D
FA: Each highlighted and bracketed area will require action on your part. When in d oubt, contact OCC.
D
elete logos that are n/a.]
D
RAFT D
ATED: 4/22/2025
C
LEAN WATER
C
ITY OF SUNNYVALE
A
ND
C
ALIFORNIA STATE WATER RESOURCES CONTROL BOARD
C
ONSTRUCTION
INS
TALLMENT SALE AGREEMENT
P
ROJECT NO. 8760-110
E
XISTING PLANT REHABILITATION PROJECT
A
GREEMENT NO. [ ]
P
ROJECT FUNDING AMOUNT: $
E
STIMATED REASONABLE PROJECT COST: $
E
LIGIBLE WORK START DATE: ______________
E
LIGIBLE CONSTRUCTION START DATE: ______________
C
OMPLETION OF C
ONSTRUCTION DATE: ______________
F
INAL R
EIMBURSEMENT REQUEST DATE: _____________
F
INAL PAYMENT DATE: _____________
R
ECORDS RETENTION END DATE: _____________
Attachment 2
D
FA: Each highlighted and bracketed area will require action on your part. When in d oubt, contact OCC.
D
elete logos that are n/a.]
Attachment 2
T
HIS PAGE INTENTIONALLY LEFT BLANK
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age i o
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i
T
ABLE OF CONTENTS
A
GREEMENT ................................................................................................................................................ 1
1. A
UTHORITY. ...................................................................................................................................... 1
2. INT
ENTION. ........................................................................................................................................ 1
3. A
GREEMENT, TERM, DOCUMENTS INCORPORATED BY REFERENCE. ................................... 1
4. P
ARTY CONTACTS ........................................................................................................................... 2
5. D
EFINITIONS. .................................................................................................................................... 3 E
XHIBIT A – S
COPE OF WORK ................................................................................................................. 10 A
.1. P
ROJECT DESCRIPTION, USEFUL LIFE, AND SCOPE OF WORK. ........................................ 10 A
.2. S
TANDARD PROJECT REQUIREMENTS. ..................................................................................... 10 A
.2.1 A
cknowledgements. ................................................................................................................................. 10 A
.2.2 R
eports ..................................................................................................................................................... 10 A
.2.2.1 P
rogress Reports............................................................................................................................... 10 A
.2.2.2 P
roject occCompletion Report. ........................................................................................................ 10 A
.2.2.3 A
s Needed Reports. .......................................................................................................................... 11 A
.2.2.4 D
BE Good Faith Efforts and Reports for SRF Projects. .................................................................. 11 A
.2.3 S
ignage. .................................................................................................................................................... 11 A
.2.4 C
ommencement of Operations. ................................................................................................................ 12 A
.3 D
ATES & D
ELIVERABLES............................................................................................................... 12 A
.4 S
CHEDULE. ...................................................................................................................................... 12 E
XHIBIT B – F
UNDING TERMS ................................................................................................................. 13 B
.1. F
UNDING AMOUNTS AND REIMBURSEMENTS ....................................................................... 13 B
.1.1 F
unding Contingency and Other Sources. ............................................................................................... 13 B
.1.2 E
stimated Reasonable Cost. ..................................................................................................................... 13 B
.1.3 P
roject Funding Amount. ......................................................................................................................... 13 B
.1.4 [
Reserved]. ............................................................................................................................................... 13 B
. 1.5 B
udget Costs. ........................................................................................................................................... 13 B
.1.6 C
ontingent Disbursement. ........................................................................................................................ 13 B
.1.7 R
eimbursement Procedure. ...................................................................................................................... 14 B
.1.8 W
ithholding of Disbursements. ............................................................................................................... 15 B
.1.9 F
raud and Misuse of Public Funds; Enforcement. ................................................................................... 16 B
.2 R
ECIPIENT’S PAYMENT OBLIGATION, PLEDGE, AND RESERVE ............................................. 16 B
.2.1 P
roject Costs............................................................................................................................................. 16 B
.2.2 E
stimated Principal Payment Due. ........................................................................................................... 16 B
.2.3 I
nterest Rate and In-L
ieu of Interest Charges. ......................................................................................... 16 B
.2.4 [
Reserved]. ............................................................................................................................................... 17 B
.2.5 O
bligation Absolute. ................................................................................................................................ 17 B
.2.6 P
ayment Timing. ...................................................................................................................................... 17 B
.2.7 P
ledged Revenues. ................................................................................................................................... 18 B
.2.7.1 E
stablishment of Enterprise Fund and Reserve Fund. ......................................................................... 18 Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age ii o
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ii
B
.2.7.2 P
ledge of Net Revenues, Enterprise Fund, and Reserve Fund. ............................................................ 18 B
.2.7.3 A
pplication and Purpose of the Enterprise Fund. ................................................................................ 18 B
.2.8 N
o Prepayment. ........................................................................................................................................ 18 B
.2.9 R
eserve Fund. ........................................................................................................................................... 18 B
.3 R
ATES, FEES AND CHARGES. ...................................................................................................... 18 B
.4 A
DDITIONAL DEBT. ......................................................................................................................... 19 B
.5 N
O LIENS. ........................................................................................................................................ 19 E
XHIBIT C – G
ENERAL & PROGRAMMATIC TERMS & CONDITIONS ................................................... 20 C
.1 R
EPRESENTATIONS & WARRANTIES. ..................................................................................... 20 C
.1.1 A
pplication and General Recipient Commitments. ................................................................................. 20 C
.1.2 A
uthorization and Validity. ...................................................................................................................... 20 C
.1.3 N
o Violations. .......................................................................................................................................... 20 C
.1.4 N
o Litigation. ........................................................................................................................................... 20 C
.1.5 P
roperty Rights......................................................................................................................................... 20 C
.1.6 S
olvency and Insurance............................................................................................................................ 21 C
.1.7 L
egal Status and Eligibility. ..................................................................................................................... 21 C
.1.8 F
inancial Statements and Continuing Disclosure. ................................................................................... 21 C
.1.9 S
ystem Obligations .................................................................................................................................. 21 C
.1.10 N
o Other Material Obligations................................................................................................................. 21 C
.1.11 C
ompliance with State Water Board Funding Agreements. .................................................................... 21 C
.2 D
EFAULTS AND REMEDIES ....................................................................................................... 21 C
.2.1 R
eturn of Funds; Acceleration; and Additional Payments. ...................................................................... 21 C
.2.2 [
Reserved]. ............................................................................................................................................... 22 C
.2.3 A
dministrative remedies. ......................................................................................................................... 22 C
.2.4 J
udicial remedies. ..................................................................................................................................... 22 C
.2.5 T
ermination. ............................................................................................................................................. 22 C
.2.6 D
amages for Breach of Tax-E
xempt Status. ............................................................................................ 22 C
.2.7 D
amages for Breach of Federal Conditions. ............................................................................................ 23 C
.2.8 R
emedies and Limitations. ....................................................................................................................... 23 C
.2.9 N
on-W
aiver. ............................................................................................................................................. 23 C
.2.10 S
tatus Quo. ............................................................................................................................................... 23 C
.3 STANDARD CONDITIONS ................................................................................................................... 23 C
.3.1 A
ccess, Inspection, and Public Records. .................................................................................................. 23 C
.3.2 A
ccounting and Auditing Standards; Financial Management Systems; Records Retention. .................. 23 C
.3.3 A
mendment. ............................................................................................................................................. 25 C
.3.4 A
ssignability. ........................................................................................................................................... 25 C
.3.5 A
udit. ........................................................................................................................................................ 25 C
.3.6 B
onding. ................................................................................................................................................... 25 C
.3.7 C
ompetitive Bidding ................................................................................................................................ 25 C
.3.8 C
ompliance with Applicable Laws, Rules, and Requirements. ............................................................... 25 C
.3.9 C
omputer Software. ................................................................................................................................. 26 C
.3.10 C
onflict of Interest. .................................................................................................................................. 26 C
.3.11 C
ontinuous Use of Project; No Lease, Sale, Transfer of Ownership, or Disposal of Project. ................. 26 C
.3.12 D
ata Management. ................................................................................................................................... 26 C
.3.13 D
isputes. ................................................................................................................................................... 26 C
.3.14 [
Reserved]. ............................................................................................................................................... 26 C
.3.15 E
nvironmental Clearance. ........................................................................................................................ 26 C
.3.16 G
overning Law......................................................................................................................................... 27 C
.3.17 I
ncome Restrictions. ................................................................................................................................. 27 C
.3.18 I
ndemnification and State Reviews. ......................................................................................................... 27 Attachment 2
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ame of Recipient
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greement No.: XX-X
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roject No.: X-XX-X
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age iii o
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C
.3.19 I
ndependent Actor. ................................................................................................................................... 28 C
.3.20 I
ntegration. ............................................................................................................................................... 28 C
.3.21 L
everaging Covenants. ............................................................................................................................. 28 C
.3.22 N
o Discrimination. ................................................................................................................................... 28 C
.3.23 N
o Third Party Rights. ............................................................................................................................. 29 C
.3.24 N
o Obligation of the State........................................................................................................................ 29 C.3.25 N
otice. ...................................................................................................................................................... 29 C
.3.26 O
peration and Maintenance; Insurance. ................................................................................................... 31 C
.3.27 P
ermits, Subcontracting, and Remedies. .................................................................................................. 32 C
.3.28 P
rofessionals. ........................................................................................................................................... 32 C
.3.29 P
revailing Wages. .................................................................................................................................... 33 C
.3.30 P
ublic Funding. ........................................................................................................................................ 33 C
.3.31 R
ecipient’s Responsibility for Work. ....................................................................................................... 33 C
.3.32 R
elated Litigation. .................................................................................................................................... 33 C
.3.33 R
ights in Data. .......................................................................................................................................... 33 C
.3.34 S
tate Water Board Action; Costs and Attorney Fees. .............................................................................. 33 C
.3.35 T
imeliness. ............................................................................................................................................... 33 C
.3.36 U
nenforceable Provision. ......................................................................................................................... 34 C
.3.37 V
enue. ...................................................................................................................................................... 34 C
.3.38 W
aiver and Rights of the State Water Board. .......................................................................................... 34 C
.4 MISCELLANEOUS STATE AND FEDERAL REQUIREMENTS .......................................................... 34 C
.4.1 [
Reserved]. ............................................................................................................................................... 34 C
.4.2 S
tate Cross-C
utters. .................................................................................................................................. 34 C
.4.3 F
ederal Requirements and Cross-C
utters for SRF Funding. .................................................................... 35 E
XHIBIT D – S
PECIAL CONDITIONS ........................................................................................................ 41 E
XHIBIT E – P
AYMENT SCHEDULE ......................................................................................................... 42 E
XHIBIT F – T
AX CERTIFICATE ................................................................................................................ 43 F
.1 P
urpose. ............................................................................................................................................ 43 F
.2 T
ax Covenant. ................................................................................................................................... 43 F
.3 G
overnmental Unit. ........................................................................................................................... 43 F
.4 F
inancing of a Capital Project. .......................................................................................................... 43 F
.5 O
wnership and Operation of Project. ................................................................................................ 43 F
.6 T
emporary Period. ............................................................................................................................ 43 F
.7 W
orking Capital. ................................................................................................................................ 44 F
.8 E
xpenditure of Proceeds. .................................................................................................................. 44 F
.9 P
rivate Use and Private P
ayments. .................................................................................................. 44 F
.10 N
o Sale, Lease or Private Operation of the Project. ..................................................................... 44 F
.11 N
o Disproportionate or Unrelated Use. ......................................................................................... 45 F
.12 M
anagement and Service Contracts. ............................................................................................ 45 Attachment 2
N
ame of Recipient
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greement No.: XX-X
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roject No.: X-XX-X
XXX-XXX
P
age iv o
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iv
F
.13 N
o Disposition of Financed Property. ............................................................................................ 45 F
.14 U
seful Life of Project. .................................................................................................................... 45 F
.15 P
ayments. ...................................................................................................................................... 45 F
.16 N
o Other Replacement Proceeds. ................................................................................................ 46 F
.17 N
o Sinking or Pledged Fund. ........................................................................................................ 46 F
.18 R
eserve Amount. ........................................................................................................................... 46 F
.19 R
eimbursement Resolution. .......................................................................................................... 46 F
.20 R
eimbursement Expenditures. ...................................................................................................... 46 F
.21 C
hange in Use of the Project. ....................................................................................................... 46 F
.22 R
ebate Obligations. ....................................................................................................................... 47 F
.23 N
o Federal Guarantee. .................................................................................................................. 47 F
.24 A
mendments. ................................................................................................................................ 47 F
.25 R
easonable Expectations.............................................................................................................. 47 F
.26 A
ssignment. ................................................................................................................................... 47
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 1 o
f xx
S
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A
GREEMENT
1. A
UTHORITY.
(
a) T
he State Water R
esources Control B
oard (
State Water Board) is
authorized, a
nd implements its
a
uthority, to
provide fin
ancial assistance under this Agreement pursuant to S
ection 13475 et seq. of the
W
ater Code, and Resolution Nos. 2
019-0
064 and 2
024-0
026.
(
b) T
he Recipient is a
uthorized to enter into this Installment Sale Agreement ( Agreement) pursuant to
R
esolution No. 1033-20.
2. INT
ENTION.
(
a) Th
e Recipient desires to r
eceive fin
ancial assistance for a
nd undertake work required for th
e
w
astewater construction P
roject a
ccording to the terms and conditions set forth in this Agreement. (
b) T
he State Water Board proposes to assist in providing financial assistance for eligible costs of the P
roject in
the amount set forth in Exhibit B, according to the terms and conditions set forth in this A
greement, with the expectation that the Recipient shall repay all of the financial assistance to the State W
ater Board.
(
c) T
he Recipient intends to evidence its obligation to submit Payments to the State Water Board and se
cure its obligation with N
et Revenues of its wastewater enterprise, as set forth in Exhibit B, according to th
e terms and conditions set forth in this Agreement.
(
d) T
he Recipient intends to certify and evidence its compliance with the Tax Covenants set forth in E
xhibit F.
3. A
GREEMENT, TERM, DOCUMENTS INCORPORATED BY REFERENCE.
In
consideration of the mutual representations, covenants and agreements herein set forth, the State W
ater Board and the Recipient, each binding itself, its successors and assigns, do mutually promise, co
venant, and agree to the terms, provisions, and conditi ons of this Agreement.
(
a) T
he Recipient hereby sells to the State Water Board and the State Water Board hereby p
urchases from the Recipient the Project. Simultaneously therewith, the Recipient hereby purchases fr
om the State Water Board, and the State Water Board hereby sells to th e Recipient, the Project in
a
ccordance with the provisions of this Agreement. All right, title, and interest in the Project shall im
mediately vest in the Recipient on the date of execution and delivery of this Agreement by both parties w
ithout further actio
n on the part of the Recipient or the State Water Board.
(
b) S
ubject to the satisfaction of a
ll co
nditions p
recedent to this Agreement, this Agreement shall
b
ecome effective upon the signature of both the Recipient and the State Water Board. Conditions p
recedent are not limited to the following:
i. T
he Recipient must deliver to the Division a resolution authorizing this Agreement. ii. T
he Recipient must deliver an opinion of bond counsel and general counsel satisfactory to
the State Water Board’s counsel dated on or after the date that the Recipient signs th
is Agreement.
(
c) U
pon execution, the term of the Agreement sh
all begin on the Eligible W
ork S
tart Date and
e
xtend through th
e Final Payment Date.
(
d) T
his Agreement includes the following exhibits and attachments thereto:
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 2 o
f xx
S
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i. E
XHIBIT A – S
COPE OF WORK
ii. E
XHIBIT B – F
UNDING TERMS
iii. E
XHIBIT C – G
ENERAL & PROGRAMMATIC TERMS & CONDITIONS
iv
. E
XHIBIT D – S
PECIAL CONDITIONS
v. E
XHIBIT E – P
AYMENT SCHEDULE
vi
. E
XHIBIT F – T
AX CERTIFICATE
(
e) T
his Agreement includes the following documents incorporated by reference , as well as any
d
ocuments incorporated by reference in Exhibit D:
i. [if
DFA has it] the Final Plans & Specifications, dated __________, which are the basis fo
r the construction contract to be awarded by the Recipient; ii. [if
DFA d
oesn’t have the final plans and specs]
the Final Plans & Specifications, which
a
re the basis for the construction contract to be awarded by the R ecipient;
iii. th
e Waste Discharge Requirement Order No. _________ (and/or National Pollutant D
ischarge Elimination System Permit No. _________), and any amendments thereto; iv
. th
e Recipient’s Reimbursement Resolution No. 1034-20 d
ated D
ecember 8, 2020;
v. th
e Recipient’s Tax Questionnaire dated D
ecember 22, 2021;
vi
. th
e fe
deral D
avis-B
acon requirements. B
y accepting this Agreement, the Recipient
a
cknowledges and agrees to the terms and conditions provided in the D BRA
R
equirements for EPA Subrecipients | US EPA (h
ttps://www.epa.gov/grants/dbra-
r
equirements-epa-su
brecipients). T
he Recipient shall ensure that the following language
is
included in all contracts and subcontracts funded under this Agreement:
B
y accepting this contract, the contractor acknowledges and agrees to the terms a
nd conditions provided in the C
ontract Provisions for Davis-B
acon and Related
A
cts | US EPA (h
ttps://www.epa.gov/grants/contract-p
rovisions-d
avis-b
acon-and-
r
elated-a
cts).
(F
or r
eference, see a
lso
h
ttps://www.waterboards.ca.gov/water_issues/programs/grants_loans/srf/davisbacon.ht ml.)
(
f) T
his Agreement, and any amendments hereto, may be executed and delivered in any number of c
ounterparts, each of which when delivered shall be deemed to be an original, but such c
ounterparts shall together constitute one document. T
he parties may sign this A
greement, and
a
ny amendments hereto, either by an electronic signature using a method approved by the State W
ater Board or by a physical, handwritten signature. T
he parties mutually agree that an electronic
s
ignature using a method approved by the State W
ater Board is the same as a physical,
h
andwritten signature for the purposes of validity, enforceability, and admissibility.
4. P
ARTY CONTACTS
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 3 o
f xx
S
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S
tate Water Board [R
ecipient]
S
ection: D
ivision of Financial Assistance
N
ame: xxxx, P
roject Manager N
ame: T
itle
A
ddress: 1
001 I Street, ___ F
loor A
ddress:
C
ity, State,
Z
ip:
S
acramento, CA 95814 C
ity, State, Zip:
P
hone: (
916) P
hone:
F
ax: (
916) F
ax:
E
mail: [P
Memail]@
waterboards.ca.gov
[p
[email protected]]
E
mail:
T
he Recipient may change its
contact upon written notice to the Division, which notice shall be a
ccompanied by authorization from the Recipient’s Authorized Representative. The State Water Board w
ill notify the Recipient of any changes to its contact.
W
hile the foregoing are contacts for day-to-d
ay communications regarding Project work, the Recipient sh
all provide official communications and events of Notice as set forth in Exhibit C to the D ivision’s
D
eputy Director.
5. D
EFINITIONS.
U
nless otherwise specified, each capitalized term used in this Agreement has the following meaning:
“
Additional Payments" m
eans th
e reasonable extr
aordinary fees and e
xpenses of the State Water Board,
a
nd of any assignee of the State
Water Board's right, title, a
nd interest in and to this Agreement, in
co
nnection with this Agre
ement, including all expenses a
nd fees of accountants, trustees, staff,
co
ntractors, consultants, costs, insurance premiums and all other extraordinary costs reasonably incurred b
y the State Water Board or assignee of the State Water Board. "
Allowance" means an amount based on a percentage of the accepted bid for an eligible project to help d
efray the planning, design, and construction engineering and administration costs of the Project. “
Agreement” means this agreement, including all exhibits and attachments hereto. "
Authorized Representative" means the duly appointed representative of the Recipient as set forth in the ce
rtified original of the Recipient’s authorizing resolution that designates the authorized representative by tit
le.
"
Bank" means the California Infrastructure and Economic Development Bank. “
Bond Funded Portion of the Project Funds” means any portion of the Project Funds which was or will be fu
nded with Bond Proceeds.
“
Bond Proceeds” means original proceeds, investment proceeds, and replacement proceeds of Bonds. "
Bonds" means any series of bonds issued by the Bank, the interest on which is excluded from gross in
come for federal tax purposes, all or a portion of the proceeds of which have been, are, or will be a
pplied by the State Water Board to fund all or any portio n of the Project Costs or that are secured in
w
hole or in part by Payments paid hereunder.
“
Charge In Lieu of Interest” means any fee or charge in lieu of some or all of, but not to exceed, the in
terest that would otherwise be owed under this Agreement, as set forth in Exhibit E.
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 4 o
f xx
S
RF 1
9xii2024
"
Code" as used in Exhibit F of this Agreement means the Internal Revenue Code of 1986, as amended, a
nd any successor provisions and the regulations of the U.S. Department of the Treasury promulgated th
ereunder.
"
Completion of Construction" means the date, as determined by the Division after consultation with the R
ecipient, that the work of building and erection of the Project is substantially complete, and is identified in
Exhibit A of this Agreement.
“
Cover Page” means the front page of this Agreement.
“
Days” means calendar days unless otherwise expressly i
ndicated.
“
Debt Service” means, as of any date, with respect to outstanding System Obligations and, in the case of th
e additional debt tests in Exhibit B of this Agreement, any System Obligations that are proposed to be o
utstanding, the aggregate amount of principal a
nd interest scheduled to become due (either at maturity o
r by mandatory redemption), together with any Charge In Lieu of Interest on this Obligation or other S
ystem Obligations to the State Water Board, calculated with the following assumptions:
a. P
rincipal payments (unless a different subdivision of this definition applies for purposes of d
etermining principal maturities or amortization) are made in accordance with any amortization schedule p
ublished for such principal, including any minimum sinking fund payments;
b. In
terest on a variable rate System Obligation that is not subject to a swap agreement and that is is
sued or will be issued as a tax-e
xempt obligation under federal law, is the average of the SIFMA M
unicipal Swap Index, or its successor index, during the 24 m onths preceding the date of such
ca
lculation;
c. In
terest on a variable rate System Obligation that is not subject to a swap agreement and that is is
sued or will be issued as a taxable obligation under federal law, is the average of S OFR,
or its
su
ccessor index, during the 24 months preceding the date of such calculation; d. In
terest on a variable rate System Obligation that is subject to a swap agreement is the fixed sw
ap rate or cap strike rate, as appropriate, if the variable rate has been swapped to a fixed rate or ca
pped pursuant to an interest rate cap agreement or simila r agreement;
e. In
terest on a fixed rate System Obligation that is subject to a swap agreement such that all or a p
ortion of the interest has been swapped to a variable rate shall be treated as variable rate debt under su
bdivisions (b) or (c) of this definition of Debt Ser
vice;
f. P
ayments of principal and interest on a System Obligation are excluded from the calculation of D
ebt Service to the extent such payments are to be paid from amounts then currently on deposit with a tr
ustee or other fiduciary and restricted for the defeasance of such System Obligations;
g. If
25% or more of the principal of a System Obligation is not due until its final stated maturity, then p
rincipal and interest on that System Obligation may be projected to amortize over the lesser of 30 years o
r the Useful Life of the financed asset, and in
terest may be calculated according to subdivisions (b)-( e)
o
f this definition of Debt Service, as appropriate.
“
Deputy Director” means the Deputy Director of the Division. "
Division" means the Division of Financial Assistance of the State Water Board or any other segment of th
e State Water Board authorized to administer this Agreement.
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 5 o
f xx
S
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9xii2024
“
Eligible Construction Start Date” means the date set forth on the Cover P age of this Agreement,
e
stablishing the date on or after which construction costs may be incurred and eligible for reimbursement h
ereunder.
“
Eligible Work Start Date” means the date set forth on the Cover Page of this Agreement, establishing the d
ate on or after which a
ny non-c
onstruction costs may be incurred and eligible for reimbursement h
ereunder.
“
Enterprise Fund” means the enterprise fund of the Recipient in which Revenues are deposited. “
Event of Default” means the occurrence of any o
f the following events:
a) F
ailure by the Recipient to make any payment required to be paid pursuant to this Agreement, in
cluding Payments;
b) A
representation o
r warranty made by or on behalf of the Recipient in this Agreement or in any d
ocument furnished by or on behalf of the Recipient to the State Water Board pursuant to this Agreement sh
all prove to have been inaccurate, misleading or in
complete in any material respect;
c) A
material adverse change in the condition of the Recipient, the Revenues, or the System, which th
e Division reasonably determines would materially impair the Recipient’s ability to satisfy its obligations u
nder this Agreement.
d) F
ailure by the Recipient to comply with the additional debt test or reserve fund requirement, if a
ny, in Exhibit B or Exhibit D of this Agreement;
e) F
ailure to operate the System or the Project without the Division’s approval; f) F
ailure by the Recipient to observe and perform any covenant, condition, or provision in this A
greement, which failure shall continue for a period of time, to be determined by the Division; g) T
he occurrence of a material breach or event of default under any System Obligation o r Material
O
bligation t
hat results in the acceleration of principal or interest or otherwise requires immediate p
repayment, r
epurchase or redemption;
h) In
itiation of proceedings seeking arrangement, reorganization, or any other relief under any
a
pplicable bankruptcy, insolvency, or other similar law; the appointment of or taking possession of the R
ecipient’s property by a receiver, liquidator, assignee, trustee, custodian, conservator, or similar official; th
e Recip
ient’s entering into a general assignment for the benefit of creditors; the initiation of resolutions o
r proceedings to terminate the Recipient’s existence, or any action in furtherance of any of the foregoing;
i) A
determination pursuant to Gov. Code section 11137 that the Recipient has violated any p
rovision in Article 9.5 of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code; or j) L
oss of the Recipient’s rights, li
censes, permits, or privileges necessary for the operation of the S
ystem or the Project, or the occurrence of any material restraint on the Recipient’s enterprise by a g
overnment agency or court order.
“
Final Payment Date” is the date by which all principal and accrued interest due under this Agreement is to
be paid in full to the State Water Board and is specified on the Cover Page of this Agreement. “
Final R
eimb
ursement
Request Date” means the date s
et forth as such on the Cover Page of this
A
greement,
after which date, no further Project Funds disbursements may be requested. "
Fiscal Year" means the period of twelve (12) months terminating on June 3 0 of any year, or any other
a
nnual period selected and designated by the Recipient as its Fiscal Year in accordance with applicable la
w.
"
Force Account" means the use of th
e Recipient's own employees, e
quipment,
or resources for the
P
roject.
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 6 o
f xx
S
RF 1
9xii2024
“
GAAP” means generally accepted accounting principles, th e uniform accounting and reporting
p
rocedures set forth in publications of the American Institute of Certified Public Accountants or its su
ccessor, or by any other generally accepted authority on such procedures, and includes, as applicable, th
e standards
set forth by the Governmental A
ccounting Standards Board or its successor, or the Uniform S
ystem of Accounts, as adopted by the California Public Utilities Commission for water utilities. "
Initiation of Construction" means the date that notice to p roceed with work is issued for the Project, or, if
n
otice to proceed is not required, the date of commencement of building and erection of the Project. “
Listed Event” means, so long as the Recipient has outstanding any System Obligation subject to Rule 1 5c2-1
2, any of the events required to be reported with respect to such System Obligation pursuant to R
ule 15c2-1
2(b)(5).
“
Material Obligation” means an obligation of the Recipient th at is m
aterial to this transaction,
including
S
ystem Obligations.
“
Maximum Annual Debt Service” means the maximum amount of Debt Service due on System O
bligations in a Fiscal Year during the period commencing with the Fiscal Year for which such calculation is
made and within the next five years in which Debt Service for a ny System Obligations will become due.
"
Net Revenues" means, for any Fiscal Year, all Revenues received by the Recipient less the Operations a
nd Maintenance Costs for such Fiscal Year.
"
Obligation" means the obligation of the Recipient to make Payments (including Additional Payments) as p
rovided herein, as evidenced by the execution of this Agreement, p roceeds of such obligations being
u
sed to fund the Project as specified in the Project Description in Exhibit A and Exhibit B and in the d
ocuments thereby incorporated by reference.
"
Operations and Maintenance Costs" m
eans the reasonable and necessary costs paid or incurred by the R
ecipient for maintaining and operating the System, determined in accordance with generally accepted a
ccounting principles, including but not limited to (a) all reasonable expenses of manageme nt and repair
a
nd other expenses necessary to maintain and preserve the System in good repair and working order, a
nd (b) all reasonable and necessary administrative costs of the Recipient that are charged directly or appo
rtioned to the operation of the System, such as salaries and wages of employees, and the necessary co
ntribution to retirement of such employees, overhead, taxes (if any) and insurance. However, “O
peration and Maintenance Costs” d
o not include (i) administrative costs which the Recipient is required to
pay hereunder, (ii) payments of debt service on bonds, notes, installment sale agreements or other o
bligations issued by the Recipient with respect to the System, (iii) depreciation , replacement and
o
bsolescen
ce charges or reserves therefor, and (iv) amortization of intangibles or other bookkeeping e
ntries of a similar nature, and (v) costs and expenses which under generally accepted accounting p
rinciples are chargeable to a capital account.
“
Parity Obligation” means a debt obligation of the Recipient on parity with this Obligation. T he Recipient’s
P
arity Obligations are these:
• T
he Installment Sale Agreement, Publicly Owned Treatment Works (POTW) between t he City of
S
unnyvale and the C
alifornia State Water Resources Control Board, dated as of December 9, 2016 a
nd as subsequently amended (Headworks and Primary Treatment Project No. C-06-8153- 1 10, Agreement No. D16-0
1024)
• T
he Installment Sale Agreement, between th
e City of Sunnyvale and the California State Water
R
esources Control Board, dated as of J
anuary 3, 2023 a
nd as subsequently amended
(
Secondary Treatment and Dewatering Facilities Projec
t No. C-06-8483-1
10, Agreement No.
D
22-0
1001)
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 7 o
f xx
S
RF 1
9xii2024
• T
he City of Sunnyvale Wastewater Revenue Refunding Bonds, Series 2017A and the City of
S
unnyvale Taxable Wastewater Revenue Refunding B
onds, Series 2017A-T
, issued pursuant to
th
e Indenture of Trust between the City of Sunnyvale and U.S. Bank National Association, as T
rustee, dated as of December 1, 2
017
• T
he WIFIA Loan Agreement, Sunnyvale Cleanwater Program Phase 2 (WIFIA—N 18121CA)
b
etween the United States Environmental Protection Agency and the City of Sunnyvale dated as o
f October 29, 2020
“
Payment” means any payment due to the State Water Board from the Recipient pursuant to this A
greement.
"
Policy" means the State Water Board's “Policy for Implementing the Clean Water State Revolving Fund,” a
s amended from time to time, including the Intended Use Plan in effect as of the execution date of this A
greement.
“
Project” means the Project financed by this Agreement as described in Exhibits A and B and in the d
ocuments incorporated by reference herein.
"
Project Completion" means the date, as determined by the Division after consultation with the Recipient, th
at operation of the Project is initiated or is capable of being initiated, whichever comes first. "
Project Costs" means the incurred costs of the Recipient which are eligible for financial assistance under th
is Agreement, which are allowable costs as defined under the Policy, and which are reasonable, n
ecessary and allocable by the Recipient to the Proje
ct under GAAP, and may include capitalized
in
terest.
“
Project Funds” means all moneys disbursed to the Recipient by the State Water Board for eligible Project C
osts pursuant to this Agreement.
“
Recipient” means th
e City of Sunnyvale
“
Records Retention End Date” means the last date that the Recipient is obligated to maintain records and is
set forth on the Cover Page of this Agreement.
“
Regional Water Quality Control Board” or “Regional Water Board” means the appropriate Regional Water Q
uality Control Board.
“
Reimbursement Resolution” means the Recipient’s reimbursement resolution identified and incorporated b
y reference in this Agreement.
“
Reserve Fund” means the reserve fund required pursuant to Exhibit B of this Agreement. "
Revenues" m
eans, for each Fiscal Year, all gross charges received or receivable for, and all other gross in
come and receipts derived by the Recipient from, the ownership and operation of the System or o
therwise arising from the System, determined in accordance with g enerally accepted accounting
p
rinciples, including but not limited to investment earnings thereon, insurance proceeds, transfers from (
but exclusive of any transfers to) any revenue stabilization fund established for outstanding System O
bligatio
ns, and all moneys received by the Recipient from other public entities whose inhabitants are se
rved by the System pursuant to contracts with the Recipient. However, “R evenues” e
xclude (a) the
p
roceeds of any special assessments or special taxes levied upon real property within any improvement d
istrict served by the Recipient levied for the purpose of paying special assessment bonds or special tax o
bligations of the Recipient rela
ting to the System, (b) any taxes levied for the sole purpose of providing for
payment of principal and interest on any voter-a
pproved indebtedness incurred by the Recipient,
w
hich would not otherwise be subject to levy but for the issuance of such indebtedness, (c) the proceeds Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 8 o
f xx
S
RF 1
9xii2024
o
f any state or federal grants with respect to the System, and (d) customers d eposits or any other
d
eposits subject to refund until such deposits have become the property of the Recipient. “
Rule 15c2-1
2(b)(5)” means Rule 15c2-1
2(b)(5) promulgated by the Securities and Exchange
C
ommission pursuant to the Securities Exchange Act of 1934, as amended. “
Senior Obligation” means a debt obligation of the Recipient that is senior to this Obligation. There are no S
enior Obligations.
“
SRF” means the Clean Water State Revolving Fund.
“
State” means State of California.
“
State Water Board” means the State Water Resources Control Board. “
Subordinate Obligation” means a d
ebt obligation of the Recipient that is su
bordinate to this Obligation.
T
here are no Subordinate Obligatio
ns.
"
System" m
eans the existing wastewater system of the Recipient, comprising all facilities for the co
llection, treatment, disposal or reuse of wastewater, including the Project, sewage treatment plants in
tercepting and collecting sewers, outfall sewers, force mains, p umping stations, ejector stations,
o
xidation ponds, pipes, valves, machinery and all other appurtenances necessary, useful or convenient fo
r the collection, treatment, purification, reclamation or disposal of sewage, together with any necessary la
nds, rights, entitlements and other property useful in connection therewith, and all extensions thereof a
nd improvements thereto hereafter acquired, constructed or installed by the Recipient. “
System Obligation” means any obligation of the Recipient payable from the Revenues, including but not li
mited to this Obligation, any Parity Obligation, any Subordinate Obligation, and such additional o
bligations as may hereafter be issued in accordance wit h the provisions of such obligations and this
A
greement.
“
Useful Life” means the economically useful life of the Project beginning at Completion of Construction a
nd is set forth in Exhibit A.
“
Year” means calendar year unless otherwise expressly indicated.
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 9 o
f xx
S
RF 1
9xii2024
IN W
ITNESS WHEREOF, this Agreement has been executed by the parties hereto.
[RE
CIPIENTCAPS]:
B
y:____________________________________
N
ame: [O
fficer]
T
itle: [T
itle1]
D
ate:__________________________________
S
TATE WATER RESOURCES CONTROL BOARD:
B
y:____________________________________
N
ame: [O
fficer]
T
itle: D
eputy Director
D
ivision of Financial Assistance
D
ate:__________________________________
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 10 o
f xx
E
xhibit A
E
XHIBIT A – S
COPE OF WORK
A
.1. P
ROJECT DESCRIPTION, USEFUL LIFE, AND SCOPE OF WORK.
(
a) T
he Project is the project set forth on the Cover Page of this Agreement. (
b) T
he Use
ful Life
of this Project is at least ________ years.
(
c) S
cope of Work.
[le
ave placeholder “to be inserted by DFA”]
A
.2. S
TANDARD PROJECT R
EQUIREMENTS.
A
.2.1 A
cknowledgements.
T
he Recipient shall include the following a
cknowledgement in
any document, written report, or brochure
p
repared in whole or in part pursuant to this Agreement:
“F
unding fo
r this project has been provided in full or in part through an agreement with the State Water R
esources Control Board. C
alifornia’s Clean Water State Revolving Fund is capitalized through a variety o
f funding sources, including grants from the United State s Environmental Protection Agency and state
b
ond proceeds. The contents of this document do not necessarily reflect the views and policies of the fo
regoing, nor does mention o
f trade names or commercial products constitute endorsement or r
ecomme
ndation for use.”
A
.2.2 R
eports
A.2
.2.1 P
rogress Reports.
(
a) The Recipient must p
rovide a
progress report to
the Division each quarter, beginning no later
th
an 90 days after execution of this Agreement.
(
b) The Recipient must provide a progress report with each reimbursement request. F ailure to
p
rovide a complete and accurate progress report may result in the withholding of Project Funds, a
s set forth in Exhibit B.
(
c) A progress report must co
ntain the following information:
i. A
summary of progress to date including a description of progress since the last report, p
ercent construction complete, percent contractor invoiced, and percent schedule e
lapsed;
ii. A
description of compliance with environmental requirements; iii. A
listing of change orders including amount, description of work, and change in contract a
mount and schedule; and
iv
. A
ny problems encountered, proposed resolution, schedule for resolution, and status of p
revious problem resolutions.
A
.2.2.2 P
roject Completion Report.
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 11 o
f xx
E
xhibit A
(
a) The Recipient must submit a Project Completion Report to the Division with a copy to the a
ppropriate Regional Water Board on or before the due date established by the Division and the R
ecipient at the time of final project inspection. The Project Comple tion Report must include the
fo
llowing:
i. D
escription of the Project,
ii. D
escription of the water quality problem the Project sought to address, iii. D
iscussion of the Project’s likelihood of successfully addressing that water quality p
roblem in the future, and
iv
. S
ummary of compliance with applicable environmental conditions. (
b) If the Recipient fails to submit a timely Project Completion Report, the State Water Board may st
op processing pending or future applications for new financial assistance, withhold d
isbursements under this Agreement or other agreements, and begin adminis trative proceedings.
A
.2.2.3 A
s Needed Reports.
T
he Recipient must provide expeditiously, during the term of this Agreement, any reports, data, a
nd information reasonably required by the Division, including but not limited to material n
ecessary or appropriate for evaluation of the funding program or to fu lfill any reporting
r
equirements of the state or federal government.
A
.2.2.4 D
BE Good Faith Efforts and Reports for SRF Projects.
T
he Recipient shall comply with the a
pplicable D
isadvantaged Business Enterprises (DBE) requirements
in
4 0 CFR part 33 fo
r the Project and require its contractors and subcontractors on the Project to comply. 4 0 CFR § 33.301 requires the use of good faith efforts to utilize DBE’s whenever procuring construction, e
quipment, services, and supplies. If
required by the Division, th
e Recipient must report DBE utilization
to
the Division on the DBE Utilization Report, State Water Board Form DBE UR334. The Recipie nt must
su
bmit such reports to the Division annually within ten (10) calendar days following October 1 until such tim
e as the "Notice of Completion" is issued.
A
.2.3 S
ignage.
T
he Recipient shall place a sign at least four feet tall by eight feet wide made of ¾ inch thick exterior g
rade plywood or other approved material in a prominent location on the Project site and shall maintain th
e si
gn in good condition for the duration of the construction period. T he sign must include the following
d
isclosure statement and color logos (available from the Division):
a.
b
. “Funding for this $
xx million [name of project] p
roject has been provided in full or in part by the Clean W
ater State Revolving Fund through an agreement with the State Water Resources Control Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 12 o
f xx
E
xhibit A
B
oard. C
alifornia’s Clean Water State Revolving Fund is capitalized through a variety of funding sources, in
cluding grants from the United States Environmental Protection Agency and state bond proceeds.”
T
he Project sign may include another agency's required promotional information so long as the above lo
gos and disclosure statement are equally p
rominent on the sign. T
he sign shall be prepared in a
p
rofessional manner.
A
.2.4 C
ommencement of Operations.
U
pon Completion of Construction of the Project, the Recipient must expeditiously initiate Project o
perations.
A
.3 D
ATES & D
ELIVERABLES.
(
a) T
ime is of the essence.
(
b) T
he Recipient m
ust e
xpeditiously p
roceed with and complete construction of the Project.
(
c) The following dates are established as on the Cover Page of this Agreement:
i. E
ligible Work Start Date
ii. E
ligible C
onstruction Start Date
iii. C
ompletion of Construction Date
iv
. F
inal Reimbursement Request Date
v. R
ecords Retention End Date
vi
. F
inal Payment Date
(
d) T
he Recipient must award the prime construction contract timely.
(
e) T
he Recipient agrees to start construction no la
ter than [D
FA will in
ser
t date th
at is within 6 months
a
fter execution of this Agreement].
(
f) T
he Recipient must deliver any request for extension of the Completion of Construction date no less th
an 90 days prior to the Completion of Construction date.
(
g) T
he undisbursed balance of this Agreement will be deobligated if the Recipient does not provide its fin
al reimbursement request to the Division on or before the Final Reimbursement Request Date.
A
.4 S
CHEDULE.
F
ailure to provide items by the due dates indicated in the table below may constitute a material violation o
f this Agreement. The Project Manager may adjust the dates in the “Estimated Due Date” column of this ta
ble, but Critical Due Date adjustments will r
equire an amendment to this Agreement. The Recipient
m
ust complete and submit all work in time to be approved by the Division prior to Project Completion. A s
a
pplicable for specific submittals, the Recipient must plan adequate time to solicit, receive, a nd address
co
mments prior to submitting the final submittal. T
he Recipient must submit the final reimbursement
r
equest prior to the Final Reimbursement Request Date set forth on the Cover Page.
[DF
A will insert Schedule of Deliverables]
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 13 o
f xx
E
xhibit B
E
XHIBIT B – F
UNDING T
ERMS
B.1
. F
UNDING AMOUNTS A
ND REIMBURSEMENTS
B
.1.1 F
unding Conting
ency a
nd Other Sources.
(
a) If
this Agreement’s funding for any fiscal year e
xpires due to reversion or is
reduced, substantially
d
elayed, or deleted by the Budget Act, by E
xecutive Order, or by order or action of the Department of F
inance, the State W
ater Board has th
e option to either cancel this Agreement with no liability a ccruing t
o
th
e State W
ater Board,
or offer an amendment to the Recipient to reflect the reduced amount.
(
b) If
funding for Project Costs is made available to the Recipient from sources other than this Agreement, th
e Recipient m
ust n
otify the Division. The Recipient may retain such funding up to an amount whic h
e
quals the Recipient's sh
are of Project Costs. To the extent allowed by requirements of other funding so
urces, excess funding m
ust b
e remitted to the State Water B
oard to
be applied to Payments due
h
ereunder, if any.
B
.1.2 E
stimated Reasonable Cost.
T
he estimated reasonable cost of the t
otal Project, including associated planning and design costs is W
ritten Dollar Amount d
ollars and no cents (
$Dollar Amount).
B
.1.3 P
roject Funding Amount.
S
ubject to the terms of this Agreement, the State Water Board agrees to provide Project Funds n ot to
e
xceed the amount of the Project Funding Amount set forth on the Cover Page of this Agreement.
B
.1.4 [R
eserved].
B
. 1.5 B
udget Costs.
(
a) Estimated budget costs are co
ntained in the S
ummary P
roject Cost Table below:
[D
FA will in
sert table]
T
he Division’s Final Budget Approval and related Form 259 and Form 260 will document a more detailed b
udget of eligible Project Costs and Project funding amounts. Construction of the Project may be co
mpleted in phases with written approval of the Division. If construction proceeds under separate
p
hases, the Recipient must submit a Final Budget Approval package and receive Final Budget Approval fr
om the Division for each phase.
U
pon written request by the Recipient, the Division may adjust the li ne items of the b
udget at th
e ti
me of
D
ivision’s Final Budget Approval(
s).
Upon written request by the Recipient, the Division may also adjust th
e line items of the budget at the time of Recipient’s submittal of its final claim. Any line item adjustments to
the b
udget th
at are due to a change in scope of work will require an Agreement amendment. The sum o
f adjusted line items in th
e b
udget a
pproved thro
ugh the Final Budget Approval process m
ust not exceed
th
e P
roject Funding Am
ount. The Division may also propose budget adjustments. (
b) Under no circumstances may the sum of line items in the budget approved through the Final Budget A
pproval process exceed the Project Funding Amount. Any increase in the Project Funding Amount will r
equire an Agreement amendment.
B
.1.6 C
ontingent Disbursement.
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 14 o
f xx
E
xhibit B
(
a) T
he State Water Board’s disbursement of funds hereunder is contingent on the Recipient’s co
mpliance with the terms and conditions of this Agreement.
(
b) T
he State Water Board's obligation to disburse Project Funds is contingent upon the availability of su
fficient funds to permit the disbursements provided for herein. If sufficient funds are not available for a
ny reason, including but not limited to failure o
f the federal or State g
overnment to appropriate funds
n
ecessary for disbursement of Project Funds, the State Water Board shall not be obligated to make any d
isbursements to the Recipient under this Agreement. This provision shall be construed as a conditi on
p
recedent to the obligation of the State Water Board to make any disbursements under this Agreement.
N
othing in this Agreement shall be construed to provide the Recipient with a right of priority for d
isbursement over any other e
ntity.
If any disbursements due the Recipient under this Agreement are d
eferred because sufficient funds are unavailable, it is the intention of the State Water Board that such d
isbursement will be made to the R
ecipient when sufficient funds do become available, but this inten tion
is
not binding.
(
c) C
onstruction costs and disbursements are not available until after the Division has approved the fin
al budget form submitted by the Recipient fo
r the corresponding costs.
(
d) N
o costs incurred prior to the Eligible Work Start Date are eligible for reimbursement.
(
e) C
onstruction costs incurred prior to the Eligible C
onstruction Start Date are not eligible for
r
eimbursement.
(
f) F
ailure to p
roceed a
ccording to the timelines set forth in this Agreement may require the R
ecipient to repay to the State Water Board all disbursed Project Funds.
(
g) T
he Recipient agrees to ensure that its final r
eimb
ursement re
quest is received by the Division no
la
ter than the Final R
eimb
ursement Request Date. If the final r
eimb
ursement re
quest is not received
tim
ely, the undisbursed balance of this Agreement will be deobligated.
(
h) T
he Recipient is not entitled to interest earned on undisbursed funds.
B
.1.7 R
eimb
ursement Procedure.
E
xcept a
s may be otherwise provided in this Agreement, disbursement of Project Funds will be made as fo
llows:
(
a) U
pon execution and delivery of this Agreement by both parties, the R ecipient may request
im
mediate reimbursement of any eligible incurred planning and design allowance costs through su
bmission to the State Water Board of the Reimbursement Request Form 260 and Form 261, or a
ny amendment thereto, duly completed and executed.
To be eligible for reimbursement, Project
C
osts, including any planning and design allowance costs, must have been incurred in co
mpliance with all applicable requirements, including the st ate and federal cross-cu
tting
r
equirements listed in Exhibit C.
(
b) T
he Recipient must submit a r
eimb
ursement request for costs incurred prior to the date this A
greement is executed by the State Water Board no later than ninety (90) days after this A
greement is executed by the State Water Board. Late r
eimb
ursement requests may not be
h
onored.
(
c) T
he Recipient may request reimbursement of eligible construction and equipment costs consistent with b
udget amounts approved by t
he Division in the Final Budget Approval.
(
d) A
dditional Project Funds will be promptly disbursed to
the Recipient upon receipt of
r
eimb
ursement re
quest Form 260 a
nd Form 261,
or any amendment thereto, d
uly completed and
e
xecuted by the Recipient for incurred costs consistent with this Agreement, along with receipt of p
rogress r
eports due under E
xhibit A.
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 15 o
f xx
E
xhibit B
(
e) T
he Recipient m
ust n
ot request r
eimb
ursement for any Project Cost until such cost has been
in
curred and is currently due and payable by the Recipient, although the actual payment of such co
st by the Recipient is not required as a condition of r eimb
ursement request. S
upporting
d
ocumentation (e.g., receipts) must be submitted with each r eimbu
rsement re
quest. The amount
r
equested for administration costs must include a calculation formula (i.e., hours or days worked tim
es the hourly or daily rate = total amount claimed). Disbursement of Project Funds will be m
ade only after receipt of a complete, adequate
ly supported, properly documented, and
a
ccurately addressed r
eimb
ursement re
quest.
Upon request by the Division, supporting
d
ocuments for professional and administrative services must include the employees’ names, cl
assifications, labor rates, hours worke
d, and descriptions of the tasks performed.
R
eimb
ursement re
quests submitted without supporting documents may be wholly or partially w
ithheld at the discretion of the Division.
(
f) T
he R
ecipient m
ust sp
end Project Funds within 30 days of receipt. If
the Recipient earns in
terest
e
arned on Project Funds,
it m
ust re
port th
at interest immediately to
the State Water Board.
The
S
tate Water Board may deduct earned interest fr
om future disbursements.
(
g) T
he Recipient shall not request a r
eimb
ursement unless that Project Cost is allowable,
r
easonable, and allocable.
(
h) N
otwithstanding any other provision of this Agreement, no disbursement shall be required at a ny
tim
e or in any manner which is in violation of or in conflict with federal or state laws, policies, or r
egulations.
(
i) N
o work or travel outside the State of California is permitted under this Agreement unless the D
ivision provides prior written authorization. Failure to comply with this restriction may result in te
rmination this A
greement, pursuant to Exhibit C.
Any reimbursement for necessary travel and
p
er diem shall be at rates not to exceed those set by the California Department of Human R
esources at h
ttp://www.calhr.ca.gov/employees/Pages/travel-r
eimbursements.aspx.
as of the
d
ate costs are incurred by the Recipient.
B
.1.8 W
ithholding o
f Disbursements.
N
otwithstanding any other provision of this A
greement, the S
tate Water Board m
ay withhold all or any
p
ortion of the Project Funds upon the occurrence of any of the following events:
(
a) T
he Recipient’s failure to maintain reasonable progress on the Project as determined by the D
ivision;
(
b) P
lacement on the ballot or passage of an initiative or referendum to repeal or reduce the R
ecipient’s taxes, assessments, fees, or charges levied for operation of the System or p
ayment of debt service on System Obligations;
(
c) C
ommencement of litigation or a judicial or administrative proceeding related to the Project, S
ystem, or Revenues that the State Water Board determines may impair the timely sa
tisfaction of Recipient’s obligations under this Agreement; (
d) A
ny investigation by the State Water Board, D
istrict Attorney, California State Auditor, Bureau
o
f State Audits, t
he USEPA O
ffice of Inspector General, the Internal Revenue Service, S
ecurities and Exchange Commission, a grand jury, or any other state or federal agency, r
elating to the Recipient’s financial management, accounting procedures, or internal fiscal co
ntrols;
(
e) A
material adverse change in the condition of the R
ecipient, the Revenues, or the System,
th
at the Division reasonably determines would materially impair the Recipient’s ability to sa
tisfy its obligations under this Agreement, or any other event that th e Division reasonably
d
etermines would materially impair the Recipient’s ability to satisfy its obligations under this A
greement;
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 16 o
f xx
E
xhibit B
(
f) T
he Recipient’s material violation of, or threat to materially violate, any term of this A
greement;
(
g) S
uspicion o
f fraud, forgery, embezzlement, theft, or any other misuse of public funds by the R
ecipient or its employees, or by its contractors or agents regarding the Project or the S
ystem;
(
h) A
n event requiring Notice as set forth in Exhibit C;
(
i) A
n Event of Default or an event that the Division determines may become an Event of D
efault.
B
.1.9 F
raud and Misuse of Public Funds;
Enforcement.
A
ll requests for r
eimb
ursement submitted m
ust b
e accurate and signed by the Recipient’s Authorized
R
epresentative under penalty of perjury. A
ll costs submitted pursuant to this Agreement m
ust o
nly be for
th
e work or tasks set forth in
this Agreement. T
he Recipient m
ust n
ot submit any invoice containing costs
th
at are ineligible or have been reimbursed from other funding sources unless required and specifically n
oted as such (i.e., match costs). A
ny eligible costs for which the Recipient is seeking reimbur sement
sh
all not be reimbursed from any other source. D
ouble or multiple billing for time, services, or any other e
ligible cost is improper and will not be compensated. A ny suspected occurrences of fraud, forgery,
e
mbezzlement, theft, or any other misuse of public funds may result in suspension of disburseme nts and,
n
otwithstanding any other section in this Agreement, the termination of this Agreement requiring the r
epayment of all P
roject Fu
nds disbursed hereunder. A
dditionally, the Deputy Director of th
e Division
m
ay request an audit; r
efer the matter for appropriate administrative action, including but not l
imited to the recovery of financial assistance provided and the imposition of civil penalties; and/o
r r
efer the matter to the Attorney General’s Office or the appropriate district attorney’s office for cr
iminal prosecution or the imposition of civil liability. A person who knowingly makes or causes to be
m
ade any false statement, material misrepresentation, or false certification in any submittal ma y be
su
bject to a civil penalty, criminal fine, or imprisonment. (Wat. Code, § 13490 et seq.)
B
.2 R
ECIPIENT’S PAYMENT O
BLIGATION, PLEDGE, AND RESERVE
B
.2.1 P
roject Costs.
T
he Recipient m
ust p
ay any and all costs connecte
d with the Project including, w
ithout limitation, any and
a
ll Project Costs a
nd Additional Payments.
If the Project Funds a
re not sufficient to pay the P
roject Costs
in
full, the Recipient m
ust n
onetheless complete the Pr
oject and pay that portion of th
e Project Costs in
e
xcess of available Project Funds, and
shall not be entitled to any r
eimbursement therefor from the State
W
ater Board.
B
.2.2 E
stimated Principal Payment Due.
T
he estimated amount of principal that will be due to the State Water Board from the Recipient under this A
greement is W
ritten Dollar Amount dollars and no cents ($Dollar Amount).
B
.2.3 In
terest Rate and In-L
ieu of Interest Charges.
(
a) The Recipient agrees to make all Payments according to the schedule in Exhibit E , and as otherwise
se
t forth herein, a
t an interest rate of W
ritten Interest Rate % (X%) p
er annum.
(
b) Interest will accrue beginning with each d
isbursement.
(
c) In lieu of, and not to exceed, interest otherwise due under this Agreement, the Recipient agrees to pay th
e following charge(s), as further set forth in E
xhibit E:
• a
n Administrative Service Charge
• a
Small Community Grant Fund Charge
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 17 o
f xx
E
xhibit B
B
.2.4 [Re
served].
B
.2.5 O
bligation Absolute.
T
he obligation of the Recipient to make the Payments and other payments required to be made by it u
nder this Agreement, from the Net Revenues and/or other amounts legally available to the Recipient th
erefor, is absolute and unconditional, and until such tim e as the Payments and Additional Payments
h
ave been paid in full, the Recipient must not discontinue or su spend any Payments or other payments
r
equired to be made by it hereunder when due, whether or not the P roject, o
r any r
elated p
art thereof is
o
perating or operable or has been completed, or its use is suspended, interfered with, reduced or cu
rtailed or terminated in whole or in part, and such Payments and other payments shall not be subject to r
eduction whether by offset or otherw
ise and shall not be conditional upon the performance or n
onperformance by any party of any agreement for any cause whatsoever.
B
.2.6 P
ayment Timing.
(
a) Beginning one year after Completion of Construction, the Recipient must submit an annual Payment o
f the principal of the P
roject Funds, together with all interest accruing thereon. The Recipient must make P
ayments fully amortizing the total principal of the Project by the Final Payment Date. Payments are b
ased on a standard fully amortized assistance amount with equal annu al payments.
(
b) The remaining balance is the previous balance, plus the disbursements, plus the accrued interest on b
oth, plus any Charge In Lieu of Interest, less the Payment. Payment calculations will be made beginning o
ne (1) year after Completion of Construction. E
xhibit E is a payment schedule based on the provisions
o
f this Exhibit and an estimated disbursement schedule. Actual payments will be based on actual d
isbursements.
(
c) Upon Completion of Construction and submission of necessary reports by the Recipient, the Division w
ill prepare an appropriate payment schedule a
nd supply the same to the Recipient. The Division may
a
mend this schedule as necessary to accurately reflect amounts due under this Agreement. The Division w
ill prepare any necessary amendments to the payment schedule and send them to the Recipient. The R
ecipient must make each Payment on or before the due date therefor. A ten (10) day grace period will b
e allo
wed, after which time a penalty in the amount of costs incurred by the State Water Board will be a
ssessed for late payment. These costs may include, but are not limited to, lost interest earnings, staff tim
e, bond debt service default penalties, if any, a
nd other related costs. For purposes of penalty
a
ssessment, payment will be deemed to have been made if payment is deposited in the U.S. Mail within th
e grace period with postage prepaid and properly addressed. Any penalties assessed will not be added to
the assistance amount balance, but will be treated as a separate account and obligation of the R
ecipient. The interest penalty will be assessed from the payment due date.
(
d) The Recipient is obligated to make all payments required by this Agreement to the State Water Board, n
otwithstanding any individual default by its constituents or others in the payment to the Recipient of fees, ch
arges, taxes, assessments, tolls or othe
r charges ("Charges") levied or imposed by the Recipient. The R
ecipient must provide for the punctual payment to the State Water Board of all amounts which become d
ue under this Agreement and which are received from constituents or others in the payment to the
R
ecipient. In the event of failure, neglect or refusal of any officer of the Recipient to levy or cause to be le
vied any Charge to provide payment by the Recipient under this Agreement, to enforce or to collect su
ch Charge, or to pay over to the State
Water Board any money collected on account of such Charge n
ecessary to satisfy any amount due under this Agreement, the State Water Board may take such action in
a court of competent jurisdiction as it deems necessary to compel the performance of all dutie s relating
to
the imposition or levying and collection of any of such Charges and the payment of the money co
llected therefrom to the State Water Board. Action taken pursuant hereto shall not deprive the State W
ater Board of, or limit the application of, a
ny other remedy provided by law or by this Agreement.
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 18 o
f xx
E
xhibit B
(
e) Each Payment must be paid in lawful money of the United States of America by check or other a
cceptable form of payment se
t forth at w
ww.waterboards.ca.gov/make_a_payment.
T
he Recipient must pay Payments and Additional Payments from Net Revenues and/or other amounts le
gally available to the Recipient therefor.
B
.2.7 P
ledged Revenues.
B
.2.7.1 E
stablishment of Enterprise Fund and Reserve Fund.
In
order to carry out its System Obligations, the Recipient covenants that it shall establish and maintain or sh
all have established and maintained t
he Enterprise Fund. All Revenues received shall be deposited w
hen and as received in trust in the Enterprise Fund. As required in this E xhibit,
the Recipient must
e
stablish and maintain a Reserve Fund.
B
.2.7.2 P
ledge of Net Revenues, Enterprise Fund, and Reserve Fund.
T
he Obligation hereunder shall be secured by a lien on and pledge of the Enterprise Fund and N et
R
evenues on parity with the Parity Obligations and
on the Reserve Fund required hereunder.
The
R
ecipient hereby pledges and grants such lien on and pledge of the Enterprise Fund, Net Revenues, and th
e R
eserve Fund to secure the Obligation, including payment of Payments and Additional Payments h
ereunder. The Enterprise Fund, Net Revenues in the Enterprise Fund, and any Reserve Fund shall be su
bject to the lien of such pledge without any physical deliver y thereof or further act, and the lien of such
p
ledge shall be valid and binding as against all parties having claims of any kind in tort, contract, or o
therwise against the Recipient.
B
.2.7.3
A
pplication and Purpose of the Enterprise Fund.
S
ubject to the provisions of any outstanding System Obligation, money on deposit in the Enterprise Fund sh
all be applied and used first, to pay Operations and Maintenance Costs, and thereafter, all amounts d
ue and payable with respect to the System Obligatio
ns in order of priority a
nd in accordance with the
a
greements under which the respective System Obligations were issued.
After making all payments
h
ereinabove required to be made in each Fiscal Year, the Recipient may expend in such Fiscal Year any r
emain
ing money in the Enterprise Fund for any lawful purpose of the Recipient.
B
.2.8 N
o Prepayment.
P
ursuant to State Water Board’s Debt Management Policy, adopted on October 3, 2017, th e Recipient
m
ay not prepay any portion of the principal and interest due under this Agreement without the written co
nsent of the Deputy Director of the Division.
B
.2.9 R
eserve Fund.
P
rior to Completion of Construction, the Recipient must establish a restricted Reserve Fund, held in its E
nterprise Fund, equal to one year’s Debt Service on this Obligation. The Recipient must maintain the R
eserve Fund throughout the term of this Agreemen
t. The Reserve Fund is subject to lien and pledged
a
s security for this Obligation, and its use is restricted to payment of this Obligation during the term of this A
greement.
B
.3 R
ATES, FEES AND CHARGES.
(
a) The Recipient must, to the extent permitted by law, fix, prescribe and collect rates, fees and charges fo
r the System during each Fiscal Year which are reasonable, fair, and n ondiscriminatory and which will
b
e sufficient to generate Revenues in the amounts necessary to cover Operations and Maintenance C
osts, and must ensure that Net Revenues are equal to the sum of (i) at least 120% of the Maximum Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 19 o
f xx
E
xhibit B
A
nnual Debt Service with respect to all outstanding System Obligations senior to and on parity with the O
bligation and (ii) at least 110%
of the Maximum Annual Debt Service with respect to all outstanding S
ystem Obligations subordinate to the Obligation, so long as System Obligations other than this O
bligation are outstanding,
and subject to the adjustments made for any transfers made from any r
evenue stabilization fund e
stablished for outstanding System Obligations.
Upon defeasance of all
S
ystem Obligations
other than this Obligation, this ratio must be at least 120%, except where System O
bligations are defeased pursuant to refunding obligations.
(
b) The Recipient may make adjustments from time to time in such fees and charges and may make such cl
assification thereof as it deems necessary, but shall not reduce the rates, fees and charges then in e
ffect unless the Net Revenues from such reduced rates,
fees, and charges will at all times be sufficient
to
meet the requirements of this section.
(
c) Upon consideration of a voter initiative to
reduce Revenues, the Recipient must make a finding
r
egarding the effect of such a reduction on the Recipient's ability to satisfy the rate covenant set forth in th
is Section. T
he Recipient must make its findings available to the public. The R ecipient’s Authorized
R
epresentative must request, if necessary, the authorization of the Recipient’s decision-m aker or
d
ecision-m
aking body to file litigation to challenge any such initiative th at it finds will render it unable to
sa
tisfy the rate covenant set forth in this Agreement and its obligation to operate and maintain the Project fo
r its Useful Life. The Recipient must diligently pursue and bear a ny and all costs r
elated to such
ch
allenge. The Recipient must notify and regularly update the State Wa ter Board regarding the status of
a
ny such challenge.
B
.4 A
DDITIONAL DEBT.
(
a) The Recipient’s future debt that is secured by Revenues pledged herein may not be senior to this O
bligation.
(
b) T
he Recipient may issue additional parity or subordinate debt only if a ll of the following conditions are
m
et:
i. N
o E
vent of D
efault (
or no e
vent w
ith r
espect to w
hich n
otice has b
een g
iven and w
hich,
o
nce all notice of grace periods have passed, would constitute an Event of Default) has o
ccurred and is continuing;
ii. N
et Revenues in the most recent Fiscal Year, excluding transfers from any re venue
st
abilization fund e
stablished for outstanding System Obligations,
if any, meet the ratio
fo
r rate covenants set forth in this Exhibit with respect to any o utstanding and proposed
a
dditional obligations;
iii. T
he Recipient is in compliance with th
e Reserve Fund r
equirement of this Obligation.
B
.5 N
O LIENS.
T
he Recipient must not make any pledge of or place any lien on the Project, System, or Revenues except a
s otherwise provided or permitted by this Agreement.
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 20 o
f xx
E
xhibit C
E
XHIBIT C – G
ENERAL & PROGRAMMATIC TERMS & CONDITIONS
C
.1 R
EPRESENTATIONS &
WARRANTIES.
T
he Recipient represents, warrants, and commits to the following a s of the Eligible W
ork S
tart Date and
c
ontinuing thereafter fo
r the term of this Agreement.
C
.1.1 A
pplication and General Recipient Commitments.
T
he Recipient has not made any untrue statement of a material fact in its application for this financial a
ssistance, or omitted to state in its application a material fact that makes the statements in its application n
ot misleading.
T
he Recipient a
grees to co
mply with all terms, provisions, conditions, and commitments of this A
greement, including all incorporated documents.
T
he R
ecipient agrees to fulfill all assurances, declarations, representations, and commitments in its a
pplication, accompanying documents, and communications filed in support of its request for funding u
nder this Agreement.
C
.1.2 A
uthorization and Validity.
T
he execution and delivery of this Agreement, including all incorporated documents, has been d
uly authorized by the R
ecipient. Upon execution by both parties, this Agreement constitutes a va
lid and binding obligation of the Recipient, enforceable in accordance with its terms, except as su
ch enforcement may be limited by law.
C
.1.3 N
o Violations.
T
he execution, delivery, and performance by Recipient of this Agreement, including all in
corporated documents, do not violate any provision of any law or regulation in effect a s of the
d
ate of execution of this Agreement by the Recipient, or result in any breach or default under any c
ontract, obligation, indenture, or other instrument to which Recipient is a party or by which Recipient i
s bound as of the date of execution of thi
s Agreement by the Recipient.
C
.1.4 N
o Litigation.
T
here are, as of the date of execution of this Agreement by the Recipient, no pending or, to R
ecipient’s knowledge, threatened actions, claims, investigations, suits, or proceedings before a
ny governmental authority, court, or administrative agency which ma terially affect,
or, if resolved
u
nfavorably to the Recipient, would materially affect, th e financial condition or operations of the
R
ecipient, the System, the Revenues, and/or the Project.
T
here are no proceedings, actions, or offers by a public entity to acquire by purchase or the p
ower of eminent domain the S
ystem or any of the real or personal property related to or n
ecessary for the Project.
C
.1.5 P
roperty Rights.
T
he Recipient owns or has sufficient property rights in the Project property for the longer of the U
seful Life or the term of this Agreement, either in fee simple or for a term of years that is not su
bject to third-p
arty revocation during the Useful Life of
the Project.
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 21 o
f xx
E
xhibit C
C
.1.6 S
olvency and Insurance.
N
one of the transactions contemplated by this Agreement will be or have been made with an actual intent to
hinder, delay, or defraud any present or future creditors of Recipient. The Recipient is solvent and will n
ot be rendered insolvent by the transaction
s contemplated by this Agreement. The Recipient is able to p
ay its debts as they become due. Th
e Recipient maintains sufficient insurance coverage considering the sco
pe of this Agreement, including, for example but not necessarily limited to, general lia bility, automobile
li
ability, workers compensation and employer liability, professional liability.
C
.1.7 L
egal Status and Eligibility.
T
he R
ecipient is duly organized and existing and in good standing under the laws of the State of C
alifornia. Recipient m
ust a
t all times maintain its current legal existence and preserve and keep in full fo
rce and effect its legal rights and authority. T
he R
ecipient a
cknowledges that changes to its legal or
fin
ancial status may affect its eligibility for funding under this Agreement and commits to maintaining its e
ligibility. W
ithin the preceding ten years, the Recipient has not failed to demonstrate complian ce with
st
ate or federal audit disallowances.
C
.1.8 F
inancial Statements and Continuing Disclosure.
T
he financial statements of Recipient previously delivered to the State Water Board as of the date(s) set fo
rth in such financial statements: (a) are m
aterially complete and correct; (b) present fairly the financial co
ndition of the Recipient; and (c) have been prepared in accordance with GAAP. Since the date(s) of su
ch financial statements, there has been no material adverse change in the financial con dition of the
R
ecipient, nor have any assets or properties reflected on such financial statements been sold, tr
ansferred, assigned, mortgaged, pledged or encumbered, except as previously disclosed in writing by R
ecipient and approved in writing by the State
Water Board.
T
he Recipient is current in its continuing disclosure obligations associated with its material debt, if any.
C
.1.9 S
ystem Obligations
T
he Recipient has no System Obligations other than those d efined in this Agreement.
C
.1.10 N
o Other Material O
bligations.
T
he Recipient has no Material Obligations other than System Obligations.
C
.1.11 C
ompliance with State Water Board Funding Agreements.
T
he Recipient represents that it is in compliance with all State Water Board funding agreements to which it
is a party.
C
.2 D
EFAULTS AND REMEDIES
In
addition to any other remedy set forth in this Agreement, the following remedies are available under th
is Agreement.
C.2.1 R
eturn of Funds; Acceleration; and A
dditional Payments.
N
otwithstanding a
ny other provision of this Agreement,
if the Division determines that an Event of Default
h
as occurred, the Recipient m
ay be required,
upon demand, immediately t
o d
o each of the following:
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 22 o
f xx
E
xhibit C
i. r
etu
rn to the State Water Board any g
rant or principal forgiveness amounts received pur
suant
to
this Agreement;
ii. a
ccelerate the payment of any p
rincipal owed u
nder this Agreement, all of wh
ich shall be
im
mediately due and payable;
iii. p
ay interest at the highest legal rate on all of the fo
regoing; and
iv
. p
ay any Additional Payments.
C
.2.2 [Re
served].
C
.2.3 A
dministrative remedies.
W
henever the State Water Board d
etermines that the Recipient, the Recipient’s contractor, consultant, e
mployee, agent, assignee, or grantee has violated any requirement or term of the Agreement, the State W
ater Board may impose civil penalties in accordance with Water Code, section 13497.
The State Water
B
oard may impose civil liability administratively against the Recipient or the Recipient’s consultant or co
ntractor or other agent furnishing any information related to funds disbursed or costs claimed for r
eimbursement if the Recipient or the Recipient’s consultant or contractor or other agent fails to p
ersonally attest that the information is true, accurate, and complete the best of one’s knowledge. (Wat.
C
ode, § 13498.) The State Water Board may impose ci
vil liability administratively against any person
w
ho makes a misrepresentation in any submittal to the State Water Board, including, but not limited to, an a
pplication, report, certification, record, invoice, form, or other document that is submitted to the State
W
ater Board relating to a financial assistance agreement. (Wat. Code, § 13499.)
C
.2.4 Ju
dicial remedies.
W
henever the State Water Board determines that an Event of Default shall have occurred, the State W
ater Board may enforce its rights under this Agreement by any judicial proceeding, whether at law or in e
quity. Without limiting the generality of the forego
ing, the State Water Board may:
i. b
y suit in equity, require the Recipient to account for amounts relating to this Agreement a
s if the Recipient were the trustee of an express trust; ii. b
y mandamus or other proceeding, compel the performance by the Recipient and any of its
officers, agents, and employees of any duty under the law or of any obligation or co
venant under this Agreement, including but not limited to the imposition and collectio n
o
f rates for the services of the System sufficient to meet all requirements of this A
greement; and
iii. ta
ke whatever action at law or in equity as may appear necessary or desirable to the S
tate Water Board to collect the Payments then due or thereafter to become due, or to e
nforce performance o
f any obligation or covenant of the Recipient under this A
greement.
C
.2.5 T
ermination.
U
pon an Event of Default, the State Water Board may terminate this Agreement. Interest shall accrue on a
ll amounts due at the highest legal rate of interest from the date that the State Water Board delivers n
otice of termination to the Recipient.
C
.2.6 D
amages for Breach of Tax-E
xempt Status.
In
the event that any breach of any of the provisions of this Agreement by the Recipient results in the loss o
f tax-e
xempt status for any bonds of the State or any subdivision or agency thereof, or if such breach r
esults in an obligation on the part of the S
tate or any subdivision or agency thereof to reimburse the fe
deral government by reason of any arbitrage profits, the Recipient must immediately reimburse the S
tate or any subdivision or agency thereof in an amount equal to any damages paid by or loss incu rred
b
y the State or any subdivision or agency thereof due to such breach.
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 23 o
f xx
E
xhibit C
C
.2.7 D
amages for Breach of Federal Conditions.
In
the event that any breach of any of the provisions of this Agreement by the Recipient results in the fa
ilure of Project Funds to be used pursuant to the provisions of this Agreement, or if such breach results in
an obligation on the part of the State or a
ny subdivision or agency thereof to reimburse the federal g
overnment, the Recipient must immediately reimburse the State or any subdivision or agency thereof in a
n amount equal to any damages paid by or loss incurred by the State or any subdivision or age ncy
th
ereof due to such breach.
C
.2.8 R
emedies a
nd Limitations.
N
one of the remedies available to the State Water Board shall be exclusive of any other remedy, and e
ach such remedy shall be cumulative and in addition to every other remedy given hereunder or now or h
ereafter existing at law or in equity. The State Water Board may exercise any remedy, now or hereafter
e
xisting, without exhausting and withou
t regard to any other remedy.
A
ny claim of the R
ecipient is
limited to the rights and r
emedies p
rovided to the Recipient under this
A
greement and is subject to the cl
aims procedures provided to the R
ecipient u
nder this Agreement.
C
.2.9 N
on-Wa
iver.
N
othing in this Agreement shall affect or impair the Recipient’s Obligation to pay Payments as provided h
erein or shall affect or impair the right of the State Water Board to bring suit to enforce such payment.
N
o delay or omission of the State Water Board
in the exercise of any right arising upon an Event of
D
efault shall impair any such right or be construed to be a waiver of any such Event of Default. The State W
ater Board may exercise from time to time and as often as shall be deemed expedient by the S tate
W
ater Board, any remedy or right provided by law or pursuant to this Agreement.
C
.2.10 S
tatus Quo.
If
any action to enforce any right or exercise any remedy shall be brought and either discontinued or d
etermined adversely to the State Water Board, then the State Water Board shall be restored to its former p
osition, rights and remedies as if no such actio
n had been brought.
C.3 S
TANDARD CONDITIONS
C.3.1 A
ccess, In
spection,
and Public Records.
T
he Recipient m
ust e
nsure that the State Water Board, the Governor of the S tate, the U
SEPA, th
e
U
SEPA’s Office of Inspector General,
any member of C
ongress, or any authorized representative of the
fo
regoing, will have safe and suitable access to the Project site at all reasonable times during Project co
nstruction and thereafter for the term of the Agreement. The Recipient acknowledges that, except fo r a
su
bset of information regarding archaeological records, the P roject records and locations are public
r
eco
rds, including but not limited to all of the submissions accompanying the application, all of the d
ocuments incorporated in
to this Agreement b
y r
eference,
and all reports, r
eimb
ursement requests, and
su
pporting documentation submitted hereunder.
C.3.2 A
ccounting and Auditing Standards;
Financial Management Systems; Records Retention.
(
a) T
he Recipient must maintain project accounts according to GAAP as issued by the Governmental A
ccounting Standards Board (GASB) or its
successor. The Recipient must maintain GAAP-co
mpliant
p
roject accounts, including GAAP requirements relating to the reporting of infrastructure assets.
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 24 o
f xx
E
xhibit C
(
b) The Recipient must comply with federal standards for financial management sys tems. The Recipient
a
grees that, at a minimum, its fiscal control and accounting procedures will be sufficient to permit p
reparation of reports required by the federal government and tracking of Project funds to a level of e
xpenditure adequate to establis
h that such funds have not been used in violation of federal or state law o
r the terms of this Agreement. To the extent applicable, the Recipient must comply with the provisions a
nd requirements of the federal Single Audit Act (SAA) of 1984, 2 CFR part 2 00, subpart F, and 2 CFR
se
ction 200.302, and updates or revisions thereto, including but not limited to:
• M
aintain an annual (Fiscal Year) accounting system and identify all expenditures of federal fin
ancial assistance;
• C
onduct a SAA audit using an independent auditor in those Fiscal Years when expenditures of to
tal federal financial assistance equal or exceed th
e applicable threshold in 2 CFR section
2 00.501,
and submit the SAA audit to the Federal Audit Clearinghouse within the earlier of thirty (
30) calendar days after receipt of the auditor’s report(s) or nine (9) months of the end of the audit p
eriod;
• N
otify the Division when a SAA audit has been conducted and submitted to the Federal Audit C
learinghouse;
• N
otify and provide the Division with a copy of the SAA audit within thirty (30) days of completion o
f the audit;
• In
form the Division of findings and recommendations pertaining to federal financial assistance p
rovided through the State Water Board co
ntained in SAA audits conducted by the Recipient;
• In
itiate corrective actions for audit reports with findings and recommendations that impact federal fin
ancial assistance provided through the State Water Board and notify the Division when co
rrective actions are complete.
(c) W
ithout limitation of the requirement to maintain Project accounts in accordance with GAAP, the R
ecipient m
ust:
i. E
stablish an official file for the Project which adequately documents all sig
nificant a
ctions relative to the Project;
ii. E
stablish separate accounts which will adequately and accu rately depict all
a
mounts r
eceived and expended on the Project, including all assistance funds
r
eceived under this A
greement;
iii. E
stablish separate accounts which will adequately depict all income received
w
hich is a
ttributable to the Project, specifically including any income a
ttributable to assistance fu
nds disbursed under this Agreement;
iv
. E
stablish an accounting system which will accurately depic t final total costs of
th
e P
roject, including both direct and Indirect Costs;
v. E
stablish such accounts and maintain such records as may be necessary for
th
e State to fu
lfill federal reporting requirements, including any and all r eporting
r
equirements under fe
deral tax statutes or regulations; and
vi
. If
Force Account is used by the Recipient for any phase of the Project, other th
an for planning, design, and construction engineering and administration p
rovided for by allowance, accounts will be established which reasonably d
ocument all employee hours ch
arged to the Project and the associated tasks
p
erformed by each employee.
(d) T
he Recipient m
ust m
aintain separate books, records and other material relative to the Project.
T
he Recipient must also retain such books, records, and other material for itself and for each contractor o
r subcontractor who performed or performs work on this project for a min imum of thirty-si
x (36) years
a
fter C
ompletion of Construction. The Recipient must require that such books, records, and other material a
re subject at all reasonable times (at a minimum during normal business hours) to inspection, co pying,
a
nd audit by the State Water Board, the California State Auditor, the Bureau of State Audits, the USEPA, th
e USEPA’s Office of Inspector General, the Internal Revenue Service, the Governor, or any authorized Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 25 o
f xx
E
xhibit C
r
epresentatives of the aforementioned. The Recipient must allow and must require its contractors to a
llow interviews during normal business hours of any employees who might reasonably have information r
elated to such records. The Recipient agrees to inclu
de a similar duty regarding audit, interviews, and
r
ecords retention in any contract or subcontract related to the performance of this Agreement. The p
rovisions of this section survive the term of this A
greement.
C.3.3 A
mendment.
N
o amendment or variation of the terms of this Agreement shall be valid unless made in writing and si
gned by both the Recipient and the Deputy Director or designee.
R
equests for amendments must be in writing and d
irected to the contact listed in Section 4 and to the
D
ivision’s Chief of Loans and Grants Administration Section.
C.3.4 A
ssignability.
T
his Agreement is not assignable by the Recipient, either in whole or in part, without the consent of the S
tate Water Board in the form of a formal writte
n amendment to this Agreement.
C.3.5 A
udit.
(
a) T
he Division may call for an audit of financial information relative to the Project if the Division d
etermines that an audit is desirable to assure program integrity or if an audit becomes necessary b
ecause of state or federal requirements. If an audit
is called for, the audit m
ust b
e performed by a
ce
rtified public accountant independent of the Recipient and at the cost of the Recipient. The audit m ust
b
e in the form required by the Division.
(
b) A
udit disallowances m
ust b
e returned to the State Water Board.
C.3.6 B
onding.
W
here contractors are used, the Recipient m
ust n
ot authorize construction to begin until each contractor h
as furnished a performance bond in favor of the Recipient in the following amounts: faithful performance (
100%) of contract value; labor and materials (100%) of contract value. This requirement sh all not apply
to
any contract for less than $25,000.00.
C
.3.7 C
ompetitive Bidding
R
ecipient m
ust a
dhere to any applicable state law or local ordinance for competitive bidding and a
pplicable labor laws.
C.3.8 C
ompliance with A
pplicable Laws, Rules, and Requirements.
T
he Recipient m
ust,
at all times, comply with and require its contractors and subcontractors to comply w
ith all applicable federal and state laws, rules, guidelines, regulations, and requirements. Without li
mitation of the foregoing, to the extent applicable, the Recipient m ust:
(
a) C
omply with the provisions of the adopted environmental mitigation plan, if any, for the term of th
is Agreement;
(
b) C
omply with the Policy; and
(
c) C
omply with and r
equire compliance with the st
ate and federal requirements set forth elsewhere
in
this Agreement.
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 26 o
f xx
E
xhibit C
C
.3.9 C
omputer Software.
T
he Recipient certifies that it has appropriate systems and controls in place to ensure that state funds will n
ot be used in th
e performance of this Agreement for the acquisition, operation or maintenance of co
mputer software in violation of copyright laws.
C.3
.10 C
onflict of Interest.
T
he Recipient certifies that its owners, officers, directors, agents, representatives, and employees are in co
mpliance with applicable state and federal co
nflict of interest laws.
C
.3.11 C
ontinuous Use of Project; No Lease, Sale, Transfer of Ownership, or Disposal of Project.
T
he Recipient agrees that, except as provided in this Agreement, it will not abandon, substantially d
iscontinue use of, lease, sell, transfer ownership of, or d ispose of all or a significant part or portion of the
P
roject during the U
seful Life o
f the Project without prior written approval of the Division. Such approval m
ay be conditioned as determined to be appropriate by the Division, including a condition requiring r
epayment of all disbursed Project Funds or all or any portion of all remainin g funds cove
red by this
A
greement together with accrued interest and any penalt
y assessments that may be due.
C.3
.12 D
ata Management.
T
he Recipient will undertake appropriate data management activities so that Project data can be in
corporated into statewide data systems.
C.3
.13 D
isputes.
(
a) T
he Recipient may appeal a staff decision within 30 days to the Deputy Director of the Division or d
esignee, for a final Division decision. The Recipient may appeal a final Division decision to the State W
ater Board within 30 days. The Office of the C
hief Counsel of the State Water Board will prepare a
su
mmary of the dispute and make recommendations relative to its final resolution, which will be provided to
the State Water Board’s Executive Director and each State Water Board Member. Upon the motion o f
a
ny State Water Board Member, the State Water Board will review and resolve the dispute in the manner d
etermined by the State Water Board. Should the State Water Board determine not to review the final D
ivision decision, this decision will represent a fin
al agency action on the dispute.
(
b) T
his clause does not preclude consideration of legal questions, provided that nothing herein shall be co
nstrued to make final the decision of the State Water Board, or any official or representative thereof, o
n any question of law.
(
c) R
ecipient m
ust co
ntinue with the responsibilities under this Agreement during any dispute.
(
d) T
his section relating to disputes does not establish an exclusive procedure for resolving claims w
ithin the m
eaning of Government Code sections 930 and 930.4.
C
.3.14 [Re
served].
C
.3.15 E
nvironmental Clearance.
(
a) No work that is subject to CEQA or NEPA may proceed under this Agreement unless the State Water B
oard has provided environmental clearance. The State Water Board may require changes in the scope o
f work or additional mitigation as a condition to providin g construction or implementation funding under
th
is Agreement. R
ecipient shall not perform any work subject to CEQA and/or NEPA before the State W
ater Board completes its environmental review and specifies any changes in scope or additional Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 27 o
f xx
E
xhibit C
m
itigation that may be r
equired. Proceeding with work subject to CEQA and/or NEPA without approval by th
e State Water Board shall constitute a breach of a material provision of this Agreement. (
b) If
this Project includes modification o
f a river or stream channel, the Recipient m
ust fully mitigate
e
nvironmental impacts resulting from the modification. The R ecipient m
ust provide documentation that
th
e environmental impacts resulting from such modification will be fully mitigated considering all of the im
pacts of the modification and any mitigation, environmental enhancement, and environmental benefit r
esulting from th
e Project, and whether, on balance, any environmental enhancement or benefit equa ls or
e
xceeds any negative environmental impacts of the Project.
C.3
.16 G
overning Law.
T
his Agreement is governed by and shall be interpreted in accordance with the laws of the State of C
alifornia.
C.3
.17 In
come Restrictions.
T
he Recipient agrees that any refunds, rebates, credits, or other amounts (including any interest thereon) a
ccruing to or received by the Recipient under this Agreement m ust b
e paid by the Recipient to the State
W
ater Board, to the extent that they are properly allocable to costs for which the Recipient has been r
eimbursed by the State Water Board under this Agreement.
C
.3.18 In
demnification and State Reviews.
T
he parties agree that review or approval of Project plans and specifications by the State Water Board is fo
r administrative purposes only,
including conformity with application and eligibility criteria, and expressly n
ot for the purposes of design defect review or construction feasibility, and does not relieve the Recipient o
f its responsibility to properly plan, design, construct, operate, a nd maintain the Project. To the extent
p
ermitted b
y law, the Recipient agrees to indemnify, defend, and hold harmless the State Water Board,
th
e Bank, and any trustee, and their officers, employees, and agents for the Bonds, if any (collectively, "
Indemnified Persons"), against any loss or liability arising out of any claim or action brought against any In
demnified Perso
ns fr
om and against any and all losses, claims, damages, liabilities, or expenses, of e
very conceivable kind, character, and nature whatsoever arising out of, resulting from, or in any way co
nnected with (1) the System or the Project or the conditions, occu pancy, use, possession, conduct, or
m
anagement of, work done in or about, or the planning, design, acquisition, installation, or construction, o
f the System or the Project or any part thereof; (2) the carrying out of any of the transactions co
ntemplated b
y this Agreement or any related document; (3) any violation of any applicable law, rule or r
egulation, any environmental law (including, without limitation, the Federal Comprehensive E
nvironmental Response, Compensation and Liability Act, the Resource Con servation and Recovery Act,
th
e California Hazardous Substance Account Act, the Federal Water Pollution Control Act, the Clean Air A
ct, the Toxic Substances Control Act, the Occupational Safety and Health Act, the Safe Drinking Water A
ct, the California Ha
zardous Waste Control Law, and California Water Code Section 13304, and any su
ccessors to said laws), rule or regulation or the release of any toxic substance on or near the System o r
th
e Project;
or (4) any untrue statement or alleged untrue statement of a ny material fact or omission or
a
lleged omission to state a material fact necessary to make the statements required to be stated therein, in
light of the circumstances under which they were made, not misleading with respect to any information p
rovided by th
e Recipient for use in any disclosure document utilized in connection with any of the tr
ansactions contemplated by this Agreement, except those arising from the gross negligence or willful m
isconduct of the Indemnified Persons. The Recipient m
ust a
lso p
rovide for the defense and
in
demnification of the Indemnified Pe
rsons
in any contractual provision extending indemnity to the R
ecipient in any contract let for the performance of any work under this Agreement, and m ust ca
use the
In
demnified Pe
rsons
to be included within the scope of any provision for the indemnification and defense o
f the Recipient in any contract or subcontract. To the fullest extent permitted by law, the Recipient a
grees to pay and discharge any judgment or award entered or made a gainst In
demnified Persons with
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 28 o
f xx
E
xhibit C
r
espect to any such claim or action, and any settlement, compromise or other voluntary resolution. The pr
ovisions of this section su
rvi
ve the term of this Agreement.
C
.3.19 In
dependent Actor.
T
he Recipient, and its agents and employees, if any, in the performance of this Agreement, shall act in an in
dependent capacity and not as officers, employees, or agents of the State Water Board.
C
.3.20 In
tegration.
T
his Agreement constitutes the complete and final agreement b etween the parties. No oral or written
u
nderstanding or agreement not i
ncorporated in this Agreement shall be binding on either party.
C
.3.21 L
everaging Covenants.
(
a) N
otwithstanding any other provision hereof, the Recipient covenants and agrees th at it will
co
mply with the Tax Covenants set forth in Exhibit F of this Agreement.
(
a) T
he Recipient covenants to furnish such financial, operating and other data pertaining to the R
ecipient as may be requested by the State Water Board to: (i) enable the State Water Board to ca
use the issuance of Bonds and provide for security therefor; or (ii) enable any underwriter of
B
onds issued for the benefit of the State Water Board to comply with Rule 15c2-1 2(b)(5).
(
b) T
he Recipient further covenants to provide the State Water Board with copies of all continuing d
isclosure documents or reports that are disclosed pursuant to (i) the Recipient’s continuing d
isclosure undertaking or undertakings made in connection with any o utstanding System Obligation,
(
ii) the terms of any outstanding System Obligation, or (iii) a voluntary disclosure of information r
elated to an outstanding System Obligation. The Recipient must disclose such documents or r
eports to the State Water Board a
t the same time such documents or reports are submitted to any d
issemination agent, trustee, nationally recognized municipal securities information repository, the M
unicipal Securities Rulemaking Board’s Electronic Municipal Market Access (EMMA) website or o
ther person or entity.
C
.3.22 N
o Discrimination.
(
a) T
he Recipient m
ust co
mply with Government Code section 11135 and the implementing regulations (
Cal. Code Regs, tit. 2, § 11140 et seq.), including, but not limited to, ensuring that no person is unlawfully d
enied full and equal access to the benefits of, or unlawfully subject ed to discrimination in the operation
o
f, the Project or System on the basis of sex, race, color, religion, ancestry, national origin, ethnic group id
entification, age, mental disability, physical disability, medical condition, genetic information, marita l
st
atus, or sexual orientation as such terms are defined under California law, for as long as the Recipient r
etains ownership or possession of the Project.
(
b) If
Project Funds are used to acquire or improve real property, the Recipient m ust in
clude a covenant
o
f nondiscrimination running with the land in the instrument effecting or recording the transfer of such real p
roperty.
(
c) T
he Recipient m
ust co
mply with the federal American with Disabilities Act of 1990 and implementing r
egulations as required by Government Code section 11135(b).
(
d) T
he Recipient’s obligations under this section shall survive the term of this Agreement.
(
e) D
uring the performance of this Agreement, Recipient and its contractors and subcontractors must n
ot
u
nlawfully discriminate, harass, or allow harassment against any employee or applicant for employment b
ecause of sex, race, color, ancestry, religious creed, national origin, sexual orientation, physical Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 29 o
f xx
E
xhibit C
d
isability (including HIV and AIDS), mental disability, medical condition (cancer), age (over 40), marital st
atus, denial of family care leave, or genetic information, gender, gender identity, gender expression, or m
ilitary and veteran status.
(
f) T
he Recipient, its contractors, and subcontractors m
ust e
nsure that the evaluation and treatment of
th
eir employees and applicants for employment are free from such discrimination and harassment.
(
g) T
he Recipient, its contractors, and subcontractors m
ust c
omply with the provisions of the Fair
E
mployment and Housing Act and the applicable regulations promulgated thereunder. (Gov. Code, §
12990, subds. (a)-(
f) et seq.;Cal. C
ode Regs., tit. 2, § 7285 et seq.) Such regulations are incorporated in
to this Agreement by reference and made a part hereof as if set forth in full.
(
h) T
he Recipient, its contractors, and subcontractors must comply with all applicable federal civil rights r
egulations, including statutory and national policy r
equirements. (
2 CFR § 200.
300). This includes, to the
g
reatest extent practicable and to the extent permitted by law, the requirement to respect and protect the fr
eedom of persons and organizations to engage in political and religious speech. (Executive Order 1 3798).
(
i) T
he Recipient, its contractors, and subcontractors m
ust g
ive written notice of their obligations under
th
is clause to labor organizations with which they have a collective bargaining or other agreement.
(
j) T
he Recipient m
ust in
clude the nondiscrimination and compliance provisions of this clause in all su
bcontracts to perform work under this Agreement.
C
.3.23 N
o Third Party Rights.
T
he parties to this Agreement do not create rights in, or grant remedies to, any third party as a beneficiary o
f this Agreement, or of any duty, covenant, obligation, or undertaking established herein.
C
.3.24 N
o Obligation of the State.
A
ny obligation of the State Water Board herein contained shall not be an obligation, debt, or liability of the S
tate and any such obligation shall be payable solely out of the moneys encumbered pursuant to this A
greement.
C.3
.25 N
otice.
U
pon the occurrence of any of the following events, the Recipient m ust p
rovide notice as set forth b
elow.
(
a) W
ithin 24 hours of the f
ollowing, th
e Recipient must notify the Division b
y phone at (
916)
327-9
978 a
nd by email to [P
M email address and senior email address] a
nd
C
[email protected] o
f:
i. T
he seizure of, or levy on, any Revenues securing this Agreement; ii. A
ny discovery of any potential tribal cultural resource, archaeological o r historical
r
esource, or human remains in the Project area (also notify the Division’s Senior C
ultural Resources Officer, L
[email protected] o
r (916) 323-
0 626). Should a potential tribal cultural resource or archaeological or historical r
esource be discovered during construction or Project implementation, the R
ecipient must ensure that all work in the area of the find will cease until a q
ualifie
d archaeologist has evaluated the situation and made recommendations r
egarding preservation of the resource, and the Division has determined what a
ctions should be taken to protect and preserve the resource. The Recipient m
ust implement appropriate actio
ns as directed by the Division. If
there are any
a
pplicable provisions of a mitigation, monitoring and reporting program adopted fo
r the Project, the Recipient shall comply with such provisions. In the event of Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 30 o
f xx
E
xhibit C
th
e discovery of human remains during construction of the Project, the Recipient sh
all cease construction and take other action required by any applicable laws, w
hich may in
clude but are not limited to Health and Safety Code, section 7050.5 a
nd Public Resources Code, section 5097.98.
(
b) [Re
served].
(
c) W
ithin five (5) business days,
the Recipient must notify the Division b
y phone at (
916)
327-9
978; b
y email to L
[email protected] [P
M email address and senior
e
mail address] a
nd
C
[email protected]; a
nd b
y mail to the contact address set forth in
S
ection 4 of this Agreement o
f the occurrence of any of the following events:
i. B
ankruptcy,
insolvency, receivership or similar event of the Recipient, or actions ta
ken in anticipation of any of the foregoing;
ii. C
hange of o
wnership o
f the Project or the System or change of management or
se
rvice contracts, if any, for operation of the System;
iii. L
oss, theft, damage, or impairment to Project, the Revenues or the System; iv
. F
ailure to meet any debt service coverage test in Exhibit B of this Agreement; v. D
raws on the Reserve Fund;
vi
. L
isted Events and Events of Default, except as otherwise set forth in this section; vi
i. F
ailure to observe or perform any covenant or comply with any condition in this A
greement;
vi
ii. A
n offer from a public entity to purchase the Project or the System or any portion th
ereof, or any of the real or personal property related to or necessary for the P
roject;
ix
. A
proceeding or action by a public entity to acquire the Project or the System by p
ower of eminent domain;
x. In
currence of a System Obligation or other Material Obligation by the Recipient; or
xi
. A
default, event of acceleration, termination event, modification of terms, or other si
milar event under the terms of a S
ystem Obligation or other Material Obligation
o
f the Recipient, any of which reflect financial difficulties.
(
d) W
ithin ten (10) business days, th
e Recipient m
ust n
otify the Division b
y phone at (
916)
327-9
978,
by email to [P
M email address and senior email address] and
C
[email protected], a
nd by mail to the contact address set forth in
S
ection 4 of this Agreement o
f the following e
vents:
i. M
aterial defaults on Material Obligations, other than this Obligation; ii. U
nscheduled draws on material debt service reserves or credit enhancements, r
eflecting financial difficulties;
iii. S
ubstitution o
f credit or liquidity providers, if any or their failure to perform; iv
. A
ny litigation pending or threatened with respect to the Project or the Recipient’s te
chnical, managerial or financial capacity to operate the System or the R
ecipient’s continued existence, or any judgment or court order relating to such li
tigation that has
a significant effect on the Project or the System;
v. C
irculation of a petition to repeal, reduce, or otherwise challenge the Recipient’s r
ates for services of the System;
vi
. C
onsideration of dissolution, or disincorporation, or any other event that could m
aterially impair the Revenues;
vi
i. A
dverse tax opinions, the issuance by the Internal Revenue Service or proposed o
r final determinations of taxability, Notices of Proposed Issue (IRS Form 5701- T
EB) or other material notices of determinations with respect to the tax status of a
ny tax-e
xempt b
onds;
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 31 o
f xx
E
xhibit C
vi
ii. R
ating changes on outstanding System Obligations, if any; ix
. E
nforcement actions by or brought on behalf of the State Water Board or R
egional Water Board; or
x. A
ny investigation by the District Attorney, California State Auditor, Bureau of S
tate Audits, U
SEPA’s
Office of Inspector General, the Internal Revenue
S
ervice, Securities and Exchange Commission, a grand jury, or any other state o
r federal agency, relating to the Recipient’s financial management, accounting p
rocedures, or internal fiscal controls;
(
e) T
he Recipient m
ust n
otify the Division promptly b
y phone at (
916) 327-9
978,
by email to
[P
M email address and senior email address] and C
[email protected],
a
nd by mail to the contact address set forth in Section 4 of this Agreement o f any of the
fo
llowing events:
i. T
he discovery of a false statement of fact or representation made in this A
greement or in the application to the Division for this financial assistance, or in a
ny certification, report, or request for r
eimb
ursement made pursuant to this
A
greement, by the Recipient, its employees, agents, or contractors; ii. A
ny substantial change in scope of the Project. The Recipient m ust u
ndertake no
su
bstantial change in the scope of the Project until prompt written notice of the p
roposed change has been provided to the D
ivision and the Division has given
w
ritten approval for the change;
iii. C
essation of all major construction work on the Project where such cessation of w
ork is expected to or does extend for a period of thirty (30) days or more; iv
. A
ny circumstance, combination of circumstances, or condition, which is expected to
or does delay Completion of Construction for a period of ninety (90) days or m
ore;
v. D
iscovery of any unexpected endangered or threatened species, as defined in th
e federal Endangered Species Act. S
hould a federally protected species be
u
nexpectedly encountered during construction of the Project, the Recipient a
grees to promptly notify the
Division. T
his notification is in addition to the
R
ecipient’s obligations under the federal Endangered Species Act; vi
. A
ny Project monitoring, demonstration, or other implementation a ctivities
r
equired in Exhibit A or Exhibit D of this Agreement, if any; vi
i. A
ny public or media event publicizing the accomplishments and/or results of this A
greement and provide the opportunity for attendance and participation by state a
nd federal r
epresentatives with a
t least ten (10) working days’ notice t
o the
D
ivision;
vi
ii. A
ny allegation of research misconduct involving research activities that are su
pported in whole or in part with USEPA funds under this Project, as required b
y Exhibit C.4.3(xxvii);
ix
. A
ny events requiring notice to the Division pursuant to the provisions of this A
greement;
x. C
ompletion of Construction of the Project, and actual Project Completion; xi
. T
he award of the prime construction contract for the Project; xi
i. In
itiation of construction of the Project.
C
.3.26 O
peration and Maintenance; Insurance.
T
he Recipient agrees to sufficiently and properly staff, operate and maintain all portions of the System d
uring the Useful Life of the Project in accordance with all applicable state and federal laws, rules, and r
egulations.
T
he Recipient will procure and maintain or cause to be maintained insurance on the System with r
esponsible insurers, or as part of a reasonable system of self-in surance, in such amounts and against
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 32 o
f xx
E
xhibit C
su
ch risks (including damage to or destruction of the System) as are usually covered in connection with syst
ems similar to the System. Such insurance may be maintained by a self-in surance plan so long as
su
ch plan provides for (i) th
e establishment by the R
ecipient of a separate segregated self-in
surance fund
in
an amount determined (initially and on at least an annual basis) by an independent insurance co
nsultant experienced in the field of risk management employing accepted actuarial techniques and (
ii) th
e establishment and maintenance of a claims processing and risk management program.
In
the event of any damage to or destruction of the System caused by the perils covered by such in
surance, the net proceeds thereof shall be applied to the reconstruction, repair or replacement of the d
amaged or destroyed portion of the System. The Recipie nt m
ust b
egin such reconstruction, repair or
r
eplacement as expeditiously as possible, and m
ust p
ay out of such net proceeds all costs and expenses
in
connection with such reconstruction, repair or replacement so that the same m ust b
e completed and
th
e Syst
em m
ust b
e free and clear of all claims and li
ens. If such net proceeds are insufficient to
r
econstruct, repair, or restore the System to the extent necessary to enable the Recipient to pay all r
emaining unpaid principal portions of the Payments, if any, in accordance with the terms of this A
greemen
t, the Recipient must provide additional funds to restore or replace the damaged portions of the S
ystem.
R
ecipient agrees that for any policy of insurance concerning or covering the construction of the Project, it w
ill cause, and will require its contractors and subcontractors to cause, a certificate of insurance to be is
sued showing the State Water Board, its
officers, agents, employees, and servants as additional in
sured; and m
ust p
rovide the Division with a copy of all such certificates prior to the commencement of co
nstruction of the Project.
C
.3.27 P
ermits, Subcontracting, and Remedies.
R
ecipient m
ust p
rocure all permits, licenses and other authorizations necessary to accomplish the work co
ntemplated in this Agreement, pay all charges and fees, and give all notices necessary and incidental to
the due and lawful prosecution of the work. Signed copies of any such permits or licenses m
ust be
su
bmitted to the Division before any co
nstruction begins.
T
he Recipient m
ust n
ot contract or allow subcontracting with excluded parties. The Recipient m ust n
ot
co
ntract with any party who is debarred or suspended or otherwise excluded from or ineligible for p
articipation in any work overseen, directed, funded, or administered by the State Water Board program fo
r which this funding is authorized. For any work
related to this Agreement, the Recipient m
ust n
ot
co
ntract with any individual or organization on the State Water Board’s List of Disqualified Businesses a
nd Persons that is id
entified as debarred or suspended or otherwise excluded from or ineligible for p
articipation in any work overseen, directed, funded, or administered by the State Water Board program fo
r which funding under this Agreement is authorized. The State Water Bo ard’s List of Disqualified
B
usinesses and Persons is located at
h
ttp://www.waterboards.ca.gov/water_issues/programs/enforcement/fwa/dbp.shtml
C
.3.28 P
rofessionals.
T
he R
ecipient a
grees that only licensed professionals will be used to perform services under this A
greement where such services are called for. All technical reports required pursuant to this Agreement th
at involve planning, investigation, evaluation, design, or other w ork requiring interpretation and proper
a
pplication of engineering,
architectural, o
r geologic sciences, shall be prepared by or under the direction o
f persons registered to practice in California pursuant to Business and Professions Code, se ctions
5 536.1, 6
735, 7835, and 7835.1. To demonstrate compliance with California Code of Regulations, title 16, se
ctions 415 and 3065, all technical reports must contain a statement of the qualifications of the r
esponsible registered professional(s). As required by these laws, completed technical reports must bear
th
e signature(s) and seal(s) of the registered professional(s) in a manner such that all work can be clearly a
ttributed to the professional responsible for the work.
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 33 o
f xx
E
xhibit C
C
.3.29 P
revailing Wages.
T
he Recipient agrees to be bound by all applicable provisions of State Labor Code regarding prevailing w
ages. The Recipient m
ust m
onitor all agreements subject to reimbursement from this Agreement to e
nsure that the prevailing w
age provisions of the State Labor Code are being met.
In
addition, the Recipient agrees to comply with the Davis-B acon provisions incorporated by reference in
S
ection 3 of this Agreement.
C
.3.30 P
ublic Funding.
T
his Project is publicly funded. Any service provider or contractor with which the Recipient contracts m ust
n
ot have any role or relationship with the Recipient, that, in effect, substantially limits the Recipient's a
bility to exercise its rights, including cancellation rights, under the contract, based on all the facts and ci
rcumstances.
C
.3.31 R
ecipient’s Responsibility for Work.
T
he Recipient shall be responsible for all work and for p ersons or entities engaged in work performed
p
ursuant to this Agreement, including, but not limited to, contractors, subcontractors, suppliers, and p
roviders of services. The Recipient shall be responsible for responding to any and all disputes arising ou
t of its contracts for work on the Project. The State Water Board will not mediate disputes between the R
ecipient and any other entity concerning responsibility for performance of work.
C
.3.32 R
elated Litigation.
U
nder no circumstances may the Recipient use funds from any r eimb
ursement under this Agreement to
p
ay costs associated with any litigation the Recipient pursues against the State Water Board or any R
egional Water Quality Control Board. Regardless of the outcome of any such litigation, and n
otwithstanding any conflictin
g language in this Agreement, the Recipient agrees to repay all of the d
isbursed funds plus interest in the event that Recipient does not complete the project.
C
.3.33 R
ights in Data.
T
he Recipient agrees that all data, plans, drawings, specifications, reports, computer programs, operating m
anuals, notes, and other written or graphic work produced in the performance of this Agreement are su
bject to the rights of the State as set forth in
this section. The State shall have the right to reproduce, p
ublish, and use all such work, or any part thereof, in any manner and for any purposes whatsoever and to
authorize others to do so. If any such work is copyrightable, the Recipient may copyrigh t the same,
e
xcept that, as to any work which is copyrighted by the Recipient, the State reserves a royalty-f ree,
n
onexclusive, and irrevocable license to reproduce, publish, and use such work, or any part thereof, and to
authorize others to do so, and to r
eceive electronic copies from the Recipient upon request.
C
.3.34 S
tate Water Board Action; Costs and Attorney Fees.
A
ny remedy provided in this Agreement is in addition to and n ot in derogation of any other legal or
e
quitable remedy available to the State Water Board as a result of breach of this Agreement by the R
ecipient, whether such breach occurs before or after completion of the Project, and exercise of any r
emedy provided b
y this Agreement by the State Water Board shall not preclude the State Water Board fr
om pursuing any legal remedy or right which would otherwise be available. In the event of litigation b
etween the parties hereto arising from this Agreement, it is agreed th at each party shall bear its own
co
sts and attorney fees.
C
.3.35 T
imeliness.
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 34 o
f xx
E
xhibit C
T
ime is of the essence in this Agreement.
C
.3.36 U
nenforceable Provision.
In
the event that any provision of this Agreement is unenforceable or held to be unenforceable, then the p
arties agree that all other provisions of this Agreement have force and effect and shall not be affected th
ereby.
C
.3.37 V
enue.
A
ny action arising out of this Agreement shall be filed and maintained in the Superior Court in and for the C
ounty of Sacramento, California.
C
.3.38 W
aiver and Rights of the State Water Board.
A
ny waiver of rights by the State Water Board with respect to a default or other matter arising under this A
greement at any time shall not be considered a waiver of rights with respect to any other default or
m
atter. A
ny rights and remedies of the State Water Board provided for in this Agreement are in addition to
any other rights and remedies provided by law.
C
.4 MISCELLANEOUS STATE AND FEDERAL REQUIREMENTS
C
.4.1 [Re
served].
C
.4.2 S
tate Cross-C
utters.
R
ecipient represents that, as applicable, it complies and covenants to maintain compliance with the fo
llowing with respect to all Project Costs for the term of this Agreement:
i. T
he California Environmental Quality Act (CEQA), as set forth in Public Resources Code 21000 e
t seq. and in the CEQA Guidelines at Title 14, Division 6, Chapter 3, Section 15000 et seq.
ii. W
ater Conservation r
equirements, including regulations in D
ivision 3 of Title 23 of the California
C
ode of Regulations.
iii. Mon
thly Water Diversion Reporting requirements, including requirements set forth in W ater Code
se
ction 5103.
iv
. P
ublic Works Contractor
Registration with Department of
Industrial Relations r
equirements,
in
cluding requirements set forth in Sections 1725.5 and 1771.1 of the Labor Code.
v. V
olumetric Pricing & Water Meters requirements, including the requirements of Water Code se
ctions 526 and 527.
vi
. U
rban Water Management Plan r
equirements, including t
he Urban Water Management Planning
A
ct (Water Code, § 10610 et seq.).
vi
i. U
rban Water Demand Management requirements, including the requirements of Section 1 0608.56 of the Water Code.
vi
ii. D
elta Plan Consistency Findings requirements, including the requirements of Water Code section 8 5225 and California Code of Regulations, title 23, section 5002.
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 35 o
f xx
E
xhibit C
ix
. A
gricultural Water Management Plan Consistency r
equirements,
including the requirements of
W
ater Code section 10852.
x. C
harter C
ity Project Labor Requirements, including the requirements of L abor Code section 1782
a
nd Public Contract Code se
ction 2503.
xi
. T
he Recipient a
grees that it will, at all times, comply with and require its contractors and su
bcontractors to comply with directives or orders issued pursuant to Division 7 of the Water C
ode.
xi
i. R
egulations in Division 4 of Title 22 of the California Code of Regulations, including but not li
mited to California Waterworks Standards in Chapter 16, and Lead and Copper regulations in C
hapter 17.5.
C
.4.3 F
ederal Requirements and Cross-C
utters for SRF Funding.
T
he Recipient acknowledges, warrants compliance with, and covenants to continuing compliance with the fo
llowing federal terms and conditions with respect to all Project Costs for the term of this Agreement and fo
r the Useful Life of the Project:
i. U
nless the Recipient has obtained a waiver from USEPA on file with the State Water Board or u
nless this Project is not a project fo
r the construction, alteration, maintenance or repair of a p
ublic water system or treatment work, the Recipient shall not purchase “iron and steel products” p
roduced outside of the United States on this Project. U nless the Recipient has obtained a
w
aive
r from USEPA on file with the State Water Board or unless this Project is not a project for th
e construction, alteration, mainte
nance or repair of a public water system or treatment work, the R
ecipient hereby certifies that all “iron and steel products” used in the Project were or will be p
roduced in the United States. For purposes of this section, the term "iron and steel products"
m
eans the following products made primarily of iron or steel: lined or unlined pipes and fittings, m
anhole covers and other municipal castings, hydrants, tanks, flanges, pipe clamps and r
estraints, valves, structural steel, reinforced precast concrete, a nd construction materials.
“
Steel” means an alloy that includes at least 50 percent iron, between .02 and 2 percent carbon, a
nd may include other elements.
ii. T
he Recipient acknowledges that funds received under this Agreement are subject to the Build A
merica Buy America (BABA) requirements of Public Law 117-5 8 (the In
frastructure Investment
a
nd Jobs Act, also known as the Bipartisan Infrastructure Law (BIL), signed into law on N
ovember 15, 2021), which are in addition to “iron and steel products” requirements described in se
ction C.4.3 (i) above. S
pecifically, unless
(1) the Recipient has requested and obtained a
w
aiver from USEPA on file with the State Water Board pertaining to the Project or the Project is o
therwise covered by a general applicability waiver, as confirmed in writing by the State Water B
oard; or (2) th
e State Water Board and, to the extent the Project is co-f unded by any other
a
gency u
sing federal funds subject to BABA requirements, each such agency, h as advised the
R
ecipient in
writing that the BABA requirements are not applicable to the Project, the Recipient sh
all ensure and certifies that, as these terms are defined within and made applicable by Public L
aw 117-58:
(
a) all iron and steel used in the Project are produced in the United States; (
b) the manufactured products used in the Project are produced in the United States; and (
c) the construction materials used in the Project are produced in the United States.
T
he Recipient must comply and require its contractors and subcontractors to comply with all a
pplicable BABA requirements a
nd reporting a
nd must inform the State Water Board immediately
o
f any information regarding a violation of the foregoing.
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 36 o
f xx
E
xhibit C
B
ased on representations made by the Recipient and corresponding evidence on file with the S
tate Water Board, the Project q
ualifies for a waiver according to the “
Amended Public Interest
W
aiver of Section 70914(a) of P.L. 117-5
8, Build America, Buy America Act, 2021 for State
R
evolving Fund and Water Infrastructure Projects that Initiated Design Planning prior to May 14, 2 022”, found at h
ttps://www.epa.gov/system/files/documents/2023-1
1/epa-a
mend-sr
f-d
esign-
p
lanning-w
aiver2.pdf. T
his waiver applies to ce
rtain p
rojects that have initiated project design
p
lanning prior to May 14, 2022, the statutory effective date of the BABA requirements, and p
ermits the use of non-d
omestic manufactured products and construction materials that would o
therwise be prohibited under th
e BABA requirements.
T
o utilize this waiver, the Recipient shall include a list of up to 10 significant manufactured p
roducts or construction materials likely subject to this waiver that will be used for the Project in th
e Project progress reports submitted to the Division.
T
his program waiver does not waive the iron and steel requirements under BABA. Sections 7 0917(a) and (b) of BIL provide a savings provision for existing statutory requirements that meet o
r exceed BABA requirements, such as the “iron and steel products” requ irements applicable to
S
RF funded projects referenced in section C.4.3 (i) above, which will continue to apply as part of B
ABA requirements.
iii. T
he Recipient must include in full the W
age Rate Requirements (Davis-B
acon) la
nguage
in
corporated by r
eference in Section 3 of this Agreement i
n all co
nstruction c
ontracts and
su
bcontracts.
iv
. T
he Recipient must comply with the signage requirements set forth in Exhibit A.
v. T
he Recipient shall notify the State Water Board and the USEPA contact of public or media e
vents publicizing the accomplishment of significant events related to this Project a nd provide the
o
pportunity for attendance and participation by federal representatives with at least ten (10) w
orking days’ notice.
vi
. T
he Recipient shall comply with applicable USE
PA general terms and conditions found at:
h
ttps://www.epa.gov/grants/epa-g
eneral-te
rms-and-co
nditions-e
ffective-o
ctober-1-2023-or-l
ater.
vi
i. N
o Recipient may receive funding under this Agreement unless it has provided its Unique Entity Id
entifier, assigned by the System for Award Management, to the State Water Board.
vi
ii. T
he Recipient represents and warrants that it and its principals are not excluded or disqualified fr
om participating in this transaction as such terms are defined in Parts 1 80 and 1532 of Title 2 of
th
e C
ode of Federal Regulations (2 CFR). If the Recipient is excluded after execution of this A
greement, the Recipient shall notify the Division within ten (10) d ays and shall inform the
D
ivision of the Recipient’s exclusion in any request for amendment of th is Agreement. The
R
ecipient sh
all comply with Subpar
t C of P
art 180 of 2 CFR, as supplemented by Subpart C of
P
art 1532 of 2 CFR. Such compliance is a condition precedent to the State Water Board’s p
erformance of its
obligations under this Agreement. When entering into a covered transaction a
s defined in Parts 1
80 and 1532 of 2 CFR, the Recipient shall require the other party to the co
vered transaction to comply with Su
bpart C of Part 180 of 2 CFR, a
s supplemented by Subpart
C
of Part 1532 of 2 CFR.
ix
. T
o the extent applicable, the Recipient shall disclose to the State Water Board any potential co
nflict of interest consistent with USEPA’s Final Financial Assistance Conflict of Interest Policy
a
t h
ttps://www.epa.gov/grants/epas-fin
al-fin
ancial-a
ssistance-co
nflict-in
terest-p
olicy.
A conflict of
in
terest may result in disallowance of costs.
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 37 o
f xx
E
xhibit C
x. U
SEPA and the State Water Board have the right to reproduce, publish, use and authorize others to
reproduce, publish and use copyrighted works or other data developed under this assistance a
greement.
xi
. W
here an invention is made with Project Funds, USEPA and the State Water Board retain the r
ight to a worldwide, nonexclusive, nontransferable, irrevocable, paid-u p license to practice the
in
vention owned by the Recipient. The Recipient must utilize the Int eragency Edison extramural
in
vention reporting system at h
ttp://iEdison.gov a
nd shall notify the Division when an invention
r
eport, patent report, or utilization report is filed.
xi
i. T
he Recipient agrees that any reports, documents, publications or other materials developed for p
ublic distribution supported by this Agreement shall contain the D isclosure statement set forth in
E
xhibit A.
xi
ii. T
he Recipient a
cknowledges that it is
encouraged to follow guidelines established under Section 5 08 of the Rehabilitation Act, codified at 36 CFR Part 1194, with respect to enabling individuals w
ith disabilities to participate in its programs supported by this Project.
xi
v. T
he Recipient, its employees, contractors and subcontractors and their employees w arrants that
it
will n
ot engage in severe forms of trafficking in persons, procure a commercial sex act during th
e term of this Agreement, or use forced labor in the performance of this Agreement. The R
ecipient must include this provision in its contracts and subcontracts unde r this Agreement. The
R
ecipient must inform the State Water Board immediately of any information regarding a violation o
f the foregoing. The Recipient u
nderstands that failure to comply with this provision may subject th
e State Water Board to loss of federal funds. The Recipient agrees to compensate the State W
ater Board for any such funds lost due to its failure to comply with this condition, or the failu re of
its
contractors or subcontractors to comply with this condition. The State Water Board may u
nilaterally terminate this Agreement if the Recipient that is a private entity is determined to have vi
olated the foregoing.
xv. Th
e Recipient certifies to t
he best of its knowledge and b
elief that:
a. N
o federal appropriated funds have been paid or will be
paid, by or on behalf of the
R
ecipient, to any person for influencing or attempting to influence an officer or employee o
f any agency, a Member of Congress, an office
r or employee of Congress, or an
e
mployee of a Member of Congress in connection with the awarding of any federal co
ntract, the making of any federal grant, the making of any federal loan, the entering into o
f any cooperative agreement, and the extension, continuation, renewal, a mendmen
t, o
r
m
odification of any federal contract, grant, loan, or cooperative a greement.
b. If
any funds other than federal appropriated funds have been paid or will be paid to any p
erson for influencing or attempting to influence a
n officer or employee of any a
gency, a
M
ember of Congress in connection with this Agreement, the Recipient shall complete and su
bmit Standard Form-L
LL, “Disclosure Form to Report Lobbying,” in
accordance with its
in
structions, and notify the State Water Board.
T
he Recipient shall require this certification from a
ll parties to any contract or a
greement that the
R
ecipient enters into and under which th
e Recipient incurs costs for w
hich it seeks
r
eimb
ursements under this Agreement.
xvi
. T
he Recipient must comply with the following federal non-d iscrimination requirements:
a. T
itle VI of the Civil Rights Act of 1964, which prohibits discrimination based on race, co
lor, and national origin, including limited English proficiency (LEP). b. S
ection 504 of the Rehabilitation Act of 1973, which prohibits discrimination against p
ersons with disabilities.
c. T
he Age Discrimination Act of 1975, which prohibits age discrimination.
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 38 o
f xx
E
xhibit C
d. S
ection 13 of the Federal Water Pollution Control Act Amendments of 1972, which p
rohibits discrimination on th
e basis of sex.
e. 4
0 CFR Part 7, as it relates to the foregoing.
xvi
i. If
the Project relates to construction of a publicly owned treatment works, where the Recipient co
ntracts for program management, construction management, feasibility studies, preliminary e
ngineering, design, engineering, surveying, mapping, or architectural related services, the R
ecipient shall ensure that any such contract is negotiated in the same manner as a contract for a
rchitectural and engineering services is negotiated under chapter 1 1 of title 40, United States
C
ode, or an equivalent State qualifications-b
ased requirement as determined by the State Water
B
oard.
xvi
ii. If
the Project relates to construction of a publicly owned treatment works, the Recipient certifies th
at it has developed and is implementing a fiscal sustainability plan for the Project, except as set fo
rth in Exhibit D, that includes an inventory of critic
al assets that are a part of the Project, an
e
valuation of the condition and performance of inventoried assets or asset groupings, a ce
rtification that the Recipient has evaluated and will be implementing water and energy co
nservation efforts as part of th
e plan, and a plan for maintaining, repairing, and, as necessary, r
eplacing the Project and a plan for funding such activities.
xi
x. T
he Recipient agrees to comply with the requirements of USEPA’s Program for Utilization of S
mall, Minority and Women’s Business Enterprises.
xx. P
rocurement Prohibitions under Section 306 of the Clean Air Act and Section 508 of the Clean W
ater Act, including Executive Order 11738, Administration of the Clean Air Act and the Federal W
ater Pollution Control Act with Respect to Federal Contracts, Grants , or Loans; 42 USC § 7606;
3 3 USC § 1368. Except where the purpose of this Agreement is to remedy the cause of the vi
olation, the Recipient may not procure goods, services, or materials from suppliers excluded u
nder the federal System for Award Managemen
t: sa
m.gov
xxi
. U
niform R
elocation and Real Property Acquisition Policies Act, Pub. L. 91-6 46, as amended; 42
U
SC §§4601-4
655. The Recipient must comply with the Act’s implementing regulations at 49 C
FR 24.101 through 24.105.
xxi
i. T
he Recipient agrees that if its network or information system is connected to USEPA networks to tr
ansfer data using systems other than the Environmental Information Exchange Network or U
SEPA’s Central Data Exchange, it will ensure that any connections are se cure.
xxi
ii. A
ll geospatial data created pursuant to this Agreement that is submitted to the State Water Board fo
r use by USEPA or that is submitted directly to USEPA must be consistent with Federal G
eographic Data Committee endorsed standards. Information on these sta ndards may be found
a
t w
ww.fgdc.gov.
xxi
v. If
the Recipient is a water system that serves 500 or fewer persons, the Recipient represents that it
has considered publicly-o
wned wells as an alternative drinking water supply.
xxv. T
he Recipient represents that it is not a corporation that has any unpaid Federal tax liability that h
as been assessed, for which all judicial and administrative remedies have been exhausted or h
ave lapsed, and that is not being paid in a timely manner pursu ant to an agreement with the
a
uthority responsible for collecting the tax liability; and it is not a corporation that was convicted of a
felony criminal violation under a Federal law within the preceding 24 months.
xxvi
. T
he Recipient agrees to immediately notify the Project Manager in writing about any allegation of r
esearch misconduct involving research activities that are supported in whole or in part with USE
PA funds under this Project, including fabrication, falsification, or plagiarism in proposing, Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 39 o
f xx
E
xhibit C
p
erforming, or reviewing research, or in reporting research results, or ordering, advising, or su
ggesting that subordinates engage in research misconduct.
xxvi
i. T
he Recipient agrees to comply with, and require all contractors and subcontractors to comply w
ith, USE
PA’s Scientific Integrity Policy, available at h
ttps://www.epa.gov/osa/policy-e
pa-
sci
entific-in
tegrity,
when conducting, supervising, and communicating science and when using or a
pplying the results of science. For purposes of this condition scientific activities include, but are n
ot limited to, computer modelling, economic analysis, field sampling, laborato ry experimentation,
d
emonstrating new technology, statistical analysis, and writing a review article on a scientific is
sue.
T
he Recipient shall not suppress, alter, or otherwise impede the timely release of scientific fin
dings or conclusions; intimidate or coerce scientists to alter scientific data, findings, or p
rofessional opinions or exert non-sci
entific influence on scientific
advisory boards; knowingly
m
isrepresent, exaggerate, or downplay areas of scientific uncertainty; or otherwise violate the USE
PA’s Scientific Integrity Policy. The Recipient must refrain from acts of research misconduct, in
cluding publication or reportin
g, as described in USE
PA’s Policy and Procedures for Addressing
R
esearch Misconduct, Section 9.C, and must ensure scientific findings are generated and d
isseminated in a timely and transparent manner, including scientific research performed by co
ntractors and subcontractors.
xxvi
ii. T
he Recipient agrees to comply with the Animal Welfare Act of 1966 (7 USC 2131-2 156).
R
ecipient also agrees to abide by the “U.S. Government Principles for the Utilization and Care of V
ertebrate Animals used in Testing, Research, and Training,” available at h
ttp://grants.nih.gov/grants/olaw/references/phspol.htm#USGovPrinciples.
xxi
x. T
he Recipient certifies that no Project Funds w
ill be used on:
a. V
ideo surveillance or te
lecommunications equipment produced by Huawei Technologies C
ompany or ZTE Corporation (or any subsidiary or a
ffiliate of such entities),
te
lecommunications equipment produced by Hytera Communications Corporation, H
angzhou Hikvision Digital Technology Company, or Dahua Technology Company (or a
ny subsidiary or affiliate of such entities);
b. T
elecommunications or video surveillance services produced by such entities; c. T
elecommunications or video surveillance equipment or services produced or provided b
y an entity that the Secretary of Defense, in consultation with the Director of the National In
telligence or the Director of the Federal Bureau of Investigation, reasonably believes to
b
e an entity owned or controlled by, or otherwise connected to, the government of a co
vered foreign country; or
d. O
ther telecommunications or video surveillance services or equipment in vi olation of 2
C
FR 200.216.
x
xx. T
he Recipient agrees to comply with all fe
deral en
vironmental cr
oss-cu
tters,
including the
fo
llowing:
a. A
rcheological and Historic Preservation Act (16 U.S.C. § 469; 5 4 U.S.C. §§ 312501-
312508)
b. C
lean Air Act Conformity (42 U.S.C. § 7401)
c. C
oastal Barriers Resources Act (16 U.S.C. § 3
501 et seq.)
d. C
oastal Zone Management Act (16 U.S.C. § 1451 e
t seq.)
e. E
ndangered Species Act (16 U.S.C. § 1531 et seq.)
f. F
armland Protection Policy Act (7 U.S.C. § 4201 et seq.) g. F
loodplain Management [Executive Order 11988 (1997), as amended by E
xecutive Order No. 1
2148 (1
979)]
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 40 o
f xx
E
xhibit C
h. M
agnuson-S
tevens Fishery Conservation and Management Act (16 U.S.C. § 1 801 et seq.)
i. N
ational Historic Preservation Act (54 U.S.C. §§ 300101 et seq.) j. S
ole Source Aquifer, section 1424(e) of Safe Drinking Water Act, 42 U.S.C. 300h- 3(e)
k. W
etlands Protection – E
xecutive Order No. 11990 (1977
), as amended by
E
xecutive Order no. 12608 (1997)
l. W
ild and Scenic Rivers Act (16 U.S.C. § 1271 e
t seq.)
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 41 o
f xx
E
xhibit D
E
XHIBIT D – S
PECIAL CONDITIONS
D.1 E
xecutive O
rder N-6-22 — R
ussian Sanctions.
O
n March 4, 2022, Governor Gavin Newsom issued Executive Order N-6-2 2 (the EO) regarding
E
conomic Sanctions against Russia and Russian entities and individuals. “Economic Sanctions” refers to sa
nctions imposed by the U.S. government in response to Russia’s a ctions in Ukraine, as well as any
sa
nctions imposed under state law. The EO directs state agencies to terminate contracts with, and to r
efrain from entering any new contracts with, individuals or entities that are determined to be a target of E
conomic San
ctions. Accordingly, should the State Water Board determine Recipient is a target of E
conomic Sanctions or is conducting prohibited transactions with sanctioned individuals or entities, that sh
all be grounds for termination of this Agreement. The State Wate r Board shall provide Recipient
a
dvance written notice of such termination, allowing Recipient at least 30 calendar days to provide a w
ritten response. Termination shall be at the sole discretion of the State Water Board.
T
he Recipient represents that the Recipient is not a target of economic sanctions imposed in response to R
ussia’s actions in Ukraine imposed by the United States government or the State of California. The R
ecipient is required to comply with the economic s
anctions imposed in response to Russia’s actions in
U
kraine, including with respect to, but not limited to, the federal executive orders identified in California E
xecutive Order N-6-2
2, located at h
ttps://www.gov.ca.gov/wp-co
ntent/uploads/2022/03/3.4.22-R
ussia-
U
kraine-E
xecutive-O
rder.pdf a
nd the sanctions identified on the United States Department of the T
reasury website (h
ttps://home.treasury.gov/policy-is
sues/financial-sa
nctions/sanctions-p
rograms-a
nd-
co
untry-i
nformation/ukraine-r
ussia-r
elated-sa
nctions). T
he Recipient is required to comply with all
a
pplicable reporting requirements regarding compliance with the economic sanctions, including, but not li
mited to, those reporting requirements set forth in California Executive Order N-6-2 2 for all Recipients
w
ith one or more agreements with the State of California with an aggregated value of Five Million Dollars (
$5,000,000) or more. N
otwithstanding any other provision in this Agreement, failure to comply with the e
conomic sanctions and all applicable repor
ting requirements may result in termination of this Agreement.
F
or Recipients with an aggregated agreement value of Five Million Dollars ($5,000,000) or more w
ith the State of California, reporting requirements include, but are not limited to, information r
elated to steps taken in response to Russia’s actions in Ukrain e, including but not limited to:
1. D
esisting from making any new investments or engaging in financial transactions with R
ussian institutions or companies that are headquartered or have their principal place of b
usiness in Russia;
2. N
ot transferring technology to Russia or companies that are headquartered or have their p
rincipal place of business in Russia; and
3. D
irect support to the government and people of Ukraine.
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 42 o
f xx
E
xhibit E
E
XHIBIT E – P
AYMENT SCHEDULE
S
ee the attached preliminary Payment Schedule. The final Payment Schedule will be forwarded to the R
ecipient after all d
isbursements have been paid and construction of the Project has been completed.
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 43 o
f xx
E
xhibit F
E
XHIBIT F – T
AX CERTIFICATE
F.1 P
urpose.
T
he purpose of th
is Exhibit F is
to establish the reasonable expectations of the Recipient regarding the P
roject and the Project Funds, and is intended to be and may be relied upon for purposes of Sections 1 03, 141 and 148 of the Code and as a certification described in Section 1.148-2 (b)(2) of the Treasury
R
egulations. This E
xhibit F se
ts forth certain facts, estimates and circumstances which form the basis for th
e Recipient’s expectation that neither the Project nor the Bond Funded Portion of the Project Funds is to b
e used in a mann
er that would cause the Obligation to be classified as “arbitrage bonds” under Section 1 48 of the Code or “private activity bonds” under Section 141 of the Code.
F.2 T
ax Covenant.
T
he Recipient agrees that it will not take or authorize any action or permit any action within its reasonable co
ntrol to be taken, or fail to take any action within its reasonable control, with respect to the Project w
hich would result in the loss of the excl
usion of interest on the Bonds from gross income for federal in
come tax purposes under Section 103 of the Code.
F.3 G
overnmental Unit.
T
he Recipient is a state or local governmental unit as defined in Section 1.103-1 of the Treasury
R
egulations or an instrumentality thereof (a "Governmental Unit") and is not the federal government or a
ny agency or instrumentality thereof.
F.4 F
inancing of a Capital Project.
T
he Recipient will use the Project Funds to finance capital expenditures it has incurred or will incur for the co
nstruction, reconstruction, installation or acquisition of the Project in accordance with the terms of this A
greement. S
uch e
xpenditures shall not have previously been financed with the proceeds of any other is
sue of indebtedness except for interim financing by the Recipient, the date of maturity, prepayment or r
edemption of which is within thirty (30) days of the date of disbur sement of Project F
unds under this
A
greement. A
ll Project Funds shall be allocated to expenditures by the Recipient within thirty (30) days of th
e date of disbursement, including (if at all) Project Funds allocated to repay interim financing of the R
ecipient. F
or purposes
of this Section F.4, “interim financing” means notes, commercial paper, loans, li
nes of credit and other forms of short-te
rm borrowing.
F.5 O
wnership and Operation of Project.
T
he Recipient exclusively owns and, except as provided in Section F. 12 hereof, operates the Project.
F.6 T
emporary Period.
T
he Recipient reasonably expects that at least eighty-five percent (85%) of the Bond Funded Portion of
th
e Project Funds will be allocated to expenditures for the Project within three (3) years of the earlier of th
e effective date of this Agreement or the d
ate the Bonds are issued ("Applicable Date"). The Recipient h
as incurred, or reasonably expects that it will incur within six (6) months of the Applicable Date, a su
bstantial binding obligation (i.e., n
ot subject to contingencies within the control of the
Recipient or a
r
elated party) to a third party to expend at least five percent (5%) of the Bond Funded Portion of the P
roject Funds on Project Costs. The completion of acquisition, construction, improvement and equipping o
f the Project and the allocation
of the Bond Funded Portion of the Project Funds to Project Costs will p
roceed with due diligence.
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 44 o
f xx
E
xhibit F
F.7 W
orking Capital.
N
o operational expenditures of the Recipient or any related entity are being, have been or will be financed o
r refinanced with Project Funds.
F.8 E
xpenditure of Proceeds.
T
he Bond Funded Portion of the Project Funds shall be used exclusively for the following purposes: (i) R
eimbursement Expend
itures (as defined in Section F.
20 below), (ii) Preliminary Expend
itures (as
d
efined in Section F.2
0 below) in an aggregate amount not exceeding twenty percent (20%) of the Bond F
unded Portion of the Project Funds, (iii) capital expenditures relating to the Project originally paid by the R
ecipient on or after the date hereof, (iv) interest on the Oblig ation through the later of three (3)
years
a
fter the Applicable Date or one (1) year after the Project is placed in service, and (v) initial operating e
xpenses directly associated with the Project in the aggregate amount not more than five percent (5%) of th
e Bond Funded Portion of the Proje
ct Funds.
F.9 P
rivate Use and Private Payments.
N
o portion of the Project Funds or the Project is being, has been or will be used in the aggregate for any a
ctivities that constitute a Private Use (as defined below). No portion of the principal of or interest with r
espect t
o the Payments will be se
cured by any interest in property (whether or not the Project) used for a P
rivate Use or in payments in respect of property used for a Private Use, or will be derived from payments in
respect of property used for a Private Use. "Private Use" means any a ctivity th
at constitutes a trade or
b
usiness that is carried on by persons or entities, other than a Governmental Unit. The leasing of the P
roject or the access by or the use of the Project by a person or entity other than a Governmental Unit on a
basis other tha
n as a member of the general public shall constitute a Private Use. Use by or on behalf o
f the State of California or any of its agencies, instrumentalities or subdivisions or by any local G
overnmental Unit and use as a member of the general public will b e disregarded in determining whether
a
Private Use exists. Use under an arrangement that conveys priority rights or other preferential benefits is
generally not use on the same basis as the general public. Arrangements providing for use that is a
vailable
to the general public at no charge or on the basis of rates that are generally applicable and u
niformly applied do not convey priority rights or other preferential benefits. For this purpose, rates may b
e treated as generally applicable and uniformly app
lied even if (i) d
ifferent rates apply to different
cl
asses of users, such as volume purchasers, if the differences in rates are customary and reasonable; or (
ii) a specially negotiated rate arrangement is entered into, but only if the user is prohibited b y federal law
fr
om paying the generally applicable rates, and the rates established are as comparable as reasonably p
ossible to the generally applicable rates. An arrangement that does not otherwise convey priority rights o
r other preferential benefits is
not treated, nevertheless, as general public use if the term of the use u
nder the arrangement, including all renewal options, is greater than 200 days. For this purpose, a right o
f first refusal to renew use under the arrangement is not treated as a rene wal option if (i) the
co
mpensation for the use under the arrangement is redetermined at generally applicable, fair market va
lue rates that are in effect at the time of renewal; and (ii) the use of the financed property under the sa
me or similar arrangements
is predominantly by natural persons who are not engaged in a trade or b
usiness.
F.1
0 N
o Sale, Lease or Private Operation of the Project.
T
he Project (or any portion thereof) will not be sold or otherwise disposed of, in whole or in part, to any p
erson who is not a Governmental Unit prior to the final maturity date of th e Obligation. The Project will
n
ot be leased to any person or entity that is not a Governmental Unit prior to the final maturity date of the O
bligation. Except as permitted under Section F.1
2 hereof, the Recipient will not enter any contract or
a
rrangement or cause or permit any contract or arrangement to be entered with persons or entities that a
re not Governmental Units if that contract or arrangement would confer on such persons or entitie s any
r
ight to use the Project on a basis different from the rig ht of members of the general public. The contracts
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 45 o
f xx
E
xhibit F
o
r arrangements contemplated by the preceding sentence include but are not limited to management co
ntracts, take or pay contracts or put or pay contracts, and capacity guarantee contracts.
F.1
1 N
o D
isproportionate or Unrelated Use.
N
o portion of the Project Funds or the Project is being, has been, or will be used for a Private Use that is u
nrelated or disproportionate to the governmental use of the Project Funds.
F.1
2 M
anagement and Service Contracts.
T
he Recipient represents that, as of the date hereof, it is not a party to any contract, agreement or other a
rrangement with any persons or entities engaged in a trade or business (other than Governmental Units) th
at involve the management or operation of p
roperty or the provision of services at or with respect to the P
roject that does not comply with the standards of the Treasury Regulations, or Revenue Procedure 2017-1
3, as applicable. T
he Recipient represents that it will not be party to any such contract , agreement
o
r arrangement with any person or entity that is not a Governmental Unit for the management of property o
r the provision of services at or with respect to the Project, while the Obligation (including any obligation o
r series thereof issued to r
efund the Obligation, as the case may be) is outstanding, except: (a) with r
espect to any contract, agreement or arrangement that does not constitute “private business use” of the P
roject under Code §141(b), or (b) with respect to any contract, agreement o r arrangement that complies
w
ith (i) Revenue Procedure 97-1
3, 1997-1
C.B. 632, as amended by Revenue Procedure 2001-3
9, 2001-
2 C.B. 38, and as amplified by Notice 2014-6
7, with respect to contracts entered into before August 18, 2 017 and not materially mo
dified or extended after August 18, 2017, or (ii) Revenue Procedure 2017-1 3,
w
ith respect to contracts entered into or materially modified or extended on or after August 18, 2017, or (
c) with respect to any contract, agreement or arrangement that does not g ive rise to use of the Bond
F
unded Portion of the Project Funds or the Project by a non-G overnmental Unit of more than the amount
o
f such non-q
ualified use permitted by the Code, or (d) in the event that the Recipient receives an opinion o
f counsel, satisf
actory to the State Water Board and the Bank and expert in the issuance of state and lo
cal government bonds the interest on which is excluded from gross income under Section 103 of the C
ode (“Nationally-R
ecognized Bond Counsel”), that such contract, agree
ment or arrangement will not
a
dversely affect the exclusion of the interest on the Obligation from gross income for federal income ta
xation purposes.
F.1
3 N
o Disposition of Financed Property.
A
s of the date hereof, the Recipient d
oes not expect to sell or otherwise dispose of any portion of the P
roject, in whole or in part, prior to the final maturity date of the Obligation.
F
.14 U
seful Life of Project.
A
s of the date hereof, the Recipient reasonably e
xpects that the economic useful life of the Project,
co
mmencing at Project Completion, will be at least equal to the term of this Agreement, as set forth in E
xhibit A hereto.
F.1
5 P
ayments.
P
ayments generally are expected to be derived from assessments, taxes, fees, charges or other current R
evenues of the Recipient in each year, and such current Revenues are expected to equal or exceed the P
ayments during each payment period. Any amounts accu
mulated in
a sinking fund or bona fide debt
se
rvice fund to
pay Payments (whether or not deposited to a fund or account established by the R
ecipient) will be disbursed to pay Payments within thirteen months of the initial date of accumulation or d
eposit. A
ny such fund used for the payment of Payments will be depleted once a year except for a r
easonable carryover amount not exceeding the greater of earnings on such fund or one-twe lfth of the
P
ayments in either c
ase for the immediately preceding year.
Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 46 o
f xx
E
xhibit F
F.1
6 N
o Other Replacement Proceeds.
T
he Recipient will not use any of the Bond Funded Portion of the Project Funds to replace or substitute o
ther funds of the Recipient that were otherwise to be used to finance the Project or which are or will be u
sed to acquire securities, obligations or oth
er investment property reasonably expected to produce a yi
eld that is materially higher than the yield on the Bonds.
F.1
7 N
o Sinking or Pledged Fund.
E
xcept as set forth in Section F.1
8 below, the Recipient will not create or establish any sinking fund or p
ledged fund which will be used to
pay Payments on the Obligation within the meaning of Section 1.148- 1 (c) of the Treasury Regulations. If any sinking fund or pledged fund comes into being with respect to the O
bligation before the Obligation has been fully retired which may be used to pa y the Payments, the
R
ecipient will invest such sinking fund and pledged fund moneys at a yield that does not exceed th e yield
o
n the Bonds.
F.1
8 R
eserve Amount.
T
he State Water Board requires that the Recipient maintain and fund a separate account in an am ount
e
qual to one (1) year of debt se
rvice with respect to the Obligation (the “Reserve Amount”) as set forth in E
xhibit B.
The Recipient represents that the Reserve Amount is
and will be available to pay debt se
rvice
w
ith respect to the Obligation, if and when needed. The Reserve Amount consists solely of revenues of th
e Recipient and does not include any proceeds of any obligations the interest on which is exclu ded from
g
ross income for federal income tax purposes or investment earnings thereon. The aggregate of the R
eserve Amount, up to an amount not exceeding the lesser of (i) ten percent of the aggregate principal a
mount of the Obligation, (ii) the maximum a
nnual debt service with respect to the Obligation, or (iii) 125 p
ercent of the average annual de
bt service with respect to the Obligation, will be treated as a reasonably r
equired reserve fund.
F.1
9 R
eimbursement Resolution.
T
he “reimbursement resolution” adopted by the Recipient is incorporated herein by reference.
F.2
0 R
eimbursement Expenditures.
R
eimbursements are disallowed, except as specifically authorized in Exhibit B or Exhibit D of this A
greement. To the extent so authorized, a portion of the Bond Funded Portion of the Project Funds may b
e applied to reimburse the Recipient for Project Costs
paid before the date hereof, so long as the Project
C
ost was (i) n
ot paid prior to sixty (60) days before the Recipient’s adoption of a declaration of official in
tent to finance the Project, (ii) not paid more than eighteen (18) months prior to the date h ereof or the
d
ate the Project was placed-in-se
rvice, whichever is later, and (iii) n
ot paid more than three (3) years prior
to
the date hereof (collectively, “Reimbursement Expenditures”), unless such cost is attributable to a “
preliminary expenditure.” P
reliminary expenditure for this purpose means architectural, engineering, su
rveying, soil testing and similar costs incurred prior to the commencement of construction or r
ehabilitation of the Project, but does not include land acquisition, site preparation and similar costs
in
cident to the commencement of acquisition, construction or rehabilitation of the Project. Preliminary e
xpenditures may not exceed 20% of the Bond Funded Portion of the Project Funds.
F.2
1 C
hange in Use of the Project.
T
he Recipient reasonably expects to use all of the Bond Funded Portion of the Project Funds and the P
roject for the entire stated term to maturity of the Obligation. Absent an opinion of Nationally- R
ecognized Bond Counsel to the effect that such use of the Bond Funded Portion of the Project Funds
w
ill not adversely affect the exclusion from federal gross income of interest on the Bonds pursuant to Attachment 2
N
ame of Recipient
A
greement No.: XX-X
XX-550
P
roject No.: X-XX-X
XXX-XXX
P
age 47 o
f xx
E
xhibit F
S
ection 103 of the Code, the Recipient will use the Bond Funded Portion of the Project Funds and the P
roject solely as set forth in this Agreement.
F.2
2 R
ebate Obligations.
If
the Recipient satisfies the requirements of one of the spending exceptions to rebate specified in Section 1 .148-7
of the Treasury Regulations, amounts earned from investments, if any, acquired with the Bond F
unded Portion of the Project Funds will not be
subject to the rebate requirements imposed under Section 1 48(f) of the Code. If the Recipient fails to satisfy such requirements for any period, it will notify the State W
ater Board and the Bank immediately and will comply with the provisions of the Code and the Treasury
R
egulations at such time, including the payment of any rebate amount calculated by the State Water B
oard or the Bank.
F.2
3 N
o Federal Guarantee.
T
he Recipient will not directly or indirectly use any of the Bond Funded Portion of the Project Funds in a
ny manner that would cause the Bonds to be "federally guaranteed" within the meaning of Section 1 49(b) of the Code, taking into account various e
xceptions in
cluding any guarantee related to investments
d
uring an initial temporary period until needed for the governmental purpose of the Bonds, investments as p
art of a bona fide debt service fund, investments of a reasonably required reserve or replacement f und,
in
vestments in bonds issued by the United States Treasury, investments in refunding escrow funds or ce
rtain other investments permitted under the Treasury Regulations.
F.24 A
mendments.
T
he provisions in this E
xhibit m
ay be amended, modified or supplemented at any time to reflect changes in
the Code upon obtaining written approval of the State Water Board and the Bank and an opinion of N
ationally-R
ecognized Bond Counsel to the effect that such amendment, modification or supplement will
n
ot adversely affect the exclusion from federal gross income of interest on the Bonds pursuant to Section 1 03 of the Code.
F.25 R
easonable Expectations.
T
he Recipient warrants that, to the best of its knowledge, information and belief, and based on the facts a
nd estimates as set forth in the tax covenants in this E xhibit,
the expectations of the Recipient as set
fo
rth in this E
xhibit a
re reasonable. The Recipient is not aware of any facts or circumstances that would ca
use it to question the accuracy or reasonableness of any representation made in the provisions in this E
xhibit.
F.26 A
ssignment.
T
he Recipient consents to any pledge, sale, or assignment to the Bank or a trustee for the benefit of the o
wners of the Bonds, if any, at any time of any portion of the State Water Board's estate, right, title, and in
terest and claim in, to and under this A
greement and the right to make all related waivers and
a
greements in the name and on behalf of the State Water Board, as agent and attorney-in-fa ct, and to
p
erform all other related acts which are necessary and appropriate under this Agreement, if any, and the
S
tate Water Board's estate, right, title, and interest and claim in, to and under this Agreement to P
ayments (but e
xcluding the State Water B
oard's rights to Additional Payments and to notices, opinions a
nd indemnification under each Obligation).
Attachment 2