The Partnership Representative shall, upon request by a Member, permit a Member to include it s attorney in the power of attorney (Form 2848) for the Company for any taxable years under a tax audit or in a tax administrative appeals process, provided, that the inclusion is permitted by the Revised Partnership Audit Rules.
The Partnership Representa tive shall not without the Consent of the Members:
extend the statute of limitations for assessing or computing any tax liability against the Company (or the amount of character of any Company tax items); settle any audit with the IRS concerning the adjust ment or readjustment of any partnership items or remit any imputed underpayment amounts (within the meaning of the Revised Partnership Audit Rules); file a request for an administrative adjustment with the IRS at any time or file a petition for judicial review with respect to any such request; initiate or settle any judicial review or action concerning the amount or character of any Company tax item;
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intervene in any action brought by any other Member for judicial review of a final adjustment;
take any other action which would have the effect of finally resolving a tax matter affecting the rights of the Company and/or the Members; take any action or fail to take any action which adversely affects the amount or timing of recognition of the Historic Tax Credits; engage an accounting firm or counsel to represent the Company before the IRS; or
take any other action not expressly permitted by this Article XI on behalf of the Company or any Member in connection with any adjustment, election, or administrative or judicial tax proceeding.
The Partnership Representative shall keep the other Members advised of any dispute the Company may have with any federal, state or local taxing authority (a “Tax Dispute”), shall consult with the Members regarding the nature and content of all actions to be taken and defenses to be raised and elections to be made by the Company in response to such Tax Dispute, shall not act with out the Consent of the Members as required under this Section, and shall afford the other Members the opportunity to participate directly in the negotiation of the Tax Dispute, to the extent permitted by law. The Partnership Representative also shall consult with Members regarding the nature and content of any Tax Dispute instituted by or on behalf of the Company (including the decision to institute proceedings, whether administrative or judicial, and whether in response to a previous Tax Dispute against the Company, or otherwise), and shall not act without the Consent of the Members as required under this Section. Reasonable legal fees incurred in connection with any Tax Dispute (including any Tax Dispute arising at the Investor Member level, to the extent that such Tax Dispute is the result of a Tax Dispute of the Company and is not a Cost of Challenge) shall be paid solely from the assets of the Company, except that if the Company lacks sufficient funds to undertake or prosecute any litigation relating to such Tax Dispute (including, without limitation, any appeal) and either the Managing Member or Investor Member in good faith does not reasonably consent to a settlement or resolution of such tax dispute, then the legal fees and other costs and expenses associated with such litigation shall be funded by the Member(s) refusing to consent to such settlement or resolution, through one or more Subordinated Loans to the Company.
If the Company or the Partnership Representative receives notice of a proposed Company Adjustment from the IRS, the Partnership Representative shall so notify the Members in accordance with the provisions of Section 11.08(a)(i) and, if requested to do so by a Member, shall request modification of the Imputed Underpayment proposed in such notice in accordance with the Revised Partnership Audit Rules. Any such request by a Member shall describe the modifications or adjustment factors that the Member believes affect the calculation of the Imputed Underpayment in sufficient detail to substantiate the request for modification. All information required to support a requested modification shall 1M - Page 252
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be submitted by the Members to the Partnership Representative prior to the applicable deadline, subject to any extension granted by the IRS.
If the Company receives notice of a final Company Adjustment from the IRS, the Partnership Representative shall so notify the Members and Reviewed Year Members in accordance with the provisions of Section 11.08(a)(i) and, solely if requested to do so by Investor Member, shall make an election (a “Push-Out Election”) under Section 6226 of the Code with respect to one or more Imputed Underpayments set forth in the final partnership adjustment notice. If a Push-Out Election is made, each Reviewed Year Member shall take into account its allocable share of the Company Adjustments that relate to the specified Imputed Underpayment (as determined with the Consent of the Investor Member for such Reviewed Year) and shall be liable for any taxes as described in Section 6226 of the Code and any applicable Treasury Regulations or other guidance prescribed by the IRS.
Notwithstanding the foregoing, to the extent permitted by law, any Reviewed Year Member that is a partnership or S corporation may, at its option and in accordance w ith any applicable Treasury Regulations or other guidance prescribed by the IRS, elect (in lieu of paying its allocable share of such Company Adjustments) to push out the liability for taxes attributable to such Company Adjustments to its partners (including indirect partners). Any Push-Out Election shall be filed prior to the applicable deadline, shall be in such form, and shall contain such information, as required by the Revised Partnership Audit Rules. If a Push-Out Election is made, the Partnership Representative shall furnish to each Reviewed Year Member and the IRS, for each Reviewed Year prior to the applicable deadline, a statement that includes all items and information required under the Revised Partnership Audit Rules.
If the Company becomes obligated to make an Imputed Underpayment, within thirty (30) days after written notice from the Partnership Representative:
To the extent such Imputed Underpayment relates to an Excluded Event, each of the Members (including any Former Member) to whom such liability relates shall be obligated to pay an amount that is equal to its allocable share (determined in accordance with its Percentage Interest prior to the Adjustment Year) of such Imputed Underpayment to the Company;
To the extent such Imputed Underpay ment relates to a Manager Breach, the Managing Member shall be obligated to pay an amount that is equal to such Imputed Underpayment to the Company; and
Otherwise, each of the Members (including any Former Member) to whom such liability relates shall be obligated shall make a Subordinated Loan to the Company in an amount that is equal to its allocable share of such Imputed Underpayment to the Company.
Any amount not paid by a Member (or Former Member) within such thirty (30) day period shall accrue interest at the rate of two percent (2%) over the Designated Prime Rate in effect at the end of the preceding calendar month, until paid in full. Any such payment made by any Member pursuant to Section 11.08(g)(i) or (ii) shall be treated as a Capital Contribution and, if and to the 1M - Page 253
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extent permitted by the Code and the Treasury Regulations, any Capital Account reduction attributable to the Imputed Underpayment shall be allocated to the Members in proportion to such Capital Contributions. Any such payment made by any Former Member pursuant to Section
11.08(g)(i) or (ii) shall be treated as an indemnity payment and not as a Capital Contribution or loan to the Company, but any payment made pursuant to Section 11.08(g)(iii) shall be treated as a loan to the Company and subject to repayment pursuant to Section 11.01 or 11.04 as if it were still a Member.
(h) The obligations of each Member or Former Member under Sections 11.07 and
11.08 shall survive the transfer, redemption or liquidation by such Member of its Company Interest and the termination of this Agreement or the dissolution of the Company. For the avoidance of doubt, to the extent a Former Member has potential liability for amounts pursuant to Section
11.08(f) or (g) with respect to a Tax Dispute, such Former Member shall retain its rights pursuant Sections 11.07 and 11.08 to with respect to such Tax Dispute.
Expenses of Partnership Representative.
The Company shall indemnify and reimburse the Partnership Representative and the Investor Member for all expenses, including legal and accounting fees, claims, liabilities, losses and damages incurred in connection with any administrative or judicial proceeding with respect to the tax liabilities of the Members or Company. The payment of all such expenses shall be made before any distributions are made from Net Cash Flow, net proceeds from a Capital Transaction or any discretionary reserves are set aside by the Managing Member. The taking of any action and the incurring of any expense by the Partnership Representative in connection with any such proceeding, except to the extent required by law, is a matter in the sole discretion of the Partnership Representative and the provisions on limitations of liability of the Managing Member and indemnification set forth in Section 8.07 or 10.02 of this Agreement shall be fully applicable to the Partnership Representative in its capacity as such.
Special Allocations.
Notwithstanding any other provision of this Agreement, if there is a net decrease in the Company’s minimum gain attributable to nonrecourse liabilities during any taxable year, each Member shall be specifically allocated a pro rata portion of each of the Company’s items of income and gain for such year (and, if necessary for subsequent years) in proportion to, and to the extent of, an amount equal to such Member’s share of the net decrease in such minimum gain during such taxable year as determined in accordance with the provisions of Treasury Reg. §§ 1.704-2(f), 1.704-2(g)(2).
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respect to a Member nonrecourse debt, the Member bearing the economic risk of loss with respect to such Member nonrecourse debt shall be specially allocated a pro rata portion of each of the Company’s items of income and gain for such taxable year (and, if necessary, for subsequent years) in proportion to, and to the extent of the amount of such Member’s share of the net decrease in such minimum gain during such taxable year as determined in accordance with the provisions of Treasury Reg. §§1.704-2(i)(4), 1.704-2(j)(2))(ii).
If in any taxable year there is a net increase in the amount of Company minimum gain attributable to a Member nonrecourse debt, the Member bearing the economic risk of loss attributable to such Member nonrecourse debt shall be specially allocated items of Company deduction and loss in proportion to and to the extent of the excess of:
the amount of such net increase, over
the aggregate amount of any distributions during such taxable year to such Member of the proceeds of such Member nonrecourse debt that are allocable to such increase in Company minimum gain. Items to be so allocated shall be determined in accordance with Treasury Reg. §1.704-2(j)(l).
The allocations provided for in this Section 11.10(c) are intended to comply with the allocations required by Treasury Reg. §1.704-2(i) and shall be applied consistently therewith. The Company’s minimum gain shall be determined in accordance with Treasury Reg. § 1.704-2(d).
In the event any Member unexpectedly recei ves any adjustments, allocations or distributions described in Treasury Reg. §§1.704 -1(b)(2)(ii)(d)(4), (5) or (6) which cause or increase an Adjusted Capital Account Deficit (as defined below) of such Member, items of Company income and gain shall be specially allocated to each such Member in an amount and manner sufficient to eliminate (to the extent required by the Treasury Regulations under Code Section 704(b)) such Member’s Adjusted Capital Account Deficit as quickly as possible.
For purposes of this Section 11.10, the term “Adjusted Capital Account Deficit” means, with respect to any Member, the deficit balance, if any, in such Member’s Capital Account as of the end of the relevant Company Fiscal Year, after giving effect to the following adjustments:
Credit to such Capital Account any amounts which such Member is obligated to restore pursuant to any provision of this Agreement or is otherwise treated as being obligated to restore under Treasury Reg. §1.704 -1(b)(2)(ii)(c) or is deemed to be obligated t o restore pursuant to the penultimate sentence of Treasury Reg. §§1.704-2(g)(1) and 1.704-2(i)(5); and
Debit to such Capital Account the items described in Treasury Reg. §1.704-1(b)(2)(ii)(d)(4), (5) and (6).
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The foregoing definition of Adjusted Capital Ac count Deficit is intended to comply with the provisions of Treasury Reg. §1.704- 1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
Notwithstanding any other provision of this Section 11.10, in no event shall Losses of the Company be allocated to Investor Member if such allocation would result in such Member having an Adjusted Capital Account Deficit at the end of any taxable year. All Losses in excess of the limitation set forth in this Section 11.10(e) shall be allocated to each other Member that does not have an Adjusted Capital Account Deficit.
In the event that income, loss or items thereof are allocated to one or more Members pursuant to Sections 11.10(a), (b), (c), (d) or (e), subsequent income, loss or items thereof shall be allocated (subject to the provisions of Section 11.10(a), (b), (c), (d) or (e)) to the Members so that, to the extent possible in the judgment of the Managing Member and permitted by Treasury Regulations, the net amount of allocations shall be equal to the amount that would have been allocated had Section 11.10 not been applied.
Any taxable income of the Company resulting from its receipt of debt forgiveness, donations, grants, subsidies or other similar items shall be allocated 100% to the Managing Member.
SALE, DISSOLUTION AND LIQUIDATION
Dissolution of the Company. The Company shall be dissolved upon :
the sale or other disposition of all or substantially all of the assets of the Company;
any other event causing the involuntary dissolution of the Company under the laws of the Formation State;
the agreement of the Investor Member and the Managing Member; or at the election of the Investor Member, solely following the occurrence of either (i) the failure of the Managing Member (or Guarantor on its behalf) to pay the Investor Member, following written demand from the Investor Member, the Investor Member Put Price or (ii) the failure of the Managing Member (or Guarantor on its behalf) to pay the Damages Payment following written demand from the Investor Member Winding Up and Distribution.
Upon the dissolution of the Company pursuant to Section 12.01, (i) a Certificate of Dissolution shall be filed in such offices within the Formation State as may be required or appropriate, and (ii) the Company business shall be wound up and its assets 1M - Page 256
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liquidated as provided in this Section 12.02 and the net proceeds of such liquidation shall be distributed in accordance with Section 12.02(b).
It is the intent of the Members that, upon liquidation of the Company, any liquidation proceeds available for distribution to the Members shall be distributed in accordance with the Member’s respective Capital Account balance. In the event that, upon liquidation, there is any conflict between a distribution pursuant to the Member’s Capital Account balance and the intent of the Members with respect to distribution of proceeds under Section 11.04, the Liquidator shall, notwithstanding the provisions of Sections 11.01,
11.02 and 11.03, allocate the Company’s Profits or Losses in a manner that will cause the distribution of liquidation proceeds to the Members to be in accordance with the Members’ respective Capital Account balances.
The Liquidator shall file all certificates and notices of the dissolution of the Company required by law. The Liquidator shall proceed without any unnecessary delay to sell and otherwise liquidate the Company’s property and assets; provided, however, that if the Liquidator shall determine that an immediate sale of part or all of the Company property would cause undue loss to the Members, then in order to avoid such loss, the Liquidator may, except to the extent provided by the Act, defer the liquidation as may be necessary to satisfy the debts and liabilities of the Company to Persons other than the Members. Upon the complete liquidation and distribution of the Company assets, the Investor Member shall cease to be the investor member of the Company and the Managing Member shall cease to be managing member, and the Liquidator shall execute, acknowledge and cause to be filed all certificates and notices required by the law to terminate the Company.
Upon the dissolution of the Company pursuant to Section 12.01, the accountants for the Company shall promptly prepare, and the Liquidator shall furnish to each Member, a statement setting forth the assets and liabilities of the Company upon its dissolution. Promptly following the complete liquidation and distribution of the Company property and assets, the Company accountants shall prepare, and the Liquidator shall furnish to each Member, a statement showing the manner in which the Company assets were liquidated and distributed.
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BOOKS AND RECORDS, ACCOUNTING TAX ELECTIONS, ETC.
Books and Records; Accounting Method. The Managing Member shall maintain the books and records of the Company on an accrual basis in accordance with generally - accepted accounting principles (“GAAP”) consistently applied, and retained for such period required by law or if longer, such period recommended by the Accountants. These and all other records and financial statements of the Company, including information relating to the status of the Property and information with respect to the sale by any Developer Entity of goods or services to the Company, shall be kept at the principal office of the Company and shall be available for examination there by any Member or by any member of the Investor Member, or its duly authorized representative, at any and all reasonable times. Any Member, or its duly authorized representative, upon paying the costs of collection, duplication and mailing, shall be entitled to a copy of the list of names and addresses of Investor Member. The Managing Member agrees to cooperate with the Investor Member to provide inf ormation in a timely manner to facilitate audits conducted by independent auditors selected by the Investor Member in its sole discretion.
Bank Accounts. All funds of the Company not othe rwise invested shall be deposited in one or more federally insured accounts maintained with [________________], and withdrawals shall be made only in the regular course of Company business on such signature or signatures as the Managing Member may, from ti me to time, determine, except for withdrawals from Reserves, which shall be made in accordance with Section 8.13. No funds of the Company shall be deposited in any financial institution in which any Developer Entity is an officer, director or holder of a propriety interest.
Accountants. With the Consent of the Investor Member, the Managing Member shall hire the Accountants and provide them with such information in its possession and sign such documents as are necessary for the Company to make timely, accurate and complete submissions of federal and state income tax returns (and in all events such returns shall be filed with respect to the year of the Investor Member’s admission to the Company and each year thereafter). The Accountants shall be the accountants for the Company for the purposes of preparing income tax returns, the audit of the Company and the other relevant matters set forth in this Article XIII. The Managing Member and the Co mpany hereby agree, authorize and direct the Accountants to provide contemporaneous copies to the Investor Member of all tax returns, audits and any other information that the Accountants deliver to the Managing Member or to the Company.
Prior to the end of each Company Fiscal Year, the Managing Member shall (i) engage the Accountants to prepare tax returns and audits for such Company Fiscal Year and (ii) deliver evidence in such form as shall be reasonably acceptable to Investor Member that the Accountants have been so retained. If the selected accountants fail to timely deliver any tax returns (including K-1s) or audited financial statements required to be delivered pursuant to this Agreement, then Investor Member shall have the right upon delivery of written notice to the Managing Member to require the Managing Member to replace the Accountant with alternate independent certified public accountants selected by Investor Member, from time 1M - Page 258
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to time, that shall prepare all future tax returns and audited financial statements for the Company.
The Accountants shall annually prepare for execution by the Managing Member any tax returns of the Company, and shall certify, in accordance with GAAP consistently applied, a balance sheet, a profits and losses statement, a cash flow statement, and a statement calculating Net Cash Flow. The Accountants shall annually audit the books of the Company. With respect to each Company Fiscal Year during the Company’s operations, at such time as the Accountants shall have prepared the proposed tax return for such year, the Accountants shall provide copies of such proposed tax return to the Investor Member and its accountants for their review and comment.
Any changes in such proposed tax return recommended by the Investor Member’s accountants shall be made by the Accountants prior to the completion of such tax return for execution by the Managing Member. A full detailed statement shall be furnished to all Members, showing such assets, properties, and net worth and the profits and losses of the Company for the preceding Company Fiscal Year. All Members shall have the right and power to examine and copy, at any and all reasonable times, the books, records and accounts of the Company.
Reports to Members.
The Managing Member shall, at Company expense, cause to be prepared and delivered to the Investor Member all such reports requested by the Investor Member as shall be necessary for the Investor Member to comply with its Historic Tax Credit requirements in connection with the Company and all report and information contained in Exhibit E attached hereto and made a part hereof.
In the event that the reports or information provided for in Section 13.04(a) above are, at any time, not provided within the time period(s) specified, the Managing Member shall be obligated to pay to the Investor Member the sum of $200 per day beginning on the date of delinquency (if upon written notice the Managing Member fails to cure with 10 days), as liquidated damages, for each day from the date upon which such reports or information is (are) due pursuant to the provisions of the aforesaid Sections until the date upon which such reports or information is (are) provided.
Each party hereby agrees and acknowledges that the Investor Member may share with any of its Affiliates any information provided to the Investor Member relating to the Company, the Project, the Managing Member, HTC Landlord, or the Guarantor (or any Affiliates thereof), but only to the extent commercially reasonable and necessary with respect to its investment in the Company. The Investor Member is also authorized to disclose the terms and nature of its investment in the Company to the Investor Member’s auditors, attorneys, accountants and regulators, but only to the extent commercially reasonable and necessary, and as otherwise required by applicable law. 1M - Page 259
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Section 754 Elections. In the event of a transfer of all or any part of the Interest of a Managing Member or of an Investor Member (or a member or partner thereof), the Company shall elect, pursuant to Sections 743 and 754 of the Code (or any corresponding provision of succeeding law), to adjust th e basis of the Company property if, in the opinion of the Investor Member, based upon the advice of the Accountants, such election would be most advantageous to the Investor Member. Each Member agrees to furnish the Company with all information necessary to give effect to such election. The Managing Member shall not make other elections required or permitted under the Code unless it has received the direction or prior Consent of the Investor Member.
Pursuant to the HTC Lease, the Company shall cause HTC L andlord to make an election to be treated as an “electing real property trade or business” under Section 163(j)(7)(B) of the Code and provide evidence of making such election effective no later than the end of the taxable year ending December 31, 2025. Except as expressly provided in this Agreement, the Company has not made and will not make any elections under the Code, including pursuant to Tax Reform Act or the Treasury Regulations thereunder, without the Consent of the Investor Member. Pursuant to the HTC Lease, the Company shall cause HTC Landlord to file an election to opt -out of bonus depreciation that is otherwise available with respect to property which is part of the Project pursuant to Section 168(k) of the Code.
Company Fiscal Year. Except as the Code may otherwise require, Company Fiscal Year shall be the fiscal year of the Investor Member. The fiscal year of the Investor Member is currently the calendar year. The Investor Member will inform the Managing Member of any change in its fiscal year.
Investor Member Inspection. The Investor Member shall have the right to physically inspect the interior and exterior of the Property and the Company’s books, records and any sublease documents during normal business hours with reasonable advance notice. The Managing Member shall correct any deficiencies of which it received written notice from the Investor Member to the Investor Member’s reasonable satisfaction within thirty (30) days from receipt of written notice.
Communications. The Managing Member agrees to cooperate with the Inv estor Member by providing such other incidental information as may be reasonably requested by the Investor Member for purposes of its communications and publicity regarding the Property, provided, that the failure to provide information under this Section shall not result in the imposition of any penalties on the Managing Member. 1M - Page 260
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INVESTOR MEMBER OPTION
Option.
Notwithstanding any other provision of this Agreement to the contrary, from and after the first day following each of (a) the expiration of the Recapture Period and (b) the Flip Date (each such date being referred to herein as an “Investor Member Put Option Commencement Date”), the Investor Member shall have the right and option to require the Managing Member to purchase all (but not less than all) of its Interest (the “ Investor Member Put”). The Managing Member shall deliver Notice to Investor Member, within ten (10) Business Days of each Investor Member Put Option Commencement Date, advising the Investor Member of the availability of the Investor Member Put (the “ Put Availability Notice”); provided, that, whether or not the Managing Member gives the Put Availability Notice, the Investor Member shall have the right to exercise this option at any time from and after the Investor Member Put Option Commencement Date and continuing until the first to occur of (i) the date that is one hundred eighty (180) calendar days from the date of delivery of each Put Availability Notice and (ii) the date that is the fifth (5 th) anniversary of
the later of the two Investor Member Put Option Commencement Dates (the “Put Exercise Period”), by delivery of Notice of exercise to the Managing Member. If the Investor Member Put is exercised, the Investor Member shall be obligated to sell, and the Managing Member shall be obligated to purchase, all of the Interest then owned by the Investor Member. In addition, the Managing Member shall provide reasonably satisfactory evidence to the Investor Member of payment in full of the Development Fee and if the Development Fee has not been fully paid, the Managing Member shall cause the Development Fee to be paid in full prior to the conveyance of the Interest by the Investor Member.
The purchase price for such Interest shall be the lesser of (i) the fair market, appraised value of such Interest (as determined by an appraisal of an independent appraiser having not less than 5 years’ experience appraising similar property in the state in which the Project is situate d, and reasonably acceptable to the parties, said appraisal to be as of the last day of the month preceding the month within which the Investor Member Put is exercised), and (ii) sum of (A) five percent (5%) of the aggregate amount of Investor Member’s Capital Contributions which have been actually paid as of the date the Investor Member Put is exercised, plus (B) an amount equal to the Investor Member’s state and local transfer taxes in connection with the Investor Member Put transaction, as reasonably determined by the Investor Member, plus (C) the amount of all outstanding and unpaid Credit Recovery Adjustments and any other amounts payable to the Investor Member under this Agreement, including, without limitation, any accrued and unpaid Special Tax Distributions and Priority Return payments (the “Investor Member Put Price”). In addition to the payment of the Investor Member Put Price, Managing Member shall cause the Company to make a special distribution out of Net Cash Flow to Investor Member on the Investor Member Put Closing Date equal to the amount of Priority Return and Special Tax Distribution due to Investor Member as of such date (calculated as if the year ended as of the Investor Member Put Closing Date using the interim closing of the books method) to the 1M - Page 261
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extent not already included within the Investor Member Put Price. In all events, the exercise of the Investor Member Put under this Section 14.01 shall not relieve the Company, Managing Member, or any Guarantor of any obligation to pay amounts already due and owing to the Investor Member hereunder and the Investor Member may require payment in full of all such amounts in addition to the Investor Member Put Price.
A determination of the fair market value of the Investor Member’s Interest in the Company may take into account only those contracts or other arrangements creating rights or obligations that meet the requirements of Section 4.02(2)(c) of the Revenue Procedure and that are on arm’s length terms. Unless otherwise agreed to by Investor Member, Managing Member shall procure and pay for a valuation of the interest of the Investor Member, which valuation shall in be form and content reasonably satisfactory to the Investor Member. The Investor Member Put Price for such Interest shall be paid b y the Managing Member to the Investor Member in cash on the Investor Member Put Closing Date, at which time the Investor Member will execute an amendment to this Agreement withdrawing as a Member, in form and substance reasonably acceptable to the Managing Member. The Investor Member shall represent that the Interest is 100% of the outstanding investor member interest in the Company and that the Interest has not been transferred or assigned prior to the Investor Member Put Closing Date. The date of the Investor Member Put closing (the “Investor Member Put Closing Date”) will be the sixty (60) calendar days following the notice of exercise of the Investor Member Put, or such earlier date as the parties shall agree in writing. Managing Member agrees to pay al l of Investor Member’s reasonable attorneys’ fees and expenses in connection with the transactions contemplated under this Article XIV.
Optional Capital Contribution . At a ny time following the end of the Recapture Period, if the Flip Date has not occurred, Managing Member may make a Capital Contribution to the Company sufficient to cause the occurrence of the Flip Date if such amount were then distributed to Investor Member, which Capital Contribution will then be distributed to Investor Member.
AMENDMENTS
Proposal and Adoption of Amendments.
This Agreement may be amended by the written consent of all of the Members.
The Company shall bear the expense, including attorneys’ fees and filing expenses, of amendments to this Agreement, provided, however, that if the Company does not have sufficient Operating Income to bear such expenses t he party proposing an amendment to this Agreement shall bear the expenses thereof.
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CONSENTS, VOTING AND MEETINGS
Method of Giving Consent. Any Consent required by this Agreement may be given by a written Consent of the consenting Member and received by the Managing Member at or prior to the doing of the act or thing for which the Consent is solicited. The Member requesting Consent shall reimburse the consenting Member for reasonable legal or accounting costs incurred by it in connection with the matter requiring Consent.
Submissions to Investor Member. The Managing Member shall give the Investor Member Notice of any proposal or other matter required by any provision of this Agreement or by law to be submitted for consideration and approval of such Investor Member. Such Notice shall include any information required by the relevant provision or by law. 1M - Page 263
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GENERAL PROVISIONS
Burden and Benefit. The covenants and agreements contained herein shall be binding upon and inure to the benefit of the heirs, executors, administrators, successors and assigns of the respective parties hereto.
Applicable Law. This Agreement shall be construed and enforced in accordance with the laws of Formation State.
Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by telecopier, facsimile machine, portable document format (“PDF”), Electronic Signature (as defined below) or other electronic means shall be as effective as delivery of a manually executed counterpart of this Agreement. The effectiveness of any such documents and signatures shall, subject to applicable laws, have the same force and effect as manually signed originals and shall be binding on the parties. No party may raise the use of a telecopier, facsimile machine, PDF or other electronic means, or the fact that any signature was transmitted through the use of a telecopier, facsimile machine, PDF or other electronic means, as a defense to the enforcement of this Agreement. “Electronic Signature” means any symbol or process attached to a document or instrument and executed or adopted by a person with the intent to sign the document or instrument, including, without limitation, any digital representation of a party’s signature created by scanning such party’s signature or by any electronic signature service such as DocuSign.
Separability of Provisions. Each provision of this Agr eement shall be considered separable and if for any reason any provision which is not essential to the effectuation of the basic purposes of this Agreement is determined to be invalid and contrary to any existing or future law, such invalidity shall not impair the operation of or affect those provisions of this Agreement which are valid.
Entire Agreement. This Agreement and the documents referred to herein set forth all (and is intended by all parties to be an integration of all) of the representations, promises, agreements and understandings among the parties hereto with respect to the Company, the Company business and the property of the Company, and there are no representations, promises, agreements or understandings, oral or written, express or implied, among them other than as set forth or incorporated herein or therein.
Liability of the Investor Member . Notwithstanding anything to the contrary contained herein, neither the Investor Member nor any of its partners, general or limited, or members shall have any personal liability to any of the parties to this Agreement with regard to the representati ons and covenants extended, or the obligations undertaken, by the Investor Member under this Agreement. In the event that the Investor Member shall be in default under any of the terms of this Agreement, the sole recourse of any party hereto for any indebtedness due hereunder, or for any damages resulting from any such default by the Investor Member, shall be against the capital contributions of the Investor Member to, and remaining for investment in, the Company; provided, however, that under no circumstances 1M - Page 264
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shall the liability of the Investor Member for any such default be in excess of the amount of the Investor Member’s Capital Contribution that is unpaid at the time of such default.
Notices.
Any and all notices, consents, approvals and other communications required or permitted under this Agreement shall be deemed adequately given only if in writing delivered either (i) in hand, by mail or by expedited commercial carrier which provides evidence of delivery or refusal, addressed to the recipient, postage prepaid and certified or registered with return receipt requested, if by mail, or with all freight charges prepaid, if by commercial carrier, or (ii) via electronic mail but solely if (x) the sender of the notice includes a disclaimer at the top of the electronic mail notice stating in bolded font “Any response to this e -mail will constitute an acknowledgement of receipt of this message” , (y) the notice party receiving the written notice has provided an e-mail address in Section 17.07(b), and (z) such notice party responds to such notice via electronic mail in any manner other than an automated response, provided, that (1) such acknowledgement will not, alone, constitute any consent or other affirmation with respect to the content of the electronic mail notice, and (2) if the notice party receiving an electronic mail notice has included more than one recipient or copy recipient, then an acknowledgement from one such recipient shall be considered acceptance of the written notice without regard to any other recipients.
All notices and other communications shall be deemed to have been given for all purposes of this Agreement upon the date of receipt or refusal, or if sent via electronic mail, the date of the acknowledgement described in Section 17.07(a)(ii). All such notices and other communications shall be addressed to the Members at their respective addresses set forth below or at such other addresses as any of them may designate by notice to the other Members. Upon a transfer of any Investor Member’s Interest pursuant to Section 9.02 hereof, the Managing Member shall cause the Company to provide updated notice names and addresses of any Substitute Investor Member to HTC Landlord in accordance with the HTC Landlord Operating Agreement.
Any Notice required by the provisions of this Agreement to be given to the Investor Member shall be addressed as follows:
Stetson Investments Fund LLC
c/o National Trust Community Investment Corporation
1155 15th Street NW, Suite 300
Washington, DC 20005
Attention: Bret Mosher
Email: [email protected]
With copy to:
Riemer & Braunstein LLP
100 Cambridge Street, 22
nd Floor
Boston, MA 02114
Attention: Jeffrey D. Gaulin
1M - Page 265
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HTC Tenant Operating Agreement
Email: [email protected]
Any Notice required by the provisions of this Agreement to be given to the Company or the Managing Member shall be addressed as follows:
Palm Springs Plaza Theatre Master Tenant, LLC
3200 E. Tahquitz Canyon Way
Palm Springs, CA 92263-2743
Attention: Director of Finance and Treasurer
Email:
with a copy to:
Best Best & Kreiger LLP
3390 University Ave, 5th Floor
Riverside, CA 92501
Attention: John Rottschaefer
Email: [email protected]
Legal Fees. All legal fees incurred by Investor Member, including, without limitation, those in the preparation and/or amendment of this Agreement and all other Operating Documents (other than in connection with a transfer or assignment of the Interest or portion thereof not made pursuant to Section 14.01 hereof) and legal fees incurred by the Investor Member with respect to each Installment and/or any consent requested of the Investor Member, shall be paid or caused to be paid by the Managing Member wit hout reimbursement. In the event an action, suit or proceeding is commenced by one Member against the other in connection with this Agreement and/or the transaction contemplated hereby, the non-prevailing Member shall be required to reimburse the prevailing Member for all legal fees, costs and expenses incurred by the prevailing Member in connection therewith.
Rights and Remedies.
Unless otherwise specifically provided herein, the rights and remedies of any of the parties hereunder shall not be mutually exclusive, and the exercise of one or more of the provisions hereof shall not preclude the exercise of any other provisions hereof. Each of the parties confirms that damages at law may be an inadequate remedy for breach or threat of breach of any provisions hereof. The respective rights and obligations hereunder shall be enforceable by specific performance, injunction, or other equitable remedy, but nothing herein contained is intended to limit or affect any rights at law or by statute or otherwise of any party aggrieved as against the other parties for a breach or threat of breach of any provision hereof, it being the intention by this paragraph to make clear that under this Agreement the respective rights and obligations of the Members shall be enforceable in equity as well as at law or otherwise.
To the extent permitted by law, each Member hereby irrevocably:
1M - Page 266
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HTC Tenant Operating Agreement
consents to any suit, action, or proceeding with respect to this Agreement being, if brought by the Investor Member, brought in any court of competent jurisdiction located in the State as the Investor Member may elect and, if brought by the Managing Member, brought in any court of competent jurisdiction located in the State as the Managing Member may elect;
waives any objection that it may have now or hereafter to the venue of any such suit, action or proceeding in any such court and any claim that any of the foregoing have been brought in any inconvenient forum;
(a) acknowledges the competence of any such court, (b) submits to the nonexclusive jurisdiction of any such court in any such suit, action or proceeding, and (c) agrees that the final judgment in any such suit, action or proceeding brought in any such court shall be conclusive and binding upon it and may be enforced in any court to the jurisdiction of which it is or may be subject by a suit upon such judgment, a certified copy of which shall be conclusive evidence of its liability; agrees that service of process in any suit, action or proceeding brought in any such court may be made at its address set forth in Section 17.07, or such other address designated by it pursuant to the terms of Section 17.07; waives all claims of error by reason of any service effected in accordance with the provisions of subparagraph (iv) above and agrees that such service shall in every respect effect service upon it in any suit, action or proceeding and shall be taken and held to be valid personal service upon or personal delivery to it, to the fullest extent permitted by law; and
waives trial by jury in any action related to this Agreement.
Compliance with Safe Harbor. The Members acknowledge that the Revenue Procedure establishes a so-called safe harbor (the “Safe Harbor”) under which the IRS will not challenge a partnership's allocations of validly claimed Historic Tax Credits provided the partnership and its partners satisfy all the requirements of the Safe Harbor. The Members agree and acknowledge that each intends to satisfy each of the requirements of the Safe Harbor and that in that regard, Investor Member is intended to constitute an “Investor” and the Company is intended to constitute a “Partnership”, and more specifically a “Master Tenant Partnership,” as those terms are defined in the Revenue Procedure. The Members also affirm and direct that any ambiguity in the meaning of any provision of this Agreement shall be resolved in favor of an interpretation that would tend to cause the Company or its members to comply with the requirements of the Safe Harbor.
In furtherance of the foregoing, it is the parties’ intention to comply with Section 4.05(2)(b) of the Revenue Procedure which states that no person involved in a rehabilitation transaction may pay an Investor Member's costs or indemnify an Investor Member for the Investor Member's costs if the IRS challenges the Investor Member’s claim of Historic Tax Credits (“Costs of Challenge ”). Therefore, the parties acknowledge that neither the Company nor Managing Member shall have any liability hereunder for any 1M - Page 267
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HTC Tenant Operating Agreement
amounts payable to Investor Member with respect to any Costs of Challenge. To the extent that the Revenue Procedure is clarified, amended, or modified after the Admission Date with respect to Section 4.05(2)(b), then any such clarification or modification shall be deemed incorporated hereunder and this agreement shall be read consistently with any such clarification, amendment, or modification.
Survival of Obligations.
All monetary obligations of the Company or the Managing Member to the Investor Member hereunder shall survive the sale by the Investor Member of its Interest or the termination of the Company until satisfied by the Company, the Managing Member or a Guarantor, as the case may be.
Signature Pages Follow
1M - Page 268
Palm Springs Plaza
HTC Tenant Operating Agreement
IN WITNESS WHEREOF, the parties have set their signatures to this Operating Agreement as of the date first written above.
MANAGING MEMBER:
PALM SPRINGS PLAZA THEATRE
MANAGING MEMBER, LLC, a California
limited liability company
By: ____________________________
Name:
Title:
INVESTOR MEMBER:
STETSON INVESTMENTS FUND LLC,
a Delaware limited liability company
By: National Trust Community Investment
Corporation, a Delaware corporation, its
manager
By:
Name:
Title:
1M - Page 269
Schedule A
Palm Springs Plaza
HTC Tenant Operating Agreement
SCHEDULE A
Members, Capital Contributions, Company Interests and Managing Member Capital Contribution Company Interest
Investor Member
Stetson Investments Fund LLC
c/o National Trust Community Investment
Corporation
1155 15th Street NW, Suite 300
Washington, DC 20005
Attention: Bret Mosher
Email: [email protected]
$[5,344,639]* 99.00% (until the Flip
Date)
[__.00]% (from and
after the Flip Date)
Managing Member
Palm Springs Plaza Theatre Managing
Member, LLC
3200 E. Tahquitz Canyon Way
Palm Springs, CA 92263-2743
Attention: Director of Finance and Treasurer
Email: [___________]
$[53,986]
1.00% (until the Flip
Date)
[__.00]% (from and
after the Flip Date)
*Payable as and when provided in this Agreement. Subject to adjustment as provided for in this Agreement.
1M - Page 270
Schedule B - 1
Palm Springs Plaza
HTC Tenant Operating Agreement
SCHEDULE B-1
First Installment
$[1,336,160] (all attributable to the Historic Tax Credits) (the “First Installment”) shall be paid upon the latest of the following:
the Admission Date;
receipt by the Investor Member of satisfactory legal and tax opinions; evidence of receipt by the HTC Landlord of all capital contributions required at Initial Closing as provided in the Projections; receipt of evidence of Part 1 Approval (other than prong (ii) of the definition thereof) and initial Part 2 Approval with conditions reasonably acceptable to Investor Member (subject to future amendments);
receipt of a bona-fide third party market study related to the Property; receipt and approval by the Investor Member of the Projections, including the project budget;
receipt by the Investor Member of a title commitment to issue the Title Policy following the Initial Closing and receipt of the Survey; receipt and approval by the Investor Member of the Environmental Reports;
receipt of Guarantor financial information and other underwriting diligence acceptable to Investor Member with respect to the Theater Manager and each Developer Entity;
receipt and approval by the Investor Member of the Architect’s Closing Certificate that the Plans and Specifications are consistent with the Part 2 Approval and any amendments thereto;
1M - Page 271
Schedule B - 1
Palm Springs Plaza
HTC Tenant Operating Agreement
receipt of a reasonableness opinion satisfactory to the Investor Member with respect to the Development Fee, any fees paid to any Developer Entity by the Company or the HTC Landlord, the terms of the HTC Lease, and any other applicable fees or arrangements;
receipt of the Construction Contract, evidence of Contractor’s insurance in a form and amounts satisfactory to Investor Member, payment and performance bonds, and building permit;
receipt of evidence of insurance for the property development period satisfactory to Investor Member;
receipt of executed Ground Lease in a form reasonably acceptable to Investor Member;
receipt of constructability review reason ably acceptable to Investor Member (who may engage the Construction Consultant to assist with such review, at the Managing Member’s expense); and
the satisfaction of any requirements set forth in this Agreement as prerequisites to the payment of the First Installment and such other conditions as the Investor Member shall reasonably require.
1M - Page 272
Schedule B - 2
Palm Springs Plaza
HTC Tenant Operating Agreement
SCHEDULE B-2
Second Installment
Subject to adjustment in accordance with this Agreement, $[2,672,320] (all attributable to the Historic Tax Credits) (the “Second Installment”) within fifteen (15) days of receipt and approval by Investor Member, in its sole discretion, of all of the following in form and content acceptable to Investor Member:
evidence of the occurrence of the Credit Commencement Date and Final Completion;
the Architect’s Installment Certificate;
the Draft Cost Certification;
all reports and other information due pursuant to Section 13.04 of this Agreement, including, without limitation, the prior year’s tax return, K-1 and audited financial statements for Company and HTC Landlord (if otherwise due without extension);
evidence of submittal of Part 3 Approval to SHPO and NPS and payment of any fees associated therewith;
a Managing Member’s Certificate affirming all the representation and warranties contained in this Agreement and containing a certification that no uncured defaults exist, or, with the passage of time or the giving of notice would exist, under the Operating Documents;
1M - Page 273
Schedule B - 2
Palm Springs Plaza
HTC Tenant Operating Agreement
a date-down endorsement to the T itle Policy evidencing, among other things, that no mechanic’s liens or other encumbrances have been filed with respect to the Project (unless the same have been bonded or insured over in a manner acceptable to Investor Member in its sole discretion), or, if the state does not allow a title company to perform a date -down endorsement, an updated title search for the Project reflecting no intervening unbonded or uninsured liens (other than those that have been bonded or insured over in a manner acceptable to Investor Member in its sole discretion) or other title issues as reasonably determined by Investor Member; [Reserved]
a certificate from any Lender that no uncured default e xists or, with the passage of time or the giving of notice would exist, with respect to any loan or financing entered into by HTC Landlord pursuant to Approved Loan Documents (each a “Lender’s Estoppel Certificate”);
a certificate from the City of Palm Sp rings, a municipal corporation and charter city in the State of California, certifying that no uncured default exists or, with the passage of time or the giving of notice would exist, with respect to the Ground Lease (“Ground Lease Estoppel Certificate”);
[evidence of Managing Member’s election of 168(h) effective as of the 2025 taxable year];
evidence that the Building has been individually listed on the National Register (as defined the HTC Lease);
evidence that the Theater Subtenant has obtained the Liquor License; determination by Investor Member that no Adverse Change of Law has occurred;
receipt of evidence of insurance with respect to the property operations period; and
satisfaction of the requirements for the payment by the Investor Member of the First Installment and such other conditions as the Investor Member shall reasonably require.
1M - Page 274
Schedule B - 3
Palm Springs Plaza
HTC Tenant Operating Agreement
SCHEDULE B-3
Third Installment
Subject to adjustment in accordance with this Agreement, $[1,336,160] (all attributable to the Historic Tax Credits) (the “Third Installment”) within fifteen (15) days of receipt and approval by Investor Member, in its sole discretion, of all of the following in form and content acceptable to Investor Member:
evidence of Part 3 Approval , including any amendments to the Part 2 Approval;
the Final Cost Certification;
tax returns, K -1 and audited financial statements for Company and HTC Landlord for the year in which the Building achieved Placement in Service (which tax returns for HTC Landlord shall reflect the election to pass -through the Historic Tax Credits to the Company);
all reports and other information due pursuant to Section 13.04 of this Agreement;
Managing Member’s Certificate affirming all the representations and warranties contained in this Agreement and containing a certification that no uncured defaults exist or, with the passage of time or the giving of notice, would exist under the Operating Documents;
a current title search evidencing that no mechanic’s liens or other encumbrances (which have not been bonded or insured over in a manner acceptable 1M - Page 275
Schedule B - 3
Palm Springs Plaza
HTC Tenant Operating Agreement
to Investor Member in its sole discretion) have been filed with respect to the Project and final, unconditional lien waivers, if applicable;
Lender’s Estoppel Certificates from each Lender, if any, and Ground Lease Estoppel Certificate;
evidence of that the Theater Subtenant has fully funded the Operating Reserve;
evidence satisfactory to the Investor Member that no uncured default exists or event which with the passage of time would constitute a default exists with respect to any Operating Documents;
receipt of lien waivers, if applicable;
determination by Investor Member that no Adverse Change of Law has occurred; and
satisfaction of the requirements for the payment by the Investor Member of the Second Installment and such other conditions as the Investor Member shall reasonably require.
1M - Page 276
Schedule B - 4
Palm Springs Plaza
HTC Tenant Operating Agreement
1M - Page 277
Exhibit B-1
Palm Springs Plaza
HTC Tenant Operating Agreement
EXHIBIT A
INSURANCE PROVISIONS
Insurance coverage must be provided to the Investor Member and be evidenced by certificates of insurance and properly endorsed policies certified as true and correct by the insurance agent. All evidence of insurance must satisfy the following requirements : (a) the Company (rather than the Managing Member or the HTC Landlord) should be the named insured where indicated; (b) policies must be written with an A.M. Best rated company of “A -” or better and a financial size category rating by A.M. Best of VIII or higher; (c) all binders and policies should contain a cancellation clause stating that the policy will not be canceled or non -renewed without at least sixty (60) days prior written notice to the Company and the Investor Member except for non- payment of premium where ten (10) days’ notice will be given; (d) certificates must document the amount of all deductibles; and (e) all binders and policies must be accompanied by evidence of premium payment. Property insurance, commercial liability insurance, and Necessary Earthquake Coverage, shall be maintained by City pursuant to blanket insurance policies.]
[ADDITIONAL INSURANCE PROVISIONS TO BE INSERTED]
1M - Page 278
Exhibit B-1
Palm Springs Plaza
HTC Tenant Operating Agreement
EXHIBIT B-1
PAYMENT NOTICE
[Form]
__________, 2025
Stetson Investments Fund LLC
c/o National Trust Community Investment Corporation
1155 15th Street NW, Suite 300
Washington, DC 20005
Attention: Bret Mosher
Re: Capital Contribution as per the Amended and Restated Operating Agreement (the “Agreement”) dated [___________] [__], 2025 by and between the undersigned and the addressee hereof (“Investor Member”)
To whom it may concern:
The undersigned on behalf of Palm Springs Plaza Theatre Master Tenant, LLC confirms that all of the requirements for the payment of the [insert installment #] Installment have been satisfied and requests, subject to the terms and conditions of the Agreement, that the Investor Member contribute $_____________ constituting the [insert installment #] Installment and in accordance with the Agreement, on [DATE].
Terms not otherwise defined herein shall have the meanings given them in the Agreement.
PALM SPRINGS PLAZA THEATRE MANAGING
MEMBER, LLC , a California limited liability
company
By:_____________________________
Name:
Title:
1M - Page 279
Exhibit B - 2
Palm Springs Plaza
HTC Tenant Operating Agreement
EXHIBIT B-2
MANAGING MEMBER’S CERTIFICATE
NOTE: THIS CERTIFICATION MUST BE REVISED WHEN REISSUED IN
CONNECTION WITH A REQUEST FOR AN INSTALLMENT TO REFLECT THE PASSAGE
OF TIME, CLOSING ON THE PERMANENT FINANCING, RECEIPT OF UPDATED TITLE INSURANCE DOCUMENTATION AND SIMILAR EVENTS.
All capitalized terms used herein and not otherwise defined, shall have the meanings attributed to them in the Amended and Restated Operating Agreement of Palm Springs Plaza Theatre Master Tenant, LLC, a California limited liability company, dated as of [_______], 2025 (the “Operating Agreement”).
The undersigned, Palm Springs Plaza Theatre Managing Member, LLC , a California limited liability company, as of [___________], 2025, being the sole Ma naging Member of the Company and sole Managing Member of the HTC Landlord, hereby represents, warrants and covenants to the Company and to the Members that:
(a) the Rehabilitation has been substantially completed in a timely and workmanlike manner in accordance with (i) all applicable and material requirements of the Operating Documents, (ii) all applicable requirements of all appropriate governmental entities, (iii) the Certification Application and the Part 2 Approval, and (iv) the Plans and Specifications of the Property approved by Investor Member and any applicable governmental entities, as such Plans and Specifications may have been changed from time to time with the approval of Investor Member, and any applicable governmental entities including the National Park Service, if such approval shall have been required. The Managing Member has not authorized any change to the Plans and Specifications unless the Secretary’s approval of such change was obtained, if and to the extent such approval was required by Title 36 of the Code of Federal Regulations , Part 67.6 (or any successor provisions thereto);
(b) the Project is properly zoned for the uses contemplated in the Operating Agreement and the Land has obtained all consents, permissions and licenses required by all applicable governmental entities for the operation of the Property. The Property conformed and conforms to all applicable federal, state and local land use, zoning, environmental and other governmental laws and regulations;
(c) all appropriate public utilities, including sanitary and storm sewers, water, gas and electricity, are currently available to the Property and have been operating properly for the Property since the time of first occupancy of the Property. The Property has direct access to a public street or highway and has adequate parking to comply with Applicable Laws and make it viable; 1M - Page 280
Exhibit B - 2
Palm Springs Plaza
HTC Tenant Operating Agreement
(d) as of the date hereof, good and marketable leasehold title to the Property was and is held solely by the Company, free and clear of any liens, charges or encumbranc es other than Permitted Encumbrances, the Property or the Company for payment of any debt secured thereby.
None of the liens, charges, encumbrances or exceptions set forth in the Title Policy has or will have a material adverse effect upon the construction or operation of the Property; (e) good and marketable leasehold title to the Property is held solely by the HTC Landlord, free and clear of any liens, charges or encumbrances other than Permitted Encumbrances. None of the liens, charges, encumbrances or exceptions has or will have a material adverse effect upon the construction or operation of the Property; (f) there is and shall be no direct or indirect personal liability (including guarantees, letters of credit and stop loss agreements provided to any Lender) of the HTC Landlord, the Company or of any of their Members or any of their Affiliates for the repayment of the principal of or payment of interest on any loan or financing other than as expressly approved by the Investor Member.
(g) no default by any Developer Entity has occurred or is continuing (nor has there occurred any continuing event which, with the giving of notice or the passage of time or both, would constitute such a default under any of the Operating Documents, and the Operating Documents are in full force and effect (except to the extent fully performed in accordance with their respective terms);
(h) there is no default under any agreement, contract, lease, sublease or other commitment, or of any claim, demand, litigation, proceedings or governmental i nvestigation pending or, to the best of its knowledge, threatened against it, the Property or the Company, or related to the business or material assets of the Company or to the Leasehold Interest, which claim, demand, litigation, proceeding or governmental investigation could result in any judgment, order, decree, or settlement which would materially and adversely affect the business or assets of the Company or of the Property;
(i) the execution and delivery of the Operating Agreement, the incurrence of the obligations set forth in the Operating Agreement, and the consummation of the transactions contemplated by the Operating Agreement do not violate or conflict with any provision of any federal, state, municipal or local laws, ordinances, rules, regulations, requirements, or any order, judgment, decree, determination, or award of any court binding on any Developer Entity, or its assets (including the Leasehold Interest) nor do they conflict with, result in a breach of, constitute a default under, result in the acceleration of, or create in any party the right to accelerate, terminate, modify, or cancel, or require any notice (which notice has not been furnished) under any agreement, contract, lease, license, instrument, or other arrangement to which any Develope r Entity is a party, or by which it is bound or to which any of its assets is subject; (j) insurance has and continues to be maintained in form and amounts satisfactory to the Investor Member, as specified in Exhibit A to the Operating Agreement; (k) neither it nor the Company has incurred any financial responsibility with respect to the Leasehold Interest or the Property prior to the date hereof, other than as contemplated by the Operating Agreement and as disclosed in writing to the Investor Member; 1M - Page 281
Exhibit B - 2
Palm Springs Plaza
HTC Tenant Operating Agreement
(l) each of the H TC Landlord and the Company is and will continue to be a valid limited liability company, duly organized under the laws of the Formation State and had, has and shall continue to have full power and authority to hold, operate and maintain the Property in accordance with the terms of the Operating Agreement, and has taken and shall continue to take all action under the laws of the Formation State and the State, and any other applicable jurisdiction that is necessary to protect the limited liability of its mem bers and to enable it to engage in its business;
(m) it will indemnify and hold the Company, the Investor Member and the members thereof, their Affiliates and agents, free and harmless from any injury, loss or damage (including, without limitation, reasonable attorneys’ fees, court costs, and amounts paid in settlement of any claims, which settlement has been mutually agreed to by it and the party against whom such claim has been made) resulting from the claims of any Person with respect to any liability arising under the Securities Act of 1933 or the Securities Exchange Act of 1934 or the laws or regulations of any state or other jurisdiction, which claims are based upon alleged fraud, deceit, or untrue statement or alleged untrue statement of a material fact, or the omission or alleged omission to state a material fact required to be stated or necessary to make the statements not misleading, with respect to or based upon information furnished or statements made by it to the Investor Member or any members thereof, their Affiliates or agent(s) or the broker- dealer, in connection with the acquisition by the Investor Member from or through its Interests in the Company or the offer or sale of limited liability company interests in the Company or in the Investor Member; (n) no restrictions on the sale or refinancing of the Leasehold Interest, other than the restrictions set forth in the HTC Lease, exist as of the date hereof, and no such restrictions shall, at any time while the Investor Member is an Investor Member, be pl aced upon the sale or refinancing of the Leasehold Interest;
(o) all general operating accounts and Reserves of the Company or the HTC Landlord, if any, which are required to be funded, have been funded to currently-required levels; (p) the Property is being and will continue to be operated in a manner which satisfies, and shall continue to satisfy, all restrictions, applicable to the Property, the Leasehold Interest and projects generating Historic Tax Credits and which shall be in conformity with the description of the Property upon which the Part 2 Approval was based;
(q) each Developer Entity has complied with all Applicable Laws and no action, suit, proceeding, hearing, government investigation, charge, complaint, claim, demand, or notice has been filed or commenced against any Developer Entity alleging any failure so to comply, or if there are any of the foregoing, the Managing Member has disclosed them in writing to the Investor Member and the Managing Member shall indemnify and hold the Investor Member and the Company harmless for any loss or damage arising therefrom; (r) no Developer Entity is Bankrupt or contemplating a Bankruptcy; (s) except as described in the Environmental Reports, no Developer Entity has ever received notification from any federal, state or other Governmental Authority of (x) any potential, known, or threat of release of any Hazardous Substance from the Property or (y) the incurrence of 1M - Page 282
Exhibit B - 2
Palm Springs Plaza
HTC Tenant Operating Agreement
any expense or loss by any such Governmental Authority or by any other Person in connection with the assessment, containment or removal of any release or threat of release of any Hazardou s Substances from the Property, and no Hazardous Substance was ever or is now stored on, transported, or disposed of on the Property except to the extent any such storage, transport or disposition was at all times in compliance with all laws, ordinances, and regulations pertaining thereto;
(t) the Managing Member is solvent, is able to pay its debts as they mature, and has capital sufficient to carry on the business in which it is engaged, and the present fair saleable value of its assets is greater than the amount of its liabilities; (u) the Managing Member has disclosed to the Investor Member all material actions with respect to the Company taken by the Managing Member prior to the date hereof; (v) no event of Bankruptcy has occurred and is continuing, and no event ha s occurred that, with the passage of time, could become an event of Bankruptcy, with respect to the Managing Member;
(w) a copy of all material documents relating to the Company and the Property have been delivered to the Investor Member;
(x) the Managing Member will continue to be duly and validly organized and has and shall continue to validly exist in good standing as a limited liability company under the laws of the Formation State, with full power and authority to enter into and perform its obligations under the Operating Agreement;
(y) the Property shall be operated in a manner that complies with the Applicable Laws; (z) there is no default, claim, demand, litigation, proceedings or governmental investigation pending or, to the best of its knowledge, threatened against it, except for those which are fully covered by insurance or, if adversely determined, would not materially impair the Managing Member’s ability to pay when due any amounts that may become payable under the Operating Agreement; and
(aa) each of the representations and warranties contained in the Operating Agreement, HTC Landlord Operating Agreement and the HTC Lease is true and correct as of the date hereof.
Signature Page Follows
1M - Page 283
Exhibit B - 2
Palm Springs Plaza
HTC Tenant Operating Agreement
MANAGING MEMBER AND HTC
LANDLORD MANAGING MEMBER:
PALM SPRINGS PLAZA THEATRE MANAGING
MEMBER, LLC , a California limited liability
company
By:
Name:
Title:
1M - Page 284
Exhibit C
Palm Springs Plaza
HTC Tenant Operating Agreement
EXHIBIT C
PROJECTIONS
1M - Page 285
Exhibit D
Palm Springs Plaza
HTC Tenant Operating Agreement
EXHIBIT D
ARCHITECT’S CLOSING CERTIFICATE
1M - Page 286
Exhibit E
Palm Springs Plaza
HTC Tenant Operating Agreement
EXHIBIT E
REPORTING REQUIREMENTS
[NTD: the below remains under review with NTCIC]
Monthly Reports:
No more than once per month during construction, Managing Member shall prepare and deliver to the Investor Member the following information (collectively, the “Disbursement Deliverables”):
• Fully executed AIA document G702 and G703;
• Updated sources and uses;
• Invoices for all costs or expenses to be paid with monthly funds request; • lien waivers from the Contractor and all subcontractors; • updated title report evidencing no intervening liens; • Change order log;
• Update to pending change orders; and
• Such other information and/or reports as Investor Member shall reasonably request.
Quarterly Reports:
Within no more than 45 days after the end of each quarter of each Fiscal Year:
• Following placement in service of any portion of the Project, unaudited quarterly and YTD financial statements for HTC Landlord, Company, Theater Subtenant, and Guarantor, including balance sheet, income statement and statement of cash flows; • Following placement in service of any portion of the Project, copies of monthly bank statements of the Theater Subtenant, Company, and HTC Landlord including operating accounts, and any Reserve accounts.
• Unaudited comparison of actual results of the operations of the respective entity d uring the applicable quarter with the annual operating budget • A copy of tax bill and proof of payment, as applicable within each quarter; • Copies of all insurance certificates (ACORD), as applicable • Following placement in service of any portion of the Proje ct, completed and executed quarterly questionnaire and certification in the form provided by Investor Member • Copies of any reports, notices and/or other communications received by the Company from any authority regarding the Project's compliance with the Historic Tax Credit conditions and any other applicable laws, ordinances, or regulations; • Any other information regarding the Company, HTC Landlord, and/or Theater Subtenant, and its operations during the prior fiscal quarter reasonably deemed by the Managing Member or Investor Member to be material to the Investor Member. Material events include but are not limited to notices of default, litigation, and bankruptcies; General Contractor Reports:
1M - Page 287
Exhibit E
Palm Springs Plaza
HTC Tenant Operating Agreement
By [December 31, 2025] , a completed report as of substantial completion, from the Contractor in form and substance accept able to the Investor Member (the “ GC Report”), which report shall include but not be limited to:
• Number of actual full -time hours worked and actual part -time hours worked during the reporting period;
• Cumulative full-time positions and part-time positions hired; • Minimum skill/Experience level required for positions; and • Starting wage per hour by position.
Annual Reports :
Within 60 days prior to the end of each Fiscal Year:
• An annual operating budget for the following Fiscal Year for the Company, the Affiliate Subtenant (including, without limitation, a budget prepared by the Theater Manager), and HTC Landlord .
Within 60 days after the end of each Fiscal Year
• Draft of audited financial statements for the Company, HTC Landlord, and Theater Subtenant, and Guarantor; and
• Draft of Federal, State and Local Income Tax Returns for Company, HTC Landlord, Theater Subtenant, Guarantor, and Managing Member
Within 90 days after the end of each Fiscal Year after construction completion:
• For the first Fiscal Year after construction completion, a final GC Report. • [For the first Fiscal Year after construction completion and annually thereafter, if applicable, a completed Sustainability Report in form and subst ance acceptable to the Investor Member, which report shall include but not be limited to:
o Renewable energy resource information
o Remediation costs
o Total amount of construction waste sent to landfills (by weight) o Total amount of waste diverted (by weight)
o Green technology features and savings]
• A Jobs Table for all commercial tenants and/or sub- tenants in form and substance acceptable to the Investor Member.
Within 90 days after the end of each Fiscal Year:
• Federal, State and Local Income Tax Returns for C ompany, HTC Landlord, Theater Subtenant, Guarantor (if requested by Investor Member), and Managing Member; and • Evidence of Managing Member’s election of 168(h) prior to or including the year of placement in service, if applicable.
Within 120 days after the end of each Fiscal Year:
• Audited financial statements for such Fiscal Year in conformity with GAAP applied on a consistent basis and prepared by the Accountants for Theater Subtenant, Guarantor, the Company , and HTC Landlord;
• As prepared by the Accountan ts, a reconciliation of Net Cash Flow distribution with the distribution requirements set forth in Section 11.01; 1M - Page 288
Exhibit E
Palm Springs Plaza
HTC Tenant Operating Agreement
• Audited financial statements, or if an audit is not available, a certified internally prepared balance sheet and income statement for such Fi scal Year for Theater Subtenant, and Guarantor;
• Signed personal financial statements (including direct and contingent liabilities) dated as of the end of such Fiscal Year in form and substance acceptable to Investor Member for all non- entity Guarantor and, if requested, bank and/or brokerage statements supporting reported cash and marketable securities; • A report of any Operating Deficit Loans and Subordinated Loans made during such year and repayments thereof.
Promptly:
• upon the occurrence of any natural disaster and/or incident and/or widespread property damage having an adverse impact on the Property, a report of the extent of the damage to the Property, any expected delay in the Rehabilitation, and the effect such damage might have on the operations or marketing and lease-up activity of the Property; • upon the occurrence of a Withdrawal Event, notice of and a detailed statement describing such event;
• from time to time, as may be reasonably requested by the Investor Member, information on the state of the business, financial condition, and affairs of the Company or the Property or any other information and/or reports requested to be delivered to the Investor Member; • in the event of a material adverse change in any Guarantor’s financial position or circumstances reasonably likely to result in such a change, notice of such change, including an explanation of the circumstances;
• upon learning of a condition or circumstance which is expected to reduce below the projected levels the amount of Historic Tax Credits available to the Company, a detailed statement describing such matters; or
• upon learning of any violation of any health, safety, building code, or other statute or regulation by the Company, a detailed statement describing such matters along with any written notices thereof received by the Company from any federal, state, or local governmental entity. • copies of all reports, notices, filings or correspondence sent or received regarding the occurrence of any event which has or may have a material adverse effect on the Company or the Property (including, without limitation, any reports, notices, filings or correspondence with any governmental agency regarding the Historic Tax Credits; default notices, notices of reductions or elimination of benefits under any federal, state, or local program previously enjoyed by the Company; any default or failure of compliance with respect to any financial, contractual or governmental obligation of the HTC Landlord, Company or the Managing Member; notice of any IRS or Secretary proceeding involving the Company; notice of any demand for payment or draw under any construction completion guarantee, performance bond, or letter of credit regarding the HTC Landlord or Company; any notice or request for approval or consent or notice 1M - Page 289
Exhibit E
Palm Springs Plaza
HTC Tenant Operating Agreement
of default given pursuant to the HTC Lease; and notices regarding the Property’s compliance with any regulatory restrictions imposed thereon);
• copies of all lawsuits or legal proceedings or alleged violations of law, and notices of all actions taken, or proposed to be taken, affecting a Developer Entity; and • upon occurrence, a report of any material default by the Company under any Operating Documents or in payment of any mortgage, taxes, or interest or other obligation on secured or unsecured debt;
• upon execution, a copy of all amendments or changes to the Certification Application and the articles, bylaws, certificate, partnership agreement, operating agreement or other organizational documents of the Managing Member, the Company, the HTC Landlord, Theater Subtenant, or any Guarantor (without implying the consent of Member to any such amendment or change to any such organizational document).
• a response to any reasonable requests or inquiries made in writing by the Investor Member regarding matters affecting the Property or the Company
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60199820.1
EXHIBIT F
ARCHITECT’S INSTALLMENT CERTIFICATE
Architect Certificate of Compliance
[ADD LETTERHEAD]
[________], 2025
Stetson Investments Fund LLC
c/o National Trust Community Investment Corporation
1155 15th Street, NW
Washington, DC 20005
Attn: Director of Asset Management
Re: Palm Springs Plaza Theatre –
128 S. Palm Canyon Dr., Palm Springs, California 92262
Ladies and Gentlemen:
The undersigned (the “Architect”), an architect duly licensed and registered in the State of California and experienced with the standards for rehabilitation established by the Secretary of the Interior set forth in Title 36 of the Code of Federal Regulations, Part 67.7, or any successor provisions, as amended from time to time (the “Secretary’s Standards”), has prepared for Palm Springs Plaza Theatre Landlord, LLC, a California limited liability company (“Lessor”), final plans, working drawings, and specifications (and addenda), dated May 16, 2023, and last redated and revised on [_________________] (collectively, the “Plans and Specifications”) in connection with the rehabilitation of the existing historic building commonly known as Plaza Theatre (the “Building”) located on certain real property located at 128 S. Palm Canyon Dr., Palm Springs, California 92262 and the tract(s) of land upon which the Building is located (the “Land”, and together with the Building, the “Property.”)
The Architect understands that the Property is leased to Palm Springs Plaza Theatre Master Tenant, a California limited liability company (the “Lessee”). The Architect further understands that Stetson Investments Fund LLC, a Delaware limited liability company (the “Investor Member”), is a member of the Lessee and has committed to make an equity investment in installments or other financial accommodations to the Lessee.
In connection with Investor Mem ber making an equity investment installment in Lessee, the Architect hereby certifies to Investor Member as follow:
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1. The Plans and Specifications (a) comply with the requirements, guidelines, and recommendations of the United States Department of the Interior, National Park Service (“NPS”), including, without limitation, the NPS approval of Part 2 of the Historic Preservation Application (the “Part 2 Application”) dated June 4, 2024, NPS approval of the first amendment to the Part 2 Application dated [______________], and all NPS correspondence, including any hold letter and response thereto, if applicable, and the standards for rehabilitation set forth in the Secretary’s Standards (collectively, together with any amendments, the “HTC Approvals”) and the conditions thereto;\
2. The Plans and Specifications have been prepared and will continue to be prepared in accordance with customary professional standards of architectural practice for projects similar to the rehabilitation of the Building. The Plans and Specifications comply with and conform in all respects to the requirements of law, including the Americans with Disabilities Act and the Fair Housing Act, have been duly filed with and have been approved by the local or municipal department of buildings or such other department, board or agency having similar functions, and all governmental and municipal authorities having jurisdiction thereover, and are in compliance with all requirements and restrictions of all applicable zoning, building, fire, health and other governmental ordinances, rules and regulations, or other similar body acting in and for the locality in which the Property is located.
3. In the opinion of the Architect, the completion of the rehabilitation of the Building has been done in accordance with the Plans and Specifications, and all of the preconditions have been met justifying the issuance of (a) a new temporary or permanent certificate or certificates of occupancy for the Building and, if applicable, a letter or certificate of compliance or completion stating that the work comprising the rehabilitation and construction complies with all requirements and restrictions of all governmental ordinances, rules and regulations ; and (b) such other necessary approvals, certificates, permits and licenses that may be required from the local or municipal fire, buildings, housing, zoning and planning board, agencies or departments and such other governmental authorities having jurisdiction over rehabilitation and construction.
4. The rehabilitation of the Building and the operation of the Property is in compliance with all current zoning and other applicable laws, ordinances, rules, regulations, restrictions and requirements, and all ex isting building and other municipal violations filed or noted against the Property, if and to the extent applicable, have been corrected with the completion of the construction substantially in accordance with the Plans and Specifications.
5. All necessary gas, electric, water and sewer services and other utilities are now available to the Property.
6. The scope of work contemplated in the Plans and Specifications was such that in the opinion of the Architect, (a) the Property is in compliance with the Lead -Based Paint Regulations issued by the U.S. Department of Housing and Urban Development pursuant to the Lead-Based Paint Poisoning Prevention Act; and (b) all known hazardous substances in the Property, as identified in the recent environmental report(s) on the Property of which copies have been delivered to the Architect, have been removed or encapsulated as permitted by law, to the best of the Architect’s knowledge and belief after appropriate inquiry.
7. To the best knowledge of the Architect , no governmental agency or entity (including, but not limited to, SHPO and the NPS) has issued any notice of violation or non-conformity in connection with the Project.
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8. All work performed to date in connection with the rehabilitation of the Building is consistent with the Plans and Specifications and is in compliance with the HTC Approvals. The Architect agrees to endeavor to guard the Lessor and Lessee against work that does not conform to the Secretary’s Standards and the HTC Approvals, and not to prepare or recommend change orders to, or to authorize changes in, the Plans and Specifications unless the Secretary’s approval of such changes has been obtained, if and to the extent such approval is required by 36 C.F.R. 67.6(d).
Very truly yours,
ARCHITECTURAL RESOURCES GROUP,
a California corporation
By: ___________________________
Name: ______________________
Title: _______________________
4372242.6
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60199820.1
AMENDED AND RESTATED OPERATING AGREEMENT
OF
PALM SPRINGS PLAZA THEATRE LANDLORD, LLC
THIS AMENDED AND RESTATED OPERATING AGREEMENT (this “ Agreement”), dated as of ___________ 2025, is entered into by the Persons named in Exhibit A hereto (referred to as “Members”).
WHEREAS, Palm Springs Plaza Theatre Landlord, LLC , a California limited liability company (the “ Company”) was formed on behalf of Palm Springs Plaza Theatre Managing Member, LLC , a California limited liability (the “ Managing Member”) under the California Revised Uniform Limited Liability Company Act (“Act”) on or about [_________], 2025 by filing the Articles of Organization of the Company with the California Secretary of State. The filed Articles of Organization are hereby adopted and approved by the Members; WHEREAS, the Managing Member and the Company en tered into an Operating Agreement on [__________], 2025 (“Original Operating Agreement”); WHEREAS, the Members and the Company desire to further amend and restate the Operating Agreement pursuant to the terms and conditions set forth hereunder; NOW THEREFO RE, in consideration of the foregoing and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the Members and the Company agree as follows:
ARTICLE 1: DEFINITION
Capitalized terms used in this Agreement have the meaning s specified in this Article or elsewhere in this Agreement and when not so defined shall have the meanings set forth in the Act. “Affiliate or Affiliated Person”, when used with reference to a specified person:
(a) Any Person that, directly or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the specified Person; (b) Any Person that is an officer of, Managing Member or member of, partner in, or trustee of, or serves in a similar capacity with respec t to, the specified Person or of which the specified Person is an officer, Managing Member or member, partner or trustee, or with respect to which the specified Person serves in a similar capacity; (c) Any Person that, directly or indirectly, is the beneficial owner of ten percent (10%) or more of any class of equity securities of, or otherwise has a substantial beneficial interest in, the specified Person or of which the specified Person is directly or indirectly the owner of ten percent (10%) or more of any class of equity securities or in which the specified Person has a substantial beneficial interest; and
(d) Any relative or spouse of the specified Person.
"Available Cash Flow " means, with respect to any fiscal year or other period of the Com[any, the sum of all cash receipts of the Company from any and all sources, less all cash disbursements (including loan repayments, capital improvements and replacements), and a 1M - Page 294
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reasonable allowance for reserves, contingencies and anticipated obligations as determined by the Managing Member.
“Capital Contribution” means the amount of cash, property or services contributed to the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended. All references herein to sections of the Code shall include any corresponding provision or provisions of succeeding law.
“Control” means the possession by any Person or related group of Persons, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities or partnership or membership interests, by contract or otherwise.
"Developer” means the City of Palm Springs, a municipality (the “City”), and Palm Springs Plaza Theatre Foundation (the “Foundation”), a California nonprofit public benefit corporation. "Developer Fee” means the developer fee and construction management fee payable to the Developer under the Development Services Agreement.
“Development Services Agreement” means that certain Development Services Agreement, by and between the Company and Developer, dated on or about the date hereof. “Disqualified Transferee” means any of the following:
A. a tax exempt organization described in Section 50(b)(3) of the Code unless the property is used by such organization predominantly in an unrelated trade or business the income of which is subject to tax under Section 511 of the Code; B. the United States, any State or political subdivision thereof, any possession of the United States, or any agency or instrumentality of any of the foregoing; C. a foreign person or entity (as defined in Section 168(h)(2)(C) of the Code) unless more than 50 percent of the gross income derived by the foreign person or entity is subject to U.S. tax or included under Section 951 of the Code in the gross income of a United States shareholder for the taxable year with or within which ends the taxable year of the controlled foreign corporation in which such income was derived;
D. a mutual savings bank, cooperative bank, or domestic building and loan association to which Section 593 of the Code applies;
E. a regulated investment company or real estate investment trust subject to taxation under subchapter M, Chapter 1 of the Code (but not including a “taxable REIT subsidiary,” as defined in Section 856(1) of the Code;
F. a cooperative organization described in Section 1381(a) of the Code; G. a partnership or other pass- through entity in which any Disqualified Transferee described in subparts (i) through (vi) above owns a direct or indirect partner or member interest; or
any other person or entity to which a Transfer of the Property would cause a recapture of any Historic Tax Credits as described in Sections 47 and 50 of the Code 1M - Page 295
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“Historic Tax Credits” means the federal historic rehabilitation tax credit provided for under Section 47 of the Code.
“Master Tenant Member” shall mean Palm Springs Plaza Theatre Master Tenant, LLC, a California limited liability company, in its capacity as a Member of the Company. “Master Tenant Investor” means Stetson Investment Fund LLC, a [____] limited liability company, in its capacity as investor member of the Master Tenant Member. “Managing Member ” shall mean: Palm Springs Plaza Managing Member , LLC , a California limited liability company, and any successor managing member of the Company under this Agreement.
“Member” means a Person who acquires Membership Interests, as permitted under this agreement, and who becomes or remains a Member.
“Membership Interests ” m eans either Percentage Interest or Units, based on how ownership in the Company is expressed.
“Pass Through Agreement ” means that certain Credit Pass Through Agreement by and between Borrower and HTC Master Tenant, dated on or about the date hereof. “Percentage Interest” means the fraction (expressed as a percentage), the numerator of which is the total number of the Units held by a Member as of such date and the denominator of which is the total number of the Units held by all the Members as of such date. The Percentage Interest of each Member is set forth opposite each Member’s name on Exhibit A, as the same may be amended from time to time as provided in this Agreement. “Permitted Encumbrances” means, with respect to the Property, (i) those exceptions listed in First American Title Policy ( Policy No.: [_________]) of the Master Tenant Member with respect to the Property, (ii) the encumbrance of the Master Lease, the recorded memorandum of Master Lease, (iii) easements or encumbrances which benefit the Project or do not adversely affect the Project, and (iv) any commercial or residential leases of tenant space in the Property in customary form entered into in the ordinary course of business “Person” means an individual, partnership, limited partnership, trust, estate, association, corporation, limited liability company, or other entity, whether domestic or foreign. “Placed in Service” means, with respect to the Property or any portion thereof follo wing its rehabilitation, the occurrence of the events necessary to establish placement in service for purposes of Section 1.48-12(f)(2) of the Regulations and Section 47(b) of the Code. “Recapture Expiration Date ” means the day after the fifth year (5 th) anniversary of the
final Placed in Service date with respect to all of the QREs made with respect to the Project occurs, which date shall be evidenced by a final cost certification acceptable to the Master Tenant Member. “Unit” means a unit of ownership in the Company entitling a Member holding such Unit to an economic interest and a voting interest in the Company. 1M - Page 296
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ARTICLE 2: CAPITAL, CAPITAL CONTRIBUTIONS AND SINGLE PURPOSE
ENTITY PROVISIONS
2.1 Initial Capital Contributions and Membership Interests. The Capital Contributions of the initial Members, as well as the Membership Interests of the Members, are listed in Exhibit A , which is made part of this Agreement. Membership Interests in the Company may be expressed either in Units or directly in Perc entage Interests. In addition to the Capital C ontributions contemplated above, Master Tenant Member also agrees that, prior to the end of the year in which the Project is Placed In S ervice, it shall assume the obligation to pay any portion of the Development Fee not paid by such date with available development sources (any such assumed amount hereinafter referred to as the “Assumed Amount ”). Such assumption shall not alter the amounts payable under the Development Agreement.
2.2 Subsequent Contributions . The Members shall not be obligated to make additional capital contributions unless unanimously agreed to by the Members, except that Master Tenant Member agrees to use the proceeds of capital contributions from Master Tenant Investor to make Capital Contributions subsequent to the date hereof to the Company.
2.3 Use of Capital Contributions. The proceeds of Capital Contributions from the Members of the Company shall be used to develop, leas e and maintain the Project, provided the Managing Member may designate other uses for such funds, and provided further that the proceeds of the Master Tenant Investor’s Capital Contributions following the date hereof shall be used to pay Developer Fee due to the Developer.
2.4 Capital Accounts. An individual capital account may be maintained for each Member consisting of such Member’s Capital Contribution, (1) increased by such Member’s share of profits, (2) decreased by such Member’s share of losses and Company expenses, (3) decreased by the such Member’s distributions and (4) adjusted as required in accordance with applicable tax laws.
2.5 Interest. No interest shall he paid on Capital Contributions or on the balance of the Member’s capital account.
2.6 Limited Liability. No Member shall be bound by, or be personally liable for, the expenses, liabilities, or obligations of the Company except as otherwise provided in this Agreement or as required by law.
2.6 Single Purpose Entity : The Company is formed for the purpose of owning, developing and leasing the real property located at 128 South Palm Canyon Drive, Palm Springs, California 92262 (the “Property,” and the development and leasing thereof, the “ Project”). The Company has not been, nor will the Company become, a shareholder of or a member or partner in any entity which acquires or holds any property other than the Property.
2.7 Company Covenants. The Company covenants and agrees that it shall not do any of the following:
(a) engage in any business or activity other than the acquisition, ownership, development, leasing, operation and maintenance of the Property, and activities incidental thereto; 1M - Page 297
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(b) acquire or own any material asset other than (i) the Property, and (ii) such incidental Personal Property as may be necessary for the ownership and/or leasing of the Property; (c) merge into or consolidate with any person or entity or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets or change its legal structure;
(d) fail to preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the laws of the jurisdiction of its organization or formation, or amend, modify, terminate or fail to comply with the provisions of this Agreement, Articles of Organization, or similar organizational documents, as the case may be; (e) own any subsidiary or make any investment in or acquire the obligations or securities of any other person or entity;
(f) commingle its assets with the assets of any of its Managing Member, affiliates, or of any other person or entity;
(g) incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than the Obligations, except unsecured trade and operational debt, not more than thirty (30) days old, incurred with trade creditors in the ordinary course of its business of owning and operating the Property in such amounts as are normal and reasonable under the circumstances, provided that such debt is not evidenced by a note and is paid when due and provided in any event the outstanding principal balance of such debt shall not exceed at any one time [_____________] and [__]/100 Dollars and the Historic Tax Credits; (h) fail to pay its debts and liabilities from its own assets; (i) fail to maintain its records, books of account and bank accounts separate and apart from those of the general partners, members, principals and affiliates of Company, the affiliates of a general partner or member of Company’s Members, and any other person or entity; (j) enter into any contract or agreement with any general partner, member, principal or affiliate of Company, any guarantor of all or a portion of the Obligations or Indemnitor, or any general partner, member, principal or affiliate thereof, except for the Master Lease, Development Services Agreement, the Pass Through Agreement, and upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than any general partner, member, principal or affiliate of Company, any guarantor or Indemnitor, or any general partner, member, principal or affiliate thereof; (k) seek dissolution or winding up, in whole or in part; (l) fail to correct any known misunderstandings regarding the separate identity of Company;
(m) hold itself out to be responsible (or pledge its assets as security) for the debts of another person;
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(n) make any loans or advances to any third party, including any general partner, member, principal or affiliate of Company, or any general partner, member, principal or affiliate thereof;
(o) fail to file its own tax returns or to use separate stationary, invoices and checks; (p) agree to, enter into or consummate any transaction which would have the effect of substantively consolidating Company into or its parents or affiliates under at law or equity; (q) fail either to hold itself out to the public as a legal entity separate and distinct from any other entity or person or to conduct its business solely in its own name in order not (i) to mislead others as to the entity with which such other party is transacting business, or (ii) to suggest that Company is responsible for the debts of any third party (including any ge neral partner, member, principal or affiliate of Company, or any general partner, member, principal or affiliate thereof);
(r) fail to allocate fairly and reasonably among Company and any third party (including, without limitation, any Guarantor) any overhead for shared office space; (s) fail to pay the salaries of its own employees and maintain a sufficient number of employees for its contemplated business operations;
(t) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations; provided that the foregoing shall not require any direct or indirect member, partner or shareholder of Company to make any additional capital contributions to Company; (u) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(v) share any common logo with or hold itself out as or be considered as a department or division of (i) any general partner, principal, member or affiliate of Company, (ii) any affiliate of a general partner of Company, or (iii) any other Person; or (w) fail to obtain the Managing Member’s vote as required for any Material Action.
2.8 Non-Dissolution Provisions. Notwithstanding anything to the contrary contained in this Agreement, the Company, and its Managing Member or Members hereby waive their right to dissolve or terminate (and waive thei r right to consent to the dissolution, division or termination of) the Company or this Agreement, and shall not take any action towards that end. Further, the death, retirement, incapacity, insanity, expulsion or resignation, bankruptcy, insolvency, dissolution or other similar proceeding of, or pertaining to, any Managing Member or Member, or any other event or act causing dissolution of the Company pursuant to the laws of the State of California, or this Agreement, shall not constitute an event of liquidation, dissolution, division or termination of the Company or this Agreement . If a Member is permitted to resign, declare bankruptcy or insolvency, to dissolve, or take such other similar action pursuant to this Section 1M - Page 299
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2.8, an additional member of the Company shall be admitted to the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement, which instrument may be a counterpart signature page to this Agreement. Such admission shall be deemed effective immediately prior to the resignation and, immediately following such admission, the previous Member shall cease to be a member of the Company.
ARTICLE 3: ALLOCATIONS AND DISTRIBUTIONS
3.1 Allocations. The profits and losses of the Company and all items of Company income, gain, loss, deduction, or credit shall be allocated, for Company book purposes and for tax purposes to the Members in accordance with their Percentage Interests; provided, however, that profits arising from the sale of all or substantially all of the assets of the Company shall be allocated to the Members as follows:
(a) First, to the Members to the extent of and in proportion to their negative Capital Account balances;
(b) Next, to the Members in proportion to and to the extent of the excess of the Members’ unreturned Capital Contributions over the Members’ Capital Account balances; and (c) Thereafter, to the Members in proportion to their Percentage Interests.
3.2 Distributions. The Company shall have the right to make distributions of cash and property to the Members. The timing of distributions shall be determined by the Managing Member in accordance with California law but in no event shall be less than annually.
(a) Available Cash Flow of the Company, except for Available Cash Flow arising from a sale of all or substantially all of the assets of the Company, shall be distributed (i) first, 100% to payments of deferred Developer Fee due from the Company under the Development Services Agreement, or, if Master Tenant Member has assumed any outstanding amount of Developer Fee, 90% of any Available Cash Flow to the Master Tenant Member until the Master Tenant Member has received cumulative distributions equal to the Assumed Amount, and (ii) second, to the Members in accordance with their applicable Percentage Interests as of the time of such distribution.
(b) Available Cash Flow of the Company arising from the sale of all or substantially all of the assets of the Company shall be distributed to the Members as follows: (i) first, 100% to payments of deferred Developer Fee due from the Company under the Development Services Agreement, or, if Master Tenant Member has assumed any outstanding amount of Developer Fee, 90% of any Available Cash Flow to the Master Tenant Member until the Master Tenant Member has received cumulative distributions equal to the Assumed Amount, (ii) second, to the Members in proportion to and to the extent of their unreturned Capital Contributions; and (iii) thereafter, to the Members in proportion to their Percentage Interests.
ARTICLE 4: MANAGEMENT OF THE COMPANY
4.1 Management by Managing Member . Subject to Section 2.7, the Company’s business and affairs shall be managed by the Managing Member.
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4.2 Powers.
(a) Subject to Section 2.7, the Managing Member shall have exclusive authority and full discretion with respect to the management of the Company’s business, and no Member is authorized to participate in the management of the Company except to the extent that voting rights are conferred upon the Member under the express terms of this Agreement. (b) The Managing Member may delegate such general or specific authority to the officers, if any, as it from time to time considers desirable, and the officers may, subject to any restraints or limitations imposed by the Managing Member or this Agreement, exercise the authority granted to them.
(c) Notwithstanding the foregoing, during the Recapture Expiration Date , the Managing Member shall not have any authority to:
(i) make any transfer of the Property to, or allow the Property to be held directly or indirectly by a Disqualified Transferee;
(ii) transfer its Membership Interest or consent to a transfer of a Membership Interest to a Disqualified Transferee;
(iii) to do any act which would make it impossible to carry on the ordinary business of the Company;
(iv) do any of the following without the Master Tenant Member’s approval:
(A) to cause or allow the Company to make any sale, transfer or other disposition of the Property or mortgage, pledge or otherwise encumber t he Property; provided, that, the foregoing limitation shall not apply to the Company’s lease of the Property to the Master Tenant Member pursuant to the Master Lease between the Company and the Master Tenant Member (the “Master Lease”) or Permitted Encumbrances;
(B) to transfer its Membership Interest or consent to the transfer of a Member’s Interest (provided nothing herein shall restrict transfers of membership interest within the Managing Member, provided the Managing Member remain under the control of [Brenda Pree]);
(C) require additional capital contributions from the Members , if the same will reduce or otherwise alter the Master Tenant Member’s Percentage Interest;
(D) terminate, dissolve or wind up the Company;
(E) terminate the Master L ease prior to the expiration of the Recapture Expiration Date.
(F) make or refinance any Company mortgage loans provided, that such consent will not be required if the making or refinancing of such loan when combined with all other debt on the Project results in a loan to value ratio of 75% or less and a debt service coverage ratio of 1:20 to 1 or greater, then Master Tenant 1M - Page 301
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Investment Member’s Approval shall not be required; provided further, that each that each loan secured by a deed of trust or mortgage on the Property to the Company enters into a subordination, non-disturbance and attornment agreement with the Project Company in a form reasonably satisfactory to Master Tenant Investment Member ; provided further , that, the foregoing notwithstanding, the Master Tenant Member will not consent to any refinancing in the CMBS market, or any financing that requires or obligates the Master Tenant Member, its members, or Master Tenant Investment Member to: (i) limit or condition its right to declare or file for bankruptcy protection under federal or state law; or (ii) appoint any independent or special director, officer, partner or manager, or any springing or special member, shareholder, officer, director, manager or partner;
(G) following the date the Property is Placed In Service, cause the Company to construct any new capital improvements or replace any existing capital improvements outside of the ordinary course of business (provided that no consent shall be required for tenant fit up or other such similar expenses unless such tenant fit up or other such similar expenses could cause recapture of or otherwise jeopardize the Historic Tax Credits with respect to the Property);
(H) to do any act with respect to the Company’s interest in the Property which could cause recapture of or otherwise jeopardize or diminish the amount of the Historic Tax Credits with respect to the Property;
(I) make an election pursuant to Section 6221(b) of the Code to avoid application of Section 6221(a) of the Code to the Company or the Members;
(J) make an election pursuant to Section 6226(a) of the Code to avoid application of Section 6225 of the Code to the Company or the Members.
4.3 Meetings and Actions of the Managing Member.
(a) Manner of Acting. The affirmative act of the Managing Member on behalf of the Company shall be the act of the Company. Formal authorization shall not be required. (b) Action Without a Meeting . Any action required or permitted to be taken by the Managing Memb er may be taken without a meeting, if such action is evidenced by a written consent by the Managing Member. Such writing shall be included in the Company records. Any action taken pursuant to this Section 4.3 shall be effective when the Managing Member h as executed the written consent, unless the consent specifies a different effective date.
4.4 Officers of the Company. The Company may have those officers as may be designated by the Managing Member from time to time. Subject to the terms of this Agreeme nt or as otherwise determined by the Managing Member, each officer shall have such powers as are delegated to him/her from time to time by the Managing Member and as are usually exercised by comparably designated officers of a California corporation, and each officer shall have the power to bind the Company through the exercise of those powers, to the extent consistent with the terms 1M - Page 302
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hereof, in all cases subject to the approval rights reserved to the Managing Member and the Members.
4.5 Limitations on Membe rs’ Powers. Except as expressly authorized by the Managing Member, no Member other than a Member serving as an officer and acting in that capacity is an agent of the Company or has any right or authority, either expressed or implied, to enter into contracts or make any commitments on behalf of the Company or to bind the Company.
4.6 Performance of Duties; Liability of Managing Member. The Managing Member shall not be liable to the Company or to any Member for any loss or damage sustained by the Company or any Member, unless the loss or damage shall have been the result of fraud, deceit, gross negligence, reckless or intentional misconduct or a knowing violation of law by such Managing Member. In performing his/her duties, a Managing Member shall be entitled to rely on information, opinions, reports or statements, including financial statements and other financial data, of the following persons or groups unless it has knowledge concerning the matter in question that would cause such reliance to be unwarranted and provided that such Managing Member, acts in good faith and after reasonable inquiry when the need therefor is indicated by the circumstances:
(a) One or more officers, employees or other agents of the Company whom the Managing Member reasonably believes to be reliable and competent in the matters presented; (b) Any attorney, independent accountant, or other person as to matters which the Managing Member reasonably believes to be within such person’s professional or expert competence; or
(c) A committee upon which the Managing Member does not serve, duly designated in accordance with a provision of the Articles or this Agreement, as to matters within its designated authority, which committee the Managing Member reasonably believes to merit competence.
4.7 Representations, Warranties and Covenants. The Managing Member hereby represents and warrants specifically to the Master Tenant Member that the following are true and correct in all material respects as of the date hereof, and, as applicable, covenants to the Master Tenant Member that for so long as the Master Tenant is a member of the Company that:
(a) No litigation, action, investigation, event, or proceeding is pending or, to its knowledge, is threatened which, if adversely resolved, would: (i) have an adverse effect on the Company or the Property; (ii) have an adverse effect on the ability of the Managing Member or any of its affiliates to perform its respective obligations under this Agreement; (iii) have an adverse effect on the financial condition of the Managing Member; or (iv) constitute or result, if true, in a material breach of any representation, warranty, covenant, or agreement set forth in the Agreement;
(b) No material default (or event which, with the giving of notice or the passage of time or both, would constitute a material default) has occurred and is continuing under any of the mortgages, loan documents, or any other contract, agreement, or instrument t o which the Company or the Managing Member are subject. All mortgages and loan documents of the Company are in full force and effect. The Company shall forward to the Master Tenant Member, within ten (10) days of the Company’s receipt thereof, a copy of any written notice of default given to the 1M - Page 303
14 Error! Unknown document property name.
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Company or the Managing Member;
(c) The Company owns the Property, free and clear of any liens, charges, or encumbrances other than the Permitted Encumbrances, and the Managing Member has not received notice of any such liens, charges, or encumbrances;
(d) The Managing Member has full power to enter into this Agreement and the consummation of all transactions contemplated herein by both the Managing Member and the Company does not and will not result in any mater ial breach or violation of, or default under, any governing instrument of the Managing Member or the Company or any agreements by which either the Managing Member or the Company or any of Managing Member or the Company’s property is bound, or under any applicable law, administrative regulation, or court decree;
(e) To the knowledge of Managing Member, after diligent investigation and inquiry, the Property and/or the Company is not in violation of any federal, state, local or foreign law, statute, executive order, licensing requirement, permit requirement, rule, regulation, judicial and/or administrative decision including, but not limited to, CERCLA, SARA, the Federal Water Pollution Control Act, the Federal Clean Air Act, Clean Water Act, Safe Drinking Wa ter Act, RCRA, HSWA, the Federal Solid Waste Disposal Act, each as amended, or any statute related to the environment enacted by any state, local and/or foreign governments and authorities (including, but not limited to, municipal sewage authorities) or any rules, regulations, ordinances or requirements promulgated thereunder. The Managing Member has not received any notice from any source whatsoever of the existence of any such hazardous condition on the Property or of a violation of any such local, state or federal law or regulation with respect to the Property. If any such substances (including lead-based paint and asbestos) or pollutant has been found to exist or be present, including any substances identified in the environmental reports, it has been either removed from the Property and disposed of or encapsulated and/or otherwise corrected, contained and made safe and inaccessible, or will be removed in accord with the construction contract entered into by the Company all in accordance with federal, state and local statutes, laws, rules and regulations, any recommendations set forth in the Environmental Report(s);
(f) The Managing Member has delivered to the Master Tenant Member true copies of all documents material to the Master Tenant Member's respective investments in the Company and true copies of all amendments to such documents;
(g) No portion of the Company Property is or will be treated as "tax- exempt use property" as defined in Section 168(h) of the Code;
(h) The portion of the Property consisting of the building(s) and structural components of the building(s) qualifies as a “certified historic structure” and any rehabilitation of such portion of the Property constitutes a “certified rehabilitation” as such terms 1M - Page 304
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are defined in Section 47 of the Code;
(i) the qualified rehabilitation expenditures with respect to the Project are anticipated to be not less than $[__________] and the Historic Tax Credits with respect to the Project are anticipated to be not less than $[___________];
(j) The Managing Member shall cause the rehabilitation to be completed by the Company substantially in accordance with construction contracts and plans and specifications, and all of the conditions and requirements of Part 2 of the Hi storic Preservation Certification Application approved by the U.S. Department of Interior, National Park Service. In addition, if required by law, the Managing Member shall use its best efforts to obtain a certificate of occupancy for the Project no later than December 31, 2025. The Managing Member shall obtain all building, zoning, and other applicable certificates, permits, and licenses necessary to permit the rehabilitation, use, occupancy, and operation of the Property that are obtainable only after completion of the Property or a specified portion thereof;
(k) The Managing Member will cause the Company to comply with all of the terms and conditions of the Master Lease;
(l) The Managing Member will take all actions necessary or appropriate to prevent any portion of the Company property from being treated as "tax exempt use property" as defined in Section 168(h) of the Code;
(m) The Managing Member will comply with the requirements of Section 47 of the Code and the regulations thereunder;
(n) The Managing Member shall cause the Company to take all actions necessary in order to timely obtain the final certification of completed work by the Secretary of the Interior or his agent;
(o) The Company has executed, or the Managing Member shall cause the Company to execute, a pass- through agreement and the Managing Member will cause the Company to make a valid election under Section 50(d) of the Code and former Treasury Regulation 1.48-4 to pass the Historic Tax Credit through to the Master Tenant Member, and has not undertaken any actions (or omissions where action would be required) which would prevent the Company from making a valid election to pass through the Historic Tax Credit to the Master Tenant Member; (p) The Company shall be responsible for all c osts associated with filings for the National Park Service and determining the qualified rehabilitation expenditures, as defined in Section 47(c) of the Code, associated with obtaining the Historic Tax Credit;
(q) The Managing Member shall not make an elec tion pursuant to Section 6221(b) of the Code to avoid application of Section 6221(a) to the Company or the Members. 1M - Page 305
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The Managing Member shall also not make an election pursuant to Section 6226(a) of the Code to avoid application of Section 6225 to the Company or the Members. (r) The Managing Member shall cause the Company to use all reasonable efforts to use the Master Tenant Investment Member’s products throughout the course of the rehabilitation and ongoing maintenance of the Project, including, but not limited to, paints, stains, caulks and sealants. Furthermore, the Managing Member shall cause the Company to promote the use of the Master Tenant Investment Member’s products to lessees (if any) prior to and during the course of the lessees’ build- out of leased space.
ARTICLE 5: TAXES
5.1 Income Tax Returns. Within 120 days after the end of each taxable year, the Company shall use its best efforts to send to each of the Member all information necessary for the Member to complete its federal and state income tax or info rmation returns and a copy of the Company’s federal, state, and local income tax or information returns for such year.
5.2 Tax Matters. [Brenda Pree] shall act as "Partnership Representative" of the Company under Section 6223 of the Code, to represent the Company (at the Company’s expense) in connection with all examinations of the Company’s affairs by tax authorities and to expand Company funds for professional services and costs associated therewith.
The Partnership
Representative shall take no final action in such capacity with respect to audit matters affecting the Historic Tax Credits related to the Property without the prior written authorization or consent of the Members, other than such action as the Partnership Representative may be required to take by law.
ARTICLE 6: MEMBERSHIP — MEETINGS, VOTING
6.1 Voting Rights. Any Member shall have the right and power to vote on all matters with respect to which this Agreement or California law requires or permits such Member action. Voting shall be based on Membership Interests. Notwithstanding anything else to the contrary in this Agreement, the vote of the Member(s) holding a majority of the Membership Interests and the vote and consent of the Managing Member shall be required to approve or carry an action that falls under the definition of and constitutes a Material Action:
“Material Action” means any consolidation or merger of Company with or into any Person, or any sale of all or substantially all of the assets of Company, or the institution of proceedings to have Company adjudicated bankrupt or insolvent, or any consent to the institution of bankruptcy or insolvency proceedings against Company or the filing of any petition seeking, or consent to, reorganization or relief with respect to Company under any applicable federal or state law relating to bankruptcy, or any consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other si milar official) of Company or a substantial part of its property, or any assignment for the benefit of creditors of Company, or admission in writing of Company inability to pay its debts generally as they become due, or any action in furtherance of any such action, or to the fullest extent permitted by law, any dissolution or liquidation of the Company.
6.2 Meetings. Regular or annual meetings of the Member are not required but may be held at such time and place as the Member deem necessary or desirable for the reasonable management of the Company.
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6.3 Certification of Membership Interests.
Each Membership Interest in the Company shall constitute and shall remain a “security” within the meaning of (i) Section 8-102(a)(15) of the Uniform Commercial Code as in effect from time to time in the State of California and (ii) the Uniform Commercial Code of any other applicable jurisdiction that now or hereafter substantially includes the 1994 revisions to Article 8 thereof as adopted by the American Law Institute and the National Conference of Commissioners on Uniform State Laws and approved by the American Bar Association on February 14, 1995.
Notwithstanding any provision of this Agreement to the contrary, to the extent that any provision of this Agreement is inco nsistent with any non- waivable provision of Article 8 of the Uniform Commercial Code as in effect in the State of California (the “ UCC”), such provision of Article 8 of the UCC shall be controlling.
Without any further act, vote or approval of any Member, or director or officer of the Company or any Person, the Company shall issue a new Membership Interest Certificate in place of any Membership Interest Certificate previously issued if the holder of the Membership Interests in the Company represented by suc h Membership Interest Certificate, as reflected on the books and records of the Company:
(1) makes proof by affidavit, in form and substance satisfactory to the Company, that such previously issued Membership Interest Certificate has been lost, stolen or destroyed;
(2) requests the issuance of a new Membership Interest Certificate before the Company has notice that such previously issued Membership Interest Certificate has been acquired by a purchaser for value in good faith and without notice of an adverse claim; (3) if requested by the Company, delivers to the Company a bond, in form and substance satisfactory to the Company, with such surety or sureties as the Company may direct, to indemnify the Company against any claim that may be made on account of the alleged loss, destruction or theft of the previously issued Membership Interest Certificate; and
(4) satisfies any other reasonable requirements imposed by the Company.
Upon a Member’s transfer in accordance with the provisions of this Agreement of any or all Membership Interests in the Company represented by a Membership Interest Certificate, the transferee of such Membership Interests in the Company shall deliver such Membership Interest Certificate to the Company for cancellation (executed by such tran sferee on the reverse side thereof), and the Company shall thereupon issue a new Membership Interest Certificate to such transferee for the percentage of Membership Interests in the Company being Transferred and, if applicable, cause to be issued to such Member a new Membership Interest Certificate for that percentage of Membership Interests in the Company that were represented by the canceled Membership Interest Certificate and that are not being transferred.
6.4 Registration of Membership Interests. The Company shall maintain books for the purpose of registering the transfer of Membership Interests. Notwithstanding any provision of this 1M - Page 307
18 Error! Unknown document property name.
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Agreement to the contrary, a transfer of Membership Interests requires delivery of an endorsed Membership Interest C ertificate and shall be effective upon registration of such transfer in the books of the Company.
ARTICLE 7: DISSOLUTION AND WINDING UP
7.1 Dissolution. Subject to the provisions of Article 2 hereof, the Company shall be dissolved upon the first occurrence of the following events:
(a) The vote of the Members and the Managing Member to dissolve the Company. (b) Entry of a decree of judicial dissolution under Section 17351 of the California Corporations Code.
7.2 No automatic dissolution upon certain events . Neither the death, incapacity, disasso - ciation, bankruptcy nor withdrawal of a Member shall automatically cause a dissolution of the Company.
ARTICLE 8: INDEMNIFICATION
8.1 Indemnification. The Company shall have the power to indemnify any Person who was or is a party, or who is threatened to be made a party, to any proceeding by reason of the fact that such Person was or is a Member, Managing Member, officer, director, employee, or other agent of the Company, was or is serving at the request of the Company as a Managing Member, officer, director, employee, or other agent of another limited liability company, corporation, partnership, joint venture, trust, or other enterprise, against expenses, judgments, fines, settlements, and other amounts actually and, reasonably incurred by such Person reasonably believed to be in the best interests of the Company, and , in the case of a criminal proceeding, such Person had no reasonable cause to believe that the Person’s conduct was unlawful. The termination of any proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the Person did not act in good faith and in a manner that such Person reasonably believed to be in the best interests of the Company, or that the Person had reasonable cause to believe that the Person’s conduct was unlawful.
To the extent that an agent of the Company has been successful on the merits in defense of any proceeding, or in defense of any claim, issue, or matter in any such proceeding, the agent shall be indemnified against expenses actually and reasonably incurred in connection with the proceeding. In all other cases, indemnification shall be provided by the Company only if authorized in the specific case unanimously by all of the Members. “Proceeding,” as used in this section, means any threatened, pending, or completed action or proceeding, whether civil, criminal, administrative, or investigative.
8.2 Expenses. Expenses of each Person indemnified under this Agreement actually and reasonably incurred in connection with the defense or settlement of a proceeding may be paid by the Company in advance of the final disposition of such proceeding, as authorized by the Member or Managing Member, as the case may be, who are not seeking indemnification upon receipt of an undertaking by such Person to repay such amount unless it shall ultimately be determined that such Person is entitled to be indemnified by the Company.
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“Expenses,” as used in this section, includes, without limitation, attorney fees and expenses of establishing a right to indemnification, if any, under this section.
ARTICLE 9: GENERAL PROVISIONS
9.1 Entire Agreement; Amendment . This Agreement constitutes the whole and entire agreement of the parties hereto with respect to the subject m atter of this Agreement, and it shall not be modified or amended in any respect except by a written instrument executed by all of the Members. This Agreement replaces and supersedes all prior written and oral agreements by and among the Members, including, without limitation the Operating Agreement. Notwithstanding anything to the contrary in this Agreement, this Agreement may not be modified, altered, supplemented or amended.
9.2 Governing Law; Severability . This Agreement shall be construed and enforced in accordance with the internal laws of the State of California. If any provision of this Agreement is determined by any court of competent jurisdiction or arbitrator to be invalid, illegal, or unenforceable to any extent, that provisions shall, if possible, be construed as though more narrowly drawn, if a narrower construction would avoid such invalidity, illegality, or unenforceability or, if that is not possible, such provision shall, to the extent of such invalidity, illegality, or unenforceability, be severed, and the remaining provisions of this Agreement shall remain in effect.
9.3 Notices. Unless otherwise specified herein, all notices, demands requests or other communications which may be or are required to be given to, served upon or sent by the Company, the Managing Member, the Master Tenant, or a Developer pursuant to this Agreement shall be in writing and shall be deemed given or sent (i) two (2) Business Days after deposit, as registered or certified mail, postage and fees prepaid, in the United States mails; (ii) one (1) Business Day after deposit with Federal Express, United Parcel Service, DHL WorldWide Express, or Airborne Express, for overnight delivery, charges prepaid or charged to the sender's account; or (iii) upon receipt of electronic confirmation successful transmission by facsimile (with a copy thereof sent via one of the methods of delivery set forth in clauses (i) or (ii) hereof), delivered or addressed as follows:
To the Company, Managing Member, and Master Tenant:
3200 E. Tahquitz Canyon Way
Palm Springs, CA 92262
Attention: Director of Finance and Treasurer
With a copy to: Best Best & Kreiger LLP
3390 University Ave, 5th Floor
Riverside, CA 92501
Attention: John Rottschaefer
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City: 3200 E. Tahquitz Canyon Way
Palm Springs, CA 92262
Attention: Director of Finance and Treasurer
With a copy to: Best Best & Kreiger LLP
3390 University Ave, 5th Floor
Riverside, CA 92501
Attention: John Rottschaefer
Foundation: 1775 E. Palm Canyon Dr,
Suite 110-1028
Palm Springs, CA 92264
Attention: Chief Executive Office
With a copy to: Bocarsly Emden Cowan Esmail & Arndt LLP 633 West Fifth Street, Suite 5880
Los Angeles, CA 90071
Attention: Robert F. Cowan
Each Member may change its address for notice purposes by giving written notice of such change (in accordance with the foregoing provisions) to the other Members and to the Company, and upon receipt of any such notice, the Managing Member shall cause the records of the Company affairs maintained by the Managing Member to be updated to reflect such change of address.
9.4 Counterparts; Facsimile Signatures.
(a) This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which shall together constitute one and the same instrument. It shall not be necessary for any counterpart to bear the signature of all parties hereto. (b) This Agreement and any amendments hereto, to the extent signed and delivered by facsimile or other electronic means, including, but not limited to Adobe Sign or DocuSign, shall be treated in all manner and respects as an original agreement and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person.
9.4 Binding Effect. Notwithstanding any other provision of this Agreement, the Member agrees that this Agreement, including, without limitation, the provisions set forth in Section 2.7 hereof, constitutes a legal, valid and binding agreement of the Member, and is enforceable against the Member in accordance with its terms.
9.5 Third Party Beneficiary. This Agreement is made solely for the benefit of the parties to this Agreement and their respective permitted successors and assigns, and no other Person or 1M - Page 310
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entity shall have or acquire any right by virtue of this Agreement.
[Signature page follows]
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IN WITNESS WHEREOF , the Member has caused this Amended and Restated Agreement to be executed by its respective officers or agents thereunto duly authorized on the date first above written.
COMPANY:
PALM SPRINGS PLAZA THEATRE LANDLORD, LLC,
a California limited liability company
By: Palm Springs Theatre Plaza Managing Member, LLC,
a California limited liability company
By: ________________________
Name: _____________________
Title: ______________________
MEMBERS:
PALM SPRINGS THEATRE PLAZA MANAGING MEMBER, LLC,
a California limited liability company
By: ________________________
Name: _____________________
Title: ______________________
PALM SPRINGS PLAZA THEATRE MASTER TENANT, LLC,
a California limited liability company
By: Palm Springs Theatre Plaza Managing Member, LLC,
a California limited liability company
By: ________________________
Name: _____________________
Title: ______________________
1M - Page 312
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EXHIBIT A
MEMBERS
The following Persons are the existing Members of the Company, and their respective percentage interests are set forth below.
Name Percentage Interest
Plaza Managing Member, LLC 95%
Palm Springs Plaza Theatre Master Tenant, LLC 5%
TOTAL 100%
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CITY COUNCIL STAFF REPORT
DATE: SEPTEMBER 25, 2025 CONSENT CALENDAR
SUBJECT: SECOND READING AND ADOPT ION OF ORDINANCE NO. 2117 AMENDING PALM SPRINGS MUNICIPAL CODE SECTIONS 2.05 AND
2.06 TO CLARIFY COUNCILMEMBER REVIEW OF DECISIONS OF
VARIOUS BOARDS AND COMMISSIONS AND ASSOCIATED
TIMEFRAMES
FROM: Scott C. Stiles, City Manager
BY: Department of Planning Services
SUMMARY:
This is the second reading of an ordinance amending the Palm Springs Municipal Code Sections 2.05 and 2.06 to clarify Councilmember review of decisions of various boards and commissions and associated timeframes.
RECOMMENDATION:
Conduct a second reading by title only and adopt an Ordinance entitled:
“AN ORDINANCE AMENDING SECTIONS 2.06.030( a) AND (D) AND
2.05.040 OF THE PALM SPRINGS MUNICIPAL CODE, REGARDING
CITY COUNCIL’S AUTHORITY TO REVIEW DECISIONS BY CITY
BOARDS AND COMMISSIONS WHOSE MEMBERS ARE NO T
APPOINTED BY THE CITY COUNCIL, ALLOWING NOTICE OF
DECISIONS TO BE SERVED BY ELECTRONIC MAIL, AND
ESTABLISHING A CONSISTENT 15 DAY DEADLINE BY WHICH TO
APPEAL A DECISION BY A BOARD OR COMMISSION TO THE CITY
COUNCIL”
STAFF ANALYSIS:
On September 10, 2025, Ordinance No. 2117 was introduced by first reading, with the following vote:
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City Council Staff Report
September 25, 2025 -- Page 2
Ordinance – Councilmember Call-Up of Board and Commission Decisions (Second Reading)
Vote:
AYES: Mayor deHarte; Mayor Pro Tem Soto; Councilmember Bernstein; Councilmember Garner; Councilmember Ready
City staff recommends that the City Council conduct a second reading, thereby adopting the accompanying ordinance. If the Council adopts the ordinance, it would go into effect 30 days thereafter.
REVIEWED BY:
Department Director: Christopher Hadwin
City Attorney: Jeffrey Ballinger
City Manager: Scott Stiles
ATTACHMENTS:
A. Ordinance No. 2117
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ATTACHMENT A
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55575.18145\44115803.1
ORDINANCE NO. 2117
AN ORDINANCE AMENDING SECTIONS 2.06.030(a) AND
(D) AND 2.05.040 OF THE PALM SPRINGS MUNICIPAL
CODE, REGARDING CITY COUNCIL’S AUTHORITY TO
REVIEW DECISIONS BY CITY BOARDS AND
COMMISSIONS WHOSE MEMBERS ARE NOT
APPOINTED BY THE CITY COUNCIL, ALLOWING NOTICE
OF DECISIONS TO BE SERVED BY ELECTRONIC MAIL ,
AND ESTABLISHING A CONSISTENT 15 DAY DEADLIN E
BY WHICH TO APPEAL A DECISION BY A BOARD OR
COMMISSION TO THE CITY COUNCIL
City Attorney’s Summary
This ordinance addresses a procedural loophole
unintentionally created with the formation of the Architectural Review Committee as an adju nct to the Planning
Commission, authorizes notice of decisions to be ser ved by electronic mail, and ensures consistent application of the deadline by which to appeal a decision to the City Council .
City Council finds that it should have the same ability to review decisions of city boards and commissions whose members it does not appoint as it has to review the decisions of board s and commissions whose members it does appoint . This
Ordinance e liminates the distinction between boards and commission based on how its members are selected and
affirms City Council authority to review all such decisions that are not otherwise before it.
WHEREAS, the City of Palm Springs is a charter city organized pursuant to Article XI of the California Constitution and pursuant to the authority so granted, the City has the power to make and enforce within its limits all ordinances and regulations with respect to municipal affairs not in conflict with its own charter. Such police powers include without limitation the ability to adopt regulations pertaining generally to the protection and promotion of the public health, safety, and welfare.
WHEREAS, City of Palm Springs Municipal Code (PSMC) Section 2.06.30(a) of Chapter 2.06 allows any member of the City Council to initiate a review of any decision or action of a City Council appointed commission or board that is not otherwise before the City Council by giving notice to the City Clerk; and
WHEREAS, when Section 2.06.030 was enacted, the City Council appointed all members of all city boards and commissions;
WHEREAS, in 2021, the City Council created the Architectural Review Committee (ARC) to, among other things, issue decisions on Major Architectural Review applications as an adjunct to the City’s Planning Commission and whose members are appointed by the Planning Commission; and
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55575.18145\44115803.1
ORDINANCE NO. 2117
2 WHEREAS, Section 2.06.030 effectively precludes the City Council from reviewing decisions of members of boards or commissions that they do not directly appoint, which was not the intention of the section; and
WHEREAS, the City Council finds that decisions of all City boards and commissions, regardless of how its members are selected, have the ability to effect public health, safety, and welfare, and therefore cannot be delegated without the opportunity for review by the City Council; and
WHEREAS, the City Council also finds that the manner in which notice s of decisions of City boards and commissions are communicated to those entitled to such notice should include electronic mail to avoid unnecessary delay; and
WHEREAS, the City Council also finds that the deadlines by which to appeal a decision by City board or commission to the City Council should be the same for applicants and for members of the public to eliminate risk of confusion or inconsistent application; and
WHEREAS, the City Council has carefully reviewed and considered all of the evidence presented in connection with the hearing on this proposed Ordinance, including, but not limited to, the staff report, and all written and oral testimony presented; and
WHEREAS, the City Council finds that approval of this Ordinance would accomplish the following:
1. Update the City’s Municipal Code to eliminate a non-substantive distinction between City boards and commissions based on who appoints their members.
2. Ensure that decisions made by all City boards and commissions are subject to review by the publically elected members of the City Council.
3. Update the manner by which the City may provide required notice of decisions to include electronic mail.
4. Standardize the deadlines by which an appeal or a request to review a decision by a City board or commission must be filed.
WHEREAS, City Council finds that closing the identified loophole and eliminating the risk of ambiguous or inconsistent deadlines is important to protect the public health, safety and welfare and should be addressed at City Council’s earliest opportunity; and
WHEREAS, the proposed Ordinance is not subject to the California Environmental Quality Act ("CEQA") ( Public Resources Code Section 21000 et seq.) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15061(b)(3) (that CEQA applies only to projects which have the potential for causi ng a significant effect on the environment.) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical changes to the environment, directly or indirectly. The 1N - Page 5
55575.18145\44115803.1
ORDINANCE NO. 2117
3 Amendments will result in policy and code changes providing additional oversight to the elected City Council for the City of Palm Springs over the actions of their appointed bodies;
THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1. Incorporation of Recitals. The findings and determinations refle cted above are true and correct and are incorporated by this reference as the cause and foundation for the action taken by and through this Ordinance.
SECTION 2. Amendment to PSMC. P SMC Chapter 2.06 , BOARDS AND COMMISSIONS – GENERAL PROVISIONS, is amended as follows:
Section 2.06.030, Councilmember review of decisions
(a) Any member of the City Council of the City of Palm Springs may initiate a review of any decision or action of a City Council appointed created commission or board that is not otherwise before the City Council by giving notice thereof to the City Clerk. The Notice of Review shall be submitted to the City Clerk no later than fifteen days following the date of the action which is the subject of the review.
The Notice of Review shall not be deemed an appeal of a commission or board decision or action and the hearing thereon shall be conducted pursuant to the provisions of this Section.
. . .
(d) The action of the council appointed created commission or board shall be set aside and the City Council shall conduct a public hearing de novo on the review.
All persons shall have the right to be heard by the City Council either in person, in writing, or by representative. Technical rules of evide nce shall not apply in proceedings under this Section. No party shall have the right to cross-examine any other party or witness except for good cause shown to the satisfaction of the City Council.
SECTION 3. Amendment to PSMC. PSMC Chapter 2.05, APPEAL TO CITY COUNCIL, is amended as follows:
Section 2.05.040 Time of filing
The notice required by Section 2.05.030 shall be filed no later than ten fifteen days following the date of mailing to appellant of notice of the action from which the appeal is taken . If written notice of an action is required, such notice may be provided by any legal means, including electronic mail. or, if there is no such mailing and/or none is required, no later than fifteen days following the date of the action which is the subject of the appeal. The city clerk shall furnish a copy of the appeal to the respondent within five days after filing.
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55575.18145\44115803.1
ORDINANCE NO. 2117
4 SECTION 4. Compliance with CEQA. The City Council finds that this Ordinance is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15061(b)(3) (that CEQA applies only to projects which have the potential for causing a significant effect on the environment.) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical changes to the environment, d irectly or indirectly. The Amendments will result in policy and code changes providing additional oversight to the elected City Council for the City of Palm Springs over the actions of their appointed bodies.
SECTION 5. Severability. If any sentence, clause, or phrase of this Ordinance, or any part thereof , is for any reason held to be unconstitutional, such decision shall not affect the validity of the remaining portion of this ordinance or any part thereof. The City Council hereby declares that it would have passed each sentence, clause, or phrase thereof, irrespective of the fact that any one or more sentence, clause, or phrase be declared unconstitutional.
SECTION 7. Effective Date . This Ordinance shall become effective 30 days following its adoption.
PASSED, APPROVED, AN D ADOPTED BY THE PAL M SPRINGS CITY COUNCIL THIS ___TH DAY OF ________________ 2025.
RON deHARTE
MAYOR
ATTEST:
BRENDA PREE, MMC, CERA
CITY CLERK
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55575.18145\44115803.1
ORDINANCE NO. 2117
5 CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS )
I, BRENDA PREE, City Clerk of the City of Palm Springs, do hereby certify that Ordinance No. 2117 is a full, true, and correct copy, and was introduced by the City Council at a regular meeting held on the 10th day of September, 2025, and adopted at a regular meeting of the City Council held on the XXth day of MONTH, 2025, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Palm Springs, California, this ______ day of ______________, 2025.
Brenda Pree, City Clerk
City of Palm Springs, California
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CITY COUNCIL STAFF REPORT
DATE: SEPTEMBER 25, 2025 CONSENT CALENDAR
SUBJECT: APPROVE CONTRACT SERVICES AGREEMENT NO. 25P268 WITH GOSEETELL NETWORK, INC. DBA SPARKLOFT MEDIA FOR
ADVERTISING SERVICES FOR PALM SPRINGS INTERNATIONAL
AIRPORT
FROM: Scott C. Stiles, City Manager
BY: Aviation Department
SUMMARY:
Award a contract services agreement with GoSeeTell Network, Inc. DBA Sparkloft Media for advertising services for the Palm Springs International Airport (Airport).
RECOMMENDATION:
1) Approve Contract Service s Agreement No. 25P268 (Attachment A ) with GoSeeTell Network, Inc. DBA Sparkloft Media to provide advertising services for the Palm Springs International Airport in an amount not to exceed $3, 674,500 for an initial three-year term beginning October 1, 2025, through September 30, 2028, with two one-year extension options at the City’s sole discretion.
2) Authorize the City Manager or designee to execute all necessary documents.
BUSINESS PRINCIPAL DISCLOSURE:
According to the Public Integrity Disclosure form ( Attachment B) submitted on April 1, 2025, GoSeeTell Network, Inc. DBA Sparkloft Media is registered in the states of Oregon and California.
BACKGROUND:
Palm Springs International Airport has experienced tremendous growth since 2019. One of the Airport’s main goals was to convert more of the Airport’s seasonal routes to year - round routes, and to achieve that goal the Airport must continue its work to establish the Palm Springs International Airport as the airport of choice, increase area awareness about the Airport, and to grow passenger demand.
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City Council Staff Report
September 25, 2025 -- Page 2
Airport Advertising Services Contract
It is important that the Airport appeals to a broad audience beyond the city limits of Palm Springs, and the Airport’s catchment area includes all nine cities in the Coachella Valley, the High Desert communities, the San Gorgonio Pass communities, and Inland Empire residents who can easily choose between Palm Springs International Airport or another area airport.
The Airport’s previous advertising partnership play ed a vital role in raising regional awareness and promoting the value of Palm Springs International Airport. Through strategic advertising campaigns across a variety of platforms such as social, digital, print, and broadcast which helped ensure that traveler s throughout the region are informed about the convenience, connectivity, and benefits of flying from the Palm Springs International Airport. These efforts also support ed sustained revenue growth, signaling strong passenger demand to the Airport’s airline partners, which is an essential factor in retaining existing air service and reinforcing the case for continued airline investment in the Palm Springs International Airport.
Depicted in Figure 1 is the breakout of the media allowance that has been fully expended and the flat fee services that were paid over the last fiscal years for Airport advertising services:
Fiscal Year
Media Buying
Allowance
Agency Flat Fee
Services Total
2022-2023 $425,000 $75,000 $500,000
2023-2024 $650,000 $205,050 $855,050
2024-2025 $1,000,000 $252,800 $1,252,800
Total Paid for Media & Service Fees $2,607,850
Figure 1
Depicted in Figure 2 is a comparison of Total Passengers for January – July 2024 and 2025.
Total Passengers
Month 2024 2025 % of Passenger Increase
January 336,778 354,786 5.3%
February 382,596 386,997 1.2%
March 472,972 493,450 4.3%
April 382,278 406,506 6.3%
May 246,490 249,008 1.0%
June 131,639 139,720 6.1%
July 112,705 125,080 11.0%
Figure 2
On September 9, 2025, the Airport Commission’s Marketing and Business Development Committee voted (7-0) in favor to recommend to the Airport Commission to vote in favor 1O - Page 2
City Council Staff Report
September 25, 2025 -- Page 3
Airport Advertising Services Contract
of recommending the approval of Contract Services Agreement No. 25P268 with GoSeeTell Network, Inc. DBA Sparkloft Media to the City Council.
On September 17, 2025, the Airport Commission unanimously voted (15-0) in favor of recommending to the City Council the approval of Contract Services Agreement No. 25P268 with GoSeeTell Network, Inc. DBA Sparkloft Media.
STAFF ANALYSIS:
The Aviation Department worked with the Procurement and Contracting Department to issue a Request for Proposals (RFP 01-25) to find a contractor for the services needed.
RFP 01-25 was advertised in The Desert Sun on March 2 and 9, 2025 and published on the PlanetBids website, and 27 proposals were received by the deadline of April 1, 2025, as follows:
• 16x9 inc., Oakville, ON
• Ark Marketing and Media Solutions, Inc., San Diego, CA • BGF LLC DBA OMG PSP, Palm Springs, CA
• Blackhorse Management, LLC, Winston Salem, NC
• C&K Media Solutions, Escalon, CA
• Commune Communication Corporation, Long Beach, CA
• Entravision Communications Corporation, Palm Desert, CA • GoSeeTell Network, Inc. DBA Sparkloft Media, Portland, OR • High Wide & Handsome Marketing, LLC, Los Angeles, CA
• Hounder, LLC, Redlands, CA
• Invisible Collective
• Jacob’sEye, LLC (JacobsEye Marketing Agency), Atlanta, GA • JNS Media Specialists, Inc. DBA JNS Next, Palm Desert, CA • Karsh Hagan, LLC, Denver, CO
• Leap Five, LLC DBA Matter, Louisville, KY
• Loma Media Partners, San Diego, CA
• London : Los Angeles, Los Angeles, CA
• Mixo Ads Inc., Chicago, IL
• My Emerald Hands, San Diego, CA
• Nectr LLC (Nectr Social), Redmond, WA
• Oracle Method Group Inc., Corona, CA
• Propellant Media, Atlanta, GA
• Push Media Inc., DBA Gleeson Digital Strategies, Sacramento, CA • RK Venture, LLC, Albuquerque, NM
• Silvercrest Advertising, Inc., Palm Springs, CA
• The Working Assembly, New York, NY
• Voxpop, LLC, Hermosa, CA
• Wright Dynamics, LLC, Windsor Mill, MD
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City Council Staff Report
September 25, 2025 -- Page 4
Airport Advertising Services Contract
The evaluation team made up of City staff from the Aviation Department, representatives from Daley Strategies and Visit Greater Palm Springs, and a local Palm Springs graphic designer from Krafix Graphic, Inc. evaluated the proposals received against published criteria that included the firms experience, the staff experience, understanding of the scope of work, local preference, price, and interviews.
GoSeeTell Network, Inc. DBA Sparkloft Media was ranked the highest by the evaluation team and is being recommended for award of the contract.
Continuing to have a partnership with an advertising agency is a strategic investment that goes well beyond simply placing ads. An agency brings specialized expertise, creative innovation, and data -driven insights that can increase passenger traffic, build stronger brand awareness, and grow non-aviation revenue streams such as parking, retail, food, and rideshare.
Advertising also plays a critical role in the Airport’s air service development strategy by promoting new routes, airlines, and special fare offerings which helps to fill flights, drive ticket sales, and strengthen regional connectivity. This growth fuels tourism, creates jobs, and supports the broader economy. Last year's campaigns for new services to Washington, Dulles, Portland, Toronto, Denver, and San Francisco , along with general awareness campaigns , helped contribute to the Airport’s overall 1.14% increase in enplaned passengers, and the additional 18,698 travelers drove a substantial revenue gain of $1.78 million for the Airport’s partners and concessionaires.
With a str ong agency partner, the Airport can also maximize these opportunities and strengthen passenger engagement through digital and social media campaigns that highlight local events, travel tips, and behind -the-scenes content. This approach builds trust, fosters community connection, and elevates the Airport’s reputation as the preferred airport for the region.
Beyond attracting more passengers, effective marketing directly supports revenue inside the terminal and enhances the Airport’s value to external advertisers. Current partnerships leverage prime advertising space at the airport to generate incremental revenue while offering brands access to an increased passenger base.
Staff recommends approval of Contract Services Agreement No. 25P268 with GoSeeTell Network, Inc. DBA Sparkloft Media to provide advertising services for the Palm Springs International Airport in an amount not to exceed $3,674,500 for an initial three-year term beginning October 1, 2025, through September 30, 2028, with two one -year extension options at the City’s sole discretion
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City Council Staff Report
September 25, 2025 -- Page 5
Airport Advertising Services Contract
ENVIRONMENTAL ASSESSMENT:
The requested City Council action is not a “Project” as defined by the California Environmental Quality Act (CEQA). Pursuant to Section 15378(a), a “Project” means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. The requested action is to approve contracts for the above -mentioned services, and is exempt from CEQA pursuant to Section 15378(b), in that a “Project” does not include: (5) Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.
ALIGNMENT WITH STRATEGIC PLANNING:
Approval of this action supports the City of Palm Springs’ 2023/25 Strategic Plan Major Themes/Principles for optimizing basic services and facilities, and it also supports the Airport’s 2025-2029 Strategic Plan’s Strategic Priorities for Partnerships.
FISCAL IMPACT:
Depicted in Figure 3 is the cost breakout for the three-year term:
Year
Media Buying
Allowance
Agency Flat Fee
Services Total
Year 1 $1,000,000 $206,500 $1,206,500
Year 2 $1,000,000 $234,000 $1,234,000
Year 3 $1,000,000 $234,000 $1,234,000
Total Media Allowance & Service Fees $3,674,500 Figure 3
The Media Buying Allowance is the amount that the Airport has budgeted to purchase media for the placement of advertisements. The advertising agency will purchase media on the Airport’s behalf, and the Airport will reimburse the advertising agency for the media purchases.
A total of $1,206,500 is budgeted in Fiscal Year 2025-26 and $1,234,000 is budgeted in Fiscal Year 2026-27 in the Department of Aviation Advertising Account 4157020-50145, and $1,234,000 will be budgeted for Fiscal Year 2027-28.
REVIEWED BY:
Executive Director of Aviation: Harry Barrett Jr.
Procurement & Contracting Manager: Tabitha Richards
City Attorney: Geremy Holm
City Manager: Scott Stiles
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City Council Staff Report
September 25, 2025 -- Page 6
Airport Advertising Services Contract
ATTACHMENTS:
A. Contract Services Agreement No. 25P268
B. Public Integrity Disclosure
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ATTACHMENT A
CONTRACT SERVICES AGREEMENT NO. 25P268
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CONTRACT SERVICES AGREEMENT 25P268
ADVERTISING SERVICES FOR THE PALM SPRINGS INTERNATIONAL
AIRPORT
THIS AGREEMENT FOR CONTRACT SERVICES (“Agreement”) is made and entered into on this 1st day of October, 2025, by and between the City of Palm Springs, a California charter city and municipal corporation (“City”), and GoSeeTell Network Inc DBA Sparkloft Media, a n Oregon corporation, (“Contractor”). City and Contractor are individually referred to as “Party” and are collectively referred to as the “Parties”.
RECITALS
A. City requires the services of an advertising services company , for Advertising Services for the Palm Springs International Airport, (“Project”).
B. Contractor has submitted to City a proposal to provide Advertising Services for the Palm Springs International Airport, to City under the terms of this Agreement.
C. Based on its experience, education, training, and reputation, Contractor is qualified and desires to provide the necessary services to City for the Project.
D. City desires to retain the services of Contractor for the Project.
NOW, THEREFORE, in consideration of the promises and mutual obligations, covenants, and conditions contained herein, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
AGREEMENT
1. CONTRACTOR SERVICES
1.1 Scope of Services. In compliance with all terms and conditions of this Agreement, Contractor shall provide services to City as described in the Scope of Services/Work attached to this Agreement as Exhibit “A” and incorporated herein by reference (the “ Services” or “ Work”).
Exhibit "A" includes the agreed upon schedule of performance and the schedule of fees.
Contractor warrants that the Services shall be performed in a competent, professional, and satisfactory manner consistent with the level of care and skill ordinarily exercised by high quality, experienced, and well qualified members of the profession currently practicing under similar conditions. In the event of any inconsistency between the terms contained in the Scope of Services/Work and the terms set forth in this Agreement, the terms set forth in this Agreement shall govern.
1.2 Compliance with Law. Contractor shall comply with all applicable federal, state, and local laws, statutes and ordinances and all lawful orders, rules, and regulations when performing the Services. Contractor shall be liable for all violations of such laws and regulations in connection with the Services and this Agreement.
1.3 Licenses and Permits. Contractor shall obtain at its sole cost and expense such licenses, permits, and approvals as may be required by law for the performance of the Services required by this Agreement.
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1.4 Familiarity with Work. By executing this Agreement, Contractor warrants that it has carefully considered how the Work should be performed and fully understands the facilities, difficulties, and restrictions attending performance of the Work under this Agreement.
2. TIME FOR COMPLETION
The time for completion of the Services to be performed by Contractor is an essential condition of this Agreement. Contractor shall prosecute regularly and diligently the work of this Agreement according to the agreed upon schedule of performance set forth in Exhibit “A.” Neither Party shall be accountable for delays in performance caused by any condition beyond the reasonable control and without the fault or negligence of the non-performing Party. Delays shall not entitle Contractor to any additional compensation regardless of the Party responsible for the delay.
3. COMPENSATION OF CONTRACTOR
3.1 Compensation of Contractor. Contractor shall be compensated and reimbursed for the services rendered under this Agreement in accordance with the schedule of fees set forth in Exhibit “A”. The total amount of Compensation shall not exceed $3,674,500.00
3.2 Method of Payment . In any month in which Contractor wishes to receive payment, Contractor shall submit to City an invoice for Services rendered prior to the date of the invoice, no later than the first working day of such month, in the form approved by City’s finance director. Payments shall be based on the schedule of fees set forth in Exhibit “A” for authorized services performed. City shall pay Contractor for all expenses stated in the invoice that are approved by City and consistent with this Agreement, within thirty (30) days of receipt of Contractor’s invoice.
3.3 Changes. In the event any change or changes in the Services is requested by City, Parties shall execute a written amendment to this Agreement, specifying all proposed amendments, including, but not limited to, any additional fees. An amendment may be entered into:
A. To provide for revisions or modifications to documents , work product, or Work, when required by the enactment or revision of any subsequent law; or B. To provide for additional services not included in this Agreement or not customarily furnished in accordance with generally accepted practice in Contractor’s profession.
3.4 Appropriations. This Agreement is subject to, and contingent upon, funds being appropriated by the City Council of City for each fiscal year. If such appropriations are not made, this Agreement shall automatically terminate without penalty to City.
4. PERFORMANCE SCHEDULE
4.1 Time of Essence. Time is of the essence in the performance of this Agreement. 1O - Page 9
4.2 Schedule of Performance. All Services rendered under this Agreement shall be performed under the agreed upon schedule of performance set forth in Exhibit “A .” Any time period extension must be approved in writing by the Contract Officer.
4.3 Force Majeure. The time for performance of Services to be rendered under this Agreement may be extended because of any delays due to a Force Majeure Event, if Contractor notifies the Contract Officer within ten (10) days of the commencement of the Force Majeure Event. A Force Majeure Event shall mean an event that materially affects the Contractor’s performance and is one or more of the following: (1) Acts of God or other natural disasters occurring at the project site; (2) terrorism or other acts of a public enemy; (3) orders of governmental authorities (including, without limitation, unreasonable and unforeseeable delay in the issuance of permits or approvals by governmental authorities that are required for the Work); and (4) pandemics, epidemics or quarantine restrictions. For purposes of this section, “orders of governmental authorities,” includes ordinances, emergency proclamations and orders, rules to protect the public health, welfare and safety, and other actions of the City in its capacity as a municipal authority. After Contractor notification, the Contract Officer shall investigate the facts and the extent of any necessary delay and extend the time for performing the Se rvices for the period of the enforced delay when and if, in the Contract Officer’s judgment, such delay is justified.
The Contract Officer’s determination shall be final and conclusive upon the Parties to this Agreement. The Contractor will not receive an adjustment to the contract price or any other compensation. Notwithstanding the foregoing, the City may still terminate this Agreement in accordance with the termination provisions of this Agreement.
4.4 Term. Unless earlier terminated in accordance with Section 4.5 of this Agreement, this Agreement shall continue in full force and effect for a period of three years, commencing on October 1 , 2025, and ending on September 30, 2028 , unless extended by mutual written agreement of the Parties. In addition, the term may be extended at the sole discretion of the City upon written notice to the Contractor, for two additional one-year terms.
4.5 Termination Prior to Expiration of Term. City may terminate this Agreement at any time, with or without cause, upon thirty (30) days written notice to Contractor . W here termination is due to the fault of Contractor and constitutes an immediate danger to health, safety, and general welfare, the period of notice shall be such shorter time as may be determined by the City. Upon receipt of the notice of termination, Contractor shall immediately cease all Services except such as may be specifically approved by the Contract Officer. Contractor shall be entitled to compensation for all Services rendered prior to receipt of the notice of termination and for any Services authorized by the Contract Officer after such notice. City shall not be liable for any costs other than the charges or portions thereof which are specified herein. Contractor shall not be entitled to payment for unperformed Services and shall not be entitled to damages or compensation for termination of Work. If the termination is for cause, the City shall have the right to take whatever steps it deems necessary to correct Contractor's deficiencies and charge the cost thereof to Contractor, who shall be liable for the full cost of the City's corrective act ion.
Contractor may not terminate this Agreement except for cause, upon thirty (30) days written notice to City.
5. COORDINATION OF WORK
5.1 Representative of Contractor . The following principal of Contractor is designated as being the principal and representative of Contractor authorized to act and make all decisions in its behalf with respect to the specified Services : Martin Stoll, CEO. It is expressly understood that the experience, knowledge, education, capability, and reputation of the foregoing 1O - Page 10
principal is a substantial inducement for City to enter into this Agreement. Therefore, the foregoing principal shall be responsible during the term of this Agreement for directing all activities of Contractor and devoting sufficient time to personally supervise the Services under this Agreement. The foregoing principal may not be changed by Contractor without prior written approval of the Contract Officer.
5.2 Contract Officer . The Contract Officer shall be the City Manager or his/her designee ("Contract Officer"). Contractor shall be responsible for keeping the Contract Officer fully informed of the progress of the performance of the Services. Contractor shall refer any decisions that must be made by City to the Contract Officer. Unless otherwise specified, any approval of City shall mean the approval of the Contract Officer.
5.3 Prohibition Against Subcontracting or Assignment . The experience, knowledge, education, capability, and reputation of Contractor, its principals and employees, were a substantial inducement for City to enter into this Agreement. Contractor shall not contract with any other individual or entity to perform any Services required under this Agreement without the City's express written approval. In addition, neither this Agreement nor any interest may be assigned or transferred, voluntarily or by operation of law, without the prior written approval of City. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement including without limitation the insurance and indemnification requirements. If Contractor is permitted to subcontract any part of this Agreement by City, Contractor shall be responsible to City for the acts and omissions of its subcontractor(s) in the same manner as it is for persons directly employed. Nothing contained in this Agreement shall create any contractual relationships between any subcontractor and City.
5.4 Independent Contractor. Neither City nor any of its employees shall have any control over the manner, mode, or means by which Contractor, its agents or employees, perform the Services required, except as otherwise specified . Contractor shall perform all required Services as an independent contractor of City and shall not be an employee of City and shall remain at all times as to City a wholly independent contractor with only such obligations as are consistent with that role; however, City shall have the right to review Contractor ’s work product, result, and advice. Contractor shall not at any time or in any manner represent that it or any of its agents or employees are agents or employees of City. Contractor shall pay all wages, salaries, and other amounts due personnel in connection with their performance under this Agreement and as required by law. Contractor shall be responsible for all reports and obligations respecting such personnel, including, but not limited to: social security taxes, income tax withholding, unemployment insurance, and workers’ compensation insurance. Contractor shall not have any authority to bind City in any manner.
5.5 Personnel. Contractor agrees to assign the following individuals to perform the services in this Agreement. Contractor shall not alter the assignment of the following personnel without the prior written approval of the Contract Officer. Acting through the City Manager, the City shall have the unrestricted right to order the removal of any personnel assigned by Contractor by providing written notice to Contractor.
Name: Title:
Martin Stoll CEO
Jason Nitti Executive Creative Director
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Allison West Director, Strategy & Brand Planning
Renata Tilkian VP Client Services
Kecia Stokes VP Finance and Performance
Alec Wooden Director, Distribution & Partnerships
Colin Ofloy Creative Director
Ashlynn Lowes Group Account Supervisor
Jenny Ledezma Program Manager
Kelly Ann Gindhart Paid Strategist
Masha Borovkova Content Specialist
5.6 California Labor Code Requirements.
A. Contractor is aware of the requirements of California Labor Code Sections 1720 et seq. and 1770 et seq., which require the payment of prevailing wage rates and the performance of other requirements on certain “public works” and “maintenance” projects (“Prevailing Wage Laws”). If the S ervices are being performed as part of an applicable “public works” or “maintenance” project, as defined by the Prevailing Wage Laws, and if the total compensation is $15,000 or more for maintenance or $25,000 or more for construction, alteration, demolition, installation, or repair, Contractor agrees to fully comply with such Prevailing Wage Laws. Contractor shall defend, indemnify and hold the City, its officials, officers, employees and agents free and harmless from any claims, liabilities, costs, penalties or interest arising out of any failure or alleged failure to comply with the Prevailing Wage Laws. It shall be mandatory upon the Contractor and all subcontractors to comply with all California Labor Code provisions, whi ch include but are not limited to prevailing wages (Labor Code Sections 1771, 1774 and 1775), employment of apprentices (Labor Code Section 1777.5), certified payroll records (Labor Code Sections 1771.4 and 1776), hours of labor (Labor Code Sections 1813 and 1815) and debarment of contractors and subcontractors (Labor Code Section 1777.1).
B. If the Services are being performed as part of an applicable “public works” or “maintenance” project and if the total compensation is $15,000 or more for maintenance or $25,000 or more for construction, alteration, demolition, installation, or repair, then pursuan t to Labor Code Sections 1725.5 and 1771.1, the Contractor and all subcontractors performing such Services must be registered with the Department of Industrial Relations. Contractor shall maintain registration for the duration of the Project and require the same of any subcontractors, as applicable. This Agreement may also be subject to compliance monitoring and enforcement by the Department of Industrial Relations. It shall be Contractor’s sole responsibility to comply with all applicable registration and labor compliance requirements.
6. INSURANCE
Contractor shall procure and maintain, at its sole cost and expense, policies of insurance as set forth in the attached Exhibit "B", incorporated herein by reference. 1O - Page 12
7. INDEMNIFICATION.
7.1 Indemnification. To the fullest extent permitted by law, Contractor shall defend (at Contractor’s sole cost and expense), indemnify, protect, and hold harmless City, its elected officials, officers, employees, agents, and volunteers (collectively the “Indemnified Parties”), from and against any and all liabilities, actions, suits, claims, demands, l osses, costs, judgments, arbitration awards, settlements, damages, demands, orders, penalties, and expenses including legal costs and attorney fees (collectively “Claims”), including but not limited to Claims arising from injuries to or death of persons ( Contractor’s employees included), for damage to property, including property owned by City, for any violation of any federal, state, or local law or ordinance or in any manner arising out of, pertaining to, or incident to any acts, errors or omissions, or willful misconduct committed by Contractor, its officers, employees, representatives, and agents, that arise out of or relate to Contractor’s performance of Services or this Agreement.
This indemnification clause excludes Claims arising from the sole negligence or willful misconduct of the Indemnified Parties. Under no circumstances shall the insurance requirements and limits set forth in this Agreement be construed to limit Contractor’s indemnification obligation or other liability under this Agreement. Contractor’s indemnification obligation shall survive the expiration or earlier termination of this Agreement until all actions against the Indemnified Parties for such matters indemnified are fully and finally barred by the applicable statute of limitations or, if an action is timely filed, until such action is final.
7.2 Design Professional Services Indemnification and Reimbursement. If Contractor’s obligation to defend, indemnify, and/or hold harmless arises out of Contractor’s performance as a “design professional” (as that term is defined under Civil Code section 2782.8), then, and only to the extent required by Civil Code section 2782.8, which is fully incorporated herein, Contractor’s indemnification obligation shall be limited to the extent which the Claims arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Contractor in the performance o f the Services or this Agreement, and, upon Contractor obtaining a final adjudication by a court of competent jurisdiction, Contractor’s liability for such claim, including the cost to defend, shall not exceed the Contractor’s proportionate percentage of fault.
8. RECORDS AND REPORTS
8.1 Reports. Contractor shall periodically prepare and submit to the Contract Officer reports concerning the performance of the Services required by this Agreement , or as the Contract Officer shall require.
8.2 Records. Contractor shall keep complete, accurate, and detailed accounts of all time, costs, expenses, and expenditures pertaining in any way to this Agreement. Contractor shall keep such books and records as shall be necessary to properly perform the Services required by this Agreement and enable the Contract Officer to evaluate the performance of such Services. The Contract Officer shall have full and free access to such books and records at all reasonable times, including the right to inspect, copy, audit, and make records and transcripts from such records.
8.3 Ownership of Documents. All drawings, specifications, reports, records, documents, and other materials prepared by Contractor in the performance of this Agreement shall be the property of City. Contractor shall deliver all above-referenced documents to City upon request of the Contract Officer or upon the termination of this Agreement. Contractor shall have no claim for further employment or additional compensation as a result of the exercise by City of its full rights or ownership of the documents and materials. Contractor may retain copies of such 1O - Page 13
documents for Contractor's own use. Contractor shall have an unrestricted right to use the concepts embodied in such documents.
8.4 Release of Documents. All drawings, specifications, reports, records, documents, and other materials prepared by Contractor in the performance of Services under this Agreement shall not be released publicly without the prior written approval of the Contract Officer.
8.5 Audit and Inspection of Records. After receipt of reasonable notice and during the regular business hours of City, Contractor shall provide City, or other agents of City, such access to Contractor’s books, records, payroll documents, and facilities as City deems necessary to examine, copy, audit, and inspect all accounting books, records, work data, documents, and activities directly related to Contractor’s performance under this Agreement. Contractor shall maintain such books, records, data, and documents in accordance with generally accepted accounting principles and shall clearly identify and make such items readily accessible to such parties during the term of this Agreement and for a period of three (3) years from the date of final payment by City hereunder.
9. ENFORCEMENT OF AGREEMENT
9.1 California Law. This Agreement shall be construed and interpreted both as to validity and to performance of the parties in accordance with the laws of the State of California.
Legal actions concerning any dispute, claim, or matter arising out of or in relation to this Agreement shall be instituted in the Superior Court of the County of Riverside, State of California, or any other appropriate court in such county, and Contractor covenants and agrees to submit to the personal jurisdiction of such court in the event of such action.
9.2 Interpretation. This Agreement shall be construed as a whole according to its fair language and common meaning to achieve the objectives and purposes of the Parties. The terms of this Agreement are contractual and the result of negotiation between the Parties. Accordingly, any rule of construction of contracts (including, without limitation, California Civil Code Section 1654) that ambiguities are to be construed against the drafting party, shall not be employed in the interpretation of this Agreement. The caption headings of the various sections and paragraphs of this Agreement are for convenience and identification purposes only and shall not be deemed to limit, expand, or define the contents of the respective sections or paragraphs.
9.3 Waiver. No delay or omission in the exercise of any right or remedy of a non - defaulting Party on any default shall impair such right or remedy or be construed as a waiver. No consent or approval of City shall be deemed to waive or render unnecessary City’s consent to or approval of any subsequent act of Contractor. Any waiver by either Party of any default must be in writing. No such waiver shall be a waiver of any other default concerning the same or any other provision of this Agreement.
9.4 Rights and Remedies are Cumulative. Except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the parties are cumulative. T he exercise by either Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other Party.
9.5 Legal Action. In addition to any other rights or remedies, either Party may take legal action, in law or in equity, to cure, correct, or remedy any default, to recover damages for 1O - Page 14
any default, to compel specific performance of this Agreement, to obtain injunctive relief, a declaratory judgment, or any other remedy consistent with the purposes of this Agreement.
9.6 Attorney Fees. In the event any dispute between the Parties with respect to this Agreement results in litigation or any non-judicial proceeding, the prevailing Party shall be entitled, in addition to such other relief as may be granted, to recover from the non- prevailing Party all reasonable costs and expenses. These include but are not limited to reasonable attorney fees, expert contractor fees, court costs and all fees, costs, and expenses incurred in any appeal or in collection of any judgment entered in such proceeding.
10. CITY OFFICERS AND EMPLOYEES: NON-DISCRIMINATION
10.1 Non-Liability of City Officers and Employees. No officer or employee of City shall be personally liable to the Contractor, or any successor-in-interest, in the event of any default or breach by City or for any amount which may become due to the Contractor or its successor, or for breach of any obligation of the terms of this Agreement.
10.2 Conflict of Interest. Contractor acknowledges that no officer or employee of the City has or shall have any direct or indirect financial interest in this Agreement, nor shall Contractor enter into any agreement of any kind with any such officer or employee during the term of this Agreement and for one (1) year thereafter. Contractor warrants that Contractor has not paid or given, and will not pay or give, any third party any money or other consideration in exchange for obtaining this Agreement.
10.3 Covenant Against Discrimination. In connection with its performance under this Agreement, Contractor shall not discriminate against any employee or applicant for employment because of actual or perceived race, religion, color, sex, age, marital status, ancestry, national origin ( i.e., place of origin, immigration status, cultural or linguistic characteristics, or ethnicity), sexual orientation, gender identity, gender expression, physical or mental disability, or medical condition (each a “prohibited basis”). Contractor shall ensure that applicants are employed, and that employees are treated during their employment, without regard to any prohibited basis. As a condition precedent to City’s lawful capacity to enter this Agreement, and in executing this Agreement, Contractor certifies that its actions and omissions hereunder shall not incorporate any discrimination arising from or related to any prohibited basis in any Contractor activity, including but not limited to the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship; and further, that Contractor is in full compliance with the provisions of Palm Springs Municipal Code Section 7.09.040, including without limitation the provision of benefits, relating to non -discrimination in city contracting.
11. MISCELLANEOUS PROVISIONS
11.1 Notice. Any notice, demand, request, consent, approval, or communication that either Party desires, or is required to give to the other Party or any other person shall be in writing and either served personally or sent by pre- paid, first-class mail to the address set forth below.
Notice shall be deemed communicated seventy-two (72) hours from the time of mailing if mailed as provided in this Section. Either Party may change its address by notifying the other Party of the change of address in writing.
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To City: City of Palm Springs
Attention: City Manager/ City Clerk
3200 E. Tahquitz Canyon Way
Palm Springs, California 92262
To Contractor: GoSeeTell Network, Inc DBA Sparkloft
Media
Attention: Martin Stoll
225 SW Broadway, Suite 400
Portland, OR 97205
11.2 Integrated Agreement . This Agreement constitutes the entire understanding between the Parties and supersedes and cancels all prior negotiations, arrangements, agreements, representations, and understandings, if any, made by or among the Parties with respect to the subject matter in this Agreement.
11.3 Amendment. No amendments or other modifications of this Agreement shall be binding unless through written agreement signed by all Parties.
11.4 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. In the event that any one or more of the phrases, sentences, clauses, paragraphs, or sections contained in this Agreement shall be declared invalid or unenforceable by valid judgment or decree of a court of competent jurisdiction, such invalidity or unenforceability shall not affect any of the remaining phrases, sentences, clauses, paragraphs, or sections of this Agreement, which shall be interpreted to carry out the intent of the Parties.
11.5 Successors in Interest. This Agreement shall be binding upon and inure to the benefit of the Parties’ successors and assignees.
11.6 Third Party Beneficiary. Except as may be expressly provided for in this Agreement, nothing contained in this Agreement is intended to confer, nor shall this Agreement be construed as conferring, any rights, including, without limitation, any rights as a third- party beneficiary or otherwise, upon any entity or person not a party to this Agreement.
11.7 Recitals. The above- referenced Recitals are hereby incorporated into the Agreement as though fully set forth in this Agreement and each Party acknowledges and agrees that such Party is bound, for purposes of this Agreement, by the same.
11.8 Authority. The persons executing this Agreement on behalf of the Parties warrant that they are duly authorized to execute this Agreement on behalf of Parties and that by so executing this Agreement the Parties are formally bound to the provisions of this Agreement.
11.9 Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original.
11.10 Compliance with Economic Sanctions in Response to Russia's Actions in Ukraine. When funding for the services is provided, in whole or in part, by an agency controlled of the State of California, Consultant shall fully and adequately comply with California Executive Order N-6-22 (“Russian Sanctions Program”). As part of this compliance process, Consultant 1O - Page 16
shall also certify compliance with the Russian Sanctions Program by completing the form located in Exhibit “C” (Russian Sanctions Certification), attached hereto and incorporated herein by reference. Consultant shall also require any subconsultants to comply with the Russian Sanctions Program and certify compliance pursuant to this Section.
11.11 Federal Provisions Since funding for the Services is provided, in whole or in part by the Federal Aviation Administration, Contractor shall also fully and adequately comply with the provisions included in Exhibit “D” attached hereto and incorporated herein by reference (“Federal Provisions”). With respect to any conflict between such Federal Provisions and the terms of this Agreement and/or the provisions of state law, the more stringent requirement shall control. [SIGNATURES ON NEXT PAGE]
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SIGNATURE PAGE TO AGREEMENT BY AND BETWEEN THE CITY OF PALM SPRINGS AND
GOSEETELL NETWORK, INC DBA SPARKLOFT MEDIA
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the dates stated below.
CONTRACTOR:
By: ____________________________ By: _____________________________________ Signature Signature
(2nd signature required for Corporations)
Date: Date:
CITY OF PALM SPRINGS:
APPROVED BY CITY COUNCIL:
Date: _______ Item No.
APPROVED AS TO FORM: ATTEST:
By: ___________________________ By: _______________________________ City Attorney City Clerk
APPROVED:
By: _______________________________ Date:
City Manager – over $150,000
Deputy/Assistant City Manager – up to $50,000
Director – up to $25,000
Manager – up to $5,000
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EXHIBIT “A”
SCOPE OF SERVICES
A. Strategy and Planning:
1. The Contractor shall work with the Marketing Specialist and/or the Deputy Director of Aviation, Marketing & Air Service to promote the PSP brand, air services and grown passenger demand.
2. The Contractor shall support marketing campaign development and strategies aligning with the Palm Springs International Airport’s (PSP) brand identity, target audiences, and marketing objectives.
3. Media Planning: The Contractor shall assist in creating a detailed media plan that outlines the optimal mix of traditional and digital channels, including, but not limited to:
Radio, Broadcast TV, Print, Social Media (Facebook, Instagram, TikTok), Search (SEO, PPC), YouTube, Display (Programmatic Buying, PMP), Video (Programmatic Buying, CTV/OTT).
4. Market Segmentation: The Contractor shall help support target audience identification by categorizing and segmenting the target audience based on demographics, psychographics, and behavioral patterns.
5. Campaign Planning: The Contractor shall assist in planning executions and measuring the performance against key metrics like brand awareness, website traffic, social media engagement, conversion rates, and ROI.
B. Creative Services:
1. Creative Development: The Contractor shall develop creative concepts for all media channels, including ad copy, visuals, and social media posts.
2. Content Creation: The Contractor shall produce high-quality content, graphics, images, and infographics to engage the target audience.
3. Design and Development: The Contractor shall design and develop visually appealing marketing materials such as website banners, email templates, print ads, and social media graphics.
4. Multilingual Creative Development: The Contractor shall be able to support and deliver compelling creative assets, including ad copy, social media content, and video scripts, in Spanish to effectively engage Hispanic/Latino audiences.
C. Digital Marketing:
1. Social Media Marketing: The Contractor shall assist in the development and execution of social media strategies to engage with the target audience, build brand awareness, and drive conversions.
2. Content Marketing: The Contractor shall help create and distribute high-quality content to attract and retain a loyal audience.
3. Email Marketing: The Contractor (as needed) shall help develop and implement email marketing campaigns to nurture leads and drive engagement.
4. Influencer Marketing: The Contractor shall assist in identifying and collaborating with relevant influencers to promote PSP and its services (if applicable). 1O - Page 19
5. Pay-Per-Click (PPC) Advertising: (if applicable) The Contractor shall be responsible for managing PPC campaigns on search engines and social media platforms to drive targeting traffic to the PSP website.
D. Analytics and Reporting:
1. Campaign Management & Measurement: The Contractor shall be responsible for the execution and ongoing measurement of all advertising campaigns (digital & traditional) including the tracking and analysis of key performance indicators and the provision of regular performance reports with actionable recommendations. a. Digital Analytics & Reporting: The Contractor shall conduct comprehensive analysis of campaign -driven website traffic, user behavior, and social media reach & engagement metrics.
b. Data Analysis: The Contractor shall analyze data to identify trends and opportunities for improvement.
c. Dashboard Creation: The Contractor shall create customized dashboards to visualize campaign performance.
d. Financial Reporting and Analysis: The Contractor shall submit monthly, quarterly, and annual performance cost analysis for all investments.
E. Client Services:
1. Medial Planning and Buying
a. The Contractor shall oversee all aspects of media planning and buying, including negotiations, client meetings, and communication regarding specific media plans and purchases. PSP maintains final approval authority for all media buys. b. The Contractor shall negotiate and purchase ad space across various digital platforms (e.g., social media, search engines, websites) based on client budgets and target audience profiles.
2. Project Management & Planning: The Contractor shall develop detailed project plans, timelines, and budgets associated with marketing campaigns.
3. Team Coordination: The Contractor shall coordinate with internal and external stakeholders to ensure smooth project execution.
4. Risk Management: The Contractor shall identify and mitigate potential risks to project success.
5. Quality Assurance: The Contractor shall ensure that all deliverables meet high- quality standards.
6. Technology Leadership: The Contractor shall stay abreast of emerging technology trends and proactively identify, evaluate, and recommend innovative solutions to enhance campaign effectiveness.
7. Collaboration: The Contractor shall work closely with PSP staff to ensure seamless project execution.
8. Financial Management: The Contractor shall maintain detailed budget plans and project timelines, requiring PSP’s authorization for all expenditures. Regular progress reports will be provided to PSP.
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9. Financial Oversight: The Contractor shall maintain rigorous financial controls, including timely billing and budget adherence.
10. Brand Guardianship: The Contractor shall respect and protect PSP’s brand identity by adhering to all trademarks, copyright, and intellectual property regulations.
F. Quarterly Campaign Development:
PSP envisions a collaborative process resulting in more flexible, dynamic and impactful marketing campaigns that effectively engage our target audience.
1. The Contractor shall develop one core set of campaign creatives per quarter that will serve as the foundation for the quarter’s marketing efforts.
2. During each quarter, the internal graphic design team will work closely with the campaign assets provided to refresh creative elements and will leverage these assets to:
a. Adapt and modify the core creatives for various channels (social media, email, print, digital ads, etc.)
b. Create fresh variations of the core concepts to maintain visual interest and prevent creative fatigue.
c. Explore innovative applications of the campaign elements, such as interactive experiences, motion graphics, or personalized content.
3. Benefits of this Approach:
a. Cost-effectiveness: Leverages the Contractors strategic expertise while utilizing in- house resources for ongoing adaptation and optimization. b. Increased flexibility and speed: allows for rapid adjustments to campaign elements based on performance data and evolving marketing needs. c. Enhanced creative diversity: Encourages a broader range of creative expressions by combining the Contractors’ strategic vision with the in -house team’s unique perspectives and skills.
d. Stronger brand consistency: Ensures all campaign iterations maintain a cohesive brand identity while allowing for creative exploration.
Schedule:
Work will commence on the date of executed contract and shall be completed by end of contract date. The term of the contract is for three years.
Compensation:
Work will be compensated on a Lump Sum basis. Contract pricing includes all labor, expenses, and incidentals to complete the work outlined in the contract scope. No additional compensation will be due by the City unless the contract is modified for additional work requested by the City.
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EXHIBIT “B”
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ITEM
1 2
3 ATTACHMENT ''G"
,cosT PROPOSAL
RIEQUEST FO , PROPOSAL (RFP 01-25),
ADVERISl'NG SERVICES FOR THE PAL!M SPRl1NGS INTERNATIONAL A RPORl THIS fO'RNI MUST BE COMPLETED AND SUBMITTED IN SEPARATE ELECTIRON C FILE #2 "Cost Proposa '', t:LQ;,Iwith Elei:::tronlc F~I #1, l'edinicallV'lork !Proposal") , DESCRIPTION aw UNIT OF TOTAL
MEASU E
Ad ... enlsl11g Services for PSP 1 LIi.imp Sum
$1,206 500 - per scope, Year 1
Advertising Services for PSP 1 Lump &Jm 1,234 000 - per soo,pe, Year 2 Advertisif'lg Senrtces for PSP 1 Lump Sum
- per soope, Year. 3 1,234 000
Toi.al $3 ,674,500
Printe<I Name: Martin S!oll. _ _ ___ ____ ___ ___ _ _
,tie: CEO. _ ____ _ ________ ______ _ _
Date; 311812025-----~ ----- - - --------
INSURANCE
1. Procurement and Maintenance of Insurance. Contractor shall procure and maintain public liability and property damage insurance against all claims for injuries against persons or damages to property resulting from Contractor’s performance under this Agreement.
Contractor shall procure and maintain all insurance at its sole cost and expense, in a form and content satisfactory to the City, and submit concurrently with its execution of this Agreement.
Contractor shall also carry workers’ compensation insurance in accordance with California workers’ compensation laws. Such insurance shall be kept in full force and effect during the term of this Agreement, including any extensions. Such insurance shall not be cancelable without thirty (30) days advance written notice to City of any proposed cancellation. Certificates of insurance evidencing the foregoing and designating the City, its elected officials, officers, employees, agents, and volunteers as additional named insureds by original endorsement shall be delivered to and approved by City prior to commencement of services. The procuring of such insurance and the delivery of policies, certificates, and endorsements evidencing the same shall not be construed as a limitation of Contractor’s obligation to indemnify City, its elected officials, officers, agents, employees, and volunteers.
2. Minimum Scope of Insurance. The minimum amount of insurance required under this Agreement shall be as follows:
1. Comprehensive general liability and personal injury with limits of at least one million dollars ($1,000,000.00) combined single limit coverage per occurrence and two million dollars ($2,000,000) general aggregate;
2. Automobile liability insurance with limits of at least one million dollars ($1,000,000.00) per occurrence;
3. Professional liability (errors and omissions) insurance with limits of at least one million dollars ($1,000,000.00) per occurrence and two million dollars ($2,000,000) annual aggregate is:
_________ required
____X___ is not required;
4. Workers’ Compensation insurance in the statutory amount as required by the State of California and Employer’s Liability Insurance with limits of at least one million dollars $1 million per occurrence. If Contractor has no employees, Contractor shall complete the City’s Request for Waiver of Workers’ Compensation Insurance Requirement form.
3. Primary Insurance. For any claims related to this Agreement, Contractor ’s insurance coverage shall be primary with respect to the City and its respective elected officials, officers, employees, agents, and volunteers. Any insurance or self-insurance maintained by City and its respective elected officials, officers, employees, agents, and volunteers shall be in excess of Contractor ’s insurance and shall not contribute with it. For Workers’ Compensation and Employer’s Liability Insurance only, the insurer shall waive all rights of subrogation and contribution it may have against City, its elected officials, officers, employees, agents, and volunteers.
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4. Errors and Omissions Coverage. If Errors & Omissions Insurance is required, and if Contractor provides claims made professional liability insurance, Contractor shall also agree in writing either (1) to purchase tail insurance in the amount required by this Agreement to cover claims made within three years of the completion of Contractor ’s services under this Agreement, or (2) to maintain professional liability insurance coverage with the same carrier in the amount required by this Agreement for at least three years after completion of Contractor ’s services under this Agreement. Contractor shall also be required to provide evidence to City of the purchase of the required tail insurance or continuation of the professional liability policy.
5. Sufficiency of Insurers. Insurance required in this Agreement shall be provided by authorized insurers in good standing with the State of California. Coverage shall be provided by insurers admitted in the State of California with an A.M. Best’s Key Rating of B++, Class VII, or better, unless otherwise acceptable to the City.
6. Verification of Coverage. Contractor shall furnish City with both certificates of insurance and endorsements, including additional insured endorsements, affecting all of the coverages required by this Agreement. The certificates and endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All proof of insurance is to be received and approved by the City before work comm ences. City reserves the right to require Contractor’s insurers to provide complete, certified copies of all required insurance policies at any time. Additional insured endorsements are not required for Errors and Omissions and Workers’ Compensation policies.
Verification of Insurance coverage may be provided by: (1) an approved General and/or Auto Liability Endorsement Form for the City of Palm Springs or (2) an acceptable Certificate of Liability Insurance Coverage with an approved Additional Insured Endorsement with the following endorsements stated on the certificate:
A. "The City of Palm Springs, its officials, employees, and agents are named as an additional insured…” ("as respects City of Palm Springs Contract No.___" or "for any and all work performed with the City" may be included in this statement).
B. " This insurance is primary and non -contributory over any insurance or self - insurance the City may have..." ("as respects City of Palm Springs Contract No.___ " or "for any and all work performed with the City" may be included in this statement).
C. " Should any of the above-described policies be canceled before the expiration date thereof, the issuing company will mail 30 days written notice to the Certificate Holder named. " Language such as, “endeavor to” mail and "but failure to mail such notice shall impose no obligation or liability of any kind upon the company, its agents or representative" is not acceptable and must be crossed out.
D. Both the Workers’ Compensation and Employers' Liability policies shall contain the insurer's waiver of subrogation in favor of City, its elected officials, officers, employees, agents, and volunteers.
In addition to the endorsements listed above, the City of Palm Springs shall be named the certificate holder on the policies.
All certificates of insurance and endorsements are to be received and approved by the City before work commences. All certificates of insurance must be authorized by a person with authority to 1O - Page 24
bind coverage, whether that is the authorized agent/broker or insurance underwriter. Failure to obtain the required documents prior to the commencement of work shall not waive the Contractor’s obligation to provide them.
7. Deductibles and Self -Insured Retentions . Any deductibles or self -insured retentions must be declared to and approved by the City prior to commencing any work or services under this Agreement. At the option of the City, either (1) the insurer shall reduce or eliminate such deductibles or self-insured retentions with respect to the City, its elected officials, officers, employees, agents, and volunteers; or (2) Contractor shall procure a bond guaranteeing payment of losses and related investigations, claim administration, and defense expenses. Certificates of Insurance must include evidence of the amount of any deductible or self-insured retention under the policy. Contractor guarantees payment of all deductibles and self-insured retentions.
8. Severability of Interests (Separation of Insureds) . This insurance applies separately to each insured against whom claim is made or suit is brought except with respect to the limits of the insurer’s liability.
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EXHIBIT “C”
EXECUTIVE ORDER N-6-22 CERTIFICATION
Executive Order N -6-22 issued by Governor Gavin Newsom on March 4, 2022, directs all agencies and departments that are subject to the Governor’s authority to (a) terminate any contracts with any individuals or entities that are determined to be a target of economic sanctions against Russia and Russian entities and individuals; and (b) refrain from entering into any new contracts with such individuals or entities while the aforementioned sanctions are in effect.
Executive Order N-6-22 also requires that any contractor that: (1) currently has a contract with the City of Palm Springs funded through grant funds provided by the State of California; and/or (2) submits a bid or proposal or otherwise proposes to or enter into or renew a contract with the City of Palm Springs with State of California grant funds, certify that the person is not the target of any economic sanctions against Russia and Russian entities and individuals.
The contractor hereby certifies, SUBJECT TO PENALTY FOR PERJURY, that a) the contractor is not a target of any economic sanctions against Russian and Russian entities and individuals as discussed in Executive Order N -6-22 and b) the person signing below is duly authorized to legally bind the Contractor. This certification is made under the laws of the State of California.
Signature:
Printed Name:
Title:
Firm Name:
Date:
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EXHIBIT “D”
FEDERAL AVIATION ADMINISTRATION
FEDERAL PROVISIONS
Provision
Reference Provision Description
Page
No.
FAA - 01 Access to Records and Reports 2
FAA - 02 Affirmative Action Requirement * 3
FAA – 03 Breach of Contract Terms 5
FAA – 04 Buy American Preference * 6
FAA – 05 Civil Rights General 7
FAA – 06 Civil Rights – Title VI Assurances * 8
FAA – 07 Clean Air and Water Pollution Control 11
FAA – 08 Contract Work Hours and Safety Standards Act Requirements 12 FAA – 09 Copeland Anti-Kickback Act 14
FAA – 10 Davis Bacon Requirements 15
FAA – 11 Debarment and Suspension * 22
FAA – 12 Disadvantaged Business Enterprise * 23
FAA – 13 Distracted Driving 25
FAA – 14 Prohibition on Certain Telecommunications and Video Surveillance Services or Equipment
26 FAA – 15 Drug Free Workplace Requirements (not applicable to Contractors) 27 FAA – 16 Equal Employment Opportunity 28
FAA – 17 Federal Fair Labor Standards Act * 36
FAA – 18 Lobbying and Influencing Federal Employees 37
FAA – 19 Prohibition of Segregated Facilities 38
FAA – 20 Occupational Safety and Health Act of 1970 39
FAA – 21 Procurement of Recovered Materials * 40
FAA – 22 Right to Inventions 41
FAA – 23 Seismic Safety 42
FAA – 24 Tax Delinquency and Felony Convictions* 43
FAA – 25 Termination of Contract 44
FAA – 26 Trade Restriction Certification (Foreign) * 45 FAA – 27 Veteran’s Preference 47
FAA – 28 Domestic Preferences for Procurements * 48
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FAA - 01 Access to Records and Reports
APPLICABILITY – pertains to all contracts.
The Contractor must maintain an acceptable cost accounting system. The Contractor agrees to provide the City, the Federal Aviation Administration and the Comptroller General of the United States or any of their duly authorized representatives access to any books, documents, papers and records of the Contractor which are directly pertinent to the specific contract for the purpose of making audit, examination, excerpts and transcriptions. The Contractor agrees to maintain all books, records and reports required under this contract for a period of not less than three years after final payment is made and all pending matters are closed.
Reference: 2 CFR § 200.334, 2 CFR § 200.337, FAA Order 5100.38 1O - Page 28
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FAA - 02 Affirmative Action Requirement
NOTICE OF REQUIREMENT FOR AFFIRMATIVE ACTION TO
ENSURE EQUAL EMPLOYMENT OPPORTUNITY
APPLICABILITY – pertains to all contracts over $10,000 as follows:
Construction – AIP funded construction work contracts and subcontracts that exceed $10,000. Construction work means construction, rehabilitation, alteration, conversion, extension, demolition or repair of buildings, highways or other changes or improvements to real property, including facilities providing utility services. The term also includes the supervision, inspection and other onsite functions incidental to the actual construction.
Equipment – any equipment project exceeding $10,000 that involves installation of equipment onsite (e.g., electrical vault equipment). This provision does not apply to equipment acquisition projects where the manufacture of the equipment takes place offsite at a manufacturer’s plant (e.g., firefighting and snow removal vehicles).
Professional Services – any professional service agreement if the professional services agreement includes tasks that meet the definition of construction work [as defined by the U.S. Department of Labor (DOL)] and exceeds $10,000. Examples include installation of monitoring systems (e.g., noise, environmental, etc.).
Property/Land – any agreement associated with land acquisition if the agreement includes construction work (defined above) that exceeds $10,000. Examples include demolition of structures or installation of boundary fencing.
REQUIREMENTS -
1. The Contractor’s attention is called to the “Equal Opportunity Clause” and the “Standard Federal Equal Employment Opportunity Construction Contract Specifications” set forth herein.
2. The goals and timetables for minority and female participation, expressed in percentage terms for the Contractor’s aggregate workforce in each trade on all construction work in the covered area, are as follows:
Timetables
Goals for minority participation for each trade: 16%
Goals for female participation in each trade: 6.9%
These goals are applicable to all of the Contractor’s construction work (whether or not it is Federal or federally assisted) performed in the covered area. If the Contractor performs construction work in a geographical area located outside of the covered area, it shall apply the goals established for such geographical area where the work is actually performed. With regard to this second area, the Contractor also is subject to the goals for both its federally involved and nonfederally involved construction.
The Contractor’s compliance with the Executive Order and the regulations in 41 CFR Part 60-4 shall be based on its implementation of the Equal Opportunity Clause, specific affirmative action obligations required by the specifications set forth in 41 CFR 1O - Page 29
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60-4.3(a) and its efforts to meet the goals. The hours of minority and female employment and training must be substantially uniform throughout the length of the contract, and in each trade, and the Contractor shall make a good faith effort to employ minorities and women evenly on each of its projects. The transfer of minority or female employees or trainees from Contractor to Contractor or from project to project for the sole purpose of meeting the Contractor’s goals shall be a violation of the contract, the Executive Order and the regulations in 41 CFR Part 60-4. Compliance with the goals will be measured against the total work hours performed.
3. The Contractor shall provide written notification to the Director of the Office of Federal Contract Compliance Programs (OFCCP) within 10 working days of award of any construction subcontract in excess of $10,000 at any tier for construction work under the contract resulting from this solicitation. The notification shall list the name, address, and telephone number of the subcontractor; employer identification number of the subcontractor; estimated dollar amount of the subcontract; estimated starting and completion dates of the subcontract; and the geographical area in which the subcontract is to be performed.
4. As used in this notice and in the contract resulting from this solicitation, the “covered area” is California, Riverside County, Palm Springs.
Reference: 41 CFR Part 60-4
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FAA – 03 Breach of Contract
APPLICABILITY – required for all contracts that exceed the simplified acquisition threshold as stated in 2 CFR Part 200, Appendix II (A). This threshold is occasionally adjusted for inflation and is $250,000.
REQUIREMENT -
See Section 4.5 of the Agreement.
Reference: 2 CFR § 200 Appendix II(A)
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FAA – 04 Buy American Preferences
APPLICABILITY – required for contracts defined as follows:
x Construction Projects involving the replacement, rehabilitation, reconstruction of airfield surfaces such as on runways, taxiways, taxilanes, aprons, roadways, parking lots, etc. – Insert the Certificate of compliance to FAA Buy American Preference based on Construction Projects.
x Equipment and Buildings Projects involving and including the acquisition of equipment such as snow removal equipment, navigational aids, wind cones, and the construction of buildings such as hangars, terminal development, lighting vaults, aircraft rescue & firefighting buildings, etc. - Insert the Certificate of Compliance with FAA Buy American Preference Based on Equipment/Building Projects.
REQUIREMENT -
The Contractor certifies that all constructions materials, defined to mean an article, material, or supply other than an item of primarily iron or steel; a manufactured product; cement and cementitious materials; aggregates such as stone, sand, or gravel; or aggregate binding agents or additives that are or consist primarily of: non-ferrous metals; plastic and polymer-based products (including polyvinylchloride, composite building materials, and polymers used in fiber optic cables); glass (including optic glass); lumber; or drywall used in the project are manufactured in the U.S.
Reference: Title 49 USC § 50101
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FAA – 05 Civil Rights General
APPLICABILITY – required for all contracts regardless of funding source.
REQUIREMENT -
In all its activities within the scope of its airport program, the Contractor agrees to comply with pertinent statutes, Executive Orders, and such rules as identified in Title VI List of Pertinent Nondiscrimination Acts and Authorities to ensure that no person shall, on the grounds of race, color, national origin (including limited English proficiency), creed, sex (including sexual orientation and gender identity), age, or disability be excluded from participating in any activity conducted with or benefiting from Federal assistance. The above provision binds the Contractor and subcontractors from the bid solicitation period through the completion of the contract.
This provision is in addition to that required by Title VI of the Civil Rights Act of 1964.
Reference: 49 USC § 47123
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FAA – 06 Civil Rights – Title VI Assurances
APPLICABILITY – required for all contracts.
REQUIREMENT -
Title VI List of Pertinent Nondiscrimination Acts and Authorities During the performance of this contract, the Contractor, for itself, its assignees, and successors in interest (hereinafter referred to as the “Contractor”) agrees to comply with the following non-discrimination statutes and authorities; including but not limited to:
• Title VI of the Civil Rights Act of 1964 (42 USC § 2000d et seq., 78 stat. 252) (prohibits discrimination on the basis of race, color, national origin); • 49 CFR part 21 (Non-discrimination in Federally-Assisted programs of the Department of Transportation—Effectuation of Title VI of the Civil Rights Act of 1964); • The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, (42 USC § 4601) (prohibits unfair treatment of persons displaced or whose property has been acquired because of Federal or Federal-aid programs and projects); • Section 504 of the Rehabilitation Act of 1973 (29 USC § 794 et seq.), as amended (prohibits discrimination on the basis of disability); and 49 CFR part 27 (Nondiscrimination on the Basis of Disability in Programs or Activities Receiving Federal Financial Assistance);
• The Age Discrimination Act of 1975, as amended (42 USC § 6101 et seq.) (prohibits discrimination on the basis of age);
• Airport and Airway Improvement Act of 1982 (49 USC § 47123), as amended (prohibits discrimination based on race, creed, color, national origin, or sex); • The Civil Rights Restoration Act of 1987 (PL 100-259) (broadened the scope, coverage and applicability of Title VI of the Civil Rights Act of 1964, the Age Discrimination Act of 1975 and Section 504 of the Rehabilitation Act of 1973, by expanding the definition of the terms “programs or activities” to include all of the programs or activities of the Federal-aid recipients, sub-recipients and contractors, whether such programs or activities are Federally funded or not); • Titles II and III of the Americans with Disabilities Act of 1990 (42 USC § 12101, et seq) (prohibit discrimination on the basis of disability in the operation of public entities, public and private transportation systems, places of public accommodation, and certain testing entities) as implemented by U.S. Department of Transportation regulations at 49 CFR parts 37 and 38;
• The Federal Aviation Administration’s Nondiscrimination statute (49 USC § 47123) (prohibits discrimination on the basis of race, color, national origin, and sex); 1O - Page 34
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• Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (ensures nondiscrimination against minority populations by discouraging programs, policies, and activities with disproportionately high and adverse human health or environmental effects on minority and low-income populations);
• Executive Order 13166, Improving Access to Services for Persons with Limited English Proficiency, and resulting agency guidance, national origin discrimination includes discrimination because of limited English proficiency (LEP). To ensure compliance with Title VI, you must take reasonable steps to ensure that LEP persons have meaningful access to your programs [70 Fed. Reg. 74087 (2005)]; • Title IX of the Education Amendments of 1972, as amended, which prohibits you from discriminating because of sex in education programs or activities (20 USC § 1681, et seq).
Compliance with Nondiscrimination Requirements:
During the performance of this contract, the Contractor, for itself, its assignees, and successors in interest (hereinafter referred to as the “Contractor”), agrees as follows:
1. Compliance with Regulations: The Contractor (hereinafter includes consultants) will comply with the Title VI List of Pertinent Nondiscrimination Acts and Authorities, as they may be amended from time to time, which are herein incorporated by reference and made a part of this contract.
2. Nondiscrimination: The Contractor, with regard to the work performed by it during the contract, will not discriminate on the grounds of race, color, national origin (including limited English proficiency), creed, sex (including sexual orientation and gender identity), age, or disability in the selection and retention of subcontractors, including procurements of materials and leases of equipment. The Contractor will not participate directly or indirectly in the discrimination prohibited by the Nondiscrimination Acts and Authorities, including employment practices when the contract covers any activity, project, or program set forth in Appendix B of 49 CFR part 21.
3. Solicitations for Subcontracts, in cluding Procurements of Materials and Equipment: In all solicitations, either by competitive bidding or negotiation made by the Contractor for work to be performed under a subcontract, including procurements of materials, or leases of equipment, each potential subcontractor or supplier will be notified by the Contractor of the Contractor’s obligations under this contract and the Nondiscrimination Acts and Authorities on the grounds of race, color, or national origin.
4. Information and Reports: The Contractor will provide all information and reports required by the Acts, the Regulations, and directives issued pursuant thereto and will permit access to its books, records, accounts, other sources of information, and 1O - Page 35
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its facilities as may be determined by the City or the Federal Aviation Administration to be pertinent to ascertain compliance with such Nondiscrimination Acts and Authorities and instructions. Where any information required of a Contractor is in the exclusive possession of another who fails or refuses to furnish the information, the Contractor will so certify to the City or the Federal Aviation Administration, as appropriate, and will set forth what efforts it has made to obtain the information.
5. Sanctions for Noncompliance: In the event of a Contractor’s noncompliance with the non-discrimination provisions of this contract, the City will impose such contract sanctions as it or the Federal Aviation Administration may determine to be appropriate, including, but not limited to:
a. Withholding payments to the Contractor under the contract until the Contractor complies; and/or
b. Cancelling, terminating, or suspending a contract, in whole or in part.
6. Incorporation of Provisions: The Contractor will include the provisions of paragraphs one through six in every subcontract, including procurements of materials and leases of equipment, unless exempt by the Acts, the Regulations, and directives issued pursuant thereto. The Contractor will take action with respect to any subcontract or procurement as the City or the Federal Aviation Administration may direct as a means of enforcing such provisions including sanctions for noncompliance. Provided, that if the Contractor becomes involved in, or is threatened with litigation by a subcontractor, or supplier because of such direction, the Contractor may request the City to enter into any litigation to protect the interests of the City. In addition, the Contractor may request the United States to enter into the litigation to protect the interests of the United States.
Reference: 49 USC § 47123, FAA Order 1400.11
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FAA – 07 Clean Air/Water Pollution Control
APPLICABILITY – This provision is required for all contracts and lower tier contracts that exceed $150,000.
REQUIREMENT -
If the Agreement exceeds $150,000, Contractor agrees to comply with all applicable standards, orders, and regulations issued pursuant to the Clean Air Act (42 USC § 7401-7671q) and the Federal Water Pollution Control Act as amended (33 USC § 1251- 1387). The Contractor agrees to report any violation to the City immediately upon discovery. The City assumes responsibility for notifying the Environmental Protection Agency (EPA) and the Federal Aviation Administration.
Contractor must include this requirement in all subcontracts that exceeds $150,000.
Reference: 2 CFR § 200, Appendix II(G); 42 USC § 7401; 33 USC § 1251
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FAA – 08 Contract Work Hours and Safety Standards
APPLICABILITY – This provision is required for contracts as follows:
Contract Work Hours and Safety Standards Act Requirements (CWHSSA) (40 USC §§ 3702 & 3704) requires contractors and subcontractors on covered contracts to pay laborers and mechanics employed in the performance of the contracts not less than one and one-half times their basic rate of pay for all hours worked over 40 in a workweek.
CWHSSA prohibits unsanitary, hazardous, or dangerous working conditions on federally-assisted projects. The Wage and Hour Division (WHD) within the U.S.
Department of Labor (DOL) enforces the compensation requirements of this Act, while DOL’s Occupational Safety and Health Administration (OSHA) enforces the safety and health requirements.
Contract Types –
Construction – This provision applies to all contracts and lower tier contracts that exceed $100,000, and employ laborers, mechanics, watchmen, and guards.
Equipment – This provision applies to any equipment project exceeding $100,000 that involves installation of equipment onsite (e.g., electrical vault equipment). This provision does not apply to equipment acquisition projects where the manufacture of the equipment takes place offsite at the vendor plant (e.g., ARFF and SRE vehicles).
Professional Services – This provision applies to professional service agreements that exceed $100,000 and employs laborers, mechanics, watchmen, and guards. This includes members of survey crews and exploratory drilling operations.
Property – While most land transactions do not involve employment of laborers, mechanics, watchmen, and guards, under certain circumstances, a property acquisition project could require such employment. Examples include the installation of property fencing or testing for environmental contamination
CONTRACT WORKHOURS AND SAFETY STANDARDS ACT REQUIREMENTS
1. Overtime Requirements.
No contractor or subcontractor contracting for any part of the contract work which may require or involve the employment of laborers or mechanics shall require or permit any such laborer or mechanic, including watchmen and guards, in any workweek in which he or she is employed on such work to work in excess of forty hours in such workweek unless such laborer or mechanic receives compensation at a rate not less than one and one-half times the basic rate of pay for all hours worked in excess of forty hours in such workweek.
2. Violation; Liability for Unpaid Wages; Liquidated Damages.
In the event of any violation of the clause set forth in paragraph (1) of this clause, the Contractor and any subcontractor responsible therefor shall be liable for the unpaid wages. In addition, such contractor and subcontractor shall be liable to the United States (in the case of work done under contract for the District of Columbia or a territory, to such District or to such territory), for liquidated damages. Such liquidated damages shall be computed with respect to each individual laborer or mechanic, including watchmen and guards, employed in violation of the clause set forth in paragraph (1) of this clause, in the sum of $29 1O - Page 38
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for each calendar day on which such individual was required or permitted to work in excess of the standard workweek of forty hours without payment of the overtime wages required by the clause set forth in paragraph (1) of this clause.
3. Withholding for Unpaid Wages and Liquidated Damages.
The Federal Aviation Administration (FAA) or the City shall upon its own action or upon written request of an authorized representative of the Department of Labor withhold or cause to be withheld, from any moneys payable on account of work performed by the Contractor or subcontractor under any such contract or any other Federal contract with the same prime Contractor, or any other federally- assisted contract subject to the Contract Work Hours and Safety Standards Act, which is held by the same prime Contractor, such sums as may be determined to be necessary to satisfy any liabilities of such Contractor or subcontractor for unpaid wages and liquidated damages as provided in the clause set forth in paragraph (2) of this clause.
4. Subcontractors.
The Contractor or subcontractor shall insert in any subcontracts the clauses set forth in paragraphs (1) through (4) and also a clause requiring the subcontractor to include these clauses in any lower tier subcontracts. The prime contractor shall be responsible for compliance by any subcontractor or lower tier subcontractor with the clauses set forth in paragraphs (1) through (4) of this clause.
Reference: 2 CFR Part 200, Appendix II(E); 2 CFR § 5.5(b); 40 USC § 3702; 40 USC § 3704
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FAA – 09 Copeland Anti-Kickback
APPLICABILITY -
The Copeland (Anti-Kickback) Act (18 USC § 874 and 40 USC § 3145) makes it unlawful to induce by force, intimidation, threat of dismissal from employment, or by any other manner, any person employed in the construction or repair of public buildings or public works, financed in whole or in part by the United States, to give up any part of the compensation to which that person is entitled under a contract of employment. The Copeland Act also requires each contractor and subcontractor to furnish weekly a statement of compliance with respect to the wages paid each employee during the preceding week.
Contract Types –
Construction – This provision applies to all construction contracts and subcontracts financed under the AIP that exceed $2,000.
Equipment – This provision applies to all equipment installation projects (e.g., electrical vault improvements) financed under the AIP that exceed $2,000. This provision does not apply to equipment acquisitions where the equipment is manufactured at the vendor’s plant (e.g., SRE and ARFF vehicles).
Professional Services –The emergence of different project delivery methods has created situations where Professional Service Agreements (PSAs) include tasks that meet the definition of construction, alteration, or repair as defined in 29 CFR Part 5. If such tasks result in work that qualifies as construction, alteration, or repair and it exceeds $2,000, the PSA must incorporate the Copeland Anti- kickback provision.
Property –Ordinarily, land acquisition projects would not involve employment of laborers or mechanics and thus the Copeland Anti-Kickback provision would not apply. However, land projects that involve installation of boundary fencing and demolition of structures would involve laborers and mechanics. The City must include this provision if the land acquisition project involves employment of laborers or mechanics for a contract exceeding $2,000.
REQUIREMENT -
Contractor must comply with the requirements of the Copeland “Anti-Kickback” Act (18 USC 874 and 40 USC 3145), as supplemented by Department of Labor regulation 29 CFR part 3. Contractor and subcontractors are prohibited from inducing, by any means, any person employed on the project to give up any part of the compensation to which the employee is entitled. The Contractor and each Subcontractor must submit to the City, a weekly statement on the wages paid to each employee performing on covered work during the prior week. City must report any violations of the Act to the Federal Aviation Administration.
Reference: 2 CFR Part 200, Appendix II(D); 29 CFR Parts 3 and 5 1O - Page 40
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FAA – 10 Davis Bacon Requirements
APPLICABILITY -
The Davis-Bacon Act (40 USC §§ 3141-3144, 3146, and 3147) ensures that laborers and mechanics employed under the contract receive pay no less than the locally prevailing wages and fringe benefits as determined by the Department of Labor.
Contract Types –
Construction –all construction contracts and subcontracts that exceed $2,000 and include funding from the AIP.
Equipment – This provision applies to all equipment installation projects (e.g., electrical vault improvements) financed under the AIP that exceed $ 2,000. This provision does not apply to equipment acquisitions where the equipment is manufactured at the vendor’s plant (e.g., SRE and ARFF vehicles)
Professional Services – The emergence of different project delivery methods has created situations where Professional Service Agreements (PSAs) includes tasks that meet the definition of construction, alteration, or repair as defined in 29 CFR Part 5. If such tasks result in work that qualifies as construction, alteration, or repair and it exceeds $2,000, the PSA must incorporate this clause.
Property – Ordinarily, land acquisition projects would not involve employment of laborers or mechanics and thus the provision would not apply. However, land projects that involve installation of boundary fencing and demolition of structures would involve laborers and mechanics. The City must include this provision if the land acquisition project involves employment of laborers or mechanics for a contract exceeding $2,000.
Fencing Projects – Fencing projects that exceed $2,000 must include this provision.
DAVIS-BACON REQUIREMENTS
1. Minimum Wages.
(i) All laborers and mechanics employed or working upon the site of the work will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by the Secretary of Labor under the Copeland Act (29 CFR Part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalent thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the Contractor and such laborers and mechanics.
Contributions made or costs reasonably anticipated for bona fide fringe benefits under section 1(b)(2) of the Davis-Bacon Act on behalf of laborers or mechanics are considered wages paid to such laborers or mechanics, subject to the provisions of 1O - Page 41
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paragraph (1)(iv) of this section; also, regular contributions made or costs incurred for more than a weekly period (but not less often than quarterly) under plans, funds, or programs which cover the particular weekly period, are deemed to be constructively made or incurred during such weekly period. Such laborers and mechanics shall be paid the appropriate wage rate and fringe benefits on the wage determination for the classification of work actually performed, without regard to skill, except as provided in 29 CFR § 5.5(a)(4). Laborers or mechanics performing work in more than one classification may be compensated at the rate specified for each classification for the time actually worked therein: Provided, that the employer’s payroll records accurately set forth the time spent in each classification in which work is performed. The wage determination (including any additional classification and wage rates conformed under (1)(ii) of this section) and the Davis-Bacon poster (WH-1321) shall be posted at all times by the Contractor and its subcontractors at the site of the work in a prominent and accessible place where it can easily be seen by the workers. (ii)(A) The contracting officer shall require that any class of laborers or mechanics, including helpers, which is not listed in the wage determination and which is to be employed under the contract shall be classified in conformance with the wage determination. The contracting officer shall approve an additional classification and wage rate and fringe benefits therefore only when the following criteria have been met:
(1) The work to be performed by the classification requested is not performed by a classification in the wage determination;
(2) The classification is utilized in the area by the construction industry; and (3) The proposed wage rate, including any bona fide fringe benefits, bears a reasonable relationship to the wage rates contained in the wage determination. (B) If the Contractor and the laborers and mechanics to be employed in the classification (if known), or their representatives, and the contracting officer agree on the classification and wage rate (including the amount designated for fringe benefits where appropriate), a report of the action taken shall be sent by the contracting officer to the Administrator of the Wage and Hour Division, U.S. Department of Labor, Washington, DC 20210. The Administrator, or an authorized representative, will approve, modify, or disapprove every additional classification action within 30 days of receipt and so advise the contracting officer or will notify the contracting officer within the 30-day period that additional time is necessary.
(C) In the event the Contractor, the laborers, or mechanics to be employed in the classification, or their representatives, and the contracting officer do not agree on the proposed classification and wage rate (including the amount designated for fringe benefits, where appropriate), the contracting officer shall refer the questions, including the views of all interested parties and the recommendation of the contracting officer, to the Administrator for determination. The Administrator, or an authorized representative, will issue a determination within 30 days of receipt and so advise the contracting officer 1O - Page 42
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or will notify the contracting officer within the 30-day period that additional time is necessary.
(D) The wage rate (including fringe benefits where appropriate) determined pursuant to subparagraphs (1)(ii) (B) or (C) of this paragraph, shall be paid to all workers performing work in the classification under this contract from the first day on which work is performed in the classification.
(iii) Whenever the minimum wage rate prescribed in the contract for a class of laborers or mechanics includes a fringe benefit which is not expressed as an hourly rate, the contractor shall either pay the benefit as stated in the wage determination or shall pay another bona fide fringe benefit or an hourly cash equivalent thereof. (iv) If the Contractor does not make payments to a trustee or other third person, the Contractor may consider as part of the wages of any laborer or mechanic the amount of any costs reasonably anticipated in providing bona fide fringe benefits under a plan or program, Provided, that the Secretary of Labor has found, upon the written request of the Contractor, that the applicable standards of the Davis-Bacon Act have been met.
The Secretary of Labor may require the Contractor to set aside in a separate account assets for the meeting of obligations under the plan or program.
2. Withholding. The Federal Aviation Administration or the CIty shall upon its own action or upon written request of an authorized representative of the Department of Labor withhold or cause to be withheld from the Contractor under this contract or any other Federal contract with the same prime contractor, or any other federally-assisted contract subject to Davis-Bacon prevailing wage requirements, which is held by the same prime contractor, so much of the accrued payments or advances as may be considered necessary to pay laborers and mechanics, including apprentices, trainees, and helpers, employed by the Contractor or any subcontractor the full amount of wages required by the contract. In the event of failure to pay any laborer or mechanic, including any apprentice, trainee, or helper, employed or working on the site of the work, all or part of the wages required by the contract, the Federal Aviation Administration may, after written notice to the Contractor, City, Applicant, or Owner, take such action as may be necessary to cause the suspension of any further payment, advance, or guarantee of funds until such violations have ceased.
3. Payrolls and Basic Records.
(i) Payrolls and basic records relating thereto shall be maintained by the Contractor during the course of the work and preserved for a period of three years thereafter for all laborers and mechanics working at the site of the work. Such records shall contain the name, address, and social security number of each such worker; his or her correct classification; hourly rates of wages paid (including rates of contributions or costs anticipated for bona fide fringe benefits or cash equivalents thereof of the types described in 1(b)(2)(B) of the Davis-Bacon Act); daily and weekly number of hours worked; deductions made; and actual wages paid. Whenever the Secretary of Labor 1O - Page 43
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has found under 29 CFR 5.5(a)(1)(iv) that the wages of any laborer or mechanic include the amount of any costs reasonably anticipated in providing benefits under a plan or program described in section 1(b)(2)(B) of the Davis-Bacon Act, the Contractor shall maintain records that show that the commitment to provide such benefits is enforceable, that the plan or program is financially responsible, and that the plan or program has been communicated in writing to the laborers or mechanics affected, and records which show the costs anticipated or the actual costs incurred in providing such benefits.
Contractors employing apprentices or trainees under approved programs shall maintain written evidence of the registration of apprenticeship programs and certification of trainee programs, the registration of the apprentices and trainees, and the ratios and wage rates prescribed in the applicable programs.
(ii)(A) The Contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the Federal Aviation Administration if the agency is a party to the contract, but if the agency is not such a party, the Contractor will submit the payrolls to the applicant, the City, or Owner, as the case may be, for transmission to the Federal Aviation Administration. The payrolls submitted shall set out accurately and completely all of the information required to be maintained under 29 CFR § 5.5(a)(3)(i), except that full social security numbers and home addresses shall not be included on weekly transmittals. Instead the payrolls shall only need to include an individually identifying number for each employee (e.g., the last four digits of the employee’s social security number). The required weekly payroll information may be submitted in any form desired. Optional Form WH–347 is available for this purpose from the Wage and Hour Division Web site at http://www.dol.gov/esa/whd/forms/wh347instr.htm or its successor site. The prime contractor is responsible for the submission of copies of payrolls by all subcontractors. Contractors and subcontractors shall maintain the full social security number and current address of each covered worker and shall provide them upon request to the Federal Aviation Administration if the agency is a party to the contract, but if the agency is not such a party, the Contractor will submit them to the applicant, the City, or Owner, as the case may be, for transmission to the Federal Aviation Administration, the Contractor, or the Wage and Hour Division of the Department of Labor for purposes of an investigation or audit of compliance with prevailing wage requirements. It is not a violation of this section for a prime contractor to require a subcontractor to provide addresses and social security numbers to the prime contractor for its own records, without weekly submission to the sponsoring government agency (or the applicant, City, or Owner).
(B) Each payroll submitted shall be accompanied by a "Statement of Compliance," signed by the Contractor or subcontractor or his or her agent who pays or supervises the payment of the persons employed under the contract and shall certify the following:
(1) That the payroll for the payroll period contains the information required to be provided under 29 CFR § 5.5(a)(3)(ii), the appropriate information is being maintained under 29 CFR § 5.5 (a)(3)(i), and that such information is correct and complete; 1O - Page 44
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(2) That each laborer and mechanic (including each helper, apprentice, and trainee) employed on the contract during the payroll period has been paid the full weekly wages earned, without rebate, either directly or indirectly, and that no deductions have been made either directly or indirectly from the full wages earned, other than permissible deductions as set forth in Regulations, 29 CFR Part 3;
(3) That each laborer or mechanic has been paid not less than the applicable wage rates and fringe benefits or cash equivalents for the classification of work performed, as specified in the applicable wage determination incorporated into the contract. (C) The weekly submission of a properly executed certification set forth on the reverse side of Optional Form WH-347 shall satisfy the requirement for submission of the “Statement of Compliance” required by paragraph (3)(ii)(B) of this section. (D) The falsification of any of the above certifications may subject the Contractor or subcontractor to civil or criminal prosecution under Section 1001 of Title 18 and Section 231 of Title 31 of the United States Code.
(iii) The Contractor or subcontractor shall make the records required under paragraph (3)(i) of this section available for inspection, copying, or transcription by authorized representatives of the City, the Federal Aviation Administration, or the Department of Labor and shall permit such representatives to interview employees during working hours on the job. If the Contractor or subcontractor fails to submit the required records or to make them available, the Federal agency may, after written notice to the Contractor, the City, applicant, or Owner, take such action as may be necessary to cause the suspension of any further payment, advance, or guarantee of funds.
Furthermore, failure to submit the required records upon request or to make such records available may be grounds for debarment action pursuant to 29 CFR § 5.12.
4. Apprentices and Trainees.
(i) Apprentices. Apprentices will be permitted to work at less than the predetermined rate for the work they performed when they are employed pursuant to and individually registered in a bona fide apprenticeship program registered with the U.S. Department of Labor, Employment and Training Administration, Office of Apprenticeship Training, Employer and Labor Services, or with a State Apprenticeship Agency recognized by the Office, or if a person is employed in his or her first 90 days of probationary employment as an apprentice in such an apprenticeship program, who is not individually registered in the program, but who has been certified by the Office of Apprenticeship Training, Employer and Labor Services or a State Apprenticeship Agency (where appropriate) to be eligible for probationary employment as an apprentice. The allowable ratio of apprentices to journeymen on the job site in any craft classification shall not be greater than the ratio permitted to the contractor as to the entire work force under the registered program. Any worker listed on a payroll at an apprentice wage rate, who is not registered or otherwise employed as stated above, shall be paid not less than the applicable wage rate on the wage determination for the classification of work actually 1O - Page 45
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performed. In addition, any apprentice performing work on the job site in excess of the ratio permitted under the registered program shall be paid not less than the applicable wage rate on the wage determination for the work actually performed. Where a contractor is performing construction on a project in a locality other than that in which its program is registered, the ratios and wage rates (expressed in percentages of the journeyman’s hourly rate) specified in the Contractor’s or subcontractor’s registered program shall be observed. Every apprentice must be paid at not less than the rate specified in the registered program for the apprentice’s level of progress, expressed as a percentage of the journeymen hourly rate specified in the applicable wage determination. Apprentices shall be paid fringe benefits in accordance with the provisions of the apprenticeship program. If the apprenticeship program does not specify fringe benefits, apprentices must be paid the full amount of fringe benefits listed on the wage determination for the applicable classification. If the Administrator determines that a different practice prevails for the applicable apprentice classification, fringes shall be paid in accordance with that determination. In the event the Office of Apprenticeship Training, Employer and Labor Services, or a State Apprenticeship Agency recognized by the Office, withdraws approval of an apprenticeship program, the Contractor will no longer be permitted to utilize apprentices at less than the applicable predetermined rate for the work performed until an acceptable program is approved. (ii) Trainees. Except as provided in 29 CFR § 5.16, trainees will not be permitted to work at less than the predetermined rate for the work performed unless they are employed pursuant to and individually registered in a program which has received prior approval, evidenced by formal certification by the U.S. Department of Labor, Employment and Training Administration. The ratio of trainees to journeymen on the job site shall not be greater than permitted under the plan approved by the Employment and Training Administration. Every trainee must be paid at not less than the rate specified in the approved program for the trainee’s level of progress, expressed as a percentage of the journeyman hourly rate specified in the applicable wage determination. Trainees shall be paid fringe benefits in accordance with the provisions of the trainee program. If the trainee program does not mention fringe benefits, trainees shall be paid the full amount of fringe benefits listed on the wage determination unless the Administrator of the Wage and Hour Division determines that there is an apprenticeship program associated with the corresponding journeyman wage rate on the wage determination that provides for less than full fringe benefits for apprentices. Any employee listed on the payroll at a trainee rate that is not registered and participating in a training plan approved by the Employment and Training Administration shall be paid not less than the applicable wage rate on the wage determination for the classification of work actually performed. In addition, any trainee performing work on the job site in excess of the ratio permitted under the registered program shall be paid not less than the applicable wage rate on the wage determination for the work actually performed. In the event the Employment and Training Administration withdraws approval of a training program, the Contractor will no longer be permitted to utilize trainees at less than the applicable predetermined rate for the work performed until an acceptable program is approved. 1O - Page 46
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(iii) Equal Employment Opportunity. The utilization of apprentices, trainees, and journeymen under this part shall be in conformity with the equal employment opportunity requirements of Executive Order 11246, as amended, and 29 CFR Part 30.
5. Compliance with Copeland Act Requirements.
The Contractor shall comply with the requirements of 29 CFR Part 3, which are incorporated by reference in this contract.
6. Subcontracts.
The Contractor or subcontractor shall insert in any subcontracts the clauses contained in 29 CFR §§ 5.5(a)(1) through (10) and such other clauses as the Federal Aviation Administration may by appropriate instructions require, and also a clause requiring the subcontractors to include these clauses in any lower tier subcontracts. The prime contractor shall be responsible for the compliance by any subcontractor or lower tier subcontractor with all the contract clauses in 29 CFR § 5.5.
7. Contract Termination: Debarment.
A breach of the contract clauses in paragraph 1 through 10 of this section may be grounds for termination of the contract, and for debarment as a contractor and a subcontractor as provided in 29 CFR § 5.12.
8. Compliance with Davis-Bacon and Related Act Requirements.
All rulings and interpretations of the Davis-Bacon and Related Acts contained in 29 CFR Parts 1, 3, and 5 are herein incorporated by reference in this contract.
9. Disputes Concerning Labor Standards.
Disputes arising out of the labor standards provisions of this contract shall not be subject to the general disputes clause of this contract. Such disputes shall be resolved in accordance with the procedures of the Department of Labor set forth in 29 CFR Parts 5, 6, and 7. Disputes within the meaning of this clause include disputes between the Contractor (or any of its subcontractors) and the contracting agency, the U.S.
Department of Labor, or the employees or their representatives.
10. Certification of Eligibility.
(i) By entering into this contract, the Contractor certifies that neither it (nor he or she) nor any person or firm who has an interest in the Contractor’s firm is a person or firm ineligible to be awarded Government contracts by virtue of section 3(a) of the Davis- Bacon Act or 29 CFR § 5.12(a)(1).
(ii) No part of this contract shall be subcontracted to any person or firm ineligible for award of a Government contract by virtue of section 3(a) of the Davis-Bacon Act or 29 CFR § 5.12(a)(1).
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(iii) The penalty for making false statements is prescribed in the U.S. Criminal Code, 18 USC § 1001.
Reference: 2 CFR Part 200, Appendix II(D); 29 CFR Part 5; 49 USC § 47112(b); 40 USC §§ 3141-3144, 3146, and 3147
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FAA – 11 Debarment and Suspension
APPLICABILITY - This requirement applies to covered transactions, which are defined in 2 CFR part 180 (Subpart B). AIP funded contracts are non-procurement transactions, as defined by 2 CFR § 180.970. Covered transactions include any AIP-funded contract, regardless of tier, that is awarded by a contractor, subcontractor, supplier, consultant, or its agent or representative in any transaction, if the amount of the contract is expected to equal or exceed $25,000. This includes contracts associated with land acquisition projects.
REQUIREMENT -
A11.3.1 Bidder or Offeror Certification
By submitting a bid/proposal under the solicitation for this contract, the Contractor must have certified that neither it nor its principals are presently debarred or suspended by any Federal department or agency from participation in this transaction.
A11.3.2 Lower Tier Contract Certification
CERTIFICATION OF LOWER TIER CONTRACTORS REGARDING DEBARMENT The Contractor, by administering each lower tier subcontract that exceeds $25,000 as a “covered transaction”, must verify each lower tier participant of a “covered transaction” under the project is not presently debarred or otherwise disqualified from participation in this federally assisted project. The Contractor will accomplish this by:
1. Checking the System for Award Manage ment at website: http://www.sam.gov.
2. Collecting a certification statement similar to the Certification of Offerer /Bidder Regarding Debarment, above.
3. Inserting a clause or condition in the covered transaction with the lower tier contract.
If the Federal Aviation Administration later determines that a lower tier participant failed to disclose to a higher tier participant that it was excluded or disqualified at the time it entered the covered transaction, the FAA may pursue any available remedies, including suspension and debarment of the non-compliant participant.
Reference: 2 CFR part 180 (Subpart B), 2 CFR part 200 Appendix II(H), 2 CFR Part 1200, DOT Order 4200.5; Executive Orders 12549 and 12689 1O - Page 49
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FAA – 12 Disadvantaged Business Enterprise
APPLICABILITY – all contracts with Airports that have a DBE program on file with the FAA.
Contract Assurance (§ 26.13) –
The Contractor or subcontractor shall not discriminate on the basis of race, color, national origin, or sex in the performance of this contract. The Contractor shall carry out applicable requirements of 49 CFR part 26 in the award and administration of Department of Transportation-assisted contracts. Failure by the Contractor to carry out these requirements is a material breach of this contract, which may result in the termination of this contract or such other remedy as the City deems appropriate, which may include, but is not limited to:
1) Withholding monthly progress payments;
2) Assessing sanctions;
3) Liquidated damages; and/or
4) Disqualifying the Contractor from future bidding as non-responsible.
Prompt Payment (§26.29) – The prime contractor agrees to pay each subcontractor under this prime contract for satisfactory performance of its contract no later than [10 days] days from the receipt of each payment the prime contractor receives from [the City]. The prime contractor agrees further to return retainage payments to each subcontractor within [30 days] days after the subcontractor’s work is satisfactorily completed. Any delay or postponement of payment from the above referenced time frame may occur only for good cause following written approval of the [City]. This clause applies to both DBE and non-DBE subcontractors.
Termination of DBE Subcontracts (49 CFR § 26.53(f)) –
The prime Contractor must not terminate a DBE subcontractor listed in response to the solicitation (or an approved substitute DBE firm) without prior written consent of the City.
This includes, but is not limited to, instances in which the prime contractor seeks to perform work originally designated for a DBE subcontractor with its own forces or those of an affiliate, a non-DBE firm, or with another DBE firm.
The prime Contractor shall utilize the specific DBEs listed to perform the work and supply the materials for which each is listed unless the Contractor obtains written consent of the City. Unless City consent is provided, the prime Contractor shall not be entitled to any payment for work or material unless it is performed or supplied by the listed DBE.
The City may provide such written consent only if the City agrees, for reasons stated in the concurrence document, that the prime Contractor has good cause to terminate the 1O - Page 50
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DBE firm. For purposes of this paragraph, good cause includes the circumstances listed in 49 CFR §26.53.
Before transmitting to the City its request to terminate and/or substitute a DBE subcontractor, the prime Contractor must give notice in writing to the DBE subcontractor, with a copy to the City, of its intent to request to terminate and/or substitute, and the reason for the request.
The prime contractor must give the DBE five days to respond to the prime contractor's notice and advise the City and the Contractor of the reasons, if any, why it objects to the proposed termination of its subcontract and why the City should not approve the prime Contractor's action. If required in a particular case as a matter of public necessity (e.g., safety), the City may provide a response period shorter than five days.
In addition to post-award terminations, the provisions of this section apply to preaward deletions of or substitutions for DBE firms put forward by offerors in negotiated procurements.
Reference: 49 CFR part 26
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FAA – 13 Distracted Driving
APPLICABILITY - contracts that exceed the micro-purchase threshold of 2 CFR § 200.320 (currently set at $10,000).
REQUIREMENT -
TEXTING WHEN DRIVING
In accordance with Executive Order 13513, “Federal Leadership on Reducing Text Messaging While Driving”, (10/1/2009) and DOT Order 3902.10, “Text Messaging While Driving”, (12/30/2009), the Federal Aviation Administration encourages recipients of Federal grant funds to adopt and enforce safety policies that decrease crashes by distracted drivers, including policies to ban text messaging while driving when performing work related to a grant or subgrant.
In support of this initiative, the City encourages the Contractor to promote policies and initiatives for its employees and other work personnel that decrease crashes by distracted drivers, including policies that ban text messaging while driving motor vehicles while performing work activities associated with the project. The Contractor must include the substance of this clause in all sub-tier contracts exceeding $10,000 that involve driving a motor vehicle in performance of work activities associated with the project.
Reference: Executive Order 13513, DOT Order 3902.10
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FAA – 14 Prohibition on Certain Telecommunications and Video Surveillance Services and Equipment
APPLICABILITY - all AIP funded contracts and lower-tier contracts.
REQUIREMENT -
Contractor and Subcontractor agree to comply with mandatory standards and policies relating to use and procurement of certain telecommunications and video surveillance services or equipment in compliance with the National Defense Authorization Act [Public Law 115-232 § 889(f)(1)].
Reference: 2 CFR § 200, Appendix II(K); 2 CFR § 200.216 1O - Page 53
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FAA – 15 Drug Free Workplace Requirements
APPLICABILITY - This provision applies to all AIP funded projects, but not to the contracts between the City and a contractor, subcontractors, suppliers, or subgrantees.
The Drug-Free Workplace Act of 1988 requires some Federal contractors and all Federal grantees to agree that they will provide drug-free workplaces as a condition of receiving a contract or grant from a Federal agency. The Act does not apply to contractors, subcontractors, or subgrantees, although the Federal grantees workplace may be where the contractors, subcontractors, or subgrantees are working.
Reference: 49 CFR part 32, Drug-Free Workplace Act of 1988 (41 U.S.C. 701 et seq., as amended)
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FAA – 16 Equal Employment Opportunity
APPLICABILITY – The purpose of this provision is to provide equal opportunity for all persons, without regard to race, color, religion, sex, or national origin who are employed or seeking employment with contractors performing under a federally-assisted construction contrDFW7KHUHDUHWZRSURYLVLRQVʊDFRQVWUXFWLRQFODXVHDQGD specification clause.
The equal opportunity contract clause applies to any contract or subcontract when the amount exceeds $10,000. Once the equal opportunity clause is determined to be applicable, the contract or subcontract must include the clause for the remainder of the year, regardless of the amount or the contract.
Contract Types –
Construction – all construction contracts and subcontracts as required above.
Equipment – all equipment contracts as required above that involves installation of equipment onsite (e.g., electrical vault equipment). This provision does not apply to equipment acquisition projects where the manufacture of the equipment takes place offsite at the vendor plant (e.g., ARFF and SRE vehicles).
Professional Services – all professional service agreements as required above.
Property – all land acquisition projects that include work that qualifies as construction work as defined by 41 CFR part 60 as required above. An example is installation of boundary fencing.
REQUIREMENT -
A16.3.1 EEO Contract Clause
During the performance of this contract, the Contractor agrees as follows:
(1) The Contractor will not discriminate against any employee or applicant for employment because of race, color, religion, sex, sexual orientation, gender identity, or national origin. The Contractor will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, sexual orientation, gender identify, or national origin.
Such action shall include, but not be limited to, the following: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff, or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The Contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided setting forth the provisions of this nondiscrimination clause. (2) The Contractor will, in all solicitations or advertisements for employees placed by or on behalf of the Contractor, state that all qualified applicants will receive 1O - Page 55
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consideration for employment without regard to race, color, religion, sex, sexual orientation, gender identity, or national origin.
(3) The contractor will not discharge or in any other manner discriminate against any employee or applicant for employment because such employee or applicant has inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant. This provision shall not apply to instances in which an employee who has access to the compensation information of other employees or applicants as a part of such employee's essential job functions discloses the compensation of such other employees or applicants to individuals who do not otherwise have access to such information, unless such disclosure is in response to a formal complaint or charge, in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or is consistent with the contractor's legal duty to furnish information. (4) The Contractor will send to each labor union or representative of workers with which it has a collective bargaining agreement or other contract or understanding, a notice to be provided by the agency contracting officer, advising the labor union or workers’ representative of the Contractor’s commitments under this section 202 of Executive Order 11246 of September 24, 1965, and shall post copies of the notice in conspicuous places available to employees and applicants for employment. (5) The Contractor will comply with all provisions of Executive Order 11246 of September 24, 1965, and of the rules, regulations, and relevant orders of the Secretary of Labor.
(6) The Contractor will furnish all information and reports required by Executive Order 11246 of September 24, 1965, and by the rules, regulations, and orders of the Secretary of Labor, or pursuant thereto, and will permit access to his books, records, and accounts by the contracting agency and the Secretary of Labor for purposes of investigation to ascertain compliance with such rules, regulations, and orders. (7) In the event of the Contractor’s noncompliance with the nondiscrimination clauses of this contract or with any such rules, regulations, or orders, this contract may be canceled, terminated, or suspended in whole or in part and the Contractor may be declared ineligible for further Government contracts in accordance with procedures authorized in Executive Order 11246 of September 24, 1965, and such other sanctions may be imposed and remedies invoked as provided in Executive Order 11246 of September 24, 1965, or by rule, regulation, or order of the Secretary of Labor, or as otherwise provided by law.
(8) The Contractor will include the provisions of paragraphs (1) through (8) in every subcontract or purchase order unless exempted by rules, regulations, or orders of the Secretary of Labor issued pursuant to section 204 of Executive Order 11246 of September 24, 1965, so that such provisions will be binding upon each subcontractor or vendor. The Contractor will take such action with respect to any 1O - Page 56
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subcontract or purchase order as may be directed by the Secretary of Labor as a means of enforcing such provisions, including sanctions for noncompliance:
Provided, however, that in the event the contractor becomes involved in, or is threatened with, litigation with a subcontractor or vendor as a result of such direction, the Contractor may request the United States to enter into such litigation to protect the interests of the United States.
A16.3.2 EEO Specification
STANDARD FEDERAL EQUAL EMPLOYMENT OPPORTUNITY
CONSTRUCTION CONTRACT SPECIFICATIONS
a. “Covered area” means the geographical area described in the solicitation from which this contract resulted;
b. “Director” means Director, Office of Federal Contract Compliance Programs (OFCCP), U.S. Department of Labor, or any person to whom the Director delegates authority;
c. “Employer identification number” means the Federal social security number used on the Employer’s Quarterly Federal Tax Return, U.S. Treasury Department Form 941; d. “Minority” includes:
(1) Black (all persons having origins in any of the Black African racial groups not of Hispanic origin);
(2) Hispanic (all persons of Mexican, Puerto Rican, Cuban, Central or South American, or other Spanish culture or origin, regardless of race); (3) Asian and Pacific Islander (all persons having origins in any of the original peoples of the Far East, Southeast Asia, the Indian Subcontinent, or the Pacific Islands); and
(4) American Indian or Alaskan native (all persons having origins in any of the original peoples of North America and maintaining identifiable tribal affiliations through membership and participation or community identification).
2. Whenever the Contractor, or any subcontractor at any tier, subcontracts a portion of the work involving any construction trade, it shall physically include in each subcontract in excess of $10,000 the provisions of these specifications and the Notice which contains the applicable goals for minority and female participation and which is set forth in the solicitations from which this contract resulted.
3. If the Contractor is participating (pursuant to 41 CFR part 60-4.5) in a Hometown Plan approved by the U.S. Department of Labor in the covered area either individually or through an association, its affirmative action obligations on all work in the Plan area (including goals and timetables) shall be in accordance with that Plan for those trades which have unions participating in the Plan. Contractors must be 1O - Page 57
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able to demonstrate their participation in and compliance with the provisions of any such Hometown Plan. Each contractor or subcontractor participating in an approved plan is individually required to comply with its obligations under the EEO clause and to make a good faith effort to achieve each goal under the Plan in each trade in which it has employees. The overall good faith performance by other contractors or subcontractors toward a goal in an approved Plan does not excuse any covered contractor’s or subcontractor’s failure to take good faith efforts to achieve the Plan goals and timetables.
4. The Contractor shall implement the specific affirmative action standards provided in paragraphs 7a through 7p of these specifications. The goals set forth in the solicitation from which this contract resulted are expressed as percentages of the total hours of employment and training of minority and female utilization the Contractor should reasonably be able to achieve in each construction trade in which it has employees in the covered area. Covered construction contractors performing construction work in a geographical areas where they do not have a Federal or federally assisted construction contract shall apply the minority and female goals established for the geographical area where the work is being performed. Goals are published periodically in the Federal Register in notice form, and such notices may be obtained from any Office of Federal Contract Compliance Programs office or from Federal procurement contracting officers. The Contractor is expected to make substantially uniform progress in meeting its goals in each craft during the period specified.
5. Neither the provisions of any collective bargaining agreement, nor the failure by a union with whom the Contractor has a collective bargaining agreement, to refer either minorities or women shall excuse the Contractor’s obligations under these specifications, Executive Order 11246, or the regulations promulgated pursuant thereto.
6. In order for the nonworking training hours of apprentices and trainees to be counted in meeting the goals, such apprentices and trainees must be employed by the Contractor during the training period, and the Contractor must have made a commitment to employ the apprentices and trainees at the completion of their training, subject to the availability of employment opportunities. Trainees must be trained pursuant to training programs approved by the U.S. Department of Labor.
7. The Contractor shall take specific affirmative actions to ensure equal employment opportunity. The evaluation of the Contractor’s compliance with these specifications shall be based upon its effort to achieve maximum results from its actions. The Contractor shall document these efforts fully, and shall implement affirmative action steps at least as extensive as the following:
a. Ensure and maintain a working environment free of harassment, intimidation, and coercion at all sites, and in all facilities at which the Contractor’s employees 1O - Page 58
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are assigned to work. The Contractor, where possible, will assign two or more women to each construction project. The Contractor shall specifically ensure that all foremen, superintendents, and other onsite supervisory personnel are aware of and carry out the Contractor’s obligation to maintain such a working environment, with specific attention to minority or female individuals working at such sites or in such facilities.
b. Establish and maintain a current list of minority and female recruitment sources, provide written notification to minority and female recruitment sources and to community organizations when the Contractor or its unions have employment opportunities available, and maintain a record of the organizations’ responses. c. Maintain a current file of the names, addresses, and telephone numbers of each minority and female off-the-street applicant and minority or female referral from a union, a recruitment source, or community organization and of what action was taken with respect to each such individual. If such individual was sent to the union hiring hall for referral and was not referred back to the Contractor by the union or, if referred, not employed by the Contractor, this shall be documented in the file with the reason therefor, along with whatever additional actions the Contractor may have taken.
d. Provide immediate written notification to the Director when the union or unions with which the Contractor has a collective bargaining agreement has not referred to the Contractor a minority person or woman sent by the Contractor, or when the Contractor has other information that the union referral process has impeded the Contractor’s efforts to meet its obligations. e. Develop on-the-job training opportunities and/or participate in training programs for the area which expressly include minorities and women, including upgrading programs and apprenticeship and trainee programs relevant to the Contractor’s employment needs, especially those programs funded or approved by the Department of Labor. The Contractor shall provide notice of these programs to the sources compiled under 7b above.
f. Disseminate the Contractor’s EEO policy by providing notice of the policy to unions and training programs and requesting their cooperation in assisting the Contractor in meeting its EEO obligations; by including it in any policy manual and collective bargaining agreement; by publicizing it in the company newspaper, annual report, etc.; by specific review of the policy with all management personnel and with all minority and female employees at least once a year; and by posting the company EEO policy on bulletin boards accessible to all employees at each location where construction work is performed.
g. Review, at least annually, the company’s EEO policy and affirmative action obligations under these specifications with all employees having any 1O - Page 59
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responsibility for hiring, assignment, layoff, termination, or other employment decisions including specific review of these items with onsite supervisory personnel such superintendents, general foremen, etc., prior to the initiation of construction work at any job site. A written record shall be made and maintained identifying the time and place of these meetings, persons attending, subject matter discussed, and disposition of the subject matter. h. Disseminate the Contractor’s EEO policy externally by including it in any advertising in the news media, specifically including minority and female news media, and providing written notification to and discussing the Contractor’s EEO policy with other contractors and subcontractors with whom the Contractor does or anticipates doing business.
i. Direct its recruitment efforts, both oral and written, to minority, female, and community organizations, to schools with minority and female students and to minority and female recruitment and training organizations serving the Contractor’s recruitment area and employment needs. Not later than one month prior to the date for the acceptance of applications for apprenticeship or other training by any recruitment source, the Contractor shall send written notification to organizations such as the above, describing the openings, screening procedures, and tests to be used in the selection process. j. Encourage present minority and female employees to recruit other minority persons and women and, where reasonable, provide after school, summer, and vacation employment to minority and female youth both on the site and in other areas of a contractor’s work force.
k. Validate all tests and other selection requirements where there is an obligation to do so under 41 CFR part 60-3.
l. Conduct, at least annually, an inventory and evaluation at least of all minority and female personnel, for promotional opportunities and encourage these employees to seek or to prepare for, through appropriate training, etc., such opportunities.
m. Ensure that seniority practices, job cl assifications, work assignments, and other personnel practices do not have a discriminatory effect by continually monitoring all personnel and employment related activities to ensure that the EEO policy and the Contractor’s obligations under these specifications are being carried out.
n. Ensure that all facilities and company activities are nonsegregated except that separate or single-user toilet and necessary changing facilities shall be provided to assure privacy between the sexes.
o. Document and maintain a record of all solicitations of offers for subcontracts from minority and female construction contractors and suppliers, including 1O - Page 60
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circulation of solicitations to minority and female contractor associations and other business associations.
p. Conduct a review, at least annually, of all supervisor’s adherence to and performance under the Contractor’s EEO policies and affirmative action obligations.
8. Contractors are encouraged to participate in voluntary associations, which assist in fulfilling one or more of their affirmative action obligations (7a through 7p). The efforts of a contractor association, joint contractor-union, contractor-community, or other similar group of which the Contractor is a member and participant may be asserted as fulfilling any one or more of its obligations under 7a through 7p of these specifications provided that the Contractor actively participates in the group, makes every effort to assure that the group has a positive impact on the employment of minorities and women in the industry, ensures that the concrete benefits of the program are reflected in the Contractor’s minority and female workforce participation, makes a good faith effort to meet its individual goals and timetables, and can provide access to documentation which demonstrates the effectiveness of actions taken on behalf of the Contractor. The obligation to comply, however, is the Contractor’s and failure of such a group to fulfill an obligation shall not be a defense for the Contractor’s noncompliance.
9. A single goal for minorities and a separate single goal for women have been established. The Contractor, however, is required to provide equal employment opportunity and to take affirmative action for all minority groups, both male and female, and all women, both minority and non-minority. Consequently, the Contractor may be in violation of the Executive Order if a particular group is employed in a substantially disparate manner (for example, even though the Contractor has achieved its goals for women generally, the Contractor may be in violation of the Executive Order if a specific minority group of women is underutilized).
10. The Contractor shall not use the goals and timetables or affirmative action standards to discriminate against any person because of race, color, religion, sex, sexual orientation, gender identity, or national origin.
11. The Contractor shall not enter into any subcontract with any person or firm debarred from Government contracts pursuant to Executive Order 11246.
12. The Contractor shall carry out such sanctions and penalties for violation of these specifications and of the Equal Opportunity Clause, including suspension, termination, and cancellation of existing subcontracts as may be imposed or ordered pursuant to Executive Order 11246, as amended, and its implementing regulations, by the Office of Federal Contract Compliance Programs. Any contractor who fails to carry out such sanctions and penalties shall be in violation of these specifications and Executive Order 11246, as amended.
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13. The Contractor, in fulfilling its obligations under these specifications, shall implement specific affirmative action steps, at least as extensive as those standards prescribed in paragraph 7 of these specifications, so as to achieve maximum results from its efforts to ensure equal employment opportunity. If the Contractor fails to comply with the requirements of the Executive Order, the implementing regulations, or these specifications, the Director shall proceed in accordance with 41 CFR part 60-4.8.
14. The Contractor shall designate a responsible official to monitor all employment related activity to ensure that the company EEO policy is being carried out, to submit reports relating to the provisions hereof as may be required by the Government, and to keep records. Records shall at least include for each employee, the name, address, telephone numbers, construction trade, union affiliation if any, employee identification number when assigned, social security number, race, sex, status (e.g., mechanic, apprentice, trainee, helper, or laborer), dates of changes in status, hours worked per week in the indicated trade, rate of pay, and locations at which the work was performed. Records shall be maintained in an easily understandable and retrievable form; however, to the degree that existing records satisfy this requirement, contractors shall not be required to maintain separate records.
15. Nothing herein provided shall be construed as a limitation upon the application of other laws which establish different standards of compliance or upon the application of requirements for the hiring of local or other area residents (e.g. those under the Public Works Employment Act of 1977 and the Community Development Block Grant Program).
Reference: 2 CFR 200, Appendix II(C), 41 CFR § 60-1.4, 41 CFR § 60-4.3, Executive Order 11246
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FAA – 17 Federal Fair Labor Standards Act
APPLICABILITY – Contract Types – Per the Department of Labor, all employees of certain enterprises having workers engaged in interstate commerce; producing goods for interstate commerce; or handling, selling, or otherwise working on goods or materials that have been moved in or produced for such commerce by any person are covered by the FLSA.
All consultants, sub-consultants, contractors, and subcontractors employed under this federally assisted project must comply with the FLSA.
Professional Services – 29 CFR § 213 exempts employees in a bona fide executive, administrative or professional capacity. Because professional firms employ individuals that are not covered by this exemption, the agreement with a professional services firm must include the FLSA provision.
REQUIREMENT -
The provisions of 29 CFR part 201, the Federal Fair Labor Standards Act (FLSA), are incorporated by reference with the same force and effect as if given in full text. The FLSA sets minimum wage, overtime pay, recordkeeping, and child labor standards for full and part-time workers.
The Contractor has full responsibility to monitor compliance to the referenced statute or regulation. The Contractor must address any claims or disputes that arise from this requirement directly with the U.S. Department of Labor – Wage and Hour Division.
Reference: 29 USC § 201, et seq; 2 CFR § 200.430
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FAA – 18 Lobbying and Influencing Federal Employees
APPLICABILITY- all contracts exceeding $100,000.
REQUIREMENT -
Consultants and contractors that apply or bid for an award of $100,000 or more must have certified that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any Federal contract, grant, or another award covered by 31 USC §1352. Each tier must also disclose any lobbying with non-Federal funds that takes place in connection with obtaining any Federal award.
For an award over $100,00, the bidder or offeror certifies by signing and submitting this bid or proposal, to the best of his or her knowledge and belief, that:
(1) No Federal appropriated funds have been pa id or will be paid, by or on behalf of the bidder or offeror, to any person for influencing or attempting to influence an officer or employee of an agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement.
(2) If any funds other than Federal appropria ted funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and submit Standard Form- LLL, “Disclosure Form to Report Lobbying,” in accordance with its instructions. (3) The undersigned shall require that the language of this certification be included in the award documents for all sub-awards at all tiers (including subcontracts, sub-grants, and contracts under grants, loans, and cooperative agreements) and that all sub- recipients shall certify and disclose accordingly.
This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by section 1352, title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.
Reference: 31 USC § 1352 – Byrd Anti-Lobbying Amendment, 2 CFR part 200, Appendix II(I), 49 CFR part 20, Appendix A
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FAA – 19 Prohibition of Segregated Facilities
APPLICABILITY - The Contractor must comply with the requirements of the EEO clause by ensuring that facilities they provide for employees are free of segregation on the basis of race, color, religion, sex, sexual orientation, gender identity, or national origin. This clause must be included in all contracts that include the equal opportunity clause, regardless of the amount of the contract.
Contract Types – any contract containing the Equal Employment Opportunity clause of 41 CFR § 60-1.4. This obligation flows down to subcontract and sub-tier purchase orders containing the Equal Employment Opportunity clause.
Construction – Construction work means construction, rehabilitation, alteration, conversion, extension, demolition or repair of buildings, highways, or other changes or improvements to real property, including facilities providing utility services. The term also includes the supervision, inspection, and other onsite functions incidental to the actual construction.
Equipment – On site installation of equipment such as airfield lighting control equipment meets the definition of construction and thus this provision would apply. This provision does not apply to equipment projects involving manufacture of the item at a vendor’s manufacturing plant. An example would be the manufacture of a SRE or ARFF vehicle.
Professional Services – Professional services that include tasks that qualify as construction work as defined by 41 CFR part 60-1. Examples include the installation of noise monitoring equipment.
Property/Land – Land acquisition contracts that include tasks that qualify as construction work as defined by 41 CFR part 60-1. Examples include demolition of structures or installation of boundary fencing.
REQUIREMENT -
(a) The Contractor agrees that it does not and will not maintain or provide for its employees any segregated facilities at any of its establishments, and that it does not and will not permit its employees to perform their services at any location under its control where segregated facilities are maintained. The Contractor agrees that a breach of this clause is a violation of the Equal Employment Opportunity clause in this contract.
(b) “Segregated facilities,” as used in this clause, means any waiting rooms, work areas, rest rooms and wash rooms, restaurants and other eating areas, time clocks, locker rooms and other storage or dressing areas, parking lots, drinking fountains, recreation or entertainment areas, transportation, and housing facilities provided for employees that are segregated by explicit directive or are in fact segregated on the basis of race, color, religion, sex, sexual orientation, gender identity, or national origin because of 1O - Page 65
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written or oral policies or employee custom. The term does not include separate or single-user rest rooms or necessary dressing or sleeping areas provided to assure privacy between the sexes.
(c) The Contractor shall include this clause in every subcontract and purchase order that is subject to the Equal Employment Opportunity clause of this contract.
Reference: 2 CFR Part 200, Appendix II (C); 41 CFR Part 60-1 1O - Page 66
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FAA – 20 Occupational Safety and Health Act
APPLICABILITY – Contract Types – All contracts and subcontracts must comply with the Occupational Safety and Health Act of 1970 (OSH). The U.S. Department of Labor Occupational Safety and Health Administration (OSHA) oversees the workplace health and safety standards wage provisions from OSH.
REQUIREMENT -
All contracts and subcontracts that result from this solicitation incorporate by reference the requirements of 29 CFR Part 1910 with the same force and effect as if given in full text. The employer must provide a work environment that is free from recognized hazards that may cause death or serious physical harm to the employee. The employer retains full responsibility to monitor its compliance and their subcontractor’s compliance with the applicable requirements of the Occupational Safety and Health Act of 1970 (29 CFR Part 1910). The employer must address any claims or disputes that pertain to a referenced requirement directly with the U.S. Department of Labor – Occupational Safety and Health Administration.
Reference: 29 CFR part 1910
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FAA – 21 Procurement of Recovered Materials
APPLICABILITY – Contract Types – This provision applies to any contracts that include procurement of products designated in subpart B of 40 CFR part 247 where the purchase price of the item exceeds $10,000 or the value of the quantity acquired by the preceding fiscal year exceeded $10,000.
Construction and Equipment – all construction and equipment projects.
Professional Services and Property – if the agreement includes procurement of a product that exceeds $10,000.
REQUIREMENT -
Contractor and subcontractor agree to comply with Section 6002 of the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act, and the regulatory provisions of 40 CFR Part 247. In the performance of this contract and to the extent practicable, the Contractor and subcontractors are to use products containing the highest percentage of recovered materials for items designated by the Environmental Protection Agency (EPA) under 40 CFR Part 247 whenever:
1) The contract requires procurement of $10,000 or more of a designated item during the fiscal year; or
2) The contractor has procured $10,000 or more of a designated item using Federal funding during the previous fiscal year.
The list of EPA-designated items is available at www.epa.gov/smm/comprehensive- procurement-guidelines-construction-products.
Section 6002(c) establishes exceptions to the preference for recovery of EPA- designated products if the contractor can demonstrate the item is:
a) Not reasonably available within a timeframe providing for compliance with the contract performance schedule;
b) Fails to meet reasonable contract performance requirements; or c) Is only available at an unreasonable price.
Reference: 2 CFR § 200.323, 2 CFR Part 200, Appendix II (J); 40 CFR part 247, 42 USC § 6901, et seq (Resource Conservation and Recovery Act) 1O - Page 68
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FAA – 22 Rights to Inventions
APPLICABILITY – Contract Types – This provision applies to all contracts and subcontracts with small business firms or nonprofit organizations that include performance of experimental, developmental, or research work. This clause is not applicable to construction, equipment, or professional service contracts unless the contract includes experimental, developmental, or research work.
REQUIREMENT -
Contracts or agreements that include the performance of experimental, developmental, or research work must provide for the rights of the Federal Government and the City in any resulting invention as established by 37 CFR part 401, Rights to Inventions Made by Non-profit Organizations and Small Business Firms under Government Grants, Contracts, and Cooperative Agreements. This contract incorporates by reference the patent and inventions rights as specified within 37 CFR §401.14. Contractor must include this requirement in all sub-tier contracts involving experimental, developmental, or research work.
Reference: 2 CFR § 200, Appendix II(F), 37 CFR 401
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FAA - 23 Seismic Safety
APPLICABILITY – Contract Types – This provision applies to construction of new buildings and additions to existing buildings financed in whole or in part through the Airport Improvement Program.
Professional Services– any contract involved in the construction of new buildings or structural addition to existing buildings.
Construction – any contract involved in the construction of new buildings or structural addition to existing buildings.
Equipment – if the project involves construction or structural addition to a building such as an electrical vault project to accommodate or install equipment.
Land – This provision will not typically apply to a property/land project.
REQUIREMENT -
A23.3.1 Professional Service Agreements for Design
SEISMIC SAFETY
In the performance of design services, the Consultant agrees to furnish a building design and associated construction specification that conform to a building code standard that provides a level of seismic safety substantially equivalent to standards as established by the National Earthquake Hazards Reduction Program (NEHRP). Local building codes that model their building code after the current version of the International Building Code (IBC) meet the NEHRP equivalency level for seismic safety.
At the conclusion of the design services, the Consultant agrees to furnish the Owner a “certification of compliance” that attests conformance of the building design and the construction specifications with the seismic standards of NEHRP or an equivalent building code.
A23.3.2 Construction Contracts
SEISMIC SAFETY
The Contractor agrees to ensure that all work performed under this contract, including work performed by subcontractors, conforms to a building code standard that provides a level of seismic safety substantially equivalent to standards established by the National Earthquake Hazards Reduction Program (NEHRP). Local building codes that model their code after the current version of the International Building Code (IBC) meet the NEHRP equivalency level for seismic safety.
Reference: 49 CFR Part 41
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FAA – 24 Tax Delinquency and Felony Conviction
APPLICABILITY – This provision applies to all contracts funded in whole or part with AIP.
REQUIREMENT -
The Contractor must have certified under the procurement process that resulted in the award of this contract that:
• Contractor has not been convicted of a Federal felony within the last 24 months; or • Contractor does not have any outstanding tax liability for which all judicial and administrative remedies have lapsed or been exhausted.
Reference: Sections 8113 of the Consolidated Appropriations Act, 2022 (Public Law 117-103), and similar provisions in subsequent appropriations acts.
DOT Order 4200.6 – Appropriations Act Requirements for Procurement and Non- Procurement Regarding Tax Delinquency and Felony Convictions
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FAA – 25 Termination of Contract
APPLICABILITY – All contracts and subcontracts in excess of $10,000.
REQUIREMENT -
See Section 4.5 of the Agreement.
Reference: 2 CFR § 200 Appendix II(B), FAA Advisory Circular 150/5370-10, Section 80-09
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FAA – 26 Foreign Trade Restriction
APPLICABILITY – all AIP funded projects.
REQUIREMENT -
TRADE RESTRICTION CERTIFICATION
By accepting this contract the Contractor certifies the following statements are true – 1) is not owned or controlled by one or more citizens of a foreign country included in the list of countries that discriminate against U.S. firms as published by the Office of the United States Trade Representative (USTR);
2) has not knowingly entered into any contract or subcontract for this project with a person that is a citizen or national of a foreign country included on the list of countries that discriminate against U.S. firms as published by the USTR; and 3) has not entered into any subcontract for any product to be used on the Federal project that is produced in a foreign country included on the list of countries that discriminate against U.S. firms published by the USTR.
This certification concerns a matter within the jurisdiction of an agency of the United States of America and the making of a false, fictitious, or fraudulent certification may render the maker subject to prosecution under Title 18 USC Section 1001.
The Contractor must provide immediate written notice to the City if the Contractor learns that its certification or that of a subcontractor was erroneous when submitted or has become erroneous by reason of changed circumstances. The Contractor must require subcontractors provide immediate written notice to the Contractor if at any time it learns that its certification was erroneous by reason of changed circumstances.
Unless the restrictions of this clause are waived by the Secretary of Transportation in accordance with 49 CFR 30.17, no contract shall be awarded to an Offeror or subcontractor:
1) who is owned or controlled by one or more citizens or nationals of a foreign country included on the list of countries that discriminate against U.S. firms published by the USTR or
2) whose subcontractors are owned or controlled by one or more citizens or nationals of a foreign country on such USTR list or
3) who incorporates in the public works project any product of a foreign country on such USTR list.
Nothing contained in the foregoing shall be construed to require establishment of a system of records in order to render, in good faith, the certification required by this provision. The knowledge and information of a contractor is not required to exceed that 1O - Page 73
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which is normally possessed by a prudent person in the ordinary course of business dealings.
The Contractor agrees it will incorporate this provision for certification without modification in all lower tier subcontracts. The Contractor may rely on the certification of a prospective subcontractor that it is not a firm from a foreign country included on the list of countries that discriminate against U.S. firms as published by USTR, unless the Contractor has knowledge that the certification is erroneous.
This certification is a material representation of fact upon which reliance was placed when making an award. If it is later determined that the Contractor or subcontractor knowingly rendered an erroneous certification, the Federal Aviation Administration (FAA) may direct through the City cancellation of the contract or subcontract for default at no cost to the City or the FAA.
Reference: 49 USC § 50104, 49 CFR part 30
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FAA – 27 Veteran’s Preference
APPLICABILITY – This provision applies to all AIP funded projects that involve labor to carry out the project. This preference, which excludes executive, administrative, and supervisory positions, applies to covered veterans [as defined under § 47112(c)] only when they are readily available and qualified to accomplish the work required by the project.
REQUIREMENT -
In the employment of labor (excluding executive, administrative, and supervisory positions), the Contractor and all sub-tier contractors must give preference to covered veterans as defined within Title 49 United States Code Section 47112. Covered veterans include Vietnam-era veterans, Persian Gulf veterans, Afghanistan-Iraq war veterans, disabled veterans, and small business concerns (as defined by 15 USC 632) owned and controlled by disabled veterans. This preference only applies when there are covered veterans readily available and qualified to perform the work to which the employment relates.
Reference: 49 USC § 47112(c)
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FAA – 28 Domestic Preferences for Procurements
APPLICABILITY – all contracts and Purchase orders for work or products under the grant.
REQUIREMENT -
The Contractor certifies by signing and submitting its bid or proposal that, to the greatest extent practicable, the Contractor has provided a preference for the purchase, acquisition, or use of goods, products, or materials produced in the United States (including, but not limited to, iron, aluminum, steel, cement, and other manufactured products) in compliance with 2 CFR § 200.322.
Reference: 2 CFR § 200.322; 2 CFR Part 200, Appendix II(L)
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ATTACHMENT B
PUBLIC INTEGRITY BUSINESS DISCLOSURE
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40 1. Name of Entity
PUBLIC INTEGRITY DISCLOSURE
APPLICANT DISCLOSURE FORM
GoSeeTell Network dba SQarkloft Me dia
2. Address of Entity (Principal Place of Business)
225 SW Broadway. Suite 400, Portland, OR 97205
3. Local or California Address (if different than #2)
1 4. State where Entity is Registered with Secretary of State Oregon
If other than California, is the Entitv also registered in California?� Yes n No
5. Type of Entity '
◄ Corporation Olimiled Liability Company □Partnership □Trust OOther(pleasespecify)
6. Officers, Directors, Members, Managers, Trustees, other Fiduciaries (please specify) Note: If any response is not a natural person, please identify all officers, directors, members, managers and other fiduciaries for the member, manager, trust, or other entity
Marti11 Stoll
[name]
[nameJ
[name]
-x6tticer D Director D Member D Manager
D General Partner D Limited Partner
Oother
0 Officer D Director D Member D Manager
D General Partner D Limited Partner
□Other
O Officer D Director D Member D Manager
D General Partner D Limited Partner
□Other
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X
41 1O - Page 79
7. Owners/Investors with a 5% beneficial interest in the Applicant Entity or a related entity
EXAMPLE
JANE DOE 50%, ABC COMPANY, Inc.
[name of owner/investor] [percentage of beneficial interest in entity and name of entity]
A.
Martin Stoll 100%
[name of owner/investor] [percentage of beneficial interest in entity and name of entity]
8. [name of owner/investor] [percentage of beneficial interest in entity and name of entity]
C.
[name of owner/investor] [percentage of beneficial interest in entity and name of entity]
D.
[name of owner/investor] [percentage of beneficial interest in entity and name of entity]
E.
[name of owner/investor] [percentage of beneficial interest in entity and name of entity]
I DECLARE UNDER PENAL TY OF PERJURY UNDER THE LAWS OF THE STATE OF CALIFORNIA THAT THE FOREGOING IS TRUE AND CORRECT.
Sigr~!ure of o~·sclo ing Party, Printed Name, Title
~lk I .
Date
CITY COUNCIL STAFF REPORT
DATE: SEPTEMBER 25, 2025 CONSENT CALENDAR
SUBJECT: APPROVE PROFESSIONAL SERVICES AGREEMENT NO. 25P269
WITH PASLAY MANAGEMENT GROUP, LLC FOR AIRPORT PROGRAM
MANAGEMENT AND ADVISORY CONSULTING SERVICES FOR PALM
SPRINGS INTERNATIONAL AIRPORT
FROM: Scott C. Stiles, City Manager
BY: Aviation Department
SUMMARY:
Award a professional services agreement with Paslay Management Group, LLC (Paslay Group) for Airport Program Management & Advisory Consulting Services for the Palm Springs International Airport (Airport).
RECOMMENDATION:
1) Approve Professional Services Agreement No. 25P269 (Attachment A ) with Paslay Management Group, LLC to provide Airport Program Management & Advisory Consulting Services for the Palm Springs International Airport for a five- year term in an amount not to exceed $7,151,999 beginning September 26, 2025, through September 25, 2030.
2) Authorize the City Manager or designee to execute all necessary documents.
BUSINESS PRINCIPAL DISCLOSURE:
According to the Public Integrity Disclosure form (Attachment B) submitted on June 12, 2025, Paslay Management Group, LLC is registered in the state of Texas.
BACKGROUND:
The Airport is a small hub airport serving roughly 3.3 million annual passengers and supports nine resort cities in the Coachella Valley. The Airport has 980 acres that includes the following:
• Approximately 57 buildings
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Award Airport Program Management & Advisory Consulting Services Contract
• The Wexler designed terminal building that is listed as a Class 1 asset on the National Register of Historic Places
• Two open-air concourses with a total of 18 gates
• Two parallel runways:
1. 13R/31L is a 10,000 foot runway that serves commercial traffic
2. 13L/31R is a 5,100 foot runway that serves light general aviation aircraft • 13 tenant airlines serving over 40 non-stop destinations across the U.S. and from pre-clearance cities in Canada.
The Airport is completing a comprehensive Master Plan process which contemplates nearly $2 .2 billion in cap ital improvements over the next 15 -20 years. The Airport is expecting to double its growth over the 20-year planning horizon.
Short-term capital development plans include the expansion of the main terminal and replacement of the outbound Baggage Handling System (BHS) and construction of a consolidated rental car facility. Medium -term capital development plans also include expansion of the main terminal and a north concourse expansion which would add seven gates and a Federal Inspection Station (FIS), expansion and relocation of public parking and employee parking areas, and airfield improvements including potential reconstruction of the primary commercial runway, the addition of Remain Overnight (RON) parking, and relocation of a Fixed Base Operator.
Due to the potential scale, number of concurrent projects, and operational complexity, the Airport seeks to engage a Program Management & Advisory Services consulting team with airport specific expertise and specialty technical services to assist with the development and oversight of the mega-program delivery . This approach is standard practice at peer airports of similar size facing large capital programs.
On September 17, 2025, the Paslay Group provided a presentation (Attachment C) to the Airport Commission, and the Airport Commission voted unanimously (15-0) in favor of recommending to the City Council the approval of Professional Services Agreement No. 25P269 with Paslay Management Group.
STAFF ANALYSIS:
The Aviation Department worked with the Procurement and Contracting Department to issue a Request for Proposals (RFP) to find a contractor for the needed services. The RFP was advertised in the local newspaper and published on the PlanetBids website , and 7 proposals were received by the deadline of June 12, 2025, as follows:
• Accenture Infrastructure and Capital Projects, LLC – Palm Desert, CA • Hill International, Inc. – La Quinta, CA
• M2P Consulting, Inc. – Westchester, CA
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Award Airport Program Management & Advisory Consulting Services Contract
• Paslay Management Group, LLC – Fort Worth, TX
• PMA Consultants, LLC – Seal Beach, CA
• STV Construction, Inc. – Rancho Cucamonga, CA
• Vantage Group (Services), LLC – New York, NY
An evaluation committee consisting of City staff from the Aviation Department, a representative from Daley Strategies, and a consultant from InterVISTAS Consulting USA LLC, the Airport’s on-call planning firm that assisted with preparing the scope of work for this agreement, reviewed and scored the proposals received against published criteria in the RFP. Criteria included the firm’s experience, the staff experience, the understanding of the scope of work, references and cost proposal. Based on the review of the proposals, interview and scoring, the evaluation committee recommended that the City enter into contract negotiations with the highest scoring firm. Paslay Management Group, LLC was ranked the highest by the evaluation team and is being recommended for award of the contract.
The Paslay Group has 19 years of airport con sulting experience and 50 airport engagements since 2006. Depicted below are some of Paslay Group’s current airport program management engagements.
Airport Project
Value
Project Description
Ontario International
Airport
$500M Support for redevelopment and evaluation of the
practices and procedures for capital development
delivery.
Phoenix Sky Harbor
International Airport
$3.5B Capital Improvement Program assessment.
John Wayne Airport $750M Capital Improvement Program – Planning, implementation, and execution.
St. Louis Lambert
International Airport
$3B Consolidated Terminal Program, Airport planning
and development of department staff augmentation.
Charleston
International Airport
$1B Terminal expansion and concourse development.
Cleveland Hopkins
Airport
$1.8B Terminal redevelopment, concourse
replacement/redevelopment, Baggage Handling
System, landside roadway, parking, future P3
CONRAC in planning phase.
Cincinnati/Northern
Kentucky
International Airport
$600M Terminal and concourse redevelopment.
Nashville
International Airport
$1.6B Expansion of two concourses with new air freight
building, terminal roadway improvements, and
CONRAC.
Pittsburgh
International Airport
$1.93B New terminal, CONRAC, parking, and roadways.
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Award Airport Program Management & Advisory Consulting Services Contract
The Airport is seeking professional Airport Program Management and Advisory consulting services to ensure the success of the Airport’s estimated $2.2 billion capital program. The complexity of the need is illustrated in the Airport’s Planned and Ongoing Projects 2026 - 2030 (Attachment D), which reflects overlapping timelines, diverse project scopes, and a sustained capital workload requiring coordinated, program-level oversight. The on-call, task-based services will include the following:
• Program Strategy and Management Services
• Program Scheduling
• Oversight and Budget Control
• Document Controls Design Management
• Preconstruction Facilitation
• Project Management
• Advisory Services
• Oversight of a Program Management/Construction Management Team responsible for key projects (if needed)
The Airport Program Management and Advisory consulting services will ensure efficient and effective project delivery, regulatory compliance, stakeholder coordination, and strategic alignment with the Airport’s long-term growth objectives by providing program- level oversight, advisory, and integration services. Individual projects will continue to have separate designers, contractors, and construction management firms, making it clear that Paslay Management Group, LLC’s work is complementary rather than duplicative.
ENVIRONMENTAL ASSESSMENT:
The requested City Council action is not a “Project” as defined by the California Environmental Quality Act (CEQA). Pursuant to Section 15378(a), a “Project” means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. The requested action is to approve contracts for the above -mentioned services, and is exempt from CEQA pursuant to Section 15378(b), in that a “Project” does not include: (5) Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.
ALIGNMENT WITH STRATEGIC PLANNING:
Approval of this action supports the City of Palm Springs’ 2023/25 Strategic Plan Broad Goals of Infrastructure and Facilities and Economic Development, and it also supports the Airport’s 2025-2029 Strategic Plan’s Strategic Priorities for Infrastructure.
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Award Airport Program Management & Advisory Consulting Services Contract
FISCAL IMPACT:
Compensation is based on an hourly rate schedule for on-call and task-based projects.
The Contractor will be required to bill on a Time-and-Materials basis.
Funding of $400,000 is budgeted in Fiscal Year 2025 -26 and in Fiscal Year 2026-27 in the Department of Aviation Administration Contractual Services Account 4157020-40105.
If the Airport staff determines that additional funding is necessary for Fiscal Years 2025- 26 and 2026 -27, staff will seek City Council’s approval for an appropriation of funds to increase the budget for Account 4157020 -40105. Sufficient funds will be budgeted for Fiscal Year 2027-28, 2028-29, and 2029-30.
REVIEWED BY:
Executive Director of Aviation: Harry Barrett, Jr.
Procurement & Contracting Manager: Tabitha Richards
Director of Finance & Treasurer: Kristopher Mooney
City Attorney: Geremy Holm
City Manager: Scott Stiles
ATTACHMENTS:
A. Professional Services Agreement No. 25P269
B. Public Integrity Disclosure
C. Paslay Group Presentation
D. Airport’s Planned and Ongoing Projects 2026 - 2030
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ATTACHMENT A
PROFESSIONAL SERVICES AGREEMENT NO. 25P269
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PROFESSIONAL SERVICES AGREEMENT 25P269
AIRPORT PROGRAM MANAGEMENT & ADVISORY CONSULTING
SERVICES
This Professional Services Agreement (“Agreement”) is entered into this 26TH day of September 2025 (“Effective Date”), by and between the City of Palm Springs, a California charter city and municipal corporation, (“City”) and Paslay Management Group LLC, a Texas limited liability corporation, (“Consultant”). City and Consultant are individually referred to as “Party” and are collectively referred to as the “Parties.”
RECITALS
A. City requires the services of a qualified firm to provide airport program management and advisory consulting services (“Project”).
B. Consultant has submitted to City a proposal to provide airport program management and advisory consulting services to City under the terms of this Agreement.
C. Consultant is qualified by virtue of its experience, training, education, reputation, and expertise to provide these services and has agreed to provide such services as provided in this Agreement.
D. City desires to retain Consultant to provide such professional services.
NOW, THEREFORE, in consideration of the promises and mutual obligations, covenants, and conditions contained herein, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
AGREEMENT
1. SERVICES OF CONSULTANT
1.1 Scope of Services. In compliance with all terms and conditions of this Agreement, Consultant agrees to perform the professional services set forth in the Scope of Services described in Exhibit “A” (the “Services” or “Work”), which is attached and incorporated herein by this reference. As a material inducement to the City entering into this Agreement, Consultant represents and warrants that Consultant is a provider of first class work and professional services and that Consultant is experienced in performing the Work contemplated and, in light of such status and experience, Consultant covenants that it shall perform the Work in a competent, professional, and satisfactory manner consistent with the level of care and skill ordinarily exercised by high quality, experienced and well qualified members of the profession currently practicing under similar conditions. In the event of any inconsistency between the terms contained in the Scope of Services/Work and the terms set forth in this Agreement, the terms set forth in this Agreement shall govern.
1.2 Contract Documents. The Agreement between the Parties shall consist of the following: (1) this Agreement; (2) the Scope of Services; (3) the City’s Request for Proposals; and, (4) the Consultant’s signed, original proposal submitted to the City (“Consultant ’s Proposal”), (collectively referred to as the “Contract Documents”). The City’s Request for Proposals and the Consultant’s Proposal, which are both attached as Exhibit “B” , respectively, are incorporated herein by this reference and are made a part of this Agreement. The Scope of Services shall 1P - Page 7
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include the Consultant’s Proposal. All provisions of the Scope of Services, the City’s Request for Proposals and the Consultant’s Proposal shall be binding on the Parties. Should any conflict or inconsistency exist in the Contract Documents, the conflict or inconsistency shall be resolved by applying the provisions in the highest priority document, which shall be determined in the following order of priority: (1st) the provisions of the Scope of Services (Exhibit “A” ); (2 nd) the provisions of the City’s Request for Proposal; (3 rd) the terms of this Agreement; and, (4 th) the provisions of the Consultant’s Proposal.
1.3 Compliance with Law. Consultant warrants that all S ervices rendered shall be performed in accordance with all applicable federal, state, and local laws, statutes , ordinances lawful orders, rules, and regulations. Consultant shall be liable for all violations of such laws and regulations in connection with the Services and this Agreement.
1.4 Licenses, Permits, Fees, and Assessments . Consultant represents and warrants to City that it has obtained all licenses, permits, qualifications, and approvals of whatever nature that are legally required to practice its profession and perform the Work required by this Agreement. Consultant represents and warrants to City that Consultant shall, at its sole cost and expense, keep in effect at all times during the term of this Agreement, any license, permit, qualification, or approval that is legally required for Consultant to perform the Work and under this Agreement.
1.5 Familiarity with Work. By executing this Agreement, Consultant warrants that Consultant: (a) has thoroughly investigated and considered the Scope of Services to be performed, (b) has carefully considered how the Services should be performed, and (c) fully understands the facilities, difficulties, and restrictions attending performance of the Services under this Agreement.
2. COMPENSATION
2.1 Maximum Contract Amount. For the Services rendered under this Agreement, Consultant shall be compensated by City in accordance with the Schedule of Compensation , which is attached as Exhibit “B” and incorporated herein by this reference. Compensation shall not exceed the maximum contract amount of Seven Million One Hundred Fifty One Thousand Nine Hundred Ninety-Nine Dollars ($7,151,999) ("Maximum Contract Amount"), except as may be provided under Section 2.3. The method of compensation shall be as set forth in Exhibit “B.” Compensation for necessary expenditures must be approved in advance by the Contract Officer designated under Section 4.2. The Maximum Contract Amount shall include the attendance of Consultant at all project meetings reasonably deemed necessary by the City. Consultant shall not be entitled to any increase in the Maximum Contract Amount for attending these meetings.
2.2. Method of Payment . Un less another method of payment is specified in the Schedule of Compensation (Exhibit “B”), in any month in which Consultant wishes to receive payment, Consultant shall submit to the City an invoice for Services rendered prior to the date of the invoice. The invoice shall be in a form approved by the City’s Finance Director and must be submitted no later than the tenth (10th) working day of such month. Such requests shall be based upon the amount and value of the Services performed by Consultant and accompanied by such reporting data including an itemized breakdown of all costs incurred and tasks performed during the period covered by the invoice, as may be required by the City. City shall use reasonable efforts to make payments to Consultant within forty-five (45) days after receipt of the invoice or as soon as is reasonably practical. There shall be a maximum of one payment per month.
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2.3 Changes in Scope. In the event any change or changes in the Scope of Services is requested by City, the Parties shall execute a written amendment to this Agreement, specifying all proposed amendments, including, but not limited to, any additional fees. An amendment may be entered into:
A. To provide for revisions or modifications to documents, work product, or work, when required by the enactment or revision of any subsequent law; or B. To provide for additional services not included in this Agreement or not customarily furnished in accordance with generally accepted practice in Consultant’s profession.
2.4 Appropriations. This Agreement is subject to and contingent upon funds being appropriated by the City Council for each fiscal year covered by the Agreement. If such appropriations are not made, this Agreement shall automatically terminate without penalty to the City.
3. SCHEDULE OF PERFORMANCE
3.1 Term. Unless earlier terminated in accordance with Section 4.5 of this Agreement, this Agreement shall continue in full force and effect for a period of five years, commencing on September 26, 2025, and ending on September 25, 2030, unless extended by mutual written agreement of the Parties. In addition, the term may be extended at the sole discretion of the City upon written notice to the Contractor, for two additional one-year terms.
3.2 Termination Prior to Expiration of Term . The City may terminate this Agreement at any time, with or without cause, upon thirty (30) days written notice to Consultant.
Where termination is due to the fault of Consultant and constitutes an immediate danger to health, safety, and general welfare, the period of notice shall be such shorter time as may be determined by the City. Upon receipt of the notice of termination, Consultant shall immediately cease all Services except such as may be specifically approved by the Contract Officer. Consultant shall be entitled to compensation for all Services rendered prior to receipt of the notice of termination and for any Services authorized by the Contract Officer after such notice. City shall not be liable for any costs other than the charges or portions thereof which are specified herein. Consultant shall not be entitled to payment for unperformed Services and shall not be entitled to damages or compensation for termination of Work. Consultant may not terminate this Agreement except for cause, upon thirty (30) days written notice to City.
3.3 Schedule of Performance. Consultant shall commence the Services under this Agreement upon receipt of a written notice to proceed and shall perform all Services within the time period(s) established in the Schedule of Performance. When requested by Consultant, extensions to the time period(s) specified in the Schedule of Performance may be approved in writing by the C ontract Officer, but such extensions shall not exceed one hundred eighty (180) days cumulatively; however, the City shall not be obligated to grant such an extension.
3.4 Force Majeure. The time for performance of Services to be rendered under this Agreement may be extended because of any delays due to a Force Majeure Event, if Consultant notifies the Contract Officer within ten (10) days of the commencement of the Force Majeure Event. A Force Majeure Event shall mean an event that materially affects the Consultant ’s performance and is one or more of the following: (1) Acts of God or other natural disasters occurring at the project site; (2) terrorism or other acts of a public enemy; (3) orders of governmental authorities (including, without limitation, unreasonable and unforeseeable delay in 1P - Page 9
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the issuance of permits or approvals by governmental authorities that are required for the Work); and (4) pandemics, epidemics or quarantine restrictions. For purposes of this section, “orders of governmental authorities,” includes ordinances, emergency proclamations and orders, rules to protect the public health, welfare and safety, and other actions of the City in its capacity as a municipal authority. After Consultant notification, the Contract Officer shall investigate the facts and the extent of any ne cessary delay and extend the time for performing the Services for the period of the enforced delay when and if, in the Contract Officer’s judgment, such delay is justified.
The Contract Officer’s determination shall be final and conclusive upon the Parties to this Agreement. The Consultant will not receive an adjustment to the contract price or any other compensation. Notwithstanding the foregoing, the City may still terminate this Agreement in accordance with the termination provisions of this Agreement.
4. COORDINATION OF WORK
4.1 Representative of Consultant . The following principal of Consultant is designated as being the principal and representative of Consultant authorized to act in its behalf and make all decisions with respect to the Services to be performed under this Agreement: R.
Clay Paslay, CEO & President. It is expressly understood that the experience, knowledge, education, capability, expertise, and reputation of the foregoing principal is a substantial inducement for City to enter into this Agreement. Therefore, the foregoing principal shall be responsible during the term of this Agreement for directing all activities of Consultant and devoting sufficient time to personally supervise the Services performed hereunder. The foregoing principal may not be changed by Consultant without prior written approval of the Contract Officer.
4.2 Contract Officer . The Contract Officer shall be the City Manager or his/her designee ("Contract Officer"). Consultant shall be responsible for keeping the Contract Officer fully informed of the progress of the performance of the Services . Consultant shall refer any decisions that must be made by City to the Contract Officer. Unless otherwise specified, any approval of City shall mean the approval of the Contract Officer.
4.3 Prohibition Against Subcontracting or Assignments. The experience, knowledge, education, capability, and reputation of Consultant , its principals and employees, were a substantial inducement for City to enter into this Agreement. Consultant shall not contract with any other individual or entity to perform any Services required under this Agreement without the City's express written approval. In addition, neither this Agreement nor any interest may be assigned or transferred, voluntarily or by operation of law, without the prior written approval of City. Subcontracts, if any, shall contain a provisions making them subject to all provisions stipulated in this Agreement including without limitation the insurance and indemnification requirements. If Consultant is permitted to subcontract any part of this Agreement by City, Consultant shall be responsible to City for the acts and omissions of its subConsultant (s) in the same manner as it is for persons directly employed. Nothing contained in this Agreement shall create any contractual relationships between any subConsultant and City. All persons engaged in the Work will be considered employees of Consultant. City will deal directly with and will make all payments to Consultant. In addition, neither this Agreement nor any interest in this Agreement may be transferred, assigned, conveyed, hypothecated , or encumbered voluntarily or by operation of law, whether for the benefit of creditors or otherwise, without the prior written consent of City.In the event of any such unapproved transfer, including any bankruptcy proceeding, this Agreement shall be void. No approved transfer shall release Consultant or any surety of Consultant from any liability under this Agreement without the express written consent of City.
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4.4 Independent Consultant. The legal relationship between the Parties is that of an independent Consultant, and nothing shall be deemed to make Consultant a City employee.
A. During the performance of this Agreement, Consultant and its officers, employees, and agents shall act in an independent capacity and shall not act or represent themselves as City officers or employees. The personnel performing the Services under this Agreement on behalf of Consultant shall at all times be under Consultant’s exclusive direction and control. Neither City nor any of its officers, employees, or agents shall have control over the conduct of Consultant or any of its officers, employees, or agents, except as set forth in this Agreement. Consultant, its officers, employees, or agents shall not maintain an office or any other type of fixed business location at City’s offices. City shall have no voice in the selection, discharge, supervision, or control of Consultant’s employees, servants, representatives, or agents, or in fixing their number, compensation, or hours of service. Consultant shall pay all wages, salaries, and other amounts due its employees in connection with this Agreement and shall be responsible for all reports and obligations respecting them, including but not limited to social security income tax withholding, unemployment compensation, workers’ co mpensation, and other similar matters. City shall not in any way or for any purpose be deemed to be a partner of Consultant in its business or otherwise a joint venturer or a member of any joint enterprise with Consultant.
B. Consultant shall not have any authority to bind City in any manner. This includes the power to incur any debt, obligation, or liability against City.
C. No City benefits shall be available to Consultant, its officers, employees, or agents in connection with any performance under this Agreement. Except for professional fees paid to Consultant as provided for in this Agreement, City shall not pay salaries, wages, or other compensation to Consultant for the performance of Services under this Agreement. City shall not be liable for compensation or indemnification to Consultant, its officers, employees, or agents, for injury or sickness arising out of performing Services. If for any reason any court or governmental agency determines that the City has financial obligations, other than under S ection 2 and Subsection 1.8 in this Agreement , of any nature relating to salary, taxes, or benefits of Consultant’s officers, employees, servants, representatives, subConsultant s, or agents, Consultant shall indemnify City for all such financial obligations.
4.5 California Labor Code Requirements.
A. Consultant is aware of the requirements of California Labor Code Sections 1720 et seq. and 1770 et seq., which require the payment of prevailing wage rates and the performance of other requirements on certain “public works” and “maintenance” projects (“Prevailing Wage Laws”). If the Services are being performed as part of an applicable “public works” or “maintenance” project, as defined by the Prevailing Wage Laws, and if the total compensation is $15,000 or more for maintenance or $25,000 or more for construction, alteration, demolition, installation, or repair, Consultant agrees to fully comply with such Prevailing Wage Laws. Consultant shall defend, indemnify and hold the City, its officials, officers, employees and agents free and harmless from any claims, liabilities, costs, penalties or interest arising out of any failure or alleged failure to comply with the Prevailing Wage Laws. It shall be mandatory upon the Consultant and all subcontractors to comply with all California Labor Code provisions, which include but are not limited to prevailing wages (Labor Code Sections 1771, 1774 and 1775), employment of apprentices (Labor Code Section 1777.5), certified payroll records (Labor Code Sections 1771.4 and 1776), hours of labor (Labor Code Sections 1813 and 1815) and debarment of contractors and subcontractors (Labor Code Section 1777.1). 1P - Page 11
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B. If the Services are being performed as part of an applicable “public works” or “maintenance” project and if the total compensation is $15,000 or more for maintenance or $25,000 or more for construction, alteration, demolition, installation, or repair, then pursuant to Labor Code Sections 1725.5 and 1771.1, the Consultant and all subcontractors performing such Services must be registered with the Department of Industrial Relations. Consultant shall maintain registration for the duration of the Project and require the same of any subcontractors, as applicable. This Agreement may also be subject to compliance monitoring and enforcement by the Department of Industrial Relations. It shall be Consultant ’s sole responsibility to comply with all applicable registration and labor compliance requirements.
5. INSURANCE
5.1 Types of Insurance. Consultant shall procure and maintain, at its sole cost and expense, the insurance described herein. The insurance shall be for the duration of this Agreement and includes any extensions , unless otherwise specified in this Agreement . The insurance shall be procured in a form and content satisfactory to City. The insurance shall apply against claims which may arise from the Consultant's performance of Work under this Agreement, including Consultant's agents, representatives, or employees. In the event the City Manager determines that the Work or Services to be performed under this Agreement creates an increased or decreased risk of loss to the City, the Consultant agrees that the minimum limits of the insurance policies may be changed accordingly upon receipt of written notice from the City Manager or his designee. Consultant shall immediately substitute any insurer whose A.M. Best rating drops below the levels specified in this Agreement. Except as otherwise authorized below for professional liability (errors and omissions) insurance, all insurance provided under this Agreement shall be on an occurrence basis. The minimum amount of insurance required shall be as follows:
A. Errors and Omissions Insurance. Consultant shall obtain and maintain in full force and effect throughout the term of this Agreement, standard industry form professional liability (errors and omissions) insurance coverage in an amount of not less than one million dollars ($1,000,000.00) per occurrence and two-million dollars ($2,000,000.00) annual aggregate, in accordance with the provisions of this section.
(1 ) Consultant shall either: (a) certify in writing to the City that Consultant is unaware of any professional liability claims made against Consultant and is unaware o f any facts which may lead to such a claim against Consultant; or (b) if Consultant does not provide the certification under (a ), Consultant shall procure from the professional liability insurer an endorsement providing that the required limits of the policy shall apply separately to claims arising from errors and omissions in the rendition of services under this Agreement.
(2 ) If the policy of insurance is written on a “claims made” basis, the policy shall be continued in full force and effect at all times during the term of this Agreement, and for a period of three (3) years from the date of the completion of the Services provided hereunder. In the event of termination of the policy during this period, Consultant shall obtain continuing insurance coverage for the prior acts or omissions of Consultant during the course of performing Services under the terms of this Agreement. The coverage shall be evidenced by either a new policy evidencing no gap in coverage, or by obtaining separate extended “tail” coverage with the present or new carrier or other insurance arrangements providing for complete coverage, either of which shall be subject to the written approval by the City Manager.
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the policy shall be continued in full force and effect during the term of this Agreement, or until completion of the Services provided for in this Agreement, whichever is later. In the event of termination of the policy during this period, new coverage shall immediately be obtained to ensure coverage during the entire course of performing the Services under the terms of this Agreement.
B. Workers’ Compensation Insurance. Consultant shall obtain and maintain, in full force and effect throughout the term of this Agreement, workers’ compensation insurance in at least the minimum statutory amounts, and in compliance with all other statutory requirements, as required by the State of California. Consultant agrees to waive and obtain endorsements from its workers’ compensation insurer waiving subrogation rights under its workers’ compensation insurance policy against the City and to require each of its subConsultants, if any, to do likewise under their workers’ compensation insurance policies. If Consultant has no employees, Consultant shall complete the City’s Request for Waiver of Workers’ Compensation Insurance Requirement form.
C. Commercial General Liability Insurance . Consultant shall obtain and maintain, in full force and effect throughout the term of this Agreement, a policy of commercial general liability insurance written on a per occurrence basis with a combined single limit of at least one million dollars ($1,000,000.00) and two million dollars ($2,000,000.00) general aggregate for bodily injury and property damage including coverages for contractual liability, personal injury, independent Consultants, broad form property damage, products and completed operations.
D. Business Automobile Insurance. Consultant shall obtain and maintain, in full force and effect throughout the term of this Agreement, a policy of business automobile liability insurance written on a per occurrence basis with a single limit liability in the amount of one million dollars ($1,000,000.00) bodily injury and property damage. The policy shall include coverage for owned, non-owned, leased, and hired cars.
E. Employer Liability Insurance. Consultant shall obtain and maintain, in full force and effect throughout the term of this Agreement, a policy of employer liability insurance written on a per occurrence basis with a policy limit of at least one million dollars ($1,000,000.00) for bodily injury or disease.
5.2 Deductibles and Self -Insured Retentions . Any deductibles or self -insured retentions must be declared to and approved by the City Manager or his/her designee prior to commencing any work or services under this Agreement. Consultant guarantees payment of all deductibles and self -insured retentions . City reserves the right to reject deductibles or self- insured retentions in excess of $10,000, and the City Manager or his/her designee may require evidence of pending claims and claims history as well as evidence of Consultant’s ability to pay claims for all deductible amounts and self-insured retentions proposed in excess of $10,000.
5.3 Other Insurance Requirements. The following provisions shall apply to the insurance policies required of Consultant under this Agreement:
A. For any claims related to this Agreement, Consultant’s coverage shall be primary insurance with respect to the City and its officers, council members, officials, employees, agents, and volunteers. Any insurance or self -insurance maintained by the City and its officers, council members, officials, employees, agents, and volunteers shall be in excess of Consultant’s insurance and shall not contribute with it.
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including breaches of warranties, shall not affect coverage provided to City and its officers, council members, officials, employees, agents, and volunteers.
C. All insurance coverage and limits provided by Consultant and available or applicable to this Agreement are intended to apply to each insured, including additional insureds, against whom a claim is made or suit is brought to the full extent of the policies. Nothing contained in this Agreement or any other agreement relating to the City or its operations shall limit the application of such insurance coverage.
D. No required insurance coverages may include any limiting endorsement which substantially impairs the coverages set forth in this Agreement (e.g., elimination of contractual liability or reduction of discovery period), unless the endorsement has first been submitted to the City Manager and approved in writing.
E. Consultant agrees to require its insurer to modify insurance endorsements to delete any exculpatory wording stating that failure of the insurer to mail written notice of cancellation imposes no obligation, or that any party will "endeavor" (as opposed to being required) to comply with the requirements of the endorsements. Certificates of insurance will not be accepted in lieu o f required endorsements, and submittal of certificates without required endorsements may delay commencement of the Project. It is Consultant’s obligation to ensure timely compliance with all insurance submittal requirements as provided in this Agreement.
F. Consultant agrees to ensure that subConsultant s, and any other parties involved with the Project who are brought onto or involved in the P roject by Consultant, provide the same minimum insurance coverage required of Consultant. Consultant agrees to monitor and review all such coverage and assumes all responsibility for ensuring that such coverage is provided in conformity with the requirements of this section. Consultant agrees that upon request, all agreements with sub Consultants and others engaged in the Project will be submitted to the City for review.
G. Consultant acknowledges and agrees that any actual or alleged failure on the part of the City to inform Consultant of non-compliance with any insurance requirement in no way imposes any additional obligations on the City nor does it waive any rights in this or any other regard.
H. Consultant shall provide proof that policies of insurance required in this Agreement, expiring during the term of this Agreement, have been renewed or replaced with other policies providing at least the same coverage. Proof that such coverage has been ordered shall be submitted prior to expiration. Endorsements as required in this Agreement applicable to the renewing or new coverage shall be provided to City no later than ten (10) days prior to expiration of the lapsing coverage.
I. Requirements of specific insurance coverage features or limits contained in this section are not intended as limitations on coverage, limits, or other requirements, or as a waiver of any coverage normally provided by any given policy. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue, and is not intended by any party or insured to be limiting or all-inclusive.
J. The requirements in this section supersede all other sections and provisions of this Agreement to the extent that any other section or provision conflicts with or impair the provisions of this section.
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K. Consultant agrees to provide immediate notice to City of any claim or loss against Consultant arising out of the Work performed under this Agreement and for any other claim or loss which may reduce the insurance available to pay claims arising out of this Agreement. City assumes no obligation or liability by such notice, but has the right (but not the duty) to monitor the handling of any such claim or claims if they are likely to involve City , or to reduce or dilute insurance available for payment of potential claims.
L. Consultant agrees that the provisions of this section shall not be construed as limiting in any way the extent to which the Consultant may be held responsible for the payment of damages resulting from the Consultant’s activities or the activities of any person or person for which the Consultant is otherwise responsible.
5.4 Sufficiency of Insurers. Insurance required in this Agreement shall be provided by authorized insurers in good standing with the State of California. Coverage shall be provided by insurers admitted in the State of California with an A.M. Best’s Key Rating of B++, Class VII, or better, unless such requirements are waived in writing by the City Manager or his designee due to unique circumstances.
5.5 Verification of Coverage. Consultant shall furnish City with both certificates of insurance and endorsements, including additional insured endorsements, affecting all of the coverages required by this Agreement. The certificates and endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. All proof of insurance is to be received and approved by the City before work comm ences. City reserves the right to require Consultant’s insurers to provide complete, certified copies of all required insurance policies at any time. Additional insured endorsements are not required for Errors and Omissions and Workers’ Compensation policies.
Verification of Insurance coverage may be provided by: (1) an approved General and/or Auto Liability Endorsement Form for the City of Palm Springs or (2) an acceptable Certificate of Liability Insurance Coverage with an approved Additional Insured Endorsement with the following endorsements stated on the certificate:
A. "The City of Palm Springs, its officials, employees, and agents are named as an additional insured…” ("as respects City of Palm Springs Contract No.___" or "for any and all work performed with the City" may be included in this statement).
B. " This insurance is primary and non -contributory over any insurance or self - insurance the City may have..." ("as respects City of Palm Springs Contract No.___ " or "for any and all work performed with the City" may be included in this statement).
C. " Should any of the above described policies be canceled before the expiration date thereof, the issuing company will mail 30 days written notice to the Certificate Holder named. " Language such as, “endeavor to” mail and "but failure to mail such notice shall impose no obligation or liability of any kind upon the company, its agents or representative" is not acceptable and must be crossed out.
D. Both the Workers’ Compensation and Employers' Liability policies shall contain the insurer's waiver of subrogation in favor of City, its elected officials, officers, employees, agents, and volunteers.
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In addition to the endorsements listed above, the City of Palm Springs shall be named the certificate holder on the policies. All certificates of insurance and endorsements are to be received and approved by the City before work commences. All certificates of insurance must be authorized by a person with authority to bind coverage, whether that is the authorized agent/broker or insurance underwriter. Failure to obtain the required documents prior to the commencement of work shall not waive the Consultant’s obligation to provide them.
6. INDEMNIFICATION
6.1 Indemnification and Reimbursement. To the fullest extent permitted by law, Consultant shall defend (at Consultant’s sole cost and expense), indemnify, protect, and hold harmless City, its elected officials, officers, employees, agents, and volunteers (collectively the “Indemnified Parties”), from and against any and all liabilities, actions, suits, claims, demands, losses, costs, judgments, arbitration awards, settlements, damages, demands, orders, penalties, and expenses including legal costs and attorney fees (collectively “Claims”), including but not limited to, Claims arising from injuries to or death of persons (Consultant’s employees included), for damage to property, including property owned by City, for any violation of any federal, state, or local law or ordinance or in any manner arising out of, pertaining to, or incident to any acts, errors or omissions, or willful misconduct committed by Consultant , its officers, employees, representatives, and agents, that arise out of or relate to Consultant’s performance of Services or this Agreement. This indemnification clause excludes Claims arising from the sole negligence or willful misconduct of the Indemnified Parties. Under no circumstances shall the insurance requirements and limits set forth in this Agreement be construed to limit Consultant’s indemnification obligation or other liability under this Agreement. Consultant ’s indemnification obligation shall survive the expiration or earlier termination of this Agreement until all actions against the Indemnified Parties for such matters indemnified are fully and finally barred by the applicable statute of limitations or, if an action is timely filed, until such action is final.
6.2 Design Professional Services Indemnification and Reimbursement. If Consultant’s obligation to defend, indemnify, and/or hold harmless arises out of Consultant ’s performance as a “design professional” (as that term is defined under Civil Code section 2782.8), then, and only to the extent required by Civil Code section 2782.8, which is fully incorporated herein, Consultant’s indemnification obligation shall be limited to the extent which the Claims arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant in the performance of the Services or this Agreement, and, upon Consultant obtaining a final adjudication by a court of competent jurisdiction, Consultant’s liability for such claim, including the cost to defend, shall not exceed the Consultant’s proportionate percentage of fault.
7. REPORTS AND RECORDS
7.1 Accounting Records. Consultant shall keep complete, accurate, and detailed accounts of all time, costs, expenses, and expenditures pertaining in any way to this Agreement.
Consultant shall keep such books and records as shall be necessary to properly perform the Services required by this Agreement and to enable the Contract Officer to evaluate the performance of such Services. The Contract Officer shall have full and free access to such books and records at all reasonable times, including the right to inspect, copy, audit, and make records and transcripts from such records.
7.2 Reports. Consultant shall periodically prepare and submit to the Contract Officer such reports concerning the performance of the S ervices required by this Agreement , or as the Contract Officer shall require. Consultant acknowledges that the City is greatly concerned about 1P - Page 16
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the cost of the Work to be performed under this Agreement. For this reason, Consultant agrees that Consultant shall promptly notify the Contract Officer the estimated increased or decreased cost if Consultant becomes aware of any facts, circumstances, techniques, or events that may or will materially increase or decrease the cost of the Services. If Consultant is providing design services, Consultant shall promptly notify the Contract Officer the estimated increased or decreased cost for the project being designed if Consultant becomes aware of any facts, circumstances, techniques, or events that may or will materially increase or decrease the cost of the design services.
7.3 Ownership of Documents. All drawings, specifications, reports, records, documents, memoranda, correspondence, computations , and other materials prepared by Consultant, its employees, subConsultant s, and agents in the performance of this Agreement shall be the property of City and shall be promptly delivered to City upon request of the Contract Officer or upon the termination of this Agreement . Consultant shall have no claim for further employment or additional compensation as a result of the exercis e by City of its full rights of ownership of the documents and materials. Any use of such completed documents for other projects and/or use of incomplete documents without specific written authorization by the Consultant will be at the City's sole risk and without liability to Consultant, and the City shall indemnify the Consultant for all resulting damages. Consultant may retain copies of such documents for their own use. Consultant shall have an unrestricted right to use the concepts embodied tin this Agreement. Consultant shall ensure that all its subConsultants shall provide for assignment to City of any documents or materials prepared by them. In the event Consultant fails to secure such assignment, Consultant shall indemnify City for all resulting damages.
7.4 Release of Documents. All drawings, specifications, reports, records, documents, and other materials prepared by Consultant in the performance of Services under this Agreement shall not be released publicly without the prior written approval of the Contract Officer.
All information gained by Consultant in the performance of this Agreement shall be considered confidential and shall not be released by Consultant without City’s prior written authorization.
7.5 Audit and Inspection of Records. After receipt of reasonable notice and during the regular business hours of City, Consultant shall provide City, or other agents of City, such access to Consultant’s books, records, payroll documents, and facilities as City deems necessary to examine, copy, audit , and inspect all accounting books, records, work data, documents , and activities directly related to Consultant’s performance under this Agreement . Consultant shall maintain such books, records, data , and documents in accordance with generally acc epted accounting principles and shall clearly identify and make such items readily accessible to such parties during the term of this Agreement and for a period of three (3) years from the date of final payment by City hereunder.
8. ENFORCEMENT OF AGREEMENT
8.1 California Law and Venue. This Agreement shall be construed and interpreted both as to validity and as to performance of the Parties in accordance with the laws of the State of California. Legal actions concerning any dispute, claim, or matter arising out of or in relation to this Agreement shall be instituted in the Superior Court of the County of Riverside , State of California, or any other appropriate court in such County, and Consultant covenants and agrees to submit to the personal jurisdiction of such court in the event of such action.
8.2 Interpretation. This Agreement shall be construed as a whole according to its fair language and common meaning to achieve the objectives and purposes of the Parties. The terms 1P - Page 17
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of this Agreement are contractual and the result of negotiation between the Parties. Accordingly, any rule of construction of contracts (including, without limitation, California Civil Code Section 1654) that ambiguities are to be construed against the drafting party, shall not be employed in the interpretation of this Agreement. The caption headings of the various sections and paragraphs of this Agreement are for convenience and identification purposes only and shall not be deemed to limit, expand, or define the contents of the respective sections or paragraphs.
8.3 Default of Consultant. Consultant’s failure to comply with any provision of this Agreement shall constitute a default.
A. If the City Manager, or his designee, determines that Consultant is in default in the performance of any of the terms or conditions of this Agreement, he/she shall notify Consultant in writing of such default. Consultant shall have ten (10) days, or such longer period as City may d esignate, to cure the default by rendering satisfactory performance. In the event Consultant fails to cure its default within such period of time, City shall have the right, notwithstanding any other provision of this Agreement, to terminate this Agreement without further notice and without prejudice of any remedy to which City may be entitled at law, in equity, or under this Agreement. Consultant shall be liable for all reasonable costs incurred by City as a result of such default. Compliance with the provisions of this section shall not constitute a waiver of any City right to take legal action in the event that the dispute is not cured, provided that nothing shall limit City’s right to terminate this Agreement without cause under Section 3.2.
B. If termination is due to the failure of the Consultant to fulfill its obligations under this Agreement, City may, after compliance with the provisions of Section 8.3(A), take over the work and prosecute the same to completion by contract or otherwise. T he Consultant shall be liable to the extent that the total cost for completion of the Services required hereunder exceeds the Maximum Contract Amount (provided that the City shall use reasonable efforts to mitigate such damages). The City may withhold any payments to the Consultant for the purpose of set-off or partial payment of the amounts owed the City as previously stated. The withholding or failure to withhold payments to Consultant shall not limit Consultant’s liability for completion of the Services as provided in this Agreement.
8.4 Waiver. No waiver of any provision of this Agreement shall be effective unless in writing and signed by a duly authorized representative of the Party against whom enforcement of a waiver is sought. Any waiver by the Parties of any default or breach of any covenant, condition, or term contained in this Agreement, shall not be construed to be a waiver of any subsequent or other default or breach, nor shall failure by the Parties to require exact, full, and complete compliance with any of the covenants, conditions, or terms contained in this Agreement be construed as changing the terms of this Agreement in any manner or preventing the Parties from enforcing the full provisions.
8.5 Rights and Remedies Cumulative. Except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the Parties are cumulative and the exercise by either Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other Party.
8.6 Legal Action. In addition to any other rights or remedies, either Party may take legal action, in law or in equity, to cure, correct, remedy or recover damages for any default, to compel specific performance of this Agreement, to obtain declaratory or injunctive relief, or to obtain any other remedy consistent with the purposes of this Agreement. 1P - Page 18
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8.7 Attorney Fees. In the event any dispute between the Parties with respect to this Agreement results in litigation or any non-judicial proceeding, the prevailing Party shall be entitled, in addition to such other relief as may be granted, to recover from the non- prevailing Party all reasonable costs and expenses. These include but are not limited to reasonable attorney fees, expert consultant fees, court costs and all fees, costs, and expenses incurred in any appeal or in collection of any judgment entered in such proceeding. To the extent authorized by law, in the event of a dismissal by the plaintiff or petitioner of the litigation or non- judicial proceeding within thirty (30) days of the date set for trial or hearing, the other Party shall be deemed to be the prevailing Party in such litigation or proceeding.
9. CITY OFFICERS AND EMPLOYEES: NON-DISCRIMINATION
9.1 Non-liability of City Officers and Employees. No officer or employee of the City shall be personally liable to the Consultant, or any successor-in-interest, in the event of any default or breach by the City or for any amount which may become due to the Consultant or to its successor, or for breach of any obligation of the terms of this Agreement.
9.2 Conflict of Interest. Consultant acknowledges that no officer or employee of the City has or shall have any direct or indirect financial interest in this Agreement nor shall Consultant enter into any agreement of any kind with any such officer or employee during the term of this Agreement and for one (1) year thereafter. Consultant warrants that Consultant has not paid or given, and will not pay or give, any third party any money or other consideration in exchange for obtaining this Agreement.
9.3 Covenant Against Discrimination. In connection with its performance under this Agreement, Consultant shall not discriminate against any employee or applicant for employment because of actual or perceived race, religion, color, sex, age, marital status, ancestry, national origin ( i.e., place of origin, immigration status, cultural or linguistic characteristics, or ethnicity), sexual orientation, gender identity, gender expression, physical or mental disability, or medical condition (each a “prohibited basis”). Consultant shall ensure that applicants are employed, and that employees are treated during their employment, without regard to any prohibited basis. As a condition precedent to City’s lawful capacity to enter this Agreement, and in executing this Agreement, Consultant certifies that its actions and omissions hereunder shall not incorporate any discrimination arising from or related to any prohibited basis in any Consultant activity, including but not limited to the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or ot her forms of compensation; and selection for training, including apprenticeship; and further, that Consultant is in full compliance with the provisions of Palm Springs Municipal Code Section 7.09.040, including without limitation the provision of benefits, relating to non-discrimination in city contracting.
10. MISCELLANEOUS PROVISIONS
10.1 Patent and Copyright Infringement. To the fullest extent permissible under law, and in lieu of any other warranty by City or Consultant against patent or copyright infringement, statutory or otherwise:
A. I t is agreed that Consultant shall defend at its expense any claim or suit against City on account of any allegation that any item furnished under this Agreement, or the normal use or sale arising out of the performance of this Agreement, infringes upon any presently existing U.S. letters patent or copyright and Consultant shall pay all costs and damages finally 1P - Page 19
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awarded in any such suit or claim, provided that Consultant is promptly notified in writing of the suit or claim and given authority, information and assistance at Consultant’s expense for the defense of same, and provided such suit or claim arises out of, pertains to, or is related to the negligence, recklessness or willful misconduct of Consultant. However, Consultant will not indemnify City if the suit or claim results from: (1) City's alteration of a deliverable, such that City’s alteration of such deliverable created the infringement upon any presently existing U.S. letters patent or copyright; or (2) the use of a deliverable in combination with other material not provided by Consultant when it is such use in combination which infringes upon an existing U.S. letters patent or copyright.
B. Consultant shall have sole control of the defense of any such claim or suit and all negotiations for settlement in the event City fails to cooperate in the defense of any suit or claim, provided, however, that such defense shall be at Consultant’s expense. Consultant shall not be obligated to indemnify City under any settlement that is made without Consultant’s consent, which shall not be unreasonably withheld. If the use or sale of such item is enjoined as a result of the suit or claim, Consultant, at no expense to City, shall obtain for City the right to use and sell the item, or shall substitute an equivalent item acceptable to City and extend this patent and copyright indemnity thereto.
10.2 Notice. Any notice, demand, request, consent, approval, or communication that either party desires, or is required to give to the other party or any other person shall be in writing.
All notices shall be personally delivered, sent by pre- paid First Class U.S. Mail, registered or certified mail, postage prepaid, return receipt requested, or delivered or sent by facsimile with attached evidence of completed transmission. All notices shall be deemed received upon the earlier of (i) the date of delivery to the address of the person to receive such notice if delivered personally or by messenger or overnight courier; (ii) five (5) business days after the date of posting by the United States Post Office if by mail; or (iii) when sent if given by facsimile. Any notice, request, demand, direction, or other communication sent by facsimile must be confirmed within forty-eight (48) hours by letter mailed or delivered. Other forms of electronic transmission such as e-mails, text messages, and instant messages are not acceptable manners of notice required hereunder. Notices or other communications shall be addressed as follows:
To City: City of Palm Springs
Attention: City Manager & City Clerk
3200 E. Tahquitz Canyon Way
Palm springs, California 92262
Telephone: (760) 323-8204
Facsimile: (760) 323-8332
To Consultant: Paslay Management Group, LLC
Attention: R. Clay Paslay
209 W. 2nd St., Suite 309
Fort Worth, TX 76102
10.3 Integrated Agreement. This Agreement constitutes the entire understanding between the Parties and supersedes and cancels all prior negotiations, arrangements, agreements, representations, and understandings, if any, made by or among the Parties with respect to the subject matter in this Agreement.
10.4 Amendment. No amendments or other modifications of this Agreement shall be binding unless through written agreement signed by all Parties. 1P - Page 20
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10.5 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. If any provision of this Agreement shall be determined to be invalid by a final judgment or decree of a court of competent jurisdiction, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the reminder of that provision, or the remaining provisions of this Agreement unless the invalid provision is so material that its invalidity deprives either Party of the basic benefit of their bargain or renders this Agreement meaningless.
10.5 Successors in Interest. This Agreement shall be binding upon and inure to the benefit of the Parties’ successors and assignees.
10.6 Third Party Beneficiary. Except as may be expressly provided for in this Agreement, nothing contained in this Agreement is intended to confer, nor shall this Agreement be construed as conferring, any rights, including, without limitation, any rights as a third- party beneficiary or otherwise, upon any entity or person not a party to this Agreement.
10.7 Recitals. The above- referenced Recitals are hereby incorporated into the Agreement as though fully set forth in this Agreement and each Party acknowledges and agrees that such Party is bound, for purposes of this Agreement, by the same.
10.8. Corporate Authority. Each of the undersigned represents and warrants that (i ) the Party for which he or she is executing this Agreement is duly authorized and existing, (ii) he or she is duly authorized to execute and deliver this Agreement on behalf of the P arty for which he or she is signing, (iii) by so executing this Agreement, the Party for which he or she is signing is formally bound to the provisions of this Agreement, and (iv) the entering into this Agreement does not violate any provision of any o ther Agreement to which the Party for which he or she is signing is bound.
10.9 Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original.
10.10 Compliance with Economic Sanctions in Response to Russia's Actions in Ukraine. When funding for the services is provided, in whole or in part, by an agency controlled of the State of California, Consultant shall fully and adequately comply with California Executive Order N-6-22 (“Russian Sanctions Program”). As part of this compliance process, Consultant shall also certify compliance with the Russian Sanctions Program by completing the form located in Exhibit “C” (Russian Sanctions Certification), attached hereto and incorporated herein by reference. Consultant shall also require any subconsultants to comply with the Russian Sanctions Program and certify compliance pursuant to this Section.
10.11 Federal Provisions. Since funding for the Services is provided, in whole or in part, by the Federal Aviation Administration, Consultant shall also fully and adequately comply with the provisions included in Exhibit “D” attached hereto and incorporated herein by reference (“Federal Provisions”). With respect to any conflict between such Federal Provisions and the terms of this Agreement and/or the provisions of state law, the more stringent requirement shall control.
[SIGNATURES ON NEXT PAGE]
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SIGNATURE PAGE TO PROFESSIONAL SERVICES AGREEMENT BY AND BETWEEN THE
CITY OF PALM SPRINGS AND PASLAY MANAGEMENT GROUP, LLC
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the dates stated below.
CONSULTANT:
By: ______________________________ By: _______________________________ Signature Signature
Date: __ Date:
CITY OF PALM SPRINGS:
APPROVED BY CITY COUNCIL:
Date: _______ Item No.
APPROVED AS TO FORM: ATTEST:
By: ___________________________ By: _______________________________ City Attorney City Clerk
APPROVED:
By: _______________________________ Date:
City Manager – over $150,000
Deputy/Assistant City Manager – up to $50,000
Director – up to $25,000
Manager – up to $5,000
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EXHIBIT “A”
SCOPE OF SERVICES
A. Deliverables and Anticipated Work
1. Program Strategy and Management Services
a. Provide high-level management and coordination for the PSP capital improvement program, ensuring alignment with PSPs Master Plan and Strategic vision. b. Assist with briefing municipal and state elected bodies and providing program updates.
c. Imbed as needed/requested with PSP Executive Staff and provide expert guidance on airport expansion, modernization and infrastructure planning. d. Support PSP in change management and provide partnering as required for each of the major program elements.
e. Support PSP’s development goals and initiatives through the provision of technical advisory services, engagement with internal and external stakeholders, and other as-needed services related to PSP’s capital improvement programs. f. Assess opportunities for revenue development and assist in identifying strategies for project funding.
2. Organizational Advisory Services
a. Assist with conducting organizational structure assessments as the airport evolves including airport benchmarking, providing recommendations for optimized staffing levels and processes, and compensation and pay analysis. b. Assist PSP in defining the CIP program team, structure, project delivery strategy and project delivery executive plan for the program.
c. Assess PSP’s situation including capabilities, constraints, and priorities to understand the situation and advise on implementing plans. d. Provide advice to PSP Executive team concerning revenue generating strategies and opportunities.
3. Program Oversight and Reporting
a. Evaluate, develop and implement operational controls for managing large capital projects, as needed.
b. Provide program oversight and reporting that may include development and implementation of operational controls for managing capital projects, development and management of capital project performance metrics as it relates to costs, schedule, scope, document control, contract administration and project status. c. Develop and assist in the tracking and management of project performance. d. Assist in the development and maintenance of a master schedule to show all program activities, sequencing, durations, dependencies/relationships, key milestones, and conflicts and provide input on corrective action plans as necessary. 1P - Page 23
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e. Monitor program/project performance and identify areas of concern, scheduling, activity delays, conflicts and provide input on corrective action plans as necessary. f. Generate reports as near real-time as possible to allow for planning and execution of corrective actions in a timely manner.
g. Provide assistance with planning and design, review of plans and project progress, preconstruction services facilitation, funding programming recommendations, purchasing and integration, and procurement support.
h. Assist in the development of processes and procedures to implement a successful Operational Readiness, Activation, and Transfer (ORAT) program.
4. Stakeholder Coordination
a. Act as a liaison between PSP leadership, consultants, airlines, regulatory agencies, and other stakeholders.
b. Facilitate meetings, workshops, and progress reports and provide presentations to keep all parties informed and apprised of the best available information.
5. Contract and Funding Compliance:
a. Conduct process compliance review and agreement administration services related to review of invoices, administration of change orders, agreement modifications, and project documentation.
b. Provide quality assurance assistance in the administration of construction agreements.
c. Provide audits of construction agreements for financial elements such as allowable costs, verification of overhead, profit markups on change orders, and supporting documentation for claimed costs.
d. Assist in determining funding eligibility and implement a system for tracking, validating, and partitioning eligible project expenses based on funding source. e. Ensure contract compliance with FAA, TSA, and other relevant regulatory agencies. f. Conduct risk assessments, develop mitigation strategies and provide guidance on issues related to safety management systems, security and emergency preparedness measures in project execution.
B. Specifications
1. The Contractor shall provide a variety of support services for the Executive Team at PSP in the area of Program Management and Advisory Services.
2. Assignments will be developed individually task order based, by PSP in conjunction with the selected Consulting Team, when and if consulting services are required.
Schedule:
Work will commence on the issuance of a Notice to Proceed, and work shall be completed by the end of the contract term period.
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Compensation:
Work will be compensated on an hourly rate schedule for the annual projected level of effort assumed for all staff on this project and will be an on-call, task-based Master Contract. Contract pricing includes all labor, expenses, and incidentals to complete the work outlined in the contract scope. The Contractor will be required to bill on a Time-and-Materials basis. No additional compensation will be due by the City unless the contract is modified for additional work requested by the City.
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EXHIBIT “B”
SCHEDULE OF COMPENSATION
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ITEM DESCRIPTION Unit of
Measure Estimated Hours Rate TOTAL
1 Program Management & Advisory
Consulting Services – Annual
Projected Level of Effort Year 1
Hourly
Consultants (Include position titles Hourly
Rick Lee, Project Manager Hourly 1,900 $ 400 $ 760,000 Kris Vogt, Engagment Executive Hourly 400 $ 425 $ 170,000 Jim Bennett - startup Hourly 125 $ 400 $ 50,000 Ted Kitchens - startup, design mgmnt Hourly 325 $ 400 $ 130,000 Scott Vriesman (Chrysalis) Hourly 200 $ 240 $ 48,000 Dylan Hirsch (CM Solutions) Hourly 950 $ 210 $ 199,500 Jamal Albarghouti (CM Solutions) Hourly 200 $ 180 $ 36,000 Miriam L'Engle (Jacobsen/Daniels) Hourly 100 $ 350 $ 35,000 Reimbursable Expenses Direct Cost 55,820$
2 Program Management & Advisory
Consulting Services – Annual
Projected Level of Effort Year 2
Hourly
Consultants (Include position titles
Rick Lee, Project Manager Hourly 1,900 $ 416.00 $ 790,400 Ted Kitchens - design mgmnt Hourly 200 $ 400.00 $ 80,000 Kris Vogt, Engagment Executive Hourly 400 $ 442.00 $ 176,800 Scott Vriesman (Chrysalis) Hourly 200 $ 249.60 $ 49,920 Dylan Hirsch (CM Solutions) Hourly 950 $ 218.40 $ 207,480 Jamal Albarghouti (CM Solutions) Hourly 200 $ 187.00 $ 37,400 Miriam L'Engle (Jacobsen/Daniels) Hourly 100 $ 364.00 $ 36,400 Reimbursable Expenses Direct Cost $ 43,814 3 Program Management & Advisory
Consulting Services – Annual
Projected Level of Effort Year 3
Hourly
Consultants (Include position titles
Rick Lee, Project Manager Hourly 1,900 $ 432.64 $ 822,016 Ted Kitchens - design mgmnt Hourly 200 $ 400.00 $ 80,000 Kris Vogt, Engagment Executive Hourly 200 $ 459.68 $ 91,936 Scott Vriesman (Chrysalis) Hourly 200 $ 259.58 $ 51,917 Dylan Hirsch (CM Solutions) Hourly 950 $ 227.14 $ 215,779 Jamal Albarghouti (CM Solutions) Hourly 400 $ 195.00 $ 78,000 Miriam L'Engle (Jacobsen/Daniels) Hourly 100 $ 379.00 $ 37,900 Reimbursable Expenses Direct Cost $ 43,282 4 Program Management & Advisory
Consulting Services – Annual
Projected Level of Effort Year 4
Hourly
Consultants (Include position titles
Rick Lee, Project Manager Hourly 1,900 $ 449.95 $ 854,897 Kris Vogt, Engagment Executive Hourly 200 $ 478.07 $ 95,613 Scott Vriesman (Chrysalis) Hourly 200 $ 269.97 $ 53,993 Dylan Hirsch (CM Solutions) Hourly 950 $ 236.22 $ 224,410 Jamal Albarghouti (CM Solutions) Hourly 400 $ 202.80 $ 81,120 Miriam L'Engle (Jacobsen/Daniels) Hourly 100 $ 394.00 $ 39,400 Reimbursable Expenses Direct Cost $ 41,349 5 Program Management & Advisory
Consulting Services – Annual
Projected Level of Effort Year 5
Hourly
Consultants (Include position titles
Rick Lee, Project Manager Hourly 1,900 $ 467.94 $ 889,093 Kris Vogt, Engagment Executive Hourly 175 $ 497.19 $ 87,008 Scott Vriesman (Chrysalis) Hourly 200 $ 280.77 $ 56,153 Dylan Hirsch (CM Solutions) Hourly 950 $ 245.67 $ 233,387 Jamal Albarghouti (CM Solutions) Hourly 400 $ 210.91 $ 84,365 Miriam L'Engle (Jacobsen/Daniels) Hourly 100 $ 409.00 $ 40,900 Reimbursable Expenses Direct Cost $ 42,946 Total $ 7,151,999
Title: Date:
ATTACHMENT “H” COST PROPOSAL
REQUEST FOR PROPOSAL (RFP 07-25)
AIRPORT PROGRAM MANAGEMENT & ADVISORY CONSULTING SERVICES
THIS FORM MUST BE COMPLETED AND SUBMITTED IN SEPARATE ELECTRONIC FILE #2 “Cost Proposal”, NOT with Electronic File #1, Technical/Work Proposal*) Firm Name:
Signature of Authorized Person:
Printed Name:
Paslay Management Group, L.P.
09/11/2025
R. Clay Paslay
CEO & President
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EXHIBIT “C”
EXECUTIVE ORDER N-6-22 CERTIFICATION
Executive Order N -6-22 issued by Governor Gavin Newsom on March 4, 2022, directs all agencies and departments that are subject to the Governor’s authority to (a) terminate any contracts with any individuals or entities that are determined to be a target of economic sanctions against Russia and Russian entities and individuals; and (b) refrain from entering into any new contracts with such individuals or entities while the aforementioned sanctions are in effect.
Executive Order N-6-22 also requires that any contractor that: (1) currently has a contract with the City of Palm Springs funded through grant funds provided by the State of California; and/or (2) submits a bid or proposal or otherwise proposes to or enter into or renew a contract with the City of Palm Springs with State of California grant funds, certify that the person is not the target of any economic sanctions against Russia and Russian entities and individuals.
The contractor hereby certifies, SUBJECT TO PENALTY FOR PERJURY, that a) the contractor is not a target of any economic sanctions against Russian and Russian entities and individuals as discussed in Executive Order N -6-22 and b) the person signing below is duly authorized to legally bind the Contractor. This certification is made under the laws of the State of California.
Signature:
Printed Name:
Title:
Firm Name:
Date:
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EXHIBIT “D”
FEDERAL AVIATION ADMINISTRATION
FEDERAL PROVISIONS
Provision
Reference Provision Description
Page
No.
FAA - 01 Access to Records and Reports 2
FAA - 02 Affirmative Action Requirement * 3
FAA – 03 Breach of Contract Terms 5
FAA – 04 Buy American Preference * 6
FAA – 05 Civil Rights General 7
FAA – 06 Civil Rights – Title VI Assurances * 8
FAA – 07 Clean Air and Water Pollution Control 11
FAA – 08 Contract Work Hours and Safety Standards Act Requirements 12 FAA – 09 Copeland Anti-Kickback Act 14
FAA – 10 Davis Bacon Requirements 15
FAA – 11 Debarment and Suspension * 22
FAA – 12 Disadvantaged Business Enterprise * 23
FAA – 13 Distracted Driving 25
FAA – 14 Prohibition on Certain Telecommunications and Video Surveillance Services or Equipment
26 FAA – 15 Drug Free Workplace Requirements (not applicable to Contractors) 27 FAA – 16 Equal Employment Opportunity 28
FAA – 17 Federal Fair Labor Standards Act * 36
FAA – 18 Lobbying and Influencing Federal Employees 37
FAA – 19 Prohibition of Segregated Facilities 38
FAA – 20 Occupational Safety and Health Act of 1970 39
FAA – 21 Procurement of Recovered Materials * 40
FAA – 22 Right to Inventions 41
FAA – 23 Seismic Safety 42
FAA – 24 Tax Delinquency and Felony Convictions* 43
FAA – 25 Termination of Contract 44
FAA – 26 Trade Restriction Certification (Foreign) * 45 FAA – 27 Veteran’s Preference 47
FAA – 28 Domestic Preferences for Procurements * 48
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FAA - 01 Access to Records and Reports
APPLICABILITY – pertains to all contracts.
The Contractor must maintain an acceptable cost accounting system. The Contractor agrees to provide the City, the Federal Aviation Administration and the Comptroller General of the United States or any of their duly authorized representatives access to any books, documents, papers and records of the Contractor which are directly pertinent to the specific contract for the purpose of making audit, examination, excerpts and transcriptions. The Contractor agrees to maintain all books, records and reports required under this contract for a period of not less than three years after final payment is made and all pending matters are closed.
Reference: 2 CFR § 200.334, 2 CFR § 200.337, FAA Order 5100.38 1P - Page 30
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FAA - 02 Affirmative Action Requirement
NOTICE OF REQUIREMENT FOR AFFIRMATIVE ACTION TO
ENSURE EQUAL EMPLOYMENT OPPORTUNITY
APPLICABILITY – pertains to all contracts over $10,000 as follows:
Construction – AIP funded construction work contracts and subcontracts that exceed $10,000. Construction work means construction, rehabilitation, alteration, conversion, extension, demolition or repair of buildings, highways or other changes or improvements to real property, including facilities providing utility services. The term also includes the supervision, inspection and other onsite functions incidental to the actual construction.
Equipment – any equipment project exceeding $10,000 that involves installation of equipment onsite (e.g., electrical vault equipment). This provision does not apply to equipment acquisition projects where the manufacture of the equipment takes place offsite at a manufacturer’s plant (e.g., firefighting and snow removal vehicles).
Professional Services – any professional service agreement if the professional services agreement includes tasks that meet the definition of construction work [as defined by the U.S. Department of Labor (DOL)] and exceeds $10,000. Examples include installation of monitoring systems (e.g., noise, environmental, etc.).
Property/Land – any agreement associated with land acquisition if the agreement includes construction work (defined above) that exceeds $10,000. Examples include demolition of structures or installation of boundary fencing.
REQUIREMENTS -
1. The Contractor’s attention is called to the “Equal Opportunity Clause” and the “Standard Federal Equal Employment Opportunity Construction Contract Specifications” set forth herein.
2. The goals and timetables for minority and female participation, expressed in percentage terms for the Contractor’s aggregate workforce in each trade on all construction work in the covered area, are as follows:
Timetables
Goals for minority participation for each trade: 16%
Goals for female participation in each trade: 6.9%
These goals are applicable to all of the Contractor’s construction work (whether or not it is Federal or federally assisted) performed in the covered area. If the Contractor performs construction work in a geographical area located outside of the covered area, it shall apply the goals established for such geographical area where the work is actually performed. With regard to this second area, the Contractor also is subject to the goals for both its federally involved and nonfederally involved construction.
The Contractor’s compliance with the Executive Order and the regulations in 41 CFR Part 60-4 shall be based on its implementation of the Equal Opportunity Clause, specific affirmative action obligations required by the specifications set forth in 41 CFR 1P - Page 31
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60-4.3(a) and its efforts to meet the goals. The hours of minority and female employment and training must be substantially uniform throughout the length of the contract, and in each trade, and the Contractor shall make a good faith effort to employ minorities and women evenly on each of its projects. The transfer of minority or female employees or trainees from Contractor to Contractor or from project to project for the sole purpose of meeting the Contractor’s goals shall be a violation of the contract, the Executive Order and the regulations in 41 CFR Part 60-4. Compliance with the goals will be measured against the total work hours performed.
3. The Contractor shall provide written notification to the Director of the Office of Federal Contract Compliance Programs (OFCCP) within 10 working days of award of any construction subcontract in excess of $10,000 at any tier for construction work under the contract resulting from this solicitation. The notification shall list the name, address, and telephone number of the subcontractor; employer identification number of the subcontractor; estimated dollar amount of the subcontract; estimated starting and completion dates of the subcontract; and the geographical area in which the subcontract is to be performed.
4. As used in this notice and in the contract resulting from this solicitation, the “covered area” is California, Riverside County, Palm Springs.
R
eference: 41 CFR Part 60-4
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FAA – 03 Breach of Contract
APPLICABILITY – required for all contracts that exceed the simplified acquisition threshold as stated in 2 CFR Part 200, Appendix II (A). This threshold is occasionally adjusted for inflation and is $250,000.
REQUIREMENT -
See Section 4.5 of the Agreement.
Reference: 2 CFR § 200 Appendix II(A)
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FAA – 04 Buy American Preferences
APPLICABILITY – required for contracts defined as follows:
• Construction Projects involving the replacement, rehabilitation, reconstruction of airfield surfaces such as on runways, taxiways, taxilanes, aprons, roadways, parking lots, etc. – Insert the Certificate of compliance to FAA Buy American Preference based on Construction Projects.
• Equipment and Buildings Projects involving and including the acquisition of equipment such as snow removal equipment, navigational aids, wind cones, and the construction of buildings such as hangars, terminal development, lighting vaults, aircraft rescue & firefighting buildings, etc. - Insert the Certificate of Compliance with FAA Buy American Preference Based on Equipment/Building Projects.
REQUIREMENT -
The Contractor certifies that all constructions materials, defined to mean an article, material, or supply other than an item of primarily iron or steel; a manufactured product; cement and cementitious materials; aggregates such as stone, sand, or gravel; or aggregate binding agents or additives that are or consist primarily of: non-ferrous metals; plastic and polymer-based products (including polyvinylchloride, composite building materials, and polymers used in fiber optic cables); glass (including optic glass); lumber; or drywall used in the project are manufactured in the U.S.
Reference: Title 49 USC § 50101
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FAA – 05 Civil Rights General
APPLICABILITY – required for all contracts regardless of funding source.
REQUIREMENT -
In all its activities within the scope of its airport program, the Contractor agrees to comply with pertinent statutes, Executive Orders, and such rules as identified in Title VI List of Pertinent Nondiscrimination Acts and Authorities to ensure that no person shall, on the grounds of race, color, national origin (including limited English proficiency), creed, sex (including sexual orientation and gender identity), age, or disability be excluded from participating in any activity conducted with or benefiting from Federal assistance. The above provision binds the Contractor and subcontractors from the bid solicitation period through the completion of the contract.
This provision is in addition to that required by Title VI of the Civil Rights Act of 1964.
Reference: 49 USC § 47123
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FAA – 06 Civil Rights – Title VI Assurances
APPLICABILITY – required for all contracts.
REQUIREMENT -
Title VI List of Pertinent Nondiscrimination Acts and Authorities During the performance of this contract, the Contractor, for itself, its assignees, and successors in interest (hereinafter referred to as the “Contractor”) agrees to comply with the following non-discrimination statutes and authorities; including but not limited to:
• Title VI of the Civil Rights Act of 1964 (42 USC § 2000d et seq., 78 stat. 252) (prohibits discrimination on the basis of race, color, national origin); • 49 CFR part 21 (Non-discrimination in Federally-Assisted programs of the Department of Transportation—Effectuation of Title VI of the Civil Rights Act of 1964); • The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, (42 USC § 4601) (prohibits unfair treatment of persons displaced or whose property has been acquired because of Federal or Federal-aid programs and projects); • Section 504 of the Rehabilitation Act of 1973 (29 USC § 794 et seq.), as amended (prohibits discrimination on the basis of disability); and 49 CFR part 27 (Nondiscrimination on the Basis of Disability in Programs or Activities Receiving Federal Financial Assistance);
• The Age Discrimination Act of 1975, as amended (42 USC § 6101 et seq.) (prohibits discrimination on the basis of age);
• Airport and Airway Improvement Act of 1982 (49 USC § 47123), as amended (prohibits discrimination based on race, creed, color, national origin, or sex); • The Civil Rights Restoration Act of 1987 (PL 100-259) (broadened the scope, coverage and applicability of Title VI of the Civil Rights Act of 1964, the Age Discrimination Act of 1975 and Section 504 of the Rehabilitation Act of 1973, by expanding the definition of the terms “programs or activities” to include all of the programs or activities of the Federal-aid recipients, sub-recipients and contractors, whether such programs or activities are Federally funded or not); • Titles II and III of the Americans with Disabilities Act of 1990 (42 USC § 12101, et seq) (prohibit discrimination on the basis of disability in the operation of public entities, public and private transportation systems, places of public accommodation, and certain testing entities) as implemented by U.S. Department of Transportation regulations at 49 CFR parts 37 and 38;
• The Federal Aviation Administration’s Nondiscrimination statute (49 USC § 47123) (prohibits discrimination on the basis of race, color, national origin, and sex); 1P - Page 36
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• Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (ensures nondiscrimination against minority populations by discouraging programs, policies, and activities with disproportionately high and adverse human health or environmental effects on minority and low-income populations);
• Executive Order 13166, Improving Access to Services for Persons with Limited English Proficiency, and resulting agency guidance, national origin discrimination includes discrimination because of limited English proficiency (LEP). To ensure compliance with Title VI, you must take reasonable steps to ensure that LEP persons have meaningful access to your programs [70 Fed. Reg. 74087 (2005)]; • Title IX of the Education Amendments of 1972, as amended, which prohibits you from discriminating because of sex in education programs or activities (20 USC § 1681, et seq).
Compliance with Nondiscrimination Requirements:
During the performance of this contract, the Contractor, for itself, its assignees, and successors in interest (hereinafter referred to as the “Contractor”), agrees as follows:
1. Compliance with Regulations: The Contractor (hereinafter includes consultants) will comply with the Title VI List of Pertinent Nondiscrimination Acts and Authorities, as they may be amended from time to time, which are herein incorporated by reference and made a part of this contract.
2. Nondiscrimination: The Contractor, with regard to the work performed by it during the contract, will not discriminate on the grounds of race, color, national origin (including limited English proficiency), creed, sex (including sexual orientation and gender identity), age, or disability in the selection and retention of subcontractors, including procurements of materials and leases of equipment. The Contractor will not participate directly or indirectly in the discrimination prohibited by the Nondiscrimination Acts and Authorities, including employment practices when the contract covers any activity, project, or program set forth in Appendix B of 49 CFR part 21.
3. Solicitations for Subcontracts, including Procurements of Materials and Equipment: In all solicitations, either by competitive bidding or negotiation made by the Contractor for work to be performed under a subcontract, including procurements of materials, or leases of equipment, each potential subcontractor or supplier will be notified by the Contractor of the Contractor’s obligations under this contract and the Nondiscrimination Acts and Authorities on the grounds of race, color, or national origin.
4. Information and Reports: The Contractor will provide all information and reports required by the Acts, the Regulations, and directives issued pursuant thereto and will permit access to its books, records, accounts, other sources of information, and 1P - Page 37
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its facilities as may be determined by the City or the Federal Aviation Administration to be pertinent to ascertain compliance with such Nondiscrimination Acts and Authorities and instructions. Where any information required of a Contractor is in the exclusive possession of another who fails or refuses to furnish the information, the Contractor will so certify to the City or the Federal Aviation Administration, as appropriate, and will set forth what efforts it has made to obtain the information.
5. Sanctions for Noncompliance: In the event of a Contractor’s noncompliance with the non-discrimination provisions of this contract, the City will impose such contract sanctions as it or the Federal Aviation Administration may determine to be appropriate, including, but not limited to:
a. Withholding payments to the Contractor under the contract until the Contractor complies; and/or
b. Cancelling, terminating, or suspending a contract, in whole or in part.
6. Incorporation of Provisions: The Contractor will include the provisions of paragraphs one through six in every subcontract, including procurements of materials and leases of equipment, unless exempt by the Acts, the Regulations, and directives issued pursuant thereto. The Contractor will take action with respect to any subcontract or procurement as the City or the Federal Aviation Administration may direct as a means of enforcing such provisions including sanctions for noncompliance. Provided, that if the Contractor becomes involved in, or is threatened with litigation by a subcontractor, or supplier because of such direction, the Contractor may request the City to enter into any litigation to protect the interests of the City. In addition, the Contractor may request the United States to enter into the litigation to protect the interests of the United States.
Reference: 49 USC § 47123, FAA Order 1400.11
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FAA – 07 Clean Air/Water Pollution Control
APPLICABILITY – This provision is required for all contracts and lower tier contracts that exceed $150,000.
REQUIREMENT -
If the Agreement exceeds $150,000, Contractor agrees to comply with all applicable standards, orders, and regulations issued pursuant to the Clean Air Act (42 USC § 7401-7671q) and the Federal Water Pollution Control Act as amended (33 USC § 1251- 1387). The Contractor agrees to report any violation to the City immediately upon discovery. The City assumes responsibility for notifying the Environmental Protection Agency (EPA) and the Federal Aviation Administration.
Contractor must include this requirement in all subcontracts that exceeds $150,000.
Reference: 2 CFR § 200, Appendix II(G); 42 USC § 7401; 33 USC § 1251
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FAA – 08 Contract Work Hours and Safety Standards
APPLICABILITY – This provision is required for contracts as follows:
Contract Work Hours and Safety Standards Act Requirements (CWHSSA) (40 USC §§ 3702 & 3704) requires contractors and subcontractors on covered contracts to pay laborers and mechanics employed in the performance of the contracts not less than one and one-half times their basic rate of pay for all hours worked over 40 in a workweek.
CWHSSA prohibits unsanitary, hazardous, or dangerous working conditions on federally-assisted projects. The Wage and Hour Division (WHD) within the U.S.
Department of Labor (DOL) enforces the compensation requirements of this Act, while DOL’s Occupational Safety and Health Administration (OSHA) enforces the safety and health requirements.
Contract Types –
Construction – This provision applies to all contracts and lower tier contracts that exceed $100,000, and employ laborers, mechanics, watchmen, and guards.
Equipment – This provision applies to any equipment project exceeding $100,000 that involves installation of equipment onsite (e.g., electrical vault equipment). This provision does not apply to equipment acquisition projects where the manufacture of the equipment takes place offsite at the vendor plant (e.g., ARFF and SRE vehicles).
Professional Services – This provision applies to professional service agreements that exceed $100,000 and employs laborers, mechanics, watchmen, and guards. This includes members of survey crews and exploratory drilling operations.
Property – While most land transactions do not involve employment of laborers, mechanics, watchmen, and guards, under certain circumstances, a property acquisition project could require such employment. Examples include the installation of property fencing or testing for environmental contamination
CONTRACT WORKHOURS AND SAFETY STANDARDS ACT REQUIREMENTS
1. Overtime Requirements.
No contractor or subcontractor contracting for any part of the contract work which may require or involve the employment of laborers or mechanics shall require or permit any such laborer or mechanic, including watchmen and guards, in any workweek in which he or she is employed on such work to work in excess of forty hours in such workweek unless such laborer or mechanic receives compensation at a rate not less than one and one-half times the basic rate of pay for all hours worked in excess of forty hours in such workweek.
2. Violation; Liability for Unpaid Wages; Liquidated Damages.
In the event of any violation of the clause set forth in paragraph (1) of this clause, the Contractor and any subcontractor responsible therefor shall be liable for the unpaid wages. In addition, such contractor and subcontractor shall be liable to the United States (in the case of work done under contract for the District of Columbia or a territory, to such District or to such territory), for liquidated damages. Such liquidated damages shall be computed with respect to each individual laborer or mechanic, including watchmen and guards, employed in violation of the clause set forth in paragraph (1) of this clause, in the sum of $29 1P - Page 40
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for each calendar day on which such individual was required or permitted to work in excess of the standard workweek of forty hours without payment of the overtime wages required by the clause set forth in paragraph (1) of this clause.
3. Withholding for Unpaid Wages and Liquidated Damages.
The Federal Aviation Administration (FAA) or the City shall upon its own action or upon written request of an authorized representative of the Department of Labor withhold or cause to be withheld, from any moneys payable on account of work performed by the Contractor or subcontractor under any such contract or any other Federal contract with the same prime Contractor, or any other federally- assisted contract subject to the Contract Work Hours and Safety Standards Act, which is held by the same prime Contractor, such sums as may be determined to be necessary to satisfy any liabilities of such Contractor or subcontractor for unpaid wages and liquidated damages as provided in the clause set forth in paragraph (2) of this clause.
4. Subcontractors.
The Contractor or subcontractor shall insert in any subcontracts the clauses set forth in paragraphs (1) through (4) and also a clause requiring the subcontractor to include these clauses in any lower tier subcontracts. The prime contractor shall be responsible for compliance by any subcontractor or lower tier subcontractor with the clauses set forth in paragraphs (1) through (4) of this clause.
Reference: 2 CFR Part 200, Appendix II(E); 2 CFR § 5.5(b); 40 USC § 3702; 40 USC § 3704
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FAA – 09 Copeland Anti-Kickback
APPLICABILITY -
The Copeland (Anti-Kickback) Act (18 USC § 874 and 40 USC § 3145) makes it unlawful to induce by force, intimidation, threat of dismissal from employment, or by any other manner, any person employed in the construction or repair of public buildings or public works, financed in whole or in part by the United States, to give up any part of the compensation to which that person is entitled under a contract of employment. The Copeland Act also requires each contractor and subcontractor to furnish weekly a statement of compliance with respect to the wages paid each employee during the preceding week.
Contract Types –
Construction – This provision applies to all construction contracts and subcontracts financed under the AIP that exceed $2,000.
Equipment – This provision applies to all equipment installation projects (e.g., electrical vault improvements) financed under the AIP that exceed $2,000. This provision does not apply to equipment acquisitions where the equipment is manufactured at the vendor’s plant (e.g., SRE and ARFF vehicles).
Professional Services –The emergence of different project delivery methods has created situations where Professional Service Agreements (PSAs) include tasks that meet the definition of construction, alteration, or repair as defined in 29 CFR Part 5. If such tasks result in work that qualifies as construction, alteration, or repair and it exceeds $2,000, the PSA must incorporate the Copeland Anti- kickback provision.
Property –Ordinarily, land acquisition projects would not involve employment of laborers or mechanics and thus the Copeland Anti-Kickback provision would not apply. However, land projects that involve installation of boundary fencing and demolition of structures would involve laborers and mechanics. The City must include this provision if the land acquisition project involves employment of laborers or mechanics for a contract exceeding $2,000.
REQUIREMENT -
Contractor must comply with the requirements of the Copeland “Anti-Kickback” Act (18 USC 874 and 40 USC 3145), as supplemented by Department of Labor regulation 29 CFR part 3. Contractor and subcontractors are prohibited from inducing, by any means, any person employed on the project to give up any part of the compensation to which the employee is entitled. The Contractor and each Subcontractor must submit to the City, a weekly statement on the wages paid to each employee performing on covered work during the prior week. City must report any violations of the Act to the Federal Aviation Administration.
Reference: 2 CFR Part 200, Appendix II(D); 29 CFR Parts 3 and 5 1P - Page 42
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FAA – 10 Davis Bacon Requirements
APPLICABILITY -
The Davis-Bacon Act (40 USC §§ 3141-3144, 3146, and 3147) ensures that laborers and mechanics employed under the contract receive pay no less than the locally prevailing wages and fringe benefits as determined by the Department of Labor.
Contract Types –
Construction –all construction contracts and subcontracts that exceed $2,000 and include funding from the AIP.
Equipment – This provision applies to all equipment installation projects (e.g., electrical vault improvements) financed under the AIP that exceed $ 2,000. This provision does not apply to equipment acquisitions where the equipment is manufactured at the vendor’s plant (e.g., SRE and ARFF vehicles)
Professional Services – The emergence of different project delivery methods has created situations where Professional Service Agreements (PSAs) includes tasks that meet the definition of construction, alteration, or repair as defined in 29 CFR Part 5. If such tasks result in work that qualifies as construction, alteration, or repair and it exceeds $2,000, the PSA must incorporate this clause.
Property – Ordinarily, land acquisition projects would not involve employment of laborers or mechanics and thus the provision would not apply. However, land projects that involve installation of boundary fencing and demolition of structures would involve laborers and mechanics. The City must include this provision if the land acquisition project involves employment of laborers or mechanics for a contract exceeding $2,000.
Fencing Projects – Fencing projects that exceed $2,000 must include this provision.
DAVIS-BACON REQUIREMENTS
1. Minimum Wages.
(i) All laborers and mechanics employed or working upon the site of the work will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by the Secretary of Labor under the Copeland Act (29 CFR Part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalent thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the Contractor and such laborers and mechanics.
Contributions made or costs reasonably anticipated for bona fide fringe benefits under section 1(b)(2) of the Davis-Bacon Act on behalf of laborers or mechanics are considered wages paid to such laborers or mechanics, subject to the provisions of 1P - Page 43
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paragraph (1)(iv) of this section; also, regular contributions made or costs incurred for more than a weekly period (but not less often than quarterly) under plans, funds, or programs which cover the particular weekly period, are deemed to be constructively made or incurred during such weekly period. Such laborers and mechanics shall be paid the appropriate wage rate and fringe benefits on the wage determination for the classification of work actually performed, without regard to skill, except as provided in 29 CFR § 5.5(a)(4). Laborers or mechanics performing work in more than one classification may be compensated at the rate specified for each classification for the time actually worked therein: Provided, that the employer’s payroll records accurately set forth the time spent in each classification in which work is performed. The wage determination (including any additional classification and wage rates conformed under (1)(ii) of this section) and the Davis-Bacon poster (WH-1321) shall be posted at all times by the Contractor and its subcontractors at the site of the work in a prominent and accessible place where it can easily be seen by the workers. (ii)(A) The contracting officer shall require that any class of laborers or mechanics, including helpers, which is not listed in the wage determination and which is to be employed under the contract shall be classified in conformance with the wage determination. The contracting officer shall approve an additional classification and wage rate and fringe benefits therefore only when the following criteria have been met:
(1) The work to be performed by the classification requested is not performed by a classification in the wage determination;
(2) The classification is utilized in the area by the construction industry; and (3) The proposed wage rate, including any bona fide fringe benefits, bears a reasonable relationship to the wage rates contained in the wage determination. (B) If the Contractor and the laborers and mechanics to be employed in the classification (if known), or their representatives, and the contracting officer agree on the classification and wage rate (including the amount designated for fringe benefits where appropriate), a report of the action taken shall be sent by the contracting officer to the Administrator of the Wage and Hour Division, U.S. Department of Labor, Washington, DC 20210. The Administrator, or an authorized representative, will approve, modify, or disapprove every additional classification action within 30 days of receipt and so advise the contracting officer or will notify the contracting officer within the 30-day period that additional time is necessary.
(C) In the event the Contractor, the laborers, or mechanics to be employed in the classification, or their representatives, and the contracting officer do not agree on the proposed classification and wage rate (including the amount designated for fringe benefits, where appropriate), the contracting officer shall refer the questions, including the views of all interested parties and the recommendation of the contracting officer, to the Administrator for determination. The Administrator, or an authorized representative, will issue a determination within 30 days of receipt and so advise the contracting officer 1P - Page 44
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or will notify the contracting officer within the 30-day period that additional time is necessary.
(D) The wage rate (including fringe benefits where appropriate) determined pursuant to subparagraphs (1)(ii) (B) or (C) of this paragraph, shall be paid to all workers performing work in the classification under this contract from the first day on which work is performed in the classification.
(iii) Whenever the minimum wage rate prescribed in the contract for a class of laborers or mechanics includes a fringe benefit which is not expressed as an hourly rate, the contractor shall either pay the benefit as stated in the wage determination or shall pay another bona fide fringe benefit or an hourly cash equivalent thereof. (iv) If the Contractor does not make payments to a trustee or other third person, the Contractor may consider as part of the wages of any laborer or mechanic the amount of any costs reasonably anticipated in providing bona fide fringe benefits under a plan or program, Provided, that the Secretary of Labor has found, upon the written request of the Contractor, that the applicable standards of the Davis-Bacon Act have been met.
The Secretary of Labor may require the Contractor to set aside in a separate account assets for the meeting of obligations under the plan or program.
2. Withholding. The Federal Aviation Administration or the CIty shall upon its own action or upon written request of an authorized representative of the Department of Labor withhold or cause to be withheld from the Contractor under this contract or any other Federal contract with the same prime contractor, or any other federally-assisted contract subject to Davis-Bacon prevailing wage requirements, which is held by the same prime contractor, so much of the accrued payments or advances as may be considered necessary to pay laborers and mechanics, including apprentices, trainees, and helpers, employed by the Contractor or any subcontractor the full amount of wages required by the contract. In the event of failure to pay any laborer or mechanic, including any apprentice, trainee, or helper, employed or working on the site of the work, all or part of the wages required by the contract, the Federal Aviation Administration may, after written notice to the Contractor, City, Applicant, or Owner, take such action as may be necessary to cause the suspension of any further payment, advance, or guarantee of funds until such violations have ceased.
3. Payrolls and Basic Records.
(i) Payrolls and basic records relating thereto shall be maintained by the Contractor during the course of the work and preserved for a period of three years thereafter for all laborers and mechanics working at the site of the work. Such records shall contain the name, address, and social security number of each such worker; his or her correct classification; hourly rates of wages paid (including rates of contributions or costs anticipated for bona fide fringe benefits or cash equivalents thereof of the types described in 1(b)(2)(B) of the Davis-Bacon Act); daily and weekly number of hours worked; deductions made; and actual wages paid. Whenever the Secretary of Labor 1P - Page 45
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has found under 29 CFR 5.5(a)(1)(iv) that the wages of any laborer or mechanic include the amount of any costs reasonably anticipated in providing benefits under a plan or program described in section 1(b)(2)(B) of the Davis-Bacon Act, the Contractor shall maintain records that show that the commitment to provide such benefits is enforceable, that the plan or program is financially responsible, and that the plan or program has been communicated in writing to the laborers or mechanics affected, and records which show the costs anticipated or the actual costs incurred in providing such benefits.
Contractors employing apprentices or trainees under approved programs shall maintain written evidence of the registration of apprenticeship programs and certification of trainee programs, the registration of the apprentices and trainees, and the ratios and wage rates prescribed in the applicable programs.
(ii)(A) The Contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the Federal Aviation Administration if the agency is a party to the contract, but if the agency is not such a party, the Contractor will submit the payrolls to the applicant, the City, or Owner, as the case may be, for transmission to the Federal Aviation Administration. The payrolls submitted shall set out accurately and completely all of the information required to be maintained under 29 CFR § 5.5(a)(3)(i), except that full social security numbers and home addresses shall not be included on weekly transmittals. Instead the payrolls shall only need to include an individually identifying number for each employee (e.g., the last four digits of the employee’s social security number). The required weekly payroll information may be submitted in any form desired. Optional Form WH–347 is available for this purpose from the Wage and Hour Division Web site at http://www.dol.gov/esa/whd/forms/wh347instr.htm or its successor site. The prime contractor is responsible for the submission of copies of payrolls by all subcontractors. Contractors and subcontractors shall maintain the full social security number and current address of each covered worker and shall provide them upon request to the Federal Aviation Administration if the agency is a party to the contract, but if the agency is not such a party, the Contractor will submit them to the applicant, the City, or Owner, as the case may be, for transmission to the Federal Aviation Administration, the Contractor, or the Wage and Hour Division of the Department of Labor for purposes of an investigation or audit of compliance with prevailing wage requirements. It is not a violation of this section for a prime contractor to require a subcontractor to provide addresses and social security numbers to the prime contractor for its own records, without weekly submission to the sponsoring government agency (or the applicant, City, or Owner).
(B) Each payroll submitted shall be accompanied by a "Statement of Compliance," signed by the Contractor or subcontractor or his or her agent who pays or supervises the payment of the persons employed under the contract and shall certify the following:
(1) That the payroll for the payroll period contains the information required to be provided under 29 CFR § 5.5(a)(3)(ii), the appropriate information is being maintained under 29 CFR § 5.5 (a)(3)(i), and that such information is correct and complete; 1P - Page 46
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(2) That each laborer and mechanic (including each helper, apprentice, and trainee) employed on the contract during the payroll period has been paid the full weekly wages earned, without rebate, either directly or indirectly, and that no deductions have been made either directly or indirectly from the full wages earned, other than permissible deductions as set forth in Regulations, 29 CFR Part 3;
(3) That each laborer or mechanic has been paid not less than the applicable wage rates and fringe benefits or cash equivalents for the classification of work performed, as specified in the applicable wage determination incorporated into the contract. (C) The weekly submission of a properly executed certification set forth on the reverse side of Optional Form WH-347 shall satisfy the requirement for submission of the “Statement of Compliance” required by paragraph (3)(ii)(B) of this section. (D) The falsification of any of the above certifications may subject the Contractor or subcontractor to civil or criminal prosecution under Section 1001 of Title 18 and Section 231 of Title 31 of the United States Code.
(iii) The Contractor or subcontractor shall make the records required under paragraph (3)(i) of this section available for inspection, copying, or transcription by authorized representatives of the City, the Federal Aviation Administration, or the Department of Labor and shall permit such representatives to interview employees during working hours on the job. If the Contractor or subcontractor fails to submit the required records or to make them available, the Federal agency may, after written notice to the Contractor, the City, applicant, or Owner, take such action as may be necessary to cause the suspension of any further payment, advance, or guarantee of funds.
Furthermore, failure to submit the required records upon request or to make such records available may be grounds for debarment action pursuant to 29 CFR § 5.12.
4. Apprentices and Trainees.
(i) Apprentices. Apprentices will be permitted to work at less than the predetermined rate for the work they performed when they are employed pursuant to and individually registered in a bona fide apprenticeship program registered with the U.S. Department of Labor, Employment and Training Administration, Office of Apprenticeship Training, Employer and Labor Services, or with a State Apprenticeship Agency recognized by the Office, or if a person is employed in his or her first 90 days of probationary employment as an apprentice in such an apprenticeship program, who is not individually registered in the program, but who has been certified by the Office of Apprenticeship Training, Employer and Labor Services or a State Apprenticeship Agency (where appropriate) to be eligible for probationary employment as an apprentice. The allowable ratio of apprentices to journeymen on the job site in any craft classification shall not be greater than the ratio permitted to the contractor as to the entire work force under the registered program. Any worker listed on a payroll at an apprentice wage rate, who is not registered or otherwise employed as stated above, shall be paid not less than the applicable wage rate on the wage determination for the classification of work actually 1P - Page 47
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performed. In addition, any apprentice performing work on the job site in excess of the ratio permitted under the registered program shall be paid not less than the applicable wage rate on the wage determination for the work actually performed. Where a contractor is performing construction on a project in a locality other than that in which its program is registered, the ratios and wage rates (expressed in percentages of the journeyman’s hourly rate) specified in the Contractor’s or subcontractor’s registered program shall be observed. Every apprentice must be paid at not less than the rate specified in the registered program for the apprentice’s level of progress, expressed as a percentage of the journeymen hourly rate specified in the applicable wage determination. Apprentices shall be paid fringe benefits in accordance with the provisions of the apprenticeship program. If the apprenticeship program does not specify fringe benefits, apprentices must be paid the full amount of fringe benefits listed on the wage determination for the applicable classification. If the Administrator determines that a different practice prevails for the applicable apprentice classification, fringes shall be paid in accordance with that determination. In the event the Office of Apprenticeship Training, Employer and Labor Services, or a State Apprenticeship Agency recognized by the Office, withdraws approval of an apprenticeship program, the Contractor will no longer be permitted to utilize apprentices at less than the applicable predetermined rate for the work performed until an acceptable program is approved. (ii) Trainees. Except as provided in 29 CFR § 5.16, trainees will not be permitted to work at less than the predetermined rate for the work performed unless they are employed pursuant to and individually registered in a program which has received prior approval, evidenced by formal certification by the U.S. Department of Labor, Employment and Training Administration. The ratio of trainees to journeymen on the job site shall not be greater than permitted under the plan approved by the Employment and Training Administration. Every trainee must be paid at not less than the rate specified in the approved program for the trainee’s level of progress, expressed as a percentage of the journeyman hourly rate specified in the applicable wage determination. Trainees shall be paid fringe benefits in accordance with the provisions of the trainee program. If the trainee program does not mention fringe benefits, trainees shall be paid the full amount of fringe benefits listed on the wage determination unless the Administrator of the Wage and Hour Division determines that there is an apprenticeship program associated with the corresponding journeyman wage rate on the wage determination that provides for less than full fringe benefits for apprentices. Any employee listed on the payroll at a trainee rate that is not registered and participating in a training plan approved by the Employment and Training Administration shall be paid not less than the applicable wage rate on the wage determination for the classification of work actually performed. In addition, any trainee performing work on the job site in excess of the ratio permitted under the registered program shall be paid not less than the applicable wage rate on the wage determination for the work actually performed. In the event the Employment and Training Administration withdraws approval of a training program, the Contractor will no longer be permitted to utilize trainees at less than the applicable predetermined rate for the work performed until an acceptable program is approved. 1P - Page 48
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(iii) Equal Employment Opportunity. The utilization of apprentices, trainees, and journeymen under this part shall be in conformity with the equal employment opportunity requirements of Executive Order 11246, as amended, and 29 CFR Part 30.
5. Compliance with Copeland Act Requirements.
The Contractor shall comply with the requirements of 29 CFR Part 3, which are incorporated by reference in this contract.
6. Subcontracts.
The Contractor or subcontractor shall insert in any subcontracts the clauses contained in 29 CFR §§ 5.5(a)(1) through (10) and such other clauses as the Federal Aviation Administration may by appropriate instructions require, and also a clause requiring the subcontractors to include these clauses in any lower tier subcontracts. The prime contractor shall be responsible for the compliance by any subcontractor or lower tier subcontractor with all the contract clauses in 29 CFR § 5.5.
7. Contract Termination: Debarment.
A breach of the contract clauses in paragraph 1 through 10 of this section may be grounds for termination of the contract, and for debarment as a contractor and a subcontractor as provided in 29 CFR § 5.12.
8. Compliance with Davis-Bacon and Related Act Requirements.
All rulings and interpretations of the Davis-Bacon and Related Acts contained in 29 CFR Parts 1, 3, and 5 are herein incorporated by reference in this contract.
9. Disputes Concerning Labor Standards.
Disputes arising out of the labor standards provisions of this contract shall not be subject to the general disputes clause of this contract. Such disputes shall be resolved in accordance with the procedures of the Department of Labor set forth in 29 CFR Parts 5, 6, and 7. Disputes within the meaning of this clause include disputes between the Contractor (or any of its subcontractors) and the contracting agency, the U.S.
Department of Labor, or the employees or their representatives.
10. Certification of Eligibility.
(i) By entering into this contract, the Contractor certifies that neither it (nor he or she) nor any person or firm who has an interest in the Contractor’s firm is a person or firm ineligible to be awarded Government contracts by virtue of section 3(a) of the Davis- Bacon Act or 29 CFR § 5.12(a)(1).
(ii) No part of this contract shall be subcontracted to any person or firm ineligible for award of a Government contract by virtue of section 3(a) of the Davis-Bacon Act or 29 CFR § 5.12(a)(1).
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(iii) The penalty for making false statements is prescribed in the U.S. Criminal Code, 18 USC § 1001.
Reference: 2 CFR Part 200, Appendix II(D); 29 CFR Part 5; 49 USC § 47112(b); 40 USC §§ 3141-3144, 3146, and 3147
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FAA – 11 Debarment and Suspension
APPLICABILITY - This requirement applies to covered transactions, which are defined in 2 CFR part 180 (Subpart B). AIP funded contracts are non-procurement transactions, as defined by 2 CFR § 180.970. Covered transactions include any AIP-funded contract, regardless of tier, that is awarded by a contractor, subcontractor, supplier, consultant, or its agent or representative in any transaction, if the amount of the contract is expected to equal or exceed $25,000. This includes contracts associated with land acquisition projects.
REQUIREMENT -
A11.3.1 Bidder or Offeror Certification
By submitting a bid/proposal under the solicitation for this contract, the Contractor must have certified that neither it nor its principals are presently debarred or suspended by any Federal department or agency from participation in this transaction.
A11.3.2 Lower Tier Contract Certification
CERTIFICATION OF LOWER TIER CONTRACTORS REGARDING DEBARMENT The Contractor, by administering each lower tier subcontract that exceeds $25,000 as a “covered transaction”, must verify each lower tier participant of a “covered transaction” under the project is not presently debarred or otherwise disqualified from participation in this federally assisted project. The Contractor will accomplish this by:
1. Checking the System for Award Management at website: http://www.sam.gov.
2. Collecting a certification statement similar to the Certification of Offerer /Bidder Regarding Debarment, above.
3. Inserting a clause or condition in the covered transaction with the lower tier contract.
If the Federal Aviation Administration later determines that a lower tier participant failed to disclose to a higher tier participant that it was excluded or disqualified at the time it entered the covered transaction, the FAA may pursue any available remedies, including suspension and debarment of the non-compliant participant.
Reference: 2 CFR part 180 (Subpart B), 2 CFR part 200 Appendix II(H), 2 CFR Part 1200, DOT Order 4200.5; Executive Orders 12549 and 12689 1P - Page 51
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FAA – 12 Disadvantaged Business Enterprise
APPLICABILITY – all contracts with Airports that have a DBE program on file with the FAA.
Contract Assurance (§ 26.13) –
The Contractor or subcontractor shall not discriminate on the basis of race, color, national origin, or sex in the performance of this contract. The Contractor shall carry out applicable requirements of 49 CFR part 26 in the award and administration of Department of Transportation-assisted contracts. Failure by the Contractor to carry out these requirements is a material breach of this contract, which may result in the termination of this contract or such other remedy as the City deems appropriate, which may include, but is not limited to:
1) Withholding monthly progress payments;
2) Assessing sanctions;
3) Liquidated damages; and/or
4) Disqualifying the Contractor from future bidding as non-responsible.
Prompt Payment (§26.29) – The prime contractor agrees to pay each subcontractor under this prime contract for satisfactory performance of its contract no later than [10 days] days from the receipt of each payment the prime contractor receives from [the City]. The prime contractor agrees further to return retainage payments to each subcontractor within [30 days] days after the subcontractor’s work is satisfactorily completed. Any delay or postponement of payment from the above referenced time frame may occur only for good cause following written approval of the [City]. This clause applies to both DBE and non-DBE subcontractors.
Termination of DBE Subcontracts (49 CFR § 26.53(f)) –
The prime Contractor must not terminate a DBE subcontractor listed in response to the solicitation (or an approved substitute DBE firm) without prior written consent of the City.
This includes, but is not limited to, instances in which the prime contractor seeks to perform work originally designated for a DBE subcontractor with its own forces or those of an affiliate, a non-DBE firm, or with another DBE firm.
The prime Contractor shall utilize the specific DBEs listed to perform the work and supply the materials for which each is listed unless the Contractor obtains written consent of the City. Unless City consent is provided, the prime Contractor shall not be entitled to any payment for work or material unless it is performed or supplied by the listed DBE.
The City may provide such written consent only if the City agrees, for reasons stated in the concurrence document, that the prime Contractor has good cause to terminate the 1P - Page 52
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DBE firm. For purposes of this paragraph, good cause includes the circumstances listed in 49 CFR §26.53.
Before transmitting to the City its request to terminate and/or substitute a DBE subcontractor, the prime Contractor must give notice in writing to the DBE subcontractor, with a copy to the City, of its intent to request to terminate and/or substitute, and the reason for the request.
The prime contractor must give the DBE five days to respond to the prime contractor's notice and advise the City and the Contractor of the reasons, if any, why it objects to the proposed termination of its subcontract and why the City should not approve the prime Contractor's action. If required in a particular case as a matter of public necessity (e.g., safety), the City may provide a response period shorter than five days.
In addition to post-award terminations, the provisions of this section apply to preaward deletions of or substitutions for DBE firms put forward by offerors in negotiated procurements.
Reference: 49 CFR part 26
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FAA – 13 Distracted Driving
APPLICABILITY - contracts that exceed the micro-purchase threshold of 2 CFR § 200.320 (currently set at $10,000).
REQUIREMENT -
TEXTING WHEN DRIVING
In accordance with Executive Order 13513, “Federal Leadership on Reducing Text Messaging While Driving”, (10/1/2009) and DOT Order 3902.10, “Text Messaging While Driving”, (12/30/2009), the Federal Aviation Administration encourages recipients of Federal grant funds to adopt and enforce safety policies that decrease crashes by distracted drivers, including policies to ban text messaging while driving when performing work related to a grant or subgrant.
In support of this initiative, the City encourages the Contractor to promote policies and initiatives for its employees and other work personnel that decrease crashes by distracted drivers, including policies that ban text messaging while driving motor vehicles while performing work activities associated with the project. The Contractor must include the substance of this clause in all sub-tier contracts exceeding $10,000 that involve driving a motor vehicle in performance of work activities associated with the project.
Reference: Executive Order 13513, DOT Order 3902.10
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FAA – 14 Prohibition on Certain Telecommunications and Video Surveillance Services and Equipment
APPLICABILITY - all AIP funded contracts and lower-tier contracts.
REQUIREMENT -
Contractor and Subcontractor agree to comply with mandatory standards and policies relating to use and procurement of certain telecommunications and video surveillance services or equipment in compliance with the National Defense Authorization Act [Public Law 115-232 § 889(f)(1)].
Reference: 2 CFR § 200, Appendix II(K); 2 CFR § 200.216 1P - Page 55
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FAA – 15 Drug Free Workplace Requirements
APPLICABILITY - This provision applies to all AIP funded projects, but not to the contracts between the City and a contractor, subcontractors, suppliers, or subgrantees.
The Drug-Free Workplace Act of 1988 requires some Federal contractors and all Federal grantees to agree that they will provide drug-free workplaces as a condition of receiving a contract or grant from a Federal agency. The Act does not apply to contractors, subcontractors, or subgrantees, although the Federal grantees workplace may be where the contractors, subcontractors, or subgrantees are working.
Reference: 49 CFR part 32, Drug-Free Workplace Act of 1988 (41 U.S.C. 701 et seq., as amended)
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FAA – 16 Equal Employment Opportunity
APPLICABILITY – The purpose of this provision is to provide equal opportunity for all persons, without regard to race, color, religion, sex, or national origin who are employed or seeking employment with contractors performing under a federally-assisted construction contract. There are two provisions ― a construction clause and a specification clause.
The equal opportunity contract clause applies to any contract or subcontract when the amount exceeds $10,000. Once the equal opportunity clause is determined to be applicable, the contract or subcontract must include the clause for the remainder of the year, regardless of the amount or the contract.
Contract Types –
Construction – all construction contracts and subcontracts as required above.
Equipment – all equipment contracts as required above that involves installation of equipment onsite (e.g., electrical vault equipment). This provision does not apply to equipment acquisition projects where the manufacture of the equipment takes place offsite at the vendor plant (e.g., ARFF and SRE vehicles).
Professional Services – all professional service agreements as required above.
Property – all land acquisition projects that include work that qualifies as construction work as defined by 41 CFR part 60 as required above. An example is installation of boundary fencing.
REQUIREMENT -
A16.3.1 EEO Contract Clause
During the performance of this contract, the Contractor agrees as follows:
(1) The Contractor will not discriminate against any employee or applicant for employment because of race, color, religion, sex, sexual orientation, gender identity, or national origin. The Contractor will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, sexual orientation, gender identify, or national origin.
Such action shall include, but not be limited to, the following: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff, or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The Contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided setting forth the provisions of this nondiscrimination clause. (2) The Contractor will, in all solicitations or advertisements for employees placed by or on behalf of the Contractor, state that all qualified applicants will receive 1P - Page 57
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consideration for employment without regard to race, color, religion, sex, sexual orientation, gender identity, or national origin.
(3) The contractor will not discharge or in any other manner discriminate against any employee or applicant for employment because such employee or applicant has inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant. This provision shall not apply to instances in which an employee who has access to the compensation information of other employees or applicants as a part of such employee's essential job functions discloses the compensation of such other employees or applicants to individuals who do not otherwise have access to such information, unless such disclosure is in response to a formal complaint or charge, in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or is consistent with the contractor's legal duty to furnish information. (4) The Contractor will send to each labor union or representative of workers with which it has a collective bargaining agreement or other contract or understanding, a notice to be provided by the agency contracting officer, advising the labor union or workers’ representative of the Contractor’s commitments under this section 202 of Executive Order 11246 of September 24, 1965, and shall post copies of the notice in conspicuous places available to employees and applicants for employment. (5) The Contractor will comply with all provisions of Executive Order 11246 of September 24, 1965, and of the rules, regulations, and relevant orders of the Secretary of Labor.
(6) The Contractor will furnish all information and reports required by Executive Order 11246 of September 24, 1965, and by the rules, regulations, and orders of the Secretary of Labor, or pursuant thereto, and will permit access to his books, records, and accounts by the contracting agency and the Secretary of Labor for purposes of investigation to ascertain compliance with such rules, regulations, and orders. (7) In the event of the Contractor’s noncompliance with the nondiscrimination clauses of this contract or with any such rules, regulations, or orders, this contract may be canceled, terminated, or suspended in whole or in part and the Contractor may be declared ineligible for further Government contracts in accordance with procedures authorized in Executive Order 11246 of September 24, 1965, and such other sanctions may be imposed and remedies invoked as provided in Executive Order 11246 of September 24, 1965, or by rule, regulation, or order of the Secretary of Labor, or as otherwise provided by law.
(8) The Contractor will include the provisions of paragraphs (1) through (8) in every subcontract or purchase order unless exempted by rules, regulations, or orders of the Secretary of Labor issued pursuant to section 204 of Executive Order 11246 of September 24, 1965, so that such provisions will be binding upon each subcontractor or vendor. The Contractor will take such action with respect to any 1P - Page 58
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subcontract or purchase order as may be directed by the Secretary of Labor as a means of enforcing such provisions, including sanctions for noncompliance:
Provided, however, that in the event the contractor becomes involved in, or is threatened with, litigation with a subcontractor or vendor as a result of such direction, the Contractor may request the United States to enter into such litigation to protect the interests of the United States.
A16.3.2 EEO Specification
STANDARD FEDERAL EQUAL EMPLOYMENT OPPORTUNITY
CONSTRUCTION CONTRACT SPECIFICATIONS
a. “Covered area” means the geographical area described in the solicitation from which this contract resulted;
b. “Director” means Director, Office of Federal Contract Compliance Programs (OFCCP), U.S. Department of Labor, or any person to whom the Director delegates authority;
c. “Employer identification number” means the Federal social security number used on the Employer’s Quarterly Federal Tax Return, U.S. Treasury Department Form 941; d. “Minority” includes:
(1) Black (all persons having origins in any of the Black African racial groups not of Hispanic origin);
(2) Hispanic (all persons of Mexican, Puerto Rican, Cuban, Central or South American, or other Spanish culture or origin, regardless of race); (3) Asian and Pacific Islander (all persons having origins in any of the original peoples of the Far East, Southeast Asia, the Indian Subcontinent, or the Pacific Islands); and
(4) American Indian or Alaskan native (all persons having origins in any of the original peoples of North America and maintaining identifiable tribal affiliations through membership and participation or community identification).
2. Whenever the Contractor, or any subcontractor at any tier, subcontracts a portion of the work involving any construction trade, it shall physically include in each subcontract in excess of $10,000 the provisions of these specifications and the Notice which contains the applicable goals for minority and female participation and which is set forth in the solicitations from which this contract resulted.
3. If the Contractor is participating (pursuant to 41 CFR part 60-4.5) in a Hometown Plan approved by the U.S. Department of Labor in the covered area either individually or through an association, its affirmative action obligations on all work in the Plan area (including goals and timetables) shall be in accordance with that Plan for those trades which have unions participating in the Plan. Contractors must be 1P - Page 59
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able to demonstrate their participation in and compliance with the provisions of any such Hometown Plan. Each contractor or subcontractor participating in an approved plan is individually required to comply with its obligations under the EEO clause and to make a good faith effort to achieve each goal under the Plan in each trade in which it has employees. The overall good faith performance by other contractors or subcontractors toward a goal in an approved Plan does not excuse any covered contractor’s or subcontractor’s failure to take good faith efforts to achieve the Plan goals and timetables.
4. The Contractor shall implement the specific affirmative action standards provided in paragraphs 7a through 7p of these specifications. The goals set forth in the solicitation from which this contract resulted are expressed as percentages of the total hours of employment and training of minority and female utilization the Contractor should reasonably be able to achieve in each construction trade in which it has employees in the covered area. Covered construction contractors performing construction work in a geographical areas where they do not have a Federal or federally assisted construction contract shall apply the minority and female goals established for the geographical area where the work is being performed. Goals are published periodically in the Federal Register in notice form, and such notices may be obtained from any Office of Federal Contract Compliance Programs office or from Federal procurement contracting officers. The Contractor is expected to make substantially uniform progress in meeting its goals in each craft during the period specified.
5. Neither the provisions of any collective bargaining agreement, nor the failure by a union with whom the Contractor has a collective bargaining agreement, to refer either minorities or women shall excuse the Contractor’s obligations under these specifications, Executive Order 11246, or the regulations promulgated pursuant thereto.
6. In order for the nonworking training hours of apprentices and trainees to be counted in meeting the goals, such apprentices and trainees must be employed by the Contractor during the training period, and the Contractor must have made a commitment to employ the apprentices and trainees at the completion of their training, subject to the availability of employment opportunities. Trainees must be trained pursuant to training programs approved by the U.S. Department of Labor.
7. The Contractor shall take specific affirmative actions to ensure equal employment opportunity. The evaluation of the Contractor’s compliance with these specifications shall be based upon its effort to achieve maximum results from its actions. The Contractor shall document these efforts fully, and shall implement affirmative action steps at least as extensive as the following:
a. Ensure and maintain a working environment free of harassment, intimidation, and coercion at all sites, and in all facilities at which the Contractor’s employees 1P - Page 60
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are assigned to work. The Contractor, where possible, will assign two or more women to each construction project. The Contractor shall specifically ensure that all foremen, superintendents, and other onsite supervisory personnel are aware of and carry out the Contractor’s obligation to maintain such a working environment, with specific attention to minority or female individuals working at such sites or in such facilities.
b. Establish and maintain a current list of minority and female recruitment sources, provide written notification to minority and female recruitment sources and to community organizations when the Contractor or its unions have employment opportunities available, and maintain a record of the organizations’ responses. c. Maintain a current file of the names, addresses, and telephone numbers of each minority and female off-the-street applicant and minority or female referral from a union, a recruitment source, or community organization and of what action was taken with respect to each such individual. If such individual was sent to the union hiring hall for referral and was not referred back to the Contractor by the union or, if referred, not employed by the Contractor, this shall be documented in the file with the reason therefor, along with whatever additional actions the Contractor may have taken.
d. Provide immediate written notification to the Director when the union or unions with which the Contractor has a collective bargaining agreement has not referred to the Contractor a minority person or woman sent by the Contractor, or when the Contractor has other information that the union referral process has impeded the Contractor’s efforts to meet its obligations. e. Develop on-the-job training opportunities and/or participate in training programs for the area which expressly include minorities and women, including upgrading programs and apprenticeship and trainee programs relevant to the Contractor’s employment needs, especially those programs funded or approved by the Department of Labor. The Contractor shall provide notice of these programs to the sources compiled under 7b above.
f. Disseminate the Contractor’s EEO policy by providing notice of the policy to unions and training programs and requesting their cooperation in assisting the Contractor in meeting its EEO obligations; by including it in any policy manual and collective bargaining agreement; by publicizing it in the company newspaper, annual report, etc.; by specific review of the policy with all management personnel and with all minority and female employees at least once a year; and by posting the company EEO policy on bulletin boards accessible to all employees at each location where construction work is performed.
g. Review, at least annually, the company’s EEO policy and affirmative action obligations under these specifications with all employees having any 1P - Page 61
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responsibility for hiring, assignment, layoff, termination, or other employment decisions including specific review of these items with onsite supervisory personnel such superintendents, general foremen, etc., prior to the initiation of construction work at any job site. A written record shall be made and maintained identifying the time and place of these meetings, persons attending, subject matter discussed, and disposition of the subject matter. h. Disseminate the Contractor’s EEO policy externally by including it in any advertising in the news media, specifically including minority and female news media, and providing written notification to and discussing the Contractor’s EEO policy with other contractors and subcontractors with whom the Contractor does or anticipates doing business.
i. Direct its recruitment efforts, both oral and written, to minority, female, and community organizations, to schools with minority and female students and to minority and female recruitment and training organizations serving the Contractor’s recruitment area and employment needs. Not later than one month prior to the date for the acceptance of applications for apprenticeship or other training by any recruitment source, the Contractor shall send written notification to organizations such as the above, describing the openings, screening procedures, and tests to be used in the selection process. j. Encourage present minority and female employees to recruit other minority persons and women and, where reasonable, provide after school, summer, and vacation employment to minority and female youth both on the site and in other areas of a contractor’s work force.
k. Validate all tests and other selection requirements where there is an obligation to do so under 41 CFR part 60-3.
l. Conduct, at least annually, an inventory and evaluation at least of all minority and female personnel, for promotional opportunities and encourage these employees to seek or to prepare for, through appropriate training, etc., such opportunities.
m. Ensure that seniority practices, job classifications, work assignments, and other personnel practices do not have a discriminatory effect by continually monitoring all personnel and employment related activities to ensure that the EEO policy and the Contractor’s obligations under these specifications are being carried out.
n. Ensure that all facilities and company activities are nonsegregated except that separate or single-user toilet and necessary changing facilities shall be provided to assure privacy between the sexes.
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circulation of solicitations to minority and female contractor associations and other business associations.
p. Conduct a review, at least annually, of all supervisor’s adherence to and performance under the Contractor’s EEO policies and affirmative action obligations.
8. Contractors are encouraged to participate in voluntary associations, which assist in fulfilling one or more of their affirmative action obligations (7a through 7p). The efforts of a contractor association, joint contractor-union, contractor-community, or other similar group of which the Contractor is a member and participant may be asserted as fulfilling any one or more of its obligations under 7a through 7p of these specifications provided that the Contractor actively participates in the group, makes every effort to assure that the group has a positive impact on the employment of minorities and women in the industry, ensures that the concrete benefits of the program are reflected in the Contractor’s minority and female workforce participation, makes a good faith effort to meet its individual goals and timetables, and can provide access to documentation which demonstrates the effectiveness of actions taken on behalf of the Contractor. The obligation to comply, however, is the Contractor’s and failure of such a group to fulfill an obligation shall not be a defense for the Contractor’s noncompliance.
9. A single goal for minorities and a separate single goal for women have been established. The Contractor, however, is required to provide equal employment opportunity and to take affirmative action for all minority groups, both male and female, and all women, both minority and non-minority. Consequently, the Contractor may be in violation of the Executive Order if a particular group is employed in a substantially disparate manner (for example, even though the Contractor has achieved its goals for women generally, the Contractor may be in violation of the Executive Order if a specific minority group of women is underutilized).
10. The Contractor shall not use the goals and timetables or affirmative action standards to discriminate against any person because of race, color, religion, sex, sexual orientation, gender identity, or national origin.
11. The Contractor shall not enter into any subcontract with any person or firm debarred from Government contracts pursuant to Executive Order 11246.
12. The Contractor shall carry out such sanctions and penalties for violation of these specifications and of the Equal Opportunity Clause, including suspension, termination, and cancellation of existing subcontracts as may be imposed or ordered pursuant to Executive Order 11246, as amended, and its implementing regulations, by the Office of Federal Contract Compliance Programs. Any contractor who fails to carry out such sanctions and penalties shall be in violation of these specifications and Executive Order 11246, as amended.
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13. The Contractor, in fulfilling its obligations under these specifications, shall implement specific affirmative action steps, at least as extensive as those standards prescribed in paragraph 7 of these specifications, so as to achieve maximum results from its efforts to ensure equal employment opportunity. If the Contractor fails to comply with the requirements of the Executive Order, the implementing regulations, or these specifications, the Director shall proceed in accordance with 41 CFR part 60-4.8.
14. The Contractor shall designate a responsible official to monitor all employment related activity to ensure that the company EEO policy is being carried out, to submit reports relating to the provisions hereof as may be required by the Government, and to keep records. Records shall at least include for each employee, the name, address, telephone numbers, construction trade, union affiliation if any, employee identification number when assigned, social security number, race, sex, status (e.g., mechanic, apprentice, trainee, helper, or laborer), dates of changes in status, hours worked per week in the indicated trade, rate of pay, and locations at which the work was performed. Records shall be maintained in an easily understandable and retrievable form; however, to the degree that existing records satisfy this requirement, contractors shall not be required to maintain separate records.
15. Nothing herein provided shall be construed as a limitation upon the application of other laws which establish different standards of compliance or upon the application of requirements for the hiring of local or other area residents (e.g. those under the Public Works Employment Act of 1977 and the Community Development Block Grant Program).
Reference: 2 CFR 200, Appendix II(C), 41 CFR § 60-1.4, 41 CFR § 60-4.3, Executive Order 11246
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FAA – 17 Federal Fair Labor Standards Act
APPLICABILITY – Contract Types – Per the Department of Labor, all employees of certain enterprises having workers engaged in interstate commerce; producing goods for interstate commerce; or handling, selling, or otherwise working on goods or materials that have been moved in or produced for such commerce by any person are covered by the FLSA.
All consultants, sub-consultants, contractors, and subcontractors employed under this federally assisted project must comply with the FLSA.
Professional Services – 29 CFR § 213 exempts employees in a bona fide executive, administrative or professional capacity. Because professional firms employ individuals that are not covered by this exemption, the agreement with a professional services firm must include the FLSA provision.
REQUIREMENT -
The provisions of 29 CFR part 201, the Federal Fair Labor Standards Act (FLSA), are incorporated by reference with the same force and effect as if given in full text. The FLSA sets minimum wage, overtime pay, recordkeeping, and child labor standards for full and part-time workers.
The Contractor has full responsibility to monitor compliance to the referenced statute or regulation. The Contractor must address any claims or disputes that arise from this requirement directly with the U.S. Department of Labor – Wage and Hour Division.
Reference: 29 USC § 201, et seq; 2 CFR § 200.430
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FAA – 18 Lobbying and Influencing Federal Employees
APPLICABILITY- all contracts exceeding $100,000.
REQUIREMENT -
Consultants and contractors that apply or bid for an award of $100,000 or more must have certified that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any Federal contract, grant, or another award covered by 31 USC §1352. Each tier must also disclose any lobbying with non-Federal funds that takes place in connection with obtaining any Federal award.
For an award over $100,00, the bidder or offeror certifies by signing and submitting this bid or proposal, to the best of his or her knowledge and belief, that:
(1) No Federal appropriated funds have been paid or will be paid, by or on behalf of the bidder or offeror, to any person for influencing or attempting to influence an officer or employee of an agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement.
(2) If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a M ember of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and submit Standard Form - LLL, “Disclosure Form to Report Lobbying,” in accordance with its instructions. (3) The undersigned shall require that the language of this certification be included in the award documents for all sub- awards at all tiers (including subcontracts, sub- grants, and contracts under grants, loans, and cooperative agreements) and that all sub- recipients shall certify and disclose accordingly.
This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by section 1352, title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.
Reference: 31 USC § 1352 – Byrd Anti-Lobbying Amendment, 2 CFR part 200, Appendix II(I), 49 CFR part 20, Appendix A
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FAA – 19 Prohibition of Segregated Facilities
APPLICABILITY - The Contractor must comply with the requirements of the EEO clause by ensuring that facilities they provide for employees are free of segregation on the basis of race, color, religion, sex, sexual orientation, gender identity, or national origin. This clause must be included in all contracts that include the equal opportunity clause, regardless of the amount of the contract.
Contract Types – any contract containing the Equal Employment Opportunity clause of 41 CFR § 60-1.4. This obligation flows down to subcontract and sub-tier purchase orders containing the Equal Employment Opportunity clause.
Construction – Construction work means construction, rehabilitation, alteration, conversion, extension, demolition or repair of buildings, highways, or other changes or improvements to real property, including facilities providing utility services. The term also includes the supervision, inspection, and other onsite functions incidental to the actual construction.
Equipment – On site installation of equipment such as airfield lighting control equipment meets the definition of construction and thus this provision would apply. This provision does not apply to equipment projects involving manufacture of the item at a vendor’s manufacturing plant. An example would be the manufacture of a SRE or ARFF vehicle.
Professional Services – Professional services that include tasks that qualify as construction work as defined by 41 CFR part 60-1. Examples include the installation of noise monitoring equipment.
Property/Land – Land acquisition contracts that include tasks that qualify as construction work as defined by 41 CFR part 60-1. Examples include demolition of structures or installation of boundary fencing.
REQUIREMENT -
(a) The Contractor agrees that it does not and will not maintain or provide for its employees any segregated facilities at any of its establishments, and that it does not and will not permit its employees to perform their services at any location under its control where segregated facilities are maintained. The Contractor agrees that a breach of this clause is a violation of the Equal Employment Opportunity clause in this contract.
(b) “Segregated facilities,” as used in this clause, means any waiting rooms, work areas, rest rooms and wash rooms, restaurants and other eating areas, time clocks, locker rooms and other storage or dressing areas, parking lots, drinking fountains, recreation or entertainment areas, transportation, and housing facilities provided for employees that are segregated by explicit directive or are in fact segregated on the basis of race, color, religion, sex, sexual orientation, gender identity, or national origin because of 1P - Page 67
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written or oral policies or employee custom. The term does not include separate or single-user rest rooms or necessary dressing or sleeping areas provided to assure privacy between the sexes.
(c) The Contractor shall include this clause in every subcontract and purchase order that is subject to the Equal Employment Opportunity clause of this contract.
Reference: 2 CFR Part 200, Appendix II (C); 41 CFR Part 60-1 1P - Page 68
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FAA – 20 Occupational Safety and Health Act
APPLICABILITY – Contract Types – All contracts and subcontracts must comply with the Occupational Safety and Health Act of 1970 (OSH). The U.S. Department of Labor Occupational Safety and Health Administration (OSHA) oversees the workplace health and safety standards wage provisions from OSH.
REQUIREMENT -
All contracts and subcontracts that result from this solicitation incorporate by reference the requirements of 29 CFR Part 1910 with the same force and effect as if given in full text. The employer must provide a work environment that is free from recognized hazards that may cause death or serious physical harm to the employee. The employer retains full responsibility to monitor its compliance and their subcontractor’s compliance with the applicable requirements of the Occupational Safety and Health Act of 1970 (29 CFR Part 1910). The employer must address any claims or disputes that pertain to a referenced requirement directly with the U.S. Department of Labor – Occupational Safety and Health Administration.
Reference: 29 CFR part 1910
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FAA – 21 Procurement of Recovered Materials
APPLICABILITY – Contract Types – This provision applies to any contracts that include procurement of products designated in subpart B of 40 CFR part 247 where the purchase price of the item exceeds $10,000 or the value of the quantity acquired by the preceding fiscal year exceeded $10,000.
Construction and Equipment – all construction and equipment projects.
Professional Services and Property – if the agreement includes procurement of a product that exceeds $10,000.
REQUIREMENT -
Contractor and subcontractor agree to comply with Section 6002 of the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act, and the regulatory provisions of 40 CFR Part 247. In the performance of this contract and to the extent practicable, the Contractor and subcontractors are to use products containing the highest percentage of recovered materials for items designated by the Environmental Protection Agency (EPA) under 40 CFR Part 247 whenever:
1) The contract requires procurement of $10,000 or more of a designated item during the fiscal year; or
2) The contractor has procured $10,000 or more of a designated item using Federal funding during the previous fiscal year.
The list of EPA-designated items is available at www.epa.gov/smm/comprehensive- procurement-guidelines-construction-products.
Section 6002(c) establishes exceptions to the preference for recovery of EPA- designated products if the contractor can demonstrate the item is:
a) Not reasonably available within a timeframe providing for compliance with the contract performance schedule;
b) Fails to meet reasonable contract performance requirements; or c) Is only available at an unreasonable price.
Reference: 2 CFR § 200.323, 2 CFR Part 200, Appendix II (J); 40 CFR part 247, 42 USC § 6901, et seq (Resource Conservation and Recovery Act) 1P - Page 70
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FAA – 22 Rights to Inventions
APPLICABILITY – Contract Types – This provision applies to all contracts and subcontracts with small business firms or nonprofit organizations that include performance of experimental, developmental, or research work. This clause is not applicable to construction, equipment, or professional service contracts unless the contract includes experimental, developmental, or research work.
REQUIREMENT -
Contracts or agreements that include the performance of experimental, developmental, or research work must provide for the rights of the Federal Government and the City in any resulting invention as established by 37 CFR part 401, Rights to Inventions Made by Non-profit Organizations and Small Business Firms under Government Grants, Contracts, and Cooperative Agreements. This contract incorporates by reference the patent and inventions rights as specified within 37 CFR §401.14. Contractor must include this requirement in all sub-tier contracts involving experimental, developmental, or research work.
Reference: 2 CFR § 200, Appendix II(F), 37 CFR 401
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FAA - 23 Seismic Safety
APPLICABILITY – Contract Types – This provision applies to construction of new buildings and additions to existing buildings financed in whole or in part through the Airport Improvement Program.
Professional Services– any contract involved in the construction of new buildings or structural addition to existing buildings.
Construction – any contract involved in the construction of new buildings or structural addition to existing buildings.
Equipment – if the project involves construction or structural addition to a building such as an electrical vault project to accommodate or install equipment.
Land – This provision will not typically apply to a property/land project.
REQUIREMENT -
A23.3.1 Professional Service Agreements for Design
SEISMIC SAFETY
In the performance of design services, the Consultant agrees to furnish a building design and associated construction specification that conform to a building code standard that provides a level of seismic safety substantially equivalent to standards as established by the National Earthquake Hazards Reduction Program (NEHRP). Local building codes that model their building code after the current version of the International Building Code (IBC) meet the NEHRP equivalency level for seismic safety.
At the conclusion of the design services, the Consultant agrees to furnish the Owner a “certification of compliance” that attests conformance of the building design and the construction specifications with the seismic standards of NEHRP or an equivalent building code.
A23.3.2 Construction Contracts
SEISMIC SAFETY
The Contractor agrees to ensure that all work performed under this contract, including work performed by subcontractors, conforms to a building code standard that provides a level of seismic safety substantially equivalent to standards established by the National Earthquake Hazards Reduction Program (NEHRP). Local building codes that model their code after the current version of the International Building Code (IBC) meet the NEHRP equivalency level for seismic safety.
Reference: 49 CFR Part 41
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FAA – 24 Tax Delinquency and Felony Conviction
APPLICABILITY – This provision applies to all contracts funded in whole or part with AIP.
REQUIREMENT -
The Contractor must have certified under the procurement process that resulted in the award of this contract that:
• Contractor has not been convicted of a Federal felony within the last 24 months; or • Contractor does not have any outstanding tax liability for which all judicial and administrative remedies have lapsed or been exhausted.
Reference: Sections 8113 of the Consolidated Appropriations Act, 2022 (Public Law 117-103), and similar provisions in subsequent appropriations acts.
DOT Order 4200.6 – Appropriations Act Requirements for Procurement and Non- Procurement Regarding Tax Delinquency and Felony Convictions
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FAA – 25 Termination of Contract
APPLICABILITY – All contracts and subcontracts in excess of $10,000.
REQUIREMENT -
See Section 4.5 of the Agreement.
Reference: 2 CFR § 200 Appendix II(B), FAA Advisory Circular 150/5370-10, Section 80-09
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FAA – 26 Foreign Trade Restriction
APPLICABILITY – all AIP funded projects.
REQUIREMENT -
TRADE RESTRICTION CERTIFICATION
By accepting this contract the Contractor certifies the following statements are true – 1) is not owned or controlled by one or more citizens of a foreign country included in the list of countries that discriminate against U.S. firms as published by the Office of the United States Trade Representative (USTR);
2) has not knowingly entered into any contract or subcontract for this project with a person that is a citizen or national of a foreign country included on the list of countries that discriminate against U.S. firms as published by the USTR; and 3) has not entered into any subcontract for any product to be used on the Federal project that is produced in a foreign country included on the list of countries that discriminate against U.S. firms published by the USTR.
This certification concerns a matter within the jurisdiction of an agency of the United States of America and the making of a false, fictitious, or fraudulent certification may render the maker subject to prosecution under Title 18 USC Section 1001.
The Contractor must provide immediate written notice to the City if the Contractor learns that its certification or that of a subcontractor was erroneous when submitted or has become erroneous by reason of changed circumstances. The Contractor must require subcontractors provide immediate written notice to the Contractor if at any time it learns that its certification was erroneous by reason of changed circumstances.
Unless the restrictions of this clause are waived by the Secretary of Transportation in accordance with 49 CFR 30.17, no contract shall be awarded to an Offeror or subcontractor:
1) who is owned or controlled by one or more citizens or nationals of a foreign country included on the list of countries that discriminate against U.S. firms published by the USTR or
2) whose subcontractors are owned or controlled by one or more citizens or nationals of a foreign country on such USTR list or
3) who incorporates in the public works project any product of a foreign country on such USTR list.
Nothing contained in the foregoing shall be construed to require establishment of a system of records in order to render, in good faith, the certification required by this provision. The knowledge and information of a contractor is not required to exceed that 1P - Page 75
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which is normally possessed by a prudent person in the ordinary course of business dealings.
The Contractor agrees it will incorporate this provision for certification without modification in all lower tier subcontracts. The Contractor may rely on the certification of a prospective subcontractor that it is not a firm from a foreign country included on the list of countries that discriminate against U.S. firms as published by USTR, unless the Contractor has knowledge that the certification is erroneous.
This certification is a material representation of fact upon which reliance was placed when making an award. If it is later determined that the Contractor or subcontractor knowingly rendered an erroneous certification, the Federal Aviation Administration (FAA) may direct through the City cancellation of the contract or subcontract for default at no cost to the City or the FAA.
Reference: 49 USC § 50104, 49 CFR part 30
1P - Page 76
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FAA – 27 Veteran’s Preference
APPLICABILITY – This provision applies to all AIP funded projects that involve labor to carry out the project. This preference, which excludes executive, administrative, and supervisory positions, applies to covered veterans [as defined under § 47112(c)] only when they are readily available and qualified to accomplish the work required by the project.
REQUIREMENT -
In the employment of labor (excluding executive, administrative, and supervisory positions), the Contractor and all sub-tier contractors must give preference to covered veterans as defined within Title 49 United States Code Section 47112. Covered veterans include Vietnam-era veterans, Persian Gulf veterans, Afghanistan-Iraq war veterans, disabled veterans, and small business concerns (as defined by 15 USC 632) owned and controlled by disabled veterans. This preference only applies when there are covered veterans readily available and qualified to perform the work to which the employment relates.
Reference: 49 USC § 47112(c)
1P - Page 77
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FAA – 28 Domestic Preferences for Procurements
APPLICABILITY – all contracts and Purchase orders for work or products under the grant.
REQUIREMENT -
The Contractor certifies by signing and submitting its bid or proposal that, to the greatest extent practicable, the Contractor has provided a preference for the purchase, acquisition, or use of goods, products, or materials produced in the United States (including, but not limited to, iron, aluminum, steel, cement, and other manufactured products) in compliance with 2 CFR § 200.322.
Reference: 2 CFR § 200.322; 2 CFR Part 200, Appendix II(L)
1P - Page 78
ATTACHMENT B
PUBLIC INTEGRITY BUSINESS DISCLOSURE
1P - Page 79
PUBLIC INTEGRITY DISCLOSURE
APPLICANT DISCLOSURE FORM
1. Name of Entity
2. Address of Entity (Principal Place of Business)
3. Local or California Address (if different than #2)
4. State where Entity is Registered with Secretary of State
If other than California, is the Entity also registered in California? Yes No
5. Type of Entity
Corporation Limited Liability Company Partnership Trust Other (please specify)
6. Officers, Directors, Members, Managers, Trustees, Other Fiduciaries (please specify) Note: If any response is not a natural person, please identify all officers, directors, members, managers and other fiduciaries for the member, manager, trust, or other entity
________________________ Officer Director Member Manager
[name] General Partner Limited Partner
Other
___________________________
_______________________________ Officer Director Member Manager [name] General Partner Limited Partner
Other
__________________________
________________________________ Officer Director Member Manager 209 W. 2nd St., Suite 309, Fort Worth, TX 76102
Paslay Management Group, LLC
Texas
R. Clay Paslay
President
Andrew Wehr
Treasurer and Secretary
56 1P - Page 80
[name] General Partner Limited Partner
Other
__________________________
7. Owners/Investors with a 5% beneficial interest in the Applicant Entity or a related entity
EXAMPLE
JANE DOE
[name of owner/investor]
50%, ABC COMPANY, Inc.
[percentage of beneficial interest in entity
and name of entity]
A.
[name of owner/investor]
[percentage of beneficial interest in entity
and name of entity]
B.
[name of owner/investor]
[percentage of beneficial interest in entity
and name of entity]
C.
[name of owner/investor]
[percentage of beneficial interest in entity
and name of entity]
D.
[name of owner/investor]
[percentage of beneficial interest in entity
and name of entity]
E.
[name of owner/investor] [percentage of beneficial interest in entity and name of entity]
I DECLARE UNDER PENALTY OF PERJURY UNDER THE LAWS OF THE STATE OF CALIFORNIA THAT THE FOREGOING IS TRUE AND CORRECT.
Signature of Disclosing Party, Printed Name, Title
Date
49.06% PMG, LLC
15.45% PMG, LLC
13.26% PMG, LLC
8.84% PMG, LLC
8.67% PMG, LLC
Keystone Capital Fund III, LP
Keystone Capital Fund III-A, LP
R. Clay Paslay
Paul Blue
Damle Consulting, Inc.
R. Clay Paslay, CEO and President
June 6, 2025
57 1P - Page 81
?~~
..____)
ATTACHMENT C
PASLAY GROUP PRESENTATION
1P - Page 82
AIRPORT COMMISSION
PALM SPRINGS INTERNATIONAL AIRPORT
Airport Program Management & Advisory Consulting Services S e p t e m b e r 1 7 , 2 0 2 5
1P - Page 83
2 PASLAY GROUP EXPERIENCE
19 years
airport consulting
experience
$44+ billion
in assets managed
50 airport engagements
since 2006
1P - Page 84
ANCHORAGE, AK (ANC)
SEATTLE, WA (SEA)
ST. PAUL, MN (MSPI
\
WESTCHESTER COUNTY , NY HPN
PITTSBURGH, PA
QUEENS , NY (JFK)
JACKSON, WY (JAC)
SACRAMENTO, CA (SMF) /
/ RENO , NV (RNO)
GRAND RAPIDS, Ml (GRR)
f
/
SAN FRANCISCO, CA (SFO)
LOS ANGELES, CA (LAX)
ONTARIO , CA (ONT)
OMAHA, NE (OMA)
PALM SPRINGS , CA (PSP)
PHOENIX , AZ (PHX)
/ / ALBUQUERQUE, NM (ABQ)
'SANTA ANA , CA (SNA)
SAN DIEGO , CA (SAN)
MINERAL WELLS, TX (MWL)
AUSTIN , TX (AUS)
SAN ANTONIO , TX (SAT)
/
I
CLEVELAND , OH (CLE)
KANSAS CITY, MO (MCI)
/ HEBRON , KY (CVG)
PHILADELPHIA , PA (PHL)
ROANOKE , VA (ROA)
.___ ST. LOUIS, MO {STL)
NASHVILLE , TN (BNA)
I
DALLAS, TX (DFW)
TAMPA, FL {TPA) /
FORT MYERS, FL (RSW)
RALEIGH , NC (RDU)
~ CHARLESTON, SC (CHS)
ATLANTA , GA {All)
-
e SAINT THOMAS {STT)
SAINT CROIX (STX)
3 WHAT WE DO
EXECUTIVE PROGRAM
MANAGMENT
BUSINESS ADVISORY
SERVICES
CONCESSIONS
CONSULTING
DEVELOPMENT
SERVICES
Supports airport owners
with planning
& implementing
complex capital
development
programs.
Provides enterprise-
level strategies to
increase revenue,
control costs, improve
performance, and
ensure long-term
success.
Assists owners in right-
sizing programs with
attention to space
planning,
programming, &
revenue generation.
Anticipates challenges
& provides solutions.
Aids in evaluating,
developing &
monetizing non-
aeronautical airport
real estate assets.
1P - Page 85
aim springs
INTERNATIONAL AIRPORT
AIR P OR T DAT E S VAL UE DE L IVE R Y
ME T HOD F T E s DE SCR IP T ION
ONT 2025 s tart $500M T B D 2.5 Support for redevelopm ent and evaluation of the practices and procedures for capital developm ent delivery.
P HX 2025 s tart $3.5B CMAR 1 Capital Im provem ent P rogram as s es s m ent.
SNA 2024-
pres ent $750M DB , CMAR ,
J OC 3.5 Capital Im provem ent P rogram planning, im plem entation and execution.
ST L 2023-
pres ent $3B CMAR 2 Cons olidated T erm inal P rogram , Airport P lanning & Developm ent Departm ent s taff augm entation.
CHS 2023-
pres ent $1B T B D 3.5 T erm inal expans ion, concours e developm ent.
CL E 2023-
pres ent $1.8B DB 4 T erm inal redevelopm ent, concours e replacem ent/ redevelopm ent, B HS, lands ide roadway, parking; future P 3 ConR AC in planning phas e.
CVG 2023-
pres ent $600M DB 3 T erm inal and concours e redevelopm ent.
ST T / ST X 2023-
pres ent $500M P3 1.25 T erm inal redevelopm ent program s for St. T hom as and St. Croix airports , Virgin Is lands P ort Authority.
B NA 2023-
pres ent $1.6B DB , CMAR 5
B NA New Horizon: 2-concours e expans ion with new air freight building, term inal roadway im provem ents , 4,700-s pace ConR AC, 8,000 additional parking s paces , and other upgrades .
P IT 2019-
pres ent $1.93B Agency
CM 5 700K SF new term inal, B HS, SSCP , Multi-Modal Com plex with 5-s tory, 3,300-s pace ConR AC, parking & roadways .
CUR R E NT E XE CUT IVE P R OGR AM MANAGE ME NT E NGAGE ME NT S 1P - Page 86
5 PROPOSED PASLAY GROUP APPROACH AT PSP
Startup
Evaluate the PSP situation in
collaboration with Aviation Department
staff
1 lead PG staff member
PG Planning team for 90 days
Draft implementation plan
Define how to implement the program
Organize the resources necessary for
delivery
Customized to PSP situation/need
Deliver in Collaboration with PSP
City leadership
Aviation Department staff
1P - Page 87
◊
◊
◊
◊
◊
◊
◊
◊
◊
◊
◊
IMPLEMENTATION PLANNING APPROACH
ASSESS THE
CLIENT’S
SITUATION
SELECT & CUSTOMIZE
PROJECT DELIVERY
METHOD
IMPLEMENTATION
PLAN
OPTIMIZE
MANAGEMENT
STRATEGY
• Objectives
• Capabilities
• Constraints
• Program
• Evaluate project
delivery methods
for fit with owner’s
situation.
• Customize
• Program
Governance
• Procurement
• Project Controls
• Invoicing &
Payments
• Reporting lines
• Owner’s staff with
capacity
• Augmentation staff
• Specialty
consultants
1P - Page 88
7 PASLAY GROUP’S VALUE PROPOSITION
We help owners optimize performance of airport development programs.
DEVELOPMENT
STRATEGY
TIMELY DELIVERY
AND
EFFICIENT
SYSTEMS
COORDINATED
DELIVERY
OF PROJECTS
EXECUTIVE-
DRIVEN
LEADERSHIP
PERFORMANCE
EVALUATION
1P - Page 89
aim springs
INTERNATIONAL AIRPORT
Paul Blue
Exec Vice President
[email protected]
Paslay Group
Kris Vogt
Operations Director
[email protected]
paslaygroup.com
1P - Page 90
ATTACHMENT D
AIRPORT'S PLANNED & ONGOING PROJECTS
2026 - 2030
1P - Page 91
Airport's Planned and Ongoing Projects
2026 - 2030
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1 Hanger 18 Outfall Repair ($500K)
2 Breach Gate Construction ($3,600,000)
3 Escalator - Design and Construction ($2,100,000)
4 Bono & Courtyard Restroom Design & Construction
($1.3M+$14M) $15.3M
5 Bus chargers and 3 battery electric buses ($4,300,000) 6 Auxiliary RAC Design & Construction ($1.125M + $15M)
$16.125M
7 Baggage Handling System ($90M)
8 Auxiliary Federal Inspection Services - Design and
Construction ($500K + $8) $8.5M
9 N. ConRAC Design ($5M)
10 Land Acquisition ($13M)
11 Runway Rehab. Design & Construction ($3M + $70M)
$73M
Calendar Year 30Line
Item Project Name: Calendar Year 26 Calendar Year 27 Calendar Year 28 Calendar Year 29 1P - Page 92
CITY COUNCIL STAFF REPORT
DATE: SEPTEMBER 25, 2025 CONSENT CALENDAR
SUBJECT: AWARD OF A CONSTRUCTION CONTRACT TO RESOURCE
ENVIRONMENTAL, INC. IN THE AMOUNT OF $2,243,559; APPROVAL OF A TASK ORDER UNDER ON-CALL AGREEMENT NO. 25Q187 TO
BERG & ASSOCIATES, INC . IN THE AMOUNT OF $295,683 FOR
CONSTRUCTION MANAGEMENT AND INSPECTION SERVICES ; AND
APPROVAL OF A TASK ORDER UNDER ON -CALL AGREEMENT NO.
23P041 WITH TSG ENTERPRISES, INC., DBA THE SOLIS GROUP, IN AN AMOUNT NOT TO EXCEED $ 10,890 TO PROVIDE COMMUNITY
WORKFORCE AGREEMENT ADMINISTRATION FOR WASTEWATER
TREATMENT PLANT VARIOUS DEMOLITIONS, CITY PROJECT 21-06
FROM: Scott C. Stiles, City Manager
BY: Engineering Services
SUMMARY:
Approval of this item will award a contract to Resource Environmental, Inc. and approve task orders for construction management and the community workforce agreement administration for the construction of the Wastewater Treatment Plant Various Demolitions, City Project 21-06 (“the Project”).
RECOMMENDATION:
1) Award a construction contract to Resource Environmental, Inc, in the amount of $2,243,559 for Wastewater Treatment Plant Various Demolitions, City Project 21- 06;
2) Delegate authority to the City Manager or designee to approve and execute construction contract change orders up to a total amount of $336,536 with all change orders reported to the City Council;
3) Authorize the City Manager or designee to approve a task order for project management services from an on -call construction management services firm, Berg & Associates, Inc., in an amount not to exceed $295,683; 4) Authorize the City Manager or designee to approve a task order for Community Workforce Agreement (CWA) administration services from an on -call CWA firm, The Solis Group, in an amount not to exceed $10,890; and 5) Authorize the City Manager or designee to execute all necessary documents. 1Q - Page 1
City Council Staff Report
September 25, 2025 -- Page 2
Award WWTP Various Demolition, City Project 21-06
BUSINESS PRINCIPAL DISCLOSURE:
The Public Integrity Disclosure forms are included as Attachment A.
BACKGROUND:
On September 22, 2020, City Staff issued a request for proposals from on -call firms for design, bid services, and construction phase services for various WWTP projects, including the demolition of abandoned facilities. Figure 1 indicates the facilities designated for demolition under the subject Project, with the entire worksite situated within the WWTP boundary.
Figure 1 – Site Facilities to be demolished
On November 4, 2021, the City Council reviewed and approved a purchase order to Carollo Engineers in an amount not to exceed $325,000 for design, bid phase services, and construction phase services for the subject Project.
On January 23, 2025, the City Council approved a task order to Carollo Engineers for $92,313 for additional professional services required to complete the design, including additional scope of work consisting of electrical modifications and enhanced utility location.
On June 25, 2025, the City Council approved the Plans, Specifications, and Estimate (PS&E) for the Project and authorized Staff to advertise the Project for demolition.
1Q - Page 2
City Council Staff Report
September 25, 2025 -- Page 3
Award WWTP Various Demolition, City Project 21-06
STAFF ANALYSIS:
This Project will demolish abandoned facilities at the WWTP site, a need that concurrently prepares the site for future expansion s and mitigates current health, safety, and operational risks.
The Project was advertised for bidding in The Desert Sun, industry plan rooms, and the PlanetBids™ electronic bid system on June 26, 2025.On August 7, 2025, three (3) bids were received as shown in Table 1 below:
Table 1
Contractor Location Bid Amount
Resource Environmental, Inc. Cerritos, California $2,243,559 Precision Works, Inc. Ventura, California $2,896,705
Interior Demolition Inc. Newhall, California $4,667,405 Note: There was only one (1) Bid Schedule (A). The totals above are based on Bid Schedule A.
Bid Protest
Section 7.03.10 “Protest Policy” of the Palm Springs Municipal Code (PSMC) provides bidders an opportunity to protest the City’s consideration of award to the apparent low bidder by filing a written protest within seven (7) calendar days of bid result posting. The purpose of the bid protest procedures is to protect the public interest.
On August 12, 2025, Precision Works , Inc . (Precision) filed a written bid protest, in accordance with Section 7.03.10 . In addition, JDK Demo Inc. (JDK), a subcontractor to Precision, also submitted a bid protest. In return, Resource Environmental, Inc. provided a response letter to this protest, refuting the claims.
The City Engineer, in consultation with the City Attorney, reviewed the bid protest letter, completed the independent legal analysis, and determined that the protest was without merit. The City Attorney and City Engineer recommend awarding the contract to Resource Environmental, Inc., the lowest responsive and responsible bidder. A copy of the bid protests, along with the City’s determination and responses, are included in Attachment B.
Bid Analysis
Staff reviewed all bid documents submitted by the apparent low bidder and determined that Resource Environmental, Inc (“the Contractor”) complies with the instructions to bidders and has submitted the lowest responsive and responsible bid in the amount of $2,243,559 which is comprised of the only Bid Schedule , B id Schedule A. Staff recommends that City Council approve the bid submitted by the Contractor. A copy of the proposed draft agreement is included as Attachment C.
1Q - Page 3
City Council Staff Report
September 25, 2025 -- Page 4
Award WWTP Various Demolition, City Project 21-06
Request for Proposals for Construction Management Services Staff sent a Request for Proposals (RFP) for Construction Management (CM) and Inspection services to its on-call consultants. The RFP outlined specific requirements to ensure that the selected firm possesses a proven track record and the capacity to deliver construction management and inspection services to municipal government agencies similar to those required by the City.
The general scope of work for the CM includes a full -time on -site individual who represents the City ; generates construction documents ; manages document control, coordination with stakeholders and utility companies ; coordinates meetings; schedules inspections; performs special inspections ; conducts project administration ; verifies quantities for invoicing ; verifies change order requests ; conducts independent cost analysis; and assists with project close out.
On July 16, 2025, the RFP was published and made available t hrough PlanetBids™ to the City’s on-call firms. On August 1 , 2025 , t he City received one proposal from the following CM firm shown on Table 2:
Table 2
Company Location Bid Amount
Berg & Associates, Inc. San Pedro, California $295,683
Following a formal review of the proposal, Staff recommends the City Council approve a task order to Berg & Associates, Inc. in an amount not to exceed $295,683.
Project Labor Agreement (PLA)
This Project is subject to the City’s Community Workforce (CWA) Agreement dated August 31, 2021, which is on file with the City Clerk. The Contractor and all Subcontractors of any tier are to include contractual provisions in all contracts into which they enter for the performance of the work requiring the Contractor and all Subcontractors to comply with the provisions of the PLA prior to the commencement of work. Under this agreement, the City is required to designate a CWA administrator. During an RFP for on- calls, the City awarded an on -call contract with TSG Enterprises, Inc., dba The Solis Group (TSG) for CWA administration. Staff recommends the City Council approve a task order in the amount of $10,890 under an On-Call Agreement for CWA Administration with TSG.
Local Business Preference Compliance
Section 7.03.08 of the Palm Springs Municipal Code (“PSMC”), “Local Business Preference Program”, requires prime contractors to use good faith efforts to subcontract the supply of materials and equipment to local business enterprises and to subcontract services to businesses whose workforce resides within Coachella Valley . Resource Environmental, Inc is not a local business but has demonstrated sufficient evidence of good faith efforts to subcontract the supply of materials to local businesses.
1Q - Page 4
City Council Staff Report
September 25, 2025 -- Page 5
Award WWTP Various Demolition, City Project 21-06
Time of Completion
The work shall be diligently performed to completion before the expiration of 130 working days from the issuance of a notice to proceed. Working days are defined as Monday through Friday, excluding weekends and City recognized holidays.
ENVIRONMENTAL ASSESSMENT:
Section 21084 of the California Public Resources Code mandates guidelines for implementing the California Environmental Quality Act (CEQA). In accordance with the California Environmental Quality Act (“CEQA”) Guidelines Section 15301 “Existing Facilities”, Class 1 projects consist of the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public structu res, facilities, mechanical equipment or topographical features involving negligible or no expansion of existing or former use. Therefore, Staff has determined that the Wastewater Treatment Plant Various Demolitions, City Project No. 21-06, is considered categorically exempt from CEQA.
ALIGNMENT WITH STRATEGIC PLANNING:
This Project aligns with City Council’s Strategic Plan Broad Goal of Infrastructure and Facilities.
FISCAL IMPACT:
The estimated construction and administrative costs to complete the Project are shown in Table 3 below. There is sufficient funding budgeted for this Project.
Table 3
Table of Project Costs Amount
Budgeted Funds $2,998,844.00
Project Administration ($112,178.00)
Construction Management & Inspection ($295,683.00)
Community Workforce Agreement / Administration ($10,890.00) Construction Contract ($2,243,559.00)
Contingency ($336,534.00)
Total: $0.00
REVIEWED BY:
City Engineer: Joel Montalvo
Director of Finance & Treasurer: Kristopher J. Mooney
Deputy City Manager: Flinn Fagg
City Attorney: Jeffrey Ballinger
City Manager: Scott Stiles
1Q - Page 5
City Council Staff Report
September 25, 2025 -- Page 6
Award WWTP Various Demolition, City Project 21-06
ATTACHMENTS:
A. Public Integrity Disclosures
B. Protest and Responses
C. Construction Agreement
D. Contractors Bid: https://publicportal.palmspringsca.gov/WebLink/DocView.aspx? id=1439238&dbid =0&repo=CityHall-Primary
1Q - Page 6
1Q - Page 7
Attachment A
1Q - Page 8
1. 2.
3. 4.
5. Name of Entity
PUBLIC INTEGRITY DISCLOSURE
APPLICANT DISCLOSURE FORM
Berg & Associates, Inc .
Address of Entity (Principle Place of Business)
302 W. 5th Street, Suite 210
San Pedro, CA 90731
Local or California Address (if different than #2)
51431 Avenida Navarro
La Quinta, CA 92253
State where Entity is Registered with Secretary of State California
If other than California, is the Entity also registered in California? n Yes n No Type of Entity
~ Corporation D Limited Liability Company D Partnership D Trust D Other (please specify)
6. Officers, Directors, Members, Managers, Trustees, Other Fiduciaries (please specify) Note: If any response is not a natural person, please identify all officers, directors, members, managers and other fiduciaries for the member, manager, trust or other entity Deborah Berg ~ Officer D Director D Member D Manager
[name]
D General Partner D Limited Partner
□ Other
Alicia Berg ~ Officer D Director D Member D Manager
[name]
D General Partner D Limited Partner
□ Other
Wendy Crawford ~ Officer D Director D Member D Manager
[name]
n General Partner n Limited Partner