Agenda packet — South Lake Tahoe City Council, August 8, 2023 (part 3 of 5)

2. The seminar, meeting, or conference is necessary to accomplish key City goals/objectives and is unavailable locally if overnight accommodations are required.

3. The minimum number of City staff members will be going.

4. The itinerary ensures accomplishment of the purpose at the lowest reasonable cost.

5. The traveler understands and follows these guidelines.

6. There is enough budget in the appropriate travel line item to cover the costs.

7. A Travel Expense Reconciliation Form with all substantiated receipts will be submitted.

2.2. ALLOWABLE EXPENSES
Expenses incurred in connection with the following activities generally constitute authorized expenses when guidelines of this policy are met:

1. Communicating with representatives of regional, state, and national government on City adopted policy positions.

2. Serving on professional organizational/governmental committees, boards, or task forces.

3. Attending educational seminars, conferences, or organized educational activities 460
City of SLT Financial Policies – Travel 4 August 2023
designed to improve skill levels or provide information on topics important to City policy and operations.

4. Preparing research for City projects or implementing adopted City plans, policies, goals, or programs.

5. Attending meetings involving activities or decisions important to City interests and are consistent with adopted plans, policies, goals, or programs.

6. Attending events where the City is a formal sponsor or participant, or in performance of official duties for the City.

7. Communicating with individuals or representatives of community groups on policy positions adopted by or under consideration by the City.

8. Engaging in other business-related activities with a direct connection to the implementation of adopted City plans, policies, goals, or programs.

3. PLANNING AN OFFICAL TRIP:

3.1 COMPENSATION
When travel time exceeds the normal work week and the operating MOU allows, the City’s rules for overtime apply. In determining overtime compensation, normal commute time should be deducted from the total time traveled. Additionally, normal unpaid meal periods are not considered work time when traveling. Overtime eligibility applies equally to drivers and passengers and should be granted whether the travel occurs during normal workdays, weekends, or evenings.

3.2 REGISTRATION
Fees charged for registration at a convention, meeting, or training are reimbursable with prior approval. Registration fees can be paid with a Cal-Card, requested as an advance with documentation of published rate, or reimbursed with itemized receipt if the employee pays for the registration on their own.

3.3 TRANSPORTATION
Transportation at the Destination- Use of public transit such as intercity trains, buses, streetcars, or ridesharing etc. is appropriate. If a car rental is required, attach a quote from the most reasonably priced rental car company for an advance check, use your Cal Card for payment, or attach an itemized receipt for reimbursement.

Air Travel- All air travel on City business should be coach class. Compare airline carriers prior to making reservations to ensure the most competitive rates are available to the City. • Reminder, out-of-state travel must be pre-approved by the City Manager Traveling by Automobile- Traveling by a City vehicle is the most ideal. If one is not available or a personal car is preferred, approval of the Authorized Signor is required. 461
City of SLT Financial Policies – Travel 5 August 2023
City Vehicle: When using a city vehicle, reimbursement for gas expenses is appropriate.

Due to liability concerns, non-City employees/officials including spouses, children, and guests should not ride as passengers in City vehicles.

Personal Vehicle: When using a personal vehicle for travel; reimbursement at the current approved IRS Mileage rate (2023 rate of 65.5 cents per mile) will be provided. "Google Maps" or other mapping sites must be used in determining mileage reimbursements. The City will not reimburse for non-business-related mileage such as a personal stop or an indirect route taken for personal reasons.

Mileage in-lieu of Commercial Carrier Costs: In the event a commercial carrier such as an airplane would otherwise be the preferred mode of transportation, but a personal car is preferred (subject to the approval guidelines set forth above), mileage will be reimbursed up to the cost of a commercial carrier.

To drive a privately-owned vehicle on City business it is required to:

1. Possess a valid license to drive in California.

2. Carry liability insurance limits required by Human Resources with the City named as additional insured.

3. Realize that any damage to the car or needed service/repair occurring on the trip will be your responsibility as these costs are included in the City's per mile cost reimbursement.

3.4 LODGING
Accommodations- The City will pay for a single room (including taxes and parking) for as many nights as necessary. The accommodations used should be economical but practical. In general, choose the most reasonably priced accommodations available consistent with the purpose, goals, and convenience of travel.

Canceling a Reservation- Cancel any reservation that cannot be used. If the City is charged for an unused reservation, the employee will pay the charge unless circumstances requiring cancellation were reasonably beyond control and approved by the Authorized Signor.

3.5 MEALS
Please note: Procurement cards (CAL-Card), or Petty Cash, cannot be used for meals while traveling. There are no exceptions. (Please see Section 8 of the Cal-Card User Handbook). Refer to Finance Policies – Cash, for disbursement of Petty Cash requirements.

To qualify for meal allowance:

1. Travel must be to an overnight destination outside of the City limits.

2. Meal expenses will be paid on a not to exceed per diem rate while traveling on official business as published by the Federal Government gsa.gov website under Per Diem Rates.
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City of SLT Financial Policies – Travel 6 August 2023

3. The per diem will generally be paid in advance of travel (receipts not required).

Where a timely per diem request is not submitted (within 10 days prior to travel) and/or as determined by the employee’s department head; a reimbursement of meal expenses may be submitted after travel (requires submittal of receipts).

4. Reimbursement in excess of allowable standard Federal Per Diem rate is taxable and must be reported on an employees’ W-2 as wages. Therefore, under no circumstances may the cost of meals exceed the per diem rates allowed under this policy.

Employee is responsible for meal costs above current approved per diem rate.

5. Employees may not claim meals provided by the event or included in hotel costs or conference fees.

6. Meals must be accounted for upon your return on the Travel Expense and Reconciliation (T.E.R) Form. No receipts are required for advance per diem payments. All reimbursed meal expenses REQUIRE attached receipts.

Current Per Diem rates for 2023 for South Lake Tahoe are as follows:

Breakfast: $17.00
Lunch: $18.00
Dinner: $34.00
Incidental Expenses: $5.00 (payable full day)
Total M&IE allowable payment for a full day (excess of 12 hours): $74 First & Last Day of Travel (less than 12 hours): $55.50* * per GSA allowable Per Diem rates, the first and last day of travel may be received at 75% of total M&IE, this amount is only allowed on first and last travel days.

Rates are subject to change per Federal Government General Services Administration (GSA) www.gsa.gov/perdiem.

3.6 PROHIBITED EXPENSES
Examples of prohibited expenditures include but are not limited to:
• Alcohol/narcotics
• Toiletries/medicines
• Car repair/traffic citations (parking tickets, toll fines) • Credit card interest charges
• Pet hotel fees, Health club fee/ spa treatments
• Fees for upgrades of air, hotel, or auto
• Headphones or extra incidentals on airlines
• Laundry/dry cleaning
• Movies/entertainment (in-room or off-site)
• Sporting events, theater, or cinema
• Personal expenses/spouse or guest expenses
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City of SLT Financial Policies – Travel 7 August 2023

3.7 PERSONAL TRAVEL
If time is taken away from official business for personal matters, or return is delayed after completing the business trip, reimbursement will not be provided for expenses incurred during that time. Pre-approval is required when combining business and personal travel. If this extended period occurs during regular scheduled work hours, the time will be counted as vacation, comp time, paid time off, or leave without pay.

3.8 ILLNESS WHILE TRAVELING
Should an employee/official become sick or ill during a travel business trip, reimbursement will be provided for necessary additional living expenses (except those directly related to your illness, such as physician or hospital costs) until the employee can return home.

Employees are required to notify the supervisor or Authorized Signor as soon as possible of becoming ill. If applicable, the time will be counted as sick leave or paid time-off during your normally scheduled work hours.

4. PAYMENTS AND REIMBURSEMENTS:

The City will pay all legitimate expenses of your trip or meeting. These include transportation, lodging, registration fees, meals and any other related expenses such as parking, baggage fees, and bridge tolls if they are for official business and within the guidelines of this policy.

4.1 PAYMENT OPTIONS
Direct Vendor Payments: Direct payments made by the City to an organization to pay for specific costs related to a trip, usually registration fees, lodging and airfare. To obtain direct vendor payments, complete the appropriate sections of the T.A.A. Form and attach payment information for all direct payments. Retain a copy of the completed form to assist in reconciling actual expenses.

Cal Cards may be used to pay vendors directly for travel expenses, upon approval with completed T.A.A from. Receipt of payment on a Cal Card must be submitted with both the Travel Expense and Reconciliation (T.E.R.) Form and Cal Card Statement. Attach a copy of your T.A.A form to your Cal Card statement, when paying for travel expenses (including hotel reservations) with your Cal Card.

Payment for travel meals on a Cal Card is prohibited.

Cash Advances: Advance payments can be provided to an employee prior to travel to cover expenses including per diem for meal expenses, Hotel Registration, Transportation etc. To request cash advance, the Authorized Signor must review the amount ensuring it is reasonable and within the current Approved Per Diem Rates and department budget.

Employees must submit a T.E.R. Form to Accounts Payable with final reconciliation 464
City of SLT Financial Policies – Travel 8 August 2023
documenting all expenses and attaching receipts. Meals must be accounted for although receipts are not required if the employee received a per diem advance.

Reimbursements: Upon return, account for all expenses incurred on the T.E.R. Form attach substantiated receipts for all expenses and obtain proper approval from the Authorized Signor. Reimbu rsement of Meals requires itemized receipts. Reimbursements will be processed within ten (10) days of submittal to Accounts Payable.

Petty Cash cannot be used for Travel Costs. Refer to Financial Policies- Cash, for disbursement of Petty Cash requirements.

5. FINAL ACCOUNTING AND RECONCILIATION:

5.1 MAINTAINING DOCUMENTATION
• Maintain a detailed record of all expenses incurred during travel: meals, transportation/mileage, lodging, car rentals, parking fees, registration fees, and any other reasonable and necessary expenses to assist with final reconciliation. • Detailed receipts must be submitted for all expenses except when receiving advanced per diem for meals. Failure to provide such documentation will result in denial of reimbursement.

Missing or Lost Receipts:

Reimbursement of expenses without receipts becomes taxable income.

Therefore, the city will not reimburse employees without receipts. In the event receipts are not available, provide a written explanation to your Department Head, include a full description of the cost of the expense and reason the receipts are missing. IRS requires the name of the establishment, the date of service, description of items/meals/service purchased, amount paid, include tax if applicable. If you used a personal credit or debit card, provide a copy of the bank transaction. This written explanation must be approved by the Department Head and submitted to the Finance Director for approval. Once approved, submit this documentation with your T.E.R. Form to Accounts Payable. The City reserves the right to require additional approval of the City Manager, where necessary or deny the reimbursement.

5.2 EXPENSE REPORTING
Within 10 days of return, employees must submit a T.E.R. Form to Accounts Payable with final reconciliation and receipts documenting all expenses. Failure to return this form will result in repayment to the City of any advanced funds and/or denial of reimbursement for expenses not accounted for in this manner.

Per IRS Section 15: to be excluded from taxable wages your T.E.R Form must include the 465
City of SLT Financial Policies – Travel 9 August 2023
following:
• The business purpose of the trip
• The date and place of the trip
• Receipts for lodging, and all travel expenses
• Receipts for meals if requesting reimbursement
Authorized Signor approving expense reports are responsible to ensure:

1. All expenses are reasonable, necessary and consistent with this policy.

2. All required itemized receipts are attached.

3. The final reconciliation is correct (balance due employee; balance due City).

4. Amounts due to the City are reimbursed within 10 days.

5. Final accounting on T.E.R. Form is submitted to Finance.

6. FALSIFICATION OF EXPENSES:

Submitting fraudulent receipts or falsifying a Travel Expense Reconciliation Form will result in loss of reimbursement privileges and may lead to disciplinary action up to and including termination of employment.

The City of South Lake Tahoe reserves the right to deny reimbursement of expenses that are considered lavish, extravagant, or are unsupported by required documentation. Unusual expenses incurred due to special circumstances may be approved by the City Manager, if those expenses do not violate Federal or State requirements and when in the City Manager’s judgment, such expenses are justified. These expenses must be submitted on a Travel Expense Reconciliation Form supported by documentation and written explanation of circumstances, signed by Department Head, Finance Director, and City Manager.

7. FORMS AND PUBLICATIONS:

The following forms are required when traveling for City business:

1. Prior to booking and paying for travel: Travel Authorization and Advance Form (T.A.A.F.).

2. Return from travel: Travel Expense and Reconciliation Form (T.E.R.F.).

3. Examples to assist in filling out these forms is located on the next page.

4. Blank forms are located in Outlook, Public Folders, Finance Dept., Travel-Training Polices. Updated Aug. 2023.

7.1 INTERNAL REVENUE SERVICE (IRS)
For additional information or clarification, refer to the following IRS publications. • IRS Publication 15-B, Employers Tax Guide to Fringe Benefits for tax reporting requirement
• IRS Publication 463, Travel, Entertainment, Gift and Car Expenses 466
City of SLT Financial Policies – Travel 10 August 2023
• IRS Publication 5318, Tax Cuts and Jobs Act, tax reform 2017 467
City of SLT Financial Policies – Travel 10 August 2023
Financial Management - Travel Policy

CITY OF SOUTH LAKE TAHOE

TRAVEL AUTHORIZATION AND ADVANCE FORM

PRE-TRAVEL REPORTING
This form should be completed in legible handwriting or in Excel using the City's standard template prior to booking or paying for travel.

EXAMPLE

PURPOSE OF TRAVEL
Attend the 2023 Annual ABC Conference in San Francisco, CA to learn of recent developments in xxxxxxxxx to assist my department in xxxxxxx.

Conference begins 9:00 AM on Juned 2nd and ends 12:00 AM on June 4th.

Employee Department Position
First & Last Name City Department Employee Title
Destination No. of Days (including first/last) Total Cost of Travel San Francisco, CA 3 $ 1,297.69

ITINERARY
Departure From: Date/Time Arrival To: Date/Time
City Offices, address 6/1/2023 12:30 San Francisco, ABC Hotel 6/1/2023 16:30

ESTIMATED COSTSUMMARY
Description Vendor Payment Method* Account Number Paid/ Reimb Advance Registration ABC Conference D (Cal Card) 100 xxxxx 44050 $ 100.00 Air Fare N/A
Lodging Hotel 3 nights + park R (Reimbursement) 100 xxxxx 44050 $ 735.84 Rental Car N/A
Mileage- Personal Vehicle 185 miles x 2 x 0.655 A (Advance) 100 xxxxx 44051 242.35 Gasoline- City Vehicle
Parking
Misc.
$ 835.84 $ 242.35
* D= Direct Vendor Payments, A= Advance, R= Reimbursement ** 2023 IRS rate is 65.5 cents ($0.655) per mile. Attach documentation used in determining anticipated mileage.

ESTIMATED COST SUMMARY CONT. (MEALS)
Note: Calculation of daily meal per-diem must be in compliance with IRS regulations using Federal GSA rates. Follow the calculation below to request proper amounts. If meals are included with registration or hotel fees make sure to deduct them from the calculation.

Account Number: 100 xxxxx 44050
Instructions Date/ Meal Type Amount
First Day of Travel:

If two meal periods will be incurred put $55.50:

If only one meal period will be incurred use individual meal rates: 6/1/22 Dinner 34.00 Full Day of Travel: Put number of full calendar travel days x $74.00 or deduct meals 6/2/22 Full Day 74.00 included in registration, hotel, or provided by event 6/3 (breakfst/dinner) lunch incl 56.00 Last Day of Travel:

If two meal periods will be incurred put $55.50: 6/4 2 meal periods (Breakfast & Lunch) 55.50 If only one meal period will be incurred use rates below:

Individual Meal Rates: Breakfast $17.00, Lunch $18.00, Dinner $34.00, $5.00 incidentals ($74.00 full day) $ 219.50 First & Last Day of Travel: Calculated at 75% of total daily meals & incidentals.

SUM OF ADVANCES AND PER DIEM OWED TO EMPLOYEE: $ 461.85

APPROVALS
Employee Date Authorized Signor Date
printed employee name date submitted Supervisor or Dept Head date signed 468
City of SLT Financial Policies – Travel 11 August 2023
Financial Management - Travel Policy

CITY OF SOUTH LAKE TAHOE

TRAVEL EXPENSE AND REIMBURSEMENT FORM

POST TRAVEL REPORTING
Thisform should be completed in legible handwriting orin Excel using the City'sstandard template.

EXAMPLE

RECAP OF TRAVEL
Employee Name Department Location Date Left Date Returned Total Cost of Travel First & Last Name City Department ABC Conf. San Francisco, CA 6/1/2023 6/4/2023 $ 1,297.69

ACTUAL COSTS INCURRED
Description Vendor Payment Method* Account
Number Amount Paid Amount Due- Attach
Itemized Receipts
Registration ABCConference D (Cal Card) 100 xxxxx 44050 $ 100.00 Air Fare
Lodging ABCHotel R- Personal Credit Card 100 xxxxx 44050 $ 735.84 Rental Car
Meals** A- Advanced Per Diem 100 xxxxx 44050 $ 219.50
Mileage- Personal Vehicle*** 370 miles -185 x 2 x $0.655 A (Advance) 100 xxxxx 44051 $ 242.35 Gasoline- City Vehicle
Parking
Misc.
$ 561.85 $ 735.84
* D= Direct Vendor Payments, A=Advance, R=Reimbursement ** If a per diem was received prior to travel, fill in total received in the amount column. *** 2023 IRS rate is .655 per mile. Attach documentation used in determining mileage reimbursement. **** All Reimbursements require itemized receipts attached.

ACTUAL MEAL COSTS INCURRED: If meal Per Diem was received as an Advance, leave the section below blank.

Note: If requesting reimbursement for meals, attach itemized receipts for all meal periods. The City will only reimburse up to the Federal G.S.A Per Diem amounts. $5.00 Per Diem Incidental rate not applicable for Reimbursement.

DATE BREAKFAST LUNCH DINNER
Individual Meal Rates: Breakfast $17.00, Lunch $18.00, Dinner $34.00 $ - SUM OF REIMBURSEMENTS OWED TO EMPLOYEE: $ 735.84

APPROVALS
Employee Date Authorized Signor Date
469
City of SLT Financial Policies – Preserving Capital Investments 1 Rev. February 2013 Financial Policies:

Preserving Capital Investments - Fixed Assets
Capitalization and Inventory Control Policy
The City invests in capital assets such as property, plant, equipment, facilities and infrastructure. Preservation of such investments through regular maintenance and a long-term renovation plan is necessary to preserve the value of such capital investments. The City must also plan for the replacement of capital investments (particularly vehicles and equipment). The following policy requirements are intended to ensure the proper accounting and preservation of capital investments; and to provide a sound economic base for their replacement.

1. The budget should provide sufficient funding for adequate maintenance, renovation and the orderly replacement of capital assets such as equipment, fleet, facilities, streets and parks.

2. All capital assets should be maintained at a level that protects capital investment and minimizes future maintenance and replacement costs.

3. A five-year schedule of equipment replacement and maintenance needs, as well as facilities, streets and parks renovation and maintenance needs should be prepared on an annual basis. Expenditures consistent with such plans shall be included in annual budget appropriations.

A. Capital Assets Definition, Classes, and Capitalization Thresholds The City defines capital assets as any assets used in operations with an estimated useful life in excess of three years that have a value equal to or greater than the capitalization threshold for their respective asset class.

The Asset Classes and Capitalization Thresholds have been established as follows:

Asset Class Threshold
Land $50,000
Buildings/Building Improvements $50,000/$7,000
Improvements Other Than Buildings $7,000
Vehicles, Machinery, Specialty and Office Equipment $7,000 Intangibles $100,000
Infrastructure $200,000
Construction in progress $50,000
Lease purchase assets Use threshold for the
appropriate asset class
The threshold will generally not be applied to components of fixed assets.

470
City of SLT Financial Policies – Preserving Capital Investments 2 Rev. February 2013

1. Cost of Capital Assets
Capital Assets are recorded at historical cost or estimated historical cost if purchased or constructed. The cost should include ancillary charges necessary to place the asset into its intended location and condition for use. Items to include in the cost of capital asset are as follows:
• Original contract or invoice price
• Freight and transportation charges
• Handling and storage charges
• In-transit insurance charges
• Sales, use, and other taxes imposed on the acquisition • Installation charges
• Charges for testing and preparation for use
• Site preparation costs
• Professional fees
• Capitalized interest should be included in the cost of a proprietary fund asset when it meets the criteria of Financial Accounting Standards Board No. 34.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized.

Donated capital assets are valued at their fair value on the date of donation.

2. Depreciating Capital Assets
Property, plant and equipment, depreciable infrastructure and intangible assets of the City shall be depreciated using the straight-line method and applying the half-year convention method over the following useful lives.

Asset Class Years
Buildings/Building Improvements 10-40
Improvements Other Than Buildings 3-10
Vehicles, Machinery, Specialty and Office Equipment 3-20 Intangibles (subject to depreciation/amortization) As limited by contractual or legal
provisions.

Infrastructure 10-40
It is the City’s policy that capital assets have no residual value at the end of their lives. Land, Construction-in-Progress and certain intangible assets are not depreciated. If the asset is disposed of before the end of its useful life, a half-year of depreciation is allowable for the year of disposition.

471
City of SLT Financial Policies – Preserving Capital Investments 3 Rev. February 2013

3. Capital Assets Classes
Land
The surface of the earth, which can be used to support structures and roadways. Land is characterized as having an unlimited life (inexhaustible). Includes the cost of land itself and the cost of preparing land for its intended uses. Examples of items that might be capitalized as part of the cost of land include basic site improvements (e.g., excavation, fill, and grading), as well as the cost of removing, relocating, or reconstructing the property of others (e.g., power lines).

Buildings and Building Improvements
A structure that is permanently attached to the land, has a roof, is partially or completely enclosed by walls, and is not intended to be transportable or moveable.

Improvements to existing buildings that materially extend the useful life of a building, increase the value of a building, or both should be capitalized.

The improvement must meet one of the following criteria:
• The improvement adds square footage to the existing building. • The improvement is a major renovation that prepares an existing building for a new use.
• The improvement expenditure increases the life or value of the building by 25 percent of the original life or cost.

The cost of an improvement (or betterment) normally is added to the cost of the related structure, rather than treated as a separate asset.

Examples of expenditures to be capitalized as building improvements are as follows:
• Replacement of an old shingle roof with a new fireproof tile roof • Upgrade of heating and cooling systems
• Structures attached to the building such as covered patios, sunrooms, garages, carports, enclosed stairwells, etc.
• Structural changes such as reinforcement of floors or walls, installation or replacement of beams, joists, steel grids, or other interior framing.

The following are examples of expenditures not to capitalize as improvements to buildings. Instead, these items should be recorded as maintenance expense:
• Adding, removing and/or moving of walls relating to renovation projects that are not considered major rehabilitation projects and do not increase the value or life of the building
472
City of SLT Financial Policies – Preserving Capital Investments 4 Rev. February 2013 • Plumbing or electrical repairs
• Cleaning, pest extermination, or other periodic maintenance • Interior decoration, such as draperies, blinds, curtain rods, wallpaper
• Maintenance-type interior renovation, such as repainting, touch-up, plastering, replacement of carpet, tile, or panel sections; sink and fixture refinishing, etc.
• Maintenance-type exterior renovation such as repainting, replacement of deteriorated siding, roof, or masonry sections • Replacement of a part or component of a building with a new part of the same type and performance capabilities, such as
replacement of an old boiler with a new one of the same type and performance capabilities

Improvements Other Than Buildings
This major asset class is used for permanent (i.e., non-moveable) improvements, other than buildings, that add value to land, but do not have an indefinite useful life. Examples include fences, retaining walls, parking lots, and most landscaping. Moveable items (e.g., picnic table in a park) should be classified as furnishings and equipment.

Vehicles, Machinery, Specialty and Office Equipment
Fixed or movable tangible assets to be used for operations, the benefits of which extend beyond one year from date of acquisition and rendered into service.

Examples of expenditures to be capitalized in this class include but are not limited to:

Vehicles
Computers and servers
Machinery
Furniture and fixtures
Intangible Assets
Intangible assets are characterized as lacking physical form (e.g., computer software, water rights, easements, and patents). Certain intangibles provide benefits indefinitely. In that case, no amortization expense would be recognized. Intangibles with the length of their life limited by contractual or legal provisions should be amortized over the period stated in the provisions.

Easements are interest in land owned by another that entitles its holder to a specific limited use. The estimated value of easements is immaterial and therefore will not be capitalized.
473
City of SLT Financial Policies – Preserving Capital Investments 5 Rev. February 2013 A right-of-way is a type of easement in which title remains with the property owner and therefore is not capitalized.

Infrastructure
Long-lived capital assets that normally are stationary in nature and are of value only to the City. Include, but are not limited to: roads and streets, curbs, gutters, bridges, streetlights, sidewalks, streetscape, bike paths, storm-water drainage improvements, roadway resurfacing, basin and stream environment zone construction, ramps, airfields and runways in Airport Enterprise fund. For the purpose of reporting this major class is separated into subclasses, such as Streets, Bike Paths, Streetscape, Basin and SEZ Construction, and Runways.

Construction in Progress
This major class is used for costs incurred to construct or develop a tangible or intangible capital asset before it is substantially ready to be placed into service. The costs should remain in this category until all retention money has been paid (at which time the asset would be reclassified into the appropriate major class).

B. Capital Assets Accountability and Control
When capital assets are acquired or deeded to the City, copies of related documents shall be routed to the Finance Department in a timely manner to ensure these assets are recorded in the City’s financial records.

Department heads are ultimately responsible for safeguarding its fixed assets from theft or loss. However, the Finance Department does recognize and acknowledge its responsibility to establish and maintain systems and procedures that enable department heads and program managers to properly safeguard their assets.

In general, inventory control is applied only to movable fixed assets (generally these falling into the “Vehicles, Machinery and Equipment” category), and not to land, buildings, or other immovable fixed assets. Fixed assets subject to inventory control will be accounted for and controlled through the same systems and procedures used to account and control fixed assets subject to capitalization.

Fixed assets will be subject to inventory control if they meet at least one (1) of the following criteria:
a. The original cost of the fixed asset is equal to or greater than $57,000 if classified as equipment, $50,000 if classified as buildings or land, or $200,000 if classified as infrastructure.
b. Any asset less than the capitalization threshold, as recommended by the Finance Director. This may include certain machinery and equipment that, due to portability, value outside of the office, or character, are susceptible to theft and/or loss. It may include computer equipment and electronic 474
City of SLT Financial Policies – Preserving Capital Investments 6 Rev. February 2013 devices such as laptops and iphones, guns, weapons, and other movable items. Also included may be any asset requested by a department to be controlled in order to satisfy an internal (operational) or external requirement. For example, the Finance Department (may wish to) tracks all computer hardware in order to establish replacement and upgrade requirements for both hardware and system software.
c. Any asset required to be controlled and separately reported pursuant to grant conditions or any other externally imposed reporting requirement.

The date purchased and cost should be entered when known. If not known, please estimate and mark (est) after the data. It is understood that logistically some items can not be tagged. These items still need to be inventoried and the information maintained in a department file.

Surplus property shall be identified by the department, officially declared to the City Council, and after approval, sold at auction and eliminated from the fixed asset accountability list. Proceeds from sale of surplus property will be allocated to the City’s General fund unless the property was originally purchased with monies from a specific fund, in which case, the proceeds will be returned to that fund.

Accounting for Leases: Leases that do not transfer substantially all the benefits and risks of ownership are operating leases.

Capitalize a lease that transfers substantially all of the benefits and risks of property ownership, provided the lease is non-cancelable (only non-cancelable leases may be capitalized). One or more of four criteria must be met:

1. Transfers ownership to the lessee.

2. Contains a bargain purchase option.

3. Lease term is equal to or greater than 75 percent of the estimated economic life of the leased property.

4. The present value of the minimum lease payments (excluding executor costs) equals or exceeds 90 percent of the fair value of the lease property.

Account Coding: The account coding to be used for the purchase of capital outlay will be as follows:

For items costing $57,000 or more (these are considered Fixed Assets) use:

Object code # 46010 – Land
Object code # 46020 – Buildings and Building Improvements 475
City of SLT Financial Policies – Preserving Capital Investments 7 Rev. February 2013 Object code # 46030 – Improvements Other Than Buildings Object code # 46110 – Machinery & Equipment ($57,000)
Object code # 46122 – Software
Object code # 46130 – Vehicles
Object code # 46140 – Furniture and Fixtures
For items costing less than $57,000 per unit (these are NOT considered Fixed Assets) use:

Object code # 46120 – Tools, Parts and Leases less than $57,000

476
City of SLT Financial Policies – Preserving Capital Investments 8 Rev. February 2013 Attachments:

Exhibit I – Sample of Fixed Asset Addition Form
477
City of SLT Financial Policies – Preserving Capital Investments 1 Rev. February 2013 Financial Policies:

1. The budget should provide sufficient funding for adequate maintenance, renovation and the orderly replacement of capital assets such as equipment, fleet, facilities, streets and parks.

2. All capital assets should be maintained at a level that protects capital investment and minimizes future maintenance and replacement costs.

The Asset Classes and Capitalization Thresholds have been established as follows:

478
City of SLT Financial Policies – Preserving Capital Investments 2 Rev. February 2013

Items to include in the cost of capital asset are as follows:
• Original contract or invoice price
• Freight and transportation charges
• Handling and storage charges
• In-transit insurance charges
• Sales, use, and other taxes imposed on the acquisition • Installation charges
• Charges for testing and preparation for use
• Site preparation costs
• Professional fees
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized.

Donated capital assets are valued at their fair value on the date of donation.

479
City of SLT Financial Policies – Preserving Capital Investments 3 Rev. February 2013

3. Capital Assets Classes
Land
The surface of the earth, which can be used to support structures and roadways. Land is characterized as having an unlimited life (inexhaustible).

Includes the cost of land itself and the cost of preparing land for its intended uses. Examples of items that might be capitalized as part of the cost of land include basic site improvements (e.g., excavation, fill, and grading), as well as the cost of removing, relocating, or reconstructing the property of others (e.g., power lines).

Improvements to existing buildings that materially extend the useful life of a building, increase the value of a building, or both should be capitalized. The improvement must meet one of the following criteria:
• The improvement adds square footage to the existing building. • The improvement is a major renovation that prepares an existing building for a new use.
• The improvement expenditure increases the life or value of the building by 25 percent of the original life or cost.

The cost of an improvement (or betterment) normally is added to the cost of the related structure, rather than treated as a separate asset.

The following are examples of expenditures not to capitalize as improvements to buildings. Instead, these items should be recorded as maintenance expense:
• Adding, removing and/or moving of walls relating to renovation projects that are not considered major rehabilitation projects and do not increase the value or life of the building
480
City of SLT Financial Policies – Preserving Capital Investments 4 Rev. February 2013 • Plumbing or electrical repairs
• Cleaning, pest extermination, or other periodic maintenance • Interior decoration, such as draperies, blinds, curtain rods, wallpaper • Maintenance-type interior renovation, such as repainting, touch-up, plastering, replacement of carpet, tile, or panel sections; sink and fixture refinishing, etc.
• Maintenance-type exterior renovation such as repainting, replacement of deteriorated siding, roof, or masonry sections • Replacement of a part or component of a building with a new part of the same type and performance capabilities, such as replacement of an old boiler with a new one of the same type and performance capabilities

Examples of expenditures to be capitalized in this class include but are not limited to:

Easements are interest in land owned by another that entitles its holder to a specific limited use. The estimated value of easements is immaterial and therefore will not be capitalized.

A right-of-way is a type of easement in which title remains with the property owner and therefore is not capitalized.
481
City of SLT Financial Policies – Preserving Capital Investments 5 Rev. February 2013 Infrastructure
Long-lived capital assets that normally are stationary in nature and are of value only to the City. Include, but are not limited to: roads and streets, curbs, gutters, bridges, streetlights, sidewalks, streetscape, bike paths, storm-water drainage improvements, roadway resurfacing, basin and stream environment zone construction, ramps, airfields and runways in Airport Enterprise fund. For the purpose of reporting this major class is separated into subclasses, such as Streets, Bike Paths, Streetscape, Basin and SEZ Construction, and Runways.

Fixed assets will be subject to inventory control if they meet at least one (1) of the following criteria:
a. The original cost of the fixed asset is equal to or greater than $7,000 if classified as equipment, $50,000 if classified as buildings or land, or $200,000 if classified as infrastructure.
b. Any asset less than the capitalization threshold, as recommended by the Finance Director. This may include certain machinery and equipment that, due to portability, value outside of the office, or character, are susceptible to theft and/or loss. It may include computer equipment and electronic devices such as laptops and iphones, guns, weapons, and other movable items. Also included may be any asset requested by a department to be controlled in order to satisfy an internal (operational) or external 482
City of SLT Financial Policies – Preserving Capital Investments 6 Rev. February 2013 requirement. For example, the Finance Department (may wish to) tracks all computer hardware in order to establish replacement and upgrade requirements for both hardware and system software.
c. Any asset required to be controlled and separately reported pursuant to grant conditions or any other externally imposed reporting requirement.

Procedure: The goal is to tag all fixed assets that fall within the above categories without affecting the functionality or value of the product. Tags should be placed on the back of the equipment, somewhere where they can be found, but not necessarily stand out. The fixed asset addition form (Exhibit I) should be filled out as much as possible. A complete description of the asset should be obtained showing manufacturer, model, serial #, color and any other identifying criteria. The date purchased and cost should be entered when known. If not known, please estimate and mark (est) after the data. It is understood that logistically some items can not be tagged. These items still need to be inventoried and the information maintained in a department file.

Accounting for Leases: Leases that do not transfer substantially all the benefits and risks of ownership are operating leases.

1. Transfers ownership to the lessee.

2. Contains a bargain purchase option.

3. Lease term is equal to or greater than 75 percent of the estimated economic life of the leased property.

4. The present value of the minimum lease payments (excluding executor costs) equals or exceeds 90 percent of the fair value of the lease property.

Account Coding: The account coding to be used for the purchase of capital outlay will be as follows:

For items costing $7,000 or more (these are considered Fixed Assets) use:

Object code # 46010 – Land
Object code # 46020 – Buildings and Building Improvements Object code # 46030 – Improvements Other Than Buildings Object code # 46110 – Machinery & Equipment ($7,000)
Object code # 46122 – Software
Object code # 46130 – Vehicles
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City of SLT Financial Policies – Preserving Capital Investments 7 Rev. February 2013 Object code # 46140 – Furniture and Fixtures
For items costing less than $7,000 per unit (these are NOT considered Fixed Assets) use:

Object code # 46120 – Tools, Parts and Leases less than $7,000

484
City of SLT Financial Policies – Preserving Capital Investments 8 Rev. February 2013 Attachments:

Exhibit I – Sample of Fixed Asset Addition Form
485
City of SLT Financial Policies – Leases and SBITAs August 2023 Financial Policies - Leases and Subscription Based Information Technology Arrangements (SBITAs)
The objective of this policy is to establish guidelines for the recognition, measurement, presentation, and disclosure of leases and Subscription-Based IT Arrangements (SBITAs) in accordance with the requirements of Governmental Accounting Standards Board (GASB) Statement No. 87, Leases, and GASB Statement No. 96, SBITAs.

A. Definitions
Lease: A contract that conveys control of the right to use another entity’s nonfinancial asset (the underlying asset) as specified in the contract for a period of time in an exchange or exchange-like transaction. Examples of nonfinancial assets include buildings, land, vehicles, and equipment. Any contracts that meets this definition should be accounted for under the leases guidance, unless specifically excluded in GASB Statement No. 87.

Lease Term: The period during which a lessee has a noncancelable right to use an underlying asset.

Lessee: The entity that obtains the right to use the leased asset.

Lessor: The entity that owns the leased asset and grants the lessee the right to use the asset.

Lease Liability: The lessee's obligation to make lease payments arising from a lease.

Right-of-Use Asset: An asset that represents a lessee's right to use a leased asset during the lease term.

Subscription-Based Information Technology Arrangement (SBITA): a contract that conveys control of the right to use another party’s (a SBITA vendor’s) IT software, alone or in combination with tangible capital assets (the underlying IT assets), as specified in the contract for a period of time in an exchange or exchange-like transaction.

Subscription Term: Includes the period during which a government has a noncancelable right to use the underlying IT assets.

B. Scope
This policy applies to all leases and subscription-based information technology arrangements entered into by the City of South Lake Tahoe (City), both as a lessee and as a lessor with the following general exceptions:
486
City of SLT Financial Policies – Leases and SBITAs August 2023 Transactions excluded from GASB 87
 Leases for intangibles (including computer software), except for sublease of intangible right-to- use leased asset
 Leases for biological assets
 Leases for inventory
 Leases where underlying asset financed with conduit debt, except for underlying asset and conduit debt reported by lessor
 Service concession agreements
 Supply contracts - electric power purchase agreements  Short-term leases (maximum term 12 months or less, including any options to extend, regardless of their probability of being exercised)  Contracts that transfer ownership of the underlying asset to the lessee Transactions excluded from GASB 96
 Purchases of hardware or software an entity acquires through conventional purchase methods, such as outright purchase, capitalization, or financing arrangements.
 The statement does not apply to internal labor costs incurred by the entity for developing, hosting, or maintaining the software.
 If the arrangement is solely for data storage and does not include software functionality, it is excluded from the scope of GASB 96.

C. Recognition and Measurement:

Leases:

As a lessee, the City shall recognize a lease liability at the commencement of the lease term measured at the present value of payments expected to be made during the lease term. The City shall reduce the lease liability as payments are made and recognize an outflow of resources for interest on the liability. The lease asset shall be measured at the amount of the initial measurement of the lease liability, plus any payments made to the lessor at or before the commencement of the lease term and certain direct costs. The City shall amortize the lease asset over the shorter of the lease term or the useful life of the underlying asset.

As a lessor, the City shall recognize a lease receivable and a deferred inflow of resources at the commencement on the lease term measured at the present value of lease payments expected to be received during the lease term. The deferred inflow of resources shall be measured at the value of the lease receivable plus any payments received at or before the commencement of the lease term that relate to future periods. The City shall recognize interest revenue on the lease receivable and revenue from the deferred inflows of resources over the term of the lease.

Capitalization Threshold for Leases: The materiality threshold for GASB 87 leases has been established at $100,000 for both lessee and lessor activities. 487
City of SLT Financial Policies – Leases and SBITAs August 2023 SBITAs:

The City shall recognize a right-of-use asset and a corresponding liability at the commencement of the subscription term for subscription-based information technology arrangements that meet the definition of a lease as per GASB Statement No. 96. The subscription liability shall be initially measured at the present value of subscription payments expected to be made over the contract term. Future subscription payments shall be discounted using the interest rate the SBITA vendor charges the City, which may be implicit, or the government’s incremental borrowing rate if the interest rate is not readily determinable. The City shall recognize amortization of the discount on the subscription liability as an outflow of resources.

The subscription asset shall be initially measured as the sum of the initial subscription liability amount, payments made to the SBITA vendor before the commencement of the subscription term, and capitalizable implementation costs less any incentives received from the SBITA vendor at or before the commencement of the subscription term. The City shall recognize amortization of the subscription asset as an outflow or resources over the subscription term.

Capitalization Threshold for SBITAs: The materiality threshold for GASB 96 SBITAs has been established at $250,000 or greater in total future lease payments through the SBITA term.

Incremental Borrowing/Implicit Rate: This is an estimate of the interest rate that would be charged for borrowing the lease payment amounts during the lease term.

In most cases, the borrowing rate is not stated in the lease; however, it is implied that there is a cost of borrowing the amounts. Due to the sensitivity of assumptions within the borrowing rate, the City will obtain the 5-, 10-, 20- and 30-year generic rated municipal yields from the City’s Investment Management company as of September 30th to be used for the current fiscal year (e.g., use 9/30/2022 rates for fiscal year 2022/23) for any new eligible GASB 87 leases and lease amendments and GASB 96 SBITAs.

D. Presentation and Disclosure
The City shall ensure the proper presentation of leases and subscription-based information technology arrangements in its financial statements.

In accordance with GASB 87, the notes to the financial statements shall include a description of leasing arrangements, the amount of lease assets recognized, a schedule of future lease payments to be made, and the total inflows of resources recognized from leases.

In accordance with GASB 96, the notes to the financial statements shall disclose descriptive information about its SBITAs such as the amount of the subscription asset, accumulated amortization, other payments not included in the measurement of the subscription liability, principal and interest requirements for the subscription liability, and other essential information.
488
City of South Lake Tahoe
Agenda Item Executive Summary
Joe Irvin, City Manager
__________________________________
Meeting Date: August 8, 2023
Agenda Item #:10
Agenda Item: El Dorado Community Foundation Grant Acceptance Executive Summary: On October 4, 2022, City Council passed a Resolution to accept a donation of $20,000 from El Dorado Community Foundation. The item before City Council is to accept the grant from El Dorado Community Foundation of $20,000 to support the Park Ranger program and to pass a Resolution to amend the FY 22 - 23 Budget to reflect this grant.

Requested Action / Suggested Motions: Pass a Resolution authorizing the City to (1) execute an Agreement for Funding with El Dorado Community Foundation to accept the Foundation's grant in the amount of $20,000, and (2) amend FY 22/23 budget and accept El Dorado Community Foundation's grant of $20,000 into the Parks Maintenance account 100-04170-36280 (Contributions and Donations) designated to sustain the Park Ranger Program.

Responsible Staff Member: John Stark, Director of Parks & Recreation Reviewed and Approved By: Susan Blankenship, City Clerk Olga Tikhomirova, Director of Finance, Heather Stroud, City Attorney
Attachments:
03-Grant Agreement El Dorado Community Foundation.pdf
02-Resolution-El_Dorado_Community_Foundation_Grant_to_the_Park_Ranger_Program__2_ (1).docx
01-Staff_Report_Donation_-_El_Dorado_.docx
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Council Agenda Report- August 8, 2023 Page 1 of 2
City of South Lake Tahoe
Report to City Council
Meeting Date: August 8, 2023
Title: Resolution to Accept a Grant of $20,000 from the El Dorado Community Foundation to support the Park Ranger Program
Location: Parks and Recreation Department, Park Ranger Program Responsible Staff Member: John Stark, Director of Parks & Recreation 530-542-6197 Background: In 2021, the City embarked on a pilot program to place youth ambassadors in city parks to interact with park users and promote good stewardship to help preserve and protect the environment. In 2022, the city partnered with Lake Tahoe Unified School District to identify the program as part of a workforce development initiative and rebrand the ambassador program as a City managed Park Ranger Program. The intent of the new program was two-fold: 1) To provide job opportunities to local youth and inspire career pathways in natural sciences, environment, sustainable recreation, and park management. 2) To directly interact with park users to educate and inform the public on best practices, park rules, waste management, history, culture and general information. The new program has qualified for pass through grant funding from LTUSD to fund the cost of a Park Ranger Program Coordinator. The Memorandum of Understanding with LTUSD was adopted by City Council on August 9, 2022. On October 4, 2022, City Council passed a Resolution to accept a donation of $20,000 from El Dorado Community Foundation designated to help sustain the Park Ranger Program for 2022-2023 period and implement the program objectives.

On June 13, 2023, El Dorado Community Foundation offered the City a grant in the amount of $20,000 designated to sustain the Park Ranger Program for 2023-2024 period. The item before City Council is to accept the grant from El Dorado Community Foundation of $20,000 to support the Park Ranger program for the period from July 2023 to June 2024 and to pass a Resolution to amend the City’s FY 22 - 23 Budget to reflect this grant.

Issue and Discussion: The item before City Council is to accept the grant from El Dorado Community Foundation.

Financial Implications: Authorizes the City to accept the grant from El Dorado Community Foundation in an amount of $20,000 restricted to the Park Ranger Program into the Parks Maintenance account 100-04170-36280 (Contributions and Donations) designated to sustain the Park Ranger Program.

Environmental Considerations: The resolution authorizing the grant award is not a project under CEQA, because it does not involve any commitment to a specific project which may result in a potentially significant physical impact on the environment, as contemplated by Title 14, California 490
Council Agenda Report- August 8, 2023 Page 2 of 2
Code of Regulations, Section 15378(b)(2) and 15378(b)(4) and is, therefore, not subject to CEQA pursuant to CEQA Guidelines Section 15060(c)(3).

Policy Implications: Per Financial Management – Donation policy approved by City Council on September 6, 2022, establish a process for soliciting and accepting contributions, donations, and sponsorships in a manner consistent with Government Accounting Standards. 491
Resolution 2023-XXX August 8, 2023 Page 1 of 2
Resolution 2023-XXX
Adopted by the City of South Lake Tahoe
City Council
August 8, 2023
Authorizing Acceptance of $20,000 Grant from El Dorado Community Foundation designated for the Park Ranger Program

BACKGROUND
A. In Summer 2021, the City collaborated with Lake Tahoe Unified School District (LTUSD), Lake Tahoe Community College (LTCC), and Sierra Nevada Alliance (SNA) to implement a pilot program on city parks and beaches called the Youth Ambassador Program.

B. In Fall 2021, the City and LTUSD established a park ranger program to replace the ambassador program and integrate the program into the City Parks and Recreation Services as part of a workforce development strategy.

C. On January 1, 2022, LTUSD was awarded a Strong Workforce grant in the amount of $688,220 to develop concentrator and completer course for the CTE Forestry and Natural Resources Pathway to attract more diverse student enrollment by use of varied learning experiences. The City is a collaborative partner in the grant award and partners with South Tahoe High School to provide work-based learning opportunities by offering full-time seasonal jobs as Park Stewards.

D. On August 9, 2022, the City and LTUSD entered into a Memorandum of Understanding to continue the Park Ranger Program including authorizing $67,000 of pass through grant funding toward the Park Ranger Program Coordinator salary.

E. On September 3, 2022, El Dorado Community Foundation offered the City a $20,000 cash donation designated to help sustain the Park Ranger Program.

F. On October 4, 2022, City Council authorized acceptance of the $20,000 cash donation designated to help sustain the Park Ranger Program for 2022-2023 period.

G. On June 13, 2023, El Dorado Community Foundation offered the City a grant in the amount of $20,000 designated to sustain the Park Ranger Program for 2023-2024 period. 492
Resolution 2023-XXX August 8, 2023 Page 2 of 2
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, BE IT RESOLVED, that the City Council of the City of South Lake Tahoe:

1. Authorizes the City to amend FY 22/23 budget and accept El Dorado Community Foundation’s grant in the amount of $20,000 into the Parks Maintenance account 100- 04170-36280 (Contributions and Donations) designated to sustain the Park Ranger Program.

2. Authorizes the City to execute an Agreement for Funding with El Dorado Community Foundation to accept the Foundation’s grant in the amount of $20,000.

Adopted by the City of South Lake Tahoe City Council on August 8, 2023 by the following vote:

Yes:

No:

Absent:

Abstain:
________________________ Date:_________
Cristi Creegan, Mayor
Attest:
________________________
Susan Blankenship, City Clerk
The presence of electronic signature certifies that the foregoing is a true and correct copy as approved by the South Lake Tahoe City Council.
493
494
City of South Lake Tahoe
Agenda Item Executive Summary
Joe Irvin, City Manager
__________________________________
Meeting Date: August 8, 2023
Agenda Item #:11
Agenda Item: Professional Services Agreement with CentralSquare Technologies LLC. to provide property information and permit management software and Professional Services Agreement with HdL Companies to provide business licensing and transient occupancy tax administration software.

Executive Summary: The City is proposing to replace and upgrade its CommunityPLUS software to increase efficiency of permit application processing, improve document management and retrieval, provide real time workflow data and status, integrate with other software systems, and provide a public portal for application submittal and real time status information. After conducting an evaluation of proposals, City staff is recommending a service contract with CentralSquare Technologies LLC to provide Community Development permitting software and a service contract with HdL Companies to provide business license and Transient Occupancy Tax license and revenue management.

Requested Action / Suggested Motions: Pass a resolution: (1) authorizing and directing the City Manager to execute the Software and Professional Services Agreement with CentralSquare Technologies, LLC in the amount of $279,475 including one-time implementation cost and first year annual maintenance fee of $72,600 (subject to 3% increase for year two, 4% for year three and 5% year over year thereafter) for Community Development Software Implementation for the five year initial term which will automatically renew for additional successive one year terms thereafter; (2) authorizing corresponding budget appropriations transferring a total of $279,475 from Long Term Building Permit Fees account 271-03110-50014 into Software/Hardware Capital Project account 301-70008-46122; and (3) authorizing and directing the City Manager to execute the Software and Professional Services Agreement with HdL in the amount of $76,500 for one-time implementation cost and $22,000 for first year annual subscription fee for Prime Cloud Software Implementation for twelve months initial term which will automatically renew for successive twelve months terms thereafter.

Responsible Staff Member: Hilary Roverud, Director of Development Services, Olga Tikhomirova, Director of Finance
Reviewed and Approved By: Susan Blankenship, City Clerk Heather Stroud, City Attorney Attachments:
02-Resolution-Revenue_Software_purchase.docx
03-Central_Square_Agreement.docx
04-HdL PSA and Agreement.pdf
01-Staff_Report_-_Revenue_Software_Purchase_and_Solutions_Agreement.docx 495
City Council Agenda Report August 8, 2023 Page 1 of 4
City of South Lake Tahoe
Report to City Council
Meeting Date: August 8, 2023
Title: Professional Services Agreement with CentralSquare Technologies LLC. to provide property information and permit management software and Professional Services Agreement with HdL Companies to provide business licensing and transient occupancy tax administration software.

Location: Citywide
Responsible Staff Members: Hilary Roverud, Director of Development Services Olga Tikhomirova, Director of Finance
Background: The City Strategic Plan includes a strategic priority to “utilize modern technology to do more work digitally in order to improve efficiency and access to services.” Implementation of this priority includes upgrading the City’s current “CommunityPLUS permit tracking software to provide robust opportunities to increase workflow efficiencies and provide customer access to real time status and permit information.” The City currently utilizes CommunityPLUS version 9.1 (SunGard Public Sector, currently CentralSquare) to track planning and building permit applications, business licenses, inspections, application review, permit fees, building code enforcement cases, land data, and related entity information. The CommunityPLUS software has been used by the City for over 20 years and has become outdated, is no longer supported with security or functional upgrades, and does not provide many service features available with modern software. Modern software systems commonly utilized by cities and counties can provide increased efficiency of permit application processing, improved document management and retrieval, real time workflow data and status, integrates with other software systems, and provides a public portal for application submittal and real time status information.

Issue and Discussion: In January the City initiated a Request for Proposals process to evaluate proposed software upgrade solutions and received nine proposals. A committee of City staff from Development Services, Finance, and Information Technology evaluated each proposal and selected four vendors to be invited to a demonstration and interview. City staff also contacted current clients of each of the vendors to solicit feedback on the effectiveness of the software and customer service. Ultimately, CentralSquare Technologies LLC was selected as the recommended vendor for property management and permit tracking and HdL was selected for business licensing and transient occupancy tax payments management. The primary reason 496
City Council Agenda Report August 8, 2023 Page 2 of 4
for selecting two different software solutions is that the CentralSquare’s solution does not offer the transient occupancy tax administration module.

CentralSquare’s Community Development software provides integrated property management and permit tracking features including:
 Cloud hosted data storage, management and security
 Property data management
 GIS Integration
 Online citizen portal
 Online public portal for application submittal and information retrieval  Permit application and digital review tracking
 Inspection tracking and mobile (in the field) data entry  Central entity directory and accounts for architects, engineers and contractors  Customer service response management
 User dashboards for real time workflow management
This software solution will offer advanced features and functionalities, allowing us to improve the overall management of development projects and expedite the permit issuance process. By implementing this software, staff aims to enhance customer service, reduce processing times, and provide a seamless experience for our community members. The upgrade of the permitting side of the CommunityPLUS to CentralSquare’s Community Development is estimated to take approximately 12 months from the initiation phase.

HdL has performed software installations for over 200 City business licenses tax departments in California. HdL’s Prime local tax software provides a business licensing and transient occupancy tax administration solution that includes:
 Business license fee collection and renewal processing  Transient Occupancy tax assessment and collection
 Online services including reporting, application, renewal and payment processing  Streamlined workflow to coordinate communication with various departments  Additional taxes/assessments and collection
 Optional monitoring and auditing license activity and transient occupancy tax payments HdL has 40 years of experience providing revenue management and consulting services to local government and is highly unique as a municipal software provider, offering top tier municipal finance expertise, services and support, in addition to the software solution. The upgrade of business license and transient occupancy tax side of the CommunityPLUS is estimated to take approximately 3 months.
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Financial Implications: One-time costs for implementation of CentralSquare's Community Development software totals $206,875.00 and the first year subscription fee is $72,600.00 with 3% increase in year two, 4% for year three and 5% year over year thereafter for a total subscription cost over five years of $392,545. These expenses will be paid utilizing revenues generated from building permit fees. Use of building permit fees to improve permitting services is consistent with CA Government Code Section 66020 which requires a nexus between the amount of fees collected and services provided. The accompanying resolution appropriates budget for one-time implementation cost and the first year subscription fee transferring a total of $279,475 from Long Term Building Permit Fees account 271-03110 into Software/Hardware Capital Project account 301-70008. The future annual subscription fees of $72,600 (plus increases) during the initial five year term and thereafter will be budgeted for annually in the Long Term Building Permit Fee operating account 271-03710-46122 Software Purchases One-time costs for implementation of HdL software total $76,500 and annual subscription fees total $22,000 subject to CPI increase starting January 1, 2025 equal to the greater of two percent (2%) or the actual CPI Change and the lesser of ten percent (10%) or the actual CPI Change, as outlined in section 6.2.1 of the attached HdL Master Services Agreement Schedule Z.

Funding for one-time software implementation costs is available in the current fiscal year’s 2022/23 General Fund Revenue division operating budget account 100-01730-46122. The annual fee will be budgeted for in the appropriate fiscal year in Information Technology account 100-01840-42030 Technical Services.

As part of the online payment processing services, HdL offers two payment models – taxpayer funded model (convenience fee) and Client funded interchange pass-through model. Based on the increasing volume of high dollar credit card transactions and in keeping with City Council’s general direction to provide cost recovery, it is staff’s recommendation that the customer pay a convenience fee (as a service fee), rather than the City absorbing the fee. Selecting this option is also consistent with Council approval of another contract (Paymentus in February 2020) and the convenience fee model that was anticipated to be expanded to other City departments at that time. The service fee will be charged directly by the HdL’s payment processor, FIS, when the customer completes an online credit/debit card transaction. The City will never handle the fee, receiving only the actual amount paid toward the fees and tax revenue. If a customer does not wish to pay the 2.99% service fee, the online customer will now have the option to pay with an e-check at a flat fee of $1.25 per e-check. Paying with checks or cash over the counter or by mail will not incur any fees.

For the permitting software, staff will be looking to implement CentralSqure’s payment portal which also includes two different payment models. Staff is recommending selecting a convenience fee model.

HdL’s optional services consist of transient occupancy tax audits with a cost of $2,150 per audit and business license compliance services with a fee of 40% of all collected revenues. Once the 498
City Council Agenda Report August 8, 2023 Page 4 of 4
software is implemented, staff will review the need for these services and will bring the proposal to City Council with a defined scope of audit work.

Environmental Considerations: This action is not a project requiring review under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines section 15378(b)(5) (organizational or administrative activities that will not result in direct or indirect physical changes in the environment).

Policy Implications: This action is consistent with Strategic Plan Action Item 5.2.1, Upgrade the CommunityPLUS permit tracking software to provide robust opportunities to increase workflow efficiencies and provide customer access to real time status and permit information.
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Resolution 2023-XXX August 8, 2023 Page 1 of 2
Resolution 2023-XXX
Adopted by the City of South Lake Tahoe
City Council
August 8, 2023
Authorizing the Execution of Professional Services Agreement with CentralSquare Technologies, LLC for Community Development Permit Tracking Software and Corresponding Budget Appropriations, and Authorizing the Execution of Professional Services Agreement with HdL for Business Licensing and Transient Occupancy Tax Administration Software

BACKGROUND
A. The City Strategic Plan includes a strategic priority to “utilize modern technology to do more work digitally in order to improve efficiency and access to services”.

B. Implementation of this priority includes upgrading the City’s current “CommunityPLUS permit tracking software to provide robust opportunities to increase workflow efficiencies and provide customer access to real time status and permit information.” C. The Development Services and Finance departments have solicited proposals to evaluate proposed software upgrade solutions.

D. A committee of City staff evaluated nine proposals and ultimately selected CentralSquare Technologies, LLC as the recommended vendor for property management and permit tracking solutions with total one-time implementation costs of $206,875 and first year annual maintenance fees of $72,600; and HdL as the recommended vendor for business licensing and transient occupancy tax payments administration with total one-time implementation costs of $76,500 and annual subscription fees of $22,000. Both annual fees are subject to percent increases as outlined in the contracts.

E. Sufficient operating budget is available for the one-time software implementation costs of HdL software. Each software’s annual fee is or will be budgeted for in the operating accounts in the appropriate fiscal year.

BASED ON THE FACTS SET FORTH IN THE BACKGROUND, BE IT RESOLVED, that the City Council of the City of South Lake Tahoe:

1. Authorizes and directs the City Manager to execute the Software and Professional Services Agreement with CentralSquare Technologies, LLC in the amount of $279,475 including one-time implementation cost and first year annual maintenance fee of $72,600 (subject to 3% increase for year two, 4% for year three and 5% year over year thereafter) for Community Development Software Implementation for the five year initial term which will automatically renew for additional successive one year terms thereafter . 500
Resolution 2023-XXX August 8, 2023 Page 2 of 2

2. Authorizes the following budget appropriations for implementation cost and first year annual fee for Community Development Permit Tracking Software:

From: Source: Amount
271-03110-50014 Building Permit Fee-LongTerm $279,475
To: Task
301-70008-46122 Software Purchases/Upgrades $279,475

3. Authorizes and directs the City Manager to execute the Software and Professional Services Agreement with HdL in the amount of $76,500 for one-time implementation cost and $22,000 for first year annual subscription fee for Prime Cloud Software Implementation for twelve (12) months initial term which will automatically renew for successive twelve months terms thereafter.

Adopted by the City of South Lake Tahoe City Council on August 8, 2023 by the following vote:

Yes:

No:

Absent:

Abstain:
_____________________________ Date:____________
Cristi Creegan, Mayor
Attest:
____________________________
Susan Blankenship, City Clerk
The presence of electronic signature certifies that the foregoing is a true and correct copy as approved by the South Lake Tahoe City Council.
501
CentralSquare Solutions Agreement
This CentralSquare Solutions Agreement (the "Agreement"), effective as of ___________, 2023 (the "Effective Date"), is entered into between CentralSquare Technologies, LLC with its principal place of business in Lake Mary, FL ("CentralSquare") and City of South Lake Tahoe, CA ("Customer"), together with CentralSquare, the "Parties", and each, a "Party".

WHEREAS, Customer entered into a prior agreement for Software products with Superion, LLC as successor in interest to Sungard Public Sector (Superion) a CentralSquare Technologies, LLC company; and WHEREAS, Customer is a currently licensed end user of the Superion Software; and WHEREAS, through asset purchase, CentralSquare is the owner of all Superion Software products, services, and contractual obligations; and
WHEREAS, Customer desires to discontinue use of the Superion Community PLUS Software products and upgrade to the CentralSquare Software solution identified in Exhibit 1 to this Agreement and discontinue use of the Superion Software product Community Plus upon Delivery; and
WHEREAS, this Agreement shall replace and supersede any and all prior agreements directly related to the Superion Software product CommunityPLUS being replaced by this Agreement.

WHEREAS, CentralSquare licenses and gives access to certain software applications (“Solutions”) to its customers and also provides maintenance, support, migration, installation and other professional services; and WHEREAS, Customer desires to license and/or gain access to certain Solutions and receive professional services described herein, and CentralSquare desires to grant and provide Customer license and access to such offerings as well as to provide support and maintenance, subject to the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants, terms, and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, by the signatures of their duly authorized representative below, the Parties intending to be legally bound, agree to all of the following provisions and exhibits of this Agreement:

CentralSquare Technologies, LLC City of South Lake Tahoe 1000 Business Center Drive
Lake Mary, FL 32746
1901 Lisa Maloff Road
Suite #210,
South Lake Tahoe, CA , 96150
By: \Signature2\ By: \Signature1\
Print Name: \FullName2\ Print Name: Joseph Irvin
Print Title: \Title2\ Print Title: City Manager
Date Signed: \DateSigned2\ Date Signed: \DateSigned1\
Solution: PA Community Development Modification from PLUS Term.

Initial Term. The Initial Term of this Agreement commences as of the Effective Date and will continue in effect for five (5) year(s) from such date unless terminated earlier pursuant to any of the Agreement’s express provisions (the “Initial Term”).

Renewal Term. This Agreement will automatically renew for additional successive one (1) year terms unless earlier terminated pursuant to any of the Agreement’s provisions (a “Renewal Term” and, collectively, with the Initial Term, the “Term”).

Non-Renewal. Either Party may elect to end renewal of the Agreement by issuing a notice of non-renewal, in writing, to the other Party six (6) months prior to the expiration of the Agreement term.

Fees.

In consideration of the rights and services granted by CentralSquare to Customer under this Agreement, Customer shall make payments to CentralSquare pursuant to the amounts and payment terms outlined in Exhibit 1 (the Solution(s) and Services Fee Schedule).

All invoices shall be billed and paid in U.S. dollars (USD) and in accordance with the terms set forth in Exhibit 1. If Customer delays an invoice payment for any reason, Customer shall promptly notify CentralSquare in writing the reasons for such delay. Unless otherwise agreed by both Parties, CentralSquare may apply any payment received to any delinquent amount outstanding. 502
Standard Terms and Conditions

1. Definitions. Capitalized terms not otherwise defined in this Agreement have the meanings set forth below:

1.1. "Affiliate" means any other Entity that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Entity.

1.2. "Authorized User" means Customer's employees, consultants, contractors, and agents who are authorized by Customer to access and use the Solutions pursuant to this Agreement, and for whom access to the Solutions has been purchased.

1.3. “Baseline Solution” means the version of a Solution updated from time to time pursuant to CentralSquare’s warranty services and maintenance, but without any other modification.

1.4. "CentralSquare Systems" means the information technology infrastructure used by or on behalf of CentralSquare to deliver the Solutions, including all computers, software, hardware, databases, electronic systems (including database management systems), and networks, whether operated directly by CentralSquare or through the use of third-party services.

1.5. "Customer Data" means information, data, and content, in any form or medium, collected, downloaded, or otherwise received, directly or indirectly from Customer, an Authorized User or end-users by or through the Solutions, provided the data is not personally identifiable and not identifiable to Customer.

1.6. "Customer Systems" means the Customer's information technology infrastructure, including computers, software, hardware, databases, electronic systems (including database management systems), and networks, whether operated by Customer or through the third-party services.

1.7. “Defect” means a material deviation between the Baseline Solution and its Documentation, for which Customer has given CentralSquare sufficient information to enable CentralSquare to replicate the deviation on a computer configuration that is both comparable to the Customer Systems and that is under CentralSquare’s control. Further, with regard to any custom modification, Defect means a material deviation between the custom modification and the CentralSquare generated specification and Documentation for such custom modification, and for which Defect Customer has given CentralSquare sufficient information to enable CentralSquare to replicate the deviation on a computer configuration that is both comparable to the Customer Systems and that is under CentralSquare’s control.

1.8. “Delivery” means:

1.8.1. For on-premise Solutions, Delivery shall be when CentralSquare delivers to Customer the initial copies of the Solutions outlined in Exhibit 1 by whichever the following applies and occurs first (a) electronic delivery, by posting it on CentralSquare’s network for downloading, or similar suitable electronic file transfer method, or (b) physical shipment, such as on a disc or other suitable media transfer method, or (c) installation, or (d) delivery of managed services server. Physical shipment is on FOB - CentralSquare’s shipping point, and electronic delivery is at the time CentralSquare provides Customer with access to download the Solutions.

1.8.2. For cloud-based Solutions Delivery shall be whichever the following applies and occurs first when Authorized Users have (a) received log-in access to the Solution or any module of the Solution or (b) received access to the Solution via a URL.

1.9. "Documentation" means any manuals, instructions, or other documents or materials that CentralSquare provides or makes available to Customer in any form or medium and which describe the functionality, components, features, or requirements of the Solution(s), including any aspect of its installation, configuration, integration, operation, use, support, or maintenance.

1.10. “Entity” means an individual, corporation, partnership, joint venture, limited liability entity, governmental authority, unincorporated organization, trust, association, or other organization.

1.11. “Hardware” means any equipment, computer systems, servers, storage devices, peripherals, and any other tangible assets purchased under this Agreement.

1.12. "Intellectual Property Rights" means any and all registered and unregistered rights granted, applied for, or otherwise now or hereafter in existence under or related to any patent, copyright, trademark, trade secret, database protection, or other intellectual property rights laws, and all similar or equivalent rights or forms of protection, in any part of the world.

1.13. “Managed Services Hardware” means any equipment, computer systems, servers, peripherals, and any other tangible asset purchased as a subscription under this Agreement.

1.14. “Maintenance” means optimization, error correction, modifications, and Updates (defined herein) to CentralSquare Solutions to correct any known Defects and improve performance. Maintenance will be provided for each Solution, the hours and details of which are described in Exhibit 2 (Maintenance and Support)

1.15. “New or Major Releases” means new versions of a Baseline Solution (e.g., version 4.0, 5.0 etc.) not provided as part of Maintenance.

1.16. "Personal Information" means any information that does or can identify a specific individual or by or from which a specific individual may be identified, contacted, or located. Personal Information includes all "nonpublic personal 503
information" as defined under the Gramm-Leach-Bliley Act, "protected health information" as defined under the Health and Insurance Portability and Accountability Act of 1996, "Personal Data" as defined in the EU General Data Protection Regulation (GDPR 2018), "Personal Information" as defined under the Children's Online Privacy Protection Act of 1998, and all rules and regulations issued under any of the foregoing.

1.17. “Professional Services” means configuration, installation, implementation, development work, training or consulting services including custom modification programming, support relating to custom modifications, on-site support services, assistance with data transfers, system restarts and reinstallations provided by CentralSquare.

1.18. “Software” means the software program(s) (in object code format only) identified on Exhibit 1 (Solution(s) and Services Fee Schedule). The term “Software” excludes any Third-Party Software.

1.19. “Software Version” means the base or core version of the Solution Software that contains significant new features and significant fixes and is available to the Customer. The nomenclature used for updates and upgrades consists of major, minor, build, and fix and these correspond to the following digit locations of a release, a,b,c,d. An example of which would be 7.4.1.3, where the 7 refers to the major release, the 4 refers to the minor release, the 1 refers to the build, and the 3 refers to a fix.

1.20. "Solutions" means the software, Documentation, development work, CentralSquare Systems and any and all other information, data, documents, materials, works, and other content, devices, methods, processes, hardware, software, technologies and inventions, including any deliverables, technical or functional descriptions, requirements, plans, or reports, provided or used by CentralSquare or any Subcontractor in connection with Professional Services or Support Services rendered under this Agreement.

1.21. “Support Services” means Maintenance, Enhancements, implementation of New Releases, and general support efforts to respond to incidents reported by Customer in accordance with Exhibit 2 (Maintenance & Support).

1.22. "Third-Party Materials" means materials and information, in any form or medium, including any software, documents, data, content, specifications, products, related services, equipment, or components of or relating to the Solutions that are not proprietary to CentralSquare.

2. License, Access, and Title.

2.1. License Grant. For any Solution designated as a “license” on Exhibit 1, Customer is granted a perpetual (unless terminated as provided herein), nontransferable, nonexclusive right and license to use the Software for Customer’s own internal use for the applications described in the Statement of Work, in the applicable environment (e.g., production, test, training, or disaster recovery system) and in the quantity set forth in Exhibit 1. Additional software licenses purchased after the execution of this Agreement shall also be licensed in accordance with the provisions of this section.

Customer shall not use, copy, rent, lease, sell, sublicense, modify, create derivative works from/of, or transfer any software, or permit others to do said acts, except as provided in this Agreement. Any such unauthorized use shall be void and may result in immediate and automatic termination of the applicable license. In such event, Customer shall not be entitled to a refund of any license fees paid. Notwithstanding, Customer shall be entitled to use software at the applicable designated location for the purpose of the application(s) described in the Statement of Work to provide services for itself and other Affiliate governmental agencies/entities, provided that the Software is installed and operated at only one physical location. The Software license granted in this Agreement or in connection with it are for object code only and do not include a license or any rights to source code whatsoever.

2.2. Access Grant. For any Solution designated as a “subscription” on Exhibit 1, so long as subscription fees are paid and current, (unless terminated as provided herein), Customer is granted a nontransferable, nonexclusive right to use the software for the Customer’s own internal use for the applications described in the Statement of Work, in the applicable environment (e.g., production, test, training, or disaster recovery system) and in the quantity set forth in Exhibit 1.

Additional CentralSquare software subscriptions purchased after the execution of this Agreement shall also be accessed in accordance with the provisions of this section. Customer shall not use, copy, rent, lease, sell, sublicense, modify, create derivative works from/of, or transfer any software, or permit others to do said acts, except as provided in this Agreement. Any such unauthorized use shall be void and may result in immediate and automatic termination of the applicable access. In such event, Customer shall not be entitled to a refund of any subscription fees paid.

Notwithstanding, Customer shall be entitled to use software at the applicable designated location for the purpose of the application(s) described in the Statement of Work to provide services for itself and other Affiliate governmental agencies/entities. The subscription access granted in this Agreement or in connection with it are for object code only and do not include a license or any rights to source code whatsoever.

2.3. Documentation License. CentralSquare hereby grants to Customer a non-exclusive, non-sublicensable, nontransferable license to use the Documentation during the Term solely for Customer's internal business purposes in connection with its use of the Solutions.

2.4. Hardware (If Applicable). Subject to the terms and conditions of this Agreement, CentralSquare agrees to deliver, through hardware vendors, the Hardware itemized on Exhibit 1. The risk of loss or damage will pass to Customer upon the date of delivery to the Customer specified facility. Upon delivery and full satisfaction of the Hardware payment obligations, Hardware shall be deemed accepted and Customer will acquire good and clear title to Hardware. All Hardware manufacturer warranties will be passed through to Customer. CentralSquare expressly disclaims, and 504
Customer hereby expressly waives all other Hardware warranties, express or implied, without limitation, warranties of merchantability and fitness for a particular purpose.

2.5. Managed Services Hardware (If Applicable). Subject to the terms and conditions of this Agreement, CentralSquare agrees to deliver the Managed Services Hardware itemized on Exhibit 1. So long as the applicable subscription fees are paid and current, Customer shall maintain a limited right in possessory interest in the Managed Services Hardware.

No title in the Managed Services Hardware will pass to Customer at any time or for any reason. Customer agrees to maintain adequate insurance against fire, theft, or other loss for the Managed Services Hardware full insurable value.

2.6. Reservation of Rights. Nothing in this Agreement grants any right, title, or interest in or to any Intellectual Property Rights in or relating to the Solutions, or Third-Party Materials, whether expressly, by implication, estoppel, or otherwise.

All right, title, and interest in the Solutions, and the Third-Party Materials are and will remain with CentralSquare and the respective rights holders.

3. Use Restrictions. Authorized Users shall not:

3.1. copy, modify, or create derivative works or improvements of the Solutions, or rent, lease, lend, sell, sublicense, assign, distribute, publish, transfer, or otherwise make available any Solutions to any Entity, including on or in connection with the internet or any time-sharing, service bureau, software as a service, cloud, or other technology or service;

3.2. reverse engineer, disassemble, decompile, decode, adapt, or otherwise attempt to derive or gain access to the source code of the Solutions, in whole or in part;

3.3. bypass or breach any security device or protection used by Solutions or access or use the Solutions other than by an Authorized User through the use of his or her own then valid access;

3.4. input, upload, transmit, or otherwise provide to or through the CentralSquare Systems, any information or materials that are unlawful or injurious, or contain, transmit, or activate any harmful code (any software, hardware, device, or other technology, including any virus, worm, malware, or other malicious computer code, the purpose or effect of which is to (a) permit unauthorized access to, or to destroy, disrupt, disable, distort, or otherwise harm or impede any (i) computer, software firmware, hardware, system or network; or (ii) any application or function of any of the foregoing or the security, integrity, confidentiality, or use of any data processed thereby; or (b) prevent Customer or any Authorized User from accessing or using the Solutions as intended by this Agreement;

3.5. damage, destroy, disrupt, disable, impair, interfere with, or otherwise impede or harm in any manner the CentralSquare Systems, or CentralSquare's provision of services to any third-party, in whole or in part;

3.6. remove, delete, alter, or obscure any trademarks, specifications, Documentation, warranties, or disclaimers, or any copyright, trademark, patent, or other intellectual property or proprietary rights notices from any Documentation or Solutions, including any copy thereof;

3.7. access or use the Solutions in any manner or for any purpose that infringes, misappropriates, or otherwise violates any Intellectual Property Right or other right of any third-party, or that violates any applicable law;

3.8. access or use the Solutions for purposes of competitive analysis of the Solutions, the development, provision, or use of a competing software service or product or any other purpose that is to CentralSquare's detriment or commercial disadvantage or otherwise access or use the Solutions beyond the scope of the authorization granted in Section 2.

4. Audit.

4.1. CentralSquare shall have the right to audit Customer’s use of the Software to monitor compliance with this Agreement.

Customer shall permit CentralSquare and its directors, officers, employees, and agents to have on-site access at Customer’s premises (or remote access as the case may be) during normal business hours to such systems, books, and records for the purpose of verifying license counts, access counts, and overall compliance with this Agreement.

Customer shall render reasonable cooperation to CentralSquare as requested. If as a result of any audit or inspection CentralSquare substantiates a deficiency or non-compliance, or if an audit reveals that Customer has exceeded the restrictions on use, Customer shall promptly reimburse CentralSquare for all its costs and expenses incurred to conduct such audit or inspection and be required to pay for any delinquencies in compliance and prompt payment of any underpayment of Fees.

5. Customer Obligations.

5.1. Customer Systems and Cooperation. Customer shall at all times during the Term: (a) set up, maintain, and operate in good repair all Customer Systems on or through which the Solutions are accessed or used; (b) provide CentralSquare Personnel with such access to Customer's premises and Customer Systems as is necessary for CentralSquare to perform the Support Services in accordance with the Support Standards and specifications and if required by CentralSquare, remote access in accordance with Exhibit 3 (CentralSquare Access Management Policy); and (c) provide all cooperation as CentralSquare may reasonably request to enable CentralSquare to exercise its rights and perform its obligations under this Agreement.

5.2. Effect of Customer Failure or Delay. CentralSquare is not responsible or liable for any delay or failure of performance caused in whole or in part by Customer's delay in performing, or failure to perform, any of its obligations under this Agreement.
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5.3. Corrective Action and Notice. If Customer becomes aware of any actual or threatened activity prohibited by Section Error! Reference source not found., Customer shall, and shall cause its Authorized Users to, immediately: (a) take all reasonable and lawful measures within their respective control that are necessary to stop the activity or threatened activity and to mitigate its effects (including, where applicable, by discontinuing and preventing any unauthorized access to the Solutions and permanently erasing from their systems and destroying any data to which any of them gained unauthorized access); and (b) notify CentralSquare of any such actual or threatened activity.

5.4. Maintaining Current Versions of CentralSquare Solutions. In accordance with Exhibit 2 (Maintenance & Support), Customer shall install and/or use any New or Major Release within one year of being made available by CentralSquare to mitigate a performance problem, ineligibility for Support Services, or an infringement claim.

6. Professional Services.

6.1. Compliance with Customer Policies. While CentralSquare personnel are performing services at Customer's site, CentralSquare personnel will comply with Customer’s reasonable procedures and site policies that are generally applicable to Customer’s other suppliers providing similar services and that have been provided to CentralSquare in writing or in advance.

6.2. Contributed Material. In the process of CentralSquare’s performing Professional Services, Customer may, from time to time, provide CentralSquare with designs, plans, or specifications, improvements, works or other material for inclusion in, or making modifications to, the Solutions, the Documentation or any other deliverables (“Contributed Material”).

Customer grants to CentralSquare a nonexclusive, irrevocable, perpetual, transferable right, without the payment of any royalties or other compensation of any kind and without the right of attribution, for CentralSquare, CentralSquare’s Affiliates and CentralSquare’s licensees to make, use, sell and create derivative works of the Contributed Material.

7. Confidentiality.

7.1. Nondisclosure. The Parties agree, unless otherwise provided in this Agreement or required by law including but not limited to the California Public Records Act, not to use or make each other's Confidential Information available to any third party for any purpose other than as necessary to perform under this Agreement. “Confidential Information” means the Solution(s), Software, and customizations in any embodiment, and either Party’s technical and business information relating to inventions or software, research and development, future product specifications, engineering processes, costs, profit or margin information, marketing and future business plans as well as any and all internal Customer and employee information, and any information exchanged by the Parties that is clearly marked with a confidential, private or proprietary legend or which, by its nature, is commonly understood to be confidential.

7.2. Exceptions. A Party's Confidential Information shall not include information that: (a) is or becomes publicly available through no act or omission of the recipient; (b) was in the recipient’s lawful possession prior to the disclosure and was not obtained by the recipient either directly or indirectly from the disclosing Party; (c) is lawfully disclosed to the recipient by a third party without restriction on recipient’s disclosure, and where recipient was not aware that the information was the confidential information of discloser; (d) is independently developed by the recipient without violation of this Agreement; or (e) is required to be disclosed by law including but not limited to the California Public Records Act. If a request for public information is received by the Customer with respect to CentralSquare’s confidential information, including but not limited to the CentralSquare software and documentation, that CentralSquare be notified of such request and afforded the opportunity to oppose release (if necessary) in accordance with applicable Public Records laws or ordinances.

8. Security.

8.1. CentralSquare will implement commercially reasonable administrative, technical and physical safeguards designed to ensure the security and confidentiality of Customer Data, protect against any anticipated threats or hazards to the security or integrity of Customer Data, and protect against unauthorized access or use of Customer Data. CentralSquare will review and test such safeguards on no less than an annual basis.

8.2. Customer shall maintain, in connection with the operation or use of the Solutions, adequate technical and procedural access controls and system security requirements and devices, necessary for data privacy, confidentiality, integrity, authorization, authentication, non-repudiation, virus detection and eradication.

8.3. To the extent that Authorized Users are permitted to have access to the Solutions, Customer shall ensure that Authorized Users comply with this Agreement and adequately protect the confidentiality and Intellectual Property Rights of CentralSquare in the Solutions and Documentation and disclaim any liability or responsibility of CentralSquare with respect to such Authorized Users.

9. Personal Data. If CentralSquare processes or otherwise has access to any personal data or Personal Information on Customer’s behalf when performing CentralSquare’s obligations under this Agreement, then:

9.1. Customer shall be the data controller (where “data controller” means an entity which alone or jointly with others determines purposes for which and the manner in which any personal data are, or are to be, processed) and CentralSquare shall be a data processor (where “data processor” means an entity which processes the data only on behalf of the data controller and not for any purposes of its own);

9.2. Customer shall ensure that it has obtained all necessary consents and it is entitled to transfer the relevant personal data or Personal Information to CentralSquare so that CentralSquare may lawfully use, process and transfer the 506
personal data and Personal Information in accordance with this Agreement on Customer’s behalf, which may include CentralSquare processing and transferring the relevant personal data or Personal Information outside the country where Customer and the Authorized Users are located in order for CentralSquare to provide the Solutions and perform its other obligations under this Agreement; and

9.3. CentralSquare shall process personal data and information only in accordance with lawful and reasonable written instructions given by Customer and as set out in and in accordance with the terms of this Agreement; and

9.4. CentralSquare shall take reasonable steps to ensure that its employees, agents and contractors who may have access to Personal Information are persons who need to know / access the relevant Personal Information for valid business reasons; and

9.5. each Party shall take appropriate technical and organizational measures against unauthorized or unlawful processing of the personal data and Personal Information or its accidental loss, destruction or damage so that, having regard to the state of technological development and the cost of implementing any measures, the measures taken ensure a level of security appropriate to the harm that might result from such unauthorized or unlawful processing or accidental loss, destruction or damage in relation to the personal data and Personal Information and the nature of the personal data and Personal Information being protected. If necessary, the Parties will cooperate to document these measures taken.

10. Representations and Warranties.

10.1. Intellectual Property Warranty. CentralSquare represents and warrants that (a) it is the sole and exclusive owner of (or has the right to license) the software; (b) it has full and sufficient right, title and authority to grant the rights and/or licenses granted under this Agreement; (c) the software does not contain any materials developed by a third party used by CentralSquare except pursuant to a license agreement; and (d) the software does not infringe any patent, or copyright.

10.2. Intellectual Property Remedy. In the event that any third party asserts a claim of infringement against the Customer relating to the software contained in this Agreement, CentralSquare shall indemnify and defend the Customer pursuant to section 13.1 of this Agreement. In the case of any such claim of infringement, CentralSquare shall either, at its option, (1) procure for Customer the right to continue using the software; or (2) replace or modify the software so that that it becomes non-infringing, but equivalent in functionality and performance.

10.3. Software Warranty. CentralSquare warrants to Customer that: (i) for a period of one year from the Effective Date (the “Warranty Period”) the Software will substantially conform in all material respects to the specifications set forth in the Documentation, when installed, operated and used as recommended in the Documentation and in accordance with this Agreement; and (ii) at the time of delivery the Software does not contain any virus or other malicious code.

10.4. Software Remedy. If, during the Warranty Period a warranty defect is confirmed in the CentralSquare Software, CentralSquare shall, at its option, reinstall the Software or correct the Defects. Defects that occur in the Software after the Warranty Period will be corrected pursuant to Exhibit 2 (Maintenance & Support).

10.5. Services Warranty. CentralSquare warrants that the Professional Services delivered will substantially conform to the deliverables specified in the applicable statement of work and that all Professional Services will be performed in a professional and workmanlike manner consistent with industry standards for similar work. If Professional Services do not substantially conform to the deliverables, Customer shall notify CentralSquare of such non-conformance in writing, within 10 days from completion of Professional Service, and CentralSquare shall promptly repair the non-conforming deliverables.

10.6. Disclaimer of Warranty. EXCEPT FOR THE EXPRESS LIMITED WARRANTIES SET FORTH ABOVE,

CENTRALSQUARE MAKES NO WARRANTIES WHATSOEVER, EXPRESSED OR IMPLIED, WITH REGARD TO

THE INTELLECTUAL PROPERTY, SOFTWARE, PROFESSIONAL SERVICES, AND/OR ANY OTHER MATTER

RELATING TO THIS AGREEMENT, AND THAT CENTRALSQUARE DISCLAIMS ALL WARRANTIES, WHETHER

EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, INCLUDING ALL WARRANTIES ARISING FROM COURSE

OF DEALING, USAGE OR TRADE PRACTICE, AND SPECIFICALLY DISCLAIMS IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR TITLE. FURTHER, CENTRALSQUARE

EXPRESSLY DOES NOT WARRANT THAT A SOLUTION, ANY CUSTOM MODIFICATION OR ANY

IMPROVEMENTS WILL BE USABLE BY CUSTOMER IF THE SOLUTION OR CUSTOM MODIFICATION HAS BEEN

MODIFIED BY ANYONE OTHER THAN CENTRALSQUARE PERSONNEL, OR WILL BE ERROR FREE, WILL

OPERATE WITHOUT INTERRUPTION OR WILL BE COMPATIBLE WITH ANY HARDWARE OR SOFTWARE EXCEPT TO THE EXTENT EXPRESSLY SET FORTH IN THE DOCUMENTATION. ALL THIRD-PARTY MATERIALS ARE PROVIDED “AS-IS” AND ANY REPRESENTATION OR WARRANTY OF OR CONCERNING ANY OF THEM IS STRICTLY BETWEEN CUSTOMER AND THE THIRD-PARTY. THIS AGREEMENT DOES NOT AMEND, OR MODIFY CENTRALSQUARE’S WARRANTY UNDER ANY AGREEMENT OR ANY CONDITIONS, LIMITATIONS, OR RESTRICTIONS THEREOF.

11. Notices. All notices and other communications required or permitted under this Agreement must be in writing and will be deemed given when delivered personally, sent by United States registered or certified mail, return receipt requested; transmitted by facsimile or email confirmed by first class mail, or sent by overnight courier. Notices must be sent to a Party at its address shown below, or to such other place as the Party may subsequently designate for its receipt of notices in writing 507
by the other Party.

If to CentralSquare : CentralSquare Technologies, LLC
1000 Business Center Dr.

Lake Mary, FL 32746
Phone: 407-304-3235
Attention: Legal/Contracts
If to Customer: City of South Lake Tahoe
1901 Lisa Maloff Road
Suite #210
South Lake Tahoe, CA 96150
Phone: (530) 542-7478
Email: [email protected]
Attention: City Attorney

12. Force Majeure.

Neither Party shall be responsible for failure to fulfill its obligations hereunder, or be liable for damages resulting from delay in performance as a result of war, fire, strike, riot or insurrection, natural disaster, pandemic or epidemic, delay of carriers, governmental order or regulation, complete or partial shutdown of plant, unavailability of equipment, software, or services from suppliers, default of a subcontractor or vendor to the Party if such default arises out of causes beyond the reasonable control of such subcontractor or vendor, the acts or omissions of the other Party, or its officers, directors, employees, agents, contractors, or elected officials, and/or other occurrences beyond the Party’s reasonable control (“Excusable Delay” hereunder). In the event of such Excusable Delay, performance shall be extended on a day for day basis or as otherwise reasonably necessary to compensate for such delay.

13. Indemnification.

13.1. CentralSquare Indemnification. CentralSquare shall indemnify, defend, and hold harmless Customer from any and all Claims or liability, including attorneys' fees and costs, brought by a third party, allegedly arising out of, in connection with, or incident to any loss, damage or injury to persons or property or arising solely from a wrongful or negligent act, error or omission of CentralSquare, its employees, agents, contractors, or any subcontractor as a result of CentralSquare’s or any subcontractor’s performance pursuant to this Agreement; however, CentralSquare shall not be required to indemnify Customer for any claims caused to the extent of the negligence or wrongful act of Customer, its employees, agents, or contractors. Notwithstanding anything to the contrary in the foregoing, if a Claim or liability results from or is contributed to by the actions or omissions of Customer, or its employees, agents or contractors, CentralSquare’s obligations under this provision shall be reduced to the extent of such actions or omissions based upon the principle of comparative fault.

13.2. "Claim" in this Section 13 means any claim, cause of action, demand, lawsuit, dispute, inquiry, audit, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatory or other, whether at law, in equity, or otherwise.

14. Termination.

14.1. Either Party may terminate this Agreement for a material breach in accordance with this subsection. In such event, the disputing Party shall deliver written notice of its intent to terminate along with a description in reasonable detail of the problems for which the disputing Party is invoking its right to terminate and the specific requirement within this Agreement or any exhibit or schedule hereto that the disputing Party is relying upon. Following such notice, the Parties shall commence dispute resolution procedures in accordance with the dispute resolution procedure pursuant to Section 17.

14.2. CentralSquare shall have the right to terminate this Agreement based on Customer’s failure to pay undisputed amounts due under this Agreement more than ninety (90) days after delivery of written notice of non-payment.

14.3. Customer shall have the right to terminate if the proper appropriation of funds for the continuation of this Agreement is not available for any fiscal year after the first fiscal year during the Term, then this Agreement may be terminated. To effect the termination of this Agreement, Customer shall, within forty-five (45) days following the beginning of the fiscal year for which the proper appropriation is not available, provide CentralSquare with written notice of the failure to obtain the proper appropriation of funds. Such notice shall be accompanied by the payment of all sums then owed CentralSquare under this Agreement, if any.

15. Effect of Termination or Expiration. On the expiration or earlier termination of this Agreement:

15.1. All rights, licenses, and authorizations granted to Customer hereunder will immediately terminate and Customer shall immediately cease all use of CentralSquare’s Confidential Information and the Solutions, and within thirty (30) days deliver to CentralSquare, or at CentralSquare’s request destroy and erase CentralSquare’s Confidential Information from all systems Customer directly or indirectly controls; and

15.2. All licenses, access or subscription fees, services rendered but unpaid, and any amounts due by Customer to CentralSquare of any kind shall become immediately payable and due no later than thirty (30) days after the effective date of the termination or expiration, including anything that accrues within those thirty (30) days. 508

15.3. The provisions set forth in the following sections, and any other right or obligation of the Parties in this Agreement that, by its nature (including but not limited to: Use Restrictions, Confidential Information, Warranty Disclaimers, Indemnifications, & Limitations of Liability), will survive any expiration or termination of this Agreement.

15.4. In the event that Customer terminates this Agreement or cancels any portions of a project (as may be set forth in a Statement of Work) prior to Go Live (which shall be defined as “first use of a Solution or module of a Solution in a production environment, unless otherwise agreed by the Parties in a statement of work”), Customer shall pay for all Professional Services actually performed by CentralSquare on a time and materials basis, regardless of the payment terms in Exhibit 1.

15.5. Return of Customer Data. If Customer requests in writing at least ten (10) days prior to the effective date of expiration or earlier termination of this Agreement, CentralSquare shall within sixty (60) days following such expiration or termination, deliver to Customer in CentralSquare’s standard format the then most recent version of Customer Data maintained by CentralSquare, provided that Customer has at that time paid all Fees then outstanding and any amounts payable after or as a result of such expiration or termination.

15.6. Deconversion. In the event of (i) expiration or earlier termination of this Agreement, or (ii) Customer no longer purchasing certain Solutions (including those indicated to be Third-Party Materials), if Customer requests assistance in the transfer of Customer Data to a different vendor’s applications (“Deconversion”), CentralSquare will provide reasonable assistance. CentralSquare and Customer will negotiate in good faith to establish the relative roles and responsibilities of CentralSquare and Customer in effecting Deconversion, as well as the appropriate date for completion.

CentralSquare shall be entitled to receive compensation for any additional consultation, services, software, and documentation required for Deconversion on a time and materials basis at CentralSquare’s then standard rates.

15.7. Termination of this Agreement shall not relieve either Party of any other obligation incurred one to the other prior to termination.

16. Assignment. Neither this Agreement nor any rights or obligations hereunder shall be assigned or otherwise transferred by either Party without the prior written consent of the other Party, which consent will not be unreasonably withheld; provided however, that in the event of a merger or acquisition of all or substantially all of CentralSquare’s assets, CentralSquare may assign this Agreement to an entity ready, willing and able to perform CentralSquare’s executory obligations hereunder.

17. Dispute Resolution. Any dispute, controversy or claim arising out of or relating to this Agreement (each, a “Dispute”), including the breach, termination, or validity thereof, shall be resolved as follows:

17.1. Good Faith Negotiations. The Parties agree to send written notice to the other Party of any Dispute (“Dispute Notice”). After the other Party receives the Dispute Notice, the Parties agree to undertake good faith negotiations to resolve the Dispute. Each Party shall be responsible for its associated travel and other related costs.

17.2. Escalation to Mediation. If the Parties cannot resolve any Dispute through good faith negotiations, the dispute will be escalated to non-binding mediation, with the Parties acting in good faith to select a mediator and establishing the mediation process. The Parties agree the mediator’s fees and expenses, and the mediator’s costs incidental to the mediation, will be shared equally between the Parties. The Parties shall bear their own fees, expenses, and costs.

17.3. Confidential Mediation. The Parties further agree all written or oral offers, promises, conduct, and statements made in the course of the mediation are confidential, privileged, and inadmissible for any purpose in any litigation, arbitration or other proceeding involving the Parties. However, evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use in the mediation.

17.4. Litigation. If the Parties cannot resolve a Dispute through mediation, then once an impasse is declared by the mediator either Party may pursue litigation in a court of competent jurisdiction.

18. Waiver/Severability. The failure of any Party to enforce any of the provisions hereof will not be construed to be a waiver of the right of such Party thereafter to enforce such provisions. If any provision of this Agreement is found to be unenforceable, that provision will be enforced to the maximum extent possible, and the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby.

19. LIABILITY. NOTWITHSTANDING ANY PROVISION WITHIN THIS AGREEMENT TO THE CONTRARY, AND

REGARDLESS OF THE NUMBER OF LOSSES, WHETHER IN CONTRACT, EQUITY, STATUTE, TORT, NEGLIGENCE, OR OTHERWISE:

19.1. NEITHER PARTY SHALL HAVE LIABILITY TO THE OTHER PARTY FOR ANY SPECIAL, INDIRECT, INCIDENTAL,

PUNITIVE, EXEMPLARY, LIQUIDATED, OR CONSEQUENTIAL DAMAGES OF ANY KIND INCLUDING BUT NOT

LIMITED TO, REPLACEMENT COSTS, AND NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR

LOSSES OF PROFIT, REVENUE, INCOME, BUSINESS, ANTICIPATED SAVINGS, DATA, AND REPUTATION, AND

MORE GENERALLY, ANY LOSSES OF AN ECONOMIC OR FINANCIAL NATURE, REGARDLESS OF WHETHER

SUCH LOSSES MAY BE DEEMED AS CONSEQUENTIAL OR ARISING DIRECTLY AND NATURALLY FROM THE

INCIDENT GIVING RISE TO THE CLAIM, AND REGARDLESS OF WHETHER SUCH LOSSES ARE FORESEEABLE OR WHETHER EITHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSSES; AND

19.2. CENTRALSQUARE’S TOTAL LIABILITY ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT SHALL

NOT EXCEED TWICE THE AMOUNT(S) ACTUALLY PAID BY CUSTOMER TO CENTRALSQUARE HEREUNDER FOR THE LAST TWELVE (12) MONTHS PRIOR TO THE DATE THE CLAIM AROSE.

20. Insurance. During the term of this Agreement, CentralSquare shall maintain insurance coverage covering its operations in 509
accordance with Exhibit 4 (Certificate of Insurance (Evidence of Coverage)). Upon request by Customer, CentralSquare shall include Customer as an additional insured on applicable insurance policies provided under this Agreement. CentralSquare shall provide proof of current coverage during the term of this Agreement.

21. Third-Party Materials. CentralSquare may, from time to time, include third parties to perform services, provide software, or provide equipment, with prior Customer approval.. Customer acknowledges and agrees CentralSquare provides front-line support services for these Third-Party Materials, but these third parties assume all responsibility and liability in connection with the Third-Party Materials. CentralSquare is not authorized to make any representations or warranties that are binding upon the third-party or to engage in any other acts that are binding upon the third-party, except specifically that CentralSquare is authorized to represent third-party fees and to accept payment of such amounts from Customer on behalf of the third-party for as long as such third-party authorizes CentralSquare to do so. As a condition precedent to installing or accessing certain ThirdParty Materials, Customer may be required to execute a click-through, shrink-wrap End User License Agreement (“EULA”) or similar agreement provided by the Third-Party Materials provider. If mapping information is supplied with the CentralSquare Software, CentralSquare makes no representation or warranty as to the completeness or accuracy of the mapping data provided with the CentralSquare Software. The completeness or accuracy of such data is solely dependent on the information supplied by the Customer or the mapping database vendor to CentralSquare. All third-party materials are provided “as-is” and any representation or warranty concerning them is strictly between Customer and the third-party.

22. Subcontractors. CentralSquare may from time to time, in its discretion, engage third parties to perform services on its behalf including but not limited to Professional Services, Support Services, and/or provide software (each, a "Subcontractor").

CentralSquare shall be fully responsible for the acts of all subcontractors to the same extent it is responsible for the acts of its own employees.

23. Entire Agreement. This Agreement, the City of South Lake Tahoe Professional Services Agreement as agreed to by the Parties, and any Exhibits specifically incorporated therein by reference, constitute the entire agreement between the Parties with respect to the subject matter. These documents supersede and merge all previous and contemporaneous proposals of sale, communications, representations, understandings and agreements, whether oral or written, between the Parties with respect to the subject hereof.

24. Amendment. Either Party may, at any time during the term, request in writing changes to this agreement. The Parties shall evaluate and, if agreed, implement all such requested changes. No requested changes will be effective unless and until memorialized in a written change order or amendment to this Agreement signed by both Parties.

25. No Third-Party Beneficiaries. This Agreement is for the sole benefit of the Parties and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer on any other person any legal or equitable right, benefit, or remedy of any nature under or by reason of this Agreement.

26. Counterparts. This Agreement, and any amendments hereto, may be executed in several counterparts, each of which when so executed shall be deemed to be an original, and such counterparts shall constitute one and the same instrument. The Agreement (and any amendments) shall be considered properly executed by a Party if executed by that Party and transmitted by facsimile or other electronic means, such as DocuSign, Tagged Image Format Files (TIFF), or Portable Document Format (PDF).

27. Material Adverse Change. If any law, regulation, applicable standard, process, OEM requirement is changed or comes into force after the Effective Date, including but not limited to PCI standards or Americans with Disabilities Act compliance (collectively, a “Material Adverse Change”), which is not explicitly addressed within this Agreement and results in significant extra costs for either Party in relation to the performance of this Agreement, both Parties shall promptly meet, discuss in good faith, and agree upon reducing the technical, operational, and/or commercial impact of such Material Adverse Change.

28. Cooperative Purchases. This Agreement may be used by Customer Affiliates. CentralSquare agrees to offer similar services to other Affiliates under the same terms and conditions as stated herein except that the Fees may be negotiated between CentralSquare and other Affiliates based on the specific revenue expectations, agency reimbursed costs, and other Affiliate requirements. The Customer will in no way whatsoever incur any liability in relation to specifications, delivery, payment, or any other aspect of purchases by such Affiliates. CentralSquare and the Affiliate will enter into any such arrangement with an amendment to this Agreement.

29. Order of Precedence.

29.1. In the event of any conflict or inconsistency between this Agreement, the Exhibits, or any purchase order, then the following priority shall prevail:

29.1.1. The main body of this Agreement and any associated amendments, statements of work (including Exhibit 5 (Statement of Work)), or change orders and then the attached Exhibits to this Agreement in the order in which they appear.

29.2. Customer’s purchase terms and conditions or CentralSquare’s sales terms and conditions are not applicable and shall have no force or effect, whether referenced in any document in relation to this Agreement.

29.3. Incorporated Exhibits to this Agreement:

Exhibit 1: Solution(s) and Services Fee Schedule
Exhibit 2: Maintenance & Support
510
Exhibit 3: CentralSquare Access Management Policy
Exhibit 4: Certificate of Insurance (Evidence of Coverage) Exhibit 5: Statement of Work
Exhibit 6: South Lake Tahoe Professional Services Agreement (applicable to implementation services only) 511
EXHIBIT 1
Solutions(s) and Services Fee Schedule
WHAT SOFTWARE IS INCLUDED?

PRODUCT NAME QUANTITY UNIT PRICE TOTAL

1. AnalyticsNOW Cloud Annual Access Fee 1 7,500.00 7,500.00

2. Bluebeam Server API for TRAKiT Annual Access
Fee 1 2,100.00 2,100.00

3. CommunityDevelopment: Advanced Annual
Subscription Fee SaaS 30 1,900.00 57,000.00

4. eTRAKiT Credit Card API Annual Access Fee 1 2,500.00 2,500.00

5. TRAKiT CSLB Integration Annual Access Fee 1 3,500.00 3,500.00 Software Total 72,600.00USD
WHAT SERVICES ARE INCLUDED?

DESCRIPTION TOTAL

1. Community Development: Advanced SaaS Subscription Cloud Setup Fee 10,000.00

2. Public Administration Consulting Services - Fixed Fee 59,280.00

3. Public Administration Data Conversion Services - Fixed Fee 31,005.00

4. Public Administration Development Services - As Incurred 26,640.00

5. Public Administration GIS Services - Fixed Fee 15,600.00

6. Public Administration Project Management Services - Fixed Fee 34,125.00

7. Public Administration Technical Services - Fixed Fee 8,970.00

8. Public Administration Training Services - Fixed Fee 21,255.00 Services Total 206,875.00 USD

QUOTE SUMMARY
Software Subtotal
72,600.00 USD
Quote #: Q-139731
512
Services Subtotal
206,875.00 USD
Quote Subtotal 279,475.00 USD
Quote Total 279,475.00 USD

RECURRING FEES
_____

TYPE AMOUNT
FIRST YEAR MAINTENANCE TOTAL 0.00
FIRST YEAR SUBSCRIPTION TOTAL $72,600.00
The amount totals for Maintenance and/or Subscription on this quote include only the first year of software use and maintenance. Renewal invoices will include this total plus any applicable uplift amount as outlined in the relevant purchase agreement.

Payment Terms:
a. Cloud Set Up Fee is due 100% upon Execution.
b. CentralSquare Fixed Fee Professional Services are due 50% upon execution and 50% upon completion of Services. c. CentralSquare As Incurred Professional Services are due monthly As Incurred on a time and materials basis. d. If applicable, Annual Subscription/Access Fees are due on the Go-Live Date, and annually thereafter on the anniversary of the Go-Live Date.
e. Annual Support & Maintenance Fees are due as follows:
i. End Billing with Continued Support. Upon commencement of billing for the Annual Subscription/Access Fee, Customer acknowledges the termination of the current maintenance billing structure for any legacy products that will be effectively replaced by modules listed in Exhibit 1. CentralSquare shall continue to provide Customer with Maintenance of these products until the transition to a new environment is complete, at which time Maintenance will be terminated. ii. Credit. A credit in the amount of the unused portion of Maintenance paid by Customer, if any, shall be applied towards Customers first Annual Subscription/Access Fee. The unused portion of paid Maintenance will consist of the amount unused as of Go-Live Date.
f. Annual Software Maintenance Fees and Annual Subscription/Access Fees shall increase by 3% for year two, 4% for year three, and 5% year over year thereafter.
g. If applicable, non-subscription Hardware Fees are due on the Effective Date. h. If applicable, Third-Party Fees are due on the Effective Date. i. If applicable, Travel expenses shall be due as incurred, invoiced on a monthly basis for the travel expenses incurred in the preceding month.
513
j. Customer must pay all applicable support fees for its existing Superion system up to the date of Go Live for the CentralSquare software in order to receive the upgrade discount.

Invoice Terms:

CentralSquare shall provide an invoice for the items in the schedule above no less than thirty (30) days prior to the due date.

Ancillary Fees:
a. Customer is responsible for paying all taxes relating to this Agreement. Applicable tax amounts (if any) are not included in the fees set forth in this Agreement. If Customer is exempt from the payment of any such taxes, Customer must provide CentralSquare valid proof of exemption; otherwise, CentralSquare will invoice Customer and Customer will pay to CentralSquare all such tax amounts.
b. To the extent allowable by law, if Customer fails to make any payment when due, then CentralSquare may charge interest on the past due amount at the rate of 1.5% per month calculated daily and compounded monthly, or, if lower, the highest rate permitted under applicable law; and if such failure continues for 90 days following written notice thereof, CentralSquare may suspend performance or access until past due amounts have been paid. 514
EXHIBIT 2
Maintenance & Support
This Maintenance & Support Exhibit describes support and maintenance relating to technical support that CentralSquare will provide to Customer during the Term of the Agreement.

1. Product Updates and Releases

1.1. Software Version. “Software Version” means the base or core version of the Software that contains significant new features and significant fixes and is available to the Customer. Software Versions may occur as the Software architecture changes or as new technologies are developed. The nomenclature used for updates and upgrades consists of major, minor, build, and fix and these correspond to the following digit locations of a release, a,b,c,d. An example of which would be 7.4.1.3, where the 7 refers to the major release, the 4 refers to the minor release, the 1 refers to the build, and the 3 refers to a fix. All Software Versions are provided and included as part of this Agreement.

1.2. Updates. From time to time CentralSquare may develop permanent fixes or solutions to known problems or bugs in the Software and incorporate them in a formal “Update” to the Software. If Customer is receiving technical support from CentralSquare on the general release date for an Update, CentralSquare will provide the Customer with the Update and related Documentation at no extra charge. Updates for custom configurations will be agreed upon by the Parties and outlined in a Statement of Work or Change Order.

1.3. Releases. Customer shall agree to install and/or use any New or Major Release within one year of being made available by CentralSquare to avoid or mitigate a performance problem, ineligibility for Support and Maintenance Services or infringement claim. All modifications, revisions and updates to the Software shall be furnished by means of new Releases of the Software and shall be accompanied by updates to the Documentation whenever CentralSquare determines, in its sole discretion, that such updates are necessary.

2. Support

2.1. CentralSquare shall provide to Customer support via toll-free phone number 833-278-7877 or via the CentralSquare Support Portal. CentralSquare shall provide to Customer, commercially reasonable efforts in solving errors reported by the Customer as well as making available an online support portal. Customer shall provide to CentralSquare reasonably detailed documentation and explanation, together with underlying data, to substantiate errors and to assist CentralSquare in its efforts to diagnose, reproduce and correct the error. Should either Party not be able to locate the error root cause and Customer and CentralSquare agree that on-site services are necessary to diagnose or resolve the problem CentralSquare shall provide a travel estimate and estimated hours in order to diagnose the reported error.

2.2. If after traveling onsite to diagnose a reported error and such reported error did not, in fact, exist or was not attributable to a defect in the Software provided by CentralSquare or an act or omission of CentralSquare, then Customer shall pay for CentralSquare's investigation, travel, and related services in accordance with provided estimate. Customer must provide CentralSquare with such facilities, equipment and support as are reasonably necessary for CentralSquare to perform its obligations under this Exhibit, including remote access in accordance with the Remote Access Policy.

3. Online Support Portal
Online support is available via https://support.centralsquare.com/s/contact-us, offering Customer the ability to resolve its own problems with access to CentralSquare’s most current information. Customer will need to enter its designated username and password to gain access to the technical support areas on CentralSquare’s website. CentralSquare’s technical support areas allow Customer to: (i) search an up-to-date knowledge base of technical support information, technical tips, and featured functions; and (ii) access answers to frequently asked questions (FAQ).

4. Exclusions from Technical Support Services
CentralSquare shall have no support obligations to provide Support or Maintenance for Solutions that are not kept current to one version prior to the then current version of the Solution. CentralSquare shall have no support obligations with respect to any third-party hardware or software product not licensed or sold to Customer by CentralSquare (“Nonqualified Product”). Customer shall be solely responsible for the compatibility and functioning of Nonqualified Products with the Software.

5. Customer Responsibilities
In connection with CentralSquare’s provision of technical support as described herein, Customer acknowledges that Customer has the responsibility to do each of the following:

5.1 Provide hardware, operating system and browser software that meets technical specifications, as well as a fast, stable, high-speed connection and remote connectivity for accessing the Solution.

5.2 Maintain any applicable computer system and associated peripheral equipment in good working order in accordance with the manufacturers’ specifications, and ensure that any problems reported to CentralSquare are not due to hardware malfunction;

5.3 For CentralSquare Solutions that are implemented on Customer Systems, maintain the designated operating system at the latest code revision level reasonably deemed necessary by CentralSquare for proper operation of the Software;

5.4 Supply CentralSquare with access to and use of all information and facilities reasonably determined to be necessary by CentralSquare to render the technical support described herein; 515

5.5 Perform any test or procedures reasonably recommended by CentralSquare for the purpose of identifying and/or resolving any problems;

5.6 At all times follow routine operator procedures as specified in the Documentation or any error correction guidelines of CentralSquare posted on the CentralSquare website;

5.7 Customer shall remain solely responsible at all times for the safeguarding of Customer’s proprietary, confidential, and classified information contained within Customer Systems; and

5.8 Reasonably ensure that the Customer Systems are isolated and free from viruses and malicious code that could cause harm before requesting or receiving remote support assistance.

6. Priorities and Support Response Matrix
The following priority matrix relates to software errors covered by this Agreement. Causes secondary to non-covered causes - such as hardware, network, and third-party products - are not included in this priority matrix and are outside the scope of this Exhibit. CentralSquare will make commercially reasonable efforts to respond to Software incidents for live remote based production systems using the following guidelines:

Priority Issue Definition Response Time
Priority 1 –
Urgent
The software is completely down and will not
launch or function.

Priority 1 issues must be called in via 833-278-7877 and will be immediately answered and managed by the first
available representative.

CentralSquare will respond to urgent requests within 1
hour. These issues will be resolved, or a resolution plan provided, within 24 hours.

Priority 2 –
Critical
A high-impact problem that disrupts the
customer’s operation but there is capacity to
remain productive and maintain necessary
operations.

Priority 2 issues must be called in via 833-278-7877 and will be immediately answered and managed by the first
available representative.

CentralSquare will respond to critical requests within 2 hours.

Priority 3 –
Non-Critical
A Software Error related to a user function which
does not negatively impact the User from the use
of the system. This includes system administrator
functions or restriction of user workflow but does
not significantly impact their job function.

Priority 3 issues called in via 833-278-7877 will be
immediately answered and managed by the first
available representative.

Non-Critical Priority 3 issues may also be reported via Https://support.centralsquare.com/s/contact-us
CentralSquare will respond to non-critical requests
within 4 hours.

Priority 4 –
Minor
Cosmetic or documentation errors, including
Customer technical questions or usability
questions.

Priority 4 issues called in via 833-278-7877 will be
immediately answered and managed by the first
available representative.

Minor Priority 4 issues may also be reported via
Https://support.centralsquare.com/s/contact-us
CentralSquare will respond to minor requests within 24
hours.

7. Exceptions. CentralSquare shall not be responsible for failure to carry out its Support and Maintenance obligations under this Exhibit if the failure is caused by adverse impact due to:

7.1. defectiveness of the Customer’s Systems (including but not limited to environment, hardware or ancillary systems), or due to Customer corrupt, incomplete, or inaccurate data reported to the Solution, or documented defect.

7.2. denial of reasonable access to Customer’s System or premises preventing CentralSquare from addressing the issue.

7.3. material changes made to the usage of the Solution by Customer where CentralSquare has not agreed to such changes in advance and in writing or the modification or alteration, in any way, by Customer or its subcontractors, of communications links necessary to the proper performance of the Solution.

7.4. a Force Majeure event (as outlined in Section 12), or the negligence, intentional acts, or omissions of Customer or its agents.

8. Incident Resolution. Actual response times and resolutions may vary due to issue complexity and priority. For critical impact level and above, CentralSquare provides a continuous resolution effort until the issue is resolved. CentralSquare 516
will make commercially reasonable efforts to resolve Software incidents for live remote based production systems using the following guidelines:

Priority Resolution Process Resolution Time
Priority 1 – Urgent CentralSquare will provide a
procedural or configuration
workaround or a code correction that
allows the Customer to resume live
operations on the production
System.

CentralSquare will work continuously to provide the Customer with a solution that allows the Customer to resume live operations on the production system.

CentralSquare will either resolve the issue or provide a resolution plan as soon as possible and not later than twenty-four (24) hours after notification.

Priority 2 –
Critical
CentralSquare will provide a
procedural or configuration
workaround or a code correction that
allows the Customer to resume
normal operations on the production
System.

CentralSquare will work continuously to provide the Customer with a solution that allows the Customer to resume normal operations on the production System.

CentralSquare will either resolve the issue or provide a resolution plan as soon as possible and not later than thirty-six (36) hours after notification.

Priority 3 – Non –
Critical
CentralSquare will provide a
procedural or configuration
workaround that allows the Customer
to resolve the problem.

CentralSquare will work to provide the Customer with a
resolution which may include a workaround or code correction within a timeframe that takes into consideration the impact of the issue on the Customer and CentralSquare’s User base.

Priority 3 issues have priority scheduling in a subsequent release.

Priority 4 – Minor If CentralSquare determines that a
reported Minor Priority error
requires a code correction, such
issues will be addressed in a
subsequent release when
applicable.

CentralSquare will work to provide the Customer with a
resolution which may include a workaround or code correction in a future release of the software. Priority 4 issues have no defined resolution time.

9. Non-Production Environments. CentralSquare will make commercially reasonable efforts to provide fixes to nonproduction environment(s). Non-production environments are not included under the response or resolution tables provided in this Exhibit.

9.1. Maintenance. All non-production environment resolution processes will follow the structure and schedules outlined above for production environments.

9.2. Incidents and service requests. Non-production environment incidents are considered priority 3 or 4, dictated by circumstances and will be prioritized and scheduled subordinate to production environment service requests.

10. Training. Outside the scope of training services purchased, if any, Customer is responsible for the training and organization of its staff in the operation of the Software.

11. Development Work. Software support and maintenance does not include development work either (i) on software not licensed from CentralSquare or (ii) development work for enhancements or features that are outside the documented functionality of the Software, except such work as may be specifically purchased and outlined in the Agreement.

CentralSquare retains all intellectual property rights in development work performed and Customer may request consulting and development work from CentralSquare as a separate billable service.

12. Technology Life Expectancy. Customer understands, acknowledges and agrees that the technology upon which the Hardware, Solution and Third-Party Software is based changes rapidly. Customer further acknowledges that CentralSquare will continue to improve the functionality and features of the Solution to improve legal compliance, accuracy, functionality and usability. As a result, CentralSquare does not represent or warrant that the Hardware, Solution and/or Third-Party Software provided to Customer under this Agreement or that the Customer Systems recommended by CentralSquare will function for an indefinite period of time. Rather, CentralSquare and Customer may, from time to time, analyze the functionality of the Hardware, Solution, Third-Party Software and Customer Systems in response to changes to determine whether Customer must upgrade the same. Customer upgrades may include without limitation, the installation of a new Release, additional disk storage and memory, and workstation and/or server upgrades. Customer upgrades may also include the installation and/or removal of Third-Party Software. Customer is solely responsible for all costs associated with future resources and upgrades. 517
EXHIBIT 3
CentralSquare Access Management Policy
In order to provide secure, federally compliant connections to agency systems CentralSquare Technologies (“CentralSquare”) requires BeyondTrust or SecureLink as the only approved methodology of connection. BeyondTrust and Securelink provide the necessary remote access in order to service and maintain CentralSquare products while adhering to the Federal Bureau of Investigations Criminal Justice Information Services requirements. Both solutions utilize two-factor authentication Federal Information Processing Standard Publication (“FIPS”) 140-2 validated cryptographic modules and AES encryption in 256-bit strengths.

BeyondTrust and Securelink are addressed in turn via this Access Management Policy; Customers may choose which remote privileged access management solution will be utilized by CentralSquare.

BeyondTrust
The BeyondTrust remote support solution may be utilized via escorted session or a jump Customer. As for an escorted session, when an agency needs assistance from CentralSquare, the agency employee requesting assistance will receive verbal or email communication with a session key necessary to enable remote access. If a verbal key is provided, the user enters the session key after visiting https://securesupport.centralsquare.com.

Jump Customers are a Windows service that can be stopped/started to facilitate a support session. Connections made via jump Customer can be active or passive. An active jump Customer is always available. A passive connection is enabled for a specific purpose and then disabled when not used. Regardless of the option selected, CentralSquare’s support team will arrange a BeyondTrust session to establish the jump Customer.

The jump Customer resides on the agency side on the installed device, where an agency administrator can manage.

Instructions on how to enable/disable jump Customers can be provided upon request. A sample workflow of a passive jump Customer is provided below:

Should an agency require support from CentralSquare, a call would be placed and/or a support ticket opened in the portal on the CentralSquare customer support website. Before accessing the agency’s system and/or environment, the CentralSquare representative would send a notice of connection from the CentralSquare support portal instance. This notice can be sent to the individual at the agency that the CentralSquare representative is working with or other designated contacts as necessary. Upon receipt of the notice of connection, the agency personnel would enable the BeyondTrust jump Customer. The CentralSquare representative would then be admitted to the agency’s system and/or environment to perform the necessary task. Upon completion of the task, the CentralSquare representative sends a notice of disconnection from the CentralSquare support portal instance. Upon receipt of the notice of disconnection, the agency personnel would then disable the BeyondTrust jump Customer.

Securelink
Similar to BeyondTrust’s escorted session, Securelink may be utilized via “quick connect”. To enable a quick connect session when an agency needs assistance from CentralSquare, the Agency employee requesting assistance will enter a key code in order to connect for screen sharing on a device.

Similar to the jump Customer methodology, SecureLink may also be utilized via “gatekeeper”. The sample workflow description for a jump Customer provided above is substantially similar to the workflow for gatekeeper.

Summation
BeyondTrust and Securelink allow customers the ability to monitor connectivity to the customer’s network and maintain CJIS compliance while enabling CentralSquare to perform the necessary support functions. 518
EXHIBIT 4
Certificate of Insurance (Evidence of Coverage)
519
EXHIBIT 5
Implementation Statement of Work
Project: South Lake Tahoe, CA – Community Development (Q-139731) CentralSquare is implementing a configurable, commercially available, off-the-shelf solution. The parties mutually agree and acknowledge this Statement of Work (SOW) is to be a planning document, not the detailed requirements or design of the solution.
 Project Start Date
Parties agree the Project Kickoff Meeting will be scheduled within thirty (30) days from the Effective Date of the Agreement.

Scope of Project
The project includes the CentralSquare core system Community Development as detailed in Appendix A of this SOW.  Services Scope
The following outlines the proposed methodology for the project management, consulting, configuration, testing, training, and other services work necessary for the implementation of the contracted products, with all components delineated in the Agreement. Details related to the activities for each application included in this project can be found in Appendix A of this SOW.

Project Teams
Project teams from all parties will include functional experts, technical resources, and decision makers. Resource management is critical to success, for all parties. CentralSquare and the Customer agree to make all necessary arrangements to ensure resources are available at each stage to ensure timelines are met. CentralSquare uses a RACI (Responsible, Accountable, Consulted, and Informed) chart to outline the expectations from each member of the team, from all parties. CentralSquare’s RACI Chart can be found in Appendix B of this SOW.

Project Management Methodology
The implementation is conducted by a cross-functional team of experts from several departments within CentralSquare led by the assigned Project Manager. A phased approach to project management is followed to ensure the critical services are consistent and results are achieved. Phases include:

Initiation: This phase includes the contract execution and transition to the Service Delivery team. CentralSquare may schedule an all-team meeting to kick off the project. The kickoff meeting will include time for the project managers from both teams to review all contractual documentation and begin the process of finalizing the integrated project schedule.

Planning: During the planning phase, the project managers from both teams will meet to discuss all tasks and resources necessary to successfully complete implementation. The project team from CentralSquare will be finalized, project governance will be established, and a communications plan will be drafted and shared with the parties.

Deliverables during the planning phase include the integrated baseline project schedule, communications plan, resource plan, and governance plan.

Monitor and Control: Throughout the project, the project managers will work together on monitoring and controlling the overall project health. This includes regular status meetings/reports, quality reviews, managing risks/issues, and managing resources. Status meetings will be held bi-weekly, or on an otherwise mutually agreed upon schedule. Project managers will work together to manage the overall timeline, scope, and respective budgets, as well as ensuring the customer’s 520
objectives are being met along the way. Any items determined to be out of scope will be immediately addressed by the Central Square and customer Project Managers.

Project governance is essential to establishing a decision making and communications model for the project. Key stakeholders will be identified by all parties and regular status meetings will be scheduled to review the project health, risks to timeline/budget, and issues that may block forward progress.

Deliverables during this phase include regular status reports, risk/issue log, regular stakeholder meetings, and all project schedule updates.

Project Close Out: The final stage of the project includes an introduction and transition to the Customer Support team and the Customer Success team. During transition, the project managers will work together to conduct an audit of tasks and deliverables associated with the project. Any mutually agreed upon delayed deliverables will be scheduled for post go-live and documented. Any contracted post go-live activities will be reviewed and scheduled as necessary before transition to Customer Support.

Implementation Methodology
CentralSquare Professional Service Consultants and Project Manager follow a standard implementation approach divided into stages throughout the course of the project. Several types of services and resources (defined herein) will be used during each stage to complete the necessary steps for successful deployment of the contracted services. The Services aligned to implementation include Consulting, Technical and Installation, Data Conversion, and Training. The implementation methodology is a four-stage approach that includes:

Analysis: During this stage of the implementation, CentralSquare Consultants will meet with the Customer’s functional experts to review the current workflows of key functions impacted by this project and the contract software. Decisions related to configuration will be documented in the CentralSquare Decision Workbooks for each major product and delivered to the customer for review and concurrence. Where necessary, CentralSquare Data Conversion Specialists will meet with the data experts from the Customer and review the contracted elements for conversion. Deliverables during this stage include the Decision Workbooks for each product and the data mapping for conversion.

Configuration: Using the decisions documented in the Decision Workbooks during the Analysis stage, CentralSquare will begin work with the customer to configure the system. CentralSquare will also work with the customer functional experts, as needed, to configure interfaces and complete data conversion. All admin level workshops will be completed during the configuration stage of the project: Customer should ensure key project resources are available for consultation and workshops; and customer should be prepared to host training in adequate environments. Appendix A will define workshops specific to this project and deliverables as applicable during this stage.

Testing: It is expected there will be modifications to current customer processes to align to the functionality of the newly contracted products; as such, validation through appropriate reasonable testing at various stages is critical to a successful deployment. CentralSquare uses an iterative testing approach to ensure the configurations are properly set to achieve the desired outcomes. During the testing stage of the project, the project teams will work together to ensure workflows and business processes are aligned to the application functionality. Once testing is complete, application user training will begin (see the appendix for an overview of training included in this project). Deliverables during the testing stage include Test Plans and Go-Live Readiness assessments.

Deployment: Once the project passes the Go-Live Readiness assessment, final planning for Go-Live takes place. This will include completing end user training, defining a communications plan for Go-Live, and defining a Go-Live schedule that is mutually accepted. Deliverables during the deployment stage include a go-live plan, cutover schedule, and communications plan.
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Professional Services
Consulting Services: Include both interactive and independent engagements with CentralSquare subject matter experts on the various applications and functions. Types of activities included in Consulting Services are customer workflow analysis, application workshops, and configuration assistance. Also included in the consulting activities are engagements aimed at supporting the customer with testing and go-live activities. More detail on the engagement related to Consulting Services related to this project can be found in Appendix A.

A successful consultation includes multiple platforms of learning and training; therefore, the customer will provide ample workspace in order to be successful in this type of engagement. Network connections, training facilities that include computers, projectors, Wi-Fi access, recommended network configurations in place, and scheduling considerations are imperative so that all who would benefit from collaboration and training may attend.

Technical Services: Provides technology consulting at the infrastructure layer including CentralSquare applications requirements for servers, operating systems, and other various supporting products like SQL and Active Directory.

Technical Services are engaged in tasks related to interfaces and integration implementation configuration and knowledge transfer. Refer to Appendix A for contracted Technical Services.

Technical Services also includes activities related to hardware installation (as necessary) and the initial software installation of CentralSquare applications. This includes the services for the provisioning of additional environments for the contracted applications: application environments included in this contract are Production (Pre-Production during implementation), Training/Testing, and Data Conversion (where applicable).  The Pre-Production environment will become the Production environment upon Go-Live. All activities related to configuration, testing, and training will take place in the Pre-Production environment. Prior to Go-Live, CentralSquare will scrub the Pre-Production environment of all training and testing data and prep for Production Go-Live.
 The Data Conversion environment will be provisioned to align with the Pre-Production environment. This environment will be used as a working/staging environment for data conversion activities during implementation. Once the data conversion activities are complete, the environment will be decommissioned.  The Training/Test environment will be provisioned in the weeks leading up to Go-Live in an effort to minimize the additional work needed to keep environments aligned.

Once the Training/Testing environment has been completed, and the Production environment is live, the ongoing maintenance for configuration alignment between the two environments will be the responsibility of the Customer.

Communication
Project Status Cadence Meetings: Project status cadence meetings, scheduled as determined by the CentralSquare and Customer Project Managers, establish the status of the project; achievements over a defined iterative period, risk mitigation, issue review, and assurance of awareness of upcoming activities. Continuity in the meeting schedule is critical to early intervention of risks and issues. Project Status and Issues/Risks Reporting: In addition to the regularly scheduled Project Status Meetings, the CentralSquare Project Manager provides two key types of reports as part of the Communication Plan.
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The Project Status Report, distributed to key stakeholders at a frequency to be determined based on the needs of the Customer (typically bi-weekly or monthly), summarizes milestones completed, as well as recent and upcoming project activity.

The Issues Log updated continually by the CentralSquare Project Manager, tracks entry and management of project issues identified by CentralSquare or the Customer. Log entries include status updates, action items, and responsibilities of both parties. Risks and issues tracking log adjustments are mutual agreement by the CentralSquare and Customer Project Manager.

The Customer and CentralSquare agree that the individuals designated in the final project plan are essential to the services offered pursuant to this Agreement. The Customer and CentralSquare should anticipate challenging issues to arise throughout the implementation process due to the nature and complexity of projects of this type. For expedient remedying of challenging issues, the Customer and CentralSquare will use the following dispute resolution process.

All communication regarding the project directed to CentralSquare’s Project Manager and the Customer’s Project Manager maintain consistent communication between the parties. Regularly scheduled project status meetings maintain open communication between the CentralSquare and Customer Project Manager.

All issues or concerns are to be openly and actively discussed between CentralSquare’s Project Manager and the Customer’s Project Manager prior to any escalation.

If issues begin to interfere with the progression of the implementation project, the Customer and/or CentralSquare Project Manager should escalate challenges to senior management representatives.

Escalation to CentralSquare management is as follows:

Customer and CentralSquare will provide escalation personnel to Project Managers during Kick-Off phase of the project.

Data Conversion Services: CentralSquare uses an iterative and collaborative approach to data conversion. This includes the initial data analysis, data mapping, and performing sample conversions for validation prior to executing the final conversion into Production. CentralSquare will provide training on the proper use of CentralSquare’s data mapping tools to the customer’s appropriate staff. CentralSquare consultants will work with the customer to ensure a thorough understanding of the validation requirements necessary to evaluate converted data for completeness and accuracy.

Finally, CentralSquare Data Conversion Consultants will provide a final plan for converting data into the Production environment aligned to the Go-Live schedule and will review this plan with the appropriate customer staff.

For a successful data conversion, the customer will provide the necessary dataset in one of the following formats: SQL, Microsoft Excel, Microsoft Access, or delimited flat file. While CentralSquare will collaborate with the customer staff on the best practice approach to validation of converted data, it is ultimately the responsibility of the customer to ensure the validation is prioritized for timely completion and data is verified for accuracy. Up to three iterations of translation, conversion, and review are performed for each dataset; therefore, it is imperative to have sufficient time allotted for effective review at each iteration. Detailed documentation in writing will be required from the customer staff for any discrepancies or issues found during the data review. See Appendix A for the data conversion contracted for this project.

Training Services
Utilizing a global methodology for user training across all product lines ensures the preparation, documentation, and delivery of training is effective across all of CentralSquare branded core applications, add-ons, and interfaces. Training sessions can occur through multiple vehicles such as live-online, e-learning on demand, and face-to-face classroom settings. CentralSquare Consultants work with customer administration and subject matter experts to establish a training plan to include the course objectives, schedule, location(s), and participants.

CentralSquare provides a hands-on, interactive approache to user training: End-User and Train-the-Trainer. 523
 End-Users are defined as employees who will access the application(s) on a regular basis to perform their daily activities. End-User classes incorporate various functions based on realistic scenarios focused on process using the applications inherent tools to ensure productive use of the system at and after Go-Live. Topics in End-User courses will include data entry, searching, reporting, and application navigation.  Train-the-Trainer courses are designed to prepare the Customer’s trainers to conduct End User training.

CentralSquare uses a teach and teach-back approach for Train-the-Trainer to allow for our Consultants to evaluate the Trainer’s knowledge and ability to convey methodology appropriate to the use of the CentralSquare applications.

Successful training relies on the customer to dedicate assigned personnel to attend sessions limiting the interruptions of normal work duties. To ensure training is most successful the Customer will provide appropriate classrooms, facilities, connectivity (networks and lines to data terminals), devices with system software installed, and related equipment/materials to support each training class. With a hands-on and interactive approach to training, every effort should be made to include one full-function workstation per student, one full-function workstation for the instructor, necessary projection equipment, a whiteboard, and network connectivity. Every attendee should have the prerequisite skill sets, operations knowledgebase, and dedicated time to complete follow-up tasks after the completion of the training. See Appendix A for an overview of End-User training associated with this project. 524
APPENDIX A: Application Deployment Strategies
PRODUCT: COMMUNITY DEVELOPMENT
Analysis:

To begin, we jointly perform a comprehensive analysis of your current state processes related to core system functionality. In this stage we also begin the process of data conversion by analyzing your legacy data. Significant tasks include:

Major Task Description
Business Process Review Consultant meets with different areas of Community Development reviewing and analyzing all key business processes. All sessions will be discussions on processes relating to that area within Community Development. Deliverable: Community Development Formal BPR Report and Recommendations.

Workbook Introduction The consultant will introduce and walk through the workbooks which will be used to capture the existing state of the client’s applicable Community Development modules.

Data Migration Mapping The consultant will work closely with the agency’s legacy data expert, to review the source data and map it to the proper target data field in Community Development Monitor & Control:

During this phase, the consultant has become familiar with your configuration requirements, processes, and current workflows. With this knowledge, we will deliver your configured system and converted legacy data into your new preproduction environment. Next, our consultant will provide guidance as you begin iterative testing that will continue throughout the remainder of the implementation. Also, our data conversion team guides you through testing your converted data and Admin training begins. Significant tasks include:

Major Task Description
The Work-Booking
Process
The Consultant will work with the client remotely across multiple sessions to refine the workbooks to a final state of acceptance.

System Configuration CentralSquare Technologies configures system according to signed Decision Workbooks. Client provides additional information as needed.

Python Scripting and Geo
Database Delivery
The GIS Specialist builds Python scripting by GEOTYPE (example: Parcel, Address, Street) based on the Land Management Workbook to gather required data to populate the appropriate Community Development database tables for initial delivery and installation at the client's site.Upon completion of the scripting, the GIS Specialist delivers the GEO database to the Database Specialist for inclusion in the initial delivery of the client's testing database.

Configuration Validation CentralSquare Consultant completes the Configuration Validation checklist of the system to verify system is configured to meet the requirements.

Admin Skills Workshops Training classes, designed as hands-on workshops, include building code tables, picklists, system settings, and assignment of security permissions. Designed for supervisors, system administrator, and staff with decision-making authority. Please see below for more details.

Modules included Definition of Module
Property Data &
Ownership Management
Land Management is at the heart of our system, providing comprehensive land data obtained from the assessor’s office to ensure accuracy. Users can conduct a preliminary screening of a property and then link a project, or permit directly through Land Management.

Combined with industry-leading GIS technology, users receive the power of database technology with digital maps and aerial photos to provide a graphical view of the land record. This allows the 525
agency to be proficient in performing spatial analysis (i.e., recognizing expiring permits, different zoning criteria) by obtaining the reporting information graphically on the map.

CAPABILITIES INCLUDE:
 View any related County Assessor data
 View related records associated with a parcel
 View GIS details with a single click
 See all subdivisions, land splits, annexations, and site mergers  View owner details
 Create a permit, project, or case on a land record
 Control parcels, buildings, addresses, and street segments  Add a warning or lock down a land record
 Manage property inspections
 Define address naming conventions
 Research property and building details
 Print owner merge letters and notifications
 Execute dynamic queries
 Keep historical records
Geographical
Information System
Mapping
State-of-the-art ESRI GIS Integration allows all development activities such as permits, projects, land management, licensing, and inspections to be managed directly from the parcel fabric. Central Square Community Development leverages your agency’s ESRI GIS to enable users to visually search the map for development activity and display results in reports. GIS Integration offers enhanced user controls, allowing users to view related records associated with the parcel, create permits directly from the map, and even run a query to illustrate search results.

This allows the agency to become more efficient in recognizing areas with expiring permits, or different zoning criteria. Rather than running different reports, this information can be graphically represented on the map.

CAPABILITIES INCLUDE:
 Contractors can pay fees for associated permits
 See all subdivisions, land splits, annexations, and site mergers  Control parcels, buildings, addresses, and street segments  Manage property inspections
 Define address naming conventions
 Research property and building details
 Create and save spatial bookmarks
 Use multiple internal and public map services
 Use measurement and drawing tools
 Run radius notifications and print owner letters
 Use Network Analyst for routing and directions
 Execute dynamic queries and perform spatial analysis
 Select multiple parcels to combine into a project, permit, or case  Search or create a permit, project, case, or complaint from the map 526
 Use common Microsoft Bing maps and Google Street View features Planning & Zoning Planning & Zoning manages the workflow for all types of projects, from application to review and approval. The system records all assigned actions and any conditions of approval for future evaluation. Attachment capability allows users to scan plans with mark-ups and link them as part of a project’s history.

A time clock function automatically schedules critical points along a project’s timeline. This ensures all reviewers stay on target. User-definable screens allow administrators to easily create additional screen templates to track and record unique information.

CAPABILITIES INCLUDE:
 Track phone calls, emails, or letters
 Track reviews in timesheet
 Project review cycles and notes
 Attach different iterations of plans with mark-ups
 Inspection tracking
 Contact management
 Conditions for approval maintained on project
 Detailed reports for fee information, project tree, and more  Event scheduler for meeting dates, e. g., Planning Commission  Automatic assignment of reviews
 Unique fee schedule for each application type
 Track engineering and public works projects
 Direct interface to GIS for project management
 Issue multiple permits from a single project
 Create annexations and subdivisions
 Issue project forms
 Attach documents to project records
Permitting & Inspections Streamline your agency’s permitting process by tracking the unique workflows for all types of permits. The Permitting module captures everything your users need, from contact management, related permits, plan review tracking, inspector scheduling, and financial details.

Permits tracked in this module are customized according to your agency’s workflow requirements, including permit type, status queues, valuation details, review types, action types, customizable screens, inspection requirements, and fee schedules. Your agency can incorporate unique procedures to ensure timelines are met efficiently, reports are executed properly, and managers are alerted when necessary.

CAPABILITIES INCLUDE:
 Unique workflow for each permit type
 Schedule inspectors by region, permit type, or inspection type  Review related cases, projects, sites, or permits
 Compare multiple permits side by side
 Manage permit reviews and conditions
 Unlimited user-defined search options
 Copy/duplicate information from another permit
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 Require previous inspections
 Create unique job valuations
 User-defined standard comments
 Incorporate unique fee schedules
 Issue permit forms and Certificates of Occupancy
 Use inspection checklists
 Generate public Twitter notifications of permit activity  Attach documents to permit records
 Track site inspections not associated with a permit record 

Directory for Architects,
Engineers & Contractors
AEC Entity provides instant access to all information associated with people who frequently have business with the agency, as it relates to permits and projects. Any type of professional can be tracked, including architects, engineers, contractors, and surveyors to name a few. Common information associated with these contacts can be viewed quickly from a single screen.

You can access insurance information, associated contacts, and related records from AEC Entity.

Simply look up the professional or business to associate them as a contact in another module. As a result of AEC’s directory integration, users will be prompted prior to adding contacts if there is a warning flag or any outdated insurance information.

CAPABILITIES INCLUDE:
 With the appropriate agency payment vendor, Contractors can pay fees online or in person for associated permits and receive a receipt for payment  All insurance carrier information can be inserted
 Warning flags prompt users about expired information
 Preview all associated records with the contact
 Chronologically track any communication with contractors  Track multiple insurance carriers
 Attach photos and proof of insurance to records
 Internet link provided for state licensing information  Send emails or text message to individuals
 Add new permits and projects from the AEC record
 Restrict information from certain users
Customer Relations
Management
The CRM module provides the tools you need to quickly capture and manage citizen issues. Users can effectively monitor, and track issues received through the phone or internet. The system logs opened and closed issues as well as their exact location. Users can also link recurring issues and complainants to ensure issues are handled in an appropriate manner.

Workflow activity tracking is designed with built-in processing and features to help users resolve various issues presented by their citizens. Administrators can customize workflows according to pre-existing or new processes. Users can identify the exact location of an incident by using the GIS map.

CAPABILITIES INCLUDE:
 Route issues for response
 Filter search results
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 Link issues to existing cases or permits
 Capture complainant details
 Use GIS map for pin-pointing exact location
 Audit log to ensure staff accountability
 Transfer workflows into other applications within the agency  Built-in workflow functionality
 Auto-send emails or letters
 Run reports to determine response times
 Track all details associated with the work order
 View entire history of the location
 Route workflows to different departments
 Attach documents to case records
Online Portal for
Contractors & Residents
eTRAKiT is a public facing portal that provides access to permit, project, land, and inspection information. Citizens can request inspections, pay fees, upload plans apply for permits and much more through eTRAKiT.
eTRAKiT offers different profile permissions including anonymous searching as well as restricted access to additional details based on the user’s role. Contractors have additional functions that enable them to request inspections for their projects. Additionally, if your jurisdiction uses outside plan review agencies or inspectors, eTRAKiT enables them to use back office functions through the portal such as entering results or uploading files.

FEATURES
 Apply for permits and projects online
 Schedule inspections and review online
 Upload application details and submit plans online
 Access to records based on user permissions and profile  Map-based parcel and address search based on jurisdictions GIS.  Configure your online portal to match your municipal website  Outside agencies including plan reviewers and external inspectors can enter data online in an Agency Center
 Contractors have access to record details specific to their role with a historical view of their accounts
 Online payment plugins for variety of payment providers including

1. Authorize.Net

2. CardConnect

3. CardKnox

4. CSJ (JetPay)

5. Elavon (Converge)

6. PayFlowLink (PayPal)

7. Paymentus

8. USA ePay

9. CentralSquare Payments
Receive receipts for payment
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Mobiles Inspectors and officers can carry information about permits and related inspections on their iPad, Android, or smartphone. Inspectors can modify the inspection status, enter inspection results and notes, schedule inspections, and more, all while in the field.

The Mobiles app allows remote users the flexibility to use CentralSquare from an iPad or Android device even without a constant wireless connection.

Mobile PDA allows access to the same details provided in the office, from smaller devices such as smartphones and tablets.

FEATURES
 Result scheduled inspections
 Use standard comments
 Modify, schedule, and route inspections
 View attachments
 View and update contact information
 View fee details
 To-do list of inspections for defined date range
 Add a warning or hold to a property
 View custom screens unique to each record type and add information  Mapping location uses
 Microsoft Bing
 Find permits, projects, or cases, through ad hoc search functionality  Contractor access to request inspections
 Inspection checklists
 Play recorded messages
 Send notifications via email
Cognos Reporting Powerful reporting tool to assist your agency with custom reports and advanced analytics.

FEATURES
 Workspace-user defined dashboard
 Basic Reporting and Analytics
Admin Skills Workshops
Workshop training classes, designed as hands-on workshops, include building code tables, picklists, system settings, and assignment of security permissions. Designed for supervisors, system administrator, and staff with decision-making authority, these workshops kick off the application configuration process for designated project committee members.

These classes generally are limited to six participants but may include up to ten (or as determined by mutual agreement of the CentralSquare and Customer Project Managers) and should be attended by those responsible for maintaining user information and code tables, as well as by subject-matter experts in the specific application area. Class time focuses on beginning the building process under the guidance of the assigned CentralSquare trainer, as well as to discuss CentralSquare recommendations regarding potential configuration options as identified during the Functional Analysis Workshop.
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Class Title Training Type Intended Audience Topics Location Subject Matter
Expert Training
Hands-on,
Instructor-led
Training
System Admins,
Client SMEs & Core
Team Members
General Navigation,
Overview of each module is
included, review of client’s
testing strategy
Remote
Admin Training Hands-on,
Instructor-led
Training
System Admins Covers all modules,
designed to train local
administrators of the system
and covers all areas of
configuration with the
system
Remote
Cognos Report
Writing Training
Hands-on,
Instructor-led
Training
Staff with some
forms & report
building experience
preferred, but not
required
Covers basic report
development and using the
Cognos report building
system, as well as how to
manage and run completed
reports
Remote
CUSTOM REPORT DEVELOPMENT:

The Report Development team will work directly with the Client to identify reports to be created. The scope includes hours for approximately 20 custom reports or forms. The reports will be chosen by the client in conjunction with the number of hours available for this task. CentralSquare will scope the requested reports and assign hours to each. The Client will then choose and prioritize the reports that are to fit into the available hours. Hours assigned to each report will include specifications, development of the report, and modifications (within scope). Delivery of the reports will be made as they are completed and approved.

DATA CONVERSION:

The data conversion process will start with mapping the client’s legacy data from Plus into the Community Development production database format. The process includes three major data refreshes, including the final cut-over for Go Live and any number of minor changes to correct small issues, such as spelling or placement of data within Community Development.

The conversion program will be designed to run while the target database is in full operation; however, because of the volume of data being processed, it will be ideal to execute the conversion during a window of minimal usage. Data conversion contracted for this project includes:

Modules To be
Converted
Definition of Module
Permitting Legacy permit data currently in the local government agency’s current system of record. Generally, this is data representing the agency’s construction or remodeling projects for properties within the agency’s jurisdiction. It is intended to ensure that the project plans comply with local, state, and national building and construction regulations
Planning & Zoning Legacy planning & zoning data currently in the local government agency’s currently system of record. Generally, this is data representing the agency’s development and design of land use and the built environment, including air, water and the infrastructure passing into and out of the agency’s jurisdiction. It is intended to ensure that the land use and zoning changes comply with local standards for land use, zoning, and urban planning Land Parcel
Management
The land parcel data commonly includes details of the ownership, precise location, dimensions, and value of individual parcels of land, within the agency’s jurisdiction. It is intended to provide comprehensive land details obtained from the agency’s source GIS system or Assessor’s office, to ensure accuracy
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Customer Relations
Management
Legacy data that contains historical communications primarily from property owners within the agency’s jurisdiction and generally consists of questions, issues, or complaints Entity Management The entity data commonly includes details of individuals and businesses that interact with the agency, on a regular recurring basis. It is intended to provide the agency with a quick reference source of contractor, engineer and tradesmen that can be linked to activities within the Community Development system
INTEGRATION/INTERFACES:

Integrations and/or interfaces Included in this project include:

Integration/Interface Use of System Type /
Frequency
Import/
Export
Interface Method / Future
Functionality
Financial Batch Export Queries system for payments and
creates a file to be processed in a
3rd party GL
Batch /
Nightly
Export SQL Stored Procedure & SSRS
Report
Financial Web Service Interface for fee payment
processing
On Demand Import/
Export
File Based DLL
Land Parcel Management
Update Routine
Ensures the land parcel data within
the system, stays up to date
Batch /
Nightly
Import File Based DLL
Bluebeam Opens and saves PDFs within the
system for plans review and
markup
On Demand File Based DLL
Contractor State Licensing
Board (CSLB)
Ensures the contractor data stays
up to date. This interface is only
available to California Customers
On Demand Import File Based DLL
ESRI GIS - Standard Uses a published rest endpoint
from ESRI to display map data with
the system
On Demand Import Web Services
Online Payment Gateway
<see Note * a. below>
Interface for credit card payment
processing
On Demand Import/
Export
File Based DLL
Over the Counter Payment
Gateway <see
Note * b. below>
Interface for credit card payment
processing
On Demand Import/
Export
File Based DLL
Notes:
* Client will need to contract with a new payment provider, to accept payments over the counter (OTC) and/or online and provide credentials to CentralSquare within 30 days of project initiation. a. Supported online Payment Providers
i. Authorized.Net
ii. USA ePay
iii. Elevon (Converge)
iv. PayFlowPro (PayPal)
v. Paymentus
vi. Cardknox
vii. CardConnect
viii. CSI (JetPay)
ix. CentralSquare Payments
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b. Supported over the counter Payment Providers
i. Paymentus
ii. Cardknox
Testing:

Testing will assess your team’s readiness for Go Live. This includes knowledge transfer, end user training, and change management significant tasks include:

Major Task Description
Testing The testing phase is an iterative process, conducted by the client, to help the consultants check the quality of the legacy data conversion and review the configuration decisions made during the discovery phase of the project. This phase is especially important to ensure a smooth transition before the system launches.

Go Live Support This session will be used to provide support for Go Live. The topic will be determined by client needs. See Go Live below.

TRAINING:

Within Testing and Deployment, End-user training is completed.

End-User Training
End-user training provides hands-on, process-based instruction focusing on key tasks related to users’ job responsibilities.

With the decision to choose CentralSquare facilitated training, an instructor provides training on the chosen contracted solutions. End-user classes incorporate extensive activities based on realistic scenarios focusing on processes and tools within the applications for productive use of the system at and after Go-Live. These classes generally are limited to 10-12 participants (or as determined by mutual agreement of the CentralSquare and Customer Project Managers). Agendas for each module will be based on specific configuration and workflows established during the implementation. Topics in enduser classes will include data entry, searching, reporting, and application navigation.

Core Solution Training
Type
Intended Audience Topics Location
End User
Training
Hands-on,
Instructor-led
Training
All Users of the
ComDev System
General Navigation, End
to end training of each
module based on the
specific configuration and
workflows established
during the
implementation
Remote
Other Training Events
Training Type Training Type Intended Audience Topics Location Data Querying Hands-on,
Instructor-led
Training
Data SMEs How to create ad-hoc
reports using tools within
the application.

Remote
Deployment:

Starts with the completion of your production environment. Then, we conduct a mock Go Live. Finally, once both teams agree on readiness, we Go Live. Significant tasks include:

Major Task Description
Configure Production
Environment
CentralSquare Consultant completes the Configuration Validation checklist of the system to verify system is configured to meet the requirements.
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Major Task Description
Plan Cutover Schedule
and Communications
Describes tasks to be handled by CentralSquare and Customer personnel during the initial cutover to Go-Live, including a detailed schedule of CentralSquare personnel covering each shift with resources, process for reporting issues, how they will be handled or escalated, contact names/phone numbers onsite staff, remote and third-party vendors.

Execute Go Live The Client transitions from their legacy system to the Community Development system and conducts their normal day-to-day business.

Go Live Support This session will be used to provide support for Go Live. The topic will be determined by client needs. See Go Live below.

GO LIVE (additional information):

CentralSquare offers a variety of Go-Live services to augment the Customer’s staff during the transition from the legacy product to the CentralSquare solution. Included in this project, the Project Managers will work together to create a Go-Live Plan to include a schedule of events, resource allocation, communications plan, and issue log. Additionally, CentralSquare will support the Go-Live with the following services:

Type of Resource; Role Number of Days Onsite or Remote
Consultant: Supporting staff during go live event 5 Remote CentralSquare Project Manager; Supporting project during go live event As Needed Remote 534
Definitions:

Key Deliverables Description Frequency Owners
Project
Management Plan
Guides the project
management team to
monitor and control
expectations, budget,
scope, schedule,
communication, and
quality.

Finalized during the Planning phase
during discussions about Project team
and timeline
CentralSquare Project
Management Team
Project Schedule
Identifies tasks to be
completed during the life
cycle of the project
including the key SOW
tasks, resources, durations,
milestones, and delivery
dates
An updated schedule will be provided as
needed
CentralSquare Project
Mgr. and Customer
Project Manager
Communication
Plan
Describes the key project
team members from
CentralSquare and
Customer Executives to
Subject Matter Experts,
includes, roles and
responsibilities, and
contract information
Provided at Kick-off and updated as
required
CentralSquare Project
Manager
Decision Workbook Workbook that contains
customer decisions
regarding processes and
system configurations.

Provided at Kick-off and updated as
required
CentralSquare
Consultant
Monthly Status
Report
Following regular status
meetings, the
CentralSquare PM will
provide an updated status
report
Determined by Customer need during
kickoff
CentralSquare Project
Manager and Customer
Project Manager
Issues Log
Tracks risks and issues,
Assignments, progress,
mitigation strategies, due
dates, and other relevant
information for managing
risks and issues
Determined by Customer need during
kickoff
CentralSquare Project
Manager and Customer
Project Manager
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Risk Register
Classifies the risk based on
probability and impact to
the overall project and
develops mitigation and
response plans, where
appropriate.

Maintained throughout the course of the
Project CentralSquare Project
Manager and Customer
Project Manager
Implementation
Guide
End-to-end summary of
engagements that make
up the CST
implementation.

Provided at Kick-off and referred to
throughout the project
CentralSquare Project
Manager
Test Workbook
Workbook that contains all
test and assessment cases
completed during the
implementation.

Provided at Kick-off and updated as
required
CentralSquare Project
Manager
Go Live Plan
Describes tasks to be
handled by CentralSquare
and Customer personnel
during the initial
cutover to Go-Live,
including a
detailed schedule of
CentralSquare personnel
covering each shift with
resources, process for
reporting issues, how they
will be handled or
escalated, contact
names/phone numbers
onsite staff, remote and
third-party vendors.

A draft will be provided prior to Go-Live,
reviewed with the Customer, and
finalized for distribution to stakeholders
CentralSquare Project
Manager and Customer
Project Manager
Services to
Support/CSM
Project Closeout
Report
The delivery of formal
closing documents as part
of acceptance includes
completed project artifacts
outlined above, change
order summary, lessons
learned and
recommendations, risk and
issues log, customer
support transition plan,
and description of steady
state operations.

Provided at the end of the project CentralSquare Project Manager
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APPENDIX B: RACI Chart
Sales
Cust
Succe
ss
Suppo
rt
Account ExecutivePMO SeniorLeadershipPM ManagerProject ManagerRMO LeadershipResource PlannerSD SeniorLeadershipSD ManagerTrainerConsultantInstallationSpecialistData ConversionSpecialistGIS ManagerGIS SpecialistCloud TeamLeadershipCloud TeamCust SuccessManagerSupport AnalystCustomer SponsorCustomer PMCust FunctionalLeadsCustomer SME's Phase 1: Initiation
Assigning a Project Manager R, A I I
Sending Introductory Email to Customer R, A I I
Performing Contract / Project Setup and Intelligence Review C R, A I Sizing a Project for Velocity C R, A C
Requesting an Implemenation Guide C R, A
Building Project Folder R, A
Building Initial Draft of Project Artifacts C R, A
Initially Contacting Third Party Vendors R, A
Requesting Work From the Cloud Team R, A I I I
Sending Welcome Package to Customer R, A I I I I I
Conducting Sales to Service Transition Call C C R, A C I I I I C I I Initially Calling Customer R, A I I C I I
Drafting Initial Project Timeline R, A I C I I C C C
Completing Project Initiation Checklist R, A I C C C
Phase 2: Planning
Performing Project Kickoff I I C R, A I C C C C C C C I I C C C C Scheduling Resources I C C R A,C I I I I C I I
Reviewing Project Plan with Customer R, A I I C C C
Receiving Project Plan Customer Signoff I I R, A I I I I I I I I I I I I C C C C Completing Project Planning Checklist R, A I C C C
Phase 3: Monitor & Control
Conducting Cadenced Status Meetings R, A C C C C C C C C C Completing Monthly Status Reporting I I R, A I I C C C C I C I I I Performing Issue Management I C R, A I C C C C C C C I C I C C C Performing Risk Management I C R, A I C C C C C C C I C C C C C Performing Change Control Management R, A C C C C
Performing Change Management C R, A R R R
Performing Project Health Management I C R, A I C C C C C C C I C I C C C Performing Executive Stakeholder Management I C R, A I C C C C C C C I C C C I I Preparing for Go-Live I C R, A I C C R R C C C C C I I I C C C Conducting Go-Live I I C R, A I C C,R R R R C R R I C C C Workflow Analysis I I I C C R A C C C I C C C
Analyze Technical and Functional Requirements I I I C C R A C C C I C C C Data Migration Mapping I I I C I A C R C C I C I C
Build Environment I I I I A R C C I I C C
Configure Environment C R C C C I I C C
Unit Testing A R C C C I I C C
Adminstrative Workshops R C I I I I C C
Data Conversion I I A C R I C I I I I
Testing I I R C I C C
Fix Issues and Retest I C R A C C C
System Sign-Off A I R C I C I C C C
Knowledge Transfer/User Training I I R
Go-Live Readiness A I R I I I I
Configure Production Environment I I I I C R C C
Plan Cutover Schedule and Communications R C C C I C C C Pre-Launch Testing I R C
Go-Live + Communication I C R C C C I I I I
Phase 4: Closeout
Completing Transition to Support and CSM I I R, A I I I I I I I I R R C C C Delivering Post Go-Live Items R, A R R R R R
Performing Post Go-Live Issue Resolution R, A R R R R R R R Conducting Closeout Meeting with Customer R, A I C C C
Performing Contract Reconciliation R, A I
Completing Lessons Learned I C R, A I C I C C C C C C C I C I I Archiving Project Folder R, A
Performing Management Review C R, A
Closing Project in OpenAir R, A
Completing Project Closeout Checklist R, A
Stage 1: Analysis
Stage 2: Configuration
Stage 3: Testing
Stage 4: Deployment
Service Delivery Customer
Cloud
Project Management RMO GIS Services
• Responsible (Who is/will be doing this task?)
• Accountable (Who is the decision maker?)
• Consulted (Anyone/stakeholders that can talk about it.) • Informed (Whose work depends on this task/needs to be kept up to date?)
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APPENDIX C: General GIS Requirements
Introduction
Community Development includes a property record application where users can look up current parcel activity and information related to the parcel. The GIS Module is at the heart of the system and provides comprehensive land data obtained from either the assessor’s office or the client’s GIS data to ensure accuracy. Users can conduct a preliminary screening of a property and then link a project or permit directly through GIS Module.

The GIS integration requires map services to be provided and maintained by the client, and our Land Management Update Routine (LTUR) performs a one-way update process pushing updates to the Community Development data daily/weekly/monthly outside of business hours.

GIS Data Requirements
All GIS feature classes, also referred to as layers, must have correct geometry in an Esri-recognized local projection. The client is responsible for providing and maintaining GIS data in a consistent format, including the feature class name, location, field schema, projection, etc. Unique types of features, such as parcels, must be provided and maintained in single feature classes. For example, if the client’s jurisdiction is crosses two counties who provide street data, the client will need to combine both street data feature classes into a singular layer.

The Land Management Workbook, to be completed by the client, maps the field in the client’s GIS data to the appropriate fields in the Community Development database enabling them to appear in the system. Data attribute requirements are limited; however, missing attributes will result in empty values for the associated attributes in the system. A limited number of user-defined fields are available in the system to enable the client to include attributes that our outside of the standard fields.

GeoTypes
GeoTypes are the core GIS features integrated into Community Development and include any of the following features:
 Parcels: required
 Address Points: recommended
 Streets: recommended
 Others can be discussed with the GIS Specialist during the initial consultation A dedicated ID field (string data type) is required for each GeoType feature class except for parcels, which should use the Assessor’s ID for that purpose. Each ID value must be unique across GeoTypes, and the ID and other critical fields are required to be present in the primary published map service. Condominiums may be represented with stacked parcels.

Boundary / Polygon Layers
Typical boundary layers include zoning, city limits, historical districts, flood zones, etc. A limited number of spatial joins can be configured by CentralSquare to add attributes from boundary data to the GeoTypes to enable full functionality. The most common example is joining the zoning layer to the parcel data.

ArcGIS Enterprise (Server) Requirements
Community Development requires map services to be published with Esri’s ArcGIS Enterprise or ArcGIS Server. The ArcGIS instance does not need to be solely dedicated to this purpose but must meet the requirements below.  ArcGIS Enterprise versions 10.3.1 to 10.8 (check with CentralSquare on later version compliance) 538
 Authentication/Security
o The client must provide CentralSquare with login credentials for an ArcGIS Portal User o Web-tier authentication using Windows Authentication is not supported for cloud clients; however, on premise clients with version 18.2 HF09 or later may utilize this. o SAML based Active Directory based Federation is not supported. However, Portal for ArcGIS can use built-in account.
 If Community Development is to be hosted by CentralSquare, the client’s map services must be available externally through the web. This typically requires the ArcGIS Web Adapter to reside in the client’s DMZ. o CentralSquare will require built-in user’s admin credentials for map rendering and source of data for Land Management Update Routine.
o SAML and Web-tier based authentication will not be supported. Development work in progress.

ArcGIS Online
ArcGIS Online may be used to provide map services as an alternative to ArcGIS Server for the Standard GIS License only.

NOTE: ArcGIS Online is not supported for the eTRAKiT map.

ArcGIS Map Service Requirements
The Community Development GIS integration relies on ArcGIS map services that are created and maintained by the client.

Map Service Rules and Requirements
 Community Development requires an Admin Portal user and password to consume REST URLs from a portal. An ArcGIS Online user may be provided as an alternative if the service is not to be used for the GIS Advanced licenses/Spatial Advisor or eTRAKiT.
 Map services must be available externally through the web for Cloud clients.  All map services must start with Layer (0) and run consecutively without gaps between layer numbers  Additional service-specific requirements are outlined below Required Map Services
The client is required to provide a minimum of three dedicated ArcGIS map services. Those and additional optional services are outlined below.

1. Feature Map Service
This map services provides the GIS data necessary to populate and maintain the data in the Community Development’s Geo Tables in the cloud SQL database. This service must include all layers to be integrated with Community Development. Feature access must be enabled with Query/Data operations allowed, and all layers must be in same projection.

2. GeoType Map Service
The GeoType Map Service is used to provide access to ESRI feature class data in the management of the Community Development Software. Feature access must be enabled, and all layers must be in same projection.

3. Display Map Service
The Display Map Service provides an interactive view map in the application. The client should build this map service with the symbology, scaling, and layer order that will provide end users the best and most complete experience. This service requires a geometry service and a printing service 539

4. Optional Display Map Services
Other map services can be added to Community Development’s Map Viewer to provide more mapping functionality to your users, in a view-only mode. This service requires a geometry service and a printing service.

Additional Details:
 Aerial Photos:
o Must be a tiled, cached map service.
o Image Services are not supported.
 Community Development’s Map Viewer supports Street View and Bird’s View with a valid Google map key.

Clients will need to provide this key and add the Community Development URL as a valid referrer.  Map services can be specific to departments within your organization, such as public works, utilities, recreation facilities, etc.
 Community Development’s Map Viewer can support:
o Routing services via Network Analysis Server
o Geocoding services
APPENDIX D: Cloud Services (Cloud Services - AWS)
CentralSquare and Customer will conduct the following as part of this project.

SAAS
Tasks Name Description Customer Role CentralSquare Role

1. Creation Initial Creation of CentralSquare’s
Community Development software
 Attend Discovery
Call
 Discovery Call
 Complete install and
data migration

2. Test Account
Creation
Test Account Creation is the creation
of the test account which is cloned
from the pre-production
environment.
 Validate Account  Create Test Account
Assumptions
 CentralSquare will migrate all Customer data into the Community Development database and confirm that the Community Development software’s primary system functions are available.  CentralSquare will install the Community Development software into our Public Government Cloud environment, managed by our Cloud services team centers and provide access to the Customer through a standard URL. We will also provide a VPN device to access the URL to secure Customer required third-party integrations identified for this project.
 CentralSquare will complete all work remotely
 CentralSquare will create one (1) Production Account and one (1) Test Account as part of the Agreement.

Additional accounts will require additional hours added under separate quote by mutual written agreement at CentralSquare’s prevailing rates.
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Roles and Responsibilities
CentralSquare:
 Load files and perform initial configuration of all licensed CentralSquare applications, including base and add-on modules, and interfaces to third-party applications. Configuration includes activating appropriate modules, table set up, and selection of mandatory configuration settings based on combination of CentralSquare applications purchased.
 Set up test environment as mirror copy of the production environment.  Conduct a test to verify that CentralSquare applications have been installed and configured successfully, operating properly, and are ready to begin the implementation and configuration process. Note: Not all CentralSquare components may be ready at this point, for a full test, but a reasonable effort ensures CentralSquare components are ready for the next step in the process. CentralSquare installation services will ensure that all needed components are prepared and ready prior to conducting subsequent activities for the specific application area according to the agreed upon Project Schedule.

Customer:
 Participate in planning activities (conference calls, emails) with CentralSquare Application Installation Consultant and Technical Lead.
 Provide access to Customer’s servers (including third-party) as required for CentralSquare Technical Lead and Application Installation Consultant to perform installation and migration tasks.  Attend knowledge transfer sessions focusing on how to prepare workstations or mobile computers to run CentralSquare applications.

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APPENDIX E: SAMPLE Implementation Timeline & Project Plan Below is an example of CentralSquare’s proposed timeline and project plan with proposed dates. Actual dates will be mutually agreed between both Customer & CentralSquare Project Managers.

Sample Project Timeline
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Sample Project Plan
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Exhibit 6

CITY OF SOUTH LAKE TAHOE

PROFESSIONAL SERVICES AGREEMENT
This Agreement is made and entered into as of the _________day of ________ 2023 by and between the City of South Lake Tahoe, a municipal corporation (“City”) and CentralSquare Technologies, LLC (“Consultant”).

RECITALS
A. Consultant is specially trained, experienced and competent to perform the special services which will be required by this Agreement.

B. Consultant possesses the skill, experience, ability, background, certification and knowledge to provide the services described in this Agreement on the terms and conditions described herein.

C. City desires to retain Consultant to render professional services as set forth in this Agreement.

AGREEMENT

1. Scope of Services. Consultant shall perform the services set forth in this agreement and shall provide said services at the time, place, and in the manner specified in this agreement. Consultant shall have no power or authority by this Agreement to bind City in any respect.

The Consultant agrees that it has satisfied itself by its own investigation and research regarding the conditions affecting the work to be done and labor and materials needed, and that its decision to execute this Contract is based on such independent investigation and research.

All services provided by Consultant pursuant to this Agreement will be provided in accordance with the terms set forth in the Solutions Agreement. Solutions Agreement Exhibit 1, “Solution and service Fee Schedule,” outlines the fees and compensation which shall be paid pursuant to the Solutions Agreement.

2. Term/Time of Performance. The services by Consultant are to commence upon the execution of the Agreement and continue for five years with automatic renewal for additional successive one (1) year terms unless earlier terminated pursuant to any of the Agreement’s provisions (a “Renewal Term” and, collectively, with the Initial Term, the “Term”). Either Party may elect to end renewal of the Agreement by 545
issuing a notice of non-renewal, in writing, to the other Party six (6) months prior to the expiration of the Agreement term.

Compensation. Consultant shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit "1" of the Solutions Agreement. The total compensation for the project by Consultant , shall not exceed $279,475.00 dollars within the term of this agreement without written approval of the City Council or City Manager, as applicable. The City reserves the right to award its total compensation to one bidder or apportion thereof among several bidders as the City may deem to be in its best interest.

Payment by City under this Agreement shall not be deemed a waiver of defects, even if such defects were known to City at the time of payment. Payment is contingent upon compliance with all terms and conditions of the Agreement, as set forth herein. Consultant shall obtain prior written authorization from the City Project Manager for any costs in excess of budgeted amounts for each line item, task, or obligation under the Scope of Services.

3. Method of Payment. Consultant shall submit monthly billings to City describing the work performed during the preceding month. Consultant’s bills shall include a brief description of the services performed, the date the services were performed, the number of hours spent and by whom, the applicable hourly rate, and a description of any reimbursable expenditures. City shall pay Consultant no later than 30 days after approval of the monthly invoice by City staff.

4. Extra Work. At any time during the term of this Agreement, City may request that Consultant perform extra work by way of a mutually agreed upon Change Order.

As used herein, “Extra Work” means any work which is determined by City to be necessary for the proper completion of the Project, but which the parties did not reasonably anticipate would be necessary at the execution of this Agreement.

Consultant shall not perform, or be obligated to undertake additional expense for a change in scope without prior written authorization from City.

5. Termination. This Agreement may be terminated by City or Consultant immediately for cause or without cause upon thirty days (30) days written notice of termination.

Upon termination, Consultant shall be entitled to compensation for services performed up to the effective date of termination, and City shall be entitled to all work performed to that date.

Termination, revocation, or expiration of this Agreement shall not release either party from liability resulting from an event which occurred prior to such termination, revocation or expiration.
546

6. Ownership of Documents.

CentralSquare retains all right, title and ownership to its intellectual property, including but not limited to its software, updates, upgrades, or enhancements thereto, and its associated documentation, which is licensed to CentralSquare’s client base. The proposed solution is a COTS (Commercial Off The Shelf) solution.

Consultant shall, at Consultant’s expense, provide such applicable reports, plans, studies, documents and other writings to City upon written request. All documents prepared by Consultant are confidential and shall be maintained to preserve their confidential nature..

Copies of such documents shall be provided to City for inspection at City offices when it is practical to do so. Otherwise, unless an alternative is mutually agreed upon, the receipt of notices in this Agreement. d. Where City has reason to believe that such records or documents may be lost or discarded due to dissolution, disbandment or termination of Consultant’s business, City may, by written request by any of the abovenamed officers, require that custody of the records be given to City and that the records and documents be maintained at City offices. Access to such records and documents shall be granted to any party authorized by Consultant, Consultant’s representatives, or Consultant’s successor-ininterest. 547

8. Independent Contractor. It is understood that Consultant, in the performance of the work and services agreed to be performed, shall act as and be an independent contractor and shall not act as an agent or employee of City. Consultant shall obtain no rights to retirement benefits or other benefits which accrue to City’s employees, and Consultant hereby expressly waives any claim it may have to any such rights. All employees, agents, contractors or subcontractors hired or retained by Consultant are employees, agents, contractors or subcontractors of Consultant and not of the City.

Consultant hereby indemnifies and holds City harmless from any and all claims that may be made against City based upon any contention by any third party that an employer-employee relationship exists by reason of this Contract.

9. Interest of Consultant. Consultant, (and principals, associates and professional employees of consultant) covenants and represents that it does not now have any investment or interest in real property and shall not acquire any interest, direct or indirect, in the area covered by this Agreement or any other source of income, interest in real property or investment which would be affected in any manner or degree by the performance of Consultant’s services hereunder. Consultant further covenants and represents that in the performance of its duties hereunder no person having any such interest shall perform any services under this Agreement.

Consultant is not a designated employee within the meaning of the Political Reform Act because Consultant:
a. Will conduct research and arrive at conclusions with respect to his/her rendition of information, advice, recommendation or counsel independent of the control and direction of City or of any City official, other than normal agreement monitoring; and,
b. Possesses no authority with respect to any city decision beyond rendition of information, advice, recommendation or counsel. [FPPC Reg. 18700(a)(2)].

All work performed by Consultant under this Agreement shall be in accordance 548
with applicable legal requirements and shall meet the standard of quality ordinarily to be expected of competent professionals in Consultant’s field of expertise.

11. Compliance with Laws. Consultant shall comply with all applicable federal, state, regional and local laws, codes, ordinances and regulations in carrying out his/her duties under this Agreement. Consultant shall observe and comply with all applicable laws, ordinances, regulations and codes of federal, state and local governments, and shall commit no trespass on any public or private property in performing any of the work authorized by this Agreement. The City, its officials, officers, elected officials, appointed officials and employees shall not be liable at law or in equity as a result of any failure of Consultant to comply with this section.

In the event it is determined that the Consultant is required to pay prevailing wages for the work performed under this Agreement, the Consultant shall pay all penalties and wages as required by law.

Consultant shall maintain a City of South Lake Tahoe business license at all times services are performed under this Agreement.

13. Indemnity. Consultant hereby agrees to and shall indemnify and hold harmless City, its elected and appointed boards, officers, agents, employees and volunteers from and against any liability for any and all claims, demands, actions, losses, damages and injuries, direct (including any and all costs and expenses in connection therein), arising out of this Agreement or caused in any way by Consultant’s negligent performance of this Agreement or its breach of its obligations contained in this Agreement, except for any such claims arising out of the negligence or willful misconduct of the City.

City does not, and shall not, waive any rights against Consultant which it may have by reason of the aforesaid hold harmless agreement, because of the acceptance by City, or the deposit with City by Consultant, of any of the insurance policies hereinafter set forth.

This hold harmless agreement by Consultant shall apply to all damages and claims for damages, or alleged to have been suffered, by reason of any of the aforesaid operation of Consultant or any subcontractor, regardless of whether or not such 549
insurance policies shall have been determined to be applicable to any of such damages or claims for damages.

Consultant further waives any and all rights to any type of express or implied indemnity, claims, demands, costs, charges and expenses and causes of action of whatsoever arising out of or in any way connected with this Agreement, and consultant’s work under this Agreement.

14. Insurance Requirements.
a. Consultant, at Consultant’s own cost and expense, shall procure and maintain, for the duration of the contract, the following insurance policies. i. Workers’ Compensation Coverage. Consultant shall maintain Workers’ Compensation Insurance and Employer’s Liability Insurance for his/her employees in accordance with the laws of the State of California. In addition, Consultant shall require each subcontractor to similarly maintain Workers’ Compensation Insurance and Employer’s Liability Insurance in accordance with the laws of the State of California for all of the subcontractor’s employees. Any notice of cancellation of all Workers’
Compensation policies must be received by City at least thirty (30) days prior to such change. Consultant shall endeavor to provide thirty (30) days written notice of nonrenewal of any Workers’ Compensation policies. The insurer shall agree to waive all rights of subrogation against City, its officers, agents, employees and volunteers for losses arising from work performed by Consultant for City.
ii. Commercial General Liability Coverage. Consultant shall maintain commercial general liability insurance no less broad than ISO form CG 00 01 in an amount not less than one million dollars ($1,000,000) per occurrence for bodily injury, personal injury and property damage. Coverage must be made on the standard Occurrence form. Claims-Made forms are not acceptable without prior written consent of City. City of South Lake Tahoe must be included as or endorsed as an additional insured for liability arising out of ongoing operation by on behalf of Consultant. If a commercial general liability insurance form or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the work to be performed under this Agreement or the general aggregate limit shall be at least twice the required occurrence limit. 550
iii. Automobile Liability Coverage. Consultant shall maintain automobile liability insurance covering bodily injury and property damage for all activities of the Consultant arising out of or in connection with the work to be performed under this Agreement, including coverage for owned, hired and non-owned vehicles, in an amount of not less than one million dollars ($1,000,000) combined single limit for each occurrence.
iv. Professional Liability Coverage. Consultant shall maintain professional errors and omissions liability insurance for protection against claims alleging negligent acts, errors or omissions which may arise from Consultant or by its employees, or subcontractors. The amount of this insurance shall not be less than one million dollars ($1,000,000) on a claims-made annual aggregate basis, or a combined single-limit per occurrence basis.
b. Endorsements. Each general liability and automobile liability insurance policy shall be with insurers possessing a AM Best’s rating of no less than A:VII and shall be endorsed with the following specific language:
i. City, its elected or appointed officers, officials, employees, agents and volunteers are to be covered as additional insured’s under Consultant’s General Liability and Automobile Liability policies with respect to liability arising out of this Agreement and/or work performed by or on behalf of the Consultant, including materials, parts or equipment furnished in connection with such work or operations.
ii. This policy shall be considered primary insurance as respects City, its elected or appointed officers, officials, employees, agents and volunteers. Any insurance maintained by City, including any selfinsured retention City may have, shall be considered excess insurance only and shall not contribute with it.
iii. This insurance shall act for each insured and additional insured as though a separate policy had been written for each, except with respect to the limits of liability of the insuring Consultant. iv. The insurer waives all rights of subrogation against City except for Consultant’s Professional Liability and Employers’ Liability policies, its elected or appointed officers, officials, employees or agents. 551
v. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to City, its elected or appointed officers, officials, employees, agents or volunteers.
vi. Notice of cancellation will be provided in accordance with policy provisions.
c. Deductibles and Self-Insured Retentions. The Consultant shall be responsible for all deductibles in all of Consultant’s insurance policies. The amount of deductibles for insurance coverage required herein shall be reasonable and approved by the City Attorney.
d. Certificates of Insurance. Consultant shall provide certificates of insurance with original endorsements to City as evidence of the insurance coverage required herein. Consultant shall not commence work under this contract until all insurance required under this section has been approved by City as to form, amount and carrier, nor shall Consultant allow any subcontractor to commence work on any subcontract until all similar insurance required and reasonably consistent limits of the subcontractor has been so obtained and approved. Certificates of insurance shall contain no exclusions unless negotiated with the City Attorney and approved, in writing, by the City Attorney.

15. Notices. Any notice required to be given under this Agreement shall be in writing and either served personally or sent prepaid, first class mail. Any such notice shall be addressed to the other party at the address set forth below. Notice shall be deemed communicated within 48 hours from the time of mailing if mailed as provided in this section.

If to City: City of South Lake Tahoe
1901 Lisa Maloff Way
South Lake Tahoe, CA 96150
Provide a copy to: City Attorney’s Office
City of South Lake Tahoe
1901 Lisa Maloff Way, Suite 300
South Lake Tahoe, CA 96150
If to Consultant: CentralSquare Technologies, LLC
1000 Business Center Drive
Lake Mary, FL 32746
Attn: Legal/Contracts
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16. Subcontracting. The parties recognize that a substantial inducement to City for entering into this Agreement is the professional reputation, experience and competence of Consultant. Consultant shall not subcontract any portion of the work to be performed under this Agreement without giving notice to the City.

Consultant shall be fully responsible to City for all acts or omissions of the subcontractor to the same extent it is responsible for its own employees. Nothing in the Agreement shall create any contractual relationship between City and subcontractor nor shall it create any obligation on the part of City to pay or to see to the payment of any monies due to any such subcontractor other than as otherwise required by law.

17. Waiver. Waiver of a breach or default under this Agreement shall not constitute a continuing waiver of a subsequent breach of the same or any other provision under this Agreement.

18. Dispute Resolution. Any dispute concerning this Agreement will be addressed in accordance with Section 17, of the Solutions Agreement.

19. Controlling Law Venue. This Agreement and all matters relating to it shall be governed by the laws of the State of California and any action brought relating to this Agreement shall be held exclusively in the Superior Courts in the County of El Dorado, South Lake Tahoe Division.

20. Prohibited Interests. Consultant maintains and warrants that it has not employed nor retained any Consultant or person, other than the independent contractors hired in accordance with Consultant’s standard business practice, to solicit or secure this Agreement. Further, Consultant warrants that it has not paid nor has it agreed to pay any Consultant or person, other than a bona fide employee working solely for Consultant or an independent contractor hired as discussed above, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. For breach or violation of this warranty, City shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom.

21. Equal Opportunity Employment. Consultant represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color, national origin, disability, ancestry, sex or age. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. Consultant shall also comply with all relevant provisions of City’s Minority Business Enterprise program, Affirmative Action Plan, or other related programs or guidelines currently in effect or hereinafter enacted.
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22. Drug-Free Workplace Certification. By signing this Agreement, Consultant hereby certifies under penalty of perjury under the laws of the State of California that the Consultant will comply with the requirements of the Drug-Free Workplace Act of 1990 (Government Code Section 8350, et seq.) and will provide a drug-free work place by taking the following actions:
a. Publish a statement notifying employees that unlawful manufacture, distribution dispensation, possession, or use of a controlled substance is prohibited and specifying actions to be taken against employees for violations, as required by Government Code Section 8355 (a). b. Establish a Drug-Free Awareness Program as required by Government Code Section 8355(b) to inform employees about all of the following:
i. The dangers of drug abuse in the workplace;
ii. The person’s or organization’s policy of maintaining a drug-free workplace;
iii. Any available counseling, rehabilitation and employee assistance program; and
iv. Penalties that may be imposed upon employees for drug abuse violations. c. Provide, as required by Government Code Section 8355(c), that every employee who performs grant activities under this Agreement:
i. Will receive a copy of the Consultant’s drug-free policy statement; and ii. Will agree to abide by the terms of the Consultant’s statement as a condition of employment on this Agreement.

Failure to comply with these requirements may result in suspension of payments under this Agreement or termination of the Agreement, or both, and Consultant may be ineligible for award of any future City agreements if City determines that any of the following has occurred: the Consultant (1) has made false certification, or (2) violates the certification by failing to carry out the requirements as noted above.

23. Anti-Lobbying Certification. Consultant shall submit to City the Anti-Lobbying Certification contained in Exhibit A. Further, Consultant shall require that the language of the certification in Exhibit A be included in all contracts or subcontracts entered into in connection with this Agreement and that all Consultants and contractors shall certify and disclose accordingly.

24. Debarment, Suspension, Ineligibility and Voluntary Exclusion. By signing this Agreement, Consultant assures that neither it nor its principals, is presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participating in covered transactions by any Federal department or agency. 554

25. Americans with Disabilities Act. By signing this Agreement, Consultant assures the City that it complies with the American with Disabilities Act (ADA) of 1990, (42 U.S.C. 12101, et. seq.), which prohibits discrimination on the basis of disability, as well as all applicable regulations and guidelines issued pursuant to ADA.

26. Amendments. This Agreement may be modified or amended only by a written document executed by both Consultant and City and approved as to form by the City Attorney.

27. Severability. If any term or portion of this Agreement is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect.

28. Entire Agreement. This Agreement constitutes the complete and exclusive statement of Agreement between City and Consultant. All prior written and oral communications, including correspondence, drafts, memoranda, and representations, are superseded in total by this Agreement.

29. Execution. This Agreement may be executed in several counterparts, each of which shall constitute one and the same instrument and shall become binding upon the parties when at least one copy hereof shall have been signed by both parties hereto. In approving this Agreement, it shall not be necessary to produce or account for more than one such counterpart.

30. Reserved .

31. Authority to Enter Agreement. Consultant has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and to bind each respective party.

Attachment:

Exhibit A - Anti-Lobbying Certification
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EXHIBIT A

ANTI-LOBBYING CERTIFICATION
Consultant shall submit to City this certification prior to or at the time of the execution of this Agreement.

This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by Section 1352, Title 31, U. S. Code. Any person who fails to file the required certification shall be subject to a civil penalty not less than $10,000 and no more than $100,000 for such failure.

The undersigned certifies, to the best of his or her knowledge or belief, that:

1. No federal appropriated funds have been paid or will be paid, by or on behalf of it, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement; and

2. If any funds other than federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, cooperative agreement, it will complete and submit Standard Form-LLL, “Disclosure Form to Report Lobbying,” in accordance with its instruction.

Consultant:

By:________________________________________
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CITY OF SOUTH LAKE TAHOE

PROFESSIONAL SERVICES AGREEMENT
This Agreement is made and entered into as of the _________day of August 2023 by and between the City of South Lake Tahoe, a municipal corporation (“City”) and HdL Companies.

RECITALS
A. Consultant is specially trained, experienced and competent to perform the special services which will be required by this Agreement.

B. Consultant possesses the skill, experience, ability, background, certification and knowledge to provide the services described in this Agreement on the terms and conditions described herein.

C. City desires to retain Consultant to render professional services as set forth in this Agreement.

AGREEMENT

All services provided by Consultant pursuant to this Agreement will be provided in accordance with the terms set forth in the Exhibit A, “Scope of Services,” attached hereto and incorporated herein by reference. Exhibit B, “Compensation Schedule,” attached hereto and incorporated herein by reference, outlines the fees and compensation which shall be paid pursuant to this Agreement.

1. Term/Time of Performance. The services by Consultant are to commence upon the execution of the Agreement and continue annually until further written notice.
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2. Compensation. Compensation to be paid to Consultant shall be in accordance with the Schedule set forth in Exhibit B which is attached hereto and incorporated herein by reference. In no event shall Consultant’s compensation, including travel and out-of-pocket expenses, exceed $76,500.00 for one-time implementation cost, and $22,000.00 annually, subject to CPI increase as outlined in the Fees section of Schedule Z, without additional written authorization from City. Payment by City under this Agreement shall not be deemed a waiver of defects, even if such defects were known to City at the time of payment. Payment is contingent upon compliance with all terms and conditions of this Agreement, as set forth herein. Consultant shall obtain prior written authorization from the City Project Manager for any costs in excess of budgeted amounts for each line item, task, or obligation under the Scope of Services.

4. Extra Work. At any time during the term of this Agreement, City may request that Consultant perform extra work. As used herein, “Extra Work” means any work which is determined by City to be necessary for the proper completion of the Project, but which the parties did not reasonably anticipate would be necessary at the execution of this Agreement. Consultant shall not perform, nor be compensated for, extra work without prior written authorization from City.

5. Termination. This Agreement may be terminated by City or Consultant immediately for cause or without cause upon thirty days (30) days written notice of termination. Upon termination, Consultant shall be entitled to compensation for services performed up to the effective date of termination, and City shall be entitled to all work performed to that date.

Termination, revocation, or expiration of this Agreement shall not release either party from liability resulting from an event which occurred prior to such termination, revocation or expiration.
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6. Ownership of Documents.

All plans, studies, documents and other writings, including working notes and internal documents, prepared by and for Consultant, its officers, employees and agents and subcontractors in the course of implementing this Agreement, shall become the property of City upon payment to Consultant for such work, and City shall have the sole right to use such materials in its discretion without further compensation to Consultant or to any other party.

Consultant shall, at Consultant’s expense, provide such reports, plans, studies, documents and other writings to City upon written request. All documents prepared by Consultant are confidential and shall be maintained to preserve their confidential nature. Release of any such documents to third parties shall only be made upon written consent of City.

7. Consultant’s Books and Records.
a. Consultant shall maintain any and all ledgers, books of account, invoices, vouchers, canceled checks, and other records or documents evidencing or relating to charges for services, or expenditures and disbursements charged to City for a minimum period of three (3) years, or for any longer period required by law, from the date of final payment to Consultant for services provided pursuant to this Agreement.
b. Consultant shall maintain all documents and records which demonstrate performance under this Agreement for a minimum period of three (3) years, or for any longer period required by law, from records shall be available at Consultant’s address indicated for the date of termination or completion of this Agreement. c. Any records or documents required to be maintained pursuant to this Agreement shall be made available for inspection or audit, at any time during regular business hours, upon written request by the City Manager, City Attorney, City Auditor or a designated representative of these officers. Copies of such documents shall be provided to City for inspection at City offices when it is practical to do so. Otherwise, unless an alternative is mutually agreed upon, the receipt of notices in this Agreement.
d. Where City has reason to believe that such records or documents may be lost or discarded due to dissolution, disbandment or termination of Consultant’s business, City may, by written request by 559
any of the above-named officers, require that custody of the records be given to City and that the records and documents be maintained at City offices. Access to such records and documents shall be granted to any party authorized by Consultant, Consultant’s representatives, or Consultant’s successor-in-interest.

Consultant shall obtain no rights to retirement benefits or other benefits which accrue to City’s employees, and Consultant hereby expressly waives any claim it may have to any such rights. All employees, agents, contractors or subcontractors hired or retained by Consultant are employees, agents, contractors or subcontractors of Consultant and not of the City.

City is not required to make any deductions or withholdings form the compensation payable to Consultant under the provisions of this Contract, and is not required to issue W-2 Forms for income and employment tax purposes for any of Consultant’s assigned personnel. Any third party persons employed by Consultant shall be entirely and exclusively under the direction, supervision, and control of Consultant. Consultant hereby indemnifies and holds City harmless from any and all claims that may be made against City based upon any contention by any third party that an employer-employee relationship exists by reason of this Contract.

Consultant is not a designated employee within the meaning of the Political Reform Act because Consultant:
a. Will conduct research and arrive at conclusions with respect to his/her rendition of information, advice, recommendation or counsel independent of the control and direction of City or of any City official, other than normal agreement monitoring; and,
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b. Possesses no authority with respect to any city decision beyond rendition of information, advice, recommendation or counsel. [FPPC Reg. 18700(a)(2)].

10. Professional Ability of Consultant. City has relied upon the professional training and ability of Consultant to perform the services hereunder as a material inducement to enter into this Agreement. Consultant shall therefore provide properly skilled professional and technical personnel to perform all services under this Agreement. All work performed by Consultant under this Agreement shall be in accordance with applicable legal requirements and shall meet the standard of quality ordinarily to be expected of competent professionals in Consultant’s field of expertise.

In the event it is determined that the Consultant is required to pay prevailing wages for the work performed under this Agreement, the Consultant shall pay all penalties and wages as required by law.

12. Licenses. Consultant represents and warrants to City that it has all licenses, permits, qualifications, insurance and approvals of whatsoever nature which are legally required of Consultant to practice its profession. Consultant represents and warrants to City that Consultant shall, at its sole cost and expense, keep in effect or obtain at all times during the term of this Agreement, any licenses, permits, insurance and approvals which are legally required of Consultant to practice its profession. Consultant shall maintain a City of South Lake Tahoe business license at all times services are performed under this Agreement. Consultant acknowledges that payments made pursuant to this Agreement may be withheld until this provision has been satisfied.

13. Indemnity. Consultant hereby agrees to and shall indemnify and hold harmless City, its elected and appointed boards, officers, agents, employees and volunteers from and against any liability for any and all claims, demands, actions, losses, damages and injuries, direct or indirect (including any and all 561
costs and expenses in connection therein), arising out of this Agreement or caused in any way by Consultant’s negligent performance of this Agreement or its breach of its obligations contained in this Agreement, except for any such claims arising out of the negligence or willful misconduct of the City.

Consultant agrees to defend City from and against any and all losses, damages, claims costs and fees arising out Consultant’s negligent acts, errors, omissions, regarding this Agreement, the Consultant’s work under this Agreement, or the consultant’s Scope of Work.

This hold harmless agreement by Consultant shall apply to all damages and claims for damages, or alleged to have been suffered, by reason of any of the aforesaid operation of Consultant or any subcontractor, regardless of whether or not such insurance policies shall have been determined to be applicable to any of such damages or claims for damages.

Consultant further waives any and all rights to any type of express or implied indemnity or right of contribution from the City for any liability, claims, demands, costs, charges and expenses and causes of action of whatsoever arising out of or in any way connected with this Agreement, and consultant’s work under this Agreement.

14. Insurance Requirements.
a. Consultant, at Consultant’s own cost and expense, shall procure and maintain, for the duration of the contract, the following insurance policies.
i. Workers’ Compensation Coverage. Consultant shall maintain Workers’ Compensation Insurance and Employer’s Liability Insurance for his/her employees in accordance with the laws of the State of California. In addition, Consultant shall require each subcontractor to similarly maintain Workers’
Compensation Insurance and Employer’s Liability Insurance in accordance with the laws of the State of California for all of the subcontractor’s employees. Any notice of cancellation of all Workers’ Compensation policies must be received by City 562
at least thirty (30) days prior to such change. Consultant shall provide thirty (30) days written notice of nonrenewal of any Workers’ Compensation policies. The insurer shall agree to waive all rights of subrogation against City, its officers, agents, employees and volunteers for losses arising from work
performed by Consultant for City.
ii. Commercial General Liability Coverage. Consultant shall maintain commercial general liability insurance no less broad than ISO form CG 00 01 in an amount not less than one million dollars ($1,000,000) per occurrence for bodily injury, personal injury and property damage. Coverage must be made on
the standard Occurrence form. Claims-Made forms are not acceptable without prior written consent of City. City of South Lake Tahoe must be endorsed as an additional insured for liability arising out of ongoing operation by on behalf of Consultant. If a commercial general liability insurance form or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the work to be performed under this Agreement or the general
aggregate limit shall be at least twice the required
occurrence limit.
iii. Automobile Liability Coverage. Consultant shall maintain automobile liability insurance covering bodily injury and property damage for all activities of the Consultant arising out of or in connection with the work to be performed under this Agreement, including coverage for owned, hired and nonowned vehicles, in an amount of not less than one million dollars ($1,000,000) combined single limit for each occurrence. iv. Professional Liability Coverage. Consultant shall maintain professional errors and omissions liability insurance for protection against claims alleging negligent acts, errors or omissions which may arise from Consultant or by its employees, or subcontractors. The amount of this insurance shall not be less than one million dollars ($1,000,000) on a claims-made annual aggregate basis, or a combined single-limit per occurrence basis.
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b. Endorsements. Each general liability and automobile liability insurance policy shall be with insurers possessing a AM Best’s rating of no less than A:VII and shall be endorsed with the following specific language:
i. City, its elected or appointed officers, officials, employees, agents and volunteers are to be covered as additional
insured’s under Consultant’s General Liability and Automobile Liability policies with respect to liability arising out of this Agreement and/or work performed by or on behalf of the
Consultant, including materials, parts or equipment furnished in connection with such work or operations.
ii. This policy shall be considered primary insurance as respects City, its elected or appointed officers, officials, employees, agents and volunteers. Any insurance maintained by City, including any self-insured retention City may have, shall be considered excess insurance only and shall not contribute with it.
iii. This insurance shall act for each insured and additional insured as though a separate policy had been written for each,
except with respect to the limits of liability of the insuring Consultant.
iv. The insurer waives all rights of subrogation against City except for Consultant’s Professional Liability and Employers’ Liability policies, its elected or appointed officers, officials, employees or agents.
v. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to City, its elected or appointed officers, officials, employees, agents or volunteers. vi. No policies of insurance carried by Consultant shall be suspended, voided, canceled, or changed in coverage or in limits except after thirty (30) days written notice to the City Attorney by Certified Mail.
c. Deductibles and Self-Insured Retentions. The Consultant shall be responsible for all deductibles in all of Consultant’s insurance policies. 564
The amount of deductibles for insurance coverage required herein shall be reasonable and approved by the City Attorney.
d. Certificates of Insurance. Consultant shall provide certificates of insurance with original endorsements to City as evidence of the insurance coverage required herein. Consultant shall not commence work under this contract until all insurance required under this section has been approved by City as to form, amount and carrier, nor shall Consultant allow any subcontractor to commence work on any subcontract until all similar insurance required and reasonably consistent limits of the subcontractor has been so obtained and approved. Certificates of insurance shall contain no exclusions unless negotiated with the City Attorney and approved, in writing, by the City Attorney.

Notice shall be deemed communicated within 48 hours from the time of mailing if mailed as provided in this section.

If to City: City of South Lake Tahoe
1901 Lisa Maloff Way, Suite 210
South Lake Tahoe, CA 96150
Provide a copy to: City Attorney’s Office
City of South Lake Tahoe
1901 Lisa Maloff Way, Suite 300
South Lake Tahoe, CA 96150
If to Consultant: HdL Companies
120 S. State College Blvd. Suite 200
Brea, CA 92821

Provide a copy to: Connor Duckworth, Client Advisor
HdL Companies
120 S. State College Blvd. Suite 200
Brea, CA 92821

16. Assignment and Subcontracting. The parties recognize that a substantial inducement to City for entering into this Agreement is the professional reputation, experience and competence of Consultant. Assignments of any or all rights, duties or obligations of the Consultant under this Agreement will be permitted only with the express consent of City. Consultant shall not 565
subcontract any portion of the work to be performed under this Agreement without the written authorization of City. If City consents to such subcontract, Consultant shall be fully responsible to City for all acts or omissions of the subcontractor. Nothing in the Agreement shall create any contractual relationship between City and subcontractor nor shall it create any obligation on the part of City to pay or to see to the payment of any monies due to any such subcontractor other than as otherwise required by law.

17. Waiver. Waiver of a breach or default under this Agreement shall not constitute a continuing waiver of a subsequent breach of the same or any other provision under this Agreement.

18. Dispute Resolution. Any dispute concerning this Agreement will be first submitted to the City Manager or his designee for resolution. If no resolution is reached, such dispute shall be submitted to the City Council. The decision of the City Council shall be final and shall be appealable only to the El Dorado Superior Court pursuant to California Code of Civil Procedure §1094.5, and as provided by law.

21. Equal Opportunity Employment. Consultant represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color, national origin, disability, ancestry, sex or age. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or 566
termination. Consultant shall also comply with all relevant provisions of City’s Minority Business Enterprise program, Affirmative Action Plan, or other related programs or guidelines currently in effect or hereinafter enacted.

22. Drug-Free Workplace Certification. By signing this Agreement, Consultant hereby certifies under penalty of perjury under the laws of the State of California that the Consultant will comply with the requirements of the DrugFree Workplace Act of 1990 (Government Code Section 8350, et seq.) and will provide a drug-free work place by taking the following actions:
a. Publish a statement notifying employees that unlawful manufacture, distribution dispensation, possession, or use of a controlled substance is prohibited and specifying actions to be taken against employees for violations, as required by Government Code Section 8355 (a). b. Establish a Drug-Free Awareness Program as required by Government Code Section 8355(b) to inform employees about all of the following:
i. The dangers of drug abuse in the workplace;
ii. The person’s or organization’s policy of maintaining a drug-free workplace;
iii. Any available counseling, rehabilitation and employee assistance program; and
iv. Penalties that may be imposed upon employees for drug abuse violations.
c. Provide, as required by Government Code Section 8355(c), that every employee who performs grant activities under this Agreement:
i. Will receive a copy of the Consultant’s drug-free policy statement; and
ii. Will agree to abide by the terms of the Consultant’s statement as a condition of employment on this Agreement.

23. Anti-Lobbying Certification. Consultant shall submit to City the Anti-Lobbying Certification contained in Exhibit C. Further, Consultant shall require that the language of the certification in Exhibit C be included in all contracts or 567
subcontracts entered into in connection with this Agreement and that all Consultants and contractors shall certify and disclose accordingly.

26. Amendments. This Agreement may be modified or amended only by a written document executed by both Consultant and City and approved as to form by the City Attorney.

30. Time is of the Essence. Time is of the essence for this Agreement.

31. Authority to Enter Agreement. Consultant has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement.

Each party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and to bind each respective party.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the date first written above.

CITY OF SOUTH LAKE TAHOE: CONSULTANT:

By___________________________ By ________________________________ City Manager Title:

Date __________________________ Date _____________________________

Business License # ___________________
APPROVED AS TO FORM:

By____________________________ Date ________________________________ City Attorney
ATTEST:

By______________________________ Date ________________________________ City Clerk
Attachments:

Exhibit A – Scope of Services and Fees: HdL Master Services Agreement including Schedule Z Services and Fees
Exhibit B – Compensation Schedule Summary
Exhibit C - Anti-Lobbying Certification
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EXHIBIT A

SCOPE OF SERVICES AND FEES
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1234662.2 Page 1 of 20

MASTER SERVICES AGREEMENT
THIS MASTER SERVICES AGREEMENT (this “Agreement”) is entered into as of - _________, 2023 (the “Agreement Date”) by and between Hinderliter De Llamas & Associates (HdL) (“Consultant”), and City of South Lake Tahoe (“Client”), which is located within the state of California (the “State”).

W I T N E S S E T H:

WHEREAS, Consultant is engaged in the business of providing consulting, software and other services that help public agencies understand and maximize their collection of sales, use and transactions taxes, business license taxes, property and lodging taxes, and other revenues, as well as their delivery of other public services (collectively, “Consultant’s Business”); and WHEREAS, Client desires to contract with Consultant to obtain one or more of the services included within Consultant’s Business (as provided for in Section 1) upon the terms and conditions contained in this Agreement;
WHEREAS, Consultant desires to contract with Client to render such services upon the terms and conditions contained in this Agreement.

NOW THEREFORE, in consideration of the covenants and promises contained herein, Client and Consultant mutually agree as follows:

1. Services.

1.1 Consultant will perform those services included within Consultant’s Business that are described in any and all schedule(s) referencing this Agreement and signed by Client and Consultant as of the Agreement Date or hereafter (individually and collectively, the “Schedule(s)”), upon the terms and conditions contained in this Agreement (including the Schedules) (such services are, collectively, the “Services”)

1.2 Consultant warrants that it will perform the Services in a professional manner in accordance with professional standards. In performing the Services, Consultant is acting as an independent contractor (and not as an agent or employee of Client).

1.3 Client acknowledges and agrees that any other public agency (including, without limitation, any participating government agency) located within or outside of the State (e.g., city, municipality, county, district, public authority or other political subdivision) may procure services for fees and other terms and conditions that are substantially similar to any of the Services, Fees and other terms and conditions set forth in this Agreement, provided that such other public agency executes a separate agreement with Consultant wherein the services rendered to such other public agency, the fees payable by such other public agency, and the other terms and conditions of such separate agreement are the responsibility of Consultant and such other public agency and not Client.

1.4 This Agreement does not limit the right of Consultant to enter into additional contracts with Client or to contract with other persons or entities (that are not Client) to provide them with merchandise or services of any kind whatsoever, including, but not limited to, services similar to the Services.
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1234662.2 Page 2 of 20

2. Fees. As compensation for performing the Services, Client will pay Consultant the fees, costs and expenses as described in the Schedules (individually and collectively these fees and costs are, the “Fees”). Consultant may perform the Services using professionals from its staff or Consultant’s affiliated entities, and such Services will be billed to Client under the same billing terms applicable to Consultant’s staff. Consultant may increase the Fees from time to time (including, without limitation, annually as described in the Schedules). Other than a Fee increase as described in the Schedules, Client may notify Consultant of a request that such Fee increase be modified or revoked and, if Consultant fails to do so to Client’s satisfaction within thirty (30) days after the receipt of such request, Client may terminate this Agreement without cause pursuant to Section 7.3.

3. Invoices; Payment.

3.1 Consultant will invoice Client for the Fees earned and/or incurred by Consultant pursuant to this Agreement.

3.2 Invoices are due and payable upon receipt. Interest will begin to accrue on the fortyfifth (45th) day following the invoice date on all unpaid balances at a rate of one and one-half percent (1½%) per month, or the maximum rate permitted by law, whichever is less. Payments will first be credited to interest and then to principal. In the event that Client disputes or contests an invoice, only that portion so disputed or contested in good faith will be withheld from payment, and the undisputed portion must be timely paid. Interest will accrue on any contested portion of the invoice not timely paid and will be payable immediately if the contested invoice is resolved in favor of Consultant.

3.3 If Client fails to fully pay an invoice within 30 days after the invoice date, Consultant may, after giving five (5) days’ notice to Client, suspend the rendering of Services under this Agreement until said invoice is paid in full, together with all interest that has accrued thereon. In the event of such a suspension of Services, Consultant will have no liability to Client for any delays or damages arising therefrom.

4. Insurance. Throughout the term of this Agreement, Consultant will maintain the following insurance in not less than the referenced amounts: (a) workers compensation and employers liability insurance as may be required by the State; (b) property damage liability of $1,000,000 per incident; (c) bodily injury liability of $1,000,000 per incident; and (d) professional liability for any errors or omissions of $1,000,000.

5. Client Support.

5.1 Client will promptly provide in writing to Consultant all data and other information relating to or which may be necessary for Consultant’s performance of the Services. Without limiting the foregoing, Client will keep Consultant informed on a timely basis in writing as to the existence and amendments of the laws, ordinances and/or regulations under which Consultant is performing the Services (including any adopted by Client). Consultant will be permitted to rely on the accuracy, timeliness and completeness of the information provided by Client, and in no event will Consultant be liable to Client or others as a result of such reliance. 572
1234662.2 Page 3 of 20

5.2 Client will examine all of Consultant’s reports, specifications, notices, proposals and other documents. In the event that a decision is required of Client in order for Consultant to perform the Services, Client will render such decision in writing in a timely manner.

5.3 Client will assist Consultant in obtaining such licenses, permits and approvals as may be required by law for performing the Services. Consultant will pay all fees, assessments and taxes related to the application, issuance and maintenance thereof.

5.4 The Services do not include services that Consultant may be required or requested to provide to support, prepare, document, bring, defend or assist in litigation undertaken or defended by Client (“Litigation Services”). If Consultant agrees with Client or is required to perform Litigation Services, Client will promptly pay Consultant for all of Consultant’s costs and expenses related to Litigation Services at Consultant’s actual cost, plus ten percent (10%) thereof (all of which are deemed to be additional Fees).

6. Confidentiality; Software Use and Warranty; Records; Agency Data.

6.1 Consultant will comply with the requirements of the applicable laws, ordinances and/or regulations concerning the confidentiality of tax records of which it has been informed by Client pursuant to Section 5.1.

6.2 As used herein, the term “proprietary information” means all information, techniques, processes, services or material that has or could have commercial value or other utility in Consultant’s Business, including without limitation: Consultant’s (i) software, computer or data processing programs; (ii) data processing applications, routines, subroutines, techniques or systems; (iii) desktop or web-based software; (iv) audit, tax or fee collection/administration or business processes, methods or routines; (v) marketing plans, analyses and strategies; and (vi) materials, techniques and intellectual property used. Except as otherwise required by law, Client must hold in confidence and may not use (except as expressly authorized by this Agreement) or disclose to any other party any proprietary information provided, learned of or obtained by Client in connection with this Agreement.

The terms of this Section 6.2 do not apply to any information that is public information.

6.3 If access to any software which Consultant owns is provided to Client as part of this Agreement (including, without limitation, if Client chooses to subscribe to such software and reports option as part of the Services) (such Consultant-owned software is, collectively, the “Software”), Consultant hereby provides a limited, non-exclusive, non-transferable license to Client for the use by such of Client’s staff as may be designated from time to time by Client and approved by Consultant in writing to use the Software pursuant to and during the Term of this Agreement. The Software must only be used by such authorized Client staff, and Client must not sublicense, sublet, duplicate, modify, decompile, reverse engineer, disassemble, or attempt to derive the source code of the Software. The license granted hereunder does not imply ownership by Client or any of Client’s staff of the Software nor any rights of Client or any of Client’s staff to sublicense, transfer or sell the Software, or rights to use the Software for the benefit of others. Client may not create (or allow the creation of) any derivative work or product based on or derived from the Software or documentation, nor modify (or allow the modification of) the Software or documentation without the prior written consent of Consultant. In the event of a breach of this provision (and without limiting Consultant’s remedies), such modification, derivative work or product based on the Software or documentation is hereby deemed assigned to Consultant. Upon termination of this Agreement or this Software license, this 573
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Software license will be deemed to have expired and Client must immediately deactivate, cease using and remove, delete and destroy all the Software (including, without limitation, from Client’s computers and network). Consultant warrants that the Software will perform in accordance with the Software’s documentation.

6.4 All documents, preliminary drafts, communications and any and all other work product related to the Services and provided by Consultant to Client either in hard copy or electronically are the property of Client. This does not include any software, programs, methodologies or systems used in the creation of such work product, nor does it include any drafts, notes or internal communications prepared by Consultant in the course of performing the Services that were not otherwise provided to Client in either hardcopy or electronic form, all of which may be protected by Consultant or others’ copyrights or other intellectual property. It is possible that any documents, drafts, communications or other work product provided to Client may be considered public records under applicable law and/or may be discoverable through litigation. Consultant may publicly state that it performs the Services for Client.

6.5 Subject to applicable law, Consultant is responsible for retaining all final documents and other final work product related to the Services for a period of not less than three (3) years from the date provided to Client. Retention of any other documents, preliminary drafts, communications and any and all other work product provided to Client by Consultant is the responsibility of Client.

Consultant has no responsibility to retain any drafts, notes, communications, emails or other writings created or received by Client in the course of performing the Services (other than the final documents and other final work product related to the Services and provided to Client for the term of years referenced above).

6.6 Consultant acknowledges that the data provided by Client (" Agency Data") during the course of this Agreement is the property of Client. Client authorizes HdL to access, import, process and generate reports from the Agency Data with its various proprietary systems. No Agency Data will be shared by Client with any other party without written permission from Client. Consultant shall maintain the confidentiality of the Agency Data and shall not use Agency Data except to perform the services under this Agreement. HdL shall collect, process, store, and transfer Personally Identifiable Information ("PII") only in a manner that is consistent with applicable federal, state and local laws including, but not limited to, privacy laws applicable to PII. Any right of Consultant to use the Agency Data as provided herein shall terminate upon termination of this Agreement and HdL shall destroy all copies of Agency Data. Consultant’s obligation to hold Agency Data confidential shall survive termination of this Agreement. No Agency Data shall be exported to foreign counties, and the data center (including the hosted software, infrastructure and data) will be located and the services shall be performed in the United States, and no Agency Data shall be made available to those located outside the United States. At the termination of this Agreement the Agency Data will be made available to Client in a format acceptable to both Client and Consultant.

7. Term and Termination.

7.1 The initial term of this Agreement commences as of the Agreement Date and, unless terminated earlier pursuant to any of this Agreement's express provisions, will continue in effect until twelve (12) months from such date (the “Initial Term”). This Agreement will automatically renew for successive twelve (12) month terms unless earlier terminated as set forth in Section 7.2 or 7.3 or either party gives the other party written notice of non-renewal at least one hundred twenty (120) days prior 574
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to the expiration of the then-current term (each a “Renewal Term” and, collectively, together with the Initial Term, the “Term”).

7.2 This Agreement may be terminated by either party for cause upon not less than fortyfive (45) days’ written notice given to and received by the other party, if the other party has materially breached this Agreement through no fault of the notifying party and fails to (i) commence correction of such material breach within thirty (30) days of receipt of the above-referenced written notice and (ii) diligently complete the correction thereafter.

7.3 In addition, either party may terminate this Agreement without cause upon not less than one hundred twenty (120) days’ written notice to the other party.

7.4 On termination, Client will pay Consultant for all Fees and other compensation (including for Litigation Services) earned and/or incurred through the termination date and will thereafter timely pay Consultant for all other Fees and compensation to which Consultant may be entitled pursuant to this Agreement (including the Schedules hereto).

8. Indemnification.

8.1 Consultant agrees to fully and promptly indemnify and hold harmless (but not defend) Client and each of its officers, employees and agents (collectively, “Client Group”) from and against any and all third-party liabilities, judgments, awards, losses, claims, damages, expenses, and costs (including, without limitation, for reasonable third-party attorneys’ fees and costs awarded in connection therewith) (each, a “Third-Party Liability”, and collectively, “Third-Party Liabilities”) directly or indirectly related to this Agreement and arising out of any negligent act or negligent omission, or reckless or willful misconduct, of Consultant or any of its directors, officers, employees, agents, direct and indirect equity holders, or affiliates (collectively, “Consultant Group”) under this Agreement; provided, that such obligations to indemnify and hold harmless are only to the extent Consultant admits in writing, or any of Consultant Group is found by a court of competent jurisdiction in a judgment which has become final and that is no longer subject to appeal or review, to have caused the above-described Third-Party Liability(ies). In no event shall Consultant be obligated to defend any of Client Group or pay for any Client Group attorneys’ fees or other costs of defending against any such Third-Party Liabilities (“defense costs”), with exception of if Consultant is obligated to indemnify and hold harmless Client Group as described above in this Section 8.1 then Consultant shall also be responsible for the defense costs incurred by Client Group for the related matter.

Consultant’s duty to indemnify and hold harmless Client shall not apply to claims for liability which arise from the issuance or non-issuance of any registration, license, permit, or exemption.

9. Liability Limitations; Governing Law; Dispute Resolution.

9.1 To the maximum extent permitted by law and notwithstanding anything to the contrary in this Agreement:

9.1.1 Except as may otherwise be expressly set forth in this Agreement, Consultant makes no warranty of any kind with respect to the Services or the Software, express or implied. Consultant hereby disclaims all other warranties, express or implied, including the implied 575
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warranties of merchantability, fitness for a particular purpose, title and non infringement. Consultant disclaims all warranties and responsibility for third party software.

9.1.2 In no event will any of Consultant Group be liable for any Client monies not collected by Consultant Group, or any special, incidental, or consequential damages of any nature whatsoever, even if such restrictions deprive one or more remedies of their essential purpose. This damage exclusion is independent of any remedies provided for herein.

9.1.3 Without limitation on any statue of limitations that expire in less than three years, no claim may be brought by Client against any one or more of Consultant Group arising out of this Agreement (including, without limitation, in connection with the Services or the Software) more than three years after the date upon which Client has actual knowledge of the first occurrence of the action or inaction giving rise to such claim (whether relating to the Services, the Software or otherwise).

9.1.4 Client acknowledges this Agreement is with Consultant in its capacity as a corporation or a limited liability company, and Client agrees that in no event will it seek to hold any of the Consultant Group (other than Consultant) responsible for any obligations under this Agreement.

9.2 The law of the State of California will govern the validity of this Agreement, its interpretation and performance, and any other claims related to it, without regard to the State’s conflict of laws rules. Venue for any legal action arising out of this Agreement will be proper only in the State courts or the federal courts located within the State. The parties hereby submit to the exclusive jurisdiction of such courts and waive any other venue to which either party might be entitled by domicile or otherwise. Both parties waive the right to a jury trial in an action to enforce, interpret or construe this Agreement.

9.3 A breach of this Agreement by either party may cause the other party hereto irreparable harm, the amount of which may be difficult to ascertain, and therefore such other party will have the right to apply to a court of competent jurisdiction for specific performance and/or an order restraining and enjoining any further breach and for such other relief as such other party may deem appropriate.

Such right is in addition to the remedies otherwise available to such other party at law or in equity.

The parties hereto expressly waive the defense that a remedy in damages will be adequate and any requirement in an action for specific performance or injunction hereunder for the posting of a bond.

10. General Legal Provisions.

10.1 Authorization to Proceed. Each Schedule must be signed by both Client and Consultant before such Schedule will be binding on the parties hereto.

10.2 Force Majeure. Consultant is not responsible for damages or delay in performance caused by acts of God, strikes, lockouts, accidents or other events beyond the control of Consultant.

10.3 Amendment; Waiver. Any provisions of this Agreement (including, without limitation, any Schedules or provisions within any Schedules) may be amended or terminated if in writing and signed by both Client and Consultant. No waiver by any party of any default, misrepresentation or breach of warranty or covenant hereunder, whether intentional or not, will be deemed to be valid unless acknowledged by such party in writing, and such waiver will not extend to 576
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any prior or subsequent default, misrepresentation or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

10.4 Severability and Survival. If any provision in this Agreement is held illegal, invalid or unenforceable, the enforceability of the remaining provisions will not be impaired thereby.

Notwithstanding any other provisions of this Agreement (including, without limitation, Section 7), Sections 3, 5.5, 6, 7, 8, 9 and 10 will survive the termination of this Agreement.

10.5 No Third-Party Beneficiaries; Services Limited to Agreement. Except as set forth in Section 8, this Agreement gives no rights or benefits to anyone other than Client and Consultant and has no third-party beneficiaries. The Services to be performed for Client by Consultant are defined solely by this Agreement (including the Schedules), and not by any other contract or agreement that may be associated with performing the Services.

10.6 Assignment. This is a bilateral personal services agreement. Neither party will have the power to or will assign any of the duties or rights or any claim arising out of or related to this Agreement, whether arising in tort, contract or otherwise, without the written consent of the other party. Any unauthorized assignment is void and unenforceable. This Agreement is binding on the successors and assigns of the parties hereto.

10.7 Notices. All notices under this Agreement must be in writing and will be deemed to have been given when such notice is received (i) from United States Postal Service First Class Certified Mail, Return Receipt Requested, (ii) by courier service, or (iii) by email; provided, however, that notices received on a weekend or holiday or on a business day after 4:00 p.m. local time will be deemed to have been received on the next business day. Notices will, unless another address is specified in writing, be sent to the addresses indicated below (each of which must include a street address and an email address): Consultant: Hinderliter De Llamas & Associates (HdL), Attn: George Bonnin, Email: [email protected]; and Client: City of South Lake Tahoe, Attn: Olga Tikhomirova, Email: [email protected].

10.8 Entire Agreement; Conflict. This Agreement (including any Schedules dated as of the Agreement Date or hereafter) constitutes the entire agreement between the parties and supersedes any prior understandings, agreements, or representations by or between the parties, written or oral, to the extent they have related in any way to the subject matter hereof. Should there ever be a conflict between the terms and conditions of the Schedule(s) and the remainder of this Agreement, the terms and conditions of the remainder of this Agreement will prevail and be controlling.

10.9 Counterparts; Electronic Signatures; Authority. This Agreement may be signed in any number of counterparts, each of which will constitute an original and all of which, when taken together, will constitute one agreement. Any signed signature pages of this Agreement transmitted by email or other electronic means in a portable document format (PDF) or other clear and visible electronic format will have the same legal effect as an original. Each of the persons signing on behalf of a party hereto represents that he or she has the authority to sign this Agreement on such party’s behalf.

10.10 No Adverse Construction. Both parties acknowledge having had the opportunity to participate in the drafting of this Agreement. This Agreement will not be construed against either 577
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party based upon authorship. The section headings contained in this Agreement are inserted for convenience only and will not affect in any way the meaning or interpretation of this Agreement. [Signatures are on the next page]

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IN WITNESS WHEREOF, the parties hereto have entered into this Agreement through their duly authorized representatives as of the Agreement Date.

CONSULTANT:

Hinderliter De Llamas & Associates (HdL)
By:

Its:

By:

Its:

CLIENT:

City of South Lake Tahoe, CA
By:

Its:

By:

Its:
[Any Schedule or Schedules may (but is/are not required to) be attached hereto] 579
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SCHEDULE Z
Local Tax Software Solution Services and Fees
Tax and Fee Administration Services and Fees
SCHEDULE Z – This Schedule Z provides the scope of Services and Fees for Consultant’s Local Tax Software Solution pursuant to the Master Services Agreement dated __________, 2023 (“MSA”).

The MSA includes the main body of the MSA, this Schedule, and all other Schedules to the MSA.

Terms not otherwise defined herein have the definitions given to them within the main body of the MSA.

SCOPE OF SERVICES
Consultant will provide the following Services relative to Consultant’s Prime Cloud local tax software solution: Prime Cloud Business License, Transient Occupancy Tax and On-line (Web Module) payment module.

1. Prime Cloud Software Implementation

1.1. Consultant's responsibilities

1.1.1. Project manager - Consultant will provide a project manager (PM) to guide the software implementation process. The primary responsibility for the Consultant PM is to ensure successful and timely completion of each step of the software implementation schedule. The Consultant PM will work closely with the Client's designated project manager to define the software implementation schedule, identify Client needs and configure the software accordingly, validate the data conversion, and provide user training.

1.1.2. IT support - Consultant will provide a dedicated IT staff member to provide IT support during the software implementation process.

1.1.3. Management support - Consultant will assist the Client in evaluating current policies and procedures in order to enhance operational efficiency. This may include suggestions to redesign forms/reports, implement new processes, or adopt new strategies for improving communication with the business community and other Client departments.

1.1.4. Training - Consultant will provide software training for Client users as defined in the fees schedule. The timing, size and participants of each training session will be determined by the Consultant’s and Client’s PMs. A training day consists of one (2) six (6) hour days. Additional training days are available at the rate set in Schedule D, Scope of Services.

1.1.5. Software documentation - Consultant will provide Client with access to digital copies of available software documentation. The Client may use the software documentation materials as needed for internal use only. The software documentation contains proprietary and confidential information, and as such is bound by the confidentiality portion of this agreement. The software documentation may not in any circumstances be distributed to any 3rd party or any individual that is not a current Client staff member responsible for using or maintaining the software.

1.2. Client's responsibilities

1.2.1. Project manager - Client will designate a staff member to serve as the Client's project manager (PM). This individual must be intimately involved in the daily business processes which the software will automate, and be empowered to make, or quickly secure from management, decisions required for the configuration and implementation of the software. The primary responsibility for the Client PM is to ensure that all Client responsibilities during the software implementation process are met according to the agreed upon software implementation schedule.

The Client PM will be instrumental in the successful implementation of the software; working closely with the Consultant PM to verify data conversion, review and approve reports, establish business rules, and confirm configuration and behavior of the software.

1.2.2. IT support - Client will designate an IT staff member to work with Consultant staff throughout the software implementation process. This individual must be knowledgeable about the Client's 580
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computing environment and be authorized to access any equipment or services required for proper access to and operation of the software.

1.3. Data Conversion - Consultant will convert the Client’s existing data as provided by Client. Client agrees to provide its current data in a format agreed upon by Consultant and Client. Acceptable formats include Microsoft SQL Server backup file, Excel, Access, and ASCII delimited text file.

Client will provide all available documentation to assist with identifying the contents of the data files, including but not limited to file layout documentation, database schema, and screenshots from five (5) sample accounts. Client will provide the data a minimum of two times during the conversion process. Client understands that the second (and any subsequent) data must be provided in the same format and layout as the first data set. Any inconsistencies between the first and final data sets will result in a delayed installation date and additional charges for conversion.

1.4. Schedule – The default timeline for software implementation (including “Go Live”) is approximately 60 days from receipt of initial discovery materials. When the Agreement is signed by all parties, Consultant will immediately work with the Client to establish a defined implementation schedule which is agreeable to both Client and Consultant.

2. Prime Cloud Software Hosting Services – Consultant’s hosting services offload the majority of IT concerns to Consultant’s hosting team; including system upgrades, hardware and software maintenance, database management, and disaster recovery. Client will be responsible for maintaining its workstations and a reliable internet connection. Consultant will handle the rest. Website functionality will be hosted using a Client specific sub-domain on Consultant’s special purpose hdlgov.com domain.

2.1. Workstation Specifications – Workstations will access the software through a remote application session with Consultant’s hosting service. All workstations require 4+GB Memory, 1280x1024 screen resolution, and MS Windows 7/8/10 operating system.

2.2. Network Specifications – Consultant’s hosted service requires reliable, high speed internet connectivity. High-speed local area network connections are always helpful, but the service will also run without difficulty over slower WAN connections such as T1 or mobile broadband.

2.3. Printer Specifications - The software is designed to work with laser printers. A PCL compliant laser printer is recommended. Each make and model of printer has different drivers and therefore has slightly different results when printing. We design forms/reports using HP LaserJet printers.

3. Prime Cloud Software Support

3.1. Client Support - Consultant will provide Client’s users no charge support by telephone, email and the web during the term of this Agreement. In the United States support is available as follows: For customer support between the hours of 8:00 am and 5:00 pm Pacific time, Monday through Friday, email [email protected] or call (909) 861-4335 and ask for software support. For urgent off hours support before 8:00 am or after 5:00 pm Pacific time, Monday through Friday (or anytime Saturday), email [email protected] and Consultant’s on call support personnel will be notified.

Please only include your name, agency and contact # in emails to [email protected]. You will be contacted as soon as possible.

3.2. Response Time – In the event that Client encounters an error and/or malfunction whereby the software does not conform to expected behavior in accordance with the software design, Consultant will assign one of the following severity levels and render support services in a timely manner consistent with the urgency of the situation.

3.2.1. Severity Level 1 – a critical problem has been encountered such that the software is essentially inoperable and without a reasonable workaround. Consultant will respond within one (1) business hour to diagnose the problem. A response is defined as an email or call to the Client’s designated support contact. Consultant and Client will work diligently and continuously to correct the problem as quickly as possible.

3.2.2. Severity Level 2 – a problem has been encountered that does not prevent use of the software, but the software is not operating correctly. Consultant will diagnose the problem within 48 hours and advise Client of any available work-around. Upon Consultant’s confirmation that the 581
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software is not operating correctly, Consultant will provide a software update to repair the defect and confirm with Client that the update resolved the issue.

3.2.3. Severity Level 3 – a minor problem has been encountered. The software is usable but could be improved by correction of a minor defect or addition of a usability enhancement. HdL will assess the request within fifteen (15) business days and, depending on priorities, schedule a software update for a future release, advise City that the request will not be implemented, or offer the option of implementing the request as a custom software enhancement at additional cost.

3.3. Support Policy Regarding Reports - Consultant will assist with modifications to reports as needed during the term of this agreement. Typical report modifications require 7 to 10 business days to complete. Very complex reports or reports required in a very short time frame may incur development costs, in which case an estimate will be provided for approval before the work is begun.

3.4. Software Upgrades - Except to the extent that upgrades of the software include new modules or features not previously offered as part of the software as of the date hereof, Client is entitled to upgrades of the software within the terms of this Agreement. Though rare, additional costs may apply depending on the extent of the upgrade. Potential additional costs include training, consulting, configuration, or other requested services.

3.5. Out of Scope Support – Client agrees to pay additional hourly fees according to Consultant’s then current hourly rates if the Client desires Consultant’s assistance for matters which are not caused by any defects in Consultant’s software.

4. Online Payment Processing – Consultant’s software includes PCI compliant payment gateway services powered by FIS Global, which supports both credit card and eCheck transactions. If a different payment gateway is required there will be an initial programming cost to establish the custom payment gateway integration, and increase to the annual software use fee for continued support of the custom integration. Costs will be determined dependent on the integration requirements and API documentation.

4.1. Payment Processing - Consultant shall provide its Services to support payments remitted to Client.

Consultant shall transmit transactions for authorization and settlement through Consultant’s certified payment processor. Funds for transactions processed by Consultant hereunder shall be submitted to Client’s designated bank account as follows: (i) no more than two (2) business banking days after all Transactions (other than electronic Check Transactions) that are successfully processed prior to 5:00 p.m. ET on each business banking day (e.g., a Transaction authorized at 2:00 p.m. ET on Monday will be submitted on Wednesday; a Transaction successfully processed at 8:00 p.m. ET on Monday will be submitted on Thursday); and (ii) no more than five (5) business banking days for all electronic Check Transactions that are successfully processed prior to 5:00 p.m. ET on each business banking day. Consultant makes no representation or warranty as to when funds will be made available by Client’s bank.

4.2. Support - Consultant shall provide Client with payment processing related customer service as needed. Client shall timely report any problems encountered with the service. Consultant shall promptly respond to each report problem based on its severity, the impact on Client’s operations and the effect on the service. Consultant shall either resolve the problem or provide Client with the information needed to enable the Client to resolve it.

4.3. Transaction Errors - Consultant’s sole responsibility for any Transaction error or reversed Transaction is to determine whether the result indicates a problem with Consultant’s service and, if necessary, reprocess and resubmit the Transaction without additional charge. In the event that a Transaction is reversed or refunded to any Customer of Client, for any reason, Consultant may offset such amount against funds remitted to Client, or invoice Client for such amount, at Consultant’s discretion. Client shall pay any such invoice within 30 days of receipt.

4.4. Electronic Check Authorization - If Client elects to accept electronic Checks as a form of payment, the following subsections apply. For the purpose of this section, “checks” means checks drawn on accounts held in the U.S. (“Check(s)”).

4.4.1. As part of the implementation plan, Client shall select risk management controls governing Check acceptance and assumes sole responsibility for the choice of controls. 582
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4.4.2. Consultant shall provide confirmation on a submitted ABA number as part of the Service to assist Client with the decision whether to accept a Check and shall route accepted Checks.

4.4.3. Client hereby authorizes Consultant to debit the Client’s financial institution account in the amount of any returned item that is received by Consultant.

4.5. Client Responsibilities

4.5.1. As a condition to its receipt of the Service, Client shall execute and deliver any and all applications, agreements, certifications or other documents required by Networks or other third parties whose consent or approval is necessary for the processing of Transactions. “Network” is an entity or association that operates, under a common service mark, a system which permits participants to authorize, route, and settle Transactions among themselves, including, for example, networks operated by VISA USA and Mastercard, Inc., NYCE Corporation, American Express, and Discover.

4.5.2. Client represents, warrants, and agrees that it does and will comply with applicable Laws and regulations and Network rules, regulations or operating guidelines. Client shall notify Consultant in writing as soon as possible in the event a claim is either threatened or filed against Client by any governmental organization having jurisdiction over Client or a Customer related to the Service. Client shall also notify Consultant in writing as soon as possible in the event a claim is either threatened or filed against Client relating to Transactions or the Services or a fine or other penalty is assessed or threatened relating to Transactions or the Services.

4.5.3. Client represents, warrants and agrees that it is and will continue to be in full compliance with all applicable requirements of the Client Information Security Program of VISA, the Site Data Protection Program of MasterCard, and similar programs of other Networks, and any modifications to such programs that may occur from time to time. Upon the request of Consultant, Client shall provide Consultant with documentation reasonably satisfactory to Consultant verifying compliance with this Section.

4.5.4. Client hereby grants Consultant the full right, power and authority to request, receive and review any Data or records reflected in a Transaction report. Client represents and warrants that it has the full right and authority to grant these rights.

FEES

5. Pricing Adjustments – All pricing listed in this Schedule will be honored during the first twelve months of software services. Any additional/optional services needed after this period will be provided using Consultant’s current pricing schedule at the time the service is requested.

6. Software Services

6.1. One Time Costs
Item Price Comments
Prime Cloud Software License Fee
(HdL Hosted)
$44,000.00 6 Named Users
Prime Cloud Web Module Included Must use HdL supported FIS Global payment gateway. Non-supported gateways require a
development charge of a minimum of
$5,000.00 + Specifications.

Implementation $14,500.00 Project management, installation, configuration, report design, training, etc.

BL + TOT/VHR $6,000.00
Data Conversion $10,000.00 Up to 30 hrs. of work. Above 30 hrs., time, and material.
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Finance Export Included A $6,000 Value. The finance export captures our Prime Cloud’s payment information and
converts it into a file (typically .xls or .csv file)
to then upload into the City’s cashiering
system for reconciliation in a single payment
system.

Daily journal entry file export to finance
system
Travel Expenses TBD At Cost
Training – 2 days Included Training consists of two (2) six (6) hour day sessions. Additional on-line training days
available at $2,000/day. Any on-site training
will require additional travel and logistic
expenses.

TOTAL $76,500.00 Total one-time costs
Optional Services. The following optional services and start date shall be at the discretion of the city and shall require a detailed Statement of Work.

Item Price Comments
Transient Occupancy Tax Audits
(with Scope of Services)
$2,150.00 each Per Audit
Compliance Services (with Scope of
Services)
40% 40% of all collected revenues
File conversion $4,720.00 Conversion of any additional files/data (Maximum of 16 Hours)

6.1.1. Prime Cloud Software License Fee – Fee includes use of the software by the specified number of users and all standard forms and reports. Additional user licenses are available for $1,500.00 license fee plus $450 annual software use fee.

6.1.2. Data Conversion – Fee includes two (2) conversions of Client data. The first for the pre-install environment used for testing and training, and the second at go-live. Additional conversions can be performed, upon request, at a cost of $2,500 per conversion. Includes up to 30 hours of developer time. Abnormally complex conversions or poor data quality may require additional effort beyond the 30 hours, which will be charged at the developer hourly rate.

6.1.3. Travel Expenses – Travel and lodging expenses are billed at cost and apply to all meetings; including process, pre-installation, installation, training, and support. Consultant is dedicated to conserving public funds and ensures any travel costs are required and reasonable.

6.1.4. Parcel Data – Should Client desire for the software to incorporate parcel data, Consultant supports the following three methods:

6.1.4.1. If Client utilizes Consultant’s property tax services, parcel data will be provided at no cost.

6.1.4.2. Client may purchase the data from Consultant. Cost of parcel data will be provided upon request.

6.1.4.3. Should Client desire to utilize another source of parcel data, Consultant can work with Client to create a re-useable import utility. The development of this utility will be billed on 584
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a time and material basis. Once the source data has been reviewed, a statement of work will be provided including a cost and time estimate.

6.1.5. Customizing Services – Consultant’s software is a customizable off the shelf system (COTS) and has been designed to meet all common needs of municipalities. Should the need occur, Consultant is available to provide custom enhancements to the software on a time and material basis. No work shall be performed without prior written approval of Client.

6.2. Recurring Costs
Item Price Comments
Prime Cloud Software Use Fee &
Software Hosting
$22,000.00 Billed Annually + CPI. Includes 6 named
remote user connections. Additional named
user connections are $180/year.

6.2.1. Prime Cloud Software Use Fee – Software Use Fee is billed annually and provides for ongoing customer support and updates to the software. Fee will be increased as of January 1st of each calendar year starting January 1, 2025, with reference to the 12-month percent change in the most recently published annual Consumer Price Index for All Urban Consumers (CPI-U), West Region, as reported by the U.S. Bureau of Labor Statistics (the “CPI Change”). Each annual increase in the Fees will be equal to the greater of two percent (2%) or the actual CPI Change and the lesser of ten percent (10%) or the actual CPI Change. For example, if the actual CPI Change is 1.5%, then the annual increase will be 2%, if the actual CPI Change is 3.5%, then the annual increase will be 3.5%, and if the actual CPI Change is 12%, then the annual increase will be 10%.

6.2.2. Hosting Services – The fee for software hosting services is billed annually in advance, along with the software use fee. Fee may be periodically revised, with three (3) months advance notice to Client, to account for changes in market costs related to hosting, such as internet bandwidth, power, security, and related equipment or services costs.

7. Payment Processing Services – Consultant will configure payment processing services to utilize either a taxpayer funded model (convenience fee) or Client funded interchange pass-through model. Client may switch between these models upon written request to Consultant.

7.1. Taxpayer funded model - Client authorizes Consultant to collect each convenience fee.

Item Price
Credit and Debit Cards processing 2.9%, minimum of $2.00 ACH/eCheck processing $1.25 per transaction
Payment Account Hosting and Maintenance $33.26 per month ACH/eCheck Returns $0
Chargebacks $0

7.2. Client funded interchange pass-through model
Item Price
Credit and Debit Cards processing 2.9% + $0.30 per transaction 585
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ACH/eCheck processing $0.50 per transaction
Payment Account Hosting and Maintenance $33.26 per month ACH/eCheck Returns $10.00 per event
Chargebacks $25.00 per event

7.3. Fees do not include expenses, late fees or charges, or taxes, all of which shall be the responsibility of Client. In addition to the charges specified, Client shall be responsible for (a) all interchange and network provider fees, (b) all dues, fees, fines and assessments established and owed by Client to Visa and/or Mastercard, (c) for all costs and fees associated with changes to ATM protocol caused by Client’s conversion to the Services, and (d) any increase in postage charges, provided that any increase in charges resulting from (a) through (d) shall not exceed the actual increase incurred by Consultant.

7.4. Consultant reserves the right to review and adjust all Client and convenience fee pricing on an annual basis in June. This adjustment may be consistent with the then most recent ECI adjustment or three percent (3%) whichever is greater. Items that will be considered in the review of fees may include, but are not limited to: regulatory changes, card association rate adjustments, card association category changes, bank/processor dues and assessments, average consumer payment amounts, and card type utilization.

8. Payment Schedule

8.1. All one-time project costs and the first-year service fees shall be paid as follows:

8.1.1. 60% of one-time costs shall be due within 30 days of the effective date of the Agreement.

8.1.2. 30% of one-time costs shall be due within 60 days of the effective date of the Agreement.

8.1.3. The final 10% shall be due within 30 days of full system delivery or first production use of the software, whichever comes first.

8.1.4. The first-year service fees shall be due on the Go Live Date.

8.2. Any travel and lodging expenses are billed at cost as they are incurred. Such expenses shall be due within 30 days of the billing date.

8.3. Recurring software service fees will be invoiced each year on the anniversary of the effective date of the Agreement and shall be due within 30 days of the invoice date.

8.4. Payment processing service fees are invoiced monthly for the prior month’s activity and shall be due within 30 days of the invoice date.
586
1234662.2 Page 17 of 20
IN WITNESS WHEREOF, the parties hereto have entered into this Schedule Z to the MSA through their duly authorized representatives as of ___________, 2023.

Hinderliter De Llamas & Associates (HdL)
By: _________________________
Its: _________________________

City of South Lake Tahoe, CA
By: ________________________
Its: ________________________
587
1234662.2 Page 18 of 20
588
1234662.2 Page 19 of 20

HINDERLITER DE LLAMAS & ASSOCIATES (HDL)
Tax and Fee Administration Services and Fees
Transient Occupancy Tax Audits

SCOPE OF SERVICES
Consultant will provide the following Services relative to Client’s transient occupancy tax audits upon Client’s request.

1. Audit Services

1.1. Analyze Client transient occupancy tax ordinance and business procedures, and recommend possible improvements or best practices for processes, form design, and ordinance.

1.2. Analyze lodging provider data and review analysis findings with Client. Analysis will include the most recent thirty-six (36) months of tax filings along with supplemental data as available (including number of rooms, occupancy rate, physical condition, and business dynamics).

1.3. Recommend lodging providers who merit additional investigation or examination to determine their compliance with Client’s ordinance.

1.4. Lodging providers identified by Consultant and approved by Client for audit are scheduled for a compliance analysis audit.

1.5. Review records of the lodging provider for information related to compliance with Client regulations (including endeavoring to validate taxable gross rents, exemptions, bank statements, daily/monthly summaries, and other relevant compliance-related information). Supporting documentation for relevant items such as exemptions will also be reviewed.

1.6. Generate lodging provider compliance report (including results of the compliance analysis audit and recommended actions). Review report with Client and determine next steps.

1.7. Notify deficient lodging providers of the findings as well as instructions for payment and appeal processes. Schedule appointments with lodging providers to review findings and educate regarding proper filing procedures in order to prevent future errors and deficiencies.

1.8. Send compliant lodging providers a letter of commendation, thanking them for their cooperation and compliance.

1.9. Invoice lodging providers found to be underreporting through the standard Client approved collections process.

FEES

2. Audit Services

2.1. Fees for performing audit Services are $2,150.000 per property.

2.1.1.Fees will be increased as of January 1st of each calendar year starting with January 1, 2025 with reference to the 12-month percent change in the most recently published annual Consumer Price Index for All Urban Consumers (CPI-U), West Region, as reported by the U.S. Bureau of Labor Statistics (the “CPI Change”). Each annual increase in the Fees will be equal to the greater of two percent (2%) or the actual CPI Change and the lesser of ten percent (10%) or the actual CPI Change. For example, if the actual CPI Change is 1.5%, then the annual increase will be 2%, if the actual CPI Change is 3.5%, then the annual increase will be 3.5%, and if the actual CPI Change is 12%, then the annual increase will be 10%.

2.2. Fees related to travel and lodging expenses are billed at cost and apply to all meetings (including implementation, training, operations and support).

2.3. Fees will be invoiced monthly to Client for Services performed during the prior month. Client will submit payment for any balance due to Consultant within 30 days of receiving the invoice. 589
1234662.2 Page 20 of 20

3. IN WITNESS WHEREOF, the parties hereto have entered into this Schedule F to the MSA through their duly authorized representatives as of ___________, 2023.

CONSULTANT:

Hinderliter De Llamas & Associates (HdL)
By: _________________________
Its: _________________________

CLIENT:

City of South Lake Tahoe, CA
By: ________________________
Its: ________________________
590

EXHIBIT B

COMPENSATION SCHEDULE SUMMARY
BUDGET
Estimated fees (one-time costs not to exceed) $ 76,500.00 Recurring Annual Software Use and Hosting Fee $22,000.00 Travel and out-of-pocket expenses TBD, upon approval
(travel expenses will be submitted at cost, per prior approval by the City) TOTAL (First Year, Not To Exceed) $76,500.00
Not to Exceed Annually starting Go Live Date (plus CPI) $22,000.00 Optional Services:

Transient Occupancy Tax Audits (per audit) $2,150
Compliance Services (BL audit) (of all collected revenues) 40% File conversion (maximum of 16 hours) $4,720

591

EXHIBIT C

ANTI-LOBBYING CERTIFICATION
Consultant shall submit to City this certification prior to or at the time of the execution of this Agreement.

The undersigned certifies, to the best of his or her knowledge or belief, that:

Consultant:

By:________________________________________
592
City of South Lake Tahoe
Agenda Item Executive Summary
Joe Irvin, City Manager
__________________________________
Meeting Date: August 8, 2023
Agenda Item #:12
Agenda Item: Issuance of 2023 Lease Revenue Bonds Series A for the Multigenerational Recreation and Aquatic Center Construction Financing in a Principal Amount Not to Exceed $59 Million Executive Summary: The City contemplates a bond financing to help fund the proposed construction of the Multigenerational Recreation and Aquatic Center ("Recreation Center Complex"), with the remaining portion of the construction and other additional auxiliary costs currently estimated to total approximately $73.7 million. On August 9, 2022, the South Tahoe Joint Powers Financing Authority (STJPFA or Authority), adopted Resolution 2022-001 authorizing the issuance and sale of lease revenue bonds in an aggregate principal amount not to exceed $52,000,000 in order to finance the cost of construction of the new Recreation Center Complex. The Department of Public Works released Phase 2 bid documents for the vertical construction and remaining site work to the public on August 22, 2022. On October 24, 2022, the City received two bids for the project. On November 15, 2022, the City Council rejected both bids and directed staff to re-bid the project. On May 16, 2023, the City issued the bid documents to the four qualified bidders. On June 27, 2023, the City received one bid from Roebbelen Contracting, Inc for the Base Bid amount of $67,526,000 and the total bid amount of $67,851,097, including alternates. The project will be financed by the 2023 Lease revenue bonds. To take advantage of favorable market conditions, it is beneficial to increase the not-to-exceed bond principal authorization to $59,000,000 to provide more flexibility. A decline in interest rates can lead to a scenario where the borrowing amount can be increased, and the associated annual debt service remain the same or decrease. Additionally, this scenario could potentially require less general fund monies allocated to the project.

Requested Action / Suggested Motions: 1) Hold a Public Hearing with the respect to the proposed issuance of bonds by the South Tahoe Joint Powers Financing Authority (Authority) to assist the City with financing the construction of the Recreation Center Complex; 2) Acting as the City Council, Pass a Resolution approving the issuance of the Authority Lease Revenue Bonds, 2023 Series A, and authorizing the City`s execution and delivery of related documents and taking related actions; and, 3) Acting as the Authority, Pass a Resolution authorizing the sale, issuance and delivery of Lease Revenue Bonds, 2023 Series A, and authorizing the execution and delivery of an indenture and other documents and taking related actions.

Responsible Staff Member: Joe Irvin, City Manager and Authority Executive Director, Olga Tikhomirova, Finance Director and Authority Treasurer
Reviewed and Approved By: Susan Blankenship, City Clerk Heather Stroud, City Attorney Attachments:
01-Staff_Report_2023_Lease_Revenue_Bonds_for_Rec_Center.docx 02-Resolution 2023 Lease Revenue Bonds Rec Center.DOCX
03-STJPFA Resolution 2023 Lease Revenue Bonds Rec Center.DOCX 04-Lease Agreement SLT 2023 Lease Revenue Bonds.DOCX
05-Sublease Agreement SLT 2023 Lease Revenue Bonds.DOCX 06-Assignment Agreement SLT 2023 Lease Revenue Bonds Rec Center.DOCX 07-Continuing Disclosure Certificate SLT 2023 LRBs.pdf
08-Preliminary Official Statement (POS) SLT 2023 LRBs.pdf 09-Bond Purchase Agreement SLT 2023 LRBs.pdf
10-Indenture SLT 2023 Lease Revenue Bonds.DOCX
593
11-Notice of Public Hearing Proof 2023 LRBs.pdf
12-City of SLT_Presentation 2023 Bonds.pptx
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Council Agenda Report August 8, 2023 Page 1 of 7
City of South Lake Tahoe
Report to City Council and
South Tahoe Joint Powers Financing Authority
Meeting Date: August 8, 2023
Title: Proposed Issuance of 2023 Lease Revenue Bonds Series A for the Recreation Center Construction Financing
Location: Citywide
Responsible Staff Member: Joe Irvin, City Manager and Authority Executive Director (530) 542-6043; Olga Tikhomirova, Director of Finance and Authority Treasurer, (530) 542-7431
Background: The City contemplates a bond financing to help fund the proposed construction of a new Recreation Center Complex (currently estimated to be approximately $71.58 million).

On August 9, 2022, the South Tahoe Joint Powers Financing Authority (STJPFA or Authority), adopted Resolution 2022-001 authorizing the issuance and sale of lease revenue bonds in an aggregate principal amount not to exceed $52,000,000 in order to finance the cost of construction of the new Recreation Center Complex.

On October 24, 2022, the Department of Public Works received two bids for the project.

On November 7, 2022, the lowest bidder notified the Department of Public Works of their request to withdraw their bid per Public Contract Code section 5103, citing clerical error.

On November 15, 2022, the South Lake Tahoe City Council voted to reject all bids for construction on the project. The City Council directed staff to conduct value engineering, consider additional contractor incentives, and re-bid the project.

Staff worked with the consultants to incorporate value engineering and other incentives in the contract provisions. In addition, staff developed Pre-Qualification requirements and advertised the requirements on Planet Bids on March 24, 2023. Four Contractors submitted Pre-Qualification documents, and all four were selected for submittal of the bids. On May 16, 2023, the City issued the Bid documents to the four qualified bidders.

On June 27, 2003, the City received one bid from Roebbelen Contracting, Inc. for the Base Bid amount of $67,526.000.00. On August 8, 2023, Staff will recommend to award the bid to Roebbelen Contracting, Inc.

Please see the following staff reports for further information:
 Construction Contract Award for Multi-Generational Recreation and Aquatics Center Phase 2 (August 8, 2023)
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Council Agenda Report August 8, 2023 Page 2 of 7
The Bonds to fund Phase 2 of the project will be issued by the South Tahoe Joint Powers Financing Authority (“Authority”). Pursuant to Government Code Section 6586.5, the City must make a finding of significant benefit before the Authority’s issuance of the Bonds, after the noticed public hearing. Notice of the public hearing was published on July 28, 2023.

Staff recommends that the Council hold the public hearing and adopt a Resolution (attachment #2) to make a finding of significant benefit, approve the issuance of the Bonds and authorize the execution of related documents. Pursuant to the resolution to be adopted by the Authority, the new principal amount of the Bonds will not exceed $59 million, and the true interest cost will not exceed 6.0 percent.

As described above, the previously approved par amount for the proposed financing is $52 million. To take advantage of favorable market conditions, it is beneficial to increase the not-to-exceed principal authorization beyond the expected borrowing amount to provide more flexibility. Effectively, $52 million is the debt capacity of Measure P revenues using conservative interest rate assumptions. A decline in interest rates can lead to a scenario where the borrowing amount can be increased, and the associated annual debt service remain the same or decrease. Additionally, this scenario could potentially require less general fund monies allocated to the project. The new proposed par amount of the bonds is $59 million. The actual bond principal (or par) amount will not exceed a level where the required debt service is greater than the estimated FY 2022/23 Measure P revenues.

Issue and Discussion: The City is undertaking to build a new Recreation Center Complex. The current estimated cost of phase 2 construction is approximately $71.58 million with other additional auxiliary costs of approximately $2,075,000. A bond financing is proposed to fund the project. A portion of the project will be financed by the Bonds and the City will finance the rest of the project.

The Bonds will be in the form of “lease revenue bonds” to be issued by the Authority.

Based on market estimates as of June 30, 2023, the principal amount of the Bonds will be not to exceed $59 million. The principal and interest payments, together, on the bonds is expected to be approximately $3.39 million each fiscal year until final maturity for the 30-year term of the Bonds. The City anticipates paying 100% of debt service on the Bonds from Measure P revenues; however, if Measure P revenues are insufficient for such purpose in a particular year, the City may use any other legally available sources, including General Fund revenues, for such payments. For Fiscal Years 2016-17 through 2021-22, Measure P revenues were $2,507,719, $3,307,933, $3,435,411, $2,764,825, $3,234,866, and 3,424,163 respectively. There is no sunset date for Measure P.

City staff will also recommend (in a separate resolution) the appropriation of funds to complete the funding for phase 2 of the project and associated labor compliance, permitting and utilities fees with Measure P cash on hand in the amount of up to $11,200,000, Measure S sales tax General Fund available fund balance in the amount of up to $1,000,000, unallocated ARPA funding in the amount of approximately $2,700,000, and General Fund Undesignated Excess Reserves in the amount of up to $2,600,000. 596
Council Agenda Report August 8, 2023 Page 3 of 7
Financing Structure
The proposed financing will involve a “lease-lease back” arrangement. The Bonds will be issued pursuant to an Indenture (the “Indenture”), between the Authority and The Bank of New York Mellon Trust Company, N.A., as bond trustee (the “Trustee”). The Bonds will be payable from “Revenues” of the Authority which primarily consist of lease payments (the “Lease Payments”) to be made by the City to the Authority pursuant to the Sublease for the leasing the following properties (collectively, the “Leased Properties”):
(1) 1352 Johnson Boulevard - Police Station; (2)1176 Rufus Allen - Ice Arena; (3) 1201 Al Tahoe - Bijou Park; and (4) 1150 Rufus Allen - the new Recreation Center Complex Property. The City will agree to annually appropriate sufficient moneys to satisfy the Lease Payments.

Financing Documents
City Council Resolution: By adopting the Resolution (attachment #2), the City Council will authorize the issuance of the Bonds and approve the execution and delivery of the following documents. The documents are substantially the same as the documents approved in the 2022 Resolution. Primarily, updates include the revised year of issuance as well as additional updated City information in the City’s Preliminary Official Statement.

Each of the documents are presented in substantial final form and will be completed after the Bonds are priced (i.e., when the principal amount of the Bonds, the interest rates and the original issue premium or discount will be determined). (i) Lease Agreement (the “Lease”),
(ii) Sublease Agreement,
(iii) Continuing Disclosure Certificate,
(iv) Preliminary Official Statement, and
(v) Bond Purchase Agreement.

Authority Resolution: By adopting the Resolution (attachment #3), the Authority Board will authorize the issuance of the Bonds and approve the execution and delivery of the following documents. The documents are substantially the same as the documents approved in the 2022 Resolution. Primarily, updates include the revised year of issuance and the new not to exceed bond par amount as well as additional updated City information in the City’s Preliminary Official Statement. Each of the documents are presented in substantial final form and will be completed after the Bonds are priced (i.e., when the principal amount of the Bonds, the interest rates and the original issue premium or discount will be determined).
(i) Indenture,
(ii) Lease Agreement,
(iii) Sublease Agreement,
(iv) Assignment Agreement,
(v) Preliminary Official Statement, and
(vi) Bond Purchase Agreement.
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Council Agenda Report August 8, 2023 Page 4 of 7
Below are brief descriptions of these documents:
(i) Lease Agreement: (Attachment 4)
Under the Lease Agreement, the City will lease the Leased Properties to the Authority in consideration for the application of the bond proceeds for the project.
(ii) Sublease Agreement: (Attachment 5)
Under the Sublease, the Authority will sublease the Leased Properties to the City and the City will pay the Lease Payments. The scheduled Lease Payments will correspond, in amounts and due dates, to the scheduled principal and interest payments of the Bonds. The City will also covenant to maintain certain insurance coverage with respect to the Leased Properties. (iii) Assignment Agreement: (Attachment 6)
Under this agreement, the Authority will assign its right to receive the Lease Payments from the City pursuant to the Sublease and certain other rights under the Lease and Sublease to the Trustee, for the benefit of the owners of the Bonds.
(iv) Continuing Disclosure Certificate: (Attachment 7)
Under the Continuing Disclosure Certificate, the City will agree to provide a copy of its audited financial statements and a report of other information relevant to the security of the Bonds for filing each year, to make this information available to the investors. The City will also agree to disclose and make filings upon the occurrence of certain enumerated events (such as material default by the City on its financial obligations). (iv) Preliminary Official Statement:( Attachment 8)
In connection with a public offering, the Preliminary Official Statement (the “POS”) will be distributed by the underwriter to potential investors. The POS provides a summary of the proposed terms of the Bonds, the sources of repayment and certain risks relating to the investment in the Bonds. As permitted by federal securities laws, some of the terms relating to the Bonds (such as interest rates and redemption schedule), will appear as blanks or be footnoted as “preliminary; subject to change” in the POS and will not be determined until the pricing of the Bonds. After the pricing of the Bonds, these terms will be inserted, and the POS will be converted into a final Official Statement. The underwriter will then distribute the Official Statement to buyers of the Bonds and cause it to be uploaded onto the Electronic Municipal Market Access website (known as EMMA), the official repository for information pertaining municipal securities issued in the United States. 598
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The Official Statement is the “offering document” for the Bonds, required to be made available to investors pursuant to federal securities laws. The Official Statement must include all information that would be material to a prospective investor’s decision whether to purchase the Bonds. While the various members of the financing team have contributed to the preparation of the POS and the Official Statement, the City and the Authority are ultimately responsible for ensuring that the POS is accurate, contains no misleading information and does not omit any information necessary to make the POS not misleading to investors.
(v) Bond Purchase Agreement: (Attachment 9)
In connection with a public offering, this agreement will be executed on the day that the Bonds are priced (i.e., when the principal amount of the Bonds, the interest rates and the original issue premium or discount will be determined, a few weeks before the closing date). Under this agreement, the underwriter will agree to buy the Bonds from the Authority on the issuance date of the Bonds upon satisfaction of the closing conditions specified in the Bond Purchase Agreement, including the execution and delivery of applicable documents by the Authority and the City.
(vi) Indenture: (Attachment 10)
The Indenture contains provisions pertaining to the terms of the Bonds, including maturity schedule, interest rates and redemption provisions. It also provides for the establishment and maintenance of certain funds and accounts (including a debt service reserve account) and the rights and duties of the Trustee. Under the Indenture, the Authority will pledge “Revenues” derived from the City’s Lease Payments under the Sublease to pay debt service on the Bonds.

Financing Team
PFM Financial Advisors LLC is the City’s Municipal Advisor, Richards, Watson & Gershon, A Professional Corporation, serves as Bond Counsel, Jones Hall, A Professional Law Corporation, serves as Disclosure Counsel, and Stifel is the Underwriter.

RECOMMENDED ACTION
 Hold a public hearing pursuant to Government Code Section 6586.5 with respect to the proposed issuance of the Bonds and the financing of the Recreation Center Complex project.
 Adopt Resolution of the City Council of the City of South Lake Tahoe Approving the Issuance of the South Tahoe Joint Powers Financing Authority Lease Revenue 599
Council Agenda Report August 8, 2023 Page 6 of 7
Bonds, 2023 Series A, Authorizing the City’s Execution and Delivery of Related Documents and Taking Related Actions
 Adopt Resolution of the South Tahoe Joint Powers Financing Authority Authorizing the Sale, Issuance and Delivery of Lease Revenue Bonds, 2023 Series A, Authorizing the Execution and Delivery of an Indenture and Other Documents and Taking Related Actions
Financial Implications: Stifel, Nicolaus & Company, Incorporated (“Stifel”), the Underwriter, has provided estimates regarding certain financial aspects of the proposed financing based on market conditions as of July 31, 2023, which estimates have been reviewed by PFM Financial Advisors LLC, the Municipal Advisor.

The current estimates indicate that the principal amount of the Bonds will be approximately $51.3 million (below the not to exceed amount of $59 million). The principal and interest payments, together, on the Bonds will be approximately $3.4 million each fiscal year until final maturity. The term of the Bonds will be 30 years.

Pursuant to Government Code Section 5852.1, the following good faith estimates (obtained from the Underwriter and the Municipal Advisor) must be disclosed at a public meeting before the authorization of the Bonds. The estimates are based on market estimates as of July 31, 2023:

Information to be disclosed per Government Code
Section 5852.1:

Estimates as of
July 31, 2023*
True interest cost of the Bonds (the rate necessary to
discount the amounts payable on the respective
principal and interest payment dates to the purchase
price received for the new issue of Bonds)

4.39%
Finance charge of the Bonds (the sum of fees and
charges paid to third parties):
$506,500
Amount of proceeds received by the public body from
the sale of the Bonds, less the finance charge of the
bonds and any reserves or capitalized interest paid or
funded with proceeds of the Bonds
$55,892,848
The total payment amount (the sum total of all debt
service payments on the Bonds, plus the finance charge
of the Bonds not paid from bond proceeds)
$102,150,368
* These are good faith estimates only. Final results will likely differ based on market conditions as of the actual sale date and other factors. 600
Council Agenda Report August 8, 2023 Page 7 of 7
Environmental Considerations: An Initial Study/Mitigated Negative Declaration (IS/MND) under the California Environmental Quality Act (CEQA) for the 56 Acres Master Plan and Recreation Center Complex was adopted by the City Council on January 18, 2022, and the Notice of Determination was filed with the El Dorado County Clerk on January 19, 2022. The issuance of bonds for the Recreation Center Complex is within the scope of the IS/MND and no further environmental review is required under CEQA Guidelines section 15162.

Policy Implications: Consistent with City’s Financial Policies and City Council Strategic Priority 1 – Built Environment, Goal 1.2 Mid-Town Revitalization. 601
Resolution 2023-XXX August 8, 2023 Page 1 of 4
Resolution 2023-XXX
Adopted by the City of South Lake Tahoe
City Council
August 8, 2023
Approving the Issuance of the South Tahoe Joint Powers Financing Authority Lease Revenue Bonds, 2023 Series A, Authorizing the City’s Execution and Delivery of Related Documents and Taking Related Actions

BACKGROUND
A. The South Tahoe Joint Powers Financing Authority (the “Authority”) is a joint powers authority duly organized and existing under and pursuant to that certain Joint Exercise of Powers Agreement, dated January 3, 1989, as amended by Amendment No. 1, dated as of March 1, 2022, by and between the City of South Lake Tahoe (the “City”) and the Parking Authority of the City of South Lake Tahoe, and under the provisions of Articles 1 through 4 (commencing with Section 6500), Chapter 5, Division 7, Title 1 of the Government Code of the State of California (the “Act”), and is authorized pursuant to Article 4 of the Act to issue bonds to provide financing for public capital improvements.

B. The Authority proposes to issue and sell lease revenue bonds (the “Bonds”), to be secured pursuant to an Indenture (the “Indenture”), to be entered into by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”).

C. Proceeds of the Bonds will used to assist the City with financing the cost of construction of a new multigenerational recreation center (the “Project”).

D. In connection with the issuance of the Bonds, it is proposed that the Authority will enter into a Lease Agreement (the “Lease”), under which the Authority will lease certain real properties, including the land and the improvements thereon (collectively, the “Leased Properties”) from the City, and a Sublease (the “Sublease”), under which the City will sublease the Leased Properties from the Authority and make base rental payments, calculated to be sufficient to allow the Authority to pay principal and interest payments on the Bonds.

E. For the benefit of the holders of the Bonds, the Authority will enter into the Assignment Agreement (defined below) under which the Authority will assign its right to receive the base rental payments and certain other rights of the Authority under the Lease and Sublease to the trustee for the Bonds.

F. There has been presented to the Authority and the City a Bond Purchase Agreement (the “Bond Purchase Agreement”), to be entered into by and among the Authority, the City and Stifel, Nicolaus & Company, Incorporated, as underwriter (the 602
Resolution 2023-XXX August 8, 2023 Page 2 of 4
“Underwriter”), pursuant to which the Underwriter will purchase the Bonds, upon their issuance, from the Authority.

G. Pursuant to Section 6586.5 of the California Government Code, after notice duly published in accordance with law, the City Council held a public hearing on this date with respect to the proposed issuance of the Bonds and the related financing and received evidence concerning the public benefits therefrom.

BASED ON THE FACTS SET FORTH IN THE BACKGROUND, BE IT RESOLVED, that the City Council of the City of South Lake Tahoe hereby finds, determines, resolves and orders as follows:

1. Recitals. The above recitals are true and correct and are a substantive part of this Resolution.

2. Finding of Public Benefit; Approval of Bond Issuance. The City Council hereby finds that the Authority's issuance of the Bonds to finance the Project will result in significant public benefit to the constituents of the City, including more efficient delivery of local agency services to residential and commercial development. The City Council hereby approves the issuance of the Bonds.

3. Lease. The Lease Agreement (the “Lease”), proposed to be entered into by and between the City, as lessor, and the Authority, as lessee, in the form on file with the City Clerk, is hereby approved. Each of the Mayor, the Mayor Pro Tem, and the City Manager (together, the “Authorized Officers”), acting singly, is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Lease in substantially said form, with such changes therein as such Authorized Officer may require or approve (such approval to be conclusively evidenced by the execution and delivery thereof).

4. Sublease. The Sublease (the “Sublease”), proposed to be entered into by and between the Authority, as sublessor, and the City, as sublessee, in the form on file with the City Clerk, is hereby approved. Each Authorized Officer, acting singly, is hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Sublease in substantially said form, with such changes therein as such Authorized Officer may require or approve (such approval to be conclusively evidenced by the execution and delivery thereof).

5. Bond Purchase Agreement. The Bond Purchase Agreement, in the form on file with the City Clerk, is hereby approved. Subject to the satisfaction of the parameters set forth in the resolution of the Authority authorizing the issuance of the Bonds (the “Authority Resolution”), each Authorized Officer, acting individually, is hereby authorized, for and in the name and on behalf of the City, execute and deliver the Bond Purchase Agreement in substantially said form, with such changes therein as the Authorized Officer executing the same may require or approve (such approval to be conclusively evidenced by the execution and delivery thereof).

6. Preliminary Official Statement. The Preliminary Official Statement relating to the Bonds (the “Preliminary Official Statement”), in the form on file with the City Clerk, is hereby approved. Each Authorized Officer, acting singly, is hereby authorized and directed, for and in the name and on behalf of the City, to cause the Preliminary Official Statement 603
Resolution 2023-XXX August 8, 2023 Page 3 of 4
in substantially said form, with such additions or changes therein as such Authorized Officer may approve, to be deemed final for the purposes of Rule 15c2-12 promulgated pursuant to the Securities and Exchange Act of 1934. The distribution by the Underwriter of copies of the Preliminary Official Statement to potential purchasers of the Bonds is hereby approved.

7. Official Statement. Each Authorized Officer, acting singly, is hereby authorized and directed, for and in the name and on behalf of the City, to cause the Preliminary Official Statement to be brought into the form of a final Official Statement (the “Official Statement”), and to execute the same for and in the name and on behalf of the City, with such additions or changes therein as such Authorized Officer may approve (such approval to be conclusively evidenced by such Authorized Officer’s execution and delivery thereof). The distribution and use of the Official Statement by the Underwriter in connection with the sale of the Bonds are hereby approved.

8. Continuing Disclosure Certificate. The Continuing Disclosure Certificate, in the form attached as Appendix D to the form of Preliminary Official Statement on file with the City Clerk, is hereby approved. Each Authorized Officer, acting individually, is hereby authorized, for and in the name and on behalf of the City, to execute and deliver the Continuing Disclosure Certificate in substantially said form, with such changes therein as the Authorized Officer executing the same may require or approve (such approval to be conclusively evidenced by the execution and delivery thereof).

9. In connection with the issuance of the 2023 Bonds, the appointment of the following firms is hereby approved: (i) PFM Financial Advisors LLC, as municipal advisor, (ii) Richards, Watson & Gershon, A Professional Corporation, as bond counsel, and (iii) Jones Hall, a Professional Law Corporation, as disclosure counsel.

10.In accordance with Government Code Section 5852.1, there has been presented to this City Council in the Staff Report accompanying this Resolution certain good faith estimates provided to the City by its municipal advisor with respect to the Bonds. The City Council hereby finds that the requirements of Government Code Section 5852.1 have been satisfied.

11.The Authorized Officers and all other officers of City, are hereby authorized, jointly and severally, to execute and deliver any and all necessary instruments and to do all things which they may deem necessary or proper to effectuate the purposes of this Resolution, the documents approved hereby, and to assist the Authority with respect to the issuance, sale and delivery of the Bonds (including, but not limited to, obtaining reserve fund surety bonds, bond insurance policies or other types of credit enhancement, as necessary or appropriate) and any such actions previously taken by such officers are hereby ratified and confirmed.

Adopted by the City Council of the City of South Lake Tahoe at a duly noticed regular meeting of the City Council held on August 8, 2023, by the following vote:

Yes:

No:

Absent:
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Resolution 2023-XXX August 8, 2023 Page 4 of 4
Abstain:
___________________________ Date:___________
Cody Bass, Mayor Pro Tem
Attest:
____________________________
Susan Blankenship, City Clerk
The presence of electronic signature certifies that the foregoing is a true and correct copy as approved by the South Lake Tahoe City Council.
605
Resolution 2023-XXX August 8, 2023 Page 1 of 4
Resolution 2023-XXX
Adopted by the South Tahoe Joint Powers Financing Authority August 8, 2023
Authorizing the Sale, Issuance and Delivery of Lease Revenue Bonds, 2023 Series A, Authorizing the Execution and Delivery of an Indenture and Other Documents and Taking Related Actions

C. Proceeds of the Bonds will used to assist the City with financing the cost of construction of a new multigenerational recreation center (the “Project”).

F. There has been presented to the Authority and the City a Bond Purchase Agreement (the “Bond Purchase Agreement”), to be entered into by and among 606
Resolution 2023-XXX August 8, 2023 Page 2 of 4
the Authority, the City and Stifel, Nicolaus & Company, Incorporated, as underwriter (the “Underwriter”), pursuant to which the Underwriter will purchase the Bonds, upon their issuance, from the Authority.

G. The City Council of the City, has made a finding, after a duly noticed public hearing pursuant to Section 6586.5 of the Government Code, that the issuance of the Bonds will result in significant public benefit.

BASED ON THE FACTS SET FORTH IN THE BACKGROUND, BE IT RESOLVED, that the Governing Board of the South Tahoe Joint Powers Financing Authority hereby finds, determines, resolves and orders as follows:

1. The above recitals are true and correct and are a substantive part of this Resolution.

2. Acknowledgement of City Finding; Authorization of Bond Issuance. The Authority hereby acknowledges and concurs with the City Council’s finding of significant public benefit. The Authority hereby authorizes the issuance and sale of the Bonds, subject to the parameters set forth below.

3. Indenture. Subject to the parameters set forth below, the issuance of the Bonds is hereby approved and authorized. The Indenture (the “Indenture”), proposed to be entered into by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee for the Bonds (the “Trustee”), in the form on file with the Authority Secretary, is hereby approved. Each of the Chairperson, the Vice Chairperson and the Executive Director of the Authority, and any officer of the Authority designated by any of them in writing (each, an “Authorized Officer”), acting singly, is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Indenture in substantially said form, with such changes therein as such Authorized Officer may require or approve (such approval to be conclusively evidenced by the execution and delivery thereof).

4. Lease. The Lease Agreement (the “Lease”), proposed to be entered into by and between the City, as lessor, and the Authority, as lessee, in the form on file with the Authority Secretary, is hereby approved. Each Authorized Officer, acting singly, is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Lease in substantially said form, with such changes therein as such Authorized Officer may require or approve (such approval to be conclusively evidenced by the execution and delivery thereof).

5. Sublease. The Sublease (the “Sublease”), proposed to be entered into by and between the Authority, as sublessor, and the City, as sublessee, in the form on file with the Authority Secretary, is hereby approved. Each Authorized Officer, acting singly, is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Sublease in substantially said form, with such changes therein as such Authorized Officer may require or approve (such approval to be conclusively evidenced by the execution and delivery thereof).

6. Assignment Agreement. The Assignment Agreement (the “Assignment Agreement”), proposed to be entered into by and between the Authority and the Trustee, 607
Resolution 2023-XXX August 8, 2023 Page 3 of 4
in the form on file with the Authority Secretary, is hereby approved. Each Authorized Officer, acting singly, is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Assignment Agreement in substantially said form, with such changes therein as such Authorized Officer may require or approve (such approval to be conclusively evidenced by the execution and delivery thereof).

7. Bond Purchase Agreement. The Bond Purchase Agreement, in the form on file with the Authority Secretary, is hereby approved. Subject to the parameters set forth below, each Authorized Officer, acting individually, is hereby authorized, for and in the name and on behalf of the Authority, execute and deliver the Bond Purchase Agreement in substantially said form, with such changes therein as the Authorized Officer executing the same may require or approve (such approval to be conclusively evidenced by the execution and delivery thereof).

8. Bonds. The Executive Director is hereby authorized to act on behalf of the Authority to establish and determine: (i) the aggregate principal amount of the Bonds, which shall not exceed $59,000,000; (ii) the purchase price of the Bonds and the interest rates thereon, provided that the true interest cost shall not exceed 6.0%; and (iii) the Underwriter’s compensation (discount) which shall not exceed one percent of the principal amount of the Bonds, exclusive of any original issue discount.

9. Preliminary Official Statement. The Preliminary Official Statement relating to the Bonds (the “Preliminary Official Statement”), in the form on file with the Authority Secretary, is hereby approved. Each Authorized Officer, acting singly, is hereby authorized and directed, for and in the name and on behalf of the Authority, to cause the Preliminary Official Statement in substantially said form, with such additions or changes therein as such Authorized Officer may approve, to be deemed final for the purposes of Rule 15c2-12 promulgated pursuant to the Securities and Exchange Act of 1934. The distribution by the Underwriter of copies of the Preliminary Official Statement to potential purchasers of the Bonds is hereby approved.

10. Official Statement. Each Authorized Officer, acting singly, is hereby authorized and directed, for and in the name and on behalf of the Authority, to cause the Preliminary Official Statement to be brought into the form of a final Official Statement (the “Official Statement”), and to execute the same for and in the name and on behalf of the Authority, with such additions or changes therein as such Authorized Officer may approve (such approval to be conclusively evidenced by such Authorized Officer’s execution and delivery thereof). The distribution and use of the Official Statement by the Underwriter in connection with the sale of the Bonds are hereby approved.

11. In connection with the issuance of the Bonds, the appointment of the following firms is hereby approved: (i) PFM Financial Advisors LLC, as municipal advisor, (ii) Richards, Watson & Gershon, A Professional Corporation, as bond counsel, and (iii) Jones Hall, a Professional Law Corporation, as disclosure counsel.

12. In accordance with Government Code Section 5852.1, there has been presented to this Board of Directors in the Staff Report accompanying this Resolution certain good faith estimates provided to the Authority by its municipal advisor with respect to the Bonds.

The Board of Directors hereby finds that the requirements of Government Code Section 5852.1 have been satisfied.
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13. The Authorized Officers, and all other officers of Authority, are hereby authorized, jointly and severally, to execute and deliver any and all necessary instruments and to do all things which they may deem necessary or proper to effectuate the purposes of this Resolution, the documents approved hereby, and the issuance, sale and delivery of the Bonds (including, but not limited to, obtaining reserve fund surety bonds, bond insurance policies or other types of credit enhancement, as necessary or appropriate) and any such actions previously taken by such officers are hereby ratified and confirmed.

Adopted by the South Tahoe Joint Powers Financing Authority at a duly noticed regular meeting of the Governing Board held on August 8, 2023, by the following vote:

Yes:

No:

Absent:

Abstain:
___________________________ Date:____________, 2023
Cody Bass, Vice Chair
Attest:
____________________________
Susan Blankenship, Authority Secretary
The presence of electronic signature certifies that the foregoing is a true and correct copy as approved by the South Tahoe Joint Powers Financing Authority. 609
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Recording requested by and when
recorded mail to:

City of South Lake Tahoe
c/o Richards, Watson & Gershon,
A Professional Corporation
350 South Grand Avenue, 37th Floor
Los Angeles, California 90071
Attention: Lolly Enriquez, Esq.

This Document is recorded for the benefit of the City of South Lake Tahoe and is exempt from California documentary transfer tax pursuant to Section 11928 of the California Revenue and Taxation Code and from recording fees pursuant to Sections 6103, 27383 and 27388.1 of the California Government Code.
====================================================================

LEASE AGREEMENT
by and between
the

CITY OF SOUTH LAKE TAHOE,
as lessor
and the

SOUTH TAHOE JOINT POWERS FINANCING AUTHORITY,
as lessee
Dated as of August 1, 2023
==================================================================== 610

TABLE OF CONTENTS
Page
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SECTION 1. DEFINITIONS..............................................................................................1 SECTION 2. LEASE OF LEASED PROPERTY ....................................................................2 SECTION 3. TERM .........................................................................................................2 SECTION 4. RENTAL......................................................................................................2 SECTION 5. TITLE ..........................................................................................................3 SECTION 6. DEFAULT....................................................................................................3 SECTION 7. EMINENT DOMAIN....................................................................................4 SECTION 8. RIGHT OF ENTRY .......................................................................................4 SECTION 9. SURRENDER OF PROPERTIES UPON TERMINATION .................................4 SECTION 10. QUIET ENJOYMENT BY THE AUTHORITY...................................................4 SECTION 11. ASSIGNMENTS AND SUBLEASES ...............................................................4 SECTION 12. WAIVER OF PERSONAL LIABILITY ..............................................................5 SECTION 13. TAXES ........................................................................................................5 SECTION 14. GOVERNING LAW......................................................................................5 SECTION 15. NOTICES ....................................................................................................5 SECTION 16. VALIDITY AND SEVERABILITY ....................................................................5 SECTION 17. PURPOSE OF LEASE ...................................................................................5 SECTION 18. WAIVER OF DEFAULT ................................................................................5 SECTION 19. SECTION HEADINGS ..................................................................................6 SECTION 20. AMENDMENTS ..........................................................................................6 SECTION 21. EXECUTION................................................................................................6

EXHIBIT A DESCRIPTION OF LEASED PROPERTY
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LEASE AGREEMENT
This Lease Agreement, dated as of August 1, 2023 (this “Lease”), is made by and between the CITY OF SOUTH LAKE TAHOE, a municipal corporation duly organized and existing under the laws of the State of California (the “City”), as lessor, and the SOUTH TAHOE JOINT POWERS FINANCING AUTHORITY, a joint powers authority duly formed and existing under the laws of the State of California (the “Authority”), as lessee.

RECITALS:

A. The Authority is a joint powers authority duly organized and existing under and pursuant to that certain Joint Exercise of Powers Agreement, dated January 3, 1989, as amended by Amendment No. 1, dated as of March 1, 2022, by and between the City of South Lake Tahoe (the “City”) and the Parking Authority of the City of South Lake Tahoe, and under the provisions of Articles 1 through 4 (commencing with Section 6500), Chapter 5, Division 7, Title 1 of the Government Code of the State of California (the “Act”), and is authorized pursuant to Article 4 of the Act to issue bonds to provide financing for public capital improvements; and B. The Authority is issuing its Lease Revenue Bonds, 2023 Series A (the “Bonds”), pursuant to the Indenture, dated as of August 1, 2023 (the “Indenture”), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee.

C. Proceeds from the sale of the Bonds will be used to (i) finance the cost of construction of the City’s new multigenerational recreation center, and (ii) pay cost of issuance.

D. In connection with the issuance of the Bonds, the City and the Authority desire to enter into this Lease, whereby the Authority will lease certain real property from the City (the “Leased Property”).

E. Pursuant to the Sublease, dated as of even date herewith, by and between the City and the Authority, the Authority will sublease the Leased Property to the City.

NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND OF THE MUTUAL

AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR OTHER VALUABLE CONSIDERATION, THE PARTIES HERETO DO HEREBY AGREE AS FOLLOWS:

SECTION 1. DEFINITIONS.

SECTION 2. LEASE OF LEASED PROPERTY.

The City hereby leases the Leased Property to the Authority and the Authority hereby leases the Leased Property from the City, on the terms and conditions hereinafter set forth.

SECTION 3. TERM.

The term of this Lease shall commence on the Commencement Date and shall end on the last day of the term of the Sublease; which is the earliest of: (i) the Expiration Date; (ii) the date on which the Base Rental payments are paid (or prepaid) in full under the provisions of the Sublease; or (iii) the date of discharge of the Indenture.

SECTION 4. RENTAL.

The Authority agrees to pay to the Trustee on the Closing Date the proceeds of the Bonds as advance rental for the use and right to possession of the Leased Property for the term of this Lease. The rental shall be applied by the Trustee as provided in the Indenture. 613
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SECTION 5. TITLE.

In accordance with the Sublease, the City shall obtain one or more CLTA (or at the City’s sole discretion, ALTA) policies of title insurance at the time of and dated as of the Commencement Date in an amount not less than the aggregate principal amount of the Outstanding Bonds, payable to the Trustee, insuring the respective interests of the City and the Authority in the Leased Property, and insuring the validity of this Lease and the Sublease, issued by a title insurance company qualified to do business in the State of California and acceptable to the Authority. To the extent permitted under the Indenture, the costs of obtaining such title insurance policy or policies may be paid out of the sale proceeds of the Bonds.

SECTION 6. DEFAULT.

If -
(a) the Authority shall fail to keep, observe or perform any term, covenant or condition contained herein to be kept or performed by the Authority, or (b) the Authority’s interest in this Lease or any part thereof is assigned or transferred without the written consent of the City, either voluntarily or by operation of law or otherwise, except as provided in Section 11 hereof, or
(c) any proceeding under the United States Bankruptcy Code or any federal or state bankruptcy, insolvency or similar law or any law providing for the appointment of a receiver, liquidator, trustee or similar official of the Authority or of all or substantially all of its assets is instituted by or with the consent of the Authority, or is instituted without its consent and is not permanently stayed or dismissed within 30 days, or (d) the Authority offers to the Authority’s creditors to effect a composition or extension of time to pay the Authority’s debts, or asks, seeks or prays for a reorganization or to effect a plan of reorganization or for readjustment of the Authority’s debts, or (e) the Authority shall make, in connection with any proceedings related to bankruptcy, insolvency, liquidation, winding up or similar events a general assignment or any assignment for the benefit of the Authority’s creditors, then the Authority shall be deemed to be in default hereunder and it shall be lawful for the City to exercise any and all rights and remedies available pursuant to law; provided, however, that:
(i) no merger of this Lease and the Sublease shall be deemed to occur as a result thereof and (ii) so long as any Bonds remain outstanding, the City shall have no power to terminate this Lease by reason of any default on the part of the Authority.

Neither the City nor the Authority shall in any event be in default in the performance of any of its obligations hereunder or imposed by law unless and until the City or the Authority (as the case may be) shall have failed to perform such obligation within 30 days 614
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after notice by the Authority or the City (as the case may be) to the nonperforming party properly specifying wherein such party has failed to perform any such obligation.

SECTION 7. EMINENT DOMAIN.

If the whole or any part of the Leased Property shall be taken under the power of eminent domain, the interest of the Authority shall be recognized and any condemnation award shall be applied as provided in Section 9 of the Sublease.

SECTION 8. RIGHT OF ENTRY.

The City and its assignees shall have the right to enter any of the Leased Property during reasonable business hours (and in emergencies at all times) (a) to inspect the same, (b) for any purpose connected with the City’s or the Authority’s rights or obligations under this Lease and (c) for all other lawful purposes.

SECTION 9. SURRENDER OF PROPERTIES UPON TERMINATION.

The Authority agrees upon the termination of this Lease to quit and surrender the Leased Property in the same good order and condition as the same were in at the time of commencement of the term hereunder, reasonable wear and tear excepted, and the Authority and the City agree that any permanent improvements and structures existing upon the Leased Property at the time of the termination of this Lease shall remain thereon and title thereto shall be vested in the City.

SECTION 10. QUIET ENJOYMENT BY THE AUTHORITY.

The Authority shall at all times during the term of this Lease peaceably and quietly have, hold and enjoy the real property leased hereunder without suit, trouble or hindrance from the City, subject to the rights granted to the City under the Sublease, and subject to the Authority’s compliance with the terms and provisions hereof.

SECTION 11. ASSIGNMENTS AND SUBLEASES.

The parties understand that this Lease and the rights of the Authority hereunder (except the Authority’s rights to give approvals and consents hereunder and to indemnification and payment or reimbursement for any costs or expenses of the Authority hereunder) will be assigned to the Trustee pursuant to the Assignment Agreement for the benefit of the Owners of the Bonds. Except as provided in the foregoing sentence, the Authority shall not assign, mortgage, hypothecate or otherwise encumber this Lease or any rights hereunder or the leasehold created hereby by trust agreement, indenture or deed of trust or otherwise or sublet the Leased Properties without the written consent of the City except as provided by the Sublease and as security for the Bonds.
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SECTION 12. WAIVER OF PERSONAL LIABILITY.

All liabilities hereunder on the part of the Authority shall be solely liabilities of the Authority as a separate legal entity, and no member, officer or employee of the Authority shall at any time or under any circumstances be individually or personally liable hereunder for anything done or omitted to be done by the Authority under this Lease.

SECTION 13. TAXES.

The City shall be responsible for the payment of any and all assessments of any kind or character and also all taxes, including possessory interest taxes, levied or assessed upon the Leased Property.

SECTION 14. GOVERNING LAW.

This Lease shall be governed exclusively by the provisions hereof and by the laws of the State of California.

SECTION 15. NOTICES.

Any notice, request, demand, or other communication under this Lease shall be governed by Section 9.14 of the Indenture, which is hereby incorporated.

SECTION 16. VALIDITY AND SEVERABILITY.

If for any reason this Lease shall be held by a court of competent jurisdiction to be void, voidable, or unenforceable by the City or by the Authority, or if for any reason it is held by such a court that any of the covenants and conditions of the Authority hereunder is unenforceable for the full term hereof, then and in such event this Lease is and shall be deemed to be a lease from year to year and all of the rental and other terms, provisions and conditions of this Lease, except to the extent that such terms, provisions and conditions are contrary to or inconsistent with such holding, shall remain in full force and effect.

SECTION 17. PURPOSE OF LEASE.

The Authority covenants that during the term of this Lease, except to the extent that other uses may be permitted under the Sublease, it will use, or cause the use of, the Leased Property to be consistent with the descriptions set forth in the Sublease or related public purposes.

SECTION 18. WAIVER OF DEFAULT.

Failure of the City to take advantage of any default on the part of the Authority shall not be, or be construed as, a waiver thereof, nor shall any custom or practice which may grow up between the parties in the course of administering this Lease be construed to waive or to lessen the right of the City to insist upon performance by the Authority of any term, covenant 616
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or condition hereof, or to exercise any rights given the City on account of such default. A waiver of a particular default shall not be deemed to be a waiver of the same or any subsequent default. The acceptance of rent hereunder shall not be, nor be construed to be, a waiver of any term, covenant or condition of this Lease.

SECTION 19. SECTION HEADINGS.

All section headings contained are for convenience of reference only and are not intended to define or limit the scope of any provision of this Lease.

SECTION 20. AMENDMENTS.

This Lease may not be amended unless such amendment is agreed upon in writing by the parties hereof; provided that, no such amendment shall materially affect the interests and rights of the Owners of the Bonds under the Indenture or the Sublease unless: (i) there shall have been delivered to the Trustee an opinion of Bond Counsel that such amendment will not adversely affect the tax-exempt status of any Bonds, or (ii) the Trustee shall have obtained written consent of the Owners of at least a majority in aggregate principal amount of the affected Bonds then Outstanding to such amendment. A substitution or release of any portion of the Leased Properties under this Lease and the Sublease, or an amendment to delete of a portion of the Leased Properties in connection with a partial prepayment of Base Rental under the Sublease from insurance or condemnation proceeds, shall not be considered as materially affecting the interests and rights of the Owners of the Bonds if such substitution, release or deletion complies with the provisions of the Sublease. The Authority shall provide copies of all amendments to the Trustee promptly after execution of any such amendment.

SECTION 21. EXECUTION.

This Lease may be executed in any number of counterparts, each of which shall be deemed to an original, but all together shall constitute but one and the same instrument. 617
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IN WITNESS WHEREOF, the City and the Authority have caused this Lease to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written.

CITY OF SOUTH LAKE TAHOE
By:

Cody Bass, Mayor Pro Tem
Attest:

Susan Blankenship, City Clerk

SOUTH TAHOE JOINT POWERS FINANCING

AUTHORITY
By:

Joe Irvin, Executive Director
Attest:

Susan Blankenship, Secretary
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EXHIBIT A

DESCRIPTION OF LEASED PROPERTY

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SOUTH LAKE TAHOE,

COUNTY OF EL DORADO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS, TOGETHER WITH IMPROVEMENTS THEREON:

PARCEL 1 - 1352 Johnson Boulevard - Police Station: (APN: 025-010-021-100) All that portion of Section 3, Township 12 North, Range 18 East, M.D.M., more particularly described as follows:

Beginning at the corner common to Lots 1, 2 and 14 of said Section 3; thence along the lot line common to Lot 2 and Lot 14 South 89°26’11” West, 695.04 feet to a point of cap at a nontangent curve from which the center bears South 30°11’22” West, 640.00 feet; thence Southeasterly along said curve through a central angle of 25°42’14” an arc distance 287.12 feet; thence tangent to said curve South 34°06’24” East, 108.00 feet; thence North 89°26’11” East, 617.42 feet; thence North 18°37’15” East, 303.22 feet to a point on the lot line common to Lot 1 and Lot 14; thence South 89°26’11” West, 287.86 feet to the point of beginning.

PARCEL 2 - 1201 Al Tahoe - Bijou Park: (APNs: 025-010-051, 025-041-009) All that certain real property situate in Section 3, Township 12 North, Range 18 East, Mount Diablo Meridian, City of South Lake Tahoe, County of El Dorado, State of California, and being a portion of Government Lots 13 and 14 as shown on the Official Government Plat of Township 12 North, Range 18 East, Mount Diablo Meridian approved in 1866 and being further described as being a portion of the lands shown and delineated on that certain Record of Survey filed in Book 11 of surveys at Pages 52 thru 52C of the Official Records of El Dorado County, California, and being more particularly described as follows:

Beginning at a 3" Brass Disk stamped "RCE 5438" marking the Northeast Corner of Lot 14, as shown on said Record of Survey;
Thence from said Point of Beginning, along the north line of said Lot 14, South 89°23'26" West a distance of 377.01 feet;
Thence leaving said north line, South 00°24'15" East a distance of 715.00 feet; Thence South 89°23'26" West a distance of 871.37 feet to a point of non-tangent curvature situate on the easterly right of way of Johnson Boulevard; Thence along said right of way, from a radial line which bears South 50°44'21" East, southwesterly 75.27 feet along the arc of a 260.00 foot radius curve to the right, through a central angle of 16°35'12";
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Thence continuing along said right of way, South 55°50'51" West a distance of 92.55 feet to a point of curvature;
Thence continuing along said right of way and the northeasterly right of way of Al Tahoe Boulevard, 39.27 feet along the arc of a 25.00 foot radius tangent curve to the left, through a central angle of 90°00'00";
Thence along said northeasterly right of way of Al Tahoe Boulevard, the following four (4) courses, distances and arcs:

1. South 34°09'09" East, 890.10 feet to a point of curvature;

2. Southeasterly 224.70 feet along the arc of a 1960.00 foot radius tangent curve to the left, through a central angle of 6°34'07";

3. South 40°43'16" East, 577.64 feet;

4. South 57°10'46" East, 140.80 feet;
Thence leaving said right of way, North 78°42'18" East a distance of 252.52 feet, more or less, to a point situate on the East line of aforementioned Section 3; Thence along said Section Line, North 00°04'21" East a distance of 2245.13 feet to the Point of Beginning.

PARCEL 3 - 1176 Rufus Allen – Ice Arena: (Portions of APN 026-050-004-000 (old ) 026-050-009 and 026-050-010 (new) and 026-050-005-000 ( old) 026-050-007 and 026-050-009 (new) All that certain real property situate in Lot 1 of Section 32, Township 13 North, Range 18 East, Mount Diablo Meridian, County of El Dorado, City of South Lake Tahoe, State of California, and being a portion of Tract A as said Tract shown and delineated on that certain Record of Survey filed for record on November 16, 1988 in Book 16 of Records of Surveys at Page 30 in the office of the El Dorado County Recorder and being more particularly described as follows:

Commencing at the Southeast Corner of said Section 32:

Thence, from said True Point of Beginning, leaving the aforementioned proposed westerly Right-of-Way line, North 88°56'42" West a distance of 576.88 feet; Thence South 01'36'54" West a distance of 311.27 feet;
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Thence South 89°02'41" East a distance of 97.32 feet;
Thence South 00°20'03" East a distance 42.68 feet;
Thence North 88°44'16" East a distance of 486.53 feet to a point of non-tangent curvature; Thence from a radial line which bears South 83°56'49" East, northerly 65.77 feet along the arc of a 590.00 foot radius non-tangent curve to the left through a central angle of 06°23'14"; Thence North 00°20'03" West a distance of 289.90 feet to the Point of Beginning; EXCEPTING THEREFROM the following parcel of land presently vested in the County of El Dorado:

Commencing at the 1-1/2 inch capped iron pipe stamped "LS 2403" set in a fence line on the West side of Rufus Allen Boulevard, and from which the Southeast corner of said Section 32, a brass capped 2 inch iron pipe stamped Section 32 and B.L.M., bears South 7° 07' East 547.63 feet distant; thence South 0° 49' East 60.92 feet to the Southwest corner, a point on the West side of Rufus Allen Boulevard; thence South 85° 58' West 240.00 feet to the Southwest corner; thence North 0° 50' West 207.59 feet to the Northeast corner, a point; thence South 87° 48' East 240.00 feet to the Northeast corner, a 1 inch capped iron pipe stamped "LS 2403 1972" set on the West side of Rufus Allen Boulevard; thence along the West side of Rufus Allen Boulevard South 0° 49' East 120.58 feet to the point of commencement.

Said land also being known as “Remaining Parcel 1” pursuant to that certain Certificate of Parcel Map Waiver recorded August 24, 2022 as Document No. 2022-0034734, of Official Records.

PARCEL 4 - 1150 Rufus Allen - Multigenerational Recreation Center: (Portions of APN 026-050- 004-000 (old ) 026-050-009 and 026-050-010 (new) and 026-050-005-000 ( old) 026-050-007 and 026-050-009 (new)
All that certain real property situate in Lot 1 of Section 32, Township 13 North, Range 18 East, Mount Diablo Meridian, County of El Dorado, City of South Lake Tahoe, State of California, and being a portion of Tract A as said Tract shown and delineated on that certain Record of Survey filed for record on November 16, 1988 in Book 16 of Records of Surveys at Page 30 in the office of the El Dorado County Recorder and being more particularly described as follows:

Commencing at the Southeast Corner of said Section 32:

Thence from said Point of Commencement, along the Easterly line of said Section 32, North 00°20'03" West a distance of 1321.81 feet;
Thence continuing along said Easterly Section Line, North 00°15'50" West a distance of 775.91 feet to a point situate on the southerly Right-of-Way line of U.S. 50; 621
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Thence leaving said Section Line, along the aforementioned southerly Right-of-Way line, South 73°47'02" West a distance of 314.14 feet to the True Point of Beginning:

Thence from said True Point of Beginning, continuing along said southerly Right-of-Way line of U.S. Highway 50, South 73°47'02" West a distance of 210.75 feet to a point of curvature; Thence continuing along said southerly Right-of-Way line, southerly end westerly 572.08 feet along the arc of a 990.00 foot radius tangent curve to the left through a central angle of 33°06'32";
Thence leaving said southerly Right-of-Way line, South 34°27' 10" East a distance of 514.27 feet to a point situate on the northerly line of a proposed 60.00 foot Right-of-Way as yet unnamed; Thence along the said northerly proposed unnamed Right-of-Way line, South 88°31'49" East a distance of 631.90 feet to a point on the proposed westerly Right-of-Way line of Rufus Allen Boulevard,
Thence leaving the said northerly proposed unnamed Right-of-Way line and proceeding along said proposed westerly Right-of-Way line of Rufus Allen Boulevard, North 00°20'03" West a distance of 116.04 feet;
Thence continuing along said proposed westerly Right-of-Way line, North 00° 15' 50" West a distance of 140.25 feet;
Thence leaving said proposed westerly Right-of-Way line, North 89° 54' 15" West a distance of 245.35 feet; Thence North 00°04'52" East a distance of 547.79 feet to the Point of Beginning.

Said land also being known as “Remaining City Lands Proposed City Parcel 3” pursuant to that certain Certificate of Parcel Map Waiver recorded August 24, 2022 as Document No. 2022- 0034734, of Official Records.
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State of California )
County of El Dorado )
On _________________________, before me, ,
(insert name and title of the officer)
Notary Public, personally appeared , who proved to me
on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature (Seal)
State of California )
County of El Dorado )
On _________________________, before me, ,
(insert name and title of the officer)
Notary Public, personally appeared , who proved to me
on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature (Seal)
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 623
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Recording requested by and when
recorded mail to:

City of South Lake Tahoe
c/o Richards, Watson & Gershon,
A Professional Corporation
350 South Grand Avenue, 37th Floor
Los Angeles, California 90071
Attention: Lolly Enriquez, Esq.

SUBLEASE
by and between
the

SOUTH TAHOE JOINT POWERS FINANCING AUTHORITY,
as lessor,
and the

CITY OF SOUTH LAKE TAHOE,
as lessee
Dated as of August 1, 2023
==================================================================== 624

TABLE OF CONTENTS
Page
12463-0017\2636604 -iSECTION 1. DEFINITIONS..........................................................................................................1 SECTION 2. TERM ...................................................................................................................3 SECTION 3. RENTAL..................................................................................................................3 SECTION 4. USE OF PROCEEDS.................................................................................................5 SECTION 5. MAINTENANCE, UTILITIES, TAXES AND ASSESSMENTS ........................................5 SECTION 6. CHANGES TO THE LEASED PROPERTY...................................................................5 SECTION 7. TITLE INSURANCE..................................................................................................6 SECTION 8. OTHER INSURANCE ...............................................................................................6 SECTION 9. DAMAGE, DESTRUCTION AND CONDEMNATION.................................................8 SECTION 10. DEFAULT................................................................................................................9 SECTION 11. PREPAYMENT AND CREDITS ...............................................................................10 SECTION 12. RIGHT OF ENTRY .................................................................................................11 SECTION 13. MECHANICS’ LIENS..............................................................................................11 SECTION 14. QUIET ENJOYMENT .............................................................................................12 SECTION 15. INDEMNIFICATION..............................................................................................12 SECTION 16. ASSIGNMENT TO TRUSTEE..................................................................................12 SECTION 17. ABATEMENT OF RENTAL .....................................................................................13 SECTION 18. ADDITIONAL COVENANTS REGARDING TAX-EXEMPT BONDS............................13 SECTION 19. SUBSTITUTION OR RELEASE OF PROPERTY.........................................................14 SECTION 20. WAIVER ...............................................................................................................15 SECTION 21. NET LEASE ...........................................................................................................15 SECTION 22. AMENDMENTS ....................................................................................................15 SECTION 23. GOVERNING LAW................................................................................................15 625
TABLE OF CONTENTS (cont.)
Page
-ii12463-0017\2636604
SECTION 24. NOTICES ..............................................................................................................15 SECTION 25. VALIDITY AND SEVERABILITY ..............................................................................15 SECTION 26. SECTION HEADINGS ............................................................................................16 SECTION 27. EXECUTION..........................................................................................................16

EXHIBIT A DESCRIPTION OF LEASED PROPERTY

EXHIBIT B BASE RENTAL PAYMENT SCHEDULE
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SUBLEASE
This Sublease, dated as of August 1, 2023 (this “Sublease”), is made by and between the SOUTH TAHOE JOINT POWERS FINANCING AUTHORITY, a joint powers authority duly formed and existing pursuant to the laws of the State of California (the “Authority”), as lessor, and the CITY OF SOUTH LAKE TAHOE, a municipal corporation duly organized and existing under the laws of the State of California (the “City”), as lessee.

RECITALS:

C. Proceeds from the sale of the Bonds will be used to assist the City with the financing the cost of construction of a new multigenerational recreation center complex.

D. In connection with the issuance of the Bonds, the City and the Authority are entering into the Lease Agreement, dated as of August 1, 2023 (the “Lease”), whereby the Authority will lease certain properties from the City (the “Leased Property”).

E. Pursuant to this Sublease, the Authority will sublease the Leased Property to the City.

NOW, THEREFORE, in consideration of the above premises and of the mutual covenants hereinafter contained and for other good and valuable consideration, the parties hereto agree as follows:

SECTION 1. DEFINITIONS.

Terms used and not otherwise defined herein but which are defined in the Indenture shall have the meanings ascribed to them in the Indenture. Unless the context otherwise requires, the terms defined in this Section shall, for all purposes of this Sublease, have the meanings specified in this Section (the following definitions to be equally applicable to both the singular and plural forms of any of such defined terms):
“Additional Rental” has the meaning assigned to that term in Section 3(b) hereof. 627
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“Assignment Agreement” means the Assignment Agreement, dated as of August 1, 2023, by and between the Authority and the Trustee, as the same may be amended, supplemented or otherwise modified from time to time.
“Base Rental” has the meaning assigned to that term in Section 3(a) hereof. “Bonds” means the Authority’s Lease Revenue Bonds, 2023 Series A. “Commencement Date” means the Closing Date with respect to the Bonds. “Expiration Date” means October 1, 2053; provided, however, if on such date, the City is in default with respect to any Base Rental payment or an abatement event has occurred such that all Base Rental payments have not been made, then the Expiration Date shall be automatically extended to October 1, 2063.
“Indenture” means the Indenture, dated as August 1, 2023, by and between the Authority and the Trustee relating to the Bonds, as the same may be amended and supplemented from time to time in accordance with the terms thereof. “Leased Property” means the real property in the City described in Exhibit A of this Sublease, and incorporated herein by reference, including improvements thereon, including the following: (1) 1352 Johnson Boulevard - Police Station; (2) 1176 Rufus Allen - Ice Arena; (3) 1201 Al Tahoe - Bijou Park; and (4) 1150 Rufus Allen - the Multigenerational Recreation Center Property
“Multigenerational Recreation Center Project” means the project to construct the City’s new multigenerational recreation center, to be located at 1150 Rufus Allen Boulevard, South Lake Tahoe, California together with improvements thereon. “Net Proceeds” means any insurance or condemnation proceeds, paid with respect to the Leased Property remaining after payment therefrom of all expenses in the collection thereof.
“Payment Date” means, with respect to a Base Rental payment, the date listed as its related “Payment Date” in Exhibit B of this Sublease.
“Permitted Encumbrances” means (a) liens for general ad valorem taxes, special taxes and assessments, if any, not then delinquent, or which the City may, pursuant to this Sublease, permit to remain unpaid; (b) liens created pursuant to or permitted under the Lease or this Sublease; (c) easements, right of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions which exist of record as of the Commencement Date; (d) utility, access and other easements and rights of way, restrictions and exceptions that do not interfere with or impair the use intended to be made of the relevant Leased Property; (e) the City’s right to access and exclusive right to use and maintain facilities essential to the City’s utilities systems; (f) any right or claim of any mechanic, laborer, materialman, supplier or vendor filed or perfected in the manner prescribed by law after the 628
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Commencement Date; (g) such minor defects, irregularities, encumbrances and clouds on title as normally exist with respect to property similar in character to the relevant Leased Property and as do not materially impair the use intended to be made of property affected thereby; and (h) easements, right of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions established following the Commencement Date which do not materially impair the City’s use of the Leased Property and to which the Authority and the City consent in writing.
“Rental Payments” means, together, Base Rental and Additional Rental. “Sublease” means this Sublease, as the same may be amended and supplemented from time to time in accordance with the terms hereof.

SECTION 2. TERM.
(a) The Authority hereby subleases to the City and the City hereby leases from the Authority, the Leased Property on the terms and conditions set forth in this Sublease. (b) The term of this Sublease shall commence on the Commencement Date, and shall end on the earliest of: (i) the Expiration Date; (ii) the date on which the Base Rental payments are paid (or prepaid) in full under the provisions the Sublease; or (iii) the date of discharge of the Indenture.
(c) Throughout the term of this Sublease, fee title to the Leased Property shall remain in the City. While any Bonds remain Outstanding under the Indenture, there shall be no merger of the subleasehold estate in the Leased Property created by this Sublease, the leasehold estate in the Leased Property created by the Lease, and the fee estate in the Leased Property merely because such estates, or any of them, have been acquired or become vested in the same person or entity.

SECTION 3. RENTAL.

Subject to the provisions of Sections 8(c) and 17 hereof, the City agrees to pay to the Authority, its successors or assigns, as rental for the use and possession of the Leased Property, the following amounts at the following times:
(a) The City shall pay as “Base Rental” to the Authority or to the Trustee, as hereinafter provided, semiannually, the rental payments in accordance with the Base Rental payment Schedule attached hereto as Exhibit B, less any amount credited against Base Rental pursuant to Section 4.02(d) of the Indenture. Each Base Rental payment shall be payable in arrears five days before its Payment Date, and shall be made in consideration for the City’s use and possession of the Leased Property for the six month period preceding the Payment Date of such payment.
(b) The City shall also pay, as “Additional Rental” hereunder, in addition to the Base Rental, to the Authority or to the Trustee, as hereinafter provided, such amounts in 629
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each year as shall be required for the payment of all costs and expenses (not otherwise paid for or provided for out of the proceeds of sale of the Bonds) incurred by the Authority or the Trustee in connection with the execution, performance or enforcement of this Sublease or the assignment hereof, the Indenture, or the Authority’s or the Trustee’s respective interests in the Leased Property, including, but not limited to, all fees, costs and expenses, all administrative costs of the Authority relating to the Leased Property (including, without limiting the generality of the foregoing, salaries and wages of employees, overhead, insurance premiums, taxes and assessments (if any), expenses, compensation and indemnification of the Trustee payable by the Authority under the Indenture), fees of auditors, accountants, attorneys or engineers, and all other reasonable and necessary administrative costs of the Authority or charges required to be paid by it to comply with the terms of the Bonds or of the Indenture. The Authority or the Trustee shall bill such Additional Rental to the City from time to time. The City shall pay amounts so billed within 30 days after receipt of the bill by the City. (c) Such payments of Base Rental and Additional Rental for each rental payment period shall constitute the total rental for said rental payment period, and shall be paid by the City in each rental payment period for and in consideration of the right of the use and possession of, and the continued quiet use and enjoyment of, the Leased Property during each such period for which said rental is to be paid. The parties hereto have agreed and determined that such total rental does not exceed the fair rental value of the Leased Property for each such period. In making such determination, consideration has been given to other obligations of the parties under this Sublease, the uses and purposes which may be served by the Leased Property and the benefits therefrom which will accrue to the City and the general public. The determination of fair rental value of the Leased Property pursuant to this paragraph shall not be deemed to be controlling in connection with a determination of fair value of the Leased Property by the parties hereto for any other purpose. (d) Each installment of Base Rental payable hereunder shall be paid in lawful money of the United States of America to the order of the Trustee at the corporate trust office of the Trustee in Los Angeles, California, or such other place as the Trustee may designate. (e) Notwithstanding any dispute between the City and the Authority, the City shall make all Rental Payments when due, without deduction or offset of any kind, and shall not withhold any Rental Payments pending the final resolution of any such dispute. In the event of a determination that the City was not liable for said Rental Payments or any portion thereof, said payments or excess of payments, as the case may be, at the option of the City, shall be credited against subsequent Rental Payments due hereunder or be refunded at the time of such determination.
(f) The City covenants to take such action as may be necessary to include all such Rental Payments due hereunder in its annual budget and to make the necessary annual appropriations for all such Rental Payments. If the City’s adopted annual budget for any fiscal year fails to include sufficient appropriation for the scheduled Rental Payments for the such fiscal year, the City shall give written notice to the Authority and the Trustee of such failure as 630
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soon as practical, but in any event within ten Business Days of the adoption of such annual budget. The covenants on the part of the City contained in this Sublease shall be deemed to be and shall be construed to be duties imposed by law and it shall be the duty of each and every public official of the City to take such action and do such things as are required by law in the performance of the official duty of such officials to enable the City to carry out and perform the covenants and agreements in this Sublease agreed to be carried out and performed by the City; provided, the obligation of the City to make Base Rental or Additional Rental payments does not constitute an obligation of the City for which the City is obligated to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation. Neither the Bonds nor the obligation of the City to make Base Rental or Additional Rental payments constitutes an indebtedness of the City, the State or any of its political subdivisions in contravention of any constitutional or statutory debt limitation or restriction.

SECTION 4. USE OF PROCEEDS.

The Authority and the City agree that the proceeds of the Bonds will be used to:
(i) finance the Projects, and (ii) pay the costs of issuing the Bonds and incidental and related expenses, as more fully set forth in the Indenture.

SECTION 5. MAINTENANCE, UTILITIES, TAXES AND ASSESSMENTS. (a) During such time as the City or any assignee or sublessee thereof is in possession of the Leased Property, all maintenance and repair, ordinary or extraordinary, of the Leased Property shall be the responsibility of the City, and the City shall pay for or otherwise arrange for the payment of: (i) all utility services supplied to the Leased Property, (ii) the cost of operation of the Leased Property, and (iii) the costs of maintenance of and repair to the Leased Property resulting from ordinary wear and tear or want of care on the part of the City.

The City shall, at the City’s sole cost and expense, keep and maintain the Leased Property clean and in a safe and good condition and repair. The Authority shall have no obligation to alter, remodel, improve, repair, decorate, or paint the Leased Property or any part thereof, and the parties hereto affirm that the Authority has made no representations or warranties to the City respecting the condition of the Leased Property.
(b) The City shall comply with all statutes, ordinances, regulations, and other requirements of all governmental entities that pertain to the occupancy or use of the Leased Property. The Authority has no responsibility or obligation whatsoever to construct any improvements, modifications or alterations to the Leased Property. (c) The parties hereto contemplate that the City will use the Leased Property for public purposes and, therefore, that the Leased Property will be exempt from all taxes presently assessed and levied with respect to real and personal property, respectively. In the event that the use, possession or acquisition by the Authority or the City of any of the Leased Property is found to be subject to taxation in any form, the City will pay during the term hereof, as the same respectively become due, all taxes and governmental charges of any kind whatsoever that may at any time be lawfully assessed or levied against or with respect to such 631
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Leased Property and any other property acquired by the City in substitution for, as a renewal or replacement of, or a modification, improvement or addition to such Leased Property; provided, that with respect to any governmental charges or taxes that may lawfully be paid in installments over a period of years, the City shall be obligated to pay only such installments as are accrued during such time as this Sublease is in effect.

SECTION 6. CHANGES TO THE LEASED PROPERTY.
(a) The City shall have the right during the term of this Sublease to acquire and construct improvements or to attach fixtures, structures or signs to any of the Leased Property if the improvements, fixtures, structures or signs are necessary or beneficial for the use of such Leased Property by the City; provided, however, that no such acquisition or construction shall result in a material reduction in the aggregate value of the Leased Property or reduce the aggregate fair rental value thereof or result in an abatement of the Rental Payments.
(b) Upon termination of this Sublease, the City may remove any fixture, structure or sign added by the City, but such removal shall be accomplished so as to leave the Leased Property, except for ordinary wear and tear and damage by casualty, in substantially the same condition as they were in before the fixture, structure or sign was attached.

SECTION 7. TITLE INSURANCE.

The City shall obtain one or more California Land Title Association insurance policies (or, at the City’s sole discretion, American Land Title Association insurance policies) at the time of and dated as of the Commencement Date in an aggregate amount not less than the aggregate principal amount of the Bonds, payable to the Trustee, insuring the respective interests of the City and the Authority in the Leased Property, and insuring the validity of this Sublease, subject only to Permitted Encumbrances, naming the Trustee as an insured thereunder, issued by a title insurance company qualified to do business in the State of California and acceptable to the Trustee. To the extent permitted under the Indenture, the costs of obtaining such title insurance policy or policies may be paid out of the sale proceeds of the Bonds.

SECTION 8. OTHER INSURANCE.
(a) Fire and Extended Coverage Insurance. The City shall maintain or cause to be maintained fire, lightning and extended coverage insurance on the Leased Property in an amount equal to (i) 100 percent of the then current replacement cost of the Leased Property, excluding the then fair market value of the land as unimproved or (ii) the principal amount of all outstanding Bonds, whichever is less (except that such insurance may be subject to a deductible clause not to exceed 10 percent of the amount of such policy). Earthquake insurance shall be maintained on the Leased Property only if available on the open market from reputable insurance companies at a reasonable cost. The extended coverage endorsement shall, as nearly as practicable, cover loss or damage by explosion, windstorm, riot, aircraft, vehicle 632
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damage, smoke, vandalism, malicious mischief, dumping or other deposit of any pollutant or other debris and such other hazards as are normally covered by such endorsement. Each such policy of insurance shall be in form reasonably satisfactory to the Authority, and shall contain a clause naming the Trustee as an additional insured and making all losses payable to the Trustee, and all proceeds thereof shall be paid over to the party contractually responsible for making repairs of casualty damage.

In the event of any damage to or destruction of the Leased Property caused by the perils covered by such insurance, the proceeds of such insurance shall be utilized to repair, reconstruct or replace the Leased Property to the end that the project shall be restored to at least the same condition that it was in prior to such damage or destruction. Any balance of such proceeds not required for such repair, reconstruction or replacement shall be transferred to the Authority and treated as Revenues and applied in the manner provided in the Indenture.
(b) Liability Insurance. The City shall maintain or cause to be maintained public liability insurance with limits of not less than $3,000,000 for one person and $5,000,000 for more than one person involved in one accident to protect the Authority and the Trustee from all direct or contingent loss or liability for damages for bodily injury or death occasioned by reason of the construction, condition or operation of the Leased Property. The City will also maintain or cause to be maintained insurance against liability for property damage resulting from any casualty attributable to the operation of the project in an amount not less than $1,000,000 for each accident. The public liability insurance and property damage insurance may be subject to a deductible clause for anyone accident of not to exceed $250,000. The insurance coverage required by this subsection may be effected by blanket policies covering the Leased Property issued to the party contractually responsible for the maintenance and operation of the project and such insurance policy or policies shall name the Trustee as an additional insured.
(c) Rental Interruption Insurance. The City will maintain or cause to be maintained rental interruption or use and occupancy insurance to cover loss, total or partial, of the use of the Leased Property as a result of any of the hazards covered by the insurance required by subsection (a) of this section in an amount not less than the greatest of the aggregate Base Rental payable by the City under this Sublease for a period of any future 24 months. Any such insurance policy shall be in form satisfactory to the Authority and shall contain a clause naming the Trustee as an additional insured and making any loss thereunder payable to the Trustee as its interests may appear. Any proceeds of such insurance shall be used by the Trustee to pay Annual Debt Service on the Outstanding Bonds for the period during which the payment of rental under the Sublease is abated, and any proceeds of such insurance not so used shall be applied as provided in the Indenture to the extent required to pay administrative costs of the Authority in connection with the Leased Property. (d) Self-Insurance; Alternative Plan of Protection. As an alternative to providing the insurance required by paragraph (b) above, the City may provide or cause to be 633
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provided a self-insurance method or plan of protection if and to the extent such self-insurance method or plan of protection shall afford reasonable protection to the City and the Authority, and their directors, officers, agents and employees and the Trustee, its directors, officers, agents and employees in light of all circumstances, giving consideration to cost, availability and similar plans or methods of protection adopted by public entities in the State of California other than the City; provided that the obligation of the Authority or City to make payments under such self-insurance shall be limited to money in a designated fund balance established by the Authority or City and that the Authority or City shall not be obligated to replenish such designated fund balance from the General Fund or be otherwise obligated to make payments except from such designated fund balance. After the Commencement Date, before any substitute method or plan may be provided by the City, there shall be filed with the Trustee a certificate of an actuary, independent insurance consultant or other qualified person, stating that, in the opinion of the signer, the substitute method or plan of protection is in accordance with the requirements of this Section and, when effective, would afford adequate protection to the City and the Authority, and their directors, officers, agents and employees and the Trustee and its directors, officers, agents and employees against loss and damage from the hazards and risks covered thereby; provided, however, that in the event the City provides a self-insurance method or plan of protection for the insurance required by paragraph (c) above, the designated fund balance established by the City shall be funded in an amount at least equal to the greatest of the aggregate Base Rental payable by the City under this Sublease for a period of any future 24 months.

Moreover, as an alternative to providing the insurance required by paragraph (b) above, the City may provide a self-insurance method or plan of protection through the California Insurance Pool Authority (or another insurance risk sharing pool joint powers authority formed in the State) or any successor entity as the City may reasonably determine.
(e) Evidence of Insurance. The City shall deliver to the Trustee each year a Certificate of the City stating that all requirements of this Sublease related to insurance have been complied with. Each such insurance policy shall require that the Trustee be given 30 days’ notice of any intended cancellation thereof or reduction of the coverage provided thereby. The Trustee shall have no responsibility as to the sufficiency of coverage or amounts of such policies. If so requested in writing by the Trustee, the City shall also deliver to the Trustee duplicate originals or certified copies of each insurance policy described in such schedule. (f) Advances. If the City shall fail to perform any of its obligations under this Section, then the Authority may, but shall not be obligated to, take such action as may be necessary to cure such failure, including the advancement of money on behalf of the City, and the City shall be obligated to repay all such advances as soon as possible, as Additional Rental under Section 3(b).
(g) Waivers of Subrogation. Each of the parties hereby waives any and all rights to recovery against the other or against any other tenant or occupant of the Leased 634
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Property, or against the officers, employees, agents, representatives, customers, and business visitors of such other party or of such other tenant or occupant of the Leased Property, for loss or damage to such waiving party or its property or the property of others under its control, arising from any cause insured against under the standard form of property damage insurance policy with all permissible extensions and endorsements covering extended perils or under any other policy of insurance carried by such waiving party in lieu thereof, to the extent such policies then in force permit such waiver.

SECTION 9. DAMAGE, DESTRUCTION AND CONDEMNATION; APPLICATION OF NET PROCEEDS.

If: (i) the whole, or any portion, of the Leased Property is destroyed (in whole or in part) or is damaged by fire of other casualty or taken by eminent domain proceedings (or sold to a government threatening to exercise the power of eminent domain), or (ii) the leasehold title in all or a portion of the Leased Property is materially impaired by reason of a defect in title, then (a) the City, but only to the extent permitted by law, shall substitute other property for the portion of the Leased Property that has been destroyed, or taken, or affected by the defective title in accordance with Section 19 hereof; or (b) the City shall require the Net Proceeds of any insurance payment (other than the Net Proceeds of rental interruption insurance which shall be applied pursuant to Section 8(c)) or any condemnation award to be held by the Trustee in a special trust fund to be applied and disbursed by the Trustee as follows:
(i) If less than all of the Leased Property shall have been so destroyed or taken or affected by defective title and the remainder is usable, then this Sublease shall continue in full force and effect as to such remainder and (A) if the portion taken or destroyed is replaced by one or more properties of equal or greater fair market value (as demonstrated by an MAI fair market appraisal), the Trustee upon written direction of the City shall disburse such proceeds to the party that incurred the expense of making such replacement and there shall not be any abatement of the Base Rental under this Sublease; or (B) failing the making of such replacement, there shall be a partial abatement of the Base Rental under this Sublease (in accordance with Section 17) and the Trustee shall apply such Net Proceeds, together with any other money then available to it for such purpose, to the Redemption Fund under the Indenture for the redemption of outstanding Bonds in accordance with Sections 4.03 and 2.03(a) of the Indenture.
(ii) If less than all of the Leased Property shall have been so destroyed or taken or affected by defective title and the remainder is not usable, or if all of the Leased Property shall have been so destroyed or taken or affected by the defective title, then the term of this Sublease shall cease as of the day that possession shall be so taken; and the Trustee shall apply such Net Proceeds, together with any other money then available to it for such purpose, to the Redemption Fund under the Indenture for the redemption of outstanding Bonds in accordance with Sections 4.03 and 2.03(a) of the Indenture. 635
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SECTION 10. DEFAULT.
(a) If default shall be made by the City in the observance or performance of any agreement, condition, covenant or term contained herein required to be observed or performed by it (including, without limitation, the payment of any Base Rental or Additional Rental due hereunder), subject to the provisions of subsection (c) below, the Authority may at any time thereafter (with or without notice and demand and without limiting any other rights or remedies the Authority may have) recover rent and other monetary charges as they become due hereunder without terminating the City’s right to possession of the Leased Property (regardless of whether or not the City has abandoned the Leased Property). Furthermore, upon the occurrence of such a default, the Authority shall have the right, and the City hereby irrevocably appoints the Authority as its agent and attorney-in-fact for such purpose, to attempt to relet the Leased Property at such rent, upon such conditions and for such term (subject to then existing Permitted Encumbrances, including but not limited to the City’s right to access and exclusive right to maintain and use facilities essential to the City’s utilities systems), and to do all other acts to maintain or preserve the Leased Property, including the removal of persons or property therefrom or taking possession thereof, as the Authority deems desirable or necessary. The City hereby waives any and all claims for any damages that may result to the Leased Property upon any action taken by the Authority under this Section 10(a).

No action taken by the Authority under this Section 10(a) shall be deemed to terminate the Lease or the Sublease and the City shall continue to remain liable for any deficiency that may arise out of such reletting, taking into account expenses incurred by the Authority due to such reletting, payable at the same time and manner as provided for Base Rental in Section 3(a).

The Authority expressly waives the right to receive any amount from the City pursuant to Section 1951.2(a)(3) of the California Civil Code.

Each and all of the remedies given to the Authority hereunder or by any law now existing or hereafter enacted are cumulative and the exercise of any one remedy shall not impair the right of the Authority to any or all other remedies. (b) In addition to any default resulting from breach by the City of any agreement, condition, covenant or term hereof, if –
(i) the City’s interest herein or any part thereof is assigned or transferred, either voluntarily or by operation of law, except as provided in Section 16; or (ii) the City shall file any petition or institute any proceedings under any act or acts, state or federal, dealing with or relating to the subject of bankruptcy or insolvency or under any amendment of such act or acts, either as a bankrupt or as an insolvent or as a debtor or in any similar capacity, wherein or whereby the City asks or seeks or prays to be adjudicated a bankrupt, or is to be discharged from any or all of its debts or obligations, or offers to its creditors to effect a composition or extension of time to pay its debts, or asks, seeks or prays for a reorganization or to effect a plan of reorganization or for a readjustment of its debts or for any other similar relief, or if the City shall make a general or any assignment for 636
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the benefit of its creditors in connection with any proceedings related to bankruptcy, insolvency, liquidation, winding up or similar event; or (iii) the City shall abandon the Leased Property or any portion thereof, then in each and every such case the City shall be deemed to be in default hereunder. (c) Neither the Authority nor the City shall be in default in the performance of any of its obligations hereunder (except for the obligation of the City to pay Base Rental when due pursuant to Section 3(a)) unless and until it shall have failed to perform such obligation within 30 days after notice by the Authority or the City, as the case may be, to the other party properly specifying wherein it has failed to perform such obligation.

SECTION 11. PREPAYMENT AND CREDITS.
(a) In the event that, pursuant to Section 9, the City determines that Base Rental shall be abated and Net Proceeds from insurance or any condemnation award shall be used to redeem Bonds, the City shall provide the Authority and the Trustee an amended Exhibit B reflecting the new schedule of Base Rental payments. (b) The City may, at its option, prepay from any source of available moneys, Base Rental then unpaid, in whole or in part, for the redemption of Bonds, which redemption date(s) shall be on or after [October 1, 2033]. In such event, the Bonds shall be redeemed pursuant to Section 2.03(b) of the Indenture. A prepayment under this Section 11(b) shall be deemed made upon the occurrence of either of the following:
(i) The City shall have deposited with the Trustee an amount equal to the sum of (A) the principal components of Base Rental being so prepaid, plus (B) the interest components with respect thereto accrued to the related redemption date(s) of the Bonds, plus (C) a premium, if any, in an amount equal to the redemption premium applicable to the Bonds being so redeemed; or
(ii) There shall have been deposited, on behalf of the Authority, with the Trustee or another fiduciary, Federal Securities in a sufficient amount to satisfy the requirements of Section 9.03 of the Indenture to discharge the Bonds to be redeemed in connection with such prepayment.

Except in the case of a prepayment of Base Rental to redeem all of the then Outstanding Bonds, a prepayment of principal components of Base Rental pursuant to this Section 11(b) shall: (1) apply only to Base Rental previously unpaid and not yet due, and (2) be applied to reduce Base Rental so that, after such prepayment (and the related redemption of Bonds), (A) each annual installment of principal components of Base Rental due hereunder shall be an integral multiple of $5,000 and (B) the principal components of Base Rental due in any year shall correspond with the principal amount of Bonds due and payable in such year. 637
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(c) Before making any prepayment pursuant to this Section 11, the City shall give written notice to the Trustee specifying the date on which the prepayment will be made.

Such notice by the City shall be given at least 45 days before the prepayment date; provided, that the Trustee may accept a shorter notice period or waive such notice requirement at the Trustee’s sole discretion. The City shall have the right to rescind an optional prepayment (exercised under Section 11(b)) by written notice to the Authority and the Trustee prior to the corresponding redemption date of the Bonds, and the Trustee, upon receipt of such notice, shall promptly send notices of rescission of such optional redemption of the Bonds pursuant to Section 2.03(e) of the Indenture.
(d) In the event of a partial prepayment of Base Rental under this Section 11, the City shall provide the Trustee with an amended Exhibit B reflecting the new schedule of Base Rental payments. A prepayment made pursuant to this Section 11 shall not cause a defeasance of Bonds unless the requirements of Section 9.03 of the Indenture are satisfied. (e) In the event of a prepayment in full of the principal component of Base Rental under this Section 11, such that this Sublease shall be terminated by its terms as provided in Section 2, all amounts then on deposit under the Indenture which are to be credited to the City’s obligations to make Base Rental payments shall be credited towards the amounts then required to be so prepaid.

SECTION 12. RIGHT OF ENTRY.

The Authority and its assignees shall have the right to enter any of the Leased Property during reasonable business hours (and in emergencies at all times), subject to the City’s reasonable security measures, (a) to inspect the same, (b) for any purpose connected with the City’s or the Authority’s rights or obligations under this Sublease, and (c) for all other lawful purposes.

SECTION 13. MECHANICS’ LIENS.

In the event the City shall at any time before or during the term of this Sublease cause any improvements or other work to be done or performed or materials to be supplied, in or upon the Leased Property, the City shall pay, when due, all sums of money that may become due for, or purporting to be for, any labor, services, materials, supplies or equipment furnished or alleged to have been furnished to or for the City in, upon or about the Leased Property and which may be secured by any mechanics’, materialmen’s or other liens against the Leased Property or the Authority’s interest therein, and will cause any such lien to be fully discharged and released at the time the performance of any obligation secured by any such lien matures or becomes due, except that, if the City desires to contest any such lien it may do so. If any such lien shall be reduced to final judgment and such judgment or such process as may be issued for the enforcement thereof is not promptly stayed, or if so stayed and said stay thereafter expires, the City shall promptly pay and discharge said judgment. 638
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SECTION 14. QUIET ENJOYMENT.

The parties hereto mutually covenant that the City, so long as it keeps and performs the covenants and agreements herein contained, shall at all times during the term of this Sublease peaceably and quietly have, hold and enjoy the Leased Property without suit, trouble or hindrance from the Authority.

SECTION 15. INDEMNIFICATION.

The City shall, to the full extent then permitted by law, indemnify, defend, protect and hold harmless the Authority and its members, officers and employees and the Trustee and its officers, directors or employees from and against any and all liabilities, obligations, losses, claims and damages whatsoever, regardless of the cause thereof (except for any liability, obligation, loss, claim or damage arising out of the negligent or intentional act or omission of the Trustee, its officers, directors or employees), and expenses in connection therewith, including, without limitation, counsel fees and expenses, penalties and interest arising out of or as the result of the entering into of this Sublease and the Indenture, or the payment of costs of (including any accident in connection with) the operation, use, condition or possession of the Leased Property or any portion thereof resulting in damage to property or injury to or death to any person. The indemnification arising under this section shall continue in full force and effect notwithstanding the full payment of all rent obligations hereunder or the termination hereof for any reason, and with regard to the Trustee, the resignation or removal of the Trustee. The City agrees not to withhold or abate any portion of the payments required pursuant hereto by reason of any defects, malfunctions, breakdowns or infirmities of the Leased Property. The Authority and the City mutually agree to promptly give notice to each other of any claim or liability hereby indemnified against following either’s learning thereof.

SECTION 16. ASSIGNMENT TO TRUSTEE; SUBLETTING BY CITY.
(a) The parties understand that this Sublease and the rights of the Authority hereunder (except for the Authority’s rights with respect to approvals or consents hereunder, and indemnification and payment or reimbursement for any costs or expenses of the Authority hereunder) will be assigned to the Trustee pursuant to the Assignment Agreement and the Indenture, and accordingly, the City agrees to make all Rental Payments due to the Authority hereunder directly to the Trustee, notwithstanding any claim, defense, setoff or counterclaim whatsoever (whether arising from a breach hereof or otherwise) that the City may have from time to time against the Authority, except as provided in Section 17. (b) Neither this Sublease nor any interest of the City hereunder shall be mortgaged, pledged, assigned or transferred by the City by voluntary act or by operation of law or otherwise; provided, subject to Section 18, that the City may sublease all or any portion of the Leased Property, and may grant concessions to others involving the use of any portion of the Leased Property, whether such concessions purport to convey a leasehold interest or a license to use a portion of the Leased Property. The City shall at all times remain liable for the performance of the covenants and conditions on its part to be performed under this Sublease, 639
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notwithstanding any subletting or granting of concessions which may be made. Nothing contained herein shall be construed to relieve the City from its obligation to pay Base Rental and Additional Rental as provided in this Sublease or to relieve the City from any other obligations contained herein.
(c) Without limiting the foregoing, to the extent that this Sublease or the Assignment Agreement confer upon or grants the Trustee any right, remedy or claim under or by reason of this Sublease, the Trustee is hereby further recognized as being a third party beneficiary hereunder and may enforce such right, remedy or claim conferred, given or granted hereunder.

SECTION 17. ABATEMENT OF RENTAL.
(a) The obligation of the City to pay Base Rental and Additional Rental shall be abated during any period in which, by reason of any damage, destruction, condemnation or impairment of leasehold interest, there is substantial interference with the use and occupancy of the Leased Property or any portion thereof by the City. Such abatement shall be in an amount agreed upon by the City and the Authority such that the resulting Base Rental in any year during which such interference continues does not exceed the fair rental value of the portions of the Leased Property as to which such damage, destruction, taking or impairment do not substantially interfere with the City’s use and right of possession. Such abatement shall continue for the period commencing with the date of such interference and ending with the restoration of the relevant Leased Property to tenantable condition. For clarification purposes, to the extent that any Base Rental is to be paid or prepaid from insurance or condemnation proceeds deposited with the Trustee pursuant to Section 8(c) of this Sublease, such Base Rental shall not be reduced or abated pursuant to this Section. (b) Upon the cessation of the occurrence of any abatement event during the term of this Sublease, the City and the Authority shall, in good faith, determine the current fair rental value of the Leased Property. If such fair rental value is greater than the fair rental value of the Leased Property determined under Section 3 as of the Commencement Date, the Base Rental shall be increased by the lesser of (i) such incremental value or (ii) the amount needed to recoup all amounts abated during the remaining term of this Sublease. (c) Except as set forth herein, in the event of any damage, destruction of condemnation, this Sublease shall continue in full force and effect and the City hereby waives any right to terminate this Sublease by virtue of such damage, destruction or condemnation.

The City further waives the benefit of Sections 1932(1), 1932(2), 1933(4), 1941 and 1942 of the California Civil Code.

SECTION 18. ADDITIONAL COVENANTS REGARDING TAX-EXEMPT BONDS.

The City covenants that during the term of this Sublease it shall not use or permit the use of the Leased Property or any proceeds of the Bonds, directly or indirectly, in any manner, and shall not take or omit to take any action, that would cause any of the Bonds to be treated 640
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as an obligation not described in Section 103(a) of the Code. The City shall comply with the provisions of the Tax Certificate, which is incorporated in this Sublease.

SECTION 19. SUBSTITUTION OR RELEASE OF PROPERTY.
(a) Notwithstanding anything herein to the contrary, the Leased Property may be substituted, in whole or in part, by other properties, or a portion of the Leased Property may be released from this Sublease, at the option of the City; provided, that the following conditions shall have been satisfied:
(i) such substitution or release does not, in the opinion of Bond Counsel, adversely affect the Tax-Exempt status of the Bonds; (ii) The City shall have provided certification to the Authority and the Trustee that the fair market value of the Leased Property, after the proposed substitution or release, shall be equal to or greater than the aggregate amount of the principal component of the Base Rental (i.e., the principal amount of the Outstanding Bonds); (iii) the City certifies to the Authority and the Trustee that, based on the City’s determination, the annual fair rental value of the Leased Property, after such substitution or release, is at least equal to the maximum annual Base Rental remaining unpaid under the terms of this Sublease, and the expected useful life of the Leased Property, after such substitution or release, extends at least to the Expiration Date; (iv) Except as provided in Section 19(b), the City shall notify the rating agency (or agencies) then rating the Bonds regarding such substitution or release; (v) in the event that the substituted property consists in whole or in part of real property, a California Land Title Association insurance policy (or, at the City’s sole discretion, an American Land Title Association insurance policy) on the substituted real property has been obtained, along with evidence that, other than Permitted Encumbrances, no prior liens exist as to the substituted property;
(vi) the City shall provide to the Authority and the Trustee evidence that any existing title insurance with respect to the portion of the Leased Property remaining after such substitution or release is not affected; and (vii) the parties hereto shall amend this Sublease to properly reflect such substitution or release.
(b) In addition to the release and substitution of property pursuant to Section 19 hereof, upon completion of the Multigenerational Recreation Center Project, the portions of the Leased Property other than the Multigenerational Recreation Center Project and the related real property upon which the Multigenerational Recreation Center Project is located (all as described in Exhibit A to this Sublease) may be released from the Lease and this Sublease; provided, however, that no such release shall occur until there is delivered to the Trustee a 641
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Written Certificate of the City that the conditions set forth in Section 19 have been satisfied and that the City has received a certificate of occupancy for, and has beneficial use and occupancy of, the Multigenerational Recreation Center Project.

SECTION 20. WAIVER.

Failure of the Authority to take advantage of any default on the part of the City shall not be, or be construed as, a waiver thereof, nor shall any custom or practice which may be established between the parties in the course of administering this Sublease be construed to waive or to lessen the right of the Authority to insist upon performance by the City of any term, covenant or condition hereof, or to exercise any rights given the Authority on account of such default. A waiver of a particular default shall not be deemed to be a waiver of the same or any subsequent default. The acceptance of rent hereunder shall not be, nor be construed to be, a waiver of any term, covenant or condition of this Sublease.

SECTION 21. NET LEASE.

Subject to the provisions of Section 17 (“Abatement of Rental”), this Sublease shall be deemed and construed to be a “Triple Net Lease” and the City hereby agrees that rental provided for herein shall be an absolute net return to the Authority, free and clear of any expenses, charges or setoffs whatsoever.

SECTION 22. AMENDMENTS.

This Sublease may only be amended to the extent permitted by Section 5.07 of the Indenture.

SECTION 23. GOVERNING LAW.

This Sublease shall be governed exclusively by the provisions hereof and by the laws of the State of California.

SECTION 24. NOTICES.

Any notice, request, demand, or other communication under this Sublease shall be governed by Section 9.14 of the Indenture, which is hereby incorporated.

SECTION 25. VALIDITY AND SEVERABILITY.

If for any reason this Sublease shall be held by a court of competent jurisdiction to be void, voidable, or unenforceable by the Authority or by the City, or if for any reason it is held by such a court that any of the covenants of the City hereunder, including the covenant to pay rentals hereunder, is unenforceable for the full term hereof, then and in such event this Sublease is and shall be deemed to be a lease from year to year under which the rentals are to be paid by the City monthly in consideration of the right of the City to possess, occupy and use the Leased Property, and all of the rental and other terms, provisions and conditions of this 642
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Sublease, except to the extent that such terms, provisions and conditions are contrary to or inconsistent with such holding, shall remain in full force and effect.

SECTION 26. SECTION HEADINGS.

All section headings contained are for convenience of reference only and are not intended to define or limit the scope of any provision of this Sublease. [Remainder of this page intentionally left blank.]
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SECTION 27. EXECUTION; RECORDATION.

This Sublease may be executed in any number of counterparts, each of which shall be deemed to be an original, but all together shall constitute but one and the same instrument.

IN WITNESS WHEREOF, the Authority and the City have caused this Sublease to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written.

SOUTH TAHOE JOINT POWERS FINANCING

AUTHORITY
By:

Joe Irvin, Executive Director
ATTEST:

Susan Blankenship, Secretary

CITY OF SOUTH LAKE TAHOE
By:

Cody Bass, Mayor Pro Tem
ATTEST:

Susan Blankenship, City Clerk
644
A-1

EXHIBIT A
Description of Leased Property

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SOUTH LAKE TAHOE, COUNTY

OF EL DORADO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS, TOGETHER WITH IMPROVEMENTS THEREON:

PARCEL 1 - 1352 Johnson Boulevard - Police Station: (APN: 025-010-021-100) All that portion of Section 3, Township 12 North, Range 18 East, M.D.M., more particularly described as follows:

Beginning at the corner common to Lots 1, 2 and 14 of said Section 3; thence along the lot line common to Lot 2 and Lot 14 South 89°26’11” West, 695.04 feet to a point of cap at a non-tangent curve from which the center bears South 30°11’22” West, 640.00 feet; thence Southeasterly along said curve through a central angle of 25°42’14” an arc distance 287.12 feet; thence tangent to said curve South 34°06’24” East, 108.00 feet; thence North 89°26’11” East, 617.42 feet; thence North 18°37’15” East, 303.22 feet to a point on the lot line common to Lot 1 and Lot 14; thence South 89°26’11” West, 287.86 feet to the point of beginning.

75.27 feet along the arc of a 260.00 foot radius curve to the right, through a central angle of 16°35'12";
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A-2
Thence continuing along said right of way, South 55°50'51" West a distance of 92.55 feet to a point of curvature;
Thence continuing along said right of way and the northeasterly right of way of Al Tahoe Boulevard, 39.27 feet along the arc of a 25.00 foot radius tangent curve to the left, through a central angle of 90°00'00";
Thence along said northeasterly right of way of Al Tahoe Boulevard, the following four (4) courses, distances and arcs:

1. South 34°09'09" East, 890.10 feet to a point of curvature;

2. Southeasterly 224.70 feet along the arc of a 1960.00 foot radius tangent curve to the left, through a central angle of 6°34'07";

3. South 40°43'16" East, 577.64 feet;

Commencing at the Southeast Corner of said Section 32:

Thence, from said True Point of Beginning, leaving the aforementioned proposed westerly Rightof-Way line, North 88°56'42" West a distance of 576.88 feet; Thence South 01'36'54" West a distance of 311.27 feet;
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A-3
Thence South 89°02'41" East a distance of 97.32 feet;
Thence South 00°20'03" East a distance 42.68 feet;
Thence North 88°44'16" East a distance of 486.53 feet to a point of non-tangent curvature; Thence from a radial line which bears South 83°56'49" East, northerly 65.77 feet along the arc of a 590.00 foot radius non-tangent curve to the left through a central angle of 06°23'14"; Thence North 00°20'03" West a distance of 289.90 feet to the Point of Beginning; EXCEPTING THEREFROM the following parcel of land presently vested in the County of El Dorado:

Said land also being known as “Remaining Parcel 1” pursuant to that certain Certificate of Parcel Map Waiver recorded August 24, 2022 as Document No. 2022-0034734, of Official Records.

Commencing at the Southeast Corner of said Section 32:

Thence from said Point of Commencement, along the Easterly line of said Section 32, North 00°20'03" West a distance of 1321.81 feet;
Thence continuing along said Easterly Section Line, North 00°15'50" West a distance of 775.91 feet to a point situate on the southerly Right-of-Way line of U.S. 50; Thence leaving said Section Line, along the aforementioned southerly Right-of-Way line, South 73°47'02" West a distance of 314.14 feet to the True Point of Beginning:
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Thence from said True Point of Beginning, continuing along said southerly Right-of-Way line of U.S.

Highway 50, South 73°47'02" West a distance of 210.75 feet to a point of curvature; Thence continuing along said southerly Right-of-Way line, southerly end westerly 572.08 feet along the arc of a 990.00 foot radius tangent curve to the left through a central angle of 33°06'32"; Thence leaving said southerly Right-of-Way line, South 34°27' 10" East a distance of 514.27 feet to a point situate on the northerly line of a proposed 60.00 foot Right-of-Way as yet unnamed; Thence along the said northerly proposed unnamed Right-of-Way line, South 88°31'49" East a distance of 631.90 feet to a point on the proposed westerly Right-of-Way line of Rufus Allen Boulevard,
Thence leaving the said northerly proposed unnamed Right-of-Way line and proceeding along said proposed westerly Right-of-Way line of Rufus Allen Boulevard, North 00°20'03" West a distance of 116.04 feet;
Thence continuing along said proposed westerly Right-of-Way line, North 00° 15' 50" West a distance of 140.25 feet;
Thence leaving said proposed westerly Right-of-Way line, North 89° 54' 15" West a distance of 245.35 feet; Thence North 00°04'52" East a distance of 547.79 feet to the Point of Beginning.

EXHIBIT B
Base Rental Payment Schedule
Payment Date Principal Component Interest Component Total TOTAL

 Payable five days before each payment date.
649
12463-0017\2636604
State of California )
County of El Dorado )
On _________________________, before me, ,
(insert name and title of the officer)
Notary Public, personally appeared , who proved to me
on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 650
12463-0017\2678944
Recording requested by and when
recorded mail to:

City of South Lake Tahoe
c/o Richards, Watson & Gershon,
A Professional Corporation
350 South Grand Avenue, 37th Floor
Los Angeles, California 90071
Attention: Lolly Enriquez, Esq.

ASSIGNMENT AGREEMENT
by and between the

SOUTH TAHOE JOINT POWERS FINANCING AUTHORITY
and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
as Trustee
Dated as of August 1, 2023
==================================================================== 651
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12463-0017\2678944

ASSIGNMENT AGREEMENT
This Assignment Agreement (this “Agreement”), dated as of August 1, 2023, is made by and between the SOUTH TAHOE JOINT POWERS FINANCING AUTHORITY, a joint powers agency duly organized and existing pursuant to the laws of the State of California (the “Authority”), and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association, duly organized and existing under and by virtue of the laws of the United States of America, as Trustee (the “Trustee”).

RECITALS:

A. The Authority is issuing its $[principal amount] in aggregate principal amount of its Lease Revenue Bonds, 2023 Series A (the “Bonds”) pursuant to an Indenture, dated as of August 1, 2023 (the “Indenture”), by and between the Authority and the Trustee.

B. In connection with the Bonds, the Authority and the City of South Lake Tahoe, California (the “City”), are entering into a Lease Agreement, dated as of August 1, 2023 (the “Lease”), whereby the City leases to the Authority leases certain real property, including improvements thereon, described in Exhibit A, attached hereto and incorporated by reference, and improvements thereon (collectively, the “Leased Property”).

C. The Authority and the City are also entering into a Sublease, dated as of August 1, 2023 (the “Sublease”), whereby the Authority subleases to the City the Leased Property.

D. Pursuant to the Sublease, the City is obligated to make certain rental payments to the Authority for the subleasing of the Leased Property.

E. The Authority desires to assign to the Trustee, without recourse, all of the Authority’s rights to receive “Base Rental” payments scheduled or required to be paid by the City under and pursuant to the Sublease.

F. The Authority has determined that all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Agreement.

NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND OF THE MUTUAL

AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR OTHER VALUABLE CONSIDERATION, THE PARTIES HERETO DO HEREBY AGREE AS FOLLOWS:

Section 1. Definitions.

Unless context clearly requires otherwise, all capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. 652
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Section 2. Assignment.

The Authority hereby transfers in trust and assigns to the Trustee, for the benefit of the Owners from time to time of the Bonds, all of the right, title and interest of the Authority in (but not of its obligations under) the Lease and the Sublease (except the Authority’s rights to give approvals and consents under the Lease and the Sublease and to indemnification and payment or reimbursement for any costs or expenses thereunder), including the Authority’s rights to receive the Base Rental Payments scheduled to be paid by the City under and pursuant to the Sublease, and any and all of the other rights of the Authority under the Lease and the Sublease as may be necessary to enforce payment of such Base Rental Payments when due or otherwise to protect the interest of the Owners of the Bonds.

Section 3. Acceptance.

The Trustee hereby accepts the foregoing assignment for the benefit of the Bond Owners, subject to the conditions and terms of the Indenture, and all such Base Rental Payments shall be applied and all such rights so assigned shall be exercised by the Trustee under and pursuant to the Indenture. Excepting only the assignment and transfer of rights to the Trustee pursuant to Section 2 hereof, this Agreement shall confer no rights and shall impose no obligations upon the Trustee beyond those expressly provided in the Indenture. In executing and performing under this Agreement, the Trustee shall be entitled to all of the rights, protections, immunities and indemnities granted to it under the Indenture.

Section 4. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance with the laws of the State of California.
(b) This Agreement shall be binding on and inure to the benefit of the parties hereto, and their successors and assigns.
(c) This Agreement may be executed in counterparts, and all such executed counterparts shall constitute the same instrument. It shall be necessary to account for only one set of such counterparts in proving this Agreement.
[Remainder of Page Intentionally Left Blank]
653
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12463-0017\2678944
IN WITNESS WHEREOF, the parties hereto have executed and entered into this Agreement by their authorized signatories thereunto duly authorized as of the day and year first above written.

SOUTH TAHOE JOINT POWERS FINANCING AUTHORITY
By:

Joe Irvin
Executive Director
ATTEST:

Susan Blankenship, Secretary
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
as Trustee
By:

Name: ___________________________________
Title: _____________________________________
654
A-1
12463-0017\2678944

EXHIBIT A

DESCRIPTION OF LEASED PROPERTY

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SOUTH LAKE TAHOE, COUNTY

OF EL DORADO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS, TOGETHER WITH IMPROVEMENTS THEREON:

PARCEL 1 - 1352 Johnson Boulevard - Police Station: (APN: 025-010-021-100) All that portion of Section 3, Township 12 North, Range 18 East, M.D.M., more particularly described as follows:

75.27 feet along the arc of a 260.00 foot radius curve to the right, through a central angle of 16°35'12";
Thence continuing along said right of way, South 55°50'51" West a distance of 92.55 feet to a point of curvature;
Thence continuing along said right of way and the northeasterly right of way of Al Tahoe Boulevard, 39.27 feet along the arc of a 25.00 foot radius tangent curve to the left, through a central angle of 90°00'00";
Thence along said northeasterly right of way of Al Tahoe Boulevard, the following four (4) courses, distances and arcs:

1. South 34°09'09" East, 890.10 feet to a point of curvature;

2. Southeasterly 224.70 feet along the arc of a 1960.00 foot radius tangent curve to the left, through a central angle of 6°34'07";

3. South 40°43'16" East, 577.64 feet;

Commencing at the Southeast Corner of said Section 32:

Thence from said Point of Commencement, along the Easterly line of said Section 32, North 00°20'03" West a distance of 780.10 feet;
Thence leaving said Easterly Section Line, North 88°56'42" West a distance of 60.02 feet to the True Point of Beginning:
656
A-3
12463-0017\2678944
Thence, from said True Point of Beginning, leaving the aforementioned proposed westerly Rightof-Way line, North 88°56'42" West a distance of 576.88 feet; Thence South 01'36'54" West a distance of 311.27 feet;
Thence South 89°02'41" East a distance of 97.32 feet;
Thence South 00°20'03" East a distance 42.68 feet;
Thence North 88°44'16" East a distance of 486.53 feet to a point of non-tangent curvature; Thence from a radial line which bears South 83°56'49" East, northerly 65.77 feet along the arc of a 590.00 foot radius non-tangent curve to the left through a central angle of 06°23'14"; Thence North 00°20'03" West a distance of 289.90 feet to the Point of Beginning; EXCEPTING THEREFROM the following parcel of land presently vested in the County of El Dorado:

Said land also being known as “Remaining Parcel 1” pursuant to that certain Certificate of Parcel Map Waiver recorded August 24, 2022 as Document No. 2022-0034734, of Official Records.

Commencing at the Southeast Corner of said Section 32:

Thence from said Point of Commencement, along the Easterly line of said Section 32, North 00°20'03" West a distance of 1321.81 feet;
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12463-0017\2678944
Thence continuing along said Easterly Section Line, North 00°15'50" West a distance of 775.91 feet to a point situate on the southerly Right-of-Way line of U.S. 50; Thence leaving said Section Line, along the aforementioned southerly Right-of-Way line, South 73°47'02" West a distance of 314.14 feet to the True Point of Beginning:

Thence from said True Point of Beginning, continuing along said southerly Right-of-Way line of U.S.

Said land also being known as “Remaining City Lands Proposed City Parcel 3” pursuant to that certain Certificate of Parcel Map Waiver recorded August 24, 2022 as Document No. 2022- 0034734, of Official Records.
658
12463-0017\2678944
State of California )
County of El Dorado )
On _________________________, before me, ,
(insert name and title of the officer)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature (Seal)
State of California )
County of El Dorado )
On _________________________, before me, ,
(insert name and title of the officer)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

APPENDIX D

FORM OF CONTINUING DISCLOSURE CERTIFICATE
$____________

SOUTH TAHOE JOINT POWERS FINANCING AUTHORITY
Lease Revenue Bonds, 2023 Series A
This Continuing Disclosure Certificate (this “Disclosure Certificate”) is executed and delivered by the City of South Lake Tahoe (the “City”) in connection with the issuance by the Authority of the bonds captioned above (the “Bonds”). The Bonds are being issued under an Indenture of Trust dated as of August 1, 2023 (the “Indenture”), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”). The City hereby covenants and agrees as follows:

Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the City for the benefit of the holders and beneficial owners of the Bonds and in order to assist the Participating Underwriter in complying with S.E.C. Rule 15c2- 12(b)(5).

Section 2. Definitions. In addition to the definitions set forth above and in the Indenture, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:
“Annual Report” means any Annual Report provided by the City pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. “Annual Report Date” means June 1 of each year.
“Dissemination Agent” means the City, or any successor Dissemination Agent designated in writing by the City and which has filed with the City a written acceptance of such designation. “Listed Events” means any of the events listed in Section 5(a) of this Disclosure Certificate. “MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule, or any other repository of disclosure information that may be designated by the Securities and Exchange Commission as such for purposes of the Rule in the future. “Official Statement” means the final official statement, executed by the City and the Authority in connection with the issuance of the Bonds. “Participating Underwriter” means Stifel Nicolaus & Company, Incorporated, the original underwriter of the Bonds required to comply with the Rule in connection with offering of the Bonds. “Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. 660
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Section 3. Provision of Annual Reports.
(a) The City shall, or shall cause the Dissemination Agent to, not later than the Annual Report Date, commencing June 30, 2024, with the report for Fiscal Year 2022-23 (which ends on September 30, 2022), provide to the MSRB, in an electronic format as prescribed by the MSRB, an Annual Report that is consistent with the requirements of Section 4 of this Disclosure Certificate. Not later than 15 Business Days prior to the Annual Report Date, the City shall provide the Annual Report to the Dissemination Agent (if other than the City). If by 15 Business Days prior to the Annual Report Date the Dissemination Agent (if other than the City) has not received a copy of the Annual Report, the Dissemination Agent shall contact the City to determine if the City is in compliance with the previous sentence. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the City may be submitted separately from the balance of the Annual Report, and later than the Annual Report Date, if not available by that date. If the City’s Fiscal Year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(b). The City shall provide a written certificate with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by the City hereunder.
(b) If the City does not provide (or cause the Dissemination Agent to provide) an Annual Report by the Annual Report Date, the City shall provide (or cause the Dissemination Agent to provide) in a timely manner to the MSRB, in an electronic format as prescribed by the MSRB, a notice in substantially the form attached as Exhibit A. (c) With respect to each Annual Report, the Dissemination Agent shall:
(i) determine each year prior to the Annual Report Date the then-applicable rules and electronic format prescribed by the MSRB for the filing of annual continuing disclosure reports; and
(ii) if the Dissemination Agent is other than the City, file a report with the City certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, and stating the date it was provided.

Section 4. Content of Annual Reports. The City’s Annual Report shall contain or incorporate by reference the following:
(a) Audited Financial Statements of the City prepared in accordance with Generally Accepted Accounting Principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the City’s audited financial statements are not available by the Annual Report Date, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available. (b) Unless otherwise provided in the audited financial statements filed on or before the Annual Report Date, financial information and operating data with respect to the City for the preceding fiscal year, substantially similar to that provided in the corresponding tables in the Official Statement:
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(i) Principal amount of Bonds outstanding.
(ii) Balance in each fund under the Indenture as of August 2 preceding the filing of the Annual Report.
(iii) General fund statement of General Fund revenues and expenditures and Balance Sheet for the most recent fiscal year in substantially the form of Table 10 and Table 11.
(iv) General fund budgeted revenues, sources and uses of funds in substantially the form of Table 1.
(v) General fund revenues by source in substantially the form of Table 2. (vi) Assessed valuation of property in the City in substantially the form of Table 7.
(vii) Principal secured taxpayers in substantially the form of Table 8. (ix) Actual Transient Occupancy Tax revenues received in the most recently ended fiscal year, in substantially the form of Table 3. (x) Top ten Transient Occupancy Tax generators, in substantially the form of Table 4.
(c) In addition to any of the information expressly required to be provided under this Disclosure Certificate, the City shall provide such further material information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading.
(d) Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities, which are available to the public on the MSRB’s Internet web site or filed with the Securities and Exchange Commission. The City shall clearly identify each such other document so included by reference.

Section 5. Reporting of Significant Events.
(a) The City shall give, or cause to be given, notice of the occurrence of any of the following Listed Events with respect to the Bonds:
(1) Principal and interest payment delinquencies.
(2) Non-payment related defaults, if material.
(3) Unscheduled draws on debt service reserves reflecting financial difficulties. (4) Unscheduled draws on credit enhancements reflecting financial difficulties. (5) Substitution of credit or liquidity providers, or their failure to perform. (6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with 662
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respect to the tax status of the security, or other material events affecting the tax status of the security.
(7) Modifications to rights of security holders, if material. (8) Bond calls, if material, and tender offers.
(9) Defeasances.
(10) Release, substitution, or sale of property securing repayment of the securities, if material.
(11) Rating changes.
(12) Bankruptcy, insolvency, receivership or similar event of the City or other obligated person.
(13) The consummation of a merger, consolidation, or acquisition involving the City or an obligated person, or the sale of all or substantially all of the assets of the City or an obligated person (other than in the ordinary course of business), the entry into a definitive agreement to undertake such an action, or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material. (14) Appointment of a successor or additional trustee or the change of name of a trustee, if material.
(15) Incurrence of a financial obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City, any of which affect security holders, if material (for definition of “financial obligation,” see clause (f)). (16) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City, any of which reflect financial difficulties (for definition of “financial obligation,” see clause (f)).
(b) Whenever the City obtains knowledge of the occurrence of a Listed Event, the City shall, or shall cause the Dissemination Agent (if not the City) to, file a notice of such occurrence with the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10 business days after the occurrence of the Listed Event. Notwithstanding the foregoing, notice of Listed Events described in subsection (a)(8) above need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected Bonds under the Indenture.
(c) The City acknowledges that the events described in subparagraphs (a)(2), (a)(7), (a)(8) (if the event is a bond call), (a)(10), (a)(13), (a)(14), and (a)(15) of this Section 5 contain the qualifier “if material” and that subparagraph (a)(6) also contains the qualifier “material” with respect to certain notices, determinations or other events affecting the tax status of the Bonds.

The City shall cause a notice to be filed as set forth in paragraph (b) above with respect to any such event only to the extent that it determines the event’s occurrence is material for purposes of U.S. federal securities law. Whenever the City obtains knowledge of the occurrence of any of these Listed Events, the City will as soon as possible determine if such event would be material under applicable federal securities law. If such event is determined to be material, the City will cause a notice to be filed as set forth in paragraph (b) above. 663
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(d) For the purposes of the event identified in (a)(12) above, the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person.
(e) For purposes of this Disclosure Certificate, any event described in paragraph (a)(12) above is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the City in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City.
(f) For purposes of Section 5(a)(15) and (16), “financial obligation” means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term financial obligation shall not include municipal securities as to which a final official statement has been provided to the Municipal Securities Rulemaking Board consistent with the Rule.

Section 6. Identifying Information for Filings with the MSRB. All documents provided to the MSRB under the Disclosure Certificate shall be accompanied by identifying information as prescribed by the MSRB.

Section 7. Termination of Reporting Obligation. The City’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the City shall give notice of such termination in the same manner as for a Listed Event under Section 5(b).

Section 8. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Agent, with or without appointing a successor Dissemination Agent.

Any Dissemination Agent may resign by providing 30 days’ written notice to the City.

Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of an obligated person with respect to the Bonds, or type of business conducted; 664
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(b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) the proposed amendment or waiver either (i) is approved by holders of the Bonds in the manner provided in the Indenture for amendments to the Indenture with the consent of holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the Bonds.

If the annual financial information or operating data to be provided in the Annual Report is amended pursuant to the provisions hereof, the first annual financial information filed pursuant hereto containing the amended operating data or financial information shall explain, in narrative form, the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided.

If an amendment is made to the undertaking specifying the accounting principles to be followed in preparing financial statements, the annual financial information for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information, in order to provide information to investors to enable them to evaluate the ability of the City to meet its obligations. To the extent reasonably feasible, the comparison shall be quantitative.

A notice of any amendment made pursuant to this Section 9 shall be filed in the same manner as for a Listed Event under Section 5(b).

Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the City chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the City shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.

Section 11. Default. In the event of a failure of the City to comply with any provision of this Disclosure Certificate, the Participating Underwriter or any holder or beneficial owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Indenture, and the sole remedy under this Disclosure Certificate in the event of any failure of the City to comply with this Disclosure Certificate shall be an action to compel performance.
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Section 12. Duties, Immunities and Liabilities of Dissemination Agent. (a) The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the City agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The Dissemination Agent shall have no duty or obligation to review any information provided to it hereunder and shall not be deemed to be acting in any fiduciary capacity for the City, the Bond owners or any other party. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. (b) The Dissemination Agent shall be paid compensation by the City for its services provided hereunder in accordance with its schedule of fees as amended from time to time, and shall be reimbursed for all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder.

Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, the Dissemination Agent, the Participating Underwriter and holders and beneficial owners from time to time of the Bonds, and shall create no rights in any other person or entity.

Section 14. Counterparts. This Disclosure Certificate may be executed in several counterparts, each of which shall be regarded as an original, and all of which shall constitute one and the same instrument.

Section 15. Governing Law. This Disclosure Certificate shall be governed by the laws of the state of California.

Date: ________________, 2023

CITY OF SOUTH LAKE TAHOE
By
Name:_____________
Title:_____________
AGREED AND ACCEPTED:

The Bank of New York Mellon Trust
Company, N.A., as Dissemination Agent
By: ___________________________
Name: ________________________
Title: __________________________
666
Jones Hall Draft of August 1, 2023
PRELIMINARY OFFICIAL STATEMENT DATED AUGUST __, 2023
NEW ISSUE - FULL BOOK-ENTRY RATING: S&P: “AA”
See “RATING”
In the opinion of Richards, Watson & Gershon, A Professional Corporation, Bond Counsel, under existing law (i) assuming continuing compliance with certain covenants and the accuracy of certain representations, interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax; however, for tax years beginning after December 31, 2022, interest on the 2023A Bonds included in adjusted financial statement income of certain corporations is not excluded from the federal corporate alternative minimum tax, and (ii) interest on the Bonds is exempt from State of California personal income taxes. Interest on the Bonds may be subject to certain federal income taxes imposed only on certain corporations. Bond Counsel expresses no opinion as to any other tax consequences regarding the Bonds. For a more complete discussion of the tax aspects, see “TAX MATTERS” herein. $______________*

SOUTH TAHOE JOINT POWERS FINANCING AUTHORITY
Lease Revenue Bonds, 2023 Series A
Dated: Date of Delivery Due: October 1, as shown on inside cover Authority for Issuance. The bonds captioned above (the “Bonds”) are being issued by the South Tahoe Joint Powers Financing Authority (the “Authority”) pursuant to an Indenture of Trust dated as of August 1, 2023 (the “Indenture”) by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”) and a resolution adopted by the Board of Directors of the Authority. See “THE BONDS – Authority for Issuance.” Use of Proceeds. The Bonds are being issued to finance the construction of a recreation and community center, and pay issuance costs. See “FINANCING PLAN.”
Security for the Bonds. Under the Indenture, the Bonds are payable from and secured by a first pledge of and lien on revenues (“Revenues”) (as defined in this Official Statement) received by the Authority under a Sublease, dated as of August 1, 2023, by and between the Authority, as lessor, and the City, as lessee (the “Sublease”), consisting primarily of semi-annual lease payments (the “Base Rental”) made by the City under the Sublease with respect to the lease of certain real property, as further described in this Official Statement. The Bonds are also secured by certain funds on deposit under the Indenture. See “SECURITY FOR THE BONDS.” Bond Terms; Book-Entry Only. The Bonds will bear interest at the rates shown on the inside cover page, payable semiannually on April 1 and October 1 of each year, commencing on April 1, 2024, and will be issued in fully registered form without coupons in the denomination of $5,000 or any integral multiple of $5,000. The Bonds will be issued in book-entry only form, initially registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”). Purchasers of the Bonds will not receive certificates representing their interests in the Bonds. Payments of the principal of, premium, if any, and interest on the Bonds will be made to DTC, which is obligated in turn to remit such principal, premium, if any, and interest to its DTC Participants for subsequent disbursement to the beneficial owners of the Bonds. See “THE BONDS – General Provisions.”
Bond Insurance For; Reserve Account Surety. The Authority has applied for municipal bond insurance; a determination regarding the use of bond insurance will be made at the time of pricing of the Bonds. If bond insurance is purchased, the Authority may also purchase a reserve account surety policy.

Redemption. The Bonds are subject to redemption prior to maturity. See “THE BONDS – Redemption.”

NEITHER THE BONDS, NOR THE OBLIGATION OF THE AUTHORITY TO PAY PRINCIPAL OF OR INTEREST THEREON, NOR

THE OBLIGATION OF THE CITY TO MAKE THE BASE RENTAL PAYMENTS, CONSTITUTE A DEBT OR A LIABILITY OF THE

AUTHORITY, THE CITY, THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS WITHIN THE MEANING OF ANY CONSTITUTIONAL LIMITATION ON INDEBTEDNESS, OR A PLEDGE OF THE FULL FAITH AND CREDIT OF THE CITY. THE BONDS ARE SECURED SOLELY BY THE PLEDGE OF REVENUES AND CERTAIN FUNDS HELD UNDER THE INDENTURE. THE BONDS ARE NOT SECURED BY A PLEDGE OF THE TAXING POWER OF THE CITY.

MATURITY SCHEDULE
(see inside cover)
THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR GENERAL REFERENCE ONLY. IT IS NOT A SUMMARY OF THIS ISSUE OF BONDS. INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION WITH RESPECT TO THE PURCHASE OF THE BONDS.

The Bonds are offered when, as and if issued and received by the Underwriter and subject to the approval as to their legality by Richards, Watson & Gershon, A Professional Corporation, Los Angeles, California, as Bond Counsel. Certain legal matters will also be passed upon for the Authority and the City by Jones Hall, A Professional Law Corporation, San Francisco, California, as Disclosure Counsel.

Certain legal matters will be passed upon for the City by the City Attorney. Certain legal matters will be passed upon for the Underwriter by its counsel, Quint & Thimmig LLP, Larkspur, California. It is anticipated that the Bonds will be delivered in book-entry form through the facilities of DTC on or about August __, 2023.
[Stifel logo]
The date of this Official Statement is: ______, 2023.
_____________________
This Preliminary Official Statement and the information contained herein are subject to completion or amendment. * Preliminary; subject to change.

These securities may not be sold nor may offers to buy be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances will this Preliminary Official Statement constitute an offer to sell or a solicitation of an offer to buy nor will there be any sale of these securities in any jurisdiction in which such offer solicitation or sale would be unlawful. 667

MATURITY SCHEDULE
$_________ Serial Bonds
(Base CUSIP†: ______)
Maturity Principal Interest
(October 1) Amount Rate Yield Price CUSIP†
$___________ ____% Term Bonds due October 1, 20___; Price: _____%; Yield: ______; CUSIP†: _______
* Preliminary, subject to change.
† CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by FactSet Research Systems Inc. Copyright (c) 2022 CUSIP Global Services.

All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP® numbers are provided for convenience of reference only. None of the Authority, the City, the Underwriter or their agents or counsel take any responsibility for the accuracy of such numbers.
668

SOUTH TAHOE JOINT POWERS FINANCING AUTHORITY
South Lake Tahoe, California
_______________________

AUTHORITY BOARD / CITY COUNCIL
Cristi Creegan, Chair/Mayor
Cody Bass, Vice Chair/ Mayor Pro-Tem
John Friedrich, Authority Member/Councilmember
Scott Robbins, Authority Member/Councilmember
Tamara Wallace, Authority Member/Councilmember

CITY / AUTHORITY STAFF
Joe Irvin, City Manager/Executive Director
David Olivo, City Treasurer
Olga Tikhomirova, Finance Director/Authority Treasurer
Susan Blankenship, City Clerk/Secretary
Heather Stroud, City Attorney/Authority Counsel

PROFESSIONAL SERVICES
Bond Counsel
Richards, Watson & Gershon, A Professional Corporation
Los Angeles, California
Disclosure Counsel
Jones Hall, A Professional Law Corporation
San Francisco, California
Municipal Advisor
PFM Financial Advisors LLC
San Francisco, California
Trustee
The Bank of New York Mellon Trust Company, N.A.

Los Angeles, California
669

GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT
No dealer, broker, salesperson or other person has been authorized to give any information or to make any representations with respect to the Bonds other than as contained in this Official Statement, and if given or made, such other information or representation must not be relied upon as having been authorized.

This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy in any state in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation.

This Official Statement speaks only as of its date, and the information and expressions of opinion contained in this Official Statement are subject to change without notice. Neither the delivery of this Official Statement nor any sale of the Bonds will, under any circumstances, create any implication that there has been no change in the affairs of the City or any other parties described in this Official Statement, or in the condition of the security for the Bonds since the date of this Official Statement.

This Official Statement is submitted in connection with the sale of the Bonds referred to in this Official Statement and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement is not a contract with the purchasers of the Bonds. Prospective investors should not construe the contents of this Official Statement as legal, tax or investment advice.

The information contained in this Official Statement has been obtained from sources that are believed to be reliable, but this information is not guaranteed as to accuracy or completeness.

The Underwriter has submitted the following statement for inclusion in this Official Statement: The Underwriter has reviewed the information in this Official Statement in accordance with, and as a part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.

All references to and summaries of the Indenture or other documents contained in this Official Statement are subject to the provisions of those documents and do not purport to be complete statements of those documents.

The Bonds have not been registered under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, in reliance upon exemptions for the issuance and sale of municipal securities provided under Section 3(a)(2) of the Securities Act of 1933 and Section 3(a)(12) of the Securities Exchange Act of 1934.

Certain statements included or incorporated by reference in this Official Statement constitute forward-looking statements. Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “project,” “budget” or other similar words. The achievement of certain results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. No assurance is given that actual results will meet the forecasts of the City in any way, regardless of the level of optimism communicated in the information. The City is not obligated to issue any updates or revisions to the forward-looking statements if or when its expectations, or events, conditions or circumstances on which such statements are based occur.

The references to internet websites in this Official Statement are shown for reference and convenience only; unless explicitly stated to the contrary, the information contained within the websites and any links contained within those websites are not incorporated herein by reference and do not constitute part of this Official Statement. 670
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TABLE OF CONTENTS
INTRODUCTION ........................................................1 FINANCING PLAN......................................................3 The Project .............................................................3 2% TOT (Measure P) Funding Source...................4
Estimated Sources and Uses .................................5 THE LEASED PROPERTY.........................................6 General...................................................................6 Changes to Leased Property..................................6 Substitution or Release of Property........................6 DEBT SERVICE SCHEDULE.....................................8 THE BONDS...............................................................9 Authority for Issuance.............................................9 General Provisions .................................................9 Transfer, Registration and Exchange...................10 Redemption ..........................................................10 Book-Entry Only System ......................................13 SECURITY FOR THE BONDS.................................13 Revenues; Pledge of Revenues...........................13 Allocation of Revenues by Trustee; Application
of Funds...........................................................14 Base Rental..........................................................15 Additional Rental ..................................................15 Fair Rental Value..................................................16 Limited Obligation.................................................16 Source of Payments; Covenant to Appropriate
Funds for Base Rental .....................................16 Abatement ............................................................17 Additional Obligations...........................................17 Default; Remedies................................................18 Covenants to Maintain Insurance.........................19 Damage, Destruction and Condemnation; Net
Proceeds..........................................................21 THE AUTHORITY.....................................................22 THE CITY .................................................................22 General.................................................................22 City Government...................................................22 Labor Relations ....................................................24 CITY FINANCIAL INFORMATION............................24 Accounting and Financial Reporting.....................24 COVID-19 Pandemic............................................25 General Fund, the Budget Process and
Information.......................................................26 Transient Occupancy Tax.................................... 29 Sales and Use Taxes........................................... 32 Property Taxes .................................................... 34 Other Sources of Revenues ................................ 39 Financial Statements ........................................... 39 General Fund Historical Financial Data............... 40 Relevant Fiscal Policies....................................... 41 Employee Retirement System; CalPERS............ 43
General Fund Long-Term Obligations ................. 46 OVERLAPPING DEBT OF THE CITY ..................... 47
Direct and Overlapping Bonded Debt.................. 47

CONSTITUTIONAL AND STATUTORY

LIMITATIONS ON TAXES AND
APPROPRIATIONS............................................. 48 Article XIIIA of the State Constitution................... 48 Article XIIIB of the State Constitution................... 48 Articles XIIIC and XIIID of the State Constitution. 49
Proposition 1A; Proposition 22 ............................ 50 Unitary Property................................................... 51 Possible Future Initiatives.................................... 51 BOND OWNERS’ RISKS......................................... 51 No Pledge of Taxes ............................................. 51 Abatement ........................................................... 52 Limited Recourse under Sublease....................... 53 Limitations on Remedies for Bondholders........... 53
Additional Obligations of the City......................... 54 Transient Occupancy Taxes................................ 54 Sales Taxes......................................................... 55 Property Taxes .................................................... 55 Natural Calamities ............................................... 56 Public Health Emergencies.................................. 58 Cyber Security ..................................................... 58 Secondary Market for Bonds ............................... 58 TAX MATTERS........................................................ 58 CERTAIN LEGAL MATTERS .................................. 61 LITIGATION ............................................................. 61 RATING ................................................................... 61 CONTINUING DISCLOSURE.................................. 62 MUNICIPAL ADVISOR ............................................ 62 UNDERWRITING..................................................... 62 EXECUTION ............................................................ 63 APPENDIX A: AUDITED FINANCIAL STATEMENTS OF THE CITY FOR FISCAL YEAR ENDED SEPTEMBER 30, 2022 APPENDIX B: GENERAL INFORMATION ABOUT THE CITY OF SOUTH LAKE TAHOE AND THE COUNTY OF EL DORADO APPENDIX C: SUMMARY OF PRINCIPAL LEGAL DOCUMENTS
APPENDIX D: FORM OF CONTINUING DISCLOSURE CERTIFICATE
APPENDIX E: FORM OF OPINION OF BOND COUNSEL
APPENDIX F: DTC AND THE BOOK-ENTRY ONLY SYSTEM
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__________________________________

OFFICIAL STATEMENT
__________________________________
$____________*

SOUTH TAHOE JOINT POWERS FINANCING AUTHORITY
Lease Revenue Bonds, 2023 Series A

INTRODUCTION
This introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement, including the cover page and appendices hereto, and the documents summarized or described herein. A full review should be made of the entire Official Statement.

The offering of the Bonds to potential investors is made only by means of the entire Official Statement. Capitalized terms used but not defined in this Official Statement have the meanings set forth in the Indenture (as defined below). See “APPENDIX C – SUMMARY OF PRINCIPAL LEGAL DOCUMENTS.”
Authority for Issuance. The South Tahoe Joint Powers Financing Authority (the “Authority”) is issuing the bonds captioned above (the “Bonds”) under the Marks-Roos Local Bond Pooling Act of 1985, constituting Article 4 (commencing with Section 6584) of Chapter 5, Division 7, Title 1 of the California Government Code (the “Bond Law”), resolutions adopted by the Board of Directors (the “Board”) of the Authority on August 8, 2023 (the “Authority Resolution”), and by the City Council (the “City Council”) of the City of South Lake Tahoe (the “City”) on August [8], 2023 (the “City Resolution”), and an Indenture (the “Indenture”) dated as of August 1, 2023, by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”).

Purpose of the Bonds. The Bonds are being issued to finance the construction of a multigenerational recreation center, and to pay issuance costs. See “FINANCING PLAN.” The Authority and the City. The Authority is a joint powers authority duly organized and existing under and pursuant to that certain Joint Exercise of Powers Agreement, dated January 3, 1989, between the City and the South Tahoe Redevelopment Agency (the “Former Redevelopment Agency”), as amended by Amendment No. 1 to Joint Exercise of Powers Agreement, dated as of March 1, 2022 (“Amendment No. 1”), by and between the City, the Successor Agency and to the South Tahoe Redevelopment Agency, as the successor to the Former Redevelopment Agency (the “Successor Agency”) and the Parking Authority of the City of South Lake Tahoe (the “Parking Authority”). The City Council serves as the Governing Board of the Authority. Pursuant to Amendment No. 1, the Parking Authority was added as a member to the Authority and the Successor Agency withdrew from the Authority. See “THE AUTHORITY” herein.
* Preliminary; subject to change.
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The City is located at the South Shore of Lake Tahoe, which is the country’s largest alpine lake, in El Dorado County, California (the “County”), and adjacent to Stateline/Zephyr Cove, Nevada, in the Sierra Nevada Mountains. The population was 20,548 as of January 1, 2023.

According to the United States Census Bureau, the City has a total area of 16.5 square miles, of which 10.1 square miles is land and 6.4 square miles is water. Elevation is 6260 ft. As the only incorporated community in the Lake Tahoe Basin, the City takes great pride in being a central hub of one of the country’s most popular tourism destinations. The east end of the City, on the California-Nevada state line, is mainly geared towards tourism, with shops, restaurants, hotels, and gondola service to the Heavenly Ski Resort, with the Nevada casinos just across the state line. The western end of town is mainly residential. For additional background, and certain demographic and economic information regarding the City and the County, see APPENDIX B.

Bond Terms; Book-Entry Only. The Bonds will bear interest at the rates shown on the inside cover page, payable semiannually on April 1 and October 1 of each year, commencing on April 1, 2023. The Bonds will be issued in fully registered form, registered in the name of The Depository Trust Company (“DTC”), or its nominee, which will act as securities depository for the Bonds. Purchasers of the Bonds will not receive certificates representing the Bonds that are purchased. See “THE BONDS – Book-Entry Only System” and “APPENDIX F – DTC AND THE BOOK-ENTRY ONLY SYSTEM.”
Security for the Bonds. The City and the Authority will enter into a Lease Agreement, dated as of August 1, 2023 (the “Lease”), under which the City will lease certain real property to the Authority, consisting of (1) the Police Station, (2) the South Lake Tahoe Ice Arena, (3) Bijou Park and (4) the Multigenerational Center (described herein) land and improvements to be built thereon (collectively, the “Leased Property”), to the Authority as further described herein under the caption “THE LEASED PROPERTY.”
In order to secure the payments of principal of and interest on the Bonds, the Authority proposes to lease the Leased Property back to the City under a Sublease, dated as of August 1, 2023 (the “Sublease”), under which the City is obligated to pay semi-annual lease payments (the “Base Rental”) as rental for the Leased Property, and the Authority will assign substantially all of its rights under the Sublease to The Bank of New York Mellon Trust Company, N.A. as trustee for the Bonds. The Bonds are payable from and secured by a first pledge of and lien on the Revenues (defined herein), consisting primarily of the Base Rental. See “SECURITY FOR THE BONDS.” Base Rental payments are payable from any legally available sources of funds of the City, and are anticipated to be paid by the City from a 2% Transient Occupancy Tax revenue measure (Measure P). See “FINANCING PLAN – 2% TOT (Measure P) Funding Source” and “CITY FINANCIAL INFORMATION – Transient Occupancy Taxes.”
Abatement. The Base Rental payments are subject to complete or partial abatement in the event and to the extent that there is substantial interference with the City’s use and possession of the Leased Property or any portion thereof. If the Base Rental payments are abated under the Sublease, the Bond Owners may receive less than the full amount of principal of and interest on the Bonds. See “SECURITY FOR THE BONDS – Abatement” and “BOND OWNERS’ RISKS – Abatement.”
Additional Obligations. Under the Indenture, the Authority may from time to time issue one or more series of Additional Bonds payable from and secured by Revenues on parity with all other Outstanding Bonds. In addition, the City is permitted to enter into other obligations which 673
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constitute additional charges against its revenues without the consent of Owners of the Bonds.

See “SECURITY FOR THE BONDS – Additional Obligations.”
Bond Insurance; Reserve Surety. The Authority has applied for municipal bond insurance; a determination regarding the use of bond insurance will be made at the time of pricing of the Bonds. If bond insurance is purchased, the Authority may also purchase a reserve account surety policy.

Redemption. The Bonds are subject to redemption prior to their stated maturity dates.

See “THE BONDS – Redemption.”
Risks of Investment. Debt service on the Bonds is payable only from Base Rental Payments and other amounts payable by the City to the Authority under the Sublease. The Base Rental payments are payable from revenues available in the City’s General Fund, which revenues may be materially adversely affected by numerous factors outside the City’s control. For a discussion of some of the risks associated with the purchase of the Bonds, see “BOND OWNERS’ RISKS.”

NEITHER THE BONDS, THE OBLIGATION OF THE AUTHORITY TO PAY PRINCIPAL

OF OR INTEREST THEREON, NOR THE OBLIGATION OF THE CITY TO MAKE THE BASE

RENTAL PAYMENTS, CONSTITUTE A DEBT OR A LIABILITY OF THE AUTHORITY, THE

CITY, THE STATE OR ANY OF ITS POLITICAL SUBDIVISIONS WITHIN THE MEANING OF

ANY CONSTITUTIONAL LIMITATION ON INDEBTEDNESS, OR A PLEDGE OF THE FULL FAITH AND CREDIT OF THE CITY. THE BONDS ARE SECURED SOLELY BY THE PLEDGE OF REVENUES AND CERTAIN FUNDS HELD UNDER THE INDENTURE. THE BONDS ARE NOT SECURED BY A PLEDGE OF THE TAXING POWER OF THE CITY.

FINANCING PLAN
The Project
The Bonds are being issued to finance a portion of the costs for the development of a multi-purpose recreation facility and community center, known as the “Multigenerational Center Project,” as the first project undertaken pursuant to the 56 Acres Master Plan.

The 56 Acres Master Plan. The 56 Acres Master Plan was developed collaboratively by the City, the County and the California Tahoe Conservancy to guide the development and enhancement of recreation and civic amenities on approximately 56 acres, located at the intersection of Highway 50 and Lake Tahoe (the “56 Acres site”). The 56 Acres site currently includes the City’s existing Recreation and Swim Complex, the South Lake Tahoe Ice Arena, the Campground by the Lake, and other civic and cultural buildings south of Highway 50, as well as Lakeview Commons and Champions Plaza north of Highway 50. The 56 Acres Master Plan envisions:
• Construction of the new Multigenerational Center Project, described below • Renovation and reconfiguration of the Campground by the Lake, with 172 campsites for RV and tent camping and seven tent cabins
• Expansion of Lakeview Commons adjacent to El Dorado Beach • Development of a new Main Street improving access to the facilities 674
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• Demolition of the existing Recreation and Swim Complex, originally built in 1971, after completion of the new Multigenerational Center Project
• Additional parking, park, trail and other improvements.

The 56 Acres site comprises approximately 42 acres owned by the County but controlled by the City pursuant to a long-term lease, and 14 acres owned by the City. Implementation of the Master Plan required a land swap between the City and County completed in 2022, pursuant to which the City took title to the planned Multigenerational Center site, retained title to the South Tahoe Ice Arena and leased the balance of the 56 Acres site from the County.

The Multigenerational Center. The Multigenerational Center will be built on City-owned land at 1150 Rufus Allen in the City. The location, in the northern part of the 56 Acres site, west of the existing public library, offers filtered views of Lake Tahoe and closer proximity to Highway 50 and Lakeview Commons. The approximately 64,220-square-foot Multigenerational Center has been designed in a mountain modern style, with a mixture of fire-resistance metal, wood, stone, and concrete materials, and has been planned to meet Leadership in Energy and Environmental Design (LEED) Gold standards. The building is planned to include multiple components and amenities, including:
• A new aquatic facility with a six-lane lap pool and 2,500-square-foot activity pool, with spray features and a lazy river, and a pool deck that can accommodate tip-and-roll bleachers for approximately 80 spectators.
• A multi-purpose gymnasium with two high school-sized courts, four middle schoolsized courts, a three-lane suspended walk/jog track, and space to accommodate tipand-roll bleachers for approximately 320 spectators Court striping could also accommodate two volleyball courts and four pickleball/badminton courts. • Additional recreation space to include an aerobics/dance studio, an arts and crafts classroom, a wet classroom by the pools, second floor event space, second floor outdoor patio, a commercial kitchen for community use, including for the County Senior Nutrition Program, and outside spaces for fitness and small group events.

Project Status. Construction of the Multigenerational Center Project has been split into two phases. Phase 1, which includes site and utility work, has been completed. Phase 1 costs of approximately $3,300,000 were funded from Measure P collections on hand. Phase 2, which includes vertical construction of the building, is expected to begin in May of 2024 and be completed by January of 2026. The City awarded the contract in August 2023 pending close of the Bonds. Based on current estimates, Phase 2 costs are expected to total approximately $73,400,000, including project construction contingency; soft costs and peripheral costs; bond proceeds will be used to fund approximately $55,000,000, with the balance coming from Measure P collections on hand and the General Fund and to a lesser extent, fundraising. 2% TOT (Measure P) Funding Source
In November 2016, voters in the City approved Measure P, to increase the Transient Occupancy Tax (TOT) levied on room nights in the City by an additional 2%, to provide a dedicated revenue source for the construction, operation and maintenance of the Multigenerational Center Project. There is no sunset date for Measure P. 675
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Measure P is dedicated for the Multigenerational Center Project and is accounted for in a special revenue fund outside of the General Fund. Measure P revenue collections for the fiscal years shown are set forth below:

Fiscal Years Measure P Revenues
2016-17(1) $2,507,719
2017-18 3,307,933
2018-19 3,435,411
2019-20 2,764,825
2020-21 3,234,866
2021-22 3,424,163
(1) For Fiscal Year 2016-17, collections represent only 9 months of collections.

Source: the City.

The City anticipates paying 100% of the Base Rental payments due under the Sublease from Measure P revenues; however, if Measure P revenues are insufficient for such purpose in a particular year, the City has covenanted to use any other legally available sources, including General Fund revenues, for such payments.

For additional information on Measure P and the City’s General Fund revenues sources, see “CITY FINANCIAL INFORMATION.”
Estimated Sources and Uses
The estimated sources and uses of funds relating to the Bonds are as follows:

Sources:

Principal Amount of Bonds $
TOTAL SOURCES $
Uses:

Deposit to Project Fund
Costs of Issuance(1)
TOTAL USES $
(1) Represents funds to be used to pay Costs of Issuance, which include rating agency fees, bond counsel, disclosure counsel, Trustee fees, Underwriter’s discount and other costs of issuing the Bonds. 676
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THE LEASED PROPERTY
General
Base Rental payments will be made by the City under the Sublease for the use and occupancy of the Leased Property. The Leased Property consists of the following:

Police Station, 1352 Johnson Boulevard. The Police Station is approximately 17,500 square feet and was built in 1972. The insured value for the Police Station is $5,524,821, with the underlying land value estimated at an additional $5,238,000.

South Lake Tahoe Ice Arena, 1176 Rufus Allen. The South Lake Tahoe Ice Arena is approximately 37,000 square feet and was built in 2002. The Ice Arena is owned by the City and managed by Tahoe Sports Entertainment, and is the only indoor, year-round ice arena in the region. Offering comprehensive programming, the Ice Arena facilitates the recreation and exercise of local athletes. The insured value of Ice Arena is $12,322,750 and the underlying land value is estimated at an additional $2,880,000.

Bijou Park, 1201 Al Tahoe. Bijou Community Park is a 38.9 acre park constructed in 1992, that offers diverse recreation opportunities, including a basketball court, bike park, fenced dog park, historic railroad exhibit, disc golf course, open meadow, restroom / concession facility, skateboard park, two covered gazebos with barbecue pits, and volleyball courts. The insured value for the structures in the park (including restrooms and picnic gazebo) is $584,661, and the underlying land value is estimated at an additional $35,026,200.

Multigenerational Center Project, 1150 Rufus Allen. The property underlying the planned Multigenerational Center, including the Multigenerational Center and certain other improvements planned to be built thereon, will be part of the Leased Property. The cost of the Multigenerational Center is expected to be approximately $72 million. For more details on the planned improvements, see “FINANCING PLAN – The Project.”
Changes to Leased Property
The City will have the right during the term of the Sublease to acquire and construct improvements or to attach fixtures, structures or signs to any of the Leased Property if the improvements, fixtures, structures or signs are necessary or beneficial for the use of such Leased Property by the City; provided, however, that such acquisition or construction must not result in a material reduction in the aggregate value of the Leased Property or reduce the aggregate fair rental value thereof.

Substitution or Release of Property
Pursuant to the Sublease, the Leased Property may be substituted, in whole or in part, by other properties, or a portion of the Leased Property may be released from the Sublease, at the option of the City; provided, that the following conditions have been satisfied:
• Such substitution or release does not, in the opinion of Bond Counsel, adversely affect the tax-exempt status of the Bonds;
• the City shall have provided certification to the Authority and the Trustee that the fair market value of the Leased Property, after the proposed substitution or release, 677
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shall be equal to or greater than the aggregate amount of the principal component of the Base Rental (i.e., the principal amount of the Outstanding Bonds); • the City certifies to the Authority and the Trustee that, based on the City’s determination, the annual fair rental value of the Leased Property, after such substitution or release, is at least equal to the maximum annual Base Rental remaining unpaid under the terms of the Sublease, and the expected useful life of the Leased Property, after such substitution or release, extends at least to the Expiration Date, as such term is defined in the Sublease; • the City will notify any rating agency then rating the Bonds regarding such substitution or release;
• in the event that the substituted property consists in whole or in part of real property, a California Land Title Association insurance policy (or, at the City’s sole discretion, an American Land Title Association insurance policy) on the substituted property has been obtained, along with evidence that, other than Permitted Encumbrances, no prior liens exist as to the substituted property; • the City will provide to the Authority and the Trustee evidence that any existing title insurance with respect to the portion of the Leased Property remaining after such substitution or release is not affected;
• the Authority and the City will amend the Sublease to properly reflect such substitution or release.

In addition to the release and substitution of property under to the Sublease, upon completion of the Multigenerational Center project, the portions of the Leased Property other than the Multigenerational Center project and the related real property upon which the Multigenerational Center project is located may be released from the Lease and the Sublease; provided, however, that no such release shall occur until there is delivered to the Trustee a certification of the City that the conditions set forth in the Sublease have been satisfied and that the City has received a certificate of occupancy for, and has beneficial use and occupancy of, the Multigenerational Center.

See “APPENDIX C − SUMMARY OF PRINCIPAL LEGAL DOCUMENTS.” 678
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DEBT SERVICE SCHEDULE
The table below shows annual debt service payments on the Bonds.

Year Ending
October 1 Principal Interest
Total
Debt Service
Total:
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THE BONDS
This section provides summaries of the Bonds and certain provisions of the Indenture.

See APPENDIX C for a more complete summary of the Indenture. Capitalized terms used but not defined in this section have the meanings given in APPENDIX C.

Authority for Issuance
The Bonds are being issued under the Bond Law, the Indenture, the Authority Resolution adopted by the Board of the Authority on August 8, 2023, and the City Resolution adopted by the City Council on August 8, 2023.

General Provisions
Bond Terms. The Bonds will be dated their date of delivery and issued in fully registered form, numbered from one upwards in consecutive numerical order (with such alphabetical prefix as the Trustee shall determine), without coupons in denominations of $5,000 or any integral multiple of $5,000. The Bonds will mature in the amounts and on the dates, and bear interest at the annual rates, set forth on the inside cover page of this Official Statement.

Payments of Principal and Interest. Interest on the Bonds will be payable on April 1 and October 1 in each year, beginning April 1, 2024 (each an “Interest Payment Date”). Principal on the Bonds will be payable on October 1 in the amounts and in the years set forth on the inside front cover of this Official Statement.

While the Bonds are subject to the book-entry system, the principal, interest and any prepayment premium with respect to the Bonds will be paid by the Trustee to DTC for subsequent disbursement to beneficial owners of the Bonds. See “− Book-Entry Only System” below.

Interest with respect to any Bond will be payable on each Interest Payment Date to the Owner thereof as of the close of business on the Record Date, such interest to be paid by check or draft of the Trustee, mailed by first-class mail, no later than the Interest Payment Date to the Owner at such Owner’s address as it appears on the registration book maintained by the Trustee; provided however that at the written request of the Owner of at least $1,000,000 in aggregate principal amount of Outstanding Bonds filed with the Trustee prior to any Record Date, interest on such Bonds will be paid to such Owner on each succeeding Interest Payment Date (unless such request has been revoked in writing), by wire transfer in immediately available funds to an account in the United States of America designated by written request. Payments of defaulted interest will be paid by check or draft to the Owners as of a special record date to be fixed by the Trustee, notice of which special record date will be given to the Owners of the Bonds not less than 10 days prior thereto.

The principal of and premium, if any, and interest on the Bonds are payable by check when due upon surrender thereof at the Trust Office in lawful money of the United States of America.

Calculation of Interest. Each Bond will bear interest from the Interest Payment Date next preceding the date of authentication thereof, unless: (i) it is authenticated during the period from the day after the Record Date for an Interest Payment Date to and including such Interest Payment Date, in which event it will bear interest from such Interest Payment Date, or (ii) it is authenticated on or prior to the Record Date for the first Interest Payment Date, in which event it 680
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will bear interest from its dated date, provided however, that if at the time of registration of any Bond, interest with respect to such Bond is in default, such Bond will bear interest from the Interest Payment Date to which interest has been paid or made available for payment with respect to such Bond.

Notwithstanding the foregoing, if, at the time of registration of any Bond, interest with respect to such Bond is in default, such Bond will bear interest from the Interest Payment Date to which interest has been paid or made available for payment with respect to such Bond.

Transfer, Registration and Exchange
See “APPENDIX C − SUMMARY OF PRINCIPAL LEGAL DOCUMENTS” for a description of the provisions of the Indenture relating to the transfer, registration and exchange of the Bonds.

Redemption*
Optional Redemption. The Bonds maturing on or after October 1, 20___, shall be subject to redemption prior to their respective maturity dates, as a whole or in part, from prepayments of Base Rental made at the option of the City under the Sublease on any date with respect to which such prepayment have been made (which shall be on or after October 1, 20___). The Bonds called for optional redemption shall be redeemed at a redemption price equal to 100 percent of the principal amount of the Bonds to be redeemed, without premium, plus accrued interest thereon to the date of redemption.

Mandatory Sinking Fund Redemption. The Bonds maturing on October 1, 20__ and October 1, 20__ (the “Term Bonds”) shall be subject to redemption in part by lot from sinking account payments made by the Authority, at a redemption price equal to the principal amount thereof to be redeemed with accrued interest thereon to the redemption date, without premium, in the aggregate respective principal amounts and on the respective dates as set forth in the following tables; provided, however, if some but not all of the Term Bonds of a maturity have been redeemed pursuant to the optional and extraordinary redemption provisions of the Indenture, each future sinking account payment with respect to such Term Bonds will be reduced on a pro rata basis (as nearly as practicable) in integral multiples of $5,000, so that the total amount of sinking account payments with respect to such Term Bonds to be made subsequent to the optional and extraordinary redemption provisions of the Indenture shall be reduced by an amount equal to the principal amount of the Term Bonds so redeemed, all as shall be designated pursuant to written notice filed by the Authority with the Trustee:

Bonds Maturing on October 1, 20__
Redemption
Date
(October 1)
Principal
Amount
to be Redeemed
______________
* maturity
* Preliminary; subject to change.
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Bonds Maturing on October 1, 20__
Redemption
Date
(October 1)
Principal
Amount
to be Redeemed
______________
* maturity
Extraordinary Redemption from Insurance and Condemnation Proceeds. The Bonds are subject to redemption prior to their respective maturity dates, upon notice as provided below, as a whole or in part on a pro rata basis (as much as practicable) among the maturities, on any date, from amounts on deposit in the Redemption Fund pursuant the Sublease (from Net Proceeds received by the City from insurance payments or condemnation awards with respect to the Leased Property or any portion thereof under the circumstances and upon the conditions and terms prescribed in the Sublease, together with additional money, if any, transferred by the City at its discretion for such purpose). Extraordinary redemption will be made at a redemption price equal to the sum of the principal of the Bonds to be redeemed plus accrued interest thereon to the date fixed for redemption, without premium.

Selection of Bonds for Redemption. Whenever provision is made in the Indenture for the redemption of less than all the Bonds, the Trustee will select the Bonds to be redeemed from the all Outstanding Bonds or such given portion thereof not previously called for redemption, on a pro rata basis among the maturities (unless the maturity or maturities are otherwise specified in the Indenture or in writing by the Authority, and by lot within a maturity in any manner which the Trustee in its discretion deems appropriate. For purposes of such selection, all Bonds will be deemed to be comprised of separate $5,000 portions and such portions will be treated as separate Bonds, which may be separately redeemed.

Partial Redemption of Bonds. In the event only a portion of any Bond is called for redemption, then upon surrender of such Bond the Authority will execute, and the Trustee will authenticate and deliver, to the Owner thereof, at the expense of the Authority, a new Bond or Bonds of the same maturity date, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond being redeemed. A partial redemption will be valid upon payment of the amount required to be paid to the Owner, and the Authority and the Trustee will be released and discharged from all liability to the extent of such payment.

Notice of Redemption. The Authority will give written notice of its intention to redeem Bonds under the optional or extraordinary redemption provisions of the Indenture to the Trustee at least 45 days before the proposed redemption date; provided, that the Trustee may accept a shorter notice period or waive such notice requirement at the Trustee’s sole discretion. The Trustee, on behalf and at the expense of the Authority, will send by first class mail (or if the Owner of such Bonds is a depository, by such method as acceptable to such depository) notice of any redemption to (i) the respective Owners of any Bonds designated for redemption at their respective addresses appearing on the Registration Books, (ii) to the Securities Depositories and (iii) to one or more Information Services by such manner of delivery as then acceptable to such entities, at least 30 but not more than 60 days prior to the date fixed for redemption; provided, however, that neither failure to receive any such notice so sent nor any defect therein will affect the validity of the proceedings for the redemption of such Bonds or the cessation of the accrual of interest thereon.
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Such notice of redemption will state the date of the notice, the redemption date, the redemption place, the redemption price and will specify the CUSIP numbers, the Bond numbers and the maturity or maturities (in the event of redemption of all of the Bonds of such maturity or maturities in whole) of the Bonds to be redeemed, and will require that such Bonds be then surrendered at the Trust Office of the Trustee for redemption at the redemption price, giving notice also that further interest on such Bonds will not accrue from and after the redemption date.

Neither the Authority nor the Trustee will have any responsibility for any defect in the CUSIP number that appears on any Bond or in any redemption notice with respect thereto, and any such redemption notice may contain a statement to the effect that CUSIP numbers have been assigned by an independent service for convenience of reference and that neither the Authority nor the Trustee will be liable for any inaccuracy in such numbers.

Right to Rescind Optional Redemption. The Authority (upon direction by the City, at the City’s option) may rescind any optional redemption by written notice to the Trustee on or prior to the date fixed for redemption. In addition, any notice of optional redemption shall be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption for the payment in full of the Bonds then called for redemption, and such cancellation shall not constitute an Event of Default under the Indenture. The Authority, the City and the Trustee shall have no liability to the Owners or any other party related to or arising from such rescission.

Selection of Bonds for Redemption. Whenever provision is made in the Indenture for the redemption of less than all of the Bonds, the Trustee shall select the Bonds to be redeemed from all Outstanding Bonds or such given portion thereof not previously called for redemption, on a pro rata basis among the maturities (unless the maturity or maturities are otherwise specified in this Indenture or in writing by the Authority) and by lot within a maturity in any manner which the Trustee in its discretion shall deem appropriate. For purposes of such selection, all Bonds shall be deemed to be comprised of separate $5,000 portions and such portions shall be treated as separate Bonds, which may be separately redeemed.

Partial Redemption of Bonds. In the event only a portion of any Bond is called for redemption, then upon surrender of such Bond the Authority shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Bond or Bonds of the same maturity date, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond being redeemed. A partial redemption shall be valid upon payment of the amount required to be paid to the Owner, and the Authority and the Trustee shall be released and discharged from all liability to the extent of such payment.

Effect of Redemption. From and after the date fixed for redemption, if funds available for the payment of the principal of and interest (and premium, if any) on the Bonds so called for redemption have been duly provided, such Bonds so called will cease to be entitled to any benefit under the Indenture other than the right to receive payment of the redemption price, and no interest will accrue thereon from and after the redemption date. All Bonds redeemed pursuant to the Indenture will be canceled by the Trustee. All moneys held by or on behalf of the Trustee for the payment of principal of or interest or premium on Bonds, whether at redemption or maturity, will be held in trust for the account of the Owners thereof and the Trustee will not be required to pay Owners any interest on, or be liable to Owners for any interest earned on, moneys so held. 683
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Book-Entry Only System
The Bonds will be issued as fully registered bonds in book-entry only form, registered in the name of Cede & Co. as nominee of DTC, and will be available to ultimate purchasers in the denomination of $5,000 or any integral multiple of $5,000, under the book-entry system maintained by DTC. While the Bonds are subject to the book-entry system, the principal, interest and any redemption premium with respect to a Bond will be paid by the Trustee to DTC, which in turn is obligated to remit such payment to its DTC Participants for subsequent disbursement to Beneficial Owners of the Bonds. Purchasers of the Bonds will not receive certificates representing their interests therein, which will be held at DTC.

See “APPENDIX F – DTC AND THE BOOK-ENTRY ONLY SYSTEM” for further information regarding DTC and the book-entry system.

SECURITY FOR THE BONDS
The principal of and interest on the Bonds are not a debt of the Authority or the City, nor a legal or equitable pledge, charge, lien or encumbrance, upon any of their respective property, or upon any of their income, receipts, or revenues except the Revenues and other amounts pledged under the Indenture.

This section provides summaries of the security for the Bonds and certain provisions of the Indenture, the Sublease and the Lease. See “APPENDIX C – Summary of Principal Legal Documents” for a more complete summary of the Indenture, the Sublease, the Lease and the Assignment Agreement. Capitalized terms used but not defined in this section have the meanings given in APPENDIX C.

Revenues; Pledge of Revenues
Pledge of Revenues and Other Amounts. Under the Indenture, subject to the lien in favor of the trustee for certain fees and costs, the Bonds will be secured by a first lien on and pledge (which shall be effected in the manner and to the extent provided in the Indenture) of all of the Revenues and a pledge of all the moneys in the Lease Revenue Fund, including all amounts derived from the investments of such moneys.

The Bonds will be equally secured by a pledge, charge and lien upon the Revenues and such moneys without priority for number, date of the Bonds, date of execution or date of delivery; and the payment of the interest on and principal of the Bonds and any premiums upon the redemption of any portion thereof will be and are secured by an exclusive pledge, charge and lien upon the Revenues and such moneys.

So long as any of the Bonds remain Outstanding, the Revenues will not be used for any other purpose; except that out of the Revenues and such moneys there may be apportioned such sums in the Lease Revenue Fund, for such purposes, as are expressly permitted under the Indenture.

Definition of Revenues. “Revenues” are defined in the Indenture as (a) all Base Rental Payments payable by the City pursuant to the Sublease (including prepayments); (b) any proceeds of Bonds originally deposited with the Trustee and held by the Trustee in the Lease Revenue Fund and the accounts thereof; (c) investment income with respect to any moneys held 684
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by the Trustee in the Lease Revenue Fund and the accounts thereof (other than amounts payable to the United States of America pursuant to tax-exemption law requirements); and (d) any insurance proceeds or condemnation awards received by or payable to the Trustee with respect to the Leased Properties, including rental interruption insurance.

Revenues Held in Trust. Except as otherwise provided in the provisions of the Indenture concerning the investment of moneys in funds, all Revenues to which the Authority may at any time be entitled will be paid directly to the Trustee and all of the Revenues collected or received by the Authority will be deemed to be held in trust and to have been collected or received by the Authority as the agent of the Trustee, and if received by the Authority at any time will be deposited by the Authority with the Trustee.

Allocation of Revenues by Trustee; Application of Funds Transfers from the Lease Revenue Fund. All Base Rental Payments will be deposited by the Trustee in a special fund designated as the Lease Revenue Fund (the “Lease Revenue Fund”), which the Trustee will establish, maintain and hold in trust under the Indenture.

Under the Indenture, on or before each Interest Payment Date, the Trustee will transfer from the Lease Revenue Fund and deposit into the following respective accounts, each of which the Trustee will establish and maintain within the Lease Revenue Fund, and the moneys in each of which will be disbursed and applied only as authorized in the Indenture. Revenues will be deposited in the following order of priority, the requirements of each such account (including the making up of any deficiencies in any such account resulting from lack of Revenues sufficient to make any earlier required deposit) at the time of deposit to be satisfied before any transfer is made to any fund subsequent in priority:

Interest Account. On or before each Interest Payment Date, the Trustee will deposit in the Interest Account an amount required to cause the aggregate amount on deposit in the Interest Account to equal the amount of interest becoming due and payable on such Interest Payment Date on all Outstanding Bonds. No deposit need be made into the Interest Account if the amount contained therein is at least equal to the interest becoming due and payable upon all Outstanding Bonds on each succeeding Interest Payment Date within the then current Bond Year.

All moneys in the Interest Account will be used and withdrawn by the Trustee solely for the purpose of paying the interest on the Bonds as it becomes due and payable (including accrued interest on any Bonds redeemed prior to maturity pursuant to the Indenture).

Principal Account. On or before each Interest Payment Date, the Trustee will deposit in the Principal Account an amount required to cause the aggregate amount on deposit in the Principal Account to equal the principal amount of the Bonds maturing or required to be redeemed through mandatory sinking account redemption on such Interest Payment Date. All moneys in the Principal Account will be used and withdrawn by the Trustee solely for the purpose of paying the principal of the Bonds.

Surplus. On or promptly after each Interest Payment Date, Trustee will determine the amount, if any, remaining in the Lease Revenue Fund after making the deposits required by the paragraphs above and the transfers of investment earnings pursuant to 685
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the Indenture, and shall notify the City of the amount so determined. The Trustee will apply such amount as a credit against the next following Base Rental Payment; provided however, if directed in a Request of the City, the Trustee will, with respect to all or any portion of such amount, pay, or set an amount aside for the payment of, any rebate requirement in accordance with a computation made by the City pursuant to the Code, or if no such rebate requirement is then due, release to the City for use for any lawful purpose.

Base Rental
Requirement to Make Base Rental. Under the Sublease, the City agrees to pay to the Authority, its successors or assigns, as rental for the use and possession of the Leased Property (subject to the provisions of the Sublease concerning the rental interruption insurance and rental abatement), the amounts at the times specified in and in accordance with the Base Rental Payment Schedule set forth in the Sublease, less any amount credited against Base Rental Payments pursuant to the Indenture.

Base Rental Payments will be payable in arrears 5 days before each Interest Payment Date during the term of the Sublease, and will be made in consideration for the City’s use and possession of the Leased Property for the six month period preceding the date of such payment.

The Authority has assigned its right to receive Base Rental Payments to the Trustee.

Payment in Installments. Each installment of Base Rental payable under the Sublease and each installment of Additional Rental (as described under the heading “− Additional Rental”) payable under the Sublease will be paid in lawful money of the United States of America to the order of the Trustee at the corporate trust office of the Trustee in Los Angeles, California, or such other place as the Trustee designates.

Offsets and Credits. Notwithstanding any dispute between the City and the Authority, the City is obligated to make all rental payments when due under the Sublease, without deduction or offset of any kind and will not withhold any rental payments pending the final resolution of such dispute. In the event of a determination that the City was not liable for said rental payments or any portion thereof, the payments or excess of payments, as the case may be, at the option of the City, will be credited against subsequent rental payments due under the Sublease or be refunded at the time of such determination.

Additional Rental
Under the Sublease, the City will also pay as Additional Rental, in addition to the Base Rental, to the Authority or to the Trustee, such amounts in each year as will be required for the payment of all costs and expenses (not otherwise paid for or provided for out of the proceeds of sale of the Bonds) incurred by the Authority or the Trustee in connection with the execution, performance or enforcement of the Sublease or the assignment thereof, the Indenture, or the Authority’s or the Trustee’s respective interests in the Leased Property, including, but not limited to:
(i) All fees, costs and expenses.
(ii) All administrative costs of the Authority relating to the Leased Property (including, without limiting the generality of the foregoing, salaries and wages of employees, overhead, insurance premiums, taxes and assessments (if 686
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any), expenses, compensation and indemnification of the Trustee payable by the Authority under the Indenture).
(iii) Fees of auditors, accountants, attorneys or engineers, and all other reasonable and necessary administrative costs of the Authority or charges required to be paid by it to comply with the terms of the Bonds or of the Indenture.

Fair Rental Value
The payments of the Base Rental and Additional Rental for each rental payment period during the term of the Sublease will constitute the total rental for said rental payment period, and will be paid by the City in each rental payment period for and in consideration of the right of the use and possession of, and the continued quiet use and enjoyment of, the Leased Property during each such period for which said rental is to be paid.

The City and the Authority have agreed and determined that such total rental does not exceed the fair rental value of the Leased Property for each such period. In making such determination, consideration has been given to other obligations of the parties under the Sublease, the uses and purposes which may be served by the Leased Property and the benefits therefrom which will accrue to the City and the general public.

Notwithstanding any other provision of the Sublease, if rental payments are abated for any period of time, the resulting Base Rental in any year during which such interference continues will not exceed the fair rental value of the portions of the Leased Property as to which such damage, destruction, taking or impairment do not substantially interfere with the City’s use and right of possession. See “– Abatement” below.

Limited Obligation
The Bonds are special obligations of the Authority, payable solely from and secured by a pledge of the Revenues as specified herein and in the Indenture. Neither the payment of the principal of the Bonds, nor any interest thereon, constitutes a debt, liability or obligation of the City, Authority or State of California. The obligation of the City to pay the Base Rental or Additional Rental does not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction.

Source of Payments; Covenant to Appropriate Funds for Base Rental Under the Sublease, the City covenants to take such action as may be necessary to include all Base Rental and Additional Rental payments due under the Sublease in its annual budget and to make necessary annual appropriations for all such rental payments. If the City’s adopted annual budget for any fiscal year fails to include sufficient appropriation for the scheduled Base Rental Payments and Additional Rental payments for the such fiscal year, the City shall give written notice to the Authority and the Trustee of such failure as soon as practical, but in any event within ten Business Days of the adoption of such annual budget.

Such covenants will be deemed to be and will be construed to be duties imposed by law and it will be the duty of each and every public official of the City to take such action and do such things as are required by law in the performance of the official duty of such officials to enable the City to carry out and perform the covenants and agreements agreed to be carried out and 687
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performed by the City in the Sublease; provided, the obligation of the City to make Base Rental or Additional Rental payments does not constitute an obligation of the City for which the City is obligated to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation.

Abatement
General. The obligation of the City to pay Base Rental and Additional Rental will be abated during any period in which, by reason of any damage, destruction, condemnation or impairment of leasehold interest, there is substantial interference with the use and occupancy of the Leased Property or any portion thereof by the City.

Except as set forth therein, in the event of any damage, destruction of condemnation, the Sublease will continue in full force and effect and the City waives any right to terminate the Sublease by virtue of such damage, destruction or condemnation. Under the Sublease, the City waives the benefits of California Civil Code Sections 1932(1), 1932(2), 1933(4), 1941, and 1942.

The abatement will be in an amount agreed upon by the City and the Authority such that the resulting Base Rental in any year during which such interference continues does not exceed the fair rental value of the portions of the Leased Property as to which such damage, destruction, taking or impairment do not substantially interfere with the City’s use and right of possession.

Such abatement will continue for the period commencing with the date of such interference and ending with the restoration of the relevant Leased Property to tenantable condition.

Proceeds of Rental Interruption Insurance. Under the Sublease, the City acknowledges and agrees that during any period of abatement with respect to all or any part of the Leased Property, proceeds of rental interruption insurance maintained under the Sublease will be used to pay Annual Debt Service on the Bonds to the extent necessary to restore the balance therein to the Reserve Requirement, and any proceeds of such insurance not so used shall be applied as provided in the Indenture to the extent required to pay administrative costs of the Authority in connection with the Leased Property. See “– Covenants to Maintain Insurance − Rental Interruption Insurance.”
Additional Obligations
Under the Indenture, the Authority may from time to time issue one or more series of Additional Bonds payable from and secured by Revenues on parity with all other Outstanding Bonds. In addition, the City is permitted to enter into other obligations which constitute additional charges against its revenues without the consent of Owners of the Bonds.

Additional Bonds may be issued pursuant to a Supplemental Indenture, which shall specify: (i) the maturity date or dates of such Additional Bonds, which shall be October 1 in any given year; (ii) the interest payment dates, which shall be April 1 and October 1; (iii) the terms, if any, for call and redemption of such Additional Bonds prior to maturity; and (iv) the interest rate or rates on such Additional Bonds and any other matters deemed appropriate or necessary and not inconsistent with the provisions of the Indenture.

In addition, there shall be provided a Certificate of the Authority: (i) certifying that the Authority is in compliance in all material respects with all agreement and covenants contained in the Indenture and that no Event of Default has occurred or is continuing; (ii) stating that the Authority and the City have entered into an amendment to the Sublease pursuant to which the 688
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City is obligated to make Base Rental Payments at times and in amounts sufficient to provide for payment of the principal of and interest on the Bonds (including such Additional Bonds) which will be Outstanding following the sale and delivery of such Additional Bonds; and (iii) containing such additional statements as may be reasonably necessary to show compliance with the requirements of the Indenture.

Default; Remedies
City Default and Remedies. The City will be deemed to be in default under the Sublease if the following occurs: default in the observance or performance of any agreement, condition, covenant or term contained in the Sublease required to be observed or performed by the City (including, without limitation, the payment of any Base Rental or Additional Rental due under the Sublease; provided that non-payment of Base Rental or Additional Rental during any period of abatement under the Sublease will not be deemed a default), subject to the provisions of the Sublease.

The Trustee, as assignee of the Authority, may at any time after default by the City (with or without notice and demand and without limiting any other rights or remedies the Authority may have), recover rent and other monetary charges as they become due under the Sublease without terminating the City’s right to possession of the Leased Property (regardless of whether or not the City has abandoned the Leased Property).

Furthermore, upon the occurrence of such a default by the City, the Trustee, as assignee of the Authority, will have the right, and the City irrevocably appoints the Authority as its agent and attorney-in-fact for such purpose, to attempt to relet the Leased Property at such rent, upon such conditions and for such term, and to do all other acts to maintain or preserve the Leased Property, including the removal of persons or property therefrom or taking possession thereof, as the Authority deems desirable or necessary. Under the Sublease, the City waives any and all claims for any damages that may result to the Leased Property upon any action taken by the Authority in event of default.

No such action taken by the Trustee, as assignee of the Authority, upon the City’s default under the Sublease (as described above) will be deemed to terminate the Lease or the Sublease and the City will continue to remain liable for any deficiency that may arise out of such reletting, taking into account expenses incurred by the Authority due to such reletting, payable at the same time and manner as provided for Base Rental in the Sublease.

Authority Default and Remedies. The Authority will be deemed to be in default under the Indenture if the following occurs:
(i) Default in the due and punctual payment of the principal of or premium on any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, or by proceedings for redemption.
(ii) Default in the due and punctual payment of any installment of interest on any Bond when and as such interest installment shall become due and payable. (ii) Upon the happening of any of certain other events specified in the Indenture.

The Trustee under the Indenture, and as assignee of the Authority under the Sublease and the Indenture, may exercise any and all remedies available pursuant to law (other than those 689
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specifically waived in the Indenture, the Lease, and the Sublease) upon the occurrence of any default and will have the right to do any of the following:
(i) by mandamus or other action or proceeding or suit at law or in equity to enforce its rights against the Authority or any member, officer or employee thereof, in order to compel the Authority or any such member, officer or employee to perform and carry out its or his or her duties under law and the agreements and covenants required to be performed by it or him or her contained in the Indenture;
(ii) by suit in equity to enjoin any acts or things which are unlawful or violate the rights of the Trustee; or
(iii) by suit in equity upon the happening of an Event of Default to require the Authority and its members, officers and employees to account as the trustee of an express trust.

Covenants to Maintain Insurance
Title Insurance. Under the Sublease, the City is required to obtain one or more California Land Title Association insurance policies (or, at the City’s sole discretion, American Land Title Association insurance policies) at the time of and dated as of the Closing Date in an aggregate amount not less than the aggregate principal amount of the Bonds, payable to the Trustee, insuring the respective interests of the City and the Authority in the Leased Property, and insuring the validity of the Sublease, subject only to Permitted Encumbrances, naming the Trustee as an insured thereunder, issued by a title insurance company qualified to do business in the State of California and acceptable to the Trustee.

Fire and Extended Coverage Insurance. Under the Sublease, the City is required to maintain or cause to be maintained fire, lightning and extended coverage insurance on the Leased Property in an amount equal to:
(i) 100 percent of the then current replacement cost of the Leased Property, excluding the then fair market value of the land as unimproved; or (ii) the principal amount of all outstanding Bonds, whichever is less (except that such insurance may be subject to a deductible clause not to exceed 10 percent of the amount of such policy).

Earthquake insurance will be maintained on the Leased Property only if available on the open market from reputable insurance companies at a reasonable cost. The City does not currently maintain earthquake insurance on the Leased Property and does not expect to purchase earthquake insurance at this time.

The extended coverage endorsement will, as nearly as practicable, cover loss or damage by explosion, windstorm, riot, aircraft, vehicle damage, smoke, vandalism, malicious mischief, dumping or other deposit of any pollutant or other debris and such other hazards as are normally covered by such endorsement. Each such policy of insurance will be in form reasonably satisfactory to the Authority, and will contain a clause naming the Trustee as an additional insured and making all losses payable to the Trustee, and all proceeds thereof shall be paid over to the party contractually responsible for making repairs of casualty damage. 690
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In the event of any damage to or destruction of the Leased Property caused by the perils covered by such insurance, the proceeds of such insurance will be utilized to repair, reconstruct or replace the Leased Property to the end that the project will be restored to at least the same condition that it was in prior to such damage or destruction. Any balance of such proceeds not required for such repair, reconstruction or replacement will be transferred to the Authority and treated as Revenues and applied in the manner provided in the Indenture.

Liability Insurance. Under the Sublease, the City is required to maintain or cause to be maintained public liability insurance with limits of not less than $3,000,000 for one person and $5,000,000 for more than one person involved in one accident to protect the Authority and the Trustee from all direct or contingent loss or liability for damages for bodily injury or death occasioned by reason of the construction, condition or operation of the Leased Property. The City will also maintain or cause to be maintained insurance against liability for property damage resulting from any casualty attributable to the operation of the project in an amount not less than $1,000,000 for each accident. The public liability insurance and property damage insurance may be subject to a deductible clause for any one accident of not to exceed $250,000. The insurance coverage required by the Sublease may be effected by blanket policies covering the Leased Property issued to the party contractually responsible for the maintenance and operation of the project and such insurance policy or policies shall name the Trustee as an additional insured.

Rental Interruption Insurance. The City is required under the Sublease to maintain or cause to be maintained or use and occupancy insurance to cover loss, total or partial, of the use of the Leased Property as a result of any of the hazards covered by the insurance required by the Fire and Extended Coverage Insurance section above, in an amount not less than the total rent payable by the City under this Sublease for a period of any future 24 months.

Any such insurance policy will be in form satisfactory to the Authority and will contain a clause naming the Trustee as an additional insured and making any loss thereunder payable to the Trustee as its interests may appear. Any proceeds of such insurance will be used by the Trustee to pay Annual Debt Service on the Outstanding Bonds for the period during which the payment of rental under the Sublease is abated, and any proceeds of such insurance not so used will be applied as provided in the Indenture to the extent required to pay administrative costs of the Authority in connection with the Leased Property.

Self-Insurance. As an alternative to providing the insurance required by the “Liability Insurance” description above, the City may provide or cause to be provided a self-insurance method or plan of protection if and to the extent such self-insurance method or plan of protection shall afford reasonable protection to the City and the Authority, and their directors, officers, agents and employees and the Trustee, its directors, officers, agents and employees in light of all circumstances, giving consideration to cost, availability and similar plans or methods of protection adopted by public entities in the State of California other than the City; provided that the obligation of the Authority or City to make payments under such self-insurance shall be limited to money in a designated fund balance established by the Authority or City and that the Authority or City shall not be obligated to replenish such designated fund balance from the General Fund or be otherwise obligated to make payments except from such designated fund balance. After the Commencement Date, before any substitute method or plan may be provided by the City, there shall be filed with the Trustee a certificate of an actuary, independent insurance consultant or other qualified person, stating that, in the opinion of the signer, the substitute method or plan of protection is in accordance with the requirements of this Section and, when effective, would afford adequate protection to the City and the Authority, and their directors, officers, agents and employees and the Trustee and its directors, officers, agents and employees against loss and 691
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damage from the hazards and risks covered thereby; provided, however, that in the event the City provides a self-insurance method or plan of protection for the insurance required by the “Rental Interruption Insurance” description above, the designated fund balance established by the City shall be funded in an amount at least equal to the greatest of the aggregate Base Rental payable by the City under the Sublease for a period of any future 24 months.

Moreover, as an alternative to providing the insurance required by the “Rental Interruption Insurance” description above, the City may provide a self-insurance method or plan of protection through the California Insurance Pool Authority (or another insurance risk sharing pool joint powers authority formed in the State) or any successor entity as the City may reasonably determine.

Damage, Destruction and Condemnation; Net Proceeds
If the whole, or any portion, of the Leased Property is destroyed (in whole or in part) or is damaged by fire of other casualty or taken by eminent domain proceedings (or sold to a government threatening to exercise the power of eminent domain), or the leasehold title in all or a portion of the Leased Property is materially impaired by reason of a defect in title, then (a) the City, but only to the extent permitted by law, shall substitute other property for the portion of the Leased Property that has been destroyed, or taken, or affected by the defective title in accordance with the Sublease; or
(b) the City shall require the Net Proceeds of any insurance payment (other than the Net Proceeds of rental interruption insurance which shall be applied pursuant to the Sublease) or any condemnation award to be held by the Trustee in the Insurance and Condemnation Fund established under the Indenture to be applied and disbursed by the Trustee as follows:
(i) If less than all of the Leased Property shall have been so destroyed or taken or affected by defective title and the remainder is usable, then the Sublease shall continue in full force and effect as to such remainder and (A) if the portion taken or destroyed is replaced by one or more properties of equal or greater fair market value (as demonstrated by an MAI fair market appraisal), the Trustee upon written direction of the City shall disburse such proceeds to the party that incurred the expense of making such replacement and there shall not be any abatement of the Base Rental under this Sublease; or (B) failing the making of such replacement, there shall be a partial abatement of the Base Rental under the Sublease and the Trustee shall apply such Net Proceeds, together with any other money then available to it for such purpose, to the Redemption Fund under the Indenture for the redemption of outstanding Bonds. (ii) If less than all of the Leased Property shall have been so destroyed or taken or affected by defective title and the remainder is not usable, or if all of the Leased Property shall have been so destroyed or taken or affected by the defective title, then the term of the Sublease shall cease as of the day that possession shall be so taken; and the Trustee shall apply such Net Proceeds, together with any other money then available to it for such purpose, to the Redemption Fund under the Indenture for the redemption of outstanding Bonds.

See “THE BONDS – Redemption – Extraordinary Redemption.” 692
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THE AUTHORITY
The Authority is a joint powers authority duly organized and existing under and pursuant to that certain Joint Exercise of Powers Agreement, dated January 3, 1989, between the City and the Former Redevelopment Agency, as amended by Amendment No. 1 to Joint Exercise of Powers Agreement, dated as of March 1, 2022, by and between the City, the Successor Agency and the Parking Authority. The City Council serves as the Governing Board of the Authority.

Pursuant to Amendment No. 1, the Parking Authority was added as a member to the Authority and the Successor Agency withdrew from the Authority. The Authority is a separate legal entity and is authorized pursuant to Article 4 of the Act to issue bonds to provide financing for public capital improvements.

THE CITY
General
The City is located at the South Shore of Lake Tahoe, the country’s largest alpine lake, in El Dorado County, California (the “County”), and adjacent to Stateline/Zephyr Cove, Nevada, in the Sierra Nevada Mountains. The population was 20,548 as of January 1, 2023. According to the United States Census Bureau, the City has a total area of 16.5 square miles, of which 10.1 square miles is land and 6.4 square miles is water. Elevation is 6,260 ft. As the only incorporated community in the Lake Tahoe Basin, the City takes great pride in being a central hub of one of the country’s most popular tourism destinations. The east end of the City, on the CaliforniaNevada State line, is mainly geared towards tourism, with shops, restaurants, hotels, and the Heavenly Ski Resort, with the Nevada casinos just across the State line. The western end of town is mainly residential.

For additional background, and certain demographic and economic information regarding the City and the County, see APPENDIX B. Historical information set forth in this Official Statement, including APPENDIX B hereto, is not intended to be predictive of future results.

City Government
The City was incorporated on November 30, 1965 under the general laws of the State of California. The City provides a wide range of services, including police and fire, street maintenance, airport, planning and building and parks and recreation.

The City has a Council-Manager form of government made up of five council members elected to four-year, overlapping terms. The Mayor and Council appoint a City Manager who is responsible for daily administration of City affairs, including preparation and submission of the annual budget, which is done under the direction of the Mayor and the City Council for the Mayor’s submission to the City Council. The City Treasurer, an elected position, invests public funds in a prudent manner that provides maximum security while meeting daily cash flow demands and conforming to all statutes governing the investment of public funds.

The City Attorney, directly appointed by the City Council, and the assistant city attorney are responsible for administration of all legal affairs of the City, including the City Council, the various city commissions, as well as all city departments and officers. 693
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Member Position Term Expires
Cristi Creegan Mayor November 2024
Cody Bass Mayor Pro Tem November 2026
John Friedrich Council Member November 2024
Scott Robbins Council Member November 2026
Tamara Wallace Council Member November 2026
Following are short biographies of the City Manager and Finance Director:

Joe Irvin, City Manager. Joe Irvin is the City Manager for the City. Before joining the City in May 2020, he served as Assistant City Manager for Healdsburg, California, since August 2018.

He was with the City of Sequim, Washington from 2014-2018, where he was first Special Projects Manager, then Assistant to the City Manager, then Assistant City Manager. He also served the City of Sequim from 2005-2011 as a City Planner. Mr. Irvin was also with the City of Marco Island, Florida, from 2011-2014 where he was Zoning Administrator.

Mr. Irvin is a member of the International City/County Managers Association (ICMA) and a certified planner (AICP) from the American Planning Association. He has a bachelor’s degree in Environmental Science from California State University Channel Islands and a master’s degree in Public Administration from The Evergreen State College.

Olga Tikhomirova, Finance Director. Olga Tikhomirova has worked for the City since March 2002 in multiple finance and leadership roles, including Accountant, Financial Services Supervisor, and Financial Services Manager. Ms. Tikhomirova was appointed as Finance Director in June 2021. She leads the City’s finance and information technology teams and develops and oversees the City’s $110 million annual budget in collaboration with various City departments. For the last 15 years, during Ms. Tikhomirova’s tenure in various leadership positions, the City has been receiving yearly a Certificate of Achievement for Excellence in Financial Reporting and a Distinguished Budget Presentation Award from the Government Finance Officers Association (GFOA).

Ms. Tikhomirova is a Certified Public Accountant (CPA), has a master’s degree in economics with a major in finance and credit from the Finance Academy of Moscow, Russia. She has been a part of the South Lake Tahoe community for the past 26 years. Prior to joining the City, she worked for private accounting firms and banks in the United States and abroad. 694
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Labor Relations
For Fiscal Year 2021-22, the City employed approximately 203 full-time equivalent employees. There are six employee bargaining unions as shown below. In addition, the City employs approximately 17 management employees who are not represented by a union or other collective bargaining agent. The City is currently in active negotiations with all its bargaining unions.

Labor Organization
No. of
Employees
Current Contract
Expiration Date
Police Employee Association 20 September 30, 2023
Police Officers Association 32 September 30, 2023
Police Supervisors Association 13 September 30, 2023
General and Public Works 69 September 30, 2023
Admin & Confidential Employees 18 September 30, 2023
Firefighter’s Association 34 September 30, 2023

CITY FINANCIAL INFORMATION
Accounting and Financial Reporting
The City maintains its accounting records in accordance with Generally Accepted Accounting Principles (“GAAP”) and the standards established by the Governmental Accounting Standards Board (“GASB”).

The Governmental Accounting Standards Board published its Statement No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments, on June 30, 1999 (“GASB Statement No. 34”). GASB Statement No. 34 provides guidelines to auditors, state and local governments and special purpose governments such as school districts and public utilities, on new requirements for financial reporting for all governmental agencies in the United States. Generally, the basic financial statements and required supplementary information should include (i) Management’s Discussion and Analysis; (ii) government-wide financial statements prepared using the economic measurement focus and the accrual basis of accounting and fund financial statements prepared using both the current financial resources measurement focus and the modified accrual method of accounting (governmental funds) and funds using the economic measurement focus and the accrual basis of accounting (proprietary funds) and (iii) required supplementary information. The City’s financial statements are prepared in conformance with the requirements of GASB Statement No. 34.

South Lake Tahoe City CouncilAugust 8, 2023

South Lake Tahoe City Council
August 8, 2023