Morgan Hill City Council
October 21, 2026

City Council
Regular Meeting Agenda
Mark Turner - Mayor
Marilyn Librers - Mayor Pro Tem
Soraida Iwanaga - Council Member
Yvonne Martínez Beltrán - Council Member
Miriam Vega - Council Member
Wednesday, October 21, 2026
6:00 p.m.

Council Chamber Building
17555 Peak Avenue, Morgan Hill, CA 95037
Morgan Hill City Council meetings are held in person. Members of the public may attend in person or participate remotely through Zoom or by telephone. Information about how to observe and participate in the meeting is provided below.

MEETING PARTICIPATION
Language Interpretation / Interpretación de idiomas
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or scan the QR code below:

Tenemos Interpretación digital en vivo. Para usar la interpretación durante la reunión, visite:
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o escanee el código QR a continuación:

October 21, 2026
2 You can use a headset on your phone for audio or read the transcript on your device.

Tablets and disposable headphones will be provided in person during the meeting to those who do not have their own devices.

Puede usar audífonos en su celular para escuchar el audio o leer la transcripción.

Durante la reunión, se prestarán tabletas y audífonos desechables para las personas que no tengan su propio aparato.

Members of the public who need interpretation services or plan to bring an interpreter may request assistance from the City. Assistance may include coordinating interpretation services, arranging space for an interpreter, allowing additional time for interpretation, or accommodating personal interpretation equipment or services. Contact the City Clerk’s Office at (408) 779-7259 or by email at [email protected] at least 72 hours before the meeting. Requests received with less than 72 hours’ notice will be accommodated when reasonably possible, but assistance cannot be guaranteed.

Las personas que necesiten servicios de interpretación o que piensen traer a un intérprete pueden pedir ayuda a la Ciudad. La ayuda puede incluir coordinar servicios de interpretación, preparar un espacio para el intérprete, permitir más tiempo para la interpretación o permitir el uso de equipos o servicios personales de interpretación.

Comuníquese con la Oficina de la Secretaria Municipal al (408) 779-7259 o a [email protected] por lo menos 72 horas antes de la reunión. Las solicitudes recibidas con menos de 72 horas de anticipación se atenderán cuando sea posible, pero no se puede garantizar la ayuda.

Remote Participation
Members of the public may attend, observe, and participate in the meeting remotely through Zoom or by telephone. Meetings are also livestreamed on the City’s YouTube page. Automatic captions will be enabled in Zoom.

If a disruption of the City-provided remote access service prevents members of the public from attending or observing the meeting remotely, the City will follow its adopted disruption policy and the Ralph M. Brown Act. The City is not responsible for technical difficulties caused by a participant’s equipment, internet connection, telephone service, or other circumstances outside the City’s control.

To participate through Zoom, use the following link:
https://bit.ly/MHCityCouncilMeeting

October 21, 2026
3 Zoom participants should use the latest version of Zoom. Participants may be required to update Zoom before joining the meeting.

To participate by telephone, call (669) 900-9128 and enter webinar ID 873 3200 8380#.

Dial *9 to raise your hand. When called upon, dial *6 to unmute. Speakers may have up to three minutes.

PUBLIC COMMENT
Members of the public may provide oral public comment in person or remotely during the meeting. Written comments may be submitted before the meeting. Remote participants will receive the same speaking time as in-person participants.

Each speaker may have up to three minutes per item. If many people wish to speak about an item, the Mayor may reduce the speaking time for each speaker to accommodate additional speakers and maintain the orderly flow of the meeting.

Public comment will first be heard from participants attending in person who submitted speaker cards. The City will then call on Zoom participants who have raised their hands.

After all speakers have been heard, the public comment period for that item will close.

Remote participants may comment on all agenda items for which public comment is permitted. During regular meetings, remote participants may also comment during the general public comment period on matters within the City Council’s jurisdiction that are not listed on the agenda.

Written public comment may be submitted to the City Clerk:
• In person at the City Council Meeting;
• Via email to [email protected]; or
• Hand-delivered or mailed to the City Clerk at 17575 Peak Avenue, Morgan Hill, CA 95037
Please email comments no later than 3:00 p.m. the day before the meeting, so the City Council has time to review them. Comments may be submitted until noon on the day of the meeting, but Council Members may not have time to review them before the meeting. Comments received after noon on the day of the meeting will be provided to the City Council as time allows.

Written comments will not be read aloud during the meeting. They will be provided to the City Council, included in the meeting record, and posted on the City’s website. Do not include personal information that you do not want published. Communications sent to the City Council are public records and may be disclosed under the California Public Records Act and the Ralph M. Brown Act unless exempt from disclosure under applicable law. Written comments will generally be posted as submitted.

AMERICANS WITH DISABILITIES ACT (ADA)
In compliance with the Americans with Disabilities Act, a person with a disability may

October 21, 2026
4 request a disability-related modification, accommodation, auxiliary aid, or service needed to participate in the meeting. Contact the City Clerk’s Office at (408) 779-7259 or by email at [email protected] as early as possible, preferably at least two full business days before the meeting. Requests received with less notice will be accommodated when reasonably possible, but assistance cannot be guaranteed.

CALL TO ORDER

ROLL CALL ATTENDANCE

DECLARATION OF POSTING AGENDA

SILENT INVOCATION

PLEDGE OF ALLEGIANCE

RECOGNITIONS
Charles Garcia, Teacher - Morgan Hill Unified School District

PROCLAMATIONS
Brain Health & Dementia Prevention

PRESENTATIONS
Assembly Member Pellerin Recognition of Morgan Hill’s 120th Anniversary

CITY COUNCIL REPORTS
Council Member Vega

OTHER REPORTS

CITY MANAGER'S REPORT

CITY ATTORNEY'S REPORT

PUBLIC COMMENT FOR ITEMS NOT ON THE AGENDA
This opportunity for public comment is for items that are not on the agenda. If you would like to make comments on an item that is on the agenda, please wait until we get to that item to offer your comments. Members of the public are entitled to address the City Council concerning any item within the Morgan Hill City Council’s subject

October 21, 2026
5 matter jurisdiction. Public comments are limited to no more than three minutes. Except for certain specific exceptions, the City Council is prohibited from discussing or taking action on any item not appearing on the posted agenda. Public comment is intended for comments. Questions posed during public comment are not generally answered. If you have questions, please send them to the City Clerk at [email protected] to receive a response. (See additional noticing at the end of this agenda)

ADOPTION OF AGENDA

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

1. ACCEPT GRANT FUNDING FROM THE VALLEY TRANSPORTATION

AUTHORITY (VTA) FOR THE CONSTRUCTION OF FLEET CHARGERS AT

THE CORPORATION YARD
Recommendation:

1. Authorize the City Manager to execute and administer a grant agreement with the Valley Transportation Authority (VTA) for the receipt of $215,000 in grant funds; and

2. Adopt a resolution amending the City's Fiscal Year 2026-27 Capital Improvement Program Budget to appropriate $245,000 in the Public Facilities Impact Fund (347); $127,500 in the Wastewater Capital Project Fund (643); and $127,500 in the Water Capital Project Fund (653) for the construction of fleet chargers at the Corporation Yard.

2. APPROVE GENERATOR MAINTENANCE SERVICES AGREEMENT
Recommendation:

1. Approve a three-year agreement with Odyssey Power Corporation in the not to exceed amount of $430,935 for annual and preventive maintenance, repair, emergency repair, and rentals for the City’s 30 standby generators; and

2. Authorize the City Manager to execute and administer said agreement.

3. APPROVE ON-CALL FENCING CONTRACTOR MAINTENANCE SERVICE

AGREEMENTS
Recommendation:

October 21, 2026
6 1. Award maintenance service agreements to Silicon Valley Paving, Inc. and Tucker Construction, Inc. in the not to exceed amount of $220,000 each to provide on-call fencing maintenance and repair services; and

2. Authorize the City Manager to execute and administer said agreements.

4. APPROVE THE PURCHASE OF AN EASEMENT FROM THE COUNTY OF

SANTA CLARA FOR THE PG&E UNDERGROUNDING WORK ON HALE
AVENUE
Recommendation:

1. Adopt resolution approving the purchase of a public service easement (2,110 square feet), APN 764-19-028 for $2,100 from the County of Santa Clara for the Upper Llagas Creek Flood Protection Project; and

2. Authorize the City Manager to execute all documents and make minor modifications as necessary in order to consummate the transaction.

5. APPROVE THE SEPTEMBER 16, 2026 CITY COUNCIL MEETING MINUTES Recommendation:

Approve the September 16, 2026 City Council Meeting Minutes.

6. APPROVE THE TRANSFER OF TWO MONITORING WELLS TO SANTA

CLARA VALLEY WATER DISTRICT
Recommendation:

Authorize the City Manager to execute a Transfer of Ownership Agreement of the two monitoring wells with State Permit Numbers 09503E09R004 and 09503E09R005 to the Santa Clara Valley Water District.

OTHER BUSINESS

7. ACCEPT MORGAN HILL TOURISM BUSINESS IMPROVEMENT DISTRICT (MHTBID) OWNERS' ASSOCIATION ANNUAL REPORT (VISIT MORGAN HILL)
Recommendation:

Accept and File the Visit Morgan Hill Annual Report.

8. APPROVE THE MEMORANDUM OF AGREEMENT BETWEEN CITY OF

MORGAN HILL AND COUNTY OF SANTA CLARA REGARDING

ANNEXATIONS AND REGIONAL HOUSING NEEDS ALLOCATIONS FOR
2023-2031 HOUSING ELEMENT PLANNING PERIOD
Recommendation:

October 21, 2026
7 1. Approve entering into Memorandum of Agreement Between the City of Morgan Hill and the County of Santa Clara Regarding Annexations and Regional Housing Needs Allocations for 2023-2031 Housing Element Planning Period (“MOA”);

2. Authorize the City Manager to execute the MOA; and

3. Authorize the City Manager to execute an Agreement, in substantially the same form as Exhibit A to the MOA, for each parcel that is annexed to the City and that includes contemplated housing development.

PUBLIC HEARINGS

9. CERTIFY THE ENVIRONMENTAL IMPACT REPORT, ADOPT FINDINGS OF

FACT AND STATEMENT OF OVERRIDING CONSIDERATIONS AND

APPROVE VESTING TENTATIVE SUBDIVISION MAP AND DESIGN REVIEW PERMIT TO SUBDIVIDE AND CONSTRUCT 105 RESIDENTIAL LOTS WITH

ASSOCIATED INTERIOR STREETS, COMMON OPEN SPACE AREAS, AND

OFF-SITE IMPROVEMENTS
Recommendation:

1. Open/close public hearing;

2. Adopt a Resolution certifying the Environmental Impact Report (EIR), approve the Mitigation Monitoring and Reporting Program prepared for the project, and adopt Findings of Fact and Statement of Overriding Considerations;

3. Adopt a Resolution approving a Vesting Tentative Subdivision Map to subdivide a 15.8-acre site into 114 lots with 105 of them for residential use; and

4. Adopt a Resolution approving a Design Review Permit to allow for the construction of 105 single-family detached units with associated interior streets and common open spaces.

10. ADOPTION OF AN INTERIM ORDINANCE EXTENDING A MORATORIUM TO

PROHIBIT PROCESSING AND APPROVAL OF NEW LAND USE

APPLICATIONS FOR FREE STANDING DATA CENTERS AND GRID-SCALE

BATTERY ENERGY STORAGE SYSTEMS (BESS) WITHIN CITY LIMITS FOR 22 MONTHS AND 15 DAYS
Recommendation:

1. Determine the adoption of this Interim Ordinance is exempt from California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15061(b)(3); and

2. Introduce by title only, adopt, and waive further reading of Interim Ordinance, extending the existing 45-day moratorium prohibiting

October 21, 2026
8 processing and approval of new land use applications for Free Standing Data Centers and Grid-Scale Battery Energy Storage Systems for a period of 22 months and 15 days.

FUTURE COUNCIL INITIATED AGENDA ITEMS
Note: in accordance with Government Code Section 54954.2(a), there shall be no discussion, debate and/or action taken on any request other than providing direction to staff to place the matter of business on a future agenda.

ADJOURNMENT

October 21, 2026
9 NOTICE
Any documents produced by the City and distributed to the majority of the City Council less than 72 hours prior to an open meeting, will be made available for public inspection at the City Clerk’s Counter at City Hall located at 17575 Peak Avenue, Morgan Hill, CA, 95037 and at the Morgan Hill Public Library located at 660 West Main Avenue, Morgan Hill, California, 95037 during normal business hours. (Pursuant to Government Code 54957.5)

PUBLIC COMMENT
Members of the Public are entitled to directly address the City Council concerning any item described in the notice of this meeting during consideration of that item. If you wish to address the Council on any item on this agenda, please complete a speaker request card located in the foyer of the Council Chambers and deliver it to the Minutes Clerk before the City Council discussion on the item. You are not required to give your name on the speaker card to speak to the Council, but it is very helpful. When you are called, proceed to the podium, and the Mayor will recognize you. If you wish to address the City Council on any other item of interest to the public, you may do so during the public comment portion of the meeting following the same procedure described above. Please limit your comments to three (3) minutes or less.

Please submit written correspondence to the Minutes Clerk, who will distribute correspondence to the City Council.

Persons interested in proposing an item for the City Council agenda should contact a member of the City Council who may request an item on the agenda for a future City Council meeting. Council discussion or action may not be taken until your item appears on an agenda. This procedure is in compliance with the California Public Meeting Law (Brown Act) Government Code §54950.

City Council Policies and Procedures (CP 03-01) outlines the procedure for the conduct of public hearings.

Notice is given, pursuant to Government Code Section 65009, that any challenge of Public Hearing Agenda items in court, may be limited to raising only those issues raised by you or on your behalf at the Public Hearing described in this notice, or in written correspondence delivered to the City Council at, or prior to the Public Hearing on these matters.

The time within which judicial review must be sought of the action by the City Council, which acted upon any matter appearing on this agenda is governed by the provisions of Section 1094.6 of the California Code of Civil Procedure.

For a copy of City Council Policies and Procedures CP 97-01, please contact the City Clerk’s office (408) 779-7259, (408) 779-3117 (fax) or by email [email protected].

October 21, 2026
10

1 CITY COUNCIL STAFF REPORT
MEETING DATE: October 21, 2026
PREPARED BY:

Chris Ghione, Public Services Director
APPROVED BY: City Manager

ACCEPT GRANT FUNDING FROM THE VALLEY TRANSPORTATION

AUTHORITY (VTA) FOR THE CONSTRUCTION OF FLEET CHARGERS

AT THE CORPORATION YARD

RECOMMENDATION(S)

1. Authorize the City Manager to execute and administer a grant agreement with the Valley Transportation Authority (VTA) for the receipt of $215,000 in grant funds; and

2. Adopt a resolution amending the City's Fiscal Year 2026-27 Capital Improvement Program Budget to appropriate $245,000 in the Public Facilities Impact Fund (347); $127,500 in the Wastewater Capital Project Fund (643); and $127,500 in the Water Capital Project Fund (653) for the construction of fleet chargers at the Corporation Yard.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Protecting the Environment and Preserving Open Space and Agricultural Land Maintaining and Enhancing Infrastructure
Strategic Priorities 2026-2027
Fiscal Sustainability
Guiding Documents
Climate Action Plan
REPORT NARRATIVE:

On September 3, 2026, the Santa Clara Valley Transportation Authority (VTA) Board approved an allocation of $215,000 in FY 2026-27 Transportation Fund for Clean Air (TFCA) County Program Manager grant funds for the City's Corporation Yard Electric Vehicle Charging Stations Project.

The proposed project involves the installation of three electric vehicle (EV) chargers at the City’s Corporation Yard. As the City continues to expand its municipal fleet electrification, these chargers will provide vehicle charging to support day-to-day Public

1 Services Department utilities and maintenance operations. Deploying this infrastructure aligns with the City Council’s ongoing commitment to protecting the environment and implementing the strategies of the City’s Climate Action Plan.

The total estimated cost for the charging station installation and related site improvements is $500,000. Under the terms of the agreement, VTA will reimburse eligible project costs up to $215,000 on a reimbursable basis. Approval of the recommended actions will authorize execution of the agreement and appropriate the necessary funds to proceed with the project.

COMMUNITY ENGAGEMENT:

Involve
Significant public engagement was conducted during the development of the City's Climate Action Plan. Because this project involves internal municipal infrastructure installed within a secured, city-owned facility to support fleet operations, broader public outreach was not performed.

ALTERNATIVE ACTIONS:

The City Council may choose not to accept the $215,000 TFCA grant. This action would require the City to either fully fund future fleet charging infrastructure using City funds or delay the planned transition to electric fleet vehicles. This is not recommended as it is not aligned with the City's Climate Action Plan and would not support the City in meeting the State mandated electric vehicle conversion requirements.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

There are no prior City Council Actions taken specifically on this item. The City Council approved the Corporation Yard Master Plan on May 15, 2019, for which these improvements are aligned with. The City Council approved the City's Climate Action Plan on October 7, 2020.

FISCAL AND RESOURCE IMPACT:

Additional grant funding of $30,000 is available to the City from Silicon Valley Clean Energy (SVCE) for this project. Combined with up to $215,000 in Transportation Fund for Clean Air (TFCA) County Program Manager funds from the VTA, total grant funding for the project is $245,000. The remaining project cost of $255,000 will be funded from the Wastewater and Water Capital Project Funds.

The grant funding will fully offset the General Fund contribution previously anticipated for the charging project and will also offset a portion of the Utilities contribution. Staff will continue to pursue additional grant funding opportunities to further reduce the City's contribution. However, the project must move forward at this time to ensure compliance with VTA grant funding requirements.

CEQA (California Environmental Quality Act):

Categorical Exemption

1 The installation of EV chargers at the existing Corporation Yard is categorically exempt per Class 1, Existing Facilities, which exempts minor alterations of existing public structures or facilities involving negligible or no expansion of existing use, and Class 3, New Construction or Conversion of Small Structures.

SANTA CLARA VALLEY TRANSPORTATION

AUTHORITY CONGESTION MANAGEMENT PROGRAM
TRANSPORTATION FUND FOR CLEAN AIR AGREEMENT FY 2026/27
This agreement (“Agreement”) is entered into between the City of Morgan Hill, a California municipal corporation (“Sponsor”) and the SANTA CLARA VALLEY TRANSPORTATION AUTHORITY, a California special district, (“VTA”) and will be effective beginning on July 1, 2026 (“Effective Date”). Hereinafter, Sponsor and VTA may be individually referred to as a “PARTY” or collectively referred to as the “PARTIES”.

I. RECITALS
This Agreement is made with reference to the following facts:

A. VTA has been designated, by resolutions of the County of Santa Clara and most of the cities therein, as the Program Manager for Santa Clara County’s Transportation Fund for Clean Air (“TFCA”) funds under the State of California Health and Safety Code Section 44241; B. Pursuant to that designation, VTA is responsible for allocating and administering the County of Santa Clara’s TFCA County Program Manager (“CPM”) Fund to eligible project sponsors in accordance with the State of California Health and Safety Code Sections 44241 and 44242 and 27- SC Funding Agreement between VTA and the Bay Area Air Quality Management District (“Air District”);
C. On September 3, 2026, the VTA Board approved the programming of Fiscal Year (“FY”) 2026/27 TFCA CPM funds for the Morgan Hill Corporation Yard Electric Vehicle Charging Stations project(s) (“Project(s)”); and
D. This Agreement specifies the conditions under which VTA will allocate and administer a grant(s) from the TFCA CPM Fund to Sponsor for FY 2026/27.

Now, therefore the Parties agree as follows:

II. Agreement
A. Project Description
The Project details are attached hereto as Attachment A.

B. Term of Agreement

1. The term of this Agreement shall be deemed to have commenced retroactively as of July 1, 2026 and shall continue until the earlier of: (i) the date that the Project(s) is completed or terminated in accordance with Section R (Termination); or (ii) the close of business on December 31, 2032.

2. The Grant Funds must be expended within two (2) years of receipt of the first transfer of funds from the Air District to the VTA in the applicable fiscal year, unless one of the following applies:
a. Multi-Year Funded Project: If VTA requests multi-year funding in compliance with the Air District’s Transportation Fund for Clean Air 40% Fund Expenditure Plan Guidance Commencing Fiscal Year 2026-2027 (“TFCA Guidance”); and the Air District approves the request for multi-year funding. b. Extensions of Expenditure Deadline: If VTA finds that a project will take a longer period to implement or that significant progress has been made on a project, then VTA can approve no more than three one-year schedule extensions for a project, as memorialized in writing by VTA. Any subsequent schedule extensions for projects may be given on a case-by-case basis only by written amendment to this Agreement, if the Air District finds that significant progress has been made on a project, and the Funding Agreement is amended to reflect the revised schedule.

3. In addition to the specific term of this Agreement, Sponsor must maintain each Project for the Years of Effectiveness prescribed in Section I.2 herein.

C. Work Product.

Sponsor must place in the public domain any software, written document, or other product developed with funds received through this Agreement, to the extent not otherwise prohibited by law, and to the extent required by the California Public Records Act (California Government Code Sections 7920.000 et seq.).

D. Grant of TFCA Funds.

Subject to appropriation and receipt of TFCA funds (as further set forth in Section K, below), VTA hereby agrees to allocate to Sponsor a TFCA grant in an amount not to exceed 215,000 DOLLARS ($215,000) (the “Grant Funds”) in consideration for Sponsor’s agreement to implement and complete the Project(s), as further set forth in the Project Summary(ies) attached hereto as Attachment A, in accordance with the terms and conditions set forth in this Agreement.

In consideration of VTA providing Sponsor with the Grant Funds, Sponsor hereby agrees to implement and complete the Project(s) in conformance with the terms and conditions of this Agreement. In implementing the Project(s), Sponsor shall comply with reporting requirements as described in Section J.

E. Proper Expenditure

1. Sponsor must assure that all Grant Funds received under this Agreement are expended only in accordance with all applicable provisions of federal, state, and local laws, and Sponsor shall require any other sub-recipients of Grant Funds for the Project(s) to do the same.

2. Sponsor must comply with all TFCA program requirements, as set forth in the Air District’s County Program Manager Fund Expenditure Plan Guidance Fiscal Year Ending (FYE) 2027 (“Guidance”) and the 27-SC Funding Agreement between VTA and the Air District. These documents, including appendices and revisions, are incorporated herein and made a part hereof by this reference as if fully set forth herein and will be provided by VTA to Sponsor upon written request.

F. Reimbursement

1. VTA will reimburse Sponsor in the amount of: (i) Eligible Costs, as defined in Section G, submitted to VTA; or (ii) the Grant Funds, whichever is less. VTA will reimburse Sponsor based on receipt of invoices showing Eligible Costs incurred and paid for by Sponsor.

VTA will not reimburse Sponsor for any costs that are not Eligible Costs.

2. If this Agreement is terminated, as set forth in Section R, VTA will not be responsible for reimbursing any costs or expenses Sponsor incurs after the effective date of termination.

3. Funds for the Projects described in this Agreement, which are not spent by prior to June 30, 2028 and submitted for reimbursement within four months, will not be available to reimburse Project costs unless a Project schedule, which extends the Project completion date beyond June 30, 2028, has been approved by either VTA or the Air District.

G. Eligible Use of Funds

1. Eligible Costs. VTA will only reimburse Sponsor for actual costs directly related to performance of the Project. For purposes of this Agreement, “Eligible Costs” are as described below. No other expenses will be subject to reimbursement as Eligible Costs without the prior written approval of VTA.
a. Documented hourly labor charges (salaries, wages, and benefits) directly and solely related to implementation of the TFCA project;
b. Capital equipment and installation costs;
c. Shuttle driver labor and equipment maintenance costs; d. Contractor labor charges related to the TFCA project; e. Travel, training, and associated personnel costs that are directly related to the implementation of the TFCA-funded project (e.g., the cost of training mechanics to service TFCA-funded natural gas clean air vehicles); f. Indirect costs associated with implementing the project, including reasonable overhead costs incurred to provide a physical place of work (e.g., rent, utilities, office supplies), general support services (e.g., payroll, reproduction), and managerial oversight. Project Sponsors should itemize these costs and, for each item, provide evidence that it supports the implementation of the project; and g. The following approved list of administrative projects costs:
i. Costs associated with administering the TFCA Funding Agreement (e.g., responding to requests for information from Air District and processing amendments). Note that costs incurred in preparation of a TFCA application or costs incurred prior to the execution of the Funding Agreement are not eligible for reimbursement;
ii. Accounting for TFCA funds; and
iii. Fulfilling all monitoring, reporting, and record-keeping requirements specified in the TFCA Funding Agreement, including the preparation of reports, and invoices.

2. Ineligible Costs. Ineligible costs are costs not specifically identified as “Eligible Costs.” Specific “Ineligible Costs” include, but are not limited to, the following:
a. Planning activities that are not directly related to the implementation of a specific project or program;
b. Costs to prepare proposals and/or grant applications; c. Direct or indirect financial transit or rideshare subsidy exclusively to employees of the Sponsor;
d. Remanufactured or refurbished vehicles, equipment, and parts; e. Purchase of personal computers; and
f. Profit.

3. If the Sponsor is unsure about the eligibility of a cost, then the Sponsor must seek and obtain written VTA approval of the cost before the Sponsor incurs it. Failure to obtain VTA’s prior approval of potentially ineligible costs may result in non-reimbursement of the cost.

H. Invoicing to VTA.

1. Sponsor must submit invoices to [email protected] for reimbursement of work completed on the Project. Each invoice must include all records, including staff hours, contractors’ invoices, miscellaneous invoices, force account charges, and any other documentation requested by VTA as substantiation for invoices submitted for reimbursement. Invoices may not be submitted more frequently than monthly and must be submitted within one year of Sponsor incurring the cost(s).

2. All invoices must follow VTA invoice template and detail:
a. Project name and ID;
b. Eligible Costs actually incurred and paid by Sponsor;

3. Total reimbursement amount (in dollars) requested;
a. Total funds available for reimbursement to date; and b. All records, including staff hours, contractors’ invoices, miscellaneous invoices, force account charges, and any other documentation requested by VTA.

4. VTA will remit the amount due to Sponsor within 30 calendar days of receipt of a complete, fully documented invoice.

I. Return of Funds. The provisions set forth in this section will survive the termination or expiration of this Agreement.

1. In the event that VTA reimburses costs and later learns that such costs are not Eligible Costs, Sponsor must, no later than fifteen (15) business days after receipt of written notice thereof from VTA, return the full amount of the funding received for such costs to VTA.

2. Sponsor must also return the Grant Funds to VTA if the Project(s) are not delivered, maintained and/or operated throughout and until the conclusion of the years of effectiveness (“Years of Effectiveness”). This is the default value stated in the Air District’s Guidance for the applicable project type, unless a different value was approved by the Air District and shown to yield a project that meets the cost-effectiveness requirement specified in the TFCA Guidance document cited above. The amount of Grant Funds returned to the Program Manager must be calculated on a prorated basis based on the length of a project’s Years of Effectiveness.

J. Sponsor’s Responsibilities.

1. Implementing Agency Tasks. Sponsor will be the sponsor and implementing agency for the Project. In its role as sponsor and implementing agency under this Agreement, Sponsor must perform the following tasks:
a. Procure professional services, as needed, for the Project including, but not limited to, the following activities: advertising the work via a public solicitation, opening bids in response to the public solicitation, awarding a contract, approving contract documents, and administering the awarded contract in accordance with all applicable laws, regulations, and codes including, but not limited to, the California Public Contract Code and the California Labor Code; b. Obtaining all necessary permits for performance of the Project, as applicable; c. Performing community engagement activities for the Project, as applicable; d. Make staff available to present on the Project at VTA committees as needed; and
e. Conducting standard close-out activities for the Project including, but not limited to, performing final accounting review and reviewing all contractual requirements.

2. Other Project Management Duties. Sponsor must also perform the following duties:
a. Actively monitor actual Project expenditures to ensure that the funds are used to reimburse Eligible Costs only;
b. Provide VTA with an interim project report in May and October of each year until the Project(s) is/are completed, and all closeout requirements have been fulfilled. Reports are due from Sponsor to VTA no later than May 15 and October 15 of each year as a condition of receiving funds. One form should be submitted for each Project listed in Attachment A, and cover activities and expenditures incurred through April 30 (for the May 15 report) and September

30 (for the October 15 report). VTA will supply the Interim Project Report form to Sponsor for this requirement; and
c. Sponsor must submit a Post-Project Cost-Effectiveness Worksheet for each completed Project using the Air District-approved spreadsheet appropriate for the specific project type. Post-project evaluations should be completed using the version of the Cost-Effectiveness worksheet for the year the purchased, installed, or constructed project became available for use by the public. VTA will provide the worksheets for this requirement.

K. Funds Subject to Appropriation/Allocation of Funds Contingent on Appropriation. VTA’s obligations under the terms of this Agreement are contingent upon and subject to the allocation of TFCA funds to VTA by the Air District under VTA’s 27-SC Funding Agreement with the Air District for approved projects during Fiscal Year 2026/27.

L. Review. VTA may review Sponsor’s progress in implementing the Project(s) after receiving the third interim project following execution of this Agreement. If progress after the third interim project report is insufficient to implement any Project or to expend the funds within the period described in Section B, VTA may develop an action plan with Sponsor to ensure that the Grant Funds are not required to be repaid to VTA and/or the Air District. The action plan may include reprogramming funds to other projects within Santa Clara County to ensure their expenditure prior to the term expiration date described in Section B.

M. Indemnification.

1. Neither VTA nor any officer or employee thereof will be responsible for any damage or liability arising out of or relating to Sponsor’s negligence, recklessness, or willful misconduct under or in connection with any work, authority, or jurisdiction associated with the Agreement. Sponsor shall fully indemnify and hold VTA harmless from any liability imposed for injury (as defined by Government Code §810.8) arising out of or relating to Sponsor’s negligence, recklessness, or willful misconduct under or in connection with any work, authority or jurisdiction delegated to Sponsor under this Agreement.

2. Neither Sponsor nor any officer or employee thereof will be responsible for any damage or liability arising out of or relating to VTA’s sole negligence, or willful misconduct under or in connection with any work, authority, or jurisdiction associated with the Agreement.

3. These provisions shall survive the termination of this Agreement.

N. Insurance. At all times during this Agreement, Sponsor must comply with the insurance requirements and specifications of the attached Attachment B, Insurance Requirements.

Sponsor may, in its discretion, elect to self-insure, but any such self-insurance must meet the requirements and specifications in Attachment B.

O. Additional Insured and Indemnity Provision. In any agreement executed between the Sponsor and a third party for purposes related in any way to the subject matter of this Agreement (“Third Party Contract”), Sponsor must require that VTA be named as (i) an additional insured on a primary and non-contributory basis with separation of insureds and waiver of subrogation on all policies of insurance, except when not applicable and (ii) an indemnified party in any indemnity provision contained in the Third Party Contract. Third Party Contracts must contain insurance requirements with coverages at least as broad as, and limits at least as great as, the requirements of Attachment B.

P. Public Works. If Sponsor awards a contract to a third party for the performance of a public work, as defined in California Labor Code Sections 1720 through 1720.6 (“Public Works Contract”), in connection with this Agreement, Sponsor must comply, and must require such third party to comply, with the requirements of California Labor Code Sections 1720 et seq. If the Public Works Contract is funded in whole or in part with federal funds, Sponsor must also comply, and must require such third party to also comply, with the requirements of the Davis Bacon Act (40 U.S.C. Sections 3141-3144 and 3146-3148).

Q. Compliance with Applicable Law. In the execution of the Project and performance of its responsibilities under this Agreement, Sponsor must comply with all applicable requirements of local, state, and federal laws.

R. Termination

1. Voluntary. Either Party may terminate this Agreement and/or a Project at any time by giving written notice of termination to the other Party which must specify the effective date thereof. Notice of termination under this paragraph must be given at least ninety (90) days before the effective date of such termination unless the Parties mutually agree to an earlier termination date.
a. If VTA terminates this Agreement and/or a Project pursuant to this provision, the Sponsor must cease all work under this Agreement and cease further expenditures of Grant Funds received under this Agreement for the terminated Project immediately upon receipt of the notice of termination, excepting any work permitted to continue that is specified in the notice of termination. VTA will review the project to determine if it will still reduce emissions, and if it does,

VTA may reimburse Sponsor for eligible funds and no further Grant Funds will be provided for that Project.
b. If Sponsor terminates this Agreement and/or a Project pursuant to this provision, the Sponsor must return all Grant Funds provided by VTA for the specific Project up to and including the date of termination.

2. After Breach. VTA may terminate this Agreement and/or a Project for breach. Upon any breach, VTA will deliver a written notice of termination for breach to Sponsor that specifies the date of termination, which will be no less than ten (10) business days from delivery of such notice and will provide the Sponsor an opportunity to contest such breach within that period of time. If Sponsor contests the notice of termination for breach, VTA will provide written notice of VTA’s determination of Sponsor’s contestation. If VTA upholds the termination for breach, the written notice will specify the effective date of termination and Sponsor will have ten (10) business days to cure. If the breach is not cured within the allotted time, the Agreement will automatically terminate. The notice of termination will specify the Total Grant Funds VTA has paid to the Sponsor, which Sponsor must reimburse to the VTA within thirty (30) days of the effective date of termination.

S. Non-Performance.

1. If Sponsor causes all or part of these Grant Funds to be subject to repayment to the CPM Fund because of failure to complete the Project(s) according to the scope of work described in Attachment A, Sponsor’s next grant allocation of any kind that is from or passes through VTA may be reduced by the amount that VTA repaid to the CPM Fund.

T. Audit and Records.

1. Sponsor must maintain, and must require their contractors to maintain, in accordance with generally accepted accounting principles and practices, complete books, accounts, records, and data pertaining to services performed under this Agreement, including the costs of contract administration. Such documentation must be supported by properly executed payrolls, invoices, contracts, and vouchers evidencing in detail the nature and propriety of any charges and must be sufficient to allow a proper audit of services. All checks, payrolls, invoices, contracts, and other accounting documents pertaining in whole or in part to the services must be clearly identified and readily accessible.

2. For the duration of the Agreement, and for a period of five years after each Project(s) Years of Effectiveness, each Party and its representatives must have access during normal business hours to any books, accounts, records, data, and other relevant documents (“Records”) of the other Party that are pertinent to this Agreement for

audits, examinations, excerpts, and transactions. The other Party must furnish copies of the Records upon request.

3. This Agreement is subject to the examination and audit of the California State Auditor pursuant to California Government Code Section 8546.7 for a period of five (5) years after each Project(s) Years of Effectiveness. Audits may also be conducted by an auditor chosen by the Air District or VTA.

4. Sponsor must:
a. Allow VTA and Air District staff, authorized representatives, and independent auditors, during the term of this Agreement and for five (5) years from the end of each Project(s) Years of Effectiveness, to conduct performance and financial audits and to inspect the Project(s). During audits, Sponsor must make available to the auditor, in a timely manner, all records relating to Sponsor’s implementation of the Project(s). During inspections, Sponsor will provide, at the request of VTA or the Air District, access to inspect the Project(s) and related records.
b. Maintain employee time sheets documenting those hourly labor costs incurred in the implementation of the Project(s), including both administrative and implementation costs, or to establish an alternative method to document staff costs charged to the Project(s). Sponsor must keep such documents in a central location for a period of five (5) years from the end of each Project’s Years of Effectiveness.
c. Keep all financial and implementation records necessary to demonstrate compliance with this Agreement and the TFCA Program. Such records must include documentation that demonstrates significant progress made for those Project(s) seeking extensions to the completion date. Sponsor must keep such documents in a central location for a period of five (5) years from the end of each Project’s Years of Effectiveness.

U. Notices / Authorized Representatives.

1. Notices must be in writing and addressed to the other Party’s Authorized Representative (“Recipient”) and will be deemed delivered or received on the date personally delivered to the Recipient or when deposited by registered or certified mail with postage and charges prepaid.

2. The Parties Authorized Representatives are as follows:

VTA:

Marcella Rensi
Deputy Director, Grants
Santa Clara Valley Transportation Authority

3331 N First Street
San Jose, CA 95134
Email: [email protected]

3. City of Morgan Hill:

Attn: Chris Ghione, Public Services Director
17575 Peak Avenue
Morgan Hill, CA 95037
Email: [email protected]

4. Written notification to the other Party must be provided, in advance, for changes in the name or address of an Authorized Representative stated above.

V. General Terms and Conditions.

1. Headings. The subject headings of the articles and paragraphs in this Agreement are included for convenience only and will not affect the construction or interpretation of any of its provisions.

2. Incorporation of Exhibits and Attachments. All exhibits and attachments referenced in this Contract are incorporated into it by this reference.

3. Construction and Interpretation of Agreement. This Agreement, and each of its provisions, terms, and conditions, has been reached as a result of negotiations between the Parties. Accordingly, each Party expressly acknowledges and agrees that (i) this Agreement will not be deemed to have been authored, prepared, or drafted by any particular Party and (ii) the rule of construction to the effect that ambiguities are to be resolved against the drafting party will not be employed in the interpretation of this Agreement or in the resolution of disputes.

4. Amendment. Except as expressly provided in this Agreement, its provisions cannot be altered, modified, or amended except through the execution of a written amendment executed by the Parties.

5. Entire Agreement. This Agreement constitutes the entire agreement between the Parties relating to the subject matter and supersedes all prior negotiations, contracts,

agreements, or understandings, whether oral or written, of the Parties regarding the subject matter.

6. No Waiver. The failure of either Party to insist upon the strict performance of any of the terms, covenants, or conditions of this Agreement will not be deemed a waiver of (i) any right or remedy that either Party may have or (ii) either Party’s right to require strict performance of all of the terms, covenants, and conditions of this Agreement.

7. Dispute Resolution.
a. If a question or allegation arises regarding (i) interpretation of this Agreement or its performance, or (ii) the alleged failure of a Party to perform, the Party raising the question or making the allegation must give written notice thereof to the other Party. The Parties must promptly meet in an effort to resolve the issues raised. If the Parties fail to resolve the issues raised, alternative forms of dispute resolution, including mediation, may be pursued by mutual agreement.

It is the intent of the Parties to the greatest extent possible to avoid litigation as a method of dispute resolution.
b. Notwithstanding the foregoing, nothing in this Section V will be deemed to prevent a Party from filing suit or an administrative action to preserve its right to assert a claim within any applicable statute of limitations. To the extent practicable, the Parties will negotiate in good faith to create a tolling agreement to toll such statute(s) of limitations to allow for the Parties to engage in dispute resolution provisions of this Agreement prior to filing of such actions.

8. Severability. If any provisions of this Agreement (or portions or applications of it) are held to be unenforceable or invalid by any court of competent jurisdiction, (a) the Parties will negotiate in good faith to make an equitable adjustment to the Agreement provisions with a view toward effecting the Agreement’s purpose, and (b) the remaining provisions (or portions or applications of them) will remain valid and enforceable.

9. Governing Law. The laws of the State of California will govern this Agreement and any claim that might arise between Sponsor and VTA without regard to conflict of law provisions.

10. Venue. Any lawsuit or legal action arising from this Agreement must be commenced and prosecuted in the courts of Santa Clara County, California. The Parties agree to submit

to the personal jurisdiction of the courts located in Santa Clara County, California for the purpose of litigating all such claims.

11. Ownership of Work. All reports, designs, drawings, plans, specifications, schedules, studies, memoranda, and other documents assembled for or prepared by or for the Sponsor relative to the Project are the sole property of the Sponsor unless otherwise agreed upon by the Sponsor.

12. Attribution to VTA.
a. Sponsor must acknowledge both VTA and Air District as funding sources during the implementation of the Project(s) and must use the VTA and the Air District approved logos as specified below:
i. The logos must be used on signs posted at the site of any project construction;
ii. The logos must be displayed on any vehicles or equipment operated with or obtained as part of the Project(s);
iii. The logos must be used on any material intended for public consumption associated with the Project(s), such as websites and printed materials, including transit schedules, brochures, handbooks, maps created for public distribution, and promotional material; and iv. Sponsor will demonstrate to VTA, through evidence such as photographs of vehicles, equipment, construction signs, and copies of press releases, that the logos are used and displayed as required by this Section.
v. Sponsor must acknowledge VTA and Air District as a funding source in any related articles, news releases, or other publicity materials for the Project(s) that are produced or caused to be produced by Sponsor. b. VTA will provide a copy of Air District and VTA logos to Sponsor for use in fulfilling Sponsor’s obligations under this Section.

13. Non-discrimination. The Parties and any contractors performing services on behalf of the Parties (“Contractors”) will not unlawfully discriminate or permit discrimination, harass, or allow harassment against any person or group of persons because of race, color, religious creed, national origin, ancestry, age (over 40), sex, gender, gender identity, gender expression, sexual orientation, marital status, pregnancy, childbirth or related conditions, medical condition (including cancer), mental disability, physical disability (including HIV and AIDS), genetic information, or military and veteran’s status, or in any manner prohibited by federal, state, or local laws. In addition, the Parties and Contractors must not unlawfully deny any of their employees family care leave or discriminate against such employees on the basis of having to use family care leave. The Parties and Contractors must ensure that the evaluation and treatment of their

employees and applicants for employment is free of such discrimination and harassment.

14. Public Records. The Parties recognize and acknowledge that each Party is subject to the California Public Records Act (California Government Code Section 7920.000 et seq.).

Public records are subject to disclosure.

15. Relationship of the Parties. It is understood that this is an Agreement by and between independent parties and does not create the relationship of agent, servant, employee, partnership, joint venture or association, or any other relationship other than that of independent contractor.

16. Counterparts; Electronic Signatures. This Agreement may be executed in one or more counterparts, each of which will be deemed an original but all of which will constitute one and the same instrument. Unless otherwise prohibited by law, VTA policy, or Sponsor ordinance or 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 writing as set forth in Evidence Code Section 1550. The term “electronically signed contract” means a contract that is executed by applying an electronic signature using technology approved by each of the Parties.

17. Authority to Execute Agreement. Each Party to this Agreement represents and warrants that each person whose signature appears below is authorized and has the full authority to execute this Agreement on behalf of the entity that is a Party to this Agreement.

The Parties have caused their undersigned, duly authorized signatories to execute this Agreement on the dates set forth below.

Santa Clara Valley
Transportation Authority
City of Morgan Hill
Carolyn M. Gonot
General Manager/CEO
Christina Turner
City Manager
Date Date
Approved as to Form: Approved as to Form:

Vrunda Shah
Staff Attorney II
Elisa Tolentino
City Attorney
Date Date

ATTACHMENT A – PROJECT INFORMATION

1. Project Number: 27SC06

2. Project Title: Morgan Hill Corporation Yard Electric Vehicle Charging Stations

3. TFCA County Program Manager Funds Allocated: $215,000

4. Total Project Cost: $255,000

5. Project Description: This project will install 3 EV chargers in FY2028 at the City of Morgan Hill's Corporation Yard. These funds would address the increasing need for electric vehicle charging opportunities for the City's expanding electric fleet vehicles as well as support the strategies and goals of the City's Climate Action Plan.

ATTACHMENT B – INSURANCE REQUIREMENTS
SPONSOR’S ATTENTION IS DIRECTED TO THE INSURANCE REQUIREMENTS BELOW. IT IS HIGHLY RECOMMENDED THAT SPONSOR CONFER WITH THEIR

INSURANCE CARRIERS OR BROKERS IN ADVANCE OF PROPOSAL SUBMISSION

TO DETERMINE THE AVAILABILITY OF INSURANCE CERTIFICATES AND ENDORSEMENTS REQUIRED BY THIS CONTRACT.

INSURANCE
Without limiting Sponsor’s obligation to indemnify and hold harmless VTA, Sponsor must procure and maintain for the duration of the Contract insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the Work hereunder by Sponsor, its agents, representatives, or employees, or subcontractors. The cost of such insurance must be included in Contract price. In the event of any material change in the Contract Scope of Services, VTA reserves the right to change the insurance requirements set forth herein. Sponsor must furnish complete copies of all insurance policies, within three (3) business days of any request for such by VTA.

A. Liability and Workers’ Compensation Insurance

1. Minimum Scope of Coverage
Coverage must be at least as broad as:
a. Insurance Services Office General Liability coverage (“occurrence” form CG 0001).

General Liability insurance written on a “claims made” basis is not acceptable. b. Insurance Services Office Business Auto Coverage, Insurance Services Office form number CA 0001, covering Automobile Liability, code 1 “any auto.” Auto Liability written on a “claims-made” basis is not acceptable.
c. Workers’ Compensation insurance as required by the Labor Code of the State of California and Employer’s Liability insurance.
d. Professional Liability, including limited contractual liability coverage, covering liability arising out of any negligent act, error, mistake or omission in the performance of Sponsor’s services under this Agreement. This coverage must be continuously maintained for a minimum of two (2) years following completion of this Agreement.

This coverage may be written on a claims made basis, if so, see special provisions in Section B.

e. Sponsor’s Pollution/Environmental Impairment Liability: covering liability arising out of the treatment, handling, storage, transportation, or accidental release of any hazardous material.

2. Minimum Limits of Insurance
Sponsor must maintain limits no less than:
a. General Liability (including umbrella/excess liability): $4,000,000 limit per occurrence for bodily injury, personal injury, and property damage. If General Liability Insurance or other form with a general aggregate limit is used either the general aggregate limit must apply separately to this project/location or the general aggregate limit must be twice the required occurrence limit. This requirement may be satisfied by a combination of General Liability with Excess or Umbrella, but in no event may the General Liability primary policy limit per occurrence be less than $2,000,000, unless Umbrella/Excess policies feature inception and expiration dates concurrent with the underlying General Liability policy, “Follow Form” coverage, and a “Drop Down”. b. Automobile Liability (including umbrella/excess liability): $4,000,000 limit per accident for bodily injury and property damage. This requirement may be satisfied by a combination of Auto Liability with Excess or Umbrella, but in no event may the Automobile Liability primary policy limit per occurrence be less than $2,000,000, unless Umbrella/Excess policies feature inception and expiration dates concurrent with the underlying auto liability policy, “Follow Form” coverage, and a “Drop Down”. c. Workers’ Compensation and Employer’s Liability: Statutory Workers’ Compensation limits and Employer’s Liability limits of $1,000,000 per accident. d. Professional Liability: $2,000,000 each occurrence/aggregate minimum limit per claim. This requirement may be satisfied by a combination of Professional Liability insurance with Excess or Umbrella policies, but in no event may the Professional Liability primary policy limit per occurrence be less than $2,000,000, unless Umbrella/Excess policies feature inception and expiration dates concurrent with the underlying policy, “Follow Form”, and a “Drop Down” provision. e. Sponsor’s Pollution/Environmental Impairment Liability: $3,000,000 per occurrence.

This requirement may be satisfied by a combination of Pollution Liability insurance with Excess or Umbrella policies, but in no event may the Pollution Liability primary policy limit per occurrence be less than $2,000,000, unless Umbrella/Excess policies feature inception and expiration dates concurrent with the underlying policy, “Follow Form” coverage, and a “Drop Down” provision.

3. Self-Insured Retention
The certificate of insurance must disclose the actual amount of any deductible or selfinsured retention, or lack thereof, for all coverages required herein. Any self-insured retention or deductible in excess of $50,000 ($100,000 if Sponsor is a publicly-traded company) must be declared to and approved by VTA. If Sponsor is a governmental authority such as a state, municipality or special district, self-insurance is permitted. To apply for approval for a level of retention or deductible in excess of $50,000, Sponsor must provide a current financial report including balance sheets and income statements for the past three years, so that VTA can assess Sponsor’s ability to pay claims falling within the self-insured retention or deductible. Upon review of the financial report, if deemed necessary by VTA in its sole discretion, VTA may elect one of the following options: to accept the existing self-insured retention or deductible; require the insurer to reduce or eliminate the self-insured retention or deductible as respects VTA, its directors, officers, officials, employees and volunteers; or to require Sponsor to procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses.

Applicable costs resulting therefrom will be borne solely by Sponsor. Sponsor may request execution of a nondisclosure agreement prior to submission of financial reports.

B. Claims Made Provisions (not applicable to General Liability or Auto Liability) Claims-made coverage is never acceptable for General Liability or Auto Liability. Claimsmade may be considered for Professional, Environmental/Pollution, or Cyber Liability. If coverage is written on a claims-made basis, the Certificate of Insurance must clearly state so.

In addition to all other coverage requirements, such policy must provide that:

1. The policy must be in effect as of the date of this Agreement and the retroactive date must be no later than the date of this Agreement.

2. If any policy is not renewed or the retroactive date of such policy is to be changed, the Sponsor must obtain or cause to be obtained the broadest extended reporting period coverage available in the commercial insurance market. This extended reporting provision must cover at least two (2) years.

3. No prior acts exclusion may be added to the policy during the contract period.

4. The policy allows for reporting of circumstances or incidents that might give rise to future claims.

C. Other Provisions
The policies must contain, or be endorsed to contain, the following provisions:

1. General Liability, Automobile Liability, and Sponsor’s Pollution Liability a. VTA, its directors, officers, officials, employees and volunteers are to be named as additional insureds as respects: liability arising out of activities performed by or on behalf of the Sponsor, including VTA’s general supervision of the Sponsor; products and completed operations of the Sponsor and its subcontractors; premises owned, occupied or used by the Sponsor; or automobiles owned, leased, hired or borrowed by the Sponsor. The coverage must contain no special limitations on the scope of protection afforded to VTA, its directors, officers, officials, employees, or volunteers.

Additional Insured endorsements must provide coverage at least as broad as afforded by the combination of ISO CG 20 10 10 01 and CG 20 37 10 01. b. Any failure to comply with reporting provisions of the policies may not affect coverage provided to VTA, its directors, officers, officials, employees, or volunteers. c. Sponsor’s insurance must apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer’s liability. d. The General Liability General Aggregate limit must apply per project, not per policy. e. The General Liability policy must be endorsed to remove the exclusion for railroad liabilities, with coverage at least as broad as afforded by ISO CG 24 17.

2. All Coverages
a. Sponsor’s insurance coverage must be primary insurance as respects VTA, its directors, officers, officials, employees, and volunteers. Self-insurance or insurance that may be maintained by VTA, its directors, officers, officials, employees, or volunteers may apply only as excess to the Sponsor’s insurance. Sponsor’s insurance must not seek contribution from VTA’s insurance program.
b. The insurer must agree to waive all rights of subrogation against VTA, its directors, officers, officials, employees, and volunteers for losses arising from work performed by the Sponsor and its subcontractors for VTA

3. Other Insurance Provisions
a. The Certificate must disclose the actual amounts of all deductibles or self-insured retentions.
b. If any coverage forms or endorsements required by this Contract are updated by their publishers, whether they be the insurance carrier(s), the Insurance Services office, or

the American Association of Insurance Services, during the duration of this Contract, VTA reserves the rights to require the Sponsor to procure said coverage forms or endorsements using the updated versions upon the next renewal cycle.

D. Acceptability of Insurers
Insurance and bonds must be placed with insurers with an A.M. Best’s rating of no less than A VII (financial strength rating of no less than A and financial size category of no less than VII), unless specific prior written approval has been granted by VTA.

E. Certificates of Insurance
Sponsor must furnish VTA with a Certificate of Insurance. The certificates for each insurance policy are to be signed by an authorized representative of that insurer. The certificates must be issued on a standard ACORD Form. The Sponsor must instruct their insurance broker/agent to submit all insurance certificates and required notices electronically in PDF format to [email protected]. All endorsements must be attached to the ACORD certificate in a single PDF document.

The certificates must (1) identify the insurers, the types of insurance, the insurance limits, the deductibles, and the policy term, (2) include copies of all the actual policy endorsements required above, and (3) in the “Certificate Holder” box include:

Santa Clara Valley Transportation Authority (“VTA”)
3331 North First Street
San Jose, CA 95134-1906
In the Description of Operations/Locations/Vehicles/Special Items Box, the VTA Contract number must appear, the list of policies scheduled as underlying on the Umbrella/Excess policy must be listed, Certificate Holder must be named as additional insured, and Waiver of Subrogation must be indicated as endorsed to all policies as stated in the Contract Documents.

It is a condition precedent to award of this Contract that all insurance certificates and endorsements be received and approved by VTA before Contract execution. No work may be performed until insurance is in full compliance. VTA reserves the rights to require complete, certified copies of all required insurance policies, at any time.

If the Sponsor receives notice that any of the insurance policies required by this Exhibit may be cancelled or coverage reduced for any reason whatsoever, Sponsor must immediately provide written notice to VTA that such insurance policy required by this Exhibit is canceled or coverage is reduced.

F. Maintenance of Insurance

If Sponsor fails to maintain insurance as required herein, VTA, at its option, may suspend payment for work performed and/or may order the Sponsor to suspend work at Sponsor’s expense until a new policy of insurance is in effect.

Ed. Rev. 10-1-19

RESOLUTION NO. 26-XXX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF MORGAN HILL APPROVING AN AMENDMENT TO
THE CITY’S FISCAL YEAR 2026-2027 ANNUAL BUDGET
TO APPROPRIATE $245,000 IN THE PUBLIC FACILITIES
IMPACT FEE FUND (FUND 347), $127,500 IN THE
WASTEWATER CAPITAL PROJECT FUND (FUND 643),
AND $127,500 IN THE WATER CAPITAL PROJECT FUND
(FUND 653)
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 “ACCEPT GRANT FUNDING FROM THE VALLEY

TRANSPORTATION AUTHORITY (VTA) FOR THE CONSTRUCTION OF FLEET CHARGERS AT THE CORPORATION YARD” submitted for City Council consideration at its meeting of October 21, 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 2026-2027 and 2027-2028 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:

City of Morgan Hill
Resolution No. 26-XXX

a. That the City’s previously adopted Fiscal Years 2026-2027 and 2027-2028 Budgets, as the same has been amended to date, are hereby further amended in 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 2026-2027 and 2027-2028 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 21st day of October 2026 by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

APPROVED: ATTEST:
___________________________________ _______________________________ MARK TURNER, Mayor MICHELLE BIGELOW, City Clerk
 CERTIFICATION 
I, Michelle Bigelow, City Clerk of the City of Morgan Hill, California, do hereby certify that the foregoing is a true and correct copy of Resolution No. 26-XXX adopted by the City Council at the meeting held on the 21st day of October 2026.

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

DATE: _____________________ ___________________________________ MICHELLE BIGELOW, City Clerk

City of Morgan Hill
Resolution No. 26-XXX

EXHIBIT A

AGENDA BUDGET SCORECARD
FISCAL YEAR 2026-2027
ADJUSTMENT # 002
FUND: 347 Public Facilities Impact Fund
FUNCTION: 040 Public Services
DEPARTMENT: 040 Public Services
DIVISION: 8056 Public Facilities
OBJECT: 86360 CONSTRUCTION
AGENDA DATE: 10/21/26
AGENDA ITEM TITLE:
07/01/26 07/01/27

UNAUDITED PROJECTED AMENDED UNAUDITED PROJECTED

BEGINNING FUND ESTIMATED APPROPRI- ENDING FUND

BALANCE REVENUES ATIONS BALANCE
ORIGINAL BUDGET 88,278 927,831 287,847 728,262

CUMULATIVE REVISIONS PRIOR - - - -

TO RECOMMENDED ACTION
RECOMMENDED ACTION 245,000 245,000 -
RESULT OF RECOMMENDED ACTION 88,278 1,172,831 532,847 728,262 VTA Grant for Fleet Charging Infrastructure

City of Morgan Hill
Resolution No. 26-XXX

AGENDA BUDGET SCORECARD
FISCAL YEAR 2026-2027
ADJUSTMENT # 003
FUND: 643 Wastewater Capital Project Fund
FUNCTION: 070 Utilities
DEPARTMENT: 040 Public Services
DIVISION: 8170 Wastwater
OBJECT: 86360 CONSTRUCTION
AGENDA DATE: 10/21/26
AGENDA ITEM TITLE:
07/01/26 07/01/27

UNAUDITED PROJECTED AMENDED PROJECTED

BEGINNING FUND ESTIMATED APPROPRI- ENDING FUND

BALANCE REVENUES ATIONS BALANCE
ORIGINAL BUDGET 24,235,053 851,738 9,284,250 15,802,541

CUMULATIVE REVISIONS PRIOR - - - -

TO RECOMMENDED ACTION
RECOMMENDED ACTION - 127,500 (127,500)
RESULT OF RECOMMENDED ACTION 24,235,053 851,738 9,411,750 15,675,041 VTA Grant for Fleet Charging Infrastructure

City of Morgan Hill
Resolution No. 26-XXX

AGENDA BUDGET SCORECARD
FISCAL YEAR 2026-2027
ADJUSTMENT # 004
FUND: 653 Water Capital Project Fund
FUNCTION: 080 Utilities
DEPARTMENT: 040 Public Services
DIVISION: 8120 Water
OBJECT: 86360 CONSTRUCTION
AGENDA DATE: 10/21/26
AGENDA ITEM TITLE:
07/01/26 06/30/27

UNAUDITED PROJECTED AMENDED PROJECTED

BEGINNING FUND ESTIMATED APPROPRI- ENDING FUND

BALANCE REVENUES ATIONS BALANCE
ORIGINAL BUDGET 20,272,626 1,526,215 6,067,023 15,731,818

CUMULATIVE REVISIONS PRIOR - - - -

TO RECOMMENDED ACTION
RECOMMENDED ACTION - 127,500 (127,500)
RESULT OF RECOMMENDED ACTION 20,272,626 1,526,215 6,194,523 15,604,318 VTA Grant for Fleet Charging Infrastructure

2 CITY COUNCIL STAFF REPORT
MEETING DATE: October 21, 2026
PREPARED BY:

Inga Alonzo, Management Analyst
APPROVED BY: City Manager

APPROVE GENERATOR MAINTENANCE SERVICES AGREEMENT

RECOMMENDATION(S)

1. Approve a three-year agreement with Odyssey Power Corporation in the not to exceed amount of $430,935 for annual and preventive maintenance, repair, emergency repair, and rentals for the City’s 30 standby generators; and

2. Authorize the City Manager to execute and administer said agreement.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety and Quality of Life
Maintaining and Enhancing Infrastructure
Strategic Priorities 2026-2027
Fiscal Sustainability
Guiding Documents
Water System Master Plan
Wastewater System Master Plan
REPORT NARRATIVE:

The City’s fleet of generators are required to provide electrical power back-up for well sites, booster stations, water storage tanks, sewer lift stations, 911 dispatching towers, and other City facilities in the event of a power outage. It is crucial to maintain the constant readiness of these generators through annual servicing, ongoing repair, parts (as needed), rentals for equipment downtime, and preventive maintenance on a threeyear rotational servicing schedule. These generators are also permitted by the state of California and must meet the emissions and reporting requirements in order to continue to utilize the units when needed.

A detailed Request for Proposals (RFP) was posted in August 2026 to select a highly experienced and capable contractor for maintenance, repair, and emergency servicing for the City’s 30 standby generators. The contractor is responsible for furnishing all the labor, machine shop work, field work, shop and field welding, miscellaneous repair, travel time, and expenses necessary to provide generator routine annual service,

2 preventive maintenance, emergency repair, and rentals for generator downtime. The contractor must also provide three reports annually for each unit, including a service report, a load test report, and an oil analysis report with all of their findings. The RFP was advertised in the Morgan Hill Times and posted to the City’s website and Public Purchase website. A mandatory pre-bid meeting was held to convey to all potential bidders the details and full expectations of the City with this contract.

The City received four proposals, but one was rejected because the pricing far exceeded the City’s budget for these services. Another was deemed non-responsive as it did not fulfill the requirements of the full requirements of the RFP. The remaining two were thoroughly reviewed by an evaluation panel. The resulting weighted scores from the panel are attached.

GenServ dba Odyssey Power Corporation received the highest weighted overall score.

Therefore, staff recommend City Council’s approval of a three-year agreement for Generator Maintenance Services with Odyssey Power Corporation for the City’s fleet of 30 standby generators.

COMMUNITY ENGAGEMENT:

Not Applicable
Since maintenance of the City’s facility, water, and wastewater generators is a regular operational function of the City, no efforts were made to inform the community about this proposed project.

ALTERNATIVE ACTIONS:

City Council could choose to reject the proposals and reissue an RFP. This is not recommended as it would leave the City without service for a period of time and is not likely to result in a contract with added value. Generators are required to provide backup power to water and wastewater facilities as well as City facilities in the event of a power outage and are necessary for the provision of essential services to the community. Ongoing maintenance and repair are crucial in assuring the generators are functioning properly at all times.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

On June 21, 2023, City Council approved a three-year agreement with Peterson Power Systems for generator maintenance services in the amount of $295,195. An amendment to the agreement was approved by Council on April 2, 2025, to increase the agreement by an additional $157,453 due to unforeseen repairs on multiple generator units making the total not to exceed amount $452,648.

FISCAL AND RESOURCE IMPACT:

The three-year agreement is for a not to exceed amount of $430,935, of which, $152,625 is for routine annual services, $128,310 for 3-year rotational preventative maintenance, and the remaining $150,000 ($50,000/year) for unforeseen emergency repairs and/or generator rentals. Funds for this agreement are budgeted for in specific divisions for the generator services: Water Operations (48%, Fund 650), Sewer

2 Operations (30%, Fund 640), Fire Operations (10%, Fund 010) and in Facility Maintenance (12%, Fund 740); no further appropriation of funds is necessary.

CEQA (California Environmental Quality Act):

Categorical Exemption
The planned maintenance and management of existing City infrastructure falls within the CEQA categorical exemption of Class 1, Existing Facilities.

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MAINTENANCE SERVICE AGREEMENT

ODYSSEY POWER CORPORATION
THIS AGREEMENT is entered into and becomes effective on _______________ (Effective Date), by and between the CITY OF MORGAN HILL, a municipal corporation, ("CITY"), and Odyssey Power Corporation a California corporation ("SERVICE PROVIDER") hereinafter referred to collectively as “Parties.” In consideration of the promises and the mutual covenants contained in this Agreement, the Parties agree as follows:

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

2. Term of Agreement. This Agreement shall cover services rendered from the Effective Date of this Agreement until June 30, 2029 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 period of one year. Any such extension shall be in writing and signed by both Parties to this Agreement.

3. Scope of Service. The services to be performed by SERVICE PROVIDER shall be Generator Maintenance and Repair Services as further described in Exhibit A.

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

4.1. Amount. $430,935.00. Total compensation to SERVICE PROVIDER under this Agreement during its initial term set forth in Section 2 above shall not exceed Four Hundred Thirty Thousand Nine Hundred Thirty-Five dollars and shall be billed based on the rate and basis set forth in Exhibit B. If the City Manager extends the term of this Agreement pursuant to the provisions of Section 2 above, the City Manager shall have the authority to increase the maximum compensation allowed to be paid to SERVICE PROVIDER during that extended term period, so long as City Council has appropriated sufficient funds therefor, the Parties mutually agree to such amount in a writing signed by both Parties to this Agreement and provided further that in no event shall such maximum compensation allowed for each subsequent extended one-year term exceed 105% of the maximum compensation allowed to be paid to SERVICE PROVIDER for one year of service during the immediately preceding prior year of service.

4.2. Billing. SERVICE PROVIDER shall provide CITY with an invoice containing the dated, detailed, and itemized descriptions of all services performed and expenses incurred (if such expenses are reimbursable pursuant to Exhibit B) by SERVICE PROVIDER on a monthly basis unless otherwise specified in Exhibit B. All invoices shall be sent to the CITY addressed to the department head or project manager identified below in Section 14 Notices. Payment will be made to SERVICE PROVIDER within thirty (30) days of receipt of invoice by CITY. Any rate charged shall be prorated where services are interrupted or not provided for any rate period (for example, any monthly rate charge should be prorated when services were interrupted or provided for only part of the month). For services billed on an hourly rate, the minimum unit of billed time shall not exceed one tenth of one hour. CITY shall pay for services and expenses (if so provided in Exhibit B) up to the limit of compensation set forth above, that in the CITY’S judgment were necessary and reasonable. Services for work performed and expenses incurred in excess of the total compensation set forth in paragraph 4.1 above shall be at no cost to CITY.

5. Termination. CITY or SERVICE PROVIDER shall have the right to terminate this Agreement, without cause, by giving thirty (30) days' written notice or less under urgent

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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, and this Agreement shall terminate after the last day during the fiscal year for which appropriations shall have been budgeted for CITY or are otherwise available for payments.

5.2. Temporary Suspension of Services. CITY’S need for services may be suspended due to unforeseeable or unavoidable circumstances beyond its control. Such circumstances include, but are not limited to, earthquake, fire, explosion, flood, or other natural catastrophe; governmental legislation, condemnation, acts, orders, or regulation; war or acts of terrorism; strikes or labor difficulties; and quarantine, epidemic, or pandemic. CITY shall provide a 5-days’ written notice or less under urgent circumstances to temporarily suspend services at specific CITY facilities.

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

6. 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.

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.

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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.

6.3. Excusable Delay (Force Majeure). If either Party is unable to comply with any provision of this Contract due to causes beyond its reasonable control, direct or indirect, and which could not have been reasonably anticipated, such as Acts of God, acts of war, civil disorders, or other similar acts, such Party shall not be held liable for such failure to comply, provided the other Party receives written notice of such force majeure event no later than five (5) calendar days after commencement of such force majeure event. The spread or effects of Covid-19, and any variants thereof, can be reasonably anticipated and do not constitute a force majeure event.

Tariffs imposed by the US government, and any resulting supply disruptions do not constitute a force majeure event.

6.4. Responsibility for Damage to City Property. SERVICE PROVIDER shall be liable for any damage caused by SERVICE PROVIDER to any CITY. Any such damage shall be repaired at the SERVICE PROVIDER’ s sole expense.

6.5. Defective Work; Guarantee and Warranty.

6.5.1. “Defective” means work that is unsatisfactory or unsuited for the use intended, faulty, or deficient, that does not conform to the Agreement, or does not meet the requirements of any inspection, reference standard, test or approval referred to in the Agreement or has been damaged before final payment (unless responsibility for the protection thereof has been assumed in writing by CITY). Unapproved substitutions are Defective. CITY is the judge of whether work is Defective. A “Defect” is a condition, component, or part that is unsatisfactory or unsuited for the use intended, faulty, or deficient, that does not conform to the Agreement, or does not meet the requirements of any inspection, reference standard, test or approval referred to in the Agreement or has been damaged before final payment (unless responsibility for the protection thereof has been assumed in writing by CITY).

6.5.2. SERVICE PROVIDER shall perform all services, including labor, materials, tools, equipment, and related work, in a good workmanlike, and professional manner, consistent with industry standards. CITY may inspect and accept or reject any of SERVICE PROVIDER’s work under this Agreement, either during performance or when completed. CITY may withhold payment of a portion of an invoice because of defective work not remedied or because of unsatisfactory work performed by SERVICE PROVIDER. During the course of work or subsequent inspection, if any component is found to be worn, defective, or otherwise fails or malfunctions, SERVICE PROVIDER shall repair or replace such component with the same part or City approved equivalent. When defective work is remedied by SERVICE PROVIDER, payment shall be made for amounts withheld because of them.

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6.5.3. Observation and inspection of the work shall not relieve SERVICE PROVIDER of any of its obligations under this Agreement. Even though equipment, materials, or work required to be provided under the Agreement have been inspected, accepted, and estimated for payment, SERVICE PROVIDER shall, at its own expense, replace or repair any such equipment, material, or work found to be Defective up to the end of the guarantee period or materials and manufacturer warranties.

6.5.4. SERVICE PROVIDER does hereby guarantee its maintenance work performed pursuant to the scope of services (“Guarantee”). SERVICE PROVIDER hereby grants to OWNER for a period of one year (guarantee period) following SERVICE PROVIDER’S work, its unconditional warranty of the quality and adequacy of all of the work including, without limitation, all labor, materials and equipment provided by SERVICE PROVIDER and its subcontractors of all tiers in connection with the work (“Warranty”). Should any defect, failure or deficiency arise that is attributable to SERVICE PROVIDER’S installation methods, workmanship or craftmanship, SERVICE PROVIDER shall immediately correct, repair or replace the affected work at no cost to the CITY. SERVICE PROVIDER shall prioritize such corrective action above all other non-emergency work. SERVICE PROVIDER is not guaranteeing work performed previously by other providers, only its own work. SERVICE PROVIDER does not warrant or guarantee any parts, equipment, or materials beyond the scope of the original manufacturer’s warranty, and its stated limitations. All materials installed by the SERVICE PROVIDER shall be covered exclusively under their respective manufacturer warranty claims but shall not be responsible for costs associated with manufacturer covered failures.

6.5.5. If within one year after the date of SERVICE PROVIDER’s work, or such other longer period of time as may be prescribed by laws or regulations, or by any extended warranty or guarantee, any of SERVICE PROVIDER’s work is found to be Defective, SERVICE PROVIDER shall promptly, without cost to CITY and in accordance with SERVICE PROVIDER’s written instructions, correct such Defective work. SERVICE PROVIDER shall remove any Defective work rejected by CITY and replace it with work that is not Defective, and satisfactorily correct or remove and replace any damage to other work or the work of others resulting therefrom. If SERVICE PROVIDER fails to comply promptly with the terms of such instructions, or in an emergency where delay would cause serious risk of loss or damage, CITY may have the Defective work corrected or the rejected work removed and replaced. SERVICE PROVIDER shall pay for all claims, costs, losses and damages caused by or resulting from such removal and replacement. Where SERVICE PROVIDER fails to correct Defective work, or Defects are discovered outside the correction period, OWNER shall have all rights and remedies granted by law.

6.5.6. Neither final payment nor use nor occupancy of the work performed by the

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SERVICE PROVIDER shall constitute an acceptance of work not done in accordance with this Guarantee or relieve SERVICE PROVIDER of liability in respect to any express warranties or responsibilities for faulty materials or workmanship. SERVICE PROVIDER shall remedy any Defects in the work and pay for any damage resulting therefrom, which shall appear within the time period specified above in Section 6.5.5.

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

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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 selfinsured, SERVICE PROVIDER shall provide its Certificate of Permission to Self-Insure, duly authorized by the Department of Industrial Relations.

8.1.4. Pollution (Environmental) Liability. If the performance of SERVICE PROVIDER’S work or service under this Agreement involves hazardous materials, contaminated soil disposal, and/or a risk of accidental release of fuel oil, chemicals or other toxic gases or hazardous materials, SERVICE PROVIDER shall procure and maintain Pollution Liability covering the SERVICE PROVIDER’S liability for bodily injury, property damage and environmental damage resulting from pollution and related cleanup costs arising out of the work or services to be performed under this Agreement.

Coverage shall be provided for both work performed on site, as well as during the transport of hazardous materials. Such coverage shall be in the minimum amount of: (i) one million dollars ($1,000,000.00) for any one accident or occurrence, or (ii) the maximum amount of such insurance available to SERVICE PROVIDER under SERVICE PROVIDER'S
combined insurance policies (including any excess or “umbrella” policies), whichever is greater.

8.1.5. Professional Liability.

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

8.1.5.2. If the performance of SERVICE PROVIDER’S work or service under 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

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maximum amount of such insurance available to SERVICE
PROVIDER under SERVICE PROVIDER'S combined insurance
policies (including any excess or “umbrella” policies), whichever is greater.

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

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 “VII” or better.

8.4. Certificates. SERVICE PROVIDER shall furnish CITY with copies of all certificates as outlined herein, whether new or modified, promptly upon receipt. In the event of a claim

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

10. Compliance with Law.

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

SERVICE PROVIDER and its officers, employees, agents, and subcontractors covenant there shall be no discrimination based upon any basis prohibited by State or Federal law, including, but not limited to, race, color, creed, religion, 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 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

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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.

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

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

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

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

SIGNING THIS AGREEMENT, SERVICE PROVIDER AFFIRMS THAT IT HAS

DISCLOSED ANY FINAL JUDGMENTS, DECISIONS OR ORDERS FROM A COURT OR INVESTIGATORY GOVERNMENT AGENCY FINDING – IN THE FIVE (5) YEARS PRIOR TO EXECUTING THIS AGREEMENT – THAT SERVICE

PROVIDER OR ITS SUBCONTRACTOR(S) HAS VIOLATED ANY APPLICABLE WAGE AND HOUR LAWS. SERVICE PROVIDER FURTHER AFFIRMS THAT IT OR ITS SUBCONTRACTOR(S) HAS SATISFIED AND COMPLIED WITH – OR

HAS REACHED AGREEMENT WITH THE CITY REGARDING THE MANNER IN WHICH IT WILL SATISFY – ANY SUCH JUDGMENTS, DECISIONS OR ORDERS.

Judgments or Decisions During Term of Contract: If at any time during the term of this Agreement, a court or investigatory government agency issues a final judgment, decision or order finding that SERVICE PROVIDER or any subcontractor it employs to perform work under this Agreement has violated any applicable wage and hour law, or SERVICE PROVIDER learns of such a judgment,

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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.

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

13. Conflict of Interest and Reporting. SERVICE PROVIDER shall at all times avoid conflict of interest or appearance of conflict of interest in performance of this Agreement including, without limitation, complying with California Government Code section 1090 et 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).

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.

11 Updated: May 2026
Address of SERVICE PROVIDER is as follows:

Odyssey Power Corporation
2100 W Orangewood Avenue, Suite 212
Orange, CA 92868
Address of CITY is as follows:

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

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

15. Licenses, Permits and Fees. SERVICE PROVIDER shall obtain a City of Morgan 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 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.

17.4. Public Record. The City, as a public agency, is subject to the disclosure requirements of the California Public Records Act (“CPRA”). This

12 Updated: May 2026
Agreement, including Service Provider’s rates and fees, are public records under the California Public Records Act.. If Service Provider has proprietary information contained in these documents, and Service Provider wishes to claim that such information falls within one or more CPRA exemptions, Service Provider must clearly mark such information “Confidential and Proprietary,” and identify the specific lines containing the information. In the event of a request for such information, the City will make reasonable efforts to provide notice to Service Provider prior to such disclosure.

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

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

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

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

22. Defense and Indemnification.

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

13 Updated: May 2026
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.

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. 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 forty-eight (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.

26. 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

14 Updated: May 2026
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.

27. 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.

28. 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.

29. 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.

30. Counterpart Signatures. This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties, constitute a single binding agreement.

Signatures on the following page.

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

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

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

ATTEST:

CITY OF MORGAN HILL
City Clerk/Deputy City Clerk
Michelle Print NameBigelow
Date:

APPROVED AS TO FORM:

City Manager
Christina J. Turner
Print Name
Date:

Odyssey Power Corporation
City Attorney
Print ElisaName Tolentino
By:

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

By:

ERiNLETO CEO Print Name and Title of Signer. If Corporate: Secretary, Assistant Secretary, Chief Financial Officer or
Assistant Treasurer
10626ął
793476
Contractor's License Number(s) (if applicable)
Expiration Date(s) 04/30/2027
Date:
1000005860
Contractor's DIR Registration Number(s) (if applicable) Expiration Date(s) 06/30/2027
15 Updated: May 2026
10/06/2026

16 Updated: May 2026

EXHIBIT A

SCOPE OF SERVICES
The scope of this contract is to provide routine, preventative, and emergency maintenance and repairs to the City of Morgan Hill's 30 generators at different locations throughout the city. The contractor will be responsible for funishing all necessary parts, labor, machine shop work, field work, shop and field welding, miscellaneous repair, travel time, expenses, and equipment necessary to do the work required.

Task 1 - Routine Annual Service
Routine annual service is performed once a year on every City generator listed in Exhibit B, Task 1, and shall include the following services:

1. ENGINE LUBRICATING SYSTEM
A. Check oil level and top off
B. Check oil pressure using unit mounted gauge
C. Check engine for unusual oil leaks

2. FUEL SYSTEM
A. Check fuel pressure (if equipped)
B. Inspect fuel system for leaks
C. Check day tank fuel level & main tank (gage only)

3. INTAKE SYSTEM
A. Check all hoses and connections
B. Visually check air cleaner

4. GOVERNOR
A. Check all linkages & ball joints (if applicable)
B. Check oil in governor (if applicable)
C. Check any unusual oil/fuel leakage

5. COOLING SYSTEM
A. Check coolant level & inhibitor content, top off
B. Check temperature of jacket water heater
C. Check condition of all belts, hoses and connections

6. ENGINE ELECTRICAL STARTING SYSTEM
A. Check battery cap vents (lead acid only)
B. Check battery water levels & adj. (lead acid only)
C. Visually check batteries & connections
D. Check battery charging system for correct operation and adjust as needed

7. GENERATOR
A. Check generator & instruments under bldg. load (if possible) B. Check general appearance of air screen

8. ENGINE CONTROLS
A. Check generator and instruments under bldg. load (if possible)

17 Updated: May 2026
B. Check general appearance

9. GENERAL
A. Visually check engine mounts
B. Visually check complete unit

10. GENERATOR SWITCHGEAR & EMERGENCY SOURCE FEEDERS
A. Operate generator circuit breaker manually
at time of visit (if possible)

11. RUNNING TEST
A. BEFORE STARTING ENGINE:
• Check engine oil level and coolant level.
• Check block heater-will maintain coolant temperature of about 90 degrees F in the block. Check fuel level in storage tank.
• Check battery water level and top as necessary.
• Check battery terminals for corrosion and connections for tightness (lead acid).

B. WITH ENGINE RUNNING:
• Check oil pressure.
• Check fuel pressure.
• Check oil level and add oil as required. Check RPM (frequency).• Check generated voltage.
• Check for leaks of unusual noises.

C. AFTER STOPPING ENGINE:
• Check/verify all switches are in proper positions for automatic start. Check fuel level in tank.
• Record battery charger volts, check for proper operation. Remove, clean and reinstall all battery connections (lead acid). Inspect generator for cleanliness. • Drain crank-case oil and replace it with new oil. Remove and replace oil and fuel filters.
• Inspect air filter(s) and replace as required.
• Start engine and load with contractor supplied resistive load bank. Run under load for at least one hour.
• Check generator output. Take oil sample for analysis.

12. REPORTING:

A. Provide the following reports for each generator to the Utilities Division in electronic form (Word, Excel, or PDF). Handwritten reports will not be accepted:
• Service report – report must include the following:
a. Work order number, date, employee name
b. Generator City ID number, manufacturer, model, serial number, location c. Status of all items and details on list 1-11 above
d. Any action items needed if status is not normal
• Load test - with full interpretation of results
• Oil Analysis – with full interpretation of results
B. Advise customer of any/all unusual situations or potential problems which will require further attention.

C. Advise when main fuel tank is below 3/4 full.

18 Updated: May 2026
Routine annual services shall be performed on normal workdays, defined as non-holiday Mondays through Thursdays, 6:30 AM through 4:00 PM and Fridays, 6:30 AM through 3:00 PM. These services shall be scheduled in the months of October through December.

Invoices for annual services shall not be sent to the City without the service, load test, and oil analysis reports completed and attached.

Task 2 - Preventive Maintenance Services
Preventive Maintenance Service is a three-year rotational program (PM-3) in which the contractor shall include the following parts and services on City generators per the rotational schedule per Exhibit B. Task 2:

1. Replacement of fan and alternator drive belts.

2. Replacement of engine cooling system hoses.

3. Block heater hoses replaced with high temperature silicone hoses.

4. Replacement of standard ethylene glycol coolant.

5. Replacement of the batteries.

PM-3 and routine annual service shall be performed concurrently on those generators that are due for PM-3 maintenance in that fiscal year. Preventive maintenance and repair services shall be performed on normal workday hours defined as non-holiday Mondays through Thursdays, 6:30 AM through 4:00 PM and Fridays, 6:30 AM through 3:00 PM.

Preventive maintenance services shall be scheduled in the months of October through December.

Task 3 - On-Call Emergency and Non-Emergency Repair Services Contractor shall provide on-call emergency and non-emergency repairs on a time and material basis. Hourly rates paid to Contractors under the agreement shall be only for actual productive hours on the job site. The City shall not be directly invoiced for the following:
• Travel and/or transportation of workers;
• Parts and materials acquisition including freight, handling, and delivery; and • Movement of Contractor owned or rented equipment,
For purposes of the agreement, these are considered overhead, and the costs shall be included in the fixed hourly rates in Attachment A, Task 3. All invoices to the City for oncall emergency and non-emergency repair services must include a breakdown of number of hours for all fixed rates charged and the original cost and markup price for all parts and materials charged. The City shall reserve the right to request backup documentation for the contractor’s original cost on parts and materials.

A. Non-Emergency Repair Services
Contractor shall provide written, “not to exceed,” estimates on all non-emergency repairs. These estimates shall include number of hours, hourly rate, number and type of employees required, estimated material costs, markup cost, and completion date. All work for non-emergency repairs shall be performed during regular operating hours and per the regular rates on Exhibit B, Task 3. Contractor shall respond to email or phone requests for estimates within 24 hours and provide written estimates within three business days of the original request date. It shall be the Contractor’s responsibility to ensure it has all information to prepare accurate estimates. No repair will be done without the written approval by the City’s representative.

19 Updated: May 2026
B. Emergency Repair/After Hours Services
Contractor shall provide a fixed hourly rate for emergency/after-hours services.

Contractor shall have the ability to respond to emergency repairs twenty-four hours a day, seven days per week. The contractor shall provide the City with a current directory for emergency response personnel, including phone numbers and emails and/or details on how to contact them on a 24-hour basis. The contractor shall keep the City informed of any changes in emergency response personnel and provide updated contact information. Once the City initiates a communication for emergency service, the Contractor must be able to reach the site of the emergency within 2 hours of the initial communication. It will be at the sole discretion of the City to determine if a situation is an emergency or not. It is possible to have instances where an initial service is an emergency or after-hour event, and the rest of the service is non-emergency.

Task 4 – Generator Rentals – The City prefers Contractor that can provide rental generators as needed during the duration of the contract. Need will be determined by the City. Contractor shall provide price lists for as needed standby power and as primary power as shown in Exhibit B Task 4. Weekly rates shall include a fully operational generator meeting the specified kilowatt capacity, delivery, installation, maintenance, and pickup.

UNIT # LOCATION ADDRESS MANUFACTURER MODEL SERIAL # YEAR KW FY27 Routine Annual
Service Cost
FY28 Routine Annual
Service Cost
FY29 Routine Annual
Service Cost
1 B85001 SCHOOL DIST/ CORP YARD 105 Edes Street DMT 250 G CUMMINS 860280 1985 250 $ $ $
2 B89004 CITY HALL 17555 Peak Avenue Catapillar 3408 78Z03200 1989 400 $ $ $
3 B99013 POLICE STATION
16200 Vineyard
Boulevard Generac 6063TK35R 06R0774364 1999 350
$ $ $
4 B01002 EL TORO RESERVOIR 1305 West Dunne Avenue Generac 1554330100 2062789 2001 45 $ $ $
5 SG035 WOODLAND COMM SITE 2275 Rolling Hills Drive Generac SG0035AG035 3001737818 2017 32 $ $ $
6 S03018 B LIFT STATION 17558 Holiday Drive Kohler 40RE0ZJB 0761654 2003 40 $ $ $
7 S06021 G LIFT STATION 18615 Monterey Road Olympian DP40P2 OLY00000KNPF3580 2006 40 $ $ $
8 S14009 PORTABLE TRAILER*
105 Edes Street
Bus Yard* Generac MMG75D 1409119 2014 75
$ $ $
9 S15010 PORTABLE TRAILER*
105 Edes Street
Bus Yard* Magnum 4045HFG92 PE4045R089480 2015 75
$ $ $
10 S17003 PORTABLE TRAILER*
17670 Racoon Court
A Lift Station* Grand Watts TAD571VE 7005308517 2017 60 $ $ $
11 S18025 J LIFT STATION 16035 Jackson Oaks Drive Kohler 40REOZK4 33G3GMFN0007 2018 40 $ $ $
12 S22019 I LIFT STATION 19160 Saffron Drive Kohler 30REOZK 5124402030 2023 30 $ $ $
13 S23006 C LIFT STATION 3272 Quial Lane Kohler 80REOZJF 0768962 2023 83 $ $ $
14 S25015 F LIFT STATION 17109 HOLIDAY DRIVE GENERAC F4GE9485A*J602 1937044 2025 80 $ $ $
15 W92008 E. DUNNE BOOSTER 2375 East Dunne Avenue Catapillar 3412 81Z11841 1992 500 $ $ $
16 W05020 HOLIDAY RESERVOIR 3100 Lakeview Court Kohler 10ROZ 2037908 2005 10 $ $ $

EXHIBIT B - SCHEDULE OF COMPENSATION RATES
As described in the scope of work. The annual services cost per unit must include all parts and materials (including sales tax), field work, shop work, welding, labor, travel, mileage, and any other expenses required to do the work.
20 2,100.00 2,100.00 2,100.00
2,715.00 2,715.00 2,715.00
2,635.00 2,635.00 2,635.00
1,395.00 1,395.00 1,395.00
1,515.00 1,515.00 1,515.00
1,335.00 1,335.00 1,335.00
1,515.00 1,515.00 1,515.00
1,395.00 1,395.00 1,395.00
1,335.00 1,335.00 1,335.00
1,395.00 1,395.00 1,395.00
1,515.00 1,515.00 1,515.00
1,415.00 1,415.00 1,415.00
1,395.00 1,395.00 1,395.00
1,515.00 1,515.00 1,515.00
3,100.00 3,100.00 3,100.00
1,325.00 1,325.00 1,325.00

17 W13007 PORTABLE TRAILER*
2150 E. Dunne Ave.

Jackson Well* Doosan G190 451800UCXE57 2013 190
$ $ $
18 W14011 PORTABLE TRAILER*
470 East Main Avenue
Main Well* Doosan G190 461126UAYE57 2014 190
$ $ $
19 W15012 PORTABLE TRAILER*
200 Diana Avenue
Diana #1 Well* Magnum 6068HFG95A PE6068R054060 2015 150 $ $ $
20 W16005 JACKSON RESERVOIR 16360 Oak Canyon Drive Kohler 150REOZJF SGM32GT36 2016 150 $ $ $
21 W16013 PORTABLE TRAILER*
1240 San Pedro Avenue
San Pedro Well* Blue Star VD150-02FT4 L-10981 2016 150
$ $ $
22 W17014 PORTABLE TRAILER*
1100 Diana Avenue
Diana #3 Well* Blue Star VD150-02FT4 103507 2017 150
$ $ $
23 W19016 PORTABLE TRAILER*
105 Edes
StreetYard*
Bus
Blue Star VD150-02FT4 7008485967 2019 150
$ $ $
24 W19017 PORTABLE TRAILER*
17002 Murphy Avenue
Nordstom Well* Blue Star VD 150-02FT4 7008495531 2019 150 $ $ $
25 W19024 PORTABLE TRAILER*
105 Edes Street
Bus Yard* Blue Star VD 150-02FT4 7008499277 2019 150
$ $ $
26 W23022 JACKSON BOOSTER 3482 White Oak Ct Kohler 200REOZIF 6068HFG85A 2023 235 $ $ $
27 W23023 PORTABLE TRAILER*
490 Llagas Road
LlagasBooster* Atlas Copco QAS 200 JD
Engine
PE6068U109879 2023 150
$ $ $
28 #813 FIRE STATION 2100 East Dunne Avenue Generac
Engine# 67057
95A00415-S 2020473 2024 18
$ $ $
29 #822 FIRE STATION
18300 Old Monterey
Road Generac CD050 OLYMPIAN 2022956 2024 50
$ $ $
30 #825 FIRE STATION 17285 Butterfield Blvd. Generac F4GE9485A*J 2025792 2025 80 $ $ $
* LOCATIONS CHANGE FREQUENTLY ON PORTABLE UNITS Annual Total $ $ $ Three Year Total $
21 2,010.00 2,010.00 2,010.00
2,010.00 2,010.00 2,010.00
1,640.00 1,640.00 1,640.00
1,640.00 1,640.00 1,640.00
1,640.00 1,640.00 1,640.00
1,640.00 1,640.00 1,640.00
1,640.00 1,640.00 1,640.00
1,640.00 1,640.00 1,640.00
1,640.00 1,640.00 1,640.00
1,640.00 1,640.00 1,640.00
2,010.00 2,010.00 2,010.00
1,325.00 1,325.00 1,325.00
1,400.00 1,400.00 1,400.00
1,400.00 1,400.00 1,400.00
50,875.00 50,875.00 50,875.00
152,625.00

22 Task 2- Preventive Maintenance Services (PM-3)
The Preventive Maintenance Service is a 3-year rotational program. PM-3 maintenance costs shall include all parts (including sales tax), materials, field work, welding, labor, travel, mileage, and any other expenses required to do the work. PM-3 services and routine annual services shall be performed concurrently on those generators that are due for PM-3 maintenance in that fiscal year.

FY 26/27 PM-3
Cost/Unit FY 27/28 PM-3 Cost/Unit FY 28/29 PM-3 Cost/Unit 1 B01002 $ B85001 $ B89004 $
2 B99013 $ SG035 $ S06021 $
3 S03018 $ S18025 $ S15010 $
4 S14009 $ S22019 $ S25015 $
5 S17003 $ S23006 $ W19016 $
6 W92008 $ W05020 $ W19017 $
7 W13007 $ W16005 $ W19024 $
8 W14011 $ W16013 $ W23023 $
9 W15012 $ #822 Fire $ W23022 $
10 W17014 $ #813 Fire $ #825 Fire $
Total FY26/27 $ FY27/28 $ FY28/29 $
PM-3 Total
All 3 years $
3,750.00
3,750.00
4,125.00
6,760.00
3,750.00
4,375.00
4,750.00
3,750.00
3,750.00
3,750.00
5,950.00
3,750.00
3,750.00
4,125.00
5,400.00
3,750.00
3,750.00
3,750.00
4,125.00
4,350.00
5,950.00
3,950.00
3,950.00
4,350.00
4,350.00
4,350.00
4,350.00
3,750.00 3,750.00
4,350.00
45,085.00 40,125.00 43,100.00
128,310.00

23 Task 3 - On-Call Emergency and Non-Emergency Repairs Time and material costs associated with emergency/after-hours and non-emergency generator repair services. The City shall not be directly invoiced for the following:
� Travel and/or transportation of workers;
� Parts and materials acquisition including sales tax. freight, handling, and delivery; and � Movement of Contractor owned or rented equipment.

For purposes of the agreement, these are considered overhead, and the costs shall be included in the fixed hourly labor rates on this page. All invoices to the City for on-call emergency and non-emergency repair services must include a breakdown of number of hours for all fixed rates charged and the original cost and mark up price for all parts and materials charged. The City shall reserve the right to request backup documentation for the contractor’s original cost on parts and materials.

NON-EMERGENCY REPAIR SERVICE FIXED HOURLY RATE
SUPERVISOR $ /HOUR
SERVICEPERSON $ /HOUR
SERVICEPERSON ASSISTANT $ /HOUR

SHOP WORK
SHOP LABOR $ /HOUR

EMERGENCY/AFTER-HOURS REPAIRS
MONDAY-FRIDAY AFTER HOURS $ /HOUR
SATURDAY-SUNDAY $ /HOUR
HOLIDAY $ /HOUR

PARTS AND MATERIALS
MARK UP OVER COST %
174.00
174.00
174.00
145.00
261.00
261.00
261.00

20.00

24 Task 4 - As needed - Generator Rentals
The contractor shall confirm equipment and connection compatibility of rental generators with City facilities.

Weekly rates shall include a fully operational generator meeting the specified kilowatt capacity, delivery, installation, maintenance, and pickup.

Generator Weekly Rates for
FY27
Weekly Rates for
FY28
Weekly Rates for
FY29
20 KW $ $ $
36 KW $ $ $
50 KW $ $ $
60 KW $ $ $
70 KW $ $ $
80 KW $ $ $
100 KW $ $ $
150 KW $ $ $
200 KW $ $ $
250 KW $ $ $
300 KW $ $ $
350 KW $ $ $
400 KW $ $ $
2,255.00 2,255.00 2,255.00
2,475.00 2,475.00 2,475.00
2,650.00 2,650.00 2,650.00
2,650.00 2,650.00 2,650.00
3,225.00 3,225.00 3,225.00
3,225.00 3,225.00 3,225.00
3,225.00 3,225.00 3,225.00
3,225.00 3,225.00 3,225.00
4,350.00 4,350.00 4,350.00
5,175.00 5,175.00 5,175.00
5,275.00 5,275.00 5,275.00
5,275.00 5,275.00 5,275.00
7,480.00 7,480.00 7,480.00

Task 4 – Generator Rental – As Primary Power
The contractor shall confirm equipment and connection compatibility of rental generators with City facilities. Weekly rates shall include a fully operational generator meeting the specified kilowatt capacity, delivery, installation, maintenance, and pickup. The generator will be used as the main source of electricity and is expected to run continuously for the duration of the rental.

Generator
Weekly Rate
For FY27
Weekly Rate
For FY28
Weekly Rate
For FY29
20 KW $ $ $
36 KW $ $ $
50 KW $ $ $
60 KW $ $ $
70 KW $ $ $
80 KW $ $ $
100 KW $ $ $
150 KW $ $ $
200 KW $ $ $
250 KW $ $ $
300 KW $ $ $
350 KW $ $ $
400 KW $ $ $
5,300.00
4,945.00 4,945.00 4,945.00
4,507.00 4,507.00 4,507.00
5,300.00 5,300.00
5,300.00 5,300.00 5,300.00
6,445.00 6,445.00 6,445.00
6,445.00 6,445.00 6,445.00
6,445.00 6,445.00 6,445.00
6,445.00 6,445.00 6,445.00
8,655.00 8,655.00 8,655.00
10,315.00 10,315.00 10,315.00
10,530.00 10,530.00 10,530.00
10,530.00 10,530.00 10,530.00
14,955.00 14,955.00 14,955.00
25

26 Updated: May 2026

EXHIBIT C

SCHEDULE OF PERFORMANCE
Routine annual services shall be performed on normal workdays, defined as non-holiday Mondays through Thursdays, 6:30 AM through 4:00 PM and Fridays, 6:30 AM through 3:00 PM. These services shall be scheduled in the months of October through December.

Invoices for annual services shall not be sent to the City without the service, load test, and oil analysis reports completed and attached.

PM-3 and routine annual service shall be performed concurrently on those generators that are due for PM-3 maintenance in that fiscal year. Preventive maintenance and repair services shall be performed on normal workday hours defined as non-holiday Mondays through Thursdays, 6:30 AM through 4:00 PM and Fridays, 6:30 AM through 3:00 PM.

Preventive maintenance services shall be scheduled in the months of October through December.

Non-Emergency Repairs - Contractor shall respond to email or phone requests for estimates within 24 hours and provide written estimates within three business days of the original request date. It shall be the Contractor’s responsibility to ensure it has all information to prepare accurate estimates.

Emergency Repairs - Emergency service response shall be 24/7/365. Once the City initiates a communication for emergency service, the Contractor must be able to reach eth site of the emergency within 4 hours of the initial communication.

Weighted Average Scores
Generator Maintenance Services
GenServe dba Odyssey Power MSHS Pacific Power Group

1. Experience and Qualifications of the contractor in
general as well as the project manager and other key
individuals. Provided saftey program details and a
statement of qualifications.

POINTS 30 26.25 20.25

2. Capability to perform necessary tasks, resolve
problems, provide good customer service and provide
timely repairs. Includes detailed electronic sample
reports. Provided other information that is helpful in
evaluating the company's ability to do the work
POINTS 30 27.75 23.25

3. References and Quality of proposal including
compliance with proposal requirements. Feedback from
multiple references was positive.

POINTS 10 7.50 9.50

4. Cost Schedule. Formula based per line item
breakdown in RFP.

POINTS 30 25.76 28.80
OVERALL SCORE 87.26 81.80

3 CITY COUNCIL STAFF REPORT
MEETING DATE: October 21, 2026
PREPARED BY:

Cynthia Iwanaga, Management Analyst
APPROVED BY: City Manager

APPROVE ON-CALL FENCING CONTRACTOR MAINTENANCE

SERVICE AGREEMENTS

RECOMMENDATION(S)

1. Award maintenance service agreements to Silicon Valley Paving, Inc. and Tucker Construction, Inc. in the not to exceed amount of $220,000 each to provide oncall fencing maintenance and repair services; and

2. Authorize the City Manager to execute and administer said agreements.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety and Quality of Life
Maintaining and Enhancing Infrastructure
Strategic Priorities 2026-2027
Fiscal Sustainability
REPORT NARRATIVE:

The purpose of this report is to provide the City Council with an opportunity to award agreements for on-call fencing maintenance and repair services in the not to exceed amount of $220,000 each during the initial two-year term, and to authorize the City Manager to execute and administer the agreements.

The City has contracted for fencing construction, maintenance, and repair services for City facilities for many years as the City does not have the staffing resources to perform the work internally. All contractors are required to be licensed C-13 fencing contractors by the California Contractors State License Board (CSLB). The process of obtaining quotes to select fencing contractors for individual projects and processing the contract documentation can take several weeks and many hours of staff time. To streamline the process, in October 2021, the City issued a Request for Proposals (RFP) to contract with a pre-qualified on-call fencing contractor that could respond to work proposal requests and complete fencing maintenance and repair work for the City. On December 15, 2021, the City Council approved an on-call fencing contract in the amount of $100,000. Since bringing an on-call fencing contractor under contract, the amount of

3 time needed to begin fencing projects, especially repairs, has been greatly reduced.

Maintenance staff has been very satisfied with the streamlined process.

The City's current on-call fencing contract expires on December 31, 2026. The new agreements are proposed with an initial two-year term with authorization for the City Manager to execute three (3) consecutive one-year extensions and the ability to increase the not-to-exceed amount to allow for annual price increases up to 5% of the prior year's pricing. The initial two-year term would be from January 1, 2027 to December 31, 2028.

The current RFP for on-call fencing services was released on August 3, 2026. In soliciting proposals, the City advertised in the Morgan Hill Times on July 31, 2026. The RFP was posted on the City website, Public Purchase online bid service, and at four builders' exchanges including the Builders' Exchange of Santa Clara County, Bay Area Builders' Exchange, San Francisco Builders' Exchange, and the Central Coast Builders' Association. Lastly, the RFP was posted on the Dodge and Data Analytics and Bid Net websites, whose subscribers include contractors as well as national builders' exchanges. Contractors registered on the City's Informal Bidders list with the required CSLB C-13 fencing license were also notified of the RFP opportunity via email. A nonmandatory virtual pre-proposal meeting was held on August 18, 2026.

Two proposals were received by the September 8, 2026 due date. Staff from the Public Services Department Maintenance Division independently evaluated and scored the proposals based on the contractors' narrative, which included experience, qualifications, references, and communication systems. The proposals were evaluated using a "Best Value" methodology in which contractors meeting the minimum threshold score of 30 out of 40 points in their narrative were then scored based on their cost proposals. Both proposals submitted scored the minimum 30 narrative points to advance to the scoring of their cost proposal pricing. Up to 60 points were available for cost proposals. A complete scoring summary is attached to this report (Attachment 1).

Based on the scoring criteria, Tucker Construction, Inc. scored the highest with 95.8 points and Silicon Valley Paving Inc. scored 67.7 points. City maintenance staff reviewed the proposed hourly rates for both, and determined that they were reasonable.

Tucker Construction, Inc. has been contracting for 42 years as a General Contractor and has had a C-13 fencing license for nine (9) years. Fencing services comprise 25% of their work. They are the City of Morgan Hill's current on-call fencing contractor. They also have ongoing work with other South Bay government agencies, including the City of San Jose, City of Santa Clara, City of Milpitas, Silicon Valley Power, Santa Clara County, and San Jose Water Company. They have also contracted with the cities of Campbell, Sunnyvale, Cupertino, and Los Gatos.

Contractor Total Points
Tucker Construction, Inc. 95.8
Silicon Valley Paving, Inc. 67.7

3 Silicon Valley Paving, Inc. has been contracting for 29 years as a General Engineering Contractor and also has a C-13 fencing license. Oversight of this agreement would include an employee who worked in the fencing trades for 41 years and owned a fencing company for 24 years prior to joining Silicon Valley Paving, Inc. Their customers have included the City of Fremont, Oak Grove School District, and Contra Costa Fire District.

Staff recommends entering into agreements with both Tucker Construction, Inc. and Silicon Valley Paving, Inc. to provide on-call fencing services to City facilities in the amount of $220,000 each in the initial two-year term (Attachments 2 & 3). Unlike singleproject contract awards, the award of these on-call agreements does not guarantee a minimum amount of work. On-call fencing projects would be initiated by City staff, providing scopes of work for individual projects to the contractors and requesting cost proposals. If staff determines the proposed cost is reasonable and acceptable for the proposed scope of work, staff would authorize the selected contractor to proceed with projects up to $75,000. Projects exceeding $75,000 would continue to be bid separately. Staff believes having an agreement with more than one fencing contractor will ensure adequate coverage for on-call fencing services and recommends awarding agreements to both firms. While there is significant difference in RFP scores, awarding to both contractors is still recommended to ensure the best cost savings and a higher guarantee of coverage for emergency repairs. Hourly pricing is included in the contracts, however, the amount of hours necessary for a job and the cost of source materials may not be the same for both contractors in every project, so obtaining costs before work will be beneficial financially in non-emergency repair situations.

The RFP document can be viewed via this link: On-Call Fencing RFP COMMUNITY ENGAGEMENT:

Not Applicable
As this is an administrative activity with no actual projects attached to it, no community engagement was conducted before this report was prepared aside from the public noticing items outlined above. If approved, the community will be informed about projects resulting from this agreement via the City's existing project communication tools including on-site project signs, "The Scoop," a weekly maintenance update on the City website, and Nextdoor Morgan Hill. Additional engagement activities may be conducted for projects that are likely to lead to strong interest or community concern.

ALTERNATIVE ACTIONS:

The City Council could decline to approve this agreement and instead direct staff to begin issuing separate agreements for each project.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

City Council previously awarded an on-call fencing contractor agreement on December 15, 2021.

3 FISCAL AND RESOURCE IMPACT:

The on-call fencing contractor service costs would be paid by funds budgeted within Park Maintenance, Streets Maintenance, specific Facility Maintenance budgets, or Capital Improvement Projects (CIP) budget.

CEQA (California Environmental Quality Act):

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

City of Morgan Hill: 2026 On-Call Fencing Contractor Scoring Summary NARRATIVE SCORING NARRATIVE SCORING (40 points)
Points
Available
Silicon Valley
Paving
Tucker
Construction

15.0 12.0 14.0

10.0 8.3 9.3

5.0 3.0 3.5

10.0 7.0 9.0

40.0 30.3 35.8
BID PRICING BID PRICING SCORING (60 points)
Item
Price from
Lowest Bidder
Silicon Valley
Paving
Tucker
Construction
Points
Available
Silicon Valley
Paving
Tucker
Construction

1. Journeyperson-Laborer Rate:

Monday to Friday (8 am to 5 pm) 105.00 150.00 105.00 15.0 10.5 15.0

2. Journeyperson - Laborer Rate:

Monday to Friday (5 pm to 8 am) and
Saturday Overtime 140.00 225.00 140.00 15.0 9.3 15.0

3. Journeyperson - Laborer Rate:

Sundays and Holidays Overtime 175.00 300.00 175.00 15.0 8.8 15.0

4. Foreman Journeyperson- Laborer
Rate: Monday to Friday (8 am to 5
pm) 120.00 180.00 120.00 5.0 3.3 5.0

5. Foreman Journeyperson - Laborer
Rate: Monday to Friday (5 pm to 8
am) and Saturday Overtime 155.00 270.00 155.00 5.0 2.9 5.0

6. Foreman Journeyperson-Laborer
Rate: Sundays and Holiday Overtime 190.00 360.00 190.00 5.0 2.6 5.0

60.0 37.4 60.0
100.0 67.7 95.8
2 1
Line item point score is lowest bidder's item rate divided by each Contractor's rate times the number of points available. For example, Silicon Valley Paving's Journeyperson Laborer Rate: M-F (8am to 5 pm)= 105/150 X 15 points = 10.5 points Previous Experience providing superior levels of on-call fencing services to like-sized public and/or private agencies
Assessments of work quality, performance and working relationships by current and recent clients indicating high levels of satisfaction and effectiveness Qualifications of staff to be assigned to provide on-call fencing contractor services to the City
Well organized communication systems and electronic reporting capabilities

SUBTOTAL- NARRATIVE POINTS

SUBTOTAL-PRICING POINTS

GRAND TOTAL

1 Updated: May 2026

MAINTENANCE SERVICE AGREEMENT
Tucker Construction, Inc.

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

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

2. Term of Agreement. This Agreement shall cover services rendered from the Effective Date of this Agreement until December 31, 2028 at which time SERVICE PROVIDER’S services shall be completed. The City Manager is authorized to extend the term of this Agreement for a maximum of three one-year extensions. Any such extension shall be in writing and signed by both Parties to this Agreement.

3. Scope of Service. The services to be performed by SERVICE PROVIDER shall be oncall fencing maintenance and repair services as further described in Exhibit A.

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

4.1. Amount. $220,000.00. Total compensation to SERVICE PROVIDER under this Agreement during its initial term set forth in Section 2 above shall not exceed Two Hundred Twenty Thousand dollars and shall be billed based on the rate and basis set forth in Exhibit B. If the City Manager extends the term of this Agreement pursuant to the provisions of Section 2 above, the City Manager shall have the authority to increase the maximum compensation allowed to be paid to SERVICE PROVIDER during that extended term period, so long as City Council has appropriated sufficient funds therefor, the Parties mutually agree to such amount in a writing signed by both Parties to this Agreement and provided further that in no event shall such maximum compensation allowed for each subsequent extended one-year term exceed 105% of the maximum compensation allowed to be paid to SERVICE PROVIDER for one year of service during the immediately preceding prior year of service.

4.2. Billing. SERVICE PROVIDER shall provide CITY with an invoice containing the dated, detailed, and itemized descriptions of all services performed and expenses incurred (if such expenses are reimbursable pursuant to Exhibit B) by SERVICE PROVIDER on a monthly basis unless otherwise specified in Exhibit B. All invoices shall be sent to the CITY addressed to the department head or project manager identified below in Section 14 Notices. Payment will be made to SERVICE PROVIDER within thirty (30) days of receipt of invoice by CITY. Any rate charged shall be prorated where services are interrupted or not provided for any rate period (for example, any monthly rate charge should be prorated when services were interrupted or provided for only part of the month). For services billed on an hourly rate, the minimum unit of billed time shall not exceed one tenth of one hour. CITY shall pay for services and expenses (if so provided in Exhibit B) up to the limit of compensation set forth above, that in the CITY’S judgment were necessary and reasonable. Services for work performed and expenses incurred in excess of the total compensation set forth in paragraph 4.1 above shall be at no cost to CITY.

5. Termination. CITY or SERVICE PROVIDER shall have the right to terminate this Agreement, without cause, by giving thirty (30) days' written notice or less under urgent

2 Updated: May 2026
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, and this Agreement shall terminate after the last day during the fiscal year for which appropriations shall have been budgeted for CITY or are otherwise available for payments.

5.2. Temporary Suspension of Services. CITY’S need for services may be suspended due to unforeseeable or unavoidable circumstances beyond its control. Such circumstances include, but are not limited to, earthquake, fire, explosion, flood, or other natural catastrophe; governmental legislation, condemnation, acts, orders, or regulation; war or acts of terrorism; strikes or labor difficulties; and quarantine, epidemic, or pandemic. CITY shall provide a 5-days’ written notice or less under urgent circumstances to temporarily suspend services at specific CITY facilities.

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

6. 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.

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.

3 Updated: May 2026

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.

6.3. Excusable Delay (Force Majeure). If either Party is unable to comply with any provision of this Contract due to causes beyond its reasonable control, direct or indirect, and which could not have been reasonably anticipated, such as Acts of God, acts of war, civil disorders, or other similar acts, such Party shall not be held liable for such failure to comply, provided the other Party receives written notice of such force majeure event no later than five (5) calendar days after commencement of such force majeure event. The spread or effects of Covid-19, and any variants thereof, can be reasonably anticipated and do not constitute a force majeure event.

Tariffs imposed by the US government, and any resulting supply disruptions do not constitute a force majeure event.

6.4. Responsibility for Damage to City Property. SERVICE PROVIDER shall be liable for any damage caused by SERVICE PROVIDER to any CITY. Any such damage shall be repaired at the SERVICE PROVIDER’ s sole expense.

6.5. Defective Work; Guarantee and Warranty.

6.5.1. “Defective” means work that is unsatisfactory or unsuited for the use intended, faulty, or deficient, that does not conform to the Agreement, or does not meet the requirements of any inspection, reference standard, test or approval referred to in the Agreement or has been damaged before final payment (unless responsibility for the protection thereof has been assumed in writing by CITY). Unapproved substitutions are Defective. CITY is the judge of whether work is Defective. A “Defect” is a condition, component, or part that is unsatisfactory or unsuited for the use intended, faulty, or deficient, that does not conform to the Agreement, or does not meet the requirements of any inspection, reference standard, test or approval referred to in the Agreement or has been damaged before final payment (unless responsibility for the protection thereof has been assumed in writing by CITY).

6.5.2. SERVICE PROVIDER shall perform all services, including labor, materials, tools, equipment, and related work, in a good workmanlike, and professional manner, consistent with industry standards. CITY may inspect and accept or reject any of SERVICE PROVIDER’s work under this Agreement, either during performance or when completed. CITY may withhold payment of a portion of an invoice because of defective work not remedied or because of unsatisfactory work performed by SERVICE PROVIDER. During the course of work or subsequent inspection, if any component is found to be worn, defective, or otherwise fails or malfunctions, SERVICE PROVIDER shall repair or replace such component with the same part or City approved equivalent. When defective work is remedied by SERVICE PROVIDER, payment shall be made for amounts withheld because of them.

4 Updated: May 2026

6.5.3. Observation and inspection of the work shall not relieve SERVICE PROVIDER of any of its obligations under this Agreement. Even though equipment, materials, or work required to be provided under the Agreement have been inspected, accepted, and estimated for payment, SERVICE PROVIDER shall, at its own expense, replace or repair any such equipment, material, or work found to be Defective up to the end of the guarantee period or materials and manufacturer warranties.

6.5.4. SERVICE PROVIDER does hereby guarantee its maintenance work performed pursuant to the scope of services (“Guarantee”). SERVICE PROVIDER hereby grants to OWNER for a period of one year (guarantee period) following SERVICE PROVIDER’S work, its unconditional warranty of the quality and adequacy of all of the work including, without limitation, all labor, materials and equipment provided by SERVICE PROVIDER and its subcontractors of all tiers in connection with the work (“Warranty”). Should any defect, failure or deficiency arise that is attributable to SERVICE PROVIDER’S installation methods, workmanship or craftmanship, SERVICE PROVIDER shall immediately correct, repair or replace the affected work at no cost to the CITY. SERVICE PROVIDER shall prioritize such corrective action above all other non-emergency work. SERVICE PROVIDER is not guaranteeing work performed previously by other providers, only its own work. SERVICE PROVIDER does not warrant or guarantee any parts, equipment, or materials beyond the scope of the original manufacturer’s warranty, and its stated limitations. All materials installed by the SERVICE PROVIDER shall be covered exclusively under their respective manufacturer warranty claims but shall not be responsible for costs associated with manufacturer covered failures.

6.5.5. If within one year after the date of SERVICE PROVIDER’s work, or such other longer period of time as may be prescribed by laws or regulations, or by any extended warranty or guarantee, any of SERVICE PROVIDER’s work is found to be Defective, SERVICE PROVIDER shall promptly, without cost to CITY and in accordance with SERVICE PROVIDER’s written instructions, correct such Defective work. SERVICE PROVIDER shall remove any Defective work rejected by CITY and replace it with work that is not Defective, and satisfactorily correct or remove and replace any damage to other work or the work of others resulting therefrom. If SERVICE PROVIDER fails to comply promptly with the terms of such instructions, or in an emergency where delay would cause serious risk of loss or damage, CITY may have the Defective work corrected or the rejected work removed and replaced. SERVICE PROVIDER shall pay for all claims, costs, losses and damages caused by or resulting from such removal and replacement. Where SERVICE PROVIDER fails to correct Defective work, or Defects are discovered outside the correction period, OWNER shall have all rights and remedies granted by law.

6.5.6. Neither final payment nor use nor occupancy of the work performed by the

5 Updated: May 2026
SERVICE PROVIDER shall constitute an acceptance of work not done in accordance with this Guarantee or relieve SERVICE PROVIDER of liability in respect to any express warranties or responsibilities for faulty materials or workmanship. SERVICE PROVIDER shall remedy any Defects in the work and pay for any damage resulting therefrom, which shall appear within the time period specified above in Section 6.5.5.

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

6 Updated: May 2026

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 selfinsured, SERVICE PROVIDER shall provide its Certificate of Permission to Self-Insure, duly authorized by the Department of Industrial Relations.

8.1.4. Pollution (Environmental) Liability. If the performance of SERVICE PROVIDER’S work or service under this Agreement involves hazardous materials, contaminated soil disposal, and/or a risk of accidental release of fuel oil, chemicals or other toxic gases or hazardous materials, SERVICE PROVIDER shall procure and maintain Pollution Liability covering the SERVICE PROVIDER’S liability for bodily injury, property damage and environmental damage resulting from pollution and related cleanup costs arising out of the work or services to be performed under this Agreement.

Coverage shall be provided for both work performed on site, as well as during the transport of hazardous materials. Such coverage shall be in the minimum amount of: (i) one million dollars ($1,000,000.00) for any one accident or occurrence, or (ii) the maximum amount of such insurance available to SERVICE PROVIDER under SERVICE PROVIDER'S
combined insurance policies (including any excess or “umbrella” policies), whichever is greater.

8.1.5. Professional Liability.

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

8.1.5.2. If the performance of SERVICE PROVIDER’S work or service under 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

7 Updated: May 2026
maximum amount of such insurance available to SERVICE
PROVIDER under SERVICE PROVIDER'S combined insurance
policies (including any excess or “umbrella” policies), whichever is greater.

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

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 “VII” or better.

8.4. Certificates. SERVICE PROVIDER shall furnish CITY with copies of all certificates as outlined herein, whether new or modified, promptly upon receipt. In the event of a claim

8 Updated: May 2026
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) 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-Liability of Officials and Employees of CITY. No official or employee of CITY shall be personally liable for any default or liability under this Agreement.

10. Compliance with Law.

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

SERVICE PROVIDER and its officers, employees, agents, and subcontractors covenant there shall be no discrimination based upon any basis prohibited by State or Federal law, including, but not limited to, race, color, creed, religion, 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 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

9 Updated: May 2026
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.

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

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

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

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

SIGNING THIS AGREEMENT, SERVICE PROVIDER AFFIRMS THAT IT HAS

DISCLOSED ANY FINAL JUDGMENTS, DECISIONS OR ORDERS FROM A COURT OR INVESTIGATORY GOVERNMENT AGENCY FINDING – IN THE FIVE (5) YEARS PRIOR TO EXECUTING THIS AGREEMENT – THAT SERVICE

PROVIDER OR ITS SUBCONTRACTOR(S) HAS VIOLATED ANY APPLICABLE WAGE AND HOUR LAWS. SERVICE PROVIDER FURTHER AFFIRMS THAT IT OR ITS SUBCONTRACTOR(S) HAS SATISFIED AND COMPLIED WITH – OR

HAS REACHED AGREEMENT WITH THE CITY REGARDING THE MANNER IN WHICH IT WILL SATISFY – ANY SUCH JUDGMENTS, DECISIONS OR ORDERS.

Judgments or Decisions During Term of Contract: If at any time during the term of this Agreement, a court or investigatory government agency issues a final judgment, decision or order finding that SERVICE PROVIDER or any subcontractor it employs to perform work under this Agreement has violated any applicable wage and hour law, or SERVICE PROVIDER learns of such a judgment,

10 Updated: May 2026
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.

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

13. Conflict of Interest and Reporting. SERVICE PROVIDER shall at all times avoid conflict of interest or appearance of conflict of interest in performance of this Agreement including, without limitation, complying with California Government Code section 1090 et 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).

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.

11 Updated: May 2026
Address of SERVICE PROVIDER is as follows:

Tucker Construction, Inc.
1727-A Little Orchard Street
San Jose, CA 95125
Address of CITY is as follows:

Keri Russell, Maint. Mgr.

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

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

15. Licenses, Permits and Fees. SERVICE PROVIDER shall obtain a City of Morgan 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 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.

17.4. Public Record. The City, as a public agency, is subject to the disclosure requirements of the California Public Records Act (“CPRA”). This

12 Updated: May 2026
Agreement, including Service Provider’s rates and fees, is a public record under the California Public Records Act.. If Service Provider has proprietary information contained in these documents, and Service Provider wishes to claim that such information falls within one or more CPRA exemptions, Service Provider must clearly mark such information “Confidential and Proprietary,” and identify the specific lines containing the information. In the event of a request for such information, the City will make reasonable efforts to provide notice to Service Provider prior to such disclosure.

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

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

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

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

22. Defense and Indemnification.

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

13 Updated: May 2026
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.

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. 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 forty-eight (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.

26. 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

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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.

27. 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.

28. 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.

29. 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.

30. Counterpart Signatures. This Agreement may be signed in multiple counterparts, which shall, when executed by all the parties, constitute a single binding agreement.

Signatures on the following page.

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EXHIBIT A

SCOPE OF SERVICES
The Service Provider shall be a California Contractors State License Board (CSLB) licensed Fencing Contractors (CSLB C-13) that will provide on-call fencing maintenance and repair services at various City buildings and facilities. The Service Provider is part of the City’s prequalified pool of on-call fencing contractors who are eligible to respond to proposal requests for fencing maintenance and repair projects under $75,000.

Service Provider will provide full service on-call fencing maintenance and repair services, and administer the duties and responsibilities in compliance with all applicable laws, regulations, policies and procedures.

Service Provider will be responsible for providing labor, supervision, materials, tools, equipment, transportation, supplies, services, tasks and incidental and customary work, and the shop facilities necessary to perform high quality work on-call fencing maintenance and repair work at various City buildings and facilities (see Attachment A).

The Service Provider shall erect barricades, warning signs, and any other devices to prevent unauthorized access by the public or unauthorized City staff to work areas.

The Service Provider shall respond to all requests for repairs or unscheduled emergency repairs as required, 24 hours per day, 365 days per year, including holidays.

Service Provider will also be responsible for discarding all used materials. Service Provider shall leave work areas free of all dirt, litter, lubricants, or other materials utilized to perform fencing maintenance and repairs.

The scope and number of projects and tasks are unknown at the time of the agreement’s execution.

The individual projects for on-call fencing maintenance and repair services under this agreement will not exceed $75,000 each.

On-call fence maintenance or repair projects will be initiated by requesting cost proposals from the selected on-call fencing contractors/service providers. All labor and material costs shall be included in the proposal. The City anticipates requesting proposals from more than one on-call fencing contractor for each scope of work.

I. General Locations:

The contractors will provide all labor, equipment, and materials to maintain and repair fences as requested by the City of Morgan Hill in locations including, but not limited to:
a. City owned building facilities and grounds
b. City leased properties
c. City parks
d. City owned parcels and open spaces

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e. City rights-of-ways
f. City owned or leased water facilities including, but not limited to:

1. Well sites

2. Tank sites

3. Outfall locations

4. Retention ponds
II. Specifications:

A. Fence Types:

1. The City may require fences and/or gates built in City owned or leased properties of various sizes and materials, including, but not limited to:
a. Wood Privacy Fence

1. With and without lattice top panels
b. Wooden Gates
c. Split Rail Fences
d. Chain Link fencing and gates, including, but not limited to:

1. Variety of Mesh Sizes

2. Galvanized or other coatings

3. Top Wire

4. Top Pole

ATTACHMENT A

CITY OF MORGAN HILL

MUNICIPAL FACILITY LOCATIONS

BUILDING/FACILITY ADDRESS
Aquatics Center 16200 Condit Road
Centennial Recreation Center 171 West Edmundson
Avenue
City Hall 17575 Peak Avenue
The Villas 535 Alkire Avenue
Community and Cultural Center,
and Community Playhouse
17000 and 17090 Monterey
Road
Community Garden Railroad Avenue
Council Chamber Building 17555 Peak Avenue
Outdoor Sports Center 16500 Condit Road
Police Department 16200 Vineyard Boulevard
Public Works Corporation Yard 100 Edes Court
Butterfield Fire Station 17285 Butterfield Blvd.

Dunne Hill Fire Station 2100 East Dunne Avenue
El Toro Fire Station 18300 Old Monterey Road
All other parks and city-owned
properties
18

EXHIBIT B

SCHEDULE OF COMPENSATION RATES
TUCKER CONSTRUCTION, INC.

ON-CALL FENCING MAINTENANCE & REPAIR SERVICE HOURLY RATES

INCLUDING TRAVEL TIME
19 Bid
Item Description of Bid Item Hourly Rate
1 Journeyperson-Laborer Rate: Monday to Friday 8 am to 5 pm $ 105.00
2 Journeyperson-Laborer Rate: Monday to Friday 5 pm to 8 am and Saturday Overtime
$ 140.00
3 Journeyperson- Laborer Rate: Sundays and Holidays Overtime $ 175.00
4 Foreman Journeyperson-Laborer Rate: Monday to Friday 8 am to 5 pm
$ 120.00
5 Foreman Journeyperson-Laborer Rate: Monday to Friday 5 pm-8 am and Saturday Overtime
$ 155.00
6 Foreman Journeyperson- Laborer Rate: Sundays and Holidays Overtime $ 190.00
Note: Quantities cannot be pre-determined, but shall be on an “as needed” basis. Mark-up on permits, 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.

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EXHIBIT C

SCHEDULE OF PERFORMANCE
The work is to be scheduled with the City Maintenance Manager or other designated City representative.

4 CITY COUNCIL STAFF REPORT
MEETING DATE: October 21, 2026
PREPARED BY:

David Gittleson, Senior Civil Engineer
APPROVED BY: City Manager

APPROVE THE PURCHASE OF AN EASEMENT FROM THE COUNTY

OF SANTA CLARA FOR THE PG&E UNDERGROUNDING WORK ON

HALE AVENUE

RECOMMENDATION(S)

1. Adopt resolution approving the purchase of a public service easement (2,110 square feet), APN 764-19-028 for $2,100 from the County of Santa Clara for the Upper Llagas Creek Flood Protection Project; and

2. Authorize the City Manager to execute all documents and make minor modifications as necessary in order to consummate the transaction.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety and Quality of Life
Maintaining and Enhancing Infrastructure
Strategic Priorities 2026-2027
Public Safety
Guiding Documents
Morgan Hill 2035 General Plan
REPORT NARRATIVE:

For decades, the City has supported Valley Water in efforts to complete the Upper Llagas Creek Flood Protection Project. The completion of this project will provide flood control for the West Little Llagas Creek running through Morgan Hill, protecting homes and businesses. Valley Water is currently under construction with Phase 2B of the Flood Control Project and is scheduled to be complete by January 2027. Included in the project is the reconstruction of Hale Avenue and the undergrounding of overhead utilities along the west side of Hale Avenue between Main Avenue and Wright Avenue.

The original PG&E Rule 20 contract was issued in late 2022. By the time the final phase of the Flood Control Project was under construction, several years had passed. During that time, PG&E regulations and costs changed, which necessitated a revision to the

4 original PG&E Rule 20 design. Thus, in mid 2026, PG&E provided a revised Rule 20 design and costs which included additional work not included in the original design. Part of the additional work involves upgrading the electrical service from Hale Avenue to the Park Plaza Townhomes (220 Berry Court) (Attachment 1-Project Location Map). The electrical service was originally connected to a pole along Hale Avenue with direct burial (no conduit) and no easement through the County parcel adjacent to the development.

Thus, the revised PG&E design is requiring the City to acquire an easement from the County in order to complete the undergrounding Rule 20 work along Hale Avenue (Attachment 2-Purchase and Sale Agreement).

Staff then contacted the County and arranged for the sale of the easement on their property. Therefore, staff is requesting that the City Council adopt the resolution (Attachment 3-Resolution) approving the purchase of an easement from the County for PG&E's use to upgrade the electrical service to the Park Plaza Townhouses.

COMMUNITY ENGAGEMENT:

The City continues to engage the community on the work happening in association with Valley Water's Upper Llagas Creek Flood Protection Project. Significant work has been completed thus far, with Hale Avenue planned to open at the end of October 2026 and the project being fully completed by early 2027.

ALTERNATIVE ACTIONS:

The City Council could elect not to execute the County Purchase and Sale agreement at this time. This is not recommended as the PG&E Rule 20 plans require this easement in order to proceed with the undergrounding along the west side of Hale Avenue.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

The City has taken numerous actions over the last several decades in support of undergrounding the overhead lines along Hale Avenue, Most recently: On June 17, 2026, City Council approved a PG&E undergrounding agreement for $297,084 to underground dry utilities at the intersection of Hale and Wright Avenues. On November 4, 2020, City Council approved a PG&E agreement to underground dry utilities for the Hale Avenue Extension Project for $384,876. On August 17, 2022, City Council approved a PG&E agreement to underground dry utilities along the east side of Hale Avenue between Main and Wright for $589,199.

FISCAL AND RESOURCE IMPACT:

Funding for acquiring the easement of $2,100 is allocated within the approved Capital Improvement Program under the Llagas Flood Control Project (SD4003) utilizing Fund 303-Drainage Impact Fund.

CEQA (California Environmental Quality Act):

Environmental Impact Report & Categorical Exemption
The easement acquisition is not considered a project, as defined in Section 15378 of the State CEQA Guidelines. However, an Environmental Impact Report (EIR) was

4 certified for the Hale Avenue Extension and Santa Teresa Corridor Widening and Realignment Project in accordance with the California Environmental Quality Act (CEQA). Valley Water certified an Environmental Impact Report for the Flood Control Project. Additionally, relocation of infrastructure and utility work along existing roadways and associated with the Valley Water Project is exempt from CEQA per categorical exemption of Class 1, Existing Facilities.

Attachment 1-Project Location Map

Attachment 2-Purchase and Sale Agreement

Attachment 2-Purchase and Sale Agreement

Attachment 2-Purchase and Sale Agreement

Attachment 2-Purchase and Sale Agreement

Attachment 2-Purchase and Sale Agreement

Attachment 2-Purchase and Sale Agreement

Attachment 2-Purchase and Sale Agreement

Attachment 2-Purchase and Sale Agreement

Attachment 2-Purchase and Sale Agreement

Attachment 2-Purchase and Sale Agreement

Attachment 2-Purchase and Sale Agreement

Attachment 2-Purchase and Sale Agreement

Attachment 2-Purchase and Sale Agreement

RESOLUTION NO. _______

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF MORGAN HILL APPROVING A PURCHASE

AGREEMENT FOR A PUBLIC SERVICE EASEMENT (APN
764-19-028) FROM THE COUNTY OF SANTA CLARA, FOR

THE UPPER LLAGAS CREEK FLOOD PROTECTION

PROJECT
WHEREAS, the Upper Llagas Creek Flood Protection Project is included in the Fiscal Years 2024-25 through 2029-2030 Capital Improvement Program under Llagas Flood Control (SD4003) funded by Drainage Impact Fund (303). The subject property from the County of Santa Clara (County), is required in by the PG&E Rule 20 undergrounding work in order to construct the project, and therefore in the public’s interest to acquire a portion of the real property for the public Project (Upper Llagas Creek Flood Protection Project); and
WHEREAS, the County of Santa Clara prepared the Purchase and Sale Agreement and Grant Deed for execution at the City’s request and are agreeable to the sale of the easement.

NOW, THEREFORE, City Council of the City of Morgan Hill, based upon the foregoing and all documents, statements and facts known to City Council, does hereby resolve:

SECTION 1. Approval of Easement Purchase Agreement. City Council approves the Easement Purchase Agreement to acquire a public service easement (2,110 SF) for a total amount of $2,100 from the County. The Settlement amount of $2,100 plus any closing costs (if any) are hereby approved.

SECTION 2. Authority to City Manager. City Council authorizes the City Manager to execute the Agreement and all documents necessary to consummate the transactions contemplated therein, including without limitation, accepting the Grant Deed. City Council further authorizes the City Manager to make minor modifications to the foregoing described documents which may be necessary to consummate the transactions
SECTION 3. CEQA.

The easement acquisition is not considered a project, as defined in Section 15378 of the State CEQA Guidelines.

However, the Upper Llagas Creek Flood Protection project is a project and requires CEQA. An Environmental Impact Report (EIR) was certified for the Hale Avenue Extension and Santa Teresa Corridor Widening and Realignment Project in accordance with the California Environmental Quality Act (CEQA). Valley Water certified an Environmental Impact Report for the Flood Control Project. Additionally, relocation of infrastructure and utility work along existing roadways and associated with the

City of Morgan Hill Resolution
No. XX-XXX

Valley Water Project is exempt from CEQA per categorical exemption of Class 1, Existing Facilities.

PASSED AND ADOPTED by the City Council of Morgan Hill at a Regular Meeting held on the 21st day of October 2026 by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

APPROVED: ATTEST:
____________________________ ________________________________ MARK TURNER, Mayor MICHELLE BIGELOW, City Clerk
 CERTIFICATION 
I, Michelle Bigelow, City Clerk of the City of Morgan Hill, California, do hereby certify that the foregoing is a true and correct copy of Resolution No.______ adopted by the City Council at the meeting held on October 21, 2026.

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

City Council
Meeting Minutes
Mark Turner - Mayor
Marilyn Librers - Mayor Pro Tem
Soraida Iwanaga - Council Member
Yvonne Martínez Beltrán - Council Member
Miriam Vega - Council Member
Wednesday, September 16, 2026
Closed Session 5:30 p.m.

Regular Session 6:00 p.m.

Council Chamber Building
17555 Peak Avenue, Morgan Hill, CA 95037

SPECIAL/REGULAR MEETING
A special meeting of the City Council was called at 5:30 p.m. for the purpose of conducting a closed session.

SPECIAL MEETING
5:30 p.m. Closed Session

CALL TO ORDER
Mayor Turner called the City Council meeting to order at 5:30 p.m.

ROLL CALL ATTENDANCE
City Clerk Bigelow called the roll.

PRESENT Mark Turner, Marilyn Librers, Soraida Iwanaga, Yvonne Martinez Beltran, Miriam Vega
ABSENT None
Council Member Martinez Beltran arrived at 6:09 p.m.

September 16, 2026
2 DECLARATION OF POSTING AGENDA
City Clerk Bigelow declared the posting of the agenda.

CLOSED SESSION
City Attorney Tolentino announced the closed session item.

Conference with Real Property Negotiators [Government Code § 54956.8] Property: APN 817-06-002
Negotiating Parties: Bay Area Sports Financing; Christina Turner, City Manager; and Chris Ghione, Assistant City Manager/Public Services Director Under Negotiation: Price and Terms of Payment

OPPORTUNITY FOR PUBLIC COMMENT ON CLOSED SESSION
Public comment opened at 5:30 p.m. With no requests to speak, public comment closed.

ADJOURN TO CLOSED SESSION
The meeting adjourned to closed session at 5:30 p.m.

REGULAR MEETING
The regular meeting convened at 6:00 p.m.

SILENT INVOCATION

PLEDGE OF ALLEGIANCE

CLOSED SESSION REPORT OUT
City Attorney Tolentino reported that the City Council met in closed session earlier in the evening on one item and there were no reportable actions.

PROCLAMATIONS
Childhood Cancer Awareness Month
National Preparedness Month

CITY COUNCIL REPORTS
Council Member Martinez Beltran shared that she participated in a Valley Water tour of the Upper Llagas Creek Flood Protection Project and received an update on the project’s progress and flood protection improvements. She also shared that she held a community event at the Community and Cultural Center, which included activities for children and participation from the Morgan Hill Police Department and Santa Clara County Sheriff’s Office. She also announced an upcoming ribbon-cutting event with

September 16, 2026
3 Silicon Valley Clean Energy.

OTHER REPORTS
Council Member Iwanaga shared that she received an update on the Upper Llagas Creek Flood Control Project, including project timelines, trails, and the anticipated opening of Hale Avenue. She also attended a gala benefiting homeless veterans in San Jose and participated in a meeting addressing efforts to support the homeless community in South County.

CITY MANAGER'S REPORT
City Manager Turner shared that Morgan Hill Police Officer Kenneth Hall was nominated for the California Narcotic Officers’ Association 2026 Patrol Officer of the Year Award for his proactive narcotics enforcement efforts. She announced the Greater Downtown Specific Plan Public Workshop is scheduled for September 17, noting that Spanish translation and interpretation services would be available, and the Centennial Recreation Center’s 20th Anniversary celebration is scheduled for October 10. She also shared information regarding the Spanish Leadership Academy and that the November 3 ballot will ask Morgan Hill voters to decide whether the City Treasurer position should remain elected or become appointed.

CITY ATTORNEY'S REPORT
None.

PUBLIC COMMENT FOR ITEMS NOT ON THE AGENDA
Public comment opened at 6:18 p.m. The following people were called to speak:

Dan Cloutier
Kathy Chavez Napoli
Sharon Luna
With no further requests to speak, public comment closed.

ADOPTION OF AGENDA
MOTION:

Adopting the agenda as posted.

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

September 16, 2026
4 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.

Public comment opened at 6:26 p.m.

Chris Robell was called to speak and spoke on item 9.

With no further requests to speak, public comment closed.

MOTION:

Approving consent calendar items 1 through 6 and 8 through 10.

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

1. ACCEPT ANNUAL EVALUATION REPORT FOR THE SANTA CLARA
COUNTY MULTl-JURISDICTIONAL PROGRAM FOR PUBLIC INFORMATION (PPI) FOR FY 2025-26 (YEAR 5) RELATING TO THE FEDERAL EMERGENCY

MANAGEMENT AGENCY'S NATIONAL FLOOD INSURANCE PROGRAM'S

COMMUNITY RATING SYSTEM PROGRAM
Recommendation:

Accept the Annual Evaluation Report for FY 2025-26 (Year 5) for the 2021 Santa Clara County Multi-Jurisdictional Program for Public Information (PPI).

2. ACCEPT THE 2025 ENCINO TANK REHAB PROJECT
Recommendation:

1. Accept as complete the 2025 Encino Tank Rehab Project;

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

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

3. ACCEPT THE CITYWIDE MULTI-SITE SOLAR SYSTEM PROJECT

September 16, 2026
5 Recommendation:

1. Accept as complete the 2025 Citywide Multi-Site Solar System Project;

2. Authorize the Public Services Director to sign the Notice of Completion; and

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

4. APPROVE CHANGE ORDER FOR BUTTERFIELD FIRE STATION PROJECT IN THE AMOUNT OF $25,825
Recommendation:

Approve and authorize the City Manager to execute a Change Order with Larry S. Kent, Inc. DBA Kent Construction in the amount of $25,825 for coordination, submittals, meetings, third-party electrical testing, validation, and securing the facility's commercial Permission to Operate (PTO) with Pacific Gas and Electric Company (PG&E) for the Butterfield Fire Station Project.

5. APPROVE THE AUGUST 19, 2026 AND AUGUST 26, 2026 CITY COUNCIL

MEETING MINUTES
Recommendation:

Approve the August 19, 2026 and August 26, 2026 City Council Meeting Minutes.

6. APPROVE THIRD AMENDMENT TO THE SERVICE AGREEMENT WITH CARBONIC SERVICE, INC. FOR CARBON DIOXIDE (CO2) SERVICES IN A TOTAL AMOUNT NOT TO EXCEED $100,000
Recommendation:

1. Approve the Third Amendment to the Service Agreement with Carbonic Service, Inc. for an additional year of carbon dioxide (CO2) services for $25,000, for a total agreement amount of $100,000; and

2. Authorize the City Manager to execute and administer the Service Agreement.

8. AUTHORIZE CITY MANAGER TO EXECUTE FIRST AMENDMENT TO

PROPERTY USE AGREEMENT WITH NEW CINGULAR WIRELESS PCS FOR CELL SITE AT 2275 ROLLING HILL DRIVE
Recommendation:

Authorize the City Manager to execute the First Amendment to New Cingular Wireless PCS's Property Use Agreement.

September 16, 2026
6 9. RATIFY CITY POSITION ON PENDING LEGISLATION
Recommendation:

Ratify the City’s position supporting pending legislation Assembly Bill 1821 (Pacheco) California Public Records Act: agency response time.

10. RECEIVE MONTHLY BUDGET UPDATE AND AUGUST 2026 FINANCIAL

AND INVESTMENT REPORTS
Recommendation:

Receive and file reports.

ITEMS PULLED FOR DISCUSSION

7. APPROVE PACIFIC GAS AND ELECTRIC COMPANY (PG&E) AGREEMENT

FOR UNDERGROUNDING DRY UTILITIES FOR THE UPPER LLAGAS
CREEK FLOOD CONTROL PHASE 2B PROJECT BETWEEN WRIGHT AND MAIN AVENUES IN AN AMOUNT OF $388,390.48
Recommendation:

Approve and authorize the City Manager to execute and administer a Pacific Gas and Electric Company Agreement to underground dry utilities on Hale Avenue between Main Avenue and Wright Avenue for $388,390.48.

City Manager Turner provided a report.

Public comment opened at 6:32 p.m. With no requests to speak, public comment closed.

MOTION:

Approving the recommended action.

RESULT: Passed
MOVER: Mayor Pro Tem Librers
SECONDER: Council Member Martinez Beltran
AYES: Mayor Turner, Mayor Pro Tem Librers, Council Member Iwanaga, Council Member Martinez Beltran, Council Member Vega
NAYS: None
ABSTAIN: None
ABSENT: None
The meeting recessed at 6:32 p.m. and reconvened at 6:39 p.m.

OTHER BUSINESS

September 16, 2026
7 11. CONSIDERATION OF A FORMAL CENSURE OF COUNCIL MEMBER

YVONNE MARTINEZ BELTRAN
Recommendation:

1. Receive Presentation of Censure Resolution from Outside Special Counsel (7 minutes);

2. Receive Response from Council Member Martinez Beltran (7 minutes);

3. Receive Rebuttal Comments from Outside Special Counsel (2 minutes);

4. Receive Public Comment;

5. Receive Council Comments; and

6. Consider adoption of Resolution entitled "A Resolution of the City Council of the City of Morgan Hill, California, Approving Censure of Council Member Yvonne Martinez Beltran."
Outside Special Counsel Shelline Bennett provided a report.

Council Member Martinez Beltran responded.

Outside Counsel Bennett provided a rebuttal.

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

Sally Casas
Chris Robell
Daniel Cloutier
Kathy Sullivan
Brian Sullivan
Bruce Cooley
Kathy Chavez Napoli
Armando Benavides
Linda Esquido
Susan
Yvonne
Kaitlin
Patrick McGarrety on behalf of County Supervisor Arenas (Zoom) With no further requests to speak, public comment closed.

MOTION:

Approve recommended action and adopt Resolution of the City Council of the City of Morgan Hill, California, Approving Censure of Council Member Yvonne Martinez Beltran.

RESULT: Passed
MOVER: Council Member Iwanaga
SECONDER: Council Member Vega
AYES: Mayor Turner, Mayor Pro Tem Librers, Council Member Iwanaga, Council Member Vega
NAYS: Council Member Martinez Beltran

September 16, 2026
8 ABSTAIN: None
ABSENT: None
The meeting recessed at 7:37 p.m. and reconvened at 7:50 p.m.

PUBLIC HEARINGS

12. CONSIDERATION OF ADOPTION OF AN INTERIM ORDINANCE
INSTITUTING A TEMPORARY 45-DAY MORATORIUM TO PROHIBIT

PROCESSING AND APPROVAL OF NEW LAND USE APPLICATIONS FOR

FREE STANDING DATA CENTERS AND GRID-SCALE BATTERY ENERGY

STORAGE SYSTEMS (BESS) WITHIN CITY LIMITS
Recommendation:

1. Determine the adoption of this Interim Ordinance is exempt from California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15061(b)(3);

2. Introduce by title only, adopt, and waive further reading of Interim Ordinance, imposing a 45-day moratorium prohibiting processing and approval of new land use applications for Free Standing Data Center or Grid-Scale Battery Storage Systems;

3. Direct staff to develop policy and regulations relating to free standing data center and grid-scale battery energy storage systems; and

4. Direct the Planning Commission to review draft policies and regulations and make recommendations to City Council in accordance with the Morgan Hill Municipal Code.

Development Services Director Carman provided a report and noted that the Interim Ordinance included findings to protect public health and safety from potential environmental effects, including energy resource strain, water usage, and noise.

Public comment opened at 7:54 p.m. The following people were called to speak:

Eric Negomis
Armando Benavides
Sharon Luna
With no further requests to speak, public comment closed.

MOTION:

Determining the Adoption of the Interim Ordinance is exempt from California Environment Quality Act ("CEQA") pursuant to CEQA Guidelines Section 15061(b)(3).

RESULT: Passed
MOVER: Council Member Martinez Beltran

September 16, 2026
9 SECONDER: Council Member Vega
AYES: Mayor Turner, Mayor Pro Tem Librers, Council Member Iwanaga, Council Member Martinez Beltran, Council Member Vega
NAYS: None
ABSTAIN: None
ABSENT: None
MOTION:

Introducing, adopting and waiving the reading of the Interim Ordinance.

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

Directing staff to develop policies and regulations (12.3) and the Planning Commission to make recommendations to the City Council in accordance with the Morgan Hill Municipal Code (12.4).

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

FUTURE COUNCIL INITIATED AGENDA ITEMS
Mayor Turner requested a future agenda item addressing bicycle or e-bike organized, planned, or street takeovers.

September 16, 2026
10 ADJOURNMENT
There being no further business, Mayor Turner adjourned the meeting at 8:03 p.m.

Minutes Prepared by:

Michelle Bigelow, City Clerk

6 CITY COUNCIL STAFF REPORT
MEETING DATE: October 21, 2026
PREPARED BY:

James Sylvain, Deputy Director Utility Services
Inga Alonzo, Management Analyst
APPROVED BY: City Manager

APPROVE THE TRANSFER OF TWO MONITORING WELLS TO SANTA

CLARA VALLEY WATER DISTRICT

RECOMMENDATION(S)
Authorize the City Manager to execute a Transfer of Ownership Agreement of the two monitoring wells with State Permit Numbers 09503E09R004 and 09503E09R005 to the Santa Clara Valley Water District.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Enhancing Public Safety and Quality of Life
Maintaining and Enhancing Infrastructure
Strategic Priorities 2026-2027
Fiscal Sustainability
Guiding Documents
Water System Master Plan
REPORT NARRATIVE:

In 2003, the City of Morgan Hill constructed two monitoring wells that tracked groundwater levels and water quality for the water system. The purpose of the wells was to measure aquifer conditions and provide data to guide decisions about water withdrawal rates.

City staff now recommend transferring these two monitoring wells to the Santa Clara Valley Water District (Valley Water) as part of a broader effort to consolidate groundwater monitoring more efficiently. Valley Water currently maintains a network of monitoring wells across multiple jurisdictions, and incorporating the City's two wells into that system will allow the City to continue to receive data and information while shifting responsibility for ownership and management to Valley Water. Additionally, Valley Water has specialized expertise and staff dedicated to groundwater monitoring, which will improve consistency in reporting. The City will retain access to the data from the wells. Based on the outlined benefits, staff recommends transferring ownership of the wells to Valley Water.

6 COMMUNITY ENGAGEMENT:

Not Applicable.

Management of the City's Water System is an expectation of the community.

ALTERNATIVE ACTIONS:

The City could elect not to move forward with the transfer, but that is not recommended as it is not an effective use of our resources to own and maintain the wells when Valley Water is willing to do so.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

No prior City Council actions have been taken on this project.

FISCAL AND RESOURCE IMPACT:

The transfer of two monitoring wells to the Water District would have a positive fiscal impact on the City by reducing ongoing staff responsibilities and freeing up limited staff resources for other operational needs.

CEQA (California Environmental Quality Act):

Categorical Exemption
The agreement involves the transfer, ongoing operation, and maintenance of existing monitoring wells involving negligible or no expansion of existing use and is categorically exempt under Class 1, Existing Facilities.

Santa Clara Valley Water District | 5750 Almaden Expressway, San Jose, CA 95118-3686 | (408) 265-2600 | www.valleywater.org Clean Water • Healthy Environment • Flood Protection
♺
Well Transfer Ownership Agreement
State Well Number: 09S03E09R004 and 09S03E09R005
Property APN(s): Not Applicable – No APN; City-owned Right-of-Way Well Location(s): Mission Avienda, 165 feet southwest of Peet Road, Morgan Hill, CA 95037 Property Owner: City of Morgan Hill
Effective on the date last set forth below, the Property Owner, City of Morgan Hill (“Owner” or “City”) hereby grants to the Santa Clara Valley Water District, its employees, agents, and contractors, hereinafter called “Valley Water”, ownership of the wells (wells) referenced by State Well Numbers above to operate, maintain, repair, and reconstruct if needed the wells for groundwater monitoring.

Valley Water hereby accepts ownership of the wells.

Valley Water and Owner agree to the following conditions:

1. The Owner covenants that it is the sole owner of this well, or authorized representative of the owner, and that it has the right to enter into this Agreement.

2. Owner agrees to allow Valley Water access to the well. Owner will make reasonable efforts not to materially interfere with Valley Water’s use of the well.

3. All work performed by Valley Water on the well shall be completed in a good workman like manner which causes minimal interference or disturbance to surrounding public or private properties.

4. All work performed by Valley Water on the well shall be completed at the sole expense of Valley Water.

5. Valley Water access to the well may be subject to reasonable restrictions as to time and date as established in the sole discretion of the Owner, as established in the Encroachment Permit issued by the Owner.

6. Valley Water will, at its sole cost and expense, maintain the wellhead so that it is in compliance with local, state, and federal regulations and statutes.

7. If Valley Water elects to discontinue use of the well, Valley Water will destroy the well in accordance with applicable local, state, and federal regulation and statutes at its sole cost and expense.

8. This Well Transfer Ownership Agreement shall terminate upon completion of well destruction and related closeout activities.

9. Valley Water shall, to the fullest extent permitted by law, indemnify, defend, and hold harmless the City, its elected or appointed officials, boards, agencies, officers, agents, employees, and volunteers from and against any and all third-party 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, or pertain to, or relate to Valley Water’s ownership or use of the well after the date that the City transfers ownership to

Well Ownership Transfer Agreement

Valley Water, except to the extent any claims arise from or relate to the City’s gross negligence or intentional misconduct.

10. This Agreement shall become effective on the date that it is executed by the last party to duly execute this agreement.

By signing below, the signatories acknowledge that they are the duly authorized to sign this document on behalf of their respective public agencies and that their agencies agree to each of the provisions of this Agreement.

City of Morgan Hill:
_____________
By: Signature Printed Name and Title Date
Mailing Address Phone Number
Santa Clara Valley Water District:

Gregory Williams - Deputy Operating Officer
Date:

Approved as to Form:
__________________________
Elisa Tolentino, City Attorney
__________________________
Date

7 CITY COUNCIL STAFF REPORT
MEETING DATE: October 21, 2026
PREPARED BY:

Matt Mahood, Economic Development Director
APPROVED BY: City Manager

ACCEPT MORGAN HILL TOURISM BUSINESS IMPROVEMENT

DISTRICT (MHTBID) OWNERS' ASSOCIATION ANNUAL REPORT
(VISIT MORGAN HILL)

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

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Maintaining and Enhancing Infrastructure
Preserving and Cultivating Public Trust
Strategic Priorities 2026-2027
Fiscal Sustainability
Economic Development and Tourism
Guiding Documents
Bikeways, Trails, and Recreation Master Plan
Economic Blueprint
Morgan Hill 2035 General Plan
REPORT NARRATIVE:

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

Background:

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

7 promotion, as well as sports facility improvements/programs designed to market the area as a tourism and event destination and increase room night sales at assessed lodging businesses. On March 1, 2024, the MHTBID was renewed and entered a new term of 10 years, through February 28, 2034.

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

Management District Plan:

A Management District Plan (MDP) identifies the MHTBID's boundaries, budget, services, and governance. Below is a summary of the MHTBID's MDP. • Boundary: All lodging businesses located within the boundaries of the City of Morgan Hill.
• Term: Ten (10)-year assessment beginning March 1, 2024, through February 28, 2034, with an annual 30-day period protest for termination by assessed businesses.
• Budget: Annual assessment rate of 1.5% (on top of the existing TOT) of gross short-term room rental revenue, producing an annual budget of approximately $341,000. The MDP allows the Owners' Association to annually approve incremental increases or decreases to the MHTBID rate of up to 0.5%. The cumulation of approved rate increases or decreases shall not exceed a maximum MHTBID rate of 3% or a minimum rate of 1.5%.
• Mission: Marketing and sales promotions, as well as sports facility improvements/programs designed to market the area as a tourism and event destination and increase room night sales at assessed lodging businesses. • Governance: A non-profit corporation, Visit Morgan Hill, serves as the "Owners' Association" charged with the management of funds and implementation of the MHTBID Management District Plan. An annual report is required to be provided to the City Council within 120 days of the MHTBID's fiscal year (October 31).

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

7 The Owners' Association, Visit Morgan Hill (VMH), is a private entity separate from the City of Morgan Hill. The make-up of the VMH Board of Directors included up to four (4) but not less than three (3) lodging representatives, two (2) City of Morgan Hill representatives, and up to three (3) but not less than one (1) community representatives within the areas associated with wineries, sports recreation, and the community at large with interest in tourism. Currently, the Assistant City Manager of Development Services and the Assistant City Manager of Public Services serve on the VMH Board.

Annual Report
The Owners' Association is required to present an annual report at the end of each year to the City Council pursuant to Streets and Highways Code 36650 within one hundredtwenty (120) days of the MHTBID's fiscal year (October 30). The 2026 Annual Report is attached for the City Council's review and acceptance (Attachment 1). VMH's Annual Report does not propose any changes to the boundaries, benefit zones, or classification of businesses. The Annual Report lists the district's activities and accomplishments, including the implementation of a Strategic Plan, Brand Marketing, and various visitor marketing and promotion efforts.

The MHTBID is expected to collect approximately $341,000 annually. The City retains 2% of the MHTBID assessment for management and administration.

In Fiscal Year 2025-26, VMH's income for July 1, 2025 – June 30, 2026, was $371,283.

The City retained $7,231 for management and administration.

COMMUNITY ENGAGEMENT:

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

ALTERNATIVE ACTIONS:

The City is required to receive an annual report. No alternative action is recommended.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

On July 18, 2018, the City Council directed staff to proceed with the creation of a Morgan Hill Tourism Business Improvement District (MHTBID) and voted to establish the MHTBID and adopted the Management District Plan on January 23, 2019. VMH has provided annual reports to the City Council since the inception of the district with the most annual report provided on October 15, 2025.

On December 6, 2023, the City Council adopted a resolution and ordinances establishing and renewing the MHTBID with a 10-year assessment.

FISCAL AND RESOURCE IMPACT:

The preparation of the MHTBID annual report is part of the City's and Visit Morgan Hill's work plan.

7 CEQA (California Environmental Quality Act):

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

1 OCTOBER 2026
Prepared by:

City of Morgan Hill
Economic Development
Morgan Hill Tourism Business
Improvement District

ANNUAL REPORT
July 1, 2025 – June 30, 2026

2 VISIT MORGAN HILL
Tourism Business Improvement District (TBID)
FY 2025-2026: July 1, 2025 – June 30, 2026

YEAR AT A GLANCE
$354,328

TBID COLLECTIONS
+8.2% year over year
Highest annual total since FY 2019–20
+11% | +17% | +33%

OFF-SEASON REVENUE GROWTH
November | January | February
Year-over-year TBID revenue growth
63%

OVERNIGHT TRIPS

2.1% overnight leakage rate
Visitor-trip data highlights overnight visitation

2.6×–4.4×

MARKETING KPI PERFORMANCE
Media stories and social impressions
Exceeded respective annual goals

MARKETING & VISITOR ECONOMY HIGHLIGHTS
52 MEDIA STORIES
Against a goal of 20 — 2.6× the target

4.0 MILLION SOCIAL IMPRESSIONS
Against a goal of 900,000 — 4.4× the target
17,659 SOCIAL FOLLOWERS
Up 35.8% year over year across channels

42.6% OF LOCAL MERCHANT SPENDING
Attributed to visitors during FY 2025–26

WHAT THE RESULTS SHOW
TBID collections increased while targeted off-season months posted strong year-over-year gains. Visitor-trip analytics show that overnight trips represented 63% of trips, with a 2.1% overnight leakage rate. Visit Morgan Hill also exceeded its media and social reach goals, supporting greater awareness of Morgan Hill as a visitor destination.

Source: Visit Morgan Hill FY 2025–26 Annual Report, Appendix Items A and B, pp. 6–13. Visitor-trip metrics are based on the City’s Placer.ai visitor-trend data. Collections and marketing results reflect the reporting periods and KPIs described in the annual report.

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

MHTBID BACKGROUND
The MHTBID assessment was implemented beginning March 1, 2019 and continued for five (5) years through February 29, 2024. The MHTBID began a new term of 10 years, from March 1, 2024 – February 28, 2034. The assessment collects 1.5% of gross short-term room rental revenue for the purpose of marketing and promoting Morgan Hill as an overnight tourism destination.

VISIT MORGAN HILL
The Owners’ Association responsible for the MHTBID is the Visit Morgan Hill Board of Directors (known as the advisory body) and is made up of 1) three to four hotel representatives, 2) up to three community members representing the wineries, sports, and community at large; and 3) two representatives from the City of Morgan Hill representing Public Services and Economic Development. VMH was formed in March 2019.

As of June 30, 2026, the Visit Morgan Hill Board members, their representation areas, and terms were:

Representative Industry Term
Michael Meredith Hotel 2025-2027
Chris Ghione City N/A
Edith Ramirez City N/A
Gene Guglielmo Winery 2026-2028
Alexis Solis Hotel 2025-2027
Victoria San Nicolas Hotel 2026-2028
John McKay Community 2026-2028
Bina Roy Desai Hotel 2026-2028

METHOD AND BASIS OF LEVYING ASSESSMENT
The annual MHTBID assessment rate is 1.5% of gross short-term room rental revenue.

Assessments are not collected on stays of more than 30 consecutive days or stays by any

4 officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty. The City of Morgan Hill is responsible for collecting the assessment on a monthly basis (including any delinquencies, penalties and interest) from each lodging business located in the boundaries of the MHTBID. The MHTBID has a ten (10) year life, beginning March 1, 2024 through February 28, 2034. Pursuant to Streets and Highways Code 36670, once per year, beginning on the anniversary of MHTBID formation, there is a thirty (30) day period in which owners paying fifty percent (50%) or more of the assessment may protest and initiate a City Council hearing on MHTBID termination.

IMPROVEMENTS AND ACTIVITIES
See Appendix Item A
A summary of Visit Morgan Hill’s improvements and activities is provided here. Please see detailed overview in Appendix Item A (pgs. 5-9).
✓ Developed and Implemented Annual Budget and Work Plan ✓ Conducted Required Tax, Insurance, and Administrative Filings ✓ Maintained Visitor Information & Business Listings on visitmorganhill.org ✓ Maintained Online Public Event Calendar
✓ Implemented Digital Advertising, Email, and Marketing Campaigns ✓ Hosted Journalists and Influencers and Secured Media Coverage ✓ Published Organic Social Media Content, Campaigns, and Influencer Partnerships ✓ Generated Group Event Leads for Hotels, Sports Centers, and Event Venues ✓ Published and distributed the inaugural Visit Morgan Hill Destination Guide magazine ✓ Developed and implemented new Morgan Hill Meeting & Event Planning Guide ✓ Continued Tourism Brochure Distribution at Travel Centers ✓ Continued Strategic Partnerships & Advocacy for Tourism Development ✓ Board of Directors Conducted a Successful Nationwide Search for a New Executive Director

MARKET INDICATORS
See Appendix Item B
This appendix summarizes market performance, including MHTBID collection trends, hotel performance, visitor spending, and visitor activity. These insights inform the development of targeted marketing strategies and approaches.

COST OF PROVIDING IMPROVEMENTS AND ACTIVITIES
See Appendix Items C & E

5 For the fiscal year July 1, 2025 – June 30, 2026, operating expenses totaled $390,446.04.

INCOME STATEMENT
See Appendix Item C
VMH’s bank income for July 1, 2025 – June 30, 2026 was $371,283.29. This amount is made up of $354,328.38 in TBID funds and $954.91 in refunds and reimbursements and $16,000 in additional contributions.

BALANCE SHEET
See Appendix Item D

ESTIMATED AMOUNT OF SURPLUS OR DEFICIT REVENUES CARRIED OVER See Appendix Item E
The ending cash balance on June 30, 2026 was $288,134.58.

CASH SUMMARY
See Appendix Item E

TAXES WERE PREPARED WITHOUT AUDIT
Visit Morgan Hill’s 2025 Federal Return of Organization Exempt from Income Tax has been electronically filed and accepted with the Internal Revenue Service, Federal and State. No tax is payable with the filing of this return. Visit Morgan Hill’s 2025 California Exempt Organization Annual Information Return was also electronically filed. No audit conducted.

OTHER CONTRIBUTIONS
$16,000 was received in other contributions from partner organizations for the production and publication of the Visit Morgan Hill Destination Guide.

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

6 APPENDIX Item A: IMPROVEMENTS AND ACTIVITIES DETAIL
Below are the improvements and activities of Visit Morgan Hill July 1, 2025 – June 30, 2026.

Background
Visit Morgan Hill (VMH) follows the MHTBID Management District Plan and a comprehensive Strategic Plan that serve as the long-term guides for its improvements and activities. In April 2025, VMH conducted a Board meeting to reconfirm strategy, review progress, and identify new opportunities. Each year, VMH establishes a Board-approved Work Plan, based on strategic priorities and market research, and provides bi-monthly and quarterly updates to the Board on progress.

In FY 2025–26, the VMH Work Plan continued the focus on brand marketing, public relations, group business development, data, and attraction development through community partnership. By leveraging industry expertise and regional partnerships, VMH delivered impact in digital marketing metrics, media exposure, lead generation, and regional cooperative marketing.

Operations & Administration
• Managed all monthly and year-end reporting, accounting, insurance, tax filings, and operational software/tools.
• Compiled and reported key metrics and market status to stakeholders. • Developed and refined ongoing agency management (PR, social, content), and projectbased contractor responsibilities. • VMH Board of Directors engaged with JLL to conduct a successful nationwide search for a new Executive Director.

Public Relations
• Attracted and coordinated six journalist and creator visits (FAMs), hosted seven media contacts for earned media and content, resulting in coverage across print, radio, podcasts and online publications.
o Writers: Ginny Prior (Bay Area News Group), Laura Ness (Bay Area News Group), Rachel Chang (Vogue).
o Content Creator: Yadria Naranjo, SOMOs Foodies.
o Radio Host/Writers: Cori Solomon & Andy Harris (SoCal Restaurant Show, Travel, Food & Wine Magazine, Big Blend Radio).
o Business Press: Kristen Gonzalez, Silicon Valley Business Journal.

7 • Secured 52 targeted media stories through ongoing pitching, FAM hosting, state and regional Destination Marketing Organization (DMO) submissions and press releases, with 94% of stories landing in the top Media Hit List.
• Tracked 430 total stories mentioning Morgan Hill, reaching an estimated 4.6B unique visitors per month (UVPM).
• National coverage included Vogue (Super Bowl travel story), Forbes, USA Today, Yahoo, Condé Nast Traveler, AFAR, San Diego Magazine, and Islands. • Regional coverage included the SF Chronicle, Mercury News, East Bay Times, Silicon Valley Business Journal, Sonoma Magazine, 7x7, and Visit California storylines. • Supported storylines were around the MOHI Food & Wine Festival, Hotel MOHI / The MOHI by Appellation name reveal, Morgan Hill Wine Trolley anniversary, Spina Farms, Borello Farms, Guglielmo Winery's centennial, Poppy Jasper International Film Festival's 20th edition, and the Morgan Hill Mushroom Festival.
• Visit Morgan Hill representation at its first Visit California LA Media Mission (87 media, 19 international attendees, 15 influencers) and at the Bay Area Travel Writers Virtual Showcase.

Social Media
• Published 242 posts across Instagram, TikTok, and Facebook, emphasizing reels, carousels, event roundups, and collaborations with local partners such as Destination Downtown Morgan Hill and The Granary businesses.
• Surpassed the 17K follower goal with 17,659 followers across channels, +35.8% YearOver-Year (YOY). o Instagram 11,448 | TikTok 3,534 | Facebook 2,677.
• Generated 4M impressions, more than 4x the annual goal of 900K. • Drove +35K total engagements and 5.5K website sessions organically through socials. • Achieved a 12.56% average amplification rate, exceeding the 11% KPI. • Averaged a 2.96% engagement rate across channels, achieving the top of the 1–3% industry benchmark.
• Top-performing content:
o MOHI Food & Wine reel: 4.1K engagements and nearly 2K shares across Instagram and TikTok.
o Hill Family Statue history post: 3K+ TikTok engagements and 36.9K Instagram views.
o 2026 Morgan Hill Festivals roundup: 3.4K engagements across all three platforms o Granary District reel: 1.1K+ engagements.

8 Campaigns & Ad Placements
• The Game Day to Getaway Campaign ran from March–April on Meta (Instagram and Facebook), timed ahead of major sporting events and games. The campaign positioned Morgan Hill as an ideal base near San Jose and Levi’s Stadium during large-scale events like March Madness and the FIFA World Cup.
• The campaign targeted sports travelers in the Sacramento–Stockton–Modesto and San Francisco Destination Market Areas (DMAs), using FIFA and sports-event interest audiences.
• Developed two creative sets for these audiences, Slow Traveler and Sports Traveler, delivered through reels and carousel video ads.
o Slow Traveler creative drove the strongest click-through efficiency, reaching up to a 2.25% Click Through Rate (CTR).
o Sports Traveler creative drove the strongest reach, website traffic, and on-site engagement.
• Overall Metrics
o 2.57M impressions at a $7.00 Cost Per Mille (CPM)
o 34,454 link clicks at a 1.34% CTR and $0.52 Cost Per Click (CPC). o 32,649 website sessions with a 78% engagement rate and 44 key events.

Marketing Communications
• Continued to update and manage all website listings, blogs, newsletters, and event calendars.
o Maintained listings for 235 businesses/orgs.
o Published 24 original blog articles, guides, roundups, announcements. o Listed hundreds of local events on event calendar.
o Developed and/or maintained new landing pages for strategic campaigns and partnerships.
o Quarterly Consumer Newsletter.
o Webpage Views: 293,000 total – 10% increase YOY.
o Web Unique Visitors: 165,000 total – 22% increase YOY. o Web Visits: 198,000 total – 19% increase YOY.
• Enhanced media efforts by increasing services from KPS3 marketing agency for higher social media frequency, content creation coordination, and a digital marketing campaign.
• Hosted 2 influencers/content creator visits.
o Spouse Sprouts and Me - 1 reel.
o Somos Foodie MX - 1 reel.
• Smilkos Lens: 3 visits to capture specific social media assets and build out the asset inventory.

9 Business Development
• Secured one-month contract with Alignment Advising supporting sales efforts for group lead generation.
• Continued circulation and targeted distribution of the Tournament Planning Guide and Incentive program to tournament organizers through a partnership with the MHOSC and digitally on the Sports Tournament website landing page. • Continued to support the upcoming opening of Hotel MOHI through collaboration with their marketing team and via the promotion of the hotel’s conference center. • Promoted local hotels by way of:
o Places To Stay/Hotel Calls to Action throughout the website, links on all major festival event listings, core “Things To Do” landing pages, Blog, email marketing, and social media.
o The Stay in Morgan Hill dedicated Instagram account highlights each hotel and serves as a social media platform “landing page” providing additional passive effort for travelers’ digital search.
o Hampton Inn featured in Game Day to Getaway campaign. o Comfort Inn promoted in Family Friendly Things To Do social post. o Holiday Inn Express - Social media influencer visit and social media reel (Spouse Sprouts & Me).
o La Quinta Inn - Social media influencer visit and social media reel (Somos Foodie MX). o Hotel Guide Blog
o Courtyard by Marriott featured in article by Ginny Prior in Mercury News/East Bay Times.
o Multiple hotels featured in Convention Southwest Morgan Hill article. o Hotel MOHI upcoming opening mention in multiple articles and ongoing pitching (SVBJ, Visit CA).

Partnership and Product Development
• Collaborated with the City of Morgan Hill and community partners on the 2026 Games Day Promotion. Developed a campaign, landing page, Blog, Morgan Hill Times column, and kiosk video ads placed in San Francisco locations.
• Created a dedicated Event Guide for group planning, covering weddings, social events, small meetings, and team-building activities through the Alignment Advising contract. • Designed and published the first ever Visit Morgan Hill Destination Guide. o Managed magazine distribution across 30 Bay Area cities in 300 locations, including airports, hotels, car rentals, and visitor centers, and also including distribution at local hotels, businesses, and direct mail as requested. o Converted the magazine into a digital flip book format and prominently promoted on the website, social media, email marketing, and email signature.

10 • Established and implemented a system to track Visit Morgan Hill revenue by way of defining new benchmarks for non-visitor contributions to the local economy. • Regularly attended partner organization meetings with Chamber of Commerce, Downtown Association, PBID, Wineries of Santa Clara Valley, City of Morgan Hill Economic Development and Parks and Recreation Departments.

11 APPENDIX Item B: MARKET INDICATORS
MHTBID Collections
MHTBID funds received by Visit Morgan Hill from July 1, 2025 – June 30, 2026 were $354,328.38, representing an 8.2% year over year increase.

Hotel Metrics
Morgan Hill’s STR Hotel metrics show (as of July 2026) a running 12-month average occupancy of 66.9 percent, average daily rate (ADR) of $128.02, and revenue per available room (RevPAR) of $85.60.

Year over year increases in occupancy, ADR, and RevPAR resulted in an 8.2 percent revenue increase, which aligns with the year over year MHTBID revenue increase. The strategy to boost off-season revenue and improve year-round hotel averages yielded positive results. November 2025 revenue increased 11 percent and January 2026 revenue increased 17 percent YOY.

While Super Bowl demand was concentrated near Levi’s Stadium in Santa Clara and in San Francisco, February was still a solid month for Morgan Hill hotels with strong weekend occupancy and room rates resulting in a 33 percent increase in TBID revenue compared to February 2025. With the Nvidia GTC (GPU Technology Conference) and the NCAA Men’s March Madness in March, and a strong finish for the remaining months of the fiscal year, the TBID experienced an 8.2 percent FYOY increase in revenue.

12 Visitor Spending
According to the representative sample provided by Visa Insights, the percentage of spending in Morgan Hill by visitors (non-residents) in all merchant categories during fiscal year 2025/2026 was 42.6 percent.

In 2025, visitors spent 5 percent more on Dining & Restaurants, 9.5 percent more on Entertainment, and 41 percent more on retail when compared to 2024, and accounted for

42.5 percent of the total VISA spend. In fact, visitors surpassed residents as the top spenders in the retail category in 2025, more than tripling their spending YOY in this category during the month of December alone. The graph below demonstrates the growth and significance of visitors’ contributions to our local economy over the last several years. (Note: Calendar years 2001 through 2025 reflect the percent spent during each full calendar year. FY25/26 reflects the percent spent during the fiscal year since we only have 6 months’ worth of 2026 data available as of the date of this report.) Visitor Trends
The City’s Economic Development team uses Placer.ai, a location intelligence and foot traffic data software, to better understand visitor trends. Working collaboratively, the data collected through this platform helps to inform marketing strategies and approaches for both eh City’s Economic Development team and Visit Morgan Hill.

13 Conclusion
Tourism is an important component of the overall Morgan Hill economy, contributing to business revenue, sales tax, and hotel tax (TOT). Although market conditions are challenging, and the hospitality industry continues to fall short of pre-pandemic numbers, on average, Morgan Hill hotels grew in occupancy and revenue YOY. In addition, the share of visitor spending in the City has continued to grow in categories related to tourism. Morgan Hill remains well positioned to attract visitors.

14 Visit Morgan Hill
Income Statement
July 1, 2025 - June 30, 2026
Income
TBID $ 354,328.38
Refunds and Reimbursements $ 954.91
Contributions $ 16,000.00
Total Income $ 371,283.29
Operating Expenses
Salaries $ 148,823.01
Tax Services $ 780.00
Employer tax
Employee tax
Payroll service fees & wire fees $ 732.52
Insurance $ 5,895.33
Softwares, Systems (adobe, office, squarespace, etc.) $ 2,863.41 Dues and subscriptions data $ 14,660.00
Office Supplies, hardware, postage, misc $ 5,050.12
$ 178,804.39
Marketing
Agency PR & Social Media $ 107,132.48
Additional Advertising $ 20,465.42
Content & Promo Materials $ 50,673.94
$ 178,271.84
Business Development & Industry
Strategic Market Development $ 16,014.46
Hosting Fees $ 3,648.67
Sponsorship $ 12,500.00
$ 32,163.13
Industry & Community Relations
Strategic Partnership Dues & Sponsorship $ 475.00
Meetings & Conferences $ 731.68
$ 1,206.68
Total Operating Expense $ 390,446.04
Net Income/(Loss) $ (19,162.75)
Appendix Item C

15 Visit Morgan Hill
Balance Sheet
June 30th, 2026
Assets
Current Assets
Checking $ 288,134.58
Accounts Receiveable $ -
Total Current Assets $ 288,134.58
Liabilities and Equity
Liabilities $ -
Equity Balance 7.1.25 $ 307,297.33
Year Earnings $ 371,283.29
Less Op Expense $ 390,446.04
Net $ 288,134.58
Total Liabilities & Equity $ 288,134.58
Appendix Item D

16 Visit Morgan Hill
Cash Summary
Year Ending June 30th, 2026
Income
TBID $ 354,328.38
Refunds and Reimbursements $ 954.91
Contributions $ 16,000.00
Total $ 371,283.29
Less Operating Expenses
Administrative & Salary $ 164,144.39
Dues & Subscriptions $ 14,660.00
Agency PR & Social Media $ 107,132.48
Additional Ads & Promo Material $ 71,139.36
Business Development $ 32,163.13
Industry and Community Relations $ 1,206.68
Total $ 390,446.04
Summary
Opening Balance 7.1.25 $ 307,297.33
Cash Movement $ (19,162.75)
Closing Balance 6.30.26 $ 288,134.58
Appendix Item E

8 CITY COUNCIL STAFF REPORT
MEETING DATE: October 21, 2026
PREPARED BY:

Elisa Tolentino, City Attorney
APPROVED BY: City Manager

APPROVE THE MEMORANDUM OF AGREEMENT BETWEEN CITY OF

MORGAN HILL AND COUNTY OF SANTA CLARA REGARDING

ANNEXATIONS AND REGIONAL HOUSING NEEDS ALLOCATIONS
FOR 2023-2031 HOUSING ELEMENT PLANNING PERIOD

RECOMMENDATION(S)

1. Approve entering into Memorandum of Agreement Between the City of Morgan Hill and the County of Santa Clara Regarding Annexations and Regional Housing Needs Allocations for 2023-2031 Housing Element Planning Period (“MOA”);

2. Authorize the City Manager to execute the MOA; and

3. Authorize the City Manager to execute an Agreement, in substantially the same form as Exhibit A to the MOA, for each parcel that is annexed to the City and that includes contemplated housing development.

COUNCIL PRIORITIES, GOALS & STRATEGIES
City Council Ongoing Priorities
Maintaining and Enhancing Infrastructure
Strategic Priorities 2026-2027
Affordable Housing and Homelessness
Guiding Documents
Morgan Hill 2035 General Plan
Water System Master Plan
Wastewater System Master Plan
REPORT NARRATIVE:

There are 12 Builders Remedy applications for housing projects in unincorporated areas of Santa Clara County, just outside of Morgan Hill city limits. Of these, six are currently pending environmental review.

If these projects are approved by the County, annexation of the project sites is preferred. Annexation would enable these sites to be developed in a manner consistent with the City’s General Plan, including its Urban Service Area priorities. Annexation

8 would also allow for infrastructure development according to City standards. If a project site is annexed, the City would receive a portion of the property taxes paid by the owners of the homes constructed. Property tax revenue from these developments would offset the costs of City services (e.g., police, fire, parks) they would receive.

Annexation would enable the City to provide water and sewer services to these developments. The small to medium-sized private and sewer systems proposed to serve these developments could pose risks to the City’s aquifer and have a negative impact on the environment. Additionally, if these systems fail, the City may be required to provide service. For these reasons, if the County approves the projects and they are constructed, it would be preferred that they are annexed into the City, so that they can be adequately integrated into the City’s infrastructure. The provision of City services would also provide enhanced protection to the City’s groundwater supply from the water and wastewater systems that are proposed should these developments occur outside the City.

Under the proposed MOA, if a project is approved and secures annexation, the net effect would be for the County to receive Regional Housing Needs Allocations ("RHNA") credits for the units constructed. The RHNA transfer would reduce the County’s RHNA goal by an amount equal to the number of units entitled for the parcel being annexed.

The City’s RHNA goal would increase by that same amount, and the City would receive credit for the annexed units, resulting in no net reduction or gain in the City’s RHNA goals. It is not anticipated that these transfers would affect the City’s ability to meet its RHNA goals for the current housing element period.

It is important to note that annexation is subject to LAFCO approval, and neither the City nor the County can require annexation. The County is responsible for processing, evaluating, and if appropriate, approving the applications. The City has the right to provide comments throughout the entitlement process and if necessary, challenge the projects. The City is tracking all projects, has provided comment letters in response to the environmental review Notices of Preparation, and will continue to advocate on behalf of the City.

The MOA is not intended to demonstrate City support for any specific County Builders Remedy project, and the City will continue submitting public comments on the environmental impacts of the individual projects. The City’s goal in executing the MOA is to ensure that if projects do move forward adjacent to the City, those projects are constructed in the most well-planned way possible.

COMMUNITY ENGAGEMENT:

The City’s primary planning tool is the General Plan, for which community wide engagement occurred. The goal of the MOA is to ensure that development more closely aligns with the City’s approved General Plan.

Each of the Builder’s Remedy Projects will be required to conduct environmental review by the County, at which time comments will be taken on the environmental aspects of the projects.

8 ALTERNATIVE ACTIONS:

The City could decide not to enter into this MOA to transfer the County’s RHNA for parcels that are annexed. However, this may result in the County’s objection to the annexation of projects near City limits because the County needs the units to count toward its RHNA obligations.

PRIOR CITY COUNCIL AND COMMISSION ACTIONS:

None.

FISCAL AND RESOURCE IMPACT:

A transfer of RHNA would not result in any direct fiscal impact. The staff time required to execute an Agreement for each annexed parcel is not expected to be significant.

CEQA (California Environmental Quality Act):

Not a Project
The transfer(s) of RHNA will not result in a direct or indirect physical change in the environment.

City of Morgan Hill and Page 1 of 5
County of Santa Clara
RHNA Memorandum of Agreement

MEMORANDUM OF AGREEMENT

BETWEEN THE CITY OF MORGAN HILL AND THE COUNTY OF SANTA CLARA

REGARDING ANNEXATIONS AND REGIONAL HOUSING NEEDS ALLOCATIONS FOR 2023-2031 HOUSING ELEMENT PLANNING PERIOD
This Memorandum of Agreement (“Agreement”) between the City of Morgan Hill, a municipal corporation (“City”), and the County of Santa Clara, a political subdivision of the State of California (“County”), is effective as of the last date upon which it is executed by both the City and the County (“Effective Date”). City and County are both a “Party” and “Parties” to this Agreement.

RECITALS
A. WHEREAS, pursuant to Government Code sections 65580 through 65589.11 (the “Housing Element Law”), the Association of Bay Area Governments (ABAG) periodically adopts a Regional Housing Needs Allocation (RHNA) for each county and city in the greater San Francisco Bay Area, including the County and the City. Under the Housing Element Law, each city and county must periodically revise the housing element of its general plan utilizing the latest RHNA adopted by ABAG.

B. WHEREAS, on May 20, 2021, the Executive Board of ABAG approved the Final RHNA Methodology and Draft Allocations for the 2023-2031 RHNA cycle. Following the statutory appeal period, on December 16, 2021, ABAG adopted the final RHNA, and the California Department of Housing and Community Development (HCD) approved ABAG’s final RHNA on January 12, 2022. The final RHNA assigned 1,037 units to the City and 3,125 units to the County.

C. WHEREAS, pursuant to Government Code 65584.07(d)(1), upon annexation of unincorporated land to the City, after the final RHNA has been adopted, a portion of the County’s allocation of units may be transferred to the City.

D. WHEREAS, City and County desire to agree to future transfers of RHNA in connection with future annexations for the 2023-2031 RHNA cycle as set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants, promises, and agreements contained herein, the Parties hereto mutually agree as follows:

1. Transfer of RHNA Share. In connection with any annexation of unincorporated land to the City that includes any contemplated housing development, and in connection with Government Code section 65584.07(d)(1), the Parties agree that in the event that a parcel or parcels of land are annexed to the City for future housing development, the City and County will enter into an agreement to transfer RHNA as set forth on Exhibit A hereto. The RHNA

City of Morgan Hill and Page 2 of 5
County of Santa Clara
RHNA Memorandum of Agreement
transferred from County to City for any annexation will be the number of units entitled for the annexed parcel(s), at the income level proposed in the entitlements.

2. Cooperation. The City and County shall take all steps reasonably necessary to comply with Government Code section 65584.07 and such other transfer statutes, as applicable, to implement this Agreement, including but not limited to executing a completed version of Exhibit A, providing the appropriate documentation to ABAG or any other agency, as required, and delivering a copy of this Agreement to ABAG by the statutory deadline of no later than ninety (90) days after the date of annexation. The Parties agree to work together to obtain any other approval where required to effectuate this Agreement.

3. Indemnification. In lieu of and notwithstanding the pro rata risk allocation, which might otherwise be imposed between the Parties pursuant to Government Code Section 895.6, the Parties agree that all losses or liabilities incurred by Party shall not be shared pro rata but, instead, County and City agree that, pursuant to Government Code Section 895.4, each of the Parties hereto shall fully indemnify and hold each of the other Parties, their officers, board members, employees, and agents, harmless from any claim, expense, cost, damage, or liability imposed for injury (as defined in Government Code Section 810.8) occurring by reason of the negligent acts or omissions or willful misconduct of the indemnifying party, its officers, employees, or agents, under or in connection with or arising out of any work, authority, or jurisdiction delegated to such party under this Agreement. No Party, nor any officer, board member, or agent thereof shall be responsible for any damage or liability occurring by reason of the negligent acts or omissions or willful misconduct of the other Parties hereto, their officers, board members, employees, or agents, under or in connection with or arising out of any work, authority, or jurisdiction delegated to such other Parties under this Agreement.

4. Amendment. This Agreement may not be amended or modified, except in writing signed by all Parties to this Agreement. The authorized representative of the County for any amendments or modifications to the Agreement shall be the County Executive, or designee, after approval as to form and legality by County Counsel.

5. Entire Agreement. This Agreement constitutes the final, complete, and exclusive statement of the terms of the agreement between the Parties. It incorporates and supersedes all the agreements, covenants, and understandings between the Parties concerning the subject matter hereof, and all such agreements, covenants, and understandings have been merged into this Agreement. No prior or contemporaneous agreement or understanding, verbal or otherwise, of the Parties or their agents shall be valid or enforceable unless embodied in this Agreement.

6. Waiver. No delay or failure to require performance of any provision of this Agreement shall constitute a waiver of that provision as to that or any other instance. Any waiver granted by a party shall be in writing and shall apply to the specific instance expressly stated.

City of Morgan Hill and Page 3 of 5
County of Santa Clara
RHNA Memorandum of Agreement

7. Governing Law; Venue. This Agreement has been executed and delivered in, and shall be construed and enforced in accordance with, the laws of the State of California. Proper venue for legal action regarding this Agreement shall be in the County of Santa Clara.

8. Binding. This Agreement shall be binding upon the successors and assigns of the County and City.

9. Execution. Unless otherwise prohibited by law or County policy, the Parties agree that an electronic copy of a signed Agreement, or an electronically signed Agreement, has the same force and legal effect as an Agreement executed with an original ink signature. The term “electronic copy of a signed Agreement” refers to a transmission by facsimile, electronic mail, or other electronic means of a copy of an original signed Agreement in a portable document format.

The term “electronically signed Agreement” means an Agreement that is executed by applying an electronic signature using technology approved by the County. This Agreement may be executed in one or more counterparts, each of which will be considered an original, but all of which together will constitute one and the same instrument. [Remainder of Page Intentionally Left Blank]

City of Morgan Hill and Page 4 of 5
County of Santa Clara
RHNA Memorandum of Agreement
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their respective governing bodies on the dates set forth opposite their signatures.

CITY OF MORGAN HILL
By: __________________________________
Christina Turner, City Manager

COUNTY OF SANTA CLARA
By: ____________________________________
Name:

Title:

Attest:

By: __________________________________
Michelle Bigelow, City Clerk
Approved as to form and legality:

By: ____________________________________

MIRIAM SONDAG
Deputy County Counsel
Approved as to form and legality:

By: __________________________________
Elisa Tolentino, City Attorney

City of Morgan Hill and Page 5 of 5
County of Santa Clara
RHNA Memorandum of Agreement

EXHIBIT A
[See Attached]

City of Morgan Hill and Page 1 of 5
County of Santa Clara
RHNA Transfer Agreement ([_______])

EXHIBIT A

MEMORANDUM OF AGREEMENT

BETWEEN THE CITY OF MORGAN HILL AND THE COUNTY OF SANTA CLARA REGARDING REGIONAL HOUSING NEEDS ALLOCATIONS FOR 2023-2031

HOUSING ELEMENT PLANNING PERIOD
[Annexation of [_____] Parcel]
This Memorandum of Agreement (“Agreement”) between the City of Morgan Hill, a municipal corporation (“City”), and the County of Santa Clara, a political subdivision of the State of California (“County”), is effective as of the last date upon which it is executed by both the City and the County (“Effective Date”). City and County are both a “Party” and “Parties” to this Agreement.

RECITALS
A. WHEREAS, pursuant to Government Code sections 65580 through 65589.11 (the “Housing Element Law”), the Association of Bay Area Governments (ABAG) periodically adopts a Regional Housing Needs Allocation (RHNA) for each county and city in the greater San Francisco Bay Area, including the County and the City. Under the Housing Element Law, each city and county must periodically revise the housing element of its general plan utilizing the latest RHNA adopted by ABAG.

B. WHEREAS, on May 20, 2021, the Executive Board of ABAG approved the Final RHNA Methodology and Draft Allocations for the 2023-2031 RHNA cycle. Following the statutory appeal period, on December 16, 2021, ABAG adopted the final RHNA, and the California Department of Housing and Community Development (HCD) approved ABAG’s final RHNA on January 12, 2022. The final RHNA assigned 1,037 units to the City and 3,125 units to the County.

C. WHEREAS, pursuant to Government Code 65584.07(d)(1), upon annexation of unincorporated land to the City, after the final RHNA has been adopted, a portion of the County’s allocation of units may be transferred to the City.

D. WHEREAS, the City annexed the formerly unincorporated parcel known as [___________] (APN [_________]) (the “Annexation”) as evidenced by a Certificate of Completion (Recordation No. [__________]) from the Santa Clara County Local Agency Formation Commission (“LAFCO”) recorded [____________].

E. WHEREAS, City and County desire to effect a transfer in connection with the Annexation for the 2023-2031 RHNA cycle as set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants, promises, and agreements contained herein, the Parties hereto mutually agree as follows:

City of Morgan Hill and Page 2 of 5
County of Santa Clara
RHNA Transfer Agreement ([_______])

1. Transfer of RHNA Share. In connection with the Annexation and Government Code section 65584.07(d)(1), the Parties agree to transfer a RHNA share totaling [_________] units for the 2023-2031 RHNA cycle as set forth below:
a. Very Low-Income Unit Transfer. The County and City agree to transfer [______] very low-income units, resulting in an increase of [_____] very low-income units to the City and a decrease of [______] very low-income units to the County. For the purposes of this paragraph, “very low-income units” shall mean units where household income for eligibility to live in the unit does not exceed 50% of the local area median income (AMI) as established by state and federal law. b. Low-Income Unit Transfer. The County and City agree to transfer [______] lowincome units, resulting in an increase of [______] low-income units to the City and a decrease of [______] low-income units to the County. For the purposes of this paragraph, “low-income units” shall mean units where household income for eligibility to live in the unit does not exceed 80% of the local AMI as established by state and federal law.
c. Moderate-Income Unit Transfer. The County and City agree to transfer [______] moderate-income units, resulting in an increase of [______] moderate-income units to the City and a decrease of [______] moderate-income units to the County.

For the purposes of this paragraph, “moderate-income units” shall mean units where household income for eligibility to live in the unit does not exceed 120% of the local AMI as established by state and federal law.
d. Above Moderate-Income Unit Transfer. The County and City agree to transfer [______] above moderate-income units, resulting in an increase of [______] above moderate-income units to the City and a decrease of [______] above moderate-income to the County. For the purposes of this paragraph, “above moderate-income units” shall mean units where household income for eligibility to live in the unit exceeds 120% of the local AMI as established by state and federal law.
e. Summary of Transfers.

For clarity, the calculation of total number of units to be transferred has been calculated based on the highest anticipated density for each site as analyzed and streamlined for ministerial approval through the County Housing Element Environmental Impact Report. The number and level of affordability for the units to be transferred has been calculated based on the applicability and requirements of the County inclusionary housing policy and the County housing opportunity sites combining district, both of which are delineated in the County zoning ordinance.

City of Morgan Hill and Page 3 of 5
County of Santa Clara
RHNA Transfer Agreement ([_______])
RHNA Transfer Revised RHNA
City County City County City County
Very Low-Income
Units

_____

828 __ __ _____ ____
Low-Income
Units

_____

477 __ __

_____

____
Moderate-Income
Units

______

508 __ __ _____ ____
Above ModerateIncome Units
______

1,312 __ __ _____ ____
Total
______

3,125 __ __ _____ ____

2. Cooperation. The City and County shall take all steps reasonably necessary to comply with Government Code section 65584.07 and such other transfer statutes, as applicable, to implement this Agreement, including but not limited to executing this Agreement, providing the appropriate documentation to ABAG or any other agency, as required, and delivering a copy of this Agreement to ABAG by the statutory deadline of [_____________] with regards to the Annexation. The Parties agree to work together to obtain any other approval where required to effectuate this Agreement.

3. Indemnification. In lieu of and notwithstanding the pro rata risk allocation, which might otherwise be imposed between the Parties pursuant to Government Code Section 895.6, the Parties agree that all losses or liabilities incurred by Party shall not be shared pro rata but, instead, County and City agree that, pursuant to Government Code Section 895.4, each of the Parties hereto shall fully indemnify and hold each of the other Parties, their officers, board members, employees, and agents, harmless from any claim, expense, cost, damage, or liability imposed for injury (as defined in Government Code Section 810.8) occurring by reason of the negligent acts or omissions or willful misconduct of the indemnifying party, its officers, employees, or agents, under or in connection with or arising out of any work, authority, or jurisdiction delegated to such party under this Agreement. No Party, nor any officer, board member, or agent thereof shall be responsible for any damage or liability occurring by reason of the negligent acts or omissions or willful misconduct of the other Parties hereto, their officers, board members, employees, or agents, under or in connection with or arising out of any work, authority, or jurisdiction delegated to such other Parties under this Agreement.

4. Amendment. This Agreement may not be amended or modified, except in writing signed by all Parties to this Agreement. The authorized representative of the County for any amendments or modifications to the Agreement shall be the County Executive, or its designee, after approval as to form and legality by County Counsel.

City of Morgan Hill and Page 4 of 5
County of Santa Clara
RHNA Transfer Agreement ([_______])

5. Entire Agreement. This Agreement constitutes the final, complete, and exclusive statement of the terms of the agreement between the Parties. It incorporates and supersedes all the agreements, covenants, and understandings between the Parties concerning the subject matter hereof, and all such agreements, covenants, and understandings have been merged into this Agreement. No prior or contemporaneous agreement or understanding, verbal or otherwise, of the Parties or their agents shall be valid or enforceable unless embodied in this Agreement.

6. Waiver. No delay or failure to require performance of any provision of this Agreement shall constitute a waiver of that provision as to that or any other instance. Any waiver granted by a party shall be in writing and shall apply to the specific instance expressly stated.

7. Governing Law; Venue. This Agreement has been executed and delivered in, and shall be construed and enforced in accordance with, the laws of the State of California. Proper venue for legal action regarding this Agreement shall be in the County of Santa Clara.

8. Binding. This Agreement shall be binding upon the successors and assigns of the County and City.

9. Execution. Unless otherwise prohibited by law or County policy, the Parties agree that an electronic copy of a signed Agreement, or an electronically signed Agreement, has the same force and legal effect as an Agreement executed with an original ink signature. The term “electronic copy of a signed Agreement” refers to a transmission by facsimile, electronic mail, or other electronic means of a copy of an original signed Agreement in a portable document format.

The term “electronically signed Agreement” means an Agreement that is executed by applying an electronic signature using technology approved by the County. This Agreement may be executed in one or more counterparts, each of which will be considered an original, but all of which together will constitute one and the same instrument. [Remainder of Page Intentionally Left Blank]