Written materials relating to an item on this agenda that are distributed to the legislative bodies within 72 hours before the item is to be considered at its regularly scheduled meeting will be made available for public inspection at the City Clerk’s Office, 300 West Third Street 4th Floor during customary business hours. Agenda reports are also on the City of Oxnard web site at www.oxnard.org.
In compliance with the Americans with Disabilities Act, if you require special assistance to participate in a meeting, please contact the City Clerk’s Office at 385-7803. Notice at least 72 hours prior to the meeting will enable the City to reasonably arrange for your accessibility to the meeting.
Agenda Item time estimates: (Presentation / Committee Discussion / Public Comment) AGENDA
OXNARD CITY COUNCIL
FINANCE AND GOVERNANCE COMMITTEE
Council Chambers, 305 West Third Street
May 10, 2022
Regular Meeting - 5:00 to 6:30 PM
Zoom details to call-in for public comment during a meeting:
1. Dial Phone Number: (888) 475-4499
2. Enter Meeting ID: 862 3737 4054
3. Passcode: 963969
If you wish to speak during public comments or a particular item on the agenda, please sign-on by following the zoom calling in steps listed above. Once the Mayor calls for public speakers, press *9 to raise your hand to inform the City Clerk you would like to speak during the public speaking section for that particular item on the agenda, while in the zoom waiting room.
The public may view the meeting from home on Spectrum channel 10, Frontier channel 35, or YouTube at Youtube.com/oxnardnews.
Video recordings of the meeting are typically available online following the meeting at the City’s website at www.oxnard.org/city- meetings.
*Please see the link for the Measure M pre-recorded presentation video for each item listed on this agenda.
YOU MAY PARTICIPATE IN THE MEETING IN THE FOLLOWING WAYS:
1. ATTEND THE MEETING AT THE LOCATION LISTED ABOVE: Submit a speaker card to the City Clerk.
2. EMAIL COMMENTS OR SIGN UP TO SPEAK REMOTELY BEFORE THE MEETING a. Submit a request to speak by no later than 3 p.m. on the day of the meeting by using the form available at www.oxnard.org/citymeetings.
b. Submit an email to [email protected] no later than 3 p.m. on the day of the meeting (indicate the agenda item number in the subject line). All email correspondence will be forwarded to the City Council prior to the start of the meeting and made part of the legislative record. c. Contact the City Clerk’s Office at (805) 385-7803 to submit your request.
3. PROVIDING PUBLIC COMMENTS REMOTELY DURING THE MEETING a. To provide public comment during the meeting dial (888) 475-4499 and enter the Meeting ID and Passcode listed above as the Zoom details for this meeting. When the Mayor announces the particular item on the agenda you want to speak on, press *9 to raise your hand while in the zoom waiting room. Once called on, press *6 to unmute your phone.
b. Public comments on agenda items will be taken following the announcement of the item. After the item is announced, members of the public may register or otherwise be recognized for the purpose of providing public comment.
Detailed participation instructions can be found at www.oxnard.org/city-meetings. 1 OXNARD CITY COUNCIL: FINANCE & GOVERNANCE COMMITTEE
May 10, 2022 - Page 2
* The City has filed pre-election and post-election lawsuits regarding the validity of Measure M.
A. ROLL CALL, POSTING OF AGENDA, FLAG SALUTE
B. PUBLIC COMMENTS ON ITEMS NOT ON THE AGENDA
A person may address the legislative body only on matters not appearing on the agenda and within the subject matter jurisdiction of the legislative body. Speaker requests shall be submitted as set forth on the first page of this agenda. Speakers are limited to three minutes. After 30 minutes, if all speakers have not had the opportunity to speak, the remaining speakers will be given an opportunity to speak prior to adjournment of the meeting. The legislative body cannot enter into a detailed discussion or take action on any items presented during public comments at this time. Such items may only be referred to the City Manager/Executive Director/Secretary for administrative action or scheduled on a subsequent agenda for discussion. Persons wishing to speak on public hearing items should do so at the time of the hearing.
C. CONSENT AGENDA
1. City Clerk Department
SUBJECT: Approval of Minutes.
RECOMMENDATION: That the Finance & Governance Committee approve the minutes of the April 26, 2022 regular meeting as presented.
Legislative Body: Finance & Governance Committee
Contact: Rose Chaparro, (805) 385-7805
D. REPORTS
1. Human Resources Department
SUBJECT: Agreement for Workers' Compensation Claims Administration and Adjustment Services. (0/5/5)
RECOMMENDATION: That the Finance and Governance Committee recommend that the City Council approve and authorize the Mayor to execute Agreement No. A-8455 with CorVel Enterprise Comp., Inc., in an amount not to exceed $1,515,000 for a 5-year term for workers’ compensation claims administration and adjustment services.
Please click the following link to view the required Measure M pre-recorded presentation video: https://youtu.be/zpKrwm_I0j0
Contact: Steve Naveau, (805) 385-7947
2. Finance Department
SUBJECT: Resolution of City Council and Oxnard Financing Authority Approving the Issuance of Up to $19,200,000 in Principal of 2022 Local Obligation Revenue Refunding Bonds to Refund the Series 2012 Bonds. (10/5/5)
RECOMMENDATION: That the Finance and Governance Committee recommend City Council and City of Oxnard Financing Authority Board approve and authorize the following:
1. Resolution of the City Council of the City of Oxnard approving a first amendment to local agency financing documents and the execution of certain certificates relating to the issuance by the City of Oxnard Financing Authority of refunding revenue bonds for the purpose of refunding its outstanding Series 2012 Bonds.
2. Resolution of the Board of Directors of the City of Oxnard financing authority authorizing 2 OXNARD CITY COUNCIL: FINANCE & GOVERNANCE COMMITTEE
May 10, 2022 - Page 3
the sale, issuance, and delivery of not more than $19,200,000 in principal amount of Local Obligation Revenue Refunding Bonds (Special District Bond) and approving certain documents and authorizing certain actions in connection therewith. (Presentation will be live upon Consultant's request.)
Contact: Betsy George, (805) 200-5400
3. Information Technology Department
SUBJECT: Second Amendment to Superion CentralSquare Software License Agreement A-8011. (0/10/5)
RECOMMENDATION: That the Finance and Governance Committee recommend that City Council approve and authorize the Mayor to execute a second amendment to Software License Agreement A-8011 with Superion LLC, a CentralSquare Company, in the amount of $340,627 for a new not-to-exceed agreement amount of $1,458,505 for information technology software and services.
Please click the following link to view the required Measure M pre-recorded presentation video: https://youtu.be/JbwsRAR4LQY
Contact: Helen Miller, (805)385-7446
4. Finance Department
SUBJECT: Introduction to FY 2022-23 Proposed Operating Budget. (0/20/20)
RECOMMENDATION: That the Finance and Governance Committee recommend that City Council and Housing Authority Board conduct a public hearing on the Fiscal Year (FY) 2022-23 proposed budget on June 7, 2022, for the City of Oxnard and Oxnard Housing Authority and provide staff direction regarding any adjustments to the proposed budget, in preparation for final budget adoption on June 21, 2022.
Please click the following link to view the required Measure M pre-recorded presentation video:
https://www.youtube.com/watch?v=UztBV5NxFK8
Contact: Betsy George, (805) 200-5400
5. Public Works Department
SUBJECT: Fiscal Year 2022-23 Landscape Maintenance Districts Initiation of Proceedings, Declaration of Intention to Levy and Collect Assessments, and Scheduling of Public Hearing. (0/5/5)
RECOMMENDATION: That the Finance and Governance Committee recommend that the City Council acting as the legislative body of the City of Oxnard's landscape maintenance districts (LMDs):
1. Adopt a resolution initiating proceedings for the annual levy and collection of assessments for Fiscal Year 2022-23 within the City’s LMDs; and
2. Adopt a resolution declaring intention to levy and collect assessments for Fiscal Year 2022-23 within the City’s LMDs pursuant to the Landscaping and Lighting Act of 1972.
Please click the following link to view the required Measure M pre-recorded presentation video: https://youtu.be/BV5fuNmthsk
3 OXNARD CITY COUNCIL: FINANCE & GOVERNANCE COMMITTEE
May 10, 2022 - Page 4
Contact: Michael Wolfe, (805) 385-8055
6. Public Works Department
SUBJECT: Fiscal Year 2022-23 Special Tax Levy for Community Facility Districts No. 1, 2, 3, 4, 5 and 2000-3. (0/10/10)
RECOMMENDATION: That the Finance and Governance Committee recommend that the City Council acting as the legislative body for Community Facilities Districts (CFD) No. 1, 2, 3, 4, 5 and 2000-3:
1. Adopt a resolution setting a special tax rate within CFD No. 1 (Westport at Mandalay Bay) for Fiscal Year 2022-23;
2. Adopt a resolution setting a special tax rate within CFD No. 2 (Westport at Mandalay Bay) for Fiscal Year 2022-23;
3. Adopt a resolution setting a special tax rate within CFD No. 3 (Seabridge at Mandalay Bay) for Fiscal Year 2022-23;
4. Adopt a resolution setting a special tax rate within CFD No. 4 (Seabridge at Mandalay Bay) for Fiscal Year 2022-23;
5. Adopt a resolution setting a special tax rate within CFD No. 5 (Riverpark) for Fiscal Year 2022-23;
6. Adopt a resolution setting a special tax rate within CFD No. 2000-3 (Oxnard Boulevard/Highway 101 Interchange) for Fiscal Year 2022-23; and
7. Authorize the Public Works Director, or designee, to execute an agreement for Billing of Direct Assessments with the Ventura County Auditor-Controller to provide the service of placement of direct assessments on the Ventura County Secured Tax Roll.
Please click the following link to view the required Measure M pre-recorded presentation video: https://youtu.be/xPaqXgH4yho
Contact: Michael Wolfe, (805) 385-8055
E. ITEMS FOR FUTURE AGENDAS
F. ADJOURNMENT
4 FINANCE AND GOVERNANCE COMMITTEE
AGENDA REPORT
CONSENT AGENDA
AGENDA ITEM NO. C.1
DATE: May 10, 2022
TO: Finance & Governance Committee
FROM: Rose Chaparro, City Clerk, (805) 385-7805, [email protected]
SUBJECT: Approval of Minutes.
RECOMMENDATION
That the Finance & Governance Committee approve the minutes of the April 26, 2022 regular meeting as presented.
BACKGROUND
Approval of Minutes.
STRATEGIC PRIORITIES
This agenda item is a routine operational item.
FINANCIAL IMPACT
There is no financial impact.
Prepared by: Rose Chaparro, City Clerk
ATTACHMENTS
1. MINUTES 04 26 2022 Finance & Governance
5 MINUTES
OXNARD CITY COUNCIL
FINANCE AND GOVERNANCE COMMITTEE
Regular Meeting
APRIL 26, 2022
A. ROLL CALL, POSTING OF AGENDA, FLAG SALUTE
At 5:03 p.m., Chair John C. Zaragoza called to order the regular meeting of the Oxnard City Council Finance and Governance Committee in the City Hall Council Chambers at 305 W. Third Street, Oxnard, California. The City Clerk called the roll and announced the posting of the agenda. Member Gabriela Basua, Member Gabriel (Gabe) Teran, and Chair John C. Zaragoza were present in person.
Councilmember Basua joined the meeting at 5:08 p.m.
Staff members present in person were Ashley Golden, Assistant City Manager ; Shiri Klima, Deputy City Manager; Stephen M. Fischer, City Attorney; Jason Zaragoza, Deputy City Attorney ; Betsy George, Chief Financial Officer; Michael Wolfe, Public Works Director; Brian Yanez, Assistant Public Works Director ; Todd Vasquez -Housley, Environmental Resources Div ision Manager ; Jay Duncan, Call Center Manager; and Rose Chaparro, City Clerk were also present.
Staff members that participated via videoconference were Alexander Nguyen, City Manager ; Beth Ward, Police Department Records and Property Manager ; Victor Zambrano, Public Works Utilities Finance Officer ; Sabrina Rodriguez, Community Development Department Management Analyst; Chandra Crudup, Public Works Financial Analys t; Amy Van Atta, Fire Department Management Analyst, Janet Almaras, Public Works Management Analyst; Alexander Hamilton, Fire Chief; and Eden Alomeri, Revenue & Licensing Director & Assistant City Treasurer.
B. PUBLIC COMMENTS ON ITEMS NOT ON THE AGENDA (None received.)
C. CONSENT AGENDA
1. City Clerk Department SUBJECT: Approval of Minutes.
RECOMMENDATION: That the Finance & Governance Committee approve the minutes of the April 12, 2022 regular meeting as presented.
It was moved by Member Teran, seconded by Member Zaragoza, to approve the Information/Consent item as presented. VOTE: Teran and Zaragoza voted in favor; the motion carrie d 2-0. Councilmember Basua was absent during this vote.
D. REPORTS
1. City Manager Department
SUBJECT: Revenue Assessment and Revenue Development project and Creation of a comprehensive Oxnard Master Fee Schedule. (0/10/5)
RECOMMENDATION: That the Finance and Governance Committee recommend that the City Council adopt a Master Fee Schedule.
Ashley Golden, Assistant City Manager , introduced the team that worked on this special project. Assistant City Manager Golden introduce d Beth Ward, Records and Property Manager, Police Department ; Victor 6 APRIL 26, 2022 OXNARD CITY COUNCIL PAGE 2
FINANCE & GOVERNANCE COMMITTEE
Zambrano, Utilities Finance Officer, Public Works ; Sabrina Rodriguez, Management Analyst , Community Development; Chandra Crudup, Financial Analyst, Public Works; Amy Van Atta, Management Analyst, Fire Department; and Janet Almaras, Management Analyst , Public Works. Council thanked and acknowledged the team for their work on this special project.
The team p resented and answered the Committee’s questions. No p ublic comments were received.
Discussion ensued among the Committee and staff.
It was moved by Member Teran, seconded by Member Basua, to approve the recom mended action as
presented. VOTE: Basua, Teran, and Zaragoza voted in favor; the motion carried 3-0.
2. Public Works Department SUBJECT: Utility Rates Assistance Program (Project Assist) Update. (0/10/5)
RECOMMENDATION: That the Finance and Governance Committee recommend that the City Council:
1. Adopt a resolution for the Utility Ratepayers Assistance Program (Project Assist) for Fiscal Year 2022-23 to assist eligible Oxnard residents and authorize staff to grant financial relief equal to a monthly $15.00 maximum credit per utility bill charged to customers who meet the eligibility requirements discussed in this staff report; and
2. Authorize staff to direct up to $145,000 from penalty fees charged to City utility customers who pay their bills late to fund the Utility Ratepayers Assistance Program (Project Assist) in Fiscal Year 2022-23.
Michael Wol fe, Public Works Director, presented and answered the Committee’s questions. Jay Duncan, Call Center Manager and Eden Alomeri, Revenue & Licensing Director & Assistant City Treasurer were also available to answer questions. No public comments were received. Discussion ensued among the Committee and staff.
Member Teran made a motion to recommend to Council to consider increasing the credit amount from $15, to a $20 - $25 dollar credit, per utility bill.
It was moved by Member Teran, seconded by Member Basua, to approve the recommended action as presented. VOTE: Basua, Teran, and Zaragoza voted in favor; the motion carried 3-0.
E. ITEMS FOR FUTURE AGENDAS (No requests were made.)
F. ADJOURNMENT
There being no further business on the agenda, and without objection, Chair Zaragoza adjourned the meeting at 5:33 p.m.
ROSE CHAPARRO JOHN C. ZARAGOZA
City Clerk Chair
7 FINANCE AND GOVERNANCE COMMITTEE
AGENDA REPORT
REPORTS
AGENDA ITEM NO. D.1
DATE: May 10, 2022
TO: Finance & Governance Committee
FROM: Steve Naveau, Human Resources Director, (805) 385-7947, [email protected]
SUBJECT: Agreement for Workers' Compensation Claims Administration and Adjustment Services. (0/5/5)
RECOMMENDATION
That the Finance and Governance Committee recommend that the City Council approve and authorize the Mayor to execute Agreement No. A-8455 with CorVel Enterprise Comp., Inc., in an amount not to exceed $1,515,000 for a 5-year term for workers’ compensation claims administration and adjustment services.
Please click the following link to view the required Measure M pre-recorded presentation video: https://youtu.be/zpKrwm_I0j0
BACKGROUND
Staff is requesting authorization to enter into Agreement No. A-8455 with CorVel Enterprise Comp., Inc. (“CorVel”) to provide workers’ compensation claims management services, which include investigative, adjustment, administrative and legal support services for the City’s claims associated with employee industrial injuries. The agreement is for a 5-year term and is in an amount not-to-exceed $1,515,000 (an average of $303,000 per year).
Workers’ Compensation claims administration and adjustment is the process of tracking, controlling and resolving claims for injuries to City employees occurring on the job.
In January 2022, a Request for Proposal (RFP) was issued and advertised on the City's website and sent to 13 vendors known to perform this work. The City received a total of ten (10) proposals. Based upon the criteria identified in the RFP, City staff evaluated the proposals and selected 3 firms as finalists for oral interviews. Of these top 3 firms, CorVel was ultimately selected as the most qualified to perform the work due to its overall responsiveness to the RFP, the most advantageous staffing model to the City, demonstrated public agency experience, the experience and ability of its staff, and the firm’s operating philosophy. CorVel also provided the best pricing structure compared to all other proposers. This agreement would be for a five-year term at the following estimated amounts per year (each fiscal year includes a CPI factor estimated at 5% and an allowance for additional costs pursuant to the Rates and Cost Exhibit of the Agreement):
FY 22-23: $ 280,175*
FY 23-24: 287,934
FY 24-25: 301,330
FY 25-26: 315,395
FY 26-27: 330,166
8 Total $1,515,000
* Includes first year start-up costs of $5,000
This item is being added to the May 17, 2022 City Council meeting agenda due to the need for an implementation/transition period of 45 days prior to the July 1, 2022 start date.
STRATEGIC PRIORITIES
This agenda item is a routine operational item or does not relate to the five strategic priorities adopted by City Council on March 16, 2021.
FINANCIAL IMPACT
The costs of Agreement No. A-8455 will be budgeted annually in the Workers’ Compensation Fund 702 (account# 702-1702-852.82-09-Svcs Other Prof/Contract) annually over the 5-year term to cover the cost of the agreement. The annual cost of services from CorVel are estimated to be lower than with the City's previous workers’ compensation claims management provider.
Prepared by: Mike More, Human Resources Manager
ATTACHMENTS
1. Attachment No 1 - A-8455 CorVel Enterprise Comp Inc vf
2. Attachment No 2 - FGC Presentation WC TPA
9 Agreement No. A-8455
AGREEMENT FOR PROFESSIONAL SERVICES (V-07/26/18)
AGREEMENT FOR PROFESSIONAL SERVICES
COVER PAGE
(1) A
greement Start Date: July 1, 2022
(2) Consultant: CorVel Enterprise Comp., Inc.
(3) Services: Workers’ compensation claims administration and adjustment services. (4) Schedule of Services: Ongoing third party administration services over a 5-year term. (5) Agreement Ending Date: June 30, 2027
(6) Total Agreement Amount: Not to Exceed $1,515,000
(7) City’s Project Manager: Human Resources Manager
(8) Consultant’s Project Manager: Laura Day, Vice President (9) Insurance Coverage: INS-A
(10) Addresses for Notice:
FOR
CONSULTANT: FOR CITY:
CorVel Enterprise Comp, Inc. City of Oxnard Human Resources 1920 Main Street Suite 900 300 West Third Street, 1st Floor Irvine CA 92614 Oxnard, CA 93030
Attn: Legal Department Attn: Risk Manager
And
CorVel Corporation
10750 4th Street
Rancho Cucamonga CA 91730
Attn: Laura Day, Vice President
(11) C
ontact Emails:
CONSULTANT’S PROJECT CITY’S PROJECT MANAGER:
MANAGER:
[email protected] [email protected]
Th
e Agreement for Professional Services is attached hereto and incorporated herein by this reference. The following exhibits are also attached hereto and incorporated herein by this reference into the Agreement:
Sco pe of Services Exhibit
Des cription of Services Exhibit
Cla ims Administration Standards Exhibit
Rat es and Costs Exhibit
Ins urance Exhibit (INS-A)
CareMc License Agreement and My Care Smartphone Claims App Attachment Exhibit 1 10
AGREEMENT FOR PROFESSIONAL SERVICES
T
HIS AGREEMENT FOR PROFESSIONAL SERVICES (“Agreement”) is entered into in Ventura County, California, on the date that is written as “(1) Agreement Start Date” on the Cover Page, which is attached hereto and incorporated herein by this reference. This Agreement is entered by and between the City of Oxnard (“City”) and the person or entity listed as “(2) Consultant” on the Cover Page, subject to the following terms and conditions:
1. Sco pe of Services . Consultant shall provide to City the services listed as “(3) Services” on the Cover Page (the “Services”). Consultant shall provide the Services during the term of this Agreement, as set forth below, according to the schedule written as “(4) Schedule of Services” on the Cover Page, and as further explained in the Scope of Services Exhibit, which is attached hereto and incorporated herein by this reference. In the event of any conflict between the terms of this Agreement and any incorporated document(s), t he terms of this Agreement shall control.
2. St andard of Performance. Consultant shall undertake and complete the Services to conclusion using the standard of care, skill and diligence normally provided by a professional person in the performance of similar consulting services.
3. Co rrection of Errors. Consultant shall correct, at its expense, all errors which may be disclosed during review of the Services. Should Consultant fail to make such correction in a reasonably timely manner, such correction shall be made by City, and the cost thereof shall be paid by Consultant.
4. Ter m. This Agreement shall begin on the date that is written as “(1) Agreement Start Date” on the Cover Page and shall end on the date that is written as “(5) Agreement Ending Date” on the C over Page. Time is of the essence in this Agreement.
5. Co mpensation. For the Services performed during the term of this Agreement, City shall pa y Consultant an amount not to exceed the amount that is listed as “(6) Total Agreement Amount” on the Cover Page , at
the rates listed in Rates and Costs Exhibit, attached hereto and incorporated herein by this reference. The rates in Rates and Costs Exhibit shall be in effect through the end of this Agreement. Except as otherwise expressly provided in this Agreement, City shall not be responsible for expenses incurred by Consultant in performing the Services.
6. Invo ices. Consultant shall submit a payment request to City by the end of each calendar month listing the Services provided, costs of those Services, and t otal amount due for the month. Each invoice must also list the current balance on the Agreement, including that invoice, as well as the months remaining on the term of the Agreement. Invoices may be emailed to: [email protected].
7. Accep tance of Payment . Consultant’s acceptance of final payment made pursuant to this Agreement shall constitute a release of City from all claims and liabilities for compensation to Consultant for anything completed, finished or relating to the Services. City’s payment shall no t constitute nor be deemed a release of the responsibility and liability of Consultant for the accuracy and competency of the information provided and/or the Services performed hereunder, nor shall such payment be deemed to be an assumption of responsibili ty or liability by City for any defect or error in the Services performed by Consultant and its employees, agents and subcontractors. Consultant shall provide City with a completed Request for Taxpayer Identification Number and Certification, as issued by the Internal Revenue Service. If any sales tax is due for the Services performed by Consultant or materials or products provided to City by Consultant, Consultant shall pay the sales tax. City shall not reimburse Consultant for sales taxes paid by Consultant.
8. Non-A ppropriation of Funds . Payments to be made to Consultant by City for the Services performed within the current fiscal year are within the current fiscal budget and within an available, unexhausted and unencumbered appropriation of City. In the event City does not appropriate sufficient funds for payment of the Services beyond the current fiscal year, this Agreement shall cover payment for the Services only up to th e c
onclusion of the last fiscal year in which City appropriated sufficient funds and shall automatically terminate at that fiscal year’s conclusion.
2 11
9. Coordination of Services . The Services shall be coordinated with the person in the position listed in “(7) City’s Project Manager” on the Cover Page, subject to the direction of the City Manager and Department Director. Consultant hereby designates the person in the position listed in “(8) Consultant’s Project Manager” on the Cover Page as the person responsible for the Services who shall coordinate with City’s Project Manager in making binding decisions in line with this Agreement on behalf of Consultant.
10. Personnel. Consultant represents that it has, or shall secure at its own expense, all personnel required to perform the Services. Any person who performs engineering services pursuant to this Agreement shall be licensed as a Civil Engineer by the State of California and in good standing. Consultant shall make reasonable efforts to maintain the continuity of Consultant’s staff who are assigned to perform the Services. Consultant may ass ociate with or employ associates or subcontractors in the performance of the Services, but at all times shall Vendor be responsible for its associates and subcontractors’ labor, advice or materials provided in furtherance of providing the Services. Should any of Consultant’s employees, assigns or subcontractors not conduct him - or hersel f ap
propriately, as determined by the City’s Project Manager, in the process of providing the Services or any portion thereof, the City’s Project Manager may notify the Consultant’s Project Manager, who shall immediately handle th e pr
oblem, as determined appropriate by him or her, such that the problem does not persist.
11. Ad ditional Work . City may request additional specified work under this Agreement. The City’s Project Manager must authorize all such work in writing before commencement. Consultant shall perform suc h w
ork, and City shall pay for such additional work, in accordance with Rates and Costs Exhibit. Should the work not fall under any such listed rate or cost, Cons ultant shall submit a quote for all additional work, which the City’s Project Manager must approve in writing by before any such work may commence. The City shall compensat e C
onsultant for any work that does not fall under a rate or cost listed in the Rate s and Costs Exhibit, and for whic h C
onsultant did not obtain the City’s Project Manager’s written approval before work commenced, as determined by the City’s Project Manager in his or her sole discretion.
12. Aud it. City shall have the option of inspecting, a uditing and/or reproducing all records and other written materials used by Consultant in preparing its billings to City as a condition precedent to any payment to Consultant. Consultant will promptly furnish all documents requested by City. Additionally, if this Agreement is in excess of $10,000, the State Auditor may examine and audit Consultant for a period of 3 years after final payment under the Agreement. Regardless of whether a State audit is permitted, Consultant shall maintain and preserve all such records for a period of at least 3 years after final payment under the Agreement. Consultant shall include a copy of this Section 12 in all contracts with its subcontractors, and Consultant shall be responsible for immediately obtaining those records or ot her written material from its subcontractors upon a request by the State Auditor and/or City.
13. Te rmination. City may terminate this Agreement at any time, with or without cause and without penalty, upon 15 days prior written notice. Such termination shall be effective on the date specified in the notice, or if no date is specified, then 10 calendar days from the date of delivery or mailing of such notice. Consultant may terminate this Agreement at any time, with or without cause and without penalty, upon 30 days prior written notice.
Such termination shall be effective on the date specified in the notice, or if no date is specified, then 10 calendar days from the date of delivery or mailing of such notice and only if all assignments accepted by Consultant ha ve been completed before the date of termination. In the event of termination of this Agreement by either party due to no fault or failure of performance by Consultant, City shall pay Consultant compensation for all Services satisfactorily completed in acc ordance with all of the terms and provisions of this Agreement, as determined by the City, before the effective date of termination; provided, in no event shall the Consultant receive an amount exceeding that which would have been paid to Consultant for the full performance of the Services.
14. Ho ld Harmless, Defense and Indemnity.
I
f Consultant provides any architectural, landscape architectural, engineering or land surveying (“design professional”) services, to the maximum extent permitted by law, Consulta nt shall hold harmless, defend, and indemnify City, its legislative and advisory bodies, and the City’s officials, directors, officers, employees, and agents (collectively, “Indemnitees”) from and against any and all claims, demands, causes of action, dama ges, 3 12
injuries, liabilities, losses, penalties, fines, judgments, costs or expenses, including reimbursement of attorneys’ fees, court costs and costs of alternative dispute resolution, including but not limited to those relating to death or injury to any person and injury to any property (collectively, “Claims”), to the extent that the Claims arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of Consultant or of any of its officers, employees, subcontractors or agents in the performance of the Agreement or in the failure to comply with any of the obligations contained in this Agreement. Consultant’s obligation to defend is a separate and distinct obligation from Consultant’s duty to indemnify and applies through final judgment, including exhaustion of any appeals. Consultant shall be obligated to defend Indemnitees in all legal, equitable, administrative, or special proceedings, with counsel approved by the City Attorney, to the extent required herein immediately upon tender to Consultant of the Claim in any form or at any stage of an action or proceeding. The defense obligation includes the obligation to provide independent defense counsel if Consultant asserts that the liability is caused in whole or in part by the ne gligence or willful misconduct of any of the Indemnitees.
I
f Consultant provides no design professional services, to the maximum extent permitted by law, Consultant shall hold harmless, defend and indemnify the Indemnitees from and against any and all Claims, which arise out of, pertain to, or relate to the performance of this Agreement, or the failure to comply with any of the obligations contained in this Agreement, by Consultant or of any of its officials, directors, officers, employees, subcontractor s, or agents. Consultant’s obligation to defend is a separate and distinct obligation from Consultant’s duty to indemnify and applies through final judgment, including exhaustion of any appeals. Consultant shall be obligated to defend Indemnitees in all le gal, equitable, administrative, or special proceedings, with counsel approved by the City Attorney, immediately upon tender to Consultant of the Claim in any form or at any stage of an action or proceeding. The defense obligation includes the obligation to provide independent defense counsel if Consultant asserts that the liability is caused in whole or in part by the negligence or willful misconduct of any of the Indemnitees.
a. The review, acceptance or approval of Consultant’s work or work product by any of the Indemnitees shall not affect, relieve or reduce Consultant’s indemnification or defense obligations. This Section 14 shall survive completion of the Services or termination of this Agreement. The provisions of this Section 14 shall not be restricted by and does not affect the provisions of this Agreement relating to insurance.
15. Ins urance. Consultant shall obtain and maintain during the performance of any services under this Agreement the insurance coverages listed within the insurance document stated in “(9) Insurance Coverage” on the Cover Page and in the Insurance Exhibit, which is attached hereto and incorporated herein by this reference, unless the City’s Risk Manager waives, in writing, the requirement that Consultant obtain and maintain such insurance coverages. Consultant shall, before performance of any Services, file with the City’s Risk Manager evidence of insurance coverage as specified in “(9) Insurance Coverage” on the Cover Page and in the Insurance Exhibit.
Maintenance of insurance co verages by Consultant is a material element of this Agreement. Consultant’s failure to maintain or renew insurance coverages or to provide renewal evidence, and any lapse in insurance coverage, may be considered a material breach of this Agreement.
16. Do cuments and Materials.
a. A
ll final computations, exhibits, files, plans, correspondence, reports, drawings, designs, data, photographs, specifications, information, images, video files, media, or other deliverables prepared, created, drawn, calculated, photographed or developed by Consultant pursuant to this Agreement (“Documents and Materials”) shall be the City’s property without restriction or limitation upon its use, duplication or dissemination. All Documents and Materials shall be considered “works made for hire,” and all Documents and Materials and any and all intellectual property rights arising from their creation, including, but not limited to, all copyrights and other proprietary rights, shall be and remain the property of the City without restri ction or limitation upon their use, duplication or dissemination by the City. Consultant shall not obtain or attempt to obtain copyright protection as to any Documents and Materials. Consultant hereby assigns to the City all ownership and any and all intellectual property rights to the Documents and Materials that are not otherwise vested in the City pursuant to this Section 16. b. C
onsultant shall deliver all Documents and Materials to City’s Project Manager upon completion of the Services or termination of this Agreement without additional cost or expense to the City. Additionally, 4 13
anytime at City’s request, City shall be entitled to possession of, and Consultant shall furnish to City’s Project Manager within 10 calendar days, any or all of the Documents and Materials without additional cost or expense to the City. In both situations, if Consultant prepares Documents and Materials o n a computer, Consultant shall provide City with said Documents and Materials both in a printed format and in an electronic format that is acceptable to the City. Consultant may retain copies of these Documents and Materials but must request permission fro m the City before use, duplication or dissemination of these Documents and Materials for any purpose other than for the Services provided to the City pursuant to this Agreement.
c. Any substantive modification of the Documents and Materials by City staff or any use of the completed Documents and Materials for other City projects, or any use of incomplete Documents and Materials, without the written consent of Consultant, shall be at City’s sole risk and without liability or legal exposure to Consultant.
d. Consultant warrants and represents that it has secured all necessary licenses, consents or approvals to use any instrumentality, thing or component as to which any intellectual property right exists, including computer software, used in the rendering of the Services and the production of all Documents and Materials, and that the City has full legal title to and the right to use, duplicate or disseminate the Documents and Materials.
Consultant shall defend, indemnify and hold Indemnitees harmless from any lo ss, claim or liability in any way related to a claim that City’s use of any of the Documents and Materials is violating federal, state or local laws, any contractual provisions, or any laws relating to trade names, licenses, franchises, copyrights, patents or other means of protecting intellectual property rights and/or interests in products or inventions. Consultant shall bear all costs arising from the use of patented, copyrighted, trade secret or trademarked documents, materials, equipment, devices or processes in connection with its provision of the services and Documents and Materials. In the event the use of any of the Documents and Materials by the City is held to constitute an infringement and the use of any of the same is enjoined, Consultant, at its own expense, shall: secure for City the right to continue using the Documents and Materials by suspension of any injunction, or by procuring a license or licenses for City; or modify the Documents and Materials so that they become non -infringing while remaining in compliance with the requirements of this Agreement.
e. This Section 16 shall survive the termination of this Agreement.
17. C
onfidentiality of Information.
a. For the purposes of this Agreement, “Confidential Information” means all information, in whatever form transmitted, relating to the past, present or future business affairs of the City, including without limitation, (i) technical information, including patent, copyright, trade secret, and other proprietary information, techniques, sketches, drawings, models, inventions, processes, apparatus, equipment, algorithms, software programs, software source documents, and formulas; or (ii) non -technical information, including without limitation finances, financial and accounting data and information, suppliers, customers, customer lists, purchasing data and any other information belonging to the City or to a third party whose information is in the City’s possession or control under obligations of confidentiality, and which is disclosed to Consultant o r is developed by Consultant in whole or in part at the City’s expense.
b. All Documents and Materials shall be considered Confidential Information and shall not be reproduced, transmitted, disclosed or used by the Consultant without the written consent of the City, except as may be necessary for Consultant to fulfill its obligations to the City.
c. Notwithstanding the above, these limitations shall not apply to information that (i) is already known to Consultant at the time of that information’s disclosu re or becomes publicly known through no wrongful act or omission of Consultant, (ii) is communicated to a third party with the express written consent of City and is not subject to restrictions on further use or disclosure, (iii) is independently developed by Consultant and has no relation to this Agreement, or (iv) is required by law, court order, court -issued subpoena or other legal process to be disclosed; provided, however, that before making such disclosure, Consultant shall immediately provide City wi th written notice and a reasonable opportunity for City to object to the disclosure or to take action to maintain the confidentiality of the information, unless such prior disclosure is legally impermissible. 5 14
d. Consultant shall use reasonable care to protect the Confidential Information. In the event of a breach or threatened breach of this Agreement, City shall be entitled to obtain an injunction prohibiting any such breach, the costs of which shall be paid by Consultant. Any relief granted shall be in addition to and not in lieu of any other legal or equitable relief, including money damages. The parties acknowledge that Confidential Information is valuable and unique and that disclosure of the Confidential Information in breach of this Agreement may r esult in irreparable injury to the City.
e. Other than an obligation upon the City to deal in good faith, the City makes no warranties and shall bear no liability or responsibility for errors or omissions in any Confidential Information disclosed under th is Agreement or for any business decisions made by Consultant in reliance on any Confidential Information disclosed under this Agreement.
f. This Section 17 shall survive the termination of this Agreement.
18. I
ndependent Contractor. Consultant is and shall at all times remain, as to City, a wholly independent contractor. Neither City nor any of its employees or agents shall have control over the conduct of Consultant or any of its employees, except as stated in this Agreement. Consultant has and shall retain the right to exercise full control over the employment, direction, means of performance, location, compensation and discharge of all persons assisting Consultant, and it is free to dispose of all portions of its time which it is not obligated to devote to City in such a manner and to such persons, firms, or corporations as Consultant wishes except as expressly provided in this Agreement. This Agreement shall not be interpreted to prevent or preclude Consultant from rendering any services for Consultant’s o wn account or to any other person or entity as Consultant in its sole discretion shall determine; provided, however, that performing such services shall not materially interfere with the Services Consultant shall perform for the City. Except as City’s Proj ect Manager specifies in writing, Consultant and its employees and agents have no authority, express or implied, to act on behalf of City in any capacity, to incur any debt, obligation or liability on behalf of City, bind City in any manner, or otherwise act on behalf of City as an agent. Consultant and its employees are not employees of City. Consultant and its employees are not entitled to receive from City any of the benefits or rights afforded employees of City, including but not limited to reserve leav e, sick leave, vacation leave, holiday leave, compensatory leave, Public Employees Retirement System benefits, and health, life, dental, long -term disability and workers’ compensation insurance benefits. Consultant shall not, at any time or in any manner, represent that it or any of its agents or employees are in any manner agents or employees of City. Consultant agrees to pay all required taxes on amounts paid to Consultant under this Agreement, and to indemnify and hold City harmless from any and all taxes, assessments, penalties, and interest asserted against City by reason of the independent contractor relationship created by this Agreement. Consultant shall be solely responsible for, and shall save City harmless from, all matters relating to the payment of Consultant’s subcontractors, material suppliers, directors, officers, employees, agents and representatives, including compliance with social security requirements, federal and State income tax withholding, and all other regulations governing employer -employee relations, as applicable. City shall have the right to offset against the amount of any compensation due to Consultant under this Agreement any amount due to City from Consultant as a result of its failure to promptly pay to City any reimbursement or indemnification arising under this Section 18.
19. N
ondiscriminatory Employment . Consultant shall not unlawfully discriminate against any individual based on race, color, religion or religious creed, national origin, ancestry, ethnic group identification, primary language, physical disability, mental disability, medical condition, genetic information, marital status, gender, gender identity, gender expression, sex, sexual orientation, age, immigration status, citizenship or military and veteran status. Con sultant understands and agrees that it is bound by and will comply with all legal nondiscrimination mandates. For every subcontractor who will perform Services, Consultant shall be responsible for such subcontractor’s compliance with this Section 19.
20. C onsultant’s Representations . Consultant represents, covenants and guarantees that: a) Consultant is licensed, qualified, and capable of furnishing the labor, materials, and expertise necessary to perform the Services in accordance with the terms and condition s set forth in this Agreement; b) there are no obligations, commitments, or impediments of any kind that will limit or prevent Consultant’s full performance under this Agreement; c) to the extent required by the standard of practice, Consultant has investigated and considered the scope of Services 6 15
performed, has carefully considered how the Services should be performed, and understands the facilities, difficulties and restrictions attending performance of the Services under this Agreement.
21. C ompliance with Laws. In performing the Services under this Agreement, Consultant shall comply with all applicable laws, ordinances and regulations. Before providing any Services under this Agreement, Consultant shall, at its own expense, obtain and maintain all required certificates, licenses and permits, including a City business tax certificate.
22. C onflict of Interest. If, in performing the Services set forth in this Agreement, Consultant makes, or participates in, a “governmental decision” as described in Title 2, Sect ion 18701(a)(2) of the California Code of Regulations, or performs the same or substantially all the same duties for City that would otherwise be performed by a City employee holding a position specified in City's conflict of interest code, Consultant shall be subject to City's conflict of interest code, the requirements of which include the filing of one or more statements of economic interests disclosing the relevant financial interests of Consultant's personnel providing the Services set forth in this Agreement. Furthermore, Consultant shall not to accept any employment or representation during the term of this Agreement or within 12 months after completion of the Services which is or may likely make Consultant “financially interested,” as provided in Cal ifornia Government Code Sections 1090 and 87100, in any decisions made by City on any matter in connection with which Consultant has been retained pursuant to this Agreement.
23. F ictitious Name. If Consultant has a fictitious name, Consultant shall submit to City a new Fictitious Business Name Statement approved by any California county before Consultant’s prior Fictitious Business Name Statement expires if such expiration may occur during the term of this Agreement, including any term amendment.
24. No n-Assignability. This Agreement contemplates personal performance by Consultant and is based upon a determination of Consultant’s personnel’s unique competence, experience and specialized personal knowledge. Consultant shall not assign or transfer any interest in t his Agreement or any part thereof, whether by assignment or novation, without City’s prior written consent, which may be withheld for any reason or for no reason at all. Any purported assignment without written consent shall be null, void, and of no effect , and Consultant shall hold harmless, defend and indemnify Indemnitees from and against all Claims arising from or relating to any unauthorized assignment.
25. S
uccessors and Assigns . This Agreement shall be binding upon and inure to the benefit of the heirs, executors, administrators, successors and assigns of Consultant.
26. A pplicable Law; Venue. The validity, interpretation, and performance of this Agreement shall be controlled by and construed under the laws of the State of California, excluding California’s choice of law rules.
Venue for any such action relating to the Agreement shall be in the Ventura County Superior Court.
27. T itles. The titles used in this Agreement are for convenience only and shall in no way define, limit or describe the scope or intent of this Agreement or any part of it.
28. F orce Majeure. Neither City nor Consultant shall be responsible for delays or failures in performance resulting from acts beyond the control of either party. Such acts shall include but are not be limited to acts of Go d, riots, acts of war, epidemics, fire, earthquakes, or other disasters.
29. A uthority. Any person executing this Agreement on behalf of Consultant warrants and represents that s/he has the authority to execute this Agreement on behalf of Consultant and to bi nd it to the performance of these obligations.
30. Binding Agreement. The parties do not intend this Agreement to be binding upon them and shall not be held liable to its terms until it is fully executed by all required signers.
31. I ntegration; Amendment . This Agreement, including any other documents incorporated herein by specific reference, constitutes the entire and integrated agreement of City and Consultant regarding the subject matter described herein. This Agreement supersedes all prior oral or wri tten communications, negotiations, 7 16
representations, agreements and promises. This Agreement may not be modified or amended, nor any provision or breach waived, except in a writing, signed by both parties, that expressly refers to this Agreement.
32. Co nstruction. In the event of any asserted ambiguity in or dispute regarding the interpretation of any matter herein, the interpretation of this Agreement shall not be resolved by any rules of construction providing for interpretation against the party who causes the uncertainty to exist or who drafted the Agreement in whole or in part.
33. No Waiver . Waiver by either party of any one or more of the conditions of performance under this Agreement shall not be a waiver of any other condition of performance under this Agreement. In no event shall the making by City of any payment to Consultant constitute or be construed as a waiver by City of any breach of covenant, or any default that may then exist on the part of Consultant, and the making of any such payment by City s
hall in no way impair or prejudice any right or remedy available to City with regard to such breach or default.
34. Attorneys’ Fees . The prevailing party shall be entitled to recover reasonable costs, attorneys’ fees (including the reasonable value of the services rendered by the City Attorney’s Office) and expenses, includin g i
nvestigation fees and expert witness fees, in addition to any other relief to which that party may be entitled, in any legal action or other proceeding, including an action for d eclaratory relief, for the enforcement of this Agreement or because of an alleged dispute, breach, default or misrepresentation in connection with this Agreement.
35. No tice. Except as otherwise required by law, a notice or communication authorized or required by this Agreement shall be in writing and shall be deemed received —on (a) the day of delivery if delivered by hand or overnight courier service during City’s regular business hours or (b) the third business day following deposit in the United States mail, postage prepaid—to the addresses listed as “(10) Addresses for Notice” on the Cover Page or at such other address as one party may notify the other in writing.
36. C oun terparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original and all of which, when taken together, shall be deemed to be one and the same agreement.
A signed copy of this Agreement transmitted by email to Project Managers’ emails listed in “(11) Contact Emails” on the Cover Page or by o ther means of electronic transmission shall be deemed to have the same legal effect as delivery of an original executed copy of this Agreement for all purposes.
37. Se verability. If any term or portion of this Agreement is held to be invalid, illegal, or othe rwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect.
[S
ignatures on next page]
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IN WITNESS WHEREOF, the parties hereto have executed the Agreement on the date that is written as “(1) Agreement Start Date” on the Cover Page.
CITY OF OXNARD CORVEL ENTERPRISE COMP., INC.
☐ John C. Zaragoza, M ayor1 Date Brandon O’Brien, CFO Date ☐ A lexander N guyen, City M anager
☐ D aniel W illhite, P urchasing M anager
☐ , B u yer
Richard Schweppe, Assistant Treasurer Date
ATTEST:
Rose Chaparro, City Date
Clerk (only if Mayor signs)
APPROVED AS TO FORM:
Stephen M. Fischer, City Date
Attorney (always required)
1 The City Council must authorize and the Mayor must sign any agreement over $200,000 annually. The City Manager may authorize and sign any agreement over $100,000 but up to $200,000 annually. The Purchasing Manager may authorize and sign any agreement up to $100,000 annually. A Buyer may authorize and sign any agreement up to $25,000 annually.
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Agreement No. A-8455
SCOPE OF SERVICES EXHIBIT
I. Consultant shall administer the workers’ compensation claims of City in accordance with the Public Risk Innovation, Solutions, and Management (PRISM) Claims Administration Guidelines attached hereto as the Claims Administration Standards Exhibit.
II. Consultant shall ensure that all workers’ compensation claims are processed in accordance with California law, codes, rules, and regulations as promulgated by the Administrative Director and the Manager of the Office of Self -Insured Plans (OSIP) of the Department of Industrial Relations (DIR).
III. Consultant shall initiate prompt processing of all claims presented to Consultant upon notificati on by City in writing, facsimile transmission, electronically, or via telephone.
IV. Staffing and Caseload
a. Consultant shall provide the following staffing model to service City’s workers compensation claims:
i. 1 Claims Supervisor
ii. 2 full-time dedicated Indemnity Adjusters
iii. 1 designated Future Medical/Medical-Only Adjuster
iv. 1 Claims Assistant support staff
v. 1 Benefit Tech support staff
b. Consultant agrees that each Indemnity Adjuster shall have a caseload not to exceed 150 open indemnity claims. Indemnity claims are counted as one claim. Future medical claims and medical only claims are counted as two-to-one (2:1) indemnity claims.
V. Penalties
a. Any penalties assessed to City for delays in benefits that are the direct result of the delay by Consultant shall be the responsibility of Consultant. Any penalties that are assessed as of the direct result of delay by City shall be the responsibility of City. b. Any penalties assessed by the Division of Workers’ Compensation Audit Unit for which Consultant made negligent error as identified by a State auditor shall be the responsibility of Consultant. City shall be responsible for paying penalties for which City has made a negligent error as identified by a State auditor.
c. Consultant shall be responsible for any and all penalties that are the result of late payments pursuant to the statutory requirements for timely payments. If the penalties are paid from the trust fund as an add- on to a bill or benefit, Consultant shall reimburse City on a quarterly basis. The check and a report outlining all penalties shall be submitted to the City within thirty (30) calendar days after the quarter ends on March 31, June 30, September 30, and December 31.
VI. Medicare Set Aside Allocations and SCHIP Reporting
a. Provide an account manager and designated back -up to timely report to the reporting agent all judgments, settlements, awards, above the threshold limits as periodi cally required by the Medicare, Medicaid, and SCHIP Extension Act of 2001 (MMSEA) for all Medicare-eligible claimants.
b. Protect Medicare’s interest in both conditional liens and future payments of medical expenses for all Medicare- eligible claimants to the extent it is reasonably appropriate because of the exposure, the injuries, and the then-existing and future anticipated medical treatment costs.
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Agreement No. A-8455
c. Hold harmless, defend, and indemnify the City for any fines or Medicare reimbursements required to be paid as a result of Consultant’s failure to timely report any Medicare-eligible judgments, awards, or settlements, or for any claim that there was a failure on the part of Consultant to adequately protect Medicare’s conditional or future medical payment rights of reimbursement.
VII. Financial Administration
a. City will establish a zero-balance bank trust account from which Consultant shall make all indemnity, medical, and allocated loss expense payments. Payment authorization limits and payment policies will be established by City and reviewed from time to time with Consultant. Consultant’s monthly service fee shall not be paid from the trust account. b. Consultant shall maintain complete and accurate records with respect to costs, expenses, receipts, and other such information required by City that relate to the performance of services under this Agreement. Consultant shall maintain adequate records of services provided in sufficient detail to permit an evaluation of services. All such records shall be maintained in accordance with generally accepted accounting principles and shall be clearly identified and readily accessible.
c. All allocated loss expenses shall be charged to the applicable claim file out of the City’s trust account.
d. The City or its designated representative shall be authorized to visit Consultant’s facilities to perform claims audits. All data and documents pertaining to the City’s claims shall be made available to City or its designated auditor, at no additional cost to City. e. No charges to City for payments made on behalf of persons who were not valid employees of City at the date of injury shall be accepted for payment by the City. f. Consultant shall assign only competent personnel according to the reasonable and customary standards of training and experience in the relevant field to perform services pursuant to this Agreement. Failure to assign such competent personnel shall constitute grounds for termination of this Agreement. Each adjuster shall have passed the State of California Department of Industrial Relations, Self Insurance Administrator’s Examination; or, as a minimum requirement, no less than one (1) adjuster shall not have successfully passed this State examination. However, an adjuster that has not passed the State examination shall be enrolled in appropriate courses leading to certification within two (2) years.
g. Consultant shall ensure that other personnel, such as management, clerical, accounting, and data processing staff, which may be required to satisfactorily provide the services required under this Agreement, shall be provided by Consultant with the agreed fee schedule under the RATES AND COSTS EXHIBIT incorporated into this Agreement. City understands that the personnel referred to in this paragraph need not be dedicated to the exclusive use of the City.
h. Consultant shall reconcile the bank trust account on a monthly basis and provide the reconciliation in Microsoft Excel format to City electronically via secure email.
VIII. Claims Reporting: Consultant shall provide all of the following repo rts to City on a monthly basis or as requested
a. Workers’ Compensation Claim Detail Report: this report includes individual claim information that can be filtered and arranged according to a multitude of report parameters and valuations. This report includes individual claim information that can be valued as of different points in time.
b. Workers compensation claims summary reports by annual reporting period. c. Payment Register Detail Report: this report summarizes payments issued between two dates and can be filtered and arranged according to different report parameters. 11 20
Agreement No. A-8455
d. Loss Experience Summary Report: this report shows the number of open and closed claims and associated financial information that can be filtered and arranged according to different report parameters.
e. OSHA Form 300 – This is the OSHA Log of Work-Related Illness and Injuries. Federal law requires employers to record all reportable injuries and illness that occur in the workplace on this form.
f. OSHA Form 300A – This is the OSHA Summary of Work -Related Injuries and Illnesses.
Federal law requires employers to post this form in the workplace annually. g. OSHA Form 301 – This is the OSHA Injury and Illness Incident Report which is required by the Unites States Department of Labor’s Occupational Safety and Health Administration (OSHA) for employer provided workplace incident records. h. Workers’ Compensation Lag Time Report: this report shows the lag time between the date the injury occurred, the date the employer was notified and the date the injury was reported to Consultant. This report helps to understand how costly lag times may be affecting the workers’ compensation program.
i. Claims Scorecard: this report compares major data elements over certain time periods. In addition, the Claims Scorecard provides exception reporting commonly requested to help manage specific claims responsible for the majority cost of the program. j. Claims Safety Dashboard: this report is an interactive tool that allows the user to view information sorted by various filters and displayed on easy -to-read graphs. Information is displayed on up to six different information panels based on each user’s account and dashboard preference settings.
k. Ad Hoc Reporting: Ad hoc report inquiries can be made with data elements captured in the claims system. Most ad hoc reports are available in PDF and Excel formats. These reports can be run instantly or scheduled for regular output. l. 4850 Benefits Reporting including future liability, total incurred with 4850 benefits, total incurred without 4850 benefits and vouchers, and any excess insurance or subrogation recoveries.
m. Listing of any administrative penalties paid during each month with the responsible party noted for each penalty paid. Consultant shall issue a check payable to City for reimbursement of any administrative penalties during the month which were the responsibility of Consultant. The check shall be submitted to City within 30 days of each monthly report.
n. Report of subrogation claims showing each employee’s name, claim number, date of injury, paid amount with 4850 benefits, paid amount without 4850 benefits, future liability, total incurred with 4850 benefits, total incurred without 4850 benefits and vouchers, and any excess or subrogation recoveries.
o. Reports as required by the City’s excess workers compensation carrier (PRISM). p. Annual OSIP Report: Public Entities Self -Insurer’s Annual Report as required by the Department of Industrial Relations Office of Self-Insurance Plans. q. Other reports as listed by Consultant in its response to the RFP:
i. Annual Report to the State of California
ii. Monthly Listing of Open Claims by Department/Division iii. Monthly Listing of Alphabetical Listing of All Active Claims iv. Monthly Listing of Open Indemnity Claims
v. Bi-Weekly Indemnity Payments Report
vi. Monthly List of All Currently Denied Claims
vii. List of Delayed Claims to Include Expenses Paid During Delay Period viii. Report of Litigation Referrals
ix. Report of Litigation Fees
x. Medical Case Management Claims
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Agreement No. A-8455
xi. Excess Insurance Claims
xii. Graphs for Each City Department Showing Severity and Frequency xiii. Graphs Showing Number of Injuries by Nature of Injury for each City Department and Combined
xiv. Graphs Showing Number of Injuries by Body Part for each City Department and Combined
xv. Days Lost Due to Injury
xvi. Average Cost of Injury for Each City Department and Combined
IX. Online Access
a. Consultant shall provide access to an online Executive Dashboard which provides a dynamic and interactive overview of City’s program.
b. Consultant shall provide access to an online reporting system so that City employees can run custom, standard, or ad-hoc reports as needed.
c. Online access shall be provided to, at a minimum, 4 employees of City at no additional charge.
X. Training
a. Consultant will provide the City’s staff with in- service training on changes, proposed changes and statutes, and rules and regulations.
b. Consultant shall provide City staff with training on an online Executive Dashboard as needed.
c. Consultant shall provide City staff with training on its online reporting system.
XI. Meetings
a. Consultant shall conduct claims review meetings every two months with City. b. Consultant will provide a comprehensive overview of the City’s program during annual stewardship meetings.
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Agreement No. A-8455
DE
SCRIPTION OF SERVICES
W
orkers’ Compensation Claims Management Services
Terms and Conditions
I. DESCRIPTION OF WORKERS’ COMPENSATION CLAIMS MANAGEMENT SERVICES (a) City shall promptly notify Consultant of all incidents subject to the services described in this Agreement.
(b) First report of loss services involve gathering pertinent information related to a work injury and r
eporting such information to the appropriate state industrial accident board or commission as required by law, and is used to facilitate Consultant’s initial review of the claim to determine whether the claim is likely to be medical -only or lost time and to help guide the initial determination of Services as defined under Section 1 of the Agreement that may be required (“First Report Services”). (c) Consultant’s Workers’ Compensation Claims Management services provide City with a process to comply with City ’s workers’ compensation issues in the applicable jurisdiction. Consultant shall provide workers’ compensation claims management services set forth herein to City on behalf of employees that sustain work related injuries (“Injured Employees”). Consultant may subcontract with a third party t o pr
ovide some portion or all of its claims management services obligations hereunder.
II. DELIVERY OF FIRST REPORT OF LOSS SERVICES
(a) Consultant shall provide First Report Services to City upon receipt by Consultant of specifi c r
equests from City. Prior to the implementation of Consultant First Report Services and as required during the Term of this Agreement, City may provide Consultant with instructions regarding the scope and extent of the First Report Services to be performed by Consultant . Absent such instruction, Consultant First R
eport Services shall be performed as described below.
(b) City s hall initiate First Report Services by (i) entering such information online through CareMC, (ii) c
alling Consultant via a toll free number provided by Consultant , or (iii) faxing such information to the Consultant intake specialist. City or the City representative entering such information on CareMC, making such calls, or faxing such information shall provide Consultant with all information required to complete the First Report of Loss form required by the applicable state (“Required Information”). Requi red Information generally includes the following: name/address of claimant, date of incident, description of injuries, social security number, date of birth, employer, salary, and other descriptive information reasonably required by Consultant , and may include information required by applicable statute (e.g., employer TIN). Consultant shall (i) provide sufficient staff to handle all incoming calls, and (ii) be prepared to complete First Report of Loss forms for all applicable states. (c) Once the R e quired Information is validated and confirmed by a Consultant representative, First Report of Loss forms will be made available to City through the CareMC Application. Consultant will, upon r
equest of City , provide a hard copy of the completed First Repo rt of Loss form to the City . A n el
ectronic copy shall be available to City via CareMC . To the extent permitted by the applicable state industrial accident board or commission, the Required Information shall be transmitted electronically. (
d) To the extent r equired by applicable statute or otherwise agreed in writing by Consultant , C
onsultant will file additional reports on earlier-filed First Reports of Loss (“Subsequent Reports”). (e) Unless agreed to otherwise in writing by the parties, any questions or concerns from an industrial accident board or commission concerning First Reports of Loss forms completed by Consultant hereunder will be handled directly by Consultant . All such inquiries will receive an initial response within the next business day following Consultant ’s receipt of the inquiry. Consultant will keep City apprised of any inquiries it receives and the response thereto. Consultant will send a written response to the inquiry within five (5) business days outlining the nature of the inquiry and t he resolution of same by Consultant. A cop y
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Agreement No. A-8455
of such response will also be sent to the attention of the designated City representative if requested in writing by City . City shall have the right, but not the obligation, at any time and at City ’s expense, to interject itself into the inquiry between Consultant and the industrial accident board or commission, and in connection therewith to resolve the inquiry in a manner acceptable to City at its sole discretion, in which case City shall defend, indemnify and hold harmless Consultant from and against any claim, liability, damages or costs arising from City’s handling of such inquiry or the resolution thereof.
III. DELIVERY OF CLAIMS MANAGEMENT SERVICES
(a) City shall arrange so that all claims and all related bills of a ny type, as well as all other correspondence that City receives relating to such claims, are sent directly to Consultant. Consultant shall perform all of the following “Claims Services” in connection with each portion of a Claim related to Workers’ Compensation benefit payments:
Claims requiring work beyond the standard scope for each claim type will be invoiced at the next higher rate. The following section indicates the basis for the categorization of claims fees. City will be provided with reports that provide full transparency of the fees invoiced. Claims are defined hereunder as follows:
• Record Only – system notation of an event that does not require any claims handling, including contact or investigation. These are used solely for the purpose of record keeping.
• Medical Only – claims where time-off does not exceed the state waiting period and the scope of work is within the parameters noted in the Pricing section (“Fees”), Exhibit B. • Indemnity – claims not otherwise classified as either Record Only or Medical Only as defined under Rates and Costs Exhibit.
• Lost Time - claims not otherwise classified as either Record Only or Medical Only as defined under Rates and Costs Exhibit.
All Claims Services provided by C onsultant under this Agreement shall be performed i n acco
rdance with the guidelines set forth hereunder of this Workers’ Compensation Claims Management Services Description of Services Schedule:
(i
) Consultant shall immediately assign each new Indemnity Claim and Medical Only Claim to Consultant’s designated claims professional.
(ii) Utilizing Consultant’s CareMC Application or other applicabl e Consultant Online System , C
onsultant shall mai ntain a chronological record of all Claims Services performed by Consultant.
(iii) Consultant shall make all filings related to Indemnity Claims and Medical Only Claims with the appropriate state Workers’ Compensation regulatory authorities. (
iv) Consultant shall maintain a complete and accurate claim file for each Indemnity Claim and Medical Only Claim.
(v) Consultant shall perform reasonable and necessary administrative and clerical work including, without limitation, the following:
(A) Investigate all Indemnity Claims and Medical Only Claims. (
B) Determine and evaluate any coverage and/or compensability issue s and provide City with appropriate recommendations and advice regarding the same. (C) Adjust, handle, or settle to a conclusion those Indemnity Claims and Medical Only Claims that Consultant believes the City is legally obligated to pay under applicable state law and regulations, and in accordance with the authority granted to Consultant by C
ity under the Agreement.
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Agreement No. A-8455
(D) Prepare checks for payments of Indemnity claims, Medical Only Claims and Allocated Loss Adjustment Expenses.
(E) Prepare documents as necessary to clo se out Indemnity Claims and Medical Only Claims.
(b) C onsultant shall process claims and process the disbursement of benefit payments to claimants and providers entitled to such payments from City . Funding for the payment of all benefits to claimants, providers, vendors and “allocated loss adjustment expenses” (as defined below) is the sole responsibility of City and City agrees to be liable for and fund all proper claims processed by Consultant. Such payment shall be made through a bank account established by Consultant . There shall be one account established for claims relating to First Reports of Loss arising on or after July 1, 2022(the “bank account”)). Consultant shall provide City with a check register in a mutually agreed format for each check run drawn on a bank account prior to mailing of the checks. Consultant also will provide City information as necessary for City to prepare periodic bank account reconciliation reports. City agrees to pay into the bank account funds s ufficient to pay approved claims and to maintain the advance deposit set forth below and to provide Consultant with such authorizations as shall be necessary to make the required instruments valid claims against City . Notwithstanding the other provisions of this Agreement, if payments are not made when due, City shall be in default and subject to immediate termination by a prior thirty (30) day notice from Consultant to City with ability to cure by City to the satisfaction of Consultant , and Consultant shall have no liability for claims, penalties or other damages arising out of or relating to any such failures on the part of City. (i) C ity shall make an initial advance deposit into the bank account in an amount equal to One Hundred Thousand Dollars ($100,000.00).
(ii) Allocated loss adjustment expenses (“ALAE”) generally encompasses costs which can be directly allocated to a particular claim. As used herein, that term shall include, but not necessarily be limited to, the following: claim adjustment costs and expenses incurred by Consultant or its subcontractor and allocated by Consultant to the investigation, adjustment and settlement or defense of a claim for benefits, including, without limitation, attorneys’ fees and disbursements; pre- and post- judgment interest; court reporter services and transcripts; deposition charges and transcripts; fees for service of process or summons; court costs; courier/express mail; appeal bonds and filing fees; travel, printing costs related to trials and appeals; witness and expert fees and expense; alternate dispute resolution fees and expense; mediation fees and expense; arbitration fees and expense; ombudsman fees and expense; medical examinations and reviews to determine issues such as causal connection, length or extent of disability, degree of permanency, and other issues related to determining liability of the City; laboratory costs; engineering fees and expense; autopsy fees and expense; independent adjuster and private investigator fees and expense; surveillance and activity checks; photography; fees and expense related to the defense of controverted or litigated claims, including subrogation recovery; medical cost containment expense including, but not limited to, medical bill auditing expenses, hospital and other treatment utilization reviews, including precertification/preadmission and concurrent or retrospective reviews; peer reviews; preferred medical provider network or similar organization expenses; medical fee review panel expense; pharmacy benefit management expense; drug testing expense; indexing fees; expense and fees related to Medicare set aside agreements; vocational rehabilitation or return to work expense; telephonic and field medical case management expense; fees and expense for reproduction of medical and/or hospital records; fees for police reports, birth certificates, death certificates, OSHA reports and other similar regulatory authority reports; copying fees assessed by a vendor other than TPA; translation services; legal bill 16 25
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audit expenses; other costs and expenses reasonably incurred and related to the investigation and defense of claims or the protection and collection of subrogation rights of the City; and other expenses that are not defined as losses and are directly related to and directly allocated to the handling of a particular claim for services that are required to be performed by statute or regulation. Unless expressly stated as a separate fee or otherwise included within Consultant’s service fees, each of the above ALAE items is subject to reimbursement at the rate charged.
(c) Consultant shall provide City with payment services through Check Writing services in accordance with specifications mutually agreed by City and Consultant. (i) T he checks referred to in Section II (d) will be drawn on Consultant ’s account at Wells Fargo Bank, Portland, Oregon or Consultant’s account at such other bank as the parties of this Agreement may mutually accept, as evidenced by a letter or written document signed by both parties (hereafter, the “Bank”), with City identified on each check as the insurer or any insurance carrier as such may be required. Check Writing services shall also include IRS form 1099 filing and associated follow-up, bank reconciliation, and bank fees specifically related to such processing if City is using Consultant’s bank account. Otherwise, such services will be subject to an additional fee.
(d) C onsultant agrees to provide the following services to City relating to the processing and payment of claims:
(i) to receive claims and process payment of benefits in accordance with applicable State(s) program guidelines required for the payment of workers’ compensation claims; (ii) to correspond with the claimants, providers of services and vendors if additional information is deemed necessary to complete the processing of claims;
(iii) to determine the amount of benefits payable;
(iv) to provide notice to claimants as to the reason(s) for denial of benefits (when such are denied) and to provide for the review of such denied claims;
(v) to receive and process for payment claims for benefits incurred prior to the Effective Date in consideration for the separate fees established in the attached hereunder Rates and Costs Exhibit; and
(vi) at City’s request, to provide specified additional services for such fees as the parties mutu ally agree;
(e) Consultant is not in any way to be deemed an insurer, underwriter or guarantor with respect to any benefits payable under City’s workers’ compensation program. (f) Consultant may rely on instructions received from such person or persons as City may from time to time designate in writing, provided that no such instruction may vary the terms of this Agreement. (g) Unless otherwise directed by City or precluded by law, Consultant shall seek subrogation recoveries on behalf of City and shall provide City with any recoveries obtained, minus the attorneys’ fees and costs incurred in obtaining such recoveries. City represents and warrants that its workers’ compensation program provides for rights of subrogation. City delegates and/or assigns these subrogation rights and third party recovery rights to Consultant as its agent for purposes of subrogation only, provided that City pre -approve all subrogation recoveries. City shall assist Consultant in its subrogation efforts by providing requested information and documentation.
Consultant may engage the services of a subrogation management firm to assist with the identification and management of subrogation cases. The fees charged by the subrogation management firm will be deducted from any recovery. In those case s where the subrogation recovery efforts of the claimant’s attorney should be compensated, City delegates to Consultant full authority to act on behalf of the City to negotiate reasonable attorneys’ fees. In those instances where City ’s subrogation lien, in the 17 26
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opinion of Consultant , should be compromised or abandoned, City delegates to Consultant full authority to act on behalf of City to compromise or abandon the lien. Any determination by Consultant with respect to subrogation liens shall be final and conclusive, unless rejected by the City or overturned by order of a court of competent jurisdiction. (h) Consultant shall assist, cooperate and participate with City , carriers and reinsurers in connection with claim reviews and audits and catastrophic injury claim analysis and excess claim related reporting.
IV. SERVICE CRITERIA, STANDARDS AND GUIDELINES
(a) A ssignments: City will notify Consultant , either via CareMC, telephone or facsimile, that City ’s employee has sustained a work related injury . All new Lost Time claims will be acknowledged and established by Consultant within the next business day following such notice. The acknowledgement will include the name and contact information of the assigned Adjuster. (b) Contacts: A s warranted, and always with regard to lost time, or anticipated lost time claim situations, initial contact with the injured employee will be made within the next business day following receipt of a new assignment claim. Contact with the Physician, and employer, if required will be made by the next business day.
(c) Investigation: Completed and documented within 30 days from date of assignment. 18 27
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C
ase Management Services
Terms and Conditions
1. DE SCRIPTION OF SERVICES
(a) Case management services are provided to manage a claimant’s case in order to identify the most ap
propriate rehabilitative treatment and/or most cost -effective health care alternatives (“Ca se Management Services”). CorVel’s nurse case managers may confer with the adjuster, attending physician, other medical providers, employer(s), attorney(s), the claimant and the claimant’s family. (b) In certain states if requested by City, Case Management Services may include vocational rehabilitation services.
2. DE
LIVERY OF SERVICES
(a) Consultant shall provide Case Management Services to City upon receipt by Consultant of specific r
equests from City as mutually agreed by both parties under the special handling instructions. (
b) Telephonic Case Management: Telephonic case management (“ T CM”) includes a four -point contact with claimant, employer, claims professional and provider. Consultant case managers (“CMs”) do the following: (i) facilitate communication among all appropriate parties regarding the diagnosis, prognosis and treatment plan provided by claimant’s treating physician, (ii) channel or direct claimant to a PPO Network provider as appropriate, (iii) monitor and facilitate treatment planning, (iv) coordinate early return to work, and (v) subsequently provide periodic assessments of treatment and return to work plans. CMs may recommend additional services or coordinate claim closure, as appropriate.
(c) Medical/Field Case Management : C
onsultant’s medical/field case management ( “Medical Ca se Management” or “MCM”) personnel perform field based case management services as directed by the employer and/or Authorized TPA which may include on -site contact with claimant, employer, and provider, as well as telephonic communication with the claims professional. MCM’s provide the CM services set forth in Section 1A (Description of Services” for Case Management Services above. (d) Vocational Case Management: Vocational case management services may include the following: (i) coordinating return to work, (ii) providing job analysis, (iii) assisting with job placement, (iv) providing expert testimony, (v) assisting with job development, (vi) providing job analysis of essential and non-essential duties for employers under the American’s With Disabilities Act, (vii) providing vocational testimony, (viii) providing advice regarding job seeking skills, and (ix) providing transferable skills analysis.
(e) Utilization Review:
(i) Consultant’s utilization management program reviews proposed inpatient hospital admissions and ambulatory care to determine the appropriateness, frequency, length of stay, and setting for such proposed treatment. In addition, Consultant can monitor and assess the appropriate utilization of treatment for all orthopedic and soft tissue injuries requiring ambulatory diagnostics and treatment.
(ii) In California, certain medical diagnostics, treatme nts and durable medical equipment can be approved at the claims professional level. Utilizing the Adjuster Only Approval letter allows the claim specialist to expedite medically necessary care, meet California Division of Workers’ Compensation (DWC) regulations and Senate Bill 1160 that requires all treatment determinations are included in a database reportable to the DWC. This process is completed by Consultant ’ s
C
alifornia Utilization Management departments.
(iii) Consultant nurses make recommendations to the claims adjuster based on nationally accepted medical guidelines, including Optimed Managed Care System, a clinical protocol software; the American College of Occupational and Environmental Medicine (ACOEM) Occupational 19 28
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Medicine Practice Guidelines: Evalua tion and Management of Common Health Problems and Functional Recovery in Workers; other nationally accepted treatment practice guidelines, as well as any state mandated treatment guidelines.
(iv) Any nurse recommendations for limitation or denial of care based on lack of medical necessity are reviewed by a Consultant Physician Advisor. The Physician Advisor makes a final recommendation to the claims adjuster to approve or deny. If a final recommendation is made to deny treatment, the treating physician is notified in writing of the decision and the appeals process.
(f) Pre-Hab (Surgery Preparation) and Rehabilitation (Recovery) Services:
Consultant provides Case Management Pre-Hab (Surgery Preparation) and Rehabilitation (Recovery) Services through a platform provided by Consultant’s vendor PeerWell utilizing a smart phone based application (the “Platform”) providing injured claimant(s) requiring a digital PreHab (surgery preparation) and Rehab (recovery) program to be used for specific musculoskeletal conditions. City’s injured claimant will need to have a smartphone, Ipad or tablet to download and accept the app’s terms and conditions. Such service shall be used in conjunction with Consultant’s telephonic or field case management services. If City’s injured claimant does not activate the Platform app, there will be no fee billed to City. Consultant’s Pre-Hab (Surgery Preparation) and Rehabilitation (Recovery) Services will be made available to injured claimants with an existing claim in conjunction with any medical care, where the injured worker requests such care.
3. PROFESSIONAL FEE
(a) Consultant’s case management nurses and vocational rehabilitation counselors are required to be licensed in the jurisdictions they provide patient care or counseling. Consultant’s case managers may provide care in multiple jurisdictions. Such case managers are required to maintain multiple state licenses and corresponding continuing education credits in maintaining these licenses. Additionally, Consultant’s case managers are required to utilize up to date nationally recognized treatment guidelines, including American College of Occupational and Environmental Medicine (ACOEM), Official Disability Guidelines (ODG) and the MDGuidelines. An incremental professional fee as described hereunder in the attached Rates and Costs Exhibit shall be invoiced to City for the substantial costs associated with obtaining and maintaining the national guidelines for Consultant’s case management nurses. Such professional fee allows Consultant to maintain the applicable licenses and certifications for Consultant’s case managers as well as keeping appropriate treatment guidelines up to date.
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Care Advocacy Services
Terms and Conditions
1. DESCRIPTION OF SERVICES
(a) Care Advocate nurse service (“Care Advocate nurse”) are provided immediately following the work injury to guide the claimant’s injury recovery, up to 30 days following injury. The Care Advocate nurses oversee clinical assessment of the injury severity, validate/secure medical information, act as patient advocates and set expectations for medical care and return to work. They identify the most appropriate treatment and/or most cost -effective health care alternatives. Care Advocate nurses may confer with the adjuster, attending physician, other medical providers, employer(s), attorney(s), the patient and the patient’s family.
2. DELIVERY OF SERVICES
(a) Consultant shall provide Care Advocate Services as described hereunder and in Section 2 to City upon receipt by Consultant of specific requests from City, however unless otherwise agreed to by the parties, those cases that meet the Care Advocate referral criteria as mutually agreed shall be automatically referred to the Care Advocate Service.
(b) Care Advocate nurse service: Care Advocate nurse service includes a four-point contact with claimant, employer, claims professional and provider. Consultant care advocates do the following: (i) facilitate communication among all appropriate parties regarding the diagnosis, prognosis and treatment plan provided by claimant’s treating physician, (ii) channel or direct claimant to a PPO Network provider as appropriate, (iii) monitor and facilitate treatment planning, (iv) coordinate early return to work, and (v) subsequently provide periodic assessments of treatment and return to work plans up to 30 days following the work injury. Care Advocate nurse s may recommend additional services or coordinate claim closure, as appropriate.
(c) Care Advocate nurses are responsible for completing detailed documentation within CareMC focusing on the claimant’s medical condition, treatment plan and return to work status. Documentation includes but is not limited to primary injury diagnosis, comorbidities, treatment plan, medical goals, obstacles to recovery, work status and return to work.
(d) Care Advocate nurses act as nurse consultants to the claim team. (e) Care Advocate nurses act as claimant advocates.
(f) Care Advocate nurses assess appropriate medical follow -up, work closely with the claim team to identify potential barriers to recovery that may require further follow -up or additional services and develop medical action plans to ensure timely recovery and restoration of function.
Bill Audit, Review and Payment Services
Terms and Conditions
1. DESCRIPTION OF SERVICES
(a) Consultant’s proprietary bill review program enables an application of the appropriate standard f ee schedules or usual and customary values, includes PPO, Technical and Clinical Review, and CERiS, applied to provider bills.
2. DEFINITIONS
Bill (per Bill): Each transaction of a bill is considered a separate per bill count. Consultant is able to logically link transactions across logical sequences, but each is its own bill transaction. 21 30
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Clean/Prepared Bill: When the provider charges are deemed to be an accurate reflection of the services rendered based on the provider’s documentation. CorVel’s network solutions savings such as Clinical Review and Technical Evaluation as defined hereunder such Description of Services and other review types can be applied first to the bill for the bill to qualify for the Prepared Bill status. Once at the prepared bill state Standard Fee Schedule savings can be applied.
Clinical Review: An additional level of review performed by nurses, system, or coding experts to evaluate appropriateness, relatedness of submitted charges with provided documentation.
Implant Analysis: Review of implant charges submitted to a proprietary pricing database and documentation. Implant Analysis results are included as part of Clinical Review.
Line Item Bill Review (LIBR):
Out of Network Line Item Bill Review:
· Original charge data
· U&C review by zip code
· Fee re-bundling and error removal
· Separation of charges by diagnosis/procedure
· Facility to facility cost comparison
· Individual facility chargemaster analysis and price trending Fair and Reasonable - Universal Chargemaster: The Universal Chargemaster is a compilation of individual hospital line item descriptions from over 85% of the nation’s hospitals. It is a virtual thesaurus of hospital billing terms, codes and abbreviations. Specific, unique line item descriptions are defined by the Universal Chargemaster and appropriately compared to the same service or supply for other hospitals in the same geographical area.
Minimum Transaction Fee (MTF): For each bill transaction if the fees on a bill transaction instance do not meet the minimum transaction fee amount, the difference between the fees and the min transaction fee will be automatically added to the fees.
Negotiations: A one time or ongoing agreement with the provider to accept a specific payment amount.
PPO Network Access: A preferred provider organization (PPO) is a medical care arrangement in which medical professionals and facilities provide services at a negotiated/contracted rate. PPO medical and healthcare providers are called preferred providers.
Provider Sendback: Sendbacks occuring when a bill instance does not have enough supporting information from the provider to be a Prepared Bill. The bill is sent back to the provider requesting further information.
Standard Fee Schedule: Savings defined as the amount reduced from the Prepared Bill status to the jurisdictional state fee schedule amounts when those amounts are expressly assigned a specific value, not through reference methodologies developed by a third party or federal agency. 22 31
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Substantive Denials: Sendbacks occur when a bill instance does not have enough supporting information from the provider to be a Prepared Bill. The bill is sent back to the provider requesting further information. If the provider does not provide the necessary supporting information after 90 days of the send-back status all bill savings will be considered Substantive Denial Savings and charged accordingly through an automatic bill instance. If the bill is later submitted through another bill instance with further information from the provider, another review will occur which may reverse all or part of the Substantive Denial savings and fees.
Technical Evaluation: Applicable to bills when reimbursement is not fully addressed in the jurisdictional fee schedule. State regulations may require payment to be made in accordance with payment methodologies developed by a third party (typically the Centers for Medicare and Medicaid Services (CMS)), often with exceptions or special exemptions added by the state.
UCR: “UCR” is defined as:
· Usual – A charge is considered “Usual” if it is the fee that most providers in the area charge for the same service.
· Customary – A charge is considered “Customary” if it is within the range of fees that most providers who practice in the area charge.
· Reasonable – A charge is considered “Reasonable” if it is both usual and customary or if it is justified by the City because of complexity. City, Consultant or its designees use a nationally recognized third party database for UCR charges.
In determining UCR prevailing rates, customers, Consultant or their designees use either (a) Consultant’s Enhanced Bill Review database or other nationally recognized databases to provide benchmarks for hospital charges in a hospital Health Care Provider’s geographic area and (b) databases provided by FAIR Health, Inc. or other nationally recognized databases to provide benchmarks for charges by non-hospital Health Care Providers in the applicable geographic area. The UCR prevailing rate is the 80th percentile of the relevant database benchmark for the fees and charges in provider’s geographic area.
3. DELIVERY OF SERVICES
(a) C
ity ’s Obligations
(i) During the term of this Agreement, unless agreed to otherwise by the parties in writing, City shall utilize Consultant exclusively for audit, review and repricing services for Bills related to workers’ compensation claims. A breach of the foregoing obligation shall constitute a material breach under this Agreement. Without limiting any other remedies available under law, a breach of the foregoing obligation with respect to PPO (as defined hereunder in Peer Review Description of Services) Provider Bills wi ll result in immediate termination of all PPO discounts provided by Consultant as defined under the Rates and Costs Exhibit. (b) Consultant ’
s Obligations Consultant shall provide bill review services defined hereunder and described herein to City upon receipt of specific requests from City. In the absence of instructions from City to the contrary, which Consultant must approve, Bill Review Services shall be performed as described herein.
(i) B ill Review Services shall be completed within a reasonable period of t ime of Consultant’s receipt by Consultant of all necessary billing information from City (“Complete Billing Information”).
(ii) To facilitate timely processing Consultant shall process (A) each Provider Bill within a reasonable period of time and within industry standards after Consultant’s receipt thereof, and (B) batches of Provider Bills on a daily basis or as volume dictates. 23 32
Agreement No. A-8455
(iii) Consultant shall process PPO Provider reimbursements on behalf of City in accordance with industry standards from receipt of the corresponding bill review audit analysis from Consultant.
(iv) C onsultant will be responsible for monitoring, “flagging” and returning to City duplicate copies of a Bill (“Duplicates”).
(v) Any conflicts or complaints from medical providers (“Complaints”) concerning Bill Review Services completed by Consultant initially will be handled directly by Consultant. Consultant will provide an initial response to a Complaint and will send a written response to the complainant that summarizes the nature of the Complaint and the steps Consultant has taken to resolve it. City may be asked to interject itself into a Complaint between Consultant and a medical provider to resolve the Complaint in a m anner acceptable to Ci ty and as needed by Consultant. Notwithstanding the foregoing, City shall retain full responsibility for payment of all benefits and any other expenses or services required to be paid or provided under applicable policies or state and federal workers’ compensation laws. (vi) C onsultant agrees to supply City in the Consultant’s standard format a transmission reflecting the results of the Bill Review Services provided hereunder. (c) Savings for the Fee schedule or usual and customary service shall be:
(i) for states having a Standard Fee Schedule: (A) the medical provider’s original bill amount; less (B) the billed amount resulting from the allowance based on specified conversion factor(s) multiplied by referenced value(s).
(ii) for states not having a state mandated Fee Schedule: (A) the medical provider’s original bill amount; less (B) the bill amount resulting from UCR.
(d) Scanning Services
(i) Consultant will provide Scanning Services and, when appropriate, Optical Character Recognition (“OCR”) Services. Consultant will timely and within industry standards, scan all bills and attached medical notes delivered to Consultant necessary for providing Bill Review services. Subject to applicable law and obtaining any required authorizations, Consultant also shall provide Scanning Services for additional claim-related documentation. (ii) All material scanned by Consultant hereunder shall be accessible to City through CareMC.
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Agreement No. A-8455
Clinical and Technical Assessment Services
Terms and Conditions
1. DESCRIPTION OF SERVICES
(a) C linical and Technical Assessment Services. Consultant provides this service to evaluate state specific complex rules and verify coding by providers when appropriate and supported by documentation. This can include clinical review to validate coding is correct for all applicable provider bills, a mbulatory surgical center bills, and all hospital bills (inpatient and outpatient) including:
(i) r eview and analysis of codes, charges, and billing structure for incorrect coding, incorrect billing, bundling, and up-coding of procedures which affect Standard Fee Schedule values; (ii) review of bills, records, and documentation by a nurse and/or by a coder; (iii) separation of charges not related to the compensable injury; (iv) review and apply complex state specific rules;
(v) application of utilization review determinations and clinical edits; (vi) diagnostic related group validation (i.e., verification that the diagnostic related group billed is appropriate for the services rendered); and
(vii) cost shifting of revenue and CPT codes.
2. DELIVERY OF SERVICES
(a) Consultant will timely and within industry standards, complete R eview Services and return the reviewed Bills to City, with any adjustments to identified overcharges. (b) Savings for the review services shall be:
(i) for states having a state mandated Standard Fee Schedule: (A) the bill amount in the Fee Schedule; less (B) the bill amount resulting from the nurse review services. (ii) for states not having a state mandated Standard Fee Schedule: (A) the medical provider’s original bill amount; less (B) the bill amount resulting from the nurse review services. (iii) for states having a state mandated Standard Fee schedule (A) the medical provider’s original bill amount; less (B) the bill amount resulting from technical review services. (iv) for states not having a state mandated Standard Fee Schedule: (A) the medical provider’s original bill amount; less (B) the bill amount resulting from the technical review services. (c) C onsultant Responsibilities
(i) Consultant shall pay bills reviewed by Consultant in a timely manner in accordance with all state guidelines, and City agrees to waive any secondary vendor bill review and/or other retrospective reviews regarding all bills for which Consultant has secured a reduction from the original billed charges.
(ii) If a medical provider submits an appeal, the bill will be reviewed again and, if any adjustment is necessary, Consultant will provide that information on the Explanation of Review (EOR).
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Agreement No. A-8455
CERiS
(Hospital Bill Itemization Review Services; Negotiation Services; Implant Cost Review Service) Terms and Conditions
1. DESCRIPTION OF SERVICES
(a) H ospital Line Itemization Review Services. CERiS , a wholly owned subsidiary of CorVel Corporation, performs Services on Hospital Bills (inpatient and outpatient) consist ing of procurement of actual bill itemization including (i) a line -by-line validation and comparison of the itemization description charges actually billed by a particular hospital to what CMS billing guidelines allow to be separately billed for in order to disallow inappropriate charges, and then will compare the valid itemization descriptions to the average itemization description charges utilized by other hospitals within a pre -designated geographic area, and (ii) a review of charges that fall outside of any pre- contracted discounts or fee schedules, and generates payment recommendations in accordance with the City’s “Payors Allowable” language. This service does not itself include negotiation services nor Implant Cost Services.
(b) Negotiation Services. (
CERiS) will provide negotiation services with respect to all Hospital Bills (inpatient and outpatient). Consultant will contact the provider for agreement of the negotiated rate. A signed agreement regarding such rates will be maintained by Consultant . Consultant will use its commercially reasonable efforts to enter into an agreement with providers regarding negotiated rates in accordance with a mutually agreed upon schedule.
(c) Implant Cost Review Service. (
CERiS) includes Implant Cost Review services with respect to the applicability of the City ’s “Payors Allowable” plan or policy language that specifically addresses implant payments. Consultant will identify and provide the manufacturers implant cost through its proprietary repository of national implant invoice data. Consultant then determines the recommended payment in accordance with the City ’s “Payors Allowable”. In the event there is insufficient implant invoice data for the requested implant, Consultant will notify the City and Consultant shall not b e responsible for any costs, fees, damages or penalties for any such inability of Consultant to produce a cost savings per City’s request.
2. DE LIVERY OF SERVICES
(a) When applicable Consultant will timely within industry standards, complete CERiS Services and return the reviewed Hospital Bills to City , together with a written summary of any adjustments to identified overcharges.
(b) Savings for the CERiS Services shall be:
(i) for states having a state mandated Fee Schedule: (A) the bill am ount in the Fee Schedule; less (B) the bill amount resulting from CERiS Services.
(ii) for states not having a state mandated Fee Schedule: (A) the medical provider’s original bill amount; less (B) the bill amount resulting from the CERiS Services. (c) City
Responsibilities
(i) City shall pay bills reviewed by Consultant in a timely manner in accordance with all state guidelines, and agrees to waive any bill audit and/or other retrospective reviews regarding all bills for which Consultant has secured a reduction from the original billed charges. (ii) City will identify all bills that are not eligible for CERiS Services due to: (A) compensability; (B) a pre -negotiated rate with City or other previously established discount; (C) services that are “review only” due to litigation or other non-payment issues; and (D) duplicate bills. (d) If a medical provider questions the adjustment and/or balance bills the patient, and the claim payor notifies Consultant of such communication, Consultant will provide documentation of its findings. If 26 35
Agreement No. A-8455
the hospital provides corrective or qualifying information sufficient to alter our original adjustments, Consultant will revise its report, advise the claim payor of the new, corrected adjustment. Only in the event of a successful appeal of the reduction of the bill by the medical provider shall City be entitled to receive a credit for the portion of the fee previously charged for the amount of the adjustment successfully appealed.
Preferred Provider Network Access Services (PPO)
Terms and Conditions
I. DESCRIPTION OF SERVICES
(a) C onsultant ’s preferred provider organization is a network of hospitals, physicians and other providers (“Participating Providers ”) that offer services at pre-negotiated Provider rates (“PPO Network ”).
Consultant also provides state certified preferred provider organization networks in states that maintain such networks.
II. DE LIVERY OF SERVICES
(a) Consultant will provide City with access to its PPO Network provided it is the exclusive preferred provider organization utilized by City . Consultant may at any time and in its sole discretion add and/or terminate any provider to or from the PPO Network. (b) Consultant will provide City with a web-based directory of its PPO Network providers. (c) City agrees that, during the Term of this Agreement City will not contract directly or indirectly with Participating Providers made known to City under this Agreement. (d) City will make reasonable effort to channel all Covered Persons to the Participating Providers as are allowed under the laws of that service area or state.
CAREIQ Services
Terms and Conditions
I. DESCRIPTION OF SERVICES
CareIQ is Consultant Nationwide Ancillary Benefit Management Program. CareIQ’s network is comprised of direct provider contracts, affiliate networks and national vendor agreements. CareIQ is responsible to pay rendering providers timely for covered and approved services performed.
The CareIQ Ancillary Benefit Management Program includes; referral management and coordination, billing and invoicing, credentialed provider network management, and/or clinical oversight of treatment.
Services Included; Durable Medical Equipment, Home Healthcare, Transportation, Interpretation, Imaging and Diagnostics, Independent Medical Examinations, Age of Injury Determinations, Physical Therapy, Occupational Therapy, and other Rehabilitation and Ancillary Healthcare services.
II. P AYMENT FOR CA REIQ SERVICES
Consultant shall invoice and bill the CareIQ Services directly to the specific claims file.
Consultant reserves the right to increase and amend the rates set forth herein by notifying City of such amendment in writing, and City shall, if such amendment is unacceptable, have thirty (30) days from the date said notice is received to reject such amendment by delivery of written notice of rejection to Consultant. If Consultant does not receive such notice of termination within such thirty (30) day period, the amendment to the rates shall be deemed accepted by City and this Agreement shall continue in full force and effect, as so amended. 27 36
Agreement No. A-8455
Pharmacy Benefit Program
Terms and Conditions
I. DESCRIPTION OF SERVICES.
(a) Consultant shall be the exclusive provider of a Pharmacy Program inclusive of a PBM and a Provider Network representing participating pharmacy providers that are obligated upon and after identification of a participant within Consultant’s PBM to:
i. Accept a contracted rate, and
ii. Apply mandated processes and Consultant ’s Formulary and Concurrent Drug Utilization Review program at point-of-service before dispensing prescribed medications.
II. DEFINITIONS.
(a) “AWP” shall mean the Average Wholesale Price for a Brand or Generic Drug Product. Consultant bases City pricing off of the reported AWP value from Medi-Span and the date of service.
(b) “AWP Discount” shall mean the PBM discounts Consultant applies, per City ’s negotiated rates, to covered brand and generic drug products, Compound Drugs and specialty medications.
(c) "Brand Drug" shall mean a c overed drug defined as a brand name drug in PBM proprietary Generic Code Conversion ("GCC") logic.
(d) “Compound Drugs” shall be systematically identified when processing through the PBM via the Formulary. Drug compounding is often regarded as the process of combining, mixing, or altering ingredients to create a medication tailored to the needs of an indiv idual patient. Compounding includes the combining of two or more drugs. Compounded drugs are not FDA-approved. (e) “Concurrent Drug Utilization Review” (“DUR”) shall mean the algorithm systematically applied at a participating pharmacy before dispensing that c onsiders the Presenting Drug’s safety and efficacy in context with other drugs that have been dispensed. In addition, the algorithm includes applicable protocols and guidelines based on the Presenting Drug and specific claim history, such as the time period from the last fill of the same Drug.
(f) “First Fill” shall mean a prescription filled by a Participating Pharmacy for a limited supply of Covered Drugs for a claim that is not, at the time, eligible. First Fill transactions follow Consultant ’s First Fill Formulary. The First Fill Formulary is for the immediate treatment of injuries, including common exposure drugs/vaccines. The pharmacy is instructed to fill any formulary prescription written by the treating physician, whether or not the claim is accepted a s a workers' compensation claim. Most claims are ultimately accepted.
(g) “Formulary” shall mean Consultant ’s Workers’ Compensation Standard or state specific drug/drug class and brand/generic specific triggers systematically applied at a Participating Pharmacy before dispensing a Presenting Drug that prompts the pharmacy through its adjudication system to either:
dispense the Presenting Drug, convert from brand to generic, and attain approval to dispense.
(h) "Generic Drug" shall mean a Covered Drug, whether identified by its chemical, proprietary, or non- proprietary name, that (i) is accepted by the FDA as therapeutically equivalent and interchangeable with drugs having an identical amount of the same active ingredient; and (ii) defined as a generic drug in 28 37
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PBM proprietary GCC logic. In the adjudication process, Consultant applies City’s negotiated Generic Drug discount rate to the AWP value of covered generic drugs.
(i) “GCC” refers to PBM proprietary Generic Code Conversion logic. GCC logic converts Medi-Span codes to the brand and generic codes used for claims adjudication.
(j) “Good Samaritan (Emergency) Fill” shall mean a limited supply of Covered Drugs that are outside of the Formulary and typically dispensed outside of normal business hours (overnight, weekends or holidays) by a Participating Pharmacy without City’s or Consultant’s approval in order to meet, in the pharmacist’s professional judgment, an immediate or urgent need . City is responsible for payment of drug charges processed through good samaritan fills; Consultant assumes no liability.
(k) “Mail Order Program” or “Home Deliver Program” shall mean the managed program from which Covered Drugs are dispensed and billed through Consultant’s PBM. A pharmacy’s status as a mail order pharmacy does not indicat e participation in the Consultant PBM Mail Order Program. Mail Order participation is limited to designated pharmacies operating within the strict parameters of Consultant’s Mail Order Program.
(l) “Multi Source Brand” shall mean a Covered Drug specified as a brand name drug available from more than one manufacturer as determined by Consultant primarily using a combination of data fields provided to Consultant by Medi-Span (or another nationally available reporting source that may be selected by Consultant ). Multi Source Brand Drugs are eligible for conversions to Generic Drugs at the Participating Pharmacy.
(m) “Multi Source Generic” shall mean a Covered Drug specified as a multi source generic drug as determined by Consultant primarily using a combination of data fields provided to Consultant by Medi-Span (or another nationally available reporting source that may by selected by Consultant). Generic Drugs in their six month exclusivity period or limited supply drugs may be excluded from Multi Source Generic Drugs.
(n) “PBM” shall mean Pharmacy Benefits Manager. Consultant performs as the PBM on behalf of its Citys.
(o) “Presenting Drug” shall mean the drug ordered by the prescriber and presented on a signed prescription to a Participating Pharmacy and processed through Consultant’s PBM.
(p) “Rate application exceptions,” per Billing and Payments of Pharmacy Program (below) sections (d) and (e), apply when either State Fee Schedule AWP v alues or City ’s negotiated pharmacy benefit management AWP discount rates are lower than Consultant ’s Acquisition Price. Consultant ’s Acquisition Price reflects Consultant’s cost of the Covered Drug plus a processing and management fee.
(q) “Single Source Brand” shall mean a Covered Drug specified as a brand name drug available from only one manufacturer as determined by Consultant primarily using a combination of data fields provided to Consultant by Medi-Span (or another nationally available reporting source that may by selected by Consultant). Single Source Brand Drugs are not eligible for conversions to Generic Drugs.
(r) “Single Source Generic” shall mean a Covered Drug as determined by Consultant that may not have been purchased by pharmacies at standard Multi Source Generic Drug rates because of limited manufacturers, limited supply or exclusivity rights. In the adjudication process , City’s Brand Drug AWP Discount value may be applied to Single Source Generic Drugs.
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(s) “Specialty Medications” shall mean certain pharmaceuticals, biotech or biol ogical drugs, that are Covered Drugs used in the management of chronic or genetic disease, including but not limited to, injectable, infused, or oral medications, or products that otherwise require special handling. In the adjudication process, City’s Claims Professional’s approval is required, and City ’s Brand Drug AWP Discount value and dispensing fee may be applied irrespective of the Presenting Drug’s GCC status.
III. DELIVERY OF SERVICES.
(a) Consultant shall provide its Pharmacy Program’s PBM and Network for the benefit of City.
(b) Eligibility, First Fill, Pharmacy Identification (ID) Cards, and Mail Order/Home Delivery.
Pharmacy ID cards contain the necessary data elements to enable a Participating Pharmacy provider to electronically process through and transmit claim data to Consultant ’s PBM. The electronic transmission that occurs at the point of sale is required for application of Formulary, Concurrent Drug Utilization Review and contractual pricing.
i. City agrees to promptly provide Consultant all information needed to produce and distribute Pharmacy ID cards to e ligible claimants. Subject to applicable law, City will instruct eligible claimants to use the Pharmacy ID cards at participating network providers in order to facilitate the Pharmacy Program.
ii. Distribution of Pharmacy ID cards does not guarantee that Pharmacy ID cards will be appropriately utilized by e ligible claimants or Participating Pharmacies; therefore, City understands that claims assigned by Pharmacies to third party billers or paper bills submitted by the Pharmacies are not adjudicated through the prospective PBM. iii. Consultant, agrees to produce and distribute Pharmacy ID cards to Eligible Claimants upon receipt of all necessary Eligible Claimant information from City.
Consultant will also send an introduction letter to the Eligible Claimant along with the Pharmacy ID card.
a. Consultant will provide access for Eligible Claimants to the PBM Mail Order Program.
Consultant will work with City to establish the parameters of the Mail Order Program and the process which will be utilized to encourage Eligible Claimant use of the Mail Order Program.
(c) Consultant’s PBM will present a proprietary or state mandated Formulary to City . Upon presentation of identification to a Participating Pharmacy, the Formulary w ill trigger the Participating Pharmacy’s adjudication system to either:
i. Automatically dispense certain medications, or Obtain Prior Authorization (PA) approval from claims professional to dispense,
(d) Consultant’s PBM will implement a Concurrent Drug Uti lization Review (“DUR”) program on behalf of City, Concurrent DUR includes a review of the drug history at the time the prescription is presented. Absent City ’s directions, DUR shall be performed in accordance with Consultant ’s PBM’s standard service model.
IV. BILLING AND PAYMENTS OF PHARMACY PROGRAM.
(a) Financial obligations of parties.
(i) City shall be financially responsible for all drug charges incurred by claimants for dispensed medications processed under Consultant ’s PBM. Consultant assumes no liability for drug charges with the exceptions noted below in subsection iii. 30 39
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(ii) If the Consultant claims professional determines, upon receipt of Consultant’s PBM invoice, that specific formulary and non- formulary drugs should not have been dispensed, the Consultant claims professional should inform the PBM as soon as possible.
1. The pharmacy benefit management will request a reversal from the Participating Pharmacy. If granted, Consultant will reverse the drug charges, however, if the Pharmacy does not grant the pharmacy benefit management ’s request, City is responsible for payment of the drug charges; Consultant assumes no liability for drug charges with the exceptions noted below in subsection iii.
(iii) Upon receipt of an invoice, Consultant claims professional may timely dispute charges for drugs that were dispensed in error, triggering Consultant’s PBM to reverse the drug charges, by notifying Consultant for any of the following reasons:
1. Consultant’s PBM and/or the Participating Pharmacy’s viola tion of Formulary or Utilization Review Parameters set forth in City’s DUR program, or in the Claimant Level Formulary; or
2. Duplicate or inadvertent entries or other clerical mistakes on a PBM invoice.
(b) Invoicing and Payment.
On a per Covered Drug basis Consultant will apply daily for all drug charges and fees related to the PBM directly to the claim file.
Consultant shall invoice and bill directly all prescription fees to the specific claims file.
Consultant uses Medi-Span as our AWP data source. Consultant ’s Medi-Span database is updated daily and AWP values are applied on the date of dispense.
In all states with the exception of California, City will be billed the lessor of the state fee schedule AWP or the Consultant’s negotiated rate.
(c) Both parties understand that pricing indices historically used (including under this Agreement) for determining the financial components of pharmacy billing rates are outside the control of Consultant and City. The parties also understand there are extra- market industry, legal, governmental and regulatory activities which may lead to changes relating to, or elimination of, these pricing indices that could alter the financial positions and expectations of both parties as intended under this Agreement.
Both parties agree that, upon entering into this Agreement and thereafter, their mutual intent has been and is to maintain pricing neutrality as intended and not to benefit one party to the detriment of the other. Accordingly, to preserve this mutual intent, if pricing neutrality does change and Consultant undertakes any or all of the following:
(i) Changes the AWP source, or other source if AWP is not applicable, across its book of business (e.g., from Medi-Span to First Databank); or (ii) Maintains AWP, or other source if AWP is not applicable, as the pricing index with an appropriate adjustment in the event the AWP, or other, methodology and/or its calculation is changed, whether by the existing or alternative sources; or (iii) Transitions the pricing index from AWP, or other so urce if AWP i s not applicable, to another index or benchmark (e.g., to Wholesale Acquisition Cost);
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City’s negotiated PBM pricing will be modified as reasonably and equitably necessary to maintain the pricing intent under this Agreement.
V. CALIFORNIA MODIFICATION
On April 15, 2016, the State of California Department of Industrial Relations applied the new Federal Upper Limit (FUL) index to the California Pharmacy Workers’ Compensation Fee Schedule. The new FUL index has resulted in a need for Consultant to modify our current pricing structure based on the fee schedule changes and our contract language.
The FUL’s impact and the modification is limited to generic drugs; brand drug pricing will not change. As per our contract, the modification will maintain “pricing neutrality” between both parties.
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Agreement No. A-8455
Peer Review/Medical Records Review Program
Terms and Conditions
I. DESCRIPTION OF SERVICES.
(a) Consultant shall provide access, and deliver the services described hereunder in connection with such access, to a panel of medical professionals who have been credentialed by Consultant as “Credentialed Providers” and who will perform Peer Review (“Peer Reviews”) and Medical Record Reviews (“MRRs”).
(b) Peer Review/Medical Record R eview is defined as the process of reviewing and commenting on the work, decisions and/or recommendations by one’s equal (peer) to ensure that it meets specific criteria such as federal and state regulations, and nationally accepted standards of care in re ndering medical services.
II. DELIVERY OF SERVICES.
(a) Consultant shall work only with Credentialed Providers under this Agreement. “Credentialed Providers” are medical professionals with respect to whom Consultant has performed its standard credentialing process. Consultant shall also verify that the medical professionals who are Credentialed Providers meet all applicable statutory and/or legal requirements regarding who can conduct a Peer Review or MRR. (b) City shall have the right to nominate medical professionals as candidates for addition to the panel of Credentialed Providers provided by Consultant for access by City (“Credentialed Panel”), subject to such medical professionals being credentialed by Consultant as Credentialed Providers. (c) City shall have the right, with written notice to Consultant, to request that Consultant cease using a specific medical professional from the Credentialed Panel for City ’s claimants. Upon receipt of such notice from City, Consultant shall promptly cease using the specified medical professional as requested by City in such notice.
(d) City may submit a request for a Peer Review or a MRR via phone, fax, or electronically via Consultant’s CareMC website, if applicable.
(e) Consultant shall ensure that the MRR is assigned to a provider within 2 business days of receipt of request or in accordance with applicable State law.
(f) Consultant will copy required medical records for the Peer Review or MRR as provided by the City ’s file handler or legal office. Consultant will obtain additional medical records as requested. (g) Consultant shall deliver to City completed Peer Review and MRR reports within 7 business days of assignment to the Credentialed Provider. Prior to such delivery to Cit y, Consultant shall complete its quality review of such report.
(h) Consultant shall provide City quarterly activity reports within twenty (20) business days following the applicable quarter.
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Medicare Set-Aside Services
Terms and Conditions
I. DESCRIPTION OF SERVICES
a. Medicare Set -Asides: Consultant provides an extensive review of medical records and medical bills, producing a comprehensive report and cost projection outlining future Medicare eligible costs in anticipation of settling out fu ture medical care on a City ’s employee or insured individual. Costs are determined through Consultant ’s proprietary Bill Review system as well as utilization of the online Red Book™ access for medication costs. Red Book™ is the accepted authority by Centers for Medicare Services (“CMS”) for pricing on all medications. b. Life Care Plans/Future Cost Projections:
Life Care Plans/Future Cost Projections are a plan for
optimal utilization of health care dollars that document objective view of the future health needs, services and related costs. It provides for comprehensive reports summarizing medical treatment and care and outlining lifetime needs for a City’s employee or injured individual when they are catastrophically injured. Life Care Plans/Future Cost Projections are also used both for litigious settlements as well as projecting reserves setting.
c. Medicare Conditional Payment Resolution: Consultant’s service includes securing Medicare
Conditional Payment letters and disputing the Medicare Conditional Payments unrelated to the claim. Consultant communicates directly with the Medicare contractors, the CRC (Commercial Repayment Center) or BCRC (Benefits Coordination & Recovery Center) to resolve the Medicare Conditional Payment debt.
II. DELIVERY OF SERVICES OF MEDICARE SET ASIDES
a. City shall provide the Consultant Medicare Set-Aside Hub office with a copy of the first report of injury, most recent two years of medical records and medical bills including indemnity payout, all operative reports, IMEs/AMEs as well as orders rendered by the workers’ compensation judicial system. Appropriate releases for completion of request for service will be forwarded either to the City or, at the City’s request, directly to counsel representing the injured worker to obtain the injured worker’s signature.
b. City may submit a request for a Medicare Set-Aside via email, phone, fax, or electronically via Consultant’s CareMC website, if applicable.
c. A certified Medicare Consultant (“Consultant”) will review the medical records and bill summary, prepare a detailed summary of the records and a projection for future medical expense which are Medicare eligible. If requested, the Consultant will also provide a projection of those costs which are not Medicare eligible in order to provide the City with their total medical exposure.
d. The Consultant will return the completed Medicare Set-Aside report to the City within fifteen (15) business days of receiving all relevant medical records and related information. If a rated age is warranted, the Consultant will acquire same. If the Medicare status of injured party is unknown or unclear, a request for Medicare status will be submitted to the Social Security Administration. Once the Medicare status is known, the Coordination of Benefits Contractor will be notified and conditional payments requested. 34 43
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e. Upon City’s request, Consultant Medicare Set-Aside Hub office will submit through the web- portal all required documents to enable CMS to review and approve the proposal. Items submitted include the Medicare Set-Aside report, the tentative settlement amount, along with other required documentation, to the Centers for Medicare & Medicaid Services (CMS).
Upon receipt, Consultant Medicare Set-Aside Hub office will forward the CMS Determination letter to the City. Final executed settlement documents (reflecting CMS recommended Medicare Set-Aside amount) will be provided to Consultant Medicare Set- Aside Hub by the City/counsel and then forwarded by Consultant to CMS through the web- portal.
f. Upon request from City, Consultant shall provide City quarterly activity report within twenty (20) business days following the applicable quarter.
III. DELIVERY OF SERVICES OF LIFE CARE PLANS/FUTURE COST PROJECTIONS
a. City shall provide all available medical records and billing to Consultant Medicare Set-Aside Hub office as well as any other pertinent records for initial review. b. For a Life Care Plan, a visit to the residence of the City’s employee or injured individual with interview of claimant and family will be conducted after permission is acquired by the City.
The interview will include evaluation of the home setting, extensive information gathering, and pictures of the various equipment and housing structures. c. Letters will be sent to all treating physicians to obtain their opinions on future medical treatments including medications and therapies for the claimant. The physician’s opinions will be included as recommendations within the Life Care Plan summaries. d. Future cost projections are utilized to immediately set reserves for future medical needs regarding catastrophic or major injuries. Home visits are not conducted for a future cost projection.
e. City may submit a request for a life care plan or future cost projection via email, phone, fax, or electronically via Consultant’s CareMC website, if applicable.
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Agreement No. A-8455
Medicare Agent Services
Liability Claims
Terms and Conditions
I. DESCRIPTION OF SERVICES
In order t o assist City, as a Responsible Reporting Entity (“RRE”), in complying with the mandatory quarterly electronic reporting requirements issued by the Centers for Medicare/Medicaid Services (“CMS”) under the Medicare/Medicaid and S -CHIP Extension Act of 2007, Section 111 (the “Act”) regarding certain injured parties who are Medicare Beneficiaries, Consultant provides Medicare Agent services as described below subject to the provisions of the final regulations to be issued by CMS.
II. DESCRIPTION OF MEDICARE AGENT SERVICES
(a) Upon designation as City’s Medicare Agent, Consultant shall provide City assistance with City’s registration as a RRE.
(b) Consultant and City will establish a manual interface to facilitate the exchange of specific claims data required to be reported to CMS und er the Act; thereafter, as City ’s designated Medicare Agent, Consultant will initiate a test file interface with CMS within the statutory timeframes required by CMS under the Act.
(c) Upon successful completion of the test file interface, Consultant will commence an ongoing monthly query process on behalf of City where Consultant will transmit through the CMS Query Tool certain basic claims data elements (claimant name, social security number, date of birth and gender) on the liability claims the Cit y provides to Consultant via the manual interface, for CMS to determine if such claim data elements match a valid CMS record indicating Medicare eligibility. Consultant will report the results of such query on CareMC and in a Monthly Eligibility Query report for City to review. In the event the Medicare Reporting Queue determines any such liability claim is invalid due to an error or missing information, then City shall be responsible for reviewing, researching and correcting such claims data from the Mon thly Eligibility Query report supplied by Consultant to the City, for resubmission by Consultant through the CMS Query Tool on the next monthly query process transmission; provided, however, if City so requests, Consultant will provide such research regard ing Medicare eligibility at an additional hourly rate and such research shall include claimant’s name, social security number, date of birth, gender and any other required data field.
(d) Once it is determined through the Medicare Reporting Queue that a liab ility claimant is Medicare eligible, the City will provide Consultant through the manual interface all data elements necessary to commence the transmission of mandatory quarterly electronic claims reporting of those liability claimants to the CMS Benefits Coordination & Recovery Center (BCRC) on City ’s behalf within the specific 7- day reporting period assigned to City by CMS. A copy of the initial report shall also be posted by Consultant on CareMC for City to review. The BCRC will confirm either acceptance of the Medicare eligible claims thus reported or return any files for which data is missing or incorrect. Consultant shall post on CareMC and provide Quarterly Claim Submission reports to the City with any error reports from the BCRC showing such files containing missing or incorrect data for City to research and correct by the manual interface to Consultant . Once corrected, Consultant will enter the data and resubmit such files to the BCRC during the next quarterly reporting file.
(e) Consultant, as City’s designated Medicare Agent, will continue to electronically transmit to the BCRC on a quarterly basis all new and updated liability claims provided by the City to Consultant through the manual interface, identified through the Medicare Reporting Queue and the City provided Consultant the necessary data to report the City’s Medicare eligible claims. (f) Consultant, as City ’s designated Medicare Agent, will also electronically transmit to the BCRC any monetary settlement data received by the City to Consultant through the manual 36 45
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interface on City’s Medicare eligible claims.
(g) Consultant shall provide City quarterly activity reports within twenty (20) business days following the applicable quarter.
III. LIMITATION OF LIABILITY REGARDING MEDICARE AGENT SERVICES In order to assist C ity, as a RRE, in complying with the mandatory quarterly electronic reporting requirements issued by the CMS under the Medicare/Medicaid and S -CHIP Extension Act of 2007, Section 111 (the “Act”) regarding certain injured parties who are Medicare Beneficiaries, Consultant agrees to provide Medicare Agent services as described in the Case Management Services Description of Services attached hereto subject to the provisions of the final regulations to be issued by CMS, including information relating to such claimant, and the establishment and maintenance of an electronic data interface with CMS’s computer system to the extent required by law and within the time period required by CMS so as to avoid the incurrence of penalties and fines (“RRE Reporting Obligations”).
(a) In order for City to meet its RRE Reporting Obligations, City shall promptly review the results of the Medicare Reporting Queue, research any errors or missing data and resubmit such corrected or missing data promptly to Consultant within the applicable timeframes so that Consultant can timely report such corrected or missing data to CMS.
(b) In the event that information supplied by City to Consultant is incorrect, incomplete or untimely delivered and prevents Consultant from completing a timely transmission to CMS, or leads to errors in transmissions to CMS, City shall be solely responsible for promptly resubmitting corrected data to Consultant, and Consultant will not be liable for any damages, fines, penalties or other amounts to the extent arising from such incorrect, incomplete or untimely delivered information. Consultant shall notify City via a posting on CareMC and the Quarterly Claim Submission report if Consultant receives notice from CMS that a transmission submitted by Consultant on behalf of City as an RRE contains incorrect, incomplete or untimely delivered information. The City shall correct errors necessary to complete successful transmission to CMS.
(c) City shall release Consultant from any and all penalties or other fines imposed by CMS and its related governmental agencies, in the event information supplied by City to Consultant is incorrect, incomplete or untimely delivered and prevents Consultant from submitting a report to CMS or leads to errors in submissions to CMS.
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Agreement No. A-8455
Clearinghouse Payer Agent Services Program
Terms and Conditions
1. DESCRIPTION OF SERVICES
(a) Clearinghouse Payer Agent Services: Consultant shall act as City’s agent under this Agreement. Consultant’s clearinghouse receives bills from health care providers in electronic form, verifies the data integrity of the information on the bills, and routes directly to Consultant’s Bill Review system for completion of Consultant’s Bill Review service.
Explanation of Benefit (EOB) information will be transmitted to providers from Consultant in the ANSI 835 format. Consultant will send 835 data to health care providers via its clearinghouse upon Consultant’s completion and approval of all Explanation of Benefits (EOB’s) via Consultant’s Bill Review service in compliance with the local governing state laws and regulations.
(b) Compliance with applicable law: Consultant shall ensure that Clearinghouse Services are provided in compliance with the applicable laws, statutes, rules and regulations of the state service shall be provided in. City agrees to timely provide to Consultant information and assistance requested by Consultant and reasonably required to ensure such compliance.
2. SETUP AND DELIVERY OF SERVICES
(a) Routing Directly to Bill Review: A test sample of City’s bills will be pulled from the clearinghouse test system and imported to the bill review test system. Bill review results will be output to City through the existing format. Routing bills through Consultant’s Test bill review system may require three to four weeks. Consultant will make reasonable efforts to begin testing within five business days of the request for services.
3. PRICING STRUCTURE
The cost of Clearinghouse Payer Agent Services is as follows:
• For City for which Consultant provides bill review services – No additional charge
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A
dvocacy 24/7 Nurse Triage Services
Terms and Conditions
C
onsultant shall provide to City the following Services related to Nursing Coordination of Care Services:
• A
nswer calls received 24 hours a day/7 days per week on Consultant maintained City triage telephone line.
• Instruct the caller / injured employee on first aid and or initial injury treatment. • Facilitate assessment at a designated outpatient clinic or emergency room as needed. • Follow up with the injured employee within 24 hours of initial report to evaluate current condition. • Document all calls and communicate to appropriate parties.
A
n incident shall encompass
• The nurse receipt of the initial call,
• The gathering of necessary information and distribution of said information to the appropriate parties, and • O
ne clinical follow-up to the injured employee in the first 24 hours following the initial call.
Med
ication Review Services
Terms and Conditions
I. DESCRIPTION OF SERVICES.
(a) Consultant acknowledges there is a subset of patients in the system that do not improve despite extensive diagnostic testing and numerous treatments. Consultant knows these relatively fewer cases drive a disproportionate amount of costs. Interestingly, these “creeping catastrophic” claims often present as a simple strain or sprain injury or diffuse spinal pain. There is ample data to suggest that bio-psychosocial factors can amplify, sustain or mitigate a patient’s perception of disability in these cases. Consultant shall use clinical modeling to identify those patients at risk for delayed recovery and apply an interdisciplinary bio-psychosocial approach to their care. (b) Consultant offers a variety of interventions that are recommended depending on the severity and chronicity of the claim. They can be utilized separately or integrated in a more comprehensive management plan again depending on claim severity and patient characteristics.
II. DELIVERY OF SERVICES.
Medication Review :
• C onsultant ’s contracted physician will evaluate the medical necessity of each currently used or prescribed medication.
• C onsultant ’s contracted physician will recommend elimination of duplicative medications.
• C onsultant ’s contracted physician will determine and recommend medications that may replace and be equally or more effective than one or a group of currently 39 48
Agreement No. A-8455
used/prescribed medications.
• Consultant’s contracted physician will recommend medications that are pharmacologically similar to currently used or prescribed medications when available at a lower cost (same or similar class, less cost, generic when available). • Consultant’s contracted physician will attempt Peer to Peer contact by calling the PTP.
• Consultant’s contracted physician will provide the City a written agreement from the prescribing physician (if agreement is reached) for alternate treatment plan. • On cases where agreement is not met between Consultant and the primary treating physcian a written report will be generated and sent to the City that includes a written summary of all activity that will include recommendations, rationales and potential savings identification made by Consultant’s contracted physician. • Allowances will be made for the attending primary treating physician to bill for their time spent on the teleconference at the applicable fee schedule.
Wellness Program:
Cases can be initially referred to a network of cognitive behavioral therapists who function to help the patient/claimant improve their pain coping skills, change their perception of disability and decrease fear- avoidance behaviors that are often a significant barrier for return to work.
TeleHealth Services
Terms and Conditions
Consultant shall provide TeleHealth visits to City’s injured employees who opt for such service for as level of care determinations are made through our 24/7 nurse triage hotline. A TeleHealth visit is a single synchronous virtual consultation through Consultant’s third party vendor platform between a qualified professional and a claimant (“TeleHealth”).
Consultant’s 24/7 triage nurses are trained to provide an initial assessment and will provide immediate referral to medical care when needed. Nurses may refer to TeleHealth as appropriate (i.e., musculo- skeletal injuries).
• TeleHealth virtual visits are always an “option” for the injured employee. • If opted by the injured employee, Consultant connects the injured employee to a physician immediately via a computer, tablet or phone.
• If the injured employee decides that he/she does not want a TeleHealth visit, Consultant will immediately offer to schedule the injured employee with a traditional, in-person PPO medical provider located at a convenient, clinic-based location.
A TeleHealth “visit” is defined as “A Consultation Unit” is a single synchronous consultation through the Platform between a Qualified Professional and a patient.”
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Agreement No. A-8455
Workers’ Compensation Lien Resolution Services
Terms and Conditions
1. DESCRIPTION OF SERVICES
a) L ien Resolution Services. Consultant shall provide Lien Resolution Services for City through its CareMC Application to control and provide resolution and closur es to lien file cases. Consultant shall utilize industry standard processes including having Consultant attend Workers Compensation Appeals Board (“WCAB”) conferences & trials, and negotiate as required or applicable. b) W orkers Compensation Appeals Boards Serviced:
AHM – Anaheim SBR – San Bernardino
OXN - Oxnard SDO – San Diego
POM – Pomona VNO – Van Nuys
RIV- Riverside SAC – Sacramento
ANA - Santa Ana OAK – Oakland
LBO – Long Beach SFO – San Francisco
LAO – Los Angeles STK – Stockton
MDR – Marina Del Rey
c) Workers Compensation Appeals Boards Serviced on a case-by-case basis:
SBA – Santa Barbara RED – Redding
SLO – San Luis Obispo FRE – Fresno
SJO – San Jose BAK – Bakersfield
2. DELIVERY OF SERVICES
a) C laim Referral. Lien resolution services are on a referral basis per claim and subject to prior City approval.
b) Reporting. Consultant shall provide monthly reports at no charge to City. c) Case-in-chief walk-through service.
(i) Consultant shall provide Walk-throughs for pro-per cases, and as needed for litigated claims. (ii) City’s claims adjuster professional shall provide referrals for each lien resolution settlement agreement.
(iii) Consultant shall prepare all required documentation and file packets, obtain the adjudicating number and the order approving from the judges at the WCAB. (iv) Results are reported by Consultant to City weekly at the end of the same week they are assigned. d) S ervice and Review of Initial Discovery.
Consultant shall review, gather and serve all documents relevant to the case and the outstanding liens that will be necessary to satisfy the requirements of discovery and due process, including, but not limited to: Settlement documents, medical reports, Request for Authorizations (“RFA’s”) Utilization Review (“UR”)determinations, objection letters, and bill review. e) D eclaration of Readiness Filings.
Consultant shall utilize an electronic filing of a declaration of readiness to proceed to request a hearing date with the WCAB in order to facilitate or expedite Lien Resolution and/or Litigation (if necessary). f) A ttendance at the WCAB for Lien Conference and/or Lien Trials Consultant shall have its own experienced hearing representatives appear at the WCAB on behalf of the City with the goal of resolving any outstanding liens, or moving towards litigation (if necessary). 41 50
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g) Litigation Review and Support
Consultant shall review and analyze the lien claimant evidence provided in support of Consultant’s pos
ition when a matter is set for a lien trial.
h) C onsultant’ s Obligations
(i) Consultant shall provide Lien Resolution Services as described herein to City upon receipt of specific referral from City. In the absence of instructions from City to the contrary, which Consultant must approve, Lien Resolution Services shall be performed as described herein. (ii) Consultant shall complete its Lien Resolution Services within sixty (60) days of referrals without litigation, provided there are no delays from litigation. (
iii) Any c onflicts or complaints from providers and/or their lien claimant vendors (“ Complaints”) concerning Lien Resolution Services completed by Consultant initially will be handled directly by Consultant. Consultant will provide an initial response to a Complaint within one (1) business day following the date on which Consultant received the Complaint. Consultant will send a written response to the complainant within five (5) business days that summarizes the nature of the Complaint and the steps Consultant has taken to resolve it. A copy of this response will be sent to the attention of the designated City account representative. Different or more specific parameters of Consultant 's authority to respond to and resolve Complaints hereunder may be agreed to mutually by the parties. Further, City shall have the right, but not the obligation, at a ny
tim
e, to interject itself into a Complaint between Consultant and a provider and to resolve the Complaint in a manner acc eptable to City at its sole discretion. Notwithstanding the foregoing, City shall retain full responsibility for payment of all benefits and any other expenses or services required to be paid or provided under applicable policies or state and federal work ers’ c
ompensation laws.
(
iv) Consultant ag rees to supply City, at no additional cost, a transmission or report in the format i n w
hich it is then customarily stored by Consultant reflecting the results of Lien Resolution Services provided monthly. Such data shall be provided as to further allow for the application of Lien Resolution Service fees to the individual claim file and the payment of said fees.
3. PRICING PROCESSES
(a) P
ricing is based on a percent of savings after fee schedule application. There is a per lien cap that ensures the client pays no more than this maximum amount per lien. Some items, such as a walk- through service and an adequacy hearing are billed at a flat rate. (b) Me
thod of Pricing: Percentage of savings per lien after fee schedule is applied, versus total billed amount. Savings is defined as the difference between total claimed lien amount after fee schedule r
eduction and final lien settlement amount, or amount ordered paid by WCAB. (
i) F
or liens not subject to Official Medical Fee Schedules (“OMFS”) nor Usual and Customary, pricing will be calculated at percentage of savings from overall difference between total amount billed and final lien settlement amount.
(c) A
uthority to resolve liens without determination of OMFS granted by employer to expedite file cl
osure will be invoiced at a reduced percentage of savings from the billed amount. (d) Litigation pricing is applied to liens that are the subject of a pre-trial conference statement.
This includes, but is not limited to: service of trial exhibits, review of lien claimant trial exhibits, pre-trial and post-trial briefings as well as points & authorities, petitions for reconsideration, and petitions for costs and/or sanctions for frivolous litigation.
Claim Referral:
Lien resolution services are on a referral basis per claim, and subject to client approval. 42 51
Agreement No. A-8455
43 52
Agreement No. A-8455
CLAIMS ADMINISTRATION STANDARDS EXHIBIT
The following Standards (“Standards”) have been adopted by the Public Risk Innovation, Solutions, and Management (PRISM) Joint Powers Authority in accordance with Article 18(b) of its Joint Powers Agreement. It is the intent of these Standards to ensure compliance with all applicable Labor Code and California Code of Regulations Sections. In the event that there exists a conflict between the Standards, the Labor Code or the Code of Regulations, the most stringent requirement shall apply. These Standards are hereby incorporated into this Agreement between City and Consultant. To the extent that the Scope of Services Exhibit conflicts with these Standards, the Scope of Services Exhibit shall take precedence.
I. CLAIM HANDLING - ADMINISTRATIVE
A. Case Load
1. Each claims examiner assigned to the Member should handle a targeted caseload of 150 but not to exceed 165 claims. In situations where caseloads include future medical and medical only claims, these claims shall be counted as 2:1 in the caseload limit.
2. Supervisory personnel should not handle a caseload, although they may handle specific issues or a small number of conflict claims.
B. Case Review and Documentation
1. Documentation shall reflect any significant developments in the file and include a plan of action. Plan of action statements shall be updated at the time of examiner diary review.
2. The examiner shall review indemnity and medical-only files at intervals not to exceed 45 calendar days. Future medical files shall be reviewed at intervals not to exceed 90 calendar days.
3. The supervisor shall review all new claims within 60 calendar days of initial set up and subsequently monitor activity on indemnity files at intervals not to exceed 120 calendar days.
Future medical files shall be reviewed by the supervisor at intervals not to exceed 180 calendar days.
4. File contents shall comply with Code of Regulations Sections 10101, 10101.1 and 15400, and be kept in a neat and orderly fashion. If claims are maintained in a paperless system, documents shall be clearly identified (e.g., medical report, WCAB Orders, legal, etc.).
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Agreement No. A-8455
5. Medical Only Claims
a. If a medical-only claim is still open at 90 calendar days, it shall be transferred to an indemnity examiner.
b. If, at any time, it is anticipated there will be indemnity benefits paid, the claim shall be transferred to an
indemnity claim type.
c. If the medical-only claim remains open at 180 days, the claim shall be converted to an indemnity claim type,
unless there is documentation showing that medical
treatment will be ending and the claimant will be
discharged from care within the next 30 days, or the
claimant is only seeking treatment for a blood- borne
pathogen exposure protocol.
C. Communication
1. Telephone Inquiries
Return calls shall be made within 1 working day of the original telephone inquiry. All documentation shall reflect these efforts.
2. Incoming Correspondence
All correspondence received shall be clearly stamped with the date of receipt.
3. Return Correspondence
All correspondence requiring a written response shall have such response completed and transmitted within 5 working days of receipt.
4. Ongoing Claimant Contact
On cases involving unrepresented injured workers who are off work, telephone contact shall be made at a minimum of once every 30 days and within 3 working days after discharge from the hospital or outpatient facility following a surgical procedure.
This is in addition to nurse case management involvement on claims where nurse case managers are assigned.
D. F iscal Handling
1. Fiscal handling for indemnity benefits on active cases shall be balanced with appropriate file documentation on a semi-annual 45 54
Agreement No. A-8455
basis and prior to sending a benefit termination notice to verify that statutory benefits are paid appropriately. Balancing is defined as, “an accounting of the periods and amounts due in comparison with what was actually paid”.
2. In cases of multiple losses with the same person, payments shall be made on the appropriate claim file.
E. Medicare Reporting
Mandatory reporting to the Center for Medicaid Services (CMS) shall be completed directly or through a reporting agent in compliance with Section
111 of the Medicare Medicaid and SCHIP Extension Act of 2007 (“MMSEA”). Medicare eligibility shall be documented in the claim file at time of settlement evaluation.
II. CLAIM CREATION
A. Three-Point Contact
Three-point contact shall be conducted on all claims with the non-represented injured worker, employer representative and treating physician within 3 working days of receipt of the claim by the third party administrator or self -administered entity. If a nurse case manager is assigned to the claim, initial physician contact may be conducted by either the claims examiner or the nurse case manager.
This initial contact should be substantive and clearly documented in the claim file. In the event a party is non-responsive, there shall be evidence of at least three documented attempts to reach the individual.
B. Compensability
1. The initial compensability determination (accept claim, deny claim or delay acceptance pending the results of additional investigation) and the reasons for such a determination shall be made and documented in the file within 14 calendar days of the filing of the claim with the employer. In the event the claim is not received by the third party administrator or self - administered entity within 14 calendar days of the filing of the claim with the employer, the third party administrator or self- administered entity shall make the initial compensability determination within 7 calendar days of receipt of the claim.
2. Delay of benefit letters shall be mailed in compliance with the Division of Workers’ Compensation (DWC) guidelines. In the 46 55
Agreement No. A-8455
event the employer does not provide notice of lost time to the third party administrator or self -administered entity timely to comply with DWC guidelines, the third party administrator or self-administered entity shall mail the benefit letters within 7 calendar days of notification.
3. The final compensability determination shall be made by the claims examiner or supervisor within 90 calendar days of employer receipt of the claim form.
C. AOE/COE Investigation
If a decision is made to delay benefits on a claim, an AOE/COE investigation shall be initiated within 3 working days of the decision to delay. This may include, but is not limited to, assigning out for witness/injured worker statements, initiating the QME/AME process, requesting medical records, etc.
D. Reserves
1. Using the information available at claim file set up, an initial reserve shall be established for the most probable case value.
2. The initial reserve shall be electronically posted to the claim within 14 calendar days of receipt of the claim.
E. Indexing
All claims shall be reported to the Index Bureau at time of initial set up and re-indexed on an as needed basis thereafter. Blood borne pathogen exposure claims are an exception to this requirement.
The EIA maintains membership with the Index Bureau that members can access.
III. CLAIM HANDLING – TECHNICAL
A. Payments
1. Initial Temporary and Permanent Disability Indemnity Payment
a. The initial indemnity payment shall be issued to the injured worker within 14 calendar days of knowledge of
the injury and disability. In the event the third party administrator or self - administered entity is not notified of the injury and disability within 14 calendar days of the employer’s knowledge, the third party administrator 47 56
Agreement No. A-8455
or self-administered entity shall make payment within 7 calendar days of notification. Initial permanent disability payments shall be issued within 14 calendar days after
the date of last payment of temporary disability.
Effective 1/1/2013, permanent disability payments shall be issued upon approval of an Award pursuant to Labor
Code Section 4650(b)(2). Prior to a PD Aw ard,
advances may be due if the employer has not offered
the employee a position paying at least 85% of their
wages and compensation at time of injury or the
employee is not employed in a position paying at least
100% of their wages and compensation at time of injury.
This shall not apply with salary continuation.
b. The properly completed DWC Benefit Notice shall be
mailed to the employee within 14 calendar days of the
first day of disability. In the event the third party
administrator or self - administered entity is not notified of the first day of disability until after 14 calendar days, the DWC Benefit Notice shall be mailed within 7
calendar days of notification.
c. Self-imposed penalty shall be paid on late payments in accordance with Section III. A.7 of this document.
d. Overpayments shall be identified and reimbursed timely where appropriate. The third party administrator or self- administered entity shall request reimbursement of
overpaid funds from the party that received the funds. If necessary, a credit shall be sought as part of any
resolution of the claim.
2. Subsequent Temporary and Permanent Disability Payments
a. Eligibility for indemnity payments subsequent to the first payment shall be verified, except for established long - term disability.
b. Ongoing indemnity payments shall be paid in accordance with Labor Code Section 4650(c).
c. Subsequent DWC benefit notices shall be issued in
accordance with CCR 9812.
d. Self-imposed penalty shall be paid on late payments in accordance with Section III. A.7 of this document.
3. Final Temporary and Permanent Disability Payments
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Agreement No. A-8455
a. All final indemnity payments shall be issued timely.
b. The appropriate DWC benefit notices shall be issued in accordance with CCR 9812.
c. Self-imposed penalty shall be paid on late payments in accordance with Section III. A.7. of this document.
4. Award Payments
a. The claim file shall reflect demonstrated efforts to initiate/batch payments on undisputed Awards,
Commutations, or Compromise and Release
agreements within 10 working days following receipt of
the appropriate document, unless the Award indicates
payment is due sooner.
b. For all claims in the primary workers’ compensation
program (PWC) and/or excess reportable claims, copies
of all Awards shall be provided to the Authority at time of payment.
5. Medical Payments
a. Medical treatment billings (physician, pharmacy,
hospital, physiotherapist, etc.) shall be reviewed for
correctness, approved for payment and paid within 60
days of receipt.
b. The medical provider shall be notified in writing within 30 days of receipt of an itemized bill if a medical bill is contested, denied or incomplete.
c. A bill review process should be utilized whenever
possible. There should be participation in a PPO and/or MPN whenever possible.
6. Injured Worker Reimbursement Expense
a. Reimbursements to injured workers shall be issued
within 15 working days of the receipt of the claim for reimbursement.
b. Advance travel expense payments shall be issued to the injured worker 10 working days prior to the anticipated date of travel.
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Agreement No. A-8455
7. Penalties
a. Penalties shall be coded so as to be identified as a penalty payment.
b. If the Member utilizes a third party administrator, the Member shall be advised of the assessment of any
penalty for delayed payment and the reason thereof, and the administrator’s plans for payment of such penalty, on a monthly basis.
c. If the Member utilizes a third party administrator, the Member, in their contract with the administrator, shall specify who is responsible for specific penalties.
B. Medical Treatment
1. Each Member shall have in place a Utilization Review process as set forth in Labor Code Section 4610.
2. Disputes regarding utilization review determinations shall be resolved using the Independent Medical Review process set forth in Labor Code Section 4610.5.
3. Nurse case managers shall be utilized where appropriate.
Rationale for assignment and continued necessity shall be documented in the claim notes at each regular diary review.
4. If enrolled in a Medical Provider Network, the network shall be utilized whenever appropriate.
C. Apportionment
1. Investigation into the existence of apportionment shall be documented.
2. If potential apportionment is identified, all efforts to reduce exposure shall be pursued.
D. Disability Management
1. The third party administrator or self -administered entity shall work proactively to obtain work restrictions and/or a release to full duty on all cases. The TPA or self-administered entity shall notify a designated Member representative immediately upon receipt of temporary work restrictions or a release to full duty, 50 59
Agreement No. A-8455
and work closely with the Member to establish a return to work as soon as possible.
2. The third party administrator or self-administered entity shall notify a designated Member representative immediately upon receipt of an employee’s permanent work restrictions so that the Member can determine the availability of alternative, modified or regular work.
3. If there is no response within 20 calendar days, the third party administrator or self-administered entity shall follow up with the designated Member representative.
4. Members shall have in place a process for complying with laws preventing disability discrimination, including Government Code Section 12926.1, which requires an interactive process with the injured worker when addressing a return to work particularly with permanent work restrictions.
5. Third party administrators or self -administered claims professional shall cooperate with members to the fullest extent, in providing medical and other information the member deems necessary for the member to meet its obligations under federal and state disability laws.
E. Supplemental Job Displacement Benefits
1. Supplemental Job Displacement Benefits – Dates of injury on or after 1/1/04 and before 1/1/13: Benefits pursuant to Labor Code Section 4658.5 shall be timely provided. Dates of injury on or after 1/1/13: Benefits pursuant to Labor Code 4658.7 shall be timely provided.
2. The third party administrator or self -administered entity shall secure the prompt conclusion of SJDB.
F. Reserving
1. Reserves shall be reviewed at regular diary and at time of any significant event, e.g., surgery, P&S/MMI, return to work, etc., and adjusted accordingly. This review shall be documented in the file regardless of whether a reserve change was made.
Where the SIP model does not apply, claims shall be reserved for the most probable value.
2. Indemnity reserves shall reflect actual temporary disability indemnity exposure with 4850 differential listed separately.
51 60
Agreement No. A-8455
3. Permanent disability indemnity exposure shall include life pension reserve if appropriate.
4. Future medical claims shall be reserved in compliance with CCR 15300 (b)(4) allowing adjustment for reductions in the approved medical fee schedule, undisputed utilization review, medically documented non-recurring treatment costs and
medically documented reductions in life expectancy.
5. Allocated expense reserves shall include medical cost containment, legal, investigation, copy service and other related fees.
6. A reserve worksheet shall be utilized and/or detailed rationale substantiating reserve levels shall be documented within the claim file.
G. Resolution of Claim
1. Within 10 working days of receiving medical information indicating that a claim can be finalized, the claims examiner shall begin appropriate action to finalize the claim.
2. Follow up finalization efforts shall continue and be documented at regular diary reviews until resolution is complete.
3. Settlement value shall be documented appropriately utilizing all relevant information.
4. Where settlement includes resolution of future medical for a Medicare beneficiary or an expected Medicare beneficiary, the settlement shall document the strategy to protect Medicare’s secondary payer status.
5. Pursuant to CCR15400.2, claim files with awards for future benefits shall be reviewed for administrative closure two years after the last provision of benefits.
H. Settlement Authority
1. No agreement shall be authorized involving liability, or potential liability, of the Authority without the advance written consent of the Authority. The member shall be notified of any settlement request submitted to the EIA.
2. The third party administrator shall obtain the Member’s authorization on all settlements or stipulations in excess of the 52 61
Agreement No. A-8455
settlement authority provided in any provision of the individual contract between the Member and the claims administrator.
3. Proof of settlement authorization(s) shall be maintained in the claim file.
IV. LITIGATED CASES
The third party administrator or self -administered entity shall establish written guidelines for the handling of litigated cases. The guidelines should, at a minimum, include the points below, which may be adopted and incorporated by reference as "the guidelines".
1. The third party administrator or self-administered entity shall promptly initiate investigation of issues identified as material to potential litigation. The Member shall be alerted to the need for in-house investigation, or the need for a contract investigator who is acceptable to the Member. The Member shall be kept informed on the scope and results of investigations.
2. The third party administrator or self-administered entity shall, in consultation with the Member, assign defense counsel from a list approved by the Member. Initial referral and ongoing litigation management shall be timely and appropriate. The third party administrator or self -administered entity shall maintain control of the ongoing claim activities.
3. Settlement proposals directed to the Member shall be forwarded by the third party administrator, self-administered entity or defense counsel in a concise and clear written form with a reasoned recommendation. Settlement proposals shall be presented to the Member as directed so as to insure receipt in sufficient time to process the proposal.
4. Knowledgeable Member personnel shall be involved in the preparation for medical examinations and trial, when
appropriate or deemed necessary by the Member so that all material evidence and witnesses are utilized to obtain a favorable result for the defense.
5. T
he third party administrator or self-administered entity shall comply with any reporting requirement of the Member.
V. SUBROGATION
1. In all cases where a third party (other than a Member employee or agent) is responsible for the injury to the employee, attempts to obtain information regarding the identity of the 53 62
Agreement No. A-8455
responsible party shall be made within 14 calendar days of recognition of subrogation potential.
2. Once identified, the third party shall be contacted within 14 calendar days with notification of the Member's right to subrogation and the recovery of certain claim expenses.
3. If the third party is a governmental entity, a claim shall be filed with the governing board (or State Board of Control as to State entities) within 6 months of the injury or notice of the injury. If the third party is a non- governmental entity, a complaint shall be filed in civil court within 2 years in order to preserve the statute of limitations.
4. Periodic contact shall be made with the responsible party and/or insurer to provide notification of the amount of the estimated recovery to which the Member shall be entitled.
5. If the injured worker brings a civil action against the party responsible for the injury, the claims administrator shall consult with the Member about the value of the subrogation claim and other considerations. Upon Member authorization, subrogation counsel shall be assigned to file a Lien or a Complaint in Intervention in the civil action.
6. Whenever practical, the claims administrator shall aggressively pursue recovery in any subrogation claim. They should attempt to maximize the recovery for benefits paid, and assert a credit against the injured worker’s net recovery for future benefit payments.
7. Member (and EIA if applicable) approval is required to waive pursuit of subrogation or agree to a settlement of a third party recovery. This approval shall be documented in the claim file.
In cases of self - administered entities, a process shall be documented noting the authority levels within the member organization to waive pursuit of subrogation or agree to a settlement of a third party recovery.
V
I. EXCESS COVERAGE
A. Claims meeting the definition of reportable excess workers’ compensation claims as defined by the Memorandum of Coverage Conditions Section shall be reported to the Authority within 5 working days of the day on which it is known the criterion is met. Utilize the Excess Workers’ Compensation First Report Form available through the EIA website.
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Agreement No. A-8455
B. Subsequent reports shall be transmitted to the Authority on a quarterly basis on all indemnity claims and on a semi -annual basis on all future medical claims or sooner if claim activity warrants, or at such other intervals as requested by the Authority, in accordance with Underwriting and Claims Administration Standards. Utilize the Excess Workers’ Compensation Status Report Form available through the EIA website, or a comparable form to be approved by the Authority.
C. Reimbursement requests shall be submitted in accordance with the Authority’s reporting and reimbursement procedures on a quarterly or semi- annual basis depending on claims payment activity. Utilize the Excess Workers’ Compensation Claim Reporting and Reimbursement Procedures available through the EIA website.
D. A closing report with a copy of any settlement documents not previously sent shall be sent to the Authority.
Following is the history of amendments to this document:
Amended: March 4, 1988
Amended: October 7, 1988
Amended: October 6, 1995
Amended: October 1, 1999
Amended: June 6, 2003
Amended: March 2, 2007
Amended: July 1, 2009
Amended: July 1, 2011
Amended: March 2, 2012
Amended: October 4, 2013
Amended: July 1, 2019
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Agreement No. A-8455
RATES AND COSTS EXHIBIT
Workers' Compensation Claims Administration
Description Pricing
Life of Contract Flat Annual Fee1
Includes 90 IND claims and 150 MO claims per year (annual averages are reviewed at the end of each contract year to assess staffing. We do not anticipate a claim swing; these thresholds are simply put in place as a “guardrail”) $255,175.00
Plus all open claims (approx. 328 IND and 14 MO)
Per claim Fee after maximum number of claims:
Medical-Only $175.00
Indemnity $1,300.00
Employer's Liability $1,300.00
Program Management
Description Pricing
Data Conversion - Per Data Source Included
Implementation Fee - One Time Fee $5,000.00
CareMC Access - Per Annum ²
First 5 Full Access Users Included
Each User over 5 - Per User, Per Year $1,000.00
¹ Includes Assistance with Self-Insured Data for State Reports, State Statistical Reporting & All State Filing Requirements
² Includes Executive Dashboard, Claim Details, Claims Summary Screen & Claims Reporting Account Management and Technical Support
Description Pricing
Account Management Staff Included
(Optional Service, not to be engaged without the City’s consent) Electronic Data Transmission
Monthly File $250.00
Weekly File $600.00
Daily File $2,000.00
Training – Onsite and Online Included
Technical Support Included
State EDI Files Included
Monthly Reporting Included
Ad hoc Report Programming - Per Hour $200.00
Communication Materials/Posters Pass through printing cost Annual Banking Fees
Additional Account(s) - Per Account
One account included
$1,000.00
Carrier TPA Oversight Fees ¹ Bill from Carrier to Client ¹ Fees charged by the carrier (Oversight fees, Tail Claim transfer / takeover fees, etc.) are the responsibil ity of the client and will be billed directly to the client by the carrier or by Consultant should Consultant be invoiced for such fees.
56 65
Agreement No. A-8455
Intake and Immediate Intervention Services
Description Pricing
Claim Intake (includes one FNOL distribution) - Per Intake Included Incident Only Reporting - Per Incident Included
Advocacy 24/7 - Per Call $95.00
Telehealth Services Fee Schedule or U&C value by CPT code
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Agreement No. A-8455
Allocated Expense Fees Legal Services
Description Pricing
Subrogation 25% of Recoveries
Legal Bill Auditing ¹ 2.5% of gross legal charges
reviewed
Indexing and OFAC Compliance - Per Index $15.00
¹ Fees will never exceed the savings generated
Bill Review Services
Description Pricing
Bill Review: Includes Standard Fee Schedule and UCR - Per Bill ¹˒² $8.50 + Network Solutions Includes: ² 24% of Savings
Clinical Review, Implant Analysis, Line Item Bill Review, Negotiations, PPO Network Access,
Substantive Denials, Technical Evaluation
Minimum Transaction Fee ² $8.50
State EDI, Scanning/OCR, Initial 1099 Provider Notification Letter Included ¹ Includes bill intake, document imaging, file upload, state EDI’s, and initial 1099 provider notification letters. ² Minimum transaction fee (MTF) per bill transaction. Applied per transaction if all other applicable fees do not meet the minimum transaction fee. Applies to all transactions, including but not limited to, Specialty Bills, Duplicate Bills and bills sent for Re-consideration or Re-evaluation. There is a maximum bill review transaction fee of $15,000.00.
Patient Management
Description Pricing
Telephonic Case Management, Field Case Management
and Return to Work Coordinator - Per Hour
Alaska, California, Hawaii and New York $135.00
All Other States ¹˒² $124.00
Vocational Rehabilitation - Per Hour ² $175.00
Specialty Services (Catastrophic, Life Care Plan, Medicare Conditional Payments, Medicare Set Asides, Bilingual) - Per Hour $206.00 Nurse Utilization Review - Per Review $150.00
Physician Utilization Review - Per Review $275.00
UR Authorization Only (Adjuster Review) - CA - Per Review $40.00 Care Advocate - Per Claim $50.00
PeerWell App Access - Per Claim (One-Time Fee) $500.00
¹ Fee applies to all States with the exception of premium states (CA, HI, AK, and NY). ¹Statutory rates supersede if applicable.
Prevailing IRS Mileage Rate applies.
Each invoice for Case Management Services shall have an additional professional service fee of $39.00 billed to City.
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Agreement No. A-8455
Pharmacy Solutions
Description Pricing
Retail Pharmacies
Brand AWP -17% + $3.00 dispensing fee
Generic AWP -45% + $3.00 dispensing fee
Mail Order
Brand AWP -18% + $2.00 dispensing fee
Generic AWP -55% + $2.00 dispensing fee
Clinical Modeling
Integration of Pharmacy Data Included
Dynamic Calculation/Display in CareMC Included
Pharmacy Interventions
Certified Pharmacy Technician Included
Rx Nurse Included
Nurse Management Case Management hourly rate
Pharmacy Review - Per Review $375.00
Cognitive Behavioral Therapy - Per Hour $250.00
Medication Review - Per Hour $250.00
Ancillary Benefit Management Services
Description Pricing
Medical Imaging Services Varies by State and Diagnostic Independent Medical Exam See 2022 IME/Peer Fee Schedule Physical and Occupational Therapy Varies by State
Durable Medical Equipment Varies by State and Equipment IME Peer Review - Per Hour See 2022 IME/Peer Fee Schedule Transportation Varies by State and Service
Translation Varies by State and Service Level
Medicare Agent Reporting
Description Pricing
Set up and engagement Included
Monthly Maintenance Included
Quarterly Reporting Included
California Lien Program
Description Pricing
Set up fee/minimum fee - Per Lien ¹ $50.00
Percent of savings off Fee Schedule 20% of savings
Lien Cap $3,000.00
Lien Conference $500.00
Lien Trial
Half Day $500.00
Full Day $750.00
DOR Filing Included
Service and Review of Initial Discovery Included
Litigation Review and Support - Per Hour $125.00
¹ Deducted from total fee if over $100.00
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Agreement No. A-8455
State Certified Managed Care Networks
Description Pricing
Implementation, Filing, Setup (one-time fee) ¹
Standard Network - CA MPN $2,500.00 per network
Standard Network - CA MPN & CA Kaiser $3,500.00 per network Custom Network - CA MPN $5,000.00 per network
Administration² CA MPN: +$2.50/bill
Optional Services (Appointment Scheduling, Training, Panel Creation, etc.) Varies by State
¹ Implementation & administration for all other MCOs (AR MCO, CT MCO, FL MCA, GA MCO, MN MCO, NE MCO, NH MCO, NJ MCO, OK CMP & WV MHCP) are included in bill review fees. Each applicable state represents a separate network.
² Additional bill fee is applied to all Bill Review transactions relating to the applicable state regardless of the bill’s network utilization.
The above pricing per claim is based on handling of all claims that occur and are reported during the agreement period. If life of contract pricing is selected, claims will be handled until closed or until the end of the agreement period, whichever comes first. If life of claim pricing is selected, claims will be handled until closed. Pricing is valid fo r first year of the contract. At the end of the first year and each year thereafter, all fees outlined on the claims and managed care pricing sheet shall increase the greater of CPI or 3.5%.
Any service not identified in this proposal will be provided at a later time. (2) Fees for Additional Professional Services: If City requires any additional professional services from Consultant relating to the Services or the CareMC Application, including but not limited to integration of the CareMC Application with EDI or other City systems, City shall submit a written request to Consultant for such services. Consultant shall, in good faith, consider providing such services at its then-current professional services fee rate and standard terms and conditions. (3) Billing and Payments for Case Management. C onsultant will invoice City monthly for all fees related to Case Management Services directly to the specific claims file. Billing for Case Management is based on actual time per activity. Activity is based on ten (10) minute, a sixth (.17) of an hour, units.
Time billed that exceeds the base billing unit multiple, i.e., 10 minutes, 20 minutes, etc., will be converted to the next billing unit.
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Agreement No. A-8455
I
NSURANCE EXHIBIT
INS-A
61 70
Exhibit INS-A
I
NSURANCE REQUIREMENTS FOR CONSULTANTS
(WITH ERRORS AND OMISSIONS REQUIREMENT)
1. C
onsultant shall obtain and maintain during the performance of any services under this Agreement the following insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of services hereunder by Consultant, its agents, representatives, employees or subconsultants. a. C
ommercial General Liability Insurance, including Contrac tual Liability, in an amount not less than $1,000,000 combine d s
ingle limit for bodily injury and property damage for each claimant for general liability with coverage equivalent to Insura nce Services Office Commercial General Liability Coverage (Occurrenc e Form CG 0001). If a general aggregate limit is used, that limit shall apply separately to the project or shall be twice the occurrence amount; b. B
usiness automobile liability insurance in an amount not less than $1,000,000 combined single limit for bodil y injury and property damage for each claimant for automobile liability with coverage equivalent to Insurance Services Office automobile l iability coverage (Occurrence Form CA0001) covering Code No. 1, “any auto;” c. P
rofessional liability/errors and omissio ns insurance appropriate to Consultant’s profession to a minimum coverage of $1,000,000, with neither Consultant nor listed subconsultants having less than $500,000 individually. The professional liabi lity/errors and omissions insurance must be project specific with at least a one year extended reporting period, or longer upon request. d. W
orkers’ compensation insurance in compliance with the laws of the State of California, and employer’s liability insuran ce i
n an amount not less than $1,000,000 per claiman t. Additionally, the workers’ compensation policy shall include a waiver of all rights of subrogation which the insurer may have against the City.
2. C
onsultant shall, prior to performance of any services, file with the Risk Manager certificates of insurance with original endorsements effecting coverage required by this Exhibit INS -A. The certificates and endorsements for each insurance policy are to be signed by a person authorized by that insurer to bind coverage on its behalf. The certificates and endorsements are to be on the attached forms or on other forms approved by the Risk Manager. All certificates and endorsements are to be received and approved by t he Risk Manager before commencement of services. City reserves the right to require complete certified copies of all required insurance policies at any time. The certificates of insurance and endorsements shall be sent via email (or fax if necessary) to the Risk Manager, addressed as follows (do not send hard copies):
C
ity of Oxnard
Insurance Compliance
Ref erence No.
P .O. Box 100085 – OX
Duluth, GA 30096
V
ia Email: [email protected]
V ia Fax: 678-259-1007
3. C
onsultant agrees that all insurance coverages shall be provided by a California admitted insurance carrier with an A.M. Best rating of A:VII or better and shall be endorsed to state that coverage may not be suspended, voided, canceled, or reduced in coverage or limits without 30 days’ prior written notice to the Risk Manager. The Risk Manager shall not approve or accept any endorsement if the endorsement contains “best effort” modifiers or if the insurer is relieved from the responsibility to give such notice.
4. Consultant agrees that the commercial general liability and business automobile liability insurance policies shall be endorsed to n
ame City, its City Council, officers, employees, agents and volunteers as additional insureds as respects: liability arising out of activities performed by or on behalf of Consultant; products and completed operations of Consultant; premises owned, occupied or used by Consultant; or automobiles owned, leased, hired or borrowed by Consultant. The coverage shall contain no special limitations on the scope of protection afforded to City, its C ity Council, officers, employees, agents and volunteers. The General Liability Special Endorsement Form and Automobile Liability Special Endorsement Form attached to this Exhibit INS- A or substitute forms containing the same information and acceptable to the Risk Manager shall be used to provide the endorsements (ISO form CG 2010 11/85 or if not available, CG 2010 with an edition date prior to 01/04 and CG 2037).
5. T
he coverages provided to City shall be primary and not contributing to or in excess of any e xisting City insurance or self - insurance coverages ( this must be endorsed) . Additionally, the workers’ compensation policy shall include a waiver of all rights of subrogation which the insurer may have against the City. Any failure to comply with reporti ng provisions of the policies shall not affect coverage provided to City, its City Council, officers, employees and volunteers. The insurance shall apply separately to eac h insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability.
6. T
he insurer shall declare any deductibles or self-insured retentions to and be approved by the Risk Manager. At the option of the Risk Manager, either the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects City, its City Council, officers, employees and volunteers, or the Consultant shall procure a bond guaranteeing payment of losses and related investi gations, claim administration and defense expenses.
7. A
ll insurance standards ap plicable to Consultant shall also be applicable to Consultant's subconsultants. Consultant agrees to maintain appropriate agreements with subconsultants and to provide proper evidence of coverage upon receipt of a written requ est from the Risk Manager.
5/
22 62
71 Exhibit INS-A
INSTRUCTION FOR SUBMITTING INSURANCE CERTIFICATES AND ENDORSEMENT FORMS
Certificates of Insurance
The sample accord form on the following page is provided to facilitate your preparation and submission of certificates of insurance.
You may use this or any industry form that shows coverage as broad as that shown on the attached sample. Please note the certificate holder address must be as shown on the attached sample accord form with the contract number and in surance exhibit identification information completed. Improperly addressed certificates may delay the contract start-up date because the City’s practice is to return unidentifiable insurance certificates to the insured for clarification as to the contract number.
Cancellation provisions must be endorsed to the policy . Modifying the certificate does not change coverage or obligate the carrier to provide notice of cancellation.
Endorsement Forms
Original endorsements are required for commercial general l iability and business automobile liability insurance policies and must be attached to the applicable certificate of insurance. City preference is that the Consultant/insurer use the endorsement f orms which are attached. Substitute forms will be accepted, however, as long as they include provisions comparable to the sample accord form.
INS-A.doc
63 72
Exhibit INS-A
ACORD CERTIFICATE OF INSURANCE ISSUE DATE (MM/DD/YY)
PRODUCER
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.
CODE SUB-CODE
COMPANIES AFFORDING INSURANCE COVERAGE
INSURED
COMPANY
LETTER A SPECIFY COMPANY NAMES IN THIS SPACE
COMPANY
LETTER B
COVERAGES
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY
PERIOD INDICATED, NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO
WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
CO
LTR
TYPE OF INSURANCE
POLICY
NUMBER
POLICY
EFFECTIVE
DATE
(MM/DD/YY)
POLICY
EXPIRATION
DATE
(MM/DD/YY)
LIMITS
A
GENERAL LIABILITY
[x] COMMERCIAL GENERAL
LIABILITY [ ] CLAIMS
MADE [x] OCCUR.
[x] OWNER'S &
CONTRACTOR'S PROT.
GENERAL AGGREGATE $1,000,000
PRODUCTS COMP/OP AGG . $1,000,000
PERSONAL & ADV. INJURY $1,000,000
EACH OCCURRENCE $1,000,000
FIRE DAMAGE (Any one fire) $
MED. EXPENSE (Any one person) $
A
AUTOMOBILE LIABILITY
[x] ANY AUTO
ALL OWNED AUTOS
SCHEDULED AUTOS
HIRED AUTOS
NON-OWNED AUTOS
GARAGE LIABILITY
COMBINED SINGLE $1,000,000
LIMIT
BODILY INJURY $
(Per person)
BODILY INJURY $
(Per accident)
PROPERTY DAMAGE $
A
EXCESS LIABILITY
UMBRELLA FORM
OTHER THAN UMBRELLA
FORM
EACH OCCURRENCE $
AGGREGATE $
A
WORKERS'
COMPENSATION
AND
EMPLOYERS' LIABILITY
STATUTORY LIMITS
EACH ACCIDENT $1,000,000
DISEASE-POLICY LIMIT $1,000,000
DISEASE-EACH EMPLOYEE $1,000,000
A
OTHER
Errors and omissions insurance or malpractice insurance available for the insured's profession
Minimum coverage $1,000,000
Each consultant/ $500,000
& listed sub-consultant
DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/RESTRICTIONS/SPECIAL ITEMS
CERTIFICATE HOLDER
CITY OF OXNARD
Attn: Insurance Compliance
Reference No._______
P.O. Box 100085 – OX
Duluth, GA 30096
Via Email: [email protected]
Via Fax: 678-259-1007
CANCELLATION
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELED BEFORE THE E
XPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL 30
DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT
FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES.
AUTHORIZED REPRESENTATIVE
Rev. 5/22 INS-A.doc
64 73
Exhibit INS-A
GENERAL LIABILITY SPECIAL ENDORSEMENT
FOR THE CITY OF OXNARD (the “City”)
SUBMIT IN DUPLICATE
ENDORSEMENT NO.
ISSUE DATE (MM/DD/YY)
PRODUCER POLICY INFORMATION:
Insurance Company:
Policy No.:
Policy Period: (from) (to)
LOSS ADJUSTMENT EXPENSE Included in Limits
In Addition to Limits
Telephone: Deductible Self-Insured Retention (check which) of $ with an Aggregate of $ applies to
coverage. Per Occurrence Per Claim (which) NAMED INSURED
APPLICABILITY. This insurance pertains to the operations, products and/or tenancy of the named insured under all written agreements and permits in force with the City unless checked here in which case only the following specific agreements and permits with the City are covered
CITY AGREEMENTS/PERMITS
TYPE OF INSURANCE
GENERAL LIABILITY
COMMERCIAL GENERAL LIABILITY
COMPREHENSIVE GENERAL LIABILITY
OWNERS & CONTRACTORS PROTECTIVE
Claims Made
Retroactive Date
Occurrence
OTHER PROVISIONS
COVERAGES
LIABILITY LIMITS IN THOUSANDS $
EACH OCCURRENCE AGGREGATE
GENERAL
PRODUCTS/COMPLETED OPERATIONS
PERSONAL & ADVERTISING INJURY
FIRE DAMAGE
CLAIMS: Underwriter’s representative for claims pursuant to this insurance.
Name:
Address:
Telephone: ( )
In consideration of the premium charged and notwithstanding any inconsistent statement in the policy to which this endorsemen t is attached or any endorsement now or hereafter attached thereto, insurance company agrees as follows:
1. INSURED. The City, its officers, agents, employees and volunteers are included as insureds with regard to liability and defense of suits arising fro m the operations, products and activities performed by or on behalf of the named insured.
2. CONTRIBUTION NOT REQUIRED. As respects: (a) work performed by the named insured for or on behalf of the City; or (b) products sold by the named insured to the City; or (c) premises leased by the named insured from the City, the insurance afforded by this policy shall be primary insurance as resp ects the City, its officers, agents, employees or volunteers; or stand in an unbroken chain of coverage excess of the named insured’s scheduled underlying primary coverage. In either event, any other i nsurance maintained by the City, its officers, agents, employees or volunteers shall be in excess of this insurance and shall not contribute with it.
3. SEVERABILITY OF INTEREST. This insurance applies separately to each insured against whom claim is made or suit is brought except with respect to the co mpany’s limits of liability.
The inclusion of any person or organization as an insured shall not affect any right which such person or organization would have as a claimant if not so included.
4. CANCELLATION NOTICE. With respect to the interests of the City, this insurance shall not be canceled, or materially reduced in coverage or limits except after thirty (30) days prior written notice by receipted delivery has been given to the City.
5. PROVISIONS REGARDING THE INSURED’S DUTIES. Any failure to comply with reporti ng provisions of the policy or breaches or violations of warranties shall not affect coverage provided to the City, its officers, agents, employees or volunteers.
6. SCOPE OF COVERAGE. This policy, if primary, affords coverage at least as broad as:
a. Insurance Services Office Commercial General Liability Coverage, “occurrence” form CG0001; or b. If excess, affords coverage which is at least as broad as the primary insurance form CG0001.
Except as stated above nothing herein shall be held to waive, alter or extend any of the limits, conditions, agreements or exclusions of the policy to which this endorsement is attached.
ENDORSEMENT HOLDER
CITY OF OXNARD
Attn: Insurance Compliance
Reference No._______
P.O. Box 100085 – OX
Duluth, GA 30096
Via Email: [email protected]
Via Fax: 678-259-1007
AUTHORIZED REPRESENTATIVE
Broker/Agent Underwriter
I (print/type name), warrant that I have authority to bind the above-mentioned insurance company and by my signature hereon do so bind this company to this endorsement.
Signature
(original signature required)
Telephone: ( ) Date Signed:
Rev. 5/22 INS-A.doc
65 74
Exhibit INS-A
AUTOMOBILE LIABILITY SPECIAL ENDORSEMENT
FOR THE CITY OF OXNARD (the “City”)
SUBMIT IN DUPLICATE
ENDORSEMENT NO.
ISSUE DATE (MM/DD/YY)
PRODUCER POLICY INFORMATION:
Insurance Company:
Policy No.:
Policy Period: (from) (to)
LOSS ADJUSTMENT EXPENSE Included in Limits
In Addition to Limits
Telephone: Deductible Self-Insured Retention (check which) of $ with an Aggregate of $ applies to
coverage. Per Occurrence Per Claim (which) NAMED INSURED APPLICABILITY. This insurance pertains to the operations, products and/or tenancy of the named insured under all written agreements and permits in force with the City unless checked here in which case only the following specific agreements and permits with the City are covered:
CITY AGREEMENTS/PERMITS
TYPE OF INSURANCE OTHER PROVISIONS
COMMERCIAL AUTO POLICY
BUSINESS AUTO POLICY
OTHER
LIMIT OF LIABILITY
CLAIMS: Underwriter’s representative for claims pursuant to this insurance.
Name:
Address:
Telephone: ( )
$ per accident, for bodily injury and property damage.
In consideration of the premium charged and notwithstanding any inconsistent statement in the policy to which this endorsemen t is attached or any endorsement now or hereafter attached thereto, insurance company agrees as follows:
1. INSURED. The City, its officers, agents, volunteers and employees are included as insureds with regard to liability and defense of sui ts arising from the operations, products and activities performed by or on behalf of the named insured.
2. CONTRIBUTION NOT REQUIRED. As respects: (a) work performed by the named insured for or on behalf of the City; or (b) products sold by the named insured to the City; or (c) premises leased by the named insured from the City, the insurance afforded by this policy shall be primary insurance as respects the City, its officers, agents, employees or volu nteers; or stand in an unbroken chain of coverage excess of the named insured’s scheduled underlying primary coverage. In either e vent, any other insurance maintained by the City, its officers, agents, employees or volunteers shall be in excess of this insurance and shall not contribute with it.
3. SEVERABILITY OF INTEREST. This insurance applies separately to each insured against whom claim is made or suit is brought except with respect to the company’s limits of liability.
The inclusion of any person or organization as an insured shall not affect any right which such person or organization would have as a claimant if not so included.
4. CANCELLATION NOTICE. With respect to the interests of the City, this insurance shall not be canceled, or materially reduced in coverage or limits except after thirty (30) days prior written notice by receipted delivery has been given to the City.
5. PROVISIONS REGARDING THE INSURED’S DUTIES. Any failure to comply with reporting provisions of the policy or breaches or violations of warranties shall not affect covera ge provided to the City, its officers, agents, employees or volunteers.
6. SCOPE OF COVERAGE. This policy, if primary, affords coverage at least as broad as:
a. Insurance Services Office Automobile Liability Coverage, “occurrence” form CA0001, code ("any auto"); or b. If excess, affords coverage which is at least as broad as the primary insurance form referenced in the preceding section (1).
Except as stated above nothing herein shall be held to waive, alter or extend any of the limits, conditions, agreements or ex clusions of the policy to which this endorsement is attached.
ENDORSEMENT HOLDER
CITY OF OXNARD
Attn: Insurance Compliance
Reference No._______
P.O. Box 100085 – OX
Duluth, GA 30096
Via Email: [email protected]
Via Fax: 678-259-1007
AUTHORIZED REPRESENTATIVE
Broker/Agent Underwriter
I (print/type name), warrant that I have authority to bind the above-mentioned insurance company and by my signature hereon do so bind this company to this endorsement.
Signature
(original signature required)
Telephone: ( ) Date Signed
Rev. 5/22 INS-A.doc
66 75
Agreement No. A-8455
CONSULTANT ENTERPRISE COMP, INC.
CAREMC LICENSE AGREEMENT
This CareMC License Agreement (this “License Agreement ”) is entered into as of July 1, 2022 (the “Effective Date”) by and between CorVel Enterprise Comp, Inc., a wholly -owned subsidiary of CorVel Corporation (“Consultant”), 1920 Main Street, Suite 900, Irvine, CA 92614 (“Consultant”) and City of Oxnard (“City”).
RECITALS
WHEREAS, Consultant has developed a proprietary software solution (the “CareMC Application”) which is accessible via the Consultant web site located at URL www.caremc.com (the “CareMC Site”), through which Consultant provides its customers with the option of utilizing certain Third Party Claims Administration Services and bundled Managed Care Services, including certain Bill Review Services, online (such automated and online components of Consultant’s Managed Care Services, “Online Services”); and WHEREAS, Consultant has developed a proprietary smartphone application (“My Care Services” smartphone app) for City and City’s claimants accessible via claimant’s own independent smartphone including but not limited to Apple’s iOS 7.0+ or Android 4.0+ or other smartphone device with such access capabilities; and
WHEREAS, C onsultant provides its customers with the option of accessing certain Third Party Claims Administration Services and bundled Managed Care Services by means of Consultant’s proprietary software solution (the “CareMC Application”) via the Consultant web site located at the URL “www.caremc.com” (the “CareMC Site”); and WHEREAS, Consultant and City have entered into a Professional Services Agreement (A-8455); and WHEREAS, City desires to be provided with access to and use of the CareMC Application by means of an Internet browser under the terms and conditions set forth in this License Agreement.
NOW, THEREFORE, in consideration of the premises set forth above, the promises made herein, and other good and valuable consideration the receipt which is hereby acknowledged, the parties agree as follows:
1. ACCESS TO THE CAREMC APPLICATION
A. T erms of Use . The parties acknowledge and agree that the terms and conditions under which par ticular Third Party Claims Administration Services and bundled Managed Care Services are provided by Consultant and the terms and conditions under which City may access and use the CareMC Application in order to utilize the online and automated components of such Third Party Claims Administration Services and bundled Managed Care Service (the “Online Services”) shall be governed by the terms and conditions of this License Agreement.
B. My Care App. City agrees and acknowledges the terms and conditions that City ’s claimants shall agree upon by utilizing Consultant’s My Care App as described hereunder as Attachment A to this License Agreement.
C. Registration Information. Prior to accessing the CareMC Application, City shall provide Consultant with certain regist ration information requested therein (“ Registration Information ”). City represents and warrants that (i) the Registration Information City provides is true, accurate, current and complete, and (ii) the Registration Information will be updated as necessary to keep such data true, accurate, current and complete.
D. Passwords and Levels of Access. As soon as practicable after the execution of this License Agreement, Consultant s hall provide a master password to City that allows City initial access to the Online Services (the “Master Password ”). City shall then designate a group of Authorized Users. The group of Authorized Users (“ Restricted Users”) shall have access to all data available on the CareMC Site including data that constitutes or contains “personally identifiable information” (“PII Data”) as such term is defined in any applicable state or federal statutes or regulations. Each Restricted User shall initially access the Online Services by means of the Master Password, then shall be required to choose his/her own unique password (each, a “Restricted Password”) for all future access.
E. Security of Passwords . City acknowledges and agrees that it shall be solely responsible for (i) selecting Authorized Users, (ii) assigning the various levels of authority an d access each Authorized User may have to the CareMC Application, Online Services and City Data, including by determining which Authorized Users shall be Non-Restricted Users, (iii) ensuring that only Authorized Users have access to the Master Password, only Restricted Users have access to the Restricted Passwords and only Non -Restricted Users have access to Non -Restricted Passwords, (iv) implementing a system to control, track and account for all Restricted Passwords and Non- Restricted Passwords, (v) stric tly maintaining the confidentiality and integrity of the Master Password, Restricted Passwords and Non - Restricted Passwords and levels of authority among Authorized Users, and (iv) ensuring that Authorized Users shall at all tim es comply with the terms and conditions of this License Agreement. City further agrees that it shall notify Consultant immediately in writing if the security or integrity of a password has been compromised.
F. City D ata. Responsibility for ensuring that the content and data input into the CareMC Application by City or Authorized Users (“City Data”) is accurate, reflects City ’s requirements and is entered correctly lies solely with City . All data generated by and through City’s use of the CareMC Application and Online Services shall resi de on Consultant ’s server. Consultant reserves the right to temporarily suspend access to any City Data that it determines, in its sole discretion, violates the terms and conditions of this License Agreement or any applicable laws.
67 76
Agreement No. A-8455
G. Changes to the CareMC Application. Consultant reserves the right, at any time in its sole discretion and without liability to City , to delete or change features of the CareMC Application, CareMC Site or Online Services provided such changes do not materially alter the functionality, efficiency or performance of the CareMC Application.
2. LICENSE AND RESTRICTIONS
A. L imited License . Subject to the terms and conditions of this License Agreement, Consultant grants to City during the License Term (as defined in Section 8A below) a limited, non-exclusive, non -transferable, non-sublicensable license to access and use, and allow Authorized Users to access and use, the CareMC Application via the CareMC Site solely for City ’s own internal business use and operations. City shall access and use the CareMC Application in accordance with the user’s guides and online instruction provided to City by Consultant (“Documentation”) and all applicable laws, statutes, rules and regulations.
B. Restrictions. City shall not, and shall not allow Authorized Users or any third party to (i) rent, lease, re -license or otherwise provide access to the CareMC Application or Online Services to any third party, (ii) alter, modify or create derivative works of the CareMC Application, ( iii) use any reverse compilation, decompilation or disassembly techniques or similar methods to determine any design structure, concepts and construction method of the CareMC Application or replicate the functionality of the CareMC Application for any purpose, or (iv) copy the CareMC Application or any content, materials, information and other data provided by Consultant on the CareMC Site or used in providing the Online Services (“ Consultant Content”) and/or Documentation without Consultant ’s prior written consent.
C. Third Parties . C ity shall not allow any third party to have access to the CareMC Application or Online Services without prior written consent of Consultant and ensuring that (i) such third party enters into a legally enforceable written agreement with Consultant, or (ii) Consultant and City shall enter into a Letter Agreement whereby City assumes all responsibility and liability for access by such third party.
D. Own ership. Consultant owns and shall retain all right, title and interest in and to the CareMC Application, Documentation, CareMC Site, Online Services, Consultant Content and any intellectual property rights inherent therein or arising therefrom. In addition to Consultant’s rights in the individual elements of the Consul tant Content, Consultant owns a copyright in the selection, coordination, arrangement and enhancement of the Consultant Content. Neither City nor any Authorized User shall obtain any ownership rights, express or implied, or any other rights other than those expressly set forth herein in the CareMC Application, Documentation or Consultant Content.
A. E. Compliance Monitoring and Audits . Consultant may monitor and perform remote audits of City ’s use of the CareMC Application and CareMC Site for the purpose of verifying that City and Authorized Users are using the CareMC Application in compliance with the terms of this CareMC License Agreement. Consultant reserves the right, to temporarily suspend City ’s or any Authorized User’s access to the CareMC Application in the event City or such Authorized User engages in, or Consultant in good faith suspects is engaged in, any unauthorized conduct. Upon such suspension, Consultant shall immediately inform City of such suspension and though the support of City resolve any issue which has arisen within a commercially reasonable timeframe.
3 . INFRASTRUCTURE, MAINTENANCE AND SUPPORT
A. Consultant Infrastructure Obligations. Subject to City ’s compliance with the terms and conditions of this License Agreement, Consultant shall be responsible for providing and maintaining the hardware, software and other equipment required to host the CareMC Application for City (“CareMC Infrastructure”). The CareMC Infrastructu re is subject to modification by Consultant from time to time for purposes such as adding new functionality, maximizing operating efficiency and upgrading hardware, provided such modifica tions shall not in the aggregate degrade the performance of the Online Services utilized by City . City understands and acknowledges that such modifications may require changes to City ’s Internet access and/or telecommunications infrastructure to maintain City ’s desired level of performance. Consultant shall give City reasonable prior written notice of any such modifications.
B. C ity Infrastructure Obligations . Except for the CareMC Infrastructure, which will be provided by Consultant , City shall be responsible for obtaining and maintaining all hardware, software, equipment , Internet access and/or telecommunications services and other items or services furnished by third party venders or providers (“ Third Party Providers”) required to enable City to access and use the CareMC Application and CareMC Site as contemplated hereunder.
C. Support . Con sultant will provide general support regarding questions on the CareMC Application and CareMC Site via email and by telephone from Monday through Friday between the hours of 5:00 a.m. and 6:00 p.m. Pacific Standard Time, excluding holidays.
D. Scheduled Maintenance. C onsultant will use reasonable efforts to (i) perform any scheduled downtime outside of City ’s normal business hours, (ii) notify City of all scheduled downtimes at least seventy -two (72) hours in advance, and (iii) perform software updates to the CareMC Application with minimal disruption to City’s use of the Online Services.
E. S ystem Monitoring . Consultant will use reasonable efforts to continuously monitor its web servers and database servers to ensure that they are functioning properly.
F. Security.
Consultant will implement and use reasonable efforts to maintain secure systems through the use of firewalls, virtual private networks (VPN), and other security technologies. Consultant will use reasonable efforts to as pursuant to applicable laws report to City any confirmed breach of Consultant’s systems affecting City Data within seventy-two (72) hours .
G. Disaster Recovery and Backup . C onsultant will use reasonable efforts to perform nightly backups of essential data on its web servers and database servers. Consultant has implemented third party backup and restoration technology to enable high speed recovery of data. Consultant utilizes redundant load balanced industry standard servers for 24x7, 365 day access, except for regularly scheduled system maintenance and upgrade processes. SQL Server databases are hosted on clustered servers offering fall -over capability, redundant 68 77
Agreement No. A-8455
communication links, and load balanced application servers. Backup tapes are restored into a test environment not less than qua rterly to confirm validity of backups. The CareMC Site has redundant inbound Internet and Intranet connectivity.
H. Professiona l Managed Care Services . If City requires any additional professional services relating to the CareMC Application or Online Services from Consultant including but not limited to integration with City ’s electronic data interfaces (EDIs) or other City systems, City shall submit a written request to Consultant for such services. Consultant shall, in good faith, consider providing such services at its then-current professional services fee rate and standard terms and conditions.
4. REPRESENTATIONS AND WARRANT IES
A. City R epresentations . City represents that (i) it has the legal authority to provide the City Data to Consultant hereunder, and (ii) it is fully aware and knowledgeable of and shall comply with its duties and responsibilities with respect to the privacy and confidentiality of medical records and protected health information under applicable federal and state laws, including but not limited to those imposed by applicable state and federal privacy and security laws. Upon written notice to City , Consultant may modify or temporarily suspend City’s access to and use of the CareMC Application, Online Services and/or CareMC Site as necessary to comply with any law or regulation.
B. Consultant War ranties. Consultant warrants that (i) it shall use c ommercially reasonable professional practices and good workmanship in providing the CareMC Application, and (ii) City support will be performed consistent with generally accepted industry standards. These warranties extend only to City.
C. Exclusive Remedy. For any breach of the foregoing warranties, Consultant ’s entire liability and City ’s exclusive remedy will be the correction of the problems or errors that cause the breach of warranty, if feasible, or termination of the Agreement.
5. DISCLAIMERS AND LIMITATIONS OF LIAB ILITY
A. D isclaimers . TO THE EXTENT ALLOWED BY APPLICABLE LAW, EXCEPT FOR THE LIMITED WARRANTIES DESCRIBED IN SECTION 4B ABOVE, CONSULTANT MAKES NO OTHER WARRANTIES, EXPRESS, IMPLIED OR
STATUTORY, AND EXPRESSLY DISCLAIMS ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, GOOD TITLE, SATISFACTORY QUALITY AND NONINFRINGEMENT. CITY SPECIFICALLY ACKNOWLEDGES AND AGREES AS FOLLOWS:
(i) Internet Usage. Ci ty acknowledges that the Internet is essentially an unregulated, insecure and unreliable environment, and that the ability of City to access and use the CareMC Application is dependent on the Internet and hardware, software and services provided by various Third Party Providers. CONSULTANT SHALL NOT BE RESPONSIBLE FOR CITY ’S INABILITY TO ACCESS OR USE THE CAREMC APPLICATION TO THE EXTENT SOLELY
CAUSED BY FAILURES OR INTERRUPTIONS OF ANY HARDWARE, SOFTWARE OR SERVICES PROVIDED BY CITY OR THIRD PARTY PROVIDERS.
(ii) CareMC Application. CIT Y ACKNOWLEDGES AND AGREES THAT CONSULTANT DOES NOT WARRANT
THAT THE CAREMC APPLICATION OR ONLINE SERVICES ARE ERROR FREE, THAT CITY WILL BE
ABLE TO ACCESS OR USE THE CAREMC APPLICATION OR ONLINE SERVICES WITHOUT PROBLEMS
OR INTERRUPTIONS, OR THAT THE CAREMC SITE AND CAREMC APPLICATION A RE NOT SUSCEPTIBLE TO INTRUSION, ATTACK OR COMPUTER VIRUS INFECTION.
B. Exclusion of Damages.
(i) Exclusion of Damages. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL,
INDIRECT, INCIDENTAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES (INCLUDING BUT NOT
LIMITED TO LOST PROFITS OR LOST REVENUES) UNDER THIS AGREEMENT, WHETHER OR NOT FORESEEABLE
AND REGARDLESS OF WHETHER CLAIMS UNDER THIS AGREEMENT ARE BROUGHT UNDER TORT, CONTRACT OR ANY OTHER LEGAL OR EQUITABLE THEORY.
(iii) Acknowledgment. T
he parties acknowledge that the limitations and disclaimers set forth in this Agreement were an essential element in setting consideration under this Agreement.
6. INDEMNIFICATI ON
A. M utual Indemnification. Subject to s ection 6D below, each party shall defend any third party claim against the other party arising from the death of or physical injury to any person or damage to the indemnified party’s property to the extent proxim ately caused by the negligence of the indemn ifying party or its agents or employees, and indemnify and hold harmless the other party and its respective officers, directors and employees from and against damages, liabilities and reasonable costs and expenses, includi ng reasonable legal fees (“Losses”) incurred in connection therewith.
B. Indemnification by Consultant. Subject to Section 6D below, Consultant shall defend any third party suit or action against City to the extent such suit or action is based on a claim that City’s permitted use of the CareMC Application under this Agreement constitutes an infringement of a United States patent, trademark, trade name, trade secret, copyright or other United States intellectual property right, and Consultant will pay those Losses finally awarded against City in any monetary settlement or final, non -appealable judgment of such suit or action which are specifically attributable to such claim. This indemnity does not apply to any claims based on City ’s use of the CareMC Application (i) in violation of this A greement or the Documentation (as defined in the CareMC License Agreement), (ii) in combination with any other software, hardware, network or system where the alleged infringement relates to such combination, or (iii) 69 78
Agreement No. A-8455
based on Consultant ’s compliance with City ’s instructions, designs or specifications where the alleged infringement relates to such compliance. If any portion of the CareMC Application becomes, or in Consultant ’s opinion is likely to become, the subject of a claim of infringement, then Consul tant may, at its option and expense, procure for City the right to continue using the CareMC Application or replace or modify the affected portion of the CareMC Application so that it becomes non-infringing. If neither alternative is reasonably available, Consultant may terminate this Agreement. THE FOREGOING STATES CONSULTANT ’S ENTIRE LIABILITY AND CITY’S SOLE REMEDY FOR INFRINGEMENT CLAIMS.
C. C ity Indemnification. Subject to Section 6D below, City shall defend, indemnify and hold harmless Consultant from Losses arising out of or relating to (i) City’s misuse of, modification to, rejection of or failure to implement on a timely basis any of Consultant ’s recommendations made hereunder, (ii) acts or omissions by Consultant that were undertaken at the express direction of City , (iii) City’s use of the CareMC Application in violation of the terms of the CareMC License Agreement, (iv) data or content included in or omitted from City Data (as defined in the CareMC License Agreement), (v) subject to Section 6A above, any claim by an employee of City or City’s insureds brought against Consultant due to the recommendations made by Consultant hereunder and not caused by a breach by Consultant of its obligations hereunder in providing such recommendations, and (vi) any claim described in Section 6B(i)-(iii) above.
D. Conditions. The parties’ indemnification obligations under this Section 6 are contingent upon: (i) the indemnified party giving prompt written notice to the indemnifying party of any claim under this Section (provided, however, that failure to give such not ification shall not affect the indemnification provided hereunder except to the extent, and only to the extent, that the indemnifying party shall have been actually prejudiced as a result of such failure), (ii) the indemnifying party having the right, but not the obligation, to assume sole control of the defense or settlement of the claim, and (iii) at the indemnifying party’s request and expense, the indemnified party cooperating in the investigation and defense of such claim(s). If the indemnifying party assumes the defense of any claim hereunder, the indemnified party shall be entitled to participate in (but not control) such defense and to retain its own counsel, at its own expense. The indemnifying party shall not settle or consent to an adverse judgment in any such claim that adversely affects the rights or interests of the indemnified party or imposes additional obligations on the indemnified party, without the prior express written consent of the indemnified party.
7. INS
URANCE
A. C onsultant Insurance. Consultant , at its sole expense, agrees to maintain, at all times during the term of the Agreement, the required professional liability, errors and omissions, workers' compensation, general, and auto liability insurance coverages as set forth on the Certificate of Insurance provided with the executed Service Agreement with an effective date of [insert date].
B. City I nsurance. City , at its sole expense, agrees to keep in force comprehensive general liability insurance and professional liability insurance with coverage limits in accordance with acceptable industry standards for the term of this Agreement. Up on request by Consultant, City shall furnish Consultant with a certificate of such insurance. City shall provide Consultant with prior written notice of any cancellation, non -renewal or material change to any such insurance coverages pursuant to its insurance policies. It is agreed t hat City shall be deemed in compliance with this Section 7B by being self -insured under terms and conditions and with sufficient reserves as is customary within the industry for companies of comparable size and operations.
8. L ICENSE TERM AND TER MINATION
A. T erm . The Term of the License Agreement shall run coterminous with the Master Agreement unless terminated pursuant to Section 8B or 8C hereunder this License Agreement.
B. Termination for Convenience . Either party shall have the right to termin ate this License Agreement for any reason or for no reason, upon ninety (90) days written notice to the other party.
C. Termination for Cause. This License Agreement may be terminated by either party for cause as follows: (i) upon thirty (30) days written notice if the other party breaches or defaults under any material provision of this Agreement and does not cures such breach prior to the end of such thirty (30) day period, (ii) effective immediately and without notice if the other party ceases to do business, or otherwise terminates its business operations, except as a result of an assignment, as permitted under the terms and condition s of this License Agreement, or (iii) effective immediately and without notice if the other party becomes in solvent or seeks protection under any bankruptcy, receivership, trust deed, creditors arrangement, composition or comparable proceeding, or if any such proceeding is instituted against the other (and not dismissed within ninety (90) days).
D. Effect.
Except to the extent expressly provided to the contrary herein, any right of action for breach of the License Agreement prior to termination, and the following provisions shall survive the termination of this License Agreement: Sections 1G, 2D, 4, 5 and 6.
Additionally, upon termination or expiration of the License Agreement (i) Consultant shall provide City with any proprietary data belonging to City, in the current format in which it is stored at Consultant at the termination of the License Agreement, ( ii) all licenses granted under this License Agreement shall terminate immediately, (iii) all rights to use the CareMC Application and Online S ervices shall cease immediately, and (iv) each party shall promptly return all information, documents, manuals and other materials belonging to the other party related to this License Agreement, whether in printed or electronic form, except as otherwise provided in this License Agreement, including without limitation all confidential information of the other party then currently in its possession.
9. CO NFIDENTIALITY
A. Definition of Confidential Information . “Confidential Information” shall mean any non -public data, information and other materials regarding the products, services or business of a party (and/or, if either party is bound to protect the confidentiality of any third 70 79
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party’s information, of a third party) provided to either party by the other party where such information is marked or otherw ise communicated as being “proprietary” or “confidential” or th e like, or where such information should, by its nature, be reasonably considered to be confidential and/or proprietary. Without limiting the foregoing, the parties agree that (i) the CareMC Appl ication, Documentation, Consultant Content (as defined in the in the CareMC License Agreement) and all software, source code, source documentation, inventions, know -how, and ideas, updates and any documentation and information relating thereto constitutes Confidential Information of Consultant , (ii) the City Data (as defined in the CareMC License Agreement) constitute Confidential Information of City , and (iii) this Agreement, the Exhibits and Schedules attached hereto, and the terms and conditions set forth herein and therein are Confidential Information of both parties.
B. Disclosure and Use of Confidential Information. The Confidential Information disclosed by either party (“ Disclosing Party”) to the other (“ Receiving Party”) constitutes the confidential and proprietary information of the Disclosing Party and the Receiving Party agrees to treat such Confidential Information in the same manner as it treats its own similar proprietary information, but in no case will the degree of care be less than reasonable care. The Receiving Party shall use the Confident ial Information of the Disclosing Party only in performing under this Agreement and shall retain the Confidential Information in confidence and not disclose it to any thi rd party (except as authorized under this Agreement) without the Disclosing Party’s ex press written consent. The Receiving Party shall disclose the Disclosing Party’s Confidential Information only to those employees and contractors of the Receiving Party who have a need to know such information for the purposes of this Agreement, and such employees and contractors must be bound by this Agreement or have entered into agreements with the Receiving Party containing confidentiality provisions covering the Confidential Information with terms and conditions at least as restrictive as those set forth herein.
C. Exceptions . N otwithstanding the foregoing, the parties’ confidentiality obligations hereunder shall not apply to information which: (i) is already known to the Receiving Party prior to disclosure by the Disclosing Party, (ii) becomes publicly available without fault of the Receiving Party, (iii) is rightfully obtained by the Receiving Party from a third party without restriction as to disclosure, (iv) is approved for release by written authorization of the Disclosing Party, (v) is developed independently by the Receiving Party without use of or access to the Disclosing Party’s Confidential Information, or (v) is required to be disclosed by law, rule, regulation, court of competent jurisdiction or governmental order, provided, howeve r, that the Receiving Party shall advise the Disclosing Party of the Confidential Information required to be disclosed promptly upon learning thereof in order to afford the Disclosing Party a re asonable opportunity to contest, limit or assist the Receiving Party in crafting the disclosure, and then such disclosure shall be made only to the extent necessary to satisfy such requirements.
D. Use o
f Data . Nothing shall prohibit Consultant from using aggregate, non-identifying, statistical data generated through its customers’, including City , use of the CareMC Application and Online Services for analytical purposes, provided that Consultant shall not use or disclose any such data or information in a manner that would reveal the identity of, or other confidential information concerning, City. Such aggregate, non -identifying statistical data could include, without limitation, statistics regarding usage of the CareMC Application and Online Se rvices, the number of case referrals generated through the CareMC Application and Online Services and the efficiencies gained by Consultant customers through their use of the CareMC Application and Online Services.
10. G
ENERAL PROVISIONS
A. C hoice o f Law. This Agreement shall be governed by and construed under the laws of the State of California and the United States without regard to conflicts of laws provisions thereof. The parties expressly agree that the United Nations Conventio n on Contracts f or the International Sale of Goods is specifically excluded from application to this Agreement. The parties submit to the jurisdiction of the United States federal courts for the State of California and agree, that said courts have the sole and exclusive jurisdiction over any cause of action arising under or in connection with this Agreement.
B. Co mpliance with Laws. Both parties shall comply with all federal, state, and local laws, regulations, ordinances, guidelines, permits and requirements applicable to providing services pursuant to this Agreement, and will be solely responsible for obtaining current information on such requirements.
C. Contacts for Notices. All written notice required or permitted hereunder shall be in writing and shall be sufficient if personally delivered or sent by facsimile or internationally recognized delivery service to the address or fax number set forth below, unless such address or fax number is changed by notice, to the other party, as permitted hereunder. Any notices shall be deemed given on the date received, as indicated (i) by receipt of electronic answer back in the case of facsimile, or (ii) the records of the delivery service, if by courier.
I
f to Consultant:
CorVel Corporation
1920 Main Street, Suite 900
Irvine, California 92614
Attn: Legal Department
Phone: (949) 851-1473
Fax: (866) 434-2469
Email: [email protected]
If to City:
71 80
Agreement No. A-8455
City of Oxnard Human Resources
300 West Third Street, 1st Floor
Oxnard, CA 93030
Attn: Risk Manager
D. A ssignment. Neither this Agreement nor any rights, licenses or obligations hereunder, may be assigned by either party without the prior written consent of the non-assigning party. Notwithstanding the foregoing, Consultant may assign this Agreement to any acquiror of all or of substantially all of Consultant ’s equity securities, assets or business related to the subject matter of this Agreement. Any attempted assignment in violation of this Agreement shall be void and without effect.
E. Severability. S hould any term of this Agreement be declared void or unenforceable by any arbitral tribunal or court of competent jurisdiction, such declaration shall have no effect on the remaining terms hereof, which shall continue in full force and effect.
F. Waiver. T he failure of either party to enforce any rights granted hereunder or to take action against the other party in the event of any breach hereunder shall not be deemed a waiver by that party as to subsequent enforcement of rights or subsequent actions in the event of future breaches.
G. Relationship of the Parties. The relationship of Consultant and Licensee established by this Agreement is that of independent contractors, and nothing contained in this Agreement shall be construed (i) to give either party the power to direct or control the day -to- day activities of the other, or (ii) to constitute the parties as partners, franchisee- franchiser, joint venturers, co -owners or otherwise as participants in a joint or common undertaking, or otherwise give rise to fiduciary obligations between the parties.
H. Force Majeure. Except for the obligation to mak e p ayments, nonperformance by either party shall be excused to the extent that performance is rendered impossible by war, acts of terrorism, strikes, fire, flood, governmental acts or orders or restrictio ns, failure of suppliers, or any other reason where failure to perform is beyond the control of the non-performing party.
I. Entire Agreement. This Agreement constitutes the entire, final, complete and exclusive agreement between the parties and supersedes all previous agreements or representations, oral or w ritten, relating to the subject matter of this Agreement. This Agreement may not be modified or amended except in writing signed by a duly authorized representative of each party. Both parties acknowledge having read the terms and conditions set forth in this Agreement and all attachments hereto, understand all terms and conditions, and agree to be bound thereby.
J. Counterparts. T
his Agreement may be executed in two counterparts, each of which shall be an original and together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties by their duly authorized representatives have executed this Agreement as of the Effective Date set forth above.
CORVEL ENTERPRISE COMP, INC. CITY OF OXNARD
By: By:
Name: Name:
Title: Title:
Date: Date:
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Agreement No. A-8455
AT
TACHMENT A
My Care Smartphone Claims App Attachment
End User License Agreement
Such access shall provide City’s claimants an opportunity to review the current status of their individual claim. For access by City claimant, such City claimant will be required to have a smartphone including but not limited to an Apple iOS 7.0+ smartphone or Android 4.0+ smartphone or other smartphone device with such access capabilities. City acknowledges the terms of Attachment A hereunder which shall be a part of the My Care App and which the End User (“Claimant”) shall be responsible for. The My Care App is at no costs to City for these Services.
Terms are non-negotiable as these are part of the Smart Phone App PLEASE READ THIS LICENSE AGREEMENT BEFORE USING THE APP. USE OF THE APP INDICATES END USER’S ACCEPTANCE OF THIS END USER LICENSE AGREEMENT. IF END USER DOES NOT AGREE WITH THE TERMS, END USER SHOULD NOT USE THE APP.
1. License Grant; License Restrictions. Either of Consultant Enterprise Comp, Inc. or Consultant Healthcare Corporation, as applicable, (“Consultant”) provides the mobile software application program and user manual(s) or help files contained therein, and any modifications, updates, revisions, or enhancements thereto received by End User from Consultant (collectively, the "App"), and licenses its use solely pursuant to the terms stated below:
a. End User is granted a nontransferable license to use the App under the terms stated in this Agreement for personal use. End User may not use the App for commercial purposes. Title and ownership of the App and of the copyright in the App remains with Consultant; b. The App may be used by End User on a single mobile device, which End User owns or uses and for which the App is designed to operate;
c. End User may not make copies, translations, or modifications of or to the App. End User may not alter, obscure, or remove the copyright notice on any copy of the App; d. End User may not assign, sell, distribute, lease, rent, sublicense, or transfer the App or this license or disclose the App to any other person. End User may not reverse-engineer, disassemble, or decompile the App or otherwise attempt to discover the source code or structural framework of the App; and
e. Consultant may terminate this Agreement and the license granted hereunder at any time. This Agreement and the license granted hereunder automatically terminates if End User fails to comply with any provision of this Agreement. End User agrees upon termination to: (i) cease using the App and providing or accessing any data or information by or through the App, and (ii) destroy the App, together with all copies, modifications, and merged portions in any form, including any copy on End User’s mobile device or on any computer.
2. Limited Warranty. The App is provided "AS IS" and with all faults. NO WARRANTIES ARE EXPRESSED AND NONE SHALL BE IMPLIED. CONSULTANT SPECIFICALLY EXCLUDES
ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NONINFRINGEMENT. CONSULTANT DOES NOT WARRANT THAT USE OF THE APP WILL BE UNINTERRUPTED OR ERROR-FREE.
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Agreement No. A-8455
3. M
aintenance & Support. The App is maintained by Consultant or its subcontractors. From time to time, Consultant may provide modifications, updates, revisions, or enhancements, all of which are offered pursuant to the terms and conditions of this Agreement. Consultant does not provide support to End Users. All support requests should be directed at End User’s employer or other person responsible to manage End User’s claims and not at Consultant.
4. Consent to use Data. All data or information submitted by End User through the App shall be used by Consultant in accordance with Consultant’s Privacy Policy posted at:
http://www.Consultant.com/privacy-policy/
5. Limitations of Liability (End User). IN NO EVENT WILL CONSULTANT'S LIABILITY FOR
ACTUAL DIRECT DAMAGES ARISING OUT OF THIS AGREEMENT OR THE USE OR PERFORMANCE OF THE APP EXCEED $100. IN NO EVENT WILL CONSULTANT BE
LIABLE FOR ANY LOST PROFITS, SALES, BUSINESS, DATA, COSTS OF PROCUREMENT
OF SUBSTITUTE GOODS OR SERVICES OR ANY INDIRECT, SPECIAL, INCIDENTAL, OR
CONSEQUENTIAL DAMAGES RESULTING FROM THE USE OF THE APP OR OTHERWISE
ARISING FROM THIS AGREEMENT, AND NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY. The parties agree that the above limits represent a reasonable allocation of risk.
6. Governing Law; Exclusive Jurisdiction. This Agreement is governed by the laws of California.
End User agrees that the federal or state courts sitting in State of California, shall be the exclusive courts of jurisdiction and venue for any litigation, special proceeding or other proceeding as between the parties that may be brought, or arise out of, or in connection with, or by reason of this Agreement.
The United Nations Convention on Contracts for the International Sale of Goods is expressly disclaimed.
7. Indemnification (End User). End User shall defend, indemnify and hold harmless Consultant from and against damages, liabilities and reasonable costs and expenses, including reasonable legal fees arising out of or relating to: (i) End User’s use of the App in violation of the terms of this Agreement, (ii) data or content included in or omitted from content and data input into the App by End User or any other third party using End User’s mobile device, and (iii) any claim by an employee of End User or End User’s insureds brought against Consultant due to the recommendations made by Consultant through the App.
8. Disclaimer. Consultant shall not be responsible or liable for any third party claims arising from the negligent acts, errors, omissions, willful misconduct or fraud caused by End User in connection with its use of the App or otherwise attributable this Agreement.
9. Assignment. End User may not assign any of End User’s rights or delegate any of End User’s obligations under this Agreement without the prior written consent of Consultant. Subject to the foregoing, this Agreement will bind and inure to the benefit of the parties, their respective successors and permitted assigns.
10. Notice. All notices required to be sent hereunder shall be in writing and shall be deemed to have been given when mailed by first class mail to the address listed below.
11. Severability. If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions of this Agreement will remain in full force. 74 83
Agreement No. A-8455
12. Wai
ver. The waiver by either party of a breach of any provision of this Agreement or the failure by either party to exercise any right hereunder shall not operate or be construed as a waiver of any subsequent breach of that right or as a waiver of any other right.
13. Export Administration. End User agrees to comply fully with all relevant export laws and regulations of the United States ("Export Laws") to assure that neither the App nor any direct product thereof is (1) exported, directly or indirectly, in violation of Export Laws; or (2) are used for any purposes prohibited by the Export Laws, including, without limitation, nuclear, chemical, or biological weapons proliferation.
14. Entire Agreement. This Agreement shall constitute the complete agreement between the parties and supersede all prior or contemporaneous agreements or representations, written or oral, concerning the subject matter of this Agreement. This Agreement may not be modified or amended except in writing signed by a duly authorized representative of each party; no other act, document, usage or custom shall be deemed to amend or modify this Agreement.
15. Survival. The provisions of Sections 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13 and 14 shall survive the termination of this Agreement.
Copyrights
Copyright © 2014 Consultant. All rights reserved.
This documentation and the corresponding App are the property of Consultant and are licensed to the user under the terms of this End User License Agreement. Unauthorized use or copying of the App, documentation, or any other associated materials is a violation of state and federal laws. These materials must be returned to Consultant if so demanded. 75 84
5-YEAR AGREEMENT WITH CORVEL ENTERPRISE COMP., INC. FOR THIRD PARTY LIABILITY ADMINISTRATION SERVICESPresented to the Finance and Governance CommitteeMike More, Human Resources ManagerMay 10, 2022 85 That the Finance and Governance Committee recommendthat the City Council approve and authorize the Mayor toexecute Agreement No. A-8455 with CorVel EnterpriseComp., Inc. in an amount not to exceed $1,515,000 for a 5-year term for workers’ compensation claims administrationand adjustment services.RECOMMENDATION 2 86
• The City currently contracts with Acclamation InsuranceManagement Services, Inc. (AIMS) for workers’compensation claims administration services•Original Agreement: 5-Year term from July 1, 2012 – June 30, 2017•First Amendment: 5-year term from July 1, 2017 – June 30, 2022• Staff conducted an RFP in January 2021 for workers’compensation claims administration services•Distributed RFP directly to 12 firms known to perform this work•Posted onpublicpurchase.com•Advertised on the City’s website•10 proposals received•Human Resources Department staff reviewed proposals andinterviewed top 3 ranked firms
BACKGROUND
3 87
• CorVel Enterprise Comp., Inc. selected as the most qualified firm to beawarded the agreement•Overall responsiveness to the RFP•Most advantageous staffing model•Demonstrated public agency experience•Experience and ability of its staff•Competitive pricing structure• Total cost of the agreement is not to exceed $1,515,000 over 5 years(includes CPI factor estimated at 5% and an allowance for additional costspursuant to the Rates and Cost Exhibit of the Agreement):FY 22-23: $ 280,175*FY 23-24: 287,934 FY 24-25: 301,330FY 25-26: 315,395FY 26-27: 330,166Total $1,515,000* Includes start-up costs of $5,000
RESULTS
4 88
That the Finance and Governance Committee recommendthat the City Council approve and authorize the Mayor toexecute Agreement No. A-8455 with CorVel EnterpriseComp., Inc. in an amount not to exceed $1,515,000 for a 5-year term for workers’ compensation claims administrationand adjustment services.Financial Impact• None in the current fiscal year.• This agreement will begin July 1, 2022 and is included aspart of the FY 2022-23 Budget.
RECOMMENDATION
5 89
QUESTIONS
90 FINANCE AND GOVERNANCE COMMITTEE
AGENDA REPORT
REPORTS
AGENDA ITEM NO. D.2
DATE: May 10, 2022
TO: Finance & Governance Committee
FROM: Betsy George, Chief Financial Officer, (805) 200-5400, [email protected]
SUBJECT: Resolution of City Council and Oxnard Financing Authority Approving the Issuance of Up to $19,200,000 in Principal of 2022 Local Obligation Revenue Refunding Bonds to Refund the Series 2012 Bonds. (10/5/5)
RECOMMENDATION
That the Finance and Governance Committee recommend City Council and City of Oxnard Financing Authority Board approve and authorize the following:
1. Resolution of the City Council of the City of Oxnard approving a first amendment to local agency financing documents and the execution of certain certificates relating to the issuance by the City of Oxnard Financing Authority of refunding revenue bonds for the purpose of refunding its outstanding Series 2012 Bonds.
2. Resolution of the Board of Directors of the City of Oxnard financing authority authorizing the sale, issuance, and delivery of not more than $19,200,000 in principal amount of Local Obligation Revenue Refunding Bonds (Special District Bond) and approving certain documents and authorizing certain actions in connection therewith.
(Presentation will be live upon Consultant's request.)
BACKGROUND
In 2012, the City of Oxnard Financing Authority (“Authority” or “City”) issued 2012 Local Obligation Revenue Bonds (“LORBs”), Series A Senior Lien Bonds and Series B Subordinate Lien Bonds (the “2012A Bonds” and “2012B Bonds,” respectively). The 2012A Bonds had an original par of $19,505,000 and the 2012B Bonds had an original par of $9,060,000. Combined, they have an outstanding balance of $18,765,000.
This balance reflects some early prepayments by taxpayers within the underlying Assessment District and Community Facilities Districts. The 2012A and 2012B Bonds were issued to purchase prior obligations that refunded the 2002 Assessment District No. 2001-1 Bonds, 2002 CFD No. 1 Bonds, and 2003 CFD No. 2000-3 Bonds. The 2012A and 2012B Bonds have a final maturity of September 2, 2033, and a first optional redemption of September 2, 2022. The 2012A Bonds have an S&P rating of “A-“. The 2012B Bonds are non- rated.
Refunding Analysis and Structure
Based on current market rates, the City can refund the 2012A and 2012B Bonds with the 2022 Local Obligation Revenue Refunding Bonds (“2022 Bonds”) to achieve interest rate savings. Based on current market 91 rates, the annual cash flow savings are estimated to average $170,000 per year from 2023 through 2033, a total of $1.85 million in cumulative cashflow savings. This equates to $1.15 million in net present value savings (over 6.3% of refunded par). These savings are based on current interest rates and would be subject to change with the market.
All savings will be credited against the assessment and special tax levies to the benefit of property owners in Assessment District No. 2001-1 (Rice Avenue/Highway 101 Interchange), CFD NO. 1 (Westport at Mandalay Bay), and CFD No. 2000-3 (Oxnard Boulevard/Highway 101 Interchange).
The 2022 Bonds are expected to preserve the current aggregate structure of the 2012A and 2012B Bonds, with the total debt service escalating at an average of 1% per year. The final maturity on the 2022 Bonds will remain 9/2/2033 (same final maturity as the 2012A/B Bonds).
Relative to the structure of the 2012A and 2012B Bonds, the 2022 Bonds will be sold as one series that refunds both of those prior series. Accordingly, the senior/subordinate structure is no longer needed given the development that has occurred within the Assessment District and Community Facilities Districts since the 2012A and 2012B Bonds were sold.
In the graph below, the blue bars represent the anticipated debt service on the 2022 Bonds, while the orange line represents the combined debt service on the 2012A and 2012B Bonds. The amount by which the orange line is higher than the blue bars represents anticipated annual cashflow savings this proposed refunding would generate on the bond payments due from 2023 through 2033.
Summary of Legal Documents
The issuance of the 2022 Bonds will require the Board of the City of Oxnard Financing Authority to approve resolutions and authorize an Indenture of Trust, a Placement Agent Agreement, and Irrevocable Refunding Instructions. The 2022 Bonds also require the City Council to approve the First Amendments to the Local Agency Financing Documents. Those legal documents are briefly summarized below:
92 Authorizing Resolutions - the Authorizing Resolutions authorize the legal documents and also authorize City staff to execute those legal documents for the 2022 Bonds. It also authorizes City staff to finalize the 2022 Bond provided it is within not-to-exceed parameters of $19,200,000 principal, 3.87% true interest cost, and a maximum term of 9/2/2033. These not-to-exceed parameters are conservative and represent the “worst case” scenario under which City staff would be authorized to issue the bonds. A refunding with these parameters would result in 3% net present value savings, the minimum amount identified under the City’s adopted debt management policy. In reality, the refunding is expected to result in greater savings, as discussed herein.
Indenture of Trust - the Indenture of Trust formalizes the relationship between the City of Oxnard Financing Authority (issuing the 2022 Bonds) and Computershare Trust Company, N.A. as trustee for the 2022 Bonds. The Indenture describes the terms of the 2022 Bonds, including the payment terms and schedule, prepayment options, other covenants related to the 2022 Bonds, and other administrative items.
Placement Agent Agreement – the Placement Agent Agreement between the City and Piper Sandler & Co. (“Piper Sandler”), which is acting as placement agent for the 2022 Bonds. This agreement defines Piper Sandler’s role in placing the 2022 Bonds with the selected bank and identifies the amount to be paid to Piper Sandler for services provided in that role. This fee is contingent upon a successful closing of the 2022 Bonds.
Irrevocable Refunding Instructions - the Irrevocable Refunding Instructions provide detailed instruction to Computershare Trust Company regarding the process of refunding the 2012A and 2012B Bonds. As such, it details the establishment of required funds, the application of monies toward refunding the 2012A and 2012B Bonds, and logistical items related to required noticing and escrow management for the 2012A/B Bonds.
First Amendment to Local Agency Financing Documents – the First Amendment to Local Agency Financing Documents amends the original 2012 documents to instead refer to the 2022 Bonds and documents. The Authority and underlying special districts and assessment district pledge repayment of the 2022 Bonds just as repayment of the 2012A and 2012B Bonds was originally pledged under the original Local Agency Financing Documents.
Anticipated Timing
The anticipated schedule for the 2022 Bonds is outlined below:
Timeline Task
May 10, 2022 Finance & Governance Committee
Mid/Late May Receive Proposals from banks; Select winning bank Late May through Mid-June Work with selected bank to lock interest rate and finalize terms of the 2022 Bonds
June 30, 2022 City Council considers 2022 Bonds
Mid-July 2022 Close 2022 Refunding Bonds, funds transferred into escrow September 2, 2022 Refund 2012A and 2012B Bonds
STRATEGIC PRIORITIES
This agenda item supports the Organizational Effectiveness strategy. The purpose of the Organizational Effectiveness strategy is to reinforce, stabilize, improve, and strengthen the organizational foundation of the City in order to build a modern, high-functioning City government that effectively and efficiently supports the operating departments in providing high-quality services and programs for our residents and businesses.
93 FINANCIAL IMPACT
The 2022 Bonds are expected to result in approximately $170,000 average annual savings from September 2023 to September 2033. This totals $1.85 million in cumulative cashflow savings through final maturity of the bonds. In present value terms, this equals approximately $1.15 million in savings net of all costs of issuing the bonds, including a City fee to compensate the City’s General Fund for staff time associated with working on the refunding on behalf of taxpayers.
The savings mentioned here will be enjoyed by taxpayers within Assessment District No. 2001-1 (Rice Avenue/Highway 101 Interchange), CFD NO. 1 (Westport at Mandalay Bay), and CFD No. 2000-3 (Oxnard Boulevard/Highway 101 Interchange). The taxpayers will see these savings starting with fiscal year 2022-23 tax levies.
Prepared by: NHA Advisors
ATTACHMENTS
1. Oxnard 2022 LORBs - First Amendment to Local Agency Financing Documents-c1
2. Oxnard 2022 LORBs - Irrevocable Refunding Instructions-c1
3. Oxnard 2022 LORBs - Placement Agent Agreement
4. Oxnard 2022 LORBs - Indenture of Trust-c1
5. Oxnard 2022 LORBs - Resolution of the Authority-c1
6. Oxnard 2022 LORBs - Resolution of the City-c1
7. 2022 LORBs Presentation - 5.10.22 FG 220419
94 60302.00021\35018021.1
FIRST AMENDMENT TO
LOCAL AGENCY FINANCING DOCUMENTS
by and among
CITY OF OXNARD FINANCING AUTHORITY
and
CITY OF OXNARD
and
CERTAIN COMMUNITY FACILITIES DISTRICTS OF THE
CITY OF OXNARD
and
COMPUTERSHARE TRUST COMPANY, N.A., as Fiscal Agent
Dated as of July 1, 2022
95 60302.00021\35018021.1
1 This FIRST AMENDMENT TO LOCAL AGENCY FINANCING DOCUMENTS (“First Amendment”) is made and entered into as of this 1st day of July, 2022, by and among the CITY OF OXNARD FINANCING AUTHORITY (“Authority”), a joint powers authority organized and existing under the laws of the State of California (“State”); the CITY OF OXNARD (“City”), a general law city organized and existing pursuant to the laws of the State on behalf of CITY OF OXNARD ASSESSMENT DISTRICT NO. 2001-1 (RICE AVENUE/HIGHWAY 101 INTERCHANGE) (the “AD”), COMMUNITY FACILITIES DISTRICT NO. 1 (WESTPORT AT MANDALAY BAY) OF THE CITY OF OXNARD (“CFD No. 1”), and CITY OF OXNARD COMMUNITY FACILITIES DISTRICT NO. 2000-3 (OXNARD BOULEVARD/HIGHWAY 101 INTERCHANGE) (“CFD No. 2000-3” and, together with the AD and the CFD No. 1, the “Special Districts”) each of CFD No. 1 and CFD No. 200-3 are organized and existing pursuant to the Mello-Roos Community Facilities Act of 1982 as amended, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State (“Mello-Roos Act”); and COMPUTERSHARE TRUST COMPANY, N.A. (“Bank”), a national banking association organized and existing under the laws of the United States of America. The Authority, the City, the Special Districts and the Bank may hereinafter be referred to individually as a “Party” or collectively as the “Parties.”
RECITALS
A. The Authority is a joint exercise of powers authority duly organized and existing under the provisions of Articles 1 through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (“Bond Law”), and is authorized pursuant to Article 4 of the Act to (i) purchase, with the proceeds of its bonds, bonds issued by a local agency and to hold such bonds and (ii) issue bonds to pay the cost of any public capital improvement.
B. The Authority issued its $19,505,000 City of Oxnard Public Financing Authority Local Obligation Revenue Bonds (2012 Special District Bond Refinancings), Series A Senior Lien Bonds (the “Series 2012A Bonds”), and its $9,060,000 City of Oxnard Financing Authority Local Obligation Revenue Bonds (2012 Special District Bond Refinancings), Series B Subordinate Lien Bonds (the “Series 2012B Bonds”, and together with the Series 2012A Bonds, the “Series 2012 Bonds”), for the purpose of acquiring the (i) the $11,835,000 City of Oxnard Assessment District No. 2001-1 (Rice Avenue/Highway 101 Interchange) Limited Obligation Improvement Refunding Bonds, Series 2012 (the “AD Bonds”), (ii) the $8,750,000 Community Facilities District No. 1 (Westport at Mandalay Bay) of the City of Oxnard 2012 Special Tax Refunding Bonds (the “CFD No. 1 Bonds”), and (iii) the $7,980,000 City of Oxnard Community Facilities District No. 2000-3 (Oxnard Boulevard/Highway 101 Interchange) Special Tax Refunding Bonds, Series 2012 (the “CFD No. 2000-3 Bonds” and, together with the AD Bonds and the CFD No. 1 Bonds, the “Acquired Obligations”) issued to refund certain Assessment District, CFD No. 1, and CFD No. 2000-3 bond issues. Each series of Acquired Obligations was issued pursuant to a separate Fiscal Agent Agreement, each dated as of August 1, 2012, by and between the City and the Bank with respect to the AD Bonds, and between the respective CFD and the Bank, as fiscal agent (the “Fiscal Agent Agreements”), as such Acquired Obligations and Fiscal Agent Agreements (collectively, the “Local Agency Financing Documents”) are further identified in Exhibits A and B, respectively, attached hereto and incorporated herein,
96 60302.00021\35018021.1
2 C. For the purpose of redeeming and defeasing the outstanding 2012 Authority Bonds, the Authority has determined to issue the City of Oxnard Public Financing Authority 2022 Local Obligation Revenue Refunding Bonds (Special District Bonds)in the aggregate initial principal amount of $_______________ (“2022 Authority Bonds”) pursuant to an Indenture of Trust, dated as of July 1, 2022, by and between the Authority and the Bank, as trustee (“2022 Authority Indenture”).
D. Pursuant to the 2022 Authority Indenture, the 2022 Authority Bonds will be secured by the same pledge of funds derived from the Acquired Obligations and Fiscal Agent Agreements, which Acquired Obligations will remain outstanding and in the ownership and possession of the Authority, held through the Bank, as trustee, and will not be re-issued or refunded.
E. The Local Agency Financing Documents contain certain references to the 2012 Authority Bonds and the 2012 Authority Indenture, and the Local Agency Financing Documents shall be amended upon the issuance of the 2022 Authority Bonds to reference the 2022 Authority Bonds and 2022 Authority Indenture, as provided herein.
F. In order to accommodate the pledge and assignment of the Acquired Obligations to the payment of the 2022 Authority Bonds as set forth in the 2022 Authority Indenture, the Parties wish to enter into this First Amendment and have duly authorized such First Amendment.
G. The Parties hereto agree that the Acquired Obligations have previously been delivered to the Authority or the Bank, as trustee of the 2012 Authority Bonds, as appropriate, and that such Acquired Obligations shall remain in such capacity upon issuance of the 2022 Authority Bonds and do not require a notation.
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises, covenants, and conditions herein contained, the Parties hereto agree as follows:
Section 1. Incorporation of Recitals and Definitions. All of the foregoing Recitals are true and correct and are incorporated in this First Amendment by reference.
Section 2. Definitions. For purposes of this First Amendment, the terms hereinafter set forth have the following meanings:
“Acquired Obligations” means, collectively, (i) the $11,835,000 City of Oxnard Assessment District No. 2001-1 (Rice Avenue/Highway 101 Interchange) Limited Obligation Improvement Refunding Bonds, Series 2012 (the “AD Bonds”), (ii) the $8,750,000 Community Facilities District No. 1 (Westport at Mandalay Bay) of the City of Oxnard 2012 Special Tax Refunding Bonds (the “CFD No. 1 Bonds”), and (iii) the $7,980,000 City of Oxnard Community Facilities District No. 2000-3 (Oxnard Boulevard/Highway 101 Interchange) Special Tax 97 60302.00021\35018021.1
3 Refunding Bonds, Series 2012 (the “CFD No. 2000-3 Bonds”). “2012 Authority Bonds” means collectively, $19,505,000 City of Oxnard Public Financing Authority Local Obligation Revenue Bonds (2012 Special District Bond Refinancings), Series A Senior Lien Bonds (the “Series 2012A Bonds”), $9,060,000 City of Oxnard Financing Authority Local Obligation Revenue Bonds (2012 Special District Bond Refinancings), Series B Subordinate Lien Bonds (the “Series 2012B Bonds”).
“2012 Authority Indenture” means that certain Indenture of Trust, by and between the Authority and the Bank, as trustee, dated as of August 1, 2012. “2022 Authority Bonds” means the City of Oxnard Public Financing Authority 2022 Local Obligation Revenue Refunding Bonds (Special District Bonds), issued pursuant to the Bond law in the aggregate principal amount of $________________. “2022 Authority Indenture” means that certain Indenture of Trust, by and between the Authority and the Bank, as trustee, dated as of July 1, 2022. “Authority” means the City of Oxnard Financing Authority, a joint exercise of powers agency.
“Authority Bonds Reserve Fund” means the Reserve Fund established for the 2022 Authority Bonds under the 2022 Authority Indenture.
“Authority Bonds Reserve Funds Proportionate Share” means, if the District is a Delinquent District (as defined in subsection (1) of Section 4.03 of the Authority Indenture), an amount determined by dividing the deficiency in the amounts that were paid by the Fiscal Agent for such Delinquent District to the Authority Trustee in payment of Debt Service on the Bonds in any Bond Year (as a result of a deficiency in the collection of Special Tax Revenues) by the amount withdrawn from the Reserve Fund to pay Debt Service on the 2022 Authority Bonds in that same Bond Year.
“Authority Indenture” means the 2022 Authority Indenture. “Bank” means Computershare Trust Company, N.A.
“Bond Law” means the Marks Roos Local Bond Pooling Act of 1985, constituting Article 4 of the Act (commencing with Section 6584), as it may hereafter be amended from time to time. “
“Fiscal Agent Agreements” means, collectively,
(i) that certain Fiscal Agent Agreement relating to City of Oxnard Assessment District No. 2001-1 (Rice Avenue/Highway 101 Interchange) Limited Obligation Improvement Refunding Bonds, Series 2012 dated as of August 1, 2012, by and between City and the Bank, as fiscal agent; (ii) that certain Fiscal Agent Agreement relating to the $8,750,000 Community Facilities District No. 1 (Westport at Mandalay Bay) of the City of Oxnard 2012 Special Tax 98 60302.00021\35018021.1
4 Refunding Bonds, dated as of August 1, 2012, by and between Community Facilities District No. 1 and the Bank, as fiscal agent;
(iii) that certain Fiscal Agent Agreement relating to the $7,980,000 City of Oxnard Community Facilities District No. 2000-3 (Oxnard Boulevard/Highway 101 Interchange) Special Tax Refunding Bonds, Series 2012, dated as of August 1, 2012, by and between Community Facilities District No. 2003-1 and the Bank, as fiscal agent; “Local Agency Financing Documents” means, collectively the Fiscal Agent Agreements and all other documents and agreements executed in connection with the issuance and sale of the Acquired Obligations necessary to secure the repayment thereof or ownership thereof by the Authority, as further identified in Exhibit B attached hereto and incorporated herein. “Special Districts” means, City of Oxnard Assessment District No. 2001-1 (Rice Avenue/Highway 101 Interchange) (the “AD”), Community Facilities District No. 1 (Westport at Mandalay Bay) of the City of Oxnard (“CFD No. 1”), and City of Oxnard Community Facilities District No. 2000-3 (Oxnard Boulevard/Highway 101 Interchange) (“CFD No. 2000-3”).
Section 3. Amendments to Local Agency Financing Documents. (a) Upon the issuance of the 2022 Authority Bonds and the defeasance of the outstanding 2012 Authority Bonds, all Local Agency Financing Documents currently in effect that refer to the 2012 Authority Bonds and/or the 2012 Authority Indenture (however such terms are designated therein), shall at that time be deemed amended to instead refer to the 2022Authority Bonds and/or 2022 Authority Indenture, as applicable.
(b) Upon the issuance of the 2022 Authority Bonds and defeasance of the outstanding 2012 Authority Bonds, all Fiscal Agent Agreements shall at that time be deemed amended to include the provisions set forth in subparagraphs (i) through (v) below. Terms used in such subparagraphs and not defined herein have the meaning(s) set forth in the applicable CFD Fiscal Agent Agreement.
(i) References in this Section 3(c) to the Fiscal Agent Agreements shall conform to the definition set forth in Section 2 hereof.
Section 4. Non-Objection to Authority Pledge of Acquired Obligations. The City and the Special Districts each expressly acknowledge the pledge of the Acquired Obligations to the payment of the 2022 Authority Bonds pursuant to the terms of the 2022 Authority Indenture, effective upon the issuance of the 2022 Authority Bonds and the defeasance of the outstanding 2012 Authority Bonds, and hereby confirm their consent and non-objection to such pledge by the Authority.
Section 5. Confirmation of Special Tax Pledge. Each applicable CFD expressly acknowledges and confirms that the Acquired Obligations of each applicable CFD are secured by 99 60302.00021\35018021.1
5 a first pledge of the Special Tax Revenues of the corresponding CFD as further set forth in Section,
2.11, Section 4.01 and Article IV of the Fiscal Agent Agreements.
Section 6. Due Authority. Each individual signing this First Amendment warrants and represents that he or she has been duly authorized by appropriate action of the Party he or she represents to enter into this First Amendment on behalf of such Party.
Section 7. Other Actions Authorized. Each of the Parties hereto are hereby authorized to take all other and future actions necessary or desirable to carry out the provisions hereof.
Section 8. Binding Effect. This First Amendment shall inure to the benefit of and shall be binding upon the Parties hereto and their respective successors and assigns.
Section 9. Interpretation. If any terms of this First Amendment are in conflict with the terms of any of the Local Agency Financing Documents, the terms of this First Amendment shall supersede any conflicting provisions in the Local Agency Financing Documents. Otherwise, except as amended by this First Amendment, the provisions of the Local Agency Financing Documents shall remain in full force and effect.
Section 10. Applicable Law. This First Amendment shall be governed by and construed in accordance with the laws of the State applicable to contracts made and performed in such State.
Section 11. Counterpart Signatures. This First Amendment may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.
[Remainder of page intentionally left blank]
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S-1
IN WITNESS WHEREOF, the Parties hereto have executed this First Amendment as of the date first above written.
CITY OF OXNARD FINANCING AUTHORITY
By: _____________________________
Name:
Title:
CITY OF OXNARD for and on behalf of
COMMUNITY FACILITIES DISTRICT NO. 1
OF THE CITY OF OXNARD ,
COMMUNITY FACILITIES DISTRICT NO.
2003-1 OF THE CITY OF OXNARD ,
and
CITY OF OXNARD, for ASSESSMENT
DISTRICT 2001-1
By: _______________________________________
Name:
Title:
-Signature Page-
First Amendment to Local Agency Financing Documents
101
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S-2
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Fiscal Agent
By: _____________________________
Name:
Title:
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A-1
EXHIBIT A
THE CFD'S AND LOCAL AGENCY OBLIGATIONS
CFD No. CFD Name Bond Caption
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B-1
EXHIBIT B
LOCAL AGENCY FINANCING DOCUMENTS
“Local Agency Financing Documents” includes, but is not limited to, the following documents relating to the Local Agency Obligations:
A.
B.
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60302.00021\35021417.1
IRREVOCABLE REFUNDING INSTRUCTIONS
These IRREVOCABLE REFUNDING INSTRUCTIONS (these “Instructions”), dated as of _____________, 2022, are given by the CITY OF OXNARD FINANCING AUTHORITY, a joint exercise of powers authority existing under the laws of the State of California (the “Authority”), to COMPUTERSHARE TRUST COMPANY, N.A., a national banking association organized and existing under the laws of the United States of America, as successor in interest to WELLS FARGO BANK, NATIONAL ASSOCIATION, acting as trustee (the “Trustee”) for the hereinafter defined Series 2012 Bonds;
W l T N E S S E T H :
WHEREAS, the Authority issued its $19,505,000 City of Oxnard Public Financing Authority Local Obligation Revenue Bonds (2012 Special District Bond Refinancings), Series A Senior Lien Bonds (the “Series 2012A Bonds”), and its $9,060,000 City of Oxnard Financing Authority Local Obligation Revenue Bonds (2012 Special District Bond Refinancings), Series B Subordinate Lien Bonds (the “Series 2012B Bonds,” and together with the Series 2012A Bonds, the “Series 2012 Bonds”), pursuant to an Indenture of Trust, dated as of August 1, 2012, (the “Prior Indenture”) by and between the Authority and Computershare Trust Company, N.A., as successor in interest to Wells Fargo Bank, National Association, acting as trustee thereunder (the “Prior Trustee”); and
WHEREAS, the Authority has determined that it is in the best financial interests of the Authority to refund, at this time, the outstanding Series 2012 Bonds; and WHEREAS, in order to provide funds for such purpose, the Authority is issuing its City of Oxnard Financing Authority 2022 Local Obligation Revenue Refunding Bonds (Special District Bonds) (the “Series 2022 Bonds”) and applying a portion of the proceeds thereof, together with certain other moneys, to defease and redeem a portion of the outstanding Series 2012 Bonds, as designated herein (the “Defeased Bonds”); and
WHEREAS, the Series 2022 Bonds are being issued pursuant to an Indenture of Trust, dated as of July 1, 2022, (the “2022 Indenture”) between the Authority and Computershare Trust Company, N.A., as trustee; and
WHEREAS, the Authority wishes to give these Instructions to the Prior Trustee for the purpose of providing the terms and conditions relating to the deposit and application of moneys to provide for the payment and redemption of a portion of the outstanding Series 2012 Bonds.
NOW, THEREFORE, the Authority hereby irrevocably instructs the Prior Trustee as follows:
Section 1. Establishment of the Series 2012 Bonds Refunding Fund. The Trustee shall establish and hold within the Principal Account established pursuant to Section 5.05 of the Prior Indenture, separate and apart from all other funds and accounts held by it, a special fund known as the “Series 2012 Bonds Refunding Fund” (the “Refunding Fund”) established in the Indenture.
All amounts on deposit in the Refunding Fund are hereby irrevocably pledged as a special trust 105
60302.00021\35021417.1 2
fund for the payment of regularly scheduled principal and interest thereon and the redemption of the outstanding Series 2012 Bonds, as identified in Schedule 1 attached hereto, on ______________, 2022. Neither the Trustee nor any other person shall have a lien upon or right of set off against the amounts at any time on deposit in the Refunding Fund, and such amounts shall be applied only as provided herein.
Section 2. Deposit into the Series 2012 Bonds Refunding Fund; Investment of Amounts. Concurrently with delivery of the Series 2022B Bonds, the Authority shall cause to be deposited in the Refunding Fund the amount of $_____________ in immediately available funds which represents $______________ on hand in the funds and accounts relating to the Series 2012 Bonds, plus the amount of $_______________ of Series 2022 Bonds proceeds. The Authority hereby directs the Trustee to invest the proceeds in the investments set forth in Schedule 2 attached hereto and herein incorporated.
The Authority signifies that by making the deposit described herein, it is discharging the Series 2012 Bonds pursuant to Sections 10.03 of the Indenture.
Section 3. Proceedings for Redemption of Series 2012 Bonds. The Authority hereby irrevocably elects, and directs the Trustee, to redeem, on _________, 2022, from amounts on deposit in the Refunding Fund, the Series 2012 Bonds pursuant to the provisions of the Indenture.
The Trustee shall provide notice of such redemption in accordance with the Indenture in order to allow for the redemption of the Series 2012 Bonds on ______________, 2022, as shown in Schedule 3 hereto.
Section 4. Application of Funds to Redeem Series 2012 Bonds. The Trustee shall apply the amounts on deposit in the Refunding Fund to pay the regularly scheduled payments of principal and interest on the Series 2012 Bonds and to redeem the outstanding Series 2022 Bonds, as identified in Schedule 1 attached hereto, on _____________, 2022 at a price equal to 100% of the principal amount thereof plus accrued and unpaid interest, all in accordance with the Indenture.
Section 5. Transfer of Remaining Funds. Any amounts on deposit in the Refunding Fund shall be used for the purpose of paying interest on and the principal of any outstanding bonds pursuant to the Indenture, as amended or supplemented. Any amounts on deposit in the Refunding Fund or any other funds and accounts related to the Series 2012 Bonds following redemption or defeasance of the Series 2012 Bonds shall be transferred to the Interest Account established under the 2022 Indenture to be used solely for the purpose of paying interest on the Series 2022B Bonds.
Section 6. Amendment. These Instructions shall be irrevocable by the Authority. These Instructions may be amended or supplemented by the Authority, but only if the Authority shall file with the Trustee (a) an opinion of nationally recognized bond counsel engaged by the Authority stating that such amendment or supplement will not, of itself, adversely affect the exclusion from gross income of interest on the Series 2012 Bonds under federal income tax law, and (b) a certification of an independent accountant or independent financial adviser engaged by the Authority stating that such amendment or supplement will not affect the sufficiency of funds invested and held hereunder to make the payments required by Section 4. 106
60302.00021\35021417.1 3
Section 7. Application of Certain Terms of the Indenture. All of the terms of the Indenture relating to the payment of principal of and interest and repayment premium, if any, on the Series 2012 Bonds and the redemption thereof, and the protections, immunities and limitations from liability afforded the Trustee, are incorporated in these Instructions as if set forth in full herein.
Section 8. Counterparts. These Instructions may be signed in several counterparts, each of which will constitute an original, but all of which will constitute one and the same instrument. [Signature page follows]
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S-1
Section 9. Governing Law. These Instructions shall be construed in accordance with and governed by the laws of the State of California.
CITY OF OXNARD FINANCING
AUTHORITY
By:
Chief Financial Officer
ACCEPTED:
COMPUTERSHARE TRUST COMPANY, N.A.
as Trustee
By:
Authorized Officer
-Signature Page-
Irrevocable Refunding Instructions
108
60302.00021\35021417.1 Schedule-1
SCHEDULE 1
BONDS TO BE REDEEMED
Maturity Date
(September 2) Principal Amount
CUSIP
(Base CUSIP )
109
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SCHEDULE 2
ESCROW INVESTMENTS
Purchase Date
Type of
Security
Type of
SLGS
Maturity
Date
First
Interest
Payment
Date
Par
Amount Rate
Max
Rate Total Cost
ESCROW CASH FLOW
Date Principal Interest
Net Escrow
Receipts
110
60302.00021\35021417.1 Schedule-3-1
SCHEDULE 3
NOTICE OF OPTIONAL REDEMPTION
$19,505,000
ORIGINAL PRINCIPAL AMOUNT CITY OF
OXNARD PUBLIC FINANCING AUTHORITY
LOCAL OBLIGATION REVENUE BONDS (2012
SPECIAL DISTRICT BOND REFINANCINGS),
SERIES A SENIOR LIEN BONDS
AND
$9,060,000
ORIGINAL PRINCIPAL AMOUNT CITY OF
OXNARD FINANCING AUTHORITY LOCAL
OBLIGATION REVENUE BONDS (2012 SPECIAL
DISTRICT BOND REFINANCINGS), SERIES B
SUBORDINATE LIEN BONDS
______________, 2022
NOTICE IS HEREBY GIVEN pursuant to Section 4.01(d) of the Indenture of Trust, dated as of August 1, 2012 between the City of Oxnard Financing Authority (the “Authority”) and Computershare Trust Company, N.A., as successor in interest to Wells Fargo Bank, National Association (the “Trustee”) that the below indicated Bonds (the “Bonds”) are, subject to the following paragraph, to be redeemed in full on _____________, 2022 (the “Redemption Date”) at a price equal to 100% of the principal amount represented thereby together with interest accrued to the Redemption Date.
CUSIP
Maturity
Date
Principal
Redeemed
Redemption
Price
All outstanding Bonds called for redemption are subject to full redemption on the Redemption Date and no holder of any Bond shall have the right to elect to retain such Bond. Interest represented by the Bonds will cease to accrue on and after the Redemption Date.
All Bonds must be surrendered to the Trustee for purchase not later than 3:30 p.m. Eastern Time on the Redemption Date. Payment of the Redemption Price on the Bonds redeemed will become due and payable on the Redemption Date upon presentation and surrender thereof in the following manner:
Delivery Instructions
Please call Bondholder Services at _____________ with any questions. 111
60302.00021\35021417.1 Schedule 3-2
Holders of the Bonds presenting their certificates in person for same day payment must surrender their certificate(s) by 1:00 P.M. CST on or after the Redemption Date and a check will be available for pick up after 2:00 P.M. CST. Checks not picked up by 4:30 P.M. will be mailed out to the Bond holder via first class mail. If payment of the Redemption Price is to be made to the registered owner of the Bond, you are not required to endorse the Bond to collect the Redemption Price.
REQUIREMENT INFORMATION
For a list of redemption requirements please visit our website at ______________________ and click on the “Bondholder Information” link.
IMPORTANT NOTICE
Under the Job and Growth Tax Relief Reconciliation Act of 2003 (the “Act”), 24% will be withheld if tax identification number is not properly certified.
Subject to the redemption of the Bonds on the Redemption Date, all interest on the Bonds will cease to accrue from and after the Redemption Date, and from and after the Redemption Date such Bonds shall no longer be entitled to any lien, benefit or security under the Indenture and the Owners thereof shall have no rights in respect of such redeemed Bonds except to receive payment of the Redemption Price.
The method of presentation and delivery of a Bond is at the option and risk of the holder of each Bond. If mail is used, insured registered mail, return receipt requested is suggested.
COMPUTERSHARE TRUST COMPANY, N.A.,
as Trustee
Date: ____________, 2022
112
1 April 19, 2022
Betsy George, Chief Financial Officer
City of Oxnard
300 West Third Street
Oxnard, CA 93030
Re: Placement Agent Engagement Letter
City of Oxnard, California
2022 Local Obligation Revenue Refunding Bonds
Dear Ms. George:
This letter confirms the agreement (the “Agreement”) between Piper Sandler & Co. (“Piper Sandler” or “we” or “us”) and the City of Oxnard (the “Issuer” or “you”) as follows:
1.Engagement. The Issuer engages Piper Sandler to act as its exclusive representative to assist you on a best efforts basis in placing the proposed private transaction (the “Transaction”) of the above-referenced Securities. You acknowledge and agree that Piper Sandler’s engagement hereunder is not an agreement by Piper Sandler or any of its affiliates to underwrite, place or purchase the Securities or otherwise provide any financing to you. We may decline to participate in the Transaction if we reasonably determine that the Transaction has become impractical or undesirable. We accept this engagement upon the terms and conditions set forth in this agreement.
As currently contemplated, the Transaction will be a placement of the Securities with gross proceeds of approximately $16,000,000. You may in your discretion postpone, modify, abandon or terminate the Transaction prior to closing. Sale and delivery of the Securities by the Issuer and purchase by the purchasers will occur on the day of closing (“Closing Date”).
During the term of our engagement, we will as directed by you and as appropriate to the Transaction, provide the following services:
(a) consult with you in planning and implementing the Transaction; (b) assist you in reviewing any transaction materials (the “Transaction Materials”) we mutually agree are beneficial or necessary to the consummation of the Transaction; (c) assist you in preparing for due diligence conducted by potential investors; (d) identify potential investors and use our reasonable commercial efforts to assist in arranging sales of the Securities to investors;
(e) consult with you in structuring the investment; and (f) assist you in negotiating definitive documentation.
2.Fees and Expenses.
(a) For our services, you agree to pay us:
113
2 (1.) a placement agent fee of $25,000 from the gross proceeds received by you on all sales of the Securities payable by wire transfer of immediately available funds at closing. For avoidance of doubt, the fee shall not be payable in the event a closing of the Transaction does not occur.
3.Representations, Warranties and Agreements of the Issuer.
You represent and warrant to, and agree with us, that:
(a) the Securities will be sold by you in compliance with the requirements for exemptions from registration or qualification of, and otherwise in accordance with, all federal and state Securities laws and regulations;
(b) all financial projections that have or will be made available to Piper Sandler by you or any of your representatives in connection with the Transaction (the “Projections”) have been and will be prepared in good faith and will be based upon assumptions believed by you to be reasonable (it being understood that projections by their nature are inherently uncertain and no assurances are being given that the results reflected in the Projections will be achieved);
(c) you will make available to us and each purchaser such documents and other information which we and each purchaser reasonably deem (the “Transaction Materials”) appropriate and will provide access to your officers, directors, employees, accountants, counsel and other representatives and will provide each purchaser and us opportunities to ask questions and receive answers from these persons; it being understood that we and each purchaser will rely solely upon such information supplied by you and your representatives without assuming any responsibility for independent investigation or verification thereof; (d) you agree to be responsible for the accuracy and completeness of any Transaction Materials to the extent of federal securities laws applicable to the Transaction. You agree to notify us promptly of any material adverse changes, or development that may lead to any material adverse change, in your business, properties, operations, financial condition or prospects and concerning any statement contained in any Transaction Material, or in any other information provided to us, which is not accurate or which is incomplete or misleading in any material respect;
(e) On the Closing Date, you will deliver or cause to be delivered to the Placement Agent:
(2.) The Opinion of Bond Counsel to the Issuer, dated the Closing Date relating to:
(i) the validity of the Securities;
(ii) exemption from registration and qualification under federal and state securities law; and
(iii) the tax-exempt status of the Securities, together with a reliance letter from such counsel, dated the Closing Date and addressed to us and in a form acceptable to us.
4.Other Matters Relating to Our Engagement. You acknowledge that you have retained us solely to provide the services to you as set forth in this agreement. As placement agent, Piper Sandler may provide advice concerning the structure, timing, terms, and other similar matters concerning the Transaction. You acknowledge and agree that: (i) the primary role of Piper Sandler as a 114
3 placement agent, is to place securities to investors in an arms-length commercial transaction and that Piper Sandler has financial and other interests that differ from your interests (ii) Piper Sandler is not acting as a municipal advisor, financial advisor or fiduciary to you or any other person or entity and has not assumed any advisory or fiduciary responsibility to you with respect to the transaction contemplated herein and the discussions, undertakings and proceedings leading thereto (irrespective of whether Piper Sandler has provided other services or is currently providing other services to you on other matters) (iii) the only obligations Piper Sandler has to you with respect to the transaction contemplated hereby expressly are set forth in this agreement and (iv) you have consulted your own legal, accounting, tax, financial and other advisors, as applicable, to the extent deemed appropriate in connection with the transaction contemplated herein.
5.Disclosure. Attached to this letter are regulatory disclosures required by the Securities and Exchange Commission and the Municipal Securities Rulemaking Board to be made by us at this time because of this engagement. We may be required to send you additional disclosures regarding the material financial characteristics and risks of such transaction or describing those conflicts. At that time, we also will seek your acknowledgement of receipt of any such additional disclosures. It is our understanding that you have the authority to bind the Issuer by contract with us, and that you are not a party to any conflict of interest relating to the Securities. If our understanding is incorrect, please notify the undersigned immediately.
6.Termination. You or we may terminate our engagement under this agreement, with or without cause, upon ten days’ written notice to the other party. The fee, expense reimbursement, your representations, warranties and agreements and miscellaneous provisions of this agreement will survive any termination of our engagement under this agreement.
7.Section Headings. Section headings contained herein are for convenience of reference only and are not part of this agreement.
8.Amendment. This agreement may be amended only by a written instrument executed by each of the Parties. The terms of this agreement may be waived only by a written instrument executed by the party waiving compliance.
9.Entire Agreement. This agreement embodies the entire agreement and understanding between you and us and supersedes all prior agreements and understandings relating to the subject matter of this agreement.
10.No Assignment. This agreement has been made by the Issuer and Piper Sandler, and no other person shall acquire or have any right under or by virtue of this agreement.
11.Governing Law. This agreement, and all claims or causes of action (whether in contract or tort) that may be based upon, arise out of or relate to this agreement or the negotiation, execution or performance of this agreement, will be governed by and construed in accordance with the laws of New York. You and we hereby waive all right to trial by jury in any action, proceeding, or counterclaim (whether based upon contract, tort or otherwise) in connection with any dispute arising out of this agreement or any matters contemplated by this agreement.
12.Consent to Jurisdiction; Service of Process. The parties each hereby (a) submits to the jurisdiction of any state or federal court sitting in the County of New York, State of New York for the resolution of any claim or dispute with respect to or arising out of or relating to this agreement or the relationship between the parties (b) agrees that all claims with respect to such actions or proceedings may be heard and determined in such court, (c) waives the defense of an inconvenient forum, (d) agrees not to commence any action or proceeding relating to this agreement other than in a state or federal court sitting in the County of New York, State of New York and (e) agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other 115
4 jurisdictions by suit on the judgment or in any other manner provided by law. Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 16. Nothing in this agreement will affect the right of any party to this agreement to serve process in any other manner permitted by law.
13.Effectiveness. This agreement shall become effective upon its execution by duly authorized officials of all parties hereto and shall be valid and enforceable from and after the time of such execution.
14.Severability. In the event any provision of this agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. You and us will endeavor in good faith negotiations to replace the invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid or unenforceable provisions.
15.Counterparts. This agreement may be executed in several counterparts (including counterparts exchanged by email in PDF format), each of which shall be an original and all of which shall constitute but one and the same instrument.
16.Notices. Any notice required or permitted to be given under this agreement shall be given in writing and shall be effective from the date sent by registered or certified mail, by hand, facsimile or overnight courier to the addresses set forth on the first page of this agreement with a copy sent to the General Counsel of such Party.
17. THE PARTIES HEREBY IRREVOCABLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.
Please confirm that the foregoing correctly and completely sets forth our understanding by signing and returning to us the enclosed duplicate of this engagement agreement.
Sincerely,
________________________________
Renee Vancho, Senior Vice President
Piper Sandler & Co.
Acknowledgement and Approval of Engagement
and Receipt of Appendix A Disclosures
________________________________
Betsy George, Chief Financial Officer
City of Oxnard
Date: ___________________________
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5 Appendix A – G-17 Disclosure
Thank you for engaging Piper Sandler & Co. to serve as your placement agent. We are writing to provide you with certain disclosures relating to the captioned bond issue (Bonds), as required by Municipal Securities Rulemaking Board (MSRB) Rule G-17 as set forth in MSRB Notice 2019-20 (Nov. 8, 2019).1.
Piper Sandler intends to serve as a placement agent respecting the Bonds and not as a financial advisor or municipal advisor to you. As part of our services as a placement agent, we may provide advice concerning the structure, timing, terms, and other similar matters concerning the issuance of the Bonds.
Standard Disclosures
Disclosures Concerning the Placement Agent Role:
MSRB Rule G-17 requires us to deal fairly at all times with both municipal issuers and investors. Our primary role in this transaction is to facilitate the sale and purchase of municipal securities between you and one or more investors for which we will receive compensation. Unlike a municipal advisor, a placement agent does not have a fiduciary duty to the Issuer under the federal securities laws and is, therefore, not required by federal law to act in the best interests of the Issuer without regard to its own financial or other interests. The placement agents have a duty to purchase the Bonds from the Issuer at a fair and reasonable price but must balance that duty with their duty to sell the Bonds to investors at prices that are fair and reasonable.
In the event an official statement is prepared, the placement agent will review the official statement for the Bonds in accordance with, and a part of, their respective responsibilities to investors under the federal securities laws, as applied to the facts and circumstances of this transaction.2
Disclosures Concerning the Placement Agent’s Compensation:
The placement agent will be compensated by a fee that was negotiated and entered into in connection with the issuance of the Bonds. Payment or receipt of the placement agent fee will be contingent on the closing of the transaction and the amount of the fee may be based, in whole or in part, on a percentage of the principal amount of the Bonds. While this form of compensation is customary in the municipal securities market, it presents a conflict of interest since the placement agent may have an incentive to recommend to the Issuer a transaction that is unnecessary or to recommend that the size of the transaction be larger than is necessary.
If you or any other Issuer officials have any questions or concerns about these disclosures, please make those questions or concerns known immediately to the undersigned. In addition, you should consult with the Issuer’s own financial and/or municipal, legal, accounting, tax and other advisors, as applicable, to the extent you deem appropriate.
Please note that nothing in this letter should be viewed as a commitment by the placement agent to purchase or sell all the Bonds and any such commitment will only exist upon the execution of any bond purchase agreement or similar agreement and then only in accordance with the terms and conditions thereof.
1 Revised Interpretive Notice Concerning the Application of MSRB Rule G‐17 to Underwriters of Municipal Securities (effective Mar. 31, 2021).
2 Under federal securities law, an issuer of securities has the primary responsibility for disclosure to investors. The review of the official statement by the underwriters is solely for purposes of satisfying the underwriters’ obligations under the federal securities laws and such review should not be construed by an issuer as a guarantee of the accuracy or completeness of the information in the official statement. 117
6 You have been identified by the Issuer as a primary contact for the Issuer’s receipt of these disclosures, and that you are not a party to any disclosed conflict of interest relating to the subject transaction. If our understanding is incorrect, please notify the undersigned immediately. We are required to seek your acknowledgement that you have received this letter. Accordingly, please send me an email to that effect, or sign and return the enclosed copy of this letter to me at the address set forth above. Otherwise, an email read receipt from you or automatic response confirming that our email was opened by you will serve as an acknowledgment that you received these disclosures.
Depending on the structure of the transaction that the Issuer decides to pursue, or if additional actual or potential material conflicts are identified, we may be required to send you additional disclosures regarding the material financial characteristics and risks of such transaction and/or describing those conflicts. At that time, we also will seek your acknowledgement of receipt of any such additional disclosures. 118
7 Appendix B – Fixed Rate Bonds
The following is a general description of the financial characteristics and security structures of fixed rate municipal bonds (“Fixed Rate Bonds”), as well as a general description of certain financial risks that are known to us and reasonably foreseeable at this time and that you should consider before deciding whether to issue Fixed Rate Bonds. If you have any questions or concerns about these disclosures, please make those questions or concerns known immediately to us. In addition, you should consult with your financial and/or municipal, legal, accounting, tax, and other advisors, as applicable, to the extent you deem appropriate.
Financial Characteristics
Maturity and Interest. Fixed Rate Bonds are interest-bearing debt securities issued by state and local governments, political subdivisions and agencies and authorities, whether for their benefit or as a conduit issuer for a nongovernmental entity. Maturity dates for Fixed Rate Bonds are fixed at the time of issuance and may include serial maturities (specified principal amounts are payable on the same date in each year until final maturity) or one or more term maturities (specified principal amounts are payable on each term maturity date) or a combination of serial and term maturities.
The final maturity date typically will range between 10 and 30 years from the date of issuance.
Interest on the Fixed Rate Bonds typically is paid semiannually at a stated fixed rate or rates for each maturity date.
Redemption. Fixed Rate Bonds may be subject to optional redemption, which allows you, at your option, to redeem some or all the bonds on a date prior to scheduled maturity, such as in connection with the issuance of refunding bonds to take advantage of lower interest rates. Fixed Rate Bonds will be subject to optional redemption only after the passage of a specified period, often approximately ten years from the date of issuance, and upon payment of the redemption price set forth in the bonds, which may include a redemption premium. You will be required to send out a notice of optional redemption to the holders of the bonds, usually not less than 30 days prior to the redemption date. Fixed Rate Bonds with term maturity dates also may be subject to mandatory sinking fund redemption, which requires you to redeem specified principal amounts of the bonds annually in advance of the term maturity date. The mandatory sinking fund redemption price is 100% of the principal amount of the bonds to be redeemed.
Security
Payment of principal of and interest on a municipal security, including Fixed Rate Bonds, may be backed by various types of pledges and forms of security, some of which are described below.
General Obligation Bonds. “General obligation (GO) bonds” are debt securities to which your full faith and credit is pledged to pay principal and interest. If you have taxing power, generally you will pledge to use your ad valorem (property) taxing power to pay principal and interest. The debt service on “unlimited tax” GO bonds are paid from ad valorem taxes which are not subject to state constitutional property tax millage limits, whereas “limited tax” GO Bonds are subject to such limits.
General obligation bonds constitute a debt and, depending on applicable state law, may require that you obtain approval by voters prior to issuance. In the event of default in required payments of interest or principal, the holders of general obligation bonds generally will have certain rights under state law to compel you to impose a tax levy.
Revenue Bonds. “Revenue bonds” are debt securities that are payable only from a specific source or sources of revenues. Revenue bonds are not a pledge of your full faith and credit, and you (or, if you are a conduit issuer, the obligor, as described in the following paragraph) are obligated to pay principal and interest on your revenue bonds only from the revenue source(s) specifically pledged to the bonds. Revenue bonds do not permit the bondholders to compel you to impose a 119
8 tax levy for payment of debt service. Pledged revenues may be derived from operation of the financed project or system, grants or excise or other specified taxes. Generally, subject to state law or local charter requirements, you are not required to obtain voter approval prior to issuance of revenue bonds. If the specified source(s) of revenue become inadequate, a default in payment of principal or interest may occur. Various types of pledges of revenue may be used to secure interest and principal payments on revenue bonds. The nature of these pledges may differ widely based on state law, the type of issuer, the type of revenue stream and other factors.
Some revenue bonds (conduit revenue bonds) may be issued by a governmental issuer acting as a conduit for the benefit of a private sector entity or a 501(c)(3) organization (the obligor). Conduit revenue bonds commonly are issued for not-for-profit hospitals, educational institutions, single and multi-family housing, airports, industrial or economic development projects, and student loan programs, among other obligors. Principal and interest on conduit revenue bonds normally are paid exclusively from revenues pledged by the obligor. Unless otherwise specified under the terms of the bonds, you are not required to make payments of principal or interest if the obligor defaults.
The description above regarding “Security” is only a summary of certain possible security provisions for the bonds and is not intended as legal advice. You should consult with your bond counsel for further information regarding the security for the bonds.
Financial Risk Considerations
Certain risks may arise in connection with your issuance of Fixed Rate Bonds, including some or all the following (generally, the obligor, rather than the issuer, will bear these risks for conduit revenue bonds):
Issuer Default Risk. You may be in default if the funds pledged to secure your bonds are not enough to pay debt service on the bonds when due. The consequences of a default may be serious for you and, depending on applicable state law and the terms of the authorizing documents, the holders of the bonds, the trustee and any credit support provider may be able to exercise a range of available remedies against you. For example, if the bonds are secured by a general obligation pledge, you may be ordered by a court to raise taxes. Other budgetary adjustments also may be necessary to enable you to provide sufficient funds to pay debt service on the bonds. If the bonds are revenue bonds, you may be required to take steps to increase the available revenues that are pledged as security for the bonds. A default may negatively impact your credit ratings and may effectively limit your ability to publicly offer bonds or other securities at market interest rate levels. Further, if you are unable to provide sufficient funds to remedy the default, subject to applicable state law and the terms of the authorizing documents, you may find it necessary to consider available alternatives under state law, including (for some issuers) state-mandated receivership or bankruptcy. A default also may occur if you are unable to comply with covenants or other provisions agreed to in connection with the issuance of the bonds.
This description is only a summary of issues relating to defaults and is not intended as legal advice.
You should consult with your bond counsel for further information regarding defaults and remedies.
Bonds payable from the general fund, particularly bonds without a defined revenue stream identified to pay debt service, reduce your flexibility to balance the general fund. Because a fixed debt service payment is required to be paid regardless of how your general fund is impacted by revenue losses or by increased expenses, you have less flexibility in the options available to you in assuring a balanced budget for your general fund.
General Fund Obligations that are Project Based. Some general fund obligations are issued for projects which are expected to generate revenues that will pay for some or all of the debt service on the bonds. In the event the project does not generate the anticipated levels of revenues available for debt service, or, in the extreme case, does not create any revenue available for debt service, you may need to make payments from other available general fund revenues. This may force you to reduce other expenditures or to make difficult decisions about how to pay your debt service 120
9 obligation while meeting other expenditure needs.
General Fund Obligations that are Subject to Annual Appropriation. Some general fund obligations require that debt service is subject to annual appropriation by your governing body. If your governing body decides not to appropriate payments for debt service, your credit ratings may be negatively impacted and you may be forced to pay a higher interest rate on future debt issuance or may be unable to access the market for future debt issuance.
For all bonds, a default may negatively impact your credit ratings and may effectively limit your ability to publicly offer bonds or other securities at market interest rate levels. Further, if you are unable to provide sufficient funds to remedy the default, subject to applicable state law and the terms of the authorizing documents, it may be necessary for you to consider available alternatives under state law, including (for some issuers) state-mandated receivership or bankruptcy. A default also may occur if you are unable to comply with covenants or other provisions agreed to in connection with the issuance of the bonds.
Redemption Risk. Your ability to redeem the bonds prior to maturity may be limited, depending on the terms of any optional redemption provisions. If interest rates decline, you may be unable to take advantage of the lower interest rates to reduce debt service.
Refinancing Risk. If your financing plan contemplates refinancing some or all the bonds at maturity (for example, if you have term maturities or if you choose a shorter final maturity than might otherwise be permitted under the applicable federal tax rules), market conditions or changes in law may limit or prevent you from refinancing those bonds when required.
Reinvestment Risk. You may have proceeds from the issuance of the bonds available to invest prior to the time that you are able to spend those proceeds for the authorized purpose. Depending on market conditions, you may not be able to invest those proceeds at or near the rate of interest that you are paying on the bonds, which is referred to as “negative arbitrage”.
Tax Compliance Risk. The issuance of tax-exempt bonds is subject to several requirements under the United States Internal Revenue Code, as enforced by the Internal Revenue Service (IRS). You must take certain steps and make certain representations prior to the issuance of tax-exempt bonds. You also must covenant to take certain additional actions after issuance of tax-exempt bonds. A breach of your representations or your failure to comply with certain tax-related covenants may cause the interest on bonds to become taxable retroactively to the date of issuance of the bonds, which may result in an increase in the interest rate that you pay on the bonds or the mandatory redemption of the bonds. The IRS also may audit you or your bonds, in some cases on a random basis and in other cases targeted to specific types of bond issues or tax concerns. If tax- exempt bonds are declared taxable, or if you are subject to audit, the market price of your bonds may be adversely affected. Further, your ability to issue other tax-exempt bonds also may be limited.
This description of tax compliance risks is not intended as legal advice and you should consult with your bond counsel regarding tax implications of issuing the bonds. 121
60302.00021\35016204.1
INDENTURE OF TRUST
by and between
COMPUTERSHARE TRUST COMPANY, N.A.,
as Trustee
and
CITY OF OXNARD FINANCING AUTHORITY
Dated as of ______________, 2022
Relating to:
$________
City of Oxnard Financing Authority
2022 Local Obligation Revenue Refunding Bonds
(Special District Bonds)
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1 INDENTURE OF TRUST
THIS INDENTURE OF TRUST dated as of ______________, 2012 (this “Indenture”), is by and between the City of Oxnard Financing Authority, a joint exercise of powers authority organized and existing under and by virtue of the laws of the State of California (the “Authority”), and Computershare Trust Company, N.A., a national banking association organized and existing under and by virtue of the laws of the United States and having a corporate trust office in Los Angeles, California, as trustee (the “Trustee”).
WITNESSETH:
WHEREAS, the Authority is a joint exercise of powers authority duly organized and existing under and pursuant to that certain Joint Exercise of Powers Agreement, dated October 9, 1991, by and among the City of Oxnard, California (the “City”), the Redevelopment Agency of the City of Oxnard, and the Housing Authority of the City of Oxnard, and under the provisions of Articles 1 through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “Act”), and the Authority is authorized pursuant to Article 4 of the Act (the “Bond Law”) to incur indebtedness for the purpose of financing and refinancing capital projects of the City;
WHEREAS, the Authority issued its $19,505,000 City of Oxnard Public Financing Authority Local Obligation Revenue Bonds (2012 Special District Bond Refinancings), Series A Senior Lien Bonds (the “Series 2012A Bonds”), and its $9,060,000 City of Oxnard Financing Authority Local Obligation Revenue Bonds (2012 Special District Bond Refinancings), Series B Subordinate Lien Bonds (the “Series 2012B Bonds”, and together with the Series 2012A Bonds, the “Series 2012 Bonds”, for the purpose of acquiring the (i) the $11,835,000 City of Oxnard Assessment District No. 2001-1 (Rice Avenue/Highway 101 Interchange) Limited Obligation Improvement Refunding Bonds, Series 2012 (the “AD Bonds”), (ii) the $8,750,000 Community Facilities District No. 1 (Westport at Mandalay Bay) of the City of Oxnard 2012 Special Tax Refunding Bonds (the “CFD No. 1 Bonds”), and (iii) the $7,980,000 City of Oxnard Community Facilities District No. 2000-3 (Oxnard Boulevard/Highway 101 Interchange) Special Tax Refunding Bonds, Series 2012 (the “CFD No. 2000-3 Bonds” and, together with the AD Bonds and the CFD No. 1 Bonds, the “Acquired Obligations”) issued to refund certain Assessment District, CFD No. 1, and CFD No. 2000-3 bond issues;
WHEREAS, the Authority has determined to issue its refunding bonds for the purposes of causing the early redemption of the Series 2012 Bonds and achieving debt service savings which will be secured the Acquired Obligations and designated as 2022 Local Obligation Revenue Refunding Bonds (Special District Bonds), in the aggregate principal amount of $______ (the “Bonds”) all pursuant to and secured by this Indenture in the manner provided herein; WHEREAS, in order to provide for the authentication and delivery of the Bonds, to establish and declare the terms and conditions upon which the Bonds are to be issued and to secure the payment of the principal thereof and interest thereon, the Authority has authorized the execution and delivery of this Indenture; and
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2 WHEREAS, all acts and proceedings required by law necessary to make the Bonds, when executed by the Authority, authenticated and delivered by the Trustee, and duly issued, the valid, binding, and legal special obligations of the Authority, and to constitute this Indenture a valid and binding agreement for the uses and purposes herein set forth in accordance with its terms, have been done and taken, and the execution and delivery of this Indenture have been in all respects duly authorized.
NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto hereby grant and agree as follows:
GRANTING CLAUSES
The Authority, in consideration of the premises and the acceptance by the Trustee of the trusts hereby created and of the purchase and acceptance of the Bonds by the registered owners thereof, and for other good and valuable consideration, the receipt of which is hereby acknowledged, in order to secure the payment of the principal of, premium, if any, and interest on the Bonds according to their tenor and effect and to secure the performance and observance by the Authority of all of the covenants expressed or implied herein and in the Bonds, does hereby grant, bargain, sell, convey, mortgage, assign, and pledge the following to Computershare Trust Company, N.A., as Trustee, and its successors in trust and assigns forever, for the securing of the performance of the obligations of the Authority hereinafter set forth:
GRANTING CLAUSE FIRST
All right, title, and interest of the Authority in and to the Revenues and the Acquired Obligations, including all extensions and renewals of its terms, if any, including, but without limiting the generality of the foregoing, the present and continuing right to make claim for, collect, receive, and receipt for any income, revenues, issues, profits, insurance proceeds, and other sums of money payable to or receivable by the Authority under the Acquired Obligations or any other document delivered pursuant to the terms of the Acquired Obligations, whether payable pursuant to the Acquired Obligations or otherwise, to bring actions and proceedings under the Acquired Obligations or for the enforcement thereof, and to do any and all things which the Authority is or may become entitled to do under the Acquired Obligations, including all proceeds of the foregoing and any investment income thereon;
GRANTING CLAUSE SECOND
All moneys, securities, investments, and funds from time to time held by the Trustee under this Indenture, including all Revenues, moneys, and securities held by the Trustee in all funds and accounts under this Indenture (except the Rebate Fund and the Expense Fund), and all other rights and property of every name and nature from time to time hereafter by delivery or by writing of any kind, tangible or intangible, assigned, pledged, or transferred as and for additional security hereunder to the Trustee by the Authority or the City, or by anyone in either’s behalf, or with its written consent, and to hold and apply the same, subject to the terms hereof, including all proceeds of the foregoing and all investment income thereon;
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3 TO HAVE AND TO HOLD all and singular the trust estate above granted (the “Trust Estate”), whether now owned or hereafter acquired, unto the Trustee and its respective successors in trust and assigns forever;
IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the equal and proportionate benefit, security, and protection of all present and future registered owners of the Bonds executed and delivered under and secured by this Indenture without privilege, priority, or distinction as to the lien or otherwise of any of the Bonds over any of the other Bonds; PROVIDED, HOWEVER, that if the Authority, or its respective successors or assigns, shall well and truly pay, or cause to be paid, the principal of, premium, if any, and interest on the Bonds due or to become due thereon, on the dates and in the manner mentioned in the Bonds according to the true intent and meaning thereof, and shall cause the payments to be made as required under Article V hereof, and shall pay, or shall provide, as permitted hereby, for the payment thereof by depositing with the Trustee the entire amount due or to become due thereon, and shall well and truly keep, perform, and observe all the covenants and conditions pursuant to the terms of this Indenture to be kept, performed, and observed by them, and shall pay or cause to be paid to the Trustee all sums of money due or to become due in accordance with the terms and provisions hereof, then upon such final payment under this Indenture, the rights hereby granted shall cease, determine, and be void; otherwise this Indenture to be and remain in full force and effect;
NOW, THEREFORE, THIS INDENTURE FURTHER WITNESSETH, that in order to secure the payment of the principal of, premium, if any, and the interest on all Bonds at any time issued and outstanding under this Indenture, according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the Bonds are to be issued and received, and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Bonds by the Owners thereof, and for other valuable considerations, the receipt whereof is hereby acknowledged, the Authority does hereby covenant and agree with the Trustee, for the benefit of the respective Owners from time to time of the Bonds, as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION; EQUAL SECURITY
SECTION 1.01Definitions. Unless the context otherwise requires, the terms defined in this Section 1.01 shall, for all purposes of this Indenture and of any Supplemental Indenture and of any certificate, opinion, or other document herein mentioned, have the meanings herein specified, to be equally applicable to both the singular and plural forms of any of the terms herein defined. “Acquired Obligations” means, collectively, the AD Bonds, the CFD No. 1 Bonds, and the CFD No. 2000-3 Bonds.
“Act” means Articles 1 through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California. 125
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4 “AD Bonds” means the City of Oxnard Assessment District No. 2001-1 (Rice Avenue/Highway 101 Interchange) Limited Obligation Improvement Refunding Bonds, Series 2012, dated as of the date of their delivery to the Authority as the initial purchaser thereof and issued in the aggregate principal amount of $11,835,000 by the City under and pursuant to the Refunding Act.
“AD Bonds Fiscal Agent Agreement” means that certain Fiscal Agent Agreement, dated as of August 1, 2012, by and between the City and Computershare Trust Company, N.A., as successor in interest to Wells Fargo Bank, National Association, as fiscal agent, establishing the terms and conditions pertaining to the issuance and administration of the AD Bonds. “Administrative Costs” means the annual costs of administering the Bonds, including, without limitation, the annual fees and expenses pertaining to the servicing of the Bonds and the provision of continuing disclosure pertaining to the Bonds or the Authority as required by Rule 15c2-12 of the Securities and Exchange Commission and any applicable continuing disclosure agreement pertaining to the Bonds. Such fees and expenses shall include, but not be limited to, any or all of the following: the fees and expenses of the Trustee (including any fees and expenses of its counsel) and the expenses of the Authority in carrying out its duties hereunder, which expenses include, but are not limited to, calculating the rebate obligation, if any, for the Bonds, undertaking any annual audits of the Bonds, and undertaking any annual or event continuing disclosure requirement. In addition to the costs of consultants and attorneys incurred in undertaking such duties, the expenses of the Authority shall also include an allocable share of the salaries of staff of the Authority or the City directly related thereto and a proportionate amount of general administrative overhead related thereto, any rebate obligation due and owing the United States government, and all other costs and expenses of the Authority or the Trustee incurred in connection with the discharge of their respective duties hereunder and, in the case of the Authority, in any way related to the administration of the Authority. Administrative Costs also includes any Unfunded Special District Administrative Expenses.
“AD Prepayment Account” means the Prepayment Account of the Redemption Fund established by the Fiscal Agent pursuant to the provisions of the AD Bonds Fiscal Agent Agreement.
“Agreement” means that certain Joint Exercise of Powers Agreement, dated as of October 9, 1991, by and among the City, the Redevelopment Agency of the City of Oxnard, and the Housing Authority of the City of Oxnard, as duly amended and supplemented from time to time. “Assessment District” means City of Oxnard Assessment District No. 2001-1 (Rice Avenue/Highway 101 Interchange).
“Authority” means the City of Oxnard Financing Authority, a joint powers authority organized and existing under the Agreement and under and by virtue of the laws of the State of California.
“Authorized Denomination” means the amount of $5,000 or any integral multiple thereof. “Authorized Representative” means: (a) with respect to the Authority, its Chairman, Vice Chairman, Controller, Assistant Controller, Executive Director, or Secretary, or any other Person 126
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5 designated as an Authorized Representative of the Authority by a Written Certificate of the Authority signed by its Chairman, Executive Director, or Controller and filed with the City and the Trustee; (b) with respect to the City, CFD No. 1, and CFD No. 2000-3, the City Manager, the Assistant City Manager, the Chief Financial Officer, the Financial Services Manager, or any other Person designated as an Authorized Representative of the City, CFD No. 1, or CFD No. 2000-3 by a Written Certificate signed on behalf of the City, CFD No. 1, or CFD No. 2000-3 by the City Manager, the Assistant City Manager, the Chief Financial Officer, or the Financial Services Manager and filed with the Authority and the Trustee; (c) with respect to the Trustee, the Senior Vice President, any Vice President, any Assistant Vice President, or any Trust Officer of the Trustee, and when used with reference to any act or document also means any other Person authorized to perform such act or sign any document by or pursuant to a resolution of the Board of Directors of the Trustee or the by-laws of the Trustee. “Available Amount” means an amount calculated by adding, as of the date of such calculation, (i) the amount on deposit in the Reserve Fund, and (ii) the amount on deposit in the Residual Account, less (a) the CFD No. 1 Residual Amount, (b) the CFD No. 2000-3 Residual Amount, and (c) any amounts determined by the Authority, in consultation with the City, to be needed to pay for debt service on the Bonds on September 2, 2032, or to be used for the payment of rebate or other expenses).
“Average Annual Debt Service” means the average annual debt service on the Bonds, based upon a Bond Year during the term of such Bonds.
“Bond Counsel” means Best Best & Krieger LLP or any law firm that is a firm of nationally recognized attorneys experienced in the issuance of obligations the interest on which is excluded from gross income for purposes of Section 103 of the Code, which firm is selected by the Authority in connection with the issuance of the Bonds.
“Bond Law” means the Marks-Roos Local Bond Pooling Act of 1985, constituting Article 4 of the Act (commencing with Section 6584), as amended from time to time. “Bond Year” means, with respect to the Bonds or the Acquired Obligations, the period beginning on the Closing Date and ending on September 2, 2022, and each successive 12-month period thereafter until there are no longer any Bonds Outstanding. “Bonds” means, the $______________ original principal amount of City of Oxnard Financing Authority 2022 Local Obligation Revenue Refunding Bonds (Special District Bonds). “Business Day” means a day that is not a Saturday, Sunday, or legal holiday on which banking institutions in the State of California, or in any state in which the Office of the Trustee is located, are closed, or a day on which the New York Stock Exchange is authorized or obligated by law or executive order to be closed.
“Cash Flow Certificate” means a certificate prepared by an Independent Special District Administrator which, as to a redemption of Bonds pursuant to Section 4.01 hereof, (i) directs the redemption of Bonds among maturities of the Bonds or of Bonds among maturities of the Bonds, as applicable, as necessary, after giving effect to such redemption, so as to maintain as close as practicable the level of Revenue coverage that existed for the Bonds as of the Date of Delivery, 127
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6 and (ii) certifies that after such redemption the Revenues scheduled to be received from the Acquired Obligations will be sufficient in time and amount (together with funds then held under this Indenture representing payments made pursuant to the Acquired Obligations and available to pay debt service on the Bonds, but excluding amounts, if any, on deposit in the Reserve Fund) to make all remaining scheduled payments of principal of and interest on the Outstanding Bonds. “CFD No. 1” means Community Facilities District No. 1 (Westport at Mandalay Bay) of the City of Oxnard.
“CFD No. 1 Bonds” means the Community Facilities District No. 1 (Westport at Mandalay Bay) of the City of Oxnard 2012 Special Tax Refunding Bonds, dated as of the date of their delivery to the Authority as the initial purchaser thereof and issued in the aggregate principal amount of $8,750,000 by CFD No. 1 under and pursuant to the Mello-Roos Act. “CFD No. 1 Bonds Fiscal Agent Agreement” means that certain Fiscal Agent Agreement dated as of August 1, 2012, by and between CFD No. 1 and Computershare Trust Company, N.A., as successor in interest to Wells Fargo Bank, National Association, as fiscal agent, establishing the terms and conditions pertaining to the issuance and administration of the CFD No. 1 Bonds. “CFD No. 1 Prepayment Account” means the Prepayment Account of the Bond Service Fund established by the Fiscal Agent pursuant to the provisions of the CFD No. 1 Bonds Fiscal Agent Agreement.
“CFD No. 1 Residual Amount” means the amount of [$714,798.57], which is the approximate aggregate amount on deposit in the Reserve Fund allocable to the CFD No. 1 Bonds. “CFD No. 2000-3” means City of Oxnard Community Facilities District No. 2000-3 (Oxnard Boulevard/Highway 101 Interchange).
“CFD No. 2000-3 Bonds” means the City of Oxnard Community Facilities District No. 2000-3 (Oxnard Boulevard/Highway 101 Interchange) Special Tax Refunding Bonds, Series 2012, dated as of the date of their delivery to the Authority as the initial purchaser thereof and issued in the aggregate principal amount of $7,980,000 by CFD No. 2000-3 under and pursuant to the Mello- Roos Act.
“CFD No. 2000-3 Bonds Fiscal Agent Agreement” means that certain Fiscal Agent Agreement dated as of August 1, 2012, by and between CFD No. 2000-3 and Computershare Trust Company, N.A., as successor in interest to Wells Fargo Bank, National Association, as fiscal agent, establishing the terms and conditions pertaining to the issuance and administration of the CFD No. 2000-3 Bonds.
“CFD No. 2000-3 Prepayment Account” means the Prepayment Account of the Bond Service Fund established by the Fiscal Agent pursuant to the provisions of the CFD No. 2000-3 Bonds Fiscal Agent Agreement.
“CFD No. 2000-3 Residual Amount” means the amount of [$651,891.15], which is the approximate aggregate amount on deposit in the Reserve Fund allocable to the CFD No. 2000-3 Bonds.
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7 “City” means the City of Oxnard, California.
“Closing Date” means the date on which the Bonds are delivered to the Original Purchaser, being the Date of Delivery or, as to the Acquired Obligations, the date such Acquired Obligations are delivered to the Authority.
“Code” means the Internal Revenue Code of 1986, as amended, and any regulations, rulings, judicial decisions, and notices, announcements, and other releases of the United States Treasury Department or Internal Revenue Service interpreting and construing it. “Costs of Issuance” means all expenses incurred in connection with the authorization, issuance, sale, and delivery of the Bonds, the acquisition of the Acquired Obligations, and the refunding of the improvement bonds and special tax bonds refunded through the sale and delivery of the Acquired Obligations, including, but not limited to, compensation, fees, and expenses of the City, CFD No. 1, CFD No. 2000-3, the Authority, the Trustee, and their respective counsel, compensation to any financial consultants, certified public accountants, market economists, or the Original Purchaser, other legal fees and expenses, filing and recording fees and costs, costs of preparation and reproduction of documents, and costs of printing. “Date of Delivery” means the date the Bonds are delivered to the Original Purchaser thereof.
“Depository” or “Securities Depositories” means The Depository Trust Company, 55 Water Street, 22nd Floor, New York, New York 10041-0099, Attn. Call Notification Department, Facsimile transmission: (212) 855-7232, or, in accordance with the then current guidelines of the Securities and Exchange Commission, such other depositories, or no such depositories, as the Authority may indicate in a certificate of the Authority to the Trustee. “Event of Bankruptcy” means, with respect to any Person, the filing of a petition in bankruptcy or the commencement of a proceeding under the United States Bankruptcy Code or any other applicable law concerning insolvency, reorganization or bankruptcy by or against such Person as debtor, other than any involuntary proceeding which has been finally dismissed without entry of an order for relief or similar order as to which all appeal periods have expired. “Event of Default” means any of the events specified in Section 7.01 herein. “Expense Fund” means the fund by that name established with the Trustee pursuant to Section 3.04.
“Extraordinary Redemption Proceeds” means the proceeds of the extraordinary redemption, in whole or in part, of (a) the principal of, premium (if any) on, and interest on the AD Bonds with funds attributable to the prepayment of any reassessment lien securing such AD Bonds, (b) the principal of, premium (if any) on, and interest on the CFD No. 1 Bonds with funds attributable to the prepayment of any special tax lien securing such CFD No. 1 Bonds, or (c) the principal of, premium (if any) on, and interest on the CFD No. 2000-3 Bonds with funds attributable to the prepayment of any special tax lien securing such CFD No. 2000-3 Bonds. 129
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8 “Federal Securities” means any of the following which are non-callable and which at the time of investment are legal investments under the laws of the State of California for the moneys proposed to be invested therein:
(a) direct general obligations of (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America), or obligations the payment of principal of and interest on which are directly or indirectly unconditionally guaranteed by, the United States of America; and (b) direct obligations of any department, agency, or instrumentality of the United States of America the timely payment of principal of and interest on which are fully guaranteed by the United States of America.
“Fiscal Year” means the period beginning on July 1 of each year and ending on the next succeeding June 30, or any other 12-month period hereafter selected and designated as the official fiscal year period of the Authority and certified to the Trustee in writing by an Authorized Representative of the Authority.
“Indenture” means this Indenture of Trust, dated as of August 1, 2012, by and between the Authority and the Trustee, as originally executed or as it may from time to time be supplemented, modified or amended by any Supplemental Indenture.
“Independent Certified Public Accountant” means a nationally recognized certified public accountant or nationally recognized firm of certified public accountants appointed by the Authority, and who, or each of whom: (a) is judged by the Authority to have extensive experience with respect to the preparation of financial statements; (b) is in fact independent and not under the domination of the Authority, the City, CFD No. 1, or CFD No. 2000-3; (c) does not have any substantial interest, direct or indirect, with the Authority, the City, CFD No. 1, or CFD No. 2000- 3; and (d) is not connected with the Authority, the City, CFD No. 1, or CFD No. 2000¬3 as an officer or employee thereof, but who may be regularly retained by either the Authority, the City, CFD No. 1, or CFD No. 2000-3 to make reports to such client. “Independent Special District Administrator” means a consultant or firm of consultants appointed by the Authority, and who, or each of whom: (a) is judged by the Authority to have experience (i) advising public agencies as a financial consultant or assessment engineer with respect to the issuance of bonds for assessment districts and community facilities districts or (ii) administering bonds issued for assessment districts and community facilities districts on behalf of the issuers of such bonds; (b) is in fact independent and not under the domination of the Authority; (c) does not have any substantial interest, direct or indirect, with the Authority, other than as Original Purchaser; and (d) is not connected with the Authority as an officer or employee of the Authority, but who may be regularly retained to make reports to the Authority. A consultant or firm engaged by the City to administer the AD Bonds, by CFD No. 1 to administer the CFD No. 1 Bonds, or by CFD No. 2000-3 to administer the CFD No. 2000-3 Bonds may be an Independent Special District Administrator.
“Information Services” means the Electronic Municipal Market Access System of the Municipal Securities Rulemaking Board; and, in accordance with then current guidelines of the 130
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9 Securities and Exchange Commission, such other addresses and/or such other services providing information with respect to called bonds as the Authority may designate in a Certificate of the Authority delivered to the Trustee.
“Interest Account” means the account of the Revenue Fund by that name established with the Trustee pursuant to Section 5.01(c).
“Interest Payment Date” means March 2 and September 2 in each year, commencing September 2, 2022, so long as any Bonds remain Outstanding. “Maximum Annual Debt Service” means, as of the date of any calculation, the largest Annual Debt Service for the Bonds, as the case may be, during the current or any future Bond Year.
“Mello-Roos Act” means the Mello-Roos Community Facilities Act of 1982, as amended, set forth in Chapter 2.5 of Division 2 of Title 5 of the Government Code of the State of California (commencing with Section 53311).
“Moody’s” means Moody’s Investors Service, Inc., and its successors and assigns. “Nominee” has the meaning given to such term in Section 2.09. “Office” means the designated corporate trust office or agency of the Trustee in Los Angeles, California, or such other offices as may be specified to the Authority by the Trustee in writing, and the designated corporate trust office of any successor trustee. “Original Purchaser” means
“Outstanding,” when used as of any particular time with reference to Bonds, means (subject to the provisions of Section 11.09) all Bonds theretofore or thereupon being authenticated and delivered by the Trustee under this Indenture except (a) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation; (b) Bonds with respect to which all liability of the Authority shall have been discharged in accordance with Section 10.02, including Bonds referred to under Section 11.10; and (c) Bonds for the transfer or exchange of or in lieu of or in substitution for which other Bonds shall have been authenticated and delivered by the Trustee pursuant to this Indenture.
“Owner” or “Bond Owner,” whenever used herein with respect to a Bond, means the Person in whose name the ownership of such Bond is registered on the Registration Books. “Participant” has the meaning given to such term in Section 2.09. “Permitted Investments” means any of the investments listed in Exhibit B attached hereto and incorporated herein by this reference, provided at the time of investment the investment is a legal investment under the laws of the State of California for the moneys proposed to be invested therein.
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10 “Person” means an individual, corporation, firm, association, partnership, limited liability company, limited liability partnership, trust, or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof “Prime Rate” has the meaning given to such term in Section 3.03(a)(4). “Principal Account” means the account of the Revenue Fund by that name established with the Trustee pursuant to Section 5.01(c).
“Prior Indenture” means the Indenture of Trust, dated as of August 1, 2012 (the “Prior Indenture”), by and between the Authority and the Prior Trustee. “Prior Trustee” means Computershare Trust Company, N.A., as successor in interest to Wells Fargo Bank, National Association, acting as trustee thereunder. “Program Fund” means the fund by that name established with the Trustee pursuant to Section 3.05.
“Rebatable Arbitrage” has the meaning given to such term in Section 6.08(b)(i). “Rebate Fund” means the account by that name established pursuant to Section 6.08(a). “Rebate Regulations” means the Proposed and Temporary Treasury Regulations issued under Section 148 of the Code.
“Record Date” means the fifteenth (15th) day (whether or not such day is a Business Day) of the calendar month preceding each Interest Payment Date. “Redemption Account” means the account of the Revenue Fund by that name established with the Trustee pursuant to Section 5.01(c).
“Refunding Act” means the Refunding Act of 1984 for 1915 Improvement Act Bonds, being Division 11.5 (commencing with Section 9500) of the Streets and Highways Code of the State of California.
“Registration Books” means the records maintained by the Trustee for the registration of ownership and registration of transfer of the Bonds pursuant to Section 2.05. “Related Documents” means, collectively, this Indenture, the AD Bonds Fiscal Agent Agreement, the CFD No. 1 Bonds Fiscal Agent Agreement, the CFD No. 2000-3 Bonds Fiscal Agent Agreement, the AD Bonds, the CFD No. 1 Bonds, and the CFD No. 2000-3 Bonds. “Reserve Fund” means the fund by that name established with the Trustee pursuant to Section 3.03(a).
“Reserve Requirement” means, as of any date of calculation, an amount equal to the least of (i) Maximum Annual Debt Service for the Bonds, (ii) one hundred twenty-five percent (125%) of Average Annual Debt Service for the Bonds, or (iii) ten percent (10%) of the original principal amount of the Bonds; provided, however, that the Reserve Requirement as of any such date of 132
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11 calculation shall not exceed the Reserve Requirement calculated as of the Closing Date. As of the Closing Date, the Reserve Requirement is $____________. “Residual Account” means the account of the Revenue Fund by that name established with the Trustee pursuant to Section 5.01(c).
“Revenue Fund” means the fund by that name established pursuant to Section 5.01. “Revenues” means (a) all amounts derived from or with respect to the Acquired Obligations, including, without limitation, the reassessments collected within the Assessment District, the special taxes collected within CFD No. 1, and the special taxes collected within CFD No. 2000-3, and (b) investment income with respect to any moneys held by the Trustee in the funds and accounts established hereunder, excepting therefrom the Rebate Fund. “S&P” means S&P Global, and its successors and assigns. “Special Record Date” means the date established by the Trustee pursuant to Section
2.02(b) as a record date for the payment of defaulted interest on the Bonds, if any. “State” means the State of California.
“Supplemental Indenture” means any indenture then in full force and effect which has been duly executed and delivered by the Authority and the Trustee amendatory hereof or supplemental hereto; but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder.
“Tax Certificate” means that certain certificate of the Authority by that name delivered on the Closing Date.
“Trustee” means Computershare Trust Company, N.A., a national banking association organized and existing under the laws of the United States of America, or its successor, as Trustee hereunder as provided in Section 8.01.
“Unfunded Special District Administrative Expenses” means those annual costs of the administration of the AD Bonds, the CFD No. 1 Bonds, the CFD No. 2000-3 Bonds, the AD Bonds Fiscal Agent Agreement, the CFD No. 1 Bonds Fiscal Agent Agreement, and the CFD No. 2000- 3 Bonds Fiscal Agent Agreement in excess of the proceeds of the annual assessments or special taxes for administrative costs and surcharges for collection costs and registration costs which may be collected for the Assessment District, CFD No. 1, or CFD No. 2000-3 on the tax roll by the City, CFD No. 1, or CFD No. 2000-3, as applicable.
“Verification Report” has the meaning given to such term in Section 10.05(a). “Written Certificate,” “Written Order.” or “Written Request” of the Authority, the City, CFD No. 1, or CFD No. 2000-3 means, respectively, a written certificate, written order, or written request signed in the name of the Authority by any Authorized Representative thereof, in the name of the City by any Authorized Representative thereof, in the name of CFD No. 1 by any Authorized Representative thereof, or in the name of CFD No. 2000-3 by any Authorized Representative 133
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12 thereof. Any such certificate, order or request may, but need not, be combined in a single instrument with any other instrument, opinion, or representation, and the two or more so combined shall be read and construed as a single instrument. If and to the extent required by Section 1.02, each such certificate, order or request shall include the statements provided for in Section 1.02. “Yield” shall have the meaning given to such term as set forth in the Tax Certificate for the Bonds.
SECTION 1.02Content of Certificates and Opinions. Every certificate or opinion provided for in this Indenture, except any certification of destruction pursuant to Section 11.05 hereof, with respect to compliance with any provision hereof shall include (a) a statement that the Person making or giving such certificate or opinion has read such provision and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the certificate or opinion is based; (c) a statement that, in the opinion of such Person, he has made or caused to be made such examination or investigation as is necessary to enable him to express an informed opinion with respect to the subject matter referred to in the instrument to which his signature is affixed; (d) a statement of the assumptions upon which such certificate or opinion is based, and that such assumptions are reasonable; and (e) a statement as to whether, in the opinion of such Person, such provision has been complied with.
Any such certificate or opinion made or given by an officer of the Authority, the City, CFD No. 1, or CFD No. 2000-3 may be based, insofar as it relates to legal or accounting matters, upon a certificate or opinion of or representation by counsel or an accountant, unless such officer knows, or in the exercise of reasonable care should have known, that the certificate, opinion, or representation with respect to the matters upon which such certificate or statement may be based, as aforesaid, is erroneous. Any such certificate or opinion made or given by counsel or an accountant may be based, insofar as it relates to factual matters (with respect to which information is in the possession of the Authority, the City, CFD No. 1, or CFD No. 2000-3, as the case may be) upon a certificate or opinion of or representation by an officer of the Authority, the City, CFD No. 1, or CFD No. 2000-3, unless such counsel or accountant knows, or in the exercise of reasonable care should have known, that the certificate or opinion or representation with respect to the matters upon which such Person’s certificate or opinion or representation may be based, as aforesaid, is erroneous. The same officer of the Authority, the City, CFD No. 1, or CFD No. 2000- 3, or the same counsel or accountant, as the case may be, need not certify to all of the matters required to be certified under any provision of this Indenture, but different officers, counsel or accountants may certify to different matters, respectively.
SECTION 1.03Interpretation.
(a) Unless the context otherwise indicates, words expressed in the singular shall include the plural and vice versa and the use of the neuter, masculine, or feminine gender is for convenience only and shall be deemed to include the neuter, masculine, or feminine gender, as appropriate.
(b) Headings of Articles and Sections herein and the table of contents hereof are solely for convenience of reference, do not constitute a part hereof, and shall not affect the meaning, construction, or effect hereof.
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13 (c) All references herein to “Articles,” “Sections,” and other subdivisions are to the corresponding Articles, Sections, or subdivisions of this Indenture; the words “herein,” “hereof,” “hereby,” “hereunder,” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section, or subdivision hereof.
SECTION 1.04Indenture Constitutes Contract. In consideration of the purchase and acceptance of any and all of the Bonds issued hereunder by those who shall hold the same from time to time, this Indenture shall be deemed to be and shall constitute a contract among the Authority, the Trustee, and the Owners of the Bonds. The pledge made in this Indenture and the provisions, covenants, and agreements herein set forth to be performed by or on behalf of the Authority shall be for the equal and proportionate benefit, protection, and security of all present and future Owners of the Bonds issued under and secured by this Indenture without privilege, priority, or distinction as to the lien or otherwise of any of the Bonds over any other Bonds.
ARTICLE II
THE BONDS
SECTION 2.01Authorization of Bonds. The Authority hereby authorizes the issuance of two (2) series of Bonds hereunder and under the Bond Law, which shall constitute special obligations of the Authority, for the purpose of providing moneys to finance the acquisition by the Authority of the Acquired Obligations. Such Bonds are hereby designated the 2022 City of Oxnard Financing Authority Local Obligation Revenue Refunding Bonds (Special District Bonds). The maximum aggregate principal amount of Bonds authorized to be issued and Outstanding under this Indenture shall equal $__________. This Indenture constitutes a continuing agreement with the Owners from time to time of the Bonds to secure the full payment of the principal of and interest on all such Bonds, subject to the covenants, provisions, and conditions herein contained.
SECTION 2.02Terms of the Bonds.
(a) The Bonds shall be issued in fully registered form without coupons in any Authorized Denomination. The Bonds shall be dated as of the Date of Delivery, shall mature (subject to prior redemption, as herein provided) in the principal amounts maturing or payable and bear interest as follows:
Maturity Date
(September 2)
Principal
Amount
Interest
Rate
2023
2024
2025
2026
2030
2033 (maturity)
(b) Interest on the Bonds shall be payable from the Interest Payment Date next preceding the date of authentication thereof unless (i) a Bond is authenticated ‘on or before an Interest Payment Date and after the close of business on the preceding Record Date, in which event 135
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14 it shall bear interest from such Interest Payment Date, (ii) a Bond is authenticated on or before the first Record Date, in which event interest thereon shall be payable from the Date of Delivery, or (iii) interest on any Bond is in default as of the date of authentication thereof, in which event interest thereon shall be payable from the date to which interest has been paid in full, payable on each interest Payment Date. Interest with respect to the Bonds shall be calculated on the basis of 360 days per year, comprised of twelve 30-day months. Interest shall be paid on each Interest Payment Date to the Persons in whose names the ownership of the Bonds is registered on the Registration Books at the close of business on the immediately preceding Record Date, except as provided below. Interest on any Bond which is not punctually paid or duly provided for on any Interest Payment Date shall be payable to the Person in whose name the ownership of such Bond is registered on the Registration Books at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice of which shall be given to such Owner not less than ten (10) calendar days prior to such Special Record Date. Interest shall be paid by check of the Trustee mailed by first class mail, postage prepaid, on each Interest Payment Date to the Bond Owners at their respective addresses shown on the Registration Books as of the close of business on the preceding Record Date; or by wire transfer made on such Interest Payment Date to any Owner of $1,000,000 or more in aggregate principal amount of Bonds who shall have requested such transfer pursuant to written notice filed with the Trustee on or before the preceding Record Date.
(c) The principal of the Bonds shall be payable in lawful money of the United States of America upon presentation and surrender thereof at the Office of the Trustee. Payment of principal on any Bond shall be made only upon presentation and surrender of such Bond at the Office of the Trustee.
(d) The Bonds shall be subject to redemption as provided in Article IV.
SECTION 2.03Transfer of Bonds. Any Bond may, in accordance with its terms, be transferred upon the Registration Books by the Person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a written instrument of transfer, duly executed in a form approved by the Trustee. The Trustee shall not be obligated to make any transfer of Bonds during the period selected by the Trustee for the selection of Bonds for redemption, or with respect to any Bonds selected for redemption.
Whenever any Bond or Bonds shall be surrendered for transfer, the Authority shall execute and the Trustee shall authenticate and shall deliver a new Bond or Bonds for a like aggregate principal amount in an Authorized Denomination. The Trustee shall require the Bond Owner requesting such transfer to pay any tax or other governmental charge required to be paid with respect to such transfer.
SECTION 2.04Exchange of Bonds. The Bonds may be exchanged at the Office of the Trustee for a Bond in a like aggregate principal amount of Bonds of Authorized Denominations and of the same maturity. The Authority may charge a reasonable sum for each new Bond issued upon any exchange (except in the case of any exchange of temporary Bonds for definitive Bonds and except in the case of the first exchange of any definitive Bond in the form in which it is originally issued) and the Trustee shall require the payment by the Bond Owner requesting such 136
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15 exchange of any tax or other governmental charge required to be paid with respect to such exchange. The Trustee shall not be obligated to make any exchange of Bonds during the period selected by the Trustee for the selection of Bonds for redemption, or with respect to any Bonds selected for redemption.
SECTION 2.05Registration Books. The Trustee will keep or cause to be kept, at the Office of the Trustee, sufficient records for the registration and transfer of ownership of the Bonds (the “Registration Books”), which Registration Books shall be open to inspection during regular business hours and upon reasonable prior notice by the Authority, the City, CFD No. 1, and CFD No. 2000-3 and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on such Registration Books, the ownership of the Bonds as hereinbefore provided.
SECTION 2.06Form and Execution of Bonds. The Bonds shall be in substantially the form set forth in Exhibit A hereto. The Bonds shall be executed in the name and on behalf of the Authority with the facsimile signature of its Chair (or any duly authorized deputy to the Chair) attested by the manual or facsimile signature of its Secretary. The Bonds shall then be delivered to the Trustee for authentication by it. In case any of the officers who shall have signed or attested any of the Bonds shall cease to be such officer or officers of the Authority before the Bonds so signed or attested shall have been authenticated or delivered by the Trustee, or issued by the Authority, such Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as binding upon the Authority as though those who signed and attested the same had continued to be such officers of the Authority, and also any Bonds may be signed and attested on behalf of the Authority by such Persons as at the actual date of execution of such Bonds shall be the proper officers of the Authority although at the nominal date of such Bonds any such Person shall not have been such officer of the Authority.
Only such of the Bonds as shall bear thereon a certificate of authentication substantially in the forms set forth in Exhibit A hereto, manually executed by the Trustee, shall be valid or obligatory for any purpose or entitled to the benefits of this Indenture, and such certificate of or on behalf of the Trustee shall be conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and delivered hereunder and are entitled to the benefits of this Indenture.
SECTION 2.07Temporary Bonds. The Bonds may be issued in temporary form exchangeable for definitive Bonds when ready for delivery. Any temporary Bonds may be printed, lithographed, or typewritten, shall be of such Authorized Denominations as may be determined by the Authority, shall be in fully registered form without coupons and may contain such reference to any of the provisions of this Indenture as may be appropriate. Every temporary Bond shall be executed by the Authority and authenticated by the Trustee upon the same conditions and in substantially the same manner as the definitive Bonds. If the Authority issues temporary Bonds it will execute and deliver definitive Bonds as promptly thereafter as practicable, and thereupon the temporary Bonds may be surrendered, for cancellation, at the Office of the Trustee and the Trustee shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds in Authorized Denominations. Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this Indenture as definitive Bonds authenticated and delivered hereunder.
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16 SECTION 2.08Bonds Mutilated, Lost, Destroyed, or Stolen. If any Bond shall become mutilated, the Authority, at the expense of the Owner of said Bond, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be canceled by it. If any Bond shall be lost, destroyed, or stolen, evidence of such loss, destruction, or theft may be submitted to the Authority and the Trustee and, if such evidence be satisfactory to them and indemnity satisfactory to them shall be given, the Authority, at the expense of the Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor in lieu of and in replacement for the Bond so lost, destroyed, or stolen (or if any such Bond shall have matured, instead of issuing a replacement Bond, the Trustee may pay the same without surrender thereof). The Authority may require payment by the Owner of a sum not exceeding the actual cost of preparing each replacement Bond issued under this Section and of the expenses which may be incurred by the Authority and the Trustee. Any Bond issued under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed, or stolen shall constitute an original additional contractual obligation on the part of the Authority whether or not the Bond so alleged to be lost, destroyed, or stolen be at any time enforceable by anyone, and shall be entitled to the benefits of this Indenture with all other Bonds secured by this Indenture.
SECTION 2.09Book-Entry. The Bonds shall be initially issued in the form of a single, fully registered Bond for each maturity (which may be typewritten). Upon initial issuance, the ownership of such Bonds shall be registered in the name of the Nominee identified below as nominee of the Depository. Except as hereinafter provided, all of the Outstanding Bonds shall be registered in the name of the nominee of the Depository, which may be the Depository, as determined from time to time pursuant to this Section (the “Nominee”). The initial Nominee shall be Cede & Co., as Nominee of the Depository.
With respect to the Bonds registered in the name of the Nominee, neither the Authority nor the Trustee shall have any responsibility or obligation to any broker-dealers, banks, and other financial institutions from time to time for which the Depository holds Bonds as securities depository (the “Participant”) or to any person on behalf of which such a Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, neither the Authority nor the Trustee shall have any responsibility or obligation (unless the Authority is at such time the Depository) with respect to (i) the accuracy of the records of the Depository, the Nominee, or any Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Participant or any other person, other than an Owner of a Bond as shown in the Registration Books, of any notice with respect to the Bonds, including any notice of redemption, (iii) the selection by the Depository and its Participants of the beneficial interests in the Bonds to be redeemed in the event the Authority redeems the Bonds in part, or (iv) the payment to any Participant or any other person, other than an Owner of a Bond as shown in the Registration Books, of any amount with respect to principal of or interest on the Bonds. The Authority and the Trustee may treat and consider the person in whose name each Bond is registered as the holder and absolute Owner of such Bond for the purpose of payment of principal and interest with respect to such Bond for the purpose of giving notices of redemption if applicable, and other matters with respect to such Bond for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever.
The Authority shall pay all principal of and interest on the Bonds only to or upon the order of the respective Owner of a Bond, as shown in the Registration Books, or his respective attorney duly 138
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17 authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the Authority’s obligations with respect to payment of principal of and interest on the Bonds to the extent of the sum or sums so paid. No person other than an Owner of a Bond, as shown in the Registration Books, shall receive a Bond evidencing the obligation of the Authority to make payments of principal and interest pursuant to this Indenture. Upon delivery by the Depository to the Owners of the Bond, and the Authority of written notice to the effect that the Depository has determined to substitute a new nominee in place of the Nominee, and subject to the provisions herein with respect to Record Dates, the word Nominee in this Indenture shall refer to such nominee of the Depository.
In the event (i) the Depository determines not to continue to act as securities depository for the Bonds or (ii) the Depository shall no longer so act and gives notice to the Authority of such determination, then the Authority will discontinue the book-entry system with the Depository. If the Authority determines to replace the Depository with another qualified securities depository, the Authority shall prepare or direct the preparation of a new, single, separate, fully registered Bond, per maturity, registered in the name of such successor or substitute qualified securities depository or its nominee. If the Authority fails to identify another qualified securities depository to replace the Depository, then the Bonds shall no longer be restricted to being registered in the register in the name of the Nominee, but shall be registered in whatever name or names owners of the Bonds transferring or exchanging Bonds shall designate, in accordance with the provisions of Sections 2.03 and 2.04 and the Authority shall prepare and deliver Bonds to the Owners thereof for such purpose.
In the event of a reduction in aggregate principal amount of Bonds Outstanding or an advance refunding of part of the Bonds outstanding, the Depository, in its discretion, (a) may request the Authority to prepare and issue a new Bond or (b) may make an appropriate notation on the Bond indicating the date and amounts of such reduction in principal, but in such event the Authority records maintained by the Trustee shall be conclusive as to what amounts are Outstanding on the Bond, except in the case of final maturity, in which case the Bond must be presented to the Trustee prior to payment.
Notwithstanding any other provision of this Indenture to the contrary, so long as any Bond is registered in the name of the Nominee, all payments of principal and interest with respect to such Bond and all notice with respect to such Bonds shall be made and given respectively, as instructed by the Depository and acceptable to the Authority.
ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS AND TRANSFERS FROM THE FISCAL AGENT; ACQUISITION OF ACQUIRED OBLIGATIONS
SECTION 3.01Issuance of the Bonds. At any time after the execution of this Indenture, the Authority may execute, and upon the Written Request of the Authority, the Trustee shall authenticate and deliver, Bonds in the aggregate principal amount of $_________.
SECTION 3.02Application of Proceeds of the Bonds and Transfers from the Fiscal Agent. 139
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18 The proceeds in the amount of $_____________ received on the Date of Delivery from the sale of the Bonds shall be delivered in trust with the Trustee, and the Trustee shall immediately deposit the proceeds as follows:
(1) $________________ shall be transferred to the Prior Trustee for the early redemption of the Series 2012 Bonds;
(2) $_________________, representing the Reserve Requirement, shall be deposited in the Reserve Fund;
(3) $____________ shall be deposited in the Residual Account of the Revenue Fund; and
(4) $____________ shall be deposited in the Expense Fund.
In addition, the Trustee shall deposit $_________ (representing a portion of the accrued interest on the CFD No. 1 Bonds) transferred to the Trustee pursuant to the CFD No. 1 Bonds Fiscal Agent Agreement and $______ (representing a portion of the accrued interest on the CFD No. 2000-3 Bonds) transferred to the Trustee pursuant to the CFD No. 2000-3 Bonds Fiscal Agent Agreement in the Interest Account of the Revenue Fund.
SECTION 3.03Reserve Fund. (a) Establishment of Reserve Fund. (1) The Trustee shall establish and maintain a separate reserve fund to be applied solely to the payment of debt service on the Bonds, designated as the “Reserve Fund.” The Trustee shall deposit the amount specified in Section 3.02(a) in the Reserve Fund. The Trustee shall administer the funds in the Reserve Fund as provided in this Section 3.03.
(2) If on any Interest Payment Date the amount in the Interest Account shall be less than the amount required for the interest payable with respect to the Bonds on such date, the Trustee shall withdraw from the Reserve Fund and deposit into the Interest Account the amount of such deficiency.
(3) If on any Interest Payment Date the amount in the Principal Account shall be less than the amount required for the principal payable with respect to the Bonds on such date, the Trustee shall withdraw from the Reserve Fund and deposit into the Principal Account the amount of such deficiency.
(4) If on September 3rd of any year the amount of cash on deposit in the Senior Reserve Fund exceeds the Reserve Requirement, the Trustee shall on such date transfer such excess from the cash then on deposit in the Reserve Fund to the Residual Account. (5) Not later than three (3) days following the date that the Bonds are no longer Outstanding and all Administrative Costs have been paid in full, then the Trustee shall transfer all monies in the Reserve Fund to the Residual Account. 140
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19 (b) Calculation of Available Amount. At or around June 1, 2031, the Trustee shall calculate the Available Amount and transmit such calculation to the City, it being understood that the City will reduce the Fiscal Year 2031-2032 assessment levy in the Assessment District in an amount equal to the Available Amount. Amounts equal in the aggregate to the Available Amount shall be withdrawn proportionately from the Reserve Fund to pay, on September 2, 2032, a portion of the debt service on the Bonds.
SECTION 3.04Expense Fund. The Trustee shall establish and maintain a separate fund to be known as the “Expense Fund.” The moneys deposited into the Expense Fund shall be utilized to pay the Costs of Issuance and Administrative Costs, as set forth in a Written Request of the Authority, the City, CFD No. 1, or CFD No. 2000-3 containing the respective amounts to be paid to the designated payees. The Trustee shall pay all such Costs of Issuance and Administrative Costs upon receipt of an invoice from any such payee which requests payment in an amount which is less than or equal to the amount set forth with respect to such payee in such requisition. On September 3 of each year, the Trustee shall transfer any funds then held in the Expense Fund to the Residual Account.
SECTION 3.05Program Fund.
The Trustee shall establish and maintain a separate fund to be known as the “Program Fund.” The Trustee shall receive the Acquired Obligations from the Prior Trustee and hold all of the Acquired Obligations therein for the benefit of the Authority and the Owners..
SECTION 3.06Closing Documents. Prior to or concurrent with the acquisition of either of the Acquired Obligations with amounts on deposit in the Program Fund, there shall have been filed with the Authority and the Trustee as to such Acquired Obligation all of the following documents, in each case in form and substance satisfactory to the Authority. (a) Original fully executed copies of all agreements and other instruments pursuant to which such Acquired Obligation is authorized, sold, and issued or incurred, including, without limitation, the applicable fiscal agent agreement; (b) The fully executed Acquired Obligation or other instrument evidencing such Acquired Obligation registered in the name of the Authority pursuant to this Indenture;
(c) A separate Written Certificate of the City, CFD No. 1, and CFD No. 2000- 3, as applicable, stating that all of the documents referred to in (a) and (b) above have been duly executed by the City, CFD No. 1, and CFD No. 2000-3, as applicable, and that the Persons executing such documents on their behalf have been duly authorized to do so; (d) Certified copies of all resolutions of the governing body of the City (on behalf of itself and as the legislative body of CFD No. 1 or CFD No. 2000-3, as applicable) approving and authorizing the issuance of the Acquired Obligation and the documents referred to in (a) and (b) above;
(e) An opinion of Bond Counsel which: (a) states that the Acquired Obligation is a valid and binding obligation of the City, CFD No. 1, or CFD No. 2000-3, as applicable, 141
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20 enforceable in accordance with its terms, subject to customary bankruptcy, equitable remedy and other exceptions, and (b) contains such other opinions and addresses such other matters as are commonly provided by Bond Counsel for tax-exempt bonds similar to the type of the Acquired Obligation and as may reasonably be required by the Authority or the Original Purchaser; and
(f) Such other opinions, documents, and other information as may be reasonably required by the Authority, Bond Counsel, or counsel to the Original Purchaser.
SECTION 3.07Validity of Bonds. The validity of the authorization and issuance of the Bonds is not dependent on and shall not be affected in any way by any proceedings taken by the Authority or the Trustee with respect to or in connection with the acquisition of the Acquired Obligations. The recital contained in the Bonds that the same are issued pursuant to the Constitution and laws of the State of California shall be conclusive evidence of their validity and of compliance with the provisions of law in their issuance.
ARTICLE IV
REDEMPTION OF BONDS
SECTION 4.01Redemption.
(a) Optional Redemption. The Bonds maturing on or before September 2, _____, are not subject to optional redemption prior to their respective stated maturities. The Bonds maturing on or after September 2, ___, may be redeemed at the option of the Authority prior to maturity on any date on or after September 2, ___, in whole or in part in any Authorized Denomination (by lot within any maturity), as directed by the Authority in a Written Order accompanied by and consistent with the applicable Cash Flow Certificate, from any source of funds (excluding amounts transferred to the Trustee by the Fiscal Agent from the AD Prepayment Account, the CFD No. 1 Prepayment Account, or the CFD No. 2000-3 Prepayment Account, as applicable) at the redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued interest to the date of redemption, without premium.
(b) Extraordinary Redemption. The Bonds or any portion of a Bond in any Authorized Denomination shall be subject to extraordinary redemption prior to maturity, in whole on any date, or in part on any Interest Payment Date, pro rata among maturities as directed by the Authority in a Written Order accompanied by and consistent with the applicable Cash Flow Certificate, from funds transferred to the Trustee by the Fiscal Agent from the AD Prepayment Account, the CFD No. 1 Prepayment Account, or the CFD No. 2000-3 Prepayment Account, as applicable, at the redemption price set forth below (expressed as a percentage of the principal amount of the Bonds to be redeemed), plus accrued interest to the date of redemption:
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21 Redemption Dates Redemption Price
March 2, ____, through March 2, _____ 103%
September 2, ___, and March 2, ___ 102
September 2, _____, and March 2, _____ 101
September 2, ___, thereafter 100
(c) Mandatory Sinking Fund Redemption. The Bonds maturing on September 2, __________, are subject to mandatory redemption in part on September 2 in the following years in the following amounts at a redemption price equal to the principal amount thereof together with accrued interest to the date fixed for redemption, without premium:
Mandatory Redemption Date
(September 2) Principal Amount
In the event of any optional or extraordinary redemption of Bonds maturing on September 2, __________, pursuant to Subsection (a) or (b) above, the schedule of mandatory sinking fund installments in Subsection (c) above shall be reduced in equal percentages, as nearly as practicable, provided that the reductions shall be made in multiples of $5,000. The Authority shall provide the Trustee with the amended sinking fund payments schedule calculated as set forth above in a Written Order accompanied by and consistent with the applicable Cash Flow Certificate. (d) Purchase in Lieu of Redemption. In lieu of depositing cash with the Trustee as and for payment of the redemption price of any Bonds pursuant to this Section 4.01, and after complying with the Cash Flow Certificate requirements set forth in Section 4.02 below, amounts on deposit in the Principal Account, the Interest Account, and the Redemption Account may be used and withdrawn by the Trustee at any time prior to the selection of Bonds for such redemption having taken place with respect to such amounts, upon a Written Order of the Authority for the purchase of such Bonds at public or private sale as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Account) as the Authority may, in its discretion, determine, but not in excess of the redemption price thereof plus accrued interest to the purchase date. All Bonds so purchased shall be delivered to the Trustee for cancellation.
SECTION 4.02Selection of Bonds for Redemption. Subject to Section 4.01, whenever provision is made in this Indenture for the redemption of less than all of the Bonds, the Trustee shall select the amounts and maturities of Bonds for redemption in accordance with the Written Order of the Authority to be provided to the Trustee not less than 45 days prior to the redemption date.
Each Written Order of the Authority provided in accordance with this Section 4.02 shall be accompanied by a Cash Flow Certificate.
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22 Whenever less than all the outstanding Bonds of any one maturity are to be redeemed on any one date, the Trustee will select the particular Bonds to be redeemed randomly by lot and in selecting the Bonds for redemption the Trustee will treat each Bond of a denomination of more than five thousand dollars ($5,000) as representing that number of Bonds of five thousand dollars ($5,000) denomination which is obtained by dividing the principal amount of such Bond by five thousand dollars ($5,000), and the portion of any Bond of a denomination of more than five thousand dollars ($5,000) to be redeemed shall be redeemed in an Authorized Denomination. The Trustee shall promptly notify the Authority in writing of the numbers of the Bonds so selected for redemption in whole or in part on such date.
SECTION 4.03Notice of Redemption.
(a) Contents of Notice. Notice of redemption shall be mailed by the Trustee promptly upon receipt of moneys to be applied to the redemption of Bonds, by first class mail, postage prepaid, to the respective Owners of any Bonds designated for redemption at their addresses appearing on the Registration Books, such notice to be mailed not more than sixty (60) nor less than thirty (30) calendar days prior to the redemption date. Each notice of redemption shall state the redemption date, the place or places of redemption, and the CUSIP numbers and the Bond numbers of the Bonds to be redeemed, and in the case of Bonds to be redeemed in part only, the respective Authorized Denominations of the principal amount thereof to be redeemed. Each such notice shall also state that on said date there will become due and payable on each of said Bonds the principal amount relating thereto or of said specified portion of the principal thereof in the case of a Bond to be redeemed in part only, plus premium and accrued interest, if any, and through which date such interest will accrue, and that from and after such date interest thereon shall cease to accrue, and shall require that such Bonds be then surrendered at the Office of the Trustee.
Neither the failure of any Bond Owner to receive any notice so mailed nor any defect therein shall affect the sufficiency of the proceedings for redemption of any Bonds or the cessation of accrual of interest thereon. A certificate of the Trustee that notice of redemption has been given as provided for in this Section 4.03(a) shall be conclusive as against all parties, and it shall not be open to any Owner to show that he or she failed to receive notice of such redemption. (b) Notice to Others. In addition to the notice given pursuant to Subsection (a) of this Section, the notice of redemption described in Subsection (a) shall be given on the same day by either first class mail, postage prepaid, or facsimile transmission to the Securities Depositories and to at least one of the Information Services. Neither the failure to give the notice described in this Subsection nor any defect therein shall in any manner affect the redemption of the Bonds; provided further, that failure to provide such notice to the Securities Depositories or the Information Services shall not affect the validity of proceedings for the redemption of any Bonds. (c) Given on Behalf of Authority. Notice of redemption of Bonds shall be given by the Trustee, at the expense of the Authority, for and on behalf of the Authority.
SECTION 4.04Partial Redemption of Bonds. Upon surrender of any Bonds redeemed in part only, the Authority shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Bond or Bonds of an Authorized Denominations equal in aggregate principal amount representing the unredeemed portion of the Bonds surrendered.
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23 SECTION 4.05Effect of Notice of Redemption. Notice having been given as aforesaid, and moneys for the redemption (including the interest to the applicable date of redemption), having been set aside in the Redemption Account or any of the accounts therein, the Bonds shall become due and payable on said date of redemption, and, upon presentation and surrender thereof at the Office of the Trustee, said Bonds shall be paid at the redemption price thereof, together with interest accrued and unpaid to said date of redemption and premium, if any.
If, on said date of redemption, moneys for the redemption of all the Bonds to be redeemed, together with interest to said date of redemption and premium, if any, shall be held by the Trustee so as to be available therefor on such date of redemption, and, if notice of redemption thereof shall have been given as aforesaid, then, from and after said date of redemption, interest represented by said Bonds shall cease to accrue and become payable. All moneys held by or on behalf of the Trustee for the redemption of Bonds shall be held in trust for the account of the Owners of the Bonds so to be redeemed.
When any Bonds (or portions thereof) have been duly called for redemption prior to maturity pursuant to the provisions of this Article IV or with respect to which irrevocable instructions to call such Bonds for redemption prior to maturity at the earliest redemption date have been given to the Trustee pursuant to the provisions of this Article IV and sufficient moneys shall be held irrevocably in trust for the payment of the redemption price of such Bonds (or portions thereof) as provided for in this Indenture, then such Bonds (or portions thereof) shall no longer be deemed Outstanding and shall be surrendered to the Trustee.
All Bonds paid at maturity or redeemed prior to maturity pursuant to the provisions of this Article IV shall be canceled upon surrender thereof and delivered to the Trustee.
ARTICLE V
REVENUES; FUNDS AND ACCOUNTS OF PRINCIPAL AND INTEREST
SECTION 5.01Pledge and Assignment; Revenue Fund.
(a) Subject only to the provisions of this Indenture permitting the application thereof for the purposes and on the terms and conditions set forth herein, the Acquired Obligations and all of the Revenues and any other amounts (including proceeds of the sale of the Bonds) held in any fund or account established pursuant to this Indenture (except the Rebate Fund and the Expense Fund) are hereby pledged by the Authority, to secure the payment of the principal of and interest on the Bonds in accordance with their terms and the provisions of this Indenture. Said pledge shall constitute a first lien on and security interest in such assets, and shall attach, be perfected and be valid and binding from and after delivery of the Bonds by the Trustee, upon the physical delivery thereof.
(b) The Authority hereby transfers in trust and assigns to the Trustee, for the benefit of the Owners from time to time of the Bonds, all of the Revenues and all of the right, title, and interest of the Authority in the Acquired Obligations, when and as issued or incurred. The Trustee shall be entitled to and shall collect and receive all of the Revenues, and any Revenues collected or received by the Authority shall be deemed to be held, and to have been collected or received, 145
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24 by the Authority and shall forthwith be paid by the Authority to the Trustee for deposit to the Revenue Fund. The Trustee also shall be entitled to and may take all steps, actions, and proceedings reasonably necessary in its judgment to enforce, either jointly with the Authority or separately, all of the rights of the Authority and all of the obligations of the City under and with respect to its Acquired Obligations.
(c) Upon receipt, all Revenues shall be promptly deposited by the Trustee thereof in a special fund designated as the “Revenue Fund” within which there shall be an Interest Account, Principal Account, Redemption Account, and a Residual Account, each of which the Trustee shall establish, maintain and hold in trust. All Revenues deposited with the Trustee shall be held, disbursed, allocated and applied by the Trustee only as provided in this Indenture.
SECTION 5.02Allocation of Revenues. As Revenues (other than Extraordinary Redemption Proceeds, which shall be deposited in the Redemption Account pursuant to Section
5.05) are received in each calendar year commencing in 2022, the Trustee shall transfer from the Revenue Fund and deposit into the following respective accounts (each of which the Trustee shall establish and maintain in trust separate and distinct from the other funds and accounts established hereunder) the following amounts on the following dates and in the following order of priority, the requirements of each such account (including the making up of any deficiencies in any such account resulting from a lack of Revenues sufficient to make any earlier required deposit) at the time of deposit to be satisfied before any transfer is made to any account subsequent in priority:
(a) On March 2 and September 2 of each year, the Trustee shall deposit in the Interest Account an amount which, together with the amounts then on deposit therein, is required to cause the aggregate amount on deposit in the Interest Account to equal the amount of interest coming due and payable on such date on the Bonds.
(b) On September 2 of each year, the Trustee shall deposit in the Principal Account an amount which, together with the amounts then on deposit therein, is required to cause the aggregate amount on deposit in the Principal Account to equal the amount of principal coming due and payable, on such date on the Outstanding Bonds.
(c) On March 2 and September 2 of each year, the Trustee shall deposit in the Reserve Fund an amount which, together with the amounts then on deposit therein, is required to cause the aggregate amount on deposit in the Reserve Fund to equal the Reserve Requirement. (d) On the next Business Day following each March 2 and September 2 deposit made pursuant to (a) through (c) above, the Trustee shall deposit in the Expense Fund such amount as may be requested in a Written Request of an Authorized Representative of the Authority for the payment of Administrative Costs.
(e) On the next Business Day following each March 2 and September 2 deposit made pursuant to (a) through (d) above, the Trustee shall deposit in the Rebate Fund all amounts which the Authority directs to be deposited therein pursuant to Section 6.08. (f) On the next Business Day following each March 2 and September 2 deposit made pursuant to (a) through (e) above, the Trustee shall deposit in the Residual Account of the Revenue Fund the amount then on deposit in the Revenue Fund.
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25 SECTION 5.03Application of Interest Account.
Subject to the provisions of this Indenture, all amounts in the Interest Account shall be used and withdrawn by the Trustee solely for the purpose of paying interest on the Bonds as the same shall become due and payable or, at the Written Request of the Authority filed with the Trustee, to apply to the payment of accrued interest on any Bonds purchased by the Authority in lieu of redemption pursuant to Section 4.01(c). Any amounts on deposit in the Interest Account or any subaccount thereof on any Interest Payment Date and not required to pay interest then due and payable on the Bonds shall be retained in such Interest Account.
SECTION 5.04Application of Principal Accounts.
Subject to the provisions of this Indenture, all amounts in the Principal Account shall be used and withdrawn by the Trustee solely to pay the principal of the Bonds upon the stated maturity thereof.
SECTION 5.05Application of Redemption Account. All Extraordinary Redemption Proceeds shall be deposited into the Redemption Account. Subject to the provisions of this Indenture, all amounts deposited in the Redemption Account shall be used and withdrawn by the Trustee solely for the purpose of redeeming Bonds in the manner and upon the terms and conditions specified in Section 4.01(b), at the next succeeding date of redemption for which notice has been given and at the principal amount thereof. Additionally, any amounts for the redemption of Bonds pursuant to Section 4.01(a) may be deposited into the Redemption Account in a manner instructed by the Authority in writing to the Trustee. At any time prior to selection of Bonds for redemption, the Trustee may apply amounts on deposit in the Redemption Account to the purchase of Bonds pursuant to the provisions of Section 4.01(d).
SECTION 5.06Application of Residual Account.
(a) Amounts in the Residual Account in excess of $__________ (which amount is equal to approximately 10% of the average annual debt service on the Bonds as of the Closing Date) may, at any time and at the written direction of the Authority, be (i) transferred to the Expense Fund if the amount therein is insufficient to pay Costs of Issuance or Administrative Costs, (ii) transferred to the Rebate Fund, or (iii) transferred to the Redemption Account. (b) Three (3) Business Days prior to each Interest Payment Date, the Trustee shall transfer all monies deposited in the Residual Account to the Revenue Fund to be applied in accordance with Section 5.02.
(c) Promptly following the date that the Bonds are no longer Outstanding, all funds on deposit in the Residual Account, including transfers from the Reserve Fund pursuant to Section
3.03 shall be remitted (i) in the amount of the CFD No. 1 Residual Amount to the City for refund to the property owners within CFD No. 1 as determined by an Authorized Officer of the City, (ii) in the amount of the CFD No. 2000-3 Residual Amount to the City for refund to the property owners within CFD No. 2000-3 as determined by an Authorized Officer of the City, and (iii) in the amount of the balance of the Residual Account to the City for refund to the property owners within the Assessment District in the manner set forth in Section 8885 of the California Streets and Highways Code.
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26 (d) Amounts in the Residual Account shall be invested in Permitted Investments the interest on which is excludable from gross income under Section 103 of the Code (other than bonds the interest on which is a tax preference item for purposes of computing the alternative minimum’ tax of individuals and corporations under the Code) or in Permitted Investments at a Yield not in excess of the Yield on the Bonds, unless, in the opinion of Bond Counsel, investment at a higher Yield will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds then Outstanding.
SECTION 5.07Investment of Moneys. Except as otherwise provided herein, all moneys in any of the funds or accounts established pursuant to this Indenture shall be invested by the Trustee solely in Permitted Investments, as directed in writing by the Authority two (2) Business Days prior to the making of such investment. Permitted Investments may be purchased at such prices as the Authority shall determine. All Permitted Investments shall be acquired subject to any restrictive instructions given to the Trustee pursuant to Section 6.07 and such additional limitations or requirements consistent with the foregoing as may be established by the Written Request of the Authority. Moneys in all funds and accounts shall be invested in Permitted Investments maturing not later than the date on which it is estimated that such moneys will be required for the purposes specified in this Indenture. Absent timely written direction from the Authority, the Trustee shall invest any funds held by it in Permitted Investments described in clause (15) of the definition thereof. Investment of cash on deposit in the Reserve Fund shall have an average weighted term to maturity not greater than five (5) years.
Unless otherwise provided in this Indenture, all interest, profits, and other income received from the investment of moneys in any fund or account established pursuant to this Indenture shall be deposited in the Revenue Fund, except that (a) earnings on the investment of amounts in the Residual Account of the Revenue Fund, the Reserve Fund (subject to Section 3.03(a) hereof) shall be deposited into the Residual Account of the Revenue Fund and (b) earnings on the investment of amounts in the Rebate Fund shall be retained therein. Notwithstanding anything to the contrary contained in this paragraph, an amount of interest received with respect to any Permitted Investments equal to the amount of accrued interest, if any, paid as part of the purchase price of such Permitted Investment shall be credited to the fund from which such accrued interest was paid.
Permitted Investments acquired as an investment of moneys in any fund established under this Indenture shall be credited to such fund. For the purpose of determining the amount in any fund, all Permitted Investments credited to such fund shall be valued at the lesser of cost or par value plus, prior to the first payment of interest following purchase, the amount of accrued interest, if any, paid as a part of the purchase price.
The Trustee may act as principal or agent in the making or disposing of any investment.
Upon the Written Request of the Authority, the Trustee shall sell or present for redemption, any Permitted Investments so purchased whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal, or disbursement from the fund to which such Permitted Investments is credited, and the Trustee shall not be liable or responsible for any loss resulting from any investment made or sold pursuant to this Section 5.07.
The Authority acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Authority the right to receive brokerage 148
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27 confirmations of security transactions as they occur, the Authority specifically waives receipt of such confirmations to the extent permitted by law. The Trustee will furnish the Authority periodic cash transactions statements which include details for all investment transactions made by the Trustee hereunder.
ARTICLE VI
PARTICULAR COVENANTS
SECTION 6.01Punctual Payment. The Authority shall punctually pay or cause to be paid the principal, premium, if any, and interest to become due in respect of all the Bonds, in strict conformity with the terms of the Bonds and of this Indenture, according to the true intent and meaning thereof, but only out of Revenues and other assets pledged for such payment as provided in this Indenture and received by the Authority or the Trustee.
SECTION 6.02Extension of Payment of Bonds. The Authority shall not directly or indirectly extend or assent to the extension of the maturity of any of the Bonds or the time of payment of any claims for interest by the purchaser of such Bonds or by any other arrangement.
Nothing in this Section shall be deemed to limit the right of the Authority to issue Bonds for the purpose of refunding any Outstanding Bonds, and such issuance shall not be deemed to constitute an extension of maturity of the Bonds.
SECTION 6.03Against Encumbrances. The Authority shall not create, or permit the creation of, any pledge, lien, charge, or other encumbrance upon the Revenues and other assets pledged or assigned under this Indenture while any of the Bonds are Outstanding, except the pledge and assignment created by this Indenture or any Supplemental Indenture. Subject to this limitation, the Authority expressly reserves the right to enter into one or more other indentures for any of its corporate purposes, including other programs under the Bond Law, and reserves the right to issue other obligations for such purposes.
SECTION 6.04Power to Issue Bonds and Make Pledge and Assignment. The Authority is duly authorized pursuant to law to issue the Bonds and to enter into this Indenture and to pledge and assign the Revenues, the Acquired Obligations, and other assets purported to be pledged and assigned, respectively, under this Indenture in the manner and to the extent provided in this Indenture. The Bonds and the provisions of this Indenture are and will be the legal, valid, and binding special obligations of the Authority in accordance with their terms, and the Authority shall at all times, to the extent permitted by law, defend, preserve, and protect said pledge and assignment of Revenues and other assets and all the rights of the Bond Owners under this Indenture against all claims and demands of all Persons whomsoever.
SECTION 6.05Accounting Records and Financial Statements. The Trustee shall at all times keep, or cause to be kept, proper books of record and account, prepared in accordance with generally accepted accounting principles, in which complete and accurate entries shall be made of all transactions relating to the Bond proceeds, the Revenues, the Acquired Obligations, and all funds and accounts established pursuant to this Indenture. Such books of record and account shall be available for inspection by the Authority, the City, CFD No. 1, and CFD No. 2000-3 during 149
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28 regular business hours and upon reasonable prior notice and under reasonable circumstances as agreed to by the Trustee.
SECTION 6.06Waiver of Laws. The Authority shall not at any time insist upon or plead in any manner whatsoever, or claim or take the benefit or advantage of, any stay or extension law now or at any time hereafter in force that may affect the covenants and agreements contained in this Indenture or in the Bonds, and all benefit or advantage of any such law or laws is hereby expressly waived by the Authority to the extent permitted by law.
SECTION 6.07[RESERVED].
SECTION 6.08Rebate Fund.
(a) Establishment of Rebate Fund. With respect to the Bonds the Trustee shall establish a special fund designated as the “Rebate Fund” (the “Rebate Fund”) and shall comply with the requirements of Subsection (b) below. All money at any time deposited in the Rebate Fund shall be held by the Trustee in trust, for payment to the United States Treasury. All amounts on deposit in the Rebate Fund shall be governed by this Section 6.08, and the Tax Certificate, unless the Authority obtains an opinion of Bond Counsel that the exclusion from gross income of interest on the Bonds will not be adversely affected for federal income tax purposes if such requirements are not satisfied.
(b) Rebate Fund. The following requirements shall be satisfied with respect to a Rebate Fund:
(i) Annual Computation. Within 55 calendar days of the end of each fifth Bond Year with respect to the Bonds and of the final maturity or redemption of the Bonds, the Authority shall calculate or cause to be calculated the amount of rebatable arbitrage in accordance with Section 148(f)(2) of the Code and Section 1.148-2 of the Rebate Regulations (taking into account any applicable exceptions with respect to the computation of the rebatable arbitrage, described, if applicable, in the Tax Certificate (e.g., the temporary investments exceptions of Section 148(f)(4)(B) and (C) of the Code)) and for this purpose treating the last day of the applicable Bond Year as a computation date within the meaning of Section 1.148-8(b) of the Rebate Regulations (the “Rebatable Arbitrage”).
The Authority shall obtain expert advice as to the amount of the Rebatable Arbitrage to comply with this Section.
(ii) Rebatable Amount Transfer. Within 55 calendar days of the end of each applicable Bond Year with respect to the Bonds, upon the Authority’s written direction, an amount shall be deposited to the Rebate Fund by the Trustee from any legally available funds, if and to the extent required, so that the balance in the Rebate Fund shall equal the amount of Rebatable Arbitrage so calculated in accordance with (i) of this Subsection (b).
In the event that immediately following the transfer required by the previous sentence, the amount then on deposit to the credit of the applicable Rebate Fund exceeds the amount required to be on deposit therein, upon written instructions from the Authority, the Trustee shall withdraw the excess from the Rebate Fund and then credit the excess to the Revenue Fund.
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29 (iii) Payment to the Treasury. The Trustee shall, pursuant to the written direction of the Authority, pay to the United States Treasury, out of amounts in each Rebate Fund, (X) Not later than sixty (60) calendar days after the end of (A) the fifth Bond Year with respect to the Bonds, and (B) each applicable fifth Bond Year thereafter, an amount equal to at least 90% of the Rebatable Arbitrage calculated as of the end of such Bond Year; and
(Y) Not later than sixty (60) calendar days after the payment of all the Bonds, an amount equal to 100% of the Rebatable Arbitrage calculated as of the end of such applicable Bond Year, and any income attributable to the Rebatable Arbitrage, computed in accordance with Section 148(f) of the Code.
In the event that, prior to the time of any payment required to be made from the Rebate Fund, the amount in the Rebate Fund is not sufficient to make such payment when such payment is due, the Authority shall calculate or cause to be calculated the amount of such deficiency and deposit with the Trustee for deposit in the Rebate Fund an amount received from any legally available source, equal to such deficiency in the particular Rebate Fund prior to the time such payment is due. Each payment required to be made pursuant to this Subsection (b) shall be made to the Internal Revenue Service on or before the date on which such payment is due, and shall be accompanied by Internal Revenue Service Form 8038-T, which shall be prepared by the Authority and provided to the Trustee or shall be made in such other manner as the Authority shall direct the Trustee, as provided under the Code.
(c) Disposition of Unexpended Funds. Any funds remaining in the Rebate Fund after redemption and payment of the Bonds and the payments described in Subsection (b), may, upon the receipt of written directions from the Authority, be transferred by the Trustee to the Authority and utilized in any manner by the Authority.
(d) Survival of Defeasance. Notwithstanding anything in this Indenture to the contrary, the obligation to comply with the requirements of this Section shall survive the defeasance of the Bonds.
SECTION 6.09Federal Tax Covenants. Notwithstanding any other provision of this Indenture, absent an opinion of Bond Counsel that the exclusion from gross income of interest with respect to the Bonds will not be adversely affected for federal income tax purposes, the Authority covenants to comply with all applicable requirements of the Code necessary to preserve such exclusion from gross income and specifically covenants, without limiting the generality of the foregoing, as follows:
(1) Private Activity. The Authority will not take or omit to take any action, and will not make any use of the proceeds of the Bonds or of any other monies or property which would cause the Bonds to be “private activity bonds” within the meaning of Section 141 of the Code;
(2) Arbitrage. The Authority will not make any use of the proceeds of the Bonds or of any other amounts or property, regardless of the source, and will not take or omit to 151
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30 take any action which would cause the Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Code;
(3) Federal Guarantee. The Authority will not make any use of the proceeds of the Bonds or take or omit to take any action that would cause the Bonds to be “federally guaranteed” within the meaning of Section 149(b) of the Code; (4) Information Reporting. The Authority will take or cause to be taken all necessary action to comply with the informational reporting requirement of Section 149(e) of the Code; and
(5) Miscellaneous. The Authority will not take any action inconsistent with its expectations stated in the Tax Certificate executed on the Closing Date by the Authority in connection with the Bonds and will comply with the covenants and requirements stated therein and incorporated by reference herein.
SECTION 6.10Collection of Revenues Under Acquired Obligations. The Trustee shall collect all Revenues payable with respect to the Acquired Obligations promptly as such Revenues become due and payable, and shall enforce and cause to be enforced all rights of the Trustee under and with respect to the Acquired Obligations.
SECTION 6.11Disposition of Acquired Obligations. The Authority shall not sell or otherwise dispose of the Acquired Obligations, or any interest therein, unless either (a) there shall have occurred and be continuing an Event of Default hereunder or (b) upon the written direction of the Authority the proceeds derived by the Trustee from the sale or other disposition of the Acquired Obligations are sufficient to enable the Trustee to optionally redeem or discharge pursuant to Article X all Bonds then Outstanding.
SECTION 6.12Further Assurances. The Authority will make, execute, and deliver any and all such further indentures, instruments, and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Indenture and for the better assuring and confirming unto the Owners of the Bonds of the rights and benefits provided in this Indenture.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS
SECTION 7.01Events of Default. The following events shall be Events of Default:
(a) if default shall be made by the Authority in the due and punctual payment of the principal of any Bonds when and as the same shall become due and payable, whether at maturity as therein expressed, by proceedings for redemption or otherwise; (b) if default shall be made by the Authority in the due and punctual payment of any installment of interest on any Bonds when and as the same shall become due and payable; 152
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31 (c) if default shall be made by the Authority in the observance of any of the other covenants, agreements, or conditions on its part in this Indenture or in the Bonds contained, if such default shall have continued for a period of thirty (30) calendar days after written notice thereof, specifying such default and requiring the same to be remedied, shall have been given to the Authority by the Trustee or the Owners of not less than twenty-five percent (25%) in aggregate principal amount of the affected series of Bonds at the time Outstanding; provided, however, if the failure stated in the notice can be corrected, but not within the applicable period, the Trustee and such Owners shall, subject to the provisions of Section 12.09, not unreasonably withhold their consent to an extension of such time if corrective action is instituted by the Authority within the applicable period and diligently pursued until the default is corrected; and (d) the occurrence of an Event of Bankruptcy with respect to the Authority.
SECTION 7.02Remedies Upon Event of Default. If any Event of Default shall have occurred and be continuing, the Trustee or the Owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding may, upon notice in writing to the Authority, exercise any and all remedies available pursuant to law or granted with respect to such Event of Default.
SECTION 7.03Other Remedies of Bond Owners. Subject to the provisions of Section 7.07, any Bond Owner shall have the right, for the equal benefit and protection of all Bond Owners similarly situated:
(a) by mandamus, suit, action, or proceeding, to compel the Authority and its members, officers, agents, or employees to perform each and every term, provision, and covenant contained in this Indenture and in the Bonds, and to require the carrying out of any or all such covenants and agreements of the Authority and the fulfillment of all duties imposed upon it by the Bond Law;
(b) by suit, action, or proceeding in equity, to enjoin any acts or things which are unlawful, or the violation of any of the Bond Owners’ rights; or (c) upon the happening of any Event of Default, by suit, action, or proceeding in any court of competent jurisdiction, to require the Authority and its members and employees to account as if it and they were the trustees of an express trust.
SECTION 7.04Application of Revenues and Other Funds After Default. If an Event of Default shall occur and be continuing, all Revenues and any other funds then held or thereafter received by the Authority shall be immediately upon receipt by the Authority be transferred by the Authority to the Trustee and shall be deposited by the Trustee in the Revenue Fund, and all amounts held in the Revenue Fund by the Trustee, and all Revenues and any other funds then held or thereafter received by the Authority or the Trustee under any of the provisions of this Indenture shall be applied by the Trustee as follows and in the following order:
(a) To the payment of any expenses necessary in the opinion of the Trustee to protect the interests of the Owners of the Bonds and payment of reasonable charges and expenses of the Trustee (including reasonable fees and disbursements of its counsel) incurred in and about the performance of its powers and duties under this Indenture; 153
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32 (b) To the payment of the principal of and interest then due with respect to the Bonds (upon presentation of the Bonds to be paid, and stamping thereon of the payment if only partially paid, or surrender thereof if fully paid) subject to the provisions of this Indenture, as follows:
First: To the payment to the Persons entitled thereto of all installments of interest then due on the Bonds in the order of the maturity of such installments, and, if the amount available shall not be sufficient to pay in full any installment or installments maturing on the same date, then to the payment thereof ratably, according to the amounts due thereon, to the Persons entitled thereto, without any discrimination or preference; and Second: To the payment to the Persons entitled thereto of the unpaid principal of any Bonds which shall have become due, whether at maturity or by call for redemption, with interest on the overdue principal at the rate borne by the respective Bonds on the date of maturity or redemption, and, if the amount available shall not be sufficient to pay in full all the Bonds, together with such interest, then to the payment thereof ratably, according to the amounts of principal due on the Bonds on such date to the Persons entitled thereto, without any discrimination or preference.
Immediately upon the payment of any delinquent amounts that caused the occurrence of an Event of Default triggering the application of the provisions of this Section 7.04 to the Revenues and any other applicable funds so as to remedy such Event of Default, the provisions of Section
5.02 shall apply to the allocation of Revenues.
SECTION 7.05Trustee to Represent Bond Owners. The Trustee is hereby irrevocably appointed (and the successive respective Owners of the Bonds, by taking and holding the same, shall be conclusively deemed to have so appointed the Trustee) as trustee and true and lawful attorney-in-fact of the Owners of the Bonds for the purpose of exercising and prosecuting on their behalf such rights and remedies as may be available to the Owners under the provisions of the Bonds, this Indenture, the Bond Law, and applicable provisions of any other law. Upon the occurrence and continuance of an Event of Default or other occasion giving rise to a right in the Trustee to represent the Bond Owners, the Trustee in its discretion may, and upon the written request of the Owners of not less than twenty-five percent (25%) in aggregate principal amount of the affected series of the Bonds then Outstanding, and upon being indemnified to its satisfaction therefor, shall, proceed to protect or enforce its rights or the rights of such Owners by such appropriate action, suit, mandamus or other proceedings as it shall deem most effectual to protect and enforce any such right, at law or in equity, either for the specific performance of any covenant or agreement contained herein, or in aid of the execution of any power herein granted, or for the enforcement of any other appropriate legal or equitable right or remedy vested in the Trustee and such Owners under the Bonds, this Indenture, the Bond Law, or any other law; and upon instituting such proceeding, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver of the Revenues and other assets pledged under this Indenture, pending such proceedings. All rights of action under this Indenture or the Bonds or otherwise may be prosecuted and enforced by the Trustee without the possession of any of the Bonds or the production thereof in any proceeding relating thereto, and any such suit, action, or proceeding instituted by the Trustee shall be brought in the name of the Trustee for the benefit and protection of the Owners of such Bonds, subject to the provisions of this Indenture.
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33 SECTION 7.06Bond Owners’ Direction of Proceedings. Anything in this Indenture to the contrary notwithstanding, the Owners of a majority in aggregate principal amount of the affected series of the Bonds then Outstanding shall have the right, by an instrument or concurrent instruments in writing executed and delivered to the Trustee, and upon indemnification of the Trustee to its reasonable satisfaction, to direct the method of conducting all remedial proceedings taken by the Trustee hereunder, provided that such direction shall not be otherwise than in accordance with law and the provisions of this Indenture, and that the Trustee shall have the right to decline to follow any such direction which in the opinion of the Trustee would be unjustly prejudicial to Bond Owners not parties to such direction.
SECTION 7.07Limitation on Bond Owners’ Right to Sue. No Owner of any Bonds shall have the right to institute any suit, action, or proceeding at law or in equity, for the protection or enforcement of any right or remedy under this Indenture, the Agreement, the Bond Law, or any other applicable law with respect to such Bonds, unless (a) such Owner shall have given to the Trustee written notice of the occurrence of an Event of Default, (b) the Owners of not less than twenty-five percent (25%) in aggregate principal amount of the affected series of the Bonds then Outstanding, shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such suit, action, or proceeding in its own name, and (c) the Trustee shall have refused or omitted to comply with such request for a period of sixty (60) calendar days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee.
Such notification, request, tender of indemnity, and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of Bonds of any remedy hereunder or under law; it being understood and intended that no one or more Owners of Bonds shall have any right in any manner whatever by his or their action to affect, disturb, or prejudice the security of this Indenture or the rights of any other Owners of Bonds, or to enforce any right under the Bonds, this Indenture, the Bond Law, or other applicable law with respect to the Bonds, except in the manner herein provided, and that all proceedings at law or in equity to enforce any such right shall be instituted, had, and maintained in the manner herein provided and for the benefit and protection of all Owners of the Outstanding Bonds, subject to the provisions of this Indenture.
SECTION 7.08Absolute Obligation of Authority. Nothing in Section 7.07 or in any other provision of this Indenture or in the Bonds contained shall affect or impair the obligation of the Authority, which is absolute and unconditional, to pay the principal of and interest on the Bonds to the respective Owners of the Bonds at their respective dates of maturity, or upon call for redemption, as herein provided, but only out of the Revenues and other assets herein pledged therefor and received by the Authority or the Trustee, or affect or impair the right of such Owners, which is also absolute and unconditional, to enforce such payment by virtue of the contract embodied in the Bonds.
SECTION 7.09Termination of Proceeding. In case any proceedings taken by the Trustee or any one or more Bond Owners on account of any Event of Default shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Trustee or the Bond Owners, then in every such case the Authority, the Trustee, and the Bond Owners, subject to any determination in such proceedings, shall be restored to their former positions and rights hereunder, 155
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34 severally and respectively, and all rights, remedies, powers, and duties of the Authority, the Trustee, and the Bond Owners shall continue as though no such proceedings had been taken.
SECTION 7.10Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee or to the Owners of the Bonds is intended to be exclusive of any other remedy or remedies, and each and every such remedy, to the extent permitted by law, shall be cumulative and in addition to any other remedy given hereunder or now or hereafter existing at law or in equity or otherwise.
SECTION 7.11No Waiver of Default. No delay or omission of the Trustee or of any Owner of the Bonds to exercise any right or power arising upon the occurrence of any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein; and every power and remedy given by this indenture to the Trustee or to the Owners of the Bonds may be exercised from time to time and as often as may be deemed expedient.
ARTICLE VIII
THE TRUSTEE
SECTION 8.01Duties and Liabilities of Trustee.
(a) The Trustee shall, prior to an Event of Default, and after the curing or waiver of all Events of Default which may have occurred, perform such duties and only such duties as are expressly and specifically set forth in this Indenture. The Trustee shall, during the existence of any Event of Default which has not been cured or waived, exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of his own affairs. (b) The Authority may remove the Trustee at any time unless an Event of Default shall have occurred and then be continuing, and shall remove the Trustee if at any time requested to do so by an instrument or concurrent instruments in writing signed the Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding (or their attorneys duly authorized in writing) or if at any time the Trustee shall cease to be eligible in accordance with Subsection (e) of this Section, or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or its property shall be appointed, or any public officer shall take control or charge of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation, or liquidation, in each case by giving written notice of such removal to the Trustee and thereupon shall appoint a successor Trustee by an instrument in writing. (c) The Trustee may at any time resign by giving written notice of such resignation by first-class mail, postage prepaid, to the Authority, and to the Bond Owners notice of such resignation at the respective addresses shown on the Registration Books. Upon receiving such notice of resignation, the Authority shall promptly appoint a successor Trustee by an instrument in writing. The Trustee shall not be relieved of its duties until such successor Trustee has accepted appointment.
(d) Any removal or resignation of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by the successor Trustee. If no successor 156
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35 Trustee shall have been appointed and have accepted appointment within 45 calendar days following giving notice of removal or notice of resignation as aforesaid, the resigning Trustee or any Bond Owner (on behalf of himself and all other Bond Owners) may petition any court of competent jurisdiction for the appointment of a successor Trustee, and such court may thereupon, after such notice (if any) as it may deem proper, appoint such successor Trustee. Any successor Trustee appointed under this Indenture shall signify its acceptance of such appointment by executing and delivering to the Authority and to its predecessor Trustee a written acceptance thereof, and to the predecessor Trustee an instrument indemnifying the predecessor Trustee for any costs or claims arising during the time the successor Trustee serves as Trustee hereunder, and after payment by the Authority of all unpaid fees and expenses of the predecessor Trustee, such successor Trustee, without any further act, deed, or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties, and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein; but, nevertheless at the Written Request of the Authority or the request of the successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Trustee all the right, title, and interest of such predecessor Trustee in and to any property held by it under this Indenture and shall pay over, transfer, assign, and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth.
Upon request of the successor Trustee, the Authority shall execute and deliver any and all instruments as may be reasonably required for more fully and certainly vesting in and confirming to such successor Trustee all such moneys, estates, properties, rights, powers, trusts, duties, and obligations. Upon acceptance of appointment by a successor Trustee as provided in this Subsection, the Authority shall mail or cause the successor Trustee to mail, by first class mail postage prepaid, a notice of the succession of such Trustee to the trusts hereunder to each rating agency which then maintains a rating on the Bonds and to the Bond Owners at the addresses shown on the Registration Books. If the Authority fails to mail such notice within fifteen (15) calendar days after acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice to be mailed at the expense of the Authority. (e) Any Trustee appointed under the provisions of this Section 8.01 in succession to the Trustee shall be a trust company or bank having the powers of a trust company, having a combined capital and surplus of at least fifty million dollars ($50,000,000), and subject to supervision or examination by federal or state agency. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining agency above referred to, then for the purpose of this Subsection the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Subsection (e), the Trustee shall resign immediately in the manner and with the effect specified in this Section. (f) No provision in this Indenture shall require the Trustee to risk or expend its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder. (g) The Trustee shall not be responsible for the sufficiency, timeliness, or enforceability of the Revenues or the reviewing of any report or certificate required to be provided hereunder.
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36 (h) The Trustee shall not be accountable for the use or application by the Authority, the City, CFD No. 1, CFD No. 2000-3, or any other party of any funds which the Trustee has released under this Indenture.
(i) The Trustee may employ attorneys, agents, or receivers in the performance of any of its duties hereunder and shall not be answerable for the misconduct of any such attorney, agent, or receiver selected by it with reasonable care.
SECTION 8.02Merger or Consolidation. Any bank or trust company into which the Trustee may be merged or converted or with which it may be consolidated or any bank or trust company resulting from any merger, conversion, or consolidation to which it shall be a party or any bank or trust company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided such bank or trust company shall be eligible under Subsection (c) of Section
8.01 shall be the successor to such Trustee, without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding.
SECTION 8.03Liability of Trustee.
(a) The recitals of facts herein and in the Bonds contained shall be taken as statements of the Authority, and the Trustee shall not assume responsibility for the correctness of the same, or make any representations as to the validity or sufficiency of this Indenture or of the Bonds or shall incur any responsibility in respect thereof, other than as expressly stated herein in connection with the respective duties or obligations herein or in the Bonds assigned to or imposed upon it.
The Trustee shall, however, be responsible for its representations contained in its Bond of authentication on the Bonds. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of any Bonds, or in respect of the security afforded by this Indenture and the Trustee shall incur no responsibility in respect thereof. The Trustee shall be under no responsibility or duty with respect to: (i) the issuance of the Bonds for value; (ii) the application of the proceeds thereof except to the extent that such proceeds are received by it in its capacity as Trustee; or (iii) the application of any moneys paid to the Authority or others in accordance with this Indenture except as the application of any moneys paid to it in its capacity as Trustee. The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. The Trustee shall not be liable for any action taken or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture. The Trustee may become the Owner of Bonds with the same rights it would have if it were not Trustee, and, to the extent permitted by law, may act as depositary for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Bond Owners, whether or not such committee shall represent the Owners of a majority in principal amount of the Bonds then Outstanding. (b) The Trustee shall not be liable for any error of judgment made in good faith by a responsible officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts.
(c) The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding relating to the time, method 158
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37 and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture. (d) The Trustee shall not be liable for any action taken by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture.
(e) The Trustee shall not be deemed to have knowledge of any default or Event of Default hereunder unless and until it shall have actual knowledge thereof, or shall have received written notice thereof, at its Office. Except as otherwise provided herein, the Trustee shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, conditions, covenants or agreements herein or of any of the documents executed in connection with the Bonds, or as to the existence of an Event of Default thereunder. The Trustee shall not be responsible for the validity or effectiveness of any collateral given to or held by it. (f) The Trustee assumes no responsibility or liability for any information, statement, or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of the Bonds. All indemnification and releases from liability granted herein to the Trustee shall extend to the directors, officers and employees of the Trustee.
SECTION 8.04Right to Rely on Documents. The Trustee shall be protected in acting upon any notice, resolution, request, consent, order, bond, report, opinion, bonds, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Trustee may consult with counsel, who may be Bond Counsel or other counsel of or to the Authority, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith; provided, however, the Trustee shall in no event delay any payment with respect to the Bonds in anticipation of any such opinion.
The Trustee shall not be bound to recognize any person as the Owner of a Bond unless and until such Bond is submitted for inspection, if required, and his title thereto is satisfactorily established, if disputed.
Whenever in the administration of the trusts imposed upon it by this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a Written Certificate of the Authority, and such Bond shall be full warrant to the Trustee for any action taken or suffered in good faith under the provisions of this indenture in reliance upon such Bond, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as it may deem reasonable.
SECTION 8.05Preservation and Inspection of Documents. All documents received by the Trustee under the provisions of this Indenture shall be retained in its possession and shall be subject during business hours and upon reasonable prior notice to the inspection of the Authority, the City, and their agents and representatives duly authorized in writing. 159
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38 SECTION 8.06Compensation and Indemnification. The Authority shall pay to the Trustee from time to time all reasonable compensation for all services rendered under this Indenture, and also all reasonable expenses, charges, legal and consulting fees, and other disbursements and those of their attorneys, agents, and employees, incurred in and about the performance of their powers and duties under this Indenture. The Authority shall reimburse the Trustee for advances of the Trustee’s funds hereunder with interest at the maximum rate allowed by law. Subject to Section
7.04 hereof, the Trustee shall not have any lien for the payment of such compensation on any funds or accounts established hereunder and not on any of the Revenues. The Authority further agrees to indemnify and save the Trustee harmless against any liabilities which it may incur in the exercise and performance of its powers and duties hereunder and under any related documents, including the enforcement of any remedies and the defense of any suit, and which are not due to its negligence or its willful misconduct. The duty of the Authority to compensate and indemnify the Trustee hereunder shall survive the termination and discharge of this Indenture and the resignation or removal of the Trustee. None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties or in the exercise of any of its rights or powers.
ARTICLE IX
MODIFICATION OR AMENDMENT OF INDENTURE
SECTION 9.01Amendments Permitted.
(a) This Indenture and the rights and obligations of the Authority and of the Owners of the Bonds and of the Trustee may be modified or amended from time to time and at any time by a Supplemental Indenture, which the Authority and the Trustee may enter into with the written consent of the Owners of a majority in aggregate principal amount of all Bonds of the affected series then Outstanding, which shall have been filed with the Trustee. No such modification or amendment shall (i) extend the fixed maturity of any Bonds, or reduce the amount of principal thereof, or extend the time of payment, without the consent of the Owner of each Bond so affected, or (ii) reduce the aforesaid percentage of Bonds the consent of the Owners of which is required to effect any such modification or amendment, or (iii) permit the creation of any lien on the Revenues and other assets pledged under this Indenture prior to or on a parity with the lien created by this Indenture or deprive the Owners of the Bonds of the lien created by this Indenture on such Revenues and other assets (except as expressly provided in this Indenture), without the consent of the Owners of all of the Bonds then Outstanding. It shall not be necessary for the consent of the Bond Owners to approve the particular form of any Supplemental Indenture, but it shall be sufficient if such consent shall approve the substance thereof Promptly after the execution by the Authority and the Trustee of any Supplemental Indenture pursuant to this Subsection (a), the Trustee shall mail a notice (the form of which shall be furnished to the Trustee by the Authority), by first class mail postage prepaid, setting forth in general terms the substance of such Supplemental Indenture, to the Owners of the Bonds at the respective addresses shown on the Registration Books. Any failure to give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such Supplemental Indenture. (b) This Indenture and the rights and obligations of the Authority, the Trustee, and the Owners of the Bonds may also be modified or amended from time to time and at any time by a 160
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39 Supplemental Indenture, which the Authority and the Trustee may enter into without the consent of any Bond Owners for any one or more of the following purposes:
(1) to add to the covenants and agreements of the Authority contained in this Indenture other covenants and agreements thereafter to be observed, or to pledge or assign additional security for the Bonds (or any portion thereof); (2) to make such provisions for the purpose of curing any ambiguity, inconsistency, or omission, or of curing or correcting any defective provision contained in this Indenture, or as to any other provisions of this Indenture as the Authority may deem necessary or desirable, in any case which do not adversely affect the security for the Bonds granted hereunder;
(3) to modify, amend, or supplement this Indenture in such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect, and to add such other terms, conditions, and provisions as may be permitted by said act or similar federal statute; and (4) to modify, amend, or supplement this Indenture in such manner as to cause interest on the Bonds to be excludable from gross income for purposes of federal income taxation by the United States of America.
SECTION 9.02Effect of Supplemental Indenture. Upon the execution of any Supplemental Indenture pursuant to this Article, this Indenture shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties, and obligations under this Indenture of the Authority, the Trustee, and all Owners of Bonds Outstanding shall thereafter be determined, exercised, and enforced hereunder subject in all respects to such modification and amendment, and all the terms and conditions of any such Supplemental Indenture shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes.
SECTION 9.03Endorsement of Bonds; Preparation of New Bonds. Bonds delivered after the execution of any Supplemental Indenture pursuant to this Article may, and if the Authority so determines shall, bear a notation by endorsement or otherwise in form approved by the Authority and the Trustee as to any modification or amendment provided for in such Supplemental Indenture, and, in that case, upon demand on the Owner of any Bond or Bonds Outstanding at the time of such execution and presentation of his Bond or Bonds for that purpose at the Office of the Trustee a suitable notation shall be made on such Bond or Bonds. If the Supplemental Indenture shall so provide, new Bonds so modified as to conform, in the opinion of the Authority and the Trustee, to any modification or amendment contained in such Supplemental Indenture, shall be prepared and executed by the Authority and authenticated by the Trustee, and upon demand of the Owners of any Bond or Bonds then Outstanding shall be exchanged at the Office of the Trustee, without cost to any Bond Owner, for Bond or Bonds then Outstanding, upon surrender for cancellation of such Bond or Bonds, in equal aggregate principal amount of the same interest rate and maturity. 161
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40 ARTICLE X
DEFEASANCE
SECTION 10.01Discharge of Indenture. The Bonds may be paid by the Authority in any of the following ways, provided that the Authority also pays or causes to be paid any other sums payable hereunder by the Authority:
(a) by paying or causing to be paid the principal of and redemption premium, if any, and interest on the Bonds, as and when the same become due and payable; (b) by depositing with the Trustee, in trust (pursuant to an escrow agreement), at or before maturity, money or securities in the necessary amount (as provided in Section
10.03) to pay or redeem all Bonds then Outstanding; or
(c) by delivering to the Trustee, for cancellation by it, all of the Bonds then Outstanding.
If the Authority shall also pay or cause to be paid all other sums payable hereunder by the Authority including without limitation any amounts due and owing the Trustee hereunder, then and in that case, at the election of the Authority (evidenced by a Written Certificate of the Authority, filed with the Trustee, signifying the intention of the Authority to discharge all such indebtedness and this Indenture), and notwithstanding that any Bonds shall not have been surrendered for payment, this Indenture and the pledge of Revenues and other assets made under this Indenture and all covenants, agreements, and other obligations of the Authority under this Indenture shall cease, terminate, become void, and be completely discharged and satisfied. In such event, upon the Written Request of the Authority, and upon receipt of a Written Certificate of Authorized Representatives of the Authority and an opinion of Bond Counsel acceptable to the Trustee, each to the effect that all conditions precedent herein provided for relating to the discharge and satisfaction of the obligations of the Authority have been satisfied, the Trustee shall cause an accounting for such period or periods as may be requested by the Authority to be prepared and filed with the Authority and shall execute and deliver to the Authority all such instruments as shall be necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over, transfer, assign, or deliver all moneys or securities or other property held by it pursuant to this Indenture, which are not required for the payment or redemption of Bonds not theretofore surrendered for such payment or redemption, to the Authority.
SECTION 10.02Discharge of Liability on Bonds. Upon the deposit with the Trustee, in trust, at or before maturity, of money or securities in the necessary amount (as provided in Section 10.03) to pay or redeem any Outstanding Bonds (whether upon or prior to the maturity or the redemption date of such Bonds), provided that, if such Bonds are to be redeemed prior to maturity, notice of such redemption shall have been given as provided in Article IV or provision satisfactory to the Trustee shall have been made for the giving of such notice, then all liability of the Authority in respect of such Bonds shall cease, terminate, and be completely discharged, and the Owners thereof shall thereafter be entitled only to payment out of such money or securities deposited with the Trustee as aforesaid for their payment, subject, however, to the provisions of Section 10.04. 162
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41 The Authority may at any time surrender to the Trustee for cancellation by it any Bonds previously issued and delivered, which the Authority may have acquired in any manner whatsoever, and such Bonds, upon such surrender and cancellation, shall be deemed to be paid and retired.
SECTION 10.03Deposit of Money or Securities with Trustee. Whenever in this Indenture it is provided or permitted that there be deposited with or held in trust by the Trustee money or securities in the necessary amount to pay or redeem any Bonds, the money or securities so to be deposited or held may include money or securities held by the Trustee in the funds and accounts established pursuant to this Indenture and shall be:
(a) Lawful money of the United States of America, in an amount equal to the principal amount of such Bonds and all unpaid interest thereon to maturity, except that, in the case of Bonds which are to be redeemed prior to maturity and in respect of which notice of such redemption shall have been given as provided in Article IV or provision satisfactory to the Trustee shall have been made for the giving of such notice, the amount to be deposited or held shall be the principal amount of such Bonds plus any premium and all unpaid interest thereon to the redemption date; or
(b) Non-callable Federal Securities described in clause (a) of the definition thereof, the principal of, premium, if any, and interest on which when due as determined by the Independent Certified Public Accountant will provide money sufficient to pay the principal of and all unpaid interest to maturity, or to the redemption date, as the case may be, on the Bonds to be paid or redeemed, as such principal and interest become due, provided that in the case of Bonds which are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as provided in Article IV or provision satisfactory to the Trustee shall have been made for the giving of such notice; provided, in each case, that the Trustee shall have been irrevocably instructed (by the terms of this Indenture or by Written Request of the Authority) to apply such funds to the payment of such principal and interest with respect to such Bonds.
SECTION 10.04Payment of Bonds After Discharge of Indenture. Notwithstanding any provisions of this Indenture, any moneys held by the Trustee in trust for the payment of the principal of, or interest on, any Bonds and remaining unclaimed for two (2) years after the principal of all of the Bonds has become due and payable (whether at maturity or upon call for redemption or otherwise as provided in this Indenture), if such moneys were so held at such date, or one (1) year after the date of deposit of such moneys if deposited after said date when all of the Bonds became due and payable, shall be repaid to the Authority free from the trusts created by this Indenture and all liability of the Trustee with respect to such moneys shall thereupon cease; provided, however, that before the repayment of such moneys to the Authority as aforesaid, the Trustee shall (at the written request and cost of the Authority) first mail, by first-class mail, postage prepaid, to the Owners of Bonds which have not yet been paid, at the respective addresses shown on the Registration Books, a notice, in such form as may be deemed appropriate by the Trustee with respect to the Bonds so payable and not presented and with respect to the provisions relating to the repayment to the Authority of the moneys held for the payment thereof. 163
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42 ARTICLE XI
MISCELLANEOUS
SECTION 11.01Liability of Authority Limited to Revenues. Notwithstanding anything in this Indenture or in the Bonds contained, neither the Authority nor any member thereof shall be required to advance any moneys derived from any source other than the Revenues and other assets pledged under this Indenture for the payment of the principal of or interest on the Bonds.
Nevertheless, the Authority may, but shall not be required to, advance for any of the purposes hereof any funds of the Authority which may be made available to it for such purposes.
SECTION 11.02Successor Is Deemed Included in All References to Predecessor. Whenever in this Indenture either the Authority or the Trustee is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Indenture contained by or on behalf of the Authority or the Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not.
SECTION 11.03Limitation of Rights to Parties and Bond Owners. Nothing in this Indenture or in the Bonds expressed or implied is intended or shall be construed to give to any Person other than the Authority, the Trustee, the City, CFD No. 1, CFD No. 2000-3, and the Owners of the Bonds, any legal or equitable right, remedy, or claim under or in respect of this Indenture or any covenant, condition, or provision therein or herein contained; and all such covenants, conditions, and provisions are and shall be held to be for the sole and exclusive benefit of the Authority, the Trustee, the City, CFD No. 1, CFD No. 2000-3, and the Owners of the Bonds.
SECTION 11.04Waiver of Notice; Requirement of Mailed Notice. Whenever in this Indenture the giving of notice by mail or otherwise is required, the giving of such notice may be waived in writing by the Person entitled to receive such notice and in any such case the giving or receipt of such notice shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. Whenever in this Indenture any notice shall be required to be given by mail, such requirement shall be satisfied by the deposit of such notice in the United States mail, postage prepaid, by first class mail.
SECTION 11.05Destruction of Bonds. Whenever in this Indenture provision is made for the cancellation by the Trustee and the delivery to the Authority of any Bonds, the Trustee may, in lieu of such cancellation and delivery, destroy such Bonds as may be allowed by law, and in accordance with its retention policy then in effect.
SECTION 11.06Severability of Invalid Provisions. If any one or more of the provisions contained in this Indenture or in the Bonds shall for any reason be held to be invalid, illegal, or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in this Indenture and such invalidity, illegality, or unenforceability shall not affect any other provision of this Indenture, and this Indenture shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein.
The Authority hereby declares that it would have entered into this Indenture and each and every other Section, paragraph, sentence, clause, or phrase hereof and authorized the issuance of the 164
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43 Bonds pursuant thereto irrespective of the fact that any one or more sections, paragraphs, sentences, clauses, or phrases of this Indenture may be held illegal, invalid, or unenforceable.
SECTION 11.07Notices. All notices or communications herein required or permitted to be given to the Authority or the Trustee shall be in writing and shall be deemed to have been sufficiently given or served for all purposes by being delivered or sent by telecopy or by being deposited, postage prepaid, in a post office letter box, addressed as follows:
If to Authority: City of Oxnard Financing Authority
300 West Third Street
Oxnard, CA 93030
Attn: Controller
If to the Trustee: Computershare Trust Company, N.A.
CTSO Mail Operations
Attention: __________________
MAC: N9300-070
600 South 4th Street, 7th Floor
Minneapolis, MN 55415
with a copy to:
Computershare Trust Company, N.A.
333 S. Grand Avenue, Floor 5
Los Angeles, CA 90071-1504
Attention: Corporate Trust Services
If to the City, CFD No. 1, or CFD No.
2000-3
City of Oxnard
300 West Third Street
Oxnard, CA 93030
Attention: Chief Financial Officer
SECTION 11.08Evidence of Rights of Bond Owners. Any request, consent, or other instrument required or permitted by this Indenture to be signed and executed by Bond Owners may be in any number of concurrent instruments of substantially similar tenor and shall be signed or executed by such Bond Owners in Person or by an agent or agents duly appointed in writing. Proof of the execution of any such request, consent, or other instrument or of a writing appointing any such agent, or of the holding by any Person of Bonds transferable by delivery, shall be sufficient for any purpose of this Indenture and shall be conclusive in favor of the Trustee and the Authority if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such request, consent, or other instrument or writing may be proved by the Bond of any notary public or other officer of any jurisdiction, authorized by the laws thereof to take acknowledgments of deeds, certifying that the Person signing such request, consent, or other instrument acknowledged to him the execution thereof, or by an affidavit of a witness of such execution duly sworn to before such notary public or other officer.
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44 The ownership of registered Bonds shall be proved by the Registration Books.
Any request, consent, or other instrument or writing of the Owner of any Bond shall bind every future Owner of the same Bond and the Owner of every Bond issued in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the Authority in accordance therewith or reliance thereon.
SECTION 11.09Disqualified Bonds. In determining whether the Owners of the requisite aggregate principal amount of Bonds have concurred in any demand, request, direction, consent, or waiver under this Indenture, Bonds which are known by the Trustee to be owned or held by or for the account of the Authority or the City, or by any other obligor on the Bonds, or by any person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or the City or any other obligor on the Bonds, shall be disregarded and deemed not to be Outstanding for the purpose of any such determination. Bonds so owned which have been pledged in good faith may be regarded as Outstanding for the purposes of this Section if the pledgee shall certify to the Trustee the pledgee’s right to vote such Bonds and that the pledgee is not a person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Authority or the City or any other obligor on the Bonds. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. Upon request, the Authority shall specify to the Trustee those Bonds disqualified pursuant to this Section 11.09.
SECTION 11.10Money Held for Particular Bonds. The money held by the Trustee for the payment of the interest or principal due on any date with respect to particular Bonds shall, on and after such date and pending such payment, be set aside on its books and held in trust by it for the Owners of the Bonds entitled thereto, subject, however, to the provisions of Section 10.04 but without any liability for interest thereon.
SECTION 11.11Funds and Accounts. Any fund or account required by this Indenture to be established and maintained by the Trustee may be established and maintained in the accounting records of the Trustee, either as a fund or an account, and may, for the purposes of such records, any audits thereof and any reports or statements with respect thereto, be treated either as a fund or as an account; but all such records with respect to all such funds and accounts shall at all times be maintained in accordance with industry standards to the extent practicable, and with due regard for the requirements of Section 6.05 and for the protection of the security of the Bonds and the rights of every Owner thereof
SECTION 11.12Payment on Non-Business Days. In the event any payment is required to be made hereunder on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day with the same effect as if made on such previous non-Business Day.
SECTION 11.13Waiver of Personal Liability. No member, officer, agent, or employee of the Authority shall be individually or personally liable for the payment of the principal of or premium or interest on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof; but nothing herein contained shall relieve any such member, officer, agent, or employee from the performance of any official duty provided by law or by this Indenture. 166
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45 SECTION 11.14Execution in Several Counterparts. This Indenture may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts, or as many of them as the Authority and the Trustee shall preserve undestroyed, shall together constitute but one and the same instrument.
SECTION 11.15Governing Laws. This Indenture shall be governed by and construed in accordance with the laws of the State of California.
(Signature page follows)
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IN WITNESS WHEREOF, the City of Oxnard Financing Authority has caused this Indenture to be signed in its name by its Chairman and attested by its Secretary and Computershare Trust Company, N.A., in its acceptance of the trusts and duties created hereunder, has caused this Indenture to be signed in its corporate name by its officer thereunto duly authorized, all as of the day and year first above written.
CITY OF OXNARD FINANCING
AUTHORITY
By:
John C. Zaragoza, Chairman
ATTEST:
By:
Rose Chaparro, Secretary
COMPUTERSHARE TRUST COMPANY,
N.A., as Trustee
By:
Authorized Officer
-Signature Page-
Indenture of Trust
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EXHIBIT A
FORM OF BOND
No. R-___ **$__________**
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
CITY OF OXNARD FINANCING AUTHORITY
2022 LOCAL OBLIGATION REVENUE REFUNDING BONDS
(SPECIAL DISTRICT BOND)
INTEREST RATE MATURITY DATE DATED DATE CUSIP
____% September 2, 20__
REGISTERED OWNER:
PRINCIPAL AMOUNT: _______________________________ DOLLARS The City of Oxnard Financing Authority (the “Authority”), a joint powers authority created pursuant to the provisions of Articles 1 through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “Law”), for value received, hereby promises to pay (but only out of the Revenues and other assets pledged therefor as hereinafter mentioned) to the Registered Owner stated above or registered assigns, on the Maturity Date stated above (subject to any right of prior redemption hereinafter mentioned), the Principal Amount stated above, in lawful money of the United States of America and to pay interest thereon in like lawful money from the Interest Payment Date (as defined herein) next preceding the date of authentication of this Bond (as defined herein) (unless this Bond is authenticated after a Record Date (as defined herein) and on or prior to the next succeeding Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or unless this Bond is authenticated on or before the first Record Date, in which event it shall bear interest from the Dated Date stated above, or unless this Bond is authenticated on or before the first Record Date, in which event it shall bear interest from the Dated Date stated above, or unless interest is in default on this Bond on such date, in which case it shall bear interest from the last date interest was paid in full or from its Dated Date if no interest has been paid) until payment of such principal sum shall be discharged as provided in the Indenture (as defined herein) at the Interest Rate per annum stated above, payable semiannually on each March 2 and September 2 (each, an “Interest Payment Date”), commencing September 2, 2022. The principal (or redemption price) hereof is payable at 169
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the corporate trust office of Computershare Trust Company, N.A. (together with any successor trustee under the Indenture, the “Trustee”), in Los Angeles, California (or such other office designated by the Trustee, herein called the “Office of the Trustee”). Interest hereon is payable (except as otherwise provided in the Indenture with respect to defaulted interest) by check mailed on each Interest Payment Date to the Registered Owner as of the fifteenth (15th) day of the month preceding each Interest Payment Date (the “Record Date”) at the address shown on the registration books maintained by the Trustee, or by wire transfer made on such Interest Payment Date to any Owner of $1,000,000 or more in aggregate principal amount of Bonds (as defined in the Indenture) who shall have requested such transfer pursuant to written notice filed with the Trustee on or before the preceding Record Date. Interest shall be computed on the basis of a 360-day year composed of twelve 30-day months.
This Bond is one of a duly authorized issue of bonds of the Authority designated as the “City of Oxnard Financing Authority 2022 Local Obligation Revenue Refunding Bonds (Special District Bonds) (the “Bonds”), in the aggregate principal amount of $_________________, all issued pursuant to the provisions of the Marks-Roos Local Bond Pooling Act of 1985, constituting Article 4 of the Law (commencing with Section 6584) (the “Bond Law”), and pursuant to an Indenture of Trust, dated as of July 1, 2022 (the “Indenture”), by and between the Authority and the Trustee, issued for the purpose of acquiring the Acquired Obligations. The term “Acquired Obligations” is defined in the Indenture as, collectively, (i) the $11,835,000 original principal amount City of Oxnard Assessment District No. 2001-1 (Rice Avenue/Highway 101 Interchange) Limited Obligation Improvement Refunding Bonds, Series 2012 (the “AD Bonds”), (ii) the $8,750,000 original principal amount Community Facilities District No. 1 (Westport at Mandalay Bay) of the City of Oxnard 2012 Special Tax Refunding Bonds (the “CFD No. 1 Bonds”), and (iii) the $7,980,000 original principal amount City of Oxnard Community Facilities District No. 2000-3 (Oxnard Boulevard/Highway 101 Interchange) Special Tax Refunding Bonds, Series 2012.
Reference is hereby made to the Indenture (a copy of which is on file at the Office of the Trustee) and all indentures supplemental thereto and to the Bond Law for a description of the rights thereunder of the Owners of the Bonds, of the nature and extent of the security for the Bonds, of the rights, duties, and immunities of the Trustee, and of the rights and obligations of the Authority thereunder. The capitalized terms used herein shall have the meanings ascribed to such terms in the Indenture unless otherwise specified herein. The Registered Owner of this Bond, by acceptance hereof, assents and agrees to all the provisions of the Indenture.
The Bonds and the interest thereon are limited, special obligations of the Authority and are payable solely from Revenues, derived primarily from payments made with respect to the Acquired Obligations acquired with the proceeds of the Bonds. The Bonds are secured by a first pledge and assignment of the Revenues and of certain amounts held in the funds and accounts established pursuant to the Indenture; subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth in the Indenture.
The Bonds are not a lien or charge upon the funds or property of the Authority, except to the extent of the aforesaid pledge and assignment. The Bonds are not a debt of the City or the State of California and the City and said State are not liable for the payment thereof The Authority has no taxing power.
The Bonds maturing on or before September 2, _____, are not subject to optional redemption prior to their respective stated maturities. The Bonds maturing on or after September 170
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2, ______, may be redeemed at the option of the Authority prior to maturity on any date on or after September 2, ______, in whole or in part in any Authorized Denomination (as defined in the Indenture) (by lot within any maturity), as directed by the Authority in a Written Order accompanied by and consistent with the applicable Cash Flow Certificate, from any source of funds (excluding amounts transferred to the Trustee by the Fiscal Agent from the AD Prepayment Account, the CFD No. 1 Prepayment Account, or the CFD No. 2000-3 Prepayment Account, as applicable) at the redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued interest to the date of redemption, without premium.
The Bonds or any portion of a Bond in any Authorized Denomination shall be subject to extraordinary redemption prior to maturity, in whole on any date, or in part on any Interest Payment Date, pro rata among maturities as directed by the Authority in a Written Order accompanied by and consistent with the applicable Cash Flow Certificate, from funds transferred to the Trustee by the Fiscal Agent from the AD Prepayment Account, the CFD No. 1 Prepayment Account, or the CFD No. 2000-3 Prepayment Account, as applicable, at the redemption price set forth below (expressed as a percentage of the principal amount of the Bonds to be redeemed), plus accrued interest to the date of redemption:
Redemption Dates Redemption Price
March 2, ____, through March 2, _____ 103%
September 2, ___, and March 2, ___ 102
September 2, _____, and March 2, _____ 101
September 2, ___, thereafter 100
The Bonds maturing on September 2, ____, are subject to mandatory redemption in part on September 2, commencing September 2, 2023, in the amounts and on the dates set forth in the Indenture at a redemption price equal to the principal amount thereof together with accrued interest to the date fixed for redemption, without premium.
In the event of any optional or extraordinary redemption of Bonds maturing on September 2, 20__, the schedule of mandatory sinking fund installments shall be reduced in equal percentages, as nearly as practicable, provided that the reductions shall be made in multiples of $5,000. The Authority shall provide the Trustee with the amended sinking fund payments schedule calculated as set forth above in a Written Order accompanied by and consistent with the applicable Cash Flow Certificate.
Notice of redemption shall be mailed by first-class mail, postage prepaid, no earlier than sixty (60) nor less than thirty (30) calendar days prior to the redemption date, to the respective Owners of any Bonds designated for redemption at their addresses appearing on the Bond registration books held by the Trustee. Each notice of redemption shall state the redemption date, the place or places of redemption, the fact that such redemption is subject to cancellation, the CUSIP numbers and the bond numbers of the Bonds to be redeemed, and, in the case of Bonds to be redeemed in part only, the respective multiples of $5,000 of the principal amount thereof to be redeemed. Each such notice shall also state that on said redemption date there will become due and payable on each of said Bonds the principal amount relating thereto or, in the case of a Bond to be redeemed in part only, of said specified portion of the principal thereof, plus accrued interest, 171
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if any, and that from and after such redemption date, interest thereon shall cease to accrue, and shall require that such Bonds be then surrendered at the Office of the Trustee. Neither the failure of any Bond Owner to receive any notice so mailed nor any defect therein shall affect the sufficiency of the proceedings for redemption of any Bond or the cessation of accrual of interest thereon.
If an Event of Default shall occur, the principal of all Bonds may be declared due and payable and become subject to redemption upon the conditions, in the manner, and with the effect provided in the Indenture.
The Bonds are issuable as fully-registered Bonds in the denomination of $5,000 each or any integral multiple thereof. Subject to the limitations and upon payment of the charges, if any, provided in the Indenture, Bonds may be exchanged, at the Office of the Trustee, for a like aggregate principal amount of Bonds of the same interest rate and of other Authorized Denominations.
This Bond is transferable by the Registered Owner hereof, in person or by his attorney duly authorized in writing, at the Office of the Trustee, but only in the manner, subject to the limitations, and upon payment of the charges, if any, provided in the Indenture, and upon surrender and cancellation of this Bond. Upon such transfer, a new Bond or Bonds, of Authorized Denomination or Authorized Denominations, for the same aggregate principal amount, will be issued to the transferee in exchange herefor. The Authority and the Trustee may treat the Registered Owner hereof as the absolute Owner hereof for all purposes, and the Authority and the Trustee shall not be affected by any notice to the contrary.
The Indenture and the rights and obligations of the Authority and of the Owners of the Bonds and of the Trustee may be modified or amended from time to time and at any time in the manner, to the extent, and upon the terms provided in the Indenture; provided that no such modification or amendment shall (1) extend the fixed maturity of this Bond, or reduce the amount of principal hereof, or reduce the rate of interest hereon, or extend the time of payment of interest hereon, or reduce any premium payable upon the redemption hereof, without the consent of the Owner thereof, or (2) reduce the percentage of Bonds the consent of the Owners of which is required to effect any such modification or amendment, or permit the creation of any lien on the Revenues and other assets pledged as security for the Bonds prior to or on a parity with the lien created by the Indenture, or deprive the Owners of the Bonds of the lien created by the Indenture on such Revenues and other assets (except as expressly provided in the Indenture), without the consent of the Owners of all Bonds then outstanding, all as more fully set forth in the Indenture.
It is hereby certified and recited by the Authority that any and all conditions, things, and acts required to exist, to have happened, and to have been performed precedent to and in the issuance of this Bond do exist, have happened, and have been performed in due time, form, and manner as required by the Bond Law, and by the Constitution and laws of the State of California, and that the amount of this Bond, together with all other indebtedness of the Authority, does not exceed any limit prescribed by the Bond Law, or by the Constitution and laws of the State of California, and is not in excess of the amount of Bonds permitted to be issued under the Indenture. 172
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This Bond shall not be entitled to any benefit under the Indenture, or become valid or obligatory for any purpose, until the Certificate of Authentication hereon endorsed shall have been manually signed by the Trustee.
IN WITNESS WHEREOF, the Authority has caused this Bond to be executed in its name and on its behalf by the signature of the Chairman of the Authority and attested by the signature of the Secretary of the Authority, all as of the Dated Date.
CITY OF OXNARD FINANCING
AUTHORITY
By:
John C. Zaragoza
Chairman
ATTEST:
By:
Rose Chaparro
Secretary
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CERTIFICATE OF AUTHENTICATION AND REGISTRATION
This is one of the Bonds described in the within-mentioned Indenture, which has been authenticated on the date set forth below.
Dated: _____________, 2022 COMPUTERSHARE TRUST COMPANY, N.A.
By:
Authorized Signatory
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FORM OF ASSIGNMENT
For value received the undersigned do(es) hereby sell, assign and transfer unto_________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ (Name, Address and Tax Identification or Social Security Number of Assignee) the within Bond and do(es) hereby irrevocably constitute and appoint ______________________ _________________________________________ attorney, to transfer the same on the books of the Trustee, with full power of substitution in the premises.
Dated: _______________________
Signature Guaranteed:
Note: Signature guarantee shall be made by a
guarantor institution participating in
the Securities Transfer Agents
Medallion Program or in such other
guarantee program acceptable to the
Trustee.
Note: The signature(s) on this Assignment
must correspond with the name(s) as
written on the face of the within Bond
in every particular, without alteration
or enlargement or any change
whatsoever.
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EXHIBIT B
PERMITTED INVESTMENTS
(1) Direct obligations of the United States of America and securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the United States of America (“U.S. Government Securities”).
(2) Direct obligations (see footnote 1 below) of the following federal agencies which are fully guaranteed by the full faith and credit of the United States of America:
(a) Export-Import Bank of the United States - Direct obligations and fully guaranteed certificates of beneficial interest
(b) Federal Housing Administration - debentures
(c) General Services Administration - participation certificates (d) Government National Mortgage Association (“GNMAs”) - guaranteed mortgage-backed securities and guaranteed participation certificates (e) Small Business Administration - .guaranteed participation certificates and guaranteed pool certificates
(f) U.S. Department of Housing & Urban Development - local authority bonds (g) U.S. Maritime Administration - guaranteed Title XI financings (h) Washington Metropolitan Area Transit Authority - guaranteed transit bonds (3) Direct obligations 1 of the following federal agencies which are not fully guaranteed by the faith and credit of the United States of America:
(a) Federal National Mortgage Association (“FNMAs”) - senior debt obligations rated Aaa by Moody’s and AAA by S&P
The following are explicitly excluded from the securities enumerated in clauses (a) and (b):
1 The following are explicitly excluded from the securities enumerated in clauses (a) and (b):
(a) All derivative obligations, including without limitation inverse floaters, residuals, interest-only, principal- only and range notes;
(b) Obligations that have a possibility of returning a zero or negative yield if held to maturity; (c) Obligations that do not have a fixed par value or those whose terms do not promise a fixed dollar amount at maturity or call date; and
(d) Collateralized Mortgage-Backed Obligations (“CMOs”). 176
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(a) All derivative obligations, including without limitation inverse floaters, residuals, interest-only, principal-only and range notes; (b) Obligations that have a possibility of returning a zero or negative yield if held to maturity;
(c) Obligations that do not have a fixed par value or those whose terms do not promise a fixed dollar amount at maturity or call date; and (d) Collateralized Mortgage-Backed Obligations (“CMOs”). (a) Federal Home Loan Mortgage Corporation (“FHLMCs”) - participation certificates and senior debt obligations rated Aaa by Moody’s and AAA by S&P (b) Federal Home Loan Banks - consolidated debt obligations (c) Student Loan Marketing Association - debt obligations (d) Resolution Funding Corporation - debt obligations
(4) Direct, general obligations of any state of the United States of America or any subdivision or agency thereof whose uninsured and unguaranteed general obligation debt is rated, at the time of purchase, A2 or better by Moody’s and A or better by S&P, or any obligation fully and unconditionally guaranteed by any state, subdivision, or agency whose uninsured and unguaranteed general obligation debt is rated, at the time of purchase, A2 or better by Moody’s and A or better by S&P.
(5) Commercial paper (having original maturities of not more than 270 days) rated, at the time of purchase, P-1 by Moody’s and A-1 or better by S&P. (6) Certificates of deposit, savings accounts, deposit accounts, or money market deposits in amounts that are continuously and fully insured by the Federal Deposit Insurance Corporation (“FDIC”), including the Bank Insurance Fund and the Savings Association Insurance Fund.
(7) Certificates of deposit, deposit accounts, federal funds, or bankers’ acceptances (in each case having maturities of not more than 365 days following the date of purchase) of any domestic commercial bank or United States branch office of a foreign bank, provided that such bank’s short-term certificates of deposit are rated P-1 by Moody’s and A-1 or better by S&P (not considering holding company ratings).
(8) Investments in money-market funds rated AAAm or AAAm-G by S&P. Such money market funds may include funds for which the Trustee or its affiliates or subsidiaries provide investment advisory or other management services. (9) State-sponsored investment pools rated AA- or better by S&P. (10) Repurchase agreements that meet the following criteria:
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(a) A master repurchase agreement or specific written repurchase agreement, substantially similar in form and substance to the Public Securities Association or Bond Market Association master repurchase agreement, governs the transaction. (b) Acceptable providers shall consist of (i) registered broker/dealers subject to Securities Investors’ Protection Corporation (“SIPC”) jurisdiction or commercial banks insured by the FDIC, if such broker/dealer or bank has an uninsured, unsecured, and unguaranteed rating of A3/P-1 or better by Moody’s and A-/A-1 or better by S&P, or (ii) domestic structured investment companies rated, or domestic structured investment companies with a guarantor rated, Aaa by Moody’s and AAA by S&P. (c) The repurchase agreement shall require termination thereof if the counterparty’s ratings are suspended, withdrawn, or fall below A3 or P-1 from Moody’s, or A- or A-1 from S&P. Within ten (10) days, the counterparty shall repay the principal amount plus any accrued and unpaid interest on the investments. (d) The repurchase agreement shall limit acceptable securities to U.S.
Government Securities and to the obligations of GNMA, FNMA or FHLMC described in clauses 2(d), 3(a) and 3(b) above. The fair market value of the securities in relation to the amount of the repurchase obligation, including principal and accrued interest, is equal to a collateral level of at least 104% for U.S. Government Securities and 105% for GNMAs, FNMAs, or FHLMCs. The repurchase agreement shall require (i) the Trustee or an independent third party acting solely as agent for the Trustee (the “Agent”) to value the collateral securities no less frequently than weekly, (ii) the delivery of additional securities if the fair market value of the securities is below the required level on any valuation date, and (iii) liquidation of the repurchase securities if any deficiency in the required percentage is not restored within two (2) Business Days of such valuation. (e) The repurchase securities shall be delivered free and clear of any lien to the Trustee or the Agent, and such Agent is (i) a Federal Reserve Bank or (ii) a bank which is a member of the FDIC and which has combined capital, surplus, and undivided profits or, if appropriate, a net worth, of not less than $50 million, and the Trustee shall have received written confirmation from such third party that such third party holds such securities, free and clear of any lien, as agent for the Trustee.
(f) A perfected first security interest in the repurchase securities shall be created for the benefit of the Trustee, and the Authority and the Trustee shall receive an opinion of counsel as to the perfection of the security interest in such repurchase securities and any proceeds thereof
(g) The repurchase agreement shall have a term of one year or less, or shall be due on demand.
(h) The repurchase agreement shall establish the following as events of default, the occurrence of any of which shall require the immediate liquidation of the repurchase securities:
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i. insolvency of the broker/dealer or commercial bank serving as the counterparty under the repurchase agreement;
ii. failure by the counterparty to remedy any deficiency in the required collateral level or to satisfy the margin maintenance call under clause 10(d) above; or
iii. failure by the counterparty to repurchase the repurchase securities on the specified date for repurchase.
(11) Investment agreements (also referred to as guaranteed investment contracts) that meet the following criteria:
(a) A master agreement or specific written investment agreement governs the transaction.
(b) Acceptable providers of uncollateralized investment agreements shall consist of (i) domestic FDIC-insured commercial banks, or U.S. branches of foreign banks, rated at least Aa2 by Moody’s and AA by S&P; (ii) domestic insurance companies rated Aaa by Moody’s and AAA by S&P; and (iii) domestic structured investment companies rated, or domestic structured investment companies with a guarantor rated, Aaa by Moody’s and AAA by S&P.
(c) Acceptable providers of collateralized investment agreements shall consist of (i) registered broker/dealers subject to SIPC jurisdiction, if such broker/dealer has an uninsured, unsecured, and unguaranteed rating of Al or better by Moody’s and A+ or better by S&P; (ii) domestic FDIC-insured commercial banks, or U.S. branches of foreign banks, rated at least Al by Moody’s and A+ by S&P; (iii) domestic insurance companies rated at least Al by Moody’s and A+ by S&P; and (iv) domestic structured investment companies rated, or domestic structured investment companies with a guarantor rated, Aaa by Moody’s and AAA by S&P. Required collateral levels shall be as set forth in clause 11(f) below.
(d) The investment agreement shall provide that, if the provider’s ratings fall below Aa3 by Moody’s or AA- by. S&P, the provider shall within ten (10) days either (i) repay the principal amount plus any accrued and interest on the investment; or (ii) deliver Permitted Collateral as provided below.
(e) The investment agreement must provide for termination thereof if the provider’s ratings are suspended, withdrawn, or fall below A3 from Moody’s or A- from S&P. Within ten (10) days, the provider shall repay the principal amount plus any accrued interest on the agreement, without penalty.
(f) The investment agreement shall provide for the delivery of collateral described in clause i or ii below (“Permitted Collateral”) which shall be maintained at the following collateralization levels at each valuation date:
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i. U.S. Government Securities at 104% of principal plus accrued interest; or
ii. Obligations of GNMA, FNMA, or FHLMC (described in clauses 2(d), 3(a), and 3(b) above) at 105% of principal and accrued interest. (g) The investment agreement shall require the Trustee or the Agent to determine the market value of the Permitted Collateral not less than weekly and notify the investment agreement provider on the valuation day of any deficiency. Permitted Collateral may be released by the Trustee to the provider only to the extent that there are excess amounts over the required levels. Market value, with respect to collateral, may be determined by any of the following methods:
i. the last quoted “bid” price as shown in Bloomberg, Interactive Data Systems, Inc., The Wall Street Journal, or Reuters;
ii. valuation as performed by a nationally recognized pricing service, whereby the valuation method is based on a composite average of various bid prices; or
iii. the lower of two (2) bid prices by nationally recognized dealers.
Such dealers or their parent holding companies shall be rated investment grade and shall be market makers in the securities being valued.
(h) Securities held as Permitted Collateral shall be free and clear of all liens and claims of third parties, held in a separate custodial account, and registered in the name of the Trustee or the Agent.
(i) The provider shall grant the Trustee or the Agent a perfected first security interest in any collateral delivered under an investment agreement. For investment agreements collateralized initially and in connection with the delivery of Permitted Collateral under clause 1 1 (f) above, the Trustee shall receive an opinion of counsel as to the perfection of the security interest in the collateral.
The investment agreement shall provide that moneys invested under the agreement must be payable and putable at par to the Trustee without condition, breakage fee, or other penalty, upon not more than two (2) Business Days’ notice, or immediately on demand for any reason for which the funds invested may be withdrawn from the applicable fund or account established under the authorizing document, as well as the following:
i. In the event of a deficiency in the debt service account; ii. Upon acceleration after an event of default;
iii. Upon refunding of the Bonds in whole or in part;
iv. Reduction of the Reserve Requirement for the Bonds; or 180
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v. If a determination is later made by a nationally recognized bond counsel that investments must be yield-restricted.
Notwithstanding the foregoing, the agreement may provide for a breakage fee or other penalty that is payable in arrears and not as a condition of a draw by the Trustee if the Authority’s obligation to pay such fee or penalty is subordinate to its obligation to pay debt service on the Bonds and to make deposits to the Reserve Fund. (j) The investment agreement shall establish the following as events of default, the occurrence of any of which shall require the immediate liquidation of the investment securities, unless:
i. Failure of the provider or the guarantor (if any) to make a payment when due or to deliver Permitted Collateral of the character, at the times, or in the amounts described above;
ii. Insolvency of the provider or the guarantor (if any) under the investment agreement;
iii. Failure by the provider to remedy any deficiency with respect to required Permitted Collateral;
iv. Failure by the provider to make a payment or observe any covenant under the agreement;
v. The guaranty (if any) is terminated, repudiated, or challenged; or vi. Any representation of warranty furnished to the Trustee or the Authority in connection with the agreement is false or misleading. (1) The investment agreement must incorporate the following general criteria:
i. “Cure periods” for payment default shall not exceed
two (2) Business Days;
ii. The agreement shall provide that the provider shall remain liable for any deficiency after application of the proceeds of the sale of any collateral, including costs and expenses incurred by the Trustee;
iii. If the investment agreement is for the Reserve Fund, reinvestments of funds shall be required to bear interest at a rate at least equal to the original contract rate;
iv. The provider shall be required to immediately notify the Trustee of any event of default or any suspension, withdrawal, or downgrade of the provider’s ratings; and
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v. The agreement shall be unconditional and shall
expressly disclaim any right of set-off or counterclaim. (12) Forward delivery agreements in which the securities delivered mature on or before each interest payment date (for debt service or debt service reserve funds) or draw down date (construction funds) that meet the following criteria:
(a) A specific written investment agreement governs the transaction. (b) Acceptable providers shall be limited to (i) any registered broker/dealer subject to the SIPC jurisdiction, if such broker/dealer or bank has an uninsured, unsecured, and unguaranteed obligation rated A3/P-1 or better by Moody’s and A-/A-1 or better by S&P; (ii) any commercial bank insured by the FDIC, if such bank has an uninsured, unsecured, and unguaranteed obligation rated A3/P-1 or, better by Moody’s and A-/A-1 or better by S&P; and (iii) domestic structured investment companies rated, or domestic structured investment companies with a guarantor rated, Aaa by Moody’s and AAA by S&P.
(c) The forward delivery agreement shall provide for termination or assignment (to a qualified provider hereunder) of the agreement if the provider’s ratings are suspended, withdrawn, or fall below A3 or P-1 from Moody’s or A- or A-1 from S&P. Within ten (10) days, the provider shall fulfill any obligations it may have with respect to shortfalls in market value. There shall be no breakage fee payable to the provider in such event. (d) Permitted securities shall include the investments listed in clauses 1, 2, and 3 above.
(e) The forward delivery agreement shall include the following provisions:
i. The permitted securities must mature at least one (1) Business Day before a debt service payment date or scheduled draw. The maturity amount of the permitted securities must equal or exceed the amount required to be in the applicable fund on the applicable valuation date.
ii. The agreement shall include market standard termination provisions, including the right to terminate for the provider’s failure to deliver qualifying securities or otherwise to perform under the agreement. There shall be no breakage fee or penalty payable to the provider in such event. iii. Any breakage fees shall be payable only on Interest Payment Dates and shall be subordinated to the payment of debt service fund and Reserve Fund replenishments.
iv. The provider must submit at closing a bankruptcy opinion to the effect that upon any bankruptcy, insolvency, or receivership of the provider, the securities will not be considered to be a part of the provider’s estate. 182
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(13) Forward delivery agreements in which the securities delivered mature after the funds may be required but provide for the right of the issuer or the Trustee to put the securities back to the provider under a put, guaranty, or other hedging arrangement. (14) Pre-refunded Municipal Obligations defined as follows: Any bonds or other obligations of the State of California or of any agency, instrumentality, or local governmental unit of the State of California which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice and which are rated, based on an irrevocable escrow account or fund, in the highest rating category of S&P and Moody’s.
(15) Shares in any money market mutual fund registered under the Investment Company Act of 1940 whose investment portfolio consists solely of direct obligations of the United States Government, provided that any such fund has been rated in the highest category by a nationally recognized rating agency and, provided further, that such mutual funds may include funds for which the Trustee or its affiliates or subsidiaries provide investment advisory or other management services.
(16) The Local Agency Investment Fund (“LAIF”).
(17) Maturity of investments shall be governed by the following:
(a) Investments of monies (other than reserve funds) shall be in securities and obligations maturing not later than the dates on which such monies will be needed to make payments.
(b) Investments shall be considered as maturing on the first date on which they are redeemable without penalty at the option of the holder or the date on which the Trustee may require their repurchase pursuant to repurchase agreements.
(c) Investments of monies in reserve funds not payable upon demand shall be restricted to maturities of five (5) years or less. 183
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ARTICLE I
DEFINITIONS; INTERPRETATION; EQUAL SECURITY
SECTION 1.01 Definitions .................................................................................................. 3 SECTION 1.02 Content of Certificates and Opinions ....................................................... 12 SECTION 1.03 Interpretation............................................................................................. 12 SECTION 1.04 Indenture Constitutes Contract ................................................................. 13
ARTICLE II
THE BONDS
SECTION 2.01 Authorization of Bonds............................................................................. 13 SECTION 2.02 Terms of the Bonds................................................................................... 13 SECTION 2.03 Transfer of Bonds ..................................................................................... 14 SECTION 2.04 Exchange of Bonds ................................................................................... 14 SECTION 2.05 Registration Books.................................................................................... 15 SECTION 2.06 Form and Execution of Bonds .................................................................. 15 SECTION 2.07 Temporary Bonds ..................................................................................... 15 SECTION 2.08 Bonds Mutilated, Lost, Destroyed, or Stolen ........................................... 15 SECTION 2.09 Book-Entry ............................................................................................... 16
ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS AND TRANSFERS FROM THE FISCAL AGENT; ACQUISITION OF ACQUIRED OBLIGATIONS
SECTION 3.01 Issuance of the Bonds ............................................................................... 17 SECTION 3.02 Application of Proceeds of the Bonds and Transfers from the Fiscal Agent..............................................................................................17 SECTION 3.03 Reserve Fund ............................................................................................ 18 SECTION 3.04 Expense Fund............................................................................................ 19 SECTION 3.05 Program Fund. .......................................................................................... 19 SECTION 3.06 Closing Documents................................................................................... 19 SECTION 3.07 Validity of Bonds...................................................................................... 20
ARTICLE IV
REDEMPTION OF BONDS
SECTION 4.01 Redemption............................................................................................... 20 SECTION 4.02 Selection of Bonds for Redemption.......................................................... 21 SECTION 4.03 Notice of Redemption............................................................................... 22 SECTION 4.04 Partial Redemption of Bonds.................................................................... 22 SECTION 4.05 Effect of Notice of Redemption................................................................ 23 184
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ARTICLE V
REVENUES; FUNDS AND ACCOUNTS OF PRINCIPAL AND INTEREST
SECTION 5.01 Pledge and Assignment; Revenue Fund. .................................................. 23 SECTION 5.02 Allocation of Revenues............................................................................. 24 SECTION 5.03 Application of Interest Account................................................................ 25 SECTION 5.04 Application of Principal Accounts............................................................ 25 SECTION 5.05 Application of Redemption Account ........................................................ 25 SECTION 5.06 Application of Residual Account.............................................................. 25 SECTION 5.07 Investment of Moneys .............................................................................. 26
ARTICLE VI
PARTICULAR COVENANTS
SECTION 6.01 Punctual Payment ..................................................................................... 27 SECTION 6.02 Extension of Payment of Bonds ............................................................... 27 SECTION 6.03 Against Encumbrances ............................................................................. 27 SECTION 6.04 Power to Issue Bonds and Make Pledge and Assignment........................ 27 SECTION 6.05 Accounting Records and Financial Statements ........................................ 27 SECTION 6.06 Waiver of Laws......................................................................................... 28 SECTION 6.07 [RESERVED]........................................................................................... 28 SECTION 6.08 Rebate Fund.............................................................................................. 28 SECTION 6.09 Federal Tax Covenants ............................................................................. 29 SECTION 6.10 Collection of Revenues Under Acquired Obligations .............................. 30 SECTION 6.11 Disposition of Acquired Obligations........................................................ 30 SECTION 6.12 Further Assurances ................................................................................... 30
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS
SECTION 7.01 Events of Default ...................................................................................... 30 SECTION 7.02 Remedies Upon Event of Default ............................................................. 31 SECTION 7.03 Other Remedies of Bond Owners ............................................................. 31 SECTION 7.04 Application of Revenues and Other Funds After Default ........................ 31 SECTION 7.05 Trustee to Represent Bond Owners .......................................................... 32 SECTION 7.06 Bond Owners’ Direction of Proceedings.................................................. 33 SECTION 7.07 Limitation on Bond Owners’ Right to Sue............................................... 33 SECTION 7.08 Absolute Obligation of Authority............................................................. 33 SECTION 7.09 Termination of Proceeding ....................................................................... 33 SECTION 7.10 Remedies Not Exclusive........................................................................... 34 SECTION 7.11 No Waiver of Default ............................................................................... 34 185
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ARTICLE VIII
THE TRUSTEE
SECTION 8.01 Duties and Liabilities of Trustee............................................................... 34 SECTION 8.02 Merger or Consolidation........................................................................... 36 SECTION 8.03 Liability of Trustee. .................................................................................. 36 SECTION 8.04 Right to Rely on Documents..................................................................... 37 SECTION 8.05 Preservation and Inspection of Documents .............................................. 37 SECTION 8.06 Compensation and Indemnification.......................................................... 38
ARTICLE IX
MODIFICATION OR AMENDMENT OF INDENTURE
SECTION 9.01 Amendments Permitted. ........................................................................... 38 SECTION 9.02 Effect of Supplemental Indenture............................................................. 39 SECTION 9.03 Endorsement of Bonds; Preparation of New Bonds ................................. 39
ARTICLE X
DEFEASANCE
SECTION 10.01 Discharge of Indenture ............................................................................. 40 SECTION 10.02 Discharge of Liability on Bonds............................................................... 40 SECTION 10.03 Deposit of Money or Securities with Trustee ........................................... 41 SECTION 10.04 Payment of Bonds After Discharge of Indenture ..................................... 41
ARTICLE XI
MISCELLANEOUS
SECTION 11.01 Liability of Authority Limited to Revenues ............................................. 42 SECTION 11.02 Successor Is Deemed Included in All References to Predecessor............ 42 SECTION 11.03 Limitation of Rights to Parties and Bond Owners.................................... 42 SECTION 11.04 Waiver of Notice; Requirement of Mailed Notice ................................... 42 SECTION 11.05 Destruction of Bonds ................................................................................ 42 SECTION 11.06 Severability of Invalid Provisions ............................................................ 42 SECTION 11.07 Notices ...................................................................................................... 43 SECTION 11.08 Evidence of Rights of Bond Owners ........................................................ 43 SECTION 11.09 Disqualified Bonds ................................................................................... 44 SECTION 11.10 Money Held for Particular Bonds............................................................. 44 SECTION 11.11 Funds and Accounts.................................................................................. 44 SECTION 11.12 Payment on Non-Business Days............................................................... 44 SECTION 11.13 Waiver of Personal Liability..................................................................... 44 SECTION 11.14 Execution in Several Counterparts ........................................................... 45 SECTION 11.15 Governing Laws........................................................................................ 45 186
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EXHIBIT A – FORM OF SERIES A BOND............................................................................A-1 EXHIBIT B – PERMITTED INVESTMENTS .........................................................................B-1 187
60302.00021\35017946.2
BOARD OF DIRECTORS OF
THE CITY OF OXNARD FINANCING AUTHORITY
RESOLUTION NO. ______
RESOLUTION OF THE BOARD OF DIRECTORS OF CITY OF OXNARD FINANCING
AUTHORITY AUTHORIZING THE SALE, ISSUANCE, AND DELIVERY OF NOT MORE THAN $19,200,000 IN PRINCIPAL AMOUNT OF ITS 2022 LOCAL OBLIGATION
REVENUE REFUNDING BONDS (SPECIAL DISTRICT BOND) AND APPROVING
CERTAIN DOCUMENTS AND AUTHORIZING CERTAIN ACTIONS IN CONNECTION
THEREWITH
WHEREAS, the City of Oxnard Financing Authority, a joint exercise of powers authority duly organized and existing under the laws of the State of California (the "Authority"), has the authority, among other things, pursuant to the Marks-Roos Local Bond Pooling Act of 1985 (Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California) (the "Act"), to incur indebtedness for the purpose of financing and refinancing capital projects of the City; and WHEREAS, the Authority issued its $19,505,000 City of Oxnard Public Financing Authority Local Obligation Revenue Bonds (2012 Special District Bond Refinancings), Series A Senior Lien Bonds (the “Series 2012A Bonds”), and its $9,060,000 City of Oxnard Financing Authority Local Obligation Revenue Bonds (2012 Special District Bond Refinancings), Series B Subordinate Lien Bonds (the “Series 2012B Bonds”, and together with the Series 2012A Bonds, the “Series 2012 Bonds,” for the purpose of acquiring (i) the $11,835,000 City of Oxnard Assessment District No. 2001-1 (Rice Avenue/Highway 101 Interchange) Limited Obligation Improvement Refunding Bonds, Series 2012 (the "AD Bonds"), (ii) the $8,750,000 Community Facilities District No. 1 (Westport at Mandalay Bay) of the City of Oxnard 2012 Special Tax Refunding Bonds (the "CFD No. 1 Bonds"), and (iii) the $7,980,000 City of Oxnard Community Facilities District No. 2000-3 (Oxnard Boulevard/Highway 101 Interchange) Special Tax Refunding Bonds, Series 2012 (the "CFD No. 2000-3 Bonds" and, together with the AD Bonds and the CFD No. 1 Bonds, the "Acquired Obligations") issued by the City, CFD No. 1, and CFD No. 2000-3, respectively, to refund certain Assessment District, CFD No. 1, and CFD No. 2000- 3 bond issues, the Authority has determined to issue its 2022 Local Obligation Revenue Refunding Bonds (Special District Bond) (the "Bonds"); and WHEREAS, the Board of Directors of the Authority (this "Board") has determined that the issuance of the Bonds pursuant to the Act does not require approval of the qualified electors of the City; and
WHEREAS, the Authority proposes to enter into an Indenture of Trust (the "Indenture") by and between the Authority and Computershare Trust Company, N.A., as trustee (the "Trustee"), to provide for the issuance of the Bonds; and WHEREAS, each series of Acquired Obligations was issued pursuant to a separate Fiscal Agent Agreement, each dated as of August 1, 2012 by and between the City and respective CFD and Computershare Trust Company, N.A., as successor in interest to Wells Fargo Bank, N.A. 188
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Finance Authority Resolution No. __