SARCCUP Agreement — Orange City Council, July 11, 2023

AGR-7108

CONTRACT BETWEEN ORANGE COUNTY WATER DISTRICT AND
_REGARDING CONSTRUCTION OF WELLS FOR

SANTA ANA RIVER CONSERVATION AND CONJUNCTIVE USE PROGRAM (SARCCUP) WATER BANK
This CONTRACT BETWEEN ORANGE COUNTY WATER DISTRICT AND

REGARDING CONSTRUCTION OF WELLS FOR

SANTA ANA RIVER CONSERVATION AND CONJUNCTIVE USE PROGRAM WATER BANK ("Program") is entered into as of _ 2020 ( "Effective Date"), by and between the ORANGE COUNTY WATER DISTRICT, a special governmental district organized and existing pursuant to the Orange County Water District Act, Chapter 924, Stats. 1933, as amended ("Program Agency" or "OCWD") and the ("Operating Party") (the Program Agency and the Operating Party are collectively referred to herein as the "Parties").

RECITALS
A. The Program Agency has entered into an amended agreement with the Santa Ana Watershed Project Authority ("SAWPA") to receive grant funds from the Department of Water Resources ("DWR") for the Santa Ana River Conservation and Conjunctive Use Program ("SARCCUP" or "Program"), a copy of which is attached hereto as Exhibit A and incorporated herein by this reference (such agreement is hereinafter referred to as the "OCWD-SAWPA Subgrantee Agreement).

B. Pursuant to the terms of the OCWD-SAWPA Subgrantee Agreement, Program Agency may store at least 36,000 acre-feet of water ("Program Stored Water") from SARCCUP in the Orange County Groundwater Basin ("Basin") managed by Program Agency and may call upon Operating Party and other groundwater producers ("Producers") in the Basin to participate in collectively extracting up to 12,000 acre-feet per year of Program Stored Water from the Basin.

C. Extraction of Program Stored Water will be facilitated by, among other things, OCWD potentially raising the Basin Production Percentage ("BPP"), for all Producers in the Basin; however, the setting of the BPP will continue to occur on an annual basis based upon Basin conditions, and future increases of the BPP do not exclude other methods and programs that OCWD could implement to facilitate Operating Parties extracting the Program Stored Water.

D. As part of the Program and based upon the grant funds Program Agency anticipates receiving from DWR, OCWD is providing funding towards the construction (not operations and maintenance costs) of five extraction wells that will assist in producing the Program Stored Water. The wells to be constructed are listed in Exhibit B E. The Operating Party desires to participate in the Program, provide a well site, and serve as the operator of one of the five extraction wells ("Program Well") to be constructed in its service area for the purpose of, among other things, producing Program Stored Water from the Basin; and,
F. The Operating Party and the Program Agency have heretofore processed, or shall process, necessary documents to comply with the California Environmental Quality Act ("CEQA") with respect to the Program and construction of the Program Well.

EXECUTORY AGREEMENTS
NOW, THEREFORE, in consideration of the facts recited above and the covenants, conditions and promises contained herein, the Parties hereto hereby agree as follows:

SECTION 1. TERM.

The term of this Contract (hereinafter the "Contract") shall commence as of the Effective Date, and shall expire after 30 years, unless sooner terminated pursuant to the provisions of this Contract, or as a result of actions taken by SAWPA and/or DWR per Section 23 of the OCWD-SAWPA Subgrantee Agreement.

SECTION 2. OBLIGATIONS OF THE PROGRAM AGENCY.

2.1. Fulfillment of the Terms and Conditions of the OCWD-SAWPA Subgrantee Agreement. Pursuant to this Contract, the Program Agency shall fulfill the terms of the OCWD-SAWPA Subgrantee Agreement, as it may be modified from time to time, for as long as such Agreement remains in existence.

2.2. Role as Lead for Labor Compliance. The Program Agency shall act as the lead agency to comply with the applicable Labor Compliance Program requirements described in Section 18 of the DWR-SAWPA Grant Agreement (No. 4600011515). The Operating Party is responsible, at its cost, to meet OCWD's Labor Compliance Program' applicable requirements and provide all records to Program Agency where requested by OCWD or otherwise required by this Agreement.

2.3. Grant Reimbursement. The Program Agency will submit invoices and other required documents to SAWPA on a quarterly basis. All funds to be reimbursed to Operating Party are for construction activities only (Category D of Grant). The Program Agency is not responsible for the timing of grant reimbursement from SAWPA or DWR, which could take several months, and Program Agency shall not be responsible to reimburse Operating Party's costs incurred per this Agreement until such time as Program Agency is reimbursed by SAWPA and/or DWR. As mentioned in Section 4 of the OCWD- SAWPA Subgrantee Agreement, work performed after January 17, 2014 is eligible for grant reimbursement and work performed to advance the Project after January 1, 2011 is eligible to be counted towards the local funding match. 1 OCWD's LCP is attached hereto, and incorporated herein as Exhibit C. -2-
SECTION 3. OBLIGATIONS OF THE OPERATING PARTY.

3.1. Obligations of Operating Party as Condition of Receiving SARCCUP Funds. The Operating Party is required to construct and obtain permitting for one Program Well on land owned or otherwise controlled by Operating Party. Following construction and permitting, Operating Party must properly staff, operate and maintain the SARCCUP funded Program Well as part of its public water system for the duration of this Contract? Operating Party shall—by virtue of its entry into this Contract-assume all obligations that OCWD has under OCWD-SAWPA Subgrantee Agreement with regard to staffing, operating, maintaining and repairing the Program Well. Operating Party agrees that it shall be solely responsible for the proper operation, maintenance, repair and use of the Program Well per this Contract and Section 9 of the OCWD-SAWPA Subgrantee Agreement, and that Operating Party shall not take actions that cause Program Agency to violate the OCWD-SAWPA Subgrantee Agreement.

Construction. The Program Well construction plans and
specifications will incorporate all mitigation requirements arising out of processing necessary CEQA documents for the Program Well. Construction plans, specifications and any other grant required documents shall be submitted to the Program Agency in a form that can be easily transmitted to SAWPA. All contracts for Program Well construction shall be let by competitive bid procedures that assure award of the contract to the lowest responsible bidder, except as may be otherwise authorized under the enabling authority for the Operating Party and/or the California Public Contract Code, and in accordance with the SAWPA-OCWD Subgrantee Agreement. Operating Party shall be responsible for required signage at each well location and ensuring that construction of the Program Well is completed no later than September 30, 2023 (unless the period for completion is extended by SAWPA and/or DWR). The design and materials utilized for the Program Well shall be consistent with all applicable regulations. Upon completion of the Program Well, the Operating Party shall transmit a written notice of completion to the Program Agency ("Notice of Completion").

3.3. Invoicing. The Operating Party shall pay the costs of constructing the Program Well and directly related facilities. Invoices and other required documentation for Program Well construction will be submitted to the Program Agency in a format that can be easily transmitted to SAWPA for grant reimbursement. The Operating Party hereby acknowledges that the OCWD-SAWPA Subgrantee Agreement provides grant funding totaling seven million, eight hundred seventy-five thousand, seven hundred dollars ($7,875,700) to be used towards the construction of five Program Wells that may be constructed by different Operating Parties. Each Operating Party is potentially eligible to receive up to a maximum reimbursement of one million, five hundred seventy-five thousand, one hundred forty dollars ($1,575,140) in grant funding to be applied to well construction and equipping (Category D of Grant). The Operating Party shall expend an equal amount of its own funds towards well construction and equipping ("Local Match"). Operating Party shall, as a condition of receiving funds from Program 2 Periodic shut down of the Program Well by Operating Party is authorized for the reasons listed in Section 9 and Footnote 2 of the OCWD-SAWPA Subgrantee Agreement (as amended). -3-
Agency, demonstrate a minimum 50/50 cost share of grant funding. Should the Local Match be less than the available grant funding per well, funding from Program Agency to Operating Party will be reduced to equal the Local Match.

3.4. Compliance with SARCCUP Agreement. The Operating Party shall comply with all applicable grant requirements described in the DWR-SAWPA Grant Agreement or OCWD-SAWPA Subgrantee Agreement to the same extent as Program Agency would be required to comply with such requirements.

3.5. Program Well Site. The Operating Party is solely responsible for providing a site for the Program Well and for completing all CEQA and other environmental permitting work that may be required to construct and operate the Program Well.

3.6. Ownership and Operation and Maintenance. The Operating Party shall own the Program Well, and at its sole cost and expense, operate and maintain the Program Well in as good and efficient condition as upon its construction, ordinary and reasonable wear and depreciation excepted, and otherwise in accordance with industry standards (and applicable standards and requirements of DWR, in its funding capacity under the OCWD-SAWPA Subgrantee Agreement), and as required by the OCWD- SAWPA Subgrantee Agreement. The Operating Party is not responsible for reductions in the Program Well operations resulting from changed groundwater basin water levels.

3.6.1. The Operating Party shall provide for all repairs, renewals, and replacements due to normal wear and tear necessary to the efficient operation of the Program Well during the term of the Contract and shall provide personnel sufficient in numbers and qualifications to operate and maintain the Program Well.

3.6.2. The Operating Party shall promptly provide requested documentation to the Program Agency regarding operation and maintenance of the Program Well, including but not limited to any documentation required under the OCWD- SAWPA Subgrantee Agreement or otherwise requested by DWR and/or SAWPA.

3.6.3. The Operating Party may use the Program Well for all purposes related to Operating Party's normal operations so long as such use does not interfere with the Program and the Operating Party maintains sufficient excess operable production capacity as necessary to meet its Program Stored Water extraction obligations as set forth in Paragraph 3.8 below.

3.7. Reports. The Operating Party shall promptly provide any and all budgeting documents and other reports pertaining to the Program Well and its overall groundwater pumping capacity or operations as may reasonably be required by the Program Agency.

3.7.1. The Operating Party shall retain books, records, and other material concerning the Project Well, and funding thereof, in accordance with generally accepted government accounting standards for a minimum of three (3) years after final payment is made by Program Agency to Operating Party.
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3.8. Extraction of Program Stored Water. The Operating Party shall make reasonable and good faith efforts to extract Program Stored Water from the Program Well or any other existing wells operated by Operating Party when requested by Program Agency. The Operating Party shall pay for such produced Program Stored Water based on the sum of the then current Replenishment Assessment, Additional Replenishment Assessment and, if applicable, the Basin Equity Assessment. The extraction of Program Stored Water shall replace imported water the Operating Party was planning to purchase.

3.9. Expiration. The Operating Party's obligations under this Contract shall expire in 30 years unless sooner terminated per this Agreement or per Section 23 of the OCWD-SAWPA Subgrantee Agreement.

SECTION 4. INDEMNIFICATION.

4.1. Program Agency Indemnification Obligation. The Program Agency shall indemnify, defend and hold harmless the Operating Party and its respective officers, agents and employees, from any and all costs, damages, penalties or other liabilities resulting or alleged to result from the sole active negligence or willful misconduct of the Program Agency in the performance of the Program Agency's duties under this Contract.

4.2. Operating Party Indemnification Obligation. The Operating Party shall indemnify, defend and hold harmless the Program Agency and its respective officers, agents and employees, from any and all costs, damages, penalties or other liabilities to the extent resulting or alleged to result from: (a) Operating Party's negligence or willful misconduct; (b) actions/omissions of Operating Party that cause Program Agency to violate the OCWD-SAWPA Subgrantee Agreement, or which cause SAWPA to violate its grant agreement with DWR; (c) contractor claims associated with the Program Well; (d) Operating Party's failure, or alleged failure, to properly comply with CEQA or other environmental laws or regulations. The indemnification obligation described herein shall not arise where liability is caused by Program Agency's sole active negligence or willful misconduct.

The indemnification provisions set forth in this Section 4 shall survive the termination of the Contract and the OCWD-SAWPA Subgrantee Agreement and continue in full force.

SECTION 5. INSURANCE.

5.1. The Operating Party shall obtain and maintain for the duration of this Contract all of the applicable types of insurance that Program Agency is required to obtain under Section 30 of the OCWD-SAWPA Subgrantee Agreement, in amounts equal to or greater than the amounts specified in this Contract. Each policy shall name the Program Agency, DWR, and SAWPA as additional insureds. The insurance obligations of Operating Party shall include, but are not limited to:

5.1.1. Commercial General Liability. The Operating Party shall procure, pay for and keep in full force and effect and at all times during the term of -5-
this Contract, commercial general liability insurance insuring against liability for personal injury, bodily injury, death and damage to property (including the Program Well) arising from the construction, operation or maintenance of the Program Well, and Operating Party's performance of its obligations under the OCWD-SAWPA Subgrantee Agreement and this Contract. Said insurance shall include coverage in an amount equal to at least Five Million Dollars ($5,000,000), shall contain "blanket contractual liability" and "broad form property damage" endorsements, and shall name the Program Agency, DWR, and SAWPA as additional insureds.

5.1.2. Worker's Compensation Insurance. Pursuant to Section 3700 of the California Labor Code, the Operating Party shall procure, pay for and keep in full force and effect at all times during the term of the Contract workers' compensation insurance with employer's liability in the amounts required by law with respect to the construction, operation, and maintenance of the Program Well.

5.1.3. Casualty Insurance. The Operating Party shall procure, pay for and keep in full force and effect at all times during the term of this Contract, property casualty insurance (including coverage against damage to or loss of the Program Well by reason of fire, smoke, lightning, flooding, vandalism, malicious mischief and explosion) in an amount equal to the total cost of the construction of the Program Well, which policy shall provide that all • proceeds thereunder shall be payable to the Program Agency.

5.1.4 Automobile Liability Insurance. The Operating Party will provide proof of automobile liability insurance as required by the State of California Department of Motor Vehicles with coverage of at least One Million Dollars ($1,000,000).

5.2. Endorsements. Endorsements evidencing the coverage required in this Contract and showing Program Agency as additional insureds shall be furnished to the Program Agency.

5.3. Deductibles and Self-Insured Retentions. The insurance required by this Contract may contain deductibles or self-insured retentions. The Operating Party shall be solely responsible for any such deductibles and/or self-insured retentions which may be applicable to insurance coverage obtained by the Operating Party.

5.4. The Operating Party may comply with this Section 5 by providing insurance with substantially the same limits of coverage through the Calitornia Insurance Pool Authority, the Association of California Water Agencies Joint Powers Insurance Authority ("JPIA") or other like municipal self-insurance pool. -6-
SECTION 6. MISCELLANEOUS.

6.1. Termination Prior to Expiration of Contract.

6.1.1. Material Breach by Operating Party. The Program Agency may terminate this Contract in the event of Operating Party's material violation of any provision of this Contract upon written notice by Program Agency to Operating Party after the failure by Operating Party to come into compliance within a reasonable time as established by Program Agency and/or SAWPA. In the event of such termination, the Operating Party, upon demand, shall, within 60 days of notification by Program Agency, repay to Program Agency an amount equal to the amount of grant funds disbursed by Program Agency to Operating Party for the Program Well. In the event of termination, prejudgment interest, unless waived by Program Agency, shall accrue on all amounts due from the date that notice of termination is mailed to the Operating Party to the date full repayment is received by Program Agency.

6.1.2. Termination of Funding for Program Well. The Program Agency may terminate this Contract prior to disbursement of funds for the Program Well should SAWPA and/or DWR terminate the "Well Component" funded via DWR Grant Agreement No. 4600011515 and the OCWD-SAWPA Subgrantee Agreement. Upon DWR or SAWPA terminating funding, Program Agency shall not be liable to Operating Party for any damages, costs or expenses resulting from such termination.

6.1.3. Early Termination by Operating Party. The Operating Party may terminate this Contract prior to the conclusion of the 30 year term if the Program Well is never constructed through no fault of Operating Party, or if the Program Well is constructed upon obtaining written permission for early termination from Program Agency, SAWPA and DWR. Program Agency will not unreasonably withhold such permission.

6.2. Notices. Any notice, instrument, payment or document required to be given or delivered under this Contract shall be given or delivered by personal delivery, by facsimile, or by depositing the same in the United States mail depository, first class postage prepaid, and addressed as follows:

If to Program Agency:

Orange County Water District
Box 8300
Fountain Valley, CA 92728-8300
Attn: General Manager
If to Operating Party:

The Cit. Sity et Orange
Ave.
range 92866-1591
AHni Public Works Director
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Attn:
or such other address as any party may direct in writing to all of the other Parties. Service of any instrument or document shall be deemed complete upon receipt if delivered personally, or torty-eight (48) hours after deposit of such instrument or document in the United States mail depository, first class postage prepaid and addressed as set forth above.

6.3. Binding Effect. All of the terms, conditions and provisions of this Contract shall inure to the benefit of, and be binding upon, the Parties hereto.

6.4. Counterparts. This Contract may be executed by the Parties in counterparts, which counterparts shall be construed together and have the same effect as if all of the Parties had executed the same instrument.

6.5. Integration. This Contract, in conjunction with the OCWD-SAWPA Subgrantee Agreement, represents the entire understanding of the Parties as to those matters contained herein. No prior oral or written understanding shall be of any force or effect with respect to those matters covered by this Contract.

6.6. Severability. If any term, provision, covenant or condition of this Contract shall be determined invalid, void or unenforceable, then this portion shall be severed and the remainder of this Contract shall not be affected and shall have full force and effect, unless the Parties otherwise agree in writing, which agreement shall not be unreasonably withheld.

6.7. Waiver. Failure of a party to insist upon the strict performance of any of the provisions of this Contract by the other party, or the failure by a party to exercise its rights upon the default of the other party, shall not constitute a waiver of such party's right to insist and demand strict compliance by the other party with the terms of this Contract thereafter.

6.8. Interpretation and Governing Law. This Contract shall be governed by the laws of the State of California and construed as if drafted by all the Parties hereto.

The headings contained within this Contract are for convenience only and shall have no force or effect in the construction of this Contract.

6.9. Modification. This Contract may not be modified, altered or amended except in writing, signed by authorized officials of the Parties.

6.10. Successors in Interest. Subject to Paragraph 6.13 below, all of the terms, provisions, covenants and obligations contained in this Contract shall be binding upon and inure to the benefit of the respective party provided herein, and its respective successors and assigns.

6.11. No Third-Party Beneficiaries. This Contract is made and entered into for the sole protection and benefit of the Parties. No other person shall have any right of action based upon any provision of this Contract.
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6.12. Further Assurances. Each party, upon the request of the other, agrees to perform such further acts and to execute and deliver such other documents as are reasonably necessary to carry out the provisions of the Contract, including applicable provisions of the OCWD-SAWPA Subgrantee Agreement which are incorporated herein by reference.

6.13. Assignment. • Absent prior written authorization from Program Agency, and if necessary, SAWPA and DWR, no party shall transfer the Contract, in whole or in part, or any of its interests hereunder, to any other person or entity. Any attempt to transfer or assign this Contract, or any privilege hereunder, without such prior written consent, shall be void and confer no right on any person or entity that is not a party to this Contract and shall constitute a material breach of the Contract by the Party seeking to assign without the consent of the other Party. Nothing contained herein shall prevent the Parties from subcontracting for the performance of obligations hereunder, provided, however, no such subcontracting shall relieve the Parties from the performance of obligations required herein.

6.14. Authority to Execute. Each of the persons executing this Contract on behalf of the respective Parties warrants and represents that he or she has the authority to execute this Contract on behalf of that party and warrants and represents that he or she has the authority to bind that respective party to the performance of its obligations hereunder.
[SIGNATURE PAGE FOLLOWS:]
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IN WITNESS WHEREOF, the Parties hereto have caused this Contract to be duly executed by their authorized officers as of the date first written above.

ATTEST: ORANGE COUNTY WATER DISTRICT
By - By
Secretary General Manager

APPROVED AS TO FORM
Rutan & Tucker, LLP
General Counsel
ATTEST: THE CITY OF ORANGE
By By RUL
Secretary City Manage
APPROVED AS TO FORM:

Sr. Asst. City Attorney Mayho nung
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Exhibit A - OCWD-SAWPA Subgrantee Agreement
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PROPOSITION 84 INTEGRATED REGIONAL WATER MANAGEMENT 2015 ROUND

IMPLEMENTATION GRANT FUNDING CONTRACT

BETWEEN THE

SANTA ANA WATERSHED PROJECT AUTHORITY
AND

ORANGE COUNTY WATER DISTRICT
This Proposition 84 Integrated Regional Water Management Program ("IRWMP") Implementation Grant Funding Contract ("Contract") is made between Santa Ana Watershed Project Authority ("SAWPA") and Orange County Water District, (the "Sub-Grantee"). SAWPA and the Sub-Grantee may be individually referred to as "Party" and collectively referred to as the "Parties".

WHEREAS, Section 79560 et seq. of the Water Code establishes the IRWMP providing approximately $900 million for local assistance grants to be allocated to projects to protect from drought, improve water quality and improve water security by reducing dependence on imported water; and SAWPA entered into a Proposition 84 IRWMP Implementation Grant Agreement No. 4600011515 ("Grant Agreement'") as subsequently amended, attached hereto as Attachment "A", providing that SAWPA would serve as the program manager for the $64,267,686 in grant funds to be disbursed to the Sub-Grantee and other agencies, consistent with IRWMP and California Environmental Quality Act ("CEQA"') requirements, and ensuring that the maximum benefit of such funds are realized in the Santa Ana River Watershed; and
WHEREAS, consistent with the Grant Agreement, SAWPA intends to disburse to the Sub-Grantee a portion of the $64,267,686 in grant funds for the Santa Ana River Conservation and Conjunctive Use Program ("SARCCUP) Project ("Project") by way of this Contract with the Sub-Grantee. Other agencies implementing the Project are San Bernardino Valley Water District, Eastern Municipal Water District, Orange County Coastkeeper, Inland Empire Utilities Agency, and Western Municipal Water District ("other SARCCUP Sub-Grantees");
WHEREAS, on February 1, 2019, the DWR and SAWPA executed Amendment No. 1 to the Grant Agreement which added the Coastal Plain of Orange County Groundwater Basin as a location for storing water as part of the Project;
THEREFORE, based on the foregoing incorporated recitals and in consideration of the mutual covenants and conditions set forth in this Contract, the Parties hereby agree to the following:

SECTION 1. PROJECT DESCRIPTION
The Project is a multi-agency, watershed-wide program developing dry-year yield ("DYY") supply by banking wet-year water that also integrates water conservation measures, habitat enhancements, and recreational use. Through the DYY program, the Project will develop an approximately 180,000 acre- foot ("AF") SARCCUP Conjunctive Use Program ("Program"') providing for management and facilities to have the capacity to store and convey through such methods as direct pumping or in lieu transfers approximately 180,000 AF to different water agencies in the Santa Ana River Watershed over a ten year period. Additionally, increased supply for the Santa Ana River Watershed will be made available due to water conservation associated with removing approximately 640 acres of the invasive and heavy water-using plant Arundo Donax and implementing conservation-based water rates by up to five retail water agencies. To allow the implementation of SARCCUP's Conjunctive Use Program and other water supply projects, approximately 40.5 acres of in-stream riparian habitat will be restored and approximately

3.5 miles of stream habitat will both be created for the benefit of the Santa Ana sucker fish in the Santa Ana River Watershed. One mile of educational hiking trail and approximately 40 acres (gross) in the form of recharge basins, will be created in the Santa Ana River Watershed. A drought tolerant landscaping maintenance outreach program called Smartscape operated by Orange County Coastkeeper/Inland WaterKeeper will also be implemented as needed throughout the Santa Ana River Watershed to support effective water use efficiency.

SECTION 2. SUB-GRANTEE DELIVERABLES
The Sub-Grantee, along with other SARCCUP Sub-Grantees, will finalize a decision support model and take into consideration the Santa Ana River Watershed's hydrology, planned and existing facilities, and groundwater put-and-take scenarios in order to better define agreements and needs for possible future expansion.

The Sub-Grantee, per the Grant agreement, will implement the Program by storing at least 36,000 AF, or 180,000 AF collectively with other Project Sub-Grantees, of wet-year water over each ten-year period' and through such actions such as direct pumping or in lieu transfers in dry years convey that amount, over the ten year period, to its own customers and other Santa Ana River Watershed water agencies.

The Sub-Grantee will implement the SARCCUP Arundo Component ("'Arundo Component") by eradicating approximately 640 acres of the invasive and heavy water-using plant Arundo Donax just upstream of Prado Dam in Riverside County by utilizing heavy machinery in the floodplain, herbicide and maintenance sweeps by working with its partners.. The Sub-Grantee will also complete a study of the effectiveness of removal of Arundo Dondax in terms of an overall goal of eradicating Arundo Donax from the Santa Ana River Watershed ("Study Component") without seeking reimbursement through this Contract. The Study Component shall be complete before the Sub-Grantee requests grant reimbursement through this Contract.

In order to implement the Program, the Sub-Grantee, along with other SARCCUP Sub-Grantees will execute joint agency agreements) ("Agreements'") that establish the 180,000 AF groundwater bank that the Program will operate.

In order to monitor deliverables, the Sub-Grantee, along with the other SARCCUP Sub-Grantees will implement the Project Monitoring Plan as described in Paragraph 21 of the Grant Agreement. The Project Monitoring Plan must be approved by SAWPA and DWR before the Sub-Grantee implements any sampling or monitoring activities. The Sub-Grantee will report on the benefits of the Project based on the Project Monitoring Plan using a final Project Completion Report and Post Performance Reports The Sub-Grantee will provide all other deliverables described in the Grant Agreement such as the deliverables listed in Paragraph 15 of the Grant Agreement.

SECTION 3. CONTRACT DOCUMENTS: ORDER OF PRECEDENCE: SUB-GRANTEE

GENERAL COMMITMENT
This Contract incorporates and includes as part of its terms and conditions the Grant Agreement.. • Performance subject to California Civil Code 1511(2).

Santa Ana Watershed Project Authority Page 2 of 13
In the event of any inconsistency between this Contract and the Grant Agreement, except as otherwise specifically provided, the inconsistency shall be resolved by giving precedence to the Grant Agreement.

The Sub-Grantee shall comply with all terms, provisions, conditions, and commitments of this Contract and the Grant Agreement. Such compliance shall include providing SAWPA with all deliverables, budget detail, reports and all other documents required by the Grant Agreement.

On behalf of and for the benefit of SAWPA, Sub-Grantee shall comply with all of the obligations and requirements of the Urant Agreement as it the Sub-Grantee were the "Grantee" under the terms of the Frant Agreement. Such compliance shall be to the fullest extent necessary and as may be required by SAWPA in order to enable SAWPA to comply with the Grant Agreement as "Grantee." SECTION 4. SUB-GRANTEE'S ESTIMATED ELIGIBLE PROJECT COSTS: GRANT AMOUNT: LOCAL FUNDING MATCH
The Sub-Grantee's estimated reasonable cost of the Project at the time of SAWPA's and DWR's approval of the Project is Four Million Four Hundred Twenty Five Thousand Eight Hundred Fifty Eight dollars ($4,425,858). Subject to all of the terms, provisions, and conditions of this Contract, including appropriate invoicing and reporting, and subject to the availability of the grant funds, SAWPA shall reimburse Projects costs from grant funds in a sum not to exceed One Million Four Hundred Seventy Two Thousand Fifty Seven dollars ($1,472,057). Work performed after January 17, 2014, is eligible for grant reimbursement. Per Exhibit D of the Grant Agreement, the DWR shall withhold retention.

SAWPA's actual grant disbursements to the Sub-Grantee under this Contract shall not exceed payments received from the DWR. If actual Project costs exceed the Project's estimated reasonable cost, SAWPA shall have no obligation to provide grant funds for such exceedance.

Work performed to advance the Project after January 1, 2011 is eligible to be counted as the Sub- Grantee's local funding match used to complete the Project.

If the Sub-Grantee proceeds to implement the Project, the final grant amount will be determined in accordance with the provisions of this Contract. If the Sub-Grantee fails or refuses to proceed with or complete construction of the Project, SAWPA shall consider such failure or refusal to be a material violation and breach of this Contract. SAWPA shall have all rights and remedies as are otherwise available to it for breach of this Contract by the Sub-Grantee.

Eligible Project costs include the reasonable costs of studies, engineering, design, land and easement acquisition, legal fees, preparation of environmental documentation, environmental mitigations, monitoring, and Project construction. Costs that are not eligible for reimbursement or eligible to be counted as the Sub-Grantee's local funding match are described in Paragraph ten (10) of the Grant Agreement.

Reasonable administrative expenses may be included as eligible project costs and will depend on the complexity of the project preparation, planning, coordination, construction, acquisitions, implementation, and maintenance. Reasonable administrative expenses are the necessary costs incidentally but directly related to the Project including the portion of overhead and administrative expenses that are directly related to the Project.

SECTION 5. SCOPE OF WORK; TASKS
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The Scope of Work is described in the Grant Agreement Work Plan. The Sub-Grantee is entirely responsible for the following:
• Task 8.3.1 - Arundo Donax Removal Design
• Task 12.3.1 - Arundo Donax Removal
The Sub-Grantee is responsible collectively with the other SARCCUP Sub-Grantees for the completion of the following tasks, which are cooperatively managed among the SARCCUP Sub-Grantees:

Task 1 - Project Management
• Task 2 - Labor Compliance Program
Task 3 - Reporting
Task 5 - Feasibility Studies.

Task 6 - SARCCUP CEQA Documentation.

Task 7 - Permitting.

Task 10 - Construction Contracting.

Task 11 - Construction Administration.

The Sub-Grantee understands that time is of the essence, and agree to expeditiously proceed with and complete the Project.

SECTION 6. DISBURSEMENT
Grant funds will be disbursed in accordance with the disbursement provisions of the Grant Agreement.

SAWPA will disburse grant funds received from DWR to Sub-Grantee within 30 days of receipt of grant funds, except as described in Section 15, Withholding of Grant Disbursements. Retention is stipulated in Exhibit D of the Grant Agreement.

SECTION 7. FISCAL MANAGEMENT SYSTEMS AND ACCOUNTING

STANDARDS
The Sub-Grantee agrees that, at a minimum, its fiscal control and accounting procedures shall be ifficient to permit tracking of grant funds to a level of expenditure adequate to establish that such func ave not been used in violation of State law or this Contract. The Sub-Grantee shall maintain separa project accounts in accordance with generally accepted government accounting standards and the conditions outlined in Exhibit D of the Grant Agreement.

SECTION 8. TERM
This Contract shall not be effective until it has been executed by SAWPA. The Term of this Contract shall be the same as the Term of the Grant Agreement as amended, unless sooner terminated pursuant to the provisions of this Contract or the Grant Agreement.

SECTION 9. COVENANT TO OPERATE AND MAINTAIN PROGRAM AND

COMPONENT
The Sub-Grantee shall properly staff, operate and maintain all portions of the Arundo Component and the Program during the Arundo Component's and Program's useful life (per section 20 of the Grant Agreement) Santa Ana Watershed Project Authority Page 4 of 13
and in accordance with this Contract, the Grant Agreement, and all applicable state and federal laws, rules and regulations, provided Sub-Grantee shall not be required to use its own funds to reconstruct or replace the Arundo Component if sites are destroyed or damaged beyond repair resulting from acts of God, wars, or sabotage. In the event that the Sub-Grantee assigns or transfers all or any portions of the Arundo Component and the Program to another entity, the Sub-Grantee shall be responsible to ensure that the assignee or transferee of all or any portions of the Arundo Component and the Program shall properly staff, operate and maintain all portions of the Arundo Component and the Program during its useful life and in compliance with this Contract, the Grant Agreement, and all applicable state and federal laws, rules and regulations. The Parties to this Contract understand and agree that this covenant shall survive the expiration or termination of this Contract not to exceed the useful life of the Arundo Component and the Program. The Parties understand and agree that this covenant is for the benefit of SAWPA and DWR and shall be enforceable during the useful life of the Arundo Component and the Program. The Parties agree that the useful life of the Arundo Component is 5 (five) years from and after Arundo Component completion. The Parties agree that the useful life of the Program is 30 (thirty) years from and after Project completion, and that the Sub- Grantee's obligations with regard to the Program in this Section are understood to be obligations to work collectively with the other SARCCUP Sub-Grantees. Through the Program's useful life, the Sub-Grantee Shall continue to store at least 36,000 AF or 180,000 AF collectively with other SARCCUP Sub-Grantees, of wet-year water per ten-year period, and through such actions such as direct pumping or in lieu transfers in dry years convey that amount, in each ten-year period, to its own customers and to other Santa Ana River Watershed water agencies.

The Sub-Grantee shall not abandon, substantially discontinue use of, lease, or dispose of the Arundo Component and the Program, including its construction, implementation, or any significant part or portion thereof, during the useful life of the Arundo Component and the Program without SAWPA's and DWR's prior written approval.

SECTION 10. ASSIGNMENT
Neither this Contract, nor any duties or obligations under this Contract, nor any of the Arundo Component and Program referenced in this Contract shall be assigned by any Party without the prior written consent of the other Party.

Should an assignment or transfer occur, whenever SAWPA or the Sub-Grantee are named or referred to herein, such reference shall be deemed to include the successor to the powers, duties and functions that are presently vested in SAWPA and the Sub-Grantee, and all Contract and covenants required hereby to be performed by or on behalf of SAWPA and/or the Sub-Grantee shall bind and inure to the benefit of the respective successors thereof whether so expressed or not.

SECTION 11. COMPLIANCE WITH LAWS AND REGULATIONS
The Sub-Grantee agrees that it shall, at all times, comply with and require its contractors and subcontractors to comply with all applicable federal and state laws, rules, regulations and guidelines. The Sub-Grantee shall comply with, implement, and fulfill all environmental mitigation measures applicable to the Project, and which may otherwise be required by this Contract, the Grant Agreement, CEOA, and the State CEQA Guidelines.

SECTION 12. ACKNOWLEDGEMENT OF CREDIT/SIGNAGE REQUIREMENTS The Sub-Grantee shall include appropriate acknowledgement of credit to the State, SAWPA and to all cost-sharing parners for their support when promoting the Project or using any data and/or information developed under this Contract and/or the Grant Agreement.

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During construction of the Arundo Component, the Sub-Grantee shall install a weather-proof sign at the location of the Arundo Component in compliance with Exhibit D of the Grant Agreement. In addition to the sign requirements required under Exhibit D, the sign shall include the One Water One Watershed logo and the SAWPA logo (all available from SAWPA).

Before it is constructed, the Sub-Grantee shall provide the draft design layout of the sign to SAWPA for approval. Sub-Grantee shall notify SAWPA that the sign has been erected by providing them with a site map with the sign location noted and a photograph of the sign.

SECTION 13. CONSTRUCTION ACTIVITIES AND NOTIFICATION
The Sub-Grantee shall immediately notify SAWPA in writing of:
(1) Any substantia. change in the scope, budget, or work performed by the Sub-Grantee in implementation of the Project. The Sub-Grantee agrees that no substantial change in the scope of the Project may be undertaken until written notice of the proposed change has been provided to SAWPA, and SAWPA and DWR have given written approval for such a change; (2) Any public or media event publicizing the accomplishments and/or results of this Grant Agreement and provide the opportunity for attendance and participation. Sub-Grantee must notify SAWPA at least twenty (20) calendar days prior to the event. (3) Unscheduled cessation of all major construction work on the Arundo Component where such cessation of work is expected to or does continue for a period of thirty (30) calendar days or more;
(4) Any circumstance, combination of circumstances, or condition which is expected to delay Project completion for a period of ninety (90) calendar days or more beyond the initial estimated date of completion of the Project previously provided to SAWPA; (5) Completion of construction of the Arundo Component and provide SAWPA and DWR the opportunity to participate in the inspection. Sub-Grantee must notify SAWPA at least twenty (20) calendar days prior to final inspection.

SECTION 14. PAYMENT OF PROJECT COSTS
The Sub-Grantee shall provide for and make payment for all Project costs. All costs and payments for the Project shall be paid by the Sub-Grantee promptly and in compliance with all applicable laws. All grant disbursements will be reimbursements.

SECTION 15. WITHHOLDING OF GRANT DISBURSEMENTS
SAWPA may withhold all or any portion of the grant funds provided for by this Contract in the event (1) The Sub-Grantee has violated, or threatens to violate, any term, provision, condition, or commitment of this Contract;
(2) The Sub-Grantee fails to maintain reasonable progress toward completion of the Project; Santa Ana Watershed Project Authority Page 6 of 13
(3) The State directs SAWPA to withhold any such grant funds.

SECTION 16. INVOICING
(A) Invoices shall be completed on a State-provided invoice form and shall meet the following format requirements:
(1) Invoices must contain the date of the invoice, the time period covered by the invoice, and the total amount due.
(2) Invoices must be itemized. The amount claimed for salaries/wages/consultant fees must include a calculation formula (i.e. hours or days worked times the hourly or daily rate = the total amount claimed). Refer to Attachment "C" of this Contract. (3) Each invoice shall clearly delineate those costs claimed for reimbursement from the State's grant amount ("Grant Amount") and those costs that represent the local funding match as applicable. State funding cannot be used for local funding match. In each invoice, sufficient evidence (i.e. receipts, copies of checks, timesheets) must be provided for all costs reflective of the Grant Amount and local funding match. (B) Invoices also shall include the following information:
(1) Costs incurred for work performed in implementing the Project during the period identified in the particular invoice.
(2) Costs incurred for any interests in real property (land or easements) that have been necessarily acquired for a project during the period identified in the particular invoice for the construction, operation, or maintenance of a project. (3) Appropriate receipts and documentation that show the total outlays for the Grant Amount and local cost share.

SECTION 17. QUARTERLY PROGRESS REPORTS
Quarterly Progress Reports shall be completed using the templates provided as shown in Attachment "B" of this Contract. Quarterly Progress Reports shall provide a brief description of the work performed, activities, milestones achieved, any accomplishments as well as any problems encountered in the performance of the work. Each Quarterly Progress Report shall be delivered to SAWPA within sixty (60) calendar days after the close of the reporting period. Quarterly Progress Reports are required until the Project Closeout SECTION 18. RECORDS AND REPORTS
(A) Without limitation on the requirement that project accounts be maintained in accordance with • generally accepted government accounting standards, the Sub-Grantee shall comply with the records and reporting requirements imposed by the Grant Agreement, and shall also:
(1) Establish an official Project file that documents all significant actions relative to the Project;
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(2) Establish separate accounts that adequately and accurately itemize and describe all amounts received and expended on the Project, including but not limited to all grant funds received under this Contract;
(3) Establish separate accounts that adequately and accurately itemize and describe all income received which is attributable to the Project, specifically including any income attributable to grant funds disbursed under this Contract; (4) Establish an accounting system that adequately and accurately itemizes and describes final total costs of the Project, including both direct and indirect costs; (5) Establish such accounts and maintain such records as may be necessary for the State, DWR and SAWPA to fulfill federal reporting requirements, including any and all reporting requirements under federal tax statutes or regulations; and (6) If Force Account is used by the Sub-Grantee for any phase of the Project, establish an account that adequately and accurately itemizes and describes all employee hours, and associated tasks charged to the Project per employee.
(B) The Sub-Grantee shall require all Project contractors and subcontractors to maintain books, records, and other material relative to the Project in accordance with generally accepted accounting standards, and to require that such contractors and subcontractors retain such books, records, and other material for a minimum of three (3) years after final payment under the Grant Agreement. The Sub-Grantee shall require that such books, records, and other material shall be subject, at all reasonable times, to inspection, copying, and audit by SAWPA, DWR or its authorized representatives.
(C) The Sub-Grantee shall maintain its books, records and other material concerning the Project in accordance with generally accepted government accounting standards and as required by the Grant Agreement.
(D) All documents required or requested to be provided to SAWPA shall be submitted electronically in both the native format (e.g. Microsoft Word, Microsoft Excel, etc.) and PDF. All documents shall be public domain or the property of SAWPA once submitted.
(E) The Sub-Grantee agrees to expeditiously provide, during work on the Project and for three (3) years after final payment under the Grant Agreement, such repors, data, information and certifications as may be reasonably required by SAWPA or DWR. Such documents and information shall be provided in electronic format.

SECTION 19. PROJECT REVIEW AND EVALUATION; FINAL REPORTS AND AUDIT (A) SAWPA may perform a Project review or otherwise evaluate the Project to determine compliance with the contract documents at any time or if questions about the proper use or management of the funds arise. SAWPA may review or evaluate the contractor or vendor for compliance with the terms and conditions of the contract document. The Project review and evaluation may be pertormed by SAWPA or may be contracted to a responsible third party. Any findings and recommendations of the Project review and evaluation shall be addressed by the Sub-Grantee within sixty (60) calendar days of the date such findings and recommendations are provided to the Sub-Grantee and before the next invoice is paid by SAWPA.

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(B) At least fifteen (15) calendar days prior to submission of the final Project invoice, Sub-Grantee shall provide SAWPA the Disposition of Equipment per Exhibit D of the Grant Agreement. (C) In addition to the documents and deliverables required to be provided by the Grant Agreement, within seventy five (75) calendar days after completion of the Project the Sub-Grantee shall provide to SAWPA, a final Project Completion Report. The final Project Completion Report shall include, at a minimum, the information required in Exhibit G of the Grant Agreement.

The final Project Completion Report shall be accompanied by such other financial information as may be required by SAWPA or DWR to verify Sub-Grantee entitlement to grant funds, to assure program integrity, and to comply with any federal or state requirements. A duly authorized representative of the Sub-Grantee shall certify the Project Completion Report as correct. (D) SAWPA may call for an audit of financial information relative to the Project, where SAWPA determines that an audit is desirable to assure program integrity or where such an audit becomes necessary because of federal or state requirements. Where such an audit is called for, the audit shall be performed by a Certified Public Accountant independent of the Sub-Grantee and at the cost of the Sub-Grantee. The audit shall be in the form required by SAWPA.

SECTION 20. PROJECT CLOSEOUT DOCUMENTATION
To ensure that the Project is closed out in a manner that provides an auditable file for SAWPA, Sub-Grantee shall follow a close-out procedure that includes payment of all subcontracts, completion of all punch lists, defects correction, satisfaction of warranty or guarantee issues, and any other requirements for the completion of the scope of work. Such close-out procedures shall include those procedures contained in the Grant Agreement or otherwise required by SAWPA and DWR.

SECTION 21. POST-PERFORMANCE REPORTS
Post-Performance Reports as described in Exhibit G of the Grant Agreement shall be submitted to SAWPA by the Sub-Grantee within seventy (70) calendar days after the first operational year of the Project has elapsed. This record keeping and reporting process shall be repeated annually for a total of three (3) years after the completed Project begins operation. The format of the Post Performance Report is outlined in both the Post-Performance Report Section 19(f) and in Exhibit G of the Grant Agreement.

The Parties understand and agree that this covenant shall survive the expiration or termination of this Contract while not to exceed the Post-Performance Reporting period.

SECTION 22. MONITORING REQUIREMENTS
(A) All groundwater projects and projects that include groundwater monitoring requirements are consistent with the Groundwater Quality Monitoring Act of 2001. (B) Projects that affect water quality shall include a monitoring component that allows the integration of data into statewide monitoring efforts, including where applicable, the Surface Water Ambient Monitoring Program administered by the State Water Resources Control Board (C) Groundwater quality and ambient surface water quality monitoring data that include chemical, physical, or biological data shall be submitted to SAWPA with a narrative description of data submittal activities (included in project reports) as described below:

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(1) Surface water quality monitoring data shall be prepared by the Sub-Grantee for submission to the California Environmental Data Exchange Network (CEDEN). CEDEN data templates are available on the CEDEN website (http://www.ceden.org). Inclusion of additional data elements described on the data templates is desirable. Data ready for submission should be uploaded to the CEDEN Regional Data Center via the CEDEN website and a copy shall be given to SAWPA.
(2) If the Project's Work Plan in the Grant Agreement contains a groundwater ambient monitoring element, groundwater quality monitoring data shall be submitted by the Sub Grantee to the State for inclusion in the State Water Resources Control Board' Groundwater Ambient Monitoring and Assessment (GAMA) Program. Information on the GAMA Program can be obtained at
http://www.waterboards.ca.gov/water_issues/programs/gama. If further information is required, the Sub-Grantee can contact the State Water Resources Control Board GAMA Program. A copy of all data submitted shall be given to SAWPA. (D) If groundwater level data is collected, the Sub-Grantee shall submit to DWR groundwater level data using the California Statewide Groundwater Elevation Monitoring (CASGEM) online data submission system. Grantee should use their official CASGEM Monitoring Entity or Cooperating Agency status to gain access to the online submittal tool and submit data. If the data is from wells that are not part of the monitoring network, the water level measurements should be classified as voluntary measurements in the CASGEM system. If the grantee is not a Monitoring Entity or Cooperating Agency, please contact your DWR grant project manager for further assistance with data submittal. The activity of data submittal should be documented in appropriate progress or final project reports, as described in Exhibit G of the Grant Agreement. Information regarding the CASGEM program can be found at https://www.water.ca.gov/Programs/Groundwater- Management/Groundwater-Elevation-Monitoring--CASGEM.

SECTION 23. TERMINATION; IMMEDIATE REPAYMENT; INTEREST
(A) SAWPA may terminate this Contract at any time prior to completion of the Project for Sub- Grantee's violation of any provision of this Contract upon written notice by SAWPA if the violation and failure of Sub-Grantee to come into compliance within a reasonable time as established by SAWPA.
(B) In the event of such terinination, the Sub-Grantee agrees, upon demand, to immediately repay to SAWPA an amount equal to the amount of grant funds disbursed to the Sub-Grantee prior to such termination. In the event of termination, prejudgment interest shall accrue on all amounts due from the date that notice of termination is mailed to the Sub-Grantee to the date of full repayment by the Sub-Grantee.
(C) SAWPA may terminate this Contract should DWR terminate SAWPA as program manager, or terminate funding for this Contract or the Project or should DWR terminate its standard agreement with SAWPA on this Project. Upon such DWR-caused termination, SAWPA shall not be liable to Sub-Grantee for any damages, costs or expenses resulting from such termination.

SECTION 24. DAMAGES FOR BREACH AFFECTING TAX EXEMPT STATUS In the event that any breach of any of the provisions of this Contract or other action by the Sub-Grantee shall result in the loss of tax exempt status for any bonds, or if such breach shall result in an obligation on the part of the SAWPA to reimburse the federal government by reason of any arbitrage profits, the Sub- Santa Ana Watershed Project Authority Page 10 of 13
Grantee shall immediately reimburse SAWPA and/or DWR in an amount equal to any damages paid by or loss incurred by the State due to such breach.

SECTION 25. ARBITRATION
Any dispute which may arise under this Contract by and between the SAWPA and the Sub-Grantee, including the Sub-Grantee's subcontractors, laborers, and suppliers, shall be submitted to binding arbitration. The arbitrator shall decide each and every dispute in accordance with the laws of the State of California, and all other applicable laws. Unless the Parties stipulate in writing to the contrary, prior to the appointment of the arbitrator, all disputes shall first be submitted to non-binding mediation.

SECTION 26. COSTS AND ATTORNEY FEES
In the event of arbitration or litigation between the parties hereto arising from this Contract, it is agreed that the prevailing party shall be entitled to recover reasonable costs and attorney fees.

SECTION 27. WAIVER
Any waiver of any rights or obligations under this Contract or the Grant Agreement shall be in writing and signed by the Party making such waiver, and approved by SAWPA and the DWR.

SECTION 28. AMENDMENT
This Contract may be amended at any time by mutual written agreement of the Parties.

SECTION 29. SAWPA REVIEWS; SUB-GRANTEE AS INDEPENDENT CONTRACTOR (A) The Parties agree that review or approval of the Project or Project plans and specifications by SAWPA is for administrative and eligibility purposes only and does not relieve the Sub-Grantee of its responsibility to properly plan, design, construct, operate, and maintain the Project. As between SAWPA and the Sub-Grantee, the Sub-Grantee agrees that it has sole responsibility for proper planning, design, construction, operation, and maintenance of the Project. (B) The Sub-Grantee is an independent contractor exclusively responsible for the design, construction, operation and maintenance of the specific project funded by this Contract and that the Sub-Grantee is not acting as SAWPA's agent, nor is SAWPA acting as an agent of the Sub- Grantee.

SECTION 30. INDEMNIFICATION
Sub-Grantee shall defend, indemnify and hold harmless SAWPA, DWR, and their Santa Ana Watershed Project Authority Page 11 of 13
subject matter of this Contract or the Project. No indemnification is required under this Section for claims, losses or damages arising out of the sole and exclusive misconduct or negligence under this Contract by SAWPA. Sub Grantee shall require its contractors or subcontractors to name the SAWPA, DWR, and their officers, agents and employees as additional insureds on their liability insurance for activities undertaken pursuant to this Agreement. (B) The Sub-Grantee understands and agrees that it has complied and will comply with CEQA and the State CEQA Guidelines for the project which is the subject matter of this Contract. Sub- Grantee understands and agrees that it is ultimately and solely responsible, as the lead agency, for compliance with CEQA and any mitigation measures required for the Project. The Sub-Grantee hereby agrees to indemnify, defend and hold harmless SAWPA and the DWR from any and all claims or actions related to this Project that may be made by any third party or public agency alleging, among other things, violations of CEQA or the State CEQA Guidelines. (C) In addition to complying with the insurance requirements contained in the Grant Agreement, including Exhibit D of the Grant Agreement, the Sub-Grantee shall ensure that adequate insurance coverage is provided by Sub-Grantee and/or its contractors and subcontractors on the Project funded, in part, by this Contract. Such insurance shall include adequate coverage for comprehensive commercial general liability, business auto liability, workers compensation liability, professional and errors and omissions liability, property insurance, including all builders risk insurance. Such insurance coverage shall, at a minimum, insure against injuries to third parties, damage to property owned by third parties, physical damage to the Arundo Component and all related facilities, theft of building materials and supplies intended for the Arundo Component, delays in Arundo Component completion, delays in Arundo Component completion due to strikes and governmental actions, liquidated damages, employee injuries and work-related illnesses, design errors resulting in increased project costs, environmental damage caused by construction activities related to the Arundo Component, and nonperformance by the contractors and subcontractors. Such insurance coverages shall be provided by admitted insurance companies authorized to do business in the State of California, and with a minimum "Best's Insurance Guide" rating of"A:VII". The Parties understand that Sub-Grantee is self-insured and has established a self-funded reserve for this purpose which will satisfy the requirements of this Subparagraph 29(C).

SECTION 31. PROJECT AND INFORMATION ACCESS
The Sub-Grantee agrees to ensure that SAWPA, DWR, or any authorized representative thereol, shall have reasonable access to the Arundo Component site at all reasonable times during Arundo Component construction, and thereafter for the useful life of the Project and the SARCCUP Conjunctive Use Program.

SECTION 32. OPINIONS AND DETERMINATIONS
Where the terms of this Contract provide for action to be based upon the opinion, judgment, approval, review, or determination of either party hereto, such terms are not intended to be and shall never be construed as permitting such opinion, judgment, approval, review, or determination to be arbitrary and capricious.

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IN WITNESS THEREOF, the parties have executed this Contract on the later date set forth below.

SANTA ANA WATERSHED PROJECT

AUTHORITY
Dated: 4/11/19 Westla
By:

Richard E. Haller, General Manager

ORANGE COUNTY WATER DISTRICT
Sub-Grantee
Dated: 4-12-19 By:

MichadR. Markus, General Manager

PROVEN AS TOFORM
Orantle County Water Dietrict
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PROPOSITION 84 INTEGRATED REGIONAL WATER MANAGEMENT
2015 ROUND IMPLEMENTATION
GRANT FUNDING CONTRACT AMENDMENT NO. 1

BETWEEN

SANTA ANA WATERSHED AND ORANGE COUNTY

PROJECT AUTHORITY WATER DISTRICT
This Proposition 84 Integrated Regional Water Management Program ("IRWMP") Implementation Grant Funding Contract Amendment No. 1 ("Amendment") is made between Santa Ana Watershed Project Authority ("SAWPA") and Orange County Water District, (the "Sub-Grantee"). SAWPA and the Sub.

Grantee may be individually referred to as "Party and collectively referred to as the "Parties".

WHEREAS, on November 1, 2016, the California Department of Water Resources ("DWR") and SAWPA entered into a Proposition 84 IRWMP Implementation Grant Agreement No. 4600011515 ("Grant Agreement") which has been amended twice, to date, by Grant Agreement Amendment No. 1 executed on February 1, 2019 and Grant Agreement Amendment No. 2 executed on May 29, 2020; WHEREAS the Grant Agreement and its subsequent two amendments include the Santa Ana River Conservation and Conjunctive Use Program ("SARCCUP") Project ("Project") with the Sub-Grantee listed as one of the implementing agencies;
WHEREAS the subsequent two amendments removed conjunctive use projects that would have been implemented by one of the SARCCUP implementing agencies listed in the Grant Agreement - Inland Empire Utilities Agency;
WHEREAS the Grant Agreement includes several tasks related to Arundo Donax removal as part of the Project, Grant Agreement Amendment No. 1 added the Coastal Plain of Orange County Groundwater Basin as a location for storing water as part of the Project, and Grant Agreement Amendment No. 2 added several well facilities for extracting water from the Coastal Plain of Orange County Groundwater Basin; WHEREAS with the Grant Agreement Amendment No. 1 and 2 changes of adding the facilities for extracting water from the Coastal Plain of Orange County Groundwater Basin, the Sub-Grantee's estimated reasonable costs for the Project has increased as well as the associated grant and required cost share;
THEREFORE, based on the foregoing incorporated recitals and in consideration of the mutual covenants and conditions set forth in this Contract and this Amendment, the Parties hereby agree to the following changes to the provisions of the Contract shown below, with all other provisions of the Contract Section 1 of the Contract is hereby amended and restated as follows:

SECTION 1. PROJECT DESCRIPTION
The Project is a muiti-agency, watershed-wide program developing dry-year yield ("DYY") supply by banking wet-year water that also integrates water conservation measures, habitat enhancements, and recreational use. Through the DYY program, the Project will develop an approximately 180,000 137,000 acre-foot ("AF") SARCCUP Conjunctive Use Program ("Program") providing for management and facilities to have the capacity to store and convey through such methods as direct pumping or in lieu transfers approximately 180,000 137,000 AF to different water agencies in the Santa Ana River Watershed over a ten year period. Additionally, increased supply for the Santa Ana River Watershed will be made available due to water conservation associated with removing approximately 640 acres of the invasive and heavy water-using plant Arundo Donax and implementing conservation based water rates by up to five retail water agencies a water use efficiency budget assistance task. To allow the implementation of SARCCUP's Conjunctive Use Program and other water supply projects, approximately 40.5 acres of in-stream riparian habitat will be restored and approximately 3.5 miles of stream habitat will both be created for the benefit of the Santa Ana sucker fish in the Santa Ana River Watershed. One mile of educational hiking trail and approximately 40 acres (gross) in the form of recharge basıns, will be created in the Santa Ana River Watershed. A drought tolerant landscaping maintenance outreach program called Smartscape operated by Orange County Coastkeeper/Inland WaterKeeper will also be implemented as needed throughout the Santa Ana River Watershed to support effective water use efficiency.

Section 2 of the Contract is hereby amended as follows:

SECTION 2. SUB-GRANTEE DELIVERABLES
The Sub-Grantee, along with other SARCCUP Sub-Grantees, will finalize a decision support model and take into consideration the Santa Ana River Watershed's hydrology, planned and existing facilities, and groundwater put- and- take scenarios in order to better define agreements and needs for possible future expansion.

The Sub-Grantee, per the Grant agreement, will implement the Program by storing at least 36,000 AF, or 100,000 137,000 At collectively with other Project Sub-Grantees, of wet-year water over each ten-year period' and through such actions such as direct pumping or in lieu transfers in dry years convey SARCCUP Project water, over the ten year period, to its own customers and other Santa Ana River Watershed water agencies.

The Sub-Grantee will implement the SARCCUP Orange County well component (Well Component") by designing and constructing three or more new groundwater productions wells.

The Sub-Grantee will, unless otherwise restricted by law or court decision, implement the SARCCUP Arundo Component ("Arundo Component") by eradicating approximately 640 acres of the invasive and heavy water-using plant Arundo Donax just upstream of Prado Dam in Riverside County by utilizing heavy machinery in the floodplain, herbicide and maintenance sweeps by working with its partners. The Sub-Grantee will also complete a study of the effectiveness of removal of Arundo Donax in terms of an overall goal of eradicating Arundo Donax from the Santa Ana River Watershed ("Study Component") without seeking reimbursement through this Contract. The Study Component shall be complete before the Sub-Grantee requests grant reimbursement through this Contract.

In order to implement the Program, the Sub-Grantee, along with other SARCCUP Sub-Grantees will execute joint agency agreements) ("Agreements") that establish the 180,000 137,000 AF groundwater bank that the Program will operate.
' Performance subject to California Civil Code 1511(2).

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In order to monitor deliverables, the Sub-Grantee, along with the other SARCCUP Sub-Grantees will implement the Project Monitoring Plan as described in Paragraph 21 of the Grant Agreement. The Project Monitoring Plan must be approved by SAWPA and DWR before the Sub-Grantee implements any sampling or monitoring activities. The Sub-Grantee will report on the benefits of the Project based on the Project Monitoring Plan using a final Project Completion Report and Post Performance Reports described in Section 19 and Section 21 of this Contract.

The Sub-Grantee will provide all other deliverables described in the Grant Agreement such as the deliverables listed in Paragraph 15 of the Grant Agreement.

Section 4 of the Contract is hereby amended as follows:

SECTION 4. SUB-GRANTEE'S ESTIMATED ELIGIBLE PROJECT COSTS; GRANT AMOUNT; LOCAL FUNDING MATCH
The Sub-Grantee's estimated reasonable cost of the Project at the time of SAWPA's and DWR's approval of the Project is Four Million Four Hundred Twenty Five Thousand Eight Hundred Fifty Eight dollars ($4,425,858) $28,894,544. Subject to all of the terms, provisions, and conditions of this Contract, including appropriate invoicing and reporting, and subject to the availability of the grant funds, SAWPA shall reimburse Projects costs from grant funds in a sum not to exceed One Million Four Hundred Seventy Two Thousand Fifty Seven dollars ($1,172,057) $9,368,344. The Sub-grantee's required cost share is $8,909,588. Work performed after January 17, 2014 by the Sub-Grantee, is eligible for grant reimbursement. Per Exhibit D of the Grant Agreement, the DWR shall withhold retention. SAWPA's SAWPA from the DWR. If actual Project costs exceed the Project's estimated reasonable cost, SAWPA shall have no obligation to provide grant funds for such exceedance.

Work performed by Sub-Grantee to advance the Project after January 1, 2011 is eligible to be counted as the Sub-Grantee's local funding match used to complete the Project.

Eligible Project costs include the reasonable costs of studies, engineering, design, land and easement Reasonable administrative expenses may be included as eligible project costs and will depend on the complexity of the project preparation, planning, coordination, construction, acquisitions, implementation and maintenance. Reasonable administrative expenses are the necessary costs incidentally but directl related to the Project including the portion of overhead and administrative expenses that are directly related to the Project.

Section 5 of the Contract is hereby amended as follows:

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SECTION 5. SCOPE OF WORK: TASKS
The Scope of Work is described in the Grant Agreement Work Plan. The Sub-Grantee is entirely responsible for the following:
• Task 8.3 - SARCCUP Conjunctive Use Program Design in the Orange County Basin • Task 8.3.1 8.4.1 - Arundo Donax Removal Design
• Task 12.3 - SARCCUP Conjunctive Use Program Implementation in the Orange County Basin Task 12.3.1 12.4.1 - Arundo Donax Removal
The Sub-Grantee may, as applicable, be responsible collectively with one or more other SARCCUP Sub- Grantees for the completion of the following tasks:

Task 1 - Project Management
Task 2 - Labor Compliance Program
• Task 3 - Reporting
• Task 5 - Feasibility Studies.
• Task 6 - SARCCUP CEQA Documentation.

Task 7 - Permitting.

Task 9 - Project Monitoring Plan.
• Task 10 - Construction Contracting.
• Task 11 - Construction Administration.

The Sub-Grantee understands that time is of the essence, and agree to expeditiously proceed with and complete the Project.

Section 9 of the Contract is hereby amended as follows:

SECTION 9. COVENANT TO OPERATE AND MAINTAIN PROGRAM AND

COMPONENT
The Sub-Grantee shall properly staff, operate and maintain, either directly or via agreement with retail water agencies within Sub-Grantee's service area, all portions of the Well Component, Arundo Component and the Program during the Well Component, Arundo Component's and Program's useful life (per section 20 of the Grant Agreement) and in accordance with this Contract, the Grant Agreement, and all applicable state and federal laws, rules and regulations, provided Sub-Grantee shall not be required to use its own funds to reconstruct or replace the Well Component and Arundo Component if sites are destroyed or damaged beyond repair resulting from acts of God, wars, sabotage, or other Force Majeure events that frustrate or prevent Sub-Grantee's performance. In the event that the Sub-Grantee assigns or transfers all or any portions of the Well Component, Arundo Component and the Program to another entity, the Sub-Grantee shall be responsible to ensure that the assignee or transferee of all or any portions of the Well Component, Arundo Component and the Program shall properly staff, operate and maintain all portions of the Well Component, Arundo Component and the Program during its useful life and in compliance with this Contract, the Grant Agreement, and all applicable state and federal laws, rules and regulations. However, the Parties further understand and agree that the Well Component funded via this grant will be transferred by the Sub-Grantee to one or more retail water agencies who produce groundwater from the Orange County Groundwater Basin (Producers") within the Sub-Grantees's service area, and such wells funded by the Well Component will be owned, operated and maintained by said Producers as part of their respective public water systems, and said Producers will be responsible for ensuring that all legal requirements, including compliance with this Grant Santa Ana Watershed Project Authority Page 4 of 8
Agreement, are met for the operation and maintenance of the wells funded by the Well Component.? However, the Parties understand that the Sub-Grantee is still the primary responsible entity for matters related to the Grant Agreement such as a State audits during the useful life of the Well Program, Arundo Component and Program. The Parties to this Contract understand and agree that this covenant shall survive the expiration or termination of this Contract not to exceed the useful life of the Well Component, Arundo Component and the Program. The Parties understand and agree that this covenant is for the benefit of SAWPA and DWR and shall be enforceable during the useful life of the Well Component, Arundo Component and the Program.

The Parties agree that the useful life of the Arundo Component is 5 (five) years from and after Arundo Component completion. The Parties agree that the useful life of the Well Component and Program is 30 (thirty) years from and after Project completion, and that the Sub-Grantee's obligations with regard to the Program in this Section are understood to be obligations to work collectively with the other SARCCUP Sub- Grantees. The useful life of the Well Component and Program shall be subject to California Civil Code 1511(2) and SAWPA shall consider events or occurrences that are outside the control of the retailer that result in a shut-down of their well. Through the Program's useful life, the Sub-Grantee shall, when Project water is available and Orange County Groundwater Basin conditions so justify, continue to store 36,000 AF or 180,000 137,000 AF collectively with other SARCCUP Sub-Grantees, of wet-year water per ten-year period, and through such actions such as direct pumping or in lieu transfers in dry years convey SARCCUP Project water, in each ten-year period, to its own customers and to other Santa Ana River Watershed water agencies.

The Sub-Grantee shall not abandon, substantially discontinue use of, lease, or dispose of the Well Component, Arundo Component and the Program, including its construction, implementation, or any significant part or portion thereof, during the useful life of the Well Component, Arundo Component and the Program without SAWPA's and DWR's prior written approval.

Section 10 of the Contract is hereby amended as follows:

SECTION 10. ASSIGNMENT
Neither this Contract, nor any duties or obligations under this Contract, nor any of the Well Component, Arundo Component and Program referenced in this Contract shall be assigned by any Party without the prior written consent of the other Party. However, SAWPA agrees that Sub-Grantee shall be authorized to transfer ownership and assign the obligation and responsibility for operation and maintenance for Well Component facilities to Producers within Sub-Grantee's service area.

SECTION 12. ACKNOWLEDGEMENT OF CREDIT/SIGNAGE REQUIREMENTS Operation and maintenance of Well Component wells may include periodic shut-down of such wells in order to meet the Producer's operational requirements and limitations, including, but not limited to maintenance outages, shut down because of reduced demand, wellhead treatment, and blending operations.

Santa Ana Watershed Project Authority Page 5 of 8
The Sub-Grantee shall include appropriate acknowledgement of credit to the State, SAWPA and to all cost-sharing partners for their support when promoting the Project or using any data and/or information developed under this Contract and/or the Grant Agreement.

During construction of the Well Component, Arundo Component, the Sub-Grantee shall install a veather-proof sign at the location of the Weil Component and Arundo Component in compliance with Exhibit D of the Grant Agreement. In addition to the sign requirements required under Exhibit D, the sigi shall include the One Water One Watershed logo and the SAWPA logo (all available from SAWPA).

Before it is constructed, the Sub-Grantee shall provide the draft design layout of the sign to SAWPA fo approval. Sub-Grantee shall notify SAWPA that the sign has been erected by providing them with a site map with the sign location noted and a photograph of the sign.

Section 13 of the Contract is hereby amended as follows:

SECTION 13. CONSTRUCTION ACTIVITIES AND NOTIFICATION
The Sub-Grantee shall immediately notify SAWPA in writing of:
(1) Any substantial change in the scope, budget, or work performed by the Sub-Grantee in implementation of the Project. The Sub-Grantee agrees that no substantial change in the scope of the Project may be undertaken until written notice of the proposed change has been provided to SAWPA, and SAWPA and DWR have given written approval for such a change; (2) Any public or media event publicizing the accomplishments and/or results of this Grant Agreement and provide the opportunity for attendance and participation. Sub-Grantee must notify SAWPA at least twenty (20) calendar days prior to the event. (3) Unscheduled cessation of all major construction work on the Well Component and Arundo Component where such cessation of work is expected to or does continue for a period of thirty (30) calendar days or more;
(4) Any circumstance, combination of circumstances, or condition which is expected to delay Project completion for a period of ninety (90) calendar days or more beyond the initial estimated date of completion of the Project previously provided to SAWPA:
(5) Completion of construction of the Well Component and Arundo Component and provide SAWPA and DWR the opportunity to participate in the inspection. Sub-Grantee must notify SAWPA at least twenty (20) calendar days prior to final inspection.

Section 30 of the Contract is hereby amended as follows:

SECTION 30. INDEMNIFICATION
(A) Sub-Grantee shall defend, indemnify and hold harmless SAWPA, DWR, and their any other person, entity or corporation furnishing or supplying such services, materials o1 transactions, funding and construction activities contemplated by such contracts. Sub-Grantee Santa Ana Watershed Project Authority Page 6 of 8
shall indemnify and save Indemnified Parties harmless from any and all claims, losses, damages, attorneys' fees and expenses that may arise from any breach or default by Sub-Grantee in the performance of its obligations under this Contract, or any act of negligence by the Sub-Grantee or any of its agents, contractors, subcontractors, servants, employees or licensees concerning the subject matter of this Contract or the Project. No indemnification is required under this Section for claims, losses or damages arising out of the misconduct or negligence under this Contract by SAWPA. Sub Grantee shall require its assignees, contractors or subcontractors to name the SAWPA, DWR, and their officers, agents and employees as additional insureds on their liability insurance for activities undertaken pursuant to this Agreement. (B) The Sub-Grantee understands and agrees that it has, as applicable, complied and will comply with CEQA and the State CEQA Guidelines for the portions of the Project that it will carry out which is the subject matter of this Contract. Producers obtaining funding to construct, operate and maintain wells per the Well Component of the Grant Agreement will be required to complete any additional CEQA analysis required prior to placing such wells into operation. (C) In addition to complying with the insurance requirements contained in the Grant Agreement, including Exhibit D of the Grant Agreement, the Sub-Grantee shall ensure that adequate insurance coverage is provided by Sub-Grantee and/or its contractors and subcontractors on the Project funded, in part, by this Contract. Such insurance shall include adequate coverage for comprehensive commercial general liability, business auto liability, workers compensation liability, professional and errors and omissions liability, property insurance, including all builders risk insurance. Such insurance coverage shall, at a minimum, insure against injuries to third parties, damage to property owned by third parties, physical damage to the Well Component and Arundo Component and all related facilities, theft of building materials and supplies intended for the Well Component and Arundo Component, delays in Well Component and Arundo Component completion, delays in Well Component and Arundo Component completion due to strikes and governmental actions, liquidated damages, employee injuries and work-related illnesses, design errors resulting in increased project costs, environmental damage caused by construction activities related to the Well Component and Arundo Component, and nonperformance by the contractors and subcontractors. Such insurance coverages shall be provided by admitted insurance companies authorized to do business in the State of California, and with a minimum "Best's Insurance Guide" rating of "A: VII". The Parties understand that Sub-Grantee is self-insured and has established a self-funded reserve for this purpose which will satisfy the requirements of this Subparagraph 29(C).

Section 31 of the Contract is hereby amended as follows:

SECTION 31. PROJECT AND INFORMATION ACCESS
The Sub-Grantee agrees to ensure that SAWPA, DWR, or any authorized representative thereof, shall have reasonable access to the Well Component and Arundo Component site at all reasonable times during Well Component and Arundo Component construction, and thereafter for the useful life of the Project and the SARCCUP Conjunctive Us Program.

IN WITNESS THEREOF, the parties have executed this Amendment on the later date set forth below.

SANTA ANA WATERSHED PROJECT

AUTHORITY
Santa Ana Watershed Project Authority Page 7 of 8
14/220220 U5 the
Dated: By:

Richard E. Haller, General Manager

ORANGE COUNTY WATER DISTRICT
Sub-Grantee
Dated: G-16-20 By:

Micbael R. Markus, General Manager
Orange County Wator District
Santa Ana Watershed Project Authority Page 8 of 8
Exhibit B - List of Wells to be Constructed
Participating Selected Well Site Location and Estimated Capacity Agency Well Site
East Orange 210 N. McPherson Rd, Orange, CA. Est. 1,800 gpm County Water North Well capacity.

District
627 West La Palma Ave., Anaheim, CA. Replaces well
City of Fullerton Well 7A 7, located at Main Plant where there are five other wells. Est. 2,000-4,000 gpm capacity.

Mesa Water Well No. 14 3120 S. Croddy Way, Santa Ana. Est. 3,000 -4,000 gpm capacity.

City of Orange Well 29 1715 W. Struck Ave, Orange, CA 92866. Est. 3,000 gpm capacity.

City of Tustin Replace 18001 Beneta Way, Tustin, Ca. 92780. Est. 1,500 gpm Beneta well capacity.
-12-
Exhibit C - OCWD Labor Compliance Program
-13-
STATE OF CALIFORNIA EDMUND G. BROWN JR., Governor

DEPARTMENT OF INDUSTRIAL RELATIONS
Christine Baker, Director
Office of the Director
1515 Clay Street, 170 Floor
Oakland, CA 94612
Tel: (510) 622-3959 Fax: (510) 622-3265
September 16, 2014
Orange County Water District
18700 Ward Street
Fountain Valley, CA 92708
Attention: Lo Tan, Senior Engineer
RE: Application for Approval of Labor Compliance Program LCP ID No. 2014.00245
Dear Lo Tan:

In accordance with the provisions of Title 8, California Code of Regulations, section 16425, approval of the Orange County Water District'S Labor Compliance Program (LCP) is hereby granted, effective September 16, 2014. This approval covers any project for which your agency is required by state statute to have an approved LCP, including a project subject to the requirements of Section 75075 of the Public Resources Code (public works projects funded by Proposition 84).

An LCP must comply with the requirements of Title 8, California Code of Regulations, sections 16421 through 16439, as well as with all other statutes and regulations pertaining to the monitoring and enforcement of the state's prevailing wage requirements. Among other things, your agency must file an annual report in accordance with the requirements of section 16431 of the regulations, regardless of whether your LCP has conducted any monitoring or enforcement during the preceding year. The annual reporting period is July 1 through June 30, and annual reports are due by no later than August 31.

Please note that Labor Code section 1773.3 requires your agency to notify the Department of Industrial Relations (DIR) whenever your agency awards a public works contract for any project of $30,000 or more that will include ipprenticeable crafts. In addition, Title 8, Calitoria Code of Regulations, section 16451(a), requires you gency to notify the DIR when any type of project of any amount requires the use of DIR's Compliance Monitoring Unit (CMU) or a prescribed alternative. Please notify the DIR of projects using the electronic PWC- Additional information and resources pertaining to labor compliance programs are available on the DIR's website at http://www.dir.ca.gov/lcp.asp. Questions about enforcement policy must be directed to the Division of Labor Standards Enforcement. If you have any other questions, including questions about this notice, please contact Jonathan LeGaux at (510) 622-5054.

Olertie Babe
Christine Baker, Director of Industrial Relations
cc: Susan Nakagama, Regional Manager, Division of Labor Standards Enforcement LCP Inc. 1168 E. La Cadena Dr. • Suite 201
Riverside, CA 92507
LABOR COMPLIANCE PROVIDERS Phone: (951) 686-3482 • Fax: (951) 346-0545 • Email: [email protected] May 27, 2014
Office of the Director
Department of Industrial Relations
ATTN: Executive Assistant to the Director
455 Golden Gate Avenue, 10th Floor
San Francisco, CA 94102
RE: Labor Compliance Program Application (Prop. 84 Projects) Awarding Body LCP: Orange County Water District
To whom it may concern:

Labor Compliance Providers, Inc. (LCP, Inc.) is hereby submitting the enclosed Application to the Director for Approval of Awarding Body's Labor Compliance Program, pursuant to 8 California Code of Regulations §16425, on behalf of the below named Awarding Body:

Awarding Body: Orange County Water District
Address: 18700 Ward St.; Fountain Valley, CA 92708
Awarding Body Contact: Lo Tan, Senior Engineer
Phone: (714) 378-3368
Email: [email protected]
Orange County Water District proposes to utilize the services of the below-named 3'd-party LCP Administrator to implement its LCP upon the District's Proposition 84-funded projects:
3id Party LCP: Labor Compliance Providers, Inc.

Address: 1168 E. La Cadena Dr., Ste 201; Riverside, CA 92507 LCP Contact: James Reed
Ph: (951) 686-3482 - Email: [email protected]
Please contact me, by phone or email identified above, if you have any questions or comments concerning the Awarding Bodý's LCP Application. In accordance with California Code of Regulations §16425(b), please provide a status of the Director's decision on the granting of LCP approval within 60 days of receipt of this request.

Regards,
Year fringes
Sophia E. Ramirez
Labor Compliance Providers, Inc. - Project Manager
Enclosure
CG. Orange County Water District

AWARDING BODY

APPLICATION TO THE DIR

LABOR COMPLIANCE PROGRAM
Pursuant to California Code Regulations 16425
GE Co ORANGE COUNTY WATER DISTRICT
Lo Tan. Senior Enginear
18700 Ward Street
Fountain Valley, CA 92708
ER DISY Phone: (714) 378-3368
Fax: (714] 378-3373
SINCE 1933
Email: LTan @ocwd.com
SCRI mat of Application to Director for Aproral of Awarding Body's Tabor Compliance Prograge Prograge oF oF12 (8 CCR 816425) Application to Director for Approval of Awarding Body's Labor Compliance Program (8 CCR S16425)
NOTE: If necessary, you may attach additional sheets.

The Dictor my ask for aditional documentation a to ay informil provided or any other information that may have a bearing Awarding Body Seeking Approval:

Orange County Water District ("OCWD")
Name
18700 Ward Street, Fountain Valley, CA 92708
Address
Awarding Body's Contact Person:

Lo Tan / Senior Engineer
Name / Title
18700 Ward Street, Fountain Valley, CA 92708
P: (714) 378-3368 * F: (714) 378-3373 * [email protected]
Phone Fax Email
A. Identify the individuals who will be enforcing the Labor Compliance Program (LCP). (Note: If using outside consultants or an approved third party contract provider, identify the awarding body personnel who will monitor or supervise the outside work as well as the individuals and affiliations of the individuals who will

1. Lo Tan
Labor Compliance Officer (OCWD, Senior Engineer)
Experlence/ training on public wotks/labor compliance issues (Please provide specific dates, details and examples of public works prevailing wage rate enforcement activities, including whether such experience involve federal, state, ot local law. In addition, please include private sector experience on behalf of unions or contractors or on a joint labor management committee pursuant to the federal Labor Management Cooperation Act of 1978 (2 J.S.C. section 175a). Furthermore, please include participation in any public works enforcement training provided b the Division of Labor Standards Enforcement (DLSE)):

Mr. Lo Tan, Senior Engineer for OCWD, will serve as a Labor Compliance Officer for the District's Proposition 84-funded projects. Mr. Tan has experience on public works projects that were subject to prevailing wage/labor compliance, which is summarized in-a project list included as Exhibit 2. Mr. Tan will be responsible for the day-to-day... compliance monitoring functions and will serve as the Agency's responsible party for labor compliance enforcement. Mr. Tan will be supported by a Labor Compliance Administration Team, whose experience is provided on the following pages.

Rev. 1/16/2009 8 CCR §16425
Suggested format of Application to Director for Approval of Awarding Body's Labor Compliance Program (8 CCR 16425) Page 2 of 12
LCP duties and responsibilities to be performed including percentage of time to be devoted to LCP work:
• Percentage of Time Devoted to LCP Work: 50%
• Conduct pre-bid & pre-construction meetings and/or labor compliance workshops with contractors/ subcontractors to educate them of prevailing wage requirements
Review the Labor Compliance Team's auditing of certified payroll records & related benefit payroll documentation, and wage underpayment investigations • Review the Labor Compliance Team's monitoring of contractors' / subcontractors' compliance with apprenticeship requirements • Monitor LCP enforcement activities such as notifications of violations and assessments
• Review the Labor Compliance Team's monitoring of the on-site employee interviews process
• Review the Labor Compliance Team's undertaking of random "confirmation" of prevailing wages paid
• Provide technical assistance to project contractors, subcontractors, and construction workers, when necessary.

2. James Reed
Name
Labor Compliance Technical Advisor
Tide
Experience/ training on public works/labor compliance issues (Please provide specific dates, details and examples of public works prevailing wage rate enforcement activities, including whether such experience involve federal, state, or local law. In addition, please include private sector experience on behalf of unions or contractors ot on a joint labor management committee pursuant to the federal Labor Management Cooperation Act of 1978 (29 U.S.C. section 175a). Furthermore, please include participation in any public works enforcement training provided by the Division of Labor Standards Enforcement (DLSE)):

James Reed, has 12 years of experience serving as a Labor Compliance Officer for Labor Compliance Providers, Inc., a third-party LCP, and as Director of the Center for Contract Compliance-a joint labor management committee. Mr. Reed is. intimately familiar with prevailing wage laws and compliance, having authored the first state- approved 3rd-party LCP, which previously served as the template application for 3rd- party LCP applicants. Mr. Reed also authored ICP, Inc.'s Labor Compliance Policies & Procedures Manual, which was updated to reflect the 2009 & 2012 legislative requirements. He also knows the construction process, having been a general engineering contractor in California for over 26 years. Mr. Reed has often provided training sessions to agency representatives and contractors to educate them on the rules and regulations to ensure compliance, including sponsorship of conferences that were jointly attended by DLSE, DAS & DIR officials. A representative sample of training seminars Mr. Reed has participated include:

Agency Providing Training Name of Training / (Location) Approximate Date of Training Center for Contract Compliance Underground Economy (Palm Springs) 5/2012 Rev. 1/16/2009 8 CCR §16425
Suggested format of Application to Director for Approval of Awarding Body's Labor Compliance Program (8 CCR 816425) Page 3 of 12
Foundation Fair Contracting Underground Economy (Sacramento) 4/2012 DLSE / CMU Webinars 01/2012
DLSE State Labor Law and Payroll Tax Seminar 12/2008
DIR Public Works Training Seminar 9/2008
(Los Angeles)
Center for Contract Compliance Underground Economy (San Diego) 5/2008 DIR Public Works Training Seminas 6/2007
(Fresno)
Center for Contract Compliance Underground Economy (Palm Springs) 5/2006 & 5/2007 LCP duties and responsibilities to be performed including percentage of time to be devoted to LCP work:

Percentage of Time Devoted to LCP Work: 40%
Assist OCWD staff with conducting pre-bid & pre-construction meetings and/or labor compliance workshops with contractors/subcontractors to educate them of prevailing wage requirements
• Train OCWD staff and assist with reviewing and auditing of certified payroll records & related benetit / payroll documentation
• Monitor contractors /subcontractors' compliance with apprenticeship requirements
• Assist OCWD staff with conducting audits and wage underpayment investigations
• Monitor LCP enforcement activities such as notifications of violations and assessments
• Train OCWD staff & assist with monitoring the on-site employee interviews process
• Train OCWD staff and assist with undertaking random "confirmation" of prevailing wages paid
* Provide technical assistance to the OCWD, project contractors, subcontractors, and construction workers.

3. Sophia Espinoza
Name
Labor Compliance Project Manager
Experience/ training on public wotks/labor compliance issues (Please provide specific dates, details and examples of public works prevailing wage rate enforcement activities, including whether such experience involve federal, state, or local law. In addition, please include private sector experience on behalf of unions or contractors or on a joint labor management committee pursuant to the federal Labor Management Cooperation Act of 1978 (29 U.S.C. section 175a). Furthermore, please include participation in any public works enforcement training provided by the Division of Labor Standards Enforcement (DLSE)):

Sophia Espinoza has over 12 years of professional labor compliance experience which was gained through her monitoring and enforcement efforts on over $8 billion dollars' worth of public works projects. She has vast California prevailing wage and Davis- Bacon labor compliance experience on public works construction projects. Her professional background also includes serving as a trainer/facilitator at numerous prevailing wage compliance seminars held for public agency representatives, labor unions, and contractors to educate them on the rules and regulations of prevailing Rev. 1/16/2009 8 CCR 516425
Suggested format of Application to Director for Approval of Awarding Body's Labor Compliance Program (8 CCR S16425) Page 4 of 12
wage regulations. Ms. Espinoza has also provided testimony to the Director of the California DIR Legal Unit regarding legislation affecting prevailing wage compliance monitoring and enforcement. A representative sample of training seminars Ms.

Espinoza has participated include:

Agency Providing Training Name of Training / (Location) S/proximate Date of Training Center for Contract Compliance Underground Economy (Palm Springs) Foundation Fair Contracting Underground Economy (Sacramento) 4/2012 DISE / CMU Webinars 01/2012
DISE State Labor Law and Payroll Tax Seminar 12/2008
DIR Public Works Training Seminar 9/2008
(Los Angeles)
Denter for Contract Compliance Underground Economy (San Diego) /200 Public Works Training Seminar /2007
(Fresno)
Center for Contract Compliance Underground Economy (Palm Springs) | 5/2006 & 5/2007 LCP duties and responsibilities to be performed including percentage of time to be devoted to LCP work:
• Percentage of Time Devoted to LCP Work: 100%
• Assist OCWD staff with conducting pre-bid & pre-construction meetings and/or labor compliance workshops with contractors/ subcontractors to educate them of prevailing wage requirements
• Train OCWD staff and assist with reviewing and auditing of certified payroll records & related benefit/payroll documentation
• Monitor contractors'/subcontractors' compliance with apprenticeship requirements
• Train OCWD staff and assist with undertaking random "confirmation" of prevailing wages paid
• Assist OCWD staff with conducting audits and wage underpayment investigations
• Development of the OCWD's labor compliance correspondence library for tuture monitoring & entorcement correspondence ettorts
• Monitor LCP enforcement activities such as notifications of violations and assessments
Train OCWD staff & assist with monitoring on-site employee interviews process Provide technical assistance to the OCWD, project contractors, subcontractors, and construction workers.

4. Isabel Ayala
Name
Labor Compliance Analyst
Experience/training on public-works/labor compliance issues (Please provide specific dates, details and...

Rev. 1/16/2009 8 CCR §16425
Suggested format of Application to Director for Approval of Awarding Body's Labor Compliance Program (8 CCR §16425) Page 5 of 12
Isabel Ayala has over 16 years of experience assisting Compliance Officers & Labor Compliance Investigators with monitoring and enforcing contractor compliance with prevailing wage and apprenticeship laws. Ms. Ayala has assisted with monitoring 1000's of public works projects in her compliance career, where document control and management of contractor paperwork was paramount to the success of the monitoring effort. Ms. Ayala assisted with the development of the OWD's Audit Methodology Checklist System, which the OCWD shall implement as part of the LCP compliance monitoring efforts to ensure that each/every project contractor is receiving a comprehensive review according to the same set of standards required by law. A representative sample of training seminars Ms. Ayala has participated include:

Agency Providing Training Name of Training / (Location) Approximate Date of Training Center for Contract Compliance Underground Economy (Palm Springs) 5/2012 DLSE / CMU Webinars 01/2012
DIR Public Works Training Seminar 9/2008
(Los Angeles)
Los Angeles Unified School Public Works Training Seminar 2007 OCWD (Los Angeles)
Center for Contract Compliance Underground Economy (San Diego) 5/2008 Center for Contract Compliance Underground Economy (Palm Springs) 5/2006 & 5/2007 LCP duties and responsibilities to be performed including percentage of time to be devoted to LCP work:
• Percentage of Time Devoted to LCP Work: 100%
Adhering to the OCD's Labor Compliance Policies and Procedures Manual * Assisting OCWD statt with the auditing of payroll information and cross- checking against independent sources of information
• Assisting OCWD staff with conducting on-site employee interviews and reviewing against payroll documentation
Assisting OWD staff with reporting alleged violations, distributing notices of violations, working with contractors to remediate violations, and informing all appropriate parties of the status of violations
Assisting OCWD staff with managing and tracking of correspondence pertaining to compliance monitoring and enforcement
B. State the average number of public work projects the awarding body annually administers:

The average number of public work projects OCWD annually administers is three (3) and the number of Proposition 84 projects OCWD expects to administer each year is one (1).

C. State whether the proposed LCP is a joint or cooperative venture among awarding bodies; and, if so, how the resources and expanded responsibilities of the LCP compare to the awarding bodies involved.

OCWD's proposed LCP is NOT a joint or cooperative venture among awarding bodies
Rev. 1/16/2009 8 CCR $16425
Suggested format of Application to Director for Approval of Awarding Body's Labor Compliance Program (8 CCR 816425) Page 6 of 12
D. Describe the awarding body's record of taking cognizance of Labor Code violations in the preceding five years, including any withholding of funds from public works contractors pursuant to LC 1726.

The OCWD does not have a record of contractor labor law violations in the preceding five years. Upon discovery of violations, the OCWD (or its representative has provided notification to the violating contractors and resolved the violations before having to refer the matter to the US Department of Labor or CA DLSE through the forfeiture process. All non-compliance violations were quickly resolved by contractors, which did not necessitate withholding proceedings.

E. Identify the attorney or law fum available to provide legal support for the LCP, including handling of the LP's responsibilities during the administrative review process set forth in Labor Code Section 1771.6.

Cox Castle Nicholson LLP
2049 Century Park East, 28" Floor, Los Angeles, CA 90067 Address
Contact Person: Dwayne McKenzie - Brief Resume as Exhibit 1 (310) 284-2279
Contact Person & Phorie Number
F. Identify the method by which the LCP will notify the Labor Commissioner of willful violations as defined in Labor Code Section 1777.1(d):

Should the OCWD's LCP be approved, the OCWD shall notify the Director of the DIR - DLSE of any willful violators as defined in LC 1771.1(d) via the Request for Review of Forfeiture process (California Code of Regulations 16437) in addition to summarizing its willful violations in the LCP Annual Report submittal process. In addition, wiliful violators that appear to be repeat offenders or those on the ineligible to bid/debarment list shall also be referred to the Director of the DIR when encountered by the OCWD.

G. Indicate whether the Awarding Body has established its own Labor Compliance Program in accordance with the requirements of Labor Code Section 1771.5(b) and subchapter 4 of chapter 8 of Title 8 of California Code of Regulations or has contracted with a third party that has been approved by the Director to operate a Labor Compliance Program in accordance with the requirements of Labor Code Section 1771.5(b) and subchapter 4 of chapter 8 of Title 8 of California Code of Regulations. If the Awarding Body has contracted with one ot more persons or entities to operate all or any part of the Awarding Body's Labor Compliance Program, please identify (name, address, telephone, and principal contact) all of those persons or entities.

The OCWD has contracted with a third party Labor Compliance Program in accordance with the requirements of Labor Code Section 1771.5(b) in order to assist the Rev. 1/16/2009 8 CCR §16425
Suggested format of Application to Director for Approval of Awarding Body's Labor Compliance Program (8 CCR 16425) Page 7 of 12
OCWD with LCP administration on its Prop.84 projects). The contact information for the 3"d party LCP is below.

Entity: Labor Compliance Providers, Inc.

Contact: James Reed, Administrator
Address: 1168 E. La Cadena Dr., Suite 201, Riverside, CA 92507 Telephone: (951) 686-3482
H. Indicate whether the Awarding Body intends to enforce labor compliance on all of its public works projects (i.e., not limited to projects that are funded by bonds of other statutes that require the Awarding Body to have an LCP as a condition of funding). If not, please indicate the kinds of projects on which you intend to enforce labor compliance and whether you are requited to have a labor compliance program as a condition for obtaining funding for the project or projects.

OCWD only intends to enforce its LCP upon its public works projects that are Proposition 84-funded.

I. Attach a copy of the Awarding Body's resolution adopting the LCP and, if applicable, any other resolution approving any contracts with persons or entities identified in G above.

A copy of the OCWD's Board Resolution adopting its LCP is included as an appendix to this application [Appendix 2]
J. Attach the proposed manual outlining the responsibilities and procedures of the LCP.

A copy of the OCWD's LCP Manual is included as an appendix to this application [Appendix 1]:

Lo TAN do Jaw 5/1/2014
Awarding Body's Representative Date Signed
Name and Signature
Mail two copies of this form and attachments to:

OFFICE OF THE DIRECTOR

DEPARTMENT OF INDUSTRIAL RELATIONS
455 GOLDEN GATE AVENUE, 10% FLOOR
SAN FRANCISCO, CA 94102
ATTENTION: EXECUTIVE ASSISTANT TO THE DIRECTOR
Rev. 1/16/2009 8 CCR §16425
Suggested format of Application to Director for Approval of Awarding Body's Labor Compliance Program (8 CCR 616425) Page 8 of 12
EXHIBIT 1

BRIEF RESUME FOR ATTORNEY
Rev. 1/16/2009 8 CCR §16425
1 -COXCASTLENICHOLSONA
Dwayne McKenzie
Partner
Los Angeles Office
2049 Century Park East
28th Floor
Los Angeles CA 90067
Phone: 310.284.2279
• Fax: 310.284.2100
Email: [email protected]
Dwayne Mckenzie is a member of the Labor and Employee Benefits Group of Cox, Castle & Nicholson LLP, representing clients in general employment law, labor relations, ERISA and other employee benefits matters. He counsels employers and represents them in both state and federal court litigation regarding all issues that arise with respect to their operations. He incorporates his prior experience as general counsel for a privately held company where he oversaw all legal affairs, giving him practical insight into the needs of employers. He handles class action litigation, such as wage and hour claims, and defends against cases involving wrongful termination, sex and race discrimination, sexual harassment, religious discrimination, unfair competition, trade secret infringement, breach of contract, company founder and director liability, and various other employment and business-related issues.

He also counsels employers in their day-to-day activities, such as structuring new company practices, managing and negotiating employment Issues in merger and acquisition transactions, negotiating employment and severance contracts, establishing and maintaining employment policies and documents, responding to employee claims of violations of state and federal law, and advising on risk management.

Mr. Mckenzie also has been involved extensively in prevailing wage law legislation, interpretation and litigation for over fifteen years. He is active in public works, prevailing wage and other labor-related issues. He regularly represents developer, contractor and property owner trade associations and individual developers and contractors before the Department of Industrial Relations and in the courts. Mr. Mckenzie has litigated individual and class action prevailing wage clalms and authored numerous briefs submitted to California's Supreme Court and Courts of Appeal addressing the interpretation and application of the prevailing wage law. He also has unique experience with enforcement of public bidding requirements and representation of labor compliance programs mandated on public works under California law.

A substantial portion of his practice focuses on benefit plan and fiduciary law issues, Including counseling and the representation of benefit plans, plan sponsors, plan trustees and plan service-providers in litigation. He counsels trustees of multiemployer, employment-benefit-related trusts with respect to the fulfillment of their fiduciary and statutory duties, represents such trustees in their dealings with third parties, and has expertise in benefit plan technology and intellectual property matters.

Cox, Castle & Nicholson LLP © 2013
-COXCASTLENICHOLSONA
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Mr. McKenzle has successfully represented employee benefit plan trustees against claims of breach of fiduciary duties and has litigated benefit plan provider and ERISA participant claims in a variety of areas. He has litigated several cases before federal and California appellate courts and has authored "friend of the Court" briefs addressing issues of importance to multiemployer trust funds.

EDUCATION AND PERSONAL BACKGROUND
Born Bethesda, Maryland on July 5, 1970. Admitted to bar: 1994, California; 1994, U.S. District Court, Central District of California and U.S. Court of Appeals, Ninth Circuit. Education: University of California at Los Angeles (J.D., 1994); University of Callfornia at Los Angeles (B.A., 1991). Member: Order of the Coif; UCLA Law Revlew, Production Editor.

Education
• J.D., University of California at Los Angeles, Order of the Coif, UCLA Law Review, 1994 • B.A., University of Callfornia at Los Angeles, 1991
Recent Publications
• "New Employment Laws and Requirements for 2013", CCN Client Alert (12.04.12) • "A Higher Standard", The Letter - North America (July/August 2012) • "Not all Charter City Public Works Projects are Subject to Prevailing Wage Law", SCCA Magazine (July/August 2012)
• "Callfornia Supreme Court Issues Brinker Decision, Providing Much-Anticipated Guidance on Meal and Rest Period Requirements", California Centers Magazine (05.09.12) • "California Contractors State License Board Now Accepting Contractors License Applications By Limited Liability Companies", CCN Client Alert (02.01.12)
• "New Employment Laws and Requirements for 2012", CCN Client Alert (12.15.11) • "A Watershed Expansion of California's Prevalling Wage Law Places Privately-Funded Developments and Construction at Risk", (September 2011)
• "U.S. Supreme Court Upholds Class Action Waivers In Arbitration Agreements - How This Ruling May Impact Arbitration Provisions In Your Employment, Sales And Other Agreements", CCN Client Alert (05.02.11) • "Court of Appeal Expands Reach of California's Prevailing Wage Law to Cover Privately-Financed Construction", CCN Client Alert (01.04.11)
• "California Legislature Amends California's Contractors' State License Law To Allow Limited Liability Companies To Be Licensed As Contractors", CCN Client Alert (10.18.10) • "American Recovery and Reinvestment Act of 2009 - Important COBRA Benefit and Administration Amendments", Client Alert (02.26.09)
Cox, Castle & Nicholson LLP © 2013
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Other Notable Publications and Speaking Engagements
• Contributing Author: Construction Contracts and Disputes, CEB, 2007-2012 Professional Affiliations
• State Bar of Callfornia
• Los Angeles County Bar Association
Cox, Castle & Nicholson LLP © 2013
Suggested format of Application to Director for Approval of Awarding Body's Labor Compliance Program (8 CCR 516425) Page 12 of 12
EXHIBIT 2
ICO's PROJECT EXPERIENCE SUBJECT TO PREVAILING WAGE LAWS Below is a representative sample of Lo Tan's OCWD project experience & training on public works projects subject to prevailing wage laws:

Funded by the Clean
Water State Revolving
Temporary Prevailing Wage Dates: 2003 to 2005 Fund (CWSRF) Loan Microfiltration Facility Project through State Water
Resources Control Board
(SWRCB)
Funded by the CWSRF
Groundwater Loan and Proposition 13
Prevailing Wage Dates: 2004 to 2006 through SWRCB and CA Replenishment System Project
Pipeline Unit Ill Department of Water
Resources (DWR)
Groundwater Funded by the CWSRF
Prevailing Wage Loan and Proposition 13
Replenishment System Dates: 2004 to 2006 through SWRCB and Project
Pipeline Unit II DWR
Funded by the CWSRF
Groundwater
Prevailing Wage Loan and Proposition 13
Replenishment System Dates: 2004 to 2006 through SWRCB and Pipeline Unit I Project
DWR
Funded by the CWSRF
Barrier Facilities Loan and Proposition 13
Prevaling Wage Dates: 2005 to 2007 through SWRCB and
Project
DWR
Groundwater Funded by the CWSRF
Replenishment System Prevailing Wage Loan and Proposition 13 Advanced Water Project Dates: 2004 to 2007 through SWRCB and Treatment Plant DWR
Funded by the CWSRF
Burris Basin Prevailing Wage Dates: 2007 to 2010 Loan and Proposition 50 Reconfiguration Project Project through SWRCB
Groundwater
Davis-Bacon
Replenishment System Dates: 2011 to Funded by the CWSRF Phase 2 nd Prevailing Present Loan through SWRCB
Nage Project
Funded by the CWSRF
Fletcher Basin Davis- Bacon Dates: 2014 to Loan and Measure M2 Improvement Project and Prevailing Present through the Orange Wage Project County Transportation
Authority
Rev. 1/16/2009 8 CCR 516425
APPENDIX 1
OCWD

LABOR COMPLIANCE PROGRAM

NGE COU ORANGE COUNTY WATER DISTRICT
Lo Tan, Senior Engineer
18700 Ward Street
Fountain Valley, CA 92708
DIS Phone: (714] 378-3368
Fax: (714) 378-3373
SINCE 1933
Email: [email protected]
COUNT

E P DIETE
SINCE 1933

ORANGE COUNTY WATER DISTRICT

LABOR COMPLIANCE PROGRAM
APRIL 2014
Conforms to Labor Compliance Program 2009 Amendments

LABOR COMPLIANCE PROGRAM

TABLE OF CONTENTS
Pages
INTRODUCTION. 3
SECTION 1: PUBLIC WORKS SUBJECT TO PREVAILING WAGE LAWS 4 A. Application ..4
B. Applicable Dates for Enforcement of a Labor Compliance Program .4 SECTION 2: COMPETITIVE BIDDING ON PUBLIC WORKS CONTRACTS 4 SECTION 3: JOB START MEETING ..4
SECTION 4: INVESTIGATIVE METHODS....... ........5
A. Certified Payroll Records Required 5

1. Submittal of Certified Payroll Records.

2. Use of Electronic Reporting Forms.

3. Review Payroll Records

4. Confirmation of Payroll Records 7

5. On-Site Visits..

6. Full Accountability

7. Responsibility for Subcontractors

8. Payment to Employees..

9. Requests for Certified Payroll Records 8
B. Apprentices 11

1. Contractor Responsibility. 11

2. Duties of a Labor Compliance Program with Respect to Apprenticeship Standards 11 C. Audit of Certified Payroll Records 12
SECTION 5: REPORTING OF WILLFUL VIOLATIONS TO THE LABOR COMMISSIONER 13 A. Failure to Comply with Prevailing Wage Rate Requirements.. .. 13 B. Falsification of Payroll Records, Misclassification of Work, and/or Failure to Accurately Report Hours of 13 C. Failure to Submit Certified Payroll Records. 13
D. Failure to Make Employer Payments 14
E. Failure to Pay the Correct Apprentice Rates and/or Misclassification of Workers as Apprentices 14 F. Taking or Receiving Portions of Wages of Workmen or Working Subcontractors as Felony 14 SECTION 6: ENFORCEMENT ACTION
A. Duty of the Labor Compliance Program
B. Withholding Contract Payments When Payroll Records are Delinquent or Inadequate C. Withholding Contract Payments When, After Investigation, It Is Established That Underpayment or Other Violation Has Occurred.. 17
D. Forfeitures Requiring Approval by the Labor Commissioner 18 E. Determination of Amount of Forfeiture by the Labor Commissioner (Title 8 CCR §16437) 18 F. Notice of Withholding... ..20
G. Deposits of Penalties and Forfeitures Withheld 21
H. Debarment Policy.. 21
SECTION 7: REQUEST FOR REVIEW OF LCP ENFORCEMENT ACTION/SETTLEMENT AUTHORITY ... 21 SECTION 8: PRIORITY DOSTRIBUTION OF FORFEITED SUMS .. 23 A. Withholding of Forfeited Sums.. ..23
B. Disposition of Forfeited Sums ..23
SECTION 9: ANNUAL REPORTS 23
SECTION 10: OUTREACH ACTIVITIES ..24
ATTACHMENTS. 25
ATTACHMENT A - CHECKLIST OF LABOR LAW REQUIREMENTS 26
ATTACHMENT B - COMPLIANCE MONIROTING & AUDIT RECORD WORKSHEETS 28 ATTACHMENT C - REQUEST FOR APPROVAL OF FORFEITURE ..35
ATTACHMENT D- NOTICE OF WITHHOLDING CONTRACT PAYMENTS 40

ATTACHMENT E - NOTICE OF TEMPORARY WITHHOLDING OF CONTRACT PAYMENTS DUE TO DELINQUENT OR INADEQUATE PAYROLL RECORDS... 43
ATTACHMENT F - CERTIFID PAYROLL RECORD (CPR) TEMPLATE 47 ATTACHMENT G - ANNUAL REPORT LCP-AR1 TEMPLATE FORM 49
2 ORANGE COUNTY WATER DISTRICT

LABOR COMPLIANCE PROGRAM
Conforms to Labor Compliance Program 2009 Amendments

INTRODUCTION
Orange County Water District (OCWD) issues this Labor Compliance Program (LP) for the purpose of identifying its policy relative to the responsibilities and procedures applicable to the labor compliance provisions of state and federally funded construction contracts. This program contains the labor compliance standards required by state and federal laws, regulations & directives.

The California Labor Code § 1770 et seg. require that building trades contractors on public works pay their workers based on the prevailing wage rates, which are established and issued by the Department of Industrial Relations, Division of Labor Statistics and Research.

The OCWD has adopted this LCP to meet any Labor Compliance mandates on its public works projects. The OCWD administers this LCP for monitoring the prevailing wage rates paid to construction workers on the OCWD's public works projects. This LCP assures that all contractors and subcontractors comply with the prevailing wage, certified payroll record laws and apprenticeship standards pursuant to the Labor Code §1710 thru $1861.

In establishing this LCP, the OC WD adheres to the statutory requirements as promulgated in §1771.5 (b) of the California Labor Code.

Further it is the intent of the OCWD to actively enforce this LCP wherein the construction sites shall be monitored for worker classitication, apprenticeship standards, the payment of prevailing wage rates and, wherein those contractors and subcontractors having workers on public works sites routinely submit copies of certified payroll records and any other documents required for verification, demonstrating their compliance with the payment of prevailing wage rates.

Questions regarding this Labor Compliance Program should be directed to:

Name: James Reed
Labor Compliance Providers, Inc.

Labor Compliance Technical Advisor to Orange County Water District for the Prop 84-funded projects
Phone: (951) 686-3482
E-mail: [email protected]
3 SECTION 1: PUBLIC WORKS SUBJECT TO PREVAILING WAGE LAWS A. Application
State prevailing wage rates apply to all public works contracts as set forth in Labor Code Sections 1720, 1720.2, 1720.3, 1720.4 and 1771, and include, but are not limited to, such types of work as construction, alteration, demolition, repair, or maintenance work. The Division of Labor Statistics and Research (DLSR) predetermine the appropriate prevailing wage rates for particular construction trades and crafts by county.

B. Applicable Dates for Enforcement of a Labor Compliance Program The applicable dates for enforcement of this Labor Compliance Program are established by Section 16426 of the California Code of Regulations. Contracts are not subject to the jurisdiction of the Labor Compliance Program until after the program has received initial approval or approved status.

SECTION 2: COMPETITIVE BIDDING ON PUBLIC WORKS CONTRACTS The OCWD shall publicly advertise upcoming public works projects to be awarded according to a competitive bidding process. Further information regarding the requirements of the bidding process may be obtained from the Bid Processing Section. All bid advertisements (or bid invitations) and public works contracts shall contain appropriate language concerning the requirements of chapter 1 of part 7 of division 2 of the State Labor Code.

SECTION 3: JOB START MEETING
After the award of the public works contract, and prior to the commencement of the work, a mandatory Job Start meeting (Pre-Job Labor Compliance Conference) shall be conducted by the OCWD's LCP representative with the contractor, subcontractors and any entity providing labor at the site of the work. Applicable Federal and State labor law requirements shall be discussed and suggested reporting forms provided.

At the Pre-Job Labor Compliance Conference the LCP representative will provide the contractor and each subcontractor with a Checklist of Labor Law Requirements (presented as Attachment A on pages 23 - 24) and will discuss in detail the following checklist items:

1. The contractor's & subcontractors duty to pay prevailing wages (Labor Code Section 1771, et seq.);

2. The contractor's & subcontractor's duty to employ registered apprentices on public works projects (Labor Code Section 1777.5);

3. The penalties for failure to pay prevailing wages (for nonexempt projects) and to employ apprentices, including forfeitures and debarment (Labor Code Sections 1775 and 1777.7& 1813);

4. The requirement to maintain and submit copies of certified payroll records to the Labor Compliance Group upon request at least monthly or within (10 days) of request by the OCWD. (Labor Code Section 1776), and penalties for failure to do so (Labor Code Section 1776(h));

5. The prohibition against employment discrimination (Labor Code Sections 1735 and 1777.6; the Government Code; and Title VII of the Civil Rights Act of 1964, as amended); 4 • 6. The prohibition against taking or receiving a portion of an employee's wages (Labor Code Section 1778);

7. The prohibition against accepting fees for registering any person for public works (Labor Code Section 1779) or for filing work orders on public works (Labor Code Section 1780);

8. The requirement to list all subcontractors that are performing 1/2 of one percent of the total amount of the contract (Government Code Section 4100, et seq.);

9. The requirement to be properly licensed and to require all subcontractors to be properly licensed, and the penalty for employing workers while unlicensed (Labor Code Section 1021 and 1021.5, and Business and Professions Code Section 7000, et seq., under California Contractors License Law);

10. The prohibition against unfair competition (Business and Professions Code Sections 17200-17208);

11. The requirement that the contractor & subcontractor be properly insured for Workers' Compensation (Labor Code Section 1861);

12. The requirement that the contractor abide by the Occupational Safety and Health laws and regulations that apply to the particular public works project; and

13. The federal prohibition against hiring undocumented workers, and the requirement to secure proof of eligibility and citizenship from all workers.

14. The requirement that all employees be given an itemized wage deduction statement with each payment of wages (Labor Code Section 226 et. seq).

The contractors and subcontractors attending the Job Start meeting will be given the opportunity to ask questions of the LCP representative relative to the items contained in the Labor Law Requirements Checklist.

The checklist will then be signed by the contractor's/subcontractors authorized representative and the OCWD's LCP representative. Signed copies from each conference shall be kept on file.

At the Job Start meeting, the LCP representative will provide the contractor with a copy of the LCP package which includes: a copy of the approved Labor Compliance Program, the checklist of Labor Law Requirements, applicable Prevailing Wage Determinations, blank certified payroll record forms, fringe benefit statement forms, state apprenticeship requirements, and a copy of the Labor Code relating to Public Works and Public Agencies (Part 7, Chapter 1, § 1720-1861). It will be the contractor's responsibility to provide copies of the LCP package to all listed subcontractors and to any substituted subcontractors.

SECTION 4: INVESTIGATIVE METHODS
A. Certified Payroll Records Required
The contractor shall maintain payrolls and basic records (timecards, canceled checks, cash receipts, trust fund forms, accounting ledgers, tax forms, superintendent and foreman daily logs, etc.) during the course of the work and shall preserve them for a period of three (3) years thereafter for all trades workers working at the public works project sites in accordance with Labor Code §1776. Such records shall include the name, 5 address, and social security number of each worker, his or her classification, a general description of the work each employee performed each day, the rate of pay (including rates of contributions for, or costs to provide fringe benefits), daily and weekly number of hours worked, deductions made, and actual wages paid.

California Code of Regulations $16401(a) stipulates the format for reporting of payroll records requested pursuant to Labor Code Section 1776 shail be on a form provided by the public entity. Copies of the forms may be procured at any office of the Division of Labor Standards Enforcement (DLSE) throughout the state and/or:

Division of Labor Statistics & Research P.O. Box 420603 San Francisco, CA 94101; ATTENTION: Prevailing Wage Unit.

Acceptance of any other format shall be conditioned upon the requirement that the alternate format contain all of the information required pursuant to Labor Code Section 1776. If, however, the contractor does not comply with the provisions of Labor Code Section 1776, the Labor Commissioner may require the use of DIR's suggested format, "Public Works Payroll Reporting Form" (Form A-1-131). The wording / format for the Certified Payroll Record's Statement of Compliance acceptable by the OCWD is included herein under Attachment F.

1. Submittal of Certified Payroll Records
The contractor shall maintain weekly certified payroll records for submittal to the OCWD's labor compliance office on a weekly basis. The contractor shall be responsible for the submittal of payroll records of all its subcontractors. All certified payroll records shall be accompanied by a statement of compliance signed by the contractor indicating that the payroll records are correct and complete, and the wage rates contained therein are not less than those determined by the Director of the Department of Industrial Relations, and that the classifications set forth for each employee conform with the work performed by each employee.

The certified payroll records submitted pursuant to this section shall be on forms provided by the Division of Labor Standards Enforcement (A-1-131) or shall contain the same information. Forms missing any information as required on DLSE form (A-1-131) may be determined inadequate and subject to withholding under section 1771.5 (b)(5) and 516435 (d) of Title 8 of the California Code of Regulations, and as further described in section 6 (B) of this manual. Employer payments (fringe benefits) when taken as a credit against the prevailing per diem wages shall be identified on form PW26 and submitted with the first certified payroll report and any subsequent certified payroll report where wages or employer payments have changed.

Time cards, front and back copies of cancelled checks, daily logs, employee sign-in sheets and/or other records maintained for the purpose of reporting payroll may be requested by the LCP at any time and shall be provided within 10 days following the receipt of the request.

2. Use of Electronic Reporting Forms
The certified payroll records required by Labor Code Section 1776 may be maintained and submitted electronically subject to all of the following conditions:
(a) The reports must contain all of the information required by Labor Code Section 1776, with the 6 information organized in a manner that is similar or identical to how the information is reported on the Department of Industrial Relations' suggested "Public Works Payroll Reporting Form" (Form A-1-131); (b) The reports shall be in a format and use software that is readily accessible and available to contractors, awarding bodies, Labor Compliance Programs, and the Department of Industrial Relations; (C) Reports submitted to the OCWD, the Division of Labor Standards Enforcement, or other entity within the Department of Industrial Relations must be either (1) in the form of a non-modifiable image or record that bears an electronic signature or includes a copy of any original certification made on paper, or alternatively (2) printed out and submitted on paper with an original signature; (d) The requirements for redacting certain information shall be followed when certified payroll records are disclosed to the public pursuant to Labor Code Section 1776(e), whether the records are provided electronically or as hard copies; and
(e) No contractor or subcontractor shall be mandated to submit or receive electronic reports when it • otherwise lacks the resources or capacity to do so, nor shall any contractor or subcontractor be required to purchase or use proprietary software that is not generally available to the public.

3. Review Payroll Records
Payroll records submitted by contractors and subcontractors, shall be reviewed by the OCWD's LCP staff as promptly as practicable after receipt thereof, but in no event more than (30) days after receipt. "Review" for this purpose shall be defined as inspection of the records to determine if (1) all appropriate data elements identified in Labor Code $1776 (a) have been reported; (2) certification forms have been completed and signed in compliance with Labor Code $1776 (b); and (3) the correct prevailing wage rates have been reported as paid for each classification of labor listed thereon, with confirmation of payment in the manner and to the extent described below.

4. Confirmation of Payroll Records
Pursuant to California Code of Regulations 16432(c), "confirmation" of payroll records furnished by contractors and subcontractors shall be defined as an independent corroboration of reported prevailing wage payments. Confirmation may be accomplished through worker interviews, examination of paychecks or paycheck stubs, direct confirmation of payments from third party recipients of "Employer Payments" (as defined at section 16000 of Title 8 of the California Code of Regulations), or any other reasonable method of corroboration. For each month in which a contractor or subcontractor reports having workers employed on the public work, confirmation of furnished payroll records shall be undertaken randomly for at least one worker for at least one weekly period within that month.

Confirmation shall also be undertaken whenever complaints from workers or other interested persons or other circumstances or information reasonably suggest to the Labor Compliance Program that payroll records furnished by a contractor or subcontractor are inaccurate.

5. On-Site Visits
Representatives of the LCP shall conduct in-person inspections at the site or sites at which the contract for public work is being performed ("On-Site Visits"). On-Site Visits may be undertaken randomly or as deemed necessary by the Labor Compliance Program, but shall be undertaken during each week that 7 workers are present at sites at which the contract for public work is being performed. All On-Site Visits shall include visual inspection of (1) the copy of the determination(s) of the Director of Industrial Relations of the prevailing wage rate of per diem wages required to be posted at each job site in compliance with Labor Code Section 1773.2, and (2) the Notice of Labor Compliance Program Approval required to be posted at the job site in accordance with California Code of Regulations §16429, listing a telephone number to call for inquiries, questions, or assistance with regard to the LCP. On-Site Visits may include other activities deemed necessary by the LCP to independently corroborate prevailing wage payments reported on payroll records furnished by contractors and subcontractors.

6. Full Accountability
Each individual, laborer or craftsperson working on a public works contract must appear on the payroll.

The basic concept is that the employer who pays the trades' worker must report that individual on its payroll. This includes individuals working as apprentices in an apprenticeable trade. Owner-operators are to be reported by the contractor employing them; rental equipment operators are to be reported by the rental company paying the workers' wages. Sole owners and partners who work on a contract must also submit a certified payroll record listing the days and hours worked, and the trade classification descriptive of the work actually done. The contractor shall make the records required under this section available for inspection by an authorized representative of the LCP and the Department of Industrial Relations, and shall permit such representatives to interview trades workers during hours on the project site.

7. Responsibility for Subcontractors
The contractor shall be responsible for ensuring adherence to labor standards provisions by its subcontractors in the manner specified by Labor Code Section 1775 a. The contractor shall monitor the payment of the specified general prevailing per diem wages by each subcontractor to its employees by weekly review of the subcontractor's certified payroll records. b. Upon becoming aware of a subcontractor's failure to pay the specified prevailing rate of wages, the contractor shall diligently take corrective action to halt or rectify the failure, including, but not limited to, retaining sufficient funds due the subcontractor for work performed on the public works project (upon receipt of notification that a wage complaint has been resolved, the contractor shall pay any money retained from and owed to a subcontractor).
c. Prior to making final payment to the subcontractor for work performed on the public works project, the contractor shall obtain an affidavit signed under penalty of perjury from the subcontractor that the subcontractor has paid the general prevailing rate of per diem wages to its employees on the public works project, as well as any penalties, which have been imposed for working hours violations (Labor Code 51813).

8. Payment to Employees
a. Employees must be paid unconditionally, and not less often than once each week, the full amounts that are due and payable for the period covered by the particular payday. An employer must, therefore, establish a fixed workweek (i.e., Sunday through Saturday) and an established payday (such as Friday or 8 the preceding day should such payday fall on a holiday). On each and every payday, each worker must be paid all sums due as of the end of the preceding workweek and must be provided with an itemized wage statement.
b. If an individual is called a subcontractor, when, in fact, he/she is merely a journey level mechanic supplying only his/her labor, such an individual would not be deemed a bona fide subcontractor and must be reported on the payroll of the contractor who contracted for his or her services as a trade's worker.
c. Moreover, any person who does not hold a valid contractor's license cannot be a subcontractor, and anyone hired by that person is the worker or employee of the contractor who contracted for his or her services for purposes of prevailing wage requirements, certified payroll & workers compensation laws. d. A worker's rate for straight time hours must be equal to or exceed the rate specified in the contract by reference to the Prevailing Wage Rate Determinations for the class of work actually performed. Any work performed on Saturday, Sunday, and/or a holiday, or a portion thereof, must be paid the prevailing rate established for those days regardless of the fixed workweek. The hourly rate for hours worked in excess of 8 hours in a day or 40 hours in a workweek shall be premium pay. All work performed in excess of eight hours per day, 40 hours per week, on Saturday, on Sunday, and on holiday shall be paid in accordance with the applicable Prevailing Wage Determination.

9. Requests for Certified Payroll Records
Pursuant to California Code of Regulations §16400:
(a) Requests may be made by any person for certified copies of payroll records. Requests shall be made to any of the following:
(1) the body awarding the contract, or
(2) any office of the Division of Labor Standards Enforcement, or the Division of Apprenticeship 8Standards.
(b) Requests for certified copies of payroll records pursuant to Section 1776 of the Labor Code may be made by any person. However, any such request shall be in writing and contain at least the following information:
(1) The body awarding the contract;
(2) The contract number and/or description;
(3) The particular job location if more than one;
(4) The name of the contractor;
(5) The regular business address, if known.

NOTE: Requests for records of more than one contractor of subcontractor must list the information regarding that contractor individually, even if all requests pertain to the same particular public works project. Blanket requests covering an entire public works project will not be accepted; unless contractor and subcontractor responsibilities regarding the project are not clearly defined. (c) Acknowledgment of Request. The public entity receiving a request for payroll records shall acknowledge receipt of such, and indicate the cost of providing the payroll records based on an estimate by the contractor, subcontractor or public entity. The acknowledgment of the receipt of said 9 request for payroll records may be accomplished by the public entity's furnishing a copy of its written correspondence requesting certified copies of the payroll records sent to the specific contractor pursuant to Section 16400(d) below, to the person who requested said records. (d) Request to Contractor. The request for copies of payroll records by the requesting public entity shall be in any form and/or method which will assure and evidence receipt thereof. The request shall include the following:
(1) Specify the records to be provided and the form upon which the information is to be provided;
(2) Conspicuous notice of the following:
(A) that the person certifying the copies of the payroll records is, if not the contractor, considered as an agent acting on behalf of the contractor; and (B) that failure to provide certified copies of the records to the requesting public entity within 10 working days of the receipt of the request will subject the contractor to a penalty of twenty-five ($25.00) dollars per calendar day or portion thereof for each worker until strict compliance is effectuated;
(3) Cost of preparation as provided in Section 16402; and (4) Provide for inspection.
(e) Inspection of Payroll Records. Inspection of the original payroll records at the office of the contractor(s) pursuant to subdivision (b) of Section 1776 of the Labor Code shall be limited to the public entities upon reasonable written or oral notice.

Pursuant to California Code of Regulations $16402: the cost of preparation to each contractor, subcontractor, or public entity when the request was made shall be provided in advance by the person seeking the payroll record. Such cost shall be $1 for the first page of the payroll record and 25 cents for each page thereafter, plus $10 to the contractor or subcontractor for handling costs. Payment in the form of cash, check or certified money order shall be made prior to release of the documents to cover the actual costs of preparation.

Pursuant to California Code of Regulations §16403 (Privacy Considerations):
(a) Records received from the employing contractor shall be kept on file in the office or entity that processed the request for at least 6 months following completion and acceptance of the project.

Thereafter, they may be destroyed unless administrative, judicial or other pending litigation, including arbitration, mediation or other methods of dispute resolution, are in process. Copies on file shall not be obliterated in the manner prescribed in subdivision (b) below; (b) copies provided to the public upon written request shall be marked, obliterated or provided in such a manner that the name, address and Social Security number, and other private information pertaining to each employee cannot be identified. All other information including identification of the contractor shall not be obliterated;
(c) the public entity may affirm or deny that a person(s) was or is employed on a public works contract (by a specific contractor) when asked, so long as the entity requires such information of an identifying nature which will reasonably preclude release of private or confidential information. 10 B. Apprentices
Apprentices shall be permitted to work as such only when they are registered, individually, under a bona fide apprenticeship program registered and approved by the State Division of Apprenticeship Standards. The allowable ratio of apprentices to journeypersons in any craft/classification shall not be greater than the ratio permitted to the contractor as to its entire workforce under the registered program. Any worker listed on a payroll at an apprentice wage rate who is not registered shall be paid the journey level wage rate determined by the Department of Industrial Relations for the classification of the work he/she actually performed. A journey level worker must always be present at the job site where an apprentice is performing the work of his craft. Pre-apprentice trainees, trainees in non-apprenticeable crafts, and others who are not duly registered will not be permitted on public works projects unless they are paid full prevailing wage rates as journeypersons.

1. Contractor Responsibility
The contractor shall furnish written evidence of the registration (i.e., Apprenticeship Agreement or Statement of Registration) of its training program and apprentices, as well as the ratios allowed and the wage rates required to be paid there under for the area of construction, prior to using any apprentices in the contract work.

Compliance with California Labor Code § 1777.5 require all public works contractors and subcontractors to do the following when apprenticeable crafts are employed on the project:
a. Prior to commencing work on a contract for public works, every contractor shall submit Contract Award Information to an applicable apprenticeship program that can supply apprentices to the site of the public work. The form DAS 140 can be used for this purpose. b. Employ apprentices on public works projects in a ratio to journeypersons as stipulated in the apprenticeship standards under which each apprenticeship committee operates, but in no case shail the ratio be less than one (1) apprentice to each five (5) journeypersons unless a lower/higher ratio is allowed via exemption for a particular craft;
c. Contribute to the training fund in the amount identified in the prevailing wage rate publication for journeypersons and apprentices. Where the trust fund administrators cannot accept the contributions, then payment shall be made to the California Apprenticeship Council, Post Office Box 420603, San Francisco, CA 94142; and
d. It should be noted that a prior approval for a specified project does not confirm approval to train on any other project. The contractor/subcontractor must check with the applicable Joint Apprenticeship Committee to verify status.

2. Duties of a Labor Compliance Program with Respect to Apprenticeship Standards a. The OCWD's LCP staff shall:

1. Inform contractors and subcontractors bidding public works of the apprenticeship requirements defined in Labor Code 1777.5 and CCR 230, 230.1;
11 2. Send copies of awards and notices of discrepancies to the Division of Apprenticeship Standards as required under Section 1773.3 of the Labor Code, and

3. Refer complaints and promptly report suspected violations of apprenticeship requirements to the Division of Apprenticeship Standards.
b. The OCWD's LCP staff shall be responsible for enforcing prevailing wage pay requirements for apprentices consistent with the practice of the Labor Commissioner, including:

1. That any contributions required pursuant to Labor Code Section 1777.5(m) are paid to the appropriate entity,

2. That apprentices are paid no less than the prevailing apprentice rate,

3. That workers listed and paid as apprentices on the certified payroll records are duly registered as apprentices with the Division of Apprenticeship Standards, and

4. Requiring that the regular prevailing wage rate be paid (i) to any worker who is not a duly registered apprentice and (ii) for all hours in excess of the maximum ratio permitted under Labor Code Section 1777.5(g), as determined at the conclusion of the employing contractor or subcontractor's work on the public works contract.

C. Audit of Certified Payroll Records

1. An Audit, as defined herein, shall be prepared by the OCWD's LCP staff whenever the LCP has determined that there has been a violation of the Public Works Chapter of the Labor Code resulting in the underpayment of wages. An "Audit" for this purpose shall be defined as a written summary reflecting prevailing wage deficiencies for each underpaid worker, and including any penalties to be assessed under Labor Code Sections 1775 and 1813, as determined by the LCP after consideration of the best information available as to actual hours worked, amounts paid, and classifications of workers employed in connection with the public work. Such available information may include, but is not limited to, worker interviews, complaints from workers or other interested persons, all time cards, cancelled checks, cash receipts, trust fund forms, books, documents, schedules, forms, reports, receipts or other evidences which reflect job assignments, work schedules by days and hours, and the disbursement by way of cash, check, or in whatever form or manner, of funds to a person(s) by job classification and/or skill pursuant to a public works project.

An Audit is sufficiently detailed when it enables the Labor Commissioner, if requested to determine the amount of forfeiture under section 16437, to draw reasonable conclusions as to compliance with the requirements of the Public Works Chapter of the Labor Code, and to enable accurate computation of underpayments of wages to workers and of applicable penalties and forfeitures. An Audit using the forms in Appendix B, when accompanied by a brief narrative identifying the Bid Advertisement Date of the contract •for public work and summarizing the nature of the violation and the basis upon which the determination of underpayment was made, presumptively demonstrates sufficiency. Records supporting an Audit shall be maintained by the OCWD's LCP to satisfy its burden of coming forward with evidence in administrative review proceedings under Labor Code Section 1742 and the Prevailing Wage Hearing Regulations found at sections 17201-17270 of Title 8 of the California Code of Regulations.

2. After the LCP has determined that violations of the prevailing wage laws have resulted in the underpayment of wages and an audit has been prepared, notification shall be provided to the contractor and affected subcontractor of an opportunity to resolve the wage deficiency prior to a determination of the amount of forfeiture by the Labor Commissioner pursuant to these regulations. The contractor and affected subcontractor shall be provided at least 10 days following such notification to submit exculpatory information consistent with the "good faith mistake" factors set forth in Labor Code Section 1775(a)(2)(A)(i) 12 and (ii). If, based upon the contractor's submission, the LCP reasonably concludes that the failure to pay the correct wages was a good faith mistake, and has no knowledge that the contractor and affected subcontractor have a prior record of failing to meet their prevailing wage obligations, the LCP shall not be required to request the Labor Commissioner for a determination of the amount of penalties to be assessed under Labor Code Section 1775 if the underpayment of wages to workers is promptly corrected and proof of such payment is submitted to the LCP. For each instance in which a wage deficiency is resolved in accordance with this regulation, the LCP shall maintain a written record of the failure of the contractor or subcontractor to meet its prevailing wage obligation. The record shall identify the public works project, the contractor or affected subcontractor involved, and the gross amount of wages paid to workers to resolve the prevailing wage deficiency; and the record shall also include a copy of the Audit prepared pursuant to subpart (e) above along with any exculpatory information submitted to the Labor Compliance Program by the affected contractor or subcontractor.

SECTION 5: REPORTING OF WILLFUL VIOLATIONS TO THE LABOR COMMISSIONER If an investigation reveals that a willful violation of the Labor Code has occurred, the LCP will make a written report to the Labor Commissioner which shall include:

1. A detailed report which shall accurately describe the nature of the alleged violation and a description of the evidence which supports said allegations;

2. An audit consisting of a comparison of payroll records to the best available information as to the actual hours worked and wages paid;

3. The classification of workers employed on the public works contract, and any other additional investigative information as may be required to clarify the audit. Reports will be submitted on all appropriate willful violations including intent to defraud and deliberate failure or refusal to comply with public works law. All reports will include a recommendation regarding the appropriateness of debarment. Principal areas of concern include, but are not limited to, the following:

A. Failure to Comply with Prevailing Wage Rate Requirements Failure to comply with prevailing wage rate requirements (as set forth in the Labor Code and OCWD contracts) may be determined a willful violation whenever less than the stipulated basic hourly rate is paid to trades workers, or if overtime, holiday rates, fringe benefits, and/or employer payments are paid at a rate less than stipulated. The facts related to such willful violations may result in a determination that the contractor intended to defraud its employees of their wages.

B. Falsification of Payroll Records, Misclassification of Work, and/or Failure to Accurately Report Hours of Work
Falsification of payroll records and failure to accurately report hours of work is characterized by deliberate underreporting of hours of work; underreporting the headcount; stating that the proper prevailing wage rate was paid when, in fact, it was not; clearly misclassifying the work performed by the worker; and any other deliberate and/or willful act which results in the falsification or inaccurate reporting of payroll records. Such violations are deemed to be willful violations committed with the intent to defraud.

C. Failure to Submit Certified Payroll Records
13 The contractors and subcontractors shall have 10 days upon notification of the LCP representative in which to comply with the requirement for submittal of weekly payroll records that are complete and accurate. Failure to provide certified payroll records as prescribed, will result in the withholding of contract payments pursuant to labor code §1771.5 (b)(5) and §16435 (d) of Title 8 of the California Code of Regulations and as further described in Section 6 (B) of this manual.

D. Failure to Make Employer Payments
Employer payments are defined as the amounts stipulated for fringe benefits or trust fund contributions and are determined to be part of the required prevailing wage rate. Failure to make employer payments or provide fringe benefits and/or make trust fund contributions in a timely manner is equivalent to payment of less than the stipulated wage rate and shall be reported to the Labor Commissioner, upon completion of an investigation and audit.

E. Failure to Pay the Correct Apprentice Rates and/or Misclassification of Workers as Apprentices Failure to pay the correct apprentice rate or classifying a worker as an apprentice when not properly registered is equivalent to payment of less than the stipulated wage rate and shall be reported to the Labor Commissioner, as a willful violation, upon completion of an investigation and audit.

F. Taking or Receiving Portions of Wages of Workmen or Working Subcontractors as Felony Every person, who individually or as a representative of the OCWD, or as a contractor or subcontractor doing public work, or agent or officer thereof, who takes, receives or conspires with another to take or receive, for his own use or the use of any other person any portion of the wages of any workman or working subcontractor, in connection with services rendered upon any public work is guilty of a felony.

SECTION 6: ENFORCEMENT ACTION
A. Duty of the Labor Compliance Program
Pursuant to California Code of Regulations $16434, Duties of Labor Compliance Program:
(a) A Labor Compliance Program shall have a duty to the Director to enforce the requirements of Chapter 1 of Part 7 of Division 2 of the Labor Code and these regulations in a manner consistent with the practice of the Labor Commissioner. It is the practice of the Labor Commissioner to refer to the Director's ongoing advisory service of web-posted public works coverage determinations as a source of information and guidance in making enforcement decisions. It is also the practice of the Labor Commissioner to be represented by an attorney in prevailing wage hearings conducted pursuant to Labor Code Section 1742(b) and sections 17201-17270 of Title 8 of the California Code of Regulations. (b) Upon receipt of a written complaint alleging that a contractor or subcontractor has failed to pay prevailing wages as required by the Labor Code, the Labor Compliance Program shall do all of the following:
(1) Within 15 days after receipt of the complaint, send a written acknowledgment to the complaining party that the complaint has been received and identifying the name, address, and telephone 14 number of the investigator assigned to the complaint; (2) Within 15 days after receipt of the complaint, provide the affected contractor with the notice required under Labor Code section 1775(c) if the complaint is against a subcontractor; (3) Notify the complaining party in writing of the resolution of the complaint within ten days after the complaint has been resolved by the Labor Compliance Program; (4) Notify the complaining party in writing at least once every 30 days of the status of a complaint that has not been resolved by the Labor Compliance Program; and (5) Notify the complaining party in writing at least once every 90 days of the status of a complaint that has been resolved by the Labor Compliance Program but remains under review or in litigation before another entity.
(c) The duties of a Labor Compliance Program with respect to apprenticeship standards are as follows:
(1) Either the OCWD or the Labor Compliance Program acting on its behalf shall (A) inform contractors and subcontractors bidding public works about apprenticeship requirements, (B) send copies of awards and notices of discrepancies to the Division of Apprenticeship Standards as required under Section 1773.3 of the Labor Code, and (C) refer complaints and promptly report suspected violations of apprenticeship requirements to the Division of Apprenticeship Standards.
(2) The Labor Compliance Program shall be responsible for enforcing prevailing wage pay requirements for apprentices consistent with the practice of the Labor Commissioner, including:
(A) that any contributions required pursuant to Labor Code Section 1777.5(m) are paid to the appropriate entity, (B) that apprentices are paid no less than the prevailing apprentice rate, (C) that workers listed and paid as apprentices on the certified payroll records are duly registered as apprentices with the Division of Apprenticeship Standards, and (D) requiring that the regular prevailing wage rate be paid (i) to any worker who is not a duly registered apprentice and (ii) for all hours in excess of the maximum ratio permitted under Labor Code Section 1777.5(g), as determined at the conclusion of the employing contractor or subcontractor's work on the public works contract.
(d) For each public work project subject to a Labor Compliance Program's enforcement of prevailing wage requirements, a separate, written summary of labor compliance activities and relevant facts pertaining to that particular project shall be maintained. That summary shall demonstrate that reasonable and sufficient efforts have been made to enforce prevailing wage requirements consistent with the practice of the Labor Commissioner. Appendix C following this section provides a suggested format for tracking and monitoring enforcement activities. Compliance records for a project shall be retained until the later of (1) at least one year after the acceptance of the public work or five years after the cessation of all labor on a public work that has not been accepted, or (2) one year after a final decision or judgment in any litigation under Labor Code Section 1742. For purposes of this section, a written summary or report includes information maintained electronically, provided that the summary or report can be printed out in hard copy form or is in an electronic format that (1) can be transmitted by e-mail or compact disk and (2) would be acceptable for the filing of documents in a federal or state court of record within this state. 15 (e) The Labor Commissioner may provide, sponsor, or endorse training on how to enforce prevailing wage requirements, including but not necessarily limited to the subjects of (1) ascertaining prevailing wage requirements and rates from the Division of Labor Statistics and Research, (2) monitoring and investigation under section 16432 above, (3) enforcement responsibilities under this section and sections 16435-16439 below, and (4) procedural requirements and responsibilities as an enforcing agency under Labor Code sections 1741-1743 and 1771.6 and sections 17201-17270 of Title 8 of the California Code of Regulations.

B. Withholding Contract Payments When Payroll Records are Delinquent or Inadequate

1. "Withhold" means to cease payments by the OCWD, or others who pay on its behalf, or agents, to the contractor. Where the violation is by a subcontractor, the contractor shall be notified of the nature of the violation and reference made to its rights under Labor Code § 1729. A release bond under Civil Code 5 3196 may not be posted for the release of the funds being withheld for the violation of the prevailing wage law.

2. "Contracts" except as otherwise provided by agreement, means only contracts under a single master contract, including a design build contract or contracts entered into as stages of a single project, which may be the subject of withholding pursuant to Labor Code Sections 1720, 1720.2, 1720.3, 1720.4, 1771 and 1771.5;
a. "Delinquent payroll records" means those not submitted on the basis set forth in the OCWD's contract and or the LCP;
b. "Inadequate payroll records" is any one of the following:

1. A record lacking the information required by Labor Code 5 1776;

2. A record which contains all of the required information but which is not certified, or is certified by someone who is not an agent of the contractor or subcontractor;

3. A record remaining uncorrected for one payroll period, after a notice has been given to the contractor or subcontractor of inaccuracies detected by audit or record review; provided, however, prompt orrection will stop any duty to withhold if such inaccuracies do not amount to 1 percent of the entir certified weekly payroll in dollar value and do not affect more than half the persons listed as workers employed on that certified weekly payroll, as defined in Labor Code 5 1776 and § 16401 of Title 8 of the California Code of Regulations.
c. The withholding of contract payments when payroll records are delinquent or inadequate is required by Labor Code §1771.5 (b)(5), and it does not require the prior approval of the Labor Commissioner. The OCWD shall only withhold those payments due or estimated to be due to the contractor or subcontractor whose payroll records are delinquent or inadequate, plus any additional amount that the LCP has reasonable cause to believe may be needed to cover a back wage and penalty assessment against the contractor or subcontractor whose payroll records are delinquent or inadequate; provided that a contractor shall be required in turn to cease all payments to a subcontractor whose payroll records are delinquent or inadequate until the LCP provides notice that the subcontractor has cured the delinquency or deficiency.
d. When contract payments are withheld under this section, the LCP shall provide the contractor and subcontractor, if applicable, with immediate written notice that includes all of the following: (1) a 16 statement that payments are being withheld due to delinquent or inadequate payroll records, and that identifies what records are missing or states why records that have been submitted are deemed inadequate; (2) specifies the amount being withheld; and (3) informs the contractor or subcontractor of the right to request an expedited hearing to review the withholding of contract payments under Labor Code Section 1742, limited to the issue of whether the records are delinquent or inadequate or the LCP has exceeded its authority under this section.
e. No contract payments shall be withheld solely on the basis of delinquent or inadequate payroll records after the required records have been produced.
f. In addition to withholding contract payments based on delinquent or inadequate payroll records, penalties shall be assessed under Labor Code Section 1776(h) for failure to timely comply with a written request for certified payroll records. The assessment of penalties under Labor Code Section 1776(h) does require the prior approval of the Labor Commissioner under section 16436 of the California Code of Regulations.

C. Withholding Contract Payments When, After Investigation, It Is Established That Underpayment or Other Violation Has Occurred.

I. "Withhold" and "contracts" have the same meaning set forth in sections 16435(a) and 16435(b) of these regulations.

2. Where the violation is by a subcontractor, the general contractor shall be notified of the nature of the violation and reference made to its rights under Labor Code Section 1729.

3. "Amount equal to the underpayment" is the total of the following determined by payroll review, audit, or admission of the contractor or subcontractor:
a. The difference between the amounts paid to workers and the correct General Prevailing Wage Rate of Per Diem Wages as defined in Labor Code $1773 and determined to be the prevailing rate due workers in such crafts, classifications or trade in which they were employed. b. The difference between the amounts paid to workers and the correct amounts of employer payments, as defined in Labor Code $1773.1 and determined to be part of the prevailing wage costs of contractors due for employment of workers in such craft, classification, or trade in which they were employed. c. Estimated amounts of "illegal taking of wages"; and
d. Amounts of apprenticeship training contributions paid to neither the program sponsor's training trust nor the California Apprenticeship Council.

The withholding of contract payments when, after investigation, it is established that underpayment or other violations have occurred requires the prior approval of the Labor Commissioner under sections 16436 and 16437 of the California Code of Regulations.

4. Provisions relating to the penalties under Labor Code Sections 1775, 1776, 1777.7, and 1813:
a. Pursuant to Labor Code 51775, the contractor shall, as a penalty to the OCWD, forfeit not more than two hundred dollars ($200.00) for each calendar day, or portion thereof, for each worker paid less than the prevailing wages.
b. Pursuant to Labor Code § 1776(h), the contractor shall, as a penalty to the OCWD, forfeit one hundred dollars ($100) for each calendar day, or portion thereof, for each worker, until strict compliance is effectuated. The assessment of penalties under this section does require the prior approval of the Labor Commissioner under §16436 of Title 8 of the California Code of Regulations. c. Pursuant to Labor Code $ 1777.5, contractors and subcontractors are required to employ registered apprentices on public works projects. Each contractor and subcontractor shall keep an accurate payroll record relative to apprentices per 91776 of the Labor Code. d. In situations involving overtime, the contractor shall, as an additional penalty to the OCWD forfeit twenty- five dollars ($25) for each worker employed in the execution of the contract by the contractor or by any subcontractor for each calendar day during which such worker is required or permitted to work more than 8 hours in any one calendar day and 40 hours in any one calendar week in violation of the provisions of 51813 of the Labor Code.

D. Forfeitures Requiring Approval by the Labor Commissioner

1. For the purposes of this section and 516437 below, "forfeitures" means the amount of wages, penalties and forfeitures assessed by the Labor Commissioner and proposed to be withheld pursuant to Labor Code §1771.6(a), and includes the following: (1) the difference between the prevailing wage rates and the amount paid to each worker for each calendar day or portion thereof for which each worker was paid less than the prevailing wage rate by the contractor; and (2) penalties assessed under Labor Code 51775, 1776 and 1813.

2. If the aggregate amount of forfeitures assessed as to a contractor or subcontractor is less than $1,000.00, the forfeiture shall be deemed approved by the Labor Commissioner upon service and the Labor Commissioner's receipt of copies of the following: (1) The Notice of Withholding of Contract Payments authorized by Labor Code §1771.6(a); (2) an audit as defined is $16432(e) of the California Code of Regulations, and (3) a brief narrative identifying the Bid Advertisement Date of the contract for public work and summarizing the nature of the violation, the basis of the underpayment, and the factors considered in determining the assessment of penalties, if any, under Labor Code $1775.

3. For all other forfeitures, approval by the Labor Commissioner shall be requested and obtained in accordance with $16437 of the California Code of Regulations.

E. Determination of Amount of Forfeiture by the Labor Commissioner (Title 8 CCR $16437)

1. Where the Labor Compliance Program requests a determination of the amount of forfeiture, the request (included as an appendix to this manual) shall include a file or report to the Labor Commissioner which contains at least the information: specified in subparts (a) through (i) below. 18 a. Whether the public work has been accepted by the OCWD and whether a valid notice of completion has been filed, the dates if any when those occurred, and the amount of funds being held in retention by the OCWD;
b. Any other deadline which, if missed, would impede collection; c. Evidence of violation in narrative form;
d. Evidence of violation obtained under 516432 of the California Code of Regulations and a copy of the audit prepared in accordance with $16432(e) setting forth the amount of unpaid wages and applicable penalties;
e. Evidence that before the forfeiture was sent to the Labor Commissioner (1) the contractor and subcontractor were given the opportunity to explain why there was no violation, or that any violation was caused by good faith mistake and promptly corrected when brought to the contractors or subcontractors attention, and (2) the contractor and subcontractor either did not do so or failed to convince the LCP of its position.
f. Where the LCP seeks not only wages but also a penalty as part of the forfeiture, and the contractor or subcontractor has unsuccessfully contended that the cause of violation was a good faith mistake that was promptly corrected when brought to the contractors or subcontractors attention, a statement should accompany the proposal for a forfeiture with a recommended penalty amount, pursuant to Labor Code § 1775(a);
g. Where the LCP seeks only wages or a penalty less than $50 per day as part of the forfeiture because the contractor or subcontractor has successfully contended that the cause of violation was a good faith mistake that was promptly corrected when brought to the contractor or subcontractors attention, the file should include the evidence as to the contractor or subcontractors knowledge of his or her obligation, including the programs communication to the contractor or subcontractor of the obligation in the bid invitation, at the Pre-Job Conference agenda and records, and any other notice given as part of the contracting process. Included with the file should be a statement similar to that described in subsection (f) above and recommended penalty amounts, pursuant to Labor Code § 1775(a); h. The previous record of the contactor and subcontractor in meeting prevailing wage obligations; and i. Whether the Labor Compliance Program has been granted approval on only an interim or temporary basis under §16425 or 16426 of the California Code of Regulations or whether it has been granted extended approval under §16427 of the California Code of Regulations.

2. The file or report shall be served on the Labor Commissioner as soon as practicable after the violation has been discovered, and not less than 30 days before the final payment or, but in no event not less than 30 days before the expiration of the limitations period set forth in Labor Code §1742

3. A copy of the recommended forfeiture and the file or report shall be served on the contractor and subcontractor at the same time as it is sent to the Labor Commissioner. The LCP may exclude from the documents served on the contractor and subcontractor copies of documents secured from the contractor during an audit, investigation, or meeting if those documents are clearly referenced in the file or report 19 4. The Labor Commissioner shall affirm, reject, or modify the forfeiture in whole or in part as to the wages and penalties due.

5. The Labor Commissioner's determination of the forfeiture is effective on one of the two following dates:
a. For all programs other than those having extended authority under $16427 of the California Code of Regulations, on the date the Labor Commissioner serves by first class mail, on the OCWD's LCP, on the contractor and on the subcontractor, if any, an endorsed copy of the proposed forfeiture, or a newly drafted forfeiture statement which sets out the amount of the forfeiture approved. Service on the contractor and subcontractor is effective if made on the last address supplied by the contractor or subcontractor in the record.
b. For programs with extended authority under §16427 of the California Code of regulations, approval is effective 20 days aiter the requested forfeitures are served on the Labor Commissioner, unless the Labor Commissioner services a notice on the parties, within that time period, that this forfeiture request is subject to further review. For such programs, a notice that approval will follow such a procedure will be included in the transmittal of the forfeiture request to the contractor. If the Labor Commissioner notifies the parties of a decision to undertake further review, the Labor Commissioner's final approval, modification or disapproval of the proposed forfeiture shall be served within 30 days of the date of the notice of further review.

E. Notice of Withholding

1. As a matter of enforcing this chapter in accordance with Section 1726 or 1771.5, The OCWD shall provide Notice of the Withholding of Contract Payments (included as an appendix to this manual) to the contractor and subcontractor, if applicable. The notice shall be in writing and shall describe the nature of the violation and the amount of wages, penalties, and forfeitures withheld. Service of the Notice shall be completed pursuant to Section 1013 of the Code of Civil Procedure by first-class and certified mail to the contractor and subcontractor, if applicable. The Notice shall advise the contractor and subcontractor, if applicable, of the procedure for obtaining review of the withholding of contract payments. The OCWD shall also serve a copy of the notice by certified mail to any bonding company issuing a bond that secures the payment of wages covered by the notice and to any surety on a bond, if their identities are known to the OCWD.

2. The withholding of contract payments in accordance with Section 1726 or 1771.5 shall be reviewable under Section 1742 in the same manner as if the Notice of the Withholding was a civil penalty order of the Labor Commissioner under this chapter. If review is requested, the Labor Commissioner may intervene to represent the OCWD.

3. Pending a final order, or the expiration of the time period for seeking review of the Notice of Withholding, the OCWD shall not disburse any contract payments withheld.

4. From the amount recovered, the wage claim shall be satisfied prior to the amount being applied to penalties.

If insufficient money is recovered to pay each worker in full, the money shall be prorated among all workers. 20 5. Wages for workers who cannot be located shall be placed in the Industrial Relations Unpaid Wage Fund and held in trust for the workers pursuant to Section 96.7. Penalties shall be paid into the General Fund of the OCWD that has enforced this chapter pursuant to Section 1771.5.

G. Deposits of Penalties and Forfeitures Withheld

1. Where the involvement of the Labor Commissioner has been limited to a determination of the actual amount of penalty, forfeiture, or underpayment of wages and the matter has been resolved without Litigation by or against the Labor Commissioner, the OCWD shall deposit penalties and forfeitures into its general fund or fund of its choice.

2. Where collection of fines, penalties, or forfeitures results from Administrative proceedings or court action to which the Labor Commissioner and the OCWD are both parties, the fines, penalties, or forfeitures shall be divided between the General Funds of the State and the OCWD, as the court so deems.

3. All penalties recovered in administrative proceedings or court action brought by or against the Labor Commissioner and to which the OCWD's Labor Compliance Program is not a party, shall be deposited in the general fund of the State.

4. All wages and benefits which belong to an employee and are withheld or collected from a contractor or subcontractor, either by withholding or as a result of court action pursuant to Labor Code § 1775, and which have not been paid to the worker or irrevocably committed on the worker's behalf to a benefits fund, shall be deposited with the Labor Commissioner, who will deal with such wages and benefits in accordance with Labor Code §96.7.

H. Debarment Policy
It is the policy of the LCP that the Public Works Prevailing Wage requirements set forth in the California Labor Code, Section 1720-1861, be strictly enforced. In furtherance thereof, construction contractors and subcontractors found to be repeat violators of the California Labor Code shall be referred to the Labor Commissioner for debarment from bidding on or otherwise being awarded any public work contract, within the state of California, for the performance of construction and/or maintenance services for the period not to exceed three (3) years in duration. The duration of the debarment period shall depend upon the nature and severity of the labor code violations and any mitigating and/or aggravating factors, which may be present at the hearing conducted by the Labor Commissioner for such purpose.

SECTION 7: REQUEST FOR REVIEW OF A LABOR COMPLIANCE PROGRAM ENFORCEMENT

ACTION / SETTLEMENT AUTHORITY

1. After 60 days following the service of a civil wage and penalty assessment under Section 1741 or a notice of withholding under subdivision (a) of Section 1771.6, the affected contractor, subcontractor, and surety on a bond or bonds issued to secure the payment of wages covered by the assessment or notice shall be liable for liquidated damages in an amount equal to the wages, or portion thereof, that still remain unpaid. If the assessment or notice subsequently is overturned or modified after administrative or judicial review, liquidated damages shall be payable only on the wages found to be due and unpaid. Additionally, if the contractor or subcontractor demonstrates to the satisfaction of the director that he or she had substantial grounds for appealing the assessment or notice with respect to a portion of the unpaid wages covered by 21 the assessment or notice, the director may exercise his or her discretion to waive payment of the liquidated damages with respect to that portion of the unpaid wages. Any liquidated damages shall be distributed to the employee along with the unpaid wages. Section 203.5 shall not apply to claims for prevailing wages under this chapter. (b) Notwithstanding subdivision (a), there shall be no liability for liquidated damages if the full amount of the assessment or notice, including penalties, has been deposited with the Department of Industrial Relations, within 60 days following service of the assessment or notice, for the Department to hold in escrow pending administrative and judicial review. The department shall release such funds, plus any interest earned, at the conclusion of all administrative and judicial review to the persons and entities who are found to be entitled to such funds.

2. A contractor or subcontractor may request a settlement meeting pursuant to Labor Code $1742.1(b) and may request review of a LCP enforcement action in accordance with Labor Code $1771.6(b) and 1742 and the regulations found at 517201-17270 of Title 8 of the California Code of Regulations. The LCP shall have the rights and responsibilities of the enforcing agency (as defined in § 17202(f) of Title 8 of the California Code of Regulations, in responding to such a Request For Review, including but not limited to the obligations to serve notices, transmit the Request for Review to the hearing officer, and provide an opportunity to review evidence in a timely manner, to participate through counsel in all hearing procedures, and to meet the burden of establishing prima fascia support for the Notice of Withholding of Contract Payments.

3. If a contractor or a subcontractor seeks review of a LCP enforcement action, the Labor Commissioner may intervene to represent the OCWD, or to enforce relevant provisions of the Labor Code consistent with the practices of the Labor Commissioner, or both.

4. Except in cases where the Labor Commissioner has intervened pursuant to section (B) above, the LCP shall have the authority to prosecute, settle, or seek the dismissal of any Notice of Withholding of Contract Payment issued pursuant to Labor Code $1771.6 and any review proceeding under Labor Code $1742, without any further need for approval by the Labor Commissioner. Whenever a LCP settles in whole or in part or seeks and obtains the dismissal of a Notice of Withholding of Contract Payments or a review proceeding under Labor Code 51742, the LCP shall document the reasons for the settlement or request for dismissal and shall make that document available to the Labor Commissioner upon request.

5. For each public work project subject to a LCP's enforcement of prevailing wage requirements, a separate, written summary of labor compliance activities and relevant facts pertaining to that particular project shall be maintained. That summary shall demonstrate that reasonable and sufficient efforts have been made to enforce prevailing wage requirements consistent with the practice of the Labor Commissioner. Appendix C following this section provides a suggested format for tracking and monitoring enforcement activities.

Compliance records for a project shall be retained until the later of (1) at least one year after the acceptance of the public work or five years after the cessation of all labor on a public work that has not been accepted, or (2) one year after a final decision or judgment in any litigation under Labor Code Section 1742. For purposes of this section, a written summary or report includes information maintained electronically, provided that the summary or report can be printed out in hard copy form or is in an electronic format that (1) can be transmitted by e-mail or compact disk and (2) would be acceptable for the filing of documents in a federal or state court of record within this state.

6. The Labor Commissioner may provide, sponsor, or endorse training on how to enforce prevailing wage requirements, including but not necessarily limited to the subjects of (1) ascertaining prevailing wage 22 requirements and rates from the Division of Labor Statistics and Research, (2) monitoring and investigation under section 16432 above, (3) enforcement responsibilities under this section and sections 16435-16439 below, and (4) procedural requirements and responsibilities as an enforcing agency under Labor Code sections 1741-1743 and 1771.6 and sections 17201-17270 of Title 8 of the California Code of Regulations.

SECTION 8: PRIORITY DISTRIBUTION OF FORFEITED SUMS
A. Withholding of Forfeited Sums

1. Before making payments to the contractor of money due under a contract for public work, the OCWD shall withhold and retain there from all amounts required to satisfy any civil wage and penalty assessment issued by the Labor Commissioner. The amounts required to satisfy a civil wage and penalty assessment shall not be disbursed by the OCWD until receipt of a final order that is no longer subject to judicial review.

B. Disposition of Forfeited Sums

1. The prevailing wage recovery process of this LCP is in accordance with Labor Code § 1775, which provides that out of any funds withheld, recovered, or both, there shall first be paid the amount due each worker notwithstanding the filing of any Stop Notice by any person pursuant to Civil Code $ 3179, et seq.

Therefore, all workers employed on a public works project who are paid less than the prevailing wage rate shall have priority over all Stop Notices filed against the contractor.

2. In the event that there are insufficient funds available in the contractor's account to pay the total amounts due, the unpaid prevailing wages shall have priority and must, therefore, be paid first, in accordance with Labor Code § 1775. Furthermore, if insufficient funds are withheld, recovered, or both, to pay each underpaid worker in full, the money shall be prorated among all said underpaid workers; and all penalties shall be deposited in the General Fund of the OCWD.

SECTION 9: ANNUAL REPORTS
Per section 16431 of the California Code of Regulations, the LCP shall submit to the Director of the DIR an annual report on the operation of its LCP no later than August 31 of each year. The reporting period will cover a 12 month period from July 1 of the preceding calendar year and will end on June 30 of the year that the annual report is due. The OCWD's annual report shall be made on form LCP-AR1, which is included herein under Attachment G.

Information in the annual report shall be reported in sufficient detail to afford a basis for evaluating the scope and level of enforcement activity of the LCP. An annual report shall also include such additional information as the LCP may be required to report as a condition of its approval.

Pursuant to California Code of Regulations $16430, the OCWD shall file a Statement of Economic Interest (FPPC Form 700) along with its Annual Report; specifically:
16430(a) An OCWD that operates either its own labor compliance program or that contracts with a third party to operate all or part of its labor compliance program shall determine and designate those employees and consultants of the program who participate in making governmental decisions for the OCWD within the 23 meaning of Title 2, California Code of Regulations, sections 18700 - 18702.4. Those designated employees and consultants shall be required to file Statements of Economic Interest (FPPC Form 700) and to comply with other applicable requirements of the Political Reform Act (commencing with Section 87100 of the Government Code) in connection with work performed on behalf of the OCWD. 16430(b): Designated employees and consultants who operate or are employed by a third party labor compliance program shall file their Statements of Economic Interest (FPPC Form 700) with the filing officer of each OCWD with which the third party program contracts, unless the Department of Industrial Relations or the Fair Political Practices Commission specifies a different or alternative filing location.

SECTION 10: OUTREACH ACTIVITIES
To ensure the successful implementation of this Labor Compliance Program, there shall be several outreach activities initiated and maintained. The LCP Administrator shall be responsible for communication and outreach activities relative to public information on the Labor Compliance Program:

1. Regular presentations to contractors at all job walk meetings (pre-bid conferences) and job start meetings (pre-job conferences);

2. Ongoing communication via correspondence and with workers at job sites when review of the CPR's reveals the possibility of prevailing wage violations.

3. Periodic meetings with contractor and labor organizations, prime contractors and subcontractors or work preservation volunteers interested in public works contracting. 24 ATTACHMENTS
This section contains the attachments applicable to the OCWD's Labor Compliance Program 25 ATTACHMENT A - CHECKLIST OF LABOR LAW REQUIREMENTS

FOR REVIEW AT PER-JOB CONFERENCE
(In accordance with CCR § 16421)
The federal and state labor law requirements applicable to the contract are composed of, but not limited to, the following:

1. Payment of Prevailing Wage Rates
The award of a public works contract requires that all workers employed on the project be paid not less than the specified general prevailing wage rates by the contractor and its subcontractors, unless subject to exemption per Labor Code § 1771.5. Should a contract exceed exemption amounts, the contractor and its subcontractors are required to pay not less than the specified general prevailing wage rates.

The contractor is responsible for obtaining and complying with all applicable general prevailing wage rates for trades workers and any rate changes, which may occur during the term of the contract. Prevailing wage rates and rate changes are to be posted at the job site for workers to view.

2. Apprentices
It is the duty of the contractor and subcontractor to employ registered apprentices on public works projects per Labor Code 5 1777.5.

3. Penalties
Penalties, included forfeitures, and debarment, shall be imposed for contractor/subcontractor failure to pay prevailing wages (for nonexempt projects), failure to maintain and submit accurate certified payroll records upon request, failure to employ apprentices, and for failure to pay. employees for all hours worked at the correct prevailing wage rate, in accordance with Labor Code 9§ 1775, 1776, 1777.7, and 1813.

4. Certified Payroll Records
Per Labor Code § 1776, contractors and subcontractors are required to keep accurate payroll records which reflect the name, address, social security number, and work classification of each employee; the straight time and overtime hours worked each day and each week; the fringe benetits; and the actual per diem wages paid to each journeyperson, apprentice, worker, or other employee hired in connection with a public works project. Employee payroll records shall be certified and shall be made avallable for inspection at all reasonable hours at the principal office of the contractor/subcontractor, or shall be furnished to any employee, or to his or her authorized representative on request.

Contractors and subcontractors shall maintain their certified payrolls on a weekly basis and shall submit said payrolls to the Labor Compliance office on a weekly basis. In the event that there has been no work performed during a given week, the Certified Payroll Record shall be annotated "No Work" for that week and the final payroll for each contractor and subcontractor shall be identified in bold markings as "Final Project Payroll".

5. Nondiscrimination in Employment
Prohibitions against employment discrimination are contained in Labor Code Sections 1735 and 1777.6; the Government Code; the Public Contracts Code; and Title VIl of the Civil Rights Act of 1964, as amended. All contractors and subcontractors are required to implement equal employment opportunity practices for women and ethnic groups as delineated below:
a. Equal Employment Poster
The equal employment poster shall be posted at the job site in a conspicuous place visible to employees and employment applicants for the duration of the project b. The contractor and each subcontractor shall maintain accurate records of employment information as required by the Monthly Employment Utilization Report. This report shall specify the ethnicity and gender for each employee in a craft, trade, or classification. c. Further, efforts should be made to employ apprentices on public works contracts per Labor Code $1777.5 efforts to employ apprentices should also be documented.

6. Kickback Prohibited
Per Labor Code § 1778, contractors and subcontractors are prohibited from accepting, taking wages illegally, or extracting "kickback" from employee wages;
26 7. Acceptance of Fees Prohibited
Contractors and subcontractors are prohibited from exacting any type of fee for registering individuals for public work (Labor Code § 1779); or for filing work orders on public works contracts (Labor Code $ 1780).

8. Listing of Subcontractors
Contractors are required to list all subcontractors hired to perform work on a public works project when that work is equivalent to more than one-half of one percent of the total effort (Government Code § 4100, et seg.):

9. Proper Licensing
Contractors and subcontractors are required to be properly licensed. Penalties will be imposed for employing workers while unlicensed (Labor Code § 1021 and Business and Professions Code § 7000, et seq. under California Contractors License Law);

10. Unfair Competition Prohibited
Contractors and subcontractors are prohibited from engaging in unfair competition (Business and Professions Code 95 17200-17208);

11. Workers' Compensation Insurance
All contractors and subcontractors are required to be Insured against liability for workers' compensation, or to undertake self-insurance in accordance with the provisions of Labor Code § 3700 (Labor Code § 1861);

12. OSHA
Contractors and subcontractors are required to comply with the Occupational, Safety and Health laws and regulations applicable to the particular public works project; and

13. Undocumented Workers
The Federal prohibition against hiring undocumented workers, and the requirement to secure proof of eligibility/citizenship from all workers.

14. Itemized Wage Statements
Every employer shall, semimonthly or at the time of each payment of wages, furnish each of his or her employees, either as a detachable part of the check, draft or voucher paying the employee's wages, or separately when wages are paid by personal check or cash, an accurate itemized statement as per 5226 of the state labor code.

I acknowledge that I have been informed and am aware of the foregoing requirements and that I am authorized to make this certification on behalf of _(contractor)
For the Contractor: Forthe OCWD's Labor Compliance Administrator Signature Signature
какт
Date Date

ATTACHMENT B - COMPLIANCE MONITORING & AUDIT RECORD WORKSHEETS Audit Record Worksheets [8 Cal. Code Reg. §16432]
• Public Works Investigation Worksheet
• Public Works Audit Worksheet
• Prevailing Wage Determination Summary
• Suggested Single Project Labor Compliance Review and Enforcement Report Form [Appendix C following 8 CCR §16434]
28 DEPT. OF INDUSTRIAL RELATIONS - DIVISION OF LABOR STANDARDS ENFORCEMENT PUBLIC WORKS INVESTIGATION WORKSHEET

EMPLOYEES HASE SOCHL SECURITY NUWBER DEPUTY
OFFICE DATE Employer
Casa Number
PERIOD HOURS OF WORK _TOTAL • TOTAL OTHER
Classification Code ACTUAL RATE TOTAL WAGES Roquired
FENDING - The Wed -Tue kon Sund Sal FriDAYS PENAL- TOTAL HOURS (ST COMPEN- PAID Wage
YEAR DATE DATE DATE DATE (DATE DATE DATE /WORK- TES TRAWING Amount Due WORKED OT SATION [Rates
1813_ FUND land Cuing
ink end STOPT OT
SOLDE
Rate
Rate
Rate
Rate
Rate
Rate
29 Rate
Rate
Rate
Rate
Rate
Rate
Rate
ST hours worked
OT hours worked
DT hours worked
TOTALS
Page No...

PUBLIC WORKS AUDIT WORKSHEET

TOTAL AMOUNT DUE/OWING

EMPLOYER/FIRM DEPUTY
OFFICE

WAGES DUE AND OWING

ADDRESS CTTY TRANSCRIBER

PENALTIES DUE AND OWING

PROJECT AWARDING BODY PRIME AUDIT NUMBER/CASE NUMBER

TRAINING FUND DUE/OWING
[PERIOO HOURS WORKED
EMPLOYEE LASSICATION WORKED PREVAILNG WAGE REQUIREMENTS AMOUNT OWING PENALTIES (PENALTIES TRNG. TOTAL Isr. WAGES PAID I WAGES PAD TOTAL WAGES

AND UNPAID /FUND AMOUNT DUE
The following entries represent the amounts rebed upon for calculating Labor Code 1775 and 1813 penalties.
1775| Per Day
1813 1 Per Day
Summary Page 1

PREVAILING WAGE DETERMINATION SUMMARY

CODE HOURLY WAGE DETERMINATION INFORMATION
HOLIDAY / TRAVEL & Other hourty CODE
NO. CLASSIFICATION Effective Date RATE Contributions TRAINING TIME 1/2 SUNDAY SUBSISTENCE Regulrements NO.

CLASSIFICATION WAGE DETERMINATION NO.
11 2
3 4
8 10/
11 12
• 31
10 12
Summary Page 2
Suggested Single Project Labor Compliance Review and Enforcement Report Form [Appendix C following 8 CCR §16434]
OCWD:

Project Name:

Name of Approved Labor Compliance Program:

Bid Advertisement Date:

Acceptance Date:

Notice of Completion Recordation Date:

Summary of Labor Compliance Activities

1. Contract Documents Containing Prevailing Wage Requirements (Identify)

2. Prejob Conference(s) -- Attach lists) of attendees and dates

3. Notification to Project Workers of Labor Compliance Program's Contact Person. (Explain Manner of Notification for each project work site.)
-

4. Certified Payroll Record Review
a. CPRs Received From:

Contractor/Subcontractor For weeks ending ("w/e") through w/e 32 b. Classifications identified in CPRs and applicable Prevailing Wage Determinations Classification Determination No.

5. Further investigation or audit due to CPR review, information or complaint from worker or other interested person, or other reason:
a. Independent Confirmation of CPR Data
Worker Interviews Reconciled CPRs with Pay-
Contractor/Subcontractor (Yes/No) checks or Stubs (Yes/No) Employer Payments (Health & Welfare, Pension, Vacation/Holiday) Confirmation Recipients of Written confirmation
Contractor/Subcontractor Employer Payments Obtained (Yes/No) c. Contributions to California Apprenticeship Council or Other Approved Apprenticeship Program Recipients of Written confirmation
Contractor/Subcontractor Contributions Obtained (Yes/No) 33 d. Additional Wage Payments or Training Fund Contributions Resulting from Review of CPRs Additional amounts Additional Expla-
Contractor/Subcontractor Paid to Workers Training Fund nation *
*
*
*
* Use separate page(s) for explanation
Complaints Received Alleging Noncompliance with Prevailing Wage Requirements.

Name of Resolution or
Complainant Date Received Current Status
-
-
*
*Use separate page(s) to explain resolution or current status

7. Requests for Approval of Forfeiture to Labor Commissioner Contractor/Subcontractor Date of Request Approved/Modified/Denied

8. Litigation Pending Under Labor Code Section 1742
Contractor/Subcontractor DIR Case Number

9. (Check one): Final report this project _ Annual report this project Authorized Representative for Labor Compliance Program
34 ATTACHMENT C - REQUEST FOR APPROVAL OF FORFEITURE

1. OCWD / THIRD PARTY LCP:

Name and Contact Information for OCWD: Date of Request:

Orange County Water District
c/o Lo Tan
(sal 18700 Ward Street
HERE DIES Fountain Valley, CA 92708
SINCE 1932 LCP Approval Status (specify if either
interim or temporary or if LCP has
extended authority:

PROJECT INFORMATION:

Project Name: Contract Number:

Project Location:

Bid Advertisement Dates: Estimated Date Project is to be completed:

Acceptance Date of Project by the OCWD: Notice of Completion/Date Recorded with County Recorder:

Other Relevant Deadline (specify): Amount being held in Retention:

CONTRACTOR INFORMATION:

Name and address of Affected Contractor: Name and address of Affected Subcontractor:

General Description of Scope of Work of the Entire Project:

General Description of Scope of Work covered in the proposed Forfeiture (describe and attach relevant portions of contract or subcontract):
:
35 4. LABOR COMPLIANCE PROGRAM INVESTIGATION AND FINDINGS:

Total Amount of Request for Notice of Withholding of Contract Payments:

Wages Due: Training Funds | Total Penalties Due: Potential Liquidated Damages Due: [Wages + Training Funds]:

LC 1775 Penalties Due: LC 1813 Penalties LC 1776 Penalties Due: Other:

Due:
[Provide narrative summaries covering the following]:

A. Statement of Issues.

B. Investigative Report (detailed narrative including but not limited to how the investigation was conducted including worker declarations, reviewing certified payroll records, verification of employer payment contributions, etc.).

C. Audit Report (detailed explanation of how audit was completed addressing each of the issues above).

D. Affected contractor and subcontractor information (how affected contractor and subcontractor were informed of potential violations; summary of their response with respect to violations and penalty issues; and any other information considered in determining recommended penalties).

E. Recommended penalties under Labor Code Section 1775(a) and basis for recommendation, including how factors in subsection (a) (2) of Section 1775 were applied to arrive at the recommended amounts).

ATTACHMENTS

1. Audit Summary (Appendix B)

2. 15 Bid Advertisement Publication

3. Notice of Completion

4. Scope of Work

5. Complaint form(s) and Declarations, if any
Send the Request and all Attachments to:

Division of Labor Standards Enforcement
Bureau of Field Enforcement
Attn.: Regional Manager
300 Oceangate Blvd., No. 850
Long Beach, CA 90802

COPIES OF THIS REQUEST, INCLUDING ALL ATTACHMENTS, SHALL BE SERVED ON THE

AFFECTED CONTRACTOR AND AFFECTED SUBCONTRACTOR AT THE SAME TIME THAT IT IS SENT TO THE DIVISION OF LABOR STANDARDS ENFORCEMENT. 36 LABOR COMPLIANCE PROGRAM
Orange County Water District
Review Office - Notice of Withholding MANGE
of Contract Payments
c/o Lo Tan
18700 Ward Street
Fountain Valley, CA 92708 DIST
Phone: (714) 378-3368 SINCE 1933
Fax: (714) 378-3373
Date: In Reply Refer to Case No.:

Notice of Opportunity to Review Evidence Pursuant to Labor Code Section 1742(b) To: Prime Contractor
Subcontractor
Please be advised that this office has received your Request for Review, dated _ and pertaining to the Notice of Withholding of Contract Payments issued by the Labor Compliance Program in Case No.

In accordance with Labor Code section 1742(b), this notice provides you with an opportunity to review evidence to be utilized by the Labor Compliance Program at the hearing on the Request for Review, and the procedures for reviewing such evidence.

Rule 17224 of the Prevailing Wage Hearing Regulations provides as follows:
(a) Within ten (10) days following its receipt of a Request for Review, the Enforcing Agency hall also notify the affected contractor or subcontractor of its opportunity and the procedures fo eviewing evidence to be utilized by the Enforcing Agency at the hearing of the Request fo Review.
37 (b) An Enforcing Agency shall be deemed to have provided the opportunity to review evidence required by this Rule if it (1) gives the affected contractor or subcontractor the option at said party's own expense to either (i) obtain copies of all such evidence through a commercial copying service or (i) inspect and copy such evidence at the office of the Enforcing Agency during normal business hours; or if (2) the Enforcing Agency at its own expense forwards copies of all such evidence to the affected contractor or subcontractor.
(c) The evidence required to be provided under this Rule shall include the identity of witnesses whose testimony the Enforcing Agency intends to present, either in person at the hearing or by declaration or affidavit. This provision shall not be construed as requiring the Enforcing Agency to prepare or provide any separate listing of witnesses whose identities are disclosed within the written materials made available under subpart (a).

Rule, shall preclude the enforcing agency from introducing such evidence in proceedings before the Hearing officer or the Director. (e) This Rule shall not preclude the Enforcing Agency from relying upon or presenting any evidence first obtained after the initial disclosure of evidence under subparts (a) through (d), provided that, such evidence is promptly disclosed to the affected contractor or subcontractor. This Rule also shall not preclude the Enforcing Agency from presenting previously undisclosed evidence to rebut new or collateral claims raised by another party in the proceeding.®
In accordance with the above Rule, please be advised that the Labor Compliance Program's procedure for you to exercise your opportunity to review evidence is as follows:

Within five calendar days of the date of this notice, please transmit the attached Request to Review Evidence to the following address:

Orange County Water District
c/o Lo Tan
18700 Ward Street
Fountain Valley, CA 92708
Phone: (714) 378-3368
Fax: (714) 378-3373
38 Request to Review Evidence
To:

From:

Orange County Water District
18700 Ward Street
Fountain Valley, CA 92708
VITE DISTEN Phone: (714) 378-3368
SINCE 1933 Fax: (714) 378-3373
Regarding Notice of Withholding of Contract Payments Dated Our Case No.:
-
The undersigned hereby requests an opportunity to review evidence to be utilized by the Labor Compliance Program at the hearing on the Request for Review.

Phone No.:

Fax No.:
39 Labor Compliance Program
c/o Lo Tan
18700 Ward Street
Fountain Valley, CA 92708
Phone: (714) 378-3368 SINCE 1933
Date: In Reply Refer to Case No.:

ATTACHMENT D - Notice of Withholding of Contract Payments OCWD Work Performed in County of
Project Name Project No.

Prime Contractor
Subcontractor
Atter an investigation concerning the payment of wages to workers employed in the execution of the contract for the above-named public works project, the Labor Compliance Program for (Labor Compliance Program) has determined that violations of the California Labor Code have been committed by the contractor and/or subcontractor identified above. In accordance with Labor Code sections 1771.5 and 1771.6, the Labor Compliance Program hereby issues this Notice of Withholding of Contract Payments.

The nature of the violations of the Labor Code and the basis for the assessment are as follows:

The Labor Compliance Program has determined that the total amount of wages due is:

The Labor Compliance Program has determined that the total amount of penalties assessed under Labor Code sections 1775 and 1813 is: $_
The Labor Compliance Program has determined that the amount of penalties assessed under Labor Code section 1776 is: $

LABOR COMPLIANCE PROGRAM
-
By:_ -
•
Notice of Right to Obtain Review - Formal Hearing
In accordance with Labor Code sections 1742 and 1771.6, an affected contractor or subcontractor may obtain review of this Notice of Withholding of Contract Payments by transmitting a written request to the office of the Labor Compliance Program that appears below within 60 days after service of the notice. To obtain a hearing, a written Request for Review must be transmitted to the following address:

Labor Compliance Program
Review Office-Notice of Withholding of Contract Payments c/o Lo Tan
18700 Ward Street
Fountain Valley, CA 92708
A Request for Review either shall clearly identify the Notice of Withholding of Contract Payments from which review is sought, including the date of the notice, or it shall include a copy of the notice as an attachment, and shall also set forth the basis upon which the notice is being contested. In accordance with Labor Code section 1742, the contractor or subcontractor shall be provided an opportunity to review evidence to be utilized by the Labor Compliance Program at the hearing within 20 days of the Failure by a contractor or subcontractor to submit a timely Request for Review will result in a final order which shall be binding on the contractor and subcontractor, and which shall also be binding, with respect to the amount due, on a bonding company issuing a bond that secures the payment of wages and a surety on a bond. Labor Code section 1743.

In accordance with Labor Code section 1742(d), a certified copy of a final order may be filed by the Labor Commissioner in the office of the clerk of the superior court in any county in which the affected contractor or subcontractor has property or has or had a place of business. The clerk, immediately upon the filing, shall enter judgment for the State against the person assessed in the amount shown on the certified order.
(continued on next page)
41 Opportunity for Settlement Meeting
In accordance with Labor Code Section 1742.1 (b), the Labor Compliance Program shall, upon receipt of a request from the affected contractor or subcontractor within 30 days following the service of this Notice of Withholding of Contract Payments, afford the contractor or subcontractor the opportunity to meet with the Labor Compliance Program's designee to attempt to settle a dispute regarding the notice. The settlement meeting may be held in person or by telephone and shall take place before the expiration of the 60-day period for seeking a hearing as set forth above under the heading Notice of Right to Obtain Review. No evidence of anything said or any admission made for the purpose of, in the course of, or pursuant to, the settlement meeting is admissible or subject to discovery in any administrative or civil proceeding. No writing prepared for the purpose of, in the course of, or pursuant to, the settlement meeting, other than a final settlement agreement, is admissible or subject to discovery in any administrative or civil proceeding. This opportunity to timely request an informal settlement meeting is in addition to the right to obtain a formal hearing, and a settlement meeting may be requested even if a written Request for Review has already been made. Requesting a settlement meeting, however, does not extend the 60-day period during which a formal hearing may be requested.

A written request to meet with the Labor Compliance Program's designee to attempt to settle a dispute regarding this notice must be transmitted to the contact named below at the following address:

Orange County Water District
c/o Lo Tan
18700 Ward Street
Fountain Valley, CA 92708
Liquidated Damages
In accordance with Labor Code section 1742.1, after 60 days following the service of this Notice of Withholding of Contract Payments, the affected contractor, subcontractor, and surety on a bond or bonds issued to secure the payment of wages covered by the notice shall be liable for liquidated damages in an amount equal to the wages, or portion thereof that still remain unpaid. If the notice subsequently is overturned or modified after administrative or judicial review, liquidated damages shall be payable only on the wages found to be due and unpaid. If the contractor or subcontractor demonstrates to the satisfaction of the Director of the Department of Industrial Relations that he or she had substantial grounds for believing the assessment or notice to be an error, the Director shall waive payment of the liquidated damages.

The Amount of Liquidated Damages Available Under this Notice is S.

Distribution: Attach:

Prime Contractor Audit Summary
Subcontractor Proof of Service
Surety(s) on Bond
42 Orange County Water District
c/o Lo Tan
18700 Ward Street
Fountain Valley, CA 92708
Phone: (714) 378-3368
Fax: (714) 378-3373 HERE DISTE
SINCE 1933
Date: Case or Contract No.:

ATTACHMENT E - NOTICE OF TEMPORARY WITHHOLDING OF CONTRACT PAYMENTS

DUE TO DELINQUENT OR INADEQUATE PAYROLL RECORDS
(8 CCR §16435)
OCWD: Work performed in County of:

Project Name and Number (if any):

Prime Contractor:

Subcontractor:

Pursuant to Labor Code §1771.5(b)(5) and 8 CCR §16435, contract payments are being withheld due to delinquent or inadequate payroll records.

Contractor or subcontractor whose payroll records are delinquent or inadequate:
• The following payroll records are delinquent (specify weeks and due dates):
• The following payroll records are inadequate (specify weeks and ways in which records are deemed inadequate under 8 CCR $16435(d)):

Estimated amount of contract payments due to contractor or subcontractor that are being withheld pursuant to this Notice:

See page 2 for additional information, including appeal rights.

Labor Compliance Officer
Prime Contractor Obligations: If contract payments are being withheld due to the delinquency or inadequacy of your subcontractor's payroll records, you are required to cease all payments to that subcontractor until the Labor Compliance Program provides notice that the subcontractor has cured the delinquency or deficiency.

Notice of Right to Obtain Review - Expedited Hearing
An affected contractor or subcontractor may request review an expedited hearing to review this Notice of Withholding of Contract Payments under Labor Code §1742. The only issue in any such review proceeding is whether the specified payroll records are in fact delinquent or inadequate within the meaning of 8 CCR §16435 or whether the Labor Compliance Program has exceeded its authority under 8 CCR §16435. To obtain an expedited hearing, a written request must be transmitted to the both the Labor Compliance Program and to the Lead Hearing Officer for the Director of the Department of Industrial Relations, as follows:

Orange County Water District
c/o Lo Tan
18700 Ward Street
Fountain Valley, CA 92708
Phone: (714) 378-3368
Fax: (714) 378-3373
Office of the Director - Legal Unit
Attention: Lead Hearing Officer
Expedited Hearing Request
Fax to: (415) 703-4277
The request for expedited hearing should specify the basis for challenging this Notice and include a copy of this Notice as an attachment. The request should also identify and provide contact information for the person who will represent the contractor or subcontractor at the hearing Important Additional Information: This is a Notice of Temporary Withholding of Contract ayments for Delinquent or Inadequate Payroll Records only. This is not a determination of ability for wages or penalties under Labor Code §$1775 and 1776 or any other statute. Contrac the Labor Code.

This Notice only addresses rights and responsibilities under state law. Awarding bodies, labor compliance programs, and contractors may have other rights or responsibilities under federal or local law, where applicable, and may also have additional rights or remedies under the public works contract.
-----
44 Enclosure - text of 8 CCR §16435
§16435. Withholding Contract Payments When Payroll Records are Delinquent or Inadequate. (a) "Withhold" means to cease payments by the OCWD, or others who pay on its behalf, or agents, to the general contractor. Where the violation is by a subcontractor, the general contractor shall be notified of the nature of the violation and reference made to its rights under Labor Code Section 1729. (b) "Contracts." Except as otherwise provided by agreement, only contracts under a single master contract, including a Design-Build contract, or contracts entered into as stages of a single project, may be the subject of withholding.
(c) "Delinquent payroll records" means those not submitted on the date set in the contract. (d) "Inadequate payroll records" are any one of the following:
(1) A record lacking any of the information required by Labor Code Section 1776; • (2) A record which contains all of the required information but is not certified, or is certified by someone who is not an agent of the contractor or subcontractor; (3) A record remaining uncorrected for one payroll period after the Labor Compliance Program has given the contractor or subcontractor notice of inaccuracies detected by audit or record review. However, prompt correction will stop any duty to withhold if such inaccuracies do not amount to one (1) percent of the entire Certified Weekly Payroll in dollar value and do not affect more than half the persons listed as workers employed on that Certified Weekly Payroll, as defined in Labor Code Section 1776 and section 16401 of Title 8 of the California Code of Regulations.
(e) The withholding of contract payments when payroll records are delinquent or inadequate is required by Labor Code Section 1771.5(b)(5), and it does not require the prior approval of the Labor Commissioner. The OCWD shall only withhold those payments due or estimated to be due to the contractor or subcontractor whose payroll records are delinquent or inadequate, plus any additional amount that the Labor Compliance Program has reasonable cause to believe may be needed to cover a back wage and penalty assessment against the contractor or subcontractor whose payroll records are delinquent or inadequate; provided that a contractor shall be required in turn to cease all payments to a subcontractor whose payroll records are delinquent or inadequate until the Labor Compliance Program provides notice that the subcontractor has cured the delinquency or deficiency.
(f) When contract payments are withheld under this section, the Labor Compliance Program shall provide the contractor and subcontractor, if applicable, with immediate written notice that includes all of the following:
(1) a statement that payments are being withheld due to delinquent or inadequate payroll records, and that identifies what records are missing or states why records that have been submitted are deemed inadequate; (2) specifies the amount being withheld; and (3) informs the contractor or subcontractor of the right to request an expedited hearing to review the withholding of contract payments under Labor Code Section 1742, limited to the issue of whether the records are delinquent or inadequate or the Labor Compliance Program has exceeded its authority under this section.
(g) No contract payments shall be withheld solely on the basis of delinquent or inadequate payroll records after the required records have been produced.
(h) In addition to withholding contract payments based on delinquent or inadequate payroll records, penalties shall be assessed under Labor Code Section 1776(h) for failure to timely comply with a written request for certified payroll records. The assessment of penalties under Labor Code Section 1776(h) does require the prior approval of the Labor Commissioner under section 16436 of these regulations. 45 LABOR COMPLIANCE PROGRAM
Orange County Water District
Review Office - Notice of Withholding MARGE COUN
of Contract Payments
c/o Lo Tan
18700 Ward Street m
Fountain Valley, CA 92708 TER
DIS
SINCE 1933
Phone: (714) 378-3368
Fax: (714) 378-3373
Date: In Reply Refer to Case No.:

Notice of Transmittal
To: Department of Industrial Relations
Office of the Director-Legal Unit
Attention: Lead Hearing Officer
P. O. Box 420603
San Francisco, CA 94142-0603
Enclosed herewith please find a Request for Review, dated → postmarked , and received by this office on
Also enclosed please find the following:

Copy of Notice of Withholding of Contract Payments
Copy of Audit Summary

LABOR COMPLIANCE PROGRAM
Orange County Water District
By:

Cc: Prime Contractor
Subcontractor
Bonding Company
Please be advised that the Request for Review identified above has been received and transmitted to the address indicated. Please be further advised that the governing procedures applicable to these hearings are set forth at Title 8, California Code of Regulations sections 17201-17270. These hearings are not governed by Chapter 5 of the Government Code, commencing with section 11500.
46 Catifurnia PUBLIC WORKS PAYROLL REPORTING FORM
dif partners c
Page. _or.

NAME OF CONTRACTOR: ONTHACTORS LICENSE NI ADDRESS:

OR SUHCONTACTOR: PECIALITY LICENSE NO
• PAYROLLNO.:. FOX WEEK ENDING: SELFISSURED CERTICATE NO: PRUICT OR CONTRACT NO.:
(4) DAr (3) (6) WORKLES COMPENSATON POLICY NO: PHONICT AND LOCATION:
(1) (3) 17) (x) (%)

DATE (HOURLY
NAME, ADDRESS AND WORK OTAI NET WOS I CHECK:

SEXCIAL SECURITY NUMUER BOUN DEDUCTIONS, CONTHHUTIONS AND PAYMENTS SO.

PAID FOX

OF EMPLOYEE WEEK

HOURS WORKLD EACH DAY

THIS VAG
ROJECT seN HOLIDAS ressas
SAVINGS тотА
MANN OTHER. LOL:

THANK
HOLLY AMAl PEON

ATTACHMENT F - CERTIFID PAYROLL RECORD (CPR) TEMPLATE
TOT.

MOLET PHONETS A HOSE TA
THING. TOTA
DEDUC

THUS CAL

HOLDAY (PENSION

HAVE MINA DOES
TIONG
SOSTRUGHT TIME DIE-Any other doductions, contributions and/or payments whether or not included of requiral by prevailin CERTIFICATION MUST berna tid Fora A.l-1)1 (Nica 240) are determinations must be series listed. Une cata sheals) if pecca

SI STATE DAALIY ASKANCE
Date
(D) WHERE FRINGE BENEFITS ARE PAID IN CASH
(Name of Signatary Party) (Title) • - each taid or he pro an in in holes an ed an ed to spirale, do horaby stata:
untie hourly wage rate plur the amount of the required tenge banelits as listed (1) That I pay or cuperviso the payment of the persors employed by In the contract, except as road in Exclion 4(c) talaw. 10) EXCEPTIONS
(Contradior ar Subcontractor) - on tho

EXCEPTION (CRAFT) EXPLANATION
(Bullding or Work) - thal during the payroll period commencirg on the any cl. _ and oncing the
I persons employed on cald poject hava boen paid the full weekly wages eamed, that no retates ha son ce wit he made eiter dimlly or indiecty la ar on bohalf of sal (Contractor or Subcontracior) from tra full
weekly wagas cared by any parson and unst no deducious have been made char directly ar Indirectly from the full wanas earned by any person, other flan permissible daductions as delined in Regulations, Par 3(29 C.F.R. Subtitle A), Issad by the Sacrolary of Lebor undor the Capeland Act, as amended (46 Slal. 94y.

B3 Start. 108, 72 Slat. 967; 76 Stal. 357; 40 U.S.C. § 3145), and doscribed below:

RENAKS
pplicable wage rates contained in any vega determination Incorporalad into the control: that th lascilicalions set forth therein for cach laborer of mechanic conform with the work ha porformed 2222222
(4) That:
{a) WHERE FRINGE BENEFITS ARE PAID TO APPROVED PLANS, FUNDS, OR PROGRAMS NAME AND TITLE SIGNATURE in addition to the basle haurly wage rates pald lo cach laboror er machanic kalet above ruferenced payroll, payments of fringo bonafils as listed in the contr Bre yes episode a grams for the benefit af such, BUS COVIE ON TO CAL OR CAL PROSECUTIN SEE SECTION TO C TILE TO AND END 210 TEL I1 OF THE UNITED STATES CCCE

LCP-ARI

LABOR COMPLIANCE PROGRAM ANNUAL REPORT
Format for Awarding Body that enforces its own Labor Compliance Program for some but not all projects Report for the reporting period
(mim/dalyyyy)

1. Name of Labor Compliance Program (LCP) :

2. LCP I.D. Number (assigned by DIR): 3. Date of Initial Approval:

4. Contact person (include name, title, address, telephone, fax, and e-mail, if available:

ATTACHMENT G - ANNUAL REPORT LCP-AR1 TEMPLATE FORM

5. Did LCP perform any LC § 1771.5 enforcement activities during the 12 months in the reporting period? Please check one: "Yes If Yes, proceed to item 6 on the next page f No, complete the information below, sign the form and submit to DIR, Office of the Director, Attn: LCP Special Assistan 55 Golden Gate Avenue, 10th Floor, San Francisco CA 941( What suggestions do you have for the Department of Industrial Relations to better assist you with your program in the coining year? (attach additional sheets if necessary)
SUBMITTED BY:

Signature Name and Title Date
LCP ANNUAL REPORT 8CCR § 16431 - AB limited 2008
LCP-AR1

6. LC § 1771.5 enforcement activities (provide all information requested, attaching as many sheets as necessary).

A. List projects handled by LCP within the past 12 months.

Project Name Bid Advertisement Date Prime Contractor
Contract Amount
Total
B. Suminary of all wages and penalties assessed and/or recovered.

Approval of
Affected Contractor Forfeiture
Project Name (who directly employed the Amount Amount
Assessed Recovered Requested from Description of Violation worker) Labor
Commissioner?
Yes NO
Yes No
Г Yes No
Yes No
Yes Г No
Yes No
r Yes No
Total
LCP ANNUAL REPORT 8CCR § 16431 — AB limited
2008
LCP-AR1
C. For any amount identified in item B for which approval of forfeiture not requested from the Labor Commissioner, please explain below.

Project Name Amount Assessed Amount
Recovered Explanation
Total
D. For any amount identified in item B for which approval of forfeiture was requested from the Labor Commissioner, please provide the following:

Project Amount Assessed Amount Recovered
Name LC $1776(g) LC $ 1775| LC § 1813 LC $ 1776(g) LC$ 1775| LC$ 1813 Wages Total
E. Identify cases that are or were the subject of LC § 1742 proceedings.

Project Name Contractor Nature of Violation ODL Case # Current Status F. Did you refer any contractor to the Labor Commissioner for debarment per LC § 1777.1? Plense check one: " Yes r No
If yes, identify affected contractors) or subcontractor(s) and date(s) of referral:

G. Did you refer any apprenticeship violation to the Division of Apprenticeship Standards (DAS)? Please chicck one: Г Yes Г NO
If yes, identify affected contractors) or subcontractors) and date(s) of referral: _ LCP ANNUAL REPORT 8CCR § 16431 — AB limited 2008
APPENDIX 2
OCWD

BOARD RESOLUTION ADOPTING

LABOR COMPLIANCE PROGRAM

COUN ORANGE COUNTY WATER DISTRICT
Lo Tan, Senior Engineer
18700 Ward Street
Fountain Valley, CA 92708
TER en Phone: (714) 378-3368
D
Fax: (714) 378-3373
SINCE 1933
Email: LTan @ocwd.com

RESOLUTION OF THE BOARD OF DIRECTORS OF

THE ORANGE COUNTY WATER DISTRICT

ESTABLISHING A LABOR COMPLIANCE PROGRAM (LCP) WITH THE

DEPARTMENT OF INDUSTRIAL RELATIONS FOR PROJECTS
FUNDED BY PROPOSITION 84 GRANT
WHEREAS, Public Resources Code 75075 requires an awarding body that awards any contract for a public works project financed in any part from funds made available pursuant to Proposition 84 to adopt and enforce, or contract with a third party to enforce, a labor compliance program pursuant to subdivision (b) of Labor Code Section 1771.5 for application to that public works project; and WHEREAS, the Orange County Water District (OCWD) seeks to establish a Department of Industrial Relations approved in-house Labor Compliance Program approved by the Department of Industrial Relations; and WHEREAS, the OCWD may utilize the services of a labor compliance program consulting firm to execute the services of the OCWD's LCP should it be approved by the Department of Industrial Relations;
NOW THEREFORE BE IT RESOLVED that the Board of the Orange County Nater District hereby establishes a Labor Compliance Program geared to monitor and enforce contractors' compliance with California labor and apprenticeship laws for its public works construction projects financed in any part by Proposition 84.

CERTIFICATION OF SECRETARY
1, Janice Durant, District Secretary of the Orange County Water District, do hereby certify that the foregoing Resolution is a true and correct copy of the Resolution adopted by the Board of ¿Directors at its meeting held May 21, 2014.

Quant
Janice Durani, District Secretary

Orange City CouncilJuly 11, 2023

Orange City Council
July 11, 2023