Agenda packet, second session — Santa Monica City Council, June 13, 2023 (part 1 of 3)

City of Santa Monica
City Council Meeting
AGENDA

GLEAM DAVIS
MAYOR

PHIL BROCK LANA NEGRETE

COUNCILMEMBER MAYOR PRO TEM

CHRISTINE PARRA CAROLINE TOROSIS

COUNCILMEMBER COUNCILMEMBER

JESSE ZWICK OSCAR DE LA TORRE

COUNCILMEMBER COUNCILMEMBER

DAVID WHITE

CITY MANAGER

DOUGLAS SLOAN

CITY ATTORNEY

DENISE ANDERSON-WARREN

CITY CLERK

STANDARDS OF BEHAVIOR THAT PROMOTE CIVILITY AT ALL PUBLIC MEETINGS:
• Treat everyone courteously; • Give open-minded consideration to all viewpoints; • Listen to others respectfully • Focus on the issues and avoid personalizing debate; • Exercise self-control • Embrace respectful disagreement and dissent as democratic rights, inherent components of an inclusive public process, and tools for forging sound decisions
Regular meetings are broadcast live on CityTV cable channel 16 and on the internet at santamonica.gov. Cable television re-broadcasts air on Thursday and Saturday at 11:30 AM. The agenda will air on CityTV on Saturday and Sunday at 11:00 AM and 6:00 PM, and on Monday and Tuesday at 12:30 PM and 6:00 PM.

City of Santa Monica Generated: 6/13/2023 12:52 PM Page 2

RULES OF ORDER FOR THE CONDUCT OF CITY COUNCIL MEETINGS (Resolution No.11494(CCS))

WAYS TO PROVIDE PUBLIC COMMENT
If you are interested in providing public comment at a City Council meeting, there are several ways to participate:
(1) Written public comment. In lieu of oral public comment, the public is strongly encouraged to submit written public comment on agenda items via email to [email protected]. Written public comment submitted before 12:00 pm on the day of the meeting will be available for online viewing. Please note the agenda item number in the subject line of your written comments. (2) Oral public comment. Persons wishing to address the City Council regarding items on the agenda must be present and submit their name and address (optional) to the City Clerk before the public comment section is opened for that item or before the public hearing is opened where one is required by law. Register to speak at the Speaker Kiosk prior to the meeting. Remarks from the public are limited to a total of 6 minutes per City Council meeting, with a maximum of 2 minutes and a minimum of one minute per item. Except for the author of the request, public comment on 15-items are limited to 1 minute. Except on Public Input, speakers appearing at the meeting in person, may donate 2 minutes to another person present in-person at the meeting, who may speak for a total of 4 minutes on that item.

Both the donor of time and the designated speaker must register at the Speaker Kiosk in person together.

Oral public comment from any one individual is limited to a total of 6 minutes per City Council meeting, with a maximum of 2 minutes per agenda item; under some circumstances, Council may change the maximum to 1 minute per agenda item.

ORDER OF BUSINESS (may not be changed except by majority vote of the City Council.)

1. General Public Input
(members of the public may address the City Council
only on items not on the agenda, but within the
subject matter jurisdiction of the City).

2. Public Comment for Closed Session, Special
Agenda, and Consent Calendar Items Only
(Commendations and Proclamations presented).

3. Closed Session.

4. Special Agenda Items (City Manager’s Report,
Presentations, etc.).

5. Consent Calendar (All items considered in one
motion unless removed by a City Councilmember for
discussion. Public comment shall be heard prior
to City Council discussion).

6. Public Comment on remaining Agenda Items

7. Study Session.

8. Continued Items.

9. Administrative Proceedings.

10. Ordinances:
• 1
st Reading
• 2
nd Reading

11. Staff Administrative Item.

12. Public Hearings.

13. Reports of Boards and Commissions.

14. Resolutions.

15. Written Communications (other than
Reports of Commission and Officers).

16. Councilmember Discussion Items.

Agendas and reports are accessible on the City's webpage at smgov.net/council/agendas. They are also available at the City Clerk's Office and in alternate formats upon request. For a free email subscription to the City Council Agendas, please contact the City Clerk’s Office at (310) 458-8211 or [email protected].

Si desea comunicarse con alguien en español, llame a nuestra oficina al (310) 458-8211 y pida hablar con Esterlina Lugo.

City of Santa Monica Generated: 6/13/2023 12:52 PM Page 3

AGENDAS

CITY OF SANTA MONICA

REGULAR MEETING

CITY HALL COUNCIL CHAMBERS
1685 MAIN STREET, ROOM 250,
TUESDAY, JUNE 13, 2023
MEETING BEGINS AT 5:30 PM
HOW TO PROVIDE WRITTEN PUBLIC COMMENT:

Written public comment can be submitted via email to [email protected].

Written comments received prior to 12:00 pm on the day of the meeting will be available online. Please note the agenda item number in the subject line of your written comments.

CALL TO ORDER

PLEDGE OF ALLEGIANCE

ROLL CALL

1. PUBLIC INPUT
(Public comment is permitted only on items not on the agenda that are within the subject matter jurisdiction of the City. State law prohibits the City Council from taking any action on items not listed on the agenda, including issues raised under this agenda item.)

1.A. Written Comments

2. PUBLIC INPUT (AGENDA ITEMS UNDER CLOSED SESSION, SPECIAL AGENDA

ITEMS, CONSENT CALENDAR ONLY)

3. CLOSED SESSIONS

3.A. Conference with Labor Negotiator: Government Code Section 54957.6— Agency Designated Representatives: City Manager David White and Chief People Officer Lori Gentles; Bargaining Unit: AFSCME Local 4819, Management Team Association - New Item Received. 6/09/2023

3.B. Conference with Legal Counsel – Existing Litigation – Gov. Code Section 54956.9(d)(1): Jennifer Howard; Amanda Pawlowski v. City of Santa Monica, et al.; LASC Case No. 21STCV42208 [report out only] - New Item Received. 6/09/2023
City of Santa Monica Generated: 6/13/2023 12:52 PM Page 4

3.C. Public Employee - Gov. Code Section 54957(b): Performance evaluation of a public employee; Title: City Attorney; Conference with Labor Negotiator - Gov.

Code Section 54957.6: City Negotiator: Mayor; Unrepresented Employee: City Attorney - Item pulled and will not be heard. 6/13/23

4. SPECIAL AGENDA ITEMS

4.A. Commendation: Santa Monica Tennis Collective 14u Team

4.B. Proclamation: Gun Violence Awareness Month

4.C. 2023 Juneteenth Proclamation
The following is the order of business for items to be heard no earlier than 7:00 p.m.

D. City Manager's Report

5. CONSENT CALENDAR
(All items will be considered and approved in one motion unless removed by a Councilmember for discussion. In accordance with Charter section 615, the adoption of all ordinances and resolutions shall be by reading of title only unless a Councilmember present dissents.)

5.A. Award Bid #4450 to Ferguson Waterworks as Primary and Core & Main as Secondary to Furnish & Deliver Water & Wastewater Department Supplies Recommended Action
Staff recommends that the City Council:

1. Adopt a finding of categorical exemption pursuant to Section 15302 (Replacement or Reconstruction) of the California Environmental Quality Act Guidelines.

2. Award Bid #4450 to Ferguson Waterworks as the primary vendor for the purchase of water and wastewater supplies and Core & Main as the secondary vendor for the purchase of water and wastewater supplies.

3. Authorize the Procurement Manager to issue a purchase order with Ferguson Waterworks in an amount not to exceed $410,000 for year one, with four additional one-year renewal options at approximately 10% escalator each year, for a total amount not to exceed $2,600,000 over five years, with future year funding contingent on Council budget approval.

4. Authorize the Procurement Manager to issue a purchase order with Core & Main in an amount not to exceed $100,000 for one year, with four additional one-year renewal options at a 10% increase each year, for a total amount not to exceed $610,000.00 over five years, with future year funding contingent on Council budget approval.

5.B. Award Bid for Street Light Electrical Repair Services and Urgent Electrical Construction
City of Santa Monica Generated: 6/13/2023 12:52 PM Page 5 Recommended Action
Staff recommends that the City Council:

1. Adopt a finding of Categorical Exemption pursuant to Section 15301 (Existing Facilities), of the California Environmental Quality Act (CEQA) Guidelines.

2. Award Bid #2685-4 to International Line Builders, Inc. as the primary contractor, Bear Electrical Solutions, Inc. as the secondary contractor, and Yunex LLC as tertiary contractor for citywide as-needed streetlight electrical repair services and urgent electrical construction as required by the Public Works Department.

3. Authorize the City Manager to negotiate and execute an agreement with International Line Builders, Inc., in an amount not to exceed $400,000 for one year, with four additional one-year renewal option(s) in the amount of $400,000 for a total amount not to exceed $2,000,000 over a five-year period, with future year funding contingent on Council budget approval.

4. Authorize the City Manager to negotiate and execute an agreement with Bear Electrical Solutions, Inc., in an amount not to exceed $400,000 for one year, with four additional one-year renewal option(s) in the amount of $400,000 for a total amount not to exceed $2,000,000 over a five-year period, with future year funding contingent on Council budget approval.

5. Authorize the City Manager to negotiate and execute an agreement with Yunex LLC in an amount not to exceed $400,000 for one year, with four additional one-year renewal option(s) in the amount of $400,000 for a total amount not to exceed $2,000,000 over a five-year period, with future year funding contingent on Council budget approval.

5.C. Approval of First Modification to Agreement No. 10788 with Motorola Solutions, Inc. for Maintenance and Support of Communications System and Radio Equipment
Recommended Action
Staff recommends that the City Council:

1. Adopt a finding of Categorical Exemption pursuant to Section 15301 (Existing Facilities), of the California Environmental Quality Act (CEQA) Guidelines;

2. Authorize the City Manager to negotiate and execute a first modification for a Maintenance and Support Agreement #10788 in the amount of $4,788,523 with Motorola Solutions, Inc., an Illinois-based company, for maintenance of the interoperable public safety trunked radio communications system and radio equipment and authority to purchase new equipment as needed by various departments. This will result in a 10-year amended agreement with a new total amount not to exceed $5,874,523, with future year funding contingent on Council budget approval.

5.D. Approval to Amend Agreement with Kronos, Inc. for Software-As-A-Service (SaaS) and Related Licenses
Recommended Action
Staff recommends that the City Council:

1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines.

City of Santa Monica Generated: 6/13/2023 12:52 PM Page 6

2. Authorize the City Manager to combine existing Sales Agreement and Software License Agreement #8417 (CCS) and Software Maintenance and Support Agreement #8434 (CCS) into a single contract for 5 years that would result in a 23- year amended agreement with Kronos Inc. (Kronos), for Software as a Service (SaaS) and related licenses. This will result in a new grand total amount not to exceed $3,425,461 (including 5% in contingency) with future year funding contingent on Council budget approval.

5.E. Award Bid 4453 to Star-Dust Tours, Inc. to Provide Bus Transportation Services
Recommended Action
Staff recommends that the City Council:

1. Adopt a finding of no possibility of significant effect on the environment pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines.

2. Award Bid #4453 to Star-Dust Tours, Inc. for bus transportation services for the Community Services Department;

3. Authorize the City Manager to negotiate and execute an agreement with StarDust Tours, Inc., in an amount not to exceed $81,600 for one year, with four additional one-year renewal options, in the amount of $81,600, to extend on the same terms and conditions for a total amount not to exceed $408,000 over a five year period, with future year funding contingent on Council budget approval.

5.F. Approval of the Santa Monica Tourism Marketing District Fiscal Year 2023-24 Budget and Work Plan
Recommended Action
Staff recommends that the City Council:

1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines; and

2. Approve the Santa Monica Tourism Marketing District Fiscal Year 2023-24 Budget and Work Plan.

5.G. Approval of Fourth Modification to Professional Services Agreement with HR&A Advisors Inc. for 6th Cycle (2021-2029) Housing Element Implementation
Recommended Action
Staff recommends that the City Council take the following actions:

1. Make a determination that the proposed modification of the HR&A Advisors Inc. contract for fiscal analysis is statutorily exempt from CEQA pursuant to Section 15262 (Feasibility and Planning Studies) of the CEQA Guidelines.

2. Authorize the City Manager to negotiate and execute a fourth modification to agreement #108300 (formerly #10830) in the amount of $40,000 and extend the term for one additional year, with HR&A Advisors Inc.(“HR&A”) to prepare fiscal analysis for implementation of the City’s certified 6th Cycle (2021-2029) Housing Element. This will result in a five-year amended agreement with a City of Santa Monica Generated: 6/13/2023 12:52 PM Page 7 new total amount not to exceed $494,900, with future year funding contingent on Council budget approval.

5.H. Approval of the Pier Corp FY 2023-24 Budget and Work Plan Recommended Action
Staff recommends that the City Council:

1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines;

2. Approve the Santa Monica Pier Corporation Fiscal Year 2023-24 Budget and Work Plan;

3. Authorize the City Manager to execute a fourth modification to agreement #10101 with the Santa Monica Pier Corporation to extend the term through June 30, 2024.

5.I. Approval of agreements with Main Street BID regarding: Fiscal Agent, Disbursement and Revocable License
Recommended Action
Staff recommends that the City Council authorize the City Manager to:

1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines.

2. Negotiate and execute the following agreements with the Main Street Business Improvement Association (MSBIA) for a term of five (5) years with two five-year renewal options that renew on the same terms and conditions:
a. a new Fiscal Agent Agreement to manage and administer the business-based assessment fees and any other revenue collected for the promotion and marketing of the Main Street Business Improvement Area; and
b. a new Revocable License Agreement which grants MSBIA a license to operate and maintain the decorative lights in the public right-of-way between Pico Boulevard and the southern City boundary, just south of Marine Street
c. a new Disbursement Agreement to administer the property-based assessments collected and use these funds in the Main Street Commercial District for the decorative lighting and sidewalk cleaning, in accordance with Resolution 10325 (CCS).

5.J. Second Reading and Adoption of an Ordinance Adding Santa Monica Municipal Code Section 4.08.830 to Prohibit Unlawful Possession of Catalytic Converters.

Recommended Action
Staff recommends that the City Council adopt the attached Ordinance.

5.K. Award Bid #4445 to Bound Tree Medical for purchase and delivery of Microflex Disposable gloves - Item Pulled at the Request of Staff. 6/08/2023 City of Santa Monica Generated: 6/13/2023 12:52 PM Page 8 Recommended Action
Staff recommends that the City Council:

1. Award Bid #4445 to Bound Tree Medical, an Ohio-based company, for the purchase and delivery of Microflex disposable gloves to be used by staff citywide;

2. Authorize the Procurement Manager to issue annual purchase orders to Bound Tree Medical, for the purchase and delivery of Microflex disposable gloves for a total amount not to exceed $720,000 over a five-year period, with future funding contingent on Council budget approval; and,

3. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines.

5.L. Approval of First Modification of Agreement #4982 with Good Guard Security Inc. for Parking Structure Security Services - New Item Received. 6/09/2023 Recommended Action
Staff recommends that the City Council

1. Adopt a finding of categorical exemption pursuant to Section 15301 of the California Environmental Quality Act (CEQA) Guidelines.

2. Authorize the City Manager to negotiate and execute a first modification to agreement #4982 in the amount of $2,200,000 with Good Guard Security, Inc. to provide overnight security services in parking facilities and adjacent areas.

This will result in a five and a half year amended agreement with a new total amount not to exceed $2,400,000, with future year funding contingent on Council budget approval.

6. PUBLIC INPUT ON REMAINING AGENDA ITEMS
. Public Input for 12-Items will be heard at the time when the Public Hearing is called.

7. STUDY SESSION

7.A. Adult-Use Cannabis Study Session
Recommended Action
Staff recommends that the City Council:

1. Receive the presentation on key policy considerations for allowing adult-use cannabis businesses and other non-retail cannabis business types within the City of Santa Monica;

2. Discuss options for allowing adult-use cannabis sales and associated regulatory restrictions as may be appropriate; and

3. Provide direction to staff on whether to bring back changes to the Municipal Code to allow for adult-use cannabis retail businesses and non-retail cannabis business types within the City.

8. CONTINUED ITEMS
City of Santa Monica Generated: 6/13/2023 12:52 PM Page 9

8.A. Appointment to one open seat on the Human Services Commission for the term ending in June 30, 2025. (Continued from May 24, 2023.)

9. ADMINISTRATIVE PROCEEDINGS
No items

10. ORDINANCES
(Public comment is permitted on ordinances for introduction and first reading. No public discussion is permitted on ordinances for second reading and adoption. In accordance with Charter section 615, the adoption of all ordinances and resolutions shall be by reading of title only unless a Councilmember present dissents.)
No items

11. STAFF ADMINISTRATIVE ITEMS

11.A. Certification of Recirculated Final Environmental Impact Report/Environmental Assessment for the Pier Bridge Replacement Project and Authorization to Proceed with Final Design and Bidding Documents - New Item Received. 6/09/2023
Recommended Action
Staff recommends that the City Council:

1. Adopt a Resolution (Attachment A) certifying the Recirculated Final Environmental Impact Report/Environmental Assessment (EIR/EA) (Attachment B) and adopting the Mitigation Monitoring and Reporting Program for the Pier Bridge Replacement Project (Attachment C).

2. Approve the preferred alternative bridge design (Alternative 2) described in the Recirculated Final EIR/EA and authorize staff to proceed with the final design and development of bidding documents for construction of the Pier Bridge Replacement Project as recommended in the Recirculated Final EIR/EA and as described in this report.

12. PUBLIC HEARINGS

12.A. Public Hearing and Adoption of Resolution for the 2023 Annual Water Shortage Assessment Report
City of Santa Monica Generated: 6/13/2023 12:52 PM Page 10 Recommended Action
Staff recommends that the City Council:

1. Adopt a finding of Categorical Exemption pursuant to Section 15307 and Section 15308 of the California Environmental Quality Act (CEQA) Guidelines.

2. Hold a public hearing and receive public comment for the 2023 Annual Water Shortage Assessment Report for the Public Works Department, Water Resources Division.

3. Approve the attached resolution adopting the 2023 Annual Water Shortage Assessment Report.

12.B. Public Hearing and Adoption of Solid Waste Rate Resolution Recommended Action
Staff recommends that the City Council:

1. Hold a public hearing.

2. Receive public comment pursuant to Proposition 218 requirements.

3. Consider all protests against the proposed solid waste rate increases that have been submitted in accordance with Proposition 218.

4. Adopt findings of Statutory Exemption pursuant to Public Resources Code 20180(b)(8) and Categorical Exemption pursuant to Section 15273 of the California Environmental Quality Act (CEQA) Guidelines.

5. Adopt the attached resolution establishing a five-year schedule of solid waste rates effective August 1, 2023, for FY 2023-24 and July 1 every year thereafter through July 1, 2027, for FY 2027-28.

13. REPORTS OF BOARDS AND COMMISSIONS
No items

14. RESOLUTIONS
No items

15. WRITTEN COMMUNICATIONS OTHER THAN REPORTS OF COMMISSION AND

OFFICERS
No items

16. COUNCILMEMBER DISCUSSION ITEMS

16.A. Appointment to one unscheduled vacancy on the Library Board for a term ending on June 30, 2025. - New Item Received. 6/09/2023 City of Santa Monica Generated: 6/13/2023 12:52 PM Page 11

16.B. Request of Councilmembers Torosis, Councilmember Zwick, and Mayor Davis that the Council direct the City Manager and the City Attorney to, within 60 days, draft an ordinance for council adoption to restrict the sale of guns in Santa Monica and propose additional gun owner responsibilities. This ordinance should be based on best practices from other jurisdictions, stakeholder engagement, and consultation with subject matter experts. - New Item Received. 6/09/2023

16.C. Councilmembers Brock and de la Torre request that the City Manager evaluate various commercial development impact fees and best practices in American cities for tree replacement that can be implemented. In addition, a timeline for further discussion of the private tree ordinance will be established, and best efforts will be made to increase the public tree canopy in Santa Monica. - New Item Received. 6/09/2023

16.D. Request of Councilmembers Brock and de la Torre that the City Council direct the City Manager to provide an update via an Information Item to be published on the City’s website regarding bicycle and pedestrian improvements installed on 17th Street from Pico to Wilshire, known as the “Safe Streets for 17th Street and Michigan Avenue” project, upon completion of the project. In the Information Item, the City Manager is asked to provide an overview of the project, total costs, funding sources, intended outcomes, lessons learned, and adjustments made. As part of the Information Item, the City Manager is also being asked to consider the costs, impacts, trade-offs, and possible funding sources associated with modifying the design of the intersection at Broadway and 17th (i.e., adjusting the configuration of the corner islands) that will enhance vehicular movements while not compromising bicycle and pedestrian safety. - New Item Received. 6/09/2023

16.E. Request of Councilmembers Brock and de la Torre that the City Council ask the City Manager to estimate the costs of four Public Services Officers for the City Council to consider at the June 27, 2023, City Council meeting. The City Council should enact additional budgetary measures to address Clean and Safe Initiatives, which include safety and security downtown. - New Item Received. 6/09/2023

16.F. Request of Councilmembers Brock & de la Torre that the City Council direct the City Manager to develop an estimate of resources needed to provide financial assistance to eligible families and/or partner with community nonprofits to provide free and/or reduced-cost swim lessons at Santa Monica Aquatics facilities to ensure that elementary school-age children have access to learn how to swim. - New Item Received. 6/09/2023

ADJOURNMENT
Agendas and reports are accessible on the City's webpage at www.smgov.net/council/agendas. They are also available at the City Clerk's Office and in alternate formats upon request. For a free email subscription to the City Council Agendas, please contact the City Clerk’s Office at (310) 458-8211 or [email protected].

City of Santa Monica Generated: 6/13/2023 12:52 PM Page 12 Members of the public unable to attend a meeting but wishing to comment on an item(s) listed on the agenda may submit written comments prior to the meeting by meeting by mailing them to: City Clerk, 1685 Main Street, Santa Monica, CA 90401 or to [email protected]. Written comments received from the public by 2 PM on the day of the City Council meeting will be distributed to the City Council prior to the meeting and posted online.

City Hall and the Council Chamber are wheelchair accessible. If you require any special disability related accommodations to either attend or provide public testimony at a Council meeting (i.e. sign language interpreting, access to an amplified sound system, remote option, etc.), please contact the City Clerk’s Office at (310) 458-8211 or TDD: (310) 917- 6626 or via email at [email protected] at least 72 hours prior to the scheduled meeting. Best efforts shall be made to accommodate requests received after the 72-hour deadline. In the case of special meetings, requests should be submitted as early as possible, but no later than noon the day of the special Council meeting.

Si desea comunicarse con alguien en español, llame a nuestra oficina al (310) 458-8211 y pida hablar con Esterlina Lugo.

Santa Monica Blue Bus Lines #2, #3, #5, #9 and the EXPO Line serve City Hall. Parking is available on Main Street, on Olympic Drive, and in the Civic Center Parking Structure (validation free).

City Council
Report
City Council Meeting: June 13, 2023
Agenda Item: 1.A
1 of 1
To: Mayor and City Council
From: Denise Anderson Warren, City Clerk, Records and Election Services Department
Subject: Written Comments
Prepared By: Maria Dacanay, Administrative Analyst
Approved Forwarded to Council
Attachments:

A. Written Public Comments

1.A
Packet Pg. 13
From: Melissa Roldan
To: councilmtgitems; Council Mailbox
Subject: GARDENING_LEAF/DIRT BLOWERS
Date: Monday, June 12, 2023 1:19:01 PM

EXTERNAL
it was my understanding that gas powered units were not allowed in SM. - if so, why do i see, hear and smell them EVERYWHERE?
- if not, why not?
the noise and air generated is incredibly unhealthy
the air, spillage and fumes generated are climate damaging if companies/landscapers say there are no options, they are wrong:
- electric/battery operated units
- manual labor with brooms, sweeps, rakes, water, etc.
very simple equation with an even more simple answer
please act responsibly
thank you
melissa roldan

1.310.600.3111

1.A.a
Packet Pg. 14
Attachment: Written Public Comments (5828 : Written Comments) From: Peter DiChellis
To: councilmtgitems
Subject: Agenda Item 1 - Crime
Date: Monday, June 12, 2023 2:50:36 PM

EXTERNAL
Examples of what makes Santa Monica one of the “least safe” cities in California:
“Violent Crime” - in Santa Monica Daily Press
https://urldefense.com/v3/__https://smdp.com/2023/03/18/letter-63/__;!!OfuUnHCITYtmmjM!rW4y1yQV4KN0gnkYazU3ThSk2_NnBMwQ6_HPEeR_YsM13F8b6UFWpDdD2g7dTuuogL6f-2LHeLsO-eIgZuQQjtkfu3oZ0Y$ “Repeat Violent Offenders Expose Folly of Criminal Justice Policies” - in Santa Monica Lookout https://urldefense.com/v3/__https://www.surfsantamonica.com/ssm_site/the_lookout/letters/Letters2022/11_30_2022_LETTERS_Repeat_Violent_Offenders_Expose_Folly_of_Criminal_Justice_Policies.html__;!!OfuUnHCITYtmmjM!rW4y1yQV4KN0gnkYazU3ThSk2_NnBMwQ6_HPEeR_YsM13F8b6UFWpDdD2g7dTuuogL6f-2LHeLsO-eIgZuQQjtkFAe5rEc$ “Safety in Santa Monica” - in Santa Monica Daily Press
https://urldefense.com/v3/__https://smdp.com/2022/12/12/safety-in-santa-monica/__;!!OfuUnHCITYtmmjM!rW4y1yQV4KN0gnkYazU3ThSk2_NnBMwQ6_HPEeR_YsM13F8b6UFWpDdD2g7dTuuogL6f-2LHeLsO-eIgZuQQjtkrAeAI0s$ Sincerely,
Peter DiChellis
Santa Monica 90403
-END1.A.a
Packet Pg. 15
Attachment: Written Public Comments (5828 : Written Comments) From: Glenn Furuya
To: councilmtgitems; Clerk Mailbox
Cc: GLENN FURUYA
Subject: Approving SM Garden Fees 1976-2020 with No Cost Impact presented to SM City Council Date: Tuesday, June 13, 2023 9:48:27 AM
Attachments: SM CITY COUNCIL 3 PG PRESENTATION 6-13-23.pptx SM GARDEN FEE REVIEW 4-24-23 R19 15 SLIDES ORIGINAL FINAL SUMMARY.pptx

EXTERNAL
To Xavier
I want to discuss with the SM City Council approving the SM Garden fees for 1976-2020 with no Cost Impact review.

My 2-minute presentation will be from my 3 page PowerPoint slides and my 15 page presentation is a backup to my 3 page presentation that I presented to the SM Gardeners on 4-24-23 at the Ken Edwards SM Garden meeting.

I would like to know why at all of the SM Council meetings that a Cost Impact was never addressed before approving the excess SM Garden fee increases that were higher than the Cost of Living and Inflation. SEE BELOW REFERENCED SM COUNCIL MEETING VIDEO 6-22-21.

City Council Meeting - Jun 22nd, 2021 (granicus.com)
617hr/654hr SM COUNCIL MEETING VIDEO LOCATION
Reference above 6-22-21 SM Council meeting regarding at end of meeting, Oscar DeLattore wanted to decrease the swimming pool fees and someone asks what would be the cost impact of decreasing / increasing the fees. ALL SM FEES WERE APPROVED. THIS INCLUDED EXCESSIVE FEE INCREASES FOR

THE SM COMMUNITY GARDEN WERE APPROVED WITH NO COST
IMPACT.

The SM Garden committee intentionally concealed from the SM City Council the excessive SM Garden Fee increases. The SM Garden committee for the last 20 years never presented to the SM City council the Cost Impact of increasing the SM Garden fees. See my attached 15-page SM Garden presentation regarding 1976-2020 SM Garden Fee History.

I am attaching brief 3 page PowerPoint presentation regarding No Cost Impact presented to SM City Council for excessive SM Garden fee increases.

And my 15 page PowerPoint presentation I presented to the SM Gardeners on 4-24- 23 regarding SM Garden Fee history 1976-2020.

Glenn Furuya

1.A.a
Packet Pg. 16
Attachment: Written Public Comments (5828 : Written Comments)

1.A.a
Packet Pg. 17
Attachment: Written Public Comments (5828 : Written Comments) 6-22-21 SM COUNCIL MEETING PREVIOUS APPROVAL

FOR EXCESSIVE SM GARDEN FEES
• I want to discuss with the SM City Council approving the SM Garden fees for 1976-2020 with no Cost Impact
review.
• I would like to know why at all of the SM Council meetings that a Cost Impact was never addressed before approving the excess SM Garden fee increases that were higher than the Cost of Living and Inflation. • SEE BELOW SM COUNCIL MEETING VIDEO 6-22-21-REVISE MASTER FEE SCHEDULE.
• REF Above 6-22-21 SM Council meeting regarding at end of meeting, Oscar DeLattore wanted to decrease the swimming pool fees and someone asks what would be the Cost Impact of decreasing / increasing the fees. • Glenn Furuya
City Council Meeting - Jun 22nd, 2021 (granicus.com)
617hr/654hr SM COUNCIL MEETING VIDEO LOCATION

1.A.a
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Attachment: Written Public Comments (5828 : Written Comments) Santa Monica Council approving previous SM Cost Recovery- Fee Study • At 6-22-21 SM Council meeting to Revise Master Fee Schedule prior to approving, a question regarding the Cost impact of increasing/decreasing SM swimming pool fees was presented. • The SM Council – Oscar Delattore wanted to know how much the fees would cause the budget to go up or down.
• It appears SM council is concerned about reviewing Cost impact before approving a change.
• At each of previous SM Council meeting there was never a Cost Impact presented to the SM Council showing the excessive % increases for SM Garden fees prior to approval.
• The Cost impact is the % increase for each SM Garden fee change. • Each of these SM Garden Fee increases exceeded the current Cost of Living and Inflation of 10%, with no Cost Impact presented to SM Council. • I would like the Current SM Gardens fees readjusted down to a more reasonable rate which is in line with the Current Cost of Living and Inflation. • The SM City Council has never required the SM Gardens to increase their fees.

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Attachment: Written Public Comments (5828 : Written Comments) PROPOSED ADJUSTED SM GARDEN FEES FOR 2023
Current SM Garden Fee increases
• $40 to $60 – 50% increase 2000
• $60 to $75 – 25% increase 2013
• $75 to $100 – 33.4% increase 2017
• $100-Small, $116-Medium and $132-large – 16% and 32% increase 2020 • $100-Small $132-Medium and $164-Large – 14% and 24% increase 2021 • $100-Small, $150-Medium and $200-Large – 14% and 22% increase 2022 • Between 2020-2022 there were no
increase for small gardens.

ADJUSTED 2023 SM Fee increases at 10%
• 2000 $40 with 10% increase - $44
• 2013 $44 with 10% increase - $48
• 2017 $48 with 10% increase - $53
• 2021 $53 with 10% increase - $58
• In 2021 the SM Garden fees with a
10% increase should be $58 instead
at $100.
• In 2023 readjust fees to $64 (10% increase)
• This would only be only a $11,240
increase.
• ($20,200-$8,960=$11,240)
• $91,443-$80,203=$11,240
• Adjusted Cost Variance $100,403-$8,960 =$91,443
• Current 2022 Cost Variance=$80,203

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Attachment: Written Public Comments (5828 : Written Comments)

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Attachment: Written Public Comments (5828 : Written Comments) SANTA MONICA PRESENTATION 4-24-23 630P KEN EDWARDS

GARDEN FEE DISCUSSION/CURRENT RULES ON FENCES

BY GLENN FURUYA
• IF YOU HAVE ANY QUESTIONS CONTACT GLENN FURUYA AT
[email protected]
• SM GARDEN CONTACT INFO
• SHANNON PARRY X 310-458-2227 Mgr [email protected], • JAMES VALEZ CONWAY X 310-458-8711 Supv
• [email protected],
• TEAGUES WEYBRIGHT X 310-458-2201 X 2405 [email protected] 1 1.A.a
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Attachment: Written Public Comments (5828 : Written Comments) I. SM Garden Fee History 1976-2022 1/6
• The SM Garden fees from 1976-1999 were $40 per year
• In 2000 to 2019, they started to go up from $40, to $60, to $75 to $100 to current 2020 3year increases.
• At each SM Council meeting there was never a Cost Impact presented to the SM Council showing the excessive % increases. The Cost impact is the % increase for each SM Garden fee change. • Each of these increase exceeded the current Cost of Living and Inflation of 10%, with no Cost Impact presented to SM Council.
• $40 to $60 – 50% increase 2000
• $60 to $75 – 25% increase 2013
• $75 to $100 – 33.4% increase 2017
• $100-Small, $116-Medium and $132-large – 16% and 32% increase 2020 • $100-Small $132-Medium and $164-Large – 14% and 24% increase 2021 • $100-Small, $150-Medium and $200-Large – 14% and 22% increase 2022 • Between 2020-2023 there were no increase for small gardens. And large garden fees doubled in 3 years from $100 to $200 for 2023. • Cost Recovery % is taking the SM Garden fees/SM Garden Labor-Costs2

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Attachment: Written Public Comments (5828 : Written Comments) I. SM Garden Fee History 1976-2022 (continued) 2/6
SM Garden Fee 2013
• 2013, 124 Gardens, Current Fee $75
• Annual Fees $9300, Annual Cost
$108,903
• Cost Recovery 9%,
$9300/$108,903
• Cost Variance $108,903-$9300
= $99,603
SM Garden Fee 2017
• 2017, 124 Gardens. Current Fee $100
• Annual Fees $12,433, Annual Cost
$149,282
• Cost Recovery 8%,
$12,433/$149,282
• Danny Price charged 15% of his time
at $35k
• Cost Variance $149,282-$12,433
= $136,849
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Attachment: Written Public Comments (5828 : Written Comments) I. SM Garden Fee History 1976-2022 (continued) 3/6
SM Garden Fee 2020
• 2020, 125 Gardens. Current Fee $100 (36), $116 (32)-$132 (57) =125 Total • Annual Fees $14,836, Annual Cost $100,403
• Cost Recovery 15%,
$14,836/$100,403
• COST RECOVERY % WENT UP DUE TO

REDUCTION IN LABOR-PUBLIC WORKS

REORGANIZATION
• REMOVED DANNY PRICE LABOR
15%/$35k
• Cost Variance $100,403-$14,836 = $85,567
SM Garden Fee 2021
• 2021, 136 Gardens. Current Fee $100 (56), $132 (32)-$164 (49) =137 Total • Annual Fees $17,860, Annual Cost $100,403
• Cost Recovery 18%,
$17,860/$100,403
• COST RECOVERY % WENT UP DUE TO

INCREASING SM GARDEN FEES
• Cost Variance $100,403-$17,860= $82,543
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Attachment: Written Public Comments (5828 : Written Comments) I. SM Garden Fee History 1976-2022 (continued) 4/6
SM Garden Fee 2022
• 2022, 140 Gardens. Current Fee $100
(62) -$150 (32) $200 (46)=140 Total
• Annual Fees $20,200, Annual Cost
$100,403
• Cost Recovery 20%,
• $20,200/$100,403
• COST RECOVERY % WENT UP DUE TO

INCREASING SM GARDEN FEES
• Cost Variance $100,403-$20,200= $80,203
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Attachment: Written Public Comments (5828 : Written Comments) I. SM Garden Fee History 1976-2022 (continued) 5/6
• The SM city council always covered any overages as reflected in each SM Garden 2022-2021 Cost Recovery which is difference between Fees collected and Labor. • The Cost recovery is taking the Total SM Garden Fees/SM Garden salaries. As the salaries go down, the Cost Recovery % goes up.
• The Cost Recovery 8% from 2016-17 to 2020-21 went up because to 15% because the SM Garden labor went down to $100K from $140k, with a lower total Cost Variance. This reduction was due to removing Danny Price 15% labor of $35k.
• In 2020 with the Public Works taking over, the labor was reduced to more than 40%/$100k causing the Cost Recovery to increase 15% from 8%. 6 1.A.a
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Attachment: Written Public Comments (5828 : Written Comments) I. SM Garden Fee History 1976-2022 (continued) 6/6
• With the Public Works reorganization in 2020, there was no need to excessively increase SM Garden fees because of the $40k Labor reduction.
• The Santa Monica total number of gardens to total population ratio is very low and is why we need more new gardens.
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Attachment: Written Public Comments (5828 : Written Comments) II. Why were the SM garden fees excessively increased
• In 2020, with Cost of Living and Inflation below 10%, how could you justify the new 3 year fees. This increased our fees between 14% to 32% with NO INCREASE FOR SMALL GARDENS
FOR THE NEXT 3 YEARS AND LARGE GARDENS FEES DOUBLING
TO $200.
• How were the current 3 year fees increase calculated? • When the previous SM Fee increases occurred why wasn’t there a Cost Impact from 2000-2022 / Previous Years
presented to the SM City council to review prior to approving those excessive high increases reflecting the % increases? 8 1.A.a
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Attachment: Written Public Comments (5828 : Written Comments) III. Proposed change to our existing 2023 SM Garden fees 1/3 • I propose rolling back our current SM Garden Fees for all gardens to $110 per year for all gardens. It would be easier to track SM Garden revenues if the Gardens are all priced at the same level.
• The SM Gardeners should review these excessive SM Garden Fee increase and vote to readjust down our current fees to $110 for all SM Gardeners and credit back to Medium and Large gardeners.
• By adjusting the annual rate to $110, the Credit would be with Small gardens paying an additional $10. Medium gardens would get a credit for years 1&2 $56 total and Large gardens for years 1&2 $166 total.
• The new SM fee of $110 for all gardens in June 2023 renewal would have the Small Gardens paying $110, Medium gardens with $20 credit would pay $90 and the Large gardens with $166 credit would pay nothing and have $56 credit forwarded for2023 SM Garden Fee renewal.
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Attachment: Written Public Comments (5828 : Written Comments) III. Proposed change to our existing 2023 SM Garden fees (continued) 2/3
• The overall 2023 Total Cost charges of reducing SM Garden fees would increase the Cost Variance a small amount to $5k for SM Council to reimburse from $80k to $85k.
• The SM City Council would cover any overages as they have done in previous years.
• The 2020-2021 SM Fee Study (pg 50/101) SM Public Works Labor-SM Community gardens Costs reduced to $100k from $140k after reorganization.
• To get Full Cost Recovery per our 2020 SM Fee Study fees would have to increase to over $803 per garden for 125 gardens ($100,403/125=$803) • 2022 $100,403k Labor/140 Gardens=$717 Full Cost per garden 10 1.A.a
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Attachment: Written Public Comments (5828 : Written Comments) III. Proposed change to our existing 2023 SM
Garden fees (continued) 3/3
SM Garden Fee 2022
• 2022, 140 Gardens. Current Fee $100 (62) - $150 (32) $200 (46) =140 Total • Annual Fees $20,200, Annual Cost $100,403
• Cost Recovery 20%, $20,200/$100,403
• COST RECOVERY % WENT UP DUE TO

INCREASING SM GARDEN FEES
• Cost Variance $100,403-$20,200 =
• $80,203
PROPOSED SM GARDEN FEE 2023 REDUCTION
• 2023, 140 Gardens. PROPOSED FEE $110
• Revised/Reduced SM Garden Fees
• Annual Fees $15,400, Annual Cost $100,403
• Cost Recovery 15%, $15,400/$100,403
• COST RECOVERY % WENT DOWN DUE TO
REDUCING ALL FEES TO $110
• Cost Variance $100,403-$15,400 =
• $85,003
• This would only be only a $4800 increase.
• ($20,200-$15,400=$4,800)
• $85,003-$80,203=$4,800
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Attachment: Written Public Comments (5828 : Written Comments) IV. Conclusion 1/3
• I would like to know the SM Garden current labor details of $100k for 2020-2022. • What people are currently supporting the SM Gardens with Teague? • What was the justification in excessively increasing our SM Garden fees for a 3 year period 2020-2022. Who proposed these increases and why? • In 2020 when Public Works took over the SM Community Gardens, it reduced the total labor by $40k. This reduction was due to removing Danny Price Labor charges for 15% at $35k
• NO COST IMPACT reflecting % increase to the recent proposed 3year Fee increase of 14% to 32% was NOT PRESENTED to the SM City Council before approving the increase in 2020/2021 SM Fee Study.
• The revised Santa Garden Fee of $110 would be a more reasonable increase. • Roll back our current SM Garden fees to the adjusted rate of $110 for all gardens. • Tell the SM City Council that these decreases are more in line with the current Cost of Living and Inflation of under 10%. And they failed to do a Cost Impact prior to approving all previous excessive SM Garden Fee increases of 12%-32% for 2020-2022.
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Attachment: Written Public Comments (5828 : Written Comments) IV. Conclusion (continued) 2/3
• SM Garden Fee increases (NO COST IMPACT REVIEW BY SM CITY COUNCIL) • $40 to $60 – 50% increase 2000
• $60 to $75 – 25% increase 2013
• $75 to $100 – 33.4% increase 2017
• $100-Small, $116-Medium and $132-large – 16% and 32% increase 2020 • $100-Small $132-Medium and $164-Large – 14% and 24% increase 2021 • $100-Small, $150-Medium and $200-Large – 14% and 22% increase 2022 • Between 2020-2022 there were no increase for small gardens. • The overall Cost Recovery variance would be a small total increase of $5k from $80k to $85k in 2023 after reducing our fees.
• Our reduction to the current SM Garden fees will not have a negative impact to the overall SM City Budget. Current Santa Monica FY 2022-23 Budget is $598.9 million. • That Public Works Community Gardens labor savings is more than increasing our SM Garden fees and a major change for improved Cost Recovery. • By excessively increasing our SM Garden fees justifies the high SM Garden Labor charges. • The SM City council has never pressured the SM Gardens to increase their fees. 13 1.A.a
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Attachment: Written Public Comments (5828 : Written Comments) IV. Conclusion (continued) 3/3
• The SOLUTION is to reduce the SM Community garden support labor costs which is causing a high negative variance, not excessively increase the SM Garden fees and lower all garden fees to $110.
• SM Garden Committee members represent 5% of the total 140 gardeners. • SM Garden Committee controls 95% of the SM Community gardens concerns/issues. • If the SM Community gardeners do not get more actively involved, the SM Garden Committee can pass anything they want.
• 2022 SMALL GARDENS=62 GARDENERS/140=44%, MEDIUM LARGE GARDENS 78 GARDENERS/140=56%
• I. THERE ARE A LARGER % OF MEDIUM/LARGE GARDENS TO SMALL GARDENS • HAVE SM GARDENERS VOTE ON REDUCING ALL SM GARDEN FEES TO $110 FOR ALL GARDENS. • TELL SM CITY COUNCIL NEVER REVIEWED A COST IMPACT PRIOR TO APPROVING THE EXCESSIVE 3 YEAR SANTA MONICA COMMUNITY GARDEN FEE INCREASES.
• THEN HAVE OUR MODIFIED SM GARDEN FEE OF $110 FOR ALL GARDENS UPDATED FOR THE SM CITY COUNCIL TO APPROVE FOR 2023 SM GARDEN RENEWAL. 14

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Attachment: Written Public Comments (5828 : Written Comments) V. Restoring Fences In Current SM Garden Rules
• Fences clearly divides each garden by creating exterior boundaries. • Fences keep visitors from entering gardens from main pathway and travelling between isles.
• Fences help protect your personal items from getting stolen. • I see visitors on numerous occasions entering gardens without gardener’s permission.
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Attachment: Written Public Comments (5828 : Written Comments) City Council
Report
City Council Meeting: June 13, 2023
Agenda Item: 4.A
1 of 1
To: Mayor and City Council
From: Denise Anderson Warren, City Clerk, Special Agenda Items Subject: Commendation: Santa Monica Tennis Collective 14u Team Prepared By: Gilbert Portillo, Administrative Staff Assistant Approved Forwarded to Council

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City Council
Report
City Council Meeting: June 13, 2023
Agenda Item: 4.B
1 of 1
To: Mayor and City Council
From: Denise Anderson Warren, City Clerk, Special Agenda Items Subject: Proclamation: Gun Violence Awareness Month
Prepared By: Gilbert Portillo, Administrative Staff Assistant Approved Forwarded to Council

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City Council
Report
City Council Meeting: June 13, 2023
Agenda Item: 4.C
1 of 1
To: Mayor and City Council
From: Denise Anderson Warren, City Clerk, Special Agenda Items Subject: 2023 Juneteenth Proclamation
Prepared By: Christopher Smith, Acting Chief Information Officer Approved Forwarded to Council

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City Council
Report
City Council Meeting: June 13, 2023
Agenda Item: D
1 of 1
To: Mayor and City Council
From: David White, City Manager, City Manager's Office
Subject: City Manager's Report
Prepared By: Sergio Ramirez, Acting Chief of Staff
Approved Forwarded to Council
D
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City Council
Report
City Council Meeting: June 13, 2023
Agenda Item: 5.A
1 of 5
To: Mayor and City Council
From: Rick Valte, Public Works Director, Public Works, Water Resources Subject: Award Bid #4450 to Ferguson Waterworks as Primary and Core & Main as Secondary to Furnish & Deliver Water & Wastewater Department Supplies Recommended Action
Staff recommends that the City Council:

1. Adopt a finding of categorical exemption pursuant to Section 15302 (Replacement or Reconstruction) of the California Environmental Quality Act Guidelines.

Summary
The City of Santa Monica’s Water Resources Division within the Public Works Department is responsible for the delivery of high-quality, safe, and reliable drinking water as well as providing safe collection and disposal of wastewater for customers.

The Water Resources Division purchases and maintains an inventory of supplies and parts to perform routine preventative maintenance and repairs of the City’s water treatment facilities, water recycling facilities, potable water distribution, and wastewater

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collection infrastructure to support day-to-day water and wastewater operations. Staff recommends Ferguson Waterworks as the primary vendor to provide water and wastewater repair parts and supplies in an amount not to exceed $2,600,000 over a five-year period. Staff also recommends Core & Main as secondary vendor, due to potential supply chain shortages, in an amount not to exceed $610,000 over a five-year period.

Discussion
The Water Resources Division maintains approximately 1,300 fire hydrants and 18,000 water service connections through a 205-mile network of distribution mains ranging in size from 6 to 36 inches as well as over 150 miles of wastewater collection pipelines, two flow monitoring and sampling stations, and a 26 million gallon-per-day wastewater pumping station. To maintain day-to-day operations providing drinking water and wastewater collection services to the community, adequate supplies and repair parts are needed to ensure uninterrupted operation of the City’s water and wastewater infrastructure. These supplies and repair parts include, but are not limited to, gate valves, stainless steel repair clamps, strap saddles, copper pipe, tapping sleeves, and vitrified clay sewer pipe.

Repair parts and supplies are used daily by the Water Resources Division’s water construction, wastewater, and meter shop crews to perform preventative maintenance and/or emergency repairs. A small inventory is kept on-site, but as space is limited, the division would make use of the Just-in-Time inventory management system provided by the vendor. Just-in-Time inventory management is a process where parts and supplies are ordered and received as-needed for scheduled maintenance and repair projects. In the event of an emergency, the division relies on available in-house inventory and close coordination with the vendor to deliver parts and supplies immediately, at any time of the day or night, seven days per week.

This bid award would allow both water and wastewater crews to perform routine maintenance and emergency repairs without delay and prolonged service interruptions to the City’s customers.

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Vendor Selection
Bidder Recommendation
Best Bidder Ferguson Waterworks
Evaluation
Criteria
Price; the ability, capacity and skill of the bidder to perform or provide the materials or services; the capacity of the bidder to perform the contract or provide the service promptly, within the time specified, and without delay or interference; The City shall have absolute discretion in determining the applicability and weight of the criteria listed above.

The City is not required to select the bid with the lowest price.

Municipal Code SMMC 2.24.180
Bid Data
Date Posted Posted On
Advertise In
(City Charter & SMMC)
Vendors
Downloaded
Date Publicly
Opened
03/08/2023 City's Online Bidding
Site
Santa Monica Daily
Press
17 04/05/2023
Best Bidder Justification
Ferguson Waterworks was chosen as the best bidder based on price, the proximity for in-store pickup to Santa Monica, and the ability to deliver same day. Supply chain issues still affect availability of supplies. Therefore, Core & Main has been selected as backup vendor to provide department supplies in the event Ferguson Waterworks is unable to source the supplies needed for fulfillment. S&J Supply Co. submitted a bid with the lowest pricing but was unable to hold pricing beyond 30 days of submission of bid and in future years.

Environmental Review
Use of repair parts and supplies to perform preventative maintenance and/or emergency repairs is categorically exempt pursuant to Section 15302 (Replacement and Reconstruction) of the California Environmental Quality Act (CEQA) Guidelines.

Section 15302 exempts projects which “consists of replacement or reconstruction of existing structures and facilities where the new structure will be located on the same site as the structure replaced and will have substantially the same purpose and capacity as the structure replaced.” The award for water and wastewater supplies would allow for Submittals Received
Ferguson Waterworks $7,305.91 S&J Supply Co. $7,204.59
Core & Main $9,033.95

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existing facilities to be maintained and repaired with replacement materials and would not expand or materially change existing facilities or operations. Therefore, the project is categorically exempt as set forth in Section 15302 of the CEQA Guidelines.

Financial Impacts and Budget Actions
Staff seeks authority to approve funding from the Water and Wastewater Enterprise Funds to award a purchase order to Ferguson Waterworks as the primary vendor to provide water and wastewater supplies and a purchase order to Core & Main as secondary vendor in the event Ferguson Waterworks is unable to fulfill the order. Funds are included in the FY 2023-25 Proposed Biennial Budget. Future year funding is contingent on Council budget approval.

Ferguson Waterworks Purchase Order Request
(Primary Vendor)
FY 2023-24 Budget
Request Amount Department Account # Future Years Amount Total Contract Amount $390,000 50500001.525080 $2,084,000 $2,474,000
$20,000 51500001.525080 $106,000 $126,000
$410,000 $2,190,000 $2,600,000
Core & Main Purchase Order Request
(Secondary Vendor)
FY 2023-24 Budget
Request Amount Department Account # Future Years Amount Total Contract Amount $70,000 50500001.525080 $357,000 $427,000
$30,000 51500001.525080 $153,000 $183,000
$100,000 $510,000 $610,000
Prepared By: Chris Aguillon, Water Resources Protection Specialist Approved Forwarded to Council
Attachments:

A. Oaks Initiative (Ferguson)

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B. Oaks Initiative (Core and Main)

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CITY OF SANTA MONICA

OAKS INITIATIVE DISCLOSURE FORM
In order to facilitate compliance with the requirements of the Oaks Initiative, the City compiles and maintains certain information. That information includes the name of any person or persons who is seeking a “public benefit.” If the “public benefit” is sought by an entity, rather than an individual person, the information includes the name of every person who is: (a) trustee, (b) director, (c) partner, (d) officer, or has (e) more than a ten percent interest in the entity.

Public benefits include:

1. Personal services contracts in excess of $25,000 over any 12-month period;

2. Sale of material, equipment or supplies to the City in excess of $25,000 over a 12- month period;

3. Purchase, sale or lease of real property to or from the City in excess of $25,000 over a 12- month period;

4. Non-competitive franchise awards with gross revenue of $50,000 or more inany 12-month period;

5. Land use variance, special use permit, or other exception to an established land use plan, where the decision has a value in excess of $25,000;

6. Tax “abatement, exception, or benefit” of a value in excess of $5,000 in any 12- month period; or

7. Payment of “cash or specie” of a net value to the recipient of $10,000 in any 12- month period.

Name(s) of persons or entities receiving public benefit:

Name(s) of trustees, directors, partners, and officers:

Name(s) of persons with more than a 10% equity, participation, or revenue interest:

Prepared by: Title:

Signature: Date:

Email: Phone:

Permit #
FOR CITY USE ONLY:

Bid/PO/Contract #
Aaron Sadler Municipal Sales
04/03/2023
[email protected] (714)865-5196
Ferguson Enterprises, LLC dba Ferguson Waterworks
None
Kevin Murphy, CEO
Alex Hutcherson II, COO
Bill Brundage, CFO

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Attachment: Oaks Initiative (Ferguson) (4944 : Water & Wastewater Department Supplies)

CITY OF SANTA MONICA

Public benefits include:

1. Personal services contracts in excess of $25,000 over any 12-month period;

2. Sale of material, equipment or supplies to the City in excess of $25,000 over a 12- month period;

3. Purchase, sale or lease of real property to or from the City in excess of $25,000 over a 12- month period;

4. Non-competitive franchise awards with gross revenue of $50,000 or more inany 12-month period;

5. Land use variance, special use permit, or other exception to an established land use plan, where the decision has a value in excess of $25,000;

6. Tax “abatement, exception, or benefit” of a value in excess of $5,000 in any 12- month period; or

7. Payment of “cash or specie” of a net value to the recipient of $10,000 in any 12- month period.

Name(s) of persons or entities receiving public benefit:

Name(s) of trustees, directors, partners, and officers:

Name(s) of persons with more than a 10% equity, participation, or revenue interest:

Prepared by: Title:

Signature: Date:

Email: Phone:

Permit #
FOR CITY USE ONLY:

Bid/PO/Contract #
Jenna Heim Municipal Account Manager
04/01/2023
[email protected] (661)289-2719
Core & Main, LP
None
Stephen O. LeClair, CEO; Mark R. Witowski, VP & CFO; Mark G. Whittenburg, General Counsel & Secretary; Laura K. Schneider, Chief HR Officer; Bradford A Cowles, President, Fire Protection; John R. Schaller, President, Waterworks

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Attachment: Oaks Initiative (Core and Main) (4944 : Water & Wastewater Department Supplies) City Council
Report
City Council Meeting: June 13, 2023
Agenda Item: 5.B
1 of 5
To: Mayor and City Council
From: Rick Valte, Public Works Director, Public Works, Engineering and Street Services
Subject: Award Bid for Street Light Electrical Repair Services and Urgent Electrical Construction
Recommended Action
Staff recommends that the City Council:

1. Adopt a finding of Categorical Exemption pursuant to Section 15301 (Existing Facilities), of the California Environmental Quality Act (CEQA) Guidelines.

5. Authorize the City Manager to negotiate and execute an agreement with Yunex LLC in an amount not to exceed $400,000 for one year, with four additional oneyear renewal option(s) in the amount of $400,000 for a total amount not to exceed $2,000,000 over a five-year period, with future year funding contingent on Council budget approval.

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Summary
The City of Santa Monica utilizes electrical contractor services to perform as-needed streetlight and park lighting repairs and installation services as requested by the Engineering and Street Services Division. The need for contracted electrical services is due to unanticipated damage to infrastructure such as street light pole replacement due to vehicle accidents and storms. In addition, these services may be utilized to restore street light functions in the event of copper wire theft and secure City infrastructure to limit future theft. Staff recommends awarding the Street Light Electrical Repair Services and Urgent Electrical Construction bid to three (3) contractors: International Line Builders, Inc., Bear Electrical Solutions, Inc., and Yunex LLC. The recommendation to award to three contractors is being made to ensure the City has a redundant and resilient mechanism to mobilize a contractor for urgent street lighting repairs and continue to provide exceptional customer service to residents and businesses. The proposed contract amounts position the City for a rapid response to unforeseen conditions, such as copper wire theft. However, Staff intends to utilize up to $400,000 total per year amongst the three vendors, and not the full $400,000 each.

Discussion
The City owns and maintains approximately 7,150 streetlights and numerous lights in City parks. The Engineering and Street Services Division has historically utilized services of an electrical contractor to perform work outside the scope of City staff and urgent repairs such as: streetlight pole installations requiring a crane, haul-away of damaged streetlight poles requiring a crane, cabinet and pull box repairs requiring conduit and foundation work, major conduit repairs, pole foundation repairs and replacement, and other work that requires specialized equipment and training. The selected contractors would also respond to streetlight outages in the event of copper wire theft and storm-related damage to City streetlights and park lights. In the last twelve months the City has utilized services of an electrical contractor to conduct repairs and restore services. In addition, the contractor implemented anti-theft measures such as epoxying (gluing) pull box lids, adding locks to existing service cabinets, and other theft-deterrent measures.

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The recommendation to award to three contractors would ensure that the City has a redundant and resilient mechanism to mobilize a contractor for urgent street lighting repairs and continue to provide exceptional customer service to residents and businesses. There are labor shortages in the Southern California construction market and requesting a contractor to mobilize within 24-hour notice is not always guaranteed.

Consequently, having multiple contractors available would optimize the City’s resiliency.

Vendor Selection
Bidder Recommendation
Best Bidder International Line Builders, Inc.

Evaluation
Criteria
Price and labor rates; the quality of services offered; the ability, capacity and skill of the bidder to perform or provide the services; the capacity of the bidder to perform the contract or provide the service promptly, within the time specified, and without delay or interference; the sufficiency of the bidder’s financial resources; the character, integrity, reputation, judgment, training, experience and efficiency of the bidder; the ability of the bidder to provide such future maintenance or service as may be needed; any other factor that will further the intent set forth in Section 608 of the City Charter.

The City is not required to select the bid with the lowest price.

Municipal
Code
SMMC 2.24.180
Bid Data
Date Posted Posted On
Advertise In
(City Charter & SMMC)
Vendors
Downloaded
Date Publicly
Opened
03/29/2023 City's Online
Bidding Site
Santa Monica Daily
Press
35 05/04/2023
Best Bidder Justification
International Line Builders, Inc. provided the lowest labor rates and is deemed the best bidder based on its demonstrated quality of work on past projects and experience with similar electrical construction for the cities of Santa Monica, Los Angeles, Newport Beach, and California Department of Transportation (Caltrans). In addition, International Line Builders was able to commit to setting price increases for renewal options for all four years. The total bid submittal dollar amounts referenced above include amounts for Submittals Received
International Line
Builders, Inc. $108,053 Yunex LLC. $124,800
Bear Electrical
Solutions, Inc. $90,600 Baker Electric & Renewables, LLC. $185,760

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both labor and equipment as quoted.

Bear Electrical Solutions, Inc. provided the second lowest labor rates and demonstrated quality of work on past projects, and experience with similar electrical construction for the cities of Watsonville, Sunnyvale, and Burlingame. It is for these reasons that Bear Electrical Solutions, Inc., is recommended as the secondary vendor.

Yunex LLC provided the third lowest labor rates and demonstrated quality of work on past projects and experience with on-call streetlight maintenance for the cities of Huntington Beach, Norwalk, Newport Beach, and Ontario, in addition to the County of Los Angeles and Western Riverside Council of Governments. It is for these reasons that Yunex LLC is recommended as the tertiary vendor.

Environmental Assessment
The award for street light electrical repair and construction services are categorically exempt from the California Environmental Quality Act (CEQA) under Section 15301.

Section 15301 of the CEQA State Guidelines provides Class 1 (existing facilities) exemption for projects that consists of the operation, repair, maintenance, leasing, licensing, permitting, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of the existing or former use. The award for the street light electrical repair and construction services would not result in any modifications to existing facilities. The existing facilities would be maintained and repaired with the street light electrical contractor services and the award of services would not expand or materially change existing facilities or operations. Therefore, the project is categorically exempt as set forth in Section 15301 of the CEQA State Guidelines.

Financial Impacts and Budget Actions
Staff seeks authority to award agreements with International Line Builders, Inc., Bear Electrical Solutions, Inc., and Yunex LLC. for citywide as-needed streetlight electrical repair and construction services. Staff intends to utilize up to $400,000 total per year

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amongst the three vendors, and not the full $400,000 for each vendor. Funds are included in the FY 2023-25 Proposed Biennial Budget. Future year funding is contingent on Council budget approval.

Contract Requests
Vendor
FY 2023-24
Request
Amount
Future
Year’s
Amounts
Account #
Total
Contract
Amount
International Line Builders, Inc. $400,000 $1,600,000 01500034.550010 $2,000,000 Bear Electrical Solutions, Inc. $400,000 $1,600,000 01500034.550010 $2,000,000 Yunex LLC. $400,000 $1,600,000 01500034.550010 $2,000,000 Prepared By: Steven Hull, Principal Administrative Analyst Approved Forwarded to Council
Attachments:

A. Oaks Initiative Form - International Line Builders
B. Oaks Initiative Form - Bear Electrical
C. Oaks Initiative Form - YUNEX LLC

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o.t
)
GITY OF SANTA MON]CA

OAKS INITIATIVE OISCLOSURE FORM
ln order to facilitate compliance with the requirements of the Oaks lnitiative, the City compiles and maintains certain information. That information includes the name of any person or persons who is seeking a "public benefit." lf the "public benefit" is sought by an entity, rather than an individual person, the information includes the name of every person who is: (a) trustee, (b) director, (c) partner, (d)officer, or has (e) more than a ten percent interest in the entity.

Public benefits include:
lnternational Line Builders, lnc. dba ILB Electric
Name(s) of trustees, directors, partners, and officers:

Matthew Edwards - Vice President
Daniel Haggard - President / Bradley Hulquist - Vice President / Nicholas Olsen - Secretary Name(s) of persons with more than a 10% equity, participation, or revenue interest:

N/A
Prepared by: Titb: Vu;)r,lrbnlDate.05/10/2023

FOR CITY USE ONLY
Bid/PO/Contract # Permil #
Emai| W t * -fr )vwt rcLl @,tib i nU . Ct-W phgng (9s1) 682'2s82 1 . Personal services contracts in excess of $25,000 over any 12-month period;

2. Sale of material, equipment or supplies to the City in excess of $25,000 ovet a 12- month period;

3. Purchase, sale or lease of real property to or from the City in excess of $25,000 ovet a 12- month period;

4. Non-competitive franchise awards with gross revenue of $50,000 or more in any 12-month period;

5. Land use variance, special use permit, or other exception to an established land use plan, where the decision has a value in excess of $25,000; 6. Tax "abatement, exception, or benefit" of a value in excess of $5,000 in any 12- month period; or
7 . Payment of "cash or specie" of a net value to the recipient of $10,000 in any 12- month period.

Name(s) of persons or entities receiving public benefit:

Signature:

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Attachment: Oaks Initiative Form - International Line Builders (5538 : Award Bid #2685-4 to Contractors for Streetlight Electrical Construction)

CITY OF SANTA MONICA

Public benefits include:

1. Personal services contracts in excess of $25,000 over any 12-month period;

2. Sale of material, equipment or supplies to the City in excess of $25,000 over a 12- month period;

3. Purchase, sale or lease of real property to or from the City in excess of $25,000 over a 12- month period;

4. Non-competitive franchise awards with gross revenue of $50,000 or more in any 12-month period;

5. Land use variance, special use permit, or other exception to an established land use plan, where the decision has a value in excess of $25,000;

6. Tax “abatement, exception, or benefit” of a value in excess of $5,000 in any 12- month period; or

7. Payment of “cash or specie” of a net value to the recipient of $10,000 in any 12- month period.

FOR CITY USE ONLY:

Bid/PO/Contract # ____________________________ Permit # ___________________________ Name(s) of persons or entities receiving public benefit:

Bear Electrical Solutions
Name(s) of trustees, directors, partners, and officers:

Robert Asuncion, Andrew Bader, Mike Peters
Name(s) of persons with more than a 10% equity, participation, or revenue interest:

Robert Asuncion, Andrew Bader, Mike Peters
Prepared by: _Robert ____Asuncion _____________________Title: _Vice __President _ ___________________ Signature: ______________________________________ Date: _04-25-23 _ _____________ Email: ____ [email protected] ______ _________________________ Phone: _408-449-5178 ___ _______________

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Attachment: Oaks Initiative Form - Bear Electrical (5538 : Award Bid #2685-4 to Contractors for Streetlight Electrical Construction) l •l\ -l l
YUN::X

TRAFFIC
S f!lditt U•• .. •••u~ CITY OF SANTA MONICA

OAKS INITIATIVE DISCLOSURE FORM
In order to facilitate compliance with the requirements of the Oaks Initiative , the City compiles and maintains certain information. That information includes the name of any person or persons who is seeking a "public benefit." If the "public benefit" is sought by an entity, rather than an individual person, the information includes the name of every person who is: (a) trustee, (b) director, (c) partner, (d) officer, or has (e) more than a ten percent interest in the entity.

Public benefits include:

1. Personal services contracts in excess of $25,000 over any 12-month period;

2. Sale of material, equipment or supplies to the City in excess of $25,000 over a 12- month period;

3. Purchase, sale or lease of real property to or from the City in excess of $25,000 over a 12- month period;

4. Non-competitive franchise awards with gross revenue of $50,000 or more in any 12-month period;

5. Land use variance, special use permit, or other exception to an established land use plan, where the decision has a value in excess of $25,000;

6. Tax "abatement, exception, or benefit" of a value in excess of $5,000 in any 12- month period; or

7. Payment of "cash or specie" of a net value to the recipient of $10,000 in any 12- month period.

Name(s) of persons or entities receiving public benefit:

Yunex LLC
Name(s) of trustees, directors, partners, and officers:

Rodney Mathis - CEO-President & Managing Director
Dirk Rauber - CFO - Managing Director of Finance
Name(s) of persons with more than a 10% equity, participation, or revenue interest:

N/A
Date: 04/25/2023
Phone: (951) 784-6600
FOR CITY USE ONLY:

Bid/PO/Contract# _________ _ Permit# _ ________ _

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Attachment: Oaks Initiative Form - YUNEX LLC (5538 : Award Bid #2685-4 to Contractors for Streetlight Electrical Construction) City Council
Report
City Council Meeting: June 13, 2023
Agenda Item: 5.C
1 of 5
To: Mayor and City Council
From: Christopher Smith, Acting Chief Information Officer, Information Services Department, Customer Experience and Support
Subject: Approval of First Modification to Agreement No. 10788 with Motorola Solutions, Inc. for Maintenance and Support of Communications System and Radio Equipment
Recommended Action
Staff recommends that the City Council:

1. Adopt a finding of Categorical Exemption pursuant to Section 15301 (Existing Facilities), of the California Environmental Quality Act (CEQA) Guidelines;

Summary
The City of Santa Monica has implemented an interoperable public safety trunked radio communications system that integrates with the Interagency Communications Interoperability System (ICI System), a regional public safety radio network that ensures coordinated regional response in the face of a natural disaster or other emergency. This system is operated using portable and mobile radio equipment and infrastructure equipment manufactured by Motorola Solutions, Inc (Motorola). In designing the system, staff worked with representatives from the ICI System and Motorola to engineer an advanced radio system that would provide coverage throughout most of Los Angeles County for first responders, and coverage throughout the western portion of Los

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Angeles County for secondary responders. The system utilizes proprietary technology developed by Motorola. Maintenance and support for the system and replacement parts and equipment compatible with the system are available only from Motorola. Staff seeks the authority to modify the exiting agreement with Motorola to extend maintenance and support and to be able to purchase new and replacement radio equipment over a five-year period.

Discussion
Staff worked with representatives from the ICI System and Motorola to design and engineer an advanced radio system that would support Police, Fire, Public Works, and other City departments that need/ rely on radio communications, as well as integrate with the ICI System’s regional network. The radio system provides coverage throughout most of Los Angeles County for first responders, and coverage throughout the western portion of Los Angeles County for secondary responders and other users.

The radio system enables the City to establish connectivity to the regional ICI System Master Site in Glendale, California, supporting connectivity to the entire ICI System network consisting of more than 100 public safety agencies representing 42 cities within the County of Los Angeles and the LA-RICS regional network operated by the County of Los Angeles. As part of the radio system design, the City also retained the license to all its radio frequencies licensed to the City by the Federal Communications Commission.

Staff seeks approval of a maintenance and support agreement with Motorola to continue to receive comprehensive coverage of supported equipment, preventative maintenance services, and options to add support for equipment that may be purchased in the future. Additionally, it is periodically necessary to purchase replacement radio equipment, as inventory needs change or equipment becomes obsolete. The majority of the City’s radio equipment is nearing the end of their useful life, typically 7-10 years.

Staff has also budgeted to support the refresh of aging equipment in this contract modification. Therefore, staff also seeks the authority to purchase radio equipment as needed from Motorola to address future equipment needs.

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Vendor/Consultant Selection
The Association of Public Safety Communications Officials (APCO), an international organization and leader in public safety communications, has adopted standards for digital radio communication systems and equipment. The standards have been published as APCO’s Project 25 (P25) and are intended to ensure interoperable communications between public safety agencies utilizing equipment designed by different manufacturers that is compatible with one-another. Radio system manufacturers that agree to participate in the P25 program are permitted to develop technology that extends beyond P25 standards. Motorola has developed technology as part of their ASTRO 25 system that extends beyond P25 standards and is not available from other radio manufacturers.

In 2011, the ICI System Governance Board undertook a formal competitive process which resulted in the selection of Motorola. In 2022, the Joint Powers Authority signed a 6-year software upgrade agreement with Motorola which provided for a software refresh on a bi-annual basis. The City radio communications system is a P25 compliant system developed by Motorola. To ensure the City’s radio system can properly integrate with the ICI System, it is necessary to purchase equipment manufactured by Motorola.

Therefore, staff seeks approval to enter into a maintenance and support agreement and continue to purchase equipment from Motorola as an exception to the competitive process to ensure connectivity with the ICI radio system as specified in SMMC 2.24.250 (b), as competition does not exist, for proprietary items of original equipment manufacturers and/or their authorized exclusive distributors.

Environmental Review
The agreement with Motorola is categorically exempt from the California Environmental Quality Act (CEQA) under Section 15301. Section 15301 of the CEQA State Guidelines provides Class 1 (existing facilities) exemption for projects that consists of the operation, repair, maintenance, leasing, licensing, permitting, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of the existing or former use. The

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agreement would not result in any modifications to existing facilities, but rather would ensure that the communications systems would be maintained and repaired with new and replacement radio equipment. The agreement would not expand or materially change existing facilities or operations. Therefore, the project is categorically exempt as set forth in Section 15301 of the CEQA State Guidelines.

Past Council Actions
Meeting Date Description
12/08/15
(Attachment A)
Purchase of radio equipment for Police, Fire and Public Works in preparation for the implementation of an interoperable public safety trunked radio system.
03/01/16
(Attachment B)
Contractual services agreement with Motorola for purchase and installation of radio infrastructure equipment to implement an interoperable public safety trunked radio system.
12/18/18
(Attachment C)
Contractual services agreement with Motorola for maintenance and additional purchasing authority
Financial Impacts and Budget Actions
Staff seeks authority to approve funding from the General Fund, Airport, Beach Recreation, Fleet Management, Pier, Resource Recovery and Recycling, Water, and Wastewater Funds to increase the amount of agreement #10788 with Motorola Solutions, Inc. for the maintenance of the interoperable public safety trunked radio communications system and radio equipment, and the purchase of portable and mobile radio equipment. Funds are included in the FY 2023-25 Proposed Biennial Budget.

Future year funding is contingent on Council budget approval.

Agreement Modification Request
Agreement #
Current
Authorized
Amount
FY 2023-24
Request
Amount
Future Year
Amounts Account Numbers
Total
Contract
Amount
10788 $336,000 Various $336,000
Maintenance
$310 $1,016 01200015.529080 $1,326
$41,236 $135,115 01180005.529230 $176,351
$7,689 $25,194 01190001.529240 $32,883
$17,858 $58,514 Various in Public Works $76,372

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$372 $1,219 01700005.525080 $1,591
Subtotal
Maintenance $336,000 $67,465 $221,058 $624,523
Equipment $750,000
As-Required up to
$4,500,000
Various Operating and
CIP $5,250,000
Grand Total $1,086,000 $67,465 $221,058 $5,874,523
Prepared By: Adam Orland, Business Process Technology Analyst Approved Forwarded to Council
Attachments:

A. December 8, 2015 Staff Report for Purchase of Interoperable Public Safety Trunked Radio System (Web Link)
B. March 1, 2016 Staff Report for Procurement of Public Safety Radio Equipment from Motorola (Web Link)
C. December 18, 2018 Staff Report for Maintenance and Additional Purchasing Authority with Motorola (Web Link)
D. Executed Agreement - Motorola
E. Motorola Oaks Form 2023

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Attachment: Executed Agreement - Motorola (5651 : Motorola Contract Modification)

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Attachment: Executed Agreement - Motorola (5651 : Motorola Contract Modification) Advanced Services
Statement of Work
Version 1.2
September 2016

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Attachment: Executed Agreement - Motorola (5651 : Motorola Contract Modification) Advanced Services
© Motorola 2017

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Table of Contents
Advanced Services 3
Customer Support Plan (CSP) 3
Centralized Service Delivery 3
Field Service Delivery 4
Network Hardware Repair 4
Security Management Operations 5
Appendix A: Network Event Monitoring Statement of Work 6 Appendix B: Technical Support Statement of Work 12
Appendix C: Network Hardware Repair with Advanced Replacement Statement of Work 17 Appendix D: Remote Security Patch Installation Statement of Work 23 Appendix E: OnSite Support Statement of Work 28
Appendix F: Annual Preventive Maintenance Statement of Work 32 Appendix G: SFS Lite – Subscriber Support 41
Appendix H: Infrastructure Pricing 43
Appendix I: Subscriber Pricing 43
Appendix J: Terms and Conditions 45

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This Statement of Work (SOW), including all of its subsections and attachments is an integral part of the Services Agreement or other signed agreement between Motorola Solutions, Inc. (Motorola) and Customer (“Agreement”) and is subject to the terms and conditions set forth in the Agreement.

Advanced Services are Network Event Monitoring, Technical Support, Network Hardware Repair, Remote Security Patch Installation, OnSite Support and Annual Preventive Maintenance. Each of these services are summarized below and expanded upon in the appendices A, B, C, D, E and F. In the event of a conflict between the Sections below and an individual SOW Subsection, the individual SOW Subsection prevails.

Advanced Services
Motorola’s Advanced Services are designed for customers who would benefit from Motorola’s support experience. Advanced Services are delivered through a combination of centralized resources within Motorola’s Solutions Support Center (SSC) collaborating with authorized local field services delivery resources that are experienced in managing mission critical networks and associated technologies. The MSI SSC operates 24 x 7 x 365, leveraging field resources that are either dedicated to the network or engaged as needed.

Advanced Services applies to fixed end communications network equipment located at the network core, RF site and dispatch sites. Advanced Services do not include maintenance of mobile or portable devices, or network backhaul.

The services described in this SOW will be performed in accordance with the Customer Support Plan (CSP) agreed upon by the parties.

The CSP will define the system elements covered under Advanced Services. The division of responsibilities between Motorola and Customer shall be defined and documented in the Appendices of this SOW, the Advanced Services CSP and other portions of the Agreement.

Customer Support Plan (CSP)
The Advanced Services Statement of Work summarizes Motorola’s delivery approach and standard goals. Since individual customer technologies, systems, operating environments, and operational capabilities differ, the outlined services approach in the Advanced Services SOW will be adapted to each Customer’s own environment and unique needs via the CSP.

The CSP is a critical component of this SOW and, once created, will automatically become integrated into this SOW by this reference. Motorola and Customer will collaborate to define the Customerspecific processes, procedures, network information, and other relevant support details required to perform the Services set forth in the Advanced Services SOW.

Centralized Service Delivery
Network Event Monitoring provides for real time continuous event management for radio communications networks. The SSC Network Operations Center utilizes sophisticated tools for remote monitoring and event characterization of customer communications networks. When an event is detected, technologists acknowledge and assess the situation, and initiate a defined response. Appendix A contains the SOW for Network Event Monitoring.

Technical Support provides telephone consultation for technical issues that require a high level of ASTRO 25 network experience and troubleshooting capabilities. Technical Support is delivered through the Motorola Solutions Support Center (SSC) by a staff of technical support specialists skilled in diagnosis and swift resolution of infrastructure performance and operational issues.

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Motorola applies leading industry standards in recording, monitoring, escalating and reporting for Technical Support calls from its contracted customers, reflecting the importance of maintaining mission critical systems. Appendix B contains the SOW for Technical Support.

The Service Desk provides a single point of contact for all Service related items, including communications between Customer, Third-Party Subcontractors, and Motorola. The Service Desk provides an ingress/egress point for Service Requests, Service Incidents, Changes, and Dispatch. All incoming transactions through the Service Desk are recorded, tracked and updated through the Motorola Customer Relationship Management (CRM) system. Key responsibilities are:

Documentation of customer inquiries, requests, concerns and related tickets. Tracking and resolution of issues, and timely communication with all stakeholders is based on the nature of the incident and the requirements of the CSP. The Services Desk will manage service requests received from authorized parties and will coordinate the appropriate response with Customer and third parties, as necessary.

Field Service Delivery
Advanced Services are provided by authorized local field Services delivery resources. Annual Preventive Maintenance and OnSite Support are both managed from the SSC, but delivered by authorized local field services resources.

OnSite Support provides local, trained and qualified technicians who arrive at the customer location upon a dispatch service call to diagnose and restore the communications network. This involves running diagnostics on the hardware or FRU (Field Replacement Unit) and replacing defective infrastructure or FRU. The system technician will respond to the customer location based on predefined severity levels. Appendix E contains the SOW for Onsite Support.

Annual Preventive Maintenance Service provides proactive, regularly scheduled operational test and alignment of infrastructure and network components to continually meet original manufacturer’s specifications. Certified field technicians perform hands-on examination and diagnostics of network equipment on a routine and prescribed basis. Appendix F contains the SOW for Annual Preventive Maintenance.

Subscriber Support through Motorola’s Field Service Organization (FSO) covers listed subscriber radios of the City of Santa Monica Police, Fire, and Public Works department.

Network Hardware Repair with Advanced Replacement
Motorola provides a hardware repair service for all of the Motorola and select third-party infrastructure equipment supplied by Motorola. The Motorola authorized Repair Depot manages and performs the repair of Motorola supplied equipment as well as coordinating the equipment repair logistics process. Appendix C contains the SOW for Network Hardware Repair.

Network Hardware Repair with Advanced Replacement will provide Customer with an advanced replacement unit(s) or Field Replacement Units (FRU’s) as they are available in exchange for Customer’s malfunctioning equipment. Malfunctioning equipment will be evaluated and repaired by the infrastructure repair depot and returned to depot’s FRU inventory upon completion of repair.

Customers who prefer to maintain their existing FRU inventory have an option to request a “Loaner” FRU while their unit is being repaired. If purchased, an appendix with the Network Hardware Repair with Advanced Replacement SOW will be included at the end of this document.

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Security Management Operations
Remote Security Patch Installation
Motorola maintains a dedicated vetting lab for each supported ASTRO 25 release for the purpose of pre-testing security updates. In some cases, when appropriate, Motorola will make the updates available to outside vendors, allow them to test, and then incorporate those results into this offering. Once tested, Motorola posts the updates to a secured extranet website and sends an email notification to the customer. If there are any recommended configuration changes, warnings, or workarounds, Motorola will provide detailed documentation along with the updates on the website. In addition to testing the security updates, Remote Security Patch Installation includes remote installation of the updates. Appendix D contains the SOW for Remote Security Patch Installation.

My View Portal
MyView Portal is a web-based platform that provides a transparent, single source view of network maintenance and operations along with historical system and service delivery information. It can be accessed from a desktop, laptop or tablet web browser.

Event Monitoring Reports: See resolution status for incidents and notifications by severity level.

Technical Support: View case status details to compare them to committed response times.

OnSite Support: Observe case details by severity level and track the progress of onsite support issue resolution.

Annual Preventive Maintenance: Access the maintenance status for all sites and quickly identify actions needed to take to optimize system performance.

Network Hardware Repair: Track return material authorizations (RMAs) shipped to our repair depot and eliminate the need to call for status updates.

Security Patching: Receive automated patch downloads and status on competed updates.

Trending Reports: Access up to 13 months of historical data and system activity to analyze case management.

Asset and Contract Information: View all the assets purchased for the network, recent orders, and contract information.

The data presented in MyView Portal is in support of the appendix SOW's which provide the terms of any service delivery commitments associated with this data.

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Appendix A: Network Event Monitoring Statement of Work
Network Event Monitoring provides real-time fault monitoring for radio communications networks on a continuous basis. Network Event Monitoring utilizes sophisticated tools for remote monitoring and event characterization of your communications networks. When an event is detected, skilled technologists acknowledge and assess the situation, and initiate a defined response.

The terms and conditions of this Statement of Work (SOW) are an integral part of Motorola's Service Agreement or other applicable agreement to which it is attached and made a part thereof by this reference.

1.0 Description of Network Event Monitoring Services
Network Event Monitoring is a service designed to monitor elements of a communication system for events, as set forth in the Monitored Elements Table. When the SSC detects an event, then, based on the severity of the event, trained technologists acknowledge and remotely diagnose the event and initiate an appropriate response in accordance with the customer handling procedure.

Appropriate responses could include, but are not limited to, continuing to monitor the event for further development, attempting remote remediation via engagement of Technical Support resources, or initiating dispatch of a Field Servicer (“Servicer”) for onsite remediation if required.

1.1 Availability
Network Event Monitoring is available 24 hours a day, 7 days a week. Network Event Monitoring availability is based on the level of contracted service and defined in the Customer Support Plan (CSP).

1.2 Geographic Availability
Network Event Monitoring is a globally provided service unless limited by data export control regulations. Timeframes are based on the customer’s local time zone.

1.3 Inclusions
Network Event Monitoring can be delivered on Motorola sold infrastructure as stated in the Monitored Elements Table.

1.4 Limitations and Exclusions

1.4.1 Does not include monitoring of anything outside of the radio network or monitoring of infrastructure provided by a third party, unless specifically stated.

Monitored elements must be within the radio network and capable of sending traps to the Unified Event Manager (UEM).

1.4.2 Additional support charges above and beyond the contracted service agreement fees may apply if Motorola determines that system faults were caused by the customer making changes to critical system parameters.

1.4.3 The following activities are outside the scope of the Network Monitoring service, but are optional services that are available to remote Network Monitoring customers at an additional cost:

1.4.3.1 Emergency on-site visits required to resolve technical issues that cannot be resolved by SSC working remotely with the local customer technical resource.

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1.4.3.2 System installations, upgrades, and expansions.

1.4.3.3 Customer training.

1.4.3.4 Hardware repair and/or exchange.

1.4.3.5 Network security services.

1.4.3.6 Network transport (WAN ports, WAN cloud, redundant paths).

1.4.3.7 Information Assurance.

1.4.3.8 Any services not expressly included in this statement of work.

1.4.4 Reference the event catalogue to confirm monitored equipment.

1.5 Motorola has the following responsibilities:

1.5.1. Provide dedicated connectivity through a network connection necessary for monitoring communication networks. The Connectivity Matrix further describes the connectivity options.

1.5.2 If determined necessary by Motorola, provide Motorola owned equipment for monitoring system elements. If Motorola installs or replaces Motorola owned equipment, the type of equipment and location installed is listed in the Motorola Owned & Supplied Equipment Table.

1.5.3 Verify connectivity and event monitoring prior to system acceptance or start date.

1.5.4 Monitor system continuously during hours designated in the CSP in accordance with the pre-defined times specified in section 1.6.2 below.

1.5.5 Remotely access the customer’s system to perform remote diagnosis as permitted by customer pursuant to section 1.6.4.

1.5.6 Create a case, as necessary. Gather information to perform the following:

1.5.6.1 Characterize the issue

1.5.6.2 Determine a plan of action

1.5.6.3 Assign and track the case to resolution.

1.5.7 Cooperate with customer to coordinate transition of monitoring responsibilities between Motorola and customer as specified in section 1.6.13 and 1.6.13.1.

1.5.8 Maintain communication as needed with the customer in the field until resolution of the case

1.6 The Customer has the following responsibilities:

1.6.2 Allow Motorola continuous remote access to enable the monitoring service.

1.6.3 Provide continuous utility service to any Motorola equipment installed or utilized at customer’s premises to support delivery of the service. Customer acknowledges Risk of loss to any Equipment provided to Customer as part of the Services will reside with Customer upon delivery and will remain with Customer until Equipment is returned to Motorola or its authorized representative.

1.6.4 Provide Motorola with pre-defined customer information and preferences prior to Start Date necessary to complete the CSP, including, but not limited to:

1.6.4.1 Case notification preferences and procedure

1.6.4.2 Repair Verification Preference and procedure

1.6.4.3 Database and escalation procedure forms.

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1.6.4.4 Submit changes in any information supplied to Motorola and included in the CSP to the CSM.

1.6.5 Provide the following information when initiating a service request:

1.6.5.1 Assigned system ID number

1.6.5.2 Problem description and site location

1.6.5.3 Other pertinent information requested by Motorola to open a Case.

1.6.6 Notify the SSC when customer performs any activity that impacts the system. (Activity that impacts the system may include, but is not limited to, installing software or hardware upgrades, performing upgrades to the network, renaming elements or devices within the network, or taking down part of the system to perform maintenance.)

1.6.7 Allow Servicers access to equipment (including any connectivity or monitoring equipment) if remote service is not possible.

1.6.8 Allow Servicers access to remove Motorola owned monitoring equipment upon cancellation of service.

1.6.9 Provide all customer managed passwords required to access the customer’s system to Motorola upon request or when opening a case to request service support or enable response to a technical issue.

1.6.10 Pay additional support charges above and beyond the contracted service agreements that may apply if it is determined that system faults were caused by the customer making changes to critical system parameters

1.6.11 Obtain at Customer’s cost all third party consents or licenses required to enable Motorola to provide the monitoring service.

1.6.12 Cooperate with Motorola and perform all acts that are reasonable or necessary to enable Motorola to provide the services described in this SOW.

1.6.13 Contact Motorola to coordinate transition of monitoring when monitoring responsibility is to be transferred to or from Motorola. (I.e. normal business hours to after-hours monitoring) as set forth in pre-defined information provided by customer CSP.

1.6.13.1Upon contact, customer must provide customer name, site id, status on any open cases, severity level, and brief description of case and action plan to Motorola.

1.6.14 Acknowledge that cases will be handled in accordance with the times and priorities as defined in the Event Definition table- Appendix A.

1.6.15 Cooperate with Motorola and perform all acts that are reasonable or necessary to enable Motorola to provide the Network Event Monitoring.

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Engagement Matrix
The event types are based on the defined levels as follows:

Severity
Level
Severity Definition Engagement Times
1 This is defined as a critical/major incident that
causes the system and/or infrastructure to
experience a loss of call processing
functionality and no work-around or
immediate solution is available.

The following are examples of this kind of
failure:
o 33% of call processing resources
impaired
o Remote Site/sub-systemsevered
o Site Environment alarms:
o Smoke
o Unauthorized access
o Temperature
o Power failure
Response provided 24 hours, 7 days a
week, including US Holidays.
2 This is defined as a moderate/minor incident
that causes the system to operate with a
continuous reduction in capacity or
functionality of core services (core services
include, voice, data or network management).

The following are examples of this kind of
failure:
o Less than 33% of call processing
resourcesimpaired
o Failure of a single redundant
component
Response provided 8 x 5 on standard
business days, which is normally
Monday through Friday 8AM to 5PM,
excluding US Holidays.
3 This is defined as a minor issue, which has little
or no impact on the functionality, efficiency or
usability of core services. The following are
examples of this kind of severity:
o Faults that have no impact in howthe
user perceives the system to work
o Intermittent issues
o Requests forinformation
Response provided 8 x 5 on standard
business days, which is normally
Monday through Friday 8AM to 5PM,
excluding US Holidays.

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o Preventive Maintenance or upgrade
related work
Connectivity Matrix
Request connectivity 8 weeks in advance of service start date System Type Connectivity Set up and Maintenance
ASTRO® 25 Internet VPN Motorola
ASTRO® 25 T1 Motorola
Motorola Owned & Supplied Equipment Table
Equipment Type Location Installed
Firewall/Router Master Site
Service Delivery Management Server Master Site for each Zone

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Monitored Elements Table
Master Site Infrastructure RF Site Equipment Dispatch Site Equipment Servers & Back up Servers Channels Consoles
MOSCAD (digital inputs & RS232
serial alarms)
MOSCAD (digital inputs &
RS232 serial alarms)
AIS Servers
TRAK RF Site Communication
Path
Operator Position (OP)
Core LAN Switch Switch Motorola Gold Elite Gateway
(MGEG)
Packet Data Gateway (PDG) Site Controller Call Processor Radio Network Gateway (RNG) Router Logging Replay Station (only within the Radio Network
Interface “RNI”)
Zone Database Server (ZDS) Gateway Router Ambassador (AMB) Gateway Router Network Time Protocol
(NTP)
Client Station
Controller – Zone & Domain Firewall Voice Processing Module (VPM)
Firewall Manager Servers SmartX Site Converter
(only the converter, not
the legacy sites)
MCC 7500 IP Logging Recorders
Air Traffic Router (ATR) MCC 7100 (only within the Radio Network Interface “RNI”)
Unified Event Manager (UEM) Conventional Channel Gateway (CCGW)
Zone Statistical Server (ZSS)
Install Server
*Some or all of the above equipment may be monitored depending on system configuration and need. Other equipment (not listed) may be monitored as an option, consult with your Customer Support Manager for details.

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Appendix B: Technical Support Statement of Work
Motorola’s Technical Support service provides telephone consultation for technical issues that require a high level of ASTRO 25 network knowledge and troubleshooting capabilities. Remote Technical Support is delivered through the Motorola Solutions Support Center (SSC) by a staff of technical support specialists skilled in diagnosis and swift resolution of infrastructure performance and operational issues.

1.1 Description of Technical Support Services
Motorola’s Solutions Support Center’s (SSC) primary goal is Customer Issue Resolution (CIR), providing Incident Restoration and Service Request Fulfillment on Motorola’s currently supported infrastructure. This team of highly skilled, knowledgeable, and experienced specialists is available to the customer as an integrated part of the support and technical issue resolution process. The SSC remotely supports the customer and works with but not limited to fault diagnostics tools, simulation networks and fault database search engines.

Technical Support is available Monday - Friday 8:00am - 5:00pm local site time and 24 hours a day, 7 days a week for Severity 1 Incidents. Technical Support availability for severity 2, 3 and 4 incidents is outlined in the Severity Level Response Goals. Calls requiring incidents or service requests will be logged in Motorola’s Customer Relationship Management (CRM) system. This helps ensure that technical issues are prioritized, updated, tracked and escalated as necessary, until resolution.

Technical Support Operations assigns the impact level in accordance with the agreed Severity Level Definitions stated in this document.

Motorola will track the progress of each case from initial capture to resolution. Motorola will advise and inform the customer of the case progress and tasks that require further investigation and assistance from the customer’s technical resources.

This service requires the customer to provide a suitably trained technical resource that delivers maintenance and support to the customer’s system, and who is familiar with the operation of that system. Motorola provides technical consultants to support the local resource in the timely closure of infrastructure, performance and operational issues.

1.2 Scope
Technical Support service is available Monday - Friday 8:00am - 5:00pm local site time and 24 hours a day, 7 days a week for Severity 1 Incidents. See Severity Level Definitions.

1.3 Inclusions
Technical Support service will be delivered on Motorola sold infrastructure including integrated 3rd party products.

1.4 Limitations and Exclusions
The following activities are outside the scope of the Technical Support service, but are optional services that are available to remote Technical Support customers at an additional cost:

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1.4.1 Emergency on-site visits required to resolve technical issues that cannot be resolved with the SSC working remotely with the local customer technical resource.

1.4.2 Third party support for equipment not sold by Motorola.

1.4.3 System installations, upgrades, and expansions.

1.4.4 Customer training.

1.4.5 Hardware repair and/or exchange.

1.4.6 Network security services.

1.4.7 Network transport management.

1.4.8 Motorola services not included in this statement of work.

1.4.9 Any technical support required as a result of a virus or unwanted intrusion is excluded if the system is not protected against these security threats by Motorola’s Pretested Security Update Service when applicable.

1.5 Motorola has the following responsibilities:

1.5.1. Provide availability to the Motorola Solution Support Center (800-221-7144), 24 hours a day, 7 days a week to respond to Customer’s requests for Severity 1 support. Refer to Severity Level Response Time Goals for Severity 2, 3 and 4 response times.

1.5.2. Respond initially to Incidents and Technical Service Requests in accordance with the response times set forth in the Severity Level Response Time Goals section of this document and the severity level defined in the Severity Level Definitions section of this document.

1.5.3. Provide caller a plan of action outlining additional requirements, activities or information required to achieve restoral/fulfillment.

1.5.4. Maintain communication with the customer in the field as needed until resolution of the case

1.5.5. Coordinate technical resolutions with agreed upon third party vendors, as needed.

1.5.6. Manage functionally escalated support issues to additional Motorola technical resources, as applicable.

1.5.7. Determine, in its sole discretion, when a case requires more than the Technical Support services described in this SOW and notify customer of an alternative course of action.

1.6. The Customer has the following responsibilities:

1.6.1. Provide Motorola with pre-defined information prior to contract start date necessary to complete Customer Support Plan (CSP).

1.6.2. Submit changes in any information supplied in the Customer Support Plan (CSP) to the Customer Support Manager (CSM).

1.6.3. Contact the SSC in order to engage the Technical Support service, providing the necessary information for proper entitlement services. Including but not limited to the name of contact, name of customer, system ID number, site(s) in question, and brief description of the problem including pertinent information for initial issue characterization.

1.6.4. Maintain suitable trained technical resources that provide field maintenance and technical maintenance services to the system, and who are familiar with the operation of that system.

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1.6.5. Supply suitably skilled and trained on-site presence when requested by the SSC.

1.6.6. Validate issue resolution prior to close of the case in a timely manner.

1.6.7. Acknowledge that cases will be handled in accordance with the times and priorities as defined in the Severity Level Definitions and in the Severity Level Response Time Goals section in this document.

1.6.8. Cooperate with Motorola and perform all acts that are reasonable or necessary to enable Motorola to provide the Technical Support

1.6.9 Obtain at Customer’s cost all third party consents or licenses required to enable Motorola to provide the Service.

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1.7 Severity Level Definitions
The following severity level definitions will be used to determine the maximum response times:

Severity
Level Severity Definition
Severity 1 This is defined as a failure that causes the system and/or infrastructure a loss of voice functionality and no work-around or immediate solution is available.

The following are examples of this kind of failure:
• 33% of call processing resourcesimpaired
• Site Environment alarms:
o Smoke,
o Unauthorized access
o Temperature
o Power failure
Severity 2 This is defined as a fault that causes the system to operate with a continuous reduction in capacity or functionality of core services (core services consist of: Voice, data or network management).

The following are examples of this kind of failure:
₀ Less than 33% of call processing resourcesimpaired
₀ Failure of a single redundantcomponent
Severity 3 This is defined as a fault which reduces the functionality, efficiency or usability of core services (voice, data and network management) and there is a viable work-around in place.

The following are examples of this kind of severity:
₀ Intermittent faults that are infrequent and minor impact to core services
₀ Statistical reportingproblems
Severity 4 This is defined as a minor issue, which has little or no impact on the functionality, efficiency or usability of core services. The following are examples of this kind of severity:
₀ Faults resulting in minor functions or features being unsupported or unreliable in ways that are not noticeable to theuser.
₀ Faults that have no impact in how the user perceives the system to work.
₀ Cosmetic issues.
₀ Requests forinformation.

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1.8 Severity Level Response Goals
The response times are based on the defined severity levels as follows:

Severity Level Response Time
Severity 1 A Motorola SSC Technician will make contact with the customer technical representative within one hour of the request for support being logged in the issue management system. Continual effort will be maintained to restore the system or provide a workaround resolution. Response provided 24 x 7.

Severity 2 A Motorola SSC Technician will make contact with the customer technical representative within four hours of the request for support being logged at the issue management system. Response provided 8 x 5 on standard business days, which is normally Monday through Friday 8AM to 5PM, excluding US Holidays.

Severity 3 A Motorola SSC Technician will make contact with the customer technical representative within the next business day of the request for support being logged at the issue management system. Response provided 8 x 5 on standard business days, which is normally Monday through Friday 8AM to 5PM, excluding US Holidays.

Severity 4 A Motorola SSC Technician will make contact with the customer technical representative within the next business day of the request for support being logged at the issue management system. Response provided 8 x 5 on standard business days, which is normally Monday through Friday 8AM to 5PM, excluding US Holidays.

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Appendix C: Network Hardware Repair with Advanced Replacement Overview Network Hardware Repair with Advanced Replacement is a repair exchange service for Motorola and select third party infrastructure supplied by Motorola. When available, Motorola will provide customer with an advanced replacement unit(s) or Field Replacement Units (FRU’s) in exchange for customer’s malfunctioning equipment. Malfunctioning equipment will be evaluated and repaired by the infrastructure repair depot and returned to depot’s FRU inventory upon completion of repair.

For customers who prefer to maintain their existing FRU inventory they have an option to request a “Loaner” FRU while their unit is being repaired. Refer to the Advanced Exchange or Loaner Decision Process flowchart for details on the loaner process.

The Motorola authorized repair depot manages and performs the repair of Motorola supplied equipment as well as coordinating the equipment repair logistics process.

1.0 Description of Services
Infrastructure components are repaired at a Motorola authorized Infrastructure Depot Operations (IDO). At Motorola’s discretion, select third party infrastructure may be sent to the original equipment manufacturer or third party vendor for repair.

1.1 Scope
Repair authorizations are obtained by contacting the Solutions Support Center which is available 24 hours a day, 7 days a week. Repair authorizations can also be obtained online via Motorola Online at under Repair Status/Submit Infrastructure RA.

Motorola Online: https://businessonline.motorolasolutions.com

1.2 Inclusions
Network Hardware Repair with Advanced Replacement is available on Motorola sold infrastructure including integrated 3rd party products. Motorola will make a “commercially reasonable effort” to repair Motorola manufactured infrastructure products for seven (7) years after product cancellation.

1.3 Exclusions
If infrastructure is no longer supported by either Motorola, the original equipment manufacturer or a third party vendor, as applicable Motorola may return said equipment to the customer without repair or replacement. The following items are excluded from Network Hardware Repair with Advanced Replacement:

1.3.1 All Motorola infrastructure hardware over seven (7) years from product cancellation date.

1.3.2. All third party infrastructure hardware over three (3) years from product cancellation date.

1.3.3 All broadband infrastructure three (3) years from product cancellation date

1.3.4 Physically damaged infrastructure.

1.3.5 Third party equipment not shipped by Motorola.

1.3.6 Consumable items including, but not limited to, batteries, connectors, cables, toner/ink cartridges, tower lighting, laptop computers, monitors, keyboards and mouse.

1.3.7 Video retrieval from digital in-car video equipment.

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1.3.8 Infrastructure backhaul such as, Antennas, Antenna Dehydrator, Microwave1, Line Boosters, Amplifier, Data Talker Wireless Transmitter, Short haul modems, UPS1

1.3.9 Test equipment.

1.3.10. Racks, furniture and cabinets.

1.3.11. Non-standard configurations, customer-modified infrastructure and certain third party infrastructure are excluded from advanced replacement service.

1.3.11. Firmware and/or software upgrades.
1 Excluded from service agreements but may be repaired on an above contract, time and material basis. All UPS Systems must be shipped to IDO for repair. Excludes batteries and any on-site services.

1.4 Motorola has the following responsibilities:

1.4.1 Enable customer access to the Motorola call center which is operational 24 hours a day, 7 days per week, to create requests for advanced replacement service.

1.4.2. Use commercially reasonable efforts to maintain FRU inventory on supported platforms.

1.4.3. Provide new or reconditioned FRU’s to the customer, upon request and subject to availability. The FRU will be of similar equipment and version, and will contain equivalent boards and chips, as the customer’s malfunctioning FRU.

1.4.4. Load firmware/software for equipment that requires programming. The software version information must be provided for the replacement FRU to be programmed accordingly. If the customer software version/configuration is not provided, shipping times will be delayed.

1.4.5 Package and ship Advance Exchange FRU from the FRU inventory to customer specified address.

1.4.5.1. During normal operating hours of Monday through Friday 7:00am to 7:00pm CST, excluding holidays, FRU will be shipped from Motorola as soon as possible depending on stock availability and configuration requested. Motorola will pay for the shipping to the customer, unless customer requests shipments outside of standard business hours and/or carrier programs, such as weekend or next flight out (NFO) shipment. In such cases, customer will be responsible for shipping and handling charges.

1.4.5.2. When sending the advanced replacement FRU to customer, provide a return air bill in order for customer to return the customer’s malfunctioning FRU. The customer’s malfunctioning FRU will become property of the Motorola repair depot or select third party and the customer will own the advanced replacement FRU.

1.4.5.3. When sending a loaner FRU to customer, Motorola will pay for outbound shipping charges. Inbound shipping to Motorola for repair is the responsibility of the customer. Motorola will repair and return the customer’s FRU and will provide a return air bill for the customer to return IDO’s loaner FRU. Refer to Advanced Exchange or Loaner Decision Process flowchart for the loaner process and Shipping Charges for shipping charge detail.

1.4.6. Provide repair return authorization number upon customer request for Infrastructure that is not classified as an advanced replacement or loaner FRU.

1.4.7. Provide a repair Return Authorization (RA) number so that the returned FRU can be repaired and returned to FRU stock.

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1.4.8. Receive malfunctioning FRU from Customer, carry out repairs and testing and return it to the FRU stock

1.4.9. Receive malfunctioning infrastructure from customer and document its arrival, repair and return.

1.4.10. Perform the following service on Motorola infrastructure:

1.4.10.1. Perform an operational check on the infrastructure to determine the nature of the problem.

1.4.10.2. Replace malfunctioning Field Replacement Units (FRU) or components.

1.4.10.3. Verify that Motorola infrastructure is returned to Motorola manufactured specifications, as applicable

1.4.10.4. Perform a box unit test on all serviced infrastructure.

1.4.10.5. Perform a system test on select infrastructure.

1.4.11. Provide the following service on select third party infrastructure:

1.4.11.1. Perform pre-diagnostic and repair services to confirm infrastructure malfunction and eliminate sending infrastructure with no trouble found (NTF) to third party vendor for repair, when applicable.

1.4.11.2. Ship malfunctioning infrastructure components to the original equipment manufacturer or third party vendor for repair service, when applicable.

1.4.11.3. Track infrastructure sent to the original equipment manufacturer or third party vendor for service.

1.4.11.4. Perform a post-test after repair by Motorola, to confirm malfunctioning infrastructure has been repaired and functions properly in a Motorola system configuration, when applicable.

1.4.12. For loaner equipment, Motorola will ship repaired infrastructure to the customer specified address during normal operating hours of Monday through Friday 7:00am to 7:00pm CST, excluding holidays. FRU will be sent two-day air unless otherwise requested.

Motorola will pay for such shipping, unless customer requests shipments outside of the above mentioned standard business hours and/or carrier programs, such as NFO (next flight out). In such cases, customer will be responsible for payment of shipping and handling charges.

1.5 The Customer has the following responsibilities:

1.5.1 Contact or instruct Servicer to contact the Motorola Solutions Support Center (SSC) and request a return authorization number prior to shipping malfunctioning infrastructure or third party infrastructure named in the applicable attached exhibit.

1.5.2 Provide model description, model number and serial number, type of system and firmware version, software options, symptom of problem and address of site id for FRU or infrastructure.

1.5.3 Indicate if FRU or third party FRU being sent in for service was subjected to physical damage or lightning damage.

1.5.4 Follow Motorola instructions regarding inclusion or removal of firmware and software applications from infrastructure being sent in for service.

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1.5.5 Provide customer purchase order number to secure payment for any costs described herein.

1.5.6. Pay for shipping of Advanced Replacement or Loaner FRU from Motorola repair depot if customer requested shipping outside of standard business hours or carrier programs set forth in section 1.5.5.1. See Shipping Charges.

1.5.7. Properly package and ship the malfunctioning FRU using the pre-paid air-bill that arrived with the advanced replacement FRU. Customer is responsible for properly packaging the malfunctioning infrastructure FRU to ensure that the shipped infrastructure arrives undamaged and in repairable condition. Customer will be subject to a replacement fee for malfunctioning FRU’s not properly returned.

1.5.8. Within five (5) business days of receipt of the advanced replacement FRU from Motorola’s FRU inventory, properly package customer’s malfunctioning FRU and ship the malfunctioning Infrastructure to Motorola’s repair depot for evaluation and repair.

Customer must send the return air bill back to the repair depot in order to facilitate proper tracking of the returned infrastructure. Customer will be subject to a full replacement fee for FRU’s not returned within 5 business days.

1.5.9. For Infrastructure and/or third party infrastructure repairs that are not exchanged in advance, properly package Infrastructure and ship the malfunctioning FRU, at Customer’s expense and risk of loss to Motorola.

1.5.10. Clearly print the return authorization number on the outside of the packaging.

1.5.11. Maintain information of software/applications and firmware for re-loading of infrastructure.

1.5.12. Cooperate with Motorola and perform all acts that are reasonable or necessary to enable Motorola to provide the infrastructure repair services to customer.

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Advanced Exchange or Loaner Decision Process:

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Shipping Charges:
*Motorola shipping carriers – FedEx and DHL

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Appendix D: Remote Security Patch Installation Statement of Work To verify compatibility with your ASTRO 25 system, Motorola’s Remote Security Patch Installation provides pre-tested 3rd party software (SW) security updates.

In addition to testing the security updates, Remote Security Patch Installation includes remote installation of the updates.

This Statement of Work (“SOW”) is subject to the terms and conditions of Motorola’s Professional Services Agreement, Service Agreement or other applicable agreement in effect between the parties (“Agreement”). Motorola and Customer may be referred to herein individually as a “Party or together as “Parties”

1.1 Description of Remote Security Patch Installation
Motorola shall maintain a dedicated vetting lab for each supported ASTRO 25 release for the purpose of pre-testing security updates. In some cases, when appropriate, Motorola will make the updates available to outside vendors, allow them to test, and then incorporate those results into this offering. Depending on the specific ASTRO 25 release and customer options, these may include updates to antivirus definitions, OEM vendor supported Windows Workstation and Server operating system patches, Solaris and Red Hat Linux (RHEL) operating system patches, VMware ESXi Hypervisor patches, Oracle database patches, PostgreSQL patches, and patches for other 3rd party Windows applications such as Adobe Acrobat and Flash.

Motorola has no control over the schedule of releases. The schedule for the releases of updates is determined by the Original Equipment Manufacturers (OEMs), without consultation with Motorola.

Antivirus definitions are released every week. Microsoft patches are released on a monthly basis.

Motorola obtains and tests these updates as they are released. Other products have different schedules or are released “as-required.” Motorola will obtain and test these OEM vendor supported updates on a quarterly basis.

1.2 Connectivity
To accommodate remote installation of security updates, a connection is required from Motorola to the customer ASTRO 25 network. There are two different options. 1) T1 line purchased and maintained by Motorola, or 2) The customer internet connection is used and a Virtual Private Network (VPN) is established between Motorola and the ASTRO 25 network. Since this relies on the customer internet connection, the customer is responsible for the availability of the connection.

Along with the connection itself, Motorola supplied hardware is required to be deployed to the customer premises on the ASTRO 25 network. Motorola shall load software, configure, and ship the hardware to the customer supplied contact for installation. This hardware and its maintenance is part of the connectivity service.

ASTRO 25 connectivity is ordered separately from Remote Security Patch Installation and has a separate statement of work. See that SOW for more detail on terms of the connection.

If connectivity is already established for a different service such as network or security monitoring then the same connection can be used for Remote Security Patch Installation. There is no need for a separate connection to be established.

1.3 Security Update Installation
Motorola shall push the tested security updates over the established connection. The timing and coordination with the customer of each update depends on the updates themselves. Motorola requires IP connectivity to all elements that are in scope for patching. If IP connectivity from

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Motorola is not available then those elements will not be considered for remote patching and will require alternative arrangements outside of the scope of this statement of work.

1.3.1 Antimalware Signature Update Installation
Antimalware signature updates are released often, but Motorola collects and tests them on a weekly basis. The updates are non-intrusive (for example, no reboots or manual configuration changes are required) and automatically implemented. Therefore, antimalware signature updates will be pushed within a week of testing without Customer coordination. An email will be sent to inform the Customer that the signatures have been updated.

1.3.2 Microsoft Windows Security Update Installation
Microsoft typically releases security updates every second Tuesday of the month (aka “Patch Tuesday”); however, selected security updates are sometimes released on other days, and it is possible that no security updates are released during a month. Security updates for some 3rd party Windows software (Non-Motorola and non-Microsoft applications that run on Windows, such as Adobe Reader and Flash) are also released on Patch Tuesday. The most recent Windows and 3rd party Windows security updates available will be acquired by Motorola on each Patch Tuesday. These patch security updates require at least one week for incorporation into the offering and a minimum of 36 hours for testing in the Motorola vetting labs, after which security updates with no issues are then released. Patches may be held back at the discretion of Motorola if they are found to cause any problems to features, performance or functionality and will only be released when the issues are fully resolved.

It is important to understand that it is often the case that after security updates are installed, Microsoft requires the patched computer to be rebooted before the security updates take full effect and vulnerabilities are mitigated. The clients include dispatch consoles and there is no way for Motorola to know when it is safe to reboot. The customer must reboot at a time chosen by them so as to not impact operations.

Once the security updates are vetted, Motorola will start pushing the updates to the customer without customer coordination or notification. An email will be sent requesting that the clients be rebooted. It is the customer’s responsibility to reboot all of the clients before the next set update is sent. When preparing for the next month’s push of security updates, Motorola will first scan to verify all of the previous updates were implemented and if any computer has not been rebooted. Motorola will send an email requesting that the remaining computers be rebooted before any new updates are pushed.

1.3.3 Microsoft Windows Security Updates Outside ASTRO 25 Firewalls Connections to other networks (from now on referred to as Customer Enterprise Network, or CEN) must be delineated by firewalls. All updates deployed by Remote Security Patch Installation are specific to equipment inside the ASTRO 25 Radio Network with only the following exceptions: Key Management Facility (KMF), Text messaging Services (TMS) and advanced Messaging Services (AMS) and MCC 7100 consoles. In these exceptions, the customer has a choice of including these machines in the Remote Security Patch Installation service, or including them in their own IT security patch procedures.

The KMF, TMS, and AMS are all outside the firewall (relative to the Radio Network) and therefore updates require that the firewall be opened. The default for Remote Remote Security Patch Installation is that these functions are included.

The MCC 7100 console may be directly on the radio network or in the CEN. Any MCC 7100 on the radio network would simply be included in the standard Remote Security Patch Installation offering. However, the MCC 7100 may also be located in the CEN and connected

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through a VPN to a firewall at a dispatch location. In this case, the default for Remote Security Patch Installation is to not update these consoles.

If the customer requires inclusion for the CEN based MCC 7100 consoles, then they must contact their Customer Service Manager and make a formal request. They must also consent to allow Motorola to open the firewall to allow access for updates.

1.3.4 Quarterly Security Update Installation
The quarterly patch updates are for Solaris and Red Hat Linux (RHEL) operating systems, and VMWare ESXi hypervisor (virtualization). They are tested and released on a quarterly basis, at end of March, June, September, and December. Motorola will schedule installation of the updates with the customer in the first weeks of the following quarter. Motorola will send the customer an ITIL with details on the upgrade and scheduling for each of the events.

These updates are intrusive and require customer coordination. Examples of how they affect the customer include reboots to implement the patches and rolling (switching from one zone controller to the other) of the zone controllers. Systems with redundant zone controllers (L2, M2, M3) have low downtime (minutes) as the zone controllers are rolled, but systems with single zone controllers (L1, M1) will be down for longer periods. During these times, the system will be in “Site trunking” mode. It is up to the customer to understand the operational impacts and to coordinate these events with users.

This effort will be done during standard business hours, or 8am to 5pm CST. Customers requesting that downtime be during non-standard hours must submit an official request through their CSM. The ITIL will show work being done during standard hours such as prep work, downloading of the patches to memory, etc and the actual reboots or ZC rollover will be initiated when requested. Additional remote work will proceed the next day during standard hours.

Motorola System Enhancement Releases (“SERs”) and Field Service Bulletins (“FSB’s) are not part of this service. However in some instances, these fixes must be done to allow the latest security patches. If it is possible for the specific required FSB to be installed remotely, then Motorola will include it as part of Remote Security Patch Installation. Otherwise, Motorola will communicate this to the customer and the patches that cannot be delivered. The Customer and their CSM will determine how to get the SER or FSB installed. Once the SER or FSB appears on the system, Remote Security Patch Installation will then install the affected patches.

For minimal downtime and to avoid redundant efforts, the customer should coordinate any maintenance or other updates such as FSB’s and SER’s with Motorola.

1.4 Scope
Remote Security Patch Installation supports the currently shipping Motorola ASTRO 25 System Release (SR) and strives to support five (5) releases prior. Motorola reserves the right to adjust which releases are supported as business conditions dictate. Contact your Customer Service Manager for the latest supported releases.

Remote Security Patch Installation is available for any L or M core system in a supported release.

Remote Security Patch Installation is not available for K cores.

Systems that have non-standard configurations that have not been certified by Motorola Systems Integration and Testing (SIT) are specifically excluded from this Service unless otherwise agreed in writing by Motorola. Service does not include pre-tested intrusion detection system (IDS) updates

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for IDS solutions. Certain consoles, MOTOBRIDGE, MARVLIS, Symbol Equipment, AirDefense Equipment, AVL, Genesis, WAVE and Radio Site Security products are also excluded. Motorola will determine, in its sole discretion, the third party software that is supported as a part of this offering.

1.5 Motorola has the following responsibilities:

1.5.1 Obtain relevant third party software (“SW”) security updates as made available from the OEM’s. This includes antivirus definition updates, operating systems patches, hypervisor patches, database patches, and selected other third party patches that Motorola deployed in ASTRO 25 system releases covered by this Remote Security Patch Installation. Motorola does not control when these updates are released, but as much as possible vet the updates on this schedule:

McAfee Antivirus definitions– Weekly
Windows OS updates – Monthly
Solaris, RHEL OS, VMware ESXi updates – Quarterly

1.5.2 Each assessment of relevant third party SW will take at least one week to incorporate the security updates into the Remote Security Patch service and 36 additional hours of examination time to evaluate the impact each update has on the system.

1.5.3 Perform rigorous testing of updates to verify whether they degrade or compromise system functionality on a dedicated ASTRO 25 test system with standard supported configurations.

1.5.4 Address any issues identified during testing by working as necessary with Motorola selected commercial supplier(s) and/or Motorola product development engineering team(s).

If a solution for the identified issues cannot be found, the patch will not be posted on Motorola’s site.

1.5.5 Pre-test STIG recommended remediation when applicable.

1.5.6 Release all tested updates to Motorola’s secure extranet site.

1.5.7 Coordinate updates with customer as outlined in section 1.

1.5.8 In the event that no updates are released by the OEM’s during the usual time period, Motorola will send a notice that no new patches were sent.

1.5.9 Notify customer of update releases by email.

1.5.10 A supported Remote Security Patch Installation ASTRO 25 release matrix will be kept on the extranet site for reference.

1.6 The Customer has the following responsibilities:

1.6.1 This service requires connectivity from Motorola to the customer’s ASTRO 25 system. This connectivity must be established prior to service start.

1.6.2 Maintain IP connectivity from Motorola to all elements in the system that require remote patching.

1.6.3 Provide Motorola with pre-defined information (customer contacts, system information, etc) prior to contract start date necessary to complete a Customer Support Plan (CSP).

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1.6.4 Submit changes in any information supplied in the Customer Support Plan (CSP) to the Customer Support Manager (CSM).

1.6.5 Upgrade system to a supported system release as necessary to continue service.

1.6.6 Refrain from making uncertified changes of any type to the system.

1.6.7 Adhere closely to the System Support Center (SSC) troubleshooting guidelines provided upon system acquisition. A failure to follow SSC guidelines may cause the customer and Motorola unnecessary or overly burdensome remediation efforts. In such case, Motorola reserves the right to charge an additional service fee for the remediation effort.

1.6.8 Comply with the terms of the applicable software license agreement(s) between the Customer and Motorola and non-Motorola software copyright owner.

1.6.9. Obtain at Customer’s cost all third party consents or licenses required to enable Motorola to provide the Service.

1.6.10 Upon successful installation of patches on windows clients (e.g. Dispatch Ops Position, NM Client, etc.) and receiving notification indicating the task has been successfully executed by Motorola, affected computers must be rebooted by the customer within 72 hours.

1.6.11 Understand downtime implications associated with reboots and patch activities and internally coordinate with users as necessary.

1.7 Disclaimer:

Motorola disclaims any and all warranties with respect to pre-tested antivirus definitions, database security updates, hypervisor patches, operating system software patches, intrusion detection sensor signature files, or other 3rd party files, express or implied. Further, Motorola disclaims any warranty concerning the non-Motorola software and does not guarantee that customer’s system will be error-free or immune to security breaches as a result of these services.

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Appendix E: OnSite Support Statement of Work
Motorola‘s OnSite Support service provides case management and escalation for onsite technical service requests. The service is delivered by the Motorola’s Solutions Support Center (SSC) in conjunction with a local service provider. The SSC is responsible for opening a case for onsite support and monitoring the status of that case to maintain response time conformance.

1.0 Description of Services
The Motorola SSC will receive customer request for OnSite service provider and dispatch a servicer. The servicer will respond to the customer location based on pre-defined Severity Levels set forth in Severity Level Definitions table and Response times set forth in Severity Level Response Time Goals table in order to restore the system.

Motorola will provide case management as set forth herein. The SSC will maintain contact with the on-site Motorola Service Shop until system restoral and case closure. The SSC will continuously track and manage cases from creation to close through an automated case tracking process.

1.1 Scope
OnSite Support is available 24 hours a day, 7 days a week in accordance with Severity Level Definitions and Severity Level Response Time Goals tables.

1.2 Inclusions
Onsite Support can be delivered on Motorola-sold infrastructure.

2.0 Motorola has the following responsibilities:

2.1. Receive service requests.

2.2. Create a case as necessary when service requests are received. Gather information to characterize the issue, determine a plan of action and assign and track the case to resolution.

2.3. Dispatch a field servicer (“Servicer”) as required by Motorola’s standard procedures and provide necessary case information.

2.4. Provide the required personnel access to relevant customer information as needed.

2.5. Servicer will perform the following on-site:

2.6. Run diagnostics on the Infrastructure or Field Replacement Units (FRU).

2.7. Replace defective Infrastructure or FRU, as supplied by customer.

2.8. Provide materials, tools, documentation, physical planning manuals, diagnostic/test equipment and any other requirements necessary to perform the maintenance service.

2.9. If a third party vendor is needed to restore the system, the Servicer may accompany that vendor onto the customer’s premises.

2.10. Verify with customer that restoration is complete or system is functional, if required by customer’s repair verification in the Customer Support Plan. If verification by customer cannot be completed within 20 minutes of restoration, the case will be closed and the Servicer will be released. 211. Escalate the case to the appropriate party upon expiration of a response time.

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2.12. Close the case upon receiving notification from customer or servicer, indicating the case is resolved.

2.13. Notify customer of case status as defined by the Customer Support Plan:

2.13.1 Open and closed; or

2.13.2 Open, assigned to the servicer, arrival of the servicer on-site, deferred or delayed, closed.

2.14. Provide Case activity reports to customer if requested.

3.0 Customer has the following responsibilities:

3.1. Contact Motorola, as necessary, to request service.

3.2. Provide Motorola with the following pre-defined customer information and preferences prior to start date necessary to complete Customer Support Plan (CSP):

3.2.1. Case notification preferences and procedure.

3.2.2. Repair verification preference and procedure.

3.2.3. Database and escalation procedure forms.

3.2.4. Submit changes in any information supplied in the CSP to the Customer Support Manager (CSM).

3.3. Provide the following information when initiating a service request:

3.3.1. Assigned system ID number.

3.3.2. Problem description and site location.

3.3.3. Other pertinent information requested by Motorola to open a case.

3.4. Allow Servicers access to equipment.

3.5. Supply infrastructure or FRU, as applicable, in order for Motorola to restore the system.

3.6. Maintain and store in an easily accessible location any and all software needed to restore the system.

3.7. Maintain and store in an easily accessible location proper system backups.

3.8 For E911 systems, test the secondary/backup Public Safety Answering Point (PSAP) connection to be prepared in the event of a catastrophic failure of a system. Train appropriate personnel on the procedures to perform the function of switching to the backup PSAP.

3.9 Verify with the SSC that restoration is complete or system is functional, if required by repair verification preference provided by customer.

3.10. Cooperate with Motorola and perform all acts that are reasonable or necessary to enable Motorola to provide these services.

3.11. Obtain and provide applicable third party consents or licenses at Customer cost to enable Motorola to provide the Services.

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4.0 Severity Level Definitions
The following severity level definitions will be used to determine the maximum response times:

Severity Level
Severity Definition
Severity 1 This is defined as a failure that causes the system and/or infrastructure a loss of voice functionality and no work-around or immediate solution is available.

The following are examples of this kind of severity:
● 33% of call processing resourcesimpaired
● Site Environment alarms:
o Smoke
o Unauthorized access
o Temperature
o Power failure
Severity 2 This is defined as a fault that causes the system to operate with a continuous reduction in capacity or functionality of core services (core services are voice, data or network management).

The following are examples of this kind of severity:
● Less than 33% of call processing resourcesimpaired
● Failure of a single redundantcomponent
Severity 3 This is defined as a fault which reduces the functionality, efficiency or usability of core services (voice, data and network management) and there is a viable work-around in place.

The following are examples of this kind of severity:
● Intermittent faults that are infrequent and minor impact tocore services
● Statistical reportingproblems
Severity 4 This is defined as a minor issue, which has little or no impact on the functionality, efficiency or usability of core services. The following are examples of this kind of severity:
● Faults resulting in minor functions or features being unsupported or unreliable in ways that are not noticeable to theuser.
● Faults that have no impact in how the user perceives the systemto work.
● Cosmetic issues.
● Requests forinformation.
● Preventive Maintenance

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5.0 Severity Level Response Time Goals
(Customer’s Response Time Classification is designated in the Customer Support Plan.) Severity Level Standard Response Time
Severity 1* Within 4 hours from receipt of notification continuously Severity 2 Within 4 hours from receipt of notification
Standard Business Day
Severity 3 Within 8 hours from receipt of notification
Standard Business Day
Severity 4 Within 12 hours from receipt of notification Standard Business Day
* Premier Response is an option that can be purchased, it provides a 2-hour response time for severity 1 issues.

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Appendix F: Annual Preventive Maintenance Statement of Work The terms and conditions of this Statement of Work (SOW) are an integral part of Motorola's Service Agreement or other applicable agreement to which it is attached and made a part thereof by this reference.

Annual Preventative Maintenance will provide an annual operational test and alignment, on the customer’s infrastructure equipment (Infrastructure or Fixed Network Equipment or “FNE”) to monitor the Infrastructure’s conformance to specifications, as set forth in the applicable attached Exhibit(s), all of which are hereby incorporated by this reference.

1.1 Scope
Annual Preventive Maintenance will be performed during standard business hours (unless otherwise agreed to in writing). If the system or Customer requirements dictate this service must occur outside of standard business hours, Motorola will provide an additional quotation. Customer is responsible for any charges associated with unusual access requirements or expenses.

1.2 Inclusions
Annual Preventive Maintenance service will be delivered on Motorola sold infrastructure including integrated third party products per the level of service as defined in Table 1: PM Tasks Performed.

1.3 Limitations and Exclusions
Unless specifically described in Table 1, the following activities are outside the scope of the Annual Preventive Maintenance service, but are optional services that are available to Annual Preventive Maintenance customers at an additional cost:

1.3.1. Emergency on-site visits required to resolve technical issues.

1.3.2. Third party support for equipment not sold by Motorola as part of the original system.

1.3.3. System installations, upgrades, and expansions.

1.3.4. Customer training.

1.3.5. Hardware repair and/or exchange.

1.3.6. Network security services.

1.3.7. Network transport.

1.3.8. Information Assurance.

1.3.9. Motorola services not included in this statement of work.

1.3.10. Any maintenance required as a result of a virus or unwanted intrusion is excluded if the system is not protected against these security threats by Motorola’s Pre-tested Security Update Service when applicable.

1.3.11. Tower mapping analysis or tower structure analysis

1.4 Motorola has the following responsibilities:

1.4.1 Notify the customer of any planned system downtime needed to perform this Service.

1.4.2 Advise customer of any issue that requires immediate attention.

1.4.3 Maintain communication with the customer as needed until completion (“resolution” implies a problem is being fixed) of the Annual Preventive Maintenance.

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1.4.4 Determine, in its sole discretion, when a case requires more than the Preventive Maintenance services described in this SOW and notify customer of an alternative course of action.

1.4.5 Provide customer with a report documenting system performance against expected parameters along with recommended actions. Time allotment TBD.

1.4.6 Provide trained and qualified personnel with proper security clearance required to complete Annual Preventive Maintenance service.

1.5 The Customer has the following responsibilities:

1.5.1 Provide preferred schedule for Annual Preventative Maintenance to Motorola.

1.5.2 Authorize and acknowledge any scheduled system downtime.

1.5.3 Maintain periodic backup of databases, software applications, and firmware.

1.5.4 Establish and maintain a suitable environment (heat, light, and power) for the equipment location and provide Motorola full, free, and safe access to the equipment so that Motorola may provide services. All sites shall be accessible by standard service vehicles.

1.5.5 Submit changes in any information supplied in the Customer Support Plan (CSP) to the Customer Support Manager (CSM).

1.5.6 Provide site escorts in a timely manner if required.

1.5.7 Provide Motorola with requirements necessary for access to secure facilities.

1.5.8 Obtain at Customer’s cost all third party consents or licenses required to enable Motorola to provide the Service.

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Table 1: PM Tasks Performed

MASTER SITE CHECKLIST

SERVERS
Equipment Alarms Check LED and/or other status indicators for fault conditions.

Capture Diags
Perform recommended diagnostic tests based on server type.

Capture available diagnostic logs.

NM Client Applications
Review UEM events and transport medium types,
(microwave/leased line/telco, etc). Event log review for persistent types. Verify all NM client applications are operating correctly.

Verify System SW CD's
Perform audit of software media on site. Versions, KC numbers, types, etc.

Complete Backup
Verify backups have been done or scheduled. SZ database (BAR), Centracom CDM/ADM database, etc.

ROUTERS
Equipment Alarms Check LED and/or other status indicators for fault conditions.

SWITCHES
Equipment Alarms Check LED and/or other status indicators for fault conditions.

Capture Diags
Perform recommended diagnostic tests based on switch type.

Capture available diagnostic logs.

Verify Redundant
Switches
Test redundancy in CWR devices. Core router switchover
(coordinate with customer).

DOMAIN CONTROLLERS
Equipment Alarms Check LED and/or other status indicators for fault conditions.

Capture Diags
Perform recommended diagnostic tests based on server type.

Capture available diagnostic logs.

Verify System SW CD's
Perform audit of software media on site. Versions, KC numbers, types, etc.

FIREWALLS
Equipment Alarms Check LED and/or other status indicators for fault conditions.

Capture Diags
Perform recommended diagnostic tests based on server type.

Capture available diagnostic logs.

LOGGING EQUIPMENT
Equipment Alarms Check LED and/or other status indicators for fault conditions.

Capture Diags
Perform recommended diagnostic tests based on server type.

Capture available diagnostic logs.

Server CPU Health i.e. memory, HDD, CPU, disk space/utilization.

MISCELLANEOUS EQUIPMENT

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Equipment Alarms Check LED and/or other status indicators for fault conditions.

Capture Diags
Perform recommended diagnostic tests based on server type.

Capture available diagnostic logs.

Server CPU Health i.e. memory, HDD, CPU, disk space/utilization.

PRIME SITE CHECKLIST

SOFTWARE
Verify System SW CD's
Perform audit of software media on site. Versions, KC numbers, types, etc.

SWITCHES
Equipment Alarms Check LED and/or other status indicators for fault conditions.

Capture Diags
Perform recommended diagnostic tests based on switch type.

Capture available diagnostic logs.

MISCELLANEOUS EQUIPMENT
Equipment Alarms Check LED and/or other status indicators for fault conditions.

Capture Diags
Perform recommended diagnostic tests based on server type.

Capture available diagnostic logs.

Site Frequency Standard
Check Check lights and indicators for A/B receivers.

COMPARATORS
Equipment Alarms Verify no warning/alarm indicators.

Clean Fans and
Equipment Use antistatic vacuum to clean cooling pathways

DISPATCH SITE CHECKLIST

GENERAL
Inspect all Cables Inspect all cables/connections to external interfaces are secure Mouse and Keyboard Verify operation of mouse and keyboard Configuration File
Verify each operator position has access to required
configuration files

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Console Op Time Verify console op time is consistant across all ops Screensaver Verify screensaver set as customer prefers
Screen Performance Verify screen operational/performance Touchscreen Verify touchscreen operation (if applicable) Cabling/Lights/Fans Visual inspection of all equipment - cabling/ lights/ fans Filters/Fans/Dust Clean any filters/ fans/ dust- all equipment Monitor and Hard Drive Confirm monitor and hard drive do not "sleep" DVD/CD Verify / clean DVD or CD drive

HEADSET UNPLUGGED TESTING
Speakers
Test all speakers - audio quality, volume, static, drop-outs, excess hiss when turned up.

Channel Audio in
Speaker Verify selected channel audio in select speaker only.

Footswitch Pedals Verify both footswitch pedals operational Radio On-Air Light Verify radio on air light comes on with TX (if applicable) Radio TX and RX
Verify radio TX/RX from both headset jacks. Verify levels OK.

Check volume controls for noise/static or drop-outs.

Speaker Mute Verify select speaker muted.

Telephone Operation
Verify telephone operational through both headset jacks. Check volume controls for noise/static or drop-outs.

Audio Switches
Verify select audio switches to speaker when phone off-hook. (if interfaced to phones)
Radio Takeover in
Headset
Verify radio-takeover in headset mic when phone off-hook (mic switches to radio during PTT and mutes to phone).

OTHER TESTS
Phone Status Light
Verify phone status light comes on when phone off-hook (if applicable)
Desk Microphone
Operation Confirm desk mic operation (if applicable)
Radio IRR Operation Verify radio IRR operational (if applicable) Telephone IRR
Operation
Verify telephone [if on radio computer] IRR operational (if applicable)
Recording
Verify operator position being recorded on long term logging recorder (if applicable)

COMPUTER PERFORMANCE TESTING
Computer Reboot Reboot op position computer
Computer Operational Confirm client computer is fully operational (if applicable)

AUDIO TESTING

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Audio Levels and
Quality
Confirm all conventional resources are functional with adequate audio levels and quality
Secure Mode Confirm any secure talkgroups are operational in secure mode

EQUIPMENT ROOM TESTS
Recording - AIS Test Verify audio logging of trunked calls Recording
Test op position logging on analog recorder (with customer assistance)
System Alarms Review alarm system on all equipment for errors Verify System SW CD's
Perform audit of software media on site. Versions, KC numbers, types, etc.

RF SITE CHECKLIST
Equipment Alarms Verify no warning/alarm indicators.

Clean Fans and
Equipment Use antistatic vacuum to clean cooling pathways Site Frequency Standard
Check Check lights and indicators for A/B receivers.

Basic Voice Call Check Voice test each voice path, radio to radio.

Control Channel
Redundancy (trunking) Roll control channel, test, and roll back.

Site Controller
Redundancy (trunking) Roll site controllers with no dropped audio.

GTR 8000 Results Sheet
Complete GTR tests - Frequency Error, Modulation Fidelity, Forward at Set Power, Reverse at Set Power, Gen Level Desense no Tx.

MOSCAD CHECKLIST

MOSCAD SERVER
Equipment Alarms Verify no warning/alarm indicators.

Check Alarm/Event
History
Review MOSCAD alarm and events to find if there are chronic issues.

Windows Event Logs Review Windows event logs. Save and clear if full.

Password Verification
Site devices to verify passwords. Document changes if any found.

Verify System SW CD's
Perform audit of software media on site. Versions, KC numbers, types, etc.

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MOSCAD CLIENT
Equipment Alarms Verify no warning/alarm indicators.

Check Alarm / Event
History
Review MOSCAD alarm and events to find if there are chronic issues.

Windows Event Logs Review Windows event logs. Save and clear if full.

Password Verification
Site devices to verify passwords. Document changes if any found.

Verify System SW CD's
Perform audit of software media on site. Versions, KC numbers, types, etc.

MOSCAD RTU's
Equipment Alarms Verify no warning/alarm indicators.

Verify Connectivity Verify Connectivity

FACILITIES CHECKLIST

VISUAL INSPECTION EXTERIOR
ASR Sign Verify that the ASR sign is posted.

Warning Sign - Tower Verify warning sign is posted on the tower.

Warning Sign - Gate
Verify that a warning sign is posted at the compound gate entrance.
10 Rule Sign
Verify that a 10 rules sign is posted on the inside of the shelter door.

Outdoor Lighting Verify operation of outdoor lighting/photocell.

Exterior of Building Check exterior of building for damage/disrepair.

Fences / Gates Check fences/gates for damage/disrepair.

Landscape / Access
Road Check landscape/access road for accessibility.

VISUAL INSPECTION INTERIOR
Electrical Surge
Protectors Check electrical surge protectors for alarms.

Emergency Lighting Verify emergency lighting operation.

Indoor Lighting Verify indoor lighting.

Equipment Inspection
Visually inspect that all hardware (equipment, cables,panels, batteries, racks, etc.) are in acceptable physical condition for normal operation.

Site Frequency
Standard Check Check lights and indicators for A/B receivers.

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Regulatory Compliance
(License, ERP, Freqency,
Deviation) Check station for regulatory compliance. Update station logs.

Clean Fans and
Equipment Use antistatic vacuum to clean cooling pathways UPS
Visual inspection
(condition, cabling) Verify corrosion, physical connections, dirt/dust, etc.

GENERATOR
Visual Inspection
Verify, check panel housing, cracks, rust and whethering.

Physical connections, corrosion, dirt/dust, etc.

Fuel
Verify fuel levels in back up generators, document date of last fuel delivered from fuel service provider.

Oil Check the oil dipstick for proper level. Note condition of oil.

Verify operation (no
switchover)
Check, verify running of generator, ease of start or difficult. Is generator "throttling" or running smooth? Any loud unusual noise? Etc.

HVAC
Air Filter Check air filter and recommend replacement if required.

Coils Check coils for dirt
Outdoor Unit Check that outdoor unit is unobstructed
Wiring Wiring (insect/rodent damage)
Cooling / Heating Check each HVAC unit for cooling/heating

MICROWAVE CHECKLIST
RADIO
Alarms Check alarm / event history
Software Verify version of application
TX Frequency Verify transmit frequency
TX Power Verify transmit power
RX Frequency Verify receive frequency
RX Signal Level
Verify receive signal level and compare with install baseline documentation
Save configuration Save current configuration for off site storage Backhaul Validation
Monitor UEM status (alarms, logs, etc.) for all links. If UEM not used to monitor microwave, then use provided microwave alarm mgmt server.

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WAVEGUIDE
Visual Inspection Inspect for wear or dents (from ground using binoculars).

Connection Verification
Verify all connections are secured with proper hardware (from ground using binoculars).

DEHYDRATOR
Visual Inspection Inspect moisture window for proper color Pressure Verification Verify pressure of all lines
Re-Pressurization Bleed lines temporarily to verify the dehydrator re-pressurizes Run Hours Record number of hours ran

TOWER CHECKLIST

STRUCTURE CONDITION
Rust Check structure for rust.

Cross Members Check for damaged or missing cross members.

Safety Climb Check safety climb for damage.

Ladder Verify that ladder system is secured to tower.

Welds Check for cracks or damaged welds.

Outdoor
lighting/photocell Test outdoor lighting and photocell.

Drainage Holes Check that drainage holes are clear of debris.

Paint Check paint condition.

TOWER LIGHTING
Lights/Markers Verify all lights/markers are operational.

Day/Night Mode Verify day and night mode operation.

Power Cabling Verify that power cables are secured to tower.

ANTENNAS AND LINES
Antennas
Visually inspect antennas for physical damage (from ground using binoculars).

Transmission Lines Verify that all transmission lines are secure on the tower.

GROUNDING
Structure Grounds Inspect grounding for damage or corrosion

GUY WIRES
Tower Guys Check guy wires for fraying and tension.

Guy Wire Hardware Check hardware for rust.

CONCRETE CONDITION
Tower Base Check for chips or cracks.

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Appendix G: Service From the Start (SFS)- LITE

1.1 Description
Service From the Start-LITE provides board level service for the Equipment that is specifically named in the applicable agreement to which this Statement of Work (SOW) is attached or any of the agreement’s subsequent revisions. Services are performed at the Radio Support Center (RSC), or Federal Technical Support Center.

In addition to Equipment specifically named in the applicable agreement to which this Statement of Work is attached, Service From the Start LITE includes service on single mobile control heads provided that they are required for normal operation of the Equipment and are included at the point of manufacture.

Service From the Start LITE excludes repairs to: optional accessories; standard mobile palm microphones; non- standard mobile microphones; iDEN accessories; iDEN mobile microphones; portable remote speaker microphones; optional or additional control heads; mobile external speakers; single and multiple unit portable chargers; batteries; mobile power and antenna cables; mobile antennas; portable antennas, and power supplies. Engraving service is not covered under standard Service From the Start LITE. This service does not cover defects, malfunctions, performance failures or damage to the unit resulting from physical, liquid, or chemical damage. An estimate for non-covered repairs will be provided for units displaying extensive damage.

Service From the Start LITE is non-cancelable and non-refundable. If Equipment is added to the agreement subsequent to the Start Date, these units are also non-cancelable and non-refundable for the agreement duration. All added Equipment must be in “good working order” on the Start Date or when additional Equipment is added to the agreement. To ensure “good working order”, added equipment will incur a time and material (T&M) repair fee if a repair is requested on that equipment within 30 days after being added to the agreement.

Equipment may only be added to the agreement, via a customer signed or emailed Motorola Inventory Adjustment Form (IAF). Complete and accurate serial numbers and model descriptions must be supplied or the added unit will not be included under the agreement and will incur a T&M repair fee.

All inventory adjustment requests for add-on subscriber units received prior to the 15th of the month will be effective the 1st of the following month. Equipment add-on requests received after the 15th of the month will be effective the 1st of the next succeeding month.

Equipment deletions from the agreement may only be deleted under the following limited conditions:
a) Equipment was stolen and proof of theft is provided to Motorola; or b) Motorola determines Equipment is damaged beyond repair; or c) Motorola determines Equipment is no longer supportable or is obsolete; or d) Equipment had already been under a previous contract for at least the twelve month requirement.

Equipment deletions, where applicable, will be effective at the end of the month in which the request was received.

The terms and conditions of this Statement of Work are an integral part of the Motorola Service Agreement or other applicable agreement to which it is attached and made a part thereof by this reference. If there are any inconsistencies between the provisions of the Motorola Service Agreement or

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other applicable agreement and this Statement of Work, the provisions of this Statement of Work shall prevail.

2.1 Motorola has the following responsibilities:

2.2 Test and Restore the Equipment to Motorola factory specifications, including Factory Mutual (FM), and Mine Hazard Safety Association (MHSA).

2.3 Reprogram Equipment to original operating parameters based on the Customer template, if retrievable, or from a Customer supplied backup. If the Customer template or code plug is not usable, a generic template or code plug utilizing the latest Radio Service Software (RSS) or Customer Programming Software (CPS) version for that Equipment will be used. The Equipment will require additional programming by the Customer to Restore the original template. All Firmware is upgraded to the latest release for each individual product line.

2.4 Clean external housing of the Equipment. External components of unit will only be replaced when functionality has been diminished.

2.5 Pay the outbound freight charges. Motorola will pay the inbound freight charges if the Customer uses the Motorola designated delivery service.

2.6 Provide the Motorola repair request and Inventory Adjustment Form (IAF) via Motorola On Line (MOL).

2.7 Process inventory adjustment requests received by email or fax from Customer. If the request is received by email, Motorola will email an acknowledgement to the sender.

2.8 Perform covered services as requested by Customer on the Motorola repair request form.

2.9 If applicable, notify Customer of changes in Motorola designated inventory adjustment email address or fax number.

3.1 Customer has the following Responsibilities:

3.2 Supply Motorola complete and accurate serial numbers and model description.

3.3 Utilize the Motorola designated delivery service program to obtain Motorola payment for inbound shipping

3.4 Access the Motorola repair request form and Inventory Adjustment Form (IAF) through Motorola On Line (MOL).

3.5 Initiate service request via Motorola On Line (MOL) or complete a Motorola repair request form with contract number referenced, and submit with each unit of Equipment sent in for service. Mobile control heads or accessory items sent in must reference the serial number of the main unit.

3.6 If desired, supply Motorola with a Software template or programming in order to assist in returning the Equipment to original operating parameters. This step must be completed for Equipment that will not power up. If applicable, record the current flashcode for each radio.

3.7 If Motorola must utilize a generic template or code plug to Restore Equipment to operating condition, Customer is responsible for any programming required to Restore Equipment to desired parameters.

3.8 Provide a signed or emailed Motorola Inventory Adjustment Form (IAF) for all Equipment additions.

3.9 Local services or annual maintenance required for maintaining normal operation of the equipment, unless specified on the service agreement.

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Appendix H: Infrastructure Pricing
NOTE: All pricing for services is based upon the ICI-System staying on a current standard support ASTRO release.

Appendix I: Subscriber Pricing (SFS Lite)

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Appendix J: Terms and Conditions
Motorola Solutions Inc. ("Motorola") and the customer named in this Agreement ("Customer") hereby agree as follows:

Section 1. APPLICABILITY
These Maintenance Service Terms and Conditions apply to service contracts whereby Motorola will provide to Customer either (1) maintenance, support, or other services under a Motorola Service Agreement, or (2) installation services under a Motorola Installation Agreement.

Section 2. DEFINITIONS AND INTERPRETATION

2.1. “Agreement” means these Maintenance Service Terms and Conditions; the cover page for the Service Agreement or the Installation Agreement, as applicable; and any other attachments, all of which are incorporated herein by this reference.

In interpreting this Agreement and resolving any ambiguities, these Maintenance Service Terms and Conditions take precedence over any cover page, and the cover page takes precedence over any attachments, unless the cover page or attachment states otherwise.

2.2. “Equipment” means the equipment that is specified in the attachments or is subsequently added to this Agreement.

2.3. “Services” means those installation, maintenance, support, training, and other services described in this Agreement.

Section 3. ACCEPTANCE
Customer accepts these Maintenance Service Terms and Conditions and agrees to pay the prices set forth in the Agreement. This Agreement becomes binding only when accepted in writing by Motorola. The term of this Agreement begins on the “Start Date” indicated in this Agreement.

Section 4. SCOPE OF SERVICES

4.1. Motorola will provide the Services described in this Agreement or in a more detailed statement of work or other document attached to this Agreement. At Customer’s request, Motorola may also provide additional services at Motorola’s then-applicable rates for the services.

4.2. If Motorola is providing Services for Equipment, Motorola parts or parts of equal quality will be used; the Equipment will be serviced at levels set forth in the manufacturer’s product manuals; and routine service procedures that are prescribed by Motorola will be followed.

4.3. If Customer purchases from Motorola additional equipment that becomes part of the same system as the initial Equipment, the additional equipment may be added to this Agreement and will be billed at the applicable rates after the warranty for that additional equipment expires.

4.4. All Equipment must be in good working order on the Start Date or when additional equipment is added to the Agreement. Upon reasonable request by Motorola, Customer will provide a complete serial and model number list of the Equipment. Customer must promptly notify Motorola in writing when any Equipment is lost, damaged, stolen or taken out of service. Customer’s obligation to pay Service fees for this Equipment will terminate at the end of the month in which Motorola receives the written notice.

4.5. Customer must specifically identify any Equipment that is labeled intrinsically safe for use in hazardous environments.

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4.6. If Equipment cannot, in Motorola’s reasonable opinion, be properly or economically serviced for any reason, Motorola may modify the scope of Services related to that Equipment; remove that Equipment from the Agreement; or increase the price to Service that Equipment.

4.7. Customer must promptly notify Motorola of any Equipment failure. Motorola will respond to Customer's notification in a manner consistent with the level of Service purchased as indicated in this Agreement.

Section 5. EXCLUDED SERVICES

5.1. Service excludes the repair or replacement of Equipment that has become defective or damaged from use in other than the normal, customary, intended, and authorized manner; use not in compliance with applicable industry standards; excessive wear and tear; or accident, liquids, power surges, neglect, acts of God or other force majeure events.

5.2. Unless specifically included in this Agreement, Service excludes items that are consumed in the normal operation of the Equipment, such as batteries or magnetic tapes.; upgrading or reprogramming Equipment; accessories, belt clips, battery chargers, custom or special products, modified units, or software; and repair or maintenance of any transmission line, antenna, microwave equipment, tower or tower lighting, duplexer, combiner, or multicoupler. Motorola has no obligations for any transmission medium, such as telephone lines, computer networks, the internet or the worldwide web, or for Equipment malfunction caused by the transmission medium.

Section 6. TIME AND PLACE OF SERVICE
Service will be provided at the location specified in this Agreement. When Motorola performs service at Customer’s location, Customer will provide Motorola, at no charge, a non-hazardous work environment with adequate shelter, heat, light, and power and with full and free access to the Equipment. Waivers of liability from Motorola or its subcontractors will not be imposed as a site access requirement. Customer will provide all information pertaining to the hardware and software elements of any system with which the Equipment is interfacing so that Motorola may perform its Services. Unless otherwise stated in this Agreement, the hours of Service will be 8:30 a.m. to 4:30 p.m., local time, excluding weekends and holidays. Unless otherwise stated in this Agreement, the price for the Services exclude any charges or expenses associated with helicopter or other unusual access requirements; if these charges or expenses are reasonably incurred by Motorola in rendering the Services, Customer agrees to reimburse Motorola for those charges and expenses.

Section 7. CUSTOMER CONTACT
Customer will provide Motorola with designated points of contact (list of names and phone numbers) that will be available twenty-four (24) hours per day, seven (7) days per week, and an escalation procedure to enable Customer’s personnel to maintain contact, as needed, with Motorola.

Section 8. INVOICING AND PAYMENT

8.1 Customer affirms that a purchase order or notice to proceed is not required for the duration of this service contract and will appropriate funds each year through the contract end date. Unless alternative payment terms are stated in this Agreement, Motorola will invoice Customer in advance for each payment period. All other charges will be billed monthly, and Customer must pay each invoice in U.S. dollars within twenty (20) days of the invoice date.

8.2 Customer will reimburse Motorola for all property taxes, sales and use taxes, excise taxes, and other taxes or assessments that are levied as a result of Services rendered under this Agreement (except income, profit, and franchise taxes of Motorola) by any governmental entity. The Customer will pay all invoices as received from Motorola. At the time of execution of this Agreement, the Customer will provide all necessary reference information to include on invoices for payment in accordance with this Agreement.

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8.3 At the end of the first year of the Agreement and each year thereafter, a CPI percentage change calculation shall be performed. Should the annual inflation rate increase greater than 5% during the previous year, Motorola shall have the right to increase all future maintenance prices by the CPI increase amount exceeding 5%. The Midwest Region Consumer Price Index (http://www.bls.gov/ro5/cpimid.htm), All items, Not seasonally adjusted shall be used as the measure of CPI for this price adjustment. Measurement will take place once the annual average for the new year has been posted by the Bureau of Labor Statistics
Section 9. WARRANTY
Motorola warrants that its Services under this Agreement will be free of defects in materials and workmanship for a period of ninety (90) days from the date the performance of the Services are completed. In the event of a breach of this warranty, Customer’s sole remedy is to require Motorola to re-perform the non-conforming Service or to refund, on a pro-rata basis, the fees paid for the non-conforming Service. MOTOROLA DISCLAIMS

ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

Section 10. DEFAULT/TERMINATION

10.1. If either party defaults in the performance of this Agreement, the other party will give to the non-performing party a written and detailed notice of the default. The non-performing party will have thirty (30) days thereafter to provide a written plan to cure the default that is acceptable to the other party and begin implementing the cure plan immediately after plan approval. If the non-performing party fails to provide or implement the cure plan, then the injured party, in addition to any other rights available to it under law, may immediately terminate this Agreement effective upon giving a written notice of termination to the defaulting party.

10.2. Any termination of this Agreement will not relieve either party of obligations previously incurred pursuant to this Agreement, including payments which may be due and owing at the time of termination. All sums owed by Customer to Motorola will become due and payable immediately upon termination of this Agreement. Upon the effective date of termination, Motorola will have no further obligation to provide Services.

10.3 If the Customer terminates this Agreement before the end of the Term, for any reason other than Motorola default, then the Customer will pay to Motorola an early termination fee equal to the discount applied to the last three (3) years of Service payments for the original Term.

Section 11. LIMITATION OF LIABILITY
Except for personal injury or death, Motorola's total liability, whether for breach of contract, warranty, negligence, strict liability in tort, or otherwise, will be limited to the direct damages recoverable under law, but not to exceed the price of twelve
(12) months of Service provided under this Agreement. ALTHOUGH THE PARTIES ACKNOWLEDGE THE POSSIBILITY OF SUCH LOSSES OR DAMAGES, THEY AGREE THAT MOTOROLA WILL NOT BE LIABLE FOR ANY COMMERCIAL LOSS; INCONVENIENCE; LOSS OF USE, TIME, DATA, GOOD WILL, REVENUES, PROFITS OR SAVINGS; OR OTHER SPECIAL,

INCIDENTAL, INDIRECT, OR CONSEQUENTIAL DAMAGES IN ANY WAY RELATED TO OR ARISING FROM THIS AGREEMENT OR THE PERFORMANCE OF SERVICES BY MOTOROLA PURSUANT TO THIS AGREEMENT. No action for contract breach or otherwise relating to the transactions contemplated by this Agreement may be brought more than one (1) year after the accrual of the cause of action, except for money due upon an open account. This limitation of liability will survive the expiration or termination of this Agreement and applies notwithstanding any contrary provision.

Section 12. EXCLUSIVE TERMS AND CONDITIONS

12.1. This Agreement supersedes all prior and concurrent agreements and understandings between the parties, whether written or oral, related to the Services, and there are no agreements or representations concerning the subject matter of this Agreement except for those expressed herein. The Agreement may not be amended or modified except by a written

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agreement signed by authorized representatives of both parties.

12.2. Customer agrees to reference this Agreement on any purchase order issued in furtherance of this Agreement, however, an omission of the reference to this Agreement will not affect its applicability. In no event will either party be bound by any terms contained in a Customer purchase order, acknowledgement, or other writings unless: the purchase order, acknowledgement, or other writing specifically refers to this Agreement; clearly indicate the intention of both parties to override and modify this Agreement; and the purchase order, acknowledgement, or other writing is signed by authorized representatives of both parties.

Section 13. PROPRIETARY INFORMATION; CONFIDENTIALITY; INTELLECTUAL PROPERTY RIGHTS

13.1. Any information or data in the form of specifications, drawings, reprints, technical information or otherwise furnished to Customer under this Agreement will remain Motorola’s property, will be deemed proprietary, will be kept confidential, and will be promptly returned at Motorola's request. Customer may not disclose, without Motorola's written permission or as required by law, any confidential information or data to any person, or use confidential information or data for any purpose other than performing its obligations under this Agreement. The obligations set forth in this Section survive the expiration or termination of this Agreement.

13.2. Unless otherwise agreed in writing, no commercial or technical information disclosed in any manner or at any time by Customer to Motorola will be deemed secret or confidential. Motorola will have no obligation to provide Customer with access to its confidential and proprietary information, including cost and pricing data.

13.3. This Agreement does not grant directly or by implication, estoppel, or otherwise, any ownership right or license under any Motorola patent, copyright, trade secret, or other intellectual property, including any intellectual property created as a result of or related to the Equipment sold or Services performed under this Agreement.

Section 14. FCC LICENSES AND OTHER AUTHORIZATIONS
Customer is solely responsible for obtaining licenses or other authorizations required by the Federal Communications Commission or any other federal, state, or local government agency and for complying with all rules and regulations required by governmental agencies. Neither Motorola nor any of its employees is an agent or representative of Customer in any governmental matters.

Section 15. COVENANT NOT TO EMPLOY
During the term of this Agreement and continuing for a period of two (2) years thereafter, Customer will not hire, engage on contract, solicit the employment of, or recommend employment to any third party of any employee of Motorola or its subcontractors without the prior written authorization of Motorola. This provision applies only to those employees of Motorola or its subcontractors who are responsible for rendering services under this Agreement. If this provision is found to be overly broad under applicable law, it will be modified as necessary to conform to applicable law.

Section 16. MATERIALS, TOOLS AND EQUIPMENT
All tools, equipment, dies, gauges, models, drawings or other materials paid for or furnished by Motorola for the purpose of this Agreement will be and remain the sole property of Motorola. Customer will safeguard all such property while it is in Customer’s custody or control, be liable for any loss or damage to this property, and return it to Motorola upon request. This property will be held by Customer for Motorola’s use without charge and may be removed from Customer’s premises by Motorola at any time without restriction.

Section 17. GENERAL TERMS

17.1. If any court renders any portion of this Agreement unenforceable, the remaining terms will continue in full force and effect.

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17.2. This Agreement and the rights and duties of the parties will be interpreted in accordance with the laws of the State in which the Services are performed.

17.3. Failure to exercise any right will not operate as a waiver of that right, power, or privilege.

17.4. Neither party is liable for delays or lack of performance resulting from any causes that are beyond that party’s reasonable control, such as strikes, material shortages, or acts of God.

17.5. Motorola may subcontract any of the work, but subcontracting will not relieve Motorola of its duties under this Agreement.

17.6. Except as provided herein, neither Party may assign this Agreement or any of its rights or obligations hereunder without the prior written consent of the other Party, which consent will not be unreasonably withheld. Any attempted assignment, delegation, or transfer without the necessary consent will be void. Notwithstanding the foregoing, Motorola may assign this Agreement to any of its affiliates or its right to receive payment without the prior consent of Customer. In addition, in the event Motorola separates one or more of its businesses (each a “Separated Business”), whether by way of a sale, establishment of a joint venture, spin-off or otherwise (each a “Separation Event”), Motorola may, without the prior written consent of the other Party and at no additional cost to Motorola, assign this Agreement such that it will continue to benefit the Separated Business and its affiliates (and Motorola and its affiliates, to the extent applicable) following the Separation Event.

17.7. THIS AGREEMENT WILL RENEW, FOR AN ADDITIONAL ONE (1) YEAR TERM, ON EVERY ANNIVERSARY OF THE START

DATE UNLESS EITHER THE COVER PAGE SPECIFICALLY STATES A TERMINATION DATE OR ONE PARTY NOTIFIES THE OTHER IN WRITING OF ITS INTENTION TO DISCONTINUE THE AGREEMENT NOT LESS THAN THIRTY (30) DAYS OF THAT ANNIVERSARY DATE. At the anniversary date, Motorola may adjust the price of the Services to reflect its current rates.

17.8. If Motorola provides Services after the termination or expiration of this Agreement, the terms and conditions in effect at the time of the termination or expiration will apply to those Services and Customer agrees to pay for those services on a time and materials basis at Motorola’s then effective hourly rates.

17.9 This Agreement may be executed in one or more counterparts, all of which shall be considered part of the Agreement. The parties may execute this Agreement in writing, or by electronic signature, and any such electronic signature shall have the same legal effect as a handwritten signature for the purposes of validity, enforceability and admissibility. In addition, an electronic signature, a true and correct facsimile copy or computer image of this Agreement shall be treated as and shall have the same effect as an original signed copy of this document.

Revised Oct 15, 2015

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CITY OF SANTA MONICA

OAKS INITIATIVE NOTICE

NOTICE TO APPLICANTS, BIDDERS, PROPOSERS

AND OTHERS SEEKING DISCRETIONARY PERMITS, CONTRACTS,

OR OTHER BENEFITS FROM THE CITY OF SANTA MONICA
Santa Monica’s voters adopted a City Charter amendment commonly known as the Oaks Initiative. The Oaks Initiative requires the City to provide this notice and information about the Initiative’s requirements. You may obtain a full copy of the Initiative’s text from the City Clerk.

This information is required by City Charter Article XXII—Taxpayer Protection. It prohibits a public official from receiving, and a person or entity from conferring, specified personal benefits or campaign advantages from a person or entity after the official votes, or otherwise takes official action, to award a “public benefit” to that person or entity. The prohibition applies within and outside of the geographical boundaries of Santa Monica.

All persons or entities applying or receiving public benefits from the City of Santa Monica shall provide the names of trustees, directors, partners, and officers, and names of persons with more than a 10% equity, participation or revenue interest. An exception exists for persons serving in those capacities as volunteers, without compensation, for organizations exempt from income taxes under Section 501(c)(3), (4), or (6), of the Internal Revenue Code. However, this exception does not apply if the organization is a political committee or controls political committees. Examples of a “public benefit” include public contracts to provide goods or services worth more than $25,000 or a land use approval worth more than $25,000 over a 12-month period.

In order to facilitate compliance with the requirements of the Oaks Initiative, the City compiles and maintains certain information. That information includes the name of any person or persons who is seeking a “public benefit.” If the “public benefit” is sought by an entity, rather than an individual person, the information includes the name of every person who is: (a) trustee, (b) director, (c) partner, (d) officer, or has (e) more than a ten percent interest in the entity. Therefore, if you are seeking a “public benefit” covered by the Oaks Initiative, you must supply that information on the Oaks Initiative Disclosure Form. This information must be updated and supplied every 12 months.

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CITY OF SANTA MONICA

Public benefits include:

1. Personal services contracts in excess of $25,000 over any 12-month period;

2. Sale of material, equipment or supplies to the City in excess of $25,000 over a 12- month period;

3. Purchase, sale or lease of real property to or from the City in excess of $25,000 over a 12- month period;

4. Non-competitive franchise awards with gross revenue of $50,000 or more in any 12-month period;

5. Land use variance, special use permit, or other exception to an established land use plan, where the decision has a value in excess of $25,000;

6. Tax “abatement, exception, or benefit” of a value in excess of $5,000 in any 12- month period; or

7. Payment of “cash or specie” of a net value to the recipient of $10,000 in any 12- month period.

Name(s) of persons or entities receiving public benefit:

Name(s) of trustees, directors, partners, and officers:

Name(s) of persons with more than a 10% equity, participation, or revenue interest:

Prepared by: ____________________________Title: __________________________ Signature: ______________________________________ Date: ________________ Email: ____________________________________ Phone: ____________________ FOR CITY USE ONLY:

Bid/PO/Contract # ____________________________ Permit # ___________________________

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Packet Pg. 124 Attachment: Motorola Oaks Form 2023 (5651 : Motorola Contract Modification) Motorola Solutions, Inc.
500 W. Monroe, Floors 37-44
Chicago, Illinois 60661
Effective: May 11, 2023
Executive Committee
Gregory Q. Brown Chairman and Chief Executive Officer
Karen Dunning Senior Vice President, Human Resources
Jack Molloy Executive Vice President and Chief Operating Officer Rajan Naik Senior Vice President, Strategy &Ventures
Jim Niewiara Senior Vice President, General Counsel
Mahesh Saptharishi Executive Vice President & Chief Technology Officer Jason J. Winkler Executive Vice President and Chief Financial Officer Cynthia Yazdi Senior Vice President, Chief of Staff, Communications & Brand Board of Directors
Gregory Q. Brown (Chairman)
Kenneth D. Denman
Egon P. Durban
Dr. Ayanna Howard
Clayton M. Jones
Judy C. Lewent
Gregory K. Mondre
Joseph M. Tucci

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Report
City Council Meeting: June 13, 2023
Agenda Item: 5.D
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To: Mayor and City Council
From: Christopher Smith, Acting Chief Information Officer, Information Services Department, Customer Experience and Support
Gigi Decavalles-Hughes, Director, Finance Department, Danny Alvarez, Fire Chief, Fire Department
Subject: Approval to Amend Agreement with Kronos, Inc. for Software-As-A-Service (SaaS) and Related Licenses
Recommended Action
Staff recommends that the City Council:

1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines.

2. Authorize the City Manager to combine existing Sales Agreement and Software License Agreement #8417 (CCS) and Software Maintenance and Support Agreement #8434 (CCS) into a single contract for 5 years that would result in a 23-year amended agreement with Kronos Inc. (Kronos), for Software as a Service (SaaS) and related licenses. This will result in a new grand total amount not to exceed $3,425,461 (including 5% in contingency) with future year funding contingent on Council budget approval.

Summary
The City uses Kronos Workforce Central, an electronic time-keeping system and attendance record processing system, for employee timekeeping and payroll processing. The Fire Department uses Kronos TeleStaff, an automated scheduling solution designed for public safety. TeleStaff optimizes the scheduling, communications, and deployment of public safety personnel and other critical resources. Staff would like to take advantage of a one-time $89,900 incentive to upgrade from the City’s current electronic time-keeping system, Kronos Workforce Central, to Kronos Dimensions.

Kronos Dimensions is a modern time-keeping system that would provide a unified

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platform for both TeleStaff and Workforce Central. Staff also requests authority to purchase additional software services necessary to enhance custom integrations into Kronos Workforce Central, transition, add additional security protections, and combine the two existing contracts into one contract to streamline contract management.

Discussion
The City has used Kronos Workforce Central since 1998. Significant staff and financial resources have been dedicated to customize, integrate, and configure Kronos Workforce Central to support various work schedules and automate overtime calculations supporting a variety of City work schedules. Integration has been developed with the City’s current Financial and Human Resource Capital management system, Tyler Munis, to import employee information into Kronos Workforce Central and export time detail data from Kronos Workforce Central to Tyler Munis to streamline the payroll process.

The City also uses Kronos TeleStaff in the Fire Department to make scheduling and communication more efficient while ensuring 24x7 staffing, minimizing compliance risks, and controlling labor costs. Since implementing the TeleStaff solution, staff has worked with the vendor to customize Telestaff to implement requirements resulting from labor negotiations lending to a highly customized product that has improved public safety staff scheduling. Kronos will now incorporate both the Kronos Workforce Central and Telestaff modules into one single cloud-hosted solution called Dimensions.

On December 11, 2021, Kronos experienced a ransomware attack and entities all over the world could not process paychecks or access employee records until Kronos could restore their systems in January 2022. This required City staff to manually process all time-keeping functions including recording, approving, calculating, and exports of time data for payroll processing. In the aftermath, Kronos has recommended that all clients migrate to Dimensions and transition from the Kronos Private Cloud (currently utilized by the City) to the Google Cloud. By moving to Google Cloud, employee data is protected by including two-factor authentication and data encryption. The platform also offers a range of security monitoring and detection tools, as well as support for a wide

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variety of security protocols and standards. This new secure platform will be more protective of sensitive payroll data.

Kronos has also announced the end-of life for Kronos Workforce Central product as of December 2025. At that time, the product will not be supported by Kronos and the City will not have a supported timekeeping system. The current maintenance and support agreement for Workforce Central also ends in December 2023. The upgrade requires a one-time service cost of $139,900, however Kronos has offered an incentive of $89,900, contingent upon the City approving a new contract by June 30, 2023. The one-time discounted amount to upgrade to Dimensions in FY 2023-24 is $50,000 plus a one-time Telestaff migration fee of $10,000. The City will pay an annual cost for the maintenance and support agreement of $151,634 in FY 2023-24 with no annual increase over the five-year agreement.

Vendor Selection
In 1998, Council authorized the purchase of a timekeeping and attendance system from Kronos, Inc. Kronos was selected after a competitive bidding process, which resulted in the evaluation of five vendors’ systems for their ability to meet the City’s needs. The Kronos system was selected because it offered the most robust database, extensive real-time reporting capabilities, a hardware and software platform that conforms to the City standards to ensure support by existing personnel and compatibility with other City systems and offered a turnkey solution with on-site and telephonic technical support and a local training facility.

In 2004, Council authorized the purchase of TeleStaff, an automated staff scheduling and notification system for the Fire Department. The system was selected after evaluating multiple vendors’ systems for their ability to be customized to fit the Fire Department’s complex call-out requirements, including accommodating for organization specific rules in a decision-making hierarchy to automatically notify staff-via phone and email with the details of their required attendance. In 2014, staff again evaluated employee timekeeping and attendance management systems during the RFP process for the new Enterprise Resource Planning system. However, none of the systems

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evaluated had the robust functionality of the Kronos Workforce Central and Kronos TeleStaff systems and did not integrate attendance data and scheduled time worked into the City’s financial management system.

Staff recommends that the City create a new contract with Kronos to continue to provide software licenses and maintenance and support services on a sole source basis for the Workforce Central and TeleStaff products and to migrate to the integrated Dimensions products from Kronos Private Cloud to Google Cloud platform. The current software has undergone years of customization and therefore a proprietary system and Kronos is the only vendor that can provide maintenance and support for its software systems.

During the next 5 years, Staff commits to conducting a Request for Information to determine if other platforms can provide the same level of service and customization and, if so, a Request for Proposal will be issued.

Environmental Review
The contract modification is categorically exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines. The award contract is covered by the common sense exemption which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.” The modification will allow the City to continue to utilize its electronic time-keeping and attendance record processing system. Therefore, it can be seen with certainty that the agreement would not result in adverse physical impacts on the environment, and as such, is categorically exempt from CEQA.

Past Council Actions
Meeting Date Description
5/26/2005
(Attachment A)
Authorization to enter into an agreement with Kronos
08/25/2020
(Attachment B)
Sixth Modification to Agreement #8417 (CCS) with Kronos, Inc.

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Financial Impacts and Budget Actions
Staff seeks authority to approve funding from the General Fund and the Resource Recovery and Recycling Fund to increase the total contract amount and consolidate the previous Contracts #8417 and #8434 with Kronos for time-keeping and public safety scheduling services. Funding will be included in the FY 2023-25 Proposed Biennial Budget. Future year funding is contingent on Council budget approval.

Contract Modification Request
Agreement
#
Current
Authorized
Amount
FY23-24
Modified
Request Amount
Future Years Total
Modified Request
Amount
Account Number Total Amount
8417 $642,912 Various $642,912
8434 $1,900,125 Various $1,900,125
New
$7,248 C0105200.689000 $7,248
$40,041 C0106420.689000 $40,041
$2,711 01300001.529230 $2,711
$34,731 $78,088 01190001.529230 $112,819
$112,258 $449,031 01300001.529230 $561,288
$27,345 $109,382 01180001.529230 $136,727
$4,318 $17,272 54500002.529080 $21,590
Total $2,543,037 $228,652 $653,772 $3,425,461
Prepared By: Sreekanth Maddali, Principal Business Process Technology Analyst.

Approved Forwarded to Council
Attachments:

A. Staff Report - 05/26/2005 (Web Link)
B. Staff Report - 12/15/98 (Web Link)
C. 2017 OAKS INITIATIVE FORM
D. 04 Executed Kronos_8434_Mod_5

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E. 04 Executed Kronos_8417_Mod_6

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Packet Pg. 131

CITY OF SANTA MONICA

OAKS INITIATIVE NOTICE

NOTICE TO APPLICANTS, BIDDERS, PROPOSERS

AND OTHERS SEEKING DISCRETIONARY PERMITS, CONTRACTS,

5.D.c
Packet Pg. 132 Attachment: 2017 OAKS INITIATIVE FORM (5696 : Kronos Software-As-A-Service Contract)

CITY OF SANTA MONICA

Public benefits include:

1. Personal services contracts in excess of $25,000 over any 12-month period;

2. Sale of material, equipment or supplies to the City in excess of $25,000 over a 12- month period;

3. Purchase, sale or lease of real property to or from the City in excess of $25,000 over a 12- month period;

4. Non-competitive franchise awards with gross revenue of $50,000 or more in any 12-month period;

5. Land use variance, special use permit, or other exception to an established land use plan, where the decision has a value in excess of $25,000;

6. Tax “abatement, exception, or benefit” of a value in excess of $5,000 in any 12- month period; or

7. Payment of “cash or specie” of a net value to the recipient of $10,000 in any 12- month period.

Name(s) of persons or entities receiving public benefit:

Name(s) of trustees, directors, partners, and officers:

Name(s) of persons with more than a 10% equity, participation, or revenue interest:

Bid/PO/Contract # ____________________________ Permit # ___________________________

5.D.c
Packet Pg. 133 Attachment: 2017 OAKS INITIATIVE FORM (5696 : Kronos Software-As-A-Service Contract) 1 FIFTH MODIFICATION OF SOFTWARE MAINTENANCE
AND SUPPORT AGREEMENT NO. 8434 (CCS)
This Fifth Modification of Software Maintenance and Support Agreement Number 8434 (CCS) (“Fifth Modification”), entered into as of ______________(“Execution Date”), by and between the City of Santa Monica (“City”), a California municipal corporation, and Kronos Incorporated (“Kronos”) is made with reference to the following:

RECITALS
A. On or about May 26, 2005, the City and Kronos entered into the Software Maintenance and Support Agreement No. 8434 (CCS) for Software Maintenance and Support (“Original Agreement”).

B. On or about December 23, 2008, the City and Kronos entered into a First Modification of the Original Agreement (“First Modification”) to purchase additional software licenses and to add maintenance and support services to the Original Agreement.

C. On or about July 24, 2015, the City and Kronos entered into a Second Modification of the Original Agreement (“Second Modification”) to extend the term of the Original Agreement to accommodate the City’s desire to receive maintenance and support services for an additional five years.

D. On or about April 20, 2016, the City and Kronos entered into a Third Modification of the Original Agreement (“Third Modification”) to purchase additional software licenses and to add maintenance and support services to the Original Agreement.

E. On or about December 28, 2018, the City and Kronos entered into a Fourth Modification of the Original Agreement (“Fourth Modification”) to convert the City’s perpetual Kronos Workforce Central software licenses to Kronos Software as a Service (SaaS) licenses. The Original Agreement, First Modification, Second Modification, Third Modification, and Fourth Modification may be referred to collectively herein as “the Agreement.” F. Concurrent with the execution of the Original Agreement, on or about May 26, 2005, the City and Kronos entered into the Kronos Sales Agreement and Software License Agreement Number 8417 (CCS) (“Original Sales Agreement”) for the purchase of certain software licenses, equipment, and professional services that were the subject the maintenance and support to be provided pursuant to the Agreement. The Original Sales Agreement was subsequently modified by the parties on December 23, 2008, November 6, 2012, July 24, 2015, April 20, 2016, and December 28, 2018.

G. The City and Kronos now desire to enter into this Fifth Modification to the Agreement to facilitate the migration of the City’s on-premises Workforce Telestaff Database to the Kronos Cloud and to pay for professional services associated with hosting of the City’s database in the cloud (the “Fifth Modification”).

DocuSign Envelope ID: 06581AAB-9E34-4BE7-BE64-34425BF3F0EA 12/23/2020

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Packet Pg. 134 Attachment: 04 Executed Kronos_8434_Mod_5 (5696 : Kronos Software-As-A-Service Contract) 2 TERMS AND CONDITIONS
Now, therefore, the undersigned parties do hereby mutually agree to modify the Agreement as follows:

1. Section 1(B) of the Original Agreement entitled “Software Support Services” is modified to include the following:

Workforce TeleStaff Enterprise Bundle Licenses. Kronos shall provide to City the most current available version of the Workforce TeleStaff SaaS Applications in the Kronos’ hosting environment, as described in the TeleStaff – Software as a Service Terms and Conditions, attached hereto as Exhibit A-5. Kronos shall provide the corresponding software licenses in accordance with the Kronos Order Form dated 6/22/2020, attached hereto as Exhibit B-5.

2. Term. The term for the SaaS licenses covered by this Fifth Modification shall begin on the Billing Start Date as set forth in Exhibit B-5 and shall terminate 36 months thereafter, unless terminated earlier as set forth in the Agreement or extended by the parties in writing.

3. Section 4 of the Original Agreement entitled “Fees and Charges” is modified to include the following:

A. For fiscal years 2020/21, 2021/22, and 2022/23, the annual fee for the software as a service required for the Workforce TeleStaff Software and provided to City under the Fifth Modification shall be no more than $14,400.00 per year.

B. The compensation paid by City to Kronos for the software as a service rendered to City pursuant to the Fifth Modification shall not to exceed the amount of $49,680.00.

C. The total amount of compensation paid by City to Kronos for any and all services rendered under the Agreement and all subsequent modifications shall not exceed $1,900,125.00 unless expressly modified by the parties in writing.

4. Except as expressly modified by this Fifth Modification, all other terms and conditions of the Agreement shall be and remain in full force and effect.

DocuSign Envelope ID: 06581AAB-9E34-4BE7-BE64-34425BF3F0EA

5.D.d
Packet Pg. 135 Attachment: 04 Executed Kronos_8434_Mod_5 (5696 : Kronos Software-As-A-Service Contract) 3 IN WITNESS WHEREOF, the parties have executed this Fifth Modification as of the date and year first written above.

ATTEST:
______________________________

DENISE ANDERSON-WARREN
APPROVED AS TO FORM:
______________________________

LANE DILG

CITY OF SANTA MONICA,
a municipal corporation
By: ______________________________

RICK COLE

#VENDOR
By: ________________________________
DocuSign Envelope ID: 06581AAB-9E34-4BE7-BE64-34425BF3F0EA Interim City Attorney
12/18/2020
George Cardona
Order Processing Analyst
UKG
12/22/2020
Nicole Dandurant
Interim City Manager
12/23/2020
Lane Dilg
City Clerk
12/24/2020
Denise Anderson-Warren

5.D.d
Packet Pg. 136 Attachment: 04 Executed Kronos_8434_Mod_5 (5696 : Kronos Software-As-A-Service Contract) 4 Exhibit A-5
DocuSign Envelope ID: 06581AAB-9E34-4BE7-BE64-34425BF3F0EA

5.D.d
Packet Pg. 137 Attachment: 04 Executed Kronos_8434_Mod_5 (5696 : Kronos Software-As-A-Service Contract) 5 To whom it may concern,
The City of Santa Monica has agreed to migrate their On-Premise Workforce Telestaff Database to the Kronos Cloud. An annual payment of $14,400.00 is to be paid to host the Santa Monica Fire Department’s Telestaff database. This includes one Production and Test Environment.

Kronos will maintain the servers until expiration of the contract.

Workforce Telestaff is used to fairly schedule public safety personnel, manage overtime opportunities, and report findings and discrepancies through the collection of staffing data.

Kronos Incorporated (Headquarters)
900 Chelmsford Street
Lowell, MA 01851
Tel: +1 (978) 250 9800
Fax: +1 (978) 367 5900
Website: www.kronos.com
DocuSign Envelope ID: 06581AAB-9E34-4BE7-BE64-34425BF3F0EA

5.D.d
Packet Pg. 138 Attachment: 04 Executed Kronos_8434_Mod_5 (5696 : Kronos Software-As-A-Service Contract) 6 Exhibit B-5
Quote #:

Expires:

Prepared By:
661759-1 (conversion), 661760-1 (add-on)
7/23/2020
Bryan Driscoll
Order Type:

Date:

Upgrade
6/22/2020
Bill To: Attn: Accounts Payable Ship To: Attn: Laura Smart Santa Monica Fire Santa Monica Fire
333 Olympic Drive, 2nd Floor 333 Olympic Drive, 2nd Floor Santa Monica, CA 90401
Email:

Santa Monica, CA90401
[email protected]
Solution ID: 6104398 FOB: Shipping Point
Currency: US Ship Method: FedEx Ground
Customer PO #: Freight Terms: Prepay & Add
Data Center: USA
Executive Name: Laura Smart
Executive Email: [email protected]
Program Manager Name: Laura Smart
Program Manager Email: [email protected]
Notes: .

This order is subject to the terms and conditions of that certain Kronos Sales Agreement and Software License Agreement No. 8417 (CCS) between City of Santa Monica and Kronos dated May 26, 2005, as amended by the First Modification dated December 23, 2008, as also amended by the Second Modification dated November 6, 2012, as also amended by the Third Modification dated July 24,2015, as amended by the Fourth Modification dated April 20,2016, and as further amended by the Fifth Modification dated December 28, 2018.

Initial Term: Three Year
Billing Start Date: 90 days from execution of Order Form Renewal Term: One Year
Payment Terms: Net 30
Billing Frequency (unless otherwise noted, all invoices are due per the payment terms noted above):

Applications: Annual in Advance
Professional Services: Bill as you go, Monthly in arrears as delivered KnowledgePass & Education Subscription: Upon execution of Order Form The fees for the Applications are invoiced 60 days prior to the Billing Start Date.

Kronos will provide Customer read-only ODBC access into Customer’s production and non-production databases for Timekeeper/HRMS over secure connection (e.g. VPN). Customer is responsible for establishing this secure connection to the Kronos Cloud and additional fees for that connection may apply. Kronos may, but is not obligated to, limit or block Customer’s database read-only ODBC queries in order to prevent failure of the database due to overload. Kronos will not pay SLA credits for any Outage that is the result of overloading the database during read-only ODBC access. Overall performance may be limited during peak processing periods, and Customer may need to limit resource intensive read-only ODBC queries to off-peak periods. Customer acknowledges that read-only ODBC over a long distance secure connection is not a reliable protocol for it does not have retry logic built-in to handle connectivity issues. Kronos will not be responsible for any changes required to Customer’s internal systems to account for limitations of read-only OBDC protocol.

This order is made as part of a Kronos promotion. All pricing is discounted solely in connection with such promotion and will not be applied to future orders. Customer’s Software Support and Cloud Hosting services, as applicable, for the existing Workforce Central perpetual licenses shall continue, in accordance with Kronos Support policies, for a period of ninety (90) days from execution of this Order Form, and shall terminate thereafter, unless Customer chooses to reinstate Software Support and Cloud Hosting services, as applicable, at applicable fees.

Workforce Central SaaS Monthly Service Fees shall be invoiced at the Billing Frequency indicated on this Order Form, commencing on the Billing Start Date. As of the Billing Start Date, Kronos will credit any pre-paid but unused fees for Software Support and/or Cloud Hosting Services on the perpetual licenses, as applicable. Credits may be applied against any amounts owed to Kronos by Customer until such credit is expended. Customer shall pay for Software Support and Cloud Hosting services fees, as applicable, on the perpetual licenses until the Workforce Central SaaS Billing Start Date.

APPLICATIONS
Item License/Qty PEPM Monthly Price
Workforce TeleStaff Enterprise Bundle V7.1 150 $8.00 $1,200.00 Workforce TeleStaff Bidding v7.1 150 $0.00 Included
Monthly Total: $1,200.00

CLOUD SERVICES
Item Qty Unit Price Monthly Price
Read-Only ODBC Access to WFC/HR Database 1 $0.00 $0.00
Total Monthly: $0.00

CORE SMB PROFESSIONAL / EDUCATIONAL SERVICES
Item Duration Total Price
KnowledgePass SaaS WFC SMB Included
Total Price $0.00
Order Form - Workforce Central SaaS for SMB
DocuSign Envelope ID: 06581AAB-9E34-4BE7-BE64-34425BF3F0EA

5.D.d
Packet Pg. 139 Attachment: 04 Executed Kronos_8434_Mod_5 (5696 : Kronos Software-As-A-Service Contract) 7 BILL AS YOU GO SERVICES
Item Qty Rate Billing Role Total Price
TSG Professional Services 14 $180.00 Solution Consultant $2,520.00 TSG Professional Services 11 $180.00 Project Manager $1,980.00 TSG Technical Services 12 $215.00 Technology Consultant $2,580.00 Paragon Online Remote Team 4 $180.00 Project Manager $720.00 Paragon Online Remote Team 24 $180.00 Solution Consultant $4,320.00 Paragon Online Remote Team 16 $180.00 Intergration Consultant $2,880.00 Paragon Senior Integration 8 $215.00 Senior Intergration Consultant $1,720.00 Total Price $16,720.00

SUMMARY
Item Total Price
Monthly Application Fee $1,200.00
Total Monthly Service Fees: $1,200.00
Bill As You Go Services $16,720.00
Total Bill As You Go: $16,720.00
Santa Monica Finance Department
By:

Name: Gigi Decavalles-Hughes
Kronos Incorporated
By:

Name:

Title: Director of Finance Title:

Date: July 13, 2020 Date:

DocuSign Envelope ID: 06581AAB-9E34-4BE7-BE64-34425BF3F0EA

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Packet Pg. 140 Attachment: 04 Executed Kronos_8434_Mod_5 (5696 : Kronos Software-As-A-Service Contract) 8 Customer Name: Santa Monica Fire Department SID: 6104398 Customer Contact: Tom Clemo Phone Number: 424-280-0490
Email Address: [email protected] Currency: USD
Professional Services Work Order
Opportunity ID: SRVCS ONLY
Professional Services Objective/Outcome Deliverable
PSWO language <1,000ee:

Technical Upgrade Service Scope to the Kronos Cloud
• Cloud overview
• Installation of Workforce TeleStaff (1) PROD and (1) DEV • System Overview
• (4) hours of testing support • (4) hours of go live support Assumptions • All services delivered remotely. • Customer is responsible for migration of the database to MS SQL prior to the upgrade. • Each upgrade is considered as “like-for-like” and does not include customizations, configuration, new features or functionality other than what is required by the new version. • Customer is responsible for recreating the tasks in excess of (5). • Customer is responsible for testing the upgraded database in the development environment, not to exceed a (4) week time period and should mimic current end to end persona-based tasks. • The project will be closed after eight weeks if customer testing stalls and forward progress toward go live on the upgraded database ceases.

Any additional time required to assist customer will be managed through a mutually agreed upon change order signed by both parties.

Budget
Professional Services Part # Billing Role Contract Type UOM Qty. Rate Total Price 9990057-PRO Solution Consultant Time and Materials Hours 14 $180.00 $2,520.00 9990057-PRO Project Manager Time and Materials Hours 11 $180.00 $1,980.00 9990079-PRO Technology Consultant Time and Materials Hours 12 $215.00 $2,580.00 Time and Materials Hours $0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Total Professional Services $7,080.00
Sales Executive: Bryan Driscoll Create Date: 6/22/2020
Author: Expiration Date: 7/23/2020
DocuSign Envelope ID: 06581AAB-9E34-4BE7-BE64-34425BF3F0EA

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Packet Pg. 141 Attachment: 04 Executed Kronos_8434_Mod_5 (5696 : Kronos Software-As-A-Service Contract) 9 Statement of Work for CITY OF SANTA
MONICA
Services Only_Integration Support
Sales Executive David Chetlain
Author Tammy Hilsgen
Expiration Date 7/23/2020
Quote Number 2020-56797
Revision # 1
Opportunity ID Opp-317247
Status Approved
Customer SID 6012149
(c) 2020, Kronos Incorporated and related companies. All rights reserved.

CONFIDENTIAL - Not to be disclosed to third parties without specific written consent from Kronos.

DocuSign Envelope ID: 06581AAB-9E34-4BE7-BE64-34425BF3F0EA

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Packet Pg. 142 Attachment: 04 Executed Kronos_8434_Mod_5 (5696 : Kronos Software-As-A-Service Contract) 10 Overview
This Statement of Work ("SOW") provides an overview of the project including scope, approach, costs, and how the project will be managed. To support a successful implementation, the customer will provide the required internal project resources.

Project Objectives
The City is looking to track hours when an employee switches roles. Example Fire Fighter or Fire Prevention moves to working on the floor. Kronos will provide Professional Services to modify the following existing integrations to include one additional field for the purpose of tracking job transfers:
• WFC / TeleStaff Bi-directional Integration
• Payroll Export from WFC to Tyler Munis
Assumption around integration modification is as follows:
• The position is already part of the labor structure
• Modification of pay policies (pay rules, work rules, schedule rules, overtime rules, pay codes, etc) within WF Timekeeper and WF TeleStaff is excluded from the scope. • Wages remain in Tyler Munis solution, no integration or manual maintain of wages in Kronos • Creation of new integrations are excluded from the scope The scope of the services will include the following:
• Professional Services will be delivered remotely; Professional Services are billed as consumed. • A change in project scope may require additional professional services. Additional professional services, if required, will be managed through the Kronos Change Order Process. • Customer understands that all Kronos Consultant time must be scheduled in advance through the Kronos Project Manager with a 1 hour minimum per AC/TC call/event. • Kronos Project Manager is Project Coordination Level: resource, budget and billing management • 2 Workforce Central environments
Project duration is expected to be 4 working weeks, based upon our experience with our customers and products. Depending upon the preparation and engagement of your organization, there may be opportunity to complete the project in a compressed duration. However, if project resources are unprepared or unavailable, the duration of the project may need to be extended, increasing the budget required to successfully complete this scope of work. Requests for additional scope or activities outside of this planned project scope may be accommodated through the change process. In this circumstance, Kronos may issue a change order to ensure the appropriate budget is available.

Kronos will deliver the scope of this project utilizing a remote approach.

Services Investment Summary
This SOW represents a time and materials engagement. Travel expenses are not included and will be invoiced separately as incurred.

Service Type
Professional Services $9,640.00
$9,640.00
DocuSign Envelope ID: 06581AAB-9E34-4BE7-BE64-34425BF3F0EA

5.D.d
Packet Pg. 143 Attachment: 04 Executed Kronos_8434_Mod_5 (5696 : Kronos Software-As-A-Service Contract) 11 Signatures and Approvals

SUBMITTED AND APPROVED BY KRONOS REPRESENTATIVE
By:

Title:

Date:

This Statement of Work is subject to the CITY OF SANTA MONICA's Workforce Central SaaS or perpetual license agreement with Kronos governing Professional and Education Services. By signing below, the authorized CITY OF SANTA MONICA's representative agrees to purchase the services described herein.

ACCEPTED AND AGREED

CITY OF SANTA MONICA
By: Date: July 13, 2020
Title: Director of Finance
CITY OF SANTA MONICA may make necessary copies of this document for the sole purpose of facilitating internal evaluation and/or execution of proposed project. Otherwise, the document or any part thereof may not be reproduced in any form without the written permission of Kronos Incorporated.

DocuSign Envelope ID: 06581AAB-9E34-4BE7-BE64-34425BF3F0EA

5.D.d
Packet Pg. 144 Attachment: 04 Executed Kronos_8434_Mod_5 (5696 : Kronos Software-As-A-Service Contract) 1 SIXTH MODIFICATION OF

KRONOS SALES AGREEMENT AND
SOFTWARE LICENSE NO. 8417 (CCS)
This Sixth Modification of Kronos Sales Agreement and Software License Number 8417 (CCS) (“Fifth Modification”), entered into as of ______________(“Execution Date”), by and between the City of Santa Monica, a municipal corporation (“City”), and Kronos Incorporated (Kronos) is made with reference to the following:

RECITALS
A. On or about May 26, 2005, the City and Kronos entered into a Kronos Sales Agreement and Software License Agreement Number 8417 (CCS) (“Original Agreement”) for the purchase of certain software licenses and equipment.

B. On or about December 23, 2008, the City and Kronos entered into a First Modification of the Kronos Sales Agreement and Software License (“First Modification”) for the purchase of additional software licenses and professional services.

C. On or about November 6, 2012, the City and Kronos entered into a Second Modification of the Kronos Sales Agreement and Software License (“Second Modification”) for the purchase of additional licenses and professional services.

D. On or about July 24, 2015, the City and Kronos entered into a Third Modification of the Kronos Sales Agreement and Software License (“Third Modification”) for the purchase of additional licenses, new software entitled “Workforce Mobile”, and to develop new interfaces and to make changes to existing interfaces for the new Enterprise Resource Planning System.

E. On or about April 20, 2016, the City and Kronos entered into a Fourth Modification of the Kronos Sales Agreement and Software License (“Fourth Modification”) for the City’s purchase of additional licenses and professional services.

F. On or about December 28, 2018, the City and Kronos entered into a Fifth Modification of the Kronos Sales Agreement and Software License (“Fifth Modification”) where the City purchased from Kronos an upgrade to existing services, including a Knowledge-Pass Education Subscription and upgraded equipment. The parties also agreed to increase the contract price to pay for the additional services and equipment, and the parties incorporated the City’s insurance requirements into the agreement. The Original Agreement, First Modification, Second Modification, Third Modification, Fourth Modification, DocuSign Envelope ID: 02E54955-78A9-433A-ACBC-D7F147F03BB3 12/23/2020

5.D.e
Packet Pg. 145 Attachment: 04 Executed Kronos_8417_Mod_6 (5696 : Kronos Software-As-A-Service Contract) 2 and Fifth Modification may be referred to collectively herein as “the Agreement.” G. The City and Kronos now desire to further modify the Agreement to provide for the City’s additional purchase from Kronos of upgraded Telestaff services, professional consulting services and training, and corresponding hardware and equipment. The City and Kronos desire to increase the contract price accordingly to pay for the additional professional services and equipment.

TERMS AND CONDITIONS
Now, therefore, the undersigned parties do hereby mutually agree to modify the Agreement as follows:

1. Additional Software Services and Equipment. Section 1 of Agreement shall be modified to include the following additional software services and equipment to be provided to the City by Kronos:

1.1 Workforce TeleStaff Enterprise Bundle V7.1 Software. Kronos shall provide the City with the Workforce TeleStaff upgrade services, training, professional support services, corresponding equipment and hardware, as set forth in the Order Form dated July 13, 2020 and attached hereto as Exhibit A-6. The City’s cost for the software and services stated in Exhibit A-6, and shall be a fixed cost in the amount of $16,720.00 as set forth in Exhibit B-6.

2. Total Amount Not to Exceed. The total amount of compensation paid to Kronos for the Workforce TeleStaff upgrade services, training, professional support services, corresponding equipment and hardware, as set forth in Exhibit A-6 and authorized under this Sixth Modification, shall not exceed the sum of $34,228.

Accordingly, the total amount of compensation that may be paid to Kronos for all software, equipment, and services provided by Kronos to the City under the Agreement as subsequently modified shall not exceed Six Hundred Forty-Two Thousand, Nine Hundred Twelve Dollars ($642,912). Kronos shall invoice the City in the manner required by the Agreement and when all software, equipment, and services have been provided to the City. The City will pay undisputed invoices within 30 days of receipt.

3. Additional Exhibits. Exhibits A-6 and B-6, attached hereto, are incorporated into the Agreement.

DocuSign Envelope ID: 02E54955-78A9-433A-ACBC-D7F147F03BB3

5.D.e
Packet Pg. 146 Attachment: 04 Executed Kronos_8417_Mod_6 (5696 : Kronos Software-As-A-Service Contract) 3 4. Agreement to Remain in Effect. Except as expressly modified by this Sixth Modification, all other terms and conditions of the Agreement shall be and remain in full force and effect.

IN WITNESS WHEREOF, the parties have executed this Sixth Modification as of the date and year first written above.

ATTEST:
______________________________

DENISE ANDERSON-WARREN
APPROVED AS TO FORM:
______________________________

LANE DILG

CITY OF SANTA MONICA,
a municipal corporation
By: ______________________________

RICK COLE

#VENDOR
By: ________________________________
DocuSign Envelope ID: 02E54955-78A9-433A-ACBC-D7F147F03BB3 George Cardona
12/18/2020
Interim City Attorney
Nicole Dandurant
UKG
Order Processing Analyst
12/22/2020
Lane Dilg
Interim City Manager
12/23/2020
Denise Anderson-Warren
12/28/2020
City Clerk

5.D.e
Packet Pg. 147 Attachment: 04 Executed Kronos_8417_Mod_6 (5696 : Kronos Software-As-A-Service Contract) 4 Exhibit A-6
Quote #:

Expires:

Prepared By:
661759-1 (conversion), 661760-1 (add-on)
7/23/2020
Bryan Driscoll
Order Type:

Date:

APPLICATIONS
Item License/Qty PEPM Monthly Price
Workforce TeleStaff Enterprise Bundle V7.1 150 $8.00 $1,200.00 Workforce TeleStaff Bidding v7.1 150 $0.00 Included
Monthly Total: $1,200.00

CLOUD SERVICES
Item Qty Unit Price Monthly Price
Read-Only ODBC Access to WFC/HR Database 1 $0.00 $0.00
Total Monthly: $0.00

5.D.e
Packet Pg. 148 Attachment: 04 Executed Kronos_8417_Mod_6 (5696 : Kronos Software-As-A-Service Contract) 5 BILL AS YOU GO SERVICES
Item Qty Rate Billing Role Total Price
TSG Professional Services 14 $180.00 Solution Consultant $2,520.00 TSG Professional Services 11 $180.00 Project Manager $1,980.00 TSG Technical Services 12 $215.00 Technology Consultant $2,580.00 Paragon Online Remote Team 4 $180.00 Project Manager $720.00 Paragon Online Remote Team 24 $180.00 Solution Consultant $4,320.00 Paragon Online Remote Team 16 $180.00 Intergration Consultant $2,880.00 Paragon Senior Integration 8 $215.00 Senior Intergration Consultant $1,720.00 Total Price $16,720.00

Name: Gigi Decavalles-Hughes
Kronos Incorporated
By:

Name:

Title: Director of Finance Title:

Date: July 13, 2020 Date:

DocuSign Envelope ID: 02E54955-78A9-433A-ACBC-D7F147F03BB3

5.D.e
Packet Pg. 149 Attachment: 04 Executed Kronos_8417_Mod_6 (5696 : Kronos Software-As-A-Service Contract) 6 Customer Name: Santa Monica Fire Department SID: 6104398 Customer Contact: Tom Clemo Phone Number: 424-280-0490
Email Address: [email protected] Currency: USD
Professional Services Work Order
Opportunity ID: SRVCS ONLY
Professional Services Objective/Outcome Deliverable
PSWO language <1,000ee:

Any additional time required to assist customer will be managed through a mutually agreed upon change order signed by both parties.

5.D.e
Packet Pg. 150 Attachment: 04 Executed Kronos_8417_Mod_6 (5696 : Kronos Software-As-A-Service Contract) 7 Statement of Work for CITY OF SANTA
MONICA
Services Only_Integration Support
Sales Executive David Chetlain
Author Tammy Hilsgen
Expiration Date 7/23/2020
Quote Number 2020-56797
Revision # 1
Opportunity ID Opp-317247
Status Approved
Customer SID 6012149
(c) 2020, Kronos Incorporated and related companies. All rights reserved.

CONFIDENTIAL - Not to be disclosed to third parties without specific written consent from Kronos.

DocuSign Envelope ID: 02E54955-78A9-433A-ACBC-D7F147F03BB3

5.D.e
Packet Pg. 151 Attachment: 04 Executed Kronos_8417_Mod_6 (5696 : Kronos Software-As-A-Service Contract) 8 Overview
This Statement of Work ("SOW") provides an overview of the project including scope, approach, costs, and how the project will be managed. To support a successful implementation, the customer will provide the required internal project resources.

Kronos will deliver the scope of this project utilizing a remote approach.

Services Investment Summary
This SOW represents a time and materials engagement. Travel expenses are not included and will be invoiced separately as incurred.

Service Type
Professional Services $9,640.00
$9,640.00
DocuSign Envelope ID: 02E54955-78A9-433A-ACBC-D7F147F03BB3

5.D.e
Packet Pg. 152 Attachment: 04 Executed Kronos_8417_Mod_6 (5696 : Kronos Software-As-A-Service Contract) 9 Signatures and Approvals

SUBMITTED AND APPROVED BY KRONOS REPRESENTATIVE
By:

Title:

Date:

ACCEPTED AND AGREED

DocuSign Envelope ID: 02E54955-78A9-433A-ACBC-D7F147F03BB3

5.D.e
Packet Pg. 153 Attachment: 04 Executed Kronos_8417_Mod_6 (5696 : Kronos Software-As-A-Service Contract) 10 Exhibit B-6
BUDGET
Product Price
TeleStaff Bundle Upgrade Services $16,720.00
TeleStaff Professional Services, Training, Hardware $13,044.00 Contingency $4,464.00
Total Amount for Sixth Modification $34,228.00
Total Contract Not to exceed $642,912.00

DocuSign Envelope ID: 02E54955-78A9-433A-ACBC-D7F147F03BB3

5.D.e
Packet Pg. 154 Attachment: 04 Executed Kronos_8417_Mod_6 (5696 : Kronos Software-As-A-Service Contract) City Council
Report
City Council Meeting: June 13, 2023
Agenda Item: 5.E
1 of 5
To: Mayor and City Council
From: Danielle Noble, Acting Director, Community Services Department Subject: Award Bid 4453 to Star-Dust Tours, Inc. to Provide Bus Transportation Services
Recommended Action
Staff recommends that the City Council:

1. Adopt a finding of no possibility of significant effect on the environment pursuant to Section 15061(b)(3) (Common Sense Exemption) of the
California Environmental Quality Act (CEQA) Guidelines.

2. Award Bid #4453 to Star-Dust Tours, Inc. for bus transportation services for the Community Services Department;

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Executive Summary
The City offers numerous community activities that require bus transportation.

Following the end of the Big Blue Bus Charter services to programs for youth, seniors, and people with disabilities in 2012, the Community Services Department (CSD) began to use a contractor for transportation to various recreational, educational, and social activities and has continued the practice since. A formal bid was posted in April 2023, in advance of the current contract’s expiration date. Staff recommends the award of bid #4453 to Star-Dust Tours, Inc. for bus transportation services in an amount not to exceed $408,000 over a five-year period.

Discussion
CSD schedules up to 100 excursions annually for a variety of programs for youth and people with disabilities, including those offered through CREST, the Santa Monica Police Activities League (PAL), Santa Monica Adaptive Recreation & Sports (SMARS), and Virginia Avenue Park. The passengers represent a mixture of fee paying and fully subsidized program participants and range in group size from 25 to 75 participants per trip. These trips offer enriching excursions to groups that consist of a majority of lowincome program participants, allowing them to participate in activities outside of the City.

Excursions include day trips to amusement parks and sporting events as well as educational and cultural enrichment activities such as college tours and museum visits to destinations within Los Angeles, Orange, and Ventura Counties and parts of Kern, San Bernadino and Riverside Counties. Charter buses are used when the number of program participants exceeds City-owned passenger van capacity. Trips are funded through Proposition A Recreational Transit Program funding and follow Proposition A program guidelines.

Vendor/Consultant Selection

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Bidder Recommendation
Best Bidder Star Dust Tours, Inc. DBA The Bus
Evaluation Criteria
(include all that
apply)
Price; the quality of the material or services offered; the ability, capacity and skill of the bidder to perform or provide the materials or services; the capacity of the bidder to perform the contract or provide the service promptly, within the time specified, and without delay or interference; the character, integrity, reputation, judgment, training, experience and efficiency of the bidder; value add; the ability of the bidder to provide such future maintenance or service as may be needed; any other factor that will further the intent set forth in Section 608 of the City Charter. The City shall have absolute discretion in determining the applicability and weight of the criteria listed above.

The City is not required to select the bid with the lowest price.

Municipal Code SMMC 2.24.180
Submittals
Received
51 to 60
pass w/
restroom
ADA
51 to 60
pass
w/o
restroom
41 to 50
pass w/
restroom
ADA
41 to 50
pass w/o
restroom
31 to 40
pass w/
restroom
ADA
31 to
40 pass
w/o
restroom
21 to 30
pass w/
restroom
ADA
21 to 30
pass w/o
restroom
American
Transportation
(6hr min)
$199 $149 $199 $149 $199 $149 $159 $129
Star Dust
Tours, Inc.
(5hr min)
$190
($130/hr
after
5hrs)
$190
($130/hr
after
5hrs)
$190
($130/hr
after
5hrs)
$190
($130/hr
after
5hrs)
$150
($125/hr
after
5hrs)
$150
($125/h
r after
5hrs)
$130
($120/hr
after
5hrs)
$130
($120/hr
after
5hrs)
Transportation
Connection,
Inc. (5hr min)
$200 $200 $175 $175 $175 $175 $125 $125
Bid Data
Date
Posted Posted On
Advertise In
(City Charter & SMMC)
Vendors
Downloaded
Date Publicly
Opened
04/13/2023 City's
Online
Bidding
Site
Santa Monica Daily
Press
15 05/01/2023
Submittals Received

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Best Bidder Justification
Star-Dust Tours, Inc. is the best bidder and is recommended for award of transportation services. They are the lowest bidder over all five years and their past performance has demonstrated a sound knowledge and understanding of the programs and community needs. They offered the most flexible cancellation policy and were able to meet all specifications.

Environmental Review
The award contract is categorically exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines. The award contract is covered by the commonsense exemption which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.” The agreement will allow the City to continue to provide existing bus transportation services. Therefore, it can be seen with certainty that the agreement would not result in adverse physical impacts on the environment, and as such, is categorically exempt from CEQA.

Financial Impacts and Budget Actions
Staff seeks authority to approve funding from the Local Return Fund to award a contractual services agreement to Star-Dust Tours, Inc. for bus transportation services.

Prop A Recreational Transit Program state funds will continue to be utilized for the contract. Funds are included in the FY 2023-25 Proposed Biennial Budget.

Contract/Agreement/Purchase Order Request
FY 2023-24
Budget
Request
Amount
Future Years
Amount Department/CIP Account # Total Contract Amount
$25,000 $100,000 27600001.555440 $125,000
$56,600 $226,400 27600001.555460 $283,000
Total $408,000
Future year funding is contingent on Council budget approval.

5.E
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5 of 5
Prepared By: Jill Krueger, Senior Administrative Analyst Approved Forwarded to Council
Attachments:

A. OAKS_INITIATIVE-STARDUST TOURS INC

5.E
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CITY OF SANTA MONICA OAKS INITIATIVE DISCLOSURE FORM
In order to facilitate compliance with the requirements of the Oaks Initiative, the City compiles and maintains certain information. That information includes the name of any person or persons who is seeking a "public • benefit." If the "public benefit" is sought by an entity, rather than an individual person, the information includes the name of every person who is: (a) trustee, (b) director, (c) partner, (d) officer, or has (e) more than a ten percent interest in the entity.

Public benefits include:

1. Personal services contracts in excess of $25,000 over any 12-month period;

2. Sale of material, equipment or supplies to the City in excess of $25,000 over a 12- month period;

3. Purchase, sale or lease of real property to or from the City in excess of$25,000 over a 12- month period;

4. Non-competitive franchise awards with gross revenue of $50,000 or more in any 12-month period;

5. Land use variance, special use permit, or other exception to an established land use plan, where the decision has a value in excess of $25,000;

6. Tax "abatement, exception, or benefit" of a value in excess of $5,000 in any 12- month period; or

7. Payment of "cash or specie" of a net value to the recipient of $10,000 in any 12- month period.

Name(s) of persons or entities receiving public benefit:
5'-..-t-C, - ~ V .:.. T Tb V (t, S,, \ '-J (._ .

Name(s) of trustees, directors, partners, and officers:
fr4'-r \-'Z- 6-"'"''-"~'L.. =l'r•
Name(s) of persons with more than a 10% equity, participation, or revenue interest:
fV""r L, t:=- G-ot, 1.-- ~\<..-a- T\1-r .

Prepared by:_~_~_4_ <... _ f'L __ &-_ ~_t.,_-_t.,._c.;_• ~_-_,.,__, __ :S_ ,_-_ Title: f)._,..~~ t Jl. ""'--tSignature:--=/ _ -_· ..... k;="""/ ;__ ______ _ __ Date: '{ t~--==r-/ -i 0~ ""::) Email: .Al\ q ~C;j ..S ~ vtll((... £ 2 Y~Lt e:.b . t~V'-\ Phone: · ~ b ·t.- "'l...S '-\- o~ 7 b FOR CITY USE ONLY:

Bid/PO/Contract# _________ _ Permit# ____ _____ _

5.E.a
Packet Pg. 160 Attachment: OAKS_INITIATIVE-STARDUST TOURS INC [Revision 1] (5728 : Bid to Award Bus Transportation for Community Services Dept) City Council
Report
City Council Meeting: June 13, 2023
Agenda Item: 5.F
1 of 5
To: Mayor and City Council
From: David Martin, Director, Administration
Subject: Approval of the Santa Monica Tourism Marketing District Fiscal Year 2023-24 Budget and Work Plan
Recommended Action
Staff recommends that the City Council:

1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines; and

2. Approve the Santa Monica Tourism Marketing District Fiscal Year 2023-24 Budget and Work Plan.

Summary
Tourism is essential to the City’s economic recovery and vitality. In 2012, in partnership with local hotels, Santa Monica Travel and Tourism (SMTT) established the Santa Monica Tourism and Marketing District (SMTMD). The purpose of the SMTMD is to increase overnight room sales with targeted marketing and promotions. Funding for the marketing programs and activities of the SMTMD are derived from assessments and revenues collected from the hotels operating within the boundaries of the SMTMD. The attached SMTMD Annual Report summarizes the SMTMD’s proposed programs and activities for upcoming Fiscal Year 2023-24, including the SMTMD work plan, budget, hotel report, and marketing plan. Staff recommends that Council review and approve the Annual Report in accordance with the State laws governing tourism marketing districts.

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Discussion
Under Streets and Highway Code Section 36650, the Santa Monica Tourism and Marketing District (SMTMD) is required to prepare Annual Reports providing the following information:
• Any proposed changes to the boundaries of the tourism marketing district or to any benefit zones or classification within the district, • The improvements, maintenance, and activities for that fiscal year, • An estimate of the cost of providing the improvements, maintenance, and activities for that fiscal year,
• The method and basis of levying the assessment in sufficient detail to allow each real property or business owner, as appropriate, to estimate the amount of the assessment to be levied against his or her property or business for that fiscal year,
• The estimated amount of any surplus or deficit in revenues to be carried over from a previous fiscal year,
• The estimated amount of contributions to be made from sources otherthan assessments levied pursuant to this part.

In accordance with Section 36650, the SMTMD has submitted its 2023-2024 SMTMD Annual Report (Attachment D), including the work plan and budget for Council approval. The following overview summarizes the proposed expenditures to be funded with SMTMD assessments in the upcoming fiscal year.

SMTMD Reporting Year FY 2023-24
Revenues
Estimated TMD Assessments $6,410,159
Bank Interest $1,800
Total Revenues* $6,411,959
Expenditures
Cost of Programs
Travel Industry Sales $1,750,000
Marketing $1,675,000

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Visitor Services
Meetings, incentives, conferences and
exhibitions
$175,000
$350,000
Client Services $48,000
General and Administrative Services $641,000
Salaries & Benefits $1,402,451
Contingency Fund $320,508
Fixed Asset $50,000
Total Expenses $6,411,959
Estimated Carry-over from Previous Fiscal Year $0
Estimated In-Kind Contributions $220,000
* This does not include $2,935,298 in City funding included in the FY 2023-24 Proposed Budget for a services agreement with SMTT that the City provides SMTT annually to continue SMTT’s tourism and marketing programs, operate Visitors Centers, produce collateral materials, create brand awareness, and promote Santa Monica through print and social media.

The SMTMD expenditures and services for FY 2023-24 are budgeted at $6,411,959 to focus on recovery and destination promotion to serve as a catalyst for economic recovery. The attached annual work plan reflects the initiatives and programs focused on five strategic areas:

1. Drive Balanced Demand for the Destination

2. Enhance the Brand and Steward the Destination Experience

3. Champion the Value of Tourism

4. Strengthen Strategic Partnerships and Relationships

5. Ensure Operational Excellence
The FY 2023-24 workplan continues to leverage Visit California and Los Angeles Tourism’s efforts. SMTT will continue to reach and extend its presence into key domestic markets including New York, Chicago, California and border states, while increasing and/or re-engaging in top international markets including Australia/New Zealand, United Kingdom/Ireland, France, Germany, Canada and Mexico to ensure Santa Monica is well positioned to attract a balance and wide range of visitors.

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With that lens, strengthening and enhancing Santa Monica as a brand, marketing and promoting Santa Monica as a tourism destination, increasing occupancy, establishing partnerships within the tourism community, private sector and government entities to position Santa Monica as a filming destination, and expanding a presence in emerging markets would continue to be core goals of the SMTMD.

The proposed FY 2023-24 budget was approved by the Tourism Marketing District Committee and the Santa Monica Travel and Tourism (SMTT) Board of Directors at a joint meeting on May 10, 2023. Council may approve the annual report or may modify any section contained in the annual report and approve it as modified. As the assessment formulas in the SMTMD remain as approved in 2017, staff recommends Council approve the attached Annual Report.

Past Council Actions
Meeting Date Description
12/11/2012 Council adopted Resolution No. 10722 (CCS) establishing the Santa Monica Tourism Marketing District (SMTMD).
11/1/2016 Council adopted Resolution 11005 (CCS) extending the SMTMD by nine and one-half years beginning on
January 1, 2018 through June 30, 2027.
6/14/2022 Council approved the Annual Report for FY 2022-23 (Calendar Year 2023) representing the sixth report for the SMTMD renewal term.

Environmental Review
The SMTMD’s FY 2023-24 workplan is categorically exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines. The workplan is covered by the commonsense exemption which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.” Therefore, it can be seen with certainty that the workplan would not result in adverse physical impacts on the environment, and as such, is categorically exempt from CEQA.

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Financial Impacts and Budget Actions
There is no immediate financial impact or budget action necessary as a result of the recommended action.

Prepared By: Nia Tang, Senior Development Analyst
Approved Forwarded to Council
Attachments:

A. 06/14/2022 Staff Report (Web Link)
B. 11/01/2016 Staff Report (Web Link)
C. 12/11/2012 Staff Report (Web Link)
D. 2023-2024 SMTMD Annual Report

5.F
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SMTMD Annual Report for Fiscal Year 2023 – 2024 Page 1 of 7 April 1, 2023 2023 – 2024 SMTMD Annual Report
Santa Monica Travel & Tourism
April 1, 2023
Introduction
This report outlines the annual Tourism Marketing District plan from Santa Monica Travel & Tourism, a not-for-profit organization that works to strengthen our local economy by enhancing and promoting our community as a distinctive, compelling and welcoming travel destination.

Background
Pursuant to Section 36650 of the Property and Business Improvement District Law of 1994, Streets and Highways Code Division 18, Santa Monica Travel and Tourism submits annual reports outlining the improvements and activities to be provided for the calendar year.

Submitted to:

Jennifer Taylor, Economic Development Manager, City of Santa Monica Gigi Decavalles-Hughes, Director of Finance, City of Santa Monica Prepared by:

Misti Kerns, President/CEO of Santa Monica Travel & Tourism For the Period of:

Fiscal Year 2023 – 2024
Submitted on April 1, 2023: ________
Enclosures:

Attachment A. 2023–2024 Budget
Attachment B. ADR Report for 2022
Attachment C. Tourism Marketing District Plan
Attachment D. 2023–2024 Programs and Services

5.F.d
Packet Pg. 166 Attachment: 2023-2024 SMTMD Annual Report (5745 : Approval of the Santa Monica Tourism Marketing District Fiscal Year 2023-24 Budget and SMTMD Annual Report for Fiscal Year 2023 – 2024 Page 2 of 7 April 1, 2023 Santa Monica Travel and Tourism
TMD Report Plan for Fiscal Year 2023 – 2024
Section One – Proposed Boundary Changes
Definition: Per section 36650 Report by Owners Association; Approval or modification by city council section (b)(1): Any proposed changes in the boundaries of the improvement district or in any benefit zones or classification of businesses within the district.

Response: In the fiscal year 2023 – 2024, there will be no changes in the boundaries of the improvement district.

5.F.d
Packet Pg. 167 Attachment: 2023-2024 SMTMD Annual Report (5745 : Approval of the Santa Monica Tourism Marketing District Fiscal Year 2023-24 Budget and SMTMD Annual Report for Fiscal Year 2023 – 2024 Page 3 of 7 April 1, 2023 Section Two – Programs and Services for Fiscal Year 2023 – 2024 Definition: Per section 36650 Report by Owners Association; Approval or modification by city council section (b)(2): The improvements and activities to be provided for that fiscal year.

Programs and Services:

See Attachment D: 2023–2024 Programs and Services.

5.F.d
Packet Pg. 168 Attachment: 2023-2024 SMTMD Annual Report (5745 : Approval of the Santa Monica Tourism Marketing District Fiscal Year 2023-24 Budget and SMTMD Annual Report for Fiscal Year 2023 – 2024 Page 4 of 7 April 1, 2023 Section Three – Approved Budget for Fiscal Year 2023 – 2024 Definition: Per section 36650 Report by Owners Association; Approval or modification by city council section (b)(3): An estimate of the cost of providing the improvements and the activities for that fiscal year.

Response: See Attachment A. 2023–2024 Budget. The 2023-2024 Budget was presented to the SMTT Board of Directors on March 8, 2023, where the Board of Directors approved the budget as presented unanimously. Minutes from the March 8, 2023, Board of Directors Meeting adopting the 2023-2024 budget will be presented at the May 10, 2023, Joint Annual Board and TMD Committee Meeting. Following the May 10, 2023, meeting, SMTT will forward the final minutes within 48 hours to the Economic Development Department.

5.F.d
Packet Pg. 169 Attachment: 2023-2024 SMTMD Annual Report (5745 : Approval of the Santa Monica Tourism Marketing District Fiscal Year 2023-24 Budget and SMTMD Annual Report for Fiscal Year 2023 – 2024 Page 5 of 7 April 1, 2023 Section Four – Assessment Rates
Definition: Per section 36650 Report by Owners Association; Approval or modification by city council section (b)(4): The method and basis of levying the assessment in sufficient detail to allow each business owner to estimate the amount of the assessment to be levied against his or her business for that fiscal year.

Response:

Pursuant to Section V(B) of the Management District Plan, assessment rates may be increased annually by a maximum of $0.25 for Tier 1 and 2 lodging businesses and a maximum of $0.10 for Tier 3 lodging businesses. Assessment rates are based on the assessed lodging businesses’ average daily rate, based on the previous year’s performance. Lodging businesses with an average daily rate less than $100 will not be included in the district or assessed.

The TMD Hotel Committee held their regularly scheduled meeting on Tuesday, February 14, 2023, voting unanimously to move the July 1, 2023, assessment start date to January 1, 2024, along unanimously voting to increase the TMD collection rates for calendar year 2024, the rates for calendar year 2024 are listed below:

Average Daily Rate Assessment Per Occupied Room Per Night for January 1, 2024
Tier 3: $100-$199.99 $2.10
Tier 2: $200-$300 $5.75
Tier 1: Over $300 $6.75
See Attachment B. ADR Report for 2022. The attached ADR report outlines the average daily rate for hotel rooms and projects the tier rating for every qualified lodging business within the City of Santa Monica.

5.F.d
Packet Pg. 170 Attachment: 2023-2024 SMTMD Annual Report (5745 : Approval of the Santa Monica Tourism Marketing District Fiscal Year 2023-24 Budget and SMTMD Annual Report for Fiscal Year 2023 – 2024 Page 6 of 7 April 1, 2023 Section Five – Carryover Dollars from Fiscal Year 2021-2022 Definition: Per section 36650 Report by Owners Association; Approval or modification by city council section (b)(5): The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal year.

Response: The were no TMD carryover dollars from fiscal year ending June 30, 2021.

The contingency balance for fiscal year ending June 30, 2021, was $397,991 (8.32% of the annual funds per the SMTMD plan).

5.F.d
Packet Pg. 171 Attachment: 2023-2024 SMTMD Annual Report (5745 : Approval of the Santa Monica Tourism Marketing District Fiscal Year 2023-24 Budget and SMTMD Annual Report for Fiscal Year 2023 – 2024 Page 7 of 7 April 1, 2023 Section Six – Estimated In-Kind Contributions for Fiscal Year 2023- 2024
Definition: Per section 36650 Report by Owners Association; Approval or modification by city council section (b)(6): The estimated amount of any contributions to be made from sources other than assessments levied pursuant to this part.

Response: The projected in-kind contributions for the year 2023-2024 are $220,000.

These are additional contributions from local businesses (in-kind) towards programs and services.

5.F.d
Packet Pg. 172 Attachment: 2023-2024 SMTMD Annual Report (5745 : Approval of the Santa Monica Tourism Marketing District Fiscal Year 2023-24 Budget and Santa Monica Travel Tourism
FISCAL YEAR 2023-2024 BUDGET SHEET
Confidential Financial Data
Revenues
City Contract Revenue $ 2,935,298 98.17% $ - 0.00% $ 2,935,298 31.22% Estimated TMD Revenue - 0.00% 6,410,159 99.97% 6,410,159 68.18% Bank Interest 2,291 0.08% 1,800 0.03% 4,091 0.04%
Other Income 17,400 0.58% - 0.00% 17,400 0.19%
Retail Revenue 35,000 1.17% - 0.00% 35,000 0.37%
Total Revenues $ 2,989,989 100.00% $ 6,411,959 100.00% $ 9,401,948 100.00% Cost of Programs
Travel Industry Sales $ - 0.00% $ 1,750,000 27.29% $ 1,750,000 18.61% Marketing 293,489 9.82% 1,675,000 26.12% $ 1,968,489 20.94% Visitor Services 152,000 5.08% 175,000 2.73% $ 327,000 3.48% MICE - 0.00% 350,000 5.46% $ 350,000 3.72%
Client Services 165,000 5.52% 48,000 0.75% $ 213,000 2.27% Total Cost of Programs $ 610,489 20.42% $ 3,998,000 62.35% $ 4,608,489 49.02% General & Administrative $ 767,507 25.67% $ 641,000 10.00% $ 1,408,507 14.98% Salaries & Benefits $ 1,574,993 52.68% $ 1,402,451 21.87% $ 2,977,444 31.67% Contingency Fund $ - 0.00% $ 320,508 5.00% $ 320,508 3.41% Fixed Asset $ 37,000 1.24% $ 50,000 0.78% $ 87,000 0.93% Total Expenses $ 2,989,989 100.00% $ 6,411,959 100.00% $ 9,401,948 100.00% Net Increase (Decrease) $ (0) 0.00% $ 0 0.00% $ (0) 0.00% City Contract TMD Total Budget

5.F.d
Packet Pg. 173 Attachment: 2023-2024 SMTMD Annual Report (5745 : Approval of the Santa Monica Tourism Marketing

LODGING TIER CLASSIFICATION FOR SANTA

MONICA TOURISM MANAGEMENT DISTRICT
(2022 Year Basis for 2023 Assessment)
FINAL
FOR
February 2023

5.F.d
Packet Pg. 174 Attachment: 2023-2024 SMTMD Annual Report (5745 : Approval of the Santa Monica Tourism Marketing District Fiscal Year 2023-24 Budget and 1 February 20, 2023
Misti Kerns, President CEO
Santa Monica Travel & Tourism
2427 S. Main Street
Santa Monica, CA 90405
Dear Ms. Kerns:

In accordance with our agreement, we have performed an analysis and have categorized Santa Monica hotels in order to determine the appropriate Tourism Marketing District (TMD) tier and assessment for calendar year 2023.

The TMD was established by the City of Santa Monica to fund tourism marketing. The TMD hotels collect a specified flat assessment per room night sold commensurate with their tier based on the just completed calendar year, in this case 2022 annual Average Daily Rate (ADR).

Per our discussions with you, our understanding of the Santa Monica Tourism Marketing District Management District Plan, and 2022 average rate data, hotel and motel properties within Santa Monica subject to the TMD assessment are categorized as follows for the calendar 2023 assessment year:

Tier 1: Hotels with an annual average rate of $300.00 or more, to be assessed at a rate of $6.50 (up from $6.25 in 2022) per hotel room/night sold.

Tier 2: Hotels with an annual average rate of $200.00 to $299.99, to be assessed at a rate of $5.50 (up from $5.25) per hotel room/night sold.

Tier 3: Hotels with an annual average rate of $100.00 to $199.99, to be assessed at a rate of $2.00 (from) $1.90 per hotel room/night sold.

Non-Assessed: Hotels with an annual average rate below $100.00 The International Hostel and short-term rentals are excluded from this analysis.

Our methodology consisted of reviewing and recalculating available and occupied rooms, and revenues data for all Santa Monica hotels and motels, provided by SMTT.

In 2022 almost all lodging was fully operational and recovered from the COVID-19 pandemic which closed properties in much of 2020 and part of 2021. ______________________________________________________________________________ 1041 S. Gramercy Drive, Los Angeles CA 90019
213-435-0304
www.lsconsult.com

5.F.d
Packet Pg. 175 Attachment: 2023-2024 SMTMD Annual Report (5745 : Approval of the Santa Monica Tourism Marketing District Fiscal Year 2023-24 Budget and 2 Our determination of the appropriate tier category for 2023 for each Santa Monica lodging property is listed below. Note this determination is based on actual ADR performance through December 2022 for the full year of 2022.

Hotel 2022
Tier
ADR
(thru Dec.)
2023
Tier
2023 Result
Hotels to Stay in Same Tier in 2022 from 2021
Tier 1: 19 Hotels with ADR $300+
Casa del Mar 1 $825.16 1 Stay in Current Tier
Cottage 1 $653.34 1 Stay in Current Tier
Fairmont Miramar 1 $526.66 1 Stay in Current Tier
The Georgian (Dec. n/a) 1 $337.98 1 Stay in Current Tier JW Marriott – Le Merigot
(Dec. n/a)
1 $428.73 1 Stay in Current Tier
Loews 1 $517.04 1 Stay in Current Tier
Oceana 1 $808.53 1 Stay in Current Tier
Palihouse 1 $435.15 1 Stay in Current Tier
Proper Hotel 1 $554.99 1 Stay in Current Tier
Shangri-La Hotel (Dec.
n/a)
1 $380.83 1 Stay in Current Tier
Shutters 1 $881.29 1 Stay in Current Tier
Viceroy 1 $480.36 1 Stay in Current Tier
The Ambrose 2 $376.55 1 Move up to Tier 1
Courtyard 2 $319.39 1 Move up to Tier 1
Hilton Hotel & Suites 2 $347.01 1 Move up to Tier 1
Huntley Hotel 2 $387.74 1 Move up to Tier 1
Le Meridien 2 $324.19 1 Move up to Tier 1
Ocean View (Dec. n/a) * 2 $303.62 1 Move up to Tier 1
Shore Hotel 2 $313.43 1 Move up to Tier 1
Tier 2: 8 Hotels ADR $200-299
Bayside Inn (Thru Sept.) 2 $293.49 2 Stay in Current Tier CalMar 2 $279.92 2 Stay in Current Tier
Hampton Inn (Dec. n/a) 2 $296.52 2 Stay in Current Tier Ocean Lodge 2 $280.80 2 Stay in Current Tier
Sea Blue Hotel 2 $289.08 2 Stay in Current Tier
Wyndham (thru July only
due to full renovation)
2 $234.02 2 Stay in Current Tier
Hotel Carmel 3 $245.79 2 Move up to Tier 2
Gateway 3 $214.97 2 Move up to Tier 2
Tier 3: 8 Hotels ADR $100-199
Comfort Inn 3 $196.66 3 Stay in Current Tier
Days Inn 3 $189.08 3 Stay in Current Tier
Ocean Park Inn 3 $163.65 3 Stay in Current Tier
Palm Motel 3 $165.65 3 Stay in Current Tier
Rest Haven 3 $154.14 3 Stay in Current Tier
Santa Monica Motel 3 $165.07 3 Stay in Current Tier
Sea Shore Motel 3 $177.80 3 Stay in Current Tier
Sure Stay Best Western 3 $195.73 3 Stay in Current Tier

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Packet Pg. 176 Attachment: 2023-2024 SMTMD Annual Report (5745 : Approval of the Santa Monica Tourism Marketing District Fiscal Year 2023-24 Budget and 3 One Hotel Closed for Renovation - no 2022 Data Provided Sea View Motel 3 n/a 3 Stay in Current Tier
* The Ocean View is at $303.62 through November; as December revenue report to the City was not provided, the hotel could remain in Tier 2 or move to Tier 1 but cannot be determined pending December data.

As with last year, data for five motels was not provided, and we assume this is due to an ADR below $100.00 and therefore exempt from the TMD assessment for the current year. • American Motel
• American Youth Hostel
• Holiday Motel
• Ocean Park Hotel
• Pavilions Motel
We appreciate your resources to facilitate and the opportunity to assist you with this review.

Please feel free to contact me if you have any questions or comments, or for further interpretation of our findings.

Sincerely,
Lauren Schlau
President

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Packet Pg. 177 Attachment: 2023-2024 SMTMD Annual Report (5745 : Approval of the Santa Monica Tourism Marketing District Fiscal Year 2023-24 Budget and 2018-2027
September 29, 2016 Prepared pursuant to the Property and Business Improvement District Law of 1994, Streets and Highways Code section 36600 et seq.

SANTA MONICA TOURISM

MARKETING DISTRICT

MANAGEMENT DISTRICT PLAN

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Packet Pg. 178 Attachment: 2023-2024 SMTMD Annual Report (5745 : Approval of the Santa Monica Tourism Marketing District Fiscal Year 2023-24 Budget and

CONTENTS
I. OVERVIEW ........................................................................................................................................2 II. ACCOMPLISHMENTS.....................................................................................................................4 III. BACKGROUND ................................................................................................................................6 IV. BOUNDARY.......................................................................................................................................7 V. BUDGET AND SERVICES.............................................................................................................8 A. Annual Service Plan............................................................................................................ 8 B. Annual Budget .................................................................................................................... 9 C. California Constitutional Compliance .............................................................................. 10 D. Assessment........................................................................................................................ 13 E. Penalties and Interest ........................................................................................................ 13 F. Time and Manner for Collecting Assessments................................................................. 14 VI. GOVERNANCE...............................................................................................................................15 A. Owners’ Association......................................................................................................... 15 B. Brown Act and California Public Records Act Compliance ............................................ 15 C. Annual Report................................................................................................................... 15 D. Milestone Report............................................................................................................... 15 APPENDIX 1 – LAW....................................................................................................................................17 APPENDIX 2 – ASSESSED BUSINESSES .............................................................................................28 APPENDIX 3 – BENEFIT STUDY ..........................................................................................................29 APPENDIX 4 – TIER BENEFITS.............................................................................................................30 Prepared by
Civitas
(800)999-7781
www.civitasadvisors.com

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Packet Pg. 179 Attachment: 2023-2024 SMTMD Annual Report (5745 : Approval of the Santa Monica Tourism Marketing District Fiscal Year 2023-24 Budget and SMTMD Management District Plan 2
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I. OVERVIEW
Developed by Santa Monica Travel & Tourism (SMTT), the Santa Monica Tourism Marketing District (SMTMD) is an assessment district proposed to provide specific benefits to payors, by funding marketing and sales promotion efforts for assessed businesses. The SMTMD was formed in 2012 for a five (5) year term; lodging businesses now wish to renew it for an additional nine and one-half (9.5) years.

Location: The renewed SMTMD includes all lodging businesses located within the boundaries of the City of Santa Monica with an average daily rate of $100 or more, as shown on the map in section IV.

Services: The SMTMD is designed to provide specific benefits directly to payors by increasing room night sales. Marketing and sales promotions will increase overnight tourism and market payors as tourist, meeting and event destinations, thereby increasing room night sales.

Budget: The total SMTMD annual budget for each full year of operation is anticipated to be approximately $4,130,000. The initial “year” of operation will be a partial year consisting of six months, for which the anticipated budget is $2,065,000. This budget is expected to fluctuate as room sales and the assessment rate do, as detailed in Section V.

Cost: The assessment is a fixed amount per occupied room per night. The assessment is based on the businesses’ average daily rate, based on the previous year’s performance.

Average daily rate figures shall be updated annually. Based on the benefit received, assessments will not be collected on: stays of more than thirty (30) consecutive days; and stays paid by any Federal, State of California, or City of Santa Monica, official or employee when on official business provided that an exempt certificate is executed at the time of registration. Lodging businesses with an average daily rate less than $100 will not be included in the district or assessed. Assessment rates are:

Tier Average Daily
Rate
Assessment Per Occupied Room
Per Night
1 $300 and above $5.25
2 $200 - $299.99 $4.25
3 $100 - $199.99 $1.50
Assessment rates may be subject to an annual increase of no more than twenty-five cents ($0.25) per year for Tier 1 and Tier 2 lodging businesses and no more than ten cents ($0.10) per year for Tier 3 lodging businesses. The table below demonstrates the maximum with the assumption that the rates will be increased by the maximum amounts for each category in each year of the SMTMD’s nine and one-half (9.5) year term, as it is a required disclosure, it is not the anticipated course of action. The maximum assessment rate for each category is:

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Packet Pg. 180 Attachment: 2023-2024 SMTMD Annual Report (5745 : Approval of the Santa Monica Tourism Marketing District Fiscal Year 2023-24 Budget and SMTMD Management District Plan 3
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Year $100 - $199.99 $200 - $299.99 $300 and Above
2018* $1.50 $4.25 $5.25
2018-19 $1.60 $4.50 $5.50
2019-20 $1.70 $4.75 $5.75
2020-21 $1.80 $5.00 $6.00
2021-22 $1.90 $5.25 $6.25
2022-23 $2.00 $5.50 $6.50
2023-24 $2.10 $5.75 $6.75
2024-25 $2.20 $6.00 $7.00
2025-26 $2.30 $6.25 $7.25
2026-27 $2.40 $6.50 $7.50
*The initial “year” is January 1, 2018 through June 30, 2018 Collection: The City will be responsible for collecting the assessment on a monthly basis (including any delinquencies, penalties and interest) from each lodging business located in the boundaries of the SMTMD. The City shall take all reasonable efforts to collect the assessments from each lodging business.

Duration: The renewed SMTMD will have a nine and one-half (9.5) year life, beginning January 1, 2018 through June 30, 2027. Once per year, beginning on the anniversary of district renewal, there is a 30-day period in which owners paying more than fifty percent (50%) of the assessment may protest and initiate a City Council hearing on district disestablishment.

Management: Santa Monica Travel & Tourism will continue to serve as the SMTMD’s Owners’ Association. The Owners’ Association is charged with managing funds and implementing programs in accordance with this Plan, and must provide annual reports to the City Council.

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II. ACCOMPLISHMENTS
The SMTMD is being renewed for the following reasons:

1. The SMTMD has funded excellent marketing programs and strategies In the first five (5) year term of the SMTMD, the District has funded:
x Creation of 5-year strategic plan for the destination with input provided by the TMD Hotel Committee;
x Focus Groups conducted in seven (7) domestic and international target markets to assess perceptions of the destination brand;
x Integrated advertising campaigns targeted to domestic target markets to drive travel during Santa Monica’s soft season (paid search, behavioral retargeting, display, paid social, eNewsletter sponsorships).
x Entirely redesigned SantaMonica.com, including new white labeled booking site to drive bookings directly to assessed lodging businesses’ websites. New website recognized with industry design awards for structure, concept and functionality; x Redesigned logo, brand style guide, destination photography and video; and x New and improved Official Visitor Guide and Map with award-winning publishing partner.

2. The SMTMD has funded enhanced business development programs for key international target markets
x United Kingdom, Australia and Brazil:
o Full time representation in all three markets;
o Enhanced public relations support;
o B2B and B2C integrated campaigns with performance metrics and sales analysis; o Brand enhancing partnerships with travel trade clientele (Visit California and Brand USA);
o Sales and media missions including key hotel partners for targeted markets; o Tradeshow participation; and
o Ongoing trade relationship development and trainings. x France and Germany:
o Part-time representation;
o B2B campaigns with sales and social media performance metrics; o Tradeshow participation; and
o Ongoing trade relationship development and trainings.

3. The SMTMD has funded initiatives to increase the meetings and incentives market Santa Monica Travel and Tourism has executed over twenty meetings and incentive (MICE) programs with the objective of increasing qualified meetings and incentives business to the destination. x Sales missions were conducted in New York, Toronto, Washington DC, Chicago, Minneapolis, San Francisco, Orange County and San Diego; x SMTT exhibited at IMEX America, IncentiveWorks, and Incentive Travel Exchange, conducting over 500 meetings with key buyers;
x SMTT hosted nearly thirty (30) meeting planners to the destination to experience first hand what their clients would be booking; and

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September 29, 2016
x SMTT engaged a third party consultant to conduct focus groups with these meeting planners to better understand future meetings and incentives business opportunity for the destination.

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III. BACKGROUND
TMDs are an evolution of the traditional Business Improvement District. The first TMD was formed in West Hollywood, California in 1989. Since then, ninety-five (95) California destinations have followed suit. In recent years, other states have begun adopting the California model – Montana, South Dakota, Washington, Colorado, Texas and Louisiana have adopted TMD laws. Several other states are in the process of adopting their own legislation. The cities of Wichita, Kansas and Newark, New Jersey used an existing business improvement district law to form a TBID. And, some cities, like Portland, Oregon and Memphis, Tennessee have utilized their home rule powers to create TMDs without a state law.

California’s TMDs collectively raise
over $200 million for local
destination marketing. With
competitors raising their budgets,
and increasing rivalry for visitor
dollars, it is important that Santa
Monica lodging businesses
continue to invest in stable,
lodging-specific marketing
programs.

TMDs utilize the efficiencies of
private sector operation in the
market-based promotion of
tourism districts. TMDs allow
lodging business owners to
organize their efforts to increase room night sales. Lodging business owners within the TMD pay an assessment and those funds are used to provide services that increase room night sales.

In California, TMDs are formed pursuant to the Property and Business Improvement District Law of 1994. This law allows for the creation of a benefit assessment district to raise funds within a specific geographic area. The key difference between TMDs and other benefit assessment districts is that funds raised are returned to the private non-profit corporation governing the district.

There are many benefits to TMDs:
x Funds must be spent on services and improvements that provide a specific benefit only to those who pay;
x Funds cannot be diverted to general government programs; x They are customized to fit the needs of payors in each destination; x They allow for a wide range of services;
x They are designed, created and governed by those who will pay the assessment; and x They provide a stable, long-term funding source for tourism promotion. 1 2 4 6 9 12
19 24 28 31
37 45
60 63
72 80
88 95
0 10
20 30
40 50
60 70
80 90
100
198919952000200120022003200420052006200720082009201020112012201320142015 Number of Districts Operating Per Year

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IV. BOUNDARY
The SMTMD will include all lodging businesses, existing and in the future, available for public occupancy within the boundaries of the City of Santa Monica with an average daily rate of $100 or more. Lodging businesses whose average daily rate increases to $100 will be assessed upon determination of the increase; likewise, lodging businesses whose average daily rate decreases to below $100 will not be assessed upon determination of the decrease. Average daily rate figures shall be updated annually.

Lodging business means: Any public or private hotel, inn, hostelry, tourist home or house motel, rooming house or other lodging place within the City of Santa Monica offering lodging, wherein the owner and operator thereof, for compensation, furnishes lodging to any transient.

The boundary, as shown in the map below, currently includes thirty-two (32) lodging businesses. A complete listing of lodging businesses within the renewed SMTMD can be found in Appendix 2.

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Packet Pg. 185 Attachment: 2023-2024 SMTMD Annual Report (5745 : Approval of the Santa Monica Tourism Marketing District Fiscal Year 2023-24 Budget and SMTMD Management District Plan 8
September 29, 2016
V. BUDGET AND SERVICES
A. Annual Service Plan
Assessment funds will be spent to provide specific benefits conferred or privileges granted directly to the payors that are not provided to those not charged, and which do not exceed the reasonable cost to the City of conferring the benefits or granting the privileges. The privileges and services provided with the SMTMD funds are sales and marketing programs available only to assessed businesses. The assessment rate for each Tier will be commensurate with privileges and services provided to assessed businesses in each Tier as detailed in Appendix 4.

A service plan budget has been developed to deliver services that benefit the assessed businesses. A detailed annual budget will be developed and approved by the SMTT TMD Committee and the SMTT Board. The table below illustrates the initial annual budget allocations for the first partial fiscal year.

The total SMTMD annual budget for each full year of operation is anticipated to be approximately $4,130,000. The initial “year” of operating will be a partial year consisting of six months, for which the anticipated budget is $2,065,000.

Although actual revenues will fluctuate due to market conditions and assessment rate increases, the proportional allocations of the budget shall remain the same. However, the City and the SMTT board shall have the authority to adjust budget allocations between the categories by no more than fifteen percent (15%) of the total budget per year. A description of the proposed improvements and activities for the initial year of operation is below. The same activities are proposed for subsequent years. In the event of a legal challenge against the SMTMD, any and all assessment funds may be used for the costs of defending the SMTMD.

Each budget category includes all costs related to providing that service, in accordance with Generally Accepted Accounting Procedures (GAAP). For example, the sales and marketing budget includes the cost of staff time dedicated to overseeing and implementing the sales and marketing program. Staff time dedicated purely to administrative tasks is allocated to the administrative portion of the budget.

The costs of an individual staff member may be allocated to multiple budget categories, as appropriate Sales & Marketing,
$1,755,250 , 85%
Administration,
$206,500 , 10%
Contingency/Reserve, $103,250 , 5%
FY 2018 Budget (January - June) - $2,065,000

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Packet Pg. 186 Attachment: 2023-2024 SMTMD Annual Report (5745 : Approval of the Santa Monica Tourism Marketing District Fiscal Year 2023-24 Budget and SMTMD Management District Plan 9
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in accordance with GAAP. The staffing levels necessary to provide the services below will be determined by SMTT on an as-needed basis. Staff costs will be allocated based on work performed.

Sales and Marketing
A sales and marketing program will promote assessed businesses as tourist, meeting, and event destinations. The sales and marketing program will have a central theme of promoting Santa Monica as a desirable place for overnight visits. The program will have the goal of increasing overnight visitation and room night sales at assessed businesses, and may include the following activities:
x Internet marketing efforts to increase awareness and optimize internet presence to drive overnight visitation and room sales to assessed businesses; x Print ads in magazines and newspapers, television ads, and radio ads targeted at potential visitors to drive overnight visitation and room sales to assessed businesses; x Attendance of trade shows to promote assessed businesses; x Sales blitzes for assessed businesses;
x Familiarization tours of assessed businesses;
x Research and analytics to promote assessed businesses; x Translation services designed to drive overnight visitation and room sales to assessed businesses;
x Staff to implement and support expanded marketing and promotion efforts to promote assessed businesses;
x External public relations firms to promote assessed businesses; x Preparation and production of collateral promotional materials such as brochures, flyers and maps featuring assessed businesses;
x Attendance of professional industry conferences and affiliation events to promote assessed businesses;
x Lead generation activities designed to attract tourists and group events to assessed businesses; x Director of Sales and General Manager meetings to plan and coordinate tourism promotion efforts for assessed businesses; and
x Development and maintenance of a website designed to promote assessed businesses.

Administration and Operations
The administration and operations portion of the budget shall be utilized for administrative staffing costs, office costs, and other general administrative costs such as insurance, legal, and accounting fees.

Contingency/Reserve
The budget includes a contingency line item to account for uncollected assessments, if any. If there are contingency funds collected, they may be held in a reserve fund or utilized for other program, administration or renewal costs at the discretion of the Owners’ Association. Policies relating to contributions to the reserve fund, the target amount of the reserve fund, and expenditure of monies from the reserve fund shall be set by the SMTT TMD Committee and the SMTT Board of Directors.

The reserve fund may be used for the costs of renewing the District.

B. Annual Budget
The total nine and one-half (9.5) year improvement and service plan budget is projected at approximately $4,130,000 annually, or $57,530,913 through 2027 if the maximum assessment rate increases are adopted. Fiscal year 2018 covers the six month period from January to June 2018, resulting in a lower budget for the first six months of district operation. This budget is expected to fluctuate as room sales change and if the assessment rate is increased. The initial assessment rate is:

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Packet Pg. 187 Attachment: 2023-2024 SMTMD Annual Report (5745 : Approval of the Santa Monica Tourism Marketing District Fiscal Year 2023-24 Budget and SMTMD Management District Plan 10
September 29, 2016
Tier Average Daily Rate Assessment Per Occupied Room Per Night 1 $300 and above $5.25
2 $200 - $299.99 $4.25
3 $100 - $199.99 $1.50
The SMTT may increase the assessment rate by a maximum of $0.25 per year for Tier 1 and Tier 2 lodging businesses and no more than ten cent ($0.10) per year for Tier 3 lodging businesses. The assessment rate might not increase starting in fiscal year 2018-19, the increases may be implemented in later years at the discretion of the Owners’ Association. The table below demonstrates the maximum with the assumption that the rates will be increased by the maximum amounts for each category in each year of the SMTMD’s nine and one-half (9.5) year term, as it is a required disclosure, it is not the anticipated course of action. Additionally, a three percent (3%) annual increase in the total budget is shown, to account for estimated increased room night sales as a result of SMTMD efforts. This three percent (3%) annual increase is a conservative estimate based on the effects of similarly sized TMD budgets. If the maximum annual assessment increases are adopted by the SMTT Board, the estimated annual budget will increase as shown in the table below.

Estimated Annual Budget If Maximum Assessment Rates Are Adopted 2018-2027
FY Sales &
Marketing Administration Contingency/Reserve Total
2018* $1,755,250 $206,500 $103,250 $2,065,000
2018-19 $3,813,041 $448,593 $224,297 $4,485,931
2019-20 $4,130,576 $485,950 $242,975 $4,859,501
2020-21 $4,463,730 $525,145 $262,572 $5,251,447
2021-22 $4,813,157 $566,254 $283,127 $5,662,537
2022-23 $5,179,531 $609,357 $304,678 $6,093,566
2023-24 $5,563,556 $654,536 $327,268 $6,545,360
2024-25 $5,965,962 $701,878 $350,939 $7,018,778
2025-26 $6,387,504 $751,471 $375,736 $7,514,710
2026-27 $6,828,969 $803,408 $401,704 $8,034,082
Total $48,901,276 $5,753,091 $2,876,546 $57,530,913
*Fiscal year 2018 only covers a 6 month period (January – June). The estimate for the first year of operation of the district is $4,130,000 which translates to approximately $344,166.67 per month. The subsequent years in the table above use the $4,130,000 figure as a base number for all calculations.

C. California Constitutional Compliance
The SMTMD assessment is not a property-based assessment subject to the requirements of Proposition 218. The Court has found, “Proposition 218 limited the term ‘assessments’ to levies on real property.”1 Rather, the SMTMD assessment is a business-based assessment, and is subject to Proposition 26. Pursuant to Proposition 26 all levies are a tax unless they fit one of seven exceptions.

Two of these exceptions apply to the SMTMD, a “specific benefit” and a “specific government service.” Both require that the costs of benefits or services do not exceed the reasonable costs to the City of conferring the benefits or providing the services. 1 Jarvis v. the City of San Diego 72 Cal App. 4th 230

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1. Specific Benefit
Proposition 26 requires that assessment funds be expended on, “a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege.”2 The services in this Plan are designed to provide targeted benefits directly to assessed lodging businesses, and are intended only to provide benefits and services directly to those businesses paying the assessment. These services are tailored not to serve the general public, businesses in general, or parcels of land, but rather to serve the specific lodging businesses within the District. The activities described in this Plan are specifically targeted to increase room night sales for assessed lodging businesses within the boundaries of the District, and are narrowly tailored. SMTMD funds will be used exclusively to provide the specific benefit of increased room night sales directly to the assessees. Assessment funds shall not be used to feature non-assessed lodging businesses in SMTMD programs, or to directly generate sales for non-assessed businesses. The activities paid for from assessment revenues are business services constituting and providing specific benefits to the assessed businesses.

The assessment imposed by this District is for a specific benefit conferred directly to the payors that is not provided to those not charged. The specific benefit conferred directly to the payors is an increase in room night sales. The specific benefit of an increase in room night sales for assessed lodging businesses will be provided only to lodging businesses paying the district assessment, with marketing and sales programs promoting lodging businesses paying the district assessment. The marketing and sales programs will be designed to increase room night sales at each assessed lodging businesses. Because they are necessary to provide the marketing and sales programs that specifically benefit the assessed lodging businesses, the administration and contingency services also provide the specific benefit of increased room night sales to the assessed lodging businesses.

Although the District, in providing specific benefits to payors, may produce incidental benefits to non-paying businesses, the incidental benefit does not preclude the services from being considered a specific benefit. The legislature has found that, “A specific benefit is not excluded from classification as a ‘specific benefit’ merely because an indirect benefit to a nonpayor occurs incidentally and without cost to the payor as a consequence of providing the specific benefit to the payor.”3

2. Specific Government Service
The assessment may also be utilized to provide, “a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product.”4 The legislature has recognized that marketing and promotions services like those to be provided by the SMTMD are government services within the meaning of Proposition 265. Destination marketing services are frequently funded and provided by local governments. In the case of the SMTMD, the district is formed and services are overseen by the Santa Monica City Council. Further, the legislature has determined that “a specific government service is not excluded from classification as a ‘specific government service’ merely because an indirect benefit to a nonpayor occurs incidentally and without cost to the payor as a consequence of providing the specific government service to the payor.”6 2 Cal. Const. art XIII C § 1(e)(1)
3 Government Code § 53758(a)
4 Cal. Const. art XIII C § 1(e)(2)
5 Government Code § 53758(b)
6 Government Code § 53758(b)

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3. Reasonable Cost
District services will be implemented carefully to ensure they do not exceed the reasonable cost of such services. The full amount assessed will be used to provide the services described herein. Funds will be managed by SMTT, and reports submitted on an annual basis to the City. Only assessed lodging businesses will be featured in marketing materials, receive sales leads generated from districtfunded activities, be featured in advertising campaigns, and benefit from other district-funded services.

Non-assessed lodging businesses will not receive these, nor any other, district-funded services and benefits.

The District-funded programs are all targeted directly at and feature only assessed businesses. It is, however, possible that there will be a spill over benefit to non-assessed businesses. If non-assessed lodging businesses receive incremental room nights, that portion of the promotion or program generating those room nights shall be paid with non-District funds. SMTMD funds shall only be spent to benefit the assessed businesses, and shall not be spent on that portion of any program which directly generates incidental room nights for non-assessed businesses.

4. Benefit to NonPayors
The specific benefits provided by the SMTMD will only be directly provided to the assessed businesses; they will not be directly provided to non-assessed businesses. Possible indirect benefit does not preclude the SMTMD services from being considered a specific benefit. The legislature has directly indicated, in the context of tourism marketing districts, that services are not precluded from classification as a specific benefit merely because an indirect benefit to a nonpayor occurs as a consequence of providing the service and without cost to the payor.7 Although the legislature does not require the cost of any incidental benefit to non-payors be separated from the assessment, out of an abundance of caution a study was conducted on benefit generated by the SMTMD programs. The study is attached as Appendix 3. The study found that 6.6% of marketing programs generate incidental room night sales at non-assessed lodging businesses. Although it is not required, the portion of programs that generate this benefit will be paid for with non-assessment funds. Assessment funds will only fund that portion of the programs (93.4%) which represents a specific benefit to the assessed businesses. For example, if a program costs $100,000 total, the SMTMD will fund $93,400 and the remaining $6,600 will be sourced from non-assessment funds.

The amount of the assessment is no more than necessary to cover the reasonable costs of the proposed activities, and the manner in which the costs are allocated to a business owner bear a fair share or reasonable relationship to the businesses’ benefits received from the proposed activities. The benefit study in Appendix 3 found that the benefits provided by the SMTMD do not exceed the reasonable cost.

The programs provided with District funding receive additional non-assessment funding in the form of grants, corporate sponsorships, event income, transient occupancy tax, and other funds. These funding sources shall be equal to or exceed the amount of benefit conferred to non-payors annually by the District’s services. These non-assessment funds will be used to pay for the benefit to nonpayors provided by the proposed services, ensuring that assessments will only be used to provide benefits to assessed businesses.
7 AB 483 Ting (2014)

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D. Assessment
The assessment is a fixed amount per occupied room per night. The assessment is based on the businesses’ average daily rate, based on the previous year’s performance. Average daily rate figures shall be updated annually. Based on the benefit received, assessments will not be collected on: stays of more than thirty (30) consecutive days; and stays paid by any Federal, State of California, or City of Santa Monica, official or employee when on official business provided that an exempt certificate is executed at the time of registration. Lodging businesses with an average daily rate less than $100 will not be included in the district or assessed. Assessment rates are:

Tier Average Daily Rate Assessment Per Occupied Room Per Night 1 $300 and above $5.25
2 $200 - $299.99 $4.25
3 $100 -$199.99 $1.50
Assessment rates may be subject to an annual increase of no more than twenty-five cents ($0.25) per year for Tier 1 and Tier 2 lodging businesses and no more than ten cent ($0.10) per year for Tier 3 lodging businesses. The table below demonstrates the maximum with the assumption that the rates will be increased by the maximum amount for each category in each year of the SMTMD’s nine and one-half (9.5) year term, as it is a required disclosure, it is not the anticipated course of action. The maximum assessment rate for each category is:

FY $100 - $199.99 $200 - $299.99 $300 and Above
2018* $1.50 $4.25 $5.25
2018-19 $1.60 $4.50 $5.50
2019-20 $1.70 $4.75 $5.75
2020-21 $1.80 $5.00 $6.00
2021-22 $1.90 $5.25 $6.25
2022-23 $2.00 $5.50 $6.50
2023-24 $2.10 $5.75 $6.75
2024-25 $2.20 $6.00 $7.00
2025-26 $2.30 $6.25 $7.25
2026-27 $2.40 $6.50 $7.50
*Fiscal year 2018 only covers a 6 month period (January – June).

The assessment is levied upon and a direct obligation of the assessed lodging business. However, the assessed lodging business may, at its discretion, pass the assessment on to transients. The amount of assessment, if passed on to each transient, shall be disclosed in advance and separately stated from the amount of rent charged and any other applicable taxes, and each transient shall receive a receipt for payment from the business. The assessment shall be disclosed as the “TMD Assessment.” The assessment is imposed solely upon, and is the sole obligation of the assessed lodging business even if it is passed on to transients. The assessment shall not be considered revenue for any purposes, including calculation of transient occupancy taxes.

Bonds shall not be issued.

E. Penalties and Interest
If any business shall fail or refuse to remit to the City the assessment due on or before the last day of the month in which the assessment becomes due, there shall be added to the assessment a penalty of ten percent (10%) of the amount of the assessment. If the assessment remains delinquent and

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unpaid thereafter for a period of thirty (30) days, there shall be an additional penalty of ten percent (10%).

F. Time and Manner for Collecting Assessments
The SMTMD assessment will be implemented beginning January 1, 2018 and will continue for nine and one-half (9.5) years through June 30, 2027. The City will be responsible for collecting the assessment on a monthly basis (including any delinquencies, penalties and interest) from each lodging with an average daily rate of $100 or more. The City shall take all reasonable efforts to collect the assessments from each lodging business. The City shall forward the assessments collected to the Owners’ Association.

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VI. GOVERNANCE
A. Owners’ Association
The City Council, through adoption of this Management District Plan, has the right, pursuant to Streets and Highways Code §36651, to identify the body that shall implement the proposed program, which shall be the Owners’ Association of the SMTMD as defined in Streets and Highways Code §366612. The City Council has determined that Santa Monica Travel & Tourism will serve as the Owners’ Association for the SMTMD.

The SMTT standing advisory committee, known as the “TMD Hotel Committee” shall continue to be responsible for making recommendations to the SMTT Board regarding SMTMD funds and programs. The TMD Hotel Committee shall have between four (4) and nine (9) members, of which at least four (4) will be representatives of assessed lodging businesses.

Annually, SMTT shall hold a joint SMTT board and TMD Hotel Committee meeting which will be open to the public. The purpose of the annual meeting will be mutual approval of the budget and programs for SMTMD funds for the upcoming fiscal year.

B. Brown Act and California Public Records Act Compliance An Owners’ Association is a private entity and may not be considered a public entity for any purpose, nor may its board members or staff be considered to be public officials for any purpose. The Owners’ Association is, however, subject to government regulations relating to transparency, namely the Ralph M. Brown Act and the California Public Records Act. These regulations are designed to promote public accountability. The Owners’ Association acts as a legislative body under the Ralph M. Brown Act (Government Code §54950 et seq.). Thus, meetings of the SMTT board and certain committees must be held in compliance with the public notice and other requirements of the Brown Act. The Owners’ Association is also subject to the record keeping and disclosure requirements of the California Public Records Act. Accordingly, the Owners’ Association shall publicly report any action taken and the vote or abstention on that action of each member present for the action.

C. Annual Report
SMTT shall present an annual report at the end of each year of operation to the City Council pursuant to Streets and Highways Code §36650 (see Appendix 1). The annual report shall include:
x Any proposed changes in the boundaries of the improvement district or in any benefit zones or classification of businesses within the district.
x The improvements and activities to be provided for that fiscal year. x An estimate of the cost of providing the improvements and the activities for that fiscal year. x The method and basis of levying the assessment in sufficient detail to allow each business owner to estimate the amount of the assessment to be levied against his or her business for that fiscal year.
x The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal year.
x The estimated amount of any contributions to be made from sources other than assessments levied pursuant to this part.

D. Milestone Report
SMTT shall prepare a five-year Milestone Report, which will be due in May 2022 prior to the City’s approval of the annual report for Fiscal Year 2022-2023. The Milestone Report shall be submitted to

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the City and all assessed businesses. It shall include all information required in the annual report, as well as historical program and performance data, including key performance indicators for lodging businesses such as average daily rate, revenue per available room, and occupancy rates. The Milestone Report may serve as the annual report for Fiscal Year 2022-2023. If lodging businesses are not satisfied with the results of the Milestone Report, they may petition the City to disestablish the District pursuant to Streets and Highways Code section 36650.

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APPENDIX 1 – LAW

STREETS AND HIGHWAYS CODE
Division 18. Parking
Part 7. Property and Business Improvement District Law of 1994 Cal Sts & Hy Code Div. 18, Pt. 7 Note (2015)
*** This document is current through the 2015 Supplement *** (All 2014 legislation)
36600. Citation of part
This part shall be known and may be cited as the “Property and Business Improvement District Law of 1994.” 36601. Legislative findings and declarations
The Legislature finds and declares all of the following:
(a) Businesses located and operating within business districts in some of this state’s communities are economically disadvantaged, are underutilized, and are unable to attract customers due to inadequate facilities, services, and activities in the business districts.
(b) It is in the public interest to promote the economic revitalization and physical maintenance of business districts in order to create jobs, attract new businesses, and prevent the erosion of the business districts. (c) It is of particular local benefit to allow business districts to fund business related improvements, maintenance, and activities through the levy of assessments upon the businesses or real property that receive benefits from those improvements.
(d) Assessments levied for the purpose of conferring special benefit upon the real property or businesses in a business district are not taxes for the general benefit of a city, even if property or persons not assessed receive incidental or collateral effects that benefit them.
(e) Property and business improvement districts formed throughout this state have conferred special benefits upon properties and businesses within their districts and have made those properties and businesses more useful by providing the following benefits:
(1) Crime reduction. A study by the Rand Corporation has confirmed a 12-percent reduction in the incidence of robbery and an 8-percent reduction in the total incidence of violent crimes within the 30 districts studied.
(2) Job creation.
(3) Business attraction.
(4) Business retention.
(5) Economic growth.
(6) New investments.
(f) With the dissolution of redevelopment agencies throughout the state, property and business improvement districts have become even more important tools with which communities can combat blight, promote economic opportunities, and create a clean and safe environment. (g) Since the enactment of this act, the people of California have adopted Proposition 218, which added Article XIII D to the Constitution in order to place certain requirements and restrictions on the formation of, and activities, expenditures, and assessments by property-based districts. Article XIII D of the Constitution provides that propertybased districts may only levy assessments for special benefits. (h) The act amending this section is intended to provide the Legislature’s guidance with regard to this act, its interaction with the provisions of Article XIII D of the Constitution, and the determination of special benefits in property-based districts.
(1) The lack of legislative guidance has resulted in uncertainty and inconsistent application of this act, which discourages the use of assessments to fund needed improvements, maintenance, and activities in propertybased districts, contributing to blight and other underutilization of property. (2) Activities undertaken for the purpose of conferring special benefits upon property to be assessed inherently produce incidental or collateral effects that benefit property or persons not assessed. Therefore, for special

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benefits to exist as a separate and distinct category from general benefits, the incidental or collateral effects of those special benefits are inherently part of those special benefits. The mere fact that special benefits produce incidental or collateral effects that benefit property or persons not assessed does not convert any portion of those special benefits or their incidental or collateral effects into general benefits. (3) It is of the utmost importance that property-based districts created under this act have clarity regarding restrictions on assessments they may levy and the proper determination of special benefits. Legislative clarity with regard to this act will provide districts with clear instructions and courts with legislative intent regarding restrictions on property-based assessments, and the manner in which special benefits should be determined. 36602. Purpose of part
The purpose of this part is to supplement previously enacted provisions of law that authorize cities to levy assessments within property and business improvement districts, to ensure that those assessments conform to all constitutional requirements and are determined and assessed in accordance with the guidance set forth in this act.

This part does not affect or limit any other provisions of law authorizing or providing for the furnishing of improvements or activities or the raising of revenue for these purposes. 36603. Preemption of authority or charter city to adopt ordinances levying assessments Nothing in this part is intended to preempt the authority of a charter city to adopt ordinances providing for a different method of levying assessments for similar or additional purposes from those set forth in this part. A property and business improvement district created pursuant to this part is expressly exempt from the provisions of the Special Assessment Investigation, Limitation and Majority Protest Act of 1931 (Division 4 (commencing with Section 2800)).
36603.5. Part prevails over conflicting provisions
Any provision of this part that conflicts with any other provision of law shall prevail over the other provision of law, as to districts created under this part.
36604. Severability
This part is intended to be construed liberally and, if any provision is held invalid, the remaining provisions shall remain in full force and effect. Assessments levied under this part are not special taxes. 36606. “Activities”
“Activities” means, but is not limited to, all of the following that benefit businesses or real property in the district:
(a) Promotion of public events.
(b) Furnishing of music in any public place.
(c) Promotion of tourism within the district.
(d) Marketing and economic development, including retail retention and recruitment. (e) Providing security, sanitation, graffiti removal, street and sidewalk cleaning, and other municipal services supplemental to those normally provided by the municipality. (f) Other services provided for the purpose of conferring special benefit upon assessed businesses and real property located in the district.
36606.5. “Assessment”
“Assessment” means a levy for the purpose of acquiring, constructing, installing, or maintaining improvements and providing activities that will provide certain benefits to properties or businesses located within a property and business improvement district.
36607. “Business”

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“Business” means all types of businesses and includes financial institutions and professions. 36608. “City”
“City” means a city, county, city and county, or an agency or entity created pursuant to Article 1 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code, the public member agencies of which includes only cities, counties, or a city and county, or the State of California. 36609. “City council”
“City council” means the city council of a city or the board of supervisors of a county, or the agency, commission, or board created pursuant to a joint powers agreement and which is a city within the meaning of this part. 36609.4. “Clerk”
“Clerk” means the clerk of the legislative body.
36609.5. “General benefit”
“General benefit” means, for purposes of a property-based district, any benefit that is not a “special benefit” as defined in Section 36615.5.
36610. “Improvement”
“Improvement” means the acquisition, construction, installation, or maintenance of any tangible property with an estimated useful life of five years or more including, but not limited to, the following:
(a) Parking facilities.
(b) Benches, booths, kiosks, display cases, pedestrian shelters and signs. (c) Trash receptacles and public restrooms.
(d) Lighting and heating facilities.
(e) Decorations.
(f) Parks.
(g) Fountains.
(h) Planting areas.
(i) Closing, opening, widening, or narrowing of existing streets. (j) Facilities or equipment, or both, to enhance security of persons and property within the area. (k) Ramps, sidewalks, plazas, and pedestrian malls.
(l) Rehabilitation or removal of existing structures.
36611. “Management district plan”; “Plan”
“Management district plan” or “plan” means a proposal as defined in Section 36622. 36612. “Owners’ Association”
“Owners’ association” means a private nonprofit entity that is under contract with a city to administer or implement improvements, maintenance, and activities specified in the management district plan. An owners’ association may be an existing nonprofit entity or a newly formed nonprofit entity. An owners’ association is a private entity and may not be considered a public entity for any purpose, nor may its board members or staff be considered to be public officials for any purpose. Notwithstanding this section, an owners’ association shall comply with the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5 of the Government Code), at all times when matters within the subject matter of the district are heard, discussed, or deliberated, and with the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code), for all records relating to activities of the district.

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36614. “Property”
“Property” means real property situated within a district. 36614.5. “Property and business improvement district”; “District” “Property and business improvement district,” or “district,” means a property and business improvement district established pursuant to this part.
36614.6. “Property-based assessment”
“Property-based assessment” means any assessment made pursuant to this part upon real property. 36614.7. “Property-based district”
“Property-based district” means any district in which a city levies a property-based assessment. 36615. “Property owner”; “Business owner”; “Owner”
“Property owner” means any person shown as the owner of land on the last equalized assessment roll or otherwise known to be the owner of land by the city council. “Business owner” means any person recognized by the city as the owner of the business. “Owner” means either a business owner or a property owner. The city council has no obligation to obtain other information as to the ownership of land or businesses, and its determination of ownership shall be final and conclusive for the purposes of this part. Wherever this part requires the signature of the property owner, the signature of the authorized agent of the property owner shall be sufficient. Wherever this part requires the signature of the business owner, the signature of the authorized agent of the business owner shall be sufficient. 36615.5. “Special benefit”
“Special benefit” means, for purposes of a property-based district, a particular and distinct benefit over and above general benefits conferred on real property located in a district or to the public at large. Special benefit includes incidental or collateral effects that arise from the improvements, maintenance, or activities of property-based districts even if those incidental or collateral effects benefit property or persons not assessed. Special benefit excludes general enhancement of property value.
36616. “Tenant”
“Tenant” means an occupant pursuant to a lease of commercial space or a dwelling unit, other than an owner. 36617. Alternative method of financing certain improvements and activities; Effect on other provisions This part provides an alternative method of financing certain improvements and activities. The provisions of this part shall not affect or limit any other provisions of law authorizing or providing for the furnishing of improvements or activities or the raising of revenue for these purposes. Every improvement area established pursuant to the Parking and Business Improvement Area Law of 1989 (Part 6 (commencing with Section 36500) of this division) is valid and effective and is unaffected by this part.
36620. Establishment of property and business improvement district A property and business improvement district may be established as provided in this chapter. 36620.5. Requirement of consent of city council

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A county may not form a district within the territorial jurisdiction of a city without the consent of the city council of that city. A city may not form a district within the unincorporated territory of a county without the consent of the board of supervisors of that county. A city may not form a district within the territorial jurisdiction of another city without the consent of the city council of the other city. 36621. Initiation of proceedings; Petition of property or business owners in proposed district (a) Upon the submission of a written petition, signed by the property or business owners in the proposed district who will pay more than 50 percent of the assessments proposed to be levied, the city council may initiate proceedings to form a district by the adoption of a resolution expressing its intention to form a district. The amount of assessment attributable to property or a business owned by the same property or business owner that is in excess of 40 percent of the amount of all assessments proposed to be levied, shall not be included in determining whether the petition is signed by property or business owners who will pay more than 50 percent of the total amount of assessments proposed to be levied.
(b) The petition of property or business owners required under subdivision (a) shall include a summary of the management district plan. That summary shall include all of the following:
(1) A map showing the boundaries of the district.
(2) Information specifying where the complete management district plan can be obtained. (3) Information specifying that the complete management district plan shall be furnished upon request. (c) The resolution of intention described in subdivision (a) shall contain all of the following:
(1) A brief description of the proposed improvements, maintenance, and activities, the amount of the proposed assessment, a statement as to whether the assessment will be levied on property or businesses within the district, a statement as to whether bonds will be issued, and a description of the exterior boundaries of the proposed district, which may be made by reference to any plan or map that is on file with the clerk. The descriptions and statements do not need to be detailed and shall be sufficient if they enable an owner to generally identify the nature and extent of the improvements, maintenance, and activities, and the location and extent of the proposed district. (2) A time and place for a public hearing on the establishment of the property and business improvement district and the levy of assessments, which shall be consistent with the requirements of Section 36623. 36622. Contents of management district plan
The management district plan shall include, but is not limited to, all of the following:
(a) If the assessment will be levied on property, a map of the district in sufficient detail to locate each parcel of property and, if businesses are to be assessed, each business within the district. If the assessment will be levied on businesses, a map that identifies the district boundaries in sufficient detail to allow a business owner to reasonably determine whether a business is located within the district boundaries. If the assessment will be levied on property and businesses, a map of the district in sufficient detail to locate each parcel of property and to allow a business owner to reasonably determine whether a business is located within the district boundaries. (b) The name of the proposed district.
(c) A description of the boundaries of the district, including the boundaries of benefit zones, proposed for establishment or extension in a manner sufficient to identify the affected property and businesses included, which may be made by reference to any plan or map that is on file with the clerk. The boundaries of a proposed property assessment district shall not overlap with the boundaries of another existing property assessment district created pursuant to this part. This part does not prohibit the boundaries of a district created pursuant to this part to overlap with other assessment districts established pursuant to other provisions of law, including, but not limited to, the Parking and Business Improvement Area Law of 1989 (Part 6 (commencing with Section 36500)). This part does not prohibit the boundaries of a business assessment district created pursuant to this part to overlap with another business assessment district created pursuant to this part. This part does not prohibit the boundaries of a business assessment district created pursuant to this part to overlap with a property assessment district created pursuant to this part.
(d) The improvements, maintenance, and activities proposed for each year of operation of the district and the maximum cost thereof. If the improvements, maintenance, and activities proposed for each year of operation are the same, a description of the first year’s proposed improvements, maintenance, and activities and a statement that the same improvements, maintenance, and activities are proposed for subsequent years shall satisfy the requirements of this subdivision.
(e) The total annual amount proposed to be expended for improvements, maintenance, or activities, and debt service in each year of operation of the district. If the assessment is levied on businesses, this amount may be estimated

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based upon the assessment rate. If the total annual amount proposed to be expended in each year of operation of the district is not significantly different, the amount proposed to be expended in the initial year and a statement that a similar amount applies to subsequent years shall satisfy the requirements of this subdivision. (f) The proposed source or sources of financing, including the proposed method and basis of levying the assessment in sufficient detail to allow each property or business owner to calculate the amount of the assessment to be levied against his or her property or business. The plan also shall state whether bonds will be issued to finance improvements.
(g) The time and manner of collecting the assessments.
(h) The specific number of years in which assessments will be levied. In a new district, the maximum number of years shall be five. Upon renewal, a district shall have a term not to exceed 10 years. Notwithstanding these limitations, a district created pursuant to this part to finance capital improvements with bonds may levy assessments until the maximum maturity of the bonds. The management district plan may set forth specific increases in assessments for each year of operation of the district. (i) The proposed time for implementation and completion of the management district plan. (j) Any proposed rules and regulations to be applicable to the district. (k) (1) A list of the properties or businesses to be assessed, including the assessor’s parcel numbers for properties to be assessed, and a statement of the method or methods by which the expenses of a district will be imposed upon benefited real property or businesses, in proportion to the benefit received by the property or business, to defray the cost thereof.
(2) In a property-based district, the proportionate special benefit derived by each identified parcel shall be determined exclusively in relationship to the entirety of the capital cost of a public improvement, the maintenance and operation expenses of a public improvement, or the cost of the activities. An assessment shall not be imposed on any parcel that exceeds the reasonable cost of the proportional special benefit conferred on that parcel. Only special benefits are assessable, and a property-based district shall separate the general benefits, if any, from the special benefits conferred on a parcel. Parcels within a property-based district that are owned or used by any city, public agency, the State of California, or the United States shall not be exempt from assessment unless the governmental entity can demonstrate by clear and convincing evidence that those publicly owned parcels in fact receive no special benefit. The value of any incidental, secondary, or collateral effects that arise from the improvements, maintenance, or activities of a property-based district and that benefit property or persons not assessed shall not be deducted from the entirety of the cost of any special benefit or affect the proportionate special benefit derived by each identified parcel.
(l) In a property-based district, the total amount of all special benefits to be conferred upon the properties located within the property-based district.
(m) In a property-based district, the total amount of general benefits, if any. (n) In a property-based district, a detailed engineer’s report prepared by a registered professional engineer certified by the State of California supporting all assessments contemplated by the management district plan. (o) Any other item or matter required to be incorporated therein by the city council. 36623. Procedure to levy assessment
(a) If a city council proposes to levy a new or increased property assessment, the notice and protest and hearing procedure shall comply with Section 53753 of the Government Code. (b) If a city council proposes to levy a new or increased business assessment, the notice and protest and hearing procedure shall comply with Section 54954.6 of the Government Code, except that notice shall be mailed to the owners of the businesses proposed to be assessed. A protest may be made orally or in writing by any interested person. Every written protest shall be filed with the clerk at or before the time fixed for the public hearing. The city council may waive any irregularity in the form or content of any written protest. A written protest may be withdrawn in writing at any time before the conclusion of the public hearing. Each written protest shall contain a description of the business in which the person subscribing the protest is interested sufficient to identify the business and, if a person subscribing is not shown on the official records of the city as the owner of the business, the protest shall contain or be accompanied by written evidence that the person subscribing is the owner of the business or the authorized representative. A written protest that does not comply with this section shall not be counted in determining a majority protest. If written protests are received from the owners or authorized representatives of businesses in the proposed district that will pay 50 percent or more of the assessments proposed to be levied and protests are not withdrawn so as to reduce the protests to less than 50 percent, no further proceedings to levy the proposed assessment against such businesses, as contained in the resolution of intention, shall be taken for a period of one year from the date of the finding of a majority protest by the city council.

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(c) If a city council proposes to conduct a single proceeding to levy both a new or increased property assessment and a new or increased business assessment, the notice and protest and hearing procedure for the property assessment shall comply with subdivision (a), and the notice and protest and hearing procedure for the business assessment shall comply with subdivision (b). If a majority protest is received from either the property or business owners, that respective portion of the assessment shall not be levied. The remaining portion of the assessment may be levied unless the improvement or other special benefit was proposed to be funded by assessing both property and business owners.
36624. Changes to proposed assessments
At the conclusion of the public hearing to establish the district, the city council may adopt, revise, change, reduce, or modify the proposed assessment or the type or types of improvements, maintenance, and activities to be funded with the revenues from the assessments. Proposed assessments may only be revised by reducing any or all of them. At the public hearing, the city council may only make changes in, to, or from the boundaries of the proposed property and business improvement district that will exclude territory that will not benefit from the proposed improvements, maintenance, and activities. Any modifications, revisions, reductions, or changes to the proposed assessment district shall be reflected in the notice and map recorded pursuant to Section 36627. 36625. Resolution of formation
(a) If the city council, following the public hearing, decides to establish a proposed property and business improvement district, the city council shall adopt a resolution of formation that shall include, but is not limited to, all of the following:
(1) A brief description of the proposed improvements, maintenance, and activities, the amount of the proposed assessment, a statement as to whether the assessment will be levied on property, businesses, or both within the district, a statement on whether bonds will be issued, and a description of the exterior boundaries of the proposed district, which may be made by reference to any plan or map that is on file with the clerk. The descriptions and statements need not be detailed and shall be sufficient if they enable an owner to generally identify the nature and extent of the improvements, maintenance, and activities and the location and extent of the proposed district. (2) The number, date of adoption, and title of the resolution of intention. (3) The time and place where the public hearing was held concerning the establishment of the district. (4) A determination regarding any protests received. The city shall not establish the district or levy assessments if a majority protest was received.
(5) A statement that the properties, businesses, or properties and businesses in the district established by the resolution shall be subject to any amendments to this part. (6) A statement that the improvements, maintenance, and activities to be conferred on businesses and properties in the district will be funded by the levy of the assessments. The revenue from the levy of assessments within a district shall not be used to provide improvements, maintenance, or activities outside the district or for any purpose other than the purposes specified in the resolution of intention, as modified by the city council at the hearing concerning establishment of the district.
(7) A finding that the property or businesses within the area of the property and business improvement district will be benefited by the improvements, maintenance, and activities funded by the proposed assessments, and, for a property-based district, that property within the district will receive a special benefit. (8) In a property-based district, the total amount of all special benefits to be conferred on the properties within the property-based district.
(b) The adoption of the resolution of formation and, if required, recordation of the notice and map pursuant to Section 36627 shall constitute the levy of an assessment in each of the fiscal years referred to in the management district plan.
36626. Resolution establishing district
If the city council, following the public hearing, desires to establish the proposed property and business improvement district, and the city council has not made changes pursuant to Section 36624, or has made changes that do not substantially change the proposed assessment, the city council shall adopt a resolution establishing the district. The resolution shall contain all of the information specified in Section 36625. 36627. Notice and assessment diagram

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Following adoption of the resolution establishing district assessments on properties pursuant to Section 36625 or Section 36626, the clerk of the city shall record a notice and an assessment diagram pursuant to Section 3114. No other provision of Division 4.5 (commencing with Section 3100) applies to an assessment district created pursuant to this part.
36628. Establishment of separate benefit zones within district; Categories of businesses The city council may establish one or more separate benefit zones within the district based upon the degree of benefit derived from the improvements or activities to be provided within the benefit zone and may impose a different assessment within each benefit zone. If the assessment is to be levied on businesses, the city council may also define categories of businesses based upon the degree of benefit that each will derive from the improvements or activities to be provided within the district and may impose a different assessment or rate of assessment on each category of business, or on each category of business within each zone. 36628.5. Assessments on businesses or property owners
The city council may levy assessments on businesses or on property owners, or a combination of the two, pursuant to this part. The city council shall structure the assessments in whatever manner it determines corresponds with the distribution of benefits from the proposed improvements, maintenance, and activities, provided that any propertybased assessment conforms with the requirements set forth in paragraph (2) of subdivision (k) of Section 36622. 36629. Provisions and procedures applicable to benefit zones and business categories All provisions of this part applicable to the establishment, modification, or disestablishment of a property and business improvement district apply to the establishment, modification, or disestablishment of benefit zones or categories of business. The city council shall, to establish, modify, or disestablish a benefit zone or category of business, follow the procedure to establish, modify, or disestablish a property and business improvement district. 36630. Expiration of district; Creation of new district If a property and business improvement district expires due to the time limit set pursuant to subdivision (h) of Section 36622, a new management district plan may be created and the district may be renewed pursuant to this part. 36631. Time and manner of collection of assessment; Delinquent payments The collection of the assessments levied pursuant to this part shall be made at the time and in the manner set forth by the city council in the resolution levying the assessment. Assessments levied on real property may be collected at the same time and in the same manner as for the ad valorem property tax, and may provide for the same lien priority and penalties for delinquent payment. All delinquent payments for assessments levied pursuant to this part may be charged interest and penalties.
36632. Assessments to be based on estimated benefit; Classification of real property and businesses; Exclusion of residential and agricultural property
(a) The assessments levied on real property pursuant to this part shall be levied on the basis of the estimated benefit to the real property within the property and business improvement district. The city council may classify properties for purposes of determining the benefit to property of the improvements and activities provided pursuant to this part. (b) Assessments levied on businesses pursuant to this part shall be levied on the basis of the estimated benefit to the businesses within the property and business improvement district. The city council may classify businesses for purposes of determining the benefit to the businesses of the improvements and activities provided pursuant to this part.
(c) Properties zoned solely for residential use, or that are zoned for agricultural use, are conclusively presumed not to benefit from the improvements and service funded through these assessments, and shall not be subject to any assessment pursuant to this part.

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36633. Time for contesting validity of assessment
The validity of an assessment levied under this part shall not be contested in any action or proceeding unless the action or proceeding is commenced within 30 days after the resolution levying the assessment is adopted pursuant to Section 36626. Any appeal from a final judgment in an action or proceeding shall be perfected within 30 days after the entry of judgment.
36634. Service contracts authorized to establish levels of city services The city council may execute baseline service contracts that would establish levels of city services that would continue after a property and business improvement district has been formed. 36635. Request to modify management district plan
The owners’ association may, at any time, request that the city council modify the management district plan. Any modification of the management district plan shall be made pursuant to this chapter. 36636. Modification of plan by resolution after public hearing; Adoption of resolution of intention; Modification of improvements and activities by adoption of resolution after public hearing (a) Upon the written request of the owners’ association, the city council may modify the management district plan after conducting one public hearing on the proposed modifications. The city council may modify the improvements and activities to be funded with the revenue derived from the levy of the assessments by adopting a resolution determining to make the modifications after holding a public hearing on the proposed modifications. If the modification includes the levy of a new or increased assessment, the city council shall comply with Section 36623.

Notice of all other public hearings pursuant to this section shall comply with both of the following:
(1) The resolution of intention shall be published in a newspaper of general circulation in the city once at least seven days before the public hearing.
(2) A complete copy of the resolution of intention shall be mailed by first class mail, at least 10 days before the public hearing, to each business owner or property owner affected by the proposed modification. (b) The city council shall adopt a resolution of intention which states the proposed modification prior to the public hearing required by this section. The public hearing shall be held not more than 90 days after the adoption of the resolution of intention.
36637. Reflection of modification in notices recorded and maps Any subsequent modification of the resolution shall be reflected in subsequent notices and maps recorded pursuant to Division 4.5 (commencing with Section 3100), in a manner consistent with the provisions of Section 36627. 36640. Bonds authorized; Procedure; Restriction on reduction or termination of assessments (a) The city council may, by resolution, determine and declare that bonds shall be issued to finance the estimated cost of some or all of the proposed improvements described in the resolution of formation adopted pursuant to Section 36625, if the resolution of formation adopted pursuant to that section provides for the issuance of bonds, under the Improvement Bond Act of 1915 (Division 10 (commencing with Section 8500)) or in conjunction with Marks-Roos Local Bond Pooling Act of 1985 (Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code). Either act, as the case may be, shall govern the proceedings relating to the issuance of bonds, although proceedings under the Bond Act of 1915 may be modified by the city council as necessary to accommodate assessments levied upon business pursuant to this part. (b) The resolution adopted pursuant to subdivision (a) shall generally describe the proposed improvements specified in the resolution of formation adopted pursuant to Section 36625, set forth the estimated cost of those improvements, specify the number of annual installments and the fiscal years during which they are to be collected. The amount of debt service to retire the bonds shall not exceed the amount of revenue estimated to be raised from assessments over 30 years.

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(c) Notwithstanding any other provision of this part, assessments levied to pay the principal and interest on any bond issued pursuant to this section shall not be reduced or terminated if doing so would interfere with the timely retirement of the debt.
36650. Report by owners’ association; Approval or modification by city council (a) The owners’ association shall cause to be prepared a report for each fiscal year, except the first year, for which assessments are to be levied and collected to pay the costs of the improvements, maintenance, and activities described in the report. The owners’ association’s first report shall be due after the first year of operation of the district. The report may propose changes, including, but not limited to, the boundaries of the property and business improvement district or any benefit zones within the district, the basis and method of levying the assessments, and any changes in the classification of property, including any categories of business, if a classification is used. (b) The report shall be filed with the clerk and shall refer to the property and business improvement district by name, specify the fiscal year to which the report applies, and, with respect to that fiscal year, shall contain all of the following information:
(1) Any proposed changes in the boundaries of the property and business improvement district or in any benefit zones or classification of property or businesses within the district. (2) The improvements, maintenance, and activities to be provided for that fiscal year. (3) An estimate of the cost of providing the improvements, maintenance, and activities for that fiscal year. (4) The method and basis of levying the assessment in sufficient detail to allow each real property or business owner, as appropriate, to estimate the amount of the assessment to be levied against his or her property or business for that fiscal year.
(5) The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal year. (6) The estimated amount of any contributions to be made from sources other than assessments levied pursuant to this part.
(c) The city council may approve the report as filed by the owners’ association or may modify any particular contained in the report and approve it as modified. Any modification shall be made pursuant to Sections 36635 and 36636.

The city council shall not approve a change in the basis and method of levying assessments that would impair an authorized or executed contract to be paid from the revenues derived from the levy of assessments, including any commitment to pay principal and interest on any bonds issued on behalf of the district. 36651. Designation of owners’ association to provide improvements and activitites The management district plan may, but is not required to, state that an owners’ association will provide the improvements, maintenance, and activities described in the management district plan. If the management district plan designates an owners’ association, the city shall contract with the designated nonprofit corporation to provide services.
36660. Renewal of district; Transfer or refund of remaining revenues; District term limit (a) Any district previously established whose term has expired, or will expire, may be renewed by following the procedures for establishment as provided in this chapter. (b) Upon renewal, any remaining revenues derived from the levy of assessments, or any revenues derived from the sale of assets acquired with the revenues, shall be transferred to the renewed district. If the renewed district includes additional parcels or businesses not included in the prior district, the remaining revenues shall be spent to benefit only the parcels or businesses in the prior district. If the renewed district does not include parcels or businesses included in the prior district, the remaining revenues attributable to these parcels shall be refunded to the owners of these parcels or businesses.
(c) Upon renewal, a district shall have a term not to exceed 10 years, or, if the district is authorized to issue bonds, until the maximum maturity of those bonds. There is no requirement that the boundaries, assessments, improvements, or activities of a renewed district be the same as the original or prior district. 36670. Circumstances permitting disestablishment of district; Procedure

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(a) Any district established or extended pursuant to the provisions of this part, where there is no indebtedness, outstanding and unpaid, incurred to accomplish any of the purposes of the district, may be disestablished by resolution by the city council in either of the following circumstances:
(1) If the city council finds there has been misappropriation of funds, malfeasance, or a violation of law in connection with the management of the district, it shall notice a hearing on disestablishment. (2) During the operation of the district, there shall be a 30-day period each year in which assessees may request disestablishment of the district. The first such period shall begin one year after the date of establishment of the district and shall continue for 30 days. The next such 30-day period shall begin two years after the date of the establishment of the district. Each successive year of operation of the district shall have such a 30-day period. Upon the written petition of the owners or authorized representatives of real property or the owners or authorized representatives of businesses in the area who pay 50 percent or more of the assessments levied, the city council shall pass a resolution of intention to disestablish the district. The city council shall notice a hearing on disestablishment. (b) The city council shall adopt a resolution of intention to disestablish the district prior to the public hearing required by this section. The resolution shall state the reason for the disestablishment, shall state the time and place of the public hearing, and shall contain a proposal to dispose of any assets acquired with the revenues of the assessments levied within the property and business improvement district. The notice of the hearing on disestablishment required by this section shall be given by mail to the property owner of each parcel or to the owner of each business subject to assessment in the district, as appropriate. The city shall conduct the public hearing not less than 30 days after mailing the notice to the property or business owners. The public hearing shall be held not more than 60 days after the adoption of the resolution of intention. 36671. Refund of remaining revenues upon disestablishment or expiration without renewal of district; Calculation of refund; Use of outstanding revenue collected after disestab-lishment of district (a) Upon the disestablishment or expiration without renewal of a district, any remaining revenues, after all outstanding debts are paid, derived from the levy of assessments, or derived from the sale of assets acquired with the revenues, or from bond reserve or construction funds, shall be refunded to the owners of the property or businesses then located and operating within the district in which assessments were levied by applying the same method and basis that was used to calculate the assessments levied in the fiscal year in which the district is disestablished or expires. All outstanding assessment revenue collected after disestablishment shall be spent on improvements and activities specified in the management district plan.
(b) If the disestablishment occurs before an assessment is levied for the fiscal year, the method and basis that was used to calculate the assessments levied in the immediate prior fiscal year shall be used to calculate the amount of any refund.

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APPENDIX 2 – ASSESSED BUSINESSES

BUSINESS NAME BUSINESS MAILING ADDRESS
Bayside Hotel 2001 Ocean Avenue, Santa Monica, CA 90405 Best Western Plus Gateway Hotel
Santa Monica
1920 Santa Monica Boulevard, Santa Monica, CA
90404
Cal Mar Hotel Suites 220 California Avenue, Santa Monica, CA 90403 Comfort Inn Santa Monica-West Los
Angeles
2815 Santa Monica Boulevard, Santa Monica, CA
90404
Days Inn Santa Monica/Los Angeles 3007 Santa Monica Boulevard, Santa Monica, CA 90404
DoubleTree Suites by Hilton Hotel
Santa Monica
1707 Fourth Street, Santa Monica, CA 90401
Fairmont Miramar Hotel & Bungalows 101 Wilshire Boulevard, Santa Monica, CA 90401 Hotel Carmel 201 Broadway, Santa Monica, CA 90401
Hotel Cassa Del Mar 1910 Ocean Way, Santa Monica, CA 90405 Hotel Shangri-La at the Ocean 1301 Ocean Avenue, Santa Monica, CA 90401 Huntley Santa Monica Beach 1111 Second Street, Santa Monica, CA 90403 JW Marriott Santa Monica Le Merigot 1740 Ocean Avenue, Santa Monica, CA 90401 Le Meridien Delfina Santa Monica 530 Pico Boulevard, Santa Monica, CA 90405 Loews Santa Monica Beach Hotel 1700 Ocean Avenue, Santa Monica, CA 90401 Ocean Lodge Hotel Corporation 1667 Ocean Avenue, Santa Monica, CA 90401 Ocean Park Inn 2452 Lincoln Boulevard, Santa Monica, CA 90405 Ocean View Hotel 1447 Ocean Avenue, Santa Monica, CA 90401 Oceana Beach Club Hotel 11766 Wilshire Boulevard, Los Angeles, CA 90025 Palihouse Santa Monica 1001 Third Street, Santa Monica, CA 90403 Rest Haven Motel 815 Grant Street, Santa Monica, CA 90405 Santa Monica Motel 2102 Lincoln Boulevard, Santa Monica, CA 90405 Santa Monica Pico Travelodge 3102 Pico Boulevard, Santa Monica, CA 90405 Sea Shore Motel 2637 Main Street, Santa Monica, CA 90405 Seaview Hotel 1760 Ocean Avenue, Santa Monica, CA 90401 Shore Hotel 1515 Ocean Avenue, Santa Monica, CA 90401
Shutters on the Beach Hotel One Pico Boulevard, Santa Monica, CA 90405 The Ambrose Hotel 1255 20th Street, Santa Monica, CA 90404 The Cottage Santa Monica 2219 Ocean Avenue, Santa Monica, CA 90405 The Georgian Hotel 1415 Ocean Avenue, Santa Monica, CA 90401 The Hotel California 1670 Ocean Avenue, Santa Monica, CA 90401 Viceroy Santa Monica 1819 Ocean Avenue, Santa Monica, CA 90401 Wyndham Santa Monica – At The Pier 120 Colorado Avenue, Santa Monica, CA 90401

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APPENDIX 3 – BENEFIT STUDY

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SANTA MONICA TRAVEL & TOURISM

PROGRAMS AND SERVICES

TWO-YEAR OPERATING PLAN
July 1, 2023 – June 30, 2025

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Table of Contents
Executive Summary ...................................................................................................................1 One Plan, Two Funding Sources ...............................................................................................4 Funding Sources.......................................................................................................................6 Programs & Services ................................................................................................................8 Lane 1: Drive Balance Demand for the Destination ...............................................................11 Travel Trade – Domestic & International Markets...................................................................12 Santa Monica Meet .................................................................................................................18 Lane 2: Enhance the Brand and Steward the Destination Experience.................................20 Experience Management Plan (EMP).....................................................................................18 Brand Campaign .....................................................................................................................21 Paid Media ..............................................................................................................................21 Santa Monica City Shared Identity Project .............................................................................22 Content and Social Media.......................................................................................................22 SantaMonica.com ...................................................................................................................23 Santa Monica Restaurants......................................................................................................24 Media Relationships................................................................................................................24 Crisis Communications ...........................................................................................................25 Lane 3: Chambion the Value of Tourism................................................................................26 Board Engagement .................................................................................................................27 Community & Civic Relations..................................................................................................27 Santa MoniCARES..................................................................................................................28 Tourism Industry Leadership...................................................................................................29 I Am Santa Monica..................................................................................................................29 “I Am Your Destination” Program............................................................................................30 Lane 4: Strengthen Strategic Partnerships.............................................................................30 Strategic Partnerships.............................................................................................................31 Lane 5: Ensure Operational Excellence ..................................................................................32 Operational Excellence ...........................................................................................................32 Emergency Preparedness.......................................................................................................33 Destination Marketing Accreditation Program (DMAP)...........................................................33 Closing .......................................................................................................................................34

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1 Dear Santa Monica Community and Tourism Business Partners, On behalf of the entire Board of Directors and Santa Monica Travel & Tourism staff members, we welcome this next phase, feeling hopeful and optimistic as we present our operating plan for the next two fiscal years, covering July 1, 2023, through June 30, 2025. The public health emergency may soon be coming to an end in the United States, and the Biden administration believes we’ve come far enough to end the federal coronavirus (COVID-19) emergency. The order will expire on May 11, 2023. However, the COVID-19 pandemic is far from over, say doctors, epidemiologists and global health leaders. COVID-19 remains a global health emergency, the World Health Organization has stated, but also acknowledged the pandemic is at a “transition point.” The perception that the pandemic is over may come from the way people have largely returned to prepandemic life. “While the threat of this virus is still real, our preparedness and collective work have helped turn this once crisis emergency into a manageable situation,” California Health and Human Services Secretary Dr. Mark Ghaly said. Most restrictions have been lifted, and we continue learning to navigate. As many of you may know, the visitor origin to Santa Monica pre-pandemic was at a steady 50% from international markets. We are slowly seeing international travel pick back up and we are eagerly awaiting the full reopening of all international segments and direct flights into Los Angeles.

We’ve come a long way over the past three years and yet many of the effects of the economic crisis remain. Many in the tourism industry continue to face hiring challenges, including airlines who have been hit with a shortage of pilots and outdated technology; inflation; and diminished revenues reflecting a slow return to travel from several countries due to excessive U.S. visa wait times and backlogs of passport applications. These factors continue to impact our hotels, restaurants, attractions, retail establishments, city revenues and daily lives.

However, as we bounce back from this crisis, one thing is clear: we are not just recovering from the pandemic. In many ways, we’re all rebuilding and reimagining. In 2021, total travel spending in the United States grew to $886 billion from $680 billion in 2020 (2019 was $1.17 trillion), reflecting a significant rebound providing us the optimistic outlook.

As we continue to monitor and analyze travel sentiment research, there is hope, with only 12% of American travelers who said COVID-19 would greatly impact their travel in the next six months, the lowest level since March 2020, with 23% (down 7% from prior month) stating they will spend less keeping an eye on inflation. It will be vital to be responsive and nimble to local, regional and global market trends as we focus on the next two-year period as the rebuilding phase.

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2 More optimistically, in recent research, it is confirmed that travel is still a priority; luxury travel is here to stay; and travelers are starting to plan ahead again. Experiences reign supreme and responsible travel is no longer a niche. All of this is great news and will aid our full recovery in Santa Monica.

With a review of under-tapped opportunities and remaining pent-up demand, we will continue to extend our reach and presence in key domestic markets including New York, Chicago, California and border states, while increasing and/or re-engaging in our top international markets, including Australia/New Zealand, United Kingdom/Ireland, France, Germany, Canada and Mexico to ensure Santa Monica is well positioned to attract a balance and a wide range of visitors.

Tourism continues to be a critical source of jobs and revenue that contributes to a thriving and sustainable economy. Pre-pandemic, visitor spending was nearly $2 billion with Transient Occupancy Tax (TOT) generating over $58 million into the City of Santa Monica’s general fund, providing for essential city services, including police and fire, parks, libraries, education and road improvements.

To ensure a strong, resilient and vibrant Santa Monica, our internal work is just as important as our external efforts. Over the next two years, Santa Monica Travel & Tourism will continue to produce our economic impact study to help identify trends and facilitate and implement the Santa Monica Experience Management Plan (EMP) - a roadmap for the future which outlines nine strategies to optimize the Santa Monica experience for our residents and visitors through 2032 to preserve and enhance our quality of life. Each strategy will have a dedicated localized committee to ensure its implementation and progress stays on track.

This plan is a collaborative vision created with the support of the City of Santa Monica, along with business and community leadership. The EMP remains a priority as we rebuild the tourism industry and guide execution of those strategies for overall city-wide success.

We eagerly move forward with optimism but continue to reflect on the devastating impacts that come with a global disruption. Rebuilding our community will take investments, partnerships, innovation and collaboration by all to ensure our businesses are strong; jobs stay here; and muchneeded tourism revenues continue to support critical city services for our residents and our visitors.

We’ve been challenged like never before, yet, working together - and believing in our community and each other - will only help us succeed. Offering a vibrant, thriving and a safe destination experience for our residents and visitors is our shared priority.

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3 We will move forward with positivity, while keeping in mind the bigger picture is only achieved through a united effort, support of one another through daily tasks and empowering the community. Santa Monica has a lot of heart, and when we come together as one, we can’t be stopped.

In gratitude,
Misti Kerns
President/CEO
Santa Monica Travel & Tourism

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4 One Plan, Two Funding Sources
While Santa Monica Travel & Tourism is supported through two funding sources, the organization operates from one cohesive strategic plan. Our two-year rolling strategic plan will align with the strategies in the Santa Monica Experience Management Plan (EMP) that will provide a roadmap for destination success through 2032.

We continue to see growth in travel and tourism to Santa Monica as well as economic recovery from the challenges of the COVID-19 pandemic. We are cautiously optimistic, as we’ve had to remain nimble and conscious of the need to continually respond to shifts in the travel industry and the community. While the needs, programs and markets may have altered in response to emergent activity, our five strategic areas of focus or “lanes of work” remain:

1. Drive Balanced Demand for the Destination

2. Enhance the Brand and Steward the Destination Experience

3. Champion the Value of Tourism

4. Strengthen Strategic Partnerships and Relationships

5. Ensure Operational Excellence
This two-year work plan details our initiatives and programs according to the above strategic areas of focus. The following provides an overview of our funding sources and our expenditures aligned with our various departments. Further details on city-funded programs are outlined for reference.

Promoting the destination serves as a catalyst of economic development. Santa Monica Travel & Tourism’s purpose is to build, protect and promote Santa Monica’s brand and international reputation; attract decision makers and new investments; and help local businesses expand their global reach. Destination promotion helps sustain and create additional local jobs that spur economic growth in the city and improves the quality of life for Santa Monica residents.

When the Santa Monica Tourism Marketing District (TMD) was established in 2013, it was not meant to replace city funding. It was meant to demonstrate public-private partnership between the City of Santa Monica and the hotel community, facilitating a unique approach to increasing employment; taxes; and revenues and has proven successful.

There are hundreds of Santa Monica businesses (beyond our hotels) that directly benefit from a strong visitor base. City funding ensures the promotion of those local businesses and provides opportunities for them to reach and serve that visitor base. Small businesses are some of the most dependent on us, as they often are less equipped to gain high visibility and reach domestic and international visitors to stimulate visitor spending. This is more critical than ever as we rebuild from the economic downturn.

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5 City funding allows us to provide basic services to more than eight million visitors once they are in our community. It helps steer them to our businesses in each neighborhood; communicate local ordinances; and provide public safety tips to ensure they responsibly enjoy their Santa Monica experience; an area that will require further attention as visitation grows.

Having a base of city funding permits SMTT to utilize its Tourism Marketing District (TMD) funding to maintain a consistent presence in top-producing domestic and international markets, while beginning to establish brand awareness in additional markets including, but not limited to, Brazil, Mexico and Scandinavia.

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6 FUNDING SOURCES 2023-2024

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7 FUNDING SOURCES 2024-2025

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8 Programs and services utilizing city funding are outlined below by department:

Marketing
• Partner with Visit California and Brand USA to leverage professional meetings and events (PME) co-opportunities and further infiltrate the Meetings, Incentives, Conferences and Exhibitions (MICE) business, both domestically and internationally. • Research and Economic Impact Report – conducted quarterly and annually. • Continue community sponsorships based on past partnerships, such as ICE at Santa Monica; 4th of July Parade; Summer Soulstice; Buy Local’s Most Loved; Sister City Association; Santa Monica Police Activities League; Chrysalis; local youth music groups; and ‘Tis the Season.
• Implement, monitor and facilitate the execution of the Santa Monica Experience Management Plan (EMP).
• Perform traveler and resident outreach through local education and advertising campaigns promoting visitor centers; car-free messaging; sustainability; public safety; crisis communications (as needed); re-enforcing and sharing local ordinances; and economic impact research.
• Create free programs for local businesses and residents, such as Santa Monica Restaurant Week and I Wish I Had an Extra Bedroom campaign. • Provide a free Partner Portal that allows businesses to customize their business landing page on santamonica.com.
• Utilize search engine optimization (SEO) to drive organic traffic to santamonica.com. • Act as the central source of information to educate and advise visitors, travel and trade professionals and media about Santa Monica’s overall visitor experience. • Build awareness of Santa Monica as an attractive and unique travel destination. • Provide client services as needed for small meetings and conference groups, with materials to encourage attendance.
• Provide virtual and printed collateral pieces including, but not limited to, the official Santa Monica visitor guide, map and corporate planner publications. • Partner with the city to fully inventory and utilize its facilities when feasible. • Promptly answer all correspondence related to convention and visitors’ facilities in Santa Monica and disseminate information through correspondence, media publicity and personal contacts that favorably advertises advantages and opportunities. • Promote travel and tourism activities that will bring additional revenue to the city and local businesses.
• Host familiarization tours (FAMs) for leading domestic and international travel industry journalists, editors, influencers and broadcasters.
• Attend global and domestic media networking events that connect the travel industry with top-tier journalists, editors, influencers and broadcasters. • Partner with Kind Traveler’s Give and Get booking platform to promote sustainable travel.

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9 2023-2024 Programs / Additions
• Return to production and distribution of official visitor guides and official visitor maps within Santa Monica and across California; domestic feeder markets; international offices; and trade shows.
• Expand Santa Monica’s competitiveness for groups by advising and supporting group marketers.
• Assist and explore opportunities to expand and improve existing products, services and experiences.
• Periodically review public and private facilities and services in Santa Monica, necessary for travel and tourism activities, with the goal to advise the city and business community of concerns and needed improvements that align with the Experience Management Plan (EMP).
• Facilitate roundtable educational sessions for local businesses. • Publish and inform tour companies and drivers of all bus loading zones in the destination. • Conduct destination brand refresh.
• Pursue integrated marketing campaigns and experiential brand activations in designated target markets.
• Create promotional videos for key pillars, such as culinary; health and wellness; outdoor activities; and Santa MoniCARES. These videos will provide us with exciting content to house on our website and share through social media and newsletters and use as pitching materials to secure media coverage.
• Develop Virtual Reality (VR) tours of destination experiences and businesses. • Identify and begin development of short- and long-range sponsorship and partnership programs for SMTT, including:
o 2026 FIFA World Cup
o LA28 Olympics
• Update destination photography and videography as needed to evolve the brand. 2024-2025 Programs / Additions
• Expand marketing efforts into Asia and/or South America. • Take action on learnings from year one of Santa Monica Experience Management Plan (EMP).
• Identify corporate brand partnerships that align with findings and creative of destination brand refresh.
• Conduct internal and external quantitative and qualitative research to continually evolve brand messaging.
• Update collateral and VR video with new products and experiences. • Develop long-range sponsorship and partnership programs for SMTT. • Begin launch of Route 66 programming for the centennial celebration. • Begin planning for LA28 Olympics Beach Volleyball sport. • Update destination photography and videography as needed to evolve the brand. • Grow the list of participating hotels in the Kind Traveler program.

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10 Visitor Services
• Operate four Visitor Information Center locations, including a mobile visitor center that serves community events. Visitor Center staff provides information and services to residents and many of Santa Monica’s 5.3 million annual visitors, 365 days a year. • Support local community events including, but not limited to, National Night Out; Pier 360; local BID holiday events; COAST; American Film Market (AFM); Buy Local; MAINopoly; HOWL-O-WEEN; Summer SOULstice; ICE Santa Monica; Annual Christmas Tree Lighting at Santa Monica Place; Meet Me Under the Fig Tree; and SMPD Roll Calls. • Continue to serve as city-wide distribution point for resources and information for Santa Monica businesses and residents.
• Share information and celebrate the positive impacts of tourism for the community at the Annual Tourism Summit, which is a gathering of business, civic and nonprofit organizations. The Tourism Summit is a shared expense between City and TMD. • Provide curbside drop-off service for Santa MoniCARES donation collections benefiting Santa Monica-based nonprofits.
• Respond to text-on-demand requests seven days a week during operating hours at Visitor Information Centers.
2023-2024 One-off Programs / Additions
• Re-launch Shop Santa Monica retail program aligning with brand refresh. • Advance development plan for Visitor Service locations upgrades, both physically and technologically.
• Wrap mobile information vehicle with brand refresh creative. • Explore AI for 24-hour Visitor Information Services.
2024-2025 One-off Programs / Additions
• Launch bulk order program for retail.
• Launch 24-hour client services for groups in city.
• Launch AI for information services.
• Upgrade plan for Visitor Information Center Main Street, both physically and technologically.

Travel Industry Sales
• Since the Tourism Marketing District (TMD) was established in 2013, no city funds have been used for this department. However, due to the COVID-19 crisis, which resulted in a significant drop in hotel occupancy and closures, we were forced to temporarily utilize city funding for a brief period as we worked to retain current overnight business from which TMD funds are derived, while sourcing new leads and new hotel-booked business. The amount of city funds utilized was approximately $90,000.

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11 SMTT’s five strategic areas of focus - our “lanes of work” - are the foundation of our annual work plan. Here we outline the programs, initiatives and staff efforts that help propel our strategies to success for the destination:

LANE 1: DRIVE BALANCED DEMAND FOR THE DESTINATION
Objectives:

1. Increase year-over-year Transient Occupancy Tax (TOT).

2. Maintain and grow domestic travel levels from target markets.

3. Increase international visitation to pre-pandemic level (2019).

4. Grow average length-of-stay to pre-pandemic level by year end of 2024 calendar year.

5. Maintain stable year-round occupancy range of 65% to 75% for FY 2023 and 75% to 85% for FY 2024.

Key Initiatives/Strategies:
• Increase occupancy during identified need periods.
• Re-establish presence in Asia-Pacific markets to ensure optimal ROI for Santa Monica.
• Retain American Film Market (AFM) in Santa Monica.
• Develop and implement next steps for MICE Advisory Board. • Actively support efforts to reduce visa wait times.
• Further develop luxury destination offerings.

It is important to emphasize that several major sporting events including the 2023 HSBC World Rugby Sevens Series; 2023 Wrestle Mania; 2023 123rd U.S. Open Championship; 2023 Concacaf Gold Cup Final; 2024 NCAA Division I Men's Basketball West Region Championship; 2026 FIFA World Cup; 2026 U.S. Women's Open; and 2028 Summer Olympic & Paralympic Games will be hosted in the Greater Los Angeles Area in the next five years. As such, it is crucial for SMTT to utilize and work on these relationships for future bookings and programs.

SMTT will gauge success in its efforts according to these key performance indicators:

Destination Performance
• Occupancy
• Average Daily Rate (ADR)
• Revenue per available room
• Visitor makeup (% domestic vs. international)
• Transient Occupancy Tax (TOT) generated
• Retail and sales taxes generated
• Tourism Marketing District (TMD) collections
• Employment sustained in our industry

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12 SMTT Programs Performance
• Room nights booked during campaigns
• Website traffic and links out to partner websites
• Incentive and meetings business booked
• Travel trade bookings
• Overall economic growth year-over-year
TRAVEL TRADE – DOMESTIC & INTERNATIONAL MARKETS
As the new year begins, international inbound travel to California continues to increase, however, there are still several hurdles impacting a full recovery. First, travelers from key inbound markets who are applying for visitor visas for the first time are experiencing wait times of 400 days on average. First-time travelers to the U.S. from countries such as Mexico, India, China and Brazil are all impacted by these delays. Second, while airlift between top international feeder markets and California gateways has grown, there is still a lack of sufficient flights from markets such as Asia-Pacific. Third, a strong U.S. dollar has made travel more expensive for international visitors.

There are several solutions currently being discussed or planned to help address these hurdles and pave the way for a full recovery. The U.S. Travel Association and Congress are currently working on measures to reduce visa wait times, and a new U.S. Tourism Czar will be appointed by the President to help tackle this issue head on. In terms of airlift, Visit California is working with its international offices and airlines in key feeder markets to add new routes to California. Air service from Australia is anticipated to ramp up significantly by summer. In preparation for this, Santa Monica Travel & Tourism has continued to invest in international representation, programs and sales driving campaigns in key markets (below) while re-establishing its presence in Australia/New Zealand.

Listed below is our proposed plan and framework to keep Santa Monica top-of-mind among travel agents, tour operators and meeting planners during this crucial time. We will increase international programs in countries that have historically been top source markets for our destination, and which are expected to have the fastest travel recovery. We will also build upon the domestic programs and partnerships that we established in the last two years to ensure a diversified and holistic approach is taken.

It is important to note that all areas below are based on available budget, and that this plan is subject to change. If we have learned anything from the past two years, it is that we must be able to adapt and pivot as conditions continue to evolve.

Primary Markets:
• United States
• United Kingdom/Ireland
• Australia/New Zealand

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13 Secondary Markets:
• France
• Germany
• Canada
Exploratory Markets:
• Mexico
• China
A continued investment in the luxury segment will remain a focal point for our domestic and international strategies. In 2021, SMTT established marketing partnerships with two of the leading luxury travel networks: Virtuoso and Signature Travel Network. These partnerships give us exclusive access to luxury advisors and clients in North America and abroad and have provided us with unique opportunities for joint marketing; webinars; trade shows; and events. Santa Monica was recently included in Virtuoso’s 2023 list of the top 10 cities booked worldwide for leisure travel.

In North America, SMTT will continue to grow Santa Monica’s presence in Canada in partnership with its in-market representation team. Pre-pandemic, Canadian travelers were among the top spenders and hotel visitors to our destination, and we are excited to welcome these visitors back.

Santa Monica also has an opportunity to grow business during our winter and shoulder seasons among Canadian snowbirds.

Along those lines, we will be looking to our neighbor to the south, Mexico, and exploring opportunities to potentially grow visitation from this market.

Overseas, we will be focused on strengthening our relationships and driving room nights with the travel trade in key markets such as the United Kingdom/Ireland, France and Germany.

We have also re-engaged with the Australian/New Zealand markets with the recent hiring of a new representation firm based in Sydney. This will enable SMTT to deploy sales driving programs in market and resume Santa Monica’s annual sales & media mission in the fall.

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14 United States
Travel Network/Consortia Partnerships
• Virtuoso
• Travel Leaders
• AAA
Trade Shows/Events
• ILTM North America
• Brand USA Marketplace
• Virtuoso Travel Week
• Signature Travel Conference
• Visit California Connections/Luxury Forum
2023-2024 Programs / Additions
• Training Programs:
o Virtuoso Web15 to launch updated content.
o Visit California STAR launch updated content.
o Develop Route 66 programs to increase hotel bookings during centennial. 2024-2025 Programs / Additions
• Identify final partners for Route 66 programs to increase hotel bookings.

United Kingdom/Ireland
Trade Shows/Events
• Santa Monica Sales & Media Retreat
• Visit California Sales & Media Retreat
• Visit California Connections/Luxury Forum
• Brand USA Travel Week Europe
• Visit USA Roadshow
• Aer Lingus Roadshow
• Unite USA Event
Campaigns
• Hotelbeds x Visit California
• SoCal Triangle Joint Promotion (with Greater Palm Springs & San Diego) • Tour Operator, Brand USA and Visit California Co-Ops
2023-2024Programs / Additions
• Training Programs:
o Visit California STAR Module launch updated content.

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15 2024-2025 Programs / Additions
• Explore activation partnerships in Brighton and London.

Canada
Travel Network/Consortia Partnerships
• Virtuoso
• Travel Leaders
• Signature Travel Network
Trade Shows/Events
• Santa Monica Sales & Media Mission
• Visit California Sales & Media Mission
• Visit California Connections/Luxury Forum
• Travel Leaders Roadshow
• ILTM North America
• Virtuoso Travel Week and On Tour
Campaigns
• Air Canada Vacations
• Expedia x Brand USA
• Tour Operator, Brand USA, and Visit California Co-Ops • Virtuoso Promotions
2023-2024 Programs / Additions
• Training Programs:
o Virtuoso Web15 launch updated content.
o Visit California STAR Module launch updated content.
2024-2025 Programs / Additions
• Activation in market-identify partnerships in market-budget dependent.

France
Trade Shows/Events
• IFTM Top Resa
• Visit USA Workshops
• Brand USA Travel Week Europe
• Visit California Roadshow
• Visit California Connections/Luxury Forum

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16 Campaigns
• Tour Operator Co-Ops
2023-2024 Programs / Additions
• Training Programs:
o Visit California STAR Module Relaunch Updated Content.

Air Tahiti and Air Canada Roadshows
• Miles Attack Travel Agent Incentive Loyalty Program implementation. • Explore activations in market.
2024-2025 Programs / Additions
• Execute activation in market-budget permitting.

Germany
Trade Shows/Events
• Visit USA Germany Roadshow
• Visit USA Consumer Shows
• Brand USA Travel Week Europe
• Visit California Connections/Luxury Forum
Campaigns
• CANUSA
• CRD
• FTI
• America Unlimited
• SoCal Triangle Joint Promotion (with Greater Palm Springs & San Diego) • Tour Operator and Visit California Co-Ops
2023-2024 Programs / Additions
• Training Programs:
o Visit California STAR Module to relaunch updated content. 2024-2025 Programs / Additions
• Training Programs:
• Visit California STAR Module to re-launch updated content. • Sales and media mission.

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17 Australia/New Zealand
Trade Shows/Events • Visit USA Expos and Brand USA B2B Days • Visit California Sales & Media Mission • Visit California Connections/Luxury Forum • ILTM Asia Pacific • Virtuoso Travel Week and On Tour Campaigns • Flight Centre x Visit California • Helloworld • Luxury Escapes • Tour Operator, Brand USA and Visit California Co -Ops
2023-2024 Programs / Additions
• Los Angeles Tourism & Convention Board Roadshow.
2024-2025 Programs / Additions
• Santa Monica sales and media mission.
• Training Programs: o Virtuoso Web15
.
o Visit California STAR Module update both years.

Global
Trade Shows/ Events
• ILTM Cannes, North America and Asia-Pacific
• Visit California Connections/Luxury Forum • Virtuoso Travel Week and On Tour • IPW • Go West • Brand USA Travel Week Europe • Brand USA Marketplace • Private Luxury Events Program Campaigns • Bonotel • Hotelbeds • Visit California Co
-Ops
• Brand USA Co-Ops
• Airline Co-Ops

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18 2023-2024 Programs / Additions
• Training Programs:
o Visit California STAR Module relaunch updated content. 2024-2025 Programs / Additions
• Leveraging Visit California and the Los Angeles Tourism & Convention Board’s efforts, SMTT may join exploratory activities in potential growth markets for Santa Monica including, but not limited to, Mexico, Scandinavia and China. Activities may include sales missions, familiarization trips (FAMs) and industry events - budget permitting.

SANTA MONICA MEET
Emerging from the pandemic, SMTT’s group sales team (Santa Monica Meet) has worked tirelessly to represent our destination as a top choice for meetings and events. Looking ahead, Santa Monica Meet will continue to do this by fortifying and building strategic partnerships with meetings-focused media partners, as well as attending events to showcase our beach city to planners.

The future continues to look brighter with the news of several major sporting events coming to the greater Los Angeles region in the next five years. As stated above, some of these include the 2023 HSBC World Rugby Sevens Series; 2023 Wrestle Mania; 2023 123rd U.S. Open Championship; 2023 Concacaf Gold Cup Final; 2024 NCAA Division I Men's Basketball West Region Championship; 2026 FIFA World Cup; 2026 U.S. Women's Open; and 2028 Summer Olympic & Paralympic Games.

Santa Monica hotels are looking to secure new group business and prepare for these events, especially after a successful Super Bowl in 2021; our first post-pandemic Rose Bowl pep-rally on the Santa Monica Pier; and welcoming new cultural events like Frieze Los Angeles to Santa Monica.

In the aftermath of the pandemic and in anticipation of these events, we have seen the return for proposal (RFP) lead time both lengthen and shorten, and consequently, our destination and hotels will continue to receive leads as soon as the next couple of months and continuing for the next two years. In addition, due to factors such as inflation and compression, many corporations are looking to secure multi-year deals with hotels for programs to limit rising costs.

Key factors that will contribute to the success of the group sales efforts will be:
• Visit California’s Professional Meetings & Events (PME) Taskforce (which SMTT serves on) and programming.
• SMTT’s Client Advisory Board.
• Site inspection assistance for qualified meeting planners. • New video and photography assets (virtual tours, updated meeting space images, hotel videos, etc.).
• Focusing on groups that are a fit for Santa Monica hotels (i.e. 25-125 rooms on peak)

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19 As outlined below, Santa Monica Meet will exhibit at key trade shows and events to engage meeting professionals:

Maintaining Relationships
• Meeting Professionals International Southern California Chapter – committee member/ preferred annual sponsor
• Society for Incentive Travel Excellence Southern California Chapter – active sponsor • West Coast DMO Alliance Programming and Events
• Los Angeles Chapter – active member
• Establishing and nurturing relationships with key intermediary companies, such as ConferenceDirect; HelmsBriscoe; HPN; Meetings Made Easy; Prestige; Maritz; and more.

Sales Missions in Key Target Markets
• Southern California
• Midwest (Chicago, Minneapolis)
Trade Shows and Roadshows
• IMEX America
• Prestige Global
• Visit California Professional Meetings & Events
• Retreat Resources
• Connect
• M&I
2023-2024 Programs / Additions
• Canada sales and media mission
• Northern California sales mission
• Global Business Travel Association
2024/25 Programs / Additions
• East Coast sales mission
• Southeast sales mission
• Meeting’s Today
• Smart Meetings
Additionally, Santa Monica Meet will renew its partnership with Cvent and look at ways to secure business via new or alternative channels, such as Facebook groups and Tour Connection.

However, the foundation of our group sales efforts will continue to be rooted in representing our beach city as a top destination for memorable and impactful events and securing new and repeat business for the future.

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20 LANE 2: ENHANCE THE BRAND AND STEWARD THE DESTINATION EXPERIENCE Objectives:

1. Ensure YOY increase in positive visitor sentiment.

2. Maintain favorable impressions of the destination’s brand.

3. Increase web performance to pre-pandemic levels.

4. Complete brand platform and supporting materials.

5. Grow Santa Monica generated media placements to pre-pandemic levels.

Key Initiatives / Strategies:
• Refresh the destination brand.
• Identify what has changed with the brand perception of Santa Monica post-branch launch.
• Identify corporate brand partnerships.
• Re-introduce the visitor guide and distribute annually. • Pursue integrated marketing campaigns and experiential brand activations in designated target markets.
• Gear public relations (PR) efforts toward top-tier lifestyle outlets to increase ad value and circulation of media placements.
• Take action on findings of the Santa Monica Experience Management Plan (EMP).

SANTA MONICA EXPERIENCE MANAGEMENT PLAN (EMP)
In early 2022, we started the process of updating the EMP, working with many stakeholders across the Santa Monica community, just as we had in the first version of the plan’s development.

With our plan update now complete, we are ready to begin the process of implementation, which will continue to unfold over the coming years through 2032. There is much to do as we lock arms and embark on this important journey.

For the first year of the plan, we will focus on implementing programs for four of our nine key strategies (in bold below). A committee has been created for each of these strategies consisting of key members of the community. Each committee has been appointed an SMTT facilitator to ensure open communications between all stakeholders in the EMP process:

1. Ensure Santa Monica continues to be a safe and clean place

2. Support livability for Santa Monica residents

3. Highlight and leverage cultural and historic experiences

4. Promote a diversity of retail, dining and evening experiences

5. Foster memorable accommodation experiences that enhance the value proposition

6. Facilitate the viability of small and unique businesses

7. Sustainably invest in making Santa Monica the greenest beach city in the U.S.

8. Support and enhance Santa Monica’s most important assets

9. Enhance mobility for Santa Monica visitors, residents, and workforce

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21 A governance committee has also been created to ensure that progress is made on each strategy and to prioritize short- and long-term goals. While SMTT is spearheading this process, we will not control or own all the initiatives that will be pursued. A consultant has been retained to facilitate the first year of the implementation phase and guide the process city-wide.

The second year of this plan will allow for implementation of areas and ideas that have been outlined in the EMP while further building out the plan for future years.

BRAND CAMPAIGN
Through a rigorous RFP process, SMTT has selected Noble Studios as its new agency of record (AOR). With their help, we will evolve our brand; craft one-of-a-kind campaigns that create lasting impressions on visitors and our community; leverage innovative technologies; and ensure the Santa Monica experience is a positive one before arrival.

The first phase of our work will include a brand health evaluation; paid media discovery; and brand discovery, during which we will take a comprehensive approach to research in order to gain an objective, data-driven assessment of the Santa Monica brand; visitor sentiment; target audiences; competitive insights; and goals for the future. This research will fuel and inform the new brand strategy, creative and paid media strategy that we will develop for SMTT and launch in the fall of 2023.

We will continue to focus our efforts on top domestic feeder markets: San Francisco, Phoenix, New York City, Las Vegas, Chicago, Seattle and Washington D.C.; and internationally in existing markets: Canada, United Kingdom/Ireland, France and Germany; and re-enter Australia/New Zealand in 2023. In 2024 as visa issues lessen, we will consider expanding into Mexico, Scandinavia and China.

PAID MEDIA
Traditionally, paid media efforts have been focused on the fall, winter and spring shoulder seasons with hiatus in summer but to keep Santa Monica top of mind year-round, we will move to an annual evergreen campaign that will shift based on seasonality. Our objective is to create emotional connections to Santa Monica beyond landmarks and drive overnight and mid-week visitation from core audience segments and extend their length of stay of by two nights or more.

The campaign(s) will focus and deliver on the following key performance indicators (KPIs):
• Increase direct bookings to hotels and increase TOT revenues • Increase weekday hotel stays and business travel
• Increase overall spend of visitors
• Increase referrals to Santa Monica businesses via the Partner Portal • Drive traffic to santamonica.com campaign landing page • Increase bookings through online travel agencies
• Increase social media presence and drive traffic to santamonica.com

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22 SANTA MONICA CITY SHARED IDENTITY PROJECT
SMTT is continuing to work with the City of Santa Monica and various stakeholders to develop a shared brand identity that will allow the city to promote Santa Monica as a premier destination for blue chip partnerships and flagship events.

CONTENT AND SOCIAL MEDIA
SMTT will continue to compile content from Santa Monica businesses for promotion through social media channels, the website and email.

SMTT’s social media strategy for the coming year will be to increase engagement and followers outside of the greater Los Angeles area, with a focus on top domestic feeder markets and international destinations. We will partner with a local consultant to assist with organic community management and content generation that will showcase the best of Santa Monica, highlighting and sharing experiences within the destination including outdoor dining; arts and culture; and outdoor activities. We also plan to expand our social media presence by exploring new and underutilized platforms such as TikTok, LinkedIn and Pinterest and partnering with key travel industry influencers who align with the values of Santa Monica, to promote the destination to their followers.

SMTT distributes several e-newsletters targeting different audience segments to ensure the local business community, visitors, residents and travel and trade partners are aware of the latest news and happenings throughout Santa Monica. Newsletters and cadence are as follows:
• Community Newsletter
o Audience: Local Businesses, Hotel General Mangers (GMs), BIDs, SMTT Board, City Partners, SMTT Partner Agencies
o Cadence: Twice Monthly
o Content: Santa Monica in the news; new businesses; SMTT updates and programs; and upcoming events
• Consumer Newsletter
o Audience: Consumers, Santa Monica Residents, Santa Monica Visitors, those who sign-up on santamonica.com
o Cadence: Monthly
o Content: News about hotels, shopping, food & drink and things to do • Sea the Good Newsletter – sent on behalf of Santa MoniCARES o Audience: Consumers, Santa Monica Residents, Santa Monica Visitors, those who sign-up on SantaMoniCARES.org
o Cadence: Monthly
o Content: a newsletter highlighting inspiring and admirable news stories

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23 • Travel and Trade Newsletter
o Audience: Travel Agents, Operators and Meeting Planners o Cadence: Quarterly
o Content: Hotel updates; new businesses opening; upcoming events; and what’s new.
• International Newsletters
o Audience: Markets with SMTT representation receive a newsletter catering to travel, trade and consumers
! Current markets: Canada, United Kingdom/Ireland, France, Germany and Australia/New Zealand
o Cadence: Monthly/Quarterly
o Content: Hotel updates; new businesses openings; upcoming events; what’s new; and things to do in Santa Monica
SMTT will continue to work with key, targeted publications and freelance journalists to develop timely articles and blog posts to ensure content on santamonica.com is attracting organic traffic; addressing visitor needs; and highlighting how the destination is on the cutting edge of travel, culinary, health and wellness, shopping and sustainability trends.

SMTT has partnered with a new publisher for the Official Santa Monica Visitor Guide and Map:

Destination Creative Group (DCG). The 2023 guide and map will be the first printed version since COVID-19 and will feature stories on Santa Monica neighborhoods; hospitality; gastronomy; retail; culture; entertainment; and more. Additionally, it will provide messaging on responsible travel to further aid in Santa Monica’s tourism recovery. The new print and digital guide and map are expected to be released in summer 2023. In addition to local and domestic distribution, we plan to expand our distribution into international markets.

SANTAMONICA.COM
SMTT launched a fully enhanced, mobile-optimized website in the summer of 2022 and received great reviews. Santamonica.com will continue to evolve and deliver the best user experience; and act as the top source for destination news and happenings for both travelers and trade.

Santamonica.com provides a resource for travelers at all stages of the traveler's journey and educates them on why they should choose Santa Monica as their destination, in addition to featuring all the incredible offerings of the region. The meeting planner portion of the site is designed to bring events, conferences and meetings to Santa Monica hotels and venues.

The newly designed website allows for fresh and updated content to be featured on the home page to promote local events. It also provides advertising opportunities for businesses to reach a captive audience interested in visiting Santa Monica, which is a revenue stream for SMTT.

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24 The goals of santamonica.com remain consistent:
• Consumer:
o Reintroduce Santa Monica as a “home base” destination and differentiate it from Los Angeles and other SoCal destinations.
o Stabilize occupancy and serve the local business community. o Highlight creating experiences and connections in Santa Monica. o Drive overnight visitation during shoulder seasons.
• Trade:
o Attract events and meetings to Santa Monica hotels and venues for overnight experiences.
o Educate meeting planners on the available hotels, venues and destination differentiators that make it the ultimate meeting location. o Show off the outside-the-boardroom activities for attendees to enjoy.

SANTA MONICA RESTAURANTS
SMTT is partnering with Santa Monica restaurant owners, chefs and hotels to share their personal stories, culinary inspirations and advice to those looking to break into the food & beverage scene.

This is in an effort to increase overall sales and experiences in our food & beverage businesses and elevate Santa Monica’s reputation as a foodie destination.

MEDIA RELATIONS
SMTT will continue to share the innovative efforts our community is taking to be a leader in sustainability. Media and consumer interest in this topic has grown significantly and we’re fortunate that the City of Santa Monica has prioritized sustainability since the development of the Sustainable City Plan in 1994. The city’s 2022 LEED Platinum certification has already provided new opportunities to tell our story of sustainability.

We will continue to urge local businesses to engage in programs like the Green Business Certification program and Sustainable Quality Awards to amplify the community’s efforts and showcase how visitors can travel and enjoy Santa Monica responsibly.

SMTT is also focusing storytelling opportunities on our community as a highly desirable destination for foodies, as we showcase our culinary strengths, diverse dining options and introduce audiences to our roster of renowned chefs and farmers markets. SMTT will continue to identify themed press visits and itineraries. These will focus on the community’s culinary expertise, as well as the new experiential product in market, and will focus more on attendance at local events. This will help showcase how much is happening in our community that visitors can enjoy.

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25 Health and wellness is an additional area of outreach to travel journalists, who continue to show interest in the abundance of opportunities including beach yoga; beach spinning; biking tours; spa experiences; and healthful eating.

SMTT will engage journalists from the region and nation with a special focus on international as travel continues to rebound. We will seek fresh opportunities to host journalists from Europe, and North America. A new partnership in Australia/New Zealand will foster engagement with top writers in both countries and facilitate projects in the region on an ad hoc basis.

SMTT will leverage opportunities to connect with journalists on media missions and international activations with other partners in the following markets:
• Australia/New Zealand
• Canada
• France
• Germany
• Japan
• Mexico
• United Kingdom/Ireland
We will continue working with a media monitoring and distribution platform to increase domestic and global reach to journalists, bloggers and influencers and measure effectiveness of our public relations output.

SMTT will also support the city in getting the word out about hotels and businesses that are undergoing renovations, remodelings and updates to showcase the incredible economic impact these projects will bring to Santa Monica.

CRISIS COMMUNICATIONS
The crisis communications plan continues to be updated to reflect emergent issues and aligned messaging needs. Updates include the addition of heat and weather advisories, as well as continued amendments based off the lessons learned and best practices from the pandemic. We continue to create new media holding statements and refine existing ones to ensure we are ready to respond to crisis situations when appropriate.

Our team has also focused on relationships with the City of Santa Monica, Santa Monica Police, and Santa Monica Fire’s communication department’s public information officers and the communications teams in California destination marketing organizations. This it to ensure our relationships continue to grow and emergency contact information is shared, so we can swiftly respond to crises and support each other’s efforts. We continue to share information in conjunction with the City of Santa Monica to provide official messages to our business community, visitors and Santa Monica residents on santamonica.com; social media channels; community newsletters; and news updates.

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26 2023-2024 Media Relations Programs / Additions
• Focus on first 4 strategies of Experience Management Plan (EMP). • Destination brand refresh communication.
• Expand marketing efforts into Australia/New Zealand.
• Identify and partner with local consultants to assist developing and amplifying relevant content and expand social footprint to include Pinterest, TikTok and other new platforms. • Update existing Crisis Communications Plan with learnings from post-pandemic efforts. • Work with Marketing to create promotional videos for key pillars such as culinary; health and wellness; outdoor activities; and Santa MoniCARES. These videos will provide us with exciting content to house on our website and share through social media and newsletters, while providing content to share with news media to attract coverage. 2024-2025 Programs / Additions
• Assess progress on Experience Management Plan (EMP) and expand to strategies beyond the top four.
• Relaunch the website with new brand refresh creative. • Create dedicated landing pages with language translation option for each international market where SMTT has representation.
• Begin planning, securing and spreading awareness of brand partnerships for upcoming major events including:
• 2026 FIFA World Cup
• 2026 Route 66 Centennial
• LA28 Olympics
• Expand media efforts into Asia and/or South America.
• Provide extensive media training for greater Communications team and SMTT leadership.

LANE 3: CHAMPION THE VALUE OF TOURISM
Objectives:

1. Achieve positive tourism economic outcomes as indicated in the Tourism Economic Impact Report.

2. Achieve consistently positive resident sentiment toward tourism (Y2).

3. Achieve a minimum of $25K (2023)/$50K (2024) in charitable, donated and in-kind value through the Santa MoniCARES foundation.

4. Increase and maintain engagement levels with other Santa Monica boards and organizations.

Key Initiatives/Strategies:
• Launch “I Am Santa Monica” program locally and internationally. • Maintain an influential presence on Santa Monica boards and key initiatives aimed at advancing tourism.
• Strengthen and nurture positive relationships with Santa Monica City Council and city leadership.
• Support U.S. Travel, CalTravel and regional and local travel-focused initiatives.

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27 • Increase fundraising capabilities and expand Santa MoniCARES program to assist more community nonprofits.
• Raise awareness of the impact of tourism within our community, region, state and country with increased opportunities for staff and board participation. • Identify and employ new opportunities for board engagement and development.

BOARD ENGAGEMENT
SMTT Board of Directors are active participants in the implementation and execution of the Santa Monica Experience Management Plan (EMP). Board members are represented in the Governance Committee and each of the four first-year strategic initiatives committees. The SMTT Board, along with various city and community stakeholders, residents and local businesses will work as partners over the next 10 years toward a shared vision and common goals. This will result in enhanced quality of life for all Santa Monica residents, a remarkable visitor experience that stands the test of time and a stronger, more resilient local economy.

SMTT will continue to identify opportunities for members of its Board of Directors to address myths about the tourism industry and to champion the value of tourism in speaking engagements in front of community stakeholder groups, such as neighborhood associations and service organizations.

SMTT will also focus on continued board development opportunities, including participation at industry conferences; familiarization tours; stakeholder meetings; cultural exchanges; community events; and media interviews.

SMTT leadership will continue to work in collaboration with the SMTT Board of Directors and TMD Committee representatives to ensure engagement at regularly scheduled meetings with agendas focused on raising awareness of important projects and driving discussion and feedback. SMTT will continue to distribute electronic board newsletters in months when there is not a regularly scheduled board meeting.

COMMUNITY & CIVIC RELATIONS
SMTT will continue to be a vocal champion on behalf of the tourism industry when required, while demonstrating the importance and positive economic impacts of tourism to the community, utilizing the following channels as examples:
• Annual Tourism Summit
• National Travel and Tourism Week
• Community event presence and collateral distribution:
o Buy Local’s Most Loved contest
o COAST
o City of Santa Monica Wellbeing Summit
o Downtown Santa Monica holiday events/ICE Santa Monica o OWL Breakfast
o Main Street Holiday event

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28 o Main Street Last Sunday event
o Martin Luther King Day event
o National Night Out
o New Heroes Celebration
o OPA 4th of July Parade
o Pico Boulevard Holiday event
o Police Activities League Recognition Dinner
o Santa Monica Pier 360
o State of the City
o Sustainable Quality Awards
• I Wish I Had an Extra Bedroom Program, annually offering hotel discounts to residents over the holiday season
• Santamonica.com
• Seascape
• Speaking opportunities at City Council; Kiwanis Club; Rotary Club; and Santa Monica High School Career Day
• “Tourism Talks” column in Santa Monica Daily Press

SANTA MONICARES
The Santa MoniCARES foundation launched in 2017 as a coalition of representatives from Santa Monica Travel & Tourism and community partners. The mission of Santa MoniCARES is to harness the hospitable nature and generosity of Santa Monica’s tourism industry and provide support to our local nonprofit agencies. Santa MoniCARES will focus on community engagement through a series of events and activities that further promote our efforts. The foundation plans on expanding LGBTQ+ program support by once again sponsoring the annual Santa Monica High School Gay Student Associations Annual Queer Prom and will host a fundraising mixer to raise funds for local LGBTQ+ associations. The foundation will also plan targeted fundraising events to benefit local nonprofits through its network of tourism-serving businesses such as Volley-WEEN and implementation of hotel stay donations via Kind Traveler.

A newly revamped website will make it easier for nonprofit agencies and residents to partner with Santa MoniCARES through procured fundraising events, volunteerism and donation opportunities. An additional feature on the Santa MoniCARES website will allow the public to choose where their donation dollars are spent. One hundred percent of a donation can be directed to the type of nonprofit donors choose to support, such as education; environmental protection; hunger; the arts; elderly assistance; workforce development; diversity; equity and inclusion programs; and cultural programs.

Santa MoniCARES will continue to be a leader in donation drives and collection points for our local nonprofits in need to collect gently used clothing; food; blankets; and toiletries. Internally, SMTT has included Santa MoniCARES’ mission and values as part of our SMTT onboarding process for new employees. Santa MoniCARES is a key component to SMTT’s identity within the community to show that tourism cares about its residents, as well as its visitors. Employee

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29 volunteerism events and activities are regularly planned throughout the year. We require Santa MoniCARES components at every industry event or program SMTT produces.

TOURISM INDUSTRY LEADERSHIP
SMTT will continue to be a proactive member of the tourism industry to share best practices by leveraging memberships with the following industry associations and taking opportunities to serve on leadership committees, boards of directors and attending or speaking at their annual conferences:
• Brand USA
• California Travel Association
• Destinations International
• eTourism Summit
• Meeting Professionals International
• Certified Meetings Professional (CMP) status
• Society for Incentive Travel Excellence
• U.S. Travel Association’s Board of Directors
• Visit California’s various leadership and committee roles • Southern California Association Governments - GLUE Council - Tourism Representative • Santa Monica Bay Restoration Commission - Tourism Representative SMTT will further leverage the strength of Visit California by aligning staff to Visit California-led committees relevant to their positions:
• DMO CEO - President/CEO
• International - Director of Global Business Development • Marketing - Chief Marketing Officer
• Public Relations/Crisis - Director of Communications

I AM SANTA MONICA
“I Am Santa Monica" is an interactive business workshop designed to educate Santa Monica residents, businesses and employees about Santa Monica’s offerings. The class is designed specifically to inform and educate tourism-serving employees of businesses in Santa Monica about the destination, with a focus on customer service and hospitality training. This free, twohour, interactive learning workshop includes a bus tour of Santa Monica and ends with a classroom session reviewing detailed take-home materials. Trained individuals become “Official Santa Monica Information Ambassadors,” and are equipped with a database of facts, figures and “did you know” anecdotes about Santa Monica for use in customer interactions. Each “Official Santa Monica Information Ambassador” receives a certificate and package of information. The program is now being expanded with a digital version to offer the valuable classroom resources to students who are unable to participate at in-person sessions. The class can now be curated to a business’ individual needs and private classes are also available.

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30 “I AM YOUR DESTINATION” PROGRAM
“I Am Your Destination” is the framework of the “I Am Santa Monica” program that we solicit to other cities who want to offer their own class, designed specifically for any tourism destination.

The program sells for $15,000 and SMTT is proactively targeting domestic destinations for potential purchase and utilizing attendance at industry trade shows and forums to attract destination marketing organizations to the program. As part of our digital “I Am Santa Monica” creation, a templated version is available for an additional $5,000. 2023-2024 Programs / Additions
• Expand content and merge to virtual addition of the “I Am Santa Monica” program to destination marketing organizations in domestic markets. • SMTT leadership to join at least one new local or state industry board. • Launch new Santa MoniCARES website with more robust content and donation opportunities.
• Identify and employ new opportunities for board engagement and development. • Hold 70’s Prom disco fundraiser for Santa MoniCARES.
• Pursue local speaking engagements and connections for our strategic plan development. 2024-2025 Programs / Additions
• Increase number of charitable opportunities to increase funds for Santa MoniCARES. • Develop new community relations program for spring and summer that bring attention to the positive impact of tourism.
• Develop long-term strategic plan for Santa MoniCARES.

LANE 4: STRENGTHEN STRATEGIC PARTNERSHIPS
Objectives:

1. Generate minimum of $200K (2023)/$300K (2024) in-kind or fair share value.

2. Secure a minimum of $50K in outside sponsorship dollars to offset program costs (Y1 = $25K/Y2 = $35K).

3. Achieve a minimum of $25K (2023)/$50K (2024) in charitable, donated and in-kind value through the Santa MoniCARES foundation.

4. Participate in four Experience Management Plan (EMP) strategic actions (Y1).

Key Initiatives/Strategies:
• Collaborate with and support the City of Santa Monica’s Community Partnership Manager. • Establish a Partnership Program.
• Serve as the backbone organization for the Santa Monica Experience Management Plan (EMP).
• Engage Santa Monica partners to increase fair share by 25%. • Develop Standard Operating Procedures (SOPs) for in-kind requests to grow value by 25%.

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31 STRATEGIC PARTNERSHIPS
As we navigate economic and political uncertainty, providing cost-effective and valuable programs for our partners is of critical importance. Our tourism business partners look to SMTT to best represent the brand of Santa Monica and that’s why last year, Santa Monica Travel & Tourism generated over $300,000 of in-kind support and $10,000 in fair share participation fees from tourism-serving businesses to further support SMTT programs. These valuable contributions do not come automatically. They are derived from ongoing dialogue and education with our tourism business partners and through demonstrating a high standard of excellence, engagement and ROI with our programs.

To ensure our partners are aware of all the ways they can work with SMTT, our organization will continue to utilize the following channels:
• Quarterly General Managers meetings
• Quarterly Marketing Committee and Director of Sales meetings • Roundtable trainings and discussions
• Partner Portal
• Hospitality networking events showcasing new venues and opportunities to work with SMTT
• New business intro program
• Monthly community newsletter
• Annual Tourism Summit
SMTT will continue to solicit sponsorships for its Annual Tourism Summit and other signature events to offset program costs.
2023-2024 Programs / Additions
• Generate a minimum of $25,000 in sponsorship revenue from SMTT and Santa MoniCARES-owned properties such as Tourism Summit, Volley-WEEN and the 70’s Prom fundraising event.
• Re-establish the marketing committee with city partners, stakeholders and local businesses.
2024-2025 Programs / Additions
• Generate a minimum of $35,000 in sponsorship revenue from SMTT and Santa MoniCARES-owned properties such as Tourism Summit, Volley-WEEN and the 70’s Prom fundraising event.

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32 LANE 5: ENSURE OPERATIONAL EXCELLENCE
Objectives:

1. Ensure accountability as measured by our audit reporting, financials and plan management.

2. Achieve targeted annual employee engagement scores using the Gallup Q12 (identify categories).

3. Deliver 75% success rate based on targeted staff participation in community events.

4. Evaluate and reconcile ROI metrics for all target markets (Y2).

Key Initiatives/Strategies:
• Achieve successful funding renewals.
• Achieve five years of audited financials with no more than three reportable conditions. • Review and set target operating costs per employee.
• Conduct an annual team building experience, including monthly wellness activities. • Solidify SMTT’s resource needs to ensure consistent, high-quality delivery. • Develop and implement a recruiting strategy.
• Establish a crisis event telephone tree.
• Develop and implement an internal technology plan, including shared file protocols. • Conduct annual financial and operations audit.

OPERATIONAL EXCELLENCE
SMTT’s leadership team created a four-quarter performance review process that focuses on the forward approach to employee development and retention. At the employee's annual hire date, a one-page self-evaluation is completed for the previous year. Upon completion, employees will meet quarterly with their supervisors to discuss individual performance and professional development goals and to address or adjust goals as needed.

Baseline qualifications by title have been created to help drive employee success and offer further opportunities for advancement within SMTT. A salary and benefit survey will be completed in 2023, 2024 and 2025 with industry researchers to ensure we are aligned with the industry and the region in our offerings. In addition, we continue with our quarterly team building events, as they have been a success.

Retention will continue to be at the forefront of SMTT by expanding our recruitment efforts along with a 21+ point onboarding process that ensures new staff comprehend the important values and policies that make us unique. SMTT works with a local insurance broker to offer a comprehensive and cost affordable benefits package.

We continue to be a leader in equipment, technology and sustainability. When decommissioned, SMTT laptops, iPads and cell phones are erased to Department of Defense standards, then donated to either the Police Activities League, if the students can utilize; nonprofit Laptop Elf Company, who recycles the equipment for underprivileged youth and teachers; or are recycled

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33 through one of the City of Santa Monica’s hazardous waste programs.

EMERGENCY PREPAREDNESS
We will review our emergency preparedness plan for 2023-2025 and update as needed. We plan on certifying additional employees via the City of Santa Monica’s Community Emergency Response (CERT) and will provide all employees the opportunity to attend a class to obtain CPR certification. The EMP will help deliver a full city-wide crisis plan to work in tangent with each organization and the city’s current crisis plans.

SMTT will continue to ensure all frontline visitor staff receive de-escalation training in case of an emergent situation.

We will explore a new Emergency Outreach Cell Phone Contact System for internal use. This voice broadcasting system will allow us to send voice messages to an entire list of phone numbers in seconds. We can also create a text message and send it to everyone on our list. It allows SMTT to keep track of responses and reply with two-way SMS.

SMTT will continue to circulate information on the City’s new visitor emergency text alert system to our hotel general managers, so they can share the service with their guests in the event of a large-scale community concern or incident.

DESTINATION MARKETING ACCREDITATION PROGRAM (DMAP)
Santa Monica Travel & Tourism has long been proud of its participation in the Destination Marketing Accreditation Program (DMAP) through Destinations International. This globally recognized program serves as a visible industry distinction that defines quality and performance standards in destination marketing and management. The process includes submitting documentation of over 110 rigorous standards, including an annual operations plan; HR policies; technology plan; an updated crisis communications plan; a commitment to consumer research; adoption of the DMAP code of ethics; and many other standards. SMTT submitted an annual progress report in 2023 and was re-certified as an approved DMAP Destination. 2023-2024 Programs / Additions
• Allow all employees to obtain CPR certification.
• Complete industry salary benefit survey.
• Re-establish a crisis event telephone tree via one application. • Conduct an annual team building experience, including monthly wellness activities. 2024-2025 Programs / Additions
• Achieve pre-pandemic staffing level across the organization. • Update user technology and systems.
• Develop and implement an internal technology plan, including shared file protocols.

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34 IN CLOSING
Santa Monica Travel & Tourism thanks the City of Santa Monica for its ongoing support and partnership in ensuring that the tourism industry remains a valued contributor to a vibrant and thriving economy. While we’ve seen our fair share of challenges over the past three years, our aligned strategies, along with the collaboration and support of the city, community and business leadership, will reinforce our goals and vision and help us best serve our residents, visitors and businesses for many years to come.

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Report
City Council Meeting: June 13, 2023
Agenda Item: 5.G
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To: Mayor and City Council
From: David Martin, Director, City Planning
Subject: Approval of Fourth Modification to Professional Services Agreement with HR&A Advisors Inc. for 6th Cycle (2021-2029) Housing Element Implementation
Recommended Action
Staff recommends that the City Council take the following actions:

2. Authorize the City Manager to negotiate and execute a fourth modification to agreement #108300 (formerly #10830) in the amount of $40,000 and extend the term for one additional year, with HR&A Advisors Inc.(“HR&A”) to prepare fiscal analysis for implementation of the City’s certified 6th Cycle (2021-2029) Housing Element. This will result in a five-year amended agreement with a new total amount not to exceed $494,900, with future year funding contingent on Council budget approval.

Summary
On October 14, 2022, the State of California’s Housing and Community Development Department (HCD) certified the City’s 6th Cycle (2021-2029) Housing Element. The certified Housing Element represents the City’s commitment to implement the Housing Element programs. The City Council held two study sessions regarding the first phase of implementation programs for the Housing Element on February 14 and February 28, 2023. On March 21, 2023, City Council adopted amendments to the Land Use and Circulation Element (LUCE), Bergamot Area Plan (BAP), and Downtown Community Plan (DCP), and on April 11, 2023, City Council adopted amendments to the Zoning Ordinance (ZO) to implement these programs.

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The first phase of implementation programs for the 6
th Cycle Housing Element focused
on programs necessary to ensure compliance with the Housing Element that are most relevant to housing production or are required for consistency with State law that is already in effect. These programs included key rezoning programs, Program 1F and Program 1J, which are necessary to accommodate the City’s Regional Housing Needs Allocation (“RHNA”) of 8,895 units between 2021 and 2029 with a buffer to address net loss of units. Program 1F (rezoning of Downtown) and Program 1J (rezoning of mixeduse areas outside of Downtown) commits the City to amending the Zoning Ordinance, LUCE, Downtown Community Plan, and the Bergamot Area Plan (BAP) to increase FAR and height standards to levels that can support the Affordable Housing Production Program (AHPP) inclusionary requirement and feasible housing projects. Based on prior HR&A analysis, the FARs and heights in the certified 6
th Cycled Housing Element could
support an on-site inclusionary requirement of 15% (i.e., housing projects could be feasible with 15% on-site affordable housing units).

On March 21, 2023, Council adopted amendments to the LUCE, Downtown Community Plan, and the Bergamot Area Plan (BAP), and on April 11, 2023, the City Council adopted amendments to the Zoning Ordinance, to increase heights and FARs for housing projects and to establish an inclusionary affordable housing requirement of 15%. Additionally, Council gave direction to Staff to further review and analyze options to increase affordable housing in the City, including but not limited to, further modification of the AHPP 15% inclusionary requirement, particularly an increase over 15% in the Downtown Community Plan area. A modification to the agreement with HR&A Advisors Inc.(“HR&A”) for a total $40,000 is required to conduct additional feasibility analyses pursuant to Council direction.

Background
The RHNA is mandated by State Housing Law as part of the periodic process of updating local housing elements of the General Plan. The RHNA quantifies the need for housing within each jurisdiction during specified planning periods. For the 6th Cycle

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planning period of 2021-2029, Santa Monica’s RHNA is 8,895 units, of which 69% must be affordable.

On March 26, 2019, Council authorized an agreement with HR&A Advisors, Inc. to provide financial feasibility analysis of potential affordable housing requirements and minimum density necessary to support housing projects. On November 12, 2019, Council authorized the acceptance of SB2 grant funds in the amount of $310,000 from the State of California Department of Housing and Community Development and a first contract modification in the amount of $179,000 with HR&A Advisors, Inc. for additional analysis related to housing production in the context of the 6th Cycle Housing Element.

HR&A’s amended contract provided for a range of economic analyses, typical housing prototype modeling based on revised standards, and policy and program evaluation necessary to inform the preparation of the 6th Cycle Housing Element. During the City’s reorganization, Contract #10830 expired before the scope of work was completed and a new contract was executed for the remaining balance with contract #108300.

A third modification to HR&A’s contract in the amount of $36,000 was authorized by Council in July 2022 to prepare a Ballot Measure Impact Report to model Measure GS and the potential funds that the measure might generate.

Discussion
Rezoning efforts for the adopted 6th Cycle Housing Element include establishing development standards that must be both feasible and sufficient for the City to support housing projects and accommodate the RHNA as required by HCD. Housing Element Program 1F (rezoning of Downtown) and Program 1J (rezoning of mixed-use areas outside of Downtown) commits the City to modifying the floor area ratios (FARs) and heights in the City to ensure they are set at levels that can support the minimum AHPP requirements and are feasible for housing projects. The City’s assumptions of feasibility in the adopted 6th Cycle Housing Element are based on the results of a feasibility analysis prepared by HR&A dated June 9, 2021 and updated in February 2022. As established in Programs 1F and 1J of the Housing Element, the feasible FARs for

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housing projects in the Downtown range from a minimum 2.75 to 4.0 with heights ranging from 55 feet to 84 feet and the feasible FARs for housing projects in the remaining areas of the City range from a minimum 2.75 to 3.25 with heights ranging from 55 feet to 65 feet.

The FAR and height standards, as established in the Housing Element and presented to Council in February and March 2023, are based on the results of a feasibility analysis prepared by HR&A dated June 9, 2021 and updated in February 2022. The HR&A analysis accounted for affordability mix, reduced parking requirements, flexibility to allow ground floor residential, and replacement units that may be required by State Law (SB 330). As indicated in the HR&A analysis, the FARs and heights in the certified 6th Cycled Housing Element could support an on-site inclusionary requirement of 15% (i.e., housing projects could be feasible with 15% on-site affordable housing units). On March 21, 2023, Council adopted amendments to the LUCE, Downtown Community Plan, and the Bergamot Area Plan (BAP), and on April 11, 2023, City Council adopted amendments to the Zoning Ordinance, to increase heights and FARs for housing projects and to establish an inclusionary affordable housing requirement of 15%.

Additionally, Council gave direction to Staff to further review and analyze options to increase affordable housing in the City, including but not limited to, further modification of the AHPP 15% inclusionary requirement, particularly an increase over 15% in the Downtown Community Plan area. A modification to the agreement of $40,000 is required to conduct additional analyses pursuant to Council direction.

A fourth modification to the agreement would expand HR&A’s scope of work to conduct updated analysis of the Housing Element programs. HR&A will provide supplemental research and/or analysis, including financial feasibility analysis, that pertains to proposed or adopted City policies, regulations, or projects. This may include, for example analysis on aspects of the City’s AHPP, General Plan and Zoning Ordinance changes, changes in local real estate market conditions, changes in other regulatory standards, impact fees, or project approval processes. Furthermore, this fourth modification to the agreement would extend the term of the contract to accommodate completion of this additional scope of work.

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Contractor Selection
HR&A Advisors, Inc. was selected on March 21, 2019 to provide the following:
• Update Financial Feasibility Analysis on the Downtown Community Plan (DCP) • Explore Revised Development Standards and Incentives for Housing Projects on Boulevards and in the Bergamot Area Plan
• Multi-Unit Districts Affordable Housing Fee and Density Study This recommended award was made as an exception to the competitive bidding process pursuant to Section 2.24.80(d). Competition does not exist because HR&A has completed extensive feasibility analysis related to evaluating the feasibility of the City’s development standards, project requirements and fees including ongoing work on the Affordable Housing Production Program (AHPP) and Housing Element, as well as financial feasibility on the Downtown Community Plan, and 2015 Zoning Ordinance.

Therefore, HR&A has the unique ability or capability to complete the abovementioned studies related to continued implementation of the Housing Element. Completing a competitive procurement process is highly unlikely to produce cost-competitive proposals from other sources, given HR&A’s experience and knowledge with preparing modeling for the City.

Environmental Review
The proposed modification to HR&A’s contract is statutorily exempt from CEQA pursuant to Section 15262 (Feasibility and Planning Studies) of the CEQA Guidelines, which exempts feasibility and planning studies for possible future actions which the agency, board, or commission has not approved, adopted, or funded. HR&A’s updated feasibility analysis would provide information on the level of supportable inclusionary housing and therefore, is exempt pursuant to Section 15262.

Past Council Actions
Meeting Date Description

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03/26/2019 Council approved a contract with HR&A Advisors, Inc to provide empirical testing of prototypical private developments to help increase the City’s supply of affordable housing
06/11/2019 Council adopted a resolution authorizing application for, and receipt of, SB2 grant funds in an amount not to exceed $310,000 from the California Housing and Community Development Department (HCD) 11/12/2019 Council authorized the City to accept the SB2 grant in the amount of $310,000 and to authorize the City Manager to negotiate and execute a first modification with HR&A in the amount of $179,000 for further prototype testing in support of the 6th Cycle Housing Element 10/12/2021 Council adopted the 2021-2029 6th Cycle Housing Element 06/14/2022 Council approved a second modification with HR&A in the amount of $89,900 and extension of the contract for one additional year to provide additional financial analyses in support of the City’s Housing Element
07/12/2022 Council approved a third modification in the amount of $36,000 to conduct financial modeling for the Affordable Housing Tax Ballot Measure
Financial Impacts and Budget Actions
Staff seeks authority to approve funding from the General Fund to increase the amount of the agreement with HR&A Advisors Inc for preparation of fiscal analysis for implementation of the City’s certified 6th Cycle (2021-2029) Housing Element. Funds are including the FY 2023-25 Proposed Biennial Budget.

Contract Modification Request Amount
Agreement # Current
Authorized
Amount
FY 2023-24
Request
Amount
Account # Total Revised
Contract Amount

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10830/108300 $268,900 20700002.556420 $268,900
10830/108300 $150,000 01700001.552010 $150,000
10830/108300 $36,000 01300001.552010 $36,000
10830/108300 $40,000 01700002.552010 $40,000
TOTAL $454,900 $40,000 $494,900
Future year funding is contingent on Council budget approval.

Prepared By: Rachel Kwok, Environmental Planner
Approved Forwarded to Council
Attachments:

A. HR&A Original Agreement
B. HR&A Agreement First Modification
C. HR&A Agreement Second Modification
D. HR&A Agreement Third Modification
E. HR&A Oaks Initiative Form 2023

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Contract No. 108300 (CCS)

PROFESSIONAL SERVICES AGREEMENT
This Professional Services Agreement (“Agreement”), entered into as of _________________(“Execution Date”), by and between the City of Santa Monica (“City”) and HR&A Advisors, Inc. (“HR&A”), is made with reference to the following:

RECITALS:

A. The City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of the City.

B. HR&A is qualified to do business, and is doing business, in the State of California.

HR&A represents it has the background, knowledge, experience and expertise necessary to provide the services set forth in this Agreement.

C. The City and HR&A now desire to enter into an agreement for HR&A to provide professional services to the City.

NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows:

TERMS AND CONDITIONS

1. Term. This Agreement begins on the Execution Date and terminates on June 30, 2022, unless sooner terminated in accordance with Section 14.

2. HR&A Services. HR&A will perform all of the services (“Services”) described in Exhibit A, Scope of Services. HR&A will complete the Services in accordance with Exhibit B, Budget.

3. City Services. The City agrees to:

3.1 Make available to HR&A any currently existing documents, data or information required for the performance of the Services.

3.2 Designate a representative authorized to act on behalf of City.

3.3 Promptly examine and render findings on all documents submitted for staff review by HR&A.

4. Compensation. The City will compensate HR&A for the Services performed in an amount not to exceed $219,000.00, as set forth in Exhibit B.

5. Invoices. HR&A will invoice the City for the Services in accordance with Exhibit B and the City will pay any undisputed amount within 30 days of receipt.

6. Notices. All notices, demands, requests or approvals to be given under this Agreement, must be in writing and will be deemed served when delivered personally, DocuSign Envelope ID: E40D9E3E-2795-4CBE-85C6-23137938095E 11/23/2020

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Packet Pg. 251 Attachment: HR&A Original Agreement (5747 : Fourth Modification to HR&A Contract) - 2 -
by email, or on the third business day after deposit in the United States mail, postage prepaid, registered or certified, addressed as follows:

6.1 All notices, demands, requests or approvals to the City:

City Planning Division
City of Santa Monica
1685 Main Street, Mail Stop 28
Santa Monica, California 90401
Attention: Rachel Kwok
Re: Contract No. 108300 (CCS)
with a copy to:

Santa Monica City Attorney’s Office
1685 Main Street, Third Floor
Santa Monica, California 90401
Attention: City Attorney
Re: Contract No. 108300 (CCS)

6.2 All notices, demands, requests or approvals to HR&A:

HR&A
700 South Flower Street, Suite 2995
Los Angeles, California, USA
Attention: Paul J. Silvern, Vice President
[email protected]
Re: Contract No. 108300 (CSS)

7. Independent Parties. Both parties to this Agreement will be acting in an independent capacity and not as agents, employees, partners, or joint venturers of one another.

Neither the City nor its officers or employees will have any control over the conduct of HR&A or any of HR&A’s agents, employees, or subconsultants, except as otherwise provided in this Agreement.

8. Integrated Contract. This Agreement represents the full and complete understanding of every kind or nature whatsoever between the parties. Any preliminary negotiations and agreements of any kind or nature are merged into this Agreement. No oral agreement or implied covenant may be held to vary the provisions of this Agreement.

This Agreement may be modified only by written agreement signed by City and HR&A, and approved as to form by the City Attorney.

9. Insurance. Prior to commencing work, HR&A must procure, maintain and pay for insurance against claims for injuries to persons or damage to property that may arise from or in connection with the performance of the Services by HR&A or HR&A’s agents, representatives, employees or subconsultants for the duration of this DocuSign Envelope ID: E40D9E3E-2795-4CBE-85C6-23137938095E

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Packet Pg. 252 Attachment: HR&A Original Agreement (5747 : Fourth Modification to HR&A Contract) - 3 -
Agreement. HR&A must obtain insurance that, at a minimum, meets the requirements for insurance set forth in Exhibit C, Insurance Requirements and Verifications.

10. Defense and Indemnification.

10.1 Indemnification. As to HR&A’s Services produced under this Agreement, HR&A agrees to defend, indemnify, protect, and hold harmless the City, its agents, officers, boards and commissions, and employees (collectively, “City”) from and against any and all liability, claims, demands, damages, or costs, including but not limited to attorney’s fees, or payments for injury to any person or property (collectively, “Losses”) caused or claimed to be caused by the acts, errors and/or omissions of HR&A, or HR&A’s employees, agents, officers, and subconsultants. HR&A’s responsibilities under this Section 10.1 include liability arising from, connected with, caused by, or claimed to be caused by the active or passive negligent acts or omissions of the City, which may be in combination with the acts or omissions of HR&A, its employees, agents or officers, or subconsultants; provided, however, that HR&A’s duty to defend, indemnify, protect and hold harmless shall not include any Losses arising from the sole negligence or willful misconduct of the City.

Notwithstanding HR&A’s obligation to defend City hereunder, City has the right to conduct its own defense and seek reimbursement for reasonable costs of defense from HR&A, if City chooses to do so.

10.2 Enforcement Costs. HR&A agrees to pay any and all costs the City incurs enforcing the indemnity, defense and hold harmless provisions set forth in Section 10.1.

11. Prohibition Against Transfers.

11.1 HR&A may not assign, hypothecate, or transfer this Agreement or any interest therein directly or indirectly, by operation of law or otherwise without the prior written consent of City. Any attempt to do so without the City’s consent will be null and void, and any assignee, hypothecatee or transferee acquires no right or interest by reason of such attempted assignment, hypothecation or transfer.

11.2 The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of HR&A or of any general partner or joint venturer or syndicate member of HR&A, if a partnership or joint venture or syndicate exists, which results in changing the control of HR&A, will be construed as an assignment of this Agreement. Control means 50% or more of the voting power of the corporation.

DocuSign Envelope ID: E40D9E3E-2795-4CBE-85C6-23137938095E

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Packet Pg. 253 Attachment: HR&A Original Agreement (5747 : Fourth Modification to HR&A Contract) - 4 -

12. Permits and Licenses. HR&A, at its sole expense, must obtain and maintain during the term of this Agreement all required business and professional permits, licenses and certificates.

13. Waiver. A waiver of any breach of this Agreement may not be deemed a waiver of any subsequent breach of the same or any other term, covenant, or condition of this Agreement.

14. Default and Termination.

14.1 If HR&A fails or refuses to perform any of the provisions of this Agreement, and if the default is not cured within a period of five days after the City’s written notice of default specifying the nature of the default, City may immediately terminate this Agreement by written notice to HR&A.

14.2 The City has the option, at its sole discretion and without cause, of terminating this Agreement by giving ten days’ written notice to HR&A. Upon termination of this Agreement, City will pay HR&A any compensation earned and unpaid up to the effective date of termination.

15. Compliance with Law. HR&A must comply with all laws of the State of California and the United States, and all ordinances, rules, and regulations enacted or issued by City.

16. Discrimination. HR&A may not discriminate in the provision of services hereunder because of race, color, religion, national origin, ancestry, sex, age, sexual orientation, marital status, AIDS or disability.

17. Nuisance. HR&A may not maintain, commit, or permit the maintenance or commission of any nuisance in connection with the performance of services under this Agreement.

18. Records.

18.1 HR&A must maintain complete and accurate records with respect to costs, expenses, receipts and other such information required by the City for any services provided where compensation is on the basis of hourly rates, subconsultant costs, or other direct costs. HR&A must keep the records, together with supporting documents, separate from other documents and records and maintain them for a period of three years after receipt of final payment.

18.2 HR&A must maintain records in sufficient detail to permit an evaluation of the Services and in accordance with generally accepted accounting principles.

HR&A must clearly identify all records and make them readily accessible to the City. At the City’s request, HR&A must provide records in an electronic format and, if necessary, access to any proprietary software to view such electronic records.

DocuSign Envelope ID: E40D9E3E-2795-4CBE-85C6-23137938095E

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Packet Pg. 254 Attachment: HR&A Original Agreement (5747 : Fourth Modification to HR&A Contract) - 5 -

18.3 HR&A must allow the City to have free access to HR&A’s books and records and to inspect all work, data, documents, proceedings and activities related to this Agreement. The City has the right to examine or audit HR&A’s records, and HR&A agrees to cooperate with any examination or audit of its records. If a City audit discloses an error of 5% or more in information reported by HR&A, HR&A agrees to pay the cost of the City’s audit computed on the basis of four times the direct payroll of the audit staff completing the audit and audit report.

19. Work Product; Reports.

19.1 Any work product prepared or caused to be prepared by HR&A or any subconsultant for this Agreement will be the exclusive property of City. No work product given to or prepared by HR&A or any subconsultant pursuant to this Agreement may be made available to any individual or organization by HR&A without prior written approval by City.

19.2 At the City’s request, HR&A must furnish reports concerning the status of the Services.

20. Standard of Care. HR&A agrees to provide all Services, including services performed by any subconsultant, in a manner consistent with the level of care and skill ordinarily exercised by members of HR&A’s profession currently practicing in the same locality under similar conditions.

21. Subconsultants.

21.1 If HR&A proposes to have any subconsultant perform any part of the Services, HR&A must submit a request for approval in writing, describing the scope of work to be subcontracted, the name of the proposed subconsultant, and the total price or hourly rates used in preparing an estimated cost for the subconsultant’s services. The City, in its sole discretion, may grant or deny the request.

21.2 HR&A will be responsible for the quality of any subconsultant’s work. Every subcontract or agreement of any kind entered into between HR&A and any subconsultant (or between any subconsultant and others) must contain the following provision:

This agreement is consistent with all terms and conditions of the Agreement No. 108300 (CCS) entered into between the City of Santa Monica and HR&A on^^___________.

22. Governing Law. The laws of the State of California, without regard to any choice of law provisions, will govern this Agreement.

23. Venue and Jurisdiction. The City and HR&A agree that the Services will take place in Los Angeles County. Any litigation arising out of this Agreement may only be DocuSign Envelope ID: E40D9E3E-2795-4CBE-85C6-23137938095E 11/23/2020

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Packet Pg. 255 Attachment: HR&A Original Agreement (5747 : Fourth Modification to HR&A Contract) - 6 -
brought in either the United States District Court, Central District of California, or the Superior Court of California, County of Los Angeles, West District, as appropriate. The parties agree that venue exists in either court, and each party expressly waives any right to transfer to another venue. The parties further agree that either court will have personal jurisdiction over the parties to this Agreement.

24. Survival of Provisions and Obligations. Any provision of this Agreement, which by its nature must be exercised after termination of this Agreement, will survive termination and remain effective for a reasonable time. Any obligation that accrued prior to termination of this Agreement will survive termination of this Agreement.

25. Exhibits. The following exhibits are incorporated by reference into this Agreement as though fully set forth herein.

Exhibit A Scope of Services
Exhibit B Budget
Exhibit C Insurance Requirements
In witness whereof, the parties have caused this Agreement to be executed the day and year first above written.

ATTEST:
______________________________

DENISE ANDERSON-WARREN
City Clerk
APPROVED AS TO FORM:
______________________________

LANE DILG
City Attorney

CITY OF SANTA MONICA,
a municipal corporation
By: ______________________________

RICK COLE
City Manager
ABC Corporation
#VENDOR
By: ________________________________
DocuSign Envelope ID: E40D9E3E-2795-4CBE-85C6-23137938095E George Cardona
Interim City Attorney
11/19/2020
Paul J. Silvern, Vice President
HR&A Advisors, Inc.

Paul J. Silvern
11/19/2020
11/23/2020
Lane Dilg
City Clerk Interim City Manager
Denise Anderson-Warren
11/30/2020

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Packet Pg. 256 Attachment: HR&A Original Agreement (5747 : Fourth Modification to HR&A Contract) Exhibit A
Scope of Services
DocuSign Envelope ID: E40D9E3E-2795-4CBE-85C6-23137938095E

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Packet Pg. 257 Attachment: HR&A Original Agreement (5747 : Fourth Modification to HR&A Contract)

New York | Dallas | Los Angeles | Raleigh | Washington DC Revised: October 21, 2020
via email to: [email protected]
Jing Yeo
Planning Manager
Community Development Dept.

City Hall, Room 212
1685 Main Street
Santa Monica, CA 90404
Re: Proposal to Update 2019 AHPP Analysis and Analyze New Prototypes in Additional Commercial Areas Dear Jing:

Per your request, HR&A Advisors, Inc. (HR&A) is pleased to provide this proposal to provide additional prototype testing to determine whether increased development standards and/or new affordable housing requirements (i.e., in terms of percentages, unit mix and affordability levels) can accelerate development of mixed-income housing. This effort will include updating feasibility analysis for 14 prototypes from our previous analysis, modelling 14 new prototypes in additional commercial areas, and updating real estate market and construction cost assumptions for selected market areas.

Similar to previous analysis completed by HR&A, the assignment involves empirical testing of prototypical private developments to establish the financially-feasible limits of modified affordable housing requirements and development fees, utilizing static pro forma financial feasibility Excel models to test the developer investment return implications of revised affordable housing requirements on prototypical developments. The assignment is also similar to a financial feasibility analysis that we are currently completing for the Los Angeles City Planning Department, wherein our analytic model was re-designed to evaluate the development capacity (in terms of incremental stories or FAR) that would be required to support TransitOriented Communities affordability percentages and income levels in Downtown Los Angeles. Our proposed approach to the new assignment will build on these prior efforts.

PROPOSED SCOPE OF WORK
HR&A will undertake the following tasks in a generally sequential order:

Task 1. Kick-off Meeting and Discussion About Modeling Assumptions.

HR&A will meet with City staff to discuss various elements of the analysis, obtain certain data and clarify certain modeling assumptions. These include, but are not necessarily limited to the following:
 Confirm the general objectives for performing this analysis and review the scope and schedule for completing it;
 Confirm communication protocols between HR&A and the City staff team, including the City Attorney’s office;
 Confirm the 24 prototypical mixed-use development scenarios for Bergamot, Boulevards, Lincoln, Downtown, General Commercial - Santa Monica Boulevard and Neighborhood Commercial (see Task 2 for the list of prototypes to be confirmed), including a range of flexibility in terms of changes to existing Tier structures, FAR, or height;
DocuSign Envelope ID: E40D9E3E-2795-4CBE-85C6-23137938095E

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Packet Pg. 258 Attachment: HR&A Original Agreement (5747 : Fourth Modification to HR&A Contract) HR&A Advisors, Inc. Proposal re: Santa Monica Community Benefit Fee Structures | 2  Confirm that HR&A will first test each prototype with the exact affordable housing requirements in the Zoning Code (i.e., base case) and then a set of requirements (i.e., household income levels, minimum unit sizes and affordable unit mix) provided by City staff;  Confirm that HR&A should use FY 2020-21 City development impact fee, permit charges and other fee schedules for development costs, and obtain the applicable schedules of all such fees, including recently approved standards for Tier 2 and Tier 3 developments;  Obtain the most current AHPP household income, maximum rent and maximum sale price schedule; and
 Discuss what types of City land use permits and environmental documentation should be assumed for each prototype (if different), and their related average approval schedules and costs; and  Discuss alternative means to improve construction cost estimates for the prototypes.

Deliverables: Meeting agenda and meeting summary memo.

Task 2. Develop the Specifications of All Development Prototypes.

Based on the results of the above meeting, HR&A will collaborate with City Planning staff to prepare a general profile for each of 24 prototypical development scenarios, including total site area (if different from 15,000 s.f. for the Boulevards), acceptable range of gross building floor area, total net floor area and related building efficiency factors, net floor area by land use, acceptable range of total building height and number of stories, average unit sizes for both market rate and affordable units, dwelling unit counts by type, parking counts and number of subterranean levels, among other modeling assumptions. This analysis will vary from our previous analyses, assuming concurrence from City staff, wherein we will design our model to test incremental development capacity (in terms of additional floors/FAR of multifamily housing and additional floors of subterranean parking) within a reasonable set of parameters (i.e., setbacks, construction type, etc.). These specifications should reflect all recent changes to development standards approved by the City Council. This will allow HR&A to rapidly and incrementally test additional development capacity required to support certain affordable housing requirements while maintaining acceptable developer profit margin to incentivize development.

Analyze a total of 24 prototypes including:
 Bergamot Area Plan – Mixed-Use CD and Bergamot Transit Village  Boulevards – Mixes Use Boulevard – Wilshire and Mixed-Use Boulevard Low - Santa Monica  General Commercial – Lincoln
 R2/R3 Zones
 Downtown – Transit Adjacent and Neighborhood Village
 General Commercial – Santa Monica Boulevard
 Neighborhood Commercial
Deliverable: Final specification of physical characteristics and related assumptions for all prototypes.

Task 3. Update Current Real Estate Market Conditions for the Most Sensitive Financial Feasibility Modeling Assumptions.

This includes updating relevant assumptions used in prior related HR&A financial feasibility modeling to preCOVID-19 conditions, specifically for up to 5 submarkets (potentially including Downtown, the Boulevards, Bergamot, Ocean Park, and Montana). In doing so HR&A will utilize a variety of third-party data sources available to HR&A, including Co-star, Reis, quarterly real estate market surveys prepared by several real estate brokerages and other real estate services that include either Santa Monica-specific or more general Westside rents, absorption and vacancy data, operating expenses, income capitalization rates, and project financing terms and pricing. Optional Task 12 below addresses various sensitivities that HR&A can run to demonstrate the potential impact of long-term impacts of the COVID-19 pandemic.

DocuSign Envelope ID: E40D9E3E-2795-4CBE-85C6-23137938095E

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Packet Pg. 259 Attachment: HR&A Original Agreement (5747 : Fourth Modification to HR&A Contract) HR&A Advisors, Inc. Proposal re: Santa Monica Community Benefit Fee Structures | 3 HR&A will consult with local developers and architects to confirm the development cost assumptions during the course of the analytic process, as described in Task 10. HR&A can subcontract with an independent professional construction cost estimator to provide assumptions about above-grade and below grade hard construction costs for each prototype if required.

To support this work, City staff will supply HR&A with an updated inventory of recent multi-family projects that have been completed or still have active applications under review during the past five years, as applicable to all prototypes.

Deliverable: The assumptions derived from this Task will be incorporated into the deliverables for Task 4.

Task 4. Prepare Financial Feasibility Pro Forma Models for Each Prototype.

HR&A will first prepare two base case financial feasibility models for each retail/apartment prototype assuming the Tier 2 affordable housing options most frequently used by developers (i.e., first at 7.5% of the units affordable to 30% income households; then 15% affordable to 50% income households; each using the unit mix by bedrooms per unit and other requirements specified in the Zoning Code). HR&A will then prepare an analysis case for each prototype using a new set of affordable housing requirements determined through discussion with City staff. These feasibility models (both base cases and analysis case) will resemble the type of Excel workbook pro formas prepared by HR&A for previous analyses of this type.

Central to this analysis are the feasibility thresholds employed. Again, building on previous work of this type, HR&A will use two different, but related measures, both of which would have to be met for the results to be considered “financially feasible.” These are:
1) Return on Total Development Cost1, which is calculated as Net Operating Income divided by Total Development Cost, the result of which should be at least one to two percentage points above the weighted average of the income capitalization rates for each land use in the prototype; and 2) Developer Profit Margin, which is calculated as Capitalized Project Value minus Total Development Cost, the result of which should be at least equal to 10 percent of net Capitalized Project Value.

The pro forma models will be designed in a way that will make it relatively easy to test the implications of changing the key elements of a set of assumed affordable housing standards (i.e., percentage requirements by income level and unit mix), should any of the initial analysis cases prove to be financially infeasible. But HR&A will not make any such changes until the feasibility results for the base cases and initial analysis cases have been reported to City staff.

Deliverable: Pro forma model results for each prototype and associated affordable housing assumptions.

Task 5. Document 100% Affordable Housing Opportunities and Constraints.

HR&A will review and document development standards applicable to 100% affordable housing projects across the City, and will engage non-profit affordable housing developers to determine the impact of development standards on the feasibility of affordable housing projects. Because 100% affordable housing projects, which are typically funded through the use of Low-Income Housing Tax Credits (“LIHTC”) and other sources, are not well-suited to conventional financial feasibility pro forma analysis, HR&A will develop a list of opportunities and constraints for affordable housing projects Citywide and within individual zoning districts. This documentation will be focused on the impact of development standards and physical location on the availability of land, pursuit of funding/financing, and other relevant criteria. These findings will be summarized in the deliverable associated with Task 6.
1 Assuming rental projects only. Analysis for condo scenarios will require additional budget depending on the scope.

DocuSign Envelope ID: E40D9E3E-2795-4CBE-85C6-23137938095E

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Packet Pg. 260 Attachment: HR&A Original Agreement (5747 : Fourth Modification to HR&A Contract) HR&A Advisors, Inc. Proposal re: Santa Monica Community Benefit Fee Structures | 4 Task 6. Preliminary Results Briefing.

At the end of the preceding task, HR&A will prepare a presentation-style briefing summary to support a discussion meeting with City staff. The purposes of this meeting are to report on: (1) the degree to which the prototypes are financially feasible; (2) the degree to which any new affordable housing requirements appear to be feasible; (3) if not, what adjustments to the modeling should be pursued to achieve financial feasibility, and in what order of policy priority (i.e., percentages of affordable units, affordability level and unit mix).

Deliverable: Briefing book summarizing pro forma modeling approach, assumptions and preliminary results.

Task 7. (Optional) Allowance for Further Feasibility Testing.

This is an as-needed task for any further sensitivity testing that may be required, should the initial analysis case results indicate that modifications of new affordable housing requirements or development standards would be needed to achieve financial feasibility for one or more of the prototypes. A general schedule and budget allowance are included for this task, but it may require augmentation if more than one round of sensitivity testing is required.

Deliverable: Additional pro forma model results, as needed.

Task 8. (Optional) Revised Results Briefing.

This is another as-needed task for summarizing and discussing the results with City staff about any needed sensitivity testing as described above.

Deliverable: Updated briefing book summarizing any additional pro forma modeling.

Task 9. Memorandum Report.

Once the analysis has been finalized and all questions and issues of concern to City staff have been addressed, HR&A will prepare a memorandum report describing the analysis approach, assumptions, findings and conclusions. The memorandum will include a concise executive summary, a narrative explanation of approach and key assumptions, and conclusions. It will also include attachments with the output from the financial feasibility models. The memorandum will be prepared first in draft for review and comment by the City staff project team, and then put into final form after considering any comments on the draft.

HR&A acknowledges that all preliminary and revised analysis, internal briefings and other communications with City staff will be treated as strictly confidential, and possibly subject to attorney-client privilege, until City staff approves public release of the Final Memorandum Report.

Deliverables: Draft and Final Memorandum Report.

Task 10. Stakeholder Briefings.

This task consists of: up to two roundtable briefings with developers (including non-profits), architects and property owners, which may be convened by the Santa Monica Area Chamber of Commerce, to provide input on key assumptions and to review HR&A’s draft findings, conclusions and recommendations; and up to two meetings with other local stakeholders to be determined in coordination with City staff, also to review HR&A’s draft findings, conclusions and recommendations. The specific schedule and format for these meetings will be determined after consultation with City staff but are intended to occur before Task 10 (Public Presentations).

Deliverables: Meeting presentation briefing materials and meeting results summary memos.

Task 11. Public Presentations.

This task is an allowance for HR&A to appear at public meetings to present and discuss the results of this analysis. For budgeting purposes, the schedule and budget assume two meetings with the Housing DocuSign Envelope ID: E40D9E3E-2795-4CBE-85C6-23137938095E

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Packet Pg. 261 Attachment: HR&A Original Agreement (5747 : Fourth Modification to HR&A Contract) HR&A Advisors, Inc. Proposal re: Santa Monica Community Benefit Fee Structures | 5 Commission, two with the Planning Commission and two with the City Council, including time to prepare materials for the meetings, contribute to relevant sections of staff reports and PowerPoint presentations, and participate in the meetings. The schedule for these meetings will be determined in consultation with City staff, but it is intended that one set of public meetings will occur prior to Task 8 (Memorandum Report) and one after Task 9 (Stakeholder Briefings).

Deliverables: HR&A presentation briefing materials and, as needed, written comments on companion City staff presentation.

Task 12. (Optional) COVID-19 Updates
Because our modeling will not yet account for the full near-term impacts of COVID-19 on the real estate market, we can update our analysis at a later date once the longer-term impacts are clear, or run subsequent sensitivity models. This task would assess the impact of various changes to real estate revenues, financing costs and construction costs on supportable levels of affordable housing.

PROPOSED STAFFING AND SCHEDULE
All the work described above will be prepared by qualified HR&A professional staff working under the direct supervision of Paul J. Silvern, Vice President. This includes Thomas Jansen, a Principal (as Project Manager), Ada Peng, a Senior Analyst and Jenna Gray, a Research Analyst.

Subject to further discussion with City staff, subsequent decisions about whether multiple rounds of sensitivity testing may be required, and assuming timely City staff input during the progress of the work, HR&A will complete the above-described tasks on approximately the following schedule, including overlaps between individual tasks to the degree possible, but also allowing for the further feasibility testing and related discussion tasks, if needed:

Task Cumulative Time
Task 1. Kick-off Meeting Week 1
Task 2. Specify 24 Prototypes Week 4
Task 3. Update Market Assumptions Week 6
Task 4. Base Case & Initial Analysis Case Feasibility Models Week 9 Task 5. Document 100% Affordable Housing Opportunities & Constraints Week 9 Task 6. Preliminary Results Briefing & Meeting Week 10
Task 7. Allowance for Further Feasibility Testing Week 12 Task 8. Allowance for Revised Results Briefing Week 14
Task 9. Draft & Final Memorandum Report To Be Determined Task 10. Stakeholder Briefings To Be Determined
Task 11. Presentations to Commissions & City Council To Be Determined Task 12. COIVD-19 Updates To Be Determined

PROPOSED BUDGET
Based on our experience with comparable projects, and taking into account certain economies available from our previous related assignments for the City, we estimate that the completion of the above scope of work will require a budget of $219,000.00, excluding customary reimbursable expenses (which we expect to be limited). This total is allocated among individual tasks approximately as follows.

DocuSign Envelope ID: E40D9E3E-2795-4CBE-85C6-23137938095E

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Packet Pg. 262 Attachment: HR&A Original Agreement (5747 : Fourth Modification to HR&A Contract) HR&A Advisors, Inc. Proposal re: Santa Monica Community Benefit Fee Structures | 6 Task Cost
Task 1. Kick-off Meeting $4,000
Task 2. Specify 24 Prototypes $26,000
Task 3. Update Market Assumptions $24,000
Task 4. Base Case & Initial Analysis Case Feasibility Models $50,000 Task 5. Document 100% A.H Opportunities & Constraints $5,000 Task 6. Preliminary Results Briefing & Meeting $8,000
Task 7. Allowance for Further Feasibility Testing $24,000 Task 8. Allowance for Revised Results Briefing $8,000
Task 9. Draft & Final Memorandum Report $12,000
Task 10. Stakeholder Briefings $8,000
Task 11. Presentations to Commissions & City Council $20,000 Task 12. COVID-19 Updates $15,000
Subtotal Fees $204,000
Contingency $15,000
Total $219,000
The proposed budget includes a roughly 7.5 percent contingency, based on our experience that these kinds of analyses frequently require mid-term changes in assumptions that require additional work beyond the original scope of the assignment. Customary expenses should be limited to third party data acquisition and local travel to meetings; these are charged at their direct cost to HR&A without mark-up. Any additional services that may be requested can be provided on a time and materials basis, per the hourly rate schedules shown in Attachment A to this proposal letter, or on a mutually agreeable fixed fee basis, as City staff may prefer. We propose to invoice the City on a monthly basis for the percentage of each task completed during the prior month.
**********************
We hope you find the foregoing proposal responsive to the City’s needs. Once finalized, we assume City staff will prepare a standard City professional services contract using this proposal letter to define the scope of work, schedule and compensation. We are very familiar with the City contract, and related City contract requirements, and take no exceptions to their terms or conditions.

We can be available to discuss this proposal with you and your colleagues as needed to clarify any issues or discuss any amendments that may be required. We look forward to the possibility of working with you and the other members of the City project team on this assignment.

Sincerely,
PAUL J. SILVERN,
Vice President
Attachment A: 2020 HR&A Hourly Rate Schedule for Public Sector and Non-Profit Clients DocuSign Envelope ID: E40D9E3E-2795-4CBE-85C6-23137938095E

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Packet Pg. 263 Attachment: HR&A Original Agreement (5747 : Fourth Modification to HR&A Contract) HR&A Advisors, Inc. Proposal re: Santa Monica Community Benefit Fee Structures | 7 Attachment A
HR&A Advisors, Inc. 2020 Hourly Rate Schedule for Public Sector & Non-Profit Clients Hourly rates for HR&A staff are as follows:

Personnel Hourly Rate
Chair / Vice Chair $ 535
Partner $ 395
Principal $ 350
Director $ 315
Senior Analyst $ 240
Analyst $ 190
Research Analyst $ 150
Admin $ 105
HR&A bills for customary out-of-pocket expenses (e.g., travel costs, mass reproduction, specialized graphics, long-distance telephone, messenger and overnight delivery) at their direct cost to HR&A without mark-up.

Depositions, mediations, arbitration hearing or trial testimony hours are billed at time and one-half.

DocuSign Envelope ID: E40D9E3E-2795-4CBE-85C6-23137938095E

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Packet Pg. 264 Attachment: HR&A Original Agreement (5747 : Fourth Modification to HR&A Contract) Exhibit B
Budget
DocuSign Envelope ID: E40D9E3E-2795-4CBE-85C6-23137938095E

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Packet Pg. 265 Attachment: HR&A Original Agreement (5747 : Fourth Modification to HR&A Contract) Exhibit C
Insurance Requirements and Verifications
Consultant shall procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damages to property that may arise from or in connection with the performance of the work hereunder by the Consultant, its agents, representatives, employees or subcontractors.

Minimum Scope and Limits of Insurance
Coverage shall be at least as broad as:

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

2. Automobile Liability: Insurance Services Office Form CA 00 01 covering Code 1 (any auto), or if Consultant has no owned autos, Code 8 (hired) and Code 9 (non-owned), with limits of no less than $1,000,000 per accident for bodily injury and property damage.

3. Workers’ Compensation: Workers’ Compensation insurance as required by the State of California, with Statutory Limits and Employers’ Liability Insurance with limits of no less than $1,000,000 per accident for bodily injury or disease (see footnote #1).

4. Professional Liability: Insurance appropriate to the Consultant’s profession with limits of no less than $1,000,000 per occurrence or claim/$2,000,000 in the annual aggregate.

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

Other Insurance Provisions

1. The insurance policies are to contain, or be endorsed to contain, the following provisions:
a. Additional Insured Status: The City of Santa Monica, its officers, officials, employees and volunteers are to be covered as additional insureds on the CGL DocuSign Envelope ID: E40D9E3E-2795-4CBE-85C6-23137938095E

5.G.a
Packet Pg. 266 Attachment: HR&A Original Agreement (5747 : Fourth Modification to HR&A Contract) 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. CGL coverage can be provided in the form of an endorsement to the Consultant’s insurance (at least as broad as Insurance Services Office Form CG 20 10 11 85, or if not available, through the addition of a combination of (1) CG 20 10, CG 20 26, CG 20 33, or CG 20 38 and (2) CG 20 37).
b. Primary Coverage: For any claims related to this Agreement, the Consultant’s insurance shall be primary coverage at least as broad as Insurance Services Offices Form CG 20 01 04 13 as respects the City of Santa Monica, its officers, officials, employees and volunteers. Any insurance or self-insurance maintained by the City of Santa Monica, its officers, officials, employees or volunteers shall be in excess of the Consultant’s insurance and shall not contribute with it. c. Notice of Cancellation: Each insurance policy required herein shall state that coverage shall not be cancelled except after notice has been given to the City of Santa Monica.
d. Waiver of Subrogation: Consultant hereby grants to the City of Santa Monica a waiver of any right of subrogation which any insurer of said Consultant may acquire against the City of Santa Monica by virtue of payment of any loss. Consultant agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation, but this provision applies regardless of whether or not the City of Santa Monica has received a waiver of subrogation endorsement from the insurer.

Self-Insured Retentions
Self-insured retentions must be declared to and approved by the City of Santa Monica. The City of Santa Monica may require the Consultant to purchase coverage with a lower retention or provide satisfactory proof of ability to pay losses and related investigations, claim administration, and defense expenses within the retention. 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 of Santa Monica.

Acceptability of Insurers
Insurance is to be placed with insurers authorized to conduct business in California with a current A.M. Best rating of no less than A:VII, unless otherwise acceptable to the City of Santa Monica.

Claims Made Policies

1. If the Professional Liability policy provides “claims made” coverage:

DocuSign Envelope ID: E40D9E3E-2795-4CBE-85C6-23137938095E

5.G.a
Packet Pg. 267 Attachment: HR&A Original Agreement (5747 : Fourth Modification to HR&A Contract) a. The Retroactive Date must be shown and must be before the date of this Agreement or the start of work.
b. The insurance must be maintained, and evidence of insurance must be provided for at least 5 years after completion of work.
c. If the policy is cancelled or not renewed, and not replaced with another “claims made” policy form with a Retroactive Date prior to the effective Agreement date, the Consultant must purchase “extended reporting” coverage for a minimum of 5 years after completion of work.

Verification of Coverage
Consultant shall furnish the City of Santa Monica with original certificates and amendatory endorsements (or copies of the applicable policy language effecting coverage provided by this clause). All certificates and endorsements are to be received and approved by the City of Santa Monica before work commences. However, failure to obtain required documents prior to the work beginning shall not waive the Consultant’s obligation to provide them.

The City of Santa Monica reserves the right to require complete, certified copies of all required insurance policies, including the endorsements required herein, at any time.

Failure to Maintain Insurance Coverage
If Consultant, for any reason, fails to maintain insurance coverage which is required pursuant to this Agreement, the same shall be deemed a material breach of contract. The City of Santa Monica, at its sole option, may terminate this Agreement and obtain damages from the Consultant resulting from said breach.

Subcontractors
Consultant shall require and verify that all subcontractors maintain insurance meeting all the requirements stated herein. All exceptions must be approved in writing by the Risk Manager.

Footnotes
# 1: Workers’ Compensation insurance coverage is not required if the Consultant does not have employees. The Consultant must, however, execute the City’s Workers’ Compensation Coverage Exemption Declaration Form.

DocuSign Envelope ID: E40D9E3E-2795-4CBE-85C6-23137938095E

5.G.a
Packet Pg. 268 Attachment: HR&A Original Agreement (5747 : Fourth Modification to HR&A Contract) 1 FIRST MODIFICATION OF AGREEMENT NO. 108300 (CCS)
This First Modification of Agreement Number 108300 (CCS) (“First Modification”), entered into as of _________________(“Execution Date”), by and between the City of Santa Monica, a municipal corporation (“City”), and HR&A Advisors, Inc (“HR&A”) is made with reference to the following:

RECITALS
A. On or about November 23, 2020, the City and HR&A entered into Agreement Number 108300 (CCS) for professional services to support drafting and approval of the pending Housing Element Update (“Original Agreement”).

B. The City and HR&A desire to modify the Original Agreement to extend the contract term, include additional services to be performed by HR&A, and increase the contract price to pay for those additional services.

TERMS AND CONDITIONS
Now, therefore, the undersigned parties do hereby mutually agree to modify the Original Agreement as follows:

1. Section 1 of the Original Agreement entitled “Term” shall be deleted in its entirety and replaced with the following paragraph:

Term. This Agreement begins on the Execution Date and terminates on June 30, 2022, unless terminated earlier as set forth in the Original Agreement or extended by the parties in writing.

2. Section 2 of the Original Agreement entitled “HR&A Services” shall be modified by adding the following paragraph:

Additional Services. HR&A will perform all of the additional services (“Additional Services”) described in Exhibit A-1, Scope of Services and Budget. HR&A will complete the Additional Services in accordance with Exhibit A-1.

3. Section 4 of the Original Agreement entitled “Compensation” shall be modified by adding the following paragraph:

Compensation. The City will compensate HR&A for the Additional Services in an amount not to exceed $39,900.00, as set forth in Exhibit A-1. The total contract price for services pursuant to the Original Agreement and this First Modification shall not exceed $258,900.00.

4. Exhibit A-1 is attached hereto and incorporated herein by this reference.

DocuSign Envelope ID: C2B2F9C2-38F8-400B-ABC8-B4117AA919C5 8/10/2021

5.G.b
Packet Pg. 269 Attachment: HR&A Agreement First Modification (5747 : Fourth Modification to HR&A Contract) 2 5. Except as expressly modified by this First Modification, all other terms and conditions of the Original Agreement shall be and remain in full force and effect.

IN WITNESS WHEREOF, the parties have executed this First Modification as of the date and year first written above.

ATTEST:
______________________________

DENISE ANDERSON-WARREN
City
Clerk
APPROVED AS TO FORM:
______________________________

LANE DILG
City Attorney

CITY OF SANTA MONICA,
a municipal corporation
By: ______________________________

RICK COLE
City Manager
HR&A Corporation
#VENDOR
By: _______________________________
DocuSign Envelope ID: C2B2F9C2-38F8-400B-ABC8-B4117AA919C5 Interim City Attorney
George S. Cardona
8/10/2021
HR&A Advisors, Inc.

Paul J. Silvern, Vice President
8/10/2021
Paul J. Silvern
8/10/2021
John Jalili
Interim City Manager
9/7/2021
City Clerk
Denise Anderson-Warren

5.G.b
Packet Pg. 270 Attachment: HR&A Agreement First Modification (5747 : Fourth Modification to HR&A Contract) 3 Exhibit A-1
Scope of Services and Budget
DocuSign Envelope ID: C2B2F9C2-38F8-400B-ABC8-B4117AA919C5

5.G.b
Packet Pg. 271 Attachment: HR&A Agreement First Modification (5747 : Fourth Modification to HR&A Contract) New York | Dallas | Los Angeles | Raleigh | Washington DC June 7, 2021
via email to: [email protected]
Jing Yeo
Planning Manager
Community Development Dept. City Hall, Room 212
1685 Main Street
Santa Monica, CA 90404
Re: Additional Services for Housing Element Update Support Dear Jing:

Per your request, HR&A Advisors, Inc. (HR&A) is pleased to provide a scope and budget for additional services under Professional Services Agreement #108300 (CCS) entered into as of November 23rd, 2020, by and between the City of Santa Monica (City) and HR&A, to support drafting and approval of the pending Housing Element Update. The additional services include feasibility testing to determine whether increased development standards and/or new affordable housing requirements (i.e., in terms of percentages, unit mix and affordability levels) can accelerate development of mixed-income housing in R-1 neighborhoods. HR&A has already engaged John Kaliski Architects (JKA), Danielian Associates, and MGAC as subconsultants using our contingency as originally budgeted. We are requesting budget authorization to provide this additional support, along with preparation for and participation in additional public meetings.

The following sections of this letter present HR&A’s proposed additional services and updated budget to support the City’s Housing Element update.

PROPOSED ADDITIONAL SERVICES
Task 13: R-1 Diagrams (Reimbursement to JKA and Danielian Associates - $9,900) HR&A will engage John Kaliski Architects and Danielian Architects to develop alternative diagrams illustrating massing prototypes on typical City of Santa Monica R1 parcels of 7,500 Sq. Ft. in size and illustrating the immediate neighborhood context. The development programs for each of the alternatives will be based on program and zoning constraint information developed collaboratively between City staff and HR&A.

Deliverables: R-1 diagrams and zoning analysis based on eight development scenarios Task 14: Additional Public Meeting Support
This task is an allowance for HR&A to prepare for and participate in public meetings to present and discuss the results of HR&A analysis for the Housing Element Update. For budgeting purposes, the schedule and budget assume two meetings with the Housing Commission, two with the Planning Commission and one with the City Council, including time to prepare materials for the meetings, contribute to relevant sections of staff reports and PowerPoint presentations, and participate in the meetings. The schedule for these meetings will be determined in consultation with City staff.

Deliverables: HR&A presentation briefing materials and, as needed, written comments on companion City staff presentation.

DocuSign Envelope ID: C2B2F9C2-38F8-400B-ABC8-B4117AA919C5

5.G.b
Packet Pg. 272 Attachment: HR&A Agreement First Modification (5747 : Fourth Modification to HR&A Contract) HR&A Advisors, Inc. Proposal re: Santa Monica AHPP Update and Housing Element Support | 2

PROPOSED REVISED BUDGET
HR&A will complete the additional services with a revised contract total amount of $258,900 allocated by task approximately as follows:

TASKS BUDGET
TASK 1: KICK-OFF MEETING 4,000
TASK 2: SPECIFY 24 PROTOTYPES 26,000
TASK 3: UPDATE MARKET ASSUMPTIONS 24,000
TASK 4: BASE CASE AND INITIAL ANALYSIS CASE FEASIBILITY MODELS 50,000 TASK 5: DOCUMENT 100% A.H OPPORTUNITIES AND CONSTRAINTS 5,000 TASK 6: PRELIMINARY RESULTS BRIEFING AND MEETING 8,000
TASK 7: ALLOWANCE FOR FURTHER FEASIBILITY TESTING 24,000 TASK 8: ALLOWANCE FOR REVISED RESULTS BRIEFING 8,000
TASK 9: DRAFT AND FINAL MEMORANDUM REPORT. 12,000
TASK 10: STAKEHOLDER BRIEFINGS 8,000
TASK 11: PRESENTATIONS TO COMMISSIONS & CITY COUNCIL 20,000 TASK 12: COVID-19 UPDATES 15,000
CONTINGENCY (SUBCONTRACTOR SERVICES) 15,000
TOTAL: $219,000
ADDITIONAL SERVICES:

TASK 13: R -1 DIAGRAMS 9,900
TASK 14: ADDITIONAL PUBLIC MEETING SUPPORT 30,000
REVISED TOTAL: $258,900
**********************
We hope you find the foregoing proposal responsive to the City’s needs. Once finalized, we assume City staff will amend our existing contract with the revised scope of work and compensation.

We can be available to discuss this proposal with you and your colleagues as needed to clarify any issues or discuss any changes that may be required.

Sincerely,
PAUL J. SILVERN,
Vice President
DocuSign Envelope ID: C2B2F9C2-38F8-400B-ABC8-B4117AA919C5

5.G.b
Packet Pg. 273 Attachment: HR&A Agreement First Modification (5747 : Fourth Modification to HR&A Contract) 1 SECOND MODIFICATION OF AGREEMENT NO. 108300 (CCS)
This Second Modification of Agreement Number 108300 (CCS) (“Second Modification”), entered into as of _________________ (“Execution Date”), by and between the City of Santa Monica, a municipal corporation (“City”), and HR&A Advisors, Inc. (“HR&A”) is made with reference to the following:

RECITALS
A. On or about September 23, 2020, the City and HR&A entered into Agreement Number 108300 (CCS) for professional services to support drafting and approval of the pending Housing Element update (“Original Agreement”).

TERMS AND CONDITIONS
Now, therefore, the undersigned parties do hereby mutually agree to modify the Agreement as follows:

1. Section 1 of the Agreement entitled “Term” shall be deleted in its entirety and replaced with the following paragraph:

Term. This Agreement begins on the Execution Date and terminates on June 30, 2023, unless terminated earlier as set forth in the Agreement or extended by the parties in writing.

2. Section 2 of the Agreement entitled “HR&A Services” shall be modified by adding the following paragraph:

Additional Services. HR&A will perform and complete all of the additional services (“Additional Services”) described in and in accordance with Exhibit A-2, Scope of Services and Budget.

3. Section 4 of the Agreement entitled “Compensation” shall be modified by adding the following paragraph:

Compensation. The City will compensate HR&A for the Additional Services in an amount not to exceed $50,000, as set forth in Exhibit A2. The total agreement price for services pursuant to the Original Agreement, the First Modification, and this Second Modification shall not exceed $308,900.

4. Exhibit A-2 is attached hereto and incorporated herein by this reference.

DocuSign Envelope ID: C653D505-FE4B-4228-ACBF-8E27073A1A71 7/14/2022

5.G.c
Packet Pg. 274 Attachment: HR&A Agreement Second Modification (5747 : Fourth Modification to HR&A Contract) 2 5. Execution in Counterparts. This Second Modification may be executed in counterparts with the same effect as if both parties hereto had executed the same document. All counterparts shall be construed together and shall constitute a single modification. Any signature to this Second Modification transmitted electronically through DocuSign or PDF shall be deemed an original signature and be binding upon the parties hereto (it being agreed that such electronic signature shall have the same force and effect as an original signature).

6. Except as expressly modified by this Second Modification, all other terms and conditions of the Agreement shall be and remain in full force and effect.

IN WITNESS WHEREOF, the parties have executed this Second Modification as of the date and year first written above.

ATTEST:
______________________________

DENISE ANDERSON-WARREN
City Clerk
APPROVED AS TO FORM:
______________________________

LANE DILG
City Attorney

CITY OF SANTA MONICA,
a municipal corporation
By: ______________________________

RICK COLE
City Manager
ABC Corporation
#VENDOR
By: _______________________________
DocuSign Envelope ID: C653D505-FE4B-4228-ACBF-8E27073A1A71 7/12/2022
City Attorney

DOUGLAS SLOAN
7/12/2022
Paul J. Silvern, Vice President
Paul J. Silvern
HR&A Advisors, Inc.

City Manager
7/14/2022
David White
City Clerk
7/19/2022
Denise Anderson-Warren

5.G.c
Packet Pg. 275 Attachment: HR&A Agreement Second Modification (5747 : Fourth Modification to HR&A Contract) 3 Exhibit A2
Scope of Services and Budget
DocuSign Envelope ID: C653D505-FE4B-4228-ACBF-8E27073A1A71

5.G.c
Packet Pg. 276 Attachment: HR&A Agreement Second Modification (5747 : Fourth Modification to HR&A Contract) New York | Dallas | Los Angeles | Raleigh | Washington DC January 19, 2022
via email to: [email protected]
Jing Yeo
Planning Manager
Community Development Dept. City Hall, Room 212
1685 Main Street, Santa Monica, CA 90404
Re: Additional Services to Update 2019 AHPP Analysis
Dear Jing:

Per your request, HR&A Advisors, Inc. (HR&A) is pleased to provide additional services and revise our scope of work under the Professional Services Agreement entered into as of November 23rd, 2020, by and between the City of Santa Monica (City) and HR&A. This effort includes updating feasibility analysis for 14 prototypes from our previous analysis, modelling 14 new prototypes in additional commercial areas, and updating real estate market and construction cost assumptions for selected market areas. The new prototypes also include examining the development capacity of city-owned sites and feasibility testing to determine whether increased development standards and/or new affordable housing requirements (i.e., in terms of percentages, unit mix and affordability levels) can accelerate development of mixed-income housing on cityowned sites and R-1 neighborhoods. HR&A has engaged John Kaliski Architects (JKA), Danielian Associates, and MGAC as subconsultants to provide support on design services, cost estimating and public meetings.

The following sections of this letter present an overview of HR&A’s proposed additional services and updated budget to update 2019 AHPP Analysis and support your Housing Element update.

PROPOSED ADDITIONAL SERVICES
Additional Feasibility Testing ($28,020)
HR&A will conduct a series of additional feasibility testing for the minimum floor-area-ratio (FAR) and building height with different assumptions regarding affordability mix and requirements, parking requirements, ground floor program, replacement unit requirement, as well as the amount of on-site and offsite affordable units a 20-unit project can support in Commercial Zones with both condo and rental programs.

Deliverables: HR&A presentation briefing materials with the results of feasibility testing Allowance for Design Consultant (Reimbursement to JKA - $6,980) The additional services are for John Kaliski Architects (JKA) to review daylight plane requirements and provide illustration of viable options in plan and sections. JKA shall illustrate options in relationship to a maximum of three (3) different lot depths and three (3) height above-grade options. JKA will also review height and FAR requirements in discussion with HR&A based on the results of the feasibility testing.

Deliverables: Illustration of daylight plane requirements based on different lot depths and building heights Additional Public Meeting Support ($15,000)
This task is an allowance for HR&A to appear at public meetings to present and discuss the results of this analysis. For budgeting purposes, the schedule and budget assume two with the Planning Commission and one with the City Council, including time to prepare materials for the meetings, contribute to relevant sections of staff reports and PowerPoint presentations, and participate in the meetings. The schedule for these meetings will be determined in consultation with City staff.

Deliverables: HR&A presentation briefing materials and, as needed, written comments on companion City staff presentation.

DocuSign Envelope ID: C653D505-FE4B-4228-ACBF-8E27073A1A71

5.G.c
Packet Pg. 277 Attachment: HR&A Agreement Second Modification (5747 : Fourth Modification to HR&A Contract) HR&A Advisors, Inc. Proposal re: Santa Monica AHPP Update and Housing Element Support | 2

PROPOSED REVISED BUDGET
HR&A will complete the additional services with a revised contract total amount of $308,900 allocated by task approximately as follows:

TASKS BUDGET
TASK 1: KICK-OFF MEETING 4,000
TASK 2: SPECIFY 24 PROTOTYPES 26,000
TASK 3: UPDATE MARKET ASSUMPTIONS 24,000
TASK 4: BASE CASE AND INITIAL ANALYSIS CASE FEASIBILITY MODELS 50,000 TASK 5: DOCUMENT 100% A.H OPPORTUNITIES AND CONSTRAINTS 5,000 TASK 6: PRELIMINARY RESULTS BRIEFING AND MEETING 8,000
TASK 7: ALLOWANCE FOR FURTHER FEASIBILITY TESTING 24,000 TASK 8: ALLOWANCE FOR REVISED RESULTS BRIEFING 8,000
TASK 9: DRAFT AND FINAL MEMORANDUM REPORT. 12,000
TASK 10: STAKEHOLDER BRIEFINGS 8,000
TASK 11: PRESENTATIONS TO COMMISSIONS & CITY COUNCIL 20,000 TASK 12: COVID-19 UPDATES 15,000
SUBCONTRACTOR SERVICES 15,000
SUBTOTAL: $219,000
APPROVED ADDITIONAL SERVICES:

R -1 DIAGRAMS 9,900
ADDITIONAL PUBLIC MEETING SUPPORT 30,000
SUBTOTAL: $258,900
PROPOSED ADDITIONAL SERVICES:

ADDITIONAL FEASIBILITUY TESTING 28,020
ALLOWANCE FOR DESIGN CONSULTANT 6,980
ADDITIONAL PUBLIC MEETING SUPPORT 15,000
REVISED TOTAL: $308,900
**********************
We hope you find the foregoing proposal responsive to the City’s needs. Once finalized, we assume City staff will update our existing contract with the revised scope of work and compensation. We are very familiar with the City contract, and related City contract requirements, and take no exceptions to their terms or conditions.

Sincerely,
PAUL J. SILVERN,
Vice President
DocuSign Envelope ID: C653D505-FE4B-4228-ACBF-8E27073A1A71

5.G.c
Packet Pg. 278 Attachment: HR&A Agreement Second Modification (5747 : Fourth Modification to HR&A Contract) 1 THIRD MODIFICATION OF AGREEMENT NO. 108300 (CCS)
This Third Modification of Agreement Number 108300 (CCS) (“Third Modification”), entered into as of _________________ (“Execution Date”), by and between the City of Santa Monica, a municipal corporation (“City”), and HR&A Advisors, Inc. (“HR&A”) is made with reference to the following:

B. On or about August 10, 2021, the City and HR&A entered into a First Modification of Agreement Number 108300 (CCS) (“First Modification”) for additional services and to extend the term of the contract. The Original Agreement and First Modification may be referred to collectively herein as “the Agreement.”
C. On or about July 14, 2022, the City and HR&A a Second Modification of Agreement Number 108300 (CCS) (“Second Modification”) for additional services and to extend the term of the contract. The Original Agreement, the First Modification, and the Second Modification may be referred to collectively herein as “the Agreement.” D. The City and HR&A desire to modify the Agreement to include additional services to be performed by HR&A and to increase the agreement price to pay for those additional services.

TERMS AND CONDITIONS
Now, therefore, the undersigned parties do hereby mutually agree to modify the Agreement as follows:

1. Section 2 of the Agreement entitled “HR&A Services” shall be modified by adding the following paragraph:

Additional Services to Prepare Report Required by Elections Code § 9212.

HR&A will perform and complete all of the additional services (“Additional Services”) described in and in accordance with Exhibit A-3, Additional Scope of Services.

2. Section 4 of the Agreement entitled “Compensation” shall be modified by adding the following paragraph:

Compensation. The City will compensate HR&A for the Additional Services described in Exhibit A-3 in an amount not to exceed $36,000, as set forth in Exhibit B-3. The total agreement price for services pursuant to the Original Agreement, the First Modification, the Second Modification, and this Third Modification shall not exceed $344,900.

3. Exhibits A-3 and B-3 are attached hereto and incorporated herein by this reference.

DocuSign Envelope ID: D1B408F6-B572-4884-A072-69BB876C5546 8/8/2022

5.G.d
Packet Pg. 279 Attachment: HR&A Agreement Third Modification (5747 : Fourth Modification to HR&A Contract) 2 4. Execution in Counterparts. This Third Modification may be executed in counterparts with the same effect as if both parties hereto had executed the same document. All counterparts shall be construed together and shall constitute a single modification. Any signature to this Third Modification transmitted electronically through DocuSign or PDF shall be deemed an original signature and be binding upon the parties hereto (it being agreed that such electronic signature shall have the same force and effect as an original signature).

5. Except as expressly modified by this Third Modification, all other terms and conditions of the Agreement shall be and remain in full force and effect.

IN WITNESS WHEREOF, the parties have executed this Third Modification as of the date and year first written above.

ATTEST:
______________________________

DENISE ANDERSON-WARREN
City Clerk
APPROVED AS TO FORM:
______________________________

LANE DILG
City Attorney

CITY OF SANTA MONICA,
a municipal corporation
By: ______________________________

RICK COLE
City Manager
ABC Corporation
#VENDO
R
By: _______________________________
DocuSign Envelope ID: D1B408F6-B572-4884-A072-69BB876C5546 City Attorney
8/6/2022
DOUGLAS SLOAN Paul Silvern
Paul J. Silvern, Vice President
HR&A Advisors, Inc.
8/6/2022
City Manager
David White
8/9/2022 8/8/2022
City Clerk
Denise Anderson-Warren

5.G.d
Packet Pg. 280 Attachment: HR&A Agreement Third Modification (5747 : Fourth Modification to HR&A Contract) 3 Exhibit A-3
Additional Scope of Services
Prepare a report, as described in Section 9212 of the California Elections Code, on the impact of the citizens’ initiative measure to Establish Added Funding For Homelessness Prevention, Affordable Housing, And Schools By Amending Santa Monica Municipal Code Chapter 6.96 To Provide A Third Tier Transfer Tax Rate For Property Transfers Of $8,000,000 Or More With An Eleven Member Resident Oversight Committee, seeking to qualify and be placed on the November 8, 2022 ballot. Per the elections code, the report could include any or all of the following items:
(1) Its fiscal impact.
(2) Its effect on the internal consistency of the city’s general and specific plans, including the housing element, the consistency between planning and zoning, and the limitations on city actions under Section 65008 of the Government Code and Chapters 4.2 (commencing with Section 65913) and 4.3 (commencing with Section 65915) of Division 1 of Title 7 of the Government Code.
(3) Its effect on the use of land, the impact on the availability and location of housing, and the ability of the city to meet its regional housing needs. (4) Its impact on funding for infrastructure of all types, including, but not limited to, transportation, schools, parks, and open space. The report may also discuss whether the measure would be likely to result in increased infrastructure costs or savings including the costs of infrastructure maintenance, to current residents and businesses. (5) Its impact on the community’s ability to attract and retain business and employment. (6) Its impact on the uses of vacant parcels of land.
(7) Its impact on agricultural lands, open space, traffic congestion, existing business districts, and developed areas designated for revitalization. (8) Any other matters the legislative body requests to be in the report.

DocuSign Envelope ID: D1B408F6-B572-4884-A072-69BB876C5546

5.G.d
Packet Pg. 281 Attachment: HR&A Agreement Third Modification (5747 : Fourth Modification to HR&A Contract) 4 The report will include the following:
• A summary of the tax measure
• Background on Real Property Transfer Taxes in the City, other cities, and other ballot measures seeking to accomplish similar goals • Potential revenue estimates based on historical sales trends • Discussion of potential revenue uses and their impacts • Discussion of potential risks and impacts of such a tax measure on the local economy and on the City’s finances
The report will be completed in time to be presented to the City Council on July 26, 2022.

DocuSign Envelope ID: D1B408F6-B572-4884-A072-69BB876C5546

5.G.d
Packet Pg. 282 Attachment: HR&A Agreement Third Modification (5747 : Fourth Modification to HR&A Contract) 5 Exhibit B-3
Budget
HR&A Advisors, Inc. shall be compensated for all services as set forth in Exhibit A-3, Scope of Services, in an amount net to exceed $36,000. The total amount of compensation paid to HR&A Advisors, Inc. under the Agreement as modified by this Third Modification shall not exceed $344,900.

DocuSign Envelope ID: D1B408F6-B572-4884-A072-69BB876C5546

5.G.d
Packet Pg. 283 Attachment: HR&A Agreement Third Modification (5747 : Fourth Modification to HR&A Contract)

5.G.e
Packet Pg. 284 Attachment: HR&A Oaks Initiative Form 2023 (5747 : Fourth Modification to HR&A Contract) City Council
Report
City Council Meeting: June 13, 2023
Agenda Item: 5.H
1 of 4
To: Mayor and City Council
From: David Martin, Director, Administration
Subject: Approval of the Pier Corp FY 2023-24 Budget and Work Plan Recommended Action
Staff recommends that the City Council:

1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines;

2. Approve the Santa Monica Pier Corporation Fiscal Year 2023-24 Budget and Work Plan;

3. Authorize the City Manager to execute a fourth modification to agreement #10101 with the Santa Monica Pier Corporation to extend the term through June 30, 2024.

Summary
The Santa Monica Pier is an iconic landmark drawing millions of visitors each year to enjoy one-of-a-kind experiences while strolling above the ocean waves. The City contracts with the Santa Monica Pier Corporation (SMPC) through a Services Agreement to manage certain programs and services at the Pier including marketing, production of community programming such as the highly popular Locals’ Night series, as well as coordination of filming and private event rentals and proctoring the daily street performer lotteries. The Council-appointed SMPC board is also charged with the development of policy guidelines pertaining to sponsorship, marketing, events and leasing, subject to Council approval.

The SMPC is required to prepare an annual budget and business work plan to set forth its goals and objectives for the ensuing fiscal year. In accordance with the Services Agreement, the SMPC is submitting its FY 2023-24 work plan and budget to Council for its

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review and approval. If approved, the SMPC’s Services Agreement is to be extended to June 30, 2024.

Discussion
The SMPC FY 2023-24 Budget (Attachment A) and Work Plan (Attachment B) describe in detail the activities and programs SMPC will undertake in the upcoming fiscal year.

SMPC Budget
The SMPC’s main sources of income are event rentals, filming, corporate promotions and partnerships, followed by the City’s annual grant. SMPC’s FY 2023-24 Budget projects total revenues in the amount of $1,912,000 and estimated total expenditures in the amount of $1,945,000. This will result in a projected shortfall of $33,000 which will be covered by SMPC reserve funds. The SMPC’s budget comparison from the previous year indicates that FY 2022-23 year-end budget was projected to close with an $15,000 deficit but due to a faster than anticipated recovery of revenues, SMPC year-end actuals for FY 2022-23 are projected to end with a surplus of $52,000. An explanatory memo highlighting certain budgetary changes and expectations is detailed in Attachment C.

Revenues
Projected revenues include: City grant funding of $150,000; revenues of $1,415,000 from deck and carousel rentals, corporate promotions and partnerships; $200,000 from filming; $60,000 from other grants and donations; and $87,000 from licensing, guided tours, registration fees and food/beverage and merchandise sales.

Expenditures
Projected expenses include: $980,000 for personnel expenses comprised of salaries, benefits and related services; $430,000 for expenses related to facility charges (e.g. Pier Deck and Carousel rentals) including payments to the City; $430,000 for SMPC-produced Pier programming such as Pier 360, Locals' Night series, Wellness & Waves, Dia de Los Muertos, Save the Pier play, Samo PRIDE and seasonal holidays; $35,000 for marketing; $20,000 for merchandise; and $50,000 for contingencies.

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SMPC Work Plan
The attached FY 2023-24 Work Plan describes the activities SMPC plans to perform during the fiscal year. Efforts will focus on continuing and growing its popular free public programming and community engagement including a new, in-person historical walking tour of the Pier. In addition, given the financial stress placed upon the organization following the impacts of COVID pandemic, the SMPC seeks to also explore other models and methods of fiscal sustainability for its organizational future. SMPC intends to embark on a 3-5 year strategic plan with a 10 year “north star” vision.

Extension of Service Agreement
The Service Agreement between the City and SMPC (Contract No. 10101 CCS) will expire on June 30, 2023. Staff seeks authorization to extend the Service Agreement term through June 30, 2024, to coincide with the 2023-24 Fiscal Year.

Commission Action
The SMPC Board of Directors approved the FY 2023-24 budget and Work Plan on April 17, 2023.

Environmental Review
The approval of the SMPC FY 2023-24 budget and work plan is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) (Common Sense Exemption) of the CEQA Guidelines, which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment”. The work plan provides activities and programs that would not result in a significant adverse physical impact on the environment, and therefore, is exempt from CEQA.

Past Council Actions
Meeting Date Description
6/14/2022 Approval of FY 2022-23 Budget and Work Plan and extension of Services Agreement through 6/30/2023
6/22/2021 Approval of FY 2021-22 Budget and Work Plan and extension of Services Agreement through 6/30/2022

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7/14/2020 Approval of FY 2020-21 Budget and Work Plan and extension of Services Agreement through 6/30/2021
7/14/2015 Council Authorization of five-year Services Agreement with SMPC. Contract No. 10101 (CCS)
Financial Impacts and Budget Actions
Funds of $150,000 for the Services Agreement with the SMPC are included in the FY 2023-25 Proposed Biennial Budget in the Community Development Department. No additional financial impact or budget action is necessary.

Annual Services Agreement Extension
Agreement FY 2023-24
Amount
Account Number Annual Agreement
Amount
10101 150,000 53700002.540150 $150,000
Prepared By: Elana Buegoff, Pier Administrator
Approved Forwarded to Council
Attachments:

A. SMPC 2023-24 Budget
B. SMPC FY2023-2024 Work Plan
C. SMPC Budget Memo

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Proposed Projected Actuals Proposed
2022/2023 2022/2023 2023/2024
Income
City Funding $150,000 $150,000 $150,000
Facilities - Event Deck Rental $600,000 $780,000 $675,000 Facilities - Film Permits $275,000 $130,000 $200,000
Facilities - Merry Go-Round Rental $100,000 $100,000 $130,000 Facilities - Corporate Promotions $200,000 $250,000 $250,000 Partnerships $200,000 $150,000 $360,000
Food and Beverage Sales $25,000 $25,000 $30,000
Licensing and New Revenue (Tours) $15,000 $15,000 $25,000 Registration Fees $15,000 $15,000 $17,000
Merchandise Sales $15,000
Donations and Grants $30,000 $40,000 $60,000
TOTAL INCOME $1,610,000 $1,655,000 $1,912,000
Expenses
Facilities - City Refund - Merry Go-Round $55,000 $48,000 $60,000 Facilities - City Refund - Pier Deck $300,000 $300,000 $325,000 Facilities - Event Staffing, Security & Supplies (Tours) $20,000 $40,000 $45,000 People - Wages & Salaries $650,000 $600,000 $685,000
People - Benefits (Health Ins, Payroll Tax, Wrkrs Comp, 403b) $150,000 $170,000 $190,000 People: Meetings, Office Supplies, Retreat $35,000 $40,000 $40,000 People - Services, Audit, Insurance, (Consultant) $35,000 $45,000 $65,000 Marketing Creative $10,000 $10,000 $12,000
Marketing Promotions, Travel $20,000 $20,000 $23,000
Pier Produced Programming (Pier 360, Locals' Night, Wellness & Waves, Dia de los Muertos, Holidays, "STP" Play, PRIDE) $300,000 $300,000 $430,000 Merchandise $20,000
Planning Contingency (<3%) $50,000 $30,000 $50,000
TOTAL EXPENSE $1,625,000 $1,603,000 $1,945,000
NET INCOME ($15,000) $52,000 ($33,000)
NOTE: The deficits in budget will be covered by Pier Reserves.

Santa Monica Pier Corporation Budget 2023/2024

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Packet Pg. 289 Attachment: SMPC 2023-24 Budget (5765 : Approval of the Pier Corp FY 2023-24 Budget and Work Plan) Item 5-b
FY2023-2024 Work Plan
This document lays out the strategic work plan of the Santa Monica Pier Corporation for Fiscal Year 2023-2024, a year of exploration, learning and planning for the future, while simultaneously building upon the great traditions and experiences that have made the Santa Monica Pier one of the most iconic destinations in the world.

The Pier is approximately the size of a 3-block city street, upon which are an amusement park, an aquarium, a trapeze school, 8 restaurants, 13 licensed vendor carts, 4 retail shops and a 100-year-old antique carousel that is housed within an official Nationally landmarked building. Fishing and street performance add to the daily scope of activities on the Pier, as well as frequent brand activations, art installations and free-and-open-to-thepublic programming. A spacious, pinpointable, outdoor venue, the Pier has emerged from two years of a pandemic-rattled and weary world to once again welcome approximately 10-12 million visitors throughout the past year.

The Santa Monica Pier experience has long been defined by activity, and the past year has seen an incredible blossom of activity. Whether by attending events, dining at favorite restaurants, enjoying the thrills of the amusement park, or even simply watching the sunset, visitors came to enjoy their preferred activity in droves. For the Pier Corporation, this translated to a very good year, but with the dramatic effects of lengthy closure and caution still fresh in mind.

For the new fiscal year, the Pier Corporation will enter a new phase of reimagination, planning for its own organizational future while simultaneously building upon what the organization does best with its treasured free public events and continually seeking new ways to provide a better and even more memorable experience to those millions of visitors.

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Packet Pg. 290 Attachment: SMPC FY2023-2024 Work Plan (5765 : Approval of the Pier Corp FY 2023-24 Budget and Work Plan) Map of Santa Monica Pier 202
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Packet Pg. 291 Attachment: SMPC FY2023-2024 Work Plan (5765 : Approval of the Pier Corp FY 2023-24 Budget and Work Plan) Santa Monica Pier Corporation Board of Directors
Board Chair Vice-Chair Secretary/Treasurer Nicholas Rolston Randi Parent Jeffrey Jarow Christopher Foster Daniel Hall Misti Kerns Carter Rubin Santa Monica Pier Corporation Staff Members
Executive Director: Jim Harris Operations Director: Aurora Piña Activations Manager: Anne Railsback Brand Manager: Julieta Giner Facilities & Weekend Specialist: Corey Hart Events & Office Specialist: Leo Erickson

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Packet Pg. 292 Attachment: SMPC FY2023-2024 Work Plan (5765 : Approval of the Pier Corp FY 2023-24 Budget and Work Plan) Accomplishments Of Fiscal Year 2022-2023
Fiscal Year 2022-2023 will be well-remembered as being the long-awaited re-emergence toward normality for the Pier Corporation as well as for the Pier in general. After over two years comprised of temporary closure, an abundance of caution and looming uncertainty due to the COVID-19 pandemic, the first full year of social gatherings, events, and business operations fully (and finally) resumed at the Pier with visitor numbers often resembling the levels prior to March 2020. While some areas of business continued to be tentative, the eagerness of people to visit and enjoy the Pier proves its vitality and meaning to a wide range of visitors that includes tourists as well as the regional and local communities.

The final weekend of the previous fiscal year (FY2021-2022) saw the return of the Pier Corporation’s marquee event, Pier 360. This annual beach culture and athletics festival has long been billed as the Pier’s “official kickoff to summer”, and its return after a two-year hiatus served as a grand declaration that the Pier – and Summer – were back and open for enjoyment. The following weeks (the first weeks of Fiscal Year 2022-2023) re-emphasized that statement as they ushered in a new era of outside-produced public and private events, highlighted by the Major League Baseball All-Star Oceanfront Experience in mid-July, and paved the way for the most successful year of event offerings in the Pier’s history.

That same fervor extended into most other revenue streams for the Pier Corporation, with activations/corporate promotions and Merry Go-Round party & event rentals seeing a return to pre-pandemic levels. Curiously, filming on the Pier (and in the overall Los Angeles area) endured an inexplicable drought during the normally busy fall and winter seasons, providing a reminder of how tenuous and unpredictable the Pier Corporation’s income sources can be.

The success of event and activation bookings enabled the Pier Corporation to expand its own free public programming offerings, which included the extraordinarily beautiful Dia de los Muertos celebration and the increasingly popular monthly Locals’ Nights, both of which incorporate and utilize the entire Pier.

Building upon the results of the constructive and informative sessions of the previous year’s study groups, the Pier Corporation continued with a reconfigured lineup of new study groups for Fiscal Year 2022-2023, with the year’s three new groups focused upon community engagement, policy & planning, and large projects. Each study group was composed of representatives of the Pier Corporation board and staff, Pier businesses, City Staff, and members of the local community. A brief definition and highlighted accomplishments follows:
• Community Engagement Study Group continued the brainstorming work of the previous year’s study group, with a mission to engage with Santa Monicans in ways that heighten appreciation of the Pier’s role in the life of the community in general and the personal emotional connections it evokes, ensuring the long-term sustainability of the Pier as a relevant and cherished community asset. The group

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Packet Pg. 293 Attachment: SMPC FY2023-2024 Work Plan (5765 : Approval of the Pier Corp FY 2023-24 Budget and Work Plan) invited representatives of local service organizations and local non-profits to help explore ideas and provide advice regarding outreach and encouragement for such organizations to hold their meetings at the Pier as well as to participate in monthly Locals’ Nights.
• Policies and Procedures Study Group was formed with a mission to review and recommend policies and long-term strategic plans that provide sustainable and inclusive economic benefit and a welcoming, positive experience for stakeholders to the Pier Corporation Board of Directors. From this group came the recommendation to the Board to approve a newly proposed Extended Events Policy for the Pier, which was then submitted to the City for adoption.
• Large Projects Study Group was assigned to determine, discuss, and advise the Pier Corporation Board of Directors about upcoming projects that will likely have significant impacts on the Pier. Such projects include the Pier Bridge Replacement Project, Santa Monica Bay Foundation’s prospective restoration of the Pier’s breakwater, future alternative use ideas for the Pier Parking Deck, the prospect of moving the Heal the Bay Aquarium up onto the Pier deck, and the City’s current proposed bicycle ramp from beach to Pier deck.

The recent fiscal year also included the establishment of new relationships with two of the Santa Monica Pier’s most similar worldwide counterparts: the Brighton Palace Pier of the United Kingdom and the Navy Pier of Chicago.
o Brighton Palace Pier - In July 2022 representatives from the Pier Corporation joined Santa Monica Travel & Tourism, Santa Monica Sister Cities, and Santa Monica’s Mayor Pro Tem for the official signing of a “Friendship Cities” agreement between Santa Monica and Brighton & Hove. Much of the delegation’s visit was spent at the Brighton Palace Pier, where staff from both iconic piers exchanged experiences with operations, events, marketing and management. The two venues have since enjoyed a mutually valued relationship.
o Navy Pier – In late-winter 2023 representatives from Navy Pier visited with Santa Monica Pier staff, followed by Santa Monica Pier’s staff reciprocating with a visit to Chicago’s Navy Pier. As with the Brighton visit, the staff from each venue exchanged information and ideas, highlighted by the prospective marketing opportunities of each of these iconic American piers being at the opposite ends of another icon – Route 66.

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Packet Pg. 294 Attachment: SMPC FY2023-2024 Work Plan (5765 : Approval of the Pier Corp FY 2023-24 Budget and Work Plan) Fiscal Year 2023-2024
The new fiscal year shows great promise, as well as considerable challenges, with the Pier Corporation building upon the successes and lessons learned from FY2022-2023 and turning an eye toward the future of the organization.

In FY2023-2024 the Pier Corporation will focus and build upon the comprehensive Pier visitor experience. Included in this will be exploration into improvements to wayfinding, information-sharing, and in-person interaction. The organization will also continue to build upon what it is best known for: providing unforgettable free public events including the summer kickoff Pier 360 beach festival, monthly Locals’ Nights, and the enchanting Dia de los Muertos celebration as well as interactive campaigns such as “Dear Pier”.

In recognition of the prospective impacts of several upcoming large-scale projects such as the replacement of the Pier Bridge and major events that include the 2026 World Cup and 2028 Summer Olympics, the Pier Corporation will embark upon determining the possible impacts of each, as well as how to best prepare for them. Recalling lessons learned from the pandemic and its impact upon the Pier Corporation’s revenue model, coupled with the prospective impacts of some of the aforementioned upcoming projects and events, the Pier Corporation will focus on researching and exploring better models and methods of fiscal sustainability as well as embark upon a 3-to-5-year strategic plan with a 10-year NorthStar vision for its own future.

PIER VISITOR EXPERIENCE
The Pier is a large public venue upon which are many privately-owned businesses, yet from the perspective of the average visitor, it is all one comprehensive destination. As such, there is a general expectation of congruity which, unfortunately, does not really exist. The Pier Corporation is eager to focus on filling that void in a number of ways including the use of 21st century technology alongside traditional information sharing methods such as signage and good old-fashioned-person interaction.

Included in the improved experience will be the launch of new, in-person historical walking tours of the Pier, while the organization continues to develop new ways of keeping the century-plus of the Pier’s story alive and relevant to its visitors.

FREE PUBLIC PROGRAMMING
Complimentary to the comprehensive Pier Visitor Experience is the Pier Corporation’s programming slate its traditional free annual events and campaigns including:

Pier 360 Beach Festival – The Pier’s official summer kickoff event featuring paddleboard races, swim races, beach volleyball, skateboarding, and lifeguard

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Packet Pg. 295 Attachment: SMPC FY2023-2024 Work Plan (5765 : Approval of the Pier Corp FY 2023-24 Budget and Work Plan) competitions, all complimented by live music, deck activities and a popup “Museum of Beach Culture” which celebrates Santa Monica’s historic role in these highly popular activities.

Locals’ Night – Introduced in Spring 2022, this event has already become established as a Pier tradition. Operating under the theme of “By Santa Monicans, for Santa Monicans”, it is a monthly showcase of everything that is special about this city.
“Save the Pier!” Play – The annual retelling of the true story of how the Pier was saved from its slated demolition by a community grass-roots movement, staging a battle between City Hall and a dedicated collection of fishermen & fisherwomen, bumper car operators, surfers, restaurant cooks and wait staff and people who simply loved the Pier.

Wellness & Waves – A six-week Saturday morning yoga series produced once, sometimes twice annually at the peaceful west end of the Pier.

Dia de los Muertos – Honoring our ancestors and respecting cultural tradition, this is arguably the most beautiful experience on the Pier, with extraordinary altars inside the historic Merry Go-Round Building, a Chumash blessing, a parade featuring Aztec dancers, ballet folklorico, and mariachis, this relatively new annual event is a true inspiration.

SAMO Pride - The Pier Corporation partners with Downtown Santa Monica, Santa Monica Place and the City of Santa Monica to celebrate June as “Pride Month” in very unique Santa Monica fashion.

Seasonal Campaigns – Winter holidays, Valentine’s Day (month), Black History Month and other seasonal campaigns round out the calendar of Pier Corporation offerings and recognition, primarily through social media.

While this is a full slate of free public programs and campaigns, the Pier Corporation will continue to explore opportunities for more, with a specific focus toward a Lunar New Year campaign in Winter 2024 and possible arts festival in Fall 2024.

PREPARATIONS FOR UPCOMING MAJOR CITY PROJECTS & EVENTS
Several large-scale projects and are foremost on the minds of the Pier Corporation including the 2026 FIFA World Cup, Pier Bridge Replacement Project (2025-2028) and the 2028 Summer Olympics. While each of these projects presents potentially good things for the Pier and surrounding area, they are equally concerning in that they will also have dramatic impacts on accessibility and traffic (both pedestrian and vehicular).

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Packet Pg. 296 Attachment: SMPC FY2023-2024 Work Plan (5765 : Approval of the Pier Corp FY 2023-24 Budget and Work Plan) The Pier Corporation will work with City Staff, Pier businesses and the neighboring community to study and plan for the impacts that each of these projects and events may present, likely in ad hoc committees assembled with the same makeup of the organization’s study groups which have proven so successful in recent years.

PIER CORPORATION FISCAL SUSTAINABILITY REVIEW
While FY2022-2023 proved to be a better-than-expected year for revenue from rentals and activations on the Pier deck and in the Merry Go-Round, revenue for film permits suffered drastically and unexpectedly. Corporate partnerships too, have proven more elusive than in the past. The organization is currently exploring emphasis on seeking grants and donations, capitalizing on its status as a non-profit organization, and is also turning focus on developing new and unique merchandise to sell both to local retail outlets and directly through its website.

Coupled with the significant reduction of the annual grant from the City of Santa Monica for the fiscal year, and with the devastating impact the pandemic placed upon the organization in very recent memory, the need for the Pier Corporation to review and reimagine its funding model is ever-present in the minds of the Pier Corporation’s Board of Directors.

The possible impacts of upcoming large projects and events add to the impetus of the need to work with City of Santa Monica Staff to investigate alternative models of partnership. 3-5 YEAR STRATEGIC PLAN WITH 10 YEAR NORTHSTAR VISION
With the devastating impact of the pandemic mostly behind us, the Pier Corporation will turn its focus toward its future, both immediate and long-term. The organization will develop an overall strategic plan to proceed through the expected and unexpected events and prospective complications of the next several years with an ultimate vision toward 10 years in the future, likely with the guidance of a professional consultant.

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Packet Pg. 297 Attachment: SMPC FY2023-2024 Work Plan (5765 : Approval of the Pier Corp FY 2023-24 Budget and Work Plan) Date: April 14, 2023
To: Members of the Santa Monica Pier Corporation Board of Directors From: Jim Harris, Executive Director
Re: Summary of Proposed Budget for FY2023-2024
Attached is the proposed budget for the Santa Monica Pier Corporation for Fiscal Year 2023-2024, which includes comparison Fiscal Year 2022-2023’s proposed budget and the actuals that are projected for the fiscal year’s conclusion.

The following are note on some specific line items:

INCOME:
• Facilities – Event Deck Rental: The FY2022-2023 projected actuals will be significantly higher due to the Major League Baseball All-Star Oceanfront event which, at the time that the budget was presented, was not yet a certainty and ultimately provided an unexpected significant boost in income. The proposed FY2023-2024 budget number is aligned with a return to more normal expectations.
• Facilities – Film Permits: FY2022-2023 included an unexpected drought of film bookings on the Pier during the late fall and winter months, which are usually very active. Since the reasons for that drop in business are still unclear, the expectation for FY2023-2024 have been lowered to a more modest level.
• Facilities – Merry Go-Round: Rental rates for FY2023-2024 event and party rentals in the facility will be increased by 20%, maintaining competitive pricing as interest in indoor events has recently been rejuvenated.

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Packet Pg. 298 Attachment: SMPC Budget Memo (5765 : Approval of the Pier Corp FY 2023-24 Budget and Work Plan) • Partnerships: The new Locals’ Night event series and summer kickoff Pier 360 Beach Festival have drawn significant interest from prospective sponsors for the upcoming fiscal year.
• Merchandise Sales (New Line Item): The organization expects significant sales of merchandise that will include new specialty items as well as the release of the new 2nd edition of the Pier history book. • Donations and Grants: The organization will employ increased focus in this area, better utilizing its non-profit status.

EXPENSES:
• Facilities – Event Staffing, Security & Supplies: FY2022-2023 included unexpected levels in repairs to the small electric “peewee” event support truck and a surge in amusement park tickets purchased for resale. Neither of these expense items are expected to be as significant for FY2023-2024, but materials for the new year’s historical walking tour plus upgrades to existing event furniture and supplies will add to this line item. • People – Wages & Salaries: The organization intends to increase staff by one full time assistant-level position plus one part-time weekend position. • People – Services, Audit, Insurance, Consultant: During FY2021-2022 the Pier Corporation was named in two separate law suits, neither of which directly involved the organization (one on a beach walking path, the other underneath the pier deck, and neither associated with a Pier Corporation event). Nevertheless, the organization’s insurance company at the time chose to settle both suits, then subsequently drop service to the Pier Corporation, leaving the organization to source a new insurance company while having two negative marks on its record within the previous year and, as a result, a $10,000 increase over the expected insurance rate.

This cancellation and sourcing occurred after the FY2022-2023 budget was approved by the Board and submitted to the City. An addition to this line item for FY2023-2024 will be a prospective consultant to assist with the organization’s 3-5 year strategic plan indicated in its work plan. • Pier Produced Programming: The burgeoning popularity of the new Locals’ Night and Dia de los Muertos events indicates need for growth.

Likewise, the Pier 360 Beach Festival is expected to expand its offerings as it continues to grow as the area’s marquee summertime beach kickoff event.

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Packet Pg. 299 Attachment: SMPC Budget Memo (5765 : Approval of the Pier Corp FY 2023-24 Budget and Work Plan) City Council
Report
City Council Meeting: June 13, 2023
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To: Mayor and City Council
From: David Martin, Director, Administration
Subject: Approval of agreements with Main Street BID regarding: Fiscal Agent, Disbursement and Revocable License
Recommended Action
Staff recommends that the City Council authorize the City Manager to:

1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines.

2. Negotiate and execute the following agreements with the Main Street Business Improvement Association (MSBIA) for a term of five (5) years with two five-year renewal options that renew on the same terms and conditions:
a. a new Fiscal Agent Agreement to manage and administer the businessbased assessment fees and any other revenue collected for the promotion and marketing of the Main Street Business Improvement Area; and b. a new Revocable License Agreement which grants MSBIA a license to operate and maintain the decorative lights in the public right-of-way between Pico Boulevard and the southern City boundary, just south of Marine Street
c. a new Disbursement Agreement to administer the property-based assessments collected and use these funds in the Main Street Commercial District for the decorative lighting and sidewalk cleaning, in accordance with Resolution 10325 (CCS).

Summary
Since 2005, the Main Street Business Improvement Association (MSBIA) has administered the assessment funds that the Business Improvement District (BID) receives, through business- and property-based assessments, and MSBIA administers the operation and maintenance of the decorative lights. In order for MSBIA to continue these responsibilities, the following new agreements are required: a Fiscal Agent

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Agreement, a Disbursement Agreement, and a Revocable License Agreement. Staff recommends that the term for each agreement and license be for five (5) years with two five-year options that renew on the same terms and conditions. These agreements are administered by the Economic Development Division and the Engineering and Street Services Division.

Discussion
Santa Monica has four (4) established BIDs – Downtown Santa Monica, Inc. (DTSM), Pico Improvement Organization (PIO), Montana Avenue Merchant Association (MAMA) and the Main Street Business Improvement Association (MSBIA). These BIDs were created to raise funds for marketing, supplemental cleaning services, and promotions--all factors that help to create more vibrant and viable business districts.

The Main Street BID was created in 1984 to finance promotion, advertising and events through a business-based assessment district. The City collects a special assessment from the businesses within each BID based on a formula created for that BID. The City retains five percent of the amount collected for its administrative expenses, and remits the remainder to a fiscal agent to be used by the BID Board of Directors for programs and projects that benefit their members.

The Main Street Business Area Festoon Lighting and Sidewalk Cleaning Assessment District (Assessment District) is a property-based assessment district that was formed in 2008 to finance additional sidewalk cleaning and to finance the ongoing operation and maintenance of the decorative lighting along Main Street. The decorative lighting was installed in 2005 along both sides of Main Street, between Pico Boulevard and the southern City boundary, just south of Marine Street using grant funds from the City.

The MSBIA is a non-profit corporation that represents the businesses on Main Street and contracts with the City to administer the assessment funds collected from businesses and property owners through the following agreements.

Fiscal Agent Agreement
The City collects a special annual assessment from the businesses within each BID based on a formula created for that BID. The City retains five percent of the amount

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collected for its administrative expenses and remits the remainder to a fiscal agent to be used by the BID Board of Directors for programs and projects that benefit their members in accordance with the BID’s Bylaws. Fiscal agents:

1. Receive assessments from the City and deposit them into the BID’s bank account;

2. Prepare, sign and mail checks for the BID upon receiving approved invoices;

3. Provide monthly checking account and money market account reconciliation statements;

4. Provide monthly financial statement and cash flow statements to both the BID and the City; and

5. May prepare the BID’s annual tax returns.

At its September 13, 2005 meeting, and again at its January 22, 2013 meeting, Council authorized an agreement with the MSBIA to provide its own fiscal agent services and administer its assessment funds. The Main Street BID uses a fee-based bookkeeping firm and provides monthly and annual accounting reports to the City.

On August 15, 2013, the City and MSBIA entered into a Fiscal Agent Agreement (CCS 9689) which allowed MSBIA to manage and administer the Main Street BID assessment fees and any other revenue collected by the City in accordance with the terms of that Agreement and Ordinance Number 1940 (CCS). The Fiscal Agent agreement had an initial five-year term with five successive one-year option periods, thereby extending the term to August 15, 2023. Staff is requesting the City enter into a new Fiscal Agent Agreement for a five-year term with two five-year options.

License Agreement
The MSBIA has administered the operation and maintenance of the decorative lights since they were installed in 2005 using initial grant funds provided by the City. The decorative lights are hung from light poles along both sides of Main Street, beginning at Pico Boulevard and extending to the southern City boundary, just south of Marine Street (the “License Area”). The Main Street commercial district benefits from the decorative lighting as the lights help to enhance the evening atmosphere and the business vitality

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in this retail and restaurant district. The MSBIA and City are in the process of evaluating replacing the existing decorative lighting with newer technology.

At its September 28, 2004 meeting, Council approved the grant of Mitigation Funds to MSBIA for the capital and operational costs associated with the installation, operation and maintenance of the decorative lighting system in the License Area. On October 12, 2004, the City and MSBIA entered into a Revocable License and Funding Agreement No. 8389 (CCS) which granted MSBIA $220,000 to install the decorative lighting and the agreement granted MSBIA a license to operate and maintain the lighting in the public right-of-way in the License Area. As the grant funds were expended, the businesses and property owners along Main Street indicated that they wanted to retain the decorative lights permanently. The property owners within the boundaries of the Main Street BID voted in 2008 to create a property-based assessment district and assess themselves to pay for the ongoing operation and maintenance of the lights as well as to pay for supplemental sidewalk cleaning services.

Currently, MSBIA collects approximately $55,000 annually with $35,000 of this amount reserved for maintenance of these lights and the remaining $20,000 of this annual amount is spent on sidewalk cleaning. A First Modification was executed on October 10, 2011, that updated the agreement to be a Revocable License Agreement with a tenyear term that expired on October 12, 2021. Staff is requesting the City enter into a new Revocable License Agreement for a five-year term with two five-year options. This would give MSBIA and City staff additional time to assess options for a capital improvement project to replace the existing lights due to their age and wear. In addition, MSBIA will be assessing funding options such as the creation of a new, expanded assessment district and work with the City to explore other potential sources of funds to assist with future lighting replacements.

Disbursement Agreement
The Disbursement Agreement (CCS 9041) is associated with the formation of the Assessment District. This agreement specifies the timeframe when the City will disburse the Assessment District funds to MSBIA and requires that the assessment proceeds shall be used by MSBIA in accordance with the Engineer’s Report and Resolution No. 10325 (CCS) (Resolution). At its July 22, 2008 meeting, Council adopted this Resolution which approved the formation of the Assessment District

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consistent with the Engineer’s Report and approved levying the assessments for the Assessment District.

The term of the original Disbursement Agreement expired February 24, 2014. A first modification was executed on February 10, 2014 and extended the term for one-year to February 24, 2015. A second modification was executed on January 16, 2015, with an initial three-year term and five successive one-year option periods, thereby extending the term to August 15, 2023. Staff is requesting the City enter into a new Disbursement Agreement for a five-year term with two five-year options.

Environmental Review
The MSBIA agreements with the City are categorically exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines, which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.” The agreements establishes administrative parameters for the MSBIA, and therefore, it can be seen with certainty that the recommended actions would not result in adverse physical impacts on the environment, and as such, is categorically exempt from CEQA.

Past Council Actions
Meeting Date Description
01/22/2013
(attachment A)
Fiscal Agent Services for Business Improvement Districts 07/22/2008
(attachment B)
Formation of the Main Street Assessment District
09/13/2005
(attachment C)
Termination of VEDC Contract and Approval of Contract
with Main Street Improvement Association
09/28/2004
(attachment D)
Grant of Mitigation Funds to MSBIA
Financial Impacts and Budget Actions
There is no immediate financial impact or budget action necessary as a result of the recommended actions. The City will continue to retain five percent of the amount collected as its administrative expense, and remit the remainder to the fiscal agent.

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Prepared By: Erika Cavicante, Senior Development Analyst Approved Forwarded to Council
Attachments:

A. 2013 01.22 Fiscal Agent Services
B. 2008. 07.22 Formation of Main Street Assessment District C. 2005. 09.13 Termination of VEDC Contract and Approval of Contract with Main Street Business Improvement Association
D. 2004. 09.28 Grant of Mitigation Funds to MSBIA

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Attachment: 2013 01.22 Fiscal Agent Services (5772 : Approval of Agreements with MSBIA: Fiscal Agent, Disbursement and Revocable License)

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Attachment: 2013 01.22 Fiscal Agent Services (5772 : Approval of Agreements with MSBIA: Fiscal Agent, Disbursement and Revocable License)

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Attachment: 2013 01.22 Fiscal Agent Services (5772 : Approval of Agreements with MSBIA: Fiscal Agent, Disbursement and Revocable License) c7®
LYaf City Council Report
Santa Monica
City Council Meeting: July 22, 2008
Agenda Item: ~-g
To: Mayor and City Council
From:. Andy Agle, Director, Housing and Economic Development Subject: Formation of the Main Street Business Area Assessment District Recommended Action
Staff recommends that the City Council conduct a public hearing on the proposed formation of the Main Street Business Area Festoon Lighting and Sidewalk Cleaning Assessment District. Should the final tabulation of the ballots received by the close of the public hearing tonight represent 50 percent or more in favor of forming the proposed assessment district, staff recommends that the City Council:

1. adopt a Resolution confirming the results of the ballot tabulation forming the Assessment District and authorizing the levy of assessments for FY 2008-09; and

2. authorize a loan in the amount of up to .$132,000 for the acquisition. of replacement bulbs for the festoon lighting.

Executive Summary
On Mav, 27, 2008, the City Council adopted Resolution No. 10294 (CCS) declaring its intention to set a public hearing for tonight, July 22, 2008, to consider the formation of the Main Street Business Area Festoon Lighting and Sidewalk Cleaning Assessment District. Ballots were mailed to all affected property owners on June 6, 2008, and must be returned before the close of the public hearing. Ballots will be tabulated and certified by the Oftice of the City Clerk after the close of tonight's public hearing.

Should the outcome of the balloting be favorable, Council is asked to approve the formation of the Assessment District, authorize the levy of assessments for fiscal year 2008-09, and authorize a loan in the amount of up to $132,000 for the acquisition of the replacement bulbs for the festoon lighting.

Background
In 2002, the City of Santa Monica set aside $250,000 in construction mitigation funds for business disruptiori and loss caused by a sewer rehabilitation project in the Main Street 1 5.I.b
Packet Pg. 309 Attachment: 2008. 07.22 Formation of Main Street Assessment District (5772 : Approval of Agreements with MSBIA: Fiscal Agent, area. On October 12, 2004, the City authorized a grant and license agreement to the Main Street Business Improvement Association ("MSBIA") to fund the installation of the decorative or "festoon" lights. The MSBIA explored a number of design possibilities for the decorative lighting and chose a Lumisphere xenon light product from England. This light was chosen partly for its substantial appearance, and partly for its durability, as the product is rated to last five years or longer in a marine environment.

In 2005, the lights were installed along both sides of Main Street, between Pico Boulevard on the north, extending to the southern City bouridary just south of Marine Street. Thus far, the operating and maintenance costs associated with these lights have been reimbursed to the MSBIA from the remainder of this grant, but the remaining grant will be fully expended by the end of 2008.

In 2007, Main Street merchants expressed a desire that the MSBIA explore options for additional sidewalk cleaning. The City of Santa Monica currently provides two ( 2) thorough sidewalk cleanings in the area annually. MSBIA contracted with the City's Solid Waste Management Division to provide monthly sidewalk cleanings for 1, month, 200/ ah amount equivalent to the City's cost.

In early 2007, MSBIA recognized that it needed additional funds to continue paying for the festoon lighting and additional sidewalk cleaning. For FY 2007-08; the City Council approved aone-time appropriation for MSBIA in the amount of $25,000 to be used for the continued maintenance of the festival lighting on Main Street, $50,000 for a Main Street Assessment Study and $9,600 for additional sidewalk cleaning.

Discussion
The City, in cooperation with MSBIA, engaged Harris & Associates to assist with the formation of an assessment district in the Main Street area to finance additional sidewalk cleaning and the ongoing operation and maintenance of the festoon lighting along Main Street. The assessment district is being formed pursuant to the provisions of the Benefit Assessment Act of 1982 ("the 1982 Act"). This differs from the Property and Business Improvement District Law of 1994 ("the PBID") which is the law used by 2 5.I.b
Packet Pg. 310 Attachment: 2008. 07.22 Formation of Main Street Assessment District (5772 : Approval of Agreements with MSBIA: Fiscal Agent, Bayside District Corporation to form their proposed assessment district. The PBID funds improvements that the 1982 Act cannot fund such as safety programs, and homeless outreach.. The 1982 Act may fund only the maintenance and operation of public systems such as street lighting, street and sidewalk maintenance, and flood control. PBID assessment districts have a term of five years unless amended by a charter city's local ordinance whereas assessment districts formed under the 1982 Act can continue as long as those services are provided. PBID assessment districts require an advisory group, while the 1982 Act does not. Another difference is with the formation process.. PBIDs require a petition of property owners whereas the 1982 AcYdoes not.

The annual assessment on 157 properties within the proposed district will generate approximately $ 88,632. This includes the annual operating and maintenance costs associated with the xenon festoon lighting ($29,900); and the annual costs for the sidewalk cleaning ($23,320). The assessment also includes $35,412 annually to be used toward the replacement of the bulbs, either through debt service repayment or direct payment, depending upon the timing of the replacement project. It is anticipated that over the next three years there will be a need for a full bulb replacement which is estimated to cost $132,000. The proposed assessment, which. generates $35,412 per year for five years, can be used to finance the bulb replacement as needed, or could be used to repay a loan of up to $132,000, depending upon the timing of the replacement.

Should the assessment district be formed, the Council will be asked to enter into an agreement with MSBIA to arrange for the installation of the replacement bulbs for the festoon lighting. The portion of the annual assessment devoted to lighting maintenance and sidewalk cleaning may increase over time in accordance with increases in the ahnual CPI. Once the district is formed, the Council will be asked to set the assessment rate annually.

The costs for the bulb replacement program and to operate the Festoon Lights along Main Street are spread among the properties adjacent to Main Street based on the area of the property. The. costs for the sidewalk cleaning are spread to the parcels directly 3 5.I.b
Packet Pg. 311 Attachment: 2008. 07.22 Formation of Main Street Assessment District (5772 : Approval of Agreements with MSBIA: Fiscal Agent, adjacent to the sidewalks being cleaned based on the linear feet (LF) of frontage being cleaned.

Annual assessments range from $24.59 to $4, 96. 418. The median total assessment is 332.05, as shown below:

Assessment Rate Calculation Table
Improvements FY 2008-09 Assessment Maximum Median
Estimated Units FY 2008-09 Annual
Budget Assessment Rate* Assessment
Festoon Lights Bulb 35,412 17.293 Benefit 2, 82/047. Benefit 137.20 Replacement Acres Acre
assessed for 5 years
onl
Festoon Lighting O & M 29,900 17.293 1, 07/729. Benefit 115.85 Benefit Acres Acre
Sidewalk Cleaning 23,320 14, 96814. 1. LF58/ 79.00
Linear Feet
The attached Assessment Diagram shows the boundaries of the district. The lines and. dimensions of each. parcel within the District are those lines and dimensions shown on the maps of the Assessor of the County of Los Angeles.

After the public hearing has been conducted, the assessment ballots that are submitted prior to the close of the public hearing will be tabulated based on the proposed assessment amount. It is anticipated that the ballot tabulation will be concluded tonight and that the City Council will be able to receive the results of the balloting this evening.

If 50 percent of more of the ballots returned, weighted by the assessments, are in favor of the proposed assessment district, then staff recommends that the City Council adopt a Resolution of Formation for the assessment district and levy assessments. In order for the assessment to be on the property tax rolls for FY 2008-09, the assessment must be submitted to the County of Los Angeles by August 10, 2008. If the 50 percent threshold is not reached, the District cannot be formed. 4 5.I.b
Packet Pg. 312 Attachment: 2008. 07.22 Formation of Main Street Assessment District (5772 : Approval of Agreements with MSBIA: Fiscal Agent, Previous Council Actions
On November 12, 2002 Council approved various contracts and expenditures for the Ocean and Main Street Sewer Rehabilitation Project, including setting aside $250,000 of Mitigation Funds into a special Public Works Fund to finance future capital improvements in the area. From this budget allocation, $26, 62428. was expended for the preparation of the electrical specifications, plans and structural calculations. The grant amount to MSBIA ( formerly known as the Main Street Merchants Association or MSMA) of $220,000 covered its contract cost of $205,000 with Associated Group and provided an additional $15,000 for other operational project costs.

On September 28, 2004, City Council approved the grant of Mitigation Funds to MSBIA and authorized the City Manager to enter into a License Agreement in the amount of 220,000 for the design, installation, maintenance and operation of the festival lighting system improvements.

Santa Monica City CouncilJune 13, 2023

Santa Monica City Council
June 13, 2023