Morgan Hill City Council
January 17, 2024

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response will be final and binding on Contractor. If Engineer’s subsequent direction to Contractor affects Contractor’s cost or time to perform the Work, Contractor may submit a Change Order request as set forth in Article 6 above.
(D) Support; Adjacent Properties. Contractor must provide, install, and maintain all shoring, bracing, and underpinning necessary to provide support to City’s property and adjacent properties and improvements thereon. Contractor must provide notifications to adjacent property owners as may be required by Laws. See also Section 7.15 Trenching of Five Feet or More.
(E) Notification of Property Damage. Contractor must immediately notify the City of damage to any real or personal property resulting from Work on the Project. Contractor must immediately provide a written report to City of any such property damage in excess of $500 (based on estimated cost to repair or replace) within 24 hours of the occurrence. The written report must include: (1) the location and nature of the damage, and the owner of the property, if known; (2) the name and address of each employee of Contractor or any Subcontractor involved in the damage; (3) a detailed description of the incident, including precise location, time, and names and contact information for known witnesses; and (4) a police or first responder report, if applicable. If Contractor is required to file an accident report with another government agency, Contractor will provide a copy of the report to City.

7.6 Materials and Equipment.
(A) General. Unless otherwise specified, all materials and equipment required for the Work must be new, free from defects, and of the best grade for the intended purpose, and furnished in sufficient quantities to ensure the proper and expeditious performance of the Work. Contractor must employ measures to preserve the specified quality and fitness of the materials and equipment. Unless otherwise specified, all materials and equipment required for the Work are deemed to include all components required for complete installation and intended operation, and must be installed in accordance with the manufacturer’s recommendations or instructions. Contractor is responsible for all shipping, handling, and storage costs associated with the materials and equipment required for the Work. Contractor is responsible for providing security and protecting the Work and all of the required materials, supplies, tools and equipment at Contractor’s sole cost until City has formally accepted the Project as set forth in Section 11.1, Final Completion. Contractor will not assign, sell, mortgage, or hypothecate any materials or equipment for the Project, or remove any materials or equipment that have been installed or delivered.

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(B) City-Provided. If the Work includes installation of materials or equipment to be provided by City, Contractor is solely responsible for the proper examination, handling, storage, and installation in accordance with the Contract Documents. Contractor must notify City of any defects discovered in City-provided materials or equipment sufficiently in advance of scheduled use or installation to afford adequate time to procure replacement materials or equipment as needed. Contractor is solely responsible for any loss of or damage to such items which occurs while the items are in Contractor’s custody and control, the cost of which may be offset from the Contract Price and deducted from any payment(s) due to Contractor.
(C) Intellectual Property Rights. Contractor must, at its sole expense, obtain any authorization or license required for use of patented or copyright-protected materials, equipment, devices or processes that are incorporated into the Work. Contractor’s indemnity obligations in Article 4 apply to any claimed violation of intellectual property rights in violation of this provision.

7.7 Substitutions.
(A) “Or Equal.” Any Specification designating a material, product, or thing (collectively “item”) or service by specific brand or trade name, followed by the words “or equal,” is intended only to indicate the quality and type of item or service desired, and Contractor may request use of any equal item or service. Unless otherwise stated in the Specifications, any reference to a specific brand or trade name for an item or service that is used solely for the purpose of describing the type of item or service desired, will be deemed to be followed by the words “or equal.” A substitution will only be approved if it is a true “equal” item or service in every aspect of design, function, and quality, as determined by City, including dimensions, weight, maintenance requirements, durability, fit with other elements, and schedule impacts.
(B) Request for Substitution. A post-award request for substitution of an item or service must be submitted in writing to the Engineer for approval in advance, within the applicable time period provided in the Contract Documents. If no time period is specified, the substitution request may be submitted any time within 35 days after the date of award of the Contract, or sufficiently in advance of the time needed to avoid delay of the Work, whichever is earlier.
(C) Substantiation. Any available data substantiating the proposed substitute as an equal item or service must be submitted with the written request for substitution. Contractor’s failure to timely provide all necessary substantiation, including any required test results as soon as they are

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available, is grounds for rejection of the proposed substitution, without further review.
(D) Burden of Proving Equality. Contractor has the burden of proving, at Contractor’s sole cost, the equality of the proposed substitution. City has sole discretion to determine whether a proposed substitution is equal, and City’s determination is final.

(E) Approval or Rejection. If the proposed substitution is approved, Contractor is solely responsible for any additional costs or time associated with the substituted item or service. If the proposed substitution is rejected, Contractor must, without delay, install the item or use the service as specified by the City.
(F) Contractor’s Obligations. City’s approval of a proposed substitution will not relieve Contractor from any of its obligations under the Contract Documents. In the event Contractor makes an unauthorized substitution, Contractor will be solely responsible for all resulting cost impacts, including the cost of removal and replacement and the impact to other design elements.

7.8 Testing and Inspection.
(A) General. All materials, equipment, and workmanship used in the Work are subject to inspection and testing by City at all times and locations during construction and/or fabrication and at any Worksite, including at shops and yards as well as at the Project site. All manufacturers’ application or installation instructions must be provided to the Inspector at least ten days prior to the first such application or installation. Contractor must, at all times, make the Work available for testing or inspection. Neither City’s inspection or testing of Work, nor its failure to do so, operate to waive or limit Contractor’s duty to complete the Work in accordance with the Contract Documents.
(B) Scheduling and Notification. Contractor must cooperate with City in coordinating the inspections and testing. Contractor must submit samples of materials, at Contractor’s expense, and schedule all tests required by the Contract Documents in time to avoid any delay to the progress of the Work. Contractor must notify the Engineer no later than noon of the Working Day before any inspection or testing and must provide timely notice to the other necessary parties as specified in the Contract Documents. If Contractor schedules an inspection or test beyond regular Work hours, or on a Saturday, Sunday, or recognized City holiday, Contractor must notify the Engineer at least two Working Days in advance for approval. If approved, Contractor must reimburse City for the cost of the overtime inspection or testing. Such costs, including the City’s

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hourly costs for required personnel, may be deducted from payments otherwise due to Contractor.
(C) Responsibility for Costs. City will bear the initial cost of inspection and testing to be performed by independent testing consultants retained by City, subject to the following exceptions:
(1) Contractor will be responsible for the costs of any subsequent tests which are required to substantiate compliance with the Contract Documents, and any associated remediation costs. (2) Contractor will be responsible for inspection costs, at City’s hourly rates, for inspection time lost because the Work is not ready, or Contractor fails to appear for a scheduled inspection. (3) If any portion of the Work that is subject to inspection or testing is covered or concealed by Contractor prior to the inspection or testing, Contractor will bear the cost of making that portion of the Work available for the inspection or testing required by the Contract Documents, and any associated repair or remediation costs. (4) Contractor is responsible for properly shoring all compaction test sites deeper than five feet below grade, as required under Section 7.15 below.
(5) Any Work or material that is defective or fails to comply with the requirements of the Contract Documents must be promptly repaired, removed, replaced, or corrected by Contractor, at Contractor’s sole expense, even if that Work or material was previously inspected or included in a progress payment
(D) Contractor’s Obligations. Contractor is solely responsible for any delay occasioned by remediation of defective or of noncompliant Work or material. Inspection of the Work does not in any way relieve Contractor of its obligations to perform the Work as specified. Any Work done without the required inspection(s) will also be subject to rejection by City. (E) Distant Locations. If required off-site testing or inspection must be conducted at a location more than 100 miles from the Project site, Contractor is solely responsible for the additional travel costs required for testing and/or inspection at such locations.
(F) Final Inspection. The provisions of this Section 7.8 also apply to final inspection under Article 11, Completion and Warranty Provisions.

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7.9 Project Site Conditions and Maintenance. Contractor must at all times, on a 24-hour basis and at its sole cost, maintain the Project site and staging and storage areas in clean, neat, and sanitary condition and in compliance with all Laws pertaining to safety, air quality, and dust control.

Adequate toilets must be provided, and properly maintained and serviced for all workers on the Project site, located in a suitably secluded area, subject to City’s prior approval. Contractor must also, on a daily basis and at its sole cost, remove and properly dispose of the debris and waste materials from the Project site.
(A) Air Emissions Control. Contractor must not discharge smoke or other air contaminants into the atmosphere in violation of any Laws. (B) Dust and Debris. Contractor must minimize and confine dust and debris resulting from the Work. Contractor must abate dust nuisance by cleaning, sweeping, and immediately sprinkling with water excavated areas of dirt or other materials prone to cause dust, and within one hour after the Engineer notifies Contractor that an airborne nuisance exists.

The Engineer may direct that Contractor provide an approved waterspraying truck for this purpose. If water is used for dust control, Contractor will only use the minimum necessary. Contractor must take all necessary steps to keep wastewater out of streets, gutters, or storm drains. See Section 7.19, Environmental Control. If City determines that the dust control is not adequate, City may have the work done by others and deduct the cost from the Contract Price. Contractor will immediately remove any excess excavated material from the Project site and any dirt deposited on public streets.
(C) Clean up. Before discontinuing Work in an area, Contractor must clean the area and remove all rubbish debris and waste along with the construction equipment, tools, machinery, waste and surplus materials.

Contractor must, at all times, minimize and confine dust and debris resulting from construction activities.
(1) Except as otherwise specified, all excess Project materials, and the materials removed from existing improvements on the Project site with no salvage value or intended reuse by City, will be Contractor’s property.
(2) Hauling trucks and other vehicles leaving the Project site must be cleaned of exterior mud or dirt before traveling on City streets.

Materials and loose debris must be delivered and loaded to prevent dropping materials or debris. Contractor must immediately remove spillage from hauling on any publicly traveled way. Streets affected by Work on the Project must be kept clean by street sweeping.

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(D) Disposal. Contractor must dispose of all Project debris and waste materials in a safe and legal manner. Contractor may not burn or bury waste materials on the Project site. Contractor will not allow any dirt, refuse, excavated material, surplus concrete or mortar, or any associated washings, to be disposed of onto streets, into manholes or into the storm drain system.
(E) Completion. At the completion of the Work, Contractor must remove from the Project site all of its equipment, tools, surplus materials, waste materials and debris., presenting a clean and neat appearance.

Before demobilizing from the Project site, Contractor must ensure that all surfaces are cleaned, sealed, waxed, or finished as applicable, and that all marks, stains, paint splatters, and the like have been properly removed from the completed Work and the surrounding areas. Contractor must ensure that all parts of the construction are properly joined with the previously existing and adjacent improvements and conditions. Contractor must provide all cutting, fitting and patching needed to accomplish that requirement. Contractor must also repair or replace all existing improvements that are damaged or removed during the Work, both on and off the Project site, including curbs, sidewalks, driveways, fences, signs, utilities, street surfaces and structures. Repairs and replacements must be at least equal to the previously existing improvements, and the condition, finish and dimensions must match the previously existing improvements.

Contractor must restore to original condition all property or items that are not designated for alteration under the Contract Documents and leave each Worksite clean and ready for occupancy or use by City. (F) Non-Compliance. If Contractor fails to comply with its maintenance and cleanup obligations within two business days following written notification from any City or its representative clean up order, City may, acting in its sole discretion, elect to suspend the Work until the condition(s) is corrected with no increase in the Contract Time or Contract Price, or undertake appropriate cleanup measures without further notice and deduct the cost from any amounts due or to become due to Contractor.

7.10 Instructions and Manuals. Contractor must provide to City three copies each of all instructions and manuals required by the Contract Documents, unless otherwise specified. These must be complete as to drawings, details, parts lists, performance data, and other information that may be required for City to easily maintain and service the materials and equipment installed for this Project.
(A) Submittal Requirements. All manufacturers’ application or installation instructions must be provided to the City at least ten days prior

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to the first such application. The instructions and manuals, along with any required guarantees, must be delivered to City for review. (B) Training. Contractor or its Subcontractors must train City’s personnel in the operation and maintenance of any complex equipment or systems as a condition precedent to Final Completion, if required in the Contract Documents.

7.11 As-built Drawings. Contractor and its Subcontractors must prepare and maintain at the Project site a detailed, complete, and accurate as-built set of the Plans which will be used solely for the purpose of recording changes made in any portion of the original Plans in order to create accurate record drawings at the end of the Project.
(A) Duty to Update. The as-built drawings must be updated as changes occur, on a daily basis if necessary. City may withhold the estimated cost for City to have the as-built drawings prepared from payments otherwise due to the Contractor, until the as-built drawings are brought up to date to the satisfaction of City. Actual locations to scale must be identified on the as-built drawings for all runs of mechanical and electrical work, including all site utilities, installed underground, in walls, floors, or otherwise concealed. Deviations from the original Plans must be shown in detail. The exact location of all main runs, whether piping, conduit, ductwork, or drain lines, must be shown by dimension and elevation. The location of all buried pipelines, appurtenances, or other improvements must be represented by coordinates and by the horizontal distance from visible above-ground improvements.
(B) Final Completion. Contractor must verify that all changes in the Work are depicted in the as-built drawings and must deliver the complete set of as-built drawings to City for review and acceptance as a condition precedent to Final Completion and Final Payment.

7.12 Existing Utilities.
(A) General. The Work may be performed in developed, urban areas with existing utilities, both above and below ground, including utilities identified in the Contract Documents or in other informational documents or records. Contractor must take due care to locate identified or reasonably identifiable utilities before proceeding with trenching, excavation, or any other activity that could damage or disrupt existing utilities. This may include excavation with small equipment, potholing, or hand excavation, and, if practical, using white paint or other suitable markings to delineate the area to be excavated. Except as otherwise provided herein, Contractor will be responsible for costs resulting from damage to identified or reasonably identifiable utilities due to Contractor’s

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negligence or failure to comply with the Contract Documents, including the requirements in this Article 7.
(B) Unidentified Utilities. Pursuant to Government Code Section 4215, if, during the performance of the Work, Contractor discovers utility facilities not identified by City in the Contract Documents, Contractor must immediately provide written notice to City and the utility. City assumes responsibility for the timely removal, relocation, or protection of existing main or trunkline utility facilities located on the Project site, if those utilities are not identified in the Contract Documents. Contractor will be compensated in accordance with the provisions of the Contract Documents for the costs of locating, repairing damage not due to Contractor’s failure to exercise reasonable care, and removing or relocating such utility facilities not indicated in the Plans or Specifications with reasonable accuracy, and for equipment on the Project necessarily idled during such work. Contractor will not be assessed liquidated damages for delay in completion of the Work, to the extent such delay was caused by City’s failure to provide for removal or relocation of the utility facilities.

7.13 Notice of Excavation. Contractor must comply with all applicable requirements in Government Code Sections 4216 through 4216.5, which are incorporated by reference herein. Government Code Section 4216.2, requires that except in an emergency, Contractor must contact the appropriate regional notification center, or Underground Services Alert, at least two working days, but not more than fourteen calendar days before starting any excavation if the excavation will be conducted in an area that is known, or reasonably should be known, to contain subsurface installations. Contractor may not begin excavation until it has obtained and submitted to Engineer an inquiry identification number from Underground Services Alert.

7.14 Trenching and Excavations of Four Feet or More. As required by Public Contract Code Section 7104, if the Work includes digging trenches or other excavations that extend deeper than four feet below the surface, the provisions in this Section apply to the Work and the Project. (A) Duty to Notify. Contractor must promptly, and before the following conditions are disturbed, provide written notice to City if Contractor finds any of the following conditions:
(1) Material that Contractor believes may be a hazardous waste, as defined in Section 25117 of the Health and Safety Code, that is required to be removed to a Class I, Class II, or Class III disposal site in accordance with the provisions of existing Laws;

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(2) Subsurface or latent physical conditions at the Project site differing from those indicated by information about the Project site made available to bidders prior to the deadline for submitting bids; or
(3) Unknown physical conditions at the Project site of any unusual nature, materially different from those ordinarily encountered and generally recognized as inherent in work of the character required by the Contract Documents.
(B) City Investigation. City will promptly investigate the conditions and if City finds that the conditions materially differ from those indicated, apparent, or reasonably inferred from information about the Project site made available to bidders, or involve hazardous waste, and cause a decrease or increase in Contractor’s cost of, or the time required for, performance of any part of the Work, City will issue a Change Order. (C) Disputes. In the event that a dispute arises between City and Contractor regarding any of the conditions specified in subsection (B) above, or the terms of a Change Order issued by the City, Contractor will not be excused from completing the Work within the Contract Time, but must proceed with all Work to be performed under the Contract.

Contractor will retain any and all rights provided either by the Contract or by Laws which pertain to the resolution of disputes between Contractor and City.

7.15 Trenching of Five Feet or More. As required by Labor Code Section 6705, if the Contract Price exceeds $25,000.00 and the Work includes the excavation of any trench or trenches of five feet or more in depth, a detailed plan must be submitted to City for acceptance in advance of the excavation. The detailed plan must show the design of shoring, bracing, sloping, or other provisions to be made for worker protection from the hazard of caving ground during the excavation. If the plan varies from the shoring system standards, it must be prepared by a California registered civil or structural engineer. Use of a shoring, sloping, or protective system less effective than that required by the Construction Safety Orders is prohibited.

7.16 New Utility Connections. Except as otherwise specified, City will pay connection charges and meter costs for new permanent utilities required by the Contract Documents, if any. Contractor must notify City sufficiently in advance of the time needed to request service from each utility provider so that connections and services are initiated in accordance with the Project schedule.

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7.17 Lines and Grades. Contractor is required to use any benchmark provided by the Engineer. Unless otherwise specified in the Contract Documents, Contractor must provide all lines and grades required to execute the Work. Contractor must also provide, preserve, and replace if necessary, all construction stakes required for the Project. All stakes or marks must be set by a California licensed surveyor or a California registered civil engineer. Contractor must notify the Engineer of any discrepancies found between Contractor’s staking and grading and information provided by the Contract Documents. Upon completion, all Work must conform to the lines, elevations, and grades shown in the Plans, including any changes directed by a Change Order.

7.18 Historic or Archeological Items.
(A) Contractor’s Obligations. Contractor must ensure that all persons performing Work at the Project site are required to immediately notify the Project Manager, upon discovery of any potential historic or archeological items, including historic or prehistoric ruins, a burial ground, archaeological or vertebrate paleontological site, including fossilized footprints or other archeological, paleontological or historical feature on the Project site (collectively, “Historic or Archeological Items”). (B) Discovery; Cessation of Work. Upon discovery of any potential Historic or Archeological Items, Work must be stopped within an 85-foot radius of the find and may not resume until authorized in writing by City. If required by City, Contractor must assist in protecting or recovering the Historic or Archeological Items, with any such assistance to be compensated as Extra Work on a time and materials basis under Article 6, Contract Modification. At City’s discretion, a suspension of Work required due to discovery of Historic or Archeological Items may be treated as Excusable Delay pursuant to Article 5 or as a suspension for convenience under Article 13.

7.19 Environmental Control. Contractor must not pollute any drainage course or its tributary inlets with fuels, oils, bitumens, acids, insecticides, herbicides or other harmful materials. Contractor must prevent the release of any hazardous material or hazardous waste into the soil or groundwater, and prevent the unlawful discharge of pollutants into City’s storm drain system and watercourses as required below. Contractor and its Subcontractors must at all times in the performance of the Work comply with all Laws concerning pollution of waterways.
(A) Stormwater Permit. Contractor must comply with all applicable conditions of the State Water Resources Control Board National Pollutant Discharge Elimination System General Permit for Waste Discharge

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Requirements for Discharges of Stormwater Runoff Associated with Construction Activity (“Stormwater Permit”).
(B) Contractor’s Obligations. If required for the Work, a copy of the Stormwater Permit is on file in City’s principal administrative offices, and Contractor must comply with the same without adjustment of the Contract Price or the Contract Time. Contractor must timely and completely submit required reports and monitoring information required by the conditions of the Stormwater Permit. Contractor must also comply with all other Laws governing discharge of stormwater, including applicable municipal stormwater management programs.

7.20 Noise Control. Contractor must comply with all applicable noise control Laws. Noise control requirements apply to all equipment used for the Work or related to the Work, including trucks, transit mixers or transient equipment that may or may not be owned by Contractor.

7.21 Mined Materials. Pursuant to the Surface Mining and Reclamation Act of 1975, Public Resources Code Section 2710 et seq., any purchase of mined materials, such as construction aggregate, sand, gravel, crushed stone, road base, fill materials, and any other mineral materials must originate from a surface mining operation included on the AB 3098 List, which may be accessed online at:
https://www.conservation.ca.gov/smgb/Pages/AB-3098-List.aspx Article 8 - Payment

8.1 Schedule of Values. Prior to submitting its first application for payment, Contractor must prepare and submit to the Project Manager a schedule of values apportioned to the various divisions and phases of the Work, including mobilization and demobilization. If a Bid Schedule was submitted with Contractor’s bid, the amounts in the schedule of values must be consistent with the Bid Schedule. Each line item contained in the schedule of values must be assigned a value such that the total of all items equals the Contract Price. The items must be sufficiently detailed to enable accurate evaluation of the percentage of completion claimed in each application for payment, and the assigned value consistent with any itemized or unit pricing submitted with Contractor’s bid. (A) Measurements for Unit Price Work. Materials and items of Work to be paid for on the basis of unit pricing will be measured according to the methods specified in the Contract Documents.
(B) Deleted or Reduced Work. Contractor will not be compensated for Work that City has deleted or reduced in scope, except for any labor,

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material or equipment costs for such Work that Contractor reasonably incurred before Contractor learned that the Work could be deleted or reduced. Contractor will only be compensated for those actual, direct and documented costs incurred, and will not be entitled to any mark up for overhead or lost profits.

8.2 Progress Payments. Following the last day of each month, or as otherwise required by the Special Conditions or Specifications, Contractor will submit to Project Manager a monthly application for payment for Work performed during the preceding month based on the estimated value of the Work performed during that preceding month.
(A) Application for Payment. Each application for payment must be itemized to include labor, materials, and equipment incorporated into the Work, and materials and equipment delivered to the Project site, as well as authorized and approved Change Orders. Each payment application must be supported by the unit prices submitted with Contractor’s Bid Schedule and/or schedule of values and any other substantiating data required by the Contract Documents. Each application for payment shall be accompanied by completed “Contract Balance Form,” a copy of which is provided at the end of Article 8.
(B) Payment of Undisputed Amounts. City will pay the undisputed amount due within thirty days after Contractor has submitted a complete and accurate payment application, subject to Public Contract Code Section 20104.50. City will deduct a percentage from each progress payment as retention, as set forth in Section 8.5, below, and may withhold additional amounts as set forth in Section 8.3, below.

8.3 Adjustment of Payment Application. City may adjust or reject the amount requested in a payment application, including application for Final Payment, in whole or in part, if the amount requested is disputed or unsubstantiated. Contractor will be notified in writing of the basis for the modification to the amount requested. City may also deduct or withhold from payment otherwise due based upon any of the circumstances and amounts listed below. Sums withheld from payment otherwise due will be released when the basis for that withholding has been remedied and no longer exists.
(A) For Contractor’s unexcused failure to perform the Work as required by the Contract Documents, including correction or completion of punch list items. City may withhold or deduct an amount based on the City’s estimated cost to correct or complete the Work.
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protect the Project site, City may deduct an amount based on the estimated cost to repair or replace.
(C) For Contractor’s failure to pay its Subcontractors and suppliers when payment is due. City may withhold an amount equal to the total of past due payments and may opt to pay that amount separately via joint check pursuant to Section 8.6(B), Joint Checks.
(D) For Contractor’s failure to timely correct rejected, nonconforming, or defective Work. City may withhold or deduct an amount based on the City’s estimated cost to correct or complete the Work.
(E) For any unreleased stop notice, City may withhold 125% of the amount claimed.
(F) For Contractor’s failure to submit any required schedule or schedule update in the manner and within the time specified in the Contract Documents, City may withhold an amount equal to five percent of the total amount requested until Contractor complies with its schedule submittal obligations.
(G) For Contractor’s failure to maintain or submit as-built documents in the manner and within the time specified in the Contract Documents; City may withhold or deduct an amount based on the City’s cost to prepare the as-builts.
(H) For Work performed without Shop Drawings, that has been accepted by the City when accepted Shop Drawings are required before proceeding with the Work, City may deduct an amount based on the estimated cost to correct unsatisfactory Work or diminution in value. (I) For fines, payments, or penalties assessed under the Labor Code, City may deduct from payments due to Contractor as required by Laws and as directed by the Division of Labor Standards Enforcement. (J) For any other costs or charges that may be withheld or deducted from payments to Contractor, as provided in the Contract Documents, including liquidated damages, City may withhold or deduct such amounts from payment otherwise due to Contractor.

8.4 Early Occupancy. Neither City’s payment of progress payments nor its partial or full use or occupancy of the Project constitutes acceptance of any part of the Work.

8.5 Retention. City will retain five percent of the full amount due on each progress payment (i.e., the amount due before any withholding or

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deductions pursuant to Section 8.3, Adjustment of Payment Application), or the percentage stated in the Notice Inviting Bids, whichever is greater, as retention to ensure full and satisfactory performance of the Work.

Contractor is not entitled to any reduction in the rate of withholding at any time, nor to release of any retention before 35 days following City’s acceptance of the Project.
(A) Substitution of Securities. As provided by Public Contract Code Section 22300, Contractor may request in writing that it be allowed, at its sole expense, to substitute securities for the retention withheld by City.

Any escrow agreement entered into pursuant to this provision must fully comply with Public Contract Code Section 22300, and will be subject to approval as to form by City’s legal counsel. If City exercises its right to draw upon such securities in the event of default pursuant to section (7) of the statutory Escrow Agreement for Security Deposits in Lieu of Retention, pursuant to subdivision (g) of Public Contract Code Section 22300 (“Escrow Agreement”), and if Contractor disputes that it is in default, its sole remedy is to comply with the dispute resolution procedures in Article 12 and the provisions therein. It is agreed that for purposes of this paragraph, an event of default includes City’s rights pursuant to these Contract Documents to withhold or deduct sums from retention, including withholding or deduction for liquidated damages, incomplete or defective Work, stop payment notices, or backcharges. It is further agreed that if any individual authorized to give or receive written notice on behalf of a party pursuant to section (10) of the Escrow Agreement are unavailable to give or receive notice on behalf of that party due to separation from employment, retirement, death, or other circumstances, the successor or delegee of the named individual is deemed to be the individual authorized to give or receive notice pursuant to section (10) of the Escrow Agreement.
(B) Release of Undisputed Retention. All undisputed retention, less any amounts that may be assessed as liquidated damages, retained for stop notices, or otherwise withheld pursuant to Section 8.3 Adjustment of Payment Application will be released as Final Payment to Contractor no sooner than 35 days following recordation of the notice of completion, and no later than 60 days following acceptance of the Project by City’s governing body or authorized designee pursuant to Section 11.1(C) Acceptance, or, if the Project has not been accepted, no later than 60 days after the Project is otherwise considered complete pursuant to Public Contract Code Section 7107(c).

8.6 Payment to Subcontractors and Suppliers. Each month, Contractor must promptly pay each Subcontractor and supplier the value of the portion of labor, materials, and equipment incorporated into the Work or delivered to the Project site by the Subcontractor or supplier during the

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preceding month. Such payments must be made in accordance with the requirements of Laws pertaining to such payments, and those of the Contract Documents and applicable subcontract or supplier contract. (A) Withholding for Stop Notice. Pursuant to Civil Code Section 9358, City will withhold 125% of the amount claimed by an unreleased stop notice, a portion of which may be retained by City for the costs incurred in handling the stop notice claim, including attorneys’ fees and costs, as authorized by law.
(B) Joint Checks. City reserves the right, acting in its sole discretion, to issue joint checks made payable to Contractor and a Subcontractor or supplier, if City determines this is necessary to ensure fair and timely payment to Subcontractor or supplier who has provided services or goods for the Project. As a condition to release of payment by a joint check, the joint check payees may be required to execute a joint check agreement in a form provided or approved by the City Attorney’s Office. The joint check payees will be jointly and severally responsible for the allocation and disbursement of funds paid by joint check. Payment by joint check will not be construed to create a contractual relationship between City and a Subcontractor or supplier of any tier beyond the scope of the joint check agreement.

8.7 Final Payment. Contractor’s application for Final Payment must comply with the requirements for submitting an application for a progress payment as stated in Section 8.2, above. Corrections to previous progress payments, including adjustments to estimated quantities for unit priced items, may be included in the Final Payment. If Contractor fails to submit a timely application for Final Payment, City reserves the right to unilaterally process and issue Final Payment without an application from Contractor in order to close out the Project. For the purposes of determining the deadline for Claim submission pursuant to Article 12, the date of Final Payment is deemed to be the date that City acts to release undisputed retention as final payment to Contractor, or otherwise provides written notice to Contractor of Final Payment or that no undisputed funds remain available for Final Payment due to offsetting withholdings or deductions pursuant to Section 8.3, Adjustment of Payment Application. If the amount due from Contractor to City exceeds the amount of Final Payment, City retains the right to recover the balance from Contractor or its sureties.

8.8 Release of Claims. City may, at any time, require that payment of the undisputed portion of any progress payment or Final Payment be contingent upon Contractor furnishing City with a written waiver and release of all claims against City arising from or related to the portion of Work covered by those undisputed amounts, subject to the limitations of

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Public Contract Code Section 7100. Any disputed amounts may be specifically excluded from the release.

8.9 Warranty of Title. Contractor warrants that title to all work, materials, or equipment incorporated into the Work and included in a request for payment will pass over to City free of any claims, liens, or encumbrances upon payment to Contractor.

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CONTRACT BALANCE FORM
Morgan Hill Aquatic Center Recreation Pool Replastering Project Note: A detailed invoice MUST be attached to this Contract Balance Form.

CONTRACTOR NAME: ____________________________ DATE: ______________________________ MAILING ADDRESS: ______________________________ TELEPHONE NO.: ____________________ ______________________________ FAX NO.: ___________________________ ______________________________ PROJECT NO.: ______________________ INVOICE NO.: _______________________

1. ORIGINAL CONTRACT AMOUNT: $________

2. APPROVED CHANGE ORDERS TOTAL: $________

3. REVISED CONTRACT AMOUNT: (1+2) $________

4. PREVIOUS BALANCE PAID: $________

5. REMAINING BALANCE: (3-4) $________

6. CURRENT PROGRESS PAYMENT DUE: $________
(before retention)

7. 5% RETENTION FROM WORK DONE: (-)$________

8. CURRENT BALANCE DUE: (6-7) $________

9. REMAINING BALANCE OF REVISED
CONTRACT AMOUNT: (5-8) $________
(including retention)

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Article 9 - Labor Provisions

9.1 Discrimination Prohibited. Discrimination against any prospective or present employee engaged in the Work on grounds of race, color, ancestry, national origin, ethnicity, religion, sex, sexual orientation, age, disability, or marital status is strictly prohibited. Contractor and its Subcontractors are required to comply with all applicable Laws prohibiting discrimination, including the California Fair Employment and Housing Act (Government Code Section 12900 et seq.), Government Code Section 11135, and Labor Code Sections 1735, 1777.5, 1777.6, and 3077.5.

9.2 Labor Code Requirements.
(A) Eight Hour Day. Pursuant to Labor Code Section 1810, eight hours of labor constitute a legal day’s work under this Contract. (B) Penalty. Pursuant to Labor Code Section 1813, Contractor will forfeit to City as a penalty, the sum of $25.00 for each day during which a worker employed by Contractor or any Subcontractor is required or permitted to work more than eight hours in any one calendar day or more than 40 hours per calendar week, except if such workers are paid overtime under Labor Code Section 1815.
(C) Apprentices. Contractor is responsible for compliance with the requirements governing employment and payment of apprentices, as set forth in Labor Code Section 1777.5, which is fully incorporated by reference.
(D) Notices. Pursuant to Labor Code Section 1771.4, Contractor is required to post all job site notices prescribed by Laws.

9.3 Prevailing Wages. Each worker performing Work under this Contract that is covered under Labor Code Sections 1720, 1720.3, or 1720.9, including cleanup at the Project site, must be paid at a rate not less than the prevailing wage as defined in Sections 1771 and 1774 of the Labor Code. The prevailing wage rates are available online at http://www.dir.ca.gov/dlsr. Contractor must post a copy of the applicable prevailing rates at the Project site.
(A) Penalties. Pursuant to Labor Code Section 1775, Contractor and any Subcontractor will forfeit to City as a penalty up to $200.00 for each calendar day, or portion of a day, for each worker paid less than the applicable prevailing wage rate. Contractor must also pay each worker the difference between the applicable prevailing wage rate and the amount actually paid to that worker.

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(B) Federal Requirements. If this Project is subject to federal prevailing wage requirements in addition to California prevailing wage requirements, Contractor and its Subcontractors are required to pay the higher of the currently applicable state or federal prevailing wage rates.

9.4 Payroll Records. Contractor must comply with the provisions of Labor Code Sections 1771.4, 1776, and 1812 and all implementing regulations, which are fully incorporated by this reference, including requirements for electronic submission of payroll records to the DIR.
(A) Contractor and Subcontractor Obligations. Contractor and each Subcontractor must keep accurate payroll records, showing the name, address, social security number, work classification, straight time and overtime hours worked each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker, or other employee employed in connection with the Work. Each payroll record must contain or be verified by a written declaration that it is made under penalty of perjury, stating both of the following:
(1) The information contained in the payroll record is true and correct.
(2) Contractor or Subcontractor has complied with the
requirements of Labor Code Sections 1771, 1811, and 1815 for any Work performed by its employees on the Project.
(B) Certified Record. A certified copy of an employee’s payroll record must be made available for inspection or furnished to the employee or his or her authorized representative on request, to City, or to the Division of Labor Standards Enforcement, to the Division of Apprenticeship Standards of the DIR, and as further required by the Labor Code. (C) Enforcement. Upon notice of noncompliance with Labor Code Section 1776, Contractor or Subcontractor has ten days in which to comply with the requirements of this section. If Contractor or Subcontractor fails to do so within the ten-day period, Contractor or Subcontractor will forfeit a penalty of $100.00 per day, or portion of a day, for each worker for whom compliance is required, until strict compliance is achieved. Upon request by the Division of Apprenticeship Standards, or the Division of Labor Standards Enforcement, these penalties will be withheld from payments then due to Contractor.

9.5 Labor Compliance. Pursuant to Labor Code Section 1771.4, the Contract for this Project is subject to compliance monitoring and enforcement by the DIR.

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9.6 Wage Theft Prevention. Compliance with Wage and Hour Laws:

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

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

Prior Judgments against Contractor and/or its Subcontractors: BY

SIGNING THIS AGREEMENT, CONTRACTOR 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 CONTRACTOR OR ITS SUBCONTRACTOR(S)
HAS VIOLATED ANY APPLICABLE WAGE AND HOUR LAWS.

CONTRACTOR 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 Contractor or an subcontractor it employs to perform work under this Agreement has violated any applicable wage and hour law, or Contractor learns of such a judgment, decision, or order that was not previously disclosed, Contractor shall inform the City Attorney, no more than fifteen (15) days after the judgment, decision or order becomes final or of learning of the final judgment, decision or order. Contractor 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 Contractor 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 Contractor or any subcontractor it employs to perform work under this Agreement has been found in

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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 Contractor until such judgment, decision or order has been satisfied in full.

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

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

The Notice provisions of this Section are separate from any other notice provisions in this Agreement and, accordingly, only notice provided to the above address satisfies the notice requirements in this Section.

Article 10 - Safety Provisions

10.1 Safety Precautions and Programs. Contractor and its Subcontractors are fully responsible for safety precautions and programs, and for the safety of persons and property in the performance of the Work.

Contractor and its Subcontractors must at all times comply with all applicable health and safety Laws and seek to avoid injury, loss, or damage to persons or property by taking reasonable steps to protect its employees and other persons at any Worksite, materials and equipment stored on or off site, and property at or adjacent to any Worksite. (A) Reporting Requirements. Contractor must immediately notify the City of any death, serious injury or illness resulting from Work on the Project. Contractor must immediately provide a written report to City of each recordable accident or injury occurring at any Worksite within 24 hours of the occurrence. The written report must include: (1) the name and address of the injured or deceased person; (2) the name and address of each employee of Contractor or of any Subcontractor involved in the incident; (3) a detailed description of the incident, including precise location, time, and names and contact information for known witnesses; and (4) a police or first responder report, if applicable. If Contractor is required to file an accident report with a government agency, Contractor will provide a copy of the report to City.
(B) Legal Compliance. Contractor’s safety program must comply with the applicable legal and regulatory requirements. Contractor must provide City with copies of all notices required by Laws.

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(C) Contractor’s Obligations. Any damage or loss caused by Contractor arising from the Work which is not insured under property insurance must be promptly remedied by Contractor.
(D) Remedies. If City determines, in its sole discretion, that any part of the Work or Project site is unsafe, City may, without assuming responsibility for Contractor’s safety program, require Contractor or its Subcontractor to cease performance of the Work or to take corrective measures to City’s satisfaction. If Contractor fails to promptly take the required corrective measures, City may perform them and deduct the cost from the Contract Price. Contractor agrees it is not entitled to submit a Claim for damages, for an increase in Contract Price, or for a change in Contract Time based on Contractor’s compliance with City’s request for corrective measures pursuant to this provision.

10.2 Hazardous Materials. Unless otherwise specified in the Contract Documents, this Contract does not include the removal, handling, or disturbance of any asbestos or other Hazardous Materials. If Contractor encounters materials on the Project site that Contractor reasonably believes to be asbestos or other Hazardous Materials, and the asbestos or other Hazardous Materials have not been rendered harmless, Contractor may continue Work in unaffected areas reasonably believed to be safe, but must immediately cease work on the area affected and report the condition to City. No asbestos, asbestos-containing products or other Hazardous Materials may be used in performance of the Work.

10.3 Material Safety. Contractor is solely responsible for complying with Section 5194 of Title 8 of the California Code of Regulations, including by providing information to Contractor’s employees about any hazardous chemicals to which they may be exposed in the course of the Work. A hazard communication program and other forms of warning and training about such exposure must be used. Contractor must also maintain Safety Data Sheets (“SDS”) at the Project site, as required by Law, for materials or substances used or consumed in the performance of the Work. The SDS will be accessible and available to Contractor’s employees, Subcontractors, and City.
(A) Contractor Obligations. Contractor is solely responsible for the proper delivery, handling, use, storage, removal, and disposal of all materials brought to the Project site and/or used in the performance of the Work. Contractor must notify the Engineer if a specified product or material cannot be used safely.
(B) Labeling. Contractor must ensure proper labeling on any material brought onto the Project site so that any persons working with or in the vicinity of the material may be informed as to the identity of the material,

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any potential hazards, and requirements for proper handling, protections, and disposal.

10.4 Hazardous Condition. Contractor is solely responsible for determining whether a hazardous condition exists or is created during the course of the Work, involving a risk of bodily harm to any person or risk of damage to any property. If a hazardous condition exists or is created, Contractor must take all precautions necessary to address the condition and ensure that the Work progresses safely under the circumstances. Hazardous conditions may result from, but are not limited to, use of specified materials or equipment, the Work location, the Project site condition, the method of construction, or the way any Work must be performed.

10.5 Emergencies. In an emergency affecting the safety or protection of persons, Work, or property at or adjacent to any Worksite, Contractor must take reasonable and prompt actions to prevent damage, injury, or loss, without prior authorization from the City if, under the circumstances, there is inadequate time to seek prior authorization from the City.

Article 11 - Completion and Warranty Provisions

11.1 Final Completion.
(A) Final Inspection and Punch List. When the Work required by this Contract is fully performed, Contractor must provide written notification to City requesting final inspection. The Engineer will schedule the date and time for final inspection, which must include Contractor’s primary representative for the Project and its superintendent. Based on that inspection, City will prepare a punch list of any items that are incomplete, missing, defective, incorrectly installed, or otherwise not compliant with the Contract Documents The punch list to Contractor will specify the time by which all of the punch list items must be completed or corrected. The punch list may include City’s estimated cost to complete each punch list item if Contractor fails to do so within the specified time. The omission of any non-compliant item from a punch list will not relieve Contractor from fulfilling all requirements of the Contract Documents. Contractor’s failure to complete any punch list item within the time specified in the punch list will not waive or abridge its warranty obligations for any such items that must be completed by the City or by a third party retained by the City due to Contractor’s failure to timely complete any such outstanding item. (B) Requirements for Final Completion. Final Completion will be achieved upon completion or correction of all punch list items, as verified by City’s further inspection, and upon satisfaction of all other Contract requirements, including any commissioning required under the Contract

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Documents, and submission of all final submittals, including instructions and manuals as required under Section 7.10, and complete, final as-built drawings as required under Section 7.11, all to City’s satisfaction. (C) Acceptance. The Project will be considered accepted upon City Council action during a public meeting to accept the Project, unless the Engineer is authorized to accept the Project, in which case the Project will be considered accepted upon the date of the Engineer’s issuance of a written notice of acceptance. In order to avoid delay of Project close out, the City may elect, acting in its sole discretion, to accept the Project as complete subject to exceptions for punch list items that are not completed within the time specified in the punch list.
(D) Final Payment and Release of Retention. Final Payment and release of retention, less any sums withheld pursuant to the provisions of the Contract Documents, will not be made sooner than 35 days after recordation of the notice of completion. If Contractor fails to complete all of the punch list items within the specified time, City may withhold up to 150% of City’s estimated cost to complete each of the remaining items from Final Payment and may use the withheld retention to pay for the costs to self-perform the outstanding items or to retain a third party to complete any such outstanding punch list item.

11.2 Warranty.
(A) General. Contractor warrants that all materials and equipment will be new unless otherwise specified, of good quality, in conformance with the Contract Documents, and free from defective workmanship and materials. Contractor further warrants that the Work will be free from material defects not intrinsic in the design or materials required in the Contract Documents. Contractor warrants that materials or items incorporated into the Work comply with the requirements and standards in the Contract Documents, including compliance with Laws, and that any Hazardous Materials encountered or used were handled as required by Laws. At City’s request, Contractor must furnish satisfactory evidence of the quality and type of materials and equipment furnished. Contractor’s warranty does not extend to damage caused by normal wear and tear, or improper use or maintenance.
(B) Warranty Period. Contractor’s warranty must guarantee its Work for a period of one year from the date of Project acceptance (the “Warranty Period”), except when a longer guarantee is provided by a supplier or manufacturer or is required by the Specifications or Special Conditions. Contractor must obtain from its Subcontractors, suppliers and manufacturers any special or extended warranties required by the Contract Documents.

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(C) Warranty Documents. As a condition precedent to Final Completion, Contractor must supply City with all warranty and guarantee documents relevant to equipment and materials incorporated into the Work and guaranteed by their suppliers or manufacturers. (D) Subcontractors. The warranty obligations in the Contract Documents apply to Work performed by Contractor and its Subcontractors, and Contractor expressly agrees to be co-guarantor of such Work.
(E) Contractor’s Obligations. Upon written notice from City to Contractor of any defect in the Work discovered during the Warranty Period, Contractor or its responsible Subcontractor must promptly correct the defective Work at its own cost. Contractor’s obligation to correct defects discovered during the Warranty Period will continue past the expiration of the Warranty Period as to any defects in Work for which Contractor was notified prior to expiration of the Warranty Period. Work performed during the Warranty Period (“Warranty Work”) will be subject to the warranty provisions in this Section 11.2 for a one-year period that begins upon completion of such Warranty Work to City’s satisfaction. (F) City’s Remedies. If Contractor or its responsible Subcontractor fails to correct defective Work within ten days following notice by City, or sooner, if required by the circumstances, Contractor expressly agrees that City may correct the defects to conform with the Contract Documents at Contractor’s sole expense. Contractor must reimburse City for its costs in accordance with subsection (H) below.
(G) Emergency Repairs. In cases of emergency where any delay in correcting defective Work could cause harm, loss or damage, City may immediately correct the defects to conform with the Contract Documents at Contractor’s sole expense. Contractor or its surety must reimburse City for its costs in accordance with subsection (H), below. (H) Reimbursement. Contractor must reimburse City for its costs to repair under subsections (F) or (G), above, within 30 days following City’s submission of a demand for payment pursuant to this provision. If City is required to initiate legal action to compel Contractor’s compliance with this provision, and City is the prevailing party in such action, Contractor and its surety are solely responsible for all of City’s attorney’s fees and legal costs expended to enforce Contractor’s warranty obligations herein in addition to any and all costs City incurs to correct the defective Work.

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Completion if City has determined that the Project or portion of it is in a condition suitable for the proposed occupation or use, and that it is in its best interest to occupy or make use of the Project, or any portions of it, prior to Final Completion. City will notify Contractor in writing of its intent to occupy or make use of the Project or any portions of the Project, pursuant to this provision.
(A) Non-Waiver. Occupation or use of the Project, in whole or in part, prior to Final Completion will not operate as acceptance of the Work or any portion of it, nor will it operate as a waiver of any of City’s rights or Contractor’s duties pursuant to these Contract Documents, and will not affect nor bear on the determination of the time of substantial completion with respect to any statute of repose pertaining to the time for filing an action for construction defect.
(B) City’s Responsibility. City will be responsible for the cost of maintenance and repairs due to normal wear and tear with respect to those portions of the Project that are being occupied or used before Final Completion. The Contract Price or the Contract Time may be adjusted pursuant to the applicable provisions of these Contract Documents if, and only to the extent that, any occupation or use under this Section actually adds to Contractor’s cost or time to complete the Work within the Contract Time.

11.4 Substantial Completion. For purposes of determining “substantial completion” with respect to any statute of repose pertaining to the time for filing an action for construction defect, “substantial completion” is deemed to mean the last date that Contractor or any Subcontractor performs Work on the Project prior to City acceptance of the Project, except for warranty work performed under this Article.

Article 12 - Dispute Resolution

12.1 Claims. This Article applies to and provides the exclusive procedures for any Claim arising from or related to the Contract or performance of the Work.
(A) Definition. “Claim” means a separate demand by Contractor, submitted in writing by registered or certified mail with return receipt requested, for a change in the Contract Time, including a time extension or relief from liquidated damages, or a change in the Contract Price when the demand has previously been submitted to City in accordance with the requirements of the Contract Documents, and which has been rejected or disputed by City, in whole or in part. A Claim may also include that portion of a unilateral Change Order that is disputed by the Contractor.

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(B) Limitations. A Claim may only include the portion of a previously rejected demand that remains in dispute between Contractor and City.

With the exception of any dispute regarding the amount of money actually paid to Contractor as Final Payment, Contractor is not entitled to submit a Claim demanding a change in the Contract Time or the Contract Price, which has not previously been submitted to City in full compliance with Article 5 and Article 6, and subsequently rejected in whole or in part by City.
(C) Scope of Article. This Article is intended to provide the exclusive procedures for submission and resolution of Claims of any amount, and applies in addition to the provisions of Public Contract Code Section 9204 and Sections 20104 et seq., which are incorporated herein by this reference.
(D) No Work Delay. Notwithstanding the submission of a Claim or any other dispute between the parties related to the Project or the Contract Documents, Contractor must perform the Work and may not delay or cease Work pending resolution of a Claim or other dispute, but must continue to diligently prosecute the performance and timely completion of the Work, including the Work pertaining to a Claim or other dispute. (E) Informal Resolution. Contractor will make a good faith effort to informally resolve a dispute before initiating a Claim, preferably by face-toface meeting between authorized representatives of Contractor and City.

12.2 Claims Submission. The following requirements apply to any Claim subject to this Article:
(A) Substantiation. The Claim must be submitted to City in writing, clearly identified as a “Claim” submitted pursuant to this Article 12, and must include all of the documents necessary to substantiate the Claim including the Change Order request that was rejected in whole or in part, and a copy of City’s written rejection that is in dispute. The Claim must clearly identify and describe the dispute, including relevant references to applicable portions of the Contract Documents, and a chronology of relevant events. Any Claim for additional payment must include a complete, itemized breakdown of all known or estimated labor, materials, taxes, insurance, and subcontract, or other costs. Substantiating documentation such as payroll records, receipts, invoices, or the like, must be submitted in support of each component of claimed cost. Any Claim for an extension of time or delay costs must be substantiated with a schedule analysis and narrative depicting and explaining claimed time impacts.

Contractor understands that submission of a Claim which has no basis in fact or which Contractor knows to be false may violate the False Claims Act (Government Code Section 12650 et seq.).

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(B) Claim Format and Content. A Claim must be submitted in the following format:
(1) Provide a cover letter, specifically identifying the submission as a “Claim” submitted under this Article 12 and specifying the requested remedy (e.g., amount of proposed change to Contract Price and/or change to Contract Time).
(2) Provide a summary of each Claim, including underlying facts and the basis for entitlement, and identify each specific demand at issue, including the specific Change Order request (by number and submittal date), and the date of City's rejection of that demand, in whole or in part.
(3) Provide a detailed explanation of each issue in dispute. For multiple issues included within a single Claim or for multiple Claims submitted concurrently, separately number and identify each individual issue or Claim and include the following for each separate issue or Claim:
(a) A succinct statement of the matter in dispute, including Contractor’s position and the basis for that position;
(b) Identify and attach all documents that substantiate the Claim, including relevant provisions of the Contract
Documents, RFIs, calculations, and schedule analysis (see subsection (A), Substantiation above);
(c) A chronology of relevant events; and
(d) Analysis and basis for claimed changes to Contract
Price, Contract Time, or any other remedy requested.
(4) Provide a summary of issues and corresponding claimed damages. If, by the time of the Claim submission deadline (below), the precise amount of the requested change in the Contract Price or Contract Time is not yet known, Contractor must provide a good faith estimate, including the basis for that estimate, and must identify the date by which it is anticipated that the Claim will be updated to provide final amounts.
(5) Include the following certification, executed by Contractor’s authorized representative:

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“The undersigned Contractor certifies under penalty of perjury that its statements and representations in this Claim submittal are true and correct. Contractor warrants that this Claim submittal is comprehensive and complete as to the matters in dispute, and agrees that any costs, expenses, or delay not included herein are deemed waived.
(C) Submission Deadlines.
(1) A Claim disputing rejection of a request for a change in the Contract Time or Contract Price must be submitted within 15 days following the date that City notified Contractor in writing that a request for a change in the Contract Time or Contract Price, duly submitted in compliance with Article 5 and Article 6, has been rejected in whole or in part. A Claim disputing the terms of a unilateral Change Order must be submitted within 15 days following the date of issuance of the unilateral Change Order. These Claim deadlines apply even if Contractor cannot yet quantify the total amount of any requested change in the Contract Time or Contract Price. If the Contractor cannot quantify those amounts, it must submit an estimate of the amounts claimed pending final determination of the requested remedy by Contractor.
(2) With the exception of any dispute regarding the amount of Final Payment, any Claim must be filed on or before the date of Final Payment, or will be deemed waived.
(3) A Claim disputing the amount of Final Payment must be submitted within 15 days of the effective date of Final Payment, under Section 8.7, Final Payment, above.
(4) Strict compliance with these Claim submission deadlines is necessary to ensure that any dispute may be mitigated as soon as possible, and to facilitate cost-efficient administration of the Project.

Any Claim that is not submitted within the specified deadlines will be deemed waived by Contractor.

12.3 City’s Response. City will respond within 45 days of receipt of the Claim with a written statement identifying which portion(s) of the Claim are disputed, unless the 45-day period is extended by mutual agreement of City and Contractor or as otherwise allowed under Public Contract Code Section 9204. However, if City determines that the Claim is not adequately substantiated pursuant to Section 12.2(A), Substantiation, City may first request, in writing, within 30 days of receipt of the Claim, any additional documentation supporting the Claim or relating to defenses to the Claim that City may have against the Claim.

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(A) Additional Information. If additional information is thereafter required, it may be requested and provided upon mutual agreement of City and Contractor. If Contractor’s Claim is based on estimated amounts, Contractor has a continuing duty to update its Claim as soon as possible with information on actual amounts in order to facilitate prompt and fair resolution of the Claim.
(B) Non-Waiver. Any failure by City to respond within the times specified above will not be construed as acceptance of the Claim in whole or in part, or as a waiver of any provision of these Contract Documents.

12.4 Meet and Confer. If Contractor disputes City’s written response, or City fails to respond within the specified time, within 15 days of receipt of City’s response, or within 15 days of City’s failure to respond within the applicable 45-day time period, respectively, Contractor may notify City of the dispute in writing sent by registered or certified mail, return receipt requested and demand an informal conference to meet and confer for settlement of the issues in dispute. If Contractor fails to notify City in writing of the dispute, and demand an informal conference to meet and confer, within the specified time, Contractor’s Claim will be deemed waived.
(A) Schedule Meet and Confer. Upon receipt of the demand to meet and confer, City will schedule the meet and confer conference to be held within 30 days, or later if needed to ensure the mutual availability of each of the individuals that each party requires to represent its interests at the meet and confer conference.
(B) Location for Meet and Confer. The meet and confer conference will be scheduled at a location at or near City’s principal office. (C) Written Statement After Meet and Confer. Within ten working days after the meet and confer has concluded, City will issue a written statement identifying which portion(s) of the Claim remain in dispute, if any.
(D) Submission to Mediation. If the Claim or any portion remains in dispute following the meet and confer conference, within ten working days after the City issues the written statement identifying any portion(s) of the Claim remaining in dispute, the Contractor may identify in writing disputed portion(s) of the Claim, which will be submitted for mediation, as set forth below.

12.5 Mediation and Government Code Claims.

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(A) Mediation. Within ten working days after the City issues the written statement identifying any portion(s) of the Claim remaining in dispute, following the meet and confer, City and Contractor will mutually agree to a mediator, as provided under Public Contract Code Section 9204. Mediation will be scheduled to ensure the mutual availability of the selected mediator and all of the individuals that each party requires to represent its interests. If there are multiple Claims in dispute, the parties may agree to schedule the mediation to address all outstanding Claims at the same time. The parties will share the costs of the mediator and mediation fees equally, but each party is otherwise solely and separately responsible for its own costs to prepare for and participate in the mediation, including costs for its legal counsel or any other consultants. (B) Government Code Claims.
(1) Timely presentation of a Government Code Claim is a condition precedent to filing any legal action based on or arising from the Contract. Compliance with the Claim submission requirements in this Article 12 is a condition precedent to filing a Government Code Claim.
(2) The time for filing a Government Code Claim will be tolled from the time Contractor submits its written Claim pursuant to Section

12.2, above, until the time that Claim is denied in whole or in part at the conclusion of the meet and confer process, including any period of time used by the meet and confer process. However, if the Claim is submitted to mediation, the time for filing a Government Code Claim will be tolled until conclusion of the mediation, including any continuations, if the Claim is not fully resolved by mutual agreement of the parties during the mediation or any continuation of the mediation.

12.6 Tort Claims. This Article does not apply to tort claims and nothing in this Article is intended nor will be construed to change the time periods for filing tort-based Government Code Claims.

12.7 Arbitration. It is expressly agreed, under Code of Civil Procedure Section 1296, that in any arbitration to resolve a dispute relating to this Contract, the arbitrator’s award must be supported by law and substantial evidence.

12.8 Burden of Proof and Limitations. Contractor bears the burden of proving entitlement to and the amount of any claimed damages.

Contractor is not entitled to damages calculated on a total cost basis, but must prove actual damages. Contractor is not entitled to speculative, special, or consequential damages, including home office overhead or

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any form of overhead not directly incurred at the Project site or any other Worksite; lost profits; loss of productivity; lost opportunity to work on other projects; diminished bonding capacity; increased cost of financing for the Project; extended capital costs; non-availability of labor, material or equipment due to delays; or any other indirect loss arising from the Contract. The Eichleay Formula or similar formula will not be used for any recovery under the Contract. The City will not be directly liable to any Subcontractor or supplier.

12.9 Legal Proceedings. In any legal proceeding that involves enforcement of any requirements of the Contract Documents, the finder of fact will receive detailed instructions on the meaning and operation of the Contract Documents, including conditions, limitations of liability, remedies, claim procedures, and other provisions bearing on the defenses and theories of liability. Detailed findings of fact will be requested to verify enforcement of the Contract Documents. All of the City's remedies under the Contract Documents will be construed as cumulative, and not exclusive, and the City reserves all rights to all remedies available under law or equity as to any dispute arising from or relating to the Contract Documents or performance of the Work.

12.10 Other Disputes. The procedures in this Article 12 will apply to any and all disputes or legal actions, in addition to Claims, arising from or related to this Contract, including disputes regarding suspension or early termination of the Contract, unless and only to the extent that compliance with a procedural requirement is expressly and specifically waived by City.

Nothing in this Article is intended to delay suspension or termination under Article 13.

Article 13 - Suspension and Termination

13.1 Suspension for Cause. In addition to all other remedies available to City, if Contractor fails to perform or correct Work in accordance with the Contract Documents, including non-compliance with applicable environmental or health and safety Laws, City may immediately order the Work, or any portion of it, suspended until the circumstances giving rise to the suspension have been eliminated to City’s satisfaction. (A) Notice of Suspension. Upon receipt of City’s written notice to suspend the Work, in whole or in part, except as otherwise specified in the notice of suspension, Contractor and its Subcontractors must promptly stop Work as specified in the notice of suspension; comply with directions for cleaning and securing the Worksite; and protect the completed and inprogress Work and materials. Contractor is solely responsible for any

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damages or loss resulting from its failure to adequately secure and protect the Project.
(B) Resumption of Work. Upon receipt of the City’s written notice to resume the suspended Work, in whole or in part, except as otherwise specified in the notice to resume, Contractor and its Subcontractors must promptly re-mobilize and resume the Work as specified; and within ten days from the date of the notice to resume, Contractor must submit a recovery schedule, prepared in accordance with the Contract Documents, showing how Contractor will complete the Work within the Contract Time. (C) Failure to Comply. Contractor will not be entitled to an increase in Contract Time or Contract Price for a suspension occasioned by Contractor’s failure to comply with the Contract Documents. (D) No Duty to Suspend. City’s right to suspend the Work will not give rise to a duty to suspend the Work, and City’s failure to suspend the Work will not constitute a defense to Contractor’s failure to comply with the requirements of the Contract Documents.

13.2 Suspension for Convenience. City reserves the right to suspend, delay, or interrupt the performance of the Work in whole or in part, for a period of time determined to be appropriate for City’s convenience. Upon notice by City pursuant to this provision, Contractor must immediately suspend, delay, or interrupt the Work and secure the Project site as directed by City, except for taking measures to protect completed or in progress Work as directed in the suspension notice, and subject to the provisions of Section

13.1(A) and (B), above. If Contractor submits a timely request for a Change Order in compliance with Articles 5 and 6, the Contract Price and the Contract Time will be equitably adjusted by Change Order pursuant to Articles 5 and 6 to reflect the cost and delay impact occasioned by such suspension for convenience except to the extent that any such impacts were caused by Contractor’s failure to comply with the Contract Documents or the terms of the suspension notice or notice to resume.

However, Contract Time will only be extended if the suspension causes or will cause unavoidable delay in Final Completion. If Contractor disputes the terms of a Change Order issued for such equitable adjustment due to suspension for convenience, its sole recourse is to comply with the Claim procedures in Article 12.

13.3 Termination for Default. City may declare that Contractor is in default of the Contract for a material breach of or inability to fully, promptly, or satisfactorily perform its obligations under the Contract. (A) Default. Events giving rise to a declaration of default include Contractor’s refusal or failure to supply sufficient skilled workers, proper

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materials, or equipment to perform the Work within the Contract Time; Contractor’s refusal or failure to make prompt payment to its employees, Subcontractors, or suppliers or to correct defective Work or damage; Contractor’s failure to comply with the Laws, or orders of any public agency with jurisdiction over the Project; evidence of Contractor’s bankruptcy, insolvency, or lack of financial capacity to complete the Work as required within the Contract Time; suspension, revocation, or expiration and nonrenewal of Contractor’s license or DIR registration; dissolution, liquidation, reorganization, or other major change in Contractor’s organization, ownership, structure or existence as a business entity; unauthorized assignment of Contractor’s rights or duties under the Contract; or any material breach of the Contract requirements. (B) Notice of Default and Opportunity to Cure. Upon City’s declaration that Contractor is in default, due to a material breach of the Contract Documents, if City determines that the default is curable, City will afford Contractor the opportunity to cure the default within ten days of City’s notice of default, or within a period of time reasonably necessary for such cure, including a shorter period of time if applicable. (C) Termination. If Contractor fails to cure the default or fails to expediently take steps reasonably calculated to cure the default within the time period specified in the notice of default, City may issue written notice to Contractor and its performance bond surety of City’s termination of the Contract for default.
(D) Waiver. Time being of the essence in the performance of the Work, if Contractor’s surety fails to arrange for completion of the Work in accordance with the Performance Bond, within seven calendar days from the date of the notice of termination, pursuant to paragraph (C), City may immediately make arrangements for the completion of the Work through use of its own forces, by hiring a replacement contractor, or by any other means that City determines advisable under the circumstances.

Contractor and its surety will be jointly and severally liable for any additional cost incurred by City to complete the Work following termination, where “additional cost” means all cost in excess of the cost City would have incurred if Contactor had timely completed Work without the default and termination. In addition, City will have the right to immediate possession and use of any materials, supplies, and equipment procured for the Project and located at the Project site or any Worksite on City property for the purposes of completing the remaining Work. (E) Compensation. Within 30 days of receipt of updated as-builts, all warranties, manuals, instructions, or other required documents for Work installed to date, and delivery to City of all equipment and materials for the Project for which Contractor has already been compensated, Contractor

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will be compensated for the Work satisfactorily performed in compliance with the Contract Documents up to the effective date of the termination pursuant to the terms of Article 8, Payment, subject to City’s rights to withhold or deduct sums from payment otherwise due pursuant to Section

8.3, and excluding any costs Contractor incurs as a result of the termination, including any cancellation or restocking charges or fees due to third parties. If Contractor disputes the amount of compensation determined by City, its sole recourse is to comply with the Claim Procedures in Article 12, by submitting a Claim no later than 30 days following notice from City of the total compensation to be paid by City. (F) Wrongful Termination. If Contractor disputes the termination, its sole recourse is to comply with the Claim procedures in Article 12. If a court of competent jurisdiction or an arbitrator later determines that the termination for default was wrongful, the termination will be deemed to be a termination for convenience, and Contractor’s damages will be strictly limited to the compensation provided for termination for convenience, under Section 13.4, below. Contractor waives any claim for any other damages for wrongful termination including special or consequential damages, lost opportunity costs or lost profits, and any award of damages is subject to Section 12.8, Burden of Proof and Limitations.

13.4 Termination for Convenience. City reserves the right, acting in its sole discretion, to terminate all or part of the Contract for convenience upon written notice to Contractor.
(A) Compensation to Contractor. In the event of City’s termination for convenience, Contractor waives any claim for damages, including for loss of anticipated profits from the Project. The following will constitute full and fair compensation to Contractor, and Contractor will not be entitled to any additional claim or compensation.
(1) Completed Work. The value of its Work satisfactorily performed as of the date notice of termination is received, based on Contractor’s schedule of values and unpaid costs for items delivered to the Project site that were fabricated for incorporation in the Work;
(2) Demobilization. Demobilization costs specified in the schedule of values, or if demobilization costs were not provided in a schedule of values pursuant to Section 8.1, then based on actual, reasonable, and fully documented demobilization costs; and (3) Termination Markup. Five percent of the total value of the Work performed as of the date of notice of termination including reasonable, actual, and documented costs to comply with the

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direction in the notice of termination for convenience, and demobilization costs, which is deemed to cover all overhead and profit to date.
(B) Disputes. If Contractor disputes the amount of compensation determined by City pursuant to paragraph (A), above, its sole recourse is to comply with the Claim procedures in Article 12, by submitting a Claim no later than 30 days following notice from City of total compensation to be paid by City.

13.5 Actions Upon Termination for Default or Convenience. The following provisions apply to any termination under this Article, whether for default or convenience, and whether in whole or in part.
(A) General. Upon termination, City may immediately enter upon and take possession of the Project and the Work and all tools, equipment, appliances, materials, and supplies procured or fabricated for the Project.

Contractor will transfer title to and deliver all completed Work and all Work in progress to City.
(B) Submittals. Unless otherwise specified in the notice of termination, Contractor must immediately submit to City all designs, drawings, as-built drawings, Project records, contracts with vendors and Subcontractors, manufacturer warranties, manuals, and other such submittals or Work-related documents required under the terms of the Contract Documents, including incomplete documents or drafts. (C) Close Out Requirements. Except as otherwise specified in the notice of termination, Contractor must comply with all of the following:
(1) Immediately stop the Work, except for any Work that must be completed pursuant to the notice of termination and comply with City’s instructions for cessation of labor and securing the Project and any other Worksite(s).
(2) Comply with City’s instructions to protect the completed Work and materials, using best efforts to minimize further costs. (3) Contractor must not place further orders or enter into new subcontracts for materials, equipment, services or facilities, except as may be necessary to complete any portion of the Work that is not terminated.
(4) As directed in the notice, Contractor must assign to City or cancel existing subcontracts that relate to performance of the terminated Work, subject to any prior rights, if any, of the surety for

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Contractor’s performance bond, and settle all outstanding liabilities and claims, subject to City’s approval.
(5) As directed in the notice, Contractor must use its best efforts to sell any materials, supplies, or equipment intended solely for the terminated Work in a manner and at market rate prices acceptable to City.
(D) Payment Upon Termination. Upon completion of all termination obligations, as specified herein and in the notice of termination, Contractor will submit its request for Final Payment, including any amounts due following termination pursuant to this Article 13. Payment will be made in accordance with the provisions of Article 8, based on the portion of the Work satisfactorily completed, including the close out requirements, and consistent with the previously submitted schedule of values and unit pricing, including demobilization costs. Adjustments to Final Payment may include deductions for the cost of materials, supplies, or equipment retained by Contractor; payments received for sale of any such materials, supplies, or equipment, less re-stocking fees charged; and as otherwise specified in Section 8.3, Adjustment of Payment Application. (E) Continuing Obligations. Regardless of any Contract termination, Contractor’s obligations for portions of the Work already performed will continue and the provisions of the Contract Documents will remain in effect as to any claim, indemnity obligation, warranties, guarantees, submittals of as-built drawings, instructions, or manuals, record maintenance, or other such rights and obligations arising prior to the termination date.

Article 14 - Miscellaneous Provisions

14.1 Assignment of Unfair Business Practice Claims. Under Public Contract Code Section 7103.5, Contractor and its Subcontractors agree to assign to City all rights, title, and interest in and to all causes of action it may have under Section 4 of the Clayton Act (15 U.S.C. Section 15) or under the Cartwright Act (Chapter 2 (commencing with Section 16700) of Part 2 of Division 7 of the Business and Professions Code), arising from purchases of goods, services, or materials pursuant to the Contract or any subcontract. This assignment will be effective at the time City tenders Final Payment to Contractor, without further acknowledgement by the parties.

14.2 Provisions Deemed Inserted. Every provision of law required to be inserted in the Contract Documents is deemed to be inserted, and the Contract Documents will be construed and enforced as though such

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provision has been included. If it is discovered that through mistake or otherwise that any required provision was not inserted, or not correctly inserted, the Contract Documents will be deemed amended accordingly.

14.3 Waiver. City’s waiver of a breach, failure of any condition, or any right or remedy contained in or granted by the provisions of the Contract Documents will not be effective unless it is in writing and signed by City.

City’s waiver of any breach, failure, right, or remedy will not be deemed a waiver of any other breach, failure, right, or remedy, whether or not similar, nor will any waiver constitute a continuing waiver unless specified in writing by City.

14.4 Titles, Headings, and Groupings. The titles and headings used and the groupings of provisions in the Contract Documents are for convenience only and may not be used in the construction or interpretation of the Contract Documents or relied upon for any other purpose.

14.5 Statutory and Regulatory References. With respect to any amendments to any statutes or regulations referenced in these Contract Documents, the reference is deemed to be the version in effect on the date that bids were due.

14.6 Survival. The provisions that survive termination or expiration of this Contract include Contract Section 11, Notice, and subsections 12.1, 12.2,

12.3, 12.4, 12.5, and 12.6 of Section 12, General Provisions; and the following provisions in these General Conditions: Section 2.2(J), Contractor’s Records, Section 2.3(C), Termination, Section 3.7, Ownership, Section 4.2, Indemnity, Article 12, Dispute Resolution, and Section 11.2, Warranty.

END OF GENERAL CONDITIONS

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SPECIAL CONDITIONS

1. Emergency Contact. Prior to the commencement of Work on the Project, Contractor must provide contact information to the Engineer for the person designated by Contractor to respond to any emergency that arises on the Worksite during the course of the Project. That person will be responsible for responding to the Worksite within thirty (30) minutes following notification of an emergency by City’s Police or Fire Department, regardless of the time of day.

2. Authorized Work Days and Hours.
(A) Authorized Work Days. Except as expressly authorized in writing by City, Contractor is limited to performing Work on the Project on the following days of the week, excluding holidays observed by City:

Monday through Friday
(B) Authorized Work Hours. Except as expressly authorized in writing by City, Contractor is limited to performing Work on the Project during the following hours:
7:00 a.m. to 8:00 p.m.

3. Pre-Construction Conference. City will designate a date and time for a pre-construction conference with Contractor following Contract execution. Project administration procedures and coordination between City and Contractor will be discussed, and Contractor must present City with the following information or documents at the meeting for City’s review and acceptance before the Work commences:

1. Name, 24-hour contact information, and qualifications of the proposed on-site superintendent;

2. List of all key Project personnel and their complete contact information, including email addresses and telephone numbers during regular hours and after hours;

3. Staging plans that identify the sequence of the Work, including any phases and alternative sequences or phases, with the goal of minimizing the impacts on Aquatic Center customers and other operations in the Project vicinity;

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4. Draft baseline schedule for the Work as required under Section 5.2, to be finalized within ten days after City issues the Notice to Proceed;

5. Breakdown of lump sum bid items, to be used for determining the value of Work completed for future progress payments to Contractor;

6. Schedule with list of Project submittals that require City review, and list of the proposed material suppliers;

7. Any other documents specified in the Special Conditions or Notice of Award.

4. Weather Delay Days. This provision is intended to supplement the requirements of General Conditions Section 5.2 on Schedule Requirements and Section 5.3 on Delays and Extensions of Contract Time.
(A) Weather Delay Day. A Weather Delay Day is a Working Day during which Contractor and its forces, including Subcontractors, are unable to perform more than forty percent (40%) of the critical path Work scheduled for that day due to adverse weather conditions which impair the ability to safely or effectively perform the scheduled critical path Work that day. Adverse weather conditions may include rain, saturated soil, and Worksite clean-up required due to adverse weather.

Determination of what constitutes critical path Work scheduled for that day will be based on the most current, City-approved schedule. (B) Normal Weather Delay Days. Based on historic records for the Project location, Contractor’s schedule should assume the following number of normal Weather Delay Days for each month:

Month # Normal Weather
Delay Days
December 08
January 11
February 10
March 10
April 06
May 03
Weather Delay Days which do not occur during a given month based on the number of days allocated for that month (above) do not carry over to another month.

END OF SPECIAL CONDITIONS

AC Rec Pool Replastering Project Technical Specifications CSD2024-008 Page 1
Technical Specifications

1. OVERVIEW
Contractor to provide pool replaster services at the Morgan Hill Dennis Kennedy Aquatic Center (“Aquatic Center”), located at 16200 Condit Road, Morgan Hill, CA 95037.

The replaster services are for the existing Recreation Pool. The Recreation Pool is approximately 4,400 square feet in surface area, ranges from 0 feet to 3 feet 6 inches in depth, and holds approximately 55,000 gallons of water.

Detailed as-built plans were provided in Addendum #1.

The scope of services includes replastering the pool surface, removal and replacement of attached equipment and materials that include ladders, drain covers , and refilling the pool. Addendum #2 clarifies that the Contractor will remove and reinstall the current existing ladders and existing handrails. The drain covers will be replaced.

The Aquatic Center has two other pools, and multiple other facilities that will remain in use during construction. Contractor will need to schedule and plan replastering services to ensure continued accessibility to other facilities during construction at the Recreation Pool.

The required construction period is 30 working days and work shall be completed prior to April 1, 2024.

2. GENERAL REQUIREMENTS
Contractor shall:

Comply with all applicable federal, state, and local codes and ordinances.

Ensure all work is performed in a professional manner within the standards of the industry and original manufacturer of equipment, using proper equipment, methods, materials, and employees.

Ensure all Contractor’s employees are fully trained and qualified to perform the services specified in this Invitation to Bid.

Take necessary steps to protect the public and all property from damage during operations, and shall be responsible for any damage to the work or property caused by the Contractor's employees.

Repair or replace any property that is damaged directly or indirectly as a result of Contractor’s work. This includes privately owned, as well as City owned properties. This repair and/or replacement shall be done to the satisfaction of the City.

Ensure the worksite is left clean at the end of each work day, and at the conclusion of the project.

Supply their own fencing, locks and secure measures for the work site at the end of each work day by daisy-chaining to City’s lock. Security measures shall not interfere with use of other areas of the facility. The City shall not be responsible for any tools or equipment left onsite.

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Safely remove and dispose of all debris as-needed.

Obtain all necessary permits with the County of Santa Clara prior to the commencement of services, and finalize all permits with the County upon completion of services. There are no permits required by the City.

3. POOL REPLASTERING SERVICES
Contractor shall provide all labor, materials, tools, transportation, supervision, and equipment necessary to replaster the Recreation Pool at the Aquatic Center.

Contractor shall provide dust control measures during all work to reduce impacts to surrounding uses at the facility.

The City shall be responsible for draining the pool prior to the commencement of services, and will restart all pool circulation system components upon satisfactory completion of work.

3.3.1 If it is discovered that damages to the pool surface are required to be remedied prior to replastering, Contractor shall provide a written quote and change order request to the City to repair the damages, and commence only upon approval by City. Written quote shall include exact methods utilized for repair. The quote shall be based on documented time and material work, with material costs charged at contractor’s cost plus 15 percent. City shall issue a change order for approved work.

All materials furnished by Contractor, or used in the performance of services, shall be in new and unused condition.

Contractor shall:

3.5.1 Remove all old plaster from the water line tile, downward and apply new, white plaster using industry-standard methods and follow manufacturer instructions for preparation and installation of plaster.

3.5.2 Plaster shall be marble sand with Portland white cement or equivalent.

3.5.3 Remove all drains and handrails.

3.5.4 Remove and replace the four (4) Lawson Superflow 18x36 grates.

Grates should be 224 gpm each at time of install, WAV18xxx 828 gpm, currently rated 628 gpm.

3.5.5 Refill the pool once the plaster has been allowed to harden (cure), and in accordance with the manufacturer’s recommended timeline.

The pool shall be filled to capacity. Water connection shall be provided by the City.

3.5.6 Ensure bonding grid is created when reaffixing all metal objects including handrails, in accordance with industry standards.

4. SCHEDULE OF PERFORMANCE
Contractor shall perform all work during normal business hours, MondayFriday between the hours of 7:00 a.m. and 4:00 p.m. Pacific Time, except on

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City Holidays.

Should the weather or other conditions not be suitable for the performance of work, the City Project Manager (or designee) shall have the authority to suspend the work.

4.2.1 If the City Project Manager (or designee) orders a suspension of the work, due to unsuitable weather or to such other conditions as are considered unfavorable to the suitable execution of the work, the days on which the suspension is in effect shall not be considered working days.

5. INSPECTION
All work shall be subject to inspection by the City Project Manager (or designee) at any time during the Contractor’s performance of services.

When the contract work has been satisfactorily completed and the final clean upperformed, the City Project Manager (or designee) will make a final inspection.

6. WARRANTY
All work shall be guaranteed against defects in workmanship and materials for a period of no less than (3) year from acceptance by City. Typical wear, abuse,or neglect will be exempt.

The warranty period for Contractor provided materials shall be for a period of 5 years or within the manufacturers’ warranty, whichever is the later period.

The warranty period shall commence upon date of acceptance by the City.

Contractor shall provide the City’s authorized representative with all manufacturers’ warranty documents upon completion of service and prior to leaving the job site.

7. INVOICING REQUIREMENTS
Contractor shall invoice the City upon project completion. City shall pay Contractor within thirty (30) days of City’s receipt of an approved invoice.

Invoice shall include at a minimum the following:

7.2.1 Date of Service

7.2.2 Description of Services

7.2.3 Address of Serviced Location

7.2.4 Unit Price/Hourly Rate/Parts Markup %

7.2.5 Quantity/Number of Hours

7.2.6 Extended Price

9 CITY COUNCIL STAFF REPORT
MEETING DATE: January 17, 2024
PREPARED BY:

Cynthia Iwanaga, Management Analyst
APPROVED BY: City Manager

AWARD COMMUNITY PARK DG PATHWAYS PROJECT

RECOMMENDATION(S)

1. Award Decomposed Granite (DG) Pathways Project to Angkor Engineering, Inc. in the amount of $51,825 and contingency funds not to exceed $25,913; and

2. Authorize the City Manager to execute and administer that certain construction contract with Angkor Engineering, Inc.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety
Protecting the Environment and Preserving Open Space and Agricultural Land Maintaining and Enhancing Infrastructure
2023-2024 Strategic Priorities
Fiscal Sustainability
Guiding Documents
Bikeways, Trails, and Recreation Master Plan
REPORT NARRATIVE:

The purpose of this item is to provide the City Council with an opportunity to consider the award of a contract to Angkor Engineering, Inc. in the amount of $51,825 to complete the installation of two new Decomposed Granite (DG) pathways within Community Park. The scope of work for the Community Park DG Pathways Project includes all the labor and material necessary to install 4,146 new SF of DG pathways in Community Park. The first new DG pathway will be located along the eastern border of the baseball fields and the second new DG pathway will be located west of the tennis courts. The installation of these two new DG pathways will complete the circular DG pathway that currently exists on the interior borders of Community Park.

In soliciting bids for this contract, the City published a Notice Inviting Bids in the Morgan Hill Times on November 10, 2023. Staff also posted the bid documents on the City website, and the Public Purchase Online Service. The bid documents were also sent to

9 the Builders Exchange of Santa Clara County, San Francisco Builders Exchange, Construction BidBoard, and Dodge and Data Analytics. A bid solicitation was issued on November 14, 2023. A non-mandatory pre-bid job walk was held at Community Park on November 27, 2023, and seven (7) contractors attended. On January 2, 2024, ten bids were received ranging from $50,008 to $152,418. Please see attached bid log (Attachment 1).

NOECON, Inc., the apparent lowest bidder at $50,008 did not have the required current DIR contractor registration number, so staff is recommending awarding the project to Angkor Engineering, which was the next low bidder at $51,825. Angkor Engineering, Inc. has almost three years of experience in the installation of DG pathways including grading and site concrete including for both the Oak Grove School District in San Jose and the San Leandro Unified School District. Staff is recommending that the Council award the contract to Angkor Engineering, Inc. in the amount of $51,825, and authorize the City Manager to execute and administer the agreement (Attachment 2). In addition to authorizing the contract amount of $51,825, staff is also recommending a 50% contingency amount of $25,913, which is available for additional trail restoration due to a Per Capita Grant provided by the State of California Parks and Recreation Department. The total authorization with the contingency would be $77,738.

COMMUNITY ENGAGEMENT:

Inform
The DG Pathways project is scheduled for February to March 2024. Several weeks before the installation begins, information on the closure will be shared with community members via social media posts and email communications to residents.

ALTERNATIVE ACTIONS:

The City Council could decide not to approve this project, and direct staff to pursue an alternative approach to creating new pathways in Community Park. Postponing this work is not recommended as the new DG pathways will provide a safer path for residents to walk through and around Community Park.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

No applicable.

FISCAL AND RESOURCE IMPACT:

If approved, the total funding authorization for this contract will be $77,738, which includes the contract amount of $51,825 and a 50% contingency of $25,913. The large contingency will support completing additional portions of the Community Park DG trail as Per Capita Grant funds are available for the potential additional work. This entire project is eligible for State grant fund reimbursement.

CEQA (California Environmental Quality Act):

Categorical Exemption

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

REVISED BID OPENING LOG SHEET
Project: Community Park DG Pathways Project
Project Manager: Keri Russell
Date: Tuesday, January 2, 2024
Time: 11:30 a.m.

Bidder’s Name Bid Amount

1. Always Paving, Inc. $ 56,100.00

2. Angkor Engineering $ 51,825.00

3. Brannon Corporation $ 80,784.00

4. Gioletti Construction $ 79,934.00

5. Irish Excavation $ 80,605.02

6. iTech Solutions $152,418.00

7. NOECON, Inc. $ 50,007.54*

8. Silicon Valley Paving, Inc. $ 70,482.00

9. Tri Valley Excavating Co., Inc. $69,860.10

10.Veterans Construction & Design, Inc. $122,734.00
*NOECON’s DIR registration number is not current. Low bidder is Angkor Engineering.

Signed: Cynthia Iwanaga for Keri Russell

Community Park DG Pathways Project CONTRACT
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Version: July 2022

CONTRACT
This public works contract (“Contract”) is entered into by and between the City of Morgan Hill (“City”) and Angkor Engineering, Inc., a California Corporation (“Contractor”) for work on the Community Park DG Pathways Project (“Project”).

The parties agree as follows:

1. Award of Contract. In response to the Notice Inviting Informal Bids, Contractor has submitted a Bid Proposal to perform work on the Project, and on _____________________, 20___, (Contract Date) City authorized award of this Contract to Contractor for the amount of Contractor’s bid.

2. Contract Documents. The Contract Documents incorporated into this Contract include and are comprised of all of the following:

2.1 Notice Inviting Informal Bids;

2.2 Instructions to Bidders;

2.3 Addenda, if any;

2.4 Bid Proposal and attachments thereto;

2.5 Contract;

2.6 Payment and Performance Bonds;

2.7 General Conditions;

2.8 Special Conditions;

2.9 Project Drawings and Specifications;

2.10 Change Orders, if any;

2.11 Notice of Award;

2.12 Notice to Proceed;

2.13 And the following: No Additional Documents

3. Contractor’s Obligations. Contractor agrees to perform all of the Work required for the Project, as specified in the Contract Documents. Contractor must provide, furnish, and supply all things necessary and incidental for the timely performance and completion of the Work, including all necessary labor, materials, equipment, transportation, and utilities, unless otherwise specified in the Contract Documents. Contractor must use its best efforts to complete the Work in a professional and expeditious manner and to meet or exceed the performance standards required by the Contract Documents.

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4. Payment. As full and complete compensation for Contractor’s timely performance and completion of the Work in strict accordance with the terms and conditions of the Contract Documents, City will pay Contractor Fifty-One Thousand Eight Hundred and Twenty-Five Dollars ($51,825.00) (the “Contract Price”), in accordance with the payment provisions in the General Conditions. The Contract Price includes all applicable federal, state, and local taxes.

5. Time for Completion. Contractor will fully complete the Work for the Project within 60 calendar days from the commencement date given in the Notice to Proceed (“Contract Time”). By signing below, Contractor expressly waives any claim for delayed early completion.

6. Liquidated Damages. If Contractor fails to complete the Work within the Contract Time, City will assess liquidated damages in the amount of Five Hundred Dollars ($500.00) for each day of unexcused delay in completion, and the Contract Price will be reduced accordingly.

7. Labor Code Compliance.

7.1 General. This Contract is subject to all applicable requirements of Chapter 1 of Part 7 of Division 2 of the Labor Code, including requirements pertaining to wages, working hours and workers’ compensation insurance.

7.2 Prevailing Wages. This Project is subject to the prevailing wage requirements applicable to the locality in which the Work is to be performed for each craft, classification or type of worker needed to perform the Work, including employer payments for health and welfare, pension, vacation, apprenticeship and similar purposes.

Copies of these prevailing rates are available online at http://www.dir.ca.gov/DLSR.

7.3 DIR Registration. City will not accept a Bid Proposal from or enter into the Contract with a bidder, without proof that the bidder and its Subcontractors are registered with the California Department of Industrial Relations (“DIR”) to perform public work under Labor Code Section 1725.5, subject to limited legal exceptions.

8. Workers’ Compensation Certification. Under Labor Code Section 1861, by signing this Contract, Contractor certifies as follows: “I am aware of the provisions of Labor Code Section 3700 which require every employer to be insured against liability for workers’ compensation or to undertake selfinsurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the Work on this Contract.”

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9. Notice. Any notice required by the Contract Documents must be made in writing, and sent to the other party by personal delivery, U.S. Mail, a reliable overnight delivery service, facsimile, or by email as a PDF (or comparable) file. Notice is deemed effective upon delivery unless otherwise specified.

Notice for each party must be given as follows:

City:

City of Morgan Hill
17575 Peak Avenue
Morgan Hill, CA 95037
Phone: (409) 779-7259
Attn: City Clerk
Email: [email protected]
Copy to:[email protected]
Contractor:

Name: Angkor Engineering, Inc.

Address: 36 Quail Run Circle
City/State/Zip: Salinas, CA 93907
Phone: 408-316-6415
Attn: Aurelio Sanchez
Email: [email protected]
Copy to: [email protected]

10. General Provisions.

10.1 Assignment and Successors. Contractor may not assign its rights or obligations under this Contract, in part or in whole, without City’s written consent. This Contract is binding on Contractor’s successors and permitted assigns.

10.2 Third Party Beneficiaries. There are no intended third-party beneficiaries to this Contract except as expressly provided in the General Conditions or Special Conditions.

10.3 Governing Law and Venue. This Contract will be governed by California law and venue will be in the Superior Court of Santa Clara County, and no other place.

10.4 Amendment. No amendment or modification of this Contract will be binding unless it is in a writing duly authorized and signed by the parties to this Contract.

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10.5 Integration; Severability. This Contract and the Contract Documents incorporated herein, including authorized amendments or Change Orders thereto, constitute the final, complete, and exclusive terms of the agreement between City and Contractor. If any provision of the Contract Documents, or portion of a provision, is determined to be illegal, invalid, or unenforceable, the remaining provisions of the Contract Documents will remain in full force and effect.

10.6 Authorization. Each individual signing below warrants that he or she is authorized to do so by the party that he or she represents, and that this Contract is legally binding on that party. If Contractor is a corporation, signatures from two (2) officers of the corporation are required pursuant to California Corporation Code Section 313.

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

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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.

The parties agree to this Contract as witnessed by the signatures below:

CITY OF MORGAN HILL:
_______________________________
Christina J. Turner
City Manager
Date: _________________________
Attest:
______________________________
Michelle Bigelow
City Clerk
Date: _______________________
Approved as to Form:
________________________________
Donald A. Larkin
City Attorney
Date: _________________________
CONTRACTOR:

ANGKOR ENGINEERING, INC.
_________________________
Signature
__________________________
Name/Title [print]
Date: ____________________
Corporate entities must provide a
second signature:
_________________________
Signature
__________________________
Name/Title [print]
Date: ______________________
__1090730__________________
Contractor’s License Number(s)
___04/30/2024 ______________
Expiration Date(s)
Seal:
__1000911736_____________________
Contractor’s DIR Registration Number(s)
__06/30/2024 _______________
Expiration Date

END OF CONTRACT

Community Park DG Pathways Project PAYMENT BOND
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Version: December 2016

PAYMENT BOND
The City of Morgan Hill (“City”) and Angkor Engineering, Inc. (“Contractor”) have entered into a contract, dated _________________________, 20___ (“Contract”) for work on the Community Park DG Pathways Project (“Project”). The Contract is incorporated by reference into this Payment Bond (“Bond”).

1. General. Under this Bond, Contractor as principal and _______________ __________________________, its surety (“Surety”), are bound to City as obligee in an amount not less than _______________________________ Dollars ($_________________) (“Bond Sum”), under California Civil Code Sections 9550, et seq.

2. Surety’s Obligation. If Contractor or any of its Subcontractors fails to pay any of the persons named in California Civil Code Section 9100 amounts due under the Unemployment Insurance Code with respect to work or labor performed under the Contract, or for any amounts required to be deducted, withheld, and paid over to the Employment Development Department from the wages of employees of Contractor and its Subcontractors, under California Unemployment Insurance Code Section 13020, with respect to the work and labor, then Surety will pay for the same.

3. Beneficiaries. This Bond inures to the benefit of any of the persons named in California Civil Code Section 9100, so as to give a right of action to those persons or their assigns in any suit brought upon this Bond. Contractor must promptly provide a copy of this Bond upon request by any person with legal rights under this Bond.

4. Duration. If Contractor promptly makes payment of all sums for all labor, materials, and equipment furnished for use in the performance of the Work required by the Contract, in conformance with the time requirements set forth in the Contract and as required by California law, Surety’s obligations under this Bond will be null and void. Otherwise, Surety’s obligations will remain in full force and effect.

5. Waivers. Surety waives any requirement to be notified of alterations to the Contract or extensions of time for performance of the Work under the Contract. Surety waives the provisions of Civil Code Sections 2819 and 2845. City waives requirement of a new bond for any supplemental contract under Civil Code Section 9550. Any notice to Surety may be given in the manner specified in the Contract and delivered or transmitted to Surety as follows:

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Attn: _______________________________
Address: ____________________________
City/State/Zip: ________________________
Phone: _____________________________
Fax: _______________________________
Email: ______________________________

6. Law and Venue. This Bond will be governed by California law, and venue for any dispute pursuant to this Bond will be in the Superior Court of Santa Clara County, and no other place. Surety will be responsible for City’s attorneys’ fees and costs in any action to enforce the provisions of this Bond.

7. Effective Date; Execution. This Bond is entered into and is effective on _____________________________, 20___.

SURETY: CONTRACTOR:
s/ _________________________ s/ _________________________ Name: _____________________ Name: _____________________ Title: ______________________ Title: ______________________ (Attach Acknowledgment with Notary
Seal and Power of Attorney)
APPROVED AS TO FORM:

By:_____________________________
Donald A. Larkin, City Attorney
Date:__________________________

END OF PAYMENT BOND

Community Park DG Pathways Project PERFORMANCE BOND
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Version: August 2017

PERFORMANCE BOND
The City of Morgan Hill (“City”) and Angkor Engineering, Inc. (“Contractor”) have entered into a contract, dated _________________________, 20____ (“Contract”) for work on the Community Park DG Pathways Project (“Project”).

The Contract is incorporated by reference into this Performance Bond (“Bond”).

1. General. Under this Bond, Contractor as Principal and _______________ ________________________________________, its surety (“Surety”), are bound to City as obligee for an amount not less than
______________________________ Dollars ($__________________) (the “Bond Sum”). By executing this Bond, Contractor and Surety bind themselves and their respective heirs, executors, administrators, successors and assigns, jointly and severally, to the provisions of this Bond.

2. Surety’s Obligations; Waiver. If Contractor fully performs its obligations under the Contract, including its warranty obligations under the Contract, Surety’s obligations under this Bond will become null and void upon recordation of the notice of completion, provided Contractor has timely provided a warranty bond as required under the Contract. Otherwise, Surety’s obligations will remain in full force and effect until expiration of the one (1) year warranty period under the Contract. Surety waives any requirement to be notified of and further consents to any alterations to the Contract made under the applicable provisions of the Contract Documents, including changes to the scope of Work or extensions of time for performance of Work under the Contract. Surety waives the provisions of Civil Code Sections 2819 and 2845.

3. Application of Contract Balance. Upon making a demand on this Bond, City will make the Contract Balance available to Surety for completion of the Work under the Contract. For purposes of this provision, the Contract Balance is defined as the total amount payable by City to Contractor as the Contract Price minus amounts already paid to Contractor, and minus any liquidated damages, credits, or backcharges to which City is entitled under the terms of the Contract.

4. Contractor Default. Upon written notification from City that Contractor is in default under Article 13 of the Contract General Conditions, time being of the essence, Surety must act within the time specified in Article 13 to remedy the default through one of the following courses of action:

4.1 Arrange for completion of the Work under the Contract by Contractor, with City’s consent, but only if Contractor is in default solely due to its financial inability to complete the Work;

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4.2 Arrange for completion of the Work under the Contract by a qualified contractor acceptable to City, and secured by performance and payment bonds issued by an admitted surety as required by the Contract Documents, at Surety’s expense; or

4.3 Waive its right to complete the Work under the Contract and reimburse City the amount of City’s costs to have the remaining Work completed.

5. Surety Default. If Surety defaults on its obligations under the Bond, City will be entitled to recover all costs it incurs due to Surety’s default, including legal, design professional, or delay costs.

6. Notice. Any notice to Surety may be given in the manner specified in the Contract and delivered or transmitted to Surety as follows:

Attn: _______________________________
Address: ____________________________
City/State/Zip: ________________________
Phone: _____________________________
Fax: _______________________________
Email: ______________________________

7. Law and Venue. This Bond will be governed by California law, and venue for any dispute pursuant to this Bond will be in the Superior Court of Santa Clara County, and no other place. Surety will be responsible for City’s attorneys’ fees and costs in any action to enforce the provisions of this Bond.

8. Effective Date; Execution. This Bond is entered into and is effective on __________________________, 20___.
[Signatures are on the following page.]

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SURETY: CONTRACTOR:
s/ _________________________ s/ _________________________ Name: _____________________ Name: _____________________ Title: ______________________ Title: ______________________ (Attach Acknowledgment with Notary
Seal and Power of Attorney)
APPROVED AS TO FORM:

By:_____________________________
Donald A. Larkin, City Attorney
Date:__________________________

END OF PERFORMANCE BOND

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Version: August 2017

WARRANTY BOND
The City of Morgan Hill (“City”) and Angkor Engineering, Inc. (“Contractor”) have entered into a contract, dated _________________________, 20___ (“Contract”) for work on the Community Park DG Pathways Project (“Project”). The Contract is incorporated by reference into this Warranty Bond (“Bond”).

1. General. Under this Bond, Contractor as principal and _______________ ____________________________________________________________, its surety (“Surety”), are bound to City as obligee in the maximum amount of __________________________________ Dollars ($_________________) or 50% of the final Contract Price, whichever is greater (“Bond Sum”).

2. Warranty Period. The Contract requires Contractor to guarantee its work and that of its Subcontractors on the Project, against defects in materials or workmanship which are discovered during the one (1) year period commencing with recordation of the Notice of Completion (the “Warranty Period”).

3. Surety’s Obligations. If Contractor faithfully carries out and performs its guarantee under the Contract, and, on due notice from City, repairs and make good at its sole expense any and all defects in materials and workmanship in the Project which are discovered during the Warranty Period, or if Contractor promptly reimburses City for all loss and damage that City sustains because of Contractor’s failure to makes such repairs in accordance with the Contract requirements, then Surety’s obligations under this Bond will be null and void. Otherwise, Surety’s obligations will remain in full force and effect.

4. Waiver. Surety waives the provisions of Civil Code Sections 2819 and 2845.

5. Notice. Any notice to Surety may be given in the manner specified in the Contract and delivered or transmitted to Surety as follows:

Attn: _______________________________
Address: ____________________________
City/State/Zip: ________________________
Phone: _____________________________
Fax: _______________________________
Email: ______________________________

6. Law and Venue. This Bond will be governed by California law, and any dispute pursuant to this Bond will be in the Superior Court of Santa Clara County, and no other place. Surety will be responsible for City’s attorneys’ fees and costs in any action to enforce the provisions of this Bond.

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7. Effective Date; Execution. This Bond is entered into and is effective on _____________________________, 20_________.

SURETY: CONTRACTOR:
s/ _________________________ s/ _________________________ Name: _____________________ Name: _____________________ Title: ______________________ Title: ______________________ (Attach Acknowledgment with Notary
Seal and Power of Attorney)
APPROVED AS TO FORM:

By:_____________________________
Donald A. Larkin, City Attorney
Date:__________________________

END OF WARRANTY BOND

Community Park DG Pathways Project GENERAL CONDITIONS
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GENERAL CONDITIONS
Table of Contents:

Article 1 – Definitions ............................................................................................1 Article 2 – Roles and Responsibilities...................................................................5 Article 3 – Contract Documents ............................................................................9 Article 4 – Bonds, Indemnity and Insurance........................................................11 Article 5 – Contract Time ....................................................................................16 Article 6 – Contract Modification .........................................................................21 Article 7 – General Construction Provisions........................................................24 Article 8 – Payment.............................................................................................32 Article 9 – Labor Provisions ................................................................................37 Article 10 – Safety Provisions .............................................................................39 Article 11 – Completion and Warranty Provisions...............................................40 Article 12 – Dispute Resolution...........................................................................43 Article 13 – Suspension and Termination ...........................................................48 Article 14 – Miscellaneous Provisions.................................................................50 Article 1
Definitions

1.1 Definitions. The following definitions apply to all of the Contract Documents unless otherwise indicated. Defined terms and titles of documents are capitalized in the Contract Documents, with the exception of the words “day,” “furnish,” “including,” “install,” “work day” or “working day.” Allowance means an amount included in the Bid Proposal for Work that may or may not be included in the Project, depending on conditions that will not become known until after bids are opened. If the Contract Price includes an Allowance and the cost of performing the Work covered by that Allowance is greater or less than the Allowance, the Contract Price will be increased or decreased accordingly.

Article, as used in these General Conditions, means a numbered Article of the General Conditions, unless otherwise indicated by the context.

Change Order means a written document duly approved and executed by City, which changes the scope of Work, the Contract Price, or the Contract Time.

City means the City of Morgan Hill, acting through its City Council, officers, employees, and authorized representatives.

City Engineer means the City Engineer for the City and his or her authorized delegee(s) designated to oversee and manage the Project on City’s behalf.

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Claim means a separate demand by Contractor for change in the Contract Time or Contract Price, that has previously been submitted to City in accordance with the requirements of the Contract Documents, and which has been rejected by City, in whole or in part; or a written demand by Contractor objecting to the amount of Final Payment.

Contract means the signed agreement between City and Contractor.

Contract Documents means, collectively, all of the documents listed as such in Section 2 of the Contract, including the Notice Inviting Informal Bids; the Instructions to Bidders; addenda, if any; the Bid Proposal, and attachments thereto; the Contract; the notice of award and notice to proceed; the payment and performance bonds; the General Conditions; the Special Conditions; the Project Drawings and Specifications; any Change Orders; and any other documents expressly made part of the Contract Documents.

Contract Price means the total compensation to be paid to Contractor for performance of the Work, as set forth in the Contract and as amended by Change Order or adjusted for an Allowance. The Contract Price is not subject to adjustment due to inflation or due to the increased cost of labor, material, or equipment following submission of the Bid Proposal. The Contract Price is deemed to include all applicable federal, state, and local taxes.

Contract Time means the number of calendar days for performance of the Work, as set forth in the Contract and as amended by Change Order.

Contractor means the individual, partnership, corporation, or joint-venture who has signed the Contract with City to perform the Work.

Day means a calendar day unless otherwise specified.

Design Professional means the licensed individual(s) or firm(s) retained by City to provide architectural or engineering services for the Project. If no Design Professional has been retained for this Project, any reference to Design Professional is deemed to refer to the Engineer.

Drawings means City-provided plans and graphical depictions of the Project requirements, and does not include Shop Drawings.

Engineer means the City Engineer for the City of Morgan Hill and his or her authorized delegee(s).

Final Completion means Contractor has fully completed all of the Work required by the Contract Documents, including all punch list items, any required commissioning, and has provided all required submittals, including the warranty bond, instructions and manuals, and as-built drawings to City’s satisfaction.

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Final Payment means payment to Contractor of the unpaid Contract Price, including release of undisputed retention, less amounts withheld pursuant to the Contract Documents, including liquidated damages, up to one hundred twenty five percent (125%) of the amount of any unreleased stop notice, amounts subject to setoff, up to one hundred fifty percent (150%) of any unresolved thirdparty claim for which Contractor is required to indemnify City, and up to one hundred fifty percent (150%) of any amount in dispute as authorized by Public Contract Code Section 7107.

Furnish means to purchase and deliver to the Worksite designated for installation.

Hazardous Materials means any substance or material identified now or in the future as hazardous under any federal, state, or local law or regulation, or any other substance or material that may be considered hazardous or otherwise subject to statutory or regulatory requirements governing handling, disposal, or cleanup.

Including, whether or not capitalized, means “including, but not limited to,” unless the context requires otherwise.

Inspector means the individual(s) or firm(s) retained by City to inspect the workmanship, materials, and manner of construction of the Project and its components to ensure compliance with the Contract Documents and all applicable codes, regulations, and permits.

Install means to fix in place for materials, and to fix in place and connect for equipment.

Project means the public works project referenced in the Contract.

Project Manager means the individual designated by City to oversee and manage the Project on City’s behalf and may include his or her authorized delegee(s) when Project Manager is unavailable. If no Project Manager has been designated for this Project, any reference to Project Manager is deemed to refer to the Engineer.

RFI means a written request from Contractor for information from City or Design Professional.

Section as used in these General Conditions, means a numbered Section of the General Conditions, unless otherwise indicated by the context.

Shop Drawings means drawings, plan details or other graphical depictions prepared by or on behalf of Contractor, and subject to City approval, which are

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intended to provide details for fabrication, installation, and the like, of items required by or shown in the Drawings and Specifications.

Specifications means the technical, text specifications describing the Project requirements, which are prepared for and incorporated into this Project by or on behalf of City, and does not include the Contract, General Conditions or Special Conditions.

Subcontractor means an individual, partnership, corporation, or joint-venture retained by Contractor directly or indirectly through a subcontract to perform a specific portion of the Work. The term Subcontractor applies to subcontractors, suppliers, fabricators, and equipment lessors of all tiers, unless otherwise indicated by the context.

Technical Specifications means Specifications.

Work means all of the construction and services necessary or incidental to completing the Project in conformance with the requirements of the Contract Documents.

Work Day or Working Day, whether or not capitalized, means a weekday which is not a holiday observed by City.

Worksite means the place or places where the Work is performed.

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Article 2
Roles and Responsibilities

2.1 Design Professional.
(A) General. Design Professional, as City’s representative, is responsible for the overall design of the Project, and to the extent authorized by City, may act on City’s behalf to ensure performance of the Work in compliance with the Contract Documents.
(B) Interpretation. Design Professional will decide all questions pertaining to interpretation of the Drawings or Specifications. Design Professional’s decision regarding interpretation of the Drawings or Specifications is final and conclusive.

2.2 Contractor.
(A) General. Contractor must provide all labor, materials, equipment and services necessary to perform and timely complete the Work in strict accordance with the Contract Documents, and in an economic and efficient manner in the best interests of City.
(B) Responsibility for the Work. Contractor is responsible for supervising and directing all aspects of the Work to facilitate the efficient and timely completion of the Work. Contractor is solely responsible for, and required to exercise full control over, construction means, methods, techniques, sequences, procedures, and coordination of all portions of the Work with that of all other Contractors and Subcontractors, except to the extent that the Contract Documents provide other specific instructions. (C) Project Administration. Contractor must provide sufficient and competent administration, staff, and skilled workforce necessary to perform and timely complete the Work in accordance with the Contract Documents. Before starting the Work, Contractor must designate in writing and provide complete contact information, including phone numbers and email address, for the officer or employee in Contractor’s organization who is to serve as Contractor’s primary representative for the Project, and who has authority to act on Contractor’s behalf. A Subcontractor may not serve as Contractor’s primary representative. (D) On-Site Superintendent. Contractor must, at all times during performance of the Work, provide a qualified and competent full-time superintendent, acceptable to City, and assistants, as necessary, who must be physically present at the Project site while any aspect of the Work is being performed. Failure to comply may result in temporary suspension of the Work, at Contractor’s sole expense and with no extension of

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Contract Time, until the superintendent is physically present to supervise the Work. Contractor must provide written notice to City, as soon as practicable, before replacing the superintendent.
(E) Standards; Compliance. Contractor must, at all times, ensure that the Work is performed in a good workmanlike manner following best practices and in full compliance with the Contract Documents and all applicable laws, regulations, codes, standards, and permits. (F) Responsible Party. Contractor is solely responsible to City for the acts or omissions of any party or parties performing portions of the Work or providing equipment, materials or services for or on behalf of Contractor or its Subcontractors. If any person employed by Contractor fails or refuses to comply with the Engineer’s directions regarding the performance of the Work, or is determined by the Engineer to be incompetent to perform the Work, or acts in a disorderly or improper manner at the Worksite, that person may be permanently dismissed from the Project at the request of the Engineer.
(G) Correction of Defects. Contractor must promptly correct, at Contractor’s sole expense, any Work that is determined by City, Project Manager, or the Inspector to be deficient or defective in workmanship, materials, and equipment.
(H) Contractor’s Records. Contractor must maintain all of its records relating to the Project in any form, including paper documents, photos, videos and electronic records. Project records subject to this provision include, but are not limited to, Project cost records and records relating to preparation of Contractor’s bid.
(1) Contractor’s cost records must include all supporting documentation, including original receipts, invoices, and payroll records, evidencing its direct costs to perform the Work, including, but not limited to, costs for labor, materials and equipment. Each cost record should include, at a minimum, a description of the expenditure with references to the applicable requirements of the Contract Documents, the amount actually paid, the date of payment, and whether the expenditure is part of the original Contract Price, related to an executed Change Order, or otherwise categorized by Contractor as extra work.

Contractor’s failure to comply with this provision as to any claimed cost operates as a waiver of any rights to recover the claimed cost.
(2) Contractor must continue to maintain its Project records in an organized manner for a period of four (4) years after City’s

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acceptance of the Project or following termination, whichever occurs first. Subject to prior notice to Contractor, City is entitled to inspect or audit any of Contractor’s Project records relating to the Project or to investigate Contractor’s plant or equipment during Contractor’s normal business hours.

2.3 Subcontractors.
(A) General. All Work which is not performed by Contractor with its own forces must be performed by Subcontractors, subject to the limitation set forth in the Instructions to Bidders. City reserves the right to approve or reject any and all Subcontractors proposed to perform the Work. (B) Contractual Obligations. Contractor must require every Subcontractor to be bound to the provisions of the Contract Documents as they apply to the Subcontractor’s portion(s) of the Work, and to likewise bind their subcontractors or suppliers. Nothing in these Contract Documents creates a contractual relationship between a Subcontractor and City, but City is deemed to be a third-party beneficiary of the contract between Contractor and each Subcontractor.

Copies of subcontracts must be available to the Engineer upon request.

Before a Subcontractor commences Work on the Project, Contractor must provide the Engineer a written statement with the name of the Subcontractor, a description of each portion of the Work performed by the Subcontractor, and the percentage of the overall Work to be performed by the Subcontractor.
(C) Termination. If the Contract is terminated, each Subcontractor’s agreement must be assigned by Contractor to City, subject to the prior rights of any surety, provided that City accepts the assignment by written notification, and assumes all rights and obligations of Contractor pursuant to each such subcontract agreement.
(D) Substitution of Subcontractor. If Contractor requests substitution of a listed Subcontractor under Public Contract Code Section 4107, Contractor is solely responsible for all costs City incurs in responding to the request, including legal fees and costs to conduct a hearing.

2.4 Coordination of Work.
(A) Concurrent Work. City reserves the right to perform or to have performed other work on or adjacent to the Project site while the Work is being performed. Contractor is responsible for coordinating its Work with other work being performed on or adjacent to the Project site, and must avoid hindering, delaying, or interfering with the work of other contractors

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and subcontractors. To the full extent permitted by law, Contractor must hold harmless and indemnify City, Design Professional, and Project Manager against any and all claims arising from or related to Contractor’s avoidable, negligent, or willful hindrance of, delay to, or interference with the work of another contractor or subcontractor.
(B) Defects. Before proceeding with any portion of the Work affected by the construction or operations of others, Contractor must give Project Manager prompt written notification of any defects Contractor discovers which will prevent the proper execution of the Work. Failure to give notice of any such known defects will be deemed acknowledgement by Contractor that the work of others is not defective and will not prevent the proper execution of the Work.

2.5 Submittals. Unless otherwise specified, Contractor must submit to Project Manager for review and approval, all schedules, Shop Drawings, samples, product data and similar submittals required by the Contract Documents, or upon request by Project Manager. Unless otherwise specified, all submittals, including Requests for Information ("RFIs") are subject to the provisions of this Section.
(A) General. Contractor is responsible for ensuring that its submittals are accurate and conform to the Contract Documents.
(B) Time and Manner of Submission. Contractor must ensure that its submittals are prepared and delivered in a manner consistent with the current approved schedule for the Work and within the applicable time specified elsewhere in the Contract Documents, or if no time is specified, in such time and sequence so as not to delay the performance of the Work or completion of the Project.
(C) Required Contents. Each submittal must include the Project name, Contractor’s name and address, the name and address of any Subcontractor or supplier involved with the submittal, the date, and references to applicable Specification section(s) and/or drawing and detail number(s).
(D) Required Corrections. If corrections are required, Contractor must promptly make and submit any required corrections in full conformance with the requirements of this Section.
(E) Effect of Review and Approval. Review and approval of a submittal by City will not relieve Contractor from complying with the requirements of the Contract Documents. Contractor is responsible for any errors in any submittal, and review or approval of a submittal by City is not an assumption of risk or liability by City.

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(F) Enforcement. Any Work performed or material used without prior approval of a required submittal will be performed at Contractor’s risk, and Contractor may be required to bear the costs incident thereto, including the cost of removing and replacing such Work, repairs to other affected portions of the Work, and the cost of additional time or services required of the Design Professional, Project Manager, or Inspector. (G) Excessive RFIs. RFIs will be considered excessive or unnecessary if the Engineer determines that the explanation or response to the RFI is clearly and unambiguously discernable in the Contract Documents. City’s costs to review and respond to excessive or unnecessary RFIs may be deducted from payments otherwise due to Contractor.

Article 3
Contract Documents

3.1 Interpretation of Contract Documents.
(A) Drawings and Specifications. The Drawings and Specifications included in the Contract Documents are complementary. If Work is shown on one but not on the other, Contractor must perform the Work as though fully described on both, consistent with the Contract Documents and reasonably inferable from them as being necessary to produce the indicated results. The Drawings and Specifications are deemed to include and require everything necessary and reasonably incidental to completion of the Work, whether or not particularly mentioned or shown. Contractor must perform all work and services and supply all things reasonably related to and inferable from the Contract Documents. In the event of a conflict between the Drawings and Specifications, the Specifications will control.
(B) Duty to Notify. If Contractor becomes aware of any ambiguity, discrepancy, omission, or error in the Drawings or Specifications, Contractor must immediately notify the Design Professional and request clarification of such, by submitting a written request for information (RFI) in the manner specified by City. The Design Professional’s clarifications or interpretations will be final and binding.
(C) Figures and Dimensions. Figures control over scaled dimensions.
(D) Technical or Trade Terms. Any terms that have well-known technical or trade meanings will be interpreted in accordance with those meanings, unless otherwise specifically defined in the Contract Documents.

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(E) Measurements. Contractor must verify all relevant measurements at the Worksite before ordering any material or performing any Work, and will be responsible for the correctness of those measurements.

3.2 Order of Precedence. Information included in one Contract Document but not in another will not be considered a conflict or inconsistency.

Unless otherwise specified in the Special Conditions, in case of any conflict or inconsistency among the Contract Documents, the following order of precedence will apply, beginning from highest to lowest:
(A) Change Orders;
(B) Addenda;
(C) Contract;
(D) Notice to Proceed;
(E) Notice of Award;
(F) Special Conditions;
(G) General Conditions;
(H) Payment and Performance Bonds;
(I) Specifications;
(J) Drawings;
(K) Contractor’s Bid Proposal and attachments;
(L) Notice Inviting Informal Bids;
(M) Instructions to Bidders; and
(N) Any documents prepared by and on behalf of a third party, that were not prepared specifically for this Project, e.g., Caltrans Standard Specifications or Caltrans Special Provisions.

3.3 Caltrans Standard Specifications. Any reference to or incorporation of the Standard Specifications of the State of California, Department of Transportation (“Caltrans”), including “Standard Specifications,” “Caltrans Specifications,” “State Specifications,” or “CSS,” means the most current edition of Caltrans’ Standard Specifications, unless otherwise specified (“Standard Specifications”), including the most current amendments as of the date that Contractor’s bid was submitted for this Project. The following provisions apply to use of or reference to the Standard Specifications:
(A) Limitations. None of the “General Provisions” of the Standard Specifications, i.e., Sections 1 through 9, applies to these Contract Documents with the exception of any specific provisions, if any, which are expressly stated to apply to these Contract Documents.
(B) Conflicts or Inconsistencies. If there is a conflict or inconsistency between any provision in the Standard Specifications and a provision of these Contract Documents, as determined by City, the provision in the Contract Documents will govern.

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(C) Meanings. Terms used in the Standard Specifications are to be interpreted as follows:
(1) Any reference to the “Engineer” is deemed to mean the City Engineer.
(2) Any reference to the “Special Provisions” is deemed to mean the Special Conditions.
(3) Any reference to the “Department” or “State” is deemed to mean City.

3.4 For Reference Only. Contractor is responsible for the careful review of any document, study, or report appended to the Contract Documents solely for informational purposes and identified as “For Reference Only.” Nothing in any document, study, or report so appended and identified is intended to supplement, alter, or void any provision of the Contract Documents. However, Contractor is advised that City or its representatives may be guided by information or recommendations included in such reference documents, particularly when making determinations as to the acceptability of proposed materials, methods, or changes in the Work. Contractor must promptly notify City of any perceived or actual conflict between the Contract Documents and any document provided "For Reference Only."
Article 4
Bonds, Indemnity, and Insurance

4.1 Payment and Performance Bonds. Within ten (10) days following issuance of the notice of award, Contractor is required to provide a payment bond and a performance bond, each in the penal sum of not less than one hundred percent (100%) of the Contract Price, using the bond forms included with the Contract Documents. Each bond must be issued by a surety admitted in California. If an issuing surety cancels the bond or becomes insolvent, within seven (7) days following written notice from City, Contractor must substitute a surety acceptable to City. If Contractor fails to substitute an acceptable surety within the specified time, City may, at its sole discretion, withhold payment from Contractor until the surety is replaced to City’s satisfaction, or terminate the Contract for default.

4.2 Indemnity. To the fullest extent permitted by law, Contractor must indemnify, defend, and hold harmless City, its agents and consultants, and Design Professional (individually, an “Indemnitee,” and collectively the “Indemnitees”) from and against any and all liability, loss, damage, claims, expenses (including, without limitation, attorney fees, expert witness fees,

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paralegal fees, and fees and costs of litigation or arbitration) (collectively, “Liability”) of every nature arising out of or in connection with the acts or omissions of Contractor, its employees, Subcontractors, representatives, or agents, in bidding or performing the Work or its failure to comply with any of its obligations under the Contract, except such Liability caused by the active negligence, sole negligence, or willful misconduct of an Indemnitee. This indemnity requirement applies to any Liability arising from alleged defects in the content or manner of submission of Contractor’s bid for the Contract. Contractor’s failure or refusal to timely accept a tender of defense pursuant to this provision will be deemed a material breach of this Contract. City will timely notify Contractor upon receipt of any third-party claim relating to the Contract, as required by Public Contract Code Section 9201.

4.3 Insurance. No later than ten (10) days following issuance of the notice of award, Contractor is required to 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 Contractor and its Subcontractors relating to or arising from the performance of the Work, and must remain in full force and effect at all times during the period covered by the Contract until the date of recordation of the notice of completion. The coverages may be arranged under a single policy for the full limits required or by a combination of underlying policies with the balance provided by excess or “umbrella” policies, provided each such policy complies with the requirements set forth herein. If Contractor fails to provide any of the required coverage in full compliance with the requirements of the Contract Documents, City may, at its sole discretion, purchase such coverage at Contractor’s expense and deduct the cost from payments due to Contractor, or terminate the Contract for default. Contractor further understands that City reserves the right to modify the insurance requirements set forth herein, with thirty (30) days’ notice provided to Contractor, at any time as deemed necessary to protect the interests of City.
(A) Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared to and approved by City. If the City’s Risk Manager determines that the deductibles and/or self-insured retentions are unacceptably high, at City’s option, Contractor must either reduce or eliminate the deductibles and/or self-insured retentions as they apply to City and all required Additional Insured; or must provide a financial guarantee, to City’s satisfaction, guaranteeing payment of losses and related investigation, claim administration, and legal expenses.

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(B) Policies and Limits. The following insurance policies and limits are required for this Contract unless otherwise specified in the Special Conditions:
(1) Commercial General Liability Insurance (“CGL”).

Contractor shall maintain CGL and shall include coverage for liability arising from Contractor’s or its Subcontractor’s acts or omissions in the performance of the Work against claims and liabilities for personal injury, death, or property damage providing protection in the minimum amount of: (i) two million dollars ($2,000,000.00) combined single limit each occurrence and either a general aggregate limit of four million dollars ($4,000,000.00) or a general aggregate limit of two million dollars ($2,000,000.00) as applied on a “per project” or “per location” basis, or (ii) the maximum amount of such insurance available to Contractor under Contractor’s combined insurance policies (including any excess or “umbrella” policies), whichever is greater.
a. CGL policy may not exclude explosion, collapse,
underground excavation hazard, or removal of lateral
support.
b. CGL policy must include contractor’s protected coverage, blanket contractual, and completed operations.
(2) Builder’s Risk Insurance: The Builder’s Risk Insurance policy must be issued on occurrence basis, for all-risk coverage (including Flood and Earthquake) on a one hundred percent (100%) completed value basis on the insurable portion of the Project for the benefit of City.
(3) Workers’ Compensation Insurance and Employer’s
Liability: Contractor shall maintain Workers Compensation coverage, as required by law. The policy must comply with the requirements of the California Workers’ Compensation
Insurance and Safety Act and provide protection in the
minimum amount of: (i) One Million Dollars ($1,000,000.00) for any one accident or occurrence, or (ii) the maximum amount of such insurance available to Contractor under Contractor’s combined insurance policies (including any excess or “umbrella” policies), whichever is greater. If Contractor is self-insured, Contractor must provide its Certificate of Permission to SelfInsure, duly authorized by the Department of Industrial Relations.

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(4) Automobile Liability: Contractor shall maintain Automobile Liability covering all owned, non-owned and hired automobiles (if Contractor does not own automobiles, then Contractor shall maintain Hired/Non-owned Automobile Liability) against claims and liabilities for personal injury, death, or property damage providing protection in the minimum amount of: (i) One Million Dollars ($1,000,000.00) combined single limit, or (ii) the maximum amount of such insurance available to Contractor under Contractor’s combined insurance policies (including any excess or “umbrella” policies), whichever is greater.
(5) Pollution (Environmental) Liability: If the performance of Contractor’s work or service under this Contract involves hazardous materials, contaminated soil disposal, and/or a risk of accidental release of fuel oil, chemicals or other toxic gases or hazardous materials, Contractor shall procure and maintain Pollution Liability covering Contractor'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 Contractor under Contractor’s combined insurance policies (including any excess or “umbrella” policies), whichever is greater.
(6) Professional Liability:
a. If the performance of Contractor’s work or service under this Contract involves professional and/or technical services (examples include, but are not limited to, architects,
engineers, land surveyors, legal services, and appraisers), Contractor shall procure and maintain either a claims made or occurrence Errors and Omission liability insurance in the minimum amount of: (i) One Million Dollars ($1,000,000.00) each claim, or (ii) the maximum amount of such insurance available to Contractor under Contractor’s combined
insurance policies (including any excess or “umbrella”
policies), whichever is greater. Further, if Contractor maintains a claims-made policy, Contractor shall provide written evidence of such insurance to City for at least five (5) years after the completion of work performed under this Contract.

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b. If the performance of Contractor’s work or service under this Contract relates to Information Technology or related
services (examples include, but are not limited to computer programmers, hardware engineers, or other systems
consultants), Contractor 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 Contractor under Contractor’s combined insurance policies (including any excess or “umbrella” policies), whichever is greater. (C) Required Endorsements. Contractor must provide proof of the following endorsements, listed for each policy for which endorsements are required, as outlined below:
(1) For all Policies except Builder’s Risk and Professional Liability:
a. “Waiver of Subrogation” endorsements providing that the carrier agrees to waive any right of subrogation it may have against the City of Morgan Hill and City’s elected or
appointed officials, boards, agencies, officers, agents, employees, and volunteers.
(2) General Liability, Automobile, and Pollution Liability:
a. “Additionally Insured” - The City of Morgan Hill, its elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers are named as additional insureds on a form at least as broad as ISO Form CG 20 10 for ongoing operations and at least as broad as ISO Form CG 20 37 for completed operations.

b. “Primary and Non-Contributing” - Insurance shall be
endorsed to be primary and non-contributory and will not seek contribution from the City’s insurance or self-insurance and shall be at least as broad as ISO Form CG 20 01;
(3) General Liability:
a. “Separation of Insureds” endorsements stating that the inclusion of more than one insured will not operate to impair the rights of one insured against another, and the coverages afforded will apply as though separate policies have been issued to each insured.

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(D) Subcontractors. Contractor must ensure that each Subcontractor is required to maintain the same insurance coverage required under this Section 4.3, with respect to its performance of Work on the Project, including those requirements related to the additional insureds and waiver of subrogation.
(E) Qualification of Insurers. All insurance required pursuant to this Contract 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 “VIII” or better. (F) Certificates. Contractor must furnish City with copies of all certificates as outlined herein, whether new or modified, promptly upon receipt. In the event of a claim or legal action, Contractor shall promptly furnish City of Morgan Hill with copies of all policies outlined herein. No policy subject to Contractor’s Contract with City may be reduced, canceled, allowed to expire, or materially changed except after thirty (30) days' notice by the insurer to City, unless due to non-payment of premiums, in which case ten (10) days written notice must be made to City. Certificates, including renewal certificates, may be mailed electronically to [email protected] or delivered to the Certificate Holder address as follows:

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

4.4 Warranty Bond. As a condition precedent to Final Completion, Contractor must submit a warranty bond, using the form provided by City, to guarantee its Work as specified in Article 11, Completion and Warranty Procedures. The warranty bond must be issued by a surety admitted in California for fifty percent (50%) of the final Contract Price or as otherwise specified in the Contract Documents. If an issuing surety cancels the bond or becomes insolvent, within seven (7) days following written notice from City, Contractor must substitute a surety acceptable to City.

Article 5
Contract Time

5.1 Time is of the Essence. Time is of the essence in Contractor’s performance and completion of the Work, and Contractor must diligently prosecute the Work and complete it within the Contract Time.

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(A) General. Contractor must commence the Work on the date indicated in the notice to proceed, and must fully complete the Work, in strict compliance with all requirements of the Contract Documents, and within the Contract Time.
(B) Rate of Progress. Contractor and its Subcontractors must, at all times, provide workers, materials, and equipment sufficient to maintain the rate of progress necessary to ensure full completion of the Work within the Contract Time. If City determines that Contractor is failing to prosecute the Work at a sufficient rate of progress, City may, in its sole discretion, direct Contractor to provide additional workers, materials, or equipment, or to work additional hours or days without additional cost to City, in order to achieve a rate of progress satisfactory to City. If Contractor fails to comply with City’s directive in this regard, City may, at Contractor’s expense, separately contract for additional workers, materials, or equipment or use City’s own forces to achieve the necessary rate of progress. Alternatively, City may terminate the Contract based on Contractor’s default.

5.2 Schedule Requirements. All schedules must be prepared using standard scheduling software acceptable to City, and must provide schedules in electronic and paper form as requested.
(A) As-Planned (Baseline) Schedule. Within fifteen (15) calendar days following issuance of the notice of award (or as otherwise specified in the Special Conditions), Contractor must submit to City for review and approval an as-planned (baseline) schedule showing in detail how Contractor plans to perform and fully complete the Work within the Contract Time using critical path methodology. The as-planned schedule must include the work of all trades required for the Work, and must be sufficiently comprehensive and detailed to enable progress to be monitored on a day-by-day basis. For each activity, the as-planned schedule must be dated, provided in the format specified in the Contract Documents or as required by City, and must include, at a minimum, a description of the activity, the start and completion dates, and the duration. (B) Progress Schedules. Contractor must submit an updated progress schedule and three (3) week look-ahead schedule, in the format specified by City, for review and approval with each application for a progress payment. The progress schedule must show how the actual progress of the Work to date compared to the as-planned schedule, and must identify any actual or potential impacts to the critical path. (C) Recovery Schedule. If City determines that the Work is more than one (1) week behind schedule, within seven (7) days following written notice of such determination, Contractor must submit a recovery schedule,

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showing how Contractor intends to perform and complete the Work within the Contract Time, based on actual progress to date.
(D) Effect of Approval. Contractor and its Subcontractors must perform the Work in accordance with the most current approved schedule unless otherwise directed by City. City approval of a schedule does not operate to extend the time for completion of the Work or any component of the Work, and will not affect City’s right to assess liquidated damages for Contractor’s unexcused delay in completing the Work within the Contract Time.
(E) Posting. Contractor must at all times maintain a copy of the most current approved progress or recovery schedule posted prominently in its on-site office.
(F) Reservation of Rights. City reserves the right to direct the sequence in which the Work must be performed or to make changes in the sequence of the Work in order to facilitate the performance of work by City or others, or to facilitate City’s use of its property. The Contract Time or Contract Price may be adjusted to the extent such changes in sequence actually increase or decrease Contractor’s time or cost to perform the Work.
(G) Authorized Working Days and Times. Contractor is limited to working Monday through Friday, excluding City of Morgan Hill-observed holidays, during City’s normal business hours, except as expressly provided in the Special Conditions, or as authorized in writing by City. City reserves the right to charge Contractor for additional costs incurred by City due to Work performed on days or during hours not expressly authorized in these Contract Documents, including reimbursement of costs incurred for inspection, testing, and construction management services.

5.3 Delay and Extensions of Contract Time.
(A) Excusable Delay. The Contract Time may be extended if Contractor encounters an unavoidable delay in completing the Work within the Contract Time due to causes completely beyond Contractor’s control, and which Contractor could not have avoided or mitigated through planning, foresight, and diligence (“Excusable Delay”). Grounds for Excusable Delay may include fire, earthquake, acts of terror or vandalism, epidemic, unforeseeable adverse government actions, unforeseeable actions of third parties, encountering unforeseeable hazardous materials, unforeseeable site conditions, suspension for convenience under Article 13, or unusually severe weather.

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(B) Non-Excusable Delay. Excusable Delay does not include delay that is concurrent with non-Excusable Delay, and does not include delay caused by:
(1) weather conditions which are normal for the location of the Project, as determined by reliable records, including monthly rainfall averages, for the preceding ten (10) years;
(2) Contractor’s failure to order equipment and materials sufficiently in advance of the time needed for timely completion of the Work;
(3) Contractor’s failure to provide adequate notification to utility companies for connections or services necessary for the timely performance and completion of the Work;
(4) foreseeable conditions Contractor could have ascertained from reasonably diligent inspection of the Worksite or review of the Contract Documents; or
(5) Contractor’s financial inability to perform the Work, including insufficient funds to pay its Subcontractors or suppliers. (C) Request for Extension of Contract Time. A request for an extension of time and associated delay costs must be submitted in writing to City within ten (10) calendar days of the date the delay is first encountered, even if the duration of the delay is not yet known at that time, or will be deemed waived. In addition to complying with the requirements of this Article 5, the request must be submitted in compliance with the Change Order request procedures in Article 6, below.

Strict compliance with these requirements is necessary to ensure that any delay or delay costs may be mitigated as soon as possible, and to facilitate cost-efficient administration of the Project and timely performance of the Work. Any request for an extension of time or delay costs that does not strictly comply with the requirements of Article 5 and Article 6 will be deemed waived.
(1) Required Contents. The request must include a detailed description of the cause(s) of the delay, and must also describe the measures that Contractor has taken to mitigate the delay and/or its effects, including efforts to mitigate the cost impact of the delay, e.g., by workforce management, change in sequencing, etc. If the delay is still ongoing at the time the request is submitted, the request should also include Contractor’s plan for continued mitigation of the delay or its effects.

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(2) Delay Days and Costs. The request must specify the number of days of Excusable Delay claimed, or provide a realistic estimate if the duration of the delay is not yet known. The request must specify the amount of any delay-related costs that are claimed, or provide a realistic estimate if the amount is not yet known. Any estimate of delay duration or cost must be updated in writing and submitted with all required supporting documentation as soon as the actual time and cost is known.
(3) Supporting Documentation. The request must also include any and all supporting documentation necessary to evidence the delay and its actual impacts, including schedule and cost impacts, including a time impact analysis using critical path methodology, and demonstrating unavoidable delay to Final Completion. The time impact analysis must be submitted in a form or format acceptable to City.
(4) Burden of Proof. Contractor has the burden of proving 1) that the delay was an Excusable Delay, as defined above, 2) that Contractor has made reasonable efforts to mitigate the delay and its schedule and cost impacts, 3) that the delay will unavoidably result in delaying Final Completion, and 4) that any delay costs claimed by Contractor were actually incurred and were reasonable under the circumstances.
(5) Recoverable Costs. If Contractor is granted an extension of time for Excusable Delay, recompense for delay costs will be limited to actual, direct, reasonable, and substantiated costs, and will not include home office overhead, or markup for overhead and profit.
(6) Legal Compliance. Nothing in this provision is intended to require the waiver, alteration, or limitation of the applicability of Public Contract Code Section 7102.
(7) No Waiver. Any grant of an extension of time or delay costs due to an Excusable Delay will not operate as a waiver of City’s right to assess liquidated damages for unexcused delay. (8) Dispute Resolution. In the event of a dispute over entitlement to an extension of time or delay costs, Contractor may not stop working pending resolution of the dispute, but must continue to comply with its duty to diligently prosecute the performance and timely completion of the Work. Contractor’s sole recourse for an unresolved dispute based on City’s rejection of a Change Order

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request for an extension of time or delay costs is to comply with the Dispute Resolution provisions set forth in Article 12, below.

5.4 Liquidated Damages. It is expressly understood that if Final Completion is not achieved within the Contract Time, City will suffer damages which are difficult to determine and accurately specify. Pursuant to Public Contract Code section 7203, if Contractor fails to achieve Final Completion within the Contract Time, City may charge Contractor in the amount specified in the Contract for each calendar day that Final Completion is delayed beyond the Contract Time, as liquidated damages and not as a penalty.
(A) Liquidated Damages. Liquidated damages will not be assessed for any Excusable Delay, as set forth above.
(B) Milestones. Liquidated damages will also be separately assessed for failure to meet milestones specified elsewhere in the Contract Documents.
(C) Setoff. City is entitled to set off the amount of liquidated damages assessed against any payments otherwise due to Contractor, including setoff against release of retention. If there are insufficient Contract funds remaining to cover the full amount of liquidated damages assessed, City is entitled to recover the balance from Contractor or its performance bond surety.
(D) Occupancy or Use. Occupancy or use of the Project in whole or in part prior to Final Completion does not constitute City’s acceptance of the Project and will not operate as a waiver of City’s right to assess liquidated damages for Contractor’s unexcused delay in achieving Final Completion.

Article 6
Contract Modification

6.1 Changes in Work. City reserves the right to make changes in the Work without invalidating the Contract. City may direct or Contractor may request changes in the Work, and any such changes will be formalized in a Change Order, which may include commensurate changes in the Contract Price or Contract Time as applicable. Contractor must promptly comply with City-directed changes in the Work in accordance with the intent of the original Contract Documents, even if Contractor and City have not yet reached agreement as to adjustments to the Contract Price or Contract Time.

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(A) City-Directed Change. In the event of a dispute over entitlement to or the amount of a change in Contract Time or a change in Contract Price related to a City-directed change, Contractor must perform the Work as directed and may not delay its work or cease work pending resolution of the dispute, but must continue to comply with its duty to diligently prosecute the performance and timely completion of the Work, including the Work in dispute.
(B) Contractor’s Obligations. In the event that City and Contractor dispute whether a portion or portions of the Work are already required by the Contract Documents as opposed to changed or extra Work, Contractor must perform the Work as directed and may not delay its Work or cease Work pending resolution of the dispute, but must continue to comply with its duty to diligently prosecute the performance and timely completion of the Work, including the Work in dispute.
(C) Remedy for Non-Compliance. Contractor’s failure to promptly comply with an City-directed change is deemed a material breach of the Contract, and in addition to all other remedies available to it, City may, at its sole discretion, hire another contractor or use its own forces to complete the disputed Work at Contractor’s sole expense, and may deduct the cost from the Contract Price.
(D) Dispute Resolution. Contractor’s sole recourse for an unresolved dispute related to changes in the Work is to comply with the dispute resolution provisions set forth in Article 12, below.

6.2 Contractor Change Order Requests. Contractor must submit a request or proposal for a change in the Work or a change in the Contract Price or Contract Time as a written Change Order request or proposal. (A) Time for Submission. Any request for a change in the Contract Price must be submitted in writing to Project Manager within ten (10) calendar days of the date that Contractor first encounters the circumstances, information or conditions giving rise to the Change Order request, even if the total amount of the requested change in the Contract Price or impact on the Contract Time is not yet known at that time. (B) Required Contents. Any Change Order request or proposal submitted by Contractor must include a complete breakdown of actual or estimated costs and credits, and must itemize labor, materials, equipment, taxes, insurance, and subcontract amounts. Any estimated cost must be updated in writing as soon as the actual amount is known. (C) Required Documentation. All claimed costs must be fully documented, and any related request for an extension of time or delayPage 280 of 370 Community Park DG Pathways Project GENERAL CONDITIONS
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related costs must be included at that time and in compliance with the requirements of Article 5 of the General Conditions.
(D) Required Form. Contractor must use City’s form(s) for submitting all Change Order requests or proposals, unless otherwise specified by City.
(E) Certification. All Change Order requests must be signed by Contractor and must include the following certification:
“The undersigned Contractor certifies under penalty of perjury that its statements and representations in this Change Order request are true and correct. Contractor warrants that this Change Order request is comprehensive and complete, and agrees that any costs, expenses, or time extension request not included herein is deemed waived. Contractor understands that submission of claims which have no basis in fact or which Contractor knows to be false may violate the False Claims Act, as set forth in Government Code Sections 12650 et seq.”

6.3 Adjustments to Contract Price. The amount of any increase or decrease to the Contract Price will be determined based on one (1) of the following methods in the order provided:
(A) Unit Pricing. Amounts previously provided by Contractor in the form of unit prices, either in a bid schedule or schedule of values, will apply if unit pricing has previously been provided in Contractor’s accepted bid schedule or schedule of values for the affected Work; (B) Lump Sum. A mutually agreed upon lump sum;
(C) Time and Materials. On a time and materials basis, which may include a not-to-exceed limit, calculated as the total of the following sums:
(1) All direct labor costs plus fifteen percent (15%) for overhead and profit;
(2) All direct material costs, including sales tax, plus fifteen percent (15%) for overhead and profit;
(3) All direct plant and equipment rental costs, plus fifteen percent (15%) for overhead and profit;
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(5) Increased bond or insurance premium costs computed at one- and one-half percent (1½%) of total of the previous four (4) sums.

6.4 Unilateral Change Order. If City disagrees with the amount of compensation or extension of time that Contractor has requested, City may elect to issue a unilateral Change Order, directing performance of the Work, and authorizing a change in the Contract Price or Contract Time in the amount City believes is merited. Contractor’s sole recourse to dispute the terms of a unilateral Change Order is to submit a timely Claim pursuant to Article 12, below.

6.5 Non-Compliance Deemed Waiver. Contractor waives its entitlement to any increase in the Contract Price or Contract Time if Contractor fails to full comply with the provisions of this Article. Contractor will not be paid for unauthorized extra work.

Article 7
General Construction Provisions

7.1 Permits and Taxes.
(A) General. Contractor must obtain and pay for any and all permits, fees, or licenses required to perform the Work, unless otherwise indicated in the Contract Documents. Contractor must cooperate with and provide notifications to government agencies with jurisdiction over the Project, as may be required. Contractor must provide City with copies of all notices, permits, licenses, and renewals required for the Work.
(B) Federal Excise Tax. Contractor must pay for all taxes on labor, material and equipment, except Federal Excise Tax to the extent that City is exempt from Federal Excise Tax.

7.2 Temporary Facilities. Contractor must provide, at Contractor’s sole expense, any and all temporary facilities, including onsite office, sanitary facilities, storage, scaffolds, barricades, walkways, and any other temporary structure required to safely perform the Work along with any utility services incidental thereto.
(A) Standards. Such structures must be safe and adequate for the intended use, and installed and maintained in accordance with all applicable federal, state, and local laws, codes, and regulations. (B) Removal and Repair. Contractor must promptly remove all such temporary facilities when they are no longer needed or upon completion of the Work, whichever comes first. Contractor must promptly repair any damage to City’s property caused by the installation, use, or removal of

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the temporary facilities, and must promptly restore the property to its original or intended condition.
(C) Additional Requirements. Additional provisions pertaining to temporary facilities may be included in the Specifications or Special Conditions.

7.3 Signs. No signs may be displayed on or about City’s property, except signage which is required by law or by the Contract Documents, without City’s prior written approval as to content, size, design, and location.

7.4 Protection of Work and Property.
(A) General. Contractor is responsible at all times for protecting the Work and materials and equipment to be incorporated into the Work from damage until the Notice of Completion has been recorded. Except as specifically authorized by City, Contractor must confine its operations to the area of the Project site indicated in the Drawings. Contractor is liable for any damage caused to City’s real or personal property, the real or personal property of adjacent property owners, or the work or personal property of other contractors working for City.
(B) Unforeseen Conditions. If Contractor encounters facilities, utilities, or other unknown conditions not shown on or reasonably inferable from the Drawings or apparent from inspection of the Project site, Contractor must promptly notify Project Manager, and must avoid taking any action which could cause damage to the facilities or utilities pending further direction from Project Manager. If Project Manager’s subsequent direction to Contractor affects Contractor’s cost or time to perform the Work, Contractor may submit a Change Order request as set forth in Article 6, above.
(C) Support; Adjacent Properties. Contractor must provide, install, and maintain all shoring, bracing, underpinning, etc., necessary to provide support to City’s property and adjacent properties and improvements thereon. Contractor must provide notifications to adjacent property owners as may be required by law.

7.5 Noninterference. Contractor must take reasonable measures to avoid interfering with City’s use of its property at or adjacent to the Project site, including use of roadways, entrances, parking areas, walkways, and structures.

7.6 Materials and Equipment.

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(A) General. Unless otherwise specified, all materials and equipment required for the Work must be new and of the best grade for the intended purpose, and furnished in sufficient quantities to ensure the proper and expeditious performance of the Work. Unless otherwise specified, all materials and equipment required for the Work are deemed to include all components required for complete installation and intended operation, and must be installed in accordance with the manufacturer’s recommendation.

Contractor is responsible for all shipping, handling, and storage costs associated with the materials and equipment required for the Work, and is responsible for protecting the Work and all of the required materials, supplies, tools and equipment at Contractor’s sole cost until City accepts the Project.
(B) City-Provided. If the Work includes installation of materials or equipment to be provided by City, Contractor is solely responsible for the proper examination, handling, storage, and installation of such items in accordance with the Contract Documents. Contractor must promptly notify City of any defects discovered in City-provided materials or equipment. Contractor is solely responsible for any loss of or damage to such items which occurs while the items are in Contractor’s custody and control, the cost of which may be offset from the Contract Price and deducted from any payment(s) due to Contractor.
(C) Intellectual Property Rights. Contractor must, at its sole expense, obtain any authorization required for use of patented or copyright protected materials, equipment, devices or processes that are incorporated into the Work. Contractor’s indemnity obligation in Article 4, applies to any claimed violation of intellectual property rights in violation of this provision.

7.7 Substitutions.
(A) “Or Equal.” Any specification designating a material, product, thing, or service by specific brand or trade name, followed by the words “or equal,” is intended only to indicate quality and type of item or service desired, and Contractor may request use of any equal material, product, thing, or service.
(B) Request for Substitution. A request for substitution must be submitted to Project Manager for approval within the applicable time period provided in the Contract Documents. If no time period is specified, the substitution request may be submitted any time within thirty-five (35) days after the date of award of the Contract, or sufficiently in advance of the time needed to avoid delay of the Work, whichever is earlier.

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(C) Substantiation. All data substantiating the proposed substitute as an “equal” item or service must be submitted with the written request for substitution. Contractor’s failure to timely provide necessary substantiation is ground for rejection of the proposed substitution, without further review. (D) Burden of Proving Equality. Contractor has the burden of proving the equality of the proposed substitution. City has sole discretion to determine whether a proposed substitution is “equal,” and City’s determination is final.

(E) Approval or Rejection. If the proposed substitution is approved, Contractor is solely responsible for any additional costs associated with the substituted item(s). If the proposed substitution is rejected, Contractor must, without delay, install the item specified.
(F) Contractor’s Obligations. City’s review of a proposed substitution will not relieve Contractor from any of its obligations under the Contract Documents. In the event Contractor makes an unauthorized substitution, Contractor will be solely responsible for all resulting cost impacts, including the cost of removal and replacement and the impact to other design elements.

7.8 Testing and Inspection.
(A) General. All materials, equipment, and workmanship used in the Work are subject to inspection by Inspector at all times and locations during construction and/or fabrication. All manufacturers’ application or installation instructions must be provided to the Inspector at least ten (10) days prior to the first such application or installation. Contractor must, at all times, make the Work available for inspection.
(B) Scheduling and Notification. Contractor must schedule all tests required by the Contract Documents in time to avoid any delay to the progress of the Work. Contractor must provide timely notice to all necessary parties as specified in the Contract Documents. (C) Responsibility for Costs. City will bear the initial cost of testing to be performed by independent testing consultants retained by City, subject to the following exceptions:
(1) Contractor will be responsible for the costs of any subsequent tests which are required to substantiate compliance with the Contract Documents, and any associated remediation costs.

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(2) Contractor will be responsible for inspection costs, at City’s established rates, for inspection time lost because the Work is not ready or Contractor fails to appear for a scheduled inspection. (3) In addition, if any portion of the Work which is subject to testing is covered or concealed by Contractor prior to testing, Contractor will bear the cost of making that portion of the Work available for the testing required by the Contract Documents, and any associated repair or remediation costs.
(D) Contractor’s Obligations. Any Work that fails to comply with the requirements of the Contract Documents must be promptly repaired, replaced, or corrected by Contractor, at Contractor’s sole expense, even if that Work was previously inspected or included in a progress payment.

Contractor is solely responsible for any delay occasioned by remediation of noncompliant Work. Inspection of the Work does not in any way relieve Contractor of its obligations to perform the Work as specified. (E) Distant Locations. If required off-site testing or inspection must be conducted at a location more than 100 miles from the Project site, Contractor is solely responsible for the additional travel costs required for testing and/or inspection at such locations.
(F) Final Inspection. The provisions of this Section 7.8 apply to final inspection under Article 11, Completion and Warranty Provisions.

7.9 Clean up. Contractor must regularly remove debris and waste materials and maintain the Worksite in clean and neat condition.
(A) General. Prior to discontinuing work in an area, Contractor must clean the area and remove all rubbish along with its construction equipment, tools, machinery, waste and surplus materials. Contractor must, at all times, minimize and confine dust and debris resulting from construction activities.
(B) Completion. At the completion of the Work, Contractor must remove from the Worksite all of its equipment, tools, surplus materials, waste materials and debris. Before demobilizing from the Worksite, Contractor must ensure that all surfaces are cleaned, sealed, waxed, or finished as applicable, and that all marks, stains, paint splatters, and the like have been properly removed from the completed Work and the surrounding areas.
(C) Non-Compliance. If Contractor fails to commence compliance with its cleanup obligations within two (2) business days following written notification from City or its representative, City may undertake appropriate

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cleanup measures without further notice and the cost will be deducted from any amounts due or to become due Contractor.

7.10 Instructions and Manuals. Contractor must provide three (3) copies each of all instructions and manuals required by the Contract Documents, unless otherwise specified. These must be complete as to drawings, details, parts lists, performance data, and other information that may be required for City to easily maintain and service the materials and equipment installed for this Project.
(A) Submittal Requirements. All manufacturers’ application or installation instructions must be provided to the Inspector at least ten (10) days prior to the first such application. The instructions and manuals, along with any required guarantees, must be delivered to City for review. (B) Instruction of Personnel. Contractor or its Subcontractors must instruct City’s personnel in the operation and maintenance of any complex equipment as a condition precedent to Final Completion, if required in the Contract Documents.

7.11 As-built Drawings. Contractor and its Subcontractors must maintain on the Worksite a separate complete set of the Drawings which will be used solely for the purpose of recording changes made in any portion of the Work in order to create accurate record drawings at the end of the Project. (A) Duty to Update. The as-built drawings must be updated as changes occur, on a daily basis if necessary. Progress payments may be delayed, in whole or in part, until the as-built drawings are brought up to date to the satisfaction of City. Actual locations to scale must be identified on the as-built drawings for all runs of mechanical and electrical work, including all site utilities, etc., installed underground, in walls, floors, or otherwise concealed. Deviations from the original Drawings must be shown in detail. The location of all main runs, whether piping, conduit, ductwork, drain lines, etc., must be shown by dimension and elevation. (B) Final Completion. Contractor must verify that all changes in the Work are depicted in the as-built drawings and must deliver the complete set of as-built drawings to City for review and approval as a condition precedent to Final Completion.

7.12 Existing Utilities. As required by Government Code Section 4215, if, during the performance of the Work, Contractor discovers utility facilities not identified by City in the Contract Documents, Contractor must immediately provide written notice to City and the utility. City assumes responsibility for the timely removal, relocation, or protection of existing main or trunkline utility facilities located on the Project site, if those utilities

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are not identified in the Contract Documents. Contractor will be compensated in accordance with the provisions of the Contract Documents for the costs of locating, repairing damage not due to Contractor’s failure to exercise reasonable care, and removing or relocating such utility facilities not indicated in the Drawings or Specifications with reasonable accuracy, and for equipment on the Project necessarily idled during such work. Contractor will not be assessed liquidated damages for delay in completion of the Work, to the extent such delay was caused by City’s failure to provide for removal or relocation of the utility facilities.

7.13 Notice of Excavation. Government Code Section 4216.2, requires that except in an emergency, Contractor must contact the appropriate regional notification center, or Underground Services Alert at 800-642-2444 (for Northern California), at least two (2) working days, but not more than fourteen (14) calendar days before starting any excavation if the excavation will be conducted in an area that is known, or reasonably should be known, to contain subsurface installations, and if practical, Contractor must delineate with white paint or other suitable markings the area to be excavated.

7.14 Trenching and Excavations.
(A) Duty to Notify. Contractor must promptly, and before the following conditions are disturbed, provide written notice to City if Contractor finds any of the following conditions:
(1) Material that Contractor believes may be a hazardous waste, as defined in Section 25117 of the Health and Safety Code, that is required to be removed to a Class I, Class II, or Class III disposal site in accordance with the provisions of existing law; (2) Subsurface or latent physical conditions at the Worksite differing from those indicated by information about the Worksite made available to bidders prior to the deadline for submitting bids; or
(3) Unknown physical conditions at the Worksite of any unusual nature, materially different from those ordinarily encountered and generally recognized as inherent in work of the character required by the Contract Documents.
(B) City Investigation. City will promptly investigate the conditions and if City finds that the conditions do materially differ or do involve hazardous waste, and cause a decrease or increase in Contractor’s cost

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of, or the time required for, performance of any part of the Work, City will issue a Change Order.
(C) Disputes. In the event that a dispute arises between City and Contractor regarding any of the conditions specified in subsection (A) above, Contractor will not be excused from any scheduled completion date provided for in the Contract Documents, but must proceed with all Work to be performed under the Contract. Contractor will retain any and all rights provided either by the Contract or by law which pertain to the resolution of disputes between Contractor and City.

7.15 Trenching of Five Feet or More. As required by Labor Code Section 6705, if the Contract Price exceeds Twenty Five Thousand Dollars ($25,000.00) and the Work includes the excavation of any trench or trenches of five (5) feet or more in depth, a detailed plan must be submitted to City or its civil or structural engineer, for acceptance in advance of the excavation. The detailed plan must show the design of shoring, bracing, sloping, or other provisions to be made for worker protection from the hazard of caving ground during the excavation. If the plan varies from the shoring system standards, it must be prepared by a registered civil or structural engineer. Use of a shoring, sloping, or protective system less effective than that required by the Construction Safety Orders is prohibited.

7.16 New Utility Connections. City will pay connection charges and meter costs for new permanent utilities required by the Contract Documents, if any. Contractor must notify City sufficiently in advance of the time needed to request service from each utility provider so that connections and services are initiated in accordance with the Project schedule.

7.17 Lines and Grades. Contractor is required to use any benchmark provided by the Engineer. Unless otherwise specified in the Contract Documents, Contractor must provide all lines and grades required to execute the Work.

7.18 Historic or Archeological Items.
(A) Contractor’s Obligations. Contractor must ensure that all persons performing Work at the Project site are required to immediately notify Project Manager, upon discovery of any potential historic or archeological items, including historic or prehistoric ruins, burial grounds, archaeological or vertebrate paleontological site, including fossilized footprints or other archeological, paleontological or historical feature on the Project site (collectively, “Historic or Archeological Items”).

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(B) Discovery; Cessation of Work. Upon discovery of any potential Historic or Archeological Items, Work must be stopped within an eightyfive (85) foot radius of the find and may not resume until authorized in writing by City. If required by City, Contractor must assist in protecting or recovering the Historic or Archeological Items, any such assistance to be compensated as extra work on a time and materials basis under Article 6, Contract Modification. Any suspension of Work required due to discovery of Historic or Archeological Items will be treated as a suspension for convenience under Article 13.

7.19 Environmental Control. Contractor must not pollute any drainage course or its tributary inlets with fuels, oils, bitumens, acids, insecticides, herbicides or other harmful materials. Contractor and its Subcontractors must at all times in the performance of the Work comply with all applicable federal, state, and local laws and regulations concerning pollution of waterways. (A) Stormwater Permit. Contractor must comply with all applicable conditions of the State Water Resources Control Board National Pollutant Discharge Elimination System General Permit for Waste Discharge Requirements for Discharges of Stormwater Runoff Associated with Construction Activity (“Stormwater Permit”).
(B) Contractor’s Obligations. If required for the Work, a copy of the Stormwater Permit is on file in City’s principal administrative offices, and Contractor must comply with the same without adjustment of the Contract Price or the Contract Time. Contractor must timely and completely submit required reports and monitoring information required by the conditions of the Stormwater Permit, Contractor must comply with all other applicable state, municipal or regional laws, ordinances, rules or regulations governing discharge of stormwater, including applicable municipal stormwater management programs.

Article 8
Payment

8.1 Schedule of Values. Prior to submitting its first application for payment, Contractor must prepare and submit to Project Manager a schedule of values apportioned to the various divisions and phases of the Work. Each line item contained in the schedule of values must be assigned a value such that the total of all items equals the Contract Price. The items must be sufficiently detailed to enable accurate evaluation of the percentage of completion claimed in each application for payment, and the assigned value consistent with any itemized or unit pricing submitted with Contractor’s bid.

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8.2 Progress Payments. Following the last day of each month, or as otherwise required by the Special Conditions or Specifications, Contractor will submit to Project Manager a monthly application for payment for Work performed during the preceding month based on the estimated value of the Work performed during that preceding month.
(A) Application for Payment. Each application for payment must be itemized to include labor, materials, and equipment incorporated into the Work, and materials and equipment delivered to the Worksite, as well as authorized and approved Change Orders. Each pay application must be supported by Contractor’s schedule of values and any other substantiating data required by the Contract Documents.

Each application for payment shall be accompanied by completed “Contract Balance Form,” a copy of which is provided at the end of Article 8.
(B) Payment of Undisputed Amounts. City will pay the undisputed amount due, as certified by the Design Professional, within thirty (30) days after Contractor has submitted a complete and accurate payment application, subject to Public Contract Code Section 20104.50. City will deduct a percentage from each progress payment as retention, as set forth in Section 8.5, below, and may deduct additional amounts as set forth in Section 8.3, below.

8.3 Adjustment of Payment Application. City may adjust or reject a payment application, including application for Final Payment, in whole or in part, based upon any of the circumstances listed below. Contractor will be notified in writing of the basis for the adjustment, and will be promptly paid once the basis for that adjustment has been remedied and no longer exists.
(A) Contractor’s unexcused failure to perform the Work as required by the Contract Documents, including correction or completion of punch list items;
(B) Loss or damage caused by Contractor or its Subcontractor(s) arising out of or relating to performance of the Work;
(C) Contractor’s failure to pay its Subcontractors and suppliers when payment is due;
(D) Failure to timely correct rejected, nonconforming, or defective Work;
(E) Unexcused delay in performance of the Work;

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(F) Any unreleased stop notice, retained as one hundred twenty five percent (125%) of the amount claimed;
(G) Failure to submit any required schedule or schedule update in the manner and within the time specified in the Contract Documents:
(H) Failure to maintain or submit as-built documents in the manner and within the time specified in the Contract Documents;
(I) Work performed without approved Shop Drawings, when approved Shop Drawings are required before proceeding with the Work; (J) Contractor’s payroll records are delinquent or inadequate; and (K) Any other costs or charges that may be offset against payments due, as provided in the Contract Documents, including liquidated damages.

8.4 Acceptance of Work. Neither City’s payment of progress payments nor its partial or full use or occupancy of the Project constitutes acceptance of any part of the Work.

8.5 Retention. City will retain five percent (5%) of the amount due on each progress payment, or the percentage stated in the Notice Inviting Informal Bids, whichever is greater, as retention to ensure full and satisfactory performance of the Work.
(A) Substitution of Securities. As provided by Public Contract Code Section 22300, Contractor may request in writing that it be allowed, at its sole expense, to substitute securities for the retention withheld by City.

Any escrow agreement entered into pursuant to this provision must fully comply with Public Contract Code Section 22300, and will be subject to approval as to form by City’s legal counsel.
(B) Release of Undisputed Retention. All undisputed retention, less any amounts that may be assessed as liquidated damages, retained for stop notices, or otherwise withheld under Section 8.3 or 8.6 will be released as Final Payment to Contractor no sooner than thirty five (35) days following recordation of the notice of completion, and no later than sixty (60) days following acceptance of the Project by City’s governing body or authorized designee, or, if the Project has not been accepted, no later than sixty (60) days after the Project is otherwise considered complete under Public Contract Code Section 7107(c).

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8.6 Setoff. City is entitled to set off any amounts due from Contractor against any payments due to Contractor. City’s entitlement to setoff includes progress payments as well as Final Payment and release of retention.

8.7 Payment to Subcontractors and Suppliers. Each month, Contractor must promptly pay each Subcontractor and supplier the value of the portion of labor, materials, and equipment incorporated into the Work or delivered to the Worksite by the Subcontractor or supplier during the preceding month. Such payments must be made in accordance with the requirements of the law, and those of the Contract Documents and applicable subcontract or supplier contract.
(A) Withholding for Stop Notice. City will withhold one hundred twenty five percent (125%) of the amount claimed by an unreleased stop notice, a portion of which may be retained by City for the costs incurred in handling the stop notice claim, including attorneys’ fees and costs, as authorized by law.
(B) Joint Checks. City reserves the right to issue joint checks made payable to Contractor and its Subcontractors or suppliers. As a condition to release of payment by a joint check, the joint check payees may be required to execute a joint check agreement in a form provided or approved by City. The joint check payees will be jointly and severally responsible for the allocation and disbursement of funds paid by joint check. Payment by joint check will not be construed to create a contractual relationship between City and a Subcontractor or supplier of any tier beyond the scope of the joint check agreement.

8.8 Final Payment. Final Completion, acceptance of the Work by City, and recordation of the Notice of Completion, and any release required by the Contract Documents are conditions precedent to Final Payment and release of undisputed retention, as set forth above. Contractor’s application for Final Payment must comply with the requirements for submitting an application for a progress payment as stated in Section 8.2, above. Corrections to previous progress payments, including adjustments to estimated quantities for unit priced items, may be included in the Final Payment. The date of Final Payment is deemed to be effective on the date that City acts to release retention as final payment to Contractor, or otherwise provides written notice to Contractor of Final Payment. If the amount due from Contractor to City exceeds the amount of Final Payment, City retains the right to recover the balance from Contractor or its sureties.

8.9 Release of Claims. City may, at any time, require that payment of the undisputed portion of any progress payment or Final Payment be contingent upon Contractor furnishing City with a written release of all claims against City arising from or related to the portion of Work covered

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by those undisputed amounts. Any disputed amounts may be specifically excluded from the release.

8.10 Warranty of Title. Contractor warrants that title to all work, materials, or equipment incorporated into the Work and included in a request for payment will pass over to City free of any claims, liens, or encumbrances upon payment to Contractor.

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CONTRACT BALANCE FORM
Project Name: _____________________________________
Note: A detailed invoice MUST be attached to this Contract Balance Form.

CONTRACTOR NAME: ____________________________ DATE: ______________________________ MAILING ADDRESS: ______________________________ TELEPHONE NO.: ____________________ ______________________________ FAX NO.: ___________________________ ______________________________ PROJECT NO.: ______________________ INVOICE NO.: _______________________

1. ORIGINAL CONTRACT AMOUNT: $________

2. APPROVED CHANGE ORDERS TOTAL: $________

3. REVISED CONTRACT AMOUNT: (1+2) $________

4. PREVIOUS BALANCE PAID: $________

5. REMAINING BALANCE: (3-4) $________

6. CURRENT PROGRESS PAYMENT DUE: $________
(before retention)

7. 5% RETENTION FROM WORK DONE: (-)$________

8. CURRENT BALANCE DUE: (6-7) $________

9. REMAINING BALANCE OF REVISED
CONTRACT AMOUNT: (5-8) $________
(including retention)

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Article 9
Labor Provisions

9.1 Discrimination Prohibited. Discrimination against any prospective or present employee engaged in the Work on grounds of race, color, ancestry, national origin, ethnicity, religion, sex, sexual orientation, age, disability, or marital status is strictly prohibited. Contractor and its Subcontractors are required to comply with all applicable Federal and California laws including the California Fair Employment and Housing Act (Government Code Sections 12900 et seq.), Government Code Section 11135, and Labor Code Sections 1735, 1777.5, 1777.6, and 3077.5.

9.2 Labor Code Requirements.
(A) Eight Hour Day. Under Labor Code Section 1810, eight (8) hours of labor constitute a legal day’s work under this Contract. (B) Penalty. Under Labor Code Section 1813, Contractor will forfeit to City as a penalty, the sum of Twenty Five Dollars ($25.00) for each day during which a worker employed by Contractor or any Subcontractor is required or permitted to work more than eight (8) hours in any one (1) calendar day or more than forty (40) hours per calendar week, except if such workers are paid overtime under Labor Code Section 1815. (C) Apprentices. Contractor is responsible for compliance with the requirements governing employment and payment of apprentices, as set forth in Labor Code Section 1777.5, which is fully incorporated by reference.
(D) Notices. Under Labor Code Section 1771.4, Contractor is required to post all job site notices prescribed by law or regulation.

9.3 Prevailing Wages. Each worker performing Work under this Contract that is covered under Labor Code Section 1720, including cleanup at the Project site, must be paid at a rate not less than the prevailing wage as defined in Sections 1720.3, 1771, and 1774 of the Labor Code. The prevailing wage rates are available online at http://www.dir.ca.gov/dlsr.

Contractor must post a copy of the applicable prevailing rates at the Worksite.
(A) Penalties. Under Labor Code Section 1775, Contractor and any Subcontractor will forfeit to City as a penalty up to Two Hundred Dollars ($200.00) for each calendar day, or portion a day, for each worker paid less than the applicable prevailing wage rate. Contractor must also pay each worker the difference between the applicable prevailing wage rate and the amount actually paid to that worker.

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(B) Federal Requirements. If this Project is subject to Federal prevailing wage requirements in addition to California prevailing wage requirements, Contractor and its Subcontractors are required to pay the higher of the current applicable prevailing wage rates under federal law, available online at http://www.access.gpo.gov/davisbacon/ca.html.

9.4 Payroll Records. Contractor must comply with the provisions of Labor Code Sections 1771.4, 1776, and 1812 and all implementing regulations, which are fully incorporated by this reference, including requirements for electronic submission of payroll records.
(A) Contractor and Subcontractor Obligations. Contractor and each Subcontractor must keep accurate payroll records, showing the name, address, social security number, work classification, straight time and overtime hours worked each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker, or other employee employed in connection with the Work. Each payroll record must contain or be verified by a written declaration that it is made under penalty of perjury, stating both of the following:
(1) The information contained in the payroll record is true and correct.
(2) Contractor or Subcontractor has complied with the
requirements of Labor Code Sections 1771, 1811, and 1815 for any Work performed by its employees on the Project.
(B) Certified Record. A certified copy of an employee’s payroll record must be made available for inspection or furnished to the employee or his or her authorized representative on request, to City, or to the Division of Labor Standards Enforcement, and the Division of Apprenticeship Standards of the Department of Industrial Relations, and as further provided by the Labor Code.
(C) Enforcement. Upon notice of noncompliance with Labor Code Section 1776, Contractor or Subcontractor has ten (10) days in which to comply with requirements of this section. If Contractor or Subcontractor fails to do so within the ten (10) day period, Contractor or Subcontractor will forfeit a penalty of One Hundred Dollars ($100.00) per day, or portion a day, for each worker for whom compliance is required, until strict compliance is achieved. Upon request by the Division of Apprenticeship Standards, or the Division of Labor Standards Enforcement, these penalties will be withheld from progress payments then due.

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9.5 Labor Compliance. Under Labor Code section 1771.4, the Contract for this Project is subject to compliance monitoring and enforcement by the California Department of Industrial Relations.

9.6 Wage Theft Prevention. Compliance with Wage and Hour Laws:

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

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

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

THIS AGREEMENT, CONTRACTOR 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 CONTRACTOR

OR ITS SUBCONTRACTOR(S) HAS VIOLATED ANY APPLICABLE WAGE AND HOUR LAWS. CONTRACTOR 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 Contractor or an subcontractor it employs to perform work under this Agreement has violated any applicable wage and hour law, or Contractor learns of such a judgment, decision, or order that was not previously disclosed, Contractor shall inform the City Attorney, no more than fifteen (15) days after the judgment, decision or order becomes final or of learning of the final judgment, decision or order. Contractor 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 Contractor 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 Contractor or any subcontractor it employs to perform work under this Agreement has been found in violation of any

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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 Contractor until such judgment, decision or order has been satisfied in full.

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

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

Article 10
Safety Provisions

10.1 Safety Precautions and Programs. Contractor and its Subcontractors are fully responsible for safety precautions and programs, and for the safety of persons and property in the performance of the Work.

Contractor and its Subcontractors must comply with all applicable safety laws, rules and regulations and seek to avoid injury, loss, or damage to persons or property by taking reasonable steps to protect its employees and other persons at the Worksite, materials and equipment stored on or off site, and property at or adjacent to the Worksite.
(A) Reporting Requirements. Contractor must immediately provide a written report to City of all recordable accidents and injuries occurring at the Worksite. If Contractor is required to file an accident report with a government agency, Contractor will provide a copy of the report to City. (B) Legal Compliance. Contractor’s safety program must comply with the applicable legal and regulatory requirements. Contractor must provide City with copies of all notices required by law or regulation. (C) Contractor’s Obligations. Any damage or loss caused by Contractor arising from the Work which is not insured under property insurance must be promptly remedied by Contractor.
(D) Remedies. If City determines, in its sole discretion, that any part of the Work or Worksite is unsafe, City may, without assuming responsibility for Contractor’s safety program, require Contractor or its Subcontractor to cease performance of the Work or to take corrective measures to City’s satisfaction. If Contractor fails to promptly take the required corrective

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measures, City may perform them and deduct the cost from the Contract Price. Contractor agrees it is not entitled to submit a Claim for damages, for an increase in Contract Price, or for a change in Contract Time based on Contractor’s compliance with City’s request for corrective measures pursuant to this provision.

10.2 Hazardous Materials. Unless otherwise specified, this Contract does not include the removal, handling, or disturbance of any asbestos or other Hazardous Materials. If Contractor encounters materials on the Worksite that Contractor reasonably believes to be asbestos or other Hazardous Materials, and the asbestos or other Hazardous Materials have not been rendered harmless, Contractor may continue Work in unaffected areas reasonably believed to be safe, but must immediately cease work on the area affected and report the condition to City. No asbestos, asbestoscontaining products or other Hazardous Materials may be used in performance of the Work.

10.3 Material Safety. Contractor must maintain Material Safety Data Sheets (“MSDS”) at the Worksite, as required by law, for materials or substances used or consumed in the performance of the Work. The MSDS will be accessible and available to Contractor’s employees, Subcontractors, and City.
(A) Contractor Obligations. Contractor is solely responsible for the proper delivery, handling, use, storage, removal, and disposal of all materials brought to the Worksite and/or used in the performance of the Work.
(B) Labeling. Contractor must ensure proper labeling on any material brought onto the Worksite so that any persons working with or in the vicinity of the material may be informed as to the identity of the material, any potential hazards, and requirements for proper handling, protections, and disposal.

Article 11
Completion and Warranty Provisions

11.1 Final Completion.
(A) Final Inspection. When the Work required by this Contract is fully performed, Contractor must provide written notification to Project Manager requesting final inspection. Based on this inspection, the Design Professional will prepare a punch list of items that are incomplete, incorrectly installed, or not operating as required by the Contract Documents. The omission of any such item from this punch list will not

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relieve Contractor from fulfilling all requirements of the Contract Documents.
(B) Punch List. City will promptly deliver the punch list to Contractor and will specify the time by which all of the punch list items must be completed or corrected. The punch list may include City’s estimated cost to complete each punch list item if Contractor fails to do so within the specified time.
(C) Requirements for Final Completion. Final Completion will be achieved upon completion or correction of all punch list items, as verified by inspection, and upon satisfaction of all other Contract requirements, including any commissioning required under the Contract Documents, and submission of all final submittals, including a warranty bond as required under Section 4.4, instructions and manuals as required under Section

7.10, and as-built drawings as required under Section 7.11, all to City’s satisfaction. Once Final Completion is achieved, and the Project has been formally accepted by City, City will file a notice of completion with the County Recorder.
(D) Final Payment. Final Payment and release of retention, less any sums withheld pursuant to the provisions of the Contract Documents, will not be made sooner than thirty-five (35) days after recordation of the notice of completion. If Contractor fails to complete all of the punch list items within the specified time, City may elect to accept the Project and record the notice of completion, and withhold up to one hundred fifty percent (150%) of City’s estimated cost to complete the remaining items from Final Payment.

11.2 Warranty.
(A) General. Contractor warrants that all materials and equipment will be new unless otherwise specified, of good quality, in conformance with the Contract Documents, and free from defective workmanship and materials. Contractor further warrants that the Work will be free from material defects not intrinsic in the design or materials required in the Contract Documents. At City’s request, Contractor must furnish satisfactory evidence of the quality and type of materials and equipment furnished. Contractor’s warranty does not extend to damage caused by normal wear and tear, or improper use or maintenance.
(B) Warranty Period. Contractor’s warranty must guarantee its Work for a period of one (1) year from the date of recordation of the notice of completion (the “Warranty Period”), except when a longer guarantee is provided by a supplier or manufacturer or is required by the Specifications or Special Conditions. Contractor must obtain from its Subcontractors,

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suppliers and manufacturers any special or extended warranties required by the Contract Documents.
(C) Warranty Documents. As a condition precedent to acceptance, Contractor must supply City with all warranty and guarantee documents relevant to equipment and materials incorporated into the Work and guaranteed by their suppliers or manufacturers.
(D) Subcontractors. The warranty obligations in the Contract Documents apply to Work performed by Contractor and its Subcontractors, and Contractor expressly agrees to act as co-guarantor of such Work.
(E) Contractor’s Obligations. Upon written notice from City to Contractor of any defect in the Work discovered during the Warranty Period, Contractor or its responsible Subcontractor must promptly correct the defective Work at its own cost. Contractor’s obligation to correct defects discovered during the Warranty Period will continue past the expiration of the Warranty Period as to any defects in Work for which Contractor was notified prior to expiration of the Warranty Period. (F) City’s Remedies. If Contractor and/or its responsible Subcontractor fails to correct defective Work within ten (10) days following notice by City, or sooner, if required by the circumstances, Contractor expressly agrees that City may correct the defects to conform with Contract Documents at Contractor’s sole expense, and Contractor agrees to reimburse City for its costs within thirty (30) days following City’s submission of a demand for payment pursuant to this provision. If City is required to initiate legal action to compel Contractor’s compliance with this provision, and City is the prevailing party in such action, Contractor is solely responsible for all of City’s attorney’s fees and legal costs expended to enforce Contractor’s warranty obligations herein in addition to any and all costs incurred by City to correct the defective Work.

11.3 Use Prior to Final Completion. City reserves the right to occupy or make use of the Project, or any portions of the Project, prior to Final Completion if City has determined that the Project or portion of it is in a condition suitable for the proposed occupation or use, and that it is in its best interest to occupy or make use of the Project, or any portions of it, prior to Final Completion. City will notify Contractor in writing of its intent to occupy or make use of the Project or any portions of the Project, pursuant to this provision.
(A) Non-Waiver. Occupation or use prior to Final Completion will not operate as acceptance of the Work or any portion of it, nor will it operate as a waiver of any of City’s rights or Contractor’s duties pursuant to these

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Contract Documents, and will not affect nor bear on the determination of the time of substantial completion with respect to any statute of repose pertaining to the time for filing an action for construction defect. (B) City’s Responsibility. City will be responsible for the cost of maintenance and repairs due to normal wear and tear with respect to those portions of the Project that are being occupied or used before final completion. The Contract Price or the Contract Time may be adjusted pursuant to the applicable provisions of these Contract Documents if, and only to the extent that, any occupation or use under this Section actually adds to Contractor’s cost or time to perform the Work.

11.4 Substantial Completion. For purposes of determining “substantial completion” with respect to any statute of repose pertaining to the time for filing an action for construction defect, “substantial completion” is deemed to mean the last date that Contractor or any Subcontractor performs Work on the Project prior to recordation of the Notice of Completion, except for warranty work performed under this Article.

Article 12
Dispute Resolution

12.1 Claims. This Article applies to and provides the exclusive procedures for any Claim arising from or related to the Contract or performance of the Work.
(A) Definition. “Claim” means a separate demand by Contractor, submitted in writing, for change in the Contract Time or Contract Price that has previously been submitted to City in accordance with the requirements of the Contract Documents, and which has been rejected by City, in whole or in part.
(B) Limitations. A Claim may only include the portion of a previously rejected demand that remains in dispute between Contractor and City.

With the exception of any dispute regarding the amount of money actually paid to Contractor as Final Payment, Contractor is not entitled to submit a Claim demanding a change in the Contract Time or the Contract Price, which has not previously been submitted to City in full compliance with Article 5 and Article 6, and subsequently rejected in whole or in part by City.
(C) Scope of Article. This Article is intended to provide the exclusive procedures for submission and resolution of Claims of any amount, and applies in addition to the provisions of Public Contract Code Section 9204 and Sections 20104, et seq.

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(D) No Work Delay. Notwithstanding the submission of a Claim or any other dispute between the parties related to the Project or the Contract Documents, Contractor must perform the Work and may not delay or cease Work pending resolution of the Claim or other dispute, but must continue to diligently prosecute the performance and timely completion of the Work, including the Work pertaining to the Claim or other dispute.

12.2 Claims Submission. The following requirements apply to any Claim subject to this Article:
(A) Substantiation. The Claim must be submitted to City in writing, clearly identified as a “Claim” submitted pursuant to this Article 12, and must include all of the documents necessary to substantiate the Claim including the Change Order request that was rejected in whole or in part, and a copy of City’s written rejection that is in dispute. The Claim must clearly identify and describe the dispute, including relevant references to applicable portions of the Contract Documents, and a chronology of the relevant events. Any Claim for additional payment must include a complete, itemized breakdown of all labor, materials, taxes, insurance, and subcontract, or other costs. Substantiating documentation such as payroll records, receipts, invoices, or the like, must be submitted in support of each claimed cost. Any Claim for an extension of time or delay costs must be substantiated with schedule analysis and narrative depicting and explaining claimed time impacts.
(B) Claim Format. A Claim must be submitted in the following format:
(1) General introduction, specifically identifying the submission as a “Claim” submitted under this Article 12.
(2) Relevant background information, including identification of the specific demand at issue, and the date of City's rejection of that demand.
(3) Detailed explanation of the issue(s) in dispute. For multiple issues, separately number and identify each issue and include the following for each separate issue:
(a) The background of the issue, including references to relevant provisions of the Contract Documents;
(b) A succinct statement of the matter in dispute, including Contractor’s position and the basis for that position;
(c) A chronology of relevant events;

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(d) The identification and attachment of all supporting documents (see subsection (A), above, on Substantiation); and
(e) Use of a separate page for each issue.
(4) Summary of issues and damages.
(5) The following certification, executed by Contractor’s authorized representative:
“The undersigned Contractor certifies under penalty of perjury that its statements and representations in this Claim are true and correct. Contractor warrants that this Claim is comprehensive and complete as to the matters in dispute, and agrees that any costs, expenses, or delay claim not included herein are deemed waived.

Contractor understands that submission of a Claim which has no basis in fact or which Contractor knows to be false may violate the False Claims Act (Government Code Section 12650 et seq.).” (C) Submission Deadlines.
(1) A Claim must be submitted within fifteen (15) days following the date that City notified Contractor in writing that a request for a change in the Contract Time or Contract Price, duly submitted in compliance with Article 5 and Article 6, has been rejected in whole or in part.
(2) With the exception of any dispute regarding the amount of Final Payment, any Claim must be filed on or before the date of Final Payment, or will be deemed waived.
(3) A Claim disputing the amount of Final Payment must be submitted within fifteen (15) days of the effective date of Final Payment, under Section 8.8, above.
(4) Strict compliance with these Claim submission deadlines is necessary to ensure that any dispute may be mitigated as soon as possible, and to facilitate cost-efficient administration of the Project.

Any Claim that is not submitted within the specified deadlines will be deemed waived by Contractor.

12.3 City’s Response. City will respond within forty-five (45) days of receipt of the Claim with a written statement identifying which portion(s) of the Claim are disputed, unless the forty-five (45) day period is extended by mutual agreement of City and Contractor. However, the City may first request, in

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writing, within thirty (30) days of receipt of the Claim, any additional documentation supporting the Claim or relating to defenses to the Claim that City may have against Contractor. If Contractor fails to submit the additional documentation to City within fifteen (15) days of receipt of City’s request, the Claim will be deemed waived.
(A) Additional Information. If additional information is thereafter required, it may be requested and provided upon mutual agreement of City and Contractor.
(B) City’s Response. City’s written response to the Claim, as further documented, will be submitted to Contractor within fifteen (15) days after receipt of the further documentation or within a period of time no greater than that taken by Contractor in producing the additional information, whichever is greater.
(C) Non-Waiver. Any failure by City to respond within the times specified above may not be construed as acceptance of the Claim in whole or in part, or as a waiver of any provision of these Contract Documents.

12.4 Meet and Confer. If Contractor disputes City’s written response, or City fails to respond within the specified time, Contractor must notify City in writing, either within fifteen (15) days of receipt of City’s response, or within fifteen (15) days of City’s failure to respond within the specified time, respectively, and demand an informal conference to meet and confer for settlement of the issues in dispute. If Contractor fails to notify City in writing of the dispute, and demand an informal conference to meet and confer, within the specified time, Contractor’s Claim will be deemed waived.
(A) Schedule Meet and Confer. Upon receipt of the demand to meet and confer, City will schedule the meet and confer conference to be held within thirty (30) days, or later if needed to ensure the mutual availability of all of the individuals that each party requires to represent its interests at the meet and confer conference.
(B) Location for Meet and Confer. The meet and confer conference will be scheduled at a location at or near City’s principal office. (C) Written Statement After Meet and Confer. Within ten (10) working days after the meet and confer has concluded, City will issue a written statement identifying which portion(s) of the Claim remain in dispute, if any.

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(D) Submission to Mediation. If the Claim or any portion remains in dispute following the meet and confer conference, within ten working days after the City issues the written statement identifying any portion(s) of the Claim remaining in dispute, the disputed portion(s) will be submitted for mediation as set forth below.

12.5 Mediation and Government Code Claims.
(A) Mediation. Mediation under this Article will be scheduled within sixty (60) days following conclusion of the meet and confer process, with a mediator that the parties mutually agreed upon. The mediation itself may take place more than sixty (60) days following conclusion of the meet and confer process to ensure the mutual availability of the selected mediator and all of the individuals that each party requires to represent its interests.

The parties must share the costs of mediation equally, except costs incurred by each party for representation by legal counsel or any other consultant.
(B) Government Code Claims.
(1) Timely presentment of a Government Code Claim is a condition precedent to filing any legal action based on or arising from the Contract.
(2) The time for filing a Government Code Claim will be tolled from the time Contractor submits its written Claim pursuant to Section

12.2, above, until the time that Claim is denied as a result of the meet and confer process, including any period of time used by the meet and confer process. If the parties agree to mediation, the time for filing a Government Code Claim will be tolled until conclusion of the mediation if the Claim is not fully resolved by mutual agreement of the parties during the mediation or any continuation of the mediation.

12.6 Tort Claims. This Article does not apply to tort claims and nothing in this Article is intended nor will be construed to change the time periods for filing tort-based Government Code Claims.

12.7 Arbitration. It is expressly agreed, under California Code of Civil Procedure Section 1296, that in any arbitration to resolve a dispute relating to this Contract, the arbitrator’s award must be supported by law and substantial evidence.

12.8 Damages. Contractor bears the burden of proving entitlement to and the amount of any claimed damages. Contractor is not entitled to damages calculated on a total cost basis, but must prove actual damages.

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Contractor is not entitled to recovery of any alleged home office overhead.

The Eichleay Formula or similar formula may not be used for any recovery under the Contract. Contractor is not entitled to consequential damages, including home office overhead or any form of overhead not directly incurred at the Worksite; lost profits; loss of productivity; lost opportunity to work on other projects; diminished bonding capacity; increased cost of financing for the Project; extended capital costs; non-availability of labor, material or equipment due to delays; or any other indirect loss arising from the Contract.

12.9 Other Disputes. The procedures in this Article 12 will apply to any and all disputes or legal actions, in addition to Claims, arising from or related to this Contract, unless and only to the extent that compliance with a procedural requirement is expressly and specifically waived by City.

Nothing in this Article is intended to delay suspension or termination under Article 13.

Article 13
Suspension and Termination

13.1 Suspension for Cause. In addition to all other remedies available to City, if Contractor fails to perform or correct work in accordance with the Contract Documents, City may immediately order the Work, or any portion of it, suspended until the cause for the suspension has been eliminated to City’s satisfaction.
(A) Failure to Comply. Contractor will not be entitled to an increase in Contract Time or Contract Price for a suspension occasioned by Contractor’s failure to comply with the Contract Documents. (B) No Duty to Suspend. City’s right to suspend the Work will not give rise to a duty to suspend the Work, and City’s failure to suspend the Work will not constitute a defense to Contractor’s failure to comply with the requirements of the Contract Documents.

13.2 Suspension for Convenience. City reserves the right to suspend, delay, or interrupt the performance of the Work in whole or in part, for a period of time determined to be appropriate for City’s convenience, and not due to any act or omission by Contractor or its Subcontractors. Upon notice by City pursuant to this provision, Contractor must immediately suspend, delay, or interrupt the Work as directed by City. The Contract Price and the Contract Time will be equitably adjusted by Change Order to reflect the cost and delay impact occasioned by such suspension for convenience.

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13.3 Termination for Default. Contractor may be deemed in default for a material breach of or inability to perform the Contract, including Contractor’s refusal or failure to supply sufficient skilled workers, proper materials, or equipment to perform the Work within the Contract Time; refusal or failure to make prompt payment to its employees, Subcontractors, or suppliers or to correct rejected work; disregard of laws, regulations, ordinances, rules, or orders of any public agency with jurisdiction over the Project; or if Contractor lacks financial capacity to complete the Work within the Contract Time; or is otherwise responsible for a material breach of the Contract requirements.
(A) Notice. Upon City’s determination that Contractor is in default, City may provide Contractor and its surety written notice of default and intent to terminate the Contract.
(B) Termination. Within seven (7) calendar days after notice of intent to terminate for default has been given, unless the default is cured or arrangements to cure the default have been made and memorialized in writing, to City’s satisfaction, City may terminate the Contract by written notice to Contractor with a copy to Contractor’s surety. (C) Waiver. Time being of the essence in the performance of the Work, if Contractor’s surety fails to arrange for completion of the Work in accordance with the Performance Bond, within seven (7) calendar days from the date of the notice of termination, Contractor’s surety will be deemed to have waived its right to complete the Work under the Contract, and City may immediately make arrangements for the completion of the Work through use of its own forces, by hiring a replacement contractor, or by any other means that City determines advisable under the circumstances. Contractor and its surety will be jointly and severally liable for any additional cost incurred by City to complete the Work following termination. In addition, City will have the right to use any materials, supplies, and equipment belonging to Contractor and located at the Worksite for the purposes of completing the remaining Work. (D) Wrongful Termination. If a court of competent jurisdiction or an arbitrator later determines that the termination for default was wrongful, the termination will be deemed to be a termination for convenience, and Contractor’s damages will be strictly limited to the compensation provided for termination for convenience, in Section 13.4, below. Contractor waives any claim for any other damages for wrongful termination including consequential damages, lost opportunity costs or lost profits.

13.4 Termination for Convenience. City reserves the right to terminate all or part of the Contract for convenience upon written notice to Contractor.

Upon receipt of such notice, Contractor must immediately stop the Work,

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comply with City’s instructions to protect the completed Work and materials, and use its best efforts to minimize further costs. In the event of termination for convenience, the parties agree that the following will constitute full and fair compensation to Contractor, and that Contractor will not be entitled to any additional compensation:
(A) Completed Work. The value of its Work satisfactorily performed to date, including Project overhead and profit based on Contractor’s schedule of values;
(B) Demobilization. Actual and substantiated demobilization costs; and
(C) Markup. Five percent (5%) of the total value of the Work performed as of the date of notice of termination or five percent (5%) of the value of the Work yet to be completed, whichever is less.

13.5 Provisions Remaining in Effect. Upon termination pursuant to this Article, the provisions of the Contract Documents remain in effect as to any claim, indemnity obligation, warranties, guarantees, submittals of asbuilt drawings, instructions, or manuals, or other such rights and obligations arising prior to the termination date.

Article 14
Miscellaneous Provisions

14.1 Assignment of Unfair Business Practice Claims. Under Public Contract Code Section 7103.5, Contractor and its Subcontractors agree to assign to City all rights, title, and interest in and to all causes of action it may have under Section 4 of the Clayton Act (15 U.S.C. Section 15) or under the Cartwright Act (Chapter 2 (commencing with Section 16700) of Part 2 of Division 7 of the Business and Professions Code), arising from purchases of goods, services, or materials pursuant to the Contract or subcontract. This assignment will be effective at the time City tenders Final Payment to Contractor, without further acknowledgement by the parties.

14.2 Provisions Deemed Inserted. Every provision of law required to be inserted in the Contract Documents is deemed to be inserted, and the Contract Documents will be construed and enforced as though such provision has been included. If it is discovered that through mistake or otherwise that any required provision was not inserted, or not correctly inserted, the Contract Documents will be amended accordingly.

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14.3 Waiver. No waiver of a breach, failure of any condition, or any right or remedy contained in or granted by the provisions of the Contract Documents will be effective unless it is in writing and signed by the party waiving the breach, failure, right, or remedy. No waiver of any breach, failure, right, or remedy will be deemed a waiver of any other breach, failure, right, or remedy, whether or not similar, nor will any waiver constitute a continuing waiver unless specified in writing by the waiving party.

14.4 Titles, Headings, and Groupings. The titles and headings used and the groupings of provisions in the Contract Documents are for convenience only and may not be used in the construction or interpretation of the Contract Documents or relied upon for any other purpose.

14.5 Statutory and Regulatory References. With respect to any amendments to any statutes or regulations referenced in these Contract Documents, the reference is deemed to be the version in effect on the date that bids were due.

END OF GENERAL CONDITIONS

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SPECIAL CONDITIONS

1. Emergency Contact. Prior to commencement of the Work on the Project, Contractor must provide contact information to the City’s Project Manager for the person designated by Contractor to respond to any emergency that arises on the Worksite during the course of the Project. That person will be responsible for responding on the Worksite within thirty (30) minutes following notification of an emergency by City’s Police or Fire Department, regardless of the time of day.

2. Weather Delays. This provision is intended to supplement the requirements of General Conditions Section 5.2 on Schedule Requirements and Section 5.3 on Delays and Extensions of Contract Time.
(A) Weather Delay Day. A Weather Delay Day is a Working Day during which Contractor and its forces, including Subcontractors, are unable to perform more than forty percent (40%) of the critical path Work scheduled for that day due to adverse weather conditions which impair the ability to safely or effectively perform the scheduled critical path Work that day. Adverse weather conditions may include rain, saturated soil, and Worksite clean-up required due to adverse weather. Determination of what constitutes critical path Work scheduled for that day will be based on the most current, City-approved schedule.
(B) Normal Weather Delay Days. Based on historic records for the Project location, Contractor’s schedule should assume the following number of normal Weather Delay Days for each month:

Month # Normal Weather
Delay Days
January 11
February 10
March 10
April 06
May 03
June 01
July 01
August 01
September 01
October 01
November 04
December 08
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compensable extension of the Contract Time for each Weather Delay Day in excess of the normal Weather Delay Days within a given month, as set forth in Section (B) above, subject to the following limitations:
(1) Contractor must fully comply with the applicable procedures in Article 5 and 6 of the General Conditions regarding requests to modify the Contract Time.
(2) Normal Weather Delay Days which do not occur during a given month do not carry over to another month.
(3) Contractor will not be entitled to an extension of time for a Weather Delay Day to the extent Contractor is responsible for concurrent delay on that day.

END OF SPECIAL CONDITIONS

Left Blank Intentionally

10 CITY COUNCIL STAFF REPORT
MEETING DATE: January 17, 2024
PREPARED BY:

Chris Ghione, Public Services Director
APPROVED BY: City Manager

PAVEMENT CONDITION UPDATE AND PAVEMENT REHABILITATION

PLANNING UPDATE

RECOMMENDATION(S)
Receive updates.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Maintaining and Enhancing Infrastructure
2022-2023 Strategic Priorities
Fiscal Sustainability
Affordable Housing and Homelessness
Transportation
REPORT NARRATIVE:

For the last half of a decade, the City has made continued strides to improve its pavement conditions across the City. The purpose of this update is two-fold. One, to share and provide a comprehensive report on pavement conditions and, two, to provide an update on future pavement condition planning for the City.

Pavement Condition Update
The City's most recent overall system-wide Pavement Condition Index (PCI) rating for the end of calendar year 2023 was 75. This is the same as the overall system-wide PCI rating of 75 at the end of 2022. The City has steadily improved the condition of its streets since 2018 through investment of City dollars, annual funding from State Senate Bill 1 (Road Repair and Accountability Act of 2017), and Measure B funding (2016 voter approved countywide half-cent sales tax to enhance transportation). In 2023, the City had a consultant complete a detailed Pavement Management Report and survey of pavement conditions throughout the City. This report was funded through grant funding from MTC. The report is available online on the City's new pavement rehabilitation web page at:
www.morganhill.ca.gov/DocumentCenter/View/47646/City-of-Morgan-Hill-PTAP-23-- rev01-for-Web
The survey of City streets was taken in the Spring of 2023 and the report completed in

10 late 2023. As a result, the report does not include the 2023 Pavement Improvement Project completed by the City this past fall. The report shows the City with an overall PCI of 74, which improved to 75 for year end of 2023 due to the recent pavement improvements completed. The report also identifies a backlog of $25.1 million in pavement rehabilitation. Comparatively, in 2017, the City had an estimated backlog of $23.2 million, which with inflation in today's dollars would be $29.5 million. This effectively means the City has reduced its backlog since 2017. The report provides various details and scenarios on pavement conditions and prediction of pavement conditions based on various funding scenarios.

Pavement Planning
City staff are in the process of preparing the 2024 Pavement Rehabilitation Project. As planned, the project prioritizes the repair of the City’s arterial and collector roadways, while allocating available funds to the resurfacing of residential streets that are significantly degraded. However, budget limitations have prevented the City from funding all the previously planned work and some work has been pushed back on the schedule. This includes the Woodland Acres area and sections of the Jackson Meadows area. The planned work for the coming five years is available on the City's new Pavement Rehabilitation webpage at: https://morganhill.ca.gov/2539/PavementRehab-Street-Cut-Moratorium COMMUNITY ENGAGEMENT:

Inform
City staff work on a significant communication planning effort to be implemented ahead of the work, which is planned to occur during the summer months. City staff regularly receive requests for pavement repairs from throughout the community and these are reviewed and repaired by street maintenance staff if smaller in nature or incorporated into the larger pavement rehab planning if larger in nature. The City has recently developed a page dedicated to pavement rehabilitation on the City's website that outlines long term planning for pavement rehabilitation. The page is available at:
www.morganhill.ca.gov/2539/Pavement-Rehab-Street-Cut-Moratorium ALTERNATIVE ACTIONS:

The City Council could provide staff with additional direction or feedback as deemed appropriate.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The City Council has taken significant actions related to funding pavement rehabilitation and has received annual updates on pavement rehabilitation planning. Most recently, the City Council received the following reports:

On June 15, 2022, the City Council adopted the FY2022-23 through 2027-28 Capital Improvement Program Project Budget.

On April 19, 2023, the City Council received an Update Regarding Pavement Rehabilitation Planning.

On June 21, 2023, the City Council adopted a resolution approving FY2023-24 list of street rehabilitation projects funded by senate bill (SB) 1: the road repair and

10 accountability act.

Appropriation for funding pavement rehabilitation activities shall occur with the upcoming budget process.

FISCAL AND RESOURCE IMPACT:

There is no fiscal impact associated with receiving the report. Award of future projects and appropriations will require additional action by the City Council.

CEQA (California Environmental Quality Act):

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

11 CITY COUNCIL STAFF REPORT
MEETING DATE: January 17, 2024
PREPARED BY:

Chris Ghione, Public Services Director
APPROVED BY: City Manager

PURCHASE OF MOBILE OFFICE SPACE FOR AQUATICS CENTER

AND OUTDOOR SPORTS CENTER USE

RECOMMENDATION(S)

1. Approve the purchase of mobile office space for $100,000; and

2. Authorize the City Manager to execute necessary agreements to complete the purchase with approval of the City Attorney.

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

This item is being presented to the Council to provide an opportunity for the City to purchase additional office/ meeting space at the Outdoor Sports Center and Aquatics Center. The office space is 700 square feet in size and has heating and cooling, but no restrooms or water service. The building is permitted and meets ADA standards. The building is approximately 20 years old, but in good condition and is expected to be usable for decades. The recommended purchase would be for ancillary use by the programs and users of the Outdoor Sports Center and Aquatics Center. The fair market value for the trailers is estimated at $100,000 based on comparative research for used mobile office trailers. The significant benefit the City would have with the purchase of the existing building is that it has been installed, permitted, has electric connection, and has access ramps fully installed. Should the City purchase a comparable trailer, installation would cost the City tens of thousands of dollars above the purchase price for the installation.

In 2023, the Bay Area Panthers made Morgan Hill the practice location for the team,

11 which plays its games in San Jose's SAP Arena. The fields used by the team for practice were at the Outdoor Sports Center. As part of the field rental, the Panthers brought in a mobile building for use by the team that is located on the south side of the Outdoor Sports Center gravel parking lot adjacent to the Aquatics Center (Attachment A). The building was initially used by the team. However, a few weeks into the season, the team parted ways with the head coach/general manager, and it was discovered that the building was owned by the coach's previous business organization and not the Panthers. The Panthers stopped using the building, and it has sat empty for eight months. The Panther's originally attempted to negotiate ownership of the building, but were unsuccessful. In the last two months, the owner and City staff have engaged in discussions about the purchase of the building.

The purpose of additional meeting space would be both a benefit to the Outdoor Sports Center and Aquatics Center and would support enhanced revenue generation for both facilities. The space can be rented for stand-alone meetings or could be used as an add-on for major sports rentals at the Aquatics Center and Outdoor Sports Center.

Users of major events often note there are no locker rooms or meeting spaces for teams, officials, event staff, etc. Additionally, the space could support programming such as youth camps, clinics, etc. External pictures of the trailer are included as an attachment.

COMMUNITY ENGAGEMENT:

Consult
No direct engagement was made with the community on the purchase. City staff and MHOSC staff have had conversation in the past with users on the need for additional meeting space. The need was also identified through the community engagement associated with the development of the draft Condit Road Sports Facilities Master Plan.

ALTERNATIVE ACTIONS:

The Council could choose not to make this purchase. Should the the purchase not occur, City staff would direct the owners of the office/meeting space to remove the trailers from the site.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

No previous Council Actions have been taken related to this purchase. However, the Council approved the draft Condit Road Sports Facilities Master Plan on October 19, 2022, which includes the planned addition of meeting space for the facility.

FISCAL AND RESOURCE IMPACT:

Funding for the purchase is available within the existing Capital Improvement Program under Project PR11011-Condit Road Sports Facilities Development funded through the Recreation Center Impact Fund (360).

CEQA (California Environmental Quality Act):

Categorical Exemption

11 The purchase of the office/meeting space will complete the purchase of an existing facility that is already on site at the Outdoor Sports Center. The planned maintenance and management of city facilities falls within the CEQA categorical exemption of Class 1, Existing Facilities.

12/28/23 $(
3XEOLF6HUYLFHV'HSDUWPHQW Condit Road Sports Facilities 1 1
Building

Building Pictures

12 CITY COUNCIL STAFF REPORT
MEETING DATE: January 17, 2024
PREPARED BY:

Dat Nguyen, Finance Director
APPROVED BY: City Manager
RECEIVE MONTHLY BUDGET UPDATE AND NOVEMBER 2023

FINANCIAL AND INVESTMENT REPORTS

RECOMMENDATION(S)
Accept and file report.

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

As part of the City Council’s expectation to maintain a high level of transparency and to be responsible stewards of public funds, staff is providing this monthly budget update, along with the November 2023 financial and investment reports.

November 2023 Financial Report
The Revenue and Expense Summary through November 2023 is included on the first page of the monthly financial report. Overall, General Fund revenues total $13.6 million or about 25% of the budget as some of the major revenue categories are received later in the fiscal year. Expenditures, including encumbrances, amounted to $26.0 million, of which approximately $4.0 million is attributable to outstanding encumbrances, compared to prior year expenditures, including encumbrances, of $24.5 million. This represents an increase of $1.5 million, including encumbrances, compared to the prior year. Excluding the encumbrances, expenditures increased by about $1.2 million mainly due to new programs such as Innovative Transit, continued recovery in Recreation Services, as well as overall cost increases.

Budget Update
There has been no material change to the City’s revenue since the last budget update to the Council on December 6, 2023 except for Development Services. Based on the latest data, the team is forecasting the fund will see a revenue shortfall of about $1.0

12 million. This is mainly due to the absence of significant public improvements where the majority of the engineering revenues are derived from, as well as because some projects are moving forward slower than expected. Staff has implemented some initiatives to alleviate the forecasted revenue shortfall, including freezing of a vacant senior planner position and repositioning of certain engineer positions to capital improvement projects.

For water revenue, Morgan Hill residents consumed about the same amount of water through November compared to the prior three-year average.

COMMUNITY ENGAGEMENT:

Inform.

Finance staff prepares these financial reports to inform City officials, the Council, the Community, and various lenders and stakeholders about the financial health of the organization, which assists each one of the interested parties in making sound financial and investment decisions.

ALTERNATIVE ACTIONS:

No alternative action is recommended, as this is a monthly financial report on City transactions which have already occurred.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The City Council receives and files the financial and investment report for each month.

At the September 16, 2015 meeting, City Council recommended monthly financial and investment reports be agendized under the Consent Agenda, and quarterly financial and investment reports be presented to City Council as an “Other Business” item.

FISCAL AND RESOURCE IMPACT:

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

CEQA (California Environmental Quality Act):

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

FINANCE DEPARTMENT

CITY OF MORGAN HILL
November 30, 2023 - 42% of Year Complete
Prepared by:

Monthly Financial and Investment Reports

CITY OF MORGAN HILL, CALIFORNIA
FINANCIAL STATEMENT ANALYSIS - FISCAL YEAR 2023-24
FOR THE MONTH ENDED NOVEMBER 2023 – 42% OF YEAR COMPLETE  General Fund – Revenues through November totaled $13.6 million, or about 25% of the budgeted revenues as some of the major revenue categories such as property tax are received later in the fiscal year. With respect to the property tax revenue forecast, the County estimates the City will receive approximately $19.0 million in property tax revenue for the current fiscal year, about $0.5 million more than the budget of $18.5 million. As for sales tax, HdL, the City's sales tax consultant revised the City's current fiscal year sales tax revenue estimate, before tax rebates, to $12.5 million, a downward revision of about $0.2 million from the current year budget, partially attributable to falling gas prices, lower household discretionary spending, and weaker consumer confidence.

The chart below shows historical General Fund revenues by major revenue category from FY19-20 through FY22-23 Actual, FY23-24 Budget, and YTD as of November 30, 2023.

General Fund expenditures and encumbrances through November totaled $26.0 million, of which approximately $4.0 million is attributable to outstanding encumbrances, compared to prior year expenditures, including encumbrances, of $24.5 million. This represents an increase of $1.5 million, including encumbrances, compared to the prior year. Excluding the encumbrances, expenditures increased by about $1.2 million mainly due to new programs such as Innovative Transit, continued recovery in Recreation Services, as well as overall cost increases.  Community Services – The Community Services Department’s recreation operations, as reflected in the schedule presented on page 7 of the Monthly Financial and Investments Reports, shows a negative impact to the General Fund of approximately $1.3 million as of November 30, 2023. Recreation Services revenues continue to recover from the pandemic and are on target with budget. $14.5 $16.0 $16.7 $18.1 $18.5
$9.7 $11.0 $12.9 $12.7 $12.7 $4.6
$4.4
$5.9 $5.7 $5.8 $8.3 $5.7
$7.5 $9.3 $10.0
$3.6
$9.7
$9.1 $6.6 $6.5
$40.6
$46.8
$52.1 $52.4 $53.5
$13.6
0 10
20 30
40 50
60 FY19-20 FY20-21 FY21-22 FY22-23 Budget
FY23-24
YTD
FY23-24
Millions ($)
Historical GF Revenues
Property Tax Sales Tax Franchise and Hotel Taxes Service Charges Other

CITY OF MORGAN HILL, CALIFORNIA
FINANCIAL STATEMENT ANALYSIS - FISCAL YEAR 2023-24
FOR THE MONTH ENDED NOVEMBER 2023 – 42% OF YEAR COMPLETE The chart below shows the historical net impact of Recreation Operations to the general fund.

Due to longstanding governmental accounting and budgeting convention, the City’s recreation operations are not charged for indirect costs (known in Morgan Hill as “General Fund Administration”) from the central services departments of City Attorney, City Manager, and Administrative Services.

The City’s other governmental funds, such as Development Services, and the proprietary funds, such as Water and Wastewater, and the Information Services Fund, are assessed such charges through the City’s indirect cost allocation plan, prepared in compliance with the guidelines set forth in the Code of Federal Regulations Title 2, Chapter II, Part 200 (formerly OMB Circular No. A-87), which mandates certain calculation and cost allocation practices that must be followed in order to qualify for Federal grant funding, but which also represents best practice for non-grant funded City operations like utilities and information services.
 Development Services Fund – Revenues through November totaled $1.8 million compared to prior year to date amount of approximately $3.3 million. Expenditures, including encumbrances, totaled $2.5 million.
 Debt Service Funds – Expenditures through November totaled $0.6 million. The debt service for the first half of the year includes both interest and principal, while the second half of the year will include interest only. Debt service payments were all scheduled when the bonds were issued and are budgeted for in the months delineated in the underlying bond documents. The General Fund’s portion of the annual debt service payments is approximately $200,000, less than one percent of the General Fund’s budgeted revenues.
($2.0)
($1.5)
($1.0)
($0.5)
$0.0
$0.5
FY14-15 FY15-16 FY16-17 FY17-18 FY18-19 FY19-20 FY20-21 FY21-22 FY22-23 FY23-24 Budget
Millions (S)
Historical Net GF Impact

CITY OF MORGAN HILL, CALIFORNIA
FINANCIAL STATEMENT ANALYSIS - FISCAL YEAR 2023-24
FOR THE MONTH ENDED NOVEMBER 2023 – 42% OF YEAR COMPLETE  Wastewater Operations – Revenues through November 30, 2023 totaled $5.1 million. Expenditures and outstanding encumbrances totaled $5.2 million or 33% of the budget. The table below shows historical Wastewater Operations revenues and expenditures from FY19-20 through FY22-23 Actual, FY23-24 Budget, and YTD as of November 30, 2023.
(amount in millions) FY19‐20 FY20‐21 FY21‐22 FY22‐23
Budget
FY23‐24
YTD
FY23‐24
Revenues 11.9               13.3            14.9                         15.3              15.6                5.1 Expenditures              12.3 13.3            14.8                         16.0              15.6                5.2 Operating Margin               (0.4)              ‐ 0.1                            (0.7)                ‐              (0.1) Operating Margin
without Encumbrances               (0.1)                ‐                0.1                 (0.7)                ‐                (0.0)  Water Operations – Water Operations includes Utility Billing, Water Conservation, and Water Operations. Revenues through November 30, 2023 totaled $7.3 million. Water Operations expenditures, including outstanding encumbrances, totaled $8.3 million. Morgan Hill residents consumed about the same amount of water through November compared to the prior three-year average. As such, no revenue stabilization water rate was implemented. The table below shows Water Operations revenues and expenditures from FY19-20 through FY22-23 Actual, FY23-24 Budget, and YTD as of November 30, 2023.
(amount in millions) FY19‐20 FY20‐21 FY21‐22
Un‐audited
FY22‐23
Budget
FY23‐24
YTD
FY23‐24
Revenues 15.3               16.5             16.0             18.1             19.8                               7.3 Expenditures              16.4            16.5            15.2 18.0             20.3                               8.3 Operating Margin               (1.1)              ‐ 0.8                             0.1                (0.5)                (1.0) Operating Margin
without Encumbrances               (0.1)                ‐ 0.8                                 0.1                (0.5)                 (0.2)  Investments – Two securities were called, and five new securities were purchased, including four CDs.

Total interest earnings received on investments were $429,000 during the month.

% OF ACTUAL PLUS % OF

FUND NAME ACTUAL BUDGET ENCUMBRANCES BUDGET
General 13,559,570 $ 25% $ 26,013,269 44%
Development Services 1,847,033 29% 2,454,723 38%
Housing Successor Agency 106,511 45% 797,671 68%
Wastewater Operations 5,137,066 33% 5,206,297 33%
Wastewater Other 3,984,167 41% 5,403,255 12%
Water Operations 7,322,146 37% 8,318,422 41%
Water Other 3,444,495 40% 1,838,088 10%
Other Special Revenues * 2,118,342 25% 2,427,176 27%
Capital Projects & Streets 4,883,397 35% 24,805,830 58% Debt Service 286,471 42% 560,757 83%
Internal Service 5,241,141 41% 6,061,482 44%
TOTAL FOR ALL FUNDS $ 47,930,338 32% $ 83,886,970 37%
* Includes all Special Revenue Funds except Development Services Fund, Street Funds, and Housing Successor Agency.

REVENUES EXPENSES
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
General
Development
Services
Housing
Successor
Agency
Wastewater
Operations
Wastewater Other
Water Operations
Water Other
Other Special
Revenues *
Capital Projects
& Streets
Debt Service
Internal Service
Morgan Hill YTD Revenue & Expense Summary
November 30, 2023 - 42% of Year Complete
Revenues to Budget Expenses to Budget
Percentage of Actual to Budget
42%

% OF PRIOR YEAR % CHANGE FROM

REVENUE CATEGORY BUDGET ACTUAL BUDGET TO DATE PRIOR YEAR Property Tax 18,472,000 $ 1,661,403 $ 9% 1,906,973 $ -13% Sales Tax 12,673,967 3,385,660 27% 3,359,742 1%
Franchise Tax 2,983,800 687,037 23% 523,586 31%
Hotel Tax 2,800,000 960,062 34% 1,032,839 -7%
Other Agencies 1,011,233 336,938 33% 364,023 -7%
Service Charges 10,036,079 4,278,786 43% 3,787,504 13%
Interest/Other 2,143,687 1,041,510 49% 709,543 47%
Transfers In 3,342,540 1,208,173 36% 1,166,427 4%
TOTAL REVENUES 53,463,306 $ 13,559,570 $ 25% 12,850,636 $ 6% 0% 10% 20% 30% 40% 50% 60%
Property Tax
Sales Tax
Franchise Tax
Hotel Tax
Other Agencies
Service Charges
Interest/Other
Transfers In
Total Revenues
Percent of Actual to Budget
Morgan Hill YTD General Fund Revenues
November 30, 2023 - 42% of Year Complete
42%

ACTUAL PLUS PRIOR YTD PLUS % CHANGE FROM
EXPENDITURE CATEGORY BUDGET ENCUMBRANCES % OF BUDGET ENCUMBRANCES PRIOR YEAR Administration $ 6,489,162 $ 2,767,408 43% 2, $ 849,126 -3% Community Services 17,780,940 8,029,918 45% 7, 490,100 7% Police 23,056,204 9,249,131 40% 8, 351,824 11%
Fire 9,139,905 4,023,577 44% 3, 830,924 5%
Transfers Out 3,263,767 1,943,236 60% 1, 976,381 -2%
TOTAL EXPENDITURES $ 59,729,978 $ 26,013,269 44% 24, $ 498,356 6% 0% 10% 20% 30% 40% 50% 60% 70%
Administration
Community
Services
Police
Fire
Transfers Out
Total Expenditures
Percent of Actual to Budget
Morgan Hill YTD General Fund Expenditures
November 30, 2023 - 42% of Year Complete
42%

City of Morgan Hill
Recreation Report - Fiscal Year 2023-24
For the Month Ended November 30, 2023
42% of Year Complete
% of
Budget November 2023 YTD Budget
Revenues
Membership Services & Rec Programs 5,656,265 $ 443,298 $ 2,541,795 $ Facility Rentals 1,203,269 171,707 654,108
Community Services 152,498 2,799 12,778
Transfers in 75,000 6,250 31,250
Total Revenues 7,087,032 $ 624,053 $ 3,239,932 $ 46%
Less: Expenditures
Membership & Program Services 7,268,962 $ 418,093 $ 2,659,464 $ Facility Rentals 573,524 53,878 230,252
Community Services 672,192 53,970 217,458
Total Expenditures 8,514,679 $ 525,939 $ 3,107,174 $ 36% Net Impact without encumbrances (1,427,647) $ 98,114 $ 132,758 $ Encumbrances - - 1,434,711
Net Impact with encumbrances (1,427,647) $ 98,114 $ (1,301,953) $