Palmdale City Council
February 21, 2024

Exhibit A

“Outstanding CFD No. 2022-3 Bonds” means all CFD No. 2022-3 Bonds which are outstanding under and in accordance with the provisions of the Indenture. “Property Owner’s Association” or “POA” means any duly constituted property owner’s association. As used in this definition, a Property Owner’s Association includes any home-owner’s association, condominium owner’s association, master or sub-association or non-residential owner’s association.
“Property Owner’s Association Property” means any property within the boundaries of CFD No. 2022-3 which is (a) owned by a Property Owner’s Association or (b) designated with specific boundaries and acreage on a final subdivision map as Property Owner Association Property. "Proportionately" means, for Developed Property, that the ratio of the actual Special Tax levy to the Assigned Special Tax or the Backup Special Tax is equal. For Final Map Property, “Proportionately” means that the ratio of the actual Special Tax Levy to the Assigned Special Tax or the Backup Special Tax is equal. For Undeveloped Property, “Proportionately” means that the ratio of the actual Special Tax levy per Acre to the Maximum Special Tax per Acre is equal. “Public Property” means any property within the boundaries of CFD No. 2022-3 which (i) is owned by a public agency, (ii) has been irrevocably offered for dedication to a public agency, or (iii) is designated with specific boundaries and Acreage on a final subdivision map as property which will be owned by a public agency. For purposes of this definition, a public agency includes the federal government, the State, the County, the City, school districts, or any other governmental agency. “Rate and Method of Apportionment” means this Rate and Method of Apportionment of Special Taxes for CFD No. 2022-3.
“Residential Property” means all Assessor’s Parcels of Developed Property for which a Building Permit has been issued for purposes of constructing one or more residential Units. “Ritter Ranch Specific Plan” means Specific Plan 89-02 approved by the City on March 3, 1992 by Ordinance No. 964, as amended on October 11, 1995 by Ordinance No. 1076 (Specific Plan Amendment 95-1-RR).
“Single Family Residential Attached Property” means all Assessor’s Parcels of Residential Property for which a building permit(s) has been issued for (i) an attached residential structure or (ii) property with a single family attached designation according to the Ritter Ranch Specific Plan including detached and paired townhomes.
“Single Family Residential Detached Property” means all Assessor’s Parcels of Residential Property for which a building permit(s) has been issued for a detached residential structure intended as a single primary Unit.
"Special Tax(es)" means the special tax or special taxes to be levied in each Fiscal Year on each Assessor’s Parcel of Taxable Property within CFD No. 2022-3 to fund the Annual Special Tax Requirement.
"State" means the State of California.
"Taxable Property" means all the Assessor’s Parcels within the boundaries of CFD No. 2022-3 that are not exempt from the Special Tax pursuant to law or Section E below. “Taxable Property Owner Association Property” means all Assessors Parcels of Property Owner Association Property that are not exempt pursuant to Section E herein. “Taxable Public Property” means all Assessors Parcels of Public Property that are not exempt pursuant to Section E herein.

Resolution No. CC 2024-019
February 21, 2024

Exhibit A

"Trustee" means the trustee or fiscal agent or paying agent acting as such under the applicable Indenture.
“Undeveloped Property” means, for each Fiscal Year, all Taxable Property not classified as Developed Property, Final Map Property, Taxable Property Owner Association Property, or Taxable Public Property.
“Unit” means (i) for Single Family Residential Attached Property, an individual single family attached residential unit or property with a single family attached designation according to the Ritter Ranch Specific Plan, (ii) for Single Family Residential Detached Property, an individual single family detached residential unit. The number of Units assigned to each Assessor’s Parcel may be determined by (i) referencing Assessor’s Data, (ii) site surveys and physical unit counts, and/or (iii) other research by the CFD Administrator.
“Welfare Exempt Property” means, in any Fiscal Year, all Parcels within the boundaries of CFD No. 2022-3 that (a) have been granted a welfare exemption by the County under subdivision (g) of Section 214 of the Revenue and Taxation Code indicated in the Assessor’s Data finalized as of January 1 of the previous Fiscal Year, and (b) are exempt from the Special Tax pursuant to Section 53340(c) of the Act. Pursuant to Section 53340(c) of the Act, after the issuance of the first series of CFD No. 2022-3 Bonds, as applicable, any Assessor’s Parcels that received a welfare exemption under subdivision (g) of Section 214 of the Revenue and Taxation Code shall not be classified as Welfare Exempt Property and will be subject to the Special Tax.

B. ASSIGNMENT TO LAND USE CATEGORIES
Each Fiscal Year, the CFD Administrator shall determine the Assessor’s Parcel Numbers for all Taxable Property within CFD No. 2022-3 for the then-current Fiscal Year. To the extent a Parcel or Parcels of Taxable Property are subdivided, consolidated, or otherwise reconfigured, the Maximum Special Tax shall be assigned to the new Assessor’s Parcels Numbers pursuant to Section C. The CFD Administrator shall also determine: (i) which Parcels are Developed Property, Final Map Property, Undeveloped Property, Taxable Property Owner Association Property and Taxable Public Property; (ii) the number of Units or Acreage each Parcel contains; (iii) the property type, i.e., Single Family Residential Attached Property, Single Family Residential Detached Property, Accessory Dwelling Unit, Non-Residential Property, etc.; and (iv) the Annual Special Tax Requirement for the Fiscal Year. The Assigned Special Tax for Single Family Residential Attached Property shall be based on the number of Units on such Assessor’s Parcel and the Building Square Feet of the Units located on such Assessor’s Parcel. The Assigned Special Tax for Single Family Detached Property shall be based on the number of Units on such Assessor’s Parcel, the Building Square Feet of the Units located on such Assessor’s Parcel, and the Lot Square Feet of such Assessor’s Parcel. The Assigned Special Tax for Non-Residential Property, Taxable Property Owner Association Property and Taxable Public Property shall be based on the Acreage of the Assessor’s Parcel.

C. MAXIMUM SPECIAL TAX RATES

1. Developed Property
The Maximum Special Tax for each Assessor’s Parcel of Developed Property shall be the greater of (i) the amount derived by application of the Assigned Special Tax or (ii) the amount derived by application of the Backup Special Tax.
a. Assigned Special Tax
The Assigned Special Tax for each Assessor’s Parcel of Developed Property is shown in Tables 1 and 2.

Resolution No. CC 2024-019
February 21, 2024

Exhibit A

TABLE 1

ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
FINAL SUBDIVISION MAP FOR TRACTS: 51604, 51605, 51606
FISCAL YEAR 2023/24
Land
Use
Class Description
Building Square
Feet Lot Square Feet Assigned
Special Tax
1-A Single Family Attached Property >= 1,900 BSF N/A $2,112 per Unit 2-A Single Family Attached Property < 1,900 BSF N/A $1,644 per Unit 1-B Single Family Detached Property >= 2,600 BSF <= 5,999 LSF $3,025 per Unit 2-B Single Family Detached Property =2,300 - < 2,600 BSF <= 5,999 LSF $2,708 per Unit 3-B Single Family Detached Property < 2,300 BSF <= 5,999 LSF $2,580 per Unit 1-C Single Family Detached Property >= 3,300 BSF > 5,999 - = 6,999 LSF $3,215 per Unit
2-C Single Family Detached Property =3,000 - < 3,300 BSF > 5,999 - = 6,999 LSF $2,950 per Unit
3-C Single Family Detached Property < 3,000 BSF > 5,999 - = 6,999 LSF $2,813 per Unit
1-D Single Family Detached Property >= 3,300 BSF > 6,999 LSF $3,332 per Unit 2-D Single Family Detached Property < 3,300 BSF > 6,999 LSF $3,190 per Unit 1-E Accessory Dwelling Unit N/A N/A See below
2-E Non-Residential Property N/A N/A $22,531 per
Acre
The Assigned Special Tax for an Accessory Dwelling Unit shall be calculated as a percentage of the Assigned Special Tax for the primary Unit the ADU is accessory to, based on Building Square Footage. For example, if a primary Unit in Land Use Class 1-A of 2,000 BSF has an ADU of 800 BSF, the Assigned Special Tax for the ADU shall be calculated by the following steps:

1. 800 BSF / 2,000 BSF = 0.40 or 40%

2. $2,112 Special Tax per Unit x 40% = $844.80 Assigned Special Tax for such ADU Resolution No. CC 2024-019
February 21, 2024

Exhibit A

TABLE 2

ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
FINAL SUBDIVISION MAP FOR TRACTS: 52093, 51607, 52116, 63145-1, 63145-2, 5W-4/5X-3 FISCAL YEAR 2023/24
Land
Use
Class Description
Building Square
Feet Lot Square Feet Assigned
Special Tax
1-A Single Family Attached Property >= 1,900 BSF N/A $2,588 per Unit 2-A Single Family Attached Property < 1,900 BSF N/A $2,057 per Unit 1-B Single Family Detached Property >= 2,600 BSF <= 5,999 LSF $3,383 per Unit 2-B Single Family Detached Property =2,300 - < 2,600 BSF <= 5,999 LSF $3,049 per Unit 3-B Single Family Detached Property < 2,300 BSF <= 5,999 LSF $2,651 per Unit 1-C Single Family Detached Property >= 3,300 BSF > 5,999 - = 6,999 LSF $4,088 per Unit
2-C Single Family Detached Property =3,000 - < 3,300 BSF > 5,999 - = 6,999 LSF $3,823 per Unit
3-C Single Family Detached Property < 3,000 BSF > 5,999 - = 6,999 LSF $3,425 per Unit
1-D Single Family Detached Property >= 3,300 BSF > 6,999 LSF $3,419 per Unit 2-D Single Family Detached Property < 3,300 BSF > 6,999 LSF $3,881 per Unit 1-E Accessory Dwelling Unit N/A N/A See below
2-E Non-Residential Property N/A N/A $22,531 per Acre
The Assigned Special Tax for an Accessory Dwelling Unit shall be calculated as a percentage of the Assigned Special Tax for the primary Unit the ADU is accessory to, based on Building Square Footage. For example, if a primary Unit in Land Use Class 1-A of 2,000 BSF has an ADU of 800 BSF, the Assigned Special Tax for the ADU shall be calculated by the following steps:

1. 800 BSF / 2,000 BSF = 0.40 or 40%
$2,588 Assigned Special Tax per Unit x 40% = $1,035.20 Assigned Special Tax for such ADU
b. Backup Special Tax
The Fiscal Year 2023/24 aggregate Backup Special Tax attributable to property within a Final Subdivision Map will equal $22,531 multiplied by the Acreage of all Taxable Property located within such Final Subdivision Map, excluding Acreage associated with current or expected Taxable Public Property and Taxable Property Owner Association Property.

Resolution No. CC 2024-019
February 21, 2024

Exhibit A

The Backup Special Tax for each Assessor’s Parcel of Residential Property in a Final Subdivision Map shall be computed by dividing the aggregate Backup Special Tax attributable to all Assessor’s Parcels of Taxable Property for which building permits for residential construction have or may be issued, as determined in the preceding paragraph, by the number of such Assessor’s Parcels (i.e., the number of residential lots).

Notwithstanding the foregoing, if all or any portion of a Final Subdivision Map is subsequently changed or modified, then the Backup Special Tax for each Assessor’s Parcel of Residential Property in such Final Subdivision Map, or the portion thereof that is changed or modified, shall be a rate per Acre calculated as follows:

1. Determine the total Backup Special Taxes anticipated to apply to the changed or modified portion of the Final Subdivision Map prior to the change or modification.

2. Divide the amount determined pursuant to paragraph 1 above by the total Acreage of Residential Property excluding Taxable Public Property and Taxable Property Owner Association Property which is ultimately expected to exist in such changed or modified Final Subdivision Map area, as reasonably determined by the CFD Administrator.

The result is the Backup Special Tax per Acre which shall be applicable to all Assessor's Parcels of Residential Property in such changed or modified Final Subdivision Map. c. Increase in the Assigned Special Tax and Backup Special Tax On each July 1, commencing on July 1, 2024 and ending on 2038/39, the Assigned Special Tax and the Backup Special Tax for Developed Property and Final Map Property shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year.
d. Multiple Land Use Classes
In some instances, an Assessor’s Parcel of Developed Property may contain more than one Land Use Class. The Special Tax levied on an Assessor’s Parcel shall be the sum of the Special Tax for all Land Use Classes located on that Assessor’s Parcel.

2. Final Map Property, Undeveloped Property, Taxable Property Owner Association Property, and Taxable Public Property
a. Maximum Special Tax
The Maximum Special Tax for each Assessor’s Parcel of Final Map Property, Undeveloped Property, Taxable Property Owner Association Property, and Taxable Public Property shall be $22,531 per Acre in Fiscal Year 2023/24.
b. Increase in the Maximum Special Tax
On each July 1, commencing on July 1, 2024 and ending on 2038/39, the Maximum Special Tax for Final Map Property, Undeveloped Property, Taxable Property Owner Association Property, and Taxable Public Property shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year.

D. METHOD OF APPORTIONMENT OF THE SPECIAL TAXES
Commencing with Fiscal Year 2023/24 and for each following Fiscal Year, the CFD Administrator shall determine the Annual Special Tax Requirement and shall levy the Special Tax until the amount of the Special Tax levied equals the Annual Special Tax Requirement. The Special Tax shall be levied each Fiscal Year as follows:

Resolution No. CC 2024-019
February 21, 2024

Exhibit A

First: The Special Tax shall be levied Proportionately on each Assessor's Parcel of Developed Property at a rate up to 100% of the applicable Assigned Special Tax to satisfy the Annual Special Tax Requirement.

Second: If additional monies are needed to satisfy the Annual Special Tax Requirement after the first step has been completed, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Final Map Property at a rate up to 100% of the Maximum Special Tax for Final Map Property to satisfy the Annual Special Tax Requirement.

Third: If additional monies are needed to satisfy the Annual Special Tax Requirement after the second step has been completed, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Undeveloped Property at a rate up to 100% of the Maximum Special Tax for Undeveloped Property to satisfy the Annual Special Tax Requirement.

Fourth: If additional monies are needed to satisfy the Annual Special Tax Requirement after the first three steps have been completed, then the levy of the Special Tax on each Assessor’s Parcel of Developed Property whose Maximum Special Tax is determined through the application of the Backup Special Tax shall be increased in equal percentages from the applicable Assigned Special Tax up to 100% of the Maximum Special Tax for each such Assessor’s Parcel to satisfy the Annual Special Tax Requirement.

Fifth: If additional monies are needed to satisfy the Annual Special Tax Requirement after the first four steps have been completed, the Special Tax shall be levied on each Assessor’s Parcel of Taxable Property Owner Association Property at a rate up to 100% of the Maximum Special Tax for Taxable Property Owner Association Property to satisfy the Annual Special Tax Requirement.

Sixth: If additional monies are needed to satisfy the Annual Special Tax Requirement after the first five steps have been completed, then the Special Tax shall be levied Proportionately on all Taxable Public Property at a rate up to 100% of the Maximum Special Tax for Taxable Public Property to satisfy the Annual Special Tax Requirement.

E. EXEMPTIONS

1. No Special Tax shall be levied on up to 35.20 Acres of Property Owner Association Property, and up to 120.70 Acres of Public Property. Tax-exempt status will be assigned by the CFD Administrator in the chronological order in which property becomes Property Owner Association Property, or Public Property.

2. Property Owner Association Property, that is not exempt from the Special Tax under this section, or pursuant to the Act, shall be classified as Taxable Property Owner Association Property. Taxable Property Owner Association Property shall be subject to the levy of the Special Tax and shall be taxed Proportionately as part of the fifth step in Section D above, at up to 100% of the applicable Maximum Special Tax for Taxable Property Owner Association Property.

3. Public Property, that is not exempt from the Special Tax under this section, or pursuant to the Act, shall be classified as Taxable Public Property. Taxable Public Property shall be subject to the levy of the Special Tax and shall be taxed Proportionately as part of the sixth step in Section D above, at up to 100% of the applicable Maximum Special Tax for Taxable Public Property.

4. No Special Tax shall be levied on any Assessor’s Parcel in any Fiscal Year in which such Assessor’s Parcel is classified as Welfare Exempt Property.

Resolution No. CC 2024-019
February 21, 2024

Exhibit A

F. APPEAL OF SPECIAL TAX LEVY
Any property owner may file a written appeal of the Special Tax with the CFD Administrator claiming that the amount or application of the Special Tax is not correct with respect to one or more specific Assessor’s Parcels. The appeal must be filed not later than one calendar year after having paid the Special Tax that is disputed, and the appellant must be current in all payments of the Special Taxes theretofore levied on the Assessor’s Parcel(s). In addition, during the term of the appeal process, all Special Tax levied must be paid for the subject Assessor’s Parcel(s) prior to delinquency.

The appeal must specify the reasons why the appellant claims the Special Tax is in error. The CFD Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the appellant of its determination.

If the property owner disagrees with the CFD Administrator’s decision relative to the appeal, the owner may then file a written appeal with the City Council whose subsequent decision shall be final and binding on all interested parties. If the decision of the CFD Administrator or subsequent decision by the City requires the Special Tax to be modified or changed in favor of the property owner, then an adjustment shall be made to credit future Special Taxes.

This procedure shall be exclusive and its exhaustion by any property owner shall be a condition precedent to filing any legal action by such owner.

G. INTERPRETATION OF RATE AND METHOD OF APPORTIONMENT
The City may, by resolution or ordinance, interpret, clarify and/or revise this Rate and Method of Apportionment to correct any inconsistency, vagueness, or ambiguity as it relates to the Special Taxes, method of apportionment, classification of Assessor’s Parcels, or any definition used herein, as long as once CFD No. 2022-3 Bonds have been issued such correction does not materially adversely affect the levy and collection of Special Taxes on any Assessor’s Parcel needed to repay the CFD No. 2022-3 Bonds. In addition, the interpretation and application of any section of this document shall be at the CFD Administrator’s discretion.

H. MANNER OF COLLECTION
The Special Taxes shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, that the CFD Administrator may directly bill the Special Tax, may collect the Special Tax at a different time or in a different manner if needed to meet the financial obligations of CFD No. 2022-3. The City may covenant to foreclose and may actually foreclose or cause an action for foreclosure to be prosecuted in respect of Assessor's Parcels of Taxable Property that are delinquent in the payment of the Special Tax.

I. PREPAYMENT OF SPECIAL TAX
The following definitions apply to this Section I:
“Authorized Facilities” means the public facilities authorized to be financed, in whole or in part, by CFD No. 2022-3.
“Buildout” means the state of maximum development of CFD No. 2022-3 and any property annexed thereto, based on plans and anticipated development. "CFD Public Facilities Cost" means $66.1 million for CFD No. 2022-3, expressed in 2022 dollars, which shall increase by the annual percentage change in the Construction Inflation Index on July 1, 2023 and on each July 1 thereafter, or such lower number as (i) shall be determined by the CFD Administrator as sufficient to provide the public facilities to be provided by CFD No. 2022- 3 under the authorized bonding program for CFD No. 2022-3, or (ii) shall be determined by the City Council concurrently with a covenant that it will not issue any more Bonds to be supported by Special Taxes levied under this Rate and Method of Apportionment as described in Section D.

Resolution No. CC 2024-019
February 21, 2024

Exhibit A

"Construction Inflation Index" means the annual percentage change in the Engineering News- Record Building Cost Index for the City of Los Angeles, measured as of the calendar year which ends in the previous Fiscal Year, but not less than zero percent. In the event this index ceases to be published, the Construction Inflation Index shall be another index as determined by the City that is reasonably comparable to the Engineering News-Record Building Cost Index for the City of Los Angeles.
"Future Facilities Costs" means, as of the date of prepayment, the CFD Public Facilities Costs minus the proceeds of any Previously Issued CFD No. 2022-3 Bonds which were, at the time of issuance, available to the City for Authorized Facilities. "Previously Issued CFD No. 2022-3 Bonds" means all Outstanding CFD No. 2022-3 Bonds that have been issued by CFD No. 2022-3 prior to the date of prepayment.

1. Prepayment in Full
The Special Tax obligation of an Assessor's Parcel of Developed Property, Taxable Public Property, Final Map Property, or Undeveloped Property for which a Building Permit has been issued, may be prepaid and permanently satisfied as described herein; provided that there are no delinquent installments of the Special Tax with respect to such Assessor's Parcel at the time of prepayment. An owner of an Assessor's Parcel intending to prepay the Special Tax obligation shall provide the CFD Administrator with written notice of intent to prepay. Within 45 days of receipt of such written notice, the CFD Administrator shall notify such owner of the prepayment amount for such Assessor's Parcel. Prepayment must be made not less than 75 days prior to the next occurring date that notice of redemption of Outstanding CFD No. 2022-3 Bonds, if any. Proceeds of such prepayment may be given to the Trustee pursuant to the Indenture. If a prepayment is made prior to the issuance of CFD No. 2022-3 Bonds, the Redemption Premium, Interest Amount, Reserve Fund Credit and Capitalized Interest Credit as calculated below, shall be zero. The CFD Administrator may charge the property owner requesting a prepayment calculation a fee for providing this service.

The Special Tax Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined below):

Bond Redemption Amount
Plus Future Facilities Amount
plus Redemption Premium
plus Interest Amount
plus Administrative Fees and Expenses
less Reserve Fund Credit
less Capitalized Interest Credit
Total: equals Special Tax Prepayment Amount
As of the proposed date of prepayment, the Special Tax Prepayment Amount (defined below) shall be calculated by the CFD Administrator as follows:

Step Number:

1. Confirm that no Special Tax delinquency apply to such Assessor’s Parcel, and if delinquencies are applicable compute all amounts due, including interest and penalties.

Resolution No. CC 2024-019
February 21, 2024

Exhibit A

2. For Assessor’s Parcels of Developed Property and Taxable Public Property compute the Assigned Special Tax and Backup Special Tax. For Assessor’s Parcels of Final Map Property, and Undeveloped Property to be prepaid, compute the Assigned Special Tax and Backup Special Tax for that Assessor’s Parcel as though it was already designated as Developed Property, based upon the building permits issued for that Assessor’s Parcel.

3. a. Divide the Assigned Special Tax computed pursuant to Step 2 by the total estimated Assigned Special Tax for CFD No. 2022-3 based on the Developed Property Special Tax which could be charged in the current Fiscal Year on all expected development through Buildout of CFD No. 2022-
b. Divide the Backup Special Tax computed pursuant to Step 2 by the total estimated Backup Special Tax for CFD No. 2022-3 based on the Developed Property Special Tax which could be charged in the current Fiscal Year on all expected development through Buildout of CFD No. 2022-
c. Determine which quotient computed pursuant to Step 3.a or 3.b is larger (the “Maximum Special Tax Percentage”).

4. Multiply the Maximum Special Tax Percentage by the Outstanding CFD No. 2022-3 Bonds to compute the principal amount of Outstanding CFD No. 2022-3 Bonds to be redeemed (the “Bond Redemption Amount”).

5. Compute the Future Facilities Costs.

6. Multiply the Maximum Special Tax Percentage by the total Future Facilities Costs to compute the Future Facilities amount to be prepaid (the “Future Facilities Amount”).

7. Multiply the Bond Redemption Amount computed pursuant to Step 4 by the applicable redemption premium, if any, on the Outstanding CFD No. 2022-3 Bonds to be redeemed (the "Redemption Premium") determined by reference to the Indenture.

8. Compute the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding CFD No. 2022-3 Bonds (the “ Interest Amount”).

9. Verify the administrative fees and expenses, including the costs of computation of the prepayment, the costs to invest the prepayment proceeds, the costs of redeeming the Outstanding CFD No. 2022-3 Bonds, and the costs of recording any notices to evidence the prepayment and the redemption (the “Administrative Fees and Expenses”).

10. If reserve funds for the Outstanding CFD No. 2022-3 Bonds held under the Indenture, if any, are at or above 100% of the then reserve requirement (as required by the Indenture) on the prepayment date, a reserve fund credit shall be calculated as a reduction in the applicable reserve requirement for the Outstanding CFD No. 2022-3 Bonds to be redeemed pursuant to the prepayment (the " Reserve Fund Credit" ). No Reserve Fund Credit shall be granted if reserve funds are below 100% of the applicable reserve requirement on the prepayment date or if the Reserve Fund is satisfied by a credit instrument rather than cash funded.

11. If any capitalized interest for the Outstanding CFD No. 2022-3 Bonds will not have been expended at the time of the first interest and/or principal payment following the current Fiscal Year, a capitalized interest credit shall be calculated by multiplying the Maximum Special Tax Percentage by the expected balance in the capitalized interest fund after such first interest and/or principal payment (the "Capitalized Interest Credit").

Resolution No. CC 2024-019
February 21, 2024

Exhibit A

12. The Special Tax prepayment is equal to the sum of the amounts computed pursuant to Steps 4, 6, 7, 8 and 9 less the amount computed pursuant to Steps 10 and 11 (the " Prepayment Amount").

13. From the Prepayment Amount, the amounts computed pursuant to Step 6 shall be used by the City to pay for Future Facilities Costs. The amounts computed pursuant to Steps 4, 6, 7 and 8 shall be deposited into the appropriate fund as established under the Indenture and be used to redeem Outstanding CFD No. 2022-3 Bonds or make Debt Service payments. The amount computed pursuant to Step 9 shall be retained by the City for the payment of Administrative Fees and Expenses.

The Special Tax Prepayment Amount may be sufficient to redeem other than a $5,000 increment of Outstanding CFD No. 2022-3 Bonds. In such cases, the increment above $5,000 or integral multiple thereof will be retained in the appropriate fund established under the Indenture to be used with the next prepayment of Outstanding CFD No. 2022-3 Bonds or to make Debt Service payments.

Current year Special Taxes that are not yet paid will remain outstanding and will be collected in the manner billed. With respect to any Assessor's Parcel that is prepaid, the CFD Administrator shall cause a suitable notice to be recorded in compliance with the Act to indicate the prepayment of the Special Tax and the obligation of such Assessor's Parcel satisfied.

Notwithstanding the foregoing, no prepayment will be allowed unless the Maximum Special Tax that may be levied on Taxable Property both prior to and after the proposed prepayment is at least

1.1 times the maximum annual Debt Service on all Outstanding CFD No. 2022-3 Bonds plus annual Administrative Expenses, as reasonably estimated by the CFD Administrator.

2. Prepayment in Part
The Special Tax may be partially prepaid, provided that a partial prepayment may be made only after all authorized CFD No. 2022-3 Bonds have been issued and only for Assessor’s Parcels of Developed Property, Final Map Property, Taxable Public Property and Undeveloped Property for which a Building Permit has been issued and only if there are no delinquent Annual Special Taxes with respect to such Assessor's Parcel at the time of partial prepayment. The amount of the prepayment shall be calculated as in Section I.1; except that a partial prepayment shall be calculated by the CFD Administrator according to the following formula:

PP = PE x F.

These terms have the following meaning:

PP = the partial prepayment
PE = the Special Tax Prepayment Amount calculated according to Section I.1 F = the Maximum Special Tax Percentage
The Special Tax partial prepayment amount must be sufficient to redeem at least a $5,000 increment of Bonds.

The owner of any Assessor’s Parcel who desires such partial prepayment shall notify the CFD Administrator of such owner’s intent to partially prepay the Special Tax and the percentage by which the Special Tax shall be prepaid. The CFD Administrator shall provide the owner with a statement of the amount required for the partial prepayment of Resolution No. CC 2024-019
February 21, 2024

Exhibit A

the Special Tax for an Assessor’s Parcel within 45 days of the request and may charge a fee for providing this service. With respect to any Assessor’s Parcel that is partially prepaid, the CFD Administrator shall (i) distribute the
prepayment funds remitted according to Section I.1, and (ii) indicate in the records of CFD No. 2022-3 that there has been a partial prepayment of the Special Tax and that a portion of the Special Tax with respect to such Assessor’s Parcel, equal to the outstanding percentage (1.00 - F) of the remaining Maximum Special Tax, shall continue to be levied on such Assessor’s Parcel pursuant to Section D.

J. SPECIAL TAX REDUCTION
The following definitions apply to this Section J:
"Issuance Date” means the date a bond purchase contract related to the sale of the CFD No. 2022-3 Bonds is entered into between the purchaser of the CFD No. 2022-3 Bonds and CFD No. 2022-3.
“Plan Type” means a discrete residential plan type (generally consisting of residential dwelling units that share a common product type (e.g., detached, condominium) and that have nearly identical amounts of living area) that is constructed or expected to be constructed within CFD No. 2022-3 as identified in the Price Point Study.
“Price Point Consultant” means any consultant or firm of such consultants selected by the City that (a) has substantial experience in performing price point studies for residential units within community facilities districts or otherwise estimating or confirming pricing for residential units in community facilities districts, (b) has recognized expertise in analyzing economic and real estate data that relates to the pricing of residential units in community facilities districts, (c) is in fact independent and not under the control of CFD No. 2022-3 or the City, (d) does not have any substantial interest, direct or indirect, with or in (i) CFD 2022-3, (ii) the City, (iii) any owner of real property in CFD No. 2022-3, or (iv) any real property in CFD No. 2022-3, and (e) is not connected with CFD No. 2022-3 or the City as an officer or employee thereof, but who may be regularly retained to make reports to CFD No. 2022-3 or the City. “Price Point Study” means a price point study or a letter updating a previous price point study prepared by the Price Point Consultant which (a) sets forth the Plan Types constructed or expected to be constructed within CFD No. 2022-3, (b) sets forth the estimated number of constructed and expected residential dwelling units for each Plan Type, (c) sets forth such Price Point Consultant’s estimate of the Price Point for each Plan Type and (d) uses a date for establishing such Price Points that is no earlier than 30 days and no later than 180 days prior to the date the Price Point Study is delivered to the CFD Administrator pursuant to Section C herein. "Total Effective Tax Rate” means, for a Plan Type, the quotient of (a) the Total Tax Burden for such Plan Type divided by (b) the Price Point for such Plan Type, converted to a percentage. “Total Tax Burden” means, for any Unit of Single Family Residential Property, the sum of the Assigned Special Tax, together with ad valorem property taxes, special assessments, special taxes for any overlapping community facilities district, and any other taxes, fees and charges, and excluding services charges such as sewer and trash, which are collected by the County via property tax bills and which are payable from and secured by the property, assuming such Unit of Single Family Residential Property has been completed, sold and subject to such levies and impositions.

Resolution No. CC 2024-019
February 21, 2024

Exhibit A

Special Tax Reduction Calculation
Prior to the issuance of the first series of CFD No. 2022-3 Bonds, the following steps shall be taken for each Land Use Class of Residential Property in CFD No. 2022-3:

1. At least 30 days prior to the expected Issuance Date of the first series of CFD No. 2022-3 Bonds, CFD No. 2022-3 shall cause a Price Point Study to be delivered to the CFD Administrator.

2. As soon as practicable after receipt of the Price Point Study, the CFD Administrator shall calculate the Total Tax Burden and Total Effective Tax Rate for each Plan Type.

3. Separately, for each Land Use Class of Residential Property, the CFD Administrator shall determine whether or not the Total Effective Tax Rate for all Plan Types in a Land Use Class is less than or equal to 2.00%.
a. If the Total Effective Tax Rate for all Plan Types in a Lands Use Class is less than or equal to 2.00%, then there shall be no change in the Assigned Special Tax for such Land Use Class.
b. If the Total Effective Tax Rate for any Plan Type in a Land Use Class is greater than

2.00%, the CFD Administrator shall calculate a revised Assigned Special Tax for such Land Use Class which revised Assigned Special Tax shall be the highest amount (rounded to the nearest whole dollar) that will not cause the Total Effective Tax Rate for any Plan Type in such Land Use Class to exceed 2.00%. c. For each Land Use Class group (i.e., A, B, C or D) as shown in Table 1 or Table 2, if the revised Assigned Special Tax amounts result in a situation in which the Assigned Special Tax for a particular Land Use Class of Residential Property would be less than the Assigned Special Tax for the numerical Land Use Class of Residential Property directly above it for such Land Use Class (e.g., the Assigned Special Tax for Land Use Class 1-B is less than the Assigned Special Tax for Land Use Class 2-B), then the Assigned Special Tax for the higher numbered Land Use Class shall be revised to be equal to the Assigned Special Tax for the lower numbered Land Use Class (i.e., the Assigned Special Tax for Land Use Class 2-B shall be revised to be equal to the updated Assigned Special Tax for Land Use Class 1-B).

4. If the Assigned Special Tax for any Land Use Class is revised pursuant to step 3.b. or 3.c. above, the CFD Administrator shall calculate a revised Backup Special Tax for all property.

The revised Backup Special Tax per Acre shall be an amount (rounded to the nearest whole dollar) equal to the Backup Special Tax per Acre as set forth in Section C above, reduced by a percentage equal to the weighted average percentage reduction in the Assigned Special Taxes for all Land Use Classes of Residential Property resulting from the calculations in steps 3.a. through 3.c. above. The weighted average percentage will be calculated by taking the sum of the products of the number of units constructed or expected to be constructed in each Land Use Class multiplied by the percentage change in the Assigned Special Tax (pursuant to step 3.b. or 3.c. above) for each Land Use Class (or 0 for Land Use Classes that are not changing). This amount is then divided by the total number of units constructed or expected to be constructed and converted to a percentage.

5. If the Assigned Special Tax for any Land Use Class is revised pursuant to step 3.b. or 3.c. above, the CFD Administrator shall prepare and execute a Certificate of Reduction in Special Taxes substantially in the form of Attachment A hereto and shall deliver such Certificate of Reduction in Special Taxes to CFD No. 2022-3. The Certificate of Reduction in Special Taxes shall be completed for all Land Use Classes and shall set forth, as applicable, either (i) the reduced Assigned Special Tax for a Land Use Class as calculated Resolution No. CC 2024-019
February 21, 2024

Exhibit A

pursuant to step 3.b. or 3.c., or (ii) the Assigned Special Tax as identified in Table 1 or Table 2 in Section C for a Land Use Class that was not revised as determined pursuant to step 3.a.; as well as either (i) the revised Backup Special Tax as calculated pursuant to step 4, or (ii) the Backup Special Tax as identified in in Section C.1.(b) that was not revised as determined pursuant to step 4.

6. If the Issuance Date of the first series of CFD No. 2022-3 Bonds is within 120 days of the date of receipt of the Price Point Study by the CFD Administrator, CFD No. 2022-3 shall execute the acknowledgement on such Certificate of Reduction in Special Taxes, dated as of the closing date of such Bonds, and upon the closing of such first series of Bonds, the Assigned Special Tax for each Land Use Class and the Backup Special Tax shall be, for all purposes, as set forth in such Certificate of Reduction in Special Taxes. If the Issuance Date of the first series of Bonds is not within 120 days of the date of receipt of the Price Point Study by the CFD Administrator, such Certificate of Reduction in Special Taxes shall not be acknowledged by CFD No. 2022-3 and shall, as of such date, be void and of no further force and effect. In such case, if subsequently a first series of CFD No. 2022-3 Bonds is expected to be issued, at least 30 days prior to the expected Issuance Date of such first series of CFD No. 2022-3 Bonds, the CFD Administrator shall cause a new Price Point Study to be delivered to the CFD Administrator and, following such delivery, steps 2 through 5 of this section shall be performed based on such new Price Point Study.

7. As soon as practicable after the execution by CFD No. 2022-3 of the acknowledgement on the Certificate of Reduction in Special Taxes, CFD No. 2022-3 shall cause to be recorded in the records of the County Recorder an Amended Notice of Special Tax Lien for CFD No. 2022-3 reflecting the Assigned Special Taxes and the Backup Special Tax set forth in such Certificate of Reduction in Special Taxes.

8. If the Assigned Special Tax is not required to be changed for any Land Use Class based on the calculations performed under step 3 above, there shall be no reduction in the Maximum Special Tax, and no Certificate of Reduction in Special Taxes shall be required.

However, the CFD Administrator shall prepare and deliver to CFD No. 2022-3 a Certificate of No Reduction in Special Taxes substantially in the form of Attachment B hereto dated as of the closing date of the first series of Bonds that states that the calculations required pursuant to this Section J have been made and that no changes to the Maximum Special Tax are necessary.

CFD No. 2022-3 and the CFD Administrator shall take no further actions under this Section J upon the earlier to occur of the following: (i) the execution of the acknowledgement by CFD No. 2022-3 on a Certificate of Reduction in Special Taxes pursuant to step 6; or (ii) the delivery by the CFD Administrator of a Certificate of No Reduction in Special Taxes pursuant to step 8.

K. TERM
The Special Tax shall be levied and collected as needed to fund the Annual Special Tax Requirement for up to 60 years from the initial levy of the Special Tax. In any event no Special Tax shall be levied for CFD. No. 2022-3 after the 2083/84 Fiscal Year.

Resolution No. CC 2024-019
February 21, 2024

Exhibit A

ATTACHMENT A

CERTIFICATE OF REDUCTION IN SPECIAL TAXES
COMMUNITY FACILITIES DISTRICT NO. 2022-3

1. Pursuant to Section J of the Rate and Method of Apportionment of Special Taxes attached to the Notice of Special Tax Lien recorded in the Official Records of the County of Los Angeles as Document No. on the day of , 20__, the CFD Administrator hereby reduces the Maximum Special Tax for Developed Property for [certain or all] Land Use Classes within CFD No. 2022-3.

2. The calculations made pursuant to Section J were based upon a Price Point Study that was received by the CFD Administrator on _________________. 3 . Table A-1 and A-2 below shows the Assigned Special Tax for each Land Use Class after such reduction:

Table A-1
Reduced Assigned Special Taxes for Developed Property
Fiscal Year _____________
Land
Use
Class Description Building Square Feet Lot Square Feet
Assigned
Special Tax
1-A Single Family Attached Property >= 1,900 BSF N/A $____ per unit 2-A Single Family Attached Property < 1,900 BSF N/A $____ per unit 1-B Single Family Detached Property >= 2,600 BSF <= 5,999 LSF $____ per unit 2-B Single Family Detached Property =2,300 - < 2,600 BSF <= 5,999 LSF $____ per unit 3-B Single Family Detached Property < 2,300 BSF <= 5,999 LSF $____ per unit 1-C Single Family Detached Property >= 3,300 BSF > 5,999 - = 6,999 LSF $____ per unit 2-C Single Family Detached Property =3,000 - < 3,300 BSF > 5,999 - = 6,999 LSF $____ per unit 3-C Single Family Detached Property < 3,000 BSF > 5,999 - = 6,999 LSF $____ per unit 1-D Single Family Detached Property >= 3,300 BSF > 6,999 LSF $____ per unit 2-D Single Family Detached Property < 3,300 BSF > 6,999 LSF $____ per unit 1-E Accessory Dwelling Unit N/A N/A See Below
2-E Non-Residential Property N/A N/A $____ per Acre
Resolution No. CC 2024-019
February 21, 2024

Exhibit A

The Assigned Special Tax for an Accessory Dwelling Unit shall be calculated as a percentage of the Assigned Special Tax for the primary Unit the ADU is accessory to, based on Building Square Footage. For example, if a primary Unit in Land Use Class 1-A of 2,000 BSF has an ADU of 800 BSF, the Assigned Special Tax for the ADU shall be calculated by the following steps:
a. 800 BSF / 2,000 BSF = 0.40 or 40%
b. $______Assigned Special Tax per Unit x 40% = $________ Assigned Special Tax for such ADU
Table A-2
Reduced Assigned Special Taxes for Developed Property
Fiscal Year _____________
Land
Use
Class
Description
Building Square Feet Lot Square Feet
Assigned
Special Tax
1-A Single Family Attached Property >= 1,900 BSF N/A $____ per unit 2-A Single Family Attached Property < 1,900 BSF N/A $____ per unit 1-B Single Family Detached Property >= 2,600 BSF <= 5,999 LSF $____ per unit 2-B Single Family Detached Property =2,300 - < 2,600 BSF <= 5,999 LSF $____ per unit 3-B Single Family Detached Property < 2,300 BSF <= 5,999 LSF $____ per unit 1-C Single Family Detached Property >= 3,300 BSF > 5,999 - = 6,999 LSF $____ per unit 2-C Single Family Detached Property =3,000 - < 3,300 BSF > 5,999 - = 6,999 LSF $____ per unit 3-C Single Family Detached Property < 3,000 BSF > 5,999 - = 6,999 LSF $____ per unit 1-D Single Family Detached Property >= 3,300 BSF > 6,999 LSF $____ per unit 2-D Single Family Detached Property < 3,300 BSF > 6,999 LSF $____ per unit 1-E Accessory Dwelling Unit N/A N/A See Below
2-E Non-Residential Property N/A N/A $____ per Acre
The Assigned Special Tax for an Accessory Dwelling Unit shall be calculated as a percentage of the Assigned Special Tax for the primary Unit the ADU is accessory to, based on Building Square Footage. For example, if a primary Unit in Land Use Class 1-A of 2,000 BSF has an ADU of 800 BSF, the Assigned Special Tax for the ADU shall be calculated by the following steps:
a. 800 BSF / 2,000 BSF = 0.40 or 40%
b. $_______ Assigned Special Tax per Unit x 40% = $________ Assigned Special Tax for such ADU
Resolution No. CC 2024-019
February 21, 2024

Exhibit A

4. The Backup Special Tax for each Assessor’s Parcel of Developed Property in CFD No. 2022- 3 shall be equal to $______ after such reduction.

5. The Maximum Special Tax for each Assessor’s Parcel of Final Map Property and Undeveloped Property in CFD No. 2022-3 shall be $ per Acre.

6. Upon execution of the certificate by the City, the CFD Administrator shall cause an amended notice of special tax lien for CFD No. 2022-3 to be recorded reflecting the modifications set forth herein.

7. By execution hereof, the undersigned acknowledges, on behalf of the City and CFD No. 2022-3, receipt of this certificate and modification of the Rate and Method of Apportionment of Special Taxes as set forth in this certificate.

Submitted

CFD ADMINISTRATOR
By: Date:

Community Facilities District No. 2022-3 of the City of Palmdale By: Date as of:
[closing date of Bonds]
Resolution No. CC 2024-019
February 21, 2024

Exhibit A

ATTACHMENT B

CERTIFICATE OF NO REDUCTION IN SPECIAL TAXES
COMMUNITY FACILITIES DISTRICT NO. 2022-3

1. All calculations required pursuant to Section J of the Rate and Method of Apportionment have been made based upon a Price Point Study that was received by the CFD Administrator on _________________.

2. Total Effective Tax Rate for all Plan Types in all Land Use Classes in all Zones is less than or equal to 2.00%.

3. The Maximum Special Tax for Developed Property within CFD No. 2022-3, including the Assigned Special Taxes set forth in Sections C.1.(a) and the Backup Special Tax set forth in Section C.1.(b) of the Rate and Method of Apportionment, shall remain in effect and not be reduced.

Submitted

CFD ADMINISTRATOR
By: Date as of:
[closing date of Bonds]
Resolution No. CC 2024-019
February 21, 2024

Exhibit B

EXHIBIT B

NOTICE OF PUBLIC HEARING
City of Palmdale Community Facilities District No. 2022-3 (Ritter Ranch Phase 1 Public Facilities)
Notice is hereby given that on February 21, 2024, the City Council of the City of Palmdale adopted a Resolution entitled “A Resolution of the City Council of the City of Palmdale of Consideration to Alter the Rate and Method of Apportionment of Special Taxes for, the City of Palmdale Community Facilities District No. 2022-3 (Ritter Ranch Phase 1 Public Facilities).” Pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (the “Act”), the City Council of the City of Palmdale hereby gives notice as follows:

A. The text of said Resolution is as follows:

WHEREAS, on October 24, 2022, this City Council adopted Resolution No. CC 2022-109 (the “Resolution of Formation”) forming City of Palmdale Community Facilities District No. 2022-3 (Ritter Ranch Phase 1 Public Improvements) (the “District”) pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, constituting Chapter 2.5 of Part 1 of Division 2 of Title 5, commencing with Section 53311, of the California Government Code (the “Act”), for the purpose of financing certain public improvements (the “Facilities”), as further provided in the Resolution of Formation; and
WHEREAS, under proceedings pursuant to the Resolution of Formation and the Act, the City Council has authorized the levy of a special tax (the “Special Tax”) on real property in the District, as specified in the Rate and Method of Apportionment for City of Palmdale Community Facilities District No. 2022-3 (Ritter Ranch Phase 1 Public Improvements) (the “Original Rate and Method”), with the proceeds of the Special Tax to be used to pay debt service on bonds issued for the District to finance the Facilities and administrative expenses related to the District; and WHEREAS, the owner of all of the property in the District, RdR Development Holdings, LLC, has requested that the City Council take the actions necessary to alter the Original Rate and Method; and
WHEREAS, the City Council now desires to undertake the proceedings required by the Act to authorize the District to alter the Original Rate and Method.

Resolution No. CC 2024-019
February 21, 2024

Exhibit B

NOW, THEREFORE, BE IT RESOLVED, THE CITY COUNCIL OF THE CITY OF PALMDALE DOES HEREBY FIND, DETERMINE, RESOLVE AND ORDER AS FOLLOWS:

SECTION 1. The City Council hereby finds and determines that public convenience and necessity require that the Original Rate and Method be altered.

SECTION 2. The name of the District is “City of Palmdale Community Facilities District No. 2022-3 (Ritter Ranch Phase 1 Public Facilities),” and the territory included in the District is as shown on the map of the District recorded on September 26, 2022 in Book 196 of Maps of Assessment and Community Facilities Districts at Page 37 (Instrument No. 20220937555), in the Office of the County Recorder for the County of Los Angeles, State of California.

SECTION 3. It is proposed that the Original Rate and Method be amended and restated as set forth in Exhibit A attached hereto and by this reference incorporated herein.

SECTION 4. Wednesday, March 20, 2024, at 5:00 p.m., in the regular meeting place of this City Council, Council Chambers, City Hall, 38300 Sierra Highway, Suite B, Palmdale, California, are hereby designated as the time and place when and where this City Council, as legislative body for the District, will conduct a public hearing on the proposed alteration of the rate and method of apportionment of the special tax to be as set forth in Exhibit A hereto, and consider and finally determine whether the public interest, convenience and necessity require the alteration of the Original Rate and Method, as described above.

SECTION 5. The City Clerk is hereby directed to cause notice of the public hearing to be given by publication one time in a newspaper of general circulation circulated within the District.

The publication of the notice shall be completed at least seven (7) days before the date herein set for the public hearing. The notice shall be substantially in the form of Exhibit B hereto.

SECTION 6. This Resolution shall take effect upon its adoption.

B. The time and place established under said Resolution for the public hearing required under the Act are Wednesday, March 20, 2024, at the hour of 5:00 p.m., in the regular meeting place of the City Council of the City of Palmdale, Council Chambers, City Hall, 38300 Sierra Highway, Suite B, Palmdale, California.

Resolution No. CC 2024-019
February 21, 2024

Exhibit B

C. At the public hearing, the testimony of all interested persons or taxpayers in the District for or against the alteration of the rate and method of apportionment of the special taxes for the District will be heard. Any person interested may file a protest in writing as provided in Section 53337 of the Act.

If 50 percent or more of the registered voters, or six registered voters, whichever is more, residing within the District, or the owners of one-half or more of the area of the land in the territory included in the District and not exempt from the Special Tax file written protests against the proposed alteration of the Original Rate and Method, those changes shall be eliminated from any resolution and the changes shall not be included in a resolution for a period of one year from the date of the decision of the City Council on the hearing.

D. The proposed voting procedure shall be by special mail or hand-delivered ballot of the sole owner of the real property located within the District.

Dated: , 2024
/s/ Rochelle Scott
Acting City Clerk,
City of Palmdale
City Council Staff Report
DATE: FEBRUARY 21, 2024
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: PUBLIC WORKS DEPARTMENT

ENGINEERING DIVISION
DISTRICT: 3
SUBJECT: NOTICE OF COMPLETION – ACCEPT PUBLIC LANDSCAPE IMPROVEMENTS F OR TRACT 60789 LOCATED ON THE WEST
SIDE OF 40TH STREET EAST AND HOLLOWGLEN DRIVE

RECOMMENDATION
Staff recommends that the City Council:

1. Accept the Notice of Completion for completed public landscape improvements for Tract 60789 located on the west side of 40 th Street East and Hollowglen Drive ; and,

2. Authorize the City Manager or h er designee to file a Notice of Completion (NOC) and release the security for the completed public landscape improvements.

BACKGROUND
This project, located on the w est side of 40 th Street East and Hollowglen Drive , constructed public landscape improvements along 40th Street East within the City’s right- of-way. Improvements included irrigation and landscaping . Said public improvements have been installed per the approved construction plan, inspected, and approved by City Public Works inspection staff.

DISCUSSION
The Notice of Completion is being brought forth in accordance with Section 16.110.060 of the City’s Municipal Code. This Council action will accept the public landscape improvements as complete and initiate the City’s release of applicable securities posted for this project per the City’s subdivision regulation.

The required public landscape improvements for the project are listed in Exhibit “A” and located in Exhibit “B” and have been completed to the satisfaction of the City Engineer Report to Mayor and City Council
Re: NOC Completed Public Landscape Improvements – Tract 60789 February 21, 2024

as required in the Subdivision/Development Improvement Agreement between the developer and the City. After the developer fulfills a one-year maintenance period that began on September 12, 2023, the improvements along 40 th Street East will be transferred from the developer to the City of Palmdale Landscape Division.

FISCAL IMPACT
$8,000; The estimated additional maintenance and administrative costs are $8,000 annually. These improvements comprise the entirety of Landscape Maintenance District No. 2006-294, and the maintenance and administrative costs are expected to be sustained by the annual levy and budgeted in account 25133003-723410-3610 (Landscape Assessment District).

STRATEGIC PLAN
Goal III: Invest in infrastructure to improve community livability.

C. Plan and maintain safe and attractive neighborhoods, streets, facilities, and public spaces with exciting programming that promotes active fun for everyone.

Prepared by: Lynn Glidden, P.E., Director of Public Works Certified as to availability of Funds: Janelle Samson, Director of Operations Approved by: Ronda Perez, City Manager
Approved as to form: William P. Curley, III, City Attorney

ATTACHMENTS
Exh A List of Completed Public Improvements
Exh B Site Map Location
NOC
Photo of Site

EXHIBIT A

LIST OF COMPLETED PUBLIC IMPROVEMENTS
Tract/Project Plan # Quantity Security

Tract 60789 LMD 20-34 300 LF $66,700 (planting & irrigation)

EXHIBIT B

SITE MAP

RECORDING REQUESTED BY:

CITY OF PALMDALE
WHEN RECORDED MAIL TO:

CITY OF PALMDALE

OFFICE OF THE CITY CLERK
38300 SIERRA HIGHWAY, SUITE C
PALMDALE, CA 93550
Space above this line is for Recorder’s Use

NOTICE OF COMPLETION
Notice pursuant to Civil Code Section 3093, is hereby given that:

1. The undersigned is owner or corporate officer of the interest or estate stated below in the property hereinafter described.

2. The full name of the owner is City of Palmdale, a Municipal Corporation.

3. The full address of the owner is 38300 Sierra Highway, Palmdale, CA 93550.

4. The nature of interest or estate of the owner is: Landscape Maintenance District Improvements-Tract 60789.

5. A work of improvement on the property hereinafter described was completed on September 12, 2023.

6. The work done was: “ Landscape Maintenance District Improvements-Tract 60789”,

7. The name of the Contractor for such work of improvement: FH II, LLC

8. The property on which said work of improvement was completed is in the City of Palmdale, County of Los Angeles, State of California, and is described as follows: West of 40th Street East and Hollowglen Drive.

9. The address of said property is: Tract 60789.

Dated: February 21, 2024

CITY OF PALMDALE
Guillermo I. Padilla, City Engineer
____________________________________________________________________________

VERIFICATION
I, the undersigned, say: I am the City Engineer, the declarant of the foregoing notice of completion; I have read the said notice of completion and know the contents thereof; the same is true of my own knowledge.

I declare under penalty of perjury that the foregoing is true and correct.

Executed on February 21, 2024, in the City of Palmdale, California.

Guillermo I. Padilla, City Engineer

Photo of Site – 40th Street East and
Hollowglen Drive
City Council Staff Report
DATE: FEBRUARY 21, 2024
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: PUBLIC WORKS DEPARTMENT

CAPITAL IMPROVEMENT PROGRAM DIVISION
DISTRICT: ALL
SUBJECT: AWARD CONSTRUCTION AGREEMENT WITH SQUARE SIGNS , LLC., DBA FRONT SIGNS, FOR P N 888, STREET SWEEPING
SIGNAGE, FOR $ 391,150 FOR A TERM OF 100 WORKING DAYS

FROM THE DATE OF THE NOTICE TO PROCEED

RECOMMENDATION
Staff recommends that the City Council:

1. Approve Agreement No. A-8618 with Square Signs, LLC., dba Front Signs, for PN 888, Street Sweeping Signage, for $391,150 for a term of 100 working days from the date of the Notice to Proceed; and,

2. Authorize the City Manager or her designee to execute Agreement No. A-8618 with Square Signs , LLC., dba Front Signs , including minimal and/or non- substantial changes.

BACKGROUND
Palmdale Municipal Code 12.36, amended through Ordinance No. 1612, and adopted by City Council on November 15, 2023, requires “No Parking” signage associated with street sweeping days. Project No. 888 provides for the purchase and installation of “No Parking” signs within the residential streets of Palmdale. The City is following Waste Management’s trash collection schedule to maximize the benefits of street sweeping.

There are 18 sweeping zones that are identified in Attachment 1 and 2 , and street sweeping will be done twice a month on the first business day after a scheduled trash pickup. (For example, Zone A & Q have trash pickup on Friday, so their street sweeping days would be the first and third Monday of every month). The total number of “No Parking” signs to be installed is 4,900.

DISCUSSION
On December 18, 2023, the project was advertised electronically through PlanetBids.

A total of thirteen (13) prospective bidders downloaded the bid documents.

Report to Mayor and City Council
Re: Award of PN 888, Agreement No. A-8618
February 21, 2024

On January 16, 2024, five (5) bids for this project were received, summarized, and listed below:

Bidder Location Amount

1. Square Signs, LLC., dba Front Signs Burbank, CA $391,150.00

2. Cal-Stripe, Inc. Colton, CA $469,485.00

3. BC Traffic Specialist Garden Grove, CA $545,975.00

4. PCI Azusa, CA $618,630.00

5. Sterndahl Enterprises, LLC. Sun Valley, CA $708,756.00 The City received one bid protest from Cal-Stripe, Inc. The bid protest asserts, in part, the following: Square Signs, LLC., dba Front Signs, is in possession of a C-45 license and did not list subcontractors to perform the traffic control that this project may require, and Cal-Stripe, Inc. stated that Square Signs, LLC., dba Front Signs, had discrepancies noted in the reference form. Upon review of the bid documents and checking references, the City has determined that the bid protest from Cal-Stripe, Inc. lacks merit and has informed the contractor of this decision. Square Signs, LLC., dba Front Signs, was found to be the lowest responsible, responsive bidder, and staff recommends awarding PN 888 to Square Signs, LLC., dba Front Signs, for $391,150.

Once the signs are in place, enforcement will be handled by the City’s Code Enforcement Division. A plan to educate the public through various channels, like social media, newspapers, and community events, will be implemented before they start enforcement.

FISCAL IMPACT
$446,765; The project is funded in Account No. S0169157-724525, with an available balance of $450,000. The fiscal impact and remaining account balance can be seen in the following table:

Scope of Work Cost
Agreement No. A-8618 $391,150
Construction Contingency (10%) $39,115
Administration, Permit Fees, and Inspection $10,500
Labor Compliance $6,000
Total Cost: $446,765
Account Number Starting Balance Total Project Costs Remaining Balance
S0169157-724525 $450,000 $446,765 $3,235
Report to Mayor and City Council
Re: Award of PN 888, Agreement No. A-8618
February 21, 2024

STRATEGIC PLAN
Goal III: Invest in infrastructure to improve community livability.

C. Plan and maintain safe and attractive neighborhoods, streets, facilities, and public spaces with exciting programming that promotes active fun for everyone.

Prepared by: Lynn Glidden, P.E., Director of Public Works Certified as to availability of Funds: Janelle Samson, Director of Operations Approved by: Ronda Perez, City Manager
Approved as to form: William P. Curley, III, City Attorney

ATTACHMENTS
Agrmt No. A-8618 with Square Signs LLC., dba Front Signs Atch 1 Street Sweeping Zones
Atch 2 Street Sweeping Days
Atch 3 Sign Standards
Atch 4 Sign Map-Partial
1-14
AGREEMENT NO. A- 8618

CONSTRUCTION CONTRACT
BETWEEN THE CITY OF PALMDALE AND SQUARE SIGNS LLC dba FRONT SIGNS
T
HIS CONTRACT (“Contract”) is made and entered into by and between City of Palmdale, a public entity ( "City"), and SQUARE SIGNS LLC dba FRONT SIGNS, a CONTRACTOR ("Contractor"). Contractor and City are collectively referred to herein as the “parties.” This Contract shall become effective on the date of the last signatory. 1 Scope of Work
Contractor shall complete the Project in accordance with this Contract. Contractor shall furnish all materials and perform all work required for the completion of the following Project:

F
abrication of “No Parking” signs, installation of signs on existing streetlight poles in designated street sweeping zones, and installation of Telespar poles and signage in designated street sweeping zones. All print signage produced must be of aluminum and shall have reflective sheeting. The “No Parking” signs shall conform to California Manual of Uniform Traffic Control Devices (MUTCD) and Federal Highway Administration (FHWA). Locate the City owned streetlights by using the map provided by the City. Install all signs using brackets that are used in conjunction with banding to mount the signs on streetlights. See note on map page 1942-E for locations of Telespar posts installation of “No Parking” signs. Install signs using Telespar anchors and sleeves in conjunction with drive rivets to mount the signs on Telespar posts.
2 Standard Specifications
Standard Specifications for City projects are those contained in the 2021 Greenbook edition of the "Standard Specifications for Public Works Construction" (the "Greenbook"). Except as otherwise expressly provided herein, the Standard Specifications shall c ontrol the general provisions, construction materials, and construction methods for this Contract (except as amended by the Plans for the Project), the General Specifications for the Project, the Special Provisions for the Project, any technical specificat ions for the Project, and any other contract documents.
3 Compensation
City shall pay Contractor the total, all-inclusive, NOT-TO-EXCEED amount of THREE HUNDRED NINETY-ONE THOUSAND ONE HUNDRED FIFTY Dollars ($391150) for the construction of the Project. This amount shall cover all expenses for labor, materials, and any and all other costs incurred by Contractor to satisfactorily construct the Project. Unless otherwise provided in the bid documents or agreed 2-14
upon by the parties, Contractor shall submit detailed, monthly invoices for work actually performed.
4 Completion Date
T
he construction of the Project shall commence upon Contractor being given a written notice to proceed, and shall be completed within 100 working days of said notice.
5 Payment and Performance Bonds; Guaranty
U
nless otherwise expressly provided in the bid documents, prior to commencing work, Contractor shall provide a payment bond and performance bond, each in an amount equal to 100% of the Contract price. The bond forms required to be executed are attached hereto and incorporated by reference herein. Pursuant to the bid documents for this Project, the Contractor is required to provide a written guaranty of Contractor’s work. In furtherance thereof, Contractor shall execute the written form of Guaranty attached hereto and incorporated by reference herein. 6 Licenses
A
t all times during the term of this Contract, Contractor shall possess a valid and current Class A or C-45 or D-42 Contractor's License [or Specialty Contractor License consisting of Class A or C-45 or D-42 license] to perform the required work (“Work”). Contractor’s DIR registration number is 1000732634. Contractor hereby certifies that it holds the required license(s). 7 Subcontracting
S
ubject to any self-performance requirements herein, Contractor may subcontract any portion of the work required by this Contract to other persons or firms, and Contractor submitted with its bid a list of those subcontractors who will perform work in an amount in excess of one-half of one percent (1%) of the Contractor’s total bid, in compliance with the Subletting and Subcontracting Fair Practices Act, California Public Contract Code § 4100, et seq. Only such listed subcontractors may perform on this Project.
8 Non-Assignability
N
either this Contract nor any rights, title, interest, duties or obligations under this Contract may be assigned, transferred, conveyed or otherwise disposed of by Contractor without the prior written consent of City.
9 Administration
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T
his Contract will be administered by the Public Works Department of the City. The Director of Public Work or his or her designee shall be considered the Project Administrator and shall have the authority to act for the City under this Contract. 10 Indemnification
T
o the maximum extent permitted by law, Contractor shall indemnify, protect, defend and hold harmless the City, its Board of Director, the City's officers, employees, agents, volunteers, and representatives (“Indemnitees”) with respect to any and all claims, suits, actions, stop notices, liabilities and/or damages, including related expenses, attorney's fees and costs, based on, arising out of, or in any way related to the work undertaken by Contractor pursuant to this Contract, and in connection with the Project.
11 Liability Insurance

11.1 Without limiting Contractor's indemnification of City, as described in paragraph 10, and unless modified by City, Contractor shall obtain, provide and maintain, at its own expense, during the term of this Contract, a policy or policies of insurance, satisfactory to the City, from insurance carriers admitted to do business in the State of California and rated in A.M. Best’s Insurance Guide with a rating of A:VII or better, which contain the coverage described below.

11.1.1 Commercial General Liability
− $1,000,000.00 limit on a per occurrence basis
− $2,000,000.00 general aggregate limit

11.1.2 Commercial Automobile Liability
− $1,000,000.00 combined single limit including owned, non-ow ned and hired automobile coverage
1 1.1.3 Workers’ Compensation and Employer’s Liability − Workers’ Compensation -- c overage as required by the State of California − Employer’s Liability --
$1
,000,000.00 each accident
$1,000,000.00 policy limit bodily injury
$1,000,000.00 each employee bodily injury by disease
1 1.1.4 Professional Liability/Errors & Omissions*
− $1,000,000.00 limit on a per occurrence basis

11. 2 Policies providing for bodily injury and property damage coverage shall contain the following:

A. An endorsement extending coverage to the City as an additional insured, as respects liability arising out of the performance of any work under the Contract. 4-14

Such insurance shall be primary insurance, as respects the interest of the City, and any other insurance maintained by the City shall be considered excess coverage and not contributing insurance with the insurance required hereunder.

The certificates shall state: “The City of Palmdale, Successor Agency to the Community Redevelopment Agency of the City of Palmdale, Palmdale Civic Authority, Housing Authority, Industrial Development Authority, Airport Authority, their officers, agents, employees and volunteers are named as additional insured”.

B. “Severability of Interest” Clause.

11.3 Promptly upon execution of this Contract, and prior to commencement of any work, CONTRACTOR shall deliver to CITY certificates of insurance and endorsements to all required policies demonstrating that CONTRACTOR has the required coverage and showing the required named insured. Within five (5) days of written request from CITY, CONTRACTOR shall deliver to CITY full and complete copies of all insurance policies required by this Contract.

11.4 Said Certificates of Insurance shall provide that thirty (30) days’ prior written notice of cancellation shall be given to the City in the event of cancellation and/or reduction in coverage of any nature.

11.5 The required policies of insurance shall be endorsed to waive all rights of subrogation. Contractors waives all rights of subrogation.

11.6 Acceptable Proof of Insurance:

A. ACORD Certificate of Insurance listing all coverage, limits, deductibles and insured; and endorsements for all applicable coverage if agent has authority to issue it; or additional insured Form CG20100704 and CG20370704 or equivalent must be provided for general liability coverage. Additional insured form CA0001 must be provided for automobile liability coverage.

B. Binders of insurance for all coverage. Agents must confirm that policy endorsements have been ordered from the respective insurance companies.

Upon issuance, policy endorsements and a corresponding Certificate of Insurance listing all insurers and coverage must be submitted to the City Attorney.

C. *When pollution/environmental liability coverage is provided on a “claims made basis”, CONTRACTOR will continue to renew the insurance for a period of five (5) years after this Agreement expires or is terminated. Such insurance will have the same coverage and limits as the policy that was in effect during the term of this Agreement, and will cover CONTRACTOR, or its officers, employees, or agents during the time this Agreement was in effect. 5-14

11.7 The requirements as to the types and limits of insurance to be maintained by CONTRACTOR are not intended to and shall not in any manner limit or qualify CONTRACTOR’s liabilities and obligations under this Contract.

11.8 Any policy or policies of insurance that CONTRACTOR elects to carry as insurance against loss or damage to its equipment and tools or other personal property used in the performance of this Contract shall include a provision waiving the insurer’s right of subrogation against CITY.

11.9 Notwithstanding any other provision of this Contract, CITY may immediately terminate this Contract if, at any time CONTRACTOR fails to maintain the required insurance for any period of time or fails to comply with any of the insurance requirements listed above.

11.1 0 CONTRACTOR shall require any and all subcontractors working on its behalf to provide insurance coverages and limits that are based on the scope of work and nature of risk being performed by the subcontractor. Any and all subcontractors working on behalf of CONTRACTOR shall be subject to all other insurance requirements that are stated herein.

Any deviation in this requirement will be CONTRACTOR's sole risk. CONTRACTOR's insurance requirements in Section 11 will not be impacted and/or limited by such deviation.
12 State Labor Code

12.1 This Contract calls for work to be performed constituting public works.

Contractor and all subcontractors shall pay the general prevailing rate of per diem wages as determined and as published by the State Director of the Department of Industrial Relations pursuant to Article 2 of Chapter 1 of Part 7, of Division 2 of the State Labor Code, including, but not limited to, Sections 1770, 1771, 1773, 1773.2 and 1774.

12.2 This is a public work and requires the payment of prevailing wages for the work or craft in which the worker is employed for any public work done under the contract by Contractor or by any subcontractor pursuant to Section 1771 of the Labor Code. Pursuant to the provisions of Section 1773 of the Labor Code of the State of California, the City has obtained the general prevailing rate of per diem wages and the general rate for holiday and overtime work in this locality for each craft, classification, or type of workman needed to execute this contract from the Director of the Department of Industrial Relations. These rates are on file with the City or may be obtained at http://www.dir.ca.gov/OPRL/DPreWageDetermination.htm.

Contractor shall post a copy of such wage rates at the job site and shall pay the adopted prevailing wage rates as a minimum. Contractor shall comply with the provisions of Sections 1775, 1776, 1777.5, 1777.6, and 1813 of the Labor 6-14

Code. Pursuant to the provisions of 1775 of the Labor Code, Contractor shall forfeit to the City, as a penalty, not more than $200.00 for each calendar day, or portion thereof, for each laborer, worker, or mechanic employed, paid less than the stipulated prevailing rates for any work done under this Contract, by him or by any subcontractor under him, in violation of the provisions of this Agreement.

12.3 Contractors and subcontractors who are ineligible to bid for work on, or be awarded, a public works project pursuant to Labor Code Sections 1777.1 and 1777.7 are prohibited from bidding on, being awarded, or performing work as a subcontractor, on this Project pursuant to Public Contract Code Section 6109.

12.4 Contractor's attention is directed to the provisions in Sections 1774, 1775, 1776, 1777.5 and 1777.6 of the Labor Code. Contractor shall comply with the provisions in these Sections. The statutory provisions for penalties for failure to comply with the State's wage and hours laws will be enforced. Pursuant to Section 1775 of the Labor Code, the Contractor and any subcontractors, shall, as a penalty to the City forfeit the prescribed amounts per calendar day, or portion thereof, for each worker paid less than the prevailing wage rates.

12.5 Pursuant to Labor Code Section 1771.4, the Project is subject to compliance monitoring and enforcement by the California Department of Industrial Relations.

12.6 Each Contractor and subcontractor shall furnish the records specified in Labor Code Section 1776 directly to the State Labor Commissioner at least monthly in the format prescribed by the State Labor Commissioner.

12.7 Sections 1774 and 1775 require the Contractor and all subcontractors to pay not less than the prevailing wage rates to all workmen employed in the execution of the Contract and specify forfeitures and penalties for failure to do so. The minimum wages to be paid are those determined by the State Director of the Department of Industrial Relations. Section 1776 requires the Contractor and all subcontractors to keep accurate payroll records, specifies the contents thereof, their inspection and duplication procedures and certain notices required of the Contractor pertaining to their location.

12.8 Section 1777.5 of the Labor Code requires Contractor or subcontractor employing workers in any apprenticeable occupation to apply to the Joint Apprenticeship Committee nearest the site of the public works project, which administers the apprenticeship program in that trade for a certificate of approval. The certificate will also fix the ratio of apprentices to journeymen to be used in the performance of the Contract. The Contractor is required to make contributions to funds established for the administration of apprenticeship programs if he employs registered apprentices or journeymen in any apprenticeable trade and if other contractors on the public works site are making such contributions. Information 7-14

relative to apprenticeship standards, contributions, wage schedules and other requirements may be obtained from the State Director of Industrial Relations or from the Division of Apprenticeship Standards. Section 1777.6 of the Labor Code provides that it shall be unlawful to refuse to accept otherwise qualified employees as registered apprentices solely on the grounds of race, religious creed, color, national origin, ancestry, sex, or age.

12.9 Eight hours labor constitutes a legal day's work, as set forth in Labor Code Section 1810. The statutory provisions for penalties for failure to comply with the State's wage and hour laws will be enforced as set forth in Labor Code Section 1813. 13 Antitrust Claims
In entering into this Agreement, Contractor offers and agrees to assign to the City all rights, title, and interest in and to all causes of action it may have under Section 4 of the Clayton Act (15 U.S.C. Sec. 15) or under the Cartwright Act (Chapter 2 (commencing with Section 16700) of Part 2 of Division 7 of the California Business and Professions Code) arising from purchases of goods, services, or materials pursuant to the Agreement. This assignment shall be made and become effective at the time the City tenders final payment to Contractor without further acknowledgment by the parties.
14 Trenching and Excavations
Pursuant to Public Contract Code Section 7104, if the Project involves trenching more than four (4) feet deep, Contractor shall promptly and before the following conditions are disturbed notify the City in writing of any:

14.1 Material that Contractor believes may be material that is hazardous waste, as defined in California Health and Safety Code Section 25117, that is required to be removed to a Class I, Class II, or Class III disposal site in accordance with provisions of existing law; and/or

14.2 Subsurface or latent physical conditions at the site differing from those indicated; and/or

14.3 Unknown physical conditions at the site of any unusual nature, different materially from those ordinarily encountered and generally recognized as inherent in work of the character provided for in the Contract.

14.4 As required by Labor Code Section 6705 and in addition thereto, whenever work under the Contract that involves an estimated expenditure in excess of twenty- five thousand dollars ($25,000) for the excavation of any trench or trenches five (5) feet or more in depth, Contractor shall submit for acceptance by City in advance of excavation, a detailed plan showing the design of shoring, bracing, sloping, or other 8-14

provisions to be made for worker protection from the hazard of caving ground during the excavation, of such trench or trenches. If such plan varies from the shoring system standards established by the Construction Safety Orders of the Division of Industrial Safety, the plan shall be prepared by a registered civil or structural engineer employed by Contractor, and all costs therefor shall be included in the price of the Contract. Nothing in this provision shall be deemed to allow the use of a shoring, sloping, or other protective system less effective than that required by the Construction Safety Orders. Nothing in this provision shall be construed to impose tort liability on the City or on any City officer, agent, consultant, representative, or employee. All plans, processing and shoring costs are Contractor’s responsibility and must be included in Contractor’s bid.

15 Location of Existing Elements
Pursuant to Government Code Sections 4216 to 4216.9, the methods used and costs involved to locate existing elements, points of connection and all construction methods are Contractor’s sole responsibility. Accuracy of information furnished, as to existing conditions, is not guaranteed. Contractor, at its sole expense, must make all investigations necessary to determine locations of existing elements, which may include, without limitation, contacting U.S.A. alert and other private underground locating firm(s), and/or utilizing potholes, specialized locating equipment and/or hand trenching.
16 Third Party Claims
Pursuant to Public Contract Code Section 9201, the City has full authority to compromise or otherwise settle any claim relating to this Contract at any time. The City shall timely notify Contractor of the receipt of any third-party claim relating to the Contract. The City shall be entitled to recover its reasonable costs incurred in providing the notification required by Public Contract Code Section 9201(b). 17 Non-Collusion
Contractor hereby certifies that this bid is genuine and not a sham or collusive, or made in the interest or on behalf of any person or business not herein named. Contractor further certifies that Contractor has not directly or indirectly induced or solicited any other bidder to furnish a sham bid, or any other person or business to refrain from bidding, and Contractor has not in any manner sought by collusion to secure itself an advantage over any other bidder. Contractor also affirms that it has signed and submitted with its bid to the City a Non-collusion Declaration as required by Public Contract Code Section 7106.
18 Conflicts of Interest
Contractor agrees not to accept any employment or representation during the term of this Contract or within twelve (12) months after completion of the work under this 9-14

Contract which is or may likely make Contractor “financially interested,” as provided in Government Code Section 1090 and 87100, in any decisions made by City on any matter in connection with which Contractor has been retained pursuant to this Contract.
19 Audit
The City or its representative shall have the option of inspecting and/or auditing all records and other written materials used by Contractor in preparing its billings to the City as a condition precedent to any payment to Contractor. Contractor will promptly furnish documents requested by the City. Additionally, pursuant to Government Code Section 8546.7, if this Contract involves the expenditure of public funds in excess of ten thousand dollars ($10,000), Contractor shall be subject to State Auditor examination and audit at the request of the City or as part of any audit of the City, for a period of three (3) years after final payment under this Contract. 20 Substitute Security
Pursuant to Public Contract Code Section 22300, the substitution of securities for any moneys withheld by the City to ensure performance under a contract is permitted, except where financing will be provided by the Farmers Home Administration of the United States Department of Agriculture pursuant to the Consolidated Farm and Rural Development Act (7 U.S.C. Sec. 1921 et seq.) or where federal regulations or policies, or both, do not allow the substitution of securities. At the request and expense of Contractor, securities equivalent to the amount withheld shall be deposited with the City, or with a state or federally chartered bank in the State of California as the escrow agent, that shall then pay those moneys to Contractor. Upon satisfactory completion of the Contract, the securities shall be returned to Contractor.

Alternatively, Contractor may request and the City shall make payment of retentions earned directly to the escrow agent at the expense of Contractor. At the expense of Contractor, Contractor may direct the investment of the payments into securities, and Contractor shall receive the interest earned on the investments upon the same terms provided for securities deposited by Contractor. Upon satisfactory completion of the Contract, Contractor shall receive from the escrow agent all securities, interest, and payments received by the escrow agent from the City, pursuant to the terms of this section.

Securities eligible for investment shall include those listed in California Government Code Section 16430, bank or savings and loan certificates of deposit, interest-bearing demand deposit accounts, standby letters of credit, or any other security to which Contractor and the City agree in writing. Contractor shall be the beneficial owner of any securities substituted for moneys withheld and shall receive any interest thereon.

If Contractor elects to receive interest on moneys withheld in retention by the City, it 10-14

shall, at the request of any subcontractor performing more than five percent (5%) of Contractor’s total bid, make that option available to the subcontractor regarding any moneys withheld in retention by Contractor from the subcontractor. If Contractor elects to receive interest on any moneys withheld in retention by the City, then the subcontractor shall receive the identical rate of interest received by Contractor on any retention moneys withheld from the subcontractor by Contractor, less any actual pro rata costs associated with administering and calculating that interest. In the event that the interest rate is a fluctuating rate, the rate for the subcontractor shall be determined by calculating the interest rate paid during the time that retentions were withheld from the subcontractor. If Contractor elects to substitute securities in lieu of retention, then, by mutual consent of Contractor and its subcontractor, the subcontractor may substitute securities in exchange for the release of moneys held in retention by Contractor. No Contractor shall require any subcontractor to waive any provision of this paragraph.

The escrow agreement for security deposits in lieu of retention shall be substantially similar to the form provided in Public Contract Code Section 22300(f). 21 Claims Dispute Resolution
In the event of any dispute or controversy with the City over any matter whatsoever, the Contractor shall not cause any delay or cessation in or of Work, but shall proceed with the performance of the Work in dispute. The Contractor shall retain any and all rights provided that pertain to the resolution of disputes and protests between the parties. The Disputed Work will be categorized as an “unresolved dispute” and payment, if any, shall be as later determined by mutual agreement or a court of law. The Contractor shall keep accurate, detailed records of all Disputed Work, claims and other disputed matters.

All claims arising out of or related to the Contract documents or this Project, and the consideration and payment of such claims, are subject to the Government Claims Act (Government Code Section 810 et seq.) with regard to filing claims. All such claims are also subject to Public Contract Code Section 9204 and Public Contract Code Section 20104 et seq. (Article 1.5), where applicable. This Contract hereby incorporates those provisions as though fully set forth herein. Thus, the Contractor or any Subcontractor must file a claim in accordance with the Government Claims Act as a prerequisite to filing a construction claim in compliance with Section 9204 and Article 1.5 (if applicable), and must then adhere to Section 9204 and Article 1.5 (as applicable), pursuant to the definition of “claim” as individually defined therein. 22 Non-discrimination and Equal Employment Opportunity

22.1 In performance of this Contract, CONTRACTOR shall not discriminate against any employee, subcontractor, or applicant for employment because of sex, color, race, religion, ancestry, national origin, disability, medical condition including the 11-14

medical condition of Acquired Immune Deficiency Syndrome (AIDS) or any condition related thereto, marital status, sexual orientation, age, gender, gender identity, gender expression, genetic information, or military and veteran status.

CONTRACTOR will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their sex, color, race, religion, ancestry, national origin, disability, medical condition including the medical condition of Acquired Immune Deficiency Syndrome (AIDS) or any condition related thereto, marital status, sexual orientation, age, gender, gender identity, gender expression, genetic information, or military and veteran status . Affirmative action relating to employment shall include, but not be limited to the following:
employment, upgrading, demotion or transfer; recruitment; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship.

22.2 The provisions of subsection 16.1 above shall be included in all solicitations or advertisements placed by or on behalf of CONTRACTOR for personnel to perform any services under this Contract. CITY shall have access to all documents, data and records of CONTRACTOR and its subcontractors for purposes of determining compliance with the equal employment opportunity and non-discrimination provisions of this Section, and all applicable provisions of Executive Order No. 11246 which is incorporated herein by this reference. A copy of Executive Order No. 11246 is available for inspection at, and on file with, the Palmdale City Clerk’s Office. 23 Integration
This Contract supersedes any and all agreements, either oral or written, between the parties hereto with respect to the construction of the Project by Contractor for City and contains all of the covenants and agreements between the parties with respect to the construction of the Project. Each party to this Contract acknowledges that no representations, inducements, promises, or agreements, orally or otherwise, have been made with regard to the construction of the Project by any party, or anyone acting on behalf of any party, which are not embodied herein, and that no other agreement, statement, or promise regarding work not contained in this Contract shall be valid or binding. Any modification or amendment of this Contract will be effective only if it is in writing and signed by the parties to this Contract. Any changes to the work required by this Contract will be by change order signed by the parties. 24 Governing Law
This Contract will be governed by and construed in accordance with the laws of the State of California without reference to change of venue laws. Any legal action in which enforcement of the terms and conditions of this Contract is requested, or in which it is alleged that a breach of this Contract has taken place, shall be filed and prosecuted in the County of Los Angeles, California.
25 Successors and Assigns
12-14

The terms and conditions of this Contract shall be binding on the successors and assigns of the parties to this Contract.
26 Exhibits
The exhibits and attachments referenced in this Contract are attached hereto and incorporated herein by this reference as though set forth in full in the Contract. 27 Authority to Sign
The person or persons executing this Contract on behalf of the Contractor warrant and represent that they have the authority to execute this Contract on behalf of the Contractor and have the authority to bind Contractor to the construction of the Project.
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28 Time is of the Essence
Time is of the essence in every provision of this Agreement in which time to perform is a factor.

In Witness Whereof, the parties hereto have caused this Contract to be executed and attested by their respective officers thereunto duly authorized.

CITY OF PALMDALE SQUARE SIGNS LLC dba FRONT
SIGNS

Ronda Perez Date
City Manager

Gevorg Hambardzumyan Date
CEO

ADDRESS FOR NOTICE:

CITY OF PALMDALE
38300 Sierra Hwy, Suite A
Palmdale, CA 93550

ADDRESS FOR NOTICE:

SQUARE SIGNS LLC dba FRONT
SIGNS
3520 Valhalla Drive
Burbank, California 91505
APPROVE AS TO FORM:

William P. Curley, III
City Attorney

ATTEST:

Roxanne Faber
Acting City Clerk
ATTEST: If Corporation

Secretary

[Signatures of contractor on bond(s) must be notarized. Obtain two corporate signatures if contractor is a corporation.]

---------------------------------------- INTERNAL USE ONLY ----------------------------------------

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□Certificate(s) and Endorsement(s) attached
□Confirmed business name on contract with certificate(s) □Attached notarized bond(s), Worker's Compensation Certificate, and Guaranty □Attached Agreement Checklist and met all requirements

Atch 1
STREET SWEEPING DAYS Atch 2

ZONE TRASH PICK UP DAY STREET SWEEPING DAY
A & Q FRIDAY 1ST & 3RD MONDAY
B & Z FRIDAY 2ND & 4TH MONDAY
E MONDAY 1ST AND 3RD TUESDAY
F MONDAY 2ND AND 4TH TUESDAY
G & K TUESDAY 1ST AND 3RD WEDNESDAY
D & H TUESDAY 2ND AND 4TH WEDNESDAY
J & l WEDNESDAY 1ST AND 3RD THURSDAY
I & M WEDNESDAY 2ND & 4TH THURSDAY
N & O THURSDAY 1ST AND 3RD FRIDAY
C & P THURSDAY 2ND AND 4TH FRIDAY

Atch 3

Atch 4
City Council Staff Report
DATE: FEBRUARY 21, 2024
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: PUBLIC WORKS DEPARTMENT
DISTRICT: ALL
SUBJECT: APPROVE THE MASTER POWER PURCHASE AND SALE

AGREEMENT AND CONFIRMATION LETTER BETWEEN ENERGY
FOR PALMDALE’S INDEPENDENT CHOICE (EPIC) AND

SOUTHERN CALIFORNIA EDISON (SCE) FOR THE PURCHASE OF

RESOURCE ADEQUACY CAPACITY

RECOMMENDATION
Staff recommends that the City Council:

1. Approve Agreement No. A-8712 between EPIC and SCE for the Master Power Purchase and Sale Agreement , including Paragraph 10 (Attachment 1 ) and Confirmation Letter (Attachment 2) for the purchase of resource adequacy capacity; and,

2. Authorize the City Manager or her designee to execute Agreement No. A-8712, in a form substantially as attached, and subject to the City Attorney’s approval.

BACKGROUND
California Public Utilities Commission (CPUC) Decision 22-05-015 (D. 22 -05-015) adopted a Modified Cost Allocation Mechanism (MCAM), Attachment 2, cost recovery process for each investor -owned utility (IOU) that conducted procurement on behalf of load-serving entities (LSEs) that opted out of their specific procurement obligations under CPUC D.19-11-016. Unlike the traditional cost allo cation mechanism, where all customers in an IOU’s service territory cover procurement costs, under the MCAM , the resource costs are recovered only from customers whose LSEs opted out of procurement.

D. 22-05-015 also adopted a one -time provision allowing non-IOU LSEs to negotiate purchasing the portion of D.19 -11-016 capacity that the IOU had procured on behalf of customers who, after 2019, departed IOU service for purchasing LSE’s service.

Report to Mayor and City Council
Re: Approve Agreement No. A-8172, the Master Power Purchase and Sale Agreement and Confirmation Letter between EPIC and SCE for the purchase of Resource Adequacy Capacity
February 21, 2024

Initially, EPIC was ineligible for the MCAM resource adequacy (RA) or electrical grid reliability allocation under D. 22-05-015 due to the timing of its commencement of service to customers.

However, in December of 2023, CPUC D. 23-12-014 granted San Diego Community Power and Clean Energy Alliance’s Petition for Modification of the D. 22-05-015 on the MCAM for Opt-Out and Backstop Procurement Obligations. This action afforded eligibility to additional load-serving entities, including EPIC, to purchase resource adequacy capacity through the MCAM.

Based on EPIC’s 2023 year-ahead load forecast and the 2023 year-ahead forecast for SCE’s 2019 vintage departing load customers, SCE has calculated that EPIC’s share eligible for purchase of the RA procured per D. 19-011-016 is 9.78 MW.

The opportunity for Palmdale to procure additional resource adequacy capacity under the MCAM approach is financially advantageous to EPIC and its customers. To secure resource adequacy capacity under the MCAM approach, EPIC must enter into a Master Power Purchase and Sale Agreement with SCE by March 15, 2024, for inclusion in an SCE advice letter filed to the CPUC on or before April 1, 2024.

DISCUSSION
The opportunity to participate in SCE’s MCAM offering aligns with State mandates and EPIC’s resource adequacy procurement obligations to support overall grid resiliency in a financially advantageous manner to EPIC and its customers.

FISCAL IMPACT
Sufficient revenues will be generated to cover the costs associated with the proposed action.

The annual cost associated with EPIC’s MCAM allocation is estimated to be $1,787,393 beginning in 2025. This contract will displace the need to purchase the same amount of resource adequacy from other sellers in the wholesale power market. The net fiscal impact is expected to be beneficial in the near term and neutral in the longer term. The price paid under this contract will be equivalent to the resource adequacy market price benchmark adopted annually by the CPUC during the term of this agreement, which runs through 2041.

This benchmark price for 2025 will initially be set by the CPUC in October of 2024 and trued up in October of 2025 based on prevailing market conditions. This annual process of updating the market price benchmark and contract price will continue and will be based Report to Mayor and City Council
Re: Approve Agreement No. A-8172, the Master Power Purchase and Sale Agreement and Confirmation Letter between EPIC and SCE for the purchase of Resource Adequacy Capacity
February 21, 2024

on then-current market conditions. While this results in variable costs associated with MCAM capacity deliveries, the prices are expected to approximate the prevailing market value of the product over time.

STRATEGIC PLAN
Goal II: Ensure long-term fiscal health of the City and maintain funding for services.

B. Manage resources, costs, and liabilities to ensure the City’s long-term fiscal health.

Prepared by: Lynn Glidden, P.E., Director of Public Works Certified as to the availability of Funds: Janelle Samson, Director of Operations Approved by: Ronda Perez, City Manager
Approved as to form: William P. Curley, III, City Attorney

ATTACHMENTS
Agrmt No. A-8712 with Southern California Edison
Atch 1 Paragraph 10 to the Collateral Annex SCE Version 2020.10.08 Atch 2 MCAM Resource Adequacy Capacity Confirmation Letter 2022.08.26 Redacted EEI Master Agreement Cover Sheet
SCE version 10.08.2020
COP Agreement No. A-8712
1 [THIS MASTER AGREEMENT IS SUBJECT TO SCE MANAGEMENT REVIEW AND APPROVAL1]

MASTER POWER PURCHASE AND SALE AGREEMENT

COVER SHEET
This Master Power Purchase and Sale Agreement (Version 2.1; modified 4/25/00) (“Master Agreement”) is made as of the following date: (“Effective Date”). The Master Agreement, together with the exhibits, schedules and any written supplements hereto, the Party A Tariff, if any, the Party B Tariff, if any, any designated collateral, credit support, margin agreement, or similar arrangement between the Parties and all Transactions (including any confirmations accepted in accordance with Section 2.3 hereto) shall be referred to as the “Agreement”. The Parties to this Master Agreement are the following:

Name: {Counterparty Legal Name} (“Party A”) Name: Southern California Edison Company (“Party B”) All Notices: All Notices:

Street: Street: 2244 Walnut Grove Ave., G.O.1, Quad 1C
City: Zip: City: Rosemead, CA Zip: 91770
Attn:

Phone:

Email:

Duns:

Federal Tax ID Number:

Attn: Director, Energy Contracts Management
Phone: (626) 302-3126
Facsimile: (626) 302-1103
Email: [email protected]
Duns: 006908818
Federal Tax ID Number: 95-1240335
Invoices:

Attn:

Phone:

Email:

Invoices:

Attn: EPM & Contract Settlements
Phone: (626) 302-8908
Email: [email protected]
Scheduling:

Attn:

Phone:

Email:

Scheduling:

Attn: Manager or Day Ahead Operations
Phone: (626) 307-4425 or (626) 307-4420
Facsimile: (626) 307-4413
E-mail: [email protected]
Payments:

Attn:

Phone:

Email:

Payments:

Attn: EPM & Contract Settlements
Phone: 626-302-8908
E-mail: [email protected]
Wire Transfer:

BNK:

ABA:

ACCT:

Wire Transfer:

BNK: JP Morgan Chase Bank
ABA: 021000021
ACCT: 323-394434
Credit and Collections:

Attn:

Phone:

Email:

Credit:

Attn: Manager of Credit Risk
Phone: (626) 302-3672
1 [SCE Comment: Green highlights are comments or instructions to be deleted prior to final execution.] EEI Master Agreement Cover Sheet
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2 Confirmations:

Attn:

Phone:

Email:

Confirmations:

Attn: Confirmation Coordinator
Phone: (626) 302-3383
Facsimile: (626) 302-3410
Email: [email protected]
Collateral:

Southern California Edison Company
Attn: Manager of Risk Operations & Collateral
Management
2244 Walnut Grove Avenue, GO1 Quad 2A
Rosemead, CA 91770
Phone: (626) 302-3383
Email: [email protected]
With additional Notices of an Event of Default or
Potential Event of Default to:

Attn:

Phone:

Email:

With additional Notices of an Event of Default or Potential Event of Default to:

Southern California Edison Company
2244 Walnut Grove Ave., G.O.1, Quad 1C
Rosemead, CA 91770
Attn: Director, Contracts Management and Administration Phone: (626) 302-3126
Facsimile: (626) 302-8168
Email: [email protected], and
Attention: Director and Managing Attorney Power
Procurement Section
E-mail: [email protected]
The Parties hereby agree that the General Terms and Conditions are incorporated herein, and to the following provisions as provided for in the General Terms and Conditions:

Party A Tariff Tariff Dated Docket Number
Party B Tariff Tariff Original Vol. No. 8 Dated 09/01/2002 Docket Number ER 02-2263-000 EEI Master Agreement Cover Sheet
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3 Article Two
Transaction Terms and
Conditions
Optional provision in Section 2.4. If not checked, inapplicable.

Article Four
Remedies for Failure to
Deliver or Receive
Accelerated Payment of Damages. If not checked, inapplicable.

Article Five
Events of Default;
Remedies 5.1(g) Cross Default for Party A:

Party A: Cross Default Amount $
[Amount and/or Methodology To Be
Negotiated]
Other Entity:[Guarantor, if applicable] Cross Default Amount $ [Amount and/or Methodology To Be
Negotiated]

5.1(g) Cross Default for Party B:

Party B: Southern California Edison
Company.

Cross Default Amount $200,000,000
Other Entity: Not Applicable. Cross Default Amount $

5.6 Closeout Setoff
Option A, as amended.

Option B - Affiliates shall have the meaning set forth in the Agreement unless otherwise specified as follows:

Option C (No Setoff).

Article Eight
Credit and Collateral
Requirements

8.1 Party A Credit Protection:
(a) Financial Information:

Option A, as amended.

Option B Specify:

Option C Specify:

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4 (b) Credit Assurances:

Not Applicable.

Applicable.
(c) Collateral Threshold:

Not Applicable.

Applicable, as specified in Paragraph 10 to the EEI Collateral Annex. (d) Downgrade Event:

Not Applicable.

Applicable.

If applicable, complete the following:

It shall be a Downgrade Event for Party B if Party B’s Credit Rating falls below from S&P or from Moody's or if Party B is not rated by any Ratings Agency.

Other:

Specify:
(e) Guarantor for Party B: Not Applicable.

Guarantee Amount: Not Applicable.

8.2 Party B Credit Protection:
(a) Financial Information:

Option A, as amended.

Option B, as amended. Specify: [Guarantor or other party specified, if applicable]
Option C Specify:
(b) Credit Assurances:

Not Applicable.

Applicable.
(c) Collateral Threshold:

Not Applicable.

Applicable, as specified in Paragraph 10 to the EEI Collateral Annex. (d) Downgrade Event:

Not Applicable.

Applicable.

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5 If applicable, complete the following:

It shall be a Downgrade Event for Party A if Party A’s Credit Rating falls below from S&P or from Moody's or if Party A is not rated by any Ratings Agency.

Other:

Specify:
(e) Guarantor for Party A:

Guarantee Amount: $
Article Ten
Confidentiality Confidentiality Applicable. If not checked, inapplicable.

Schedule M Party A is a Governmental Entity or Public Power System.

Party B is a Governmental Entity or Public Power System.

Add Section 3.6. If not checked, inapplicable.

Add Section 8.4. If not checked, inapplicable.

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6 Other Changes The following changes shall be applicable.

ARTICLE ONE: GENERAL DEFINITIONS. Amend Article One as follows:

Section 1.4 is amended by (i) deleting the word “or” in the first line, and (ii) inserting the words “, or the Friday immediately following the U.S. Thanksgiving holiday”immediately after “Bank holiday”.

Section 1.11 is amended by (i) deleting the words “attorneys’ fees and” and (ii) inserting the words “(excluding attorneys’ fees)” after the word “expenses” in the fifth line.

Section 1.12 is amended to read as follows:
“1.12 ‘Credit Rating’ means with respect to any entity, the rating then assigned to such entity’s unsecured, senior long-term debt or deposit obligations (not supported by third party credit enhancements) by the Ratings Agencies. If no rating is assigned to such entity’s unsecured, senior long- term debt or deposit obligations the Ratings Agencies, then ‘Credit Rating’ shall mean the general corporate credit rating or long- term issuer rating assigned to such entity by the Ratings Agencies. If any entity is rated by more than one Ratings Agency and the ratings are at different levels, then ‘Credit Rating’ means the lowest such rating.”
Section 1.24 is amended by inserting the words “in accordance with Section 5.2(b)” immediately after “reasonable manner”.

Section 1.27 is amended to read as follows:
“1.27 ‘Letter of Credit’ means an irrevocable, nontransferable standby letter ofcredit, substantially in the form of Schedule 1 and acceptable to Secured Party, issued by a major U.S. commercial bank, U.S. financial institution, or the U.S. branch office ofa foreign bank with, in either case, a Credit Rating of at least A- by S&P or A3 by Moody’s. If such financial institution or bank is rated by more than one Ratings Agency and the ratings are at different levels, the lowest rating shall be the Credit Rating for this purpose. Costs of a Letter of Credit shall be borne by the applicant for such Letter of Credit.”
Section 1.28 is amended by inserting the words “in accordance with Section 5.2(b)” immediately after “reasonable manner”.

Section 1.50 is amended by replacing the term “Section 2.4” with the term “Section 2.5”.

Section 1.51 is amended by (i) deleting the phrase “at the Delivery Point” and replacing it with “, from an entity that is not an Af filiate of either Party,”; (ii) in clause (ii) inserting after the phrase “at Buyer’s option,” the phrase “absent a purchase from an entity that is not an Affiliate of either Party,”; and (iii) in the last sentence thereof deleting the phrase “at the Delivery Point” and replacing it with “that is not an Affiliate of either Party”.

Section 1.53 is amended by (i) deleting the phrase “at the Delivery Point” and replacing it with “, to an entity that is not an Affiliate of either Party,”; (ii) in clause (ii) insertingafter the phrase “at Seller’s option,” the phrase “absent a sale to an entity that is not anAffiliate of either Party,”; and (iii) in the last sentence thereof deleting the phrase “at the Delivery Point” and replacing it with “that is not an Affiliate of either Party”.

New Sections 1.62, 1.63, 1.64, 1.65, 1.66, 1.67, and 1.68 are added to read as follows:
“1.62 ‘Forward Price Assessments’ means quotations solicited or obtained in good faith from regularly published and widely-distributed forward price assessments from EEI Master Agreement Cover Sheet
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7 a broker that is not an Affiliate of either Party and who is actively participating in markets for the relevant Products.”
“1.63 ‘Market Quotation Average Price’ means the arithmetic mean of the quotations solicited in good faith from not less than three (3) Reference Market-Makers (as hereinafter defined); provided, however, that the Party obtaining the quotes shall use reasonable efforts to obtain good faith quotations from at least five (5) Reference Market-Makers and, if at least five (5) such quotations are obtained, the Market Quotation Average Price shall be determined by disregarding the highest and lowest quotations and taking the arithmetic mean of the remaining quotations. The quotations shall be based on the offers to sell or bids to buy, as applicable, obtained for transactions substantially similar to each Terminated Transaction. The quote must be obtained assuming that the Party obtaining the quote will provide sufficient credit support for the proposed transaction. Each quotation shall be obtained in good faith by such Party, to the extent reasonably practicable, as of the same day and time (without regard to different time zones) on or as soon as reasonably practicable after the relevant Early Termination Date, such day and time as of which those quotations will be selected shall be specified in accordance with Section 5.2. If fewer than three (3) quotations are obtained, it will be deemed that the Market Quotation Average Price in respect of such Terminated Transaction or group of Terminated Transactions cannot be determined.”
“1.64 ‘Merger Event’ means, with respect to a Party or its Guarantor, that such Party or its Guarantor consolidates or amalgamates with, merges into or with, or transfers substantially all its assets to another entity and (i) the resulting entity fails to assume all the obligations of such Party hereunder or of such Party’s Guarantor under its guaranty, or (ii) the benefits of any credit support provided by such Party pursuant to Article Eight, or any guaranty provided by such Party’s Guarantor, fail to extend to the performance of such resulting, surviving or transferee entity’s obligations hereunder, or (iii) the resulting entity’s creditworthiness is materially weaker than that of such Party or its Guarantor immediately prior to such action. The creditworthiness of the resulting entity shall not be deemed to be ‘materially weaker’ so long as the resulting entity maintains a Credit Rating of at least that of the applicable Party or its Guarantor, as the case may be, immediately prior to the consolidation, merger or transfer.”
“1.65 ‘Ratings Agency’ means any of S&P and Moody’s, and any other ratings agency agreed by the Parties (collectively the ‘Ratings Agencies’).” “1.66 ‘Reference Market-Maker’ means a leading dealer in the relevant market that is not an Affiliate of either Party and that is selected by a Party in good faith among dealers of the highest credit standing which satisfy all the criteria that such Party applies generally at the time in deciding whether to offer or to make an extension of credit. Such dealer may be represented by a broker.”
“1.67 ‘Specified Energy Transaction’ means any transaction (including an agreement with respect to any such transaction) now existing or hereafter entered into between Party A and Party B (or any Guarantor of such Party) which is not a Transaction under this Agreement, which is a transaction under the International Swaps and Derivatives Association Master Agreement, the North American Energy Standards Board Base Contract for Purchase and Sale of Natural Gas, the WSPP Agreement, or under any other agreement with respect to the purchase, sale, or transfer of (a) wholesale physical electric energy, capacity, ancillary services or resource adequacy benefits; (b) wholesale physical natural gas; (c) transmission services or capacity, (d) EEI Master Agreement Cover Sheet
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8 emissions (including greenhouse gas emissions) related credits, allowances or offsets, or (e) financial derivative products related to any of the foregoing.” ARTICLE TWO: TRANSACTION TERMS AND CONDITIONS. Amend Article Two as follows:

Section 2.1 is amended by adding the following sentence to the end thereof “Any Transaction formed and effectuated pursuant to the foregoing shall be considered a ‘writing’ or ‘in writing’ and to have been ‘signed’ by each Party or otherwise binding on the Parties.”
Section 2.2 is amended to delete the second comma after the words “supplements hereto),” and before “the Party” in the second sentence.

Section 2.4 is amended by (i) deleting the words “either orally or” after the phrase “Section

2.3 unless agreed to” in the second to last line thereof.

Section 2.5 is amended (i) to delete the phrase “Unless a Party expressly objects to a Recording (defined below) at the beginning of a telephone conversation,”; (ii) by capitalizing the word “each” in the first sentence; and (iii) replacing the words “Parties to this Master Agreement” with “Parties’ trading and marketing personnel”.

A new Section 2.6 is added to read as follows:
“2.6 Imaged Agreement. Any original executed Master Agreement, Confirmation or other related document may be photocopied and stored on computer tapes and disks (the ‘Imaged Agreement’). The Imaged Agreement, if introduced as evidence on paper, the Confirmation, if introduced as evidence in automated facsimile form, the Recording, if introduced as evidence in its original form and as transcribed onto paper or into other written format, and all computer records of the foregoing, if introduced as evidence in printed format, in any judicial, arbitration, mediation or administrative proceedings, will be admissible as between the Parties to the same extent and under the same conditions as other business records originated and maintained in documentary form. Neither Party shall object to the admissibility of the Recording, the Confirmation, or the Imaged Agreement (or photocopies of the transcription of the Recording, the Confirmation, or the Imaged Agreement) on the basis that such were not originated or maintained in documentary or written form under either the hearsay rule or the best evidence rule. However, nothing in this Section 2.6 shall preclude a Party from challenging the admissibility of such evidence on some other grounds, including, without limitation, the basis that such evidence has been materially or substantially altered from the original.” ARTICLE THREE: OBLIGATIONS AND DELIVERIES . Amend Article Three as follows:

A new Section 3.4 is added to read as follows:
“3.4 Index Transactions. If the Contract Price for a Transaction is determined by reference to an index, then the following provisions shall be applicable to such Transaction.
(a) Market Disruption. If a Market Disruption Event occurs during a Determination Period, the Floating Price for the affected Trading Day(s) shall be determined by reference to the Floating Price specified in the Transaction for the first Trading Day thereafter on which no Market Disruption Event exists; provided, however, if the Floating Price is not so determined within three (3) Business Days after the first Trading Day on which the Market Disruption Event occurred or existed, then EEI Master Agreement Cover Sheet
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9 the Parties shall negotiate in good faith to agree on a Floating Price (or a method for determining a Floating Price), and if the Parties have not so agreed on or before the twelfth Business Day following the first Trading Day on which the Market Disruption Event occurred or existed, then the Floating Price shall be determined in good faith by taking the average of the price quotations for the relevant commodity and relevant Business Days that are obtained from no more than two (2) Reference Market-Makers selected by each Party. (b) For purposes of this Section 3.4, the following definitions shall apply:
(i) ‘Determination Period’ means each calendar month a part or all of which is within the Delivery Period of a Transaction.
(ii) ‘Exchange’ means, in respect of a Transaction, the exchange or principal trading market specified in the relevant Transaction.
(iii) ‘Floating Price’ means a price per unit in $U.S. specified in a Transaction that is based upon a Price Source.
(iv) ‘Market Disruption Event’ means, with respect to any Price Source, any of the following events: (a) the failure of the Price Source to announce or publish the specified Floating Price or information necessary for determining the Floating price; (b) the failure of trading to commence or the permanent discontinuation or material suspension of trading in the relevant options contract or commodity on the Exchange or in the market specified for determining a Floating Price; (c) the temporary or permanent discontinuance or unavailability of the Price Source; (d) the temporary or permanent closing of any Exchange specified for determining a Floating Price; or (e) a material change in the formula for or the method of determining the Floating Price.
(v) ‘Price Source’ means, in respect of a Transaction, the publication (or such other origin of reference, including an Exchange) containing (or reporting) the specified price (or prices from which the specified price is calculated) specified in the relevant Transaction.
(vi) ‘Trading Day’ means a day in respect of which the relevant Price Source published the Floating Price.
(c) Corrections to Published Prices. For purposes of determining a Floating Price for any day, if the price published or announced on a given day and used or to be used to determine a relevant price is subsequently corrected and the correction is published or announced by the person responsible for that publication or announcement within twelve (12) months of the original publication or announcement, either Party may notify the other Party of (i) that correction and (ii) the amount (if any) that is payable as a result of that correction. If, not later than thirty (30) days after publication or announcement of that correction, a Party gives notice that an amount is so payable, the Party that originally either received or retained such amount will, not later than ten (10) Business Days after the effectiveness of that notice, pay, subject to any applicable conditions precedent, to the other Party that amount, together with interest at the Interest Rate for the period from and including the day on which payment originally was (or was not) made to but excluding the day of payment of the refund or payment resulting from that correction.
(d) Calculation of Floating Price. For the purposes of the calculation of a Floating Price, all numbers shall be rounded to three (3) decimal places. If the fourth (4th) EEI Master Agreement Cover Sheet
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10 decimal number is five (5) or greater, then the third (3rd) decimal number shall be increased by one (1), and if the fourth (4th) decimal number is less than five (5), then the third (3rd) decimal number shall remain unchanged.” ARTICLE FIVE: EVENTS OF DEFAULT; REMEDIES . Amend Article Five as follows:

Section 5.1(e) is amended by adding after the word “hereof” the phrase “or any other credit arrangement, including, but not limited to, the Collateral Annex (or any similar agreement) related to this Agreement”.

Section 5.1(f) is amended to read as follows:
“(f) a Merger Event occurs with respect to such Party or its Guarantor, if applicable;” Section 5.1(h)(iv) is amended by inserting the words “made in connection with this Agreement” after the first instance of the word “guaranty”.

Section 5.1(h)(v) is amended by inserting the words “made in connection with this Agreement” after the word “guaranty”.

Section 5.1 is amended by adding the following Sections 5.1(i) and 5.1(j) at the end thereof:
“(i) an event of default occurs (howsoever determined) under a Specified Energy Transaction with respect to such Party and, after giving effect to any applicable notice requirement or grace period, there occurs a liquidation of, an acceleration of obligations under, or an early termination of that Specified Energy Transaction; or (j) the Party disaffirms, disclaims, repudiates, or rejects, in whole or in part, or challenges the validity of, this Master Agreement, any Confirmation executed and delivered by that Party, or any Transaction evidenced by such a Confirmation.

Section 5.2 is amended by (i) inserting “(a)” at the beginning thereof; (ii) reversing the placement of “(i)” and “to”; (iii) inserting after the words “designate a day” the words “and time of day” in clause (i) thereof; (iv) replacing the phrase “as soon thereafter as is reasonably practicable)” with “, then each such Transaction — individually, an ‘Excluded Transaction’ and collectively, the ‘Excluded Transactions’— shall be terminated as soon thereafter as is reasonably practicable, and upon termination shall be deemed to be a Terminated Transaction) and the Termination Payment payable in connection with all Terminated Transactions shall be calculated in accordance with this Section 5.2 and with Section 5.3 below”; and (v) adding the following paragraph at the end thereof:
“(b) The Non-Defaulting Party shall determine its Gains and Losses by determining the Market Quotation Average Price for each Terminated Transaction. In the event the Non-Defaulting Party is not able, after commercially reasonable efforts, to obtain the Market Quotation Average Price with respect to any Terminated Transaction, then the Non-Defaulting Party shall calculate its Gains and Losses for such Terminated Transaction in a commercially reasonable manner by calculating the arithmetic mean of at least three (3) Forward Price Assessments for transactions substantially similar to each Terminated Transaction. In the event the Non-Defaulting Party is not able, after commercially reasonable efforts to obtain at least three (3) Forward Price Assessments with respect to any Terminated Transaction, then the Non- Defaulting Party shall calculate its Gains and Losses for such Terminated Transaction in a commercially reasonable manner by reference to information supplied to it by one or more third parties including, without limitation, index prices, quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads, or other relevant market data in the relevant EEI Master Agreement Cover Sheet
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11 markets; provided, however, that the provider of such information shall not be an Affiliate of either Party. Only in the event the Non-Defaulting Party is not able, after using commercially reasonable efforts, to obtain such third party information, then the Non-Defaulting Party may calculate its Gains and Losses for such Terminated Transaction in a commercially reasonable manner using relevant market data it has available to it internally.” Section 5.3 is amended by (i) deleting the “:” in the second line thereof; (ii) replacing the words “Agreement against” with “Agreement, against” immediately before “(b)”; and (iii) inserting the phrase “any cash then available to the Defaulting Party pursuant to Article Eight,” between the words “Non-Defaulting Party,” and “plus any” in the sixth line thereof.

Section 5.4 is amended by inserting the phrase “but in no event more than fifteen (15) Business Days following the Early Termination Date,” after the phrase “liquidation,” in the second line thereof.

Section 5.6 Option A is amended by (i) inserting the following phrase “with respect to the Specified Energy Transactions,” before the words “and/or (ii)” and (ii) adding the following at the end thereof :
“Notwithstanding anything to the contrary contained in this Master Agreement, or in any other agreement, instrument, or undertaking between the Parties with respect to a Specified Energy Transaction, if an Early Termination Date has been designated pursuant to Section 5.2, then, in addition to the other remedies provided in this Master Agreement, the Non-Defaulting Party may accelerate, liquidate and terminate all, but not less than all, Specified Energy Transactions between the Parties.” Section 5.7 is amended to capitalize the word “early” in line 6 to read “Early”.

ARTICLE SIX: PAYMENT AND NETTING. Amend Article Six as follows:

Section 6.3 is amended to read as follows:
“6.3 Disputes and Adjustments of Invoices. A Party may adjust any invoice rendered by it under this Agreement to correct any arithmetic or computational error or to include additional charges or claims within twenty-four (24) months after the close of the month in which the obligations being invoiced arose. A receiving Party may, in good faith, dispute the correctness of any invoice or of any adjustment to any invoice previously rendered to it by providing notice to the other Party on or before the later of (i) twelve (12) months of the date of receipt of such invoice or adjusted invoice, or (ii) twenty-four (24) months after the close of the month in which the obligation being invoiced arose. Failure to provide such notice within the time frame set forth in the preceding sentence waives the dispute with respect to such invoice. A Party disputing all or any part of an invoice or an adjustment to an invoice previously rendered to it may pay only the undisputed portion of the invoice when due, provided such Party provides notice to the other Party of the basis for and amount of the disputed portion of the invoice that has not been paid. The disputed portion of the invoice must be paid within two (2) Business Days of resolution of the dispute, along with interest accrued at the Interest Rate from and including the original due date of the invoice to but excluding the date the disputed portion of the invoice is actually paid. Inadvertent overpayments shall be returned upon request or deducted by the Party receiving such overpayment from subsequent payments, with interest accrued at the Interest Rate from and including the date of such overpayment but excluding the date repaid or deducted by the Party receiving such overpayment. An invoice can only be adjusted or amended after it was originally rendered within the time frames EEI Master Agreement Cover Sheet
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12 set forth in this Section 6.3. If an invoice is not rendered within twenty-four (24) months after the close of the month in which the payment obligations arose, the right to payment for that month under this Agreement is waived.” Section 6.7 is amended to replace the phrase “Section 6.1” with the phrase “Section 6.2”.

ARTICLE SEVEN: LIMITATIONS. Amend Article Seven as follows:

Section 7.1 is amended to (i) delete the phrase “EXCEPT AS SET FORTH HEREIN” in the first sentence; and (ii) in the fifth sentence (a) replace in its entirety the phrase “UNLESS EXPRESSLY HEREIN PROVIDED” with “NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY”; (b) add the following phrase “SET FORTH IN THIS AGREEMENT” after the words “INDEMNITY PROVISION”; and (c) add the following phrase “; PROVIDED, HOWEVER, THAT

NOTHING IN THIS PROVISION SHALL AFFECT THE ENFORCEABILITY OF SECTIONS 5.2 AND 5.3 OF THIS AGREEMENT” after the words “OR OTHERWISE”.

ARTICLE EIGHT: CREDIT AND COLLATERAL REQUIREMENTS . Amend Article Eight as follows:

Section 8.1(a) Option A is amended to add (i) the following phrase “(income statement, balance sheet, statement of cash flows and statement of retained earnings and all accompanying notes) after the words “consolidated financial statements” in the third line; (ii) the phrase “setting forth in each case in comparative form the figures for the previous year” after the words “for such fiscal year,” in the third line; and (iii) the phrase “and the portion of the fiscal year through the end of such quarter, setting forth in each case in comparative form the figures for the previous year certified in accordance with all applicable laws and regulations, including without limitation all applicable Securities and Exchange Commission rules and regulations, provided however, for the purposes of this (i) and (ii), if Party B’s financial statements are publicly available electronically on the Securities and Exchange Commission’s website or Party B’s website, then Party B shall be deemed to have met this requirement” after the words “for such fiscal quarter” in the fifth line.

Section 8.2(a) Option A is amended to add (i) the following phrase “(income statement, balance sheet, statement of cash flows and statement of retained earnings and all accompanying notes)” after the words “consolidated financial statements” in the third line; (ii) the phrase “setting forth in each case in comparative form the figures for the previous year” after the words “for such fiscal year,” in the third line; and (iii) the phrase “and the portion of the fiscal year through the end of such quarter, setting forth in each case in comparative form the figures for the previous year certified by a Responsible Officer as being fairly stated in all material respects (subject to normal year end audit adjustments)], provided however, for the purposes of this (i) and (ii), if Party A’s financial statements are publicly available electronically on the Securities and Exchange Commission’s website or Party A’s website, then Party A shall be deemed to have met this requirement” after the words “for such fiscal quarter” in the fifth line; and (v) at the end thereof the phrase “For purposes of this Section, ‘Responsible Officer’ shall mean the Chief Financial Officer, Treasurer or any Assistant Treasurer of Party A or any employee of Party A designated by any of the foregoing.”.

A new Section 8.4 is added to read as follows:
“8.4 California Commercial Code Waiver. This Agreement and the Collateral Annex set forth the entirety of the agreement of the Parties regarding credit, collateral and adequate assurances. Except as expressly set forth in the options elected by the Parties EEI Master Agreement Cover Sheet
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13 in respect of Sections 8.1 and 8.2, in Section 8.3, and in the relevant portions of the Collateral Annex, neither Party:
(a) has or will have any obligation to post margin, provide letters of credit, pay deposits, make any other prepayments or provide any other financial assurances, in any form whatsoever, nor
(b) will have reasonable grounds for insecurity with respect to the creditworthiness of a Party that is complying with the relevant provisions of Section 8 of this Master Agreement and of the relevant provisions of the Collateral Annex;
and all implied rights relating to financial assurances arising from Section 2609 of the California Commercial Code or case law applying similar doctrines, are hereby waived.”
ARTICLE NINE: GOVERNMENTAL CHARGES. Amend Article Nine as follows:

Section 9.2, is amended to add the words “, charges, or fees” after the word “taxes” in the first line thereof.

ARTICLE TEN: MISCELLANEOUS. Amend Article Ten as follows:

Section 10.2(vi) is amended to add the phrase “(for purposes of this Section 10.2(vi), Party B shall be deemed to have no Affiliates)” after the word “Affiliates”.

Section 10.2(xii) is amended to read as follows:
“(xii) each Transaction that is not executed or traded on a ‘trading facility’, as defined in the Commodity Exchange Act, as otherwise amended, updated or modified from time to time, is subject to individual negotiation by the Parties.” Section 10.4 is amended by adding the following sentence at the end thereof:
“Neither Party shall be liable with respect to any Claim to the extent that such Claim resulted from the negligence, willful misconduct, or bad faith of the indemnified Party.”
Section 10.5 is amended as follows:
(a) add the following phrase to the end of clause (i) immediately after the word “arrangements” the phrase “to any person or entity whose creditworthiness is equal to or higher than that of such Party”; (b) in clause (ii) replace the words “affiliate” and “affiliate’s” with, respectively “Affiliate” and “Affiliate’s”; and (c) in clause (iii) immediately after the words “substantially all of the assets” insert the words “of such Party and”.

Section 10.6 is amended to read as follows:
“10.6 Governing Law; Venue; Dispute Resolution.
(a) Governing Law and Venue: THIS AGREEMENT AND THE RIGHTS AND

DUTIES OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY

AND CONSTRUED, ENFORCED AND PERFORMED IN ACCORDANCE

WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. EACH PARTY WAIVES ITS

RESPECTIVE RIGHT TO ANY JURY TRIAL WITH RESPECT TO ANY

DISPUTE ARISING UNDER OR IN CONNECTION WITH THIS EEI Master Agreement Cover Sheet
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14 AGREEMENT. The Parties hereby consent to conduct all dispute resolution, judicial actions or proceedings arising directly, indirectly or otherwise in conjunction with, out of, related to, or arising from this Agreement in Los Angeles County, California.
(b) Dispute Resolution:
(i) Mediation. The Parties agree that any and all disputes, claims or controversies arising out of, relating to, concerning or pertaining to this Agreement, or to either Party’s performance or failure of performance under this Agreement, which disputes, claims, or controversies the Parties have been unable to resolve by informal methods after undertaking a good faith effort to do so, shall first be submitted to Judicial Arbitration and Mediation Services, Inc. (‘JAMS’), its successor, or any other mutually agreeable neutral (the ‘Mediator’) for mediation, and if the matter is not resolved through mediation, then it shall be submitted as provided below for final and binding arbitration.

The Parties agree that there will be no interlocutory appellate relief (such as writs) available. Any dispute resolution process pursuant to this Section 10.6(b) shall be commenced within one (1) year of the date of the occurrence of the facts giving rise to the dispute, without regard to the date such facts are discovered; provided, if the facts giving rise to the dispute were not reasonably capable of being discovered at the time of their occurrence, then such one (1) year period shall commence on the earliest date that such facts were reasonably capable of being discovered, and in no event more than four (4) years after the occurrence of the facts giving rise to the dispute. If any dispute resolution process pursuant to this Section 10.06(b) with respect to a dispute is not commenced within such one (1) year time period, such dispute shall be waived and forever barred, without regard to any other limitations period set forth by law or statute.

Either Party may initiate the mediation by providing to the other Party a written request for mediation setting forth the subject of the dispute and the relief requested.

The Parties will cooperate with one another in selecting the Mediator from the JAMS’ panel of neutrals, or in selecting a mutually acceptable non-JAMS Mediator, and in scheduling the time and place of the mediation.

Such selection and scheduling will be completed within forty-five (45) days after a Party provides a written request for mediation.

Unless otherwise agreed to by the Parties, the mediation will not be scheduled for a date that is greater than one hundred twenty (120) days after a Party provides a written request for mediation.

The Parties covenant that they will participate in the mediation in good faith, and that they will share equally in its costs (other than each Party’s individual attorneys’ fees and costs related to the Party’s participation in the mediation, which fees and costs will be borne by such Party).

All offers, promises, conduct and statements, whether oral or written, made in connection with or during the mediation by either of the Parties, their agents, representatives, employees, experts and attorneys, and by the Mediator or any of the Mediator’s agents, representatives and employees, will not be subject to discovery and will be confidential, privileged and inadmissible for any purpose, EEI Master Agreement Cover Sheet
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15 including impeachment, in any arbitration or other proceeding between or involving the Parties, or either of them, provided, evidence that is otherwise admissible or discoverable will not be rendered inadmissible or non- discoverable as a result of its use in the mediation.
(ii) Arbitration. Either Party may initiate binding arbitration with respect to the matters first submitted to mediation by making a written demand for binding arbitration before a single, neutral arbitrator (the ‘Arbitrator’) within sixty (60) days following the unsuccessful conclusion of the mediation provided for in Section 10.06(b)(i). If a written demand for arbitration is not provided by either Party within sixty (60) days following the unsuccessful conclusion of the mediation provided for in Section 10.06(b)(i), the dispute resolution process shall be deemed complete and further resolution of such dispute shall be barred, without regard to any other limitations period set forth by law or statute.

The Parties will cooperate with one another in promptly selecting the Arbitrator and shall further cooperate in scheduling the arbitration to commence no later than 180 days from the date of the initial written demand for binding arbitration.

If, notwithstanding their good faith efforts, the Parties are unable to agree upon a mutually acceptable Arbitrator, the Arbitrator shall be appointed as provided for in California Code of Civil Procedure Section 1281.6.

Unless otherwise agreed to by the Parties, the individual acting as the Mediator shall be disqualified from serving as the Arbitrator in the dispute, although the Arbitrator may be another member of the JAMS panel of neutrals or such other panel of neutrals from which the Parties have agreed to select the Mediator.

Upon a Party’s written demand for binding arbitration, such dispute, claim or controversy submitted to arbitration, including the determination of the scope or applicability of this Agreement to arbitrate, shall be determined by binding arbitration before the Arbitrator, in accordance with the laws of the State of California, without regards to principles of conflicts of laws.

Except as provided for herein, the arbitration shall be conducted by the Arbitrator in accordance with the rules and procedures for arbitration of complex business disputes for the organization with which the Arbitrator is associated.

Absent the existence of such rules and procedures, the arbitration shall be conducted in accordance with the California Arbitration Act, California Code of Civil Procedure Section 1280 et seq and California procedural law (including the Code of Civil Procedure, Civil Code, Evidence Code and Rules of Court, but excluding local rules).

Notwithstanding the rules and procedures that would otherwise apply to the arbitration, and unless the Parties agree to a different arrangement, the place of the arbitration shall be in Los Angeles County, California.

Also, notwithstanding the rules and procedures that would otherwise apply to the arbitration, and unless the Parties agree to a different arrangement, discovery will be limited as follows:
(1) Before discovery commences, the Parties shall exchange an initial disclosure of all documents and percipient witnesses which they intend to rely upon or use at any arbitration proceeding (except for documents and witnesses to be used solely for impeachment);
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16 (2) The initial disclosure will occur within thirty (30) days after the initial conference with the Arbitrator or at such time as the Arbitrator may order;
(3) Discovery may commence at any time after the Parties’ initial disclosure;
(4) The Parties will not be permitted to propound any interrogatories or requests for admissions;
(5) Discovery will be limited to twenty-five (25) document requests (with no subparts), three (3) lay witness depositions, and three (3) expert witness depositions (unless the Arbitrator holds otherwise following a showing by the Party seeking the additional documents or depositions that the documents or depositions are critical for a fair resolution of the Dispute or that a Party has improperly withheld documents); (6) Each Party is allowed a maximum of three (3) expert witnesses, excluding rebuttal experts;
(7) Within sixty (60) days after the initial disclosure, or at such other time as the Arbitrator may order, the Parties shall exchange a list of all experts upon which they intend to rely at the arbitration proceeding; (8) Within thirty (30) days after the initial expert disclosure, the Parties may designate a maximum of two (2) rebuttal experts;
(9) Unless the Parties agree otherwise, all direct testimony will be in form of affidavits or declarations under penalty of perjury; and (10) Each Party shall make available for cross examination at the arbitration hearing its witnesses whose direct testimony has been so submitted.

Subject to Section 7.1, the Arbitrator will have the authority to grant any form of equitable or legal relief a Party might recover in a court action. The Parties acknowledge and agree that irreparable damage would occur if certain provisions of this Agreement are not performed in accordance with the terms of the Agreement, that money damages would not be a sufficient remedy for any breach of these provisions of this Agreement, and that the Parties shall be entitled, without the requirement of posting a bond or other security, to specific performance and injunctive or other equitable relief as a remedy for a breach of Section 10.11 of this Agreement.

Judgment on the award may be entered in any court having jurisdiction.

The Arbitrator shall, in any award, allocate all of the costs of the binding arbitration (other than each Party’s individual attorneys’ fees and costs related to the Party’s participation in the arbitration, which fees and costs shall be borne by such Party), including the fees of the Arbitrator, against the Party who did not prevail.

Until such award is made, however, the Parties shall share equally in paying the costs of the arbitration.

At the conclusion of the arbitration hearing, the Arbitrator shall prepare in writing and provide to each Party a decision setting forth factual findings, legal analysis, and the reasons on which the Arbitrator’s decision is based. The Arbitrator shall also have the authority to resolve claims or issues in advance of the arbitration hearing that would be appropriate for a California superior court EEI Master Agreement Cover Sheet
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17 judge to resolve in advance of trial. The Arbitrator shall not have the power to commit errors of law or fact, or to commit any abuse of discretion, that would constitute reversible error had the decision been rendered by a California superior court. The Arbitrator’s decision may be vacated or corrected on appeal to a California court of competent jurisdiction for such error. Unless otherwise agreed to by the Parties, all proceedings before the Arbitrator shall be reported and transcribed by a certified court reporter, with each Party bearing one-half of the court reporter’s fees.”
Section 10.8 is amended to replace in the penultimate sentence thereof the phrase “twelve (12) months” with the phrase “two (2) years”.

Section 10.10 is amended to read as follows:
“10.10 Bankruptcy Issues. The Parties intend that (i) all Transactions constitute a ‘forward contract’ within the meaning of the United States Bankruptcy Code (the ‘Bankruptcy Code’) or a ‘swap agreement’ within the meaning of the Bankruptcy Code; (ii) all payments made or to be made by one Party to the other Party pursuant to this Agreement constitute ‘settlement payments’ within the meaning of the Bankruptcy Code; (iii) all transfers of Performance Assurance by one Party to the other Party under this Agreement constitute ‘margin payments’ within the meaning of the Bankruptcy Code; (iv) this Agreement constitutes a ‘master netting agreement’ within the meaning of the Bankruptcy Code; and (v) each of Party A and Party B are “forward contract merchants” within the meaning of the Bankruptcy Code.

Each Party further agrees that, for purposes of this Agreement, the other Party is not a ‘utility’ as such term is used in 11 U.S.C. Section 366, each Party waives and agrees not to assert the applicability of the provisions of 11 U.S.C. Section 366 in any bankruptcy proceeding wherein such Party is a debtor. In any such proceeding, each Party further waives the right to assert that the other Party is a provider of last resort to the extent such term relates to 11 U.S.C. Section 366 or another provision of 11 U.S.C. Section 101-1532.”
Section 10.11 is amended to read as follows:
“10.11 Confidentiality. If the Parties have elected on the Cover Sheet to make this Section 10.11 applicable to this Master Agreement, neither Party shall disclose the terms or conditions of this Agreement to a third party (other than the Party’s or the Party’s Affiliates’ officers, directors, employees, lenders, counsel, accountants, advisors, or rating agencies who have a need to know such information and have agreed to keep such terms strictly confidential and to take reasonable precautions to protect against disclosure of such terms) except (i) in order to comply with any applicable law, order, regulation, ruling, summons, subpoena, exchange rule, or accounting disclosure rule or standard, or to make any showing required by any applicable governmental authority; (ii) to the extent necessary for the enforcement of this Agreement or to implement any Transaction; (iii) as may be obtained from a non- confidential source that disclosed such information in a manner that did not violate its obligations to the non-disclosing Party or its Guarantor in making such disclosure; (iv) to the extent such disclosure to a third party is for the sole purpose of calculating a published index, so long as such third party (1) has agreed prior to the disclosure to protect the specific information disclosed from public disclosure and (2) is a party engaged in the business of collecting such information for the purpose of establishing, creating, or formulating a published index; (v) to the extent such information is or becomes generally available to the public prior to such disclosure by a Party; (vi) when required to be released in connection with any regulatory proceeding (provided that the releasing Party makes reasonable efforts to obtain confidential treatment of EEI Master Agreement Cover Sheet
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18 the information being released); or (vii) with respect to Party B, as may be furnished to its duly authorized regulatory and governmental agencies or entities, including without limitation the California Public Utilities Commission (the “CPUC”) and all divisions thereof, and to Party B’s Procurement Review Group (the “PRG”), a group of participants including members of the CPUC and other governmental agencies and consumer groups established by the CPUC in D.02-08-071 and D.03-06-071; provided, Party B shall have no liability to Party A in the event of any unauthorized use or disclosure by such entities. The existence of this Agreement is not subject to this confidentiality obligation; provided that neither Party shall make any public announcement relating to this Agreement unless required pursuant to subsection (i) or (vi) of the foregoing sentence of this Section 10.11. The Parties shall be entitled to all remedies available at law or in equity to enforce, or seek relief in connection with, this confidentiality obligation. With respect to information provided in connection with a Transaction, this obligation shall survive for a period of three (3) years following the expiration or termination of such Transaction. With respect to information provided under this Agreement, this obligation shall survive for a period of three (3) years following the expiration or termination of this Agreement. For the purposes of this Section 10.11, “Affiliate” for Party A shall mean and “Affiliate” for Party B shall mean Edison International.” New Sections 10.12, 10.13, 10.14, 10.15, 10.16, and 10.17 shall be added as follows:
“10.12 No Agency. Except as otherwise provided explicitly herein, in performing their respective obligations under this Agreement, neither Party is acting, or is authorized to act, as the other Party’s agent.”
“10.13 Mobile Sierra Doctrine.
(a) Absent the agreement of all Parties to the proposed change, the standard of review for changes to any rate, charge, classification, term or condition of this Agreement, whether proposed by a Party (to the extent that any waiver in subsection (b) below is unenforceable or ineffective as to such Party), a non- party or FERC acting sua sponte, shall be the ‘public interest’ standard of review set forth inUnited Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956),Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956), and clarified by Morgan Stanley Capital Group, Inc. v.

Public Util. Dist. No. 1 of Snohomish, 554 U.S. 527 (2008), and NRG Power Marketing LLC v. Maine Public Utility Commission, 558 U.S. 527 (2010) (the ‘Mobile Sierra’ doctrine).
(b) Notwithstanding any provision of Agreement, and absent the prior written agreement of the Parties, each Party, to the fullest extent permitted by applicable laws, for itself and its respective successors and assigns, hereby also expressly and irrevocably waives any rights it can or may have, now or in the future, whether under Sections 205, 206, or 306 of the Federal Power Act or otherwise, to seek to obtain from FERC by any means, directly or indirectly (through complaint, investigation, supporting a third party seeking to obtain or otherwise), and each hereby covenants and agrees not at any time to seek to so obtain, an order from FERC changing any Section of this Agreement specifying any rate or other material economic terms and conditions agreed to by the Parties.”
“10.14 Multiple Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement. The exchange of copies of this Agreement and of signature pages EEI Master Agreement Cover Sheet
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19 by facsimile transmission, Portable Document Format (i.e., PDF) or by other electronic means constitutes effective execution and delivery of this Agreement as to the Parties and may be used in lieu of the original Agreement for all purposes.” “10.15 Independent Contractors. The Parties are independent contractors.

Nothing contained herein shall be deemed to create an association, joint venture, or partnership relationship between the Parties or to impose any partnership obligations or liability on either Party in any way.”
“10.16 Severability. If any term, section, provision or other part of this Agreement, or the application of any term, section, provision or other part of this Agreement, is held to be invalid, illegal or void by a court or regulatory agency of proper jurisdiction, all other terms, sections, provisions or other parts of this Agreement shall not be affected thereby but shall remain in force and effect unless a court or regulatory agency holds that the provisions are not separable from all other provisions of this Agreement.”
“10.17 Rules of Construction.
(a) The word “or” when used in this Agreement includes the meaning “and/or” unless the context unambiguously dictates otherwise. (b) Where days are not specifically designated as Business Days, they will be considered as calendar days.
(c) All references to time shall be in PPT unless stated otherwise.” SCHEDULE P: PRODUCTS AND DEFINITIONS . Amend Schedule P as follows:

The following definitions are added:
“ ‘CAISO Energy’ means with respect to a Transaction, a Product under which the Seller shall sell and the Buyer shall purchase a quantity of energy equal to the hourly quantity without Ancillary Services (as defined in the Tariff) that is or will be scheduled as a schedule coordinator to schedule coordinator transaction pursuant to the applicable tariff and protocol provisions of the CAISO (as amended from time to time, the ‘Tariff’) for which the only excuse for failure to deliver or receive is an Uncontrollable Force (as defined in the Tariff).”
The following products are added:
“Other Products and Service Levels.

If the Parties agree to a service level or product defined by a different agreement, set of rules, tariff, or protocol (herein, the ‘agreement’) (i.e., the WSPP Agreement) for a particular Transaction, then, unless the Parties expressly state and agree that all the terms and conditions of such other agreement will apply, such reference to a service level or product defined by such other agreement means that the service level or product for that Transaction is subject to the applicable regional independent system operator and/or utility reliability requirements and guidelines as well as the permitted excuses for performance, Force Majeure, Uncontrollable Forces, or other such excuses applicable to performance under such other agreement, to the extent inconsistent with the terms of this Agreement, provided, however, that all other terms and conditions of this Agreement shall and do remain applicable including, without limitation, Section 2.2; and provided, further that with respect to any Transaction for a product or service level defined by such other agreement, the methodology for calculating the payments for failure to deliver or receive shall be in accordance with EEI Master Agreement Cover Sheet
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20 Sections 4.1 and 4.2 of the Master Agreement; provided, further that the ‘Accelerated Payment of Damages’ addressed in Article Four and agreed to in the Cover Sheet of the Master Agreement shall continue to apply.”
“Into (the ‘Receiving Transmission Provider’), Seller’s Daily Choice” is deleted in its entirety.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Parties have caused this Master Agreement to be duly executed as of the date first above written.

Party A: {Counterparty Legal Name} Party B: SOUTHERN CALIFORNIA EDISON COMPANY By: By:

Name: {Name of Authorized Signer} Name: {Name of SCE Signer} Title: {Title of Authorized Signer} Title: {Title of SCE Signer} DISCLAIMER: This Master Power Purchase and Sale Agreement was prepared by a committee of representatives of Edison Electric Institute (“EEI”) and National Energy Marketers Association (“NEM”) member companies to facilitate orderly trading in and development of wholesale power markets. Neither EEI nor NEM nor any member company nor any of their agents, representatives or attorneys shall be responsible for its use, or any damages resulting there from. By providing this Agreement EEI and NEM do not offer legal advice and all users are urged to consult their own legal counsel to ensure that their commercial objectives will be achieved and their legal interests are adequately protected.

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1 SCHEDULE 1 – Form of Letter of Credit

IRREVOCABLE NONTRANSFERABLE STANDBY LETTER OF CREDIT
Bank Reference Number:

Issuance Date:

Issuing Bank:
[insert bank name and address]
Applicant:
[insert applicant name and address]
Beneficiary:
[insert beneficiary name and address]
Available Amount: [insert amount and spell out]
Expiration Date: [insert date]
Ladies and Gentlemen:
(the “Bank”) hereby establishes this Irrevocable
Nontransferable Standby Letter of Credit (“Letter of Credit”) in favor of Southern California Edison Company, a California corporation (the “Beneficiary”), for the account of , a corporation, also known as ID# (the “Applicant”), for the amount stated above (the “Available Amount”), effective immediately.

This Letter of Credit shall be of no further force or effect at 5:00 p.m., California time on the expiration date stated above or, if such day is not a Business Day (as hereinafter defined), on the next Business Day (as may be extended pursuant to the terms of this Letter of Credit) (the “Expiration Date”).

For the purpose hereof, “Business Day” shall mean any day other than:

1. A Saturday or a Sunday,

2. A day on which banking institutions in the city of Los Angeles, California, are required or authorized by Law to remain closed, or

3. A day on which the payment system of the Federal Reserve System is not operational.

It is a condition of this Letter of Credit that the Expiration Date shall be automatically extended without amendment for one (1) year from the Expiration Date hereof or any future Expiration Date unless at least sixty (60) days prior to such Expiration Date, we send notice to you by certified mail or hand delivered courier, at the address stated below, that we elect not to extend this Letter of Credit for any such additional period.

Subject to the terms and conditions herein, funds under this Letter of Credit are available to Beneficiary by complying presentation on or before 5:00 p.m. California time, on or before the Expiration Date of the following:

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2 1. A copy of this Letter of Credit and all amendments;

2. A copy of the Drawing Certificate in the form of Attachment “A” attached hereto and which forms an integral part hereof, duly completed and bearing the signature of an authorized representative of the Beneficiary signing as such; and

3. A copy of the Sight Draft in the form of Attachment “B” attached hereto and which forms an integral part hereof, duly completed and bearing the signature of an authorized representative of the Beneficiary.

Drawings may also be presented by telecopy (“Fax”) to fax number [insert number] under telephone pre-advice to [insert number] or alternatively to [insert number]; provided that such Fax presentation is received on or before the Expiration Date on this instrument in accordance with the terms and conditions of this Letter of Credit. It being understood that any such fax presentation shall be considered the sole operative instrument of drawing. In the event of presentation by fax, the original documents should not also be presented.

Partial drawing of funds shall be permitted under this Letter of Credit, and this Letter of Credit shall remain in full force and effect with respect to any continuing balance; provided, the Available Amount shall be reduced by the amount of each such drawing.

This Letter of Credit is not transferable or assignable. Any purported transfer or assignment shall be void and of no force or effect.

All correspondence and any drawings (other than those made by facsimile) hereunder are to be directed to [Bank address/contact].

All notices to Beneficiary shall be in writing and are required to be sent by certified letter, overnight courier, or delivered in person to: [insert Beneficiary name and address]. Only notices to Beneficiary meeting the requirements of this paragraph shall be considered valid.

Any notice to Beneficiary which is not in accordance with this paragraph shall be void and of no force or effect.

Banking charges shall be the sole responsibility of the Applicant.

This Letter of Credit sets forth in full our obligations and such obligations shall not in any way be modified, amended, amplified or limited by reference to any documents, instruments or agreements referred to herein, except only the attachment referred to herein; and any such reference shall not be deemed to incorporate by reference any document, instrument or agreement except for such attachment. Except in the case of an increase in the Available Amount or extension of the Expiration Date, this Letter of Credit may not be amended or modified without the Beneficiary’s prior written consent.

The Bank engages with the Beneficiary that Beneficiary’s drafts drawn under and in compliance with the terms of this Letter of Credit will be duly honored if presented to the Bank on or before the Expiration Date.

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3 Except so far as otherwise stated, this Letter of Credit is subject to the International Standby Practices ISP98 (also known as ICC Publication No. 590), or revision currently in effect (the “ISP”). As to matters not covered by the ISP, the laws of the State of California, without regard to the principles of conflicts of laws thereunder, shall govern all matters with respect to this Letter of Credit.

AUTHORIZED SIGNATURE for Bank
By
Name: [print name]
Title: [print title]
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4 ATTACHMENT A
Drawing Certificate
TO [ISSUING BANK NAME & ADDRESS]

IRREVOCABLE NONTRANSFERABLE STANDBY LETTER OF CREDIT
REFERENCE NUMBER:

DATE:
[insert Beneficiary name] (the “Beneficiary”), demands [Issuing Bank Name] (the “Bank”) payment to the order of the Beneficiary the amount of U.S. $ ( U.S. Dollars), drawn under the Letter of Credit referenced above (the “Letter of Credit”), for the following reason(s) [check applicable provision]:
[ ] A. An Event of Default (as defined in the Edison Electric Institute Master Power Purchase & Sale Agreement Version 2.1 (modified on 4/25/00) between [insert Counterparty name] or its successor (the “Counterparty”) and Beneficiary, dated as of [Date of Execution], as may be amended from time to time, (the “EEI Agreement”), with respect to the Counterparty has occurred and is continuing.
[ ] B. The Letter of Credit will expire in fewer than twenty (20) Business Days (as defined in the EEI Agreement) from the date hereof, and the Counterparty or its successor has not provided Beneficiary alternative Performance Assurance (as defined in the EEI Agreement) acceptable to Beneficiary.

Unless otherwise provided herein, capitalized terms which are used and not defined herein shall have the meaning given each such term in the Letter of Credit.

Authorized Signature for Beneficiary:
[insert Beneficiary name]
By:

Name: [print name]
Title: [print title]
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5 ATTACHMENT B

SIGHT DRAFT
[Insert Date]
TO:
[ISSUING BANK NAME & ADDRESS]
PAY AT SIGHT TO THE ORDER OF [INSERT BENEFICIARY NAME] (THE “BENEFICIARY”) THE AMOUNT OF USD [INSERT AMOUNT] DRAWN UNDER [ISSUING BANK NAME] IRREVOCABLE NONTRANSFERABLE STANDY LETTER OF CREDIT NUMBER [INSERT NUMBER] ISSUED ON [INSERT DATE].

FUNDS PAID PURSUANT TO THE PROVISIONS OF THE LETTER OF CREDIT SHALL BE WIRE

TRANSFERRED TO THE BENEFICIARY IN ACCORDANCE WITH THE FOLLOWING INSTRUCTIONS:
[INSERT WIRING INSTRUCTION]

AUTHORIZED SIGNATURE
[INSERT BENEFICIARY NAME]
NAME: [PRINT NAME]
TITLE: [PRINT TITLE]
Paragraph 10 to the Collateral Annex
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1 PARAGRAPH 10
to the

COLLATERAL ANNEX
to the

EEI MASTER POWER PURCHASE AND SALE AGREEMENT

Between {Counterparty Legal Name} (“Party A”) and
Southern California Edison Company (“SCE” or “Party B”)

CREDIT ELECTIONS COVER SHEET
Paragraph 10. Elections and Variables

I. Collateral Threshold.

A. Party A Collateral Threshold.

☒ $ 0 (the “Threshold Amount”); provided, however, that the Collateral Threshold for Party A shall be zero upon the occurrence and during the continuance of an Event of Default or a Potential Event of Default with respect to Party A; and provided further that, in the event that, and on the date that, Party A cures the Potential Event of Default on or prior to the date that Party A is required to post Performance Assurance to Party B pursuant to a demand made by Party B pursuant to the provisions of the Collateral Annex on or after the occurrence of such Potential Event of Default, (i) the Collateral Threshold for Party A shall automatically increase from zero to the Threshold Amount and (ii) Party A shall be relieved of its obligation to post Performance Assurance pursuant to such demand.

☐ (a) The amount (the “Threshold Amount”) set forth below under the heading “Party A Collateral Threshold” opposite the Credit Rating for [Party A][Party A’s Guarantor] on the relevant date of determination, or (b) zero if on the relevant date of determination [Party A][its Guarantor] does not have a Credit Rating from the Ratings Agency specified below or an Event of Default or a Potential Event of Default with respect to Party A has occurred and is continuing; provided, however , in the event that, and on t he date that, Party A cures the Potential Event of Default on or prior to the date that Party A is required to post Performance Assurance to Party B pursuant to a demand made by Party B pursuant to the provisions of the Collateral Annex on or after the occurrence of such Potential Event of Default, (i) the Collateral Threshold for Party A shall automatically increase from zero to the Threshold Amount and (ii) Party A shall be relieved of its obligation to post Performance Assurance pursuant to such demand.

Party A
Collateral Threshold

Credit Rating
$ (or above)
$
$
$
$
$ Below
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2 ☐ The amount (“Threshold Amount”) which is the lowest of:

(1) the amount set forth below under the heading “Party A Collateral Threshold” opposite the lower of the Credit Ratings for Party A or, if applicable, Party A’s Guarantor on the relevant date of determination. If Party A or, if applicable, its Guarantor does not have a Credit Rating on the relevant date of determination from at least one of the Ratings Agencies specified below, the Collateral Threshold shall be $0 (zero);

(2) 80% of the amount of the guaranty agreement, as amended from time to time, provided by Party A’s Guarantor, if any, for the benefit of Party B; or

(3) $0 (zero) if an Event of Default or a Potential Event of Default with respect to Party A has occurred and is continuing:

Party A
Collateral Threshold
Moody’s
Credit Rating
S&P
Credit Rating
Aa3 or above AA- or above
A1 A+
A2 A
A3 A-
Baa1 BBB+
Baa2 BBB
Baa3 BBB-
$ 0 (zero) Ba1 or below BB+ or below

☐ The amount of the Guaranty Agreement dated from , as amended from time to time but in no event shall Party A’s Collateral Threshold be greater than $ .

☐ Other – see attached threshold terms

B. Party B Collateral Threshold.

☐ $ (the “Threshold Amount”); provided, however, that the Collateral Threshold for Party B shall be zero upon the occurrence and during the continuance of an Event of Default or a Potential Event of Default with respect to Party B; and provided further that , in the event that, and on the date that, Party B cures the Potential Event of Default on or prior to the date that Party B is required to post Performance Assurance to Party A pursuant to a demand made by Party A pursuant to the provisions of the Collateral Annex on or after the occurrence of such Potential Event of Default, (i) the Collateral Threshold for Party B shall automatically increase from zero to the Threshold Amount and (ii) Party B shall be relieved of its obligation to post Performance Assurance pursuant to such demand.

☐ (a) The amount (the “Threshold Amount”) set forth below under the heading “Party B Collateral Threshold” opposite the Credit Rating for [Party B][Party B’s Guarantor] on the relevant date of determination, or (b) zero if on the relevant date of determination [Party B][its Guarantor] does not have a Credit Rating from the Ratings Agency specified below or an Event of Default or a Potential Event of Paragraph 10 to the Collateral Annex
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3 Default with respect to Party B has occurred and is continuing; provided, however , in the event that, and on the date that, Party B cures the Potential Event of Default on or prior to the date that Party B is required to post Performance Assurance to Party A pursuant to a demand made by Party A pursuant to the provisions of the Collateral Annex on or after the occurrence of such Potential Event of Default, (i) the Collateral Threshold for Party B shall automatically increase from zero to the Threshold Amount and (ii) Party B shall be relieved of its obligation to post Performance Assurance pursuant to such demand:

Party B
Collateral Threshold

Credit Rating
$ (or above)
$
$
$
$
$ Below

☒ The amount (the “Threshold Amount”) which is the lower of:

(1) the amount set forth below under the heading “Party B Collateral Threshold” opposite the lower of the Credit Ratings for Party B on the relevant date of determination. If Party B does not have a Credit Rating on the relevant date of determination from at least one of the Ratings Agencies specified below, the Collateral Threshold shall be $0 (zero);

(2) $0 (zero) if an Event of Default or a Potential Event of Default with respect to Party B has occurred and is continuing:

Party B
Collateral Threshold
Moody’s
Credit Rating
S&P
Credit Rating
$100,000,000 Aa3 or above AA- or above
$80,000,000 A1 A+
$80,000,000 A2 A
$70,000,000 A3 A-
$60,000,000 Baa1 BBB+
$50,000,000 Baa2 BBB
$30,000,000 Baa3 BBB-
$5,000,000 Ba1 BB+
$0 Ba2 or below BB or below

☐ The amount of the Guaranty Agreement dated from , as amended from time to time but in no event shall Party B’s Collateral Threshold be greater than $ .

☐ Other – see attached threshold terms

Paragraph 10 to the Collateral Annex
SCE version 10.08.2020

4 II. Eligible Collateral and Valuation Percentage.

The following items will qualify as "Eligible Collateral" for the Party specified:

Party A Party B Valuation Percentage
(A) Cash [ X ] [ X ] 100%
(B) Letters of
Credit
[ X ] [ X ] 100% unless either (i) a Letter of Credit Default shall have occurred and be continuing with
respect to such Letter of Credit, or (ii) twenty (20)
or fewer Business Days remain prior to the
expiration of such Letter of Credit, in which cases
the Valuation Percentage shall be zero (0%).

III. Independent Amount.

A. Party A Independent Amount.

☐ Party A shall have a Fixed Independent Amount of $ . If the Fixed Independent Amount option is selected for Party A, then Party A (which shall be a Pledging Party with respect to the Fixed IA Performance Assurance) will be required to Transfer or cause to be Transferred to Party B (which shall be a Secured Party with respect to the Fixed IA Performance Assurance) Performance Assurance with a Collateral Value equal to the amount of such Independent Amount (the “Fixed IA Performance Assurance”). The Fixed IA Performance Assurance shall not be reduced for so long as there are any outstanding obligations between the Parties as a result of the Agreement, and shall not be taken into account when calculating Party A’s Collateral Requirement pursuant to the Collateral Annex. Except as expressly set forth above, the Fixed IA Performance Assurance shall be held and maintained in accordance with, and otherwise be subject to, Paragraphs 2, 5(b), 5(c), 6, 7 and 9 of the Collateral Annex.

☒ Party A shall have a Full Floating Independent Amount of (i) the amount specified in a Transaction or Confirmation, if any; and (ii) if Party A’s Credit Rating is lower than BBB- by S&P or Baa3 by Moody’s, the amount equal to ten percent (10%) of the market value of all outstanding Transactions (except those for which an alternative Independent Amount is specified in the Confirmation), adjusted by the netting of the market value of purchases with the market value of sales within the same billing cycles. If the Full Floating Independent Amount option is selected for Party A, then for purposes of calculating the Collateral Requirements pursuant to Paragraph 3 of the Collateral Annex, such Full Floating Independent Amount for Party A shall be added to the Exposure Amount for Party B and subtracted from the Exposure Amount for Party A.

☐ Party A shall have a Partial Floating Independent Amount of $ . If the Partial Floating Independent Amount option is selected for Party A, then Party A will be required to Transfer or cause to be Transferred to Party B Performance Assurance with a Collateral Value equal to the amount of such Independent Amount (the “Partial Floating IA Performance Assurance”) if at any time Party A otherwise has a Collateral Requirement (not taking into consideration the Partial Floating Paragraph 10 to the Collateral Annex
SCE version 10.08.2020

5 Independent Amount) pursuant to Paragraph 3 of the Collateral Annex. The Partial Floating IA Performance Assurance shall not be reduced so long as Party A has a Collateral Requirement (not taking into consideration the Partial Floating Independent Amount). The Partial Floating Independent Amount shall not be taken into account when calculating a Party’s Collateral Requirements pursuant to the Collateral Annex. Except as expressly set forth above, the Partial Floating Independent Amount shall be held and maintained in accordance with, and otherwise be subject to, the Collateral Annex.

☐ Not Applicable.

B. Party B Independent Amount.

☐ Party B shall have a Fixed Independent Amount of $ . If the Fixed Independent Amount Option is selected for Party B, then Party B (which shall be a Pledging Party with respect to the Fixed IA Performance Assurance) will be required to Transfer or cause to be Transferred to Party A (which shall be a Secured Party with respect to the Fixed IA Performance Assurance) Performance Assurance with a Collateral Value equal to the amount of such Independent Amount (the “Fixed IA Performance Assurance”). The Fixed IA Performance Assurance shall not be reduced for so long as there are any outstanding obligations between the Parties as a result of the Agreement, and shall not be taken into account when calculating Party B’s Collateral Requirement pursuant to the Collateral Annex. Except as expressly set forth above, the Fixed IA Performance Assurance shall be held and maintained in accordance with, and otherwise be subject to, Paragraphs 2, 5(b), 5(c), 6, 7 and 9 of the Collateral Annex.

☐ Party B shall have a Full Floating Independent Amount of $ . If the Full Floating Independent Amount Option is selected for Party B then for purposes of calculating Party B’s Collateral Requirement pursuant to Paragraph 3 of the Collateral Annex, such Full Floating Independent Amount for Party B shall be added by Party A to its Exposure Amount for purposes of determining Net Exposure pursuant to Paragraph 3(a) of the Collateral Annex.

☐ Party B shall have a Partial Floating Independent Amount of $ . If the Partial Floating Independent Amount option is selected for Party B, then Party B will be required to Transfer or cause to be Transferred to Party A Performance Assurance with a Collateral Value equal to the amount of such Independent Amount (the “Partial Floating IA Performance Assurance”) if at any time Party B otherwise has a Collateral Requirement (not taking into consideration the Partial Floating Independent Amount) pursuant to Paragraph 3 of the Collateral Annex. The Partial Floating IA Performance Assurance shall not be reduced for so long as Party B has a Collateral Requirement (not taking into consideration the Partial Floating Independent Amount). The Partial Floating Independent Amount shall not be taken into account when calculat ing a Party’s Collateral Requirements pursuant to the Collateral Annex. Except as expressly set forth above, the Partial Floating Independent Amount shall be held and maintained in accordance with, and otherwise be subject to, the Collateral Annex.

☒ Not Applicable.

Paragraph 10 to the Collateral Annex
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6 IV. Minimum Transfer Amount.

A. Party A Minimum Transfer Amount: $1

B. Party B Minimum Transfer Amount: $1

V. Rounding Amount.

A. Party A Rounding Amount: $100,000

B. Party B Rounding Amount: $100,000

VI. Administration of Cash Collateral.

A. Party A Eligibility to Hold Cash.

☐ Party A shall not be entitled to hold Performance Assurance in the form of Cash.

Performance Assurance in the form of Cash shall be held in a Qualified Institution in accordance with the provisions of Paragraph 6(a)(ii)(B) of the Collateral Annex.

Party A shall pay to Party B in accordance with the terms of the Collateral Annex the amount of interest it receives from the Qualified Institution on any Performance Assurance in the form of Cash posted by Party B.

☒ Party A shall be entitled to hold Performance Assurance in the form of Cash provided that the following conditions are satisfied: (1) it is not a Defaulting Party; (2) Party A or, if applicable, Party A’s Guarantor has a Credit Rating of at least BBB- from S&P or Baa3 from Moody’s; provided, if Party A, or, if applicable, Party A’s Guarantor has a Credit Rating of BBB - by S&P or Baa3 by Moody’s, such entity, in each case, has a “Stable” outlook or above; and (3) Cash shall be held only in any jurisdiction within the United States. To the extent Party A is entitled to hold Cash, the Interest Rate payable to Party B on Cash shall be as selected below:

Party A Interest Rate.

☒ Federal Funds Effective Rate – for any given month, the average of the annual interest rates reported for all weekdays in the month opposite the caption "Federal funds (effective)" as set forth in the H.15 release, or any successor publication, published by the Board of Governors of the Federal Reserve System.

☐ Other -

To the extent that Party A is not entitled to hold Cash, Performance Assurance in the form of Cash shall be held in a Qualified Institution in accordance with the provisions of Paragraph 6(a)(ii)(B) of the Collateral Annex. Party A shall pay to Party B in accordance with the terms of the Collateral Annex the amount of interest it receives from the Qualified Institution on any Performance Assurance in the form of Cash posted by Party B.

Paragraph 10 to the Collateral Annex
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7 B. Party B Eligibility to Hold Cash.

☐ Party B shall not be entitled to hold Performance Assurance in the form of Cash.

Performance Assurance in the form of Cash shall be held in a Qualified Institution in accordance with the provisions of Paragraph 6(a)(ii)(B) of the Collateral Annex.

Party B shall pay to Party A in accordance with the terms of the Collateral Annex the amount of interest it receives from the Qualified Institution on any Performance Assurance in the form of Cash posted by Party A.

☒ Party B shall be entitled to hold Performance Assurance in the form of Cash provided that the following conditions are satisfied: (1) it is not a Defaulting Party; (2) Party B has a Credit Rating of at least BBB - from S&P or Baa3 from Moody’s; provided, if Party B has a Credit Rating of BBB- by S&P or Baa3 by Moody’s, such entity, in each case, has a “Stable” outlook or above; and (3) Cash shall be held only in any jurisdiction within the United States. To the extent Party B is entitled to hold Cash, the Interest Rate payable to Party A on Cash shall be as selected below:

Party B Interest Rate.

☒ Federal Funds Effective Rate – for any given month, the average of the annual interest rates reported for all weekdays in the month opposite the caption "Federal funds (effective)" as set forth in the H.15 release, or any successor publication, published by the Board of Governors of the Federal Reserve System.

☐ Other -

To the extent that Party B is not entitled to hold Cash, Performance Assurance in the form of Cash shall be held in a Qualified Institution in accordance with the provisions of Paragraph 6(a)(ii)(B) of the Collateral Annex. Party B shall pay to Party A in accordance with the terms of the Collateral Annex the amount of interest it receives from the Qualified Institution on any Performance Assurance in the form of Cash posted by Party A.

VII. Notification Time.

10:00 a.m. Pacific Prevailing Time on a Local Business Day.

VIII. General.

With respect to the Collateral Threshold, Independent Amount, Minimum Transfer Amount and Rounding Amount, if no selection is made in this Cover Sheet with respect to a Party, then the applicable amount in each case for such Party shall be zero (0). In addition, with respect to the “Administration of Cash Collateral” section of this Paragraph 10, if no selection is made with respect to a Party, then such Party shall not be entitled to hold Performance Assurance in the form of Cash and such Cash, if any, shall be held in a Qualified Institution pursuant to Paragraph 6(a)(ii)(B) of the Collateral Annex. If a Party is eligible to hold Cash pursuant to a selection in this Paragraph 10 but no Interest Rate is selected, then the Interest Rate for such Party shall be the Federal Funds Effective Rate as defined in Section VI of this Paragraph 10.

Paragraph 10 to the Collateral Annex
SCE version 10.08.2020

8 IX. Other Changes.

The following changes to the Collateral Annex shall be applicable.

A. Introduction. The first paragraph of the introduction is amended to read as follows:

“This Collateral Annex, together with the Paragraph 10 Cover Sheet, (the “Collateral Annex”) supplements, forms a part of, and is subject to the EEI Master Power Purchase and Sale Agreement dated as of _______________ between {Counterparty Legal Name} (“Party A”) and Southern California Edison Company (“Party B”), including the Cover Sheet and any other annexes thereto (as amended and supplemented from time to time, the “Agreement”). Capitalized terms used in this Collateral Annex but not defined herein shall have the meanings given such terms in the Agreement.”

B. Paragraph 1. Definitions. Amend Paragraph 1 as follows:

i. The definition of “Credit Rating” is deleted from the Collateral Annex and all references shall have the meaning set forth in Section 1.12 of the Master Agreement as modified in the Cover Sheet.

ii. The definition of “Credit Rating Event” is amended by replacing “6(a)(iii)” with “6(a)(ii)”.

iii. The definition of “Downgraded Party” is amended by replacing “6(a)(i)” with “6(a)(ii)”.

iv. The definition of “Interest Amount” is deleted in its entirety and replaced as follows:

"Interest Amount" means the product of the following three factors: (a) the dollar amount of Cash on which an interest payment is based; (b) Interest Rate; and (c) the number of days in the calculation period divided by 360.

v. The definition of “Interest Period” is deleted in its entirety.

vi. The definition of “Letter of Credit” is deleted from the Collateral Annex and all references shall have the meaning set forth in Section 1.27 of the Master Agreement as modified in the Cover Sheet.

vii. The definition of “Letter of Credit Default” is amended by replacing the word “or” in the third line with the word “and”.

viii. The definition of “Local Business Day” is amended by replacing the word “day” with “Business Day”.

ix. The definition of “Notification Time” is amended by replacing “11:00, New York” with “10:00 a.m. Pacific Prevailing.”

x. The definition of “Performance Assurance” is amended by replacing “6(a)(iv)” with “6(a)(iii)”.

xi. The definition of “Qualified Institution” is amended to read as follows:

Paragraph 10 to the Collateral Annex
SCE version 10.08.2020

9 “ “Qualified Institution” means either (A) a commercial bank or financial institution (that is not an Affiliate or a Guarantor of any party to this Agreement) organized under the laws of the United States or a political subdivision thereof or (B) a U.S. branch office of a foreign bank, and, with respect to both entities identified in clause (A) and (B), having (i) Credit Ratings of at least "A-" by S&P or "A3" by Moody's, and (ii) shareholder equity (determined in accordance with generally accepted accounting principles) of at least $1,000,000,000.00 (ONE BILLION AND 00/100 DOLLARS).”

xii. The definition of “Reference Market-maker” is deleted from the Collateral Annex and all references shall have the meaning set forth in Section 1.66 of the Master Agreement as modified in the Cover Sheet.

xiii. The definition of “Secured Party” is amended by replacing “3(b)” with “3(a)”.

C. Paragraph 3. Calculations of Collateral Requirement. In Paragraph 3(b)(2), is amended by replacing the comma after “Secured Party” with “and” and by deleting the phrase “, and any Interest Amount that has not yet been Transferred to the Pledging Party”.

D. Paragraph 4. Delivery of Performance Assurance. In Paragraph 4, the penultimate sentence is amended by replacing the words “next Local Business Day” with “third Local Business Day thereafter” in clause (i), and by replacing the word “second” with fourth” in clause (ii).

E. Paragraph 5. Reduction and Substitution of Performance Assurance. Amend Paragraph 5 as follows:

i. Paragraph 5(a) is amended by deleting the parenthetical “(but no more frequently than weekly with respect to Letters of Credit and daily with respect to Cash)” from the first line.

ii. The sixth sentence of Paragraph 5(a) is amended by

1. inserting the word “Local” before “Business Day,” and replacing the words “one (1) Local Business Day” with “three (3) Local Business Days” in clause (i) of that sentence.

2. Replacing the words “two (2) Local Business Days” with “four (4) Local Business Days” in clause (ii) of that sentence.

F. Paragraph 6. Administration of Performance Assurance. Amend Paragraph 6 as follows:

iii. Paragraph 6(a)(ii)(A) is amended by inserting “(other than subparagraph (B) below)” after “the provisions of this Paragraph 6(a)(ii)” in the first line thereof.

iv. Paragraph 6(a)(ii)(B) is amended by replacing “Non-Downgraded Party” with “Downgraded Party” in the second sentence of this paragraph.

v. Paragraph 6(a)(iii) is deleted in its entirety and replaced as follows:

Interest Payments on Cash. So long as no Event of Default or Potential Event of Default with respect to the Pledging Party has occurred and is continuing, and no Early Paragraph 10 to the Collateral Annex
SCE version 10.08.2020

10 Termination Date for which any unsatisfied payment Obligations of the Pledging Party exist has occurred or been designated as the result of an Event of Default with respect to the Pledging Party, and to the extent that an obligation to Transfer Performance Assurance would not be created or increased by the Transfer, in the event that the Secured Party or its Custodian is holding Cash, the Secured Party will Transfer (or caused to be Transferred) to the Pledging Party, in lieu of any interest or other amount s paid or deemed to have been paid with respect to such Cash (all of which may be retained by the Secured Party or its Custodian), the Interest Amount, concurrently with the return of such Cash to the Pledging Party in accordance with the terms of the Agreement. On or after the occurrence of a Potential Event of Default or an Event of Default with respect to the Pledging Party or an Early Termination Date as a result of an Event of Default with respect to the Pledging Party, the Secured Party or its Custod ian shall retain any such Interest Amount as additional Performance Assurance hereunder until the obligations of the Pledging Party under the Agreement have been satisfied in the case of an Early Termination Date or for so long as such Event of Default is continuing in the case of an Event of Default ; provided that , any Interest Amount that is held by the Secured Party as an additional Performance Assurance amount shall not accrue interest in accordance with this paragraph.

vi. Paragraph 6(b)(iv) is amended by capitalizing the second instance of the word “cash” in the second sentence.

vii. Paragraph 6(b)(v) is amended by deleting the parenthetical phrase “(including but not limited to the reasonable costs, expenses, and attorneys’ fees of the Secured Party)”.

G. Paragraph 7. Exercise of Rights Against Performance Assurance. Paragraph 7(b) is amended by deleting it in its entirety and inserting the words “Intentionally Omitted.”.

H. Paragraph 8. Disputed Calculations. Amend Paragraph 8 as follows:

viii. Paragraph 8(a) is amended by adding in the third sentence the phrase “and, provided further, that if no quotations can be obtained, then the Secured Party’s original calculation shall be used” immediately after the words “then that quotation shall be used” and before the “)”.

ix. Paragraph 8(b) is amended by (1) adding the words “requested by the Pledging Party” between the word “Assurance” and the phrase “to be reduced”, and (2) adding in the third sentence the phrase “and, provided further that, if no quotations can be obtained, then the Secured Party’s original calculation shall be used” immediately after the words “then that quotation shall be used” and before the “)”.

I. Paragraph 9. Covenants; Representations and Warranties; Miscellaneous. Section 9(d) is amended by deleting (i) the parenthetical phrase at the end of the first sentence, which reads, “(including, without limitation costs and reasonable fees and disbursements of counsel)” and (ii) the entire second sentence.

J. Schedule 1 to Collateral Annex: Schedule 1 to the Collateral Annex is deleted in its entirety.

[Remainder of Page Intentionally Left Blank]

Paragraph 10 to the Collateral Annex
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11 IN WITNESS WHEREOF, the Parties have caused this Paragraph 10 to the Collateral Annex to be duly executed as of the Effective Date of the Agreement.

Party A: {Counterparty Legal Name} Party B:

SOUTHERN CALIFORNIA EDISON

COMPANY
By: By:

Name: {Name of Authorized Signer} Name: {Name of SCE Signer} Title: {Title of Authorized Signer} Title: {Title of SCE Signer}

MCAM Resource Adequacy Capacity
Revision: 2022-08-26
1 MASTER POWER PURCHASE AND SALE AGREEMENT

CONFIRMATION LETTER

BETWEEN

CITY OF PALMDALE
AND

SOUTHERN CALIFORNIA EDISON COMPANY

This confirmation letter including all appendices hereto (“Confirmation”) confirms the Transaction between City of Palmdale (“Counterparty”) and Southern California Edison Company (“SCE”), each individually a “Party” and together the “Parties”, dated as of ________________________ (the “Confirmation Effective Date”) in which Seller agrees to provide to Buyer the right to the Product, as such term is defined in this Confirmation, in the amounts described in this Confirmation. This Transaction is governed by the Edison Electric Institute (“EEI”) Master Power Purchase and Sale Agreement between the Parties, effective as of ____________________, along with the Cover Sheet, any amendments and annexes thereto (the “Master Agreement”), and including, the EEI Collateral Annex to the Master Agreement along with the Paragraph 10 to the Collateral Annex between the Parties (such Paragraph 10 and the Collateral Annex are referred to collectively herein as the “Collateral Annex”) (the Master Agreement and the Collateral Annex shall be collectively referred to as the “EEI Agreement”). The EEI Agreement and this Confirmation shall be collectively referred to herein as the “Agreement”. Capitalized terms used but not otherwise defined in this Confirmation have the meanings ascribed to them in the EEI Agreement, or the CAISO Tariff (defined herein below). To the extent this Confirmation is inconsistent with any provision of the EEI Agreement, this Confirmation shall govern the rights and obligations of the Parties hereunder.

RECITALS
WHEREAS, the California Public Utilities Commission (“CPUC”) adopted the Decision Granting Petition for Modification on Modified Cost Allocation Mechanism D. 23-12-014 on December 19, 2023;

WHEREAS, D.23-12-014 provides load-serving entities with loads that migrated from the investor-owned utilities based on the final 2023 resource adequacy year-ahead forecast finalized in August 2022 the option to enter into an agreement with the relevant investor-owned utility that conducted procurement in accordance with D.19-11-016 to purchase a share of the system resource adequacy (“RA”) capacity at the Market Price Benchmark calculated in accordance with the provisions of D.19-10-001;

WHEREAS, Counterparty is a load-serving entity with such migrated loads and desires to enter into this Agreement to purchase its eligible system RA share of SCE’s D.19-11-016 procurement; and
Confidential Resource Adequacy Capacity Confirmation
MCAM RA Agreement #####-#### SCE – City of Palmdale

2 NOW THEREFORE, the Parties agree as follows:

ARTICLE 1. TRANSACTION TERMS

1.1 Product; Elections
Product: The Capacity Attributes of the Unit(s) as described in Appendix C and allocated in accordance with Section 2.1, or as provided from Alternate Unit(s) in accordance with Section 2.3.

Flexible Capacity: The Product shall include Flexible Capacity if identified in Appendix B as applicable.

This Confirmation does not convey to Buyer any right to count the Contract Quantity toward Buyer’s procurement requirements pursuant to D.19-11-016 or D.21-06-035.

1.2 Delivery and Receipt of Product
Seller shall sell and deliver to Buyer, and Buyer shall receive and purchase from Seller the Product in the amount of the applicable Contract Quantity for each month of the Delivery Period.

1.3 Delivery Period and Term
(a) Delivery Period. The Delivery Period is as specified in Appendix B of this Confirmation in the row titled “Delivery Period”, unless terminated earlier in accordance with the terms of this Agreement; provided, such termination shall not affect or excuse the performance of either Party under any provision of this Agreement that by its terms survives any such termination. (b) Term. The T
erm of this Transaction shall commence upon the Confirmation Effective Date and shall continue until the later of (i) the expiration of the Delivery Period or (ii) the date the Parties’ obligations under this Confirmation have been satisfied. This Confirmation shall be effective and binding as of the Confirmation Effective Date.

1.4 Contract Quantity
The Contract Quantity for each applicable Showing Month is as shown in Appendix B of this Confirmation under the heading titled “Contract Quantity.” Confidential Resource Adequacy Capacity Confirmation
MCAM RA Agreement #####-#### SCE – City of Palmdale

3 1.5 Flexible Capacity
If the Parties have designated Flexible Capacity as “Applicable”, then the Flexible Capacity included in the Contract Quantity for each applicable Showing Month is as shown in Appendix B of this Confirmation under the heading titled “Flexible Capacity.”

1.6 Contract Price
The Contract Price shall be the Forecasted Market Price Benchmark for the year in which the deliveries are made, subject to annual true up to the actual Final Market Price Benchmark for the year in which deliveries were made in accordance with Section 3.4 of this Confirmation.

ARTICLE 2. DELIVERY OBLIGATIONS

2.1 Seller’s Delivery Obligations
Seller shall provide Buyer with the Expected Contract Quantity of Product for each Showing Month consistent with the following:
(a) Supply Plan Obligation. Seller shall, on a timely basis, submit, or cause the Unit’s SC to submit, (i) Monthly Supply Plans and (ii) Annual Supply Plans (if the Confirmation Effective Date is prior to the year-ahead Compliance Showing Deadline applicable for the Showing Months as specified in Sections 1.4 and 1.5 herein), in accordance with the CAISO Tariff, identifying and confirming the transfer of the Expected Contract Quantity of Product to Buyer for each Showing Month (the “Supply Plan Obligation”). (b) Showing Month Notice. If (i) Seller intends to utilize an Alternate Unit in accordance with Section 2.3 to satisfy its Supply Plan Obligation, or (ii) Seller intends to deliver less than the Contract Quantity of Product for such Showing Month for any reason, then Seller shall, or shall cause the Unit’s SC to, submit written notification to Buyer (the “Showing Month Notice”), no later than the Compliance Notification Deadline, identifying (x) such Alternate Unit(s) in accordance with Section 2.3, (y) the Contract Quantity of Product from such Alternate Unit(s), and (z) the total Contract Quantity to be provided on the Showing Month Supply Plan.
(c) Contract Quantity Unit Allocation. Selle
r may deliver Product from any one
or combination of Unit(s) set forth in Appendix C at Seller’s sole discretion.

Seller shall provide email notice to Buyer’s Supply Plan contact, as set forth in Appendix D, no later than the initial Compliance Showing Deadline for each Showing Month containing the allocation of Contract Quantity by Unit (“Contract Quantity Unit Allocation”).

Confidential Resource Adequacy Capacity Confirmation
MCAM RA Agreement #####-#### SCE – City of Palmdale

4 2.2 Adjustments to Contract Quantity
Seller shall deliver to Buyer the Contract Quantity of Product for each Showing Month consistent with the following:
(a) Planned Outages: Se ller’s obligation to deliver the Contract Quantity for each Showing Month may be reduced at Seller’s option by the amount of any Planned Outages which exist with respect to any portion of the Units listed in Appendix C during the applicable Showing Month. Seller shall notify Buyer no later than the Compliance Notification Deadline of the amount of Product from the Unit Buyer is permitted to include in Buyer’s Compliance Showings applicable to that month as a result of such Planned Outage.
(b) Reductions in Unit NQC and Unit EFC: Selle
r’s obligation to deliver the
applicable Contract Quantity for each Showing Month may also be reduced in the event the Unit experiences a reduction in Unit NQC or Unit EFC after the Confirmation Effective Date as determined by the CAISO. In the event the Unit experiences such a reduction in Unit NQC or Unit EFC, Seller has the option, but not the obligation, to provide the applicable Contract Quantity for such Showing Month from (i) the same Unit, provided the Unit has sufficient remaining and available Product or (ii) from Alternate Units, provided, that in each case Seller provides and identifies such Alternate Units in accordance with Section 2.3.
(c) Reductions in Seller Supply: Seller’s obligation to deliver the applicable Contract Quantity for each Showing Month may also be reduced in the event that Unit(s) fail to deliver the Contracted Amount for any reason, including but not limited to (i) a delay in achieving commercial operation by the Unit(s); (ii) early termination of the Seller Supply Agreement; (iii) reduction in the Contracted Amount in the Seller Supply Agreement; (iv) planned maintenance of the Unit(s); and (v) a change in law resulting in a reduction of Unit NQC, Unit EFC, or the Capacity Attributes provided by the Unit(s). If there is a reduction in Seller’s supply in accordance with this Section 2.2(c), Seller has the option, but not the obligation, to provide the applicable Contract Quantity for such Showing Month from Alternate Units, provided, that in each case Seller provides and identifies such Alternate Units in accordance with Section 2.3.

2.3 Seller’s Option To Provide Alternate Capacity
Seller may, at no cost to Buyer, provide Buyer with Product from one or more Alternate Units in an amount such that the total amount of Product provided to Buyer from the Unit and Alternate Units is not more than the Contract Quantity for the applicable Showing Month, provided that in each case:

Confidential Resource Adequacy Capacity Confirmation
MCAM RA Agreement #####-#### SCE – City of Palmdale

5 (a) Seller shall notify Buyer no later than the Compliance Notification Deadline for such Showing Month of its intent to provide Product from and identify alternate units that (i) are accepted by the CAISO, and (ii) otherwise satisfy the requirements of this Agreement (“Alternate Units”); (b) Seller shall, or shall cause the Unit’s SC to submit a Monthly Supply Plan and an Annual Supply Plan, as applicable, that includes the Alternate Units, in accordance with the CAISO Tariff, no later than the initial Compliance Showing Deadline for such Showing Month;
(c) if Seller does not comply with the requirements of Sections 2.3(a) and (b) for the applicable Showing Month, then any such Alternate Units shall not be deemed a Unit for purposes of this Confirmation for that Showing Month and Seller shall not receive payment for such Product.

Subject to the satisfaction of the conditions contained in subsections (a) – (c) of this Section 2.3, once Seller has identified in writing any Alternate Units that meet the requirements of this Section 2.3, then any such Alternate Units shall be automatically deemed a Unit for purposes of this Confirmation for that Showing Month.

2.4 Damages for Failure to Provide Capacity
If Seller fails to provide Buyer with the Expected Contract Quantity of Product for any Showing Month, in accordance with Section 2.1 (the “Replacement Obligation”), in each case as applicable, then the following shall apply:
(a) Buyer may, but shall not be required to, replace all or any portion of the Replacement Obligation for the applicable Showing Month with capacity having equivalent Capacity Attributes as the Expected Contract Quantity; provided, if, using commercially reasonable efforts, Buyer is unable to acquire capacity having equivalent Capacity Attributes for any portion of any Showing Month, Buyer may replace such portion of the Replacement Obligation with capacity having Capacity Attributes in excess of the Contract Quantity (the “Replacement Capacity”). Buyer may enter into purchase transactions with one or more parties to purchase Replacement Capacity. Additionally, Buyer may enter into one or more arrangements to repurchase its obligation to sell and deliver capacity to another party, and such arrangements shall be considered the procurement of Replacement Capacity. Buyer shall act in a commercially reasonable manner to minimize damages in procuring any Replacement Capacity.
(b) Seller shall pay to Buyer at the time set forth in Section 4.1 of the Master Agreement, the following damages in lieu of damages specified in Section

4.1 of the Master Agreement: an amount equal to the positive difference, if any, between (i) the sum of (A) the actual cost paid by Buyer for any Confidential Resource Adequacy Capacity Confirmation
MCAM RA Agreement #####-#### SCE – City of Palmdale

6 Replacement Capacity, including any transaction costs and expenses incurred in connection with such procurement, plus (B) each applicable Replacement Capacity Price multiplied by the aggregate amount of Replacement Obligation not purchased by Buyer as Replacement Capacity, for all applicable portions of the applicable Showing Month pursuant to Section 2.4(a), and (ii) the Replacement Obligation, not provided for all applicable portions of the applicable Showing Month times the Contract Price for that month. Buyer’s invoice for such amount shall include a written statement explaining in reasonable detail the calculation of such amount and shall include supporting documentation.

2.5 Indemnities for Failure to Deliver Expected Contract Quantity Seller agrees to indemnify, defend and hold harmless Buyer from any penalties, fines, or costs assessed against Buyer by the CPUC or the CAISO, resulting from all or any of the following:
(a) Seller’s failure to provide any portion of the Expected Contract Quantity for any portion of the Delivery Period;
(b) Seller’s failure to provide a Showing Month Notice for any portion of the Delivery Period;
(c) Seller’s or the Unit’s SC’s failure to timely or accurately submit, or otherwise satisfy its Supply Plan Obligation for any portion of the Expected Contract Quantity or any portion of the Delivery Period; or (d) any other failure by Seller to perform its obligations under this Confirmation.

With respect to the foregoing, the Parties shall use commercially reasonable efforts to minimize such penalties, fines, or costs.

2.6 Buyer’s Re-Sal
e of Product
Buyer may re-sell all or a portion of the Product and any associated rights, in each case, acquired under this Confirmation, in accordance with Applicable Laws and CPUC Decisions (“Resold Product”); provided, with respect to Resold Product that includes the sale of Capacity Attributes that impact Seller’s obligations under this Confirmation, Buyer agrees to: (a) notify Seller that such a sale has occurred; (b) provide Seller with the information described in Appendix E; and (c) notify Seller of any subsequent changes to the information in Appendix E with respect to any particular sale; in each case promptly following such sale and in no event later than the initial Compliance Showing Deadline for each Showing Month.

Subject to Article 6 below, Seller agrees, and agrees to cause the Unit’s SC, to: (i) follow Buyer’s instructions with respect to providing such Resold Product to subsequent purchasers of such Resold Product; and (ii) take all commercially Confidential Resource Adequacy Capacity Confirmation
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7 reasonable actions and execute any and all documents or instruments reasonably necessary to allow such subsequent purchasers to use such Resold Product.

Seller acknowledges and agrees that with respect to any Resold Product, if Buyer incurs any liability to any purchaser of such Resold Product due to the failure of Seller or the Unit’s SC to comply with the terms of this Confirmation, and Seller would have had liability to Buyer under this Confirmation for such failure had Buyer not sold the Resold Product to a subsequent purchaser, then Seller shall be liable to Buyer under this Confirmation, including without limitation, pursuant to Sections 2.4 and 2.5, for the amounts it would have been liable to Buyer for had such Resold Product not been sold to a subsequent purchaser. Buyer acknowledges and agrees that with respect to any Resold Product, if Seller incurs any liability to any purchaser of such Resold Product due to the failure of Buyer to comply with the terms of this Confirmation, and Buyer would have had liability to Seller under this Confirmation for such failure had Buyer not sold the Resold Product to a subsequent purchaser, then Buyer shall be liable to Seller under this Confirmation for the amounts it would have been liable to Seller for had such Resold Product not been sold to a subsequent purchaser.

2.7 CAISO Offer Requirements
Seller shall, or cause each Unit’s SC to, schedule with, or make available to, the CAISO the Expected Contract Quantity for each Unit in compliance with the CAISO Tariff, and shall, or shall cause each Unit’s SC, owner, or operator, as applicable, to perform all obligations under the CAISO Tariff that are associated with the sale and delivery of Product hereunder. Buyer shall have no liability for the failure of Seller or the failure of any Unit’s SC, owner, or operator to comply with such CAISO Tariff provisions, including any penalties, charges or fines imposed on Seller or such Unit’s SC, owner, or operator for such noncompliance.

2.8 Unit SC’s Substitution Obligation
After the obligation to replace all or any portion of the Expected Contract Quantity transfers from the load serving entity to the Unit’s SC for a Showing Month in accordance with the CAISO Tariff, and if the CAISO determines that any portion of the Expected Contract Quantity for any portion of a Showing Month that was shown by Buyer in its Compliance Showings requires outage substitution in accordance with Section 40.9.3.6 of the CAISO Tariff because the Unit, or Alternate Unit, as applicable, is scheduled to take an outage (planned or otherwise) (such amount requiring outage substitution, the “SC Substitute Capacity”), then: (a) Seller shall have no liability under Sections 2.4 or 2.5 with respect to such SC Substitute Capacity; and (b) Seller shall have no liability to Buyer for any costs that are allocated to Buyer by the CAISO for any CPM Capacity procured by the CAISO pursuant to the Capacity Procurement Mechanism and that are related to such SC Substitute Capacity.

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8 ARTICLE 3. PAYMENT

3.1 Monthly Payment
In accordance with the terms of Article Six of the Master Agreement, Buyer shall make a Monthly Payment to Seller, after the applicable Showing Month, as follows:

Monthly Payment = (A x B x 1,000)
where:

A = applicable Contract Price for that Showing Month
B = The amount of Contract Quantity of Product actually delivered by Seller to Buyer pursuant to and consistent with Section 2.1 and, if applicable, Section 2.3, for the applicable Showing Month.

The Monthly Payment calculation shall be rounded to two decimal places. The Monthly Payment is subject to an annual true-up in accordance with Section 3.4.

3.2 Allocation of Other Payments and Costs
(a) Seller shall retain any revenues it may receive from and pay all costs charged by the CAISO or any other third party with respect to the Unit for (i) start-up, shutdown, and minimum load costs, (ii) energy sales, (iii) ancillary services, and (iv) black start or reactive power services. (b) Buyer shall be entitled to receive and retain all revenues associated with the Contract Quantity (including any capacity revenues from RMR Contracts for the Unit, Capacity Procurement Mechanism or its successor, RUC Availability Payments, or its successor, but excluding payments described in Section 3.2(a)). To the extent permitted by the CAISO Tariff, Seller shall, or shall cause each Unit’s SC to, submit RUC Availability Bids for the Expected Contract Quantity for each Unit for each hour of the Delivery Period at a bid price of Zero Dollars ($0) per MW per hour, regardless of whether each Unit is shown on a Supply Plan for the applicable Showing Month.
(c) In accordance with Section 3.1 of this Confirmation and Article Six of the Master Agreement,
(i) all such Buyer revenues described in this Section 3.2, but received by Seller, or a Unit’s SC, owner, or operator shall be remitted to Buyer, and Seller shall pay such revenues to Buyer if the Unit’s SC, owner, or operator fails to remit those revenues to Buyer. If Seller fails to pay such revenues to Buyer, Buyer may offset any amounts owing to it Confidential Resource Adequacy Capacity Confirmation
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9 for such revenues pursuant to Article Six of the Master Agreement against any future amounts Buyer may owe to Seller. In order to verify the accuracy of such revenues, Buyer shall have the right, at its sole expense and during normal working hours after reasonable prior notice, to hire an independent third party reasonably acceptable to Seller to audit any documents, records or data of Seller associated with the Contract Quantity; and
(ii) all such Seller, or a Unit’s SC, owner, or operator revenues described in this Section 3.2, but received by Buyer shall be remitted to Seller.

If Buyer fails to pay such revenues to Seller, Seller may offset any amounts owing to it for such revenues pursuant to Article Six of the Master Agreement against any future amounts it may owe to Buyer. (d) If a centralized capacity market develops within the CAISO region, Buyer will have exclusive rights to offer, bid, or otherwise submit the applicable Contract Quantity of Product for each Showing Month provided to Buyer pursuant to this Confirmation for re-sale in such market, and retain and receive any and all related revenues.
(e) Seller agrees that the Unit is subject to the terms of the Availability Standards, Non-Availability Charges, and Availability Incentive Payments as contemplated under Section 40.9 of the CAISO Tariff. Furthermore, the Parties agree that any Availability Incentive Payments are for the benefit of the Seller and for Seller’s account and that any Non-Availability Charges are the responsibility of the Seller and for Seller’s account.

3.3 Offset Rights
Either Party may offset any amounts owing to it for revenues, penalties, fines, costs reimbursement, or other payments pursuant to Article Six of the Master Agreement against any future amounts it may owe to the other Party.

3.4 Annual True-up of Contract Price
The Parties acknowledge and agree that Monthly Payments made based on the Forecasted Market Price Benchmark shall be subject to an annual true up to the Final Market Price Benchmark in accordance with this Section 3.4.

If the CPUC publishes a Final Market Price Benchmark for a calendar year that differs from the Contract Price invoiced to and paid by the Buyer for the Product for that same calendar year, SCE will recompute all invoices for that calendar year based upon the Final Market Price Benchmark. If the recomputation results in a net amount owed to Seller, any such amount owing shall be separately invoiced to Buyer and paid in accordance with Section 6.2 of the Master Agreement.

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10 If the recomputation results in a net amount owed to Buyer, any such amount owing to Buyer will at Buyer’s discretion be (i) netted against amounts owed to Seller in any subsequent invoice, or (ii) separately invoiced to Seller, in which case Seller must pay the amount owing in accordance with Section 6.2 of the Master Agreement.

Subject to the other terms of this Agreement, no interest shall be paid on the amount of any adjustments due to the publishing of a Final Market Price Benchmark. Each Party’s obligation to true up Monthly Payments in accordance with this Section 3.4 shall survive a termination of this Agreement.

ARTICLE 4. OTHER BUYER AND SELLER COVENANTS

4.1 Seller’s and Buyer’s Duty to Take Action to Allow the Utilization of the Product
Buyer and Seller shall, throughout the Delivery Period: (a) cause the Benefiting Load Serving Entity SCID to be included in all applicable Supply Plans; (b) execute any and all documents or instruments reasonably necessary to ensure Buyer’s right to the use of the Contract Quantity for the sole benefit of Buyer or any subsequent purchaser under Section 2.6; and (c) cause all Supply Plans to be filed in conformance with the requirements of the CPUC Filing Guide and the CAISO Tariff. If during the Delivery Period, there is a change to the Benefiting Load Serving Entity SCID, the Parties agree to communicate such changes to each other promptly. The Parties further agree to negotiate in good faith to make necessary amendments, if any, to this Confirmation to conform this Transaction to subsequent clarifications, revisions, or decisions rendered by the CPUC, FERC, CAISO or other Governmental Authority having jurisdiction to administer Compliance Obligations, so as to maintain the benefits of the bargain struck by the Parties on the Confirmation Effective Date.

4.2 Seller’s Representations, Warranties and Covenants
(a) Seller represents, warrants and covenants to Buyer that, throughout the Delivery Period:
(i) Seller owns or has the exclusive right to the Product sold under this Confirmation from the Unit(s), and shall furnish Buyer, CAISO, CPUC or other Governmental Authority with such evidence as may reasonably be requested to demonstrate such ownership or exclusive right;
(ii) No portion of the Contract Quantity has been committed by Seller to any third party in order to satisfy Compliance Obligations or analogous obligations in any CAISO or non-CAISO markets, other Confidential Resource Adequacy Capacity Confirmation
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11 than pursuant to an RMR Contract between the CAISO and either Seller or the Unit’s owner or operator;
(iii) Seller shall comply with Applicable Laws relating to the Product; (iv) (A) Seller shall, and shall cause the Unit’s SC to promptly (and in any event within one (1) Business Day of the time Seller receives notification from the CAISO) notify Buyer in the event the CAISO designates any portion of the Contract Quantity as CPM Capacity and (B) in the event the CAISO makes such a designation Seller shall, and shall cause the Unit’s SC to not accept any such designation by the CAISO unless and until Buyer has agreed to accept such designation; (v) Buyer shall have the exclusive right to offer the Contract Quantity, or any portion thereof, to the CAISO as CPM Capacity and Seller shall not, and shall cause the Unit’s SC not to, offer any portion of the Contract Quantity to the CAISO as CPM Capacity or accept any designation of any portion thereof as CPM Capacity;
(vi) The Unit is connected to the CAISO Controlled Grid, is within the CAISO Control Area, and is under the control of CAISO;
(vii) Seller shall cause the Unit’s SC, owner and operator to comply with Applicable Laws relating to the Product;
(viii) Buyer shall have no liability for the failure of Seller or the failure of the Unit’s SC, owner, or operator to comply with such CAISO Tariff provisions, including any penalties, charges or fines imposed on Seller or the Unit’s SC, owner, or operator for such noncompliance. (ix) If Seller is the owner of the Unit, the aggregation of all amounts of Capacity Attributes that Seller has sold, assigned or transferred for the Unit does not exceed the Unit NQC or Unit EFC for that Unit; (x) Seller has notified the SC of the Unit that Seller has transferred the Contract Quantity, including the amount of Flexible Capacity and Inflexible Capacity, to the extent applicable, with respect to each Showing Month to Buyer, and the SC is obligated to deliver the Supply Plans in accordance with the CAISO Tariff and this Confirmation;
(xi) Seller has notified the SC of the Unit that Seller is obligated to cause the Unit’s SC to provide to the Buyer, on or prior to the Compliance Notification Deadline, the applicable Expected Contract Quantity of the Unit for such Showing Month, including the amount of Flexible Capacity and Inflexible Capacity, to the extent applicable, that is to Confidential Resource Adequacy Capacity Confirmation
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12 be submitted in the Supply Plan associated with this Agreement for the applicable period; and
(xii) Seller has notified the Unit’s SC that Buyer is entitled to the revenues set forth in Section 3.2, and such SC is obligated to promptly deliver those revenues to Buyer, along with appropriate documentation supporting the amount of those revenues.
(b) Seller represents, warrants and covenants to Buyer that, as of the Confirmation Effective Date, all of the information set forth on Appendix C hereto is true, correct and complete.

4.3 CPUC Approval
(a) No later than October 3, 2022, or a later date if the CPUC extends the deadline for filing the advice letter referenced in Ordering Paragraph 4 of D.22-05-015, SCE shall file with the CPUC the appropriate request for CPUC Approval. SCE shall seek CPUC Approval, including responding to any requests for information related to the request for CPUC Approval. As requested by SCE, Seller shall use commercially reasonable efforts to support SCE in obtaining CPUC Approval. SCE has no obligation to seek rehearing or to appeal a CPUC decision which fails to provide CPUC Approval of this Confirmation or which contains findings required for CPUC Approval with conditions or modifications unacceptable to SCE. (b) Either Party has the right to terminate this Confirmation on Notice if CPUC Approval has not been obtained or waived by SCE at its sole discretion within forty five (45) days after SCE files the appropriate request for CPUC Approval (“CPUC Approval Deadline”).
(c) If CPUC Approval is not obtained or waived by SCE at its sole discretion prior to the initial Compliance Showing Deadline of a Showing Month within the Delivery Period, then Seller shall not be obligated to submit, or cause the Unit’s SC to submit, the Monthly Supply Plan in accordance with the CAISO Tariff, identifying and confirming the transfer of the Expected Contract Quantity of Product to Buyer for the Showing Month. (d) Failure to obtain CPUC Approval in accordance with this provision will not be deemed to be or cause an Event of Default by either Party. No Settlement Amount or Termination Payment with respect to this Confirmation will be due or owing by either Party upon termination of this Confirmation due solely to failure to obtain CPUC Approval.

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13 ARTICLE 5. CONFIDENTIALITY
Notwithstanding Section 10.11 of the Master Agreement, the Parties agree that: (i) Buyer may disclose the Contract Quantity or any applicable portion of the Contract Quantity, including any amounts of Flexible Capacity and Inflexible Capacity, to the extent applicable, under this Transaction to any Governmental Authority, the CPUC, the CAISO in order to support its Compliance Showings, if applicable; (ii) Seller may disclose the transfer of the Contract Quantity and the applicable Expected Contract Quantity (as well as any amounts of Flexible Capacity and Inflexible Capacity, to the extent applicable) for each Showing Month under this Transaction to the SC of the Unit in order for such SC to timely submit accurate Supply Plans; (iii) both Parties may disclose the terms and conditions of the Agreement and any and all written or recorded or oral information, data, analyses, documents, and materials furnished or made available by a Party to the other Party in connection with this Agreement (A) in order to comply with any applicable law, order, regulation, ruling, summons, subpoena, exchange rule, or accounting disclosure rule or standard, or to make any showing required by any applicable governmental authority or (B) to the Independent Evaluator; and (iv) Buyer and the Independent Evaluator may disclose the terms and conditions of the Agreement and any and all written or recorded or oral information, data, analyses, documents, and materials furnished or made available by a Party to the other Party in connection with this Agreement to the CAISO, the CPUC, and all divisions thereof, the California Energy Commission, and participants of the Procurement Review Group established pursuant to D.02-08-071 and D.03-06-071; provided, that each disclosing Party shall use reasonable efforts to limit, to the extent possible, the ability of any such applicable Governmental Authority, CAISO, or SC to further disclose such information. In addition, in the event Buyer resells all or any portion of the Contract Quantity to another party, Buyer shall be permitted to disclose to the other party to such resale transaction all such information necessary to effect such resale transaction.

ARTICLE 6. MARKET BASED RATE AUTHORITY
Seller agrees, in accordance with FERC Order No. 697, to, upon request of Buyer, submit a letter of concurrence in support of any affirmative statement by Buyer that this contractual arrangement does not transfer “ownership or control of generation capacity” from Seller to Buyer as the term “ownership or control of generation capacity” is used in 18 CFR § 35.42. Seller also agrees that it will not, in any filings, if any, made subject to FERC Order Nos. 652 and 697, claim that this contractual arrangement conveys ownership or control of generation capacity from Seller to Buyer.

ARTICLE 7. COLLATERAL REQUIREMENTS

7.1 Counterparty Collateral Requirements
Notwithstanding anything to the contrary contained in the EEI Agreement, Counterparty shall have a Full Floating Independent Amount if Counterparty or its Guarantor, if any, does not maintain Credit Ratings of at least (a) BBB- from Confidential Resource Adequacy Capacity Confirmation
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14 S&P and Baa3 from Moody’s, if such entity is rated by the Ratings Agencies, or (b) BBB- by S&P or Baa3 by Moody’s if such entity is rated by only one Ratings Agency. The initial Full Floating Independent Amount (“FFIA”) shall equal to the value set forth in Appendix B calculated at 20% of the sum of the total Contract Quantity for each year, multiplied by the Contract Price, multiplied by 1000. The FFIA will be updated each year with the then current Forecasted Market Price Benchmark. The FFIA shall remained posted until the final annual true up invoice is paid in accordance with Section 3.4. For the purposes of calculating the Collateral Requirement pursuant to Paragraph 3 of the Collateral Annex, the FFIA for Counterparty shall be added to the Exposure Amount for SCE and subtracted from the Exposure Amount for Counterparty.

For the purposes of calculating Exposure, the Monthly Payment shall be deemed accrued and payable upon the initial Compliance Showing Deadline for the applicable Showing Month.

7.2 Current Mark-To-Mark
et Value
The Parties further agree that for the purposes of calculating the Collateral Requirement pursuant to Paragraph 3 of the Collateral Annex, the Current Mark- to-Market Value for this Transaction is deemed to be zero. If at any time prior to the expiration of the Delivery Period, a liquid market for a resource adequacy Capacity product develops wherein price quotes for such a product can be obtained, the Parties agree to amend the Confirmation to include a methodology for calculating the Current Mark-to-Market Value for this Transaction.

7.3 Credit Terms
The Parties agree that the credit and collateral provisions of the EEI Agreement shall govern this Transaction; provided, however, that for purposes of calculating a Party’s Collateral Requirement pursuant to Paragraph 3 of the Collateral Annex, with respect to this Transaction only (a) if Counterparty has Exposure to SCE, then the amount of Exposure for this Transaction is deemed to be zero dollars ($0), and (b) in no event shall SCE be required to post or maintain an Independent Amount with Counterparty.

ARTICLE 8. OTHER

8.1 Declaration of an Early Termination Date and Calculation of Settlement Amounts
The Parties shall determine the Settlement Amount for this Transaction in accordance with Section 5.2 of the Master Agreement, provided that, with respect to this Transaction only, the following language is added at the end of Section 5.2 of the Master Agreement, with any terms which are defined in this Confirmation Confidential Resource Adequacy Capacity Confirmation
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15 being used in the Master Agreement with the definitions given to such terms in this Confirmation:
“If Buyer is the Non- Defaulting Party and Buyer reasonably expects to incur penalties, fines or costs from the CPUC, the CAISO, or any Governmental Authority having jurisdiction, because Buyer is not able to include the applicable Contract Quantity in any applicable Compliance Showing due to Seller’s Event of Default, then Buyer may, in good faith, estimate the amount of those penalties or fines and include this estimate in its determination of the Settlement Amount, subject to accounting to Seller when those penalties or fines are finally ascertained. If this accounting establishes that Buyer’s estimate exceeds the actual amount of penalties or fines, Buyer shall promptly remit to Seller the excess amount. The rights and obligations with respect to determining and paying any Settlement Amount or Termination Payment, and any dispute resolution provisions with respect thereto, shall survive the termination of this Transaction and shall continue until after those penalties or fines are finally ascertained.”

8.2 No Waiver
The failure of either Party to insist in any one instance upon strict performance of any the provisions of this Agreement or to take advantage of any of its rights hereunder shall not be construed as a waiver of any such provisions or the relinquishments of such rights for the future, but the same shall continue and remain in full force and effect. Waiver by either Party of any default of the other Party shall not be deemed a waiver of any other default. Waiver by either Party of any failure to comply with any timeline or deadline by the other Party as provided herein in any instance, shall not be deemed a waiver of any failure to comply with such timeline or deadline in the future, or otherwise establish a course of performance.
[Remainder of Page Intentionally Left Blank]
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16 In WITNESS WHEREOF, the Parties have caused this Confirmation to be duly executed as of the Confirmation Effective Date first written:

{COUNTERPARTY LEGAL NAME},

a {type of organization}.

SOUTHERN CALIFORNIA EDISON

COMPANY,

a California corporation.

By:

By:

Name: Name: William V. Walsh
Title: Title: Vice President,
Energy Procurement & Management
Date: Date:

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17 APPENDIX A

DEFINED TERMS
“Agreement” ha s the meaning specified in the introductory paragraph of this Confirmation. “Alternate Capacity” means Product which Seller has elected to provide to Buyer in accordance with the terms of Section 2.3.
“Alternate Unit” means a generating unit meeting the requirements specified in Section

2.3. “Annual Supply Plan” has the meaning set forth in the CAISO Tariff. “Applicable Laws” means the CAISO Tariff and all constitutions, treaties, laws, ordinances, rules, regulations, interpretations, permits, judgments, decrees, injunctions, writs and orders of any Governmental Authority that apply to either or both of the Parties, the Project, the Unit or the terms of this Agreement.
“Availability Incentive Payments” ha
s the meaning set forth in the CAISO Tariff.
“Availability Standards” has the meaning set forth in the CAISO Tariff. “Benefiting Load Serving Entity SCID” is as specified in Appendix D. “Buyer” has the meaning specified in Appendix B.
“Buyer Approved Planned Outage” has the meaning set forth in Section 2.2. “CAISO” means the California Independent System Operator Corporation, or any successor entity performing the same functions.
“CAISO Control Area” h as the meaning set forth in the CAISO Tariff. “CAISO Controlled Grid” has the meaning as set forth in the CAISO Tariff. “CAISO Tariff” means the California Independent System Operator Corporation Tariff, Business Practice Manuals (BPMs), Operating Agreements, and Operating Procedures, including the rules, protocols, procedures and standards attached thereto, as the same may be amended or modified from time to time and approved by FERC, if applicable. “Capacity Attributes” me
ans, with respect to a Unit, any and all of the following, in each case which are attributed to or associated with the Unit at any time throughout the Delivery Period:
(a) resource adequacy attributes, as may be identified from time to time by the CP
UC, CAISO, or other Governmental Authority having jurisdiction, that can be counted toward RAR;
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18 (b) resource adequacy attributes or other locational attributes for the Unit related to a Local Capacity Area, as may be identified from time to time by the CPUC, CAISO or other Governmental Authority having jurisdiction, associated with the physical location or point of electrical interconnection of the Unit within the CAISO Control Area, that can be counted toward a Local RAR; and (c) other current or future defined characteristics, certificates, tags, credits, or accounting constructs, howsoever entitled, including any accounting construct counted toward any Compliance Obligation;
(d) if the Parties have selected Flexible Capacity as being “Applicable”, flexible capacity resource adequacy attributes for the Unit, including, without limitation, the amount of Unit EFC and MWs associated with Unit EFC as may be identified from time to time by the CPUC, CAISO, or other Governmental Authority having jurisdiction, that can be counted toward Flexible RAR; provided further, notwithstanding the foregoing, Capacity Attributes shall exclude intra - month substitution resource adequacy attributes.
“Capacity Procurement Mechanism” h
as the meaning set forth in the CAISO Tariff.
“Collateral Annex ” has the meaning specified in the introductory paragraph of this Confirmation.
“Compliance Notification Deadline ” me ans, for each Showing Month, fifteen (15) Business Days before the Compliance Showing Deadline.
“Compliance Obligations” means the RAR and Local RAR.
“Compliance Showings” means the (a) Local RAR compliance or advisory showings (or similar or successor showings) and (b) RAR compliance or advisory showings (or similar or successor showings), and, if applicable, (c) Flexible RAR compliance or advisory showings (or similar successor showings), in each case, a CPUC Load Serving Entity is required to make to the CPUC (and, to the extent authorized by the CPUC, to the CAISO) pursuant to the CPUC Decisions, to the CAISO pursuant to the CAISO Tariff, or to any Governmental Authority having jurisdiction.
“Compliance Showing Deadline” means, for each Showing Month, the Compliance Showing plan submission due date for such Showing Month. For illustrative purposes only, as of the Confirmation Effective Date, the applicable Compliance Showing plan submission due dates are as follows: (A) forty-five (45) days prior to the Showing Month covered by the Supply Plan for the Monthly Supply Plan; and (B) the last Business Day of October that is prior to commencement of the year for the Annual Supply Plan, such dates may be modified by the CAISO from time to time throughout the Term. “Confirmation” has
the meaning specified in the introductory paragraph of this Confirmation.

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19 “Confirmation Effective Date” has the meaning specified in the introductory paragraph of this Confirmation.
“Contract Price” m eans, for any Showing Month, the price specified in Appendix B under the column titled “Contract Price” for such Showing Month. “Contract Quantity” me ans, with respect to any particular Showing Month of the Delivery Period, the amount of Product associated with the number of MW set forth in Appendix B under the column titled “Contract Quantity”, which Seller has agreed to provide to Buyer from the Unit(s) for each Showing Month. I f the Parties have selected Flexible Capacity as being “Applicable”, the Contract Quantity includes Product which is Flexible Capacity in an amount equal to the amount identified in the Appendix B. All Co ntract Quantity is Inflexible Capacity except to the extent identified as Flexible Capacity Appendix C. “Contract Quantity Unit Allocation” has t
he meaning set forth in Section 2.1(c).
“Contracted Amount” means the incremental capacity Seller procured to count towards Seller’s procurement obligations in D.19-11-016 as reflected in Appendix C. “Cover Sheet ” has t he meaning specified in the introductory paragraph of this Confirmation.
“CPM Capacity” ha s the meaning set forth in the CAISO Tariff. “CPUC” means the California Public Utilities Commission. “CPUC Decisions” means CPUC Decisions 04-01-050, 04-10-035, 05-10-042, 06-04-040, 06-06-064, 06-07-031, 07-06-029, 08-06-031, 09-06-028, 10-06-036, 11-06-022, 12-06- 025, 13-06-024, 14-06-050, and any other existing or subsequent decisions, resolutions, or rulings related to resource adequacy, including, without limitation, the CPUC Filing Guide, in each case as may be amended from time to time by the CPUC. “CPUC Filing Guide” is the document issued annually by the CPUC which sets forth the guidelines, requirements and instructions for load serving entities to demonstrate compliance with the CPUC’s resource adequacy program.
“Current Mark-to-Marke t Value” has the meaning specified in Section 8.2 “Delivery Period” has the meaning specified in Section 1.3(a). “EEI” has the meaning specified in the introductory paragraph of this Confirmation. “EEI Agreement ” has the meaning specified in the introductory paragraph of this Confirmation.
“Effective Flexible Capacity” has the meaning set forth in the CAISO Tariff.

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20 “Expected Contract Quantity” means, with respect to any Showing Month of the Delivery Period, the Contract Quantity of Product for such Showing Month, including the amount of Contract Quantity of Product that Seller has elected to provide Alternate Capacity, and after giving effect to any reductions to Contract Quantity as specified in Section 2.2 with respect to which Seller has not elected to provide Alternate Capacity. “Final Market Price Benchmark” means the higher of the f inal S ystem RA Adder or the
final Flexible RA Adder in the “Calculation of the Market Price Benchmarks for the Power Charge Indifference Adjustment Forecast and True Up” (or successor document) published by the CPUC on or about November of each calendar year in accordance with CPUC Decision 19-10-001.
“Flexible Capacity” me ans, with respect to any particular Showing Month of the Delivery Period, the number of MW of Product set forth in Appendix B under the column titled “Flexible Capacity” which Seller has agreed to provide to Buyer from the Unit(s) as part of the Contract Quantity for such Showing Month, and which such MW of Product are eligible to satisfy a load serving entity’s Flexible RAR and which such MW of Product are associated with MW of the Unit that are part of the Unit EFC. “Flexible RAR ” means t
he flexible capacity requirements established for load serving entities by the CPUC pursuant to the CPUC Decisions, the CAISO pursuant to the CAISO Tariff, or by any other Governmental Authority having jurisdiction and includes any non- binding advisory showings which a load serving entity is to make with respect to flexible capacity.
“Forecasted Market Price Benchmark” mean
s the higher of the forecast System RA Adder
or forecast Flexible RA Adder in the “Calculation of the Market Price Benchmarks for the Power Charge Indifference Adjustment Forecast and True Up” (or successor document) published by the CPUC on or about the fourth (4
th) quarter of each calendar year in
accordance with CPUC Decision 19-10-001.
“Governmental Authority” means any: (a) federal, state, local, municipal or other government; (b) governmental, regulatory or administrative agency, commission or other authority lawfully exercising or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power; and (c) court or governmental tribunal. “Independent Evaluator” has the meaning set forth in CPUC Decision 04-12-048. “Inflexible Capacity” means, with respect to any particular Showing Month of the Delivery Period, the number of MW of Product set forth in Appendix B under the column titled “Contract Quantity”, minus the number of MW of Product set forth in Appendix B under the column titled “Flexible Capacity”, which Seller has agreed to provide to Buyer from the Unit as part of the Contract Quantity for such Showing Month, and which such MW of Product are not eligible to satisfy a load serving entity’s Flexible RAR and which are Product associated MWs of the Unit that are not part of or outside the Unit EFC. Inflexible Capacity is also known as ‘generic capacity’.

Confidential Resource Adequacy Capacity Confirmation
MCAM RA Agreement #####-#### SCE – City of Palmdale

21 “Local Capacity Area” has the meaning set forth in the CAISO Tariff. “Local RAR” means the local resource adequacy requirements established for load serving entities by the CPUC pursuant to the CPUC Decisions, the CAISO pursuant to the CAISO Tariff, or by any other Governmental Authority having jurisdiction. Local RAR may also be known as local area reliability, local resource adequacy, local resource adequacy procurement requirements, or local capacity requirement in other regulatory proceedings or legislative actions.
“Maintenance Outage” ha
s the meaning set forth in the CAISO Tariff. “Master Agreement” has the meaning specified in the introductory paragraph of this Confirmation. “Monthly Payment” has the meaning specified in Section 3.1. “Monthly Supply Plan” has the meaning set forth in the CAISO Tariff. “MW” means megawatt (or 1,000 kilowatts) of alternating current electric energy generating capacity.
“Net Qualifying Capacity” has the meaning set forth in the CAISO Tariff. “Next Showing Month” means the next calendar month for which a Compliance Showing will be made.
“Non-Availability Charges” has the meaning set forth in the CAISO Tariff. “Planned Outage” means a maintenance outage taken by a Unit originally identified in Appendix C, as such maintenance outage is determined by the applicable Unit or Unit SC. “Product” means the Capacity Attributes of the Unit(s), including any capacity from RMR Contracts for the applicable Unit, or its successor, Capacity Procurement Mechanism, or its successor, and RUC Availability Payments, or its successor; provided that:
(a) Product does not include any right to count the Contract Quantity toward the proc
urement requirements pursuant to D.19-11-016 or D.21-06-035; (b) Product does not include any right to the energy or ancillary services from the Unit;
(c) any change by the CAISO, CPUC or other Governmental Authority that defines new or re-defines existing Local Capacity Areas that results in a decrease or increase in the amount of Capacity Attributes related to a Local Capacity Area provided hereunder will not result in a change in payments made pursuant to this Transaction;
(d) the Parties agree that, under this Confirmation, if the CAISO, CPUC or other Governmental Authority defines new or re-defines existing Local Capacity Confidential Resource Adequacy Capacity Confirmation
MCAM RA Agreement #####-#### SCE – City of Palmdale

22 Areas whereby the Unit subsequently qualifies for a Local Capacity Area, the Product shall include all Capacity Attributes related to such Local Capacity Area;
(e) if the Parties have selected Flexible Capacity as being “Applicable”, any change by the CAISO, CPUC or other Governmental Authority that defines new or re- defines existing Flexible RAR, Capacity Attributes related to Flexible RAR, or attributes of the Unit related to Flexible RAR, that results in a decrease or increase in the amount of Capacity Attributes related to Flexible RAR provided hereunder will not result in a change in payments made pursuant to this Agreement; and
(f) if the Parties have selected Flexible Capacity as being “Applicable”, the Parties agree that, under this Agreement, if the CAISO, CPUC or other Governmental Authority defines new or re-defines existing Flexible RAR, Capacity Attributes related to Flexible RAR, or attributes of the Unit related to Flexible RAR whereby the Unit, or a portion of the Unit which did not previously qualify to satisfy Flexible RAR, subsequently qualifies to satisfy Flexible RAR, the Product shall include all Capacity Attributes of the Unit related to Flexible RAR, including any Capacity Attributes related to Flexible RAR with respect to any portion of the Unit which previously was not able to satisfy Flexible RAR. “RAR” means the resource adequacy requirements established for load serving entities by the CPUC pursuant to the CPUC Decisions, the CAISO pursuant to the CAISO Tariff, or by any other Governmental Authority having jurisdiction. “Replacement Capacity” has
the meaning specified in Section 2.4.
“Replacement Capacity Price” means the market price for Product with Capacity Attributes reasonably equivalent to the quantity of Product not provided by Seller under this Confirmation, as determined in the manner upon which market prices are determined under Section 5.2(b) of the Master Agreement. For purposes of this Transaction and Confirmation, the “Replacement Capacity Price” shall be deemed to be the “Replacement Price” as defined in Section 1.51 of the Master Agreement. “Replacement Obligation” has the meaning specified in Section 2.4. “Resold Product” has the meaning specified in Section 2.6. “Resource Category” shall be as described in the annual CPUC Filing Guide, as such may be modified, amended, supplemented or updated from time to time. “RMR Contracts” ha s the meaning set forth in the CAISO Tariff. “RUC Availability Bid” has the meaning set forth in the CAISO Tariff. “RUC Availability Payment” has the meaning set forth in the CAISO Tariff.

Confidential Resource Adequacy Capacity Confirmation
MCAM RA Agreement #####-#### SCE – City of Palmdale

23 “SC” has the meaning set forth in the CAISO Tariff.
“SC Substitute Capacity” has the meaning set forth in Section 2.8. “Seller” has the meaning specified in Appendix B.
“Seller Supply Agreement” means the agreement between Seller and the project company that owns and operates the Unit(s) identified in Appendix C under which Seller purchased product being sold pursuant to this Confirmation. “Showing Month” shall be the calendar month of the Delivery Period that is the subject of the Compliance Showing, as set forth in the CPUC Decisions and outlined in the CAISO Tariff. For illustrative purposes only, pursuant to the CAISO Tariff and CPUC Decisions in effect as of the Confirmation Effective Date, the monthly Compliance Showing made in June is for the Showing Month of August. “Showing Month Notice” has the meaning specified in Section 2.1(b). “Supply Plan” has the meaning set forth in the CAISO Tariff. “Supply Plan Obligation” has the meaning specified in Section 2.1(a). “Term” has the meaning specified in Section 1.3(b).
“Unit EFC” means the Effective Flexible Capacity (in MW) of the Unit. The Parties agree that if the CAISO adjusts the Effective Flexible Capacity of a Unit after the Agreement Effective Date, then for the period in which the adjustment is effective, the Unit EFC shall be deemed the lesser of (i) the Unit EFC as of the Agreement Effective Date, or (ii) the CAISO-adjusted Effective Flexible Capacity. “Unit EFC Category” sha
ll be as described in the annual CPUC Filing Guide, as such may be modified, amended, supplemented or updated from time to time. “Unit(s)” shall mean the generation assets described in Appendix C ( and any Alternate Unit(s)), from which Product is provided by Seller to Buyer. “Unit NQC” means the Net Qualifying Capacity set by the CAISO for the applicable Unit. The Parties agree that if the CAISO adjusts the Net Qualifying Capacity of a Unit after the Confirmation Effective Date, then for the period in which the adjustment is effective, the Unit NQC shall be deemed the lesser of (i) the Unit NQC as of the Confirmation Effective Date, or (ii) the CAISO-adjusted Net Qualifying Capacity.

Confidential Resource Adequacy Capacity Confirmation
MCAM RA Agreement #####-#### SCE – City of Palmdale

24 APPENDIX B

FLEXIBLE CAPACITY, DELIVERY PERIOD, CONTRACT QUANTITY,

CONTRACT PRICE, AND FULL FLOATING INDEPENDENT AMOUNT

The quantities specified in this table will control in the event of a conflict between these values and those in Appendix C. The Parties agree to revise the Appendix C as necessary to ensure that the Contract Quantity and Flexible Capacity are satisfied in full.

Buyer City of Palmdale
Seller Southern California Edison Company

Flexible Capacity Applicable Not applicable
Delivery Period January 01, 2025 through September 30, 2041, inclusive.

Start End Months Contract
Quantity (MW)
Contract Flexible
Capacity (MW)
Contract Price
($/kW-month)1
01/01/2025 07/31/2031 87 TBD
08/01/2031 05/31/2034 34 TBD
06/01/2034 07/31/2034 2 TBD
08/01/2034 07/31/2036 24 TBD
08/01/2036 05/31/2037 10 TBD
06/01/2037 07/31/2041 50 TBD
08/01/2041 08/31/2041 1 TBD
09/01/2041 09/30/2041 1 TBD

Initial Full Floating Independent Amount TBD

1 Contract Price is the Forecasted Market Price Benchmark ($6.41 for 2023). The Contract Price for each year will reflect the Forecasted Market Price Benchmark which will then be trued up to the Final Market Price Benchmark in accordance with Section 3.4 of this Confirmation.

Confidential Resource Adequacy Capacity Confirmation
MCAM RA Agreement #####-#### SCE – City of Palmdale

26 APPENDIX D

SUPPLY PLAN INFORMATION

Benefitting load serving entity SCID: {SCID}

Counterparty Supply Plan contact information:

Name: {Counterparty supply plan contact name}
Email: {Counterparty supply plan contact email}
Phone Number: {Counterparty supply plan contact phone number}

SCE Supply Plan contact information
2:

Email: [email protected]
Phone Number: 626-302-9274 and 626-201-8875

2 SCE Contract Manager must also be included on all communications.

Confidential Resource Adequacy Capacity Confirmation
MCAM RA Agreement #####-#### SCE – City of Palmdale

27 APPENDIX E

SUBSEQUENT SALE INFORMATION

Contract Key ID:

Subsequent sale contract quantity
(in MW):

Subsequent sale delivery period:

Amount of Inflexible Capacity
included in subsequent sale contract
quantity (in MW):

New benefitting load serving entity
SC identification number:

City Council Staff Report
DATE: FEBRUARY 21, 2024
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: PUBLIC SAFETY DEPARTMENT
DISTRICT: ALL
SUBJECT: ADOPT RESOLUTION NO. CC 2024 -011, A RESOLUTION OF THE

CITY COUNCIL OF THE CITY OF PALMDALE AUTHORIZING THE

ACCEPTANCE OF THE CALIFORNIA DEPARTMENT OF JUSTICE

TOBACCO GRANT PROGRAM FUNDS IN THE AMOUNT OF
$793,710 AND APPROVE THE RELATED AGREEMENT FOR THE
TERM OF NOVEMBER 1, 2023, THROUGH JUNE 30, 2027

RECOMMENDATION
Staff recommends that the City Council:

1. Adopt Resolution No. CC 2024-011, a Resolution of the City Council of the City of Palmdale authorizing the acceptance of the California Department of Justice Tobacco Grant Program funds in the amount of $793,710 and approving the related agreement for the term of November 1, 2023, through June 30, 2027; and

2. Authorize the City Manager, or her designee, to execute the Agreement with the California Department of Justice Tobacco Grant Program and submit all documents, including, but not limited to, amendments and payment requests, as appropriate to accept the funds and comply with the conditions of the grant.

BACKGROUND
On July 10, 2018, the City of Palmdale adopted Resolution No. CC 2018 -053, authorizing the implementation of the City’s Tobacco Outreach and Enforcement Program, and the acceptance of $435,000 from the California Department of Justice Tobacco Grant Program (Tobacco Grant) and related Memorandum of Understanding (A-6917), with a term of June 1, 2018, through June 30, 2020.

On April 7, 2020, th e City accepted an additional allocation of $361,243 from the California Department of Justice Tobacco Grant Program, with a term of July 1, 2020, through June 30, 2022.

Report to Mayor and City Council
Re: California Department of Justice Tobacco Grant Program February 21, 2024

The City of Palmdale has seventy-eight (78) licensed tobacco retailers within its jurisdiction. Tobacco Grant funds have been approved for enforcement, investigation, compliance checks, and education of local tobacco laws and ordinances.

DISCUSSION
The approved allocation of funds for the enforcement program includes inspections of randomly selected tobacco retailers and conducts a series of tobacco enforcement sweeps to ensure compliance with local and state laws. The program provides an innovative approach focused on enforcement, investigation, compliance, and education, including the following goals:
● Identify and target problematic retailers of tobacco products. ● Conduct quarterly tobacco-related enforcement operations targeting licensed retailers.
● Where violations are present, conduct post-enforcement operations, including issuing “Notice of Violations” and citations, when appropriate. ● Conduct quarterly “shoulder tap” or other operations involving the furnishing of tobacco products to minors from non-commercial sources. ● Conduct weekly local tobacco retail license inspection operations. ● Conduct quarterly operations involving the sale of single cigarettes. ● Conduct quarterly operations involving the sale of tobacco products violating local ordinances.

The Department of Justice has allocated funding for two full-time code enforcement officers and the Los Angeles County Sheriff’s Department to enforce tobacco-related laws for the term of the agreement.

Staff recommends that the Council adopt Resolution No. CC 2024-011, authorizing the acceptance and continuation of the California Department of Justice Tobacco Grant Program funds and the related agreement (A-8670), approve two full-time code enforcement officer positions and direct the City Manager, or her designee, to execute any documents related to the agreement, acceptance, and continuation of the grant.

FISCAL IMPACT
$793,710; this grant is available on a reimbursement basis, with $252,708 allocated for fiscal year 2023-24 and $264,162 and $276,300, respectively, for fiscal year 2024-25 and fiscal year 2025-26.

Report to Mayor and City Council
Re: California Department of Justice Tobacco Grant Program February 21, 2024

STRATEGIC PLAN
Goal I: Maintain effective public safety and protection for life, property, and the environment.

A. Provide comprehensive and innovative safety services to prevent crime and promote a safe community.

Prepared by: Andrea Navarrette, Community Compliance
Coordinator
Certified as to availability of Funds: Janelle Samson, Director of Operations Approved by: Ronda Perez, City Manager
Approved as to form: William P. Curley, III, City Attorney

ATTACHMENTS
Reso. No. CC 2024-011
Agrmt No. A-8670 with the California Department of Justice Tobacco Grant Program

CITY COUNCIL

CITY OF PALMDALE, CALIFORNIA
RESOLUTION NO. CC 2024-011

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALMDALE

AUTHORIZING THE ACCEPTANCE OF THE CALIFORNIA

DEPARTMENT OF JUSTICE TOBACCO GRANT PROGRAM FUNDS IN
THE AMOUNT OF $793,710 FOR THE TERM OF NOVEMBER 1, 2023, THROUGH JUNE 30, 2027.

A. INTENT OF THE CITY COUNCIL

1. The California Healthcare, Research, and Prevention Tobacco Tax Act of 2016 (Proposition 56) provides local public agencies with funding to reduce illegal sales and marketing of cigarettes and tobacco products, including e-cigarettes, to minors through the California Department of Justice Tobacco Grant Program; and

2. Proposition 56, approved by voters in 2016 and enacted in April of 2017, increased taxes on cigarettes and other tobacco products by $2.00, and allocates a portion of the annual revenue to local cities, counties, public schools, law enforcement agencies, city attorneys and county counsels through the California Department of Justice; and

3. For Fiscal Year 2023-2024, an estimated $24.6 million in grant funding is available statewide to support local enforcement efforts to reduce the illegal sale of tobacco products to minors; and

4. Staff applied for the California Department of Justice Tobacco Grant Program funding to combat illegal tobacco sales to minors in the City of Palmdale and was awarded $793,710; and

5. Per the Tobacco Grant Program guidelines, awarded jurisdictions must obtain approval and authorization from their growing body to accept the award and funding.

B. RESOLUTION

NOW, THEREFORE, BE IT RESOLVED, THE CITY COUNCIL OF THE CITY OF

PALMDALE DOES HEREBY FIND, DETERMINE, RESOLVE, AND ORDER AS FOLLOWS:

Resolution No. CC 2024-011

SECTION 1. Authorizes acceptance of the California Department of Justice Tobacco Grant Program funds in the amount of $793,710.

SECTION 2. Delegates the authority to the City Manager, or her designee, to execute the Agreement with the California Department of Justice Tobacco Grant Program and submit all documents, including, but not limited to, amendments and payment requests, as appropriate to accept the funds and comply with the conditions of the grant.

SECTION 3. The City Manager is hereby authorized and directed to establish all required accounts and make any expenditures, appropriations, transfers, and/or distributions of funds on behalf of the City as are necessary and appropriate to carry out the purpose and intent of this resolution.

SECTION 4. The City Clerk shall certify the adoption of this resolution.

PASSED, APPROVED and ADOPTED this ______ day of ____________, ________. _________________________________
Approved as to form: Austin Bishop, Mayor
ATTEST:
___________________________ _________________________________ William P. Curley, III Rochelle Scott, Acting City Clerk City Attorney
I, Rochelle Scott, Acting City Clerk of the City of Palmdale, California, do hereby certify that the foregoing resolution was duly passed, approved, and adopted by the City Council of the City of Palmdale at a regular meeting of said Council held on the ______ day of _____________, 20___ by the following roll call vote:

AYES:

NOES:___________________________________________________________ ABSTAIN:______________________ABSENT:___________________________ Date:

Rochelle Scott, Acting City Clerk
Tobacco Grant Program
Grant Services Branch – Local Assistance
Division of Operations
City of Palmdale – Public Safety DOJ-PROP56-2023-24-1-021 Agreement No. A-8670

City of Palmdale
A-8670
Mario Vallarta, Community Compliance Manager
Public Safety
38256 Sierra Highway
Palmdale, CA 93550
(661) 267-5436

MEMORANDUM OF UNDERSTANDING
with the
California Department of Justice
November 1, 2023 – June 30, 2027
City of Palmdale – Public Safety DOJ-PROP56-2023-24-1-021 Agreement No. A-8670

MEMORANDUM OF UNDERSTANDING

PURPOSE
This Memorandum of Understanding (“MOU”) is entered into by the Department of Justice (“DOJ”) and the City of Palmdale Public Safety Department (“Grantee”), for the purpose of disbursing grant funds to Grantee for reimbursement of expenditures in compliance with the California Code of Regulations and the Fiscal Year 2023-24 Grantee Handbook.

Commencing January 1, 2023, the California Code of Regulations, Title 11, Division 1, Chapter 5:

Department of Justice Tobacco Grant Program (“TGP Regulations”) shall govern the policies and procedures of the Tobacco Grant Program.

The TGP Regulations, Request for Proposals, Grantee Handbook (dated March 2023), and Summary of Award document are hereby incorporated by reference into this MOU. Grantee will expend funds for the purposes identified in the approved Summary of Award document. Reimbursements are to be funded under the California Healthcare, Research and Prevention Tobacco Tax Act of 2016, approved by the voters as Proposition 56.

COST REIMBURSEMENT
DOJ agrees to reimburse Grantee in arrears, for Grantee’s actual expenditures in performing the project or scope of work included in the approved Summary of Award document. Reimbursements will be made upon receipt of invoices from Grantee and approval of the invoices by DOJ, in accordance with the reimbursement procedures set forth in the TGP Regulations and Grantee Handbook.

BUDGET CONTINGENCY CLAUSE
It is mutually agreed, if the Budget Act of the current fiscal year and/or any subsequent years covered under the MOU does not appropriate sufficient funds, the MOU shall be of no further force and effect.

In the event this situation occurs, DOJ shall have no liability to reimburse/pay any funds to Grantee, or to furnish any other considerations under this MOU. As well, Grantee shall not be obligated to continue performing the provisions of this MOU, for which the Grantee would have been reimbursed.

If funding for any fiscal year is reduced or deleted in the Budget Act for purposes of this MOU, DOJ shall have the option to either cancel this MOU with no liability occurring to DOJ, or offer an addendum to the Grantee to reflect the reduced amount.

PROJECT BREACH-TERMINATION
Failure of a Grantee to comply with this MOU or the TGP Regulations shall be treated by DOJ as a breach of contract. If an act of noncompliance occurs, DOJ may take actions described within the TGP Regulations, including termination. DOJ may terminate this MOU and be relieved of any obligation to disburse grant funds to Grantee should Grantee fail to perform the scope of work at the time and in the manner provided in this MOU.

MISCELLANEOUS PROVISIONS
City of Palmdale – Public Safety DOJ-PROP56-2023-24-1-021 Agreement No. A-8670

Addendum – No addendum or variation of the terms of this MOU is valid unless made in writing, and signed by the duly authorized representatives of the parties.

Assignment – This MOU is not assignable by Grantee in whole or in part.

Indemnification – Grantee agrees to indemnify and hold harmless DOJ, its officers, agents and employees from all claims, liabilities, or losses in connection with the performance of this MOU.

Certifications – Grantee certifies that it does not receive funding from a manufacturer, distributor, or advertiser of Cigarettes or Tobacco Products. Grantee further certifies that grant funds will not supplant existing state or local funds dedicated for the same purpose.

TERMS
Grant Duration: 11/1/2023 – 6/30/2027
Award Amount
Category of Expenditure Budget
FY 2023-2024
Budget
FY 2024-2025
Budget
FY 2025-2026
Budget
FY 2026-2027
Personal Services $229,802 $241,256 $253,394 $
Operating Expenses and
Equipment $22,906 $22,906 $22,906 $
Administrative Costs (Not to
Exceed 5%) $0 $0 $0 $
TOTAL AWARD AMOUNT $793,170
The time limit for reimbursements against this award ends 6/30/2026. Requests for reimbursement received after 7/15/2027 cannot be considered by DOJ.

GRANTEE CONTACT INFORMATION
Mario Vallarta, Community Compliance Manager
City of Palmdale – Public Safety Department
38256 Sierra Highway
Palmdale, CA 93550
661-267-5314
[email protected]
Andrea Navarrette, Community Compliance Coordinator
City of Palmdale – Public Safety Department
38256 Sierra Highway
Palmdale, CA 93550
661-267-5273
[email protected]
City of Palmdale – Public Safety DOJ-PROP56-2023-24-1-021 Agreement No. A-8670

AUTHORIZATION
DOJ and Grantee, by their duly authorized officials, have executed this MOU on the respective dates indicated below. This MOU and any future addendums shall be e-mailed to [email protected], care of the Division of Operations, Grant Services Branch, Local Assistance Unit, Tobacco Grant Program, and will become fully executed upon completion of signatures from all parties.
___________________________________ ___________________ Ronda Perez, City Manager Date
City of Palmdale
APPROVED AS TO FORM:
___________________________________ ___________________ William P. Curley, III, City Attorney Date
City of Palmdale
ATTEST:
___________________________________ ___________________ Roxanne Faber, City Clerk Date
City of Palmdale
______________________________ ___________________
JENNIFER IVERY JOHNSON, Grant Manager Date
Division of Operations
California Department of Justice
___________________________________ ___________________ STACY HEINSEN, Administrative Manager Date
Division of Operations
California Department of Justice
__________________________________ ___________________
CHRIS RYAN, Chief Date
Division of Operations
California Department of Justice
City Council Staff Report
DATE: FEBRUARY 21, 2024
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: CITY MANAGER DEPARTMENT

LEGISLATIVE AFFAIRS DIVISION
DISTRICT: ALL
SUBJECT: APPROVE THE CITY’S 2024 STATE AND FEDERAL LEGISLATIVE PLATFORM TO PROMOTE PALMDALE’S PRIORITIES AND

LEGISLATIVE INITIATIVES AT THE STATE AND FEDERAL LEVELS

RECOMMENDATION
Staff recommends that the City Council approve the City’s 2024 State and Federal Legislative Platform (Legislative Platform) to promote Palmdale’s legislative priorities.

BACKGROUND
Active legislative engagement is necessary to protect and enhance the interests of Palmdale’s residents and businesses. The City Council has identified the importance of having an approved and current Legislative Platform to improve the organization’s legislative efficiency and effectiveness. The City Council last approved the City’s Legislative Platform on February 5, 2019.

DISCUSSION
Approving an updated Legislative Platform provides the framework to continue addressing the fundamental issues deemed by the City Council as imperative to the City and community while delivering a proactive approach to deal with the rapidly changing nature of state and federal legislative and policy issues . The development of the Legislative Platform allows for aguiding blueprint to engage in proactive advocacy efforts at the state and federal le vels. The Legislative Platform will form a cornerstone of the City’s advocacy and legislative priorities in four strategic areas that staff will utilize to advance City initiatives: Building Culture & Community, Economic Vitality & Innovation, Social Unity, and Transportation & Infrastructure.

City staff works collaboratively with the City’s contracted state lobbying firm, Gonsalves & Son, and federal lobbying firms,Lincoln Park Group, LLC and Townsend Public Affairs, Cal Cities (formerly League of Califo rnia Cities) , and the California Contract Cities Association (CCCA) to monitor and track legislation impactinglocal governments. These Report to Mayor and City Council
Re: 2024 State and Federal Legislative Platform
February 21, 2024

advocacy teams work with the City and lawmakers to sponsor, draft, and support legislative and regulatory measures that encourage local control, lobby against policies that threaten it, and provide the City with a louder voice than we would achieve alone.

While serving as a work plan for City staff, the Legislative Platform will remain flexible and can be revised and improved upon as needed. It will be reviewed annually in preparation for the following year in response to changing needs and opportunities related to the state and federal legislative and regulatory environment.

The State and Federal Legislative Platform will be posted on the City’s website upon the City Council's approval.

FISCAL IMPACT
Adopting the State and Federal Legislative Platform has no direct fiscal impact on the City.

STRATEGIC PLAN
Goal II: Ensure long-term fiscal health of the City and maintain funding for services.

D. Pursue alternative financing opportunities for continued infrastructure improvements and quality community programs.

Prepared by: Terrie Zayas, City Council Chief of Staff
Certified as to availability of Funds: Janelle Samson, Director of Operations Approved by: Ronda Perez, City Manager
Approved as to form: William P. Curley, III, City Attorney

ATTACHMENTS
2024 State and Federal Legislative Platform

2024 LEGISLATIVE PLATFORM
A REGIONAL STRATEGY TO PROMOTE PALMDALE’S LEGISLATIVE
PRIORITIES: BUILDING CULTURE & COMMUNITY, ECONOMIC

VITALITY & INNOVATION, SOCIAL UNITY AND TRANSPORTATION &

INFRASTRUCTURE

TABLE OF CONTENTS

PALMDALE CITY COUNCIL ...................................................................................................... 1 INTRODUCTION ........................................................................................................................ 2 BUILDING CULTURE & COMMUNITY ...................................................................................... 3 ECONOMIC VITALITY & INNOVATION ..................................................................................... 5 SOCIAL UNITY ........................................................................................................................... 7 TRANSPORTATION & INFRASTRUCTURE ............................................................................. 9 PALMDALE FACTS .................................................................................................................. 11 LEGISLATIVE REPRESENTATIVES ................................................................................. 12-14 CITY MAPS ..................................................................................................................... ... 15-17

1 PALMDALE CITY COUNCIL

Richard Loa
Mayor Pro Tem
District 2
Laura Bettencourt
Councilmember
District 3
Eric Ohlsen
Councilmember
District 4
Andrea Alarcón
Councilmember
District 5
Austin Bishop
Mayor
District 1

2 INTRODUCTION

The Legislative Platform for the City of Palmdale was developed utilizing the City Council’s goals and priorities, which apply to legislative priorities at both State and Federal levels of government. These legislative priorities fall under the Council’s four strategic focus priority areas that the City will work to advance in 2024 and beyond: Building Culture & Community, Economic Vitality & Innovation, Social Unity and Transportation & Infrastructure.

The City strongly promotes local control of cities. It will support or oppose legislation based on whether it impacts local control over City revenues, land use, community development, and other municipal actions.

This document describes focus areas; however, due to the vigorous nature of the policy- making process, additional issues are likely to arise throughout the legislative session. The overarching principles in this Legislative Platform shall guide and direct staff as these different issues require action. Any policy issues not addressed in this platform will be communicated to the City Council for consideration before the City acts on that item.

3 BUILDING CULTURE & COMMUNITY
The City of Palmdale seeks resources and tools to promote the safety of our residents, uplift community pride through beautification progra ms and elevate the community’s preparedne ss and resiliency.

WE SUPPORT
Beautification, Public Appearance and Environmental Health  Support all legislation that furthers the expansion and development of tools and programs to deter crimes of vandalism, graffiti and illegal dumping, and investment in the aesthetics and physical environment of the City, including but not limited to Landscape Maintenance Districts (LMDs), trees, hardscapes and public art.

Public Safety
 Work with federal, state, c ounty, and regional agencies to further legislation intended to facilitate public safety; to support funding through grants and other opportunities to enhance community-oriented policing policies and programs in the City aimed at reducing crime and increasing social trust; and support the development of programs that enhance relationship-building between law enforcement and all segments of our community.

Emergency Preparedness
 Support federal and state legislation pr oviding funding through grants and other opportunities for emergency operations, hazard mitigation, and emergency response and recovery from natural and unnatural disasters.

Housing Improvement and Availability Program
 Support legislation that pr omotes, enhances, and funds the development of programs to encourage and assist in maintaining quality housing standards and availability to all.

Housing and Land Use Development
 Support legislation that allo ws the City to have local cont rol to address the community's broadest and least regulated economic, land use, environmental, and permitting needs while expanding opportunities to build affordable housing and transit-oriented developments.

4 WE OPPOSE
Efforts to reprioritize public safety funding and programs  Oppose efforts to reprogram public safety funding elsewhere without proper procedural or stakeholder engagement and measures that would decrease public safety services or increase crime.

Loss of local control
 Oppose state initiatives that would remove local control subsequently limiting diverse housing development in Palmdale and its spheres of influence and interfere with protecting residential neighborhoods.

Unrealistic Timeframes
 Oppose new legislation and mandates for unrea listic processing timeframes or conditions that impede housing for larger housing development projects.

Imposition of Regulatory or Statutory Requirements
 Oppose legislation that affects and impairs the administration of parks and recreation services and resources management, including the sale of parklands and open space and relaxations of park dedication fee requirements that provide no added protections or benefits to California’s recreational consumer.

 Oppose all measures that lim it, impair, or dilute the City’s ability to address housing standards and availability.

5 ECONOMIC VITALITY & INNOVATION
The City of Palmdale supports activities and opportunities that will help develop a skilled workforce and grow the local economy through innovative programs and incentives, including expanding the film and industrial/manufacturi ng industries in the local region.

WE SUPPORT
Local Jobs
 Legislation that assists and creates comprehensive economic development strategies to create local jobs, including, but not limited to, mortgage-paying jobs, by targeting growing industries, including film, healthcare, manufacturing, industrial and warehousing, transportation, and technology testing facilities.

Workforce Development
 Support legislation that supports funding and initiatives that encourage and support the growth of workforce development, skill development, and training opportunities in the City and region.

 Support legislation that expands workforce de velopment programs that encourage diversity in business industries serving Palmdale.

Small Business Development
 Seek and support legislation that promotes financial support through grants and other funding opportunities to support and educate small businesses.

Economic Development Investment Incentive Programs
 Advocate for legislation that expands re sources that modernizes existing economic development programs, including Enhanced Infrastructure Financing Districts (EIFD).

Film & Tourism
 Support and initiate legislation to enhance th e economy and create jobs in all creative industries, especially film and tourism opportunities.

Exploring New Industries
 Advocate for legislation that proposes and enhances programs and funding to create jobs and develop a workforce in high-tech innovation and green technology industries.

6 WE OPPOSE
By-right legislation
 Oppose legislation that lim its the City’s discretionary review processes for local development projects or economic development opportunities.

 Oppose legislation that interfer es, limits, or eliminates the decision-making authority of local municipalities regarding local land use or economic development opportunities.

 Oppose any legislation limit ing the expansion of current industries operating in the community.

Unfunded Mandates
 Oppose the imposition of unfunded or less-than-funded mandates on local governments, regardless of the form, source, or policy, including administrative, legislative, and interpretive sources, regardless of the governmental or other source.

7 SOCIAL UNITY
The City of Palmdale seeks funding an d supports opportuni ties to maximize sustainability initiatives t hat address connectivity, homelessness and mental health, public accessib ility, and environmental sustainability.

WE SUPPORT
Broadband
 Support legislation supporting funding to advance Broadband City-wide to all residents regardless of income status.

Environmental Sustainability
 Support legislation supporting funding for cl ean transportation, net zero energy use in future construction projects, and a localized organics treatment facility.

Housing
 Support legislation supporting increased funding through administrative and housing programs that create diverse housing options in Palmdale, including affordable, veterans, low-income, senior, and workforce housing.

SAVES Program
 Advocate for legislation funding resource s for the South Antelope Valley Emergency Services (SAVES) program.

Homelessness and Mental Health
 Support legislation enhancing regional and Cit y-driven solutions to address homelessness through crisis response, mental health evaluation and treatment, housing, homeless outreach teams, and state and regional funding for mental health crisis units.

 Support legislation providing for the expansion of laws, allowing for increased guardianship control and health supervision of those with mental illness and recognizing mental illness and addiction as a contributor to chronic homelessness.

Domestic Violence Programs
 Support legislation provid ing funding through grants and other opportunities to address domestic violence issues, including funding for the development of shelter and program services.

8 Illegal Drug Prevention and Treatment
 Support legislation funding progr ams targeting the education, prevention, and treatment of the use of illegal drugs and legal drug misuse.

Public Accessibility
 Support legislation funding through grants and other opportunities that enhance public facilities and programs, including recreational trails, parks, libraries, and museums, to make them accessible to all populations.

WE OPPOSE
Regional Housing Need Assessment (RHNA) Mandate
 Oppose legislation that proposes to change the Regional Housing Need Assessment (RHNA) from a planning process to a production requirement.

 Oppose legislation that penalizes a city or local government if identifiable RHNA units are not constructed or are delayed by actions of third parties.

9 TRANSPORTATION & INFRASTRUCTURE
Palmdale seeks funding and oppo rtunities to prom ote the transformation of transit, water, and technological adva ncements in our community.

WE SUPPORT
High Desert Corridor Alignment
 Support the implementation and construction of the High Desert Corridor Alignment project and support or initiate legislation to advance the same.

Palmdale Airport Development
 Vigorously support the mission of Air Force Plant 42 while concurrently working with local, state, and federal agencies to bring commercial passenger air service to the Palmdale Airport.

Recycled Water Infrastructure
 Support the development of re cycled water infrastructure throughout the City and initiate legislation to further the same.

Technology Infrastructure
 Support legislation and policies oriented to ward advancing and constructing technology infrastructure throughout the City, including broadband and wireless communications that support Smart Cities initiatives.

 Support or initiate legisl ation and policies furthering local oversight and control of technology placement and franchises.

Palmdale Boulevard
 Support legislation and adminis trative efforts that seek funding for the acquisition of Palmdale Boulevard from CalTrans.

Avenue M Grade Separation
 Support legislation and administrative effort s that seek funding for the Avenue M Grade Separation project.

10 Rancho Vista Grade Separation
 Support legislation and administr ative efforts that seek funding for the Rancho Vista Grade Separation project and advocate for partnership with the Federal Railroad Administration to implement the project.

Hydrogen Infrastructure
 Support infrastructure legisl ation and funding opportunities for investments in green energy projects, including hydrogen refueling infrastructure, to decrease the City’s carbon footprint while not being destructive to small businesses and the local economy.

Rail Infrastructure
 Support expansion and construction of high- speed rail infrastructure, including the California High-Speed Rail project and Brightline, and develop a strategy to prepare the local economy for project deployment.

WE OPPOSE
Regulation of Wireless Facilities
 Oppose any legislation or regul atory policy that limits local discretion to regulate wireless facilities, cellular communications towers, transmission sites, or other infrastructure.

 Oppose any legislation or admin istrative policy that opposes any City goal, initiative, or policy.

11 PALMDALE FACTS

Incorporated ...................................................................................................... August 24, 1962 Charter ........................................................................................................... November 3, 2009 Form of Government .......................................................................... City Council-City Manager County ..................................................................................................................... Los Angeles Population ........................................................................................................................ 165,917 Area .................................................................................................................. 104 Square Miles Weather ........................................................................................................ Average High 81°F Average Low 48°F
Elevation ......................................................................................................................... 2,657 ft.

DID YOU KNOW?
 Palmdale was voted one of California’s Safest Cities.

 Palmdale received the 2021 EDDY Award for being L.A. County’s most business-friendly City for the 2
nd time!

 “The Terminal” starring Tom Hanks and “Pirates of the Caribbean” starring Johnny Depp were filmed at Palmdale Plant 42.

 All five space shuttles were built in Palmdale.

12 FEDERAL LEGISLATIVE REPRESENTATIVES

UNITED STATES PRESIDENT & VICE PRESIDENT

Honorable Joseph R. Biden
Honorable Vice President Kamala Harris

Address: The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500
Comments: 202/456-1111
Fax: 202/456-2461

UNITED STATES SENATORS – CALIFORNIA

Honorable Laphonza Butler

DC Office Local Office
Address: 331 Hart Senate Office Bldg. 11111 Santa Monica Blvd.

Washington, DC 20510 Los Angeles, CA 90025
Phone: 202/224-3841 310/914-7300
Fax: 202/228-3954 310/914-7318

Honorable Alex Padilla
DC Office Local Office
Address: 912 Hart Senate Office Bldg. 225 E. Temple St., Suite 1860 Washington, DC 20510 Los Angeles, CA 90012
Phone: 202/224-3553 310/231-4494
Fax: 202/224-2200 202/224-0357

UNITED STATES CONGRESS – CALIFORNIA

Honorable Mike Garcia – 27
th District

DC Office Local Office
Address: 144 Cannon House Office Bldg. 1043 West Avenue M-4 Washington, DC 20515 Lancaster, CA 93551
Phone: 202/225-1956 661/839-0532

13 STATE LEGISLATIVE REPRESENTATIVES

GOVERNOR – STATE OF CALIFORNIA

Honorable Gavin Newsom Honorable Lt. Governor Eleni Kounalakis

Capitol Building Capitol Building

Address: 1303 10 th Street, Suite 1173 1303 10 th Street, Suite 1114 Sacramento, CA 95184 Sa cramento, CA 95814
Phone: 916/445-2841 916/445-8994
Fax: 916/558-3160

CALIFORNIA STATE SENATOR

Honorable Scott Wilk – 21st District

Capitol Office Antelope Valley Office
Address: 1021 O Street, Room 7140 848 W Lancaster Blvd.

Sacramento, CA 95814 Lancaster, CA 93534
Phone: 916/651-4021 661/729-6232
Fax: 916/651-4921 661/286-2543

CALIFORNIA STATE ASSEMBLY

Honorable Tom Lackey – 34th District

Capitol Office Antelope Valley Office
Address: P.O. Box 942849 41301 12
th St. West, Ste. F
Sacramento, CA 94249 Palmdale, CA 93551
Phone: 916/319-2034 661/267-7636

Honorable Juan Carrillo – 39th District

Capitol Office Antelope Valley Office
Address: P.O. Box 942849 823 East Ave. Q-9, Suite A
Sacramento, CA 94249 Palmdale, CA 93550
Phone: 916/319-2039 661/266-3908
Fax: 916/319-2139 661/266-3931

14 COUNTY REPRESENTATIVE
BOARD OF SUPERVISORS – LOS ANGELES COUNTY

Honorable Kathryn Barger – 5th District

Downtown Office Antelope Valley Office
Address: 500 W. Temple St., Room 869 42455 10
th St. West, Suite 104
Los Angeles, CA 90012 Lancaster, CA 93534
Phone: 213/974-5555 661/726-3600
Fax: 213/974-1010

15 MAP OF THE CITY OF PALMDALE

16 DISTRICT MAP

17 REGIONAL MAP

CC SA Minutes – February 7, 2024 – 5pm 1

MINUTES

CITY COUNCIL/SUCCESSOR AGENCY

CITY HALL COUNCIL CHAMBER
38300 SIERRA HIGHWAY, SUITE B

PALMDALE, CALIFORNIA
FEBRUARY 7, 2024

www.cityofpalmdale.org

1) CALL MEETING TO ORDER

Mayor Bishop called the meeting to order at 5:00 pm.

Note: All City Council memberships are reflected in their City Council titles.

2) ROLL CALL MAYOR BISHOP, MAYOR PRO TEM LOA, COUNCILMEMBERS OHLSEN, BETTENCOURT, ALARCÓN

PRESENT: Austin Bishop, Richard J. Loa, Eric Ohlsen, Laura Bettencourt, Andrea Alarcón.

ABSENT: None.

3) PLEDGE OF ALLEGIANCE AND MOMENT OF SILENCE

Mayor Pro Tem Loa led the pledge of allegiance.

4) PUBLIC COMMENTS

CONSENT CALENDAR(S), APPOINTMENT(S), NEW BUSINESS, AND CLOSED SESSION:

Mayor Bishop announced that a video would be shown displaying the cute critters available for adoption.

Eugene Hernandez asked for more information on Item 5.6 City's 2024 State and Federal Legislative Platform. Mayor Bishop and Councilmember Alarcon provided information on the item and directed Mr. Hernandez to the website to access the agenda links.

Mayor Bishop closed the Public Comments.

Councilmember Alarcon requested that item 5.7 be pulled and a continuation for item

5.6. There was Council consensus.

Mayor Bishop requested that item 5.3 be pulled.

5) CONSENT CALENDAR

5.1) Waive full reading of the Resolution(s) and/or Ordinance(s) to be considered and voted on at this meeting. (This allows for reading the title only in lieu of reciting the entire text).

CC SA Minutes – February 7, 2024 – 5pm 2

5.2) Receive and File the monthly and quarterly investment activity report for December 2023.

5.3) Approve Requisition No. 240740 with Warren -Anderson Ford, Inc. for the purchase of one Roadline Model GPMT Graffiti Removal Truck in an amount not to exceed $156,947.

Mayor Bishop commended staff for getting a deal on the third graffiti truck and spoke regarding fighting the ongoing graffiti problem.

Councilmember Bettencourt and Councilmember Ohlsen spoke in favor of this item.

Motion: Approve Requisition No. 240740 with Warren -Anderson Ford, Inc. for the purchase of one Roadline Model GPMT Graffiti Removal Truck.

Moved by Richard J. Loa, seconded by Laura Bettencourt.

Vote: Motion carried (5-0)
Yes: Austin Bishop, Richard J. Loa, Eric Ohlsen, Laura Bettencourt, Andrea Alarcón.

5.4) Notice of Completion - Accept public improvements for McDonald’s located at 1671 E. Palmdale Boulevard.

5.5) Approve agreement with Jones Lang Lasalle (JLL), Incorporated for a California Air Resources Board (CARB), Fleet Electrification and Microgrid Study in the amount of $150,000 for a term of six months from the date of the Notice to Proceed.

5.6) Approve the City’s 2024 State and Federal Legislative Platform to promote Palmdale’s priorities and legislative initiatives at the State and Federal levels.

There was Council discussion regarding continuing this item.

Motion: Move to continue the item to February 21, 2024.

Moved by Andrea Alarcón, seconded by Laura Bettencourt.

Vote: Motion carried (5-0)
Yes: Austin Bishop, Richard J. Loa, Eric Ohlsen, Laura Bettencourt, Andrea Alarcón.

5.7) Approve the minutes from the previous meetings.

CC - January 24, 2024

Councilmember Alarcon pulled this item and stated the minutes should reflect that she did not participate in Item 11.1 Closed Session. Upon entering the Closed Session Chambers, she was advised that the item to be discussed may include a discussion of a cross-claim that involves Shenkman & Hughes, which is a source of her income.

CC SA Minutes – February 7, 2024 – 5pm 3

Motion: Approve the minutes from the previous meeting with corrections.

Moved by Andrea Alarcón, seconded by Laura Bettencourt.

Vote: Motion carried (5-0)
Yes: Austin Bishop, Richard J. Loa, Eric Ohlsen, Laura Bettencourt, Andrea Alarcón.

Motion: Approve all items listed under the Consent Calendar except 5.3, 5.6 & 5.7 Moved by Laura Bettencourt, seconded by Richard J. Loa.

Vote: Motion carried (5-0)
Yes: Austin Bishop, Richard J. Loa, Eric Ohlsen, Laura Bettencourt, Andrea Alarcón.

6) PUBLIC HEARING

6.1) Adopt Resolution No. CC 2024 -017, a Resolution of the City Council of the City of Palmdale; Denying Appeal 24 -0002 and upholding Planning Commission Resolution No. PC -2024-001 to deny General Plan Amendment 23-0001, Zone Change 23-0002, and Specific Plan Amendment 22-001.

Mayor Bishop made the following statement:

"There are a lot of important issues involved in this application and there are several stakeholders who have real concerns in regard to this Specific Plan area.

The Specific Plan is a comprehensive and integrated document, it will best serve everyone’s interests to take a more critical look at the land use and economic benefit issues.

To responsibly accomplish our review, I move that we table this item to the next two council meetings and further that a sub -committee, comprised of myself and Councilmember Ohlsen, work with the interest of all stakeholders to ensure everyone benefits from our actions. The sub -committee will not want any separate meetings to occur without its participation to ensure the most efficient and comprehensive analysis of the issues."

Mayor Bishop called for a second to his motion.

Motion: Move to table item to the March 6, 2024 Council meeting.

Moved by Austin Bishop, seconded by Richard J. Loa.

Vote: Motion carried (5-0)
Yes: Austin Bishop, Richard J. Loa, Eric Ohlsen, Laura Bettencourt, Andrea Alarcón.

6.2) Introduce and adopt Ordinance No. 1638, an Ordinance of the City Council of the City of Palmdale, approving Comprehensive Development Plan 23-0003; a request to amend the existing language within the Antelope Valley Auto Center Specific Plan to be consistent with the Palmdale Municipal Code and find that the request is exempt from Environmental Review.

CC SA Minutes – February 7, 2024 – 5pm 4

Acting City Clerk Scott read the title of Ordinance No. 1638.

Associate Planner Almora provided a presentation on this item.

Motion: Introduce Ordinance No. 1638.

Moved by Laura Bettencourt, seconded by Richard J. Loa.

Vote: Motion carried (5-0)
Yes: Austin Bishop, Richard J. Loa, Eric Ohlsen, Laura Bettencourt, Andrea Alarcón.

Mayor Bishop opened the public hearing to receive testimony.

Public Testimony: None.

There was Council and staff discussion regarding the letters submitted for Item

6.1, and also how Item 6.1 might affect Item 6.2. City Attorney Curley responded.

Motion: Adopt Ordinance No. 1638, an Ordinance of the City Council of the City of Palmdale, approving Comprehensive Development Plan 23 -0003; a request to amend the existing language within the Antelope Valley Auto Center Specific Plan to be consistent with the Palmdale Municipal Code and find that the request is exempt from Environmental Review.

Moved by Richard J. Loa, seconded by Laura Bettencourt.

Vote: Motion carried (5-0)
Yes: Austin Bishop, Richard J. Loa, Eric Ohlsen, Laura Bettencourt, Andrea Alarcón.

6.3) Introduce and adopt Ordinance No. 1639, an Ordinance of the City Council of the City of Palmdale, recommending City Council approval of General Plan Amendment 23 -0006, Zoning Ordinance Amendment 23 -0004 and Zone Change 23-0005, a request to amend the Noise Element of the General Plan, the Development Standards for Mixed -Use Zones, Land Use Map and Zoning Map to address inconsistencies and finding that the project is consistent with Program Environmental Impact Report 22 -002 prepared and certified in conjunction with the City’s General Plan.

Acting City Clerk Scott read the title of Ordinance No. 1639.

Motion: Introduce Ordinance No. 1639.

Moved by Richard J. Loa, seconded by Laura Bettencourt.

Vote: Motion carried (5-0)
Yes: Austin Bishop, Richard J. Loa, Eric Ohlsen, Laura Bettencourt, Andrea Alarcón.

Planning Manager Magana provided a presentation on this item.

Mayor Bishop opened the Public Hearing and called for testimony.

CC SA Minutes – February 7, 2024 – 5pm 5

Public Testimony: None.

Mayor Bishop closed the Public Hearing.

Motion: Adopt Ordinance No. 1639, an Ordinance of the City Council of the City of Palmdale, recommending City Council approval of General Plan Amendment 23 -0006, Zoning Ordinance Amendment 23 -0004 and Zone Change 23-0005, a request to amend the Noise Element of the General Plan, the Development Standards for Mixed -Use Zones, Land Use Map and Zoning Map to address inconsistencies and finding that the project is consistent with Program Environmental Impact Report 22-002.

Moved by Andrea Alarcón, seconded by Laura Bettencourt.

Vote: Motion carried (5-0)
Yes: Austin Bishop, Richard J. Loa, Eric Ohlsen, Laura Bettencourt, Andrea Alarcón.

7) REPORTS AND ACTION ITEMS FROM MAYOR AND / OR COUNCILMEMBERS

7.1) Council Informational Reports on Committee memberships and meetings attended at public expense.

Council reports were submitted electronically.

Mayor Pro Tem Loa discussed the Justice Sunday event he attended at the Palmdale Playhouse.

Councilmember Ohlsen reported on the following: Justice Sunday event; Martin Luther King Jr. Day of Service desert clean up event and assembly of organic waste containers; met with Southern California Electric and he had an opportunity to highlight some future projects; and attended the groundbreaking for the Together California project.

Councilmember Alarcon discussed the Together California project.

Councilmember Bettencourt thanked Supervisor Barger for her participation in the Together California Project and stated it is a collaborative effort from a lot of different agencies.

Councilmember Ohlsen provided the website for individuals to learn more about the Together California Project. He also stated if individuals want to give to the project they can go to togethercalifornia.org.

Mayor Bishop discussed the Together California Project. Councilmember Alarcon discussed the Council reports.

7.2) Council Action Items.

None.

CC SA Minutes – February 7, 2024 – 5pm 6

8) CITY MANAGER’S REPORT

Assistant City Manager Mendez reported on the following: Sketchers grand opening February 9; Association of Sister Cities will host a fundraiser event at Firehouse Subs on February 9; Love Rocks at Marie Kerr Park on February 10th; Valentine's Day Dance at Marie Kerr Park on February 16; Journey Tribute Band at the Palmdale Playhouse on February 16; A Tail of True Love event for dogs at Yellen Park on February 17; and Pianist, Robin Spielberg, at the Palmdale Playhouse on February 29.

9) NON-AGENDA PUBLIC COMMENTS

The following individuals provided public input: David Harris discussed the Los Angeles County Mental Health symposium and the shelter at Marie Kerr Park; and Eugene Hernandez discussed the presentation made by City Attorney Curley regarding the code of conduct and meeting rules at the Measure AV Oversight Committee and the Human Rights Advisory Committee meetings.

Councilmember Ohlsen and Councilmember both agreed that the code of conduct and meeting rules should be shared with all boards/commissions/committees.

Councilmember Alarcon stated the code of conduct and rules of order were presented to all of the commissions and she agreed that all commissioners should be fully informed as to proper processes and the rules to be followed.

Mayor Bishop closed the public comments.

10) PRESENTATION BY CITY ATTORNEY

City Attorney Curley confirmed the Closed Session item would be heard as listed.

10.1) CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION Land Developers & Associates Corporation v. Successor Agency to the Community Redevelopment Agency of the City of Palmdale, et al.

Los Angeles County Superior Court
Case No. 22AVCV01093
The closed session is being held pursuant to the authority of California Government Code Section 54956.9(d)(1).

11) ANNOUNCEMENT BY CITY ATTORNEY

Closed Session was held from 5:45 pm - 6:35 pm.

City Attorney Curley announced the Council was updated, provided direction to staff that would be followed through promptly, and anticipated documents being exchanged on February 8, 2024, or the following day.

CC SA Minutes – February 7, 2024 – 5pm 7

12) ADJOURN

Mayor Bishop adjourned the meeting at 6:36 pm to February 21, 2024, at 5:00 p.m. in the City Hall Council Chamber located at 38300 Sierra Highway, Suite B, Palmdale, California.

PASSED, APPROVED, and ADOPTED this 21st day of February 2024.

Austin Bishop, Mayor

ATTEST:

Rochelle Scott, Acting City Clerk