100% of the rental units as affordable with average
affordability at or below 60% of Area Median Income
(AMI). Twenty five percent (25%) of the rental
apartments will be restricted to households requiring
supportive housing and earning 30 percent AMI or
less. The City is partnering with First Community
Housing, a nonprofit housing developer, to design
and manage the building. A ~$30 million grant was
recently submitted and approved to facilitate
construction of this project, as was a ~$1 million grant to promote innovative building electrification,
resiliency, and health standards.
LU1.1 Relate residential, commercial, and
industrial land use intensities to the capability
and location of the land while ensuring
optimum utilization of infill parcels.
LU3.7 Encourage higher-intensity residential
uses and maximum densities in accordance
with the General Plan Land Use designations.
LU4.1.1 Support compact mixed-use
development Downtown, along primary
transportation corridors, and in employment
centers.
M1.1 Reduce automobile dependence by
encouraging appropriate neighborhood and
activity center development.
M4.1.6: Enhance the pedestrian orientation of
the Downtown Central Business District.
ED5.5.4: Create a distinctive and active
pedestrian environment downtown.
ED5.5.6: Require continuity of active groundlevel uses (retail, restaurant, cultural, etc.) along Pacific Avenue.
ED5.5.6: Revitalize the Lower Pacific area
(Pacific Avenue south of Cathcart Street).
20.41 CALENDAR YEAR 2022
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MARCH 28, 2023
Planning and Community Development
PROJECT NAME DESCRIPTION HOW THIS PROJECT IMPLEMENTS
THE GENERAL PLAN 2030
2 PACIFIC STATION SOUTH
In December of 2020, the Zoning Administrator
approved an application to construct a seven-story,
mixed-use building with 70 affordable residential
apartments, 15,228 square feet of ground floor
commercial and residential amenity space, and
15,665 feet of medical office space on the second
floor, on a property located within the Pacific Avenue
Retail District and Front Street/Riverfront Corridor
subareas of the Downtown Plan.
The building will provide a new location for Santa Cruz Community Health Clinic to operate on Pacific
Avenue, directly adjacent to an upgraded Metro
Center. The developer, For the Future Housing, and
the City’s Economic Development Department were
successful in funding applications that have allowed
the project to move from entitlement to construction
within a short time frame. Construction is anticipated
to be completed and the building occupied by early
2024.
This site also incorporates build-out of a paseo
connecting Pacific Avenue and Front Street,
ultimately leading up to the riverwalk and to overlook
the San Lorenzo River.
Status: Under Construction.
GP Chapter 3: Community Design
GP Chapter 4: Land Use
GP Chapter 5: Mobility
GP Chapter 6: Economic Development
GP Chapter 7: Civic and Community Facilities
CD4.2.1 Where possible, site buildings at the
street frontage and place parking areas away
from street corners and to the rear of buildings.
CD 5.1 Create a well connected street and
pedestrian network.
CD5.2 Require new development to include
elements that relate to the pedestrian scale.
CD5.2.1 Encourage buildings to be oriented
towards sidewalks, public plazas, walkways, or
rivers and to include features such as public
benches and natural seating areas.
LU3.7 Encourage higher-intensity residential
uses and maximum densities in accordance
with the General Plan Land Use designations.
LU4.1.1 Support compact mixed-use
development Downtown, along primary
transportation corridors, and in employment
centers.
M1.1 Reduce automobile dependence by
encouraging appropriate neighborhood and
20.42 CALENDAR YEAR 2022
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Planning and Community Development
activity center development.
M2.4: Support and promote efficient use of
transit.
M4.1.6: Enhance the pedestrian orientation of
the Downtown Central Business District.
M1.5: Reduce the need for parking and
promote parking efficiency.
ED5.5.4: Create a distinctive and active
pedestrian environment downtown.
ED5.5.6: Require continuity of active groundlevel uses (retail, restaurant, cultural, etc.) along Pacific Avenue.
ED5.5.6: Revitalize the Lower Pacific area
(Pacific Avenue south of Cathcart Street).
CC2.1.4: Locate community facilities within
easy walking distance of residential areas or in
areas well-served by transit.
20.43 CALENDAR YEAR 2022
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MARCH 28, 2023
Planning and Community Development
PROJECT NAME DESCRIPTION HOW THIS PROJECT IMPLEMENTS
THE GENERAL PLAN 2030
3 415 NATURAL BRIDGES
In 2021, The Housing Authority of the County of
Santa Cruz submitted an application for a 20 unit,
100-percent affordable housing development with
20 Single Room Occupancy (SRO) units to be
constructed within a three-story building on a vacant
lot located at 415 Natural Bridges Drive.
The proposal dedicates 100% of the units for very
low-income households, and required a Planned
Development Permit to allow the use on the parcel
outside the zones where SROs are typically
permitted.
The City Council approved the project entitlements
in April 2022.
Status: Entitlements approved; Building
Permits submitted
GP Chapter 4: Land Use
GP Chapter 5: Mobility
LU3.7 Encourage higher-intensity residential
uses and maximum densities in accordance
with General Plan Land Use designations.
LU3.8 Allow the following residential uses to
exceed the maximum densities in this chapter:
Single-room occupancy (SRO) units;
Small ownership units (SOU);
Small studio and one-bedroom units;
Accessory dwelling units (ADU);
Density bonus units;
Residential units within areas
designated High-Density Overlay
District.
M1.3 Create pedestrian-friendly frontage and
streetscapes and attractive pedestrianoriented areas.
20.44 CALENDAR YEAR 2022
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MARCH 28, 2023
Planning and Community Development
PROJECT NAME DESCRIPTION HOW THIS PROJECT IMPLEMENTS
THE GENERAL PLAN 2030
4 130 CENTER STREET
An application to redevelop the property at 130
Center Street with a six-story mixed-use development
consisting of 2,356 square feet of ground-floor retail
and 233 residential single-room occupancy (SRO)
units (units with a maximum of 400 square feet and
an average unit size being no greater than 345 square
feet, some common facilities, and on-site
management) was approved in 2022. The approval
includes the demolition of the existing commercial
buildings.
The project consists of 155 base units, with 31 units,
or 20% of the base project, to be provided as
inclusionary units restricted to Very Low Income (50%
Area Median Income). The project also includes a
Density Bonus under AB2345 for a 50% bonus of
market rate units. As part of the Density Bonus
request, the approval included two waivers: 1) Exceed
height limitations with a building that is
approximately 70 feet in height and six stories; and 2) Reduce required setbacks. The Planning Commission
unanimously approved the project in October 2021.
That decision was appealed to the City Council, and
the Council approved the project in January 2022.
During the entitlement, the developer offered four
additional affordable units at Very Low-Income level,
for a total of 35 Very Low-Income units in the project.
The project was appealed in late 2021, and the appeal
Status: Approved, Building Permit
Application under review
GP Chapter 3: Community Design
GP Chapter 4: Land Use
GP Chapter 5: Mobility
CD4.2 Ensure that new development and
right-of-way improvements enhance the
visual quality of streetscapes.
CD5.2 Require new development to include
elements that relate to the pedestrian scale.
CD5.2.1 Encourage buildings to be oriented
towards sidewalks, public plazas, walkways,
or rivers and to include features such as public
benches and natural seating areas.
LU1.1 Relate residential, commercial, and
industrial land use intensities to the capability
and location of the land while ensuring
optimum utilization of infill parcels.
LU3.7 Encourage higher-intensity residential
uses and maximum densities in accordance
with the General Plan Land Use designations.
LU4.1.1 Support compact mixed-use
development Downtown, along primary
transportation corridors, and in employment
centers.
LU3.8 Allow the following residential uses to
exceed the maximum densities in this chapter:
20.45 CALENDAR YEAR 2022
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MARCH 28, 2023
Planning and Community Development
was denied by the City Council in January 2022. Single-room occupancy (SRO) units; Small ownership units (SOU);
Small studio and one-bedroom units;
Accessory dwelling units (ADU);
Density bonus units;
Residential units within areas
designated High-Density Overlay
District.
M1.1 Reduce automobile dependence by
encouraging appropriate neighborhood and
activity center development.
M4.1.6: Enhance the pedestrian orientation of
the Downtown Central Business District.
ED5.5.4: Create a distinctive and active
pedestrian environment downtown.
20.46 CALENDAR YEAR 2022
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MARCH 28, 2023
Planning and Community Development
PROJECT NAME DESCRIPTION HOW THIS PROJECT IMPLEMENTS
THE GENERAL PLAN 2030
5 119 CORAL STREET
On November 19, 2020, the City Planning
Commission approved the application to construct
a five -story, mixed-use project to provide services
and 100% affordable supportive housing for the
chronically homeless at the Homeless Services
Center Campus at the corner of Highway 1 and River
Street.
The first floor will consist of a new recuperative care center, a behavioral health clinic, and uses related
to the upper floor residences. The upper four
stories will consist of 120 supportive single room
occupancy (SRO) units and one manager’s unit. The
units will be used as very-low-income supportive
housing for those needing a particularly high level
of ongoing supportive services that is uniquely
available at this location.
In 2022 the project, which is a partnership between
Housing Matters and Mid Pen Housing, successfully
applied for over $25 million in funding that will
allow construction to begin in 2023.
Status: Building Permits under review,
funding assembled.
GP Chapter 3: Community Design
GP Chapter 4: Land Use
GP Chapter 5: Mobility
CD4.2 Ensure that new development and
right-of-way improvements enhance the
visual quality of streetscapes.
CD5.2 Require new development to include
elements that relate to the pedestrian scale.
CD5.2.1 Encourage buildings to be oriented
towards sidewalks, public plazas, walkways,
or rivers and to include features such as public
benches and natural seating areas.
LU1.1 Relate residential, commercial, and
industrial land use intensities to the capability
and location of the land while ensuring
optimum utilization of infill parcels.
LU3.7 Encourage higher-intensity residential
uses and maximum densities in accordance
with the General Plan Land Use designations.
LU4.1.1 Support compact mixed-use
development Downtown, along primary
transportation corridors, and in employment
centers.
20.47 CALENDAR YEAR 2022
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MARCH 28, 2023
Planning and Community Development
LU3.8 Allow the following residential uses to
exceed the maximum densities in this
chapter:
Single-room occupancy (SRO) units;
Small ownership units (SOU);
Small studio and one-bedroom units;
Accessory dwelling units (ADU);
Density bonus units;
Residential units within areas
designated High-Density Overlay
District.
M1.1 Reduce automobile dependence by
encouraging appropriate neighborhood and
activity center development.
M4.1.6: Enhance the pedestrian orientation
of the Downtown Central Business District.
ED5.5.4: Create a distinctive and active
pedestrian environment downtown.
20.48 CALENDAR YEAR 2022
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MARCH 28, 2023
Planning and Community Development
PROJECT NAME DESCRIPTION HOW THIS PROJECT IMPLEMENTS
THE GENERAL PLAN 2030
6 532 CENTER STREET/CALVARY CHURCH
In May of 2022, City Planning Staff approved an
application for a mixed-use supportive housing
development consisting of 2,210 square feet of
commercial retail space, 65 residential units, and
construction of a public paseo at the parking lot
adjacent to the Calvary Church between Cedar and
Center Streets.
The project was the first in the City to take
advantage of recent state laws that allow the City
to permit supportive housing applications in certain
locations without a public hearing. The abbreviated
public review process has allowed this
development proposal to move quickly from
concept to construction and is expected to be open
for residential occupancy before the end of 2023.
Status: Under Construction
GP Chapter 3: Community Design
GP Chapter 4: Land Use
GP Chapter 5: Mobility
CD4.2 Ensure that new development and
right-of-way improvements enhance the
visual quality of streetscapes.
CD5.2 Require new development to include
elements that relate to the pedestrian scale.
CD5.2.1 Encourage buildings to be oriented
towards sidewalks, public plazas, walkways,
or rivers and to include features such as public
benches and natural seating areas.
LU1.1 Relate residential, commercial, and
industrial land use intensities to the capability
and location of the land while ensuring
optimum utilization of infill parcels.
LU3.7 Encourage higher-intensity residential
uses and maximum densities in accordance
with the General Plan Land Use designations.
LU4.1.1 Support compact mixed-use
development Downtown, along primary
transportation corridors, and in employment
centers.
LU3.8 Allow the following residential uses to
exceed the maximum densities in this
chapter:
20.49 CALENDAR YEAR 2022
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Planning and Community Development
Single-room occupancy (SRO) units;
Small ownership units (SOU);
Small studio and one-bedroom units;
Accessory dwelling units (ADU);
Density bonus units;
Residential units within areas
designated High-Density Overlay
District.
M1.1 Reduce automobile dependence by
encouraging appropriate neighborhood and
activity center development.
M4.1.6: Enhance the pedestrian orientation
of the Downtown Central Business District.
ED5.5.4: Create a distinctive and active
pedestrian environment downtown.
20.50 CALENDAR YEAR 2022
GENERAL PLAN ANNUAL PROGRESS REPORT
MARCH 28, 2023
Planning and Community Development
PROJECT NAME DESCRIPTION HOW THIS PROJECT IMPLEMENTS
THE GENERAL PLAN 2030
7 126 EUCALYPTUS AVENUE
An application was approved by the Planning
Commission in October 2022 for a permit to
reconfigure five lots into two, demolish two existing
school buildings, remove six Heritage trees, and
construct a 76-unit senior housing facility, including
13 full dwelling units and 63 assisted living units, on a site listed on the historic building survey.
The project includes 15 memory care beds, which
are in high demand for patients, and 2 of the full
dwelling units are income-restricted affordable
units for low-income households.
The project was appealed to City Council in
November of 2022, and the appeal was not upheld
by the council. Similarly, the project approval was
appealed to the Coastal Commission in December
2022, and the appeal was not granted. The
appellant has since filed a lawsuit challenging the
City’s CEQA determination, and progress on
developing these housing units has stalled.
Status: Approved/Appealed/held by lawsuit
GP Chapter 3: Community Design
GP Chapter 4: Land Use
GP Chapter 5: Mobility
CD4.2 Ensure that new development and
right-of-way improvements enhance the
visual quality of streetscapes.
CD5.2 Require new development to include
elements that relate to the pedestrian scale.
CD5.2.1 Encourage buildings to be oriented
towards sidewalks, public plazas, walkways,
or rivers and to include features such as public
benches and natural seating areas.
LU1.1 Relate residential, commercial, and
industrial land use intensities to the capability
and location of the land while ensuring
optimum utilization of infill parcels.
LU3.7 Encourage higher-intensity residential
uses and maximum densities in accordance
with the General Plan Land Use designations.
LU4.1.1 Support compact mixed-use
development Downtown, along primary
transportation corridors, and in employment
centers.
M1.1 Reduce automobile dependence by
encouraging appropriate neighborhood and
activity center development.
20.51 CALENDAR YEAR 2022
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MARCH 28, 2023
Planning and Community Development
M4.1.6: Enhance the pedestrian orientation
of the Downtown Central Business District.
ED5.5.4: Create a distinctive and active
pedestrian environment downtown.
PROJECT NAME DESCRIPTION HOW THIS PROJECT IMPLEMENTS
THE GENERAL PLAN 2030
8 900 HIGH STREET
A preapplication for a development proposal of 40
apartments on land owned by the Peace United
Church came in in late 2022. Few details are
available at this time, but the project will exceed the requirements for inclusionary affordable housing.
Status: Approved
GP Chapter 4: Land Use
LU1.1 Relate residential, commercial, and
industrial land use intensities to the capability
and location of the land while ensuring
optimum utilization of infill parcels.
LU3.7 Encourage higher-intensity residential
uses and maximum densities in accordance
with the General Plan Land Use designations.
LU3.8 Allow the following residential uses to
exceed the maximum densities in this
chapter:
Single-room occupancy (SRO) units;
Small ownership units (SOU);
Small studio and one-bedroom units;
Accessory dwelling units (ADU);
Density bonus units;
Residential units within areas
designated High-Density Overlay
District.
20.52 CALENDAR YEAR 2022
GENERAL PLAN ANNUAL PROGRESS REPORT
MARCH 28, 2023
Planning and Community Development
PROJECT NAME DESCRIPTION HOW THIS PROJECT IMPLEMENTS
THE GENERAL PLAN 2030
9 LIBRARY MIXED-USE
The City Planning Department received a formal
application for the Library, Affordable Housing, and
Parking facility project planned for Cedar Street
between Lincoln and Cathcart Streets in November
of 2022. The project has been the subject of
extensive public conversation and work by the
City’s Economic Development Department for
several years and withstood an attempted voter
referendum in 2022.
The project will include 124 housing units
affordable to low- and very-low-income
households, approximately 38,000 square feet of
space for a new City Library facility, a minimum of
1,800 square feet for a childcare facility, up to 350
parking spaces, and approximately 10,000 square
feet of commercial space.
Status: Applied (Planning Commission and
City Council review in early 2023)
GP Chapter 3: Community Design
GP Chapter 4: Land Use
GP Chapter 5: Mobility
GP Chapter 6: Economic Development
GP Chapter 7: Civic and Community Facilities
CD4.2 Ensure that new development and
right-of-way improvements enhance the
visual quality of streetscapes.
CD5.2 Require new development to include
elements that relate to the pedestrian scale.
CD5.2.1 Encourage buildings to be oriented
towards sidewalks, public plazas, walkways,
or rivers and to include features such as public
benches and natural seating areas.
LU1.1 Relate residential, commercial, and
industrial land use intensities to the capability
and location of the land while ensuring
optimum utilization of infill parcels.
LU3.7 Encourage higher-intensity residential
uses and maximum densities in accordance
with the General Plan Land Use designations.
LU4.1.1 Support compact mixed-use
development Downtown, along primary
transportation corridors, and in employment
centers.
20.53 CALENDAR YEAR 2022
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MARCH 28, 2023
Planning and Community Development
M1.1 Reduce automobile dependence by
encouraging appropriate neighborhood and
activity center development.
M4.1.6: Enhance the pedestrian orientation
of the Downtown Central Business District.
ED5.5.4: Create a distinctive and active
pedestrian environment downtown.
ED5.5.6: Require continuity of active groundlevel uses (retail, restaurant, cultural, etc.) along Pacific Avenue.
CC2.1.4: Locate community facilities within
easy walking distance of residential areas or in
areas well-served by transit.
20.54 CALENDAR YEAR 2022
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MARCH 28, 2023
Planning and Community Development
PROJECT NAME DESCRIPTION HOW THIS PROJECT IMPLEMENTS
THE GENERAL PLAN 2030
10 915 WATER STREET
An application for a new, four-story mixed-use
building encompassing 74,290 square feet,
including 105 Single-Room Occupancy (SRO)
residential units, 1,079 square feet of
commercial tenant space, and 665 square-foot
semi-enclosed outdoor patio was submitted to
the Planning Department in October of 2022,
building off a pre-application from May.
The project consists of 70 base units, with 14 units,
or 20% of the base to be provided as inclusionary
units restricted to Very Low Income (50% Area
Median Income). The project also includes a Density
Bonus under AB2345 for a 50% bonus of market
rate units, for a total of 105 SRO units. As part of the Density Bonus request, the approval included two
waivers: 1) Reduce required rear-yard setbacks
from five feet to one foot; 2) Increased Height from
three stories and 40 feet to four stories and 48 feet;
and 3) Increased Floor Area Ratio (FAR) from 2.75
to 2.95. The project is slated for review by the City
Planning Commission in early 2023.
Status: Applied
GP Chapter 3: Community Design
GP Chapter 4: Land Use
GP Chapter 5: Mobility
CD4.2 Ensure that new development and
right-of-way improvements enhance the
visual quality of streetscapes.
CD5.2 Require new development to include
elements that relate to the pedestrian scale.
CD5.2.1 Encourage buildings to be oriented
towards sidewalks, public plazas, walkways,
or rivers and to include features such as public
benches and natural seating areas.
LU1.1 Relate residential, commercial, and
industrial land use intensities to the capability
and location of the land while ensuring
optimum utilization of infill parcels.
LU3.7 Encourage higher-intensity residential
uses and maximum densities in accordance
with the General Plan Land Use designations.
LU 4.1: Encourage a transition to higher
densities along the city’s transit and
commercial corridors.
LU4.1.1 Support compact mixed-use
development Downtown, along primary
transportation corridors, and in employment
centers.
20.55 CALENDAR YEAR 2022
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MARCH 28, 2023
Planning and Community Development
LU3.8 Allow the following residential uses to
exceed the maximum densities in this
chapter:
Single-room occupancy (SRO) units;
Small ownership units (SOU);
Small studio and one-bedroom units;
Accessory dwelling units (ADU);
Density bonus units;
Residential units within areas
designated High-Density Overlay
District.
M1.1 Reduce automobile dependence by
encouraging appropriate neighborhood and
activity center development.
M4.1.6: Enhance the pedestrian orientation
of the Downtown Central Business District.
ED5.5.4: Create a distinctive and active
pedestrian environment downtown.
20.56 CALENDAR YEAR 2022
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MARCH 28, 2023
Planning and Community Development
PROJECT NAME DESCRIPTION HOW THIS PROJECT IMPLEMENTS
THE GENERAL PLAN 2030
11 908 OCEAN STREET
Project proponents have submitted two preapplications for the sites at the northeast corner of Water and Ocean Streets: both proposals include
over 350 small dwelling units and include a request
for a 35% Density Bonus to construct a mixed-use
development in three condominium lots with over
8000 square feet of commercial space on a site in
the CC (Community Commercial) zone district and
the Ocean Street Area Plan.
The pre-applications differ significantly from an
architectural point of view. The first was submitted
in 2018, when the City was able to apply the
subjective design standards delineated in the Ocean
Street Area Plan. The second set of plans were
submitted in July of 2022, when the state law
requiring review using only objective development
standards for housing proposals was in effect, but
before the City had approved the objective design
standards adopted by the City Council in December
2022.
Community meetings have been conducted on the
first application and are expected on the second
application early in 2023.
Status: Applied.
GP Chapter 3: Community Design
GP Chapter 4: Land Use
GP Chapter 5: Mobility
CD4.2 Ensure that new development and
right-of-way improvements enhance the
visual quality of streetscapes.
CD5.2 Require new development to include
elements that relate to the pedestrian scale.
CD5.2.1 Encourage buildings to be oriented
towards sidewalks, public plazas, walkways,
or rivers and to include features such as public
benches and natural seating areas.
LU1.1 Relate residential, commercial, and
industrial land use intensities to the capability
and location of the land while ensuring
optimum utilization of infill parcels.
LU3.7 Encourage higher-intensity residential
uses and maximum densities in accordance
with the General Plan Land Use designations.
LU 4.1: Encourage a transition to higher
densities along the city’s transit and
commercial corridors.
LU4.1.1 Support compact mixed-use
development Downtown, along primary
transportation corridors, and in employment
centers.
20.57 CALENDAR YEAR 2022
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MARCH 28, 2023
Planning and Community Development
LU3.8 Allow the following residential uses to
exceed the maximum densities in this
chapter:
Single-room occupancy (SRO) units;
Small ownership units (SOU);
Small studio and one-bedroom units;
Accessory dwelling units (ADU);
Density bonus units;
Residential units within areas
designated High-Density Overlay
District.
M1.1 Reduce automobile dependence by
encouraging appropriate neighborhood and
activity center development.
M4.1.6: Enhance the pedestrian orientation
of the Downtown Central Business District.
ED5.5.4: Create a distinctive and active
pedestrian environment downtown.
20.58 CALENDAR YEAR 2022
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MARCH 28, 2023
Planning and Community Development
PROJECT NAME DESCRIPTION HOW THIS PROJECT IMPLEMENTS
THE GENERAL PLAN 2030
12 CITY ARTS RECOVERY DESIGN
Santa Cruz City Arts launched a pilot grant program in
collaboration with Arts Council Santa Cruz County to
support arts-based initiatives that contribute to the
City’s recovery efforts. This program, the City Arts
Recovery Design (CARD) Pilot Grant Program will
harness the arts to play a major role in economic,
community, and health recovery while highlighting
the resilient and vibrant character of Santa Cruz as a
cultural center.
During the past several years, the City has been
buffeted by the COVID pandemic, the impacts of
institutional racism, and the ravages of the CZU fires.
As we emerge from a year of layered crisis, we look
to the creatives in our community for solutions to
rebuild in new and better ways. Through this
program, the City will invest in artists with creative
proposals to tackle these pressing challenges. This
program seeks to have a major impact on the City,
the wellbeing of the community, and the health of its
economy.
The CARD Program focuses on three main themes:
economic recovery, restorative justice, and public
health & safety. We believe artists and creative
individuals can develop solutions that are inventive,
compelling, and engaging and want to give them
space to do so.
Status: Underway.
GP Chapter 2: Historic Preservation, Arts, &
Culture
HA2.1 Effectively and efficiently use City
facilities for arts and cultural programs.
HA2.2 Encourage and promote a mix of public
and private facilities that meet the unique
needs of artists, cultural organizations,
patrons, and participants.
HA3.2 Facilitate and support arts programs,
events, and exhibitions throughout the
community.
HA3.3.1 Provide arts and cultural programs for
both city and regional residents.
HA4.1 Visually reflect the city’s culture,
history, and identity, the creativity of its
residents, in the built environment.
HA4.2.2 Maintain and enhance the Public Arts
Program.
HA4.3.2 Explore alternative funding sources to
support publicly viewable art in both private
and public developments.
HA4.5 Promote arts throughout the
community and the region.
HA4.5.4 Recognize, document, and publicize
the economic value of Santa Cruz’s art and
cultural resources.
20.59 CALENDAR YEAR 2022
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Planning and Community Development
The City Arts Programs are funded by the Percent for
Arts Funds and by the City General Fund. This funding
generally leverages other financial support from the
community.
1. Number of Grants reviewed and approved: 15
2. Number of projects completed: 3 projects,
$46,422 total disbursed
3. Number of projects funded and in progress: 8
projects, $345,891 encumbered
4. Sponsorship agreements in progress: 3 projects,
$69,691 almost encumbered
20.60 CALENDAR YEAR 2022
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MARCH 28, 2023
Planning and Community Development
PROJECT NAME DESCRIPTION HOW THIS PROJECT IMPLEMENTS
THE GENERAL PLAN 2030
13 MONTEREY BAY SANCTUARY RAIL TRAIL
SEGMENTS: DESIGN, APPROVAL, and
CONSTRUCTION
This key transportation project will construct a
regional bicycle and pedestrian multiuse path using
the existing railroad right-of-way.
The 32 miles of right-of-way within the County have
been split into segments for design and construction
purposes. There are two full trail segments (segments
7 & 8) and two partial segments (segments 6 & 9)
within City of Santa Cruz city limits.
Segment 7, Phase I was approved by the Planning
Commission in 2018 and completed construction in
2021. Design and environmental review of Segment 7,
Phase II was approved in 2019, and this segment is
currently under construction. Design and
environmental review is underway for Segments 8 and
9, and construction funding is fully secured. Additional funding for remaining segments is still being sought.
Design, environmental review, and permitting for
Segments 8 and 9 are funded with a Caltrans Active
Transportation Program Cycle 3 grant, with local
match funding from the Land Trust. The Construction
phase is funded by Active Transportation Program
Cycle 6. A portion of Segment 8, the trestle bridge
widening, is complete. The City Council awarded the
construction contract for the Segment 8 railroad
Status: Underway. Segment 7 Phase 1 is
complete. Rail Trail Segment 7 Phase 2 under
construction. Construction is funded by
Active Transportation Program Cycle 5. Rail
Trail Segment 8 and 9 design and
environmental work is underway. The EIR
will be presented to the public and governing
bodies in Spring 2023. The pre-construction
phase is funded by an Active Transportation
Program Cycle 3. Construction funding for
Segments 8/9 is secured through the Active
Transportation Program Cycle 6.
Chapter 5: Mobility
Chapter 6: Economic Development
Chapter 9: Parks, Recreation, and Open Space
M1.1.2 Connect activity centers with
pedestrian and bicycle paths.
M1.1.3 Implement pedestrian and bicycle
improvements that support transit ridership.
M1.4.2 Allow for future multi-modal use of
future rights-of-way by protecting them from
development
M2.1.2 Encourage use of alternative modes of
transportation.
M2.3.1 Design for and accommodate multiple
transportation modes.
20.61 CALENDAR YEAR 2022
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MARCH 28, 2023
Planning and Community Development
trestle bridge widening in 2018, and construction was
completed in 2019, with the ribbon cutting held on
May 22, 2019.
M4.2.2 Work with appropriate agencies to
seek funding for pedestrian and bicycle
activities.
M4.2.3 Facilitate bicycle connections to all
travel modes.
M4.3.2 Develop bike commute routes along
railroad rights-of-way (while ensuring the
ability to develop rail transit) and along West
Cliff Drive, Broadway, King, and other streets.
ED1.9.2 Implement transportation, parking
and alternative transportation improvements
consistent with circulation planning.
PR1.6.1 Maintain and enhance access for
vehicles, transit, bicycles, and pedestrians.
PR4.1.1 Provide trails for a range of uses.
PR4.1.4 Create a continuous pathway along
the coast by enhancing the physical links
between West Cliff and East Cliff Drives and
the Beach Promenade.
PR4.2.4 Use roadside improvement funds to
develop bicycle paths and pedestrian trails.
20.62 CALENDAR YEAR 2022
GENERAL PLAN ANNUAL PROGRESS REPORT
MARCH 28, 2023
Planning and Community Development
PROJECT NAME DESCRIPTION HOW THIS PROJECT IMPLEMENTS
THE GENERAL PLAN 2030
14 CLIMATE ACTION PLANNING
The City’s first Climate Action Plan was adopted in
2012 and sunset in 2020. The City adopted a CEQAqualified Climate Action Plan 2030 in 2022 which contained a legal target of a 40% reduction in
greenhouse gas emissions by 2030 from 1990 levels
and a voluntary, aspirational target of carbon neutral
by 2035. The City launched a Community Climate
Activation platform called “Resilient Santa Cruz” to
accelerate plan implementation. The Climate
Adaptation Plan will be updated in 2023 concurrently
with the Local Hazard Mitigation Plan.
Status: Adopted September 2022.
GP Chapter 10: Natural Resources and
Conservation
NRC4.1.4 Continue to expand municipal
energy efficiency programs to reduce building
energy use to a defined level. Provide
incentives for departments to meet efficiency
goals.
NRC4.1.5 Complete solar analysis and
implement a five year plan to increase solar
generation significantly on municipal
buildings.
NRC4.1.8 Implement tracking and reporting
procedures that meet AB32 requirements and
public interest.
NRC4.3.3 Adopt City renewable energy
objectives as defined within the Climate
Action Plan.
NRC4.5.1 Complete the City Vulnerability
Study and the Climate Change Risk
Assessment.
NRC5.1.2 Maintain and add to the City’s urban
tree canopy and increase tree diversity within
urbanized areas using native and non-invasive
tree species.
20.63 CALENDAR YEAR 2022
GENERAL PLAN ANNUAL PROGRESS REPORT
MARCH 28, 2023
Planning and Community Development
PROJECT NAME DESCRIPTION HOW THIS PROJECT IMPLEMENTS
THE GENERAL PLAN 2030
15 ACTIVE TRANSPORTATION PLAN
IMPLEMENTATION The Active Transportation Plan was accepted by Council in 2017. This comprehensive update to the previous
City Bicycle Transportation Plan and Pedestrian Master
Plan merged these documents into the Active
Transportation Plan.
The plan includes a master list of potential pedestrian and bicycle improvements and serves as the framework
for improved mobility and alternatives to automobile
use within the City. Additionally, this document is used as a guide to seek outside grant funding, resulting in
successful applications to funding agencies for bike and pedestrian projects.
A status update was presented to the Transportation
and Public Works Commission in February 2020. Since
February 28, 2017 when the Active Transportation Plan
was accepted, 78 projects from the Active
Transportation Plan are complete, partially complete,
funded, or programmed. The Plan has been used to
secure over $56M in grant funding for bike and
pedestrian programs and projects.
The City of Santa Cruz is seeking grant funding to
update the Active Transportation Plan.
Status: Underway. Plan Completed in 2017
with implementation on-going. Pursuing a
grant for Plan update.
GP Chapter 5: Mobility
Goal M4 A Citywide interconnected system
of safe, inviting, and accessible pedestrian
ways and bikeways.
M4.1 Enable and encourage walking in Santa
Cruz.
M4.1.1 Update and implement the
Pedestrian Master Plan for development of a
complete, continuous, and structurally
adequate system of pedestrian paths and
walkways.
M4.2 Provide and maintain a complete,
interconnected, safe, inviting, and efficient
citywide bicycle network.
M4.2.1 Maintain and update as necessary the
City’s Bicycle Transportation Plan.
M3.2.5 Improve traffic safety at high collision
locations, in residential areas, and in
congested areas through speed enforcement
programs, improved street design,
improvements needed to reduce accidents,
and by offering traffic safety educational
programs in coordination with other local
agencies.
20.64 CALENDAR YEAR 2022
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MARCH 28, 2023
Planning and Community Development
M4.5 Support pedestrian and bicycle safety
improvements.
M4.5.1 Design and also modify intersections
using striping, pedestrian crossing signs,
pedestrian islands, and pedestrian-friendly
signal phasing.
20.65 CALENDAR YEAR 2022
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MARCH 28, 2023
Planning and Community Development
PROJECT NAME DESCRIPTION HOW THIS PROJECT IMPLEMENTS
THE GENERAL PLAN 2030
16 BIKE SHARE
The City of Santa Cruz partnered with Jump Bikes to
launch a bike share program in Santa Cruz in May
2018. Unfortunately, as the result of COVID19 and the
private sector merger of JUMP to Lime, the bike share
system in Santa Cruz ended in 2020.
The City has now partnered with adjacent agencies
(County, Capitola, and Watsonville) and educational
institutions (UCSC, Cabrillo) to develop a Regional Bike Share program. An RFP was issued in Winter
2021/2022. The regional team selected BCycle LLC as
the new vendor. The regional program will launch in
June 2023.
The bike system provided affordable short-term bike
rentals for quick trips within City limits and brings a new transportation option to the community. This
increases non-auto transportation options for the
City’s residents, employees, and visitors.
Utilization rates of the Santa Cruz system have been
some of the highest in the County.
Between the May 2018 launch and April 2020 closure,
the bike share system experienced the following stats:
Total trips: 683,260
Miles: 1,309,256
Average trip distance: 1.9 miles
Average trips/bike/day: 4.2
Status: Underway.
GP Chapter 5: Mobility
M1.1 Reduce automobile dependence by
encouraging appropriate neighborhood and
activity center development.
M1.1.3 Implement pedestrian and bicycle
improvements that support transit ridership.
M2.1 Provide leadership on sustainable
regional mobility.
M2.1.2 Encourage use of alternative modes of
transportation.
M2.3 Increase the efficiency of the multi-modal
transportation system. M2.3.1 Design for and
accommodate multiple transportation modes.
M2.5 Consider innovative transportation
solutions. M2.5.1 Promote the use of new
technologies for transportation and other
community services.
M4.2.3 Facilitate bicycling connections to all
travel modes.
M4.4 Assure a high level of bicycle user
amenities.
20.66 CALENDAR YEAR 2022
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MARCH 28, 2023
Planning and Community Development
PROJECT NAME DESCRIPTION HOW THIS PROJECT IMPLEMENTS
THE GENERAL PLAN 2030
17 STREET SMART
Street Smarts, launched with the 2017 school year,
is a traffic safety public education campaign with a
mission to reduce the number of traffic-related
crashes and injuries throughout the City of Santa
Cruz. It addresses all road users: drivers, bicyclists
and pedestrians. The prime collaborative strategy to
change and improve the community's traffic safety
behavior is repetition of traffic safety media
messages: Street Smarts' bilingual public service
announcements have been airing on KAZU, KSCO,
KZSC, KLOK, and KSES radio stations, read in print
publications, and seen and heard online. Messages
are also visible on street poles, in front of schools,
on City vehicles, and on yard signs.
Given the installation of many new RRFBs
(Rectangular Repeating Flashing Buttons)
throughout the City and County, our Street Smarts
program has produced a new video stressing the
importance of pushing that button. Studies have
shown that RRFBs have a yield compliance up to
90% but they are not always used. Four more new
Street Smarts videos were produced in 2021. The
videos addressed issues based on recent SWITRS
traffic safety data:
• Drive Sober Drive Smart
• Safety: It’s Your TURN
• Speed Matters
• Intersection CAUTION
Status: Ongoing.
GP Chapter 5: Mobility
M3.2.5 Improve traffic safety at high collision
locations, in residential areas, and in congested
areas through speed enforcement programs,
improved street design, improvements needed
to reduce accidents, and by offering traffic
safety educational programs in coordination
with other local agencies.
M4.5 Support pedestrian and bicycle safety
improvements.
20.67 CALENDAR YEAR 2022
GENERAL PLAN ANNUAL PROGRESS REPORT
MARCH 28, 2023
Planning and Community Development
PROJECT NAME DESCRIPTION HOW THIS PROJECT IMPLEMENTS
THE GENERAL PLAN 2030
18 GO SANTA CRUZ TDM CAMPAIGN
In October 2019, the City launched the GO Santa Cruz
campaign, a Transportation Demand Management (TDM)
initiative aimed as shifting the transportation modes of downtown employees. Since that time, more than 30% of
the downtown workforce has signed up for participation in the program. The GO Santa Cruz campaign is funded by
downtown parking revenues, and includes free unlimited
transit passes, free bike locker cards, carpool incentives, commute information and carpool ride matching, e-bike
rebates, and bike safety trainings.
The goal of this program is to reduce the drive alone rate to downtown to below 50% by providing transportation
options for downtown employees.
COVID19 substantially changed the employment profiles
within downtown and the program continues to pivot to
provide transportation options.
Status: Ongoing.
GP Chapter 5: Mobility
M1.1 Reduce automobile dependence by
encouraging appropriate neighborhood and
activity center development.
M1.1.3 Implement pedestrian and bicycle
improvements that support transit ridership.
M2.1 Provide leadership on sustainable
regional mobility.
M2.1.2 Encourage use of alternative modes of
transportation.
M2.3 Increase the efficiency of the multimodal transportation system.
M2.3.1 Design for and accommodate multiple
transportation modes.
M2.5 Consider innovative transportation
solutions.
M2.5.1 Promote the use of new technologies
for transportation and other community
services.
M4.1 Enable and encourage walking in Santa
Cruz.
M4.2.3 Facilitate bicycling connections to all
travel modes.
M4.4 Assure a high level of bicycle user
amenities.
20.68 CALENDAR YEAR 2022
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MARCH 28, 2023
Planning and Community Development
PROJECT NAME DESCRIPTION HOW THIS PROJECT IMPLEMENTS
THE GENERAL PLAN 2030
19 OBJECTIVE STANDARDS FOR MULTIFAMILY HOUSING AND MIXED USE
DEVELOPMENT
In November of 2022, the City Council approved a set of new zone district regulations and citywide design standards for multifamily housing. The new zone districts allow for the full envisioned capacity of mixed-use housing to be
constructed in the areas identified for that use in the City’s adopted 2030 General Plan. The design standards for
multifamily housing ensure that all new multifamily housing contributes positively to the built environment and allow the city to provide regulation on building design for
development proposals made under SB 35.
The package of amendments also included new regulations requiring installation of street trees with new development, and
The standards take effect on new multifamily development applications outside the Downtown Plan area that are
submitted on or after January 13, 2023.
Status: Complete. Ongoing implementation.
GP Chapter 3: Community Design
GP Chapter 4: Land Use
GP Chapter 5: Mobility
GP Chapter 6: Economic Development
GP Chapter 8: Hazards, Safety, and Noise
GP Chapter 10: Natural Resources and
Conservation
CD4.1 Make the city’s major gateways
defining, attractive, and welcoming.
CD4.2Ensure that new development and rightof-way improvements enhance the visual quality of streetscapes.
CD5.3 Require new development to include
elements that relate to the pedestrian scale.
LU1.1 Relate residential, commercial, and
industrial land.
use intensities to the capability and location of
the land while ensuring optimum utilization of
infill parcels.
LU3.1 Foster land use patterns that balance
economic, housing, community, and
environmental needs, and promote social
diversity.
LU3.3.2 Revise the Zoning Ordinance to
include mixed use zoning and to define
appropriate uses.
20.69 CALENDAR YEAR 2022
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MARCH 28, 2023
Planning and Community Development
LU3.7 Encourage higher-intensity residential
uses and maximum densities in accordance
with the General Plan Land Use designations.
LU4.1.2 Amend the Zoning Ordinance to
ensure that infill and intensified development
is sensitive to existing neighborhood and
business districts.
LU4.2 Encourage land use changes that reduce
the need for autos.
M1.1.4 Amend the Zoning Ordinance to create
an activity-center-oriented urban form.
M1.3 Create pedestrian-friendly frontage and
streetscapes and attractive pedestrianoriented uses.
M1.5.2 Encourage innovative solutions that
provide adequate parking while maximizing
living and working space.
M1.5.5 Amend the Zoning Ordinance to
encourage shared parking for uses that are
compatible in terms of hours of operation or
seasonality.
M3.1.9 Consider reducing parking
requirements for employers, developments,
businesses, and major destination centers
that implement effective alternative
transportation programs.
M3.3.5 Require new development to be
designed to discourage through traffic in
adjacent neighborhoods and to encourage
bicycle or pedestrian connections.
M4.1.7 Require that site and building design
facilitate pedestrian activity.
20.70 CALENDAR YEAR 2022
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MARCH 28, 2023
Planning and Community Development
ED5.1 Nurture activity centers and districts
that serve neighborhoods and businesses,
provide jobs, and meet local and regional
needs.
ED5.1.1 Provide for the development of
supporting land uses adjacent to retail
shopping areas, while assuring protection of
existing residential neighborhoods.
ED5.3 Support neighborhood commercial and
mixed-use development along the city’s
transportation corridors.
HZ3.1.2 Use site planning and design
approaches to minimize noise impacts from
new development on surrounding land uses.
HZ3.1.11 Require soundwalls, earth berms,
setbacks, and other noise reduction
techniques for new development, when
appropriate and necessary, as conditions of
approval.
HZ5.1.2 Develop lighting design guidelines
that reduce light spillage both upward and
onto adjoining properties.
NRC3.3 Require resource conservation and
environmental sensitivity in project design
and construction.
NRC4.1 Reduce communitywide greenhouse
gas emissions (GHG) 30 percent by 2020 and
80 percent by 2050 (compared to 1990 levels).
NRC7.1.4 Require new development to
provide for passive and natural heating and
cooling opportunities, including beneficial site
orientation and dedication of solar
20.71 CALENDAR YEAR 2022
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MARCH 28, 2023
Planning and Community Development
easements.
PROJECT NAME DESCRIPTION HOW THIS PROJECT IMPLEMENTS
THE GENERAL PLAN 2030
20 DOWNTOWN PLAN BOUNDARY EXPANSION
The City of Santa Cruz is embarking on a planning
study to consider future redevelopment of the area
south of Laurel Street. A primary catalyst for this
effort is the City receiving grant funding from the
State with the goal to increase housing capacity.
Expanding the Downtown area and increasing land
use intensity will increase housing capacity and
provide growth in the most sustainable way possible:
in our downtown core closest to jobs, amenities, and
transportation. Other City objectives through this
project include:
1. Providing additional affordable and marketrate housing in the downtown,
2. Creating public amenities like parks, public
plazas, or better pedestrian infrastructure,
3. Improving the connection to the San Lorenzo
River and beach areas, and
4. Creating new economic opportunities for
local businesses and workers.
5. Planning for a new Santa Cruz Warriors arena
site.
This planning work began in the fall of 2021 and is
anticipated to conclude by early 2024. Significant
community outreach, stakeholder input, and
direction from decision-makers will be received
throughout the process.
Status: Ongoing. The project team has
completed background analysis, two
community meetings, and an online survey.
The project team is currently working on the
analysis for the Environmental Impact report
and an administrative draft of the Plan
amendments. Further community outreach
relating to Building and Urban Design policies
will take place during 2023.
GP Chapter 3: Community Design
GP Chapter 4: Land Use
GP Chapter 5: Mobility
GP Chapter 6: Economic Development
CD4.1 Make the city’s major gateways
defining, attractive, and welcoming.
CD4.2 Ensure that new development and rightof-way improvements enhance the visual quality of streetscapes.
LU1.1 Relate residential, commercial, and
industrial land use intensities to the capability
and location of the land while ensuring
optimum utilization of infill parcels.
LU3.1 Foster land use patterns that balance
economic, housing, community, and
20.72 CALENDAR YEAR 2022
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MARCH 28, 2023
Planning and Community Development
environmental needs, and promote social
diversity.
LU4.1.2 Amend the Zoning Ordinance to
ensure that infill and intensified development
is sensitive to existing neighborhood and
business districts.
LU4.2 Encourage land use changes that reduce
the need for autos.
M1.3 Create pedestrian-friendly frontage and
streetscapes and attractive pedestrianoriented uses.
M1.5.2 Encourage innovative solutions that
provide adequate parking while maximizing
living and working space.
M3.3.5 Require new development to be
designed to discourage through traffic in
adjacent neighborhoods and to encourage
bicycle or pedestrian connections.
M4.1.7 Require that site and building design
facilitate pedestrian activity.
ED5.1 Nurture activity centers and districts
that serve neighborhoods and businesses,
provide jobs, and meet local and regional
needs.
ED5.1.1 Provide for the development of
supporting land uses adjacent to retail
shopping areas, while assuring protection of
existing residential neighborhoods.
20.73 City Council
AGENDA REPORT
DATE: 03/15/2023
AGENDA OF: 03/28/2023
DEPARTMENT: Public Works
SUBJECT: SitelogiQ Harvey West Park Ballfield Lighting Project (c402307) – Budget Adjustment (PW)
RECOMMENDATION: Resolution amending the FY 2023 budget and appropriating funds in the amount of $400,000 from Harvey West Ballfield Lighting (c302218) to Comprehensive Energy Solutions - Harvey West Park Ball Field Solar (c402307).
BACKGROUND: In August 2021, the City entered into a Letter of Agreement (LOA) for the Energy Conservation Measures (ECM) project development at three specific sites: Civic Auditorium, Soquel/Front Parking Garage, and Harvey West Park Ball Field. SitelogiQ met with city staff, performed physical audits for engineering review at each location, reviewed PG&E energy data and billing, and developed advanced Helioscope solar designs for each site with targeted ECM that included estimated operating costs compared to existing operating costs. City Council (Council) approved to move forward with the Facility Solutions Agreement with SitelogiQ on June 28, 2022.
DISCUSSION: On January 10, 2023, Council approved the equipment lease/purchase agreement and escrow agreement with Banc of America Public Capital Corp (BAPCC). The budgetary construction costs provided were “turnkey” solutions that included costs and energy savings, as well as, future maintenance and repair costs over the next 25 years.
The Harvey West Park Ball Field project includes both solar arrays to provide sunshade over the bleacher seats, and Musco LED lighting at all field locations. Musco Lighting is a preferred brand by the Dark Sky IDASC local chapter. Although this facility is receiving both CEC Energy Conservation Assistance Act (ECAA) and the tax exempt municipal loan (TEML) through BAPCC, the Parks and Recreation Department has previously earmarked $400,000 from CIP project c302218. The new CIP project for the ball field light upgrades has been established under project c402307 in the Public Works Department. The funds will need to be transferred between projects, requiring the approval of Council, per Council Policy 12.6 #3.
FISCAL IMPACT: There is no impact to the General Fund.
21.1 Prepared By:
Filipina Warren
Public Works Operations
Manager
Christina Alberti
Management Analyst
Submitted By:
Nathan Nguyen, P.E.
Director of Public Works
Approved By:
Matt Huffaker
City Manager
ATTACHMENTS:
1. BUDGET ADJUSTMENT.PDF
21.2 City of Santa Cruz
BUDGET ADJUSTMENT REQUEST
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NET: $
REQUESTED BY DEPARTMENT HEAD
APPROVAL
BUDGET/ACCOUNTING
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APPROVAL
CITYMANAGER
APPROVAL
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TOTAL EXPENDITURE
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03/07/2023
In August 2021, the City entered into a Letter of Agreement (LOA) for the Energy Conservation Measures (EMC) project development at three specific sites: Civic Auditorium, Soquel/Front Parking Garage, and Harvey West Park Ball Field. The Harvey West Park Ball Field project includes both solar arrays to provide sunshade over the bleacher seats, and Musco LED lighting at all field locations. Musco Lighting is a preferred brand by the Dark Sky IDASC local chapter. Parks and Recreation has earmarked $400,000 from an existing CIP for ballfield lighting (c302218) before the City determined funds from the California Energy Commission ECAA loan program and a TEML loan for all sites. This budget adjustment will move the $400,000 from the Parks and Recreation project into the new CIP project dedicated for Harvey West Park ballfield lighting improvements.
311-00-00-0000-49108 c302218-914-0-0 From City Public Trust Fund -400,000 Harvey West Ballfield Lighting
311-00-00-0000-49108 c402307-914-0-0 From City Public Trust Fund 400,000 CES - Harvey West Park Ball Field Solar
0 311-30-41-9110-57312 c302218-100-2020-0 Park improvements -400,000 Harvey West Ballfield Lighting
311-40-61-5579-57106 c402307-100-2020-0 Land improvements 400,000 CES - Harvey West Park Ball Field Solar
0 0
Christin
a Alberti
Digitally signed by Christina Alberti
DN: cn=Christina Alberti, o=City of Santa
Cruz, ou=Public Works,
[email protected], c=US
Date: 2023.03.07 16:34:29 -08'00'
Digitally signed
by Nathan
Nguyen
Nicholas
Gong
Digitally signed by Nicholas Gong
DN: cn=Nicholas Gong, o=City of
Santa Cruz, ou=Finance,
[email protected],
c=US
Date: 2023.03.16 11:51:32 -07'00'
Elizabet
h Cabell
Digitally signed by Elizabeth Cabell
DN: cn=Elizabeth Cabell, o=City of Santa Cruz,
ou=Finance Department,
[email protected], c=US
Date: 2023.03.17 13:57:44 -07'00'
21.3 1
Rosemary Balsley
From: Mark Buxbaum <[email protected]>
Sent: Monday, March 27, 2023 5:00 PM
To: City Council; Bonnie Bush; Fred Keeley
Cc: Bonnie Bush; Fred Keeley; Renee Golder; Sandy Brown; Sonja Brunner; Shebreh Kalantari-Johnson; Martine Watkins
Subject: Comment regarding SitelogiQ Harvey West Park Ballfield Lighting Project - City Council Meeting March 28, Agenda Item 21
Attachments: IDA Community-Friendly Outdoor Sports Lighting.pdf Hello Santa Cruz City Council,
We here at the Santa Cruz Chapter of the International Dark‐Sky Association have not had the opportunity to full evaluate the proposed lighting modifications at Harvey West Park.
That said, given that the Santa Cruz 2030 General Plan has as goals to "develop lighting design guidelines that reduce light spillage both upward and onto adjoining properties", and to
"consider appropriateness of lighting when reviewing proposed development or renovation of parks and recreation facilities" (pg. 96),
we urge City Council to ensure that the proposed lighting modifications conform as close as possible to the "IDA Community‐Friendly Outdoor Sports Lighting Guidelines" as described in the attached PDF.
Specifically, we request that the City ensure controls such as follows are implemented to ensure that any light trespass from the new installation can be minimized:
Controls – Provide advanced controls and documentation for the following a. Automatic and/or remote control system via smartphone apps, or direct remote communication to the company facility responsible for handling the lighting controls, to enforce shut‐off at locally established curfew time, not to be later than 11:00 PM (2300 hrs).
b. On‐site manual and/or remote control system shall also be provided to allow for the lights to be turned on or off at will (before curfew) to assure that only active sports fields are lighted.
c. Provide readily accessible controls to implement uniform and variable adaptive illumination levels for different task lighting needs on field, e.g. class of play, competition athletics, band practice, striping, mowing, sports practice, etc.
Adaptive dimming shall be possible across the range of 25% to 100% of full illumination.
21.4 2
Also, please update the agenda item 21's text from:
"Musco Lighting is a preferred brand by the Dark Sky IDASC local chapter." to
"The Santa Cruz Chapter of the International Dark‐Sky Association is cognizant that Musco Lighting has worked successfully with other jurisdictions in implementing dark sky friendlier lighting installations".
Thank you!
Mark Buxbaum
International Dark‐Sky Assocation ‐ Santa Cruz Chapter
21.5 IDA-Criteria for Community-Friendly Outdoor Sports Lighting v1.1
1. Compliance with all applicable Codes and Standards (e.g. Underwriter Laboratories, CEC, National Building Codes with Local Amendments)
2. Target Illumination – Measured on-field illuminance values appropriate for the application per IESNA RP-6-15 Sports and Recreational Area Lighting criteria CIE:
057-1983 together with modeled initial illuminance targets. To limit over-lighting, the design may vary by no more than 10% above the average target illuminance levels for each Class.
3. A modified approach to controlling backlight, uplight, and glare is applied with the following metrics:
A. Backlight – Directionality and application efficiency will be addressed indirectly through two methods that quantify off-site performance, one using the design luminance and another using measured illuminance. Backlight criteria will be difficult to meet without sufficient and appropriate setback of sports fields from the property line.
a. Total designed lumens not contained within the area encompassing the field perimeter and an area immediately adjacent to that area that has a 33 foot (10 meter) offset. As modeled, no more than 15% of the total lumens may be outside of this region.
b. Measured spill illuminance values, as measured with the light meter aimed in the direction of the brightest reading, shall not exceed criteria for the respective Environmental Zone nor shall it exceed the maximum initial spill illuminance values as modeled and specified in the design process. These measurements shall be taken a distance equal to 150’ (45 meters) beyond the edge of the field.
Measurements should be conducted with and without the facility lighting operating so that the sports facility lighting can be isolated from other natural and artificial light sources. For fields demanding higher illuminance levels and taller poles, the distance at which compliance is evaluated shall be 150’ beyond the edge of the field or one pole height distance from the field, whichever is greater.
If access to the 150’ distance perimeter is inaccessible, The field should be evaluated from representative locations as practicable.
21.6 B. Uplight – All luminaires must be designed such as to not emit direct light above the horizon, unless required for the activity (i.e. aerial sports) being played. In those cases, only 8% of the total (directly) applied lumens as modeled may be in this zone. For fields that have multiple kinds of sports, those not requiring aerial illumination, e.g. baseball, soft ball, the uplight component must not be active, turned off, or otherwise detectable.For modeling purposes, a horizontal ceiling grid shall be placed 5 feet (1.5 meters) above the top of the tallest pole, extending out to 150 feet (45 meters) beyond the edge of the field to determine compliance.
Installation shall not deviate from the design.
C. Glare – Modeled luminous intensity from any luminaire for any viewing angle at 5’ above grade level, at a distance equal to 150’ beyond the edge of the field shall not exceed 1000 candela (absolute). For fields demanding higher illuminance levels and taller poles, the distance at which compliance is evaluated shall be 150’ beyond the edge of the field or one pole height distance from the field, whichever is greater.
If access to the 150’ distance perimeter is inaccessible, The field should be evaluated from representative locations as practicable. This shall be verified through a luminaire photometric report and aiming summary report and visual inspection, or through an equivalent software application and visual inspection. CIE 150-2017
4. Lighting Zoning – Community-Friendly Outdoor Sports Lighting will only be certified if located in IES environmental zones E2 through E4, CIE E1 through E4,or MLO lighting zone LZ1 through LZ4. Areas especially sensitive to lighting such as E1 or LZ0 are not appropriate for this award program.
5. Controls – Provide advanced controls and documentation for the following:
a. Automatic and/or remote control system via smartphone apps, or direct remote communication to the company facility responsible for handling the lighting controls, to enforce shut-off at locally established curfew time, not to be later than 11:00 PM (2300 hrs).
b. On-site manual and/or remote control system shall also be provided to allow for the lights to be turned on or off at will (before curfew) to assure that only active sports fields are lighted.
c. Provide readily accessible controls to implement uniform and variable adaptive illumination levels for different task lighting needs on field, e.g. class of play, competition athletics, band practice, striping, mowing, sports practice, etc.
21.7 Adaptive dimming shall be possible across the range of 25% to 100% of full illumination.
2 d. A formal policy defining the appropriate level of illumination necessary for the specific activities and curfew times must be established and enforced. A copy of the policy will be included in the application for the Award of Excellence.
6. Other Lighting – The installed field lighting is not to be used for illuminating other area tasks. For example, if parking and concession areas lighting is desired, those areas shall be illuminated by separate luminaires and systems not associated with sports field illuminance needs. Other outdoor lighting at the site must, at a minimum, meet the lighting standards and lighting codes established by the community, and demonstrate how they are consistent with IDAs Values-Centered Lighting Policy.
References - List of References Standards
CIE 150 link:
https://www.techstreet.com/cie/standards/cie-150-2017?gateway_code=cie&product_id=1997388 CIE 057-1983 Lighting for football:
https://www.techstreet.com/cie/standards/cie-057-1983?product_id=1209990 Ref IES tm-15, LM-79, CIE: S 025, CIE: 126, CIE: 150-2017, CIE: 057-1983
21.8 City Council
AGENDA REPORT
DATE: 03/15/2023
AGENDA OF: 03/28/2023
DEPARTMENT: Public Works
SUBJECT: Emergency Electrical Inspection, Repair and Temporary Generator Installation at the Wastewater Treatment Facility (WWTF), and Approval of Additional Fuel Costs – Authorization of Emergency Contracts and Budget Adjustment (PW)
RECOMMENDATION: Motion to:
1) Ratify the emergency contract with Cupertino Electric Inc. for inspection and repair of the WWTF main switchboard and temporary standby generator connection in the amount of $95,000 in accordance with Chapter 3.08.160 “Emergency Procurement” of the Municipal Code and in a form approved by the City Attorney. The Public Works Director is authorized to execute change orders within the approved project budget.
2) Ratify the emergency contract with Aggreko Inc. for temporary standby generator rental at the WWTF in the amount of $171,273.50 in accordance with Chapter 3.08.160 “Emergency Procurement” of the Municipal Code and in a form approved by the City Attorney. The Public Works Director is authorized to execute change orders within the approved project budget. 3) Adopt a resolution to amend the FY 2023 budget and appropriate funds in the amount of $869,400 for emergency fuel costs for the WWTF operating budget – Gas and Oil. The Public Works Director is authorized to execute change orders within the approved project budget.
BACKGROUND: On February 7, 2023, staff noticed indications of an arc flash event had occurred at the Wastewater Treatment Facility (WWTF) main service entrance while conducting a routine site inspection. PG&E was immediately contacted, and a plant shutdown was scheduled for March 4, 2023, to inspect the main service entrance. Major equipment failed inspection and has prevented the return to PG&E power. The WWTF transferred operations to emergency standby generators however they are not intended to run continuously. Staff installed two additional 1.5 MW generators to supply temporary power to the WWTF until utility power can be re-established.
DISCUSSION: City of Santa Cruz (City) staff initiated an emergency contract with Cupertino Electric Inc. to immediately begin emergency repairs of failed main equipment and to connect temporary emergency generators to WWTF electrical equipment. City staff initiated an emergency contract with Aggreko Inc. to provide two 1.5 MW generators installed in parallel to supply power to the WWTF until utility power connection can be reestablished with PG&E.
22.1 Standby generators require fueling every 24 hours and staff request the approval of Council to appropriate funds for the emergency fuel costs into the WWTF operating budget – Gas and Oil.
Section 3.08.160 of the purchasing ordinance allows the Purchasing Manager to make emergency purchases when there exists a threat to public health, welfare or safety, provided that such acquisition is made with such competition as is practicable under the circumstances.
FISCAL IMPACT: There are adequate funds in the Wastewater Enterprise Fund. There is no impact to the General Fund.
Prepared By:
Katie Stewart
Senior Professional Engineer
Anne Hogan
Wastewater System Manager
Submitted By:
Nathan Nguyen, P.E.
Director of Public Works
Approved By:
Matt Huffaker
City Manager
ATTACHMENTS:
1. BUDGET ADJUSTMENT.PDF
22.2 City of Santa Cruz
BUDGET ADJUSTMENT REQUEST
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ACCOUNT 352-(&71$0(
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ACCOUNT 352-(&71$0(
LIDSSOLFDEOH
25EXPENDITURE ACCOUNT TITLE
NET: $
REQUESTED BY DEPARTMENT HEAD
APPROVAL
BUDGET/ACCOUNTING
5(9,(:('
FINANCE DIRECTOR
APPROVAL
CITYMANAGER
APPROVAL
5HVR
352-(&7
352-(&7
$02817
$02817
&RXQFLO$SSURYDO
TOTAL EXPENDITURE
TOTALREVENUE
'DWH
1VSQPTF
3FWJTFE/PWFNCFS
Clear Form
2023
03/09/2023
The Wastewater Treatment Facility (WWTF) experienced a failure in the electrical main service entrance and is operating with emergency standby generators until utility power can be re-established. It is necessary to add $869,400 to the WWTF operating budget - Gas and Oil to accommodate the increased fuel costs associated with this emergency. 0 721-40-65-7203-53320 Gas and Oil 869,400
869,400
-869,400
Katie
Stewart
Digitally signed by Katie Stewart
DN: cn=Katie Stewart, o=City of
Santa Cruz, ou=Public Work's
Department,
[email protected]
om, c=US
Date: 2023.03.09 14:39:18 -08'00'
Digitally signed
by Nathan
Nguyen
Tracy
Cole
Digitally signed by Tracy Cole
DN: cn=Tracy Cole, o=City of
Santa Cruz, ou=Finance,
[email protected],
c=US
Date: 2023.03.16 11:30:24
-07'00'
Elizabet
h Cabell
Digitally signed by Elizabeth Cabell
DN: cn=Elizabeth Cabell, o=City of Santa Cruz,
ou=Finance Department,
[email protected], c=US
Date: 2023.03.17 13:54:25 -07'00'
22.3 1
Rosemary Balsley
From: eric grodberg <[email protected]>
Sent: Monday, March 27, 2023 11:38 AM
To: City Council
Subject: Item 22 - WWTF emergency generators
Attachments: WWTF letter.odt; City Hall Diesel Generator.jpg; 20220912_122910.jpg; City Hall generator label.jpg; Library NG generator.jpg
Please see attached letter and photos.
22.4 Dear Mayor Keeley and Council,
I support the City's actions to keep the Waste Water Treatment Facility running, however because this is a large unanticipated cost (more than $1.1M) and will create significant amounts of additional air pollution, at a time when the City is making a concerted effort to reduce its environmental impacts, I have several questions and observations.
Cogeneration - 1.3 MW Methane Digesters: The WWTF has two very large capacity methane digesters. These digesters generate electricity from the waste water and use it to run the plant. This is one of the largest user based electric generators in the City. When I toured the WWTF, staff leading the tour told the group that the electricity produced by the the digesters was enough to power the entire plant and because of that, the WWTF seldom had to drawn on power from the grid.
I have several questions that I would like staff to address.
1. Are the Methane Digesters online?
2. How much power are the Digesters actually producing?
3. Do the Digesters run 24/7?
4. If the Digesters are not running continuously, can they be run off of PG&E supplied Natural Gas when not running to capacity, thereby limiting the need for diesel generators?
5. What are the gross power requirements for running the WWTF?
6. What are the net power requirements for running the WWTF, after taking into account the Digester Cogeneration and PV array power production?
Resiliency, Single Source Reliance, Natural Gas and Electricity Production – This is another clear example that our infrastructure is not yet ready for Building Electrification or the elimination of natural gas from our buildings.
Critical Infrastructure – we need to maintain critical infrastructure. Removing Natural Gas will prevent buildings from using Natural Gas backup generators. Instead, they will be forced to rely on diesel and gasoline backup generators which are much more polluting than natural gas generators. This is but one of several ways that building electrification can have the perverse effect of increasing Green House Gas and other polluting emissions. (Batteries are not an option for long term outages. Even grid scale batteries can only provide a few hours of backup.) BTW, the City Hall campus is backed up by a large diesel generator. In contrast the Library has a natural gas backup generator. Which is cleaner?
Attached are photos of the City Hall Diesel backup generator and the Library's Natural Gas generator. You can see the vent stacks from the diesel tank underneath the City Hall generator.
Regards,
-Eric Grodberg
https://www.cityofsantacruz.com/home/showpublisheddocument/58226/636204415585570000 https://www.cityofsantacruz.com/government/city-departments/public-works/wastewater-treatment-facility/cogeneration
22.5 22.6
22.7 22.8
22.9 22.10
City Council
AGENDA REPORT
DATE: 03/16/2023
AGENDA OF: 03/28/2023
DEPARTMENT: Public Works
SUBJECT: City of Santa Cruz Share of Household Hazardous Waste Collection Program Cost – Budget Adjustment (PW)
RECOMMENDATION: Resolution amending the FY 2023 budget to appropriate funds in the amount of $380,000 for the City of Santa Cruz portion of the County’s Household Hazardous Waste Collection Program.
BACKGROUND: The Resource Recovery Facility Household Hazardous Waste (HHW) Collection Facility is owned by the City of Santa Cruz (City) and is located at the Resource Recovery Facility at 605 Dimeo Lane. The Facility is operated by the County of Santa Cruz Household Hazardous Waste Program. The City shares the cost for the program.
The City has been participating in the County’s program for over twenty-six years. The City costs include supplies, disposal, training, permits, public outreach and capital costs.
DISCUSSION: The County of Santa Cruz typically bills twice a year for the City's participation cost; however, they did not send an invoice for FY 2022 costs until October 2022. In order to cover this year’s costs, it is necessary to add funds to the current FY 2023 refuse budget. Staff requests that Council approve a budget adjustment of $380,000, the anticipated yearly cost for City’s participation in the County run HHW program.
FISCAL IMPACT: The overall fiscal impact is $380,000. All funds will come out of the refuse enterprise fund. There is no impact to the General Fund.
Prepared By:
Guadalupe Sanchez
Superintendent of Resource
Recovery- Disposal
Submitted By:
Nathan Nguyen, P.E.
Director of Public Works
Approved By:
Matt Huffaker
City Manager
ATTACHMENTS:
1. BUDGET ADJUSTMENT.PDF
23.1 City of Santa Cruz
BUDGET ADJUSTMENT REQUEST
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)LVFDO<HDU
ACCOUNT 352-(&71$0(
LIDSSOLFDEOH
255(9(18($&&28177,7/(
ACCOUNT 352-(&71$0(
LIDSSOLFDEOH
25EXPENDITURE ACCOUNT TITLE
NET: $
REQUESTED BY DEPARTMENT HEAD
APPROVAL
BUDGET/ACCOUNTING
5(9,(:('
FINANCE DIRECTOR
APPROVAL
CITYMANAGER
APPROVAL
5HVR
352-(&7
352-(&7
$02817
$02817
&RXQFLO$SSURYDO
TOTAL EXPENDITURE
TOTALREVENUE
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2023
03/08/2023
The County of Santa Cruz typically bills twice a year for the City's participation cost in their Household Hazardous Waste program, however, they did not send an invoice for FY 2022 costs until October 2022. In order to cover this year’s costs, it is necessary to add funds to the current FY 2023 Refuse budget. Staff requests that City Council approve a budget adjustment of $380,000, which is the anticipated yearly cost for City's participation in the County run HHW program. 0 731-40-63-7303-52199 Other professional & technical services 380,000 380,000
-380,000
Christin
a Alberti
Digitally signed by Christina Alberti
DN: cn=Christina Alberti, o=City of Santa
Cruz, ou=Public Works,
[email protected], c=US
Date: 2023.03.15 07:49:16 -07'00'
Digitally signed
by Nathan
Nguyen
Tracy
Cole
Digitally signed by Tracy Cole
DN: cn=Tracy Cole, o=City of
Santa Cruz, ou=Finance,
[email protected],
c=US
Date: 2023.03.16 11:55:23
-07'00'
Elizabet
h Cabell
Digitally signed by Elizabeth Cabell
DN: cn=Elizabeth Cabell, o=City of Santa Cruz,
ou=Finance Department,
[email protected], c=US
Date: 2023.03.17 13:59:39 -07'00'
23.2 City Council
AGENDA REPORT
DATE: 03/14/2023
AGENDA OF: 03/28/2023
DEPARTMENT: City Manager
SUBJECT: 2023 Legislative Program and Platform (CM)
RECOMMENDATION: Motion to approve the 2023 Legislative Program and Platform.
BACKGROUND: The Legislative Program (Program) establishes the principles that will guide the City’s policy and legislative advocacy efforts at the regional, state, and federal level. The program focuses on the key areas that will enable the City of Santa Cruz to deliver projects and programs that meet the needs of our community. Adopted annually, the City’s Legislative Platform serves as a reference to guide the development of positions on legislative proposals and provides guidance for the City Council and staff throughout the year.
Within the Program, the Legislative Platform (Platform) streamlines the position-taking process by providing staff and our contracted government relations representatives with clear direction to advocate on these matters. The Platform helps ensure the City's timely response to support, oppose, or take neutral positions on legislation that could impact the City's ability to operate effectively. The Platform also conveys to legislators, policymakers, and the public where the City stands on important policy issues and legislative discussions. Additionally, staff may recommend platform amendments during the year to add, remove or modify language if unanticipated legislative issues arise.
In 2022, the focus of the Legislative Program and the accompanying advocacy efforts of Councilmembers, staff, and our contracted lobbyists proved effective for the City during the 2022 calendar year. This work brought nearly $5 million to the City in 2022 for the critical areas of affordable housing, and wildfire resilience, among others. In the past 3 years, the City has secured over $20M from advocacy and legislative efforts.
Notable successes include the award of congressionally directed spending for the Downtown Library Mixed Use project ($2 million), METRO Pacific Station North ($2 million) and Wildfire Prevention in the Face of Climate Change ($400k).
DISCUSSION: Now more than ever, securing federal and state political, policy and financial support will be critical for our near- and long-term success. Several key factors drive this year’s legislative agenda: (1) the City’s challenges in implementing of its first comprehensive Homelessness Response Action Plan adopted in 2021, (2) recent adoption of Securing Our Water Future Council Policy 34.7, (3) recent adoption of the Climate Action Plan 2030 and implementation workplan, and (4) damages sustained from the January 2023 bomb cyclone
24.1 event. The 2023 Legislative Platform focuses on four priority areas for advocacy: addressing homelessness, sustainability and resiliency, infrastructure, and economic vitality.
Through the Addressing Homelessness priority, we will seek support to prevent housed Santa Cruzans from becoming homeless while addressing the individual needs of vulnerable individuals in our community. At the same time, we will seek solutions that mitigate impacts of encampments in the community and advocate for appropriate funding to address the reality of homelessness in the City. A primary strategy for achieving this objective will be leading the formation of a statewide coastal coalition. Through this work, we will join forces with large and small coastal communities to develop a shared advocacy strategy to secure new state and federal funding, new state funding formulas, and push for expanded investments at all levels of government in mental health and substance abuse service and programs that help people secure and successfully stay in permanent and supportive housing. The City will seek to take advantage of the unprecedented investment in housing and homelessness by Governor Newsom and through HUD’s HOME Investment Partnerships and Homelessness Assistance Grants programs.
We will seek funding for the development of the Coral Street Master Plan project which will provide critical services to the unhoused including a Navigation Center, permanent supportive housing units, temporary shelter, hygiene services and wrap-around services for those most vulnerable.
The Sustainability and Resiliency advocacy priority will focus on supporting the City’s ability to rapidly enact climate solutions that support and enhance an equitable Santa Cruz community. We will work to ensure the effective performance of essential services, such as water and wastewater utilities, in the face of climate change effects that are already being experienced. We will seek to advance progress on actions identified in the Climate Adaptation Plan and Climate Action Plan 2030’s implementation plan, specifically around equitable building and transportation electrification, active transportation, and tree planting. We will work to address near term recovery and longer term planning necessary to address damages to West Cliff Drive caused by the bomb cyclone event and ensure longer term resilience of this community asset. And we will work to grow the local green economy through investments in workforce development. These efforts will be amplified through the City’s participation in the Monterey Bay Regional Climate Project Working Group where jurisdictions in the Monterey Bay area are working toward accelerating funding and implementing mutual priority climate projects.
The federal Infrastructure Investment and Jobs Act of 2021 and Inflation Reduction Act of 2022 give a unique opportunity to maximize engage both state and federal partners in support of our local infrastructure. We will work to secure funding and set forth a master investment strategy to address the significant backlog of funded and unfunded Capital Investment Program projects to build resiliency and restore the City’s aging public infrastructure, ensure the availability and affordability of essential community services, and maintain and enhance our community’s quality of life. Over $75 million in infrastructure-related federal grants are currently pending decisions.
While much of the slowdown from the COVID-19 pandemic has subsided, the City and many local businesses are still in recovery mode. The Economic Vitality priority aims to diversify revenue generation through actively pursuing new and varied sources. We will also work to support local economic recovery and regeneration of tourism dollars by seeking supports for local businesses and workers.
24.2 The accompanying Legislative Program outlines in greater detail the advocacy strategies, legislative platform, and process by which the City will engage with the state and federal legislative sessions, including the roles of City staff, elected officials, and contracted lobbying firms. The Platform was developed through meetings with City staff, the Mayor, our lobbyists, and benchmarking similar cities’ and the California League of Cities’ legislative platforms.
FISCAL IMPACT: None.
Prepared By:
Tiffany Wise-West
Sustainability and Climate
Action Manager
Submitted By:
Laura Schmidt
Assistant City Manager
Approved By:
Matt Huffaker
City Manager
ATTACHMENTS:
1. 2023 LEGISLATIVE PROGRAM MANUAL.PDF
24.3 2023
24.4 2
Contents
Purpose 3
Guiding Principles 3
Engagement Strategies 4
Legislative Priorities + Example Projects 4
Recent Legislative Funding Requests 11
Legislative Action Program Manual 12
California State Legislative Timeline 2023 18
24.5 3
Purpose
The Legislative Program establishes the principles that will guide the City’s policy and legislative advocacy efforts at the regional, state, and federal level. The goal is to improve the City’s ability to deliver quality services and programs cost effectively to meet the evolving community needs and maintain infrastructure. The legislative program will do so by targeting legislative advocacy and securing legislatively approved funding that will mitigate local cost increases by providing alternative funding that offsets what would otherwise be funded by rate payers or tax payers.. Adopted annually, the City’s Legislative Platform serves as a reference to guide the development of positions on legislative proposals and provides guidance for the City Council and staff throughout the year.
Guiding Principles
Maintain and Enhance Funding Opportunities
Support development and implementation of measures that allow the City to receive or compete for its fair share of regional, state and federal funding, including competitive grants and other funding programs. Support initiatives that promote dedicated funding streams to cities with critical service needs, such as coastal cities and county seats, and that enable Santa Cruz to maintain equitable access to essential services for its residents and businesses.
Promote Economic Development
Support legislative efforts designed to provide local governments with the tools necessary to bolster economic development. Support legislation and regulatory streamlining initiatives to enhance the City’s ability to attract and retain businesses and encourage business expansion and job retention. Support green workforce development to ensure achievement of climate goals.
Promote Healthy, Equitable, Sustainable and Climate Adapted Communities
Support measures that advance community health and well-being, equity, sustainability, and resilience, including aging and youth services, affordable housing and homelessness prevention, urban parks and open space, environmental and climate protection, resource conservation, vibrant libraries, arts and culture.
Collaborate with Regional Partners
Support opportunities to work collaboratively with local and regional partners on areas of mutual interest. Maintain strong relationships with other municipalities, local transportation agencies, special districts, regional government agencies, local elected
24.6 4
officials, school districts, community benefit organizations, philanthropic organizations, collaborative networks and college boards.
Advance Work to Address Critical Infrastructure Issues
Identify funding sources to facilitate and augment the City’s ability to develop and implement projects to address critical infrastructure needs that protect public health and safety, support achievement of goals and targets in the Climate Action Plan, the Climate Adaptation Plan and the Local Hazard Mitigation Plan, protect and enhance environmental quality and community sustainability.
Engagement Strategies
Staff and the City’s government relations consultants will employ a variety of public engagement strategies to support the 2022 Legislative Program, including:
Direct Engagement
Engage policymakers directly and sponsor legislation, submit correspondence and provide public testimony that communicates and advances the City’s legislative priorities and positions.
Building Coalitions
Engage local, regional, and statewide stakeholders to advocate on specific issues and participate in local, regional, statewide, and national coalitions organized to advance positions that are consistent with the 2022 Legislative Program. Lead a statewide coalition of coastal cities to advocate for policy and funding reform around the issue of homelessness.
Agency Connections
Foster and build state and federal agency relationships to advance state and federal funding competitiveness for the priorities identified in the 2022 Legislative program.
Legislative Priorities + Example Projects
Addressing Homelessness
Prevent housed Santa Cruzans from becoming homeless, address the individual needs of vulnerable individuals, mitigate impacts in the community, and advocate for appropriate funding to address the reality of homelessness in the City.
Homelessness
Advocate for, sponsor or support legislation that would:
• Provide homelessness prevention and services funding directly to cities that are proportionate to the rate of homelessness and the accompanying local impacts in that City.
24.7 5
• Increase local and state investment in direct homeless services, homelessness prevention, and rapid rehousing/supportive housing, and shift that funding to permanent, ongoing funding so that the predictable nature can allow for better informed investments in services, infrastructure, and capacity. • Remove barriers to and expand the availability of mental health and substance use disorder treatment.
• Increase ongoing funding for transitional housing units and permanent supportive housing units to house homeless households.
• Expand and maintain support for basic food, hygiene, and safety needs, especially for highly vulnerable populations, including persons living with a mental health diagnosis, persons with a substance use disorder, veterans, older adults, and persons with disabilities.
• Take a balanced approach that addresses the need for services for people experiencing homelessness while upholding the health, safety, and welfare of all people in Santa Cruz.
• Provide funding for the legal removal and storage of homeless belongings and cleaning of areas used by the homeless.
• Advance regional initiatives involving county, state, and federal governments to reduce chronic homelessness.
• Facilitate the expedited linkage of homeless individuals to housing and supportive services.
• Establish workforce development programs aimed at individuals transitioning out of homelessness.
• Expand Street Outreach Teams in collaboration with law enforcement, first responders, and the County’s Health and Mental Health Departments for those affected by homelessness and mental health issues.
Affordable and Permanent Supportive Housing
Linked to annual reporting on progress and metrics in the Regional Housing Needs Assessment (RHNA), cities that have prioritized affordable housing creation and have a track record of creating affordable housing should be provided an ongoing funding source to help meet these local and state priorities and state RHNA mandate. Advocate for, sponsor or support legislation that would:
• Fund the creation and preservation of affordable and supportive housing in the City, emphasizing low- and very-low-income households and workforce housing. o Provide annual funding to the City’s Affordable Housing Trust Fund and other cities who have established Affordable Housing Trust Funds to support the creation of affordable housing in their jurisdictions
o Examples include the three city-led 100% affordable housing projects currently in development and pre-development, Pacific Station South, Pacific Station
24.8 6
North and Downtown Library Affordable Housing project, together creating 300 units of affordable housing in our downtown
• Support the construction of affordable housing and permanent supportive housing programs.
• Exempt from CEQA the construction of emergency shelters, supportive housing, and affordable housing, including motel and hotel conversions to transitional or supportive housing.
• Increase Section 8 or other rental subsidies to
accommodate areas with the highest marketrate rents or lowest ratio of incomes to housing costs in the state.
• Amend both Federal and State Low-Income
Housing Tax Credit Programs to support and
deem competitive a mix of units in an
affordable housing project.
Sustainability and Resiliency
Rapidly enact climate solutions that support and
enhance an equitable community that is
sustainable and resilient and that ensures
effective performance of essential services, such
as water and wastewater utilities, in the face of
climate change effects that are already being
experienced. Grow the green economy through
workforce development.
Sustainability
Advocate for, sponsor or support state and
federal legislation that would catalyze
implementation of the Climate Action Plan 2030
adopted in 2022:
• Increase the adoption of electric vehicles and
charging infrastructure.
• Reduce emissions from transportation by
increasing walking and biking and access to
public transportation, including future rail
transit.
• Support satellite office and telework policy and infrastructure. • Eliminate natural gas use.
Workforce Development Projects
• $800,000 Your Future Is Our
Business to bring the
Construction Industry Education
Foundation’s (CIEF
https://www.cie.foundation/ )
programs for school-age
individuals to Santa Cruz County;
• $300,000 for expansion of the
County Office of Education’s PreApprenticeship program; • $200,000 in funding for jobs pilot
to fund electrification/green
health home retrofits for low
income people. This project
would be completed by a
contractor and the request for
proposal or bid package would
include a provision specifying that
vendor would hire and use local
hires, e.g., local PreApprenticeship and
Apprenticeship programs
participants; and
• $200,000 for initiation of local
apprenticeships with merit based
contractors by partnering with
the local merit based contractors
Association of Building
Contractors (or similar) to
develop and deliver that program
here locally.
24.9 7
• Equitably electrify buildings and bolster building stock resiliency through energy efficiency, local solar installations, and microgrids.
• Provide stable and fair electricity rates, fees, and solar generation credit. • Increase the efficiency of water and wastewater transportation and treatment. • Reduce organic and inorganic materials from entering the landfill in the City through producer responsibility initiatives, recyclable pre-processed material incentives, and the reduction of single-use products.
• Advance local government’s ability to set local policies relating to environmental “sustainability,” including but not limited to building standards and land use planning. • Increase tree planting, compost placement and encourage innovation in other carbon sequestration and carbon capture technology.
• Provide capacity and resources to scale up municipal efforts and regional coordination to rapidly draw down carbon.
Resiliency
Affordability for Santa Cruz customers receiving water and wastewater services is a growing problem. In the last several years this issue has emerged as a national concern related to environmental justice and the need to maintain equitable access to water and wastewater services to everyone. Advocate for, sponsor or support state and federal legislation that implement the Local Hazard Mitigation Plan, Climate Adaptation Plan and West Cliff Drive Adaptation and Management Plan and would:
• Fund and implement projects and programs for upgrading existing water, wastewater, and stormwater facilities and services to ensure effective functioning in the face of changing climate conditions, including increasing incidents of extreme weather. • Promote prevention and mitigation of wildfire risks by mandating responsible power management, funding fuel reduction activities and community engagement. • Fund coastal resilience and citywide climate adaptation studies, planning, monitoring and implementation.
• Promote training and development initiatives that support the collaboration between community partners and fund training and development for youth, veterans, and underemployed individuals in green jobs supporting the City’s sustainability and resiliency priorities.
• Fund capacity and resources for equitable engagement of frontline communities on resilience issues.
Infrastructure
Address the significant backlog of implementation of critically needed Capital Improvement Projects (CIP) to build resiliency and restore the City’s aging public infrastructure. Ensure the availability and affordability of essential community services
24.10 8
and maintain and enhance our community’s quality of life. Engage with both state and federal partners to maximize opportunities for the City through the federal Infrastructure Investment and Jobs Act of 2021, Inflation Reduction Act of 2022, state resources, and federal and state grants and low-interest loans. Advocate for, sponsor or support state and federal legislation that would:
• Allocate funding for the upgrading,
replacement, and construction of needed infrastructure
at the local level.
• Create transportation policies that fund longterm maintenance and development of infrastructure projects.
• Fund cost-effective water ecosystem projects
and ensure direct beneficiaries and cost causers fund
their fair share of projects that provide long-term
benefits to the state and its inhabitants (see box at left). • Fund projects and programs to increase water
system resiliency to climate change by supporting
reinvestment in and upgrades to increased storage of
available surface water through aquifer storage and
recovery and further development of alternative
supplies, such as advanced purified recycled water.
• Seek opportunities to bolster the effectiveness
of the San Lorenzo Flood Control Project as changes in
hydrology arise due to climate change.
• Fund park development, infrastructure, and
maintenance activities to ensure continuing community
access to high quality open spaces and to upgrade aging facilities and infrastructure to make them water and
energy efficient.
Water affordability issue
At the federal level, the Low Income
Household Water Assistance Program
(LIHWAP) has been develop to mirror
the long-standing Low Income
Household Energy Assistance Program
(LIHEAP) and funded with one time
money from the late 2020 COVID
rescue federal appropriation. The
program is being implemented by
Santa Cruz Municipal Utilities but is
limited to addressing arrearages and
does not provide resources for
ongoing rate subsidies such as that
available from the PUC authorized
PG&E California Alternative Rates for
Energy (CARE) Program.
At the state level, federal arrearage
funding and LIHWAP funding passed
through to the state has been added
to federal resources as a result of
allocation of some additional
resources in the FY 2022 May Revised
Budget, but no source of long-term
funding for water ratepayer
assistance has been identified. Both
the Senate and the Assembly passed
SB 222, a measure by Senator Dodd to
institute a state program for assisting
low income ratepayers, but the
Governor vetoed the measure
because it did not include an
identified source of funding for the
new program.
24.11 9
Specific Example Infrastructure Projects:
• West Cliff Drive Adaptation and Management Plan project implementation • Wharf Master Plan Implementation
• Wastewater Treatment Facility Electrifical System Upgrades • Coastal Rail Trail installation
• Newell creek Pipeline Replacement
• Graham Hill Water Treatment Plan Facility Improvement Plan Implementation • Water Supply Augmentation using aquifer storage and recovery, indirect potable reuse, direct potable reuse (ASR/IPR/DPR respectively), or desalination, • Parks Facilities (Civic Auditorium Rehabilitation, Landscaping and Landscpaing Irrigation Systems, Upgrade/Redesign of San Lorenzo Park and La Barranca Parks • Municipal Building and Transportation Fleet Electrification • PG&E Electricity Grid Upgrades
Infrastructure Grants pending currently at federal level:
• FEMA BRIC grant for Stormwater Pump Station No. 1 Upgrade ($15M) • FEMA Hazard Mitigation Grant for Climate Adaptation Plan and Local Hazard Mitigation Plan Updates ($200,000)
• FEMA Hazard Mitigation Grant Program for phase 2 of the Brackney Landslide Area Pipeline Risk Reduction Project. Received $1.2 million for phase 1 (design) and are seeking an additional $8.3 million for phase 2 (construction). • FEMA Hazard Mitigation Grant Program for Newell Creek Pipeline Relocation for Earthquake, Landslide, and Wildfire Risk Reduction. Requested $51.2 million and are on the waitlist under the 2021 NOFO process.
Economic Vitality
Diversify revenue generation through actively pursuing new and varied sources. Support local economic recovery and regeneration of tourism dollars by seeking supports for local businesses and workers. Advocate for, sponsor or support state and federal legislation that would:
• Fund recovery specifically for cities and businesses in majority tourism-based economies, such as Santa Cruz.
• Preserve and enhance federal assistance to local governments and oppose federal preemption of local authority.
• Prevent the state from borrowing, raiding, or otherwise redirecting local government funds (e.g., local taxes, sales tax, property taxes, etc.). • Ensure increased flexibility for the use of municipally generated revenues, such as the Public Education and Government fee, Utility Users Tax, and Development Impact Fees. • Retain and promote the success of local businesses.
• Replace redevelopment funding mechanisms within the City and state.
24.12 10
• Preserve funding mechanisms to promote continued economic development, including initiatives to provide financing for infrastructure and affordable housing. • Fund opportunities for small business assistance, loan programs for business improvements and tax credits for businesses.
• Provide tangible and productive tools and incentives to support job creation and retention.
• Creates a funding mechanism to accelerate innovation and entrepreneurship in the region.
• Fund programs and projects that maintain the affordability of essential services provided by the City’s water and wastewater systems and other critical infrastructure, which serve as the foundation for economic vitality. • Maintain cities’ abilities to require only commercial and industrial uses on potential development sites.
24.13 11
Recent Legislative Funding Requests (2020-2022)
At the request of department heads, a summary of recent federal legislative funding requests is provided. In the last three years, nearly $20M in funding has been successfully obtained through legislative funding requests. Provided for information only, it is acknowledged that the City’s strategy for making equests should be adapted to the reality that, at both the state and federal evel, multiple sources of funding exist. Requests that target different funding sources should consider all priorities articulated in this document, which are broad, diverse and reflective of the range of needs the City has. Staff urge caution in narrowing priorities on a macro-scale and, instead, suggest matching a condensed set of priorities with appropriate funding sources.
Downtown Library Mixed-Use Project ($5M request of total $107M) – $2M funded through federal allocation
Countywide Trades and Construction Workforce Pipeline ($1.5M) Wildfire Prevention in the Face of Climate Change ($400k) – funded via federal allocation
METRO Pacific Station North ($2M) - funded via federal allocation National Guard Armory Acquisition ($7M)
Drought Package – Water Supply Augmentation ($30M)
Water Dept Advanced Metering ($1M of $14M total project cost) - funded via federal allocation
Building a strong, green-centered local workforce ($1.5M) Multi-modal active transportation innovation and climate resiliency ($3M) Build a new, vibrant, full-service downtown neighborhood that connects, via the San Lorenzo River Walk, the Boardwalk to the Tannery Art Complex ($3M)
Tiny village homelessness sheltering and housing programs ($2M) Homelessness Response ($14M) funded by state sponsored legislation
24.14 12
Legislative Action Manual
Internal Coordination of the Legislative Program 12
The Role of the City Council 13
The Role of the City Manager’s Office 13
The Role of the Departments 14
Guidelines for Evaluating Legislation 14
Legislative Advocacy 15
Guidelines for Letter Writing 17
Procedure for City Council Meetings with Other Elected Representatives 17 Internal Coordination of the Legislative Program
1. Track
Legislation is tracked by the City Manager’s Office or brought to the City’s attention by residents, agencies, departments, organizations, public servants, and others. In addition, departments are urged to take the initiative to identify legislation of importance to the City.
2. Review
The City Manager’s Office reviews the proposed legislation and, if warranted, requests assistance from one or more departments. The City Manager or the appropriate departments evaluate the bill for its impact on the City of Santa Cruz, recommend a position and potential action, and, as appropriate, draft a statement or letter for use by the City Manager’s Office.
3. Determine Course of Action
One of two actions can be taken:
a. If the City Council has adopted a policy directly relevant to the legislation of concern, the City Manager’s Office may proceed to prepare a letter for the Mayor’s signature;
b. If City Council policy does not exist, if the issue is politically controversial, or if there is significant local interest in the issue(s) posed by the legislation, the proposed legislation is referred to the City Council.
4. Referral to Council
The City Council will consider the information provided in a staff report, determine its position on the legislation and provide appropriate direction to staff.
5. Advocacy
The City Council, staff delegate or government relations consultant will connect with appropriate legislative bodies throughout the legislative year.
24.15 13
The Role of the City Council
The City Council has ultimate responsibility for determining the position the City will take on legislative issues. City Council positions applicable to legislation accumulate over the years and require periodic reevaluation to assure they are still relevant to the City’s needs and interests. The Council generally takes positions only on those issues that are of relevance to the City of Santa Cruz.
Some of the City Council’s responsibilities include:
• Conduct an annual review and update legislative priorities at both the State and Federal levels, taking the Council’s own strategic priorities into account. • Consider legislative issues brought to the Council’s attention by staff, residents, organizations and others and determine what, if any, position the City should take. • Determine Council positions on resolutions proposed for adoption by the League of California Cities and the National League of Cities. • Suggest areas for staff action concerning legislation. • Assume an active advocacy role with legislators on behalf of the City. This may include travel, which will be consistent with current City policies/procedures on travel.
The Role of the City Manager’s Office
The City Manager’s Office is the central coordinator of the City’s legislative program.
Some of the City Manger’s Office responsibilities include:
• Ensure the consistency of legislative policy throughout the City. • Serve as a clearinghouse and record keeper for all legislative activity occurring within the City.
• Coordinate contacts and communications with legislators and staff. • Coordinate the evaluation of proposed legislation that may affect the City. • Disseminate information on legislation of interest to departments and divisions within the City.
• Encourage suggestions from other departments concerning subjects for legislative action.
• Provide feedback to departments on the progress of legislation of interest. • Keep Council informed on the status of the City’s legislative program. • Recommend priorities for legislative action to ensure the effectiveness of the City’s lobbying activities.
• Plan, coordinate, and facilitate lobbying activities by Councilmembers and staff. • Maintain legislative files (bill texts, correspondence, records of lobbying activity, background information, Council policies).
• Serve as liaison to the League of California Cities, National League of Cities, and other organizations and jurisdictions concerning legislative activities. • Coordinate the annual review of legislative positions and prepare the City’s legislative platform.
24.16 14
The Role of Departments
The participation of the City’s various departments is essential to the success of the Legislative Program. The program requires departments to take responsibility for identifying, evaluating and monitoring legislation related to their functional areas. • Inform the Manager’s Office of legislative issues of importance to the City. • Designate a key contact within the department or division who will be responsible for coordinating the evaluation of legislation and monitoring those legislative issues of direct significance to the department. Continue to monitor bills as they progress through the Legislature or Congress.
• Establish a system within the department for assuring that requests for legislation evaluation are addressed promptly.
• Draft letters and provide analysis of legislation as requested by City Manager’s Office.
• Maintain a legislative file with the department to ensure consistency of policy recommendations.
• Establish mechanisms within the department for accessing direct information on legislation.
• Network with other cities, agencies, professional organizations, etc., to gain background information and a broader perspective on legislative issues. • Suggest organizations, individuals, publications, and other legislators who may be allies in lobbying the City’s position on certain legislation. • Understand and adhere to the City’s Legislative Advocacy Policy. Consult the Manager’s Office if there are questions.
• Annually, provide to the City Manager’s Office the department’s recommendations for the ensuing year’s legislative platform including, a review of existing positions, statements of underlying policies and principles, and priorities related to specific legislative issues.
Guidelines for Evaluating Legislation
Bills are frequently amended during their introduction and approval processes. Due to this, analyses and letters expressing the City’s position should be based on the most upto-date version of the bill.
1.Citywide Perspective
a. Bills often impact multiple departments in different ways. Therefore, it is essential that these different impacts are taken into consideration to form a more fair citywide position. It is the responsibility of the City Manager’s office to work with departments to reconcile differences.
2.Stating the City’s Position
a. If the department recommendation is to support, oppose, or amend a bill, it is important to draft the body of a letter that the City Manager’s Office can use in writing to the legislators. The City Manager’s Office will put the
24.17 15
letter in final form and send it to the appropriate committees, legislators, etc. A copy of the finalized letter will be routed to the evaluating department for its records.
Legislative Advocacy
The City Council holds the final authority for determining the position that will be taken by the City on legislation. The process outlined below would likely be followed only for key and controversial topics. In many instances, due to timing or the nature of the issue, the Mayor may sign a letter supporting or opposing legislation on behalf of the City. This position would need to be consistent with the City’s overall guiding legislative principles or the annually adopted priorities.
Process
Signatures
• Letters and other communications expressing the City’s position on legislation will customarily bear the signature of the Mayor or City Manager (or their delegate) particularly when the legislation relates to areas of General Plan policies and programs, other Council adopted policies, issues of Council interest, and fiscal matters.
• Letters and other communications expressing the City’s position on legislation not related to areas of General Plan policies and programs, other Council adopted policies, issues of Council interest, and fiscal matters require Council direction for the Mayor’s signature.
• If the legislation’s principal impact is on the City’s operating procedures, the City Manager or Department Heads (or their delegate) may sign the communication. • Copies of the letters will be distributed in the Council agenda packet to keep the Council and others informed of all City communications on legislation.
Independent Lobbying by City Personnel
City employees are not to lobby in the name of the City of Santa Cruz unless the department head has approved the activity and the City Manager has been informed in advance of the activity.
City Advisory Commissions and Committees
City employees who are staff or liaisons to Council-appointed advisory commissions and committees should encourage the bodies to alert the Council to legislation on which they recommend taking a position. Should legislative analysis and advocacy be a required function of the advisory commission or committee, those bodies shall ensure that function is carried out according to its bylaws.
24.18 16
Lobbying Methods
Listed here are a number of ways to inform and persuade legislators and others of the City’s position on proposed legislation. Departmental participation in the planning and implementation of these activities is critical to the City’s success. Departments should let the City Manager’s Office know of its interest and suggestions for lobbying bills they have evaluated.
Letters to
• The authors of proposed legislation
• The City’s elected representatives in the State Legislature and Congress • The Chair and members of legislative committees
• The Governor or President
If the letter is being sent within three working days of the scheduled committee hearing of the floor vote, the letter will be e-mailed. All records of faxes, mail, and e-mail, will be maintained by the City Manager’s Office.
Telephone calls
• Phone calls are useful for discussing with legislative staff the content and implications of a bill and for suggesting amendments or language clarification. However, many committees’ rules prevent them from counting phone calls as a legitimate expression of a City’s position on a bill. Pro and con positions are recorded if they are received in writing.
Meeting with elected representatives either in the district or in Sacramento and Washington
• It is Council’s practice to invite legislators representing Santa Cruz to an annual meeting to discuss all issues of importance to the City during that legislative session.
• Councilmembers are encouraged to attend legislative days set by the National League of Cities or League of California Cities.
Resolutions
• The Council is sometimes asked to adopt a resolution expressing its position on a bill. Resolutions are frequently sought by organizations as an indication of widespread support for a position, but they are less effective than letters when communicating directly with a legislator.
Testimony
• Testifying in person at a legislative committee hearing provides an opportunity to present the City’s position and respond to questions. The City Manager, the Mayor, a Councilmember, or the staff person with particular
24.19 17
expertise in the subject assumes the responsibility.
Editorial support from newspapers serving the Santa Cruz community • Staff members must seek approval from the City Manager’s Office before submitting editorials in newspapers.
Press Conferences
• Press conferences are called by the Mayor and Councilmembers and are staged in a location relevant to the issues being lobbied. Any press conference should be coordinated with the City Manager’s Office.
Coalitions with other jurisdictions
• These alliances are not limited to governmental bodies, but extend to all segments of the broader community that can similarly be affected by the legislation, e.g. business, nonprofit organization, environmental group, etc.
Guidelines for Letter Writing
• Concentrate on the letter content, rather than format. The City Manager’s Office will produce the final letter, addressing it to the proper legislators or committees and securing the appropriate signature. At the very start of the letter, indicate the bill number or title that is the subject of the letter. • A short concise letter is generally more effective than a lengthy treatise. • Provide specific examples of the impact of the legislation on the City of Santa Cruz. • When it is appropriate, discuss the effects of the proposed legislation on the legislator’s constituents.
Procedure for City Council Meetings with Other Elected
Representatives
Typically, the City Council meets annually with its County, State and Federal representatives. These meetings are an important component of building legislative relationships and to share issues of importance to the City of Santa Cruz. These meetings should be scheduled at the appropriate times during the respective legislative calendars.
• At direction of City Council, the other Elected Representative, or the City Manager, staff will schedule a meeting with the representative.
• The City Manager will seek agenda items from the Mayor and Council. • Staff from the City Manager’s Office will obtain agenda items from Departments and staff in the representative’s office.
24.20 18
2023 California State Legislative Timeline
Jan. 1 Statutes take effect.
Jan. 4 Legislature reconvenes.
Jan. 10 Budget must be submitted by Governor.
Jan. 20 Last day to submit bill requests to the Office of Legislative Counsel.
Feb. 17 Last day for bills to be introduced.
March 30 Spring Recess begins upon adjournment.
April 10 Legislature reconvenes from Spring Recess.
April 28 Last day for policy committees to hear and report to fiscal committees fiscal bills introduced in their house.
May 5 Last day for policy committees to hear and report to the floor non-fiscal bills introduced in their house.
May 12 Last day for policy committees to meet prior to May 31.
May 19 Last day for fiscal committees to hear and report to the floor bills introduced in their house. Last day for fiscal committees to meet prior to June 5.
May 30-June 2 Floor session only. No committee may meet for any purpose.
June 2 Last bills to be passed out of the house of origin.
June 5 Committee meetings may resume.
June 15 Budget Bill must be passed by midnight.
July 14 Last day for policy committees to hear and report bills.
July 14 Summer Recess begins on adjournment, provided Budget Bill has been passed.
Aug. 14 Legislature reconvenes from Summer Recess.
Sept. 1 Last day for fiscal committees to meet and report bills to the Floor.
Sept. 5 - 14 Floor session only. No committee may meet for any purpose.
Sept. 8 Last day to amend on the Floor.
Sept. 14 Last day for each house to pass bills. Interim Study Recess begins upon adjournment.
Oct. 14 Last day for Governor to sign or veto bills passed by the Legislature on or before Sept. 1 and in the Governor’s possession after Sept. 1.
24.21 1
Rosemary Balsley
From: Garrett <[email protected]>
Sent: Thursday, March 23, 2023 10:15 PM
To: City Council
Subject: 3.28.23 Agenda Item #24 Legislative platform
3.28.23 Agenda Item #24 Legislative platform
Dear Council,
Paying close attention to the sustainability and climate action managers politics over the last few years (which frankly make me sick), I would comment on the prepared legislative or lobbying documents prepared.
First of all, I consider virtually every unelected bureaucrat of the city devoid of the status and understanding to speak for the city in matters of legislative advocacy. Only the people of the city, and their elected representatives as proxies for the people, have this authority. Therefore, I reject other than council advisement of legislative intent of other authorities as a duty and constitute a limit of the duties of such unelected bureaucrats.
Advocacy is entirely up to the people and the city council. All recommendations of unelected bureaucrats should carry no weight, never ever appear as agenda items, and be disallowed really as agenda items.
The entire "Legislative program guiding and legislative advocacy at the regional, state, and federal level" is WAY beyond the pay grade of the persons preparing this document.
I don't recall them asking for input from the people or the council.
As such, you should simply reject most if not all of of this document.
To do otherwise is giving up the councils authority to an unelected bureaucrat who seems very interested in self promotion and career advancement to me and the city would be better off without in my opinion. Who elected her policy maker?
Garrett Philipp - Westside
24.22 2023 Legislative
Program
City Council Presentation | March 28, 2023
24.23 Why program and platform
• Establishes guiding principles for policy +
legislative advocacy efforts
• Guides development of positions + facilitates
timely response
• Focuses on meeting the needs of our community
• Conveys the City’s priorities
24.24 2022 Outcomes
Federal
• $2M for Downtown Library Mixed Use Project
• $2M for Pacific Station North Affordable
Housing Project
• $400k for Wildfire Prevention
24.25 Guiding Principles
• Maintain + Enhance Funding Opportunities
• Promote Economic Development
• Promote Healthy, Equitable, Sustainable and
Climate-Adapted Communities
• Collaborate with Regional Partners
• Advance Work to Address Critical
Infrastructure Issues
24.26 4 Legislative Priorities
• Addressing Homelessness
- Homelessness
- Affordable + Permanent Supportive Housing
• Sustainability + Resiliency
- Climate Plans Implementation
- Water + Wastewater Affordability
• Infrastructure
• Economic Vitality
24.27 Engagement Strategies
• Direct Engagement
-Letters from Council and City Manager
-Testimony
-Sponsored Legislation
• Building Coalitions
-Local Stakeholders to Statewide
• State and Federal Agency Connections
-Relationship building
-Direct Advocacy
24.28 2023 Funding Requests
• West Cliff Dr Mitchell’s Cove Seawall design
• Homeless Navigation Center
• Brackney Slide Pipeline Replacement
24.29 Key California Deadlines
May 12 - Policy Committees
May 19 - Fiscal Committees
June 2 - Bills out of house of origin
June 15 - Budget bill by midnight
Sept 14 - Houses to pass bills
Oct 14 - Governor to sign or veto
24.30 Recommended Action
Motion to approve the
2023 Legislative
Program and Platform.
24.31 City Council
AGENDA REPORT
DATE: 03/16/2023
AGENDA OF: 03/28/2023
DEPARTMENT: Police
SUBJECT: Military Equipment Purchase Request and Policy Update per Assembly Bill 481 (PD)
RECOMMENDATION: Motion to:
1) Introduce for publication an ordinance amending City of Santa Cruz Municipal Code (“SCMC”) Chapter 9.90 “AB 481 Military Equipment Use”; and 2) Approve Santa Cruz Police Department (“SCPD”) Policy 705 incorporating the amended inventory of military equipment as defined by Assembly Bill 481.
BACKGROUND: California State Assembly Bill (AB) 481, effective January 1, 2022, establishes requirements for the acquisition and use of items deemed “military equipment” in law enforcement and state agencies. Specifically, the bill requires law enforcement agencies to obtain approval from their governing body via ordinance adopting a military equipment use policy prior to purchasing, raising funds for, or acquiring military equipment.
DISCUSSION: The Santa Cruz Police Department is requesting approval to purchase one robot, “Throw bot 2” to assist officers in high-risk calls for service. The Throw bot is considered military equipment pursuant to Government Code section 7070(c)(1).
The Throw bot2 is an updated version of the Throw bot the Police Department currently has in inventory. The Throw bot2 is capable of color video, one-way audio (listening only), and IR (infrared) camera capabilities for use in low or no-light situations. The Throw bot2 can be thrown up to 120 feet and dropped from 30 feet without damage. It has an indoor range of up to 150 feet and an outdoor range of up to 450 feet. During typical use, the Throw bot2 will run for 110 minutes.
The current Throw bot used by the SCPD is over ten years old and near the end of its service life and has technological limitations compared to the Throw bot 2. The current Throw bot has had its battery replaced by the manufacturer once and is no longer under warranty. Though still operational, it has limitations. The Throw bot2 has a range and battery life almost double that of the current Throw bot when it was new. The Throw bot2 has one-way (listening only) audio capabilities, whereas the current Throw bot has no audio capabilities. The manufacturer is developing a two-way audio system compatible with the Throw bot2. Improvements have been made in water immersion protection to increase the service life of the Throw bot2.
25.1 The Throw bot2 is a tool to provide the SCPD with video and audio information, and will allow officers to place an inanimate object into a potentially high-risk or violent situation. Officers can learn the location of hostages and injured persons and the location of armed subjects. This type of firsthand knowledge aids greatly in de-escalating a situation. The ability to communicate with an armed or potentially violent person from a distance can reduce the chances of lethal force being used. If officers can see what a suspect is doing in real-time, it allows for a plan to be developed to deploy resources based on known facts rather than assumptions. Visual and audio contact is a crucial component of negotiations. In “active shooter” situations, the Throw bot2 can search for a suspect, victims, and Improvised Explosive Devices. In the case of a natural disaster, i.e., an earthquake, mudslide, or where a structure collapses, the Throw bot2 is small enough to be used in tight spaces in the search for people.
Pursuant to AB 481, the SCPD is requesting that the Council approve amendments to SCPD’s Military Equipment Policy 705, which incorporates the Throw bot 2, via amendments to Santa Cruz Municipal Code Chapter 9.90.
FISCAL IMPACT: The Throw bot 2 and its associated controller cost approximately $16,270.
The SCPD has money available through a Homeland Security grant obtained approximately five years ago, and there is no anticipated impact to the City's General Fund to purchase the Throw bot2.
Prepared By:
Catherine Brothers
Principal Management
Analyst
Submitted By:
Bernie Escalante
Chief of Police
Approved By:
Matt Huffaker
City Manager
ATTACHMENTS:
1. DRAFT ORDINANCE AMENDING CHAPTER 9.90 AB 481 MILITARY EQUIPMENT USE.DOCX
2. AMENDED SANTA CRUZ POLICE DEPARTMENT POLICY #705 MILITARY EQUIPMENT.PDF
3. SANTA CRUZ POLICE MILITARY EQUIPMENT INVENTORY - TRACK CHANGES.DOCX
25.2 ORDINANCE NO. 2023-XX
AN ORDINANCE OF THE CITY OF SANTA CRUZ AMENDING CHAPTER 9.90 OF THE SANTA CRUZ MUNICIPAL CODE PERTAINING TO AB 481 MILITARY EQUIPMENT WHEREAS, on September 30, 2021, Governor Gavin Newsom signed into law Assembly Bill 481, creating Government Code Section 7070, et seq., relating to the use of military equipment by California law enforcement agencies;
WHEREAS, AB 481 seeks to provide transparency, oversight, and an opportunity for meaningful public input on decisions regarding whether and how military equipment is funded, acquired, or used;
WHEREAS, on May 10, 2022, the Santa Cruz City Council (“City Council”) adopted Ordinance 2022-09, adding Chapter 9.90 to the Santa Cruz Municipal Code (“SCMC”) and adopting a Military Equipment Use Policy;
WHEREAS, the Santa Cruz Police Department (“SCPD”) Military Equipment List currently lists one (1) Recon Robotics “Throw bot,” purchased in 2013;
WHEREAS, SCPD wishes to purchase an additional Recon Robotics “Throw bot”; WHEREAS AB 481 in Government Code section 7071(a)(1)(C) requires SCPD to obtain approval from the City Council prior to acquiring military equipment; WHEREAS, the City Council, having received the amended Military Equipment Use Policy listing the additional throw bot and information required under AB 481 regarding the SCPD’s use of military equipment as defined in AB 481, deems it to be in the best interest of the City to approve the amended Military Equipment Policy as set forth herein.
BE IT ORDAINED by the City Council of the City of Santa Cruz as follows:
SECTION 1. Chapter 9.90 of the Santa Cruz Municipal Code is amended as follows:
9.90.010 MILITARY EQUIPMENT POLICY.
(a) The city council hereby adopts the April 2023 military equipment use policy (“policy”) set forth in Santa Cruz Police Department Policy 705 after having made the following determinations:
(1) The military equipment inventoried and presented in the policy is necessary because there is no reasonable alternative that can achieve the same objective of officer and civilian safety;
(2) The proposed policy will safeguard the public’s welfare, safety, civil rights, and civil liberties;
25.3 (3) The equipment identified in the policy is reasonably cost effective compared to available alternatives that can achieve the same objective of officer and civilian safety, if any;
(4) Prior military equipment use complied with the military equipment use policy that was in effect at the time, or, if prior uses did not comply with the accompanying military equipment use policy, corrective action has been taken to remedy nonconforming uses and ensure future compliance. The police department has submitted a proposed policy to the city council and has made those documents available on the police department’s website for at least thirty days prior to the public hearing concerning the military equipment at issue. (b) The policy was considered by the city council as an agenda item in an open session of a regular meeting, noticed in accordance with the Ralph M. Brown Act, at which public comment was permitted.
(c) The policy shall be made publicly available on the police department’s website for as long as the military equipment is available for use.
(d) The police department shall submit an annual military equipment report to the city council, containing the information required in Government Code Section 7072, and the city council shall determine whether each type of military equipment identified in that report has complied with the standards for approval set forth in subsections (a)(1) through (4).
(e) The city council shall review this chapter and vote on whether to renew it, on an annual basis at a regular meeting, in accordance with Government Code Section 7071(e)(2). (f) The city council approves the use of the policy and finds that it satisfies the requirements of Government Code Section 7070(d).
SECTION 2. Severability. If any section or portion of this chapter is found to be invalid by a court of competent jurisdiction, such finding shall not affect the validity of the remainder of the chapter, which shall continue in full force and effect.
SECTION 3. This ordinance shall take effect and be in force thirty (30) days after final adoption.
PASSED FOR PUBLICATION this #
th day of March, 2023, by the following vote:
AYES:
NOES:
ABSENT:
DISQUALIFIED:
25.4 APPROVED: ______________________________
Fred Keeley, Mayor
ATTEST: _________________________________
Bonnie Bush, City Clerk Administrator
PASSED FOR FINAL ADOPTION this #
th day of March, 2023, by the following vote:
AYES:
NOES:
ABSENT:
DISQUALIFIED:
APPROVED: ______________________________
Fred Keeley, Mayor
ATTEST: _________________________________
Bonnie Bush, City Clerk Administrator
This is to certify that the above and
foregoing document is the original
of Ordinance No. 2023-xx and that
it has been published or posted in
accordance with the Charter of the
City of Santa Cruz.
________________________________
Bonnie Bush, City Clerk Administrator
25.5 Policy
705
Santa Cruz Police Department
Santa Cruz PD-CA, Policy Manual
Copyright Lexipol, LLC 2023/02/10, All Rights Reserved.
Published with permission by Santa Cruz Police Department Military Equipment - 1
Military Equipment
705.1 PURPOSE AND SCOPE
The purpose of this policy is to provide guidelines for the approval, acquisition, and reporting requirements of military equipment (Government Code § 7070; Government Code § 7071; Government Code § 7072).
705.1.1 DEFINITIONS
Definitions related to this policy include (Government Code § 7070):
Governing body – The elected or appointed body that oversees the Department.
Military equipment – Includes but is not limited to the following:
• Unmanned, remotely piloted, powered aerial or ground vehicles. • Mine-resistant ambush-protected (MRAP) vehicles or armored personnel carriers. • High mobility multipurpose wheeled vehicles (HMMWV), two-and-one-half-ton trucks, five-ton trucks, or wheeled vehicles that have a breaching or entry apparatus attached. • Tracked armored vehicles that provide ballistic protection to their occupants. • Command and control vehicles that are either built or modified to facilitate the operational control and direction of public safety units. • Weaponized aircraft, vessels, or vehicles of any kind. • Battering rams, slugs, and breaching apparatuses that are explosive in nature. This does not include a handheld, one-person ram.
• Firearms and ammunition of_.50 caliber or greater, excluding standard-issue shotguns and standard-issue shotgun ammunition.
• Specialized firearms and ammunition of less than_.50 caliber, including firearms and accessories identified as assault weapons in Penal Code § 30510 and Penal Code § 30515, with the exception of standard-issue firearms.
• Any firearm or firearm accessory that is designed to launch explosive projectiles. • Noise-flash diversionary devices and explosive breaching tools. • Munitions containing tear gas or OC, excluding standard, service-issued handheld pepper spray.
• TASER® Shockwave, microwave weapons, water cannons, and long-range acoustic devices (LRADs).
• Kinetic energy weapons and munitions.
• Any other equipment as determined by a governing body or a state agency to require additional oversight.
25.6 Santa Cruz Police Department
Santa Cruz PD-CA, Policy Manual
Military Equipment
Copyright Lexipol, LLC 2023/02/10, All Rights Reserved.
Published with permission by Santa Cruz Police Department Military Equipment - 2
705.2 POLICY
It is the policy of the Santa Cruz Police Department that, with respect to military equipment, members of this department comply with the provisions of Government Code § 7071, Penal Code § 13652 (AB 48), City of Santa Cruz Resolution No. NS-29,862, and Council Policy No. 29-16. 705.3 MILITARY EQUIPMENT COORDINATOR
The Chief of Police should designate a member of this department to act as the military equipment coordinator. The responsibilities of the military equipment coordinator include but are not limited to:
(a) Acting as liaison to the governing body for matters related to the requirements of this policy.
(b) Identifying department equipment that qualifies as military equipment in the current possession of the Department, or the equipment the Department intends to acquire that requires approval by the governing body.
(c) Conducting an inventory of all military equipment at least annually. (d) Collaborating with any allied agency that may use military equipment within the jurisdiction of Santa Cruz Police Department (Government Code § 7071). (e) Preparing for, scheduling, and coordinating the annual community engagement meeting to include:
1. Publicizing the details of the meeting.
2. Preparing for public questions regarding the department’s funding, acquisition, and use of equipment.
(f) Preparing the annual military equipment report for submission to the Chief of Police and ensuring that the report is made available on the department website (Government Code § 7072).
(g) Establishing the procedure for a person to register a complaint or concern, or how that person may submit a question about the use of a type of military equipment, and how the Department will respond in a timely manner.
705.4 MILITARY EQUIPMENT INVENTORY
The following constitutes a list of qualifying equipment for the Department:
See attachment: 2022-05-09 Santa Cruz Police AB 481 Equipment List_FINAL.pdf 705.5 APPROVAL
The Chief of Police or the authorized designee shall obtain approval from the governing body by way of an ordinance adopting the military equipment policy. As part of the approval process, the Chief of Police or the authorized designee shall ensure the proposed military equipment policy is submitted to the governing body and is available on the department website at least 30 days prior to any public hearing concerning the military equipment at issue (Government Code § 7071). The military equipment policy must be approved by the governing body prior to engaging in any of the following (Government Code § 7071):
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Santa Cruz PD-CA, Policy Manual
Military Equipment
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Published with permission by Santa Cruz Police Department Military Equipment - 3
(a) Requesting military equipment made available pursuant to 10 USC § 2576a. (b) Seeking funds for military equipment, including but not limited to applying for a grant, soliciting or accepting private, local, state, or federal funds, in-kind donations, or other donations or transfers.
(c) Acquiring military equipment either permanently or temporarily, including by borrowing or leasing.
(d) Collaborating with another law enforcement agency in the deployment or other use of military equipment within the jurisdiction of this department. (e) Using any new or existing military equipment for a purpose, in a manner, or by a person not previously approved by the governing body.
(f) Soliciting or responding to a proposal for, or entering into an agreement with, any other person or entity to seek funds for, apply to receive, acquire, use, or collaborate in the use of military equipment.
(g) Acquiring military equipment through any means not provided above. 705.6 COORDINATION WITH OTHER JURISDICTIONS
Military equipment should not be used by any other law enforcement agency or member in this jurisdiction unless the military equipment is approved for use in accordance with this policy. 705.7 ANNUAL REPORT
Upon approval of a military equipment policy, the Chief of Police or the authorized designee should submit a military equipment report to the governing body for each type of military equipment approved within one year of approval, and annually thereafter for as long as the military equipment is available for use (Government Code § 7072).
The Chief of Police or the authorized designee should also make each annual military equipment report publicly available on the department website for as long as the military equipment is available for use. The report shall include all information required by Government Code § 7072 for the preceding calendar year for each type of military equipment in department inventory. 705.8 COMMUNITY ENGAGEMENT
Within 30 days of submitting and publicly releasing the annual report, the Department shall hold at least one well-publicized and conveniently located community engagement meeting, at which the Department should discuss the report and respond to public questions regarding the funding, acquisition, or use of military equipment.
705.9 PUBLIC SUBMITTAL OF COMPLAINTS, CONCERNS AND/OR QUESTIONS Any member of the public wishing to submit a complaint, concern, or question regarding the Department's use of each specific type of military equipment, should contact the Department's Professional Standards Unit, call (831) 420-5800, or visit the Department's website at https:// www.cityofsantacruz.com/government/city-departments/police and select the "Community Feed
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Military Equipment
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Back Form." Complaints, concerns, or questions can be submitted in any form (i.e. in person, telephone, email, etc.). The Department will work diligently to timely respond to the public submittal of complaints, concerns, and/or questions regarding the Department's use of each specific type of military equipment.
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Published with permission by Santa Cruz Police Department Attachments - 5
Attachments
25.10 1
Santa Cruz Police Department Military Use Equipment List Pursuant to AB481.
1. Robot (Category 1)
a. Description, quantity, capabilities and purchase cost:
I. Recon Robotics “Throw bot.” Purchase cost: $9,000 in 2013. Quantity: 1.
This equipment is a battery powered, remote operated device. It is equipped with a color camera as well as infrared capabilities that allow for use in low or no light situations. It does not have audio capabilities, nor is it capable of creating audio or video recordings. The Throw Bot is designed to be carried and operated by one person and can be thrown a significant distance without damage. It cannot traverse stairs on its own and it does not have any arm, claw or other type of manipulation attachment. The Throw Bot has no ability to have a weapon or other device affixed to it, nor is the Throw Bot capable of delivering a weapon or other device. This equipment is for use during high-risk incidents or incidents where its use may enhance officer or civilian safety. These include but are not limited to: a high-risk search warrant, barricaded subject or hostage negotiation/rescue. This equipment can provide officers with the location of a subject inside of a structure or room. It can assist officers in locating suspects, determining whether the suspect armed, and can provide the locations of injured persons or hostages. This equipment can provide critical tactical information without placing officers at undue risk. This equipment has been used in numerous high risk and dangerous incidents.
II. Recon Robotics “Throw bot 2.” Purchase cost: $16,270. Quantity: 1.
This equipment is a battery powered, remote operated device. It is equipped with a color camera as well as infrared capabilities that allow for use in low or no light situations. It is capable of one-way audio (Listening only). The audio and video captured by the Throw Bot 2 can be recorded onto an SD card via the remote device. The Throw Bot 2 is designed to be carried and operated by one person and can be thrown a significant distance without damage. It cannot traverse stairs on its own and it does not have any arm, claw, or other type of manipulation attachment. The Throw Bot 2 has no ability to have a weapon or other device affixed to it, the Throw Bot 2 is incapable of delivering a weapon or other device. This equipment is for use during high-risk incidents or incidents where its use may enhance officer or civilian safety. These include but are not limited to: a high-risk search warrant, barricaded subject or hostage negotiation/rescue. This equipment can provide officers with the location of a subject inside of a structure or room. It can assist officers in locating suspects, determining whether the suspect is armed, and can provide the locations of injured persons or hostages. This equipment can provide critical tactical information without placing officers at undue risk. This equipment has been used in numerous high risk and dangerous incidents.
III. AVITAR II by Robotex. SCPD has access to two AVITAR II robots maintained by the Santa Cruz Sheriff’s Office. The AVITAR II is a heavy25.11 2 duty robot, controlled by remote operation with a camera attachment owned by the Santa Cruz Sheriff’s Office.
b. Purpose:
To be used to remotely search areas and gain visual data. c. Authorized Use:
The SCPD Emergency Service Unit (ESU) Tactical team has primary control over the Throw Bot. It is available for use by any SCPD officer in any situation where it would enhance officer or civilian safety. The AVITAR II Robots are entirely owned and operated by Santa Cruz Sheriff’s Office personnel. d. Legal and Procedural Rules:
All applicable SCPD policies, including but not limited to, Search and Seizure312, Missing Persons-316, Emergency Services Unit-404 and Recordings 426.5. Any use of SCPD robots will be for official law enforcement purposes, pursuant to State and Federal law, and in a manner that respects the privacy of our community.
e. Required Training:
I. The SCPD conducts department specified training for personnel to use the Throw Bot. This includes set up, deployment, safe and effective use of the Throw Bot and Throw Bot 2. This includes set up, deployment, safe and effective use of the Throw Bots.
II. Training required for the use of the AVITAR II robots is in accordance with the Santa Cruz County Sherriff’s policy.
f. Expected Lifespan:
I. Throw Bot: The Throw Bot is designed to be in service 8-10 years. The Throw Bot will be used until repairs are no longer supported by the manufacturer, the Throw Bot has been in service since 2013. It has been repaired by the manufacturer once.
II. Throw Bot 2: The Throw Bot 2 is designed to be in service 8-10 years.
The Throw Bot 2 is covered under the manufacturer’s warranty for one year. Once the warranty expires any repairs required will be done by the manufacturer at SCPD’s cost.
III. AVITAR II: Not a consideration for SCPD.
g. Fiscal Impact
I. Throw Bot: No known annual maintenance costs.
II. Throw Bot 2: No known annual maintenance costs.
III. AVITAR II: No fiscal impact for SCPD.
2. Unmanned Aerial Vehicles (Category 1)
a. Description, quantity, capabilities and purchase cost.
SCPD does not currently possess any unmanned Aerial Vehicles. SCPD does have access to several Unmanned Aerial Vehicles maintained by the Santa Cruz County Sheriff’s Office. The Sherriff’s Office possess several different unmanned aerial vehicles that can provide higher altitude aerial views of locations or search areas. The Unmanned Aerial Vehicles can also provide interior search capabilities in areas that are impassable for SCPD’s Recon Robot and in situations where officers entering would be unsafe.
b. Purpose:
To be deployed when its capabilities would provide officer or incident
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commanders with an aerial view of a location or the interior of a specific location.
The unmanned aerial vehicles may be deployed in situations that include, but are not limited to, a search for a missing person, natural disaster management, tactical or other public safety and life preservation situations. c. Authorized Use:
Only operators assigned to the Santa Cruz County Sherriff’s department may operate the Unmanned Aerial Vehicles. The Santa Cruz County Chief Deputy must authorize all requests for use by outside agencies. d. Legal and Procedural Rules:
Use is established under the Santa Cruz County Sheriff’s Office Policy 606 and FAA Regulation 14 CFR Part 107. During their use, all other SCPD policies remain in effect, including but not limited to, Search and Seizure -312, Missing Persons-316, Emergency Services Unit-404. It is the policy of the SCPD to utilize Unmanned Aerial Vehicles only for official law enforcement purposes, pursuant to State and Federal law, and in a manner that respects the privacy of our community..
e. Required Training:
No required training for SCPD officers as only operators assigned to the Santa Cruz County Sherriff’s department may operate the equipment. f. Expected Lifespan:
Not a consideration for SCPD.
g. Fiscal Impact
No fiscal impact for SCPD.
3. Armored Personnel Carrier, vehicle with entry apparatus attached (Category 2&3) a. Description, quantity, capabilities and purchase cost:
Lenco Armored Rescue Vehicle (ARV). Purchase cost $230,378. Quantity: 1.
The ARV is designed to provide ballistic protection during tactical events, and is designed to withstand multiple bullet strikes from small arms fire and low level explosions. The ARV is equipped with remote operated spotlights, emergency lights, siren and a public address system. Common uses for the ARV include citizen and officer rescues, evacuations and the deployment of officers and chemical munitions. The ARV has been used in numerous high-risk and critical incidents including use by allied agencies in Santa Clara County, Santa Cruz County and San Mateo County.
b. Purpose:
To be used in response to high-risk or critical incidents to enhance officer and community safety, assist in scene containment and to assist in resolving critical incidents.
c. Authorized Use:
Only the Watch Commander or the ESU commander may authorize the use of the ARV. Deployment must be based on the specific circumstances of a given critical incident. The ARV was purchased through a BUASI grant. The terms of this grant require that SCPD make the ARV available to any allied agency with the BUASI area as long as the situation the ARV is requested for meets the criteria for deployment set forth in SCPD Policy 702. SCPD generally sends at least one member of the ESU tactical team with the ARV if one is available. d. Legal and Procedural Rules:
All applicable SCPD policies including but not limited to Vehicle Use -702, ESU
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Tactical Team-404. It is the policy of the Department to utilize armored vehicles only for official law enforcement purposes, and pursuant to State and Federal law.
e. Required Training:
Members of the ESU team train officers in the use of the ARV. This training includes capabilities of the ARV, safety considerations, conducting civilian and officer rescues as well as other deployment considerations. f. Expected Lifespan:
20 years.
g. Fiscal Impact
$4,312 per year (parts, labor, and fuel).
4. Ford F350 transport vehicle (ESU Truck, category 5)
a. Description, quantity, capabilities and purchase cost. 2008 Ford F350 transport vehicle. A standard Ford F350 truck chassis with a large box type compartment attached to the chassis from the cab back. Purchase cost: $65,000. Quantity: 1. The interior of the compartment is fitted with shelving and seats. The outsides of the compartment are fitted with multiple storage boxes. The vehicle contains various equipment, spare ballistic shields, breeching tools, small tools, medical supplies, pens, writing tablets, power inverters etc. b. Purpose:
The Ford F350 is deployed during critical incidents or any other instance where it can be utilized to transport personnel and equipment.
c. Authorized Use:
Any member of the SCPD is authorized to drive the vehicle if directed to do so.
The vehicle is used primarily by the ESU team.
d. Legal and Procedural Rules:
All applicable SCPD policies including but not limited to Vehicle Use -702 and Emergency Services Unit-404. It is the policy of the SCPD to use the vehicle only for official law enforcement purposes, and in accordance with California State law regarding the operation of motor vehicles.
e. Required Training:
All driver/operators shall receive training in the safe operation of the vehicle. f. Expected lifespan:
20 Years.
g. Fiscal Impact:
$1,158 per year (parts, labor, and fuel).
5. Command and Control Vehicles (Category 5)
a. Description, quantity, capabilities and purchase cost:
Chevy Tahoe Patrol Vehicle. Purchase cost: $60,000 each.
Quantity: (1) 2017 Model (Lieutenant), (3) 2018 models (Sergeants). These vehicles can act as a Mobile Command Center. The vehicle is equipped with file cabinets, dry erase board, medical supplies and additional mapping equipment. b. Purpose:
The Mobile Command Center is commonly utilized during incidents which involve the use of the Incident Command System (ICS). The Mobile Command Center assists with creating a set of objectives and overall goals, developing appropriate
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tactics, ensuring the allocation of appropriate resources, reviewing plans, communicating goals, tactics, expectations, and establishing accountability. c. Authorized Use:
The Mobile Command Center is used when deemed appropriate by the field supervisor or Watch Commander.
d. Legal and Procedural Rules:
All applicable SCPD policies including but not limited to Vehicle Use -702. It is the policy of the SCPD to use the vehicle only for official law enforcement purposes, and in accordance with California State law regarding the operation of motor vehicles.
e. Required Training:
All driver/operators shall receive training in the safe operation of the vehicle. f. Expected Lifespan:
I. Chevy Patrol Vehicle: 10 years.
II. The Mobile Command Center does not have a minimum or maximum lifespan and can be transferred to other vehicles.
g. Fiscal Impact:
I. There is no annual maintenance cost for The Mobile Command Center.
II. Vehicle maintenance cost is approximately $1,575 per year, per vehicle (parts, labor, and fuel).
6. Firearms of Greater than .50 caliber (Category 8)
a. Description, quantity, capabilities and purchase cost:
Mossberg 590 12 gauge pump action shotguns. Purchase cost, approximately $1,400 each. Quantity: 2. These shotguns are built on a standard Mossberg 590 action. They have a 13.5 inch barrel with a breaching muzzle brake affixed to the end of the barrel.
b. Purpose:
These shotguns are specifically designed to be used as breaching tools in situations where rapid entry into a structure is required, such as a hostage situation. They are used to defeat the locking mechanism or the hinges of door by firing a breaching shotgun round into these areas.
c. Authorized Use:
Only members of the ESU Tactical team who have completed a breaching school and are trained in the use of these weapons are authorized to use them. d. Legal and Procedural Rules:
All applicable department policies, including but not limited to Use of Force-300, Firearms-306, Search and Siezure-312 and Emergency Services Unit-404. It is the policy of the SCPD to utilize firearms and ammunition only for official law enforcement purposes, and pursuant to State and Federal law, including those regarding the use of force.
e. Required Training:
Only officers who have completed a department authorized breaching school may use these shotguns. The school must include specific training related to the breaching shotgun.
f. Expected Lifespan:
No expiration date. The shotguns may need replacement parts when serviced or replaced if they break.
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g. Fiscal Impact:
$0-$1,400 per year.
7. Firearms of Greater than .50 Caliber (Category 8)
a. Description, quantity, capabilities and purchase cost:
Remington 870 12 Gauge pump action chemical agent launching shotgun.
Purchase cost: $700. Quantity: 1.This shotgun was repurposed from an out of service shotgun that SCPD already had in inventory. This shotgun is specifically designed to launch a specific type of chemical munition. Though based on a standard 12 gauge shotgun, it is not designed or capable of firing lethal shotgun rounds. The buttstock and fore-end are bright orange and it is marked as a “Less Lethal” weapon. It has a purpose built launching cup permanently affixed to the muzzle.
b. Purpose:
This shotgun is designed to launch a specific type of launchable CS (2- chlorobenzylidene malononitrile) chemical agent canisters approximately 25 yards away. It allows officers to deploy chemical agents during critical incidents
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from behind cover or in a situation where hand delivering the agents would be unsafe. It allows officers the ability to deploy chemical agents in second and third floors of structures where it would be impossible for officers to hand deliver the agents.
c. Authorized Use:
Only officers assigned to the ESU Tactical team are currently authorized to use this launching shotgun.
d. Legal and Procedural Rules:
All applicable policies including but not limited to Use of Force-300, Firearms306, Control Devices and Techniqies-302, Search and Seizure- 312 and ESU Tactical team -404. It is the policy of the SCPD to utilize firearms and ammunition only for official law enforcement purposes, and pursuant to State and Federal law, including those regarding the use of force.
e. Required Training:
Officers must attend department training regarding the use of these items. This training includes SCPD policy, legal obligations and reporting requirements.
Instructors must attend a 40 hour POST certified instructor course regarding the use of chemical agents, noise, flash, diversionary devices (NFDD) and deployment platforms, in addition to manufacture specific instructor certifications.
The SCPD maintains officers who are POST certified as instructors of chemical munitions, NFDD and launching platforms. These officers in turn train other members of the department.
f. Expected Lifespan:
No expiration. The shotgun may need parts when serviced or replacement if it breaks.
g. Fiscal Impact:
$0-$700 per year.
8. Ammunition of .50 caliber or greater (Category 9).
a. Description, quantity, capabilities and purchase cost:
12. Gauge launching Cartridges Defense Technologies part number 1210.
Purchase cost: $371.25. Quantity: 55. These are blank shotgun cartridges that utilize black powder as the propellant.
b. Purpose:
When used with launching shotgun, the pressure created in the barrel by the expanding gasses of the black powder propellant provide enough force to launch the chemical agent canister from the shotgun. Though this ammunition is designed and is advertised for other uses, the SCPD only uses it as a launching cartridge for the launching shotgun.
c. Authorized Use:
Only officers assigned to the ESU team who are trained in the use of the launching shotgun are permitted to use these shotgun-launching rounds. d. Legal and Procedural Rules:
All applicable policies including but not limited to Use of Force-300, Firearms306, Control Devices and Techniqies-302, Search and Seizure- 312 and ESU Tactical team -404. It is the policy of the SCPD to utilize firearms and ammunition
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only for official law enforcement purposes, and pursuant to State and Federal law, including those regarding the use of force.
e. Required Training:
Officers must attend department training regarding the use of these items. This training includes SCPD policy, legal obligations and reporting requirements.
Instructors must attend a 40 hour POST certified instructor course regarding the use of chemical agents, NFDD and deployment platforms, in addition to manufacture specific instructor certifications. The SCPD maintains officers who are POST certified as instructors of chemical munitions, NFDD and launching platforms. These officers in turn train other members of the department. f. Expected Lifespan:
5 years.
g. Fiscal Impact:
$0-$500 per year.
9. Specialized Firearms and ammunition of less than .50 caliber (Category 10) a. Description, quantity, capabilities and purchase cost:
The department maintains a Precision Rifle team within the ESU Tactical team.
These officers are trained in the use of precision rifles that are specifically designed to stop lethal threats at various distances and through barrier mediums that a carbine rifle would not. These rifles are chambered in .308 Winchester.
This is a .30 caliber round that is highly accurate and used during potentially lethal encounters. The .308 is capable of defeating soft body armor at greater distances.
I. Defiance bolt action precision rifles. Purchase cost: $15,609. Quantity: 3.
II. Accuracy International AT series bolt action rifle. Purchase cost: $4,462.
Quantity: 1.
III. Hornady .308 155 grain ELD Match TAP ammunition. Purchase cost:
$6,720. Quantity: 3,200.
b. Purpose:
To provide officers with the ability to address lethal threats with more precision, at greater distances than a Carbine rifle or handgun are capable. c. Authorized Use:
Only those officers assigned to the ESU Tactical team, and who have been selected as members of the Precision Rifle team may use these weapons. d. Legal and Procedural Rules:
All applicable department policies, including but not limited to, Use of Force-300, Firearms-306 and ESU Tactical Team-404. It is the policy of the SCPD to utilize firearms and ammunition only for official law enforcement purposes, and pursuant to State and Federal law, including those regarding the use of force. e. Required Training:
Officers assigned to the Precision Rifle Team are required to attend and pass a POST certified basic Precision Rifle course before they are permitted to use these weapons.
f. Expected Lifespan:
I. Defiance Precision Rifles, no expiration date. They will need parts and service as they become worn or break.
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II. Accuracy International AT Series Rifle, no expiration date. It will need parts and service as they become worn or break.
III. Hornady 155 grain ELD Match TAP, no expiration date. g. Fiscal Impact:
I. Precision rifles, $0-$1,000 per fiscal year.
II. Hornady Ammunition, $0-$6,720 per fiscal year.
10. Flashbang, Teargas and Pepper balls (Category 12)
a. Description, quantity, capabilities and purchase cost:
Noise, Flash, Diversionary Devices (NFDD) commonly referred to as “flashbangs” are single use devices that emits a loud bang and a very bright flash. They are designed to disorient and distract dangerous subjects by overwhelming their senses and provide a window of time, approximately 6-8 seconds, for officers to take control of dangerous or high-risk situations.
Additionally, the SCPD possess “Stinger Grenades.” This device is a rubber ball that contains a small NFDD in addition to 60 .32 caliber rubber balls. When used, the grenade separates along its hemisphere and expels the balls while simultaneously giving a loud bang and bright flash. These are useful in crowd control or riot situations as a means to disperse groups of violent individuals in addition to the disorienting effect of the NFDD component to mitigate dangerous behavior. These can be purchased in configurations that include OC/CS (2chlorobenzylidene malononitrile/Oleoresin Capsicum) agent dispersing capabilities, inert powders or simply the .32 caliber balls.
I. 8902NR 12 gram low roll NFDD. Purchase cost: $2,426. Quantity: 40.
II. 7007 4 gram NFDD training reloads. Purchase cost $955. Quantity: 26.
III. 1090 Stinger Grenades. Purchase cost $523. Quantity: 10. b. Purpose:
To produce a loud noise, overpressure and a very bright flash, that can cause temporary psychological and physiological deprivation and give officers an advantage in high-risk tactical situations. Generally, NFDD (not including stinger grenades) are not a primary device used in riot situations, however there are narrow instances requiring authorization of the incident commander where they could be used.
c. Authorized Use:
Only those officers who are trained in the use of the devices are authorized to use them. Currently the only officers trained in the use of these devices are members of the ESU Tactical team. Use of NFDD is controlled by SCPD policy and best practice. Situations where an NFDD may be used include but are not limited to: hostage or barricaded subject situations, high-risk warrant service (arrest/search) where risk to officers is extremely high; during any other high risk situation where use of an NFDD may increase officer safety or training. d. Legal and Procedural Rules:
All applicable department policies, including but not limited to Use of Force-300, ESU tactical Team-404, Control Devices and Techniques-302. It is the policy of the SCPD to utilize these devices only for official law enforcement purposes, and pursuant to State and Federal law, including those regarding the use of force. e. Required Training:
Officers must attend department training regarding the use of these items. This
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training includes SCPD policy, legal obligations and reporting requirements.
Instructors must attend a 40 hour POST certified instructor course regarding the use of chemical agents, NFDD and deployment platforms, in addition to manufacture specific instructor certifications. The SCPD maintains officers who are POST certified as instructors of chemical munitions, NFDD and launching platforms. These officers in turn train other members of the department. f. Expected Lifespan:
I. 8902NR 12 gram low roll NFDD- 5 years.
II. 7007 4 gram NFDD training reloads- 5 years.
g. Fiscal Impact:
I. 8902NR 12 gram low roll NFDD-$0-$2000 per year.
II. 7007 4 gram NFDD training reloads $0-$832 per year.
11. Chemical Agents “Teargas” (Category 12)
a. Description, quantity, capabilities and purchase cost:
The SCPD uses chemical agents, commonly referred to as “teargas” as less lethal tools to disperse rioting subjects or on barricaded subjects. The two agents the SCPD uses are CS (2-chlorobenzylidene malononitrile) and OC (Oleoresin Capsicum). CS is an irritating agent and a lachrymator. It irritates the eyes and causes tearing while also irritating the respiratory system causing coughing.
These reactions are temporary and quickly subside especially if the subjects remove themselves from the area where the chemical agent has been deployed.
The U.S Army has tested CS extensively. There are no known allergic reactions to CS. OC is an, inflammatory agent. It causes a burning sensation, involuntary closure of the eyes and tightness in the chest. These symptoms generally subside within an hour or less of exposure. OC is legal for civilians to possess in certain quantities.
I. 1082 Riot Control CS Canister. Purchase cost: $352. Quantity: 12.
Pyrotechnic device used in outdoor situations to disperse rioting crowds, should not be used indoors due to risk of fire. Releases 75.6 grams of CS in 20-40 seconds.
II. 1032 Tri-Chamber Flameless CS Canister. Purchase cost: $647.
Quantity: 14. Pyrotechnic device designed to be used indoors and presents a minimal risk of fire. Hand delivered only. Releases 20 grams of agent in 20-30 seconds.
III. 5230B Baffled Launchable CS canister. Purchase cost: $416. Quantity:
10. Pyrotechnic device, designed to be launched from the launching shotgun. For use indoors and presents minimal risk of fire. Releases 25 grams of agent in 20-40 seconds.
IV. 1026 Triple Chaser separating canister. Purchase cost: $1,047. Quantity:
20. Pyrotechnic device, designed to be used outdoors in riot control situations. It is a canister, that when deployed separates into three smaller canisters. It allows officers to deploy chemical agents over a larger area with less munitions. Releases 92 grams of agent between three separate smaller canisters over 20-30 seconds.
V. 56854 Aerosol OC Fogger. Purchase cost: $89. Quantity: 4. Nonpyrotechnic canister. This canister sprays OC with the aid of compressed air. It is designed to be used indoors or in vehicles. It has no risk of fire. It
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will release a 1.3% OC spray over 15-25 seconds.
VI. 2262 40mm CS Liquid Ferret projectile. Purchase cost: $1,238. Quantity:
44. Non-pyrotechnic launched projectile. This munition is fired from a 40mm less lethal launcher. It is a hardened projectile intended to be used to defeat barriers such as glass and thin wooden barriers. When it penetrates or impacts a hard surface, it disperses liquid CS agent into the area. These are not for use against people.
VII. 2260 40mm OC Liquid Ferret projectile. Purchase cost: $289. Quantity:
10. Non-pyrotechnic launched projectile. This munition is fired from a 40mm less lethal launcher. It is a hardened projectile intended to be used to defeat barriers such as glass and thin wooden barriers. When it penetrates or impacts a hard surface, it disperses liquid OC agent into the area. These are not for use against people.
b. Purpose:
To limit escalating situations where lethal force is prohibited or undesirable.
Situations where these munitions would be deployed include, but are not limited to: self-destructive, dangerous or combative individuals; riot or crowd control situations or other violent civil unrest; situations where use of the munitions would provide a tactical advantage; training or authorized demonstration. A “tactical advantage” could include but is not limited to: deployment into a structure or vehicle where an armed violent/self-destructive subject is barricaded; or a riot situation where, deployment can either create an environment that causes violent persons to disperse or leave the area or limit the advance of a violent group or deny a violent group access to specific areas or law enforcement.
c. Authorized Use:
Only officers trained in the use of these munitions may use them. This includes officers assigned to the ESU Tactical team and officers assigned as “grenadiers” during a crowd control or violent civil unrest situation. d. Legal and Procedural Rules:
To be used in accordance with Penal Code section 13652 (AB 48). All applicable policies, including but not limited to Use of Force-300, ESU Tactical team-404 and Control Devices and techniques-302. It is the policy of the SCPD to utilize chemical agents only for official law enforcement purposes, and pursuant to State and Federal law, including those regarding the use of force. e. Required Training:
Officers must attend department training regarding the use of these items. This training includes SCPD policy, legal obligations and reporting requirements.
Instructors must attend a 40 hour POST certified instructor course regarding the use of chemical agents, NFDD and deployment platforms, in addition to manufacture specific instructor certifications. The SCPD maintains officers who are POST certified as instructors of chemical munitions, NFDD and launching platforms. These officers in turn train the other members of the department. f. Expected Lifespan:
I. 1082 Riot Control CS Canister-5 years.
II. 1032 Tri-Chamber Flameless CS Canister-5 years.
III. 5230B Baffled Launchable CS canister-5 years.
IV. 1026 Triple Chaser separating canister-5 years.
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V. 56854 Aerosol OC Fogger-5 years.
VI. 2262 40mm CS Liquid Ferret projectile-5 years.
VII. 2260 40mm OC Liquid Ferret projectile-5 years.
g. Fiscal Impact:
All chemical munitions $0-$5,000 per fiscal year based on fiscal budgeting.
12. Pepper Ball Guns and Pepper Balls (Category 12)
a. Description, quantity, capabilities and purchase cost.
I. Pepper ball guns. Purchase cost. $1,399. Quantity: 4. Pepper ball guns are a compressed air powered launcher, almost identical in manufacture to a common paintball gun. It fires .68 caliber plastic balls that contain an irritant powder. The pepper ball gun can fire pepper balls up to 60 feet and can launch pepper balls farther to saturate an area.
II. Pepper Balls. Purchase cost: $967 (per container). Quantity: 4 (containers of 375 pepper balls). Pepper Balls are .68 caliber projectiles.
They are a plastic shell that contains an irritant powder that consists of PAVA, a pepper derivative. This powder causes a burning sensation and involuntary eye closure when coupled with the impact of the projectile. It is used for pain compliance and disorientation.
b. Purpose:
To limit escalating situations where lethal force is prohibited or undesirable.
Situations where these munitions would be deployed, include: Self destructive, dangerous or combative individuals; riot or crowd control situations or other violent civil unrest; situations where use of the munitions would provide a tactical advantage; training or authorized demonstration. A “tactical advantage” could include but is not limited to: deployment into a structure or vehicle where an armed violent/self-destructive subject is barricaded, or a riot situation where, deployment can either create an environment that causes violent persons to disperse or leave the area or limit the advance of a violent group or deny a violent group access to specific areas or law enforcement. c. Authorized Use:
Only officers who are certified to use the pepper ball system. d. Legal and Procedural Rules:
To be used in accordance with Penal Code section 13652 (AB 48). All applicable policies including but not limited to Use of Force-300, Control Devices and Techniques-302. It is the policy of the SCPD to utilize pepper ball guns and pepper balls only for official law enforcement purposes, and pursuant to State and Federal law, including those regarding the use of force. e. Required Training:
Officers must attend a manufacturer specific training course to be certified to use the pepper ball systems.
f. Expected Lifespan:
I. Pepper ball guns, no expiration. They will need parts and service as they wear out or break.
II. Pepper Balls, 2 years.
g. Fiscal Impact
Pepper ball guns, $0-$500 per year.
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Pepper Balls $0-$500 per year.
13. Long Range Acoustic Device (LRAD) (Category 13)
a. Description, quantity, capabilities and purchase cost:
GENASYS Inc. LRAD-100X. Purchase cost: $8,179.77. Quantity: 1. This device is a self-contained, lightweight, battery operated hailer that communicates with great intelligibility up to 600 meters. It emits acoustic sound pressure levels up to 140db. It provides clear unmistakable, intelligible communications and stunning alert tones and can play pre-recorded audio messages, mp3 audio files and live broadcasting via a handheld microphone. It can broadcast tones at a volume that causes discomfort to those who hear the tones. The device provides directional sound capabilities allowing the user to direct the uncomfortable tones at a specific person or group of persons.
b. Purpose:
To serve as a notification/communication system during critical incidents, where the user is conveying a message to a person or persons. To be used during violent or riotous situations as a means to advise participants that they are involved in legally prohibited activities. To be used to broadcast alert tones in a directed manner at persons involved in riotous or destructive behavior as a means of dispersing the crowd and stopping the behavior. This device provides the SCPD with the ability to address violent persons or groups of persons during a riot or other violent crowd control situation without the use of kinetic less lethal weapons such 40mm launchers or chemical agents, allowing SCPD to attempt de-escalation via less forceful means.
c. Authorized Use:
Only officers who are trained in its use, with the authorization of an incident commander, may use this device.
d. Legal and Procedural Rules:
All applicable policies including but not limited to Use of Force-300, Control Devices and Techniques-302. It is the policy of the SCPD to utilize the LRAD only for official law enforcement purposes, and pursuant to State and Federal law.
e. Required Training:
Officers must attend a department specified training to use this device. f. Expected Lifespan:
20-25 years. Repairs completed as needed.
g. Fiscal Impact:
No known fiscal impact, the device is new.
14. 40mm Projectile Launchers (Category 14)
a. Description, quantity, capabilities and purchase cost:
The 40mm projectile launcher is a Less Lethal platform. It is not a firearm and is not capable of firing any military grade explosive projectile. It is designed to fire a projectile designed to be used against persons in situations where lethal force is prohibited. It allows officers to use Less Lethal Direct Impact spins stabilized munitions at distances up to 120 feet. The munitions cause pain compliance via blunt force impact. They can incapacitate violent subjects armed with weapons that are not firearms, allowing officers to safely take a subject into custody. The standoff capabilities allow officers to apply force via the impact rounds and
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assess if further application of force is required. This mitigates the need for officers to approach a violent/armed subject, reducing the chances of a lethal force scenario.
I. Defense Technologies DT1325 40mm-single barrel launchers. Purchase cost: $11,620. Quantity: 14. (No longer manufactured)
II. Lewis Machine and Tool (LMT) 1425 40mm single barrel launchers.
Purchase cost: $12,450. Quantity: 15.
III. Lewis Machine and Tool (LMT) 1440 40mm 4 shot multi launchers.
Purchase cost: $3,798. Quantity: 2.
IV. Penn Arms PGL65-40 40mm 6 shot multi launcher. Purchase cost:
Approximately $3,000. Quantity: 1.
b. Purpose:
To be used as a less lethal tool, to apply pain compliance to self-destructive, armed or combative/resistive persons, to prevent the person from causing harm to themselves or others. Also used during violent riots or large crowd control disturbances. They can be used to mark persons engaged in the above activity making the person(s) identifiable for arrest.
c. Authorized Use:
Only officers who have completed a department training course may deploy these less lethal tools. Every patrol vehicle has a single launcher in it for use by patrol officers. Only officers specifically trained in the use and application during a crowd control or riotous situation may use them in those instances. d. Legal and Procedural Rules:
To be used in accordance with Penal Code section 13652 (AB 48). All applicable policies, including but not limited to, Use of Force-300, Control Devices and Techniques-302 and Emergency services Tactical Team-404. It is the policy of the SCPD to utilize these devices only for official law enforcement purposes, and pursuant to State and Federal law, including those regarding the use of force. e. Required Training:
Officers must attend department training regarding the use of these items. This training includes SCPD policy, legal obligations and reporting requirements.
Instructors must attend a 40 hour POST certified instructor course regarding the use of chemical agents, NFDD and deployment platforms, in addition to manufacture specific instructor certifications. The SCPD maintains officers who are POST certified as instructors of chemical munitions, NFDD and launching platforms. These officers in turn train other members of the department. f. Expected Lifespan:
I. Defense Technologies DT1325 40mm-single barrel launchers: No expiration. No longer manufactured. Will be serviced or repaired as long as viable.
II. Lewis Machine and Tool (LMT) 1425 40mm single barrel launchers: No expiration. Will need parts and service when they wear out or break.
III. Lewis Machine and Tool (LMT) 1440 40mm 4 shot multi launchers: No expiration. Will need parts and service when they wear out or break.
IV. Penn Arms PGL65-40 40mm 6 shot multi launcher: No expiration. Will need parts and service when it wears out or breaks.
g. Fiscal Impact:
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For all of the listed launchers: $0-500 per year.
15. 40mm ammunition: (Category 14)
a. Description, quantity, capabilities and purchase cost:
40mm ammunition meant to be used in 40mm Projectile Launchers described above. All of the 40mm rounds in this section are approved for use against people if the force is justified. SCPD has three impact munitions, the Exact Impact is a less lethal projectile made of a foam rubber often called a “sponge round” with a consistency similar to a sponge. It is fired using smokeless powder and is designed to incapacitate people through pain compliance and impact. It is blue in color and can be fired from ranges between 5’ and 120’. The Direct Impact round is an impact munition that carries a powder payload within the projectile. The payload can be a chemical agent powder or it can contain an inert marking powder. These munitions provide the same less lethal pain compliance/de-escalation/violence mitigation functions as the Exact Impact munitions, with the added benefit of an irritant powder, or the ability to make a riotous subject identifiable for arrest. The SCPD also uses reusable training ammunition that allow true to real training at lower cost.
I. eXact Impact 40mm: Purchase cost: $4,011. Quantity: 140.
II. Direct Impact 40mm OC. Purchase cost: $732. Quantity: 24.
III. Direct Impact 40mm Marking. Purchase cost: $970. Quantity: 32.
IV. Training Sponge ammunition 24 round kit. Purchase cost: $2,537.
Quantity: 7.
b. Purpose:
To be used as a less lethal tool in situations where lethal force is prohibited. To assist officers in intervening in violent or potentially violent situations by use of pain compliance. To allow officers the ability to apply less lethal force from distance or behind cover, which provides time to assess the effect of the force used and re-apply or discontinue force as the situation allows. c. Authorized Use:
Only officers who are trained in the use of these projectiles are authorized to use them. Situations where use may be authorized include but are not limited to:
armed self-destructive individuals, violent resistive individuals, violent riotous individuals, situations where use would increase safety and mitigate the need for higher uses of force, authorized training or demonstrations. d. Legal and Procedural Rules:
To be used in accordance with Penal Code section 13652 (AB 48). All applicable policies including but not limited to Use of Force-300, Control Devices and Techniques-302. It is the policy of the SCPD to utilize these devices only for official law enforcement purposes, and pursuant to State and Federal law, including those regarding the use of force.
e. Required Training:
Officers must attend department training regarding the use of these items. This training includes SCPD policy, legal obligations and reporting requirements.
Instructors must attend a 40 hour POST certified instructor course regarding the use of chemical agents, NFDD and deployment platforms, in addition to manufacture specific instructor certifications. The SCPD maintains officers who
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are POST certified as instructors of chemical munitions, NFDD and launching platforms. These officers in turn train other members of the department. f. Expected Lifespan:
I. eXact Impact 40mm-5 years.
II. Direct Impact 40mm OC-5 years.
III. Direct Impact 40mm Marking-5 years.
IV. Training Sponge ammunition 24 round kit-5 years.
g. Fiscal Impact:
$0- 5,000 per year. Given the 5 year life span of these munitions, the SCPD may not need to purchase more every fiscal year.
16. Other Specified Items/Equipment (Category 15)
a. Description, quantity, capabilities and purchase cost:
The department currently issues AR-15/M4 style Carbine rifles to its officers as a means of addressing potential lethal force situations. The department issues two brands, Colt and Lewis Machine and Tool (LMT). The Carbine rifle is a lightweight, gas operated, air-cooled, shoulder fired, semi-automatic, magazine fed weapon. It is capable at providing accurate fire at various distances. The Hornady 5.56x45mm NATO, 75 grain BTHP (Boat Tail Hollow Point) TAP (Tactical Application Police) is the current standard issue rifle ammunition for all carbines in the department. This ammunition type is a medium caliber rifle round.
It is capable of defeating soft body armor a subject may be wearing, as well as other intermediate barriers. The duty round is specifically designed to limit over penetration thus mitigating danger to innocent persons or other officers. SCPD uses ammunition of the same caliber ammunition for training purposes.
Generally, the training ammunition is 55 grain full metal jacket ammunition. This type of ammunition is solely for training purposes. The cost of the training ammunition is less than that of the duty ammunition.
I. Colt Carbines. Purchase cost: $33,250. Quantity: 35.
II. LMT Carbines. Purchase cost: $49,000. Quantity: 35.
III. Hornady 5.56x45mm NATO, 75 grain BTHP TAP. Purchase cost:
$4,560. Quantity: 5,700. SCPD does not have to order duty ammunition every fiscal year.
IV. .223/5.56 55 grain full metal jacket is the standard training round the department uses. The manufacturer of the ammunition varies based on what is available at the time the department needs to make an order. Quantity: 35,500. Cost: $12,070.
b. Purpose:
The Carbine rifle provides officers the ability to employ a more precise weapon in potential lethal force encounters. It provides officers the ability address armed violent subjects at a greater distance than with a handgun. It provides officers with the ability to defeat soft body armor and intermediate barriers when addressing armed violent subjects.
c. Authorized Use:
Only officers who have completed a POST required 16 hour training course are authorized to use the carbine rifle and associated ammunition.
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d. Legal and Procedural Rules:
All applicable department policies, including but not limited to, Use of Force-300, Firearms-306. It is the policy of the SCPD to utilize firearms and ammunition only for official law enforcement purposes, and pursuant to State and Federal law, including those regarding the use of force.
e. Required Training:
All officers are required to attend a POST required 16 hour Patrol Rifle course before they are permitted to use these weapons. Currently this course is mandatory for all officers after graduating the Academy, before beginning the Field Training Program
f. Expected Lifespan:
Carbine Rifles, approximately 20 years. Service is performed as needed and parts are replaced as they become worn or break.
Hornady TAP 75 grain 5.56x45mm NATO, no expiration.
.223/5.56x45 training ammunition, no expiration.
g. Fiscal Impact:
Carbine Rifles: $0-$12,000 per fiscal year.
Ammunition: $0-$40,000 per fiscal year.
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Santa Cruz Police Department Military Use Equipment List Pursuant to AB481.
1. Robot (Category 1)
a. Description, quantity, capabilities and purchase cost:
I. Recon Robotics “Throw bot.” Purchase cost: $9,000 in 2013. Quantity: 1.
This equipment is a battery powered, remote operated device. It is equipped with a color camera as well as infrared capabilities that allow for use in low or no light situations. It does not have audio capabilities, nor is it capable of creating audio or video recordings. The Throw Bot is designed to be carried and operated by one person and can be thrown a significant distance without damage. It cannot traverse stairs on its own and it does not have any arm, claw or other type of manipulation attachment. The Throw Bot has no ability to have a weapon or other device affixed to it, nor is the Throw Bot capable of delivering a weapon or other device. This equipment is for use during high-risk incidents or incidents where its use may enhance officer or civilian safety. These include but are not limited to: a high-risk search warrant, barricaded subject or hostage negotiation/rescue. This equipment can provide officers with the location of a subject inside of a structure or room. It can assist officers in locating suspects, determining whether the suspect armed, and can provide the locations of injured persons or hostages. This equipment can provide critical tactical information without placing officers at undue risk. This equipment has been used in numerous high risk and dangerous incidents.
I.II. Recon Robotics “Throw bot 2.” Purchase cost: $16,270. Quantity: 1.
This equipment is a battery powered, remote operated device. It is equipped with a color camera as well as infrared capabilities that allow for use in low or no light situations. It is capable of one-way audio (Listening only). The audio and video captured by the Throw Bot 2 can be recorded onto an SD card via the remote device. The Throw Bot 2 is designed to be carried and operated by one person and can be thrown a significant distance without damage. It cannot traverse stairs on its own and it does not have any arm, claw, or other type of manipulation attachment. The Throw Bot 2 has no ability to have a weapon or other device affixed to it, the Throw Bot 2 is incapable of delivering a weapon or other device. This equipment is for use during high-risk incidents or incidents where its use may enhance officer or civilian safety. These include but are not limited to: a high-risk search warrant, barricaded subject or hostage negotiation/rescue. This equipment can provide officers with the location of a subject inside of a structure or room. It can assist officers in locating suspects, determining whether the suspect is armed, and can provide the locations of injured persons or hostages. This equipment can provide critical tactical information without placing officers at undue risk. This equipment has been used in numerous high risk and dangerous incidents.
II.III. AVITAR II by Robotex. SCPD has access to two AVITAR II robots maintained by the Santa Cruz Sheriff’s Office. The AVITAR II is a heavy25.28 2 duty robot, controlled by remote operation with a camera attachment owned by the Santa Cruz Sheriff’s Office.
b. Purpose:
To be used to remotely search areas and gain visual data. c. Authorized Use:
The SCPD Emergency Service Unit (ESU) Tactical team has primary control over the Throw Bot. It is available for use by any SCPD officer in any situation where it would enhance officer or civilian safety. The AVITAR II Robots are entirely owned and operated by Santa Cruz Sheriff’s Office personnel. d. Legal and Procedural Rules:
All applicable SCPD policies, including but not limited to, Search and Seizure312, Missing Persons-316, Emergency Services Unit-404 and Recordings 426.5. Any use of SCPD robots will be for official law enforcement purposes, pursuant to State and Federal law, and in a manner that respects the privacy of our community.
e. Required Training:
I. The SCPD conducts department specified training for personnel to use the Throw Bot. This includes set up, deployment, safe and effective use of the Throw Bot and Throw Bot 2. This includes set up, deployment, safe and effective use of the Throw Bots.
II. Training required for the use of the AVITAR II robots is in accordance with the Santa Cruz County Sherriff’s policy.
f. Expected Lifespan:
I. Throw Bot: The Throw Bot is designed to be in service 8-10 years. The Throw Bot will be used until repairs are no longer supported by the manufacturer, the Throw Bot has been in service since 2013. It has been repaired by the manufacturer once.
I.II. Throw Bot 2: The Throw Bot 2 is designed to be in service 8-10 years.
The Throw Bot 2 is covered under the manufacturer’s warranty for one year. Once the warranty expires any repairs required will be done by the manufacturer at SCPD’s cost.
II.III. AVITAR II: Not a consideration for SCPD.
g. Fiscal Impact
I. Throw Bot: No known annual maintenance costs.
I.II. Throw Bot 2: $16,270 (Homeland Security grant funded). No known annual maintenance costs.
II.III. AVITAR II: No fiscal impact for SCPD.
2. Unmanned Aerial Vehicles (Category 1)
a. Description, quantity, capabilities and purchase cost.
SCPD does not currently possess any unmanned Aerial Vehicles. SCPD does have access to several Unmanned Aerial Vehicles maintained by the Santa Cruz County Sheriff’s Office. The Sherriff’s Office possess several different unmanned aerial vehicles that can provide higher altitude aerial views of locations or search areas. The Unmanned Aerial Vehicles can also provide interior search capabilities in areas that are impassable for SCPD’s Recon Robot and in situations where officers entering would be unsafe.
b. Purpose:
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To be deployed when its capabilities would provide officer or incident commanders with an aerial view of a location or the interior of a specific location.
The unmanned aerial vehicles may be deployed in situations that include, but are not limited to, a search for a missing person, natural disaster management, tactical or other public safety and life preservation situations. c. Authorized Use:
Only operators assigned to the Santa Cruz County Sherriff’s department may operate the Unmanned Aerial Vehicles. The Santa Cruz County Chief Deputy must authorize all requests for use by outside agencies. d. Legal and Procedural Rules:
Use is established under the Santa Cruz County Sheriff’s Office Policy 606 and FAA Regulation 14 CFR Part 107. During their use, all other SCPD policies remain in effect, including but not limited to, Search and Seizure -312, Missing Persons-316, Emergency Services Unit-404. It is the policy of the SCPD to utilize Unmanned Aerial Vehicles only for official law enforcement purposes, pursuant to State and Federal law, and in a manner that respects the privacy of our community..
e. Required Training:
No required training for SCPD officers as only operators assigned to the Santa Cruz County Sherriff’s department may operate the equipment. f. Expected Lifespan:
Not a consideration for SCPD.
g. Fiscal Impact
No fiscal impact for SCPD.
3. Armored Personnel Carrier, vehicle with entry apparatus attached (Category 2&3) a. Description, quantity, capabilities and purchase cost:
Lenco Armored Rescue Vehicle (ARV). Purchase cost $230,378. Quantity: 1.
The ARV is designed to provide ballistic protection during tactical events, and is designed to withstand multiple bullet strikes from small arms fire and low level explosions. The ARV is equipped with remote operated spotlights, emergency lights, siren and a public address system. Common uses for the ARV include citizen and officer rescues, evacuations and the deployment of officers and chemical munitions. The ARV has been used in numerous high-risk and critical incidents including use by allied agencies in Santa Clara County, Santa Cruz County and San Mateo County.
b. Purpose:
To be used in response to high-risk or critical incidents to enhance officer and community safety, assist in scene containment and to assist in resolving critical incidents.
c. Authorized Use:
Only the Watch Commander or the ESU commander may authorize the use of the ARV. Deployment must be based on the specific circumstances of a given critical incident. The ARV was purchased through a BUASI grant. The terms of this grant require that SCPD make the ARV available to any allied agency with the BUASI area as long as the situation the ARV is requested for meets the criteria for deployment set forth in SCPD Policy 702. SCPD generally sends at least one member of the ESU tactical team with the ARV if one is available. d. Legal and Procedural Rules:
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All applicable SCPD policies including but not limited to Vehicle Use -702, ESU Tactical Team-404. It is the policy of the Department to utilize armored vehicles only for official law enforcement purposes, and pursuant to State and Federal law.
e. Required Training:
Members of the ESU team train officers in the use of the ARV. This training includes capabilities of the ARV, safety considerations, conducting civilian and officer rescues as well as other deployment considerations. f. Expected Lifespan:
20 years.
g. Fiscal Impact
$4,312 per year (parts, labor, and fuel).
4. Ford F350 transport vehicle (ESU Truck, category 5)
a. Description, quantity, capabilities and purchase cost. 2008 Ford F350 transport vehicle. A standard Ford F350 truck chassis with a large box type compartment attached to the chassis from the cab back. Purchase cost: $65,000. Quantity: 1. The interior of the compartment is fitted with shelving and seats. The outsides of the compartment are fitted with multiple storage boxes. The vehicle contains various equipment, spare ballistic shields, breeching tools, small tools, medical supplies, pens, writing tablets, power inverters etc. b. Purpose:
The Ford F350 is deployed during critical incidents or any other instance where it can be utilized to transport personnel and equipment.
c. Authorized Use:
Any member of the SCPD is authorized to drive the vehicle if directed to do so.
The vehicle is used primarily by the ESU team.
d. Legal and Procedural Rules:
All applicable SCPD policies including but not limited to Vehicle Use -702 and Emergency Services Unit-404. It is the policy of the SCPD to use the vehicle only for official law enforcement purposes, and in accordance with California State law regarding the operation of motor vehicles.
e. Required Training:
All driver/operators shall receive training in the safe operation of the vehicle. f. Expected lifespan:
20 Years.
g. Fiscal Impact:
$1,158 per year (parts, labor, and fuel).
5. Command and Control Vehicles (Category 5)
a. Description, quantity, capabilities and purchase cost:
Chevy Tahoe Patrol Vehicle. Purchase cost: $60,000 each.
Quantity: (1) 2017 Model (Lieutenant), (3) 2018 models (Sergeants). These vehicles can act as a Mobile Command Center. The vehicle is equipped with file cabinets, dry erase board, medical supplies and additional mapping equipment. b. Purpose:
The Mobile Command Center is commonly utilized during incidents which involve the use of the Incident Command System (ICS). The Mobile Command Center
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assists with creating a set of objectives and overall goals, developing appropriate tactics, ensuring the allocation of appropriate resources, reviewing plans, communicating goals, tactics, expectations, and establishing accountability. c. Authorized Use:
The Mobile Command Center is used when deemed appropriate by the field supervisor or Watch Commander.
d. Legal and Procedural Rules:
All applicable SCPD policies including but not limited to Vehicle Use -702. It is the policy of the SCPD to use the vehicle only for official law enforcement purposes, and in accordance with California State law regarding the operation of motor vehicles.
e. Required Training:
All driver/operators shall receive training in the safe operation of the vehicle. f. Expected Lifespan:
I. Chevy Patrol Vehicle: 10 years.
II. The Mobile Command Center does not have a minimum or maximum lifespan and can be transferred to other vehicles.
g. Fiscal Impact:
I. There is no annual maintenance cost for The Mobile Command Center.
II. Vehicle maintenance cost is approximately $1,575 per year, per vehicle (parts, labor, and fuel).
6. Firearms of Greater than .50 caliber (Category 8)
a. Description, quantity, capabilities and purchase cost:
Mossberg 590 12 gauge pump action shotguns. Purchase cost, approximately $1,400 each. Quantity: 2. These shotguns are built on a standard Mossberg 590 action. They have a 13.5 inch barrel with a breaching muzzle brake affixed to the end of the barrel.
b. Purpose:
These shotguns are specifically designed to be used as breaching tools in situations where rapid entry into a structure is required, such as a hostage situation. They are used to defeat the locking mechanism or the hinges of door by firing a breaching shotgun round into these areas.
c. Authorized Use:
Only members of the ESU Tactical team who have completed a breaching school and are trained in the use of these weapons are authorized to use them. d. Legal and Procedural Rules:
All applicable department policies, including but not limited to Use of Force-300, Firearms-306, Search and Siezure-312 and Emergency Services Unit-404. It is the policy of the SCPD to utilize firearms and ammunition only for official law enforcement purposes, and pursuant to State and Federal law, including those regarding the use of force.
e. Required Training:
Only officers who have completed a department authorized breaching school may use these shotguns. The school must include specific training related to the breaching shotgun.
f. Expected Lifespan:
No expiration date. The shotguns may need replacement parts when serviced or
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replaced if they break.
g. Fiscal Impact:
$0-$1,400 per year.
7. Firearms of Greater than .50 Caliber (Category 8)
a. Description, quantity, capabilities and purchase cost:
Remington 870 12 Gauge pump action chemical agent launching shotgun.
Purchase cost: $700. Quantity: 1.This shotgun was repurposed from an out of service shotgun that SCPD already had in inventory. This shotgun is specifically designed to launch a specific type of chemical munition. Though based on a standard 12 gauge shotgun, it is not designed or capable of firing lethal shotgun rounds. The buttstock and fore-end are bright orange and it is marked as a “Less Lethal” weapon. It has a purpose built launching cup permanently affixed to the muzzle.
b. Purpose:
This shotgun is designed to launch a specific type of launchable CS (2- chlorobenzylidene malononitrile) chemical agent canisters approximately 25 yards away. It allows officers to deploy chemical agents during critical incidents
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from behind cover or in a situation where hand delivering the agents would be unsafe. It allows officers the ability to deploy chemical agents in second and third floors of structures where it would be impossible for officers to hand deliver the agents.
c. Authorized Use:
Only officers assigned to the ESU Tactical team are currently authorized to use this launching shotgun.
d. Legal and Procedural Rules:
All applicable policies including but not limited to Use of Force-300, Firearms306, Control Devices and Techniqies-302, Search and Seizure- 312 and ESU Tactical team -404. It is the policy of the SCPD to utilize firearms and ammunition only for official law enforcement purposes, and pursuant to State and Federal law, including those regarding the use of force.
e. Required Training:
Officers must attend department training regarding the use of these items. This training includes SCPD policy, legal obligations and reporting requirements.
Instructors must attend a 40 hour POST certified instructor course regarding the use of chemical agents, noise, flash, diversionary devices (NFDD) and deployment platforms, in addition to manufacture specific instructor certifications.
The SCPD maintains officers who are POST certified as instructors of chemical munitions, NFDD and launching platforms. These officers in turn train other members of the department.
f. Expected Lifespan:
No expiration. The shotgun may need parts when serviced or replacement if it breaks.
g. Fiscal Impact:
$0-$700 per year.
8. Ammunition of .50 caliber or greater (Category 9).
a. Description, quantity, capabilities and purchase cost:
12. Gauge launching Cartridges Defense Technologies part number 1210.
Purchase cost: $371.25. Quantity: 55. These are blank shotgun cartridges that utilize black powder as the propellant.
b. Purpose:
When used with launching shotgun, the pressure created in the barrel by the expanding gasses of the black powder propellant provide enough force to launch the chemical agent canister from the shotgun. Though this ammunition is designed and is advertised for other uses, the SCPD only uses it as a launching cartridge for the launching shotgun.
c. Authorized Use:
Only officers assigned to the ESU team who are trained in the use of the launching shotgun are permitted to use these shotgun-launching rounds. d. Legal and Procedural Rules:
All applicable policies including but not limited to Use of Force-300, Firearms306, Control Devices and Techniqies-302, Search and Seizure- 312 and ESU Tactical team -404. It is the policy of the SCPD to utilize firearms and ammunition
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only for official law enforcement purposes, and pursuant to State and Federal law, including those regarding the use of force.
e. Required Training:
Officers must attend department training regarding the use of these items. This training includes SCPD policy, legal obligations and reporting requirements.
Instructors must attend a 40 hour POST certified instructor course regarding the use of chemical agents, NFDD and deployment platforms, in addition to manufacture specific instructor certifications. The SCPD maintains officers who are POST certified as instructors of chemical munitions, NFDD and launching platforms. These officers in turn train other members of the department. f. Expected Lifespan:
5 years.
g. Fiscal Impact:
$0-$500 per year.
9. Specialized Firearms and ammunition of less than .50 caliber (Category 10) a. Description, quantity, capabilities and purchase cost:
The department maintains a Precision Rifle team within the ESU Tactical team.
These officers are trained in the use of precision rifles that are specifically designed to stop lethal threats at various distances and through barrier mediums that a carbine rifle would not. These rifles are chambered in .308 Winchester.
This is a .30 caliber round that is highly accurate and used during potentially lethal encounters. The .308 is capable of defeating soft body armor at greater distances.
I. Defiance bolt action precision rifles. Purchase cost: $15,609. Quantity: 3.
II. Accuracy International AT series bolt action rifle. Purchase cost: $4,462.
Quantity: 1.
III. Hornady .308 155 grain ELD Match TAP ammunition. Purchase cost:
$6,720. Quantity: 3,200.
b. Purpose:
To provide officers with the ability to address lethal threats with more precision, at greater distances than a Carbine rifle or handgun are capable. c. Authorized Use:
Only those officers assigned to the ESU Tactical team, and who have been selected as members of the Precision Rifle team may use these weapons. d. Legal and Procedural Rules:
All applicable department policies, including but not limited to, Use of Force-300, Firearms-306 and ESU Tactical Team-404. It is the policy of the SCPD to utilize firearms and ammunition only for official law enforcement purposes, and pursuant to State and Federal law, including those regarding the use of force. e. Required Training:
Officers assigned to the Precision Rifle Team are required to attend and pass a POST certified basic Precision Rifle course before they are permitted to use these weapons.
f. Expected Lifespan:
I. Defiance Precision Rifles, no expiration date. They will need parts and service as they become worn or break.
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II. Accuracy International AT Series Rifle, no expiration date. It will need parts and service as they become worn or break.
III. Hornady 155 grain ELD Match TAP, no expiration date. g. Fiscal Impact:
I. Precision rifles, $0-$1,000 per fiscal year.
II. Hornady Ammunition, $0-$6,720 per fiscal year.
10. Flashbang, Teargas and Pepper balls (Category 12)
a. Description, quantity, capabilities and purchase cost:
Noise, Flash, Diversionary Devices (NFDD) commonly referred to as “flashbangs” are single use devices that emits a loud bang and a very bright flash. They are designed to disorient and distract dangerous subjects by overwhelming their senses and provide a window of time, approximately 6-8 seconds, for officers to take control of dangerous or high-risk situations.
Additionally, the SCPD possess “Stinger Grenades.” This device is a rubber ball that contains a small NFDD in addition to 60 .32 caliber rubber balls. When used, the grenade separates along its hemisphere and expels the balls while simultaneously giving a loud bang and bright flash. These are useful in crowd control or riot situations as a means to disperse groups of violent individuals in addition to the disorienting effect of the NFDD component to mitigate dangerous behavior. These can be purchased in configurations that include OC/CS (2chlorobenzylidene malononitrile/Oleoresin Capsicum) agent dispersing capabilities, inert powders or simply the .32 caliber balls.
I. 8902NR 12 gram low roll NFDD. Purchase cost: $2,426. Quantity: 40.
II. 7007 4 gram NFDD training reloads. Purchase cost $955. Quantity: 26.
III. 1090 Stinger Grenades. Purchase cost $523. Quantity: 10. b. Purpose:
To produce a loud noise, overpressure and a very bright flash, that can cause temporary psychological and physiological deprivation and give officers an advantage in high-risk tactical situations. Generally, NFDD (not including stinger grenades) are not a primary device used in riot situations, however there are narrow instances requiring authorization of the incident commander where they could be used.
c. Authorized Use:
Only those officers who are trained in the use of the devices are authorized to use them. Currently the only officers trained in the use of these devices are members of the ESU Tactical team. Use of NFDD is controlled by SCPD policy and best practice. Situations where an NFDD may be used include but are not limited to: hostage or barricaded subject situations, high-risk warrant service (arrest/search) where risk to officers is extremely high; during any other high risk situation where use of an NFDD may increase officer safety or training. d. Legal and Procedural Rules:
All applicable department policies, including but not limited to Use of Force-300, ESU tactical Team-404, Control Devices and Techniques-302. It is the policy of the SCPD to utilize these devices only for official law enforcement purposes, and pursuant to State and Federal law, including those regarding the use of force. e. Required Training:
Officers must attend department training regarding the use of these items. This
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training includes SCPD policy, legal obligations and reporting requirements.
Instructors must attend a 40 hour POST certified instructor course regarding the use of chemical agents, NFDD and deployment platforms, in addition to manufacture specific instructor certifications. The SCPD maintains officers who are POST certified as instructors of chemical munitions, NFDD and launching platforms. These officers in turn train other members of the department. f. Expected Lifespan:
I. 8902NR 12 gram low roll NFDD- 5 years.
II. 7007 4 gram NFDD training reloads- 5 years.
g. Fiscal Impact:
I. 8902NR 12 gram low roll NFDD-$0-$2000 per year.
II. 7007 4 gram NFDD training reloads $0-$832 per year.
11. Chemical Agents “Teargas” (Category 12)
a. Description, quantity, capabilities and purchase cost:
The SCPD uses chemical agents, commonly referred to as “teargas” as less lethal tools to disperse rioting subjects or on barricaded subjects. The two agents the SCPD uses are CS (2-chlorobenzylidene malononitrile) and OC (Oleoresin Capsicum). CS is an irritating agent and a lachrymator. It irritates the eyes and causes tearing while also irritating the respiratory system causing coughing.
These reactions are temporary and quickly subside especially if the subjects remove themselves from the area where the chemical agent has been deployed.
The U.S Army has tested CS extensively. There are no known allergic reactions to CS. OC is an, inflammatory agent. It causes a burning sensation, involuntary closure of the eyes and tightness in the chest. These symptoms generally subside within an hour or less of exposure. OC is legal for civilians to possess in certain quantities.
I. 1082 Riot Control CS Canister. Purchase cost: $352. Quantity: 12.
Pyrotechnic device used in outdoor situations to disperse rioting crowds, should not be used indoors due to risk of fire. Releases 75.6 grams of CS in 20-40 seconds.
II. 1032 Tri-Chamber Flameless CS Canister. Purchase cost: $647.
Quantity: 14. Pyrotechnic device designed to be used indoors and presents a minimal risk of fire. Hand delivered only. Releases 20 grams of agent in 20-30 seconds.
III. 5230B Baffled Launchable CS canister. Purchase cost: $416. Quantity:
10. Pyrotechnic device, designed to be launched from the launching shotgun. For use indoors and presents minimal risk of fire. Releases 25 grams of agent in 20-40 seconds.
IV. 1026 Triple Chaser separating canister. Purchase cost: $1,047. Quantity:
20. Pyrotechnic device, designed to be used outdoors in riot control situations. It is a canister, that when deployed separates into three smaller canisters. It allows officers to deploy chemical agents over a larger area with less munitions. Releases 92 grams of agent between three separate smaller canisters over 20-30 seconds.
V. 56854 Aerosol OC Fogger. Purchase cost: $89. Quantity: 4. Nonpyrotechnic canister. This canister sprays OC with the aid of compressed air. It is designed to be used indoors or in vehicles. It has no risk of fire. It
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will release a 1.3% OC spray over 15-25 seconds.
VI. 2262 40mm CS Liquid Ferret projectile. Purchase cost: $1,238. Quantity:
44. Non-pyrotechnic launched projectile. This munition is fired from a 40mm less lethal launcher. It is a hardened projectile intended to be used to defeat barriers such as glass and thin wooden barriers. When it penetrates or impacts a hard surface, it disperses liquid CS agent into the area. These are not for use against people.
VII. 2260 40mm OC Liquid Ferret projectile. Purchase cost: $289. Quantity:
10. Non-pyrotechnic launched projectile. This munition is fired from a 40mm less lethal launcher. It is a hardened projectile intended to be used to defeat barriers such as glass and thin wooden barriers. When it penetrates or impacts a hard surface, it disperses liquid OC agent into the area. These are not for use against people.
b. Purpose:
To limit escalating situations where lethal force is prohibited or undesirable.
Situations where these munitions would be deployed include, but are not limited to: self-destructive, dangerous or combative individuals; riot or crowd control situations or other violent civil unrest; situations where use of the munitions would provide a tactical advantage; training or authorized demonstration. A “tactical advantage” could include but is not limited to: deployment into a structure or vehicle where an armed violent/self-destructive subject is barricaded; or a riot situation where, deployment can either create an environment that causes violent persons to disperse or leave the area or limit the advance of a violent group or deny a violent group access to specific areas or law enforcement.
c. Authorized Use:
Only officers trained in the use of these munitions may use them. This includes officers assigned to the ESU Tactical team and officers assigned as “grenadiers” during a crowd control or violent civil unrest situation. d. Legal and Procedural Rules:
To be used in accordance with Penal Code section 13652 (AB 48). All applicable policies, including but not limited to Use of Force-300, ESU Tactical team-404 and Control Devices and techniques-302. It is the policy of the SCPD to utilize chemical agents only for official law enforcement purposes, and pursuant to State and Federal law, including those regarding the use of force. e. Required Training:
Officers must attend department training regarding the use of these items. This training includes SCPD policy, legal obligations and reporting requirements.
Instructors must attend a 40 hour POST certified instructor course regarding the use of chemical agents, NFDD and deployment platforms, in addition to manufacture specific instructor certifications. The SCPD maintains officers who are POST certified as instructors of chemical munitions, NFDD and launching platforms. These officers in turn train the other members of the department. f. Expected Lifespan:
I. 1082 Riot Control CS Canister-5 years.
II. 1032 Tri-Chamber Flameless CS Canister-5 years.
III. 5230B Baffled Launchable CS canister-5 years.
IV. 1026 Triple Chaser separating canister-5 years.
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V. 56854 Aerosol OC Fogger-5 years.
VI. 2262 40mm CS Liquid Ferret projectile-5 years.
VII. 2260 40mm OC Liquid Ferret projectile-5 years.
g. Fiscal Impact:
All chemical munitions $0-$5,000 per fiscal year based on fiscal budgeting.
12. Pepper Ball Guns and Pepper Balls (Category 12)
a. Description, quantity, capabilities and purchase cost.
I. Pepper ball guns. Purchase cost. $1,399. Quantity: 4. Pepper ball guns are a compressed air powered launcher, almost identical in manufacture to a common paintball gun. It fires .68 caliber plastic balls that contain an irritant powder. The pepper ball gun can fire pepper balls up to 60 feet and can launch pepper balls farther to saturate an area.
II. Pepper Balls. Purchase cost: $967 (per container). Quantity: 4 (containers of 375 pepper balls). Pepper Balls are .68 caliber projectiles.
They are a plastic shell that contains an irritant powder that consists of PAVA, a pepper derivative. This powder causes a burning sensation and involuntary eye closure when coupled with the impact of the projectile. It is used for pain compliance and disorientation.
b. Purpose:
To limit escalating situations where lethal force is prohibited or undesirable.
Situations where these munitions would be deployed, include: Self destructive, dangerous or combative individuals; riot or crowd control situations or other violent civil unrest; situations where use of the munitions would provide a tactical advantage; training or authorized demonstration. A “tactical advantage” could include but is not limited to: deployment into a structure or vehicle where an armed violent/self-destructive subject is barricaded, or a riot situation where, deployment can either create an environment that causes violent persons to disperse or leave the area or limit the advance of a violent group or deny a violent group access to specific areas or law enforcement. c. Authorized Use:
Only officers who are certified to use the pepper ball system. d. Legal and Procedural Rules:
To be used in accordance with Penal Code section 13652 (AB 48). All applicable policies including but not limited to Use of Force-300, Control Devices and Techniques-302. It is the policy of the SCPD to utilize pepper ball guns and pepper balls only for official law enforcement purposes, and pursuant to State and Federal law, including those regarding the use of force. e. Required Training:
Officers must attend a manufacturer specific training course to be certified to use the pepper ball systems.
f. Expected Lifespan:
I. Pepper ball guns, no expiration. They will need parts and service as they wear out or break.
II. Pepper Balls, 2 years.
g. Fiscal Impact
Pepper ball guns, $0-$500 per year.
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Pepper Balls $0-$500 per year.
13. Long Range Acoustic Device (LRAD) (Category 13)
a. Description, quantity, capabilities and purchase cost:
GENASYS Inc. LRAD-100X. Purchase cost: $8,179.77. Quantity: 1. This device is a self-contained, lightweight, battery operated hailer that communicates with great intelligibility up to 600 meters. It emits acoustic sound pressure levels up to 140db. It provides clear unmistakable, intelligible communications and stunning alert tones and can play pre-recorded audio messages, mp3 audio files and live broadcasting via a handheld microphone. It can broadcast tones at a volume that causes discomfort to those who hear the tones. The device provides directional sound capabilities allowing the user to direct the uncomfortable tones at a specific person or group of persons.
b. Purpose:
To serve as a notification/communication system during critical incidents, where the user is conveying a message to a person or persons. To be used during violent or riotous situations as a means to advise participants that they are involved in legally prohibited activities. To be used to broadcast alert tones in a directed manner at persons involved in riotous or destructive behavior as a means of dispersing the crowd and stopping the behavior. This device provides the SCPD with the ability to address violent persons or groups of persons during a riot or other violent crowd control situation without the use of kinetic less lethal weapons such 40mm launchers or chemical agents, allowing SCPD to attempt de-escalation via less forceful means.
c. Authorized Use:
Only officers who are trained in its use, with the authorization of an incident commander, may use this device.
d. Legal and Procedural Rules:
All applicable policies including but not limited to Use of Force-300, Control Devices and Techniques-302. It is the policy of the SCPD to utilize the LRAD only for official law enforcement purposes, and pursuant to State and Federal law.
e. Required Training:
Officers must attend a department specified training to use this device. f. Expected Lifespan:
20-25 years. Repairs completed as needed.
g. Fiscal Impact:
No known fiscal impact, the device is new.
14. 40mm Projectile Launchers (Category 14)
a. Description, quantity, capabilities and purchase cost:
The 40mm projectile launcher is a Less Lethal platform. It is not a firearm and is not capable of firing any military grade explosive projectile. It is designed to fire a projectile designed to be used against persons in situations where lethal force is prohibited. It allows officers to use Less Lethal Direct Impact spins stabilized munitions at distances up to 120 feet. The munitions cause pain compliance via blunt force impact. They can incapacitate violent subjects armed with weapons that are not firearms, allowing officers to safely take a subject into custody. The standoff capabilities allow officers to apply force via the impact rounds and
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assess if further application of force is required. This mitigates the need for officers to approach a violent/armed subject, reducing the chances of a lethal force scenario.
I. Defense Technologies DT1325 40mm-single barrel launchers. Purchase cost: $11,620. Quantity: 14. (No longer manufactured)
II. Lewis Machine and Tool (LMT) 1425 40mm single barrel launchers.
Purchase cost: $12,450. Quantity: 15.
III. Lewis Machine and Tool (LMT) 1440 40mm 4 shot multi launchers.
Purchase cost: $3,798. Quantity: 2.
IV. Penn Arms PGL65-40 40mm 6 shot multi launcher. Purchase cost:
Approximately $3,000. Quantity: 1.
b. Purpose:
To be used as a less lethal tool, to apply pain compliance to self-destructive, armed or combative/resistive persons, to prevent the person from causing harm to themselves or others. Also used during violent riots or large crowd control disturbances. They can be used to mark persons engaged in the above activity making the person(s) identifiable for arrest.
c. Authorized Use:
Only officers who have completed a department training course may deploy these less lethal tools. Every patrol vehicle has a single launcher in it for use by patrol officers. Only officers specifically trained in the use and application during a crowd control or riotous situation may use them in those instances. d. Legal and Procedural Rules:
To be used in accordance with Penal Code section 13652 (AB 48). All applicable policies, including but not limited to, Use of Force-300, Control Devices and Techniques-302 and Emergency services Tactical Team-404. It is the policy of the SCPD to utilize these devices only for official law enforcement purposes, and pursuant to State and Federal law, including those regarding the use of force. e. Required Training:
Officers must attend department training regarding the use of these items. This training includes SCPD policy, legal obligations and reporting requirements.
Instructors must attend a 40 hour POST certified instructor course regarding the use of chemical agents, NFDD and deployment platforms, in addition to manufacture specific instructor certifications. The SCPD maintains officers who are POST certified as instructors of chemical munitions, NFDD and launching platforms. These officers in turn train other members of the department. f. Expected Lifespan:
I. Defense Technologies DT1325 40mm-single barrel launchers: No expiration. No longer manufactured. Will be serviced or repaired as long as viable.
II. Lewis Machine and Tool (LMT) 1425 40mm single barrel launchers: No expiration. Will need parts and service when they wear out or break.
III. Lewis Machine and Tool (LMT) 1440 40mm 4 shot multi launchers: No expiration. Will need parts and service when they wear out or break.
IV. Penn Arms PGL65-40 40mm 6 shot multi launcher: No expiration. Will need parts and service when it wears out or breaks.
g. Fiscal Impact:
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For all of the listed launchers: $0-500 per year.
15. 40mm ammunition: (Category 14)
a. Description, quantity, capabilities and purchase cost:
40mm ammunition meant to be used in 40mm Projectile Launchers described above. All of the 40mm rounds in this section are approved for use against people if the force is justified. SCPD has three impact munitions, the Exact Impact is a less lethal projectile made of a foam rubber often called a “sponge round” with a consistency similar to a sponge. It is fired using smokeless powder and is designed to incapacitate people through pain compliance and impact. It is blue in color and can be fired from ranges between 5’ and 120’. The Direct Impact round is an impact munition that carries a powder payload within the projectile. The payload can be a chemical agent powder or it can contain an inert marking powder. These munitions provide the same less lethal pain compliance/de-escalation/violence mitigation functions as the Exact Impact munitions, with the added benefit of an irritant powder, or the ability to make a riotous subject identifiable for arrest. The SCPD also uses reusable training ammunition that allow true to real training at lower cost.
I. eXact Impact 40mm: Purchase cost: $4,011. Quantity: 140.
II. Direct Impact 40mm OC. Purchase cost: $732. Quantity: 24.
III. Direct Impact 40mm Marking. Purchase cost: $970. Quantity: 32.
IV. Training Sponge ammunition 24 round kit. Purchase cost: $2,537.
Quantity: 7.
b. Purpose:
To be used as a less lethal tool in situations where lethal force is prohibited. To assist officers in intervening in violent or potentially violent situations by use of pain compliance. To allow officers the ability to apply less lethal force from distance or behind cover, which provides time to assess the effect of the force used and re-apply or discontinue force as the situation allows. c. Authorized Use:
Only officers who are trained in the use of these projectiles are authorized to use them. Situations where use may be authorized include but are not limited to:
armed self-destructive individuals, violent resistive individuals, violent riotous individuals, situations where use would increase safety and mitigate the need for higher uses of force, authorized training or demonstrations. d. Legal and Procedural Rules:
To be used in accordance with Penal Code section 13652 (AB 48). All applicable policies including but not limited to Use of Force-300, Control Devices and Techniques-302. It is the policy of the SCPD to utilize these devices only for official law enforcement purposes, and pursuant to State and Federal law, including those regarding the use of force.
e. Required Training:
Officers must attend department training regarding the use of these items. This training includes SCPD policy, legal obligations and reporting requirements.
Instructors must attend a 40 hour POST certified instructor course regarding the use of chemical agents, NFDD and deployment platforms, in addition to manufacture specific instructor certifications. The SCPD maintains officers who
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are POST certified as instructors of chemical munitions, NFDD and launching platforms. These officers in turn train other members of the department. f. Expected Lifespan:
I. eXact Impact 40mm-5 years.
II. Direct Impact 40mm OC-5 years.
III. Direct Impact 40mm Marking-5 years.
IV. Training Sponge ammunition 24 round kit-5 years.
g. Fiscal Impact:
$0- 5,000 per year. Given the 5 year life span of these munitions, the SCPD may not need to purchase more every fiscal year.
16. Other Specified Items/Equipment (Category 15)
a. Description, quantity, capabilities and purchase cost:
The department currently issues AR-15/M4 style Carbine rifles to its officers as a means of addressing potential lethal force situations. The department issues two brands, Colt and Lewis Machine and Tool (LMT). The Carbine rifle is a lightweight, gas operated, air-cooled, shoulder fired, semi-automatic, magazine fed weapon. It is capable at providing accurate fire at various distances. The Hornady 5.56x45mm NATO, 75 grain BTHP (Boat Tail Hollow Point) TAP (Tactical Application Police) is the current standard issue rifle ammunition for all carbines in the department. This ammunition type is a medium caliber rifle round.
It is capable of defeating soft body armor a subject may be wearing, as well as other intermediate barriers. The duty round is specifically designed to limit over penetration thus mitigating danger to innocent persons or other officers. SCPD uses ammunition of the same caliber ammunition for training purposes.
Generally, the training ammunition is 55 grain full metal jacket ammunition. This type of ammunition is solely for training purposes. The cost of the training ammunition is less than that of the duty ammunition.
I. Colt Carbines. Purchase cost: $33,250. Quantity: 35.
II. LMT Carbines. Purchase cost: $49,000. Quantity: 35.
III. Hornady 5.56x45mm NATO, 75 grain BTHP TAP. Purchase cost:
$4,560. Quantity: 5,700. SCPD does not have to order duty ammunition every fiscal year.
IV. .223/5.56 55 grain full metal jacket is the standard training round the department uses. The manufacturer of the ammunition varies based on what is available at the time the department needs to make an order. Quantity: 35,500. Cost: $12,070.
b. Purpose:
The Carbine rifle provides officers the ability to employ a more precise weapon in potential lethal force encounters. It provides officers the ability address armed violent subjects at a greater distance than with a handgun. It provides officers with the ability to defeat soft body armor and intermediate barriers when addressing armed violent subjects.
c. Authorized Use:
Only officers who have completed a POST required 16 hour training course are authorized to use the carbine rifle and associated ammunition.
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d. Legal and Procedural Rules:
All applicable department policies, including but not limited to, Use of Force-300, Firearms-306. It is the policy of the SCPD to utilize firearms and ammunition only for official law enforcement purposes, and pursuant to State and Federal law, including those regarding the use of force.
e. Required Training:
All officers are required to attend a POST required 16 hour Patrol Rifle course before they are permitted to use these weapons. Currently this course is mandatory for all officers after graduating the Academy, before beginning the Field Training Program
f. Expected Lifespan:
Carbine Rifles, approximately 20 years. Service is performed as needed and parts are replaced as they become worn or break.
Hornady TAP 75 grain 5.56x45mm NATO, no expiration.
.223/5.56x45 training ammunition, no expiration.
g. Fiscal Impact:
Carbine Rifles: $0-$12,000 per fiscal year.
Ammunition: $0-$40,000 per fiscal year.
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Rosemary Balsley
From: Rhonda Reyna <[email protected]>
Sent: Monday, March 27, 2023 12:11 PM
To: City Council
Subject: Corrected Correspondence 03.28.23 Council Agenda Item #25 Military Equipment Purchase Dear Mayor, Vice Mayor and Council,
I am writing in opposition to the request for the Santa Cruz Police Department to obtain military equipment, the Throwbot 2, that would enable an already corrupt and cowardly police force to perpetrate further harm to women, children, homeless and disabled people in this community.
The June 28, 2021 and October 20, 2022 child kidnappings in this community that has rocked the world, demonstrated beyond a reasonable doubt that the men of Santa Cruz Police Department have zero ability to de‐escalate situations, but instead inflame them to the point of grave bodily injury to innocent girls.
I've read the Homeland Security Grant and know the funds are better spent on thwarting the kidnapping of any more children in our community and rescuing the three who are still being held hostage. These are Federal Crimes, 18 USC§ 241, 18 USC §242 and 18 UCS 55
Are all of you opposed to rescuing the kidnapped children and holding all their perpetrators accountable? The terminology used to request this frivolous and absurd purchase is pathetic. The most violent men in the City of Santa Cruz are the Santa Cruz Police who have been videotaped beating up homeless people, disabled people and children.
The other piece of military equipment that the SCPD has no business owning is the Bearcat which was allegedly used against a man named Richard Leet , "with cognitive disorder falsley accused as mental illness by non medical officials." , on December 21, 2021 around 6am. "Richard Leet advised the city and county 90 times he had a cognitive disability, and due to systemic medical malfeasance and lack of training police and other officials escalated all encounters with him when he was calm and non-violent"
A Bearcat was also allegedly inappropriately used against young women at the UC Santa Cruz campus during the February 2020 strikes. There is a clear pattern of behavior that the SCPD is not using it's military weapon for good, but instead to harm and threaten the most vulnerable. The article below stated the need for reform, yet things have gotten worse by the George Floyding of a 13 year old girl by then Officer Ruben Badeo, who was promoted 2 months later to Sergeant in charge of training. WTH?!
https://santacruzlocal.org/2020/06/04/santa‐cruz‐residents‐demand‐police‐reform/ The lack of transparency of Santa Cruz Police Department regarding body cam videos, use of force complaints on the city website that only contain cases up to 2019 and information on the use of the bearcat that only recorded some data for 2021, is very concerning. I did a check of current military equipment but that page came up with an error code.
As a community member addressing our public servants, I say, "No new toys for bad boys!" Spend that $16, 270 Homeland Security Grant money to rescue the three hostage children, M.L, S.L. and B.M. immediately. Are you opposed to doing that?
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Regards,
Rhonda Reyna
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Rosemary Balsley
From: Peter Gelblum <[email protected]>
Sent: Monday, March 27, 2023 3:28 PM
To: City Council; [email protected]
Cc: Tony Condotti; Bernie Escalante; Matt Huffaker; Bonnie Bush Subject: Item 25 on Agenda for 3/28 City Council Meeting Dear Mayor and Councilmembers ‐ I have the following comments on this agenda item, Military Equipment Purchase Request and Policy Update per Assembly Bill 481 (PD). I urge you to take this issue seriously and not just rubber stamp the SCPD's request; although it's not sexy, it concerns compliance with State law on a matter of great import to the community. The State law designates you, the governing body regarding the SCPD, as the only body able to require compliance with the law and see that it is strictly enforced. If you don't do that, nobody can or will.
AB 481 added Sections 7070‐7075 to the California Government Code. Section 7071(a)(1) requires the SCPD to get approval from the City Council before it acquires certain designated "military equipment," including the "throwbot" that the SCPD now seeks approval to acquire.
The same section requires the SCPD to submit a "military equipment use policy" for each piece of desired equipment, with several components.
1. The policy must include "the legal and procedural rules that govern each authorized use." See Section 7070(d)(4). Here, the SCPD says those rules are "All applicable SCPD policies, including but not limited to, Search and Seizure 312, Missing Persons‐316, Emergency Services Unit‐404 and Recordings 426.5." (emphasis added) The bolded language is so broad as to be meaningless. The Council should require that the bolded language be deleted. leaving the four specific policies as the rules that will govern use of the throwbot (and the other robots listed).
2. Section 7071(a)(1) also requires the SCPD to list all "authorized uses" for each piece of equipment. See Section 7070(d)(2). Here the SCPD says the "authorized uses" are "It is available for use by any SCPD officer in any situation where it would enhance officer or civilian safety." Again, this language is far too broad. It effectively allows the SCPD to use the equipment whenever it wants. This overbreadth undermines the purpose of AB 481, which was to limit the use of military equipment and to give the public's representatives ‐ you ‐ the ability to make sure the equipment is used in the intended way; this language is so broad that the Council cannot possibly make that determination. The Council should require the SCPD to delete the quoted language and replace it with a list of specific anticipated uses, which the Council can then authorize, or not.
3. Section 7072(a)(4) requires SCPD to file an annual report regarding all of its military equipment. Chief Escalate has told us that that report for the equipment approved in 2022 will be submitted this week for consideration at the April 11 Council meeting. That report must include "The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report." The item before you now for the throwbot lists the purchase price and says "No known annual maintenance costs," (although SCPD acknowledges in its submission that training is required). Although this language arguably complies with AB 481 when a new piece of equipment is acquired, the Council should require the SCPD to include all of the costs that they will have to include in the annual report on the throwbot, so that the Council and the public will have
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a better idea of the total costs of acquiring the throwbot. (AB 481 allows the Council to require more from SCPD than the statute does.)
4. Section 7071 requires the SCPD to include in its use policy "The mechanisms to ensure compliance with the military equipment use policy, including which independent persons or entities have oversight authority, and, if applicable, what legally enforceable sanctions are put in place for violations of the policy." See Section 7070(d)(6). This is entirely missing from the SCPD's use policy. The Council should require the SCPD to add this mandatory provision to the policy.
Thank you for your attention and consideration.
Peter Gelblum
Chair, Santa Cruz County Chapter,
ACLU of Northern California
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Rosemary Balsley
From: Ron Pomerantz <[email protected]>
Sent: Monday, March 27, 2023 4:58 PM
To: City Council; [email protected]
Subject: Agenda Item #25 for 3/28 Council Meeting: Military Equipment Purchase Request and Policy Update per Assembly Bill 481 (PD)
Re. Agenda Item #25 for 3/28 Council Meeting: Military Equipment Purchase Request and Policy Update per Assembly Bill 481 (PD)
Good afternoon Council members and Mayor.
I write you to question the need for the military equipment in the form of the “Throw Bot” being requested. The adage of “less is better” fits the matter at hand. Questions to be answered prior to your approval:
‐ How many times has the Throw Bot been used in emergencies over the past 10 years ‐ How much training has been done with this piece of military equipment? ‐ Where is it stored and how readily available is it? Why can’t SCPD team up with other law enforcement agencies to have one Throw Bot to be shared by at the other agencies, saving money and training?
Thank you for your time and thoughtful consideration.
Ron Pomerantz
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City Council
AGENDA REPORT
DATE: 03/16/2023
AGENDA OF: 03/28/2023
DEPARTMENT: Water
SUBJECT: Approval of $127,730,000 Loan for Water Infrastructure and Finance Innovation Act Loan to Support Implementation of Approved Water Capital Investment Projects (WT)
RECOMMENDATION: Resolution authorizing the City to enter into a loan agreement with the United States Environmental Protection Agency up to the amount of $127,730,000 for projects in the Council-approved capital investment plan (Graham Hill Water Treatment Plant (GHWTP) Facility Improvements Project, Newell Creek Pipeline Replacement (Felton to GHWTP) Project, University Tank 4 Project, and Aquifer Storage and Recovery (ASR) Project) and authorize the City Manager to execute the loan agreement and related documents, in forms approved by the City Attorney, and pay all closing costs.
BACKGROUND: The Water Department’s 2021 City Council adopted the Long Range Financial Plan (LRFP) which was developed over the last several years to support funding for construction of essential capital improvements. The LRFP recommended that debt-financing be used to cover up to 85% of the cost of the major projects identified as being needed to improve the reliability of Santa Cruz’s water supply and address climate vulnerabilities of the water system’s aging facilities. Using borrowing to pay for these major investments is appropriate because it spreads the cost over the long useful life of these facilities, allowing future users to contribute a share of the costs.
Over the past few years, the Water Department has used debt financing from several sources to support completion of various capital projects. Examples include 1.4% low-interest loans from the California Drinking Water State Revolving Loan Fund for the nearly completed Newell Creek Dam Inlet/Outlet Replacement Project and the in-progress GHWTP Concrete Tanks Replacement Project, and a loan from the California Infrastructure and Economic Development Bank to pay for replacing the failing Bay Street Reservoir treated-water storage facility with two new 1 million gallon concrete storage tanks.
The 2018 federal Water Infrastructure Finance and Innovation Act (WIFIA) authorized the federal Environmental Protection Agency (EPA) to develop and administer a new loan program to support construction of very large capital projects that have historically had difficulty qualifying for support from state revolving loan program funding due to intense competition for these funds. Often used in conjunction with State Revolving Fund Loans, WIFIA loans offer favorable interest rates, flexible repayment terms, and limited financial covenants and security pledges.
26.1 DISCUSSION: On June 23, 2020, Council authorized the Santa Cruz Water Department (SCWD) to submit a Letter of Interest to the WIFIA program for several capital improvements and if selected by the EPA, to submit a full application. In December 2021, the EPA announced that the City was officially selected to apply for a $181 million loan for the capital investment program (CIP), funding 49% of four projects: GHWTP Facility Improvements Project (GHWTP FIP), Newell Creek Pipeline Replacement (Felton to GHWTP) Project, University Tank 4 Project, and ASR Project. Staff anticipate financing the balance of the projects with a State Revolving Fund Loan, grants, internal funding, and revenue bonds.
After $127,730,000 is drawn down to pay for existing CIP expenses, the EPA is expected to invite SCWD to apply for the remainder of the approved funding. The remaining funds available to SCWD is approximately $53,270,000.
Staff submitted the loan application and the required $100,000 application fee to the EPA on July 15, 2022. The application review, loan structuring, and negotiation are expected to be completed in March 2023.
The projects contemplated for WIFIA funding are in various stages of California Environmental Quality Act (CEQA) compliance. For example, a draft Environmental Impact Report will not be issued for the GHWTP Facility Improvements Project until summer and complete compliance with CEQA is expected in January 2024. Thus, funds for the GHWTP FIP will not be drawn from the WIFIA loan until next year upon CEQA compliance. The other projects can draw funds from the WIFIA loan due to their current CEQA status.
The initial WIFIA loan is structured to reimburse SCWD after project expenditures are incurred.
Once reimbursed, SCWD will repay the principal amount over a 35-year period. The first 5 years will incur interest-only. The final maturity is 40 years after the loan is delivered. The interest rate is fixed for the 40-year period and is currently 3.9%. This interest rate, when compared to traditional tax-exempt bond rates (currently 4.2-4.7%), is very favorable. The WIFIA loan is repayable at any time without penalty; a tax-exempt bond is not typically repayable in the first 8- 10 years of the loan period.
Annual debt service on the new $127,730,000 loan is expected to total $4,875,000 each year for the first 5 years and $6,751,000 for each of the next 35 years. Debt service reserves and coverage requirements will be monitored in accordance with the LRFP and required debt covenants. Loan proceeds are provided on a reimbursement basis. Thus, the $127,730,000 loan is expected to be distributed over the next five years.
Costs of issuance will be paid from loan proceeds. Costs incurred by EPA’s underwriting group, SCWD’s loan counsel, and SCWD’s municipal advisor are not expected to exceed $275,000.
The initial $100,000 is part of the issuance costs and will be reimbursed to SCWD from loan proceeds. SCWD’s loan counsel is Jones Hall, a leading firm in tax-exempt finance. Jones Hall has recently assisted Monterey One and Soquel Creek Water District with their WIFIA loan structuring. SCWD’s municipal advisor is PFM, a nationally recognized advisor for municipal financings. Costs of issuance are not to exceed the following amounts:
• WIFIA Loan fee $180,000
• Jones Hall $75,000
26.2 • PFM $20,000
Total $275,000
FISCAL IMPACT: Adequate funds are available in Fund 711, Water Operations, and the annual debt service will be paid from net revenues generated by water sales.
Prepared By:
David Baum
Water Chief Financial Officer
Submitted By:
Rosemary Menard
Water Director
Approved By:
Matt Huffaker
City Manager
ATTACHMENTS:
1. RESOLUTION.DOCX
2. CITY OF SANTA CRUZ - WIFIA LOAN AGREEMENT.DOCX
3. CITY OF SANTA CRUZ - WIFIA TERM SHEET.DOCX
26.3 RESOLUTION NO. NS-XX,XXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CRUZ,
CALIFORNIA, AUTHORIZING THE EXECUTION AND DELIVERY OF A WIFIA LOAN
AGREEMENT WITH THE UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
AND A RELATED TERM SHEET, AND AUTHORIZING THE ISSUANCE OF A WIFIA
BOND, FOR THE PURPOSE OF PROVIDING FINANCING FOR WATER SYSTEM
IMPROVEMENTS, AND APPROVING RELATED DOCUMENTS AND ACTIONS WHEREAS, in order to provide additional water supply, the City of Santa Cruz (the "City") is undertaking improvements to the Graham Hill Water Treatment Plant, the Newell Creek Pipeline, the replacement of University Tank #4, Aquifer Storage and Recovery improvements, as well as planning/design activities associated with the Water Supply Augmentation program, all of which will build resistance against natural hazards, provide long-term water supply reliability and improve water quality (as more particularly defined in the hereinafter defined WIFIA Loan Agreement, the "Project"); and
WHEREAS, in order to provide funds to finance a portion of the Project, the City has requested the United States Environmental Protection Agency, an agency of the United States of America, acting by and through the Administrator of the Environmental Protection Agency (the "EPA"), to make a loan in a principal amount not to exceed $127,730,000 (the "WIFIA Loan") to the City pursuant to a WIFIA Loan Agreement (designated as WIFIA – Loan #1, the "WIFIA Loan Agreement") between the City and the EPA, and pursuant to the Water Infrastructure Finance and Innovation Act; and
WHEREAS, in order to evidence its obligations under the WIFIA Loan Agreement, the City has proposed to issue a bond as provided in the WIFIA Loan Agreement (the “WIFIA Bond”); and
WHEREAS, the material terms and provisions of the financing are set forth in a Term Sheet which has been provided to the City by the EPA (the “Term Sheet”), and the EPA has requested the City to acknowledge and agree to the Term Sheet; and WHEREAS, the payments of principal of and interest on the WIFIA Bond will be secured by a pledge of and lien on the Pledged Collateral (as such term is defined in the WIFIA Loan Agreement), consisting primarily of the net revenues of the Water System, on a parity with pledge and lien which secures the following outstanding obligations of the City:
(a) City of Santa Cruz 2014 Water Revenue Refunding Bonds issued by the City in the aggregate original principal amount of $11,260,000 under an Indenture of Trust dated as of July 1, 2014, between the City and MUFG Union Bank, N.A., as trustee,
26.4 RESOLUTION NO. NS-XX,XXX
2 (b) Installment Sale Agreement, dated as of August 1, 2016, between the City and the California Infrastructure and Economic Development Bank, Agreement No.
ISRF 17-115,
(c) City of Santa Cruz 2019 Water Revenue Bonds (Green Bonds) issued by the City in the aggregate original principal amount of $20,925,000 under an Indenture of Trust dated as of December 1, 2019, between the City and MUFG Union Bank, N.A., as trustee,
(d) Construction Installment Sale Agreement State Revolving Fund Loan (Project No. 4410010-001C), between the City and the California State Water Resources Control Board, and
(e) Construction Installment Sale Agreement State Revolving Fund Loan (Project No. 44100100-002C), the City and the California State Water Resources Control Board; and
WHEREAS, the City Council wishes at this time to authorize the execution, delivery and issuance of the WIFIA Loan Agreement and the Term Sheet and the issuance of the WIFIA Bond, and to approve related documents and actions in order to provide funding for the Project; and WHEREAS, the City is a charter city of the State of California, and is authorized under its municipal affairs powers and under the general laws of the State of California to enter into and perform its obligations under the WIFIA Loan Agreement, the Term Sheet and the WIFIA Bond; and
WHEREAS, as required by Government Code Section 5852.1 enacted January 1, 2018 by Senate Bill 450, attached hereto as Exhibit A is the information relating to the WIFIA Bond that has been obtained by the City Council and is hereby disclosed and made public; and WHEREAS, the City Council has previously approved a debt policy which complies with Government Code Section 8855, and the execution, delivery and issuance of the WIFIA Loan Agreement, the Term Sheet and the WIFIA Bond will be in compliance with said policy; and WHEREAS, the City Council of the City has duly considered such transactions and wishes at this time to approve said transactions in the public interests of the City; NOW, THEREFORE, the City Council of the City of Santa Cruz does hereby resolve, find, determine and order as follows:
Section 1: Findings And Determinations. The City Council hereby finds and determines that the foregoing recitals of this Resolution are true and correct in all respects.
Section 2: Execution, Delivery and Issuance of WIFIA Loan Agreement and Term Sheet. The City Council hereby authorizes the execution and delivery of the WIFIA Loan Agreement and the Term Sheet for the purpose of providing funds to finance a portion of the
26.5 RESOLUTION NO. NS-XX,XXX
3 Project. The WIFIA Loan Agreement and the Term Sheet are hereby approved in substantially the respective forms on file with the City Clerk Administrator together with any changes therein or additions thereto deemed advisable by the City Manager, the Water Department Director or the Water Department Chief Finance Officer (each, an “Authorized Officer”), provided that the execution thereof by an Authorized Officer shall be conclusive evidence of the approval of any such changes or additions. An Authorized Officer is hereby authorized and directed to execute, and the City Clerk Administrator is hereby authorized and directed to attest to, the final form of the WIFIA Loan Agreement and the Term Sheet in the name and on behalf of the City.
Section 3: Issuance of WIFIA Bond. The City Council hereby authorizes the issuance of the WIFIA Bond, in substantially the form attached to the WIFIA Loan Agreement. An Authorized Officer is hereby authorized and directed to execute, and the City Clerk Administrator is hereby authorized and directed to attest, the WIFIA Bond in the name and on behalf of the City. The executed WIFIA Bond shall be delivered to the EPA concurrently with the execution and delivery of the WIFIA Loan Agreement.
Section 4: Official Actions. The Mayor, the City Manager, the Water Department Director, the Water Department Chief Finance Officer, the Deputy Director/Engineering Manager, the City Clerk Administrator and any and all other officers of the City are hereby authorized and directed, for and in the name and on behalf of the City, to do any and all things and take any and all actions, including execution and delivery of any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance and other documents, which they, or any of them, may deem necessary or advisable in order to consummate the transactions described herein. Any such actions previously taken by such officers are hereby ratified and confirmed.
Whenever in this Resolution any officer of the City is authorized to execute or countersign any document or take any action, such execution, countersigning or action may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf if such officer is absent or unavailable.
Section 5: Effective Date. This Resolution shall take effect immediately upon its passage and adoption.
PASSED AND ADOPTED this 28th day of March, 2023 by the following vote:
AYES:
NOES:
ABSENT:
DISQUALIFIED:
APPROVED: ______________________________
Fred Keeley, Mayor
ATTEST: _________________________________
26.6 RESOLUTION NO. NS-XX,XXX
4 Bonnie Bush, City Clerk Administrator
26.7 A-1
RESOLUTION NO. NS-XX,XXX
Exhibit A
REQUIRED DISCLOSURES PURSUANT TO
GOVERNMENT CODE SECTION 5852.1
1. True Interest Cost of the WIFIA Bond (Estimated): 3.90%.
2. Finance charge of the WIFIA Bond, being the sum of all fees and charges paid to third parties, in the amount of approximately $275,000.
3. Proceeds of the WIFIA Bond expected to be received by the City, net of proceeds for Costs of Issuance in (2) above to paid, capitalized interest and reserves (if any) from the principal amount of the WIFIA Bond (Estimated):
$127,455,000.
4. Total debt service payments to be paid on the WIFIA Bond to final maturity (Estimated): $258,916,363.
*All amounts and percentages are estimates, and are made in good faith by the City based on information available as of the date of adoption of this Resolution.
Estimates include certain assumptions regarding the final terms and provisions of the WIFIA Bond.
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EPA/HDW Draft 3.[__].23
WIFIA CUSIP Number: [___]
UNITED STATES
ENVIRONMENTAL PROTECTION AGENCY
WIFIA LOAN AGREEMENT
For Up to $127,730,0001
With
CITY OF SANTA CRUZ
For the
SANTA CRUZ WATER PROGRAM PROJECT (PHASE 1)
(WIFIA ID – N[__________])
Dated as of [__________], 2023
1 This amount does not include capitalized interest.
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TABLE OF CONTENTS
Page
Section 1. Definitions..........................................................................................................................................2 Section 2. Interpretation ....................................................................................................................................16 Section 3. WIFIA Loan Amount .......................................................................................................................17 Section 4. Disbursement Conditions .................................................................................................................17 Section 5. Term .................................................................................................................................................18 Section 6. Interest Rate......................................................................................................................................18 Section 7. Security and Priority; Flow of Funds. ..............................................................................................18 Section 8. Repayments ......................................................................................................................................19 Section 9. Prepayment.......................................................................................................................................20 Section 10. Fees and Expenses............................................................................................................................21 Section 11. Conditions Precedent........................................................................................................................23 Section 12. Representations and Warranties of Borrower ..................................................................................26 Section 13. Representations and Warranties of WIFIA Lender..........................................................................31 Section 14. Affirmative Covenants .....................................................................................................................31 Section 15. Negative Covenants..........................................................................................................................37 Section 16. Reporting Requirements...................................................................................................................39 Section 17. Events of Default and Remedies ......................................................................................................39 Section 18. Disclaimer of Warranty....................................................................................................................42 Section 19. No Personal Recourse ......................................................................................................................42 Section 20. No Third-Party Rights......................................................................................................................42 Section 21. Borrower’s Authorized Representative............................................................................................42 Section 22. WIFIA Lender’s Authorized Representative ...................................................................................42 Section 23. Servicer.............................................................................................................................................43 Section 24. Amendments, Waivers .....................................................................................................................43 Section 25. Governing Law.................................................................................................................................43 Section 26. Severability.......................................................................................................................................43 Section 27. Successors and Assigns....................................................................................................................43 Section 28. Remedies Not Exclusive ..................................................................................................................43 Section 29. Delay or Omission Not Waiver........................................................................................................43 Section 30. Counterparts .....................................................................................................................................44 Section 31. Notices..............................................................................................................................................44 Section 32. Indemnification ................................................................................................................................45 Section 33. Sale of WIFIA Loan.........................................................................................................................46 Section 34. Effectiveness ....................................................................................................................................46 Section 35. Release of Lien.................................................................................................................................46 Section 36. Survival ............................................................................................................................................46 Section 37. Integration ........................................................................................................................................46 Schedules Exhibits
SCHEDULE I – WIFIA Loan Specific Terms EXHIBIT A – Form of WIFIA Bond SCHEDULE II – Project Details EXHIBIT B – Form of Closing Certificate SCHEDULE III – Borrower Disclosures EXHIBIT C – Form of Public Benefits Report SCHEDULE IV – Requisition Procedures EXHIBIT D – Form of Requisition SCHEDULE V – Reporting Requirements
SCHEDULE VI – WIFIA Loan Amortization Schedule
EXHIBIT E – Form of Certification of Eligible Project Costs Documentation
EXHIBIT F – Form of Construction Monitoring Report
EXHIBIT G – Form of Certificate of Substantial Completion EXHIBIT H-1 – Opinions Required from General Counsel
EXHIBIT H-2 – Opinions Required from Bond Counsel
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WIFIA LOAN AGREEMENT
THIS WIFIA LOAN AGREEMENT (this “Agreement”), dated as of the Effective Date, is by and between the Borrower (as defined herein) and the UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, an agency of the United States of America (“EPA”), acting by and through the Administrator of the Environmental Protection Agency (the “Administrator”), with an address at 1200 Pennsylvania Avenue NW, Washington, DC 20460 (the “WIFIA Lender”).
RECITALS:
WHEREAS, the Congress of the United States of America enacted the Water Infrastructure Finance and Innovation Act (“WIFIA”), § 5021 et seq. of Public Law 113-121 (as amended, and as may be further amended from time to time, the “Act”), which is codified as 33 U.S.C. §§ 3901- 3915;
WHEREAS, the Act authorizes the WIFIA Lender to enter into agreements to provide financial assistance with one or more eligible entities to make secured loans with appropriate security features to finance a portion of the eligible costs of projects eligible for assistance; WHEREAS, the Borrower has requested that the WIFIA Lender make the WIFIA Loan (as defined herein) in a principal amount not to exceed the Maximum Principal Amount (as defined herein) to be used to pay a portion of the Eligible Project Costs (as defined herein) pursuant to the Application (as defined herein);
WHEREAS, pursuant to the WIFIA Term Sheet (as defined herein), the Administrator has approved WIFIA financial assistance for the Project (as defined herein) to be provided in the form of the WIFIA Loan, subject to the terms and conditions contained herein; WHEREAS, based on the Application and the representations, warranties and covenants set forth herein, the WIFIA Lender proposes to make funding available to the Borrower for a portion of the costs of the Project through the issuance of the WIFIA Bond (as defined herein), upon the terms and conditions set forth herein;
WHEREAS, the Borrower agrees to repay any amount due pursuant to this Agreement and the WIFIA Bond in accordance with the terms and provisions hereof and of the WIFIA Bond; and WHEREAS, the WIFIA Lender has entered into this Agreement in reliance upon, among other things, the information and representations of the Borrower set forth in the Application and the supporting information provided by the Borrower.
NOW, THEREFORE, the premises being as stated above, and for good and valuable consideration, the receipt and sufficiency of which are acknowledged to be adequate, and intending to be legally bound hereby, it is hereby mutually agreed by and between the Borrower and the WIFIA Lender as follows:
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ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1. Definitions. Capitalized terms used in this Agreement shall have the meanings set forth below in this Section 1 or as otherwise defined in this Agreement, except as otherwise expressly provided herein. Any term used in this Agreement that is defined by reference to any other agreement shall continue to have the meaning specified in such agreement, whether or not such agreement remains in effect.
“Act” has the meaning provided in the recitals hereto.
“Additional Bonds Test” has the meaning ascribed to such term in Part D of Schedule I (WIFIA Loan Specific Terms).
“Additional Construction Contract” means, with respect to the Project, each Construction Contract entered into after the Effective Date. “Additional Obligations” means Additional Parity Obligations and Additional Subordinated Obligations.
“Additional Parity Obligations” means any Parity Obligations permitted under Section 15(a) (Indebtedness), which Parity Obligations are issued or incurred after the Effective Date. “Additional Subordinated Obligations” means any Subordinated Obligations permitted under Section 15(a) (Indebtedness), which Subordinated Obligations are issued or incurred after the Effective Date.
“Administrator” has the meaning provided in the preamble hereto. “Agreement” has the meaning provided in the preamble hereto. “Application” means the Borrower’s application for WIFIA financial assistance received by the WIFIA Lender on the Application Receipt Date.
“Application Receipt Date” has the meaning ascribed to such term in Part A of Schedule I (WIFIA Loan Specific Terms).
“Bankruptcy Related Event” means, with respect to the Borrower, (a) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any of its debts, or of a substantial part of the assets thereof, under any Insolvency Laws, or (ii) the appointment of a receiver, trustee, liquidator, custodian, sequestrator, conservator or similar official for the Borrower or for a substantial part of the assets thereof and, in any case referred to in the foregoing subclauses (i) and (ii), such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered; (b) the Borrower shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator, custodian, sequestrator, conservator or similar official therefor or for a substantial part of the assets thereof, (ii) generally not be paying its debts as they become due unless such debts are the subject of a bona fide dispute, or become
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unable to pay its debts generally as they become due, (iii) fail to make a payment of WIFIA Debt Service in accordance with the provisions of Section 8 (Repayments) and such failure is not cured within thirty (30) days following notification by the WIFIA Lender of failure to make such payment, (iv) make a general assignment for the benefit of creditors, (v) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition with respect to it described in clause (a) of this definition, (vi) commence a voluntary proceeding under any Insolvency Law, or file a voluntary petition seeking liquidation, reorganization, an arrangement with creditors or an order for relief, in each case under any Insolvency Law, (vii) file an answer admitting the material allegations of a petition filed against it in any proceeding referred to in the foregoing subclauses (i) through (v), inclusive, of this clause (b), or (viii) take any action for the purpose of effecting any of the foregoing, including seeking approval or legislative enactment by any Governmental Authority to authorize commencement of a voluntary proceeding under any Insolvency Law; (c) (i) any Person shall commence a process pursuant to which all or a substantial part of the Pledged Collateral may be sold or otherwise disposed of in a public or private sale or disposition pursuant to a foreclosure of the Liens thereon securing the Parity Obligations, or (ii) any Person shall commence a process pursuant to which all or a substantial part of the Pledged Collateral may be sold or otherwise disposed of pursuant to a sale or disposition of such Pledged Collateral in lieu of foreclosure; or (d) any receiver, trustee, liquidator, custodian, sequestrator, conservator or similar official shall transfer, pursuant to directions issued by the holders of the Obligations, funds on deposit in any of the Water System Accounts upon the occurrence and during the continuation of an Event of Default under this Agreement or an event of default under any Parity Obligation Document for application to the prepayment or repayment of any principal amount of the Parity Obligations other than in accordance with the provisions of this Agreement. “Base Case Financial Model” means the financial model or plan, prepared by the Borrower and delivered to the WIFIA Lender as part of the Application, forecasting the capital costs of the Water System (including the Project) and the estimated debt service coverage, rates, revenues, operating expenses and major maintenance requirements of the Water System (as may be applicable) for the Forecast Period and based upon assumptions and methodology provided by the Borrower and acceptable to the WIFIA Lender as of the Effective Date, which model or plan shall have been provided to the WIFIA Lender as a fully functional Microsoft Excel-based financial model or such other format agreed with the WIFIA Lender. “Bond Law” has the meaning ascribed to such term in Part E of Schedule I (WIFIA Loan Specific Terms).
“Borrower” has the meaning ascribed to such term in Part A of Schedule I (WIFIA Loan Specific Terms).
“Borrower Fiscal Year” means (a) as of the Effective Date, the Initial Borrower Fiscal Year or (b) such other fiscal year as the Borrower may hereafter adopt after giving thirty (30) days’ prior written notice to the WIFIA Lender in accordance with Part E of Schedule V (Reporting Requirements).
“Borrower Resolution” has the meaning ascribed to such term in Part E of Schedule I (WIFIA Loan Specific Terms).
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“Borrower’s Authorized Representative” means any Person who shall be designated as such pursuant to Section 21 (Borrower’s Authorized Representative). “Business Day” means any day other than a Saturday, a Sunday or a day on which offices of the Federal Government or the State are authorized to be closed or on which commercial banks are authorized or required by law, regulation or executive order to be closed in New York, New York or the Project Location.
“Capitalized Interest Period” has, if applicable, the meaning ascribed to such term in Part C of Schedule I (WIFIA Loan Specific Terms), or if designated as “Not Applicable” in Schedule I, means capitalized interest shall not be applicable with respect to the WIFIA Loan hereunder.
“City Charter” means the Charter of the City of Santa Cruz as in effect on the Effective Date and including all amendments thereto which have been duly approved by the voters of the City.
“Closing Certificate” has the meaning provided in Section 11(a) (Conditions Precedent to Effectiveness).
“Construction Contract” means, with respect to the Project, any prime contract entered into by the Borrower that involves any construction activity (such as demolition, site preparation, civil works construction, installation, remediation, refurbishment, rehabilitation, or removal and replacement services) for the Project. For the avoidance of doubt, “Construction Contract” shall include each Existing Construction Contract and, upon the effectiveness thereof, each Additional Construction Contract.
“Construction Monitoring Report” means a report on the status of the Project, substantially in the form of Exhibit F (Form of Construction Monitoring Report), unless otherwise agreed to be in a different form by the WIFIA Lender.2
“Construction Period” means the period from the Effective Date through (and including) the end of the Federal Fiscal Year during which the Substantial Completion Date occurs. “Construction Period Servicing Fee” has the meaning ascribed to such term in Part F of Schedule I (WIFIA Loan Specific Terms).
“Construction Schedule” means (a) the initial schedule or schedules on which the construction timetables for the Project are set forth, attached hereto as Part B of Schedule II (Project Details), and (b) any updates thereto included in the Construction Monitoring Report most recently submitted to the WIFIA Lender in accordance with Part C of Schedule V (Reporting Requirements).
2 Note to Borrower: The WIFIA Program has flexibility to accept the form of existing quarterly reports that the Borrower is already preparing, instead of the form in Exhibit F, so long as such other format provides sufficient reporting information required by the WIFIA Program.
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“CPI” means the Consumer Price Index for All Urban Consumers (CPI-U) for the U.S.
City Average for All Items, 1982-84=100 (not seasonally adjusted) or its successor, published by the Bureau of Labor Statistics and located at https://www.bls.gov/news.release/cpi.t01.htm. “Debt Service Payment Commencement Date” means the earlier to occur of (a) the first Payment Date immediately following the later of (i) the first Disbursement or (ii) if there is a Capitalized Interest Period, the end of the Capitalized Interest Period, in each case as set forth in the WIFIA Loan Amortization Schedule; or (b) the Payment Date falling closest to, but not later than, the fifth anniversary of the Substantial Completion Date. “Default” means any event or condition that, with the giving of any notice, the passage of time, or both, would be an Event of Default.
“Default Rate” has the meaning ascribed to such term in Part C of Schedule I (WIFIA Loan Specific Terms).
“Development Default” means (a) the Borrower abandons work or fails, in the reasonable judgment of the WIFIA Lender, to diligently prosecute the work related to the Project or (b) the Borrower fails to achieve Substantial Completion of the Project by the Development Default Date, unless such failure to achieve Substantial Completion shall occur by reason of an Uncontrollable Force that is not due to the fault or gross negligence of the Borrower (and which the Borrower could not reasonably have avoided or mitigated), in which case the Development Default Date shall be extended by the number of days equal to the duration of such Uncontrollable Force. “Development Default Date” has the meaning ascribed to such term in Part B of Schedule I (WIFIA Loan Specific Terms).
“Disbursement” means a disbursement of WIFIA Loan proceeds, subject to and in accordance with this Agreement.
“Dollars” and “$” means the lawful currency of the U.S. “Effective Date” means the date of this Agreement, as specified in Part A of Schedule I (WIFIA Loan Specific Terms).
“Eligible Project Costs” means amounts in the Project Budget approved by the WIFIA Lender, which are paid by or for the account of the Borrower in connection with the Project (including, as applicable, Project expenditures incurred prior to the receipt of WIFIA credit assistance), which shall arise from the following:
(a) development-phase activities, including planning, feasibility analysis (including any related analysis necessary to carry out an eligible project), revenue forecasting, environmental review, permitting, preliminary engineering and design work and other preconstruction activities;
(b) construction, reconstruction, rehabilitation, and replacement activities;
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(c) the acquisition of real property or an interest in real property (including water rights, land relating to the Project and improvements to land), environmental mitigation (including acquisitions pursuant to 33 U.S.C. §3905(8)), construction contingencies, and acquisition of equipment; or
(d) capitalized interest (with respect to Obligations other than the WIFIA Loan) necessary to meet market requirements, reasonably required reserve funds, capital issuance expenses, and other carrying costs during construction; provided, that Eligible Project Costs must be consistent with all other applicable federal law, including the Act.
“Eligible Project Costs Documentation” means all supporting documentation with respect to the Eligible Project Costs, including copies of invoices and records evidencing incurred or previously paid Eligible Project Costs, which documentation should contain sufficient detail satisfactory to the WIFIA Lender (e.g. if the Borrower intends to utilize WIFIA Loan proceeds to make construction progress payments for Eligible Project Costs, the documentation should demonstrate that such progress payments are commensurate with the cost of the work that has been completed).
“EMMA” means the Electronic Municipal Market Access system as described in 1934 Act Release No. 59062 and maintained by the Municipal Securities Rulemaking Board established pursuant to Section 15B(b)1 of the Securities Exchange Act of 1934, as amended, and its successors.
“EPA” has the meaning provided in the preamble hereto.
“Event of Default” has the meaning provided in Section 17(a) (Events of Default and Remedies).
“Event of Loss” means any event or series of events that causes any portion of the Water System to be damaged, destroyed or rendered unfit for normal use for any reason whatsoever, including through a casualty, a failure of title, or any loss of such property through eminent domain. “Existing Construction Contract” means each Construction Contract of the Borrower in effect as of the Effective Date as set forth in Part C of Schedule II (Project Details). “Existing Indebtedness” means indebtedness of the Borrower that has been issued or incurred prior to the Effective Date, as listed and described in Part A of Schedule III (Borrower Disclosures).
“Federal Fiscal Year” means the fiscal year of the Federal Government, which is the twelve (12) month period that ends on September 30 of the specified calendar year and begins on October 1 of the preceding calendar year.
“Federal Government” means the U.S. and its departments and agencies. “FEIN” means a Federal Employer Identification Number.
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“Final Disbursement Date” means the earliest of (a) the date on which the WIFIA Loan has been disbursed in full; (b) the last anticipated date of disbursement set forth in the then-current WIFIA Loan Disbursement Schedule; (c) the date as of which the Borrower has certified to the WIFIA Lender that it will not request any further disbursements under the WIFIA Loan; (d) the date on which the WIFIA Lender terminates its obligations relating to disbursements of any undisbursed amounts of the WIFIA Loan in accordance with Section 17 (Events of Default and Remedies); and (e) the date that is one (1) year after the Substantial Completion Date. “Final Maturity Date” has the meaning ascribed to such term in Part C of Schedule I (WIFIA Loan Specific Terms).
“Financial Statements” has the meaning provided in Section 12(q) (Financial Statements). “Flow of Funds” has the meaning ascribed to such term in Part D of Schedule I (WIFIA Loan Specific Terms).
“Forecast Period” means, as of any date, the time period from and including the thencurrent Borrower Fiscal Year until the later ending date of either (a) the five (5) immediately succeeding Borrower Fiscal Years or (b) the end of the Borrower Fiscal Year in which the Borrower’s then-currently effective capital improvement plan for the Water System concludes. “GAAP” means generally accepted accounting principles for U.S. state and local governments, as established by the Government Accounting Standards Board (or any successor entity with responsibility for establishing accounting rules for governmental entities), in effect from time to time in the U.S.
“Governmental Approvals” means all authorizations, consents, approvals, waivers, exceptions, variances, filings, registrations, permits, orders, licenses, exemptions and declarations of or with any Governmental Authority.
“Governmental Authority” means any federal, state, provincial, county, city, town, village, municipal or other government or governmental department, commission, council, court, board, bureau, agency, authority or instrumentality (whether executive, legislative, judicial, administrative or regulatory), of or within the U.S. or its territories or possessions, including the State and its counties and municipalities, and their respective courts, agencies, instrumentalities and regulatory bodies, or any entity that acts “on behalf of” any of the foregoing, whether as an agency or authority of such body.
“Gross Revenues” has the meaning ascribed to such term in Part A of Schedule I (WIFIA Loan Specific Terms).
“Indemnitee” has the meaning provided in Section 32 (Indemnification). “Initial Borrower Fiscal Year” has the meaning ascribed to such term in Part A of Schedule I (WIFIA Loan Specific Terms).
“Initial Construction Period Servicing Fee” has the meaning ascribed to such term in Part F of Schedule I (WIFIA Loan Specific Terms).
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“Insolvency Laws” means the U.S. Bankruptcy Code, 11 U.S.C. § 101 et seq., as from time to time amended and in effect, and any state bankruptcy, insolvency, receivership, conservatorship or similar law now or hereafter in effect. “Interest Only Period” has, if applicable, the meaning ascribed to such term in Part C of Schedule I (WIFIA Loan Specific Terms), or if designated as “Not Applicable” in Schedule I, means no interest only period shall be applicable with respect to the WIFIA Loan hereunder. “Interest Payment Date” has the meaning ascribed to such term in Part C of Schedule I (WIFIA Loan Specific Terms).
“Interim Financing” means interim bond anticipation notes, commercial paper or other short-term temporary financing, in each case with a maturity not later than five (5) years following the issuance or incurrence thereof, the proceeds of which are applied to pay Eligible Project Costs. “Investment Grade Rating” means a rating of ‘BBB-’, ‘Baa3’, ‘bbb-’, or ‘BBB (low)’, or higher, from a Nationally Recognized Rating Agency.
“Legal Entity” has the meaning ascribed to such term in Part A of Schedule I (WIFIA Loan Specific Terms).
“Lien” means any mortgage, pledge, hypothecation, assignment, mandatory deposit arrangement, encumbrance, attachment, lien (statutory or other), charge or other security interest, or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever, including any sale-leaseback arrangement, any conditional sale or other title retention agreement, any financing lease having substantially the same effect as any of the foregoing, and the filing of any financing statement or similar instrument under the UCC or any other applicable law.
“Loss Proceeds” means any proceeds of builders’ risk or casualty insurance (other than any proceeds from any policy of business interruption insurance insuring against loss of revenues upon the occurrence of certain casualties or events covered by such policy of insurance) or proceeds of eminent domain proceedings resulting from any Event of Loss. “Material Adverse Effect” means a material adverse effect on (a) the Water System, the Project or the Gross Revenues, (b) the business, operations, properties, condition (financial or otherwise) or prospects of the Borrower, (c) the legality, validity or enforceability of any material provision of any Parity Obligation Document or WIFIA Loan Document, (d) the ability of the Borrower to enter into, perform or comply with any of its material obligations under any Parity Obligation Document or WIFIA Loan Document, (e) the validity, enforceability or priority of the Liens provided under the WIFIA Loan Documents on the Pledged Collateral or (f) the WIFIA Lender’s rights or remedies available under any WIFIA Loan Document. “Maximum Principal Amount” has the meaning ascribed to such term in Part C of Schedule I (WIFIA Loan Specific Terms).
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“Nationally Recognized Rating Agency” means any nationally recognized statistical rating organization registered with, and identified as such by, the Securities and Exchange Commission.
“NEPA” means the National Environmental Policy Act of 1969, as amended, and any successor statute of similar import, and regulations thereunder, in each case as in effect from time to time.
“NEPA Determination” has the meaning ascribed to such term in Part B of Schedule I (WIFIA Loan Specific Terms).
“Net Revenues” means, for any Borrower Fiscal Year, the Gross Revenues for such Borrower Fiscal Year, less Operation and Maintenance Costs for such Borrower Fiscal Year. “Obligations” means debt of the Borrower that is secured by a pledge and lien on all or a portion of the Gross Revenues, including the Parity Obligations and Subordinated Obligations. “Operating Period Servicing Fee” has the meaning ascribed to such term in Part F of Schedule I (WIFIA Loan Specific Terms).
“Operation and Maintenance Costs” has the meaning ascribed to such term in Part A of Schedule I (WIFIA Loan Specific Terms).
“Organizational Documents” means: (a) the constitutional and statutory provisions that are the basis for the existence and authority of the Borrower, including any enabling statutes, ordinances or public charters and any other organic laws establishing the Borrower and (b) the resolutions, bylaws, City Charter or other organizational documents (including any amendments, modifications or supplements thereto) of or adopted by the Borrower by which the Borrower, its powers, operations or procedures or its securities, bonds, notes or other obligations are governed or from which such powers are derived.
“Other Financing Documents” means any agreement, instrument, or document (excluding the WIFIA Loan Documents) entered into between the Borrower and a holder of Obligations providing for the issuance of Obligations or otherwise governing any terms or conditions relating to Obligations.
“Outstanding” means (a) with respect to Obligations other than the WIFIA Loan, Obligations that have not been cancelled or legally defeased or discharged within the meaning of the applicable Parity Obligation Documents or Subordinated Obligation Documents, and (b) with respect to the WIFIA Loan, the (i) entire amount available to be drawn under this Agreement (including amounts drawn and amounts that remain available to be drawn) plus, if applicable, capitalized interest added or projected to be added to the principal in accordance with this Agreement, less (ii) any amount that has been irrevocably determined will not be drawn under this Agreement (including, if applicable, any projected capitalized interest with respect to such undrawn amount), less (iii) the aggregate principal amount of the WIFIA Loan Balance that has been repaid or prepaid.
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“Parity Obligation Documents” means, collectively, (a) the 2019 Bond Indenture, (b) the 2014 Bond Indenture, (c) the 2016 Installment Sale Agreement, (d) the 2020 SRF Construction Installment Sale Agreements, (e) this Agreement and (f) all other leases, installment sale agreements, trust agreements, indentures of trust and other documents prescribing the terms and provisions applicable to any issue of Parity Obligations. “Parity Obligations” means any borrowing or indebtedness of the Borrower permitted under Section 15(a) (Indebtedness) that ranks pari passu in right of payment and right of security with the WIFIA Loan. The WIFIA Loan (as evidenced by the WIFIA Bond and this Agreement) is a Parity Obligation entitled to all of the benefits of a Parity Obligation under this Agreement and all other Parity Obligation Documents.
“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as amended, and all regulations promulgated thereunder.
“Payment Date” means each Interest Payment Date and each Principal Payment Date. “Payment Default” has the meaning provided in Section 17(a)(i) (Payment Default). “Permitted Debt” means:
(a) Existing Indebtedness;
(b) the WIFIA Loan;
(c) Additional Parity Obligations that satisfy the requirements of Section 15(a) (Indebtedness);
(d) Additional Subordinated Obligations that satisfy the requirements of Section 15(a) (Indebtedness); and
(e) indebtedness incurred in respect of hedging transactions permitted under the WIFIA Loan Documents.
“Permitted Investments” means any investment permitted under applicable State law and the Borrower’s investment policies.
“Permitted Liens” means:
(a) Liens imposed pursuant to the WIFIA Loan Documents; (b) Liens imposed in respect of Permitted Debt;
(c) Liens imposed by law, including Liens for taxes that are not yet due or are being contested in compliance with Section 14(j) (Material Obligations); (d) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing
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obligations that are not overdue by more than thirty (30) days or are being contested in compliance with Section 14(j) (Material Obligations);
(e) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance, and other social security laws or regulations;
(f) deposits to secure the performance of trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business; (g) judgment Liens in respect of judgments that do not constitute an Event of Default under Section 17(a)(viii) (Material Adverse Judgment); and (h) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that, in any case, do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Borrower. “Person” means and includes an individual, a general or limited partnership, a joint venture, a corporation, a limited liability company, a trust, an unincorporated organization and any Governmental Authority, including in each case such Person’s successors and permitted assigns. “Pledged Collateral” has the meaning ascribed to such term in Part D of Schedule I (WIFIA Loan Specific Terms).
“Principal Payment Date” has the meaning ascribed to such term in Part C of Schedule I (WIFIA Loan Specific Terms).
“Project” has the meaning ascribed to such term in Part B of Schedule I (WIFIA Loan Specific Terms).
“Project Budget” means the budget for the Project attached to this Agreement as Part A of Schedule II (Project Details) showing a summary of Total Project Costs with a breakdown of all Eligible Project Costs and the estimated sources and uses of funds for the Project. “Project Location” has the meaning ascribed to such term in Part B of Schedule I (WIFIA Loan Specific Terms).
“Projected Substantial Completion Date” has the meaning ascribed to such term in Part B of Schedule I (WIFIA Loan Specific Terms).
“Public Benefits Report” means the report, in the form attached hereto as Exhibit C (Form of Public Benefits Report).
“Rate Covenant” has the meaning ascribed to such term in Part D of Schedule I (WIFIA Loan Specific Terms).
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“Rate Stabilization Fund” has the meaning ascribed to such term in Part D of Schedule I (WIFIA Loan Specific Terms).
“Related Documents” means the WIFIA Loan Documents, all other Parity Obligation Documents and the Other Financing Documents.
“Requisition” means the request for Disbursement in the form attached hereto as Exhibit D (Form of Requisition).
“SAM” means the federal System for Award Management (www.SAM.gov) (or any successor system or registry).
“Sanctions Laws” means collectively, any applicable anti-drug trafficking, anti-terrorism, anti-money laundering, anti-bribery, or anti-corruption laws or regulations, as applicable, including those contained in the Bank Secrecy Act of 1970 (as amended) and the U.S. Patriot Act. “Servicer” means such entity or entities as the WIFIA Lender shall designate from time to time to perform, or assist the WIFIA Lender in performing, certain duties hereunder. “Servicing Fee” means the Servicing Set-Up Fee and any Construction Period Servicing Fee or Operating Period Servicing Fee.
“Servicing Set-Up Fee” has the meaning ascribed to such term in Part F of Schedule I (WIFIA Loan Specific Terms).
“State” has the meaning ascribed to such term in Part A of Schedule I (WIFIA Loan Specific Terms).
“State Water Board” means the State Water Resources Control Board. “Subordinated Obligation Document” means, collectively, (a) the 2021 Credit Agreement, and (b) all other credit agreements, leases, installment sale agreements, trust agreements, indentures of trust and other documents prescribing the terms and provisions applicable to any issue of Subordinated Obligations.
“Subordinated Obligations” means any Obligation that is fully subordinated to the WIFIA Loan and the WIFIA Bond in priority of payment (as to both principal and interest), voting and priority of security interest in the Pledged Collateral, including with respect to payment from revenues and reserves and payment upon default or acceleration of any such Obligations. “Substantial Completion” means, with respect to the Project, the stage at which the Project is able to perform the functions for which the Project is designed. “Substantial Completion Date” means the date on which the Borrower certifies to the WIFIA Lender, with evidence satisfactory to the WIFIA Lender and notice to the WIFIA Lender in accordance with Part E of Schedule V (Reporting Requirements), that Substantial Completion has occurred.
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“Technical and Rate Consultant” means a single individual or firm, or a combination of one or more individuals or firms, not related to the Borrower and considered independent with respect to the Borrower (i.e. not an employee of the Borrower or any affiliate of the Borrower) authorized to do business in and qualified to practice in the areas required to provide the services required of the Technical and Rate Consultant, that together have expertise in the technical requirements for operation and maintenance of systems similar in size and scope to the Water System and delivering the services provided by the Water System, and establishing rates and charges for governmental water or wastewater systems similar in size and scope to the Water System, selected by the Borrower and reasonably acceptable to the WIFIA Lender. “Total Project Costs” means (a) the costs paid or incurred or to be paid or incurred by the Borrower in connection with or incidental to the acquisition, design, construction and equipping of the Project, including legal, administrative, engineering, planning, design, insurance and financing (including costs of issuance); (b) amounts, if any, required by the WIFIA Loan Documents or any other Parity Obligation Document to be paid into any fund or account upon the incurrence of the WIFIA Loan or any other Obligations, in each case in respect of the Project; (c) payments when due (whether at the maturity of principal, the due date of interest, or upon optional or mandatory prepayment) in respect of any indebtedness of the Borrower (other than the WIFIA Loan), in each case in connection with the acquisition, design, construction and equipping of the Project; and (d) costs of equipment and supplies and initial working capital and reserves required by the Borrower for the commencement of operation of the Project, including general administrative expenses and overhead of the Borrower.
“Trustee” has, if applicable, the meaning ascribed to such term in Part A of Schedule I (WIFIA Loan Specific Terms), or if designated as “Not Applicable” in Schedule I, means a trustee shall not be applicable with respect to the WIFIA Loan hereunder. “Trustee Location” has, if applicable, the meaning ascribed to such term in Part A of Schedule I (WIFIA Loan Specific Terms), or if designated as “Not Applicable” in Schedule I, means a trustee location shall not be applicable with respect to the WIFIA Loan hereunder. “2014 Bond Indenture” means that certain Indenture of Trust, dated as of July 1, 2014, between the Borrower and MUFG Union Bank, N.A., as trustee, under which the 2014 Bonds have been issued.
“2014 Bonds” means the City of Santa Cruz 2014 Water Revenue Bonds issued by the Borrower in the aggregate original principal amount of $11,260,000 under the 2014 Bond Indenture.
“2016 Installment Sale Agreement” means that certain Installment Sale Agreement, dated as of August 1, 2016, by and between the Borrower and the California Infrastructure and Economic Development Bank, Agreement No. ISRF 17-115, as originally executed and delivered and together with all duly authorized and executed amendments and supplements thereto. “2019 Bond Indenture” means that certain Indenture of Trust, dated as of December 1, 2019, between the Borrower and MUFG Union Bank, N.A., as trustee, under which the 2019 Bonds have been issued.
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“2019 Bonds” means the City of Santa Cruz 2019 Water Revenue Bonds (Green Bonds) issued by the Borrower in the aggregate original principal amount of $20,925,000 under the 2019 Bond Indenture.
“2020 SRF Construction Installment Sale Agreements” means, collectively (i) that certain Construction Installment Sale Agreement State Revolving Fund Loan (Project No. 4410010-001C), by and between the Borrower and the California State Water Resources Control Board, as originally executed and delivered and together with all duly authorized and executed amendments and supplements thereto, and (ii) that certain Construction Installment Sale Agreement State Revolving Fund Loan (Project No. 44100100-002C), by and between the Borrower and the California State Water Resources Control Board, as originally executed and delivered and together with all duly authorized and executed amendments and supplements thereto. “2021 Credit Agreement” means that certain Credit Agreement, dated June 15, 2021, between the Borrower and Bank of America, N.A., as originally executed and delivered and together with all duly authorized and executed amendments and supplements thereto. “UEI Number” means, with respect to any Person, a number issued by the Federal Government (including through SAM.gov) as the unique entity identifier for such Person. “Uncontrollable Force” means any cause beyond the control of the Borrower, including:
(a) a hurricane, tornado, flood or similar occurrence, landslide, earthquake, fire or other casualty, strike or labor disturbance, freight embargo, act of a public enemy, explosion, war, blockade, terrorist act, insurrection, riot, general arrest or restraint of government and people, civil disturbance or similar occurrence, sabotage, pandemic, or act of God (provided, that the Borrower shall not be required to settle any strike or labor disturbance in which it may be involved) or (b) the order or judgment of any federal, state or local court, administrative agency or governmental officer or body, if it is not also the result of willful or negligent action or a lack of reasonable diligence of the Borrower and the Borrower does not control the administrative agency or governmental officer or body; provided, that the diligent contest in good faith of any such order or judgment shall not constitute or be construed as a willful or negligent action or a lack of reasonable diligence of the Borrower.
“Uniform Commercial Code” or “UCC” means the Uniform Commercial Code, as in effect from time to time in the State.
“Updated Financial Model/Plan” means (a) an updated Base Case Financial Model or (b) a financial plan in a format agreed with the WIFIA Lender, in each case reflecting the then-current and projected conditions for the Forecast Period, in accordance with Part A of Schedule V (Reporting Requirements).
“U.S.” means the United States of America.
“Water Fund” has the meaning ascribed to such term in Part D of Schedule I (WIFIA Loan Specific Terms).
“Water System” has the meaning ascribed to such term in Part A of Schedule I (WIFIA Loan Specific Terms).
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“Water System Accounts” has the meaning ascribed to such term in Part D of Schedule I (WIFIA Loan Specific Terms).
“WIFIA” has the meaning provided in the recitals hereto. “WIFIA Bond” has, if applicable, the meaning ascribed to such term in Part E of Schedule I (WIFIA Loan Specific Terms), or if designated as “Not Applicable” in Schedule I, means a bond as evidence of the Borrower’s Obligation shall not be applicable with respect to the WIFIA Loan hereunder.
“WIFIA Bond Service Fund” has, if applicable, the meaning ascribed to such term in Part D of Schedule I (WIFIA Loan Specific Terms), or if designated as “Not Applicable” in Schedule I, means a separate debt service account designated for the WIFIA Lender shall not be applicable with respect to the WIFIA Loan hereunder.
“WIFIA CUSIP Number” has the meaning ascribed to such term in Part A of Schedule I (WIFIA Loan Specific Terms).
“WIFIA Debt Service” means with respect to any Payment Date occurring on or after the Debt Service Payment Commencement Date, the principal portion of the WIFIA Loan Balance and any interest payable thereon (including interest accruing after the date of any filing by the Borrower of any petition in bankruptcy or the commencement of any bankruptcy, insolvency or similar proceeding with respect to the Borrower), in each case, (a) as set forth on the WIFIA Loan Amortization Schedule and (b) due and payable on such Payment Date in accordance with the provisions of Section 8(a) (Payment of WIFIA Debt Service). “WIFIA Debt Service Reserve Account” has, if applicable, the meaning ascribed to such term in Part D of Schedule I (WIFIA Loan Specific Terms), or if designated as “Not Applicable” in Schedule I, means a separate debt service reserve account designated for the WIFIA Lender shall not be applicable with respect to the WIFIA Loan hereunder. “WIFIA Debt Service Reserve Requirement” has, if applicable, the meaning ascribed to such term in Part D of Schedule I (WIFIA Loan Specific Terms), or if designated as “Not Applicable” in Schedule I, means a separate debt service reserve requirement shall not be applicable with respect to the WIFIA Loan hereunder.
“WIFIA Interest Rate” has the meaning ascribed to such term in Part C of Schedule I (WIFIA Loan Specific Term).
“WIFIA Lender” has the meaning provided in the preamble hereto. “WIFIA Lender’s Authorized Representative” means the Administrator and any other Person who shall be designated as such pursuant to Section 22 (WIFIA Lender’s Authorized Representative).
“WIFIA Loan” means the secured loan made by the WIFIA Lender to the Borrower on the terms and conditions set forth herein, pursuant to the Act, in a principal amount not to exceed the Maximum Principal Amount, to be used in respect of Eligible Project Costs.
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“WIFIA Loan Amortization Schedule” means the loan amortization schedule reflected in Schedule VI (WIFIA Loan Amortization Schedule), as amended from time to time in accordance with Section 8(c) (Adjustments to WIFIA Loan Amortization Schedule). “WIFIA Loan Balance” means (a) the aggregate principal amount of the WIFIA Loan disbursed by the WIFIA Lender to the Borrower hereunder, plus (b) if applicable, capitalized interest added to the principal balance of the WIFIA Loan pursuant to Section 8(a)(iii) (Payments of WIFIA Debt Service), minus (c) the aggregate principal amount of the WIFIA Loan repaid or prepaid by the Borrower, as reflected from time to time in the WIFIA Loan Amortization Schedule in accordance with Section 8(c) (Adjustments to WIFIA Loan Amortization Schedule). “WIFIA Loan Disbursement Schedule” means the disbursement schedule set forth in Schedule VI (WIFIA Loan Amortization Schedule), reflecting the anticipated disbursement of proceeds of the WIFIA Loan, as such schedule may be amended from time to time pursuant to Section 4(b) (Disbursement Conditions).
“WIFIA Loan Documents” means this Agreement, the WIFIA Bond and the Borrower Resolution.
“WIFIA Term Sheet” has the meaning ascribed to such term in Part E of Schedule I (WIFIA Loan Specific Terms).
Section 2. Interpretation. The rules of interpretation set forth below in this Section 2 shall apply to this Agreement, except as otherwise expressly provided herein. (a) Unless the context shall otherwise require, the words “hereto,” “herein,” “hereof” and other words of similar import refer to this Agreement as a whole. (b) Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders and vice versa. (c) Words importing the singular number shall include the plural number and vice versa unless the context shall otherwise require.
(d) The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”
(e) Whenever the Borrower’s knowledge is implicated in this Agreement or the phrase “to the Borrower’s knowledge” or a similar phrase is used in this Agreement, the Borrower’s knowledge or such phrase(s) shall be interpreted to mean to the best of the Borrower’s knowledge after reasonable and diligent inquiry.
(f) Unless the context shall otherwise require, references to preambles, recitals, sections, subsections, clauses, schedules, exhibits, appendices and provisions are to the applicable preambles, recitals, sections, subsections, clauses, schedules, exhibits, appendices and provisions of this Agreement.
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(g) The recitals, schedules and exhibits to this Agreement, and the appendices and schedules to such exhibits, are hereby incorporated by reference and made an integral part of this Agreement.
(h) The headings or titles of this Agreement and its sections, schedules or exhibits, as well as any table of contents, are for convenience of reference only and shall not define or limit its provisions.
(i) Unless the context shall otherwise require, all references to any resolution, contract, agreement, lease or other document shall be deemed to include any amendments or supplements to, or modifications or restatements or replacements of, such documents that are approved from time to time in accordance with the terms thereof and hereof. (j) Every request, order, demand, application, appointment, notice, statement, certificate, consent or similar communication or action hereunder by any party shall, unless otherwise specifically provided, be delivered in writing in accordance with Section 31 (Notices) and signed by a duly authorized representative of such party. (k) References to “disbursements of WIFIA Loan proceeds” or similar phrasing shall be construed as meaning the same thing as “paying the purchase price of the WIFIA Bond.” (l) Whenever this Agreement requires a change in principal amount, interest rate or amortization schedule of the WIFIA Loan, it is intended that such change be reflected in the WIFIA Bond. Whenever there is a prepayment of the WIFIA Loan, it is intended that such prepayment be implemented through a prepayment of the WIFIA Bond.
(m) Whenever this Agreement sets forth a time period for a number of days by when a deliverable must be provided or an action must be taken, such time period shall be computed on the basis of a three hundred sixty (360) day year of twelve (12) thirty (30) day months.
ARTICLE II
THE WIFIA LOAN
Section 3. WIFIA Loan Amount. The principal amount of the WIFIA Loan shall not exceed the Maximum Principal Amount.
Section 4. Disbursement Conditions.
(a) WIFIA Loan proceeds shall be disbursed solely in respect of Eligible Project Costs paid or incurred and approved for payment by or on behalf of the Borrower in connection with the Project, including, for the avoidance of doubt, Eligible Project Costs that were initially funded with Interim Financing proceeds. Each Disbursement of the WIFIA Loan shall be made pursuant to the procedures of Schedule IV (Requisition Procedures) and subject to the requirements of this Section 4 and the conditions set forth in Section 11(b) (Conditions Precedent to Disbursements); provided, that no Disbursements shall be made after the Final Disbursement Date.
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(b) Subject to this Section 4, any scheduled Disbursement (as reflected in the WIFIA Loan Disbursement Schedule) that remains undrawn as of its scheduled date shall automatically be available for the next scheduled Disbursement date, up to the Final Disbursement Date, with the effect of automatically updating the WIFIA Loan Disbursement Schedule (and the WIFIA Loan Amortization Schedule) without need for the WIFIA Lender’s approval. The Borrower may also amend the WIFIA Loan Disbursement Schedule by submitting a revised version thereof to the WIFIA Lender no later than thirty (30) days prior to the proposed effective date of such amendment, together with a detailed explanation of the reasons for such revisions.
Such revised WIFIA Loan Disbursement Schedule shall become effective upon the WIFIA Lender’s approval thereof, which approval shall be deemed granted if the WIFIA Lender has not objected within thirty (30) days from receipt of the revised schedule, and which approval shall have the effect of updating the WIFIA Loan Amortization Schedule to reflect the updated WIFIA Loan Disbursement Schedule. Notwithstanding the foregoing, the date of the first Disbursement shall not be earlier than the initial date of Disbursement set out in the WIFIA Loan Amortization Schedule as of the Effective Date.
Section 5. Term. The term of the WIFIA Loan shall extend from the Effective Date to the Final Maturity Date or to such earlier date as all amounts due or to become due to the WIFIA Lender hereunder have been irrevocably paid in full in immediately available funds.
Section 6. Interest Rate. The Borrower shall pay interest on the WIFIA Loan Balance at the WIFIA Interest Rate; provided, that, upon the occurrence of an Event of Default, the Borrower shall pay interest on the WIFIA Loan Balance at the Default Rate, (a) in the case of any Payment Default, from (and including) its due date to (but excluding) the date of actual payment of the overdue amount of principal of the WIFIA Loan and accrued interest thereon and (b) in the case of any other Event of Default, from (and including) the date of such occurrence to (but excluding) the earlier of the date on which (i) such Event of Default has been cured (if applicable) in accordance with the terms of this Agreement or waived by the WIFIA Lender and (ii) the WIFIA Loan Balance has been irrevocably paid in full in immediately available funds. Interest shall (x) accrue on the WIFIA Loan commencing on the date of the first disbursement of the WIFIA Loan, (y) be payable commencing on the Debt Service Payment Commencement Date and (z) be computed on the WIFIA Loan Balance on the basis of a three hundred sixty (360) day year of twelve (12) thirty (30) day months.
Section 7. Security and Priority; Flow of Funds.
(a) As security for the WIFIA Loan, the Borrower hereby pledges, assigns and grants to the WIFIA Lender for its benefit, Liens on the Pledged Collateral to the extent and in the manner and priority set forth in the WIFIA Loan Documents. The Lien on the Pledged Collateral to secure the WIFIA Loan for the benefit of the WIFIA Lender is and shall be (i) on a parity in right of payment and right of security to the Lien on the Pledged Collateral in favor of the Parity Obligations and (ii) senior in right of payment and right of security to the Lien on the Pledged Collateral in favor of the Subordinated Obligations. As evidence of the Borrower’s obligation to repay the WIFIA Loan, the Borrower shall issue and deliver to the WIFIA Lender, as the registered owner, on or prior to the Effective Date, the WIFIA Bond. The WIFIA Loan (as evidenced by the WIFIA Bond and this Agreement) shall be a Parity Obligation, entitled to all of the benefits of a Parity Obligation under this Agreement and all other Parity Obligation Documents.
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(b) Amounts deposited in the Water Fund shall be applied in the order of priority described in, and in accordance with, the Flow of Funds.
Section 8. Repayments.
(a) Payment of WIFIA Debt Service.
(i) No WIFIA Debt Service shall be due or payable prior to the Debt Service Payment Commencement Date. The Borrower shall pay (A) WIFIA Debt Service in the amounts and manner and on the Payment Dates as set forth in the WIFIA Loan Amortization Schedule, as the same may be revised pursuant to Section 8(c) (Adjustments to WIFIA Loan Amortization Schedule) and (B) payments of any other amounts on each other date on which payment thereof is required to be made hereunder; provided, that, in either case if any such date is not a Business Day, payment shall be made on the next Business Day following such date. WIFIA Loan proceeds borrowed and repaid may not be reborrowed.
(ii) Notwithstanding anything herein to the contrary, the WIFIA Loan Balance and any accrued interest thereon shall be due and payable in full on the Final Maturity Date.
(iii) If a Capitalized Interest Period is applicable as set forth in Part C of Schedule I (WIFIA Loan Specific Terms), during the Capitalized Interest Period, no payment of principal or interest on the WIFIA Loan will be required to be made. On each Interest Payment Date occurring during the Capitalized Interest Period (including the day immediately following the end of the Capitalized Interest Period), interest accrued and not paid on the WIFIA Loan during each such six (6) month period shall be capitalized and added to the WIFIA Loan Balance, as set forth in the WIFIA Loan Amortization Schedule.
Within thirty (30) days after the end of the Capitalized Interest Period, the WIFIA Lender shall give written notice to the Borrower stating the WIFIA Loan Balance as of the close of business on the last day of the Capitalized Interest Period, which statement thereof shall be deemed conclusive absent manifest error; provided, however, that no failure to give or delay in giving such notice shall affect any of the obligations of the Borrower hereunder or under any of the other WIFIA Loan Documents. Notwithstanding the foregoing, the Capitalized Interest Period shall end immediately upon written notification to the Borrower by the WIFIA Lender that an Event of Default has occurred and that the WIFIA Lender is ending the Capitalized Interest Period, in which case interest shall no longer be capitalized, payments of interest shall be due and payable beginning on the next Interest Payment Date and payments of principal shall be due and payable beginning on the next Principal Payment Date, in each case in accordance with the terms hereof. (iv) If an Interest Only Period is applicable as set forth in Part C of Schedule I (WIFIA Loan Specific Terms), during the Interest Only Period, the WIFIA Debt Service payable by the Borrower shall consist of one hundred percent (100%) of the amount of interest then due and payable on the WIFIA Loan Balance, and no payment of principal on the WIFIA Loan will be due and payable during the Interest Only Period.
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(v) The WIFIA Loan shall not be subject to defeasance and no amounts in respect of the WIFIA Loan shall be considered or deemed to have been paid until the WIFIA Lender shall have received irrevocable payment in immediately available funds in accordance with the requirements for payment set forth in this Agreement. (b) Manner of Payment. Payments under this Agreement (and the WIFIA Bond, which payments shall not be duplicative) shall be made in Dollars and in immediately available funds (without counterclaim, offset or deduction) in accordance with the payment instructions provided by the WIFIA Lender prior to the relevant payment, as may be modified in writing from time to time by the WIFIA Lender; provided, that the failure to provide updated payment instructions shall not affect in any manner the Borrower’s obligations hereunder or under any other WIFIA Loan Document.
(c) Adjustments to WIFIA Loan Amortization Schedule. The WIFIA Lender may, from time to time, modify the WIFIA Loan Amortization Schedule included in Schedule VI (WIFIA Loan Amortization Schedule) to reflect (A) any change to the WIFIA Loan Balance, (B) any change to the date and amount of any principal or interest due and payable or to become due and payable by the Borrower hereunder in accordance with this Agreement, (C) any mathematical corrections as the WIFIA Lender may determine are necessary, and (D) with the consent of the Borrower (not to be unreasonably withheld), such other information as the WIFIA Lender may determine is necessary for administering the WIFIA Loan and this Agreement. Any calculations described above shall be rounded up to the nearest whole cent. Any adjustments or revisions to the WIFIA Loan Amortization Schedule as a result of a decrease in the WIFIA Loan Balance shall be applied to reduce future payments due on the WIFIA Loan in inverse order of maturity, other than prepayments which shall be applied in accordance with Section 9(b) (General Prepayment Instructions). If the WIFIA Loan Amortization Schedule is modified pursuant to this Section 8(c), the WIFIA Lender shall provide the Borrower with a copy of such revised WIFIA Loan Amortization Schedule, but no failure to provide or delay in providing the Borrower with such copy shall affect any of the obligations of the Borrower under this Agreement or the other WIFIA Loan Documents. The WIFIA Lender may also, from time to time or when so requested by the Borrower, advise the Borrower by written notice of the amount of the WIFIA Loan Balance as of the date of such notice. Absent manifest error, the WIFIA Lender’s determination of the WIFIA Loan Balance and all matters as set forth on the WIFIA Loan Amortization Schedule shall be deemed conclusive evidence thereof; provided, that neither the failure to make any such determination, modification, or recordation nor any error in such determination, modification, or recordation shall affect in any manner the Borrower’s obligations hereunder or under any other WIFIA Loan Document.
Section 9. Prepayment.
(a) Optional Prepayments. The Borrower may prepay the WIFIA Loan, without penalty or premium, (i) in full on any date on or after the Final Disbursement Date or (ii) in part on any Payment Date on or after the Final Disbursement Date (and, if in part, the amounts thereof to be prepaid shall be determined by the Borrower; provided, that such prepayment shall be in principal amounts of $1,000,000 or any integral multiple of $1.00 in excess thereof), in each case from time to time but not more than once annually in accordance with 33 U.S.C. § 3908(c)(4)(A). The Borrower may make such prepayment by paying to the WIFIA Lender such
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principal amount of the WIFIA Loan to be prepaid, together with the unpaid interest accrued on the amount of principal so prepaid to the date of such prepayment and all fees and expenses then due and payable to the WIFIA Lender. Each prepayment of the WIFIA Loan pursuant to this Section 9(a) shall be made on such date and in such principal amount as shall be specified by the Borrower in a written notice, signed by the Borrower’s Authorized Representative and delivered to the WIFIA Lender not less than thirty (30) days prior to the requested date of prepayment, unless otherwise agreed by the WIFIA Lender. At any time between delivery of such written notice and the applicable optional prepayment, the Borrower may, without penalty or premium, rescind its announced optional prepayment by further written notice to the WIFIA Lender. Anything in this Section 9(a) to the contrary notwithstanding, the failure by the Borrower to make any optional prepayment shall not constitute a breach or default under this Agreement. (b) General Prepayment Instructions. Upon the WIFIA Lender’s receipt of confirmation that payment in full in immediately available funds of the entire WIFIA Loan Balance and any unpaid interest, fees and expenses with respect thereto has occurred as a result of a prepayment, the WIFIA Lender shall surrender the WIFIA Bond to the Borrower or its authorized representative, by mail in accordance with Section 31 (Notices) or as otherwise agreed between the parties hereto. If the Borrower prepays only part of the unpaid balance of principal of the WIFIA Loan, the WIFIA Lender may make a notation on the WIFIA Loan Amortization Schedule indicating the amount of principal of and interest on the WIFIA Loan then being prepaid. Absent manifest error, the WIFIA Lender’s determination of such matters as set forth on an updated WIFIA Loan Amortization Schedule shall be conclusive evidence thereof; provided, that neither the failure to make any such recordation nor any error in such recordation shall affect in any manner the Borrower’s obligations hereunder or under any other WIFIA Loan Document. All partial prepayments of principal shall be applied to reduce the WIFIA Loan Balance such that the remaining scheduled principal payments for the WIFIA Loan set out in the WIFIA Loan Amortization Schedule are reduced substantially pro rata. If such funds have not been so paid on the prepayment date, such principal amount of the WIFIA Loan shall continue to bear interest until payment thereof at the rate provided for in Section 6 (Interest Rate). (c) [Reserved]
Section 10. Fees and Expenses.
(a) Fees. The Borrower shall pay to the WIFIA Lender:
(i) the Servicing Set-Up Fee, which shall be due and payable within thirty (30) days after receipt by the Borrower of an invoice from the WIFIA Lender with respect thereto (or, if earlier, the date of the first Disbursement of the WIFIA Loan); (ii) the Construction Period Servicing Fee, which shall accrue on the first Business Day of the then-current Federal Fiscal Year and shall be due and payable on or prior to each November 15 during the period beginning from the Effective Date through (and including) the end of the Federal Fiscal Year during which the Substantial Completion Date occurs; provided, that the Initial Construction Period Servicing Fee shall be due and payable within thirty (30) days after receipt by the Borrower of an invoice from the WIFIA
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Lender with respect thereto (or, if earlier, the date of the first Disbursement of the WIFIA Loan); and
(iii) the Operating Period Servicing Fee, which shall accrue on the first Business Day of the then-current Federal Fiscal Year and shall be due and payable on or prior to each November 15, beginning with the first November 15 following the end of the Federal Fiscal Year during which the Substantial Completion Date occurs, until (and including) the Final Maturity Date; provided, that the Operating Period Servicing Fee due and payable with respect to the Federal Fiscal Year during which the Final Maturity Date occurs shall be equal to the pro-rata monthly portion of the then applicable Operating Period Servicing Fee multiplied by the number of partial or whole months remaining between October 1 and the Final Maturity Date.
(b) The amount of each Construction Period Servicing Fee (other than the initial Construction Period Servicing Fee) and each Operating Period Servicing Fee shall be adjusted in proportion to the percentage change in CPI for the calendar year immediately preceding the calendar year during which such fee is due. The WIFIA Lender shall notify the Borrower of the amount of each such fee at least thirty (30) days before payment is due, which determination shall be conclusive absent manifest error.
(c) Expenses. The Borrower agrees, whether or not the transactions hereby contemplated shall be consummated, to reimburse the WIFIA Lender on demand from time to time, within thirty (30) days after receipt by the Borrower of any invoice from the WIFIA Lender, for any and all fees, costs, charges, and expenses incurred by it (including the fees, costs, and expenses of its legal counsel, financial advisors, auditors and other consultants and advisors) in connection with the negotiation, preparation, execution, delivery, and performance of this Agreement and the other WIFIA Loan Documents and the transactions hereby and thereby contemplated, including attorneys’, and engineers’ fees and professional costs, including all such fees, costs, and expenses incurred as a result of or in connection with: (i) the enforcement of or attempt to enforce, or the monitoring, protection or preservation of any right or claim under, the Liens on the Pledged Collateral or any provision of this Agreement or any of the other WIFIA Loan Documents or the rights of the WIFIA Lender thereunder; (ii) any amendment, modification, re-execution, waiver, or consent with respect to this Agreement or any other WIFIA Loan Document; and (iii) any workout, restructuring, or similar arrangement of the obligations of the Borrower under this Agreement or the other WIFIA Loan Documents, including during the pendency of any Event of Default. (d) The obligations of the Borrower under this Section 10 shall survive the payment or prepayment in full or transfer of the WIFIA Bond, the enforcement of any provision of this Agreement or the other WIFIA Loan Documents, any such amendments, waivers or consents, any Event of Default, and any such workout, restructuring, or similar arrangement.
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ARTICLE III
CONDITIONS PRECEDENT
Section 11. Conditions Precedent.
(a) Conditions Precedent to Effectiveness. Notwithstanding anything in this Agreement to the contrary, this Agreement shall not become effective until each of the following conditions precedent has been satisfied or waived in writing by the WIFIA Lender in its sole discretion:
(i) The Borrower shall have duly executed and delivered to the WIFIA Lender this Agreement, the WIFIA Bond and the Borrower Resolution, each in form and substance satisfactory to the WIFIA Lender.
(ii) The Borrower shall have delivered to the WIFIA Lender complete and fully executed copies of (A) the Parity Obligation Documents and (B) any Related Document with respect to which all or a portion of the proceeds are or will be applied to fund all or any portion of Total Project Costs, in each case that has been entered into on or prior to the Effective Date, along with a certification in the Closing Certificate that each such document is complete, fully executed and in full force and effect, that all conditions contained in the Related Documents that are necessary to the closing of the WIFIA transaction contemplated hereby (if any) have been fulfilled and that the Borrower Resolution has been duly adopted by the City Council of the Borrower and is in full force and effect.
(iii) The Borrower shall have delivered to the WIFIA Lender fully executed copies of each Existing Construction Contract, together with any amendments, waivers or modifications thereto.
(iv) Counsel to the Borrower shall have rendered to the WIFIA Lender legal opinions satisfactory to the WIFIA Lender in its sole discretion (including those opinions set forth on Exhibit H-1 (Opinions Required from Counsel to Borrower)) and bond counsel to the Borrower shall have rendered to the WIFIA Lender legal opinions satisfactory to the WIFIA Lender in its sole discretion (including those opinions set forth on Exhibit H-2 (Opinions Required from Bond Counsel)).
(v) The Borrower shall have delivered to the WIFIA Lender a certificate, signed by the Borrower’s Authorized Representative, substantially in the form attached hereto as Exhibit B (Form of Closing Certificate) (the “Closing Certificate”), designating the Borrower’s Authorized Representative, confirming such person’s position and incumbency, and certifying as to the satisfaction of the certain conditions precedent (and, if requested by the WIFIA Lender, has provided evidence satisfactory to the WIFIA Lender of such satisfaction), including the following:
(A) as of the Effective Date, (1) the Maximum Principal Amount of the WIFIA Loan, together with the amount of any other credit assistance provided under the Act to the Borrower, does not exceed forty-nine percent
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(49%) of reasonably anticipated Eligible Project Costs; (2) the aggregate amount of Eligible Project Costs previously incurred prior to the Effective Date does not exceed fifty-one percent (51%) of Eligible Project Costs; and (3) the total federal assistance provided to the Project, including the Maximum Principal Amount of the WIFIA Loan, does not exceed eighty percent (80%) of Total Project Costs;
(B) the Borrower is in compliance with NEPA and any
applicable federal, state or local environmental review and approval requirements with respect to the Project;
(C) the Borrower has (1) obtained a FEIN (as evidenced by the delivery of a copy of the Borrower’s W-9), (2) obtained a UEI Number, and (3) registered with SAM, and obtained confirmation of active SAM registration status;
(D) the Borrower has obtained the WIFIA CUSIP Number;
(E) the representations and warranties of the Borrower set forth in this Agreement and in each other WIFIA Loan Document to which the Borrower is a party are true and correct on and as of the date hereof, except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties were true and correct as of such earlier date;
(F) no Material Adverse Effect, or any event or condition that could reasonably be expected to have a Material Adverse Effect, has occurred or arisen since the date of the Application; and (G) the conditions precedent to the incurrence of the WIFIA Loan in accordance with all Parity Obligation Documents have been satisfied, and the Borrower has provided the WIFIA Lender with a certificate setting forth the calculations required by the Parity Obligation Documents for the incurrence of the WIFIA Loan as a Parity Obligation and evidencing compliance therewith.
(vi) The Borrower shall have provided evidence to the WIFIA Lender’s satisfaction, prior to the Effective Date, of the assignment by at least one (1) Nationally Recognized Rating Agency of a public Investment Grade Rating on the WIFIA Loan, along with a certification in the Closing Certificate that no such rating has been reduced, withdrawn or suspended as of the Effective Date.
(vii) The Borrower shall have delivered to the WIFIA Lender the Public Benefits Report.
(viii) The Borrower shall have paid in full all invoices delivered by the WIFIA Lender to the Borrower as of the Effective Date for any applicable Servicing Fees
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and the fees and expenses of the WIFIA Lender’s counsel and financial advisors and any auditors or other consultants retained by the WIFIA Lender for the purposes hereof. (b) Conditions Precedent to Disbursements. Notwithstanding anything in this Agreement to the contrary, the WIFIA Lender shall have no obligation to make any Disbursement of the WIFIA Loan to the Borrower (including the initial Disbursement hereunder) until each of the following conditions precedent has been satisfied or waived in writing by the WIFIA Lender in its sole discretion:
(i) The Borrower shall have delivered to the WIFIA Lender a Requisition that complies with the provisions of Section 4 (Disbursement Conditions), Schedule IV (Requisition Procedures) and Exhibit D (Form of Requisition), including satisfactory Eligible Project Costs Documentation relating to such Requisition. The Borrower’s Authorized Representative shall also certify in such Requisition that:
(A) at the time of, and immediately after giving effect to, any Disbursement of WIFIA Loan proceeds then currently requested, (1) no Default or Event of Default and no event of default under any other Related Document has occurred and is continuing and (2) no event that, with the giving of notice or the passage of time or both, would constitute an event of default under any other Related Document, has occurred and is continuing; (B) no Material Adverse Effect, or any event or condition that could reasonably be expected to result in a Material Adverse Effect, has occurred since the Effective Date;
(C) the aggregate amount of all Disbursements (including the requested Disbursement amount but excluding any interest that is capitalized in accordance with the terms hereof) does not exceed (1) the Maximum Principal Amount of the WIFIA Loan or (2) the amount of Eligible Project Costs paid or incurred by the Borrower; (D) the Eligible Project Costs for which reimbursement or payment is being requested has not been reimbursed or paid by any previous disbursement of (1) WIFIA Loan proceeds or (2) any other source of funding for the Project (other than any Interim Financing or cash of the Borrower) as identified in the Project Budget;
(E) (1) the Borrower, and each of its contractors and
subcontractors at all tiers with respect to the Project, has complied with all applicable laws, rules, regulations and requirements, including 40 U.S.C. §§3141-3144, 3146, and 3147 (relating to Davis-Bacon Act requirements) (and regulations relating thereto) and 33 U.S.C. §3914 (relating to American iron and steel products); and (2) supporting documentation, such as certified payroll records and certifications for all iron and steel products used for the Project, are being maintained and are available for review upon request by the WIFIA Lender;
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(F) the representations and warranties of the Borrower set forth in this Agreement and in each other WIFIA Loan Document are true and correct as of each date on which any disbursement of the WIFIA Loan is made, except to the extent such representations and warranties expressly relate to an earlier date (in which case, such representations and warranties are true and correct as of such earlier date);
(G) the Borrower represents that it has delivered all required deliverables under and in compliance with the requirements of Schedule V (Reporting Requirements), except as has been otherwise agreed by the WIFIA Lender; and
(H) the amount being requested for Disbursement is with respect to Eligible Project Costs for which all or a portion of the Eligible Project Costs Documentation was previously submitted to and approved by the WIFIA Lender in accordance with Schedule IV (Requisition Procedures) and Schedule V (Reporting Requirements) of the WIFIA Loan Agreement, and/or the Borrower has set out in the Requisition (or attached separately to the Requisition) a summary of any Eligible Project Costs that have not otherwise been previously submitted to the WIFIA Lender for approval, together with supporting Eligible Project Costs Documentation. (ii) If applicable, to the extent necessary to make the representations and warranties in Section 12(f) (Litigation) and 12(j)(iii) (Compliance with Laws) true, correct and complete as of the date of the applicable Disbursement, the Borrower shall have delivered an updated Schedule III (Borrower Disclosures). (iii) The Borrower shall have paid in full (A) any outstanding Servicing Fees due and payable under Section 10 (Fees and Expenses) and (B) all invoices delivered by the WIFIA Lender to the Borrower, for the fees and expenses of the WIFIA Lender’s counsel and financial advisors and any auditors or other consultants retained by the WIFIA Lender for the purposes hereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 12. Representations and Warranties of Borrower. The Borrower hereby represents and warrants that, as of the Effective Date and, as to each of the representations and warranties below other than those contained in Section 12(b) (Officers’ Authorization) and the first sentence of Section 12(m) (Construction Contracts), as of each date on which any Disbursement of the WIFIA Loan is requested or made:
(a) Organization; Power and Authority. The Borrower is a Legal Entity duly organized and validly existing under its Organizational Documents and the laws of the State, has full legal right, power and authority to do business in the State and to enter into the WIFIA Loan Documents then in existence, to execute and deliver this Agreement and issue the WIFIA Bond, and to carry out and consummate all transactions contemplated hereby and thereby and has duly
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authorized the execution, delivery and performance of this Agreement, the WIFIA Bond and the other WIFIA Loan Documents. Other than such Organizational Documents and the Borrower Resolution, there are no additional instruments or documents necessary for the Borrower to execute and deliver, or to perform its obligations under, the WIFIA Loan Documents to which it is a party and to consummate and implement the transactions contemplated by the WIFIA Loan Documents.
(b) Officers’ Authorization. As of the Effective Date, the officers of the Borrower executing (or that previously executed) the WIFIA Loan Documents, and any certifications or instruments related thereto, to which the Borrower is a party are (or were at the time of such execution) duly and properly in office and fully authorized to execute the same. (c) Due Execution; Enforceability. Each of the WIFIA Loan Documents in effect as of any date on which this representation and warranty is made, and to which the Borrower is a party, has been duly authorized, executed and delivered by the Borrower and constitutes the legal, valid and binding agreement of the Borrower enforceable against the Borrower in accordance with its terms, except as such enforceability (i) may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and (ii) is subject to general principles of equity (regardless of whether enforceability is considered in equity or at law).
(d) Non-Contravention. The execution and delivery of the WIFIA Loan Documents to which the Borrower is a party, the consummation of the transactions contemplated by the WIFIA Loan Documents, and the fulfillment of or compliance with the terms and conditions of all of the WIFIA Loan Documents, do not and will not (i) conflict with the Borrower’s Organizational Documents, (ii) conflict in any material respect with, or constitute a violation, breach or default (whether immediately or after notice or the passage of time or both) by the Borrower of or under, any applicable law, administrative rule or regulation, any applicable court or administrative decree or order, or any indenture, mortgage, deed of trust, loan agreement, lease, contract or other agreement or instrument to which the Borrower is a party or by which it or its properties or assets are otherwise subject or bound, or (iii) result in the creation or imposition of any Lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the Borrower, other than Permitted Liens.
(e) Consents and Approvals. All Governmental Approvals required as of the Effective Date and required as of any subsequent date on which this representation is made (or deemed made) for the undertaking, construction and completion by the Borrower of the Project and the operation and maintenance of the Water System, and to execute and deliver and perform its obligations under the WIFIA Loan Documents and the Construction Contracts, have been obtained or effected and are in full force and effect. The Borrower is not in default with respect to any Governmental Approval, which default could reasonably be expected to result in a Material Adverse Effect. No consent or approval of any trustee, holder of any indebtedness of the Borrower or any other Person is necessary in connection with the execution, delivery, and performance by the Borrower of the WIFIA Loan Documents and the consummation of any transaction contemplated thereunder, except as have been obtained or made and as are in full force and effect.
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(f) Litigation. Except as set forth in Part B of Schedule III (Borrower Disclosures), there is no action, suit, proceeding or, to the knowledge of the Borrower, any inquiry or investigation, in any case before or by any court or other Governmental Authority pending or, to the knowledge of the Borrower, threatened against or affecting the Water System, the Project or the ability of the Borrower to execute, deliver and perform its obligations under the WIFIA Loan Documents or that in any case could reasonably be expected to result in a Material Adverse Effect.
(g) Security Interests. (i) Pursuant to Section 9109(d)(17) of the California Commercial Code and Section 5451 of the California Government Code, the WIFIA Loan Documents and the Bond Law establish, and (ii) the Borrower has taken all necessary action to pledge, assign, and grant, in each case for the benefit of the WIFIA Lender, legal, valid, binding and enforceable Liens on the Pledged Collateral purported to be created, pledged, assigned, and granted pursuant to and in accordance with the WIFIA Loan Documents, irrespective of whether any Person has notice of the pledge and without the need for any physical delivery, recordation, filing, or further act, and if applicable, the security interests created in the Pledged Collateral have been duly perfected under applicable State law. Such Liens are in full force and effect and are not subordinate or junior to any other Liens in respect of the Pledged Collateral except for the Liens arising by operation of law, and not pari passu with any Liens other than the Liens on the Pledged Collateral in favor of the Parity Obligations. The Borrower is not in breach of any covenant set forth in Section 14(b) (Securing Liens) or in any Parity Obligation Document with respect to the matters described in Section 14(b) (Securing Liens). As of the Effective Date and as of each other date this representation and warranty is made, (A) all documents and instruments have been recorded or filed for record in such manner and in such places as are required and all other action as is necessary or desirable has been taken to establish a legal, valid, binding, and enforceable and, if applicable, perfected, Lien on the Pledged Collateral in favor of the WIFIA Lender to the extent contemplated by the WIFIA Loan Documents, and (B) all taxes and filing fees that are due and payable in connection with the execution, delivery or recordation of any WIFIA Loan Document or any instruments, certificates or financing statements in connection with the foregoing, have been paid. Neither the attachment, validity, enforceability, priority or, if applicable, perfection, of the security interest in the Pledged Collateral granted pursuant to the WIFIA Loan Documents is governed by Article 9 of the UCC.
(h) No Debarment. The Borrower has fully complied with its verification obligations under 2 C.F.R. §180.320 and confirms, based on such verification, that, to its knowledge, neither the Borrower nor any of its principals (as defined in 2 C.F.R. §180.995 and supplemented by 2 C.F.R §1532.995) (i) is debarred, suspended or voluntarily excluded from participation in Government contracts, procurement or non-procurement matters, (ii) is presently indicted for or otherwise criminally or civilly charged by a Governmental Authority with commission of any of the offenses listed in 2 C.F.R. §180 or 2 C.F.R. §1532; and (iii) have, within the three (3) year period preceding the Effective Date, (x) been convicted for or had a civil judgment rendered against the Borrower for any of the offenses within such period or (y) had any public transactions (federal, state or local) terminated for cause or default. (i) No Lobbying. Pursuant to 31 U.S.C. §1352, to the best of the Borrower’s knowledge and belief, (A) no Federal appropriated funds have been paid or will be paid, by or on behalf of the Borrower, to any Person for influencing or attempting to influence an officer or
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employee of an agency, a member (or employee of a member), officer, or employee of the U.S.
Congress, in connection with the making of the WIFIA Loan, execution (including amendments or modifications) of the WIFIA Loan Documents, or any other federal action under 31 U.S.C. §1352(a)(2); and (B) if any funds other than Federal appropriated funds have been paid or will be paid to any Person for influencing or attempting to influence an officer or employee of any agency, a member (or employee of a member), officer, or employee of the U.S. Congress in connection with the WIFIA Loan, the Borrower has completed and submitted to the WIFIA Lender Standard Form-LLL, “Disclosure Form to Report Lobbying,” in accordance with its instructions. (j) Compliance with Laws.
(i) The Borrower, and to the best of its knowledge, each of its contractors and subcontractors at all tiers with respect to the Project, has complied with all applicable laws, rules, regulations and requirements, including 40 U.S.C. §§3141-3144, 3146, and 3147 (relating to Davis-Bacon Act requirements) (and regulations relating thereto), 33 U.S.C. §3914 (relating to American iron and steel products), 2 C.F.R. §180.320 and 2 C.F.R. §1532 (relating to non-debarment), 31 U.S.C. §1352 and 49 C.F.R. §20.100 (relating to non-lobbying), and any applicable Sanctions Laws. (ii) To ensure such compliance, the Borrower has included in all contracts with respect to the Project (A) the contract clauses relating to applicable federal requirements (such as Davis-Bacon and Equal Employment Opportunity) and (B) requirements that its contractors (1) shall comply with all applicable laws, rules, regulations, and requirements set forth in this Section 12(j) and follow applicable federal guidance and (2) incorporate in all subcontracts (and cause all subcontractors to include in lower tier subcontracts) such terms and conditions as are required to be incorporated therein by any applicable laws, rules, regulations and requirements set forth in this Section 12(j). (iii) Except as set forth in Part C of Schedule III (Borrower Disclosures), the Borrower is in compliance with all laws applicable to the Water System (including the Project) relating to environmental, health or safety matters. (k) Credit Ratings. The WIFIA Loan has received a public Investment Grade Rating from at least one (1) Nationally Recognized Rating Agency, written evidence of such rating has been provided to the WIFIA Lender prior to the Effective Date, and such rating has not been reduced, withdrawn or suspended as of the Effective Date. (l) No Defaults. No Default or Event of Default, and no default or event of default by the Borrower under any other Related Document, has occurred and is continuing. (m) Construction Contracts. Part C of Schedule II (Project Details) sets forth a list of the Existing Construction Contracts as of the Effective Date. With respect to each Construction Contract executed as of any date on which this representation and warranty is made, such Construction Contract is in full force and effect. (n) Information. The information furnished by, or on behalf of, the Borrower to the WIFIA Lender, when taken as a whole, is true and correct in all material respects (other than for projections and other forward-looking statements contained in the Base Case Financial Model
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and any Updated Financial Model/Plan which have been made in good faith and based on reasonable assumptions) and does not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading as of the date made or furnished. (o) Insurance. The Borrower is in compliance with all insurance obligations required under each Construction Contract and the WIFIA Loan Documents (including Section 14(f) (Insurance) hereof) as of the date on which this representation and warranty is made. To the extent the Borrower self-insures, the Borrower’s self-insurance program is actuarially sound. (p) No Prohibited Liens. Except for Permitted Liens, the Borrower has not created, and is not under any obligation to create, and has not entered into any transaction or agreement that would result in the imposition of, any Lien on the Pledged Collateral, the Water System, the Project, the Gross Revenues, or the Borrower’s respective rights in any of the foregoing.
(q) Financial Statements. Each income statement, balance sheet and statement of operations and cash flows (collectively, “Financial Statements”) delivered to the WIFIA Lender pursuant to Part B of Schedule V (Reporting Requirements) has been prepared in accordance with GAAP and presents fairly, in all material respects, the financial condition (including any liabilities or obligations that are required to be disclosed in accordance with GAAP) of the Borrower as of the respective dates of the balance sheets included therein and the results of operations of the Borrower for the respective periods covered by the statements of income included therein.
(r) Securities Laws. Under existing law, the WIFIA Bond may be issued and sold without registration under the Securities Act of 1933, as amended, and any State blue sky laws.
(s) No Delinquent Taxes or Federal Debt. The Borrower has paid all applicable taxes and other material taxes and assessments payable by it that have become due (other than those taxes or assessments that it is contesting in good faith and by appropriate proceedings, for which adequate reserves have been established to the extent required by GAAP). The Borrower has no delinquent federal debt (including tax liabilities but excluding any delinquencies that have been resolved with the appropriate federal agency in accordance with the standards of the Debt Collection Improvement Act of 1996).
(t) Sufficient Funds. The amount of the WIFIA Loan, when combined with all other funds committed for the development and construction of the Project as set forth under the various sources of funds in the Project Budget, will be sufficient to carry out the Project, pay all Total Project Costs anticipated for the development and construction of the Project and achieve Substantial Completion by the Projected Substantial Completion Date. The total federal assistance provided to the Project, including the maximum principal amount of the WIFIA Loan (excluding any interest that is capitalized in accordance with the terms hereof), does not exceed eighty percent (80%) of Total Project Costs. The Updated Financial Model/Plan most recently delivered to the WIFIA Lender pursuant to Part A of Schedule V (Reporting Requirements) demonstrates that the projected Gross Revenues are sufficient to meet the WIFIA Loan Amortization Schedule. The
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Borrower has developed, and identified adequate revenues to implement, a plan for operating, maintaining, and repairing the Project over the useful life of the Project. (u) Sovereign Immunity. The Borrower either has no immunity from the jurisdiction of any court of competent jurisdiction or from any legal process therein which could be asserted in any action to enforce the obligations of the Borrower under any of the WIFIA Loan Documents to which it is a party or the transactions contemplated hereby or thereby, including the obligations of the Borrower hereunder and thereunder, or, to the extent that the Borrower has such immunity, the Borrower has waived such immunity pursuant to Section 14(m) (Immunity). (v) Accuracy of Representations and Warranties. The representations, warranties and certifications of the Borrower set forth in this Agreement and the other WIFIA Loan Documents are true, correct, and complete, except to the extent such representations and warranties expressly relate to an earlier date (in which case, such representations and warranties shall be true, correct, and complete as of such earlier date).
Section 13. Representations and Warranties of WIFIA Lender. The WIFIA Lender represents and warrants that:
(a) Power and Authority. The WIFIA Lender has all requisite power and authority to make the WIFIA Loan and to perform all transactions contemplated by the WIFIA Loan Documents to which it is a party.
(b) Due Execution; Enforceability. The WIFIA Loan Documents to which it is a party have been duly authorized, executed and delivered by the WIFIA Lender, and are legally valid and binding agreements of the WIFIA Lender, enforceable against the WIFIA Lender in accordance with their terms.
(c) Officers’ Authorization. The officers of the WIFIA Lender executing each of the WIFIA Loan Documents to which the WIFIA Lender is a party are duly and properly in office and fully authorized to execute the same on behalf of the WIFIA Lender.
ARTICLE V
COVENANTS
Section 14. Affirmative Covenants. The Borrower covenants and agrees as follows until the date the WIFIA Bond and all of the obligations of the Borrower under this Agreement (other than contingent indemnity obligations) are irrevocably paid in full in immediately available funds and the WIFIA Lender no longer has any commitment to make Disbursements to the Borrower, unless the WIFIA Lender waives compliance in writing:
(a) Rate Covenant.
(i) The Borrower shall comply with all requirements and conditions specified in the Rate Covenant.
(ii) If:
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(A) the forecast furnished by the Borrower in the most recent Updated Financial Model/Plan delivered by the Borrower pursuant to Part A of Schedule V (Reporting Requirements) demonstrates that projected Net Revenues may be inadequate to satisfy the Rate Covenant for any Borrower Fiscal Year during the Forecast Period, the Borrower shall propose a remedial course of action, which plan shall demonstrate to the WIFIA Lender’s satisfaction that such plan will generate an equivalent or greater increase to the Net Revenues so as to satisfy the Rate Covenant; and/or (B) the Borrower fails to satisfy the Rate Covenant for the most recently ended Borrower Fiscal Year, the Borrower shall (x) within thirty (30) days after request by the WIFIA Lender, engage the Technical and Rate Consultant to review and analyze the operations of the Water System and recommend actions regarding revising the rates or changing the methods of operations, or any other actions to increase the Net Revenues so as to satisfy the Rate Covenant, (y) cause the Technical and Rate Consultant to issue its report, including any such recommended actions, no later than ninety (90) days following such engagement, and (z) either, within sixty (60) days following the issuance of the Technical and Rate Consultant’s report, (1) implement the Technical and Rate Consultant’s recommendations or (2) undertake an alternative course of action after demonstrating to the WIFIA Lender’s satisfaction that an alternative plan will generate an equivalent or greater increase to the Net Revenues so as to satisfy the Rate Covenant. (iii) Upon consideration of a voter initiative to reduce Gross Revenues, the Borrower must make a finding regarding the effect of such a reduction on the Borrower’s ability to satisfy the Rate Covenant set forth in this Section. The Borrower must make its findings available to the public and must request, if necessary, the authorization of the Borrower’s decision-maker or decision-making body to file litigation to challenge any such initiative that it finds will render it unable to satisfy the Rate Covenant set forth in this Agreement and its obligation to operate and maintain the Project for its useful life. The Borrower must diligently pursue and bear any and all costs related to such challenge. The Borrower must notify and regularly update the State Water Board regarding the status of any such challenge.
(b) Securing Liens. The Borrower shall at any and all times, to the extent permitted by law, pass, make, do, execute, acknowledge and deliver, all and every such further resolutions, acts, deeds, conveyances, assignments, transfers and assurances as may be necessary or desirable in connection with assuring, conveying, granting, assigning, securing and confirming the Liens on the Pledged Collateral (whether now existing or hereafter arising) granted to the WIFIA Lender for its benefit pursuant to the WIFIA Loan Documents, or intended so to be granted pursuant to the WIFIA Loan Documents, or which the Borrower may become bound to grant. The Borrower shall at all times maintain the Pledged Collateral free and clear of any Lien that has priority over, or equal rank with, the Liens created by the WIFIA Loan Documents, other than Permitted Liens, and all organizational, regulatory or other necessary action on the part of the Borrower to that end shall be duly and validly taken at all times. The Borrower shall at all times,
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to the extent permitted by law, defend, preserve and protect the Liens on the Pledged Collateral granted pursuant to the WIFIA Loan Documents and for the benefit of the WIFIA Lender under the WIFIA Loan Documents against all claims and demands of all Persons whomsoever, subject to Permitted Liens.
(c) Use of Proceeds. The Borrower shall use the proceeds of the WIFIA Loan solely for purposes permitted by applicable law, this Agreement and the other WIFIA Loan Documents.
(d) Prosecution of Work; Verification Requirements.
(i) The Borrower shall diligently prosecute the work relating to the Project and complete the Project in accordance with the Construction Schedule (and on or prior to the Development Default Date), the Governmental Approvals in connection with the Project, and prudent utility and industry practice. (ii) The Borrower shall comply with Subpart C of 2 C.F.R. Part 180, as supplemented by Subpart C of 2 C.F.R. Part 1532 (relating to debarment), including the verification requirements set forth in 2 C.F.R. §§ 180.300 and 180.320, and shall include in its contracts with respect to the Project similar terms or requirements for compliance. (e) Operations and Maintenance. The Borrower shall operate and maintain the Water System (including the Project) substantially in accordance with the Updated Financial Model/Plan most recently delivered by the Borrower to the WIFIA Lender pursuant to Part A of Schedule V (Reporting Requirements) and its operations and maintenance plan (that incorporates the Project). The Borrower shall operate and maintain the Water System (including the Project) in a reasonable and prudent manner and in good repair, working order and condition and in accordance with the requirements of all applicable laws and each applicable WIFIA Loan Document. The Borrower shall at all times do or cause to be done all things necessary to obtain, preserve, renew, extend and keep in full force and effect the Governmental Approvals and any other rights, licenses, franchises, and authorizations material to the conduct of its business and the operation and maintenance of the Water System.
(f) Insurance.
(i) The Borrower shall at all times procure and maintain or cause to be maintained insurance on the Water System and the construction of the Project, with responsible insurers, or as part of a reasonable system of self-insurance that is actuarially sound and adequately funded, in such amounts and against such risks (including damage to or destruction of the Water System) as are customarily maintained with respect to works and properties of like character against accident to, loss of, or damage to such works or properties, including insurance against public liability, property damage, workers’ compensation, and builders’ risk, casualty and liability, as appropriate, and otherwise in accordance with the Parity Obligation Documents and Construction Contracts. The insurance policies shall be available at all reasonable times for inspection upon request by the WIFIA Lender, its agents and representatives.
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(ii) The Borrower shall cause all liability insurance policies that it maintains (excluding property damage, automobile or workers’ compensation insurance), to reflect the WIFIA Lender as an additional insured to the extent of its insurable interest. (g) Maintain Legal Structure. The Borrower shall maintain its existence as a Legal Entity organized and existing under its Organizational Documents and the laws of the State. (h) Water System Accounts; Permitted Investments.
(i) The Borrower shall maintain the Water System Accounts in accordance with the terms of this Agreement and the terms of the Parity Obligation Documents. All Gross Revenues received shall be deposited into the Water System Accounts when and as received in trust for the benefit of the holders of the Obligations, subject to the application of Gross Revenues to Operation and Maintenance Costs of the Water System. The Borrower shall not apply any portion of the Gross Revenues in contravention of this Agreement. Any funds then on deposit in the WIFIA Bond Service Fund (if any) shall only be used for payments of WIFIA Debt Service by the Borrower in accordance with the WIFIA Loan Documents.
(ii) If a WIFIA Debt Service Reserve Requirement is applicable as set forth in Part D of Schedule I (WIFIA Loan Specific Terms), the Borrower shall maintain the WIFIA Debt Service Reserve Account in an amount equal to the WIFIA Debt Service Reserve Requirement.
(iii) The Borrower has the right (but not the obligation) at any time to establish a fund to be held by it and administered in accordance with this Section 14(h)(iii), for the purpose of stabilizing the rates and charges imposed by the Borrower with respect to the Water System. From time to time the Borrower may deposit amounts in the Rate Stabilization Fund, from any source of legally available funds, including but not limited to Net Revenues permitted to be so applied pursuant to the Flow of Funds, as the Borrower may determine. The Borrower may, but is not required to, withdraw amounts on deposit in the Rate Stabilization Fund and deposit such amounts in the Water Fund in any Borrower Fiscal Year for the purpose of paying the principal of and interest on any issue of Parity Obligations coming due and payable in such Borrower Fiscal Year. Amounts so transferred from the Rate Stabilization Fund to the Water Fund in any Borrower Fiscal Year constitute Gross Revenues for that Borrower Fiscal Year (except for purposes of Section 15(a) (Indebtedness) relating to the issuance of Parity Obligations), and will be applied for the purposes of the Water Fund. Amounts on deposit in the Rate Stabilization Fund are not pledged to and do not secure any issue of Parity Obligations. All interest or other earnings on deposits in the Rate Stabilization Fund will be retained therein or, at the option of the Borrower, be applied for any other lawful purposes. The Borrower has the right at any time to withdraw any or all amounts on deposit in the Rate Stabilization Fund and apply such amounts for any other lawful purposes of the Borrower.
(iv) Amounts on deposit in the Water System Accounts shall be held uninvested or invested in Permitted Investments. Permitted Investments must mature or be redeemable at the election of the holder at such times as may be necessary to ensure that
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funds will be available within the applicable account to be applied towards the purpose for which the applicable account has been established.
(i) Compliance with Laws.
(i) The Borrower shall, and shall require its contractors and subcontractors at all tiers with respect to the Project to, comply with all applicable laws, rules, regulations and requirements, including 40 U.S.C. §§3141-3144, 3146, and 3147 (relating to Davis-Bacon Act requirements) (and regulations relating thereto), 33 U.S.C. §3914 (relating to American iron and steel products), 2 C.F.R. § 180.320 and 2 C.F.R. §1532 (relating to non-debarment), 31 U.S.C. §1352 (relating to non-lobbying), and any applicable Sanctions Laws.
(ii) To ensure such compliance, the Borrower shall include in all contracts with respect to the Project (A) the contract clauses relating to applicable federal requirements (such as Davis-Bacon and Equal Employment Opportunity) and (B) requirements that its contractors (1) shall comply with all applicable laws, rules, regulations, and requirements set forth in this Section 14(i) and follow applicable federal guidance and (2) incorporate in all subcontracts (and cause all subcontractors to include in lower tier subcontracts) such terms and conditions as are required to be incorporated therein by any applicable laws, rules, regulations and requirements set forth in this Section 14(i). (j) Material Obligations. The Borrower shall pay its material obligations payable from the Gross Revenues promptly and in accordance with their terms and pay and discharge promptly all taxes, assessments and governmental charges or levies imposed upon it or upon the Pledged Collateral or other assets of the Water System, before the same shall become delinquent or in default, as well as all lawful and material claims for labor, materials and supplies or other claims which, if unpaid, might give rise to a Lien upon the Water System or any part thereof or on the Gross Revenues or the Pledged Collateral; provided, however, that such payment and discharge shall not be required with respect to any such tax, assessment, charge, levy, claim or Lien so long as the validity or amount thereof shall be contested by the Borrower in good faith by appropriate proceedings and so long as the Borrower shall have set aside adequate reserves with respect thereto in accordance with and to the extent required by GAAP, applied on a consistent basis.
(k) SAM Registration and UEI Number. The Borrower shall obtain and maintain, on or prior to the Effective Date through (i) the Final Disbursement Date, an active SAM registration status and (ii) the Final Maturity Date, a UEI Number. (l) Events of Loss; Loss Proceeds. If an Event of Loss shall occur with respect to the Water System (including the Project) or any part thereof, the Borrower shall (i) diligently pursue all of its rights to compensation against all relevant insurers, reinsurers and Governmental Authorities, as applicable, in respect of such Event of Loss and (ii) apply all Loss Proceeds (after excluding any proceeds of delay-in-start-up insurance and proceeds covering liability of the Borrower to third parties) in respect of such Event of Loss to repair, reconstruct, and/or replace the portion of the System in respect of which the applicable Loss Proceeds were received. The Borrower shall begin such repair, reconstruction or replacement promptly after such damage or
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destruction shall occur, and shall continue and properly complete such repair, reconstruction or replacement as expeditiously as possible, and shall pay out of such Loss Proceeds (after excluding any proceeds of delay-in-start-up insurance and proceeds covering liability of the Borrower to third parties) all costs and expenses in connection with such repair, reconstruction or replacement so that the same shall be completed and the System shall be free and clear of all claims and Liens. (m) Immunity. To the fullest extent permitted by applicable law, the Borrower agrees that it will not assert any immunity (and hereby waives any such immunity) it may have as a governmental entity from lawsuits, other actions and claims, and any judgments with respect to the enforcement of any of the obligations of the Borrower under this Agreement or any other WIFIA Loan Document.
(n) Accounting and Audit Procedures.
(i) The Borrower shall establish fiscal controls and accounting procedures sufficient to assure proper accounting for all (A) Gross Revenues, operating expenses, capital expenses, depreciation, reserves, debt issued and outstanding and debt payments and (B) Project-related costs, Requisitions submitted, WIFIA Loan proceeds received, payments made by the Borrower with respect to the Project, and other sources of funding for the Project (including amounts paid from such sources for Project costs so that audits may be performed to ensure compliance with and enforcement of this Agreement).
The Borrower shall use accounting, audit and fiscal procedures conforming to GAAP, including, with respect to the WIFIA Loan, accounting of principal and interest payments, disbursements, prepayments and calculation of interest and principal amounts Outstanding. (ii) The Borrower shall have a single or program-specific audit conducted in accordance with 2 C.F.R. Part 200 Subpart F and 31 U.S.C. § 7502 from (and including) the first Borrower Fiscal Year in which a Disbursement is made under this Agreement and annually thereafter to the extent required by applicable law, except in all cases to the extent biennial audits are permitted for the Borrower pursuant to 2 C.F.R. § 200.504 and 31 U.S.C. § 7502(b). Upon reasonable notice, the Borrower shall cooperate fully in the conduct of any periodic or compliance audits conducted by the WIFIA Lender, or designees thereof, pursuant to 40 C.F.R. Part 35, 31 U.S.C. § 7503(b), or 31 U.S.C. § 6503(h) and shall provide full access to any books, documents, papers or other records that are pertinent to the Project or the WIFIA Loan, to the WIFIA Lender, or the designee thereof, for any such project or programmatic audit.
(o) Access; Records.
(i) So long as the WIFIA Loan or any portion thereof shall remain outstanding and until five (5) years after the WIFIA Loan shall have been paid in full, the WIFIA Lender shall have the right, upon reasonable prior notice, to visit, monitor and/or inspect any portion of the Project and its operations, to examine books of account and records of the Borrower relating to the Project, to make copies and extracts therefrom at the Borrower’s expense, and to discuss the Borrower’s affairs, finances and accounts relating to the Project with, and to be advised as to the same by, its officers and employees and its independent public accountants (and by this provision the Borrower irrevocably
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authorizes its independent public accountants to discuss with the WIFIA Lender the affairs, finances and accounts of the Borrower, whether or not any representative of the Borrower is present, it being understood that nothing contained in this Section 14(o) is intended to confer any right to exclude any such representative from such discussions), all at such reasonable times and intervals as the WIFIA Lender may request. The Borrower agrees to pay all out-of-pocket expenses incurred by the WIFIA Lender in connection with the WIFIA Lender’s exercise of its rights under this Section 14(o) at any time when an Event of Default shall have occurred and be continuing.
(ii) The Borrower shall maintain and retain all pertinent files relating to the Project and the WIFIA Loan, as may be necessary for the WIFIA Lender to facilitate an effective and accurate audit and performance evaluation of the Project, until five (5) years after the later of the date on which (A) all rights and duties under this Agreement and under the WIFIA Bond (including payments) have been fulfilled and any required audits have been performed and (B) any litigation relating to the Project, the WIFIA Loan or this Agreement is finally resolved or, if the WIFIA Lender has reasonable cause to extend such date, a date to be mutually agreed upon by the WIFIA Lender and the Borrower. The Borrower shall provide to the WIFIA Lender in a timely manner all records and documentation relating to the Project that the WIFIA Lender may reasonably request from time to time.
(p) Compliance With Parity Obligation Documents. The Borrower will observe and perform all of the covenants, agreements and conditions on its part required to be observed and performed under all Parity Obligation Documents. The Borrower agrees that it will not take or omit to take any action within its control which would, or which if not corrected with the passage of time would, constitute an event of default under and within the meaning of any Parity Obligation Documents.
(q) Special Revenues. To the extent permitted by law, the Borrower shall take a position in any bankruptcy, insolvency or related legal proceedings that the Net Revenues that are pledged to secure the WIFIA Loan as a Parity Obligation pursuant to the WIFIA Loan Documents are “special revenues” within the meaning of Section 902(2) of the Insolvency Laws, that those special revenues are, pursuant to the WIFIA Loan Documents, subject to a Lien resulting from a security agreement, that the automatic stay of Sections 362(a) and 922(a) of the Insolvency Laws will not operate as a stay of the application of the Net Revenues to payment of the WIFIA Loan as a Parity Obligation in a manner consistent with the provisions of the Insolvency Laws, and that the Net Revenues acquired by the Borrower after the commencement of a bankruptcy case shall remain subject to the Lien on the Net Revenues resulting from the WIFIA Loan Documents.
Section 15. Negative Covenants. The Borrower covenants and agrees as follows until the date the WIFIA Bond and all of the obligations of the Borrower under this Agreement (other than contingent indemnity obligations) are irrevocably paid in full in immediately available funds and the WIFIA Lender no longer has any commitment to make Disbursements to the Borrower, unless the WIFIA Lender waives compliance in writing:
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(a) Indebtedness.
(i) Program Requirements. The Borrower may not create, incur or suffer to exist (A) any Obligations (1) the payments with respect to which are senior or prior in right of payment by the Borrower of the WIFIA Loan or (2) secured by a Lien on the Pledged Collateral that is senior to the Lien on the Pledged Collateral in favor of the WIFIA Lender or (3) all or a portion of the proceeds of which are or will be applied at any time to fund all or any portion of Total Project Costs, that are secured by a Lien on any assets or property of the Borrower other than the Pledged Collateral. The Borrower shall not incur any indebtedness of any kind payable from, secured or supported by the Pledged Collateral, including Permitted Debt, without the prior written consent of the WIFIA Lender, while an Event of Default relating to a Payment Default or a Bankruptcy Related Event has occurred and is continuing.
(ii) Issuance of Additional Parity Obligations. The Borrower shall not issue or incur any Additional Obligations except in accordance with all requirements and conditions set forth in the Additional Bonds Test.
(iii) Issuance of Additional Subordinated Obligations. The Borrower shall not issue or incur any Additional Subordinated Obligations except for Additional Subordinated Obligations which (A) are secured by a pledge of Net Revenues which is fully subordinated in all respects to the pledge of the Pledged Collateral in favor of the Parity Obligations, and (B) has a right of payment and is payable in the Flow of Funds on a basis subordinate to the priority of payment of the Parity Obligations. (b) No Lien Extinguishment or Adverse Amendments. The Borrower shall not, and shall not permit any Person to, without the prior written consent of the WIFIA Lender, (i) extinguish the Rate Covenant; (ii) extinguish or impair the Liens on the Pledged Collateral or any dedicated source of repayment of the WIFIA Loan or any other Obligations (the proceeds of which are applied to fund Total Project Costs), in each case granted pursuant to the WIFIA Loan Documents and the Parity Obligation Documents, (iii) amend, modify, replace or supplement any Related Document or permit a waiver of any provision thereof in a manner that could adversely affect the WIFIA Lender or could reasonably be expected to result in a Material Adverse Effect, or (iv) terminate, assign or replace any Related Document in a manner that could adversely affect the WIFIA Lender or could reasonably be expected to have a Material Adverse Effect. (c) No Prohibited Liens. Except for Permitted Liens, the Borrower shall not create, incur, assume or permit to exist any Lien on the Project, the Pledged Collateral, the Gross Revenues, or the Borrower’s respective rights in any of the foregoing and the Pledged Collateral will be free and clear of any Lien that is of equal rank with or senior to the pledge of the Borrower created under the WIFIA Loan Documents for the benefit of the WIFIA Lender. (d) Restricted Payments and Transfers. The Borrower shall not permit Gross Revenues or other assets of the Water System, or any funds in any accounts held under this Agreement or in any other fund or account held by or on behalf of the Borrower for the benefit of the Water System, to be paid or transferred or otherwise applied for purposes other than ownership, operation, maintenance or financing of the Water System.
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(e) No Prohibited Sale, Lease or Assignment. The Borrower shall not sell, lease or assign its rights in and to the Water System or a substantial portion of the assets included in the Water System, unless such sale, lease or assignment (i) could not reasonably be expected to have a Material Adverse Effect and (ii) is made by the Borrower in the ordinary course of business. (f) Mergers and Acquisitions. The Borrower shall not, and shall not agree to, reorganize, consolidate with or merge into another Person unless (i) such reorganization, merger or consolidation is with or into another entity established by State law and such reorganization, merger or consolidation is permitted by State law, and in each case, does not adversely affect or impair to any extent or in any manner (A) the Gross Revenues or other elements of the Pledged Collateral or (B) the availability of the Gross Revenues for the payment and security of the obligations of the Borrower under this Agreement; and (ii) the Borrower provides to the WIFIA Lender notice of such reorganization, consolidation or merger in accordance with Part E of Schedule V (Reporting Requirements) and such other information concerning such reorganization, consolidation or merger as shall have been reasonably requested by the WIFIA Lender. (g) Hedging. The Borrower shall not enter into any swap or hedging transaction, including any such transaction that is speculative or creates extraordinary leverage or risk, without the prior written consent of the WIFIA Lender.
Section 16. Reporting Requirements. The Borrower agrees to comply with each of the reporting requirements set out in Schedule V (Reporting Requirements), unless otherwise agreed or waived by the WIFIA Lender in writing.
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
Section 17. Events of Default and Remedies.
(a) An “Event of Default” shall exist under this Agreement if any of the following occurs; provided, that the occurrence of an event set forth in sub-clauses (v) through (and including) (ix) below shall not constitute an Event of Default under this Agreement until the WIFIA Lender has provided a notice of such Event of Default to the Borrower; provided, further, that nothing in this paragraph is intended to limit any obligation of the Borrower hereunder, including any obligation to cure any event or condition contemplated under this Section 17(a):
(i) Payment Default. The Borrower shall fail to pay when due any part of the principal amount of or interest on the WIFIA Loan (including WIFIA Debt Service required to have been paid pursuant to the provisions of Section 8 (Repayments)), and such failure continues for a period of five (5) days, when and as the payment thereof shall be required under this Agreement or the WIFIA Bond or on the Final Maturity Date (each such failure, a “Payment Default”).
(ii) Occurrence of a Bankruptcy Related Event. A Bankruptcy Related Event shall occur with respect to the Borrower.
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3740645.5 046297 CTR
(iii) Acceleration of Obligations. Any acceleration shall occur of the maturity of any Obligation, or any such Obligation shall not be paid in full upon the final maturity thereof.
(iv) Invalidity of WIFIA Loan Documents. (A) Any WIFIA Loan Document ceases to be in full force and effect (other than as a result of the termination thereof in accordance with its terms) or becomes void, voidable, illegal or unenforceable, or the Borrower contests in any manner the validity or enforceability of any WIFIA Loan Document to which it is a party or denies it has any further liability under any WIFIA Loan Document to which it is a party, or purports to revoke, terminate or rescind any WIFIA Loan Document to which it is a party; (B) any Parity Obligation Document ceases (other than as expressly permitted thereunder) to be effective or to grant a valid and binding security interest on any material portion of the Pledged Collateral other than as a result of actions or a failure to act by, and within the control of, the WIFIA Lender, or any other holder of Obligations secured by the Pledged Collateral, and with the priority purported to be created thereby; or (C) any event occurs that results in the impairment in the validity, enforceability, perfection or priority of the WIFIA Lender’s security interest in the Pledged Collateral.
(v) Covenant Default. The Borrower shall fail to observe or perform any covenant, agreement or obligation of the Borrower under this Agreement, the WIFIA Bond or any other WIFIA Loan Document (other than in the case of any Payment Default or any Development Default), and such failure shall not be cured within thirty (30) days after the earlier to occur of (A) receipt by the Borrower from the WIFIA Lender of written notice thereof or (B) the Borrower’s knowledge of such failure; provided, that if such failure is capable of cure but cannot reasonably be cured within such thirty (30) day cure period, then such thirty (30) day cure period shall be extended by up to one hundred fifty (150) additional days, if and so long as (x) within such thirty (30) day cure period the Borrower shall commence actions reasonably designed to cure such failure and shall diligently pursue such actions until such failure is cured and (y) such failure is cured within one hundred eighty (180) days of the date specified in either (A) or (B) above, as applicable; provided, however, that with respect to a failure to comply with the Rate Covenant, the cure period shall be the relevant cure period provided in Annex A to Schedule I (WIFIA Loan Specific Terms).
(vi) Misrepresentation Default. Any of the representations, warranties or certifications of the Borrower made in or delivered pursuant to the WIFIA Loan Documents (or in any certificates delivered by the Borrower in connection with the WIFIA Loan Documents) shall prove to have been false or misleading in any material respect when made or deemed made; provided, that no Event of Default shall be deemed to have occurred under this Section 17(a)(vi) if and so long as (A) such misrepresentation is not intentional, (B) such misrepresentation is not a misrepresentation in respect of Section 12(g) (Security Interests), Section 12(h) (No Debarment), Section 12(i) (No Lobbying), or Section 12(j) (Compliance with Laws), (C) in the reasonable determination of the WIFIA Lender, such misrepresentation has not had, and would not reasonably be expected to result in, a Material Adverse Effect, (D) in the reasonable determination of the WIFIA Lender, the underlying issue giving rise to the misrepresentation is capable of being cured and (E) the underlying
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issue giving rise to the misrepresentation is cured by the Borrower within thirty (30) days after the date on which the Borrower first became aware (or reasonably should have become aware) of such misrepresentation.
(vii) Enforcement of Other Financing Documents. The holder(s) of Obligations under a Related Document exercises remedies permitted thereunder for an event of default that has occurred and is continuing (and has not been cured or waived by the expiration of any applicable grace period), in respect of the performance of any covenant, agreement or obligation of the Borrower under such Related Document. (viii) Material Adverse Judgment. Any final, non-appealable judgment related to the Pledged Collateral that results in the impairment of (A) the Borrower’s ability to comply with any of its payment obligations under the WIFIA Bond or this Agreement or (B) the existence, priority or perfection (if applicable) of the WIFIA Lender’s security interest in the Pledged Collateral.
(ix) Development Default. A Development Default shall occur. (b) Upon the occurrence of any Bankruptcy Related Event, all obligations of the WIFIA Lender hereunder with respect to the Disbursement of any undisbursed amounts of the WIFIA Loan shall automatically be deemed terminated.
(c) Upon the occurrence of any Event of Default, the WIFIA Lender, by written notice to the Borrower, may exercise any or all of the following remedies:
(i) the WIFIA Lender may suspend or terminate all of its obligations hereunder with respect to the Disbursement of any undisbursed amounts of the WIFIA Loan;
(ii) the WIFIA Lender may cease permitting interest on the WIFIA Loan to be capitalized (if applicable);
(iii) the WIFIA Lender may apply the Default Rate provisions of Section 6 (Interest Rate);
(iv) the WIFIA Lender may suspend or debar the Borrower from further participation in any Government program administered by the WIFIA Lender and notify other departments and agencies of such default; and
(v) the WIFIA Lender shall be entitled and empowered to institute any actions or proceedings at law or in equity for the collection of any sums due and unpaid hereunder or under the WIFIA Bond or the other WIFIA Loan Documents, and may prosecute any such judgment or final decree against the Borrower and collect in the manner provided by law out of the property of the Borrower the moneys adjudged or decreed to be payable, and the WIFIA Lender shall have all of the rights and remedies of a creditor, including all rights and remedies of a secured creditor under the Uniform Commercial Code (if applicable), and may take such other actions at law or in equity as may appear necessary or desirable to collect all amounts payable by the Borrower under this Agreement, the
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WIFIA Bond or the other WIFIA Loan Documents then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of the Borrower under this Agreement, the WIFIA Bond or the other WIFIA Loan Documents. (d) The WIFIA Lender may declare the unpaid principal amount of the WIFIA Loan (as evidenced by the WIFIA Bond and this Agreement) to be, and the same shall thereupon forthwith become, immediately due and payable, together with the interest accrued thereon and all fees, costs, expenses, indemnities and other amounts payable under this Agreement, the WIFIA Bond or the other WIFIA Loan Documents, all without presentment, demand, notice, declaration, protest or other requirements of any kind, all of which are hereby expressly waived. (e) No action taken pursuant to this Section 17 shall relieve the Borrower from its obligations pursuant to this Agreement, the WIFIA Bond or the other WIFIA Loan Documents, all of which shall survive any such action.
ARTICLE VII
MISCELLANEOUS
Section 18. Disclaimer of Warranty. The WIFIA Lender makes no warranty or representation, either express or implied, as to the value, design, condition, merchantability or fitness for a particular purpose or fitness for use of the Project or any portion thereof or any other warranty with respect thereto. In no event shall the WIFIA Lender be liable for any incidental, indirect, special or consequential damages incidental to or arising out of this Agreement or the Water System (including the Project) or the existence, furnishing, functioning or use of the Project or any item or products or services provided for in this Agreement.
Section 19. No Personal Recourse. No official, employee or agent of the WIFIA Lender or the Borrower or any Person executing this Agreement or any of the other WIFIA Loan Documents shall be personally liable on this Agreement or such other WIFIA Loan Documents by reason of the issuance, delivery or execution hereof or thereof.
Section 20. No Third-Party Rights. The parties hereby agree that this Agreement creates no third-party rights against the Borrower, the Federal Government, or the WIFIA Lender, solely by virtue of the WIFIA Loan, and that no third-party creditor of the Borrower shall have any right against the WIFIA Lender with respect to the WIFIA Loan made pursuant to this Agreement.
Section 21. Borrower’s Authorized Representative. The Borrower shall at all times have appointed a Borrower’s Authorized Representative by designating such Person or Persons from time to time to act on the Borrower’s behalf pursuant to a written certificate furnished to the WIFIA Lender and the Servicer, if any, containing the specimen signature or signatures of such Person or Persons and signed by the Borrower.
Section 22. WIFIA Lender’s Authorized Representative. The WIFIA Lender hereby appoints the Director of the WIFIA Program, whose notice details are set forth below in Section 31 (Notices), to serve as the WIFIA Lender’s Authorized Representative under this Agreement until such time as a successor or successors shall have been appointed. Thereafter, the successor
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in office shall serve as the WIFIA Lender’s Authorized Representative. The WIFIA Lender shall provide notice to the Borrower within a reasonable time period following the succession.
Section 23. Servicer. The WIFIA Lender may from time to time designate another entity or entities to perform, or assist the WIFIA Lender in performing, the duties of the Servicer or specified duties of the WIFIA Lender under this Agreement and the WIFIA Bond. The WIFIA Lender shall give the Borrower written notice of the appointment of any successor or additional Servicer and shall enumerate the duties or any change in duties to be performed by any Servicer.
Any references in this Agreement to the WIFIA Lender shall be deemed to be a reference to the Servicer with respect to any duties which the WIFIA Lender shall have delegated to such Servicer.
The WIFIA Lender may at any time assume the duties of any Servicer under this Agreement and the WIFIA Bond. The Borrower shall cooperate and respond to any reasonable request of the Servicer for information, documentation or other items reasonably necessary for the performance by the Servicer of its duties hereunder.
Section 24. Amendments, Waivers and Termination. No amendment, modification, termination, or waiver of any provision of this Agreement or the WIFIA Bond shall in any event be effective without the prior written consent of each of the parties hereto. Notwithstanding the foregoing sentence, if the first Disbursement of the WIFIA Loan has not occurred on or prior to the Final Disbursement Date, the WIFIA Lender or the Borrower may terminate this Agreement upon no less than ten (10) Business Days’ prior written notice to the other party. Once terminated, this Agreement may not be reinstated.
Section 25. Governing Law. This Agreement shall be governed by the federal laws of the United States of America if and to the extent such federal laws are applicable and the internal laws of the State, if and to the extent such federal laws are not applicable.
Section 26. Severability. In case any provision in or obligation under this Agreement shall be invalid, illegal, or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.
Section 27. Successors and Assigns. This Agreement shall be binding upon the parties hereto and their respective permitted successors and assigns and shall inure to the benefit of the parties hereto and their permitted successors and assigns. Neither the Borrower’s rights or obligations hereunder or under the WIFIA Bond nor any interest herein or therein may be assigned or delegated by the Borrower without the prior written consent of the WIFIA Lender.
Section 28. Remedies Not Exclusive. No remedy conferred herein or in the WIFIA Bond or reserved to the WIFIA Lender is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or under the WIFIA Bond or now or hereafter existing at law or in equity or by statute.
Section 29. Delay or Omission Not Waiver. No delay or omission of the WIFIA Lender to exercise any right or remedy provided hereunder or under the WIFIA Bond upon a default of the Borrower (except a delay or omission pursuant to a written waiver) shall impair any such right
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or remedy or constitute a waiver of any such default or acquiescence therein. Every right and remedy given by this Agreement or under the WIFIA Bond or by law to the WIFIA Lender may be exercised from time to time, and as often as may be deemed expedient by the WIFIA Lender.
Section 30. Counterparts. This Agreement and any amendments, waivers, consents or supplements hereto or in connection herewith may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. Electronic delivery of an executed counterpart of a signature page of this Agreement or of any document or instrument delivered in connection herewith in accordance with Section 31 (Notices) shall be effective as delivery of an original executed counterpart of this Agreement or such other document or instrument, as applicable.
Section 31. Notices.
(a) All notices, requests, or communication hereunder shall be given in writing. (b) Notices to the WIFIA Lender should be made by (i) email to the email address noted below for the WIFIA Lender or (ii) submission through another electronic medium or transmission system as designated by and in a format acceptable to the WIFIA Lender, unless otherwise instructed by the WIFIA Lender:
If to WIFIA Lender: Environmental Protection Agency
WJC-E 7334A
1200 Pennsylvania Avenue NW
Washington, D.C. 20460
Attention: WIFIA Director
Email: [email protected]
(c) Notices to the Borrower should be made by (i) nationally recognized courier service, (ii) hand delivery, (iii) email, to the email address noted below for the Borrower, or (iv) another electronic medium in a format acceptable to the Borrower, unless otherwise instructed by the Borrower’s Authorized Representative:
If to Borrower: The notice details set forth in Part G of Schedule I (WIFIA Loan Specific Terms)
(d) Each such notice, request or communication shall be effective (x) if delivered by hand or by nationally recognized courier service, when delivered at the address specified in this Section 31 (or in accordance with the latest unrevoked written direction from the receiving party), and (y) if given by email or other electronic method, when such email is delivered to the email address specified in this Section 31 or submitted to the electronic medium as directed by the receiving party, in each case with the sender’s receipt of an acknowledgement from the intended recipient (such as by a “read receipt,” return email, or other written acknowledgement) (or in accordance with the latest unrevoked written direction from the receiving party); provided,
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that notices received on a day that is not a Business Day or after 5:00 p.m. Eastern Time on a Business Day will be deemed to be effective on the next Business Day.
Section 32. Indemnification. The Borrower shall, to the extent permitted by law, indemnify the WIFIA Lender, the Servicer (if any), and any official, employee, agent, advisor or representative of the WIFIA Lender (each such Person being herein referred to as an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities, fines, penalties, costs and expenses (including the fees, charges and disbursements of any counsel for any Indemnitee and the costs of environmental remediation), whether known, unknown, contingent or otherwise, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (a) the execution, delivery and performance of this Agreement, any Construction Contract, or any Related Document, (b) the WIFIA Loan or the use of the proceeds thereof, or (c) the violation of any law, rule, regulation, order, decree, judgment or administrative decision relating to the environment, the preservation or reclamation of natural resources, the management, release or threatened release of any hazardous material or to health and safety matters; in each case arising out of or in direct relation to the Project; provided, that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities, fines, penalties, costs or related expenses are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee. In case any action or proceeding is brought against an Indemnitee by reason of any claim with respect to which such Indemnitee is entitled to indemnification hereunder, the Borrower shall be entitled, at its expense, to participate in the defense thereof; provided, that such Indemnitee has the right to retain its own counsel, at the Borrower’s expense, and such participation by the Borrower in the defense thereof shall not release the Borrower of any liability that it may have to such Indemnitee. Any Indemnitee against whom any indemnity claim contemplated in this Section 32 is made shall be entitled, after consultation with the Borrower and upon consultation with legal counsel wherein such Indemnitee is advised that such indemnity claim is meritorious, to compromise or settle any such indemnity claim. Any such compromise or settlement shall be binding upon the Borrower for purposes of this Section
32. Nothing herein shall be construed as a waiver of any legal immunity that may be available to any Indemnitee. To the extent permitted by applicable law, neither the Borrower nor the WIFIA Lender shall assert, and each of the Borrower and the WIFIA Lender hereby waives, any claim against any Indemnitee or the Borrower, respectively, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any Construction Contract, or any Related Document, the other transactions contemplated hereby and thereby, the WIFIA Loan or the use of the proceeds thereof, provided, that nothing in this sentence shall limit the Borrower’s indemnity obligations to the extent such damages are included in any third party claim in connection with which an Indemnitee is entitled to indemnification hereunder. All amounts due to any Indemnitee under this Section 32 shall be payable promptly upon demand therefor. The obligations of the Borrower under this Section 32 shall survive the payment or prepayment in full or transfer of the WIFIA Loan, the enforcement of any provision of this Agreement or the other Related Documents, any amendments, waivers (other than amendments or waivers in writing with respect to this Section 32) or consents in respect hereof or thereof, any Event of Default, and any workout, restructuring or similar arrangement of the obligations of the Borrower hereunder or thereunder.
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Section 33. Sale of WIFIA Loan. The WIFIA Lender shall not sell the WIFIA Loan at any time prior to the later of (a) the Substantial Completion Date and (b) other than with respect to a sale or transfer to another governmental entity within the Federal Government, the Final Disbursement Date. After such date, the WIFIA Lender may sell the WIFIA Loan to another entity or reoffer the WIFIA Loan into the capital markets only in accordance with the provisions of this Section 33. Such sale or reoffering shall be on such terms as the WIFIA Lender shall deem advisable. However, in making such sale or reoffering the WIFIA Lender shall not change the terms and conditions of the WIFIA Loan without the prior written consent of the Borrower in accordance with Section 24 (Amendments and Waivers). Prior to any sale or reoffering of the WIFIA Loan, the WIFIA Lender shall provide reasonable written notice to the Borrower of the WIFIA Lender’s intention to consummate such a sale or reoffering. The provision of any notice pursuant to this Section 33 shall neither (x) obligate the WIFIA Lender to sell nor (y) provide the Borrower with any rights or remedies in the event the WIFIA Lender, for any reason, does not sell the WIFIA Loan.
Section 34. Effectiveness. This Agreement shall be effective on the Effective Date.
Section 35. Release of Lien. Upon the irrevocable payment in full in immediately available funds by the Borrower of the WIFIA Loan Balance, together with all accrued interest, fees and expenses with respect thereto, the WIFIA Lender shall cancel and discharge the Lien on the Pledged Collateral and surrender the WIFIA Bond to the Borrower in accordance with Section 9(b) (General Prepayment Instructions).
Section 36. Survival. The indemnification requirements of Section 32 (Indemnification), the reporting and record keeping requirements of Section 14(o) (Access; Records) and the payment requirements of Section 10 (Fees and Expenses) shall survive the termination of this Agreement as provided in such Sections.
Section 37. Integration. This Agreement, together with the other WIFIA Loan Documents, constitutes the entire contract between the parties relating to the subject matter hereof and supersedes any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.
[The remainder of this page intentionally left blank; signature pages immediately follow.]
26.56 [Signature Page to City of Santa Cruz Santa Cruz Water Program Project (Phase 1) – WIFIA Loan Agreement] 3740645.5 046297 CTR
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.
CITY OF SANTA CRUZ,
by its authorized representative
By: ______________________________
Name:
Title:
26.57 [Signature Page to City of Santa Cruz Santa Cruz Water Program Project (Phase 1) – WIFIA Loan Agreement] 3740645.5 046297 CTR
UNITED STATES ENVIRONMENTAL
PROTECTION AGENCY, acting by and
through the Administrator of the
Environmental Protection Agency
By: ______________________________
Name: Michael S. Regan
Title: Administrator
26.58 Schedule I-1
3740645.5 046297 CTR
SCHEDULE I
WIFIA LOAN SPECIFIC TERMS
No. Item WIFIA Loan Specific Term
PART A. Key Borrower Metrics
1. Effective Date [___], 2023
2. Borrower City of Santa Cruz, a Legal Entity organized and existing under the State.
3. Legal Entity A charter city and municipal corporation duly organized and existing under the Constitution and laws of the State.
4. State State of California
5. Borrower FEIN 94-6000427.
6. Borrower UEI Number [___].
7. Initial Borrower Fiscal Year The fiscal year of the Borrower commencing on July 1 of any given calendar year and ending on June 30 of the immediately succeeding calendar year.
8. Application Receipt Date July 15, 2022.
9. WIFIA CUSIP Number [___], as the CUSIP number for the WIFIA Loan for purposes of monitoring through EMMA.
10. Water System The entire system of the Borrower for the supply, storage, treatment and distribution of water within the service area of the Borrower, including but not limited to all facilities, properties, lands, rights, entitlements and other property useful in connection therewith, together with all extensions thereof and improvements thereto at any time acquired, constructed or installed by the
Borrower.
11. Gross Revenues Means, for each Borrower Fiscal Year, all gross income and revenue received or receivable by the Borrower from the ownership or operation of the Water System,
determined in accordance with GAAP, including,
without limiting the generality of the foregoing: (a) all amounts levied by the Borrower as a fee for connecting
to the Water System, as such fee is established from time to time under the applicable laws of the State; (b) all income, rents, rates, fees, capital improvement fees
(including facilities capacity and pump zone fees),
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3740645.5 046297 CTR
No. Item WIFIA Loan Specific Term
charges or other moneys derived from the services,
facilities and commodities sold, furnished or supplied
through the facilities of the Water System, (c) the
earnings on and income derived from the investment of
such income, rents, rates, fees, charges or other moneys to the extent that the use of such earnings and income is limited by or under applicable law to the Water System, and (d) the proceeds derived by the Borrower directly or indirectly from the sale, lease or other disposition of a part of the Water System as permitted hereunder.
12. Trustee Not Applicable.
13. Trustee Location Not Applicable.
14. Operation and Maintenance
Costs
Means the reasonable and necessary costs paid or
incurred by the Borrower for maintaining and operating
the Water System, determined in accordance with
generally accepted accounting principles, including but not limited to (a) all reasonable expenses of management and repair and other expenses necessary to maintain and preserve the Water System in good repair and working
order, and (b) all administrative costs of the Borrower that are charged directly or apportioned to the operation of the Water System, such as salaries and wages of
employees, overhead, taxes (if any) and insurance.
“Operation and Maintenance Costs” do not include (i)
administrative costs of the Obligations which the
Borrower is required to pay, (ii) payments of debt service on bonds, notes or other obligations issued by the
Borrower with respect to the Water System, (iii)
depreciation, replacement and obsolescence charges or
reserves therefor, and (iv) amortization of intangibles or other bookkeeping entries of a similar nature.
26.60 Schedule I-3
3740645.5 046297 CTR
No. Item WIFIA Loan Specific Term
PART B. Key Project Metrics
15. Project1 The project is the Santa Cruz Water Program Project (Phase 1), located at the Project Location, as described in further detail in Part D of Schedule II (Project
Details).
16. Project Location Santa Cruz County, California.
17. Projected Substantial
Completion Date
06/30/2030, as such date may be adjusted in accordance
with Part C of Schedule V (Reporting Requirements).
18. Development Default Date 06/30/2032.
19. NEPA Determination [Finding of No Significant Impact][Categorical Exclusion][Record of Decision] for the Project issued by EPA on [___], 2023 in accordance with NEPA.
20. [Reserved] Not Applicable.
PART C. Key Loan Metrics
21. Maximum Principal Amount Principal amount up to $127,730,000 (excluding interest that is capitalized in accordance with this Agreement).
22. WIFIA Interest Rate [___]% per annum.
23. Default Rate Interest rate equal to 10% per annum.
24. Interest Payment Date Each March 1 and September 1, beginning on the Debt Service Payment Commencement Date.
25. Capitalized Interest Period [Not Applicable] [The period from (and including) the first Disbursement to (but excluding) the date that is six (6) months prior to the first Payment Date, subject to
earlier termination as set forth in Section 8(a)(iii)
(Payment of WIFIA Debt Service)].
26. Interest Only Period [Not Applicable] [The period commencing from (and including) the Debt Service Payment Commencement
Date and ending on [___] (or on such earlier date as all 1 Note to Borrower: Please confirm that all Project components are part of the Water System.
26.61 Schedule I-4
3740645.5 046297 CTR
No. Item WIFIA Loan Specific Term
amounts due or to become due to the WIFIA Lender
hereunder have been irrevocably paid in full in cash)].
27. Principal Payment Date Each [March 1], beginning on [March 1], 20[__].
28. Final Maturity Date The earliest of (a) May 1, 2058, (b) the date on which the maturity of the WIFIA Loan and corresponding WIFIA
Bond have been accelerated or subject to mandatory
redemption or prepayment (as the case may be) prior to
maturity thereof; and (c) the Payment Date immediately
preceding the date that is thirty-five (35) years following the Substantial Completion Date.
29. [Reserved] Not Applicable.
PART D. Key Security Metrics
30. Lien priority Senior lien.
31. Springing lien Not Applicable.
32. Dedicated revenue source Net Revenues.
33. Pledged Collateral The WIFIA Loan (as evidenced by the WIFIA Bond and the WIFIA Loan Agreement) shall be secured by a first
pledge of and lien on all of the Net Revenues, on a parity with the pledge, which secures all other outstanding
Parity Obligations. In addition, the WIFIA Loan (as
evidenced by the WIFIA Bond and the WIFIA Loan
Agreement) shall be secured by a pledge of all of the
moneys in the Parity Obligation Sinking Funds and the
Parity Obligation Bond Service Funds, including all
amounts derived from the investment of such moneys,
on a parity with the pledge which secures all other
outstanding Parity Obligations.
“Parity Obligation Sinking Funds” means the Sinking
Funds, each as defined in the Parity Obligation
Documents and established and held under the Parity
Obligation Documents.
26.62 Schedule I-5
3740645.5 046297 CTR
No. Item WIFIA Loan Specific Term
“Parity Obligation Bond Service Funds” means the
WIFIA Bond Service Fund and the Bond Service Funds,
each as defined in the Parity Obligation Documents and
established and held under the Parity Obligation
Documents.
34. Water System Accounts The Water Fund, the Rate Stabilization Fund, the Parity Obligation Sinking Funds, the Parity Obligation Bond
Service Funds, and any other accounts established in
accordance with Section 14(h)(iii) (Water System
Accounts; Permitted Investments).
35. Water Fund The fund or account established and held by the Borrower for the deposit of Gross Revenues. Such fund
or account may be designated in any manner deemed
advisable by the Borrower, and may be maintained in
one or more funds or accounts.
36. WIFIA Bond Service Fund Means a separate debt service account established under Section 14(h)(iii) (Water System Accounts; Permitted
Investments) to be used for payments of WIFIA Debt
Service by the Borrower.
37. WIFIA Debt Service Reserve
Account
Not Applicable.
38. WIFIA Debt Service Reserve
Requirement
Not Applicable.
39. Rate Covenant The requirements and conditions set forth in Annex A hereto.
In addition, the Borrower shall observe and perform all of the covenants, agreements and conditions on its part required to be observed and performed under
Section 5.07 of the 2014 Bond Indenture, Section 5.07 of the 2019 Bond Indenture, Section 5.06 of the 2016
Installment Sale Agreement, the rate covenant set forth in Section B.3 of the 2020 SRF Construction Installment Sale Agreements and Section 7.14 of the 2021 Credit
Agreement.
40. Additional Bonds Test The requirements and conditions set forth in Annex B hereto.
In addition, the Borrower shall observe and perform all of the covenants, agreements and conditions on its part required to be observed and performed under
26.63 Schedule I-6
3740645.5 046297 CTR
No. Item WIFIA Loan Specific Term
Section 5.08 of the 2014 Bond Indenture, Section 5.08 of the 2019 Bond Indenture, Sections 2.11 and 2.16 of the
2016 Installment Sale Agreement, the limitations on the issuance of additional debt in Section B.4 of the 2020
SRF Construction Installment Sale Agreements and
Section 8.2 of the 2021 Credit Agreement.
41. Flow of Funds The requirements and conditions set forth in Annex C hereto.
42. Rate Stabilization Fund The fund by that name established and held by the Borrower under Section [_____] of this Agreement.
PART E. Other Key WIFIA Loan Documents
43. WIFIA Bond The bond issued and delivered by the Borrower in substantially the form of Exhibit A (Form of WIFIA
Bond).
44. [Reserved] Not Applicable.
45. Borrower Resolution Resolution No. [__________], adopted by the City Council of the Borrower on [__________], 2023,
authorizing the execution, delivery and performance by
the Borrower of this Agreement and the issuance of the
WIFIA Bond, and certain related actions by the
Borrower in connection with the issuance of the WIFIA
Loan..
46. WIFIA Term Sheet WIFIA Term Sheet, dated as of the Effective Date, between the Borrower and the WIFIA Lender.
47. Bond Law The City of Santa Cruz Water and Wastewater Enterprise Revenue Bond Law, constituting Chapter 16.26 of the
Santa Cruz Municipal Code, as in effect on the Effective Date or as thereafter amended in accordance with its
terms.
PART F. Fees
48. Servicing Set-Up Fee A servicing set-up fee equal to $[__________].
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49. Construction Period Servicing
Fee
An annual construction period servicing fee equal to
$[__________].
50. Initial Construction Period
Servicing Fee
The initial Construction Period Servicing Fee in a prorated amount equal to $[__________].2
51. Operating Period Servicing
Fee
An annual operating period servicing fee equal to
$[__________].
PART G. Borrower Related Notices
52. Borrower notice details [Name]
3 [Address]
Attention: [___]
Email: [___]
53. [Reserved] Not Applicable.
2 Note to Borrower: The pro-rated construction servicing fee amount assumes a current closing date in [month], [year]. 3 Note to Borrower: Borrower to provide.
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ANNEX A
RATE COVENANT
The following requirements and conditions contained below constitute the Rate Covenant referenced in Part C of Schedule I to this Agreement. Capitalized terms used in this Annex A shall have the respective meanings assigned to such terms in this Agreement or in Annex D to this Agreement.
Rates and Charges.
(a) Covenant Regarding Gross Revenues. The Borrower will fix, prescribe, revise and collect rates, fees and charges for the services and facilities furnished by the Water System during each Borrower Fiscal Year, which are at least sufficient, after making allowances for contingencies and error in the estimates, to pay the following amounts in the following order:
(i) All Operation and Maintenance Costs estimated by the Borrower to become due and payable in the Borrower Fiscal Year;
(ii) The principal of and interest on all outstanding Parity Obligations (including the WIFIA Loan) as they become due and payable during the Borrower Fiscal Year, without preference or priority;
(iii) All amounts, if any, required to restore the balance in the reserve funds established for any Parity Obligations to their required levels; and (iv) All payments required to meet any other obligations of the Borrower which are charges, liens, encumbrances upon, or which are otherwise payable from, the Gross Revenues or the Net Revenues during such Borrower Fiscal Year.
(b) Covenant Regarding Net Revenues. In addition to the covenant set forth in the preceding clause (a) of this Section, the Borrower will fix, prescribe, revise and collect rates, fees and charges for the services and facilities furnished by the Water System during each Borrower Fiscal Year which are sufficient to yield Net Revenues which are at least equal to 120% of the amount described in the preceding clause (a)(ii) for such Borrower Fiscal Year; provided, however, that in the event that the actual collection of Net Revenues based on such rates, fees and charges is insufficient to yield Net Revenues which meet such requirement, such event shall not constitute an Event of Default unless it has continued uncured for a period of at least 12 months.
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ANNEX B
ADDITIONAL BONDS TEST
The following requirements and conditions contained below constitute the Additional Bonds Test referenced in Part C of Schedule I to this Agreement. Capitalized terms used in this Annex B shall have the respective meanings assigned to such terms in this Agreement or in Annex D to this Agreement.
Issuance of Parity Obligations. The Borrower may issue Additional Parity Obligations from time to time in such principal amount as it determines, subject to the following conditions precedent:
(a) No Event of Default (or no event with respect to which notice has been given and which, once all notice of grace periods have passed, would constitute an Event of Default) has occurred and is continuing.
(b) The amount of Net Revenues, excluding amounts in the Rate Stabilization Fund, as shown by the books of the Borrower for the Base Year, plus at the option of the Borrower any Additional Revenues, are at least equal to 120% of the amount of Maximum Annual Debt Service on all outstanding Parity Obligations (including the WIFIA Loan) and any proposed Additional Parity Obligations.
(c) The issuance of such Parity Obligations shall comply with all conditions to the issuance thereof as set forth in the applicable provisions of the Parity Obligation Documents. (d) The Borrower shall deliver to the WIFIA Lender a Certificate of the Borrower certifying, and an opinion of Bond Counsel stating, that the conditions precedent to the issuance of such Parity Obligations set forth in the foregoing subsections (a), (b) and (c) of this Section have been satisfied.
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ANNEX C
FLOW OF FUNDS
The following requirements and conditions contained below constitute the Flow of Funds referenced in Part C of Schedule I to this Agreement. Capitalized terms used in this Annex C shall have the respective meanings assigned to such terms in this Agreement or in Annex D to this Agreement.
Receipt, Deposit and Application of Net Revenues. The Borrower has previously established the Water Fund, which it will continue to hold and maintain for the purposes and uses set forth in this Agreement. The Borrower shall deposit all Gross Revenues in the Water Fund promptly upon the receipt thereof, and shall apply amounts in the Water Fund solely for the uses and purposes set forth in this Agreement and in the Parity Obligation Documents.
The Borrower shall, first from the moneys in the Water Fund, pay all Operation and Maintenance Costs (including amounts reasonably required to be set aside in contingency reserves for Operation and Maintenance Costs, the payment of which is not then immediately required) as they become due and payable.
Thereafter, all Net Revenues in the Water Fund shall be withdrawn, used and applied by the Borrower at the following times, in the following order of priority and only for the purposes set forth below:
In addition to withdrawals required to pay principal of and interest on the outstanding Parity Obligations when due, the Borrower shall withdraw amounts on deposit in the Water Fund and apply such amounts at the times and for the purposes, and in the priority, as follows:
(a) Payment of WIFIA Debt Service and Parity Obligations. On or before each Payment Date, until the date the WIFIA Bond and all of the obligations of the Borrower under this Agreement (other than contingent indemnity obligations) are irrevocably paid in full in immediately available funds and the WIFIA Lender no longer has any commitment to make Disbursements to the Borrower, the Borrower shall withdraw from the Water Fund and pay to the WIFIA Lender an amount which is at least equal to the aggregate amount of principal of and interest coming due and payable on the WIFIA Loan on such Payment Date.
In addition, the Borrower shall withdraw from the Water Fund an amount of Net Revenues at such times as shall be required to pay the principal of and interest on any Parity Obligations in accordance with the provisions of the Parity Obligation Documents.
Payments of principal of and interest on the WIFIA Loan and any Parity Obligations shall be made without preference or priority.
(b) Restoration of Reserve Funds. After making the withdrawals and payments required by clause (a) above, the Borrower shall withdraw from the Water Fund an amount of Net Revenues at such times as shall be required by a Parity Obligation Document to restore any deficiency in a reserve fund established under such Parity Obligation Document; provided that such payment shall be made from available Net Revenues not required for other purposes of the Borrower, in such amounts and at such times as the Borrower shall determine.
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(c) Additional Payments; Other Payments. After making the withdrawals and payments required by clauses (a) and (b) above, the Borrower shall withdraw from the remaining moneys in the Water Fund an amount of Net Revenues at such times as shall be required to pay all other amounts when and as due and payable under this Agreement or under any Parity Obligation Document.
(d) Other Uses of Net Revenues Permitted. The Borrower shall manage, conserve and apply moneys in the Water Fund in such a manner that all deposits required to be made under clauses (a), (b) and (c) above and under the Parity Obligation Documents will be made at the times and in the amounts so required. Subject to the foregoing sentence, so long as no Event of Default has occurred and is continuing, the Borrower may at any time use and apply moneys in the Water Fund for any one or more of the following purposes:
(i) the payment of any Subordinated Obligations or any unsecured obligations; (ii) the acquisition and construction of extensions and betterments to the Water System;
(iii) the prepayment of any other obligations of the Borrower relating to the Water System; or
(iv) any other lawful purpose of the Borrower relating to the Water System; provided however, that no funds in the Water Fund may be applied to the payment of any Subordinated Obligations or any unsecured obligations in any Borrower Fiscal Year unless all deposits required to be made pursuant to clauses (a), (b) and (c) above will be made at the times and in the amounts so required; and provided further however, for the term of this Agreement, the Borrower shall not permit Net Revenues or other assets of the Water System, or any funds in any accounts held under this Agreement or in any other fund or account held by or on behalf of the Borrower for the benefit of the Water System, to be paid or transferred or otherwise applied for purposes other than ownership, operation, maintenance or financing of the Water System. For the avoidance of doubt, any remaining moneys in the Water Fund not necessary to make any of the payments required above or expended by the Borrower at any time for any purpose permitted by law relating to ownership, operation, maintenance or financing of the Water System as set forth above shall remain Net Revenues and remain subject to the pledge and lien provided in Section 7(a) (Security and Priority; Flow of Funds) of this Agreement.
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ANNEX D
DEFINITIONS
Capitalized terms used in Annex A, Annex B and Annex C to the WIFIA Loan Agreement shall have the respective meanings assigned to such terms in the WIFIA Loan Agreement or this Annex D.
“Additional Revenues” means, with respect to the issuance of any Parity Obligations, any or all of the following amounts:
(a) An allowance for Net Revenues from any additions or improvements to or extensions of the Water System to be made by the Borrower during the 36-month period following the issuance of such Parity Obligations, in an amount equal to 100% of the estimated additional average annual Net Revenues to be derived from all properties which are improved with a structure the construction of which has been completed prior to the date of issuance of such Parity Obligations and to which service will be provided by such additions, improvements and extensions, all as shown by the certificate or opinion of a Financial Consultant. (b) With respect to the calculations made pursuant to the Additional Bonds Test, an allowance for Net Revenues arising from any increase in the charges made for service from the Water System which has become effective prior to the incurring of such Parity Obligations, in an amount equal to the total amount by which the Net Revenues would have been increased if such increase in charges had been in effect during the whole of the Base Year, all as shown by the certificate or opinion of a Financial Consultant.
(c) With respect to the calculations made pursuant to the Additional Bonds Test, an allowance for Net Revenues arising from any increase in the charges made for service from the Water System which has become effective prior to the final Borrower Fiscal Year for which such calculations are made, in an amount equal to the total amount by which the Net Revenues would have been increased if such increase in charges had been in effect during the whole of such Borrower Fiscal Year, all as shown by the certificate or opinion of a Financial Consultant. “Base Year” means, for purposes of the Additional Bonds Test, either (a) the most recent completed Borrower Fiscal Year for which audited financial statements of the Borrower are available, or (b) any more recent Borrower Fiscal Year or other 12-month period selected by the Borrower, provided that the chief financial officer of the Borrower certifies that the financial information shown for such Borrower Fiscal Year or other 12-month period is based on unaudited actual records of the Borrower which are accurate and complete to the best knowledge and belief of the chief financial officer.
“Bond Counsel” means (a) Jones Hall, a Professional Law Corporation, or (b) any other attorney or firm of attorneys appointed by or acceptable to the City of nationally-recognized experience in the issuance or incurrence of obligations substantially similar to the WIFIA Loan (as evidenced by the WIFIA Bond and the WIFIA Loan Agreement). “Certificate of the Borrower” means a certificate in writing signed by the City Manager, the Director of Finance or any other officer of the Borrower duly authorized by the City Council for that purpose.
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“Debt Service” means, for any Borrower Fiscal Year, the sum of interest, and principal due and payable under the WIFIA Loan Agreement during such Borrower Fiscal Year, plus any debt service for the Parity Obligations as defined in the Parity Obligation Documents for such Borrower Fiscal Year.
“Financial Consultant” means any consultant or firm of such consultants appointed by the Borrower and who, or each of whom: (a) is judged by the Borrower to have experience in matters relating to the financing of water systems; (b) is in fact independent and not under domination of the Borrower; (c) does not have any substantial interest, direct or indirect, with the Borrower; and (d) is not connected with the Borrower as an officer or employee of the Borrower, but who may be regularly retained to make reports to the Borrower. “Mandatory Water Conservation Program” means a water conservation program adopted by the City Council of the Borrower which imposes mandatory levels of water consumption on customers and which enforces such mandatory levels with increased water rates, termination of service or other penalties.
“Maximum Annual Debt Service” means, as of the date of any calculation, the maximum sum obtained for the current or any future Borrower Fiscal Year so long as any of the Obligations remain Outstanding by totaling the following amounts for such Borrower Fiscal Year:
(a) the aggregate amount of principal of and interest on the WIFIA Bond coming due and payable in such Borrower Fiscal Year; and
(b) the aggregate amount of principal of and interest on all outstanding Parity Obligations coming due and payable by their terms in such Borrower Fiscal Year.
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SCHEDULE II
PROJECT DETAILS
PART A. Project Budget. 1
PART B. Construction Schedule.
Projected Substantial Completion Date: June 30, 2030
PROJECT ELEMENT DESIGN
COMPLETION
CONSTRUCTION
START
CONSTRUCTION
END
1 To be provided by WIFIA Underwriter (in consultation with WIFIA Engineer and Borrower).
SOURCES OF FUNDS AMOUNT ($ USD) PERCENTAGE (%)
[___]
Total Sources of Funds
USES OF FUNDS AMOUNT ($ USD) PERCENTAGE (%)
[___]
Total Uses of Funds
Total Eligible Project Costs
Total Project Costs
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PART C. Existing Construction Contracts.2
Contract Name Effective
Date
Amount Parties Description
PART D. Project Description.
The Project is the Borrower’s [___], located in [___]. The Project will [short description of the major elements of the Project and the Project’s objectives].
The Project consists of approximately [___] [sub-projects][components], set out in the table below, that can be categorized into the following groups: [___]. [Sub-Project][Project
Component]
Name / Description
[1.] [___]
[2.] [___]
[3.] [___]
2 Note to Borrower: Borrower to provide.
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SCHEDULE III
BORROWER DISCLOSURES1
PART A. Existing Indebtedness.
1. Parity Obligations
Agreement/Series Outstanding
Principal as of
Effective Date
1. City of Santa Cruz 2014 Water Revenue Refunding Bonds $[__________]
2. Installment Sale Agreement, dated as of August 1, 2016, by and between the Borrower and the California Infrastructure and Economic Development Bank, Agreement No. ISRF
17-115
$[__________]
3. City of Santa Cruz 2019 Water Revenue Bonds (Green
Bonds)
$[__________]
4. Construction Installment Sale Agreement State Revolving Fund Loan (Project No. 4410010-001C), by and between the Borrower and the California State Water Resources Control Board
$[__________]
5. Construction Installment Sale Agreement State Revolving Fund Loan (Project No. 44100100-002C), by and between
the Borrower and the California State Water Resources
Control Board
$[__________]
2. Subordinated Obligations
Agreement/Series Outstanding
Principal as of
Effective Date
1. Credit Agreement, dated as of June 15, 2021, between the Borrower and Bank of America, N.A.
$[__________]
2. PART B. Litigation Disclosure.
[___]2
1 Note to Borrower: Borrower to complete.
2 Include “None” if no litigation disclosures are necessary.
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No. Parties Date Initiated Description / Status Venue
PART C. Environmental Matter Disclosure.
[___]3
3 Include “None” if no environmental matter disclosures are necessary.
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SCHEDULE IV
REQUISITION PROCEDURES
This Schedule IV sets out the procedures which the Borrower agrees to follow in submitting Requisitions for any Disbursement of the WIFIA Loan. The Borrower expressly agrees to the terms hereof, and further agrees that (i) the rights of the WIFIA Lender contained herein are in addition to (and not in lieu of) any other rights or remedies available to the WIFIA Lender under the WIFIA Loan Documents, and (ii) nothing contained herein shall be construed to limit the rights of the WIFIA Lender to take actions including administrative enforcement action and actions for breach of contract against the Borrower if it fails to carry out its obligations under this Agreement during the term hereof.
PART A. General Requirements.
(a) Manner of Request: All requests by the Borrower for a Disbursement shall be made in writing by electronic submission to the WIFIA Lender, in accordance with Section 31 (Notices) of this Agreement.
(b) Required Documentation: Any request by the Borrower should include the submission of:
(i) a Requisition, in the form attached as Exhibit D (Form of Requisition), completed and executed by the Borrower’s Authorized Representative, and otherwise in form and substance satisfactory to the WIFIA Lender; and
(ii) all Eligible Project Costs Documentation that has not otherwise been provided to the WIFIA Lender in accordance with Part C of Schedule V (Reporting Requirements) of this Agreement.
(c) Timing: Any request for a Disbursement must be received by the WIFIA Lender and the Servicer (if any) at or before 5:00 P.M. (Eastern Time) on either:
(i) the first (1st) Business Day of a calendar month in order to obtain the requested Disbursement by the fifteenth (15th) day of such calendar month; (ii) the fifteenth (15th) day of a calendar month, in order to obtain the requested Disbursement by the first (1st) day of the immediately following calendar month; provided, that, (x) if any such day is not a Business Day, the Disbursement request or payment (as the case may be) shall be made by the next succeeding Business Day; (y) the Borrower shall not request to receive more than one (1) Disbursement per month or every thirty (30) days (whichever is longer); and (z) no Disbursements shall be made after the Final Disbursement Date.
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PART B. WIFIA Lender Review Process.
(a) The WIFIA Lender shall review the Requisition and the Eligible Project Costs Documentation for compliance with WIFIA Disbursement requirements. (b) If a Requisition is approved by the WIFIA Lender, the WIFIA Lender will notify the Borrower of such approval and of the amount so approved. A Requisition containing an apparent mathematical error will be corrected by the WIFIA Lender, after telephonic or email notification to the Borrower, and will thereafter be treated as if submitted in the corrected amount.
If the amount requested for Disbursement in the Requisition exceeds the available balance of the WIFIA Loan proceeds remaining to be disbursed, the Disbursement request will be treated as if submitted in the amount of the balance so remaining, and the WIFIA Lender will so notify the Borrower.
(c) The WIFIA Lender shall be entitled to withhold approval (in whole or in part) of any pending or subsequent requests for the Disbursement of WIFIA Loan proceeds if: (i) a Default or an Event of Default shall have occurred and be continuing or (ii) the Borrower (1) knowingly takes any action, or omits to take any action, amounting to fraud or violation of any applicable law, in connection with the transactions contemplated hereby; (2) prevents or materially impairs the ability of the WIFIA Lender to monitor compliance by the Borrower with applicable law pertaining to the Project or with the terms and conditions of the WIFIA Loan Agreement; (3) fails to observe or comply with any applicable law, or any term or condition of this Agreement; (4) fails to satisfy the conditions set forth in Section 4 (Disbursement Conditions) and Section 11(b) (Conditions Precedent to Disbursements) of the WIFIA Loan Agreement; or (5) fails to deliver Eligible Project Costs Documentation satisfactory to the WIFIA Lender at the times and in the manner specified by this Agreement; provided, that in such case of sub-clause (5) above, the WIFIA Lender may, in its sole discretion, partially approve a Requisition in respect of any amounts for which adequate Eligible Project Costs Documentation has been provided and may, in its sole discretion, disburse in respect of such properly documented amounts. The WIFIA Lender will notify the Borrower of any withholding, and the reasons therefor. (d) A Requisition may be rejected in whole or in part by the WIFIA Lender if it is: (i) submitted without signature; (ii) submitted under signature of a Person other than a Borrower’s Authorized Representative; (iii) submitted after prior Disbursement of all proceeds of the WIFIA Loan; or (iv) submitted without adequate Eligible Project Costs Documentation. The WIFIA Lender will notify the Borrower of any Requisition so rejected, and the reasons therefor. Any Requisition rejected for the reasons specified under this paragraph (d) must be resubmitted in proper form in order to be considered for approval.
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SCHEDULE V
REPORTING REQUIREMENTS
PART A. Updated Financial Model/Plan.
The Borrower shall provide to the WIFIA Lender, not later than one hundred eighty (180) days after the end of each Borrower Fiscal Year, an Updated Financial Model/Plan. The Updated Financial Model/Plan shall reflect the Borrower’s reasonable expectations, using assumptions that the Borrower believes to be reasonable, and include: (a) the Borrower’s capital improvement plan, major maintenance plan, projected rates and charges, projected debt outstanding and annual debt service, projected Revenues and projected Operating Expenses for a reasonable projection period consistent with the Borrower’s operating and financial planning and demonstrating that the Borrower has developed and identified adequate revenues to implement a plan for operating, maintaining, and repairing the Project; (b) evidence of compliance with the Rate Covenant for the most recent Borrower Fiscal Year for which the Borrower’s Financial Statements are available and the projected debt service coverage ratios (including projected Rate Covenant coverages) through the Forecast Period; and (c) a written narrative identifying any material changes to the underlying assumptions from the previous Updated Financial Model/Plan.
PART B. Annual Financial Statements.
The Borrower shall deliver to the WIFIA Lender, as soon as available, but no later than one hundred eighty (180) days after the end of each Borrower Fiscal Year, a copy of the audited income statement and balance sheet of the Borrower as of the end of such Borrower Fiscal Year and the related audited statements of operations and of cash flow of the Borrower for such Borrower Fiscal Year, (a) setting forth in each case in comparative form the figures for the previous fiscal year, (b) certified without qualification or exception, or qualification as to the scope of the audit, by an independent public accounting firm selected by the Borrower and (c) which shall be complete and correct in all material respects and shall be prepared in reasonable detail and in accordance with GAAP applied consistently throughout the periods reflected therein (except, with respect to the annual financial statements, for changes approved or required by the independent public accountants certifying such statements and disclosed therein).
PART C. Construction Monitoring.
(a) The WIFIA Lender shall have the right in its sole discretion to monitor (or direct its agents to monitor) the development of the Project, including environmental compliance, design, and construction of the Project. The Borrower shall be responsible for administering construction oversight of the Project in accordance with applicable federal, state and local governmental requirements. The Borrower agrees to cooperate in good faith with the WIFIA Lender in the conduct of such monitoring by promptly providing the WIFIA Lender with such reports, documentation or other information as shall be requested by the WIFIA Lender or its agents, including any independent engineer reports, documentation or information. (b) Construction Monitoring Report. During the period beginning from the first quarter following bid advertisement of the first Construction Contract for the Project, through and
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until Substantial Completion of the Project, the Borrower shall furnish to the WIFIA Lender, on a quarterly basis, the Construction Monitoring Report. The report shall be delivered to the WIFIA Lender within thirty (30) days of the end of each such quarter (or if such day is not a Business Day, on the next following Business Day). If the then-current projection for the Substantial Completion Date is a date different than the Projected Substantial Completion Date, the Borrower shall provide in the Construction Monitoring Report a description in reasonable detail to the reasonable satisfaction of the WIFIA Lender of the reasons for such projected delay or difference.
The Projected Substantial Completion Date shall automatically be adjusted to the new date specified by the Borrower in the Construction Monitoring Report unless the WIFIA Lender objects to the adjustment in writing to the Borrower within sixty (60) days following receipt of such Construction Monitoring Report on the basis that such report does not demonstrate the matters specified in this paragraph.
(c) Quarterly Certification of Eligible Project Costs. If requested by the WIFIA Lender, on a basis not more frequently than quarterly, the Borrower shall submit to the WIFIA Lender, concurrently with the delivery of the Construction Monitoring Report, a certificate, in the form of Exhibit E (Form of Certification of Eligible Project Costs Documentation), signed by the Borrower’s Authorized Representative, and attaching Eligible Project Costs Documentation as applicable. If there are no applicable Eligible Project Costs for such quarter, the Borrower may notify the WIFIA Lender by written confirmation of the same by email in accordance with Section 31 (Notices) of the WIFIA Loan Agreement. Within sixty (60) days following the receipt of such certificate and accompanying Eligible Project Costs Documentation (if applicable), the WIFIA Lender shall notify the Borrower confirming (i) which Eligible Project Costs incurred by the Borrower set forth in the certification have been approved or denied (and, if denied, the reasons therefor) and (ii) the cumulative amount of Eligible Project Costs that have been approved as of the date of such notice. Any such approved amounts of Eligible Project Costs shall then be deemed to be available for Disbursement at such time as the Borrower submits a Requisition in respect of such approved amounts in accordance with Section 4 (Disbursement Conditions). (d) Final Specifications. The Borrower shall deliver to the WIFIA Lender, prior to bid advertisement for the Project (including each sub-project or component, if applicable), a copy of the final specifications relating to the development and construction of the Project (or such sub-project or component, as the case may be), demonstrating compliance with all applicable federal requirements and including a summary of the scope of work thereunder.
PART D. Public Benefits Report.
The Borrower shall deliver to the WIFIA Lender the Public Benefits Report (a) no later than thirty (30) days prior to the Effective Date, (b) within ninety (90) days following the Substantial Completion Date and (c) within ninety (90) days following the fifth (5th) anniversary of the Substantial Completion Date. The Borrower agrees that information described in the Public Benefits Report may be made publicly available by the WIFIA Lender at its discretion.
PART E. Notices.
(a) The Borrower shall, within fifteen (15) days (or such other time as may be specified below) after the Borrower learns of the occurrence, give the WIFIA Lender notice of any
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of the following events or receipt of any of the following notices, as applicable, setting forth details of such event:
(i) Substantial Completion: the occurrence of Substantial Completion, such notice to be provided in the form set forth in Exhibit G (Form of Certificate of Substantial Completion);
(iii) Defaults; Events of Default: any Default or Event of Default; (iv) Litigation: (1) the filing of any litigation, suit or action, or the commencement of any proceeding, against the Borrower before any arbitrator, Governmental Authority, alternative dispute resolution body, or other neutral third-party, that could reasonably be expected to have a Material Adverse Effect, and (2) any final, non-appealable judgment related to the Pledged Collateral that could reasonably be expected to result in the impairment of (A) the Borrower’s ability to comply with any of its payment obligations under the WIFIA Bond or this Agreement or (B) the existence, priority or perfection (if applicable) of the WIFIA Lender’s security interest in the Pledged Collateral;
(v) Delayed Governmental Approvals: any failure to receive or delay in receiving any Governmental Approval or making any required filing, notice, recordation or other demonstration to or with a Governmental Authority, in each case to the extent such failure or delay will or could reasonably be expected to result in a delay to any major milestone date (including the Projected Substantial Completion Date) set forth in the Construction Schedule, together with a written explanation of the reasons for such failure or delay and the Borrower’s plans to remedy or mitigate the effects of such failure or delay; (vi) Environmental Notices: any material notice of violation related to the Project or any material change to the Project that could reasonably be expected to affect the NEPA Determination;
(vii) Amendments: except as otherwise agreed by the WIFIA Lender in writing, copies of any fully executed amendments, modifications, replacements or supplements to any Related Document; provided, that such notice may be accomplished through the posting of the relevant documents on EMMA under the WIFIA CUSIP Number with a reference to the relevant WIFIA provision of this Agreement; (viii) Related Document Defaults: any material breach or default or event of default on the part of the Borrower or any other party under any Related Document; provided, that such notice may be accomplished through the posting of the relevant documents on EMMA under the WIFIA CUSIP Number with a reference to the relevant WIFIA provision of this Agreement;
(ix) Uncontrollable Force: the occurrence of any Uncontrollable Force that could reasonably be expected to materially and adversely affect the Project; (x) Ratings Changes: any change in the rating assigned to the WIFIA Loan or any Obligations, in each case by any Nationally Recognized Rating Agency that
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3740645.5 046297 CTR
has provided a public rating on such indebtedness, and any notices, reports or other written materials (other than those that are ministerial in nature) received from any such rating agencies; provided, that such notice may be accomplished through the posting of the relevant documents on EMMA under the WIFIA CUSIP Number with a reference to the relevant WIFIA provision of this Agreement;
(xi) 2 C.F.R. § 180.350 Notices: any notification required pursuant to 2 C.F.R. § 180.350, whether attributable to a failure by the Borrower to disclose information previously required to have been disclosed or due to the Borrower or any of its principals meeting any of the criteria set forth in 2 C.F.R. § 180.335; (xii) Issuance of Obligations: copies of any final issuing instrument (together with any continuing disclosure documents, ordinances, official statement, certifications or cash flow projections in connection therewith), prepared in connection with the incurrence of any Permitted Debt (including any Additional Obligations), together with a confirmation by the Borrower that such additional indebtedness satisfies the applicable requirements under the definition of “Permitted Debt”; provided, that such notice may be accomplished through the posting of the relevant documents on EMMA under the WIFIA CUSIP Number with a reference to the relevant WIFIA provision of this Agreement;
(xiii) Postings on EMMA: the posting of any document on EMMA in accordance with the requirements of any continuing disclosure agreement or similar document with respect to any Outstanding Obligations relating to annual financial information and operating data and the reporting of significant events; provided, that such notice may be accomplished through the posting of the relevant document on EMMA under the WIFIA CUSIP Number with a reference to the relevant WIFIA provision of this Agreement;
(xiv) SAM / UEI: any change in the Borrower’s SAM registration status (including any exclusions, expiration or inactive registration) or UEI Number (including any expiration or change in effectiveness); provided, that such notice may be accomplished through the posting of the relevant document on EMMA under the WIFIA CUSIP Number with a reference to the relevant WIFIA provision of this Agreement; (xv) Reorganization, Consolidation or Merger: the occurrence of any reorganization, consolidation, or merger involving the Borrower, together with the agreements and documents authorizing the reorganization, consolidation or merger; (xvi) Fiscal Year: any change to or adoption of any fiscal year other than the Initial Borrower Fiscal Year; provided, that such notice may be accomplished through the posting of the relevant document on EMMA under the WIFIA CUSIP Number with a reference to the relevant WIFIA provision of this Agreement; and (xvii) Other Adverse Events: the occurrence of any other event or condition, including without limitation any notice of breach from a contract counterparty
26.81 Schedule V-5
3740645.5 046297 CTR
or any holder of any Obligations, that could reasonably be expected to result in a Material Adverse Effect.
(b) The Borrower shall, at any time while the WIFIA Loan remains Outstanding, promptly deliver to the WIFIA Lender such additional information regarding the business, financial, legal or organizational affairs of the Borrower or regarding the Water System, the Project or the Water System Revenues as the WIFIA Lender may from time to time reasonably request.
The Borrower agrees that the delivery of any documents or information under and pursuant to this Agreement shall not be construed as compliance with, or affect in any manner, any obligations of the Borrower under any other contracts, agreements, decrees, Governmental Approvals, or other documents with EPA (other than the WIFIA Loan Documents) or the Federal Government.
26.82 Schedule VI-1
3740645.5 046297 CTR
SCHEDULE VI
WIFIA LOAN AMORTIZATION SCHEDULE1
[To be attached with final interest rate on the Effective Date] 1 WIFIA Underwriter to work with Borrower to provide an initial amortization schedule that is shared with the transaction team prior to closing. The final schedule will be finalized on the day of closing to account for the final interest rate.
26.83 Exhibit A-1
3740645.5 046297 CTR
EXHIBIT A
FORM OF WIFIA BOND
CITY OF SANTA CRUZ
SANTA CRUZ WATER PROGRAM PROJECT (PHASE 1)
(WIFIA ID – N[__________])
WIFIA BOND
INTEREST RATE: MATURITY
DATE:
ISSUE DATE: CUSIP:
[___]%, subject to the
Default Rate (as
defined and in
accordance with the
WIFIA Loan
Agreement)
May 1, 2058, subject
to adjustment as set
forth in the WIFIA
Loan Agreement
[___] [___]
REGISTERED
OWNER:
UNITED STATES ENVIRONMENTAL PROTECTION
AGENCY, acting by and through the Administrator of the
Environmental Protection Agency
MAXIMUM
PRINCIPAL
AMOUNT:
$127,730,000 (excluding capitalized interest, if any)
The CITY OF SANTA CRUZ, a charter city and municipal corporation duly organized and existing under the Constitution and the laws of the State of California (the “Borrower”) for value received, hereby promises to pay (but only out of the Net Revenues and other assets pledged therefor as hereinafter mentioned) to the UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, acting by and through the Administrator of the United States Environmental Protection Agency, or its assigns (the “WIFIA Lender”), the lesser of (x) the Maximum Principal Amount set forth above and (y) the aggregate unpaid principal amount of all Disbursements made by the WIFIA Lender (such lesser amount, together with any interest that is capitalized and added to principal in accordance with the provisions of the WIFIA Loan Agreement (as defined below), being hereinafter referred to as the “Outstanding Principal Sum”), together with accrued and unpaid interest (including, if applicable, interest at the Default Rate, as defined in the WIFIA Loan Agreement) on the Outstanding Principal Sum and all fees, costs and other amounts payable in connection therewith, all as more fully described in that certain WIFIA Loan Agreement, dated as of [__________], 2023, between the WIFIA Lender and the Borrower (the “WIFIA Loan Agreement”). All capitalized terms used in this WIFIA Bond and not defined herein shall have the meanings set forth in the WIFIA Loan Agreement.
26.84 Exhibit A-2
3740645.5 046297 CTR
The WIFIA Debt Service hereof shall be payable in the amounts, manner and on the Payment Dates as set forth in the WIFIA Loan Amortization Schedule in accordance with the WIFIA Loan Agreement (which WIFIA Loan Amortization Schedule may be revised from time to time in accordance with the WIFIA Loan Agreement), until paid in full (which Loan Amortization Schedule, as modified from time to time in accordance with the terms of the WIFIA Loan Agreement, is incorporated in and is a part of this WIFIA Bond). The WIFIA Lender is hereby authorized to modify the WIFIA Loan Amortization Schedule from time to time to reflect the amount of each Disbursement made thereunder and the date and amount of principal or interest paid by the Borrower thereunder and otherwise in accordance with the terms of the WIFIA Loan Agreement. Absent manifest error, the WIFIA Lender’s determination of such matters as set forth on the WIFIA Loan Amortization Schedule to the WIFIA Loan Agreement shall be conclusive evidence thereof; provided, however, that neither the failure to make any such recordation nor any error in such recordation shall affect in any manner the Borrower’s obligations hereunder or under any other WIFIA Loan Document.
Payments hereon are to be made in accordance with Section 8(b) (Manner of Payment) and Section 31 (Notices) of the WIFIA Loan Agreement as the same become due. Principal of and interest on this WIFIA Bond shall be made in Dollars and in immediately available funds (without counterclaim, offset or deduction). Any payment in respect of this WIFIA Bond shall be treated as a payment in respect of the WIFIA Loan and any prepayment of principal in respect of the WIFIA Loan shall be treated as a redemption in respect of this WIFIA Bond. If the Final Maturity Date is adjusted in accordance with the WIFIA Loan Agreement, the due date of this WIFIA Bond shall be deemed to be amended to change the due date to such revised Final Maturity Date without any further action required on the part of the Borrower or the WIFIA Lender and such amendment shall in no way amend, modify or affect the other provisions of this WIFIA Bond without the prior written agreement of the WIFIA Lender. Any such amendment shall be reflected in a revised Loan Amortization Schedule.
This WIFIA Bond is authorized under Resolution No. [__________] adopted by the City Council of the Borrower on [__________], 2023 (the “Borrower Resolution”), and the provisions of the City of Santa Cruz Water and Wastewater Enterprise Revenue Bond Law, constituting Chapter 16.26 of the Santa Cruz Municipal Code (the “Bond Law”). This WIFIA Bond has been executed under and pursuant to the WIFIA Loan Documents and is issued to evidence the obligation of the Borrower under the WIFIA Loan Documents to repay the loan made by the WIFIA Lender and any other payments of any kind required to be paid by the Borrower under the WIFIA Loan Agreement or the other WIFIA Loan Documents referred to therein. Reference is made to the WIFIA Loan Agreement for all details relating to the Borrower’s obligations hereunder.
Payment of the obligations of the Borrower under this WIFIA Bond is secured pursuant to the WIFIA Loan Agreement. The WIFIA Loan (as evidenced by this WIFIA Bond and the WIFIA Loan Agreement) is a Parity Obligation entitled to all of the benefits of a Parity Obligation under the WIFIA Loan Agreement and the Parity Obligation Documents. The Lien on the Pledged Collateral securing the WIFIA Loan (as evidenced by this WIFIA Bond and the WIFIA Loan Agreement) for the benefit of the WIFIA Lender is (i) on a parity in right of payment and right of security to the Lien on the Pledged Collateral in favor of the Parity Obligations and (b) senior in
26.85 Exhibit A-3
3740645.5 046297 CTR
right of payment and right of security to the Lien on the Pledged Collateral in favor of the Subordinated Obligations.
This WIFIA Bond may be prepaid at the option of the Borrower in whole or in part (and, if in part, the principal installments and amounts thereof to be prepaid are to be determined in accordance with the WIFIA Loan Agreement; provided, however, such prepayments shall be in principal amounts of at least $1,000,000 or any integral multiple of $1 in excess thereof), without penalty or premium, and otherwise in accordance with the WIFIA Loan Agreement.
Any delay on the part of the WIFIA Lender in exercising any right hereunder shall not operate as a waiver of any such right, and any waiver granted with respect to one default shall not operate as a waiver in the event of any subsequent default.
It is hereby certified and recited that any and all things, conditions and acts required to exist, to have happened and to have been performed precedent to and in the issuance of this WIFIA Bond do exist, have happened and have been performed in due time, form and manner as required by the Bond Law, and by the laws of the State of California, and that the amount of this WIFIA Bond, together with all other indebtedness of the Borrower, does not exceed any limit prescribed by the Bond Law and is not in excess of the amount of Bonds permitted to be issued under the Borrower Resolution. This WIFIA Bond is issued with the intent that the federal laws of the United States of America shall govern its construction to the extent such federal laws are applicable and the internal laws of the State shall govern its construction to the extent such federal laws are not applicable.
IN WITNESS WHEREOF, the City of Santa Cruz has caused this WIFIA Bond to be executed in its name and on its behalf by the facsimile signature of its Mayor and attested to by the facsimile signature of its City Clerk, all as of the Issue Date stated above.
CITY OF SANTA CRUZ
By:______________________________
Name:
Title: Mayor
ATTEST:
By:____________________
Name:
Title: City Clerk
26.86 Exhibit A-4
3740645.5 046297 CTR
CERTIFICATE OF AUTHENTICATION
This WIFIA Bond is the WIFIA Bond described in the within-mentioned WIFIA Loan Agreement.
[NAME OF AUTHENTICATION AGENT]
By: ________________________________
Authorized Signatory
26.87 Exhibit A-5
3740645.5 046297 CTR
(FORM OF ASSIGNMENT)
For value received the undersigned hereby sells, assigns and transfers unto ___________________________________ whose address and social security or other tax identifying number is _________________________, the within-mentioned Bond and hereby irrevocably constitute(s) and appoint(s) _______________________________________ attorney, to transfer the same on the registration books of the Trustee with full power of substitution in the premises.
Dated: ________________
Signature Guaranteed:
Note: Signature(s) must be guaranteed by an eligible
guarantor institution meeting the requirements of
membership or participation in the Security Transfer
Agent Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined in
substitution for STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Note: The signature(s) on this Assignment must
correspond with the name(s) as written on the face of the within Bond in every particular without alteration or
enlargement or any change whatsoever.
26.88 Exhibit B-1
3740645.5 046297 CTR
EXHIBIT B
FORM OF CLOSING CERTIFICATE
Reference is made to that certain WIFIA Loan Agreement, dated as of [__________], 2023 (the “WIFIA Loan Agreement”), by and among the City of Santa Cruz (the “Borrower”) and the United States Environmental Protection Agency, acting by and through the Administrator (the “WIFIA Lender”). Capitalized terms used in this certificate and not defined shall have the respective meanings ascribed to such terms in the WIFIA Loan Agreement.
In connection with Section 11(a) (Conditions Precedent to Effectiveness) of the WIFIA Loan Agreement, the undersigned, as the Borrower’s Authorized Representative, does hereby certify on behalf of the Borrower and not in his/her personal capacity, as of the date hereof:
(a) pursuant to Section 11(a)(v) of the WIFIA Loan Agreement, attached hereto as Annex A is an incumbency certificate that lists all persons, together with their positions and specimen signatures, who are duly authorized by the Borrower to execute the WIFIA Loan Documents to which the Borrower is or will be a party, and who have been appointed as a Borrower’s Authorized Representative in accordance with Section 21 (Borrower’s Authorized Representative) of the WIFIA Loan Agreement;
(b) pursuant to Section 11(a)(ii) of the WIFIA Loan Agreement, the Borrower has delivered to the WIFIA Lender copies of (i) the Parity Obligation Documents and (ii) any Related Document with respect to which all or a portion of the proceeds are or will be applied to fund all or any portion of Total Project Costs, in each case that has been entered into on or prior to the Effective Date, and each such document is complete, fully executed, and in full force and effect, and all conditions contained in the Related Documents that are necessary to the closing of the WIFIA transaction contemplated hereby (if any) have been fulfilled;
(c) pursuant to Section 11(a)(ii) of the WIFIA Loan Agreement, the Borrower has delivered to the WIFIA Lender a copy of the Borrower Resolution, a true, correct and complete copy of which is included in the closing transcripts for the WIFIA Loan, which Borrower Resolution has been duly adopted by the City Council of the Borrower and is in full force and effect;
(d) pursuant to Section 11(a)(v)(A) of the WIFIA Loan Agreement, (i) the Maximum Principal Amount of the WIFIA Loan, together with the amount of any other credit assistance provided under the Act to the Borrower, does not exceed forty-nine percent (49%) of reasonably anticipated Eligible Project Costs; (ii) the aggregate amount of Eligible Project Costs previously incurred prior to the Effective Date does not exceed fifty-one percent (51%) of Eligible Project Costs; and (iii) the total federal assistance provided to the Project, including the Maximum Principal Amount of the WIFIA Loan, does not exceed eighty percent (80%) of Total Project Costs;
26.89 Exhibit B-2
3740645.5 046297 CTR
(e) pursuant to Section 11(a)(v)(B) of the WIFIA Loan Agreement, the Borrower is in compliance with NEPA and any applicable federal, state or local environmental review and approval requirements with respect to the Project; (f) pursuant to Section 11(a)(v)(C) of the WIFIA Loan Agreement, the Borrower has (i) obtained a FEIN, as evidenced by the Borrower’s W-9 which is included in the closing transcripts for the WIFIA Loan, and a UEI Number, in each case as set forth on Part A of Schedule I (WIFIA Loan Specific Terms) to the WIFIA Loan Agreement, and (ii) registered with SAM, and obtained confirmation of active SAM registration status, which confirmation is included in the closing transcripts for the WIFIA Loan;
(g) pursuant to Section 11(a)(v)(D) of the WIFIA Loan Agreement, the Borrower has obtained the WIFIA CUSIP Number, as set forth on Part A of Schedule I (WIFIA Loan Specific Terms) to the WIFIA Loan Agreement, and which confirmation is included in the closing transcripts for the WIFIA Loan; (h) pursuant to Section 11(a)(v)(E) of the WIFIA Loan Agreement, the representations and warranties of the Borrower set forth in the WIFIA Loan Agreement and in each other WIFIA Loan Document to which the Borrower is a party are true and correct on and as of the date hereof, except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties were true and correct as of such earlier date; (i) pursuant to Section 11(a)(v)(F) of the WIFIA Loan Agreement, no Material Adverse Effect, or any event or condition that could reasonably be expected to have a Material Adverse Effect, has occurred or arisen since the date of the Application; (j) pursuant to Section 11(a)(v)(G) of the WIFIA Loan Agreement, the Borrower has satisfied the conditions precedent to the incurrence of the WIFIA Loan in accordance with the Parity Obligation Documents and has provided the WIFIA Lender with a certificate setting forth the calculations required by the Parity Obligation Documents for the incurrence of the WIFIA Loan as a Parity Obligation and evidencing compliance therewith; and
(k) pursuant to Section 11(a)(vi) of the WIFIA Loan Agreement, the rating letter delivered to the WIFIA Lender pursuant to such Section 11(a)(vi) has not been reduced, withdrawn or suspended as of the Effective Date.
IN WITNESS WHEREOF, the undersigned has executed this certificate as of the date first mentioned above.
CITY OF SANTA CRUZ,
by its authorized representative
By: _______________________________
26.90 Exhibit B-3
3740645.5 046297 CTR
Name:
Title:
26.91 Exhibit B-4
3740645.5 046297 CTR
ANNEX A TO EXHIBIT B
INCUMBENCY CERTIFICATE
The undersigned certifies that he/she is the [City Clerk] of the City of Santa Cruz, a charter city and municipal corporation duly organized and existing under the Constitution and laws of the State of California (the “Borrower”), and as such he/she is authorized to execute this certificate and further certifies that the following persons have been elected or appointed, are qualified, and are now acting as officers or authorized persons of the Borrower in the capacity or capacities indicated below, and that the signatures set forth opposite their respective names are their true and genuine signatures. He/She further certifies that any of the officers listed below is authorized to sign agreements and give written instructions with regard to any matters pertaining to the WIFIA Loan Documents as the Borrower’s Authorized Representative (each as defined in that certain WIFIA Loan Agreement, dated as of [__________], 2023, between the Borrower and the United States Environmental Protection Agency, acting by and through the Administrator):
Name Title Signature
[_______________] [___________________] ________________________ [_______________] [___________________] ________________________ [_______________] [___________________] ________________________ [_______________] [___________________] ________________________ [_______________] [___________________] ________________________ IN WITNESS WHEREOF, the undersigned has executed this certificate as of this _____ day of [___], 20[__].
CITY OF SANTA CRUZ,
by its authorized representative
By: _______________________________
Name:
Title:
26.92 Exhibit C-1
3740645.5 046297 CTR
EXHIBIT C
FORM OF PUBLIC BENEFITS REPORT
Pursuant to [Section 11(a)(vii)) and] Part D of Schedule V (Reporting Requirements) of the WIFIA Loan Agreement (as defined below), the City of Santa Cruz (the “Borrower”) is providing this Public Benefits Report in connection with the Santa Cruz Water Program Project (Phase 1) (WIFIA ID – N[__________]). Capitalized terms used in this certificate and not defined shall have the respective meanings ascribed to such terms in the WIFIA Loan Agreement dated as of [__________], 2023 (the “WIFIA Loan Agreement”), between the Borrower and the United States Environmental Protection Agency, acting by and through the Administrator.
Reporting Period: [Prior to the Effective Date][within ninety (90) days following the Substantial Completion Date][within ninety (90) days following the fifth (5th) anniversary of the Substantial Completion Date]
(i) The number of total jobs and direct jobs projected to be created by the Project during the period between the Effective Date and the Substantial Completion Date:
WIFIA projects that the Project will create [__] total jobs, of which the Borrower projects [__] will be direct jobs.
(ii) Indicate (yes or no) whether the Project will assist the Borrower in complying with applicable regulatory requirements, and if yes, describe how the project assists with regulatory compliance:
Yes ☐
If yes, additional description: [___]
No ☐
(iii) The Project will assist the Borrower with the following environmental measure:1 1 WIFIA Lender to provide measurement.
26.93 Exhibit D-1
3740645.5 046297 CTR
EXHIBIT D
FORM OF REQUISITION
VIA EMAIL
United States Environmental Protection Agency1
1200 Pennsylvania Avenue NW
WJC-E 7334A
Washington, D.C. 20460
Attention: WIFIA Director
Email: [email protected]
Re: City of Santa Cruz Santa Cruz Water Program Project (Phase 1) (WIFIA ID – N[__________])
Ladies and Gentlemen:
Pursuant to Section 4 (Disbursement Conditions) and Schedule IV (Requisition Procedures) of the WIFIA Loan Agreement, dated as of [__________], 2023 (the “WIFIA Loan Agreement”), by and between the CITY OF SANTA CRUZ (the “Borrower”) and the UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, acting by and through the Administrator (the “WIFIA Lender”), the Borrower hereby requests a Disbursement in the amount set forth below in respect of Eligible Project Costs paid or incurred by the Borrower. Capitalized terms used but not defined herein have the meaning set forth in the WIFIA Loan Agreement.
In connection with this Requisition, the undersigned, as the Borrower’s Authorized Representative, hereby represents and certifies the following:
1. Project name Santa Cruz Water Program Project (Phase 1)
2. Borrower name City of Santa Cruz
3. WIFIA Loan ID [___]
4. Borrower UEI Number [___]
5. Borrower FEIN number 94-6000427
6. Requisition number [___]
7. Requested Disbursement amount $[___]
8. Requested date of Disbursement
(the “Disbursement Date”)2
[___]
9. Total amounts previously disbursed under the
WIFIA Loan Agreement
$[___]
1 If there is a Servicer for the WIFIA Loan, provide a copy to the Servicer as well and include its notice details here. 2 Note this should be the actual disbursement date on which the Borrower requests to receive the funds, not the date that this Requisition form is submitted to the WIFIA Lender.
26.94 Exhibit D-2
3740645.5 046297 CTR
10. Wire or ACH transfer instructions (please specify
method)
[___]
11. As of the date hereof, and immediately after giving effect to the Disbursement of WIFIA Loan proceeds requested under this Requisition, (a) no Default or Event of Default and no event of default under any other Related Document shall have occurred and be continuing and (b) no event that, with the giving of notice or the passage of time or both, would constitute an event of default under any other Related Document, shall have occurred and be continuing.
12. No Material Adverse Effect, or any event or condition that could reasonably be expected to have a Material Adverse Effect, has occurred since the Effective Date.
13. The aggregate amount of all Disbursements (including the requested Disbursement amount under this Requisition but excluding any interest that is capitalized in accordance with the WIFIA Loan Agreement) does not exceed (a) the Maximum Principal Amount of the WIFIA Loan or (b) the amount of Eligible Project Costs paid or incurred by the Borrower.
14. The Eligible Project Costs for which reimbursement or payment is being requested has not been reimbursed or paid by any previous disbursement of (a) WIFIA Loan proceeds or (b) any other source of funding for the Project (other than any Interim Financing or cash of the Borrower) as identified in the Project Budget.
15. The Borrower, and each of its contractors and subcontractors at all tiers with respect to the Project, has complied with all applicable laws, rules, regulations and requirements, including 40 U.S.C. §§3141-3144, 3146, and 3147 (relating to Davis-Bacon Act requirements) (and regulations relating thereto) and 33 U.S.C. §3914 (relating to American iron and steel products). Supporting documentation, such as certified payroll records and certifications for all iron and steel products used for the Project, are being maintained and are available for review upon request by the WIFIA Lender.
16. The representations and warranties of the Borrower set forth in the WIFIA Loan Agreement and in each other WIFIA Loan Document are true and correct as of the date hereof and as of the Disbursement Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case, such representations and warranties are true and correct as of such earlier date).
17. The Borrower has delivered all required deliverables under and in compliance with the requirements of Schedule V (Reporting Requirements), except as has been otherwise agreed by the WIFIA Lender.
18. The amount hereby being requested for Disbursement is with respect to Eligible Project Costs for which [all][a portion][none] of the Eligible Project Costs Documentation was previously submitted to and approved by the WIFIA Lender in accordance with Schedule IV (Requisition Procedures) and Schedule V (Reporting Requirements) of the WIFIA Loan Agreement. The [following table below][attached excel sheet] sets out a summary of any Eligible Project Costs that have not otherwise been previously submitted to the WIFIA
26.95 Exhibit D-3
3740645.5 046297 CTR
Lender for approval, and supporting Eligible Project Costs Documentation in respect of such new Eligible Project Costs is attached hereto.3
WIFIA USE ONLY
Vendor or
Contractor
Name4
Invoice
Number5
Invoice
Date
Payment
Date
Invoice
Amount
WIFIA
Requested
Amount6
Activity
Type7
Description
of Activity8
Approved
Amount
Notes
The undersigned acknowledges that if the Borrower makes a false, fictitious, or fraudulent claim, statement, submission, or certification to the Government in connection with the Project, the Government reserves the right to impose on the Borrower the penalties of 18 U.S.C. § 1001, to the extent the Government deems appropriate.
Date: _______________________ CITY OF SANTA CRUZ,
by its authorized representative
By: _______________________________
Name:
Title:___________________________
3 See Schedules IV, V and Exhibit E of the WIFIA Loan Agreement for additional details on EPC Documentation. 4 If seeking reimbursement for internal costs, enter “Internally financed activities.” 5 Vendor’s number indicated on the invoice sent to the Borrower. 6 If the amount requested for reimbursement by the WIFIA Lender is less than the total amount of the invoice, include an explanation for the difference.
7 Specify whether activity is: (a) Development phase activity, which includes planning, preliminary engineering, design, environmental review, revenue forecasting and other pre-construction activities; (b) Construction, which includes construction, reconstruction, rehabilitation and replacement activities; (c) Acquisition of real property, which includes acquiring an interest in real property, environmental mitigation, construction contingencies and acquisition of equipment; (d) Carrying costs, including capitalized interest, as necessary to meet market requirements, reasonably required reserve funds, capital issuance expenses and other carrying costs during construction; (e) WIFIA fees, including for application and credit processing; or (f) Other, with an explanation in the ”Description of Activity” column.
8 Provide a brief description of the activities included in the invoice for which WIFIA funds are being requested and any other notes that will aid in the review of the disbursement request.
26.96 Exhibit E-1
3740645.5 046297 CTR
EXHIBIT E
FORM OF CERTIFICATION OF ELIGIBLE PROJECT COSTS DOCUMENTATION
VIA EMAIL
United States Environmental Protection Agency1
1200 Pennsylvania Avenue NW
WJC-E 7334A
Washington, D.C. 20460
Attention: WIFIA Director
Email: [email protected]
Re: City of Santa Cruz Santa Cruz Water Program Project (Phase 1) (WIFIA ID – N[__________])
Ladies and Gentlemen:
Pursuant to Part C of Schedule V (Reporting Requirements) of the WIFIA Loan Agreement, dated as of [__________], 2023 (the “WIFIA Loan Agreement”), by and between the CITY OF SANTA CRUZ (the “Borrower”) and the UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, acting by and through the Administrator (the “WIFIA Lender”), the Borrower hereby presents this certificate in connection with the Borrower’s delivery of Eligible Project Costs Documentation to the WIFIA Lender. Capitalized terms used but not defined herein have the meaning set forth in the WIFIA Loan Agreement.
The undersigned does hereby represent and certify the following:
1. This certificate is being delivered to the WIFIA Lender in connection with the Eligible Project Costs during the period between [___] and [___] (the “Quarterly Period”).
2. A summary of the Eligible Project Costs incurred, invoiced and/or paid (as the case may be) is set out in the [attached excel sheet][table on the following page:] 1 If there is a Servicer for the WIFIA Loan, provide a copy to the Servicer as well and include its notice details here.
26.97 Exhibit E-2
3740645.5 046297 CTR
3. The anticipated sources of funding for such Eligible Project Costs are [listed below][set forth in the attached excel sheet].
4. Supporting Eligible Project Costs Documentation for the above Eligible Project Costs for the Quarterly Period are also attached hereto.6
5. The most recently delivered Construction Monitoring Report delivered in accordance with Part C of Schedule V (Reporting Requirements) sets out a summary of the progress of construction of the Project, no change has occurred since the date of such Construction Monitoring Report that could reasonably be expected to cause a Material Adverse Effect, and the Borrower is otherwise in compliance with Part C of Schedule V (Reporting Requirements).
Date: _______________________ CITY OF SANTA CRUZ 7
By: _______________________________
Name:
Title:___________________________
2 If the expectation is to seek reimbursement for internal costs, enter “Internally financed activities.” 3 Vendor’s number indicated on the invoice sent to the Borrower. 4 Specify whether activity is: (a) Development phase activity, which includes planning, preliminary engineering, design, environmental review, revenue forecasting and other pre-construction activities; (b) Construction, which includes construction, reconstruction, rehabilitation and replacement activities; (c) Acquisition of real property, which includes acquiring an interest in real property, environmental mitigation, construction contingencies and acquisition of equipment; (d) Carrying costs, including capitalized interest on other Project Obligations during construction, as necessary to meet market requirements, reasonably required reserve funds, capital issuance expenses and other carrying costs during construction; (e) WIFIA fees, including for application and credit processing; or (f) Other, with an explanation in the ”Description of Activity” column. 5 Provide a brief description of the activities included in the invoice for which WIFIA funds are being requested and any other notes that will aid in the review of the documentation. 6 See Schedules IV and V of the WIFIA Loan Agreement for additional details on EPC Documentation. 7 To be executed by the Borrower’s Authorized Representative.
WIFIA USE ONLY
Vendor or
Contractor
Name2
Invoice
Number3
Invoice
Date
Payment
Date
Invoice
Amount
Activity
Type4
Description
of Activity5
Approved
Amount
Notes
26.98 Exhibit F-1
3740645.5 046297 CTR
EXHIBIT F
FORM OF CONSTRUCTION MONITORING REPORT
VIA EMAIL
United States Environmental Protection Agency
1200 Pennsylvania Avenue NW
WJC-E 7334A
Washington, DC 20460
Attn: WIFIA Director
Email: [email protected]
Re: City of Santa Cruz Santa Cruz Water Program Project (Phase 1) (WIFIA ID – N[__________]) This Construction Monitoring Report for the period of [insert relevant quarterly period] (the “Quarterly Period”) is provided pursuant to Part C of Schedule V (Reporting Requirements) of the WIFIA Loan Agreement, dated as of [__________], 2023 (the “WIFIA Loan Agreement”), by and between the CITY OF SANTA CRUZ (the “Borrower”) and the UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, acting by and through the Administrator of the Environmental Protection Agency (the “WIFIA Lender”). Unless otherwise defined herein, all capitalized terms in this Construction Monitoring Report have the meanings assigned to those terms in the WIFIA Loan Agreement.
1. Project Status. Provide a narrative summary of the Project’s construction progress during the Quarterly Period, including with respect to the Project components or sub-projects where appropriate. Complete the table in Appendix A to update the Project scope, schedule, and costs with the latest information.
2. Current Projected Substantial Completion Date:
If the current Projected Substantial Completion Date differs than the date set forth in the Construction Monitoring Report most recently delivered to the WIFIA Lender (or, if no such report has yet been provided, the date of the Projected Substantial Completion Date set forth in the WIFIA Loan Agreement as of the Effective Date), provide a description in reasonable detail for such projected delay or difference:
3. Material Problems (if any)
Note any problems encountered or anticipated during the construction of the Project during the Quarterly Period that (1) impedes Project completion within the scope, costs,
26.99 Exhibit F-2
3740645.5 046297 CTR
and schedule outlined in the WIFIA Loan Agreement or (2) relates to unforeseen complications in connection with the construction of the Project. This may include commissioning/start-up issues, constructability issues for the Project as planned, adverse impacts to Project surroundings, changes in or issues with meeting environmental or federal compliance requirements, and unanticipated or abnormal permit approval timelines. Include an assessment of the impact and any current plans to address the problems.
4. Other Matters Related to the Project (if applicable) Date: _______________________ CITY OF SANTA CRUZ
By: _______________________________
Name: _____________________________
Title:_______________________________
26.100
Exhibit F-3
3740645.5 046297 CTR
APPENDIX A 1
Project Scope Project Schedule Project Costs
Project
Component
Completed
(Y/N)
Contract/
Vendor
Bid
Advertisem
ent Date
Contract
Award Date
NTP
Effective
Date
Original
Substantial
Completion
Date
Estimated
Substantial
Completion
Date
Original
Contract
Amount
Estimated
Costs to
Complete
Costs
Earned or
Paid to
Date
Total
Table Definitions:
Project Component – project name or ID as tracked by the borrower Complete (Y/N) – indication that project is complete, and no additional updates will be provided Contract/Vendor – the contract identifier and contractor that is/will be completing the project construction.
Bid Advertisement Date – the date the bid was advertised Contract Award date – the date the contract was awarded NTP Effective date – the effective date to proceed with the construction in the Notice to Proceed Original Substantial Completion Date – the substantial completion date for the given project as noted in the original contract award Estimated Substantial Completion Date – the latest date estimate for substantial completion for the given project component Original Contract Amount – the original contract award amount Estimated Costs to Complete – the latest cost estimates to complete the given project component Costs Earned or Paid to Date – the latest incurred contract costs for the given project component Total – Total the cost amounts across all project components and contracts 1 Appendix A summarizes all project components that will be bid in the next quarter, are currently under construction, or have completed construction. It should be a cumulative list of projects that is updated each quarter. A Microsoft Excel spreadsheet with similar table format is acceptable.
26.101
Exhibit G-1
3740645.5 046297 CTR
EXHIBIT G
FORM OF CERTIFICATE OF SUBSTANTIAL COMPLETION
[Letterhead of Borrower]
[Date]
VIA EMAIL
United States Environmental Protection Agency
1200 Pennsylvania Avenue NW
WJC-E 7334A
Washington, DC 20460
Attn: WIFIA Director
Email: [email protected]
Project: City of Santa Cruz Santa Cruz Water Program Project (Phase 1) (WIFIA ID – N[__________])
Dear Director:
This Notice is provided pursuant to Part E of Schedule V (Reporting Requirements) of that certain WIFIA Loan Agreement (the “WIFIA Loan Agreement”), dated as of [__________], 2023, by and between the CITY OF SANTA CRUZ (the “Borrower”) and the UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, acting by and through its Administrator (the “WIFIA Lender”).
Unless otherwise defined herein, all capitalized terms in this certificate have the meanings assigned to those terms in the WIFIA Loan Agreement.
I, the undersigned, in my capacity as the Borrower’s Authorized Representative and not in my individual capacity, do hereby certify to the WIFIA Lender that:
(a) the Project has satisfied each of the requirements for Substantial Completion set forth in the Construction Contracts;
(b) Substantial Completion has been declared under each of the relevant Construction Contracts and copies of the notices of Substantial Completion under such agreements are attached to this certification;
(c) Substantial Completion, as defined in the WIFIA Loan Agreement, has been achieved and the Substantial Completion Date is [___]; and
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Exhibit G-2
3740645.5 046297 CTR
(d) The total federal assistance provided to the Project, including the maximum principal amount of the WIFIA Loan (excluding any capitalized interest), does not exceed eighty percent (80%) of Total Project Costs.
CITY OF SANTA CRUZ,
by its authorized representative
By: _______________________________
Name:
Title:
26.103
Exhibit H-1-1
3740645.5 046297 CTR
EXHIBIT H-1
OPINIONS REQUIRED FROM GENERAL COUNSEL TO BORROWER
An opinion of the counsel of the Borrower, dated as of the Effective Date, to the effect that:
(a) the Borrower is duly formed, validly existing, and in good standing under the laws of the jurisdiction of its organization;
(b) the Borrower has all requisite power and authority to conduct its business and to execute and deliver, and to perform its obligations under the WIFIA Loan Documents to which it is a party; (c) the execution and delivery by the Borrower of, and the performance of its respective obligations under, the WIFIA Loan Documents to which it is a party, have been duly authorized by all necessary organizational or regulatory action, and other than the Borrower’s Organizational Documents and the Borrower Resolution, no further instruments or documents are necessary for the Borrower to execute and deliver, and to perform its obligations under, the WIFIA Loan Documents to which it is a party and to consummate and implement the transactions contemplated by the WIFIA Loan Documents;
(d) the Borrower has duly executed and delivered each WIFIA Loan Document to which it is a party and each such WIFIA Loan Document constitutes the legal, valid and binding obligation of such party; enforceable against such party in accordance with their respective terms; (e) no authorization, consent, or other approval of, or registration, declaration or other filing with any governmental authority of the United States of America or of the State is required on the part of the Borrower for the execution and delivery by such party of, and the performance of such party under, any WIFIA Loan Document to which it is a party other than authorizations, consents, approvals, registrations, declarations and filings that have already been timely obtained or made by the Borrower;
(f) the execution and delivery by the Borrower of, and compliance with the provisions of, the WIFIA Loan Documents to which it is a party in each case do not (i) violate the Organizational Documents of the Borrower, (ii) violate the law of the United States of America or of the State or (iii) conflict with or constitute a breach of or default under any material agreement or other instrument known to such counsel to which the Borrower is a party, or to the best of such counsel’s knowledge, after reasonable review, any court order, consent decree, statute, rule, regulation or any other law to which the Borrower is subject;
(g) the Borrower is not an investment company required to register under the Investment Company Act of 1940, as amended; and
(h) to the knowledge of such counsel after due inquiry, there are no actions, suits, proceedings or investigations against the Borrower by or before any court, arbitrator or any other Governmental Authority in connection with the Related Documents or the Water System (including the Project) that are pending.
26.104
Exhibit H-2-1
3740645.5 046297 CTR
EXHIBIT H-2
OPINIONS REQUIRED FROM BOND COUNSEL TO BORROWER
An opinion of bond counsel, dated as of the Effective Date, to the effect that:
(a) The Borrower has been duly created and validly exists as a charter city and municipal corporation duly organized and existing under the Constitution and laws of the State of California, with good right and power to incur the WIFIA Loan under the City of Santa Cruz Water and Wastewater Enterprise Revenue Bond Law as amended to the date hereof) (the “Bond Law”). (b) The Borrower has the right and power under the Bond Law and the laws of the State, to enter into the WIFIA Loan Agreement and to issue the WIFIA Bond, and each has been duly authorized, executed and delivered by the Borrower, is in full force and effect, and constitutes a legal, valid and binding agreement of the Borrower enforceable against the Borrower in accordance with its respective terms and conditions.
(c) the WIFIA Loan (as evidenced by the WIFIA Bond and the WIFIA Loan Agreement) (i) is secured by the Pledged Collateral, (ii) is a Parity Obligation entitled to all of the benefits of a Parity Obligation under the WIFIA Loan Agreement and the Parity Obligation Documents, (iii) is enforceable under the laws of the State without any further action by the Borrower or any other Person, and (iv) ranks pari passu in right of payment and right of security with all Parity Obligations and are senior in right of payment and right of security to all Subordinated Obligations; (d) the WIFIA Loan Documents create the valid and binding assignment and pledge of the Pledged Collateral to secure the payment of the principal of, interest on, and other amounts payable in respect of, the WIFIA Loan (as evidenced by the WIFIA Bond and the WIFIA Loan Agreement), irrespective of whether any party has notice of the pledge and without the need for any physical delivery, recordation, filing or further act;
(e) all actions by the Borrower that are required for the application of Gross Revenues as required under the WIFIA Loan Agreement have been duly and lawfully made; (f) the Borrower has complied with the requirements of State law to lawfully pledge the Pledged Collateral and use the Revenues as required by the terms of the WIFIA Loan Agreement; and
(g) the Borrower is not entitled to claim governmental immunity in any breach of contract action under the WIFIA Loan Agreement or the WIFIA Bond.
26.105
EPA/HDW Draft 2.[__].23
THIS DRAFT DOCUMENT IS NOT A CONTRACT OR AN OFFER TO ENTER INTO A CONTRACT. IT HAS NOT BEEN APPROVED BY THE ENVIRONMENTAL PROTECTION AGENCY (“USEPA”) AND DOES NOT INDICATE A COMMITMENT BY USEPA TO PARTICIPATE IN ANY TRANSACTION OR TO BE BOUND IN ACCORDANCE WITH ANY TERM OR CONDITION SET FORTH HEREIN. ONLY A DOCUMENT AS EXECUTED BY THE PARTIES WILL CONTAIN THE TERMS THAT BIND THEM. 3742651.4 046297 CTR
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
[Date]
City of Santa Cruz
212 Locust Street, Suite A
Santa Cruz, CA 95060
RE: WIFIA Term Sheet for the City of Santa Cruz Water Program Project (Phase 1) (WIFIA ID - [___])
Ladies and Gentlemen:
This WIFIA Term Sheet (this “Term Sheet”) constitutes (a) the approval of the United States Environmental Protection Agency, acting by and through the Administrator of the Environmental Protection Agency (hereinafter, the “USEPA”), of the application for credit assistance of the Borrower (as defined below) received July 15,2022, (the “Application”) and (b) the agreement of USEPA to provide financing for the above-referenced project (as further described below, the “Project”) in the form of a secured loan (the “WIFIA Loan”), pursuant to the Water Infrastructure Finance and Innovation Act (“WIFIA”), § 5021 et seq. of Public Law 113-121 (as amended, and as may be further amended from time to time, the “Act”), codified as 33 U.S.C. §§ 3901-3914, subject in all respects to (i) the terms and conditions contained herein and (ii) the execution and delivery of the WIFIA loan agreement to be entered into on or after the date hereof (the “WIFIA Loan Agreement”) on the terms and conditions acceptable to the USEPA contained therein. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the WIFIA Loan Agreement.
By executing this Term Sheet, the Borrower confirms its agreement to reimburse USEPA for any and all fees and expenses that USEPA incurs for legal counsel, financial advice, and other consultants in connection with the evaluation of the Project and the negotiation and preparation of the WIFIA Loan Agreement and related documents, whether or not such agreement is ultimately executed.
This Term Sheet shall be governed by the federal laws of the United States of America if and to the extent such federal laws are applicable, and the internal laws of the State of California, if and to the extent such federal laws are not applicable. This Term Sheet, and any amendments, waivers, consents or supplements hereto may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument. Electronic delivery of an executed counterpart of a signature page shall be effective as delivery of an original executed counterpart.
26.106
EPA/HDW Draft 12.22.22
THIS DRAFT DOCUMENT IS NOT A CONTRACT OR AN OFFER TO ENTER INTO A CONTRACT. IT HAS NOT BEEN APPROVED BY THE ENVIRONMENTAL PROTECTION AGENCY (“USEPA”) AND DOES NOT INDICATE A COMMITMENT BY USEPA TO PARTICIPATE IN ANY TRANSACTION OR TO BE BOUND IN ACCORDANCE WITH ANY TERM OR CONDITION SET FORTH HEREIN. ONLY A DOCUMENT AS EXECUTED BY THE PARTIES WILL CONTAIN THE TERMS THAT BIND THEM. 2 3742651.4 046297 CTR
INDICATIVE TERMS OF THE WIFIA LOAN
WIFIA LENDER United States Environmental Protection Agency, an agency of the United States of America, acting by and through the Administrator of the Environmental Protection Agency (the “WIFIA Lender”).
BORROWER City of Santa Cruz, a charter city and municipal corporation duly organized and existing under the Constitution and laws of the State of California (the “Borrower”).
PROJECT The project consists of the Santa Cruz Water Program Project (Phase 1), consisting of the Graham Hill WTP facility upgrades, the Newell Creek Pipeline replacement,
rehabilitation of the University finished water reservoir, conversion of existing well infrastructure into aquifer storage and recovery (ASR) wells in the Mid-County Basin, and
evaluation of additional water supply augmentation projects in the Mid-County and Santa Margarita Groundwater Basins, located in Santa Cruz, California (the “Project”), and as described in further detail in the WIFIA Loan Agreement.
WIFIA LOAN AMOUNT A maximum principal amount (sum of disbursements and excluding any capitalized interest) not to exceed
$127,730,000; provided that (a) the maximum principal
amount of the WIFIA Loan, together with the amount of any other credit assistance provided under the Act, shall not exceed forty-nine percent (49%) of reasonably anticipated Eligible Project Costs, and (b) the total federal assistance for the Project, including but not limited to the maximum
principal amount of the WIFIA Loan and all federal grants, shall not exceed eighty percent (80%) of Total Project Costs.
INTEREST RATE The WIFIA Loan shall bear interest at a fixed rate, calculated by adding one basis point (0.01%) to the rate of securities of a similar maturity (based on the weighted-average life of the WIFIA Loan) as published, on the execution date of the
WIFIA Loan Agreement, in the United States Treasury
Bureau of Public Debt’s daily rate table for State and Local Government Series (SLGS) securities.
The WIFIA Loan shall also bear default interest at a rate of 10% per annum at such times and upon such terms as
provided in the WIFIA Loan Agreement.
26.107
EPA/HDW Draft 12.22.22
THIS DRAFT DOCUMENT IS NOT A CONTRACT OR AN OFFER TO ENTER INTO A CONTRACT. IT HAS NOT BEEN APPROVED BY THE ENVIRONMENTAL PROTECTION AGENCY (“USEPA”) AND DOES NOT INDICATE A COMMITMENT BY USEPA TO PARTICIPATE IN ANY TRANSACTION OR TO BE BOUND IN ACCORDANCE WITH ANY TERM OR CONDITION SET FORTH HEREIN. ONLY A DOCUMENT AS EXECUTED BY THE PARTIES WILL CONTAIN THE TERMS THAT BIND THEM. 3 3742651.4 046297 CTR
PAYMENT DATES Principal and interest on the WIFIA Loan shall be repaid in accordance with the terms set forth in the WIFIA Loan
Agreement.
The debt service payment commencement date of the WIFIA Loan shall in no event be later than five (5) years after the Substantial Completion Date of the Project.
FINAL MATURITY DATE The earliest of (a) May 1, 2058; (b) the date on which the maturity of the WIFIA Loan has been accelerated or subject to mandatory redemption or prepayment (as the case may be) (if applicable); and (c) the Principal Payment Date
immediately preceding the date that is thirty-five (35) years following the Substantial Completion Date, which is
projected to be June 30, 2030.
DEDICATED SOURCE OF
REPAYMENT
The dedicated source of repayment for the WIFIA Loan shall be the Net Revenues of the Water System.
SECURITY AND LIEN
PRIORITY
As evidence of the Borrower’s obligation to repay the
WIFIA Loan, the Borrower shall issue and deliver to the WIFIA Lender, as the registered owner, on or prior to the Effective Date, the WIFIA Bond. The WIFIA Bond shall be a Parity Obligation entitled to all the benefits of a Parity Obligation under the WIFIA Loan Agreement and all other Parity Obligation Documents.
The WIFIA Loan (as evidenced by the WIFIA Bond and the
WIFIA Loan Agreement) shall be secured by a first pledge of and lien on all of the Net Revenues, on a parity with the pledge, which secures all other outstanding Parity
Obligations. In addition, the WIFIA Loan (as evidenced by the WIFIA Bond and the WIFIA Loan Agreement) shall be
secured by a pledge of all of the moneys in the Parity
Obligation Sinking Funds and the Parity Obligation Bond Service Funds, including all amounts derived from the
investment of such moneys, on a parity with the pledge
which secures all other outstanding Parity Obligations.
RATE COVENANT As set forth in further detail in the WIFIA Loan Agreement:
(a) Covenant Regarding Gross Revenues. The Borrower
will fix, prescribe, revise and collect rates, fees and charges for the services and facilities furnished by the Water System during each Borrower Fiscal Year, which are at least
sufficient, after making allowances for contingencies and
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EPA/HDW Draft 12.22.22
THIS DRAFT DOCUMENT IS NOT A CONTRACT OR AN OFFER TO ENTER INTO A CONTRACT. IT HAS NOT BEEN APPROVED BY THE ENVIRONMENTAL PROTECTION AGENCY (“USEPA”) AND DOES NOT INDICATE A COMMITMENT BY USEPA TO PARTICIPATE IN ANY TRANSACTION OR TO BE BOUND IN ACCORDANCE WITH ANY TERM OR CONDITION SET FORTH HEREIN. ONLY A DOCUMENT AS EXECUTED BY THE PARTIES WILL CONTAIN THE TERMS THAT BIND THEM. 4 3742651.4 046297 CTR
error in the estimates, to pay the following amounts in the following order:
(i) All Operation and Maintenance Costs
estimated by the Borrower to become due and payable in the Borrower Fiscal Year;
(ii) The principal of and interest on all
outstanding Parity Obligations (including the WIFIA Loan) as they become due and payable during the Borrower Fiscal Year, without preference or priority;
(iii) All amounts, if any, required to restore the
balance in the reserve funds established for any Parity Obligations to their required levels; and
(iv) All payments required to meet any other
obligations of the Borrower which are charges, liens,
encumbrances upon, or which are otherwise payable from, the Gross Revenues or the Net Revenues during such
Borrower Fiscal Year.
(b) Covenant Regarding Net Revenues. In addition to
the covenant set forth in the preceding clause (a) of this Section, the Borrower will fix, prescribe, revise and collect rates, fees and charges for the services and facilities furnished by the Water System during each Borrower Fiscal Year which are sufficient to yield Net Revenues which are at least equal to 120% of the amount described in the preceding clause (a)(ii) for such Borrower Fiscal Year; provided, however, that in the event that the actual collection of Net Revenues based on such rates, fees and charges is
insufficient to yield Net Revenues which meet such
requirement, such event shall not constitute an Event of Default unless it has continued uncured for a period of at least 12 months
In addition, the Borrower shall observe and perform all of the covenants, agreements and conditions on its part required to be observed and performed under Section 5.07 of the 2014 Bond Indenture, Section 5.07 of the 2019 Bond Indenture, Section 5.06 of the 2016 Installment Sale Agreement, the rate covenant set forth in Section B.3 of the 2020 SRF
26.109
EPA/HDW Draft 12.22.22
THIS DRAFT DOCUMENT IS NOT A CONTRACT OR AN OFFER TO ENTER INTO A CONTRACT. IT HAS NOT BEEN APPROVED BY THE ENVIRONMENTAL PROTECTION AGENCY (“USEPA”) AND DOES NOT INDICATE A COMMITMENT BY USEPA TO PARTICIPATE IN ANY TRANSACTION OR TO BE BOUND IN ACCORDANCE WITH ANY TERM OR CONDITION SET FORTH HEREIN. ONLY A DOCUMENT AS EXECUTED BY THE PARTIES WILL CONTAIN THE TERMS THAT BIND THEM. 5 3742651.4 046297 CTR
Construction Installment Sale Agreements and Section 7.14 of the 2021 Credit Agreement.
ADDITIONAL
INDEBTEDNESS
As set forth in further detail in the WIFIA Loan Agreement:
The Borrower may not create, incur or suffer to exist (A) any Obligations (1) the payments with respect to which are senior or prior in right of payment by the Borrower of the WIFIA Loan or (2) secured by a Lien on the Pledged Collateral that is senior to the Lien on the Pledged Collateral in favor of the WIFIA Lender or (3) all or a portion of the proceeds of which are or will be applied at any time to fund all or any portion of Total Project Costs, that are secured by a Lien on any assets or property of the Borrower other than the Pledged Collateral.
The Borrower shall not incur any indebtedness of any kind payable from, secured or supported by the Pledged
Collateral, including Permitted Debt, without the prior written consent of the WIFIA Lender, while an Event of
Default relating to a Payment Default or a Bankruptcy
Related Event has occurred and is continuing.
The Borrower shall not issue or incur any Additional
Obligations except in accordance with all requirements and conditions set forth in the Additional Bonds Test, which Additional Bonds Test is summarized below and is set forth in full in the WIFIA Loan Agreement.
(a) No Event of Default (or no event with respect
to which notice has been given and which, once all notice of grace periods have passed, would constitute an Event of Default) has occurred and is continuing.
(b) The amount of Net Revenues, excluding
amounts in the Rate Stabilization Fund, as shown by the books of the Borrower for the Base Year, plus at the option of the Borrower any Additional Revenues, are at least equal to 120% of the amount of Maximum Annual Debt Service on all outstanding Parity Obligations (including the WIFIA Loan) and any proposed Additional Parity Obligations.
26.110
EPA/HDW Draft 12.22.22
THIS DRAFT DOCUMENT IS NOT A CONTRACT OR AN OFFER TO ENTER INTO A CONTRACT. IT HAS NOT BEEN APPROVED BY THE ENVIRONMENTAL PROTECTION AGENCY (“USEPA”) AND DOES NOT INDICATE A COMMITMENT BY USEPA TO PARTICIPATE IN ANY TRANSACTION OR TO BE BOUND IN ACCORDANCE WITH ANY TERM OR CONDITION SET FORTH HEREIN. ONLY A DOCUMENT AS EXECUTED BY THE PARTIES WILL CONTAIN THE TERMS THAT BIND THEM. 6 3742651.4 046297 CTR
(c) The issuance of such Parity Obligations shall
comply with all conditions to the issuance thereof as set forth in the applicable provisions of the Parity Obligation Documents. (d) The Borrower shall deliver to the WIFIA
Lender a Certificate of the Borrower certifying, and an opinion of Bond Counsel stating, that the conditions precedent to the issuance of such Parity Obligations set forth in the foregoing subsections (a), (b) and (c) of this Section have been satisfied.
In addition, the Borrower shall observe and perform all of the covenants, agreements and conditions on its part required to be observed and performed under Section 5.08 of the 2014 Bond Indenture, Section 5.08 of the 2019 Bond Indenture, Sections 2.11 and 2.16 of the 2016 Installment Sale
Agreement, the limitations on the issuance of additional debt in Section B.4 of the 2020 SRF Construction Installment Sale Agreements and Section 8.2 of the 2021 Credit Agreement.
The Borrower shall not issue or incur any Additional
Subordinated Obligations except for Additional
Subordinated Obligations which (A) are secured by a pledge of Net Revenues which is fully subordinated in all respects to the pledge of the Pledged Collateral in favor of the Parity Obligations, and (B) has a right of payment and is payable in the Flow of Funds on a basis subordinate to the priority of payment of the Parity Obligations.
RESTRICTED PAYMENTS
AND TRANSFERS
The Borrower shall not permit Gross Revenues or other
assets of the Water System, or any funds in any accounts held under this Agreement or in any other fund or account held by or on behalf of the Borrower for the benefit of the Water System, to be paid or transferred or otherwise applied for purposes other than ownership, operation, maintenance or financing of the Water System.
WIFIA LOAN
DOCUMENTATION
The WIFIA Loan shall be subject to the preparation,
execution and delivery of the WIFIA Loan Agreement, the WIFIA Bond and any other loan documentation required by the WIFIA Lender in connection therewith, in each case
acceptable to the WIFIA Lender and the Borrower, which
will contain certain conditions precedent, representations and warranties, affirmative and negative covenants, events of
26.111
EPA/HDW Draft 12.22.22
THIS DRAFT DOCUMENT IS NOT A CONTRACT OR AN OFFER TO ENTER INTO A CONTRACT. IT HAS NOT BEEN APPROVED BY THE ENVIRONMENTAL PROTECTION AGENCY (“USEPA”) AND DOES NOT INDICATE A COMMITMENT BY USEPA TO PARTICIPATE IN ANY TRANSACTION OR TO BE BOUND IN ACCORDANCE WITH ANY TERM OR CONDITION SET FORTH HEREIN. ONLY A DOCUMENT AS EXECUTED BY THE PARTIES WILL CONTAIN THE TERMS THAT BIND THEM. 7 3742651.4 046297 CTR
default, and other provisions as agreed between the WIFIA Lender and the Borrower.
[Signature pages follow]
26.112
THIS DRAFT DOCUMENT IS NOT A CONTRACT OR AN OFFER TO ENTER INTO A CONTRACT. IT HAS NOT BEEN APPROVED BY THE ENVIRONMENTAL PROTECTION AGENCY (“USEPA”) AND DOES NOT INDICATE A COMMITMENT BY USEPA TO PARTICIPATE IN ANY TRANSACTION OR TO BE BOUND IN ACCORDANCE WITH ANY TERM OR CONDITION SET FORTH HEREIN. ONLY A DOCUMENT AS EXECUTED BY THE PARTIES WILL CONTAIN THE TERMS THAT BIND THEM. 3742651.4 046297 CTR
If the foregoing terms are acceptable, please countersign this letter in the space indicated below.
Sincerely,
UNITED STATES ENVIRONMENTAL
PROTECTION AGENCY, acting by and
through the Administrator of the United States
Environmental Protection Agency
By: _______________________________
Name: Michael S. Regan
Title: Administrator
[Signature Page to City of Santa Cruz Santa Cruz Water Program Project (Phase 1) – WIFIA Term Sheet]
26.113
THIS DRAFT DOCUMENT IS NOT A CONTRACT OR AN OFFER TO ENTER INTO A CONTRACT. IT HAS NOT BEEN APPROVED BY THE ENVIRONMENTAL PROTECTION AGENCY (“USEPA”) AND DOES NOT INDICATE A COMMITMENT BY USEPA TO PARTICIPATE IN ANY TRANSACTION OR TO BE BOUND IN ACCORDANCE WITH ANY TERM OR CONDITION SET FORTH HEREIN. ONLY A DOCUMENT AS EXECUTED BY THE PARTIES WILL CONTAIN THE TERMS THAT BIND THEM. 3742651.4 046297 CTR
ACKNOWLEDGED AND AGREED:
CITY OF SANTA CRUZ,
by its authorized representative
By: _______________________________
Name:
Title:
[Signature Page to City of Santa Cruz Santa Cruz Water Program Project (Phase 1) – WIFIA Term Sheet]
26.114
Request to Approve a Loan for Water
Capital Projects from EPA’s Water
Infrastructure Finance and Innovation Act
(WIFIA) Loan Program
March 28, 2023
1 1 26.115
Presentation Overview
• Water Department Long Range Financial Plan
• Proposed capital projects to be funded via WIFIA loan • WIFIA Loan and SCWD Capital Structure
26.116 2
The What
and Why
Questions
The Big
Picture
How
Much
Answer
The How and the
Customer Class
Specific How
Much Answers
26.117
SCWD’s 2021 Long Range Financial Plan provides a 10-year capital financing strategy to support actions to:
1. Rehabilitate or replace critical infrastructure and augment of the City’s available water supply to meet the supply reliability goal adopted by Council in the Securing Our Water Future Policy;
2. Prepare the water system’s infrastructure and water supply to adapt to the impacts of climate change that are already being experienced;
26.118 4
3. Identify and implement financial policies, reserve levels, and revenues levels needed to ensure financial sustainability and provide flexibility to adapt to unforeseen circumstances or challenges;
4. Maintain the credit rating needed to support the Department’s ability to debt finance the majority of the planned capital investments and reinvestments needed to ensure supply and system reliability;
5. Achieve an equitable allocation of capital costs/charges between current and future system users; and
6. Manage rates in a predictable and reasonably stable manner.
26.119 5
Adopted Financial Reserves and Target Funding
and Coverage Levels
• Rate Stabilization Reserve (Fund 713) of $10 million; • Water Emergency Reserve Fund (Fund 717) at minimum
level of $3 million; and
• An Operating Reserve equal to 180 days of operating
expenses; 90 days of in Water Operating Cash Reserve
Fund (Fund 716), and the remaining in the Water
Operating Fund (Fund 711).
• Debt Service Coverage Ratio target = 1.5x
26.120 6
WIFIA Loan Projects
• The proposed loan will cover up to 49% of the cost of implementing the following projects:
– Graham Hill Water Treatment Plant Facility Improvements Project – Newell Creek Pipeline Project
– University Tank #4 Replacement
– Aquifer Storage and Recovery Project
• Additional funding is being sought to cover remaining costs through grants, and state Drinking Water Revolving low Interest Loan Fund.
26.121 7
Graham Hill Water Treatment Plant
Facility Improvement Project
• The GHWTP produces 95% of all drinking water delivered to customers.
• The $158 M project includes treatment process improvements and seismic and facility upgrades and will provide improved water quality and increased reliability and operating flexibility and in the face of climate change.
8 Left – GHWTP in
1960
Right – GHWTP in
2018
26.122
Felton to Graham Hill Water Treatment Plant
Segment of the Newell Creek Pipeline Replacement
• The $41 M project improves reliability of
SCWD's primary water supply transmission
main, which conveys raw water from SCWD's
sole surface water storage reservoir to the
GHWTP by replacing a 4.4-mile segment of
this aging asset with a new 24-inch diameter
pipeline between Felton Booster Pump
Station and the GHWTP.
26.123 9
University Tank 4
• The $6M Project
replaces the existing
400,000 gallon steel
reservoir (constructed
in 1965) witha 325,000
gallon steel reservoir
and appurtenances. The
smaller replacement
tank meets the needs of
UCSC and is compliant
with current seismic
standards.
26.124 16 10
Aquifer Storage Recovery
• The $95M Project implements the Mid-County Basin and
Santa Margarita Groundwater Basin projects, allowing
SCWD to store treated surface water during normal and
wet periods for extraction during dry and critically dry periods.
• The Mid-County project includes
modifications to four existing wells
(Beltz Wells) to function as ASR wells
and constructs new wells that would
support injecting approximately 2 MGD,
and extracting approximately 3MGD.
26.125 11
• When completed the WIFIA funded Projects will:
– Build resilience against natural hazards including climate change; – Improve long-term water supply reliability;
– Improve water quality;
– Increase operational flexibility to balance demands and instream flow requirements; and
– Replace critical infrastructure that has reached the end of its useful life.
12 WIFIA Project Benefits
26.126
Loan Term Sheet – Debt Covenants
• Security
– Pledge of Net Revenues of Water System on a parity with bonds and State loans
• Rate Covenants
– Annual Gross Revenues must be set to cover total annual Water System obligations by 100%
– Annual Net Revenues must be set to cover Annual Debt Service on Bonds and Parity Debt by 120%
• Issuance of Parity Debt
– Current year’s Net Revenues must cover 120% of Maximum Annual Debt Service
26.127 13
Loan Term Sheet – Additional Provisions
• Total Loan Amount and Interest Rate
– $127,730,000, which will cover up to 49% of the four projects included;
– Current estimate 3.75%, final interest rate tied to State and Local Government Securities rate on the day of the loan draw. • Loan Repayment Period and Loan Structure
– Final maturity in 2063, with first 5 years interest only and a 35 year repayment schedule of principle and interest;
– Prepayment of loan without penalty, allowing for future refinancing at any time conditions warrant.
• Loan Funding Availability
– Loan funds are available to reimburse qualifying expenditures.
26.128 14
QUESTIONS
26.129
City Council
AGENDA REPORT
DATE: 03/16/2023
AGENDA OF: 03/28/2023
DEPARTMENT: Public Works
SUBJECT: Appeal of Proposed Single Space Markings on David Way (PW) RECOMMENDATION: Resolution to uphold the appeal of the Transportation and Public Works Commission’s decision and install the proposed single space markings on David Way.
BACKGROUND: In 2016, a Coastal and Design Permit (CP16-0045) was approved by the Zoning Administrator allowing for the installation of single space markings (parking tees) Citywide within the Coastal Zone, in a specific effort to address complaints about long-term parking of oversize vehicles on and along West Cliff Drive.
City of Santa Cruz (City) Public Works Department staff received a request from a David Way resident on May 3, 2022, for the installation of new parking tees on David Way. The resident’s request was related to the long-term parking of oversize vehicles on the street.
In response to the request, parking enforcement staff increased the enforcement of existing 72- hour parking regulations. Staff also conducted a field review of the street dimensions and parking conditions on David Way and created a parking layout to install City Standard parking tees on the street.
When changes to on-street parking are requested by residents, the City provides notice of the proposed changes to neighbors. This is done by mail and physical posting at the location to provide an opportunity for a public appeal to the Transportation and Public Works Commission (TPWC) consistent with Municipal Code 10.16.
DISCUSSION: David Way is a short street between Oxford Way and West Cliff Drive within the Coastal Zone, which currently has un-marked, unrestricted parking. After review of the current conditions staff proposed the installation of fourteen marked single spaces with appropriate signage in accordance with CP16-0045 including buffer zones at driveway approaches and intersections.
A public notice of the proposed parking change was posted at the location on August 29, 2022 for a minimum of 14 days, and staff sent notification by mail to owners and tenants of properties within 300 feet of the affected location in accordance with requirements of the City of Santa Cruz Municipal Code Section 10.16 During this time, staff received an appeal to the proposed changes.
27.1 The proposed parking changes and appeal were presented at the January 23, 2023 TPWC meeting. The parking change appeal was upheld 4-3, meaning that the installation of single space markings on David Way was not supported. That decision at the TPWC meeting was appealed to City Council by the initial requestor of the single space markings and is the subject of this report.
FISCAL IMPACT: The proposed installation of parking tees on David Way would be funded by the Gas Tax and City Street Restriping – Maintenance budget. There is no impact to the General Fund.
Prepared By:
Nathan Goodman
Engineering Technician
Submitted By:
Nathan Nguyen, P.E.
Director of Public Works
Approved By:
Matt Huffaker
City Manager
ATTACHMENTS:
1. APPEAL OF PROPOSED SINGLE SPACE MARKINGS ON DAVID WAY - RESOLUTION UPHOLD.DOCX
2. DAVID WAY SINGLE SPACE MARKINGS PLAN.PDF
3. TRANSPORTATION & PUBLIC WORKS COMMISSION STAFF REPORT FROM JANUARY 23, 2023.PDF
4. TRANSPORTATION PUBLIC WORKS COMMISSION MINUTES FROM JANUARY 23, 2023.PDF
5. COASTAL DEVELOPMENT PERMIT CP16-0045.PDF
6. TRANSPORTATION AND PUBLIC WORKS COMMISSION APPEAL LETTER DATED SEPTEMBER 10, 2022.PDF
7. APPEAL OF THE TRANSPORTATION AND PUBLIC WORKS COMMISSION DECISION LETTER DATED JANUARY 30, 2023.PDF
27.2 RESOLUTION NO. NS-XX,XXX
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CRUZ TO UPHOLD
THE APPEAL OF THE TRANSPORTATION AND PUBLIC WORKS COMMISSION
DECISION AND INSTALL THE SINGLE SPACE MARKINGS ON DAVID WAY WHEREAS, Coastal and Design Permit CP16-0045 was approved by the Zoning Administrator on May 4, 2016 allowing for the installation of single space markings City-wide within the Coastal Zone; and
WHEREAS, on May 3, 2022 a David Way resident requested the installation of single space markings within the Coastal Zone; and
WHEREAS, the Public Works Department developed a plan to install single space markings on David Way; and
WHEREAS, the Public Works Department’s plan was appealed to the Transportation and Public Works Commission; and
WHEREAS, the Transportation and Public Works Commission upheld the appeal on January 23, 2023; and
WHEREAS, the decision of the Transportation and Public Works Commission was appealed on January 30, 2023; and
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Santa Cruz that it hereby upholds the appeal and approves the installation of single space markings on David Way.
PASSED AND ADOPTED this 28th day of March, 2023 by the following vote:
AYES:
NOES:
ABSENT:
DISQUALIFIED:
APPROVED: ______________________________
Fred Keeley, Mayor
ATTEST: _________________________________
Bonnie Bush, City Clerk Administrator
27.3 20' 2' 20' 2' 20' REFERENCES DRAWING #: FIELD BOOK: DESIGN CHECKED DATE DRAWN VAULT NO. SCALE SHEET OF 809 Center Street, Room 201 Santa Cruz, CA 95060 REVISIONS P U B L I C W O R K S D E P A R T M E N T SANTACRUZ C I T Y O F C I T Y O F S A N T A C R U Z C A L I F O R N I A 1866 # SINGLE SPACE MARKINGS DAVID WAY # # N GOODMAN SUPV. N GOODMAN 7/5/2022 1"=20' 1 1 INSTALL FOURTEEN 20' MARKED SINGLE SPACES WITH 2' BUFFER ZONES, 7' FROM CURB AS SHOWN. PAINT REMAINING CURB RED. INSTALL SIX (N) SIGNS AND POSTS AS SHOWN. 15 LF 15 LF 18 LF 5 LF 8 LF 10 LF 10 LF 18 LF 25 LF LEGEND (N) RED CURB (E) RED CURB (N) SIGN (N) SIGN (N) SIGN (N) SIGN (N) SIGN (N) SIGN 27.4
CITY OF SANTA CRUZ
TRANSPORTATION AND PUBLIC WORKS
COMMISSION
AGENDA REPORT
DATE: Jan. 3, 2023
AGENDA OF: January 23, 2023
DEPARTMENT: Public Works
SUBJECT: Appeal of New Single Space Markings on David Way. – Public Hearing RECOMMENDATION: That the Transportation and Public Works Commission consider the appeal of requested new Single Space Markings on David Way. At the close of the hearing, uphold or deny the appeal.
BACKGROUND: City of Santa Cruz Public Works Department staff received an initial request from a David Way resident on May 3, 2022, for the installation of new single space markings (parking tees) on David Way. The resident’s request was related to the long-term parking of oversize vehicles on the street.
In response to the request, parking enforcement staff increased the enforcement of existing 72-hour parking regulations. Staff also conducted a field review of the street dimensions and parking conditions on David Way and created a parking layout to install City Standard parking tees on the street. (Attachment 1).
In 2016, a Coastal and Design Permit (CP-0045) was approved by the Zoning Administrator allowing for the installation of single space markings City-wide within the Coastal Zone, in a specific effort to address complaints about long-term parking of oversize vehicles on and along West Cliff Drive. A copy of this report and findings is included here as Attachment 2.
DISCUSSION: David Way is a short street between Oxford Way and West Cliff Drive within the Coastal Zone, which currently has un-marked, unrestricted parking. After review of the current conditions staff proposed the installation of fourteen marked single spaces with appropriate signage in accordance with CP-0045 including buffer zones at driveway approaches and intersections.
A public notice of the proposed parking change was posted at the location on August 29, 2022 for a minimum of 14 days, and staff sent notification to owners and tenants of properties within 300 feet of the affected location in accordance with requirements of the City of Santa Cruz Municipal Code Section
10.16 (Attachments 3 and 4). During this time, staff received an email from a resident of David Way. stating their desire to appeal the proposed changes on September 10, 2022 included here as Attachment
5. After receipt of this appeal, staff sent official notice of the appeal and public hearing via postcards to owners and tenants within 300 feet of the proposed change and placed notification at the affected location in accordance with the requirements of City of Santa Cruz Municipal Code Section 10.16.
FISCAL IMPACT: There is no fiscal impact with this action.
27.5 Transportation and Public Works Commission January 3, 2022 Appeal of New Single Space Markings on David Way – Public Hearing