Agenda packet — Santa Cruz City Council, October 24, 2023 (part 1 of 5)

CITY OF SANTA CRUZ
809 Center Street
Santa Cruz, California 95060

CITY COUNCIL AGENDA
Regular Meeting - October 24, 2023
1:40 P.M. CLOSED SESSION, ZOOM/COURTYARD CONFERENCE ROOM 1:45 P.M. ORAL COMMUNICATIONS, CONSENT, CONSENT PUBLIC HEARINGS, AND

GENERAL BUSINESS, ZOOM/COUNCIL CHAMBERS
The meeting may be viewed remotely, using any of the following sources:
 Click on Zoom link (no time delay): https://zoom.us/j/94684401344  Online at http://www.cityofsantacruz.com/government/city-council/council-meetings  Online at Watch – Community Television of Santa Cruz County  Comcast Channel 25
Or: Call any of the numbers below. If one is busy, try the next one.  1-833-548-0276 (Toll Free)
 1-833-548-0282 (Toll Free)
 1-877-853-5247 (Toll Free)
 1-669-900-9128
 Enter the meeting ID number: 946 8440 1344
 When prompted for a Participant ID, press #.
 Press *9 on your phone to “raise your hand” when the Mayor calls for public comment.  It will be your turn to speak when the Mayor calls on you. Press *6 to unmute yourself. The timer will then be set.

Correspondence to be included in the agenda packet must be received by 5:00 pm on Monday, October 23rd
PLEASE NOTE:
 Council may take a break(s) as needed.
 Requests for extra speaking time on items other than Oral Communications must be made by 5:00 p.m. on Sunday, October 22nd by emailing the Mayor and the City Clerk. Approval will be confirmed via email.
[email protected] [email protected]
October 24, 2023 City Council 2
The City of Santa Cruz does not discriminate against persons with disabilities. Out of consideration for people with chemical sensitivities we ask that you attend fragrance free. Upon request, the agenda can be provided in a format to accommodate special needs. Additionally, if you wish to attend this public meeting and will require assistance such as an interpreter for American Sign Language, Spanish, or other special equipment, please call the City Clerk’s Department at 420-5030 at least five days in advance so that we can arrange for such special assistance, or email [email protected]. The Cal-Relay system number: 1-800-735-2922.

Si desea asistir a esta reunión pública y necesita ayuda - como un intérprete de lenguaje de señas americano, español u otro equipo especial - favor de llamar al Departamento de la Secretaría de la Ciudad al 420-5030 al menos cinco días antes para que podamos coordinar dicha asistencia especial o envié un correo electrónico a [email protected]. El número del sistema Cal-Relay es: 1-800-735-2922.

Agenda and Agenda Packet Materials: The City Council agenda and the complete agenda packet containing public records, which are not exempt from disclosure pursuant to the California Public Records Act, are available for review on the City’s website:
www.cityofsantacruz.com/government/city-council-meetings and at the Office of the City Clerk located at 809 Center Street, Room 9, Santa Cruz, California, during normal business hours.

Agenda Materials Submitted after Publication of the Agenda Packet: Pursuant to Government Code §54957.5, public records related to an open session agenda item submitted after distribution of the agenda packet are available at the same time they are distributed or made available to the legislative body on the City’s website at: www.cityofsantacruz.com/government/city-council-meetings and are also available for public inspection at the Office of the City Clerk, 809 Center Street Room 8, Santa Cruz, California, during normal business hours, and at the Council meeting.

Need more information? Contact the City Clerk’s office at 831-420-5030. 1:40 PM
Closed Session

1. Conference With Legal Counsel – Liability Claims (Government Code §54956.95)
Claimant: Kathleen Gould
Claim against the City of Santa Cruz
October 24, 2023 City Council 3
City Council
1:45 PM
Call to Order
Roll Call
Oral Communications Announcement – Members of the public may address Council on matters not on the agenda, but within the jurisdiction of the Council. 30 minutes is allocated for Oral Communications. No extra time for groups will be granted.

Oral Communications
Presiding Officer's Announcements
Statements of Disqualification
Additions and Deletions
City Attorney Report on Closed Session
Council Meeting Calendar

2. The City Council will review the meeting calendar attached to the agenda and revise it as necessary.

Consent Agenda

3. Minutes of the October 10, 2023 City Council Meeting (CC) Motion to approve as submitted.

October 24, 2023 City Council 4
Consent Agenda (continued)

4. Resolution Urging California Public Employees’ Retirement System (CalPERS) to Invest in Sustainable Energy and Divest from Fossil Fuels and Support Climate-Safe California Goals (CN)
Motion to:
1) Adopt a resolution urging CalPERS to invest in sustainable energy and divest from fossil fuels, and
2) Encourage State and Federal legislation that supports Climate-Safe California goals.

5. Appointments to Housing for Health Partnership Board (CN) Motion to appoint Mayor Keeley and Councilmember Kalantari-Johnson to the Santa Cruz County Housing for Health Partnership (H4HP) Policy Board.

6. Impact Report on Effect of Housing for People Ballot Initiative (CN) Motion to direct the preparation of an impact report on the effect of the proposed Housing for People initiative which would amend the City’s Municipal Code to: (1) prohibit the City Council from amending the City’s General Plan or Zoning Ordinance in a way that increases allowable height limits or floor area ratios without a prior vote of the people; and (2) increases the City’s inclusionary housing requirements to at least 25% for developments with 30 or more units.

7. USDA, Forest Service Type 6 Fire Truck (Engine) – Congressionally Designated Project - Grant Acceptance, Authorization and Appropriation (FD)
Motion to:
1) Adopt a resolution authorizing the City Manager to apply for, accept, and appropriate funds from the USDA Forest Service Grant to purchase a Type 6 Fire Engine and additional equipment; and
2) Adopt a resolution amending the FY 2024 budget to appropriate a $400,000 grant from USDA Forest Service to purchase a Type 6 Fire Engine and additional equipment.

October 24, 2023 City Council 5
Consent Agenda (continued)

8. Liability Claim Filed Against the City of Santa Cruz (FN) Motion to reject the liability claim of Kathleen Gould, based on staff recommendation.

9. Award Contract for Investment Management Services (FN) Motion to:
1) Award a contract for Investment Management Services to PFM Asset Management LLC, San Francisco, California for fiscal years ending June 30, 2023, 2024, 2025, 2026, and 2027 with five option years; and 2) Authorize the City Manager to execute an agreement in a form approved by the City Attorney with PFM Asset Management LLC for Investment Management Services.

10. Year-End Budget Adjustment for FY 2023 (FN)
Resolution amending the FY 2023 budget where annual revenues and expenditures need adjustments in various funds.

11. Resolution Amending the City of Santa Cruz Personnel Complement and Classification and Compensation Plan for the City Manager’s Office, Information Technology, Parks and Recreation, Public Works, and Economic Development and Housing – Budget Adjustment (HR/FN) Motion to:
1) Adopt a resolution amending the Classification and Compensation Plans and the Fiscal Year 2024 Budget Personnel Complement for Information Technology, the City Manager’s Office, Parks and Recreation, Public Works, and Economic Development and Housing; and 2) Adopt a resolution amending the FY 2024 budget in the amount of $636,046 to adjust personnel budgets for Information Technology, City Manager’s Office, Parks and Recreation, Public Works, and Economic Development and Housing.

October 24, 2023 City Council 6
Consent Agenda (continued)

12. Award Agreement for Fee Study for the Departments of Public Works, Parks and Recreation, Economic Development and Housing, Fire, Finance, City Manager’s Office, and Planning and Community Development (PL)
Motion to:
1) Award agreement for citywide Fee Study to MGT of America Consulting, LLC (MGT) in the amount of $139,874; and
2) Authorize the City Manager, or designee, to execute the agreement and any amendments within the approved operating budget and authorized amendments budget, in a form approved by the City Attorney.

13. Recycling Center Storm Water Quality Improvements (c402111) – Award Contract (PW)
Motion to accept the bid of Clear Water Services (Rodeo, CA) for providing storm water treatment system rental at the Resource Recovery Facility Recycling Center in the amount of $129,204.00. The City Manager is hereby authorized and directed to execute the contract in a form approved by the City Attorney. The Director of Public Works is authorized to execute change orders within the approved project budget.

14. Encroachment Permit – Installation of Retaining Wall and Stairs (PW) Resolution granting an encroachment permit to Christen & W.F. Docker to install a retaining wall and stairs in the public right-of-way at 215 4th Avenue.

15. Encroachment Permit – Installation ADA Access Ramp/Sidewalk (PW) Resolution granting an encroachment permit to Lissner Properties, Inc. to install an ADA access ramp/sidewalk in the public right-of-way at 320 Cedar Street (Birch Alley).

October 24, 2023 City Council 7
Consent Agenda (continued)

16. Front-Spruce-Pacific 54-Inch Sewer Rehabilitation (c401606) – Approval of Plans and Specifications, Authorization to Advertise and Award Contract, California Environmental Quality Act Exemption, and Budget Adjustment (PW)
Motion to:
1) Approve the plans and specifications for the Front-Spruce-Pacific 54- Inch Sewer Rehabilitation (c401606), authorize staff to advertise for bids, award the contract. The City Manager is hereby authorized and directed to execute the contract, in a form approved by the City Attorney, and as authorized by Resolution No. NS-27,563. The Director of Public Works is authorized to execute change orders within the approved project budget;
2) Find the project exempt under the California Environmental Quality Act (CEQA); and
3) Adopt a resolution amending the FY 2024 budget and appropriating $8,100,000 from supporting project, c402204 (City WWTF Headworks Replacement), to fund c401606 (Front-Spruce-Pacific 54-Inch Sewer Rehabilitation).

17. Front-Spruce-Pacific 54-Inch Sewer Rehabilitation Project and Wastewater Treatment Facility Headworks Rehabilitation Project – Loan Application and Acceptance (c401606 and c402204) (PW)
Resolution authorizing the Public Works Department to apply for and accept a loan from the California Infrastructure and Economic Development for the Front-Spruce-Pacific 54-Inch Sewer Rehabilitation and Wastewater Treatment Facility Headworks Rehabilitation Projects (c401606 and c402204) in the amount of $33,500,000 and authorizing the City Manager to execute an agreement in a form approved by the City Attorney with California Infrastructure and Economic Development Bank for said loan and its repayment.

October 24, 2023 City Council 8
Consent Agenda (continued)

18. Route 1/9 Intersection Improvement Project (c400805) - Notice of Completion (PW)
Motion to accept the work of Granite Rock, Inc. (Watsonville, CA) as completed per the plans and specifications and authorize the filing of the Notice of Completion for Route 1/9 Intersection Improvement Project (c400805).

19. Branciforte Branch Public Library Renovation (c351801) – Notice of Completion (PW)
Motion to accept the work of JPB Designs, Inc. (Orangevale, CA) as completed per plans and specifications and authorizing the filing of a Notice of Completion for the Branciforte Branch Public Library Renovation Project (c351801).

20. Retaining Wall Reconstruction Project -141 Archer Drive (g402402) (PW) Motion to:
1) Adopt a resolution approving the Application for Federal Assistance SF-424 and Advance of Funds/Reimbursement Agreement for Emergency Watershed Protection Program and authorizing the City Manager to execute said agreements and any amendments in a form acceptable to the City Attorney; and
2) Adopt a resolution amending the FY 2024 budget and appropriating $414,000 for the Retaining Wall Reconstruction Project - 141 Archer Drive (g402402).

21. Award Agreement for Fisheries Biology Support from Hagar Environmental Science (WT)
Motion authorizing the City Manager to execute an agreement in a form to be approved by the City Attorney with Hagar Environmental Science for ongoing fisheries biology support of the City of Santa Cruz's Habitat Conservation Plan development and Incidental Take Permitting, and to authorize the Water Director to execute up to four annual agreement renewals.

End Consent Agenda
October 24, 2023 City Council 9
Consent Public Hearings

22. Tax Equity and Fiscal Responsibility Act (TEFRA) Hearing for Approval of the California Municipal Finance Authority for Issuance of Tax-Exempt Bonds for the Benefit of the Sycamore Street Commons and La Playa Residential Affordable Housing Projects (ED)
Motion to:
1) Conduct the public hearing under the requirements of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the Internal Revenue Code of 1986, as amended (the “Code”); and
2) Adopt a resolution to approve the issuance of Tax-Exempt Revenue Bonds by the California Municipal Finance Authority (“CMFA”) for the benefit of Mercy Housing California 72, L.P., a California limited partnership, or another entity to be established by Mercy Housing California or an affiliate thereof (collectively, the “Borrower”), in an amount not to exceed thirty million dollars ($30,000,000) to provide financing for Sycamore Street Commons and La Playa Residential (the “Project”), such adoption is solely for the purposes of satisfying the requirements of TEFRA, the Code, and the California Government Code Section 6500.

23. Mission Gardens Apartments Amendment to HOME Investment Partnership Regulatory Agreement and Assumption Agreements (ED) Motion to adopt a resolution to:
1) Authorize the City Manager to execute any and all amendments necessary, in a form to be approved by the City Attorney, to change the Managing Agent from John Stewart Company to Rose Community Management LLC including but not limited to Exhibit D of the HOME Investment Partnership Regulatory Agreement, upon close of escrow should Rose Affordable Housing Preservation Fund V Mission Gardens L.P. take ownership of the property located at 90 Grandview Street; and 2) Authorize the City Manager to execute any and all agreements necessary, in a form to be approved by the City Attorney, for Rose Affordable Housing Preservation Fund V Mission Gardens, L.P. to assume all existing affordability requirements currently recorded against 90 Grandview Street and extend the City Redevelopment Agency affordability requirements in perpetuity.

October 24, 2023 City Council 10
Consent Public Hearings (continued)

24. Housing and Urban Development (HUD) Pathways to Removing Obstacles to Housing Grant Program: Authorization for Application, Acceptance, and Appropriation of Grant Funds for Preserving and Promoting Housing Affordability and Climate Resilience in Front Line Communities of Santa Cruz, CA (CM)
Resolution authorizing the City Manager to apply for, accept, and appropriate funds from the Housing and Urban Development (HUD) Pathways to Removing Obstacles to Housing Grant Program to carry out a project entitled “Preserving and Promoting Housing Affordability and Climate Resilience in Front Line Communities of Santa Cruz, CA.”

25. A23-0001: Downtown Plan Amendments Related to Removing Public Hearing Requirements for Day Care and Supportive Housing, Consistent with State Law; Expanding Hotel, Residential, and Recreational Use Allowances; Revising Additional Height Criteria; Adding Language to Encourage Activated Roof Top Amenities; and Amending Landscape Requirements to Allow More Flexibility with Landscaping and Tree Selection (PL)
Motion to:
1) Adopt a resolution approving the amendments to the Downtown Plan and the Local Coastal Program to clarify and update various sections, remove obsolete sections and references, streamline application processes, and bring the Downtown Plan into conformity with State law, finding that the public necessity, and the general community welfare, and good zoning practice shall be served and furthered with the adoption of the Downtown Plan amendments; and that the proposed amendments are in general conformance with the principles, policies, and land use designation set forth in the General Plan, Local Coastal Program, and the Downtown Plan. The amendments include but are not limited to removing public hearing requirements for day care and supportive housing, consistent with state law; expanding hotel, residential, and recreational use allowances; revising additional height criteria; adding language to encourage activated roof top amenities; and amending landscape requirements to allow more flexibility with landscaping and tree selection. An Addendum to the 2017 Downtown Plan Amendments Program Environmental Impact Report (EIR) has been prepared pursuant to California Environmental Quality Act (CEQA) Guidelines sections 15162 and 15164.

October 24, 2023 City Council 11
Consent Public Hearings (continued)

General Business

26. METRO Downtown Transit Center Interim Operations Plan - Approval of Plans and Specifications and Related Actions (ED)
Motion to:
1) Adopt a resolution approving plans and specifications for the METRO Downtown Transit Interim Operations Plan (Plan) pursuant to Government Code Section 830.6 (design immunity), and authorizing removal of unlawfully parked vehicles when the Plan is implemented; 2) Direct staff to review the potential impacts of the Plan on parking revenue with the Downtown Commission;
3) Direct staff to return to the Transportation and Public Works Commission with an update on the conditions of the Plan after it has been implemented;
4) Authorize the City Manager, or designee, to negotiate and enter into a commercial lease with the Santa Cruz Metropolitan Transportation District (METRO) for a storefront facility at 603 and 605 Front Street for a METRO ticket sales/call center function, in a form approved by the City Attorney;
October 24, 2023 City Council 12
General Business (continued)

26. METRO Downtown Transit Center Interim Operations Plan - Approval of Plans and Specifications and Related Actions (ED) (continues) Motion (continued)
5) Adopt a resolution amending the FY 2024 budget to allocate $500,000 of METRO funding to the Pacific Station North Project for the METRO Interim Operations Plan; and
6) Authorize the City Manager to enter into a Memorandum of Understanding with METRO and For the Future Housing/EDEN that defines roles and financing commitments for the Plan.

Adjournment

INFORMATION ITEMS PREVIOUSLY DISTRIBUTED TO CITY COUNCILMEMBERS None issued.

MAYOR'S PROCLAMATIONS
ADDENDUM TO CITY COUNCIL AGENDA – OCTOBER 24, 2023

27. Proclaiming Saturday, October 7, 2023 as “German-American Heritage Day.”

28. Proclaiming October 14, 2023 as “Rainbow Theater Day” and encouraging all citizens to join in celebrating its thirty years of service and dedication to our diverse communities.

29. Proclaiming October 15, 2023 as “Yoga for All Movement Day” and encouraging all citizens to join in expressing heartfelt appreciation for its dedication to helping individuals in the Santa Cruz community and beyond.

October 24, 2023 City Council 13
Advisory Body Appointments
The following positions are vacant. Council will make the appointments at a future meeting.

County Latino Affairs Commission One opening – at-large nomination Sister Cities Committee Three openings – at-large nominations Water Commission One opening – Vice Mayor Golder’s
nomination
Public Hearing
If, in the future, you wish to challenge in court any of the matters on this agenda for which a public hearing is to be conducted, you may be limited to raising only those issues which you (or someone else) raised orally at the public hearing or in written correspondence received by the City at or before the hearing.

Any person seeking to challenge a City Council decision made as a result of a proceeding in which, by law, a hearing is required to be given, evidence is required to be taken, and the discretion in the determination of facts is vested in the City Council, shall be required to commence that action either 60 days or 90 days following the date on which the decision becomes final as provided in Code of Civil Procedure Section 1094.6 Please refer to code of Civil Procedure 1094.6 to determine how to calculate when a decision becomes “final.” The 60-day rule applies to all public hearings conducted pursuant to the City’s Zoning Ordinance, Title 24, Santa Cruz Municipal Code. The 90-day rule applies to all other public hearings.

Meeting Type
Holiday
Jewish Holiday
Regular Meeting
Special Meeting
Study Session (will be added as scheduled)
Budget Hearing
DATE Location Meeting Type
Courtyard Conf. Room Closed Session ‐ Closed to the Public Zoom/Council Chambers Council Regular Meeting ‐ Open to the Public November 10
Courtyard Conf. Room Closed Session ‐ Closed to the Public Zoom/Council Chambers Council Regular Meeting ‐ Open to the Public November 23
November 24
December 7/8
Courtyard Conf. Room Closed Session ‐ Closed to the Public Zoom/Council Chambers Council Regular Meeting ‐ Open to the Public December 25
December 26 Meeting Cancelled ‐ CITY COUNCIL DARK
City Hall Closure ‐ Christmas Day
Hanukkah (City observed ‐ sundown to sundown)
November 14
City Hall Closure ‐ Veteran's Day (observed)
Please note: Meeting times are not final and are likely to change City Council Meeting Calendar for 2023
November 28
December 12
City Hall Closure ‐ Thanksgiving Day
City Hall Closure ‐ Day After Thanksgiving Day

2.1 MINUTES ARE UNOFFICIAL UNTIL APPROVED BY COUNCIL
City of Santa Cruz
809 Center Street
Santa Cruz, California 95060

MINUTES OF A CITY COUNCIL MEETING
October 10, 2023
1:00 PM
Mayor Keeley opened the City Council Closed Session at 1:02 p.m. in a public meeting via Zoom and in Council Chambers, for the purpose of announcing the agenda, and receiving public testimony.

Roll Call

Present: Councilmembers Newsome, Brown, Watkins, Brunner, KalantariJohnson; Vice Mayor Golder; Mayor Keeley.

Absent: None.

Staff: City Manager M. Huffaker, Assistant City Manager L. Schmidt, City Attorney T. Condotti, Deputy City Clerk Administrator J. Wood, City Clerk Administrator B. Bush.

Public Comment
Mayor Keeley opened the public comment period at 1:02 p.m. There were no speakers. Mayor Keeley closed the public comment period at 1:02 p.m., at which time the meeting was closed to the public and Council adjourned to the Courtyard Conference Room.

Closed Session

1. Conference With Legal Counsel – Anticipated Litigation (Government Code §54956.9(d)(2))
Significant exposure to litigation (one potential case to be discussed) Council received a status report and took no reportable action.

3.1 October 10, 2023 CITY COUNCIL MINUTES 6586
City of Santa Cruz
809 Center Street
Santa Cruz, California 95060

MINUTES OF THE ANNUAL MEETING OF THE

BOARD OF DIRECTORS OF THE INDUSTRIAL DEVELOPMENT AUTHORITY October 10, 2023
1:15 PM
Call to Order – at 1:36 p.m.

Roll Call

Present: Directors Newsome, Brown, Watkins, Brunner, Kalantari-Johnson; Vice Chair Golder; Chair Keeley.

Absent: None.

General Business

2. Election of Officers
MOTION: Director Watkins moved, seconded by Director Brown, to elect new officers as set forth in Section 3.02 of the Industrial Development Authority bylaws as follows:

Executive Director: City Manager M. Huffaker
Chief Financial Officer: Director of Finance E. Cabell
Chair: Mayor Keeley
Vice Chair: Vice Mayor Golder
Secretary/Treasurer: City Clerk Administrator B. Bush
ACTION: The motion carried unanimously with the following vote.

AYES: Directors Newsome, Brown, Watkins, Brunner, KalantariJohnson; Vice Chair Golder; Chair Keeley.

NOES: None.

ABSENT: None.

DISQUALIFIED: None.

3.2 October 10, 2023 CITY COUNCIL MINUTES 6587
General Business (continued)

3. Minutes of the October 11, 2022 Industrial Development Authority (IDA) Chair Keeley opened the public comment period. There were no speakers.

Chair Keeley closed the public comment period.

MOTION: Director Newsome moved, seconded by Director Brunner, to approve as submitted.

ACTION: The motion carried unanimously with the following vote.

AYES: Directors Newsome, Brown, Watkins, Brunner, KalantariJohnson; Vice Chair Golder; Chair Keeley.

NOES: None.

ABSENT: None.

DISQUALIFIED: None.

Adjournment - The Industrial Development Authority adjourned at 1:39 p.m.

3.3 October 10, 2023 CITY COUNCIL MINUTES 6588
City of Santa Cruz
809 Center Street
Santa Cruz, California 95060

MINUTES OF THE ANNUAL MEETING OF THE BOARD OF DIRECTORS OF

THE SANTA CRUZ PUBLIC IMPROVEMENT FINANCING CORPORATION October 10, 2023
At or around 1:20 PM
Call to Order – at 1:39 p.m.

Roll Call

Present: Directors Newsome, Brown, Watkins, Brunner, Kalantari-Johnson; Vice President Golder; President Keeley.

Absent: None.

General Business

4. Election of Officers
MOTION: Director Brown moved, seconded by Director Watkins, to elect new officers as set forth in Section 3.02 of the Santa Cruz Public Improvement Financing Corporation bylaws as follows:

Executive Director: City Manager M. Huffaker
Chief Financial Officer: Director of Finance E. Cabell
President: Mayor Keeley
Vice President: Vice Mayor Golder
Secretary/Treasurer: City Clerk Administrator B. Bush
ACTION: The motion carried unanimously with the following vote.

AYES: Directors Newsome, Brown, Watkins, Brunner, KalantariJohnson; Vice President Golder; President Keeley.

NOES: None.

ABSENT: None.

DISQUALIFIED: None.

3.4 October 10, 2023 CITY COUNCIL MINUTES 6589
General Business (continued)

5. Minutes of the October 11, 2022 Santa Cruz Public Improvement Finance Corporation (SCPIFC)
President Keeley opened the public comment period. There were no speakers.

President Keeley closed the public comment period.

MOTION: Director Newsome moved, seconded by Director KalantariJohnson, to approve as submitted.

ACTION: The motion carried unanimously with the following vote.

AYES: Directors Newsome, Brown, Watkins, Brunner, KalantariJohnson; Vice President Golder; President Keeley.

NOES: None.

ABSENT: None.

DISQUALIFIED: None.

Adjournment - The Santa Cruz Public Improvement Financing Corporation adjourned at 1:41 p.m.

3.5 October 10, 2023 CITY COUNCIL MINUTES 6590
City of Santa Cruz
809 Center Street
Santa Cruz, California 95060

MINUTES OF A CITY COUNCIL MEETING
October 10, 2023
At or around 1:25 PM
Call to Order – Mayor Keeley called the meeting to order at 1:41 p.m. in Council Chambers.

Roll Call

Present: Councilmembers Newsome, Brown, Watkins, Brunner, KalantariJohnson; Vice Mayor Golder; Mayor Keeley.

Absent: None.

Staff: City Manager M. Huffaker, City Attorney T. Condotti, Assistant City Manager L. Schmidt (via Zoom), Chief of Fire R. Oatey, Director of Planning and Community Development L. Butler, Director of Finance E.

Cabell, Chief of Police B. Escalante (via Zoom), Director of Economic Development and Housing B. Lipscomb (via Zoom), Director of Information Technology K. Morgan (via Zoom), Deputy City Manager L.

Murphy (via Zoom), Director of Public Works N. Nguyen (via Zoom), Water Director R. Menard (via Zoom), Associate Planner N. Concepcion, Deputy City Clerk Administrator J. Wood, City Clerk Administrator B.

Bush.

Oral Communications Announcement - The Mayor provided a brief announcement about Oral Communications.

Oral Communications
At 1:41 p.m. Mayor Keeley opened Oral Communications for members of the public who wished to speak regarding items not listed on the City Council agenda.

Lee Brokaw spoke regarding parking limitations for the Santa Cruz Farmers’ Market, the time of Oral Communications, and the fee the Water Department charged to read his meter.

Garrett spoke regarding the Hamas attack on Israel, the Walnut Street heritage tree addressed at the previous meeting, and the development of the 50-year West Cliff vision process.

3.6 October 10, 2023 CITY COUNCIL MINUTES 6591
Oral Communications (continued)
James Ewing Whitman spoke regarding working with and helping older people, and stated he has questions for the County about their Facebook post.

Rachel Sotos spoke regarding a COVID Truth Commission that she would like the City Council to establish.

At 1:51 p.m. Mayor Keeley closed Oral Communications.

Presentations

6. Fire Prevention Week: October 8—October 14, 2023
Fire Chief R. Oatey gave a presentation on Fire Prevention Week.

Presiding Officer's Announcements – Vice Mayor Golder called for a moment of silence in honor of the innocent civilians who have lost their lives in Israel.

Statements of Disqualification – None.

Additions and Deletions – None.

City Attorney Report on Closed Session – See page 6585 for the report.

Council Meeting Calendar

7. The City Council reviewed and did not revise the meeting calendar attached to the agenda.

Consent Agenda
Mayor Keeley opened the public comment period. The following people spoke:

Unidentified person requested items 8, 10, 12, and 16 be pulled from the Consent Agenda.

Candace Brown spoke regarding item 15.

Unidentified person spoke regarding items 17, 16.

Mayor Keeley closed the public comment period.

3.7 October 10, 2023 CITY COUNCIL MINUTES 6592
Consent Agenda (continued)
Director of Public Works N. Nguyen responded to Council questions regarding item 14.

Councilmember Brown made a comment on item 15.

MOTION: Councilmember Kalantari-Johnson moved, seconded by Vice Mayor Golder, to approve the Consent Agenda.

ACTION: The motion carried unanimously with the following vote.

AYES: Councilmembers Newsome, Brown, Watkins, Brunner, KalantariJohnson; Vice Mayor Golder; Mayor Keeley.

NOES: None.

ABSENT: None.

DISQUALIFIED: None.

8. Resolution Extending the Emergency Declaration in Connection with the December 2022 and January 2023 Winter Storms (CA/CM)
Resolution No. NS-30,208 was adopted extending by sixty days the Local Emergency Declaration in connection with the December 2022 and January 2023 winter storms.

9. Minutes of the September 26, 2023 City Council Meeting (CC) Motion carried to approve as submitted.

10. Resolution Ratifying Identifying Authorized Agents (FN) Resolution No. NS-30,209 was adopted identifying authorized agents on behalf of the City of Santa Cruz who are authorized by the City Council to engage with the Federal Emergency Management Agency (FEMA) and the California Office of Emergency Services (Cal OES) regarding grants that have been applied for.

3.8 October 10, 2023 CITY COUNCIL MINUTES 6593
Consent Agenda (continued)

11. Contract Amendment for Kimley-Horn & Associates for Professional Consultant Services Related to the Housing Element Update, Including but Not Limited to Addressing Additional Comments from the State Department of Housing and Community Development on the Draft Housing Element and Additional Work to Update the Safety Element of the General Plan through Adoption of the Housing Element (PL)
Motion carried accepting the report and authorizing the City Manager to execute a contract amendment, in a form approved by the City Attorney, with Kimley-Horn Associates in an amount not to exceed $31,139, based on the attached scope of work and budget.

12. 2023 Traffic Signal Interconnect Improvement Agreement (c401602) (PW) Motion carried to:
 Adopt Resolution No. NS-30,210 approving the 2023 Traffic Signal Interconnect Improvement Agreement and authorizing the City Manager to execute said agreement and any amendments in a form acceptable to the City Attorney with the County of Santa Cruz Department of Community Development and Infrastructure, and
 Adopt Resolution No. NS-30,211 granting a regular encroachment permit to the County of Santa Cruz Department of Community Development and Infrastructure for installation and maintenance of fiber optic cable in various streets within the City’s right-of-way.

13. Grinding Service for Green Waste, Wood Waste, and Construction and Demolition Material – Award Contract (PW)
Motion carried to accept the change order from Vision Recycling (Fremont, CA) for additional grinding service for green waste, wood waste, and construction and demolition material in the amount of $87,800, for a total contract amount of $170,727. The City Manager is hereby authorized and directed to execute the contract in a form approved by the City Attorney. The Public Works Director is authorized to execute change orders within the approved project budget.

3.9 October 10, 2023 CITY COUNCIL MINUTES 6594
Consent Agenda (continued)

14. Bay Drive Protected Bike Lanes and Pedestrian Path (c402304) – Reject All Bids (PW)
Motion carried to reject all bids for the Bay Drive Protected Bike Lanes and Pedestrian Path (c402304).

15. Caltrans Sustainable Transportation Planning Grant Award - Active Transportation Plan Update (PW)
Motion carried to:
 Adopt Resolution No. NS-30,212 authorizing the City Manager to execute agreements with the California Department of Transportation for the City of Santa Cruz Active Transportation Plan Update, and
 Adopt Resolution No. NS-30,213 amending the FY 2024 budget and appropriating funds in the amount of $434,850 to fully fund the Active Transportation Plan Update (c402408).

16. Water Supply Augmentation Planning (WT)
Motion carried authorizing the City Manager to execute the Fifth Amendment to the Professional Services Agreement for Phase 2 Recycled Water Facility Study/Water Supply Augmentation Implementation Plan in the amount of $388,146 with Kennedy Jenks (San Francisco, CA) in a form to be approved by the City Attorney.

17. Loch Lomond Recreation Area Fees (WT)
Resolution No. NS-30,214 was adopted revising the Loch Lomond Recreation Area fee schedule and rescinding Resolution No. NS-29,482.

End Consent Agenda

3.10 October 10, 2023 CITY COUNCIL MINUTES 6595
Public Hearing

18. 925 Windsor Street: CP22-0114 (APN 011-073-13) Appeal of the Planning Commission Approval of the Development Proposal at 925 Windsor Street Involving a Residential Demolition Authorization Permit and a Large Home Design Permit to Demolish a Single-Family Home on a Site with an Existing Accessory Dwelling Unit in the R-1-5 (Single Family Residential) Zone District.

Environmental Determination: Categorical Exemption. Owner: Justin and Hart Walsh. (PL)
Associate Planner N. Concepcion gave a presentation and responded to Council questions.

Appellant Matt Farrell spoke regarding this item.

Applicant Hart Walsh spoke regarding this item and responded to Council questions.

City Attorney T. Condotti responded to Council questions.

Mayor Keeley opened the public comment period. The following people spoke.

Garrett
Anina Van Alstine
Unidentified person
Unidentified person
Dorie Melville
Jerry Spodick
Mayor Keeley closed the public comment period.

Appellant Matt Farrell provided a rebuttal.

Council took a break at 3:45 and returned at 4:02 p.m.

3.11 October 10, 2023 CITY COUNCIL MINUTES 6596
Public Hearing (continued)

18. 925 Windsor Street: CP22-0114 (APN 011-073-13) Appeal of the Planning Commission Approval of the Development Proposal (PL) (continued) MOTION: Councilmember Brunner moved, seconded by Mayor Keeley, to adopt Resolution No. NS-30,215 to deny the appeal and uphold the Planning Commission’s acknowledgment of the environmental determination (Categorical Exemption Section 15332, Class 32) and approval of the Residential Demolition Authorization Permit and Large Home Design Permit, based on the findings and the Conditions of Approval (“Exhibit A”), with the following modifications:
 At the second floor, southwest corner area:
 Provide a stepback on the second floor, front (south) elevation of at least 2 feet from the first floor for the “Primary Bedroom 3.” This stepback shall extend for the width of the bedroom, including the closet.
 Provide a stepback on the second floor, side (west) elevation of at least 2 feet from the first floor for the “Primary Bedroom 3.” This stepback shall extend the length of the bedroom (approximately 19 feet) and would not need to extend into the connected bathroom.
 On the gable ends facing Windsor Street, a separate material or detailing shall be incorporated to improve the street-facing aesthetics.  Reduce the height from 9 feet to 8 feet to help with perceived massing.

Prior to submittal of a building permit for the project, the applicant shall submit revised floor plans and revised elevation drawings articulating the proposed changes, for administrative approval by staff. Staff shall retain discretion to require varied roof forms on the front elevation and may exercise some discretion in achieving the intent of this motion through slight modification of the standards, so long as the intent, which is to further reduce the massing of the second story front elevation and to improve the aesthetics, is retained.

Director of Planning and Community Development L. Butler responded to Council questions.

3.12 October 10, 2023 CITY COUNCIL MINUTES 6597
Public Hearing (continued)

18. 925 Windsor Street: CP22-0114 (APN 011-073-13) Appeal of the Planning Commission Approval of the Development Proposal (PL) (continued) ACTION: The motion carried with the following vote.

AYES: Councilmembers Newsome, Brown, Watkins, Brunner,
Kalantari-Johnson; Mayor Keeley.

NOES: Vice Mayor Golder.

ABSENT: None.

DISQUALIFIED: None.

General Business

19. An Ordinance Requiring Delivery Companies to Provide a Service Enabling Customers to Tip Delivery Drivers (CN)
This item was continued to the November 14, 2023 Council meeting and was not heard.

Adjournment – Vice Mayor Golder moved, seconded by Councilmember Watkins, to adjourn. By consensus City Council adjourned at 4:32 p.m.

Respectfully Submitted:

Julia Wood, Deputy City Clerk Administrator
Attest:

Bonnie Bush, City Clerk Administrator
Approved:

Fred Keeley, Mayor

3.13 City Council

AGENDA REPORT
DATE: 10/09/2023
AGENDA OF: 10/24/2023
DEPARTMENT: City Council
SUBJECT: Resolution Urging California Public Employees’ Retirement System (CalPERS) to Invest in Sustainable Energy and Divest from Fossil Fuels and Support Climate-Safe California Goals (CN)
RECOMMENDATION: Motion to:
1) Adopt a resolution urging CalPERS to invest in sustainable energy and divest from fossil fuels, and
2) Encourage State and Federal legislation that supports Climate-Safe California goals.

BACKGROUND: As described in the City’s Climate Action Plan 2030 (CAP 2030) adopted in 2022, carbon emissions are the driving force of human-caused climate change. The United Nation’s Intergovernmental Panel on Climate Change (IPCC) Sixth Assessment Report, https://www.ipcc.ch/report/ar6/wg1/#SPM, found that climate change and global warming are already causing costly disruption of human and natural systems throughout the world including the melting of Arctic ice, the ocean’s rise in acidity, increased wildfires, flooding, and drought.

Almost every government in the world has agreed through the 2015 Paris Agreement that any warming above a 3.6°F (2°C) rise would be unsafe, to pursue efforts to limit the increase to

2.7°F (1.5°C) and that humans can only release 500 more gigatons of carbon dioxide into the atmosphere to maintain this limit. The City adopted a resolution in support of the Paris Agreement in 2017. The Carbon Tracker Initiative, https://carbontracker.org/resources/termslist/#carbon-budgets, found that fossil fuel companies possess proven fossil fuel reserves that would release 2,800 gigatons of carbon dioxide if they are burned, which is over five times the amount that can be released without exceeding 2°C of warming.

California has been a leader in addressing climate change. Under State law, California must procure 60% of all electricity from renewable resources by 2030 and be carbon free by 2045.

Senate Bill (SB) 32, approved in 2016, requires California’s greenhouse gas (GHG) emissions to be 40% below 1990 levels by 2030. State policies around climate change have been evolving based on the latest science, with an acceleration of these efforts necessary to address the projections in the latest report by the United Nations’ Intergovernmental Panel on Climate Change (IPCC), which says that the only way to stay below 2.7°F (1.5°C) is to have carbon emissions peak in 2025, followed by a rapid decline and reaching net-zero by the middle of the century.

4.1 Locally, in 2018, the City initiated a lawsuit against 29 fossil fuel companies for the impacts of climate change and in 2019 former mayor Watkins co-sponsored a resolution at the Conference of Mayors to support cities’ rights to protect taxpayers from climate change costs. More recently, Through the CAP 2030 development process, completed extensive research and planning on measures to mitigate our impacts on climate change. In addition to adopting a legal target consistent with the SB 32 requirements of reducing GHGs to 40% of 1990 levels by 2030, the City set an aspirational goal to reach carbon neutrality by 2035.

To achieve its emissions reductions goals, the CAP 2030 includes a series of measures and 152 actions that include programs, policies, and projects. CAP measures related to divestment include (1) implementing a fossil fuel divestment policy (M9.3), (2) integrating the CAP into the City's upcoming Master Investment Strategy/ Financial Plan Development, Master Fee Evaluation and Cost Evaluation Plan and its change management process (M9.8), and (3) supply chain monitoring and end of life handling of renewable energy and other climate supportive products and technologies to avoid slave labor, environmental degradation from extraction and/or disposal in frontline communities, and advocate for the elimination of these processes globally (M9.10). Measures M9.3 and M9.8 are included in various departments’ CAP 2030 workplans for 2023.

Despite the pressing need to mitigate the most drastic impacts of climate change, government efforts to maintain global warming below 2.7°F (1.5°C), and a recognition that extraction of the remaining fossil fuels reserves is not feasible without catastrophic consequences for the global community, CalPERS, the largest pension fund in the United States and the pension fund for City employees, remains heavily invested in fossil fuels. CalPERS currently holds over $450 billion in investments with approximately $9.4 billion of those assets invested in the 200 largest fossil fuel companies, a position that is in direct opposition to the goals of the City.

DISCUSSION: Over the past decade, one of the most effective strategies for reducing emissions at the global level has been to divest from investments in fossil fuels and to invest in sustainable energy sources, such as solar, wind, and geothermal energy companies. Currently, over 1500 organizations have divested a total of $39 trillion from the fossil fuel industry, according to Fossil Free California, https://fossilfreeca.org/california-pensions-fail-to-engage-areview-of-calpers-and-calstrs-votes-against-shareholder-climate-resolutions/. Additionally, the past decade has seen institutions and investment funds such as the New York State Common Retirement Fund, California State University System, Ford Foundation, and the Chicago Teachers’ Pension Fund commit to fully divesting from fossil fuels.

Fiscally, divesting from fossil and investing in sustainable energy has proven to be economically successful. The world’s largest investment house, BlackRock, confirmed in a critical research report, https://ieefa.org/wp-content/uploads/2021/03/BlackRock-Phase-Two.pdf, commissioned by New York City that divestment from fossil fuels has been economically successful for those who have done so and would continue to be so based on historical data. A recent report from Stand Earth, (attached), documents the overall economic advantages of investing in sustainable energy over fossil fuels. For example, compare the 5-year annualized total returns of the Standard and Poor’s (S&P’s) Global Clean Energy Index, which tracks the performance of “global clean energy-related business,” to both the S&P 500 market benchmark and the S&P’s energy sector index, which tracks major U.S. companies in all sectors of the fossil fuel supply chain. The Clean Energy Index, with annualized returns of about 22%, beat the market’s 17%

4.2 (Total Market Index). Meanwhile, the fossil fuel index lost money, with annualized returns of -

1.6%.

State legislation is needed to ensure CalPERS fully divest their investment portfolio from all fossil fuels. In 2015, the State approved SB 185, also called “Investing with Values and Responsibility,” which calls for the CalPERS and the California State Teachers’ Retirement System to begin a divestment process in any holdings of thermal coal, and to complete that divestment within 18 months. The next critical step in this process is to urge further investment in clean energy companies, and to require divestment from the remaining fossil fuels, including natural gas and oil.

The resolution (attached) supports the City’s Health in All Policies (HiAP) initiative which prioritizes public health, sustainability, and equity in City policy and decision making.

Specifically, the resolution directly supports the City’s sustainability efforts by advancing progress on CAP 2030 action M9.3: implement a fossil fuel divestment policy and calling on CalPERS to invest in sustainable energy. Historically disadvantaged communities often are the most vulnerable to and most negatively impacted by global warming and climate change. This resolution addresses public health and equity by directing City staff to support legislation that will help reduce and mitigate the negative impacts of climate change.

The City is a both a national and regional leader on climate change. Additionally, the City has one of the most advanced and ambitious CAPs in the state. In the past decade surrounding cities such as Watsonville, Oakland, Berkeley, Mountain View have passed resolutions calling on CalPERS to divest from fossil fuels. In order to support the City’s CAP 2030 goals and maintain its position as a municipal leader on climate change it is recommended that the City pass a resolution urging CalPERS to divest from fossil fuels and direct staff to support state and federal legislation that supports Climate-Safe California Goals.

FISCAL IMPACT: Requesting CalPERS to invest in sustainable energy and divest from fossil fuels would not have a direct fiscal impact on the City’s General Fund. Directing staff to support State and Federal legislation that supports Climate-Safe California goals would incur a minimal cost of staff time.

Submitted By:

Fred Keeley
Mayor
Submitted By:

Scott Newsome
Councilmember
Submitted By:

Sandy Brown
Councilmember
ATTACHMENTS:

1. RESOLUTION.DOCX

2. DIVEST-INVEST 2021 REPORT FROM STAND EARTH.PDF

4.3 RESOLUTION NO. NS-XX,XXX

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CRUZ URGING

CALPERS TO INVEST IN SUSTAINABLE ENERGY AND DIVEST FROM FOSSIL FUELS

AND ENCOURAGE STATE AND FEDERAL LEGISLATION THAT SUPPORTS

CLIMATE-SAFE CALIFORNIA GOALS
WHEREAS, the climate crisis is a serious threat to current and future generations here in the City of Santa Cruz and around the world; and
WHEREAS, the United Nation’s Intergovernmental Panel on Climate Change (IPCC) Sixth Assessment Report found that global warming is already causing costly disruption of human and natural systems throughout the world, including the melting of Arctic ice, the ocean’s rise in acidity, increased wildfires, flooding, and drought; and WHEREAS, almost every government in the world has agreed through the 2015 Paris Agreement that any warming above a 2° C (3.6° F) rise would be unsafe, and to pursue efforts to limit the increase to 1.5° C (2.7° F) and that humans can only create 500 more gigatons of carbon dioxide into the atmosphere to maintain this limit; and WHEREAS, the Carbon Tracker Initiative, https://carbontracker.org/resources/termslist/#carbon-budgets, found that fossil fuel companies possess proven fossil fuel reserves that would release approximately 2,800 gigatons of CO2 if they are burned, which is over five times the amount that can be released without exceeding 2° C of warming; and WHEREAS, the City of Santa Cruz seeks to protect the lives and livelihoods of its inhabitants from the threat of climate change; and
WHEREAS, the City of Santa Cruz’s Climate Action Plan sets greenhouse gas emission targets that are achievable through a combination of reduced energy use and a transition to renewable energy use; and
WHEREAS, the City of Santa Cruz believes that investments should support a future where all residents can live healthy lives without the negative impacts of a warming environment; and WHEREAS, more than 1,500 organizations throughout the world have launched campaigns to have their institutions invest in sustainable energy and divest from fossil fuel companies; and
WHEREAS, the California Public Employees’ Retirement System (CalPERS) has holdings of over $9 billion in the 200 largest fossil fuel companies; and WHEREAS, clean and sustainable energy is now outperforming the fossil fuel market.

4.4 RESOLUTION NO. NS-XX,XXX
2 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Santa Cruz as follows:

1. That the City Council hereby urges the Pension Board of CalPERS to review their investment portfolio to identify holdings that include direct or indirect investments in fossil fuel companies as well as in sustainable and renewable energy.

2. That the City Council urges CalPERS to ensure that it increases investments in sustainable and renewable energy, and that none of its investments or commingled assets include holdings in fossil fuel public equities and corporate bonds within 5 years.

3. That the City Council urges CalPERS to release quarterly updates, available to the public, detailing progress made towards investment in sustainable energy and divestment of fossil fuels, including indirect and commingled assets.

4. That the City Council urges CalPERS to prepare a report discussing options for investing funds removed from fossil fuel stocks in a way that maximizes their positive impact by seeking out investments in opportunities to limit the effects of burning fossil fuels or help to mitigate its effects including, but not limited to, clean technology and renewable energy, sustainable companies or projects, and sustainable communities with an emphasis on investments that would support local projects and local jobs.

5. That the City Council encourages State and Federal legislation that supports the City’s Climate Action Plan goals as well as legislation ensuring that public pension funds are only investing in sustainable and renewable energy portfolios and are divesting from fossil fuels, by meeting with legislators and developing Council resolutions or letters of support.

6. That the City Clerk shall send a copy of this resolution to the Pension Board of California Public Employees’ Retirement System (CalPERS) as well as to the State legislators that represent the City of Santa Cruz.

PASSED AND ADOPTED this 24th day of October, 2023 by the following vote:

AYES:

NOES:

ABSENT:

DISQUALIFIED:

APPROVED: ______________________________
Fred Keeley, Mayor
ATTEST: _________________________________
Bonnie Bush, City Clerk Administrator

4.5 1
Invest
Divest
2021

A DECADE

OF PROGRESS

TOWARDS A JUST

CLIMATE FUTURE

4.6 TABLE OF CONTENTS
EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 THE IMPACT OF THE MOVEMENT . . . . . . . . . . . . . . . . . . . . . 4 A decade of history . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 A broader and deeper movement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Case Study: Divestment Gains Ground in South Africa . . . . . 11 Game-changing divestment commitments . . . . . . . . . . . . . . . . . . . . . 12 Case Study: All Institutions. All Assets. All Fossil Fuels.

Why Partial Divestment is No Longer Enough. . . . . . . . . . . . . . . 15 Broader pressure on fossil fuel finances . . . . . . . . . . . . . . . . . . . . . . 16 Engagement cannot replace divestment . . . . . . . . . . . . . . . . . . . . . . . 17

DIVEST-INVEST IS THE SMART
FINANCIAL CHOICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Divestment raises profits and lowers risk . . . . . . . . . . . . . . . . . . . . . . . 18 Case Study: Legal Pressure on Harvard to Divest . . . . . . . . . . 20 Fossil fuel industry in decline . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Divest-Invest movement impact on the fossil fuel industry . . . . 23 The rise of renewables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 INVESTING IN A RAPID, JUST TRANSITION . . . . 25
Why investment in a just transition needs to scale quickly ..... 25 Case Study: Navajo Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Mission-driven investors must lead on a just transition . . . . . . . . 30 Case Study: Frontier Markets in India . . . . . . . . . . . . . . . . . . . . . 32 CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 METHODOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 ENDNOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

4.7 2
Amidst a depressing era in the race against climate change--with killer fires and titanic storms, political stalemate and corporate greenwashing--the fossil fuel divestment movement is a source for tremendous optimism.

Ten years in, the divestment movement has grown to become a major global influence on energy policy. There are now 1,485 institutions publicly committed to at least some form of fossil fuel divestment, representing an enormous $39.2 trillion of assets under management. That’s as if the two biggest economies in the world, the United States and China, combined, chose to divest from fossil fuels.

Since the movement’s first summary report in 2014, the amount of total assets publicly committed to divestment has grown by over 75,000 percent. The number of institutional commitments to divestment has grown by 720 percent in that time, including a 49 percent increase in just the three years since the movement’s most recent report. The true amount of money being pulled out from fossil fuels is almost certainly larger since not all divestment commitments are made public.

The movement has now expanded far beyond its origins as a student-driven effort on college campuses. Divestment campaigners now target cities, states, foundations, banks, investment firms, and any player who participates in the global investment pool. Major new divestment commitments from iconic institutions have arrived in a rush over just a few months in late 2021, including Harvard University, Dutch and Canadian pension fund giants PME
and CDPQ, French public bank La Banque Postale, the U.S. city of Baltimore, and the Ford and MacArthur Foundations.

The movement has gone global: originally less than a quarter of divestment campaigns were based outside of the U.S., now it is more than two thirds. Related financial campaigns have sprung up to target bankers, asset managers, and insurers, cutting the fossil fuel industry off from the financial services they depend on for expansion.

With this growth, divestment has proven successful at its core goal of helping to delegitimize fossil fuel companies as political players.

While the remaining power of these companies should not be underestimated, it has clearly diminished. Public opinion of fossil fuel use has plummeted both globally and in the U.S. For the first time, a majority of the U.S. candidates for President refused to take fossil fuel money in an election. Divestment-inspired campaigns have stalled or halted fossil fuel projects from Nebraska to Uganda.

The movement has grown so large that it is now helping hold fossil fuel companies accountable for the true cost of their unregulated carbon pollution. Oil companies themselves have started to admit that the divestment movement is raising their costs and hampering their profits and access to capital. Credit ratings agencies take it into consideration in their analyses. The divestment movement has become a market factor.

It’s not a blow the fossil fuel industry is well positioned to absorb.

This year has seen a short-term surge in oil prices and stock market gains, but over the last nine years, fossil fuel stocks have routinely underperformed the market. Institutional investors are focused on these long term trends. Big Oil once dominated Wall Street, literally setting the market pace as a major component of both the Dow Jones Industrial Average and S&P 500 indices. But those days are over. ExxonMobil was kicked off the Dow in 2020.

Oil and gas companies now make up only 2.7 percent of the stock market’s value, down from 28 percent, even with recent gains.

EXECUTIVE SUMMARY

4.8 3
One of the most important victories for the movement has been the financial elite’s gradual acceptance of the movement’s core financial arguments. Fossil fuels are a bad bet financially. It was once considered a fringe position to argue that the fossil fuel industry’s value is dependent on “stranded assets”--fuel reserves still buried in the ground that will become worthless in a clean, renewable energy future. Now the concept is cited by BlackRock, the largest investment house in the world, as a reason to divest.

The movement can now also offer solid proof that divestment is a sound financial strategy. Early adopters of divestment strategies are reporting positive financial results. Surveys and analyses by Wall Street firms support it. Divestment now moves in a positive feedback loop. As more and more institutions announce their plans to divest, many cite the financial reality that climate change will make fossil fuels obsolete and a renewable energy future inevitable. And by doing so, they are both hastening that change and convincing others of its inevitability.

But more needs to be done. In the past few years it has become painfully clear that the pace of investment in renewable energy systems, as well as in sustainable climate solutions more broadly, is woefully insufficient. That is why this report is titled “Invest-Divest.” The International Energy Agency, in their landmark roadmap to a net-zero future released earlier this year, said that achieving the world’s climate goals requires investors to more than triple the amount of money flowing to renewable energy projects by 2030.

A delayed transition will be expensive, and so a rapid increase in investment is critical for the health of the world economy. Such investment is also likely to be profitable for institutions.

How that money is invested will be just as important as where it is invested. There is increased recognition of the need for a just transition, one that avoids the mistakes of past economic shifts and centers economic, gender, and racial justice. Workers and communities who have depended on fossil fuels, Indigenous communities who have faced generations of injustice, women and children who are disproportionately impacted by the effects of climate change--none of them can be left behind. As with divestment, there is evidence that investing in a just transition makes economic sense, but it will take mission-driven institutions to lead the way for the larger investment community. This will be a time of serious upheaval for many people. When conceived broadly, a just transition carries with it great possibility for positive change.

After ten years, it is clear the tremendous impact that the movement has already had, and the huge potential it holds for growth. But it is time for the movement to go even bigger. The latest IPCC report confirms that there are less than nine years left to make transformative changes to the world’s energy systems and economies before facing dangerous and irreversible damage to the climate.1
Going forward, the divest-invest movement must keep
up the pressure and make three demands of institutional investors across the world:

1. All institutional investors must make an immediate public commitment to fully divest from and stop all financing of coal, oil, and gas companies and assets. Institutions that have partially divested must now divest all of their assets from all fossil fuels. As linked to this commitment, all institutions must align their policy, regulatory positions, and political expenditures with this commitment.

2. All institutional investors must immediately move to invest a minimum of 5 percent of their assets in climate solutions, doubling to 10 percent by 2030, including investments in renewable energy systems, universal energy access, and a just transition for communities and workers. Further, investors must hold these companies accountable to respecting
Indigenous and other human rights and environmental
standards.

3. To achieve Net Zero emissions by 2050, all institutional investors should adopt Net Zero plans that both immediately cut investments in fossil fuels and ensure that all other assets in their portfolio develop transition plans that halve absolute emissions by 2030, consistent with science’s demands to limit global warming to 1.5°C.

Institutional investors everywhere are beginning to come to terms with the danger that fossil fuels pose to their investment portfolios, their communities, and their constituencies. This realization is important but it is not enough. Institutions around the world must step up now and commit to joining the divest-invest movement before it is too late--for them, for the economy, and for the world.

4.9 4
THE GROWTH OF THE DIVEST-INVEST MOVEMENT AND ITS IMPACT HAS EXCEEDED NEARLY ALL EXPECTATIONS.

The total amount of assets under management committed to some form of fossil fuel divestment has leaped from a mere $52 billion across 181 institutions in 2014, when the movement first tallied all total commitments,2 to now more than $39.2 trillion across 1,485 institutions. This growth includes both new commitments and portfolio growth among previously committed institutions. (See Methodology section below.) By comparison, the gross domestic products of the world’s two largest economies, the United States and China, were only $20.9 trillion and $14.7 trillion, respectively, in 2020.3
The rate of growth has accelerated. While the first three years of the campaign netted 181 public commitments, the most recent three years have seen 485 new commitments.4
These numbers reflect only known, public commitments to divestment. More institutions, to say nothing of individual investors, are almost certainly divesting in numbers beyond this, as the fossil fuel sector’s dominance of the stock market has shrunk considerably.

THE MOVEMENT

THE IMPACT OF

GROWTH IN DIVESTMENT COMMITMENTS
0 300
600
900
1200
1500
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

TOTAL PUBLIC INSTITUTIONAL COMMITMENTS

TO FOSSIL FUEL DIVESTMENT
Source: Global Divestment Commitments Database
2012 2013 2014 2015 2016 2017 2018 2019 2020 2022 2021
$0T
$5T
$10T
$15T
$20T
$25T
$30T
$35T
$40T

TOTAL ASSETS UNDER MANAGEMENT COMMITTED

TO FOSSIL FUEL DIVESTMENT
* 2021 figures represent an update of some institutions’ total assets under management.

See Methodology section.

Source: Global Divestment Commitments Database 4.10
5 A DECADE OF HISTORY
The fossil fuel divest-invest movement started a decade ago, in 2011, when students at Swarthmore College in Pennsylvania launched a campaign calling on their university to divest from all fossil fuels. Students at another eight schools launched similar campaigns focused just on divestment from coal, the dirtiest fossil fuel. Soon, with the support of foundations such as the Wallace Global Fund, campaigns sprang up on campuses across the country. While Hampshire College5
is acknowledged as the first
institution to be divested from fossil fuels, the campaign’s first real win was in the fall of 2012, when Unity College in Maine announced plans to divest after a strong student-driven campaign.6
The movement grew rapidly after Superstorm Sandy devastated the northeastern United States in 2012, causing tens of billions of dollars in damages. That’s when environmentalist Bill McKibben, 350.org, and student organizers launched the “Do the Math” tour.7 The non-profit organization Carbon Tracker Initiative also published its first two “Unburnable Carbon” reports in 2011 and 2013, introducing many to the concepts of a “carbon bubble” and “stranded assets.”8
These events inspired divest-invest campaigns in cities and campuses across North America, Australia, Asia and Europe.9 The faith community, an influential contributor to past divestment campaigns, also quickly became actively involved. The Church of Sweden, a leader in faith-based values driven investing, was the first religious group to divest, completing a process in 2014 that it began six years earlier.10 The World Council of Churches, representing 600 million Protestants worldwide, followed soon after.11 In 2014, ahead of the UN climate change summit, the movement received an endorsement from Bishop Desmond Tutu just as it released its first report and announced public divestment commitments totaling $52 billion.12
Since then, the divest-invest movement has expanded
substantially, becoming a central part of the broader climate movement and spawning critical offshoot campaigns. It seeded campaigns, often led by Indigenous communities, to defund fossil-fuel infrastructure projects such as the DefundDAPL campaign in the U.S. and the campaign to cut off insurance for the Trans Mountain Pipeline in Canada. It has also been the inspiration for other finance-focused climate campaigns directed at private equity, central banks, insurance companies, asset managers, and financial regulators. Perhaps most importantly, divest-invest campaigns have proven to be a successful recruitment and training ground for climate activists who have then gone on to lead climate organizations and drive climate action across the world.

The movement, from the very start, has focused on shifting the narrative around the fossil fuel companies themselves. The goal has been to brand these companies as moral outcasts, and to focus the public’s attention on the web of finance supporting their operations and their aggressive manipulation of the political process to block climate action. From 2016 to 2019, the three years which followed the signing of the Paris Agreement, the five largest publicly-traded oil companies (ExxonMobil, Royal Dutch Shell, Chevron, BP and Total) spent over $1 billion on lobbying efforts to block climate action and advertising campaigns to mislead the public about their role in the climate crisis.13 But there are clear signs that public opinion and political power around climate are both shifting. While credit for this broader change is of course shared with the entire climate movement, divest-invest campaigns have played a critical role in shifting opinions specifically around these corporations and their money:
•In the 2020 U.S. Presidential election, for the first time, a majority of candidates pledged to refuse all campaign
donations tied to fossil fuels.14
•Around the globe, major fossil fuel infrastructure projects are increasingly being stalled or canceled due to shifts in public opinion driven by protest movements, according to the credit rating agency Moody’s.15 16 The Indigenous-led protest
movements in North America alone are on track to prevent carbon emissions equal to a quarter of total U.S. and Canadian annual emissions combined.17
•Public support for fossil fuel use has plummeted. Globally, more people now support expansion of solar, wind and
hydropower than support the expansion of any fossil fuel.18 In Europe, an overwhelming 81 percent of people now favor
greater government financial support for renewable energy, even if it means reducing subsidies for fossil fuels.19 In 2019, for the first time, Gallup reported that a majority of Americans believed the country should put less emphasis on fossil fuels of all types. Support for more use of natural gas, which the fossil fuel industry had spent years falsely labeling a “clean” fuel, dropped from 65 percent in 2013 to only 46 percent in 2019. Support for oil dropped from 46 percent to 28 percent and coal dropped from 31 percent to 22 percent.20
A 2019 survey found that 57 percent of Americans, including majorities in historically oil-dependent states like Texas and Louisiana, believed that oil companies and other fossil fuel companies should pay for the damages caused by climate
change.21

4.11 6
2011 – 2020

KEY MOMENTS IN THE DIVEST-INVEST MOVEMENT
2011
• Student climate activism on divestment on college campuses start showing up across America, largely in response the failure of the UN climate conference in 2009 to curb carbon emissions, and climate advocacy’s failure to engage youth. Students at Swarthmore College push for the college to divest its endowment from the largest 16 fossil fuel companies, citing their solidarity with Appalachian communities who had been disproportionately negatively affected by coal. Student campaigns begin spreading. • December 2011, Hampshire College becomes the first academic institution to divest from fossil fuels, just as it was the first to divest from Apartheid South Africa 2012
• Bill McKibben’s article Global Warming’s Terrifying New Math highlighted the Carbon Tracker Initiative’s new calculations that 80% of fossil fuel reserves globally are unburnable if we want to avert climate crisis. It went viral and helped galvanize a movement around fossil fuel divestment, starting on US college campuses. • 20 cities in 22 days, the Do The Math tour ignited a broader movement around fossil fuel divestment. Within a month of the tour over 100 campus campaigns had sprung up around the United States, with campaigns in cities too. 2013
• In April 2013, the first commitments from municipalities start rolling in: Seattle, WA, San Francisco, CA, Berkeley, CA, Richmond, CA, Boulder, CO, Bayfield, WI, Madison, WI, State College, PA, Eugene, OR, and Ithaca, NY.
• In June 2013, Obama embraces the divestment movement
2014
• Divest-Invest Philanthropy launched on January 30, 2014 when seventeen foundations, with combined assets of more than $2 billion, publicly announced their joint commitment to divest and invest and called upon the philanthropic sector to have a wider dialogue on the relationships between investments and climate change. Rockefeller Brothers Fund announced fossil fuel divestment in September 2014, notable at the time due to the Rockefeller wealth being built from fossil fuel expansion. • Divestment gains the endorsement of public figures such as Archbishop Desmond Tutu who addressed the UN Global Climate Summit calling for global divestment in a historic video. At the UN Global Climate Summit, the movement makes the first joint divestment announcement, listing 52 billion dollars in assets divested. 2015
• In a watershed moment for the growing divestment movement, The Guardian outgoing editor-in-chief has decided to set the Guardian’s editorial sights on keeping the majority of fossil fuels underground and achieving significant progress on climate change before stepping down.
• Norway’s Parliament approves a decision to divest the country’s sovereign wealth fund from companies with more than 30% of their income from coal extraction or coal power.

4.12 7
2016
• June marked the first-ever joint Catholic divestment announcement on the commemoration of the first anniversary of Pope Francis’ encyclical Laudato Si, and a letter signed by multi-faith leaders calling for divestment.

Seven Catholic institutions from all over the world announced that they are divesting from fossil fuels.
• Student divestment movement in the UK is wildly successful with 43 university divestment commitments in 2016.
2017
• Cape Town, South Africa announces divestment in June 2017 and becomes one of the first major cities in the Global South to commit to fossil fuel divestment. • In May 2017, a Global Divestment Mobilization took place with people all over the world engaging in direct action and protest to demand fossil fuel divestment 2018
• In 2018, the divestment movement saw massive gains. It welcomed its 1,000th institutional commitment to divest from fossil fuels, bringing the global size of portfolios and endowments committed to divestment to more than $6.4 trillion. Ireland becomes the first country to divest from fossil fuels, and Divest-Invest pledges came from across 37 different countries, spanning every continent except Antarctica • Major city pension funds also joined the divestment campaign – New York City committed to divest their $189 billion pension fund from fossil fuels and London announced plans to divest their multi-billion dollar pension funds from coal, oil, and gas. 2019
• The financial case to ditch fossil fuels kept getting bigger and bigger – IEEFA released a groundbreaking report showing that BlackRock, the world’s largest fund manager, and its holdings in fossil fuels lost over $90 billion in value destruction and opportunity cost.

Financiers begin to pull back from fossil fuels -the European Investment Bank became the first multilateral bank to commit to ending financing of oil, coal, and gas by end of 2021. • In September 2019, the first major global conference on divestment was hosted in Cape Town, South Africa - “Financing the Future: The Global Climate Divest-Invest Summit” which served as a major platform for new institutional divest-invest announcements. It emphasized the equal importance of investing in a clean, equitable, and just future to ensure sustainable energy access for all. By the end of 2019, more than 11 trillion U.S. dollars had been committed to divesting from fossil fuels. 2020
• New York State, the United States’ third-largest pension, announced in December 2020 that they would be divesting their $226 billion retirement fund of the riskiest fossil fuel companies by the end of 2024.
• Faith leaders, foundational and instrumental partners to the divestment movement, launched the largest joint divestment announcement ever of over 1.5 billion USD in assets when over 47 faith institutions spanning across 21 different countries and 5 different continents announced their exit from fossil fuels.

4.13 8

A BROADER AND

DEEPER MOVEMENT
While the overall growth of the movement is clear by the growing number of commitments, the depth and breadth of the movement has also expanded.

There are now institutions committed to fossil fuel divestment in 71 countries, up from the 37 recorded in the movement’s most recent report from 2018.22 In 2014, only 22 percent of divesting institutions were based outside of the U.S. But by 2021, that has climbed to 69 percent, signifying the globalization of the movement.23 The diversity of institutions and their average size has also grown, and now includes more and more high-profile institutions. Large insurance companies, pension funds, and universities with massive endowments have driven the biggest increases in assets under management committed to divestment, while faith and philanthropic institutions have driven the largest increases in the number of commitments in recent years.

The philanthropic sector has stepped up its commitments significantly. The Divest-Invest Philanthropy coalition first launched in January 2014 with 17 foundations, holding combined assets of nearly $2 billion, publicly committing to both divest from all fossil fuels and invest at least 5 percent of their portfolio in climate solutions. As of October 2021, there are 192 foundations and family funds with assets over $125 billion committed to divestment in some form.

Faith-based Organization 521
Educational Institution 220
Philanthropic Foundation 192
Government 166
Pension Fund 164
For Profit Corporation 132
NGO 51
Healthcare Institution 17
Other 5
Cultural Institution 4

DIVESTMENT BY SECTORS
Fossil fuel divest-invest commitments by
type of institution
Source: Global Divestment Commitments Database
TOTAL
1485

4.14 9 10

GLOBAL REACH

OF DIVEST-INVEST

PAKISTAN
PANAMA
PERU

PHILIPPINES

PORTUGAL
REPÚBLICA

DOMINICANA

REPUBLIC OF THE

MARSHALL ISLANDS
RWANDA

SENEGAL

SIERRA LEONE

SINGAPORE

SOMALIA
ANGOLA

ARGENTINA

AUSTRALIA

AUSTRIA

BANGLADESH

BELGIUM

BERMUDA
BRAZIL

CAMEROON
CANADA
CHINA

COLOMBIA

CZECH REPUBLIC

DENMARK

ECUADOR

SENEGAL

SOUTH AFRICA

SOUTH KOREA
SPAIN

SRI LANKA
SWEDEN

SWITZERLAND

THAILAND
UGANDA
UK

UKRAINE

VATICAN CITY
ZAMBIA
USA

ESTONIA
FIJI

FINLAND
FRANCE

GERMANY
GREECE
INDIA

INDONESIA

IRELAND
ISRAEL
ITALY
JAPAN

LIBERIA
KENYA

LEBANON

LESOTHO

LIBERIA

LUXEMBOURG
MALAWI

MALAYSIA
MALTA
MEXICO

MYANMAR

NETHERLANDS

NEW ZEALAND

NIGERIA

NORTHERN IRELAND
NORWAY

4.15 SOUTH AFRICA

DIVESTMENT GAINS GROUND IN

CASE STUDY
Most growth in energy demand is expected in the Global South in the coming years, making nations in that area critical to the climate fight. Divestment campaigners are finding new success across Africa, particularly in South Africa.

In 2020, the city of eThekwini/Durban followed Cape Town to become the second city in South Africa to commit to divest.

Both signed the divestment declaration of the C40 coalition. 24 Durban’s two pension funds control over $130 million in assets.
25 26
City leaders acknowledged that divesting from fossil fuels and investing in climate solutions would help support Durban’s ambitious Energy Policy, which seeks to fully transition the city to 100 percent renewable energy by 2050. 27 They also cited
divestment as a way to free up investment dollars to help small and medium businesses, social enterprises, and cooperatives to participate in the green economy. 28 Mayor Mxolisi Kaunda of Durban, said: “City Leadership is committed to invest in a fossil-free sustainable economy and Durban is ready to demonstrate that just transition.”29

4.16 11
12 GAME-CHANGING

DIVESTMENT

COMMITMENTS
Some of the world’s most influential and iconic institutions have committed to divestment over the past 24 months. These
announcements have grabbed headlines around the world,
pushed forward the political conversation on climate, and further energized the movement:

HARVARD
Following nearly a decade of pressure from student activists, alumni, and faculty, Harvard, the world’s wealthiest university, announced that it has nearly entirely divested its $42 billion endowment from fossil fuels and will bar any future investments in coal, oil, and gas.30 It was quickly followed by a divestment announcement from fellow Ivy League university Dartmouth,31 and follows progress in divestment campaigns at other prominent Ivy schools, including Brown, Columbia, and Cornell.32 33 34

LA BANQUE POSTALE
The French public bank La Banque Postale ($894 billion in assets)35 announced in October 2021 that it would divest from all oil and gas companies by 2030.36 Significantly, the bank also promised a broad denial of financial services to “conventional and non-conventional fossil-fuels producers, upstream and midstream activities … companies involved in infrastructure development for the industry … (and) businesses involved in lobbying for the oil and gas industry.”37

FORD FOUNDATION
With $17 billion in assets, the Ford Foundation is one of the largest philanthropic funds in the world, built on a legacy that gives its announcement powerful significance.38 The foundation said in October 2021 it “will not invest in any fossil-fuel-related industries” and will look for opportunities to invest in a “renewable sector that is strong, diverse, and varied enough to sustain a green-energy economy.”39
CAISSE DE DÉPÔT ET PLACEMENT
DU QUÉBEC
CDPQ is Canada’s second-largest pension fund with assets over $307 billion.40 It announced in September 2021 that it will divest from all oil investments, which the Toronto Star reported “will make it harder for Canadian oil and gas producers to raise money for new wells and oil sands projects,”41 a major development given that Canada is home to the largest tar sands deposits.42 The fund also said it would invest $10 billion in renewable energy43 and has increased investments in sustainable infrastructure, such as Montreal’s new light-rail system.44
PME
Dutch pension fund PME ($71 billion in assets) announced it had divested in September 2021,45 becoming the first Dutch pension fund to do so. Fund managers noted that the process took only six weeks and did not impact their overall portfolio.46

HARVARD

HONG-KONG BASED AIA GROUP
LONDON

CATHOLIC CHURCH

4.17 13

NEW YORK STATE
One of the largest and most influential U.S. pension funds, the $265 billion New York State Common Retirement Fund, took important steps towards divestment in 2020 and 2021. In December 2020, New York State Comptroller Thomas DiNapoli announced that the fund would shed its riskiest investments in fossil fuels by 2024 and reach net zero emissions across its investment portfolio by 2040. In April 2021, it became the first state pension fund in North America to divest from oil sands companies.47 The fund has committed to double investment in climate solutions to $20 billion.48

OXFORD AND CAMBRIDGE
For nearly a decade, alumni, faculty, and students have diligently and creatively pressured two of the world’s oldest and most prestigious universities, Oxford and Cambridge, to divest from fossil fuels. Both buckled to pressure in 202049 with announcements covering their $4.1 billion and $4.8 billion endowments respectively.50

ROCKEFELLER FOUNDATION
The $5 billion fund, established by famed Standard Oil tycoon John D. Rockefeller, announced in December 2020 that it will fully divest from all fossil fuels and increase investments in a just transition to a renewable energy economy. It joins its sister foundations, the Rockefeller Brothers Fund, which became an early leader of the movement when it committed to divestment back in 2014, and the Rockefeller Family Fund, which committed in 2016.51
MAINE
In June 2021, the U.S. state of Maine became the first jurisdiction in North America to direct divestment of its treasury and state pension fund via legislation.52 The law was passed after years of campaigning by grassroots and youth advocates with Sierra Club, Maine Youth for Climate Justice, and 350 Maine. It directs the $17 billion state pension and treasury to divest more than $1.3 billion from fossil fuels by 2026.53 One of the cosponsors of the bill was state senator Chloe Maxmin, a co-founder of the successful Fossil Fuel Divest Harvard campaign.54

BALTIMORE
All three of the U.S. city’s pension funds must begin divestment next year under a law signed by the mayor in October 2021. The Baltimore City Fire & Police Employees’ Retirement System ($3.5 billion in assets), Baltimore City Employees’ Retirement System ($2.2 billion) and Baltimore Elected Officials’ Retirement System ($31 million) will shed all holdings in the top 100 holders of coal reserves and the top 100 holders of oil and gas reserves over the next five years.55 The measure is significant given Baltimore’s proximity to major oil and natural gas import/export operations.56

NEW YORK CITY
Following up on the city’s 2018 commitment, the New York City Employees’ Retirement System ($87.0 billion in assets), the New York City Teachers’ Retirement System ($102.2 billion in assets), and the New York City Board of Education Retirement System ($8.8 billion in assets) voted in 2021 to divest, pulling $4 billion out of fossil fuels by 2022.5758 The mayor also announced in 2021 a goal of moving the funds to reach net-zero emissions by 2040 and invest $50 billion in climate solutions by 2035.59 The New York City comptroller, on behalf of the city’s pension funds, also led a successful push to unseat former Exxon CEO Lee Raymond from the board of JP Morgan Chase.60 61
LONDON
London in 2021 reaffirmed and expanded on its commitment to reduce fossil fuel investment.62 In parallel, the London Pensions Fund Authority (LPFA, $9.1 billion in assets)63 has reduced fossil fuels to just 0.6 percent of its investments in listed equities as of March 2021. In September 2021, the LPFA announced a
commitment to reach net-zero carbon emissions by 2050 and to soon set an interim target for 203064
C40 DIVEST/INVEST FORUM
New York and London lead C40’s Divest/Invest Forum, a peer network supporting a growing number of cities divesting from fossil fuels and investing in climate solutions. As of September 2021, cities representing more than 43 million residents and over $360 billion in pension assets have signed the “Divesting from Fossil Fuels Investing in a Sustainable Future Declaration,” committing to push their pension funds to adopt a divest-invest strategy now. This includes: Auckland, Berlin, Bristol, Cape Town, Copenhagen, Durban (eThekwini), Los Angeles, Milan, New Orleans, Oslo, Paris, Pittsburgh, Seattle, and Vancouver, as well as forum co-chairs New York and London.65

UNIVERSITY OF CALIFORNIA SYSTEM
As one of the largest university systems in the world, serving more than 285,000 students, the University of California system has one of the nation’s largest endowments, pension funds, and working capital pools. The system completed divestment in 2020, announcing it had sold off $1 billion worth of shares in fossil fuel companies across $125 billion worth of assets.66 The university has committed to increase investments in climate solutions by at least $1 billion.

CATHOLIC CHURCH
An official Vatican statement in 2021 called on Catholic investors worldwide to divest from fossil fuel holdings.67 Thanks to organizing by the Laudato Si’ Movement (formerly Global Catholic Climate Movement), over 250 Catholic institutions globally have divested, including Bishops’ Conferences, religious orders, Catholic colleges and universities, donor institutions, and others around the globe.68

MACARTHUR FOUNDATION
Known globally for its MacArthur Fellows program (often called the “MacArthur genius grants”), the foundation committed in September 2021 to unwind its $8 billion endowment from fossil fuels, making it one of the largest foundations in the U.S. to do so.

It specifically acknowledged the voices calling for alignment between grants and investments as a driver in its decision..69

MAJOR INSURANCE COMPANIES
Several global insurance companies, which are among the world’s largest investors, made major new or improved divestment commitments over the past two years, with large financial impacts.

Germany-based Allianz updated its coal exclusion policy in May 2021.70 Hong-Kong based AIA Group divested from coal in 2021,71 the first major Asian insurer to do so.72 MetLife became the first major US life insurer to divest in June 2020, excluding coal and tar sands from their portfolios.73 Suncorp, based in Australia, adopted an oil and gas divestment policy in 2020 as well.74 The total assets under management of these four firms is more than $2.13 trillion.

4.18 participants from all companies,
banks, institutions and
governments immediately halt
all investments in fossil fuel
exploration and extraction,
immediately end all fossil fuel
subsidies and immediately and
completely divest from fossil
fuels. We don’t want these things
done by 2050, 2030 or even
2021, we want this done now –
“We demand
that…
as in
right NOW.”
–GRETA THUNBERG

4.19 15

WHY PARTIAL DIVESTMENT
IS NO LONGER ENOUGH.

ALL INSTITUTIONS. ALL ASSETS. ALL FOSSIL FUELS.

CASE STUDY
When the divest-invest movement began a decade ago, it faced great resistance. Many institutional investors said complete divestment from fossil fuels was too complex or financially risky. Under pressure to divest, many institutional investors chose different paths and pursued commitments that did not reflect full divestment.

Some divested only part of their assets, such as direct investments, while leaving other portions of their assets untouched. Others focused on divestment from only certain fossil fuel sectors. Many institutions started their divestment efforts by focusing on coal, the most carbon-intensive fossil fuel. For instance, in 2015, the U.S. state of California voted to divest its pension fund from companies that derived at least half of their revenue from coal mining, as did the city of Providence, Rhode Island. 75 The multinational life insurance and asset
management company Aegon committed to coal divestment in 2016. 76 Investment giant BlackRock said in 2020 it would divest from companies that “generate more than 25% of their revenues from thermal coal production.”77 European banking leader HSBC said in 2018 it would stop direct “funding new coal power plants, oil sands and arctic drilling,”78 naming a trio of politically toxic projects that many other institutions also targeted. After first opposing all divestment, the Gates Foundation began to reverse course by cutting all holdings in oil giants BP and ExxonMobil in 2016. 79 In 2016, the Hewlett Foundation made the decision to end “future investments in private partnerships primarily involved in oil and gas drilling.”80 While important progress, movvement leaders continued to call for full divestment of all assets.

Demands for investors to invest in climate solutions were always part of the movement and commitments to both divest and invest began to increase as the movement progressed. The Divest-Invest Philanthropy campaign launched in 2014 asked foundations to pledge to fully divest from fossil fuels and invest at least 5 percent of their portfolio in climate solutions. By 2019, almost 200 foundations had taken the pledge, and half of those surveyed were investing 10 percent, or more, in solutions. 81 For example, the Rockefeller Brothers Fund, an early signatory, made its first direct investment in a renewable energy company in July 2016. 82 Due to continued movement pressure and a growing body of data on the financial weakness of fossil fuel investments, some of the institutions named above later made broader divestment commitments, while others continue to be critical of demands to move more quickly and more boldly. Both HSBC and BlackRock, for example, remain targets of active divestment campaigns in 2021.

It is for that reason that movement leaders have made clear their demands for 2021, which reflect the urgency of the moment: that all institutions must divest all assets, including private equity funds, from all fossil fuels, and that they match that divestment with greater investment in climate solutions.

4.20 15
16 BROADER PRESSURE ON FOSSIL FUEL FINANCES
The intensity and growing breadth of the divest-invest movement has led to pressure on many institutions to reveal and ultimately end other types of financial ties to the fossil fuel industry.

Many large banks and financiers have committed to stop lending or giving other financial support to fossil fuel companies. As of 2021, at least 150 large banks, asset managers, and insurers, each of which has assets of at least $10 billion, have announced that they will cut ties from one or more fossil fuel industries.83 Other banks have responded to direct demands by campaigners to cut funding of specific fossil fuel infrastructure projects. U.S. Bank moved to end funding for the Enbridge Line 3 pipeline84 following global protests led by the Indigenous communities targeting the project’s financing.85 Similarly, major private banks such as Barclays, Credit Suisse, and ANZ released statements saying they will not provide funding86 for the controversial East Africa Crude Oil Pipeline in Uganda, which is fiercely opposed by local community members and environmentalists.87
Major insurance companies have stopped offering policies to some fossil fuel projects, creating a barrier for financing. Coal projects are becoming “uninsurable” after an exodus of U.S. and European insurance companies from the business, according to a report from Insure our Future.88 Suncorp committed in 2020 to cease underwriting of any new gas or oil infrastructure projects.89 The Trans Mountain tar sands pipeline in Canada is struggling to find insurers, forcing costs higher.90 While many institutions remain resistant to true fossil fuel divestment, movement pressure has increased so dramatically that many have scrambled to show some progress on shifting capital away from the fossil fuel industry. This has led to a proliferation of so-called “Net Zero by 2050” commitments from financial institutions, non-fossil companies, and even fossil fuel companies themselves. Many of these announcements set far-reaching 2050 goals without sufficient short-term targets, realistic plans for implementation, or, most importantly, clear policies for excluding fossil fuels.91 However, they are an important signal that pressure from the movement is effective and expanding. • More than one in five of the world’s 2,000 largest publicly traded companies have made some form of net-zero commitment, according to a 2021 study from researchers at Oxford University.92
•Facebook, Google, Apple, and Microsoft all announced new or stronger net-zero pledges in 2020.93 •Ford in 2020 became the first U.S. automaker to commit to carbon neutrality,94 followed by an even more ambitious announcement by GM in 2021 to achieve carbon neutrality by 2040 and stop selling gas-powered cars and trucks altogether by 2035.95 •Vanguard, the largest issuer of mutual funds in the world, and BlackRock, the world’s largest asset manager, were among 43 investment firms managing a combined total of more than $22.8 trillion in assets who pledged in 2021 to reach net-zero emissions by 2050 across all their holdings.96 Both firms have been slow to reveal clear plans for implementation or fully divest from companies expanding fossil fuel infrastructure.97

4.21 17
Recent years have also proven that open-ended “shareholder engagement” strategies with fossil fuel companies are not an adequate substitute for divestment.

Fund managers resisting fossil fuel divestment have often cited shareholder engagement with fossil fuel companies as a more effective method for fighting climate change. They argue that by remaining shareholders of these fossil fuel companies, they keep a “seat at the table” to force fossil fuel companies to alter their behavior.

But the record makes clear that this strategy, when it does not include the threat of divestment and is not time-limited, is ineffective and too slow with regards to major fossil fuel companies.

Researchers at the University of Cambridge reviewed two decades worth of research on shareholder engagement and concluded that it was an ineffective strategy for forcing the level of change needed at the pace needed in fossil fuel companies:
“Shareholder resolutions are indeed largely non-binding, and results in this quarter are poor regardless; most
resolutions fail, and a majority of those that pass or are withdrawn fail to be implemented. Those that are
implemented tend to fall into the category of disclosure only, leaving open the charge that there is indeed some
greenwashing – and delaying – going on in the field.

Evidence of positive results are lacking, and these results are incremental at best – if there is any real-world outcome at all (except, perhaps, improved spending on R&D and
small increases in benzene internalisation). By any
threshold one could devise as to the efficacy of a tactic for action on climate change and other social and
environmental issues, it would be difficult to deem
shareholder engagement a success.”98
For instance, the researchers noted, Exxon has been one of the top targets for climate-related shareholder votes for years, but has not changed its behavior in any meaningful way.99
Even worse, as one recent Bloomberg report noted, investor pledges to support environmentally related shareholder resolutions cannot always be trusted:
“A study from Dutch investment manager Robeco and the
Erasmus School of Economics found that only 35% of
(Principles for Responsible Investment) signatories backed U.S.-based environmental resolutions as recently as 2018. … The majority of environmental and social
recommendations fail to garner enough shareholder
support to steer the corporate agenda ‘towards
sustainability focused decision making,’ Robeco said in its 41-page report.”100
Even when shareholders succeed after considerable effort, fossil fuel companies remain dug in.

For instance, several major oil companies have agreed to so-called “net-zero by 2050” commitments, with oil giants Shell and BP both making big pledges in 2020. These commitments have been touted as proof of success by advocates of an engagement strategy.101 102 But even by these advocates’ own analyses, both BP and Shell’s commitments fall short on critical measures associated with the scope of emissions covered. Most notably, Shell does not make meaningful short-to-medium term commitments that align with the Paris Agreement, nor has it committed to stop making capital expenditures in new oil and gas reserves.103 104 Shell plans to actually increase its natural gas operations by 25 percent through 2025.105 Independent
researchers with Oxford similarly concluded that neither company’s plan actually accounts for all of their emissions or realistically matches a real path to limit climate change.106 In a May 2021 report, the research group Carbon Tracker said that nearly all oil companies with net zero commitments either exclude some part of their production or emissions, leave open the option of actually increasing emissions through a focus on “carbon intensity,” or rely on unrealistic projections of unproven carbon capture technology.107 The group’s September 2021 report noted that, despite net zero commitments, no major oil company has actually stopped new drilling or other capital expenditures, which the IEA has identified as critical for reducing emissions to target levels.108
After years of effort, the most notable shareholder engagement strategy to gain traction with Big Oil happened at the May 2021 shareholder meeting of ExxonMobil. Insurgent shareholders organized to successfully vote in three new corporate board members against management recommendations.109 But these directors remain in the minority and in the months since, ExxonMobil’s management has refused to make any substantive changes in climate-related policy, limit spending on new infrastructure, or curb real emissions. The company’s first public announcement after the shareholder insurgency was a boast about expanded greenfield drilling in Guyana.110
Engagement may be useful in changing the behavior of other industries, but it has proven ineffective as a tool for forcing fossil fuel companies to alter their fundamental business model. For movement and institutional leaders committed to fighting for climate justice and reducing the power of fossil fuel companies, divestment is a clear choice.

But investment managers who are focused on the bottom line have every reason to join the divest-invest movement as well.

ENGAGEMENT CANNOT REPLACE DIVESTMENT

4.22 18
With ten years of data and studies from some of the most respected financial entities in the world, the verdict is now clear — there is no rationale for investors to keep fossil fuels in their portfolio. Divestment both increases financial returns and reduces long-term financial risk.

But recent years have also made clear that it is not enough just to divest from fossil fuels. It is both necessary and profitable for institutions to invest in the transition to clean, renewable, and sustainable infrastructure.

Smart decisions in long-term investing lie at the core of investment managers’ “fiduciary duty,” which is their legal responsibility to make wise financial decisions on behalf of shareholders or beneficiaries. Institutional investors resisting divestment have often cited fiduciary duty as their rationale. But the evidence is now clear that fiduciary duty should lead investment managers towards, not away, from fossil fuel divestment.

DIVEST-INVEST IS THE

SMART FINANCIAL CHOICE

DIVESTMENT RAISES PROFITS AND LOWERS RISK
The divestment movement can now point to solid records from multiple institutions which have divested as proof of the financial benefits of the strategy.

Many previous analyses have used models to project that divestment would improve returns. But significantly, hard data has emerged in the last two years that has conclusively proven that divested portfolios are performing well.

The world’s largest investment house, BlackRock, confirmed in a critical research report commissioned by New York City that divestment has been a winner for those who have tried it and would be a winner now based on historical data:
“ ..no investors found significant negative performance from divestment but rather, have reported neutral to positive results.”111
“The broadest of all [divestment] options … outperforms all other options and the benchmark portfolio on both a
standalone cumulative and standalone annualized return
basis.”112
And, the report said, fossil fuel stocks have been losing value and are risky going forward:
“The standalone performance analysis shows the universe of [fossil fuel investments] has consistently underperformed the broader market over the past five years.”113
“Fiduciary investors must consider the potential increase of transition risks for fossil fuel reserve linked securities within their portfolios.”114
“Due to the mounting risks of climate change, technological advances and regulatory actions are signaling toward a
global energy transition. The potential transition to a low-carbon economy presents investment risks to fossil fuel reserve owners, raising the possibility that fossil fuel reserves — which may be unusable in a low carbon
scenario — will face precipitous devaluation or become
‘stranded assets.’”115
“The IEA World Energy Outlook has consistently
underestimated the rate at which renewable power has
been adopted and overestimated the demand for fossil fuel energy. … This is the paramount risk for companies and
investors — the risk that the transition away from fossil fuels happens quicker and more abruptly than forecasted.”116
The report notes further that the risk of stranded assets is actually made worse if governments delay action on climate change because the inevitable shift will be more sudden.117
BlackRock’s findings are critical for three reasons. First, because they are based on actual returns to date. Studies critical of the divest-invest movement, nearly all funded by fossil fuel companies, have focused on projections and models. Second, because the firm has no ties to the movement but nevertheless agreed with the movement’s core financial arguments. Third, because BlackRock was under contract with the City of New York and had a formal fiduciary duty. The research was used to support a specific investment decision upon which fiduciaries relied to cast their votes for divestment.

Other recent analyses agree. A 2019 survey by the Croatan Institute asked 60 philanthropic foundations who had divested about their experience and found that 94 percent had
“experienced positive to neutral performance since committing to Divest Invest.” The remaining 6 percent said either that positive results were expected soon or that divestment was not the clear cause of their difficulties.118
Individually divested institutions that have made returns public provide further proof. The Rockefeller Brothers Fund, five years into divestment, reported in 2020 that its analysis showed the decision had improved returns.119 Wallace Global Fund, a private foundation that was nearly fully divested from fossil fuels by 2012, completely divested by 2014, and now has over 15 percent of its portfolio invested in climate solutions, has outperformed their financial benchmarks for more than a decade, performing in the top decile of market returns as compared to a larger group of 178
foundations.120

4.23 PROMINENT ECONOMISTS AND

FINANCIAL ANALYSTS ON THE DECLINE

OF FOSSIL FUELS AND THE WISDOM OF

DIVEST-INVEST

JIM CRAMER
“I’m done with fossil fuels. They’re done. … We are
starting to see divestment all over the world. … Big
pension funds are saying, ‘Listen, we’re not going to
own them anymore.’ … The world’s changed. … We’re in
the death knell phase.”123

JOSEPH STIGLITZ
“I’ve been a supporter of divestment … The prudent
simply economic perspective is that the market is short sighted … (and is) not taking into account the fact that we will be moving, whether it’s in 10 years or five years or 20 years to a green economy. And there will be a
carbon price and there will be lots of stranded assets
and the value of those carbon assets are going to go
down. So to me, prudential behavior. it says don’t be in those assets that are going to go down. It’s foolish.”124

JEREMY GRANTHAM
“We looked at the real cost of divestment, and there is none. … The data is clear.”125

THOMAS PICKETTY
“This is a rare and decisive moment in history. Science, ethics, and economics are intersecting to form a clear
market signal … responsible investors should divest
from fossil fuels.”126

CHRISTINE LAGARDE
“But if (the transition to clean, renewable energy) is
delayed, the reduction in emissions may have to be
sharper, resulting in a disorderly, disjointed and more disruptive transition for the economy. Certain economic activities may quickly be rendered obsolete, leading to a re-pricing of assets and the risk that some will become stranded. … The financial sector will be pivotal in
mobilising the necessary financial resources for the
transition and in helping our economies to cope through adaptation and mitigation. It is vital that it provides finance of sufficient quantity and quality for the task.”127 Recent data from Morningstar, one of the most influential investment research firms on Wall Street, provides a critical window into how divestment could not just improve returns, but also reduce portfolio risk. A review of Morningstar’s 2021 data revealed that investment options which rate well for environmental, social, and corporate governance considerations (ESG) carried less risk than options that were low on Morningstar’s ESG scale, with a standard deviation of 14.1 percent vs. 15.2 percent over 10 years. At the same time, these funds earned higher returns (12.1 percent vs 10.9 percent.)121 While it is important to note that ESG-rated funds are not synonymous with divested funds, this nonetheless provides an important rebuttal of the oft-cited argument that divestment may increase portfolio risk.

Meanwhile, major pension funds that have resisted demands to divest lost money because of their exposure to fossil fuel investments.122
•California’s state teachers’ retirement fund, CalSTRS, ($238 billion in assets) would have gained $5.5 billion if divested from fossil fuels.
•California’s public employees’ retirement fund, CalPERS, ($380 billion in assets) would have gained $11.9 billion if divested.
•Colorado’s state pension fund, PERA, ($45 billion in assets) would have gained $1.77 billion if divested.

Going forward, institutional investors have another incentive to divest--limiting their legal exposure. The movement has begun a pivot to litigation, as students and other constituencies seek to prove that ongoing financial support of fossil fuels is at odds with laws that govern the fiduciary duty of universities and other non-profit institutions. It is likely that the threat of such a court judgement or investigation by the State Attorney General influenced Harvard University’s groundbreaking decision in September to 2021 to reverse its years of resistance to divestment.

4.24 19

HARVARD TO DIVEST

LEGAL PRESSURE ON

CASE STUDY
In March 2021, the decade-long campaign to pressure Harvard University to divest got a boost when the Climate Defense Project (CDP) filed a formal complaint with the office of the Massachusetts Attorney General.

The complaint,128 signed by elected officials, community groups, and prominent alumni and faculty, requested the attorney general investigate whether Harvard’s investments in fossil fuels violated the university’s legal fiduciary duty.

The complaint relied on the Massachusetts Uniform Prudent Management of Charitable Funds Act (UPMIFA) and Massachusetts common law. It detailed Harvard’s violation of its duty to invest with prudence, the duty of loyalty, the duty of care, the duty to act in good faith, and the requirement that non-profits invest in a way that is consistent with the charitable purposes of the institution.

Harvard announced its plans to divest on Sept. 10, 2021, before the attorney general’s office could formally respond to the complaint. However, between the date of filing and Harvard’s announcement, Harvard divestment campaigners and CDP attorneys met with senior staff from the attorney general’s office on two occasions.

When Harvard’s administrators explained their decision, their statement was strikingly similar to the language of CDP’s complaint: “Given the need to decarbonize the economy and our responsibility as fiduciaries to make longterm investment decisions that support our teaching and research mission, we do not believe such investments are prudent.”129
Notably, this legal argument could be applied to many other universities and non-profit investors, as UPMIFA is the law in every state except Pennsylvania. CDP has filed complaints on behalf of campaigners at four schools: Harvard, Cornell, Boston College, and the University of Wisconsin-Madison. Thus far, Cornell and Harvard have divested after the complaints were filed.

4.25 20

FOSSIL FUEL INDUSTRY IN DECLINE
Driving these analyses is the
unmistakable decline in the long-term
performance of the coal, oil, and gas
industries, which has occurred over
decades and accelerated over the last
decade.

Investors continue to buy oil and gas
stocks, but with poor results.
•In 1980 seven of the top ten S&P 500
companies were from the oil and gas
sector.130 Today, there are none
among the top ten.131
•In 1980 the oil and gas sector
accounted for 28 percent of the stock
market’s value, according to the S&P
500. Today, despite recent oil and
share price increases, it accounts for
only 2.7 percent.132
•In 2020, Exxon left the Dow Jones
Industrial Average after 92 years of
continuous presence, to be replaced
by Salesforce, a tech company.133
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
100
150
200
250
300
350
400
FOSSIL-FREE FUNDS VS. MARKET INDEX
The S&P 500 market benchmark index vs. the S&P Fossil Free index S&P 500 Fossil Fuel Free Index S&P 500
Over the last decade the industry’s decline has become more pronounced as competition within the oil and gas space has accelerated. At the same time, the sector faces competition from clean, renewable energy sources, which have seen advances in technology that make them more profitable and efficient than fossil sources,134 as well as environmentally safe and sustainable. •For the last decade, the MSCI ACWI global index--one of the world’s most important benchmarks for stock performance--has produced steady and stronger returns when calculated without fossil fuels than with them.135 •In 2019, 72 percent of newly added electricity capacity was in renewable energy.136 In 2020, it was 100 percent.137 • New equity shares sold by fossil fuel companies have lost $123 billion of their $640 billion in value since 2012, significantly underperforming the market.138
The long-term outlook for the oil and gas industry is grim, even as the exit from the COVID-19 pandemic may provide a short-term boost in prices. The International Energy Agency has concluded that in order for the world to reach its climate goals, no new oil and gas production should go forward.139 Both sectors continued their decline in early 2021 despite receiving $8.2 billion in U.S. taxpayer support as part of the U.S. government’s COVID relief plans.140 Closing out the third quarter of 2021, even with a 40 percent short-term surge in the price of oil,141 energy stocks still made up less than 3 percent of the stock market. That’s far behind the market-leading information technology sector, which represents over 27 percent of the stock market’s value, according to the S&P 500.142 Meanwhile, the coal industry is facing a sharp decline in both production and employment base. China, which has been the world’s top funder of coal energy projects, announced in September 2021 that it would end financing for coal projects overseas.143 From just 2019 to 2021, the U.S. coal industry lost 24,000 jobs, a 30 percent decline.144 Coal employment in the U.S. is now at its lowest level since the American Civil War. From 2008 to 2020 coal production fell in the U.S. from 1.17 billion to 535 million tons per year.145 146 Independent credit rating agencies have begun to take note of the fossil fuel industry’s long-term failing prospects. Moody’s 2021 analysis concludes that the coal industry’s limited access to capital, loss of regulatory support, public opposition, health and safety risks, pollution contributions, and loss of employment base leaves it vulnerable to increasing pressure on investors to divest.147 Moody’s has also issued a warning that due to market uncertainties and popular opposition, financing of oil and gas infrastructure faces a bumpy credit future.148 Major oil-producing nations are similarly predicting a decline in oil revenue. Norway, a country that derives 25 percent of its national revenues from oil and gas, now projects budget deficits through 2050 due to failing oil revenues.149 Source: S&P Dow Jones Indices

4.26 21
22 Over 100 oil and gas
companies went
bankrupt in 2020
Fracking Firms Fail, Rewarding
Executives and Raising Climate Fears
Exxon Mobil Exits:

The Dow Drops
Its Oldest Member
Exxon Mobil dropped
from the Dow after nearly
a century
Oxford announces
historic commitment to
fossil fuel divestment
Five Years Out of Oil,
the RBF Isn’t Looking Back
New Study Shows Oil, Coal and
Gas Investments Drove Over
$19 Billion in Losses for Major
Pension Funds
Mayors of 12 Major Cities
Commit to Divest From
Fossil Fuel Companies, Invest
in Green and Just Recovery
from COVID-19 Crisis
A Tale of Two Share Issues: How fossil fuel
equity offerings are losing investors billions
Nations Must Drop Fossil Fuels,
Fast, World Energy Body Warns
An industry ‘operating on
borrowed time’: Energy
experts on the increasing
risks ahead for Big Oil
Harvard University Will
Stop Investing In Fossil
Fuels After Years Of
Public Pressure

4.27 23

DIVEST-INVEST,

MOVEMENT IMPACT

ON THE FOSSIL FUEL

INDUSTRY
At the outset of the movement a decade ago, advocates for fossil fuel divestment set out to build an ethical case against fossil fuel companies and brand them as rogue actors, so that a political shift could occur. Movement leaders did not generally believe that the movement could grow large enough to influence the overall financial picture of the industry. But there is evidence that the movement has now grown so large and pervasive that it is having a real impact on the cost of business for fossil fuel companies.

As a permanent component of the economic landscape, the divestment movement has now reached into the financial decisionmaking calculus of institutional investors across the world.

Corporations, industry organizations, and credit rating agencies now all consider the efforts of the movement of sufficient authority and prominence to remain aware of it and to consider changes to business practices.

Formal regulatory disclosures by major fossil fuel companies make this clear. Corporate managers take the movement’s influence so seriously that they felt it necessary to inform investors about the risk it represents to company profits.

Shell, for instance, informed investors in their 2020 disclosures that efforts to divest fossil fuel holdings may harm the price of securities and cause difficulties for oil and gas partnerships:
“Additionally, some groups are pressuring certain investors to divest their investments in fossil fuel companies. If this were to continue, it could have a material adverse effect on the price of our securities and our ability to access capital markets. Additionally, some groups are pressuring
commercial and investment banks from financing fossil fuel companies. Furthermore, according to press reports, some financial institutions also appear to be considering limiting their exposure to certain fossil fuel projects. Accordingly, our ability to use financing for future projects may be adversely impacted. This could also adversely impact our potential partners’ ability to finance their portion of costs, either through equity or debt.”150
Similarly, ExxonMobil told investors it sees a risk in the work of those seeking to change corporate behavior on the climate issue:
“Political and other actors and their agents also increasingly seek to advance climate change objectives indirectly, such as by seeking to reduce the availability of or increase the cost for, financing and investment in the oil and gas sector and taking actions intended to promote changes in
business strategy for oil and gas companies.”151
The financial world has also noted how the divest-invest movement, and the related “Keep it In the Ground” and “Stop the Money Pipeline” movements, have been successful at halting progress on major new fossil fuel infrastructure projects. The infamous and long-protested Keystone XL Pipeline was finally defeated in 2021.152 A report prepared by the United States Chamber of Commerce cited fifteen other examples of recent instances where citizen activism resulted in the termination of proposed coal ports, oil and gas pipelines, and other energy infrastructure.153 Moody’s 2020 report on the natural gas sector acknowledged that the change in climate politics is hurting the industry, and noted the effectiveness of the movement’s stand against new infrastructure:
“Development of oil and gas transmission infrastructure, in particular, continues to face legal challenges from
environmental groups, which are succeeding in delaying
pipeline development … Environmentalists and Indigenous communities have opposed both oil and gas pipelines as
well as broader development projects, such as the Frontier oil sands project in Alberta, Canada. Moreover, even
existing pipeline facilities have come under fire, such as the Dakota Access Pipeline and an Enbridge Inc. compressor
station that will increase pipeline capacity in
Massachusetts.”154
A study released in 2021 from the University of Edinburgh Business School concluded that the “effect of the fossil fuel divestment movement is highly significant” in reducing the ability of fossil fuel companies to raise new capital.155
Finally, evidence of the movement’s impact can be seen in the fierce efforts by the oil, gas, and coal industry to discredit it. The industry has supported numerous studies and articles to challenge divestment advocates. These reports usually feature consultant models to argue that fossil fuel divestment would cause financial harm to institutional investors.156 157 158 159 160 161 As noted above, this claim has now been conclusively disproved by real data.

4.28 24

THE RISE OF RENEWABLES
While the fossil fuel industry begins its inevitable collapse, the renewable energy sector is rising with unstoppable momentum: •Renewables were the only source of electricity generation to grow in 2020, which saw overall energy demands decrease because of the pandemic. The International Energy Agency raised its forecasts for wind and solar capacity growth by 25 percent in a single year.162 •It is now cheaper in the U.S. to build new renewable energy generation than to operate existing coal-fired power plants or natural gas lines.163 • New investments in renewable energy rose in the U.S. to a record high of $55.5 billion in 2019, an increase of 28 from the previous year.164 Use of renewables is growing particularly fast in emerging markets, where 88 percent of the growth in energy demand is expected over the next two decades.165 A 2021 report from Carbon Tracker said that most developing nations have or will “leapfrog” the use of fossil fuels for electricity generation, going straight to cheaper renewables as they expand electricity access. In developed markets like the United States and Europe, fossil-fuelbased electricity generation has been dropping since 2007. “That means peak global fossil fuel usage for electricity generation was probably 2018,” the report concludes.166
A new research paper from Oxford University analysed the trends in renewable energy costs to reach a stunning conclusion (emphasis added):
“Rapidly decarbonising the global energy system is critical for addressing climate change, but concerns about costs have been a barrier to implementation. Most energy-economy models have historically underestimated deployment rates for renewable energy technologies and overestimated their costs. The problems with these models have stimulated calls for better approaches and recent efforts have made progress in this direction. … We use these methods to estimate future energy system costs and find that, compared to continuing with a fossil-fuel-based system, a rapid green energy transition will likely result in overall net savings of many trillions of dollars--even without accounting for climate damages or co-benefits of climate policy.
“The prices of fossil fuels such as coal, oil and gas are volatile, but after adjusting for inflation, prices now are very similar to what they were 140 years ago, and there is no obvious long range trend . In
contrast, for several decades the costs of solar photovoltaics (PV), wind, and batteries have dropped (roughly) exponentially at a rate near 10% per year. The cost of solar PV has decreased by more than three orders of magnitude since its first commercial use in 1958. “The combination of exponentially decreasing costs and rapid exponentially increasing deployment is different to anything observed in any other energy technologies in the past, and positions renewables to challenge the dominance of fossil fuels within a decade.
”167
In other words, the common narrative about the transition to a renewable energy economy--that it will be expensive, difficult, and only possible in the future--is deeply false. That story has been built on incorrect assumptions about the reliability of renewable energy technology and how fast its costs can drop.168 The renewable energy future is inevitable and it is arriving faster than expected.

4.29 25
As the scale and speed of climate change becomes frighteningly more clear, the scale and speed of the economy’s transition must increase to match it. Divestment alone is insufficient. The world’s available capital must be redirected towards the transition to clean, renewable energy, clean industrial and transportation systems, and climate-resilient infrastructure and communities.

The current pace of investment does not meet the challenge. Driving these transitions forward more quickly will help to reduce the human suffering that will take place if the world warms 1.5°C or greater. That alone should be enough to satisfy investors’ fiduciary duty on the need for greater investment. But to be clear, a faster transition is also critical for the health of the economy. It will both reduce the devastatingly destructive effects of climate change--which is costing billions of dollars annually already--and provide a path forward for robust economic growth. And it can make investors money.

How these investments are made will be just as important as when they are made. The transition to a renewable energy economy represents a huge shift in society and, as with all such upheavals, contains within it both the potential for compounding injustice and the opportunity for positive transformational change. All investors should consider the benefits of focusing their resources on a “just transition,” one which avoids the mistakes of past economic shifts and centers economic, gender, and racial justice. As they have with the divestment side of the equation, mission-driven investors have a critical role to play in leading the rest of the investment community forward.

Scientific consensus has emerged on the need for a rapid transition to renewable energy. Although it is not the only hurdle, insufficient investment remains a barrier to this goal.

The “Net Zero by 2050” roadmap from the IEA released in 2021 found that “immediate and massive” deployment of all available clean and efficient energy technologies is needed in order to limit global temperature rise to 1.5°C. “To reach net zero emissions by 2050, annual clean energy investment worldwide will need to more than triple by 2030 to around $4 trillion,” the report says.169 The International Monetary Fund said in October 2021 that the financial world needs to do more to support the transition and that investment vehicles for doing so are still too few:
“The transition to net-zero greenhouse gas emissions
requires unprecedented change by companies and
governments, as well as additional investment of as much as $20 trillion over the next two decades. … The world’s $50 trillion investment fund industry, especially funds with a sustainability focus, can play an important role financing the transition to a greener economy and helping to avoid some of the most perilous effects of climate change…
“However, even though sustainability is becoming
mainstream in investment strategies, sustainable investment funds still represent only a small fraction of the investment fund universe. At the end of 2020, funds with a
sustainability label totaled about $3.6 trillion, representing only 7 percent of the overall investment fund sector. Funds with a specific climate focus accounted for a meager $130 billion of that total.”170

WHY INVESTMENT IN A JUST TRANSITION NEEDS

TO SCALE QUICKLY
2012
2013
2014
2015
2016
2017
2018
2019
$360B

MAXIMUM

NECESSARY
$3,800B

MINIMUM

NECESSARY
$1,600B
ACTUAL

INVESTMENT
$342B
$388B
$472B
$455B
$608B
$540B
$615B

ACTUAL VS NEEDED INVESTMENT

IN GREEN ECONOMY
Comparison of annual investment in transition to a green economy vs minimum and maximum estimates for needed
investment to hold global warming to 1.5°C

JUST TRANSITION

INVESTING IN A RAPID,
Source: “Updated View on the Global Landscape of Climate Finance 2019,” Climate Policy Initiative, December 18, 2020, https://www.climatepolicyinitiative.org/ publication/updated-view-on-the-global-landscape-of-climate-finance-2019/

4.30 26
Investors must also recognize that the slower the transition to a renewable energy economy, the greater will be the economic burden of responding to climate devastation.

Since 1980, the U.S. National Oceanic and Atmospheric
Administration has tracked extreme weather events in the U.S. that cost at least $1 billion in damages and costs. In total there have been 298 events that met that threshold, costing the country over $1.975 trillion.171 But both the frequency and total cost of such events is rising alarmingly:
2020 set the new annual record of 22 events - shattering the previous annual record of 16 events that occurred in 2011 and 2017. 2020 was the sixth consecutive year
(2015-2020) in which 10 or more billion-dollar weather and climate disaster events have impacted the United States.

Over the last 41 years (1980-2020), the years with 10 or more separate billion-dollar disaster events include 1998, 2008, 2011-2013, and 2015-2020.
172
As of the end of September, 2021 is on pace to exceed 2020’s record on total costs.173
Globally, the collective cost of responding to climate-driven disasters--especially in communities that lack basic, essential services and economic opportunity--far outweighs the cost of investing in community preparedness and economic resilience today. A 2019 report from the Global Commission on Adaptation, headed by former UN Secretary-General Ban Ki-moon,
philanthropist Bill Gates, and IMF Chair Kristalina Georgieva, said investment in climate adaptations such as early warning systems and clean, resilient infrastructure will be critical for avoiding massive human suffering. But such investments would also bring clear economic benefits (emphasis in source):
“The Commission found that the overall rate of return on investments in improved resilience is very high, with
benefit-cost ratios ranging from 2:1 to 10:1, and in some cases even higher. Specifically, our research finds that investing $1.8 trillion globally in five areas from 2020 to 2030 could generate $7.1 trillion in total net benefits. … The case for ambitious adaptation is clear, but it’s not happening at nearly the pace and scale required. This is because climate impacts and risks are not yet adequately factored into decisions by those who make choices about the future.”174
Achieving such adaptation will require, among other things, a “revolution in finance” to increase the flow of money to adaptation projects, the report found.175
Along with avoiding calamity, there are strong economic benefits to a broad-based increase in investment in a rapid, just transition.

Worldwide, renewable energy already employs 11.5 million people.176 Two of the five fastest-growing occupations in the U.S. over the next ten years will be renewable energy jobs--wind turbine technician and solar panel installer--according to U.S. government data. No fossil fuel jobs are on the list of the top 20.177 A rapid increase in renewable energy development can grow these jobs significantly, and the world economy with it. One study by the International Renewable Energy Agency (IRENA) revealed that doubling the percentage of renewables in the world energy supply and increasing energy access by 2030 would increase global GDP by up to 1.1 percent, or $1.3 trillion.178 A 2020 Roosevelt Institute Report explained why investment in renewables is better for the economy than investment in fossil fuels:
“Compared to fossil fuels, clean energy is highly laborintensive. In fact, investments in clean energy generate nearly three times more jobs than comparable investments in fossil fuels (Garrett-Peltier 2017). This is largely because ‘investments in clean energy—including the direct spending on specific projects plus the indirect spending on
purchasing supplies—devote significantly more of their
overall budgets on hiring people and relatively less on acquiring machines, supplies, land (either on- or offshore), and energy itself’ when compared to fossil fuels (Pollin et al. 2014). Renewables also create many more jobs in the short term, which leads to more private spending, an
expansion of demand, and an increase in short-run GDP
multipliers.”179
A 2018 report by researchers from the London School of
Economics and Harvard University makes a cohesive case for why investors should build a strategy around not only rapid transition, but just transition. The researchers argue that investors need to understand that a poorly managed transition would trigger rising economic inequality, which represents a systemic risk to their portfolio. Similarly, they need to account for the benefits to the economy, and their financial returns, from investments that improve overall societal and environmental conditions.180

4.31 27
“As the pace of decarbonisation accelerates and the physical impacts of climate change intensify, the just transition approach will increasingly provide investors with a strategic way to anticipate, evaluate and respond to the social and economic implications for their beneficiaries, their portfolios and the financial system as a whole. 181
A fully just transition would also close the gap on universal energy access, particularly in the Global South. Nearly 800 million people lack basic access to reliable electricity today. The problem was badly exacerbated by the COVID-19 pandemic in 2020, which made electricity financially inaccessible for an additional 30 million people, mostly in Africa.182 Decentralized, renewable energy projects are the cleanest, quickest, and most affordable way to close the energy access gap in Africa.183 Mission-driven investors have already found these projects successful in increasing energy access, reducing emissions, and generating local jobs.184 Overall, about $35 billion of investment is needed every year from now to 2030 to achieve universal electrification with net zero emissions, according to the IEA.185 Building renewable energy systems could create 25 million jobs in Asia and Africa186 and improve healthcare. These outcomes and others tied to energy access can broadly stimulate macroeconomic growth.187 Increasingly, investors are organizing to push their peers to embrace a just transition. As of 2020, a coalition of 161 investors representing $10.2 trillion in assets were signed onto the “Statement of Investor Commitment to Support a Just Transition on Climate Change:” “As investors with a requirement to act in the best interest of our beneficiaries and in line with our fiduciary duties, we believe that strategies to tackle climate change need to incorporate the full environmental, social and governance (ESG) dimensions of responsible investment. There is an increasing recognition that the social dimension of the transition to a resilient and low-carbon economy has been given insufficient attention, notably in terms of the implications in the workplace and wider community. Achieving a just transition, in line with the 2015 Paris Agreement on Climate Change, will help to accelerate climate action in ways that deliver the Sustainable Development Goals.”188
Finally, while a robust investment strategy for a just transition can take many forms, it’s clear based on long-term past performance and the current outlook that it could be profitable for any investor who pursues it.

For example, compare the 5-year annualized total returns of the S&P’s Global Clean Energy Index, which tracks the performance of “global clean energy-related business,” to both the S&P 500 market benchmark and the S&P’s energy sector index, which tracks major U.S. companies in all sectors of the fossil fuel supply chain. The clean energy index, with annualized returns of about 22 percent, beat the market’s 17 percent.

Meanwhile, the fossil fuel index lost money, with annualized returns of -1.6 percent.189 190 191 192 S&P Global Clean Energy Index S&P 500 S&P 500 Energy (Sector) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
0 50
100
150
200
250
300
350
400

RENEWABLES VS FOSSILS IN THE MARKET
Comparison of stock market gains for the clean energy sector, fossil fuel sector, and the overall stock market, per S&P indices.

Source: S&P Dow Jones Indices

4.32 28
–JOSEPH STIGLITZ
“ We have been treating truly scarce resources, our environment, our water, our air, as if they were free. But economics teaches us that there is no such thing as a free lunch.

We will have to pay the check someday. And delay is
costly. Taking carbon out of the atmosphere is far more expensive than not putting it into the atmosphere. A
smooth transition is far less costly than the one we will surely face if we do not take action urgently.”

4.33 CASE STUDY

NAVAJO POWER
Navajo Power is “a native majority owned clean energy developer” working to build renewable energy generation in the Navajo Nation and other tribal lands.

The company received $4.5 million in seed funding in 2020 for projects that include solar panel assembly operations on Navajo land and the deployment of off-grid energy systems for thousands of Navajo families who still lack access to electricity.

The company is focused on ensuring that the benefits of the renewable energy resolution reach the many tribal communities that have depended on fossil fuels not just for energy, but for employment. “Coal was the backbone of the Navajo Economy for many years,” said Jerry Williams, the Chapter President of the LeChee community on Navajo. “I myself worked at Navajo Generating Station for 40 years, along with 460 other Navajo workers at the plant and another 400 at Peabody Coal mine. As we move forward and transition to renewable energy, we can’t forget about the communities and workers who provided energy for the West and the world. … That’s what got me excited about Navajo Power.” Brett Isaac, founder and CEO of Navajo Power, noted that the Navajo Nation has what could be the highest unemployment rate in the country at 65%. “We need to put people back to work in creating the clean energy future. … Clean energy can be our bridge.”193

4.34 29
30 MISSION-DRIVEN

INVESTORS

MUST LEAD ON A

JUST TRANSITION
As they have for the past decade, mission-driven investors have a special role to play. Schools, churches, cities, and foundations were early adopters of the divestment strategy because they had a broader interpretation of their investment responsibilities and understood that continued financial support of the fossil fuel industry was deeply harmful to the constituencies they serve. Now these institutions must recognize that they have an equally crucial responsibility to demonstrate the power and possibility of investment in a just transition.

It is well understood that the climate crisis will disproportionately hit low-to-middle income countries and communities the hardest.

Marginalized communities in these areas, such as women and children, who often lack basic human rights and access to essential services, are particularly vulnerable. The UN climate panel’s 2018 report said that even if the world meets the goals set out in the Paris agreement, these communities will suffer: Warming of 1.5°C is not considered ‘safe’ for most nations, communities, ecosystems and sectors and poses
significant risks to natural and human systems as compared to the current warming of 1°C … The impacts of 1.5°C of warming would disproportionately affect disadvantaged and vulnerable populations through food insecurity, higher food prices, income losses, lost livelihood opportunities, adverse health impacts and population displacements.
194
Institutions with a mission or values that prioritize care for these communities should therefore prioritize investments in a transition that will allow them to build resilience, long-term economic wealth, and political power.

Similarly, a poorly managed transition could be devastating for the workers and communities who have relied on the fossil fuel economy. Historically, economic transitions driven by market forces and powerful corporate entities have left workers and communities behind. Such economic shocks can be very
damaging to individuals and communities in both tangible and intangible ways, as major industrial employers like mines, plants, and factories are often part of a region’s culture and identity.

Economic impacts can be made worse by structural racism, gendered discrimination, and persistent wealth inequality. Much of the political resistance to the transition away from fossil fuels is grounded in these harsh realities. Mission-driven investors who want to remediate, rather than exacerbate, inequalities should ensure that projects they are supporting guarantee strong union jobs with worker protections, sufficient wages, and benefits.195

4.35 31
A fully just transition remains a fluid concept, and mission-driven institutions should consider the full breadth of possibilities as they design their investment strategy. A 2021 report from the Labor Network for Sustainability described it this way:
“Just transition ideals can be seen along a spectrum. On one end is a relatively narrow concept that addresses and mitigates the job and revenue losses from ending use of fossil fuels. From there, the idea expands to incorporate specific attention to workers and communities who were
excluded from the benefits of a fossil-fuel economy in the first place, all the way to understanding just transition as a holistic transformation of existing institutions and
structures, fundamentally reconfiguring the relationship between human beings, industry, land and resources.
“A just transition that includes all workers recognizes the exploitative nature of existing working conditions and the ties between underlying systemic racism and the precarity of work. Underlying racism and worker exploitation must be addressed for a just transition. … In other words, for there to be a just transition, underlying social injustices must be addressed to avoid replicating the same systems of
resource and human exploitation.
“Moving beyond expanding just transition to include all workers, some argue that just transition must address all exploitation, including exploitation of land and natural resources. In this ideal of just transition, there is a clear relationship between exploitation of land and the climate crisis. Addressing the climate crisis will require not just ending the use of fossil fuels, but a fundamental change in our relationship with land and natural resources.

As such, just transition goes beyond an energy transition: it is a rethinking of land and resource use.”196
For example, the need for investments in the transition does not just include things like electricity generation and the built environment, but also includes investments in services such as health care, community and ecosystem adaptation, and child and elder care. A 2021 report from the Feminist Green New Deal Coalition observed that investments in the care economy both provide the foundation for a transition to new economic models and are a source of future employment for transitioning workers:
“Without universal access to high-quality and affordable care, there will remain disproportionate barriers to women, and especially women of color, to entering the clean energy workforce, which today is predominantly male. … To truly accomplish a just transition, we must recognize careers in care as important options for the transitioning workforce, dismantle harmful gender norms and break down stigmas
of who does paid (and unpaid) care work, and make certain that care jobs are high-quality jobs.”197
Finally, the transition to a renewable energy economy must include a focus on closing the electricity access gap. Along with the macroeconomic effects described earlier, expanding access to clean, renewable energy has clear benefits for human rights and wellbeing in the Global South, which is why it was identified as a priority by the UN in both the Paris Agreement198 and the Sustainable Development Goals.199 It would benefit households by saving time, providing access to information and earning opportunities, and enabling human development within the household.200 Expanding access to electricity particularly benefits women, who on average spend more time on household chores and child care. For example, women’s employment in rural South Africa increased by 9 to 9.5 percent within 5 years of
electrification, while male employment rose by only 3.5 percent.201 Just transition projects are already underway across the globe, in places as diverse as Colorado202 and South Africa.203 As with the overall shift to clean, renewable energy, a just transition is increasingly being centered in domestic and international energy and climate policy discussions. The question remains whether investors will get ahead of the curve.

4.36 INDIA

FRONTIER MARKETS IN

CASE STUDY
Many rural areas of India still struggle with access to energy. Frontier Markets, an e-commerce startup that employs women in rural India,204 had sold over 650,000 renewable energy products by February 2019, primarily through its program.

Sahelis are trained in use of the company’s technology platform and are then able to reach women in some of India’s poorest and most remote areas. About 2,000 women have trained for the program, and the network has proven successful in selling solar lamps and other systems that can provide clean, reliable sources of light.

According to Ashden, a nonprofit focused on recognizing climate innovations: “Solar systems make cooking and studying easier, providing brighter, less smoky light than kerosene lamps. Robust, long-range [flashlights] are particularly popular with women, for moving around outside after dark and checking livestock. Solar [flashlights] are brighter and more reliable … For many women [working as Sahelis], this is their first significant income, and very useful for buying clothes and household equipment, contributing to children’s education, and saving for weddings.”205 Frontier Markets secured additional funding in 2021 and plans to grow to 1 million rural women entrepreneurs and 100 million customers by 2025.
206
Photo by Ashden

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33 CONCLUSION
Divestment remains a critical strategy for the climate movement. It must be combined with an accelerated push for investment in a just transition to a clean, renewable energy future if the world is to avoid a future of worsening human injustice and irreversible ecological damage. Financial arguments against divest-invest no longer hold water.

Institutional investors and other financial actors must agree to these three principles if they want to be on the right side of history and humanity:

2. All institutional investors must immediately move to invest a minimum of 5 percent of their assets in climate solutions, doubling to 10 percent by 2030, including investments in renewable energy systems, universal energy access, and a just transition for communities and workers. Further, investors must hold these companies accountable to respecting Indigenous and other human rights and environmental standards.

Societies, economies, and the climate are all changing. The financial world will have to change with them.

METHODOLOGY
The tally of divestment commitments and assets under management is taken from the Global Divestment Commitments Database, currently managed by Stand.earth in partnership with 350.org. This is the most comprehensive database of public divestment pledges. The true amount of money being pulled out from fossil fuels is almost certainly larger since not all divestment commitments are made public.

For this report, an update of the assets under management (AUM) of the institutions listed in the database was conducted, using the best available public information disclosed by those institutions or reported on by third parties. In past reports, and in the database itself, the assets were calculated based on their value at the time of the commitment. As the age of the movement has grown, this has meant that the total financial impact of the movement has been underestimated--the vast majority of institutions have seen their assets grow, in some cases, quite significantly, since the time of their commitment. To better reflect the true current value of the movement, this report updates these assets under management and will do so going forward in future reports.

Note that asset sizes represent the total assets under management of institutions that have committed to divest and do not represent the amount divested from fossil fuel companies. For this and all prior reports, AUM is used as the metric because the precise amounts of an investor’s portfolio devoted to fossil fuels is often not known, and the total AUM represents the total pool of potential capital being taken “off the table” for the fossil fuel industry. Fossil fuel divestment commitments vary in the reach and impact on investments. Many fossil fuel divestment commitments are partial in nature, in that the institution has chosen to divest solely from thermal coal or tar sands or only the largest fossil fuel companies by size of reserve.

Others have committed to divesting only certain asset classes. As the movement has evolved, this spectrum of divestment commitments has widened.

In recent years, divestment commitments have tended to be more comprehensive and restrictive, capturing a wider group of fossil fuel companies, with less of a focus solely on coal. Of late, there is increasing focus on private equity investments and their heavy exposure to fossil fuel companies, often ones that are more risky than publicly traded firms. This reflects the evolving financial literacy of decision makers as they increasingly recognize the risk of the entire fossil fuel industrial chain, beyond just coal.

Data on institutions’ assets was obtained from various sources. In many cases, when an institution publicly commits to divest, it discloses the value of its assets. In cases where this information is not made available in an announcement, and for the purposes of updating assets under management, this report relies on several public sources including reported size of endowment, annual and financial reports, and information posted on institution’s websites. In each case, both the AUM and written confirmation of the institution’s commitment to divest were verified by independent researchers before being confirmed as final.

ACKNOWLEDGMENTS
This report was a joint effort between the Institute for Energy Economics and Financial Analysis, Stand.earth, C40, and the Wallace Global Fund.

Writing was led by Jonathan Lipman. Report design by Fenton Communications.

In addition, thanks to all who contributed to the writing, research, and report development: Tom Sanzillo (Institute of Energy Economics and Financial Analysis), Richard Brooks (Stand.earth), Amy Gray (Stand.earth), Thomas Van Dyck (Royal Bank of Canada - SRI Wealth Management), Julia Lipton (C40), Annabel Rice (C40), Kidan Araya (Wallace Global Fund), Isabel Salas (Wallace Global Fund), Heather Coleman (Wallace Global Fund), Cindy Coltman (Both ENDS), Mark Campanale (Carbon Tracker), Fletcher Harper (GreenFaith), Kelsey Skaggs (Climate Defense Project), Ted Hamilton (Climate Defense Project), Andrew Behar (As You Sow), Sian Ferguson (The Climate Change Collaboration), and Svitlana Romanko (Laudato Si’ Movement).

In addition, the report authors thank all of those organizations who have been strategic partners in this effort: 350.org, DivestEd, Climate Defense Project, Stop the Money Pipeline, Future Coalition, Fossil Free Media, Both ENDS, Giniw Collective, As You Sow, Sunrise Project, Market Forces, Just Share, People and Planet, Rainforest Action Network, Laudato Si’ Movement, Operation Noah, GreenFaith, World Council of Churches, Anglican Church of Southern Africa, and The Climate Change Collaboration.

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ENDNOTES
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93 Alex Hern, “Facebook and Google announce plans to become carbon neutral,” The Guardian, published September 15, 2020, accessed September 29, 2021, www.theguardian. com/environment/2020/sep/15/facebook-and-google-announce-plans-become-carbon-neutral 94 “Ford Expands Climate Change Goals, Sets Target To Become Carbon Neutral By 2050: Annual Sustainability Report,” Ford Media Center, published June 24, 2020, accessed September, 2021, media.ford.com/content/fordmedia/fna/us/en/news/2020/06/24/ford-expands-climate-change-goals.html 95 “General Motors, the Largest U.S. Automaker, Plans to be Carbon Neutral by 2040,” GM Corporate Newsroom, published January 28, 2021, accessed September 29, 2021, media. gm.com/media/us/en/gm/home.detail.html/content/Pages/news/us/en/2021/jan/0128-carbon.html 96 Alastair Marsh and Jess Shankleman, “Vanguard, BlackRock Join Investors Pledging to Hit Net Zero,” Bloomberg, published March 29, 2021, accessed September 29, 2021, www. bloomberg.com/news/articles/2021-03-29/vanguard-blackrock-join-investors-pledging-net-zero-emissions 97 Giulia Christianson, Ariel Pinchot and Yili Wu, “How BlackRock and Vanguard Can Advance the Net-zero Emissions Movement,” World Resources Institute, published April 16, 2021, accessed October 12, 2021, www.wri.org/insights/how-blackrock-and-vanguard-can-advance-net-zero-emissions-movement 98 Ellen Quigley, Emily Budgen, Anthony Odgers, “Divestment: Advantages and Disadvantages for the University of Cambridge,” Centre for the Study of Existential Risk, published October 1, 2020, accessed October 1, 2021, page 110, www.cser.ac.uk/resources/divestment-advantages-cambridge/ 99 Ellen Quigley, Emily Budgen, Anthony Odgers, “Divestment: Advantages and Disadvantages for the University of Cambridge,” Centre for the Study of Existential Risk, published October 1, 2020, accessed October 1, 2021, page 101, www.cser.ac.uk/resources/divestment-advantages-cambridge/ 100 Tim Quinson, “Most Investors Still Fail to Back Climate Resolutions,” Bloomberg, published March 9, 2021, accessed September 29, 2021, www.bloomberg.com/news/ articles/2021-03-09/most-investors-still-fail-to-back-climate-resolutions 101 “Investors Welcome Net Zero Emissions Commitment with Shell,” Climate Action 100+, published April 16, 2020, accessed October 12, 2021, www.climateaction100.org/news/ investors-welcome-net-zero-emissions-commitment-with-shell/ 102 “Press Release: Investors welcome BP net zero ambition,” IIGCC, published December 2, 2020, accessed October 12, 2021, www.iigcc.org/news/investors-welcome-bp-net-zeroambition/ 103 “Company Assessment: Royal Dutch Shell,” Climate Action 100+, accessed October 12, 2021, www.climateaction100.org/company/royal-dutch-shell/ 104 “Company Assessment:BP,” Climate Action 100+, accessed October 12, 2021, www.climateaction100.org/company/bp/ 105 Jesse Bragg et al., “The Big Con: How Big Polluters are advancing a “net zero” climate agenda to delay, deceive, and deny,” Corporate Accountability, published June 2021, accessed October 12, 2021, page 9, www.corporateaccountability.org/wp-content/uploads/2021/06/The-Big-Con_EN.pdf 106 “Taking Stock: A global assessment of net zero targets,” ECIU and Oxford Net Zero, published March 2021, accessed September 29, 2021, page 18, ca1-eci.edcdn.com/reports/ ECIU-Oxford_Taking_Stock.pdf
107 “Oil majors’ net zero plans still far from Paris targets,” Carbon Tracker Initiative, published May 27, 2021, accessed October 12, 2021, carbontracker.org/oil-majors-net-zero-plansstill-far-from-paris-targets/ 108 “Adapt to Survive: Why oil companies must plan for net zero and avoid stranded assets,” Carbon Tracker Initiative, published September 9, 2021, accessed October 12, 2021, carbontracker.org/reports/adapt-to-survive/
109 David Goldman and Matt Egan, “A third climate activist is expected to be elected to Exxon’s board,” CNN, published June 2, 2021, accessed September 29, 2021, www.cnn. com/2021/06/02/investing/exxon-shareholders-climate-activist/index.html 110 Tom Sanzillo, “IEEFA: Months after tumultuous ExxonMobil annual meeting, no substantial change expected,” Institute for Energy Economic and Financial Analysis, published August 6, 2021, accessed September 29, 2021, ieefa.org/ieefa-u-s-months-after-tumultuous-exxonmobil-annual-meeting-no-substantial-change-expected/ 111 BlackRock Sustainable Investing, “Investment and Fiduciary Analysis for Potential Fossil Fuel Divestment: Phase 1,” BlackRock, published March 2021, accessed September 29, 2021, page 3, http://ieefa.org/wp-content/uploads/2021/03/BlackRock-Phase-One.pdf 112 BlackRock Sustainable Investing, “Investment and Fiduciary Analysis for Potential Fossil Fuel Divestment: Phase 3,” BlackRock, published March 2021, accessed September 29, 2021, page 12, http://ieefa.org/wp-content/uploads/2021/03/BlackRock-Phase-Three.pdf 113 Ibid, 10. http://ieefa.org/wp-content/uploads/2021/03/BlackRock-Phase-Three.pdf 114 BlackRock Sustainable Investing, “Investment and Fiduciary Analysis for Potential Fossil Fuel Divestment: Phase 2,” BlackRock, published March 2021, accessed September 29, 2021, page 2, http://ieefa.org/wp-content/uploads/2021/03/BlackRock-Phase-Two.pdf 115 Ibid, 4. http://ieefa.org/wp-content/uploads/2021/03/BlackRock-Phase-Two.pdf 116 Ibid, 7. http://ieefa.org/wp-content/uploads/2021/03/BlackRock-Phase-Two.pdf 117 Ibid, 7. http://ieefa.org/wp-content/uploads/2021/03/BlackRock-Phase-Two.pdf 118 Christi Electris et al., “Divest Invest Philanthropy: Five Years After Launch,” Croatan Institute and Divest Invest Philanthropy, published October 2019, accessed September, 29, 2021, croataninstitute.org/wp-content/uploads/2021/03/Divest_Invest_Philanthropy_October_2019.pdf page 18 119 “Five Years Out of Oil, the RBF Isn’t Looking Back,” Rockefeller Brothers Fund, published May 11, 2020, accessed September 29, 2021, www.rbf.org/news/five-years-out-oil-rbf-isntlooking-back 120 “2019 Council on Foundations-Commonfund Study of Foundations Released,” Commonfund Institute, published September 28, 2020, accessed October 13, 2021, www. commonfund.org/research-center/press-releases/2019-council-on-foundations-commonfund-study-of-foundations-released 121 Source: Morningstar, J.P. Morgan Asset Management; data as of January 31, 2021. ESG leaders and laggards are based on Morningstar sustainability ranking within the Large Cap Blend US Equity Fund and ETF category.
122 “New Study Shows Oil, Coal and Gas Investments Drove Over $19 Billion in Losses for Major Pension Funds,” 350.org, published November 5, 2019, accessed September 29, 2021, 350.org/press-release/report-colorado-california-lost-19-billion/ 123 CNBC [@CNBC], “‘I’m done with fossil fuels. They’re done,’ @MadMoneyOnCNBC’s @JimCramer says after oil giants Exxon Mobil and Chevron reported Q4 earnings this morning. ‘We’re in the death knell phase.’” Twitter, published January 31, 2020, accessed October 15, 2020, twitter.com/CNBC/status/1223246855015993345 124 Doug Gavel, “Nobel Prize–Winning Economist Joseph Stiglitz Discusses Carbon Pricing and the Green Economy Transition in HPCA Virtual Forum,” The Harvard Kennedy School Belfer Center, published September 8, 2020, accessed October 12, 2021, www.belfercenter.org/publication/nobel-prize-winning-economist-joseph-stiglitz-discusses-carbon-pricingand-green 125 Carolyn Kormann, “The Divestment Movement to Combat Climate Change is All Grown Up,” The New Yorker, published September 14, 2018, accessed October 12, 2021, www. newyorker.com/news/dispatch/the-divestment-movement-to-combat-climate-change-is-all-grown-up 126 Emma Howard, “Thomas Piketty calls for investors to divest from fossil fuels ahead of climate talks,” The Guardian, published November 14, 2015, accessed October 12, 2021, www.theguardian.com/environment/2015/nov/14/thomas-piketty-economist-investors-divest-fossil-fuels-ahead-climate-talks 127 Christine Lagarde, “Speech: Climate change and the financial sector,” European Central Bank, published February 27, 2020, accessed October 15, 2021, www.ecb.europa.eu/ press/key/date/2020/html/ecb.sp200227_1~5eac0ce39a.en.html

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128 Letter to Attorney General Healey, Climate Defense Project, published March 2021, accessed September 29, 2021, climatedefenseproject.org/wp-content/uploads/2021/03/ Harvard-Fossil-Fuel-Investment-Complaint.pdf
129 Lawrence Bacow, “Climate Change: Update on Harvard Action,” Harvard Office of the President, published September 9, 2021, accessed September 30, 2021, www.harvard.edu/ president/news/2021/climate-change-update-on-harvard-action/ 130 “Visual History Of The S&P 500,” ETF Database, published August 26, 2013, accessed September 29, 2021, etfdb.com/history-of-the-s-and-p-500/ 131 “S&P 500 Factsheet,” S&P Global, accessed September 29, 2021, www.spglobal.com/spdji/en/indices/equity/sp-500/#overview 132 “S&P 500 (USD) Factsheet,” S&P Global, accessed October 10, 2021, www.spglobal.com/spdji/en/indices/equity/sp-500/#overview 133 Pippa Stevens, “Exxon Mobil replaced by a software stock after 92 years in the Dow is a ‘sign of the times’,” CNBC, published August 25, 2020, accessed September 29, 2021, www.cnbc.com/2020/08/25/exxon-mobil-replaced-by-a-software-stock-after-92-years-in-the-dow-is-a-sign-of-the-times.html 134 BlackRock Sustainable Investing, “Investment and Fiduciary Analysis for Potential Fossil Fuel Divestment: Phase 2,” BlackRock, published March 2021, accessed September 29, 2021, page 4, http://ieefa.org/wp-content/uploads/2021/03/BlackRock-Phase-Two.pdf 135 “MSCI ACWI ex Fossil Fuels Index,” MSCI, published August 31, 2021, accessed September 29, 2021, www.msci.com/documents/10199/d6f6d375-cadc472f-9066-131321681404 136 “Renewable Power Generation Costs in 2019,” International Renewable Energy Agency, published June 2020, accessed September 30, 2021, www.irena.org/-/media/Files/IRENA/ Agency/Publication/2020/Jun/IRENA_Power_Generation_Costs_2019.pdf 137 “Renewable Energy Market Update: Outlook for 2021 and 2022,” International Energy Agency, published May 2021, accessed September 30, 2021, iea.blob.core.windows.net/ assets/18a6041d-bf13-4667-a4c2-8fc008974008/RenewableEnergyMarketUpdate-Outlookfor2021and2022.pdf 138 “A Tale of Two Share Issues: How fossil fuel equity offerings are losing investors billions,” Carbon Tracker Initiative, published March 31, 2021, accessed September 30, 2021, carbontracker.org/reports/a-tale-of-two-share-issues/
139 “Net Zero by 2050: A Roadmap for the Global Energy Sector,” International Energy Agency, published May 2021, accessed September 30, 2021, www.iea.org/reports/net-zeroby-2050 140 “Fossil Fuel Firms Slashed Nearly 60,000 Jobs In 2020 While Pocketing $8.2 Billion Tax Bailout,” Bailout Watch, published April 2, 2021, accessed September 30, 2021, bailoutwatch.org/analysis/fossil-fuel-firmsslashed-nearly-60000-jobs-in-2020 141 N. Sönnichsen ,“Monthly crude oil price average for Brent 2020-2021,” Statista, published September 13, 2021, accessed September 30, 2021, www.statista.com/ statistics/262861/uk-brent-crude-oil-monthly-price-development/ 142 “S&P 500 Factsheet,” S&P Global, accessed October 11, www.spglobal.com/spdji/en/indices/equity/sp-500/#overview 143 “Bank of China to stop financing new coal mining, power projects overseas from Q4,” Reuters, published September 24, 2021, accessed September 30, 2021, www.reuters.com/ business/sustainable-business/bank-china-stop-financing-new-coal-mining-power-projects-overseas-q4-2021-09-24/ 144 “Mine Injury and Worktime Quarterly Statistics Coal Data,” United States Department of Labor, updated August 3, 2021, accessed October 12, 2021, arlweb.msha.gov/ACCINJ/ ALLCOAL.HTM
145 “Annual Coal Report,” U.S. Energy Information Administration, published October 5, 2020, accessed September 15, 2021, www.eia.gov/coal/annual/ (2008 to 2019 data) 146 Rosalyn Berry, “In 2020, U.S. coal production fell to its lowest level since 1965,” U.S. Energy Information Administration, published July 14, 2021, accessed September 30, 2020, www.eia.gov/todayinenergy/detail.php?id=48696 (2020 data) 147 “Social risks accelerate decline in developed markets as public, investor concerns mount,” Moody’s Investors Service, published July 7, 2021, accessed September 30, 2021, www. moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1227025 148 “Shifting environmental agendas raise long-term credit risk for natural gas investments,” Moody’s Investors Service, published September 30, 2020, accessed September 30, 2021, www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1216901 149 “The National Budget 2021: A summary,” Royal Norwegian Ministry of Finance, published October 7, 2020, accessed September 30, 2021, page 21, www.regjeringen.no/ contentassets/6927b1c9d1b7473eb9bfe8b79de2f3c3/2021_national_budget.pdf 150 “Royal Dutch Shell plc Form 20-F 2020,” Royal Dutch Shell, published March 11, 2021, accessed September 30, 2021, page 18, shell.gcs-web.com/node/18726/html 151 “ExxonMobil 2020 Form 10K,” ExxxonMobil, published 2021, accessed September 30, 2021, page 3, ir.exxonmobil.com/static-files/12d442a1-9503-450f-86a5-139512ce2f35 152 Jeff Brady, “Developer Abandons Keystone XL Pipeline Project, Ending Decade-Long Battle,” NPR, published June 9, 2021, accessed September 30, 2021, www.npr. org/2021/06/09/1004908006/developer-abandons-keystone-xl-pipeline-project-ending-decade-long-battle 153 “New Analysis Demonstrates Massive Costs of ‘Keep It In the Ground’ Anti-Energy Movement,” U.S. Chamber of Commerce, published December 18, 2018, accessed September 30, 2021, www.uschamber.com/press-release/new-analysis-demonstrates-massive-costs-of-keep-it-the-ground-anti-energy-movement-0 154 “Shifting environmental agendas raise long-term credit risk for natural gas investments,” Moody’s Investors Service, published September 30, 2020, accessed September 30, 2021, www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1216901 155 Theodor F Cojoianu, Francisco Ascui, Gordon L Clark, Andreas G F Hoepner, Dariusz Wójcik, “Does the fossil fuel divestment movement impact new oil and gas fundraising?” Journal of Economic Geography, Volume 21, Issue 1, published January 2021, accessed September 30, 2021, Pages 141–164, academic.oup.com/joeg/ article/21/1/141/6042790
156 Daniel Fischel, Christopher Fiore & Todd Kendall, “Fossil Fuel Divestment and Public Pension Funds,” DivestmentFacts.com, published June 2017, accessed September 30, 2021, http://divestmentfacts.com/wp-content/uploads/2017/06/Divestment-and-Public-Pension-Funds_FINAL.pdf 157 Hendrik Bessembinder, “Frictional Costs of Fossil Fuel Divestment,” National Ocean Industries Association, published May 11, 2016, accessed September 30, 2021, http://www. noia.org/wp-content/uploads/2016/06/Bessembinder-Report-FINAL-1.pdf 158 “New Report Shows Divestment Would Cost New York State Pension Billions,” DivestmentFacts.com, published December 26, 2017, accessed September 30, 2021, divestmentfacts.com/new-report-shows-divestment-cost-new-york-state-pension-billions/ 159 Daniel Fischel, “Fossil-fuel divestment only would make things worse for hard-pressed PERA,” Colorado Politics, published September 13, 2018, accessed September 30, 2021, www.coloradopolitics.com/opinion/fossil-fuel-divestment-only-would-make-things-worse-for-hard-pressed-pera/article_c6c477a0-e127-5650-a048-5eae1e4daa0a.html 160 “Divestment: The Impact of Political Decisions on Public Pensions,” Institute for Pension Fund Integrity, published January 8, 2019, accessed September 30, 2021, ipfiusa. org/2019/01/09/divestment-the-impact-of-political-decisions-on-public-pensions 161 Ralph R. Smith, “Social Divesting Proposal Threatens to Gut Some TSP Funds,” FedSmith.com, published March 31, 2021, accessed September 30, 2021, www.fedsmith. com/2021/03/31/social-divesting-proposal-threatens-to-gut-some-tsp-funds/ 162 “Renewable Energy Market Update: Outlook for 2021 and 2022,” International Energy Agency, published May 2021, accessed September 30, 2021, iea.blob.core.windows.net/ assets/18a6041d-bf13-4667-a4c2-8fc008974008/RenewableEnergyMarketUpdate-Outlookfor2021and2022.pdf 163 Rhiana Gunn-Wright, Kristina Karlsson, Kitty Richards, Bracken Hendricks, David Arkush, “A Green Recovery: The case for climate-forward stimulus policies in America’s COVID-19 recession response,” The Roosevelt Institute, published October 2020, accessed September 30, 2021, page 10, rooseveltinstitute.org/wp-content/uploads/2020/10/RI_ AGreenRecovery_Report_202010.pdf
164 “Late Surge in Offshore Wind Financings Helps 2019 Renewables Investment to Overtake 2018,” BloombergNEF, published January 16, 2020, accessed September 30, about.bnef. com/blog/late-surge-in-offshore-wind-financings-helps-2019-renewables-investment-to-overtake-2018/ 165 “Reach for the Sun: The emerging market electricity leapfrog,” Carbon Tracker Initiative, published July 14, 2021, accessed September 30, 2021, carbontracker.org/reports/ reach-for-the-sun/
166 Ibid, 6. carbontracker.org/reports/reach-for-the-sun/ 167 Rupert Way, Matthew Ives, Penny Mealy, J. Doyne Farmer, “Empirically grounded technology forecasts and the energy transition,” Institute for New Economic Thinking at the Oxford Martin School, published September 14, 2021, accessed September 30, 2021, pages 1-2, www.inet.ox.ac.uk/files/energy_transition_paper-INET-working-paper.pdf 168 Ibid, 3. www.inet.ox.ac.uk/files/energy_transition_paper-INET-working-paper.pdf 169 “Net Zero by 2050: A Roadmap for the Global Energy Sector,” International Energy Agency, published May 2021, accessed September 30, 2021, www.iea.org/reports/net-zeroby-2050

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170 Fabio Natalucci, Felix Suntheim, and Jérôme Vandenbussche, “How Investment Funds Can Drive the Green Transition,” The IMF Blog, published October 4, 2021, accessed October 12, 2021, blogs.imf.org/2021/10/04/how-investment-funds-can-drive-the-green-transition/?utm_medium=email&utm_source=govdelivery 171 “Billion-Dollar Weather and Climate Disasters: Overview,” National Centers for Environmental Information, published July 2021, accessed September 30, 2021, www.ncdc.noaa.gov/ billions/
172 “Billion-Dollar Weather and Climate Disasters: Time Series,” National Centers for Environmental Information, published July 2021, accessed September 30, 2021, www.ncdc.noaa. gov/billions/time-series
173 “U.S. hit with 18 billion-dollar disasters so far this year,” National Oceanic and Atmospheric Administration, published October 8, 2021, accessed October 12, 2021, www.noaa.gov/ news/us-hit-with-18-billion-dollar-disasters-so-far-year 174 “Adapt Now: a global call for leadership on climate resilience,” Global Commission on Adaptation, published September 13th, 2019, accessed September 30, 2021, pages 9-10, gca.org/wp-content/uploads/2019/09/GlobalCommission_Report_FINAL.pdf 175 “Adapt Now: a global call for leadership on climate resilience,” Global Commission on Adaptation, published September 13th, 2019, accessed September 30, 2021, page 12, gca. org/wp-content/uploads/2019/09/GlobalCommission_Report_FINAL.pdf, page 12 176 “Renewable Energy Jobs Continue Growth to 11.5 Million Worldwide,” IRENA, published September 29, 2020, accessed October 12, 2021, www.irena.org/newsroom/ pressreleases/2020/Sep/Renewable-Energy-Jobs-Continue-Growth-to-11-5-Million-Worldwide 177 “Occupational Outlook Handbook: Fastest Growing Occupations,” U.S. Bureau of Labor Statistics, updated September 8, 2021, accessed October 8, 2021, www.bls.gov/ooh/ fastest-growing.htm
178 Rabia Ferroukhi, et al., “Renewable Energy Benefits: Measuring Economics,” IRENA, published 2016, accessed October 12, 2021, www.irena.org/-/media/Files/IRENA/Agency/ Publication/2016/IRENA_Measuring-the-Economics_2016.pdf 179 Rhiana Gunn-Wright, Kristina Karlsson, Kitty Richards, Bracken Hendricks, David Arkush, “A Green Recovery: The case for climate-forward stimulus policies in America’s COVID-19 recession response,” The Roosevelt Institute, published October 2020, accessed September 30, 2021, rooseveltinstitute.org/wp-content/uploads/2020/10/RI_AGreenRecovery_ Report_202010.pdf page 15
180 Nick Robins, Vonda Brunsting, David Wood, “Climate change and the just transition A guide for investor action,” The London School of Economics and The Harvard Kennedy School, published December 2018, accessed September 30, 2021, page 4, iri.hks.harvard.edu/files/iri/files/jtguidanceforinvestors.pdf?m=1554219326 181 Nick Robins, Vonda Brunsting, David Wood, “Climate change and the just transition A guide for investor action,” The London School of Economics and The Harvard Kennedy School, published December 2018, accessed September 30, 2021, page 10, iri.hks.harvard.edu/files/iri/files/jtguidanceforinvestors.pdf?m=1554219326 182 “Report: Universal Access to Sustainable Energy Will Remain Elusive Without Addressing Inequalities,” The World Bank, published June 7, 2021, accessed September 30, 2021, www.worldbank.org/en/news/press-release/2021/06/07/report-universal-access-to-sustainable-energy-will-remain-elusive-without-addressing-inequalities 183 “Unlocking Climate Finance to Accelerate Energy Access in Africa,” The Rockefeller Foundation, published April 22, 2021, accessed September 31, 2021, www. rockefellerfoundation.org/wp-content/uploads/2021/04/Unlocking-Climate-Finance-for-SDG7-Report-For-RF.pdf 184 Rachel Bass, Noshin Nova, Sophia Sunderji, “Evaluating Impact Performance: Clean Energy Access Investments,” Global Impact Investing Network, published October 2019, accessed September 30, 2021, page 7, s3.amazonaws.com/giin-web-assets/iris/assets/files/research/Evaluating%20Impact%20Performance_Clean%20Energy%20Access_webfile. pdf
185 “Net Zero by 2050: A Roadmap for the Global Energy Sector,” International Energy Agency, published May 2021, accessed September 30, 2021, page 169, iea.blob.core.windows. net/assets/beceb956-0dcf-4d73-89fe-1310e3046d68/NetZeroby2050-ARoadmapfortheGlobalEnergySector_CORR.pdf 186 “Transforming a Billion Lives: The Job Creation Potential from a Green Power Transition in the Energy Poor World,” The Rockefeller Foundation, published September 21, 2021, accessed October 1, 2021, www.rockefellerfoundation.org/report/transforming-a-billion-lives-the-job-creation-potential-from-a-green-power-transition-in-the-energy-poor-world/ 187 McKinsey Global Institute analysis provided to Sustainable Energy for All 188 Statement of Investor Commitment to Support a Just Transition on Climate Change,” UNPRI, accessed September 30, 2021, www.unpri.org/download?ac=10382 189 “S&P Global Clean Energy Index (USD) Factsheet,” S&P Global, updated October 11, 2021, accessed October 12, 2021, www.spglobal.com/spdji/en/indices/esg/sp-global-cleanenergy-index/#overview 190 “S&P 500 Energy (USD) Factsheet,” S&P Global, updated October 11, 2021, accessed October 12, 2021, www.spglobal.com/spdji/en/indices/equity/sp-500-energysector/#overview 191 “Global Industry Classification Standard,” MSCI, accessed October 12, 2021, www.msci.com/documents/1296102/1339060/GICSSectorDefinitions.pdf/fd3a7bc2-c733-4308-8b27- 9880dd0a766f
192 “S&P 500 (USD) Factsheet,” S&P Global, accessed October 10, 2021, www.spglobal.com/spdji/en/indices/equity/sp-500/#overview 193 “Navajo Power Secures $4.5 Million Financing, Partners With sPower,” Navajo Power, published May 7, 2020, accessed September 2021, navajopower.com/2020/05/07/ navajo-power-secures-4-5-million-financing-partners-with-spower/ 194 “Special Report on Global Warming of 1.5 ºC,” Chapter 5, Intergovernmental Panel on Climate Change, published October 8, 2018, accessed September 30, 2021, www.ipcc.ch/ sr15/chapter/chapter-5/
195 J. Mijin Cha, Vivian Price, Dimitris Stevis, Todd E. Vachon, “Workers and Communities in Transition: Report of the Just Transition Listening Project,” Labor Network for Sustainability, published March 19, 2021, accessed September 30, 2021, www.labor4sustainability.org/jtlp-2021/jtlp-report/workers-and-communities-in-transition 196 J. Mijin Cha, Vivian Price, Dimitris Stevis, Todd E. Vachon, “Workers and Communities in Transition: Report of the Just Transition Listening Project,” Labor Network for Sustainability, published March 19, 2021, accessed October 12, 2021, www.labor4sustainability.org/jtlp-2021/jtlp-report/workers-and-communities-in-transition/ 197 Lenore Palladino and Rhiana Gunn-Wright, “Care & Climate: Understanding the policy intersections,” The Feminist New Deal Coalition, published April 2021, accessed September 30, 2021, pages 12-15, http://feministgreennewdeal.com/wp-content/uploads/2021/04/FemGND-IssueBrief-Draft7-Apr15.pdf 198 Melissa Denchak, “Paris Climate Agreement: Everything You Need to Know,” NRDC, published February 19, 2021, accessed September 30, 2021, www.nrdc.org/stories/ paris-climate-agreement-everything-you-need-know
199 “Goal 7: Department of Economic and Social Affairs,” United Nations, accessed September 30, 2021, sdgs.un.org/goals/goal7 200 Ana Pueyo and Mar Maestre, “Linking energy access, gender and poverty: A review of the literature on productive uses of energy,” Energy Research & Social Science, Volume 53, publukshed July 2019, accessed September 2021, www.sciencedirect.com/science/article/pii/S2214629618306145 201 Ana Pueyo and Mar Maestre, “Linking energy access, gender and poverty: A review of the literature on productive uses of energy,” Energy Research & Social Science, Volume 53, publukshed July 2019, accessed September 2021, www.sciencedirect.com/science/article/pii/S2214629618306145 202 “Colorado Just Transition Action Plan,” Colorado Department of Labor and Employment, published December 31, 2020, accessed September 30, 2021, cdle.colorado.gov/sites/ cdle/files/documents/Colorado%20Just%20Transition%20Action%20Plan.pdf 203 “Supporting Just Transitions in South Africa,” Climate Investment Funds, published September 2020, accessed September 30, 2021, page 20, www.climateinvestmentfunds.org/ sites/cif_enc/files/knowledge-documents/supporting_just_transitions_in_south_africa.pdf 204 “About Us,” Frontier Markets, accessed September 30, 2021, www.frontiermkts.com/about-us 205 “Frontier Markets: The female face of clean energy in India,” Ashden, published 2016, accessed September 30, 2021, ashden.org/winners/frontier-markets/ 206 “Frontier Markets raises $2.25 million financing from The Rise Fund, Teja Ventures and others,” The Economic Times, published July 6, 2020, accessed September 30, 2021, economictimes.indiatimes.com/small-biz/startups/newsbuzz/frontier-markets-raises-2-25-million-financing-from-the-rise-fund-teja-ventures-and-others/articleshow/76811864. cms?from=mdr

4.43 CORE PARTNER ORGANIZATIONS

LAUDATO SI'

MOVEMENT
formerly Global Catholic Climate Movement

ENDORSING ORGANIZATIONS
RAN, GreenFaith, People & Planet, Mid-Ohio Valley Climate Action, Green Education and Legal Fund, People of Albany United for Safe Energy, The United People Project , 350Vermont, Shift: Action for Pension Wealth & Planet Health, Texas Campaign for the Environment, Climate Hawks Vote, WESPAC Foundation, Inc., Texas Campaign for the Environment, Divest Ed, Youth Emergency Auxiliary Services Sierra Leone(YEAS-SL), 350PDX, Volusia Climate Action, New Mexico Climate Justice, FreshWater Accountability Project , 350NYC, Green America, 350 Colorado, DivestNY, 350GDL, 350 Bay Area, 350 West Sound Climate Action, Divest NJ, Extinction Rebellion San Francisco Bay Area, 350 Charlotte, Fossil Free California, AtEnergyStocks.com, Jai Jagat US, Fossil Fuel Divest Harvard, 350 Butte County, Elders Climate Action, 350 New Orleans, Divest NY, 350MoCo, Future Coalition, 350 Triangle, Extinction Rebellion San Francisco Bay Area, 350 Hawaii, Divest Oregon, 350Vermont, Earth Guardians, Maine Youth for Climate Justice, 350 Maine, NM Climate Justice , CCAG, 350 Conejo / San Fernando Valley, 350 Butte County, UNM LEAF (Leaders for Environmental Action and Foresight), Women’s Earth and Climate Action Network (WECAN), Extinction Rebellion San Francisco Bay Area, Platform London DATE OF PUBLICATION: 10/26/21 4.44
1 Rosemary Balsley
From: Gillian Greensite <[email protected]>
Sent: Monday, October 23, 2023 12:30 PM
To: City Council
Cc: Fred Keeley
Subject: Item 4 Resolution
Dear Mayor Keeley and City Council members,
I am writing in strong support of the resolution authored by Mayor Keeley, and Council Members Newsome and Brown regarding the disinvestment of PERS funds from any fossil fuels firms. That the city of Santa Cruz is taking a leadership role in the effort to reduce the power of the fossil fuel industry is indeed laudable. I look forward to hearing a unanimous vote of sup[port for the resolution and thank the Mayor and Council members for bringing it forward.

Sincerely,
Gillian

4.45 1
Rosemary Balsley
From: Andrew Goldenkranz <[email protected]>
Sent: Monday, October 23, 2023 2:55 PM
To: City Council
Subject: items 4 and 6 on 10/24 agenda
Hello esteemed Council members and Mayor Keeley,
I am writing as chair of the county Democratic Party, as well as a board member of Housing Santa Cruz county and other bodies. Thank you for all your hard work on behalf of our community.

Items 4 and 6 on Tuesday 10/24 agenda both deserve your support. 4: Divestment from fossil fuels holdings is economically right and environmentally right. Many jurisdictions, including New York, London, and LA; San Francisco; and the state of Maine have successfully divested in a thoughtful manner consistent with the fiduciary responsibility to those funds and their members. PERS should do the same (STRS too, but that's another matter). Many universities such as UC, Stanford, and Harvard, as well as many faith organizations, have also led the way in this transition. While the quality presentation in your packet dates from 2021, more recent data supports the divestment strategy even more so. The business community is recognizing that stranded assets constitute a sizeable liability and large holdings are increasingly at risk. Thank you for voting YES on this issue. 6: Petitioners for this ballot proposition designed it deliberately to have an impact on the future of city planning and development. As a housing advocate, it seems simply prudent to me to have a thoughtful impact study rather than let proponents and opponents jump to uninformed conclusions. While making no statement on the apparent merits of the proposal, it seems to be clearly in the City's interest to have a well researched and thorough impact report.

Thanks once again for all you do,
Andrew Goldenkranz (he, him)
[email protected]
831‐588‐8262 (c)ard

4.46 1
Rosemary Balsley
From: Pauline Seales <[email protected]>
Sent: Monday, October 23, 2023 4:42 PM
To: City Council
Cc: SC CAN discussion
Subject: 10/24 Agenda item 4
I am writing to express STRONG SUPPORT for item 4

4. Resolution Urging California Public Employees’ Retirement System (CalPERS) to Invest in Sustainable Energy and Divest from Fossil Fuels and Support Climate‐Safe California Goals (CN) Motion to:
1) Adopt a resolution urging CalPERS to invest in sustainable energy and divest from fossil fuels, and 2) Encourage State and Federal legislation that supports Climate‐Safe California goals.

It is difficult to understand why the CalPERS (and CalSTRS) funds still invest in fossil fuels. Thankyou for the resolution.

Both parts of this agenda item are supported by the 1800 member Santa Cruz Climate Action Network.

THANKYOU
Pauline Seales

4.47 City Council

AGENDA REPORT
DATE: 10/09/2023
AGENDA OF: 10/24/2023
DEPARTMENT: City Council
SUBJECT: Appointments to Housing for Health Partnership Board (CN) RECOMMENDATION: Motion to appoint Mayor Keeley and Councilmember KalantariJohnson to the Santa Cruz County Housing for Health Partnership (H4HP) Policy Board.

BACKGROUND: On June 27, 2023, the City Council dissolved the City/County 2x2 Committee and appointed the Deputy City Manager to the Santa Cruz Housing for Health Partnership (H4HP) Policy Board (see attached agenda item). Councilmember Watkins already represented the City on this Board having been appointed by the Council in 2021.

The Santa Cruz County Housing for Health Partnership (H4HP) Policy Board (Policy Board) was created to replace the Homeless Action Partnership (HAP) oversight groups. The H4HP serves as the federally designated Housing and Urban Development Department (HUD) Continuum of Care (CoC) Board for Santa Cruz County and coordinates resources, programs and services throughout the County focused on preventing and ending homelessness. The Policy Board plays an important role in allocating financial resources for homelessness programs.

Along with the two City Council appointments, the Board of Supervisors has appointed two Supervisors to the Policy Board.

DISCUSSION: The H4HP Policy Board plays an important role not only in the allocation of resources but in overseeing the coordination of City and County services to the homeless. In recent weeks, discussions took place with Third District Supervisor Justin Cummings, who is one of the Board of Supervisors’ appointees, regarding ways for the City and County to collaborate in the provision of homelessness services. It was agreed that the H4HP Policy Board represents an important arena for this collaboration and that appointing Mayor Keeley to this Board would be beneficial. In addition, Councilmember Kalantari-Johnson has volunteered to fulfill the City’s other seat, and the Council appreciates the two years of service that Councilmember Watkins served.

FISCAL IMPACT: None.

Submitted By:

Fred Keeley
Mayor
Submitted By:

Shebreh Kalantari-Johnson
Councilmember
Submitted By:

Martine Watkins
Councilmember
ATTACHMENTS:

1. JUNE 27, 2023 AGENDA REPORT.DOC

5.1 City Council

AGENDA REPORT
DATE: 05/19/2023
AGENDA OF: 06/27/2023
DEPARTMENT: City Manager
SUBJECT: Dissolution of the City/County 2x2 Committee and Appointment to the Santa Cruz Housing for Health Partnership (H4HP) Policy Board (CM) RECOMMENDATION: Motion to:
1) Dissolve the City/County 2x2 Committee; and
2) Appoint the position of Deputy City Manager to the Santa Cruz Housing for Health Partnership (H4HP) Policy Board.

BACKGROUND: To discuss issues of mutual concern regarding homelessness in our region, City and County representatives began informally meeting in 2016. In January of 2018, both the City and the County formalized their respective agencies’ participation and communication through a committee known as the 2x2. The 2x2 was comprised of two members from the County Board of Supervisors and two members from the City Council to improve coordination between the agencies regarding homelessness issues. The goal was to form a regional response, in partnership with the County, to strengthen City efforts to improve how we respond to the homelessness crisis.

DISCUSSION: To work together to address issues of mutual concern regarding homelessness, the 2x2 was formally created in January 2018. Issues often discussed were coordination on policies, housing, and service programs for the unhoused population. The County and City shared many issues of concern that required collaboration and coordination of efforts.

Additionally, the intention was to improve communication regarding decisions being made by the City Council or the Board of Supervisors that impacted City and County efforts related to homelessness.

In January of 2022, the Santa Cruz County Housing for Health Partnership (H4HP) Policy Board (Policy Board) was created to replace the Homeless Action Partnership (HAP) oversight groups.

The newly created H4HP serves as the federally designated Housing and Urban Development Department (HUD) Continuum of Care (CoC) Board for Santa Cruz County and coordinates resources, programs and services focused on preventing and ending homelessness.

Prior to the creation of the H4HP Policy Board, the HAP CoC oversight groups included staff from the County's four cities, the County, a member of the health sector, members from various non-profits serving the homeless community, and those with lived experience. The HAP groups

5.2 did not include elected officials. Subsequently, changes were made to the CoC governance structure to ensure broader and deeper engagement of City and County leaders in the CoC planning and decision-making process, with the additional option to include elected officials from the cities and the County on the Policy Board. Current Policy Board membership overlaps with individuals historically involved with the 2x2 and HAP. The City of Santa Cruz has two seats on the Policy Board, which may be filled by elected officials, government staff, or other citizens.

Elimination of the 2x2 will reduce the need for duplicate planning discussions among key City and County leaders but will not preclude City and County staff from continuing to meet regularly on homelessness issues. Elected leaders can also continue to receive regular updates from staff on topics related to homelessness outside of the previous 2x2 structure.

For Policy Board membership, the City’s current representatives are Councilmember Watkins and Planning and Community Development Director Lee Butler. Both were appointed by the City Council in December of 2021, with a term of two years. Mr. Butler is no longer serving in the Deputy City Manager position overseeing homelessness response programs; therefore, staff recommend the City Council appoint the position of Deputy City Manager to the Policy Board as opposed to a specific person as the representative to replace Mr. Butler for the current two-year term ending December 31, 2023.

FISCAL IMPACT: None.

Prepared and Submitted By:

Lisa Murphy
Deputy City Manager
Approved By:

Matt Huffaker
City Manager
ATTACHMENTS:

None.

5.3 City Council

AGENDA REPORT
DATE: 10/17/2023
AGENDA OF: 10/24/2023
DEPARTMENT: City Council
SUBJECT: Impact Report on Effect of Housing for People Ballot Initiative (CN) RECOMMENDATION: Motion to direct the preparation of an impact report on the effect of the proposed Housing for People initiative which would amend the City’s Municipal Code to: (1) prohibit the City Council from amending the City’s General Plan or Zoning Ordinance in a way that increases allowable height limits or floor area ratios without a prior vote of the people; and (2) increases the City’s inclusionary housing requirements to at least 25% for developments with 30 or more units.

BACKGROUND: On May 25, 2023, proponents for an initiative petition entitled “Housing for People,” submitted a Notice of Intent to Circulate a Petition and a Request for Ballot Initiative Title and Summary with the City Clerk. The City Attorney’s Office prepared the ballot title and summary for inclusion in the petition form pursuant to Elections Code Section 9203, and the City Clerk furnished a copy to the proponents on June 8, 2023.

On October 9, 2023, the proponent submitted the petition to the City Clerk for a prima facie count. On that same date, the City Clerk determined that there were more than the required number of actual signatures on the petition and delivered the petition to the County Clerk to verify the validity of the signatures. The County Elections Department is currently working through the petition to determine if the minimum of 3,683 valid signatures has been met. The County has until November 21, 2023, to complete the certification process.

DISCUSSION: The Housing for People ballot initiative would amend the City’s Municipal Code to prohibit the City Council from amending the City’s General Plan or Zoning Ordinance in a way that increases allowable height limits or floor area ratios without a prior vote of the people. It would also increase the City’s inclusionary housing requirements to at least 25% for developments with 30 or more units.

These proposed changes would likely have substantive impacts on the City and its compliance with state housing laws, housing goals, and on City revenue. It is therefore recommended that Council direct staff to prepare a comprehensive report on potential impacts of the Housing for People Initiative.1
1 Note that Elections Code section 9212 allows the Council to direct preparation of a report on proposed initiatives and their effects, but Section 9212 Reports are limited by short timeframes governed by statute. Apart from Section 9212, the Council is also generally authorized to direct the preparation of a general impact report, which is the action recommended here.

6.1 To prepare the report for timely distribution and discussion for the March 2024 election, staff may seek the assistance of a consultant in developing the report. The impact report will be presented to Council no later than February 13, 2024.

FISCAL IMPACT: The exact consultant costs associated with preparation of the report are unknown at this time, but anticipated to be less than $20,000. Costs associated with the preparation of the report will be absorbed within the City’s approved FY 2023 budget.

Submitted By:

Fred Keeley
Mayor
Submitted By:

Shebreh Kalantari-Johnson
Councilmember
Submitted By:

Scott Newsome
Councilmember
ATTACHMENTS:

1. NOTICE OF INTENTION AND MEASURE.PDF

2. BALLOT TITLE AND SUMMARY

6.2 6.3

6.4 6.5

6.6 1
Bonnie Bush
From: Keresha Durham
Sent: Thursday, May 25, 2023 3:47 PM
To: Bonnie Bush
Subject: Housing For People submitted May 24, 2023
Attachments: Housing For People Initiative-Submitted May 24, 2023.docx Hi Bonnie,
We submitted the attached Notice of Intention with signatures yesterday on May 24, 2023. Below are the addresses.

Thank you for your help!
We the undersigned hereby request that a Ballot Title and Summary be prepared by the
City Attorney for the following initiative to be placed on the March 5, 2024 city
ballot.

Stephen G. Bare, Retired, Local High School Teacher
Keresha Durham, Climate and Environmental Activist, Local Teacher --
Keresha Durham~ educator, environmentalist
"care-sha"
_≈o
_-\<,_
(_)/ (_)

6.7 Ballot Title:

AN INITIATIVE MEASURE PROPOSING AN ORDINANCE THAT: (1) PROHIBITS THE SANTA CRUZ CITY COUNCIL FROM AMENDING THE CITY’S GENERAL PLAN OR

ZONING ORDINANCE IN A WAY THAT INCREASES ALLOWABLE HEIGHT LIMITS

OR FLOOR AREA RATIOS FOR DEVELOPMENT PROJECTS, WITHOUT A PRIOR VOTE OF THE PEOPLE; AND (2) INCREASES THE CITY’S INCLUSIONARY HOUSING REQUIREMENTS TO AT LEAST 25% FOR DEVELOPMENTS WITH 30 OR MORE HOUSING UNITS.

Summary:

If approved by the voters, this initiative would prohibit the Santa Cruz City Council from amending the City’s General Plan or Zoning Ordinance in a way that increases the allowable height limits or floor area ratios (the gross floor area of all buildings on a lot, divided by the net lot area) beyond what was in effect on June 1, 2023 for development projects, without a prior vote of the people of the City of Santa Cruz approving the proposed increase. In order to effectuate this prohibition, the City Council would be required to add the following language to Santa Cruz Municipal Code section 24.06.080:
“Height Limits. No amendments to the General Plan or Zoning Ordinance that would increase allowable height limits or Floor Area Ratios (FAR) for development projects shall be adopted without a prior vote of the people approving the proposed increase.”
The initiative would also increase the City’s inclusionary (i.e., affordable) housing requirements from the existing 20% to 25% for developments with 30 or more housing units. Subject to some exceptions, Santa Cruz Municipal Code section 24.16.020 currently provides that, for development projects with five or more units, 20% of those units must be made available to low or moderate income households. (See SCMC 24.16.020(4)-(5).) The proposed initiative would require the City Council to amend the Municipal Code so as to require a higher 25% inclusionary rate for developments with 30 or more housing units.

A simple majority of voters is required to pass the measure.

6.8 From: Bonnie Bush
To: City Council
Subject: FW: Letter re: agenda item #6
Date: Monday, October 23, 2023 2:00:35 PM
Attachments: image002.png
Bonnie Bush
City Clerk
City of Santa Cruz
809 Center St., Room 8, Santa Cruz, CA 95060
Phone: 831-420-5035
Email: [email protected]
Web: www.cityofsantacruz.com
Public Records Requests may be submitted online via the Public Records Request form, by email, or by hard copy form available at the City Clerk’s Office located at 809 Center Street, Room 9, Santa Cruz, CA 95060.

Please note: Public Record Act Requests submitted via email, fax, USPS, or dropoff after 5:00 p.m. on a business day, Saturdays, Sundays, or holidays will be processed as received on the next open business day. The 10-day response period begins when the request is received.

From: Chris Murphy <[email protected]>
Sent: Monday, October 23, 2023 1:56 PM
To: Bonnie Bush <[email protected]>
Cc: Fred Keeley <[email protected]>
Subject: Letter re: agenda item #6
Good Afternoon Bonnie,
I wanted to express my support for the Council tomorrow to consider an impact report on the effect of the proposed Housing for People ballot initiative. We should understand the impacts of this effort on our community, and the ability to create much needed housing, before this ballot initiative moves any further forward.

Thank you.

Chris Murphy
SVP of Franchise Development, Golden State Warriors
President, Santa Cruz Warriors
831.713.4390 (office) | 510.846.5724 (cell)

6.9 1
Rosemary Balsley
From: Andrew Goldenkranz <[email protected]>
Sent: Monday, October 23, 2023 2:55 PM
To: City Council
Subject: items 4 and 6 on 10/24 agenda
Hello esteemed Council members and Mayor Keeley,
I am writing as chair of the county Democratic Party, as well as a board member of Housing Santa Cruz county and other bodies. Thank you for all your hard work on behalf of our community.

Thanks once again for all you do,
Andrew Goldenkranz (he, him)
[email protected]
831‐588‐8262 (c)ard

6.10 City Council

AGENDA REPORT
DATE: 10/05/2023
AGENDA OF: 10/24/2023
DEPARTMENT: Fire
SUBJECT: USDA, Forest Service Type 6 Fire Truck (Engine) – Congressionally Designated Project - Grant Acceptance, Authorization and Appropriation (FD)
RECOMMENDATION: Motion to:
1) Adopt a resolution authorizing the City Manager to apply for, accept, and appropriate funds from the USDA Forest Service Grant to purchase a Type 6 Fire Engine and additional equipment; and
2) Adopt a resolution amending the FY 2024 budget to appropriate a $400,000 grant from USDA Forest Service to purchase a Type 6 Fire Engine and additional equipment.

BACKGROUND: Nearly every year, California experiences major wildfires that can be devastating to the environment and communities throughout the state. These fires frequently and tragically displace California locals from their homes due to property destruction, poor air quality, extreme heat, and other consequences. Santa Cruz County has seen 7-major wildland fires over the last 15 years. The most recent was the 2020 CZU August Lightening Complex Fire that burned over 911 homes and displaced thousands of residents.

The purpose of this project is to purchase a Type 6 Fire Engine and additional equipment that is specifically designed for wildland fire suppression. This Engine can access a wider variety of terrain that is currently inaccessible with our current apparatus. This project will also procure additional equipment for the purpose of vegetation management and fuels reduction in our Wildland Urban Interface regions within the City.

DISCUSSION: In 2022, Congressman Panetta submitted a request to the House Committee on Appropriations to request funding for Wildfire Resiliency in the City of Santa Cruz. The request was approved for $400,000 via a grant from the USDA Forest Service for the purchase of a Type 6 Fire Engine and additional equipment.

The addition of a Type 6 Fire Engine to the City of Santa Cruz Fire Department’s apparatus fleet will greatly enhance the ability to respond and mitigate wildland fires in the City, adjoining agencies, and for Statewide mutual aid requests. A Type 6 Fire Engine is specially designed for wildland suppression and is smaller and more maneuverable than engines in the current fleet.

This will allow us to access areas within the City’s Wildland Urban Interface that would

7.1 otherwise be inaccessible with the larger engines. A Type 6 Fire Engine will also aid in vegetation management activities within the City by providing transportation, tools and on-site fire suppression capabilities. The additional equipment requested includes items to fully outfit the truck. (Hoses, SCBAs, hand tools, power tools, radios) In addition, the funds would also be used to purchase a cache of hand tools, power tools and wildland gear to grow the City’s vegetation management capabilities.

FISCAL IMPACT: Approval of this recommendation will have a net zero impact on the General Fund. $400,000 will be appropriated in the General Fund to purchase a Type 6 Engine and associated equipment and will be offset by $400,000 of General Fund revenue from the USDA Forest Service Grant.

Prepared By:

Tim Shields
Division Chief - Prevention
Submitted By:

Rob Oatey
Fire Chief
Approved By:

Matt Huffaker
City Manager
ATTACHMENTS:

1. RESOLUTION USDA FOREST SERVICE GRANT.DOCX

2. BUDGET ADJUSTMENT.PDF

7.2 RESOLUTION NO. NSRESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CRUZ AUTHORIZING

THE CITY MANAGER TO APPLY FOR, ACCEPT AND APPROPRIATE USDA FOREST SERVICE FUNDS OF $400,000 INTO THE FY2024 GENERAL FUND AND AMEND THE FIRE DEPARTMENT BUDGET TO PURCHASE A TYPE 6 FIRE TRUCK (ENGINE) AND

ASSOCIATED EQUIPMENT
WHEREAS, The City of Santa Cruz Fire Department is seeking to purchase a Type 6 Fire Engine and associated equipment with grant funding from the USFA Forest Service; and WHEREAS, Procurement of this equipment will greatly enhance the Fire Department’s response and mitigation of wildland fires in the City’s Open Spaces; and WHEREAS, This project will improve safety to first responders and homeowners living in and around the City’s Open Spaces by creating and maintaining shaded fuel breaks, creating and maintaining first responder access routes and protecting the City’s critical infrastructure, homes and businesses.

NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Santa Cruz hereby:

1. Directs City of Santa Cruz staff to submit the grant proposal package to USDA Forest Service for the project described more particularly in the accompanying agenda report in the amount of $400,000; and

2. Authorizes the City Manager of the City of Santa Cruz to apply for, accept, and execute in the name of the City of Santa Cruz, all necessary applications, contracts and agreements and amendments thereto and appropriate funds from USDA Forest Service to procure a Type 6 Fire Engine and associated equipment.

PASSED AND ADOPTED this 24th day of October, 2023, by the following vote:

AYES:

NOES:

ABSENT:

DISQUALIFIED:

APPROVED: __________________________
Fred Keeley, Mayor
ATTEST: __________________________
Bonnie Bush, City Clerk Administrator

7.3 City of Santa Cruz

BUDGET ADJUSTMENT REQUEST
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REQUESTED BY DEPARTMENT HEAD

APPROVAL

BUDGET/ACCOUNTING
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APPROVAL

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APPROVAL
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TOTAL EXPENDITURE

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10/04/2023
Receive and appropriate a Federal Grant from the USDA, Forest Service Pacific Southwest Region, Fire & Aviation Management for the purchase of a Type 6 Fire Truck (Engine) and associated equipment. 311-21-32-2203-43150 C212403-111-2266-0 Federal Capital Grants and Contributions 400,000 Type 6 Fire Truck
400,000
311-21-32-2203-57402 C212403-100-2020-0 Vehicle equipment 400,000 Type 6 Fire Truck
400,000
0 Kimberle
e Steele
Digitally signed by Kimberlee
Steele
DN: cn=Kimberlee Steele, o=Fire
Department, ou=Administration,
[email protected]
m, c=US
Date: 2023.10.05 14:43:22 -07'00'
Robert
Oatey
Digitally signed
by Robert Oatey
Date: 2023.10.05
14:56:32 -07'00'
Raudel
Mendoza
Digitally signed by
Raudel Mendoza
Date: 2023.10.06
08:55:48 -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: 2023.10.10 13:05:26 -07'00'

7.4 City Council

AGENDA REPORT
DATE: 10/03/2023
AGENDA OF: 10/24/2023
DEPARTMENT: Finance
SUBJECT: Liability Claim Filed Against the City of Santa Cruz (FN) RECOMMENDATION: Motion to reject the liability claim of Kathleen Gould, based on staff recommendation.

BACKGROUND: N/A
DISCUSSION: Claim to be rejected:

1. Claimant: Kathleen Gould
Date of occurrence: 8/21/2023
Date of claim: 9/21/2023
Amount of claim: $6,958.15
Claimant seeks reimbursement for damages allegedly caused by a City owned tree.

Self-Represented
FISCAL IMPACT: No fiscal impact.

Prepared By:

Ross Brandon
Risk & Safety Manager
Submitted By:

Elizabeth Cabell
Finance Director
Approved By:

Matt Huffaker
City Manager
ATTACHMENTS:

None.

8.1 City Council

AGENDA REPORT
DATE: 10/04/2023
AGENDA OF: 10/24/2023
DEPARTMENT: Finance
SUBJECT: Award Contract for Investment Management Services (FN) RECOMMENDATION: Motion to:
1) Award a contract for Investment Management Services to PFM Asset Management LLC, San Francisco, California for fiscal years ending June 30, 2023, 2024, 2025, 2026, and 2027 with five option years; and
2) Authorize the City Manager to execute an agreement in a form approved by the City Attorney with PFM Asset Management LLC for Investment Management Services.

BACKGROUND: It is the responsibility of the Finance Department to manage and invest the City’s cash resources. This responsibility is regulated by the City's Investment Policy (Policy) crafted in accordance with State Government Code and adopted by the City Council. The Policy delineates the allowable investment vehicles that the City can use for surplus cash not needed for current operations. The City’s investment objectives are safety, liquidity, and return on investment (yield).

The Finance Department currently reviews and manages all investments of pooled and unpooled cash and investment accounts citywide to ensure that the primary objectives of safety and liquidity are being met, consistent with the Policy. Once those requirements are satisfied, staff will strive to maximize the yield on the City’s investments.

The City’s primary investment objective is to achieve a reasonable rate of return on public funds while minimizing the potential for capital losses arising from market changes or issuer default.

Although the generation of revenue through interest earnings on investments is an appropriate City goal, the primary consideration in the investment of City funds is capital preservation in the overall portfolio. As such, the City’s yield objective is to achieve a reasonable rate of return on City investments rather than the maximum generation of income, which could expose the City to unacceptable risk.

DISCUSSION: On June 6, 2023, a Request for Proposal (RFP) was released for investment management services with the following schedule:
• Release of RFP - June 6, 2023
• Deadline for written questions - July 5, 2023
• Proposals due - August 2, 2023

9.1 The RFP was sent to over sixty vendors, and outreach included small businesses and posting to the City’s and California Society of Municipal Finance Officers (CSMFO) website.

In response to the City’s RFP, proposals were received from nine firms. A three-person evaluation committee consisting of the Finance Director, Revenue Manager and Principal Management Analyst independently evaluated the eight qualified proposals, and later interviewed the top four firms on August 25, 2023.

The proposals were evaluated using the following criteria:
• Adherence to the RFP requirements
• Firm background information
• Firm qualifications, expertise, and experience
• Team qualifications, expertise and experience
• Technical approach/work plan
• Cost proposal
• References
• Project understanding, plan and approach
• Quality of presentation
The four firms interviewed were:
• PFM Asset Management LLC
• Meeder Public Funds
• Chandler Asset Management
• Public Trust Advisors

ANALYSIS
All four firms under consideration offer exceptional investment management services. The evaluation committee found the proposal and interview with the PFM Asset Management LLC (PFMAM) team superior, most notably in their understanding of the City’s approach to investments.

A copy of the cumulative score sheet is attached.

PFMAM offers comprehensive services, providing a complete and thorough evaluation of the City's treasury related services and providing recommendations regarding analyzing historical cash flow, ensuring liquidity remains sufficient, while increasing core assets for long-term growth, and reviewing duration strategies that are in line with the City’s risk and return objectives. PFMAM was highly recommended by similar local government clients who were extremely satisfied with their reporting, educational services, and helping implement policies similar to our divestment in fossil fuels Climate Action Plan goal. A copy of the presentation made during the interview phase is attached to this report.

FISCAL IMPACT: Based on a managed portfolio of $100 million, the annual fee would be $71,250. The fee calculation is fixed for the term of the initial five-year agreement and is based on the amount of funds managed by PFM, with a minimum annual fee of $40,000, and a CPI increase if the City so chooses to continue the engagement after the initial period. Should Council approve the professional services agreement, the service fees would be paid for by any yield received through the portfolio.

9.2 Prepared By:

Marisol Gomez
Assistant Finance Director
Submitted By:

Elizabeth Cabell
Director of Finance
Approved By:

Matt Huffaker
City Manager
ATTACHMENTS:

1. RFP FIN 2335 CUMULATIVE SCORE SHEET.PDF

2. PROFESSIONAL SERVICES AGREEMENT FOR INVESTMENT MANAGEMENT SERVICES PFM.PDF

3. PFM ASSET MANAGEMENT LLC INTERVIEW PRESENTATION.PDF

9.3 FIN2335
PFM Asset Management LLC 47.42 8.41 29.50 85.33
Meeder Public Funds 46.92 12.29 25.83 85.04
Chandler Asset Management 47.33 8.96 25.83 82.12
Public Trust Advisors 40.50 15.00 26.00 81.50
Garcia Hamilton & Associates, L.P. 44.17 6.79 0.00 50.95 CCM Investment Advisers, LLC 41.25 7.78 0.00 49.03
Wulff, Hansen & Co. 34.83 14.00 0.00 48.83
Lee Capital Management 28.75 3.93 0.00 32.68
Proposer
Phase 1
Written Evaluation
(50 Points Total
Possible)
Cost Proposal
15% of Score
(15 Points Total
Possible)
Phase 2
Oral Interviews
( 35 Points Total
Possible)
Total
(100 Points Total
Possible)

CUMULATIVE SCORE SHEET

9.4 City of Santa Cruz Professional Services Agreement for Investment Management Services October 2023 (Form Rev.01/23) Page 1

PROFESSIONAL SERVICES AGREEMENT WITH

PFM ASSET MANAGEMENT LLC

FOR INVESTMENT MANAGEMENT SERVICES
THIS AGREEMENT for professional services is made by and between the City of Santa Cruz (“City”) and PFM ASSET MANAGEMENT LLC (“Consultant”) (each is referred to individually as a “Party” and collectively, as the “Parties”) as of October 24, 2023 (the “Effective Date”).

NOW, THEREFORE, in consideration of each other’s mutual promises, the Parties hereto agree as follows:

SECTION 1: SCOPE OF WORK
Consultant will furnish services as defined and described in the Scope of Work, attached hereto as Exhibit A, Scope of Work and incorporated herein.

SECTION 2: RESPONSIBILITIES OF CONSULTANT
All work performed by Consultant, or under Consultant’s direction, shall be rendered in accordance with the generally accepted practices, and to the standards of, Consultant's profession. Consultant represents and agrees that Consultant: (i) is fully experienced and properly qualified to perform the work and services provided for herein, (ii) has the financial capability required for the performance of the work and services, and (iii) is properly equipped and organized to perform the work and services in a competent, timely, and proper manner, in accordance with the requirements of this Agreement.

Consultant shall not undertake any work beyond the Scope of Work set forth in Exhibit A unless such additional work is approved in advance and in writing by City. The cost of such additional work shall be reimbursed to Consultant by City on the same basis as provided for in Section 4.

If, in performing the work, it is necessary to conduct field operations, security and safety of the job site will be the Consultant's responsibility excluding, the security and safety of any facility of City within the job site which is not under the Consultant's control.

Consultant shall meet with Elizabeth Cabell, Director of the Finance Department, hereinafter called "Director", or other designated and authorized City personnel, or third parties as necessary, on all matters connected with carrying out of Consultant’s services described in Exhibit A, Scope of Work. Such meetings shall be held at the request of either Party. Review and City approval of completed work shall be obtained monthly, or at other intervals as may be mutually agreed upon during the course of this Agreement. Review, approval, or acceptance of Consultant’s work by City or others shall not relieve Consultant from responsibility for errors and omissions in Consultant’s work.

SECTION 3: RESPONSIBILITIES OF THE CITY
City shall make available to Consultant all necessary data and information in the City's possession and shall actively assist Consultant in obtaining such information from other agencies and individuals as needed. Consultant is entitled to reasonably rely upon the accuracy and completeness of such data and information, and Consultant shall provide City prompt written notice of any known defects in such data and information.

9.5 City of Santa Cruz Professional Services Agreement for Investment Management Services October 2023 (Form Rev.01/23) Page 2
The Director may authorize a staff person to serve as his or her representative. The work in progress shall be reviewed at such intervals as may be mutually agreed upon between the Parties. The City will be the sole judge of acceptable work, provided that such approval will not be unreasonably withheld or delayed. If the work is not acceptable, City will inform Consultant of the changes or revisions necessary to secure approval.

SECTION 4: FEES AND PAYMENT
For services actually performed, the City will compensate Consultant at the rates set forth in the Fee Schedule detailed in Exhibit B and in accordance with the terms set forth therein. Payment for Consultant's services in carrying out the entire the Scope of Work shall be made within the budget limit, or limits shown, in the Fee Schedule detailed in Exhibit B. Such payment shall be considered the full compensation for all personnel, materials, supplies, and equipment used by Consultant in the Scope of Work. Markups shall not be charged for any approved sub-consultants or subcontractors.

Consultant agrees that the payments to Consultant specified in this Section 4 will constitute full and complete compensation for all obligations assumed by Consultant under this Agreement. Where conflicts regarding compensation may occur, the provisions of this section apply.

Variations from the budget for each task which are justified by statements indicating personnel time expended and submittal of a revised budget are only allowed with prior City approval; however, in no event shall the total fee charged for the Scope of Work set forth in Exhibit A, Scope of Work exceed the rates set forth in the Fee Schedule detailed in Exhibit B without advance written City authorization in the form of an amendment or change order.

Invoices shall be accompanied with a report indicating the basis upon which the fees are generated within the billing period, as identified in Exhibit A, Scope of Work . Unless otherwise specified in Exhibit B, Fee Schedule, payments shall be made monthly by the City within thirty (30) days based on invoices from the Consultant which detail the monthly fees incurred by the Consultant.

SECTION 5: TRAVEL REIMBURSEMENT POLICY
The City shall not be responsible for any travel, meal, or lodging reimbursements to Consultant and/or Consultant’s employees. The total fees and costs of Consultant’s services shall not exceed the amount described in the Fee Schedule.

General Rule

1. Exceptions to any of the above requirements require advance written permission from the Director or City’s designated agent contracting with the Consultant.

2. Tips and gratuities will not be reimbursed.

3. Alcoholic beverage purchases will not be reimbursed.

4. Consultants will exercise prudence in incurring reimbursable expenses.

5. The City of Santa Cruz has the sole discretion to deny any Consultant/contractor proposed reimbursable expense the City has determined to be excessive or an inappropriate use of public funds.

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be approved in advance in writing by the City. Only City’s authorized representative(s) is authorized to approve changes to this Agreement on behalf of City.

SECTION 7: TERM AND SCHEDULE
The term of this Agreement shall be on the effective date of this Agreement and terminating on October 24, 2028. At the option of the City, this Agreement may be renewed annually under the same contractual terms and conditions by letter agreement for an additional option of five (5) one (1-year) renewal periods, per the rates set forth in the Fee Schedule detailed in Exhibit B
Consultant shall begin work as specified in a written authorization (e.g., Notice to Proceed) to perform services. The written authorization to perform work shall not be issued until after this Agreement has been approved and authorized by the City.

The Work Schedule for completion of the work shall be as shown upon Exhibit C Work Schedule.

Neither party will be held responsible for delay or default caused by declared emergencies, natural disasters, or any Force Majeure event which is beyond the party's reasonable control. Consultant will, however, make all reasonable efforts to remove or eliminate such a cause of delay or default and will, upon the cessation of the cause, diligently pursue performance of its obligations in this Agreement.

The City reserves the right to obtain the item(s) and/or services covered by this Agreement from another source during any on-going suspension of service due to the circumstances outlined above.

The Parties therefore agree that time is of the essence in the performance of this Agreement.

SECTION 8: TERMINATION
The City may terminate the Agreement for convenience by providing written notice to Consultant not less than ten (10) calendar days prior to an effective termination date.

The City or Consultant may terminate the Agreement for cause by providing written notice to the other party not less than thirty (30) calendar days prior to an effective termination date.

The City may, at its option, allow Consultant to cure its failure to perform within fifteen (15) business days (or longer period authorized in writing by the City) from the date of the City’s termination notice. The termination shall be become effective if Consultant has not cured within such time period to the City’s satisfaction.

Consultant may terminate this Agreement for cause if the City fails to cure a material default in performance within a period of thirty (30) calendar days (or such longer period agreed to by the Consultant), from date of the Consultant’s written termination notice specifying the default in performance.

9.7 City of Santa Cruz Professional Services Agreement for Investment Management Services October 2023 (Form Rev.01/23) Page 4
Agreement and the actual cost to the City. Termination of the Agreement pursuant to this paragraph shall not relieve the Consultant of any liability to City for additional costs, expenses, or damages sustained by City due to failure of the Consultant to perform pursuant to the Agreement. City may withhold any payments to Consultant for the purpose of set-off until such time as the exact amount of damages due City from Consultant is determined. After the effective date of termination, Consultant will have no further claims against the City under the Agreement. No other compensation will be payable for anticipated profit on unperformed services.

SECTION 9: INSURANCE
Prior to the beginning of and throughout the duration of the Agreement, Consultant will maintain and comply with the Insurance Requirements as set forth in Exhibit D. Consultant will insure the City against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder. The insurance coverages required shall not in any way limit the liability of the Consultant.

SECTION 10: INDEMNIFICATION
Consultant agrees, to the fullest extent permitted by law, to indemnify, defend, and hold harmless the City, its officials, officers, employees, agents, and volunteers (collectively, “Indemnitees”) from and against any and all liability, claim, action, loss, injury, damage, judgment, or expense, including attorneys’ fees and costs (“Losses”) caused by or resulting from the negligence, recklessness, or willful misconduct of Consultant, Consultant’s officers, employees, agents, or subcontractors in any way related to this Agreement. Consultant’s duty to indemnify and hold harmless Indemnitees shall not apply to the extent such Losses are caused by the sole or active negligence or willful misconduct of Indemnitees. The obligation to defend shall arise regardless of any claim or assertion that Indemnitees caused or contributed to the Losses.

In the event this Agreement involves the performance of design professional services by Consultant, Consultant’s officers, employees, agents, or subcontractors, Consultant’s costs to defend Indemnitees shall not exceed the Consultant’s proportionate percentage of fault per Civil Code §2782.8. This section shall survive the termination or expiration of this Agreement.

SECTION 11: EQUAL EMPLOYMENT OPPORTUNITY/NON-DISCRIMINATION POLICIES City’s policies promote a working environment free from abusive conduct, discrimination, harassment, and retaliation; and require equal opportunity in employment for all regardless of race, religious creed (including religious dress and grooming practices), color, national origin (including language use restrictions), ancestry, religion, disability (mental and physical), medical condition, sex, gender (including gender identity and gender expression), physical characteristics, marital status, age, sexual orientation, genetic information (including family health history and genetic test results), organizational affiliation, and military or veteran status, or any other consideration made unlawful by local, State or Federal law. City requires Consultant to comply with all applicable Federal and State and local equal employment opportunity laws and regulations, and Consultant is responsible for ensuring that effective policies and procedures concerning the prevention of abusive conduct, discrimination, harassment, and retaliation exist in Consultant’s business organization. The City’s current Equal Employment Opportunity and Non-Discrimination policies to which this Section applies may be viewed at http://www.codepublishing.com/CA/SantaCruz/?SantaCruz09/SantaCruz0983.html and http://www.cityofsantacruz.com/home/showdocument?id=59192.

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SECTION 12: LEGAL ACTION/ATTORNEYS’ FEES
If any action at law or in equity is brought to enforce or interpret the provisions of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees in addition to any other relief. The laws of the State of California, with jurisdiction in the Santa Cruz County Superior Court, shall govern all matters relating to the validity, interpretation, and effect of this Agreement and any authorized or alleged changes, the performance of any of its terms, as well as the rights and obligations of Consultant and the City.

SECTION 13: AMENDMENTS
This Agreement may not be amended in any respect except by way of a written instrument which expressly references and identifies this particular Agreement, which expressly states that its purpose is to amend this particular Agreement, and which is duly executed by the City and Consultant. Consultant acknowledges that no such amendment shall be effective until approved and authorized by the City’s authorized representative. No representative of the City is authorized to obligate the City to pay the cost or value of services beyond the scope of services set forth in Exhibit A, Scope of Work. Such authority is retained solely by the City Manager, Director, or their designee. Unless expressly authorized by the City Manager or Director, Consultant’s compensation shall be limited to that set forth in Exhibit B, Fee Schedule.

SECTION 14: MISCELLANEOUS PROVISIONS

1. Project Manager/Key Staff. Director reserves the right to evaluate and confer with Consultant regarding the project manager or other key staff assigned by Consultant to perform the work under this Agreement. Consultant shall replace the project manager or key staff upon Director’s request due to Director’s concern about their performance, or City shall have the right to terminate this Agreement. Otherwise, in the event that a change in assignment of the project manager or other key staff is required, the Consultant shall (i) notify City of the resulting replacement, (ii) introduce the individual serving as the replacement to City, and (iii) provide City with a résumé and any other information regarding the individual that may be reasonably requested by City. City reserves the right to reject the replacement for the project manager or other key staff and shall have the right to terminate this Agreement.

2. Consultant Services Only. Consultant is employed to render professional services only and any payments made to Consultant are compensation solely for such professional services.

3. Independent Contractor. In the performance of this Agreement, it is expressly understood that Consultant, including each of Consultant’s employees, agents, subcontractors or others under Consultant’s supervision or control, is an independent contractor solely responsible for its own acts and omissions, and shall not be considered an employee of the City for any purpose. Consultant agrees to comply with AB5, codified at Labor Code section 2750.3, and shall indemnify, defend and hold harmless the City, its officials, officers, employees, and agents against any claim or liability, including attorneys’ fees and costs, arising in any manner related to this Agreement that an employee, agent or others under Consultant’s supervision or control was misclassified.

4. Consultant Not an Agent. Except as City may specify in writing, and when Consultant conducts trades of portfolio securities on behalf of the City, Consultant shall have no authority, express or implied, to act on behalf of City in any capacity whatsoever as an agent. Consultant shall have no authority, express or implied, pursuant to this Agreement to bind City to any obligation whatsoever.

9.9 City of Santa Cruz Professional Services Agreement for Investment Management Services October 2023 (Form Rev.01/23) Page 6
be notified and will be expected to immediately cancel the subcontract. Consultant shall require and verify that all subcontractors maintain insurance meeting all of the requirements stated herein, including naming the City of Santa Cruz, its officers, officials, employees, agents, and volunteers as additional insureds. Any modification to the insurance requirements for subcontractors must be agreed to by the City in writing.

6. Assignment. This Agreement shall not be assigned without first obtaining the express written consent of the Director or after approval of the City Council, except if the rights and obligations of the Consultant are assigned to the Consultant’s parent company, U.S. Bancorp Asset Management, Inc., or any other U.S. Bancorp affiliated registered investment adviser, provided, however, that the City be provided seven (7) days’ prior written notice of such assignment. Neither party may assign this Agreement unless this Agreement is amended in accordance with its terms.

7. Conflicts of Interest. Consultant agrees to comply with conflict of interest laws in performing the work and services under this Agreement. Consultant covenants (on behalf of Consultant and Consultant’s employees, agents, representatives, and subcontractors) that there is no direct or indirect interest, financial or otherwise, which would conflict in any manner or degree with the performance of services required under this Agreement. Consultant acknowledges and agrees to comply with applicable provisions of conflict of interest law and regulations, including the CA Political Reform Act, Sections 1090 and 87100 of the Government Code, and the City’s conflict of interest code. Consultant will immediately advise City if Consultant learns of a conflicting financial interest of Consultant during the term of this Agreement.

Consultant acknowledges and agrees that the work product shall be considered a work made for hire within the meaning of the patent and copyright laws of the United States; and Consultant agrees that all copyrights which arise from creation of project-related documents and materials pursuant to this Agreement shall be vested in the City and Consultant waives and relinquishes all claims to copyright or other intellectual property rights in favor of City. Any work product related to this Agreement shall be confidential, not to be used by the Consultant on other projects or disclosed to any third party, except by agreement in writing by the City, or except as otherwise provided herein.

Consultant’s final deliverables shall comply with Section 508 (29 U.S.C. Section 794d) accessibility requirements, as applicable.

9. Intellectual Property and Indemnity. Consultant represents to City that, to the best of Consultant’s knowledge, any Intellectual Property (including but not limited to: patent, patent application, trade secret, copyright and any applications or right to apply for registration, computersoftware programs or applications, tangible or intangible proprietary information, or any other intellectual property right) in connection with any services and/or products related to this Agreement does not violate or infringe upon any Intellectual Property rights of any other person or entity.

9.10 City of Santa Cruz Professional Services Agreement for Investment Management Services October 2023 (Form Rev.01/23) Page 7
performance under this Agreement or to the City’s authorized intended or actual use of Consultant’s product or service under this Agreement. This provision shall survive termination or expiration of this Agreement.

If any product or service becomes, or in the Consultant’s opinion is likely to become, the subject of a claim of infringement, the Consultant shall, at its sole expense: (i) provide the City the right to continue using the product or service; or (ii) replace or modify the product or service so that it becomes non-infringing; or (iii) if none of the foregoing alternatives are possible even after Consultant’s commercially reasonable efforts, in addition to other available legal remedies, City will have the right to return the product or service and receive a full or partial refund of an amount equal to the value of the returned product or service, less the unpaid portion of the purchase price and any other amounts, which may be due to the Consultant. City shall have the right to retrieve its data and proprietary information at no charge prior to any return of the product or termination of service.

10. Confidentiality.
a. Consultant shall not acquire any ownership interest in data and information (“City Data”) received by Consultant from City, which shall remain the property of the City. Certain information may be considered confidential (“Confidential Information”). Confidential Information shall mean all information or proprietary materials (in every form and media) not generally known to the public and which has been or is hereafter disclosed or made available directly or indirectly to Consultant through any means of communication, either verbally or in writing even if it has not been designated in writing as “Confidential” to Consultant in connection with this Agreement. Unless otherwise required by law or regulatory or judicial process, Consultant shall not, without City’s written permission, use or disclose City Data and/or Confidential Information other than in the performance of the obligations under this Agreement. As between Consultant and City, all City Confidential Information shall remain the property of the City. Consultant shall not acquire ownership interest in the City’s Confidential Information.
b. Consultant shall be responsible for ensuring and maintaining the security and confidentiality of City Data and Confidential Information, protect against any anticipated threats or hazards to the security or integrity of City Data and Confidential Information, protect against unauthorized access to or use of City Data and Confidential Information that could result in substantial harm or inconvenience to City or any end users; and ensure the proper return and/or disposal of City Data and Confidential Information upon termination of this Agreement with notice to the City. c. Consultant shall take appropriate action to address any incident of unauthorized access to City Data and Confidential Information, including addressing and/or remedying the issue that resulted in such unauthorized access, notifying City as soon as possible of any incident of unauthorized access to City Data and Confidential Information, or any other breach in Consultant’s security that materially affects City or end users; and be responsible for ensuring compliance by its officers, employees, agents, and subcontractors with the confidentiality provisions hereof. Should confidential and/or legally protected City Data be divulged to unauthorized third parties, Consultant shall comply with all applicable federal and state laws and regulations, including but not limited to California Civil Code sections 1798.29 and 1798.82 at Consultant’s sole expense. Consultant shall not charge City for any expenses associated with Consultant’s compliance with these obligations.

9.11 City of Santa Cruz Professional Services Agreement for Investment Management Services October 2023 (Form Rev.01/23) Page 8
d. Consultant shall defend, indemnify and hold harmless City, its officials, officers, employees and agents against any claim, liability, loss, injury or damage (including attorneys’ fee and costs) arising out of, or in connection with, the unauthorized use, access, and/or disclosure of City Data and/or Confidential Information by Consultant and/or its agents, employees or subcontractors, excepting only loss, injury or damage caused by the sole negligence or willful misconduct of the City. This provision shall survive the termination or expiration of this Agreement.

11. Consultant's Records. Consultant shall maintain accurate accounting records and other written documentation pertaining to the costs incurred relating to this Agreement for examination and audit by the City, State, or federal government, as applicable, during the period of this Agreement, and for a period of at least five (5) years from the date of the final City payment for Consultant's services, or date of the termination of this Agreement, whichever is later. If Consultant engages a subcontractor to perform work related to this Agreement with a cost of $10,000 or more over a 12-month period, such subcontract shall contain these same requirements. This provision shall survive the termination of this Agreement.

12. California Public Records Act. City is a public agency subject to the disclosure requirements of the California Public Records Act (“CPRA”). If Consultant’s proprietary information is contained in documents or information submitted to City, and Consultant claims that such information falls within one or more CPRA exemptions, Consultant must clearly mark such information “Confidential and Proprietary,” and identify the specific lines containing the information. In the event of a request for such information, City will make best efforts to provide notice to Consultant prior to such disclosure. If Consultant contends that any documents are exempt from the CPRA and wishes to prevent disclosure, it is required to obtain a protective order, injunctive relief, or other appropriate remedy from a court of law in Santa Cruz County before the City is required to respond to the CPRA request. If Consultant fails to obtain such remedy within the time the City is required to respond to the CPRA request, City may disclose the requested information without any liability. Consultant further agrees that it shall defend, indemnify and hold City harmless against any claim, action or litigation (including but not limited to all judgments, costs, and attorney’s fees) that may result from denial by City of a CPRA request for information arising from any representation, or any action (or inaction), by the Consultant.

13. Compliance with Laws. All activities of Consultant, its employees, subcontractors and/or agents will be carried out in compliance with all applicable federal, state, and local laws and regulations. Consultant further agrees to comply with the covenant of good faith and fair dealing and other provisions of Santa Cruz Municipal Ordinance chapter 3.09, or otherwise Consultant may be subject to penalties including being declared an irresponsible contractor.

14. Licensure. Consultant agrees that Consultant, its subcontractors and/or agents (if any) has/have complied with all applicable federal, state, and local licensing requirements and agrees to provide proof of a current City of Santa Cruz Business Tax Certificate if:
• Consultant, its subcontractor(s) and agent(s) or its business is/are located in the City of Santa Cruz; • Will perform actual work in the City of Santa Cruz for 6 or more days annually; or • Will use company vehicles to deliver within the City of Santa Cruz for 6 or more days annually.

For additional information and licensing requirements, view the City’s Business Licenses and Permits webpage or call the Revenue and Taxation division at 831/420-5070.

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15. Living Wage. Every contract for services to the City for $10,000 or more, is subject to City of Santa Cruz Living Wage Ordinance number 2000-25. If applicable, Consultant agrees to comply with the requirements of the Living Wage ordinance as provided in Santa Cruz Municipal Code Chapter 5.10.

16. Prevailing Wages for Public Work. To the extent that the work or services to be performed under this Agreement may be considered a “public work” (construction, alteration, demolition, or repair work) pursuant and subject to Labor Code section 1720 et seq., Consultant (and any subconsultant performing the work or services) shall conform to any and all prevailing wage requirements applicable to such work/and or services under this Agreement. Consultant (and any subconsultant) shall adhere to the prevailing wage determinations made by the Director of Industrial Relations (DIR) pursuant to California Labor Code Part 7, Chapter 1, Article 2, applicable to the work, if any. All workers employed in the execution of a public works contract (as such term is defined California Labor Code section 1720 et seq. and section 1782(d)(1)) must be paid not less than the specified prevailing wage rates for the type of work performed. (CA Labor Code sections 1720, 1774 and 1782.) To the extent applicable to the scope of work and services under this Agreement, Consultant agrees to be bound by the state prevailing wage requirements, including, but not limited to, the following:
a. If a worker is paid less than the applicable prevailing wage rate owed for a calendar day (or any portion thereof), Consultant shall pay the worker the difference between the prevailing wage rate and the amount actually paid for each calendar day (or portion thereof) for which the worker(s) was paid less than the prevailing wage rate, as specified in Labor Code section 1775; b. Consultant shall maintain and make available payroll and worker records in accordance with Labor Code sections 1776 and 1812;
c. If Consultant employs (and/or is legally required to employ) apprentices in performing the work and/or services under this Agreement, Consultant shall ensure compliance with Labor Code section 1777.5; d. Consultant is aware of the limitations imposed on overtime work by Labor Code sections 1810 et seq. and shall be responsible for any penalties levied in accordance with Labor Code section 1813 for failing to pay required overtime wages;
e. Consultant shall post a copy of the applicable wage rates at each jobsite at a location readily available to its workers.
f. Any failure of Consultant and/or its subconsultant to comply with the above requirements relating to a public work project shall constitute a breach of this Agreement that excuses the City’s performance of this Agreement at the City’s sole and absolute option and shall be at the sole risk of Consultant. Consultant on behalf of itself and any subconsultant, agree to indemnify, defend and hold harmless the City and its officials, officers, employees, and agents from and against any and all claims, liabilities, losses, costs, expenses, attorney’s fees, damages, expenses, fines, financial consequences, interest, and penalties, of any kind or nature, arising from or relating to any failure (or alleged failure) of the Consultant and any subconsultant to pay prevailing wages or to otherwise comply with the requirements of prevailing wage law relating to a public work.
g. Consultant acknowledges that it and/or any subconsultant may not engage in the performance of any contract for public work unless currently registered with the DIR and qualified to perform public work

9.13 City of Santa Cruz Professional Services Agreement for Investment Management Services October 2023 (Form Rev.01/23) Page 10
pursuant to Labor Code section 1725.5 [with limited exceptions from this requirement for bid purposes only under Labor Code section 1771.1(a)].

17. Storm Water Requirements. To the extent applicable to the Scope of Work under this Agreement, Consultant, Consultant’s employees, subcontractors, and agents are required to abide by the applicable City of Santa Cruz Storm Water Best Management Practices (BMPs) for the duration of the work. The City’s mandatory Storm Water BMPs, which are listed according to the type of work, operations, or business, are located on the City website at: https://www.cityofsantacruz.com/government/city-departments/public-works/stormwater/bestmanagement-practices

Promptly upon such notification, the Parties shall meet at a mutually agreeable time and place in order to exchange relevant information and perspective, and to attempt to resolve the dispute. In the event that no resolution is achieved, and if, but only if, the parties mutually agree, then prior to pursuing formal legal action, the parties shall make a good faith effort to resolve the dispute by non-binding mediation or negotiations between representatives with decision-making power, who, to the extent possible, shall not have had substantive involvement in the matters of the dispute. To the extent that the dispute involves or relates to a public works project, the Parties agree to attempt to resolve the dispute by complying with the claims process as set forth in Public Contract Code sections 9204(e), 20104-20104.6, but without waiving the requirements of the California Tort Claims Act, Gov’t Code section 800 et seq. unless otherwise agreed to by the Parties.

19. Force Majeure. Neither party hereto shall be considered in default in the performance of its obligation hereunder to the extent that the performance of any such obligation is prevented or delayed by an act of God, natural disaster, pandemic, acts of terrorism, war, a strike, lockout or other labor difficulty, or other peril, which is beyond the reasonable control of the affected party and without the negligence of the respective Parties. Each party hereto shall give notice promptly to the other of the nature and extent of any Force Majeure claimed to delay, hinder or prevent performance of the services under this Agreement. Each Party will, however, make all reasonable efforts to remove or eliminate such a cause of delay or default and will, upon the cessation of the cause, diligently pursue performance of its obligations in this Agreement. In the event either party is prevented or delayed in the performance of its respective obligation by reason of such Force Majeure, the only remedy is that there may be an equitable adjustment of the schedule based on City’s sole discretion.

20. Complete Agreement. This Agreement, along with any attachments, is the full and complete integration of the Parties’ agreement with respect to the matters addressed herein, and that this Agreement supersedes any previous written or oral agreements between the Parties with respect to the matters addressed herein. Unless otherwise stated, to the extent there is any conflict between this Agreement and any other agreement (written or oral), the terms of this Agreement shall control.

21. Severability. The unenforceability, invalidity or illegality of any provision(s) of this Agreement shall not render the other provisions unenforceable, invalid or illegal.

22. Waiver. Waiver by any party of any portion of this Agreement shall not constitute a waiver of the same or any other portion hereof.

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23. Governing Law. This Agreement shall be governed by and interpreted in accordance with California law.

24. Contract Interpretation. Each party acknowledges that it has reviewed this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.

25. MacBride Principles/Peace Charter. City of Santa Cruz Resolution NS-19,378 (7/24/90) encourages all companies doing business in Northern Ireland to abide by the MacBride Principles and Peace Charter.

26. Notices. If either party shall desire or is required to give notice to the other such notice shall be given in writing, via email, and concurrently delivered by: (a) personal delivery, in which case notice is effective upon delivery; (b) overnight courier (i.e., Federal Express) with charges prepaid or charged to the sender’s account, in which case notice is effective when delivered; (c) priority U.S. Mail, in which case notice shall be deemed delivered on the second business day after the deposit thereof with the U.S. Postal Service. Notices shall be addressed to recipient as follows:

To CITY:

Finance Department
Marisol Gómez
1200 Pacific Avenue, Suite 290
Santa Cruz, CA 95060
[email protected]
831-420-5232
To CONSULTANT:

PFM Asset Management LLC
Monique Spyke, Managing Director
1 California Street, St. 1000
San Francisco, CA 94111
[email protected]
415-393-7259
Changes to the above information shall be given to the other party in writing ten (10) business days before the change is effective.

27. Counterparts. The Parties may execute this Agreement in two or more counterparts, which shall, in the aggregate, be deemed an original but all of which, together, shall constitute one and the same instrument. A scanned, electronic, facsimile or other copy of a party’s signature shall be accepted and valid as an original.

28. Warranty of Authority. The signatories to this Agreement warrant and represent that each is authorized to execute this Agreement and that their respective signatures serve to legally obligate their respective representatives, agents, successors and assigns to comply with the provisions of this Agreement. [SIGNATURES ON FOLLOWING PAGE]

9.15 City of Santa Cruz Professional Services Agreement for Investment Management Services October 2023 (Form Rev.01/23) Page 12
Approved As To Form:

By: _____________________________ Date: __________________ Stephanie Hall, Office of the City Attorney

CITY OF SANTA CRUZ
By: _____________________________ Date: __________________ Matt Huffaker, City Manager

CONSULTANT
By: _____________________________ Date: __________________ Printed: ___________________________ Title: __________________

CONSULTANT
By: _____________________________ Date: __________________ Printed: ___________________________ Title: __________________ 10/06/23
Monique Spyke Managing Director
10/10/23

9.16 CERTIFICATE OF AUTHORITY
May 18, 2023
As Secretary of PFM Asset Management LLC, I affirm that Monique S. Spyke is a Managing Director of this company, and as such, is authorized to make, enter into, sign, seal and deliver on behalf of this company any contractual document in connection with the operations of the company.

PFM Asset Management LLC
Richard J. Ertel
Secretary
213 Market Street
Harrisburg, PA 17101
PFM Asset Management LLC
717.231.6200 | pfmam.com
NOT FDIC INSURED : NO BANK GUARANTEE : MAY LOSE VALUE
For Institutional Investor or Investment Professional Use Only – This material is not for inspection by, distribution to, or quotation to the general public DocuSign Envelope ID: C2A503A4-4218-4225-89CB-B255E7F6F44D

9.17 City of Santa Cruz Professional Services Agreement for Investment Management Services October 2023 (Form Rev.01/23) Page 13
EXHIBIT A: SCOPE OF WORK
Creativity and flexibility in approaching the City’s current and future investment options in the most fiscally responsible and prudent manner is required.

Specific services to be performed include but are not limited to the following:

Investment of Funds
The Consultant must effectively invest the City’s funds, provide discretionary full-time portfolio management, and effectively invest the portfolio pursuant to the approved investment policy, the City’s cash flow needs and the City’s direction.
1) Investment practices and procedures must comply with state law and the City’s Statement of Investment Policy.
2) Manage the City’s portfolio with discretionary authority. 3) Assist the City with cash flows/maturity analysis.
4) Provide credit analysis of investment instruments in portfolio.

Written and Oral Reports
The Consultant must provide a written report on a monthly and quarterly basis demonstrating the portfolio performance including information about the portfolio as described in the investment policy. The firm must also be available to make periodic written and oral reports to the City Council. 5) Provide monthly/quarterly/annual reporting of City funds you manage. 6) Attend quarterly meetings (in person or via teleconference) with City staff. 7) Attend City Council meetings in person or via teleconference when necessary. 8) Answer questions from staff and provide general guidance in related areas.

Evaluation of Investment Policy
The Consultant must annually assist in the review of the City’s investment policy. The proposed changes to the investment policy will be presented in final draft form to the Finance Director and City Manager prior to submission to the City Council.
9) Review the City’s Statement of Investment Policy and make recommendations for change. a) Incorporate directives from the City’s Climate Action Plan and Health in All Policies policy. b) Incorporate related GFOA Best Practices.

Expectations
Investment practices and procedures must comply with Federal and California state law and the City’s written investment policy. This includes Sections 53600-53683 of the California Government Code. Investments shall be made consistent with Government Code Sections 16429.1 and/or 53601. The Consultant will be expected to perform to the Prudent Investor Standard.
10) Evaluate market risk and develop strategies that minimize the impact on the portfolio. 11) Provide assurance of portfolio compliance with applicable policies and laws.

9.18 City of Santa Cruz Professional Services Agreement for Investment Management Services October 2023 (Form Rev.01/23) Page 14
12) Establish an appropriate performance benchmark.
13) Ensure that portfolio structure matches the City’s objectives. 14) Perform broker/dealer due diligence and maintain relations with approved security brokers and dealers. 15) Coordinate with the City’s third‐party custodian for safekeeping of securities.

9.19 City of Santa Cruz Professional Services Agreement for Investment Management Services October 2023 (Form Rev.01/23) Page 15
EXHIBIT B: FEE SCHEDULE

1. For services provided by the Consultant pursuant to this Agreement, the City shall pay the Consultant an annual fee, in monthly installments, based on the daily net assets under management according to the schedule below:

Assets Under Management Annual Investment Management Fee (basis points for assets)
First $25,000,000 8 basis points (0.08%)
Next $25,000,000 7.5 basis points (0.075%)
Next $50,000,000 6.5 basis points (0.065%)
Next $100,000,000 6 basis points (0.06%)
Thereafter 5 basis points (0.05%)
“Daily net assets” is defined to include the amortized value of securities, accrued interest and the market value of cash or any money market fund balance.

The minimum annual fee is $40,000, to be applied in equal monthly installments.

2. The Consultant will bill the City monthly for service performed under this Agreement, with said bill to include a statement indicating the basis upon which the fee was calculated. The City shall pay to the Consultant the amount payable pursuant to this Agreement within thirty (30) days based on invoices from the Consultant which detail the monthly fees incurred by the Consultant.

3. Assets invested by the Consultant under the terms of this Agreement may from time to time be invested in a money market mutual fund or a local government investment pool managed by the Consultant or an affiliate of the Consultant (either, a “Pool”). Average daily net assets subject to the fees described in this section shall not take into account any funds invested in the Pool. Expenses of the Pool, including compensation for the Consultant and the Pool custodian, are described in the relevant prospectus or information statement and are paid from the Pool. Further, average daily net assets subject to the fees described in this section shall not take into account any funds invested in the Local Agency Investment Fund (“LAIF”).

4. The fee schedule described above shall be effective for the term of this Agreement, which shall terminate on October 24, 2028. Thereafter, at the option of the City, the Agreement may be renewed annually under the same contractual terms and conditions by letter agreement for an additional option of five (5) one (1- year) renewal periods, subject to a fee increase commensurate with the Consumer Price Index (CPI) reading for the San Francisco-Oakland-San Jose Region, not seasonally adjusted, calculated annually and then averaged over the term. Such increase shall be the lesser of actual calculated or 3.5%. In no event, shall the fee increase be negative.

5. If and to the extent that the City shall request the Consultant to render services other than those to be rendered by the Consultant hereunder, such additional services shall be compensated separately on terms to be agreed upon between the Consultant and the City. For example, should the City choose to employ a

9.20 City of Santa Cruz Professional Services Agreement for Investment Management Services October 2023 (Form Rev.01/23) Page 16
comprehensive Environmental, Social, and Governance (“ESG”) investing solution in the future, the City shall pay to PFMAM an additional annual fee of 1.5 basis points (0.015%), in monthly installments, based on the daily net assets under management in an ESG Account.

9.21 City of Santa Cruz Professional Services Agreement for Investment Management Services October 2023 (Form Rev.01/23) Page 17
EXHIBIT C: WORK SCHEDULE
The Consultant will provide the following reporting tools.

Report Frequency/
Delivery Content/Features
Daily Holdings Daily Holdings report showing securities, par, cost, duration, purchase yields, and discounts as of the prior business day.

Month-to-Date
Transactions Daily Description of any security transactions month-to-date asof the prior business day.

9.22 City of Santa Cruz Professional Services Agreement for Investment Management Services October 2023 (Form Rev.01/23) Page 18
Portfolio Holdings
and Activity Report
Monthly This report includes a detailed description of all securities in the portfolio; a summary of realized and unrealized
earnings for the month; and a report of all purchases,
sales, maturities, interest deposits, and withdrawals for each separate account. It also contains information
required by GASB 31 and provides month-end credit
quality ratings to comply with the Credit Risk Disclosure requirement and duration by investment type to facilitate compliance with the Interest Rate Disclosure requirement of GASB 40.

Market Update Monthly Summary of recent market events and the outlook for investment opportunities moving forward.

Performance
Reports
Quarterly
Quarterly reports typically include: (1) an aggregate
portfolio sector, maturity, and credit-quality distribution; (2) an aggregate view of performance portfolios by
investment strategy; (3) a portfolio strategy recap and market outlook, including recommended changes to
strategy; (4) individual portfolio sector, maturity, and credit quality distribution; (5) performance statistics compared to a market benchmark; and (6) a high level
economic and investment-sector performance synopsis.

We customize the quarterly report to meet the City’s
specific requirements.

Special Reports Varies
As requested, we will prepare special reports to meet the City’s specific requirements.

Key:  Online access,  mailed, email,  PowerPoint presentation

9.23 City of Santa Cruz Professional Services Agreement for Investment Management Services October 2023 (Form Rev.01/23) Page 19
EXHIBIT D: INSURANCE REQUIREMENTS
A. CERTIFICATE REQUIREMENTS
The City will be issued a Certificate of Insurance (a Memorandum of Understanding will not be accepted) with the following minimum requirements:
• Certificate(s) will show current policy number(s) and effective dates, • Coverage and policy limits will meet, or exceed, requirements below, • The Certificate Holder will be City of Santa Cruz, Risk Management, 1200 Pacific Avenue, Suite 290, Santa Cruz, CA 95060,
• Certificate will be signed by an authorized representative, • An endorsement, if required below, will be provided to show the City, its officers, officials, employees, and volunteers as additional insured on the required General Liability and Automobile Liability policies, and • Coverages must be maintained during the term of the Agreement with the City, unless a longer duration is required as specified below.

B. MINIMUM SCOPE AND LIMITS OF INSURANCE
Consultant acknowledges that the insurance coverage and policy limits set forth in this section constitute the minimum amount of coverage required of Consultant and its contractor(s). If Consultant and its contractor(s) maintains broader insurance coverage and/or higher limits than the minimums shown below, the City of Santa Cruz requires and shall be entitled to the broader insurance coverage and/or higher limits maintained by Consultant and its contractor(s). Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City of Santa Cruz.

Coverage will be at least as broad as:
• COMMERCIAL GENERAL LIABILITY (CGL): $1,000,000 PER OCCURRENCE; $2,000,000 AGGREGATE Proof of coverage for $1 Million per occurrence including products and completed operations, property damage, bodily injury, personal and advertising injury will be provided on Insurance Services Office (ISO) Form CG 00 01 or equivalent covering CGL. If a general aggregate limit applies, either the general aggregate limit will apply separately to this project/location (ISO CG 25 03 or 25 04) or the general aggregate limit will be at least twice the required occurrence limit. • WORKERS’ COMPENSATION AS REQUIRED BY THE STATE OF CALIFORNIA, WITH STATUTORY LIMITS, AND EMPLOYER’S LIABILITY INSURANCE: $1,000,000 per accident for bodily injury or disease.

The Worker’s Compensation policy must be endorsed with a waiver of subrogation in favor of the City for all work performed by the Consultant and Consultant’s contractor(s) and their respective employees. (Not required if Consultant and/or its contractor(s) provide(s) written verification it has no employees) - If Consultant or its Contractor(s) has/have no employees, such party shall complete and sign a Workers’ Compensation Exemption Declaration and Release of Liability. • PROFESSIONAL LIABILITY:

If the Work includes professional services, including without limitation design or engineering, such professional shall maintain professional errors and omissions coverage with liability limits of no less than

9.24 City of Santa Cruz Professional Services Agreement for Investment Management Services October 2023 (Form Rev.01/23) Page 20
$2,000,000 each occurrence or claim, and $2,000,000 general aggregate. Consultant shall provide the City with a certificate of insurance evidencing the professional’s errors and omissions coverage in accordance with these requirements.

C. OTHER INSURANCE PROVISIONS
The insurance policies are to comply with the following provisions:
• ADDITIONAL INSURED STATUS
The City, its officers, officials, employees, and volunteers are to be covered as additional insureds on the CGL policy with respect to liability arising out of work or operations performed by or on behalf of Consultant including materials, parts, or equipment furnished in connection with such work or operations.

General liability coverage will be provided in the form of an endorsement to Consultant insurance at least as broad as ISO Form CG 20 10 11 85, or if not available, through the addition of both CG 20 10 CG 20 26, CG 20 33, or CG 20 38; and CG 20 37 (if a later edition is used). • PRIMARY COVERAGE
For any claims related to this Agreement, Consultant’s and/or its subcontractor’s General Liability and Automobile Liability insurance coverage will be primary insurance as respects the City, its officers, officials, employees, agents, and volunteers. Any CGL insurance or self-insurance maintained by the City, its officers, officials, employees, agents, or volunteers will be excess of Consultant’s or its Contractor(s)’ insurance and will not contribute with it.
• NOTICE OF CANCELLATION
Each insurance policy required above shall state that the coverage shall not be canceled, except with notice to the City. If any such required insurance does not have such notice of cancellation language, then the obligation to notify will reside with the Consultant.
• WAIVER OF SUBROGATION
Consultant and its subcontractor(s) shall agree to grant to the City a waiver of any right to subrogation, except as to its Professional Liability coverage or otherwise not applicable, which any General Liability or Automobile Liability insurer of said Consultant and its subcontractor(s) may acquire against the City by virtue of the payment of any loss, including attorney’s fees under such insurance. Consultant and its subcontractor(s) shall agree to obtain any endorsement that may be necessary to effectuate this waiver of subrogation, but this provision applies regardless of whether or not the City has received a waiver of subrogation endorsement from the insurer.
• EXCESS LIABILITY/UMBRELLA INSURANCE POLICIES
Consultant may use excess liability/umbrella policies to meet the required liability limits on the condition that they provide all of the insurance coverages required herein , including, but not limited to, primary and non-contributory, additional insured, Self-Insured Retentions (SIRs), indemnity, and defense requirements. The excess liability/umbrella insurance policies shall be provided on a true “following form” or broader coverage basis, with coverage at least as broad as provided on the underlying CGL insurance. No insurance policies maintained by the Additional Insureds, whether primary or excess, and which also apply to a loss covered hereunder, shall be called upon to contribute to a loss until the Consultant’s primary and excess liability policies are exhausted.
• DURATION OF COVERAGE

9.25 City of Santa Cruz Professional Services Agreement for Investment Management Services October 2023 (Form Rev.01/23) Page 21
CGL & Excess Liability/Umbrella policies for any construction related work, including, but not limited to, maintenance, service, or repair work, shall continue coverage for a minimum of 5 years for Completed Operations liability coverage. Such insurance must be maintained and evidence of insurance must be provided for at least three (3) years after completion of the contract of work. • SELF-INSURED RETENTIONS (SIR)
Any deductibles or self-insured retentions are the sole responsibility of the Consultant. • ACCEPTABILITY OF INSURERS
Insurance is to be placed with insurers with a current A.M. Best’s rating of no less than A-: VII, unless otherwise acceptable to the City.
• CLAIMS MADE POLICIES
If any of the required policies provide coverage on a claims-made basis:

1. The Retroactive Date must be before the date of the contract or the beginning of contract work.

2. Insurance must be maintained, and evidence of insurance must be provided for at least three (3) years after completion of the contract of work.

3. If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a Retroactive Date prior to the contract effective date, the Participant must purchase “extended reporting” coverage for a minimum of three (3) years after completion of contract work. • VERIFICATION OF COVERAGE
Consultant and its subcontractor(s) will furnish the City with original Certificates of Insurance including all required amendatory endorsements (effecting coverage required by this clause) of the CGL, CPL, automobile, and Excess Liability/Umbrella Policies to be approved by the City before work commences. However, failure to obtain the required documents prior to the work beginning will not waive the Consultant’s and its subcontractor’s obligation to provide them.

D. CONTRACTORS AND SUBCONTRACTORS
Consultant shall include their subcontractor(s) as additional insured(s) under the policies or shall furnish separate certificates and endorsements for each contractor and subcontractor. Consultant shall require and verify that all contractors and subcontractors maintain insurance meeting all the requirements stated herein, and Consultant shall ensure that the City, its officers, officials, employees, agents, and volunteers, are named as additional insureds on insurance required from contractors and subcontractors.

E. SPECIAL RISKS/CIRCUMSTANCES
City reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances and provide notice to Consultant.

9.26 City of Santa Cruz Professional Services Agreement for Investment Management Services October 2023 (Form Rev.01/23) Page 22
EXHIBIT E: INVESTMENT ADVISOR PROVISIONS
(a) Services of Consultant. The City hereby engages the Consultant to serve as investment advisor under the terms of this Agreement with respect to the funds described in this Agreement and such other funds as the City may from time to time assign by written notice to the Consultant (collectively the "Managed Funds"), and the Consultant accepts such appointment. In connection therewith, the Consultant will provide investment research and supervision of the Managed Funds investments and conduct a continuous program of investment, evaluation and, when appropriate, sale and reinvestment of the Managed Funds assets. The Consultant shall continuously monitor investment opportunities and evaluate investments of the Managed Funds. The Consultant shall furnish the City with statistical information and reports with respect to investments of the Managed Funds. The Consultant shall place all orders for the purchase, sale, loan or exchange of portfolio securities for the City's account with brokers or dealers recommended by the Consultant and/or the City, and to that end the Consultant is authorized as agent of the City to give instructions to the custodian designated by the City (the “Custodian”) as to deliveries of securities and payments of cash for the account of the City. In connection with the selection of such brokers and dealers and the placing of such orders, the Consultant is directed to seek for the City the most favorable execution and price, the determination of which may take into account, subject to any applicable laws, rules and regulations, whether statistical, research and other information or services have been or will be furnished to the Consultant by such brokers and dealers. The Custodian shall have custody of cash, assets and securities of the City. The Consultant shall not take possession of or act as custodian for the cash, securities or other assets of the City and shall have no responsibility in connection therewith. Authorized investments shall include only those investments which are currently authorized by the state investment statutes and the applicable covenants and as supplemented by such other written instructions as may from time to time be provided by the City to the Consultant. The Consultant shall be entitled to rely upon the City's written advice with respect to anticipated drawdowns of Managed Funds. The Consultant will observe the instructions of the City with respect to broker/dealers who are approved to execute transactions involving the Managed Funds and in the absence of such instructions will engage broker/dealers which the Consultant reasonably believes to be reputable, qualified and financially sound.

(b) Expenses. The Consultant shall furnish at its own expense all necessary administrative services, office space, equipment, clerical personnel, telephone and other communication facilities, investment advisory facilities, and executive and supervisory personnel for managing the Managed Funds. Except as expressly provided otherwise herein, the City shall pay all of its own expenses including, without limitation, taxes, commissions, fees and expenses of the City's independent auditors and legal counsel, if any, brokerage and other expenses connected with the execution of portfolio security transactions, insurance premiums, and fees and expenses of the Custodian.

(c) Registered Consultant; Duty of Care. The Consultant hereby represents it is a registered investment advisor under the Investment Advisers Act of 1940. The Consultant shall immediately notify the City if at any time during the term of this Agreement it is not so registered or if its registration is suspended. The Consultant agrees to perform its duties and responsibilities under this Agreement with reasonable care. The federal securities laws impose liabilities under certain circumstances on persons who act in good faith. Nothing herein shall in any way constitute a waiver or limitation of any rights which the City may have under any federal securities laws. The City hereby authorizes the Consultant to sign I.R.S. Form W-9 on behalf of the City and to deliver such form to broker-dealers or others from time to time as required in connection with securities transactions pursuant to this Agreement.

(d) Consultant’s Other Clients. The City understands that the Consultant performs investment advisory services for various other clients which may include investment companies, commingled trust funds and/or individual portfolios. The City agrees that the Consultant, in the exercise of its professional judgment, may give advice or take action with respect to any of its other clients which may differ from advice given or the timing or nature of

9.27 City of Santa Cruz Professional Services Agreement for Investment Management Services October 2023 (Form Rev.01/23) Page 23
action taken with respect to the Managed Funds. The Consultant shall not have any obligation to purchase, sell or exchange any security for the Managed Funds solely by reason of the fact that the Consultant, its principals, affiliates, or employees may purchase, sell or exchange such security for the account of any other client or for itself or its own accounts.
(e) Disciplinary Actions. The Consultant shall promptly give notice to the City if the Consultant shall have been found to have violated any state or federal securities law or regulation in any final and unappealable judgment in any criminal action or civil suit in any state or federal court or in any disciplinary proceeding before the Securities and Exchange Commission (“SEC”) or any other agency or department of the United States, any registered securities exchange, FINRA, or any regulatory authority of any State based upon the performance of services as an investment advisor.

(f) Books. The Consultant shall maintain records of all transactions in the Managed Funds. The Consultant shall provide the City with a monthly and a quarterly statement showing deposits, withdrawals, purchases and sales (or maturities) of investments, earnings received, and the value of assets held on the last business day of the month.

The statement shall be in the format and manner that is mutually agreed upon by the Consultant and the City.

(g) Brochure and Brochure Supplement. The Consultant warrants that it has delivered to the City prior to the execution of this Agreement the Consultant's current SEC Form ADV, Part 2A (brochure) and Part 2B (brochure supplement). The City acknowledges receipt of such brochure and brochure supplement prior to the execution of this Agreement.

9.28 PFM Asset Management LLC
NOT FDIC INSURED : NO BANK GUARANTEE : MAY LOSE VALUE
pfmam.com
City of Santa Cruz
Presentation of Investment Management Services
415.393.7270
August 25, 2023
Monique Spyke, Managing Director
Lesley Murphy, Director
Gray Lepley, Portfolio Strategist
Allison Kaune, Senior Analyst
Ellen Clark, Director
For Institutional Investor or Investment Professional
Use Only – This material is not for inspection by,
distribution to, or quotation to the general public 9.29 Your Team
Managing Director
Engagement Oversight
Monique Spyke
Portfolio Strategist
Portfolio Strategy
Implementation
Managing Director
Chief Compliance Officer
Gray Lepley
Leo Karwejna
Key Account Manager
Client Service
Jeremy King
Director
PFMAM Business Solutions
Lesley Murphy
Managing Director
Portfolio Management
Robert Cheddar, CFA
Multi-Asset Class Specialist
Multi-Asset Class
Engagement Manager
Ellen Clark
Senior Analyst
Day-to-day Relationship
Support
Allison Kaune
Average years of experience: 21 years

9.30 2
▸ Specialist in customized, investmentgrade fixed income and Multi-Asset portfolios
▸ Fixed income strategies include:
▹ Liquidity management
▹ Enhanced cash
▹ 1–3, 1–5, and 1–10 year mandates
▸ Outsourced Chief Investment Officer
(OCIO) builds Multi-Asset portfolios
based on client’s risk/return objectives
PFM Asset Management LLC
As of June 30, 2023.
43 years of experience
National Reach:

PFMAM Offices
270+ professionals
$214.9b
Total assets nationwide
$162.4b
Discretionary assets under management
$52.5b
Assets under advisement

9.31 3
Alameda
Albany
Antioch
Benicia
Brentwood
Burlingame
Concord
Fairfield
Fremont
Hayward
Lincoln
Millbrae
Napa
Novato
Paso Robles
Rancho
Cucamonga
Rancho Mirage
Oakley
Redwood City
San Francisco
San Luis Obispo
Santa Clara
Santa Clarita
Santa Fe Springs
Santa Maria
Seal Beach
Suisun City
Turlock Irrigation
Union Sanitary
Vista
Walnut Creek
Wildomar
▸ Trusted advisor in the California finance community since 1989 ▹ Regular educators for CSMFO, CMTA, and CDIAC
▹ Membership on CSMFO Professional Standards Committee
▸ Significant experience with Code and IPS development
▹ Membership on CMTA Investment Policy Certification Committee ▹ AP&T Investment Policy Certification Committee
▸ Local presence – San Francisco and Los Angeles offices ▹ Practice leaders live in Oakland and Pasadena
City and California Expertise
As of June 30, 2023.
*Data includes non-discretionary accounts. Total discretionary CA assets of $38.6b as of 6/30/2023.

Italics indicate Bay Area cities.

Boston | Miami | Philadelphia | Scottsdale | St. Louis

REPRESENTATIVE CLIENTS
$72.5
billion
$24.5 billion managed
in individual portfolios

TOTAL ASSETS
IN CALIFORNIA*
$24
billion
Includes $16.1 billion
assets under advisement

MANAGED FOR

CALIFORNIA CITIES

9.32 4
PFM Asset Management LLC
NOT FDIC INSURED : NO BANK GUARANTEE : MAY LOSE VALUE
pfmam.com
City of Santa Cruz
Investment Program
Update
Presentation to City Council
415.393.7270
August 25, 2023
Monique Spyke, Managing Director
Gray Lepley, Portfolio Strategist
For Institutional Investor or Investment Professional
Use Only – This material is not for inspection by,
distribution to, or quotation to the general public 9.33 Overview of the City’s Current Portfolio
Source: Bloomberg and City’s Portfolio Management Report for the quarter ended March 31, 2023, as included in the RFP documents.

Portfolio data as of 3/31/2023.

Portfolio Statistics
Par Invested $166.3 million
Duration 0.83 years
Gross Yield at Market 3.49%
Gross Yield at Cost 2.74%
Certificates
of Deposit
<1%
U.S.

Treasury
6%
Callable
Agency
34%
Non-Callable
Agency
3%
LAIF
57%
Sector Allocation
Aaa
43%

LAIF (NR)
57%
NR
<1%
Credit Quality (Moody’s)
0%
25%
50%
75%
100%
0-1 yrs 1-2 yrs 2-3 yrs 3-4 yrs 4-5 yrs >5 yrs
Maturity Distribution
To Maturity To Call

9.34 6
Current Market Themes
Source (top): Bloomberg, as of August 21, 2023.

Source (bottom left): Bloomberg BVAL yield curves for Treasury, agency, and A-rated corporate. 3-month corporate yields from commercial paper rated A-1+, as of August 22, 2023. Yields are for indicative purposes only; actual yields may vary by issue.

Source (bottom right): Bloomberg, as of August 22, 2023.

Maturity Treasury Federal
Agency Corporate
3-Month 5.43% 5.52% 5.63%
1-Year 5.37% 5.40% 5.48%
2-Year 4.90% 4.94% 5.16%
3-Year 4.52% 4.61% 5.00%
5-Year 4.20% 4.27% 4.59%
0%
1%
2%
3%
4%
5%
6%
Yield
Maturity
U.S. Treasury Yield Curve
August 21, 2023 June 30, 2023 June 30, 2022

4.25%

4.50%

4.75%

5.00%

5.25%

5.50%

5.75%
Aug-23 Dec-23 Apr-24 Aug-24 Dec-24
Implied Fed Funds Rate
as of August 22, 2023

9.35 7
Data for the City’s current portfolio was sourced the Portfolio Management Report for the quarter ended March 31, 2023, as included in the RFP documents.

Sample portfolios structured by PFMAM. Please see important disclosures at the end of this presentation.

City of Santa Cruz – Policy Limit information was sourced from the City’s Statement of Investment and Portfolio Policy, as included in the RFP documents.

PFMAM’s Observations and Recommendations
1 Determine Optimal Allocation
between Liquidity and Core
Funds
▸ Analyze historical cash flows
▸ Ensure liquidity remains
sufficient, while increasing core
assets for long-term growth
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Current Portfolio
LAIF
Certificates of
Deposit
Federal Agency
U.S. Treasury

9.36 8
57%
4%
17%
13%
8%
1%
20% 20% 22% 21%
11%
6%
0%
20%
40%
60%
80%
Duration Distribution
Current Portfolio Sample Portfolio
Data for the City’s current portfolio was sourced the Portfolio Management Report for the quarter ended March 31, 2023, as included in the RFP documents.

Sample portfolios structured by PFMAM. Please see important disclosures at the end of this presentation.

City of Santa Cruz – Policy Limit information was sourced from the City’s Statement of Investment and Portfolio Policy, as included in the RFP documents.

PFMAM’s Observations and Recommendations
2 Extend Duration of Invested Securities
▸ Historically, longer-duration strategies
outperform shorter strategies,
especially in stable/falling interest
rate environments
▸ Duration will be in line with City’s
risk/return objectives

9.37 9
Data for the City’s current portfolio was sourced the Portfolio Management Report for the quarter ended March 31, 2023, as included in the RFP documents.

Sample portfolios structured by PFMAM. Please see important disclosures at the end of this presentation.

City of Santa Cruz – Policy Limit information was sourced from the City’s Statement of Investment and Portfolio Policy, as included in the RFP documents.

Increase Sector Diversification
PFMAM’s Observations and Recommendations
3 0%
20%
40%
60%
80%
100%
LAIF
US Treasury
Federal Agency
Non-Negotiable CDs
Bankers' Acceptances
Agency MBS
City of SC Municipals
Negotiable CDs
Commercial Paper
Supranational
Corporate
Asset-Backed
Bank Deposit
RepurchaseAgreements
Mutual Funds & MMFs
City of Santa Cruz Investment Portfolio
City's Current Allocation CA Code Limit City of Santa Cruz Policy Limit

9.38 10
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Current Sample - IPS Sample - Full
Liquidity
LAIF
Municipal
Agency MBS
Supranationals
Asset-Backed Securities
Negotiable CDs
Commercial Paper
Corporate Notes
Agency
U.S. Treasury

1. Determine Optimal Allocation
between Liquidity and Core Funds

2. Extend Duration of Invested
Securities

3. Increase Sector Diversification
PFMAM’s Observations and Recommendations
Sample portfolio structured by PFMAM. Please see important disclosures at the end of this presentation.

Current
Portfolio
Policy
Sample
Future
Proposed

9.39 11
Why PFMAM?
12 9.40
Why PFMAM?
As the City remains focused on achieving its vision of creating and sustaining a vibrant, healthy, and resilient community for all, we will stand beside you as your investment partner.

Our ideas will be designed to help the City achieve fiscal sustainability and transparency while prudently investing now for long-term.

Working with
PFMAM, the City
of Santa Cruz will
partner with a
firm that
▸ Understands goals and listens to needs;
▸ Serves as a true extension of staff;
▸ Educates to support strategic decisions;
▸ Delivers fresh ideas designed to grow assets;
▸ Consistently provides superior client service;
▸ Operates within a culture of safety, compliance, and transparency

9.41 13
Disclaimer
Investment advisory services are provided by PFM Asset Management LLC (“PFMAM”), an investment adviser registered with the U.S. Securities and Exchange Commission and a subsidiary of U.S. Bancorp Asset Management, Inc. (“USBAM”). USBAM is a subsidiary of U.S. Bank National Association (“U.S.

Bank”). U.S. Bank is a separate entity and subsidiary of U.S. Bancorp. U.S. Bank is not responsible for and does not guarantee the products, services or performance of PFMAM. The information contained is not an offer to purchase or sell any securities. Additional applicable regulatory information is available upon request.

For more information regarding PFMAM’s services please visit www.pfmam.com.

Disclaimer

9.42 14
City Council

AGENDA REPORT
DATE: 09/25/2023
AGENDA OF: 10/24/2023
DEPARTMENT: Finance
SUBJECT: Year-End Budget Adjustment for FY 2023 (FN)
RECOMMENDATION: Resolution amending the FY 2023 budget where annual revenues and expenditures need adjustments in various funds.

BACKGROUND: In accordance with Council Policy 12.6, new appropriations, transfers of appropriations between departments or funds, and transfers between Capital Investment Projects over $100,000 must be approved by the City Council. At the end of the fiscal year, an analysis is prepared to determine expenditures within funds and departments that have exceeded appropriations or need budget adjustments from other funds or departments. An annual budget adjustment is presented to the City Council to reconcile those differences.

DISCUSSION: In the closing process for the FY 2023 budget, analysis on department level expenditures showed that Human Resources, Fire, City Library, and the City Attorney exceeded their budget appropriations. In addition, there are several year-end budget adjustments needed for departments or to clean up a prior year oversight that missed the City Council meeting deadline for FY 2023.

In the General Fund, the Human Resources department is over budget $19,499 primarily due to personnel professional services. The Fire Department is over budget by $752,639. This is largely due to fuel charges, termination pay, and other payroll expenditures. The City’s portion of the Library MOE is over budget $162,102 due to the budget not being updated from the prior year amount. The City Attorney Department is over budget $545,846 due to increased City staff usage of hours. Economic Development is moving funds from one object to add two new projects to their budget that is net neutral and increasing interfund labor credit in the amount of $(564,449) for project implementation. In non-department transfers out, there is $190,000 in reductions that need to be corrected. In revenue, the General Fund has two transfers-in that need correcting that net to zero.

In other funds:
- Fund 104, Municipal Wharf, is over budget $6,598, however, has sufficient revenue to cover the adjustment.
- Fund 121, Civic Equipment Maintenance/Replacement is over budget $5,879, due to HVAC repairs.
- Fund 136, Economic Development Trust, has a project correction that is net zero.

10.1 - Fund 170, Disaster Recover, had unanticipated expenditures of $54,377, but has $650,000 in revenues to cover the costs, which needs to be adjusted as well. - Fund 281, Successor Agency (H) LMIH-Merged, is adding a transfer out for the Metro Housing project in the amount of $181,119.
- Fund 249, Parks & Recreation Tax Combined Fund, was missing the $80,000 budget for a CIP project.
- Fund 291, Transportation Development Act, is a pass-thru fund that received $311,699 more in pass-thru funding than anticipated when the budget was adopted. - Fund 293, State Homelessness Response Program, was missing the transfer in to the General fund in the amount of $200,000. This transfer was inadvertently budgeted in Fund 311, General Capital Improvement. The $200,000 revenues into Fund 101 are also corrected and net to zero. - Fund 311 has $456,000 in transfers in that need to be budgeted that were missing from the budget as well as a project correction that is net zero. - Funds 315 and 350, CIP Sidewalk and CIP General Fund Reserve respectively, have small transfer out corrections totaling $10,500.
- Fund 316, CIP - Santa Cruz Library, was missing a $500,000 transfer out to General CIP. - Funds 943 and 945, Successor Agency Funds, were missing budget for the expected expenditures totaling $260,249.

Economic Development is correcting Fund 279, Affordable Housing Trust Fund (AHTF), and Fund 311, General CIP, project funds. Funds were budgeted to be transferred from AHTF to General CIP to be used for project costs. However, it has been determined that the funds from the State Local Housing Trust Fund should be spent by the AHTF. This budget adjustment reallocates these funds and creates new projects in the AHTF.

The Water Department has corrections to the transfer amounts from the 8/22/2023 Council approval of a budget adjustment to transfer budget appropriations and actual expenses from Water Program Administration to various active Water CIP projects. The transfers are net neutral. And there is a transfer in to Fund 714, Water-Public Art, in the amount of $2,044 that was missed.

FISCAL IMPACT: The Human Resources, Fire Department, City Library, and City Attorney adjustments will be offset by the fund balance in the General Fund. Attached is a recap of the impact to expenditures and revenues for the year-end budget adjustment:

10.2 Expenditures Revenues
General Fund 101 725,636 -
Wharf Fund 104 6,598
Civic Equipment Maintenance/Replacement 121 5,879
Economic Development Trust 136 -
Disaster Recovery 170 54,337 650,000
Parks & Recreation Tax Combined Fund 249 80,000
Affordable Housing Trust Fund 279 (11,677,701) 181,119
Successor Agency (H) LMIH-Merged 281 181,119
Transportation Development Act 291 311,699 311,699
State Homelessness Response 293 200,000
General Capital Investment Projects 311 (11,877,701) (15,971,701) CIP Sidewalk 315 10,000
CIP - Santa Cruz Library 316 500,000
CIP General Fund Reserve 350 500
Water 711 -
Water-Public Art 714 2,044
Successor Agency Funds 943/945 260,249
TOTAL (21,219,385) (14,826,839)
Prepared By:

Tracy Cole
Finance Manager - Budget
Submitted By:

Elizabeth Cabell
Director of Finance
Approved By:

Matt Huffaker
City Manager
ATTACHMENTS:

1. BUDGET ADJUSTMENT.PDF

10.3 City of Santa Cruz

BUDGET ADJUSTMENT REQUEST
Administrative Approval
Fiscal Year:

ACCOUNT PROJECT NAME (if applicable) OR REVENUE ACCOUNT TITLE ACCOUNT PROJECT NAME (if applicable) OR EXPENDITURE ACCOUNTTITLE NET: $

REQUESTEDBY DEPARTMENTHEAD

APPROVAL

BUDGET/ACCOUNTING

REVIEWED

FINANCE DIRECTOR

APPROVAL

CITYMANAGER

APPROVAL
Reso #:

PROJECT

PROJECT
AMOUNT
AMOUNT
Council Approval

TOTALEXPENDITURE

TOTALREVENUE
Date:

Purpose:

Revised October 20, 2022

10.4 Fund
Add/Reduce
/New Project # Project Name GL Account String Account Description Amount Onetime Annual Justification
101 Reduce 101-00-00-0000-49102
From Capital
Improvemeent Projects
Fund (200,000) X Accidentially budgeted from wrong acct 101 Add 101-00-00-0000-49178
From CA14 Homelessness
Act 200,000 X Email states this funding source
170 Add 170-00-00-0000-43191 FEMA disaster relief 650,000 X Missing from adopted budget 291 Add
g600001-400-4000-
0142 TDA - Transit Purposes 291-40-00-6301-43210
State operating grants and
contributions 311,699 X Additional pass-thru funding received 311 Add c512002-943-0-0 311-00-00-0000-49191
From CIP - Santa Cruz
Library -Intra-entity fund
transfer 500,000 X Missing from adopted budget
311 Reduce 311-00-00-0000-49130 From Gas Tax Fund (4,000) X Duplicated in adopted budget (GL and
project)
311 Reduce 311-00-00-0000-49109
From P&R Facilities Tax
Fund (249) (40,000) X GL doesn't match adopted budget
311 Reduce c512203 946 0 0 EDA Wharf Piling Replacements 311-00-00-0000-49158 From ED Trust (611) X Reallocate Wharf Project funding to cover
FY23 expense
311 Add c511705-946-0-0 Miramar Demo 311-00-00-0000-49158 From ED Trust 611 X Reallocate Wharf Project funding to cover
FY23 expense
279 Add 279-00-00-0000-49118
From Successor Agency
Housing 181,119 Yes
To budget funding for Affordable Hsing
Fund 279 exp
279 Reduce h512203-290-1062-0 LHTF 2020 279-51-81-5201-43239 State LHTF Funds (5,000,000) Yes Opened new project to allow charging staff
time
279 Add h512204-290-1062-0 LHTF 2020 279-51-81-5201-43239 State LHTF Funds 5,000,000 Yes Opened new project to allow charging staff
time
279 Reduce h512305-290-1062-0 LHTF 2021 279-51-80-5201-43239 State LHTF Funds (5,000,000) Yes Opened new project to allow charging staff
time
279 Add h512307-290-1062-0 LHTF 2021 279-51-80-5201-43239 State LHTF Funds 5,000,000 Yes Opened new project to allow charging staff
time
311 Reduce c512002-958-0-0 Downtown Mixed Use Project 311-00-00-0000-49125 From AHTF (3,798,881) Yes Reallocating LHTF Funds 311 Reduce c512201-958-0-0 Pacific Station North 311-00-00-0000-49125 From AHTF (6,778,820) Yes Reallocating LHTF Funds 311 Reduce c512202-958-0-0 Pacific Station South 311-00-00-0000-49125 From AHTF (1,100,000) Yes Reallocating LHTF Funds 311 Reduce LHTF 2021 311-00-00-0000-49125 From AHTF (4,750,000) Yes Reallocating LHTF Funds 714 Add 714-00-00-0000-49191
From Water (intra-entity
fund xfer in) 2,044 X Missing from adopted budget
(14,826,839)
Total General Fund -
Total Other Funds (14,826,839)
Total Revenue (14,826,839)
Revenue
FY 2023 YEAR-END BUDGET ADJUSTMENTS

10.5 Fund
Add/Reduce
/New Project # Project Name GL Account String Account Description Amount Onetime Annual Justification
101 Reduce 101-00-00-0000-59103 To General CIP (180,000) X BA 2307 was coded incorrectly 101 Reduce 101-00-00-0000-59134 To General CIP (10,000) X From wrong fund, adopted budget 101 Add 101-11-04-1220-52132 Legal services - outside 545,846 X Appropriation correction 101 Add 101-12-00-1230-52136
Personnel services -
outside 19,499 X Appropriation correction
101 Add 101-21-31-2202-51110 Regular full time 752,638 X Appropriation correction 101 Add 101-35-50-3410-54990
Miscellaneous supplies
and services 162,102 X Appropriation correction
101 Reduce 101-51-80-5590-52151 Program Services (61,000) X Use of FY remaining account balance for
projects
101 New p512305-100-2020-0 Economic Activity Analysis 101-51-80-5590-52151 Program Services 30,000 X Data analytics for commercial corridors
101 New p512304-100-2020-0 Economic Activity Analysis 101-51-80-5590-52151 Program Services 31,000 X Vendor contract to organize promote and
operate Midtown Summer Events Program
101 Add 101-51-80-5401-51911 Interfund Labor Credit (564,449) X Labor Credits rebudgeted to FY23 for
Project Implementation
104 Add 104-30-43-3211-51122 Temporary 6,598 X Appropriation correction 121 Add 121-30-42-3213-54990
Miscellaneous supplies
and services 5,879 X Appropriation correction
136 Reduce EDA Wharf Piling Replacements 136-00-00-0000-59103 Transfer to CIP (611) X Reallocate Wharf Project funding to cover
FY23 expense
136 Add Miramar Demo 136-00-00-0000-59103 Transfer to CIP 611 X Reallocate Wharf Project funding to cover
FY23 expense
170 Add 170-21-31-2204-57290 Other building costs 54,337 X Missing from adopted budget 249 Add c302313-908 HW Pool-Repairs and Upgrades 249-00-00-0000-59103 P&R Tax Combined Fund 80,000 X Missing from adopted budget 281 Add r521301-958-0-0 Metro Housing 281-00-00-0000-59136 Transfer to AHTF for prior
year expenses 181,119 X To budget funding for Metro Hsing 291 Add g600001-100 TDA - Transit Purposes 291-40-00-6301-56960 Loans and grants 311,699 X Additional pass-thru funding received 293 Add 293-00-00-0000-59101 To General Fund 200,000 X Email states this funding source 311 Reduce 311-00-00-0000-59101 To General Fund (200,000) X Accidentially budgeted from wrong acct 315 Add 315-00-00-0000-59134 To General CIP 10,000 X From wrong fund, adopted budget 316 Add 316-00-00-0000-59191 To General CIP 500,000 Missing from adopted budget 350 Add c212306-963-0-0 Fire Station 3 Buttler Building 350-00-00-0000-59103 To General CIP 500 X Missing from mid-year 279 Reduce Downtown Mixed Use Project 279-00-00-0000-59103 Transfer to CIP (3,798,881) X Reallocating LHTF Funds 311 Reduce c512002-100-2020-0 Downtown Mixed Use Project 311-51-80-9990-57390 Supplies, services &
capital outlay (3,798,881) X Reallocating LHTF Funds
279 Reduce Pacific Station North 279-00-00-0000-59103 Transfer to CIP (6,778,820) X Reallocating LHTF Funds 311 Reduce c512201-100-2020-0 Pacific Station North 311-51-80-9990-57390 Supplies, services &
capital outlay (6,778,820) X Reallocating LHTF Funds
311 Reduce Pacific Station South 279-00-00-0000-59103 (1,100,000) X Reallocating LHTF Funds 311 Reduce c512202-100-2020-0 Pacific Station South 311-51-80-9990-57390 Supplies, services &
capital outlay (1,100,000) X Reallocating LHTF Funds
279 Reduce h512203-100-2010-0 LHTF 2020 279-51-81-5201-52121 Staff Labor (55,000) X New project opened to allow charging staff
time
279 Add h512204-100-2020-0 LHTF 2020 279-51-81-5201-52199 Other Professional &
Technical 7,200 X
New project opened to allow charging staff
time
279 Add h512204-100-2010-0 LHTF 2020 279-51-81-5201-52121 Staff Labor 47,800 X New project opened to allow charging staff
time
279 Reduce h512203-920-0-0 LHTF 2020 279-00-00-0000-59103 Transfer to CIP (4,945,000) X New project opened to allow charging staff
time
Expenditures

10.6 Fund
Add/Reduce
/New Project # Project Name GL Account String Account Description Amount Onetime Annual Justification
279 Add
h512204-100-2020-
357 LHTF 2020 279-51-81-5201-56960 Loans and Grants 4,945,000 X New project opened to allow charging staff
time
279 Reduce h512305-100-2020-0 LHTF 2021 279-51-81-5201-52199 Other Professional &
Technical (75,000) X
New project opened to allow charging staff
time
279 Add h512307-100-2020-0 LHTF 2021 279-51-81-5201-52199 Other Professional &
Technical 75,000 X
New project opened to allow charging staff
time
279 Reduce h512305-100-2010-0 LHTF 2021 279-51-81-5201-52121 Staff Labor (175,000) X New project opened to allow charging staff
time
279 Add h512307-100-2010-0 LHTF 2021 279-51-81-5201-52121 Staff Labor 175,000 X New project opened to allow charging staff
time
279 Reduce h512305-920-0-0 LHTF 2021 279-00-00-0000-59103 Loans and Grants (4,750,000) X New project opened to allow charging staff
time
279 Add
h512307-100-2020-
357 LHTF 2021 279-51-81-5201-56960 Loans and Grants 4,750,000 X New project opened to allow charging staff
time
711 Add c700025-100-2020-0 Graham Hill WTP Facility Improvement Plan 711-70-91-7152-57302 Water Systems 87,189 X 711 Add c701501-100-2020-0 Graham Hill WTP Concrete Tanks 711-70-91-7152-57302 Water Systems 25,208 X 711 Add c701505-100-2020-0 University Tank No. 4 Rehab/Replacement 711-70-91-7153-57302 Water Systems 3,687 X 711 Add c701606-100-2020-0 Newell Creek Dam Inlet/Outlet Replacement 711-70-91-7153-57302 Water Systems 55,649 X 711 Add c701609-100-2020-0 Aquifer Storage & Recovery Mid County Groundwater 711-70-91-7153-57302 Water Systems 2,648 X 711 Add c701611-100-2020-0 Recycled Water Feasibility Study 711-70-91-7153-57302 Water Systems 764 X 711 Add c701705-100-2020-0 Water Supply Augmentation 711-70-91-7153-57302 Water Systems 55,534 X 711 Add c701903-100-2020-0 Tait Diversion Rehab/Replacement Project 711-70-91-7151-57302 Water Systems 6,104 X 711 Add c702001-100-2020-0 Distribution System Water Quality 711-70-91-7151-57302 Water Systems 66 X 711 Add c702002-100-2020-0 Brackney Landslide Area Pipeline Risk Reduction 711-70-91-7153-57302 Water Systems 7,968 X 711 Add c702101-100-2020-0 ASR Mid County Exisiting Infrastructure 711-70-91-7153-57302 Water Systems 6,116 X 711 Add c702105-100-2020-0 Newell Creek Pipeline Felton/Graham Hill 711-70-91-7153-57302 Water Systems 22,702 X 711 Add c702108-100-2020-0 Beltz WTP Filter Rehabilitation 711-70-91-7152-57302 Water Systems 269 X 711 Add c702109-100-2020-0 Graham Hill WTP Entrance Improvements 711-70-91-7159-57302 Water Systems 630 X 711 Add c702202-100-2020-0 CMMS Software Replacement for Water Dept 711-70-91-7159-57901 Water Systems 292 X 711 Add c702203-100-2020-0 Beltz 12 Ammonia Removal 711-70-91-7152-57302 Water Systems 1,262 X 711 Add c702205-100-2020-0 Intertie 1 - Santa Cruz-Scotts Valley 711-70-91-7151-57302 Water Systems 5,590 X 711 Add c702304-100-2020-0 Branciforte Streambank Restoration 711-70-91-7159-57302 Water Systems 445 X 711 Add c702305-100-2020-0 Beltz WTP Upgrades 711-70-91-7152-57302 Water Systems 9,825 X 711 Add e702301-100-2020-0 DR 4683 Felton Diversion Pipeline 711-70-91-7153-57302 Water Systems 1,490 X 711 Reduce c701901-100-2020-0 Water Program Adminstration 711-70-91-7159-57302 Water Systems (293,436) X 943 Add 943-00-00-0000-59906
Contributions from SA to
City 170,101 X Missing from adopted budget
945 Add 945-52-80-5510-52149 Interagency labor charges 90,148 X Missing from adopted budget (21,219,385)
Total General Fund 725,636
Total Other Funds (21,945,021)
Total Revenue (21,219,385)
Correction to transfer amount from
8/22/2023 Council approval of a budget
adjustment to transfer budget
appropriations and actual expenses from
Water Program Administation to various
active Water CIP projects.

Expenditures

10.7 Expenditures Revenues
General Fund 101 725,636 -
Wharf Fund 104 6,598
Civic Equipment Maintenance/Replacement 121 5,879
Economic Development Trust 136 -
Disaster Recovery 170 54,337 650,000
Parks & Recreation Tax Combined Fund 249 80,000
Affordable Housing Trust Fund 279 (11,677,701) 181,119
Successor Agency (H) LMIH-Merged 281 181,119
Transportation Development Act 291 311,699 311,699
State Homelessness Response 293 200,000
General Capital Investment Projects 311 (11,877,701) (15,971,701) CIP Sidewalk 315 10,000
CIP - Santa Cruz Library 316 500,000
CIP General Fund Reserve 350 500
Water 711 -
Water-Public Art 714 2,044
Successor Agency Funds 943/945 260,249
TOTAL (21,219,385) (14,826,839)

10.8 City Council

AGENDA REPORT
DATE: 10/05/2023
AGENDA OF: 10/24/2023
DEPARTMENT: Human Resources/Finance
SUBJECT: Resolution Amending the City of Santa Cruz Personnel Complement and Classification and Compensation Plan for the City Manager’s Office, Information Technology, Parks and Recreation, Public Works, and Economic Development and Housing – Budget Adjustment (HR/FN) RECOMMENDATION: Motion to:
1) Adopt a resolution amending the Classification and Compensation Plans and the Fiscal Year 2024 Budget Personnel Complement for Information Technology, the City Manager’s Office, Parks and Recreation, Public Works, and Economic Development and Housing; and 2) Adopt a resolution amending the FY 2024 budget in the amount of $636,046 to adjust personnel budgets for Information Technology, City Manager’s Office, Parks and Recreation, Public Works, and Economic Development and Housing.

BACKGROUND: Recognizing the need to adapt to evolving needs and opportunities, several departments are requesting classification modifications due to industry or operational changes that are not currently reflected in existing classifications, and additional positions to address operational needs. And, as vacancies arise, particularly those with long-standing incumbents, departments have an opportunity to reassess the structure of their organization including the consideration of operational changes, such as changes in public preferences, legal requirements, and program needs.

DISCUSSION:

Overall, six different changes to the City’s Personnel Complement and Classification and Compensation Plan are included below. The changes may have one or two actions within them, and span Information Technology, City Manager’s Office, Parks and Recreation, Public Works, and Economic Development and Housing.

Information Technology / Change #1 - Authorized Personnel Listing: IT Manager Position

1.0 FTE – Position Addition
Information Technology Manager – Cyber Security
The Information Technology (IT) Department plays a vital role in upholding the City's digital infrastructure and ensuring the uninterrupted delivery of essential services to both City staff and the community. Currently, cybersecurity threats such as malware, phishing attacks, and data

11.1 breaches that have grown in sophistication over recent years places the City's digital assets at risk and potentially exposes sensitive citizen and municipal information, leading to the possibility of regulatory fines and legal liabilities. Moreover, evolving data protection regulations necessitate continuous monitoring and adaptation of IT systems making cybersecurity compliance a complex task.

Given these concerns, the IT Department requires a dedicated IT Cybersecurity Manager to focus on proactive cybersecurity strategy and management. Hiring a dedicated IT Cybersecurity Manager is crucial to address current and future cybersecurity concerns. Such a manager would enhance the City's security posture by proactively identifying and mitigating cybersecurity threats, ensuring a rapid response to incidents, and maintaining compliance with regulations.

The manager would also develop a tailored cybersecurity strategy, reducing the risk of data breaches and system vulnerabilities. This position would move the City along toward safeguarding the City's digital infrastructure and minimize risks. The existing IT Manager classification has been revised to include cybersecurity responsibilities and staff are requesting City Council approval to add a 1.0 full-time equivalent (FTE) to the City's authorized position listing.

City Manager’s Office / Change #2 - Classification & Compensation Plan and Authorized Position Listing: Sustainability and Resiliency Officer 1.0 FTE, Title & Classification Modification
Sustainability and Resiliency Officer
In September of 2022, per administrative procedure policy, the City Manager's Office formally requested that the Sustainability and Climate Action Manager position be reviewed as the position's complexity of work and scope of services had evolved significantly since the position's creation.

Examples of changes in the position included:

1. The generally singular scope of the existing position - the climate action program and its associated projects - had changed to include citywide grants management, Health in All Policies, and multiple aspects of sustainability beyond just climate.

2. The position independently manages complex assigned projects through the full life cycle of the projects, including those for climate, grants, Health in All Policies, sustainability, and many more.

3. The position trains, supervises and evaluates staff, including interns, temporary employees, a management analyst, and contractors.

Based upon these examples and preliminary data gathering, the HR Department determined that a study should be done and went out for quotes to conduct a study. The study would analyze the work being performed and make a recommendation with respect to the assigned classification.

After receiving proposals, the Human Resources Department chose Koff & Associates to conduct the study.

The final report was received on May 11, 2023, and reflected that the duties and responsibilities of the position were not fully reflected in the job description of Sustainability and Climate Action Manager. The consultant reviewed other classifications in the City to ascertain other classifications to which the position might be assigned. The classification of Assistant to the City

11.2 Manager was identified as being similar with respect to the level and breadth of job duties. While the Assistant to the City Manager classification is broad in description, the job duties of the evaluated position required more targeted climate and environmental program development experience and other sustainability and grants knowledge. Thus, the report recommended that a new classification of Sustainability and Resiliency Officer be established with the pay scale the same as the Assistant to the City Manager classification. HR developed a new Sustainability and Resiliency Officer classification to replace the Sustainability and Climate Action Manager.

Parks & Recreation
A) Senior Parks Maintenance Worker
Change #3 - Authorized Personnel Listing:

Parks Maintenance Worker 1.0 FTE – Position Deletion;
with Senior Parks Maintenance Worker 1.0 FTE – Position Addition Parks & Recreation has a vacant Parks Maintenance Worker position and determined that a Senior Parks Maintenance Worker is the more appropriate classification for this position as current work requires the application of more advanced skills, greater autonomy, and the ability to lead a small crew of Parks Maintenance Workers or Maintenance Aides. This autonomy and leadership duty will provide an additional career advancement path from service level, to lead, and supervisory advancement, and allow the supervisor to focus on critical administrative and planning tasks as opposed to daily operations.

B) Assistant Golf Course Superintendent
Change #4 - Authorized Personnel Listing:

Senior Parks Maintenance Worker 1.0 FTE – Position Deletion; with Assistant Golf Course Superintendent 1.0 FTE Position Addition The Assistant Golf Course Superintendent position was removed from the Parks & Recreation Department budget over a decade ago due to financial constraints. Since that time the Golf Course Superintendent has provided direct oversight of all golf course maintenance operations, without the support of a second-in-command. This has limited the division’s ability to complete strategic projects necessary to move the Department forward and means limited backup coverage for the Superintendent given the seven-day-a-week operation. To provide field supervision, better coverage for weekend and after-hours incidents, and create a more continuous career ladder for succession at the Golf Course, Parks & Recreation recommends deleting a recently vacated Senior Parks Maintenance Worker position and filling the Assistant Golf Course Superintendent position.

Public Works / Change #5 - Authorized Personnel Listing: Engineering Associate 1.0 FTE – Position Addition
Engineering Associate
The Parks & Recreation Department manages over 1,700 acres of parks and 169,000 square feet of facilities. To refresh these assets, the Department has thirty-one (31) active Capital Investment Program (CIP) projects totaling over three million dollars ($3M). Implementation of these projects is currently handled by supervisory and management staff who also oversee regular

11.3 operations. Consequently, progress on project implementation has been challenging, with work on several projects of strategic importance yet to begin. Repeated emergencies have further delayed efforts to advance CIP projects.

To more effectively implement currently funded and future capital projects, Public Works and Parks & Recreation have identified the need for dedicated project management staff. Engineering Associates perform “complex professional engineering work involved in the management, planning, design, construction and maintenance of City Public Works engineering projects, programs and facilities”, including parks and buildings. The assignment of this Public Works Engineering capability and capacity to the Parks and Recreation Department will accelerate the design and execution of improvements to the City’s parks and recreational facilities as outlined in the Parks Master Plan. It is recommended that this position be added to the Public Works Department and assigned as generally dedicated support for Parks & Recreation capital project needs.

Economic Development & Housing / Change #6 - Authorized Personnel Listing: Economic Development Coordinator 1.0 FTE – Position Addition
Economic Development Coordinator
Economic Development & Housing (ED) is requesting a full-time Economic Development Coordinator to provide additional capacity for business support as they continue to provide recovery services following the pandemic, and assistance for businesses in the City's changing downtown. The position will also assist in transition work for the temporary outdoor dining programs to permanent programs and provide ongoing support for the permanent program. The ED Coordinator will also help with the implementation of downtown reinvestment programs and support for our expanded downtown improvement assessment districts and the creation of a new commercial assessment district in the downtown.

FISCAL IMPACT: The following impact is anticipated to be taken from fund reserves for FY 2024, based on the assumption that the positions are successfully recruited for and filled in FY 2024, with assumptions of filling them in March 2024:

Department Additional Annual
Cost (General)
Additional Annual
Cost (Enterprise
Funds)
Total Annual
Sustainability and
Resiliency Officer
$4,851 $2,079 $6,930
Information Technology
Manager
$78,210 $78,210
Parks and Recreation $11,159 $11,159
Public Works $58,487 $58,487
Economic Development
and Housing
$55,110 $55,110
Total $152,707 $57,189 $209,896
The annual fiscal impact to the General and Enterprise funds are as follows:

11.4 Department Additional Annual
Cost (General)
Additional Annual
Cost (Enterprise
Funds)
Total Annual
Sustainability and
Resiliency Officer
$14,700 $6,300 $21,000
Information Technology
Manager
$237,000 $237,000
Parks and Recreation $33,815 $33,815
Public Works $177,232 $177,232
Economic Development
and Housing
- $167,000 $167,000
Total $462,747 $173,300 $636,047
Prepared By:

Cathy Bonino
Principal HR Analyst
Sara De Leon
Chief People Officer
Submitted By:

Sara De Leon
Chief People Officer
Approved By:

Matt Huffaker
City Manager
ATTACHMENTS:

1. RESOLUTION.DOCX

2. IT MANAGER JOB DESCRIPTION - CYBER SECURITY UPDATE.DOCX

3. SUSTAINABILITY AND RESILIENCY OFFICER JOB DESCRIPTION - NEW.DOCX

4. BUDGET ADJUSTMENT.PDF

11.5 RESOLUTION NO. NS-XX,XXX

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CRUZ AMENDING

THE PERSONNEL COMPLEMENT AND CLASSIFICATION AND COMPENSATION PLANS AND THE MID FY 2024 BUDGET – CITY MANAGER’S OFFICE, INFORMATION

TECHNOLOGY, PARKS AND RECREATION, PUBLIC WORKS, AND ECONOMIC

DEVELOPMENT AND HOUSING DEPARTMENTS
WHEREAS, staff has recommended certain modifications to the Classification and Compensation Plans.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Santa Cruz, as follows:

That effective October 28, 2023 the City of Santa Cruz Classification and Compensation Plans be modified to:

Activity Classification No. and Title Salary (New
Classifications and
Changes)

INFORMATION

TECHNOLOGY
Add Position: 1251 832- Information Technology
Manager – 1.0 FTE

CITY MANAGER
Change Job Title and
Salary From:
7501 738 – Sustainability and
Climate Action Manager
$9,384/mo. - $12,096/mo.

To: 1251,7501 738 – Sustainability and
Resiliency Officer
$10,444/mo.– $13,462/mo.

PARKS AND

RECREATION
Delete Position: 167- 053 – Parks
Maintenance Worker

1.0 FTE
Add Position 3120 186-xxx Sr. Parks
Maintenance Worker 1.0 FTE
Add Position: 3131 301- Assistant Golf Course
Superintendent 1.0 FTE

11.6 RESOLUTION NO. NS-XX,XXX
Activity Classification No. and Title Salary (New
Classifications and
Changes)
Delete Position: 186-012 Sr. Parks
Maintenance Worker

PUBLIC WORKS
Add Position: 4102 716 – Engineering Associate

1.0 FTE

ECONOMIC

DEVELOPMENT AND

HOUSING
Add position:
5990 782/783 Economic
Development Coordinator I/II

1.0 FTE
PASSED AND ADOPTED this 24th day of October 2023, by the following vote:

AYES:

NOES:

ABSENT:

DISQUALIFIED:

APPROVED: ______________________________
Fred Keeley, Mayor
ATTEST: _________________________________
Bonnie Bush, City Clerk Administrator

11.7 CITY OF SANTA CRUZ

INFORMATION TECHNOLOGY MANAGER
Reports to: Director of Information Technology or Director of Libraries or other executive staff as assigned
Supervises: Other classifications as assigned
Bargaining Unit: Mid-Management

DESCRIPTION
Under administrative direction, plans, coordinates, directs, and designs IT-related activities of the organization, as well as provides administrative direction and support for daily operational activities; works closely with decision makers in other departments to identify, recommend, develop, implement, and support cost-effective technology solutions for all aspects of the organization; oversees the operations of the enterprise’s IT security solutions and ensures compliance with IT security standards; defines and implements IT policies, procedures, and best practices; manages projects and project portfolio; supervises assigned staff; and performs related duties as assigned.

If assigned to Santa Cruz Public Library (SCPL):

Plans, organizes and directs the Library Information Technology (LIT) services related to all computer and network hardware, software applications, Payment Card Industry (PCI) compliance, phone systems, and data telecommunications.

If assigned as the Cybersecurity IT Manager (City/SCPL):

Manages the cybersecurity related activities of the Information Technology Department. Integrates all information security activities to preserve the availability, integrity, and confidentiality of the organization’s data and assets; assists in policy development for data threat strategies and security tools; for incident response, makes recommendations and manages event(s) as needed; responsible for overall cybersecurity program management, including systems analysis and modification, vendor administration, and enterprise-wide coordination.

DISTINGUISHING CHARACTERISTICS
The Library IT Manager is distinguished from the next lower classification of Systems Coordinator and Network and Systems Administrator in that the latter is responsible for the development, administration, and maintenance of an assigned LIT system or a subset of the branch or unit (i.e. a grouping of applications, services, networks, and/or hardware). In addition, the Library IT manager focus, while building upon IT subject matter expertise, also includes budget, planning, relationship management (internal and external), procedures, policies, and strategy for the IT division within Santa Cruz Public Library system. This classification is distinguished from the next higher classification of Director of Libraries in that the latter has overall responsibility for the city-county Library System.

11.8 City of Santa Cruz Page 2
Information Technology Manager
2 The City IT Manager is distinguished from the next lower classifications of Network and System Administrator, Programmer Analyst I/II, Systems Coordinator, SCADA Network & Systems Administrator in that the latter classifications are responsible for a subset of the branch or unit (i.e. a grouping of applications, services, networks, and/or hardware). In addition, the City IT manager focus, while building upon IT subject matter expertise, also includes budget, planning, relationship management (internal and external), procedures, policies, and strategy for a division within the IT Department. This classification is distinguished from the next higher classification of Assistant Director of Information Technology in that the latter is responsible for personnel and program oversight of the City’s IT function.

TYPICAL DUTIES (May include, but are not limited to the following):
 Leads operational and strategic planning, including fostering innovation, planning projects, and organizing and negotiating the allocation of resources.  Benchmarks, analyzes, reports on, and makes recommendations for the improvement and growth of the IT infrastructure and applications.
 Manages financial aspects including purchasing, budgeting, and budget review.  Develops business case justifications and cost/benefit analyses for IT spending and initiatives.
 Develops and implements IT policies and procedures, including those for architecture, security, disaster recovery, standards, purchasing, and service provision.  Prepares and evaluates requests for proposals, bids, specifications, contracts, and statements of work; coordinates the acquisition, installation, operation and maintenance of information systems hardware and software, and monitors vendor and consultant contracts to ensure compliance with performance requirements.
 Negotiates and administers vendor, outsource, and consultant contracts and service agreements.
 Manages the deployment, monitoring, maintenance, development, upgrade, and support of IT systems, including networks, security and firewalls, servers, PCs, operating systems, hardware, application software, backups, disaster recovery / business resumption planning and off-site storage, and peripherals. May work tactically in these areas as needed.  Establishes security standards and policies for all tiers of IT infrastructure and applications;
 Oversees provision of end-user services, including help desk and technical support services.
 Works with stakeholders to define business and systems requirements for new technology implementations.
 Directs research on potential technology solutions in support of procurement efforts.  Keeps current with the latest technologies, attends and participates in professional and community meetings.
 Develops and oversees all aspects of disaster recovery and business resumption planning for networks, servers, and/or software applications.  Approves and oversees projects and manages IT project portfolio.  Practices asset management for IT hardware, software, and equipment.  Manages IT staffing, including recruitment, supervision, scheduling, training, development, evaluation, and disciplinary actions.

11.9 City of Santa Cruz Page 3
Information Technology Manager
3  Establishes and maintains regular written and in-person communications with the organization’s executives, department heads, and end users regarding pertinent IT activities.
 Performs other related duties that may be reasonably expected as part of this classification.

If assigned to SCPL:

In addition to the typical duties noted above:
 Applies for and administers grants related to Information Technology, including the Federal E-Rate program as well as California Library Connect via the California State Library (CSL).

If assigned as the Cybersecurity IT Manager (City/SCPL) In addition to the typical duties noted above:
 Develops and implements cybersecurity strategies to protect digital assets, networks, systems, and data from threats and breaches.
 Conducts or manages risk assessments and IT audits to identify vulnerabilities and recommends security measures for IT systems.
 Establishes and enforces security policies and procedures to ensure compliance and provides employee training.
 Manages security technologies including firewalls, intrusion detection systems, antivirus software, encryption tools, and authentication systems to protect against security threats.  Conducts comprehensive application vulnerability assessments and provides guidance and oversight on effective patch management processes to ensure robust security measures.  Manages incident response and disaster recovery, including plan development, coordination during incidents, and overseeing recovery.  Stays updated on cybersecurity trends, threats, and technologies through continuous learning, conferences, networks, and certifications.
 Collaborates with stakeholders to align security initiatives with business objectives and address concerns across the organization.

WORKING CONDITIONS:

Position requires prolonged sitting, standing, walking, squatting, turning, stooping, crouching, kneeling and reaching in the performance of daily activities; repetitive hand movements and fine coordination in preparing reports using a computer keyboard; both near and far vision in performing duties; color vision to accurately interpret visual displays; acute hearing is required when providing phone and personal service. The need to lift, carry, drag and push equipment and materials weighing up to 25 pounds is also required. Some of these requirements may be accommodated for otherwise qualified individuals requiring and requesting such accommodations. Additionally, off-site travel, attendance at multi-day off-site training sessions, weekend and evening work, and after-hours emergency call outs may be required.

11.10 City of Santa Cruz Page 4
Information Technology Manager
4 MINIMUM QUALIFICATIONS
The minimum qualifications for Education, Experience, Knowledge, Skills and Abilities are the following:

Education and Experience:
 Bachelor’s Degree in Information Systems, Computer Science, Business Management, Management Information Systems or related field; and
 Four (4) years of increasingly responsible professional experience as a Network Administrator, Database Administrator, Systems Administrator, Programmer, Business Systems Analyst, Project Manager or other IT subject area including two (2) years of supervisory experience.
 In lieu of a Bachelor’s Degree, four (4) years of additional relevant experience (eight (8) years total) may be substituted.

Knowledge:
 Full-cycle function, implementation and support of infrastructure and/or application solutions.
 Subject matter expertise in one or more of the following areas: networks; security; communications; packaged applications; software development; systems administration; field technical services.
 Project planning and project management tools and techniques.  Budgeting processes, implementation and monitoring.
 Principles and practices of supervision including work planning, review and evaluation.  IT security and applicable data privacy practices and laws.  Principles and practices of troubleshooting techniques.

If assigned to SCPL:

In addition to the above Education, Experience and Knowledge:
 Current trends and innovations in technology and Library Information Science.

If assigned as the Cybersecurity IT Manager (City/SCPL) In addition to the above Education, Experience and Knowledge:
 Cybersecurity principles and best practices: Understanding of fundamental concepts, frameworks, and methodologies related to cybersecurity, such as risk management, access control, encryption, network security, and incident response.  Awareness of relevant cybersecurity standards and regulations such as ISO 27001, NIST Cybersecurity Framework, GDPR, HIPAA, and PCI DSS.
 Knowledge of incident response procedures, incident handling, and digital forensics techniques to effectively respond to and investigate security incidents.

11.11 City of Santa Cruz Page 5
Information Technology Manager
5 Abilities:
 Provide technical advice and consultation to ensure efficient network, application or other technical solutions.
 Establish and maintain appropriate documentation and reports, including but not limited to project status and performance measures.
 Stay abreast of emerging technological developments.
 Successfully manage and prioritize multiple tasks.
 Communicate effectively, orally and in writing, including communicating technical information in business-friendly and user-friendly (non-technical) language.  Interact tactfully and effectively with City employees, vendors and the public, and maintain a positive customer service mindset.
 Effectively lead and train others.
 Align business and department goals.
 Analyze, troubleshoot and solve complex technical problems.  Exercise initiative and independent analysis and judgment in solving complex technical problems.
 Be attentive to detail.
 Be team-oriented and successfully work within a collaborative environment.  Observe safety principles and work in a safe manner.

All assignments except Library:

In addition to the above Abilities:
 Successfully pass a full criminal record / background check including confirmation of the California Law Enforcement Telecommunication System (CLETS) record check from the Department of Justice (DOJ) obtained through Live Scan fingerprinting, and a criminal record history from the Federal Bureau of Investigations (FBI) Licenses and Certificates
All assignments
 Possession and continued maintenance of a valid California Class C driver’s license.

DESIRABLE QUALIFICATIONS
 Experience working in a public agency.
 Proficiency in the configuration and setup of Microsoft server and client infrastructure used by the City.
 Experience utilizing remote network access software products.  Administration of computer networks using the most recent MS Server, SQL Server and MS/Exchange products.
 Knowledge of typical government application software and associated operational requirements.
 Knowledge of the business applications and report writing software used by the City.  Knowledge of Microsoft SQL Server administration and maintenance.  Possession of Microsoft system administration role-based certifications.

11.12 City of Santa Cruz Page 6
Information Technology Manager
6  Possession of a Microsoft Certified Data Base Administrator (M.C.D.B.A.) certificate or equivalent.

If assigned to SCPL:

In addition to the above Desirable Qualifications:
 Master's degree in Information Systems, Computer Science, Library and Information Science, Public or Business Administration.
 Experience with Integrated Library Systems (ILS) and experience working in a Library.  Experience with Unix/Linux or general open-source solutions.  Experience with Technical Project Management
If assigned as the Cybersecurity IT Manager: (City/SCPL) In addition to the above Desirable Qualifications:
 Professional experience in cybersecurity application and infrastructure technology management.
 Possession of cybersecurity certifications such as, but not limited to, (ISC)2 CISSP, ISACA CISM, CISA, CRISC, CompTIA Security+, GIAC Security Leadership Certification

CAREER LADDER
 Director of Information Technology
 Assistant Director of Information Technology
 Information Technology Manager
 Systems Coordinator or (SCADA) Network and Systems Administrator  IT Project Manager
 Business Systems Analyst I/II; Programmer Analyst I/II  IT Specialist III
 IT Specialist I/II
Classification No.: 832
Date of issue: 4/17 New (Re-classified from IT Network Manager, IT Systems Manager/Database Administrator, and Library IT Manager and updated)
Update: 8/23

11.13 CITY OF SANTA CRUZ

SUSTAINABILITY AND RESILIENCY OFFICER
Reports to Assistant City Manager
Supervises Management Analyst, Principal Management Analyst Bargaining Unit Mid-Management

DESCRIPTION
Under administrative direction, coordinates, develops, administers and integrates sustainability and resiliency policies, programs, and practices across all departments for the City of Santa Cruz, including the City's Climate Action Plan, Health in all Policies programs, and related policies; is responsible for fundraising, executing and monitoring well-organized, results-oriented and cohesive plans and work programs incorporating equity, health, and sustainability in all relevant urban domains.

DISTINGUISHING CHARACTERISTICS
This classification is responsible for planning, organizing, reviewing, and evaluating the City’s sustainability and resiliency programs, practices, and initiatives to reflect a balanced approach to building and sustaining a livable and inclusive community, and for providing assistance to the Assistant City Manager in a variety of administrative, coordinative, analytical, and liaison capacities. Successful performance of the work requires knowledge of public policy, City functions, and municipal government activities, including the role of the City Council, and the ability to develop, oversee, and implement projects and programs in a variety of areas. Responsibilities include coordinating the sustainability and resiliency activities of the City with outside agencies, developing and implementing policies, work plans, and procedures, budget administration and reporting, and program evaluation.

Performance of the work requires the use of considerable independence, initiative, and discretion within broad guidelines.

TYPICAL DUTIES (May include, but are not limited to, those duties listed below.)  Manages assigned services and activities of the City’s sustainability and resiliency programs, including the City's Climate Action Plan and Health in all Policies programs.  Stays current with legislative, technical and policy developments in related subject areas; ensures compliance with federal, state, and local regulations.  Recommends, develops, administers, and implements program goals, objectives, and policies and procedures.

11.14 City of Santa Cruz
Sustainability and Resiliency Officer
2  Meets with members of the community; conducts community engagement; develops initiatives in encouraging community involvement; coordinates and innovates public relations efforts including website, social media and press releases, and encourages public-private partnerships in responding to and reducing global warming and other related sustainability or resiliency subject areas.
 Provides information and assistance to the public regarding related programs and services; receives and responds to complaints and questions.  Oversees related work groups and advisory committees; coordinates activities for various related City Council committees and internal working groups and teams.  Represents the City’s interest and provides subject matter expertise in sustainability, resiliency, and other related issues for the City Council and executive management, and in meetings with other agencies.
 Coordinates and performs research and analysis and makes recommendations leading to the development of new, innovative and improved resiliency and sustainability related programs, services, initiatives and processes, including cost analysis, financial needs, funding sources, and related issues.
 Develops and manages vendor contracts and professional services agreements, for professional and/or contracted services; ensures compliance with City’s specifications and service quality.
 Prepares grant strategies, grant proposals and reports to support sustainability and resiliency work; may prepare the same for other City Departments outside of climate action and resiliency programs.
 Identifies, reviews and assesses the City departments' current sustainability and resiliency services and programs within city departments; evaluates programs for best practices, duplications or overlapping programs within the various departments; makes recommendations.
 Actively partners with outside agencies, government, and stakeholders to achieve sustainability and resiliency outcomes in the areas of equity, public health promotion, neighborhood integrity and housing, sustainable mobility, natural resources conservation, renewable energy, and related issues.
 Establishes meaningful performance measures for effective sustainability and resiliency decision-making and properly tracks and reports the City’s progress towards established outcomes.
 Assesses, integrates, implements, and recommends modifications to current sustainability and resiliency policies and initiatives based on experience, expertise, analysis, and national and international best practices.  Evaluates, responds, and recommends responses to proposed projects, programs, ordinances, legislation, and rules of interest that might improve the sustainability and resiliency outcomes of the City.
 Participates in the development and administration of program budgets.  Prepares Council Agenda reports, memos and other forms of communication.  Supports and represents City Council and management policies and practices to the public and other City employees.
 Plans, schedules, prioritizes, and reviews the work of assigned staff; builds and maintains positive working relationships with staff.

11.15 City of Santa Cruz
Sustainability and Resiliency Officer
3  Performs related duties that may reasonably be expected as part of this classification.

WORKING CONDITIONS
Position requires: prolonged sitting, standing, walking, reaching, twisting, turning, kneeling, bending, squatting and stooping in the performance of daily activities; grasping, repetitive hand movement and fine coordination in using a computer keyboard; far vision and near vision in reading written reports and other work related documents; acute hearing when providing phone and personal service; and the need to lift, drag and push files, paper and documents weighing up to 25 pounds. Some of these requirements may be accommodated for otherwise qualified individuals requiring and requesting such accommodations.

MINIMUM QUALIFICATIONS
Education and Experience
The minimum qualifications for Education, Experience, Knowledge, Skills and Abilities are the following:
 Bachelor’s degree from an accredited college or university with major course work in environmental science, public or business administration, or related field; and  Five (5) years of progressively responsible professional program and project management experience with three of those years to include experience with resiliency and environmental program development, policy analysis and program management, or leading strategic planning and operations in the areas of public policy, urban planning and/or economic or community development.

Knowledge:
 Public administration and public policy development, including government financing mechanisms and intergovernmental relations.
 Administrative principles and practices, including goal setting, program development, implementation, and evaluation, and project management.  Organization-change management strategies and methods.  Current management methods and technologies pertaining to resiliency and sustainability programs.
 Best practices in equity engagement and policy design.  Public relations, marketing and promotional approaches for gaining program support and compliance.
 Applicable federal, state, and local laws, codes, and ordinances.  Methods and techniques of developing technical and administrative reports, and business correspondence.
 Principles and practices of leadership, employee mentoring and supervision, and performance evaluation.

11.16 City of Santa Cruz
Sustainability and Resiliency Officer
4  City and mandated safety rules, regulations, and protocols.  Techniques for providing a high level of customer service by effectively dealing with the public, vendors, contractors, and City staff.
 Current equipment and communication tools used for business functions and program, project, and task coordination, including computers and software programs relevant to work performed.

Abilities:
 Develop and implement goals, objectives, practices, policies, procedures, and work standards for assigned programs.
 Prepare and administer program budgets; allocate limited resources in a cost-effective manner.
 Provide administrative, management, and professional leadership for assigned programs.
 Interpret, apply, explain, and ensure compliance with Federal, State, and local policies, procedures, laws, and regulations.
 Evaluate and develop improvements in operations, procedures, policies, or methods.  Identify strategies and target resources to address root causes of inequities.  Develop, organize and coordinate resiliency and sustainability programs and related projects and make recommendations for program improvement.  Understand, interpret and explain the concepts and principles of resiliency and sustainability programs.
 Effectively represent the City in meetings with governmental agencies, contractors, vendors, and various businesses, professional, regulatory, and legislative organizations.  Prepare clear and concise reports, correspondence, policies, procedures, and other written materials.
 Conduct complex research projects, evaluate alternatives, make sound recommendations, and prepare effective technical staff reports.  Independently organize work, set priorities, meet critical deadlines, and follow-up on assignments.
 Effectively use computer systems, software applications relevant to work performed, and modern business equipment to perform a variety of work tasks.  Communicate clearly and concisely, both orally and in writing.  Use tact, initiative, prudence, and independent judgment within general policy and procedural guidelines.
 Establish, maintain, and foster positive and effective working relationships with those contacted in the course of work.
 Demonstrate understanding of, sensitivity to, and respect for the diverse socioeconomic, racial, ethnic, religious, and cultural backgrounds, diverse abilities, gender, gender identity and expression, and sexual orientation of City staff and community served.

LICENSES/CERTIFICATES
 Possession and continued maintenance of a valid California Class C driver’s license and a safe driving record.

11.17 City of Santa Cruz
Sustainability and Resiliency Officer
5 Classification No.: 738
Date of Issue: 08/23
Supersedes: (Re-classification from Sustainability and Climate Action Manager)
New
Update:

Review:

11.18 City of Santa Cruz

BUDGET ADJUSTMENT REQUEST
Administrative Approval
Fiscal Year:

ACCOUNT PROJECT NAME (if applicable) OR REVENUE ACCOUNT TITLE ACCOUNT PROJECT NAME (if applicable) OR EXPENDITURE ACCOUNTTITLE NET: $

REQUESTEDBY DEPARTMENTHEAD

APPROVAL

BUDGET/ACCOUNTING

REVIEWED

FINANCE DIRECTOR

APPROVAL

CITYMANAGER

APPROVAL
Reso #:

PROJECT

PROJECT
AMOUNT
AMOUNT
Council Approval

TOTALEXPENDITURE

TOTALREVENUE
Date:

Purpose:

Revised November 3, 2022

11.19 1
Rosemary Balsley
From: Judi Grunstra <[email protected]>
Sent: Saturday, October 21, 2023 6:58 PM
To: City Council
Cc: Tony Elliot
Subject: Oct 24 meeting_Consent Agenda #11
Dear Council:

Despite a great need to invest in Harvey West Pool, which remains inaccessible to the community, for the most part, the city continues to invest in the DelaVeaga Golf Course.

Rather than hire an Aquarics Director or similar position that would support pool activities, in Item B we see a request for an Assistant Golf Course Superintendent. It seems this staff position will not create a new position, but rather use funding from removing a Senior Parks Maintenance position. Nevertheless, it demonstrates ongoing attention to a city facility that serves far fewer residents than a public swimming pool. This is a matter of EQUITY, something the city seems to care about ‐ perhaps in words, but not in actions.

It would be unforgiveable to go another summer without full access to our one public swimming pool. How can a coastal city allow this? And not only during the summer, with our mild temperatures, but through most of the year. When will Council direct the Parks Department to address this, without waiting for a $10 million park or pool overhaul? When?
Judi Grunstra

11.20 From: Tony Elliot
To: "Judi Grunstra"; City Council
Subject: RE: Oct 24 meeting_Consent Agenda #11
Date: Monday, October 23, 2023 3:05:38 PM
Attachments: image001.png
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Good afternoon, Judi –
Thank you very much for your email and advocacy. With respect to the golf course, although new/additional positions are much needed, the request for City Council’s consideration is to replace a vacant classification (Senior Park Maintenance Worker) with a new classification (Asst. Golf Course Superintendent). The cost differential is approximately $6,200/year which we anticipate will be offset by revenues. Our lean golf course staff complement is the group that maintains the golf course (40,000 rounds per year) and the disc golf course (65,000 rounds per year) in partnership with our operators and non-profit partners.

Thank you for your support regarding Harvey West Pool. The estimated cost for the City to operate and maintain the pool is $1.3 million annually.

Anticipated revenues would only partially cover the total annual costs. Numerous pool improvements were made by the Parks & Recreation Department over the course of the summer in order to meet County Environmental Health requirements. At this point, it is a matter of identifying resources and/or a strategic partnership to operate, maintain, and provide aquatics programming at Harvey West Pool for the public.

This fall, the Parks & Recreation Department will conduct a market analysis/feasibility study for the pool to evaluate the specific needs for aquatics services and programming. Beginning in 2024, Parks & Rec will be leading a community process oriented toward redesigning Harvey West Park. This will include a chance to re-envision the future of Harvey West Pool and the park as a whole. We look forward to this community process.

Sincere thanks,
Tony Elliot
Director
City of Santa Cruz | Parks & Recreation Department
323 Church St., Santa Cruz, CA 95060
Phone: 831-420-5270
Email: [email protected]
Web: www.cityofsantacruz.com
From: Judi Grunstra <[email protected]>
Sent: Saturday, October 21, 2023 6:58 PM
To: City Council <[email protected]>
Cc: Tony Elliot <[email protected]>
Subject: Oct 24 meeting_Consent Agenda #11
Dear Council:

Despite a great need to invest in Harvey West Pool, which remains inaccessible to the community, for the most part, the city continues to invest in the DelaVeaga Golf Course.

11.21 City Council

AGENDA REPORT
DATE: 10/05/2023
AGENDA OF: 10/24/2023
DEPARTMENT: Planning and Community Development
SUBJECT: Award Agreement for Fee Study for the Departments of Public Works, Parks and Recreation, Economic Development and Housing, Fire, Finance, City Manager’s Office, and Planning and Community Development (PL) RECOMMENDATION: Motion to:
1) Award agreement for citywide Fee Study to MGT of America Consulting, LLC (MGT) in the amount of $139,874; and
2) Authorize the City Manager, or designee, to execute the agreement and any amendments within the approved operating budget and authorized amendments budget, in a form approved by the City Attorney.

BACKGROUND: In 2017, the City completed phase one of a comprehensive analysis of its service fees. The analysis focused on direct fees whose increases would not significantly impact costs to the community. Phases two and three, which are intended to be covered with this Council action, include updates to the Building and Safety Division of the Planning and Community Development Department, as well as Parks and Recreation Department fees. Several other departments have also been included with this study, consistent with the Citywide Strategic Plan (2023-2028) goal of attaining fiscal sustainability.

California Propositions 13, 218, and 26 have placed both substantive and procedural limits on the City’s ability to impose fees and charges. Collectively, these constitutional amendments protect citizens from taxes imposed without a vote. Proposition 26 contains a more general articulation of the cost of service principle and includes a requirement that the local government bear the burden of proof that “a levy, charge, or other exaction is not a tax, that the amount is no more than necessary to recover the reasonable costs of the government activity, and that the manner in which those costs are allocated to a payer bear a fair or reasonable relationship to the payer’s burden on, or benefits received from, the governmental activity.” To conduct an analysis that is consistent with State law, the City of Santa Cruz issued a Request for Proposal (“RFP”) to conduct a Fee Study (“Study”) on the City’s current levels of cost recovery achieved from fees and comparative survey of fees imposed by neighboring agencies for similar services. The goal of the Study is to ensure that existing fees are calibrated to capture the full, true direct and indirect costs of public services. The RFP Scope of Work included the need for a comprehensive study for:
 Cost of service analysis, segmented by category of fee and/or department,

12.1  Cost recovery evaluation, incorporating the fully burdened hourly rate(s), calculation of the costs of providing service, and the cost recovery policies of each fee category, and  Recommendation for new proposed fees for providing each service.

Departments citywide were invited to identify area(s) of study to be included in the RFP Scope of Work. Seven departments opted to participate in this RFP Fee Study:
 Planning and Community Development,
 Public Works,
 Parks and Recreation,
 Economic Development and Housing,
 Finance,
 Fire, and
 City Manager’s Office.

To ensure that the City can provide implementation that supports the City’s financial needs, staff recommends Council approve the City agreement for a Fee Study for the participating departments.

DISCUSSION: On April 21, 2023, staff issued the RFP for Fee Study, which can be found at https://www.cityofsantacruz.com/Home/Components/RFP/RFP/275/2109. The RFP was posted on the City’s website to ensure that the RFP was conducted in an open and competitive manner.

Notice of the RFP posting was also emailed to firms who specialize in that work. Proposals were due on June 15, 2023, at 5:00 PM PST, and the City received proposals from two firms by that time from MGT Consulting and GPP.

After responses were checked for completeness, the firms were evaluated by a committee comprised of staff from the departments of: Planning and Community Development, Finance, Public Works, and Parks and Recreation. Evaluation was conducted in two phases, summarized in Table 1. Phase 1 was the evaluation of the written proposal. Firms with proposals that were scored the highest were invited to the second phase of the evaluation (Oral Interviews), where firms gave a presentation and answered questions from the evaluation committee. The City conducted interviews and oral presentations with the two proposers from Phase 1 with MGT Consulting and GPP.

Table 1: Proposal Evaluation Criteria for the RFP Fee Study for Phase 1 and Phase 2 Proposal Evaluation Criteria Evaluation Phase % of Score Written Proposal Evaluation
Adherence to RFP Requirements Phase 1 5%
Firm Background Information Phase 1 10%
Firm Qualifications, Expertise, and Experience Phase 1 10% Team Qualifications, Expertise and Experience Phase 1 10% Technical Approach/Work Plan Phase 1 15%
Cost Proposal Phase 1 20%
Oral Interview Evaluation
References Phase 2 10%
Project Understanding, Plan and Approach Phase 2 10%
Quality of Presentation Phase 2 10%
100%

12.2 MGT Consulting was ranked the highest with a score of 90.90 points out of 100 total possible points and was determined to be the successful proposer. The evaluation committee determined that the successful proposer has the expertise, experience, and personnel necessary to provide the services. MGT Consulting has delivered user fee studies to governmental jurisdictions since 1974, with nearly 50 years of experience for delivering analysis and comprehensive user fee studies. The contract will expire on October 31, 2024.

HEALTH IN ALL POLICIES (HIAP): The proposed contract is consistent with the Health in All Policies pillars of equity, public health, and sustainability in that the project will promote fiscal sustainability, which will assist the City in dedicating funding towards broader equity, public health, and sustainability efforts.

FISCAL IMPACT: The total not to exceed amount for Fee Study is $139,874. The projected cost may change should departments require amendments to the contract for an updated Scope of Work. Each participating department will proportionately contribute adequate funds within their operating budget for the areas of study summarized in Table 2:

Table 2: Fiscal Impact to Operating Budget of Participating Departments in Fee Study Department Area of Study Summary
Additional Details in Scope of Work
Projected
Cost
Planning and
Community
Development
 Building Division fees
 Building Division staffing levels and operations
 Building Division developmental trends
$62,412
Public Works  All fees in City’s Master Fee Schedule, including Development Plan and Review Fee Structure,
Stormwater Plan Review Fees, and “sidewalk in lieu”
fees and “aerial undergrounding”
$18,130
Parks and
Recreation
 Excise tax on new residential developments
 Developmental trends
$20,480
Economic
Development
and Housing
 Staff time spent in negotiating or finalizing affordable housing agreements associated with compliance with
the City’s Inclusionary Housing Ordinance
 Costs associated with the annual monitoring of the
Affordability Agreement
$6,580
City Manager’s
Office –
Climate Action
 Internal surcharges to fund internal Carbon Fund to
review energy efficiency rebates
 5% muni-fleet fuel surcharge
$12,280
Fire  Marine Safety Fee
 Prevention Fee Schedule with the Special Events Permit $10,880
Finance  City’s Master Fee Schedule from 1/1/23
 Incorporate recommendations from the Long Range
Financial Plan
$9,112
$139,874
Some departments may need to request additional funding at FY 2024’s mid-year to fully capture the expected cost of participating in this RFP.

12.3 The project will ultimately assist the City in achieving a greater degree of cost recovery, so the project is expected to represent an improved fiscal condition compared to the current condition, where some costs associated with staff time are not reimbursed.

Prepared By:

Viviane Pearson
Principal Management
Analyst
Submitted By:

Lee Butler
Director of Planning and
Community Development
Approved By:

Matt Huffaker
City Manager
ATTACHMENTS:

1. RFP SUMMARY SCORE SHEET – RFP PL2317 – FEE STUDY

2. PROFESSIONAL SERVICES AGREEMENT FOR FEE STUDY

12.4 RFP SUMMARY SCORE SHEET – RFP PL2317 FEE STUDY
Firm Phase 1 Written
Evaluation
(45 Points
Total Possible)
Cost Proposal
(20 Points
Total Possible)
Phase 2 Oral
Interviews
(35 Points
Total Possible)
Total
(100 Points
Total Possible)
GPP 38.87 22.61 22.27 83.75
MGT 43.75 20.00 27.15 90.90

12.5 PROFESSIONAL SERVICES AGREEMENT WITH

MGT OF AMERICA CONSULTING, LLC

FOR FEE STUDY SERVICES
THIS AGREEMENT for professional services is made by and between the City of Santa Cruz (“City”) and MGT of America Consulting, LLC (“Consultant”) (each is referred to individually as a “Party” and collectively, as the “Parties”) as of October 30, 2023 (the “Effective Date”).

NOW, THEREFORE, in consideration of each other’s mutual promises, the Parties hereto agree as follows:

SECTION 1: SCOPE OF WORK
Consultant will furnish services as defined and described in the Scope of Work, attached hereto as Exhibit A Scope of Work and incorporated herein.

Consultant shall meet with LEE BUTLER, Director of the PLANNING AND COMMUNITY DEVELOPMENT DEPARTMENT, hereinafter called "Director", or other designated and authorized City personnel, or third parties as necessary, on all matters connected with carrying out of Consultant’s services described in Exhibit A Scope of Work. Such meetings shall be held at the request of either Party. Review and City approval of completed work shall be obtained monthly, or at other intervals as may be mutually agreed upon during the course of this Agreement. Review, approval, or acceptance of Consultant’s work by City or others shall not relieve Consultant from responsibility for errors and omissions in Consultant’s work.

Consultant is entitled to reasonably rely upon the accuracy and completeness of such data and information, and Consultant shall provide City prompt written notice of any known defects in such data and information.

The Director may authorize a staff person to serve as his or her representative. The work in progress shall be reviewed at such intervals as may be mutually agreed upon between the Parties. The City will be the sole judge of acceptable work, provided that such approval will not be unreasonably withheld or delayed.

If the work is not acceptable, City will inform Consultant of the changes or revisions necessary to secure approval.

12.6 SECTION 4: FEES AND PAYMENT
For services actually performed, the City will compensate Consultant at the rates set forth in the Fee Schedule detailed in Exhibit B and in accordance with the terms set forth therein. Payment for Consultant's services in carrying out the entire the Scope of Work shall be made within the budget limit, or limits shown, upon Exhibit B Fee Schedule. Such payment shall be considered the full compensation for all personnel, materials, supplies, and equipment used by Consultant in the Scope of Work. Markups shall not be charged for any approved sub-consultants or subcontractors.

Variations from the budget for each task which are justified by statements indicating personnel time expended and submittal of a revised budget are only allowed with prior City approval; however, in no event shall the total fee charged for the Scope of Work set forth in Exhibit A Scope of Work exceed the budget of $139,874 without advance written City authorization in the form of an amendment or change order.

Invoices shall detail the time worked by each class of employee on each task and the expenses incurred for which billing is made. Invoices shall indicate the percentage completion of each work task as identified in Exhibit A Scope of Work and the overall percentage of completion of the total required services. Unless otherwise specified in the fee schedule, payments shall be made monthly by the City within 30 days based on itemized invoices from the Consultant which list the actual costs and expenses.

All invoices shall contain the following affidavit signed by Consultant (if individual) or by a principal of Consultant’s firm (if Consultant is an entity):
"I hereby certify [or as principal of Consultant] that the charge of (Insert invoice amount) as summarized above and shown in detail on the attachments is a fair and reasonable use of public funds, is in accordance with the terms of Agreement dated (Insert Agreement Date), and has not been previously paid."
This Agreement is contingent upon the appropriation of sufficient funding by the City for the services covered by this Agreement. If funding is reduced or deleted by the City for the services covered by this Agreement, the City has the option without penalty or liability to either terminate this Agreement or to offer an amendment to this Agreement indicating the reduced amount.

SECTION 5: TRAVEL REIMBURSEMENT POLICY
The City shall not be responsible for any travel, meal, or lodging reimbursements to Consultant and/or Consultant’s employees.

SECTION 6: CHANGES IN WORK
City may negotiate changes in the Scope of Work. No changes in the Scope of Work shall be made without the written approval of City and Consultant. Any change requiring compensation in excess of the sum specified in Exhibit B shall be approved in advance in writing by the City. Only City’s authorized representative(s) is authorized to approve changes to this Agreement on behalf of City.

12.7 SECTION 7: TIME OF BEGINNING AND SCHEDULE FOR COMPLETION The term of this Agreement shall be on the effective date of this Agreement and terminating on October 30, 2024. Consultant shall begin work as specified in a written authorization (e.g. Notice to Proceed) to perform services. The written authorization to perform work shall not be issued until after this Agreement has been approved and authorized by the City.

The Work Schedule for completion of the work shall be as shown upon Exhibit C Work Schedule. In the event that major changes are ordered, the schedule for completion as stated in Exhibit C Work Schedule may be adjusted by City so as to allow Consultant a reasonable period of time within which to complete any additional work which may be required as a result of the ordered changes.

The City reserves the right to obtain the item(s) and/or services covered by this Agreement from another source during any on-going suspension of service due to the circumstances outlined above.

Consultant acknowledges that it is necessary for Consultant to complete its work on or before the completion date set forth in Exhibit C Work Schedule in order to allow the City to achieve its objectives for entering into this Agreement. The City acknowledges that, to the extent that Consultant’s performance is delayed solely by the City’s failure to provide required documentation, information or assistance to Consultant within a reasonable period of time, then Consultant’s delay will be excused and Consultant’s period of performance will be extended, by written agreement between the Parties. The Parties therefore agree that time is of the essence in the performance of this Agreement.

SECTION 8: TERMINATION
The City may terminate the Agreement for any reason by providing written notice to Consultant not less than 10 calendar days prior to an effective termination date.

The City or Consultant may terminate the Agreement for cause by providing written notice to the other party not less than 30 calendar days prior to an effective termination date.

If Consultant’s failure to perform is curable, the City shall allow Consultant to cure its failure to perform within 15 business days (or longer period authorized in writing by the City) from the date of the City’s termination notice. The termination shall be become effective if Consultant has not cured within the specified time period to the City’s satisfaction.

Consultant may terminate this Agreement for cause if the City fails to cure a material default in performance within a period of 30 calendar days (or such longer period agreed to by the Consultant), from date of the Consultant’s written termination notice specifying the default in performance.

12.8 not relieve the Consultant of any liability to City for additional costs, expenses, or damages sustained by City due to failure of the Consultant to perform pursuant to the Agreement. City may withhold any payments to Consultant for the purpose of setoff until such time as the exact amount of damages due City from Consultant is determined. After the effective date of termination, Consultant will have no further claims against the City under the Agreement. No other compensation will be payable for anticipated profit on unperformed services.

SECTION 11: EQUAL EMPLOYMENT OPPORTUNITY/NON-DISCRIMINATION POLICIES City’s policies promote a working environment free from abusive conduct, discrimination, harassment, and retaliation; and require equal opportunity in employment for all regardless of race, religious creed (including religious dress and grooming practices), color, national origin (including language use restrictions), ancestry, religion, disability (mental and physical), medical condition, sex, gender (including gender identity and gender expression), physical characteristics, marital status, age, sexual orientation, genetic information (including family health history and genetic test results), organizational affiliation, and military or veteran status, or any other consideration made unlawful by local, State or Federal law. City requires Consultant to comply with all applicable Federal and State and local equal employment opportunity laws and regulations, and Consultant is responsible for ensuring that effective policies and procedures concerning the prevention of abusive conduct, discrimination, harassment, and retaliation exist in Consultant’s business organization. The City’s current Equal Employment Opportunity and NonDiscrimination policies to which this Section applies may be viewed at http://www.codepublishing.com/CA/SantaCruz/?SantaCruz09/SantaCruz0983.html and http://www.cityofsantacruz.com/home/showdocument?id=59192.

12.9 SECTION 12: LEGAL ACTION/ATTORNEYS’ FEES
If any action at law or in equity is brought to enforce or interpret the provisions of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees in addition to any other relief. The laws of the State of California, with jurisdiction in the Santa Cruz County Superior Court, shall govern all matters relating to the validity, interpretation, and effect of this Agreement and any authorized or alleged changes, the performance of any of its terms, as well as the rights and obligations of Consultant and the City.

SECTION 13: AMENDMENTS
This Agreement may not be amended in any respect except by way of a written instrument which expressly references and identifies this particular Agreement, which expressly states that its purpose is to amend this particular Agreement, and which is duly executed by the City and Consultant. Consultant acknowledges that no such amendment shall be effective until approved and authorized by the City’s authorized representative. No representative of the City is authorized to obligate the City to pay the cost or value of services beyond the scope of services set forth in Exhibit A Scope of Work. Such authority is retained solely by the City Manager, Director, or their designee. Unless expressly authorized by the City Manager or Director, Consultant’s compensation shall be limited to that set forth in Exhibit B Fee Schedule.

SECTION 14: MISCELLANEOUS PROVISIONS

Otherwise, no change in assignment by the Consultant may occur without prior written approval of the City.

2. Consultant Services Only. Consultant is employed to render professional services only and any payments made to Consultant are compensation solely for such professional services.

4. Consultant Not an Agent. Except as City may specify in writing, Consultant shall have no authority, express or implied, to act on behalf of City in any capacity whatsoever as an agent. Consultant shall have no authority, express or implied, pursuant to this Agreement to bind City to any obligation whatsoever.

Consultant shall require and verify that all subcontractors maintain insurance meeting all of the requirements stated herein, including naming the City of Santa Cruz, its officers, officials, employees, agents, and volunteers as additional insureds. Any modification to the insurance requirements for subcontractors must be agreed to by the City in writing.

12.10 6. Assignment. This Agreement shall not be assigned without first obtaining the express written consent of the Director or after approval of the City Council. Neither party may assign this Agreement unless this Agreement is amended in accordance with its terms.

7. Conflicts of Interest. Consultant agrees to comply with any and all conflict of interest laws in performing the work and services under this Agreement. Consultant covenants (on behalf of Consultant and Consultant’s employees, agents, representatives, and subcontractors) that there is no direct or indirect interest, financial or otherwise, which would conflict in any manner or degree with the performance of services required under this Agreement. Consultant acknowledges and agrees to comply with applicable provisions of conflict of interest law and regulations, including the Political Reform Act, Section 1090 of the Government Code, and the City’s conflict of interest code. Consultant will immediately advise City if Consultant learns of a conflicting financial interest of Consultant during the term of this Agreement.

8. City Property. The work, or any portion, of Consultant in performing this Agreement shall become the property of City. The Consultant may be permitted to retain copies of such work for information and reference in connection only with the provision of services for the City. All materials and work product, whether finished or unfinished, shall be delivered to City upon completion of contract services or termination of this Agreement for any reason. Consultant acknowledges and agrees that the work product shall be considered a work made for hire within the meaning of the patent and copyright laws of the United States; and Consultant agrees that all copyrights which arise from creation of project-related documents and materials pursuant to this Agreement shall be vested in the City and Consultant waives and relinquishes all claims to copyright or other intellectual property rights in favor of City. Any work product related to this Agreement shall be confidential, not to be used by the Consultant on other projects or disclosed to any third party, except by agreement in writing by the City, or except as otherwise provided herein. Consultant’s final deliverables shall comply with Section 508 (29 U.S.C.

Section 794d) accessibility requirements, as applicable.

9. Intellectual Property and Indemnity. Consultant represents to City that, to the best of Consultant’s knowledge, any Intellectual Property (including but not limited to: patent, patent application, trade secret, copyright and any applications or right to apply for registration, computer software programs or applications, tangible or intangible proprietary information, or any other intellectual property right) in connection with any services and/or products related to this Agreement does not violate or infringe upon any Intellectual Property rights of any other person or entity.

To the fullest extent permitted by law, Consultant agrees to indemnify, defend, and hold harmless City, its officials, officers, employees, and agents, from any and all claims, demands, actions, liabilities, damages, or expenses (including reasonable attorneys’ fees and costs) arising out of a claim of infringement, actual or alleged, direct or contributory, of any Intellectual Property rights in any way related to Consultant’s performance under this Agreement or to the City’s authorized intended or actual use of Consultant’s product or service under this Agreement. This provision shall survive termination or expiration of this Agreement.

12.11 10. Confidentiality.
a. Consultant shall not acquire any ownership interest in data and information (“City Data”) received by Consultant from City, which shall remain the property of the City. Certain information may be considered confidential (“Confidential Information”). Confidential Information shall mean all information or proprietary materials (in every form and media) not generally known to the public and which has been or is hereafter disclosed or made available directly or indirectly through any means of communication, either verbally or in writing, even if it has not been designated in writing as “Confidential”, to Consultant in connection with this Agreement. Unless otherwise required by law, Consultant shall not, without City’s written permission, use or disclose City Data and/or Confidential Information other than in the performance of the obligations under this Agreement.

As between Consultant and City, all City Confidential Information shall remain the property of the City. Consultant shall not acquire ownership interest in the City’s Confidential Information. b. Consultant shall be responsible for ensuring and maintaining the security and confidentiality of City Data and Confidential Information, protect against any anticipated threats or hazards to the security or integrity of City Data and Confidential Information, protect against unauthorized access to or use of City Data and Confidential Information that could result in substantial harm or inconvenience to City or any end users; and ensure the proper return and/or disposal of City Data and Confidential Information upon termination of this Agreement with notice to the City. c. Consultant shall take appropriate action to address any incident of unauthorized access to City Data and Confidential Information, including addressing and/or remedying the issue that resulted in such unauthorized access, notifying City as soon as possible of any incident of unauthorized access to City Data and Confidential Information, or any other breach in Consultant’s security that materially affects City or end users; and be responsible for ensuring compliance by its officers, employees, agents, and subcontractors with the confidentiality provisions hereof. Should confidential and/or legally protected City Data be divulged to unauthorized third parties, Consultant shall comply with all applicable federal and state laws and regulations, including but not limited to California Civil Code sections 1798.29 and 1798.82 at Consultant’s sole expense. Consultant shall not charge City for any expenses associated with Consultant’s compliance with these obligations. d. Consultant shall defend, indemnify and hold harmless City, its officials, officers, employees and agents against any claim, liability, loss, injury or damage (including attorneys’ fee and costs) arising out of, or in connection with, the unauthorized use, access, and/or disclosure of City Data and/or Confidential Information by Consultant and/or its agents, employees or sub-contractors, excepting only loss, injury or damage caused by the sole negligence or willful misconduct of the City. This provision shall survive the termination or expiration of this Agreement.

11. Consultant's Records. Consultant shall maintain accurate accounting records and other written documentation pertaining to the costs incurred relating to this Agreement for examination and audit by the City, State, or federal government, as applicable, during the period of this Agreement, and for a period of at least five years from the date of the final City payment for Consultant's services, unless otherwise stated herein. If Consultant engages a subcontractor to perform work related to this Agreement with a cost of $10,000 or more over a 12-month period, such subcontract shall contain these same requirements. This provision shall survive the termination of this Agreement.

12.12 12. California Public Records Act. City is a public agency subject to the disclosure requirements of the California Public Records Act (“CPRA”). If Consultant’s proprietary information is contained in documents or information submitted to City, and Consultant claims that such information falls within one or more CPRA exemptions, Consultant must clearly mark such information “Confidential and Proprietary,” and identify the specific lines containing the information. In the event of a request for such information, City will make best efforts to provide notice to Consultant prior to such disclosure.

If Consultant contends that any documents are exempt from the CPRA and wishes to prevent disclosure, it is required to obtain a protective order, injunctive relief or other appropriate remedy from a court of law in Santa Cruz County before the City is required to respond to the CPRA request. If Consultant fails to obtain such remedy within the time the City is required to respond to the CPRA request, City may disclose the requested information without any liability to Consultant. Consultant further agrees that it shall defend, indemnify and hold City harmless against any claim, action or litigation (including but not limited to all judgments, costs, and attorney’s fees) that may result from denial by City of a CPRA request for information arising from any representation, or any action (or inaction), by the Consultant.

14. Licensure. Consultant agrees that Consultant, its subcontractors and/or agents (if any) has/have complied with all applicable federal, state, and local licensing requirements and agrees to provide proof of a current City of Santa Cruz Business Tax Certificate if:
• Consultant, its subcontractor(s) and agent(s) or its business is/are located in the City of Santa Cruz;
• Will perform actual work in the City of Santa Cruz for 6 or more days annually; or • Will use company vehicles to deliver within the City of Santa Cruz for 6 or more days annually.

For additional information and licensing requirements, view the City’s Business Licenses and Permits webpage or call the Revenue and Taxation division at 831/420-5070.

12.13 wage rate and the amount actually paid for each calendar day (or portion thereof) for which the worker(s) was paid less than the prevailing wage rate, as specified in Labor Code section 1775; b. Consultant shall maintain and make available payroll and worker records in accordance with Labor Code sections 1776 and 1812;
c. If Consultant employs (and/or is legally required to employ) apprentices in performing the work and/or services under this Agreement, Consultant shall ensure compliance with Labor Code section 1777.5;
d. Consultant is aware of the limitations imposed on overtime work by Labor Code sections 1810 et seq. and shall be responsible for any penalties levied in accordance with Labor Code section 1813 for failing to pay required overtime wages;
e. Consultant shall post a copy of the applicable wage rates at each jobsite at a location readily available to its workers.
f. Any failure of Consultant and/or its subconsultant to comply with the above requirements relating to a public work project shall constitute a breach of this Agreement that excuses the City’s performance of this Agreement at the City’s sole and absolute option and shall be at the sole risk of Consultant. Consultant on behalf of itself and any subconsultant, agree to indemnify, defend and hold harmless the City and its officials, officers, employees, and agents from and against any and all claims, liabilities, losses, costs, expenses, attorney’s fees, damages, expenses, fines, financial consequences, interest, and penalties, of any kind or nature, arising from or relating to any failure (or alleged failure) of the Consultant and any subconsultant to pay prevailing wages or to otherwise comply with the requirements of prevailing wage law relating to a public work.
g. Consultant acknowledges that it and/or any subconsultant may not engage in the performance of any contract for public work unless currently registered with the DIR and qualified to perform public work pursuant to Labor Code section 1725.5 [with limited exceptions from this requirement for bid purposes only under Labor Code section 1771.1(a)].

17. Storm Water Requirements. To the extent applicable to the Scope of Work under this Agreement, Consultant, Consultant’s employees, subcontractors, and agents are required to abide by the applicable City of Santa Cruz Storm Water Best Management Practices (BMPs) for the duration of the work. The City’s mandatory Storm Water BMPs, which are listed according to the type of work, operations, or business, are located on the City website at: https://www.cityofsantacruz.com/government/citydepartments/public- works/stormwater/best-management-practices

18. Dispute Resolution. The Parties agree to attempt in good faith to resolve through negotiation any dispute, claim or controversy arising out of or relating to this Agreement. Either party may initiate negotiations by providing written notice in letter form to the other party, setting forth the subject of the dispute and the relief requested. Promptly upon such notification, the Parties shall meet at a mutually agreeable time and place in order to exchange relevant information and perspective, and to attempt to resolve the dispute. In the event that no resolution is achieved, and if, but only if, the parties mutually agree, then prior to pursuing formal legal action, the parties shall make a good faith effort to resolve the dispute by non-binding mediation or negotiations between representatives with decision-making power, who, to the extent possible, shall not have had substantive involvement in the matters of the dispute. To the extent that the dispute involves or relates to a public works project, the Parties agree to attempt to resolve the dispute by complying with the claims process as set forth in Public Contract Code sections 9204(e), 20104-20104.6, but without waiving the requirements of the California Tort Claims Act, Gov’t Code section 800 et seq. unless otherwise agreed to by the Parties.

12.14 19. Force Majeure. Neither party hereto shall be considered in default in the performance of its obligation hereunder to the extent that the performance of any such obligation is prevented or delayed by an act of God, natural disaster, pandemic, acts of terrorism, war, a strike, lockout or other labor difficulty, or other peril, which is beyond the reasonable control of the affected party and without the negligence of the respective Parties. Each party hereto shall give notice promptly to the other of the nature and extent of any Force Majeure claimed to delay, hinder or prevent performance of the services under this Agreement. Each Party will, however, make all reasonable efforts to remove or eliminate such a cause of delay or default and will, upon the cessation of the cause, diligently pursue performance of its obligations in this Agreement. In the event either party is prevented or delayed in the performance of its respective obligation by reason of such Force Majeure, there may be an equitable adjustment of the schedule based on City’s sole discretion.

20. Complete Agreement. This Agreement, along with any exhibits and attachments, is the full and complete integration of the Parties’ agreement with respect to the matters addressed herein, and that this Agreement supersedes any previous written or oral agreements between the Parties with respect to the matters addressed herein. Unless otherwise stated, to the extent there is any conflict between this Agreement and any other agreement (written or oral), the terms of this Agreement shall control.

21. Severability. The unenforceability, invalidity or illegality of any provision(s) of this Agreement shall not render the other provisions unenforceable, invalid or illegal.

22. Waiver. Waiver by any party of any portion of this Agreement shall not constitute a waiver of the same or any other portion hereof.

23. Governing Law. This Agreement shall be governed by and interpreted in accordance with California law.

26. Notices. If either party shall desire or is required to give notice to the other such notice shall be given in writing, via email and concurrently delivered by: (a) personal delivery, in which case notice is effective upon delivery; (b) overnight courier (i.e. Federal Express), with charges prepaid or charged to the sender’s account, in which case notice is effective when delivered; (c) priority U.S. Mail, in which case notice shall be deemed delivered on the second business day after the deposit thereof with the U.S. Postal Service. Notices shall be addressed to recipient as follows:

To CITY:

Planning and Community Development Department
Viviane Pearson
809 Center Street, Room 101
Santa Cruz, CA 95060
Email: [email protected]
Phone: 831-420-5245
To CONSULTANT:

MGT of America Consulting, LLC
Contracts/Legal Notice
4320 W. Kennedy Blvd. Tampa, FL 33609
Email: [email protected] and
[email protected]
Phone: 916-443-3411

12.15 Changes to the above information shall be given to the other party in writing ten (10) business days before the change is effective.

12.16 Approved As To Form:

By: _______________________________________________ Date: ______________________ Stephanie Hall, Office of the City Attorney

CONSULTANT
By: _______________________________________________ Date: ______________________ Printed: ___________________________________________ Title: ______________________

CITY OF SANTA CRUZ
By: _______________________________________________ Date: ______________________ Matt Huffaker, City Manager’s Office
Signature Requirements for Business Entity:
a. Corporation – 2 officer signatures required (one from each group, unless person signing holds officer positions in both Group 1 and 2):
• Group 1: Chief Executive Officer, Chairman of the Board, President, or Vice President • Group 2: Secretary, Assistant Secretary, Chief Financial Officer, Treasurer, Assistant Treasurer b. Partnership – Signature of General Partner, or signature of partner who is authorized to execute documents per the Certificate of Partnership. If authorized partner is a corporation, follow Corporation signature requirement.
c. LLC – For a member-managed LLC, signature of any member. For a manager-managed LLC, signature of the manager. If the LLC has corporate officer designations, follow Corporation signature requirement. 10/05/23

12.17 EXHIBIT A: SCOPE OF WORK
The qualified firm shall provide analysis regarding to each category/department:
• Cost of service analysis, segmented by category of fee and/or department; • Cost recovery evaluation, incorporating the fully-burdened hourly rate(s), calculation of the costs of providing service, and the cost recovery policies of each fee category; and • Recommendation for new proposed fees for providing each service.

The work should, at a minimum, include the following:

Planning and Community Development Department – Building Division Task 1 – Description
The firm shall complete an analysis for the Building Division of the Planning and Community Development Department. The Building Division administers state and local building codes that safeguard life, health, and safety of our community. This is accomplished through the issuance of permits, including plan review and inspections. The scope of the fee analysis for the Building Division focuses on:
• Compare the Division’s current fees with other local and similarly sized jurisdictions in the Master Fee Schedule;
• Evaluate all existing fees for all building permitting services, including determining an average hourly billing rate for staff and calculating a fee that will cover actual costs such as staff salaries and overhead administrative costs;
• Review the Division’s historical costs associated with issuing building fees in comparison to the actual building fees collected for the last three years; • Update Building Permit Valuation standards or alternative method; • Review current development trends, population projections and cost of living inflation factors within the City, Building and land cost increases due to current development trends and complexity of new construction techniques; changes in local (e.g., green building), State, and federal regulatory requirements, and new legal mandates requiring additional permit documentation; and • Provide an analysis of current staffing levels and current operations and forecast for future needs as well as provide recommendations for improving processes.

Currently, fees are set according to staff time needed to review applications/complete inspections plus the overhead costs of administration, supplies and other technical support. An optimal fee schedule will allow the Division to collect permit application processing fees that offset its actual project review and inspection costs.

Task 1 – Deliverables: Report, Project implementation Plan, Communication Plan, Presentation to Commissions and City Council.

Task 1 – Timing: All tasks shall be completed to the City’s satisfaction and deliverables turned over to City staff 12 months after contract execution.

12.18 Public Works Department
Task 2 – Description: The firm shall complete an analysis for the Public Works Department. The Public Works Department provides the City with engineering design, traffic engineering and maintenance, storm water management, street maintenance, resource recover management, waste reduction programs, wastewater management, flood control, and parking control services. The scope of the fee analysis for the Public Works Department focuses on:
• Review and study of all fees contained in the City’s 1/1/2023 Master Fee Schedule (MFS) for Operation “PW-Engineering.” Public Works’ MFS fees are for services including Street Opening Permits; Maps, Prints and Copies; Subdivision Fees; Development Plan Review and Inspection; On-Site or Off-Site Public Improvements Inspection; Stormwater Plan Review; Encroachment Permits; Small Cell Wireless Facilities; and Hourly Rate with Overhead. The scope of the fee analysis for the Public Works Department focuses on:
• Review how Development Plan and Review Fee Structure are calculated in order to fully capture staff time. Review and analyze how other local and similarly sized cities Public Works Departments structure their Development Plan and Review fees, and how those fees relate to and are correlated with Planning Department development fees. Provide recommended fee updates. • Review Stormwater Plan Review Fees and analyze how other local/similarly sized cities structure and calculate their Stormwater Plan Review fees. Provide recommended fee updates. • Review and analyze “sidewalk in lieu” fees and “aerial undergrounding” fees from other local/similarly sized cities and provide recommended fee values for the MFS.

Task 2 – Deliverables: Report, Project implementation Plan, Communication Plan, Presentation to Commissions and City Council.

Task 2 – Timing: All tasks shall be completed to the City’s satisfaction and deliverables turned over to City staff 12 months after contract execution.

Parks and Recreation Department
Task 3 – Description: The firm shall complete an analysis for the Parks and Recreation Department. The Parks and Recreation Department provides recreational and cultural opportunities to help foster a healthy community and better the environment. The scope of the fee analysis for the Parks and Recreation Department focuses on:
• Analysis on an excise tax on new residential developments, for the purpose of raising revenue for the acquisition, improvement and expansion of public parks, playgrounds, and recreational facilities in the City (SCMC 5.72). Similarly, the Department also requires land dedication, in lieu fees, or both in the case of parcel subdivision (SCMC 23.28);
• Compare Santa Cruz’s current Excise Tax and In Lieu Fees and other fees within the purview of the Parks and Recreation Department with other similarly sized/local jurisdictions; • Assess how other similarly sized/local jurisdiction’s fees have changed in response to affordable housing legislation (e.g. Cal. Gov. Code § 65852.2(f)(3)(A) waives fees on Accessory Dwelling Units 750 square feet and lower) and in response to updates to Cal. Gov. Code § 66477, the Quimby Act; • Provide a summary of methodologies and approaches to developing fees and provide a recommendation for fee approach based on needs and land-use characteristics; • Evaluate the current quadrants associated with SCMC 5.72 fees considering the City’s movement to new Council Districts, future land-use development areas, and overall park needs and propose any recommended adjustments (e.g. some quadrants are comprised of areas with greater park needs but with less potential for redevelopment, such as the Lower Westside); • Provide staff guidance on the types of maintenance projects that can be funded with the fees; • Provide recommended updates to the existing fee schedules for both SCMC 5.72 and 23.28 using the information above; and

12.19 • Review current development trends, population projections and cost of living inflation factors, estimate the revenue potential for the next five years from SCMC Chapters 5.72 and 23.28 under the existing fee schedule and recommended fee approach.

Task 3 – Deliverables: Report, Project implementation Plan, Communication Plan, Presentation to Commissions and City Council.

Task 3 – Timing: All tasks shall be completed to the City’s satisfaction and deliverables turned over to City staff 12 months after contract execution.

Office of Economic Development
Task 4 – Description: The firm shall complete an analysis for the Office of Economic Development. The Office of Economic Development assists new businesses set up shop in the City, navigate the City’s permitting process, and support the local economy. The scope of the fee analysis for the Office of Economic Development focuses on:
• Analyze fees associated with the staff time spends in negotiating or finalizing affordable housing agreements associated with compliance with the City’s Inclusionary Housing Ordinance; and • Evaluate the costs associated with the annual monitoring of the Affordability Agreement.

Task 4 – Deliverables: Report, Project implementation Plan, Communication Plan, Presentation to Commissions and City Council.

Task 4 – Timing: All tasks shall be completed to the City’s satisfaction and deliverables turned over to City staff 12 months after contract execution.

City Manager’s Office – Climate Action Plan
Task 5 – Description: The firm shall complete an analysis for the City Manager’s Office Climate Action Plan. The City Manager’s Office Climate Action Plan strives to reduce community-wide greenhouse gas emissions 30% by 2020. The scope of the fee study analysis for the City Manager’s Office – Climate Action Plan focuses on:
• Review internal surcharges to fund internal Carbon Fund to review energy efficiency rebates; • Review the 5% muni-fleet fuel surcharge is directed to fund, assessed across all departments depending on their diesel and gas usage (based on 2016 volumes). This fund has had diminishing revenues due to elimination of rebates and City's process in retrofitting.

Task 5 – Deliverables: Report, Project implementation Plan, Communication Plan, Presentation to Commissions and City Council.

Task 5 – Timing: All tasks shall be completed to the City’s satisfaction and deliverables turned over to City staff 12 months after contract.

12.20 Fire Department
Task 6 – Description: The firm shall complete an analysis for the Fire Department. The Fire Department provides public safety for the community through emergency services including structure fire suppression, wildland fire suppression, and emergency medical services. The scope of the fee study analysis for the Fire Department focuses on:
• Review of the Marine Safety Fee; and
• Review of the Prevention Fee Schedule with the Special Events Permit Task 6 – Deliverables: Report, Project implementation Plan, Communication Plan, Presentation to Commissions and City Council.

Task 6 – Timing: All tasks shall be completed to the City’s satisfaction and deliverables turned over to City staff 12 months after contract.

Study Analysis and Development
Task 7 – Description: The Proposer shall meet with Department Directors, Department Managers, and City Staff members to collect and review available information and review the methodology to be used in the development of the recommended rate structures for the different permits and fees. The Proposer will meet periodically remotely or on-site as needed, with the Department Directors and Department Managers to discuss issues, concerns, preliminary findings and recommendations.

Task 7 – Deliverables: Report, Project implementation Plan, Communication Plan, Presentation to Commissions and City Council.

Task 7 – Timing: The firm will provide regular updates, in writing or orally, and as directed by Viviane Pearson to the City regarding process on the analyses and recommendations and request any additional information or direct need to complete the project on time and within budget. The Consultant will timely respond to City communications. All tasks shall be completed to the City’s satisfaction and deliverables turned over to City staff 12 months after contract execution.

Prepare Draft and Final Study
Task 8 – Description: The firm shall prepare the draft and final Study containing background information, methodology, findings, and recommendations.
• The Consultant should recommend fee structures that will generate revenue needs and capture the staff and consultant costs to process City permits and fees. • The fee structures should include a comparative analysis for nearby like-sized jurisdictions. After staff review and comment, the Consultant should prepare a final Fee Study summarizing the recommended fee update.
• Prior to issuing their final Study, the Consultant will meet with the City Manager (as needed), Department Directors, and Department Managers to review the draft Study and recommendations to be presented to the City Council, and assist in the preparation of the documents to enact the proposed fees.
• Attend City Council or public meetings as needed.

Task 8 – Deliverables: Report, Project implementation Plan, Draft Study Communication Plan, Presentation to Commission and City Council, Final Study and Recommendations.

Task 8 – Timing: All tasks shall be completed to the City’s satisfaction and deliverables turned over to City staff 12 months after contract execution.

12.21 Supplemental: Update to the City’ s Master Fee Schedule and Inclusion of the Long Range Financial Plan
Task 9 – Description: The firm will complete an analysis of the City’s Master Fee Schedule from 1/1/2023. The last master fee study analysis was conducted in 2017, and has been adjusted annually to reflect increases in the Consumer Price and Construction Cost Indices (CPI/CCI), and can be found here:
https://www.cityofsantacruz.com/government/city-departments/finance/licenses-fees-and-taxes. The firm will also incorporate recommendations from the Long Range Financial Plan for the City from its development of a plan towards fiscal sustainability and involves assessing the financial status of various operating and capital funds, and creating a baseline forecast based on accurate data, reasonable assumptions, and analysis.

Exclusions
Excluded from this specification are all items purchased separately on other City contracts. The City also reserves the right to bid separately any item or items where it is determined by the Purchasing Manager that a substantial savings in cost will result due to a large quantity purchase, of the service is not appropriately classified under this specified contract.

12.22 PROJECT DELIVERABLES – FEE STUDY
• A narrative report of findings and presentation slides • A detailed report displaying all elements of costs for each fee analyzed • Customized Excel workbooks providing fully burdened hourly rates, and cost‐of‐service calculations OVERVIEW OF PHASES AND TASKS 1-6
TASK 1.0 – PROJECT MANAGEMENT TASKS (RFP TASKS 1-6)

1.1 Arrange interview schedules and request data

1.2 Kickoff meeting (online)
• Confirmation of scope and project purpose
• Acceptance criteria for deliverables
• Status reporting and correspondence protocols
• Issue escalation protocol
• Confirm baseline work plan and deliverables
• Confirm project change order protocol
• Confirm quality control process
TASK 2.0 – USER FEE DESIGN (RFP TASKS 1-6)

2.1 Discuss project design with City staff (which fees to review, which to consolidate, and new ones to consider)

2.2 Develop first draft of project design memo

2.3 City to edit draft

2.4 Revise draft to reflect comments

2.5 Confirm project design before model building commences

2.6 Populate approved model structure with cost data
TASK 3.0 – USER FEE ANALYSIS (RFP TASKS 1-6)

3.1 Interview selected staff to gain understanding of service delivery by fee type

3.2 Develop fully burdened hourly rate for department. Use indirect cost rate if City has one, or 10% rate if not.

3.3 Review fixed price fee template with City

3.4 City to complete fixed price fee template

3.5 Develop first draft

3.6 Present first draft in online meeting

3.7 City reviews draft and provides comments

3.8 Revise drafts to incorporate City comments

3.9 Present findings online to City's management group

3.10 City reviews draft and provides comments

12.23 TASK 4.0 – PEER PRICE COMPARISON (TASK 7)

4.1 Identify peers and most common permit types to compare

4.2 Harvest data from peer websites and follow‐up calls to clarify

4.3 Present first draft in online meeting

4.4 Revise comparisons per City comments

4.5 Present second draft

4.6 Develop narrative summary of comparisons for final report TASK 5.0 – PRESENTATION (RFP TASKS 7 & 8)

5.1 Prepare a narrative report on purpose, method, and findings

5.2 City to review draft presentation documents and provide comments

5.3 Finalize report documents based on comments

5.4 Develop slide deck for online presentation to City, or for City to use in internal discussion

5.5 Edit slide deck

5.6 Submit all final deliverables and provide training to update the model

5.7 Deliver presentation
ADDITIONAL TASKS 9 - 10
TASK 6.0 – BUILDING DIVISION ORGANIZATIONAL REVIEW (RFP TASK 9)

6.1 Project Management Tasks

6.2 Interviews & Follow Up Calls

6.3 Review Timeliness and Service Levels

6.4 Define Staffing Needs

6.5 Explore Use of Technology for Support of Service Delivery

6.6 Review Organization Structure Alignment with Areas of Focus

6.7 Report and Presentation
TASK 7.0 – PW ENGINEERING IN-LIEU RECALCULATION (RFP PRICING TASK 10)

7.1 Collect data that supports prior and new calculations.

7.2 Interview staff responsible for the in‐lieu fee

7.3 Review capital requirements and applicable engineers' reports related to in‐lieu fee

7.4 Revise/update fee calculation and/or assumptions

7.5 Present updated calculations to staff

7.6 Recommendations on a strategy for new fee or recommendation to City Council.

TASK 8.0 – PARKS IN-LIEU RECALCULATION (RFP PRICING TASK 11)

8.1 Collect data that supports prior and new calculations.

8.2 Interview staff responsible for the in‐lieu fee

8.3 Review capital requirements and applicable engineers' reports related to in‐lieu fee

8.4 Revise/update fee calculation and/or assumptions

8.5 Present updated calculations to staff

8.6 Recommendations on a strategy for new fee or recommendation to City Council.

TASK 9.0 – CLIMATE ACTION SURCHARGE (RFP PRICING TASK 12)

9.1 Review and make recommendations on the City’s internal Climate Action Surcharge. MGT will review the calculations, update as necessary and make recommendations on the structure and methods to charge for the CAS.

12.24 TASK 10.0 – UPDATE TO CITY’S MASTER FEE SCHEDULE (MFS) & CITY’S LONG RANGE FINANCIAL PLAN (LRFP) (RFP TASK 9)

10.1 Assist city as requested to update Master Fee Schedule and LRFP documents. This task is approximately 40 hours of MGT staff time and would focus on incorporating updated/recommended fee changes into two existing city documents.

TASK 11.0 – OTHER MISCELLANEOUS SERVICES

11.1 Assist the City with mutually agreed upon addition of work and associated costs related to the Scope of Work.

12.25 EXHIBIT B: FEE SCHEDULE
Key Personnel Fully Burdened Rate
Proposed
Personnel
Position Title Direct Labor
Rate
(Based on a
normal 8-hour,
40 hours per
week schedule
Indirect
Labor
Costs
Professio
nal Fee
(Profit)
Other
Direct
Costs
(ODC)
Fully
Burdened
Hourly
Rate
Patrick Dyer Proj Executive $ 85 $ 85 $ 21 $ 17 $ 208
Cindy Sconce Proj Director $ 75 $ 75 $ 19 $ 15 $ 184
Jamie Radcliff Proj Manager $ 55 $ 55 $ 14 $ 11 $ 135
Ruben Rivas Development
SME $ 50 $ 50 $ 25 $ 10 $ 135
Rachel King Data Analyst $ 40 $ 40 $ 20 $ 8 $ 108
Georgia Borison Consultant $ 45 $ 45 $ 23 $ 9 $ 122
Total Cost Summary
Breakdown Cost
Cost Proposal for Tasks 1-8 $100,110
Supplemental Cost Proposal for Task 9 $6,432
Other Expenses $33,332
Total Cost $139,874
A. Cost for Scope of Services: Tasks 1-8
Cost Proposal by Tasks 1-8
Total Evaluated Cost for Task 1
Planning and Community Development Department –
Building Division
$39,900
Total Evaluated Cost for Task 2
Public Works Department $11,550
Total Evaluated Cost for Task 3
Parks and Recreation Department $13,900
Total Evaluated Cost for Task 4
Office of Economic Development $3,900
Total Evaluated Cost for Task 5
City Manager’s Office – Climate Action Plan $3,900
Total Evaluated Cost for Task 6
Fire Department $8,200
Total Evaluated Cost for Task 7
Study Analysis and Development $8,040
Total Evaluated Cost for Task 8
Prepare Draft and Final Study
$10,720
Total Evaluated Cost for Task 1-8: $100,110

12.26 B. Cost for Scope of Services – Supplemental: Task 9 Supplemental Services Cost Proposal by Task 9
Total Evaluated Cost for Task 9:

Supplemental: Update to the City’ s Master Fee Schedule and Inclusion of the Long Range Financial Plan
$ 6,432
C. Other Expenses (Itemized)
Item(s) Description Cost
10 Bldg Mgmt Org Review & Recommendations $19,832
11 PW Engineering In-Lieu Recalculation $3,900
12 Parks In-Lieu Recalculation $3,900
13 Climate Action Surcharge Analysis $5,700
Total Cost $33,332

12.27 EXHIBIT C: WORK SCHEDULE

PROJECT SCHEDULE PLAN
Task Subtask Description
Month
Nov.
2023
Dec.
2023
Jan.
2024
Feb.
2024
March
2024
April
2024

1.0 Project Management Tasks

1.1 Arrange interview
schedules and request data

1.2 Kickoff meeting (online)
Confirmation of scope
and project purpose
Acceptance criteria for
deliverables
Status reporting and
correspondence protocols
Issue escalation protocol
Confirm baseline work
plan and deliverables
Confirm project change
order protocol
Confirm quality control
process

2.0 User Fee Design

2.1 Discuss project design
with City staff (which
fees to review, which to
consolidate, and new ones
to consider)

2.2 Develop first draft of
project design memo

2.3 City to edit draft

2.4 Revise draft to reflect
comments

2.5 Confirm project design

2.6 Populate approved model
structure with cost data

12.28 3.0 User Fee Analysis

3.1 Interview selected staff to
gain understanding of
service delivery by fee
type

3.2 Develop fully burdened
hourly rate for
department. Use indirect
cost rate if City has one,
or 10% rate if not.

3.3 Review fixed price fee
template with City

3.4 City to complete fixed
price fee template

3.5 Develop first draft

3.6 Present first draft in
online meeting

3.7 City reviews draft and
provides comments

3.8 Revise drafts to
incorporate City
comments

3.9 Present findings online to
City’s management group

3.10 City reviews draft and
provides comments

3.11 Revise drafts to
incorporate City
comments

3.12 City to approve report

3.13 Status report calls at ends
of months 1, 2, and 3

12.29 4.0 Peer Price Comparisons

4.1 Identify peers and most
common permit types to
compare

4.2 Harvest data from peer
websites and follow-up
calls to clarify

4.3 Present first draft in
online meeting

4.4 Revise comparisons per
City comments

4.5 Present second draft

4.6 Develop narrative
summary of comparisons
for final report

5.0 Presentation

5.1 Prepare a narrative report
on purpose, method, and
findings

5.2 City to review draft
presentation documents
and provide comments

5.3 Finalize report documents
based on comments

5.4 Develop slide deck for
online presentation to
City, or for City to use in
internal discussion

5.5 Edit slide deck

5.6 Submit all final
deliverables and provide
training to update the
model

5.7 Deliver presentation

12.30 EXHIBIT D: INSURANCE REQUIREMENTS
Consultant shall procure and maintain insurance against claims for injuries to persons or damages to property and otherwise which may arise from or in connection with the performance of the work under this Agreement and the results of that work by Consultant, its agents, representatives, employees, or subcontractors.

A. CERTIFICATE REQUIREMENTS
The City will be issued a Certificate of Insurance (a Memorandum of Understanding will not be accepted) with the following minimum requirements:
• Certificate(s) will show current policy number(s) and effective dates, • Coverage and policy limits will meet, or exceed, requirements below, • The Certificate Holder will be City of Santa Cruz, Risk Management, 1200 Pacific Ave, Suite 290, Santa Cruz, CA 95060,
• Certificate will be signed by an authorized representative, • An endorsement, if required below, will be provided to show the City, its officers, officials, employees, and volunteers as additional insureds, and
• Coverages must be maintained during the term of the Agreement with the City, unless a longer duration is required as specified below.

B. MINIMUM SCOPE AND LIMITS OF INSURANCE
Consultant acknowledges that the insurance coverage and policy limits set forth in this section constitute the minimum amount of coverage required. If Consultant maintains broader insurance coverage and/or higher limits than the minimums shown below, the City of Santa Cruz requires and shall be entitled to the broader insurance coverage and/or higher limits maintained by Consultant. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City of Santa Cruz.

Coverage will be at least as broad as:
• COMMERCIAL GENERAL LIABILITY (CGL): $1,000,000 PER OCCURRENCE; $2,000,000 AGGREGATE: Proof of coverage for $1 Million per occurrence and $2 Million in the aggregate including products and completed operations, property damage, bodily injury, personal and advertising injury will be provided on Insurance Services Office (ISO) Form CG 00 01 covering CGL.
• PROFESSIONAL LIABILITY (ERRORS AND OMISSIONS): $1,000,000 PER OCCURRENCE OR CLAIM,$2,000,000 AGGREGATE. Consultant will maintain insurance appropriate to Consultant’s profession; with limit no less than$1,000,000 per occurrence or claim, $2,000,000 aggregate.

Insurance must be maintained, and evidence of insurance must be provided for at least five (5) years after date of completion of the services under this Agreement. If coverage is canceled or non-renewed and not replaced with another claims-made policy form with a Retroactive Date prior to the contract effective date or start of work date, Consultant must purchase “extended reporting” coverage for a minimum of five (5) years after completion of the contract of work. • AUTOMOBILE LIABILITY: Proof of coverage for $1,000,000 provided on ISO Form Number CA 00 01 covering any auto(Code 1), or if Consultant has no owned autos, hired, (Code 8) and nonowned autos (Code 9), per accident for bodily injury and property damage.

12.31 • WORKERS’ COMPENSATION AS REQUIRED BY THE STATE OF CALIFORNIA, WITH STATUTORY LIMITS, AND EMPLOYER’S LIABILITY INSURANCE: $1,000,000 per accident for bodily injury or disease. The Worker’s Compensation policy must be endorsed with a waiver of subrogation in favor of the City for all work performed by the Consultant and its employees. If Consultant has no employees, Consultant shall complete and sign a Workers’ Compensation Exemption Declaration and Release of Liability.

C. OTHER INSURANCE PROVISIONS
The insurance policies are to comply with the following provisions:
• ADDITIONAL INSURED STATUS: The City, its officers, officials, employees, and volunteers are to be covered as additional insureds on the CGL policy with respect to liability arising out of work or operations performed by or on behalf of Consultant including materials, parts, or equipment furnished in connection with such work or operations. General liability coverage will be provided in the form of an endorsement to Consultant’s insurance at least as broad as ISO Form CG 20 10 11 85, or if not available, through the addition of both CG 20 10 CG 20 26, CG 20 33, or CG 20 38; and CG 20 37 (if a later edition is used).
• PRIMARY COVERAGE: For any claims related to this Agreement, Consultant’s insurance coverage will be primary insurance as respects the City, its officers, officials, employees, agents, and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, agents, or volunteers will be excess of Consultant’s insurance and will not contribute with it.
• NOTICE OF CANCELLATION: Each insurance policy required above shall state that the coverage shall not be canceled, except with notice to the City.
• WAIVER OF SUBROGATION: Consultant shall agree to grant to the City a waiver of any right to subrogation, except as otherwise not applicable, which any insurer of said Consultant and its subcontractor(s) may acquire against the City by virtue of the payment of any loss, including attorney’s fees under such insurance. Consultant and its subcontractor(s) shall agree to obtain any endorsement that may be necessary to effectuate this waiver of subrogation, but this provision applies regardless of whether or not the City has received a waiver of subrogation endorsement from the insurer.
• EXCESS LIABILITY/UMBRELLA INSURANCE POLICIES: Consultant may use excess liability/umbrella policies to meet the required liability limits on the condition that they provide all of the insurance coverages required herein , including, but not limited to, primary and noncontributory, additional insured, Self-Insured Retentions (SIRs), indemnity, and defense requirements. The excess liability/umbrella insurance policies shall be provided on a true “following form” or broader coverage basis, with coverage at least as broad as provided on the underlying CGL insurance. No insurance policies maintained by the Additional Insureds, whether primary or excess, and which also apply to a loss covered hereunder, shall be called upon to contribute to a loss until the Consultant’s primary and excess liability policies are exhausted. • DURATION OF COVERAGE: CGL & Excess Liability/Umbrella policies for any construction related work, including, but not limited to, maintenance, service, or repair work, shall continue coverage for a minimum of 5 years for Completed Operations liability coverage. Such insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of the contract of work.

12.32 • SELF-INSURED RETENTIONS (SIR): Self-insured retentions must be declared to and approved by the City. City may require Consultant to purchase coverage with a lower retention or provide proof of ability to pay losses and related expenses. The policy language shall provide, or be endorsed to provide, that the self-insured retention may be satisfied by either the named insured or City.
• ACCEPTABILITY OF INSURERS: Insurance is to be placed with insurers with a current A.M. Best’s rating of no less than A: VII, unless otherwise acceptable to the City. • CLAIMS MADE POLICIES: If any of the required policies provide coverage on a claims-made basis:

1. The Retroactive Date must be shown and must be before the date of the contract or the beginning of contract work.

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

3. If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a Retroactive Date prior to the contract effective date, the Consultant must purchase “extended reporting” coverage for a minimum of five (5) years after completion of contract work.
• VERIFICATION OF COVERAGE: Consultant will furnish the City with original Certificates of Insurance including all required amendatory endorsements (or copies of the applicable policy language effecting coverage required by this clause) and a copy of the Declarations and Endorsement Page of the CGL and Excess Liability/Umbrella Policies listing all policy endorsements to be approved by the City before work commences. However, failure to obtain the required documents prior to the work beginning will not waive the Consultant’s obligation to provide them. The City reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time.

D. SUBCONTRACTORS
Consultant shall include their subcontractor(s) as additional insured(s) under the policies or shall furnish separate certificates and endorsements for each contractor and subcontractor. Consultant shall require and verify that all contractors and subcontractors maintain insurance meeting all the requirements stated herein, and Consultant shall ensure that City, its officers, officials, employees, agents, and volunteers are named as additional insureds on insurance required from its contractor(s) and subcontractor(s).

12.33 City Council

AGENDA REPORT
DATE: 10/03/2023
AGENDA OF: 10/24/2023
DEPARTMENT: Public Works
SUBJECT: Recycling Center Storm Water Quality Improvements (c402111) – Award Contract (PW)
RECOMMENDATION: Motion to accept the bid of Clear Water Services (Rodeo, CA) for providing storm water treatment system rental at the Resource Recovery Facility Recycling Center in the amount of $129,204.00. The City Manager is hereby authorized and directed to execute the contract in a form approved by the City Attorney. The Director of Public Works is authorized to execute change orders within the approved project budget.

BACKGROUND: The Resource Recovery Facility (RRF) is regulated under the State Water Resources Control Board’s Industrial Storm Water General Permit (IGP). The RRF is divided into several drainage areas for compliance monitoring purposes, one of which is the Recycling Center. The IGP requires the implementation of storm water best management practices (BMPs) to reduce or prevent pollutants in storm water to the extent feasible. In addition to various BMPs already implemented at the Recycling Center, a seasonal storm water treatment system will be rented and installed at the RRF this year to capture and treat storm water coming from the Recycling Center as part of the RRF’s continuing effort to improve the site’s storm water quality.

DISCUSSION: Clear Water Services was one of three storm water treatment companies requested to submit bids on a turn-key storm water treatment system designed to convey captured storm water through a series of tanks to improve settlement. The storm water is treated further via sand filters before its discharged back into the RRF’s storm drain system, where it flows into Lombardi Creek. Out of the three companies contacted (Clear Water Services, Clear Creek Systems, Inc., and Pacific States Environmental Contractors, Inc.), Clear Water Services submitted the most competitive bid. Staff recommends awarding the contract to the lowest and responsible bidder, Clear Water Services.

FISCAL IMPACT: The project is funded by FY 2024 Capital Investment Program (CIP) project, Recycling Center Storm Water Quality Improvements (c402111). There is no impact to the General Fund.

Prepared By:

Hoi Yu
Associate Engineer
Submitted By:

Nathan Nguyen, P.E.

Director of Public Works
Approved By:

Matt Huffaker
City Manager
ATTACHMENTS:

None.

13.1 City Council

AGENDA REPORT
DATE: 10/03/2023
AGENDA OF: 10/24/2023
DEPARTMENT: Public Works
SUBJECT: Encroachment Permit – Installation of Retaining Wall and Stairs (PW) RECOMMENDATION: Resolution granting an encroachment permit to Christen & W.F.

Docker to install a retaining wall and stairs in the public right-of-way at 215 4th Avenue.

BACKGROUND: Christen & W.F. Docker is requesting to install a retaining wall and stairs in the public right-of-way at 215 4th Avenue. The above-mentioned property has a condition on their active building permit to construct a new sidewalk as a public improvement. The retaining wall will need to be constructed in order to install the sidewalk and the stairs. This will be used for access to the property (see attachment 2 for detailed drawings).

DISCUSSION: Staff has reviewed the proposed encroachment and recommends approval for Christen & W.F. Docker residence to place the retaining wall and stairs. The proposed encroachment is consistent with the public interest and will not interfere with the City of Santa Cruz (City) right-of-way.

FISCAL IMPACT: There is no impact to the General Fund. Christine & W.F. Docker is required to maintain adequate insurance and indemnify the City. A permit fee of $1,046 is charged to cover staff administrative and inspection costs.

Prepared By:

Curtis Busenhart
Engineering Associate
Submitted By:

Nathan Nguyen, P.E.

Director of Public Works
Approved By:

Matt Huffaker
City Manager
ATTACHMENTS:

1. RESOLUTION.DOC

2. VICINITY MAP.PDF

3. DETAILED DRAWINGS.PDF

14.1 RESOLUTION NO. NSRESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CRUZ

GRANTING AN ENCROACHMENT PERMIT FOR THE INSTALLATION OF A RETAINING WALL AND STAIRS IN THE PUBLIC RIGHT-OF-WAY ADJACENT TO 215 4TH AVENUE WHEREAS, an application has been filed with Public Works Department of the City of Santa Cruz to install a retaining wall and stairs in the public right-of-way adjacent 215 4th Avenue; and
WHEREAS, the City Council has determined that approving the application is consistent with the public interest and will not interfere with the City’s right-of-way; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Santa Cruz as follows:

1. An encroachment permit is hereby granted to Christine & F.W. Docker and to its successors in interest to the property located in Santa Cruz, California to install a retaining wall and stairs adjacent to 215 4th Avenue.

2. This permit is subject to the terms and conditions specified in the encroachment permit as presented to Council this date.

BE IT FURTHER RESOLVED by the City Council of the City of Santa Cruz that the City Manager, be and is hereby authorized and directed to execute said encroachment permit on behalf of the City.

PASSED AND ADOPTED this 24th day of October 24, 2023, by the following vote:

AYES:

NOES:

ABSENT:

DISQUALIFIED:

APPROVED:___________________________
Mayor
ATTEST: _____________________________
City Clerk

14.2 14.3

14.4 City Council

AGENDA REPORT
DATE: 10/03/2023
AGENDA OF: 10/24/2023
DEPARTMENT: Public Works
SUBJECT: Encroachment Permit – Installation ADA Access Ramp/Sidewalk (PW) RECOMMENDATION: Resolution granting an encroachment permit to Lissner Properties, Inc. to install an ADA access ramp/sidewalk in the public right-of-way at 320 Cedar Street (Birch Alley).

BACKGROUND: Lissner Properties, Inc. is requesting to install an ADA access ramp/sidewalk in the public right-of-way at 320 Cedar Street (Birch Alley). The abovementioned ADA access ramp/sidewalk will need to be constructed in order to allow ADA access to the property (see attached detailed drawings).

DISCUSSION: Staff has reviewed the proposed encroachment and recommends approval to Lissner Properties, Inc. to place the ADA access ramp/sidewalk. The proposed encroachment is consistent with the public interest and will not interfere with the City of Santa Cruz (City) rightof-way.

FISCAL IMPACT: There is no impact to the General Fund. Lissner Properties, Inc. is required to maintain adequate insurance and indemnify the City. A permit fee of $1,046 is charged to cover staff administrative and inspection costs.

Prepared By:

Curtis Busenhart
Engineering Associate
Submitted By:

Nathan Nguyen, P.E.

Director of Public Works
Approved By:

Matt Huffaker
City Manager
ATTACHMENTS:

1. RESOLUTION.DOC

2. VICINITY MAP.PDF

3. DETAILED DRAWINGS.PDF

15.1 RESOLUTION NO. NSRESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CRUZ

GRANTING AN ENCROACHMENT PERMIT FOR THE INSTALLATION OF AN ADA ACCESS RAMP/SIDEWALK IN THE PUBLIC RIGHT-OF-WAY ADJACENT TO 320 CEDAR STREET (BIRCH ALLEY).

WHEREAS, an application has been filed with Public Works Department of the City of Santa Cruz to install an ADA access ramp/sidewalk in the public right-of-way adjacent 320 Cedar St (Birch Alley); and
WHEREAS, the City Council has determined that approving the application is consistent with the public interest and will not interfere with the City’s right-of-way; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Santa Cruz as follows:

1. An encroachment permit is hereby granted to Lissner Properties, Inc. and to its successors in interest to the property located in Santa Cruz, California to install an ADA access ramp/sidewalk adjacent to 320 Cedar St (Birch Alley).

2. This permit is subject to the terms and conditions specified in the encroachment permit as presented to Council this date.

BE IT FURTHER RESOLVED by the City Council of the City of Santa Cruz that the City Manager, be and is hereby authorized and directed to execute said encroachment permit on behalf of the City.

PASSED AND ADOPTED this 24th day of October 24, 2023, by the following vote:

AYES:

NOES:

ABSENT:

DISQUALIFIED:

APPROVED:___________________________
Mayor
ATTEST: _____________________________
City Clerk

15.2 15.3

15.4 City Council

AGENDA REPORT
DATE: 10/03/2023
AGENDA OF: 10/24/2023
DEPARTMENT: Public Works
SUBJECT: Front-Spruce-Pacific 54-Inch Sewer Rehabilitation (c401606) – Approval of Plans and Specifications, Authorization to Advertise and Award Contract, California Environmental Quality Act Exemption, and Budget Adjustment (PW)
RECOMMENDATION: Motion to:
1) Approve the plans and specifications for the Front-Spruce-Pacific 54-Inch Sewer Rehabilitation (c401606), authorize staff to advertise for bids, award the contract. The City Manager is hereby authorized and directed to execute the contract, in a form approved by the City Attorney, and as authorized by Resolution No. NS-27,563. The Director of Public Works is authorized to execute change orders within the approved project budget; 2) Find the project exempt under the California Environmental Quality Act (CEQA); and 3) Adopt a resolution amending the FY 2024 budget and appropriating $8,100,000 from supporting project, c402204 (City WWTF Headworks Replacement), to fund c401606 (FrontSpruce-Pacific 54-Inch Sewer Rehabilitation).

BACKGROUND: The City of Santa Cruz (City) owns and operates the Santa Cruz Wastewater Treatment Facility (WWTF) and the upstream influent pipelines. The largest influent pipeline was installed in 1966 and consists of approximately 3,250 linear feet of 54-inch diameter reinforced concrete pipe along Pacific Ave and Front Street from the headworks vault at the WWTF to Spruce Street. This 54-inch intercepting sewer main and a parallel 30-inch main collect all the sewage from Eastside Santa Cruz, including Downtown and Beach St, which then flows to the WWTF to be treated. In 2007, Public Works staff identified deficiencies in the parallel 30-inch sewer main and rehabilitated the pipe using a lining process called cured-inplace pipe (CIPP). Last year, Public Works contracted with consultant Brown & Caldwell to inspect the condition of the 54-inch diameter pipeline.

DISCUSSION: The inspection of the 54-inch sewer main and associated manholes revealed surface damage, concrete spalling, and corroded reinforcement within the pipeline and structures.

The Front-Spruce-Pacific 54-Inch Sewer Rehabilitation project will address these issues by lining the existing pipe using the CIPP process and repairing the seven associated manholes with an epoxy liner. The CIPP method will install a new resin infused tube within the host pipe which will then be cured by heated water. a disruption to the neighborhood compared to the traditional

16.1 open-cut replacement. The rehabilitation project will prevent further deterioration and failure of the City’s Eastside sewer interceptor pipeline.

Initially, the Front-Spruce-Pacific 54-Inch Sewer Rehabilitation project was coupled with the associated project, City WWTF Headworks Replacement (c402204), due to the influent pipeline connecting to the City WWTF and their relation to one another; the City WWTF Headworks Replacement project was planned for construction to begin in 2024 and the Front-Spruce-Pacific 54-Inch Sewer Rehabilitation to begin construction in 2025. After further assessment, it was determined that it would be beneficial to decouple these projects from one another and to reverse the order of construction due to procurement lead times and complexity of the City WWTF Headworks project. The attached budget adjustment will strategically allow for the construction of the Front-Spruce-Pacific 54-Inch Sewer Rehabilitation in Spring 2024.

The Front-Spruce-Pacific 54-Inch Sewer Rehabilitation project is statutorily exempt from further environmental review under the California Environmental Quality Act Section 15282 (k); a Notice of Exemption will be filed by staff following City Council approval.

Plans and specifications can be found online at:
https://www.cityofsantacruz.com/government/city-departments/public-works/engineering/publicworks-projects The total project cost including design and construction management services is $9,000,000. The project will be initially funded through a “pay as you go” strategy with available funds in Fund 721, Wastewater. Staff are also pursuing a 30-year loan through the California Infrastructure and Economic Development Bank (iBank), which would pay for the construction phase costs the 54” liner and headworks projects, through a future reimbursement process once the IBank loan is finalized in fall of 2024. A resolution authorizing staff to apply to the iBank loan program will be presented to Council as part of separate request.

FISCAL IMPACT: The project construction phase is estimated to cost $8,100,000. Funds are available in Wastewater Capital Investment Program Fund 721. A budget adjustment is requested to transfer $8,100,000 from c402204 (City WWTF Headworks Replacement) to c401606 (Front-Spruce-Pacific 54-Inch Sewer Rehabilitation). There is no impact to the General Fund.

Prepared By:

Niao Yan
Associate Professional
Engineer
Submitted By:

Nathan Nguyen, P.E.

Director of Public Works
Approved By:

Matt Huffaker
City Manager
ATTACHMENTS:

1. BUDGET ADJUSTMENT.PDF

16.2 City of Santa Cruz

BUDGET ADJUSTMENT REQUEST
Administrative Approval
Fiscal Year:

ACCOUNT PROJECT NAME (if applicable) OR REVENUE ACCOUNT TITLE ACCOUNT PROJECT NAME (if applicable) OR EXPENDITURE ACCOUNTTITLE NET: $

REQUESTEDBY DEPARTMENTHEAD

APPROVAL

BUDGET/ACCOUNTING

REVIEWED

FINANCE DIRECTOR

APPROVAL

CITYMANAGER

APPROVAL
Reso #:

PROJECT

PROJECT
AMOUNT
AMOUNT
Council Approval

TOTALEXPENDITURE

TOTALREVENUE
Date:

Purpose:

Revised November 3, 2022
Clear Form 2024 09/19/2023
To move resources from supporting project, City WWTF Headworks Replacement (c402204), to fund the Front-Spruce-Pacific 54-Inch Sewer Rehabilitation project.
0 721-40-62-7252-57301 c402204 100-2020-0 City WWTF Headworks Replacement -8,100,000 721-40-62-7259-57301 c401606 100-2020-0 Front-Spruce-Pacific-Sewer Main Rehab 8,100,000 0 0 Niao
Yan
Digitally signed
by Niao Yan
Date: 2023.10.02
15:05:39 -07'00'
Nathan
Nguyen
Digitally signed by
Nathan Nguyen
Date: 2023.10.02
15:01:08 -07'00'
Tiffany
Lewis
Digitally signed
by Tiffany Lewis
Date: 2023.10.03
15:59:44 -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: 2023.10.04 15:25:17 -07'00'

16.3 City Council

AGENDA REPORT
DATE: 10/03/2023
AGENDA OF: 10/24/2023
DEPARTMENT: Public Works
SUBJECT: Front-Spruce-Pacific 54-Inch Sewer Rehabilitation Project and Wastewater Treatment Facility Headworks Rehabilitation Project – Loan Application and Acceptance (c401606 and c402204) (PW)
RECOMMENDATION: Resolution authorizing the Public Works Department to apply for and accept a loan from the California Infrastructure and Economic Development for the FrontSpruce-Pacific 54-Inch Sewer Rehabilitation and Wastewater Treatment Facility Headworks Rehabilitation Projects (c401606 and c402204) in the amount of $33,500,000 and authorizing the City Manager to execute an agreement in a form approved by the City Attorney with California Infrastructure and Economic Development Bank for said loan and its repayment.

BACKGROUND: The City of Santa Cruz (City) Wastewater Treatment Facility (WWTF), originally built in 1928 has been expanded over time, and the last major upgrade occurred over 30 years ago. In 2017 the City contracted Kennedy Jenks to conduct a major equipment condition assessment at the WWTF. Kennedy Jenks assessed WWTF asset conditions, identified high-risk assets, and provided a prioritized list of capital improvement projects to be completed over the next 10 to 15 years. In 2022 the City solicited statements of qualifications and selected Brown and Caldwell to provide consulting engineering support services for upcoming capital improvement projects at the WWTF. Brown and Caldwell is nearing 100% design submittals on two upcoming major infrastructure improvement projects, the Front-Spruce-Pacific Ave. 54-inch Sewer Rehabilitation Project and the Headworks Rehabilitation Project. These projects aim to rehabilitate crucial components of City wastewater collection and treatment facility infrastructure.

The Front-Spruce-Pacific 54-inch sewer was installed in 1966 and consists of approximately 3,250 linear feet of 54-inch diameter reinforced concrete pipe along Pacific Ave and Front Street from the headworks vault at the WWTF to Spruce Street. The rehabilitation projects will address deterioration in the pipe with a lining process installing a cured-in-place pipe (CIPP).

Construction is scheduled to begin in early 2024. The project costs eligible for future loan reimbursement are estimated to be: $10,000,000
The Wastewater Treatment Facility Headworks Rehabilitation Project seeks to rehabilitate the influent and headworks infrastructure including improvements to the headworks vault, influent vault, screen room, influent wet well, influent pump station, and replacement of two influent pumps with submersible pumps to increase facility resiliency in the event of an extreme weather

17.1 event or flood. Construction is expected to begin in early 2025. The project costs eligible for reimbursement are estimated to be $23,500,000.

DISCUSSION: Public Works staff recommend financing these two major infrastructure projects with a low-interest loan from the California Infrastructure and Economic Development Bank (iBank), funded by the Infrastructure State Revolving Fund Program. Both Public Works and the Water Department have financed past projects through iBank and are familiar with the loan application process and terms of the lender.

Public Works is asking that Council approve the resolution authorizing the submission of the loan application and the incurring of an obligation to iBank if the application is approved. All costs incurred up to 60 days prior to the date of the resolution may be reimbursed through the future iBank loan. The iBank loan approval process takes 3 to 6 months to complete and would start in May 2024 and conclude around the end of bidding the larger of the two projects (Headworks Project) in October 2024. Timing the loan application in this way ensures the City is securing the correct amount of financing, and at the right time, to avoid paying excess interest on the loan.

FISCAL IMPACT: Annual debt service will be paid for from net revenues generated by wastewater collection and treatment fees. The resolution has no effect on the General Fund.

Prepared By:

Katie Stewart
Senior Professional Engineer
Submitted By:

Nathan Nguyen, P.E.

Director of Public Works
Approved By:

Matt Huffaker
City Manager
ATTACHMENTS:

1. RESOLUTION.DOCX

17.2 RESOLUTION NO. NS-XX,XXX

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CRUZ AUTHORIZING

THE SUBMISSION OF AN APPLICATION TO THE CALIFORNIA INFRASTRUCTURE AND ECONOMIC DEVELOPMENT BANK (“IBANK”) FOR FINANCING A CAPITAL

IMPROVEMENT PROJECT, AUTHORIZING THE INCURRING OF AN OBLIGATION

PAYABLE TO IBANK FOR THE FINANCING OF A CAPITAL IMPROVEMENT PROJECT

IF IBANK APPROVES SAID APPLICATION, DECLARATION OF OFFICIAL INTENT TO

REIMBURSE CERTAIN EXPENDITURES FROM THE PROCEEDS OF AN OBLIGATION,

AND APPROVING CERTAIN OTHER MATTERS IN CONNECTION THEREWITH WHEREAS, the California Infrastructure and Economic Development Bank (“IBank”) administers a financing program to assist local governments with the financing of eligible projects in accordance with Section 63000 et seq. of the California Government Code (the “Act”); and WHEREAS, IBank created the Infrastructure State Revolving Fund Program (“ISRF Program”) pursuant to the provision of the Act; and
WHEREAS, IBank has instituted an application process for financing under its ISRF Program; and
WHEREAS, IBank’s Criteria, Priorities and Guidelines for the Selection of Projects for Financing under the ISRF Program, dated June 28, 2023, and as may thereafter be amended from time to time (the “Criteria”), establishes requirements for the financing of projects under the ISRF Program; and
WHEREAS, the City of Santa Cruz (“Applicant”) desires to submit an application (“Financing Application”) to IBank under the ISRF Program for financing and refinancing the costs of the Front – Spruce – Pacific 54” Liner and Wastewater Treatment Facility Headworks Rehabilitation Projects (“Project”) in an amount not to exceed $33,500,000; and WHEREAS, the Act and the Criteria require the Applicant to make, by resolution of its governing body, certain findings prior to a project being selected for financing by Ibank; and WHEREAS, the Applicant expects to incur or pay certain expenditures in connection with the Project from its [General Fund/Identify Special Fund] that are reimbursable with the proceeds of tax exempt bonds or other tax exempt securities under Federal Tax Law (defined below) prior to incurring indebtedness for the purpose of financing costs associated with the Project on a longterm basis (the “Reimbursement Expenditures”); and WHEREAS, the Applicant reasonably expects that a financing arrangement (“Obligation”) in an amount not expected to exceed $___33,500,000_______ will be entered into under and memorialized by one or more financing agreements and related documents (collectively, the “Financing Agreement”) and that certain proceeds of such Obligation will be used to reimburse

17.3 RESOLUTION NO. NS-XX,XXX
2 the Applicant for Reimbursement Expenditures incurred or paid prior to incurring the Obligation; and
WHEREAS, the Applicant acknowledges that IBank funds the ISRF Program, in part, with the proceeds of tax exempt bonds and, as such, has certain compliance obligations that may require it to have the Applicant enter into one or more new financing agreements to replace the Financing Agreement (collectively, the “Replacement Agreement”) on terms and conditions substantially identical to the original Financing Agreement.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Santa Cruz as follows:

Section 1. The City Council hereby approves confirms, ratifies, and affirms all actions of the Applicant’s representatives, employees and officers heretofore taken in connection with, or with respect to, submitting the Financing Application, and the consideration and approval of the Obligation and the Financing Agreement, if IBank approves the Financing Application and the Obligation, and in connection therewith the [short name for Governing Body] finds and certifies:
a. The Project facilitates the effective and efficient use of existing and future public resources so as to promote both economic development and conservation of natural resources;
b. The Project develops and enhances public infrastructure in a manner that will attract, create, and sustain long-term employment opportunities; c. That the Project is consistent with the General Plan of the City of Santa Cruz, and the General Plan of the County of Santa Cruz;
d. The proposed financing is appropriate for the Project; e. The Project is consistent with the Criteria; and
f. It has considered (i) the impact of the Project on California’s land resources and the need to preserve such resources; (ii) whether the Project is economically or socially desirable; and (iii) whether the project is consistent with, and in furtherance of the State Environmental Goals and Policy Report (as defined in the Criteria).

Section 2. The Applicant hereby declares its official intent to use proceeds of the Obligation to reimburse itself for the Reimbursement Expenditures with the proceeds of tax exempt bonds or other tax exempt securities issued under the provisions of the Internal Revenue Code of 1986, as amended, and those Treasury Regulations implementing such provisions (collectively, “Federal Tax Law”). This declaration is made solely for purposes of establishing compliance with applicable requirements of Federal Tax Law and its date is controlling for purposes of reimbursement under Federal Tax Law. This declaration does not bind the Applicant to make any expenditure, incur any indebtedness, or proceed with the Project.

Section 3. All of the Reimbursement Expenditures were made no earlier than 60 days prior to the date of this Resolution. The Applicant will allocate proceeds of the Obligation to pay Reimbursement Expenditures within eighteen (18) months of the later of the date the

17.4 RESOLUTION NO. NS-XX,XXX
3 original expenditure was paid or the date the Project was placed in service or abandoned, but in no event more than three (3) years after the original expenditure was paid.

Section 4. The City Manager and his or her designee is hereby authorized and directed to act on behalf of the Applicant in all matters pertaining to the Financing Application, and if IBank approves the Financing Application and the Obligation, the execution of related financial documents, including but not limited to, the authority to: (i) pledge the revenues of the [identify the fund] and all legally available amounts in the Wastewater Enterprise Fund, on a parity basis with the Applicant’s obligations in connection with the 2020 Wastewater Fund Debt, to the repayment of the Obligation, (ii) provide covenants relating to, among other things, maintaining the debt service coverage ratio required by IBank, rates and charges to be pledged, and as to any other security or collateral securing the Obligation, and (iii) take any other action necessary or desirable to enable the Applicant to enter into the Financing Agreement and incur the Obligation.

Section 5. If the Financing Application and the Obligation is approved by IBank, the City Manager and his or her designee is authorized to negotiate, enter into and sign financing documents and any amendments thereto, including, but not limited to the Financing Agreement and the Replacement Agreement, with IBank for the purposes of financing the Obligation.

Section 6. This Resolution shall become effective immediately upon adoption.

I, the undersigned, hereby certify that the foregoing Resolution was duly and regularly adopted and passed by the City Council of the City of Santa Cuz in a regular meeting assembled on the 24th day of October 2023, by the following vote:

PASSED AND ADOPTED this Xth day of X, 202X by the following vote:

AYES:

NOES:

ABSENT:

DISQUALIFIED:

APPROVED: ______________________________
Fred Keeley, Mayor
ATTEST: _________________________________
Bonnie Bush, City Clerk Administrator

17.5 City Council

AGENDA REPORT
DATE: 10/03/2023
AGENDA OF: 10/24/2023
DEPARTMENT: Public Works
SUBJECT: Route 1/9 Intersection Improvement Project (c400805) - Notice of Completion (PW)
RECOMMENDATION: Motion to accept the work of Granite Rock, Inc. (Watsonville, CA) as completed per the plans and specifications and authorize the filing of the Notice of Completion for Route 1/9 Intersection Improvement Project (c400805).

BACKGROUND: The Highway1/9 Intersection has been an ongoing problematic intersection affecting traffic operations throughout the City as the north gateway to Santa Cruz County. This project constructed the following improvements:
- Widened the section of Highway 9 (River Street) between Highway 1 and Fern Street to create triple left turn lanes as vehicles leave Harvey West Park heading south on Highway 1. - Widened the section of River Street near the Gateway Shopping Center to create two right-turn lanes, one through lane, and one shared through/left-turn lane. This will ease traffic flow from downtown to the Harvey West Area and in the southbound direction on Highway 1 - Added a second left hand turn lane from Highway 1 (southbound direction) onto Highway 9 (River Street). This will ease the flow of traffic from the Westside of Santa Cruz as it travels southbound Highway 1. Traffic in this direction must now use the single lane left turn pocket to enter the Harvey West Area.
- Added a northbound right turn lane on Highway 9 (River Street) at its intersection with Encinal Street. This will ease the flow of traffic heading up River Street (northbound direction) and turning into the Tannery Arts Center.

At its May 26, 2020 meeting, the City Council approved the Route 1/9 Intersection Improvement Project (c400805) and authorized staff to advertise for bids and award the contract.

On April 14, 2021, the project was awarded to the lowest responsive and responsible bidder Granite Rock, Inc. (Watsonville, CA), in the amount of $$6,670,139.52.

The project also increased safety for all roadway users but in particular pedestrians and bicyclists. The improvements include: Removal of non-ADA-compliant curb ramps and installing ADA compliant curb ramps both on the south side of the intersection (River Street)

18.1 and the west side of the intersection (Route 1) and construction of a through bicycle lane from River Street and then on northbound Route 9.

DISCUSSION: The project has been inspected by Public Works staff and found to be constructed in accordance with the plans and specifications.

FISCAL IMPACT: The project was completed with a total cost of $6,237,165.18 and is funded by $2,853,000 in State Transportation Improvement Program (STIP) funds from the CTC and $2,188,000 in RSTP-X funds from the SCCRTC, funding from Gas Tax, and Traffic Impact Fees in the FY 2023 Capital Investment Program. There is no impact to the General Fund.

Prepared By:

Joshua Spangrud
Senior Professional Engineer
Submitted By:

Nathan Nguyen, P.E.

Director of Public Works
Approved By:

Matt Huffaker
City Manager
ATTACHMENTS:

1. NOTICE OF COMPLETION.DOCX

18.2 Notice of Completion (Revised Oct 2021)
(Space above for Recorder’s use only)
This instrument is being recorded for the benefit of the City of Santa Cruz.

No recording fee is required pursuant to Government Code § 27383.

NOTICE OF COMPLETION
(CA Civil Code Sections 8102 and 9204)
NOTICE IS HEREBY GIVEN THAT:

The undersigned is an authorized representative of the owner of the interest or estate stated below.

1. The Owner’s Name and Address. The Project owner and sponsor is the City of Santa Cruz, a municipal corporation (the “City”). The City’s mailing address is 809 Center Street, Santa Cruz, California 95060.

The City of Santa Cruz has the following interest in the subject Property described below: City RightOf-Way.

2. Project Title and Number. The full name of the work of improvement/public works project (the “Project”) which is the subject of this Notice of Completion is: Route 1/9 Intersection Improvement Project (c400805).

3. Nature of Work Performed on the Property or Materials Furnished for the City. The Project consisted of work described as: Public improvements in the City and State right of way at the intersection of State Routes 1 and 9.

4. The general site location description or address (the “Property”) of the public improvement is located at: City’s right of way at Route 9 and intersection with State right of way at Route 1

5. Name and Address of Contractor. The Contractor on the Project is: Granite Rock Co. PO Box 50001, Watsonville, CA 95077.

6. Date of Completion. The Project was completed on: February 2, 2023

7. The filing of this Notice of Completion was authorized by the Santa Cruz City Council Minute Order on Tuesday, October 24, 2023
DATE: ___________________ Nathan Nguyen
Director of Public Works, City of Santa Cruz
RECORDED AT THE REQUEST OF:

City of Santa Cruz, Public Works
Attn: Joshua Spangrud
WHEN RECORDED MAIL TO:

City Clerk’s Department
809 Center Street, Room 9
Santa Cruz, CA 95060

18.3 Notice of Completion (Revised Oct 2021)

VERIFICATION FOR THE CITY OF SANTA CRUZ
I have read the foregoing Notice of Completion and know the contents thereof, and I certify that the same is true of my own knowledge, except as to those matters which are therein stated upon my information or belief, and as to those matters, I believe it to be true. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.

Executed on October 24, 2023, at Santa Cruz, CA
Nathan Nguyen
Director of Public Works, City of Santa Cruz

18.4 Notice of Completion (Revised Oct 2021)

PROOF OF SERVICE DECLARATION
(California Civil Code § 8118)
I, Joshua Spangrud, declare that I served copies of the above NOTICE OF COMPLETION on the interested parties, in the manner and at the date and place set forth below (Check One):

Direct Contractor: Granite Rock Const.
350 Technology Drive
Watsonville, CA 95076
☒ REGISTERED, CERTIFIED, OR EXPRESS MAIL: by placing the Notice in a sealed envelope with postage fully prepaid and depositing the envelope in the United States mail by registered, certified, or express mail. Documentation of such service is attached herein. ☐ OVERNIGHT DELIVERY: by causing the Notice to be picked up for overnight delivery by an express service carrier. Documentation of such service is attached herein. ☐ PERSONAL DELIVERY: by causing the Notice to be personally delivered to each of the addresses above stated on the date below.
☐ CODE OF CIV. PROC. § 415.20: by leaving the Notice and mailing a copy of the Notice in the manner provided under California Code of Civil Procedure § 415.20 for service of a summons and complaint in a civil action.

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

Executed on March 14, 2023, at Santa Cruz, California.

Joshua Spangrud

18.5 City Council

AGENDA REPORT
DATE: 10/03/2023
AGENDA OF: 10/24/2023
DEPARTMENT: Public Works
SUBJECT: Branciforte Branch Public Library Renovation (c351801) – Notice of Completion (PW)
RECOMMENDATION: Motion to accept the work of JPB Designs, Inc. (Orangevale, CA) as completed per plans and specifications and authorizing the filing of a Notice of Completion for the Branciforte Branch Public Library Renovation Project (c351801).

BACKGROUND: At its January 26, 2021 meeting, the City Council approved a motion to authorize the City Manager to execute a contract with the lowest responsive and responsible bidder as authorized by Resolution No. NS-27,563 and to execute change orders within the approved budget.

On March 12, 2021, the project was awarded to the lowest responsive and responsible bidder, JPB Designs, Inc. (Orangevale, CA).

The project installed interior renovation of an existing 7,034 SF public library. Interior work included but was not limited to selective demolition, access compliance upgrades, mechanical, electrical, fire alarm and plumbing upgrades, new finishes, and new library shelving. Exterior renovation work included, but was not limited to, new exterior windows and doors, landscape and irrigation upgrades, access compliance upgrades and patio upgrades.

DISCUSSION: The work for this project is now complete. The project was inspected by Public Works staff and was completed in accordance with the plans and specifications.

FISCAL IMPACT: The project was completed with a total cost of $4,140,190. The project was paid for through Measure S funding and $266,943.00 from the Friends of the Santa Cruz Public Libraries.

Prepared By:

Yolande Wilburn
Santa Cruz Public Library
Submitted By:

Nathan Nguyen, P.E.

Director of Public Works
Approved By:

Matt Huffaker
City Manager
ATTACHMENTS:

1. NOTICE OF COMPLETION.DOCX

19.1 Notice of Completion page 1 of 3
(Space above for Recorder’s use only)
This instrument is being recorded for the benefit of the City of Santa Cruz.

No recording fee is required pursuant to Government Code § 27383.

NOTICE OF COMPLETION
(CA Civil Code Sections 8102 and 9204)
NOTICE IS HEREBY GIVEN THAT:

The undersigned is an authorized representative of the owner of the interest or estate stated below.

1. The Owner’s Name and Address. The Project owner is the City of Santa Cruz, a municipal corporation (the “City”). The City’s mailing address is 809 Center Street, Santa Cruz, California 95060. The City of Santa Cruz has the following interest in the subject Property described below:

City Property

2. Project Title and Number. The full name of the work of improvement/public works project (the “Project”) which is the subject of this Notice of Completion is: Branciforte Branch Public Library Renovation (c351801)

3. Nature of Work Performed on the Property or Materials Furnished for the City. The Project consisted of work described as: interior renovation of an existing 7,034SF Public Library. Interior work includes but is not limited to selective demolition, access compliance upgrades, mechanical, electrical, fire alarm and plumbing upgrades, new finishes, and new library shelving. Exterior renovation work includes, but is not limited to, new exterior windows and doors, landscape and irrigation upgrades, access compliance upgrades and patio upgrades.

4. The general site location description or address (the “Property”) of the public improvement is located at: 230 Gault St., Santa Cruz, CA 95060

5. Name and Address of Contractor. The Contractor on the Project is: JPB Designs, Inc.. 5650 Main Ave., Suite 2, Orangevale, CA 95662.

6. Construction Lender. The name and address of the construction lender, if any, is: n/a

7. Date of Completion. The Project on the Property was completed on: May 10, 2023

8. The filing of this Notice of Completion was authorized by the Santa Cruz City Council Minute Order on Tuesday, October 24, 2023
DATE:

Nathan Nguyen
Director of Public Works, City of Santa Cruz
RECORDED AT THE REQUEST OF:

City of Santa Cruz, Public Works
Attn: Josh Spangrud
WHEN RECORDED MAIL TO:

City Clerk’s Department
809 Center Street, Room 9
Santa Cruz, CA 95060

19.2 Notice of Completion page 2 of 3

VERIFICATION FOR THE CITY OF SANTA CRUZ
I have read the foregoing Notice of Completion and know the contents thereof, and I certify that the same is true of my own knowledge, except as to those matters which are therein stated upon my information or belief, and as to those matters I believe it to be true. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.

Executed on 10/24/2023 at Santa Cruz, CA
Nathan Nguyen, Director of Public Works
City of Santa Cruz

19.3 Notice of Completion page 3 of 3

Direct Contractor: JPB Designs, Inc.
5650 Main Ave., Suite 2
Orangevale, CA 95662
☐ REGISTERED, CERTIFIED, OR EXPRESS MAIL: by placing the Notice in a sealed envelope with postage fully prepaid and depositing the envelope in the United States mail by registered, certified, or express mail. Documentation of such service is attached herein. ☐ OVERNIGHT DELIVERY: by causing the Notice to be picked up for overnight delivery by an express service carrier. Documentation of such service is attached herein. ☐ PERSONAL DELIVERY: by causing the Notice to be personally delivered to each of the addresses above stated on the date below.
☐ CODE OF CIV. PROC. § 415.20: by leaving the Notice and mailing a copy of the Notice in the manner provided under California Code of Civil Procedure § 415.20 for service of a summons and complaint in a civil action.

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

Executed on Click here to enter a date., at Santa Cruz, California.

Joshua Spangrud

19.4 City Council

AGENDA REPORT
DATE: 10/03/2023
AGENDA OF: 10/24/2023
DEPARTMENT: Public Works
SUBJECT: Retaining Wall Reconstruction Project -141 Archer Drive (g402402) (PW) RECOMMENDATION: Motion to:
1) Adopt a resolution approving the Application for Federal Assistance SF-424 and Advance of Funds/Reimbursement Agreement for Emergency Watershed Protection Program and authorizing the City Manager to execute said agreements and any amendments in a form acceptable to the City Attorney; and
2) Adopt a resolution amending the FY 2024 budget and appropriating $414,000 for the Retaining Wall Reconstruction Project - 141 Archer Drive (g402402).

BACKGROUND: In January 2023, the Public Works Department was contacted by the owner of 141 Archer Drive. The property sits at the top of a long, steep slope on the section of Bay Street that is divided by Bay Creek. Due to severe weather, an approximately 10-foot tall, 40- foot long private retaining wall failed and resulted in a landslide which took out a majority of the backyard. This is an ongoing threat to the house on the property and poses a risk of additional erosion and landslides on City of Santa Cruz (City) right-of-way if left unmitigated.

The property owner requested assistance through a program administered by US Department of Agriculture, Natural Resource Conservation Service (NRCS) that provides disaster related funding to address a variety of issues that can affect water quality, erosion, and watershed protection. Individual property owners are not eligible to apply for funding directly, however governmental entities such as the City are able to sponsor projects on behalf of a private property owner.

At the property owners’ request, staff submitted a letter of interest in funding for the Emergency Watershed Protection Program (EWPP) in May 2023. Subsequently, the property owner privately contracted a surveyor, geotechnical and structural engineer to prepare a design for a replacement retaining wall and obtained a cost estimate for construction. These design deliverables were submitted and reviewed by NRCS staff to verify eligibility for funding by the EWPP program.

DISCUSSION: In September 2023, staff received formal approval of the EWPP funding request. To comply with EWPP program and access funding, the City must act as the lead (sponsor) agency on the project even though the retaining wall would be constructed on private

20.1 property for the property owner. City partnership on this project will 1) result in reconstruction of a retaining wall which will provide lasting protection to both private and City property, as well as natural resources such as Bay Creek, and 2) enable City staff to acquire valuable experience working with a new federal funding program that may be a future source of funding when City facilities or infrastructure are damaged by extreme weather.

Because the retaining wall will be replaced on private property, the entire project costs will be covered by outside funding. The total project cost is estimated at $414,000. A majority of the estimated project costs ($308,550) will be funded by the EWPP program. The remaining balance of $105,450 (including all City staff time) will be paid for by the property owner through an advance of funds/reimbursement agreement. Under no circumstances will the City be obligated to contribute funding to this project.

If approved, staff would bring the design documents to Council in November 2023 for authorization to bid and award. Construction would occur in winter 2023 - spring 2024.

FISCAL IMPACT: Staff is requesting a new project, g402402, Retaining Wall Reconstruction, in the Capital Investment Program. The project will be funded by $308,550 from the Emergency Watershed Protection Program and $105,450 from the property owner. There is no impact to the General Fund.

Prepared By:

Kevin Crossley
Assistant Director/City
Engineer
Submitted By:

Nathan Nguyen, P.E.

Director of Public Works
Approved By:

Matt Huffaker
City Manager
ATTACHMENTS:

1. RESOLUTION.DOCX

2. ADVANCE OF FUNDS REIMBURSEMENT AGREEMENT.PDF

3. BUDGET ADJUSTMENT.PDF

20.2 RESOLUTION NO. NS-XX,XXX

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CRUZ AUTHORIZING

APPLICATION FOR AND RECEIPT OF NATURAL RESOURCES CONSERVATION

SERVICES EMERGENCY WATERSHED PROTECTION GRANT FUNDS AND

AUTHORIZING THE EXECUTION OF AN AGREEMENT FOR ADVANCE OF FUNDS

WITH PRIVATE PROJECT BENEFICIARY
WHEREAS, real property adjacent to Bay Street located at 141 Archer Drive, Assessor’s Parcel Number 006-031-37, in the City of Santa Cruz, California (the “Property”), suffered significant storm-related hillslope damage during the atmospheric river and wind disasters between January 11, 2023 and March 14, 2023, as to which a disaster was declared by the State of California and President of the United States;
WHEREAS, damage to the Property and hillslope requires repair and stabilization work to prevent additional erosion to the Property and the slope adjacent to Bay Street; WHEREAS, the City does not own the Property and does not assume any responsibility for maintenance and repair of the Project; but as a courtesy has agreed to facilitate the Project through the use of funding from and in accordance with the requirements of the Emergency Watershed Protection Program of the Agricultural Credit Act of 1978, (“EWP Program”), administered by the Natural Resources Conservation Service (“NRCS”), which includes a requirement for cost-share participation;
WHEREAS, the City desires to submit an EWP Grant application package to NRCS in the approximate amount of $308,550 to fund a portion of the Project (75%) and to mitigate erosion on the hillslope of the Property adjacent to Bay Street; and WHEREAS, Owner agrees to pay the non-federal share cost of the Project (25% of total costs) and the City’s management, overhead, and staff time related to the Project.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Santa Cruz as follows:

SECTION 1. The City Manager or his designee is hereby authorized and directed to apply and submit application materials to NRCS;
SECTION 2. In connection with the EWP Grant, if the application is approved by NRCS, the City Manager or his designee is authorized enter into, execute, and deliver an agreement, including all other documents required or deemed necessary or appropriate to evidence and secure the EWP Grant, and all amendments thereto; and
SECTION 3. In connection with the EWP Grant, if the application is approved by NRCS, the City Manager or his designee is authorized enter into and execute an agreement for advance of funds with the owner of the Property, to ensure that the Property owner is responsible for all of the non20.3 RESOLUTION NO. NS-XX,XXX
2 federal share costs of the Project, in a form approved by the City Attorney. The agreement shall be recorded and allow the City to place a lien on the Property in the event owner defaults on any terms under the agreement, including failing to reimburse and/or advance funds to the City for the non-federal share of the Project.

PASSED AND ADOPTED this 24th day of October, 2023 by the following vote:

AYES:

NOES:

ABSENT:

DISQUALIFIED:

APPROVED: ______________________________
Fred Keeley, Mayor
ATTEST: _________________________________
Bonnie Bush, City Clerk Administrator

20.4 OMB Number: 4040-0004
Expiration Date: 12/31/2022
* 1. Type of Submission: * 2. Type of Application:
* 3. Date Received: 4. Applicant Identifier:
5a. Federal Entity Identifier: 5b. Federal Award Identifier:

6. Date Received by State: 7. State Application Identifier:
* a. Legal Name:
* b. Employer/Taxpayer Identification Number (EIN/TIN): * c. UEI:
* Street1:

Street2:
* City:

County/Parish:
* State:

Province:
* Country:
* Zip / Postal Code:

Department Name: Division Name:

Prefix: * First Name:

Middle Name:
* Last Name:

Suffix:

Title:

Organizational Affiliation:
* Telephone Number: Fax Number:
* Email:
* If Revision, select appropriate letter(s):
* Other (Specify):

State Use Only:

8. APPLICANT INFORMATION:
d. Address:
e. Organizational Unit:
f. Name and contact information of person to be contacted on matters involving this application:

Application for Federal Assistance SF-424
Preapplication
Application
Changed/Corrected Application
New
Continuation
Revision
City of Santa Cruz
NNFLE88HHW48
809 Center St Rm 201
Santa Cruz
CA: California
USA: UNITED STATES
Public Works Engineering
Kevin
CRossley
City Engineer
Public Works
831 420 5165
[email protected]

20.5 * 9. Type of Applicant 1: Select Applicant Type:

Type of Applicant 2: Select Applicant Type:

Type of Applicant 3: Select Applicant Type:
* Other (specify):
* 10. Name of Federal Agency:

11. Catalog of Federal Domestic Assistance Number:

CFDA Title:
* 12. Funding Opportunity Number:
* Title:

13. Competition Identification Number:

Title:

14. Areas Affected by Project (Cities, Counties, States, etc.):
* 15. Descriptive Title of Applicant's Project:

Attach supporting documents as specified in agency instructions.

Application for Federal Assistance SF-424
C: City or Township Government
USDA -Natural Resource Conservation Service
Title of Project: City of Santa Cruz EWPP – DSR #: 06-19-23-5228-202 Add Attachments Delete Attachments View Attachments
Add Attachment Delete Attachment View Attachment

20.6 * a. Federal
* b. Applicant
* c. State
* d. Local
* e. Other
* f. Program Income
* g. TOTAL
.

Prefix: * First Name:

Middle Name:
* Last Name:

Suffix:
* Title:
* Telephone Number:
* Email:

Fax Number:
* Signature of Authorized Representative: * Date Signed:

18. Estimated Funding ($):

21. *By signing this application, I certify (1) to the statements contained in the list of certifications** and (2) that the statements herein are true, complete and accurate to the best of my knowledge. I also provide the required assurances** and agree to comply with any resulting terms if I accept an award. I am aware that any false, fictitious, or fraudulent statements or claims may subject me to criminal, civil, or administrative penalties. (U.S. Code, Title 218, Section 1001) ** The list of certifications and assurances, or an internet site where you may obtain this list, is contained in the announcement or agency specific instructions.

Authorized Representative:

Application for Federal Assistance SF-424
* a. Applicant
Attach an additional list of Program/Project Congressional Districts if needed. * b. Program/Project
* a. Start Date: * b. End Date:

16. Congressional Districts Of:

17. Proposed Project:
19 19
Add Attachment Delete Attachment View Attachment
09/01/2023 04/08/2024
308,550.00
105,450.00
414,000.00
a. This application was made available to the State under the Executive Order 12372 Process for review on b. Program is subject to E.O. 12372 but has not been selected by the State for review. c. Program is not covered by E.O. 12372.

Yes No
Add Attachment Delete Attachment View Attachment
** I AGREE
Matt
Huffaker
City Manager
831-420-5010
[email protected]
* 20. Is the Applicant Delinquent On Any Federal Debt? (If "Yes," provide explanation in attachment.) * 19. Is Application Subject to Review By State Under Executive Order 12372 Process? If "Yes", provide explanation and attach

20.7 1
Recording Requested By:

City of Santa Cruz
And When Recorded Return To:

City Clerk
City of Santa Cruz
809 Center St. #9
Santa Cruz, CA 95060
APN: 006-031-37 (Space Above for Recorder’s use only.)
Address: 141 Archer Drive
THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO GOV. CODE §27383

CITY OF SANTA CRUZ

AGREEMENT FOR ADVANCE OF FUNDS AND REIMBURSEMENT

EMERGENCY WATERSHED PROTECTION PROGRAM
THIS AGREEMENT is made and entered into as of the ________ day of _________, 2023, by and between the City of Santa Cruz, hereinafter referred to as the “City,” and Robert Winton, hereinafter referred to as the “Owner.” The City and Owner may be referred to as a “Party” or collectively, as the “Parties”.

RECITALS
WHEREAS, the Owner owns real property located at 141 Archer Drive, Assessor’s Parcel Number 006-031-37, in the City of Santa Cruz, California (the “Property”), more particularly described in Exhibit A attached hereto;
WHEREAS, the Property suffered significant storm-related hillslope damage during the atmospheric river and straight line wind disasters commencing on January 11th, 2023 and continuing through March 14, 2023, as to which a disaster was declared by the State of California and the President of the United States;
WHEREAS, the damage to the Property requires repair and stabilization work to prevent additional erosion to the Property’s hillslope (the “Project”); WHEREAS, the City does not own the Property and does not assume any responsibility for maintenance and repair of the Project; but as a courtesy has agreed to facilitate the Project through the use of funding (“EWP Grant”, incorporated into this Agreement as Exhibit A) from and in accordance with the requirements of the Emergency Watershed Protection Program of the Agricultural Credit Act of 1978, (“EWP Program”), administered by the Natural Resources Conservation Service (“NRCS”), which includes a requirement for cost-share participation; and WHEREAS, Owner agrees to pay the non-federal share cost of the Project (25% of total costs) and the City’s management, overhead, and staff time. The Parties have each determined that it is mutually beneficial to memorialize this cost reimbursement agreement concerning costs related to the Project.

20.8 2
TERMS
NOW, THEREFORE, in consideration of the mutual covenants hereinafter provided, incorporating the recitals above as part of the Agreement, the parties hereto enter into this Agreement and agree to all its terms and conditions as follows:

1. TERM OF THE AGREEMENT: The term of this Agreement shall commence on the date first above written and shall expire on ____________, unless terminated earlier by either party for the convenience of that party, upon giving no less than thirty (30) days prior written notice to the other party. In the event the EWP Grant is cancelled, revoked, or suspended this Agreement shall automatically terminate as of the effective date of such action, with no further obligation, financial or otherwise, by either party to the other except in regard to work already performed and paid for under the EWP Grant. Notwithstanding the foregoing, the obligations of either party to the other under Paragraph 9 (Hold Harmless) or of Owner under Paragraph 8 (Maintenance) shall continue in full force and effect after said expiration date or early termination in relation to acts or omissions occurring, or work completed prior to such expiration or termination dates.

2. SCOPE OF PROJECT: In order to prevent additional erosion to the property and the adjacent City right of way, City shall provide emergency stabilization repairs (the “Project”) on portions of the hillslope on or adjacent to the Property , which located at 141 Archer Dr, Santa Cruz, California and identified as Assessor's Parcel No. 006-031-37 on the Santa Cruz County Assessor's Maps in effect on the date first above written.

3. CONSTRUCTION TIMING: All Project work must be completed within two hundred and twenty (220) days after EWP Grant funding is made accessible to the California NRCS. The City may pursue an extension from NRCS; however, in the event the Project is not completed within 220 days after EWP Grant funding is made available or within any approved extension time permitted by NRCS, Owner agrees to reimburse the City in full for all Project costs accrued by the City in relation to the Project, including those which would otherwise be covered by EWP Grant funding that is no longer available due to non-compliance with the 220 day time period for completion under the EWP Program.

4. CONTRACTOR:
(a) Retention of Licensed Contractor. Owner understands that City will hire a duly licensed general contract (“Contractor”) on an emergency basis by putting this project out for competitive bids, as permitted by the California Public Contract Code and adopted ordinances of the City.
(b) Direction of Contractor. The parties mutually acknowledge that it shall be the responsibility of City and not of Owner to provide all direction to Contractor regarding work funded on the Property under the EWP Grant. Owner hereby expressly agrees that Owner shall be solely responsible to City for 100% of the cost of any work requested and/or directed by Owner and performed by Contractor or its subcontractors on the Property without the approval of City’s Engineer.

5. RIGHT OF ENTRY: By executing this Agreement, Owner hereby grants City, Contractor, and the officers, agents, employees, and subcontractors of each, plus representatives of

20.9 3
the EWP Program, a right of entry and temporary construction easement over the Property to engage in all activities required to direct, perform, inspect, monitor, and audit the work required to complete the Project. These rights shall expire in relation to Contractor and its officers, agents, employees, and subcontractors upon completion of the work and acceptance of the Project by the City Engineer. These rights shall expire in relation to City and the EWP Program upon satisfactory completion of all audits by the latter of the work funded by the EWP Grant.

6. ADVANCE OF FUNDS/REIMBURSMENT BY OWNER: Owner shall reimburse City for the share of construction and engineering costs required of City as the local non-federal sponsor under the EWP Program and EWP Grant. Upon execution of this Agreement, Owner agrees to make an initial payment in the amount of $105,450 based on the following:
(a) The non-federal share of the total cost of the EWP Grant-eligible cost of the emergency repairs in the amount of $93,500. The non-federal share represents 25% of the estimated $374,000 (“Estimated Amount”) Project construction costs derived by the Owner’s engineer when EWP funds were applied for with NRCS, attached hereto as Exhibit B. City will invoice Owner for the remaining amounts due as costs are incurred. It is further understood that Owner is responsible for 100% of any additional costs arising during the course of performing the work, including contractor change orders, mitigation requirements or other changes in circumstances which are determined not to be covered by the EWP Program. If, after completion of the Project, any portion of the Project’s Estimated Amount has not been expended or committed for expenditure, the City shall return to the Owner such unexpended or uncommitted amount.
(b) All costs related to the City’s facilitation of the Project, including City staff time spent managing the Project, overhead costs, and performing other services (“Management Costs”). Prior to the commencement of the Project and upon execution of this Agreement, Owner agrees to make an initial payment in the amount of $11,950, as a deposit for Management Costs related to the Project (“Management Costs Deposit”). Upon completion of the Project, City shall calculate the actual Management Costs and reconcile with Owner.

Should final Management Costs exceed $11,950, the City shall invoice Owner for review and payment. Within thirty (30) days of receipt of the City invoice, Owner will pay and reimburse the City for all Management Costs exceeding the Management Costs Deposit. If, after the completion of the Project, any portion of the Management Costs Deposit have not been expended or committed for expenditure, the City shall return to the Owner such unexpended or uncommitted amount. Owner is not entitled to a return of any portion of the Management Costs Deposit which have been expended or irrevocably committed for expenditure, even if the EWP Grant or Project is withdrawn or cancelled prior to the completion of the Project.
(c) Upon completion of competitive bidding by the City, should the Project construction cost of the successful bidding Contractor exceed the Estimated Amount, Owner shall be solely responsible for all Project costs that exceed the Estimated Amount. Owner shall pay to City any and all amount that exceeds the Estimated Amount prior to and as a condition of City proceeding with the Project. The City may pursue an increase in the EWP Grant from the NRCS; however, in order for the Project construction to commence in a timely manner, and as a condition of City awarding the construction contract, Owner agrees to fund and pay

20.10 4
City 100% of the increased construction cost in the event NRCS denies the increased cost. (d) Upon completion of the Project, City shall pursue any post-Project funding made available under the EWP Program or through the Calfornia’s Governor’s Office of Emergency Services (“Cal OES”). Should the City procure post-Project funding, the City shall reimburse Owner up to the actual costs expended by Owner for the Project. Any postProject funding that exceeds Owner’s expenditures shall be retained by the City.

7. OWNER OBLIGATIONS IN REGARD TO UNANTICIPATED WORK REQUIRED BY REGULATORY AGENCIES: Owner understands and acknowledges that this Project is being completed under emergency conditions prior to City’s knowledge of any requirements of the Army Corps of Engineers, California Department of Fish and Wildlife, the State of California Regional Water Quality Control Board, or other regulatory agencies having jurisdiction over the location where the work will occur. In the event that any additional work is required by the above noted agencies, Owner agrees to perform said additional work at Owner’s sole cost and expense.

8. MAINTENANCE: Owner guarantees that all hillslope stabilization work performed under this Agreement shall be adequately maintained thereafter by Owner. This obligation includes maintenance of any vegetation required to be installed by permitting agencies subsequent to the completion of the emergency repairs.

9. INDEMNIFICATION/HOLD HARMLESS. Owner shall indemnify, defend, and hold harmless the City, its officials, officers, and employees (“City Parties”), from and against any and all liability, loss, expense (including reasonable attorneys’ fees), or claims or demands for any injury, death or damage (“Claims”) resulting from the acts or omissions of Owner, their respective agents, contractors, subcontractors or others acting on Owner’s behalf, or are under Owners’ authority or control in any way related to Owners’ obligations under this Agreement and/or the Project. This indemnity obligation, however, does not apply to the extent any Claims are proximately caused by the sole negligence of willful misconduct of the City Parties.

10. DEFAULT/LIEN: In the event of the failure by Owner to comply with any of the terms of this Agreement, which shall constitute a default under this Agreement, City shall issue a notice of default requiring Owner to cure the breach or default within a reasonable time period. Owner’s failure to cure a default related to Owner’s failure to make any payment required by Section 6 within ten (10) business days following City’s written notice thereof shall constitute grounds upon which City shall have the absolute right, and for the City to execute at the City’s option and without demand or notice to Owner, to claim and impose a lien, in a form similar to Exhibit C, attached and incorporated herein by this reference (“Claim of Lien”), on the Property associated with the Project (“Collateral”). City’s failure to exercise this option will not constitute a waiver of the right to exercise it in the event of any subsequent default.
(a) Amount of Lien. The Claim of Lien shall be for the entire amount invoiced and unpaid by Owner under this Agreement.
(b) Recordation. City is authorized to record the Claim of Lien in the appropriate Recorder’s Office(s).
(c) Warranty. Owner warrants that Owner is the owner of the Collateral and Owner has the right to make this Agreement.

20.11 5
(d) Covenants. Owner agrees (i) to pay City all amounts payable pursuant to this Agreement on or before the due date when due and payable and to perform all terms of this Agreement; (ii) to keep the Collateral in good condition and to perform other acts that may be reasonably necessary to preserve the Collateral and protect the Collateral against unreasonable loss and all hazards; (iii) to promptly notify the City in writing when Owner becomes aware of any event that substantially affects the value of the Collateral, or the rights and remedies of City in relation to the Collateral.
(e) Release of Claim of Lien. Promptly after the payment of the full amount owing under the Claim of Lien, City shall take such actions and record such documents in the County of Santa Cruz Recorder’s Office as may be required to terminate the Claim of Lien.

11. COVENANTS RUN WITH THE LAND: All the terms and conditions in this Agreement shall run with the land and shall be binding upon the Owner and their respective heirs, successors, transferees, trustees, executors, administrators, and assigns, having or acquiring any right, title, or interest in or to all or any part of the real property. The acceptance of any deed or other written instrument of conveyance shall constitute acceptance of the terms, conditions, and restrictions contained herein. Any successor in interest to property owner, including, without limitation, any purchaser, transferee, or lessee of a portion of the real property, shall be subject to all the duties and obligations imposed hereby. Promptly after (a) Owner’s payment of all amounts owning to City pursuant to this Agreement, the Parties shall take such actions and record such documents in the County of Santa Cruz Recorder’s Office as may be required to terminate this Agreement.

12. ATTORNEY FEES: In the event either party brings an action or proceeding for damages arising out of the other’s performance under this Agreement or to establish the right or remedy of either party, the prevailing party shall be entitled to recover reasonable attorney fees and costs as part of such action or proceeding, whether or not such action or proceeding is processed to judgment.

13. NOTICE: All notices required or authorized by this Agreement shall be in writing and shall be delivered in person or by deposit in the United States mail, by certified mail, postage prepaid, return receipt requested. Any mailed notice, demand, request, consent, approval or communication that either party desires to give the other party shall be addressed to the other party at the address set forth below. Either party may change its address by notifying the other party of the change of address. Any notice sent by mail in the manner prescribed by this paragraph shall be deemed to have been received on the date noted on the return receipt or five days following the date of deposit, whichever is earlier:

City: City of Santa Cruz public Works Department
Kevin Crossley P.E., City Engineer
809 Center Street
Santa Cruz, CA 95060
Owner: Robert Winton
141 Archer Dr
Santa Cruz, CA 95060

20.12 6

14. INTERPRETATION AND VENUE:
(a) Interpretation. The headings used herein are for reference only. The terms of the Agreement are set out in the text under the headings. This Agreement shall be governed by the laws of the State of California without regard to the choice of law or conflicts. This Agreement is deemed to have been drafted jointly by the Parties. Any uncertainty or ambiguity shall not be construed for or against any party based upon attribution of drafting to any Party. (b) Venue. This Agreement is made in Santa Cruz County, California. The venue for any legal action in state court filed by either party to this Agreement for the purpose of interpreting or enforcing any provision of this Agreement shall be in the Superior Court of California, County of Santa Cruz. The venue for any legal action in federal court filed by either party to this Agreement for the purpose of interpreting or enforcing any provision of this Agreement lying within the jurisdiction of the federal courts shall be the Northern District of California. The appropriate venue for arbitration, mediation, or similar legal proceedings under this Agreement shall be Santa Cruz County, California; however, nothing in this sentence shall obligate either party to submit to mediation or arbitration any dispute arising under this Agreement.

15. WARRANTY OF AUTHORITY: By their signatures below, the parties herein acknowledge that they have read the terms of this Agreement, understand the terms thereof and are fully agreed thereto, and their respective signatures serve to legally obligate their respective successors, assigns, and agents to comply with the provisions of this Agreement.

16. AMENDMENT/MODIFICATION: Except as specifically provided herein, this Agreement may be modified or amended only in writing and with the prior written consent of both parties.

17. THIRD PARTY BENEFICIARIES: Nothing contained in this Agreement shall be construed to create any rights in third parties and the parties do not intend to create such rights.

18. ATTORNEY'S FEES: In the event that either party commences legal action of any kind or character to either enforce the provisions of this Agreement or to obtain damages for breach thereof, the prevailing party in such litigation shall be entitled to all costs and reasonable attorney's fees incurred in connection with such action.

19. SEVERABILITY: If any provision of this Agreement, or any portion thereof, is found by any court of competent jurisdiction to be unenforceable or invalid for any reason, such provision shall be severable and shall not in any way impair the enforceability of any other provision of this Agreement.

20. COUNTERPARTS: This Agreement may be executed in counterparts, and when each party has signed and delivered at least one such counterpart, each one shall be deemed an original and, when taken together with other signed counterparts, shall constitute one agreement, which shall be binding on and effective regarding all parties. Facsimile and scanned signatures have the same force and effect as original signatures.

21. ENTIRETY OF CONTRACT: This Agreement, including the provisions of the EWP Grant and EWP Grant Program (which are incorporated by this reference as if set forth herein) to

20.13 7
the extent they apply to the City as the Local Contracting Organization and to Owner as the benefited landowner, constitutes the entire agreement between the parties relating to the subject of this Agreement and supersedes all previous agreements, promises, representations, understandings, and negotiations, whether written or oral, among the parties with respect to the subject matter hereof.
[Signatures on the following page.]
City:

City of Santa Cruz

By ________________________________ Date:________________________ Matt Huffaker
City Manager
Owner:

Robert Winton
By: Date:_________________________

By: Date:__________________________

APPROVED AS TO FORM:

By:______________________ Date:__________________________ Office of the City Attorney

20.14 8

ACKNOWLEDGMENT
State of California )
County of _____________________ )
On ______________________ before me, ___________________________________________, (insert name and title of the officer)
personally appeared ____________________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature ______________________________ (Seal)
A notary public or other officer completing this
certificate verifies only the identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.

20.15 9

20.16 10

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

20.17 11

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

20.18 12
Exhibit A: Legal Description
[Insert Legal Description]

20.19 13
Exhibit B: Cost Estimate

20.20 14
Exhibit C: Claim of Lien
Recording Requested By:

City of Santa Cruz
And When Recorded Return To:

CLAIM OF LIEN
I, _______________, Public Works Director for the City of Santa Cruz, a California Municipal Corporation (“City”), do hereby certify:

A. On or about _______________, 2023, _________________________ (the “Debtor”) executed a Reimbursement Agreement for Emergency Watershed Protection Program (“Agreement”) with the City of Santa Cruz.

B. The Agreement was recorded in the Santa Cruz County Recorder’s Office on or about _______________, 2023 as Document Number _______________.

C. The Agreement obligated Debtor to indemnify and hold harmless the City of Santa Cruz and its officials, officers, employees, attorneys, and agents (collectively “City Parties”) from and against any and all claims, demands, actions, proceedings, damages, losses, judgments, fines, penalties, liabilities, costs and expenses (including without limitation, attorney’s fees and court costs) incurred by the City Parties in connection with the project to repair storm-related hillslope damage (“Project”). Pursuant to the terms of the Agreement, Debtor expressly agreed to fund and/or reimburse the City for all non-federal share costs of the Project, including those paymentsset forth in the Agreement. Pursuant to the Agreement, the City was authorized to claim and impose a lien on the real property upon which the Project is located.

D. The City delivered to Debtor an itemized written invoice, accompanied by reasonably detailed supporting documentation of City’s actual out of pocket expenses on ___________. Debtors failed to make such required payment of [$__________].

E. Due to failure to comply with the City’s request, the City then sent a notice of default to Debtor on or about _______________, 20__, to cure the default and make such payment within ten (10) business days. Debtor failed to cure the default within the required time, and the Parties were unable to resolve their disagreements regarding the invoiced charges.

20.21 15
F. Pursuant to the terms of the Agreement, the Debtors expressly agreed that the City is authorized to, at the City’s option and without further demand or notice to the Debtors, and provided there is no good faith dispute regarding the amounts payable, immediately claim and impose a lien on the real property commonly known as 141 Archer Drive, Santa Cruz, California, APN Number 006- 031-37 , for the entire amounts then owing under the Agreement.

WHEREFORE, the City of Santa Cruz, A California municipal corporation, pursuant to the Agreement, hereby claims a lien upon the real property upon which the Project is located, commonly known as 141 Archer Drive, Santa Cruz, California, APN Number 006-031-37, in the amount of $____________________ and said amount shall constitute a lien against said property until paid in full.

IN WITNESS WHEREOF the City of Santa Cruz, California, a California Municipal Corporation, has duly authorized the undersigned to execute this instrument in its name.

Dated: _____________________________
By: ______________________________
For the CITY OF SANTA CRUZ,
a California municipal corporation
(Notary Acknowledgement Required for Signatures)

20.22 16

ACKNOWLEDGMENT
State of California )
County of _____________________ )
On ______________________ before me, ___________________________________________, (insert name and title of the officer) personally appeared ____________________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

20.23 City of Santa Cruz

BUDGET ADJUSTMENT REQUEST
Administrative Approval
Fiscal Year:

ACCOUNT PROJECT NAME (if applicable) OR REVENUE ACCOUNT TITLE ACCOUNT PROJECT NAME (if applicable) OR EXPENDITURE ACCOUNTTITLE NET: $

REQUESTEDBY DEPARTMENTHEAD

APPROVAL

BUDGET/ACCOUNTING

REVIEWED

FINANCE DIRECTOR

APPROVAL

CITYMANAGER

APPROVAL
Reso #:

PROJECT

PROJECT
AMOUNT
AMOUNT
Council Approval

TOTALEXPENDITURE

TOTALREVENUE
Date:

Purpose:

Revised November 3, 2022
Clear Form 2024 10/10/2024
Appropriation to replace failed retaining wall along public right of way on Bay Street 311-40-64-9341-43150 g402402-111-1071-0 USDA - NRCD - Emergency Watershed Protection Program 308,550 Retaining Wall Reconstruction - 141 Archer Dr 311-40-64-9341-46305 g402402-496-0-0 Contributions - property owners 105,450 Retaining Wall Reconstruction - 141 Archer Dr 414,000 311-40-64-9341-57990 g402402-100-2020-0 Other capital outlay 414,000 Retaining Wall Reconstruction - 141 Archer Dr 414,000 0 2023.10.03
07:52:22
-07'00'
Nathan
Nguyen
Digitally signed by
Nathan Nguyen
Date: 2023.10.02
14:51:18 -07'00'
Tiffany
Lewis
Digitally signed
by Tiffany Lewis
Date: 2023.10.03
16:03:44 -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: 2023.10.04 15:35:27 -07'00'

20.24 City Council

AGENDA REPORT
DATE: 10/05/2023
AGENDA OF: 10/24/2023
DEPARTMENT: Water
SUBJECT: Award Agreement for Fisheries Biology Support from Hagar Environmental Science (WT)
RECOMMENDATION: Motion authorizing the City Manager to execute an agreement in a form to be approved by the City Attorney with Hagar Environmental Science for ongoing fisheries biology support of the City of Santa Cruz's Habitat Conservation Plan development and Incidental Take Permitting, and to authorize the Water Director to execute up to four annual agreement renewals.

BACKGROUND: The Water Department (Department) has been working on the Anadromous Salmonid Habitat Conservation Plan (ASHCP or HCP) and Endangered Species Act (ESA) Section 10a1b permit for well over 20 years. The HCP evaluates the biological effects of the Water Department’s operations on special-status species including coho salmon and steelhead trout and provides a conservation strategy for avoidance and minimization of those effects as well as mitigation for remaining effects that can’t be avoided or minimized. Department staff meet routinely with National Marine Fisheries Service (NMFS) and Department of Fish and Wildlife (DFW) staff to negotiate the conservation strategy, monitoring plan, and related pieces of the overall HCP. This work is supported by significant contributions from our consulting fisheries biologists at Hagar Environmental Science (HES).

The development of any Habitat Conservation Plan requires a significant investment in scientific investigations and evaluations, as well as in developing documentation of results for that work.

Implementation of Habitat Conservation Plans also requires ongoing compliance and effectiveness monitoring as well as consultation on avoidance and minimization measures and Non-Flow Conservation Fund-related project implementation. The Water Department utilizes HES to perform technical monitoring tasks, such as Laguna Creek/San Lorenzo River seining and North Coast stream electrofishing, and as-needed consulting to support ongoing permit negotiations and permit implementation. As the Water Department nears completion of the HCP, HES’s work will evolve to more technical support for HCP implementation and less as-needed permit negotiation. The amount of support needed from HES is largely driven by regulatory agency inquiries and ever-changing operational needs of the Water Department so the amount spent each year will vary but will exceed the formal bid limit of $100,000.

DISCUSSION: On 5/9/2017, Council authorized the Water Department to issue annual purchase orders with HES for work on the HCP exceeding the formal bid limit for a period of five years. Work to develop the HCP continues, and staff is requesting authorization to award an

21.1 agreement to continue utilizing HES consulting biologists for fisheries biology support as needed in an amount exceeding $100,000 per fiscal year.

HES has been supporting the HCP work since 2005, and during this time has gained unique and invaluable technical and scientific knowledge of our water operations, local fish population, and local permitting requirements. They also have a unique understanding of the many other related Water Department projects, as well as those of neighboring agencies. The Water Department is nearing completion of the HCP and switching the primary fisheries biologist before the it is complete would be a significant set-back causing a delay of months, if not years, and large amounts of staff time to educate and bring a new biologist up to speed. Due to the need to maintain continuity of the technical and analytical work at this critical stage of the current HCP efforts, the Water Department recommends, and the Purchasing Manager concurs, continuing to work with HES on a single-source basis, with up to four annual renewals as agreed to by the City and HES.

FISCAL IMPACT: The Water Resources Management FY 2024 operating budget has sufficient funds to support this work.

Prepared By:

Chris Berry
Watershed Compliance
Manager
Submitted By:

Rosemary Menard
Water Director
Approved By:

Matt Huffaker
City Manager
ATTACHMENTS:

1. PROFESSIONAL SERVICES AGREEMENT.PDF

21.2 City of Santa Cruz Professional Services Agreement for Fisheries Biology Support
October 2023 (Rev Jan 2023) Page 1
Professional Services Agreement With

HAGAR ENVIRONMENTAL SCIENCE
For FISHERIES BIOLOGY SUPPORT
THIS AGREEMENT for professional services is made by and between the City of Santa Cruz (“City”) and Hagar Environmental Science (“Consultant”) (each is referred to individually as a “Party” and collectively, as the “Parties”) and made retroactive to July 1, 2023 (the “Effective Date”).

NOW, THEREFORE, in consideration of each other’s mutual promises, the Parties hereto agree as follows:

SECTION 1: SCOPE OF WORK
Consultant will furnish services as defined and described in the Scope of Work, attached hereto as Exhibit A and incorporated herein.

Consultant shall meet with Rosemary Menard, Director of the Water Department, hereinafter called "Director", or other designated and authorized City personnel, or third parties as necessary, on all matters connected with carrying out of Consultant’s services described in Exhibit A. Such meetings shall be held at the request of either Party.

Review and City approval of completed work shall be obtained monthly, or at other intervals as may be mutually agreed upon during the course of this Agreement. Review, approval, or acceptance of Consultant’s work by City or others shall not relieve Consultant from responsibility for errors and omissions in Consultant’s work.

21.3 City of Santa Cruz Professional Services Agreement for Fisheries Biology Support
October 2023 (Rev Jan 2023) Page 2
SECTION 4: TERM OF CONTRACT AND CONTRACT RENEWAL
The term of the contract will commence the effective date and continue to June 30, 2024, plus up to four annual renewals agreed to by the parties. At the option of the City, this contract may be renewed annually under the same contractual terms and conditions.

SECTION 5: FEES AND PAYMENT
For services actually performed, the City will compensate Consultant at the rates set forth in the Fee Schedule detailed in Exhibit B-1 and Exhibit B-2 and in accordance with the terms set forth therein. Such payment shall be considered the full compensation for all personnel, materials, supplies, and equipment used by Consultant in the Scope of Work.

Consultant agrees that the payments to Consultant specified in this Section 5 will constitute full and complete compensation for all obligations assumed by Consultant under this Agreement. Where conflicts regarding compensation may occur, the provisions of this section apply.

Variations from the budget for each task which are justified by statements indicating personnel time expended and submittal of a revised budget are only allowed with prior City approval; however, in no event shall the total fee charged for the Scope of Work set forth in Exhibit A exceed the Fee Schedule rates in Exhibit B-1 and B-2 without advance written City authorization in the form of an amendment or change order.

Invoices shall detail the time worked by each class of employee on each task and the expenses incurred for which billing is made. Unless otherwise specified in the fee schedule, payments shall be made monthly by the City within 30 days based on itemized invoices from the Consultant which list the actual costs and expenses.

SECTION 6: AMENDING FEE SCHEDULES
After December 31, 2023, Consultant may request once annually changes to Exhibits B-1 and B-2, Fee Schedules.

Increases in the hourly rates may not exceed increases in the San Francisco-Oakland-Hayward Consumer Price Index for all urban wage earners as published by the Bureau of Labor Statistics, or 5%, whichever is less. At the City’s option, an increase in hourly rates will be authorized through an Amendment to replace Exhibit B-1, B-2, or both. The City may cancel the contract if a requested price increase is not acceptable.

SECTION 7: TRAVEL REIMBURSEMENT POLICY
The City agrees to reimburse Consultant and Consultant’s employee(s) for only authorized travel expenses, as indicated by a mark below, and according to the City’s Travel Reimbursement Policy. It is expected that all travel

21.4 City of Santa Cruz Professional Services Agreement for Fisheries Biology Support
October 2023 (Rev Jan 2023) Page 3
expenses incurred by Consultant while conducting activities on behalf of the City will be at reasonable rates and that Consultant and Consultant’s employee(s) will exercise prudence in incurring these expenses. ☒ Meals: Meals are reimbursed at the current GSA Meals & Incidental per diem rate by county (www.gsa.gov/travel). The City does not reimburse for actual costs for meals. Reimbursement is based solely on per diem rates. Do not submit meal receipts.
• Travel before 8:00am qualifies for breakfast reimbursement. • Travel between 8:00am – 1:30pm qualifies for lunch reimbursement. • Travel between 1:30pm – 7:00pm (or later) qualifies for dinner reimbursement. • Days between hotel stays and days starting before 8am and ending after 7pm, qualify for the full GSA Meals & Incidental per diem rate.
☒ Ground Transportation: Ground transportation is reimbursable when it is for travel between the Consultant’s place of business, an airport, or Santa Cruz hotel, as applicable, to the City work location.

1. Reasonable fees for taxis, shuttles, buses, trains, light rail, ride hailing services (Uber, Lyft or other), and similar modes of transportation will be reimbursed. Receipts are required for reimbursement.

2. When using vehicles owned by Consultant or Consultant’s employer:
• Mileage will be reimbursed at the current IRS mileage rate. • Evidence of automobile liability insurance meeting the City’s requirements must be provided. • Maps showing starting point, City work location, and total miles are required for reimbursement.

3. Use of car rentals are reimbursable when:
• Travel is necessary from an airport to the City work location. • The rental reservation is made as far in advance as is practical and the lowest possible price is obtained. • Insurance coverage is included, and the car is returned with a full tank of gas. • The smallest vehicle necessary is rented.
• Parking expenses are included in the GSA Meals & Incidental per diem rate. The City will not pay additionally for parking expenses.
• Receipts are required for reimbursement.
☐ Airfare: Airfare is reimbursable when the Consultant’s place of business, or Consultant’s employee’s home, is more than 250 miles away from Santa Cruz.
• Airfare must be lowest available coach class fare. Flights may be non-stop. • Airfare must be booked as far in advance as is practical. • Fees for one piece of checked luggage (and any equipment necessary for the work being done) will be reimbursed.
• Extra charges for seat assignments, refundable tickets, travel insurance/protection, and similar fees are not reimbursable.
• If the City cancels the need for travel and the ticket cannot be changed or refunded, the ticket cost will be reimbursable.
• Receipts are required for reimbursement.
☒ Lodging: Lodging is reimbursable when the Consultant must work on site for two or more consecutive days and the Consultant’s place of business or personal residence, is more than 60 miles away from Santa Cruz. • Lodging is reimbursed up to the current GSA rate by county (www.gsa.gov/travel). • Costs for hotel rooms above this rate are the responsibility of the traveler. • Receipts are required for reimbursement.

21.5 City of Santa Cruz Professional Services Agreement for Fisheries Biology Support
October 2023 (Rev Jan 2023) Page 4
General Rule

1. Travel expenses not listed or checked above will not be reimbursed.

2. Travel reimbursements are paid after the completion of travel. There are no travel advances.

3. Exceptions to any of the above requirements require advance written permission from the Director or City’s designated agent contracting with the Consultant.

4. Tips and gratuities will not be reimbursed.

5. Alcoholic beverage purchases will not be reimbursed.

6. Consultants will exercise prudence in incurring reimbursable expenses.

7. The City of Santa Cruz has the sole discretion to deny any reimbursement request the City has determined to be excessive or an inappropriate use of public funds.

SECTION 8: CHANGES IN WORK
City may negotiate changes in the Scope of Work. No changes in the Scope of Work shall be made without the written approval of City and Consultant. Any change requiring compensation in excess of the sum specified in Exhibit B-1 and B-2 shall be approved in advance in writing by the City. Only City’s authorized representative(s) is authorized to approve changes to this Agreement on behalf of City.

SECTION 9: TERM AND SCHEDULE
The term of this Agreement shall be on the effective date of this Agreement and terminating on June 30, 2024. At the option of the City, this Agreement may be renewed annually under the same contractual terms and conditions by letter agreement.

Consultant shall begin work as specified in a written authorization (e.g., Notice to Proceed) to perform services. The written authorization to perform work shall not be issued until after this Agreement has been approved and authorized by the City.

The Work Schedule for completion of the work shall be as shown upon Exhibit C. In the event that major changes are ordered, the schedule for completion as stated in Exhibit C may be adjusted by City so as to allow Consultant a reasonable period of time within which to complete any additional work which may be required as a result of the ordered changes.

The City reserves the right to obtain the item(s) and/or services covered by this Agreement from another source during any on-going suspension of service due to the circumstances outlined above.

Consultant acknowledges that it is necessary for Consultant to complete its work on or before the completion date set forth in Exhibit C in order to allow the City to achieve its objectives for entering into this Agreement. The Parties therefore agree that time is of the essence in the performance of this Agreement.

SECTION 10: TERMINATION
The City may terminate the Agreement for any reason by providing written notice to Consultant not less than 10 calendar days prior to an effective termination date.

21.6 City of Santa Cruz Professional Services Agreement for Fisheries Biology Support
October 2023 (Rev Jan 2023) Page 5
The Consultant may terminate the Agreement for cause by providing written notice to the City` not less than 30 calendar days prior to an effective termination date.

The City may, at its option, allow Consultant to cure its failure to perform within 10 business days (or longer period authorized in writing by the City) from the date of the City’s termination notice. The termination shall be become effective if Consultant has not cured within the specified time period to the City’s satisfaction.

Upon notice of termination by either the City or Consultant, the Consultant will immediately act to not incur any additional obligations, costs or expenses, except as may be reasonably necessary to terminate its activities. The City’s only obligation to the Consultant will be just and equitable payment for services authorized by, and received to the satisfaction of, the City up to and including the effective date of termination less any amounts withheld. All finished or unfinished work or documents procured or produced under the Agreement will become property of the City upon the termination date. In the event of Consultant’s failure to perform pursuant to the Agreement, the City reserves the right to obtain services elsewhere and Consultant will be liable for the difference between the prices set forth in the terminated Agreement and the actual cost to the City. Termination of the Agreement pursuant to this paragraph shall not relieve the Consultant of any liability to City for additional costs, expenses, or damages sustained by City due to failure of the Consultant to perform pursuant to the Agreement. City may withhold any payments to Consultant for the purpose of set-off until such time as the exact amount of damages due City from Consultant is determined. After the effective date of termination, Consultant will have no further claims against the City under the Agreement. No other compensation will be payable for anticipated profit on unperformed services.

SECTION 11: INSURANCE
Prior to the beginning of and throughout the duration of the Agreement, Consultant will maintain and comply with the Insurance Requirements as set forth in Exhibit D.

SECTION 12: INDEMNIFICATION
Consultant agrees, to the fullest extent permitted by law, to indemnify, defend, and hold harmless the City, its officials, officers, employees, agents, and volunteers (collectively, “Indemnitees”) from and against any and all liability, claim, action, loss, injury, damage, judgment, or expense, including attorneys’ fees and costs (“Losses”) caused by or resulting from the negligence, recklessness, or willful misconduct of Consultant, Consultant’s officers, employees, agents, or subcontractors in any way related to this Agreement. Consultant’s duty to indemnify and hold harmless Indemnitees shall not apply to the extent such Losses are caused by the sole or active negligence or willful misconduct of Indemnitees. Consultant’s obligation to defend shall arise regardless of any claim or assertion that Indemnitees caused or contributed to the Losses.

21.7 City of Santa Cruz Professional Services Agreement for Fisheries Biology Support
October 2023 (Rev Jan 2023) Page 6
SECTION 13: EQUAL EMPLOYMENT OPPORTUNITY/NON-DISCRIMINATION POLICIES City’s policies promote a working environment free from abusive conduct, discrimination, harassment, and retaliation; and require equal opportunity in employment for all regardless of race, religious creed (including religious dress and grooming practices), color, national origin (including language use restrictions), ancestry, religion, disability (mental and physical), medical condition, sex, gender (including gender identity and gender expression), physical characteristics, marital status, age, sexual orientation, genetic information (including family health history and genetic test results), organizational affiliation, and military or veteran status, or any other consideration made unlawful by local, State or Federal law. City requires Consultant to comply with all applicable Federal and State and local equal employment opportunity laws and regulations, and Consultant is responsible for ensuring that effective policies and procedures concerning the prevention of abusive conduct, discrimination, harassment, and retaliation exist in Consultant’s business organization. The City’s current Equal Employment Opportunity and Non-Discrimination policies to which this Section applies may be viewed at http://www.codepublishing.com/CA/SantaCruz/?SantaCruz09/SantaCruz0983.html and http://www.cityofsantacruz.com/home/showdocument?id=59192.

SECTION 14: LEGAL ACTION/ATTORNEYS’ FEES
If any action at law or in equity is brought to enforce or interpret the provisions of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees in addition to any other relief. The laws of the State of California, with jurisdiction in the Santa Cruz County Superior Court, shall govern all matters relating to the validity, interpretation, and effect of this Agreement and any authorized or alleged changes, the performance of any of its terms, as well as the rights and obligations of Consultant and the City.

SECTION 15: AMENDMENTS
This Agreement may not be amended in any respect except by way of a written instrument which expressly references and identifies this particular Agreement, which expressly states that its purpose is to amend this particular Agreement, and which is duly executed by the City and Consultant. Consultant acknowledges that no such amendment shall be effective until approved and authorized by the City’s authorized representative. No representative of the City is authorized to obligate the City to pay the cost or value of services beyond the scope of services set forth in Exhibit A.

Such authority is retained solely by the City Manager, Director, or their designee. Unless expressly authorized by the City Manager or Director, Consultant’s compensation shall be limited to that set forth in Exhibit B-1 and B-2, Fee Schedules.

SECTION 16: MISCELLANEOUS PROVISIONS

2. Consultant Services Only. Consultant is employed to render professional services only and any payments made to Consultant are compensation solely for such professional services.

21.8 City of Santa Cruz Professional Services Agreement for Fisheries Biology Support
October 2023 (Rev Jan 2023) Page 7
or liability, including attorneys’ fees and costs, arising in any manner related to this Agreement that an employee, agent or others under Consultant’s supervision or control was misclassified.

5. Subcontractors. Consultant shall obtain prior approval of the City prior to subcontracting of any work pursuant to this Agreement. If at any time, the City determines any subcontractor is incompetent or unqualified, Consultant will be notified and will be expected to immediately cancel the subcontract. Consultant shall require and verify that all subcontractors maintain insurance meeting all of the requirements stated herein, including naming the City of Santa Cruz, its officers, officials, employees, agents, and volunteers as additional insureds. Any modification to the insurance requirements for subcontractors must be agreed to by the City in writing.

6. Assignment. This Agreement shall not be assigned without first obtaining the express written consent of the Director or after approval of the City Council. Neither party may assign this Agreement unless this Agreement is amended in accordance with its terms.

7. Conflicts of Interest. Consultant agrees to comply with conflict of interest lawsin performing the work and services under this Agreement. Consultant covenants (on behalf of Consultant and Consultant’s employees, agents, representatives, and subcontractors) that there is no direct or indirect interest, financial or otherwise, which would conflict in any manner or degree with the performance of services required under this Agreement. Consultant acknowledges and agrees to comply with applicable provisions of conflict of interest law and regulations, including the CA Political Reform Act, Sections 1090 and 87100 of the Government Code, and the City’s conflict of interest code. Consultant will immediately advise City if Consultant learns of a conflicting financial interest of Consultant during the term of this Agreement.

Consultant’s final deliverables shall comply with Section 508 (29 U.S.C. Section 794d) accessibility requirements, as applicable.

21.9 City of Santa Cruz Professional Services Agreement for Fisheries Biology Support
October 2023 (Rev Jan 2023) Page 8
expenses (including reasonable attorneys’ fees and costs) arising out of a claim of infringement, actual or alleged, direct or contributory, of any Intellectual Property rights in any way related to Consultant’s performance under this Agreement or to the City’s authorized intended or actual use of Consultant’s product or service under this Agreement. This provision shall survive termination or expiration of this Agreement.

10. Confidentiality.
a. Consultant shall not acquire any ownership interest in data and information (“City Data”) received by Consultant from City, which shall remain the property of the City. Certain information may be considered confidential (“Confidential Information”). Confidential Information shall mean all information or proprietary materials (in every form and media) not generally known to the public and which has been or is hereafter disclosed or made available directly or indirectly to Consultant through any means of communication, either verbally or in writing even if it has not been designated in writing as “Confidential” to Consultant in connection with this Agreement. Unless otherwise required by law, Consultant shall not, without City’s written permission, use or disclose City Data and/or Confidential Information other than in the performance of the obligations under this Agreement. As between Consultant and City, all City Confidential Information shall remain the property of the City. Consultant shall not acquire ownership interest in the City’s Confidential Information.
b. Consultant shall be responsible for ensuring and maintaining the security and confidentiality of City Data and Confidential Information, protect against any anticipated threats or hazards to the security or integrity of City Data and Confidential Information, protect against unauthorized access to or use of City Data and Confidential Information that could result in substantial harm or inconvenience to City or any end users; and ensure the proper return and/or disposal of City Data and Confidential Information upon termination of this Agreement with notice to the City.
c. Consultant shall take appropriate action to address any incident of unauthorized access to City Data and Confidential Information, including addressing and/or remedying the issue that resulted in such unauthorized access, notifying City as soon as possible of any incident of unauthorized access to City Data and Confidential Information, or any other breach in Consultant’s security that materially affects City or end users; and be responsible for ensuring compliance by its officers, employees, agents, and subcontractors with the confidentiality provisions hereof. Should confidential and/or legally protected City Data be divulged to unauthorized third parties, Consultant shall comply with all applicable federal and state laws and regulations, including but not limited to California Civil Code sections 1798.29 and 1798.82 at Consultant’s sole expense. Consultant shall not charge City for any expenses associated with Consultant’s compliance with these obligations.

d. Consultant shall defend, indemnify and hold harmless City, its officials, officers, employees and agents against any claim, liability, loss, injury or damage (including attorneys’ fee and costs) arising out of, or in connection with, the unauthorized use, access, and/or disclosure of City Data and/or Confidential

21.10 City of Santa Cruz Professional Services Agreement for Fisheries Biology Support
October 2023 (Rev Jan 2023) Page 9
Information by Consultant and/or its agents, employees or subcontractors, excepting only loss, injury or damage caused by the sole negligence or willful misconduct of the City. This provision shall survive the termination or expiration of this Agreement.

For additional information and licensing requirements, view the City’s Business Licenses and Permits webpage or call the Revenue and Taxation division at 831/420-5070.

21.11 City of Santa Cruz Professional Services Agreement for Fisheries Biology Support
October 2023 (Rev Jan 2023) Page 10
Agreement. Consultant (and any subconsultant) shall adhere to the prevailing wage determinations made by the Director of Industrial Relations (DIR) pursuant to California Labor Code Part 7, Chapter 1, Article 2, applicable to the work, if any. All workers employed in the execution of a public works contract (as such term is defined California Labor Code section 1720 et seq. and section 1782(d)(1)) must be paid not less than the specified prevailing wage rates for the type of work performed. (CA Labor Code sections 1720, 1774 and 1782.) To the extent applicable to the scope of work and services under this Agreement, Consultant agrees to be bound by the state prevailing wage requirements, including, but not limited to, the following:
a. If a worker is paid less than the applicable prevailing wage rate owed for a calendar day (or any portion thereof), Consultant shall pay the worker the difference between the prevailing wage rate and the amount actually paid for each calendar day (or portion thereof) for which the worker(s) was paid less than the prevailing wage rate, as specified in Labor Code section 1775; b. Consultant shall maintain and make available payroll and worker records in accordance with Labor Code sections 1776 and 1812;
c. If Consultant employs (and/or is legally required to employ) apprentices in performing the work and/or services under this Agreement, Consultant shall ensure compliance with Labor Code section 1777.5; d. Consultant is aware of the limitations imposed on overtime work by Labor Code sections 1810 et seq. and shall be responsible for any penalties levied in accordance with Labor Code section 1813 for failing to pay required overtime wages;
e. Consultant shall post a copy of the applicable wage rates at each jobsite at a location readily available to its workers.
f. Any failure of Consultant and/or its subconsultant to comply with the above requirements relating to a public work project shall constitute a breach of this Agreement that excuses the City’s performance of this Agreement at the City’s sole and absolute option and shall be at the sole risk of Consultant. Consultant on behalf of itself and any subconsultant, agree to indemnify, defend and hold harmless the City and its officials, officers, employees, and agents from and against any and all claims, liabilities, losses, costs, expenses, attorney’s fees, damages, expenses, fines, financial consequences, interest, and penalties, of any kind or nature, arising from or relating to any failure (or alleged failure) of the Consultant and any subconsultant to pay prevailing wages or to otherwise comply with the requirements of prevailing wage law relating to a public work.
g. Consultant acknowledges that it and/or any subconsultant may not engage in the performance of any contract for public work unless currently registered with the DIR and qualified to perform public work pursuant to Labor Code section 1725.5 [with limited exceptions from this requirement for bid purposes only under Labor Code section 1771.1(a)].

21.12 City of Santa Cruz Professional Services Agreement for Fisheries Biology Support
October 2023 (Rev Jan 2023) Page 11
written notice in letter form to the other party, setting forth the subject of the dispute and the relief requested.

21. Severability. The unenforceability, invalidity or illegality of any provision(s) of this Agreement shall not render the other provisions unenforceable, invalid or illegal.

22. Waiver. Waiver by any party of any portion of this Agreement shall not constitute a waiver of the same or any other portion hereof.

23. Governing Law. This Agreement shall be governed by and interpreted in accordance with California law.

21.13 City of Santa Cruz Professional Services Agreement for Fisheries Biology Support
October 2023 (Rev Jan 2023) Page 12
To CITY:

City of Santa Cruz Water Department
Rosemary Menard, Water Director
212 Locust Street, Suite A
Santa Cruz, CA 95060
[email protected]
(831) 420-5200
To CONSULTANT:

Hagar Environmental Sciences
Jeff Hagar, Principal/Senior Biologist
2443 Fillmore St #380-6028
San Francisco CA 94115
[email protected]
(510)333-9410
Changes to the above information shall be given to the other party in writing ten (10) business days before the change is effective.

21.14 City of Santa Cruz Professional Services Agreement for Fisheries Biology Support
October 2023 (Rev Jan 2023) Page 13
Approved As To Form:

By: _____________________________ Date: __________________ Office of the City Attorney

CITY OF SANTA CRUZ
By: _____________________________ Date: __________________ Matt Huffaker
City Manager

CONSULTANT
By: _____________________________ Date: __________________ Printed: ___________________________ Title: __________________

WATER DEPARTMENT
By: _____________________________ Date: __________________ Rosemary Menard
Water Director

21.15 City of Santa Cruz Professional Services Agreement for Fisheries Biology Support
October 2023 (Rev Jan 2023) Page 14
EXHIBIT A: SCOPE OF WORK
Consultant will provide fisheries biology services as-needed for various Water Department projects. The Scope of Work per project will be agreed to between the Parties in writing prior to commencement of work. The Consultant will be under the general supervision of the Watershed Compliance Manager.

Santa Cruz City CouncilOctober 24, 2023

Santa Cruz City Council
October 24, 2023