan Hill, County of Santa Clara, State of California, described as follows:

PARCEL A:

LOTS 11 AND 12, AS SHOWN ON THAT CERTAIN MAP ENTITLED, MORGAN HILL RANCH MAP NO. 3 WHICH MAP WAS FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA ON SEPTEMBER 21, 1892, IN BOOK G OF MAPS PAGE(S) 20 AND 21.

EXCEPTING THEREFROM ALL THAT PORTION LYING WITHIN THE BOUNDS OF TRACT 8382, WHICH MAP WAS FILED FOR RECORD ON JULY 2, 1991 IN BOOK 627 OF MAPS, PAGES 25 THROUGH 28.

PARCEL B:

PARCEL ONE:

PORTION OF LOTS 13, 14 AND 15, "MORGAN HILL RANCH MAP NO. 3", RECORDED IN THE

OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA ON SEPTEMBER 21, 1892, IN BOOK G OF MAPS PAGE(S) 20, SANTA CLARA COUNTY RECORDS, AND MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT AN UNDERGROUND GRANITE MONUMENT MARKED "B" STANDING IN THE CENTER LINE OF LLAGAS AVENUE AND LINE BETWEEN SAID LOTS 15 AND 16 OF MAP NO. 3

ABOVE REFERRED TO AND BEING ALSO THE WESTERN TERMINUS OF THAT PART OF SAID LLAGAS AVENUE LAID OUT 100 LINKS WIDE, AND RUNNING THENCE ALONG THE LINE BETWEEN SAID LOTS 15 AND 16 AND CENTER LINE OF LLAGAS AVENUE LAID OUT 40 FEET WIDE NORTH 84° WEST 4.00 CHAINS SOUTH 66° WEST 2.67 CHAINS SOUTH 29° WEST 1.57 CHAINS AND SOUTH 1/4° EAST 0.86 CHAINS TO THE CORNER BETWEEN SAID LOTS 15 AND 16 IN SAID CENTER LINE, FROM WHICH CORNER A WHITE OAK 5 FEET IN DIAMETER AND MARKED B.T.16 BEARS NORTH 25° WEST 1.80 CHAINS AND A 2" X 3" WHITE WITNESS POST IN NORTHERN LINE OF SAID LLAGAS AVENUE AND MARKED "W.P.15" AND "16" BEARS NORTH 55° WEST 37 LINKS; THENCE LEAVING SAID AVENUE AND CONTINUING ALONG THE LINE BETWEEN SAID LOTS 15 AND 16 NORTH 55° WEST 10.99 CHAINS TO THE CENTER OF RAVINE "C" AT THE LAUREL STAKE IN MOUND OF ROCKS MARKED "15 AND 16A" FROM WHICH STAKE A WITNESS POST ON SOUTHWEST SIDE OF RAVINE MARKED "M.W.P. 16 AND 15" BEARS SOUTH 55° EAST 23 LINKS, AND FROM WHICH WITNESS POST A LIVE OAK 16" IN DIAMETER MARKED B.T.W.P. 16 BEARS SOUTH 78° 35' WEST 74 LINKS; THENCE STILL ALONG THE LINE BETWEEN SAID LOTS 15 AND 16 AND ALONG SAID CENTER LINE OF SAID RAVINE "C" NORTH 52° 36' WEST 12.11 CHAINS AND NORTH 19° WEST 3.43 CHAINS TO THE POINT OF INTERSECTION OF SAID CENTER LINE OF SAID RAVINE "C" WITH THE NORTHERN LINE OF RANCHO OJO DE AGUA DE LA COCHE FROM WHICH POINT A 2" X 3" WHITE WITNESS POST MARKED W.P. 15 AND STANDING ON EASTERN BANK OF SAID RAVINE WHICH BEARS NORTH 58° EAST 10 LINKS; THENCE ALONG SAID NORTHERN RANCHO LINE, BEING ALSO THE NORTH LINE OF SAID LOTS 15 AND 14 AND 13 OF SAID MAP NO. 3, NORTH 58° EAST 36.91 CHAINS TO A 2" X 3" WHITE STAKE MARKED "HILL 12 AND 13" AND SET FOR COMMON CORNER FOR LOTS 12 AND 13 OF SAID MAP NO. 3, IN SAID NORTHERN RANCHO LINE; THENCE LEAVING SAID RANCHO LINE AND RUNNING ALONG THE LINE BETWEEN SAID LOTS 12 AND 13, SOUTH 40°

Davidson Parcels Conservation Easement
A-2
15' EAST 28.45 CHAINS TO A STAKE NEAR FOOT OF HILLS MARKED "LINE 12 AND 13" AND SET FOR THE NORTHERNMOST CORNER OF THE 14 ACRE VALLEY TRACT IN LOT 13; THENCE ALONG THE NORTHWEST LINE OF SAID 14 ACRE TRACT, SOUTH 49° 45' WEST 10 CHAINS TO A 2" X 3" WHITE STAKE MARKED "LINE 13 AND 14" AND SET FOR THE WESTERNMOST CORNER OF SAID 14 ACRE TRACT AND ALSO THE NORTHERNMOST CORNER OF THE 25.24 ACRE TRACT IN LOTS 14 AND 15, AND THENCE ALONG THE NORTHWESTERLY LINE OF SAID

25.24 ACRE TRACT, SOUTH 70° 26' WEST 16.04 CHAINS TO THE POINT OF COMMENCEMENT.

EXCEPTING THEREFROM SO MUCH THEREOF AS GRANTED TO CASWIL, A CO-PARTNERSHIP BY DEED RECORDED MAY 29, 1964 IN BOOK 6523, PAGE 286 OFFICIAL RECORDS, AND MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT AN UNDERGROUND GRANITE MONUMENT MARKED "B" STANDING IN THE CENTER LINE OF LLAGAS AVENUE, AND LINE BETWEEN SAID LOTS 15 AND 16, AS SAID LOTS ARE SHOWN UPON THAT CERTAIN MAP ENTITLED, "MORGAN HILL RANCH MAP NO. 3" SAID

MAP BEING FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA ON SEPTEMBER 21, 1892 IN BOOK "G" OF MAPS, PAGES 20 AND 21; THENCE ALONG THE LINE BETWEEN SAID LOTS 15 AND 16 AND CENTER LINE OF LLAGAS AVENUE, 40.00 FEET WIDE, NORTH 84° WEST 264.00 FEET, SOUTH 65° WEST 176.22 FEET, SOUTH 29° WEST 103.62 FEET; THENCE SOUTH 0° 15' EAST 36.76 FEET TO THE CORNER BETWEEN LOTS 15 AND 16; THENCE LEAVING SAID CENTER LINE OF LLAGAS AVENUE AND CONTINUING ALONG THE LINE BETWEEN SAID LOTS 15 AND 16, NORTH 55° WEST 725.34 FEET, NORTH 52° 36' WEST 799.26 FEET, NORTH 19° WEST 226.38 FEET TO A POINT ON THE NORTHERLY LINE OF RANCHO OJO DE AGUA DE LA COCHE; THENCE ALONG SAID NORTHERLY LINE BEING ALSO THE NORTHERLY LINE OF SAID LOTS 15, 14 AND 13 OF SAID MORGAN HILL RANCH MAP NO. 3, NORTH 58° EAST 1481.04 FEET; THENCE SOUTH 32° 49' 81" EAST 1103.07 FEET, SOUTH 46° 23' 57" EAST 800.85 FEET TO A POINT IN THE NORTHERLY LINE OF THE 25.24 ACRE TRACT IN LOTS 14 AND 15; THENCE ALONG THE NORTHERLY LINE OF SAID 25.24 ACRE TRACT, SOUTH 70° 26' WEST 712.14 FEET TO THE

POINT OF BEGINNING AND BEING A PORTION OF THE RANCHO OJO DE AGUA DE LA COCHE, SANTA CLARA COUNTY, CALIFORNIA.

PARCEL TWO:

A NON-EXCLUSIVE EASEMENT FOR INGRESS AND EGRESS AND FOR THE INSTALLATION AND MAINTENANCE OF PUBLIC UTILITIES OVER A STRIP OF LAND 30.00 FEET IN WIDTH, THE NORTHEASTERLY LINE OF WHICH IS DESCRIBED AS FOLLOWS:

BEGINNING AT THE POINT OF INTERSECTION OF THE DIVIDING LINE OF LOTS 13 AND 14,

WITH THE CENTER LINE OF LLAGAS AVENUE, AS SAID LOTS AND AVENUE ARE SHOWN UPON THAT CERTAIN MAP ENTITLED, "MORGAN HILL RANCH MAP NO. 3", RECORDED ON SEPTEMBER 21, 1892 IN BOOK "G" OF MAPS, PAGES 20 AND 21, SANTA CLARA COUNTY RECORDS; THENCE FROM SAID POINT OF BEGINNING, NORTH 40° 15' WEST ALONG THE DIVIDING LINE BETWEEN LOTS 13 AND 14 FOR A DISTANCE OF 924.00 FEET AND THE TERMINUS OF SAID EASEMENT.

THE NORTHWESTERLY TERMINUS OF SAID EASEMENT HAVING A BEARING OF NORTH 79° 26' EAST, SAID EASEMENT BEING RESERVED IN THE DEED FROM ANDRE L. POIREE, ET UX TO EDWARD DAHL, JR., ET UX, RECORDED DECEMBER 10, 1976 IN BOOK C467 OFFICIAL RECORDS, PAGE 343, SANTA CLARA COUNTY RECORDS.

APN: 764-28-007 (PARCEL A) AND 764-30-001 (PARCEL B)

Davidson Parcels Conservation Easement
B-1
Exhibit B
Maps of the Property

Davidson Parcels Conservation Easement
B-2

C-1 Davidson Parcels Conservation Easement
Exhibit C
Initial Conservation Values
In accordance with Habitat Plan Section 8.6.3, this Exhibit C sets forth the following landcover types and covered species habitat described in Habitat Plan Chapter 3 that are present on the Property. The Pre Acquisition Analysis and the Baseline Report which provide additional detail are on file with the Landowner and Easement holder and are incorporated herein by reference. (“Acres Rec” is acreage recorded on title and “Acres Calc” is acreage determined by GIS).

APN Owner Acres_Rec Acres_Calc
76430001 SCVHA 44.96 44.96
76428007 SCVHA 0.01 48.94
land_cover_name ACRES
Mixed Serpentine Chaparral 38.0
Rural Residential 0.4
Serpentine Bunchgrass Grassland 54.4
Urban - Suburban 1.1
Stream Length (miles) 0.4
Con_Area_Name unit_num reserve_alt1_priority ACRES
Llagas 3 Low 65.673619
Landcover by CAZ, Llagas 3 Low
land_cover_name ACRES
Mixed Serpentine Chaparral 10.25484
Rural Residential 0.235996
Serpentine Bunchgrass Grassland 54.373343
Urban - Suburban 0.80944
Habitat Units
CNAME UNIT_NUM UNIT_NAMEAcres
CALIFORNIA TIGER SALAMANDER None Present
CNAME UNIT_NAME UNIT_NUM ACRES
BAY CHECKERSPOT BUTTERFLY Hale 10 91.823594
CNAME UNIT_NAME Acres
CALIFORNIA RED-LEGGED FROG None Present Page 203 of 268 Davidson Parcels Conservation Easement
C-2
Modeled Habitat
species_name habitat_type ACRES
Bay Checkerspot Butterfly NA 54.447289
California Red-legged Frog Dispersal Habitat 83.800773
California Red-legged Frog Primary Habitat 0.425491
California Red-legged Frog Refugia Habitat 8.262932
California Tiger Salamander Secondary Habitat 92.413363 Fragrant fritillary Primary Habitat 53.626261
Loma Prieta hoita Secondary Habitat 37.970819
Metcalf Canyon jewelflower Primary Habitat 53.626261
Most beautiful jewelflower Primary Habitat 92.413363
Smooth lessingia Primary Habitat 54.442544
Tricolored Blackbird Secondary Habitat 54.442544
Western burrowing owl Overwintering Habitat 53.428294
Western pond turtle Primary Habitat 13.430565
Western pond turtle Secondary Habitat 64.399648
Used CNDDB March 2019 with Accuracies of “specific” and “80 meter.” Covered Plant Occurrences
cnddb, Current Date
Common Name Locational Accuracy Survey Date Observed Date most beautiful jewelflower specific area 20020504 20020504 smooth lessingia specific area 19881022 19881022
Santa Clara Valley dudleya specific area 20060726 20060726 Coyote ceanothus specific area 201102XX 201102XX
Used “species_occurrences_2012_otherSources.” None present Used Habitat Agency OccurrenceData.gdb. None present
Occurrences from the Plan, Table 5-16
source species_name Account ICF_ID
CNDDB Coyote ceanothus Yes 1

Davidson Parcels Conservation Easement
D
Exhibit D
Allowed Uses

1. Grazing – Cattle grazing is allowed on the Property as a land management tool to support healthy serpentine plant communities, control invasive species, and for fire suppression purposes. Cattle grazing will be managed by Landowner, as Implementing Entity and shall be conducted in a manner so as not to degrade the conservation values.

2. Site Visits - Both Easement Holder (in coordination with Landowner) and Landowner shall have the right to enter for the purposes of site visits to board members, prospective donors, employees, contractors, or other agents or guests, and may document such visits for promotional purposes.

E
Exhibit E
Title Report Including Exceptions

Davidson Parcels Conservation Easement
E-2
Exhibit E-1
Subordination Agreement

9 CITY COUNCIL STAFF REPORT
MEETING DATE: October 4, 2023
PREPARED BY:

Shane Palsgrove, Police Chief
APPROVED BY: City Manager

CARRYING A CONCEALED WEAPON LICENSE UPDATE

RECOMMENDATION(S)
Accept report.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety
Supporting our Youth, Seniors, and Entire Community
Preserving and Cultivating Public Trust
Advancing Regional Initiatives
2022-2023 Strategic Priorities
Fiscal Sustainability
REPORT NARRATIVE:

The City Council adopted a Carrying Concealed Weapons (CCW) license fee schedule on April 5, 2023. CCW license information can be found at https://www.morganhill.ca.gov/2373/Carry-Concealed-Weapon-License.

The City Council instructed the Police Department to revisit the CCW license fee structure in September 2023 and provide the City Council with a comparison of the estimated time and the actual time it takes to process a CCW license application. The Police Department has processed the following number of CCW licenses as of September 29, 2023:
• CCW License Applications Received: 17
• CCW Licenses Issued/Approved: 5
• CCW License Applications Denied or Withdrawn: 4
• CCW License Applications Currently Under Investigation: 8 Staff estimated it costs the City $807 to process an application for a new CCW license; however, $800 was established as the processing recovery fee as calculated from the full burdened rate of department personnel’s time totaling eight hours collectively (Community Service Officer, Police Sergeant and Police Captain (totaling six hours, one

9 hour and one hour, respectively).

Note, only applicants who are approved to receive a CCW license are required to pay the full processing amount pursuant to Penal Code Section 26190(b)(2). The law only allows 20% ($144.00) of this fee to be collected upon the filing of the initial CCW license application, with the remaining balance collected only upon the issuance of the license.

In this manner, applicants who are denied a CCW license are not charged the remaining 80% ($656.00) balance of the City's processing fees. It should also be noted the City is not recuperating time spent on applications that are not issued.

Fees for New CCW License
Various fees associated with obtaining a CCW license are collected at three separate times: fingerprinting, application submission, and CCW license issuance.

Fees paid to the City of Morgan Hill are payable by credit or debit card, check, or cash to the City.

Standard CCW License $957, valid for 2 years
• $113 if fingerprinted at the Morgan Hill Police Department. This amount is collected in full at the time the applicant is fingerprinted. The fee is comprised of:
$44 DOJ Firearm Eligibility Report, $49 DOJ & FBI Live Scan reports, $20 MHPD fingerprint fee (this fee may vary if fingerprinted elsewhere). This fee is nonrefundable and has no bearing on the issuance or denial of a CCW license. • $188 Initial Fee to be paid through Permitium at the time the application is submitted. The fee is comprised of: $44 DOJ License fee, $144 City fees. This fee is non-refundable and has no bearing on the issuance or denial of a CCW license.
• $656 Issuance fee to be paid through Permitium by applicants who are issued their CCW license. The fee is comprised of: $656: the balance of the City fees related to the recovery of cost and/or processing, issuing the license, and enforcing the license [PC 26190(b)(1)].

Judge, Magistrate, Full-time Commissioner $979, valid for 3 years • $113 if fingerprinted at the Morgan Hill Police Department, this amount is collected in full at the time the applicant is fingerprinted. The fee is comprised of:
$44 DOJ Firearm Eligibility Report, $49 DOJ & FBI Live Scan reports, $20 MHPD fingerprint fee (this fee may vary if fingerprinted elsewhere). This fee is nonrefundable and has no bearing on the issuance or denial of a CCW license. • $210 Initial Fee to be paid through Permitium at the time the application is submitted. The fee is comprised of: $66 DOJ License fee and $144 City fees.

9 This fee is non-refundable and has no bearing on the issuance or denial of a CCW license.
• $656 Issuance fee to be paid through Permitium by applicants who are issued their CCW license. The fee is comprised of: $656 the balance of the City fees related to the recovery of cost and/or processing, issuing the license, and enforcing the license [PC 26190(b)(1)].

Reserve Peace or Custodial Officer $1,001, valid for 4 years • $113 if fingerprinted at the Morgan Hill Police Department. This amount is collected in full at the time the applicant is fingerprinted. The fee is comprised of:
$44 DOJ Firearm Eligibility Report, $49 DOJ & FBI Live Scan reports, $20 MHPD fingerprint fee (this fee may vary if fingerprinted elsewhere). This fee is nonrefundable and has no bearing on the issuance or denial of a CCW license. • $232 Initial Fee to be paid through Permitium at the time the application is submitted. The fee is comprised of: $88 DOJ License fee and $144 City fees.

This fee is non-refundable and has no bearing on the issuance or denial of a CCW license.
• $656 Issuance fee to be paid through Permitium by applicants who are issued their CCW License. The fee is comprised of $656 for the balance of the City fees related to the recovery of cost and/or processing, issuing the license, and enforcing the license [PC 26190(b)(1)].

Renewal Application
o Payment of Renewal application fees, pending City Council approval at a date to be determined, are collected at the time of submitting the application through Permitium:
• Standard CCW Renewal License: $52 DOJ + Undetermined City cost/recovery processing fee.
• Judge, Magistrate, Full-time Commissioner Renewal License: $74 DOJ + Undetermined City cost/recovery processing fee.
• Reserve Peace or Custodial Officer Renewal License: $96 DOJ + Undetermined City cost/recovery processing fee.

Time Study
A time study has been completed for each application. The following is the average time spent processing a single CCW license application, separated between those

9 whose application was either approved or denied:
• Approved CCW Applicants (n=5): 496 minutes (approximately 8 hrs., 15 min.) • Denied CCW Applicants (n=4): 338 minutes (approximately 5 hrs., 35 min.) Note, the Police Chief's time is not included in the time study.

Time was recorded upon communication with all applicants through phone and email exchanges, application and legal document review, in-person meetings, background questions and checks, reviewing and examining a variety of documents and systems including but not limited to:

Residence Check and Confirmation of Residing within the Morgan Hill Police Department's Boundary
Driver’s License
Department of Justice and FBI
National Crime Information Center and Wanted Persons System Automated Firearms System
Missing and Unidentified Persons
California Restrained Persons System
Santa Clara County Court Portal
Armed and Prohibited Persons
Supervised Release File
Mental Health Firearms Prohibited Persons
Santa Clara County Justice Information Center
California Sex and Arson Registry
Record Management Systems
Calls for Service check in current or prior jurisdictions Military Certificate of Release or Discharge from Active Duty Social Media Inquiries
Interviewing all Character References
Interviewing the Applicant
Contacting and Reviewing Psychological Decisions
Firearms Proficiency and Qualification Certificates
Presentation of all Applicants to the Police Department's Command Staff by the Lead Processor with Approval or Denial Recommendations
Recommendations
Staff recommends continuing with the current fee schedule as previously adopted by City Council.

Additionally, Santa Clara County and most of the cities in the county are in the process of updating their CCW license fee schedule to better reflect the full burdened rate of their department personnel’s time to process CCW licenses. San Jose Police Department recently completed updating their fee schedule and their CCW license fee is now $1,290.

9 Furthermore, introducing a "fee reduction" for applicants is not recommended by staff.

The license process, including staff's time, is the same for each applicant whether they are ultimately issued a CCW license or not. It is not appropriate to introduce other factors into the license process to determine the amount of the licensing fee an applicant will pay. For example, pursuant to the Buren case, applicants cannot be asked why they want a CCW license nor do they have to demonstrate good cause or special need, so it would not be pertinent to consider these factors in a decision to issue a CCW license.

COMMUNITY ENGAGEMENT:

City Council adopted a CCW license fee schedule on April 5, 2023.

ALTERNATIVE ACTIONS:

City Council can propose a policy to recuperate only a percentage of staff time.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

City Council adopted a Carrying Concealed Weapons license fee schedule on April 5, 2023.

FISCAL AND RESOURCE IMPACT:

This CCW license fee update is part of the Police Department's workplan.

CEQA (California Environmental Quality Act):

Not a Project

10 CITY COUNCIL STAFF REPORT
MEETING DATE: October 4, 2023
PREPARED BY:

Maria Angeles, Senior Civil Engineer
APPROVED BY: City Manager

SECOND AMENDMENT TO PROFESSIONAL SERVICE AGREEMENT
WITH HARRIS & ASSOCIATES, INC. FOR ON-CALL ENGINEERING

PLAN REVIEW AND TECHNICAL SUPPORT SERVICES FOR LAND

DEVELOPMENT ENGINEERING

RECOMMENDATION(S)

1. Approve the Second Amendment to the professional service agreement with Harris & Associates, Inc. for on-call engineering plan review and technical support services for Land Development Engineering to add $180,000 to contract amount for a total not-to-exceed amount of $631,000 with the term of the agreement unchanged; and

2. Authorize the City Manager to execute the Second Amendment.

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

The City has a current contract with Harris & Associates, Inc. (Harris) for staff augmentation services to assist the Land Development Engineering section of the Engineering Utilities Department with engineering plan reviews, stormwater design reviews, and for stormwater program support. The services performed by Harris are on an as-needed basis and have been heavily focused on post-construction stormwater design reviews of land development projects for the past few years. All new or redevelopment projects that create, and/or replace 2,500 square feet or more of impervious surface are subject to the post-construction stormwater requirements contained in the California Regional Water Quality Control Board’s Central Coast Region Resolution No. R3-2013-0032. A project may be required to meet one or more of the following post-construction or performance requirements: site design and runoff reduction; water quality treatment; runoff retention; and peak management.

10 On August 5, 2020, City Council approved Harris’ original two-year contract that expired on June 30, 2022 and with an original contract amount of $220,000. Harris was selected as one of the on-call consultants from the Request for Qualifications issued by Land Development Engineering on May 19, 2020.

As allowed by the original contract, a subsequent First Amendment was approved by the City Manager to extend the term of the contract for another two years (until June 30, 2024), and to increase the contract amount by $231,000. The First Amendment increased the total not-to-exceed contract amount to $451,000. To date, the total contract amount has been used up.

The purpose of this proposed Second Amendment to Harris’ contract is to increase the total not-to-exceed contract amount by $180,000 for FY 2023-24 which will result in a total not-to-exceed contract amount of $631,000. This new amendment will not change the current terms of the agreement.

Harris’ services will continue to focus on stormwater design reviews of land development projects and on any needed stormwater program support. Land Development Engineering expects to receive more development applications, especially for residential projects, and will need Harris’ specialized stormwater services and staffing capacity to ensure stormwater compliance by all regulated projects and to meet review deadlines.

The contracts of Land Development Engineering’s various on-call consultants will end on or prior to June 30, 2024. Land Development Engineering will be issuing a new Request for Qualifications in November/December 2023 and new contracts for selected on-call consultants will be presented for approval to City Council in early 2024.

COMMUNITY ENGAGEMENT:

Inform
This report serves to inform the community of the recommended amendment to the contract for on-call engineering plan review and technical support services with Harris & Associates, Inc.

ALTERNATIVE ACTIONS:

The Council could decide not to approve this amendment. This will be an infeasible alternative as the Land Development Engineering team does not have sufficient expertise to perform the required stormwater design reviews and may result in project designs that do not fully comply with the post-construction stormwater requirements.

This could also result in violations and fines against the City by the Central Coast Water Board.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

On August 5, 2020, City Council approved and authorized the City Manager to execute and administer four professional service agreements for three types of on-call services:
1) On-Call Engineering Plan Review and Technical Support Services for Land

10 Development Engineering; 2) On-Call Map Review and City Surveyor Services also for Land Development Engineering, and 3) On-Call Project Management and Inspection for various Capital Improvement Program Projects. Harris was one of two consultants with agreements for on-call engineering plan review and technical support services that required Council approval.

FISCAL AND RESOURCE IMPACT:

The current agreement with Harris & Associates expires on June 30, 2024 and has a total not-to-exceed amount of $451,000. If the requested appropriation and Second Amendment are approved, the total not-to-exceed amount will be increased to $631,000, an increase of $180,000. There are sufficient funds programmed in this year's budget in the Development Services Fund (Fund 206).

CEQA (California Environmental Quality Act):

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

1 SECOND AMENDMENT TO AGREEMENT
HARRIS & ASSOCIATES, INC.

This SECOND AMENDMENT TO AGREEMENT is entered into and becomes effective on ______________________ (Effective Date), by THE CITY OF MORGAN HILL, a municipal corporation, ("CITY") and HARRIS & ASSOCIATES, 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 Second 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 “SERVICE AGREEMENT FOR DESIGN PROFESSIONALS” made as of August 18, 2020, for consultant services for a maximum compensation of Two Hundred Twenty Thousand Dollars ($220,000.00) (“SERVICE AGREEMENT FOR DESIGN PROFESSIONALS”).

3. The CITY and CONSULTANT entered into a “First Amendment to Agreement” made as of July 12, 2022, under which the maximum compensation under the CONSULTANT AGREEMENT FOR DESIGN PROFESSIONALS, as amended, was increased to Four Hundred Fifty-One Thousand Dollars ($451,000.00) and the term extended. The SERVICE AGREEMENT FOR DESIGN PROFESSIONALS and the First Amendment thereto are attached as Exhibit “1” to this Agreement.

AGREEMENT
THE PARTIES MUTUALLY AGREE AS FOLLOWS:

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

A. Paragraph 4.1 shall be amended and replaced in its entirety by the following:
"4.1. Amount. Compensation under this Agreement shall not exceed SIX HUNDRED THIRTYONE THOUSAND DOLLARS ($631,000.00) and shall be billed based on the rate and basis set forth in Exhibit B, Exhibit B dated June 21, 2022, and Exhibit B dated October 5, 2023."
///
///
///
///
///
[Signatures on the Next page]

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

3. Conflicts. In the event of a conflict between the terms and provisions of this SECOND AMENDMENT to Agreement and the terms and provisions of the CONSULTANT AGREEMENT FOR DESIGN PROFESSIONALS or any earlier amendment, the terms of this SECOND AMENDMENT to Agreement shall govern and control.

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

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

APPROVED AS TO FORM: HARRIS & ASSOCIATES, INC.

Donald A. Larkin, City Attorney By:

Date: Title:

Date:

Print Name and Title of Signer.

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

Title:

Date:

Print Name and Title of Signer.

If Corporate: Secretary, Assistant
Secretary, Chief Financial Officer, or
Assistant Treasurer

EXHIBIT B
DATED OCTOBER 5, 2023

SCHEDULE OF COMPENSATION RATES
CONSULTANT’S services will be billed on a time-and-materials basis according to the Standard Rates shown below effective October 5, 2023 – June 30, 2024. 20 Rate
Hourly Rates
2023 2024
Principal-in-Charge $290 $300
Senior Project Manager $250 $260
Project Manager $220 $230
Assistant Project Manager $190 $200
Traffic Engineer $260 $280
Senior Project Engineer $190 $200
Project Engineer $170 $180
Design Engineer $155 $165

DocuSign Envelope ID: DDEBAD94-CEDD-40DA-BDD8-EFE818ED769E

FIRST AMENDMENT TO AGREEMENT
HARRIS & ASSOCIATES, INC.

This FIRST AMENDMENT TO AGREEMENT is entered into and becomes effective on 7/12/2022 (Effective Date}, by THE CITY OF MORGAN HILL, a municipal corporation, ("CITY"} and HARRIS & ASSOCIATES, INC., a California Corporation ("CONSULTANT"}.

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

1. This First Amendment to Agreement is entered into pursuant to the action of the Morgan Hill City Council taken on August 5, 2020.

2. The CITY and CONSULTANT entered into that "SERVICE AGREEMENT FOR DESIGN PROFESSIONALS" made as of August 18, 2020, for consultant services for a maximum compensation of Two Hundred Twenty Thousand Dollars ($220,000.00} ("SERVICE AGREEMENT FOR DESIGN PROFESSIONALS"}. The SERVICE AGREEMENT FOR DESIGN PROFESSIONALS is attached as Exhibit "1" to this Agreement.

AGREEMENT
THE PARTIES MUTUALLY AGREE AS FOLLOWS:

1. Amendments: All terms and conditions of the SERVICE AGREEMENT FOR DESIGN PROFESSIONALS, 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:

Ill
Ill
Ill
Ill
Ill
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 August 18, 2020, until June 30, 2024."
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 FOUR HUNDRED FIFTYONE THOUSAND AND NOI00 DOLLARS ($451,000.00} and shall be billed based on the rate and basis set forth in Exhibit BAND Exhibit B dated June 21, 2022." Signatures on the Next Page
1 128-04-20-064

DocuSign Envelope ID: DDEBAD94-CEDD-40DA-BDD8-EFE818ED769E

2. Conflicts. In the event of a conflict between the terms and provisions of this First Amendment to Agreement and the terms and provisions of the SERVICE AGREEMENT FOR DESIGN PROFESSIONALS, the terms of this First Amendment to Agreement shall govern and control.

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

ATTEST:

Date: 7 ;1212022
APPROVED AS TO FORM:

DocuSlgned by:
.....,...,/.:_,. ..Huu.. ..Ae1hart<in, City Attorney
Date: 7 ;12;2022
2 CITY OF MORGAN HILL
.:t1aFTuilfi1ter, City Manager
Date: 7/12/2022
HARRIS & ASSOCIATES, INC.
�OocuSlgned by:
��09
Title: Mi che 11 e White coo
Print Name and Title of Signer.

If Corporate: Chairman, President,
or Vice President
Date: 6/30/2022
OocuSlgnod by:
r&t: l�½ ;J02888E2C90142A._
Title: Frank Lopez VP
Print Name and Title of Signer.

If Corporate: Secretary, Assistant
Secretary, Chief Financial Officer, or
Assistant Treasurer
Date: 7/5/2022

DocuSign Envelope ID: DDEBAD94-CEDD-40DA-BDD8-EFE818ED769E EXHIBIT 1

SERVICE AGREEMENT FOR DESIGN PROFESSIONALS
HARRIS & ASSOCIATES, INC.

THIS AGREEMENT is entered into and becomes effective on 8/18/2020 (Effective Date), by and between the CITY OF MORGAN HILL, a municipal corporation, ("CITY"), and HARRIS & ASSOCIATES, INC. a California corporation ("CONSUL TANT") hereinafter referred to collectively as "Parties." In consideration of the promises and the mutual covenants contained in this Agreement, the Parties agree as follows:

1. City Authority. This Agreement is entered into pursuant to the action of the Morgan Hill City Council taken on August 5, 2020 .

2. Term of Agreement. This Agreement shall cover services rendered from the Effective Date of this Agreement until June 30, 2022 at which time CONSULTANT'S services shall be completed. The City Manager is authorized to extend the term of this Agreement for a maximum period of two years. Any such extension shall be in writing and signed by both Parties to this Agreement.

3. Scope of Service. The services to be performed by CONSULTANT shall be On-Call Engineering Plan Review & Technical Support Services for Land Development Engineering as further described in Exhibit A.

4. Compensation. CONSULTANT shall be compensated as follows:

4.1. Amount. $220,000. Total compensation to CONSULTANT under this Agreement during its initial term set forth in Section 2 above shall not exceed Two Hundred Twenty Thousand dollars, except as provided in Section 4.1.1 "Additional Compensation", and shall be billed based on the rate and basis set forth in Exhibit

8. If the City Manager extends the term of this Agreement for up to two years pursuant to the provisions of Section 2 above, the City Manager shall have the authority to increase the maximum compensation allowed to be paid to .

CONSULTANT during that extended term period, so long as City Council has appropriated sufficient funds therefor, the Parties mutually agree to such amount in a writing signed by both Parties to this Agreement and provided further that in no event shall such maximum compensation allowed for the extended term exceed 105% of the maximum compensation for two years of service during the initial term of this Agreement, notwithstanding the Additional Compensation set forth in Section 4.1.1 below.

4.1.1. Additional Compensation. Additional compensation during the initial term of this Agreement that exceeds the compensation amount listed in Section

4.1 of this Agreement may be approved by the City Manager through a written amendment so long as City Council has appropriated sufficient funds therefor. The City Manager shall have the authority to approve additional compensation in an amount not to exceed thirty percent (30%) of the total compensation amount listed in Section 4.1 of this Agreement, for a combined total maximum compensation amount of $286,000.

4.2. Billing. CONSUL TANT shall provide CITY with an invoice containing the dated, detailed, and itemized descriptions of all services performed and expenses incurred (if such expenses are reimbursable pursuant to Exhibit B) by 1 Updated June 2020

DocuSign Envelope ID: DDEBAD94-CEDD-40DA-BDD8-EFE818ED769E CONSUL TANT on a monthly basis unless otherwise specified in Exhibit B. All invoices shall be sent to the CITY addressed to the department head or project manager identified below in Section 13 Notices. Any rate charged shall be prorated where services are interrupted or not provided for any rate period (for example, any monthly rate charge should be prorated when servi.ces were interrupted or provided for only part of the month). For services billed on an hourly rate, the minimum unit of billed time shall not exceed one tenth of one hour. CITY shall pay for services and expenses (if so provided in Exhibit B) up to the limit of compensation set forth above, that in the CITY's judgment were necessary and reasonable. Services for work performed and expenses incurred in excess of the total compensation set forth in paragraph 4.1 above shall be at no cost to CITY.

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

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

6. Performance of Work. CONSUL TANT represents that it is qualified by virtue of experience, training, education, and expertise to accomplish these services. Services shall be performed by CONSULT ANT in accordance with professional practices in a manner consistent with a level of care, competence and skill exercised by qualified members of the CONSULTANT'S profession. By delivery of completed work, CONSUL TANT acknowledges that the work conforms to the requirements of this Agreement and all applicable federal, state and local laws.

CONSUL TANT shall perform all work and services under this Agreement in conformance with the time schedule set forth on Exhibit C, "Schedule of Performance,n attached hereto and incorporated herein by this reference. CITY's City Manager is authorized on behalf of CITY to modify the timeframes set forth on the Schedule of Performance within the term of this Agreement.

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

7. Insurance Requirements. CONSUL TANT shall procure and provide proof of the insurance coverage required by this section in the form of certificates and endorsements. The required insurance must cover the activities of CONSULTANT, including its subcontractors, employees and agents, relating to or arising from the performance of any work or service under this Agreement, and must remain in full force and effect at all times during the period covered by this Agreement. The coverages may be arranged under a single policy for the full limits required or by a combination of underlying policies with the balance provided by excess or "umbrella" 2 Updated June 2020

DocuSign Envelope ID: DDEBAD94-CEDD40DA-BDD8-EFE818ED769E policies, provided each such policy complies with the requirements set forth herein. Any deductibles or self-insured retentions must be declared to and approved by City. CONSULTANT further understands that the CITY reserves the right to modify the insurance requirements set forth herein, with thirty (30) days' notice provided to CONSULTANT, at any time as deemed necessary to protect the interests of the CITY. If such modification results in additional cost to the CONSULTANT and the CITY requires CONSULTANT to obtain the additional coverage, the CITY and CONSUL TANT will negotiate the additional cost of the insurance. 7 .1. Insurance Types and Amounts.
7 .1.1. Commercial General Liability (CGL). CONSUL TANT shall maintain CGL against claims and liabilities for personal injury, death, or property damage providing protection in the minimum amount of: (i) one million dollars ($1,000,000.00) combined single limit for any one accident or occurrence, or (ii) the maximum amount of such insurance available to CONSULTANT under CONSUL TANT's combined insurance policies (including any excess or "umbrella" policies), whichever is greater.

7.1.2. Automobile Liability. CONSUL TANT shall maintain Automobile Liability covering all owned, non-owned and hired automobiles (if CONSULT ANT does not own automobiles, then CONSUL TANT shall maintain Hired/Nonowned Automobile Liability) against claims and liabilities for personal injury, death, or property damage providing protection in the minimum amount of:
(i) one million dollars ($1,000,000.00) combined single limit for any one accident or occurrence, or (ii) the maximum amount of such insurance available to CONSULT ANT under CONSUL TANT's combined insurance policies (including any excess or "umbrella" policies), whichever is greater.

7.1.3. Workers' Compensation Insurance and Employer's Liability.

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

7.1.4. Pollution (Environmental) Liability. If the performance of CONSULTANT'S work or service under this Agreement involves hazardous materials, contaminated soil disposal, and/or a risk of accidental release of fuel oil, chemicals or other toxic gases or hazardous materials, CONSUL TANT shall procure and maintain Pollution Liability covering the CONSULTANT'S liability for bodily injury, property damage and environmental damage resulting from pollution and related cleanup costs arising out of the work or services to be performed under this Agreement. Coverage shall be provided for both work performed on site, as well as during the transport of hazardous materials. Such coverage shall be in the minimum amount of:
(i) one million dollars ($1,000,000.00) for any one accident or occurrence, or (ii) the maximum amount of such insurance available to CONSULTANT 3 Updated June 2020

OocuSign Envelope ID: DDEBAD94-CEDD-40DA-BDD8-EFE818ED769E under CONSUL TANT's combined insurance policies (including any excess or "umbrellan policies), whichever is greater.
7 .1.5. Professional Liability.
7 .1.5.1. If the performance of CONSUL TAN T's work or service under this Agreement involves professional and/or technical services (examples include, but are not limited to, architects, engineers, land surveyors, and appraisers), CONSULTANT shall procure and maintain either a claims m;3de or occurrence Errors and Omission liability insurance in the minimum amount of: (i) one million dollars ($1,000,000.00) each claim, or (ii) the maximum amount of such insurance available to CONSULT ANT under CONSUL TANT's combined insurance policies (including any excess or "umbrella" policies), whichever is greater. Further, if CONSUL TANT maintains a claims-made policy, CONSUL TANT shall provide written evidence of such insurance to the CITY for at least five (5) years after the completion of work performed under this Agreement.
7 .1.5.2. If the performance of CONSUL TAN T's work or service under this Agreement relates to Information Technology or related services (examples include, but are not limited to computer programmers, software designers, hardware engineers, or other systems consultants), CONSUL TANT shall procure and maintain a claims made Errors and Omission liability insurance, including Cyber Liability and Data Breach, In the minimum amount of: (i) one million dollars ($1,000,000.00) each claim, or (ii) the maximum amount of such insurance available to CONSUL TANT under CONSUL TANT's combined insurance policies (including any excess or "umbrella" policies), whichever is greater.
7 .1.6. Sexual Abuse/Molestation Liability (SML): If the performance of CONSUL TANT's work or service under this Agreement involves contact with minors, CONSULTANT shall procure and maintain Sexual Abuse and Molestation insurance in the minimum amount of: (i) two hundred thousand dollars ($200,000.00) each claim, or (ii) the maximum amount of such insurance available to CONSUL TANT under CONSUL TANT's combined insurance policies (including any excess or "umbrella" policies), whichever is greater.
7 .2. Endorsements. CONSUL TANT shall provide proof of the following endorsements, listed for each policy for which endorsements are required, as outlined below:

7.2.1. General Liability and pollution liability (when pollution liability applies). 7 .2 .1.1. The City of Morgan Hill, its elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers are named as additional insureds;
7 .2.1.2. the insurer waives the right of subrogation against the City of Morgan Hill and the CITY's elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers; and,
4 Updated June 2020

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7.2.1.3. insurance shall be primary non-contributing.

7.2.2. Workers Compensation.

If the performance of CONSULTANT'S work or service under this Agreement involves access to or activity on any property or premises owned or occupied by the CITY, including, but not limited to, CONSULTANT'S presence during site visits and meetings, then insurer waives the right of subrogation against the City of Morgan Hill and the CITY's elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers.
7 .3. Qualification of Insurers. All insurance required pursuant to this Agreement must be issued by a company licensed and admitted, or otherwise legally authorized to carry out insurance business in the State of California, and each insurer must have a current A.M. Best's financial strength rating of "A" or better and a financial size rating of "VII" or better.

7.4. Certificates. CONSULTANT shall furnish CITY of Morgan Hill with copies of all certificates as outlined herein, whether new or modified, promptly upon receipt. In the event of a claim or legal action, CONSUL TANT shall promptly furnish CITY of Morgan Hill with copies of all policies outlined herein. No policy subject to the CONSUL TANT's agreement with the CITY shall be canceled or materially changed except after thirty (30) days' notice by the insurer to CITY. Certificates, including renewal certificates, may be mailed electronically to [email protected] or delivered to the Certificate Holder address provided herein Certificate Holder address:

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

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

9. Compliance with Law.

9.1. CONSUL TANT and its officers, employees, agents, and subcontractors shall comply with all applicable laws, ordinances, administrative regulations, and permitting requirements in carrying out their obligations under this Agreement.

CONSUL TANT and its officers, employees, agents, and subcontractors covenant there shall be no discrimination based upon race, color, creed, religion, gender, marital status, age, sexual orientation, national origin, mental disability, physical disability, medical condition, or ancestry, in any activity pursuant to this Agreement.

9.2. Compliance with Wage and Hour Laws: Consultant, and any subcontractor it employs to complete work under this Agreement, shall comply with all applicable 5 Updated June 2020

DocuSign Env�lope ID: DDEBAD94-CEDD-40DA-BDD8-EFE818ED769E federal, state and local wage and hour laws. Applicable laws may include, but are not limited to, the Federal Fair Labor Standards Act and the California Labor Code.

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

Prior Judgments against CONSULTANT and/or its Subcontractors: BY SIGNING

THIS AGREEMENT, CONSULTANT AFFIRMS THAT IT HAS DISCLOSED ANY

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

PRIOR TO EXECUTING THIS AGREEMENT - THAT CONSULTANT OR ITS SUBCONTRACTOR(S} HAS VIOLATED ANY APPLICABLE WAGE AND HOUR LAWS. CONSULTANT FURTHER AFFIRMS THAT IT OR ITS

SUBCONTRACTOR(S) HAS SATISFIED AND COMPLIED WITH - OR HAS

REACHED AGREEMENT WITH THE CITY REGARDING THE MANNER IN

WHICH IT WILL SATISFY - ANY SUCH JUDGMENTS, DECISIONS OR ORDERS.

Judgments or Decisions During Term of Contract: If at any time during the term of this Agreement, a court or investigatory government agency issues a final judgment, decision or order finding that CONSUL TANT or an subcontractor it employs to perform work under this Agreement has violated any applicable wage and hour law, or CONSULTANT learns of such a judgment, decision, or order that was not previously disclosed, CONSULTANT shall inform the City Attorney, no more than fifteen (15} days after the judgment, decision or order becomes final or of teaming 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 final judgment, decision or order. The City reserves the right to require CONSUL TANT to enter into an agreement with the City regarding the manner in which any such final judgment, decision, or order will be satisfied.

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

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

Notice to City Related to Wage Theft Prevention: Notice provided to the City Attorney as required under this Section shall be addressed to: City Attorney, City of Morgan Hill, 17575 Peak Avenue, Morgan Hill, CA 95037. The Notice provisions 6 Updated June 2020

DocuSign Envelope ID: DDEBAD94-CEDD-40DA-BDD8-EFE818ED769E of this Section are separate from any other notice provisions in this Agreement and, accordingly, only notice provided to the above address satisfies the notice requirements in this Section.

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

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

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

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

Address of CONSULTANT is as follows:

HARRIS & ASSOCIATES, INC.
450 Lincoln Avenue, Suite 103
Salinas, CA 93901
Address of CITY is as follows:

Maria Angeles
Senior Civil Engineer
City of Morgan Hill
17575 Peak Avenue
Morgan Hill, CA 95037
with a copy to:

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

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

15. CONSULTANT'S Proposal. If applicable, this Agreement shall include CONSULTANT'S proposal or bid which is incorporated herein. In the event of any inconsistency between the terms of the proposal and this Agreement, this Agreement shall govern.

16. Maintenance of Records.

16.1. Maintenance. CONSUL TANT shall prepare, maintain, and preserve all reports and records that may be required by federal, state, and CITY rules and ordinances related to services provided under this Agreement. CONSUL TANT shall maintain records for a period of at least 3 years after receipt of final payment under this Agreement. If any litigation, claim, negotiation, audit exception, or other action relating to this Agreement is pending at the end of the 3-year period, then CONSULTANT shall retain said records until such action is resolved. 7 Updated June 2020

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

16.3. Ownership of Work Product. All documents or other information developed or received by CONSUL TANT for work performed under this Agreement shall be the property of CITY. CONSULTANT shall provide CITY with copies of these items upon demand or upon termination of this Agreement. Any modifications made by the City or any agents of the City, to any of the CONSUL TANT's work products or any partial use or reuse of these work products without the express written consent of the CONSULTANT will be at the CITY'S sole risk and without liability to the CONSULTANT.

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

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

CONSUL TANT shall not be responsible for delays caused by circumstances beyond its reasonable sole control.

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

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

21. Defense and Indemnification.

21.1. Defense and Indemnification for Design Professional Services. Consistent with California Civil Code Section 2782.8, for design professional services to be performed under this agreement by a design professional, as that term is defined under said Section 2782.8, CONSULTANT shall, to the fullest extent permitted by law, indemnify, defend and hold harmless CITY, its elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers ("INDEMNITEESn )
from and against any and all claims, liabilities, expenses, liens, or damages of any nature, including liability for bodily injury, property damage or personal injury, and including reasonable attorneys' fees and expenses, that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of CONSULTANT, 8 Updated June 2020

DocuSign Envelope ID: DDEBAD94-CEDD-40DA-BDD8-EFE818ED769E and/or its agents, officers, employees, subcontractors, or independent contractors in performance of work hereunder or its failure to comply with any of its obligations contained in this Agreement ("CLAIM") to the extent of CONSULTANT'S proportionate percentage of fault.

21.2. Defense and Indemnification for Non-Design Professional Services. For all services performed under this agreement not covered by Section 21.1 above, CONSUL TANT shall, to the fullest extent permitted by law, indemnify, defend and hold harmless CITY, its elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers ("INDEMNITEES") from and against any and all claims, liabilities, expenses, liens., or damages of any nature, including liability for bodily injury, property damage or personal Injury, and including reasonable attorneys' fees and expenses, that arise out of, pertain to, or relate to the performance of this Agreement or the failure to comply with any obligations contained in this Agreement by CONSULTANT, and/or its agents, officers, employees, subcontractors, or independent contractors ("CLAIM").

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

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

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

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

22. Entire Agreement; Modification; Conflicting Provisions. This Agreement constitutes the entire Agreement between the Parties and supersedes any previous agreements, oral or written. This Agreement may be modified or provisions waived only by a subsequent mutual written agreement executed by CITY and CONSULTANT. If the provisions contained in the main body of this Agreement conflict with any provision contained in an exhibit to this Agreement, the provisions of the main body of this Agreement shall govern and control over any provision contained in an exhibit to this Agreement.
9 Updated June 2020

DocuSign Envelope ID: DDEBAD94-CEDD-40DA-BDDB-EFE818ED769E

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

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

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

26. Binding Agreement. Notwithstanding the provisions of Section 19 above, this Agreement shall bind any and all successors In interest, legal representatives and/or other permitted assignees or transferees of CONSUL TANT in the same manner as if those successors in interest, legal representatives or other permitted assignees or transferees had entered into this Agreement originally.

27. Data Sharing. This Agreement requires access by CONSULTANT to CITY's Geographic Information System (GIS} DATA for CONSULTANT to perform the work. CITY agrees to provide the GIS DATA to CONSULTANT solely for the purpose of performance of contracted work with the CITY upon the terms and conditions specified in Exhibit D, incorporated herein by this reference.
[Signatures on Next Page)
10 Updated June 2020

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

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

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

ATTEST:
. City Clerk
Michelle Bigelow
Print Name
Date: 8/18/2020
APPROVED AS TO FORM:
484 ...

Donald A. Larkin
Print Name
Date: 8/18/2020

CITY OF MORGAN HILL
Ci 9440 ...

Christina J. Turner
Print Name
Date: 8/18/2020
HARRIS & ASSOCIATES, INC.
�r:DocuSlgnld by:

EC::!8BE408 ...

Steven Winchester - Sr. Vice President
Print Name and Title of Signer.

If Corporate: Chairman, President or
Vice President
Date: 7/30/2020
- teven Winchester - CFO
Print Name and Title of Signer.

If Corporate: Secretary, Assistant
Secretary, Chief Financial Officer or
Assistant Treasurer
Date: 7/30/2020
U:\Legal Forms\Consultant Agreements\City Services Agreement For Design Professlonals.Docx 11 Updated June 2020

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EXHIBIT A

SCOPE OF SERVICES
Under the direct supervision of a Land Development Engineering staff, the CONSUL TANT will provide On-Call Engineering Plan Review & Technical Support Services for an initial term of two years {Fiscal Year 2020-21 and FY 2021-22).

The following are the types of tasks that are included in the CONSULTANT'S scope of services:
• Standard and Expedited engineering plan review of improvement plans for conformance with adopted City standards, approved conditions of approval, and/or accepted industry practice
• Review storm drain and/or sanitary sewer hydraulic calculations for conformance with City standards and/or accepted industry practice
• Review the civil engineering and site planning aspects of tentative maps and other land development applications for conformance with City standards as part of the City's entitlement process
• Review of Post-Construction Stormwater Runoff Management Plans {SWRMPs) and Stormwater Control Plans submitted by private development projects; inspections and other program management functions to comply with the City's National Pollutant Discharge Elimination System (NP.DES) permit requirements • Prepare flood studies, review floodplain proposals, Flood Program management support, and other related functions as needed
• Transportation/traffic engineering-related services
• Other general engineering services as needed
12 Updated June 2020

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EXHIBIT B

SCHEDULE OF COMPENSATION RATES
CONSULTANT'S services will be billed on a time-and-materials basis according to the Standard Rates shown below effective July 2, 2020 - June 30, 2022.

Ho.urly Rate.s
2020 2021 2022
Principal-in-Charge $260 $270 $280
Senior Project Manager $210 $220 $230
Project Manager $190 $200 $210
Assistant Project Manager $160 $170 $180
Traffic Engineer $230 $240 $250
Senior Project Engineer $160 $170 $180
Project Engineer $140 $150 $160
Design Engineer $125 $135 $145
Note: Rates are subject to adjustment due to promotions during the effective period of this schedule. Hourly rates include most direct costs such as travel, equipment, computers, communications and reproduction (except large plan sets). 13 Updated June 2020

DocuSign Envelope ID: DDEBAD94-CEDD-40DA-BDD8-EFE818ED769E

EXHIBIT C

SCHEDULE OF PERFORMANCE
CONSULTANT'S services will be on an as needed, on-call basis. 14 Updated June 2020

DocuSign Envelope ID: DDEBAD94-CEDD-40DA-BDD8-EFE818ED769E

EXHIBITD
Third Party Data Use Agreement

1. CONSULT ANT agrees that it shall not use any information provided by CITY for any purpose other than for PROJECT without the prior express written consent of CITY. CONSULTANT also hereby acknowledges that the data delivered by CITY is for use by CONSULTANT only, and is not to be released to any other party by any means whatsoever, including the Internet, without prior written consent of CITY. CONSULT ANT shall provide written notice to CITY of any subcontractor with whom Geographic Information System data (GIS DATA) is shared for purposes of completing the PROJECT.

2. All data and files are intended for the use within the ordinary course of users' business and may not be sold, placed on the internet or otherwise provided to other parties. All data shall comply with all statutes such as California State Law, Government Code section 6254.21 which prohibits any state or local agency from posting the home address or telephone number of any "elected or appointed official," residing spouse, or child on the internet, and Revenue and Taxation Code sections 408, 408.1, 408.3, and 409 permitting the County Assessor to collect fees for certain information.

3. CITY, as rightful owners, shall retain all rights, title, interest, and copyright of the data. Any products using the GIS DATA must give credit to CITY as the source of the information. Any and all derivative products of the GIS DAT A are owned by CITY and may not be used for any purpose other than the PROJECT without prior written permission of CITY. All derivative products and resulting data shall be provided to CITY Project Manager and CITY GIS Manager at the completion of the PROJECT.

4. CONSULTANT and CITY understand and agree that the information provided pursuant to this Agreement is the product of professional services paid for by CITY and shall remain property of CITY. CONSULTANT may retain copies, including copies stored on magnetic media, only for information and reference, in connection with CONSULT ANT'S use for PROJECT.

5. All of the above terms and conditions apply to any subcontractor retained by CONSULT ANT.

6. In the event of a conflict between the terms and provisions of this Third Party Data Use Agreement and the terms and provisions of the SERVICE AGREEMENT, the terms of the SERVICE AGREEMENT shall govern and control.

DocuSign Envelope ID: DDEBAD94-CEDD-40DA-BDP�::..E���1�E_.97 �9E_ 'AT.EU JUN .E 21, 2022
Harris & Associates, Inc.

ENGINEERING SERVICES
_Di_rector /Pri nci pa I-i n-Cha rge
T�chnica_!_!:.�ad/Qf Manager
Seni9r Proje�� �anager
Project Manager
_
Senior Project Engineer
��ject _En_�ne�r
Se�ior Design Engineer
Desig'2!�ineer ___ _
Administration
�onstruction �-��age!"

HOURLY RATE
$260-$320
$240-$280 - - -·---
$220-$260 . -- - --
$180-$220
- - - ---- -- ---- -
$160-$200
$130-$170 -· ----·
-- - --
$120-$150
-- -----
$110-$130
- -·- -- -
$110-$120
·---
$180-$220
Identifiable non-salary costs that are directly attributable to the project, such as subconsultant, travel, mileage and reproduction costs, are billed at actual cost plus 10 percent to cover overhead and administration.

Billing rates are valid through December 31, 2022. An updated rate table will be provided on January 1, 2023, and on the 1st of January every year thereafter, and will be escalated in alignment with the Consumer Price Index (CPI).

Harris & Associates, Inc. Schedule of Hourly Rates

11 CITY COUNCIL STAFF REPORT
MEETING DATE: October 4, 2023
PREPARED BY:

Matthew Mahood, Economic Development Director
APPROVED BY: City Manager

ACCEPT MORGAN HILL TOURISM BUSINESS IMPROVEMENT

DISTRICT (MHTBID) OWNERS ASSOCIATION ANNUAL REPORT (DBA

VISIT MORGAN HILL)

RECOMMENDATION(S)
Accept and file the Visit Morgan Hill Annual Report.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Maintaining and Enhancing Infrastructure
Preserving and Cultivating Public Trust
2022-2023 Strategic Priorities
Fiscal Sustainability
Economic Development
Guiding Documents
Bikeways, Trails, and Recreation Master Plan
Economic Blueprint
Morgan Hill 2035 General Plan
REPORT NARRATIVE:

Every year, Visit Morgan Hill, the Owners' Association of the Morgan Hill Tourism Business Improvement District (TBID) is required to present an annual report at the end of each year of operation to the Morgan Hill City Council pursuant to Streets and Highways Code §36650. The purpose of this staff report is to present the MHTBID's Annual Report (Attachment 1) for acceptance by the City Council.

Background:

On January 23, 2019, the City Council adopted a resolution establishing a Morgan Hill Tourism Business Improvement District (MHTBID). The MHTBID provides for the collection of a 1.5% assessment of gross short-term room rental revenue, separate from and in addition to the City’s Transient Occupancy Tax (TOT) of 11%. The City’s 11% TOT are public funds that support the General Fund. In comparison, the 1.5% MHTBID assessments are public funds managed by a non-profit board and are used for marketing and sales promotions and sports facility improvements/programs designed to

11 market the area as a tourism and event destination and increase room night sales at assessed lodging businesses.

The Streets and Highways Code 36650 requires the MHTBID to provide the City Council an Annual Report that articulates the following:
• Any proposed changes in the boundaries of the improvement district or any benefit zones or classification of businesses within the district. • The improvements and activities to be provided for that fiscal year. • An estimate of the cost of providing the improvements and the activities for that fiscal year.
• The method and basis of levying the assessment in sufficient detail to allow each business owner to estimate the amount of the assessment to be levied against their business for that fiscal year.
• The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal year.
• The estimated amount of any contributions to be made from sources other than assessments levied pursuant to this part.

Management District Plan:

A Management District Plan (Plan) identifies the MHTBID’s boundary, budget, services, and governance. Below is a summary of the parameters of the MHTBID’s Plan:
• Boundary: All lodging businesses located within the boundaries of the City of Morgan Hill.
• Term: Five (5)-year assessment beginning March 1, 2019, through February 29, 2024, with an annual 30-day period of protest for termination by assessed businesses.
• Budget: Annual assessment rate of 1.5% (on top of the existing TOT) of gross short-term room rental revenue producing an annual budget of approximately $410,000 (estimated pre-COVID-19).
• Mission: Marketing and sales promotions as well as sports facility improvements/programs designed to market the area as a tourism and event destination and increase room night sales at assessed lodging businesses. • Governance: A non-profit corporation, Visit Morgan Hill, serves as the “Owners' Association” charged with the management of funds and implementation of the MHTBID Management District Plan. An annual report is required to be provided to the City Council within 120 days of the MHTBID’s fiscal year (October 30).

The district has a five (5) year life—dated January 23, 2019, with a new District start date of March 1, 2019, and ending February 29, 2024. The assessment began on March 1, 2019. The City is responsible for collecting the assessment on a monthly basis from each lodging business located in the District boundaries. The City forwards the assessments to the Owners' Association, known as Visit Morgan Hill (VMH), a nonprofit

11 corporation in charge of managing District programs as provided in the Management District Plan. The City gets paid a fee equal to two percent (2%) of the amount of assessment collected to cover its collection and administration costs.

Owners’ Association Makeup (Visit Morgan Hill Board of Directors):

The Owners' Association, VMH, is a private entity separate from the City of Morgan Hill.

The make-up of the VMH Board of Directors includes up to four (4) but not less than (3) lodging representatives, two (2) City of Morgan Hill representatives, and up to three (3) but not less than (1) community representatives within the areas associated with wineries, sports recreation, and the community at large with interest in tourism.

Currently, the Assistant City Manager serves on the VMH Board as Secretary and the Public Services Director as Treasurer.

Annual Report
The Owners' Association is required to present an annual report at the end of each year of operation to the City Council pursuant to Streets and Highways Code §36650 within one hundred-twenty (120) days of the MHTBID’s fiscal year or October 30. VMH has provided an Annual Report for the City Council’s review and acceptance (Attachment 1).

VMH’s Annual Report does not propose any changes to the boundaries, benefit zones, or classifications of businesses. A list of activities and accomplishments undertaken by the district are listed in the Annual Report, including the implementation of a Strategic Plan, Brand Marketing, and other various visitor marketing and promotions efforts.

In Fiscal Year 2022/2023, VMH’s income for July 1, 2022 – June 30, 2023, was $345,844. The City collects 2% of the MHTBID for management and administration.

Pre-pandemic, the MHTBID was expected to collect approximately $410,000 annually.

However, the COVID-19 restrictions and travel limitations have made a significant impact on lodging. Hotels continued to have depressed occupancy and rate levels within FY 2022/2023. VMH’s income was 21.9% greater year-over-year for FY 2022/2023, and about 94% of the income for FY 19-20.

COMMUNITY ENGAGEMENT:

Inform
The Visit Morgan Hill board of directors meets every other month and conforms with Brown Act noticing requirements. These meetings are open to the public, and meeting records are kept at visitmorganhill.org.

ALTERNATIVE ACTIONS:

No alternative action is recommended, as this is an annual report on activities which have already occurred.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

On July 18, 2018, the City Council directed staff to proceed with the creation of a Morgan Hill Tourism Business Improvement District (MHTBID).

11 On November 7, 2018, the City Council approved the Management District Plan that identifies the MHTBID’s boundary, budget, services, and governance and directed staff to circulate the MHTBID Petition Form.

On November 28, 2018, the Council approved the Resolution of Intention that directed staff to issue MHTBID Public Notice.

On January 23, 2019, the City Council voted to establish the MHTBID and adopted the Management Plan previously approved.

On November 4, 2020, the City Council approved VMH’s first Annual Report and approved the Resolution of Intention to amend the Management District Plan to change the reporting schedule to conform with the California Streets and Highways Code.

On October 6, 2021, the City Council accepted the 2020-21 Visit Morgan Hill Annual Report.

On October 19, 2022, the City Council accepted the 2021-22 Visit Morgan Hill Annual Report.

FISCAL AND RESOURCE IMPACT:

The City collects a 1.5% gross short-term room rental assessment rate on behalf of the MHTBID. The City retains a fee equal to two percent (2%) of the amount of assessment collected to cover its collection and administration costs. These revenues are separate from and in addition to the City’s Transient Occupancy Tax (TOT) of 11%. The TBID funds are public funds managed by a non-profit board (VMH). They are used for marketing and sales promotions and sports facility improvements/programs designed to market the area as a tourism and event destination and increase room night sales at assessed lodging businesses.

CEQA (California Environmental Quality Act):

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

1 OCTOBER 2023
Submitted by: Visit Morgan Hill
Morgan Hill Tourism Business
Improvement District & Visit
Morgan Hill

ANNUAL REPORT
July 1, 2022 – June 30, 2023

2 ANNUAL REPORT
This report serves as the Annual Report from Visit Morgan Hill (VMH), responsible for the Morgan Hill Tourism Business Improvement District (MHTBID), to the Morgan Hill City Council.

MHTBID BACKGROUND
The MHTBID assessment was implemented beginning March 1, 2019 and will continue for five (5) years through February 29, 2024. The assessment collects 1.5% of hotel tax revenue for the purpose of marketing and promoting Morgan Hill as an overnight sports, recreation, and wine tourism destination.

VISIT MORGAN HILL
The Owners’ Association responsible for the MHTBID is known as the Visit Morgan Hill Board of Directors (known as the advisory body) and is made up of three to four hotel representatives, 2) up to three community members representing the wineries, sports, and community at large; and 3) two representatives from the City of Morgan Hill representing Public Services and Economic Development. VMH was formed in March 2019.

As of June 30, 2023, the Visit Morgan Hill Board members, their representation areas, and terms are:

Representative Industry Appointment Term (2023)
Michael Meredith Hotel 2023-2025
Chris Ghione City N/A
Edith Ramirez City N/A
Gene Guglielmo Winery 2023-2025
Alexis Solis Hotels 2023-2025
Doug Hall Sports Recreation 2023-2024
David Dworkin Hotels 2023-2024
John McKay Community 2023-2024
The initial appointment terms beginning at VMH’s formation in March 2019 are as follows:

Representative Industry Initial Term (2019)
Michael Meredith Hotel 2019-2021
Chris Ghione City N/A
Edith Ramirez City N/A

3 Andrew Firestone Hotel 2019-2021
Gene Guglielmo Winery 2019-2021
Carrie Benjamin* Sports/Recreation 2019-2021
Karen Mendes Hotels 2019-2020
Frank Leal Community 2019-2020
Bina Roy Desai Hotels 2019-2020
*Formerly David Eadie

METHOD AND BASIS OF LEVYING ASSESSMENT
The annual MHTBID assessment rate is one and a one-half of percent (1.5%) of gross shortterm room rental revenue. Assessments are not collected on stays of more than thirty (30) consecutive days or stays by any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty. The City will be responsible for collecting the assessment on a monthly basis (including any delinquencies, penalties and interest) from each lodging business located in the boundaries of the MHTBID.

The MHTBID has a five (5) year life, beginning March 1, 2019 through February 29, 2024.

Pursuant to Streets and Highways Code §36670, once per year, beginning on the anniversary of MHTBID formation, there is a thirty (30) day period in which owners paying fifty percent (50%) or more of the assessment may protest and initiate a City Council hearing on MHTBID termination.

IMPROVEMENTS AND ACTIVITIES
See Appendix Item A
A summary is provided here. Please see detailed overview in Appendix Item A (pgs. 5-14).  Developed and Implemented Annual Budget and Work Plan  Conducted Required Tax, Insurance, and Administrative Filings  Maintained Visitor Information & Business Listings on www.visitmorganhill.org  Maintained Online Public Event Calendar
 Implemented Digital Advertising Campaigns, TV Commercials & Other Paid Media  Generated Direct Partner Referrals (click throughs) to Hotels & Businesses  Hosted Journalists and Influencers and Secured Travel Publication Articles  Published Organic Social Media Campaigns and Routine Posting  Generated 50+ Group Event Leads for Hotel Room Blocks and Venue Rentals  Secured Host City Partnership Contract with Bay Area Panthers Team in MH  Developed Print Tourism Brochure and Distributed at Travel Centers  Maintained Travel Consumer Email Marketing Program

4 COST OF PROVIDING IMPROVEMENTS AND ACTIVITIES
See Appendix Items B & D (pgs. 15-16)
For the fiscal year July 1, 2022 – June 30, 2023, operating expenses totaled $218,790.24.

INCOME STATEMENT
See Appendix Item B (pg. 15)
VMH’s income for July 1, 2022 – June 30, 2023 was $345,844.21. This amount is made up solely of TBID funds. There is a 2-month processing period before VMH receives monthly TBID funds. May and June 2022 TBID collections are distributed to VMH in July and August 2022, respectively. For July 1, 2022 – June 30, 2023 the TBID income collected, but not all distributed to VMH within FY 22-23 was $342,303.33.

BALANCE SHEET
See Appendix Item C (pg. 16)

ESTIMATED AMOUNT OF SURPLUS OR DEFICIT REVENUES CARRIED OVER See Appendix Item D (pg. 16)
A $300,145.68 balance was carried over into FY 2023-2024.

CASH SUMMARY
See Appendix Item D (pg. 16)

TAXES WERE PREPARED WITHOUT AUDIT
Visit Morgan Hill’s 2022 Federal Return of Organization Exempt from Income Tax has been electronically filed and accepted with the Internal Revenue Service, Federal and State. No tax is payable with the filing of this return. Visit Morgan Hill’s 2022 California Exempt Organization Annual Information Return was also electronically filed. No audit conducted.

OTHER CONTRIBUTIONS
No other financial contributions to Visit Morgan Hill were made.

PROPOSED CHANGES
There are no proposed changes to the boundaries of the improvement district or to any of the benefit zones or classification of businesses within the district.

5 APPENDIX Item A: IMPROVEMENTS AND ACTIVITIES DETAIL
Below are the improvements and activities of Visit Morgan Hill July 1, 2022 – June 30, 2023.

Strategy
Visit Morgan Hill has a multi-year Strategic Plan which serves as the long-term guide for the Improvements and Activities the organization implements. The strategy includes a comprehensive tourism asset analysis, opportunities/gaps, market assessments, key priorities, and tactical approach. The tourism goals and priorities may be summarized as:

1. Leisure Market Development (culinary, downtown, winery, farm, recreation, nature)

2. Sports & Private Event Group Development (flat field tournaments, family occasions)

3. Public Events & Product Development (advocacy and partnership for tourism assets) Work Plan
Visit Morgan Hill establishes an Annual Work Plan & Budget, based on the Strategic Plan and market research. The Work Plan outlines the targeting and prioritization of limited staff and funds, for maximum efficiency and effectiveness. The Director reports monthly to the Board of Directors and leverages market and performance data on an ongoing basis.

Performance Indicators
The success of the MHTBID and the Activities and Improvements provided by VMH may be informed by a) high-level market indicators and b) tactical performance metrics:

Market Indicators show the health of the tourism industry but are influenced by economic factors and market fluctuations, outside of VMH’s work. Indicators may include local, regional, and state hotel revenue figures such as local MHTBID & TOT income, Occupancy and ADR rates, and Travel-related Spending Figures.

Performance Metrics are varied in context, but directly attributed to VMH’s activities, such as:
website metrics, social media data, subscribers, advertising campaign click through rates, outbound referrals, leads generated, room block actualization, completed physical projects, etc. Sales/purchase transactions are not handled by VMH, so it is important for local hotels to monitor customer origin (referrals from VMH), and/or to set up mechanisms for reporting.

MARKET INDICATORS
The State of the Local Travel Industry
In FY 22-23, the local lodging industry continued to grapple with a declined business travel market due to COVID-19, inflation, and labor costs. Morgan Hill hotels have encountered a

6 shift in market mix with increased shares of leisure visitors, sports and private event groups, and construction-related travel. While Occupancy levels approach “normal” (64.9%*), rate peaks are inconsistent with prior patterns, resulting in lower Average Daily Rate ($124.25*).

Monthly TBID analysis shows lower monthly revenue during the non-summer seasons, when outdoor group events are less frequent due to weather. This reinforces VMH’s strategy to promote Morgan Hill to non-group, leisure travel markets that are not venue, weather, or event dependent.
* Figures provided are YTD averages as of July 2023.

Budget Analysis
In FY 22-23, Visit Morgan Hill received about 94% of FY 19-20’s income. However, the income remained short of the original District Management Plan estimate of $410,000. The projected expense budget was lower than actual income, resulting in increased carry-over funds. Two other factors also contributed to the carryover: postponement of marketing agency services and the tourism symposium event.

Morgan Hill Visitor Spending
Visit Morgan Hill’s subscription-based data illuminates the representative value of visitor spending within tourism-related merchant categories in the city of Morgan Hill. Visitors make up substantial percentages of lodging, entertainment, restaurants, and retail spending. Each area had YOY increases, indicating a positive trend for spending at hotels, retail, restaurants, and entertainment. See chart:

7 Tourism Related Market Segment Spending (Representative Sample) Total Spend Increase FY 21-22
to FY 22-23 (Visitor & Resident)
Visitor Share of Total
Spend (FY 22-23)
Hotel & Lodging 12% 75%
Entertainment 6% 63%
Restaurant & Dining 6% 45%
Retail 10% 42%

PERFORMANCE METRICS
Digital Visitor Content
Visit Morgan Hill positions itself as the marketing authority for visitor information by increasing “discoverability” online, the predominant platform used for travel research and booking. This augments awareness of Morgan Hill as a travel destination and provides local business conversions. In addition to tourism business listings, VMH published 14 blogs and hundreds of local Event Calendar listings. This year’s approach was 100% organic, versus investing in paid search ads. The prior year, demonstrated by the red and green lines below, shows our brand launch campaign, a significant paid search investment from July 2021 to May 2022. VMH now maintains relative performance on a (mostly) unpaid strategy, shown by the brown line. • 137,000 web visits
• 113,000 unique web visitors
• 211,000 page views
• 5,472 referrals from other websites
• 5,411 referrals from social media
• 16,959 referrals/click throughs to business partners
0 5000
10000
15000
20000
25000
30000
35000
40000
45000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Historic VMH Website Page Views
2019 2020 2021 2022 2023

8 Fall-Winter Campaign
Tapping into the Unique Community theme, VMH crafted a Fall-Winter Instagram and Facebook ad campaign at a very affordable rate. The campaign delivered inspiring ads to San Francisco and Pacific Northwest “workationers,” teasing 4 Reasons to Plan a Trip to Morgan Hill during the fall and winter. We highlighted what makes Morgan Hill special during the season: a conveniently accessible location, connected culinary culture, farms and vineyards, and the locally crafted and curated markets. Ads linked to a blog with more information and path to hotel page. The campaign captured interest at a 3.6% click through rate (4x the industry average) thanks to its substance, intrigue, and intentional targeting.

Instagram Boosts
We leveraged 5 strategic Instagram boosts, which is a paid method of pushing organic posts (versus “ads”) to a wider, targeted audience. Boosts supplement post frequency and are rewarded by Instagram, supporting overall account growth. Boost performance increased from double digits to triple over the course of the year.

Panthers Sponsorship & Marketing Package
Visit Morgan Hill played an instrumental role in securing the Bay Area Panthers 2023 HQ. VMH coordinated and conducted the introductory site tours and meetings with stakeholders. VMH presented one cohesive Morgan Hill package for the foundational facility requirements. By closely coordinating with the Morgan Hill Outdoor Sports Center and City of Morgan Hill to craft an enticing offer, VMH closed the deal and secured a significant marketing package:
(18) :30 TV Commercials on KBCW-TV See Here (closing logos VMH, City, and MHOSC) (2) :15 TV Commercials on CBS Sports Network at Championship See Here (36) :30 Radio commercials on 95.7 The Game
(9) Full Page Logo “Home of the Panthers” in Programs (VMH, City, and MHOSC) (4) LED Digital In-Arena Banner Logo (VMH, City, and MHOSC) (2) End Zone Logo Barrier Pads In-Arena (VMH and MHOSC)

9 (2) Sideline Logo Barrier Pads In-Arena (VMH and MHOSC) (2) Gameday Logo Giveaways – Plush Panther, Can Cozys
(1) Logo & Link on Bay Area Panthers Website
(1) Social Media Video Reel Post and Tags in Dozens of Team Posts (1) 10-Yard Line Logo Barrier Pad
(2) Logo and Link on IFL & IFL Championship Websites
PLUS, numerous indirect Morgan Hill mentions and VMH logo appearances in media outlets The Panthers agreement also included the coordination of 3 events – Meet the Coach, Meet the Players, and Morgan Hill Monday game. Additionally, Morgan Hill hosted an impromptu parade and ceremony, to celebrate the team winning the Championship. Alongside Visit Morgan Hill and the City, the Chamber of Commerce came into the fold as a fundamental community and event partner, with additional support from MHDA and Kiwanis.

For Panthers room night and economic generation, see the Business Development Section.

Regional Partnership
VMH leveraged Visit California’s rural region grant program to participate in additional marketing opportunities. The program grants “rural” regions with funding for self-managed promotion. Though Morgan Hill is in the “South Bay,” Visit California groups Morgan Hill with the rural Central Coast. Therefore, Morgan Hill may benefit from the program. VMH plays an influential role in the region’s marketing and was selected as a host location for a video shoot.

This provides Morgan Hill with extra exposure through the regional promotions, as well as our own video inventory. VMH imagery was selected for a Visit California ad campaign and Visit California and Central Coast websites are among our top visitmorganhill.org referral sources.

10 3rd Party-Published Travel Guide and Map Placements
Visit Morgan Hill put Morgan Hill “on the map” in a prominent “Hidden Gem” spot on the award-winning Central Coast map. The map has a circulation of 200,000, with distribution in 20 California Welcome Centers, California, Phoenix, and Seattle Airports, Washington Ferries, Oregon Welcome Centers, San Jose/Santa Clara Hotels/Visitor Centers, San Francisco Hotels, Los Angeles Hotels/Visitor Center, and Central Valley Hotels/Visitor Centers. VMH also joined several Central California destinations in a discounted cooperative 2-page spread in Visit California’s Road Trip Guide. This piece has a 1 million print circulation, with 600,000 inserted in magazines: Travel + Leisure, Better Homes & Gardens, Food & Wine, and Real Simple. 400K are distributed direct to consumers plus there is an online digital version.

E Newsletters
VMH continued its consumer traveler newsletter “Hot, New, & Happening” and local tourism industry newsletter. The highly targeted audiences produced an average open rate of 58% (up from 47% last year) with 9.6% CTR. Total subscribers are at 1,377 and growing.

Journalist & Media Hosting
VMH secured an agency to attract travel journalist visits and articles featuring Morgan Hill. This term, VMH hosted 3 journalist visits: San Joaquin Magazine, Allegiant Air Magazine, and California Bountiful TV. A one-page feature in Allegiant Airline’s inflight magazine was published in Spring of 2023 and distributed in their Western US route seatbacks for 3 months.

Other Morgan Hill features are due to be published and aired in September 2023. Through this agency, VMH tracks all media coverage of Morgan Hill, regardless of if it was a direct result of VMH efforts. For example, the Bay Area Panthers were featured in various vignettes on local television news segments, putting Morgan Hill in front of thousands of additional viewers.

11 Media Story Pitching & Pickup
VMH conducted monthly proactive and reactive story pitching of themed Morgan Hill content to Visit California, Central Coast, and individual targeted journalists. This resulted in a record number of mentions and articles in travel related print and online publications. This brings massive additional exposure to Morgan Hill and its attributes in the context of trending travel themes.
• Visit California – 10 features (distributed to Visit California’s media list of 1000) • Local and Regional Media – 20 features (examples – SFGate, 7x7, KRON, etc.) • Central Coast Newsletters & Blog – 6 features (600 subscribers) Social Media
This year’s social media was all about video, with dedicated focus on in-house (and agencysupported) production of 43 social media reels. Two campaign themes “Things To Do” and “Hidden Gems” produced high quality, long lifespan, engagement-driving, new reachgenerating content. Instagram is the most significant platform, with a 52.4% YOY increase in followers, a 6.43% average engagement rate (up from 4.55% YOY), and 341,735 impressions.

Reels and posts are repurposed across several social media channels.

Social Media Influencers
VMH continued to see the fruits of its June 2022 “Influencer FAM Tour” with 3rd party content publishing into this reporting fiscal year. Examples include professionally written blog pieces

12 and a feature article in Cycle California magazine. In May 2023, VMH hosted a successful social media influencer partnership with travel couple, Gwyn & Ami, generating new reach for VMH and engagement with a targeted NorCal and PNW audience.

Google Story Network
VMH also participates in the Google Story Network, serving up visual content in online search (versus within a social media app) which strengthens VMH’s digital visibility through location tags and click throughs. This content has a longer lifespan than social media in terms of impressions and engagement. Our “story” collection had 168K impressions and a 2% click through rate. VMH was also shouted out by Visit California for having a top engagement post.

Morgan Hill Brochure
VMH revamped its print brochure this year, with a professional design and distribution company. The print run of 20,000 is stocked in racks at 5 California Welcome Centers, San Jose

13 and Oakland Airports, and +200 San Francisco hotels, car rentals, and airport. The brochure is also in digital format online as well as a clickable banner ad.

Sporting & Event Business Development
VMH played a part in several group sporting events this year. Most notably were the NCAA Men’s Golf Regionals and the Bay Area Panthers. VMH assisted San Jose Sports Authority with the NCAA hotel selection process, created info inserts for attendee packets, published a guest web page with group dining options, and hotel lobby signs. The event generated about 500 room nights in Morgan Hill. The Morgan Hill Aquatics Center also hosted 2 major West Coast swim meets, with a cumulative 8,000 attendees from nationwide and Canada. For 2023, the MHOSC and Aquatic Center will host 40 sporting events representing approximately 119,000 visitors (not including daily practice/local use; counting multi-day event attendees just once).

The Bay Area Panthers Team Headquarters partnership resulted in:
• ~500 Room Nights (Group Room Blocks and Recurring Individual Stays) • ~20 weeks of MHOSC Field Rental
• ~40 CRC & Aquatic Memberships
• Office Space & Apartment Rentals
• Job Creation
• Patrons of Local Businesses & Services (restaurants, storage, barber, etc.) Leads/RFPs
VMH lists event venues and facilities on the website, which serves as an online lead generator for group room blocks. VMH generated 52 leads representing 1,548 room nights this year.

14 Leads are sent to hotels and venues/facilities, requesting rate quotes for the client. Long lead, relationship development efforts are also ongoing with key clients. VMH maintains partnership with local facility partners – the City Parks & Rec Department and Morgan Hill Outdoor Sports Center—and conducts recurring meetings keeping track of facility bookings, upcoming events, and facility planning. Our Sports Facility Calendar remains a popular tool for hotels and local businesses, as well as tournament attendees seeking rooms. The MHOSC is back to a full calendar of tournaments, meaning we take a more tailored and strategic approach to “tournament” lead generation.

Community Industry Partnership
Visit Morgan Hill provides advocacy around issues that impact the tourism and lodging industry. This term, VMH provided various levels of feedback, support letters, and/or comment on the Hotel Incentive Policy, the MOHI Hotel Project, USA BMX at Butterfield Park, Grade Separations and Quiet Zones, Downtown Parklet, and the T Mobile Hometown Grant Request. When aligned, the Chamber of Commerce, Downtown Association, and Visit Morgan Hill collaborate on letters. VMH also attends recurring board and/or committee meetings across partner organizations to provide report outs. VMH also collaborates with the City of Morgan Hill Economic Development Department and the Wineries of Santa Clara Valley. VMH served on the Wine Auction event committee (MHCF), advised on a Morgan Hill Historical Society video project, and posts events hosted by local groups such as LCAC.

Conclusion
The Activities and Improvements provided by VMH in FY 22-23 have increased Morgan Hill’s relevance and recognition as a travel destination, with notable broadcast and digital exposure.

VMH’s early development of high-quality, branded visual assets created the ability to quickly seize commercial opportunities with the Bay Area Panthers and IFL. By introducing dedicated public relations efforts, VMH showcases Morgan Hill in a travel-specific context to a wider audience than ever before. VMH’s social media has matured in both quality and metrics, with enviable engagement rates. Being the first full fiscal year without pandemic restrictions on group events, VMH was also able to benchmark its generation of event and room night leads fitting for local sports facilities and hotels. Lastly, VMH has expanded partnership with community organizations. Thus, creating a more unified local base contributing to the vision of tourism growth that complements and enriches the community.

More information is available by request to Krista Rupp, Executive Director of Visit Morgan Hill at [email protected] or visit our website at www.visitmorganhill.org.

15 APPENDIX Item B: INCOME STATEMENT
Visit Morgan Hill
Income Statement
July 1, 2022 - June 30, 2023
Income
TBID $345,844.21
Total Income $345,844.21
Operating Expenses
Administrative
Salaries $138,560.22
Tax Services $750.00
Employer tax
Employee tax
Payroll service fees & wire fees $719.05
Insurance $2,791.00
Softwares, Systems (adobe, office, squarespace) $1,536.98 Dues and subscriptions data $3,500.00
Office Supplies, hardware, postage, misc $1,234.43
$149,091.68
Marketing Communications
Agency Fees & Campaign Development $35,755.43
Additional Advertising $9,059.19
Content/Materials $6,514.84
$51,329.46
Business Development & Industry
Sports & Event Development $580.94
Hosting Fees $1,790.39
Sponsorship $15,575.00
$17,946.33
Industry & Community Relations
Local Partnership Campaigns $0.00
Partner & Industry Development $422.77
$422.77
Total Operating
Expense $218,790.24
Net Income $127,053.97

16 APPENDIX Item C: BALANCE SHEET
Visit Morgan Hill
Balance Sheet
June 30th, 2023
Assets
Current Assets Checking $300,145.68
AR $0.00
Total Current Assets $300,145.68
Liabilities & Equity
Liabilities $0.00
Equity
Balance

7.1.22 $173,091.71
Year Earnings $345,844.21
Less Op Exp $218,790.24
Net $300,145.68
Total Liabilities & Equity $300,145.68
APPENDIX Item D: CASH SUMMARY
Visit Morgan Hill
Cash Summary
Year Ending June 30th, 2023
Income
TBID $345,844.21
Total $345,844.21
Less Operating Expenses
Administrative & Salary $145,591.68
Dues & Subscriptions $3,500.00
Agency & Digital Campaign $35,755.43
Additional Ads & Promo Material $15,574.03
Business Development $17,946.33
Industry & Community Relations $422.77
Total $218,790.24
Summary
Opening Balance 7.1.22 $173,091.71
Cash Movement $127,053.97
Closing Balance 6.30.23 $300,145.68

12 CITY COUNCIL STAFF REPORT
MEETING DATE: October 4, 2023
PREPARED BY:

Chris Ghione, Public Services Director
APPROVED BY: City Manager

APPROVE OR DENY COMMUNITY FUNDING REQUESTS FOR DIA DE

LOS MUERTOS AND HOLIDAY POSADA EVENTS

RECOMMENDATION(S)
The City Council may approve or deny the requests.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Supporting our Youth, Seniors, and Entire Community
2022-2023 Strategic Priorities
Community Outreach, Engagement, and Messaging
REPORT NARRATIVE:

On August 31, City staff received a community funding request from Sentinals Soccer Club for a fee waiver and funding for events at the Community and Cultural Center (CCC). The events are the Dia de los Muertos Altar Lighting and Celebration (October 28,2023) and the Annual Holiday Posada (December 10, 2023). The request is for a fee waiver and funding totaling $7,900 ($3,100 for the Dia De Los Muertos and $4,800 for the Posada). Additional information is included in the attached funding request applications. Both events have been held previously and received Community Funding.

The City Council has approved Council Policy CP-21-02 City Council Funding Requests (Attachment 3). The policy requires that Community Funding applications be received in March to allow funding requests to be reviewed holistically by the Council during the annual budget process. At the time of budget, these requests were not submitted for consideration. However, the policy allows for Councilmembers to bring forward requests to the City Council for consideration after the initial deadline as long as the request is made to the City Manager 90 days prior to the event. Councilmember Yvonne Martinez Beltran brought the request to the City Manager at the time it was made, on August 31.

The request for the Annual Holiday Posada was made more than 90 days in advance and the request for the Dia de los Muertos Altar Lighting and Celebration was not made more than 90 days in advance.

COMMUNITY ENGAGEMENT:

Not Applicable

12 This is a Councilmember initiated request related to specific events. City staff has not performed any specific engagement related to this request.

ALTERNATIVE ACTIONS:

The City Council could choose to provide community funding for one, both, or neither of the events. The Council could also choose to provide partial funding for the events. To approve the Dia De Las Muertos funding, the Council would need to provide an exception to its policy, as the request is less than 90 days in advance. Any funding provided will require an appropriation of funds from the General Fund.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The Council previously approved Community Funding for a number of organizations with approval of the mid-cycle Budget amendments in June 2023.

FISCAL AND RESOURCE IMPACT:

If the Council elects to provide funding for these events, an appropriation equal to the funding provided must be made from the General Fund.

CEQA (California Environmental Quality Act):

Categorical Exemption
Normal uses of the Community and Cultural Center such as this fall within the CEQA categorical exemption of Class 1, Existing Facilities.

CITY OF MORGAN HILL

CITY COUNCIL POLICIES AND PROCEDURES
CP-21-02
SUBJECT: CITY COUNCIL FUNDING REQUESTS
EFFECTIVE DATE: NOVEMBER 3, 2021
REVISED DATE: NA
ORIGINATING DEPARTMENT: COMMUNITY SERVICES DEPARTMENT
Purpose
The purpose of this policy is to establish a process for community organizations to request funding to support fee waivers, event sponsorship, and other funding requests from the City Council. The policy is intended to allow the City Council to fully evaluate all funding requests at one time along with budget appropriation.

Policy

1. Applicant Criteria
a. The organization requesting funding must be a nonprofit. b. The program, event, or activity provides a direct benefit to the Morgan Hill community.
c. Programs in alignment with the City Council’s Goals and Priorities shall be given priority. City Council priorities are established by the City Council in January of each year.
d. Each organization must submit an inclusivity statement describing how the organization and/or the proposed activity is inclusive of the entire community. e. Existing programs and events may be given priority.

2. Application Availability and Deadline
a. Applications for the next Fiscal Year (July-June) will be available on the City’s website annually in February.
b. Completed applications will be due annually in March.

3. Review and Approval Process
a. Applications will be reviewed by the City staff.
b. Funding applications and details will be included annually in the Budget Development or Mid-Cycle Budget Review process.
c. The City Manager will make recommendations on funding to the City Council based on established Council priorities and funding constraints. d. The City Council shall award and include final funding within the Budget.

4. Reporting Requirements
DocuSign Envelope ID: 87764CAC-F5F2-4AC2-921C-27D9BF34420E

a. Within thirty days following the conclusion of the funded activity, the organization must submit a report to the City reporting out pertinent information related to the activity. For ongoing activities, an annual report must be submitted by July 30 for the prior fiscal year. b. The report shall include a record of the use of City funds and statistics and information that provides details on the activity’s impact to the community.

5. Late Requests
a. Requests received after the deadline shall not be accepted by City staff.

6. Council Member Initiated Event and Fee Waiver Requests a. A member of the City Council may request a fee waiver or funding be provided for an event by applying with the above application process by the March deadline. b. All Council Member initiated requests occurring after the March deadline must be provided to the City Manager 90 days in advance of the event to allow sufficient time to bring to City Council for approval.
c. The City Staff shall prepare a report for the City Council for approval of any Council Member initiated requests.

This policy shall remain in effect until modified by the City Council.

APPROVED:
_______________________________

RICH CONSTANTINE, MAYOR
DocuSign Envelope ID: 87764CAC-F5F2-4AC2-921C-27D9BF34420E