Salinas City Council
October 18, 2022

RESOLUTION NO. _______(N.C.S.)

A RESOLUTION APPROVING AN AMENDED AND RESTATED PROFESSIONAL

SERVICES AGREEMENT BETWEEN THE CITY OF SALINAS AND WALLACE GROUP FOR THE SANITARY SEWER MASTER PLAN UPDATE, CIP NO. 9008 WHEREAS, the City of Salinas owns and operates a municipal sanitary sewer collection system for the residents and businesses within its service area and periodically conducts studies to plan for current and future sanitary sewage collection needs; and WHEREAS, on February 16, 2021, the City authorized an agreement with Wallace Group to perform the Sanitary Sewer Master Plan (SSMP) update (Resolution No. 22051); and WHEREAS, over the course of conducting the SSMP study, certain tasks have been required that were not in the original scope of work; and WHEREAS, the original agreement approved by Council has expired and requires revision to the terms to extend the completion date; and WHEREAS, an Amended and Restated Professional Services Agreement was drafted to reflect these changes;

NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF SALINAS, that Amended and Restated Professional Services Agreement between the City of Salinas and Wallace Group to provide professional services related to the Sanitary Sewer Master Plan update (Project No. 9008) in the amount of $633,249 is hereby approved; and BE IT FURTHER RESOLVED that the City Council approves a transfer of $45,000 from CIP 9032 account 5800.50.9302-66.4000 (Improvements) to CIP 9008 5800.50.9008-

63.5400 (Engineering Services); and
BE IT FURTHER RESOLVED that the City Council authorizes an increase of the CIP 9008, Sanitary Sewer Master Plan appropriation in the same amount of $45,000; and BE IT FURTHER RESOLVED that the Mayor of Salinas is hereby authorized and directed, for and on behalf of the City of Salinas, and as its act and deed, to execute the attached Amended and Restated Professional Services Agreement is authorized to execute extensions and/or non-substantive modifications to the Agreement, as necessary.

PASSED AND APPROVED this 18th day of October 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED:
_______________________________
Kimbley Craig, Mayor
ATTEST:
_________________________
Patricia M. Barajas, City Clerk

AMENDED AND RESTATED

AGREEMENT

FOR PROFESSIONAL SERVICES FOR

ENVIRONMENTAL CONSULTANTS/

CONTRACTORS BETWEEN

THE CITY OF SALINAS AND THE CITY

OF SALINAS AND WALLACE GROUP
Contents
RECITALS ................................................................................................................................. 1 TERMS ....................................................................................................................................... 1

1. Scope of Service. ................................................................................................................. 1

2. Term; Completion Schedule. ............................................................................................... 1

3. Compensation ...................................................................................................................... 1

4. Billing .................................................................................................................................. 1

5. Meet and Confer. ................................................................................................................. 2

6. Additional Copies. ............................................................................................................... 2

7. Responsibility of Consultant. ............................................................................................... 2

8. Responsibility of City. ......................................................................................................... 2

9. Acceptance of Work Not a Release. .................................................................................... 3

10. Indemnification and Hold Harmless. ................................................................................... 3

11. Insurance. ............................................................................................................................. 3

12. Access to Records. ............................................................................................................... 3

13. Assignment. ......................................................................................................................... 3

14. Changes to Scope of Work. ................................................................................................. 4

15. Ownership of Documents. ................................................................................................... 4

16. Termination. ......................................................................................................................... 4

17. Compliance with Laws, Rules, and Regulations. ................................................................ 5

18. Exhibits Incorporated. .......................................................................................................... 5

19. Independent Contractor. ....................................................................................................... 5

20. Integration and Agreement. ................................................................................................. 5

21. Jurisdiction. .......................................................................................................................... 5

22. Severability. ......................................................................................................................... 6

23. Notices. ................................................................................................................................ 6

24. Nondiscrimination................................................................................................................ 6

25. Conflict of Interest. .............................................................................................................. 7

26. Headings. ............................................................................................................................. 7

27. Attorneys’ Fees .................................................................................................................... 7

28. Non-Exclusive Agreement. .................................................................................................. 7

29. Rights and Obligations Under Agreement. .......................................................................... 7

30. Licenses................................................................................................................................ 7

31. Counterparts. ........................................................................................................................ 7

32. Legal Representation. .......................................................................................................... 7

33. Joint Representation. ............................................................................................................ 8

34. Warranty of Authority.......................................................................................................... 8

35. No Waiver of Rights. ........................................................................................................... 8 Exhibit A- Insurance Requirements for Environmental Contractors and/or Consultants .......... 9 Exhibit B- Scope of Service ..................................................................................................... 12 Enviro. Prof. Services Agreement v. January 2021 Page 1 of 13 Wallace Group SSMP Amendment, October 2022

AMENDED AND RESTATED AGREEMENT FOR PROFESSIONAL SERVICES FOR

ENVIRONMENTAL CONSULTANTS/CONTRACTORS BETWEEN

THE CITY OF SALINAS AND WALLACE GROUP
This Agreement for Professional Services (the “Agreement” and/or “Contract”) is made and entered into this 18th day of October 2022, between the City of Salinas, a California Charter city and municipal corporation (hereinafter “City”), and Wallace Group, a California Corporation, (hereinafter “Consultant”).

RECITALS
WHEREAS, Consultant represents that he, she or it is professionally trained, experienced, and competent to perform the special services which will be required by this Agreement and services provided by Consultant under this Agreement will be performed in a manner consistent with that degree of care and skill ordinarily exercised by members of the same professional currently practicing under similar circumstances in the same or similar locality; and WHEREAS, Consultant is willing to render such professional services, as hereinafter defined, on the following terms and conditions.

NOW, THEREFORE, City and Consultant agree as follows:

TERMS

1. Scope of Service. The project contemplated and the scope of Consultant’s services are described in Exhibit B, attached hereto and incorporated herein by reference.

2. Term; Completion Schedule. This Agreement shall be deemed to have commenced on July 1, 2022, and shall terminate on June 30, 2023, unless extended in writing by either party upon (30) days written notice. This Agreement may be extended only upon mutual written consent of the parties, and may be terminated only pursuant to the terms of this Agreement.

3. Compensation. City hereby agrees to pay Consultant for services rendered the City pursuant to this Agreement on a time and materials basis according to the rates of compensation set forth in Exhibit B and B1. The total amount of compensation to be paid under this Agreement shall not exceed Six hundred thirty-three thousand two hundred forty-nine dollars ($633,249) .

4. Billing. Consultant shall submit to City an itemized invoice, prepared in a form satisfactory to City, describing its services and costs for the period covered by the invoice.

Except as specifically authorized by City, Consultant shall not bill City for duplicate services performed by more than one person. Consultant’s bills shall include the following information to which such services cost or pertain:

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(A)A brief description of services performed;
(B) The date the services were performed;
(C)The number of hours spent and by whom;
(D)A brief description of any costs incurred; and
(E) The Consultant’s signature.

Any such invoices shall be in full accord with any and all applicable provisions of this Agreement.

City shall make payment on each such invoice within thirty (30) days of receipt; provided, however, that if Consultant submits an invoice which is incorrect, incomplete, or not in accord with the provisions of this Agreement, City shall not be obligated to process any payment to Consultant until thirty (30) days after a correct and complying invoice has been submitted by Consultant. The City shall process undisputed portion immediately.

5. Meet and Confer. Consultant agrees to meet and confer with City or its agents or employees with regard to services as set forth herein as may be required by the City to ensure timely and adequate performance of the Agreement.

6. Additional Copies. If City requires additional copies of reports, or any other material which Consultant is required to furnish as part of the services under this Agreement, Consultant shall provide such additional copies as are requested, and City shall compensate Consultant for the actual costs related to the production of such copies by Consultant.

7. Responsibility of Consultant. By executing this Agreement, Consultant agrees that the services to be provided and work to be performed under this Agreement shall be performed in a fully competent manner. By executing this Agreement, Consultant further agrees and represents to City that the Consultant possesses, or shall arrange to secure from others, all of the necessary professional capabilities, experience, resources, and facilities necessary to provide the City the services contemplated under this Agreement and that City relies upon the professional skills of Consultant to do and perform Consultant’s work. Consultant further agrees and represents that Consultant shall follow the current, generally accepted practices in this area to the profession to make findings, render opinions, prepare factual presentations, and provide professional advice and recommendations regarding the projects for which the services are rendered under this Agreement.

8. Responsibility of City. To the extent appropriate to the projects to be completed by Consultant pursuant to this Agreement, City shall:
(A) Assist Consultant by placing at its disposal all available information pertinent to the projects, including but not limited to, previous reports and any other data relative to the projects. Nothing contained herein shall obligate City to incur any expense in connection with completion of studies or acquisition of information not otherwise in the possession of City. (B) Examine all studies, reports, sketches, drawings, specifications, proposals, and other documents presented by Consultant, and render verbally or in writing as may be

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appropriate, decisions pertaining thereto within a reasonable time so as not to delay the services of Consultant.
(C) Steve Carrigan, City Manager, or his designee, shall act as City’s representative with respect to the work to be performed under this Agreement. Such person shall have the complete authority to transmit instructions, receive information, interpret and define City’s policies and decisions with respect to materials, equipment, elements, and systems pertinent to Consultant’s services. City may unilaterally change its representative upon notice to the Consultant.
(D) Give prompt written notice to Consultant whenever City observes or otherwise becomes aware of any defect in a project.

9. Acceptance of Work Not a Release. Acceptance by the City of the work to be performed under this Agreement does not operate as a release of Consultant from professional responsibility for the work performed.

10. Indemnification and Hold Harmless.

Consultant shall defend, indemnify, and hold harmless the City and its officers, officials, employees, volunteers, and agents from and against any and all liability, loss, damage, expense, costs (including without limitation costs and fees of litigation) of every nature arising out of or in connection with Consultant’s performance of work hereunder, including the performance of work of any of Consultant’s subcontractors or agents, or Consultant’s failure to comply with any of its obligations contained in the agreement, except such loss or damage which was caused by the sole negligence or willful misconduct of the City.

11. Insurance.

Consultant shall procure and maintain for the duration of this Agreement insurance meeting the requirements specified in Exhibit A hereto.

12. Access to Records. Consultant shall maintain all preparatory books, records, documents, accounting ledgers, and similar materials including but not limited to calculation and survey notes relating to work performed for the City under this Agreement on file for at least three (3) years following the date of final payment to Consultant by City. Any duly authorized representative(s) of City shall have access to such records for the purpose of inspection, audit, and copying at reasonable times during Consultant’s usual and customary business hours.

Consultant shall provide proper facilities to City’s representative(s) for such access and inspection.

13. Assignment. It is recognized by the parties hereto that a substantial inducement to City for entering into this Agreement was, and is, the professional reputation and competence of Consultant. This Agreement is personal to Consultant and shall not be assigned by it without express written approval of the City.

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14. Changes to Scope of Work. City may at any time, and upon a minimum of ten (10) days written notice, seek to modify the scope of services to be provided for any project to be completed under this Agreement. Consultant shall, upon receipt of said notice, determine the impact on both time and compensation of such change in scope and notify City in writing. Rate of compensation shall be based upon the Consultant’s rates shown in Exhibit B of this Agreement. Upon agreement between City and Consultant as to the extent of said impacts to time and compensation, an amendment to this Agreement shall be prepared describing such changes. Execution of the amendment by City and Consultant shall constitute the Consultant’s notice to proceed with the changed scope.

15. Ownership of Documents. Title to all final documents, including drawings, specifications, data, reports, summaries, correspondence, photographs, computer software (if purchased on the City’s behalf), video and audio tapes, software output, and any other materials with respect to work performed under this Agreement shall vest with City at such time as City has compensated Consultant, as provided herein, for the services rendered by Consultant in connection with which they were prepared. City agrees to hold harmless and indemnify the Consultant against all damages, claims, lawsuits, and losses of any kind including defense costs arising out of any use of said documents, drawings, and/or specifications on any other project without written authorization of the Consultant.

16. Termination.
(A) City shall have the authority to terminate this Agreement, upon written notice to Consultant, as follows:
(1) If in the City’s opinion the conduct of the Consultant is such that the interest of the City may be impaired or prejudiced, or
(2) For any reason whatsoever.
(B) Upon termination, Consultant shall be entitled to payment of such amount as fairly compensates Consultant for all work satisfactorily performed up to the date of termination based upon the Consultant’s rates shown in Exhibit B and/or Section 3 of this Agreement, except that:
(1) In the event of termination by the City for Consultant’s default, City shall deduct from the amount due Consultant the total amount of additional expenses incurred by City as a result of such default. Such deduction from amounts due Consultant are made to compensate City for its actual additional costs incurred in securing satisfactory performance of the terms of this Agreement, including but not limited to, costs of engaging another consultant(s) for such purposes. In the event that such additional expenses shall exceed amounts otherwise due and payable to Consultant hereunder, Consultant shall pay City the full amount of such expense. (C) In the event that this Agreement is terminated by City for any reason, Consultant shall:

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(1) Upon receipt of written notice of such termination promptly cease all services on this project, unless otherwise directed by City; and (2) Deliver to City all documents, data, reports, summaries, correspondence, photographs, computer software output, video and audio tapes, and any other materials provided to Consultant or prepared by or for Consultant or the City in connection with this Agreement. Such material is to be delivered to City in completed form; however, notwithstanding the provisions of Section 15 herein, City may condition payment for services rendered to the date of termination upon Consultant’s delivery to the City of such material. The Consultant may retain an archival copy of the confidential information, to the extent necessary to comply with Law or archival policies. (D) In the event that this Agreement is terminated by City for any reason, City is hereby expressly permitted to assume the projects and complete them by any means, including but not limited to, an agreement with another party.
(E) The rights and remedy of the City and Consultant provided under this Section are not exclusive and are in addition to any other rights and remedies provided by law or appearing in any other section of this Agreement.

17. Compliance with Laws, Rules, and Regulations. Services performed by Consultant pursuant to this Agreement shall be performed in accordance and full compliance with all applicable federal, state, and City laws and any rules or regulations promulgated thereunder.

18. Exhibits Incorporated. All exhibits referred to in this Agreement and attached to it are hereby incorporated in it by this reference. In the event there is a conflict between any of the terms of this Agreement and any of the terms of any exhibit to the Agreement, the terms of the Agreement shall control the respective duties and liabilities of the parties.

19. Independent Contractor. It is expressly understood and agreed by both parties that Consultant, while engaged in carrying out and complying with any of the terms and conditions of this Agreement, is an independent contractor and not an employee of the City. Consultant expressly warrants not to represent, at any time or in any manner, that Consultant is an employee or servant of the City.

20. Integration and Agreement. This Agreement represents the entire understanding of City and Consultant as to those matters contained herein. No prior oral or written understanding shall be of any force or effect with respect to those matters contained herein. This Agreement may not be modified or altered except by amendment in writing signed by both parties.

21. Jurisdiction. This Agreement shall be administered and interpreted under the laws of the State of California. Jurisdiction of litigation arising from this Agreement shall be in the State of California, in the County of Monterey or in the appropriate federal court with jurisdiction over the matter.

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22. Severability. If any part of this Agreement is found to be in conflict with applicable laws, such part shall be inoperative, null and void insofar as it is in conflict with said laws, but the remainder of the Agreement shall continue to be in full force and effect.

23. Notices.
(A) Written notices to the City hereunder shall, until further notice by City, be addressed to:

City Manager
City of Salinas
200 Lincoln Avenue
Salinas, California 93901
With a copy to:

City Attorney
City of Salinas
200 Lincoln Avenue
Salinas, California 93901
(B) Written notices to the Consultant shall, until further notice by the Consultant, be addressed to:

Kari Wagner, PE
Principal
612 Clarion Court
San Luis Obispo, CA 93401
(C) The execution of any such notices by the City Manager shall be effective as to Consultant as if it were by resolution or order of the City Council, and Consultant shall not question the authority of the City Manager to execute any such notice. (D) All such notices shall either be delivered personally to the other party’s designee named above, or shall be deposited in the United States Mail, properly addressed as aforesaid, postage fully prepaid, and shall be effective the day following such deposit in the mail.

24. Nondiscrimination. During the performance of this Agreement, Consultant shall not discriminate against any employee or applicant for employment because of race, color, religion, ancestry, creed, sex, national origin, familial status, sexual orientation, age (over 40 years) or disability. Consultant shall take affirmative action to ensure that applicants are employed, and that employees are treated during employment without regard to their race, color, religion, ancestry, creed, sex, national origin, familial status, sexual orientation, age (over 40 years) or disability.

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25. Conflict of Interest. Consultant warrants and declares that it presently has no interest, and shall not acquire any interest, direct or indirect, financial or otherwise, in any manner or degree which will render the services required under the provisions of this Agreement a violation of any applicable local, state or federal law. Consultant further declares that, in the performance of this Agreement, no subcontractor or person having such an interest shall be employed. In the event that any conflict of interest should nevertheless hereinafter arise, Consultant shall promptly notify City of the existence of such conflict of interest so that City may determine whether to terminate this Agreement. Consultant further warrants its compliance with the Political Reform Act (Government Code section 81000 et seq.) and Salinas City Code Chapter 2A that apply to Consultant as the result of Consultant’s performance of the work or services pursuant to the terms of this Agreement.

26. Headings. The section headings appearing herein shall not be deemed to govern, limit, modify, or in any manner affect the scope, meaning or intent of the provisions of this Agreement.

27. Attorneys’ Fees. In case suit shall be brought to interpret or to enforce this Agreement, or because of the breach of any other covenant or provision herein contained, the prevailing party in such action shall be entitled to recover their reasonable attorneys’ fees in addition to such costs as may be allowed by the Court. City’s attorneys’ fees, if awarded, shall be calculated at the market rate.

28. Non-Exclusive Agreement. This Agreement is non-exclusive and both City and Consultant expressly reserves the right to contract with other entities for the same or similar services.

29. Rights and Obligations Under Agreement. By entering into this Agreement, the parties do not intend to create any obligations express or implied other than those set out herein; further, this Agreement shall not create any rights in any party not a signatory hereto.

30. Licenses. If a license of any kind, which term is intended to include evidence of registration, is required of Consultant, its representatives, agents or subcontractors by federal, state or local law, Consultant warrants that such license has been obtained, is valid and in good standing, and that any applicable bond posted in accordance with applicable laws and regulations.

31. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute a single agreement.

32. Legal Representation. Each party affirms that it has been represented by legal counsel of its own choosing regarding the preparation and the negotiation of this Agreement and the matters and claims set forth herein, and that each of them has read this Agreement and is fully aware of its contents and its legal effect. Neither party is relying on any statement of the other party outside the terms set forth in this Agreement as an inducement to enter into this Agreement.

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33. Joint Representation. The language of all parts of this Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against any party. No presumptions or rules of interpretation based upon the identity of the party preparing or drafting the Agreement, or any part thereof, shall be applicable or invoked.

34. Warranty of Authority. Each party represents and warrants that it has the right, power, and authority to enter into this Agreement. Each party further represents and warrants that it has given any and all notices, and obtained any and all consents, powers, and authorities, necessary to permit it, and the persons entering into this Agreement for it, to enter into this Agreement.

35. No Waiver of Rights. Waiver of a breach or default under this Agreement shall not constitute a continuing waiver or a waiver of a subsequent breach of the same or any other provision of this Agreement. The failure to provide notice of any breach of this Agreement or failure to comply with any of the terms of this Agreement shall not constitute a waiver thereof.

Failure on the part of either party to enforce any provision of this Agreement shall not be construed as a waiver of the right to compel enforcement of such provision or any other provision. A waiver by the City of any one or more of the conditions of performance under this Agreement shall not be construed as waiver(s) of any other condition of performance under this Agreement.

IN WITNESS WHEREOF, the parties hereto have made and executed this Agreement on the date first written above.

CITY OF SALINAS
__________________________________
Steve Carrigan
City Manager
APPROVED AS TO FORM:
_________________________________
□ Christopher A. Callihan, City Attorney or
□ Rhonda Combs, Assistant City Attorney

CONSULTANT
___________________________________
By:Kari Wagner
Its: Principal

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Exhibit A- Insurance Requirements for Environmental Contractors and/or Consultants Consultant shall procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damage to property which may arise from or in connection with the performance of the work hereunder and the results of that work by the Consultant, his agents, representatives, employees, or subcontractors. With respect to General Liability and Errors & Omissions, coverage should be maintained for a minimum of five (5) years after Contract completion.

MINIMUM SCOPE AND LIMIT OF INSURANCE
Coverage shall be at least as broad as:

1. Commercial General Liability (“CGL”): Insurance Services Office (“ISO”) Form CG 00 01 covering CGL on an “occurrence” basis, including products and completed operations, property damage, bodily injury and personal & advertising injury with limits no less than $1,000,000 per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location (ISO CG 25 03 or 25 04) or the general aggregate limit shall be twice the required occurrence limit.

2. Automobile Liability: ISO Form CA 0001 covering any auto (Code 1), or if Consultant has no owned autos, hired (Code 8) and non-owned (Code 9) autos, with limits no less than $1,000,000 per accident for bodily injury and property damage.

3. Workers’ Compensation: Insurance as required by the State of California, with Statutory Limits, and Employer’s Liability Insurance with limits of no less than $1,000,000 per accident for bodily injury or disease.

4. Contractor’s Pollution Liability (“PLL”) and/or Asbestos Pollution Liability and/or Errors & Omissions: Insurance applicable to the work being performed, with a limit no less than $1,000,000 per claim or occurrence and $2,000,000 aggregate per policy period of one year.

If the Consultant maintains broader coverage and/or higher limits than the minimums shown above, the City of Salinas requires and shall be entitled to the broader coverage and/or higher limits maintained by the Consultant. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City.

Self-Insured Retentions
Self-insured retentions must be declared to and approved by the City. At the option of the City, the Consultant shall provide coverage to reduce or eliminate such self-insured retentions as respects the City, its officers, officials, employees, and volunteers; or the Consultant shall provide evidence satisfactory to the City guaranteeing payment of losses and related investigations, claim administration, and defense expenses. The policy language shall provide, or be endorsed to provide, that the self-insured retention may be satisfied by either the named insured or City.

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Other Insurance Provisions
A. The General Liability, Automobile Liability, Contractors Pollution Liability, and/or Asbestos Pollution policies are to contain, or be endorsed to contain, the following provisions:

1. The City of Salinas, its officers, officials, employees, and volunteers are to be covered as additional insureds with respect to liability arising out of work or operations performed by or on behalf of the Consultant including materials, parts or equipment furnished in connection with such work or operations. General liability coverage can be provided in the form of an endorsement to the Consultant’s insurance (at least as broad as ISO Forms CG 20 10, CG 11 85 or both CG 20 10, CG 20 26, CG 20 33, or CG 20 38; and CG 20 37 forms if later revisions used).

2. For any claims related to this project, the Consultant’s insurance coverage shall be primary insurance coverage at least as broad as ISO CG 20 01 04 13 as respects the City of Salinas, its officers, officials, employees, agents, and volunteers. Any insurance or selfinsurance maintained by the City, its officers, officials, employees, agents, or volunteers shall be excess of the Consultant’s insurance and shall not contribute with it.

3. Each insurance policy required above shall provide that coverage shall not be canceled, except with notice to the City.

B. If General Liability, Contractors Pollution Liability and/or Asbestos Pollution Liability and/or Errors & Omissions coverages are written on a claims-made form:

1. The retroactive date must be shown, and must be before the date of the contract or the beginning of Agreement of work.

2. Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of the Agreement of work.

3. If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a retroactive date prior to the contract effective date, the Consultant must purchase an extended period coverage for a minimum of five (5) years after completion of Agreement work.

4. A copy of the claims reporting requirements must be submitted to the City for review.

5. If the services involve lead-based paint or asbestos identification / remediation, the Contractor’s PLL policy shall not contain lead-based paint or asbestos exclusions. If the services involve mold identification / remediation, the Contractor’s PLL shall not contain a mold exclusion and the definition of “Pollution” shall include microbial matter including mold.

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Acceptability of Insurers
Insurance is to be placed with insurers with a current A.M. Best rating of no less than A:VII if admitted in the State of California. If Contractor’s Pollution Liability, Asbestos Pollution and/or Errors & Omissions coverages are not available from an admitted insurer, the coverage may be written by a non-admitted insurance company. A non-admitted company should have an A.M.

Best rating of A:X or higher. Exception may be made for the California State Compensation Insurance Fund if not rated.

Verification of Coverage
Consultant shall furnish the City with original certificates of insurance and amendatory endorsements, or copies of the applicable insurance policy language effecting coverage required by this contract and a copy of the Declarations and Endorsements page of the policy listing all policy endorsements. All certificates and endorsements are to be received and approved by the City before work commences. However, failure to obtain the required documents prior to the work beginning shall not waive the Consultant’s obligation to provide them. The City reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time.

Waiver of Subrogation
Consultant hereby grants to City a waiver of subrogation which any insurer may acquire against City, its officers, officials, employees, and volunteers, from Consultant by virtue of the payment of any loss. Consultant agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation but this provision applies regardless of whether or not the City has received a waiver of subrogation endorsement from the insurer.

The Workers’ Compensation policy shall be endorsed with a waiver of subrogation in favor of the City of Salinas for all work performed by the Consultant, its employees, agents, and subcontractors.

Subcontractors
Consultant shall require and verify that all subcontractors maintain insurance meeting all the requirements stated herein, and Consultant shall ensure that City of Salinas is an additional insured on insurance required from subcontractors. For CGL coverage subcontractors shall provide coverage with a form at least as broad as ISO CG 20 38 04 13.

Special Risks or Circumstances
City reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances.

Maintenance of Insurance
Maintenance of insurance by Consultant as specified shall in no way be interpreted as relieving Consultant of its indemnification obligations or any responsibility whatsoever and the Consultant may carry, at its own expense, such additional insurance as it deems necessary.

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Exhibits B and B1
[Scope of Service; Compensation]
Wallace Group 1
Exhibit B
SCOPE OF SERVICES
Wallace Group proposes the following scope of services, based on the City’s Request for Proposals (RFP) for the Sanitary Sewer Master Plan update and outline scope requested.  We look forward to discussing the scope of work with the City.

Task 0: Project Management and Meetings
Task 0.1: Project Management and Coordination
This Task includes day‐to‐day coordination of project activities, including scheduling and budget controls, staffing needs and coordination, Client coordination, monthly status updates, and other related project management activities.  This Project Management Budget is based on an overall implementation schedule of 12 months.

Task 0.2: Kick‐off Meeting and Field Review of Facilities We will coordinate and attend a kick‐off meeting with key Team members and City staff. This is a very key meeting, and as such, even with the COVID‐19 Pandemic, this is planned to be an in‐person meeting.  On or before the meeting, we will provide the City with a list of information needs.  We will prepare the meeting agenda and minutes for this meeting. This meeting will focus on scope of work, schedule, deliverables, and other components of the project so that the project direction is agreed upon by the Team members in advance. We will request that any items that may be of importance for the completion of the report be provided to us at the time of the kick‐off meeting. Following the kick‐off meeting we will tour the City’s collection system facilities, including lift stations to gain a better understanding of the operations and constraints.  This is also a great opportunity to talk with the collection system operators to better understand their concerns about how the collection system functions and identify known problem areas.

Task 0.3: Review and Progress Meetings
To ensure coordination with the City throughout the project duration, we will attend monthly meetings (via Zoom). The budget is based on a total of 12 meetings through the duration of the proposed schedule.

Meetings may be adjusted as to frequency based on need and will be coordinated with the City as the Project progresses.  We will prepare the meeting agenda and minutes for these meeting. For efficiency, we will schedule milestone meetings to coincide with the monthly meetings. We recommend the milestone meetings be in person to discuss the City’s comments on the deliverables.  We will also be available for additional meetings at the request of the City on a time and materials basis.

Task 0.4: City Council Meetings
We will attend two City Council meetings to review the Sanitary Sewer Master Plan Update, one meeting to present the draft Master Plan Update, and the second meeting to present the final Master Plan Update and to answer any final questions Council may have.  We will prepare a Power Point presentation for both City Council meetings.

Task 0.5: QA/QC
Wallace Group and respective subconsultant team members will provide in‐house quality assurance and quality control (QA/QC) at the various milestone stages. The QA/QC will be conducted by senior or principal engineers within the respective firms.

Wallace Group 2
Task 0.0 Deliverables:
 Email documentation of meetings, information needs/request, and pertinent project coordination correspondence including monthly status updates (PDF only).  Council Power Point Presentations
Task 1:  Document Review and Data Collection
Task 1.1: Document Review and Data Collection
We will review the existing 2011 Sanitary Sewer System Master Plan, and details of the existing sanitary sewer system:

1. Review scope of services with City staff and review relevant documents, including but not limited to:
• Sanitary Sewer Management Plan (SSMP)
• Sewer Rate Study
• Salinas General Plan
• Economic Development Element

2. Review City’s sanitary sewer records to identify recent improvements constructed.

3. Coordinate with the City to obtain future development plans.

4. Review the City’s closed‐circuit television (CCTV) inspection videos, maintenance records, and meet with City staff to identify areas of concern regarding sewer mains (both gravity and force) and pump stations. The proposed budget for CCTV review is based on an assumed one hundred thousand miles (100,000 LF) of CCTV video to be reviewed, with an associated review cost of $0.50/LF (or $2,640 per mile).  The review of CCTV video includes documenting observations and problem areas, which will be summarized in the Sewer Master Plan Update, and conditions of problem areas will be documented per NASSCO designations, and included in the CIP ranking matrix for development of CIP recommendations.  This unit cost can be used to adjust the task budget based on actual CCTV footage to be reviewed.

5. Meet with City staff to review development plans and all relevant documents.

6. Collect and review asset management including:
• Force Mains in the Sanitary Sewer Collection System
• Lift Stations within the Sanitary Sewer Collection System • Identify gaps in data, including pipe diameter, location, flow direction, material, sewer MH invert, etc.
• Recommend a strategy to obtain missing data
• Work with GIS personnel to determine optimal method(s) to add any missing asset subcategories
Task 1 Deliverables:
 Description and general inventory of the sanitary sewer system based on review of plans, reports, studies, and field inspections (PDF only)
 Technical Memorandum summarizing sewer video review, based on NASSCO designations (PDF only)
 Technical Memorandum including GIS Data Gap analysis for the Sanitary Sewer Collection System (PDF).

Task 2: Field Effort and GIS Update
Task 2.1 Survey Sanitary Sewer Manholes
Wallace Group will survey the rim elevations of each sewer manhole to be modeled (based on 750 manholes) and dip the manhole to obtain the invert elevation (invert in and invert out) of the flow lines. Wallace Group Wallace Group 3
will also take pictures of each of the manholes, which would then be included in the GIS database (see Task 2).

Based on photos and visual observation from ground surface, we will ascertain pipe material.  It is requested that the City assist Wallace Group with locating the manholes and providing traffic control as needed in high traffic areas. This assistance greatly increases the efficiency of the survey work. Wallace Group can provide outside assistance for traffic control for an additional cost, not currently included in the cost proposal.

Optional Task 2.1A: Wallace Group will locate the remaining 2,575 sewer manholes throughout the City’s collection system and provide rim elevations using a handheld GPS unit.  This information can then be incorporated in the GIS database (see Task 2).  This effort will not provide invert elevations, pipe diameters, pipe material, or manhole condition information. Costs for this effort are not currently included in the fee estimate.

Task 2.2 Lift Station Assessment
Wallace Group, in conjunction with Fluid Resource Management (FRM), will conduct evaluations of the City’s eleven lift stations. FRM will coordinate with the City operations staff. FRM will provide a Cal‐OSHA confined space entry permit and perform such confined space entry to evaluate the wet well for visible signs of corrosion and “wear and tear”, and will make recommendations if a structural investigation of the wet well is warranted based on observation. We will evaluate the condition of piping and internal components, document the size of the wet well/pumping station, approximate depth and size of inverts, perform a pump draw down test and determine approximate flow from each pump, perform full load amperage and Meg‐ohm readings on each motor, verify automation of controls, evaluate the electrical system for possible deficiencies/code violations, document the pumps and motors make/model number, pull and inspect the pumps for signs of wear and tear including inspecting pump seals and fittings,  electrical components for code violations, evaluate the pump seals, fittings, and overall condition, and perform a pump test to determine approximate flow, and measure amperage/power draws to check for signs of pump motor concerns. We will evaluate the system’s ability to meet existing and future demands based on the pumping capacity and will provide the City with lift station upgrade recommendations. It is expected that the review of the 11 lift stations will be conducted over a period of 4 consecutive days.  We will request that the City provide operations staff intimately familiar with the details and history of the lift stations, and to operate equipment during the inspection/testing. We assume that access to each lift station will not require traffic control services.   We will review the assessment information from FRM and provide recommendations for upgrades to the lift stations. We will summarize the findings of the lift station assessment in the Preliminary Findings Memorandum.

Task 2.3: In‐Line Flow Monitoring
Wallace Group will develop a flow monitoring program (FMP) in support of calibrating the hydraulic model of the sanitary sewer system. The flow monitoring plan will consider the areas to be monitored, including consideration of monitoring some or all the seven flow‐splits/diversions.  The flow data will evaluate average flow rates and representative diurnal flow patterns throughout the City including in/out of all pump stations, and to assist in the review/identification of average flow rates for residential (single and multi‐family), commercial, hotel/motel, and apartment land uses.  We will draft the flow monitoring plan, with meter locations and methodology to be reviewed and approved by the City.

As part of the FMP, we will work with US3 to review site conditions of the potential monitoring sites, assuring they are hydraulically suitable for accurate flow monitoring measurements. We will also query the City to determine if the City has specific sewer reaches they desire to be monitored, for instance an area suspected to have flow capacity concerns or may otherwise be a “HMA” of concern, or a specific sewer reach that would be indicative of SFR, MFR, hotel, commercial flows.  Findings of the site review will be considered and included in this FMP for review and approval by the City.  The site documentation shall include, at a minimum, a location map with address, digital photographs of the site, pipe size, channel condition, flow characteristics, site Wallace Group 4
drawings, and pictures of surrounding area. The Site assessments will also identify traffic control and safety issues.

Once the FMP is approved, Wallace Group will proceed with the in‐line Flow Monitoring, to be provided in conjunction with US3.  The FMP is based on an assumed total number of 14 monitoring stations, with a total duration of 60 calendar days at each location which will include both wet weather and dry weather flows.  As discussed in the Approach Section of our Proposal, we will review and monitoring upcoming weather conditions to maximize chances of capturing significant rainfall events during the wet‐weather season monitoring interval.

Task 2.4 Update GIS Database
Based on survey data collected in Task 2.1, Wallace Group will update the City’s GIS database.  Wallace Group will also utilize data collected in Task 1 to incorporate any new developments and upgraded sewer mains that are not already included in the GIS database.

Optional Task: Wallace Group can prepare atlas maps of the sewer collection system that can be used by operation’s staff.  Costs for this effort are not currently included in the fee estimate.

Optional Task: Wallace Group can assist the City in updating the GIS database with record information including videos, drawings, inspection reports, etc.  This task will only be completed if there is remaining budget in the contract.

Task 2 Deliverables:
 Updated GIS Database with survey information (electronic) Task 3:  Wastewater Flow Characteristics and Projections Task 3.1: Existing and Future Sewer Flow Estimates
We will develop unit flow factors in order to better project wastewater flows from future developments and calibrate the sewer model using existing wastewater flows.  These unit factors will be developed for development types including residential, multi‐family, commercial, industrial, hotels and other factors.  We will request from Cal Water, water meter records/bills that will be used to evaluate usage from the various types of developments.   Using actual water use data will provide the most accurate projection of wastewater generation unit factors, especially for residential and hotel units.  Water demand data will be evaluated for a minimum of 12 months in order to assess indoor water demands (which generate wastewater flows) versus outdoor water demands (which do not generate wastewater flows). We will also use population and density information from the City’s General Plan, Specific Plans, and other planning documents provided by the City, to project future build‐out (15‐year planning horizon) population and wastewater flows.  As part of this scope of services, Wallace Group will not project population to build‐out; we will rely on the City’s planning documents and 2018 AMBAG population projections, and we will request City staff to confirm future population projections to be used in the master plan.  Total metered flow data (at the Monterey One Water lift station), along with existing population data, will be used to calculate per capita wastewater flows, which will in turn be used to project future wastewater flows.

Task 3.2: Preliminary Findings Memorandum
We will compile all the information reviewed and gathered under Tasks 0, 1, 2, and 3.1 and prepare a Preliminary Findings Memorandum stating our findings.

Task 3 Deliverables:
 Preliminary Findings Memorandum ‐ Three hard copies and one electronic pdf copy Wallace Group 5
Task 4: Develop and Calibrate Sewer Model
Task 4.1: Develop and Calibrate Sewer Model
We will utilize survey data collected in Tasks 0, 1, 2, and 3 for use in the Innovyze sewer modeling program (InfoSWMM). We will model the collection system under dry and wet weather conditions for the existing and future loadings. We typically will only model the trunk sewer mains (typically 10‐inch and larger), with some exceptions. The exception would be 6‐ or 8‐inch trunk mains that collect or carry a reasonable amount of wastewater either under existing or future conditions. We will provide an electronic copy of the sewer model at the end of the project.

Using flow data collected in the Field Investigations, wewillmodelsimulationsfor dry and wet weather flow conditions for existing and future (build‐out) developmentscenarios.  We will use the model results to identify locations in the wastewater system that have hydraulic capacity constraints under existing and future flow conditions, peak dry weather and wet weather flow conditions, based on the criteria developed for the 2011 report.

Based on the flow monitoring data obtained, we will provide the City with general observations of tributary areas exhibiting signs of I/I.  Based on this observation, we will recommend areas for further I/I investigation.

Deliverables:

1. The consultant shall provide the City a new hydraulic model that includes, but is not limitedto:
a. Manhole and pipe segment identification numbers in accordance with City‐specified naming convention, manhole invert elevation for all pipes and rim elevation b. Pipe size and material
c. Pipe flow estimates for peak dry and wet weather flows, resulting d/D ratios, and available capacity based on City specified d/D ratios

2. Provide all data files necessary to recreate, calibrate, and adjust the model in the future by selected firm or third parties.

Task 5: Develop Capital Improvement Program
Task 5.1: Develop Capital Improvement Program
Using data collected during Field Investigations, and the modeling efforts of Task 4, we will develop a Sanitary Sewer Capital Improvement Program (CIP) recommending short‐term (5‐year) and long‐term (15‐year) improvements necessary to maintain a desired level of service for the City’s sanitary sewer assets such as mainlines, manholes, and pump stations.   We will also provide one additional Program focused on Development induced improvement recommendations.  These upgrades are required to be completed when development occurs, which the timing may not be known. The CIP will include the following:

1. Condition Assessment
a. Review CCTV inspections and provide a summary table for conditions of the City’s sanitary sewer assets using Sewer Service Company's (NASSCO) Pipeline Assessment and Certification Program (PCAP).
b. Identify the useful life and value of the existing sanitary sewer collection system assets. Pipe materials of existing sanitary sewer mainsinclude high‐density polyethylene (HDPE), Acrylonitrile‐ Butadiene‐Styrene (ABS), vitrified clay (VCP), cured‐in‐placed liner, and polyvinyl chloride (PVC). c. Establish the asset values and recommended year‐to‐year replacement costs of aging infrastructure. The remaining useful life of assets shall be assessed by the Consultant using projected‐useful‐life tables, decay curves, or recent condition assessment studies.

Wallace Group 6
d. Recommendation of Improvements:
1) Identify improvements (or improvement programs such as regularly scheduled condition monitoring programs) necessary to meet the Consent Decree’s requirements and the City’s desired level of service.
2) Develop prioritization criteria and ranking matrix to utilize when prioritizing recommended improvements. Criteria should account for:
i. Probability of failure based on condition of facility. ii. How critical the facility is to system operations (i.e., ramifications of failure). iii. Potential I/I reduction.
iv. Cost of facility failure (including social and environmental costsin addition to hard costs of repairs).
3) Recommend a replacement and rehabilitation methodology for all recommended improvements. The methodology should take into account the material, condition, age of facility, and sensitive environmental areas (such as creeks and industrial areas), and overall constructability.

Deliverables:

1. Documentation of recommendation decision based on established prioritization criteria. (Decision Matrix) – See sample matrix in Additional Information Section

2. Prepare construction cost estimates associated with all recommended improvements or improvement programs. Cost estimates shall include an analysis of costs related to general maintenance and facility (life cycle cost) vs costs related to additional capacity needs caused by growth.

3. Create a prioritized list of recommended improvements and improvement programs through 2035 with a detailed focus on near term critical projects through 2025.

4. Maps for each sewer trunk main collection zone, color coded to separate facilities that are:
a. Currently at or over capacity – High Priority
b. At or over capacity with currently approved projects – Background c. At or over capacity upon full utilization of current City land uses ‐ Buildout Task 6: Development Impact Fee Nexus Study
Task 6.1: Development Impact Fee Nexus Study
Wallace Group will team with DTA to complete a Sanitary Sewer Development Impact Fee Nexus Study.  This Task will not start until after the completion of Task 7.1.  The following is the Scope of Work provided by DTA:

DIF Study
DTA, in collaboration with Wallace Group, would provide all‐inclusive professional and technical support to the City in reviewing any existing City Sanitary Sewer DIF studies related to General Plans, Specific Plans, and the Capital Improvement Program (“CIP”) and preparing a comprehensive review of required impact fee levels documented in the formal Nexus Study prepared under California Government Code Sections 66000 et seq. and 66013 et seq., which governs water capacity and connection fees charged to new development and/or redevelopment..  DTA’s Final Report would present a fee methodology that satisfies the “rational nexus” tests used by the courts to determine the legality of development exactions.  Having been subjected to legal and developer scrutiny, DTA has developed a streamlined approach and methodology that establishes a rational and substantial nexus between new development and the need for public facilities.

The Scope of Work has been devised to include all tasks necessary to create a fee program for the City that complies with California Government Code Sections 66000 et seq. and 66013 et seq. in concert with the Wallace Group 7
jurisprudence developed by various Federal district and State courts.  DTA’s General Counsel regularly reviews State and Federal legal and administrative opinions, regulations, and statutes that might affect or modify DIF Nexus Studies in California.

Work products stemming from the work plan described in this section will include:

A memorandum (“memo”) summarizing the fee methodology options; and The Draft and Final Administrative Reports.

Task A.1 – Development of Project Strategy and Kickoff Meeting DTA staff will meet with City staff in a project kickoff meeting to finalize the details of the project, deliverables, timetables, and tasks, discuss the best practices, identify needed information (i.e., reports, project/needs lists, stakeholder groups, data, etc.), prepare the final schedule, discuss the public process, determine information to be provided by City staff, and resolve other concerns, as appropriate.  Prior to the kickoff meeting, DTA will review City documentation relating to the existing Fee Study and pertinent impact fees as outlined by the City.

Task A.2 – Develop Population and Dwelling Unit Projections DTA will compile and document existing and future population and development estimates for the City.  The projections resulting from this task will ultimately calculate fee levels.  This task comprises two subtasks.

Subtask A.2.a – Population Projections
DTA will gather existing information on present and future population for the City from various sources, including City staff, the General Plan, existing Master Plans, the U.S. Census, the Association of Monterey Bay Area Governments (“AMBAG”), the State Department of Finance, and from other data sources, including the City’s CIP.

Subtask A.2.b – Conduct Entitlement Research and Projections DTA will coordinate with the City Community Development Department to determine existing and future residential and non‐residential development within the City over the planning horizon (5 years, or otherwise).  To complete this subtask, DTA will:

Review the General Plan/CIP and related plans to determine expected development land use patterns in the City;
Assess City recordsto identify existing entitlementsfor dwelling units and commercial/industrial development; and
Project the number of new dwelling units and commercial/industrial development based on existing entitlements and population projections through 2035, or such other target year as selected by City staff.

Task A.3 – Identify Sanitary Sewer Facility/Capital Needs and Levels of Service This task entails the review of the facilities and capital needs required to serve new development in the study area projected in Task A.2.  DTA will use existing City materials [and any relevant Developer’s Facilities Report(s)] as base documents and focus our effort on updating this information.

For any fee program to be comprehensive in its scope, it is necessary to complete a thorough identification and review of all the facilities that will be impacted by additional growth, including those already discussed in the General Plan or CIP.  This task will require close coordination with all appropriate City departments.

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Subtask A.3.a – Survey/Interview City Staff
DTA shall survey/interview City staff to review projected facilities in the City, along with major equipment needs, the timing at which improvements will be needed, and any physical data that would assist in developing the costs estimated below in Subtask A.3.c.  Based upon the results of the surveys and interviews, DTA will verify and, if appropriate, expand the list of new facilities found in the General Plan/CIP to be included within the fee program for the City.

Subtask A.3.b – Facilities List
Based on the information collected in Subtask A.3.a, DTA shall prepare a facilities needs list that details the new facilities and equipment to serve new development in the City.

Subtask A.3.c – Review Cost Estimates
DTA’s engineering and technical staff will, as necessary, consult with City department heads and/or engineering staff or equivalent to ascertain and understand in‐house cost data for existing and projected facilities and equipment, apply inflation and cost‐of‐living escalators to the list of projected public facilities to determine future costs, review and/or refine existing cost data, examine major sources of revenue to fund the construction of new public facilities, and provide a proportional estimate between projected costs for new facilities and predicted revenue from mitigation fees and other sources.

Task A.4 – Develop Methodology for Calculating New Sanitary Sewer Impact Fee Amounts This task entails developing the methodology used to establish the fee amount for each fee component to the extent appropriate.  There are two critical issues that must be considered in developing a fee program.  The fee program must generate revenues in a timely manner and the methodology must meet the nexus or benefit requirements of AB 1600.  Since fees of any sort can be controversial, it is critical that any fee established be legally defensible.

DTA’s Fee Study methodology must meet the nexus or benefit requirements of AB 1600, which requires that there be a nexus between the fees imposed, use of the fees, and development projects on which the fees are imposed.  Furthermore, there must be a relationship between the amount of the fee and cost of the improvements.  In order to impose a fee as a condition for a development project, the methodology must identify the purpose of the fee, ascertain the use to which the fee is to be put (if the use is financing public facilities, the facilities must be identified), determine how there is a reasonable relationship between the fee’s use and type of development project on which the fee is imposed, and establish how there is a reasonable relationship between the need for the public facility and type of development project on which the fee is being imposed.

Implicit in these requirements is a stipulation that a public agency cannot impose a fee to cure existing deficiencies in public facilities or improve public facilities beyond what is required based on the specific impacts of new development.  The benefit methodology established in this task will be documented in the Final Report.

Deliverable: Memo Summarizing the Fee Methodology Options Task A.5 – Determine Fee Levels
This task entails calculating the fee amounts based upon the dwelling unit and commercial/industrial development projections completed in Task A.2, facilities needs and costs determined in Task A.3, and methodology selected in Task A.4.

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Subtask A.5.a – Calculate Recommended Fee Amounts
DTA shall calculate fees for the City by inputting the data compiled under the preceding tasks and computing each fee to be levied.  This work will be done in a spreadsheet format that can be updated annually.

DTA will also evaluate this data in comparison to surrounding cities, such as the Cities of Capitola, Hollister, Marina, Monterey, and Seaside, so as to arrive at comparable and palatable fee levels.

Subtask A.5.b – Document Fee Derivation
DTA shall document the methodology utilized for the fee calculation model in such a way that it can be understood by the City and public.  DTA shall prepare written statements documenting the validity of the methodology for deriving each of the fees for the City.

Task A.6 – Prepare Draft and Final Reports
This task entails the preparation of the Draft and Final Reports for consideration by the City Council and City staff.  Based on the work completed in Tasks A.1‐A.5, DTA will prepare the Draft Report for review and consideration by City staff.  The Draft Report will be prepared pursuant to the applicable regulatory standard(s) and is expected to include an executive summary, population projections, a facilities and improvements list, areas of benefit (if applicable), fee calculations, recommended fee levels, and the suggested process for keeping fees current.  DTA will subsequently prepare the Final Report for presentation to the City Council and City staff based on the incorporation of City staff comments and concerns on the Draft Report.

Deliverable: Draft and Final Reports
Task A.7 – Attend Meetings and Public Outreach
This task entails attendance at a total of two (2) meetings/workshops, including the kickoff meeting, with the City Administrator (or similar), other City staff, focus groups, stakeholders, and the City Council to present information regarding the status of the impact fee program, draft study, and Final Report to obtain input.  DTA will also be prepared to lead meetings and workshops with selected groups to gain better project understanding, gauge community sentiment, and determine the key objectives.

During these meetings, DTA will consider community and stakeholder input.  For this purpose, DTA will develop handouts for these meetings that summarize the findings and analysis from the Public Review Draft.

DTA will also prepare and distribute updated information, as necessary, to facilitate discussion in Focus Group Meetings in which DTA is unable to attend.

We anticipate that all meetings will be conducted via Zoom or another online meeting software.  In‐person attendance at any meetings shall depend on State guidelines and guidance from the CDC.

OPTIONAL TASK: DTA can prepare a Sanitary Sewer Rate Study as an Optional Task.  This optional task is not currently included in the fee estimate.

Task 7: Draft and Final Sanitary Sewer Master Plan Update Task 7.1: Draft Sanitary Sewer Master Plan Update
Upon completion of Tasks 1‐5, Wallace Group will prepare the Draft Sanitary Sewer Master Plan Update.  At a minimum, the report shall include the following:

1. An Executive Summary (To be provided in the Final Report only)

2. Colored maps that are clear, easy to understand, and of professional quality of the City’s sanitary Wallace Group 10
sewer system, identified deficiencies, and locations of proposed improvements

3. Summary of existing sewer system

4. Population projections and sewer demand summary

5. Documentation of modeling methodologies and assumptions

6. Technical information, analysis, and discussion of results for each task making use of charts, graphs, and figures of professional quality to clearly and efficiently convey the information, findings, and conclusions

7. Justification for recommended improvements to be accomplished

8. Sanitary Sewer Capital Improvement Plan

9. Other supporting documentation
Task 7.2: Final Sanitary Sewer Master Plan Update
Upon receiving written comments from the City and discussion at the City Council, Wallace Group will prepare the Final Sanitary Sewer Master Plan Update..

Deliverables:
 Submit five (5) printed copies and 1 digital copy in pdf format of the Draft Sanitary Sewer Master Plan report to the City to review and comment
 Submit five (5) printed copies and 1 digital copy in pdf format of the Final Sanitary Sewer Master Plan report to the City
Wallace Group Team Resource Estimate for the
City of Salinas Sanitary Sewer Master Plan BUDGET SUMMARY

PHA TASK DESCRIPTION

PRINCIPAL

PRINCIPAL ENGINEER

DIRECTOR

SENIOR ENGINEER III

ENGINEER I

ASSOCIATE ENGINEER I

GIS SPECIALIST

TWO MAN SURVEY CREW

SENIOR LAND SURVEYOR
III
FRM
US
3 DTA
Misc. Direct Costs

TOTAL LABOR
HOURS
LABOR
$
TOTAL
COST
RATE $230 $215 $185 $180 $145 $115 $135 $215 $170 $
0 PROJECT MANAGEMENT AND MEETINGS

0.1 Project Management and Coordination 48 48 $150 96 $21,360 $21,5100.2 Kick Off Meetings and Field Review 10 6 10 $268 26 $5,040 $5,3080.3 Review and Progress Meetings 36 12 36 $535 84 $16,080 $16,6150.4 City Council Meetings 12 6 12 $535 30 $5,790 $6,3250.5 QA/QC 24 40 64 $14,120 $14,120 1 DOCUMENT REVIEW AND DATA COLLECTION

1.1 Document Review and Data Collection 8 24 50 200 282 $37,250 $37,250 2 FIELD EFFORT AND GIS UPDATE

2.1 Survey Sanitary Sewer Manholes 4 24 24 30 250 150 $20,942 482 $94,120 $115,0622.2 Lift Station Assessment 8 60 $ 20,000 68 $14,740 $14,7402.3 In-Line Flow Monitoring 4 40 60 $ 95,000 104 $18,220 $18,2202.4 Update GIS Database 40 16 100 156 $23,940 $23,940 3 WASTEWATER FLOW CHARACTERISTICS ANDPROJECTIONS

3.1 Existing and Future Sewer Flow Estimates 4 24 60 40 128 $19,380 $19,3803.2 Preliminary Findings Memorandum 8 20 8 40 16 92 $15,220 $15,220 4 DEVELOP AND CALIBRATE SEWER MODEL

4.1 Develop and Calibrate Sewer Model 4 8 32 120 164 $25,800 $25,800 5 DEVELOP CAPITAL IMPROVEMENT PROGRAM

5.1 Develop Capital Improvement Program 16 32 24 120 192 $32,280 $32,280 6 DEVELOPMENT IMPACT FEE NEXUS STUDY

6.1 Development Impact Fee Nexus Study 16 16 8 $ 27,500 40 $8,280 $8,280 7 DRAFT AND FINAL SANITARY SEWER MASTER PLANUPDATE

7.1 Draft Sanitary Sewer Master Plan Update 8 32 24 120 40 224 $35,040 $35,040

7.2 Final Sanitary Sewer Master Plan Update 8 8 4 40 16 76 $11,920 $11,920 SUB-TOTALS 218 440 24 92 706 328 100 250 150 $ 20,000 $ 95,000 $ 27,500 $22,430 2,308 WALLACE GROUP LABOR COSTS $50,140 $94,600 $4,440 $16,560 $102,370 $37,720 $13,500 $53,750 $25,500 $398,580 WALLACE GROUP DIRECT COSTS $22,430
SUBCONSULTANT DIRECT COSTS $20,000 $95,000 $27,500 $142,500 DIRECT COSTS OVERHEAD @ 15% $24,739
TOTAL $588,249
Amendment to Scope of Services
Additional Scope Items and Associated Fees
Wallace Group has been working with the City of Salinas on the completion of Sanitary Sewer Master Plan Update since February 2021. Wallace Group is amending the following task items (task numbers are per the original contract):
• Task 2.3: Additional flow monitoring locations – Wallace Group added three additional flow monitoring locations based on updated GIS maps that were provided to Wallace Group. • Task 1.1, 2.1, 3.1, 3.2, 4.1: Wallace Group included analysis of three areas outside the current city limits and limits of the sewer model proposed in the original scope of work per the City’s request.
• Task 5.1 and 7.1: In addition to the development of capital improvement projects for the hydraulic deficiencies identified through the hydraulic model, the City requested to also prepare a CIP program for the operations and maintenance related deficiencies. These deficiencies were mapped and a cost table was prepared. • Task 2.2: The level of effort anticipated for development of the CIP program for the City’s 11 lift stations was significantly more effort than anticipated during the scope development and budgeting process due to verifying needs and information on each of the lift stations and the available data to be used in the evaluation.

These additional scope items will be completed on a not-to-exceed basis of $45,000.

Exhibit B1
City of Salinas
Legislation Text
200 Lincoln Ave., Salinas,
CA 93901
www.cityofsalinas.org
File #: ID#22-546, Version: 1
Annual Investment Policy
Approve a Resolution adopting the Annual Investment Policy for the City of Salinas for Fiscal Year 2023 as attached.

City of Salinas Page 1 of 1 Printed on 10/12/2022
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CITY OF SALINAS

CITY COUNCIL STAFF REPORT
______________________________________________________________________________ DATE: OCTOBER 18, 2022
DEPARTMENT: FINANCE
FROM: MARK ROBERTS, DIRECTOR OF FINANCE
TITLE: ADOPTION OF CITY OF SALINAS ANNUAL INVESTMENT
POLICY, AS AMENDED, FOR FISCAL YEAR 2023
RECOMMENDATION:

Staff recommends the City Council approve a resolution adopting the Annual Investment Policy for the City of Salinas, as amended, for Fiscal Year 2023.

EXECUTIVE SUMMARY:

City of Salinas Annual Investment Policy Section 18 requires the City’s investment policy be reviewed and adopted at least annually. Following review by staff and consultation with the City’s investment advisor, Chandler Asset Management, staff recommends amendment of the Annual Investment Policy as reflected in the attachments to this staff report.

CEQA CONSIDERATION:

Not a Project. The City of Salinas has determined the proposed action is not a project as defined by the California Environmental Quality Act (CEQA) (CEQA Guidelines Section 15378).

STRATEGIC PLAN INITIATIVE:

Given the importance of establishing and maintaining strong internal controls, adoption of the recommended resolution achieves the Council 2022-2025 Strategic Goal of Effective Government.

FISCAL AND SUSTAINABILITY IMPACT:

There is no fiscal impact associated with approval of the recommended action.

ATTACHMENTS:

Annual Investment Policy – Original
Annual Investment Policy – Draft
Annual Investment Policy – Final
Resolution
1 RESOLUTION NO. (N.C.S.)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SALINAS ADOPTING THE CITY’S ANNUAL INVESTMENT POLICY, AS AMENDED, FOR FISCAL YEAR 2023
WHEREAS, City of Salinas Annual Investment Policy Section 18 requires the City’s investment policy be reviewed and adopted at least annually; and WHEREAS, following review by City staff and consultation with the City’s investment advisor, Chandler Asset Management, staff recommends the amendment of various sections of the Policy.

NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Salinas adopts the City of Salinas Annual Investment Policy as amended for Fiscal Year 2023, as reflected in the attachments hereto.

PASSED AND APPROVED this 18th day of October 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED:
______________________________
Kimbley Craig, Mayor
ATTEST:
_________________________
Patricia M. Barajas, City Clerk
1 CITY OF SALINAS

ANNUAL INVESTMENT POLICY
1) PURPOSE
The purpose of this document is to establish policies and procedures to ensure effective and judicious management of the investments of the City of Salinas (“City”).

All City funds will be invested in accordance with this Investment Policy and California Government Code (“Government Code”) Sections 16429.1 et seq. and 53600 et seq. 2) SCOPE
This Investment Policy applies to all financial assets and investment activities of the City and the Successor Agency with the following exception(s):

Proceeds of debt issuance shall be invested in accordance with the City’s general investment philosophy as set forth in this policy; however, such proceeds are invested in accordance with permitted investment provisions of their specific bond indentures.

Pooling of funds: Except for cash in certain restricted and special funds, the City will consolidate cash and reserve balances from all funds to maximize investment earnings and to increase efficiencies with regard to investment pricing, safekeeping, and administration.

Investment income will be allocated to the various funds of the City based on their respective invested assets and in accordance with generally accepted accounting principles. 3) OBJECTIVES
The City has a fiduciary responsibility to maximize the productive use of all assets entrusted to its care and to invest and manage those public funds wisely and prudently. Therefore, the City shall strive to maintain the level of investment of all idle funds as near 100% as possible through projected cash flow determinations, investing in those investment vehicles deemed prudent and allowable under the laws of the State of California and the ordinances of the City of Salinas.

The objectives of the City’s investment program are, in order, safety, liquidity, and return.

1. Safety: Preservation of principal is the foremost objective of the City’s investment program. Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio.

2. Liquidity: The City's investment portfolio shall remain sufficiently liquid to allow the City to meet all operating requirements which may be reasonably anticipated.

3. Return: The City’s investment portfolio shall be managed with the objective of attaining a market average rate of return through budgetary and economic cycles, taking into account

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
2 the City’s safety constraints and liquidity requirements and state and local law, ordinances, and resolutions that restrict the placement of short-term funds. 4) PRUDENT INVESTOR STANDARD
Prudent Investor Standard: Management of the City’s investments is governed by the Prudent Investor Standard as set forth in Government Code Section 53600.3:
“…all governing bodies of local agencies or persons authorized to make investment decisions on behalf of those local agencies investing public funds pursuant to this chapter are trustees and therefore fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency.” 5) PERFORMANCE EVALUATION
Investment performance is to be continually monitored and evaluated by the Director of Finance. The City’s primary portfolio performance will be measured against an objective index with similar attributes to the City’s portfolio.
6) DELEGATION OF AUTHORITY
Authority to manage the City’s investment program is derived from Government Code Section 53600 et seq. The City Council is responsible for the City’s cash management, including the administration of this Investment Policy. Pursuant to Section 46 of the Salinas City Charter and Chapter 12 of the Salinas Municipal Code, the City Council has delegated investment authority to the Director of Finance. Subject to review, the City Council may renew the delegation of authority each year.

No person may engage in an investment transaction except as provided under the terms of the policy and the procedures established by the Director of Finance.

The City may engage the services of one or more external investment managers to assist in the management of the City’s investment portfolio in a manner consistent with this Investment Policy and the City’s objectives. Such external managers may be granted discretion to purchase and sell investment securities in accordance with this Investment Policy. In accordance with the Investment Advisors Act of 1940, managers must be registered with the Securities & Exchange Commission (SEC) before they can offer their securities in the public market.

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
3 The Treasurer and the delegated investment officers, acting in accordance with written procedures and this Investment Policy and exercising due diligence, shall be relieved of personal responsibility for an individual security’s credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments.
7) ETHICS AND CONFLICTS OF INTEREST
Officers and employees involved in the investment process shall refrain from personal business activity that conflicts with proper execution of the investment program or impairs their ability to make impartial investment decisions.
8) SAFEKEEPING/CUSTODY, DELIVERY, AND COMPETITIVE TRANSACTIONS A. Third-Party Safekeeping: To protect against potential losses by collapse of individual securities dealers, and to enhance access to securities, interest payments and maturity proceeds, all securities owned by the City will be held in safekeeping by a third-party bank custodian, acting as agent for the City under the terms of a custody agreement executed by the bank and the City.

B. Delivery versus Payment: Settlement of all investment transactions will be completed on a delivery-versus-payment basis. All securities purchased or acquired shall be delivered to the City of Salinas by book entry, physical delivery, or by third party custodial agreement as required by Government Code Section 53601.

The only exception to the foregoing shall be depository accounts and securities purchases made with: (i) State of California’s Local Agency Investment Fund and otherlocal government investment pools; (ii) non-negotiable certificates of deposit; and, (iii) money market mutual funds, since the purchased securities are not deliverable. Evidence of each these investments will be held by the City.

C. Competitive Transactions: All investment transactions will be conducted on a competitive basis which can be executed through a bidding process involving at least three separate brokers/financial institutions where applicable, or through the use of a nationally recognized trading platform.
9) DIVERSIFICATION
The City of Salinas will diversify its investments by security type and institution. It is the policy of the City of Salinas to diversify its investment portfolio. Assets shall be diversified to reduce the risk of loss resulting from over concentration of assets in a specific maturity, a specific issuer, or a specific class of securities. Diversification strategies shall be determined and revised periodically and approved by the City Manager and the City Council. In

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
4 establishing specific diversification strategies, the following general policies and constraints shall apply:

A. Maturities selected shall provide for stability of income and liquidity.

B. Disbursement and payroll dates shall be covered through maturity investments and marketable securities.
10) INTERNAL CONTROL
The Director of Finance shall establish a system of written internal controls to regulate the City’s investment activities, including the activities of any subordinate officials acting on behalf of the City.

The investment portfolio and all related transactions shall be reviewed and balanced to the appropriate general ledger accounts by Department of Finance Staff on a monthly basis.

An independent analysis by the City’s external auditor shall be conducted annually as part of the annual audit to review internal control, account activity, and compliance with the Government Code and with policies and procedures and reported to City Council. 11) REPORTING
A. The Director of Finance shall submit to City Council a monthly report of investment transactions.

B. The Director of Finance shall render a quarterly investment report to the City Manager and City Council.

1. Except as provided in subsection 2, the quarterly report shall include the following information for each individual investment:
▪ type of investment instrument;
▪ issuer name;
▪ maturity date;
▪ par value;
▪ book value (purchase price);
▪ current market value and the source of the valuation.

2. For investments placed in the State of California’s Local Agency Investment Fund; in FDIC-insured or fully collateralized demand deposit accounts, savings accounts, market rate accounts, time certificates of deposits, and other types of bank deposits in financial institutions located in California; in a county investment pool; or any combination of these, the Director of Finance may provide the City Manager and City Council the most recent statement or statements received from these

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
5 institutions in lieu of the information required by subsection 1 regarding investments in these institutions.

3. The quarterly report also shall (a) state compliance of the portfolio to the Investment Policy, or manner in which the portfolio is not in compliance; (b) include a description of any of the City's funds, investments, or programs that are under the management of contracted parties, including lending programs; and (c) include a statement denoting the ability of the City to meet its expenditure requirements for the next six months, or provide an explanation as to why sufficient money shall, or may, not be available.

C. The Investment Policy shall be reviewed at least annually and, as necessary, adopted by the City Council to ensure its consistency with the overall objectives of safety, liquidity, and return, as well as its relevance to current law and financial and economic trends. 12) QUALIFIED BROKER DEALERS
Whenever practical, a competitive bid process will be used for the purchase and sale of investments. It shall be the City’s policy to execute investment transactions only with broker/dealers and financial institutions deemed eligible by the Director of Finance or the City's Investment Advisor if applicable, will be used to place all investment purchases. 13) AUTHORIZED INVESTMENTS
All investments shall be made in accordance with Government Code Sections 16429.1 et seq. and 53600 et seq. Within the investments permitted by the Government Code, the City seeks to further restrict eligible investments to the guidelines listed below. In the event a discrepancy is found between this Investment Policy and the Government Code, the more restrictive parameters will take precedence.

Where this section specifies a percentage limitation for a particular category of investment, that percentage is applicable only at the date of purchase. Where this section does not specify a limitation on the term or remaining maturity at the time of the investment, no investment shall be made in any security, other than a security underlying a repurchase agreement authorized by this section, that at the time of the investment has a term remaining to maturity in excess of five (5) years. Any investment held at the time this Investment Policy is adopted which does not meet the new policy guidelines may be held until maturity and shall be exempt from the current policy. At the time of the investment’s maturity or liquidation, such funds shall be reinvested only as provided in the current policy.

A. United States Treasury, notes, bonds, bills, or certificates of indebtedness, or those for which the full faith and credit of the United States are pledged for the payment of principal and interest.

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
6 B. Federal agency or United States government-sponsored enterprise obligations, participations, or other instruments, including those issued by or fully guaranteed as to principal and interest by federal agencies or United States government-sponsored enterprises. No more than 40% of the City's portfolio may be invested in any one federal agency.

C. Registered state warrants or treasury notes or bonds of the State of California, including bonds payable solely out of revenues from a revenue-producing property owned, controlled, or operated by the state or by a department, board, agency, or authority of the state. The securities must be rated in a rating category of “A” or its equivalent or higher by a nationally recognized statistical rating organization (NRSRO).

D. Registered treasury notes or bonds of any of the other 49 states in addition to California, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by a state or by a department, board, agency, or authority of any of the other 49 states, in addition to California. The securities must be rated in a rating category of “A” or its equivalent or higher by a NRSRO.

E. Bonds, notes, warrants, or other evidences of indebtedness of a local agency within this state, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by the local agency, or by a department, board, agency, or authority of the local agency. The securities must be rated in a rating category of “A” or its equivalent or higher by a NRSRO.

F. Repurchase Agreements collateralized with securities authorized under Government Code, maintained at a level of at least 102% of the market value of the repurchase agreement.

There are no limits on the dollar amount or percentage that the City may invest, provided that:
▪ securities used as collateral for repurchase agreements will be delivered to an acceptable third-party custodian;
▪ repurchase agreements are subject to a master repurchase agreement between the City and the provider of the repurchase agreement. The master repurchase agreement will be substantially in the form developed by the Securities Industry and Financial Markets Association (SIFMA);
▪ the maximum maturity does not exceed ninety-two days.

G. Reverse repurchase agreements or securities lending agreements may be utilized only when all the following conditions are met:

1. the security to be sold on reverse repurchase agreement or securities lending agreement has been owned and fully paid for by the City for a minimum of 30 days prior to sale;

2. the total of all reverse repurchase agreements and securities lending agreements on investments owned by the City does not exceed 20 percent of the market value of the portfolio;

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
7 3. the agreement does not exceed a term of 92 days, unless the agreement includes a written codicil guaranteeing a minimum earning or spread for the entire period between the sale of a security using a reverse repurchase agreement or securities lending agreement and the final maturity date of the same security;

4. funds obtained or funds within the pool of an equivalent amount to that obtained from selling a security to a counterparty by way of a reverse repurchase agreement or securities lending agreement shall not be used to purchase another security with a maturity longer than 92 days from the initial settlement date of the reverse repurchase agreement or securities lending agreement, unless the reverse repurchase agreement or securities lending agreement includes a written codicil guaranteeing a minimum earning or spread for the entire period between the sale of a security using a reverse repurchase agreement or securities lending agreement and the final maturity date of the same security.

Investments in reverse repurchase agreements, securities lending agreements, or similar investments in which the City sells securities prior to purchase with a simultaneous agreement to repurchase the security may only be made upon prior approval of the City Council and shall only be made with primary dealers of the Federal Reserve Bank of New York or with a nationally or state-chartered bank that has or has had a significant banking relationship with the City. The City may not invest more than 20% of its portfolio in reverse repurchase agreements and must always match its maturities to the reinvestment.

H. Bankers’ acceptances, otherwise known as bills of exchange or time drafts, that are drawn on and accepted by a commercial bank. Purchases of bankers' acceptances shall not exceed 180 days’ maturity or 40% of the City’s surplus moneys that may be invested pursuant to this section. However, no more than 30% of the City’s surplus moneys may be invested in the bankers’ acceptances of any one commercial bank. Eligible bankers' acceptances are restricted to issuing financial institutions with short-term paper rated in a rating category of “A-1” or its equivalent or higher by one NRSRO or long-term debt obligations rated in a rating category of “A” or its equivalent or higher by a NRSRO.

I. Commercial paper of “prime” quality of the highest ranking or of the highest letter and number rating as provided for by a NRSRO. The entity that issues the commercial paper shall meet all the following conditions in either paragraph (1) or paragraph (2) below:

1. The entity meets the following criteria: (a) is organized and operating in the United States as a general corporation, (b) has total assets in excess of five hundred million dollars ($500,000,000), and (c) has debt other than commercial paper, if any, rated in a rating category of “A” or its equivalent or higher by a NRSRO.

2. The entity meets the following criteria: (a) is organized within the United States as a special purpose corporation, trust, or limited liability company, (b) has programwide credit enhancements, including, but not limited to, overcollateralization, letters of credit, or surety bonds. (c) has commercial paper rated “A-1” or its equivalent or higher by a NRSRO.

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
8 Eligible commercial paper shall have a maximum maturity of 270 days or less. The City may invest no more than 25% of its surplus moneys that may be invested pursuant to this section in eligible commercial paper, and the City may invest no more than 10% of its total investment assets in the commercial paper and the medium-term notes of any single issuer.

Under a provision sunsetting on January 1, 2026, no more than 40% of the City’s surplus moneys may be invested in commercial paper if the City’s investment assets under management are greater than $100,000,000. The City may invest no more than 5% of its total investment assets in any single issuer.

J. Medium-term notes issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States. Notes eligible for investment under this subsection must be rated in a rating category of “A” or its equivalent or higher by a NRSRO. Purchases of mediumterm notes shall not exceed 30% of the City’s surplus moneysthat may be invested pursuant to this section, and the City may invest no more than 10% of its total investment assets in the commercial paper and the medium-term notes of any single issuer.

K. FDIC-insured or fully collateralized demand deposit accounts, savings accounts, market rate accounts, time certificates of deposits (TCDs) and other types of bank deposits in financial institutions located in California. The amount on deposit in any financial institution shall not exceed the shareholder’s equity. To be eligible to receive City deposits, the financial institution must have received a minimum overall satisfactory rating, under the Community Redevelopment Act, for meeting the credit needs of California Communities in its most recent evaluation. Bank deposits are required to be collateralized as specified under Government Code Section 53630 et. seq. The Treasurer, at his/her discretion, may waive the collateralization requirements for any portion that is covered by federal deposit insurance. The City shall have a signed agreement with any depository accepting City funds per Government Code Section 53649. There is no limit on the percentage of the portfolio that may be invested in bank deposits. However, a maximum of 30 percent of the portfolio may be invested in TCDs.

L. Negotiable Certificates of Deposit issued by a nationally- or state-chartered bank or a state or federal savings and loan association, a state or federal credit union, or by a federally- or state-licensed branch of a foreign bank. Amounts of negotiable certificates of deposit insured up to the FDIC limit do not require a credit rating. Any amount above the FDIC insured limit must be issued by institutions with short-term debt obligations rated in a rating category of “A-1” or its equivalent or higher by at least one NRSRO, or long-term obligations rated in a rating category of “A” or its equivalent or higher by a NRSRO.

Purchases of negotiable certificates of deposit shall not exceed 30% of the City's surplus moneys that may be invested pursuant to this section.

M. Certificates of deposit placed through a deposit placement service that meet the requirements under Government Code Section 53601.8. The full amount of each deposit placed and the interest that may accrue on each such deposit shall at all times be insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration.

Purchases of certificates of deposit placed through a deposit placement service shall not,

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
9 in total, exceed 30 percent of the City’s surplus moneys that may be invested pursuant to this section.

N. State of California’s Local Agency Investment Fund (LAIF). Investment in LAIF may not exceed the amount permitted by LAIF.

O. Shares of beneficial interest issued by a joint powers authority organized pursuant to Government Code Section 6509.7 that invests in the securities and obligations authorized in this section. Each share shall represent an equal proportional interest in the underlying pool of securities owned by the joint powers authority. To be eligible under this section, the joint powers authority issuing the shares shall have retained an investment adviser that meets all of the following criteria:

1. The adviser is registered or exempt from registration with the Securities and Exchange Commission.

2. The adviser has not less than five years of experience investing in the securities and obligations authorized in this section.

3. The adviser has assets under management in excess of five hundred million dollars ($500,000,000)
The underlying pool of securities of which the shares are purchased must be rated in a rating category of “AAAm” or its equivalent or higher by a NRSRO.

P. Shares of beneficial interest issued by diversified management companies that are money market funds registered with the SEC under the Investment Company Act of 1940 (15 USC Sec. 80a-1, et seq.). The purchase price of shares shall not exceed 20 percent of the investment portfolio of the City. To be eligible for investment pursuant to this subdivision, these companies shall have either:

1. attained the highest-ranking letter or numerical rating provided by not less than two of the three largest NRSRO or

2. retained an investment advisor registered or exempt from registration with the SEC with not less than five years’ experience managing money market mutual funds and with assets under management in excess of $500,000,000.

Q. A mortgage pass-through security, collateralized mortgage obligation, mortgage-backed or other pay-through bond, equipment lease-backed certificate, consumer receivable passthrough certificate, or consumer receivable-backed bond. Securities eligible for investment under this subsection shall be rated in a rating category of “AA” or its equivalent or higher by an NRSRO. Purchase of securities authorized by this subsection shall not exceed 20 % of the City’s surplus moneys that may be invested pursuant to this section. The City may invest no more than 5% of its total investment assets in the asset-backed or commercial mortgage security of any single issuer.

R. Supranational obligations. Issues must be United States dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
10 International Bank for Reconstruction and Development, International Finance Corporation, or Inter-American Development Bank and eligible for purchase and sale within the United States. The securities must be rated in a rating category of “AA” or its equivalent or higher by a NRSRO. No more than 30% of the City’s surplus moneys that may be invested pursuant to this section may be invested in this category. The City may invest no more than 10% of its total investment assets in the supranational obligations of any single issuer.
14) PROHIBITED INVESTMENTS
Any security type or structure not specifically approved by this policy is hereby specifically prohibited. Security types which are thereby prohibited include, but are not limited to, inverse floaters, derivatives, range notes, interest only strips that are derived from a pool of mortgages, or in any investment that could result in zero interest accrual if held to maturity. Under a provision sunsetting on January 1, 2026, securities backed by the US Government that could result in a zero- or negative-interest accrual if held to maturity are permitted. Trading securities for the sole purpose of speculating on the future direction of interest rates is prohibited.

Purchasing or selling securities on margin is prohibited. The use of reverse repurchase agreements, securities lending or any other form of borrowing or leverage is prohibited. The purchase of foreign currency denominated securities is prohibited. Local governments that are not Qualified Institutional Buyers (QIB) as defined by the SEC are prohibited from purchasing Private Placement Securities. The SEC defines a QIB as having at least $100,000,000 in securities owned and invested.
15) INVESTMENT OF BOND PROCEEDS
Bond proceeds shall be invested in the securities permitted by the applicable bond documents. If the bond documents are silent as to the permitted investments, bond proceeds will be invested in the securities permitted by this policy. Notwithstanding the other provisions of this policy, the percentage or dollar portfolio limitations listed in elsewhere in this policy do not apply to bond proceeds. In addition to the securities listed in this Policy, bond proceeds may be invested in a structured investment product if approved by the Director of Finance.
16) LEGISLATIVE CHANGES
Any State of California legislative action that further restricts allowable maturities, investment type or percentage allocations will be deemed to be incorporated into the City of Salinas’s investment policy and will supersede any and all applicable language. 17) INTEREST EARNINGS

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
11 All moneys earned and collected from investments authorized in this policy shall be allocated monthly to various fund accounts based on the pooled cash balance in each fund as a percentage of the entire pooled portfolio.
12 Glossary
Agency: Federal agency securities and /or
Government-sponsored enterprises.

Bankers’ Acceptance (BA): A draft or bill
or exchange accepted by a bank or trust
company. The accepting institution
guarantees payment of the bill, as well as the
issuer.

Broker: A broker brings buyers and sellers
together for a commission.

California Local Government Debt: Is
bonds, notes, warrants, or other evidences of
indebtedness of any local agency within
California. California local government
debt is a permitted investment under the
California Government Code. The
Government Code does not specify
minimum credit ratings for local
government debt in which local agencies
may invest.

Certificate of Deposit (CD): A time
deposit with a specific maturity evidenced
by a certificate. Large-denomination CD’s
are typically negotiable.

Collateral: Securities, evidence of deposit
of other property which a borrower pledges
to secure repayment of a loan. Also refers to
securities pledged by a bank to secure
deposits of public monies.

Annual Comprehensive Financial Report
(ACFR): The official annual report for the
City of Salinas. It includes five combine
statements for each individual fund and
account group prepared in conformity with
GAAP. It also includes supporting
schedules necessary to demonstrate
compliance with finance-related legal and
contractual provisions, extensive
introductory material, and a detailed
Statistical Section.

Coupon: (a) The annual rate of interest that
a bond’s issuer promises to pay the
bondholder on the bond’s face value. (b) A
certificate attached to a bond evidencing
interest due on a payment date.

Dealer: A dealer, as opposed to a broker,
acts as a principal in all transactions, buying
and selling for his own account.

Debenture: A bond secured only by the
general credit of the issuer.

Delivery versus Payment: There are two
methods of delivery of securities: delivery
versus payment and delivery versus receipt.

Delivery versus payment is delivery of
securities with an exchange of money for the
securities. Delivery versus receipt is
delivery of securities with an exchange of a
signed receipt for the securities.

Derivatives: (1) Financial instruments
whose return profile is linked to, or derived
from, the movement of one or more
underlying index or security, and may
include a leveraging factor, or (2) financial
contracts based upon notional amounts
whose value is derived from an underlying
index or security (interest rates, foreign
exchange rates, equities or commodities).

Discount: The difference between the cost
price of a security and its maturity when
quoted at lower than face value. A security
selling below original offering price shortly
after sale also is considered to be at a
discount.

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
13 Diversification: Dividing investment funds
among a variety of securities offering
independent returns.

Federal Credit Agencies: Agencies of the
Federal government set up to supply credit
to various classes of institutions and
individuals, e.g., S&L’s, small business
firms, students, farmers, farm cooperatives,
and exporters.

Federal Deposit Insurance Corporation
(FDIC): A federal agency that insures bank
deposits, currently up to $250,000 per
deposit.

Federal Funds Rate: The rate of interest at
which Fed funds are traded. This rate is
currently pegged by the Federal Reserve
through open-market operations.

Federal Home Loan Banks (FHLB):

Government sponsored wholesale banks
(currently 12 regional banks) which lend
funds and provide correspondent banking
services to member commercial banks, thrift
institutions, credit unions and insurance
companies. The mission of the FHLB is to
liquefy the housing related assets of its
members who must purchase stock in their
district Bank.

Federal National Mortgage Association
(FNMA): FNMA, like GNMA was
chartered under the Federal National
Mortgage Association Act in 1938. FNMA
is a federal corporation working under the
auspices of the Department of Housing and
Urban Development (HUD). It is the largest
single provider of residential mortgage
funds in the United States. Fannie Mae, as
the corporation is called, is a private
stockholder-owned corporation. The
corporation’s purchases include a variety of
adjustable mortgages and second loans, in
addition to fixed-rate mortgages. FNMA’s
securities are also highly liquid and are
widely accepted. FNMA assumes and
guarantees that all security holders will
receive timely payment of principal and
interest.

Federal Open Market Committee
(FOMC): Consists of seven members of
the Federal Reserve Board and five of the
twelve Federal Reserve and Presidents. The
President of the New York Federal Reserve
Bank is a permanent member, while the
other Presidents serve on a rotating basis.

The Committee periodically meets to set
Federal Reserve guidelines regarding
purchases and sales of Government
Securities in the open market as a means of
influencing the volume of bank credit and
money.

Federal Reserve System: The central bank
of the United States created by Congress and
consisting of a seven-member Board of
Governors in Washington, D.C., 12 regional
banks and about 5,700 commercial banks
that are members of the system.

Government National Mortgage
Association (GNMA or Ginnie Mae):

Securities influencing the volume of bank
credit guaranteed by GNMA and issued by
mortgage bankers, commercial banks,
savings and loan associations, and other
institutions. Security holder is protected by
full faith and credit of the US Government.

Ginnie Mae securities are backed by the
FHA, VA or FmHA mortgages. The term
“pass-throughs” is often used to describe
Ginnie Maes.

Issuer: Any corporation, government unit
or financial institution which borrows
money through the sale of securities.

Liquidity: A liquid asset is one that can be
converted easily and rapidly into cash

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
14 without a substantial loss of value. In the
money market, a security is said to be liquid
if the spread between bid and asked prices is
narrow and reasonable size can be done at
those quotes.

Local Agency Investment Fund (LAIF):

A special fund in the State Treasury which
local agencies may use to deposit funds for
investment. All interest is distributed to
those agencies participating on a
proportionate share determined by the
amounts deposited and the length of time
they are deposited. Interest is paid quarterly
via direct deposit to the LAIF account. The
State keeps an amount for reasonable costs
of making the investments, not to exceed
one-quarter of one per cent of the earnings.

Local Government Investment Pool
(LGIP): The aggregate of all funds from
political subdivisions that are pooled
together for investment and reinvestment.

Market Value: The price at which a
security is trading and could presumably be
purchased or sold.

Master Repurchase Agreement: A written
contract covering all future transactions
between the parties to repurchase – reverse
repurchase agreements that establishes each
party’s rights in the transactions. A master
agreement will often specify, among other
things, the right of the buyer-lender to
liquidate the underlying securities in the
event of default by the seller-borrower.

Maturity: The date upon which the
principal or stated value of an investment
becomes due and payable.

Money Market: The market in which
short-term debt instruments (bills,
commercial paper, bankers’ acceptances,
etc.) are issued and traded.

Mutual Funds: Referred to in the
Government Code, Section 53601(l) as
“shares of beneficial interest issued by
diversified management companies.” The
Mutual Fund must be restricted by its bylaws to the same investments as the local agency by the Government Code. These
investments are Treasury issues, Federal
Agency issues, State of California and City
(within California) debt obligations, Bankers
Acceptances, Commercial Paper,
Certificates of Deposit, Negotiable
Certificates of Deposit, Repurchase
Agreements, Reverse Repurchase
Agreements, and Medium-Term Corporate
Notes. The quality rating and percentage
restrictions in each investment category
applicable to the local agency also apply to
the Mutual Fund.

Negotiable: Term used to designate a
security, the title to which is transferable by
delivery.

Offer: The price asked by a seller of
securities. (When you are buying securities,
you ask for an offer). See Asked and Bid.

Open Market Operations: Purchases and
sales of government and certain other
securities in the open market by the New
York Federal Reserve Bank as directed by
the FOMC in order to influence the volume
of money and credit in the economy.

Purchases inject reserves into the bank
system and stimulate growth of money and
credit; sales have the opposite effect. Open
market operations are the Federal Reserve’s
most important and most flexible monetary
policy tool.

Portfolio: Collection of securities held by
an investor.

Primary Dealer: A group of government
securities dealers who submit daily reports

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
15 of market activity and positions and monthly
financial statements to the Federal Reserve
Bank of New York and are subject to its
informal oversight. Primary dealers
included Securities & Exchange
Commission (SEC) – registered securities
broker-dealers, banks, and a few unregulated
firms.

Principal: Describes the original cost of a
security. It represents the amount of capital
or money which the investor pays for the
investment.

Prudent Person Rule: An investment
standard. In some states the law requires
that a fiduciary, such as a trustee, may invest
money only in a list of securities selected by
the custody state – the so-called legal list. In
other states the trustee may invest in a
security if it is one which would be bought
by a prudent person of discretion and
intelligence who is seeking a reasonable
income and preservation of capital.

Qualified Public Depositories: A financial
institution which does not claim exemption
from the payment of any sales or
compensating use or ad valorem taxes under
the laws of this state, which has segregated
for the benefit of the commission eligible
collateral having a value of not less than its
maximum liability and which has been
approved by the State to hold public
deposits.

Rate of Return: The yield obtainable on a
security based on its purchase price or its
current market price. This may be the
amortized yield to maturity on a bond the
current income return.

Repurchase Agreement (RP or Repo): A
holder of securities sells these securities to
an investor with an agreement to repurchase
them at a fixed price on a fixed date. The
security “buyer” in effect lends the “seller”
money for the period of the agreement, and
the terms of the agreement are structured to
compensate him for this. Dealers use RP
extensively to finance their positions.

Exception: When the Fed is said to be doing
RP, it is lending money, that is, increasing
bank services.

Safekeeping: A service to customers
rendered by banks for a fee whereby
securities and valuables of all types and
descriptions are held in the bank’s vaults for
protection.

Secondary Market: A market made for the
purchase and sale of outstanding issues
following the initial distribution.

Security: An investment instrument, other
than an insurance policy or fixed annuity,
issued by a corporation, government, or
other organization which offers evidence of
debt or equity.

Securities & Exchange Commission:

Agency created by Congress to protect
investors in securities transactions by
administering securities legislation.

SEC Rule 15C3-1: See Uniform Net
Capital Rule.

Structured Notes: Notes issued by
Government Sponsored Enterprises (FHLB,
FNMA, SLMA, etc.) and Corporations
which have imbedded options (e.g., call
features, step-up coupons, floating rate
coupons, derivative-based returns) into their
debt structure. Their market performance is
impacted by the fluctuation of interest rates,
the volatility of the imbedded options and
shifts in the shape of the yield curve.

Treasury Bills: A non-interest-bearing
discount security issued by the US Treasury

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
16 to finance the national debt. Most bills are
issued to mature in three months, six
months, or one year.

Treasury Notes: Medium-term couponbearing US Treasury securities issued as direct obligations of the US Government and
having initial maturities from two to ten
years.

Uniform Net Capital Rule: Securities &
Exchange Commission (SEC) requirement
that member firms as well as nonmember
broker-dealers in securities maintain a
maximum ratio of indebtedness to liquid
capital of 15 to 1; also called net capital rule
and net capital ratio. Indebtedness covers all
money owed to a firm, including margin
loans and commitments to purchase
securities, one reason new public issues are
spread among member of underwriting
syndicates. Liquid capital includes cash and
assets easily converted into cash.

Yield: The rate of annual income return on
an investment, expressed as a percentage.
(a) Income Yield is obtained by dividing the
current dollar income by the current market
price for the security. (b) Net Yield or
Yield to Maturity is the current income
yield minus any premium above par or plus
any discount from par in purchase price,
with the adjustment spread over the period
from the date of purchase to the date of
maturity of the bond.
17 CITY OF SALINAS

INVESTMENT GUIDELINES AND STRATEGY
I. GUIDELINES - Guidelines are established to direct and control activities in such a manner that previously established goals are achieved.

1. Investment Transaction. Every investment transaction must be authorized and reviewed by the Director of Finance or his/her designee.

2. Pooled Cash. Whenever practical, local agency cash is consolidated into one bank account and invested on a pooled concept basis. Interest earnings are allocated monthly according to month-end cash and investment balances for each fund.

3. Competitive Bids. Purchase and sales of securities are made on the basis of competitive offers and bids when practical.

4. Cash Forecast. The cash flow for the City is analyzed with the receipt of revenues and maturity of investments scheduled so that adequate cash will be available to meet disbursement requirements.

5. Investment Limitations. Security purchases and holdings are maintained within statutory limits imposed by the California Government Code. Current limits are:

Bankers’ Acceptances 40% Section 53601(f)
Commercial Paper 25% Section 53601(g)
Negotiable Certificates of Deposit 30% Section 53601(h) Medium Term Notes 30% Section 53601(j)
Money Market Mutual Funds 20% Section 53601(k)
Asset-Backed/Mortgage-Backed Securities 20% Section 53601(n) Federal Agency restriction 60% per Agency Section 14 of Policy Local Agency Investment Fund $50,000,000 per Section 14 of Policy CAMP no limit per Section 14 of Policy
Portfolio Maturing within one year 20% per Section 14 of Policy

6. Liquidity. The marketability of a security is considered at the time of purchase, as the security may have to be sold at a later date to meet unanticipated cash demands.

7. Diversification. The portfolio should consist of a mix of various types of securities, issuers, and maturities.
18 CITY OF SALINAS

INVESTMENT GUIDELINES AND STRATEGY
(Continued)
II. STRATEGY - Strategy refers to the ability to manage financial resources in the most advantageous manner.

1. Economic Forecasts. Economic Forecasts are obtained periodically from economists and financial experts through bankers and brokers to assist the Director of Finance or his/her designee with the formulation of an investment strategy for the local agency.

2. Implementing Investment Strategy. Investment transactions are executed which conform with anticipated interest rate trends and the current investment strategy plan.

3. Rapport. A close working relationship is maintained with large vendors of the city. The objective is to pinpoint when large disbursements will clear the city's bank account. It is essential for good cash control that such large expenditures be anticipated, estimated as to dollar amount, and communicated to the Director of Finance or his/her designee for liquidity planning purposes.

4. Preserve Portfolio Value. Field standards are developed in order to maintain earnings near the market and to preserve the value of the portfolio. 19 CITY OF SALINAS

INVESTMENT PROCEDURES

INTERNAL CONTROL - GUIDELINES

OBJECTIVES OF INTERNAL CONTROL
Internal control is the plan of organization and all the related systems established by the management's objective of ensuring, as far as practicable:
 The orderly and efficient conduct of its business, including adherence to management policies.  The safeguarding of assets.
 The prevention or detection of errors and fraud.
 The accuracy and completeness of the accounting records.  The timely preparation of reliable financial information.

LIMITATIONS OF INTERNAL CONTROL
No internal control system, however elaborate, can by itself guarantee the achievement of management's objectives. Internal control can provide only reasonable assurance that the objectives are met, because of its inherent limitations, including:
 Management's usual requirement that a control be cost-effective.  The direction of most controls at recurring, rather than unusual, types of transactions.  Human error due to misunderstanding, carelessness, fatigue, or distraction.  Potential for collusion that circumvents controls dependent on the segregation of functions.  Potential for a person responsible for exercising control abusing that responsibility; a responsible staff member could be in a position to override controls which management has set up.
20 CITY OF SALINAS

INVESTMENT PROCEDURES

INTERNAL CONTROL - GUIDELINES
(Continued)

ELEMENTS OF INTERNAL CONTROL
Elements of a system of internal control are the means by which an organization can satisfy the objectives of internal control. These elements are:

1. ORGANIZATION
Specific responsibility for the performance of duties should be assigned and lines of authority and reporting clearly identified and understood.

2. PERSONNEL
Personnel should have capabilities commensurate with their responsibilities. Personnel selection and training policies together with the quality and quantity of supervision are thus important.

3. SEGREGATION OF FUNCTIONS
Segregation of incompatible functions reduces the risk that a person is in a position both to perpetrate and conceal errors or fraud in the normal course of duty. If two parts of a transaction are handled by different people, collusion is necessary to conceal errors or fraud.

In particular, the functions that should be considered when evaluating segregation of functions are authorization, execution, recording, custody of assets, and performing reconciliations.

4. AUTHORIZATION
All transactions should be authorized by an appropriate responsible individual. The responsibilities and limits of authorization should be clearly delineated. The individual or group authorizing a specific transaction or granting general authority for transactions should be in a position commensurate with the nature and significance of the transactions. Delegation of authority to authorize transactions should be handled very carefully.

5. CONTROLS OVER AN ACCOUNTING SYSTEM
Controls over an accounting system include the procedures, both manual and computerized, carried out independently to ascertain that transactions are complete, valid, authorized, and properly recorded.
21 CITY OF SALINAS

CASH CONTROLS

PROCEDURES PERFORMED BY EXTERNAL AUDITORS WITH RESPECT TO CASH

RECEIPTS
A. City procedures and controls are reviewed. Some of the system strengths are:

1. Receipts are controlled upon receipt by proper registration devices.

2. Receipts are reconciled on a daily basis.

3. Amounts batched and deposited intact.

4. Bank reconciliations are reviewed.

5. Prompt posting of cash receipt entries in books.

6. Proper approval required for write-offs of customer accounts.

7. Checks are restrictively endorsed upon receipt or when run through cash register.

8. Adequate physical security over cash.

9. Individuals that handle cash do not post to customer account records or process billing statements.

10. Adequate supervision of Finance Department operations.

B. Significant revenues are confirmed directly with payer and compared with City books to make sure amounts are recorded properly.

C. Cash balances are substantiated by confirming all account balances recorded in books. Bank reconciliations are reviewed for propriety and recalculated by the auditor. All significant reconciling items on bank reconciliations are verified as valid reconciling items by proving to subsequent bank statements.
22 CITY OF SALINAS

SEGREGATION OF RESPONSIBILITIES OF

THE TREASURY FUNCTIONS
Function Responsibility

1. Formal Investment Policy should be:

Prepared By: Director of Finance
Approved By: City Council

2. Develop Investment Strategy Director of Finance or Registered Investment Advisor

3. Investment Strategy should be Director of Finance
approved by

4. Execution of investment transactions:

Investments other than LAIF and Deposits Director of Finance or Registered Investment Advisor
Execution of LAIF and Deposit transfers Accounting Manager

5. Timely recording of investment transactions:

Recording of investment transactions Senior Accountant
in the City's accounting records (but reviewed by Accounting Manager)

6. Verification of investment, Senior Accountant
i.e., match broker confirmation to City's records

7. Confirmation of LAIF and Bank Wires Assistant Director of Finance

8. Safeguarding of Assets and Records:

Reconciliation of City's Senior Accountant
records to bank statements and (but reviewed by Assistant safekeeping records Director of Finance)
23 CITY OF SALINAS

SEGREGATION OF RESPONSIBILITIES OF

THE TREASURY FUNCTIONS
(Continued)
Function Responsibility

8. Safeguarding of Assets and Records
(continued):

Annual review of (a) financial Director of Finance or Registered institution's financial condition, Investment Advisor
(b) safety, liquidity, and potential
yields of investment instruments.

9. No less than an annual Independent Auditors
review of investment
portfolio as prepared by
Senior Accountant and reviewed by
Director of Finance
1 CITY OF SALINAS

ANNUAL INVESTMENT POLICY
1) PURPOSE
The purpose of this document is to establish policies and procedures to ensure effective and judicious management of the investments of the City of Salinas (“City”).

All City funds will be invested in accordance with this Investment Policy and California Government Code (“Government Code”) Sections 16429.1 et seq. and 53600 et seq. 2) SCOPE
This Investment Policy applies to all financial assets and investment activities of the City and the Successor Agency with the following exception(s):

Proceeds of debt issuance shall be invested in accordance with the City’s general investment philosophy as set forth in this policy; however, such proceeds are invested in accordance with permitted investment provisions of their specific bond indentures.

Pooling of funds: Except for cash in certain restricted and special funds, the City will consolidate cash and reserve balances from all funds to maximize investment earnings and to increase efficiencies with regard to investment pricing, safekeeping, and administration.

Investment income will be allocated to the various funds of the City based on their respective invested assets and in accordance with generally accepted accounting principles. 3) OBJECTIVES
The City has a fiduciary responsibility to maximize the productive use of all assets entrusted to its care and to invest and manage those public funds wisely and prudently. Therefore, the City shall strive to maintain the level of investment of all idle funds as near 100% as possible through projected cash flow determinations, investing in those investment vehicles deemed prudent and allowable under the laws of the State of California and the ordinances of the City of Salinas.

The objectives of the City’s investment program are, in order, safety, liquidity, and return.

1. Safety: Preservation of principal is the foremost objective of the City’s investment program. Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio.

2. Liquidity: The City's investment portfolio shall remain sufficiently liquid to allow the City to meet all operating requirements which may be reasonably anticipated.

3. Return: The City’s investment portfolio shall be managed with the objective of attaining a market average rate of return through budgetary and economic cycles, taking into account

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
2 the City’s safety constraints and liquidity requirements and state and local law, ordinances, and resolutions that restrict the placement of short-term funds. 4) PRUDENT INVESTOR STANDARD
Prudent Investor Standard: Management of the City’s investments is governed by the Prudent Investor Standard as set forth in Government Code Section 53600.3:
“…all governing bodies of local agencies or persons authorized to make investment decisions on behalf of those local agencies investing public funds pursuant to this chapter are trustees and therefore fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency.” 5) PERFORMANCE EVALUATION
Investment performance is to be continually monitored and evaluated by the Director of Finance. The City’s primary portfolio performance will be measured against an objective index with similar attributes to the City’s portfolio.
6) DELEGATION OF AUTHORITY
Authority to manage the City’s investment program is derived from Government Code Section 53600 et seq. The City Council is responsible for the City’s cash management, including the administration of this Investment Policy. Pursuant to Section 46 of the Salinas City Charter and Chapter 12 of the Salinas Municipal Code, the City Council has delegated investment authority to the Director of Finance. Subject to review, the City Council may renew the delegation of authority each year.

No person may engage in an investment transaction except as provided under the terms of the policy and the procedures established by the Director of Finance.

The City may engage the services of one or more external investment managers to assist in the management of the City’s investment portfolio in a manner consistent with this Investment Policy and the City’s objectives. Such external managers may be granted discretion to purchase and sell investment securities in accordance with this Investment Policy. In accordance with the Investment Advisors Act of 1940, managers must be registered with the Securities & Exchange Commission (SEC) before they can offer their securities in the public market.

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
3 The Treasurer and the delegated investment officers, acting in accordance with written procedures and this Investment Policy and exercising due diligence, shall be relieved of personal responsibility for an individual security’s credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments.
7) ETHICS AND CONFLICTS OF INTEREST
Officers and employees involved in the investment process shall refrain from personal business activity that conflicts with proper execution of the investment program or impairs their ability to make impartial investment decisions.
8) SAFEKEEPING/CUSTODY, DELIVERY, AND COMPETITIVE TRANSACTIONS A. Third-Party Safekeeping: To protect against potential losses by collapse of individual securities dealers, and to enhance access to securities, interest payments and maturity proceeds, all securities owned by the City will be held in safekeeping by a third-party bank custodian, acting as agent for the City under the terms of a custody agreement executed by the bank and the City.

B. Delivery versus Payment: Settlement of all investment transactions will be completed on a delivery-versus-payment basis. All securities purchased or acquired shall be delivered to the City of Salinas by book entry, physical delivery, or by third party custodial agreement as required by Government Code Section 53601.

The only exception to the foregoing shall be depository accounts and securities purchases made with: (i) State of California’s Local Agency Investment Fund and other local government investment pools; (ii) non-negotiable certificates of deposit; and, (iii) money market mutual funds, since the purchased securities are not deliverable. Evidence of each these investments will be held by the City.

C. Competitive Transactions: All investment transactions will be conducted on a competitive basis which can be executed through a bidding process involving at least three separate brokers/financial institutions where applicable, or through the use of a nationally recognized trading platform.
9) DIVERSIFICATION
The City of Salinas will diversify its investments by security type and institution. It is the policy of the City of Salinas to diversify its investment portfolio. Assets shall be diversified to reduce the risk of loss resulting from over concentration of assets in a specific maturity, a specific issuer, or a specific class of securities. Diversification strategies shall be determined and revised periodically and approved by the City Manager and the City Council. In

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
4 establishing specific diversification strategies, the following general policies and constraints shall apply:

A. Maturities selected shall provide for stability of income and liquidity.

B. Disbursement and payroll dates shall be covered through maturity investments and marketable securities.
10) INTERNAL CONTROL
The Director of Finance shall establish a system of written internal controls to regulate the City’s investment activities, including the activities of any subordinate officials acting on behalf of the City.

The investment portfolio and all related transactions shall be reviewed and balanced to the appropriate general ledger accounts by Department of Finance Staff on a monthly basis.

An independent analysis by the City’s external auditor shall be conducted annually as part of the annual audit to review internal control, account activity, and compliance with the Government Code and with policies and procedures and reported to City Council. 11) REPORTING
A. The Director of Finance shall submit to City Council a monthly report of investment transactions.

B. The Director of Finance shall render a quarterly investment report to the City Manager and City Council.

1. Except as provided in subsection 2, the quarterly report shall include the following information for each individual investment:
▪ type of investment instrument;
▪ issuer name;
▪ maturity date;
▪ par value;
▪ book value (purchase price);
▪ current market value and the source of the valuation.

2. For investments placed in the State of California’s Local Agency Investment Fund; in FDIC-insured or fully collateralized demand deposit accounts, savings accounts, market rate accounts, time certificates of deposits, and other types of bank deposits in financial institutions located in California; in a county investment pool; or any combination of these, the Director of Finance may provide the City Manager and City Council the most recent statement or statements received from these

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
5 institutions in lieu of the information required by subsection 1 regarding investments in these institutions.

3. The quarterly report also shall (a) state compliance of the portfolio to the statement of Investment Policy, or manner in which the portfolio is not in compliance; (b) include a description of any of the City's funds, investments, or programs that are under the management of contracted parties, including lending programs; and (c) include a statement denoting the ability of the City to meet its expenditure requirements for the next six months, or provide an explanation as to why sufficient money shall, or may, not be available.

C. The Investment Policy shall be reviewed at least annually and, as necessary, adopted by the City Council to ensure its consistency with the overall objectives of safety, liquidity, and return, as well as its relevance to current law and financial and economic trends. 12) QUALIFIED BROKER DEALERS
Whenever practical, a competitive bid process will be used for the purchase and sale of investments. It shall be the City’s policy to execute investment transactions only with broker/dealers and financial institutions deemed eligible by the Director of Finance or the City's Investment Advisor if applicable, will be used to place all investment purchases. 13) AUTHORIZED INVESTMENTS
All investments shall be made in accordance with Government Code Sections 16429.1 et seq. and 53600 et seq. Within the investments permitted by the Government Code, the City seeks to further restrict eligible investments to the guidelines listed below. In the event a discrepancy is found between this Investment Policy and the Government Code, the more restrictive parameters will take precedence.

Where this section specifies a percentage limitation for a particular category of investment, that percentage is applicable only at the date of purchase. Where this section does not specify a limitation on the term or remaining maturity at the time of the investment, no investment shall be made in any security, other than a security underlying a repurchase agreement authorized by this section, that at the time of the investment has a term remaining to maturity in excess of five (5) years. Any investment held at the time this Investment Policy is adopted which does not meet the new policy guidelines may be held until maturity and shall be exempt from the current policy. At the time of the investment’s maturity or liquidation, such funds shall be reinvested only as provided in the current policy.

A. United States Treasury, notes, bonds, bills, or certificates of indebtedness, or those for which the full faith and credit of the United States are pledged for the payment of principal and interest.

B. Federal agency or United States government-sponsored enterprise obligations, participations, or other instruments, including those issued by or fully guaranteed as to

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
6 principal and interest by federal agencies or United States government-sponsored enterprises. No more than 40% of the City's portfolio may be invested in any one federal agency.

C. Registered state warrants or treasury notes or bonds of the State of California, including bonds payable solely out of revenues from a revenue-producing property owned, controlled, or operated by the state or by a department, board, agency, or authority of the state. The securities must be rated in a rating category of “A” or its equivalent or higher by a nationally recognized statistical rating organization (NRSRO).

D. Registered treasury notes or bonds of any of the other 49 states in addition to California, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by a state or by a department, board, agency, or authority of any of the other 49 states, in addition to California. The securities must be rated in a rating category of “A” or its equivalent or higher by a NRSRO.

E. Bonds, notes, warrants, or other evidences of indebtedness of a local agency within this state, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by the local agency, or by a department, board, agency, or authority of the local agency. The securities must be rated in a rating category of “A” or its equivalent or higher by a NRSRO.

F. Repurchase Agreements collateralized with securities authorized under Government Code, maintained at a level of at least 102% of the market value of the repurchase agreement.

There are no limits on the dollar amount or percentage that the City may invest, provided that:
▪ securities used as collateral for repurchase agreements will be delivered to an acceptable third-party custodian;
▪ repurchase agreements are subject to a master repurchase agreement between the City and the provider of the repurchase agreement. The master repurchase agreement will be substantially in the form developed by the Securities Industry and Financial Markets Association (SIFMA);
▪ the maximum maturity does not exceed ninety-two days.

G. Reverse repurchase agreements or securities lending agreements may be utilized only when all the following conditions are met:

1. the security to be sold on reverse repurchase agreement or securities lending agreement has been owned and fully paid for by the City for a minimum of 30 days prior to sale;

2. the total of all reverse repurchase agreements and securities lending agreements on investments owned by the City does not exceed 20 percent of the market value of the portfolio;

3. the agreement does not exceed a term of 92 days, unless the agreement includes a written codicil guaranteeing a minimum earning or spread for the entire period

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
7 between the sale of a security using a reverse repurchase agreement or securities lending agreement and the final maturity date of the same security;

4. funds obtained or funds within the pool of an equivalent amount to that obtained from selling a security to a counterparty by way of a reverse repurchase agreement or securities lending agreement shall not be used to purchase another security with a maturity longer than 92 days from the initial settlement date of the reverse repurchase agreement or securities lending agreement, unless the reverse repurchase agreement or securities lending agreement includes a written codicil guaranteeing a minimum earning or spread for the entire period between the sale of a security using a reverse repurchase agreement or securities lending agreement and the final maturity date of the same security.

Investments in reverse repurchase agreements, securities lending agreements, or similar investments in which the City sells securities prior to purchase with a simultaneous agreement to repurchase the security may only be made upon prior approval of the City Council and shall only be made with primary dealers of the Federal Reserve Bank of New York or with a nationally or state-chartered bank that has or has had a significant banking relationship with the City. The City may not invest more than 20% of its portfolio in reverse repurchase agreements and must always match its maturities to the reinvestment.

H. Bankers’ acceptances, otherwise known as bills of exchange or time drafts, that are drawn on and accepted by a commercial bank. Purchases of bankers' acceptances shall not exceed 180 days’ maturity or 40% of the City’s surplus moneys that may be invested pursuant to this section. However, no more than 30% of the City’s surplus moneys may be invested in the bankers’ acceptances of any one commercial bank. Eligible bankers' acceptances are restricted to issuing financial institutions with short-term paper rated in a rating category of “A-1” or its equivalent or higher by one NRSRO or long-term debt obligations rated in a rating category of “A” or its equivalent or higher by a NRSRO.

I. Commercial paper of “prime” quality of the highest ranking or of the highest letter and number rating as provided for by a NRSRO. The entity that issues the commercial paper shall meet all the following conditions in either paragraph (1) or paragraph (2) below:

1. The entity meets the following criteria: (a) is organized and operating in the United States as a general corporation, (b) has total assets in excess of five hundred million dollars ($500,000,000), and (c) has debt other than commercial paper, if any, rated in a rating category of “A” or its equivalent or higher by a NRSRO.

2. The entity meets the following criteria: (a) is organized within the United States as a special purpose corporation, trust, or limited liability company, (b) has programwide credit enhancements, including, but not limited to, overcollateralization, letters of credit, or surety bonds. (c) has commercial paper rated “A-1” or its equivalent or higher by a NRSRO.

Eligible commercial paper shall have a maximum maturity of 270 days or less. The City may invest no more than 25% of its surplus moneys that may be invested pursuant to this

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
8 section in eligible commercial paper, and the City may invest no more than 10% of its total investment assets in the commercial paper and the medium-term notes of any single issuer.

Under a provision sunsetting on January 1, 2026, no more than 40% of the City’s surplus moneys may be invested in commercial paper if the City’s investment assets under management are greater than $100,000,000. The City may invest no more than 5% of its total investment assets in any single issuer.

J. Medium-term notes issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States. Notes eligible for investment under this subsection must be rated in a rating category of “A” or its equivalent or higher by a NRSRO. Purchases of mediumterm notes shall not exceed 30% of the City’s surplus moneysthat may be invested pursuant to this section, and the City may invest no more than 10% of its total investment assets in the commercial paper and the medium-term notes of any single issuer.

K. FDIC-insured or fully collateralized demand deposit accounts, savings accounts, market rate accounts, time certificates of deposits (TCDs) and other types of bank deposits in financial institutions located in California. The amount on deposit in any financial institution shall not exceed the shareholder’s equity. To be eligible to receive City deposits, the financial institution must have received a minimum overall satisfactory rating, under the Community Redevelopment Act, for meeting the credit needs of California Communities in its most recent evaluation. Bank deposits are required to be collateralized as specified under Government Code Section 53630 et. seq. The Treasurer, at his/her discretion, may waive the collateralization requirements for any portion that is covered by federal deposit insurance. The City shall have a signed agreement with any depository accepting City funds per Government Code Section 53649. There is no limit on the percentage of the portfolio that may be invested in bank deposits. However, a maximum of 30 percent of the portfolio may be invested in TCDs.

L. Negotiable Certificates of Deposit issued by a nationally- or state-chartered bank or a state or federal savings and loan association, a state or federal credit union, or by a federally- or state-licensed branch of a foreign bank. Amounts of negotiable certificates of deposit insured up to the FDIC limit do not require a credit rating. Any amount above the FDIC insured limit must be issued by institutions with short-term debt obligations rated in a rating category of “A-1” or its equivalent or higher by at least one NRSRO, or long-term obligations rated in a rating category of “A” or its equivalent or higher by a NRSRO.

Purchases of negotiable certificates of deposit shall not exceed 30% of the City's surplus moneys that may be invested pursuant to this section.

M. Certificates of deposit placed through a deposit placement service that meet the requirements under Government Code Section 53601.8. The full amount of each deposit placed and the interest that may accrue on each such deposit shall at all times be insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration.

Purchases of certificates of deposit placed through a deposit placement service shall not, in total, exceed 30 percent of the City’s surplus moneys that may be invested pursuant to this section.

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
9 N. State of California’s Local Agency Investment Fund (LAIF). Investment in LAIF may not exceed the amount permitted by LAIF.

O. Shares of beneficial interest issued by a joint powers authority organized pursuant to Government Code Section 6509.7 that invests in the securities and obligations authorized in this section. Each share shall represent an equal proportional interest in the underlying pool of securities owned by the joint powers authority. To be eligible under this section, the joint powers authority issuing the shares shall have retained an investment adviser that meets all of the following criteria:

1. The adviser is registered or exempt from registration with the Securities and Exchange Commission.

2. The adviser has not less than five years of experience investing in the securities and obligations authorized in this section.

3. The adviser has assets under management in excess of five hundred million dollars ($500,000,000)
The underlying pool of securities of which the shares are purchased must be rated in a rating category of “AAAm” or its equivalent or higher by a NRSRO.

P. Shares of beneficial interest issued by diversified management companies that are money market funds registered with the SEC under the Investment Company Act of 1940 (15 USC Sec. 80a-1, et seq.). The purchase price of shares shall not exceed 20 percent of the investment portfolio of the City. To be eligible for investment pursuant to this subdivision, these companies shall have either:

1. attained the highest-ranking letter or numerical rating provided by not less than two of the three largest NRSRO or

2. retained an investment advisor registered or exempt from registration with the SEC with not less than five years’ experience managing money market mutual funds and with assets under management in excess of $500,000,000.

Q. A mortgage pass-through security, collateralized mortgage obligation, mortgage-backed or other pay-through bond, equipment lease-backed certificate, consumer receivable passthrough certificate, or consumer receivable-backed bond. Securities eligible for investment under this subsection shall be rated in a rating category of “AA” or its equivalent or higher by an NRSRO. Purchase of securities authorized by this subsection shall not exceed 20 % of the City’s surplus moneys that may be invested pursuant to this section. The City may invest no more than 5% of its total investment assets in the asset-backed or commercial mortgage security of any single issuer.

R. Supranational obligations. Issues must be United States dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, International Finance Corporation, or Inter-American Development Bank and eligible for purchase and sale

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
10 within the United States. The securities must be rated in a rating category of “AA” or its equivalent or higher by a NRSRO. No more than 30% of the City’s surplus moneys that may be invested pursuant to this section may be invested in this category. The City may invest no more than 10% of its total investment assets in the supranational obligations of any single issuer.
14) PROHIBITED INVESTMENTS
Any security type or structure not specifically approved by this policy is hereby specifically prohibited. Security types which are thereby prohibited include, but are not limited to, inverse floaters, derivatives, range notes, interest only strips that are derived from a pool of mortgages, or in any investment that could result in zero interest accrual if held to maturity. Under a provision sunsetting on January 1, 2026, securities backed by the US Government that could result in a zero- or negative-interest accrual if held to maturity are permitted. Trading securities for the sole purpose of speculating on the future direction of interest rates is prohibited.

Purchasing or selling securities on margin is prohibited. The use of reverse repurchase agreements, securities lending or any other form of borrowing or leverage is prohibited. The purchase of foreign currency denominated securities is prohibited. Local governments that are not Qualified Institutional Buyers (QIB) as defined by the SEC are prohibited from purchasing Private Placement Securities. The SEC defines a QIB as having at least $100,000,000 in securities owned and invested.
15) INVESTMENT OF BOND PROCEEDS
Bond proceeds shall be invested in the securities permitted by the applicable bond documents. If the bond documents are silent as to the permitted investments, bond proceeds will be invested in the securities permitted by this policy. Notwithstanding the other provisions of this policy, the percentage or dollar portfolio limitations listed in elsewhere in this policy do not apply to bond proceeds. In addition to the securities listed in this Policy, bond proceeds may be invested in a structured investment product if approved by the Director of Finance.
16) LEGISLATIVE CHANGES
Any State of California legislative action that further restricts allowable maturities, investment type or percentage allocations will be deemed to be incorporated into the City of Salinas’s investment policy and will supersede any and all applicable language. 17) INTEREST EARNINGS
All moneys earned and collected from investments authorized in this policy shall be allocated monthly to various fund accounts based on the pooled cash balance in each fund as a percentage of the entire pooled portfolio.
11 Glossary
Agency: Federal agency securities and /or
Government-sponsored enterprises.

Bankers’ Acceptance (BA): A draft or bill
or exchange accepted by a bank or trust
company. The accepting institution
guarantees payment of the bill, as well as the
issuer.

Broker: A broker brings buyers and sellers
together for a commission.

California Local Government Debt: Is
bonds, notes, warrants, or other evidences of
indebtedness of any local agency within
California. California local government
debt is a permitted investment under the
California Government Code. The
Government Code does not specify
minimum credit ratings for local
government debt in which local agencies
may invest.

Certificate of Deposit (CD): A time
deposit with a specific maturity evidenced
by a certificate. Large-denomination CD’s
are typically negotiable.

Collateral: Securities, evidence of deposit
of other property which a borrower pledges
to secure repayment of a loan. Also refers to
securities pledged by a bank to secure
deposits of public monies.

Annual Comprehensive Financial Report
(ACFR): The official annual report for the
City of Salinas. It includes five combine
statements for each individual fund and
account group prepared in conformity with
GAAP. It also includes supporting
schedules necessary to demonstrate
compliance with finance-related legal and
contractual provisions, extensive
introductory material, and a detailed
Statistical Section.

Coupon: (a) The annual rate of interest that
a bond’s issuer promises to pay the
bondholder on the bond’s face value. (b) A
certificate attached to a bond evidencing
interest due on a payment date.

Dealer: A dealer, as opposed to a broker,
acts as a principal in all transactions, buying
and selling for his own account.

Debenture: A bond secured only by the
general credit of the issuer.

Delivery versus Payment: There are two
methods of delivery of securities: delivery
versus payment and delivery versus receipt.

Delivery versus payment is delivery of
securities with an exchange of money for the
securities. Delivery versus receipt is
delivery of securities with an exchange of a
signed receipt for the securities.

Derivatives: (1) Financial instruments
whose return profile is linked to, or derived
from, the movement of one or more
underlying index or security, and may
include a leveraging factor, or (2) financial
contracts based upon notional amounts
whose value is derived from an underlying
index or security (interest rates, foreign
exchange rates, equities or commodities).

Discount: The difference between the cost
price of a security and its maturity when
quoted at lower than face value. A security
selling below original offering price shortly
after sale also is considered to be at a
discount.

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
12 Diversification: Dividing investment funds
among a variety of securities offering
independent returns.

Federal Credit Agencies: Agencies of the
Federal government set up to supply credit
to various classes of institutions and
individuals, e.g., S&L’s, small business
firms, students, farmers, farm cooperatives,
and exporters.

Federal Deposit Insurance Corporation
(FDIC): A federal agency that insures bank
deposits, currently up to $250,000 per
deposit.

Federal Funds Rate: The rate of interest at
which Fed funds are traded. This rate is
currently pegged by the Federal Reserve
through open-market operations.

Federal Home Loan Banks (FHLB):

Government sponsored wholesale banks
(currently 12 regional banks) which lend
funds and provide correspondent banking
services to member commercial banks, thrift
institutions, credit unions and insurance
companies. The mission of the FHLB is to
liquefy the housing related assets of its
members who must purchase stock in their
district Bank.

Federal National Mortgage Association
(FNMA): FNMA, like GNMA was
chartered under the Federal National
Mortgage Association Act in 1938. FNMA
is a federal corporation working under the
auspices of the Department of Housing and
Urban Development (HUD). It is the largest
single provider of residential mortgage
funds in the United States. Fannie Mae, as
the corporation is called, is a private
stockholder-owned corporation. The
corporation’s purchases include a variety of
adjustable mortgages and second loans, in
addition to fixed-rate mortgages. FNMA’s
securities are also highly liquid and are
widely accepted. FNMA assumes and
guarantees that all security holders will
receive timely payment of principal and
interest.

Federal Open Market Committee
(FOMC): Consists of seven members of
the Federal Reserve Board and five of the
twelve Federal Reserve and Presidents. The
President of the New York Federal Reserve
Bank is a permanent member, while the
other Presidents serve on a rotating basis.

The Committee periodically meets to set
Federal Reserve guidelines regarding
purchases and sales of Government
Securities in the open market as a means of
influencing the volume of bank credit and
money.

Federal Reserve System: The central bank
of the United States created by Congress and
consisting of a seven-member Board of
Governors in Washington, D.C., 12 regional
banks and about 5,700 commercial banks
that are members of the system.

Government National Mortgage
Association (GNMA or Ginnie Mae):

Securities influencing the volume of bank
credit guaranteed by GNMA and issued by
mortgage bankers, commercial banks,
savings and loan associations, and other
institutions. Security holder is protected by
full faith and credit of the US Government.

Ginnie Mae securities are backed by the
FHA, VA or FmHA mortgages. The term
“pass-throughs” is often used to describe
Ginnie Maes.

Issuer: Any corporation, government unit
or financial institution which borrows
money through the sale of securities.

Liquidity: A liquid asset is one that can be
converted easily and rapidly into cash

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
13 without a substantial loss of value. In the
money market, a security is said to be liquid
if the spread between bid and asked prices is
narrow and reasonable size can be done at
those quotes.

Local Agency Investment Fund (LAIF):

A special fund in the State Treasury which
local agencies may use to deposit funds for
investment. All interest is distributed to
those agencies participating on a
proportionate share determined by the
amounts deposited and the length of time
they are deposited. Interest is paid quarterly
via direct deposit to the LAIF account. The
State keeps an amount for reasonable costs
of making the investments, not to exceed
one-quarter of one per cent of the earnings.

Local Government Investment Pool
(LGIP): The aggregate of all funds from
political subdivisions that are pooled
together for investment and reinvestment.

Market Value: The price at which a
security is trading and could presumably be
purchased or sold.

Master Repurchase Agreement: A written
contract covering all future transactions
between the parties to repurchase – reverse
repurchase agreements that establishes each
party’s rights in the transactions. A master
agreement will often specify, among other
things, the right of the buyer-lender to
liquidate the underlying securities in the
event of default by the seller-borrower.

Maturity: The date upon which the
principal or stated value of an investment
becomes due and payable.

Money Market: The market in which
short-term debt instruments (bills,
commercial paper, bankers’ acceptances,
etc.) are issued and traded.

Mutual Funds: Referred to in the
Government Code, Section 53601(l) as
“shares of beneficial interest issued by
diversified management companies.” The
Mutual Fund must be restricted by its bylaws to the same investments as the local agency by the Government Code. These
investments are Treasury issues, Federal
Agency issues, State of California and City
(within California) debt obligations, Bankers
Acceptances, Commercial Paper,
Certificates of Deposit, Negotiable
Certificates of Deposit, Repurchase
Agreements, Reverse Repurchase
Agreements, and Medium-Term Corporate
Notes. The quality rating and percentage
restrictions in each investment category
applicable to the local agency also apply to
the Mutual Fund.

Negotiable: Term used to designate a
security, the title to which is transferable by
delivery.

Offer: The price asked by a seller of
securities. (When you are buying securities,
you ask for an offer). See Asked and Bid.

Open Market Operations: Purchases and
sales of government and certain other
securities in the open market by the New
York Federal Reserve Bank as directed by
the FOMC in order to influence the volume
of money and credit in the economy.

Purchases inject reserves into the bank
system and stimulate growth of money and
credit; sales have the opposite effect. Open
market operations are the Federal Reserve’s
most important and most flexible monetary
policy tool.

Portfolio: Collection of securities held by
an investor.

Primary Dealer: A group of government
securities dealers who submit daily reports

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
14 of market activity and positions and monthly
financial statements to the Federal Reserve
Bank of New York and are subject to its
informal oversight. Primary dealers
included Securities & Exchange
Commission (SEC) – registered securities
broker-dealers, banks, and a few unregulated
firms.

Principal: Describes the original cost of a
security. It represents the amount of capital
or money which the investor pays for the
investment.

Prudent Person Rule: An investment
standard. In some states the law requires
that a fiduciary, such as a trustee, may invest
money only in a list of securities selected by
the custody state – the so-called legal list. In
other states the trustee may invest in a
security if it is one which would be bought
by a prudent person of discretion and
intelligence who is seeking a reasonable
income and preservation of capital.

Qualified Public Depositories: A financial
institution which does not claim exemption
from the payment of any sales or
compensating use or ad valorem taxes under
the laws of this state, which has segregated
for the benefit of the commission eligible
collateral having a value of not less than its
maximum liability and which has been
approved by the State to hold public
deposits.

Rate of Return: The yield obtainable on a
security based on its purchase price or its
current market price. This may be the
amortized yield to maturity on a bond the
current income return.

Repurchase Agreement (RP or Repo): A
holder of securities sells these securities to
an investor with an agreement to repurchase
them at a fixed price on a fixed date. The
security “buyer” in effect lends the “seller”
money for the period of the agreement, and
the terms of the agreement are structured to
compensate him for this. Dealers use RP
extensively to finance their positions.

Exception: When the Fed is said to be doing
RP, it is lending money, that is, increasing
bank services.

Safekeeping: A service to customers
rendered by banks for a fee whereby
securities and valuables of all types and
descriptions are held in the bank’s vaults for
protection.

Secondary Market: A market made for the
purchase and sale of outstanding issues
following the initial distribution.

Security: An investment instrument, other
than an insurance policy or fixed annuity,
issued by a corporation, government, or
other organization which offers evidence of
debt or equity.

Securities & Exchange Commission:

Agency created by Congress to protect
investors in securities transactions by
administering securities legislation.

SEC Rule 15C3-1: See Uniform Net
Capital Rule.

Structured Notes: Notes issued by
Government Sponsored Enterprises (FHLB,
FNMA, SLMA, etc.) and Corporations
which have imbedded options (e.g., call
features, step-up coupons, floating rate
coupons, derivative-based returns) into their
debt structure. Their market performance is
impacted by the fluctuation of interest rates,
the volatility of the imbedded options and
shifts in the shape of the yield curve.

Treasury Bills: A non-interest-bearing
discount security issued by the US Treasury

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
15 to finance the national debt. Most bills are
issued to mature in three months, six
months, or one year.

Treasury Notes: Medium-term couponbearing US Treasury securities issued as direct obligations of the US Government and
having initial maturities from two to ten
years.

Uniform Net Capital Rule: Securities &
Exchange Commission (SEC) requirement
that member firms as well as nonmember
broker-dealers in securities maintain a
maximum ratio of indebtedness to liquid
capital of 15 to 1; also called net capital rule
and net capital ratio. Indebtedness covers all
money owed to a firm, including margin
loans and commitments to purchase
securities, one reason new public issues are
spread among member of underwriting
syndicates. Liquid capital includes cash and
assets easily converted into cash.

Yield: The rate of annual income return on
an investment, expressed as a percentage.
(a) Income Yield is obtained by dividing the
current dollar income by the current market
price for the security. (b) Net Yield or
Yield to Maturity is the current income
yield minus any premium above par or plus
any discount from par in purchase price,
with the adjustment spread over the period
from the date of purchase to the date of
maturity of the bond.
16 CITY OF SALINAS

INVESTMENT GUIDELINES AND STRATEGY
I. GUIDELINES - Guidelines are established to direct and control activities in such a manner that previously established goals are achieved.

1. Investment Transaction. Every investment transaction must be authorized and reviewed by the Director of Finance or his/her designee.

2. Pooled Cash. Whenever practical, local agency cash is consolidated into one bank account and invested on a pooled concept basis. Interest earnings are allocated monthly according to month-end cash and investment balances for each fund.

3. Competitive Bids. Purchase and sales of securities are made on the basis of competitive offers and bids when practical.

4. Cash Forecast. The cash flow for the City is analyzed with the receipt of revenues and maturity of investments scheduled so that adequate cash will be available to meet disbursement requirements.

5. Investment Limitations. Security purchases and holdings are maintained within statutory limits imposed by the California Government Code. Current limits are:

Bankers’ Acceptances 40% Section 53601(f)
Commercial Paper 25% Section 53601(g)
Negotiable Certificates of Deposit 30% Section 53601(h) Medium Term Notes 30% Section 53601(j)
Money Market Mutual Funds 20% Section 53601(k)
Asset-Backed/Mortgage-Backed Securities 20% Section 53601(n) Federal Agency restriction 60% per Agency Section 14 of Policy Local Agency Investment Fund $50,000,000 per Section 14 of Policy CAMP no limit per Section 14 of Policy
Portfolio Maturing within one year 20% per Section 14 of Policy

6. Liquidity. The marketability of a security is considered at the time of purchase, as the security may have to be sold at a later date to meet unanticipated cash demands.

7. Diversification. The portfolio should consist of a mix of various types of securities, issuers, and maturities.
17 CITY OF SALINAS

INVESTMENT GUIDELINES AND STRATEGY
(Continued)
II. STRATEGY - Strategy refers to the ability to manage financial resources in the most advantageous manner.

1. Economic Forecasts. Economic Forecasts are obtained periodically from economists and financial experts through bankers and brokers to assist the Director of Finance or his/her designee with the formulation of an investment strategy for the local agency.

2. Implementing Investment Strategy. Investment transactions are executed which conform with anticipated interest rate trends and the current investment strategy plan.

3. Rapport. A close working relationship is maintained with large vendors of the city. The objective is to pinpoint when large disbursements will clear the city's bank account. It is essential for good cash control that such large expenditures be anticipated, estimated as to dollar amount, and communicated to the Director of Finance or his/her designee for liquidity planning purposes.

4. Preserve Portfolio Value. Field standards are developed in order to maintain earnings near the market and to preserve the value of the portfolio. 18 CITY OF SALINAS

INVESTMENT PROCEDURES

INTERNAL CONTROL - GUIDELINES

OBJECTIVES OF INTERNAL CONTROL
Internal control is the plan of organization and all the related systems established by the management's objective of ensuring, as far as practicable:
 The orderly and efficient conduct of its business, including adherence to management policies.  The safeguarding of assets.
 The prevention or detection of errors and fraud.
 The accuracy and completeness of the accounting records.  The timely preparation of reliable financial information.

LIMITATIONS OF INTERNAL CONTROL
No internal control system, however elaborate, can by itself guarantee the achievement of management's objectives. Internal control can provide only reasonable assurance that the objectives are met, because of its inherent limitations, including:
 Management's usual requirement that a control be cost-effective.  The direction of most controls at recurring, rather than unusual, types of transactions.  Human error due to misunderstanding, carelessness, fatigue, or distraction.  Potential for collusion that circumvents controls dependent on the segregation of functions.  Potential for a person responsible for exercising control abusing that responsibility; a responsible staff member could be in a position to override controls which management has set up.
19 CITY OF SALINAS

INVESTMENT PROCEDURES

INTERNAL CONTROL - GUIDELINES
(Continued)

ELEMENTS OF INTERNAL CONTROL
Elements of a system of internal control are the means by which an organization can satisfy the objectives of internal control. These elements are:

1. ORGANIZATION
Specific responsibility for the performance of duties should be assigned and lines of authority and reporting clearly identified and understood.

2. PERSONNEL
Personnel should have capabilities commensurate with their responsibilities. Personnel selection and training policies together with the quality and quantity of supervision are thus important.

3. SEGREGATION OF FUNCTIONS
Segregation of incompatible functions reduces the risk that a person is in a position both to perpetrate and conceal errors or fraud in the normal course of duty. If two parts of a transaction are handled by different people, collusion is necessary to conceal errors or fraud.

In particular, the functions that should be considered when evaluating segregation of functions are authorization, execution, recording, custody of assets, and performing reconciliations.

4. AUTHORIZATION
All transactions should be authorized by an appropriate responsible individual. The responsibilities and limits of authorization should be clearly delineated. The individual or group authorizing a specific transaction or granting general authority for transactions should be in a position commensurate with the nature and significance of the transactions. Delegation of authority to authorize transactions should be handled very carefully.

5. CONTROLS OVER AN ACCOUNTING SYSTEM
Controls over an accounting system include the procedures, both manual and computerized, carried out independently to ascertain that transactions are complete, valid, authorized, and properly recorded.
20 CITY OF SALINAS

CASH CONTROLS

PROCEDURES PERFORMED BY EXTERNAL AUDITORS WITH RESPECT TO CASH

RECEIPTS
A. City procedures and controls are reviewed. Some of the system strengths are:

1. Receipts are controlled upon receipt by proper registration devices.

2. Receipts are reconciled on a daily basis.

3. Amounts batched and deposited intact.

4. Bank reconciliations are reviewed.

5. Prompt posting of cash receipt entries in books.

6. Proper approval required for write-offs of customer accounts.

7. Checks are restrictively endorsed upon receipt or when run through cash register.

8. Adequate physical security over cash.

9. Individuals that handle cash do not post to customer account records or process billing statements.

10. Adequate supervision of Finance Department operations.

B. Significant revenues are confirmed directly with payer and compared with City books to make sure amounts are recorded properly.

C. Cash balances are substantiated by confirming all account balances recorded in books. Bank reconciliations are reviewed for propriety and recalculated by the auditor. All significant reconciling items on bank reconciliations are verified as valid reconciling items by proving to subsequent bank statements.
21 CITY OF SALINAS

SEGREGATION OF RESPONSIBILITIES OF

THE TREASURY FUNCTIONS
Function Responsibility

1. Formal Investment Policy should be:

Prepared By: Director of Finance
Approved By: City Council

2. Develop Investment Strategy Director of Finance or Registered Investment Advisor

3. Investment Strategy should be Director of Finance
approved by

4. Execution of investment transactions:

Investments other than LAIF and Deposits Director of Finance or Registered Investment Advisor
Execution of LAIF and Deposit transfers Accounting Manager

5. Timely recording of investment transactions:

Recording of investment transactions Senior Accountant
in the City's accounting records (but reviewed by Accounting Manager)

6. Verification of investment, Senior Accountant
i.e., match broker confirmation to City's records

7. Confirmation of LAIF and Bank Wires Assistant Director of Finance

8. Safeguarding of Assets and Records:

Reconciliation of City's Senior Accountant
records to bank statements and (but reviewed by Assistant safekeeping records Director of Finance)
22 CITY OF SALINAS

SEGREGATION OF RESPONSIBILITIES OF

THE TREASURY FUNCTIONS
(Continued)
Function Responsibility

8. Safeguarding of Assets and Records
(continued):

Annual review of (a) financial Director of Finance or Registered institution's financial condition, Investment Advisor
(b) safety, liquidity, and potential
yields of investment instruments.

9. No less than an annual Independent Auditors
review of investment
portfolio as prepared by
Senior Accountant and reviewed by
Director of Finance
1 CITY OF SALINAS

ANNUAL INVESTMENT POLICY
1) PURPOSE
The purpose of this document is to set out policies and procedures that enhance opportunities for a prudent and systematic investment policy and to organize and formalize investment-related activities.

The investment policies and practices of the City of Salinas (the “City”) are, in every case, subject to and limited by applicable provisions of state law and to prudent money management principles. All funds will be invested in accordance with the City’s Investment Policy, and applicable provisions of Chapter 4 of Part 1 of Division 2 of Title 5 of the California Government Code (Section 53600 et seq.). The investment of bond proceeds must also meet the provisions of relevant bond documents. 2) SCOPE
It is intended that this policy cover all short-term operating funds and investment activities of the City and Redevelopment Agency. These funds are accounted for in the annual audit report, and includes:
 General Fund
 Special Revenue Funds
 Debt Service Funds
 Capital Projects Funds
 Enterprise Funds
 Internal Service Funds
 Fiduciary Funds
This investment policy applies to all City and Successor Agency transactions involving the financial assets and related activity of the above-mentioned funds. Any additional funds that may be created from time to time shall also be administered with the provisions of this policy and comply with the California Government Code.

The City will consolidate cash and reserve balances from all funds to maximize investment earnings and to increase efficiencies with regard to investment pricing, safekeeping and administration. Investment income will be allocated to the various funds based on their respective participation and in accordance with generally accepted accounting principles.

Attachment A

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
2 3) OBJECTIVES
The City has a fiduciary responsibility to maximize the productive use of all the assets entrusted to its care and to invest and manage those public funds wisely and prudently. As such, the City shall strive to maintain the level of investment of all idle funds as near 100% as possible through daily and projected cash flow determinations, investing in those investment vehicles deemed prudent and allowable under current legislation of the State of California and the ordinances of the City of Salinas.

The investment of the funds of the City of Salinas is directed to the goals of, in order of priority, safety, liquidity and yield.

Safety of principal is the foremost objective of the City. Each investment transaction shall seek to ensure that capital losses are limited. However, it is recognized that market prices of securities will vary depending on economic and interest rate conditions at any point in time. It is further recognized, that in a well-diversified investment portfolio, occasional measured losses are inevitable due to security sales, economic, bond market, or individual security credit analysis. These occasional losses must be considered within the context of the overall investment program objectives and the resultant long-term rate of return.

The City's investment portfolio will remain sufficiently liquid to enable the City to meet all operating requirements which might be reasonably anticipated.

An amount of money deemed sufficient to meet one payroll and two weeks claims shall be maintained in highly liquid investment vehicles such as the State Local Agency Investment Fund, or other similar investment instrument
The City’s investment portfolio shall be managed to attain a market average rate of return throughout budgetary and economic cycles, taking into account the City's investment risk constraints and cash flow requirements, and state and local law, ordinances or resolutions that restrict the placement of short term funds.
4) PRUDENT INVESTOR STANDARD
In managing its investment program, the City will observe the “Prudent Investor” standard as stated in Government Code Section 53600.3, applied in the context of managing an overall portfolio. Investments will be made with care, skill, prudence and diligence, taking into account the prevailing circumstances, including, but not limited to general economic conditions, the anticipated needs of the City and other relevant factors that a prudent person acting in a fiduciary capacity and familiar with those matters would use in the stewardship of funds of a like character and purpose.

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
3 5) PERFORMANCE EVALUATION
Investment performance is to be continually monitored and evaluated by the Finance Director. The City’s primary portfolio performance will be measured against an objective index with similar attributes to the City’s portfolio.
6) DELEGATION OF AUTHORITY
The City Council has delegated investment authority for a one-year period to the Director of Finance pursuant to Section 46 of the City Charter and Chapter 12 of the City Code.

This delegation is further authorized by Section 53600, et seq. of the Government Code of the State of California, which specifies the various permissible investment vehicles, collateralization levels, portfolio limits, and reporting requirements. Subject to review, the City Council may renew the delegation of authority each year.

No person may engage in an investment transaction except as provided under the terms of the policy and the procedures established by the Finance Director. Portfolio management and transactions may be delegated to an independent investment advisor registered with the SEC. The advisor shall follow the investment policy, herein stated, and such other written instructions as are provided.

The Treasurer and the delegated investment officers, acting in accordance with written procedures and the investment policy and exercising due diligence, shall be relieved of personal responsibility for an individual security’s credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments.
7) ETHICS AND CONFLICTS OF INTEREST
Officers and employees involved in the investment process shall refrain from personal business activity that conflicts with proper executions of the investment program, or impairs their ability to make impartial investment decisions. Additionally, the City Officials are required to annually file applicable financial disclosures as required by the Fair Political Practices Commission (FPPC).
8) SAFEKEEPING AND CUSTODY
To protect against fraud or embezzlement of losses caused by collapse of an individual securities dealer, securities owned by the City shall be held in safekeeping by a third party bank / trust department.

All security transactions entered into by the City of Salinas shall be conducted on deliveryversus-payment (DVP) basis. All securities purchased or acquired shall be delivered to

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
4 the City of Salinas by book entry, physical delivery, or by third party custodial agreement as required by CGC 53601.

All exceptions to this safekeeping policy must be approved by the City Manager in written form and included in monthly reporting to the City Council.

The only exception to the foregoing shall be depository accounts and securities purchases made with: (i) LAIF and other LGIPs; (ii) non-negotiable certificates of deposit, and, (iii) money market mutual funds, since the purchased securities are not deliverable. Evidence of each these investments will be held by the City.
9) DIVERSIFICATION
The City of Salinas will diversify its investments by security type and institution. It is the policy of the City of Salinasto diversify its investment portfolio. Assets shall be diversified to reduce the risk of loss resulting from over concentration of assets in a specific maturity, a specific issuer, or a specific class of securities. Diversification strategies shall be determined and revised periodically and approved by the City Manager and the City Council. In establishing specific diversification strategies, the following general policies and constraints shall apply:
(a) Maturities selected shall provide for stability of income and liquidity. (b) Disbursement and payroll dates shall be covered through maturity investments and marketable securities.
10) INTERNAL CONTROL
The Finance Director shall establish a system of written internal controls to regulate the City’s investment activities, including the activities of any subordinate officials acting on behalf of the City.

The investment portfolio and all related transactions are reviewed and balanced to appropriate general ledger accounts by the Finance Staff on a monthly basis.

An independent analysis by the City’s external auditor shall be conducted annually as part of the annual audit to review internal control, account activity, and compliance with the Government Code and with policies and procedures and reported to City Council. 11) REPORTING
The Finance Director will submit to City Council a monthly quarterly of investment transactions.

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
5 Every quarter, the Finance Director shall render to the City Manager and City Council an investment report, which shall include, at a minimum, the following information for each individual investment:
 Type of investment instrument (i.e., Treasury Bill, medium term note);  Issuer name (i.e., General Electric Credit Corporation);  Credit rating, if any, by a Nationally Recognized Statistical Rating Organization  Purchase date (trade and settlement date);
 Maturity date;
 Par value;
 Purchase price;
 Current market value and the source of the valuation;  Overall portfolio yield based on cost.

The quarterly report also shall (a) state compliance of the portfolio to the statement of investment policy, or manner in which the portfolio is not in compliance; (b) include a description of any of the City's funds, investments, or programs that are under the management of contracted parties, including lending programs; and (c) include a statement denoting the ability of the City to meet its expenditure requirements for the next six months, or provide an explanation as to why sufficient money shall, or may, not be available. 12) QUALIFIED BROKER DEALERS
Whenever practical, a competitive bid process will be used for the purchase and sale of investments. It shall be the City’s policy to execute investment transactions only with broker/dealers and financial institutions deemed eligible by the Finance Director or the City's Investment Advisor if applicable, will be used to place all investment purchases. 13) AUTHORIZED INVESTMENTS
Investment of City funds is governed by the California Government Code sections 53601 et seq. Percentage holding limits listed in this section apply at the time the security is purchased. Ratings, where shown, specify the minimum credit rating category required at purchased without regard to +/- or 1,2,3 modifiers, if any. In the event a security held by the City is subject to a credit rating change that brings it below the minimum credit ratings specified in this policy, the Finance Director should notify the City Council of the change.

The course of action to be followed will then be decided on a case-by-case basis, considering such factors as the reason for the change, prognosis for recovery or further rate drops, and the market price of the security.

The City shall strive to maintain the level of investment of all idle funds as near 100% as possible, through daily and projected cash flow determinations. Unless otherwise specified in this section, no investment shall be made in any security, other than a security underlying a repurchase or reverse repurchase agreement as authorized by this section, that at the time

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
6 of the investment has a term remaining to maturity in excess of five years. The Finance Director, or designee, is authorized to purchase the following investment instruments:

Maximum
Permitted Investments/Deposits Percentages Maturity
U.S. Treasury Securities Unlimited 5 Years*
Federal Agency/GSE Securities Unlimited 5 Years*
California Municipal Securities Unlimited 5 Years*
Non-California Municipal Securities Unlimited 5 Years*
Repurchase Agreements 20% 92 Days
Reverse Repurchase Agreements 20% 92 Days**
Bankers Acceptances 40% 180 Days
Commercial Paper 25% 270 Days
Medium Term Notes 30% 5 Years
Bank Deposits 100% 5 Years*
Negotiable Certificates of Deposit 30% 5 Years*
Placement Service CDs 30% 5 Years*
LAIF 50 Million*** n/a
California Asset Management Program 100% n/a
Money Market Funds 20% n/a
*Maximum term unless expressly authorized by City Council and within the prescribed time frame for said approval.
**City Council approval is required.
***Limit set by LAIF Governing Board, not the Government Code.

A. U.S. Treasury, notes, bonds, bills, or other certificates of indebtedness, or those for which the full faith and credit of the United States are pledged for the payment of principal and interest.

B. Federal agency or United States government-sponsored enterprise obligations, participation, or other instruments, including those issued by or fully guaranteed as to principal and interest by federal agencies or United States government-sponsored enterprises including debt guaranteed under the FDIC’s Temporary Liquidity Guarantee Program, which is backed by the full faith and credit of the U.S.

Government1. No more than 40% of the City's portfolio may be invested in any one federal agency.

1 The details of the FDIC guarantee are provided in the FDIC’s regulations, 12 CFR Part 370, and at the FDIC’s website http://www.fdic.gov/regulations/resources/TLGP.

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
7 C. Obligations of the State of California or any local agency within the state, including bonds payable solely out of revenues from a revenue producing property owned, controlled or operated by the state or any local agency or by a department, board, agency or authority of the state or any local agency.

D. Registered treasury notes or bonds of any of the other 49 United States in addition to California, including bonds payable solely out of the revenues from a revenueproducing property owned, controlled, or operated by a state or by a department, board, agency, or authority of any of the other 49 United States, in addition to California.

E. Repurchase Agreements. Repurchase agreements are to be used solely as shortterm investments not to exceed 92 days. The City may enter into repurchase agreements with primary government securities dealers rated "A" or better by two nationally recognized statistical rating organization (NRSRO). Counterparties should also have (i) a short-term credit rating in the highest category by a NRSRO; (ii) minimum assets and capital size of $25 billion in assets and $350 million in capital; (iii) five years of acceptable audited financial results; and (iv) a strong reputation among market participants.

The following collateral restrictions will be observed: Only U.S. Treasury securities or Federal Agency securities will be acceptable collateral. All securities underlying repurchase agreements must be delivered to the City's custodian bank versus payment or be handled under a properly executed tri-party repurchase agreement.

The total market value of all collateral for each repurchase agreement must equal or exceed 102% of the total dollar value of the money invested by the City for the term of the investment. For any repurchase agreement with a term of more than one day, the value of the underlying securities must be reviewed on an on-going basis according to market conditions. Market value must also be calculated each time there is a substitution of collateral. Since the market value of the underlying securities is subject to daily market fluctuations, the investments in repurchase agreements shall be in compliance if the value of the underlying securities is brought back up to 102% no later than the next business day.

The City or its trustee shall have a perfected first security interest under the Uniform Commercial Code in all securities subject to repurchase agreement. The City shall have properly executed a Master Repurchase Agreement with each counter party with which it enters into repurchase agreements.

F. Reverse repurchase agreements or securities lending agreements may be utilized only when all of the following conditions are met:

1. The security to be sold on reverse repurchase agreement or securities lending agreement has been owned and fully paid for by the City for a minimum of 30 days prior to sale.

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
8 2. The total of all reverse repurchase agreements and securities lending agreements on investments owned by the City does not exceed 20 percent of the market value of the portfolio.

3. The agreement does not exceed a term of 92 days, unless the agreement includes a written codicil guaranteeing a minimum earning or spread for the entire period between the sale of a security using a reverse repurchase agreement or securities lending agreement and the final maturity date of the same security.

4. Funds obtained or funds within the pool of an equivalent amount to that obtained from selling a security to a counterparty by way of a reverse repurchase agreement or securities lending agreement shall not be used to purchase another security with a maturity longer than 92 days from the initial settlement date of the reverse repurchase agreement or securities lending agreement, unless the reverse repurchase agreement or securities lending agreement includes a written codicil guaranteeing a minimum earning or spread for the entire period between the sale of a security using a reverse repurchase agreement or securities lending agreement and the final maturity date of the same security.

Investments in reverse repurchase agreements, securities lending agreements, or similar investments in which the City sells securities prior to purchase with a simultaneous agreement to repurchase the security may only be made upon prior approval of the City Council and shall only be made with primary dealers of the Federal Reserve Bank of New York or with a nationally or state-chartered bank that has or has had a significant banking relationship with the City. The City may not invest more than 20% of its portfolio in reverse repurchase agreements, and must always match its maturities to the reinvestment.

G. Bills of exchange or time drafts drawn on and accepted by a commercial bank, otherwise known as bankers' acceptances. Purchases of bankers' acceptances may not exceed 180 days' maturity, or 40% of the City's surplus money that may be invested. However, no more than 30% of the City's surplus funds may be invested in the bankers' acceptances of any one commercial bank. Eligible bankers' acceptances are restricted to issuing financial institutions with short-term paper rated in the highest category by one NRSRO.

H. Commercial paper of "prime" quality of the highest ranking or of the highest letter and number rating as provided for by a NRSRO. The entity that issues the commercial paper shall meet all of the following conditions in either paragraph (1) or paragraph (2) below:

1. The entity meets the following criteria: (A) is organized and operating in the United States as a general corporation. (B) has total assets in excess of

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
9 five hundred million dollars ($500,000,000). (C) has debt other than commercial paper, if any, that is rated "A" or higher by a NRSRO.

2. The entity meets the following criteria: (a) is organized within the United States as a special purpose corporation, trust, or limited liability company. (b) Has program wide credit enhancements including, but not limited to, over collateralization, letters of credit, or surety bond. (c) Has commercial paper that is rated "A-1" or higher, or the equivalent, by a NRSRO.

The City may invest no more than 25% of its portfolio in eligible commercial paper, and the City may purchase no more than 10% of the outstanding commercial paper of any single issuer.

I. Medium term notes with a maximum remaining maturity of five years or less issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States. Notes eligible for investment under this subsection must be rated "A" or higher by a NRSRO. Purchases of medium term notes may not exceed 30% of the City's portfolio.

J. FDIC insured or fully collateralized demand deposit accounts, savings accounts, market rate accounts, time certificates of deposits (“TCDs”) and other types of bank deposits in financial institutions located in California. The amount on deposit in any financial institution shall not exceed the shareholder’s equity. To be eligible to receive City deposits, the financial institution must have received a minimum overall satisfactory rating, under the Community Redevelopment Act, for meeting the credit needs of California Communities in its most recent evaluation. Bank deposits are required to be collateralized as specified under Government Code Section 53630 et. seq. The Treasurer, at his/her discretion, may waive the collateralization requirements for any portion that is covered by federal deposit insurance. The City shall have a signed agreement with any depository accepting City funds per Government Code Section 53649. There is no limit on the percentage of the portfolio that may be invested in bank deposits. However, a maximum of 30 percent of the portfolio may be invested in TCDs.

K. Negotiable Certificates of Deposit issued by a nationally or state-chartered bank or a state or federal savings and loan association or by a state-licensed branch of a foreign bank. Purchases of negotiable certificates of deposit, in combination with placement service CDs, may not exceed 30% of the City's portfolio.

L. Certificates of deposit placed through a deposit placement service shall meet the requirements under Government Code Section 53601.8. The full amount of the principal and the interest that may be accrued during the maximum term of each certificate of deposit shall at all times be insured by federal deposit insurance.

Purchased of placement service CDs, in combination with negotiable CDs, may not exceed 30 percent of the City’s portfolio.

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
10 M. State of California's Local Agency Investment Fund (LAIF). Investment in LAIF may not exceed $50 million. Whenever the City has any funds invested in LAIF, a copy of LAIF’s Answer Book shall be maintained on file. In addition, the Finance Director should review the LAIF portfolio periodically.

N. Local Government Investment Pool. Shares of beneficial interest issued by a joint powers authority organized pursuant to Government Code Section 6509.7. To be eligible for purchase, the pool must meet the requirements of California Government Code Section 53601(p), the pool must seek to maintain a stable Net Asset Value (“NAV”), and the pool must rated at least AAAm, or its equivalent, by a NRSRO.

Whenever the City has any funds invested in a LGIP, a copy of the pool’s current information statement shall be maintained on file. In addition, the Finance Director should review the pool’s summary portfolio holdings periodically.

O. Shares of beneficial interest issued by diversified management companies that are money market funds registered with the Securities and Exchange Commission under the Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1, et seq.). The purchase price of shares shall not exceed 20 percent of the investment portfolio of the City. To be eligible for investment pursuant to this subdivision these companies shall either:

1. Attain the highest ranking letter or numerical rating provided by not less than two of the three largest NRSRO or

2. Have an investment advisor registered or exempt from registration with the Securities and Exchange Commission with not less than five years experience managing money market mutual funds and with assets under management in excess of $500,000,000.

Whenever the City has any funds invested in a money market fund, a copy of the money market fund’s current information statement shall be maintained on file. In addition, the Finance Director should review the money market fund’s summary portfolio holdings periodically.

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
11 14) PROHIBITED INVESTMENTS
Any security type or structure not specifically approved by this policy is hereby specifically prohibited. Security types which are thereby prohibited include, but are not limited to, inverse floaters, derivatives, range notes, interest only strips that are derived from a pool of mortgages, or in any investment that could result in zero interest accrual if held to maturity.
15) INVESTMENT OF BOND PROCEEDS
Bond proceeds shall be invested in the securities permitted by the applicable bond documents. If the bond documents are silent as to the permitted investments, bond proceeds will be invested in the securities permitted by this policy. Notwithstanding the other provisions of this policy, the percentage or dollar portfolio limitations listed in elsewhere in this policy do not apply to bond proceeds. In addition to the securities listed in this Policy, bond proceeds may be invested in a structured investment product if approved by the Finance Director.
16) LEGISLATIVE CHANGES
Any State of California legislative action that further restricts allowable maturities, investment type or percentage allocations will be deemed to be incorporated into the City of Salinas’s investment policy and will supersede any and all applicable language. 17) INTEREST EARNINGS
All moneys earned and collected from investments authorized in this policy shall be allocated monthly to various fund accounts based on the pooled cash balance in each fund as a percentage of the entire pooled portfolio.
18) POLICY REVIEW
The City of Salinas’s investment policy shall be adopted by the City Council on an annual basis. This investment policy shall be reviewed at least annually to insure its consistency with the overall objectives of preservation of principal, liquidity and yield, and its relevance to current law and financial and economic trends. Any amendments to the policy shall be forwarded to the City Council for approval.

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
12 Glossary
Agency: Federal agency securities and /or
Government-sponsored enterprises.

Bankers’ Acceptance (BA): A draft or bill
or exchange accepted by a bank or trust
company. The accepting institution
guarantees payment of the bill, as well as the
issuer.

Broker: A broker brings buyers and sellers
together for a commission.

California Local Government Debt: Is
bonds, notes, warrants, or other evidences of
indebtedness of any local agency within
California. California local government
debt is a permitted investment under the
California Government Code. The
Government Code does not specify
minimum credit ratings for local
government debt in which local agencies
may invest.

Certificate of Deposit (CD): A time
deposit with a specific maturity evidenced
by a certificate. Large-denomination CD’s
are typically negotiable.

Collateral: Securities, evidence of deposit
of other property which a borrower pledges
to secure repayment of a loan. Also refers to
securities pledged by a bank to secure
deposits of public monies.

Comprehensive Annual Financial Report
(CAFR): The official annual report for the
City of Salinas. It includes five combine
statements for each individual fund and
account group prepared in conformity with
GAAP. It also includes supporting
schedules necessary to demonstrate
compliance with finance-related legal and
contractual provisions, extensive
introductory material, and a detailed
Statistical Section.

Coupon: (a) The annual rate of interest that
a bond’s issuer promises to pay the
bondholder on the bond’s face value. (b) A
certificate attached to a bond evidencing
interest due on a payment date.

Dealer: A dealer, as opposed to a broker,
acts as a principal in all transactions, buying
and selling for his own account.

Debenture: A bond secured only by the
general credit of the issuer.

Delivery versus Payment: There are two
methods of delivery of securities: delivery
versus payment and delivery versus receipt.

Delivery versus payment is delivery of
securities with an exchange of money for the
securities. Delivery versus receipt is
delivery of securities with an exchange of a
signed receipt for the securities.

Derivatives: (1) Financial instruments
whose return profile is linked to, or derived
from, the movement of one or more
underlying index or security, and may
include a leveraging factor, or (2) financial
contracts based upon notional amounts
whose value is derived from an underlying
index or security (interest rates, foreign
exchange rates, equities or commodities).

Discount: The difference between the cost
price of a security and its maturity when
quoted at lower than face value. A security
selling below original offering price shortly
after sale also is considered to be at a
discount.

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
13 Diversification: Dividing investment funds
among a variety of securities offering
independent returns.

Federal Credit Agencies: Agencies of the
Federal government set up to supply credit
to various classes of institutions and
individuals, e.g., S&L’s, small business
firms, students, farmers, farm cooperatives,
and exporters.

Federal Deposit Insurance Corporation
(FDIC): A federal agency that insures bank
deposits, currently up to $250,000 per
deposit.

Federal Funds Rate: The rate of interest at
which Fed funds are traded. This rate is
currently pegged by the Federal Reserve
through open-market operations.

Federal Home Loan Banks (FHLB):

Government sponsored wholesale banks
(currently 12 regional banks) which lend
funds and provide correspondent banking
services to member commercial banks, thrift
institutions, credit unions and insurance
companies. The mission of the FHLB is to
liquefy the housing related assets of its
members who must purchase stock in their
district Bank.

Federal National Mortgage Association
(FNMA): FNMA, like GNMA was
chartered under the Federal National
Mortgage Association Act in 1938. FNMA
is a federal corporation working under the
auspices of the Department of Housing and
Urban Development (HUD). It is the largest
single provider of residential mortgage
funds in the United States. Fannie Mae, as
the corporation is called, is a private
stockholder-owned corporation. The
corporation’s purchases include a variety of
adjustable mortgages and second loans, in
addition to fixed-rate mortgages. FNMA’s
securities are also highly liquid and are
widely accepted. FNMA assumes and
guarantees that all security holders will
receive timely payment of principal and
interest.

Federal Open Market Committee
(FOMC): Consists of seven members of
the Federal Reserve Board and five of the
twelve Federal Reserve and Presidents. The
President of the New York Federal Reserve
Bank is a permanent member, while the
other Presidents serve on a rotating basis.

The Committee periodically meets to set
Federal Reserve guidelines regarding
purchases and sales of Government
Securities in the open market as a means of
influencing the volume of bank credit and
money.

Federal Reserve System: The central bank
of the United States created by Congress and
consisting of a seven-member Board of
Governors in Washington, D.C., 12 regional
banks and about 5,700 commercial banks
that are members of the system.

Government National Mortgage
Association (GNMA or Ginnie Mae):

Securities influencing the volume of bank
credit guaranteed by GNMA and issued by
mortgage bankers, commercial banks,
savings and loan associations, and other
institutions. Security holder is protected by
full faith and credit of the U.S. Government.

Ginnie Mae securities are backed by the
FHA, VA or FmHA mortgages. The term
“pass-throughs” is often used to describe
Ginnie Maes.

Issuer: Any corporation, government unit
or financial institution which borrows
money through the sale of securities.

Liquidity: A liquid asset is one that can be
converted easily and rapidly into cash

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
14 without a substantial loss of value. In the
money market, a security is said to be liquid
if the spread between bid and asked prices is
narrow and reasonable size can be done at
those quotes.

Local Agency Investment Fund (LAIF):

A special fund in the State Treasury which
local agencies may use to deposit funds for
investment. All interest is distributed to
those agencies participating on a
proportionate share determined by the
amounts deposited and the length of time
they are deposited. Interest is paid quarterly
via direct deposit to the LAIF account. The
State keeps an amount for reasonable costs
of making the investments, not to exceed
one-quarter of one per cent of the earnings.

Local Government Investment Pool
(LGIP): The aggregate of all funds from
political subdivisions that are pooled
together for investment and reinvestment.

Market Value: The price at which a
security is trading and could presumably be
purchased or sold.

Master Repurchase Agreement: A written
contract covering all future transactions
between the parties to repurchase – reverse
repurchase agreements that establishes each
party’s rights in the transactions. A master
agreement will often specify, among other
things, the right of the buyer-lender to
liquidate the underlying securities in the
event of default by the seller-borrower.

Maturity: The date upon which the
principal or stated value of an investment
becomes due and payable.

Money Market: The market in which
short-term debt instruments (bills,
commercial paper, bankers’ acceptances,
etc.) are issued and traded.

Mutual Funds: Referred to in the
Government Code, Section 53601(l) as
“shares of beneficial interest issued by
diversified management companies.” The
Mutual Fund must be restricted by its bylaws to the same investments as the local agency by the Government Code. These
investments are Treasury issues, Federal
Agency issues, State of California and City
(within California) debt obligations, Bankers
Acceptances, Commercial Paper,
Certificates of Deposit, Negotiable
Certificates of Deposit, Repurchase
Agreements, Reverse Repurchase
Agreements, and Medium Term Corporate
Notes. The quality rating and percentage
restrictions in each investment category
applicable to the local agency also apply to
the Mutual Fund.

Negotiable: Term used to designate a
security, the title to which is transferable by
delivery.

Offer: The price asked by a seller of
securities. (When you are buying securities,
you ask for an offer). See Asked and Bid.

Open Market Operations: Purchases and
sales of government and certain other
securities in the open market by the New
York Federal Reserve Bank as directed by
the FOMC in order to influence the volume
of money and credit in the economy.

Purchases inject reserves into the bank
system and stimulate growth of money and
credit; sales have the opposite effect. Open
market operations are the Federal Reserve’s
most important and most flexible monetary
policy tool.

Portfolio: Collection of securities held by
an investor.

Primary Dealer: A group of government
securities dealers who submit daily reports

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
15 of market activity and positions and monthly
financial statements to the Federal Reserve
Bank of New York and are subject to its
informal oversight. Primary dealers
included Securities and Exchange
Commission (SEC) – registered securities
broker-dealers, banks, and a few unregulated
firms.

Principal: Describes the original cost of a
security. It represents the amount of capital
or money which the investor pays for the
investment.

Prudent Person Rule: An investment
standard. In some states the law requires
that a fiduciary, such as a trustee, may invest
money only in a list of securities selected by
the custody state – the so-called legal list. In
other states the trustee may invest in a
security if it is one which would be bought
by a prudent person of discretion and
intelligence who is seeking a reasonable
income and preservation of capital.

Qualified Public Depositories: A financial
institution which does not claim exemption
from the payment of any sales or
compensating use or ad valorem taxes under
the laws of this state, which has segregated
for the benefit of the commission eligible
collateral having a value of not less than its
maximum liability and which has been
approved by the State to hold public
deposits.

Rate of Return: The yield obtainable on a
security based on its purchase price or its
current market price. This may be the
amortized yield to maturity on a bond the
current income return.

Repurchase Agreement (RP or Repo): A
holder of securities sells these securities to
an investor with an agreement to repurchase
them at a fixed price on a fixed date. The
security “buyer” in effect lends the “seller”
money for the period of the agreement, and
the terms of the agreement are structured to
compensate him for this. Dealers use RP
extensively to finance their positions.

Exception: When the Fed is said to be doing
RP, it is lending money, that is, increasing
bank services.

Safekeeping: A service to customers
rendered by banks for a fee whereby
securities and valuables of all types and
descriptions are held in the bank’s vaults for
protection.

Secondary Market: A market made for the
purchase and sale of outstanding issues
following the initial distribution.

Security: An investment instrument, other
than an insurance policy or fixed annuity,
issued by a corporation, government, or
other organization which offers evidence of
debt or equity.

Securities & Exchange Commission:

Agency created by Congress to protect
investors in securities transactions by
administering securities legislation.

SEC Rule 15C3-1: See Uniform Net
Capital Rule.

Structured Notes: Notes issued by
Government Sponsored Enterprises (FHLB,
FNMA, SLMA, etc.) and Corporations
which have imbedded options (e.g., call
features, step-up coupons, floating rate
coupons, derivative-based returns) into their
debt structure. Their market performance is
impacted by the fluctuation of interest rates,
the volatility of the imbedded options and
shifts in the shape of the yield curve.

Treasury Bills: A non-interest bearing
discount security issued by the U.S.

CITY OF SALINAS STATEMENT OF INVESTMENT POLICY
16 Treasury to finance the national debt. Most
bills are issued to mature in three months,
six months, or one year.

Treasury Notes: Medium-term couponbearing U.S. Treasury securities issued as direct obligations of the U.S. Government
and having initial maturities from two to ten
years.

Uniform Net Capital Rule: Securities and
Exchange Commission requirement that
member firms as well as nonmember brokerdealers in securities maintain a maximum ratio of indebtedness to liquid capital of 15
to 1; also called net capital rule and net
capital ratio. Indebtedness covers all money
owed to a firm, including margin loans and
commitments to purchase securities, one
reason new public issues are spread among
member of underwriting syndicates. Liquid
capital includes cash and assets easily
converted into cash.

Yield: The rate of annual income return on
an investment, expressed as a percentage.
(a) Income Yield is obtained by dividing the
current dollar income by the current market
price for the security. (b) Net Yield or
Yield to Maturity is the current income
yield minus any premium above par or plus
any discount from par in purchase price,
with the adjustment spread over the period
from the date of purchase to the date of
maturity of the bond.
17 CITY OF SALINAS

INVESTMENT GUIDELINES AND STRATEGY
I. GUIDELINES - Guidelines are established to direct and control activities in such a manner that previously established goals are achieved.

1. Investment Transaction. Every investment transaction must be authorized and reviewed by the Finance Director or his/her designee.

2. Pooled Cash. Whenever practical, local agency cash is consolidated into one bank account and invested on a pooled concept basis. Interest earnings are allocated monthly according to month-end cash and investment balances for each fund.

3. Competitive Bids. Purchase and sales of securities are made on the basis of competitive offers and bids when practical.

4. Cash Forecast. The cash flow for the City is analyzed with the receipt of revenues and maturity of investments scheduled so that adequate cash will be available to meet disbursement requirements.

5. Investment Limitations. Security purchases and holdings are maintained within statutory limits imposed by the California Government Code. Current limits are:

Bankers’ Acceptances 40% Section 53601(f)
Commercial Paper 25% Section 53601(g)
Negotiable Certificates of Deposit 30% Section 53601(h) Medium Term Notes 30% Section 53601(j)
Money Market Mutual Funds 20% Section 53601(k)
Asset-Backed/Mortgage-Backed Securities 20% Section 53601(n) Federal Agency restriction 60% per Agency Section 14 of Policy Local Agency Investment Fund $50,000,000 per Section 14 of Policy CAMP no limit per Section 14 of Policy
Portfolio Maturing within one year 20% per Section 14 of Policy

6. Liquidity. The marketability of a security is considered at the time of purchase, as the security may have to be sold at a later date to meet unanticipated cash demands.

7. Diversification. The portfolio should consist of a mix of various types of securities, issuers, and maturities.
18 CITY OF SALINAS

INVESTMENT GUIDELINES AND STRATEGY
(Continued)
II. STRATEGY - Strategy refers to the ability to manage financial resources in the most advantageous manner.

1. Economic Forecasts. Economic Forecasts are obtained periodically from economists and financial experts through bankers and brokers to assist the Finance Director or his/her designee with the formulation of an investment strategy for the local agency.

2. Implementing Investment Strategy. Investment transactions are executed which conform with anticipated interest rate trends and the current investment strategy plan.

3. Rapport. A close working relationship is maintained with large vendors of the city. The objective is to pinpoint when large disbursements will clear the city's bank account. It is essential for good cash control that such large expenditures be anticipated, estimated as to dollar amount, and communicated to the Finance Director or his/her designee for liquidity planning purposes.

4. Preserve Portfolio Value. Field standards are developed in order to maintain earnings near the market and to preserve the value of the portfolio. 19 CITY OF SALINAS

INVESTMENT PROCEDURES

INTERNAL CONTROL - GUIDELINES

OBJECTIVES OF INTERNAL CONTROL
Internal control is the plan of organization and all the related systems established by the management's objective of ensuring, as far as practicable:
 The orderly and efficient conduct of its business, including adherence to management policies.  The safeguarding of assets.
 The prevention or detection of errors and fraud.
 The accuracy and completeness of the accounting records.  The timely preparation of reliable financial information.

LIMITATIONS OF INTERNAL CONTROL
No internal control system, however elaborate, can by itself guarantee the achievement of management's objectives. Internal control can provide only reasonable assurance that the objectives are met, because of its inherent limitations, including:
 Management's usual requirement that a control be cost-effective.  The direction of most controls at recurring, rather than unusual, types of transactions.  Human error due to misunderstanding, carelessness, fatigue, or distraction.  Potential for collusion that circumvents controls dependent on the segregation of functions.  Potential for a person responsible for exercising control abusing that responsibility; a responsible staff member could be in a position to override controls which management has set up.
20 CITY OF SALINAS

INVESTMENT PROCEDURES

INTERNAL CONTROL - GUIDELINES
(Continued)

ELEMENTS OF INTERNAL CONTROL
Elements of a system of internal control are the means by which an organization can satisfy the objectives of internal control. These elements are:

1. ORGANIZATION
Specific responsibility for the performance of duties should be assigned and lines of authority and reporting clearly identified and understood.

2. PERSONNEL
Personnel should have capabilities commensurate with their responsibilities. Personnel selection and training policies together with the quality and quantity of supervision are thus important.

3. SEGREGATION OF FUNCTIONS
Segregation of incompatible functions reduces the risk that a person is in a position both to perpetrate and conceal errors or fraud in the normal course of duty. If two parts of a transaction are handled by different people, collusion is necessary to conceal errors or fraud.

In particular, the functions that should be considered when evaluating segregation of functions are authorization, execution, recording, custody of assets, and performing reconciliations.

4. AUTHORIZATION
All transactions should be authorized by an appropriate responsible individual. The responsibilities and limits of authorization should be clearly delineated. The individual or group authorizing a specific transaction or granting general authority for transactions should be in a position commensurate with the nature and significance of the transactions. Delegation of authority to authorize transactions should be handled very carefully.

5. CONTROLS OVER AN ACCOUNTING SYSTEM
Controls over an accounting system include the procedures, both manual and computerized, carried out independently to ascertain that transactions are complete, valid, authorized, and properly recorded.
21 CITY OF SALINAS

CASH CONTROLS

PROCEDURES PERFORMED BY EXTERNAL AUDITORS WITH RESPECT TO CASH

RECEIPTS
A. City procedures and controls are reviewed. Some of the system strengths are:

1. Receipts are controlled upon receipt by proper registration devices.

2. Receipts are reconciled on a daily basis.

3. Amounts batched and deposited intact.

4. Bank reconciliations are reviewed.

5. Prompt posting of cash receipt entries in books.

6. Proper approval required for write-off's of customer accounts.

7. Checks are restrictively endorsed upon receipt or when run through cash register.

8. Adequate physical security over cash.

9. Individuals that handle cash do not post to customer account records or process billing statements.

10. Adequate supervision of Finance Department operations.

B. Significant revenues are confirmed directly with payer and compared with City books to make sure amounts are recorded properly.

C. Cash balances are substantiated by confirming all account balances recorded in books. Bank reconciliations are reviewed for propriety and recalculated by the auditor. All significant reconciling items on bank reconciliations are verified as valid reconciling items by proving to subsequent bank statements.
22 CITY OF SALINAS

SEGREGATION OF RESPONSIBILITIES OF

THE TREASURY FUNCTIONS
Function Responsibility

1. Formal Investment Policy should be:

Prepared By: Finance Director
Approved By: City Council

2. Develop Investment Strategy Finance Director or Registered Investment Advisor

3. Investment Strategy should be Finance Director
approved by

4. Execution of investment transactions:

Investments other than LAIF and Deposits Finance Director or Registered Investment Advisor
Execution of LAIF and Deposit transfers Accounting Manager

5. Timely recording of investment transactions:

Recording of investment transactions Senior Accountant
in the City's accounting records (but reviewed by Accounting Manager)

6. Verification of investment, Senior Accountant
i.e., match broker confirmation to City's records

7. Confirmation of LAIF and Bank Wires Assistant Finance Director

8. Safeguarding of Assets and Records:

Reconciliation of City's Senior Accountant
records to bank statements and (but reviewed by Assistant safekeeping records Finance Director)
23 CITY OF SALINAS

SEGREGATION OF RESPONSIBILITIES OF

THE TREASURY FUNCTIONS
(Continued)
Function Responsibility

8. Safeguarding of Assets and Records
(continued):

Annual review of (a) financial Finance Director
institution's financial condition,
(b) safety, liquidity, and potential
yields of investment instruments.

9. No less than an annual Independent Auditors
review of investment
portfolio as prepared by
Senior Accountant and reviewed by
Finance Director
City of Salinas
Legislation Text
200 Lincoln Ave., Salinas,
CA 93901
www.cityofsalinas.org
File #: ID#22-555, Version: 1
Acceptance of CA-COC 506 Salinas/Monterey and San Benito Counties Continuum of Care Housing Assistance and Prevention Program Grant Funds
Approve a Resolution authorizing the acceptance of $722,305.07 of CA-COC 506 Homeless Housing Assistance and Prevention Program grant funds; the establishment and/or increase of Housing - Other Agency Match Fund Special Programs (2945.30.3240) appropriations totaling $722,305.07 and corresponding revenue budget; and authorize the City Manager or designee to execute all applicable agreements.

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CITY OF SALINAS

COUNCIL STAFF REPORT
DATE: OCTOBER 18, 2022
DEPARTMENT: COMMUNITY DEVELOPMENT
FROM: MEGAN HUNTER, DIRECTOR
BY: ROD POWELL, PLANNING MANAGER
TITLE: ACCEPTANCE OF CA-COC 506 SALINAS/MONTEREY AND SAN

BENITO COUNTIES CONTINUUM OF CARE HOMELESS

HOUSING ASSISTANCE AND PREVENTION PROGRAM GRANT
FUNDS
RECOMMENDED MOTION:

A motion to approve a resolution authorizing:

1. the acceptance of $722,305.07 of CA-COC 506 Homeless Housing Assistance and Prevention Program grant funds; and

2. the establishment and/or increase of Housing - Other Agency Match Fund Special Programs (2945.30.3240) appropriations totaling $722,305.07 and corresponding revenue budget; and

3. the City Manager or designee to execute all applicable agreements.

EXECUTIVE SUMMARY:

In December 2019, the California Homeless Coordinating and Financing Council (CHCFC) issued a Notice of Funding Availability (NOFA) for a $650 million Homeless Housing Assistance (HHAP) block grant program designed to support regional coordination and expand or develop local capacity to address immediate homelessness challenges throughout the state. $190 million of this funding was designated as available to local Continuums of Care (COC) to identify and distribute within their jurisdiction with an informed framework involving best practices focused on moving homeless individuals and families into permanent housing.

In early 2020, following CHCFC’s notification, the CA-506 Salinas/Monterey and San Benito Counties Continuum of Care (COC), through its administrative entity the Coalition of Homeless Services Providers (CHSP), released a local $2.424 million NOFA soliciting applications to fund HHAP projects addressing the immediate needs of the local homeless community. In support of efforts to expand the capacity and operations of its Chinatown Navigation Center (CNC), the City applied for $1,000,000 in funding. On June 30, 2020, CHSP notified the City of its $722,305.07 award amount.

Concurrent to the City’s application and subsequent award notification, the onset of the Covid-19 pandemic triggered the availability of significant amounts of additional federal and state priority Page | 2
entitlement funding. As a result, the acceptance and programming of HHAP funds was postponed until FY 2022-2023.

BACKGROUND:

On March 4, 2020, under the auspices of CHCFC and through its designated administrative entity the CHSP, the COC issued a NOFA soliciting applications to fund HHAP projects, services or programs addressing the immediate needs of the local homeless community. In response, on April 30, 2020, the City submitted an application requesting $1,000,000 in support of the emergency shelter operations of its Chinatown Navigation Center. On June 30, 2020, following a competitive evaluation process, the City received notification from CHSP of a $722,305.07 HHAP award.

Concurrent to the City’s application and subsequent award notification, the onset of the Covid-19 pandemic triggered the availability of significant amounts of additional federal and state priority entitlement funding. As a result, the acceptance and programming of HHAP funds was postponed.

DISCUSSION:

Since the onset of the pandemic, the City has diligently and thoughtfully programmed and leveraged these one-time Covid funds to allow for an effective, comprehensive expansion of homeless services supported by the full expenditure of its allocation. As part of this programming and expenditure plan, it was determined that the use of the City's COC HHAP award would not be necessary until FY 2022-2023. As outlined in its original HHAP application, the City plans to utilize its award to partially fund the annual 24/7 operations of its Chinatown Navigation Center and Sprung shelter. HHAP funds must be contractually obligated by May 31, 2023 and fully expended by June 30, 2025.

Through subrecipient agreements with the City, Community Homeless Solutions (CHSol) currently serves as the operator of the City’s CNC and Sprung shelter, providing up to 50 nightly shelter beds, case management, computer access, and housing navigation services in the City’s Chinatown neighborhood. Additionally, the CNC provides access to meals and sanitary and hygiene services such as restrooms, showers, and personal care items to those experiencing homelessness in our community.

Providing these necessary, best practice services at the CNC requires a significant commitment of funds that far exceeds the typical levels of available entitlement funding. In recent years, the City has strategically used its windfall of Covid-19 funds to strengthen and expand the level of homeless services ranging from street outreach to supportive 24/7 shelter operations. These efforts have resulted in a remarkable 10% decrease in the number of unhoused residents as reported in the COC’s most recent 2022 Point-in-Time Count. This is especially remarkable since most COCS experienced a significant increase in unhoused populations during the pandemic.

In recognition of the current inadequate level of state and federal entitlement funding for homeless services, the City Council has elevated its support for these vital initiatives through the prioritization of one-time American Rescue Plan Act (ARPA) and targeted Capital Improvement Plan (CIP) funding. CDD Housing Division staff continue to diligently support this funding prioritization by seeking and pursuing other grant funding opportunities, such as HHAP.

Page | 3
In FY 2022-2023, the City’s HHAP award will be used to support CNC operations while allowing other resources to be directed towards vital housing navigation activities. In support of this strategy, CHSol will add three dedicated Housing Navigators to provide CNC residents with the wraparound supports and assistance necessary to attain permanent housing.

CEQA CONSIDERATION:

Not a Project. The City of Salinas has determined that the proposed action is not a project as defined by the California Environmental Quality Act (CEQA) per Guidelines Section 15378.

STRATEGIC PLAN INITIATIVE:

Acceptance and use of COC HHAP funds supports the provision of much needed shelter beds and housing navigation services for unhoused City residents within a supportive Housing First best practice model. This initiative supports City of Salinas 2022-2025 Strategic Plan Goals and Strategies including Housing/Affordable Housing and Effective and Culturally Responsive Government.

DEPARTMENT COORDINATION:

This agenda item is solely administered by the Community Development Department’s Housing and Community Development Division in coordination with the City Attorney and Finance Departments.

FISCAL AND SUSTAINABILITY IMPACT:

Acceptance of awarded COC HHAP funds has no impact to the City’s General Fund. The expenses appropriated to the Housing - Other Agency Match Fund (2945) will be offset with a corresponding revenue budget for the funds received. The operation of the CNC also benefits from designated ARPA and CIP 9125 funds.

ATTACHMENTS:

1. Resolution

2. Homeless Housing Assistance and Prevention Program Grant (HHAP) Agreement 1 RESOLUTION NO. (N.C.S.)
A RESOLUTION OF THE CITY COUNCIL TO ACCEPT THE CA-COC 506

SALINAS/MONTEREY AND SAN BENITO COUNTIES CONTINUUM OF CARE

HOMELESS HOUSING ASSISTANCE AND PREVENTION PROGRAM GRANT FUNDS

AND AUTHORIZE THE CITY MANAGER OR DESIGNEE TO EXECUTE ALL

APPLICABLE PROGRAM AGREEMENTS
WHEREAS, on December 2019, the California Homeless Coordinating and Financing Council issued a Notice of Funding Availability for a $650 million Homeless Housing Assistance Program block grant program designed to support regional coordination and expand or develop local capacity to address immediate homelessness challenges throughout the state; and WHEREAS, CHCFC designated $190 million of the NOFA funding available to local Continuums of Care to identify and distribute within their jurisdiction with an informed framework involving best practices focused on moving homeless individuals and families into permanent housing; and
WHEREAS, in early 2020, the CA-COC 506 Salinas/Monterey and San Benito Counties Continuum of Care , through its administrative entity, the Coalition of Homeless Services Providers, released a local $2.424 million NOFA soliciting applications to fund HHAP projects, services or programs addressing the immediate needs of the local homeless community; and WHEREAS, the City applied seeking $1,000,000 in funding to support the emergency shelter operations of its Chinatown Navigation Center on April 30, 2020; and WHEREAS, the City received notification from CHSP of a $722,305.07 award amount on June 30, 2020; and
WHEREAS, the City plans to utilize its HHAP award to partially fund the annual 24/7 operations of its Chinatown Navigation Center and Sprung shelter in FY 2022-23; NOW, THEREFORE, BE IT RESOLVED that the Salinas City Council approves the acceptance of $722,305.07 of CA-COC 506 Homeless Housing Assistance and Prevention Program (HHAP) grant funds and the establishment and/or increase of Housing - Other Agency Match Fund Special Programs (2945.30.3240) appropriations totaling $722,305.07 and corresponding revenue budget; and
BE IT FURTHER RESOLVED, that the Salinas City Council authorizes the City Manager, or designee to execute all applicable program agreements.

PASSED AND APPROVED this 18th day of October, 2022, by the following vote:

AYES:

NOES:
2 ABSENT:

ABSTAIN:

APPROVED:
______________________________
Kimbley Craig, Mayor
ATTEST:
_________________________
Patricia M. Barajas, City Clerk
City of Salinas
Legislation Text
200 Lincoln Ave., Salinas,
CA 93901
www.cityofsalinas.org
File #: ID#22-557, Version: 1
Agreement with the County of Monterey for the Roundabout at Davis Road Bridge Replacement and Road Widening Project
Approve a Resolution approving an agreement between the City of Salinas and the County of Monterey for the Roundabout at the Davis Road Bridge Replacement and Road Widening Project.

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CITY OF SALINAS

COUNCIL STAFF REPORT
DATE: OCTOBER 18, 2022
DEPARTMENT: PUBLIC WORKS
FROM: DAVID JACOBS, DIRECTOR
BY: BRIAN FRUS, SENIOR ENGINEER
TITLE: AGREEMENT BETWEEN THE CITY OF SALINAS AND THE

COUNTY OF MONTEREY FOR THE ROUNDABOUT AT THE

DAVIS ROAD BRIDGE REPLACEMENT AND ROAD WIDENING

PROJECT
RECOMMENDED MOTION:

A motion to approve a Resolution approving an agreement between the City of Salinas and the County of Monterey for the Roundabout at the Davis Road Bridge Replacement and Road Widening Project.

RECOMMENDATION:

It is recommended that the City Council approve a resolution approving an agreement between the City of Salinas and the County of Monterey for the Roundabout at the Davis Road Bridge Replacement and Road Widening Project.

EXECUTIVE SUMMARY:

Monterey County is proposing to implement the Davis Road Bridge Replacement and Road Widening Project (Project). In order for the County to construct the Project, the access to the City of Salinas Industrial Wastewater Facility (IWTF) must be relocated. The Agreement will provide Monterey County a permanent roadway easement and a temporary construction easement from City parcel APN 207-201-001 to enable the Project. The Agreement also provides Pacific Gas and Electric Company a utility easement along its frontage with Davis Road to relocate an existing natural gas pipeline that conflicts with the bridge construction.

BACKGROUND:

The Monterey County Public Works, Facilities, and Parks Department (MCPWFP) is working on the right-of-way phase of the Davis Road Bridge Replacement and Road Widening Project. The Project consists of replacing the existing two-lane, low-level Davis Road bridge crossing the Page | 2
Salinas River with a longer bridge that meets current American Association of State Highway and Transportation Officials (AASHTO) requirements. The existing Davis Road bridge is located approximately two miles south of the City of Salinas. The Project also proposes to widen Davis Road from two lanes to four lanes for approximately 2.1 miles between Blanco Road on the north and Reservation Road on the south.

The City IWTF site is located along Davis Road and the access to the site will need to be relocated due to the alignment of the improved roadway and new bridge spanning the Salinas River.

MCPWFP staff is working with adjacent property owners to relocate the City’s access to Davis Road further north to the intersection of Davis Road and Foster Road. The access will be along a proposed frontage road to be used by the property owners currently accessing Davis Road within the limits of the proposed bridge.

In addition, the Agreement provides 5,243 square feet of permanent roadway easement and 45,614 square feet of temporary construction easement from parcel APN 207-201-001 to construct the Project. The Agreement also provides Pacific Gas and Electric Company, a 19,466 square feet utility easement along its frontage with Davis Road to relocate an existing natural gas pipeline that conflicts with the bridge construction.

The Project is scheduled for construction for Fall 2023, following the acquisition of all the easements and issuance of the regulatory permits for the Project. As part of the Project, existing fencing, gates and other City facilities in conflict with the Project construction will be relocated by the Project at no cost to the City of Salinas.

CEQA CONSIDERATION:

On July 11, 2016, the Board of Supervisors certified the Environmental Impact Report (EIR) for the Project and directed the former Resource Management Agency (RMA) to proceed with the Project’s final design and related activities to be able to construct the Project. An EIR Addendum for the Project was prepared to amend the Project design details to incorporate design modifications following the Value Analysis Study Report prepared in 2017. The EIR Addendum was filed and approved by Caltrans on May 8, 2020.

While the project requires a CEQA process, the agreement itself does not constitute a project with respect to CEQA.

STRATEGIC PLAN INITIATIVE:

The proposed project and agreement relate to the following City Council’s Strategic Plan Initiative:

Infrastructure and Environmental Sustainability: Benefits and improves the condition of local streets by allowing a transportation project to succeed through cooperation and coordination with Monterey County.

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DEPARTMENTAL COORDINATION:

This project will rely on coordination between the Legal and the Wastewater and Water, Waste and Energy (WWE) divisions in Public Works. WWE will provide administrative and engineering support while the Wastewater Division will need to coordinate on-site activities with MCPWFP.

FISCAL AND SUSTAINABILITY IMPACT:

This agreement does not require any financial obligations on the part of the City of Salinas other than staff time for the coordination of activities, engineering and administrative tasks. Thus, this action will not involve the expenditure of any funds nor impact the General Fund.

ATTACHMENTS:

Resolution
Agreement Between the City of Salinas and the County of Monterey for the Roundabout at the Davis Road Bridge Replacement and Road Widening Project

RESOLUTION NO. _______(N.C.S.)

A RESOLUTION APPROVING AN AGREEMENT BETWEEN THE CITY OF

SALINAS AND THE COUNTY OF MONTEREY FOR THE ROUNDABOUT AT THE

DAVIS ROAD BRIDGE REPLACEMENT AND ROAD WIDENING PROJECT WHEREAS, the County of Monterey is proposing to implement the Davis Road Bridge Replacement and Road Widening Project (Project);
WHEREAS, the Project consists of replacing the existing Davis Road Bridge crossing the Salinas River and to widen Davis Road from two lanes to four lanes between Blanco and Reservation Roads;
WHEREAS, in order for the County to construct the Project, the access to the City of Salinas Industrial Wastewater Facility must be relocated to allow for a permanent roadway easement and a temporary construction easement from City parcel APN 207-201-001; WHEREAS, staff from the County of Monterey and the City have drafted an Agreement for the Roundabout at the Davis Road Bridge Replacement and Road Widening Project to enable these right of way efforts to construct the project;
WHEREAS, the Agreement provides 5,243 square feet of permanent roadway easement and 45,614 square feet of temporary construction easement from parcel APN 207-201-001 to construct the Project. The Agreement also provides Pacific Gas and Electric Company, a 19,466 square feet utility easement along its frontage with Davis Road to relocate an existing natural gas pipeline that conflicts with the bridge construction.

NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF SALINAS, consistent with the authority granted to the City Council, the Agreement by and

between the City of Salinas and the County of Monterey for the Roundabout at the Davis Road Bridge Replacement and Road Widening Project is hereby approved; and BE IT FURTHER RESOLVED that the Mayor of Salinas is hereby authorized and directed, for and on behalf of the City of Salinas, and as its act and deed, to execute the attached Agreement between the City of Salinas, a Charter City and the County of Monterey, a General Law County.

BE IT FURTHER RESOLVED that the City Manager or his designee is authorized to execute extensions and/or non-substantive modifications to the Agreement, as necessary.

PASSED AND APPROVED this 18th day of October 2022, by the following vote:

AYES:

NOES:

ABSENT:

____________________________
Kimbley Craig, Mayor
ATTEST:
____________________________
Patricia M. Barajas, City Clerk

AGREEMENT BETWEEN THE CITY OF SALINAS AND COUNTY OF MONTEREY

FOR THE DAVIS ROAD BRIDGE REPLACEMENT AND ROAD WIDENING

PROJECT
This Project Agreement (the “Agreement”) is entered into as of the last date opposite the respective signatures by and between the City of Salinas, a California charter city and municipal corporation (hereinafter “City”), and the County of Monterey, California, a political subdivision of the State of California (the “County”), collectively the “Parties.”

RECITALS
WHEREAS, the County proposes to construct the Davis Road Bridge Replacement and road Widening Project (the “Project”); and
WHEREAS, the Project consists of widening Davis Road to four (4) travel lanes between Blanco Road and Reservation Road, a new 1700-foot long bridge over the Salinas River, intersection improvements at Davis Road/Hitchcock Road, Davis Road/Foster Road, and Davis Road/Reservation Road, and relocation of utility lines in conflict with the road and bridge construction; and
WHEREAS, the City of Salinas Industrial Waste Water site (APN 207-201-001) fronts a portion of the Project along Davis Road; and
WHEREAS, the new Davis Road bridge will span the width of the Salinas River and require moving the access point to the City of Salinas Industrial Waste Water site to a new frontage road to be constructed as part of the Project; and WHEREAS, the County has secured funding to construct the Project and actively working to complete the Right-of-way Phase of the Project; and WHEREAS, the County requests the City to provide 5,243 square feet of permanent roadway easement and 45,614 square feet of temporary construction easement and from parcel APN 207-201-001 to construct the Project.

WHEREAS, the County requests the City grant Pacific Gas and Electric Company, a California corporation, a 19,466 square feet utility easement along its frontage with Davis Road from parcel APN 207-201-001 to relocate an existing natural gas pipeline.

AGREEMENT
NOW, THEREFORE, IT IS MUTUALLY AGREED in consideration of the foregoing recitals and the mutual goals and objectives contained herein, the Parties agree as follows:

1. Project Details and Costs:

The County will manage and fund the Project at no cost to the City. As part of the Project, the County will construct a new frontage road from the intersection of Davis Road with Foster Road to the new entrance to City parcel Assessor’s Parcel Number (APN) 207-201-001. The County will relocate the entrance gate and reconstruct the existing property fence to make the access modifications. The frontage road will be paved and constructed in compliance with County and Caltrans specification. The layout of the new frontage road and relocated access driveway to the City’s parcel APN 207- 201-001 is depicted in Exhibit A which is attached and incorporated by this reference.

2. Easements:

The City will deed the County a permanent roadway easement consisting of 5,243 square feet to construct the access to the new frontage road. The City will grant 45,614 square feet of temporary construction along its frontage on Davis Road. The temporary construction easement (TCE) will be for a three (3) year period starting April 1, 2023.

The County will use the TCE to stage and construct the new bridge. The proposed permanent roadway easement and TCE are depicted in Exhibit B which is attached and incorporated by this reference. Upon completion of the Project and termination of the TCE term, the City shall provide the County ingress and egress rights through the gate entrance to maintain the Project bridge. The bridge access path shall be along the northly edge of the City’s parcel. The City shall also grant access to the neighboring parcel (APN 207-042-005 which is currently owned by CUS Holding Trust) through this same access path.

The City will deed Pacific Gas and Electric Company, a California corporation, 19,466 square feet utility easement along its frontage with Davis Road to relocate an existing natural gas pipeline. The existing pipeline is in conflict with construction of the Project bridge and needs to be relocated. The new pipeline is proposed to be installed underground and will cross the Salinas River approximately 20 feet westerly of the existing pipeline.. The proposed utility easement and easement deed are shown in Exhibit C which is attached and incorporated by this reference.

3. County Notification Obligations:

County shall coordinate all work within the Project area with the City and provide 45-day notice prior to start of any work. The County shall provide monthly updates to the City on the progress of the work during the relocation of the pipeline and construction of the Project bridge.

4. County Inspection Obligations:

The County shall be responsible for providing construction inspection and construction management services associated with construction of the Project. Quality assurance inspections conducted by the City shall be coordinated with the County.

5. Ongoing Maintenance Obligations:
a. County Maintenance Obligation: The County accepts all future maintenance responsibility of the Project, including the new frontage road leading to the City’s entrance gate and the access path to the Project bridge. b. City’s Maintenance Obligation: The City accepts all future maintenance responsibility of the entrance gate and reconstructed fence along the City’s parcel APN 207-201-001.

6. Indemnity:
a. County’s Indemnity Obligation: The County shall fully defend, indemnify and hold the City, its officers, agents and employees harmless against all claims for damages to persons or property arising out of the construction of the Project, including but not limited to the County’s design, engineering, execution of the work, maintenance, or otherwise resulting from the conduct of County employees, agents, contractors, or others in connection with the Project.
b. City’s Indemnity Obligation: The City shall fully defend, indemnify and hold the County, its officers, agents and employees harmless against all claims for damages to persons or property arising out of the on-going maintenance of the new entrance gate and reconstructed fence.

7. Insurance:

The County shall require a commercial and general liability and automobile liability policies provided by any contractors or subcontractors performing work on the Project naming the County of Monterey, its officers, agents, and employees as Additional Insureds with respect to liability arising out of the contractors’ or subcontractors’ work, including ongoing and completed operations, and shall further provide that such insurance is primary and non-contributory to any insurance or self-insurance maintained by the County.

8. Entire Agreement:

This Agreement represents the full and complete understanding of the parties with respect to the Project Property and the Project. Any prior or contemporaneous oral or written agreements by and between the parties or their agents and representatives with respect to the Project Property or the Project are revoked and extinguished by this Agreement.

9. Notices:

All notices required or permitted under this Agreement shall be in writing and shall be deemed delivered as follows:

City of Salinas
Attn: David Jacobs, Public Works Director
City of Salinas
Public Works Department
200 Lincoln Ave.

Salinas, California 93901
County of Monterey
Attn: Tom Bonigut, Assist. Director of Public Works
Public Works, Facilities and Parks Department
1441 Schilling Place, 2nd Floor
Salinas, California 93901
(831) 755-4950
[email protected]

10. Further Acts and Assurances:

The Parties agree to execute, acknowledge and deliver any and all additional papers documents and other assurances, and shall perform any and all acts and things reasonably necessary, in connection with the performance of the obligations hereunder and to carry out the intent of the Parties.

11. Counterparts:

This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement.

CITY OF SALINAS
BY: ________________________________ DATE: _____________________ Kimbley Craig
Mayor, City of Salinas
APPROVED AS TO FORM:

BY: _______________________________ DATE: _____________________ Christopher A. Callihan, City Attorney

COUNTY OF MONTEREY
BY: ________________________________ DATE: _____________________ Mary L. Adams, Chair
Monterey County Board of Supervisors
APPROVED AS TO FORM:

BY: ________________________________ DATE: _____________________ Mary Grace Perry
Deputy County Counsel
APPROVED AS TO INDEMNITY/INSURANCE PROVISIONS:

BY: ________________________________ DATE: _____________________ Danielle P. Mancuso, Risk Manager
L    T
L
L    T
L
S 36°27'36" E 419.58
N 35°30'00" W 170.32
N 12°13'30" W 193.84 S 36°17'31" W 258.15 129.76
N 36°27'36" W 111.00 N 53°32'24" E

41.50 S 36°17'31" W

27.95 N 76°03'24" E

50.93 N 43°50'05" E

52.07 N 35°24'37" E 230.29
R=7599.55
Δ=0°35'21" L=78.13
N 53°42'29" W

10.00 124.43

69.41 128.39 N 36°16'35" E 180.37

86.00 394.58

CITY OF SALINAS
276.24 ACRES PER
26-SURVEYS-17
APN 207-201-001

POINT OF

BEGINNING DAVIS ROAD
MICHAEL K. GOETZ - PLS

COUNTY SURVEYOR
DATE:

SCALE: 1"=75'
September 9, 2021

NEW ROAD R/W

R/W ACQUISITION PARCEL

0.536 ACRES (A COUNTY ROAD, WIDTH VARIES)
(831) 755-4800/FAX (831) 755-4958

COUNTY OF MONTEREY
1441 SCHILLING PLACE, SOUTH 2ND FLOOR
SALINAS, CALIFORNIA 93901 DATE
SCALE

OFFICE OF THE COUNTY SURVEYOR

DAVIS ROAD BRIDGE PROJECT

TEMPORARY CONSTRUCTION EASEMENT
CONTRACT NO. 3600

CITY OF SALINAS PROPERTY
09/09/21
1"=75'

EXISTING ROAD R/W

EXISTING ROAD R/W

SALINAS TO COUNTY OF MONTEREY
V 1799 OR 121 - 10' STRIP

TEMPORARY

CONSTRUCTION
EASEMENT 0.624
ACRES

HOLLIS HITCHCOCK

TO COUNTY OF MONTEREY
V 21 DEEDS 117 - 40' STRIP

City of Salinas
Legislation Text
200 Lincoln Ave., Salinas,
CA 93901
www.cityofsalinas.org
File #: ID#22-558, Version: 1
Agreement with Engie Services US, Inc. for Maintenance Services of the City’s Solar Photovoltaic Systems
Approve a Resolution approving an Agreement for Services in the amount of $643,088 between the City of Salinas and Engie Services US, Inc. for the Maintenance Services for the City of Salinas Solar Photovoltaic Systems.

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CITY OF SALINAS

COUNCIL STAFF REPORT
DATE: OCTOBER 18, 2022
DEPARTMENT: PUBLIC WORKS
FROM: DAVID JACOBS, DIRECTOR
BY: BRIAN FRUS, SENIOR ENGINEER
TITLE: AGREEMENT FOR SERVICES BETWEEN THE CITY OF

SALINAS AND ENGIE FOR MAINTENANCE SERVICES FOR

THE CITY OF SALINAS SOLAR PHOTOVOLTAIC SYSTEMS
RECOMMENDED MOTION:

A motion to approve a resolution approving an Agreement for Services in the amount of $643,088 between the City of Salinas and Engie Services US, Inc. for the Maintenance Services for the City of Salinas Solar Photovoltaic Systems.

RECOMMENDATION:

It is recommended that the City Council approve a resolution approving an Agreement for Services in the amount of $643,088 between the City of Salinas and Engie Services US, Inc. for the Maintenance Services for the City of Salinas Solar Photovoltaic Systems.

BACKGROUND:

The City of Salinas owns and operates seven photovoltaic (PV) systems, located at five different locations totaling 3.6 megawatts (MW) in peak capacity. All systems were put into service between March and June of 2016. Since that time, regular routine and preventative maintenance and detailed performance monitoring has been performed on the systems by Engie Services US, Inc. (Engie). The maintenance agreement along with the installation of the PV systems and other energy improvements was approved by Council on October 21, 2014 (Resolution No. 20664) with an Amendment 1 to the agreement approved August 30, 2016 (Resolution No. 21032). The maintenance agreement has now expired and thus requires renewal.

Given the duration of the contract staff prepared a Request for Proposals to solicit offers from prospective firms.

In general, the maintenance work to be performed consists of providing inspection, preventive and routine PV system maintenance, responsive maintenance, and emergency repair services for the City’s PV Systems at the various locations.

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Equipment and components covered under this agreement that will require maintenance, repair and inspection services include inverters, transformers, panels, combiner boxes, array structures and mounting hardware, internet connections and communications, cables and conductors, switch gear and data acquisition systems.

A request for proposals (RFP) for interested consulting firms was advertised on the “PlanetBids” website April 22, 2022 for the Maintenance Services for the City of Salinas Solar Photovoltaic Systems as described above, and submittals were received from three firms on May 20, 2022. The firms submitting qualification/proposal statements were:
 Engie Services US, Inc
 Sandbar Solar and Electric
 Bright Future Solar Energy
The submittals were reviewed based on the following selection criteria listed in the RFP document:
1) Understanding of Scope of Work to be Done
2) Experience with Similar Kinds of Work
3) Quality of Staff Designated to Project
4) Capability of Developing Innovative or Advanced Techniques 5) Demonstrated Technical Ability
Based on these criteria, the review panel comprising of City staff selected Engie as the top firm.

Engie’s proposed total compensation for these services is $124,604 for Year-1 with Inspection Preventative and Routine Maintenance and the Monitoring Services escalating 3-percent per year bringing the sum to $643,088 for the 5-year term. The table below summarizes the costs over the 5-year term.

Year
Inspection Preventative and
Routine Maintenance
Services*
Monitoring
Service*
Responsive
Maintenance and
Emergency Repair
Services
Annual
Total
Year 1 $ 61,714 $ 3,202 $ 59,688 $ 124,604
Year 2 $ 63,565 $ 3,298 $ 59,688 $ 126,551
Year 3 $ 65,472 $ 3,397 $ 59,688 $ 128,557
Year 4 $ 67,437 $ 3,499 $ 59,688 $ 130,623
Year 5 $ 69,460 $ 3,604 $ 59,688 $ 132,752
Total Contract 5-Year Term $ 643,088
* Includes 3% annual escalator
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CEQA CONSIDERATION:

Not a Project. The City of Salinas has determined that the proposed action is not a project as defined by the California Environmental Quality Act (CEQA) (CEQA Guidelines Section 15378).

STRATEGIC PLAN INITIATIVE:

The proposed project and agreement meet the City Council’s Strategic Plan Initiatives of Infrastructure and Environmental Sustainability and Effective and Culturally Responsive Government.

DEPARTMENTAL COORDINATION:

This project will rely on coordination between Wastewater and Water, Waste and Energy (WWE) divisions in Public Works. WWE will coordinate the execution of the maintenance services, with Wastewater Division providing additional maintenance services not performed under this agreement.

FISCAL AND SUSTAINABILITY IMPACT:

The total estimated Year-1 annual cost for the scope of work contained in the Agreement is $124,604 or $643,088 for the 5-year term.

A total of $1,046,000 have been reserved in CIP 9184, Energy Related Improvements to City Facilities of which $905,000 are allocated in 5800.50.9184-63.6010 (Other Outside Services) over the 5-year term. These allocations were approved by Council on June 14, 2022 (Resolution No. 22380) under the Capital Improvement Budget and Program for Fiscal Year 2023 – 2028.

Thus, no addition funds or allocations are required for this action.

ATTACHMENTS:

Resolution
Agreement for Services Between the City of Salinas and Engie Maintenance Services for City of Salinas Solar Photovoltaic Systems.

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RESOLUTION NO. (N.C.S.)

AGREEMENT FOR SERVICES BETWEEN THE CITY OF SALINAS AND ENGIE

FOR MAINTENANCE SERVICES FOR THE CITY OF SALINAS SOLAR

PHOTOVOLTAIC SYSTEMS
WHEREAS, in October, 2014 Council approved the installation of solar photovoltaic (PV) systems and other energy improvements along with the maintenance of said systems (Resolution No. 20664) and in August, 2016 approved an Amendment 1 to the agreement (Resolution No. 21032); and
WHEREAS, the agreement has now expired and thus requires renewal in order to continue the maintenance of the PV systems; and
WHEREAS, on April 22, 2022, a Request for Proposals (RFP) for the Maintenance Services for the City of Salinas Solar Photovoltaic Systems was advertised on the “PlanetBids” website; and
WHEREAS, submittals were received from three firms, and the submittals were reviewed based on the selection criteria listed in the RFP document; and WHEREAS, the review panel comprising of City staff selected Engie Services US, Inc.as the top-ranked firm; and
WHEREAS, an Agreement for Services was successfully negotiated, and secured with said top-ranked firm.

NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF SALINAS, that the Agreement for Services between the City of Salinas and Engie Services US, Inc. to for the Maintenance Services for the City of Salinas Solar Photovoltaic Systems in the amount of $643,088 is hereby approved; and
BE IT FURTHER RESOLVED that the Mayor of Salinas is hereby authorized and directed, for and on behalf of the City of Salinas, and as its act and deed, to execute the attached Agreement for Professional Services between the City of Salinas, a Charter City, and Engie Services US, Inc., a Delaware Corporation; and
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BE IT FURTHER RESOLVED that the City Manager is authorized to execute extensions and/or non-substantive modifications to the Agreement, as necessary.

PASSED AND APPROVED this 18th day of October 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED:
_______________________
Kimbley Craig, Mayor
ATTEST:
_________________________
Patricia M. Barajas, City Clerk
Agreement for Services v. January 2021 Page 1 of 8
Engie Services US, Inc.

October 2022 - Maintenance Services for the City of Salinas Solar Photovoltaic Systems

AGREEMENT FOR SERVICES BETWEEN

THE CITY OF SALINAS AND ENGIE
Maintenance Services for City of Salinas Solar Photovoltaic Systems THIS AGREEMENT is executed this 18th day of October, 2022, (“Agreement” or “Contract”) between the City of Salinas, a California Charter city and municipal corporation (hereinafter “City”) and ENGIE Services US, Inc., a Delaware corporation (Hereinafter “Contractor”).

IT IS HEREBY MUTUALLY AGREED AS FOLLOWS:

1. Scope. Contractor hereby agrees to provide to the City, as the scope of services under this Agreement, the following services: Provide inspection, preventive and routine PV system maintenance, responsive maintenance, and emergency repair services for the City’s PV Systems.

Scope of work is further discussed in the City’s Maintenance Services for City of Salinas Solar Photovoltaic Systems Request for Proposals, Attachment B, Contractor’s Proposal dated May 20, 2022 and Amended Price Proposal dated September 30, 2022, Attachment C.

2. Timeliness. Contractor shall perform all tasks in a timely fashion, as set forth more specifically in Section 3 below. Failure to so perform is hereby deemed a material breach of this Agreement, and City may terminate this Agreement with no further liability hereunder, or the city may agree in writing with Contractor to an extension of time.

3. Term. The work under this Agreement shall commence October 18, 2022 and shall be completed by October 17, 2027 unless City grants a written extension of time as set forth in Section 2 above.

4. Payment. City agrees to pay and Contractor agrees to accept as full and fair consideration for the performance of this Agreement, fixed annual fees of in the amount of sixty-four thousand, nine hundred and sixteen Dollars ($64,916) which are subject to a 3% annual escalator and estimates for hourly fees in the amounts according to the Contractor’s fee schedule and Amended Price Proposal in Attachment C in the amount of fifty-nine thousand, six hundred and eighty-eight Dollars ($59,688), the sum of which is not to exceed one hundred twenty-four thousand, six hundred and four Dollars ($124,604) for the first year or six hundred twenty-three thousand and twenty Dollars ($643,088) for the 5-year term. Contractor has no right of reimbursement for expenses under this Agreement. Compensation shall become due and payable 30 days after City’s approval of Contractor’s submission of monthly written invoices to the City. The payment of any compensation shall be contingent upon performance of the terms and conditions of this Agreement to the satisfaction of the City. If City determines that the work set forth in the written invoice has not been performed in accordance with the terms of this Agreement, City shall not be responsible for payment until such time as the work has been satisfactorily performed.

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Engie Services US, Inc.

October 2022 - Maintenance Services for the City of Salinas Solar Photovoltaic Systems

5. Meet & Confer. Contractor agrees to meet and confer with City or its agents or employees with regard to services as set forth herein as may be required by City to insure timely and adequate performance of this Agreement.

6. Insurance. Contractor shall procure and maintain for the duration of this Agreement insurance meeting the requirements specified in Attachment A hereto.

7. Indemnification. Contractor shall hold harmless, defend at its own expense, and indemnify City and its officers, officials, employees, agents, and volunteers from and against all liability, claims, damages, losses, and/or expenses including reasonable City attorney fees arising from all acts or omissions of Contractor or its officers, agents, or employees arising out of the performance of the work under this Contract, caused in whole or in part by any negligent act or omission of the Contractor, any subcontractor, anyone directly or indirectly employed by any of them, or anyone for whose acts any of them may be liable, except where caused by the sole negligence or willful misconduct of the City.

8. Licensing. Contractor warrants that it is properly licensed to perform the work specified under this Agreement, including but not limited to possession of a current City business license.

9. Termination. City may terminate this Agreement upon ten days’ written notice. The amount of damages, if any, as a result of such termination may be decided by negotiations between the parties or before a court of competent jurisdiction.

10. Agency. In performing the services specified under this Agreement, Contractor is hereby deemed to be an independent contractor and not an agent or employee of City.

11. Non-Assignability. The rights and obligations of Contractor hereunder are not assignable and cannot be delegated without written consent of City.

12. Entire Agreement. This Agreement constitutes the entire Agreement between the parties hereto and supersedes any and all prior agreements, whether oral or written, relating to the subject matter thereof. Any modification of the Agreement will be effective only if it is in writing signed by both parties hereto.

13. Validity. If any provision in this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions will continue in full force without being impaired or invalidated in any way.

14. Counterparts. This Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts.

15. Laws. Contractor agrees that in the performance of this Agreement it will comply with all applicable State, Federal and local laws and regulations. This Agreement shall be governed Agreement for Services v. January 2021 Page 3 of 8
Engie Services US, Inc.

October 2022 - Maintenance Services for the City of Salinas Solar Photovoltaic Systems by and construed in accordance with the laws of the State of California, County of Monterey, and City of Salinas.

IN WITNESS WHEREOF, this Agreement is entered into by the parties hereto on the day and year first written above.

CITY OF SALINAS
__________________________________
Steve Carrigan
City Manager
APPROVED AS TO FORM:
_________________________________
Christopher A. Callihan, City Attorney, or
Rhonda Combs, Assistant City Attorney

CONTRACTOR
ENGIE Services US, Inc.
________________________________
By: Courtney Jenkins
Its: Vice President, Head of Distributed Energy Solutions Agreement for Services v. January 2021 Page 4 of 8
Engie Services US, Inc.

October 2022 - Maintenance Services for the City of Salinas Solar Photovoltaic Systems Attachment A
Insurance Requirements
Contractor shall procure and maintain for the duration of the contract, and for three years thereafter, insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder by the Contractor, his/her/its officers, agents, representatives, employees, and/or subcontractors.

MINIMUM SCOPE AND LIMIT OF INSURANCE
Coverage shall be at least as broad as:

1. Commercial General Liability (“CGL”): Insurance Services Office (“ISO”) Form CG 00 01 covering CGL on an occurrence basis, including products and completed operations, property damage, bodily injury and personal & advertising injury with limits no less than $2,000,000 per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location (ISO Form CG 25 03 or 25 04) or the general aggregate limit shall be twice the required occurrence limit.

2. Automobile Liability: ISO Form CA 0001 covering Code 1 (any auto), with limits no less than $1,000,000 per accident for bodily injury and property damage.

3. Workers’ Compensation: as required by the State of California, with Statutory Limits, and Employers’ Liability insurance with a limit of no less than $1,000,000 per accident for bodily injury or disease.

4. Contractors’ Pollution Legal Liability and/or Asbestos Legal Liability and/or Errors and Omissions (if project involves environmental hazards): with limits no less than $1,000,000 per occurrence or claim, and $2,000,000 policy aggregate, on an annual basis.

If the Contractor maintains broader coverage and/or higher limits than the minimums shown above, the Contractor requires and shall be entitled to the broader coverage and/or higher limits maintained by the Contractor. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City.

Self-Insured Retentions
Self-insured retentions must be declared to and approved by the City. At the option of the City, either: the Contractor shall cause the insurer shall to reduce or eliminate such self-insured retentions as respects the City, its officers, officials, employees, and volunteers; or the Contractor shall provide a financial guarantee satisfactory to the City guaranteeing payment of losses and related investigations, claim administration, and defense expenses. The policy language shall provide, or be endorsed to provide, that the self-insured retention may be satisfied by either the named insured or City.

Other Insurance Provisions
The insurance policies are to contain, or be endorsed to contain, the following provisions:

1. The City, its officers, officials, employees, and volunteers are to be covered as additional insureds on the CGL policy with respect to liability arising out of work or operations performed by or on behalf of the Contractor including materials, parts, or equipment furnished in connection with such work or operations and automobiles owned, leased, hired, or borrowed by Agreement for Services v. January 2021 Page 5 of 8
Engie Services US, Inc.

October 2022 - Maintenance Services for the City of Salinas Solar Photovoltaic Systems or on behalf of the Contractor. General liability coverage can be provided in the form of an endorsement to the Contractor’s insurance (at least as broad as ISO Form CG 20 10, CG 11 85 or both CG 20 10, CG 20 26, CG 20 33, or CG 20 38; and CG 20 37 forms if later revisions used).

2. For any claims related to this project, the Contractor’s insurance coverage shall be primary insurance coverage at least as broad as ISO CG 20 01 04 13 as respects the City, its officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, or volunteers shall be excess of the Contractor’s insurance and shall not contribute with it.

3. Each insurance policy required by this clause shall provide that coverage shall not be canceled, except with notice to the City.

4. A copy of the claims reporting requirements must be submitted by Contractor to the City.

5. If the services involve lead-based paint or asbestos identification/remediation, the Contractor’s Pollution Liability policy shall not contain lead-based paint or asbestos exclusions. If the services involve mold identification/remediation, the Contractor’s Pollution Liability policy shall not contain a mold exclusion, and the definition of Pollution shall include microbial matter, including mold.

Acceptability of Insurers
Insurance is to be placed with insurers authorized to conduct business in the state with a current A.M. Best rating of no less than A: VII, unless otherwise acceptable to the City.

Waiver of Subrogation
Contractor hereby agrees to waive rights of subrogation which any insurer of Contractor may acquire from Contractor by virtue of the payment of any loss. Contractor agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation. The Workers’ Compensation policy shall be endorsed with a waiver of subrogation in favor of the City for all work performed by the Contractor, its employees, agents and subcontractors.

Verification of Coverage
Contractor shall furnish the City with original Certificates of Insurance including an additional insured endorsement and all required amendatory endorsements (or copies of the applicable policy language effecting coverage required by this clause) and a copy of the Declarations and Endorsement Page of the CGL policy listing all policy endorsements to City before work begins.

However, failure to obtain the required documents prior to the work beginning shall not waive the Contractor’s obligation to provide them. The City reserves the right to require complete, certified copies of all required insurance policies, including endorsements, required by these specifications, at any time.

Subcontractors
Contractor shall require and verify that all subcontractors maintain insurance meeting all the requirements stated herein, and Contractor shall ensure that City is an additional insured on insurance required from subcontractors. For CGL coverage subcontractors shall provide coverage with a form at least as broad as CG 20 38 04 13.

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Engie Services US, Inc.

October 2022 - Maintenance Services for the City of Salinas Solar Photovoltaic Systems Maintenance of Insurance
Maintenance of insurance by Contractor as specified shall in no way be interpreted as relieving Contractor of its indemnification obligations or any responsibility whatsoever and the Contractor may carry, at its own expense, such additional insurance as it deems necessary.

Special Risks or Circumstances
City reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances.

Surety Bonds
Contractor shall provide the following Surety Bonds:

1. Performance bond
The Performance Bond shall be in a sum equal to the annual contract price. If the Performance Bond provides for a one-year warranty, a separate Maintenance Bond is not necessary. If the warranty period specified in the contract is for longer than one year a Maintenance Bond equal to 10% of the contract price is required. Bonds shall be duly executed by a responsible corporate surety, authorized to issue such bonds in the State of California and secured through an authorized agent with an office in California.

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Engie Services US, Inc.

October 2022 - Maintenance Services for the City of Salinas Solar Photovoltaic Systems Attachment B

PUBLIC WORKS DEPARTMENT
Maintenance Services for City of Salinas Solar
Photovoltaic Systems

REQUEST FOR PROPOSALS
Proposals must be received by 4:00 p.m. on May 20, 2022

2 SECTION 1.  NOTICE OF REQUEST FOR PROPOSALS
The City of Salinas(City) isrequesting Proposalsfrom qualified contractorsto provide professionalservices to realize inspection, preventive and responsive maintenance, and emergency repair services for City of Salinas solar photovoltaic systems (PV systems).

A complete response to this RFP must include four (4) copies of the bound written technical proposal and a single Adobe Acrobat PDF format version of the technical proposal saved to a flash drive in one sealed envelope or package with the project title (see below) and due date/time clearly marked on the exterior.

The price proposal (one original, one copy and a flash drive containing an Adobe Acrobat PDF version) must be in a separate sealed envelope or package, clearly marked asthe price proposal forthissolicitation, with firm name, due date and time.  The price proposal should include completed tables contained in Attachment A – Cost and Rate Schedules in this RFP, which is comprised of an Inspection, Preventive, and Routine Maintenance Cost Schedule and a Responsive Maintenance and Emergency Repair Services Rate Schedule.

Proposals (technical proposal and price proposal) shall be delivered to the address below by 4:00 PM Pacific Time on May 20, 2022.  Proposals must be entitled “RFP: Maintenance Services for City of Salinas Solar Photovoltaic Systems” and submitted in a sealed envelope or package; all submittals must be signed by an authorized representative with the authority to bind the selected firm to make such commitments to the City set forth in the response.

Late proposals will not be considered. Respondents take full responsibility for City’s receipt of Proposal.

Proposals should be submitted to:

Brian Frus, Water, Waste and Energy Division Manager
City of Salinas Public Works Department
200 Lincoln Ave
Salinas, CA 93901
(831) 758‐7485
[email protected]
SUBMITTALS WILL NOT BE ACCEPTED AFTER THIS DEADLINE.  SUBMITTALS TRANSMITTED BY FAX WILL NOT BE ACCEPTED UNDER ANY CIRCUMSTANCES.

This RFP may be downloaded for free from City of Salinas’ vendor portal of the e‐procurement site PlanetBids: https://www.planetbids.com/portal/portal.cfm?CompanyID=22949.   Note that failure to register as a prospective bidder for this RFP on the e‐procurement website, PlanetBids, will preclude you from receiving updates or amendments, if issued.  Questions regarding this RFP should be submitted through the Q&A section of the project page (on PlanetBids).

Interested firms or individuals are required to certify non‐discrimination in employment practices and identify any potential or perceived conflict of interest (personal and/or property interest in the subject scope of work).  Pre‐qualification is not required.  All interested firms and individuals responding to this RFP are required to comply with all applicable provisions of federal, state, and local law.

The City reservesthe right to (1) reject any or all responses, (2) waive informalitiesin a response, (3)select a firm or individual who has submitted fully responsive Proposal and who is determined by the City to be a professional, qualified firm or individual to be in the best interest of the City, and (4) take whatever action or make whatever decision it determines to be appropriate.   The City of Salinas assumes no obligation in this general solicitation and all costs and expenses incurred responding to this RFP shall be borne by the interested firms or individuals.
3 Public Works Contractor Registration
If the scope of services to be provided pursuant to this RFP includes a public works project as defined by Labor Code Section 1720, et seq. and 1770, et seq., then pursuant to Labor Code sections 1725.5 and 1771.1, all contractors and subcontractors that wish to bid on, be listed in a bid proposal, or enter a contract to perform public work must be registered with the Department of Industrial Relations.  No proposal will be accepted, nor any contract entered without proof of the contractor’s and subcontractors’ current registration with the Department of Industrial Relations to perform public work.  If awarded a contract, the proposer, and its applicable subcontractors, of any tier, shall maintain active registration with the Department of Industrial Relations for the duration of the Project. Please see Attachment B, Department of Industrial Relations’ State Labor Code.

SECTION 2.  BACKGROUND AND SCOPE OF WORK
The City of Salinas owns and operatesseven PV systems, located at five different locationstotaling 3.6MW in peak capacity. The systems are either on fixed ground mounts, horizontal trackers, or parking canopies.

All systems were put into service between March and June of 2016. Since that time, regular routine and preventative maintenance and detailed performance monitoring has been performed on the systems.

Please see Attachment C, PV System Drawings.

In general, the work to be performed consists of providing inspection, preventive and routine PV system maintenance, responsive maintenance, and emergency repair services for the City’s PV Systems at the locations listed below. Contract duration is for a five‐year period.

PV System Locations
Site Name Site Address
(Salinas, CA)
PV System
Rating (kWp‐DC)
Structure Type
Animal Shelter 144 Hitchcock Rd. 115 Ground Mount‐Tracker Industrial WWTP 240 Davis Rd at Salinas River 927 Ground Mount‐Fixed MRWPCA 146 Hitchcock Rd. 1,280 Ground Mount‐Tracker
Municipal Airport 30 Mortensen Ave. 127 T‐type Canopy
Permit Center 65 W Alisal St. 104 Post and Beam Canopy
RESBCT 146 Hitchcock Rd. 845 Ground Mount‐Tracker
Sherwood Hall 940 N. Main St. 184 T‐type Canopy
Covered Equipment
During the term of the agreement the Contractor shall perform all maintenance, repair and inspection services on the following components of the PV Systems (Covered Equipment):

1. Inverters

2. Transformers

3. Panels, AC and DC

4. Combiner boxes

5. Array structures and mounting hardware (Includes tracker mechanisms, joints, motors, dampers, controllers, etc.)

6. Internet connections (modems, routers, hubs, etc.)

7. PV cable, supports and management

8. Disconnect switches, AC and DC

9. AC and DC conductors

10. Customer side meters (data logging, integral to inverters, etc.) 4 11. Data acquisition systems

12. Data acquisition communication wire

13. Conduit

14. Penetrations to panels, inverters, etc.

15. Service lighting

16. Weather stations

17. Signage
Not included in contract:

1. Utility meters and switch gear

2. Roofing

3. Paint or finish

4. Concrete

5. Asphalt

6. Bollards
Inspection, preventive, and routine maintenance
The Contractorshall furnish all necessary staff,supplies, materials and equipment to provide the City with inspection, preventive and routine PV System maintenance services.

The Contractor shall carry on a program of continuing comprehensive preventive and routine maintenance designed to eliminate or reduce the incidence of potential malfunctions and extend the useful life of the City’s PV Systems. The program shall include regular inspection, testing, record keeping, cleaning, repair and replacement of components and equipment as necessary.

System Inspections ‐ General

1. At minimum the PV Systems shall be inspected annually. All Covered Equipment listed above shall be included in the inspections. Inspections shall be summarized in a Field Service Report which shall include photo documentation, a detailed check list of all items and components inspected and highlight any concerns, issues, problems, defects, safety concerns, damage and/or abnormal wear.

2. The Contractor shall identify whether defective, damaged, or worn components can be corrected under a current equipment warranty and note the location and relevant serial numbers of any such components in the Field Service Report

3. Check for ground erosion near the footings of a ground mount system

4. Confirm proper system signage is in place

5. Confirm electrical enclosures are only accessible to authorized personnel, are secured with padlocks or combination locks, and have restricted access signage

6. Check for corrosion on the outside of enclosures and the PV mounting systems

7. Check for cleanliness throughout the site, there should be no debris built up, in the inverter pad area, near panels, enclosures or such that they could cause fire

8. Check for signs of wildlife, nesting of birds, rodents, etc

9. Check for vegetation that may shade modules, is growing near panels or inverters, impedes access or poses a risk of fire

5 Tracker Inspection

1. At each inspection Contractor shall lubricate all unsealed friction points on the tracker frames in particular the gas springs joints on a semi‐annual basis

2. Check voltage inside the controller box

3. Use a digital level to check the calibration and positioning of the inclinometers

4. Check for loose hanging wires in the array

5. Check array for signs of wear, friction, abnormal contact or rubbing between parts

6. Check wind‐stow operation
I‐V Curve Measurement and Report
Contractorshall take I‐V curve measurements and produce a report for each system to include histograms of current, voltage, overlay plots of I‐V curves, irradiance, module temperature and identification of outlier results. Solmetic PVA series I‐V curve tracer and companion data analysis tool and reporting software or equivalent shall be used for all such measurements, analysis and reporting. I‐V curves shall be generated down to the string combiner level on each system.

Module Inspections using Infrared Imaging Technology
Based on results of I‐V curve report, the Contractor shall further isolate any abnormalities by conducting an Infrared Imaging survey on the suspected strings or arrays of modules. Contractor shall inspect the individual modules in the suspected string or PV Array(s) utilizing industry‐standard infrared (IR) imaging technology as necessary until the problem is isolated.

Visual Inspection of Modules
In addition to the above and as required to isolate string or array problems, the contractor shall walk through each row of the PV Arrays and check the PV modules for signs of the following damages:

1. Cracked or broken glass and/or underlying burn marks or patterns behind glass.

2. Significant discoloration or peeling of films on front or back face of module.

3. Significant discoloration of encapsulants.

4. Delamination of encapsulant and/or cells.

5. Detached or shorted junction box on back of module.

6. Burn marks and/or pattern visible on back sheet.

7. Cracking, discoloration, and/or delamination of back sheet.

8. Shorted and/or damaged lead wires.

9. Dented and/or bent module frame.

Electrical Equipment Inspection (AC & DC)
The Contractor shall inspect all AC and DC switchgear, disconnects, combiner boxes and inverters using infrared (IR) technology and voltage and current measurements to reveal any issues. Electrical equipment inspections shall be conducted at minimum semi‐annually. The Contractor shall report any damage to the City and note whether the damage can be corrected under a current equipment warranty. The Contractor shall include the location and relevant serial numbers of damaged electrical equipment to include in the Field Service Report.

AC‐Electrical Switchgear, Transformers, Conduit and Conductors: For common electrical switchgear components (overcurrent protection switches, disconnects, transformers, cabinetry, conduit and conductors).
6 DC Disconnect Switch Inspection: The Contractors shall check to make sure that the DC Disconnect switch is in the proper position and that all electrical connections are secure.

Combiner Box Inspection: The Contractor shall open each combiner box and check that no fuses have blown. The Contractor shall ensure that all electrical connections are tight. The Contractor shall use an infrared camera to identify any loose connections.

Inverter Inspection: Maintenance measures as prescribed by inverter manufacturer shall be followed. No actions that invalidate inverter warranty shall be undertaken by Contractor. The Contractor shall observe indicators on the faceplate of the inverter to ensure that the amount of power being generated by the PV System is typical of the conditions. The Contractor shall inspect the inverter, clean the inside of the cabinet, test fans for proper operation, check fuses, check torque on terminations, check gasket seal, confirm warning labels are in place, look for discoloration from excessive heat buildup check integrity of lightning arrestors, check continuity of systems ground and equipment grounding, check mechanical connection of the inverter to the wall or ground, check internal disconnect operation, verify that current software and/or firmware is installed, and clean filters. Inspect for any physical maintenance required, if present. If physical maintenance is present and requires further action, the Contractor, depending on the solution, will perform that required maintenance and include the service(s) performed in the Field Service Report.

Electrical Conduit Pipe Inspection: The Contractor shall visually inspect all conduit pipe to ensure the structural integrity of the pipe mounting structures and the pipe itself. The Contractor shall check the conduit pipe connections and mounts to ensure they are tight and secure.

Cable Inspection: The contractor shall inspect the cabling for signs of cracks, defects, pulling out of connections, overheating, arcing, short or open circuits, and ground faults. Contractor shall test cabling for integrity of insulation (resistance).

Module Wire Management: The Contractor shall inspect the components that hold the PV module wires (cabling) and prevent undesired movement, which can cause wires to be compromised and lead to electrical faults.

Grounding Continuity: The PV System’s grounding equipment shall be checked for continuity to earth as per the NEC.

General Cleaning
Remove dust, dirt and debris from outside cabinets of combiner boxes, inverters, transformers, and disconnect switches on semi‐annual basis.

Module Cleaning
Contractor shall choose cleaning method that complies with module manufacturer’s instructions. No method utilized by the Contractor shall void the module warranty. Cleaners used on the modules shall be mild water‐soluble soaps or detergents. The Contractor shall not use high‐pressure water, hard bristled brushes, or any types of solvents, abrasives, and harsh detergents.

7 Module Cleaning Cycles
Contractor to provide cleaning services during the following selected months:

Salinas, California – Rural Agricultural Location with Winter Rains Jan Feb March April May June July Aug Sept Oct Nov Dec
X    X
Cleaning dates based on the City’s geographical location where rainy winters and dry, dusty summers are common, the Contractor may provide suggested alternative dates along with supporting reasoning.

Handling of Modules to Prevent Damage
Under no circumstances shall Contractor walk or lean on modules or set equipment atop. Contractor shall replace mishandled module(s) if a power loss of more than 20% is indicated.

If PV Array is of flat style with little or no access pathways, then Contractor shall use minimum 4” thick rigid polystyrene sheets (or other approved method) to create a temporary means to access interior sections of PV Array(s).

Monitoring Instrumentation, Telemetry and Weather Station Inspection The Contractor, shall check the monitoring, telemetry and weather station equipment per manufactures guidelines to ensure that they are operational and within the manufacturer’s specifications. Calibration of meters, sensors, and weather instruments shall be checked and corrected annually if necessary.

Contractor shall use commercially available means to ensure and monitor the internet connectivity of the Monitoring and Telemetry equipment.  Contractor shall be given access to the PV Systems data portal such that Contractor may make use of data regarding the performance of, and output from the PV Systems to perform remote diagnosis and trouble shooting.

Data Ownership: All Data resulting from PV maintenance services generated and recorded, including that stored on a clouded server is exclusively the City’s property.

Responsive Maintenance and Emergency Repair
All work not identified as Preventive and Routine Maintenance will be considered Responsive Maintenance or Emergency Repair and shall be performed by the Contractor at the direction of the City.

These include situations where the PV System(s) require corrective measures encountered during routine inspection, repairs due to equipment failure or damage which may cause decreased performance, and/or pose danger to the public, personnel, and/or property.

Responsive Maintenance shall be handled as follows: Contractor shall provide a written estimate and scope of work to City outlining the work to be performed, a schedule that defines the work including start and end dates and the associated fee that includes a breakdown of labor hour, material cost, and any other details that may be requested by the City in order to restore the PV System(s) to normal operational condition. When requested by the City, the Contractor shall submit a proposal provide a response with staff on site within five working days. Responsive Maintenance work is performed on a time and materials basis according to the labor and billing ratessubmitted in response to this RFP. Contractor’s proposalshall indicate any items that are covered under warranty.

For Emergency Repair directed by the City, Contractor shall take such immediate action as may be reasonable and necessary to prevent, avoid, or mitigate injury, damage, or loss to the PV System(s) and any adjacent and/or adjoining structures. The Contractor shall respond with personnel on‐site within 24 hours or less. If work is ofsuch urgency that an estimate and scope of work cannot be prepared in a timely manner, the City may give oral direction to the Contractor. The Contractor shall submit a proposal for all 8 urgent or emergency work within 2 working days from the time the oral direction is issued with the understanding that it may also include work already performed.

The Contractor shall, as soon as possible, update the City on relevant information regarding the Emergency. If requested, the Contractor shall provide the City with a report after any incident involving safety issues. Contractor shall make reasonable efforts to minimize any costs associated with remedial action in case of such an Emergency.

Contractor shall perform Emergency Repair work on a time and materials basis according to the labor and billing rates submitted in response to this RFP in the tables provided in Attachment A. Once emergency (and danger to the public, personnel, and/or property) has been mitigated, Contractor shall proceed according to the procedures outlined for Responsive Maintenance.

Primary Contact and Consultation
The Contractor shall designate representatives in the organization, one of whom shall be always available to the City for as a primary contact and for consultation. This may include but not limited to review of cost estimates for PV Systems Responsive Maintenance or Emergency Repair, diagnosis, technical aspects of services performed and PV System operational characteristics.

SECTION 3.  MINIMUM QUALIFICATIONS AND CRITERIA FOR EVALUATION The purpose of this RFP is to obtain proposals from firms qualified and capable of maintaining and inspecting PV Systems safely. To be considered, a firm must possess staff who have received training, certifications and demonstrated skills and knowledge in the construction and operation of electrical equipment and installations and understands the hazards involved. Registration, training and certificates at minimum include possession of a CSLB C‐10 Electrical Contractors License and NABCEP PV Installer Certification, but may also include California Professional Engineering Registration and training and certifications from IBEW and OSHA.

All personnel and individuals must be familiar with the skills and techniques necessary to identify exposed live parts from other parts of electrical equipment, the skills and techniques necessary to determine the nominal voltage of exposed live parts, the clearance distances specified by OSHA in the Code of Federal Regulations (CFR) Part 1 910.333 (“Working on or near energized parts”) and the corresponding voltages to which the qualified person will be exposed, the pertinent sections of the NEC, the characteristics of PV sources and hardware typically used in PV systems, and the characteristics of the hardware used in the PV systems the person is working on.

The contractor’s employees must be familiar with, and committed to safety procedures in order to prevent accident or injury. Major safety requirements during PV servicing include the proper use of lockout/tagout procedures, the use of personal protective equipment (PPE), procedures for safely disconnecting live circuits, and appropriate observation of and compliance with all PV‐specific system signage and warnings

9 The following minimum qualifications and will be evaluated on the following criteria:

1. Demonstrated knowledge and understanding of project scope.

2. Ability to bring a complete, competent team addressing all necessary disciplines.

3. Quality of the information presented in the Proposal and completeness, relevance, and organization of the information and materials presented.

4. Qualifications of maintenance team members to lead the project effort.   This must include identification of the actual team members who will be assigned to this project, rather than available staff.

5. Response of references.

6. Clarity, consciousness, and organization of the proposal.

Each proposal will be initially evaluated and ranked by City of Salinas. Evaluation factors to be considered, and the corresponding weight for each, shall be as follows:

EVALUATION CRITERIA Weight
Understanding of Scope of Work to be Done 25%
Experience with Similar Kinds of Work   25%
Quality of Staff Designated to Project 20%
Capability of Developing Innovative or Advanced Techniques 10% Demonstrated Technical Ability   20%
TOTAL: 100%
A selection committee will review the Proposals submitted in response to this RFP and may request interviews with some firms or individuals.  The selection committee will rank the top firms and individuals based on the Proposals and interviews (if conducted).

SECTION 4.  REQUEST FOR PROPOSALS: RESPONSE FORMAT
The Contractor shall submit information with explanatory narratives to clearly demonstrate their understanding of and approach to accomplishing the complexity and magnitude of requirementsset forth in the RFP. Each of the topics below must be included as part of the submission:

1. A complete description of the work tasks the Contractor will undertake to complete the work set forth in the Proposal.

2. Description of experience with procedures, various subtasks and equipment comprising the PV Systems to include:
a. System diagnosis
b. Electrical inspections and testing
c. I‐V Curve Measurement and Reporting
d. Infrared Imaging Technology
e. Calibration of meters, sensors, and weather instruments f. Data monitoring
g. Plans and procedures for response to routine, responsive and emergency service requests.
10 3. Demonstrate experience operating, and maintaining PV Systems similar in scope, size, type, and complexity to those identified in the RFP. Include up to three examples of similar work in the past five years.

4. Resumes, including responsibilities, background and relevant experience of key personnel that will be working directly on this project.

5. Names of three to five individuals that can be contacted as references concerning the capabilities of your firm to perform on this project for up to five (5) solar PV projects of similar size, contract type, complexity, and scope.

6. Company history.

7. Additional information or materials that you believe communicate the capabilities of your firm to perform this project.

8. A completed Labor and Billing Rates sheet attached to this RFP that includes the fixed cost items and rates for labor and material mark up for time and material work (in a sealed envelope).

SECTION 5.  GENERAL PROVISIONS
Each prospective firm or individual submitting a Proposal in response to this RFP agrees that the preparation of all materials for submittal to the City and all presentations are at the firm’s or individual’s sole cost and expense, and the City will not, under any circumstance, be responsible for any costs or expenses incurred by a prospective firm or individual.  In addition, each prospective firm understands and agrees that all documentation and materials submitted with a Proposal will remain the property of the City and will become a public record; the City will assume ownership of all documents and deliverables submitted by prospective firms and individuals.

Release of this RFP does not commit the City to the selection of a firm or an individual and does not commit the City to enter into any agreement with a firm or an individual identified by the City through this process as the most qualified to provide the services described in this RFP.

Prospective firms and individuals are responsible for making necessary investigations and examination of records.   Failure to do so will not act to relieve any condition of a potential professional services agreement or the requirements set out in this RFP.   It is mutually understood and agreed that the submission of a Proposal shall be considered evidence that the prospective firm has made such examinations and investigations.  No request for modification of a Proposal shall be considered after its submission on the grounds that the prospective firm or individual was not fully informed as to any fact or condition.

A prospective firm or individual may withdraw their proposal at any time prior to the date and the time which is set forth herein as the deadline for submittal of Proposals.

The City reserves the right to request additional information at any time from all prospective firms or individuals as deemed necessary by the City to evaluate the proposals.  This process may not be used, however, as an opportunity to submit missing documentation or to make substantive revisions to the original Proposal.

If a prospective firm or individual has a question or requests clarification pertaining to this RFP, such question or request for clarification must be put in writing and submitted through the Q&A section of the project page (on PlanetBids).  The City will provide all prospective firms or individuals who have registered as Prospective Bidders for this project on the e‐procurement site, PlanetBids, with a list of all questions and requests for clarification, as well as the answers to the questions and responses to the requests for clarification.
11 All Proposals will remain in effect and legally binding for at least one hundred twenty (120) days from the date of submission.

This Request for Proposals shall be governed in accordance with the laws of the State of California and the jurisdiction of any disputes hereunder shall be had in Monterey County or in the appropriate federal court with jurisdiction over the matter.

Unless otherwise directed, all communications regarding this RFP, including all questions, should be submitted through the Q&A section of the project page (on PlanetBids).

SECTION 6.  TENTATIVE SCHEDULE
The following is the City’s tentative schedule for selection of a Contractor:

April 22, 2022     RFP Release Date
May 16, 2022     Deadline for Submittal of Questions or Requests for Clarification May 20, 2022     RFP Response Submittals Due to City
May 23 to 27, 2022   City Staff Review
May 31 to June 3, 2022   Interviews (if necessary)
June 21, 2022     Anticipated Award of Professional Services Agreement Attachments:

Attachment A ‐ Cost and Rate Schedules
Inspection, Preventive, and Routine Maintenance Cost Schedule Responsive Maintenance and Emergency Repair Services Rate Schedule Attachment B ‐ Department of Industrial Relations State Labor Code Attachment C ‐ PV System Drawings
Municipal Airport
Permit Center
Sherwood Hall
Industrial WWTP As‐builts
Hitchcock Rd As‐builts (MRWPCA, RESBCT and Animal Shelter) Attachment D – Sample Agreement and Insurance Requirements

Attachment A – Cost and Rate Schedules
Inspection, Preventive, and Routine Maintenance Cost Schedule Expense Category Quantity Unit Unit
Cost
Extended
Annual
Total
1 Module Cleaning 2 Per
Event
2 General System and Tracker Inspections 1 Per Year
3 I-V Curve, Module, String and Array Inspections 1 Per Year 4 Electrical Inspection and General Cleaning 2 Per Year 5 Monitoring, Telemetry and Weather Station
Inspections 1 Per Year
6 Consumables 1 Per Year

Attachment A – Cost and Rate Schedules
Responsive Maintenance and Emergency Repair Services Rate Schedule Labor or Item
Description
Minimum Required Certifications and Typical
Tasks
Unit Rate or
Amount
PV Electrical
Journeyman Technician
Diagnostics, visual inspection, testing. Module,
inverter, and fuse/breaker replacement, conduit
routing, wiring, and ground fault repair. Trained in
arc-flash, lock-out/tag-out, and other special
protective equipment and procedures. NABCEP
PV Installer certification; experience in the design
of medium-voltage electrical PV Systems.
$/hr
PV Electrical Apprentice
Technician
Diagnostics, visual inspection, testing. Operate,
maintain, and repair photovoltaic equipment.

Module and fuse/breaker replacement, wiring,
and ground fault repair. NABCEP PV Installer
Certification.
$/hr
Mechanic Maintenance and repair/replace of tracking
mount components.
$/hr
Network/IT Internet/network and monitoring equipment
repair. Knowledge of specific monitoring devices,
network connections, wireless/cellular modems.

Knowledge of Modbus, DNP3, and other
protocols. HMI operator interfaces.
$/hr
Pest Control Remove any and all nesting vermin. Trained in safe handling of animal and detritus. Trained in
any required pesticide applications.
$/hr
Engineering Diagnostics, specifications, drawings, modeling and analysis, codes, and standards. Preferred B.S.
in engineering; registered PE; NABCEP PV Installer
Certification; knowledge of IEEE, NEC, NESC, and
other codes & standards for PV Systems; required
level of errors and omissions standards.
$/hr
Administrative Record-keeping, service confirmation,
correspondence. Must be experienced with
management of contractors and quality.
$/hr
Mileage $/mile
Material mark-up
percentage
%
Sub Contract mark-up
percentage
%
Lift fee $/day
Attachment - B
Attachment B
DEPARTMENT OF INDUSTRIAL RELATIONS’ STATE LABOR CODE
Labor Law Requirements
(CCR Title 8, Section 16421)
This public works project is subject to compliance monitoring and enforcement by the California Department of Industrial Relations (“DIR”). All work shall be in accordance with wage scales and applicable determinations made by the Director of the DIR, as provided by Article 2, Chapter 1, Division 2, Part 7 of the Labor Code of the State of California, commencing with §1771.

Penalties for violations may be applied by the DIR pursuant to the Labor Code §1813 and §1815. The Contractor shall indemnify, hold harmless, and defend the City (with counsel reasonably approved by the City) against any claim for damages, compensation, fines, penalties, or other amounts arising out of the failure or alleged failure of any person or entity (including Contractor and its subcontractors) to pay prevailing wages as determined pursuant to Labor Code §1720, and hereby agrees to, §§1771-1774; to employ apprentices pursuant to Labor Code §1777.5 et seq., and/or to comply with the other applicable provisions of Labor Code §1720 et seq., §§1771-1774, §1777.5 et seq., and the implementing regulations of the DIR in connection with the scope of work. This indemnification section shall survive the expiration of the Term.

The Federal and State Labor Law requirements applicable to the Agreement are composed of, but not limited, to the following items:

1. Payment of Prevailing Wage Rates: All contractors, including subcontractors, shall pay no less than the prevailing rate of wages (Labor Code §1775), including the rates for holidays and overtime work (Labor Code §§1813 and 1815), to all workers employed in the execution of the contract (Labor Code §1774), pursuant to Labor Code §§1720-1784. The prevailing rates are those issued as wage determinations by the DIR, for each craft, classification and type of work. The current wage rate information can be found at the DIR’s website at:
https://www.dir.ca.gov/oprl/DPreWageDetermination.htm.

Copies of the prevailing rate of per diem wages are on file at City’s Public Works Department (principal place of office). Contractor shall post a copy of the determination of the Director of DIR of the prevailing rate of per diem wages at each job site.

2. Apprentices: Contractor and subcontractors shall employ registered apprentices on this public works Agreement pursuant to Labor Code §1777.5. All contractors on this project (prime and subcontractors) are required to submit the Division of Apprenticeship Standards’ (“DAS”) Public Works Contract Award Information (DAS 140) form to all applicable apprenticeship committees no later than 10 days before commencing work. Additionally, all contractors are required to request registered apprentices (DAS 142 form).

Penalties for failure to pay prevailing wages (for non-exempt projects) and failure to employ apprentices include forfeitures and debarment under Labor Code §§1775 and 1777.7.

3. Certified Payroll Records: All contractors, including subcontractors, must maintain and file certified payroll records (“CPRs”) pursuant to Labor Code §1776. Additionally, all contractors and subcontractors must furnish certified payroll records into the DIR’s Electronic Certified Payroll Reporting (“eCPRs”) database
(https://efiling.dir.ca.gov/eCPR/pages/eCPROnlineForm.jsp). Penalties apply to Contractor and any Subcontractors for failure to do so under Labor Code §1777.

Attachment - B

4. Subcontracting: Contractors are required to list all subcontractors hired to perform work on this public works agreement.

5. Proper Licensing/Registration: All contractors and subcontractors are required to be properly licensed, in accordance with the Provisions of Chapter 9 of Division 3 of the Business and Professions Code and subject to the requirements of §4104 of the Public Contract Code. In addition, all contractors including subcontractors must submit proof of current registration to perform public work, pursuant to Labor Code §1771.1. Contractors are required to be properly licensed and to require all subcontractors to be properly licensed. Penalties for employing workers while unlicensed under Labor Code §1021 and under the California Contractors License Law, found at Business and Professions Code §7000 et. seq.

6. Job Site Notices: Contractors are required to post all required notices (posters) on the job site in an area accessible to all workers, including subcontractors. Posters must be readable and placed in visible areas allowing workers to access the posters before, during, and after work shifts. Jobsites with multiple locations must include a portable poster board to ensure continued access to the information. Posters placed in foreman, supervisor, or employee vehicles, in an offsite job trailer, or inside a temporary restroom do not meet the posting requirement. Posters may be printed from the DIR’s website at: http://www.dir.ca.gov/wpnodb.html.

7. Nondiscrimination in Employment – Equal Employment Opportunity (“EEO”):

Employment discrimination is prohibited, pursuant to Labor Code §1777.6, the Government Code, and Title VII of the Civil Rights Act of 1964.

8. Kickbacks Prohibited: Contractors and subcontractors are prohibited from recapturing wages illegally by accepting or extracting “kickbacks” from employee wages pursuant to Labor Code §1778.

9. Acceptance of Fees Prohibited: Contractors and subcontractors are prohibited from accepting fees for registering any person for public work or for filling work orders on public works contracts, pursuant to Labor Code §§1779 and 1780.

10. Unfair Competition Prohibited: Contractors and subcontractors are prohibited from engaging in unfair competition as specified under Business and Professions Code §§17200 - 17208.

11. Workers’ Compensation: Contractors and subcontractors must be properly insured for Workers’ Compensation under Labor Code §1861. Contractor hereby represents that Contractor is aware of the provisions of Section 3700 of the Labor Code, which require every employee to be insured against liability for Workers’ Compensation or to undertake self-insurance in accordance with the provisions of that Code, and Contractor will comply with such provisions before commencing the performance of the work of this agreement.

12. OSHA: Contractors and subcontractors must abide by the Occupational, Safety, and Health Laws and regulations that apply.

Agreement for Services v. January 2021
Engie Services US, Inc.

October 2022 - Maintenance Services for the City of Salinas Solar Photovoltaic Systems Attachment C
City of Salinas
Maintenance Services for City of
Salinas Solar Photovoltaic Systems
Technical Proposal
May 20, 2022
Prepared For:

City of Salinas Public Works Department
200 Lincoln Avenue
Salinas, CA 93901
Brian Frus
Water, Waste and Energy Division Manager
831-758-7485
[email protected]
Prepared By:

ENGIE
500 12th Street, Suite 300
Oakland, CA 94607
Jamal Aboueljoud
Director, Customer Care Field Services
916-358-0024
[email protected]
© 2022 ENGIE
This proposal, in whole or in part, is to be used only for evaluation purposes. If the proposal is accepted and a contract entered into then, to the extent, federal or state law requires disclosure, advance notice to ENGIE Services U.S. Inc. is requested with a right to oppose or seek to narrow the disclosure. The data subject to this restriction is contained in all sheets marked, “Use or disclosure of data contained on this sheet is subject to the restriction on the title page of this proposal or quotation.”
ENGIE Services U.S. Inc. is not a municipal advisor and cannot give advice with respect to municipal securities or municipal financial products. This information is provided for educational purposes about possible financing options and is not the provision of advice, or a recommendation to pursue, any financing option. Consult with your municipal advisor or financial advisor about the financing option appropriate for your situation.

ENGIE Services U.S. Inc. can provide information to your municipal advisor or financial advisor about the hypothetical assumptions and educational scenarios used in these materials. To ensure compliance with requirements imposed by the IRS under Circular 230, we inform you that any U.S. federal tax advice contained in this communication (including any attachments), unless otherwise specifically stated, was not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any matters addressed herein.

The information contained herein is general in nature and based on authorities that are subject to change. ENGIE Services U.S. Inc. recommends that you consult your tax adviser to understand its applicability to specific situations. ENGIE Services U.S. Inc., the Respondent, is a wholly owned subsidiary of ENGIE Holdings Inc.

Table of Contents
Table of Contents
Cover Letter.........................................................................................................1

1. Work Tasks .................................................................................................................. 3

2. Experience with Procedures ..................................................................................... 4

2.1 System Diagnosis................................................................................................ 4

2.2 Electrical Inspections and Testing .................................................................... 5

2.3 I-V Curve Measurement and Reporting ........................................................... 7

2.4 Infrared Imaging Technology............................................................................. 9

2.5 Calibration of Meters, Sensors, and Weather Instruments ........................... 9

2.6 Data Monitoring ................................................................................................... 9

2.7 Plans and Procedures.......................................................................................10

3. Experience with O&M...............................................................................................11

4. Resumes.....................................................................................................................12

5. References.................................................................................................................16

6. ENGIE History............................................................................................................17

7. Additional Information ..............................................................................................18

8. Labor and Billing Rates ............................................................................................19 Cover Letter
Maintenance Services for City of Salinas Solar Photovoltaic Systems 1 Cover Letter
May 20, 2022
Brian Frus
Water, Waste and Energy Division Manager
City of Salinas Public Works Department
200 Lincoln Avenue
Salinas, CA 93901
RE: Maintenance Services for City of Salinas Solar Photovoltaic Systems Dear Mr. Frus:

ENGIE Services U.S. (ENGIE) is pleased to submit the enclosed proposal to the City of Salinas for a Photovoltaic (PV) Systems Preventative Maintenance contract. We firmly believe that ENGIE is the ideal partner for your solar PV system maintenance and energy monitoring needs.

Unmatched experience assisting public and private sector agencies with technical solutions: For over 48 years, ENGIE has engineered, financed, and implemented comprehensive energy programs as the prime design-build general contractor for more than 500 public sector agencies in the U.S., including over 150 in California. Our North American solar PV portfolio consists of more than 4,200 MW of customer-sited and utility-scale solar PV in operation and development. In California alone, our team has delivered over 250 MW of customer-sited solar PV including more than 800 sites currently under maintenance agreements.

Our Operation and Maintenance (O&M) team is comprised of technicians with many years of experience working as warranty technicians for inverter vendors. We are job creators, generating California solar jobs though apprenticeship programs throughout the State. Our involvement in training and educating, of not only our apprentices but also our customer’s personnel, ensures appreciation and interest for the next generation of solar industry workers.

Our 28-person team is located across California—including staff in Salinas— who can quickly react to your needs.

Excellent safety record: ENGIE is committed to safe conditions for everyone on every job site and is proud of our industry-leading safety record. All of our ENGIE Journeymen are CA certified electricians. Every worker is required to take NEC and NFPA70E training and annual refresher courses and is OSHA 30 certified. ENGIE has a comprehensive electrical safety program and an energized work permit review process to ensure all work is done in the safest manner and that all workers are adhering to our safe work policies.

Maintenance Services for City of Salinas Solar Photovoltaic Systems 2 Customer Centric Approach: We strive to ensure our customers have the best experience possible and as a seamless part of their everyday operations. At a minimum, we reach out annually for feedback from our customers on ways to improve our approach and operations— helping to confirm our customer’s top priorities are recognized and addressed. We have standard operating procedures for both O&M and monitoring services to ensure repeatable, streamlined execution to quickly address customer concerns.

On the Operations and Maintenance side, our O&M Project Coordinator calls ahead to schedule all planned activities including panel washing and preventative maintenance. Your dedicated O&M technician will promptly report to the site contact and perform the planned work. All panel washing and preventative maintenance reports will be generated after the work is performed.

Additionally, all reports are housed on a dedicated server for you to retrieve any time. If an accident to the PV system occurs (e.g., truck damage to carport) or there is a request outside of the contractual scope, upon request, our technicians will arrive on site to assess the damage and provide an emergency safe-off and repair proposal to address the issue.

On the monitoring side, we have a web-based system (UtilityVision®) and team who monitor the performance of each PV system and manage all alarms and tickets that are manually or automatically generated. We will first attempt to address the ticket remotely. If we are unable to address the issue remotely, the ticket will be immediately assigned to your dedicated service technician who will respond and schedule a site visit to take care of the issue. All our customers have access to an online dashboard that allows them to view real-time and historical data. In addition, the dashboard includes features to contact customer support should any questions or issues arise. We provide our customers with UtilityVision training and can provide refresher courses upon request.

We, here at ENGIE, look forward to the opportunity to further showcase the value of our partnership with the City of Salinas after being selected as your preferred energy partner.

Should you require any clarification, please do not hesitate to reach out to your primary point of contact:

Jamal Aboueljoud
Director, Customer Care Field Services
500 12th Street, Suite 300, Oakland, CA 94607
916-358-0024
[email protected]
Sincerely,
Courtney Jenkins
Vice President & General Manager
Authorized to Sign on Behalf of ENGIE

1. Work Tasks
Maintenance Services for City of Salinas Solar Photovoltaic Systems 3

1. Work Tasks
ENGIE will provide inspection, preventative and routine PV systems maintenance, responsive maintenance, and emergency repair services for the City’s PV Systems as detailed in Section 2.

Background and Scope of Work in the RFP at the locations listed below. ENGIE will provide the O&M Services with respect to the Generating Facilities at the Project Locations, for up to five (5) years:

Site Names Site Address
(Salinas, CA)
PV System
Rating (kWp-DC) Structure Type
Animal Shelter 144 Hitchcock Rd. 115 Ground Mount-Tracker Industrial WWTP 240 Davis Rd. at Salinas River 927 Ground Mount-Fixed MRWPCA 146 Hitchcock Rd. 1,280 Ground Mount-Tracker
Municipal Airport 30 Mortensen Ave. 127 T-type Canopy
Permit Center 65 W Alisal St. 104 Post and Beam Canopy
RESBCT 146 Hitchcock Rd. 845 Ground Mount-Tracker
Sherwood Hall 940 N. Main St. 184 T-type Canopy
PV System Locations
The primary contact for the City for all matters will be:

Carrie Dixon, P.E.

PV Operations & Maintenance Manager
M. 415.361.9488
[email protected]

2. Experience with Procedures
Maintenance Services for City of Salinas Solar Photovoltaic Systems 4

2. Experience with Procedures
Included are the following descriptions of procedures, subtasks and equipment comprising the City of Salinas’ Systems.

2.1 System Diagnosis – Semi-Annual

2.1.1 Solar Panel Inspection and Cleaning
Safety First
• Walking on solar panels will not be allowed at any time for any reason. Proper equipment, PPE and planning is required for all work to be performed. • Polarized safety glasses will be required at all times when working above solar panels.

Array Visual Inspection – Semi-Annual
• Visually inspect arrays, panel mounting clips,
solar panel ground clips, solar panel ground
wire, DC string wiring, and DC combiner boxes.

Note any rust, missing labels, clips, wire
chaffing/deterioration, hanging wires, water
infiltration, structural damage, or other problems.
• Identify broken modules on a site plan for follow
up replacement.
• Take ‘Before Washing’ photos.

Array Cleaning – Semi-Annual
• Proper lift equipment will be used as needed when reaching above solar modules.
• Parking lot canopies will be required to be roped-off/isolated from any vehicles. • Water used for cleaning will be near ambient temperature. • Will avoid washing broken solar panels to prevent electrical shortage. • Clean modules surface & frames, according to solar panel manufacturer’s warranty specifications.
• ENGIE is proud to be
one of the first
companies in North
America to offer state-ofthe-art services using a
solar cleaning robot. The
robot provides a safe
and efficient cleaning
method without harming your panels and it also
provides a superior quality of cleaning.

Maintenance Services for City of Salinas Solar Photovoltaic Systems 5

2.2 Electrical System Inspections and Testing (AC & DC) – Semi-Annual ENGIE Services U.S. will provide the following O&M Services during the term.

System Inspection Preventative and Routine Maintenance:
• Inspect PV module arrays, panel mounting, wiring, and array support structure.

Check PV Modules for:
– Cracked or broken glass
and/or underlying burn marks
or patterns behind glass.
– Significant discoloration or
peeling of films on front or
back face of module.
– Significant discoloration of
encapsulants.
– Delamination of encapsulant
and/or cells.
– Detached or shorted junction
box on back of module.
– Burn marks and/or pattern visible on back sheet.
– Cracking, discoloration, and/or delamination of back sheet. – Shorted and/or damaged lead wires.
– Dented and/or bent module frame.

Monitoring Data Acquisition System:
• Inspect monitoring equipment and weather stations to ensure in good working order.
• Clean exterior of Weather Station enclosure.
• Open enclosure, inspect and clean interior.
• Inspect all conduit penetrations for proper support & water tightness. • Inspect signage integrity.
• Inspect Pyranometer's mounting plate integrity.
• Measure Pyranometer's mounting angle.
• Clean Pyranometer top surface of sensor eye.
• Inspect module Temperature Sensor installation.
• Calibrate/replace environmental sensor.

Maintenance Services for City of Salinas Solar Photovoltaic Systems 6 Electrical Inspection:
• Prior to preventative maintenance visits remotely evaluate inverter efficiency and system performance against predictive models to confirm the amount of power being generated by the PV System is typical of the conditions. Confirm firmware is up to date. Identify any suspected problems to be looked for during preventative maintenance.
• Remove dust, dirt and debris from outside cabinets of combiner boxes, inverters, fans intake, transformers, and disconnect switches. Note any problems with rust, corrosion, or wildlife.
• Check for the presence and condition of labels and safety signage. • Photo the readings on HMI and note any problems with display. • Turn off inverter, remove covers, and inspect gaskets for proper seal • Visually inspect the interior of the inverters for damage, discoloration, or corrosion on any internal component such as wire termination points, wire insulation, contactors, door gasket material, fuses, bus bars, etc. • Take thermal images to inspect string wiring, and feeder terminations for signs of overheating while under load.
• For string inverters: check mounting bracket integrity at backside of the inverter to the unistrut racking, wall or steel column.
• With system operating, listen for any unusual sounds from each inverter or other components.
• Inspect electrical conduit for proper support, ductseal and signs of any water intrusion. • Check grounding system for signs of lightning strike, theft or damage.

Electrical Testing:
• Inverter Maintenance: Follow manufacturer’s recommendation from Operation & Maintenance Manuals. Typically, this includes:
– Test fans for proper operation, check fuses, check
and mark torque on terminations, test power
supplies output voltage is within range. Check
disconnects for proper operation. Check integrity
of surge suppressors, continuity of systems
ground, and equipment grounding.
– For central inverter systems: perform solmetric IV
testing at combiner boxes with inverter off. Test through the string circuit to confirm all string fuses are good. Torque all electrical connections to spec. • Ensure equipment is bonded to ground.
• Confirm the sum of the inverter output matches the Net Generation Output Meter reading.
• Torque and mark wiring connections where needed.

Maintenance Services for City of Salinas Solar Photovoltaic Systems 7 Tracker Inspection:
• Inspect and lubricate all unsealed friction points on the tracker frames, in particular the gas springs joints on a semi-annual basis. • Check voltage inside the controller box.
• Use a digital level to check the calibration and positioning of the inclinometers. • Check for loose hanging wires in the array.
• Check array for signs of wear, friction, abnormal contact, or rubbing between parts. • Check wind-stow operation.
• Inspect tracker control boxes and clean any debris from enclosures. • Observe tracker or any out of the order movement during operation. • Check for the presence and condition of labeling.
• Inspect condition of tracker actuators.
• Visually inspect the mounting hardware.
• Conduct preventative maintenance as prescribed by OEM.

2.3 I-V Curve Measurement and Reporting
Contractor will take I‐V curve measurements and produce a report for each system to include histograms of current, voltage, overlay plots of I‐V curves, irradiance, module temperature, and identification of outlier results. Solmetic PVA series I‐V curve tracer and companion data analysis tool and reporting software or equivalent shall be used for all such measurements, analysis, and reporting. I‐V curves shall be generated down to the string combiner level on each system.

Based on results of I‐V curve report, our technician will identify causes of any abnormalities by conducting an Infrared Imaging survey on the suspect modules within the array.

2.3.1 Reporting
Our annual Comprehensive Maintenance Report is created using the same process described above for corrective and reactive maintenance and includes, but is not limited to, the following:
• Executive Summary: Includes an overview and summary of services and system performance issues.
• Service Summary: A general overview of system performance, including any items to keep an eye-on over the coming year. This summary will provide tables indicating dates of services performed at each site as well as identify issues found requiring follow-up such as broken solar panels or missing safety placards. • Site Report Summary: Detailed testing results and photographs organized by site/array/equipment label as applicable.

Maintenance Services for City of Salinas Solar Photovoltaic Systems 8 An annual meeting with the City facilities staff will be scheduled to review the Comprehensive Maintenance Report including a review of the PV System Energy Performance and City Energy Usage summary.

2.3.2 Responsive/Corrective and Reactive Maintenance
Our field personnel are outfitted with smart phones and tablets on which we utilize a custom application to create all our service reports in real time. For corrective or reactive maintenance, the reports include time-stamped originating alert information, jobsite safety checklists, the technician’s evaluation notes, details on repairs made, parts used, and photographs. This report is available instantly to our management and after a brief review is shared with the City either via email, ENGIE SharePoint customer maintenance website, or Dropbox based on customer preference.

Responsive Maintenance shall be handled as follows: Contractor shall provide a written estimate and scope of work to City outlining the work to be performed, a schedule that defines the work including start and end dates and the associated fee that includes a breakdown of labor hour, material cost, and any other details that may be requested by the City in order to restore the PV System(s) to normal operational condition. When requested by the City, the Contractor shall submit a proposal provide a response with staff on site within five working days.

Responsive Maintenance work is performed on a time and materials basis according to the labor and billing rates submitted in response to this RFP. Proposal shall indicate any items that are covered under warranty.

Emergency Repair directed by the City: Contractor shall take such immediate action as may be reasonable and necessary to prevent, avoid, or mitigate injury, damage, or loss to the PV System(s) and any adjacent and/or adjoining structures. The Contractor shall respond with personnel on‐site within 24 hours or less. If work is of such urgency that an estimate and scope of work cannot be prepared in a timely manner, the City may give oral direction to the Contractor. The Contractor shall submit a proposal for all urgent or emergency work within 2 working days from the time the oral direction is issued with the understanding that it may also include work already performed.

The Contractor shall, as soon as possible, update the City on relevant information regarding the Emergency. If requested, the Contractor shall provide the City with a report after any incident involving safety issues. Contractor shall make reasonable efforts to minimize any costs associated with remedial action in case of such an Emergency. Contractor shall perform Emergency Repair work on a time and materials basis according to the labor and billing rates submitted in response to this RFP in the tables provided in Attachment A. Once emergency (and danger to the public, personnel, and/or property) has been mitigated, Contractor shall proceed according to the procedures outlined for Responsive Maintenance.

Maintenance Services for City of Salinas Solar Photovoltaic Systems 9

2.4 Infrared Imaging Technology
All Engie field technicians have received at minimum Level 1 Thermography Training to use thermal imaging cameras properly for the specific tasks pertaining to solar maintenance. Our crews are equipped with FLIR One Pro and FLIR C3/C5 thermal cameras. Thermography is used on all terminations in inverters, combiner boxes, feeders, breakers, ACDS fuses. IR is performed only as needed on solar panels in response to problems indicated by I-V analysis from monitored data or solmetric IV testing.

2.5 Calibration of Meters, Sensors, and Weather Instruments Our remote monitoring system compares site weather data to nearby weather stations and will alarm on calibration or communication failure at any time throughout the year. During preventative maintenance our field crew cleans the irradiance sensor. Our technicians are able to utilize the monitoring system to view live readings from the onsite weather station and confirm calibration with a calibrated handheld meter. Sensors found damaged or out of calibration will be recommended for replacement.

The meters installed at these project sites are revenue grade commercial digital meters, which do not require any calibration. Our remote monitoring system will alarm if the total of inverter output read from the inverters does not match the meter and initiate a trouble ticket for mismatch or communication loss. Our field crews are experts at diagnosing meter problems and will be able to recommend replacement parts for any meter issues that arise.

2.6 Data Monitoring
The automated alarming system will notify both the City and our field team simultaneously of any issue via email. Our field staff will then be in contact with the City facilities staff, that day or the following business day, to coordinate a schedule to field-investigate unplanned problems.

Regular review of the PV Performance Reports enables us to track performance loss and recommend corrective maintenance to minimize lost production and downtime. Automated production analysis will alert all parties to shortfalls as compared to a predictive model.

Analytic and performance reports are available 24/7/365 from the monitoring system website.

Unlimited users can instantly pull up-to-date reports as needed. Additionally, users can subscribe to automated customized reports that are emailed at the frequency the user selects.

We will assist you in building these customized reports so you get exactly the information you want and need. While these need to be set up only one time, upon request we can augment and adapt the automated reports to your changing needs.

ENGIE offers Total Data Transparency. We do not manipulate, hide, or limit customer access to all site metered data. We can set up full access to create your own custom alerts and provide additional power-user training. The monitoring system not only monitors the solar, but also your building main electric meters in both import and export directions. While the scope of this RFP is solar, the City will be enabled to utilize the monitoring platform for your facilities energy management needs for no additional cost.

The City will be enabled to
utilize the monitoring platform
for your facilities energy
management needs for no
additional cost.

Maintenance Services for City of Salinas Solar Photovoltaic Systems 10 System performance is evaluated by comparing onsite solar Net Generation Output Meter (NGOM) production data and actual onsite measured weather data to the production values predicted by PVsyst modeling software. These weather-adjusted evaluations are performed automatically within the monitoring system software and always available as reports on the website. These production evaluations are also alarmed if production is deficient by 5% or more from the predictive model. We look for these greater-than-predicted degradations, which may indicate the need for further inspection and possible recommendations for panel washing.

2.7 Plans and Procedures

2.7.1 Warranty Management
ENGIE will manage your remaining equipment warranty with the manufacturer and handle all required paperwork. All new equipment and systems installed under this program are covered with a minimum one-year materials and workmanship warranty.

2.7.2 Time and Material Repair Services
ENGIE will provide repairs for the PV system as required to restore the generating facilities to normal operating parameters or to replace deteriorated, damaged parts. “Repairs” will include any of the following as necessary:
• procuring parts or materials
• removing damaged or out-of-specification parts or materials • installing repaired or replacement parts or materials and testing.

If ENGIE determines repair services are necessary, we shall provide for those repairs and receive payment on a time and materials basis.

3. Experience with O&M
Maintenance Services for City of Salinas Solar Photovoltaic Systems 11 City of Escalon (5 Sites)

3. Experience with O&M
Please find three project references listed below. All scopes include annual preventative maintenance, annual panel washing, and continuous monitoring services.

City of Gonzales (6 Sites)
Size Type Length of
Contract
Years in
Contract
Year 1 Contract Price
(escalated annually)
664kW Canopy/Ground Mount 10 Years 6 $35,956
City of Dublin (8 Sites)
Size Type Length of
Contract
Years in
Contract
Year 1 Contract Price
(escalated annually)
916kW Canopy 10 Years 8 $24,679
Size Type Length of
Contract
Years in
Contract
Year 1 Contract Price
(escalated annually)
582kW Canopy/Ground Mount 5 Years 1 $14,326

4. Resumes
Maintenance Services for City of Salinas Solar Photovoltaic Systems 12

4. Resumes
One-page resumes of our three key staff members start below.

Jamal
Aboueljoud,
CEM,

LEED-AP,

CALCTP-AT
Director,
Post Construction Services
_______

EDUCATION, LICENSES,

AND CERTIFICATIONS
MS, Mechanical Engineering –
Manufacturing Processes,
Lawrence Technological
University, Southfield, MI
BS, Mechanical Engineering,
Lawrence Technological
University, Southfield, MI
Certified Energy Manager
LEED-AP Certified
CALCTP-AT Certified
Association of Energy
Engineers Member
CALCTP Member
US Green Buildings Member
At ENGIE, Jamal ensures the success of Operations & Energy Services (OES) projects throughout their entire life cycle. Jamal has a proven record of impactful leadership in energy and environmental fields. He is responsible for all post-construction commitments, including operations and maintenance (O&M) and warranty service.

He is a key connection point for future engagement phases, customer relation, and revenue growth.

Jamal is an analytical, growth-minded engineering manager with over 25 years of extensive experience planning, executing, and directing complex initiatives within energy and environmental industries. He is a tactical decision-maker skilled in uncovering and capitalizing on new areas of improvement across cost, project, and quality effectiveness.

Jamal’s areas of expertise include energy management, business development, portfolio management, project life cycle, customer relations, team leadership, training and development, educator, professional consulting, cross-team collaboration, and communications.

Before joining ENGIE, Jamal directed the daily operations, strategic planning, and a team of six engineers in management of lighting and energy audits resulting in $100M+ worth of contracting projects. He cultivated and strengthened customer relationships while fostering positive experiences through responsive communications. The wide range of clients he served spanned across education, healthcare, manufacturing, government, and wastewater municipalities.

Key Achievements:
• Founded and launched business development ideation of energy consultative services
• Successfully maintained less than 0.12% shortfall

REPRESENTATIVE PROJECT EXPERIENCE
Project Description
City of
Salinas
• Current O&M Provider
• Salinas City Elementary School District
• Salinas Union High School District – Solar
across 14 sites
City of
Gonzales
• Current O&M Provider for 66 kW Solar Canopy
and Ground mount across 6 sites
City of
Dublin
• Current O&M Provider for 916 kW Solar Canopies
across 8 sites
City of
Yuba
• 3-Phased Project: I. solar PV, solar pool water
heating, LED building lighting upgrades, plus
HVAC and EMS upgrades; II. 2.1 MW solar and

1.5 MWh BESS; III. solar and BESS for Police
Station
Maintenance Services for City of Salinas Solar Photovoltaic Systems 13 Carrie Dixon,

LEED AP
O&M Manager
_______

EDUCATION, LICENSES,

AND CERTIFICATIONS
BS, Architectural Engineering,
University of Kansas,
Lawrence KS
Intern Engineer-Kansas
Leadership in Energy and
Environmental Design
Accredited Professional
(LEED AP) – U.S. Green
Building Council
CA Electrician Journeyman
License 162512
Arc Flash/70E
OSHA 30
Satcon Inverters Certified
Level II Technician
Fronius Inverters Certified
Service Provider – IG Plus
International Society of
Automation Member
Carrie is primarily responsible for managing the operations and maintenance of our photovoltaic systems. These responsibilities include commissioning/recommissioning, scheduled maintenance, unplanned outage management, contractor management, site safety management, and customer service.

Carrie has a passion for renewable energy and an extensive background in a variety of photovoltaic systems, metering, and control technologies. She is a valuable resource that is committed to sharing her knowledge and love of renewable energy through participation in various STEM/STREAM programs in the communities we serve. Additionally, Carrie has implemented a training program to partner with local trade training councils across California. These programs work to educate and train the next generation of electrical workers, providing employment opportunities, and interest in solar photovoltaics.

Carrie successfully manages a growing photovoltaic asset portfolio of over 145 MW at over 500 locations. Her training and experience in the field gives us a leading edge in maintenance of systems and troubleshooting problems from power flow to data collection. In her current role, she provides support and dispatches her team of field electricians while ensuring all work complies with OSHA safety standards and manufacturers’ maintenance recommendations.

At the University of Kansas, Carrie elected to concentrate her studies in the areas of sustainable design and energy management.

Her continuing education opportunities in California have included water conservation and involvement with California Coastal Commission.

REPRESENTATIVE PROJECT EXPERIENCE
Project Description
City of
Salinas
• Current O&M Provider
• Salinas City Elementary School District
• Salinas Union High School District – Solar
across 14 sites
City of
Gonzales
• Current O&M Provider for 66 kW Solar Canopy
and Ground mount across 6 sites
City of
Dublin
• Current O&M Provider for 916 kW Solar Canopies
across 8 sites
City of
Yuba
• 3-Phased Project (worked on phases I&II): I. solar
PV, solar pool water heating, LED building lighting
upgrades, plus HVAC and EMS upgrades; II. 2.1 MW
solar and 1.5 MWh BESS
Maintenance Services for City of Salinas Solar Photovoltaic Systems 14 Amar Tiwari
Customer Account Manager
_______

EDUCATION, LICENSES,

AND CERTIFICATIONS
MBA, University of California,
Berkeley, CA
BS, Chemical Engineering,
Auburn University, Auburn, AL
Amar brings over 10 years of experience as a Process Design Engineer and Project Manager. As a Customer Account Manager at ENGIE, he is responsible for managing customer lifecycle from project development through to post-construction.

Amar also supports new business development initiatives and keeps up to date on new technologies available. Through these exercises, he has developed a strong comprehension of new energy saving technologies and understands best fit for the customer.

REPRESENTATIVE PROJECT EXPERIENCE
Project Description
City of
Salinas
• Current O&M Provider
• Salinas City Elementary School District
• Salinas Union High School District – Solar
across 14 sites
City of
Hercules,
CA
• Program Developer: led financial analysis and
supported program development of 483 kW
solar PV, new HVAC, and facility and street
lighting
Solano
County,
CA
• Customer Account Manager: Development and
financial analysis for 5 MW solar PV project
including energy storage, microgrid controls,
EV charging, lighting upgrades, HVAC
upgrades and water upgrades.

Adventist
Health
Statewide,
CA
• Customer Account Manager: Program
development of project estimates of 20 MW
solar PV
Various
ENGIE
customers,
CA
• Customer Account Manager: Managed
extension of existing O&M agreements with
number of customers to continue to maintain
PV systems so they operate and maximize
energy savings
Maintenance Services for City of Salinas Solar Photovoltaic Systems 15 Edward
Jakimzak,

CEM, CMVP,
CDSM
Team Lead,
ENGIE Customer Care
_______

EDUCATION, LICENSES,

AND CERTIFICATIONS
MS, Energy Management,
New York Institute of
Technology, Old Westbury,
NY
BS, Electrical Engineering,
California State University,
Northridge, CA
Certified Energy manager
(CEM) – Association of Energy
Engineers
Certified Measurement &
Verification Professional
(CMVP) – Association of
Energy Engineers
Certified Demand-Side
Manager (CDSM) –
Association of Energy
Engineers
Ed oversees and manages all measurement and verification (M&V) work and ongoing customer services for ENGIE projects in California. These include government office buildings, commercial and industrial facilities, public schools, community colleges, and state universities. He is responsible for coordinating and performing all physical measurements as well as creating the reports necessary to fulfill M&V responsibilities in accordance with the International Performance Measurement and Verification Protocol (IPMVP).

Additionally, he is responsible for all ongoing services necessary to fulfill performance contracting responsibilities. Ed joined ENGIE after spending five years working in the energy management industry in both engineering and sales capacities. His experience includes HVAC replacement and controls, lighting system design and retrofits, and solar PV power systems.

REPRESENTATIVE PROJECT EXPERIENCE
Project Description
City of
Salinas
• Current O&M provider
• Salinas City Elementary School District
• Salinas Union High School District – solar
across 14 sites
City of
Gonzales
• Current O&M provider for 66 kW solar canopy
and ground mount across 6 sites
City of
Dublin
• Current O&M provider for 916 kW solar canopies
across 8 sites
City of
Yuba
• 3-phased project (worked on phases I&II): I. solar
PV, solar pool water heating, LED building
lighting upgrades, plus HVAC and EMS
upgrades; II. 2.1 MW solar and 1.5 MWh BESS
City of
Gonzales
• Current O&M provider for 66 kW solar canopy
and ground mount across 6 sites
City of
Dublin
• Current O&M provider for 916 kW solar canopies
across 8 sites
City of
Madera
• 1.1 MW solar PV canopies, 3.3 MW solar PV
ground mount
• Citywide LED lighting and solar street lighting
• HVAC/controls upgrades
County of
Kings
• Phase I: 600 kW cogeneration system, new chiller
for library, and new roofs
• Phase II: new central heating and cooling plant,
thermal energy storage, HVAC upgrade, EMS, and
building lighting retrofit
• Phase III: HVAC upgrades, solar PV systems, LED
lighting upgrades, and irrigation system upgrades

5. References
Maintenance Services for City of Salinas Solar Photovoltaic Systems 16

5. References
References of similar solar PV projects follow.

Contact Information:

Dean McDonald - Public Works Maintenance Superintendent, (925) 833-6630, [email protected]
Contact Information:

Patrick M. Dobbins - Public Works Director/City Manager, (831) 675-5000, [email protected]
Contact Information:

Claire Shawver - Construction Project Manager, (530) 822-4713, [email protected] City of Gonzales
Patrick M. Dobbins, Public Works Director/City Engineer City Hall | 831-675-5000 | https://gonzalesca.gov/services/public-works 1 City of Yuba
Claire Shawver, Construction Project Manager
Public Works Department | 530-822-4713 | [email protected] 2 City of Dublin
Lowell Dean McDonald, Public Works Maintenance Superintendent 925-833-6630 | [email protected]
3 6. ENGIE History
Maintenance Services for City of Salinas Solar Photovoltaic Systems 17

6. ENGIE History
We firmly believe that ENGIE is the ideal
partner to continue your solar PV system
maintenance and energy monitoring needs.

ENGIE began working with the City of
Salinas when the project was first designed
in 2014 and has been maintaining the
project since April 2017.

ENGIE helps government, and other
public sector customers become more
efficient, productive, and sustainable. Over
the past 48+ years, hundreds of our
customers have improved the
performance of their facilities in terms of
reliability, safety, comfort, and resource use. ENGIE worldwide has more than 170,000 employees in 70 countries and is the number one supplier of energy efficiency and renewable services in the world.

ENGIE offers more resources in California than any of our competitors, with over 170 personnel dedicated to the state, including 15 operations and maintenance professionals committed to supporting public sector entities throughout California. At its heart, ENGIE is a local company:
our national headquarters and much of our leadership team are in nearby Oakland. We bring the best of global and local to the table – a local team that is responsive, communicative, and experienced, and a global parent company that has innovative reach, vision, and unmatched financial strength and leadership.

City of Salinas

7. Additional Information
Maintenance Services for City of Salinas Solar Photovoltaic Systems 18

7. Additional Information
As an advocate for sustainability, ENGIE utilizes environmentally sustainable practices, both in the field and in the office.

ENGIE considers all damaged or broken solar photovoltaic panels as hazardous ewaste. As such, we send all damaged panels to a 3rd party recycling center who attempts to recover minimally damaged panels. The recycling vendor has a zero-landfill policy and all materials are recycled to manufacture new solar panels or into different products. A recycling certificate is provided for each transaction to maintain record of proper disposal.

During our PV module cleaning activities, ENGIE takes every precaution to collect and properly dispose of run-off water per local jurisdiction requirements.

In 2019, ENGIE recognized a significant opportunity to reduce the environmental impact of our office buildings and create a more sustainable space for our employees. ENGIE began a pilot program for environmental self-audits focused on energy, water, and waste. With baseline data from the facilities that took part in the pilot program, ENGIE is developing custom sustainability initiatives for our office buildings that will enable employees at the local level to drive participation in identifying opportunities to reduce environmental impact. ENGIE also is transitioning to operating as a paperless environment, with the goal of no paper products, plates, or plastic utensils. In addition, ENGIE employs charitable donations, resales, and recycling to responsibly redistribute no longer needed workplace items.

8. Labor and Billing Rates
Maintenance Services for City of Salinas Solar Photovoltaic Systems 19

8. Labor and Billing Rates
A completed Labor and Billing Rates sheet (Attachment A – Cost and Rate Schedules) includes the fixed cost items and rates for labor and material mark up for time and material work. This information is contained in the Price Proposal, which is included in this response in a separately sealed envelope.

ENGIE
500 12th Street, Suite 300
Oakland, CA 94607
www.engie-na.com
©2022 ENGIE
City of Salinas
Maintenance Services for City of
Salinas Solar Photovoltaic Systems
Price Proposal
May 20, 2022
Prepared For:

City of Salinas Public Works Department
200 Lincoln Avenue
Salinas, CA 93901
Brian Frus
Water, Waste and Energy Division Manager
831-758-7485
[email protected]
Prepared By:

ENGIE
500 12th Street, Suite 300
Oakland, CA 94607
Jamal Aboueljoud
Director, Customer Care Field Services
916-358-0024
[email protected]
City of Salinas

PRICE PROPOSAL
Maintenance Services for City of Salinas Solar Photovoltaic Systems May 20, 2022
PREPARED FOR:

Brian Frus
Water, Waste and Energy Division Manager
City of Salinas Public Works Department
200 Lincoln Avenue
SALINAS, CA 93901
831-758-7485
[email protected]
PREPARED BY:

ENGIE
500 12th Street, Suite 300
Oakland, CA 94607
Jamal Aboueljoud
Director, Customer Care Field Services
916-358-0024
[email protected]
© 2022 ENGIE
This proposal, in whole or in part, is to be used only for evaluation purposes. If the proposal is accepted and a contract entered into then, to the extent, federal or state law requires disclosure, advance notice to ENGIE Services U.S. Inc. is requested with a right to oppose or seek to narrow the disclosure. The data subject to this restriction is contained in all sheets marked, “Use or disclosure of data contained on this sheet is subject to the restriction on the title page of this proposal or quotation.”
ENGIE Services U.S. Inc. is not a municipal advisor and cannot give advice with respect to municipal securities or municipal financial products. This information is provided for educational purposes about possible financing options and is not the provision of advice, or a recommendation to pursue, any financing option. Consult with your municipal advisor or financial advisor about the financing option appropriate for your situation.

ENGIE Services U.S. Inc. can provide information to your municipal advisor or financial advisor about the hypothetical assumptions and educational scenarios used in these materials. To ensure compliance with requirements imposed by the IRS under Circular 230, we inform you that any U.S. federal tax advice contained in this communication (including any attachments), unless otherwise specifically stated, was not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any matters addressed herein.

The information contained herein is general in nature and based on authorities that are subject to change. ENGIE Services U.S. Inc. recommends that you consult your tax adviser to understand its applicability to specific situations. ENGIE Services U.S. Inc., the Respondent, is a wholly owned subsidiary of ENGIE Holdings Inc.

Maintenance Services for City of Salinas Solar Photovoltaic Systems 1

8. Labor and Billing Rates
A completed Labor and Billing Rates sheet (Attachment A – Cost and Rate Schedules) includes the fixed cost items and rates for labor and material mark up for time and material work. This information is included on the following pages in this Price Proposal, which is included in this response in a separately sealed envelope.

Attachment A – Cost and Rate Schedules
Inspection, Preventive, and Routine Maintenance Cost Schedule Expense Category Quantity Unit Unit Cost Extended
Annual Total
1 Module Cleaning 2 Per Event $ 26,488 $ 52,975
2 General System and Tracker Inspections 1 Per Year $ 2,631 $ 2,631 3 I‐V Curve, Module, String and Array
Inspections 1 Per Year $ 1,754 $ 1,754
4 Electrical Inspection, and General Cleaning 2 Per Year $ 15,170 $ 30,339 5 Monitoring, Telemetry and Weather Station
Inspections 1 Per Year $ 351 $ 351
6 Consumables 1 Per Year $ 150.00 $ 150
Maintenance Services for City of Salinas Solar Photovoltaic Systems 2 Attachment A – Cost and Rate Schedules
Responsive Maintenance and Emergency Repair Services Rate Schedule Labor or Item
Description Minimum Required Certifications and Typical Tasks Unit *Straight Rate or Amount PV Electrical
Journeyman
Technician
Diagnostics, visual inspection, testing. Module, inverter, and fuse/breaker replacement, conduit routing, wiring, and ground fault repair. Trained in arc‐flash, lock‐out/tag‐out, and other special protective equipment and procedures.

NABCEP PV Installer certification; experience in the
design of medium‐voltage electrical PV Systems.
$/hr County Labor
Rate
PV Electrical
Apprentice
Technician
Diagnostics, visual inspection, testing. Operate, maintain, and repair photovoltaic equipment. Module and fuse/breaker replacement, wiring, and ground fault repair. NABCEP PV Installer Certification.
$/hr County Labor
Rate
Mechanic Maintenance and repair/replace of tracking mount components. $/hr County Labor
Rate
Network/IT
Internet/network and monitoring equipment repair.

Knowledge of specific monitoring devices, network
connections, wireless/cellular modems. Knowledge of
Modbus, DNP3, and other protocols. HMI operator
interfaces.
$/hr County Labor
Rate
Pest Control
Remove any and all nesting vermin. Trained in safe handling of animal and detritus. Trained in any required pesticide applications.
$/hr County Labor
Rate
Engineering
Diagnostics, specifications, drawings, modeling and analysis, codes, and standards. Preferred B.S. in engineering;
registered PE; NABCEP PV Installer Certification; knowledge of IEEE, NEC, NESC, and other codes & standards for PV
Systems; required level of errors and omissions standards. $/hr $170
Administrative
Record‐keeping, service confirmation, correspondence.

Must be experienced with management of contractors and
quality.
$/hr $65
Mileage $/mile IRS Rate
Material mark‐up
percentage % 15
Sub Contract
mark‐up
percentage
% 15
Lift fee $/day Current Market
Price
*Trade Hourly rate will be adjusted based on the current year of the local prevailing wage determination plus Burden, requirement for either travel or subsistence and lodging, and markup for services being requested.

Rates are Escalated according to an inflation rate to the year in which service will occur. Standard Business Hours are M-F, 7am to 5pm. Non-business Hours & Saturdays Equals 1.5x Rates. Sundays & Holidays Equals

2.0x Rates.

ENGIE
500 12th Street, Suite 300
Oakland, CA 94607
www.engie-na.com
©2022 ENGIE
City of Salinas

AMENDED PRICE PROPOSAL
Maintenance Services for City of Salinas Solar Photovoltaic Systems September 30, 2022
PREPARED FOR:

Brian Frus
Water, Waste and Energy Division Manager
City of Salinas Public Works Department
200 Lincoln Avenue
SALINAS, CA 93901
831-758-7485
[email protected]
PREPARED BY:

ENGIE
500 12th Street, Suite 300
Oakland, CA 94607
Jamal Aboueljoud
Director, Customer Care Field Services
916-358-0024
[email protected]
© 2022 ENGIE
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Maintenance Services for City of Salinas Solar Photovoltaic Systems 1

8. Labor and Billing Rates
A completed Labor and Billing Rates sheet (Attachment A – Cost and Rate Schedules) includes the fixed cost items and rates for labor and material mark up for time and material work.

Attachment A – Cost and Rate Schedules
Inspection, Preventive, and Routine Maintenance Cost Schedule Expense Category Quantity Unit Unit Cost Extended
Annual Total
1 Module Cleaning 1 Per Event $ 26,488 $ 26,488
2 General System and Tracker Inspections 1 Per Year $ 2,631 $ 2,631 3 I‐V Curve, Module, String and Array
Inspections 1 Per Year $ 1,754 $ 1,754
4 Electrical Inspection, and General Cleaning 2 Per Year $ 15,170 $ 30,340 5 Monitoring, Telemetry and Weather Station
Inspections 1 Per Year $ 351 $ 351
6 Consumables 1 Per Year $ 150.00 $ 150
Year 1 - Total Field Services =$61,714
Expense Category Quantity Unit Unit Cost Extended
Annual Total
1 “Base” Monitoring 1 Per Year $ 2,414 $ 2,414
2 Wash Analysis 1 Per Event $ 788 $ 788
Year 1 - Total Monitoring Service = $3,202
Maintenance Services for City of Salinas Solar Photovoltaic Systems 2 Attachment A – Cost and Rate Schedules
Responsive Maintenance and Emergency Repair Services Rate Schedule Labor or Item
Description Minimum Required Certifications and Typical Tasks Unit *Straight Rate or Amount Estimated
Annual Repair
Budget
PV Electrical
Journeyman
Technician
Diagnostics, visual inspection, testing. Module, inverter, and fuse/breaker replacement, conduit routing, wiring, and ground fault repair. Trained in arc‐flash, lock‐out/tag‐out, and other special protective equipment and procedures.

NABCEP PV Installer certification; experience in the
design of medium‐voltage electrical PV Systems.
$/hr
County
Prevailing Wage
Labor Rate
$3,500
PV Electrical
Apprentice
Technician
Diagnostics, visual inspection, testing. Operate, maintain, and repair photovoltaic equipment. Module and fuse/breaker replacement, wiring, and ground fault repair. NABCEP PV Installer Certification.
$/hr
County
Prevailing Wage
Labor Rate
$2,200
Mechanic Maintenance and repair/replace of tracking mount components. $/hr
County
Prevailing Wage
Labor Rate
$15,000
Network/IT
Internet/network and monitoring equipment repair.

Knowledge of specific monitoring devices, network
connections, wireless/cellular modems. Knowledge of
Modbus, DNP3, and other protocols. HMI operator
interfaces.
$/hr
County
Prevailing Wage
Labor Rate
$3,000
Pest Control
Remove any and all nesting vermin. Trained in safe handling of animal and detritus. Trained in any required pesticide applications.
$/hr
County
Prevailing Wage
Labor Rate
Upon Request
Miscellaneous
Items
Additional PV module cleaning and or other maintenance
repairs not specified in the above items $/hr.

County
Prevailing Wage
Labor Rate
$26,488
Engineering
Diagnostics, specifications, drawings, modeling and analysis, codes, and standards. Preferred B.S. in engineering;
registered PE; NABCEP PV Installer Certification; knowledge of IEEE, NEC, NESC, and other codes & standards for PV
Systems; required level of errors and omissions standards. $/hr $170
Upon Request
Administrative
Record‐keeping, service confirmation, correspondence.

Must be experienced with management of contractors and
quality.
$/hr $65
$500
Mileage $/mile IRS Rate $900
Material mark‐up
percentage Ground Mount PV Tracking System % 15 $2,250
Sub-Contract
mark‐up
percentage
Ground Mount PV Tracking System % 15
$2,250
Lift fee $/Yr. Current Market
Price
$3,600
Annual Total Responsive Maintenance and Emergency Repair Budget = $59,688.00 Total Annual Year 1 Estimated Cost = $ 124,604.00
Maintenance Services for City of Salinas Solar Photovoltaic Systems 3 Year
Inspection Preventative and
Routine Maintenance
Services*
Monitoring
Service*
Responsive
Maintenance and
Emergency Repair
Services
Annual
Total
Year 1 $ 61,714 $ 3,202 $ 59,688 $ 124,604
Year 2 $ 63,565 $ 3,298 $ 59,688 $ 126,551
Year 3 $ 65,472 $ 3,397 $ 59,688 $ 128,557
Year 4 $ 67,437 $ 3,499 $ 59,688 $ 130,623
Year 5 $ 69,460 $ 3,604 $ 59,688 $ 132,752
Total Contract 5-Year Term $ 643,088
* Includes 3% annual escalator
*The above hourly labor rates are based on the 2022 published County prevailing Wage. Trade Hourly rate will be adjusted based on the current year of the local prevailing wage determination plus Burden, requirement for either travel or subsistence and lodging, and markup for services being requested. Rates are Escalated according to an inflation rate to the year in which service will occur. Standard Business Hours are M-F, 7am to 5pm. Non-business Hours & Saturdays Equals 1.5x Rates. Sundays & Holidays Equals 2.0x Rates.

City of Salinas
Legislation Text
200 Lincoln Ave., Salinas,
CA 93901
www.cityofsalinas.org
File #: ID#22-561, Version: 1
Amendment 1 to FY 2022-2023 Agreement for Professional Services with Tina La Perle Approve a Resolution authorizing the City Manager or designee to execute Amendment 1 to the FY 2022-2023 Agreement for Professional Services with Tina La Perle to extend the agreement term through to December 31, 2022 and increase the total not to exceed compensation amount to $71,000.

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CITY OF SALINAS

COUNCIL STAFF REPORT
DATE: OCTOBER 18, 2022
DEPARTMENT: COMMUNITY DEVELOPMENT DEPARTMENT
FROM: MEGAN HUNTER, DIRECTOR
THROUGH: ROD POWELL, PLANNING MANAGER
BY: MARIA CAMBRON, COMMUNITY DEVELOPMENT ANALYST
TITLE: AMENDMENT 1 TO FY 2022-2023 AGREEMENT FOR

PROFESSIONAL SERVICES WITH TINA LA PERLE
RECOMMENDED MOTION:

A motion to approve a Resolution authorizing:

1. the City Manager or designee to execute Amendment 1 to the FY 2022-2023 Agreement for Professional Services with Tina La Perle to extend the agreement term through to December 31, 2022, and increase the total not to exceed compensation amount to $71,000; and

2. an increase of $20,000 to the General Ledger account 2943.30.3240-63.6010, HUD ESG Covid, appropriation and use HUD ESG Covid fund balance for Amendment 1 to the FY 2022-2023 Agreement for Professional Services with Tina La Perle EXECUTIVE SUMMARY:

On July 15, 2021, the City of Salinas (City) entered into an Agreement for Professional Services Agreement (Agreement) with Tina La Perle to ensure an effective use of funds and the identification and utilization of “best practices” in regard to the provision of homeless services. Ms. La Perle’s services have been instrumental in assisting the City in the implementation of safe, effective practices to house and protect vulnerable, unhoused City residents. Amendment 1 to the Agreement seeks to continue Ms. La Perle’s professional services through to December 31, 2022, to allow for a continuation of this necessary support and to allow for the anticipated recruitment and onboarding of a new, permanent Homeless Services Manager position.

BACKGROUND:

Homelessness continues to be a serious and ongoing problem within the City which requires significant support to maintain the preservation of public spaces and the health, and safety of our community. Persons experiencing homelessness are at high risk for physical and mental health issues, and other chronic illnesses. In response, the City has continued to seek, obtain, and allocate additional funding and resources toward the issue. Ms. La Perle has and continues to provide invaluable handson expertise and perspective in support of the City’s ever-expanding homeless services programming.

In accordance with prior cancel direction, the Community Development Department (CDD) is actively working with the City’s Human Resources Department to develop a new permanent Homeless Services Manager position. Currently, the position’s job description is nearing finalization and it is anticipated that recruitment and onboarding of a successful, qualified candidate will occur no later than December 31, 2022.

DISCUSSION:

Throughout the past few years, Ms. La Perle’s professional services have been vital to the City’s expansion and development of homeless services as well as the identification and implementation of best practices and the development of meaningful program standards. Her work has also been instrumental in fine tuning data collection, establishing expectations and meaningful outcomes within City service subrecipient agreements, and assistance in the formulation of recently awarded competitive grant applications.

As a result of the sustained emerging development of City services current emerging and intensive environment, the Community Development Department received authorization for a new permanent full-time Homeless Services Manager position to support the tasks and responsibilities currently performed by Ms. La Perle as well as other key management functions. Unfortunately, development of a comprehensive job description necessary to initiate a formal recruitment has taken longer than anticipated and selection and onboarding are not expected until late 2022.

The proposed Amendment 1 to FY 2022-2023 Agreement for Professional Services with Ms. La Perle (Amendment) will ensure a continuation of current in-progress work and necessary support of priority initiatives through the end of December 2022 and will allow the City ample time to finalize the new position description, initiate a complete a competitive recruitment and necessary onboarding processes. The Amendment will extend the term of the Agreement through to December 31, 2022 and will be supported entirely by HUD ESG Covid funding.

DEPARTMENT COORDINATION:

This agenda item is solely administered by the City’s CDD Housing and Community Development Division in coordination with the City Attorney, Human Resources and Finance departments.

CEQA CONSIDERATION:

Not a Project. The City of Salinas has determined that the proposed action is not a project as defined by the California Environmental Quality Act (CEQA) (CEQA Guidelines Section 15378).

STRATEGIC PLAN INITIATIVE:

Approval of the proposed Amendment supports the City of Salinas Strategic Plan 2022-2025 Goals and Strategies of Housing/Affordable Housing and Effective and Culturally Responsive Government.

FISCAL AND SUSTAINABILITY IMPACT:

There is no General Fund impact associated with this agenda item. Funding applicable to the Amendment will be appropriated in G/L Account 2943.30.3240-63.6010 HUD ESG Covid ($20,000).

ATTACHMENTS:

Resolution
Amendment 1 to FY 2022-2023 Agreement for Professional Services with Tina La Perle FY 2022-2023 Agreement for Professional Services with Tina La Perle RESOLUTION NO. ____________ (N.C.S.)

A RESOLUTION OF THE CITY OF SALINAS CITY COUNCIL AUTHORIZING THE EXECUTION OF AMENDMENT 1 TO THE FY 2022-2023 AGREEMENT FOR

PROFESSIONAL SERVICES WITH TINA LA PERLE
WHEREAS, on July 1, 2022, the City of Salinas (City) entered into a FY 2022-2023 Agreement for Professional Services with Tina La Perle to provide homeless services coordination, project management, street outreach and other tasks related to the implementation of best practices; and
WHEREAS, the current FY 2022-2023 Agreement for Professional Services with Tina La Perle has a term is from July 1, 2022 to October 31, 2023, with a total compensation of $51,000; and WHEREAS, Ms. La Perle’s professional services and expertise have been instrumental in assisting the City to implement best practices, identify effective outreach and referral services, apply for new funding sources, and identify vital, safe practices to house and protect vulnerable, unhoused City residents to prevent, prepare for, and respond to the COVID-19 pandemic; and WHEREAS, the City intends to finalize a job description and initiate a formal recruitment to hire and onboard a new Homeless Services Manager no later than December 31, 2022; and WHEREAS, an Amendment to the FY 2022-2023 Agreement is required to allow for an extension of the Agreement term through to December 31, 2022 and an increase of $20,000 to the total not to exceed compensation amount to $71,000; and WHEREAS, currently unallocated HUD ESG Covid funds will support the $20,000 increase in the Agreement’s total compensation amount; and
NOW, THEREFORE, BE IT RESOLVED that the Salinas City Council authorizes and directs the City Manager or designee to execute Amendment 1 to the FY 2022-2023 Agreement for Professional Services with Tina La Perle to extend the term through to December 31, 2022 and increase the total not to exceed compensation amount to $71,000; and BE IT FURTHER RESOLVED that the Salinas City Council authorizes an increase of $20,000 to the General Ledger account 2943.30.3240-63.6010, HUD ESG Covid, appropriation and use HUD ESG Covid fund balance for Amendment 1 to the FY 2022-2023 Agreement for Professional Services with Tina La Perle.

PASSED AND APPROVED this 18th day of October 2022 by the following vote:

AYES:

NOES:

ABSENT:

APPROVED
_________________________________
Kimbley Craig, Mayor
ATTEST
_________________________
Patricia M. Barajas, City Clerk