Morgan Hill City Council
August 20, 2025

U11/City of Morgan Hill, CASubgrant/Fixed Price/June 30, 2028

MONITORING, REVIEW, AND AUDIT
The Foundation may monitor and review Your use of the Grant Funds, performance of the Project, and compliance with this Agreement, which may include onsite visits to assess Your organization's governance, management and operations, discuss Your program and finances, and review relevant financial and other records and materials. In addition, the Foundation may conduct audits, including onsite audits, at any time during the term of this Agreement, and within four years after Grant Funds have been fully spent. Any onsite visit or audit shall be conducted at the Foundation's expense, following prior written notice, during normal business hours, and no more than once during any 12-month period.

INTERNAL OR THIRD PARTY AUDIT
If during the term of this Agreement You are audited by your internal audit department or by a third party, You will provide the audit report to the Foundation upon request, including the management letter and a detailed plan for remedying any deficiencies observed ("Remediation Plan"). The Remediation Plan must include (a) details of actions You will take to correct any deficiencies observed, and (b) target dates for
successful completion of the actions to correct the deficiencies.

RECORD KEEPING
You will maintain complete and accurate accounting records and copies of any reports submitted to the Foundation relating to the Project. You will retain such records and reports for 4 years after Grant Funds have been fully spent. At the Foundation's request, You will make such records and reports available to enable the Foundation to monitor and evaluate how Grant Funds have been used or committed.

5 CITY COUNCIL STAFF REPORT
MEETING DATE: August 20, 2025
PREPARED BY:

John Lang, Housing and Economic Mobility Director
APPROVED BY: City Manager
AMEND AFFORDABLE HOUSING AGREEMENT FOR BROOKFIELDROSEWOOD

RECOMMENDATION(S)
Approve a Second Amendment to the Affordable Housing Agreement between the City of Morgan Hill and BFH CM Residential LLC authorizing a Housing in Lieu payment of $2,114,510 for the remaining eight Below Market Rate units in the project.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Supporting our Youth, Seniors, and Entire Community
Preserving and Cultivating Public Trust
2024-2025 Strategic Priorities
Affordable Housing and Homelessness
Guiding Documents
Morgan Hill 2035 General Plan
REPORT NARRATIVE:

The Rosewood residential development is a 120-unit housing development that consists of 34 single-family duet homes and 86 townhome-style condominiums and approximately 1.98 acres of park space. Under the City's Inclusionary Housing Ordinance (IHO), the project is subject to providing 15% of the units (18 total units) as Below Market Rate (BMR) affordable homes.

On June 28, 2022, the Planning Commission conducted a public hearing to approve Resolutions #22-11 and #22-13, amending the Tentative Parcel Map and approval of a Vesting Tentative Map, Design Permit and Minor exception request. In particular, a condition included in Resolution #22-13 noted that an Affordable Housing Agreement must be executed and recorded prior to issuance of a building permit for nine (9) BMR units as identified on site plan sheet DR-03 dated April 19, 2022. Additionally, the project elected to comply with the IHO requirements by proposing to pay 50% of the inLieu Fees on the nine (9) remaining units (50% of 18 total units equals 9 Below Market Rate units) including any fractional fee prior to the issuance of building permits.

5 On May 5, 2023, the City of Morgan Hill and BFH CM Residential LLC executed and recorded an Affordable Housing Agreement (document 25471407, official records of Santa Clara County ("Agreement")) that delineated nine (9) BMR affordable units would be produced and sold at a BMR price that is affordable to moderate income households (up to 120% of Area Median Income) and that 50% of the remaining BMR units would pay the in-lieu fee.

ANALYSIS
Market factors have changed considerably since the agreement was signed in 2022.

Higher interest rates have resulted in an increase in the cost of homeownership. That, combined with the rapid increase in townhome construction, has made it difficult to market and sell BMR townhomes.

Under current market rates, Rosewood townhomes are selling for approximately $900,000. At the time the original deed restrictions were recorded, the remaining eight (8) BMR affordable units (one was built and sold as "worker-housing") per the Affordable Housing Agreement were anticipated to be sold for $846,000. However, rising interest rates have resulted in an increase in total ownership costs, resulting in a decrease in moderate-income sales prices. The 2025 Morgan Hill Moderate Income affordable price for a 4-bedroom home is $666,000. Even at these reduced prices, the gap between deed-restricted BMR units and the market rate units is small. This has made the marketing and sale of the BMR units difficult.

Brookfield Residential engaged with City of Morgan Hill staff in late June 2025 about the market conditions and the inability to sell the designated BMR units as actual moderateincome affordable homes.

In addition to the marketing difficulties described above, staff recognize that there is a greater need for housing at lower affordability levels than this project would otherwise provide. As such, staff are proposing to have the developer pay the in-lieu fee on the remaining eight (8) BMR designated units which would result in an additional in- lieu payment of $2,114,510 in housing funds to support other future affordable homes.

Under Section 14.04.050 of the Inclusionary Housing Ordinance, the material change proposed for the Affordable Housing Agreement between the City of Morgan Hill and BFH CM Residential LLC requires City Council consideration.

COMMUNITY ENGAGEMENT:

Not Applicable
This report serves to inform the community of the proposed affordable housing agreement amendment.

ALTERNATIVE ACTIONS:

5 The City Council could decline approval of a Second Amendment to the Affordable Housing Agreement and recommend staff work with Brookfield Residential to continue to market the units as deed-restricted income units. A long-term factor for consideration is the City of Morgan Hill Affordable Housing Agreements have built in Consumer Price Index (CPI) and Capital Improvement adjustments that factor into determining the sales price of a BMR unit once a homeowner decides to sell before the deed restriction expires. Unless the housing market experiences a statewide or federal reset, for the unit to return to an affordable level (prices will likely continue to increase), it would require the City to purchase the unit at near market prices to then turn it around and sell the unit at a lower discounted amount in order for the home to be affordable by HCD income standards. This approach could result in significant losses to housing funds that could support future affordable homes.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

No prior City Council action has been previously taken related to the Affordable Housing Agreement for the Brookfield-Rosewood homes. Planning Commission and City Council have taken different actions related to the development of this project:
• On June 28, 2022, Planning Commission approved a Tentative Parcel Map, a Vesting Tentative Map, Design Permit, and Minor Exception. • On November 4, 2020, the City Council approved the Lillian Commons mixeduse project including a medical campus and up to 150 units of housing. • On September 29 and October 13, 2020, Planning Commission recommended approval of General Plan Land Use designation and a Zoning Amendment for a Planned Development Combining District to the City Council with a change to cap the residential use to 200 units.
• On January 28, 2020, Planning Commission reviewed a preliminary application for a General Plan and Zoning Amendment.

FISCAL AND RESOURCE IMPACT:

As part of the original Affordable Housing Agreement, Brookfield Residential paid the City $2,378,824 which represents 50% of the In-Lieu fee for nine BMR units.

The Second Amendment would result in an additional $2,114,510 In-Lieu Housing fees.

In-Lieu housing fees are used specifically to support the affordable housing program.

The approval of the Second Amendment will result in eight fewer BMR units being made available for first-time home buyers.

CEQA (California Environmental Quality Act):

Not a Project.

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

RECORDING REQUESTED BY

AND WHEN RECORDED MAIL
TO:

City of Morgan Hill
17575 Peak Avenue
Morgan Hill, CA 95037
Attention: Community Development Agency

EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §27383

SECOND AMENDMENT TO AFFORDABLE HOUSING AGREEMENT
(City of Morgan Hill lnclusionary Housing Program)
This Second Amendment to Affordable Housing Agreement (“Second Amendment”) is entered into effective as of ______, 2025, by and among the City of Morgan Hill, a California municipal corporation (“City”), BFH CM RESIDENTIAL LLC, a Delaware limited liability company, (“Developer”), and HouseKeys Inc., a California corporation, (“Administrator”), on the terms and conditions herein stated. City, Developer and Administrator are referred to collectively as the "Parties". Terms not otherwise defined in this Second Amendment shall have be meaning given to them in the Affordable Housing Agreement (as defined below).

Recitals
A. Developer is the owner of the real property situated in the City of Morgan Hill, County of Santa Clara (“County”), State of California, located at 16130 Juan Hernandez Drive, described as follows (“Property”): Lots 1 through 35, inclusive, as shown on the final map of Tract 10599 - Rosewood, filed for record on December 13, 2022, in Book 950 of Maps at Pages 17 through 28, inclusive, in the Official Records of the County of Santa Clara, State of California. The Project constructed on the Property is commonly referred to as “Rosewood.” B. On May 5, 2023, the Parties recorded against the Property an Affordable Housing Agreement, Document No. 25471407, in the Official Records of the County, which Affordable Housing Agreement was amended by that certain Amendment to Affordable Housing Agreement recorded against the Property on February 5, 2024, Document No. 25594490, in the Official Records of the County (collectively, “Affordable Housing Agreement”).

C. Pursuant to Sections 3 and Section 5 of the Affordable Housing Agreement, Developer was to comply with the City’s Inclusionary Housing Ordinance by: (a) selling nine (9) residential units developed within the Project to Eligible Households at Affordable Sales Prices in accordance with the terms of the Affordable Housing Agreement, and (b) paying to City the Fractional In-Lieu Fee of $2,378.824.29.

D. Developer timely paid the Fractional In-Lieu Fee, and has sold one (1) affordable residential unit in the Project. Developer has not sold the other eight (8) affordable residential units in the Project (“Remaining Rosewood Affordable Units”).

E. Developer has advised City that it is interested in paying an additional fractional in-lieu fee instead of selling the Remaining Rosewood Affordable Units as affordable units, and City is amendable to this approach, subject the terms and conditions described herein.

Now therefore, in consideration of the foregoing, which are incorporated herein by reference, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, City, Developer and Administrator agree as follows:

Agreement

1. Remaining Rosewood Affordable Units. City hereby agrees to accept the Remaining Fractional In-Lieu Fee (as defined in Section 2) instead of requiring Developer to sell the Remaining Rosewood Affordable Units as affordable units, and Developer hereby agrees to pay to City the Remaining Fractional In-Lieu Fee pursuant to the terms and conditions described herein. Accordingly, upon City’s receipt from Developer of the Remaining Fractional In-Lieu Fee and recordation of this Second Amendment, Developer shall be permitted to sell the Remaining Rosewood Affordable Units as market rate units in the Project and for market rate prices.

2. Fee Amount. The amount of the fractional in-lieu fee that Developer shall pay to City pursuant to this Second Amendment with respect to the Remaining Rosewood Affordable Units is $2,114,510.48 (“Remaining Fractional In-Lieu Fee”).

3. Timing of Fee Payment. Developer shall pay the Remaining Fractional In-Lieu Fee to City in cash or by wire transfer on or before 5 p.m. on ______________, 2025.

4. Developer’s Additional Obligations.
(a) No later than three (3) business days after the Effective Date of this Second Amendment, Developer shall obtain from a reputable title company, at Developer’s sole cost and deliver to City, a current preliminary title report for the Property (“Title Report”) evidencing recordation of the Affordable Housing Agreement on title to the Property. (b) Prior to execution by any party of this Second Amendment, Developer shall confirm in writing with the title company that execution by the Parties of the Second amendment and recordation thereof shall be sufficient to terminate the Affordable Housing Agreement and remove the Affordable Housing Agreement as an encumbrance on title to the Property. Developer shall deliver such written confirmation to City.

5. City’s Obligation. Within seven (7) business days of Developer timely paying the Remaining Fractional In-Lieu Fee in full to City, City shall deliver or make available to Developer to deliver (as City elects) this Second Amendment to title company for recordation in the County.

6. Satisfaction: Upon payment in full by Developer to City of the Remaining Fractional In-Lieu Fee and recordation of this Second Amendment, all obligations of the Parties contained in the Affordable Housing Agreement shall be deemed fully satisfied, except such obligations contained therein as are expressly stated to survive termination.

7. Costs. All costs and expenses related to this Second Amendment, including, without limitation, the Title Report, escrow charges, recording fees, legal fees or other costs and expenses shall be paid solely by Developer.

8. Effective Date: This Second Amendment shall be effective upon the date of its recordation in the Official Records of the County.
[Signature Pages Below]

IN WITNESS WHEREOF, the undersigned have executed this Amendment on the date first written above.

DEVELOPER: BFH CM RESIDENTIAL LLC,
a Delaware limited liability company
By:

Name:

Title:

By:

Name:

Title:

ACKNOWLEDGMENTS

STATE OF CALIFORNIA )

COUNTY OF )
On __, 20__ before me, , Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature: (seal)
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

CITY: CITY OF MORGAN HILL,
a municipal corporation
By:

Christina Turner, City Manager
APPROVED AS TO FORM:

By:

Donald Larkin, City Attorney

ACKNOWLEDGMENTS

STATE OF CALIFORNIA )

COUNTY OF )
On __, 20__ before me, , Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature: (seal)
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

ADMINISTRATOR: HOUSEKEYS INC.,
a California corporation
By:

Julius Nyanda, Chief Executive Officer

ACKNOWLEDGMENTS

STATE OF CALIFORNIA )

COUNTY OF )
On __, 20__ before me, , Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature: (seal)
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

6 CITY COUNCIL STAFF REPORT
MEETING DATE: August 20, 2025
PREPARED BY:

Yat Cho, Senior Project Manager
APPROVED BY: City Manager
APPROVE CONSULTANT AGREEMENT WITH ENGEO, INC. IN THE
AMOUNT OF $750,000 FOR ON-CALL GENERAL COMPACTION

TESTING AND SPECIAL INSPECTION SERVICES FOR VARIOUS

CAPITAL IMPROVEMENT PROGRAM PROJECTS

RECOMMENDATION(S)
Approve and authorize the City Manager to execute and administer an agreement to provide on-call general compaction testing and special inspection services for various Capital Improvement Program Projects with Engeo, Inc. in the amount of $750,000 for a three year term.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety
Maintaining and Enhancing Infrastructure
2024-2025 Strategic Priorities
Fiscal Sustainability
Guiding Documents
Bikeways, Trails, and Recreation Master Plan
Morgan Hill 2035 General Plan
Public Safety Master Plan
Storm Drain Master Plan
Water System Master Plan
Wastewater System Master Plan
REPORT NARRATIVE:

Through a Request for Proposal (RFP) process to provide compaction testing services and special inspections on an as-needed basis for the City's CIP projects, eight proposals were received on May 9, 2025 and three firms were selected based on their expertise and familiarity with the City of Morgan Hill for this work. On June 18, 2025, the City Council approved consultant agreements with two firms (Achievement Engineering Corporation and Twining, Inc.) in the amount of $750,000 each for on-call general compaction testing and special inspection services for various Capital Improvement Program Projects.

6 The third selected firm, Engeo, Inc., was in discussion with the City Attorney's office on contract requirements to agree to the execution of the contract. This issue has been resolved. Staff is recommending the execution of the agreement with Engeo, Inc. in the amount of $750,000 for a three-year term starting July 1, 2025 through June 30, 2028.

COMMUNITY ENGAGEMENT:

Compaction testing and special inspections for various Capital Improvement Program Projects are a necessary part of any construction project for oversight and compliance.

Each individual Capital Improvement Project that affects businesses and residents will be notified through media, social media, and City website.

ALTERNATIVE ACTIONS:

City Council may limit the approval of this agreement or direct staff to perform another RFP for this service.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

On June 19, 2024, the City Council adopted the FY2024-25 through 2029-30 Capital Improvement Program Budget.

On June 18, 2025, the City Council approved consultant agreements with Achievement Engineering Corporation and Twining, Inc. in the amount of $750,000 each for on-call general compaction testing and special inspection services for various Capital Improvement Program Projects.

FISCAL AND RESOURCE IMPACT:

Funding for these agreements will be from various Capital Improvement Projects as included in the adopted Capital Improvement Program Budget.

CEQA (California Environmental Quality Act):

Not a Project
The agreements are not considered projects and any individual projects in the Capital Improvement Program shall be reviewed under CEQA

7 CITY COUNCIL STAFF REPORT
MEETING DATE: August 20, 2025
PREPARED BY:

Chris Ghione, Public Services Director
APPROVED BY: City Manager
APPROVE THE FY 2025-26 WORK PLANS FOR THE LIBRARY,

CULTURE AND ARTS COMMISSION AND THE PARKS AND

RECREATION COMMISSION

RECOMMENDATION(S)
Review and approve the FY 2025-26 Work Plans for the Library, Culture and Arts Commission and the Parks and Recreation Commission.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Protecting the Environment and Preserving Open Space and Agricultural Land Maintaining and Enhancing Infrastructure
Supporting our Youth, Seniors, and Entire Community
Preserving our Community History
Enhancing Diversity and Inclusiveness
2024-2025 Strategic Priorities
Community Engagement
Economic Development and Tourism
Healthy Community
Guiding Documents
Bikeways, Trails, and Recreation Master Plan
REPORT NARRATIVE:

Annually, the Library, Culture and Arts Commission (LCAC) and the Parks and Recreation Commission (PRC) submit Work Plans for approval by the City Council.

After approval by the Council, the commissions use these Work Plans to guide their work over the next year. City staff believe that the Work Plans of the PRC and the LCAC can be supported with a moderate impact on staff resources. As has been the case for many years, staff support to these commissions is minimal, resulting in many commissioners volunteering to take on much of the legwork associated with the specific Work Plan items.

Both Commissions' Work Plans include items carried forward from previous fiscal years, as well as eliminated items from past years, and added a limited number of new items.

7 The carry-forward items are due to limitations on available City staff resources and aggressive Work Plan items established by the Commissions. Some items are also multi-year in nature.

COMMUNITY ENGAGEMENT:

Consult
The development of the Work Plans occurred at noticed public meetings of the PRC and the LCAC. Specific Work Plan items will include appropriate public engagement.

ALTERNATIVE ACTIONS:

The Council could alternatively modify a Commission’s Work Plan to eliminate, add, or change specific items within a Work Plan.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The Council approved the FY 24/25 Work Plans on November 11, 2024. The PRC finalized its draft Work Plan on July 15, 2025 and the LCAC finalized its Work Plan on August 6, 2025.

FISCAL AND RESOURCE IMPACT:

There is no direct fiscal impact associated with the approval of the Commission Work Plans. Each Work Plan identifies the estimated staff resources necessary to support the specific Work Plan items. Supporting the LCAC and PRC is an ongoing activity for the Public Services Department.

CEQA (California Environmental Quality Act):

Not a Project
Development of Commission Work Plans is an administrative activity of government that will not result in direct or indirect physical changes in the environment. While some projects on the Work Plans may result in changes to the physical environment, those projects would undergo appropriate environmental review on a project by project basis to meet CEQA requirements.

Parks & Recreation Commission
FY 2025-26 Work Plan – Draft For Council 7.15.25
Project City Council
Priority
Supported
Staff Resources
Required
Desired Outcome
(Commissioner Responsible)

1. Motivate the next
generation to get more
active in Parks and
Recreation
Supporting Our Youth, Seniors
& Entire Community
Recreation
Manager
(Minimal)

1. Review program opportunities for new youth
programming. (Maniar/Vittal/Chabra)

2. Work with City staff to review opportunities to more formally include youth (YAC and other youth) in park
planning. (Vittal/Lucido)

2. Support bicycle and
trails development
efforts
Supporting Our Youth, Seniors
& Entire Community
PS Director
(Minimal)
Work to coordinate with community members on
bicycle and trails issues with volunteer Bicycle and
Pedestrian Advocacy Group. (Zargar)

3. Support the Morgan
Hill Magical Bridge
ongoing operations
Supporting Our Youth, Seniors
& Entire Community
Recreation
Supervisor and
Coordinator
(Moderate)
Support and enhance the ongoing volunteer and
ambassador efforts at the Morgan Hill Magical Bridge
Playground, including a youth volunteer program.
(Vittal/Maniar/Chabra)

4. Support City in grant
opportunities
Supporting Our Youth, Seniors
& Entire Community
Fiscal Sustainability
PS Director
(Moderate)
Mngt Analyst
(Moderate)
Support City staff in identifying and evaluating grant
opportunities and associated projects.
(Maniar/Zargar/Chabra)

5. Increase volunteer
Adopt a Park Program
participation
Supporting Our Youth, Seniors
& Entire Community
Fiscal Sustainability
PS Director
(Minimal)
CS Supervisor
(Minimal)
Support efforts to identify volunteers for tree
establishment watering. (Zargar/Moniz)

Project City Council
Priority
Supported
Staff Resources
Required
Desired Outcome
(Commissioner Responsible)

6. Support City park
planning efforts
Supporting Our Youth, Seniors
& Entire Community
PS Director
(Significant)

1. Commence Parks and Recreation Master Plan
update. (All)

2. Evaluate future opportunities for parkland acquisition and development. (van Keulen)

3. Research opportunities for the creation of additional dog parks in existing or new park spaces. (Moniz)

4. Review options for the future of the Community Park
Pond. (All)

5. Review and provide recommendations to the City
Council on adding restrooms to existing parks,
including Diana, Nordstrom and Paradise. (van
Keulen/Moniz)

7. Support the Annual
Open Streets Event
Supporting Our Youth, Seniors
& Entire Community
PS Director
(Minimal)
CS Supervisor
(Moderate)
Support the planning and implementation of the annual
Open Streets Event in coordination with health and
wellness community resource fair.
(Moniz/Vittal/Chabra/Lucido)

8. Explore Park and
Outdoor Recreation
Activation Opportunities
Supporting Our Youth, Seniors
& Entire Community
PS Director
(Minimal)
CS Supervisor
(Minimal)
Recreation
Manager
(Minimal)
Recreation
Coordinator
(Moderate)

1. Explore the opportunity to develop and implement an
“Art in the Park” event, program or improvement.
(Moniz/Chabra)

2. Review the opportunity to implement free fitness
opportunities in parks in partnership with local fitness advocates. (Zargar)

3. Review the potential to organize social events with
DJs and encourage families to picnic at the park for
a chance for communal gatherings with sports and
activities. (Zargar/Chabra)

4. Review opportunity to implement outdoor education
workshop sessions for seniors. (Chabra)

9. Support Community
Organizations related to
Parks and Recreation
Supporting Our Youth, Seniors
& Entire Community
PS Director
(Minimal)
Identify and implement recognition opportunities for
non-profit organizations. (Vittal/Chabra)
Staff Resources Required: 0-50 hours = Minimal 51-100 hours = Moderate 100+ hours = Significant

Library, Culture & Arts Commission
FY 2025-2026 Work Plan
Draft for Council 8.6.25
Overall Mission: To assist the City Council in accomplishing its goals by fostering an environment conducive to and supportive of the arts, culture, and life-long learning in Morgan Hill, working with existing community groups to promote resources, and facilitate partnerships.

Project Area City Council
Goal Supported
Staff Resources
Required
Specific Task /
Commissioners Assigned
Project Area 1
Community
Outreach
Supporting our Youth, Seniors,
and Entire Community
Enhancing Diversity and
Inclusiveness
Community Outreach,
Engagement, and Messaging
PS Director
(minimal)
CS Supervisor
(moderate)
(1.a) Participate with other groups to support community outreach and support arts and culture in the community (including, Cura Contemporary, Colibri, El Toro Arts, SV Creates, Poppy Jasper International Film Festival, Morgan Hill Diwali Festival, Coyote Creek Music Festival, SJMA Let’s Look at Art, Movimiento de Arte y Cultura Latino Americana, Juneteenth, Kwanzaa, Caribbean Meet and Greet, South Valley Civic Theater) (All)
(1.b) Support arts programming in conjunction with the Morgan Hill Magical Bridge Playground (All)
(1.c) Use social media for promotion of Commission initiatives, cultural activities and announcements (Ganapathy/Carrillo) (1.d) Develop outreach program to the Latinx community through art programming (Santiago/Lyn)
(1.e) Continue open art studio program (physical)
(Blanton/Ganapathy)
(1.f) Explore opportunities for youth engagement in arts through tabling at events with youth (Ganapathy/Rose)
(1.g) Support the "Morgan Hill Stands United Against
Hate/Morgan Hill Cares" campaign (Ganapathy/Blanton)
(1.h) Monitor and support use of Prop 28 – Arts and Music in Schools (Carrillo/Ganapathy)
Project Area 2
Art and Culture
Events
Supporting our Youth, Seniors,
and Entire Community
Enhancing Diversity and
Inclusiveness
PS Director
(minimal)
Rec Manager
(minimal)
CS Supervisors
(minimal)
(2.a) Support City Staff in producing the Art a la Carte event (All) (2.b) Evaluate implementing a Fine Arts Fair/Festival in 2027.

Project Area City Council
Goal Supported
Staff Resources
Required
Specific Task /
Commissioners Assigned
Project Area 3
Permanent and
Proposed Public
Art
Supporting our Youth, Seniors,
and Entire Community
Enhancing Diversity and
Inclusiveness
PS Director
(moderate)
Maintenance
Manager
(minimal)
(3.a) Complete an Art Master Plan
(Santiago/Ganapathy are Leads, All Support)
(3.b) Review art inventory and public art webpage annually (Lyn/Ganapathy/Rose/Carrillo)
(3.c) Review and recommend a plan for the use of Public Arts Funds (All)
(3.d) Creating an artist registry (Lyn/Santiago)
(3.e) Explore creation of digital artwork brochure (Carrillo) (3.f) Continue implementation of the utility box art program (Program: Ganapathy/Blanton/Lyn) (Sponsorship: Carillo) (Inventory of Sites: Fiorenza)
(3.g) Form subcommittees as needed to support specific art requests that come forward (All)
Project Area 4
Library Outreach
and Support
Supporting our Youth, Seniors,
and Entire Community
Enhancing Diversity and
Inclusiveness
Library Staff
(minimal)
(4.a) Support Library outreach and advocacy as needed (All) (4.b) Participate in annual Library Commissioners Forum (All) (4.c) Support Children’s art show at the Library (Blanton/Carrillo) (4.d) Support Adaptive programming (Rose/Carrillo)
(4.e) Support Storywalk
Project Area 5
Support of
Historical
Resources
Preserving our Community History PS Director
(minimal)
(5.a) Support outreach and advocacy for the Historical Society as needed (Santiago/Carrillo)
Staff Resources Required:
0-30 hours: Minimal; 31-60 hours: Moderate; 60+ hours: Significant Future Potential Items (Parking Lot)
1) Explore other opportunities for Library art contests in other media (examples: poetry, photography, literature). 2) Implement second annual International Celebration utilizing entertainment and food from various cultures 3) Explore opportunities for the Commission to support the Morgan Hill Historical Society partnership, including supporting the Black History Project
4) Explore public art related to a homelessness outreach mural (Santiago) 5) Partner with artist to complete a community mural (Santiago/Blanton/Ganapathy) 6) Update identified potential art locations annually after completion of the public Art Master Plan.

8 CITY COUNCIL STAFF REPORT
MEETING DATE: August 20, 2025
PREPARED BY:

Cynthia Iwanaga, Management Analyst
APPROVED BY: City Manager

APPROVE SECOND AMENDMENT TO THE MAINTENANCE SERVICE
AGREEMENT WITH ENVIRONMENTAL SYSTEMS, INC. TO INCREASE
THE NOT TO EXCEED AMOUNT BY $2,500,000 FOR A TOTAL
AGREEMENT AMOUNT OF $3,762,944 FOR THE REPAIR AND

REPLACEMENT OF SIGNIFICANT CITY HEATING VENTILATION AND

COOLING COMPONENTS WITHIN THE CITY'S BUILDINGS

RECOMMENDATION(S)

1. Approve the Second Amendment to the Maintenance Service Agreement with Environmental Systems, Inc. for $2,500,000, for a total agreement amount of $3,762,944;

2. Authorize the City Manager to execute and administer the Second Amendment to the Maintenance Service Agreement with Environmental Systems, Inc.;

3. Authorize the City Manager to extend the term of the Agreement with Environmental Systems, Inc. for up to an additional one-year term; and

4. Adopt a resolution appropriating $1.4 million in Building Replacement Fund (741).

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Maintaining and Enhancing Infrastructure
2024-2025 Strategic Priorities
Fiscal Sustainability
REPORT NARRATIVE:

The purpose of this report is to provide the City Council with an opportunity to consider a Second Amendment to the City's Maintenance Service Agreement with Environmental Systems, Inc. (ESI, Inc.) for heating, ventilation, and air conditioning (HVAC) maintenance and repairs. If approved, the Second Amendment will extend the term of the Agreement by two years, and authorize the City Manager to extend the term for an additional one-year term. The Second Amendment will increase the total amount of the Agreement by $2,500,000, from $1,262,944 to $3,762,944.

8 This amendment is proposed to extend service and to support significant repairs and replacements to aging HVAC infrastructure at City Buildings. Over the first year of the HVAC contract, ESI was required to complete assessments of City HVAC infrastructure at all City buildings. After completion of these assessments, City staff worked to identify the largest areas of immediate need for replacement. These replacements include the largest units at the Centennial Recreation Center (CRC) and the units serving the Police Department (PD). The CRC HVAC components are over 19 years of age and the PD units are over 21 years of age. The amendment will include funds to replace these units over the next year, which will support increased energy efficiency and cost savings at the facilities as well as ensuring continued service without interruption. In addition to the very large replacements at the CRC and PD, small replacements at the Aquatics Center (AC) and Community and Cultural Center (CCC) are also needed.

The City has long contracted with HVAC contractors to maintain heating, ventilation, and air conditioning systems at City facilities. The original amount of the ESI Inc's agreement was $662,944 for a two-year term from November 1, 2023 to October 31, 2025. The First Amendment added $600,000 to the agreement for additional on-call repair services, and increased the amount of the agreement to $1,262,944. This Second Amendment for the two-year period from November 1, 2025 to October 31, 2027, will allocate $100,884 to scheduled services and $2,399,116 for on-call repair and replacement services for a total increase of $2,500,000 to the agreement amount via this Second Amendment. A number of the City's HVAC units are aging and in need of repair and/or replacement. The scope of this amendment includes quarterly and annual preventative maintenance at 12 City facilities, unanticipated repairs, and potential replacement of HVAC units at the CRC, AC, PD, and CCC with more energy-efficient electrical systems. These systems are all at or nearing end of life and will need replacement over the next year.

COMMUNITY ENGAGEMENT:

Inform
This report serves to inform the community of the proposed second amendment to the agreement with ESI.

ALTERNATIVE ACTIONS:

The City Council could decline to approve the amendment, but this is not recommended. Repair and replacement of HVAC units is essential to ensuring City facilities' heating and cooling systems operate properly at optimal levels for good indoor air quality as well as ensuring continuing energy and cost efficiency of the HVAC systems.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The City Council awarded the original agreement to ESI, Inc. on October 4, 2023, and approved the First Amendment to the agreement on April 24, 2024. The original agreement was awarded through a competitive RFP process conducted in July 2023.

FISCAL AND RESOURCE IMPACT:

8 The additional $2,500,000 will be funded over Fiscal Years 2025-26, 2026-27, and a portion of 2027-28 within various areas of facility maintenance in Fund 741 Building Replacement, General Fund 010, and Building Maintenance Fund 740 to support various buildings. However, the significant replacement costs noted will require a budget amendment to appropriate $1,400,000 from the Building Replacement Fund (741) in FY 2025-26, for the cost of the replacements planned for this year (PD, Aquatics Center, CCC, and CRC). The full $2,500,000 is not required as an additional appropriation, as some funds are already budgeted, and some of the funds will be used in the next year of the contract (Fiscal Year 2026-27).

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 alterations of existing City facilities involving negligible or no expansion of use of those facilities.

1 SECOND AMENDMENT TO AGREEMENT
ENVIRONMENTAL SYSTEMS, INC.

This SECOND AMENDMENT TO AGREEMENT is entered into and becomes effective on ______________________ (Effective Date), by THE CITY OF MORGAN HILL, a municipal corporation, ("CITY") and ENVIRONMENTAL SYSTEMS, INC., a California Corporation ("SERVICE PROVIDER" OR “CONTRACTOR”), hereinafter referred to collectively as the “Parties".

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

1. This Second Amendment to Agreement is entered into pursuant to the action of the Morgan Hill City Council taken on ____________, 2025.

2. The CITY and SERVICE PROVIDER entered into that “Maintenance Service Agreement” made as of October 6, 2023, for services for a maximum compensation of Six Hundred Sixty-Two Thousand Nine Hundred Forty-Four Dollars ($662,944.00) (“MAINTENANCE SERVICE AGREEMENT”). The MAINTENANCE SERVICE AGREEMENT was entered into pursuant to the action of the Morgan Hill City Council taken on October 4, 2023.

3. The CITY and SERVICE PROVIDER entered into a “First Amendment to Agreement” made as of May 5, 2024, under which the maximum compensation under the MAINTENANCE SERVICE AGREEMENT, as amended, was increased to One Million, Two Hundred Sixty-Two Thousand Nine Hundred Forty-Four Dollars ($1,262,944.00). The FIRST AMENDMENT” was entered into pursuant to the action of the Morgan Hill City Council taken on April 24, 2024. The MAINTENANCE SERVICE AGREEMENT and the First Amendment thereto are attached as Exhibit “1” to this Agreement.

AGREEMENT
THE PARTIES MUTUALLY AGREE AS FOLLOWS:

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

A. Paragraph 2 shall be amended and replaced in its entirety by the following:
"2. Term of Agreement. This Agreement shall be effective and cover services rendered from October 6, 2023, until October 31, 2027. The City Manager is authorized to extend the term of this Agreement for a maximum of one one-year extension. Any such extension shall be in writing and signed by both parties to this Agreement."
B. Paragraph 4.1 shall be amended and replaced in its entirety by the following:
"4.1. Amount. Compensation under this Agreement shall not exceed THREE MILLION SEVEN

HUNDRED SIXTY-TWO THOUSAND NINE HUNDRED FORTY-FOUR DOLLARS ($3,762,944).and shall be billed based on the rate and basis set forth in Exhibit “B-1” effective November 1, 2025, that is incorporated herein by this reference. If the City Manager extends the term of this Agreement pursuant to the provisions of Section 2 above, the City Manager shall have the authority to increase the maximum compensation allowed to be paid to SERVICE PROVIDER during that extended term period, so long as City Council has appropriated

2 sufficient funds therefor, the Parties mutually agree to such amount in a writing signed by both Parties to this Agreement and provided further that in no event shall such maximum compensation allowed for the extended term exceed 105% of the maximum compensation allowed to be paid to SERVICE PROVIDER for one year of service during the immediately preceding prior year of service.”
C. Paragraph 3 shall be amended to include the additional services to be performed by SERVICE PROVIDER set forth in Exhibit “A-1" and “A-2” dated Effective November 1, 2025, that is incorporated herein by this reference.

D. Paragraph 4.2. shall be amended to have all references to “Exhibit B” be updated to reference the revised rates and basis set forth in Exhibit “B-1” effective November 1, 2025, that is incorporated herein by this reference.

E. Paragraph 10.2 shall be amended and replaced in its entirety by the following:
“10.2. Without limiting the provisions of Section 10.1 above, each worker performing work under this Agreement shall be paid at a rate not less than the prevailing wage as defined in Sections 1771 and 1774 of the Labor Code. The prevailing wage rates are available online at http://www.dir.ca.gov/dlsr. SERVICE PROVIDER shall post a copy of the applicable prevailing rates at the Worksite.

10.2.1. Pursuant to Labor Code Section 1775, SERVICE PROVIDER and any subcontractor shall forfeit to CITY as a penalty up to two hundred dollars ($200.00) for each calendar day, or portion thereof, for each worker paid less than the applicable prevailing wage rate. SERVICE PROVIDER shall also pay each worker the difference between the applicable prevailing wage rate and the amount actually paid to that worker.

10.2.2. SERVICE PROVIDER must comply with the provisions of Labor Code Sections 1776 and 1812 and all implementing regulations, which are fully incorporated by this reference, including requirements for electronic submission of payroll records.

10.2.3. As applicable, if the Agreement Amount exceeds Thirty Thousand Dollars ($30,000.00), SERVICE PROVIDER 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.

10.2.4. SERVICE PROVIDER must comply with the provisions of Labor Code Section 1815 with respect to payment of overtime.

10.2.5. Under Labor Code Section 1813, SERVICE PROVIDER will forfeit to CITY as a penalty, the sum of Twenty-Five Dollars ($25.00) for each day during which a worker employed by SERVICE PROVIDER 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.” F. Paragraph 13 shall be amended and replaced in its entirety by the following:
“13. Conflict of Interest and Reporting. SERVICE PROVIDER shall at all times avoid conflict of interest or appearance of conflict of interest in performance of this Agreement including, without limitation, complying with California Government Code section 1090 et

3 seq., the California Political Reform Act (California Government Code section 87100 et seq.) and the regulations of the Fair Political Practices Commission concerning disclosure and disqualification (2 California Code of Regulations section 18700 et seq.). SERVICE PROVIDER will further comply and will ensure that its agents and its subcontractors comply, with California Government Code section 84308 (“Levine Act”) and the applicable regulations of the Fair Political Practices Commission concerning campaign disclosure (2 California Code of Regulations sections 18438.1 – 18438.8).”

2. Notice of Security and/or Privacy Incident. If SERVICE PROVIDER, or its subconsultant, suspect, discover or are notified of a data security incident or potential breach of security and/or privacy relating to CITY PII, PHI and/or PCI, SERVICE PROVIDER shall immediately, but in no event later than fortyeight (48) hours from suspicion, discovery, or notification of the incident or potential breach, notify CITY of such incident or potential breach. SERVICE PROVIDER shall, upon CITY’s request, investigate such incident or potential breach, inform the CITY of the results of any such investigation, and assist the CITY in maintaining the confidentiality of such information. In addition to the foregoing, SERVICE PROVIDER shall provide CITY with any assistance necessary to comply with any state and/or federal laws requiring the provision of notice of any privacy incident or security breach with respect to any CITY PII, PHI and/or PCI to the affected or impacted individuals and/or organizations, in addition to any notification to applicable state and federal agencies. SERVICE PROVIDER agrees that it shall reimburse CITY for all expenses, costs, attorneys’ fees, and resulting fines, penalties, and damages associated with such incident, breach, investigation and/or notification.

3. 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.

4. Counterpart Signatures. This Agreement may be signed in multiple counterparts, which shall, when executed by all the Parties, constitute a single binding agreement. ///
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[Signatures on the Next Page]

, V.C. Enfantino
E.L. Enfantino

EXHIBIT A-1 SCOPE OF WORK
Effective November 1, 2025

REVISED ATTACHMENT A

CITY OF MORGAN

HVAC FACILITIES LOCATIONS

HVAC SYSTEMS TO BE MAINTAINED AT THESE LOCATIONS

BUILDING/FACILITY ADDRESS SQUARE

FOOTAGE
Aquatics Center (office area) 16200 Condit Road 5,294
Centennial Recreation Center 171 West Edmundson Avenue 54,000 City Hall 17575 Peak Avenue 13,900
Community and Cultural Center,
Building B and Playhouse 17000 Monterey Road
25,000;
12,000;
5,000
Council Chambers 17555 Peak Avenue 12,104
Friendly Inn 17666 Crest Avenue 3,168
Police Department and Information
Services 16200 Vineyard Boulevard 44,886
Public Works Corporation Yard 100 Edes Court 4,583
The Villas 535 Alkire Avenue 4,500
Butterfield Fire Station 17285 Butterfield Boulevard 6,065 Dunne Hill Fire Station 2100 E. Dunne Avenue
El Toro Fire Station 18300 Old Monterey Road

EXHIBIT A-1 SCOPE OF

WORK ATTACHMENT B

HVAC EQUIPMENT LIST

CITY OF MORGAN HILL HVAC EQUIPMENT LIST

QTY MANUFACTUTER TYPE MODEL/SIZE
Aquatics Center - 16200 Condit Road
1 Elite Heating
Boiler
(Main Bldg.)
Water Boiler EL-399NVWH; 399,000 BTU/HR
1 Trinity
(West Building)
Direct Vent Water
Heater
Model LX200WH
1 Carrier Heater/Air
Conditioner
48HJD005-651
2 (Events Room) Heater/Air
Conditioner
Ductless Units split DX
40QKE048
1 (Kitchen) Air Conditioner
1 (Kitchen) Swamp Cooler
2 (Kitchen) Exhaust Fan
1 Greenheck Cube
480HP-15
Kitchen (Grease
Hood)
1 Greenheck GB161-3Main Locker Room
1 Greenheck
GB0141-3
Team Locker Room
1 Greenheck GB070-4Roof
2 Exhausto RSV
400
Boiler Exhaust Roof
1 Exhausto BSEB
400
Locker Rooms
Centennial Recreation Center – 171 West Edmundson Avenue 1 Trane IntelliPak Air Conditioner (Main
Bldg.) AC-1
SXHFC540745E9BD800100WEOG0000TOY8000;
Voltage 460; HZ 60; 3 Phase
1 Trane Voyager Air Conditioner
(Fitness Room) AC-2
YCH181C4LOCA; Voltage 460; HZ 60; 3 Phase
1 Trane Voyager Air Conditioner (Gym
Room) AC-3
YCH420A4LTOC6DF400000F0H0000; Voltage
460; 60 HZ; 3 Phase 24 VAC/85AMP
1 Energy Labs, Inc. Heater/Air
Conditioner
(Natatorium) IEC-IA
C093228-FHER-L
1 Carrier Heater/Air
Conditioner (Fitness
Expansion)
48PGLMO7-A-60-BB
1 Daikin Air Conditioner (East
Side)
RXS12DVJU

1 Daikin Air Conditioner (West
Side)
RXSO9DVJU
1 Reznor Swamp Cooler
(Kitchen)
RPB-300; MAU, Makeup Unit
2 LAARS Domestic Water
Boiler
PNCVO75ONACK28XN; 749,970 BTU/HR
1 Ajax Water Boiler WRNG-1500; 1,500,000 BTU/HR
1 Sanyo DX Split (Telecom
Room)
KS1251
1 Sanyo DX Split (Satellite
Telecom Room)
KS0951
1 Grennheck Fan (Locker Room) G-180-B; Voltage 460/3/60 1 Grennheck Fan (Toilet) G-131-B; Voltage 115/1/60
1 Grennheck Fan (Kitchen) Cube-360-XP-10; Voltage 460/3/60 1 Grennheck Fan (Pool Equip) G-131-C; Voltage 115/1/60
1 Grennheck Fan (Dishwasher) G-141-B; Voltage 115/1/60
1 Grennheck Fan (Maintenance
Receiving)
G-09-G; Voltage 115/1/60
1 Grennheck Fan (Electrical Room
134)
SQ-100-B; Voltage 115/1/60
1 Grennheck Fan (Electrical Room
123)
SQ-140-C; Voltage 115/1/60
City Hall – 17575 Peak Avenue
2 AC-1 AAON Heater/Air
Conditioner
RN-025-3-0 EB09-EHL; 25 ton; 460 Voltage; 60
HZ; 3 PH
1 Laars Water Boiler
1 CU-1 Mitsubishi Air Conditioner MUY-A17NA
2 EF-1 Exhaust Fan S/N: 11500620 0009 Mark EF
Community and Cultural Center and Playhouse – 17000 Monterey Road 2 McQuay Heater / Air
Conditioner (ACU-1 &
ACU-2)
RDT070C
1 Trane Heater / Air
Conditioner
TCD180B400GA; Electrical Rating 460/60/3; ten
ton unit
1 McQuay Heater / Air
Conditioner (ACU-3)
LCA102S
1 York Heater / Air
Conditioner (ACU-4)
DHH060
1 Raypak Boiler 406L-856L
2 Penn Exhaust Fan FX14B
2 Penn Exhaust Fan FX18BH
1 Carrier Heater/Air
Conditioner
(Playhouse Stage)
48HJD006-541; 50,000 BTU’s/HR
2 Carrier Heater/Air
Conditioner
(Playhouse Main
Auditorium/Lobby)
48HJF008-541; 180,000 BTU’s/HR

3 Mitsubishi Heater/Air
Conditioner
(Playhouse Dressing
Room)
PUGH18CKB; 1 phase unit
4 Exhaust Fans
(Playhouse Dressing
Rooms / Restrooms)
Council Chambers – 17555 Peak Avenue
1 Trane Heater/Air
Conditioner
YCH180B4I0HB; 460 Volt; 60 HZ; 3 PH
1 ARI XB 13 Air Conditioner 2TWB3060A1000AA; 208/230 VAC 1 Sanyo Air Conditioner C1211; Source 115 Volt; 60 HZ; 1 PH 1 Fujitsu Air Conditioner A0V24CL; 208/230 VAC; 60 HZ; 1 PH 1 Trane Heater/Air
Conditioner
YFH180B4L0HB; 460 VAC; 60 HZ; 3 PH
1 Bryant Air Conditioner 661CP060-C
1 Carrier Air Conditioner 38QRR060300; 208/230 VAC; 60 HZ; 1PH 1 Bradford White Water Boiler MII30R6DS13; Capacity 30 gallons; voltage 240; 50/60 HZ
Community and Cultural Center Building B – 17060 Monterey Road 1 Trane Air Conditioner 4 ton
1 Trane Water Boiler 100,000 BTU
1 Trane Heat Pump w/Cooling 5 ton
6 Armstrong Condensing Unit SCU10B60C
3 Armstrong Condensing Unit SCU10B48C
1 First Company Water Heater
Friendly Inn – 17666 Crest Avenue
4 Daikin Heat Pump RXYMQ48MVJU; HP=4; 208 Voltage; 1 PH 2 Daikin Heat Pump RXYMQ36MVJU; HP=3; 208 Voltage; 1 PH 2 Daikin Evaporating AC Coil FXSQ18MVJU; Motor 85W; 208 Voltage; 1 PH 3 Daikin Evaporating AC Coil FXSQ12MVJU; Motor 50W; 208 Voltage; 1 PH 1 Daikin Evaporating AC Coil FXMQ36MVJU; Motor 270W; 208 Voltage; 1 PH 3 Daikin Evaporating AC Coil FXMQ48MVJU; Motor 430W; 208 Voltage; 1 PH 1 Greenheck Exhaust Fan SP-A290; Motor 81W; 115 Voltage; 1 PH 1 Greenheck Exhaust Fan SP-A200; Motor 48W; 115 Voltage; 1 PH 1 Greenheck Exhaust Fan CSP-A110; Motor 51W; 115 Voltage; 1 PH (120 MDF)
Police Department and Information Services - 16200 Vineyard Boulevard 5 Carrier Heater/Air
Conditioner
Weather Master Series; Package Unit;
48HJD008-641; Voltage 460; 3 PH; 60 HZ
2 Carrier Heater/Air
Conditioner
Weather Master Series; Package Unit;
48HJE004-641; Voltage 460; 3 PH; 60 HZ
5 Carrier Heater/Air
Conditioner
Weather Master Series; Package Unit;
48HJE007-641; Voltage 460; 3 PH; 60 HZ
2 Carrier Heater/Air
Conditioner
Weather Master Series; Package Unit;
48HJD012-641; Voltage 460; 3 PH; 60 HZ

1 Carrier Heater/Air
Conditioner
Weather Master Series; Package Unit;
48HJD005-641; Voltage 460; 3 PH; 60 HZ
2 Carrier Heater/Air
Conditioner
Weather Master Series; Package Unit;
48HGD028AC-6; Voltage 460; 3 PH; 60 HZ
1 Fujitsu Air Conditioner
(Server Room)
1 Daikin Air Conditioner 3-ton
1 Reznor Heater Unit FE-75
11 Greenheck Exhaust Fan
Public Works Corporation Yard - 100 Edes Court
1 Trane Heater/Air
Conditioner
YCH180B410HB
1 Bryant Heater/Air
Conditioner
601APX060000AAAG; 208 Voltage; 3 PH; 60 HZ
1 Bryant Heater/Air
Conditioner
601APX036000AAAF; 208 Voltage; 3 PH; 60 HZ
2 A O Smith Water Boiler DEL 15 102; Capacity 15 gallons 1 Rheem/York Mini splitsystem/Heater/Air
Conditioner
H1DA048S25A; 208/230 Voltage; 1 PH; 60 HZ
1 Bradford White Water Boiler M440T6FBN; D/N:-394; Capacity 40 gallons 1 Fujitsu Halcyon
IAQ
Indoor Air Quality/Air
Conditioning Unit
7 Exhaust Fan (Sewer – 1; Community Service Room – 3;
Water Department Room – 3)
The Villas – 535 Alkire Avenue
8 Bard Heat Pump w/Cooling Wall mounted

EXHIBIT A- 1 SCOPE OF WORK

ATTACHMENT C

FILTER LIST
Filters must be replaced with MERV13 filters at all facilities.

CITY OF MORGAN HILL HVAC EQUIPMENT FILTER LIST

FACILITY TYPE CHANGES/YEAR
Aquatics Center - 16200 Condit Road
Disposable
Pleated
Quarterly
Centennial Recreation Center – 171 West Edmundson Avenue Disposable
Pleated
Quarterly
City Hall – 17575 Peak Avenue
Disposable
Pleated
Quarterly
Community and Cultural Center and Playhouse – 17000 Monterey Road Disposable
Pleated
Quarterly
Council Chambers – 17555 Peak Avenue
Disposable
Pleated
Quarterly
Gavilan College Building -17060 Monterey Road
Disposable
Pleated
Quarterly
Friendly Inn – 17666 Crest Avenue
Disposable
Pleated
Quarterly
Public Works Corporation Yard – 100 Edes Court
Disposable
Pleated
Quarterly
Police Department and Information Services-16200 Vineyard Blvd.

Disposable
Pleated
Quarterly
The Villas – 535 Alkire Avenue
Disposable
Pleated
Quarterly
Note: Filter quantities/sizes to be determined during the field review by prospective bidders.

EXHIBIT A- 1 SCOPE OF WORK

ATTACHMENT D

QUARTERLY AND ANNUAL PREVENTATIVE MAINTENANCE SCHEDULE
Quarterly and Annual Preventative Maintenance Services for all facilities will include a check for proper function of all components and systems, and the following:

Rooftop Variable Air Volume Cooling Units:

General
Check for safety hazards.

Check for debris on the roof and around the equipment and remove.

Replace air filters.

Check and set time clocks/EMS schedule.

Check that all equipment panels are secure.

Compressor Section
Check for unusual noise/vibration.

Check oil sight glass level.

Check for visual signs of oil/leaks.

Check suction line temperature.

Check crankcase heater(s).

Check for excessive amp draw and current unbalance.

Check for voltage unbalance.

Condenser Section
Check coil(s) cleanliness/fin condition.

Check for visual signs of oil/leaks.

Check fan bracketing and blades for cracks/damage/distortion.

Check all fans are operational and correct rotation.

Amp all fan motors and compare them to nameplate.

Check that wiring is secure and clear of rotating blades.

Evaporation Section
Check coil(s) cleanliness/fin condition.

Inspect drain pans for cleanliness/standing water.

Check pan tabs and note if replacement is required.

Check drain line for free flow.

Check for visual signs of oil/leaks.

Check TXV bulb secure and insulated.

Check sight glass/moisture indication.

Verify proper hot gas bypass valve operation.

Check motor, drive, and blower for unusual noise/vibration.

Amp motor and compare with nameplate.

Check v-belt(s) and sheaves condition, alignment, and tension.

Lubricate motor bearings (do not over-lubricate!)
Lubricate blower shaft bearings.

Lubricate vane assemblies (bldg. must be unoccupied if using aerosol!) Economizer Section
Check return air/outside air dampers, actuators for free operation.

Lubricate dampers and linkage ball joints.

Verify minimum position properly set.

Lubricate motor bearings (do not over-lubricate!)
Lubricate blower shaft bearings.

Amp motor and compare with nameplate.

Check power exhaust v-belt, sheave, alignment and tension.

Control Panel
Check all contactors and points.

Check for over-heated, burned, or loose wiring/connections.

Check all safety controls.

Check operating controls.

Cycle discharge air controller through all stages; verify unloader operation.

Clean panel and components of dirt and debris.

Rooftop Cooling/Heating Package Units:

General
Check for safety hazards.

Check for debris on roof and around equipment and remove.

Replace air filters.

Check and set time clocks/EMS schedule.

Check that all equipment panels are secure.

Compressor Section
Check for unusual noise/vibration.

Check oil sight-glass level.

Check for visual signs of oil/leaks.

Check suction line temperature.

Check crankcase heater(s).

Check for excessive amp draw and current unbalance.

Check for voltage unbalance.

Condenser Section
Check coil(s) cleanliness/fin condition.

Check for visual signs of oil/leaks.

Check fan bracketing, rain guard and blades for cracks/damage.

Check all fans are operational and correct rotation.

Amp all fan motors and compare them to nameplate.

Check that wiring is secure and clear of rotating blades.

Evaporator Section
Check coil(s) cleanliness/fin condition.

Inspect drain pans for cleanliness/standing water.

Check pan tabs and note if replacement is required.

Check drain line for free flow.

Check for visual signs of oil/leaks.

Check TXV bulb secure and insulated.

Take coil temperature difference (TD) reading.

Check motor, drive and blower for unusual noise/vibration.

Check sight glass/moisture indication.

Check v-belt(s) and sheaves condition, alignment, and tension.

Lubricate motor bearings (do not over-lubricate!)
Lubricate blower shaft bearings.

Amp motor and compare with nameplate.

Gas Heating Section
Inspect heat exchanger from combustion chamber for cracks.

Verify proper operation of combustion blower.

Verify proper lighting sequence.

Inspect burners and combustion chamber cleanliness and condition.

Check pilot and main burner flame quality.

Check for flame roll-out.

Economizer Section
Check return air/outside air dampers, actuators for free operation.

Lubricate dampers and linkage ball joints.

Verify minimum position properly set.

Lubricate blower shaft bearings.

Amp motor and compare with nameplate.

Control Panel
Check all contactors, coils and contacts.

Check for over-heated, burned, or loose wiring/connections.

Check all safety controls.

Check operating controls.

Cycle unit in all modes and check operation.

Clean panel and components of dirt and debris.

Exhaust Fans:

Inspect belts, bearings and motor operation.

Check flow rate for adequacy using flow meter.

Water Boilers:

Open front and rear doors. Clean and vacuum fireside surfaces as required.

Inspect all refractory. Patch and wash coat as required.

Inspect all gasketing on front and rear doors and replace as necessary.

Seal and close front and rear doors properly.

Remove low and auxiliary low water cut off controls, clean and inspect. Then re-install using new gaskets.

Remove plugs in control piping, inspect, clean and re-install.

Replace all hand hole and man hole plates with new gaskets.

Open feedwater tank manway, inspect and clean as required. Replace manway plate with new gasket.

Clean burner and burner pilot.

Check pilot electrode and adjust or replace.

Clean air damper and blower assembly.

Clean motor starter contacts and check operation.

Make necessary adjustments to burner for proper combustion and record all results in service report.

Perform all flame safeguard and safety trip checks and record results in service report.

Check all hand hole plates and man hole plates for leaks at normal operating temperatures and pressures.

Troubleshoot any boiler system problems as requested by on-site personnel.

EXHIBIT A-2
Effective November 1, 2025

ADDITIONS TO SCOPE OF WORK
Additions to Section 4. WORK HOURS:

Butterfield Fire Station Monday – Friday; 8 a.m. – 5 p.m.

Dunne Hill Fire Station Monday – Friday; 8 a.m. – 5 p.m.

El Toro Fire Station Monday – Friday; 8 a.m. – 5 p.m.

EXHIBIT B-1

SCHEDULE OF COMPENSATION RATES

HVAC PREVENTATIVE MAINTENANCE FEES

INCLUDING TRAVEL TIME
Quarterly and Annual Preventative Maintenance of Heating, Ventilating and Air Conditioning (HVAC) Equipment at City Facilities as described in the technical specifications:

Bid Item Description of Bid Item Quarterly
Inspection
Amount
Cost for one (1)
quarterly
inspection
Annual
Inspection
Amount
Cost for one (1)
annual inspection
1 Aquatics Center: Provide HVAC
maintenance (including travel time and all
anticipated costs (filters, etc.)
$ 543.00 $ 543.00
2 Centennial Recreation Center: Provide
y HVAC maintenance (including travel
time and all anticipated costs (filters, etc.)
$1,778.00 $1,778.00
3 City Hall: Provide HVAC maintenance
(including travel time and all anticipated
costs (filters, etc.)
$ 556.00 $ 556.00
4 Community and Cultural Center,
Building B and Playhouse: Provide
HVAC maintenance (including travel time
and all anticipated costs (filters, etc.)
$1,024.00 $1,024.00
5 Council Chamber Building: Provide
HVAC maintenance (including travel time
and all anticipated costs (filters, etc.)
$ 580.00 $ 580.00
6 Friendly Inn: Provide HVAC
maintenance (including travel time and all
anticipated costs (filters, etc.)
$ 550.00 $ 550.00
7 Police Department and Information
Services: Provide HVAC maintenance
(including travel time and all anticipated
costs (filters, etc.)
$1,960.00 $1,960.00
8 Public Works Corporation Yard:

Provide HVAC maintenance (including
travel time and all anticipated costs
(filters, etc.)
$ 335.00 $ 335.00

Bid Item Description of Bid Item Quarterly
Inspection
Amount
Cost for one (1)
quarterly
inspection
Annual
Inspection
Amount
Cost for one (1)
annual inspection
9 The Villas: Provide HVAC maintenance
(including travel time and all anticipated
costs (filters, etc.)
$542.00 $542.00
10 Total Amount for One (1) Quarterly
Inspection for Bid Items #1-#9
(Add Bid Items #1-#9 -Quarterly Inspection
Amount)
$7,868.00
11 Total Amount for Three(3) Quarterly
Inspections for Bid Items #1-#9
(Multiple Bid Item #10 X 3)
$23,604.00
12 Total Amount for One (1) Annual
Inspection for Bid Items #1-#9
(Add Bid Items #1-#9 – Annual Inspection
Amount)
$7.868.00
13 BASE BID TOTAL
For 3 Quarterly Inspections and 1 Annual
Inspection
(Bid Item #11 + Bid Item#12)
$31,472.00

ANNUAL COIL SERVICE
Bid Alternate Item Description of Bid Item Annual Inspection Amount (Per Annual Visit)
1 Annual Coil Cleaning Service $6,500.00
BID ALTERNATE TOTAL $6,500.00

BID SCHEDULE-HOURLY REPAIR RATES
Hourly Rates for Additional Maintenance and Repair of Heating, Ventilating and Air Conditioning (HVAC) Equipment at City Facilities:

MISCELLANEOUS CALL OUT/REPAIR RATES*
a. 8:00 a.m. to 5:00 p.m. $_175.00___/hour
b. 5:00 p.m. to 8:00 a.m. $ 225.00___/hour
c. Weekends & Holidays $_225.00__/hour
*Quantities for Items a., b. & c. cannot be pre-determined, but shall be on an “as needed” basis. A flat travel fee of $50 will be charged for all repair visits.

Item
#: Description
Quarterly
Inspection Amount:

Cost for one (1)
quarterly inspection
Annual Inspection
Amount:

Cost for one (1)
annual inspection
1 Aquatics Center 559.29 559.29
2 Centennial Recreation Ctr. 1,831.34 1,831.34
3 City Hall 572.68 572.68
4 Community and Cultural Center 1,054.72 1,054.72
5 Council Chamber Bldg 597.40 597.40
6 Friendly Inn 566.50 566.50
7 Police Department and Information
Services 2,018.80 2,018.80
8 Corporation Yard 345.05 345.05
9 The Villas 558.26 558.26
10 Dunne Hill Fire Station 495.00 495.00
11 El Toro Fire Station 525.00 525.00
12 Butterfield Fire Station 1,500.00 1,500.00
Total Amount for One (1)
Quarterly Inspection 10,624.04
Total Amount of Three (3)
Quarterly Inspection 31,872.12
Total Amount for One (1) Annual
Inspection 10,624.04
TOTAL COSTS - For 3 quarterly
inspections and 1 annual
inspection
Annual Coil Cleaning Service 7,945.00

TOTAL ANNUAL AMOUNT FOR ESI,
INC. SCHEDULED SERVICES
Breakdown of Revised ESI Agreement Amount including Second Amendment:
42,497
50,442.00
for the period from 11/1/2025 to 10/31/2027
HVAC Maintenance and Repair Services
City of Morgan Hill
Exhibit B-1
Revised Schedule of Compensation
Environmental Systems, Inc.

Amt of Document
Revised Total Amt of
Agreement
Original ESI Agreement
(10/6/23 to 10/31/25) 662,944.00
First Amendment
No Change to Term 600,000.00 1,262,944.00
Second Amendment
(11/01/25 to 10/31/27)
Annual Scheduled Services ($50,442
X 2 yrs = $100,884)
Annual On-Call Repair Services
($1,199.558 X 2 yrs = $2,399,116) 2,500,000.00 3,762,944.00

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7

FIRST AMENDMENT TO AGREEMENT
ENVIRONMENTAL SYSTEMS, INC.

Tr j�;foifiST AMENDMENT TO AGREEMENT is entered into and becomes effective on __________ (Effective Date), by THE CITY OF MORGAN HILL, a municipal corporation, ("CITY") and ENVIRONMENTAL SYSTEMS, INC., a California Corporation ("SERVICE PROVIDER"), hereinafter referred to collectively as the "Parties".

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

1. This First Amendment to Agreement is entered into pursuant to the action of the Morgan Hill City Council taken on April 24, 2024.

2. The CITY and SERVICE PROVIDER entered into that "Maintenance Service Agreement" made as of October 6, 2023, for services for a maximum compensation of Six Hundred Sixty-Two Thousand Nine Hundred Forty-Four Dollars ($662,944.00) ("MAINTENANCE SERVICE AGREEMENT"). The MAINTENANCE SERVICE AGREEMENT is attached as Exhibit "1" to this Agreement.

AGREEMENT
THE PARTIES MUTUALLY AGREE AS FOLLOWS:

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

A. Paragraph 4.1 shall be amended and replaced in its entirety by the following:
"4.1. Amount. Compensation under this Agreement shall not exceed ONE MILLION TWO HUNDRED SIXTY-TWO THOUSAND NINE HUNDRED FORTY-FOUR DOLLARS ($1,262,944.00) and shall be billed based on the rate and basis set forth in Exhibit B."

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

Ill
Ill
Ill
Ill
Ill
Ill
[Signatures on the Next Page]
1 EXHIBIT 1

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7

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

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

ATTEST:
���
DocuSigned by:
iGheUecla�low, Citv Clerk
Date: /b; 202�
APPROVED AS TO FORM:

DocuSigned by:

D IAALl liAfi:i�
aldr�aflk4n4 hW ��irney
Date:
2 CITY OF MORGAN HILL
DocuSigned by:

Cb sti IA .n,, 11,v,A , x
orJsooagT4lll:fner, City Manager
Date: 5/572024
ENVIRONMENTAL SYSTEMS, INC.

By: V- (_ s� i7-c. c...& .....·�o
Title:

Date:

By:
f /''2.-.5id€Yt.-iPrint Name and Title of Signer.

If Corporate: Chairman, President or
Vice President
Title: c....

Pri Name and Title of Signer.

If 'brporate: Secretary, Assistant
Secretary, Chief Financial Officer or
Assistant Treasurer

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 DocuSign Envelope ID: 700E261E-3320-4086-ACD2·8915991DFD78 exhibit 1

MAINTENANCE SERVICE AGREEMENT
Environmental Systems, Inc.

THIS AGREEMENT is entered into and becomes effective on 101612023 (Effective
Date), by and between the CITY OF MORGAN HILL, a municipal corporation, ("CITY"), and Environmental Systems, Inc. a California corporation ("SERVICE PROVIDER") hereinafter referred to collectively as "Parties." In consideration of the promises and the mutual covenants contained in this Agreement, the Parties agree as follows:

1. Citv Authority. This Agreement is entered into pursuant to the action of the Morgan Hill City Council taken on October • ..QL., 2□-1..L

2. Term of Agreement. This Agreement shall cover services rendered from the Effective Date of this Agreement until October 31, 2025 at which time SERVICE PROVIDER'S services shall be completed. The City Manager is authorized to extend the term of this Agreement for a maximum of three one-year extensions. Any such extension shall be in writing and signed by both Parties to this Agreement.

3. Scope of SerYice. The services to be performed by SERVICE PROVIDER shall be full service maintenance and repair of heating, ventilating, and air conditioning (HVAC) equipment at City facilitiies as further described in Exhibit A.

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

4.1. Amount. $662,944.00. Total compensation to SERVICE PROVIDER under this Agreement during its initial term set forth in Section 2 above shall not exceed Soc Hundred Sixty-Two Thousand Nine Hundred Forty- Four dollars for preventative maintenance in the amount of $62,944 and repair costs in an amount not to exceed $600,000 to be performed on an as-needed basis and pre-approved by City Maintenance Staff, and shall be billed based on the rate and basis set forth in Exhibit B. If the City Manager extends the term of this Agreement pursuant to the provisions of Section 2 above, the City Manager shall have the authority to increase the maximum compensation allowed to be paid to SERVICE PROVIDER during that extended term period, so long as City Council has appropriated sufficient funds therefor, the Parties mutually agree to such amount in a writing signed by both Parties to this Agreement and provided further that in no event shall such maximum compensation allowed for each subsequent extended one-year term exceed 105% of the maximum compensation allowed to be paid to SERVICE PROVIDER for one year of service during the immediately preceding prior year of service.

4.2. Billing. SERVICE PROVlDER shall provide CITY with an invoice containing the dated, detailed, and itemized descriptions of all services performed and expenses incurred (if such expenses are reimbursable pursuant to Exhibit B) by SERVICE PROVIDER on a monthly basis unless otherwise specified in Exhibit B. All invoices shall be sent to the CITY addressed to the department head or project manager identified below in Section 14 Notices. Payment will be made to SERVICE PROVIDER within thirty (30) days of receipt of invoice by CITY. Any rate charged shall be prorated where services are interrupted or not provided for any rate period (for example, any monthly rate charge should be prorated when services were interrupted or provided for only. part of the month). For services billed on an hourly rate, the minimum unit of billed time shall not exceed one tenth of one hour. CITY shall pay for services and expenses (if so provided '
1 Updated: May 2023

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 DocuSign Envelope ID: 700E261 E-3320-4086-ACD2-B915991DFD78 in Exhibit B} up to the limit of compensation set forth above, that in the CITY'S judgment were necessary and reasonable. Services for work performed and expenses incurred in excess of the.total compensation set forth in paragraph 4.1 above shall be at no cost to CITY.

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

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

5.2. Temporary Suspension of Services. CITY'S need for services may be suspended due to unforeseeable or unavoidable circumstances beyond its control. Such circumstances include, but are not limited to, earthquake, fire, explosion, flood, or other natural catastrophe; governmental legislation, condemnation, acts, orders, or regulation; war or acts of terrorism; strikes or labor difficulties; and quarantine, epidemic, or pandemic.

CITY shall provide a 5-days' written notice or less under urgent circumstances to temporarily suspend services at specific CITY facilities. CITY reserves the right to request which CITY facilities are to be serviced or not serviced due to unforeseeable or unavoidable circumstances; and the level of service at each CITY facility. Upon suspension, SERVICE PROVIDER shall submit to CITY an itemized statement of services performed for which compensation has not been paid up to the date of the suspension. No further payments will be made for services provided after the date of the suspension. CITY shall provide 5 days' written notice when the circumstances for the suspension of specific facilities' services are removed for SERVICE PROVIDER to commence providing services.

6. Performance of Work. SERVICE PROVIDER represents that it is qualified by virtue of experience, training, education, and expertise to accomplish these services. Services shall be performed by SERVICE PROVIDER in accordance with professional practices in a manner consistent with a level of care, competence and skill exercised by qualified members of SERVICE PROVIDER'S profession. By delivery of completed work, SERVICE PROVIDER certifies that the work conforms to the requirements of this Agreement and all applicable federal, state, and local laws. SERVICE PROVIDER is liable for any property damage caused by SERVICE PROVIDER or its Subcontractors during performance of the services and shall notify the CITY of damage within 24 hours of the occurrence. SERVICE PROVIDER must promptly repair or replace any real or personal property damage, and must promptly restore the property to its original or intended condition. CITY may repair or replace the real or personal property damage if SERVICE PROVIDER fails to do so, and the cost of the repairs or replacement may be deducted or offset from any compensation due to SERVICE PROVIDER.
2 Updated: May 2023

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 DocuSign Envelope ID: 700E261 E-3320-4086-ACD2-B915991 DFD78

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

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

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

8. ,Insurance Requirements. SERVICE PROVIDER shall procure and provide proof of the insurance coverage required by this section in the form of certificates and endorsements. The required insurance must cover the activities of SERVICE PROVIDER, including its subcontractors, employees, and agents, relating to, or arising from, the performance of any work or service under this Agreement, and must remain in full force and effect at all times during the period covered by this Agreement. The coverages may be arranged under a single policy for the full limits required or by a combination of underlying policies with the balance provided by excess or "umbrella" policies, provided each such policy complies with the requirements set forth herein. Any deductibles or self-insured retentions must be declared to and approved by City. SERVICE PROVIDER further understands that CITY reserves the right to modify the insurance requirements set forth herein, with thirty (30) days' notice provided to SERVICE PROVIDER, at any time as deemed necessary to protect the interests of CITY.

8. 1. Insurance Types and Amounts.

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

8.1.2. Automobile Liability. SERVICE PROVIDER shall maintain Automobile Liability covering all owned, non-owned and hired automobiles (if SERVICE PROVIDER does not own automobiles, then SERVICE PROVIDER shall maintain Hired/Nonowned Automobile Liability) against claims and liabilities for personal injury, death, or property damage providing protection in the minimum amount of: (i) one million dollars ($1,000,000.00) combined single limit for any one accident or 3 Updated: May 2023

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 DocuSign Envelope ID: 700E261 E-3320-4086-ACD2-B915991DFD78 occurrence, or (ii) the maximum amount of such insurance available to SERVICE PROVIDER under SERVICE PROVIDER'S combined insurance policies (including any excess or "umbrella" policies), whichever is greater.

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

8.1.4. e2lh,dioo {Environmental) Liabiljty. If the performance of SERVICE PROVIDER'S work or service under this Agreement involves hazardous materials, contaminated soil disposal, and/or a risk of accidental release of fuel oil, chemicals or other toxic gases or hazardous materials, SERVICE PROVIDER shall procure and maintain Pollution Liability covering the SERVICE PROVIDER'S liability for bodily injury, property damage and environmental damage resulting from pollution and related cleanup costs arising out of the work or services to be performed under this Agreement. Coverage shall be provided for both work performed on site, as well as during the transport of hazardous materials. Such coverage shall be in the minimum amount of: (i) one million dollars ($1,000,000.00) for any one accident or occurrence, or (ii) the maximum amount of such insurance available to SERVICE PROVIDER under SERVICE PROVIDER'S combined insurance policies (including any excess or "umbrella" policies), whichever is greater.

8.1.5. Professional Lia,bili�.

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

8.1.5.2. If the performance of SERVICE PROVIDER'S work or service under this Agreement relates to Information Technology or related services (examples include, but are not limited to computer programmers, software designers, hardware engineers, or other systems consultants), SERVICE PROVIDER shall procure and maintain a claims made Errors and Omission liability insurance, including Cyber Liability and Data Breach, in the minimum amount of: (i) one million dollars ($1,000,000.00) each claim, or (ii) the maximum amount of such 4 Updated: May 2023

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 DocuSign Envelope ID: 700E261E-3320-4086-ACD2-8915991DFD78 insurance available to SERVICE PROVIDER under SERVICE PROViDER'S combined insurance policies (including any excess or "umbrella" policies}, whichever is greater.

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

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

8.2.1. Geoeral Liability and pollution liability (when pollution liabiltty appliesJ.

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

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

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

01. 8.2.2. Workers Compensation.

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

8.3. Qualification of Insurers. All insurance required pursuant to this Agreement must be issued by a company licensed and admitted, or otherwise legally authorized to carry out insurance business in the State of California, and each insurer must have a current A.M.

Best's financial strength rating of "A" or better and a financial size rating of "VI I" or better.

8.4. Certificates. SERVICE PROVIDER shall furnish CITY with copies of all certificates as outlined herein, whether new or modified, promptly upon receipt. In the event of a claim or legal action, SERVICE PROVIDER shall promptly furnish CITY of Morgan Hill with copies of all policies outlined herein. No policy subject to SERVICE PROVIDER'S agreement with CITY shall be canceled or materially changed except after thirty (30) 5 Updated: May 2023

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 DocuSign Envelope ID: 700E261E-3320-4086-ACD2-B915991DFD78 days' notice by the insurer to CITY. A "material change" is a change that results in noncompliance with any insurance requirements in this section 8. Certificates, including renewal certificates, may be mailed electronically to [email protected] or delivered to the Certificate Holder address provided herein.

Certificate Holder address:

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

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

10. Compliance with Law.

10.1. SERVICE PROVIDER and its officers, employees, agents, and subcontractors shall comply with all applicable laws, ordinances, administrative regulations, and permitting requirements in carrying out their obligations under this Agreement. SERVICE PROVIDER and its officers, employees, agents, and subcontractors covenant there shall be no discrimination based upon any basis prohibited by State or Federal law, including but not limited to, race, color, creed, religion, gender, marital status, age, sexual orientation, national origin, mental disability, physical disability, medical condition, or ancestry, in any activity pursuant to this Agreement.

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

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

10.4. Compliance with Wage and Hour Laws: SERVICE PROVIDER, and any subcontractor it employs to complete work under this Agreement, shall comply with all applicable federal, state, and local wage and hour laws. Applicable laws may include, but are not limited to, the Federal Fair Labor Standards Act and the California Labor Code. 6 Updated: May 2023

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 DocuSign Envelope ID: 700E261 E-3320-4086-ACD2-B915991 DFD78 Final Judgments, Decisions, and Orders: For purposes of this Section, a "final judgment, decision, or order" refers to one for which all appeals have been exhausted or the time to appeal has expired. Relevant investigatory government agencies include: the federal Department of Labor, the California Division of Labor Standards Enforcement, or any other governmental entity or division tasked with the investigation and enforcement of wage and hour laws.

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

THIS AGREEMENT, SERVICE PROVIDER AFFIRMS THAT IT HAS DISCLOSED ANY

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

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

SERVICE PROVIDER FURTHER AFFIRMS THAT IT OR ITS SUBCONTRACTOR(S)

HAS SATISFIED AND COMPLIED WITH - OR HAS REACHED AGREEMENT WITH

THE CITY REGARDING THE MANNER IN WHICH IT WILL SATISFY - ANY SUCH JUDGMENTS, DECISIONS OR ORDERS.

Judgments or Decisions During Term of Contract: If at any time during the term of this Agreement, a court or investigatory government agency issues a final judgment, decision or order finding that SERVICE PROVIDER or any subcontractor it employs to perform work under this Agreement has violated any applicable wage and hour law, or SERVICE PROVIDER learns of such a judgment, decision, or order that was not previously disclosed, SERVICE PROVIDER shall inform the City Attorney, no more than fifteen (15) days after the judgment, decision or order becomes final or of learning of the final judgment, decision or order. SERVICE PROVIDER and its subcontractors shall promptly satisfy and comply with any such judgment, decision. or order, and shall provide the City Attorney with documentary evidence of compliance with the final judgment, decision, or order within five (5) days of satisfying the final judgment, decision, or order. CITY reserves the right to require SERVICE PROVIDER to enter into an agreement with'CITY regarding the manner in which any such final judgment, decision, or order will be satisfied.

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

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.

11. _Independent Contractor. SERVICE PROVIDER is an independent contractor and not an agent or employee of CITY.
7 Updated: May 2023

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 DocuSign Envelope 10: 700E261 E-3320-4086-ACD2-B915991 OFO78

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

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

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

Address of SERVICE PROVIDER is as follows:

Environmental Systems, Inc.
3353 De La Cruz Blvd.

Santa Clara, CA 95054
Address of CITY is as follows:

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

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

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

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

17. Maintenance of Records.

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

17.2. Access to and Audit of Records. CITY shall have the right to examine, monitor and audit all records, documents, conditions, and activities of SERVICE PROVIDER and its subcontractors related to services under this Agreement. Pursuant to Government Code Section 8546.7, if this Agreement involves the expenditure of public funds in excess of $10,000, the Parties to this Agreement may be subject, at the request of CITY or as part of any audit of CITY, to the· examination and audit of the State Auditor pertaining to 8 Updated: May 2023

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 DocuSign Envelope ID: 700E261E-3320-4086-ACD2-B915991DFD78 matters connected with the performance of this Agreement for a period of three years after final payment under the Agreement.

17.3. Ownership of Work Product. All documents or other information developed or received by SERVICE PROVIDER for work performed under this Agreement shall be the property of CITY. SERVICE PROVIDER shall provide CITY with copies of these items upon demand or upon termination of this Agreement.

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

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

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

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

22. Defense and Indemnification.

22.1. Defense and Indemnification. SERVICE PROVIDER shall, to the fullest extent permitted by law, indemnify, defend and hold harmless CITY, its elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers ("INDEMNITEES") from and against any and all claims, liabilities, expenses, liens, or damages of any nature, including liability for bodily injury, property damage or personal injury, and including reasonable attorneys' fees and expenses, that arise out of, pertain to, or relate to the performance of this Agreement or the failure to comply with any obligations contained in this Agreement by SERVICE PROVIDER, and/or its agents, officers, employees, subcontractors, or independent contractors ("CLAIM").

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

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

22.4. Right to Offset. CITY shall have the right to offset against any compensation due SERVICE PROVIDER under this Agreement any amount due CITY from SERVICE PROVIDER as a result of SERVICE PROVIDER'S failure to pay CITY promptly any indemnification arising under this Section (22) and any amount due CITY from SERVICE PROVIDER arising from SERVICE PROVIDER'S failure either to (i) pay taxes on amounts received pursuant to this Agreement or (ii) comply with applicable workers' compensation laws. 9 Updated: May 2023

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 DocuSign Envelope ID: 700E261 E-3320-4086-ACD2-B915991 DFD78

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

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

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

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

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

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

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

Ill
/II
Signatures are on the following page.
10 Updated: May 2023

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 DocuSign Envelope ID: 700E261 E-3320-4086-ACD2-8915991 DFD78

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

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

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

ATTEST:

Michelle Bi elow
Print Name
Date: 10/9/2023
APPROVED AS TO FORM:
�.AH0m&¥464... rn:::u:�----
Donald A. Larkin
Print Name
Date: 10/5/2023
422478
Contractor's License Number(s) (if applicable)
Expiration Date(s) 5/31/2024
U:\Legal Forms\Consultant Agreements\Ctty Maintenance Service Agreement.Oocx 11 CITY OF MORGAN HILL
Doc�Si�n•d by:
__ u,)sbVia, ThnHY
Christina J. Turner
Print Name
Date: 10/6/2023
ENVIRONMENTAL SYSTEMS, INC. _By:
y:_bi,_7--t.._.d:-�- 7
Date:

By:

V.C. Enfantino - President
Print Name and Title of Signer.

If Corporate: Chairman, President or
Vice President
9/21/23
E . Enfantino - Corp. Sec.
rint Name and Title of Signer.

If Corporate: Secretary, Assistant
Secretary, Chief Financial Officer or
Assistant Treasurer
Date: 9/21/23
1000001175
Contractor's DIR Registration Number(s) (if applicable) Expiration Date(s) __ 6_/_
30_/2_0_2 _4 _______ _
Updated: May 2023

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 DocuSign Envelope ID: 700E261 E-3320-4086-ACD2-B915991 DFD78

EXHIBIT A

SCOPE OF SERVICES
Contractor will provide full-service HVAC maintenance and repair services and administer the duties and responsibilities set forth in this agreement, in compliance with all applicable laws, regulations, policies and procedures.

The work will include the provision of a complete maintenance and management program including, but not limited to the inspection, preventative maintenance, repair, programming and other tasks and services necessary to ensure safe, well maintained HVAC systems providing quality air for City employees and the public. Preventive maintenance and repairs may include, but not be limited to, rooftop variable air volume cooling units, rooftop cooling/heating package units, exhaust fans and water boilers. The successful vendor will be responsible for providing labor, supervision, materials, equipment, transportation, service and the shop facilities necessary to perform high quality work. Vendor will also be responsible for discarding all used materials.
1: SCOPE OF SERVICE
The Contractor shall provide full-service HVAC maintenance and repair services to City Facilities as outlined in this document. Contractor shall retain professional personnel who have successfully and competently provided municipal facility HVAC maintenance and repair services on projects of similar scope and complexity. It shall be the Contractor's responsibility to develop and implement a routine maintenance program to effectively maintain, to the satisfaction of the City representative, all aspects of HVAC systems in City defined facilities.

For the purpose of this contract, routine preventative HVAC maintenance shall be defined as scheduled routine inspection and proactive servicing of HVAC systems so as to facilitate heating/cooling with a minimal downtime. The routine maintenance and all repairs shall be provided in accordance with the highest standards of the industry, skill, workmanship, applicable trade practices, meet warranties and be in conformance with all applicable laws, codes and regulations. The successful Contractor's maintenance program and repairs shall, at a minimum, include but not limited to the specifications outlined herein. 2: SERVICES TO BE PROViDED
It is the Contractor's responsibility to provide an appropriate level of staffing and provide appropriate tools and vehicles necessary to support all facility HVAC maintenance functions during hours of maintenance and for response after normal working hours. Contractor shall maintain the appropriate CSLB Contractor's license and will comply with all other license, insurance and permit requirements of the City, State and Federal governments, as well as all other requirements of the law. HVAC Preventative Maintenance Specifications as described in Attachment D to the Scope of Services.
3: TERM OF SERVICE
The term of the contract will be from November 1, 2023 through October 31, 2025. The contract may be canceled or any portion thereof at any time during the term of service and such cancellations shall be effective upon giving sixty (60) days written notice. The City, at its option, may renew this contract for up to three, one-year periods, beginning on November 1, 12 Updated: May 2023

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 DocuSign Envelope ID: 700E261 E-3320-4086-ACD2-B915991 DFD78 2025. This option will be exercised only if the Contractor has demonstrated superior performance in the provision of HVAC Maintenance and Repair Services to the City.

Pricing applies to the period of November 1, 2023 to October 31, 2025. If the contract is renewed, the annual maximum increase will be tied to the Consumer Price Index (CPI) not to exceed 5%, and allowed for each subsequent year beginning on November 1, 2025. 4: WORK HOURS
Scheduled maintenance and repairs shall typically occur during normal business hours.

Facility business hours are:

Aquatics Center Monday through Friday from 5:00 a.m. to 8:00 p. m., Saturdays from 7:00 a.m. to 12:00 p.m. (summer season to 6:30 p.m.), Sundays 11 :30 a.m. to 6:30 p.m. (summer season only).

Centennial Recreation Center Monday through Friday from 5:00 a.m. to 9:30 p.m., Saturdays from 6:30 a.m. to 5:00 p.m.,
Sundays from 6:30 a.m. to 5:00 p.m.

City Hall Monday through Friday 8:00 a.m. to 5:00 p.m.

Community and Cultural Center Monday through Friday 8:00 a.m. to 5:00 p.m.

Saturday and Sunday 8:00 to 5 :00 p.m.

Community and Cultural Center Building B Monday through Friday 8:00 a.m. to 5:00 p.m.

Friendly Inn Monday through Friday 8:00 a.m. to 5:00 p.m.

Police Department Monday through Friday 8:00 a.m. to 5:30 p.m.

Corporation Yard Monday through Friday 7:00 a.m. to 3:30 p.m.

The Villas Monday through Friday 8:00 a.m. to 5:00 p.m.

Information Services Monday through Friday 8:00 a.m. to 5:00 p.m. 5: SERVICE AVAILABILITY
The Contractor shall have trouble-call service available on a twenty-four hours a day, seven days a week basis with a response time not to exceed the following:

EMERGENCIES ............................ 4-hour response time NON-EMERGENCIES .................. 24-hour response time Time to respond shall start when the City calls the problem into Contractor's designated emergency phone number. Additionally, the Contractor shall provide the ability to respond immediately to situations involving the health and safety of employees and/or the public and the comfort and operational capability of any public meeting space. Routine repairs, service requests or other non-urgent tasks shall be completed by journey level staff within one (1) working day from the date of request by City Representative. Contractor's Inability to respond to emergencies in a timely manner will result in a penalty fee of $100. 13 Updated: May 2023

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 DocuSign Envelope ID: 700E261E-3320-4086-ACD2-B915991DFD78 6: TROUBLE-CALUREPAIR SERVICE
Should the City request the Contractor to correct trouble with HVAC equipment between scheduled preventative maintenance service, the City shall be responslble for labor and travel costs associated therewith. Rates shall be firm for the term of the contract.

The City reserves the right to contract with others for trouble calls and repairs. 7: TRAVEL TIME FOR PREVENTATIVE MAINTENANCE
Travel time is included in the Preventative Maintenance Cost as stated in Contractor's "BID SCHEDULE FOR PREVENTATIVE MAINTENANCE FEES INCLUDING TRAVEL TIME". 8: TRAVEL TIME FOR REPAIRS
A flat travel fee of $50 will be charged for all repair visits. 9: BILLABLE WORK
All work beyond and in addition to the scope of the contract shall be considered billable hours and will require that an estimate for that proposed work be provided to the City Representative for consideration and approval prior to work being completed. The Contractor shall not bill for unnecessary repairs, for repairs that were not completed satisfactorily, for repairs that did not fix an identified problem, or for facility visits that are made by staff unqualified to complete needed repairs.
10: STAFFING, WORKMANSHIP AND QUALITY LEVEL
The Contractor shall provide a staffing level that will provide the desired level of customer service, program support, and HVAC Maintenance and Repair services at designated City facilities. All work shall be performed by journey level staff directly employed and supervised by the Contractor. The Contractor shall provide management and technical supervision through competent supervisors as required. The Contractor shall be responsible for the skills, methods and actions of all employees, Subcontractors and for all work done. The Contractor shall have the knowledge, ability, and technical expertise to remotely monitor, interpret and troubleshoot problems prior to arriving on site utilizing interfaces to any existing or future Energy Management Control System (EMCS), as well as the knowledge, ability, and technical expertise to diagnose and repair components of the EMCS including, but not limited to, sensors, actuators, controllers, man machine interfaces and logic. 11: MAINTENANCE AND REPAIR LOCATIONS
See Attachment A
12: TOOLS AND EQUIPMENT
The Contractor shall furnish and maintain all equipment necessary for properly servicing and maintaining HVAC systems in City buildings. The City of Morgan Hill reserves the right to inspect equipment to be used to perform services under this contract. Any equipment determined to be in poor condition must be replaced immediately, at the Contractor's expense. 14 Updated: May 2023

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 DocuSign Envelope ID: 700E261E-3320-4086-ACD2-8915991DFD78 Failure to provide suitable equipment for carrying out all requirements of this contract may be grounds for termination.
13: PARTS AND MATERIALS
The Contractor shall furnish all parts and materials necessary for properly maintaining and repairing HVAC systems in City buildings. Mark-up on parts and materials may not exceed 10% of Contractor's cost. Invoices must Identify the work performed, cost of labor, parts/materials used, parts/materials cost, and parts/materials mark-up cost. 14: ENERGY MANAGEMENT CONTROL SYSTEM
The Contractor shall interpret and respond to problems and maintenance issues identified by the energy management control systems (EMCS) in place at the Centennial Recreation Center, Community Center and City Hall building. Systems shall be monitored at least weekly, and more frequently when known Issues are present or reported. The Contractor shall strive to share the knowledge of the EMCS functions, and have the ability to assist City maintenance staff become more aware of the issues/problems that the EMCS may be indicating, thus minimizing unnecessary service calls. The Contractor shall have the knowledge, ability, and technical expertise to remotely monitor, interpret and troubleshoot problems prior to arriving on site utilizing interfaces to any existing or future EMCS, as well as the knowledge, ability, and technical expertise to diagnose and repair components of the EMCS including, but not limited to, sensors, actuators, controllers, man machine Interfaces and logic. Existing energy management systems are varied models and manufacturers and are unique to each building.

Contractor must receive authorization from the City Representative before sending staff to respond to EMCS alarms.
15: FIRST SERVICE AT EACH FACILITIY
During the first service at each site the Contractor will make recommendations on repairs or upgrades to systems within 60 days. City Representative will respond to these recommendations within 30 days of receiving them.
16: INSPECTIONS AND REMEDIES
So as to ensure consistent quality of the work being performed, the City Representative will perform periodic Inspections of HVAC systems to ensure compliance with the contract specifications. Inspections may be made by the City at any time to confirm that work performed meets specifications. If corrective work Is required, the City will provide a written list of items and the Contractor shall correct deficiencies as directed. If deficiencies are not corrected in a timely manner, the City may perform the work using others and deduct the cost from the Contractor's payment.
17: DAMAGES
The Contractor will be responsible for all damages to the facility or contents caused by Contractor, their staff or subcontractors during the performance of their duties. 15 Updated: May 2023

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 OocuSign Envelope ID: 700E261 E-3320-4086-ACO2-8915991 DFD78 18: SAFETY & SECURITY
The Contractor and staff shall follow all established safety procedures and shall take special care not to endanger the public in any way. The Contractor is responsible for the security of all doors at the conclusion of work in each room. All exterior doors should remain locked at all times. Interior doors that are found open or unlocked shall be left in the same position/condition in which they were found.
19: EMERGENCY SITUATIONS
For medical or public safety emergencies occurring at the Facilities call 9-1-1. For all building maintenance emergencies (water leaks, etc.) contact the Maintenance Manager or designated staff to report the issue immediately (24-hours/day).
20: REPORTS / INVOICING
All invoices to be submitted with a detailed summary of all work and repairs performed.

Should a repair need to be made over $1,000 a quote will need to be provided to the City maintenance staff before any work can be authorized.
16 Updated: May 2023

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 DocuSign Envelope ID: 700E261 E-3320-4086-ACD2-B915991DFD78

EXHIBIT A-SCOPE OF WORK

ATTACHMENT A

CITY OF MORGAN

HVAC FACILITIES LOCATIONS

HVAC SYSTEMS TO BE MAINTAINED AT THESE LOCATIONS

BUILDING/FACILITY ADDRESS
Aquatics Center (office area) 16200 Condit Road
Centennial Recreation Center 171 West Edmundson Avenue
City Hall 17575 Peak Avenue
Community and Cultural Center, 17000 Monterey Road Building Band Playhouse Council Chambers 17555 Peak Avenue
Friendly Inn 17666 Crest Avenue
Police Department and Information 16200 Vineyard Boulevard Services Public Works Corporation Yard 100 Edes Court
The Villas 535 Alkire Avenue
SQUARE

FOOTAGE
5,294
54,000
13,900
25,000;
12,000;
5,000
12,104
3,168
44,886
4,583
4,500

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 Do cu Sign Envelope ID: 700E261 E-3320-4086-ACD2-B915991 DFD78

EXHIBIT A-SCOPE OF WORK

ATTACHMENT B

HVAC EQUIPMENT LIST

CITY OF MORGAN HILL HVAC EQUIPMENT LIST

QTY I MANUFACTUTER I TYPE I MODEL/SIZE
Aquatics Center • 16200 Condit Road
1 Elite Heating Water Boiler EL-399NVWH; 399,000 BTU/HR Boiler
/Main BfdJ?.I
1 Trinity Direct Vent Water Model LX200WH
(West Buildimd Heater
1 Carrier Heater/Air 48HJDOOS-651
Conditioner
2 (Even" Room) Heater/Air Ductless Units split DX
Conditioner 40QKE048
1 (Kitchen) Air Conditioner
1 (Kitchen) Swamp Cooter
2 (Kitchen) Exhaust Fan
1 Greenheck Cube Kitchen (Grease
480HP-15 Hood)
1 Greenheck GB- Main Locker Room
161-3
1 Green heck Team Locker Room
GB0141-3
1 Greenheck GB- Roof
070-4
2 Exhausto RSV Boiler Exhaust Roof
400
1 Exhausto BSEB Locker Rooms
400
Centennial Recreation Center-171 West Edmundson Avenue
1 Trane lntelfiPa k Air Conditioner (Main SXHFCS4074SE9BD800100WEOGOO00TOY8000; BldR.) AC-1 Voltage 460; HZ 60; 3 Phase
1 Trane Voyager Air Conditioner YCH181C4LOCA; Voltage 460; HZ 60; 3 Phase (Fitness Room) AC-2
1 Trane Voyager Air Conditioner (Gym YCH420A4L TOC6DF400000F0HOO00; Voltage Room) AC-3 460; 60 HZ; 3 Phase 24 VAC/8SAMP
1 Energy Labs, Inc. Heater/Air C093228-FHER-L
Conditioner
(Natatoriuml IEC-IA -
1 Carrier Heater/Air 48PGLMO7-A-60-BB
Conditioner (Fitness
Expansion I
1 Daikin Air Conditioner (East RXS12DVJU
Side)

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 DocuSign Envelope ID: 700E261 E-3320-4086-ACD2-8915991DFD78 1 Daikin Air Conditioner (West RXSO9DVJU
Side)
1 Reznor Swamp Cooler RPB-300; MAU, Makeup Unit
(Kitchen)
2 LAARS Domestic Water PNCVO75ONACK28XN; 749,970 BTU/HR Boiler --
1 Ajax Water Boiler WRNG-1500; 1,500,000 BTU/HR
1 Sanyo DX Split (Telecom KS1251
Room)
1 Sanyo DX Split (Satellite KS0951
Telecom Room)
1 Grennheck Fan (Locker Room) G-180-B; Voltage 460/3/60 1 Grennheck Fan (Toilet) G-131-B; Voltage 115/1/60
1 Grennheck Fan (Kitchen) Cube-360-XP-10; Voltage 460/3/60 1 Grennheck Fan (Pool Equip) G-131-C; Voltage 115/1/60
1 Grennheck Fan (Dishwasher) G-141-B; Voltage 115/1/60
1 Grennheck Fan (Maintenance G-09-G; Voltage 115/1/60
Receiving)
1 Grennheck Fan (Electrical Room SQ-100-B; Voltage 115/1/60 134)
1 Grennheck Fan (Electrical Room SQ-140-C; Voltage 115/1/60 123)
City Hall -17575 Peak Avenue
2 AC-lAAON Heater/Air RN-025-3-0 EB09-EHL; 25 ton; 460 Voltage; 60 Conditioner HZ; 3 PH
1 laars Water Boiler
1 CU-1 Mitsubishi Air Conditioner MUV-A17NA
2 EF-1 Exhaust Fan S/N: 11500620 0009 M·ark EF
Community and Cultural Center and Playhouse -17000 Monterey Road 2 McQuay Heater / Air RDT070C
Conditioner (ACU-1 &
ACU-2)
1 Trane Heater I Air TCD180B400GA; Electrical Rating 460/60/3; ten Conditioner ton unit
1 McQuay Heater / Air LCA102S
Conditioner (ACU-3)
1 York Heater / Air DHH060
' Conditioner (ACU-4)
1 Raypak Boiler 406l-856l
2 Penn Exhaust Fan FX14B
2 Penn Exhaust Fan FX18BH
1 Carrier Heater/Air 48HJD006-541; 50,000 BTU's/HR
Conditioner
(Plavhouse Stage)
2 Carrier Heater/Air 48HJF008-541; 180,000 BTU's/HR
Conditioner
(Playhouse Main
Auditorium/Lobby)

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 DocuSign Envelope ID: 700E261E-3320-4086-ACD2-B915991DFD78 3 Mitsubishi Heater/Air PUGH18CKB; 1 phase unit
Conditioner
(Playhouse Dressing
Room)
4 Exhaust Fans
(Playhouse Dressing
Rooms / Restrooms)
Council Chambers -17555 Peak Avenue
1 Trane Heater/Air YCH180B4I0HB; 460 Volt; 60 HZ; 3 PH
Conditioner
1 ARI XB 13 Air Conditioner 2TWB3060A1000AA; 208/230 VAC 1 Sanyo Air Conditioner C1211; Source 115 Volt; 60 HZ; 1 PH 1 Fujitsu Air Conditioner AOV24CL; 208/230 VAC; 60 HZ; 1 PH 1 Trane Heater/Air YFH180B4LOHB; 460 VAC; 60 HZ; 3 PH
Conditioner
1 Bryant Air Conditioner 661CP060-C
1 carrier Air Conditioner 38QRR060300; 208/230 VAC; 60 HZ; lPH 1 Bradford White Water Boiler Mtl30R6DS13; Capacity 30 gallons; voltage 240; 50/60 HZ
Community and Cultural Center Bullding B -17060 Monterey Road 1 Trane Air Conditioner 4 ton
1 Trane Water Boiler 100,000 BTU
1 Trane Heat Pump w/Cooling 5 ton
6 Armstrong Condensing Unit SCU10B60C
3 Armstrong Condensing Unit SCU10B48C
1 First Company Water Heater
Friendly Inn -17666 Crest Avenue
4 Daikin Heat Pump RXYMQ48MVJU; HP;4; 208 Voltage; 1 PH 2 Daikin Heat Pump RXYMQ36MVJU; HP=3; 208 Voltage; 1 PH 2 Daikin Evaporating AC Coil FXSQ18MVJU; Motor 85W; 208 Voltage; 1 PH 3 Daikin Evaporating AC Coil FXSQ12¥VJU; Motor SOW; 208 Voltage; 1 PH 1 Daikin Evaporating AC Coil FXMQ36MVJU; Motor 270W; 208 Voltage; 1 PH 3 Daikin Evaporating AC Coil FXMQ48MVJU; Motor 430W; 208 Voltage; 1 PH 1 Green heck Exhaust Fan SP-A290; Motor 81W; 115 Voltage; 1 PH 1 Green heck Exhaust Fan SP-A200; Motor 48W; 115 Voltage; 1 PH 1 Green heck Exhaust Fan CSP-AllO; Motor 51W; 115 Voltage; 1 PH (120 MDF)
Police Department and Information Services - 16200 Vineyard Boulevard 5 carrier Heater/Air Weather Master Series; Package Unit; Conditioner 48HJD008-641; Voltage 460; 3 PH; 60 HZ
2 Carrier Heater/Air Weather Master Series; Package Unit; Conditioner 48HJE004-641; Voltage 460; 3 PH; 60 HZ
s Carrier Heater/Air Weather Master Series; Package Unit; Conditioner 48HJE007-641; Voltage 460; 3 PH; 60 HZ
2 Carrier Heater/Air Weather Master Series; Package Unit; Conditioner 48HJD012-641; Voltage 460; 3 PH; 60 HZ

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 DocuSign Envelope ID: 700E261 E-3320-4086-AC 02-8915991 DFD78 1 Carrier Heater/Air Weather Master Series; Package Unit; Conditioner 48HJD00S-641; Voltage 460; 3 PH; 60 HZ
2 Carrier Heater/Air Weather Master Series; Package Unit; Conditioner 48HGD028AC-6; Voltage 460; 3 PH; 60 HZ
1 Fujitsu Air Conditioner
(Server Room)
1 Daikin Air Conditioner 3-ton
1 Reznor Heater Unit FE-75
11 Green heck Exhaust Fan
Public Works Corporation Yard - 100 Edes Court
1 Trane Heater/Air YCH180B410HB
Conditioner
1 Bryant Heater/Air 601APX060000AAAG; 208 Voltage; 3 PH; 60 HZ Conditioner
1 Bryant Heater/Air 601APX036000AAAF; 208 Voltage; 3 PH; 60 HZ Conditioner
2 AO Smith Water Boiler DEL 15 102; Capacity 15 gallons 1 Rheem/York Mini split- HlDA048S2SA; 208/230 Voltage; 1 PH; 60 HZ system/Heater/Air
Conditioner
1 Bradford White Water Boiler M440T6FBN; D/N:-394; Capacity 40 gallons 1 Fujitsu Halcyon Indoor Air Quality/Air
IAQ Conditionin_g Unit -
7 Exhaust Fan (Sewer - l; Community Service Room - 3;
Water Department Room - 3)
The Villas -535 Alkire Avenue
8 I Bard Heat Pump w/Cooling Wall mounted

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 DocuSign Envelope ID: 700E261 E-3320-4086-ACD2-B915991 DFD78

EXHIBIT A- SCOPE OF WORK

ATTACHMENT C

FILTER LIST
Filters must be re laced with MERV13 filters at all facilities.

CITY OF MORGAN HILL HVAC EQUIPMENT FILTER LIST

FACILITY TYPE CHANGES/YEAR
Aquatics Center - 16200 Condit Road
Disposable Quarterly
Pleated
Centennial Recreation Center-171 West Edmundson Avenue
I Disposable Quarterly
Pleated
City Hall-17575 Peak Avenue
Disposable Quarterly
Pleated
Community and Cultural Center and Playhouse-17000 Monterey Road I
Disposable Quarterly
Pleated
Council Chambers-17555 Peak Avenue
I
Disposable Quarterly
Pleated
CCC Building B-17060 Monterey Road
Disposable Quarterly
Pleated
Friendly Inn -17666 Crest Avenue
Disposable Quarterly
Pleated
Public Works Corporation Yard - 100 Edes Court
Disposable Quarterly
Pleated
Police Department and Information Services-16200 Vineyard Blvd.

Disposable Quarterly
Pleated
The Villas -535 Alkire Avenue
I
Disposable Quarterly
Pleated
Note: Filter quantities/sizes to be determined during the field review by prospective bidders.

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 DocuSign Envelope ID: 700E261E-3320-4086-ACD2-B915991DFD78

EXHIBIT A- SCOPE OF WORK

ATTACHMENT D

QUARTERLY AND ANNUAL PREVENTATIVE MAINTENANCE SCHEDULE
Quarterly and Annual Preventative Maintenance Services for all facilities will Include a check for proper function of all components and systems, and the following:

Rooftop Variable Air Volume Cooling Units:

General
Check for safety hazards.

Check for dE1bris on the roof and around the equipment and remove.

Replace air filters.

Check and set time clocks/EMS schedule.

Check that all equipment panels are secure.

Compressor Section
Check for unusual noise/vibration.

Check oil sight glass level.

Check for visual signs of oil/leaks.

Check suction line temperature.

Check crankcase heater(s).

Check for excessive amp draw and current unbalance.

Check for voltage unbalance.

Condenser Section
Check coil(s) cleanliness/fin condition.

Check for visual signs of oil/leaks.

Check fan bracketing and blades for cracks/damage/distortion.

Check all fans are operational and correct rotation.

Amp all fan motors and compare them to nameplate.

Check that wiring is secure and clear of rotaUng blades.

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 DocuSign Envelope ID: 700E261E-3320-4086-ACD2-8915991DFD78 I
Evaporation Section
Check coif(s) cleanliness/fin condition.

Inspect drain pans for cleanliness/standing water.

Check pan tabs and note if replacement is required.

Check drain line for free flow.

Check for visual signs of oil/leaks.

Check TXV bulb secure and insulated.

Check sight glass/moisture indication.

Verify proper hot gas bypass valve operation.

Check motor, drive, and blower for unusual noise/vibration.

Amp motor and compare with nameplate.

Check v-belt(s) and sheaves condition, alignment, and tension.

Lubricate motor bearings (do not over-lubricate!)
Lubricate blower shaft bearings.

Lubricate vane assemblies (bldg. must be unoccupied if using aerosol!) Economizer Section
Check return air/outside air dampers, actuators for free operation.

Lubricate dampers and linkage ball joints.

Verify minimum position properly set.

Lubricate motor bearings (do not over-lubricate!)
Lubricate blower shaft bearings.

Amp motor and compare with nameplate.

Check power exhaust v-belt, sheave, alignment and tension.

Control Panel
Check all contactors and points.

Check for over-heated, burned, or loose wiring/connections.

Check all safety controls.

Check operating controls.

Cycle discharge air con:troller through all stages; verify unloader operation.

Clean panel and components of dirt and debris.

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 DocuSign Envelope ID: 700E261 E-3320-4086-ACD2-B915991 DFD78 Rooftop Cooling/Heating Package Units: l
General
Check for safety hazards.

Check for debris on roof and around equipment and remove.

Replace air filters.

Check and set time clocks/EMS schedule.

Check that all equipment panels are secure.

Compressor Section
Check for unusual noise/vibration.

Check oil sight-glass level.

Check for visual signs of oil/leaks.

Check suction line temperature.

Check crankcase heater(s).

Check for excessive amp draw and current unbalance.

Check for voltage unbalance.

Condenser Section
Check coil(s) cleanliness/fin condition.

Check for visual signs of oil/leaks.

Check fan bracketing, rain guard and blades for cracks/damage.

Check all fans are operational and correct rotation.

Amp all fan motors and compare them to nameplate.

Check that wiring is secure and clear of rotating blades.

Evaporator Section
Check coil(s) cleanliness/fin condition.

Inspect drain pans for cleanliness/standing water.

Check pan tabs and note if replacement is required.

Check drain line for free flow.

Check for visual signs of oil/leaks.

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 DocuSign Envelope 10: 700E261 E-3320-4086-ACD2-B915991 DFD78 [Exhaust Fans:

Inspect belts, bearings and motor operation.

Check flow rate for adequacy using flow meter.
[ Water Boilers:

Open front and rear doors. Clean and vacuum fireside surfaces as required.

Inspect all refractory. Patch and wash coat as required.

Inspect all gasketing on front and rear doors and replace as necessary.

Seal and close front and rear doors properly.

Remove low and auxiliary low water cut off controls, clean and inspect. Then re-install using new gaskets.

Remove plugs in control piping, inspect, clean and re-install.

Replace all hand hole and man hole plates with new gaskets.

Open feedwater tank manway, inspect and clean as required. Replace manway plate with new gasket.

Clean burner and burner pilot.

Check pilot electrode and adjust or replace.

Clean air damper and blower assembly.

Clean motor starter contacts and check operation.

Make necessary adjustments to burner for proper combustion and record all results in service report.

Perform all flame safeguard and safety trip checks and record results in service report.

Check all hand hole plates and man hole plates for leaks at normal operating temperatures and Pressures.

Troubleshoot any boiler system problems as requested by on-site personnel.

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 DocuSign Envelope ID: 700E261 E-3320-4086-ACD2-B915991DFO78 Check TXV bulb secure and insulated.

Take coil temperature difference (TD) reading.

Check motor, drive and blower for unusual noise/vibration.

Check sight glass/moisture indication.

Check v-belt(s) and sheaves condition, alignment, and tension.

Lubricate motor bearings (do not over-lubricate!)
Lubricate blower shaft bearings.

Amp motor and compare with nameplate.

Gas Heating Section
Inspect heat exchanger from combustion chamber for cracks.

Verify proper operation of combustion blower.

Verify proper lighting sequence.

Inspect burners and combustion chamber cleanliness and condition.

Check pilot and main burner flame quality.

Check for flame roll-out.

Economizer Section
Check return air/outside air dampers, actuators for free operation.

Lubricate dampers and linkage ball joints.

Verify minimum position properly set.

Lubricate blower shaft bearings.

Amp motor and compare with nameplate.

Control Panel
Check all contactors, coils and contacts.

Check for over-heated, burned, or loose wiring/connections.

Check all safety controls.

Check operating controls.

Cycle unit in all modes and check operation.

Clean panel and components of dirt and debris.

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 DocuSign Envelope ID: 700E261 E-3320-4086-ACD2-B915991 DFD78 EXHIBIT a.

SCHEDULE OF COMPENSATION RATES

HVAC PREVENTATIVE MAINTENANCE FEES

INCLUDING TRAVEL TIME
Quarterly and Annual Preventative Maintenance of Heating, Ventilating and Air Conditioning (HVAC) Equipment at City Facilities as described in the technlcal specifications:

Bid Item Description of Bid Item Quarterly Annual
Inspection Inspection
Amount Amount
Cost for one (1) Cost for one (1)
quarterly annual inspection
Inspection
1 Aquatics Center: Provide HVAC $ 543.00 $ 543.00
maintenance (including travel time and all
anticipated costs (filters, etc.)
2 Centennial Recreation Center: Provide $1,778.00 $1,778.00 y HVAC maintenance (including travel
time and all anticipated costs (filters, etc.)
3 City Hall: Provide HVAC maintenance
(including travel time and all anticipated $ 556.00 $ 556.00 costs (filters, etc.)
4 Community and Cultural Center, $1,024.00 $1,024.00
Building B and Playhouse: Provide
HVAC maintenance (including travel time
and all anticipated costs (filters, etc.)
5 Council Chamber Building: Provide $ 580.00 $ 580.00
HVAC maintenance (including travel time
and all anticipated costs (filters, etc.)
6 Friendly Inn: Provide HVAC $ 550.00 $ 550.00
maintenance (including travel time and all
anticipated costs (filters, etc.)
7 Police Department and Information $1,960.00 $1,960.00 Services: Provide HVAC maintenance
(including travel time and all anticipated
costs (filters etc.) I
8 Public Works Corporation Yard: $ 335.00 $ 335.00
Provide HVAC maintenance (including
travel time and all anticipated costs
(filters etc.)

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 DocuSign Envelope ID: 700E261 E-3320-4086-ACD2-B915991 DFD78 Bid Item Description of Bid Item Quarterly Annual
Inspection Inspection
Amount Amount
Cost for one (1) Cost for one (1)
quarterly annual inspection
inspection
9 The Villas: Provide HVAC maintenance $542.00 $542.00
(including travel time and all anticipated
costs (filters, etc.)
10 Total Amount for One (1) Quarterly $7,868.00 Inspection for Bid Items #1-#9 (Add Bid Items #1-#9 -Quarterly Inspection
Amount)
11 Total Amount for Three{3) Quarterly $23,604.00 Inspections for Bid Items #1-#9 (Multiple Bid Item #10 X 3)
12 Total Amount for One (1) Annual
Inspection for Bid Items #1-#9 $7.868.00
(Add Bid Items #1-#9 -Annual Inspection
Amount)
13 BASE BID TOTAL
For 3 Quarterly Inspections and 1 Annual
$31,472.00
Inspection
(Bid Item #11 + Bid ltem#12)

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 DocuSign Envelope ID: 700E261 E-3320·4086-ACD2-B915991 DFD78

ANNUAL COIL SERVICE
Bid Alternate Item Description of Bid Item Annual Inspection Amount (Per Annual Visit)
1 Annual Coil Cleaning Service $6,500.00
BID AL TERNA TE TOTAL $6,500.00

BID SCHEDULE-HOURLY REPAIR RA TES
Hourly Rates for Additional Maintenance and Repair of Heating, Ventilating and Air Conditioning (HVAC) Equipment at City Facilities:

MISCELLANEOUS CALL OUT/REPAIR RATES*
a. 8:00 a.m. to 5:00 p.m. $ 175.00 /hour
b. 5:00 p.m. to 8:00 a.m. $ 225.0Q__/hour
c. Weekends & Holidays $ 225.00 /hour
*Quantities for Items a., b. & c. cannot be pre-determined, but shall be on an "as needed" basis. A flat travel fee of $50 will be charged for all repair visits.

DocuSign Envelope ID: 416ED057-85AC-4400-BEA7-57DEFACD41D7 DocuSign Envelope ID: 700E261 E-3320-4086-ACD2-B915991 DFD78

EXHIBITC

SCHEDULE OF PERFORMANCE
Three (3) quarterly preventative maintenance visits to be scheduled with the City Maintenance Manager or designated City maintenance staff.

Annual preventative maintenance visits to be scheduled with the City Maintenance Manager or designated City maintenance staff.

Annual coil cleaning services to be scheduled with the City Maintenance Manager or designated City maintenance staff.

Repairs to be scheduled as needed with City Maintenance Manager or designated City Maintenance staff.
18 Updated: May 2023

RESOLUTION NO. 25-_____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF MORGAN HILL APPROVING AN AMENDMENT TO
THE CITY’S FISCAL YEAR 2025-2026 ADOPTED BUDGET
WHEREAS, the City of Morgan Hill, a municipal corporation and general law city duly organized and existing under and pursuant to the Constitution and laws of the State of California (“City”), is authorized to enter into contracts and agreements for the benefit of the City; and WHEREAS, the reasons supporting this Resolution are set forth in detail in that certain City Council Staff Report entitled “Approve Second Amendment To Maintenance Service Agreement with Environmental Systems, Inc. To Increase The Not To Exceed Amount By $2,500,000 For A Total Agreement Amount Of $3,762,944 For The Repair And Replacement Of Significant City Heating Ventilation And Cooling Components Within The City’s Buildings” submitted for City Council consideration at its meeting of August 20, 2025, submitted to the City Council by the City Manager (the “Staff Report”), the contents of which Staff Report are incorporated herein by this reference; and
WHEREAS, recommended amendments are needed and proposed to the City’s previously adopted Annual Budgets for Fiscal Years 2024-2025 and 2025-2026 as set forth on Exhibit A to this Resolution, to appropriate the requisite funds to implement the actions authorized by this Resolution; and
WHEREAS, the consideration by City Council of the adoption of this Resolution has been duly noticed pursuant to applicable laws and has been placed upon the City Council Meeting Agenda on the date set forth in the Staff Report, or to such date that the City Council may have continued or deferred consideration of this Resolution, and on such date the City Council conducted a duly noticed public meeting at which the City Council provided members of the public an opportunity to comment and be heard and considered any and all testimony and other evidence provided in connection with the adoption of this Resolution; and WHEREAS, the City Council determines that adoption of this Resolution is in the public interest.

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

Section 1. Recitals. The City Council does hereby find, determine and resolve that all of the foregoing recitals are true and correct.

Section 2. Approval and Authorization. The City Council does further resolve, order and/or direct as follows:
a. That the City’s previously adopted Fiscal Years 2024-2025 and 2025-2026 Budgets, as the same has been amended to date, are hereby further amended in

City of Morgan Hill
Resolution No. 24-_____

accordance with and as reflected on Exhibit A attached hereto and incorporated herein by this reference; and
b. That the City Clerk is hereby authorized and directed to forward a copy of this Resolution to the City’s Finance Director, who is hereby authorized and directed to take all actions necessary to implement the terms of this Resolution pertaining to the Fiscal Years 2024-2025 and 2025-2026 Budgets of the City or Morgan Hill.

Section 3. This Resolution shall take effect immediately upon adoption.

PASSED, APPROVED, AND ADOPTED by the City Council of the City of Morgan Hill at its meeting held on this 20th day of August 2025 by the following vote:

AYES: COUNCIL MEMBERS: None
NOES: COUNCIL MEMBERS: None
ABSTAIN: COUNCIL MEMBERS: None
ABSENT: COUNCIL MEMBERS: None
APPROVED: ATTEST:
___________________________________ _______________________________ MARK TURNER, Mayor MICHELLE BIGELOW, City Clerk
 CERTIFICATION 
I, Michelle Bigelow, City Clerk of the City of Morgan Hill, California, do hereby certify that the foregoing is a true and correct copy of Resolution No. 25-_____ adopted by the City Council at the meeting held on the 20th day of August 2025.

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

DATE: _____________________ ___________________________________ MICHELLE BIGELOW, City Clerk

AGENDA BUDGET SCORECARD
FISCAL YEAR 2025‐2026
ADJUSTMENT # 001
FUND: 741 Building Replacement Fund
FUNCTION: 00
DEPARTMENT: 40
DIVISION: 8500
OBJECT: 43820 OTHER IMPROVEMENTS
AGENDA DATE: 08/20/25
AGENDA ITEM TITLE:
07/01/25 07/01/26

UNAUDITED PROJECTED ESTIMATED UNAUDITED PROJECTED
BEGINNING FUND ESTIMATED APPROPRI‐ ENDING FUND

BALANCE REVENUES ATIONS BALANCE
ORIGINAL BUDGET   4,099,824   1,049,288    374,000    4,775,112 CUMULATIVE REVISIONS PRIOR ‐  ‐  ‐  ‐

TO RECOMMENDED ACTION
RECOMMENDED ACTION    ‐    1,400,000    (1,400,000)
RESULT OF RECOMMENDED ACTION   4,099,824   1,049,288   1,774,000    3,375,112

HVAC SERVICE/REPAIR
8/5/2025
Exhibit A

City Council
Meeting Minutes
Mark Turner - Mayor
Yvonne Martínez Beltrán - Mayor Pro Tem
Soraida Iwanaga - Council Member
Marilyn Librers - Council Member
Miriam Vega - Council Member
Wednesday, June 18, 2025
Special meeting at 5:00 p.m. for a Closed Session at the address below:

City Hall, Grand Conference Room 17575 Peak Avenue, Morgan Hill, CA 95037 Regular meeting at 6:00 p.m. at the address below:

Council Chamber Building, West Conference Room 17555 Peak Avenue, Morgan Hill, CA 95037

SPECIAL/REGULAR MEETING
A special meeting of the City Council was called at 5:00 p.m. for the purpose of conducting a closed session.

SPECIAL MEETING
5:00 p.m. Closed Session

CALL TO ORDER
Mayor Turner called the Special City Council meeting to order at 5:00 p.m.

ROLL CALL ATTENDANCE
City Clerk Michelle Bigelow called the roll.

PRESENT Mark Turner, Yvonne Martinez Beltran, Soraida Iwanaga, Marilyn Librers, Miriam Vega
ABSENT None

DECLARATION OF POSTING AGENDA

June 18, 2025
2 City Clerk Michelle Bigelow declared the posting of the agenda.

CLOSED SESSION
Assistant City Attorney Cynthia Hasson announced the closed session item.

CONFERENCE WITH LEGAL COUNSEL-ANTICIPATED LITIGATON
Significant Exposure to Litigation § 54956.9(d)(2)
One case
One potential action involving significant exposure to litigation pursuant to Section 54956.9 (d)(2); facts and circumstances are known under Section 54956.9 (e) (2) - complaint of inappropriate conduct made by Mayor Pro Tem Yvonne Martinez Beltran

OPPORTUNITY FOR PUBLIC COMMENT
Public comment opened at 5:02 p.m. There being no requests to speak, public comment closed.

ADJOURN TO CLOSED SESSION
The special meeting adjourned to closed session at 5:02 p.m.

Mayor Turner and City Manager Turner left the closed session.

Mayor Pro Tem Martinez Beltran arrived at 5:05 p.m. City Manager Turner and Mayor Turner were called back into the closed session.

Mayor Turner, Mayor Pro Tem Martinez Beltran, and City Manager Turner then left the closed session at 5:10 p.m.

REGULAR MEETING
The regular meeting convened at 6:02 p.m.

SILENT INVOCATION

PLEDGE OF ALLEGIANCE

RECOGNITIONS
Malisha Kumar
Sunday Minnich

June 18, 2025
3 PROCLAMATIONS
Juneteenth Proclamation

CITY COUNCIL REPORTS
Mayor Pro Tem Martinez Beltran spoke about the community action event for immigration rights that took place before the meeting. She also spoke about meeting with other elected officials and community leaders on ways to address immigration challenges. She reminded the community that there is AB54 and that the City does not work with federal immigration. She concluded by sharing ways that the community can help.

June 18, 2025
4 CITY MANAGER'S REPORT
City Manager Christina Turner shared the following updates:

July is Parks and Recreation Month!
Celebrate with free, fun activities all month long. Visit mhrecreation.com or the City website for details. Kick things off early at Summer Fun in the Park on Saturday, June 28, 4–7 p.m. at Galvan Park with games, performances, face painting, music, a bounce house, and more! Thanks to the Edward Boss Prado Foundation, the first 200 attendees get free food!
AC/CRC Membership is Climbing!
We’re ending June with our highest membership numbers since the pandemic. Not a member yet? Visit MHCRC.com or stop by the Community & Aquatics Centers.

Summer’s a great time to focus on fitness, wellness, and making new friends.

Morgan Hill Shines!
The Edes/Cura Gallery, designed by KTGY, just won multiple awards in the prestigious 2025 Gold Nugget Awards, including Best Commercial Project. More at openpr.com.

Summer Kickoff with the Bay Area Panthers – June 19
From 4 to 8 p.m. on 3rd Street Downtown, enjoy football fun with the Bay Area Panthers—interactive zone, meet the players, music, giveaways, photo ops, and a local open-air market!
National Night Out – August 5
Join us from 5 to 8 p.m. at the Civic Center Plaza for free kids’ activities, community resources, and a chance to connect with our public safety teams.

Congratulations to Kim Mancera!
We’re proud to share that our very own Deputy City Clerk, Kim Mancera, has been selected as the new City Clerk for the City of Gilroy!
Kim has been an invaluable part of the Morgan Hill team, bringing professionalism, heart, and a deep commitment to public service. While we’ll miss her immensely, we’re thrilled to see her take this well-deserved next step in her career. Gilroy is gaining a truly outstanding public servant.

CITY ATTORNEY'S REPORT
Assistant City Attorney Cynthia Hasson shared that there was no reportable action from the closed session and that the session will be continued to June 25 or the next meeting thereafter.

OTHER REPORTS
Council Member Librers shared that she attended a Good Governance training session put on by the City of Sunnyvale last week. She also chaired her first Habitat meeting.

June 18, 2025
5 Council Member Vega shared that she also attended the Good Governance session.

She mentioned that she also serves on the Habitat Agency Board, and she recently learned that the property she grew up on was purchased for preservation by the Habitat Agency, meaning that it will always remain open space.

Council Member Iwanaga also attended the Good Governance session and shared that it set a good example for those of us who are public servants, and how to work well together. She also shared that she will be taking a tour of the Carpenter's training site tomorrow.

Mayor Turner shared that he recently presented to the Youth Leadership Morgan Hill Program about leadership. He attended the Butterfield Fire Station ribbon cutting last weekend. He also attended a meeting about wildfire mitigation and early prevention discussion in Gilroy. He announced that he is working with volunteers on a project for Christmas 2025 and shared that they will have a float in the 4th of July parade.

PUBLIC COMMENT
Public comment opened at 6:21 p.m.

Krista Rupp was called to speak.

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

ADOPTION OF AGENDA
MOTION:

Adopting the agenda as posted.

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

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

MOTION:

Approving consent calendar items 1 through 10.

June 18, 2025
6 RESULT: Passed
MOVER: Mayor Pro Tem Martinez Beltran
SECONDER: Council Member Vega
AYES: Mayor Turner, Mayor Pro Tem Martinez Beltran, Council Member Iwanaga, Council Member Librers, Council Member Vega
NAYS: None
ABSTAIN: None
ABSENT: None

1. ADOPT RESOLUTION ESTABLISHING THE GANN (PROPOSITION 4) APPROPRIATIONS LIMIT FOR FISCAL YEAR 2025-26
Recommendation:

Adopt Resolution establishing the Gann (Proposition 4) appropriations limit for Fiscal Year 2025-26

2. ADOPT RESOLUTION TO SUPPORT GRANT FUNDING FOR DOWNTOWN

ELECTRIC VEHICLE (EV) CHARGING FROM THE METROPOLITAN

TRANSPORTATION COMMISSION
Recommendation:

Adopt resolution of support for grant funding from the Metropolitan Transportation Commission for Downtown EV Charging in the amount of $1,052,000.

3. APPROVE AMENDMENT TO BURR PLUMBING AND PUMPING, INC. ONCALL MAINTENANCE SERVICE AGREEMENT Recommendation:

Authorize the City Manager to execute a fifth amendment to the maintenance service agreement with Burr Plumbing and Pumping, Inc., extending the term of the agreement to June 30, 2026 and increasing the amount of the agreement to $407,625.

4. APPROVE CONSULTANT AGREEMENTS WITH ACHIEVEMENT
ENGINEERING CORPORATION AND TWINING, INC., IN THE AMOUNT OF $750,000 EACH FOR ON-CALL GENERAL COMPACTION TESTING AND

SPECIAL INSPECTION SERVICES FOR VARIOUS CAPITAL IMPROVEMENT

PROGRAM PROJECTS
Recommendation:

Approve and authorize the City Manager to execute and administer agreements to provide on-call general compaction testing and special inspection services for various Capital Improvement Program Projects with Achievement Engineering Corporation and Twining, Inc. in the amount of $750,000 each for three year

June 18, 2025
7 terms.

5. APPROVE THE JUNE 4, 2025, SPECIAL/REGULAR CITY COUNCIL

MEETING MINUTES
Recommendation:

Approve the June 4, 2025, Special/Regular City Council Meeting Minutes.

6. APPROVE THE PURCHASE OF A 150KW TRAILER-MOUNTED PORTABLE DIESEL GENERATOR IN THE AMOUNT OF $169,150 FROM ECB

SOLUTIONS, LLC
Recommendation:

Approve and authorize the City Manager to execute a purchase order to ECB Solutions, LLC in the amount of $169,150 for the purchase of a 150kw trailermounted portable diesel generator for the Utilities Division.

7. AUTHORIZE THE CITY MANAGER TO EXECUTE AND ADMINISTER A

CONSULTANT SERVICES AGREEMENT WITH BUREAU VERITAS FOR THE

COMPLETION OF AN ADA TRANSITION PLAN UPDATE
Recommendation:

Authorize the City Manager to execute and administer a consultant services agreement with Bureau Veritas for the completion of an ADA Transition Plan Update in the amount of $96,687.

8. AUTHORIZE THE CITY MANAGER TO ENTER INTO A SERVICE

AGREEMENT WITH THE COUNTY OF SANTA CLARA FOR SOUTH COUNTY

YOUTH TASK FORCE FUNDING
Recommendation:

Authorize the City Manager to further negotiate, execute, and administer a service agreement with the Santa Clara County District Attorney's Office to receive and administer grant funding in support of the South County Youth Task Force.

9. AUTHORIZE THE CITY MANAGER TO EXECUTE GRANT AGREEMENTS

WITH SILICON VALLEY CLEAN ENERGY
Recommendation:

Authorize the City Manager to further negotiate, execute, and administer a $1 million decarbonation grant and $100,000 education grant from Silicon Valley Clean Energy.

10. AWARD COUNCIL CHAMBER BUILDING ROOF REPLACEMENT PROJECT Recommendation:

June 18, 2025
8 1. Award contract to Diablo Roofing, Inc. in the amount of $392,200; and

2. Authorize the expenditure of contingency funds in an amount not to exceed $78,440; and

3. Authorize the City Manager to execute and administer the construction contract with Diablo Roofing, Inc.

ITEM PULLED FOR DISCUSSION

11. CONSIDER CITY POSITION ON PENDING STATE LEGISLATION Recommendation:

1. Consider supporting AB 650 (Papan) Planning and zoning: housing element: regional housing needs allocation;

2. Consider opposing SB 79 (Wiener) Housing development: transit-oriented development: California Environmental Quality Act: public transit agency land; and

3. Direct staff to submit letters in support of AB 650 and in opposition of SB 79 to the appropriate representatives.

City Manager Christina Turner provided a report.

Public comment opened at 6:30 p.m.

Armando Benavides was called to speak.

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

MOTION:

Approving the recommended actions.

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

OTHER BUSINESS

12. ADOPTION OF A RESOLUTION APPROVING AN EXCEPTION TO THE

June 18, 2025
9 CALIFORNIA PUBLIC EMPLOYEES RETIREMENT SYSTEM (CALPERS) 180-

DAY WAITING PERIOD TO HIRE DONALD LARKIN AS A RETIRED

ANNUITANT CITY ATTORNEY, APPROVAL OF CONTRACT WITH BURKE

WILLIAMS & SORENSEN, LLP FOR CITY ATTORNEY CONTRACT

SERVICES AND ELECTED OFFICIALS AND COUNCIL APPOINTED SALARY

SCHEDULE
Recommendation:

1. Adopt resolution approving an exception to the 180-day waiting period, set forth by CalPERS, to hire Donald Larkin as a retired annuitant City Attorney;

2. Approve contract with Burke Williams & Sorensen, LLP for Donald Larkin to perform City Attorney contract services; and

3. Approve Elected Officials and Council Appointed salary schedule.

Human Resources Director Michael Horta provided a report.

Public comment opened at 6:54 p.m. The following people were called to speak:

Armando Benavides
Sally Casas
There being no further requests to speak, public comment closed.

MOTION:

Approving the recommended actions.

RESULT: Passed
MOVER: Council Member Librers
SECONDER: Mayor Pro Tem Martinez Beltran
AYES: Mayor Turner, Mayor Pro Tem Martinez Beltran, Council Member Iwanaga, Council Member Librers, Council Member Vega
NAYS: None
ABSTAIN: None
ABSENT: None
The meeting recessed at 7:04 p.m. and reconvened at 7:15 p.m.

13. APPROVE COMMUNITY FUNDING LEVELS FOR FISCAL YEAR 2025-26

FOR THE REMAINING APPLICATIONS AND RECEIVE COUNCIL DIRECTION

TO REVIEW SERVICE PRIORITIES, EVALUATE POTENTIAL REVENUE

MEASURES, AND CONDUCT COMMUNITY ENGAGEMENT
Recommendation:

1. Approve funding levels for FY2025-26 Community Funding for the

June 18, 2025
10 remaining Applications;

2. Provide direction on timing for future Community Funding Application Review;

3. Provide direction on any policy updates to the Community Funding Policy as desired by the City Council; and

4. Receive Council direction to review service priorities, evaluate potential revenue measures, and conduct Community Engagement.

City Manager Christina Turner provided a report and presentation. Finance Director Dat Nguyen and Public Services Director Chris Ghione answered questions.

Public comment opened at 7:47 p.m. The following people were called to speak:

Suman Ganapathy
Mattie Scariot
Armando Benavides
Ernesto G.

Efrain Antonio
Kathy Sullivan
There being no further requests to speak, public comment closed.

MOTION:

Approving funding the remaining 14 applications at the FY24-25 funding levels, directing that community funding applications and details will be included in the Budget Development or Mid-Cycle Budget Review process with a minimum of 60 days before the new fiscal year, whichever is earlier; discussing community funding policy updates when they come before the Council following the same timing as the applications and details; and directing staff to review service priorities, evaluate potential revenue measures, and conduct community engagement in the fall.

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

PUBLIC HEARINGS

14. ADOPT RESOLUTION ORDERING ANNUAL ASSESSMENTS AND RELATED

ACTIONS FOR CITY OF MORGAN HILL LANDSCAPE ASSESSMENT
DISTRICT NUMBER 1 (DISTRICT)
Recommendation:

June 18, 2025
11 1. Open and close the public hearing; and

2. Adopt resolution confirming Fiscal Year (FY) 2025-26 annual assessments and ordering the levy of assessments for the District.

Council Member Iwanaga and Assistant City Attorney Cynthia Hasson recused themselves due to a conflict of interest and stepped away from the dais.

Maintenance Manager Keri Russell provided a report.

The public hearing opened at 8:18 p.m. There being no requests to speak, the public hearing closed.

MOTION:

Approving the recommended actions.

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

15. AUTHORIZE A CHANGE ORDER FOR THE ENERGY SERVICES CONTRACT WITH SYSERCO ENERGY SOLUTIONS, INC. TO THE CITYWIDE SOLAR

SYSTEMS PROJECT FOR THE REPAIR OF THE CENTENNIAL

RECREATION CENTER (CRC) SOLAR SYSTEM IN THE AMOUNT OF
$243,600
Recommendation:

1. Open and close the Public Hearing;

2. Authorize a Change Order for the repair of the CRC at a cost of $243,600;

3. Adopt a resolution appropriating $243,600 from the Building Replacement Fund (741); and

4. Adopt a resolution making findings in compliance with California Government Code Section 4217.12 on Energy Conservation Contracts.

Public Services Director Chris Ghione provided a report.

The public hearing opened at 8:22 p.m. There being no requests to speak, the

June 18, 2025
12 public hearing closed.

MOTION:

Approving the recommended actions.

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

FUTURE COUNCIL INITIATED AGENDA ITEMS
Mayor Pro Tem Martinez Beltran requested an item related to immigration, seeking City support for “Know Your Rights” education efforts, City support for funds to assist individuals facing immigration challenges, and the role of local law enforcement as a stopgap resource.

Mayor Pro Tem Martinez Beltran requested a discussion on tobacco locations throughout the city.

ADJOURNMENT
There being no further business, Mayor Turner adjourned the meeting at 8:23 p.m.

Minutes Prepared by:

Michelle Bigelow, City Clerk

City Council
Meeting Minutes
Mark Turner - Mayor
Yvonne Martínez Beltrán - Mayor Pro Tem
Soraida Iwanaga - Council Member
Marilyn Librers - Council Member
Miriam Vega - Council Member
Wednesday, June 25, 2025
6:00 p.m.

Council Chamber - West Conference Room
17555 Peak Avenue, Morgan Hill, CA 95037
**Please note: The only item on this agenda is a continuation of a previous closed session item. There will be no regular open session items discussed or considered.**

CALL TO ORDER
The meeting was called to order at 6:00 p.m.

ROLL CALL ATTENDANCE
City Clerk Michelle Bigelow called the roll.

PRESENT Yvonne Martinez Beltran, Soraida Iwanaga, Marilyn Librers, Miriam Vega
EXCUSED Mark Turner

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

PUBLIC COMMENT
Public comment for items not on the agenda opened at 6:01 p.m.

Brian Sullivan was called to speak.

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

June 25, 2025
2 CONTINUED CLOSED SESSION
Assistant City Attorney Hasson read the closed session into the record.

The meeting adjourned to closed session at 6:02 p.m.

Mayor Pro Tem Martinez Beltran left the closed session.

CONFERENCE WITH LEGAL COUNSEL-ANTICIPATED LITIGATON
Significant Exposure to Litigation § 54956.9(d)(2)
One case
One potential action involving significant exposure to litigation pursuant to Section 54956.9 (d)(2); facts and circumstances are known under Section 54956.9 (e) (2) - complaint of inappropriate conduct made by Mayor Pro Tem Yvonne Martinez Beltran

ADJOURNMENT
Assistant City Attorney Cynthia Hasson shared that there was no reportable action.

The meeting adjourned at 7:05 p.m. to Monday, July 7, 2025 at 5:00 p.m.

City Council
Meeting Minutes
Mark Turner - Mayor
Yvonne Martínez Beltrán - Mayor Pro Tem
Soraida Iwanaga - Council Member
Marilyn Librers - Council Member
Miriam Vega - Council Member
Monday, July 7, 2025
Council Chamber Building - West Conference Room
17555 Peak Avenue, Morgan Hill, CA 95037

CONTINUED CLOSED SESSION
The closed session convened at 5:00 p.m.

Council Members Iwanaga, Vega, and Librers were present along with Assistant City Attorney Hasson.

CONFERENCE WITH LEGAL COUNSEL-ANTICIPATED LITIGATON
Significant Exposure to Litigation § 54956.9(d)(2)
One case
One potential action involving significant exposure to litigation pursuant to Section 54956.9 (d)(2); facts and circumstances are known under Section 54956.9 (e) (2) - complaint of inappropriate conduct made by Mayor Pro Tem Yvonne Martinez Beltran The City Council took the following actions on a 3-0 vote (Mayor Turner and Mayor Pro Tem Martinez Beltran were conflicted and did not participate):

1. They waived the attorney-client and work product privileges for the limited purpose of responding to Public Records Act requests for the report, and directed staff to make the report public without redaction (except for legally required redactions to the police report).

2. They voted to refer the report to the Fair Political Practices Commission for further review.

3. They voted to refer the report to the Civil Grand Jury for further review.

4. They requested a session with a consultant to discuss the functioning of the City Council.

5. In light of the totality of the circumstances, the Council voted to schedule a

July 7, 2025
2 special meeting on July 22, 2025, at 6:00 pm. to present the report in open session. The City's retained counsel will make a presentation, Shelline K.

Bennett from the law firm of Liebert, Cassidy and Whitmore.

There being no further business, the meeting adjourned at 6:37 p.m.

Minutes Prepared By:

Michelle Bigelow, City Clerk/PIO

City Council
Meeting Minutes
Mark Turner - Mayor
Yvonne Martínez Beltrán - Mayor Pro Tem
Soraida Iwanaga - Council Member
Marilyn Librers - Council Member
Miriam Vega - Council Member
Tuesday, July 22, 2025
Council Chamber Building
17555 Peak Avenue, Morgan Hill, CA 95037
JULY 7, 2025 SPECIAL CITY COUNCIL MEETING CLOSED SESSION REPORT OUT
The City Council took the following actions on a 3-0 vote (Mayor Turner and Mayor Pro Tem Martinez Beltran did not participate):

1. They waived the attorney-client and work product privileges for the limited purpose of responding to Public Records Act requests for the report, and directed staff to make the report public without redaction (except for legally required redactions to the police report).

2. They voted to refer the report to the Fair Political Practices Commission for further review.

3. They voted to refer the report to the Civil Grand Jury for further review.

4. They requested a session with a consultant to discuss the functioning of the City Council.

5. In light of the totality of the circumstances, the Council voted to schedule a special meeting on July 22, 2025, at 6:00 pm. to present the report in open session. The City's retained counsel, Shelline K. Bennett from the law firm of Liebert, Cassidy, Whitmore, will make a presentation.

July 22, 2025
2 PROCEDURAL OVERVIEW FOR THIS AGENDA
To ensure a clear and orderly process, the following procedures will be followed for this agenda:

1. The City Attorney will run the meeting.

2. Outside Counsel, Shelline K. Bennett of Liebert, Cassidy, Whitmore, will provide a presentation.

3. Mayor Pro Tem Martínez Beltrán and Mayor Turner will be allowed seven minutes each to comment.

4. The public will be allowed one minute each to comment.

5. Council Members will be allowed five minutes each to comment.

6. No questions from the Mayor, Council, or community will be allowed.

CALL TO ORDER
City Attorney Larkin called the City Council meeting to order at 6:02 p.m.

ROLL CALL ATTENDANCE
City Clerk Michelle Bigelow called the roll.

PRESENT Soraida Iwanaga, Marilyn Librers, Miriam Vega
ABSENT Yvonne Martinez Beltran

PRESENT IN

INDIVIDUAL

CAPACITY
Mark Turner
Mayor Turner was in attendance as an involved party, not as an unbiased member of the City Council.

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

OTHER BUSINESS

1. Receive Report Regarding the Complaint of Mayor Pro Tem Yvonne Martínez Beltrán
Recommendation:

1. Receive the Report from Outside Counsel

2. Receive Response from Mayor Pro Tem Martinez Beltran (7 Minutes)

3. Receive Response from Mayor Turner (7 Minutes)

4. Receive Public Comment (1 Minute Each)

July 22, 2025
3 5. Receive Council Comments (5 Minutes Each)
Outside Counsel Shelline Bennett with Liebert Cassidy Whitmore provided a report.

Mayor Pro Tem Martinez Beltran's representative was called to speak, but no one presented themselves.

Mayor Turner was called to speak at 6:23 p.m.

Public comment opened at 6:30 p.m. The following people were called to speak:

Margarita Castillo
Erika Mejia
Nick Gaich
Ronny Parede Jasso
Michelle McKay, on behalf of Gary Ponzini
Fawn Myers
Kathy Sullivan
Jim Yinger
Brian Sullivan
Tanaya Rose
Elizabeth Martinez
David Dindak
Armando Benavides
Ron Locicero
Kathy Chavez Napoli
Laura Nuno
Chris Robell
Tere Johnson
Marby Lee
Ron Kirkish
Maria Aguilar
Sean Allen
Augustine Alvaraz
Lisa Faria
Tammie Peters
Teresa Hernandez
Dori Prado
John McKay
Ivonne Estrada (Zoom)
Phil Lockwood (Zoom)
There being no further requests to speak, public comment closed.

Council Member Librers was called to speak at 7:04 p.m.

Council Member Iwanaga was called to speak at 7:07 p.m.

Council Member Vega was called to speak at 7:10 p.m.

No action was taken.

July 22, 2025
4 ADJOURNMENT
There being no further business, the meeting adjourned at 7:15 p.m.

Minutes Prepared by:

Michelle Bigelow, City Clerk

10 CITY COUNCIL STAFF REPORT
MEETING DATE: August 20, 2025
PREPARED BY:

Chris Ghione, Public Services Director
APPROVED BY: City Manager

AUTHORIZE AMENDMENT TO JOINT USE AGREEMENT AND ACCEPT

DONATIONS TO ALLOW FOR THE INSTALLATION OF TREES ALONG

THE WEST LITTLE LLAGAS CREEK TRAIL SOUTH OF WATSONVILLE ROAD

RECOMMENDATION(S)

1. Authorize the City Manager to execute an amendment to the West Little Llagas Creek Trail Joint Use Agreement with Valley Water to allow for the planting of trees along the trail;

2. Accept a donation of trees from Google valued at $10,000; and

3. Accept a donation from the Rotary Club of Morgan Hill of $25,000 to be used towards irrigation for the new trees.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Protecting the Environment and Preserving Open Space and Agricultural Land Maintaining and Enhancing Infrastructure
Supporting our Youth, Seniors, and Entire Community
2024-2025 Strategic Priorities
Healthy Community
Guiding Documents
Bikeways, Trails, and Recreation Master Plan
REPORT NARRATIVE:

The City has received donation offers from the Rotary Club of Morgan Hill and Google to provide funding and trees to enhance the canopy on the West Little Llagas Creek Trail between Watsonville Road and Middle Avenue. The land on which the West Little Llagas Creek Trail is owned by Valley Water and adjacent to the flood control channel that Valley Water constructed there. The City operates and maintains the trail through a joint use agreement with Valley Water. In order for the City to plant the trees along the trail, an amendment to the joint use agreement is required. This amendment is included as Attachment 2.

10 The proposed donation from Rotary and Google came in response to the Mayor presenting this project to both organizations. Rotary will be contributing funds totaling $25,000, which will be used to fund the new water service connection and irrigation line to the trees. Google will be donating 23-25 trees that are comprised of Western Red Bud and Coast Live Oak Trees. The tree donation is valued at $10,000.

COMMUNITY ENGAGEMENT:

Empower
This project has come forward based on donations and funding developed by a community organization. It will support enhanced beatification and shade, which have been regular resident requests on the new trail.

ALTERNATIVE ACTIONS:

The City Council could choose to not approve the actions in this report and not move forward with the tree planting efforts.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The City Council has completed numerous actions to partner with Valley Water on the use of the West Little Llagas Creek Trail, including approving a cost-sharing agreement on September 23, 2020 for the construction of the section of the trail south of Watsonville Road.

FISCAL AND RESOURCE IMPACT:

It is estimated that the capital costs associated with the project will be covered by the donations provided to the City. The City will have ongoing water costs associated with the project during the establishment of the trees, which are estimated at hundreds of dollars annually for the first 5 years of tree establishment. Maintenance of pruning the trees will cost several thousand dollars once every 5–7 years.

CEQA (California Environmental Quality Act):

Categorical Exemption
Planting of new trees for this project is categorically exempt per Class 4 - Minor Aterations to Land.

Project Location Map
West Little Llagas Creek Trail Trees
900 ft
N
➤
Image © 2025 Airbus
I© 2025 Aib

City of Morgan Hill and SCVWD
JUA Amendment No. 1_ West Little Llagas Creek between Monterey Road and Ciolino Avenue

AMENDMENT NO. 1

TO THE JOINT USE AGREEMENT
Between City of Morgan Hill and Santa Clara Valley Water District For West Little Llagas Creek between Monterey Road and Ciolino Avenue This Amendment No. 1 to the JOINT USE AGREEMENT A4201M between City of Morgan Hill and Santa Clara Valley Water District for West Little Llagas Creek between Monterey Road and Ciolino Avenue in association with the Upper Llagas Creek Flood Protection Project is made and entered into this __________ day of __________, 2025 ("Effective Date") by and between the CITY OF MORGAN HILL ("City"), a municipal corporation of the State of California, and the SANTA CLARA VALLEY WATER DISTRICT ("District"), a special district created by the California Legislature.

RECITALS
A. The City and District entered into an agreement entitled "JOINT USE AGREEMENT between City of Morgan Hill and Santa Clara Valley Water District for West Little Llagas Creek between Monterey Road and Ciolino Avenue in association with the Upper Llagas Creek Flood Protection Project" dated September 28, 2018 (A4201M) ("Agreement"). The term of this Agreement (including the rights and obligations contained therein) is twenty-five (25) years commencing on the agreement effective date.

B. The City and District desire to update certain provisions of the Agreement to address City proposed tree plantings and associated maintenance responsibilities.

In consideration of the above Recitals and the following mutual covenants and obligations, the parties do hereby agree to amend the Agreement as follows:

Amendment No. 1
Agreement Provisions

1. Add to “1) Scope of License Grant to City” subsection “d.” as follows: “d. To plant and maintain trees per the terms in Exhibit B attached hereto.”

2. All provisions of the Original Agreement, except as modified by this Amendment No.1, remain in full force and effect, and are reaffirmed.

City of Morgan Hill and SCVWD
JUA Amendment No. 1_ West Little Llagas Creek between Monterey Road and Ciolino Avenue

WITNESS THE EXECUTION HEREOF, the day and year first hereinabove written.

CITY OF MORGAN HILL
A Municipal Corporation

SANTA CLARA VALLEY WATER DISTRICT
a California Special District
By: _________________________
City Manager
By: ____________________________
Melanie Richardson, P.E.

Interim Chief Executive Officer
Approved as to form:
____________________________
City Attorney
Approved as to form:
_______________________________
Susana Inda
District Counsel
Approved:
____________________________
Finance Director/Risk Manager
ATTEST:
____________________________
City Clerk
ATTEST:
_______________________________
Candice Kwok-Smith
Clerk/Board of Directors

City of Morgan Hill and SCVWD
JUA Amendment No. 1_ West Little Llagas Creek between Monterey Road and Ciolino Avenue

Exhibit B
Tree Planting and Maintenance Requirements:

1. City Responsibilities:
a. Any trees planted by City are considered City Improvements as referred to in this Agreement.
b. City is responsible for the installation of all District approved trees. c. City is responsible for the installation and maintenance of any and all District-approved trees and irrigation systems per District requirements. d. All complaints associated with planted trees shall be responded to and addressed by the City.

2. Approvals:
a. City must obtain prior approval from the District for the planting of any trees within the Premises, including but not limited to the location and species before the initial tree planting and for any future replacement plantings.

3. Tree Placement Requirements:
a. No trees may be planted within 75 feet on either side of an ingress ramp. b. No trees may be planted within at least 10 feet on either side of an irrigation standpipe.
c. No trees may be planted directly in front of an outfall. d. City is not permitted to plant invasive tree species, including but not limited to Acacia spp., Locust spp., Ash spp., Privet spp., Palm spp., Holly Oak, Olive, Tree of Heaven, and Pepper spp.

4. Irrigation Requirements:
a. All approved irrigation lines must be buried to prevent damage from Valley Water maintenance activities.
b. Any leaks communicated to the City by District staff shall be repaired within one week.

5. Maintenance Requirements:
• Any soil or vegetation imported into the Premises must come from a District-approved nursery or be independently tested for Phytophthora before the initial planting and any future replanting.
• Trees shall be pruned according to International Society of Arboriculture (ISA) standards.
• Trees or branches may not encroach upon Valley Water’s maintenance road. Branches must not extend into the service road up to a height of 14

City of Morgan Hill and SCVWD
JUA Amendment No. 1_ West Little Llagas Creek between Monterey Road and Ciolino Avenue

feet. Adjustments to this requirement may be made with District approval. • A biological assessment must be conducted prior to pruning to assess for nesting birds and other ecological considerations. Nesting birds shall be given work buffers, consistent with the Migratory Bird Treaty Act and other state and local regulations.
• Dead and fallen trees and debris shall be promptly removed. • The use of herbicides is prohibited.
• City must maintain tree wells, including weeding and mowing. • Any temporary stakes, cages, fabric, or other materials used during the tree establishment period must be removed once no longer needed and properly disposed of.
• As applicable, City must ensure that tree canopies are lifted to allow the District to inspect the inboard levee. Tree limbs must not touch or obstruct the levee surface.

9 `
r%r--
ffi
E
File: City of Morgan Hill
Up er 1la as Creek
Flood Protection Project
JOINT
Between
City of Morgan Holl and Santa Clara Vaflay Water District For
West Little Lia as Creek between Monterey Road andlolivenue ifi association with the Upper Lia as Creek Flood ProtectionProject SANTA CLARA VALLEY WATER DISTRICT,. a California Special District created by the California Legislature, hereinafter referred to as " District;" and CITE OF MORGAN HILL, a municipal corporation of the County of Santa Clara,. hereinafter referred to as " City", AGREE as follows;
RECITALS:

A. ,WHEREAS, District is the owner-=of certain real property ( hereinafter " the Premises"), shown on" Exhibit A" attached herdto, so marked and by this reference made a part hereof.

The Premises are located along- West Little Llagas Creek from onterey Read northwesterly to Ciolino Avenue within the City of Morgan Hill; and B. WHEREAS, on June 10, 2014, District's Board of Directors certified a Final Environmental Impact Report ( Final EIR), and approved its Upper Llagas Creek Flood Protection Project District Project) as lead agency pursuant to the California Environmental Quality Act CE A) ( Public Resources Code section 21000 et. seq.); and C. WHEREAS, District is currently proceeding with the permitting phase of its leper Llagas Creek Flood Project ( District Projbct), within its right- of-way. After permits are issued, District will subsequently advertise for bids and award contracts for construction of.-the District Project anticipated to take an estimated five ( 6) years to complete construction; and
Dm WHEREAS, the District is required to maintain the District Project in accordance with the Resource Agency approved Mitigation and Monitoring Plan ( MMP) for a 10- year period fallowing completion- of construction needed to meet required success criteria, including a 3- year mitigation planting establishment period; and
E. WHERAS, District shall grant a conservation easement to the City within a portion of the Premises in accordance with pending execution of the, purchase and sale agreement by and between the District and County of Santa Clara for an approximately 53- acre property commonly known as Lake Silveira, located with the City of Morgan Hill ( P ' s 779- 03- 114, 779- 06- 030, 779- - 014, and 779- 06-032) (Conservation Easement); and Page I of

File: City of Morgan Hill
Upper Magas Creek
Flood Protection Project
F. WHEREAS, District shall also-grant a perpetual wetlands mitigation easement to a grantee designated by the United States Army Corps of Engineers over and up to sixteen acres Mitigation Easement) entirely within the Conservation Easement; and G. WHEREAS, the Conservation Easement is subordinate to the Mitigation Easement; and H. WHEREAS, City has an interest in using Premises after the construction of District Project to enable City to provide certain recreational opportunities to the public that do not unreasonably interfere with the District' s mission of flood protection, water resource management, and stream stewardship; and
I. WHEREAS, the parties have previously executed the following Joint Use Agreements JUA) along West Little Liagas Creek that will be superseded upon the execution of this Agreement:
a. A2905M-( Portion): Edmundson Avenue to LaCrosse Drive executed 12/2012004 for a term of 25 years;
b. A3046 E: Edes Court and Edmundson Avenue executed 7/ 11/ 2006 for a term of 25 years;
c. A3221 M: LaCrosse Drive to Watsonville Road executed 9/9/2008 for a terra.of 25 years,
d. A34114M: Edes Court to Spring Avenue executed 10/ 26/ 2010 for a term of 25 years; and
J. WHEREAS, the parties find it to be in the public interest to provide for joint use of the Premises by means of an Agreement under the following terms and conditions; Now, therefore, the parties agree as follows:
1) 3cope of the License Grant to City. Subject to the terms and conditions of this Agreement, and contingent. upon District' s grant of a conservation easement to City as set forth above, District . hereby grants to- City a non- exclusive license to access and do any or all of the following on the Premises:
a. To construct, operate, maintain, repair., replace, and remove City Improvements for recreational purposes on the Premises including, but not limited to, asphalt concrete surfaced pedestrian and bicycle trails, pedestrian bridges, fencing, fixture ( trash receptacles, benches etc.) and signage. The construction of such City.Improvements shall require prior review and approval by District- as signified by issuance of a Wate'r Resources Protection Ordinance Encroachment Permit (" District Permit"), and shall be compliant with all applicable legal and permitting requirements. It is fully understood and agreed that District in its reasonable, discretion may approve or disapprove a request for any permit to construct any City Improvement on the Premises.

it City of MorganH!,P
Upper Liagas Creeik
Flood Protection Prcject
b. To provide non- motorized bicycling, walking, jogging and hiking activities in accordance with all applicable legal and permitting requirements to the extent such activities do not interfere with the District' s mission of flood protection, water resource management, and stream stewardship.
c. To host special recreational events ( e.g., races) that may include an otherwise restOcted component such as allowing private vehicular access for safety purposes, so long as City first receives a District Permit to host that event. 2) Subordination to Conservation Easement and Mitigation Easement. To the extent this Joint Use Agreement conflicts with any provisions of the Mitigation Easement, the terms of the Mitigation Easement shall prevail. To the extent this Joint Use Agreement conflicts with any provision of the Conservation Easement, the terms of the Conservation Easement shall prevail. To the extent this Joint Use Agreement conflicts with any provisions of the MMP, the terms of the MMP shall prevail.
3) Prohibited Uses of Trail. City shall post notices at all trail entrance§ that notify users of the trail that the following activities- are prohibited:

Entry of motor vehicles ( except for maintenance, emergency, and enforcement vehiclesand mobility devices otherwise allowed by law)
Unleashed dogs
Subject to the foregoing prohibitions and any other restrictions set forth in this Agreement, City shall have the sole authority to adopt any trail rules and regulations pursuant to City of Morgan Hill Municipal Code for any City Improvements on the Premises that will not interfere with District' s mission of flood protection, water resource management, and stream stewardship.
4) Trash and Litter Removal. City will provide for trash removal on the Premises that is reasonably likely to have been generated from the public's use of the Trail or-access to the Premises. City will be responsible for providing sufficient number of trash receptacles, timely maintaining, servicing, emptying trash receptacles, including removing litter/trash and rubbish removal not properly disposedin the receptacles as reasonably necessary. The District is required under the terms of the Mitigation Easement and IVIMP' to ensure trash does not compromise the health and ecological viability of the created wetlands, so District reserves the right, at City' s expense, to conduct trash removal within the Conservation Easement if the City fails to properly and routinely remove trash and debris generated from the public' s use*to the level required under the terms of,the Mitigation Easement and MMP. District will notify City in terms of Article 20 of this Agreement prior to conducting this corrective action.

District will manage any Adopt-A-Creek program within the Premises.

it City of Morgan Hill
Upper Liagas Creek
Flood Protection Project
5) Vegetation Management. If existing vegetation impacts the trail use, then City is responsible for vegetation removal and maintenance, as City deems necessary while in accordance. with the terms and conditions of the Conservation Easement. City shall not conduct any vegetation removal and maintenance that is not compatible or consistent with the terms and conditions of Mitigation,Easement and MMP for the District.Project, per Article 2 of this Agreement. 6) Graffiti Removal. City will provide graffiti removal in compliance with City' s graffiti abatement program, including graffiti removal from walls, signs, etc. installed in conjunction with and/ or accessory to the establishment of a public pathway consistent with its implementation of the same program at comparable City facilities. City will have the primary responsibility for removal of graffiti, on the Premises, reasonably attributed to trail use. No permit from District, nor any advance notice, will be required for City to provide the routine removal of graffiti from any City or District facility within the length of the West Little Liagas Creek included within this agreement. Any and all materials used by City in the removal of graffiti within the limits of this agreement shall be approved for use in the State of California, environmentally safe products, which will not impact the West Little Liagas Creek environment in any way. 7) Security. The premises will be reasonably patrolled by Citypersonneland/ or volunteers supervised by City, at the level of Public Safety that is afforded to all areas of the City. District has no obligations whatsoever to provide or- pay for any such patrol services. City shall cooperate and coordinate with District in District' s efforts to remove any. illegal encampments on the premises, and City shall provide police security during such removal activities at no charge to.District.
8) Public Complaints. City is responsible for responding to all public complaints and inquiries regarding City's improvements on the Premises, including the public trail, and to all inquiries regarding the public's use of the Premises.
9) Removal or Relocation of City Improvements. If District requires that any City improvement on Premises be removed or relocated for any District purpose, City will do so at its own expense within 90 days of receiving notice from District. If removal or- relocation of City improvements, including vegetation installed by City, requires mitigation under the California Environmental Quality Act, City will be responsible for all costs required. to fulfill any required mitigation responsibilities. District will inform City during preconstruction planning in the event a District project is performed on the Premises, in order to reasonably minimizeDistrict' s project impact on City' s improvements located on the Premises. In the event a District project is constructed, any replacement of City' s trail and amenities will be the responsibility of City, subject to District approval.
10) Water Level Fluctuations. Itis expressly understood by City that the level of water upon the Premises may fluctuate from day to day due to- controlled. or uncontrolled flows upon and across the same. City is responsible for the control of or limiting, the public' s use of Premises because of such water levels, flood flows, or for any other-reason (i, e. harmful algal blooms).

ile® City of Morgan Hill
Upper Ll Crook
Flood Protection Project
City is responsible for determining the conditions under which to exercise said control or to limit the use of the Premises to ensure the health and safety of the public using the Premises.

11.) Signage. The District is required under the terms and conditions of the Mitigation Easement r
to install wetiand habitat sensitive area signage'. For all other signage, the parties will cooperate to create and install signage that benefits the programs of each party such as warnings, entrance signage, interpretive signs and benches, and joint uses when applicable, The Deputy Operating Officer de'signated by District and the Community Services Director of City or their respective designees will meet and confer on a periodic basis to plan the installation of appropriate signage which serves the needs of both parties. All signs placed on the Premises by City ( except existing signs that, identify the facility ( e.g. Trail) by name) must include District' s logo in equal size and symmetrical relationship to any other logos contained on such signs. In addition" ,all City signs or City publications placed on the Premises that describe water resources must be developed in conjunction with District' s Watershed customer relations staff. Each party is responsible for the maintenance and upkeep of its signage installed on the Premises.
12) Bird Nesting Season. Construction and maintenance work during nesting season ( generally between February 1 and August 31st) will be avoided whenever possible. If construction or maintenance work must be done during the nesting season, a pre-construction survey by a qualified biologist must be undertaken to determine the presence of nesting. If nesting activity is reported, the biologist is expected to recommend the City to*impiement adequate mitigation measures to protect the nesting area. Environmental impacts will be considered prior to all work by the responsibleparty,-( City or District, and/or their agents) performing said work. Any and all work related to.this clause will be completed by the responsible party in accordance with applicable federal, state, and local environmental health and safety regulations including but not limited to the federal Migratory Bird Treaty Act of 1918, Clean Water Act, Endangered Species Act, the California Fish and Wildlife Code and the Porter- Cologne Act and any amendments thereto.
13) Maintenance and Repair. District is responsible for performing routine maintenance on the Premises for flood protection and water resource management purposes in, a manner consistent with its maintenance of comparable facilities or creeks.. City is responsible for the maintenance and repair of recreational improvements on the Premises. City will bear the cost and expense of any security, police, preparation of traffic and pedestrian detour plans, including installation of required appurtenances, or other expenditure,necessary to temporarily prohibit or control public access to the Premises that District would not ordinarily incur to complete scheduled routine maintenance pursuant to this provision. In an e'mergency situation or work tied to regulatory compliance ( i. e. fish passage or.wetlands functionality concerns), District will respond without notice to City. In' non- emergency situations, City and District staff will meet, whenever necessary, for the purpose of scheduling routine maintenance, including, but not limited to:
a. Maintenance issues related to improvements;

File: City of Morgan Hill
Upper Lfca ? as Creek
Flood ProtacVcn Project
b. Method and timing of issues related to affected wildlife; C. Non- emergency work requiring the use of heavy equipment, barricading, and/ or restricting access to the Premises. District and City fufther agree to notify one another' s designated . representative at least ten ( 10) work as prior to commencement of such work, in order to minimize public impacts. 14) Damage to CKy' s !!rnprovements on Promises. District is not responsible for any damage occurring to City' s improvements or structures located on the Premises that results from District's maintenance, construction or reconstruction activities, or from its water management and/or flood protection facilities located on or near the Premises, including ( Without limitation) any flood flows, or inundation of West Little Liagas Creek onto the Premises, Further, City is responsible for any damage occurring to either District' s or City' s improvements or structures located on the Premises that result from the public' s use of the Premises. All such costs for repairing such damage to District' s or City' s improvements will be borne by City. 15) Term of Agreement and Renewal Option, This Agreement will become effective upon execution by both parties. However, the City acknowledgqs that the District Project will be constructed in phases over an estimated five ( 5) year period where the construction, of the District Project will be given priority over proposed City improvements. City agrees to install City improvements on Premises in accordance with Article 19 of this Agreement. The term of this Agreement ( including the rights and obligations contained therein) is twenty-five ( 25) years commencing on the Agreement Effective Date. This City, upon providing District with no less than ninety ( 90) days written notice, but no more than 180 days notice prior to the expiration of the initial 25- year term, may renew this Agreement for an additional 25-year period.
16) Termination of Agreement. A party may terminate this Agreement without cause after providing the other party with at least 180 days prior written notice of its intent to terminate this Agreement. Upon the termination or expiration of this Agreement, City must remove all City Improvements from the Premises, and leave the Premises in a condition as near as reasonably practical to its condition prior to the installation and/ or development of such improvements. If the District requires the trail to be removed from the Premises due to a flood protection project or other District project, this Agreement will terminate upon District providing the City with written notice of at least 180 days: Notice of intent to renew or to terminate may be given by City' s Director of Public Works. Notice of intent to terminate may be given by District's Chief Executive Officer.
17) City' s Responsibility for Public Use. Subject to the conditions and restrictions contained in this Agreement, City has the fullcontroland authority, for public and recreation purposes over the use of the Premises, and, City may restrict, or control, regulate and/ or supervise the public* use thereof. City may, at its discretion, consistent with the- right of District hereinafter described, and without diminution of the flood protection or water resources management function or hazard thereto of the Premises as now existing or as may hereafter be altered,

File: City of Morgan Hill
Upper Llagas Creek
Flood Protection Project
take any measures of every kind as may in the opinion of City be necessary for the health and safety of the users of the Premises for any purpose under this Agreement. City has the sole responsibility for the maintenance in usable and safe condition of every facility provided upon the Premises by City.,
18) District' s Superior Rights. It is expressly understood that District is engaged in flood protection, the protection of Water resources, and stream stewardship and that the terms and conditions of this Agreement Will not in any way ' interfere with the absolute, free and unrestricted right of District to opprate and maintain for flood protection, water resource management, and stream stewardship purposes the stream bed and banks or any appurtenant works thereto, or to repair or construct any of its works, or to allow the raising or lowering of the height of the water present upon the Premises. 1! 0) City' s Subordinate Rights. City will have the right to build improvements, on the Premises necessary, or convenient to the enjoyment of this Agreement, provided the location of the any such improvement is, in each case during the term of this Agreement, first approved by District and signified by issuance of a District permit. It is fully understood and agreed that District has the sole, unfettered discretion to approve or disapprove of such improvements. 20) Indemnification by City. Notwithstanding any other provision of this Agreement, City agrees to indemnify, defend and hold harmless District, its agents, officers, directors, and employees from and against any and all demands, claims, damages, losses and reasonable expenses, including but not limited to liabilities, obligations, claims, costs, reasonable expenses including without limitation interest, penalties and reasonable attorney' s fees), fines, levies, assessments, demands, damages or judgments of any kind or nature, whether in law or equity including without limitation, death or injury to any person, property damage, administrative and judicial orders and consents, or any other loss) to the extent they arise out of, pertain to, or relate to the: ( i) public use of the Premises, ( Ii) public' s use of real property adjacent to the Premises, or ( iii) negligence or willful misconduct of City's officers, agents, employees, or independent contractors. This Agreement to defend, indemnify, and hold harmless District will operate irrespective of the basis of the claim, liability, loss, damage, o'r injury and irrespective of whether the act, omission, or activity is a condition of Premises or any other cause of any kind,or nature21) Notices. Any and all notices required to be given hereunder will be deemed. to have been delivered upon deposit in the-United States mail,.postage prepaid, addressed to either of the parties at the address hereinafter specified or as later amended by either party in writing:

City: District:

City of Morgan Hill Santa Clara Valley Water District
Attention: Community Services Director Attention: Clerk of the Board 17576- Peak Avenue 5750 Almaden Expressway
Morgan Hill, CA 95037 San Jose, CA 95118

File: City of Morgan Hill
Upper Lia as Creek
to Protection Project
w1copy t® District's Community Projects
Review Unit
22) Successors and Assigns. This Agreement, and all terms, covenants, and conditions hereof, will apply to and bind the successors and assigns of the respective parties hereto, City will neither assign nor sublet this Agreement without the prior written consent of District. 23) Choice of Law. This Agreement is governed by California law. 24) Arnendnients. This Agreement may' notbe modified-or' amended except in writing signed by bo*th parties.
25) Compliance. with Laws. Each party must, in all activities undertaken pursuant to this Agreement, comply and cause its contractors, agents, and employees to comply with all federal, state, and local laws, statues, orders, ordinances, rules, and regulations. 26) Not Real Property Stere t. It is expressly understood that this Agreement does not in any way whatsoever grant or convey any permanent easement, fee or other interest in a party' s real property to the other party.

WITNESS THE EXECUTION HEREOF,
11cityll District"

CITY OF MORGAN- HILL SANTA CLARA VALLEY WATER DISTRICT, A Municipal corporation of the County of Santa Clara a Special District, created by the California Legislature By: y:

Christina Turper Norma J. 6'macho
City Manager Chief Executive Officer
ATTEST: ATTEST:
t
Michete ori Michel6 L. King
Deputy City Clerk Clerk of the Board of Directors
APPROVED AS TO FORM: APPROVED AS TO FORM:
y
Donald Larkin 11 Brian Hopper
City Attorney Senior Assistant District Counsel
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Copy for City of Morgan Hili
Sign and I< eep for your records**

AGREEMENT BETWEEN THE

CITY OF MORGAN HILL AND SANTA CLARA VALLEY WATER

DISTRICT REGARDING MAINTENANCE AND OPERATION

OF THE UPPER LLAGAS CREEK FLOOD PROTECTION PROJECT

AND WEST LITTLE LLAGAS CREEK
THIS AGREEMENT is made and entered into this - day of 2019 ( Effective Date) by and between the City of Morgan Hill, a municipal corporation of the tate of California primarily located at 17575 Peak Avenue, Morgan Hill, CA 95037, hereinafter referred to as " CITY", and the Santa Clara Valley Water District, a special district organized and existing under the laws of the State of California located at 5750 Almaden Expressway, San Jose, California 95118, hereinafter referred to as " VALLEY WATER", and together referred to as " PARTIES" and individually as " PARTY".

RECITALS
A. WHEREAS, VALLEY WATER is enabled by the Santa Clara Valley Water District Act to provide flood protection in Santa Clara County, and has sought federal aid for flood protection measures for the Upper Llagas Creek Flood Protection Project ( hereinafter Project") for 13. 9± miles from approximately Buena Vista Avenue in Gilroy, California upstream to Llagas Road in Morgan Hill, California; and B. WHEREAS, the PARTIES executed a Cost- Sharing Agreement (# A3313S) for preparing Project designs, environmental documents, and a U.S. Army Corps of Engineers USAGE) Design Documentation Report for the Project on September 22, 2009 with the CITY' s cost share a maximum of three million dollars ($3, 000,000). On April 7, 2014, VALLEY WATER received a final payment from the CITY maximizing their contribution at three million dollars in accordance with Agreement# A3313S; and C. WHEREAS, on June 10, 2014, VALLEY WATER' s Board of Directors certified a Final Environmental Impact Report ( Final EIR) and approved its Project as the lead agency pursuant to the California Environmental Quality Act ( CEQA) ( Public Resources Code section 21000 et. Seq.); and
D. WHEREAS, VALLEY WATER is the fee owner of certain real property along West Little Llagas Creek within the CITY acquired for the Project; and E. WHEREAS, the PARTIES executed a Joint Use Agreement (# A4201M - Attachment A) to enable the CITY to provide certain recreational opportunities to the public within VALLEY WATER' s fee owned property that do not unreasonably interfere with VALLEY WATER' s mission of flood protection, water resource management, and stream stewardship along West Little Llagas Creek between Monterey Road and Ciolino Avenue in association with the completed Project; and
1

F. WHEREAS, VALLEY WATER is required to operate and maintain the Project to maintain the 100- year level of flood protection, meet or exceed mitigation plantings success criteria, and protect the ecological and biological Project benefits; and G. WHEREAS, the County of Santa Clara, Department of Roads and Airports .intends to adopt a resolution of the Board of Supervisors relinquishing the remaining portion of Hale Avenue between approximately Main Avenue to north of Wright Avenue to the CITY. This remaining portion of Hale Avenue includes the existing West Little Llagas Creek currently serving to convey storm water flows through portions of the CITY; and H. WHEREAS, VALLEY WATER has plans to construct the Project that will replace the existing portion of West Little Llagas Creek along Hale Avenue within underground drainage structures within the Hale Avenue right of way to provide a 100- year level flood protection; and
I. WHEREAS, CITY is the fee owner of certain real property along West Little Llagas Creek within the Project limits, including at existing street crossing locations; and J. WHEREAS, CITY and VALLEY WATER are precluded by the State Constitution and other laws from actions which financially bind future governing bodies. Nothing herein stall constitute, or be deemed to constitute, an obligation of future appropriations of the legislative bodies of CITY and VALLEY WATER; and
K. WHEREAS, the PARTIES find it to be in the public interest to provide for joint-use of the PARTIES properties within the Project limits and agree to define the maintenance and operations roles and responsibilities for each PARTY in association with the Project and West Little Llagas Creek.

AGREEMENT
I. TERM
The term of this AGREEMENT shall commence upon the Effective Date which shall be the date the AGREEMENT has been fully executed by both PARTIES, and shall continue for Fifty ( 50) years thereafter, unless earlier terminated pursuant to the terms of this AGREEMENT.

H. DEFINITIONS
For purposes of this AGREEMENT, the following terms shall be defined and used as set forth below, and any other capitalized terms not defined below shall be as defined elsewhere in this AGREEMENT. The references to particular types of Flood Protection Features, Recreation Features, and Joint Flood Protection and Recreation Features and the like.
2

1. Flood Protection Features — Those features being used solely for flood protection purposes identified as the following:
a. Underground reinforced box culverts ( KCB' s);
b. Existing rock slope protection, concrete lining and concrete wingwalls; C. Inlet structure at Hale Avenue and Wright Avenue;
d. High flow horseshoe- shaped underground tunnel 12 ft. tall x 14 ft. wide; e. Maintenance Access Ramps to West Little Llagas Creek; f. Aggregate base maintenance roads;
g. Gates to maintenance access roads;
h. In-channel debris and vegetation control;
i. Flood Protection and Mitigation signage;
j. Mitigation Plantings; and
k. miscellaneous features with the purpose of providing hydraulic capacity for West Little Llagas Creek.

2. Recreation Features — Those features being used solely for recreation, open space, and trail purposes identified as the following:
a. Asphalt concrete trails;
b. Recreation signage;
C. Lighting features;
d. Drinking fountains;
e. Bathrooms;
f. Trash removal and trash receptacles;
g. Benches;
h. Bollards;
i. Landscape plantings;
j. Weed control along trails and within landscape plantings; k. Landscape architectural features (i.e. boulders, sculptures);

1. Community monuments/ exhibits, including Sister City projects; and in. miscellaneous features with the purpose of providing recreation, open space, and trail uses, including the features installed by the CITY in accordance with the Joint Use Agreement (# A4201M) executed by the PARTIES, including any future amendments or renewals approved by the PARTIES.

3. Joint Flood Protection and Recreation Features — Those features being used jointly for flood protection and recreation/ trail purposes as identified as the following:
a. Aggregate based maintenance roads/ trails;
b. Fencing;
C. Underground low flow 36- inch reinforced concrete pipe ( RCP) storm drain from West Main Avenue to Inlet structure near Wright Avenue; d. Rodent control;
C. miscellaneous features with the purpose of providing both flood protection and recreation uses.
3

4. Channel Access Road/ Ramps — Any road or ramp which has not been authorized for the public' s use and which has been constructed or installed to provide service access to, or within West Little Llagas Creek for the sole use by VALLEY WATER.

5. Landscape Plantings and associated features — Plant material, such as trees, shrubs, turf, reinforced turf, architectural features and irrigation systems installed for recreation, open- space, and trail purposes, excluding all Mitigation Plantings.

6. Maintenance Roads/Trails — Paved pathways designed for both public pedestrian and bicycle use as well as for service access by VALLEY WATER and CITY.

7. Mitigation Plantings — Native plant material planted to mitigate the loss of such plants because of the Project.

8. Operation and Maintenance — Operation and Maintenance shall include all operations, maintenance, replacements, repairs, rehabilitation, acquiring required permits, satisfying permit conditions, record keeping, and reporting in accordance with the standards set forth herein.

9. Sediment — Undesirable sediment accumulation within West Little Llagas Creek which must be removed for flood protection purposes.

10. Vegetation — Natural and desirable native mitigation plant growth or undesirable plant growth, including fallen trees within West Little Llagas Creek which must be controlled for flood protection purposes.

It. Weed Control—Undesirable plant growth along the Maintenance Roads/ Trails and not within West Little Llagas Creek which is controlled for recreation, open space, and trail purposes.

12. Trash and Litter — Waste products, refuse that have been carelessly discarded or disposed of improperly, without consent, at an undesirable location.

13. Graffiti —Writings, drawings, or other marks scribbled, scratched, or sprayed on a surface in a public place without consent.

III. OPERATIONS AND MAINTENANCE PROVISIONS RELATED TO FLOOD

PROTECTION FEATURES
A. Operations
VALLEY WATER agrees to provide operations for the Flood Protection Features identified and defined within Article II ( 1.) of this AGREEMENT. For purposes of this AGREEMENT only, during a potential flood emergency, VALLEY WATER' s designated Emergency Operations Center ( EOC) staff will determine 4

when VALLEY WATER staff will be required to perform emergency operations of the Flood Protection Features.

B. Maintenance
VALLEY WATER agrees to provide maintenance for the Flood Protection Features identified and defined within Article H ( 1.) of this AGREEMENT, excluding the operation and maintenance for the structural aspects of the KCB' s and road crossings which is the CITY' s responsibility. VALLEY WATER' s maintenance of flood protection features includes sediment removal and vegetation control consistent with VALLEY WATER Project' s latest version of their Operations and Maintenance Guidelines. CITY, at any time, may request a copy of the latest version of the Project' s Operations and Maintenance Guidelines from VALLEY WATER.

C. Operations and Maintenance of Existing West Little Llagas Creek at Hale Avenue VALLEY WATER agrees to operate and maintain West Little Llagas Creek along Hale Avenue between approximately Wright Avenue and West Main Avenue when County of Santa Clara relinquishes this remaining portion of Hale Avenue to the CITY and prior to completion of the Project. The completed Project will replace this portion of West Little Llagas Creek within underground drainage structures, which are identified and defined as Flood Protection Features within Article 11 ( 1.) of this AGREEMENT. PARTIES acknowledge VALLEY WATER has CITY' s permission in accordance with this AGREEMENT to conduct operations and maintenance, including sediment removal within existing West Little Llagas Creek, where no additional approval is required by the CITY.

VALLEY WATER's maintenance schedule will be in accordance with the terms and conditions of Article VI( A.) of this AGREEMENT.

D. Operations and Maintenance of Mitigation Plantings
VALLEY WATER agrees to operate and maintain the Mitigation Plantings in accordance with the regulatory permits acquired for the Project.

IV. OPERATIONS AND MAINTENANCE PROVISIONS RELATED TO RECREATION

FEATURES
A. Operations
CITY alone is responsible for supervising the public' s authorized use of the Recreation Features. CITY agrees to provide operations for the Recreation Features identified and defined within Article 11 ( 2.) of this AGREEMENT, consistent with the CITY' s standard park/ trail operations, and in accordance with the Joint Use Agreement (# A4201M) previously executed by the PARTIES, including any future amendments or renewals approved by the PARTIES. 5

B. Maintenance
CITY agrees to provide maintenance for the Recreation Features identified and defined within Article II ( 2.) of this AGREEMENT, including trash and graffiti removal consistent with the CITY' s standard park/trail operations, and in accordance with the Joint Use Agreement (# A4201M) previously executed by the PARTIES, including any future amendments or renewals approved by the PARTIES.

C. Operations and Maintenance of Recreation Features
CITY agrees to operate and maintain the Recreation Features consistent with the CITY' s standard park/ trail operation and maintenance standards, and this operation and maintenance shall not be inconsistent with VALLEY WATER' s Operations and Maintenance Guidelines, as amended from time to time, and shall not conflict with VALLEY WATER' s Mitigation Plantings in accordance with the regulatory permits acquired for the Project. To the extent this AGREEMENT conflicts with any of the terms and conditions of the Joint Use Agreement A4201M), including any future amendments or renewals approved by the PARTIES, the terms and conditions of the Joint Use Agreement shall prevail.

V. OPERATIONS AND MAINTENANCE PROVISIONS RELATED TO JOINT FLOOD

PROTECTION AND RECREATION FEATURES
A. Operations and Maintenance

1. VALLEY WATER agrees to provide operations and maintenance for those Flood Protection features related to Joint Flood Protection and Recreation Features identified and defined within Article H ( 3.) of this AGREEMENT.

By way of example, VALLEY WATER is responsible for maintenance of the Maintenance Roads structural base materials and/ or sub-base structural integrity and fencing damaged by VALLEY WATER personnel or its authorized agents.

2. CITY agrees to provide operations and maintenance for those Recreation features related to Joint Flood Protection and Recreation Features identified and defined within Article H ( 3.) of this AGREEMENT, By way of example, CITY is responsible for maintenance of concrete asphalt surfacing of maintenance road/ trails, 36-in RCP low flow storm drain West Main Avenue to Wright Avenue, fencing damaged by public use, etc. as defined in and in accordance with the terms and conditions of 6

the Joint Use Agreement (# A4201M), including any future amendments or renewals approved by the PARTIES.

B. Failure of Operations and Maintenance by CITY or VALLEY WATER In the event either the CITY or VALLEY WATER fails to perform its obligations under this Article in a timely fashion, the other party may, after providing notification to the party required to perform the obligation of the deficiency, provide the complete operations and maintenance of a Joint Flood Protection and Recreation Features. The party in default shall reimburse the party that provided operations and maintenance on the Joint Flood Protection and Recreation Features within sixty ( 60) days of proper billing. Proper billing will include an itemized breakdown of the proportional costs and a complete description of those items and/or exact locations of those areas that received the operations and maintenance work. The CITY and VALLEY WATER agree to resolve any dispute regarding the proportional costs, not specifically addressed in this AGREEMENT, for operating and maintaining the Joint Flood Protection and Recreation Features through the resolution process set forth in Article X of this AGREEMENT.

VI. SCHEDULING OF MAINTENANCE
A. VALLEY WATER' s Maintenance Schedule

1. PARTIES acknowledge and agree that VALLEY WATER is responsible for performing routine maintenance for flood protection and water resource management purposes in a manner consistent with its maintenance of comparable facilities or creeks.

2. PARTIES acknowledge and agree VALLEY WATER' s use of equipment for maintenance work, including herbicide applications to control vegetation as contemplated under this AGREEMENT may, on occasion, disrupt the use of the Recreation Features by CITY, the public, or both..

Accordingly, VALLEY WATER agrees to notify the CITY' s designated superintendent at least ten ( 10) working days prior to commencement of such work, to minimize public impacts.

3. PARTIES acknowledge VALLEY WATER has CITY' s permission in accordance with this AGREEMENT to conduct operations and maintenance, including rock slope protection installation/repairs, sediment removal, and vegetation management for flow conveyance for the following street locations and street crossings associated with the Project, where no additional approval is required by the CITY:

La Crosse Drive ( South), Bridge # 37C- 329.• CITY owned, four ( 4) Cell Reinforced Concrete Box Culvert ( RCB);
7

La Crosse Drive (North), Bridge# 37C- 328: CITY owned, four (4) Cell RCB;
West Edmundson Avenue, Bridge# 37C- 168: CITY owned
Edes Street, Bridge# 37C-409: CITY owned four (4) RCB' s: Three 3) RCB' s 10 ft. wide x 7 ft. tall, One ( 1) 10 ft. wide x 9 ft. tall; Cosmo Avenue Bridge # 37C- 408: CITY owned four ( 4) RCB' s:

Three ( 3) RCB' s 10 ft. wide x 7 ft. tall, One ( 1) 10 ft. wide x 9 ft. tall;
Spring Avenue: CITY owned three RCB' s: Center RCB 10 ft. wide x 10 ft. tail, two side RCB' s 10 ft. wide x 9 ft. tall; Ciolino Avenue: Confluence with existing VALLEY WATER
owned 15 ft. wide x 8 ft. tall underground RCB, Underground loft. wide x 9ft. tall and loft. wide x 8ft. tall - high flow RCBs parallel along Ciolino Avenue, including confluence with CITY owned existing 72- in. Dewitt Creek storm drain. Note: The existing 72- inch Dewitt Creek storm drain is and remains the CITY' s operations and maintenance responsibility;
Del Monte Avenue ( Ciolino Avenue to North of West Dunne Avenue): VALLEY WATER owned underground loft. wide x 9ft. tall and loft. wide x 8ft. tall - high flow RCBs parallel with Dei Monte Avenue;
West Dunne Avenue: VALLEY WATER owned underground loft. wide x 9ft. tall and loft. wide x 8ft. tall - high flow RCBs crossing; Nob Hill Terrace: VALLEY WATER owned high flow horseshoeshaped underground tunnel 12 ft. tall x 14 ft. wide parallel within Nob Hill Terrace;
Hale Avenue ( Nob Hill Terrace to Warren Avenue): VALLEY WATER owned high flow horseshoe- shaped underground tunnel 12 ft. tall x 14 ft. wide parallel within Hale Avenue;
Warren Avenue ( at Hale): VALLEY WATER owned high flow
horseshoe- shaped underground tunnel 12 ft. tall x 14 ft. wide crossing;
Hale Avenue ( Warren Avenue to Wright Avenue): CITY owned underground 36- in RCP low flow storm drain, VALLEY WATER owned loft. wide x 9ft. tall and loft. wide x 8ft. tall - high flow RCBs parallel to and within Hale Avenue;
West Main Avenue: CITY owned underground 36- in RCP low flow storm drain, VALLEY WATER owned loft. wide x 9ft. tall and loft. wide x 8ft. tall - high flow RCBs crossing;
Wright Avenue: CITY owned underground 36- in RCP low flow storm drain, VALLEY WATER owned loft. wide x 9% tall and Oft.. wide x 8ft. tall - high flow RCBs crossing;
Hillwood Lane: CITY owned arched culvert;
Llagas Creek Drive: CITY owned arched culvert, 5ft.- 1 lin.± wide x 22ft.- 10in± tall;
Llagas Road: CITY owned RCB- Double Cell
8

If said VALLEY WATER maintenance work will involve the closure of any CITY streets/ traffic lanes, or will involve frequent trucking ( defined as more than one truck per hour) to and from the maintenance site, VALLEY WATER shall apply for the appropriate City permit and submit a traffic control plan to CITY. CITY staff will have five working days from receipt of the permit application and traffic control plan to review and suggest any modifications to VALLEY WATER. VALLEY WATER is not otherwise required to submit a traffic control plan to complete maintenance work associated with Flood Protection Features or Joint Flood Protection and Recreation Features as identified and defined in Article II( 1.) and ( 3.).

4. PARTIES acknowledge a portion of existing West Little Llagas Creek from Ciolino Avenue upstream to West Main Avenue is outside of the Project' s scope of work and operations, and maintenance responsibilities for such property shall comply and be limited to the terms and conditions of the PARTIES' existing right of way documents for this portion of West Little Llagas Creek:

Ciolino Avenue to Dunne Avenue: VALLEY WATER Easement
Deeds for existing 15 ft. wide x 8 ft. tall RCB beneath shopping center:
o # 1655462 Easement, recorded 6/30/ 1959;
o # 6767759 Easement, recorded 7/ 1/ 1980;
o # 11900477 Easement, recorded 5/ 12/ 1993;
o # 12750293 Easement, recorded 12/ 15/ 1994;
o # 12750297 Easement, recorded 12/ 15/ 1994;
Dunne Avenue: CITY owned crossing where VALLEY WATER
has no existing rights;
5' Street: CITY owned crossing where VALLEY WATER has no existing rights;
4`h Street: CITY owned crossing where VALLEY WATER has no existing rights;
Between 4th Street and 3rd Street: VALLEY WATER Easement Deed # 6388526; recorded 5/ 30/ 1979 for a 203± sf triangle shaped parcel;
3rd Street: CITY owned crossing where VALLEY WATER has no existing rights;
Del Monte Avenue: CITY owned crossing where VALLEY
WATER has no existing rights;
Warren Avenue: CITY owned crossing where VALLEY WATER
has no existing rights; and
Warren Avenue to West Main Avenue: VALLEY WATER Deeds:
o # 1994330 Easement, recorded 5/ 8/ 1961;
o # 1995042 Easement, recorded 5/ 9/ 1961;
o # 7468700 Fee Grant Deed( 7,250± sf), recorded 9/20/ 1982; o # 9198181 Easement, recorded 3/ 18/ 1987.
9

5. VALLEY WATER maintenance activities are to comply with all applicable City, County, and State regulations regarding traffic control.

VALLEY WATER further agrees, whenever practical, to schedule the use of said maintenance work to avoid or minimize disruption of the Recreation Features as identified and defined in Article II ( 2.), including special event activities held within the Project area.

B. CITY Maintenance Schedule

1. PARTIES acknowledge and agree CITY is responsible for performing routine maintenance for recreation, open space, and trails in a manner consistent with the CITY' s standard park/trail operations, and in accordance with the Joint Use Agreement (# A4201M) executed by the PARTIES, including any future amendments or renewals approved by the PARTIES. Accordingly, CITY agrees to notify VALLEY WATER' s designated superintendent at least ten ( 10) working days prior to commencement of any significant work, to coordinate with VALLEY WATER maintenance responsibilities to minimize public impacts.

Significant work shall consist of work that is not regular and routine in nature. Regular and routine in nature shall include litter/trash removal, graffiti abatement, weed abatement, and other similar activities.

2. PARTIES acknowledge and agree CITY is and remains responsible for the operation and maintenance responsibilities for the storm drainage system, outfalls, outfall structures/ headwalls, flap gates, and appurtenances that may discharge into the Project' s Flood Protection Features.

3. PARTIES further acknowledge and agree that CITY is responsible for the CITY owned structures,, including structural inspections and repairs and for performing maintenance ( i.e. street resurfacing) on street locations and street crossings associated with the Project as identified and defined in Article VI( A)(3).

C. CITY Event Schedule
CITY agrees to notify the VALLEY WATER' s designated superintendent at least thirty ( 30) calendar days prior to commencement of such events within the Project limits, so VALLEY WATER may coordinate their maintenance activities accordingly to minimize public impacts.

D. CITY and VALLEY WATER Designated Superintendents
CITY and VALLEY WATER agree, for proposed activities/work within the Project limits, to provide the other with the name and business telephone number of their designated superintendents for purposes of receiving the schedules and notice required under this Article VI, if different than their designated 10

superintendents identified in Article XI of this AGREEMENT. CITY and VALLEY WATER agree to notify the other in a timely manner in the event of any changes in the information regarding their designated superintendents.

VII. DAMAGE OR DESTRUCTION
A. Damage to CITY' s Improvements within VALLEY WATER' s Project right of way

1. In accordance with the terms and conditions of the Joint Use Agreement A4201M), VALLEY WATER is not responsible for any damage occurring to CITY improvements or structures located within VALLEY WATER' s Project right of way that results from VALLEY WATER' s maintenance, construction or reconstruction activities, or from its water management and/ or flood protection facilities located on or near this Project right of way, including ( without limitation) any flood flows, or inundation of West Little Llagas Creek onto Recreation Features or joint Flood Protection and Recreation Features. Further, CITY is responsible for any damage occurring to either VALLEY WATER' s or CITY' s improvements or structures located within VALLEY WATER' s Project right of way that result from the public' s use. All such costs for repairing such damage to VALLEY WATER' s or CITY' s improvements will be borne by CITY.

2. In the event CITY fails to perform its obligations under this Article in a timely fashion, VALLEY WATER shall, by written notice, provide CITY with an additional fifteen ( 15) days to cure. If, after such cure period, CITY has not taken the action( s) specified in this Article, VALLEY WATER, at VALLEY WATER' s sole option, shall have the right to proceed with such repairs or replacement and bill CITY for VALLEY WATER' s costs of same. By " costs," the PARTIES agree that such costs shall include the costs which are necessary to complete the work and a proportionate share of VALLEY WATER' s design, engineering, and administrative expenses.

B. Damage to CITY' s Improvements within CITY' s right of way

1. PARTIES agree VALLEY WATER is responsible for operations and maintenance of the Flood Protection Features as identified and defined in Article II (L). VALLEY WATER is responsible for any damage occurring to CITY improvements or structures located within CITY' s right of way that results from VALLEY WATER' s maintenance, construction or reconstruction activities.

By way of example, if VALLEY WATER damages existing CITY street improvements while VALLEY WATER performs sediment removal of 11

the reinforced concrete box culverts at existing CITY street crossings, all such costs for repairing such damage to CITY' s improvements will be borne by VALLEY WATER.

2. In the event VALLEY WATER fails to perform its obligations under this Article in a timely fashion, CITY shall, by written notice, provide VALLEY WATER with an additional fifteen ( 15) days to cure. If, after such cure period, VALLEY WATER has not taken the action( s) specified in this Article, CITY, at CITY's sole option, shall have the right to proceed with such repairs or replacement and bill VALLEY WATER for CITY' s costs of same. By " costs," the PARTIES agree that such costs shall include the costs which are necessary to complete the work and a proportionate share of CITY' s design, engineering, and administrative expenses.

C. Allocation of Costs
In the event that damage or destruction occurs to Flood Protection Features, Recreations Features, Joint Flood Protection and Recreation Features, or Mitigation Plantings from a cause not specifically addressed in this Article or from a combination of causes involving the acts and omissions of VALLEY WATER and CITY, the PARTIES agree to resolve the allocation of costs for repairing or replacing the affected facilities through the resolution process set forth in Article X of this AGREEMENT.

D. Rodent Control

1. PARTIES agree that Rodent Control is required for Joint Flood Protection and Recreation Features that benefits each PARTY. CITY may provide rodent control services on behalf of the community and as needed for the . protection of the Recreation Features at its sole cost. CITY agrees to notify VALLEY WATER' s designated superintendent at least ten ( 10) working days prior to commencement of such work.

2. PARTIES acknowledge and agree that VALLEY WATER may perform rodent control as required to protect Flood Protection Features and Mitigation Plantings at their sole cost. VALLEY WATER agrees to notify CITY' s designated superintendent at least ten ( 10) working days prior to commencement of such work.

VIII. SUCCESSORS AND ASSIGNS
This AGREEMENT, and all terms, covenants, and conditions hereof, shall apply to and bind the successors and assigns of the respective parties hereto.

W. MUTUAL INDEMNIFICATION PROVISIONS
12

A. Neither VALLEY WATER, nor any officer or employee or agent thereof, shall be held responsible for any damage or liability occurring by reason of anything done or omitted by CITY or public under or in connection with any work under this AGREEMENT. It is also understood and agreed that, pursuant to Government Code Section 895. 4, CITY shall fully defend, indemnify, and hold VALLEY WATER harmless from any liability imposed for injury ( as defined by Government Code Section 810. 8) occurring by reason of anything done or omitted by CITY under this AGREEMENT.

B. Neither CITY, nor any officer or employee or agent thereof, shall be held responsible for any damage or liability occurring by reason of anything done or omitted by VALLEY WATER under or in connection with any work, authority, or jurisdiction delegated to VALLEY WATER under this AGREEMENT. It is also understood and agreed that, pursuant to Government Code Section 895. 4, VALLEY WATER shall fully defend, indemnify, and hold CITY harmless from any liability imposed for injury ( as defined by Government Code Section 810.8) occurring by reason of anything done or omitted by VALLEY WATER under this AGREEMENT.

X. RESOLUTION OF DISPUTES
This AGREEMENT requires the PARTIES work together in good faith to achieve the intent of this AGREEMENT. In the event that a dispute arises as to the proper interpretation of the respective rights and responsibilities of the PARTIES under this AGREEMENT, or as to any other aspect of this AGREEMENT, the PARTIES agree that they each will assign the appropriate individuals to meet and make good faith efforts to negotiate in order to arrive at a resolution of the dispute.

If after employing this informal resolution process the parties are at impasse, either PARTY may request an independent, mutually agreed upon mediator to facilitate further negotiation with the costs shared equally by each party.

Nothing herein shall prevent either PARTY from exercising any rights it may have to enforce the terms of this AGREEMENT at law or in equity.

XL NOTICE AND SUPERINTENDENT DESIGNATION
Unless otherwise provided in this AGREEMENT, any notice, tender, or delivery collectively, " communications") to be given hereunder by either PARTY shall be in writing and shall be delivered by personal delivery, or by registered or certified mail, postage prepaid, return receipt requested. Communications delivered personally or sent by registered or certified mail, in accordance with this Article shall be deemed communicated when delivered upon receipt or refusal to accept delivery at the addresses specified in this Article. Each PARTY must appoint a superintendent to be directly in 13

charge of an organization which will be fully responsible for the continuous inspection, operation, and maintenance of the Project Features. Each PARTY has appointed as their superintendent the individual listed below. Each PARTY may change its superintendent, address, or telephone number by written notice given in accordance with this Article:

To VALLEY WATER: Valley Water
5750 Almaden Expressway
San Jose, CA 95118- 3686
Attn: Chief Executive Officer
Telephone Number: (408) 630-2084
To CITY: City of Morgan Hill
17575 Peak Avenue
Morgan Hill, CA 95037
Attn: City Manager
Telephone Number: ( 408) 776- 7382
XII. MISCELLANEOUS PROVISIONS
A. Singular and Plural: Words in the singular number shall be to include the plural, unless the context otherwise requires.

B. Time of Essence: Time is of the essence for the performance of all obligations under this AGREEMENT.

C. Choice of Law: This AGREEMENT shall be governed by and construed in accordance with the laws of the State of California. In the event that suit shall be brought by either party hereunder, the PARTIES agree that trial of such action shall be exclusively vested in a State court in the County of Santa Clara or, where appropriate, in the United States District Court for the Northern District of California, San Jose, California.

D. Captions: The captions inserted in this AGREEMENT are for convenience only, and in no way define, limit, or otherwise describe the scope or intent of this AGREEMENT, or any provision hereof, or in any way affect the interpretation of this AGREEMENT.

E. Entire Agreement: This AGREEMENT ( including the Joint Use Agreement A4201M and any future amendments or renewals approved by the PARTIES.) and VALLEY WATER' s latest Project Operations and Maintenance Guidelines, which are incorporated herein by reference) constitutes the entire understanding and AGREEMENT of the PARTIES with respect to the subject matter of this AGREEMENT, and contains all the covenants and agreements of the PARTIES with respect thereto. CITY and VALLEY WATER each acknowledge that no representations, inducements, promises, or agreements, oral or written, have been 14

made by CITY or VALLEY WATER, or anyone acting on behalf of CITY or VALLEY WATER, which are not contained herein, and any prior agreements, promises, negotiations, or representations not expressly set forth in this AGREEMENT are of no force or effect.

F. Waivers: The waiver by a PARTY to this AGREEMENT of any term, covenant, agreement, or condition herein contained shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant, agreement, or condition herein contained, nor shall any custom or practice which may develop between the parties in the administration of this AGREEMENT be construed to waive or lessen the right of a PARTY to insist upon the performance by the other PARTY in strict accordance with all of the provisions of this AGREEMENT.

G. Severability: If any clause or provision of this AGREEMENT is illegal, invalid, or unenforceable under present or future laws effective during the term of this AGREEMENT, then and in that event, it is the intention of the PARTIES hereto that the remainder of this AGREEMENT shall not be affected thereby, and it is also the intention of the PARTIES to this AGREEMENT that, in lieu of each clause or provision of this AGREEMENT that is illegal, invalid, or unenforceable, there be added as a part of this AGREEMENT a clause or provision as similar in terms to such illegal, invalid, or unenforceable clause or provision as may be possible and be legal, valid, and enforceable.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
15

p

WITNESS THE EXECUTION HEREOF,

CITY OF MORGAN HILL VALLEY WATER
A Municipal corporation of the County of A Special District, created by the California Santa Clara Legislature
By: By•
Chri tina urner Norma J. C49acho
City Manager Chief Executive Officer
ATTEST: ATTEST:

Miche e i on Michele L. King
Deputy City Clerk Clerk of the Board of Directors
APPROVED AS TO FORM: APPROVED AS TO FORM:

Dgnald Larkin Brian Hopper
City Attorney Senior Assistant District Counsel
16

11 CITY COUNCIL STAFF REPORT
MEETING DATE: August 20, 2025
PREPARED BY:

Hilary Holeman, Administrative Analyst
APPROVED BY: City Manager

RATIFY CITY POSITIONS ON PENDING LEGISLATION

RECOMMENDATION(S)

1. Ratify the City’s position opposing pending legislation Senate Bill 445 (Wiener) Transportation Projects: Permitting; and

2. Ratify the City's position supporting pending legislation Senate Bill 346 (Durazo) Local agencies: transient occupancy taxes: and short-term rental facilitator.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Supporting our Youth, Seniors, and Entire Community
Preserving and Cultivating Public Trust
Advocating for Local, Regional, and State Legislative Initiatives REPORT NARRATIVE:

Per Resolution No. 20-010 (Attachment 1), the City Council recognizes that occasional situations arise where communication indicating support or opposition to pending State, County, or other regional boards’ legislation or action that could be important and may occur prior to the next scheduled City Council meeting. Under these circumstances, the Mayor or City Manager is delegated the authority to prepare, execute and transmit written or verbal communications indicating a City’s position when any of the following criteria are met: a) the League of California Cities, or a similar organization, has requested the City to comment or take a position, b) the timing to express a position occurs prior to the next scheduled Council meeting, and c) the pending State, County, or other regional boards’ legislation or action clearly supports or clearly hinders the implementation or fulfillment of an adopted City Council Priority, Goal, or Strategy in a substantial manner such that it is in the best interest of the City to indicate its comment or position. When this occurs, a written report to the City Council for acceptance is required at the next possible meeting.

SB 445 (Wiener) Transportation Projects: Permitting
On July 3, 2025, the League of California Cities sent an Action Alert (Attachment 2) for cities to send letters in opposition of SB 445. SB 445 makes sweeping changes to the state’s process for permitting local projects and significantly impairs local governments’ ability to manage public infrastructure, ensure worker and public safety, and coordinate

11 across infrastructure sectors. Most concerningly, the bill grants project proponents— public or private—the authority to advance projects that could significantly alter or relocate critical infrastructure such as water, wastewater, and power, without consulting the affected city.

For these reasons, on July 8, 2025, the Mayor communicated an opposition letter (Attachment 3) electronically via the California Legislature Position Letter Portal and to the League of California Cities. The full SB 445 Bill Text is included as Attachment 4.

SB 346 (Durazo) Local agencies: transient occupancy taxes and short-term rental facilitator
On July 17, 2025, the League of California Cities sent an Action Alert (Attachment 5) for cities to send letters in support of SB 346. SB 346 enables enforcement of local ordinances related to short-term rentals, including the collection and remittance of transient occupancy taxes (TOT) by providing cities with the physical address of each short-term rental listed on the facilitator’s website and full audit authority of TOT dollars.

This bill ensures that the correct amount of TOT is being collected and remitted and allows for more effective enforcement against unlicensed units.

On July 25, 2025, the Mayor communicated a letter of support (Attachment 6) electronically via the California Legislature Position Letter Portal and to the League of California Cities. The full SB 346 Bill Text is included as Attachment 7.

COMMUNITY ENGAGEMENT:

Inform - this report serves to inform the Community on the City’s position on pending legislation that directly impacts the City of Morgan Hill.

ALTERNATIVE ACTIONS:

The City Council could rescind the positions taken.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

City Council periodically ratifies City positions on various pending State, County or other regional board legislation or actions that have a direct impact on the City of Morgan Hill.

FISCAL AND RESOURCE IMPACT:

Tracking legislation is an activity included in the annual workplan of the City Manager’s Office.

CEQA (California Environmental Quality Act):

Not a Project - administrative action/activity without an impact.

Cal Cities Action Alert
OPPOSE
SB 445 (Wiener) Transportation Projects: Permitting.

Action requested: Call or text your Assembly Member today to OPPOSE SB 445 (Wiener), which was amended this week to remove local discretion on infrastructure projects. SB 445 is currently in the Assembly Committee on Transportation, awaiting a hearing.

What the bill does: SB 445 makes sweeping changes to the state’s process for permitting local projects and significantly impairs local governments’ ability to manage public infrastructure, ensure worker and public safety, and coordinate across infrastructure sectors.

Most concerningly, the bill grants project proponents—public or private—the authority to advance projects that could significantly alter or relocate critical infrastructure such as water, wastewater, and power, without consulting the affected city.

Why this is important to Cal Cities members:
• Erodes local control over critical infrastructure that cities are obligated to maintain on behalf of their communities. The bill transfers key decision-making authority from local governments to external entities, including transit districts and the California State Transportation Agency (CalSTA), sidelining cities in the planning and delivery of infrastructure projects within their own jurisdictions. • Drastically alters the approval and coordination process of transportation projects and mandates several complex, prescriptive, and impractical timeframes. The bill imposes several onerous notification requirements on cities that do not reflect the complexity of infrastructure coordination, environmental review, and public engagement necessary for responsible project delivery.
• Requires local agencies to reimburse project applicants for review activities.

How to contact your Legislator: Find Your California Representatives Supporting documents: Cal Cities Opposition Letter; Sample SB 445 City Opposition Letter Questions? Montana Cruz [email protected] or Damon Conklin, Legislative Advocate, [email protected]

17575 Peak Avenue
Morgan Hill, CA 95037-4128
TEL: (408) 779-7271
FAX: (408) 779-3117
www.morganhill.ca.gov
July 8, 2025
The Honorable Lori Wilson
Chair, Assembly Committee on Transportation
1020 N Street, Suite 112
Sacramento, CA 95814
RE: SB 445 (Wiener) Transportation Projects: Permitting.

Notice of OPPOSITION (As amended 6/30/2025)
Dear Chair Wilson,
The City of Morgan Hill regretfully opposes SB 445 (Wiener), which seeks to create a new state permitting scheme for local projects that ultimately introduces sweeping and problematic changes that would significantly impair local government’s ability to manage public infrastructure, ensure worker and public safety, and coordinate fairly across all critical infrastructure sectors.

SB 445 proposes to drastically alter existing approval and coordination processes by imposing highly prescriptive and impractical timeframes that do not reflect the complexity of infrastructure coordination, environmental review, and public engagement necessary for responsible project delivery. Failure to meet notification and review deadlines results in automatic default decisions, potentially ignoring broader infrastructure impacts or unresolved technical issues. The process removes discretion from local agencies, handing decision-making power to the project proponent and California State Transportation Agency (CalSTA) via an unknown arbitrator (whose decision is immune against any appeals process), regardless of local objections or infrastructure risks. This shift effectively sidelines cities in the planning and delivery of infrastructure projects within their own jurisdictions. The result is a near-total erosion of local control over assets we are obligated to maintain and steward on behalf of our communities.

Most concerning, the bill appears to grant project proponents — public or private — total authority to move forward with projects that could significantly alter or relocate critical infrastructure such as water, wastewater, and power systems, within the public right of way, without meaningful consultation or resolution with the affected city. This undermines essential protections for worker safety, service continuity, and environmental integrity.

In Morgan Hill a project proponent could utilize this legislation to compel the approval of significant trenching work along a major thoroughfare like Monterey Road, directly conflicting with our city's scheduled pavement restoration and utility upgrades, which would result in wasted public funds and extended disruption for residents. This bill could also empower a proponent to unilaterally dictate the relocation of our critical water and sewer infrastructure, circumventing the necessary technical review by city engineers and risking the integrity and reliability of these essential services. Furthermore, the bill's process threatens to override carefully considered local planning efforts, such as our Downtown Specific Plan, potentially allowing a project that contradicts years of community input and strategic investment in our City’s core.

While we appreciate the desire to expedite certain infrastructure projects, we cannot support legislation that

sacrifices thoughtful planning, public safety, and equitable infrastructure prioritization in the name of speed.

SB 445, in its current form, is unworkable and sets a dangerous precedent for undermining local authority and infrastructure integrity.

We urge you to make SB 445 a two-year bill and work with local governments to craft solutions that balance the need for sustainable transportation improvements with the complex realities of infrastructure coordination and community impact.

For these reasons, the City of Morgan Hill regretfully must oppose SB 445 (Wiener).

Sincerely,
Mark Turner
Mayor
cc: The Honorable Scott Wiener
Assemblymember Gail Pellerin
Senator Dave Cortese
Montana Cruz, Regional Public Affairs Manager, League of California Cities, [email protected] Meg Desmond, League of California Cities, [email protected]

AMENDED IN ASSEMBLY JULY 9, 2025
AMENDED IN ASSEMBLY JUNE 30, 2025
AMENDED IN SENATE APRIL 10, 2025
AMENDED IN SENATE APRIL 9, 2025
SENATE BILL No. 445
Introduced by Senator Wiener
(Coauthor: Assembly Member Wilson)
February 18, 2025
An act to add Section 13985 to the Government Code, and to add Division 21 (commencing with Section 19001) to Section 187040 to, and to add and repeal Chapter 6 (commencing with Section 185520) of Division 19.5 of, the Public Utilities Code, relating to transportation. legislative counsel’s digest
SB 445, as amended, Wiener. Transportation: planning: Sustainable Transportation Project Delivery Reform Act. High-speed rail:
third-party permits and approvals: regulations.

The California High-Speed Rail Act creates the High-Speed Rail Authority (authority) to develop and implement a high-speed rail system in the state, with specified powers and duties, including the power to enter into contracts, as specified. The act establishes legal procedures for the relocation of publicly and privately owned utility facilities, as defined, when the authority requires any utility to remove any utility facility lawfully maintained in the right-of-way of any high-speed rail property to a location entirely outside the high-speed rail property right-of-way subject to specified conditions. The act authorizes the authority and any utility to enter into a specified agreement or contract to remove or relocate any utility facility that provides for, among other

95

things, the respective amounts of the cost to be borne by each party or that apportions the obligations and costs of each party.

Existing law creates the High-Speed Rail Authority Office of the Inspector General (office) and authorizes the High-Speed Rail Authority Inspector General (inspector general) to initiate an audit or review regarding oversight related to delivery of the high-speed rail project undertaken by the authority and the selection and oversight of contractors related to that project. Existing law requires the inspector general to submit annual reports to the Legislature and Governor regarding its findings.

This bill would require the authority, on or before January 1, 2026, to develop and adopt regulations setting forth requirements governing third-party permits and approvals that are necessary to deliver the high-speed rail project. The bill would require the authority to ensure that the regulations, among other things, identify the circumstances under which the authority would be required to seek to enter into a cooperative agreement with a third party, which the bill would define as a local agency or utility, that identifies who is responsible for specific utility relocations and the costs associated with those relocations. The bill would require the authority to consult with specified entities in developing the regulations and would require the authority to hold at least 2 public hearings regarding the proposed regulations.

This bill would prohibit the authority from implementing these regulations unless it completes the development and implementation of a process to review third-party agreements in a timely manner as recommended by the office, as specified. The bill would require the office, when it determines that the high-speed rail project is complete, to submit a report to the Legislature informing the Legislature of that fact. The bill would make the requirement to adopt these regulations inoperative on the date that the office submits that report to the Legislature.

This bill would declare its provisions to be severable.

To the extent this bill imposes additional duties on local entities, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state.

Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.
95 SB 445 — 2 —

Existing law establishes the Transportation Agency in state government with various duties and responsibilities. The agency is under the supervision of the Secretary of Transportation, who has the power of general supervision over specified departments and offices.

Existing law requires a local agency to comply with all applicable building ordinances and zoning ordinances of the county or city in which the territory of the local agency is situated and, for purposes of that requirement, excludes rapid transit districts and certain rail transit districts from the definition of a local agency.

This bill would enact the Sustainable Transportation Project Delivery Reform Act. The bill would authorize the secretary to grant a waiver to a local agency, as defined, that is seeking to design and construct a sustainable transportation project, as defined, from any standards, criteria, specifications, requirements, or other conditions of a third party, as defined, applicable to the sustainable transportation project if the secretary determines that granting the waiver will assist the local agency in delivering the sustainable transportation project in a cost-efficient and timely manner.

This bill would also require a third party, which is defined as a local agency or utility, to publish online by July 1, 2026, a list of every permit or approval that it may require for a facility rearrangement, as defined, and all objective standards, criteria, specifications, and requirements used in evaluating requests by lead agencies, as defined, for delivery of facility rearrangements, as specified. The bill would require the lead agency to provide a specified notice to each third party it reasonably expects it will need to get permits or approvals from or otherwise coordinate with to deliver the facility rearrangements. The bill would set forth a process for delivering the notice and responding to the notices, including by entering into a cooperative agreement or entering into a streamlined project delivery process, as described. The bill would, as part of the streamlined project delivery process, set forth timelines and specifications for submitting and responding to various information and documents for the facility rearrangements, among other things.

This bill would require the lead agency to reimburse the third party for all reasonable third party review activities required by the streamlined project delivery process, among other things. The bill would also authorize a lead agency to invoke a binding dispute resolution process, as described, if a third party does not issue a permit or approval to a lead agency or does not take any other action that is necessary to facilitate the delivery of part or all of a sustainable transportation project. 95 — 3 — SB 445

The bill would make its provisions severable and would make related legislative findings and declarations.

By imposing additional duties on local entities, this bill would impose a state-mandated local program.

The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state.

Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes.

State-mandated local program: yes.

The people of the State of California do enact as follows:
line 1 SECTION 1. This act shall be known, and may be cited, as the line 2 Sustainable Transportation Project High-Speed Rail Delivery line 3 Reform Act.
line 4 SEC. 2. The Legislature finds and declares all of the following:
line 5 (a)  Sustainable transportation projects are critical for the growth line 6 of the state in a manner that reduces greenhouse gas emissions and line 7 helps address the state’s housing shortage.
line 8 (a)  Utility relocation can become one of the greatest risk factors line 9 to the scope, schedule, and cost of transit and rail projects. line 10 (b)  The Federal Highway Administration finds that by line 11 addressing issues related to utility relocation proactively, line 12 construction projects can minimize the negative impacts on line 13 schedules, costs, and overall success.
line 14 (c)  The California high-speed rail project is important to state line 15 transportation priorities and the public good and it is critical that line 16 local government entities and state-regulated utility owners within line 17 the project’s alignment make the timely completion of the project line 18 a high priority.
line 19 (b)
line 20 (d)  Third-party permits and approvals for preconstruction and line 21 construction activities, including utility relocations, design review, line 22 and issuance of encroachment or other similar permits, can be have line 23 been a source of delay for sustainable transportation projects, 95 SB 445 — 4 —

line 1 potentially resulting in the California high-speed rail project line 2 contributing to cost escalations and projects the project being built line 3 late and over budget.
line 4 SEC. 3. Section 13985 is added to the Government Code, to line 5 read:
line 6 13985. (a)  The secretary may grant a waiver to a local agency line 7 that is seeking to design and construct a sustainable transportation line 8 project from any standards, criteria, specifications, requirements, line 9 or other conditions of a third party applicable to the sustainable line 10 transportation project if the secretary determines that granting the line 11 waiver will assist the local agency in delivering the sustainable line 12 transportation project in a cost-efficient and timely manner. line 13 (b)  The agency shall develop an application for local agencies line 14 to seek a waiver described in subdivision (a).
line 15 (c)  For purposes of this section, the following definitions apply:
line 16 (1)  “Local agency” has the same meaning as defined in Section line 17 19001 of the Public Utilities Code.
line 18 (2)  “Sustainable transportation project” has the same meaning line 19 as defined in Section 19001 of the Public Utilities Code. line 20 (3)  “Third party” has the same meaning as defined in Section line 21 19001 of the Public Utilities Code.
line 22 SEC. 4. Division 21 (commencing with Section 19001) is added line 23 to the Public Utilities Code, to read:
line 24
line 25 DIVISION 21. SUSTAINABLE TRANSPORTATION
line 26 PROJECT DELIVERY REQUIREMENTS
line 27
line 28 Chapter 1. Definitions
line 29
line 30 19001. For purposes of this division, the following definitions line 31 shall apply:
line 32 (a)  “Advanced partial design unit” means a portion of the design line 33 documentation for a facility rearrangement submitted to the third line 34 party for review and approval prior to submittal or approval of line 35 completed design documentation for that facility rearrangement. line 36 (b)  (1)  “Betterment” means work performed for a facility line 37 rearrangement that comprises an upgrade, change, or addition to line 38 a third-party facility, or to part of a third-party facility, that is line 39 requested by the third party, that provides for greater capacity, line 40 capability, durability, appearance, efficiency, or function or for 95 — 5 — SB 445