Scotts Valley City Council
August 2, 2023

Cyber Threat Preparedness Published on May 18, 2023 Page 1 of 10 The 2022–2023 Santa Cruz County Civil Grand Jury
Requires the
Scotts Valley City Council
to Respond by August 16, 2023
to the Findings and Recommendations listed below
which were assigned to them in the report titled
Cyber Threat Preparedness
Phishing and Passwords and Ransomware, Oh My!
Responses are required from elected officials, elected agency or department heads, and elected boards, councils, and committees which are investigated by the Grand Jury. You are required to respond and to make your response available to the public by the California Penal Code (PC) §933(c).

Your response will be considered compliant under PC §933.05 if it contains an appropriate comment on all findings and recommendations which were assigned to you in this report.

Please follow the instructions below when preparing your response.

Required Response from the Scotts Valley City Council
Cyber Threat Preparedness Due by August 16, 2023 Page 2 of 10 Instructions for Respondents
Your assigned Findings and Recommendations are listed on the following pages with check boxes and an expandable space for summaries, timeframes, and explanations.

Please follow these instructions, which paraphrase PC §933.05:

1. For the Findings, mark one of the following responses with an “X” and provide the required additional information:
a. AGREE with the Finding, or
b. PARTIALLY DISAGREE with the Finding – specify the portion of the Finding that is disputed and include an explanation of the reasons why, or c. DISAGREE with the Finding – provide an explanation of the reasons why.

2. For the Recommendations, mark one of the following actions with an “X” and provide the required additional information:
a. HAS BEEN IMPLEMENTED – provide a summary of the action taken, or b. HAS NOT YET BEEN IMPLEMENTED BUT WILL BE IN THE FUTURE – provide a timeframe or expected date for completion, or c. REQUIRES FURTHER ANALYSIS – provide an explanation, scope, and parameters of an analysis to be completed within six months, or d. WILL NOT BE IMPLEMENTED – provide an explanation of why it is not warranted or not reasonable.

3. Please confirm the date on which you approved the assigned responses:

We approved these responses in a regular public meeting as shown in our minutes dated ________________.

4. When your responses are complete, please email your completed Response Packet as a PDF file attachment to both
The Honorable Judge Syda Cogliati [email protected] and The Santa Cruz County Grand Jury [email protected].

If you have questions about this response form, please contact the Grand Jury by calling 831-454-2099 or by sending an email to [email protected].

Required Response from the Scotts Valley City Council
Cyber Threat Preparedness Due by August 16, 2023 Page 3 of 10 Findings
F15. Although Scotts Valley’s managed service provider is very knowledgeable and capable of providing cybersecurity services, there is no single city official with cybersecurity oversight, potentially leading to a poor understanding of the threats and an inadequate response to a cyber attack. __ AGREE
__ PARTIALLY DISAGREE
_X_ DISAGREE
Response explanation (required for a response other than Agree):

We agree that the Scotts Valley managed service provider is very knowledgeable and capable of providing cybersecurity services. In addition, the Administrative Services Director overseas the City’s managed services provider contract including cybersecurity services. The Administrative Services Director and City Manager meet at least monthly with the managed service provider where reports of phishing, cyber incidents and training statistics are reviewed and discussed. In the event of an immediate threat or incident, there is immediate communication between the managed service provider, City Manager, and Administrative Services Director. The City Manager and Administrative Services Director have an appropriate understanding of the potential cybersecurity threats and the managed service provider ensures the City has the tools in place to respond to a cyber attack. Therefore we disagree that our organizational structure as the potential to lead to a poor understanding or inadequate response to a cyber attack.

Required Response from the Scotts Valley City Council
Cyber Threat Preparedness Due by August 16, 2023 Page 4 of 10 F16. Scotts Valley does not have a current Cybersecurity Plan that defines security policies, procedures, and controls required to protect its networks and devices, potentially increasing the risks of vulnerabilities. _X_ AGREE
__ PARTIALLY DISAGREE
__ DISAGREE
Response explanation (required for a response other than Agree):

Required Response from the Scotts Valley City Council
Cyber Threat Preparedness Due by August 16, 2023 Page 5 of 10 F17. Scotts Valley does not have a current Incident Response Plan, which could exacerbate the effects of a cyber incident such as increase the time a network is unavailable or raise the potential financial costs of a resolution. __ AGREE
_X_ PARTIALLY DISAGREE
__ DISAGREE
Response explanation (required for a response other than Agree):

Although the City does not have a written Incident Response Plan, we have reporting channels in place in the event of a cyber incident and access to a cybersecurity response consultant via our risk management insurance pool who is under contract to provide cybersecurity incident response and maintains plans accordingly.

Required Response from the Scotts Valley City Council
Cyber Threat Preparedness Due by August 16, 2023 Page 6 of 10 F18. Scotts Valley does not participate in any cybersecurity information sharing groups to enhance best practices, rather they depend on their contractor to stay informed, which makes the City last to know of critical cyber threats. __ AGREE
_X_ PARTIALLY DISAGREE
__ DISAGREE
Response explanation (required for a response other than Agree):

Via the City’s insurance pool, MBASIA, cybersecurity information is shared among the 10 city members and our contracted risk management consultants. In addition, our managed service provider stays informed of the cybersecurity environment and alerts the City of potential threats. The City’s relationship with a contracted managed service provider does not make the City any less informed or more vulnerable. In fact the team we are served by is more informed and provides a broader skillset, knowledge base and faster response times than we could expect if the contract was replaced by 1-2 City staff. That being said, there are always more opportunities for information sharing and collaboration which the City, via it’s managed service provider, will pursue.

Required Response from the Scotts Valley City Council
Cyber Threat Preparedness Due by August 16, 2023 Page 7 of 10 Recommendations
R15. By mid-2023, Scotts Valley should assign a city official as the lead for cybersecurity for the city. This individual should oversee the contractor’s performance in cybersecurity and ensure city leaders are well informed on emerging threats, cybersecurity challenges, and information provided from regional and state entities. (F15)
__ HAS BEEN IMPLEMENTED – summarize what has been done
__ HAS NOT YET BEEN IMPLEMENTED BUT WILL BE IN THE FUTURE – summarize what will be done and the timeframe
__ REQUIRES FURTHER ANALYSIS – explain the scope and timeframe (not to exceed six months)
_X_ WILL NOT BE IMPLEMENTED – explain why
Required response explanation, summary, and timeframe:

The City already oversees the managed service provider’s performance via the Administrative Services Director and City Manager.

Required Response from the Scotts Valley City Council
Cyber Threat Preparedness Due by August 16, 2023 Page 8 of 10 R16. Working with its IT contractor, by Fall 2023, Scotts Valley should write and implement a Cybersecurity Plan that is shared with all city officials to demonstrate comprehensive security measures and executive-level cyber threat awareness. (F16)
__ HAS BEEN IMPLEMENTED – summarize what has been done
_X_ HAS NOT YET BEEN IMPLEMENTED BUT WILL BE IN THE FUTURE – summarize what will be done and the timeframe
__ REQUIRES FURTHER ANALYSIS – explain the scope and timeframe (not to exceed six months)
__ WILL NOT BE IMPLEMENTED – explain why
Required response explanation, summary, and timeframe:

The City will work with the managed service provider in developing a written Cybersecurity Plan by 11/30/2023. The plan will be shared with those who need to know and have a role in implementing security measures. The plan will not be publicly shared or available due to its sensitive nature.

Required Response from the Scotts Valley City Council
Cyber Threat Preparedness Due by August 16, 2023 Page 9 of 10 R17. By Fall 2023, Scotts Valley should write an Incident Response Plan that clearly delineates the steps it will take in response to a cyber attack, the responsibilities of identified officials, and the coordination required with state and federal officials for each type and level of cyber attack. (F17) __ HAS BEEN IMPLEMENTED – summarize what has been done
_X_ HAS NOT YET BEEN IMPLEMENTED BUT WILL BE IN THE FUTURE – summarize what will be done and the timeframe
__ REQUIRES FURTHER ANALYSIS – explain the scope and timeframe (not to exceed six months)
__ WILL NOT BE IMPLEMENTED – explain why
Required response explanation, summary, and timeframe:

The City will work with our managed service provider and cyber insurance consultant to develop a written Incident Response Plan by 11/30/2023.

Required Response from the Scotts Valley City Council
Cyber Threat Preparedness Due by August 16, 2023 Page 10 of 10 R18. Scotts Valley should participate in local, regional, and state cybersecurity organizations for information sharing by the end of 2023. (F18) __ HAS BEEN IMPLEMENTED – summarize what has been done
_X_ HAS NOT YET BEEN IMPLEMENTED BUT WILL BE IN THE FUTURE – summarize what will be done and the timeframe
__ REQUIRES FURTHER ANALYSIS – explain the scope and timeframe (not to exceed six months)
__ WILL NOT BE IMPLEMENTED – explain why
Required response explanation, summary, and timeframe:

The City will work with the managed service provider in identifying and selecting appropriate organizations to share cybersecurity information with by 11/30/2023.

AGENDA ITEM 7.

DATE: 8/2/2023
City of Scotts Valley

CITY COUNCIL STAFF REPORT
DATE: 8/2/2023
TO: Honorable Mayor and City Council
FROM: Chris Lamm, Public Works Director
APPROVED: Mali LaGoe, City Manager
SUBJECT: Award Professional Services Agreement: Environmental Innovations

SUMMARY OF ISSUE
The Public Works Department is responsible for a number of environmental compliance activities across multiple disciplines including: stormwater; wastewater; solid waste; recycling and organics associated with AB341, AB1826 and SB1383; and the City’s wastewater and stormwater discharge permits. Compliance activities include inspection, outreach and education, training, reporting and enforcement when necessary.

In support of City staff, Environmental Innovations has provided environmental compliance services for the City since 2007. With expertise in the various compliance categories and with local offices enabling quick response when called upon, they are uniquely qualified to support the City in the activities proposed.

Tasks are divided into 3 categories: Source Control and Environmental Compliance, Stormwater Environmental Compliance with an MS4 NPDES (Stormwater) Compliance, and AB1826/SB1383 Organic Waste Diversion Program Compliance as follows:

Source Control and Environmental Compliance
• Assess all business and industry in Scotts Valley for potential to impact wastewater and/or stormwater. Maintain a database of sites to monitor, sites to inspect, and sites considered “dry” or not a potential impact. • Inspect 100 businesses per year considered potential impact. Inspect and regulate by permit 2-3 significant industrial users.
• Enforcement Response of wastewater compliance, estimating 10 cases of enforcement/year
• Plan reviews for new construction pertaining to environmental compliance as needed
MS4 NPDES (Stormwater) Permit Compliance FY 2023/24

AGENDA ITEM 7.

DATE: 8/2/2023
• Program Management – implement the enforcement response plan for stormwater violations
• Education and Outreach – oversee outreach to schools, retail stores that sell household chemicals such as fertilizer and pesticides, and businesses adjacent to the creeks.
• Staff & Site Operator Training and Education – biennial training that includes general stormwater education, update on new technologies and responsibilities • Public Involvement and Participation – create opportunities for citizens to get involved with and learn about stormwater through sponsoring and/or promoting activities (e.g., stream/beach/lake clean-ups, Snapshot Day) • Illicit Discharge Elimination – inventory and inspections included above in Environmental Compliance.
• Field Sampling to detect & inventory illicit discharges • Pollution Prevention/Good Housekeeping – inspects hotspot facilities to check for compliance at least once a year; checks for discharges at least once a quarter
• Program Effectiveness Assessment and Implementation: Include the BMP effectiveness assessment and trash capture implementation and reporting • Total Maximum Daily Load (TMDL) reporting & compliance requirements • Annual Reporting: Prepare and submit annual reports with supporting documentation; generate and provide backup documents where required; ensuring that paper files are Audit ready.

AB1826/SB1383 Organic Waste Diversion Program Compliance • Participation and Compliance – ensures that all businesses, multi-family dwellings, and residential waste accounts subscribe to organic waste collection services or apply for exemptions; maintains, processes, and tracks waiver requests
• Education and Outreach – maintains and updates lists of Tier 1 & 2 generators and provide them with information on complying with AB1826 & SB1383 • Recordkeeping and Reporting – prepares and submits annual report to CalRecycle and maintains records
• Enforcement – Will issue warnings and notices of violations to account holders that do not comply with SB1383
Tasks are provided by appropriately qualified personnel such as Senior Scientist/Program Manager, Compliance Inspector, and Interns. Rates for the personnel are included in the attached proposal from Environmental Innovations. The total value of the proposal for all tasks is $107,285.

AGENDA ITEM 7.

DATE: 8/2/2023

FISCAL IMPACT
he scope of services and fee $107,285 associated with the services provided are currently budgeted as contract services in the FY2023/24 operating budget. Services benefitting wastewater operations compliance are funded through the Wastewater Enterprise Fund. Stormwater and solid waste compliance efforts are funded through Public Works Operating Budget (General Fund).

Wastewater Enterprise Fund $ 34,550
Public Works Operating Budget (General Fund) $ 72,735

STAFF RECOMMENDATION
Staff recommends that Council authorize the City Manager to execute an agreement with Environmental Innovations for environmental compliance services, in a form acceptable to the City Attorney.

TABLE OF CONTENTS

1. Scotts Valley Environmental Innovations Proposal 2023-24

2023/24 Scope of Work for Wastewater, NPDES / MS4,
Solid Waste Environmental Compliance,
Source Control, and Transportation Consulting
Submitted by:

Environmental Innovations, Inc.

July 19th, 2023

July 19, 2023
City of Scotts Valley
Attn: Chris Lamm
Public Works Director
RE: 2023/24 Proposal and Scope of Work
Dear Mr. Lamm:

Thanks for the opportunity to continue offering services to the City of Scotts Valley giving us this opportunity to propose work for the 2023/2024 fiscal year. As you know, Environmental Innovations (EI) has been conducting the following services for the City of Scotts Valley:
❖ Environmental compliance and source control since 2007; ❖ Stormwater/NPDES Permit compliance since 2009;
❖ Transportation grant services since 2015, and;
❖ Implementation of AB341/AB1826/SB1383 recycling and organic waste diversion requirements since 2019.

EI is uniquely qualified to perform this work. We are a local, sustainability consulting firm working with several municipalities in the region, across California, and in partnership with nine other states. EI provides environmental consulting services to businesses, non-profits, institutions, local, state, and the federal government in the areas of Green Business, environmental awareness, public outreach, environmental compliance, wastewater pretreatment, and sustainability planning and management.

This past year we obtained a $21,000 grant from CalRecycle to help offset the costs of implementing SB1383 requirements. In 2017, we obtained over $700,000 in grant funding for the City to do road improvements and active transportation outreach. We also implemented a grant for the safe disposal of sharps (needles) and pharmaceutical waste regionally in the County of Santa Cruz in 2010. We have also been the key drivers behind the Monterey Bay Green Business Program as well as the California Green Business Network. We were the catalyst for fryer oil from Scotts Valley being used to make biodiesel as part of an EPA grant.

We are happy to modify this proposal to suit your needs. EI looks forward to the opportunity to do this inspiring work. Please do not hesitate to contact us with questions.

Sincerely,
Josephine Fleming
Environmental Scientist and Owner
[email protected]

Scope of Environmental Compliance Services in the City of Scotts Valley Environmental Innovations (environmentalin.com, EI) provides environmental consulting services to businesses, non-profits, institutions, and local governments in the areas of Green Business, environmental awareness, public outreach, Environmental Compliance/Wastewater Pretreatment, and Sustainability Planning and Management. Our strengths lie in the following:
❖ Excellent Facilitation and Communication: EI coordinates many multi-stakeholder groups that frequently have competing interests. We can recognize individual strengths and highlight them in group settings. We are also able to leverage sharing costs for work with neighboring Cities and Counties that have the same mandates. We maintain strong relationships with neighbors and higher state regulatory agencies, such as the Regional Water Quality Control Board. ❖ Data and Technology Strong: We are the architects and ongoing developers of the software used to track green businesses in California through the certification program while simultaneously measuring environmental outcomes. Our system, GreenBizTracker, is leased by nine other states. We research the best and most cost-effective solutions to meeting regulatory mandates and tracking of the data necessary to comply. We can tie in Scotts Valley work with other work we do in the region, making the City’s contribution to public outreach and partnership stronger. ❖ Experienced Wastewater and Stormwater Experts: Jo has been working in wastewater and stormwater environmental compliance for over 15 years with significant experience in gaining compliance from business and industry with the least amount of conflict possible. Julianne has a Masters in Applied Marine and Watershed Science from CSU Monterey Bay and Steve has over 30 years of experience in Environmental Compliance in the cities of Santa Cruz and San Jose. Corona brings expertise in bilingual outreach and assisting businesses achieve sustainable practices. The team can dovetail the three programs through public outreach, technical assistance, and incentives to make the programs more educational than they are regulatory. Julianne also has significant knowledge in watershed modeling and complying with the MS4 NPDES permit. ❖ Sustainable Results: We are proud to have long-term clients. Many of the environmental programs we have started continue to run independently. We design our work to have lasting effects, and to benefit our clients. There’s nothing we enjoy more than seeing municipal clients get long-term credit for our work.

Project Description: The City of Scotts Valley requested a proposal to provide the following:
❖ Source Control and Environmental Compliance
❖ Stormwater Environmental Compliance with an MS4 NPDES Permit. ❖ Solid Waste and Recycling Compliance with AB 341, AB 1826, and SB 1383 ❖ Transportation Funding Development as-needed
❖ Plan review as-needed

Source Control and Environmental Compliance Workplan
Assess all business and industry in Scotts Valley for potential adverse impact to wastewater and/or stormwater and maintain a database of sites to monitor, sites to inspect, and sites considered “dry” or not a potential impact.

Inspect 100 businesses per year that may pose an adverse impact on storm or wastewater and inspect and regulate by permit 2-3 significant industrial users. Enact enforcement response wastewater compliance, estimating 10 cases of enforcement/year Review plans for new construction pertaining to environmental compliance on an as-needed basis.

National Pollution Discharge Elimination System (NPDES) Permit for Small Municipal Stormwater Systems Workplan
The original NPDES permit expired in 2018. The updated permit with new requirements is expected to be issued in 2024. Until then, jurisdictions must continue to carry out the requirements of the prior permit which include:

E.6 – Program Management
Use Enforcement Response Plan developed in Permit Year 3 (PY3), to enforce procedures and actions and identify the Permittee’s responses to violations and describe how the Permittee will address repeat and continuing violations by implementing progressively stricter responses as needed to achieve compliance.

E.7 – Education and Outreach
The Public Education and Outreach Program increases the knowledge and awareness of a targeted audience about the impacts of urban runoff and non-storm water discharges on receiving waters, and potential BMP solutions for the target audiences, thereby reducing pollutant releases to the MS4 and the environment. It is a combination of jurisdictional and regional programs consisting of the following:
● Schools - Watershed education targeting middle-school children. ● Outreach and Workshops - These are aimed at specific sectors. This year, we propose to work with retail stores which sell household chemicals like fertilizer and pesticides to implement point-of-sale info to suggest less harmful alternatives and hold periodic workshops at the retail site. Last year we did a FaceBook and Instagram campaign with ads featuring stormwater pollution prevention tips and BMPs
E.7.b. Staff and Site Operator Training and Education
This biennial training shall include a general stormwater education component, any new technologies, operations, or responsibilities that arise during the year, and the permit requirements that apply to the staff being trained. Employees shall receive clear guidance on appropriate stormwater BMPs to use at municipal facilities and during typical O&M activities.

E.8 – Public Involvement and Participation Program
Create opportunities for citizens to participate in the implementation of BMPs through sponsoring activities (e.g., stream/beach/lake clean-ups, storm drain stenciling, volunteer monitoring and educational activities). Ensure the public can easily find information about the Permittee’s storm water program. Actively engage in the Permittee’s IRWMP or other watershed-level planning effort. ● Snapshot Day - Annual event that involves the public directly in water quality monitoring in local creeks.
● Storm Water Resource Plan – developed with the IRWM group in PY3 and PY4, implementation occurred in PY4 and PY5.
● Property Owners and Managers - specific outreach as it relates to maintaining outdoor areas.

E.9 – Illicit Discharge and Elimination
Permittees must have an existing up-to-date outfall map, develop and enforce a program to detect, investigate, and eliminate illicit discharges, including illegal dumping, into its system, to the extent allowable under law. Priority outfall list is updated annually.

E.9.b. Illicit Discharge Source/Facility Inventory
The Permittee shall maintain an inventory of all industrial/commercial facilities/sources within the Permittee's jurisdiction (regardless of ownership) that could discharge pollutants in storm water to the MS4. We utilize the inventory to identify facilities for inspections of potential illicit discharges and determine if the facilities that are required to be covered under the Statewide Industrial General Permit have done so. We also update the inventory annually and assess priority areas for the presence of illicit discharges at least once over the length of the permit term. Methods include field observations, field screening, inspections, and any other appropriate and effective survey methods.

E.9.c. Field Sampling to Detect Illicit Discharges
The Permittee shall sample any outfalls that are flowing or ponding more than 72 hours after the last rain event. The Permittee shall also conduct dry weather sampling (more than 72 hours since the last rain event) of outfalls annually identified as priority areas. Permittee shall verify that indicator parameter Action Level Concentrations are not exceeded and conduct follow up investigations per Section E.9.d. if the action level concentrations are exceeded. Any remaining outfalls with dry weather flow will be targeted for pathogen reduction efforts.

E.11 – Pollution Prevention/Good Housekeeping
The Permittee shall use SWPPP developed in PY4 to assess pollutant hotspots. At least once per year, the Permittee shall conduct a comprehensive inspection of each hotspot facility, including all stormwater BMPs, in accordance with the facility-specific inspection procedures and inspection checklist. At least once per quarter visually observe discharge locations from hotspot facilities. Visual observations shall be documented, and records kept with the SWPPP. This inspection shall be done in accordance with the developed standard operating procedures. The inspection report shall also include any identified deficiencies and the corrective actions taken to correct the deficiencies.

E.11.g. Maintenance of Storm Drain System
We inspect storm drain systems all high priority, catch basins and systems annually and ensure the following is done:
● Clean storm drains – Clean high priority catch basins and other systems. ● Labeling catch basins – Ensure that each catch basin in high foot traffic areas includes a legible storm water awareness message
● Maintain surface drainage structures –Removal of trash and debris from high priority areas shall occur annually prior to the rainy season.

E.14 – Program Effectiveness Assessment and Implementation The Program Effectiveness Assessment and Improvement Plan assesses BMP and program effectiveness in terms of the following Outcome Levels:
● Storm water program activities
● Awareness
● Behavior
● Pollutant load reductions
● MS4 discharge quality (where assessment is supported by MS4 discharge quality data) ● Receiving water conditions
E.15 – Total Maximum Daily Loads Compliance Requirements Several watersheds within Santa Cruz County have been identified by the State of California as impaired waterbodies pursuant to Section 303(d) of the Federal Clean Water Act (CWA). The overarching goal of each TMDL is to identify sources of contamination and develop strategies to meet specific targets within a 20 to 25-year timeframe. Carbonera Creek has TMDLs for sediment and bacteria. Extensive stakeholder collaboration between the regional stakeholders to identify MS4 pollution sources and implement best management practices (BMPs), monitoring programs, and modeling tools to aid in achieving each TMDL is carried out each year and documented in an annual report that includes contributions from the County of Santa Cruz and the Cities of Santa Cruz, Scotts Valley, and Capitola.

E.16 – Annual Reporting Program
Permittees shall prepare and submit an annual report by October 15th, with documentation supporting required activities from the previous permit year beginning July 1st and ending June 30th. The Permittee is responsible for maintaining documentation as necessary to demonstrate fulfillment of all NPDES MS4 Permit requirements.

AB1826/SB1383 Organic Waste Diversion Program Compliance Participation and Compliance
Ensure that all business, multi-family dwellings, and residential waste accounts subscribe to organic waste collection service or apply for an exemption.

Issue limited exemption waivers for de minimis volumes and physical space constraints and maintain records:
● Maintain online form for waiver request
● Evaluate waiver requests on case-by-case basis and grant waiver when criteria have been met
● Track waivers for reporting purposes
Education and Outreach
Maintain a list of and annually provide Tier 1 generators utilizing the three‐container system with information on properly separating materials, organic waste prevention, on‐site recycling, methane reduction benefits, how to recycle organic waste, a list of approved haulers, and information related to food recovery.

Maintain a list of and annually provide Tier2 generators utilizing the three‐container system with information on properly separating materials, organic waste prevention, on‐site recycling, methane reduction benefits, how to recycle organic waste, a list of approved haulers, and information related to food recovery.

Annually provide self‐haulers with information regarding their requirements (outlined in Section 70.3)
Annually provide businesses that generate edible food waste with information regarding the jurisdiction’s edible food recovery program, generator requirements, and food recovery organizations.

Record Keeping & Reporting
Submit an annual report to CalRecycle by the August 1
st due date.

Maintain all implementation records in a central location (physical or electronic) that can be made available to or accessed by CalRecycle within one business day.

Enforcement
As of January 1
st
, 2024, jurisdictions may receive notices of violation from CalRecycle for noncompliance with the requirements of SB1383. It may be necessary to demonstrate compliance by serving a notice of violation (NOV) to any waste account holder refusing to comply.

The waste hauler may ask jurisdiction representatives to issue warnings and NOVs to account holders refusing to curb contamination of the waste stream.

Project Tasks and Estimated Costs
Source Control and Environmental Compliance Timeline
Estimated
Hours
Estimated
Cost
Assess all business and industry in Scotts Valley for potential to impact wastewater and/or stormwater. Maintain a database of sites to monitor, sites to inspect, and sites considered “dry” or not a potential impact.

FY 23/24 10 1,100
Inspect 100 businesses per year considered potential impact. Inspect and regulate by permit 2-3 significant industrial users.

FY 23/24 300 27,500
Enforcement Response of wastewater compliance, estimating 10 cases of enforcement/year
FY 23/24 30 3,750
Plan reviews for new construction pertaining to environmental compliance As needed 20 2,200 Solid Waste and Recycling Compliance Timeline
Estimated
Hours
Estimated
Cost
Ensure the requirements and record keeping of organic material and recycling are met in accordance with SB1383, AB341, and SB1826
FY 23/24 200 22,000
Enforcement response: serve notices of violation to noncompliant businesses FY 23/24 40 5,000 Submit Electronic Annual Report (EAR) to CalRecycle Due Aug 1st 40 5,000 MS4 NPDES Permit Compliance FY 2020/21 Timeline
Estimated
Hours
Estimated
Cost
E.6 Program Management: Implement the enforcement response plan for stormwater violations, estimating 10 cases of enforcement/year.

FY 23/24 20
2,500
E.7 Education and Outreach: oversee school outreach conducted by CWC , Property Managers outreach, and outreach to businesses adjacent to the creeks.

FY 23/24 36
4,500
E.8 Public Involvement and Participation. Trash TMDL and CBSM may have a heavier aspect this FY.

FY 23/24 40
5,000
E.9 Illicit Discharge Elimination (E.9b inventory and inspections included above in Environmental Compliance.

FY 23/24 25
3,125
E.9c Field Sampling to detect illicit discharges Annually 20 2,500 E.11 Pollution prevention/good housekeeping inspection Quarterly 20 2,500 E.14 Program Effectiveness Assessment and Implementation: Include the BMP effectiveness assessment and trash capture implementation and reporting
FY 23/24 45
5,625
Total Maximum Daily Load (TMDL) reporting requirements FY 23/24 20 2,500 Annual Reporting: Answer SMARTS questions (10), generate and provide backup documents where required (10), ensure that paper files are Audit ready, an ongoing task (20).

Due 10/16/23 40
5,000
Tracking, reporting, client requests, and administration FY 23/24 7,485 Total $107,285

Assurances: EI services are done with Professional and General Liability insurance up to 2,000,000.

Workers’ Compensation and automobile insurances of up to $1,000,000. Although EI maintains the extensive insurances often required by government and institutional clients, EI has never been involved in any lawsuit or litigation for any of its work. EI will provide a Certificate of Insurance, naming the City of Scotts Valley as additional insured upon request.

Rates: It is expected that this project will be completed by the Senior Scientist and Compliance Inspector.

However, if speed or budget requires, a Student Intern could be utilized.

Hourly Rate Sheet
Senior Scientist / Program Manager $125
Compliance Inspector $110
Intern $50

References
EI delivers programs successfully within the budget and schedule indicated on the contract. Following is a table detailing most recent and relative clients. Any client may be contacted for references for verifying the quality of work provided.

Project Name Client/Contact Description of Work Performed Compliance Management,
Outreach and SB1383
Organics Recycling
Program Implementation
City of Marina
Brian McMinn
Public Works Director
[email protected]
Worked with waste hauler to ensure that all
business and residential waste accounts are
compliant with the latest organic material
recycling laws
Single-use Plastics and
Foodware Ordinance
Technical Assistance and
Outreach
City of Seaside
Beth Rocha, (831)
899-6728
[email protected]
Foodware Ordinance Technical Assistance and
Outreach - Created “Turn the Tide on Plastic”
campaign and outreach materials, direct technical
assistance and outreach to 150 businesses and
food facilities, emphasis on switching to reusables.

Partnered with ReThink Disposable.

California State University
Monterey Bay (CSUMB)
Lacey Raak, (831)
582-5508, and Anya Spear,
(831) 582-5098
[email protected]
Performed detailed Scopes of Work for Custodial
and Landscaping Services to ensure sustainable
operations. Assisted with STARs reporting for
recognition and stormwater compliance. Drafted a
Materials Management and Conservation Plan to
reach required diversion goals.

Foodware Aware Program County of San Mateo, Office
of Sustainability
Eun-Soo Lim
(650) 599-1498
[email protected]
Coordinate all aspects of the GBP in concert with
county staff.

Lead on the Foodware Aware Program for 21
Cities and up to 4,000 food facilities.

Resumes
Josephine (Jo) Fleming
Executive Director, California Green Business Network
President, Environmental Innovations
Jo has nearly 30 years experience in the environmental realm in a wide breadth of scientific research, environmental remediation, commercial/industrial pollution prevention, environmental outcome data and community-based social marketing programs to address some of the most pressing environmental problems of our time. Jo was integral to establishing over twenty regional Green Business Programs, a statewide Green Business Network, a groundbreaking fryer to fuel program, and one of the first comprehensive pharmacy collections of used sharps and unwanted medicine waste for safe disposal. She has been involved in implementation of municipal foodware ordinances, organic recycling and edible food recovery, and stormwater and wastewater compliance. Jo enjoys designing methods to measure success before implementing programs and has environmental outcome data for every project. She has a Bachelor of Science in Environmental Science and a Minor in Spanish. She has helped green hundreds of businesses, and serves as the Executive Director of the California Green Business Network and is the founder of Environmental Innovations, Inc.. Jo led the company to grow ethically as a certified B Corp, attracting and retaining top talent and a diverse team.

Julianne Rhodes
Senior Scientist and Senior Program Manager
Julianne has worked in both the public and private sectors developing specifications for on-site regulatory compliance of projects involving the assessment and removal of hazardous materials from 1987 to 1996. She gained extensive project, personnel, technology and contract management experience during her 12 years as engineering manager at Cruzio.com and subsequently earned a Masters in Applied Marine and Watershed Science from California State University Monterey Bay. Her focus on water quality and conservation efforts has led to projects working for the Monterey Peninsula Water Management District, Ventana Wilderness Alliance, Coastal Watershed Council, Farmers for Water Quality, the Watershed Institute at CSUMB, the Greater Monterey Integrated Regional Water Management Group, City of Scotts Valley, and the City of Salinas. She has developed Storm Water Pollution Prevention Plans (SWPPPs) for both the municipal and industrial NPDES permit program.

Maria (Corona) Corona
Social Equity and Social Media Outreach Coordinator
Corona is a sustainability professional with an emphasis on social media marketing, graphic design and environmental justice. She does community outreach and marketing efforts for the 40+ programs in the California Green Business Network (CAGBN) and is the City of Watsonville Green Business Coordinator, offering assistance to businesses in both English and Spanish. Corona works specifically with Community-Based Organizations to increase participation in vulnerable communities so that the Green Business advantage is uniform and equitable in the State of California. It is expected that Corona will be available as a pro bono advisor to assist with outreach to Latinx communities and advice in working with food facilities.

Before joining EI, Corona was part of a team at Ecology Action that helped increase Spanish-speaking business registration within the six Monterey Bay Area Green Business Programs and create an outreach strategy for working with underrepresented communities. As Co-chair for the Education for Sustainable Living Program at UC Santa Cruz, Corona helped provide a student-organized, student-facilitated forum to bring topics such as environmental justice, waste reduction, green purchasing, food sovereignty, and other environmental issues to the wider Santa Cruz community. She graduated from the University of California, Santa Cruz with an Environmental Studies B.A. and Latin American Latino Studies & Sociology B.A.

Steve Hildebrand
Compliance Inspector
Steven has worked in the environmental field in both the public and private sector for more than 30 years. In the private sector, he has worked on hazardous waste site cleanup, remediation, and monitoring as well as Phase 1 site assessments and Storm Water Pollution Prevention Plans (SWPPPs). In the public sector, Steven worked for the City of Santa Cruz and currently works for the City of San Jose as an Environmental Inspector. In these roles he is or has been responsible for Illicit Discharge Detection and Elimination (IDDE), Sanitary Sewer Overflow (SSO), Fats Oils and Grease (FOG), and stormwater inspections.

AGENDA ITEM 8.

DATE: 8/2/2023
City of Scotts Valley

CITY COUNCIL STAFF REPORT
DATE: 8/2/2023
TO: Honorable Mayor and City Council
FROM: Stephanie Hill, Administrative Services Director
APPROVED: Mali LaGoe, City Manager
SUBJECT: Award Quote for Equipment Purchase: Insight

SUMMARY OF ISSUE
The City has a main 3 cluster server system that physically hosts nine (9) virtual servers that operate the main City Hall and Police Department. This system has reached its end of life and has been budgeted for a replacement in the current Fiscal Year 2023-24 budget. This is a critical piece of equipment for the City and CyAs has been working diligently to keep it functioning. Earlier in the year, the servers went down and without the quick work of CyAs there could have been critical impacts.

In a situation where a city does not have contracted technology professionals, a request for proposals would go out to find professionals to analyze the needs of the client and find suitable equipment. The City has CyAs already as our contracted professionals that have a deep knowledge of the City's current and future needs.

CyAs identified suitable equipment options and received 3 competitive quotes. This is specialized equipment that has a very limited number of suppliers. CyAs Tech and Staff are recommending the City move forward with quote #0226426715 from Insight for the Dell VXRail. The comparable quotes are direct through Dell and through Insight for the Dell equipment. Given the sole source nature of this equipment, Staff recommends moving forward with the quote under section 2.70.060 for exceptions to competitive bidding.

FISCAL IMPACT
The equipment quote is for $183,320.41. There will be additional installation services rendered by CyAs.

STAFF RECOMMENDATION
Staff recommends the Council authorize the City Manager to execute a purchase agreement with Insight for the Dell VXRail related equipment.

TABLE OF CONTENTS

1. Recommended Quotation #0226426715 - Scotts Valley CA, City of

2. US_QUOTE_3000156508164.6

AGENDA ITEM 8.

DATE: 8/2/2023

3. Quotation #0226442262 - Scotts Valley CA, City of

4. Scotts Valley Proposal Powerpoint

HTTP://WWW.INSIGHT.COM
INSIGHT PUBLIC SECTOR SLED Page 1 of 4
2701 E INSIGHT WAY
CHANDLER AZ 85286-1930
Tel: 800-467-4448
SOLD-TO PARTY 11309493

SCOTTS VALLEY CA, CITY OF
1 CIVIC CENTER DR
SCOTTS VALLEY CA 95066-4197

SHIP-TO

SCOTTS VALLEY CA, CITY OF
1 CIVIC CENTER DR
SCOTTS VALLEY CA 95066-4197
We deliver according to the following terms:

Payment Terms : Net 30 days
Ship Via : Insight Assigned Carrier/Ground
Terms of Delivery: : FOB DESTINATION
Currency : USD
Quotation
Quotation Number : 0226426715
Document Date : 29-JUN-2023
PO Number :

PO release: :

Sales Rep : Andrew Snyder
Email : [email protected]
Telephone :

Sales Rep 2 : Mark Steven Montanez
Email : [email protected]
Telephone : +632132834410
Material Material Description Quantity Unit Price Extended Price 3000156518948 CITY OF SCOTTS VALLEY - DELL VXRAIL S670
INTEL XEON GOLD 6326 2.9G, 16C/32T, 11.2GT/S,
24M CACHE, TURBO, HT (185W) DDR4-3200
1 146,097.73 146,097.73

OPEN MARKET
Quantity SKU Description
4 210-BCWT VxRail S670
4 329-BDWH PSNT Info
4 384-BDGZ VxRail S670 Firmware Lock
4 634-BZQX VxRail Software 7.0.405 Factory Install
4 379-BDYQ No Transformational License Agreement
4 321-BGLS 3.5" Chassis with up to 12 HDDs
(SAS/SATA), 4x2.5" Rear HDDs (SAS/SATA) for 1CPU
Configuration
4 325-BDYT VxRail 2U Bezel V2
4 338-CBXJ Intel Xeon Gold 6326 2.9G, 16C/32T,

11.2GT/s, 24M Cache, Turbo, HT (185W) DDR4-3200
4 374-BBBX No Additional Processor
4 370-AEVR 3200MT/s RDIMMs
4 540-BCRX Broadcom 57504 Quad Port
10/25GbE,SFP28, OCP NIC 3.0
4 461-AAIG Trusted Platform Module 2.0 V3
4 770-BBBQ ReadyRails Sliding Rails
4 770-BDRQ Cable Management Arm, 2U
4 450-AJHG Dual, Hot-Plug,Power Supply Redundant
(1+1), 1400W, Mixed Mode
4 750-ACOM Fan Foam, HDD 2U
4 863-2093 5 Years ProSupport Mission Critical
vSphere Ent Plus for 1 Proc Sftwr Spt-Contract
4 379-BDTB 4x2.5 Rear Storage
4 878-1781 Dell Hardware Limited Warranty
4 878-1931 ProSupport Mission Critical 4-Hour 7X24
Onsite Service with Emergency Dispatch 2 Years
Extended
4 878-1932 ProSupport Mission Critical 4-Hour 7X24
Onsite Service with Emergency Dispatch 3 Years
4 878-1935 ProSupport Mission Critical 7x24
Technical Support and Assistance 5 Years
4 975-3461 Dell Limited Hardware Warranty Extended
Year(s)
4 989-3439 Thank you choosing Dell ProSupport. For

HTTP://WWW.INSIGHT.COM Document Date 29-JUN-2023
Quotation Number 226426715

Material Material Description Quantity Unit Price Extended Price tech support, visit //www.dell.com/support or call
1-800- 945-3355
4 812-4011 ProDeploy Plus No Charge Training 200
4 819-2575 ProDeploy Plus Dell EMC VxRail
Deployment
4 819-2576 ProDeploy Plus Dell EMC VxRail
Deployment Verification
4 874-0462 ProDeploy Plus Add-On STIG Security
Hardening for VxRail
4 389-DYHE PowerEdge R750 CE Marking, No CCC
Marking
4 389-DYHG Dell/EMC label (BIS) for 3.5" Chassis
4 379-BDSS SAS/SATA Backplane
4 340-CWLS P/V 670 Shipping, DAO
4 481-BBFG PowerEdge R750 Shipping Material
4 379-BDSZ 3.5 Chassis
4 540-BDFC VxRail S670, Riser Config 9, 2A, 1x16LP
4 329-BHKD VxRail S670 Branding
4 329-BGKO PowerEdge R750 Motherboard, Barlow Pass
Enabled, with Broadcom 5720 Dual Port 1Gb On-Board
LOM
4 412-AAWF Heatsink for 1 CPU configuration (CPU
greater than or equal to 165W)
4 370-AAIP Performance Optimized
4 780-BCQR C43, No RAID
4 405-AAZF Dell HBA355i Adapter, Low Profile
4 403-BCMB BOSS-S2 controller card + with 2 M.2
480GB (RAID 1)
4 470-AERS BOSS Cables and Bracket for R750
(4x2.5" Rear)
4 385-BBQV iDRAC9, Enterprise 15G
4 379-BCQY iDRAC Group Manager, Disabled
4 379-BCSG iDRAC,Legacy Password
4 379-BCRB DHCP with Zero Touch Configuration
4 750-ADGL High Performance Fan x6
4 350-BBYX No Quick Sync
4 631-AACK No Systems Documentation, No OpenManage
DVD Kit
4 387-BBEY No Energy Star
4 800-BBDM UEFI BIOS Boot Mode with GPT Partition
4 350-BCJF VxRail S670 Luggage Tag
32 370-AEVQ 16GB RDIMM, 3200MT/s, Dual Rank
32 400-ASHY 4TB 7.2K RPM NLSAS ISE 12Gbps 512n

3.5in Hard Drive
8 345-BEPH 1.6TB SSD SAS ISE, Mixed Use, up to
24Gbps 512e 2.5in Flex Bay, AG Drive
8 450-AALV Power Cord - C13, 3M, 125V, 15A (North
America, Guam, North Marianas, Philippines, Samoa,
Vietnam)
8 492-BBDG Jumper Cord - C13/C14, 4M, 250V, 12A
(North America, Guam, North Marianas, Philippines,
Samoa)
16 470-ACEV Dell Networking, Cable, SFP28 to
SFP28, 25GbE, Passive Copper Twinax Direct Attach
Cable, 3 Meter
4 149-BBTE VxRail VMware, vSAN Standard, 5 Years
4 634-BYPC VxRail HCI System Software, S
32 634-BSKU VxRail HCI System Software, Capacity
Drive, 4.0TB
32 634-BYLY VxRail HCI System Software Memory,
16GB
4 151-BBXE VxRail VMware vSphere Enterprise Plus
for 1 processor, 5 Years
4 863-1708 5 Years ProSupport Mission Critical
vSphere Ent Plus for 1 Proc Sftwr Spt-Maint
4 823-4114 ProSupport Mission Critical, vSAN,

HTTP://WWW.INSIGHT.COM Document Date 29-JUN-2023
Quotation Number 226426715

Standard, 1 Processor, 5 Years
4 Recoverpoint Services for VxRail - AMER
Estimated delivery if purchased today:

Jul. 17, 2023
Contract # C000000007581
Customer Agreement # MNWNC-108/7157034003
4 210-ARZC Recover Point for Virtual Machine
4 865-3520 5 Years ProSupport Mission Critical
RecoverPoint for Virtual Machines Sftwr Spt-Contract
4 900-9997 On-Site Installation Declined
4 142-BBNV HCIA RecoverPoint for VMs for 1 node
3000156518954 CITY OF SCOTTS VALLEY - DELL EMC S5224F-ON SWITCH, 24X 25GBE SFP28, 4X 100GBE QSFP28
PORTS, PSU TO IO AIR, 2X PSU
1 20,905.69 20,905.69

OPEN MARKET
Quantity SKU Description
2 210-APHT Dell EMC S5224F-ON Switch, 24x 25GbE
SFP28, 4x 100GbE QSFP28 ports, PSU to IO air, 2x PSU
2 343-BBLP Dell EMC S52XX-ON Series User Guide
2 634-BRWJ OS10 Enterprise, S5224F-ON
2 634-BYIJ OS10 SmartFabric Services
2 818-4983 Dell Hardware Limited Warranty 1 Year
2 818-4996 ProSupport:Next Business Day Onsite
Service After Problem Diagnosis, 1 Year
2 818-4998 ProSupport:Next Business Day Onsite
Service After Problem Diagnosis, 4 Years Extended
2 818-5018 ProSupport:7x24 HW/SW Technical Support
and Assistance, 5 Years
2 975-3461 Dell Limited Hardware Warranty Extended
Year(s)
2 989-3439 Thank you choosing Dell ProSupport. For
tech support, visit //www.dell.com/support or call
1-800- 945-3355
2 997-6306 Info 3rd Party Software Warranty
provided by Vendor
2 804-2151 ProDeploy Dell Networking S Series 5XXX
Switch - Deployment Verification
2 821-5786 ProDeploy Dell Networking S Series 5XXX
Switch - Deployment
2 848-8539 5 Years ProSupport OS10 Enterprise
Software Support-Maintenance
4 470-ABOU Dell Networking Cable, 100GbE QSFP28 to
QSFP28, Passive Copper Direct Attach Cable, 0.5
Meter
2 450-AAFH Power Cord, 125V, 15A, 10 Feet, NEMA
5-15/C13
2 450-AAFH Power Cord, 125V, 15A, 10 Feet, NEMA
5-15/C13
450-ADSY-COS2 KITS - POWER CORD, 250V, 12A, 2 METERS,
C13/C14, US
1 31.12 31.12

OPEN MARKET
Kits - Power Cord, 250V, 12A, 2 Meters, C13/C14, US
QTY 4
Product Subtotal 167,034.54
TAX 16,285.87
Total 183,320.41

HTTP://WWW.INSIGHT.COM Document Date 29-JUN-2023
Quotation Number 226426715

Thank you for choosing Insight. Please contact us with any questions or for additional information about Insight's complete IT solution offering.

Sincerely,
Andrew Snyder
[email protected]
Mark Steven Montanez
+632132834410
[email protected]
Insight Global Finance has a wide variety of flexible financing options and technology refresh solutions. Contact your Insight representative for an innovative approach to maximizing your technology and developing a strategy to manage your financial options.

This purchase is subject to Insight’s online Terms of Sale unless you have a separate purchase agreement signed by you and Insight, in which case, that separate agreement will govern. Insight’s online Terms of Sale can be found at the “terms-and-policies” link below.

SOFTWARE AND CLOUD SERVICES PURCHASES: If your purchase contains any software or cloud computing offerings (“Software and Cloud Offerings”), each offering will be subject to the applicable supplier's end user license and use terms ("Supplier Terms") made available by the supplier or which can be found at the “terms-and-policies” link below. By ordering, paying for, receiving or using Software and Cloud Offerings, you agree to be bound by and accept the Supplier Terms unless you and the applicable supplier have a separate agreement which governs. https://www.insight.com/terms-and-policies

A quote for your consideration
Based on your business needs, we put the following quote together to help with your purchase decision. Below is a detailed summary of the quote we’ve created to help you with your purchase decision.

To proceed with this quote, you may respond to this email, order online through your Premier page, or, if you do not have Premier, use this Quote to Order.

Quote No. 3000156508164.6
Total $231,743.79
Customer # 8438843
Quoted On Jul. 07, 2023
Expires by Aug. 04, 2023
Contract Name
Dell NASPO Computer
Equipment PA - California
Contract Code C000000181156
Customer Agreement # MNWNC-108 / 7-15-70-34- 003
Solution ID 17917198.10
Sales Rep Francesca Jeremiah
Phone (800) 456-3355, 6181322
Email [email protected]
Billing To WALT GEORGE

CITY OF SCOTTS VALLEY

ONE CIVIC CTR DR
SCOTTS VALLEY, CA 95066-4197
Message from your Sales Rep
Please contact your Dell sales representative if you have any questions or when you are ready to place an order. Thank you for shopping with Dell! Regards, Francesca Jeremiah
Shipping Group
Shipping To

WALT GEORGE

CITY OF SCOTTS VALLEY

ONE CIVIC CTR DR
SCOTTS VALLEY, CA 95066-4197
(831) 440-5610
Shipping Method
Standard Delivery
Install At

WALT GEORGE

CITY OF SCOTTS VALLEY

ONE CIVIC CTR DR
SCOTTS VALLEY, CA 95066-4197
(831) 440-5610
Solution Name:

Scotts Valley Hybrid VxRail w/ vSphere
Direct Pricing
Product Unit Price Quantity Subtotal
VxRail S670 - AMER $49,582.07 4 $198,328.28
Recoverpoint Services for VxRail - AMER $0.00 4 $0.00

ock, TX 78682
PowerSwitch S5224-ON - [AMER_S5224-ON_12925] $10,860.19 2 $21,720.38 Kits - Power Cord, 250V, 12A, 2 Meters, C13/C14, US $7.31 4 $29.24 Subtotal:

Shipping:

Non-Taxable Amount:

Taxable Amount:

Estimated Tax:

Total:
$220,077.90
$0.00
$100,427.56
$119,650.34
$11,665.89
$231,743.79

ock, TX 78682
Shipping Group Details
Shipping To

WALT GEORGE

CITY OF SCOTTS VALLEY

ONE CIVIC CTR DR
SCOTTS VALLEY, CA 95066-4197
(831) 440-5610
Shipping Method
Standard Delivery
Install At

WALT GEORGE

CITY OF SCOTTS VALLEY

ONE CIVIC CTR DR
SCOTTS VALLEY, CA 95066-4197
(831) 440-5610
Solution Name:

Scotts Valley Hybrid VxRail w/ vSphere
Direct Pricing
Quantity Subtotal
VxRail S670 - AMER
Estimated delivery if purchased today:

Jul. 21, 2023
Contract # C000000181156
Customer Agreement # MNWNC-108 / 7-15-70-34-003
$49,582.07 4 $198,328.28
Description SKU Unit Price Quantity Subtotal
VxRail S670 210-BCWT - 4 - PSNT Info 329-BDWH - 4 - VxRail S670 Firmware Lock 384-BDGZ - 4 - VxRail Software 7.0.405 Factory Install 634-BZQX - 4 - No Transformational License Agreement 379-BDYQ - 4 -

3.5" Chassis with up to 12 HDDs (SAS/SATA), 4x2.5" Rear HDDs (SAS/SATA) for 1CPU Configuration
321-BGLS
- 4 -
VxRail 2U Bezel V2 325-BDYT - 4 -
Intel Xeon Gold 6326 2.9G, 16C/32T, 11.2GT/s, 24M Cache, Turbo, HT (185W) DDR4-3200 338-CBXJ
- 4 -
No Additional Processor 374-BBBX - 4 -
3200MT/s RDIMMs 370-AEVR - 4 - Broadcom 57504 Quad Port 10/25GbE,SFP28, OCP NIC 3.0 540-BCRX - 4 - Trusted Platform Module 2.0 V3 461-AAIG - 4 - ReadyRails Sliding Rails 770-BBBQ - 4 - Cable Management Arm, 2U 770-BDRQ - 4 - Dual, Hot-Plug,Power Supply Redundant (1+1), 1400W, Mixed Mode 450-AJHG - 4 - Fan Foam, HDD 2U 750-ACOM - 4 -
5 Years ProSupport Mission Critical vSphere Ent Plus for 1 Proc Sftwr Spt-Contract 863-2093
- 4 -
4x2.5 Rear Storage 379-BDTB - 4 - Dell Hardware Limited Warranty 878-1781 - 4 - ProSupport Mission Critical 4-Hour 7X24 Onsite Service with Emergency Dispatch 2 Years Extended
878-1931
- 4 -
ProSupport Mission Critical 4-Hour 7X24 Onsite Service with Emergency Dispatch 3 Years
878-1932
- 4 -
ProSupport Mission Critical 7x24 Technical Support and Assistance 5 Years 878-1935
- 4 -
Dell Limited Hardware Warranty Extended Year(s) 975-3461 - 4 -

ock, TX 78682
Thank you choosing Dell ProSupport. For tech support, visit //www.dell.com/support or call 1-800- 945-3355
989-3439
- 4 -
ProDeploy Plus No Charge Training 200 812-4011 - 4 - ProDeploy Plus Dell EMC VxRail Deployment 819-2575 - 4 - ProDeploy Plus Dell EMC VxRail Deployment Verification 819-2576 - 4 - ProDeploy Plus Add-On STIG Security Hardening for VxRail 874-0462 - 4 - PowerEdge R750 CE Marking, No CCC Marking 389-DYHE - 4 - Dell/EMC label (BIS) for 3.5" Chassis 389-DYHG - 4 - SAS/SATA Backplane 379-BDSS - 4 - P/V 670 Shipping, DAO 340-CWLS - 4 - PowerEdge R750 Shipping Material 481-BBFG - 4 -

3.5 Chassis 379-BDSZ - 4 - VxRail S670, Riser Config 9, 2A, 1x16LP 540-BDFC - 4 - VxRail S670 Branding 329-BHKD - 4 - PowerEdge R750 Motherboard, Barlow Pass Enabled, with Broadcom 5720 Dual Port 1Gb On-Board LOM 329-BGKO
- 4 -
Heatsink for 1 CPU configuration (CPU greater than or equal to 165W) 412-AAWF
- 4 -
Performance Optimized 370-AAIP - 4 - C43, No RAID 780-BCQR - 4 - Dell HBA355i Adapter, Low Profile 405-AAZF - 4 - BOSS-S2 controller card + with 2 M.2 480GB (RAID 1) 403-BCMB - 4 - BOSS Cables and Bracket for R750 (4x2.5" Rear) 470-AERS - 4 - iDRAC9, Enterprise 15G 385-BBQV- 4 -
iDRAC Group Manager, Disabled 379-BCQY - 4 -
iDRAC,Legacy Password 379-BCSG - 4 - DHCP with Zero Touch Configuration 379-BCRB - 4 - High Performance Fan x6 750-ADGL - 4 - No Quick Sync 350-BBYX - 4 - No Systems Documentation, No OpenManage DVD Kit 631-AACK - 4 - No Energy Star 387-BBEY - 4 - UEFI BIOS Boot Mode with GPT Partition 800-BBDM - 4 - VxRail S670 Luggage Tag 350-BCJF - 4 - 16GB RDIMM, 3200MT/s, Dual Rank 370-AEVQ - 32 -
4TB 7.2K RPM NLSAS ISE 12Gbps 512n 3.5in Hard Drive 400-ASHY - 32 -

1.6TB SSD SAS ISE, Mixed Use, up to 24Gbps 512e 2.5in Flex Bay, AG Drive 345-BEPH
- 8 -
Power Cord - C13, 3M, 125V, 15A (North America, Guam, North Marianas, Philippines, Samoa, Vietnam) 450-AALV
- 8 -
Jumper Cord - C13/C14, 4M, 250V, 12A (North America, Guam, North Marianas, Philippines, Samoa) 492-BBDG- 8 - Dell Networking, Cable, SFP28 to SFP28, 25GbE, Passive Copper Twinax Direct Attach Cable, 3 Meter
470-ACEV
- 16 -
VxRail VMware, vSAN Standard, 5 Years 149-BBTE - 4 -

ock, TX 78682
VxRail HCI System Software, S 634-BYPC - 4 -
VxRail HCI System Software, Capacity Drive, 4.0TB 634-BSKU - 32 - VxRail HCI System Software Memory, 16GB 634-BYLY - 32 - VxRail VMware vSphere Enterprise Plus for 1 processor, 5 Years 151-BBXE - 4 - 5 Years ProSupport Mission Critical vSphere Ent Plus for 1 Proc Sftwr Spt-Maint 863-1708
- 4 -
ProSupport Mission Critical, vSAN, Standard, 1 Processor, 5 Years 823-4114 - 4 - Quantity Subtotal Recoverpoint Services for VxRail - AMER
Estimated delivery if purchased today:

Jul. 25, 2023
Contract # C000000181156
Customer Agreement # MNWNC-108 / 7-15-70-34-003
$0.00 4 $0.00
Description SKU Unit Price Quantity Subtotal
Recover Point for Virtual Machine 210-ARZC - 4 -
5 Years ProSupport Mission Critical RecoverPoint for Virtual Machines Sftwr Spt-Contract 865-3520
- 4 -
On-Site Installation Declined 900-9997 - 4 - HCIA RecoverPoint for VMs for 1 node 142-BBNV - 4 - Quantity Subtotal PowerSwitch S5224-ON - [AMER_S5224-ON_12925]
Estimated delivery if purchased today:

Jul. 18, 2023
Contract # C000000181156
Customer Agreement # MNWNC-108 / 7-15-70-34-003
$10,860.19 2 $21,720.38
Description SKU Unit Price Quantity Subtotal
Dell EMC S5224F-ON Switch, 24x 25GbE SFP28, 4x 100GbE
QSFP28 ports, PSU to IO air, 2x PSU
210-APHT
- 2 -
Dell EMC S52XX-ON Series User Guide 343-BBLP - 2 - OS10 Enterprise, S5224F-ON 634-BRWJ - 2 - OS10 SmartFabric Services 634-BYIJ - 2 - Dell Hardware Limited Warranty 1 Year 818-4983 - 2 - ProSupport:Next Business Day Onsite Service After Problem Diagnosis, 1 Year
818-4996
- 2 -
ProSupport:Next Business Day Onsite Service After Problem Diagnosis, 4 Years Extended
818-4998
- 2 -
ProSupport:7x24 HW/SW Technical Support and Assistance, 5 Years 818-5018 - 2 - Dell Limited Hardware Warranty Extended Year(s) 975-3461 - 2 - Thank you choosing Dell ProSupport. For tech support, visit //www.dell.com/support or call 1-800- 945-3355
989-3439
- 2 -
Info 3rd Party Software Warranty provided by Vendor 997-6306 - 2 - ProDeploy Dell Networking S Series 5XXX Switch - Deployment Verification
804-2151
- 2 -
ProDeploy Dell Networking S Series 5XXX Switch - Deployment 821-5786 - 2 - 5 Years ProSupport OS10 Enterprise Software Support-Maintenance 848-8539 - 2 - Dell Networking Cable, 100GbE QSFP28 to QSFP28, Passive Copper Direct Attach Cable, 0.5 Meter
470-ABOU
- 4 -
Power Cord, 125V, 15A, 10 Feet, NEMA 5-15/C13 450-AAFH - 2 -

ock, TX 78682
Power Cord, 125V, 15A, 10 Feet, NEMA 5-15/C13 450-AAFH - 2 - Quantity Subtotal Kits - Power Cord, 250V, 12A, 2 Meters, C13/C14, US
Estimated delivery if purchased today:

Jul. 17, 2023
Contract # C000000181156
Customer Agreement # MNWNC-108 / 7-15-70-34-003
$7.31 4 $29.24
Description SKU Unit Price Quantity Subtotal
Dell Power Cord, 250V, 12A, 2 Meters, C13/C14, US 450-ADSY - 4 - Subtotal:

Shipping:

Estimated Tax:

Total:
$220,077.90
$0.00
$11,665.89
$231,743.79

ock, TX 78682
Important Notes
Terms of Sale
This Quote will, if Customer issues a purchase order for the quoted items that is accepted by Supplier, constitute a contract between the entity issuing this Quote (“Supplier”) and the entity to whom this Quote was issued (“Customer”). Unless otherwise stated herein, pricing is valid for thirty days from the date of this Quote. All product, pricing and other information is based on the latest information available and is subject to change. Supplier reserves the right to cancel this Quote and Customer purchase orders arising from pricing errors. Taxes and/or freight charges listed on this Quote are only estimates. The final amounts shall be stated on the relevant invoice. Additional freight charges will be applied if Customer requests expedited shipping. Please indicate any tax exemption status on your purchase order and send your tax exemption certificate to [email protected] or [email protected], as applicable. Governing Terms: This Quote is subject to: (a) a separate written agreement between Customer or Customer’s affiliate and Supplier or a Supplier´s affiliate to the extent that it expressly applies to the products and/or services in this Quote or, to the extent there is no such agreement, to the applicable set of Dell’s Terms of Sale (available at www.dell.com/terms or www.dell.com/oemterms), or for cloud/as-a- Service offerings, the applicable cloud terms of service (identified on the Offer Specific Terms referenced below); and (b) the terms referenced herein (collectively, the “Governing Terms”). Different Governing Terms may apply to different products and services on this Quote. The Governing Terms apply to the exclusion of all terms and conditions incorporated in or referred to in any documentation submitted by Customer to Supplier.

Supplier Software Licenses and Services Descriptions: Customer’s use of any Supplier software is subject to the license terms accompanying the software, or in the absence of accompanying terms, the applicable terms posted on www.Dell.com/eula. Descriptions and terms for Supplier-branded standard services are stated at www.dell.com/servicecontracts/global or for certain infrastructure products at www.dellemc.com/en-us/customer-services/product-warranty-and-service-descriptions.htm. Offer-Specific, Third Party and Program Specific Terms: Customer’s use of third-party software is subject to the license terms that accompany the software. Certain Supplier-branded and third-party products and services listed on this Quote are subject to additional, specific terms stated on www.dell.com/offeringspecificterms (“Offer Specific Terms”).

In case of Resale only: Should Customer procure any products or services for resale, whether on standalone basis or as part of a solution, Customer shall include the applicable software license terms, services terms, and/or offer-specific terms in a written agreement with the end- user and provide written evidence of doing so upon receipt of request from Supplier.

In case of Financing only: If Customer intends to enter into a financing arrangement (“Financing Agreement”) for the products and/or services on this Quote with Dell Financial Services LLC or other funding source pre-approved by Supplier (“FS”), Customer may issue its purchase order to Supplier or to FS. If issued to FS, Supplier will fulfill and invoice FS upon confirmation that: (a) FS intends to enter into a Financing Agreement with Customer for this order; and (b) FS agrees to procure these items from Supplier. Notwithstanding the Financing Agreement, Customer’s use (and Customer’s resale of and the end-user’s use) of these items in the order is subject to the applicable governing agreement between Customer and Supplier, except that title shall transfer from Supplier to FS instead of to Customer. If FS notifies Supplier after shipment that Customer is no longer pursuing a Financing Agreement for these items, or if Customer fails to enter into such Financing Agreement within 120 days after shipment by Supplier, Customer shall promptly pay the Supplier invoice amounts directly to Supplier.

Customer represents that this transaction does not involve: (a) use of U.S. Government funds; (b) use by or resale to the U.S. Government; or (c) maintenance and support of the product(s) listed in this document within classified spaces. Customer further represents that this transaction does not require Supplier’s compliance with any statute, regulation or information technology standard applicable to a U.S. Government procurement.

For certain products shipped to end users in California, a State Environmental Fee will be applied to Customer’s invoice. Supplier encourages customers to dispose of electronic equipment properly.

Electronically linked terms and descriptions are available in hard copy upon request. ^DELL BUSINESS CREDIT (DBC): Offered to business customers by WebBank, who determines qualifications for and terms of credit. Taxes, shipping and other charges are extra and vary. The Total Minimum Payment Due is the greater of either $20 or 3% of the New Balance shown on the statement rounded up to the next dollar, plus all past due amounts. Dell and the Dell logo are trademarks of Dell Inc.

ock, TX 78682
HTTP://WWW.INSIGHT.COM
INSIGHT PUBLIC SECTOR SLED Page 1 of 4
2701 E INSIGHT WAY
CHANDLER AZ 85286-1930
Tel: 800-467-4448
SOLD-TO PARTY 11309493

SCOTTS VALLEY CA, CITY OF
1 CIVIC CENTER DR
SCOTTS VALLEY CA 95066-4197

SHIP-TO

SCOTTS VALLEY CA, CITY OF
1 CIVIC CENTER DR
SCOTTS VALLEY CA 95066-4197
We deliver according to the following terms:

Payment Terms : Net 30 days
Ship Via : Insight Assigned Carrier/Ground
Terms of Delivery: : FOB DESTINATION
Currency : USD
Quotation
Quotation Number : 0226442262
Document Date : 06-JUL-2023
PO Number :

PO release: :

Sales Rep : Andrew Snyder
Email : [email protected]
Telephone :

Sales Rep 2 : Mark Steven Montanez
Email : [email protected]
Telephone : +632132834410
Material Material Description Quantity Unit Price Extended Price P05172-B21 HPE ProLiant DL380 Gen10 Plus Network Choice - rack-mountable - no CPU - 0 GB - no HDD
3 3,418.28 10,254.84

OPEN MARKET
P05172-B21#ABA HPE ProLiant DL380 Gen10 Plus Network Choice - rack-mountable - no CPU - 0 GB - no HDD
3 0.01 0.03

OPEN MARKET
P36932-B21 Intel Xeon Gold 6326 / 2.9 GHz processor 6 3,595.95 21,575.70

OPEN MARKET
P06035-B21 HPE SmartMemory - DDR4 - module - 64 GB -
DIMM 288-pin - 3200 MHz / PC4-25600 -
registered
12 2,329.55 27,954.60

OPEN MARKET
P40496-B21 HPE - SSD - Read Intensive - 240 GB - SATA
6Gb/s
6 447.44 2,684.64

OPEN MARKET
P44008-B21 HPE Read Intensive PM893 - SSD - 960 GB -
SATA 6Gb/s
18 1,494.41 26,899.38

OPEN MARKET
P37038-B21 HPE x8/x16/x8 Primary Riser Kit - riser card 3 218.28 654.84

OPEN MARKET
P42044-B21 Mellanox ConnectX-6 Lx EN MCX631102AS-ADAT - network adapter - PCIe 4.0 x8 - 10Gb Ethernet
/ 25Gb Ethernet SFP28 x 2
6 1,522.84 9,137.04

OPEN MARKET
P01366-B21 HPE 96W Smart Storage - storage device
battery - Li-Ion
3 205.08 615.24

OPEN MARKET

HTTP://WWW.INSIGHT.COM Document Date 06-JUL-2023
Quotation Number 226442262

Material Material Description Quantity Unit Price Extended Price P26279-B21 Broadcom MegaRAID MR416i-a - storage
controller (RAID) - SATA 6Gb/s / SAS 12Gb/s /
PCIe 4.0 (NVMe) - PCIe 4.0 x8
3 2,334.01 7,002.03

OPEN MARKET
P08449-B21 HPE I350-T4 - network adapter - OCP 3.0 -
Gigabit Ethernet x 4
3 1,218.28 3,654.84

OPEN MARKET
455883-B21 HPE - SFP+ transceiver module - 10 GigE 12 854.83 10,257.96

OPEN MARKET
P14608-B21 HPE Maximum Performance Fan Kit - system fan kit
3 344.16 1,032.48

OPEN MARKET
P38995-B21 HPE Flex Slot Platinum - power supply -
hot-plug - 800 Watt
6 390.12 2,340.72

OPEN MARKET
BD505A1 HPE Integrated Lights-Out Advanced - license
+ 3 Years 24x7 Support - 1 server
3 507.88 1,523.64
Coverage Dates: 06-JUL-2023 - 06-JUL-2026

OPEN MARKET
P55467-B21 HPE SATA / SAS cable kit 3 57.87 173.61

OPEN MARKET
867809-B21 HPE - system cabinet bezel kit - 2U 3 88.32 264.96

OPEN MARKET
P13771-B21 HPE - Trusted Platform Module 2.0 Gen10 Plus Rivets Kit
3 97.47 292.41

OPEN MARKET
P22018-B21 HPE SFF Easy Install - rack rail kit - 2U 3 146.19 438.57

OPEN MARKET
P27095-B21 HPE High Performance - video card heatsink 6 119.80 718.80

OPEN MARKET
BD506A HPE Integrated Lights-Out Advanced Flexible
license - license + 3 Years 24x7 Support - 1
server
3 476.15 1,428.45
Coverage Dates: 06-JUL-2023 - 06-JUL-2026

OPEN MARKET
BD715AAE VMware vSphere Enterprise Plus Edition -
license + 3 Years 24x7 Support - 1 processor
6 6,904.12 41,424.72
Coverage Dates: 06-JUL-2023 - 06-JUL-2026

OPEN MARKET
G4Y18AAE VMware Virtual SAN - license + 3 Years 24x7
Support - 1 processor
6 4,927.60 29,565.60
Coverage Dates: 06-JUL-2023 - 06-JUL-2026

OPEN MARKET

HTTP://WWW.INSIGHT.COM Document Date 06-JUL-2023
Quotation Number 226442262

Material Material Description Quantity Unit Price Extended Price HA114A1 HPE Installation & Startup Service -
installation / configuration - on-site
1 0.01 0.01

OPEN MARKET
HA114A1#5A6 HPE Installation & Startup Service -
installation / configuration - on-site
3 1,531.64 4,594.92

OPEN MARKET
HU4A6A3 HPE 3 Years Tech Care Essential Service 1 0.01 0.01

OPEN MARKET
HU4A6A3#ZSB HPE Pointnext Tech Care Essential Service - extended service agreement - 3 years -
on-site
3 4,614.13 13,842.39

OPEN MARKET
HV9V8A1 HPE DIGITAL LEARNER SMB ED 1YR SUB SVC 1 1,336.76 1,336.76

OPEN MARKET
HF386A1 HPE Training Credits for VMware -
pre-purchasing training funds unit
5 1,069.40 5,347.00

OPEN MARKET
Product Subtotal 206,578.86
Services Subtotal 18,437.33
Freight 621.48
TAX 12,280.39
Total 237,918.06
Thank you for choosing Insight. Please contact us with any questions or for additional information about Insight's complete IT solution offering.

Sincerely,
Andrew Snyder
[email protected]
Mark Steven Montanez
+632132834410
[email protected]
Insight Global Finance has a wide variety of flexible financing options and technology refresh solutions. Contact your Insight representative for an innovative approach to maximizing your technology and developing a strategy to manage your financial options.

This purchase is subject to Insight’s online Terms of Sale unless you have a separate purchase agreement signed by you and Insight, in which case, that separate agreement will govern. Insight’s online Terms of Sale can be found at the “terms-and-policies” link below.

HTTP://WWW.INSIGHT.COM Document Date 06-JUL-2023
Quotation Number 226442262

SOFTWARE AND CLOUD SERVICES PURCHASES: If your purchase contains any software or cloud computing offerings (“Software and Cloud Offerings”), each offering will be subject to the applicable supplier's end user license and use terms ("Supplier Terms") made available by the supplier or which can be found at the “terms-and-policies” link below. By ordering, paying for, receiving or using Software and Cloud Offerings, you agree to be bound by and accept the Supplier Terms unless you and the applicable supplier have a separate agreement which governs. https://www.insight.com/terms-and-policies

Scotts Valley
DellEMC | CyAs Tech
Infrastructure Refresh
Agenda:

Technology Overview:

VxRail Hyperconverged
Financials, Timeline , Q&A

2 Internal Use - Confidential
LiveOptics: 10/28/2022 – 11/02/2022
Peak CPU

23.46 GHz
Net CPU
124.80 GHz
Cores
48 CPU
Used

34.99 TB
Free

10.21 TB
Total

45.20 TB
Capacity
Peak Memory Usage
221.14 GB
Total Memory
1023.71 GB
Memory

2.34 gigabits/s
Peak Aggregate Network Throughput
2,628
IOPS at 95%

1.89 TB
Average Daily Write
© Copyright 2022 Dell and Certified Partner Confidential Information

3 © Copyright 2022 Dell Confidential Information
Internal Use - Confidential
Physical Overview
Physical
Server
Total Servers:

Clusters:
3 0
CPU
Total Cores:

Peak CPU:

Net CPU:
48 23.46 GHz
124.8 GHz
Memory
Total Memory (TB):

Peak Used (TB):
1 0.22
Capacity
Used (TB):

Free (TB):

Total (TB):

34.99 10.21

45.2 Network
Ports:

Peak Bandwidth:
(gigabits/sec)
5 2.34
IOPS
Peak IOPS:
95th% IOPS:
7,708
2,628
Current Environment
Vendor Model Count
HPE ProLiant DL380 Gen9 2
HPE ProLiant DL380p Gen8 1
Operating Systems
VMware
ESXi 6.5 3

4 © Copyright 2022 Dell Confidential Information
Internal Use - Confidential
Virtual Overview
Hosts
Total Hosts:

Clusters:

Avg Cluster Size:
3 0
0 CPU & Memory
Total Sockets:

Total Cores:

Total RAM (TB):
6 48
1 VM Storage
Provisioned (TB):

Consumed (TB):

16.6 12.8
VM Details
Total VMs:
vCPUs:
vRAM (TB):

VM/Physical:
29 92

0.25 10:1
Average VM
vCPU:
vRAM (GB):

Used Storage (GB):
3 9
452
Physical Util
Avg CPU:

Avg RAM:
* Point in time snapshot

23.33%

24.17%
Current Environment
Vendor Model Count
HPE ProLiant DL380 Gen9 2
HPE ProLiant DL380p Gen8 1
VM Profiling
Powered On VMs
Powered Off VMs
Guest iSCSI Present
20 9
1 OS Versions
VM HW Versions
10 derived OS types
1 T-Shirt Sizes
Unique VMs
16 different vCPU/vRAM VMs combinations
11 unique vCPU/vRAM VMs

WINDOWS
Windows Server 2016
Windows Server 2008
Windows 10
Windows Server 2019
Windows Server 2003
11 4
3 2
1 LINUX
CentOS
Generic Linux
5 1
OTHER
Other 2
Virtual

Recommended Solution:

Hybrid Flash VxRail

Internal Use - Confidential Page 223 of 303
© Copyright 2020 Dell Inc. Internal Use - Confidential
• Build desired state from set of
available components
• Determine the best option and
sequence to run in their cluster
• Package the VMware software bundle
& acquire firmware bits
Automate lifecycle management
• Choose your Validated State and go!
© Copyright 2020 Dell Inc.
vSAN Ready Node with vLCM VxRail
• Define the version set to update
system
• Perform your own interoperability
testing
• Acquire update files separately
• Upgrade components separately
within approved change windows
• Rely on multiple vendors for support
Traditional, manual approach

Internal Use - Confidential 11 of 55 © Copyright 2020 Dell Inc.

Testing the validated state
Example upgrade cadence
VxRail 4.7.100
ESXi 6.7 EP5
vSAN 6.7 U
BIOS 1.49 (422T0)
HBA
HBA Mini FW: 15.17.09.06 (MF6CM) Driver: 16.00.01.00
HBA330 Adapter FW: 15.17.09.06 (7KY60) Driver: 16.00.01.00 NDC and NICs
Intel i350 FW: N/A Driver: N/A
Intel x520 FW: N/A Driver: N/A
Intel x540 FW: N/A Driver: N/A
Intel x550 FW: 18.5.18 (3XJH0) Driver: 1.6.5
Intel x710 FW: 18.5.17 (T6VN9) Driver: 1.5.8
BCM57414 FW: 20.08.04.04 Driver: 20.8.152.0
iDRAC 3.21.23.22 (K877V)
PTAgent 1.8.1-21
iSM 3.3-1290 (833XD)
PM FW: 1.08 Driver: 1.11 (factory)
M.2 disk See additional info
Boss/SATADOM 2.5.13.3011 (RPD7Y) / 2.5.13.1306 (MKV82)(Man

SOFTWARE
HARDWARE Choose your
validated state
Seamlessly
bypass interim
updates
Document
compliance
automatically
or
or
or

4.7.1106
.7 EP6

6.7 U1

4.7.2006
.7 U2

6.7 U2

4.7.3006
.7 U3

6.7 U3

Internal Use - Confidential Page 226 of 303
Internal Use - Confidential 14 Copyright © Dell Inc. All Rights Reserved.

Scotts Valley SE: Stephanie
Dumitru Solution Overview Date: May 2023
Single Gold 6326 @ 2.9GHz 16C
16 cores per node | 64 cores per
cluster
128GB (8 x 16GB DIMMS) per node
512 GB per cluster
VxRail S670 - 4 Node Cluster
8 Total Rack Units
4 x 10/25GbE SFP28 Ports Per Node
2 x PowerSwitch S5224 Switches (24 port
25GbE SFP28)
Dual 1400W (1+1) 100-240V AC
C13/C14 & C13/NEMA5-15
vSphere Enterprise Plus
5 years vSAN Standard | 4 Licenses
Power Supply
Networking
RAM
Processor
Licensing
ProDeploy Plus
5 Years ProSupport and 4 Hour
Mission Critical Deployment &
Support

2 x 1.6TB SSD Cache Drives
8 x 4TB 7.2k HDDs | 4 Slots Free
Storage 40.4TB Usable Capacity in RAID1
01 02
03 04
05 06
07 08
09 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28
29 30
31 32
33 34
35 36
37 38
39 40
41 42
01 02
03 04
05 06
07 08
09 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28
29 30
31 32
33 34
35 36
37 38
39 40
41 42
43 44
45 46
47 48 43
44 45
46 47
48 Stack-ID LNK 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 ACT 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 50 52 54 49 51 53
Stack-ID LNK 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 ACT 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 50 52 54 49 51 53
Stack ID Stack ID
* This drawing does not necessarily represent all the connections or equipment required for a complete solution. It is provided as a high-level overview

Financials & Timeline
VxRail CapEx (Ownership)

Internal Use - Confidential
4 Node VxRail Purchase (Dell Direct)

Internal Use - Confidential
4 Node VxRail Purchase (Insight)

Internal Use - Confidential
Technical Solution
Finalized
June 28th, 2023
Order Approval and
Processing
August 3rd, 2023
August 10th, 2023
Manufacturing &
Shipping
Delivery
*invoice
August 31st, 2023
Physical Installation
Logical Deployment
Sept 3rd, 2023
Data Migration & Testing
Sept 18th, 2023
Oct 16th, 2023
Go-Live
~ 124 Days ~ 3 Days ~ 4 Weeks
Submit PO
93 Days ~ 3 Days ~ 14 Days
VxRail Purchase Timeline

LEAD TIMES
Dell Switches: 7 days
VxRail Nodes : 7 Days

Q & A

AGENDA ITEM 9.

DATE: 8/2/2023
City of Scotts Valley

CITY COUNCIL STAFF REPORT
DATE: 8/2/2023
TO: Honorable Mayor and City Council
FROM: Stephanie Hill, Administrative Services Director
APPROVED: Mali LaGoe, City Manager
SUBJECT: Approve Resolution No. 1007.36 revising prior years Gann Initiative appropriations and setting appropriation limits for FY 2023-24.

SUMMARY OF ISSUE
This item was originally presented to the Council on June 21st, 2023. It requires more than 15 days to have elapsed since documentation used in the FY 2023-2024 appropriations limit determination was first made available to the public. That requirement is now met.

On November 6, 1979, California voters approved Proposition 4, commonly known as the Gann Initiative, establishing Article XIIIB of the California State Constitution. This proposition mandated an appropriation (spending) limit on the amount of tax proceeds that the State and most local government jurisdictions may appropriate within a fiscal year. Charges for services, fees, grants, loans, donations, and other non-tax proceeds are excluded from the spending limitation.

The Initiative was later modified by two propositions: Proposition 98 in 1988 and Proposition 111 in 1990. Proposition 98 established the return of tax revenues exceeding appropriation limit levels to the State or citizens through a process of refunds, rebates, or other means. Proposition 111 allowed more flexibility in the appropriation calculation factors. Significant changes imposed by Proposition 111 include the following:
• The provision of a choice in methodologies for determining the annual inflation factor between 1) growth in California per capita income or 2) growth in nonresidential assessed valuation due to new construction within the city. • The provision of a choice in methodologies for determining the annual population growth factor between 1) city population growth or 2) county population growth. • Regulations allowing the exclusion of “qualified capital outlay” expenditures from the calculation of the Limit.
• Provision of a process for avoiding tax refunds if a city falls sufficiently below the Limit in the next fiscal year. The revised language provides two years, beyond

AGENDA ITEM 9.

DATE: 8/2/2023
the second year, to refund any remaining excess during which jurisdictions can seek to obtain a successful override vote.

Per the City’s auditor recommendation, the FY 2020-21 Appropriations Limit is being revised resulting in subsequent years also requiring revision. Staff will continue to research prior years to identify if further adjustments are warranted.

FISCAL IMPACT
There is not direct identifiable fiscal impact from this action.

STAFF RECOMMENDATION
Adopt a resolution taking the following actions with respect to the City’s FY 2020-21, 2021-22, 2022-23, and 2023-24 Appropriations Limits:

1. Revise the FY 2020-21 through FY 2022-23 Gann Appropriation Limits as follows:

Fiscal Year Original Revised
2020-21 $207,939,687 $207,949,511
2021-22 $220,044,816 $220,634,546
2022-23 $236,658,200 $237,292,454

2. Elect the per capita income index as the inflation factor for FY 2023-2024;

3. Elect the County population growth index as the population factor for FY 2023-2024; and

4. Establish the FY 2023-2024 Appropriation Limit at $245,126,911 in compliance with Article XIIIB of the State of California Constitution.

The calculation of the FY 2023-24 Gann Appropriation Limit is as follows:

County
Population
Factor
Per Capita
Income Factor
Appropriation
Factor
FY 2022-23
Appropriation
Limit
FY 2023-24
Appropriation
Limit

0.989 x 1.044 = 1.033 x $237,292,454 = $245,126,911

TABLE OF CONTENTS

1. Resolution FY 2023-24 Gann Appropriations Limit

2. DRU Price and Population Letter - 2023

3. 2022-23 NonResidential Construction Distribution Amounts by GLKey

RESOLUTION NO. 1007.36

A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF SCOTTS VALLEY REVISING APPROPRIATION LIMITS FOR FISCAL YEARS 2020-21, 2021-22, 2022-23 AND MAKING CERTAIN FINDINGS AND

DETERMINATIONS IN COMPLIANCE WITH SECTION XIII B OF THE

CALIFORNIA CONSTITUTION (GANN INITIATIVE) AND SETTING
THE APPROPRIATIONS LIMIT FOR FISCAL YEAR 2023-24
BE IT RESOLVED by the City Council of the City of Scotts Valley that in compliance with Section XIII B of the Constitution of the State of California, the following is hereby found and determined:

1. The revised appropriations limit for fiscal year 2021/2022 is $207,949,511; and

2. The revised appropriations limit for fiscal year 2021/2022 is $220,634,546; and

3. The revised appropriations limit for fiscal year 2022/2023 was $237,292,454; and

4. The change in population in the County of Santa Cruz in 2022, according to the State of California was -1.09%, and was selected as a factor; and

3. That during fiscal year 2022/23, according to the State, the percentage change in per capita personal income in California was 4.44%, and was selected as a factor; and

4. That the appropriations limit under the Gann Initiative for FY 2023/2024 is $245,126,911; and

5. That the change in cost of living is selected to be the change in per capita personal income.

6. That the documentation for establishing the appropriations limit for 2023/2024 was prepared by the Administrative Services Department and presented to the City Council on June 21, 2023.

7. That more than 15 days have elapsed since documentation used in this determination was made available to the public.

The foregoing resolution was adopted by the City Council of the City of Scotts Valley at a regularly scheduled meeting held on the 2nd day of August, 2023 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Approved:___________________________
Jack Dilles, Mayor
Attest:___________________________
Cathie Simonovich, City Clerk

May 2023
Dear Fiscal Officer:

Subject: Price Factor and Population Information
Appropriations Limit
California Revenue and Taxation Code section 2227 requires the Department of Finance (Finance) to transmit an estimate of the percentage change in population to local governments. Each local jurisdiction must use their percentage change in population factor for January 1, 2023, in conjunction with a change in the cost of living, or price factor, to calculate their appropriations limit for fiscal year 2023-24. Attachment A provides the change in California’s per capita personal income and an example for utilizing the price factor and population percentage change factor to calculate the 2023-24 appropriations limit. Attachment B provides the city and unincorporated county population percentage change. Attachment C provides the population percentage change for counties and their summed incorporated areas. The population percentage change data excludes federal and state institutionalized populations and military populations.

Population Percent Change for Special Districts
Some special districts must establish an annual appropriations limit. California Revenue and Taxation Code section 2228 provides additional information regarding the appropriations limit.

Article XIII B, section 9(C) of the California Constitution exempts certain special districts from the appropriations limit calculation mandate. The code section and the California Constitution can be accessed at the following website: http://leginfo.legislature.ca.gov/faces/codes.xhtml.

Special districts required by law to calculate their appropriations limit must present the calculation as part of their annual audit. Any questions special districts have on this requirement should be directed to their county, district legal counsel, or the law itself. No state agency reviews the local appropriations limits.

Population Certification
The population certification program applies only to cities and counties. California Revenue and Taxation Code section 11005.6 mandates Finance to automatically certify any population estimate that exceeds the current certified population with the State Controller’s Office. Finance will certify the higher estimate to the State Controller by June 1, 2023.

Please Note: The prior year’s city population estimates may be revised. The per capita personal income change is based on historical data.

If you have any questions regarding this data, please contact the Demographic Research Unit at (916) 323-4086.

JOE SPEPHENSHAW
Director
By:

Erika Li
Chief Deputy Director
Attachment

May 2023
Attachment A
A. Price Factor: Article XIII B specifies that local jurisdictions select their cost of living factor to compute their appropriation limit by a vote of their governing body. The cost of living factor provided here is per capita personal income. If the percentage change in per capita personal income is selected, the percentage change to be used in setting the fiscal year 2023-24 appropriation limit is:

Per Capita Personal Income
Fiscal Year Percentage change
(FY) over prior year
2023-24 4.44
B. Following is an example using sample population change and the change in California per capita personal income as growth factors in computing a 2023-24 appropriation limit.
2023-24:

Per Capita Cost of Living Change = 4.44 percent
Population Change = -0.35 percent
Per Capita Cost of Living converted to a ratio: 4.44 + 100 = 1.0444 100
Population converted to a ratio: -0.35 + 100 = 0.9965
100
Calculation of factor for FY 2023-24: 1.0444 x 0.9965 = 1.0407

Fiscal Year 2023-24
Attachment B
Annual Percent Change in Population Minus Exclusions*
January 1, 2022 to January 1, 2023 and Total Population, January 1, 2023 Total
County Percent Change --- Population Minus Exclusions --- Population City 2022-2023 1-1-22 1-1-23 1-1-2023
Santa Cruz
Capitola -1.31 9,753 9,625 9,625
Santa Cruz -0.36 63,454 63,224 63,224
Scotts Valley -1.26 12,010 11,859 11,859
Watsonville -1.22 50,490 49,876 49,876
Unincorporated -1.36 129,163 127,411 127,467
County Total -1.09 264,870 261,995 262,051
*Exclusions include residents on federal military installations and group quarters residents in state mental institutions, state and federal correctional institutions and veteran homes.

GLKey Fund Description
Non
Residential
Growth from
Construction
Current Roll
Assessed Vallue
Previous Roll
Assessed Value
Change in
Assessed Value
Non
Residential
Growth %
131220 S C COUNTY GENERAL 23,836,678 55,510,152,704 50,444,263,768 0.4705% 5,065,888,936 131414 LOS GATOS HIGH 82,184 1,671,558,375 1,573,777,062 97,781,313 0.0840% 131444 WEST VALLEY COM COLL TR GENL Total 38,638 1,621,679,720 1,525,806,564 95,873,156 0.0403% 131610 CAPITOLA CITY TR 144,988 2,996,846,337 2,735,653,131 0.0555% 261,193,206 131622 SANTA CRUZ CITY TR 15,612,527 12,097,002,308 10,873,802,074 1.2764% 1,223,200,234 131627 SANTA CRUZ PARKING #1 - 493,294,297 442,951,779 50,342,518 0.0000% 131630 SCOTTS VALLEY CITY TR 111,462 3,416,274,402 3,099,061,367 0.0351% 317,213,035 131648 WATSONVILLE CITY - TRUST - 5,052,543,458 4,610,334,305 0.0000% 442,209,153 131855 COUNTY LIBRARY 495,181 41,162,323,737 37,506,170,179 3,656,153,558 0.0135% 134910 REC & PARKS - CO SERV AREA #11 32,055 29,331,656,399 26,667,318,645 2,664,337,754 0.0012% 135461 SC FLOOD CONT & WTR CONS ZONE 4 221,804 55,507,943,736 50,442,120,319 5,065,823,417 0.0044% 135462 SC FLOOD CONT & WAT CONS DISTGEN 189,037 55,510,152,704 50,444,263,768 5,065,888,936 0.0037% 304100 COUNTY FIRE 328,299 4,716,286,169 4,422,861,791 293,424,378 0.1119% 622115 CO HWY SAFETY SERVICE AREA #9 63,748 32,058,980,214 29,127,657,320 2,931,322,894 0.0022% 622120 CO HWY SAFETY SERV AREA #9-A 31,261 14,866,518,146 13,564,213,717 1,302,304,429 0.0024% 622125 CO HWY SAFETY SVC AREA #9-ZN B 206 4,496,124,022 4,037,090,269 459,033,753 0.0000% 622245 PAJARO STORM DRAIN MAINT DIST 97,702 8,405,210,928 7,658,908,184 746,302,744 0.0131% 622350 SC FLOOD CONT & WTR CONS ZONE 5 17,160 10,873,035,998 9,838,137,774 1,034,898,224 0.0017% 640101 BONNY DOON SCH DIS GENL 47,070 740,174,131 719,456,439 20,717,692 0.2272% 640301 LIVE OAK SCH DIST GENL 45,720 4,803,427,410 4,337,086,463 466,340,947 0.0098% 640401 MOUNTAIN SCHOOL 134,121 340,667,390 324,697,126 15,970,264 0.8398% 640501 PACIFIC SCHOOL 751,875 151,766,662 139,316,608 12,450,054 6.0391% 640701 SCOTTS VAL SCH DIST GENL 815,799 5,236,261,323 4,746,488,084 489,773,239 0.1666% 640801 SOQUEL SCH DIST GENL 879,280 6,948,401,944 6,298,908,769 649,493,175 0.1354% 641101 SLV UNIF SCH DIST GENL 377,753 4,578,246,862 4,256,213,617 322,033,245 0.1173% 641210 COUNTY SCHOOL SERVICE 2,702,909 53,838,594,330 48,915,628,720 4,922,965,610 0.0549% 641401 S C HI SCH DIST GENL 13,451,114 26,013,957,529 23,563,903,017 2,450,054,512 0.5490% 641501 S C SCH DIST GENL 19,099,567 12,653,751,610 11,385,653,072 1,268,098,538 1.5062% 642001 PAJ VAL UNIF SCH DIST GENL 2,274,583 17,985,241,899 16,325,721,945 1,659,519,954 0.1371% 642501 642501 CABRILLO COMM COL DIST GENERAL 6,266,634 53,888,472,985 48,963,189,394 4,925,283,591 0.1272% 680600 BEN LOMOND FIRE PROT DIST 42,037 923,647,766 839,021,899 84,625,867 0.0497% 680810 BOULDER CREEK FIRE PROT DIST 35,199 1,737,037,866 1,653,932,303 83,105,563 0.0424% 680900 BLDR CREEK REC & PARK DIST 8,324 1,732,211,793 1,650,487,418 81,724,375 0.0102% 681410 CENTRAL WATER DIST GEN 467 692,130,831 632,317,823 59,813,008 0.0008% 681800 FELTON FIRE PROT DIST - 1,110,047,591 1,010,706,716 99,340,875 0.0000% 682500 CENTRAL FPD OF SANTA CRUZ COUNTY 599,684 20,786,316,086 19,553,713,288 1,232,602,798 0.0487% 683100 PAJARO VALLEY FIRE PROTECTION DIST G 214,094 1,951,835,979 1,783,357,966 168,478,013 0.1271% 683310 PAJARO VALLEY PUB CEM DIST 12,019 9,617,295,095 8,763,565,706 853,729,389 0.0014% 684000 S C PORT DIST TR GENL 775,949 20,983,492,557 18,893,373,580 2,090,118,977 0.0371% 684700 SAN LOR VAL CO WAT DIST TR GEN 21,490 3,769,490,389 3,467,143,311 302,347,078 0.0071% 684810 S C CO RESOURCE CONS DIST 2,779 34,949,023,761 31,862,242,396 3,086,781,365 0.0001% 685001 SCOTTS VAL WATER DIST TR GEN 72,664 3,150,143,855 2,682,487,124 467,656,731 0.0155% 685010 SCOTTS VALLEY FIRE PROT DIST 341,001 5,479,401,155 4,965,098,807 514,302,348 0.0663% 689510 ZAYANTE FIRE PROT DIST 887 669,268,839 600,127,977 69,140,862 0.0013% 131410/42 LAKESIDE SCHOOL 15,753 441,714,929 416,383,105 25,331,824 0.0622% 131412/34 LOMA PRIETA SCHOOL 110,674 1,229,843,446 1,157,393,957 72,449,489 0.1528% Previous Roll Year - 2021/22
AB8 Roll Year - 2022/23

SANTA CRUZ COUNTY NONRESIDENTIAL CONSTRUCTION TRANSACTIONS DISTRIBUTED AMOUNTS BY GLKey
Includes all new construction to be completed in 2022

GLKey Fund Description
Non
Residential
Growth from
Construction
Current Roll
Assessed Vallue
Previous Roll
Assessed Value
Change in
Assessed Value
Non
Residential
Growth %
131424/26
/28/30/32/
36/40 SANTA CLARA - COE 15,217 1,671,558,375 1,573,777,062 97,781,313 0.0156% Total 90,417,593 637,861,008,042 580,495,785,708

AGENDA ITEM 10.

DATE: 8/2/2023
City of Scotts Valley

CITY COUNCIL STAFF REPORT
DATE: 8/2/2023
TO: Honorable Mayor and City Council
FROM: Stephanie Hill, Administrative Services Director
APPROVED: Mali LaGoe, City Manager
SUBJECT: Adoption of Investment Policy for 115 Trust

SUMMARY OF ISSUE
On June 21, 2023, the Council adopted Resolution No. 2030 approving the adoption of the Multiple Employer OPEB/Pension 115 Trust administered by Shuster Advisory Group, LLC (Shuster) and authorized the City Manager to enter into the Administrative Services Agreement and Investment Advisor Agreement with Shuster. The next step is to create the investment policy for the Trust.

Assets in a 115 Trust are irrevocably committed to the government function specified in the applicable trust agreement. Additionally, monies held in such trusts can be invested in accordance with the rules governing those trusts, which are different from the investment rules for the City’s pooled investments. Investment restrictions that apply to the City (CA Government Code 53601) do not apply to the assets held in an Irrevocable Section 115 Trust, thus allowing for more flexibility in the investment strategy. An initial deposit of $2.0 million to the Trust was determined to be a feasible and effective amount.

The goal of the Trust’s investment program is to provide a reasonable level of growth which will result in sufficient assets to pay the present and future obligations of the Trust. Based on the current review of the investment market, the City is proceeding with a Conservative Portfolio. The Conservative Portfolio is a globally diversified portfolio consisting of asset classes that may include U.S. and foreign equity, commodities, real estate investment trusts, and bonds. The strategy is designed for investors who cannot afford significant swings in the value of their portfolios.

The City has executed the above agreements with Shuster and has had in depth discussions on investment strategies and Investment Policy. This policy will be reviewed in connection with the City's own Investment Policy and brought to the Council with any recommended changes as they arise. The City and Shuster will have routine meetings and discussions if there are any significant investment market changes.

FISCAL IMPACT
There is no fiscal impact associated with this item.

AGENDA ITEM 10.

DATE: 8/2/2023

STAFF RECOMMENDATION
Staff recommends the City Council approve the Investment Policy for the Section 115 Trust and direct the City Manager to accept the Investment Policy for Section 115 Trust advised by Shuster.

TABLE OF CONTENTS

1. DRAFT Scotts Valley All Fixed to 20 80 Conserv IPS - Range

Page | 1
OPEB/Pension 115 Trust Investment Policy Statement
for City of Scotts Valley, CA Pension Stabilization
Trust Account – Effective June 21, 2023
Introduction
This document sets forth the investment policy for the investment portfolio available to the OPEB/Pension 115 Trust administered by Shuster Advisory Group, LLC.

This policy should be read in conjunction with and subject to the documents related to the Trust, Trust Administrative Services Agreement and Investment Advisor Agreement.

Purpose
The purpose of this investment policy statement is to:
➢ Ensure that all fiduciaries involved in the plan take prudent and careful action to maintain the investment portfolios;
➢ Facilitate the process of ongoing communication between the Employer/Plan Sponsor and its plan fiduciaries;
➢ Confirm the Plan’s investment goals and objectives and management policies as well as cash flow expectations applicable to the investment portfolio identified below and obtained from the Employer/Plan Sponsor;
➢ Provide a framework to construct a well-diversified asset mix that can potentially be expected to meet the account’s short- and long-term needs that is consistent with account’s investment objectives, liquidity considerations and risk tolerance; ➢ Identify any unique considerations that may restrict or limit the investment discretion of the Investment Advisor;
➢ Maintain a long-term perspective when market volatility is caused by short-term market events.

Plan Information as of June 2023
Employer/Plan Sponsor: City of Scotts Valley
Plan Administrator: City Manager
Plan Name (“Plan”): City of Scotts Valley Pension Stabilization Trust Account Type of Account: Pension Funding
Trustee: Alta Trust
Contact: Adam Ponder, CEO
[email protected] / (303) 996-3786
Custodian: Charles Schwab Trust Bank
Contact: Customer Service,
(800) 435-4000
Trust Administrator: Shuster Advisory Group, LLC
Contact: Mark Shuster, Managing Member
[email protected] / (626) 578-0816
Investment Advisor: Shuster Advisory Group, LLC
Contact: Mark Shuster, Managing Member
[email protected] / (626) 578-0816

Page | 2
OPEB/Pension 115 Trust Investment Policy Statement
for City of Scotts Valley, CA Pension Stabilization
Trust Account – Effective June 21, 2023
Investment Advisor Authority
In accordance with the relevant terms of the documents related to Plan, the Employer/Plan Sponsor/Plan Administrator has delegated investment discretion and authority to Shuster Advisory Group, LLC., an independent SEC-registered investment advisor.

Except as otherwise noted in this document, Investment Advisor has full investment discretion over the assets in the account that are managed. Investment Advisor is authorized to purchase, sell, exchange, invest, re-invest and manage the designated assets held in the account without prior approval or subsequent approval of any other party to the Plan. This management shall be based upon the account’s investment objectives provided by the Employer/Plan Sponsor/Plan Administrator.

Investment Objectives and Constraints
The goal of the Plan’s investment program is to provide a reasonable level of growth which, will result in sufficient assets to pay the present and future obligations of the Plan. The following objectives are intended to assist in achieving this goal:
➢ The Plan should seek to earn a return in excess of its policy benchmark over the life of the Plan. ➢ The Plan’s assets will be managed on a total return basis which takes into consideration both investment income and capital appreciation. While the Employer/Plan Sponsor recognizes the importance of preservation of capital, it also adheres to the principle that varying degrees of investment risk are generally rewarded with compensating returns. To achieve these objectives, the Employer/Plan Sponsor allocates its assets (asset allocation) with a strategic perspective of the capital markets.

Anticipated Cash Flows: Assets in the Plan will seek to mitigate the impact of funding and future rate increases for CalPERS. It is not anticipated that the Plan will see a high level of disbursements in the first five years of the Plan. However, situations may arise, leading to a disbursement of assets to the CalPERS Trust.

Investment Objective: Conservative - The Conservative Portfolio is a globally diversified portfolio consisting of asset classes that may include U.S. and foreign equity, commodities, real estate investment trusts, and bonds. The strategy is designed for investors who cannot afford significant swings in the value of their portfolios.

Risk Tolerance: Conservative - The account’s risk tolerance has been rated conservative, which demonstrates that the account can accept less than moderate fluctuations to pursue its investment objectives.

Page | 3
OPEB/Pension 115 Trust Investment Policy Statement
for City of Scotts Valley, CA Pension Stabilization
Trust Account – Effective June 21, 2023
Strategic Asset Allocation:

Strategic Asset Allocation: All Fixed Conservative
Equity (Range) 0% 0-30%
Policy: 0% 20%
Fixed Income (Range) 99% 68-99%
Policy: 99% 78%
Cash (Range) 1% 0-10%
Policy: 1% 2%
The Employer/Plan Sponsor has selected All Fixed for initial funding purposes. The Investment Advisor will manage the portfolio as All Fixed for the first six months following initial funding unless given alternative direction by the Employer/Plan Sponsor prior to investment or during the first six months.

Beginning six months after initial funding and assuming alternative direction has not been received, the Investment Advisor will implement a Conservative Strategic Asset Allocation.

Direction may be provided via email from the Plan Administrator/City Manager to the Investment Advisor with verbal confirmation followed up by the Investment Advisor. Direction may also be provided verbally from the Plan Administrator/City Manager to the Investment Advisor followed by email confirmation between Investment Advisor and Plan Administrator/City Manager.

Market conditions may cause the account’s asset allocation to vary from the stated range from time to time. The Investment Advisor will rebalance the portfolio no less than quarterly and/or when the actual weighting differs substantially from the strategic range, if appropriate and consistent with your objectives.

Performance Benchmarks: The performance of the total Plan shall be measured over a three and five-year period. These periods are considered sufficient to accommodate the market cycles experienced with investments. The performance shall be compared to the return of the total portfolio blended benchmark shown below.

Benchmark All Fixed Conservative
ICE BofA 0-3 Mon US Treasury Bill 4% 4-6%
Bloomberg US Agg Intermediate 96% 69-96%
MSCI EAFE 0% 0-5%
MSCI EM 0% 0-7%
Russell 2000 0% 0-3%
S&P 500 0% 0-7%
S&P MidCap 400 0% 0-2%
Security Selection: Investment Advisor may utilize a full range of investment vehicles when constructing the investment portfolio, including but not limited to individual securities, mutual funds, exchange-traded funds,

Page | 4
OPEB/Pension 115 Trust Investment Policy Statement
for City of Scotts Valley, CA Pension Stabilization
Trust Account – Effective June 21, 2023
guaranteed fixed income portfolios, and alternative investments.

Duties and Responsibilities
The Employer/Plan Sponsor/Plan Administrator is responsible for:
➢ Confirming the accuracy of this Investment Policy Statement, in writing. ➢ Advising Trustee, Custodian and Investment Advisor of any change in the plan/account’s financial situation, funding status, or cash flows, which could possibly necessitate a change to the account’s overall risk tolerance, time horizon or liquidity requirements; and thus would dictate a change to the overall investment objective and goals for the account. ➢ Monitoring and supervising all service vendors and investment options, including investment managers.
➢ Avoiding prohibited transactions and conflicts of interest.

The plan Custodian is responsible for:
➢ Valuing the holdings.
➢ Collecting all income and dividends owed to the Plan. ➢ Settling all transactions (buy-sell orders).

The plan Trustee is responsible for:
➢ Tracking valuation of the holdings.
➢ Holding assets in Trust as directed trustee.

The Trust Administrator and Investment Advisor is responsible for:
➢ Assisting the Employer/Plan Sponsor/Plan Administrator with the development and maintenance of this Investment Policy Statement.
➢ Meeting with Employer/Plan Sponsor/Plan Administrator to review portfolio structure, holdings, and performance.
➢ Designing, recommending and implementing an appropriate asset allocation consistent with the investment objectives, time horizon, risk profile, guidelines and constraints outlined in this statement.
➢ Researching and monitoring investment advisers and investment vehicles. ➢ Purchasing, selling, and reinvesting in securities held in the account. ➢ Monitoring the performance of all selected assets.
➢ Voting proxies, if applicable.
➢ Recommending changes to any of the above.
➢ Periodically reviewing the suitability of the investments, being available to meet with the committee at least once each year and being available at such other times within reason at your request. ➢ Preparing and presenting appropriate reports.

Page | 5
OPEB/Pension 115 Trust Investment Policy Statement
for City of Scotts Valley, CA Pension Stabilization
Trust Account – Effective June 21, 2023
Acknowledgement and Acceptance
I/We being the Employer/Plan Sponsor with responsibility for the account(s) held on behalf of the Employer/Plan Sponsor specified below, designate Investment Advisor as having the investment discretion and management responsibility indicated in relation to all assets of the Plan or specified Account. If such designation is set forth in the Plan/trust, I/We hereby confirm such designation as Investment Advisor.

I have read the Investment Guidelines Document, and confirm the accuracy of it, including the terms and conditions under which the assets in this account are to be held, managed, and disposed of by the Investment Advisor. This Investment Guidelines Document supersedes all previous versions of an Investment Guidelines Document or investment objective instructions that may have been executed for this account.

Employer/Plan Sponsor: City of Scotts Valley
Name: Mali LaGoe
Title: City Manager
Signature:

Date:

Investment Advisor: Shuster Advisory Group, LLC
Name: Mark Shuster
Title: Managing Member
Signature:

Date:

AGENDA ITEM 11.

DATE: 8/2/2023
City of Scotts Valley

CITY COUNCIL STAFF REPORT
DATE: 8/2/2023
TO: Honorable Mayor and City Council
FROM: Mali LaGoe, City Manager
APPROVED: Mali LaGoe, City Manager
SUBJECT: Approve lease agreement between the City of Scotts Valley and the County of Santa Cruz for the Scotts Valley Library

SUMMARY OF ISSUE
On June 1, 2011 the City entered into a lease agreement with the County of Santa Cruz with a Pass Through Agreement designating the Santa Cruz County Library Joint Powers Authority to operate a Tier II Public Library at the City owned 251 Kings Village Road. Following an Amendment to extend the term to June 30, 2017, the Lease agreement has since expired.

The new lease agreement includes a provision of rent for $1.00 per year, and an agreement that the City will reimburse the pro rata share of property insurance provided by the County. The County will reimburse the City for the pro rata share of common area maintenance to be performed by the City. The Library's share of the building is 59% and includes the inside space, sidewalk in front of the library and patio area behind the library space. The common areas include the parking lot, surrounding landscaping, and building envelop including the roof. The term of the new agreement expires on December 31, 2025, to coincide with the expiration of the Joint Powers Agreement between the County of Santa Cruz and the Cities of Scotts Valley, Capitola and Santa Cruz.

The lease agreement is accompanied with a sub-lease agreement between the County of Santa Cruz and the Library Services Joint Powers Authority to operate the Scotts Valley Library in the facility. The JPA and County are responsible for maintenance and repairs within the leased space, or defined premise. The Library hours of operation are defined in the lease as "not less than comparable staff levels and service hours provided at the Aptos and Live Oak branches, whichever is greater" as provided in the prior lease agreement.

FISCAL IMPACT
The Lease agreement includes a $1/year lease cost payable to the City. In addition, the County will provide property insurance for the whole building and the City will reimburse the County for the pro rata share of property insurance not occupied by the Library. The

AGENDA ITEM 11.

DATE: 8/2/2023
County will be responsible for repairs and maintenance to the Library's portion of the facility.

STAFF RECOMMENDATION
It is recommended the City Council authorize the City Manager to enter into the Lease Agreement between the City of Scotts Valley and the County of Santa Cruz for the Scotts Valley Library facility and to sign on the City's behalf to approve the sublease agreement between the County of Santa Cruz and the Santa Cruz Public Library Joint Powers Authority.

TABLE OF CONTENTS

1. Scotts Valley Library Lease 7.28.23

2. Scotts Valley Sublease 7.28.23

251 KINGS VILLAGE RD #380
251 KINGS VILLAGE RD #380
SCOTTS VALLEY LIBRARY – 251 KINGS VILLAGE RD
APN 022-212-17

LESSOR: CITY OF SCOTTS VALLEY
LESSEE: COUNTY OF SANTA CRUZ, a political subdivision of the State of California

1 251 KINGS VILLAGE RD #380

LEASE AGREEMENT

TABLE OF CONTENTS
ARTICLE NO. PAGE NO.

LEASE AGREEMENT….…………………………………………………………………………...…………........ 1 ARTICLE 1 PREMISES……………………………………………………………………………………...…3

1.1 PREMISES…………………………………………………………………………………………………. 3
ARTICLE 2 TERM………………………………………………………………………………………………3

2.1 TERM........................................................................................................................................................... 3

2.2 HOLD OVER………………………………………………………………………………………………. 3

2.3 EXTENSION ………………………………………………………………………………………………3

2.4 TERMINATION……………………………………………………………………………………………...3
ARTICLE 3 CONSIDERATION ……………………………………………………………………………….4

3.1 BASE ANNUAL RENT................................................................................................................................... 4

3.1.1 DELIVERY OF RENT PAYMENTS................................................................................................................... 4

3.1.2 FAILURE TO PAY BASE RENT OR ADDITIONAL RENT; LATE CHARGE.......................................................... 4

3.2 LIBRARY OPERATIONS……………………………………………………………………………………. 4 ARTICLE 4 POSSESSION AND USE................................................................................................................ 4

4.1 PERMITTED USES......................................................................................................................................... 4

4.2 HOURS OF OPERATION................................................................................................................................. 5

4.3 DUTIES AND PROHIBITED CONDUCT …….…………………………………………………………………5

4.4 COMPLIANCE WITH STORMWATER LAWS…………………………………………………………………5 ARTICLE 5 SUBORDINATION CLAUSE …………………………………………………………………5

5.1 SUBORDINATION ......................................................................................................................................... 5 ARTICLE 6 UTILITIES…………..……………………………………………...…………..…………………6

6.1 UTILITY SERVICES…………………………………………………………………………………………6

6.2 ENERGY CONSERVATION BY LESSEE………………………………………………………………………6

6.3 ENERGY CONSERVATION BY CITY………………………………………………………………………....6 ARTICLE 7 MECHANICS’ LIENS…...……………………………………………………………………… 6

7.1 MECHANICS' LIENS………………………………………………………………………………………. 6 ARTICLE 8 SECURITY………………………………………………………………………………………...7

8.1 SECURITY…… ……………………………………………………………………………………………7
ARTICLE 9 TAXES, ASSESSMENTS AND FEES…………………………………………………………...7

9.1 RESPONSIBILITY FOR PAYMENT OF TAXES AND ASSESSMENTS ................................................................... 7

9.2 DEFINITION OF TAXES ................................................................................................................................. 7

9.3 CREATION OF POSSESSORY INTEREST ......................................................................................................... 7 ARTICLE 10 REPAIRS; MAINTENANCE…………………………………………………………………….7

10.1 ACCEPTANCE OF PREMISES ......................................................................................................................... 7

10.2 LESSEE'S REPAIR AND MAINTENANCE OBLIGATIONS.................................................................................. 8

10.3 LESSEE’S FAILURE TO MAINTAIN................................................................................................................ 8

10.4 RIGHT TO ENTER ...........................................................................................................................................

10.5 CITY NOT OBLIGATED TO REPAIR OR MAINTAIN; LESSEE'S WAIVER OF CALIFORNIA CIVIL CODE SECTION 1942 ……………………………………………………………………………………………………………..8
ARTICLE 11 INDEMNITY AND INSURANCE…………………………………………………………...…...8

11.1 LESSEE’S INDEMNITY.................................................................................................................................. 8

11.2 CITY’S INDEMNITY...................................................................................................................................... 9

2 251 KINGS VILLAGE RD #380

11.3 LESSEE'S INSURANCE OBLIGATIONS……………………………………………………………………….9

11.4 LESSOR'S INSURANCE OBLIGATIONS ...........................................................................................................9 ARTICLE 12 HAZARDOUS MATERIALS….....................................................................................................9

12.1 HAZARDOUS MATERIALS LAWS-DEFINITION..............................................................................................9

12.2 HAZARDOUS MATERIALS - DEFINITION.......................................................................................................9

12.3 LESSEE'S REPRESENTATIONS AND WARRANTIES.......................................................................................10

12.4 INDEMNIFICATION BY LESSEE ...................................................................................................................11

12.5 REMEDIES CUMULATIVE; SURVIVAL.........................................................................................................11

12.6 INSPECTION ...............................................................................................................................................12 ARTICLE 13 ASSIGNMENT AND SUBLETTING…………………………………………………………..12 ARTICLE 14 CITY'S RIGHT OF ACCESS…………………………………………………………………...12 ARTICLE 15 QUIET ENJOYMENT…………………………………………………………………………..13 ARTICLE 16 NOTICES…………………………………………………………………………………………13

16.1 NOTICES....................................................................................................................................................13

16.2 DEFAULT NOTICES ....................................................................................................................................13 ARTICLE 17 GENERAL PROVISIONS……………………………………………………………………...14

17.1 AUTHORITY...............................................................................................................................................14

17.2 BROKERS...................................................................................................................................................14

17.3 CAPTIONS..................................................................................................................................................14

17.4 CITY APPROVAL........................................................................................................................................14

17.5 CUMULATIVE REMEDIES ...........................................................................................................................14

17.6 ENTIRE AGREEMENT .................................................................................................................................14

17.7 ESTOPPEL CERTIFICATE ............................................................................................................................14

17.8 EXHIBITS ...................................................................................................................................................14

17.9 FORCE MAJEURE .......................................................................................................................................15

17.10 GOVERNING LAW......................................................................................................................................15

17.11 INTERPRETATION.......................................................................................................................................15

17.12 JOINT AND SEVERAL LIABILITY.................................................................................................................15

17.13 LEASE ADMINISTRATION...........................................................................................................................15

17.14 LESSEE'S LEASE ADMINISTRATION............................................................................................................15

17.15 LIQUIDATED DAMAGES.............................................................................................................................15

17.16 MODIFICATION..........................................................................................................................................16

17.17 PARTIAL INVALIDITY ................................................................................................................................16

17.18 PAYMENTS ................................................................................................................................................16

17.19 SUCCESSORS & ASSIGNS ...........................................................................................................................16

17.20 TIME OF ESSENCE......................................................................................................................................16

17.21 WAIVER ....................................................................................................................................................16 SIGNATURE PAGE ………………………………………………………………………………………………17
EXHIBIT A - MAP OF THE PREMISES……………………………………………………………………….A1 EXHIBIT B - INSURANCE REQUIREMENTS………………………………………………………………..B1 EXHIBIT C- PROPERTY INSURANCE PREMISES…..……………………………………………………..C1 EXHIBIT D- GENERAL LIABILITY INSURANCE PREMISES…………………………………………….D1

3 251 KINGS VILLAGE RD #380

LEASE AGREEMENT
This Lease is entered into this ____ day of_____________, 20__, between the City of Scotts Valley (“City” or “Lessor”) and the County of Santa Cruz (“County” or “Lessee”). The City and County are sometimes referred to herein individually as “Party” or collectively as “Parties.”
This Lease is entered into upon the following facts, understandings and intentions of the City and County.

ARTICLE 1

PREMISES

1.1 Premises. City owns that certain real property commonly known as 251 Kings Village Rd, Scotts Valley, CA 95066 on assessor’s parcel number 022-212-17, referred to herein as “Property”. The Property is currently improved with a 22,230 square foot building, a parking lot and rear outdoor patio. The premises to be occupied under this lease is 13,150 square feet of the building, the sidewalk adjacent to the building and the entire outdoor patio of approximately 3,500 square feet, more particularly described in Exhibit “A” attached hereto and made a part hereof and referred to herein as “Premises”. The remainder of the building is specifically excluded from the Premises and is not included in this Lease.

ARTICLE 2
TERM

2.1 Term. The term of this Lease shall commence upon execution by all Parties hereto, and shall expire when that specific agreement entitled Fourth Amendment to the Joint Powers Agreement Between the City of Santa Cruz and the County of Santa Cruz and the Cities of Capitola and Scotts Valley relating to Library Services (“JPA Agreement”) naturally terminates at 11:59 PM on December 31, 2025, or at the expiration of the term established by future amendment(s) of the JPA Agreement, whichever is later, referred to herein as “Term”.

2.2 Hold Over. If Lessee remains in possession of the Premises beyond the term of this Lease or any extension or renewal hereof without executing a new written Lease with City, such holding over shall not constitute a renewal or extension of this Lease, but Lessee shall be a tenant on a month to month basis terminable with ninety (90) days’ notice by either party.

2.3 Extension. The Term of this Lease may only be extended by written amendment of this Lease executed by all Parties hereto.

2.4 Termination. This Lease may be terminated at any time, for any reason, by mutual written agreement of the Parties hereto. The Parties agree to negotiate in good faith regarding the terms and conditions surrounding a request for termination and agreement to terminate will not be unreasonably withheld. The Parties further agree that if City detaches from the County Library Fund, a special revenue fund that includes property taxes assessed in the City, during the Term of this Lease, this Lease and any subleases will automatically terminate and City and Lessee mutually agree that all obligations of Lessee shall be deemed fulfilled in their entirety.

4 251 KINGS VILLAGE RD #380
ARTICLE 3

CONSIDERATION

3.1 Base Annual Rent. Lessee shall pay as rent for the use and occupancy of the Premises an annual fee of $1.00, due on the anniversary date of the execution of Lease. Rent shall remain the same for the entire Term of this Lease unless adjusted by written amendment executed by all parties hereto.

3.1.1 Delivery of Rent Payments. All rent due under this Lease shall be made payable to the City of Scotts Valley and shall be considered paid when delivered to:

CITY OF SCOTTS VALLEY
1 Civic Center Drive
Scotts Valley, CA 95066
City may, at any time, by written notice to Lessee, designate a different address to which Lessee shall deliver the rent payments. City may, but is not obligated to, send rent invoices to Lessee.

3.1.2 Failure to Pay Base Rent or Additional Rent; Late Charge. If Lessee fails to pay rent due hereunder at the time it is due and payable, or within thirty (30 days thereafter, such unpaid amounts shall bear interest at the rate of ten percent (10%) per year from the date due to the date of payment, computed on the basis of monthly compounding with actual days elapsed compared to a 365-day year. However, City may in its sole discretion waive any delinquency payment or late charge upon written application of Lessee.

3.2 Library Operations. In addition to the payments of Base Annual Rent, Lessee shall assume responsibility for maintenance, repairs, and operation of the Library and the Premises, as more fully described in this Lease.

ARTICLE 4

POSSESSION AND USE

4.1 Permitted Uses. Lessee shall use the Premises solely for public library services.

No one other than Lessee, its agents, volunteers and employees, or any Lessee approved by City as provided in Article 13, "Assignment and Subletting," is permitted to use the Premises for the purposes described herein, and Lessee shall be fully responsible for the activities of its agents, volunteers and employees and Lessees, if any, on the Premises.

4.2 Hours of Operation. Lessee will provide staffing levels and service hours for the Library that are not less than the comparable staff levels and service hours provided at the Aptos County Branch Library and Live Oak Branch Library, whichever is greater, as said staffing levels at the Aptos County Branch Library and Live Oak Branch Library may change from time to time.

4.3 Duties and Prohibited Conduct. Where Lessee is reasonably in doubt as to the propriety of any particular use, Lessee may request the written determination of City that such use is or is not permitted, and Lessee will not be in breach or default under this Lease if Lessee abides by such determination. Notwithstanding the foregoing, however, Lessee shall not use nor permit the use of the Premises in any manner that will tend to create waste or a nuisance. Lessee shall, at

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Lessee's expense, comply promptly with all applicable statutes, laws, ordinances, rules, regulations, orders, covenants and restrictions of record, and requirements in effect during the term, regulating the use by Lessee of the Premises. Lessee shall not use, or permit any person or persons to use, the Premises for the sale or display of any goods and/or services, which, in the sole discretion of City, are inconsistent with the permitted uses of the Premises pursuant to this Lease.

The sale of books, educational services, fundraising and other goods/services incidental to library purposes are deemed consistent with the permitted use of the Premises. Lessee shall keep the Premises, and every part thereof, in a decent, safe and sanitary condition, free from any objectionable noises or odors, except as may be typically present for the permitted uses specified above.

4.4 Compliance with Stormwater Laws. Lessee's use of the Premises is subject to federal, state and local laws regarding the discharge into the stormwater conveyance system of pollutants. Compliance with these laws may require Lessee to develop, install, implement and maintain pollution prevention measures, source control measures and Best Management Practices ("BMPs"). Lessee further agrees to develop, install, and/ or implement any BMPs or similar pollution control devices required by federal, state and/or local law and any implementing regulations. Any costs associated with such implementation will be handled consistent with other maintenance and repair costs as outlined in Article 10.

Lessee understands and acknowledges that the storm water and non-storm water requirements applicable to Lessee's use of the Premises may be changed from time to time by federal, state and/or local authorities, and that additional requirements may become applicable based on changes in Lessee's activities or development or redevelopment by Lessee or City. To the extent there is a conflict between any federal, state, or local law, Lessee shall comply with the more restrictive provision. If City receives any fine or fines from any regulatory agency as a result of Lessee's failure to comply with applicable storm water laws as set forth in this Article, Lessee shall reimburse City for the entire fine amount.

ARTICLE 5

SUBORDINATION CLAUSE

5.1 Subordination. The Parties acknowledge that City may enter into one or more lease/leaseback financing arrangements consisting generally of a site lease, lease agreement, assignment agreement and related agreements (collectively, the “Financing Leases”) with a financing authority or another public agency in order to assist the City in connection with financing and refinancing certain capital improvements of the City.

Under the Financing Leases, the City may lease and lease back certain real property and improvements that may include the Premises subject to one or more library leases.

In order to facilitate the execution and delivery of any Financing Leases, Lessee and City desire that this Lease and Lessee's right, title and interest in the Premises be subordinate to the rights, titles, and interests of the parties to the Financing Leases.

Therefore, it is agreed that this Lease and all of Lessee's right, title, and interest in and to the Premises thereunder shall be, and the same are expressly made subject to, subordinate and inferior to any Financing Leases, and to all extensions, renewals, modifications, consolidations and replacements of the Financing Leases.

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ARTICLE 6

UTILITIES

6.1 Utility Services. Lessee shall make all arrangements for and pay for all separately charged utilities and municipal services supplied to the Premises or used by Lessee, including but not limited to water, gas, electricity, garbage collection and telephone, and for all connection charges. City shall have no responsibility either to provide or pay for such services.

Notwithstanding the above, the City shall assume responsibility of jointly metered utilities including power for the parking lot lighting, sewer, water and landscape services and bill Lessee or sublessee its pro rata share for such utilities. If it is determined that the pro rata share of utilities is inequitable based on usage, Parties agree to negotiate in good faith to determine the appropriate share of utilities cost.

6.2 Energy Conservation by Lessee. Lessee shall endeavor to promote energy conservation measures in the operation of all activities on the Premises. Lessee shall cooperate with the City in all forms of energy conservation including energy-efficient lighting, heating and air-conditioning systems, and fixtures and equipment. Lessee shall comply with all federal, State and City laws, by-laws, regulations, etc., relating to the conservation of energy. Lessee shall comply with all reasonable requests and demands of the City pertaining to the installation and maintenance of energy conservation systems, fixtures, and equipment installed by the City.

6.3 Energy Conservation by City. City is required to comply with all laws and regulations requiring the installation of energy-efficient systems, fixtures, and equipment at City buildings and facilities. In accordance with all laws and regulations and this Lease, Lessee shall maintain or repair, or cause to maintain or repair, the building, and related systems in accordance with current energy conservation standards.

ARTICLE 7

MECHANICS' LIENS

7.1 Mechanics Liens. Lessee shall pay, or cause to be paid, all costs for work done by it, or caused to be done by it, on the Premises, and for all materials furnished for or in connection with any such work. If any lien is filed against the Premises, Lessee shall cause the lien to be discharged within ten (10) days after it is filed. Lessee shall indemnify, defend and hold City harmless from any and all liability, loss, damage, costs, attorneys' fees and all other expenses on account of claims of lien of laborers or others for work performed or materials or supplies furnished for Lessee or persons acting on behalf of Lessee.

ARTICLE 8

SECURITY

8.1 Security. Lessee shall be responsible for and shall provide for the security of the Premises, and City shall have no responsibility therefor.

ARTICLE 9

TAXES, ASSESSMENTS AND FEES

9.1 Responsibility for Payment of Taxes and Assessments. City shall not be

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obligated to pay any taxes or assessments accruing against Lessee on the Premises or any interest of Lessee therein before, during or after the Term, or any extension thereof; all such payments shall be the sole responsibility of Lessee. In addition, Lessee shall be solely responsible for payment of any taxes or assessments levied upon any improvements, fixtures or personal property located on the Premises, to the extent that such taxes or assessments result from the business or other activities of Lessee upon, or in connection with, the Premises.

9.2 Definition of Taxes. As used herein, the term "taxes" means all taxes, governmental bonds, special assessments, Mello-Roos assessments, charges, rent income or transfer taxes, license and transaction fees, including, but not limited to, (i) any state, local, federal, personal or corporate income tax, or any real or personal property tax, (ii) any estate inheritance taxes, (iii) any franchise, succession or transfer taxes, (iv) interest on taxes or penalties resulting from Lessee's failure to pay taxes, (v) any increases in taxes attributable to the sale of Lessee's Leasehold interest in the Premises, or (vi) any taxes which are essentially payments to a governmental agency for the right to make improvements to the Premises.

9.3 Creation of Possessory Interest. Pursuant to the provisions of Revenue and Taxation Code Section 107.6, Lessee is hereby advised that the terms of this Lease may result in the creation of a possessory interest. If such a possessory interest is vested in Lessee, Lessee may be subjected to the payment of real property taxes levied on such interest. Lessee shall be solely responsible for the payment of any such real property taxes. Lessee shall pay all such taxes when due, and shall not allow any such taxes, assessments or fees to become a lien against the Premises or any improvement thereon; provided, however, that nothing herein shall be deemed to prevent or prohibit Lessee from contesting the validity of any such tax, assessment or fee in a manner authorized by law.

ARTICLE 10
REPAIRS; MAINTENANCE

10.1 Acceptance of Premises. Lessee acknowledges that Lessee has made a thorough inspection of the Premises prior to the commencement date of this Lease, and that it accepts the Premises as of the commencement date in their condition at that time. Lessee further acknowledges that City has made no oral or written representations or warranties to Lessee regarding the condition of the Premises, and that Lessee is relying solely on its inspection of the Premises with respect thereto. Lessee agrees not to make changes to the built environment without obtaining the City’s prior written approval. The Parties agree and acknowledge that Lessee has procured and is currently undergoing a full facility assessment of the Premises to determine the appropriate amount of funding needed to maintain the Premises.

10.2 Lessee's Repair and Maintenance Obligations. Lessee shall at all times during the Term, repair and maintain the Premises in good and tenantable condition and coordinate all Maintenance and Repairs. Upon surrender of the Premises, Lessee shall deliver the Premises to City in good order, condition and state of repair, but shall not be responsible for damages resulting from ordinary wear and tear. Lessee shall maintain all trash receptacles and trash areas in a clean, orderly and first-class condition and empty all trash receptacles on the Premises daily. Lessee shall be responsible for maintaining all lighting and planters on the Premises. Lessee shall be responsible for the repair and maintenance of the HVAC system serving the Premises. Any proposed remodel of the Library by Lessee, that involves reconstruction of structural building elements, relocation of interior walls, or removal of building finishes, must be approved in advance by the City.

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Approval by City shall not be unreasonably withheld.

10.3 Lessee's Failure to Maintain. If Lessee refuses or neglects to repair, replace, or maintain the Premises, or any part thereof, in a manner reasonably satisfactory to City, City may, upon giving Lessee sixty (60) days’ written notice of its election to do so, make such repairs or perform such maintenance itself or using vendors selected by City. In the event of an emergency, danger to life or safety, or threat to the integrity of the Premises, City may perform necessary repairs and maintenance without prior notice. Lessee shall reimburse the City for the cost of all such repairs within thirty (30) days of receipt of an invoice from the City. If City staff performs the repairs, Lessee shall reimburse the City for staff time at the City’s standard rate.

10.4 Share of Common Area Operating Expenses. Maintenance and repairs in the common areas of the Property, shall be shared on a pro rata basis. City shall maintain in good working condition and repair the common areas of the Property, which include, but are not limited to, general maintenance and repair of foundations, roofs and skylights, structural components and exterior surfaces of exterior walls of the Building (exclusive of doors, door frame, door checks, windows, window frames and store fronts), parking lot and parking lot landscaping; provided, however, if any repairs or replacements are necessitated by the negligence, gross negligence or willful acts of Lessee, its representatives, customers or by reason of Lessee’s failure to observe or perform any provisions contained in this agreement or cause by alterations, additions or improvements made by Lessee or its representatives, the cost of such repairs and replacements shall be the sole obligation of Lessee. Upon performance of any such maintenance or repair, City shall bill Lessee or sublessee its pro rata share of the cost per major and minor maintenance and repair obligations as defined in the sublease. Lessee or sublessee shall reimburse City within 60 days of receipt of such bill.

10.5 Lessee’s Pro Rata Share. Lessee's pro rata share of Common Area Operating Expenses shall be 59% based on the current square footage of the Building.

10.6 Right to Enter. Lessee shall permit City, or its authorized representatives, to enter the Premises at all times during usual business hours to inspect the same, and to perform any work therein that (a) may be necessary to comply with any laws, ordinances, rules or regulations of any public authority, (b) City may deem necessary to prevent waste or deterioration in connection with the Premises if Lessee does not make, or cause to be made, such repairs or perform, or cause to be performed, such work promptly after receipt of written demand from City, and (c) City may deem necessary in connection with the expansion, reduction, remodeling, protection or renovation of any City-constructed or owned facilities on or off of the Premises. Nothing herein shall imply any duty on the part of City to do any such work which, under any provision of this Lease, Lessee may be required to do, nor shall City's performance of any repairs on behalf of Lessee constitute a waiver of Lessee's default in failing to do the same. If City exercises any of its rights under this Section, Lessee shall not be entitled to any compensation, damages or abatement of rent from City for any injury or inconvenience occasioned thereby.

10.7 City Not Obligated to Repair or Maintain; Lessee's Waiver of California Civil Code Section 1942. To the extent that any remedies specified in this Lease conflict or are inconsistent with any provisions of California Civil Code section 1942, or any successor statute thereto ("CC §1942"), the provisions of this Lease shall control. Lessee specifically waives any right it may have pursuant to CC §1942 to effect maintenance or repairs to the Premises and to abate the costs thereof from rent due to the City under this Lease.

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ARTICLE 11

INDEMNITY AND INSURANCE

11.1 Lessee’s Indemnity. City shall not be liable for, and Lessee shall defend and indemnify City, including its employees and agents, against any and all claims, demands, liability, judgments, awards, fines, mechanics' liens or other liens, labor disputes, losses, damages, expenses, charges or costs of any kind or character, including attorneys’ fees and court costs (hereinafter collectively referred to as "Claims"), related to this Lease and arising either directly or indirectly from any act, error, omission or negligence of Lessee or its contractors, licensees, agents, volunteers, servants or employees, including, without limitation, Claims caused by the concurrent negligent act, error or omission, whether active or passive, of City. Lessee shall have no obligation, however, to defend or indemnify City from a Claim if it is determined by a court of competent jurisdiction that such Claim was caused by the sole negligence or willful misconduct of City.

11.2 City’s Indemnity. City shall defend and indemnify Lessee and hold it harmless from and against any Claims related to this Lease that arise solely from any act, omission or negligence of City Parties.

11.3 Lessee's Insurance Obligations. Without limiting Lessee's indemnification obligations to City under this Lease, Lessee shall provide and maintain, during the Term and for such other period as may be required herein, at its sole expense, insurance in the amounts and form specified in Exhibit "B," attached hereto.

Lessee shall maintain a policy of All-Risk Insurance on the entire 22,230 square foot building, more particularly described in Exhibit “C” attached hereto and made a part hereof and referred to herein as “Property Insurance Premises”, and covering the City's personal property , including any fixtures or equipment in the Property Insurance Premises. Lessor shall be required to pay 41% of the premium for such All-Risk Insurance obtained by Lessee. Such payment shall be made by Lessor within 30 days of invoice by the Lessee.

Lessee shall maintain a policy of General Liability Insurance utilizing a program of selffunding with regard to any liability it may incur for personal injury or property damage arising out its use or occupancy of the Premises and the entire parking lot area, more particularly described in Exhibit “D” attached hereto and made a part hereof and referred to herein as “General Liability Insurance Premises”.

11.4 Lessor’s Insurance Obligations. Lessor shall provide and maintain, during the Term and for such other period as may be required herein, at its sole expense, general liability insurance to cover the Property in the minimum amount of $2,000,000.

ARTICLE 12

HAZARDOUS MATERIALS

12.1 Hazardous Materials Laws-Definition. As used in this section, the term "Hazardous Materials' Laws" means any and all federal, state or local laws or ordinances, rules, decrees, orders, regulations or court decisions (including the so-called "common law"), including

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without limitation the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. 9601 et seq.), the Hazardous Materials Transportation Act, as amended (49 U.S.C. 1801 et seq.), the Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C. 6901 et seq.), and the California Environmental Quality Act of 1970, relating to hazardous substances, hazardous materials, hazardous waste, toxic substances, environmental conditions on, under or about the Premises, soil and ground water conditions or other similar substances or conditions.

12.2 Hazardous Materials - Definition. As used in this section the term "Hazardous Materials" means any chemical, compound, material, substance or other matter that:
a. Is a flammable, explosive, asbestos, radioactive nuclear medicine, vaccine, bacteria, virus, hazardous waste, toxic, overtly injurious or potentially injurious material, whether injurious or potentially injurious by itself or in combination with other materials; b. Is controlled, referred to, designated in or governed by any Hazardous Materials Laws;
c. Gives rise to any reporting, notice or publication requirements under any Hazardous Materials Laws; or
d. Is any other material or substance giving rise to any liability, responsibility or duty upon the City or Lessee with respect to any third person under any Hazardous Materials Law.

12.3 Lessee's Representations and Warranties. Lessee represents and warrants that, during the Term or any extension thereof, or for such longer period as may be specified herein, Lessee shall comply with the following provisions unless otherwise specifically approved in writing by City:
a. Lessee shall not cause or permit any Hazardous Materials to be brought, kept or used in or about the Premises by Lessee, its agents, employees, assignees, contractors or invitees, except as required by Lessee's permitted use of the Premises, as described in Section 5.1, "Permitted Uses."
b. Any handling, transportation, storage, treatment or usage by Lessee of Hazardous Materials that is to occur on the Premises following the Commencement Date shall be in compliance with all applicable Hazardous Materials Laws. c. Any leaks, spills, release, discharge, or emission of Hazardous Materials caused by Lessee, or disposal of Hazardous Materials owned by Lessee, which may occur on the Premises during the Term shall be promptly and thoroughly cleaned and removed from the Premises by Lessee at its sole expense, and any such discharge shall be promptly reported in writing to City, and to any other appropriate governmental regulatory authorities. d. No friable asbestos shall be constructed, placed on, deposited, stored, disposed of, or located by Lessee in the Premises.
e. No underground improvements, including but not limited to treatment or storage tanks, or water, gas or oil wells shall be located by Lessee on the Premises without City's

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prior written consent.
f. Lessee shall conduct and complete all investigations, studies, sampling, and testing procedures and all remedial, removal, and other actions necessary to clean up and remove all Hazardous Materials on, from, or affecting the Premises in accordance with all applicable Hazardous Materials' Laws and to the satisfaction of City. g. Activities proposed by Lessee that involve disturbing asbestos materials on site shall only be conducted in accordance with all federal, state and local asbestos rules and regulations including, but not limited to, the California Occupational Safety and Health Administration (Cal/OSHA), Environmental Protection Agency (EPA) and Air Pollution Control District (APCD), with prior written consent of the City, as follows:

Prior to conducting asbestos related activities, Lessee shall notify City of the proposed work at least one month in advance. The notification shall include the location of work, type of asbestos containing material (ACM) to be removed and a work plan indicating the work practices and methods of control to be used during the abatement activity to control asbestos fiber release. The City Occupational Health Program shall review the work plan and may modify the plans as necessary.

Any asbestos related activities shall be performed by a contractor that is registered with Cal/OSHA and certified by the California Contractors State Licensing Board to perform asbestos work. Any asbestos related activities shall be overseen by a California Certified Asbestos Consultant (CAC), or a Certified Site Surveillance Technician under the direction of a CAC.

Replacement products used in tenant improvements or other construction activities shall not contain asbestos. Any replacement products used by Lessee shall be verified as non-asbestos products by using Material Safety Data Sheets (MSDS) and/or having the architect or project engineer verify that ACMs were not used.
h. Lessee shall promptly supply City with copies of all notices, reports, correspondence, and submissions made by Lessee to the United States Environmental Protection Agency, the United Occupational Safety and Health Administration, and any other local, state or federal authority which requires submission of any information concerning environmental matters or hazardous wastes or substances pursuant to applicable Hazardous Materials' Laws. i. Lessee shall promptly notify City of any liens threatened or attached against the Premises pursuant to any Hazardous Materials' Law. If such a lien is filed against the Premises, then within twenty (20) days following such filing or before any governmental authority commences proceedings to sell the Premises pursuant to the lien, whichever occurs first, Lessee shall either: (a) pay the claim and remove the lien from the Premises; or (b) furnish either (1) a bond or cash deposit reasonably satisfactory to City in an amount not less than the claim from which the lien arises, or (2) other security satisfactory to City in an amount not less than that which is sufficient to discharge the claim from which the lien arises. At the end of this Lease, Lessee shall surrender the Premises to City free of any and all Hazardous Materials and in compliance with all Hazardous Materials' Laws affecting the Premises. (j) City represents and warrants that it has conducted a reasonable investigation, and that no Hazardous Materials are present on Premises at the commencement of the Term.

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12.4 Indemnification by Lessee. Lessee (and, if applicable, each of its general partners) and its successors, assigns, and guarantors, if any, jointly and severally agree to protect, indemnify, defend (with counsel retained and selected by Lessee, with the consent of City, which consent shall not be unreasonably withheld), reimburse and hold City and its officers, employees and agents harmless from any claims, judgments, damages, penalties, fines, costs or expenses (known or unknown, contingent or otherwise), liabilities (including sums paid in settlement of claims), personal injury (including wrongful death), property damage (real or personal) or loss, including attorneys' fees, consultants' fees, and experts' fees (consultants and experts to be selected by Lessee with consent of City, which consent shall not be unreasonably withheld) which arise during or after the Term from or in connection with the presence or suspected presence of Hazardous Materials, including the soil, ground water or soil vapor on or under the Premises, which are deposited by or released solely by Lessee during the Term of this Lease. Lessee’s obligation to defend and indemnify City as described herein shall be contingent upon (1) City providing Lessee written notice of any claims or potential claims within ten (10) business days’ of becoming aware of such claims or potential claims; and (2) that such claims or potential claims do not arise, in whole or in part, as a result of City’s acts or omissions. Lessee shall have the right to control the defense and settlement of any claims or potential claims under this Section, and City shall have the right to participate in any such defense. Without limiting the generality of the foregoing, the indemnification provided by this section shall specifically cover costs incurred in connection with investigation of site conditions or any cleanup, remedial, removal or restoration work required by any Hazardous Materials Laws because of the presence of Hazardous Materials in the soil, ground water or soil vapor on the Premises, and the release or discharge of Hazardous Materials by Lessee during the course of Lessee's alteration or improvement of the Premises.

12.5 Remedies Cumulative; Survival. The provisions of this Article shall be in addition to any and all common law obligations and liabilities Lessee may have to City, and any remedies and the environmental indemnities provided for herein shall survive the expiration or termination of this Lease and/or any transfer of all or any portion of the Premises, or of any interest in this Lease, and shall be governed by the laws of the State of California.

12.6 Inspection. City and City's agents, servants, and employees including, without limitation, legal counsel and environmental consultants and engineers retained by City, may (but without the obligation or duty so to do), at any time and from time to time, on not less than five (5) business days' notice to Lessee (except in the event of an emergency in which case no notice shall be required), inspect the Premises to determine whether Lessee is complying with Lessee's obligations set forth in this Article, and to perform environmental inspections and samplings, during regular business hours (except in the event of an emergency) or during such other hours as City and Lessee may agree. If Lessee is not in compliance, City shall have the right, in addition to City's other remedies available at law and in equity, to enter upon the Premises immediately and take such action as City in its sole judgment deems appropriate to remediate any actual or threatened contamination caused by Lessee's failure to comply. City will use reasonable efforts to minimize interference with Lessee's use of Premises but shall not be liable for any interference caused by City's entry and remediation efforts. Upon completion of any sampling or testing City will (at Lessee's expense if City's actions are a result of Lessee's default under this section) restore the affected area of the Premises from any damage caused by City's sampling and testing.

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ARTICLE 13

ASSIGNMENT AND SUBLETTING
Lessee shall not voluntarily or involuntarily assign, Lease, mortgage, encumber, or otherwise transfer (collectively, a "Transfer") all or any portion of the Premises or its interest in this Lease without City's prior written consent. City may reasonably withhold its consent to any Transfer. Any attempted Transfer without City's consent shall be void and shall constitute a material breach of this Lease. As used herein, the term "Transfer" shall include an arrangement (including without limitation management agreements, concessions, and licenses) that allows the use and occupancy of all or part of the Premises by anyone other than Lessee.

ARTICLE 14

CITY'S RIGHT OF ACCESS
City, its agents, employees, and contractors may enter the Premises at any time in response to an emergency, and at reasonable hours to (a) inspect the Premises, (b) exhibit the Premises to prospective purchasers or Lessees, (c) determine whether Lessee is complying with its obligations in this Lease (including its obligations with respect to compliance with Hazardous Materials Laws), (d) supply any service that this Lease requires City to provide, (e) post notices of nonresponsibility or similar notices, (f) make repairs that this Lease requires or permits City to make, or make repairs to any adjoining space or utility services, or make repairs, alterations, or improvements to any other portion of the Premises; provided, however, that all work will be done as promptly as reasonably possible and so as to cause as little interference to Lessee as reasonably possible, or (g) for any other reason permitted by this Lease.

Lessee waives any claim of injury or inconvenience to Lessee's business, interference with Lessee's business, loss of occupancy or quiet enjoyment of the Premises, or any other loss occasioned by such entry. If necessary, Lessee shall provide City with keys to unlock all of the doors in the Premises (excluding Lessee's vaults, safes, and similar areas designated in writing by Lessee in advance). City will have the right to use any means that City may deem proper to open doors in the Premises and to the Premises in an emergency. No entry to the Premises by City by any means will be a forcible or unlawful entry into the Premises or a detainer of the Premises or an eviction, actual or constructive, of Lessee from the Premises, or any part of the Premises, nor shall the entry entitle Lessee to damages or an abatement of rent or other charges that this Lease requires Lessee to pay.

ARTICLE 15

QUIET ENJOYMENT
If Lessee is not in breach under the covenants made in this Lease, City covenants that Lessee shall have peaceful and quiet enjoyment of the Premises without hindrance on the part of City. City will defend Lessee in the peaceful and quiet enjoyment of the Premises against claims of all persons claiming through or under the City.

ARTICLE 16

NOTICES

16.1 Notices. Whenever in this Lease it shall be required or permitted that notice or demand be given or served by either party to this Lease to or on the other, such notice or demand

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shall be in writing, mailed or delivered to the other party at the following addresses:

To City:

City Manager
City of Scotts Valley
1 Civic Center Drive
Scotts Valley, CA 95066
(831) 440-5600

To Lessee:

County of Santa Cruz- Real Property Section
701 Ocean Street, Room 410
Santa Cruz, California 95060
(831) 454-2160
Mailed notices shall be sent by United States Postal Service, certified or registered mail, postage prepaid and shall be deemed to have been given, delivered and received three (3) business days after the date such notice or other communication is posted by the United States Postal Service. All other such notices or other communications shall be deemed given, delivered and received upon actual receipt. Either party may, by written notice delivered pursuant to this provision, at any time designate a different address to which notices shall be sent.

16.2 Default Notices. Notwithstanding anything to the contrary contained within this Article, any notices City is required or authorized to deliver to Lessee in order to advise Lessee of alleged violations of Lessee's covenants under this Lease must be in writing but shall be deemed to have been duly given or served upon Lessee by City attempting to deliver at the Premises during normal business hours a copy of such notice to Lessee or its managing employee and by City mailing a copy of such notice to Lessee in the manner specified in the preceding Section.

ARTICLE 17

GENERAL PROVISIONS

17.1 Authority. Lessee represents and warrants that it has full power and authority to execute and fully perform its obligations under this Lease pursuant to its governing instruments, without the need for any further action, and that the person(s) executing this Lease on behalf of Lessee are the duly designated agents of Lessee and are authorized to do so.

17.2 Brokers. Lessee warrants that it has not been represented by any real estate broker or agent in connection with the negotiation and/or execution of this Lease. In the event any broker makes claim for monies owed, Lessee shall indemnify, defend and hold City harmless therefrom.

17.3 Captions. The captions, headings and index appearing in this Lease are inserted for convenience only and in no way define, limit, construe, or describe the scope or intent of the provisions of this Lease.

17.4 City Approval. Except where stated herein to the contrary, the phrases "City's approval," and "City's written approval" or such similar phrases shall mean approval of City

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Manager or City’s Manager’s representative.

17.5 Cumulative Remedies. In the event of a default under this Lease, each Party's remedies shall be limited to those remedies set forth in this Lease. Any such remedies are cumulative and not exclusive of any other remedies under this Lease to which the non-defaulting Party may be entitled.

17.6 Entire Agreement. This Lease, together with all addenda, exhibits and riders attached hereto, constitutes the entire agreement between the Parties with respect to the subject matter hereof, and all prior or contemporaneous agreements, understandings and representations, oral or written, are superseded.

17.7 Estoppel Certificate. Lessee shall at any time during the term of this Lease, within five (5) business days of written notice from City, execute and deliver to City a statement in writing certifying that this Lease is unmodified and in full force and effect or, if modified, stating the nature of such modification. Lessee's statement shall include other details requested by City, such as the date on which rent and other charges are paid, the current ownership and name of Lessee, Lessee's knowledge concerning any outstanding defaults with respect to City's obligations under this Lease and the nature of any such defaults. Any such statement may be relied upon conclusively by any prospective purchaser or encumbrancer of the Premises. Lessee's failure to deliver such statements within such time shall be conclusively deemed to mean that this Lease is in full force and effect, except to the extent any modification has been represented by City, that there are no uncured defaults in the City's performance, and that not more than one month's rent has been paid in advance.

17.8 Exhibits. All exhibits referred to herein are attached hereto and incorporated by reference.

17.9 Force Majeure. In the event either party is prevented or delayed from performing any act or discharging any obligation hereunder, except for the payment of rent by Lessee, because of any and all causes beyond either party's reasonable control, including unusual delays in deliveries, abnormal adverse weather conditions, unavoidable casualties, strikes, labor disputes, inability to obtain labor, materials or equipment, acts of God, governmental restrictions, regulations or controls, any hostile government actions, civil commotion and fire or other casualty, legal actions attacking the validity of this Lease or the City's occupancy of the Premises, or any other casualties beyond the reasonable control of either party except casualties resulting from Lessee's , or its permitted sublessees or assigns, negligent operation or maintenance of the Premises ("Force Majeure"), performance of such act shall be excused for the period of such delay, and the period for performance of such act shall be extended for a period equivalent to the period of such delay. Force Majeure shall not include any bankruptcy, insolvency, or other financial inability on the part of either party hereto.

17.10 Governing Law. This Lease shall be governed, construed and enforced in accordance with the laws of the State of California.

17.11 Interpretation. The language of this Lease shall be construed simply according to its plain meaning and shall not be construed for or against either party.

17.12 Joint and Several Liability. If more than one person or entity executes this Lease

16 251 KINGS VILLAGE RD #380
as Lessee, each of them is jointly and severally liable for all of the obligations of Lessee hereunder.

17.13 Lease Administration. This Lease shall be administered on behalf of the City of Scotts Valley, by its Public Works Director, or by such person's duly-authorized designee (referred to collectively herein as "City's Lease Administrator"), and on behalf of Lessee by its Chief Real Property Agent, County of Santa Cruz, 701 Ocean Street, Room 410, Santa Cruz, California 95060, 831-454-2160, or by such other person as may be designated in writing by Lessee (referred to collectively herein as "Lessee's Lease Administrator").

17.14 Lessee's Lease Administration. Lessee confirms that Lessee's Lease Administrator has been given full operational responsibility for compliance with the terms of this Lease. Lessee shall provide City with a written schedule of its normal hours of business operation on the Premises, and Lessee's Lease Administrator or a representative designated thereby shall be (i) available to City on a twenty-four (24) hour a day, seven (7) days a week, basis, and (ii) present on the Premises during Lessee's normal business hours, to resolve problems or answer question pertaining to this Lease and Lessee's operations on the Premises.

17.15 Liquidated Damages. Any payments by Lessee to City under this Lease described as liquidated damages represent the parties' reasonable estimate of City's actual damages under the described circumstances, such actual damages being uncertain and difficult to ascertain in light of the impossibility of foreseeing the state of the leasing market at the time of the various deadlines set forth herein. City may, at its election, take any of the liquidated damages assessed in any portion of this Lease as direct monetary payments from Lessee and/or as an increase of rent due from Lessee under this Lease.

17.16 Modification. The provisions of this Lease may not be modified, except by a written instrument signed by both parties.

17.17 Partial Invalidity. If any provision of this Lease is determined by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Lease shall not be affected thereby. Each provision shall be valid and enforceable to the fullest extent permitted by law.

17.18 Payments. Except as may otherwise be expressly stated, each payment required to be made by Lessee shall be in addition to, and not a substitute for, other payments to be made by Lessee.

17.19 Successors & Assigns. This Lease shall be binding on and inure to the benefit of the parties and their successors and assigns, except as may otherwise be provided herein.

17.20 Time of Essence. Time is of the essence of each and every provision of this Lease.

17.21 Waiver. No provision of this Lease or the breach thereof shall be deemed waived, except by written consent of the party against whom the waiver is claimed. The waiver by City of any breach of any term, covenant or condition contained in this Lease shall not be deemed to be a waiver of such term, covenant or condition of any subsequent breach thereof, or of any other term, covenant or condition contained in this Lease. City's subsequent acceptance of partial rent or performance by Lessee shall not be deemed to be an accord and satisfaction or a waiver of any

17 251 KINGS VILLAGE RD #380
preceding breach by Lessee of any term, covenant or condition of this Lease or of any right of City to a forfeiture of the Lease by reason of such breach, regardless of City's knowledge of such preceding breach at the time of City's acceptance. The failure on the part of City to require exact or full and complete compliance with any of the covenants, conditions of agreements of this Lease shall not be construed as in any manner changing or waiving the terms of this Lease or as estopping City from enforcing in full the provisions hereof. No custom or practice which may arise between the parties hereto in the course of administering this Lease shall be construed to waive, estop or in any way lessen City's right to insist upon Lessee's full performance of, or compliance with, any term, covenant or condition of this Lease or to inhibit or prevent City's exercise of its rights with respect to any default, dereliction or breach of this Lease by Lessee.

SIGNATURE PAGE TO FOLLOW

18 251 KINGS VILLAGE RD #380

CITY OF SCOTTS VALLEY COUNTY OF SANTA CRUZ
Mali LaGoe, City Manager
_________________________________
Date
Matt Machado, Deputy CAO, Director of
Community Development and Infrastructure
___________________________________
Date
APPROVED AS TO FORM:
_______________________________
City Attorney Date
APPROVED AS TO FORM:
___________________________________
Office of County Counsel Date
APPROVED AS TO INSURANCE:
___________________________________
Risk Management Date
RECOMMENDED FOR APPROVAL:
___________________________________
Real Property Date

SANTA CRUZ PUBLIC LIBRARIES
___________________________________

DIRECTOR OF LIBRARIES DATE
___________________________________

LIBRARY GENERAL COUNSEL DATE

A-1
EXHIBIT “A”
Premises

EXHIBIT “B”

INSURANCE REQUIREMENTS

INSURANCE REQUIREMENTS
Without limiting Lessee’s indemnification obligations to City under this Lease, Lessee shall provide and maintain for the duration of this Lease insurance against claims for injuries to persons or damages to property which may arise from or in connection with the Lessee’s operation and use of the Leased Premises. The cost of such insurance shall be borne by the Lessee.

1. Minimum Scope of Insurance
Coverage shall be at least as broad as:

A. Commercial General Liability, Occurrence form, Insurance Services Office Form CG0001, for the General Liability Insurance Premises described in Exhibit “D”.

B. Automobile Liability covering all owned, non-owned and hired auto, Insurance Services Office form CA0001.

C. Workers Compensation, as required by State of California and Employer’s Liability Insurance.

D. Property Insurance: Lessee shall maintain property insurance coverage for the Property Insurance Premises described in Exhibit “C” at full replacement value, including improvements and betterments. Lessee shall also provide property insurance for all City-owned personal property contained within or on the Property Insurance Premises. The policy must be written on an “all risks” basis, including coverage for earthquake. The contract shall insure for not less than ninety (90) percent of the actual cash value of the personal property, and Lessee shall name City as an additional insured and loss payee. Lessor shall be required to pay 41% of the premium for such insurance obtained by Lessee. Such payment shall be made by Lessor within 30 days of invoice by the Lessee.

2. Minimum Limits of Insurance
Lessee shall maintain limits no less than:

A. Commercial General Liability Insurance, including the General Liability Insurance Premises described in Exhibit “D”, Operations, Products and Completed Operations, Contractual Liability and Independent Contractors: $1,000,000 per occurrence for bodily injury, personal injury and property damage. The General Aggregate limit shall be $2,000,000 and shall be a Per Location Aggregate. Fire Damage Limit (Any One Fire) $300,000 and Medical Expense Limit (Any One

Person) $5,000.

B. Automobile Liability: $1,000,000 each accident for bodily injury and property damage. Coverage will include contractual liability.

C. Employers Liability: $1,000,000 each accident for bodily injury or disease.

Coverage shall include a waiver of subrogation endorsement in favor of City of Scotts Valley.

D. Property: Full replacement cost with no coinsurance penalty provision.

3. Deductibles and Self-Insured Retentions
Any liability deductible or self-insured retention must be declared to and approved by the City’s Risk Manager.

4. Other Insurance Provisions
The general liability and automobile liability policies are to contain, or be endorsed to contain the following provisions:

A. Additional Insured Endorsement
Any general liability policy provided by Lessee shall contain an additional insured endorsement applying coverage to the City of Scotts Valley, the members of the Board of Supervisors of the County and the officers, agents, employees and volunteers of the City, individually and collectively.

B. Primary Insurance Endorsement
For any claims related to this Lease, the Lessee’s insurance coverage shall be primary insurance as respects the City, the members of the Board of Supervisors of the County and the officers, agents, employees and volunteers of the City, individually and collectively.

Any insurance or self-insurance maintained by the City, the members of the Board of Supervisors of the County, its officers, officials, employees, or volunteers shall be excess of the Lessee’s insurance and shall not contribute with it.

C. Notice of Cancellation
Each required insurance policy shall be endorsed to state that coverage shall not be canceled by either party, except after thirty (30) days’ prior written notice by certified mail, return receipt requested, has been given to the City at the address shown in section of Lease entitled “Notices”.

GENERAL PROVISIONS

5. Qualifying Insurers
All required policies of insurance shall be issued by companies which have been approved to do business in the State of California by the State Department of Insurance, and which hold a current policy holder’s alphabetic and financial size category rating of not less than A- VII according to the current Best’s Key Rating guide, or a company of equal financial stability that is approved in writing by City’s Risk Manager.

6. Proof of Insurance
Lessee shall, as soon as practicable following the placement of insurance required hereunder, but in no event later than the effective date of the Contract, deliver to City certified copies of the actual insurance policies specified herein, together with appropriate separate endorsements thereto, evidencing that Lessee has obtained such coverage for the period of the Contract. Thereafter, copies of renewal policies, and appropriate separate endorsements thereof, shall be delivered to City within thirty (30) days prior to the expiration of the term of any policy required herein.

7. Failure to Obtain or Maintain Insurance; City’s Remedies Lessee’s failure to provide insurance specified or failure to furnish certificates of insurance, amendatory endorsements and certified copies of policies, or failure to make premium payments required by such insurance, shall constitute a material breach of the Lease, and City may, at its option, terminate the Lease for any such default by Lessee.

8. No Limitations of Obligations
The foregoing insurance requirements as to the types and limits of insurance coverage to be maintained by Lessee, and any approval of said insurance by the City are not intended to and shall not in any manner limit or qualify the liabilities and obligations otherwise assumed by Lessee pursuant to the Lease, including, but not limited to, the provisions concerning indemnification.

9. Review of Coverage
City retains the right at any time to review the coverage, form and amount of insurance required herein and may require Lessee to obtain insurance reasonably sufficient in coverage, form and amount to provide adequate protection against the kind and extent of risk which exists at the time a change in insurance is required.

10. Self-Insurance
Lessee may, with the prior written consent of City’s Risk Manager, fulfill some or all of the insurance requirements contained in this Lease under a plan of self-insurance. Lessee shall only be permitted to utilize such self-insurance if in the opinion of City’s Risk

Manager, Lessee’s (i) net worth, and (ii) reserves for payment of claims of liability against Lessee, are sufficient to adequately compensate for the lack of other insurance coverage required by this Lease. Lessee’s utilization of self-insurance shall not in any way limit liabilities assumed by Lessee under this Lease.

11. Lessees’ Insurance
Lessee shall require any sub-Lessee, of all or any portion of the Premises to provide the insurance coverage described herein prior to occupancy of the Premises.

12. Waiver of Subrogation
Lessee and City waive all rights to recover against each other or against any other tenant or occupant of the building, or against the officers, directors, shareholders, partners, employees, agents or invitees of each other or of any other occupant or tenant of the building, from any Claims (as defined in the Article entitled “Indemnity”) against either of them and from any damages to the fixtures, personal property, Lessee’s improvements, and alterations of either City or Lessee in or on the Premises and the Property, to the extent that the proceeds received from any insurance carried by either City or Lessee, other than proceeds from any program of self-insurance, covers any such Claim or damage. Included in any policy or policies of insurance provided by Lessee shall be a standard waiver of rights of subrogation against City by the insurance company issuing said policy or policies.

EXHIBIT “C”
Property Insurance Premises

*Hatched area excluded from insurance*
EXHIBIT “D”
General Liability Insurance Premises

251 KINGS VILLAGE RD #400
251 KINGS VILLAGE RD #400
SCOTTS VALLEY LIBRARY – 251 KINGS VILLAGE RD
APN 022-212-17

SUBLESSOR:COUNTY OF SANTA CRUZ, a political subdivision of the State of California
SUBLESSEE: SANTA CRUZ PUBLIC LIBRARIES

1 251 KINGS VILLAGE RD #400

SUBSUBLEASE AGREEMENT

TABLE OF CONTENTS
ARTICLE NO. PAGE NO.

SUBSUBLEASE AGREEMENT................................................................................................................................1 ARTICLE 1 PREMISES ......................................................................................................................................3

1.1 PREMISES………………………………………………………………………………………………..…..3
ARTICLE 2 TERM ..............................................................................................................................................3

2.1 TERM...........................................................................................................................................................3

2.2 EXTENSION..................................................................................................................................................3

2.3 TERMINATION……………………………………………………………………………………………...3
ARTICLE 3 RENT ...............................................................................................................................................3

3.1 BASE ANNUAL RENT…..…………………………………………………………………………………..3

3.2 DELIVERY OF RENT PAYMENTS...................................................................................................................3

3.3 FAILURE TO PAY BASE MONTHLY RENT OR ADDITIONAL RENT; LATE CHARGE ........................................4

3.4 CAPITAL TRUST...........................................................................................................................................4 ARTICLE 4 POSSESSION AND USE................................................................................................................4

4.1 COMPLIANCE WITH MASTER LEASE ............................................................................................................4

4.2 PERMITTED USES.........................................................................................................................................4

4.3 HOURS OF OPERATION ................................................................................................................................4

4.4 DUTIES AND PROHIBITED CONDUCT............................................................................................................4

4.5 COMPLIANCE WITH STORMWATER LAWS ...................................................................................................5 ARTICLE 5 SUBORDINATION CLAUSE……………………………………………………………………5

5.1 SUBORDINATION…………………………………………………………………………………….……. 5 ARTICLE 6 UTILITIES ......................................................................................................................................6

6.1 UTILITY SERVICES.......................................................................................................................................6

6.2 ENERGY CONSERVATION BY SUBLESSEE.....................................................................................................6

6.3 ENERGY CONSERVATION BY COUNTY.........................................................................................................6 ARTICLE 7 MECHANICS' LIENS....................................................................................................................6

7.1 MECHANICS LIENS………………………………………………………………………………………... 6 ARTICLE 8 SECURITY......................................................................................................................................6

8.1 SECURITY…………………………………………………………………………………………………..6
ARTICLE 9 TAXES, ASSESSMENTS AND FEES ..........................................................................................6

9.1 RESPONSIBILITY FOR PAYMENT OF TAXES AND ASSESSMENTS ...................................................................6

9.2 DEFINITION OF TAXES .................................................................................................................................7

9.3 CREATION OF POSSESSORY INTEREST .........................................................................................................7 ARTICLE 10 REPAIRS; MAINTENANCE ........................................................................................................7

10.1 ACCEPTANCE OF PREMISES .........................................................................................................................7

10.2 SUBLESSEE'S REPAIR AND MAINTENANCE OBLIGATIONS............................................................................7

10.3 MINOR MAINTENANCE AND REPAIRS..........................................................................................................7

10.4 MAJOR MAINTENANCE AND REPAIRS..........................................................................................................8

10.5 EMERGENCY REPAIRS OF CRITICAL SYSTEMS………..……………………………………………………8

10.6 SUBLESSEE'S FAILURE TO MAINTAIN ..........................................................................................................8

10.7 RIGHT TO ENTER .........................................................................................................................................9

10.8 COUNTY NOT OBLIGATED TO REPAIR OR MAINTAIN; SUBLESSEE'S WAIVER OF CALIFORNIA CIVIL CODE SECTION 1942………………………………………………………………………………………………...……..9

2 251 KINGS VILLAGE RD #400
ARTICLE 11 INDEMNITY AND INSURANCE.................................................................................................9

11.1 SUBLESSEE’S INDEMNITY………………………………………………………………………………….9

11.2 COUNTY’S INDEMNITY ................................................................................................................................9 ARTICLE 12 HAZARDOUS MATERIALS......................................................................................................10

12.1 HAZARDOUS MATERIALS LAWS-DEFINITION............................................................................................10

12.2 HAZARDOUS MATERIALS - DEFINITION.....................................................................................................10

12.3 SUBLESSEE'S REPRESENTATIONS AND WARRANTIES.................................................................................10

12.4 INDEMNIFICATION BY SUBLESSEE .............................................................................................................12

12.5 REMEDIES CUMULATIVE; SURVIVAL.........................................................................................................12

12.6 INSPECTION ...............................................................................................................................................12 ARTICLE 13 ASSIGNMENT AND SUBLETTING .........................................................................................12 ARTICLE 14 COUNTY'S RIGHT OF ACCESS...............................................................................................13 ARTICLE 15 QUIET ENJOYMENT .................................................................................................................13 ARTICLE 16 NOTICES.......................................................................................................................................13

16.1 NOTICES....................................................................................................................................................13

16.2 DEFAULT NOTICES ....................................................................................................................................14 ARTICLE 17 WAIVER OF RELOCATION ASSISTANCE BENEFITS ......................................................14

17.1 RELOCATION ASSISTANCE BENEFITS ........................................................................................................14

17.2 SUBLESSEE'S WAIVER AND RESUBLEASE OF RELOCATION BENEFITS .......................................................14 ARTICLE 18 GENERAL PROVISIONS ..........................................................................................................15

18.1 AUTHORITY...............................................................................................................................................15

18.2 BROKERS...................................................................................................................................................15

18.3 CAPTIONS..................................................................................................................................................15

18.4 COUNTY APPROVAL ..................................................................................................................................15

18.5 CUMULATIVE REMEDIES ...........................................................................................................................15

18.6 ENTIRE AGREEMENT .................................................................................................................................15

18.7 ESTOPPEL CERTIFICATE ............................................................................................................................15

18.8 EXHIBITS ...................................................................................................................................................16

18.9 FORCE MAJEURE .......................................................................................................................................16

18.10 GOVERNING LAW......................................................................................................................................16

18.11 INTERPRETATION.......................................................................................................................................16

18.12 JOINT AND SEVERAL LIABILITY.................................................................................................................16

18.13 SUBLEASE ADMINISTRATION.....................................................................................................................16

18.14 SUBLESSEE'S SUBLEASE ADMINISTRATION ...............................................................................................16

18.15 LIQUIDATED DAMAGES.............................................................................................................................16

18.16 MODIFICATION..........................................................................................................................................17

18.17 PARTIAL INVALIDITY ................................................................................................................................17

18.18 PAYMENTS ................................................................................................................................................17

18.19 SUCCESSORS & ASSIGNS ...........................................................................................................................17

18.20 TIME OF ESSENCE......................................................................................................................................17

18.21 WAIVER ....................................................................................................................................................17

SIGNATURE
PAGE………………………………………………………………………………………………...18
EXHIBIT A - MASTER LEASE………………………………………………………………………………..A1 EXHIBIT B - MAP OF THE PREMISES……………………………………………………………………….B1 EXHIBIT C - INSURANCE REQUIREMENTS……………………………………………………………….C1 EXHIBIT D - GENERAL LIABILITY INSURANCE PREMISES……………………………………………D1

3 251 KINGS VILLAGE RD #400

SUBSUBLEASE AGREEMENT
This sublease is entered into this ____ day of _____________, 20__, by and between the County of Santa Cruz as "County or Sublessor" and Santa Cruz Public Libraries as "Sublessee". The County and Sublessee are sometimes referred to herein individually as “Party” or collectively as “Parties.” A copy of the master lease is attached hereto as Exhibit “A” and is incorporated herein.

WHEREAS, the Lessor, City of Scotts Valley (“City”), in executing this Sublease herein approves of the Sublessee’s occupancy of the Premises and the terms and conditions set forth herein.

This Sublease is entered into upon the following facts, understandings and intentions of the County and Sublessee.

ARTICLE 1

PREMISES

1.1 Premises. The property consists of that certain real property commonly known as 251 Kings Village Rd, Scotts Valley, CA 95066 on assessor’s parcel number 022-212-17and referred to herein as “Property”. The Property is currently improved with a 22,230 square foot building, a parking lot and rear outdoor patio. The premises to be occupied under this Sublease is 13,150 square feet of the building, the sidewalk adjacent to the building and the entire outdoor patio of approximately 3,500 square feet, more particularly described in Exhibit “B” attached hereto and made a part hereof and referred to herein as “Premises”. The remainder of the building is specifically excluded from the Premises and is not included in this Lease.

ARTICLE 2
TERM

2.1 Term. The term of this Sublease shall commence upon execution by all Parties hereto, and shall expire when that specific agreement entitled Fourth Amendment to the Joint Powers Agreement Between the City of Santa Cruz and the County of Santa Cruz and the Cities of Capitola and Scotts Valley relating to Library Services (“JPA Agreement”) naturally terminates at 11:59 PM on December 31, 2025, or at the expiration of the term established by future amendment(s) of the JPA Agreement, whichever is later, referred to herein as “Term”.

2.2 Extension. The Term of this Sublease may only be extended by written amendment of this Sublease executed by all Parties hereto.

2.3 Termination. The County may terminate this Lease at any time, for any reason, by giving one hundred and eighty (180) days prior written notice to the other Party. This Sublease shall terminate by operation of law if the Master Lease included herein expires or is terminated.

ARTICLE 3
RENT

3.1 Base Annual Rent. Sublessee shall pay as rent for the use and occupancy of the Premises an annual fee of $1.00. Rent shall remain the same for the entire term of this Sublease unless adjusted by mutual written agreement.

4 251 KINGS VILLAGE RD #400

3.2 Delivery of Rent Payments. All rent due under this Sublease shall be made payable to the County of Santa Cruz, and shall be considered paid when delivered to:

County of Santa Cruz- Real Property Section
701 Ocean Street, Room 410
Santa Cruz, California 95060
(831) 454-2160
County may, at any time, by written notice to Sublessee, designate a different address to which Sublessee shall deliver the rent payments. County may, but is not obligated to, send rent invoices to Sublessee.

3.3 Failure to Pay Base Rent or Additional Rent; Late Charge. If Sublessee fails to pay rent due hereunder at the time it is due and payable, such unpaid amounts shall bear interest at the rate of ten percent (10%) per year from the date due to the date of payment, computed on the basis of monthly compounding with actual days elapsed compared to a 365-day year. However, County may in its sole discretion waive any delinquency payment or late charge upon written application of Sublessee.

3.4 Capital Trust. County shall establish a trust account (“Capital Trust”) to hold funds for the benefit of major maintenance and property management as determined by a facility assessment. Funds will be deposited in the Capital Trust from the County Library Fund once the facility assessment and major maintenance budget has been approved by the Board of Supervisors.

The Capital Trust shall be managed solely by County. Any interest earned on the Capital Trust shall remain or be redeposited in the Capital Trust for these purposes. This account shall remain the sole property of County and the funds held therein shall be restricted to providing for the maintenance of the Premises.

ARTICLE 4

POSSESSION AND USE

4.1 Compliance with Master Lease. Sublessee agrees to comply with all terms of and conditions in the Master Lease.

4.2 Permitted Uses. Sublessee shall use the Premises solely for public library services. No one other than Sublessee, its agents, volunteers and employees, or any Sublessee approved by County as provided in Article 13 - "Assignment and Subletting" below, is permitted to use the Premises for the purposes described herein, and Sublessee shall be fully responsible for the activities of its agents, volunteers and employees and Sublessees, if any, on the Premises.

4.3 Hours of Operation. Sublessee will provide staffing levels and service hours for the Library that are not less than the comparable staff levels and service hours provided at the Aptos County Branch Library and Live Oak Branch Library, whichever is greater, as said staffing levels at the Aptos County Branch Library and Live Oak Branch Library may change from time to time.

4.4 Duties and Prohibited Conduct. Where Sublessee is reasonably in doubt as to the propriety of any particular use, Sublessee may request the written determination of County that

5 251 KINGS VILLAGE RD #400
such use is or is not permitted, and Sublessee will not be in breach or default under this Sublease if Sublessee abides by such determination. Notwithstanding the foregoing, however, Sublessee shall not use nor permit the use of the Premises in any manner that will tend to create waste or a nuisance. Sublessee shall, at Sublessee's expense, comply promptly with all applicable statutes, laws, ordinances, rules, regulations, orders, covenants and restrictions of record, and requirements in effect during the term, regulating the use by Sublessee of the Premises. Sublessee shall not use, or permit any person or persons to use, the Premises for the sale or display of any goods and/or services, which, in the sole discretion of County, are inconsistent with the permitted uses of the Premises pursuant to this Sublease. The sale of books, educational services, fundraising and other goods/services incidental to library purposes are deemed consistent with the permitted use of the Premises. Sublessee shall keep the Premises, and every part thereof, in a decent, safe and sanitary condition, free from any objectionable noises or odors, except as may be typically present for the permitted uses specified above.

4.5 Compliance with Stormwater Laws. Sublessee's use of the Premises is subject to federal, state and local laws regarding the discharge into the stormwater conveyance system of pollutants. Compliance with these laws may require Sublessee to develop, install, implement and maintain pollution prevention measures, source control measures and Best Management Practices ("BMPs"). Sublessee further agrees to develop, install, implement and/or any BMPs or similar pollution control devices required by federal, state and/or local law and any implementing regulations. Any costs associated with such installations will be handled consistent with other maintenance and repair costs as outlined in Article 10.

Sublessee understands and acknowledges that the storm water and non-storm water requirements applicable to Sublessee's use of the Premises may be changed from time to time by federal, state and/or local authorities, and that additional requirements may become applicable based on changes in Sublessee's activities or development or redevelopment by Sublessee or County. To the extent there is a conflict between any federal, state, or local law, Sublessee shall comply with the more restrictive provision. If County receives any fine or fines from any regulatory agency as a result of Sublessee's failure to comply with applicable storm water laws as set forth in this Article, Sublessee shall reimburse County for the entire fine amount.

ARTICLE 5

SUBORDINATION CLAUSE

5.1 Subordination. The Parties acknowledge that pursuant to the terms of the Master Lease attached hereto as Exhibit “A”, the City may enter into one or more lease/leaseback financing arrangements consisting generally of a site lease, lease agreement, assignment agreement and related agreements (collectively, the “Financing Leases”) with a financing authority or another public agency in order to assist the City in connection with financing and refinancing certain capital improvements of the City.

Under any such Financing Leases, the City may lease and lease back certain real property and improvements that may include the Premises subject to one or more Library Leases.

In order to facilitate the execution and delivery of any Financing Leases, the County and City desire that this Sublease and Sublessee's right, title and interest in the Premises be subordinate to the rights, titles, and interests of the parties to the Financing Leases.

6 251 KINGS VILLAGE RD #400
Therefore, it is agreed that this Sublease and all of Sublessee's right, title, and interest in and to the Premises thereunder shall be, and the same are expressly made subject to, subordinate and inferior to any Financing Leases, and to all extensions, renewals, modifications, consolidations and replacements of the Financing Leases.

ARTICLE 6

UTILITIES

6.1 Utility Services. Sublessee shall make all arrangements for and pay for all separately charged utilities and municipal services supplied to the Premises or used by Sublessee, including but not limited to water, gas, electricity, garbage collection, and telephone, and for all connection charges. County shall have no responsibility either to provide or pay for such services.

Notwithstanding the above, the City shall assume responsibility of jointly metered utilities including power for the parking lot lighting, sewer, water and landscape services and bill Sublessee its pro rata share for such utilities. If it is determined that the pro rata share of utilities is inequitable based on usage, Parties agree to negotiate in good faith to determine the appropriate share of utilities cost.

6.2 Energy Conservation by Sublessee. Sublessee shall endeavor to promote energy conservation measures in the operation of all activities at the Sublease Premises. Sublessee shall cooperate with the County in all forms of energy conservation including energy-efficient lighting, heating and air-conditioning systems, and fixtures and equipment. Sublessee shall comply with all Federal, State and City laws, by-laws, regulations, etc., relating to the conservation of energy.

Sublessee shall comply with all reasonable requests and demands of the County pertaining to the installation and maintenance of energy conservation systems, fixtures, and equipment installed by the County.

6.3 Energy Conservation by County. County is required to comply with all laws and regulations requiring the installation of energy-efficient systems, fixtures, and equipment at County buildings and facilities. In accordance with all laws and regulations and this Sublease; Sublessee shall maintain or repair, or cause to maintain or repair, the building, and related systems in accordance with current energy conservation standards.

ARTICLE 7

MECHANICS' LIENS

7.1 Mechanics Liens. Sublessee shall pay, or cause to be paid, all costs for work done by it, or caused to be done by it, on the Premises, and for all materials furnished for or in connection with any such work. If any lien is filed against the Premises, Sublessee shall cause the lien to be discharged of record within ten (10) days after it is filed. Sublessee shall indemnify, defend and hold County harmless from any and all liability, loss, damage, costs, attorneys' fees and all other expenses on account of claims of lien of laborers or materialmen or others for work performed or materials or supplies furnished for Sublessee or persons claiming under Sublessee.

ARTICLE 8

SECURITY

8.1 Security. Sublessee shall be responsible for and shall provide for the security of the Premises, and County shall have no responsibility therefor.

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ARTICLE 9

TAXES, ASSESSMENTS AND FEES

9.1 Responsibility for Payment of Taxes and Assessments. County shall not be obligated to pay any taxes or assessments accruing against Sublessee on the Premises or any interest of Sublessee therein before, during or after the Term, or any extension thereof; all such payments shall be the sole responsibility of Sublessee. In addition, Sublessee shall be solely responsible for payment of any taxes or assessments levied upon any improvements, fixtures or personal property located on the Premises, to the extent that such taxes or assessments result from the business or other activities of Sublessee upon, or in connection with, the Premises.

9.2 Definition of Taxes. As used herein, the term "taxes" means all taxes, governmental bonds, special assessments, Mello-Roos assessments, charges, rent income or transfer taxes, license and transaction fees, including, but not limited to, (i) any state, local, federal, personal or corporate income tax, or any real or personal property tax, (ii) any estate inheritance taxes, (iii) any franchise, succession or transfer taxes, (iv) interest on taxes or penalties resulting from Sublessee's failure to pay taxes, (v) any increases in taxes attributable to the sale of Sublessee's Subleasehold interest in the Premises, or (vi) any taxes which are essentially payments to a governmental agency for the right to make improvements to the Premises.

9.3 Creation of Possessory Interest. Pursuant to the provisions of Revenue and Taxation Code Section 107.6, Sublessee is hereby advised that the terms of this Sublease may result in the creation of a possessory interest. If such a possessory interest is vested in Sublessee, Sublessee may be subjected to the payment of real property taxes levied on such interest.

Sublessee shall be solely responsible for the payment of any such real property taxes. Sublessee shall pay all such taxes when due, and shall not allow any such taxes, assessments or fees to become a lien against the Premises or any improvement thereon; provided, however, that nothing herein shall be deemed to prevent or prohibit Sublessee from contesting the validity of any such tax, assessment or fee in a manner authorized by law.

ARTICLE 10
REPAIRS; MAINTENANCE

10.1 Acceptance of Premises. Sublessee acknowledges that Sublessee has made a thorough inspection of the Premises prior to the commencement date of this Sublease, and that it accepts the Premises as of the commencement date in their condition at that time. Sublessee further acknowledges that County has made no oral or written representations or warranties to Sublessee regarding the condition of the Premises, and that Sublessee is relying solely on its inspection of the Premises with respect thereto. Sublessee agrees not to make changes to the built environment without obtaining the County’s prior written approval.

10.2 Sublessee's Repair and Maintenance Obligations. Sublessee shall at all times during the Term, repair and maintain the Premises in good and tenantable condition, and coordinate Minor Maintenance and repairs as delineated in this Article. Upon surrender of the Premises, Sublessee shall deliver the Premises to County in good order, condition and state of repair, but shall not be responsible for damages resulting from ordinary wear and tear. Sublessee shall provide for trash removal, at its expense, and shall maintain all trash receptacles and trash areas in a clean, orderly and first-class condition and empty all trash receptacles on the Premises daily. Sublessee shall be responsible for maintaining all lighting and planters on the Premises.

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County and Sublessee shall be responsible for the repair and maintenance of the HVAC system serving the Premises according to the minor and major maintenance limits set forth in Sections

10.3 and 10.6. Any proposed remodel of the Library by Sublessee, that involves reconstruction of structural building elements, relocation of interior walls, or removal of building finishes, must be approved in advance by the County.

10.3 Minor Maintenance and Repairs. Sublessee is responsible for, at its sole cost and expense and without cost to the County, performing all minor maintenance and repairs for the Premises. Minor maintenance and Repairs are defined as any and all maintenance or repairs, costing up to a maximum of $10,000 per item, and with an annual cap of $50,000, necessary to maintain the Premises in good and tenantable condition, and shall include but not be limited to:
custodial services and maintenance and/or repairs of grounds, landscaping including bio detention system cleaning and inspections, roof, fencing, heating, ventilation, air conditioning (HVAC), mechanical, security or information technology upgrades, electrical systems, pipes, conduits, equipment, components and facilities (whether or not within the Premises) that supply the Premises exclusively with utilities (except to the extent the appropriate utility company has assumed these duties), all fixtures and other equipment installed in the Premises, all exterior and interior glass installed in the Premises, all signs, lock and closing devices all interior window sashes, casements and frames, doors and door frames (except for the painting of the exterior surfaces thereof), floor coverings, and all such items of repair, maintenance, alteration, improvement or reconstruction as may be required at any time or from time to time by a governmental agency having jurisdiction thereof. Sublessee's obligations hereunder shall apply regardless of whether the repairs, restorations and replacements are ordinary or extraordinary, foreseeable or unforeseeable, capital or noncapital, or the fault or not the fault of Sublessee, its agents, employees, invitees, visitors or contractors. All replacements made by Sublessee in accordance with this Section shall be of like size, kind and quality to the items replaced and shall be subject to County's approval, which shall be timely and not unreasonably withheld. Sublessee shall utilize its own maintenance staff or outside contractors, however, Sublessee shall only use appropriately licensed staff or contractors for any item requiring a building permit. Any reoccurring expenses incurred for custodial, landscaping and bio detention, or other recurring maintenance operational activities are not eligible to be applied towards the $10,000 or $50,000 limits listed above.

10.4 Share of Common Area Operating Expenses. Minor maintenance and repairs in the common areas of the Property, shall be shared on a pro rata basis with City. City shall maintain in good working condition and repair the common areas of the Property, which include, but are not limited to, general maintenance and repair of foundations, roofs and skylights, structural components and exterior surfaces of exterior walls of the Building (exclusive of doors, door frame, door checks, windows, window frames and store fronts), parking lot and parking lot landscaping; provided, however, if any repairs or replacements are necessitated by the negligence, gross negligence or willful acts of Sublessee, its representatives, customers or by reason of Sublessee’s failure to observe or perform any provisions contained in this agreement or cause by alterations, additions or improvements made by Sublessee or its representatives, the cost of such repairs and replacements shall be the sole obligation of Sublessee. Upon performance of any such minor maintenance or repair, City shall bill Sublessee the pro rata share of the cost. Sublessee shall reimburse City within 60 days of receipt of receipt of such bill. Prior to initiating maintenance or repairs that affect the common areas of the Property, Sublessee shall seek approval from County in writing, which approval shall not be unreasonably withheld.

10.5 Sublessee’s Pro Rata Share. Sublessee's pro rata share of Common Area

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Operating Expenses shall be 59% based on the current square footage of the Building.

10.6 Major Maintenance and Repairs. County is responsible for, at its sole cost and expense and without cost to Sublessee, performing all major maintenance and repairs. Major maintenance and repairs are further defined as any and all maintenance or repairs, costing more than $10,000 per item, necessary to maintain the Premises in good and tenantable condition.

Examples include but are not limited to: painting of building exterior; repair and resurfacing of parking areas; structural repairs involving foundation, exterior walls and bearing walls; and major repair or replacement of failed roof, gutters, downspouts, HVAC system, unexposed plumbing and electrical, fire sprinkler system, fencing, and fire alarm system. The Major Maintenance shall be accomplished in a timely manner in conformance with all applicable laws, according to specifications established by the County.

For all Major Maintenance that cannot be completed by the County and upon approval from County, Sublessee shall contract for services, in concurrence with County purchasing policies and procedures, which services shall be reimbursed from the Capital Trust. All proposed work shall be approved by the County, such approval shall be timely and not unreasonably withheld.

10.7 Emergency Repairs of Critical Systems. If a problem develops with a critical building system that, if left unrepaired for any length of time, could reasonably impact the health or safety of the occupants or the continued occupancy of the Premises, Sublessee will immediately contact the County to report the problem. If the problem falls under Minor Maintenance or Repairs, Sublessee shall proceed under the guidelines of Article 10.3. If the problem falls under Major Maintenance, Sublessee and County shall proceed under the guidelines of Article 10.6.

If Sublessee is unable to quickly resolve the problem using Sublessee’s maintenance staff or outside contractors, Sublessee shall contact County who shall arrange for repairs to be completed by the County or assist Sublessee with identifying an outside contractor that can complete the work.

10.8 Sublessee's Failure to Maintain. If Sublessee refuses or neglects to repair, replace, or maintain the Premises, or any part thereof, in a manner reasonably satisfactory to County, County may, upon giving Sublessee reasonable written notice of its election to do so, make such repairs or perform such maintenance on behalf of and for the account of Sublessee. If County makes or causes any such repairs to be made or performed, as provided for herein, Sublessee shall pay the cost thereof to County, as additional rent, promptly upon receipt of an invoice therefore. If Major Maintenance is required as a direct result of the failure or negligence of Sublessee to perform the required Minor Maintenance, then Sublessee shall be solely responsible for the repair and cost associated with the resulting Major Maintenance.

10.9 Right to Enter. Sublessee shall permit County, or its authorized representatives, to enter the Premises at all times during usual business hours to inspect the same, and to perform any work therein that (a) may be necessary to comply with any laws, ordinances, rules or regulations of any public authority, (b) County may deem necessary to prevent waste or deterioration in connection with the Premises if Sublessee does not make, or cause to be made, such repairs or perform, or cause to be performed, such work promptly after receipt of written demand from County, and (c) County may deem necessary in connection with the expansion, reduction, remodeling, protection or renovation of any County-constructed or owned facilities on or off of the Premises. Nothing herein shall imply any duty on the part of County to do any such work which, under any provision of this Sublease, Sublessee may be required to do, nor shall

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County's performance of any repairs on behalf of Sublessee constitute a waiver of Sublessee's default in failing to do the same. If County exercises any of its rights under this Section, Sublessee shall not be entitled to any compensation, damages or abatement of rent from County for any injury or inconvenience occasioned thereby.

10.10 County Not Obligated to Repair or Maintain; Sublessee's Waiver of California Civil Code Section 1942. To the extent that any remedies specified in this Sublease conflict or are inconsistent with any provisions of California Civil Code section 1942, or any successor statute thereto ("CC §1942"), the provisions of this Sublease shall control. Sublessee specifically waives any right it may have pursuant to CC §1942 to effect maintenance or repairs to the Premises and to abate the costs thereof from rent due to the County under this Sublease.

ARTICLE 11

INDEMNITY AND INSURANCE

11.1 Sublessee’s Indemnity. County shall not be liable for, and Sublessee shall defend and indemnify County, including its employees and agents, against any and all claims, demands, liability, judgments, awards, fines, mechanics' liens or other liens, labor disputes, losses, damages, expenses, charges or costs of any kind or character, including attorneys’ fees and court costs (hereinafter collectively referred to as "Claims"), related to this Sublease and arising either directly or indirectly from any act, error, omission or negligence of Sublessee or its contractors, licensees, agents, volunteers, servants or employees, including, without limitation, Claims caused by the concurrent negligent act, error or omission, whether active or passive, of County. Sublessee shall have no obligation, however, to defend or indemnify County from a Claim if it is determined by a court of competent jurisdiction that such Claim was caused by the sole negligence or willful misconduct of County.

11.2 County’s Indemnity. County shall defend and indemnify Sublessee and hold it harmless from and against any Claims arising out of this Sublease that arise solely from any act, omission or negligence of County, or County’s employees, agents, elected officials, or volunteers.

11.3 Sublessee's Insurance Obligations. Without limiting Sublessee's indemnification obligations to County under this Sublease, Sublessee shall provide and maintain, during the Term and for such other period as may be required herein, at its sole expense, insurance in the amounts and form specified in Exhibit "C" attached hereto.

Sublessee shall maintain a policy of General Liability Insurance with regard to any liability it may incur for personal injury or property damage arising out its use or occupancy of the Premises and the entire parking lot area, more particularly described in Exhibit “D” attached hereto and made a part hereof and referred to herein as “General Liability Insurance Premises”.

ARTICLE 12

HAZARDOUS MATERIALS

12.1 Hazardous Materials Laws-Definition. As used in this section, the term "Hazardous Materials' Laws" means any and all federal, state or local laws or ordinances, rules, decrees, orders, regulations or court decisions (including the so-called "common law"), including without limitation the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C., 9601 et seq.), the Hazardous Materials Transportation Act, as amended (49 U.S.C., 1801 et seq.), the Resource Conservation and Recovery Act of 1976, as

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amended (42 U.S.C., 6901 et seq.), and the California Environmental Quality Act of 1970, relating to hazardous substances, hazardous materials, hazardous waste, toxic substances, environmental conditions on, under or about the Premises, soil and ground water conditions or other similar substances or conditions.

12.2 Hazardous Materials - Definition. As used in this section the term "Hazardous Materials" means any chemical, compound, material, substance or other matter that:
a. Is a flammable, explosive, asbestos, radioactive nuclear medicine, vaccine, bacteria, virus, hazardous waste, toxic, overtly injurious or potentially injurious material, whether injurious or potentially injurious by itself or in combination with other materials; b. Is controlled, referred to, designated in or governed by any Hazardous Materials Laws;
c. Gives rise to any reporting, notice or publication requirements under any Hazardous Materials Laws; or
d. Is any other material or substance giving rise to any liability, responsibility or duty upon the County or Sublessee with respect to any third person under any Hazardous Materials Law.

12.3 Sublessee's Representations and Warranties. Sublessee represents and warrants that, during the Term or any extension thereof, or for such longer period as may be specified herein, Sublessee shall comply with the following provisions unless otherwise specifically approved in writing by County:
a. Sublessee shall not cause or permit any Hazardous Materials to be brought, kept or used in or about the Premises by Sublessee, its agents, employees, assignees, contractors or invitees, except as required by Sublessee's permitted use of the Premises, as described in Section

5.1, "Permitted Uses."
b. Any handling, transportation, storage, treatment or usage by Sublessee of Hazardous Materials that is to occur on the Premises following the Commencement Date shall be in compliance with all applicable Hazardous Materials Laws. c. Any leaks, spills, release, discharge, or emission of Hazardous Materials caused by Sublessee, or disposal of Hazardous Materials owned by Sublessee, which may occur on the Premises during the Term shall be promptly and thoroughly cleaned and removed from the Premises by Sublessee at its sole expense, and any such discharge shall be promptly reported in writing to County, and to any other appropriate governmental regulatory authorities. d. No friable asbestos shall be constructed, placed on, deposited, stored, disposed of, or located by Sublessee in the Premises.
e. No underground improvements, including but not limited to treatment or storage tanks, or water, gas or oil wells shall be located by Sublessee on the Premises without County's prior written consent.
f. Sublessee shall conduct and complete all investigations, studies, sampling,

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and testing procedures and all remedial, removal, and other actions necessary to clean up and remove all Hazardous Materials on, from, or affecting the Premises in accordance with all applicable Hazardous Materials' Laws and to the satisfaction of County. g. Activities proposed by Sublessee that involve disturbing asbestos materials on site shall only be conducted in accordance with all federal, state and local asbestos rules and regulations including, but not limited to, the California Occupational Safety and Health Administration (Cal/OSHA), Environmental Protection Agency (EPA) and Air Pollution Control District (APCD), with prior written consent of the County, as follows:

Prior to conducting asbestos related activities, Sublessee shall notify County of the proposed work at least one month in advance. The notification shall include the location of work, type of asbestos containing material (ACM) to be removed and a work plan indicating the work practices and methods of control to be used during the abatement activity to control asbestos fiber release. The County Occupational Health Program shall review the work plan and may modify the plans as necessary.

Any asbestos related activities shall be performed by a contractor that is registered with Cal/OSHA and certified by the California Contractors State Licensing Board to perform asbestos work. Any asbestos related activities shall be overseen by a California Certified Asbestos Consultant (CAC), or a Certified Site Surveillance Technician under the direction of a CAC.

Replacement products used in tenant improvements or other construction activities shall not contain asbestos. Any replacement products used by Sublessee shall be verified as non-asbestos products by using Material Safety Data Sheets (MSDS) and/or having the architect or project engineer verify that ACMs were not used.
h. Sublessee shall promptly supply County with copies of all notices, reports, correspondence, and submissions made by Sublessee to the United States Environmental Protection Agency, the United Occupational Safety and Health Administration, and any other local, state or federal authority which requires submission of any information concerning environmental matters or hazardous wastes or substances pursuant to applicable Hazardous Materials' Laws.
i. Sublessee shall promptly notify County of any liens threatened or attached against the Premises pursuant to any Hazardous Materials' Law. If such a lien is filed against the Premises, then within twenty (20) days following such filing or before any governmental authority commences proceedings to sell the Premises pursuant to the lien, whichever occurs first, Sublessee shall either: (a) pay the claim and remove the lien from the Premises; or (b) furnish either (1) a bond or cash deposit reasonably satisfactory to County in an amount not less than the claim from which the lien arises, or (2) other security satisfactory to County in an amount not less than that which is sufficient to discharge the claim from which the lien arises. At the end of this Sublease, Sublessee shall surrender the Premises to County free of any and all Hazardous Materials and in compliance with all Hazardous Materials' Laws affecting the Premises.

12.4 Indemnification by Sublessee. Sublessee (and, if applicable, each of its general partners) and its successors, assigns, and guarantors, if any, jointly and severally agree to protect, indemnify, defend (with counsel selected by County), reimburse and hold County and its officers, employees, agents and volunteers harmless from any claims, judgments, damages, penalties, fines, costs or expenses (known or unknown, contingent or otherwise), liabilities (including sums paid

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in settlement of claims), personal injury (including wrongful death), property damage (real or personal) or loss, including attorneys' fees, consultants' fees, and experts' fees (consultants and experts to be selected by County) which arise during or after the Term from or in connection with the presence or suspected presence of Hazardous Materials, including the soil, ground water or soil vapor on or under the Premises. Without limiting the generality of the foregoing, the indemnification provided by this section shall specifically cover costs incurred in connection with investigation of site conditions or any cleanup, remedial, removal or restoration work required by any Hazardous Materials Laws because of the presence of Hazardous Materials in the soil, ground water or soil vapor on the Premises, and the release or discharge of Hazardous Materials by Sublessee during the course of Sublessee's alteration or improvement of the Premises.

12.5 Remedies Cumulative; Survival. The provisions of this Article shall be in addition to any and all common law obligations and liabilities Sublessee may have to County, and any remedies and the environmental indemnities provided for herein shall survive the expiration or termination of this Sublease and/or any transfer of all or any portion of the Premises, or of any interest in this Sublease, and shall be governed by the laws of the State of California.

12.6 Inspection. County and County's agents, servants, and employees including, without limitation, legal counsel and environmental consultants and engineers retained by County, may (but without the obligation or duty so to do), at any time and from time to time, on not less than five (5) business days' notice to Sublessee (except in the event of an emergency in which case no notice shall be required), inspect the Premises to determine whether Sublessee is complying with Sublessee's obligations set forth in this Article, and to perform environmental inspections and samplings, during regular business hours (except in the event of an emergency) or during such other hours as County and Sublessee may agree. If Sublessee is not in compliance, County shall have the right, in addition to County's other remedies available at law and in equity, to enter upon the Premises immediately and take such action as County in its sole judgment deems appropriate to remediate any actual or threatened contamination caused by Sublessee's failure to comply.

County will use reasonable efforts to minimize interference with Sublessee's use of Premises but shall not be liable for any interference caused by County's entry and remediation efforts. Upon completion of any sampling or testing County will (at Sublessee's expense if County's actions are a result of Sublessee's default under this section) restore the affected area of the Premises from any damage caused by County's sampling and testing.

ARTICLE 13

ASSIGNMENT AND SUBLETTING
Sublessee shall not voluntarily or involuntarily assign, Sublease, mortgage, encumber, or otherwise transfer (collectively, a "Transfer") all or any portion of the Premises or its interest in this Sublease without County's prior written consent. County may reasonably withhold its consent to any Transfer. Any attempted Transfer without County's consent shall be void and shall constitute a material breach of this Sublease. As used herein, the term "Transfer" shall include an arrangement (including without limitation management agreements, concessions, and licenses) that allows the use and occupancy of all or part of the Premises by anyone other than Sublessee.

ARTICLE 14

COUNTY'S RIGHT OF ACCESS
County, its agents, employees, and contractors may enter the Premises at any time in response to an emergency, and at reasonable hours to (a) inspect the Premises, (b) exhibit the

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Premises to prospective purchasers or Sublessees, (c) determine whether Sublessee is complying with its obligations in this Sublease (including its obligations with respect to compliance with Hazardous Materials Laws), (d) supply cleaning service and any other service that this Sublease requires County to provide, (e) post notices of non-responsibility or similar notices, or (f) make repairs that this Sublease requires County to make, or make repairs to any adjoining space or utility services, or make repairs, alterations, or improvements to any other portion of the Premises; provided, however, that all work will be done as promptly as reasonably possible and so as to cause as little interference to Sublessee as reasonably possible.

Sublessee waives any claim of injury or inconvenience to Sublessee's business, interference with Sublessee's business, loss of occupancy or quiet enjoyment of the Premises, or any other loss occasioned by such entry. If necessary, Sublessee shall provide County with keys to unlock all of the doors in the Premises (excluding Sublessee's vaults, safes, and similar areas designated in writing by Sublessee in advance). County will have the right to use any means that County may deem proper to open doors in the Premises and to the Premises in an emergency. No entry to the Premises by County by any means will be a forcible or unlawful entry into the Premises or a detainer of the Premises or an eviction, actual or constructive, of Sublessee from the Premises, or any part of the Premises, nor shall the entry entitle Sublessee to damages or an abatement of rent or other charges that this Sublease requires Sublessee to pay.

ARTICLE 15

QUIET ENJOYMENT
If Sublessee is not in breach under the covenants made in this Sublease, County covenants that Sublessee shall have peaceful and quiet enjoyment of the Premises without hindrance on the part of County. County will defend Sublessee in the peaceful and quiet enjoyment of the Premises against claims of all persons claiming through or under the County.

ARTICLE 16

NOTICES

16.1 Notices. Whenever in this Sublease it shall be required or permitted that notice or demand be given or served by either party to this Sublease to or on the other, such notice or demand shall be in writing, mailed or delivered to the other party at the following addresses:

To County:

Real Property Section
701 Ocean Street, Room 410
Santa Cruz, California 95060

To Sublessee:

Director of Libraries
Santa Cruz Public Libraries
117 Union Street
Santa Cruz, CA 95060
(831) 427-7700
Mailed notices shall be sent by United States Postal Service, certified or registered mail, postage prepaid and shall be deemed to have been given, delivered and received three (3) business days after the date such notice or other communication is posted by the United States Postal

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Service. All other such notices or other communications shall be deemed given, delivered and received upon actual receipt. Either party may, by written notice delivered pursuant to this provision, at any time designate a different address to which notices shall be sent.

16.2 Default Notices. Notwithstanding anything to the contrary contained within this Article, any notices County is required or authorized to deliver to Sublessee in order to advise Sublessee of alleged violations of Sublessee's covenants under this Sublease must be in writing but shall be deemed to have been duly given or served upon Sublessee by County attempting to deliver at the Premises during normal business hours a copy of such notice to Sublessee or its managing employee and by County mailing a copy of such notice to Sublessee in the manner specified in the preceding Section.

ARTICLE 17

WAIVER OF RELOCATION ASSISTANCE BENEFITS

17.1 Relocation Assistance Benefits. Sublessee is hereby informed and acknowledges the following:
a. By entering into this Sublease and becoming a tenant of County, Sublessee may become entitled to receipt of "relocation assistance benefits" ("Relocation Benefits") pursuant to the Federal Uniform Relocation Assistance Act (42 U.S.C. Section 4601 et seq.) and/or the California Relocation Assistance Law (Cal. Gov. Code Section 7270 et seq.) (collectively, the "Relocation Statutes"), should County at some time make use of the Premises in such a way as to "displace" Sublessee from the Premises. Pursuant to the Relocation Statutes, County may then become obligated to make such payments to Sublessee even where such displacement of Sublessee does not otherwise constitute a breach or default by County of its obligations pursuant to this Sublease.
b. Under the Relocation Statutes in effect as of the Date of Commencement of this Sublease, Relocation Benefits may include payment to such a "displaced person" of (i) the actual and reasonable expense of moving himself or herself and a family, business, or farm operation, including personal property, (ii) the actual direct loss of reestablishing a business or farm operation, but not to exceed Ten Thousand Dollars ($10,000), or (iii) payment in lieu of moving expenses of not less than One Thousand Dollars ($1,000) or more than Twenty Thousand Dollars ($20,000).

17.2 Sublessee's Waiver and Release of Relocation Benefits. In consideration of County's agreement to enter into this Sublease, Sublessee hereby waives any and all rights it may now have, or may hereafter obtain, to Relocation Benefits arising out of the County's assertion or exercise of its contractual rights to terminate this Sublease pursuant to its terms, whether or not such rights are contested by Sublessee or any other entity, and releases County from any liability for payment of such Relocation Benefits; provided, however, that Sublessee does not waive its rights to Relocation Benefits to the extent that Sublessee's entitlement thereto may arise out of any condemnation or pre-condemnation actions taken by the County or any other public agency with respect to the Premises. Sublessee shall in the future execute any further documentation of the release and waiver provided hereby as County may reasonably require.

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ARTICLE 18

GENERAL PROVISIONS

18.1 Authority. Sublessee represents and warrants that it has full power and authority to execute and fully perform its obligations under this Sublease pursuant to its governing instruments, without the need for any further action, and that the person(s) executing this Sublease on behalf of Sublessee are the duly designated agents of Sublessee and are authorized to do so.

18.2 Brokers. Sublessee warrants that it has not been represented by any real estate broker or agent in connection with the negotiation and/or execution of this Sublease. In the event any broker makes claim for monies owed, Sublessee shall indemnify, defend and hold County harmless therefrom.

18.3 Captions. The captions, headings and index appearing in this Sublease are inserted for convenience only and in no way define, limit, construe, or describe the scope or intent of the provisions of this Sublease.

18.4 County Approval. Except where stated herein to the contrary, the phrases "County's approval," and "County's written approval" or such similar phrases shall mean approval of County's Sublease Administrator or said Administrator's representative as authorized by said administrator in writing.

18.5 Cumulative Remedies. In the event of a default under this Sublease, each Party's remedies shall be limited to those remedies set forth in this Sublease. Any such remedies are cumulative and not exclusive of any other remedies under this Sublease to which the nondefaulting Party may be entitled.

18.6 Entire Agreement. This Sublease, together with all addenda, exhibits and riders attached hereto, constitutes the entire agreement between the Parties with respect to the subject matter hereof, and all prior or contemporaneous agreements, understandings and representations, oral or written, are superseded.

18.7 Estoppel Certificate. Sublessee shall at any time during the term of this Sublease, within five (5) business days of written notice from County, execute and deliver to County a statement in writing certifying that this Sublease is unmodified and in full force and effect or, if modified, stating the nature of such modification. Sublessee's statement shall include other details requested by County, such as the date on which rent and other charges are paid, the current ownership and name of Sublessee, Sublessee's knowledge concerning any outstanding defaults with respect to County's obligations under this Sublease and the nature of any such defaults. Any such statement may be relied upon conclusively by any prospective purchaser or encumbrancer of the Premises. Sublessee's failure to deliver such statements within such time shall be conclusively deemed to mean that this Sublease is in full force and effect, except to the extent any modification has been represented by County, that there are no uncured defaults in the County's performance, and that not more than one month's rent has been paid in advance.

18.8 Exhibits. All exhibits referred to herein are attached hereto and incorporated by reference.

18.9 Force Majeure. In the event either party is prevented or delayed from performing any act or discharging any obligation hereunder, except for the payment of rent by Sublessee,

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because of any and all causes beyond either party's reasonable control, including unusual delays in deliveries, abnormal adverse weather conditions, unavoidable casualties, strikes, labor disputes, inability to obtain labor, materials or equipment, acts of God, governmental restrictions, regulations or controls, any hostile government actions, civil commotion and fire or other casualty, legal actions attacking the validity of this Sublease or the County's occupancy of the Premises, or any other casualties beyond the reasonable control of either party except casualties resulting from Sublessee's , or its permitted sublessees or assigns, negligent operation or maintenance of the Premises ("Force Majeure"), performance of such act shall be excused for the period of such delay, and the period for performance of such act shall be extended for a period equivalent to the period of such delay. Force Majeure shall not include any bankruptcy, insolvency, or other financial inability on the part of either party hereto.

18.10 Governing Law. This Sublease shall be governed, construed and enforced in accordance with the laws of the State of California.

18.11 Interpretation. The language of this Sublease shall be construed simply according to its plain meaning and shall not be construed for or against either party.

18.12 Joint and Several Liability. If more than one person or entity executes this Sublease as Sublessee, each of them is jointly and severally liable for all of the obligations of Sublessee hereunder.

18.13 Sublease Administration. This Sublease shall be administered on behalf of County by the Department of Public Works – Real Property, County of Santa Cruz, or by such person's duly-authorized designee (referred to collectively herein as "County's Sublease Administrator"), and on behalf of Sublessee by: Director of Libraries, Santa Cruz Public Libraries, 117 Union Street, Santa Cruz, CA 95060, 831-427-7700 ext. 7611, or by such other person as may be designated in writing by Sublessee (referred to collectively herein as "Sublessee's Sublease Administrator").

18.14 Sublessee's Sublease Administration. Sublessee confirms that Sublessee's Sublease Administrator has been given full operational responsibility for compliance with the terms of this Sublease. Sublessee shall provide County with a written schedule of its normal hours of business operation on the Premises, and Sublessee's Sublease Administrator or a representative designated thereby shall be (i) available to County on a twenty-four (24) hour a day, seven (7) days a week, basis, and (ii) present on the Premises during Sublessee's normal business hours, to resolve problems or answer question pertaining to this Sublease and Sublessee's operations on the Premises.

18.15 Liquidated Damages. Any payments by Sublessee to County under this Sublease described as liquidated damages represent the parties' reasonable estimate of County's actual damages under the described circumstances, such actual damages being uncertain and difficult to ascertain in light of the impossibility of foreseeing the state of the leasing market at the time of the various deadlines set forth herein. County may, at its election, take any of the liquidated damages assessed in any portion of this Sublease as direct monetary payments from Sublessee and/or as an increase of rent due from Sublessee under this Sublease.

18.16 Modification. The provisions of this Sublease may not be modified, except by a written instrument signed by both parties.

18 251 KINGS VILLAGE RD #400

18.17 Partial Invalidity. If any provision of this Sublease is determined by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Sublease shall not be affected thereby. Each provision shall be valid and enforceable to the fullest extent permitted by law.

18.18 Payments. Except as may otherwise be expressly stated, each payment required to be made by Sublessee shall be in addition to, and not a substitute for, other payments to be made by Sublessee.

18.19 Successors & Assigns. This Sublease shall be binding on and inure to the benefit of the parties and their successors and assigns, except as may otherwise be provided herein.

18.20 Time of Essence. Time is of the essence of each and every provision of this Sublease.

18.21 Waiver. No provision of this Sublease or the breach thereof shall be deemed waived, except by written consent of the party against whom the waiver is claimed. The waiver by County of any breach of any term, covenant or condition contained in this Sublease shall not be deemed to be a waiver of such term, covenant or condition of any subsequent breach thereof, or of any other term, covenant or condition contained in this Sublease. County's subsequent acceptance of partial rent or performance by Sublessee shall not be deemed to be an accord and satisfaction or a waiver of any preceding breach by Sublessee of any term, covenant or condition of this Sublease or of any right of County to a forfeiture of the Sublease by reason of such breach, regardless of County's knowledge of such preceding breach at the time of County's acceptance.

The failure on the part of County to require exact or full and complete compliance with any of the covenants, conditions of agreements of this Sublease shall not be construed as in any manner changing or waiving the terms of this Sublease or as estopping County from enforcing in full the provisions hereof. No custom or practice which may arise between the parties hereto in the course of administering this Sublease shall be construed to waive, estop or in any way lessen County's right to insist upon Sublessee's full performance of, or compliance with, any term, covenant or condition of this Sublease or to inhibit or prevent County's exercise of its rights with respect to any default, dereliction or breach of this Sublease by Sublessee.

SIGNATURE PAGE TO FOLLOW

19 251 KINGS VILLAGE RD #400

SANTA CRUZ PUBLIC LIBRARIES COUNTY OF SANTA CRUZ
___________________________________
Director of Libraries Date
Matt Machado, Deputy CAO, Director of
Community Development and Infrastructure
_____________________________________
Date
APPROVED AS TO FORM:
__________________________________
Library General Counsel Date
APPROVED AS TO FORM:
______________________________________
Office of County Counsel Date
APPROVED AS TO INSURANCE:
_______________________________________
Risk Management Date
RECOMMENDED FOR APPROVAL:
_____________________________________
Real Property Date
RECOMMENDED FOR APPROVAL:
______________________________________
City of Scotts Valley Date

CCSF 85.21 (Rev 4/00) A-1 Rev. 03/27/2012
EXHIBIT “A”
Master Lease

EXHIBIT “B”
Premises

EXHIBIT “C”

INSURANCE REQUIREMENTS

INSURANCE REQUIREMENTS
Without limiting Sublessee’s indemnification obligations to County under this Sublease, Sublessee shall provide and maintain for the duration of this Sublease insurance against claims for injuries to persons or damages to property which may arise from or in connection with the Sublessee’s operation and use of the Subleased Premises. The cost of such insurance shall be borne by the Sublessee.

1. Minimum Scope of Insurance
Coverage shall be at least as broad as:

A. Commercial General Liability, Occurrence form, Insurance Services Office Form CG0001 for the General Liability Insurance Premises described in Exhibit “D” B. Automobile Liability covering all owned, non-owned and hired auto, Insurance Services Office form CA0001.

C. Workers Compensation, as required by State of California and Employer’s Liability Insurance.

D. Property Insurance against all risk or special form perils, including Replacement Cost coverage, without deduction for depreciation, for Sublessee’s merchandise, fixtures owned by Sublessee, any items identified in this Sublease as improvements to the Premises constructed and owned by Sublessee, and the personal property of Sublessee, its agents and employees, including coverage for earthquake and flood.

2. Minimum Limits of Insurance
Sublessee shall maintain limits no less than:

A. Commercial General Liability including the General Liability Premises , Operations, Products and Completed Operations, Contractual Liability and Independent Contractors: $1,000,000 per occurrence for bodily injury, personal injury and property damage. The General Aggregate limit shall be $2,000,000 and shall be a Per Location Aggregate. Fire Damage Limit (Any One Fire) $300,000 and Medical Expense Limit (Any One Person) $5,000.

B. Automobile Liability: $1,000,000 each accident for bodily injury and property damage. Coverage will include contractual liability.

C. Employers Liability: $1,000,000 each accident for bodily injury or disease.

Coverage shall include a waiver of subrogation endorsement in favor of County of Santa Cruz and City of Scotts Valley.

D. Property: Full replacement cost with no coinsurance penalty provision.

3. Deductibles and Self-Insured Retentions
Any liability deductible or self-insured retention must be declared to and approved by the County’s Risk Manager. The property insurance deductible shall not exceed $5,000 per occurrence and shall be borne by Sublessee.

4. Other Insurance Provisions
The general liability and automobile liability policies are to contain, or be endorsed to contain the following provisions:

A. Additional Insured Endorsement
Any general liability policy provided by Sublessee shall contain an additional insured endorsement applying coverage to the County of Santa Cruz, the members of the Board of Supervisors of the County and the officers, agents, employees and volunteers of the County, individually and collectively and the City of Scotts Valley.

B. Primary Insurance Endorsement
For any claims related to this Sublease, the Sublessee’s insurance coverage shall be primary insurance as respects the County, the members of the Board of Supervisors of the County and the officers, agents, employees and volunteers of the County, individually and collectively and the City of Scotts Valley. Any insurance or self-insurance maintained by the County, the members of the Board of Supervisors of the County, its officers, officials, employees, or volunteers and the City of Scotts Valley shall be excess of the Sublessee’s insurance and shall not contribute with it.

C. Notice of Cancellation
Each required insurance policy shall be endorsed to state that coverage shall not be canceled by either party, except after thirty (30) days’ prior written notice by certified mail, return receipt requested, has been given to the County at the address shown in section of Sublease entitled “Notices”.

GENERAL PROVISIONS

5. Qualifying Insurers

All required policies of insurance shall be issued by companies which have been approved to do business in the State of California by the State Department of Insurance, and which hold a current policy holder’s alphabetic and financial size category rating of not less than A- VII according to the current Best’s Key Rating guide, or a company of equal financial stability that is approved in writing by County’s Risk Manager.

6. Proof of Insurance
Sublessee shall, as soon as practicable following the placement of insurance required hereunder, but in no event later than the effective date of the Contract, deliver to County certified copies of the actual insurance policies specified herein, together with appropriate separate endorsements thereto, evidencing that Sublessee has obtained such coverage for the period of the Contract. Thereafter, copies of renewal policies, and appropriate separate endorsements thereof, shall be delivered to County within thirty (30) days prior to the expiration of the term of any policy required herein.

7. Failure to Obtain or Maintain Insurance; County’s Remedies Sublessee’s failure to provide insurance specified or failure to furnish certificates of insurance, amendatory endorsements and certified copies of policies, or failure to make premium payments required by such insurance, shall constitute a material breach of the Sublease, and County may, at its option, terminate the Sublease for any such default by Sublessee.

8. No Limitations of Obligations
The foregoing insurance requirements as to the types and limits of insurance coverage to be maintained by Sublessee, and any approval of said insurance by the County are not intended to and shall not in any manner limit or qualify the liabilities and obligations otherwise assumed by Sublessee pursuant to the Sublease, including, but not limited to, the provisions concerning indemnification.

9. Review of Coverage
County retains the right at any time to review the coverage, form and amount of insurance required herein and may require Sublessee to obtain insurance reasonably sufficient in coverage, form and amount to provide adequate protection against the kind and extent of risk which exists at the time a change in insurance is required.

10. Self-Insurance
Sublessee may, with the prior written consent of County’s Risk Manager, fulfill some or all of the insurance requirements contained in this Sublease under a plan of self-insurance.

Sublessee shall only be permitted to utilize such self-insurance if in the opinion of County’s Risk Manager, Sublessee’s (i) net worth, and (ii) reserves for payment of claims of liability against Sublessee, are sufficient to adequately compensate for the lack of other insurance

coverage required by this Sublease. Sublessee’s utilization of self-insurance shall not in any way limit liabilities assumed by Sublessee under this Sublease.

11. Sublessees’ Insurance
Sublessee shall require any sub-sublessee, of all or any portion of the Premises to provide the insurance coverage described herein prior to occupancy of the Premises.

12. Waiver of Subrogation
Sublessee and County waive all rights to recover against each other or against any other tenant or occupant of the building, or against the officers, directors, shareholders, partners, employees, agents or invitees of each other or of any other occupant or tenant of the building, from any Claims (as defined in the Article entitled “Indemnity”) against either of them and from any damages to the fixtures, personal property, Sublessee’s improvements, and alterations of either County or Sublessee in or on the Premises and the Property, to the extent that the proceeds received from any insurance carried by either County or Sublessee, other than proceeds from any program of self-insurance, covers any such Claim or damage.

Included in any policy or policies of insurance provided by Sublessee shall be a standard waiver of rights of subrogation against County by the insurance company issuing said policy or policies.