Agenda — Tracy City Council, April 1, 2025 (part 2 of 3)

Q-357370 - USD 57,110.00
Quotation
Address:

Magnet Forensics, LLC
931 Monroe Drive NE
Suite A102-340
Atlanta, Georgia 30308
United States
Phone: 519-342-0195
E-Mail
: [email protected]
Quote #: Q-357370-1
Issue Date: 12 Feb, 2025
Expires On: 27 May, 2025
Bill To
Brian Cockey
Tracy Police Department
1000 Civic Center Dr
Tracy, California 95376
United States
(209) 831-6602
[email protected]
Ship To
Brian Cockey
Tracy Police Department
1000 Civic Center Dr
Tracy, California 95376
United States
(209) 831-6602
[email protected]
End User
Brian Cockey
Tracy Police Department
1000 Civic Center Dr
Tracy California 95376
United States
(209) 831-6602
[email protected]

PREPARED BY PHONE EMAIL PAYMENT TERM
Stephen Murray [email protected] Net 30 ITEM # PRODUCT NAME SMS DATES UNIT

SELLING
PRICE

QTY EXTENDED PRICE

GKL-ONF-
PR-B
GrayKey License - Premier Bundle 28 May, 2025
to
27 May, 2026
USD
57,110.00
1 USD 57,110.00
Sub-Total USD 57,110.00
Taxes USD 0.00
Grand Total USD 57,110.00
Serial Numbers:
65a120f2d4812612
82c21ff2d4912115
Prices subject to change upon quote expiry. Accurate sales tax will be calculated at the time of invoicing when applicable. If your company is tax exempt, please provide appropriate support with your signed quote. Hardware may be subject to additional fees related to delivery, import and export.

Terms & Conditions
Unless you have an existing written agreement with Magnet Forensics for the products and/or services listed in this quotation, by: (a) signing below, (b) submitting an Order to Magnet Forensics referencing this quotation, or (c) making payment for the products and/or related services listed in this quotation, you agree to the terms and conditions at http://magnetforensics.com/legal/ applicable to such products and/or services listed in this quotation to the exclusion of any differing or additional terms which may be found on your purchase order or similar document. By signing, you certify that you have the authority to bind your organization.

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2 Docusign Envelope ID: F236CB41-F487-4453-B33F-778D8C6622B4 Exhibit 1
Q-357370 - USD 57,110.00
Magnet Forensics may adjust the software term start and/or end date, without increasing the total software license price, based on the date Magnet Forensics activates the software and provided that the total software license term length does not change.

Signature:

Date:

______/______/______

Name (Print):

Title:

Please sign and email to Stephen Murray at [email protected]

Page 2 ends

2 Docusign Envelope ID: F236CB41-F487-4453-B33F-778D8C6622B4 Peter Vreeswyk
Chief Financial Officer
Magnet Forensics, LLC
07-Mar-2025
Adam Belsher
Chief Executive Officer
Magnet Forensics, LLC
07-Mar-2025

Q-376266 - USD 6,720.00
Quotation
Address:

Magnet Forensics, LLC
931 Monroe Drive NE
Suite A102-340
Atlanta, Georgia 30308
United States
Phone: 519-342-0195
E-Mail
: [email protected]
Quote #: Q-376266-1
Issue Date: 14 Jan, 2025
Expires On: 2 Apr, 2025
Bill To
Brian Cockey
Tracy Police Department
1000 Civic Center Dr
Tracy, California 95376
United States
(209) 831-6602
[email protected]
Ship To
Brian Cockey
Tracy Police Department
1000 Civic Center Dr
Tracy, California 95376
United States
(209) 831-6602
[email protected]
End User
Brian Cockey
Tracy Police Department
1000 Civic Center Dr
Tracy California 95376
United States
(209) 831-6602
[email protected]

PREPARED BY PHONE EMAIL PAYMENT TERM
Stephen Murray [email protected] Net 30 ITEM # PRODUCT NAME SMS DATES UNIT

SELLING
PRICE

QTY EXTENDED PRICE
6AXB200 Magnet AXIOM Advanced Bundle USD 0.00 1 USD 0.00 6AX210 Magnet AXIOM Advanced 3 Apr, 2025 to
2 Apr, 2026
USD
6,720.00
1 USD 6,720.00
5F000 Free Shipping USD 0.00 1 USD 0.00
Sub-Total USD 6,720.00
Taxes USD 0.00
Grand Total USD 6,720.00
Prices subject to change upon quote expiry. Accurate sales tax will be calculated at the time of invoicing when applicable. If your company is tax exempt, please provide appropriate support with your signed quote. Hardware may be subject to additional fees related to delivery, import and export.

Page 1 ends

2 Docusign Envelope ID: F236CB41-F487-4453-B33F-778D8C6622B4 Q-376266 - USD 6,720.00
Magnet Forensics may adjust the software term start and/or end date, without increasing the total software license price, based on the date Magnet Forensics activates the software and provided that the total software license term length does not change.

Signature:

Date:

______/______/______

Name (Print):

Title:

Please sign and email to Stephen Murray at [email protected]

Page 2 ends

2 Docusign Envelope ID: F236CB41-F487-4453-B33F-778D8C6622B4 Peter Vreeswyk
Chief Financial Officer
Magnet Forensics, LLC
07-Mar-2025
07-Mar-2025
Adam Belsher
Chief Executive Officer
Magnet Forensics, LLC

END USER

LICENSE AGREEMENT

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This End User License Agreement (the “ Agreement”) is a legal agreement between You (the party who signs this Agreement) and Magnet Forensics respecting Your use of the accompanying Software and is effective as of the date of last signature (the “Effective Date”).

1 Definitions

1.1 “ Confidential Information” means any information regardless of form or medium, whether tangible or intangible, including any copies or fixations made thereof that is disclosed by discloser, or to which the recipient is provided access by discloser, that is proprietary or confidential to discloser or its affiliated companies, including, without limitation, information that specifies, concerns or is related to discloser’s intellectual property, Software, Documentation, Product, trade secrets, business operations, finances, customers, technical know -how, prototypes, designs, processes, products, services, or the development, testing or commercial exploitation of any of the foregoing that is either specifically identified as confidential prior to or at the time of its disclosure or that would reasonably be considered by a person knowledgeable in the industry to be proprietary or confidential in nature because of legends or other markings on the information, the circumstances of disclosure or the nature of the information itself. Confidential Information includes, without limitation, (i) information concerning the methods of use, internal components, features, functions and solutions of GrayKey and VeraKey Products, information found on the Magnet Forensics support website, and (ii) any copies, photographs, or other reproductions of the foregoing, whether or not marked as “confidential” or “proprietary.”

1.2 “ Documentation” means the electronic, printed or other form of documents that accompany delivery of the Product that provides information about installation, operation, and use of the Product.

1.3 “Hardware” means the physical components, devices, or equipment provided to you by Magnet Forensics used for the operation of the Software.

1.4 “ License Term” means the time period identified in Your Quotation or if no such period is identified in Your Quotation then for one (1) year commencing on the date the Software is available to You.

1.5 “ Magnet Forensics” has the meaning set out in Section 12.1.

1.6 “ Magnet Software” means the proprietary software of Magnet Forensics.

1.7 “Perpetual License” means a license purchased with a perpetual License Term as identified in a Quotation.

1.8 “Product” means the Magnet Forensics supplied products identified in the Quotation, which may include, Hardware, Software, and Support Services.

1.9 “ Quotation” means the quotation provided to You by Magnet Forensics or a Magnet Forensics authorised reseller outlining the terms, conditions, and pricing details for the licensing of Magnet Hardware, Software, and Support Services.

1.10 “ Software” means the Magnet Software and Third Party Software.

1.11 “ Support Services ” means the support services included in the Term License or separately purchased as part of the Perpetual License as indicated on Your Quotation and, in each case, described further in Section 4.1.

1.12 “ Term License” means a license purchased with a non-perpetual License Term as identified in a Quotation.

1.13 “ Third Party Software” means the copyrighted, patented or otherwise legally protected software of third parties (including open-source code components) incorporated into the Software.

1.14 “ User” means a single user who uses the Software as permitted by this Agreement or is otherwise provided access to the Software by You.

Docusign Envelope ID: F236CB41-F487-4453-B33F-778D8C6622B4

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LICENSE AGREEMENT

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1.15 “ You”, and “ Your” means the entity that purchases the license for Software pursuant to this Agreement.

2 License Grant

2.1 License. The licensed rights to the Software granted to You by Magnet Forensics are as set out in Schedule A (Licensed Rights), Schedule B, and Schedule C to this Agreement, as applicable.

3 Fees, Taxes, and Delivery

3.1 Fees. You agree to pay Magnet Forensics all applicable fees identified in the Quotation within thirty (30) days from date of the invoice. Magnet Forensics shall invoice You upon the earlier of: (a) You issuing a purchase order to Magnet Forensics that relates to the Quotation; (b) Your signing the Quotation; and (c) Your written indication, by email or otherwise, of Your approval of the Quotation.

If You fail to pay any amount under this Agreement that is due and payable, and such failure remains unremedied for a period of thirty (30) days following written notice of default by Magnet Forensics, in addition to any other rights and remedies available to Magnet Forensics, Magnet Forensics shall be entitled to charge interest on all outstanding amounts at the lesser of 1.5% per month or the maximum rate permitted by law.

3.2 Taxes. You are responsible for all taxes relating to Software and services identified in a Quotation (excluding any taxes based on the income of Magnet Forensics ). Unless otherwise indicated, all amounts payable by You under this Agreement are exclusive of any tax, duty, levy, or similar government charge. If You are required to withhold any taxes from payments owed under this Agreement, the amount of payment due shall automatically be increased to offset such tax, so that the amount actually remitted to Magnet Forensics shall equal the amount invoiced or otherwise due.

3.3 Delivery. Software will be provided by electronic means. Title and risk of loss to tangible products such as Hardware pass to you upon delivery, which occurs when Magnet Forensics places them with a carrier for shipment to you, freight prepaid.

4 Support Services

4.1 Support Services. Details of support packages can be found at www.magnetforensics.com/legal/.

4.2 Magnet Forensics does not require Your personal data to provide Support Services. If, however, as part of an incident resolution, You wish to provide Magnet Forensics with Your data or information (i.e. video footage, screen shots, case file data), You are solely responsible and liable in connection with the provision of such data to Magnet Forensics, including, without limitation, ensuring that the collection, processing and transfer of such data is in compliance with all applicable laws . Any data You choose to provide to Magnet Forensics in connection with the licensing and/or support of the Software shall be processed and stored in accordance with the confidentiality provisions of this Agreement and the Magnet Forensics Privacy Policy available at https://www.magnetforensics.com/legal/.

5 Intellectual Property Rights

5.1 License Only. Except for the limited license set forth herein, You do not acquire any intellectual property rights to the Product or Documentation under this Agreement, including, without limitation, any right, title or interest in and to patents, copyrights, trademarks, trade names, industrial designs, Magnet Forensics Confidential Information, or trade secrets, whether registered or unregistered.

The Software is licensed and not sold. Any rights not expressly granted under this Agreement are reserved by Magnet Forensics.

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LICENSE AGREEMENT
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5.2 Feedback. Magnet Forensics shall own all feedback, comments, suggestions, ideas, and concepts that You provide or identify during Your use of the Product and Support Services, and all associated intellectual property rights (collectively the “Feedback”). You hereby assign to Magnet Forensics all of Your right, title and interest in Your Feedback. For certainty, Feedback shall not include any of Your data, Confidential Information, or intellectual property. 6 Confidentiality

6.1 Maintenance of Confidential Information. Subject to applicable law, each party agrees to: (a) keep confidential all Confidential Information disclosed by the other party ; (b) only use, reproduce and disclose the Confidential Information to facilitate the use of the Software (in Your case) or support and develop the Software (in Magnet Forensics’ case); and (c) protect the Confidential Information from unauthorized use, reproduction or disclosure in the same manner it protects the confidentiality of similar information of its own, but not less than a reasonable degree of care.

6.2 A disclosure of Confidential Information that is legally compelled to be disclosed pursuant to a subpoena, summons, order or other judicial or governmental process shall not be considered a breach of this Agreement; provided that You promptly notif y Magnet Forensics in writing, if notification is permitted by law, and use commercially reasonable efforts to assist Magnet Forensics, at Magnet Forensics’ expense, in opposing such disclosure or obtaining a protective order or other reliable assurance preventing or limiting such disclosure and/or ensuring that confidential treatment will be accorded to any Confidential Information that is disclosed. Such disclosure does not remove the Confidential Information so disclosed from the protection of this Agreement. No further disclosure beyond the scope of such order is allowed.
7 Warranties, Exclusions, Disclaimer

7.1 Software Warranty. While Your Support Services are active, Magnet Forensics warrants that the Software shall materially conform to the Documentation. If the Software does not materially conform to the Documentation, and you give Magnet Forensics notice while Your Support Services are active, Magnet Forensics will, at its option, attempt to correct, repair, or replace the Software at no additional cost to You. If Magnet Forensics is unable to correct the Software to conform with the warranty stated herein within thirty (30) days , then upon Your request, Magnet Forensics shall , as your sole and exclusive remedy, refund You: (a) a prorated amount of any unused prepaid license fees if You purchased a Term License; or (b) a prorated amount of any unused prepaid Support Services fees if You purchased a Perpetual License.

7.2 Viruses, Licenses, Support Services. Magnet Forensics (a) has implemented testing practices consistent with industry standards designed to protect against viruses that may impede the Software; (b) includes fully paid-up l
icenses to any and all Third Party Software incorporated into the Software; and (c) will perform al l Support Services in a good and workmanlike manner consistent with industry standards.

7.3 EXCLUSIONS. THE WARRANTIES SET FORTH IN THIS SECTION 7 ARE THE EXCLUSIVE

WARRANTIES MADE BY MAGNET FORENSICS TO YOU REGARDING THE PRODUCT, AND

YOUR SOLE AND EXCLUSIVE REMEDY RESPECTING ANY DEFECTS, NON -CONFORMITIES OR PROBLEMS WITH THE PRODUCT. EXCEPT AS SET FORTH IN SECTION 7.1 AND 7.2,

MAGNET FORENSICS DISCLAIMS ALL OTHER REPRESENTATIONS, WARRANTIES AND

CONDITIONS, WHETHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY

EXPRESS OR IMPLIED REPRESENTATIONS, WARRANTIES OR CONDITIONS OF

MERCHANTABILITY, MERCHANTABLE QUALITY, PERFORMANCE, FITNESS FOR A

PARTICULAR PURPOSE, DURABILITY, ACCURACY, RELIABILITY, NON-INFRINGEMENT, OR

ANY OTHER WARRANTY OR CONDITION ARISING BY STATUTE, CUSTOM OR USAGE OF TRADE RELATED TO THE PRODUCT PROVIDED HEREUNDER. To the maximum extent permitted by law, any implied warranties or conditions relating to the Software that cannot be Docusign Envelope ID: F236CB41-F487-4453-B33F-778D8C6622B4

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LICENSE AGREEMENT

Version 20240416 Page 4 of 16
excluded as set out above are limited to thirty (30) days from the date that the Software is delivered to You.
8 Limitation of Liability

8.1 NOTWITHSTANDING ANY OTHER SECTION OF THIS AGREEMENT, IN NO EVENT SHALL EITHER

PARTY BE LIABLE TO THE OTHER PARTY WHETHER IN AN ACTION IN CONTRACT, TORT,

PRODUCT LIABILITY, STRICT LIABILITY, STATUTE, LAW, EQUITY, OR OTHERWISE ARISING

FROM OR RELATED TO THIS AGREEMENT OR ANY ORDER FOR (A) INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES OR LOSSES; (B) LOSS OF

PROFITS OR REVENUE (OTHER THAN IN AN ACTION BY MAGNET FORENSICS TO RECOVER PAYMENT OF A PRICE OWED ); OR (C) LOSS OF TIME, OPPORTUNITY OR ANY DAMAGES

RELATING TO THE CORRUPTION OF DATA, LOSS OF THE USE OF DEVICES OR ANY PORTION

THEREOF, AND DAMAGES CAUSED BY YOUR FILES, CONNECTED DEVICES, OR DATA

COLLECTED BY YOU, EVEN IF THE OTHER PARTY IS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. EACH PARTY’S CUMULATIVE LIABILITY FOR ALL CLAIMS ARISING OUT OF OR IN

CONNECTION WITH THIS AGREEMENT (OTHER THAN IN AN ACTION BY MAGNET FORENSICS

TO RECOVER PAYMENT OF A PRICE OWED) WILL NOT EXCEED THE AMOUNT PAID BY YOU FOR THE PRODUCT IN THE TWELVE (12) MONTHS PRECEDING THE CLAIM GIVING RISE TO SUCH DAMAGES.

8.2 SECTION 8.1 SHALL NOT APPLY TO EITHER PARTY’S LIABILITY IN RELATION TO: (A) INDEMNIFICATION OBLIGATIONS OF EITHER PARTY UNDER SECTION 9 (INDEMNIFICATION) UNDER THIS AGREEMENT; (B) MISAPPROPRIATION OR INFRINGEMENT OF THE OTHER PARTY’S INTELLECTUAL PROPERTY; (C) BREACHES OF CONFIDENTIALITY UNDER SECTION 6;

AND (D) YOUR PAYMENT OBLIGATIONS TO MAGNET FORENSICS, PROVIDED, HOWEVER, THAT MAGNET FORENSICS’ CUMULATIVE LIABILITY UNDER SECTION 9.2 RELATING TO THIRD PARTY SOFTWARE SHALL IN NO EVENT EXCEED THE LESSER OF : THREE TIMES (3X) THE AMOUNT PAID BY YOU FOR THE SOFTWARE IN THE TWELVE (12) MONTHS

PRECEDING THE CLAIM GIVING RISE TO SUCH DAMAGES AND ONE MILLION USD ($1,000,000.00 USD).
9 Indemnification

9.1 Your Indemnification of Magnet Forensics. You will defend and indemnify Magnet Forensics from and against any third-party claim, cause of action, legal proceeding, cost, award of damages or any other judgment and legal expenses (“Claim”) in relation to: (a) a ny Claim arising from the modification, combination or use of the Software with equipment, software, interfaces, or other materials that are not specifically authorized by Magnet Forensics; and (b) Your collection and use of data resulting from Your use of the Software and any actions You take as a result thereof; and (c) unauthorized use of the Product.

9.2 Magnet Forensics Indemnity. Magnet Forensics will defend You from and against any suit brought against you by a third party to the extent the suit alleges that your use of a Product infringes a valid patent in Canada or the United States (an “IP Claim”). Magnet will also pay the damages, costs, and attorneys’ fees that are awarded against you in a final, non-appealable court judgment for the IP Claim, or required to be paid by you in a settlement of an IP Claim that Magnet has agreed to in writing. You agree to (i) give prompt notice of the IP Claim to Magnet Forensics; (ii) grant sole control of the defense and settlement of the IP Claim to Magnet Forensics; and (iii) provide reasonable cooperation to Magnet Forensics and, at Magnet Forensics’ request and expense, assistance in the defense or settlement of the IP Claim ("Your Indemnification Obligations”) and Magnet Forensics shall not be liable to the extent an IP Claim, or portion thereof, is attributable to Your breach of Your Indemnification Obligations. In the event of an IP Claim, Magnet Forensics may, at its option and expense: (a) obtain for You the right to continue to use the Product; (b) substitute a substantially equivalent non-infringing product; (c) modify the Product to make it non- infringing; or if (a), (b), and (c) are not commercially feasible, then (d) terminate Your license and require that You no longer access and use the Product. If Your license is terminated, You must return or destroy the Product and within 30 days of receipt of all of the Product or certification of destruction thereof, Magnet Docusign Envelope ID: F236CB41-F487-4453-B33F-778D8C6622B4

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LICENSE AGREEMENT

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Forensics shall refund You x) a prorated amount of any unused prepaid license fees if You purchased a Term License; or y) a prorated amount of any unused prepaid Support Services fees if You purchased a Perpetual License. The indemnity obligations under this clause do not extend to Claims arising from or relating to: (aa) any modification to the Product or use in combination with any equipment, software, data or any other materials not authorized by Magnet Forensics where the infringement would not have occurred but for such activity; (bb) use of the Product by You in a manner contrary to the terms of this Agreement where the infringement would not have occurred but for such use; (cc) the continued use of the infringing Product after Magnet Forensics has provided substantially equivalent non-infringing software, a non-infringing modification of the Product, or terminated Your license in accordance with this Agreement; or (dd) custom Product developed at Your request while utilizing Your specifications.

NOTWITHSTANDING ANY TERMS TO THE CONTRARY IN THIS AGREEMENT, THE PROVISIONS

OF THIS CLAUSE STATE THE ENTIRE LIABILITY AND OBLIGATIONS OF MAGNET FORENSICS

AND YOUR EXCLUSIVE REMEDY WITH RESPECT TO ANY ACTUAL OR AL LEGED

MISAPPROPRIATION, VIOLATION AND/OR INFRINGEMENT OF ANY PROPRIETARY AND/OR

INTELLECTUAL PROPERTY RIGHTS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT.

9.3 Mutual General Indemnity. Each party will defend and hold harmless the other from and against any Claim arising from any of the following: (a) gross negligence, willful misconduct, fraudulent misrepresentation and fraud by a party; (b) bodily injury or death caused by a party; and (c) breach of confidentiality obligations. 10 Term and Termination

10.1 Term of Agreement. This Agreement shall survive for one (1) year after the termination or expiry of Your License Term.

10.2 Termination for Convenience. You may terminate this Agreement and Your license for Software at any time upon written notice to Magnet Forensics but You will not be entitled to any refund.

10.3 Termination for Breach. Either party may terminate this Agreement and any License Term immediately upon notice to the other if: (a) the other party materially breaches a material term or condition of this Agreement which breach remains unremedied for thirty (30) days following written notice thereof by the other party, or immediately if such breach is not capable of remedy; (b) the other party becomes involved in any legal proceeding concerning its solvency, commences liquidation proceedings, has a receiver or administrator appointed for any of its assets, ceases or threatens to cease operations, or otherwise has a serious and reasonable doubt arise respecting its solvency; or (c) if Magnet Forensics determines in its sole discretion that licensing the Product to You would violate applicable laws. If Your License Term is terminated due to breach by Magnet Forensics under (a) above, where Magnet Forensics is the relevant party under (b) above, or by Magnet Forensics in accordance with (c) above, Magnet Forensics shall refund You: (i) a prorated amount of any unused prepaid License fees if You purchased a Term License; or (ii) a prorated amount of any unused prepaid Support Services fees if You purchased a Perpetual License.

10.4 Termination/Expiry Obligation. Upon termination or expiry of this Agreement, and, if earlier, termination or expiry of a Term License, free trial or any Beta Period, You shall immediately cease all use and access of the Software and destroy or permanently delete all copies of the Software in Your possession along with any Documentation delivered to You or derivative works made therefrom.

10.5 Request for Information for Compliance. Upon request of Magnet Forensics, You agree to provide reasonable information on a timely basis to confirm Your compliance with the license rights and restrictions to the Product. Your failure to comply with this Section 10.5 will be deemed to be a material breach of this Agreement.

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LICENSE AGREEMENT
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11 Compliance with Export Laws and Ethical Conduct

11.1 You shall not export any Product, Documentation, or Confidential Information unless You comply with all applicable international trade laws (“ITR”). Further, You warrant (a) You are not now and have never been on any Restricted Party List or any sanctions list in the countries in which You conduct business; and (b) You understand and abide by ITR laws administered by the country in which You conducts business. You agree not to engage in any action in any way that would cause Magnet Forensics to violate ITR laws of the country in which it conducts business, including providing Magnet Forensics Product, Documentation, or Confidential Information to any person in any country subject to comprehensive sanctions by the U.S., Canada, the UK, EU, the EU member state and Singapore or any person on a Restricted Party List. You agree to indemnify Magnet Forensics to the extent Your actions or inactions have caused Magnet Forensics to violate ITR laws and the ITR of the country in which it conducts business. You agree to maintain a sanctions compliance policy and controls to ensure compliance with the applicable economic sanctions and upon request provide a Magnet Forensics with a copy of such policy.

11.2 If the Software is being licensed by or on behalf of the U.S. Government or by a U.S. Government prime contractor or subcontractor (at any tier), then, as a commercial item, the Government’s rights in the Software will be only as set forth: (a) in this Agreement; or (b) as provided in FAR 12.212 (Computer Software) and (for Department of Defense use or disclosure) DFAR 227.7202-3 (Rights in Commercial Computer Software or Computer Software Documentation), whichever set of rights provided in (a) or (b) are the more restrictive.

11.3 Throughout Your use of the Product, You agree to comply with the Magnet Forensics Business Code of Conduct found at https://www.magnetforensics.com/legal. Failure to comply with the Business Code of Conduct may result in the suspension or termination of access to the Software , as outlined in this Agreement.
12 Magnet Forensics Entity, Governing Law

12.1 “ Magnet Forensics” means:
a) Where Your “Bill To” address identified on the Quotation is in Canada, Magnet Forensics Inc., with an office at 2220 University Avenue East, Suite 300, Waterloo, Ontario, Canada N2K 0A8. b) Where Your “Bill To” address identified on the Quotation is in France, Magnet Forensics SAS, with an office at c/o WeWork 33 Rue La Fayette Paris, France 75009. c) Where Your “Bill To” address identified on the Quotation is in Germany, Magnet Forensics GmbH, with a registered office at c/o Eversheds Sutherland (Services) GmbH, Brienner Strabe 12, 80333 Munich, Germany.
d) Where Your “Bill To” address identified on the Quotation is anywhere other than in Canada, France, and Germany, Magnet Forensics, LLC, with an office at c/o Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.

12.2 Governing Law. This Agreement is governed by and construed under, excluding any body of law governing conflicts of laws, the laws of: ( a) E ngland, where Your “Bill To” address identified on the Quotation is in Europe, Greenland or the UK; (b) Ontario, Canada, where Your “Bill To” address identified on the Quotation is in Canada, or (c) Delaware, U.S., where Your “Bill To” address identified on the Quotation is anywhere else. You irrevocably waive any objection on the grounds of venue, forum non- conveniens or any similar grounds and irrevocably consent to service of process by mail or in any other manner permitted by applicable law. You also waive any right to a trial by jury with respect to any lawsuit or judicial proceeding arising or relating to this Agreement. You agree that the United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Agreement.

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LICENSE AGREEMENT

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13 General Provisions

13.1 Entire Agreement. This Agreement constitutes the entire agreement between the parties and supersedes all previous agreements, promises, assurances, warranties, representations, and understandings relating to the subject matter hereof. Your additional or different terms and conditions, whether on Your purchase order or otherwise, shall not apply.

13.2 Force Majeure. Neither party shall be deemed to be in default of this Agreement for failure to fulfill its obligations due to causes beyond its reasonable control. This provision shall not be construed as excusing any payment obligations.

13.3 Waiver. No waiver by either party of a breach or omission by the other party under this Agreement shall be binding on the waiving party unless it is expressly made in writing and signed by the waiving party. Any waiver by a party of a particular breach or omission by the other party shall not affect or impair the rights of the waiving party in respect of any subsequent breach or omission of the same or different kind.

13.4 Notices. Any notices, reports or other communications required or permitted to be given under this Agreement shall be in writing and shall be delivered by hand or sent by registered mail, courier , facsimile or electronic mail. For notices to You, Magnet Forensics shall send such notice to Your “Bill To” Address. For notice to Magnet Forensics, You shall send such notice to Attn: Legal Department, Magnet Forensics, with an office at 300 Colonial Center Pkwy, Suite 130, Roswell, GA 30076, United States.

13.5 Assignment. You shall not assign or transfer this Agreement (including, without limitation, by operation of law, merger, reorganization, or as a result of an acquisition or change of control) without the prior written consent of Magnet Forensics, which consent will not be unreasonably withheld, conditioned or delayed. This Agreement shall be binding upon the parties hereto and their respective lawful successors and permitted assigns. Any purported assignment in violation of this Section 13.5 shall be null and void.

13.6 Survival. Section 6 (Confidentiality), Section 8 (Limitation of Liability), Section 9 (Indemnification), and any other provision of this Agreement which by its nature would survive the termination or expiration of this Agreement shall do so.

13.7 Electronic Execution. The parties agree to the use of electronic communication in order to enter into this Agreement, Quotations, purchase orders and any other notices or records. You hereby waive any rights or requirements under any laws in any jurisdiction which require an original, non-electronic signature or delivery or retention of non-electronic records, to the extent permitted under applicable law.

13.8 Invalidity. If any part of this Agreement is determined to be invalid or unenforceable pursuant to applicable law, then the invalid or unenforceable provision will be deemed superseded by a valid, enforceable provision that most closely matches the intent of the original provision and the remainder of this Agreement shall continue in full force and effect.

END OF AGREEMENT

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LICENSE AGREEMENT

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IN WITNESS WHEREOF, the parties executed this Agreement.

MAGNET FORENSICS TRACY POLICE DEPARTMENT

Per: Per:

Name: Name:

Title: Title:

Date: Date:

Address:

Per:

Name:

Title:

Date:

Docusign Envelope ID: F236CB41-F487-4453-B33F-778D8C6622B4 CFO
07-Mar-2025
Peter Vreeswyk
07-Mar-2025
CEO
Adam Belsher

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Schedule A – Licensed Rights for All Products
1 Definitions.

1.1 “Case License” means the Software is subject to a license fee that is based on granting access to the Software for a single source (i.e. single hard drive or image file).

1.2 “CLS License” or “LLS License” means the Software is subject to a license fee that is calculated based on the number of concurrent usage virtual license Keys identified in the Quotation as available at any one time to be downloaded by Users. CLS (Cloud License Server) virtual license Keys are hosted in an online, cloud- based environment whereas LLS (Local License Server) virtual license Keys are hosted on Your premises.

1.3 “Dongle” means a USB device provisioned with the Software.

1.4 “ Dongle License” means the Software is subject to a license fee that is calculated per Dongle.

1.5 “ Enterprise License” means the Software is subject to a license fee that is calculated based on a maximum number of Software installs and/or concurrent Users as set out in the Quotation.

1.6 “ Instance” means a copy of the Software that a User is authorized to use. The maximum number of Instances per User are stated in the Quotation.

1.7 “ Key” means the license key provided to You by Magnet Forensics to permit access to and use of the Software to a User.

1.8 “ Machine” means each hardware machine or hardware unit on which the Software is used.

1.9 “ Machine License” means the Software is subject to a license fee that is calculated per Machine.

2 License Grant. Magnet Forensics hereby grants to You a limited, non-exclusive, revocable, non - transferable, non-sublicensable license to use the Software on Your internal business networks for the number of Users, installs, and/or Instances and License Term indicated in Your Quotation in accordance with the terms set forth in this Agreement and the Documentation . Your license only permits you to possess and use the Software in object code form. For certainty: (a) academic licenses are granted for academic, non-commercial use only; (b) licenses for Magnet AUTOMATE products are licensed on a per ‘control node” and “agent node” basis; (c) Machine Licenses are solely permitted for use of the Software on the Machine on which such Software is first installed and by the original User; and ( d) Dongle Licenses are for use on Machines only (and not for use in cloud or other virtual environments), and cannot be shared between individual Users. For further certainty: ( i) Enterprise Licenses, CLS Licenses and LLS Licenses allow for concurrent Users of the Software as indicated in Your Quotation; and ( ii) a unique key code is issued for a Case License tied to the original single source, with requirements for additional single sources requiring an add- on purchase. It is Your responsibility to fully comply with all applicable laws in using and handling the Software and any additional third-party license terms applicable to Third Party Software.

3 Restrictions. You shall not and shall ensure that Users shall not:

3.1 copy, reproduce, or modify the Product or any part thereof, including, but not limited to, com bining with other software or hardware other than as authorized by Magnet Forensics in writing;

3.2 enhance, improve, alter, create derivative works, reverse engineer, disassemble, deconstruct, impair, translate, decrypt, reverse compile or convert into human readable form the Software or any part thereof;

3.3 distribute, lend, assign, license, sublicense, lease, pledge, rent, transfer, sell or otherwise provide access to the Software, in whole or in part, to any third party;

3.4 use any Product on a time sharing, service bureau, application services provider (ASP), rental or other similar basis;
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3.5 remove, deface, cover or otherwise obscure any proprietary rights notice or identification on the Software;

3.6 circumvent or disable copyright protection mechanisms or license management mechanisms;

3.7 photograph or record any of the Product’s components, whether internal, external or as digitally displayed;

3.8 use the Product to provide services to third parties (including technical or training services), or otherwise publicly display or market the Software, for the purposes of Your commercial gain;

3.9 use the Product in conjunction with other software or hardware, except as authorized in writing by Magnet Forensics;

3.10 use the Product in any unlawful manner or to violate any rights of a third party; or

3.11 authorise, permit or otherwise acquiesce in any other party engaging in any of the activities set forth in 3.1 – 3.10 above, or attempting to do so.

For the purposes of this provision “copy” and “reproduce” shall not include: (A) making additional copies of the Software for Your own use, as long as only one copy may be used at any one time in accordance with the Documentation; or (B) making one back-up copy of the Software.

4 Restrictions Applicable to Consultant Licenses. Notwithstanding Section 3.8, if Your license is identified in a Quotation as a “consultant license”, You may use the Software in relation to Your provision of forensic analysis services to a third party for commercial gain, subject to Your compliance with all other terms of this Agreement and the payment of all applicable fees, provided that the following additional restrictions shall apply:

4.1 You shall be solely responsible for Your services, including any use or operation of the Software (both separately or in combination with any other software), to provide such services, and, as Magnet Forensics expressly disclaims all liability for any claims, losses or damages relating to Your services, You agree to indemnify Magnet Forensics against all such claims, losses and damages;

4.2 You shall not permit Your customers to use the Software (with the exception of using the Portable Case functionality);

4.3 You shall not use the Software to provide digital forensics training to third parties (including instructions on how to use the Software), unless You have first obtained Magnet Forensics’ express written permission;

4.4 You shall not, whether in an agreement for Your services or otherwise, in any way modify, negate or override any terms and conditions of the protections afforded to Magnet Forensics under this Agreement;

4.5 You shall not engage in deceptive, misleading, illegal or unethical practices that might reasonably be detrimental to Magnet Forensics or its products or services;

4.6 You shall not make any representations, warranties or guarantees about Magnet Forensics or its products and services except as expressly set out in this Agreement; and

4.7 where You wish to publicize, market or otherwise promote the use of the Software in Your services, You must do so in a manner consistent with Magnet Forensics’ External Marketing Policy (located at https://www.magnetforensics.com/wp-
content/uploads/2022/11/MagnetForensics_BrandGuidelines.pdf) and any other marketing and trademark requirements set out by Magnet Forensics from time to time . Any use of Magnet Forensics’ Trademarks shall remain unchanged and give legal notice of such trademark status.

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5 Beta Software. If You have requested use of or have access to Software or features that are identified by Magnet Forensics as pre-commercial, preview release, evaluation, pilot, "alpha", or "beta" software ("Beta Software"), the license rights set out above with respect to Your use of such Beta Software apply only to the extent necessary to enable You and the Users to test and provide Feedback to Magnet Forensics regarding the Beta Software. You acknowledge and agree that Magnet Forensics may terminate Your use of Beta Software at any time and may include technical measures in the Beta Software that renders it inoperable and Yo u agree that You will not circumvent such technical measures. You further acknowledge and agree that the Beta Software is provided “AS IS” with none of the representations, warranties, or indemnities provided in the Agreement. In consideration of the grant of license for the Beta Software, You agree that You will provide Magnet Forensics with Feedback on Beta Software as Magnet Forensics reasonably requests without any compensation.

6 Trial Licenses. If Your License is indicated as a Trial License on the Quotation (“Trial License”), the license rights set out above with respect to Your use of such Trial License apply only for the time period authorised by Magnet Forensics (“Trial Period”) and solely to the extent necessary to enable You and the Users to test the Product in order to identify if the Product is suitable for purchase from Magnet Forensics. Additionally, the Product underlying the Trial License or delivered to you as a Free Tool is provided “AS IS” with none of the representations, warranties or indemnities provided in the Agreement.

Notwithstanding the Trial Period, Magnet Forensics may terminate Your Trial License at any time and require that You cease using the Software.

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Schedule B – Additional VeraKey Terms and Conditions

1 Definitions.

1.1 “ Authorized Country” means a country in which Magnet Forensics has authorized use of the VeraKey as set out in the Documentation.

1.2 “ Authorized User(s)” means employees who are authorized by You to access or use the Product and Software. You agree to limit the number of Authorized Users to those employees who perform extractions in the normal course of their employment.

1.3 “Authorized Device” means mobile devices (a) owned and controlled by you; (b) if you are retained to perform an Investigation by a third party, owned by such third party; or (c) owned by an individual that has expressly, voluntarily, and specifically authorized you in writing, without coercion or threat of reprisal, to perform an Extraction of their mobile device.

1.4 “ Extraction” means the use of the Product to extract data from an Authorized Device.

2 License Restrictions. If You are licensing the VeraKey Product, as identified in Your Quotation, You agree to the following additional restrictions in addition to the license rights and restrictions set out in Schedule A of this Agreement:

2.1 You may only use the VeraKey Product in an Authorized Country for Extractions on Authorized Devices in aid of an official investigation of corporate malfeasance including ( a) fraud, (b) bribery, (c) theft, ( d) antitrust violation, ( e) sabotage, (f) breach of confidentiality obligations, ( g) securities violation, (h) IP infringement or misappropriation of intellectual property, (i) as part of or in response to an official government investigation or request for product of documentation (FDA, SEC, FTC, OSHA, etc.), ( j) as part of a legally compelled production of documents by a court of competent jurisdiction, (k) in defense of a criminal charge filed in a court of competent jurisdiction, where such investigation is made in response to an official complaint supported by reasonable evidence (each, an “Investigation”) and for no other purpose (“Authorized Extraction(s)”). You agree not to use the Product to screen, audit, spot-check, or otherwise discover instances of corporate malfeasance or violation of corporate policy. Prior to performing an Extraction, Magnet Forensics may require that you or your Authorized User(s) certify that the contemplated Extraction meets the above definition of an Authorized Extraction. You warrant that any certification materials submitted as part of Your Authorized Extraction certification responsibilities are true and correct in all material respects.

2.2 To the extent legally practicable, Authorized Devices must remain in Your possession and control until after the software agent employed by the Product has been successfully uninstalled from such Authorized Devices.

2.3 Only Authorized Users who have obtained any necessary consents and approvals are permitted to access and use the Product or Software in connection with any Extractions. You shall notify Magnet Forensics in writing the name and user information associated with each Authorized User, and within thirty (30) calendar days following a change of an Authorized User’s employment status such that the Authorized User ceases to be authorized by You to access or use the Product and Software either through ceasing to be employed by You or a change in his or her position within the Your organization such that he or she is no longer authorized to access or use the Product and Software.

2.4 You agree to designate an employee with senior management and oversight responsibilities within your organization to act as Your “Primary Authorized User.” The Primary Authorized User will be notified each time an extraction is performed on the device and shall supervise use and security of the Product and Software. You agree to require the Primary Authorized User , as part of their employment obligations, to monitor the use of and ensure the security of the Product. The Primary Authorized User is not permitted to perform Extractions. You shall notify Magnet Forensics in writing the name and user information associated with the Primary Authorized User, and within thirty (30) Docusign Envelope ID: F236CB41-F487-4453-B33F-778D8C6622B4

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calendar days following a change of the Primary Authorized User’s employment status such that the Primary Authorized User ceases to be tasked by the Licensee to oversee the use and security of the Product and Software.

2.5 You will conduct, at your expense, background checks on your employees (including but not limited to Authorized Users) and those of your agents and subcontractors who will have access (whether physical, remote, or otherwise) to Magnet Products or Software. You will not permit your employees, agents, or subcontractors (including the personnel of any of its agents or subcontractors) that have been convicted of a felony crime or has agreed to or entered into a pretrial diversion or similar program in connection with a felony crime to have access to: ( a) Magnet Forensics Confidential Information; (b) the secure environment in which the Product is stored; (c) the Product, the Software, or any associated materials.

2.6 You covenant and agree to keep the Product in a physically secure environment at all times, and to take all necessary precautions to restrict use of the Product to Authorized Users. You acknowledge and agree that for the Product to function properly in online mode, the Product must be connected to the Internet.

2.7 Magnet Forensics may use third-party monitoring tools to ensure that You comply with the foregoing restrictions. You acknowledge that Your use of the Product may be subject to additional terms and conditions as set by the third-party responsible for such tools.

3 Warranty Disclaimer. Notwithstanding Section 7.1 of the Agreement, You acknowledge and agree that the Software is provided AS-IS and without any warranty of any kind. Further, You acknowledge that all case stakeholders are aware of and understand the associated risk that the Authorized Device may become damaged and/or Authorized Device data may be unrecoverable when used with the Product or Software, in particular for Authorized Devices (a) with aftermarket repairs or hardware and nonstandard software builds; (b) that boot loop or are otherwise unable to boot normally; (c) that have preexisting damage, defects, or faults that may or may not be detectable; or (d) with software, software builds, states, or usage profiles not identified on the applicable support matrix. You further understand that not all permutations of Authorized Device software, software builds, states, and usage profiles have been tested by Magnet Forensics. Before utilizing the Product and Software on an Authorized Devices under any of t he above conditions, please consult Magnet Forensics through the customer support portal. You release Magnet Forensics from all liability associated with damage to a mobile device or corruption of mobile device data resulting from the use of the Software or the Product.

4 Violations of License Restrictions.

4.1 Section 8.1 of the Agreement (Limitation of Liability) shall not apply to damages arising from Your violation(s) of Schedule A - Section 3 and this Schedule B.

4.2 In addition to the termination rights set out in Section 10 of the Agreement (Termination), Magnet Forensics may terminate this Agreement and suspend Your License, at its sole discretion and option, without notice and without refund or reimbursement if You violate any material term or c ondition of this Agreement.

5 Heightened Confidentiality Obligations . The VeraKey Product, along with its associated Documentation, are sensitive technologies whose Confidential Information requires the highest duty of care. You, Your employees, Your agents who require access in order to perform hereunder, and all final users of the VeraKey Product (collectively, “Receiving Party”) shall not disclose, use, sell, transmit, inform or make available to any entity, person or body any of the Confidential Information nor shall it copy, photograph, or otherwise reproduce any Confidential Information, except as a necessary part of performing its obligations hereunder, and shall take all such actions as are reasonably necessary and appropriate to preserve and protect the Confidential Information and Magnet Forensics’ rights therein, Docusign Envelope ID: F236CB41-F487-4453-B33F-778D8C6622B4

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at all times exercising the highest duty of care . Receiving Party agrees to restrict access to VeraKey Confidential Information to those Authorized Users who require access in order to perform hereunder, and, except as otherwise provided, the Receiving Party shall not make Confidential Information available to any other person or entity without the prior written consent of Magnet Forensics. Further, Receiving Party acknowledges and agrees that due to the unique nature of the VeraKey Products, there can be no adequate remedy at law for any breach of its obligations under this Section 5 related to such Products, that any such breach will cause irreparable and continuing damage to Magnet Forensics and, therefore, that upon any such breach or any threat thereof, Magnet Forensics shall be entitled to whatever remedies it might have by law and equity, including injunctive relief, a decree for specific performance, and all other relief as may be proper (including money damages, if appropriate).

The Receiving Party further acknowled ges and agrees that the covenants contained herein are necessary for the protection of legitimate business interests and are reasonable in scope.

6 Excess Use of Licenses. If You use the Product in excess of the license quantities or levels stated in Your Quote, Magnet Forensics reserves the right to invoice You for such excess use based on the then current list price of the minimum add-on package required to bring Your use into compliance and you agree to pay such invoice in accordance with Section 3 of the Agreement.

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Schedule C – Additional GrayKey Terms and Conditions

1 Definitions.

1.2 “ Authorized Location” means the authorized physical locations specified in the Quotation or that Licensee has otherwise registered with Magnet Forensics and that Magnet Forensics has approved in writing.

1.3 “ Authorized User(s)” means collectively, employees, agents or contractors who are authorized by You to access or use the Product and Software.

1.4 “Device” means a mobile device.

1.5 “ Extraction” means the use of the Product to extract data from a Device.

2 License Restrictions. If You are licensing the GrayKey Product, as identified in Your Quotation, You agree to the following additional restrictions in addition to the license rights and restrictions set out in Schedule A of this Agreement:

2.1 Only Authorized Users who have obtained any necessary consents and approvals are permitted to access and use the Product or Software in connection with any Extractions. You shall notify Magnet Forensics in writing the name and user information associated with each Authorized User, and within thirty (30) calendar days following a change of an Authorized User’s employment status such that the Authorized User ceases to be authorized by You to access or use the Product and Software either through ceasing to be employed by You or a change in his or her position within the Your organization such that he or she is no longer authorized to access or use the Product and Software.

2.2 To the extent legally practicable, Devices must remain in Your possession and control until after the software agent employed by the Product has been successfully uninstalled from such Devices.

2.3 If Your use of the Product is restricted to the Authorized Location identified in Your Quotation, You covenant and agree to keep the Product in a physically secure environment within the Authorized Location at all times, and to take all necessary precautions to restrict use of the Product to Authorized Users. You acknowledge and agree that for the Product to function properly in online mode, the Product must be connected to the Internet.

2.4 Magnet Forensics may use third-party monitoring tools to ensure that You are in compliance with the foregoing restrictions. You acknowledge that Your use of the Product may be subject to additional terms and conditions as set by the third-party responsible for such tools.

Before utilizing the Product and Software on a Devices under any of the above conditions, please consult Magnet Forensics through the customer support portal. You release Magnet Forensics from all liability associated with damage to a mobile device or corruption of mobile device data resulting from the use of the Software or the Product.

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4 Violations of License Restrictions.

4.1 Section 8.1 of the Agreement (Limitation of Liability) shall not apply to damages arising from Your violation(s) of Schedule A - Section 3 and this Schedule C.

5 Heightened Confidentiality Obligations . The GrayKey Product, along with its associated Documentation, are sensitive technologies whose Confidential Information requires the highest duty of care. You, Your employees, Your agents who require access in order to perform hereunder, and all final users of the GrayKey Products (collectively, “Receiving Party”) shall not disclose, use, sell, transmit, inform or make available to any entity, person or body any of the Confidential Information nor shall it copy, photograph, or otherwise reproduce any Confidential Information, except as a necessary part of performing its obligations hereunder, and shall take all such actions as are reasonably necessary and appropriate to preserve and protect the Confidential Information and Magnet Forensics’ rights therein, at all times exercising the highest duty of care. Receiving Party agrees to restrict access to GrayKey Confidential Information to those Authorized Users who require access in order to perform hereunder, and, except as otherwise provided, the Receiving Party shall not make Confidential Information available to any other person or entity without the prior written consent of Magnet Forensics. Further, Receiving Party acknowledges and agrees that due to the unique nature of the GrayKey Products, there can be no adequate remedy at law for any breach of its obligations under this Section 5 related to such Products, that any such breach will cause irreparable and continuing damage to Magnet Forensics and, therefore, that upon any such breach or any threat thereof, Magnet Forensics shall be entitled to whatever remedies it might have by law and equity, including injunctive relief, a decree for specific performance, and all other relief as may be proper (including money damages, if appropriate). The Receiving Party further acknowledges and agrees that the covenants contained herein are necessary for the protection of legitimate business interests and are reasonable in scope.

Docusign Envelope ID: F236CB41-F487-4453-B33F-778D8C6622B4 April 1, 2025
Agenda Item 1.H
RECOMM

ENDATION
Staff
recommends that the City Council adopt a resolution, (1) accepting public improvements for Tracy Hills Village 7B, Tract 3956, as complete and assume responsibility for the future maintenance and repairs, (2) authorizing the City Engineer to release the Subdivider furnished bonds in accordance with the Subdivision Improvement Agreement, and Subsequent First Amendment, and (3) authorizing the City Clerk to file a Notice of Completion with the San Joaquin County Recorder’s Office.

EXECUTI

VE SUMMARY
Merit
age Homes of California, Inc., a California Corporation (Subdivider), has completed public improvements for Tracy Hills Village 7B, Tract 3956, containing 91 single-family residential lots, in accordance with the Subdivision Improvement Agreement, project plans, and specifications.

Staff recommends City Council accept the improvements as complete, authorize City Clerk to file a Notice of Completion, and authorize the City Engineer to release the Subdivider’s bonds.

BACKG

ROUND AND LEGISLATIVE HISTORY
On Apr
il 5, 2016, by Resolution No. 2016-062, City Council certified the Tracy Hills Specific Plan Final Subsequent Environmental Impact Report (Final SEIR) and adopted findings of fact, a statement of overriding considerations, and a mitigation monitoring program for the Tracy Hills Specific Plan Project (Application Numbers GPA10-0001, SPA13-0001, ZA13-0001, DA13- 0001, TSM13-0005, and TSM16-0001).

On Ap
ril 5, 2016, by Resolution No. 2016-066, City Council approved a Small-Lot Vesting Tentative Map for Tracy Hills Phase 1A, Application No. TSM13-0005, subject to Conditions of Approval, and found it to be in compliance with the Final SEIR.

On Apr
il 16, 2019, by Resolution No. 2019-073, City Council approved the Subdivision Improvement Agreement (Agreement) and Final Subdivision Map for Tracy Hills Village 7B, Tract 3956, a subdivision consisting of 91 single-family residential lots. This subdivision is generally located west of Corral Hollow Road and north of Tracy Hills Drive as shown in Attachment A. The Agreement required the Subdivider to perform the Scope of Work defined in the following plan sets:
“Impr
ovement Plans Village 7B – Tract 3956 – Tracy Hills Phase 1A,” consisting of 13 sheets, prepared by Ruggeri-Jensen-Azar
“Joint
Trench, Integral Communities, LLC, Tracy Hills-Village 7B-Tract 3956”, consisting of six sheets, prepared by Giacalone Design Services, Inc.
“Publi
c Street Lighting, Integral Communities, LLC Tracy Hills-Village 7B-Tract 3956,” consisting of four sheets, prepared by Giacalone Design Services, Inc.

On July
7, 2020, by Resolution No. 2020-114, City Council approved the Subsequent First Amendment to the Subdivision Improvement Agreement for Tract 3956, Tracy Hills Village 7B Agenda Item 1.H
April 1, 2025

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(First Amendment), requiring Subdivider to perform the Additional Work defined in the following plan set:
“Tracy Hills Village 7B – Tracy, California, Landsc ape Improvement P lans,” consisting of 10 sheet
s, prepared by KLA.

The esti
mated cost of the public improvements is as follows:

Cost Breakdown
Roadway Improvements $ 511,610
Water $ 219,395
Storm Drainage $ 81,565
Sanitary Sewer $ 184,993
Street Lighting $ 95,700
Landscaping $ 211,950
Total $ 1,305,213
Dedicated Land Value $ 314,000
Bonds wer
e provided by Subdivider as required by the Agreement and First Amendment in amounts as follows:

Bond Type Agreement First Amendment
Faithful Performance $ 1,082,675 $ 211,950
Labor and Material $ 1,082,675 $ 211,950
Warranty $ 108,267 $ 21,195
Monumentation $ 18,125 $ 0
Faithful
Performance Bonds may be released upon acceptance of improvements by the City.

Labor and Material Bonds may be released six months after the recordation of the Notice of Completion as the statute of limitations period expires in accordance with Tracy Municipal Code and Civil Code §9356. Warranty bond may be released one year after City acceptance of improvements and warranty work is completed.

Monument
ation Bond may be released upon the City’s receipt of a letter from the project surveyor stating full payment has been received for the installation of monumentation, per Government Code Section 66496. The City is now in receipt of said letter.

A total
of 3.14 acres has been dedicated as public right-of-way on the Final Map for Tracy Hills Village 7B, Tract 3956, and accepted by the City Clerk, subject to satisfactory completion of the improvements. The land value is estimated at $314,000. Filing of the Notice of Completion by the City Clerk will finalize acceptance of public right-of-way per Tracy Municipal Code

12.36.110.

The Subdivi
der has completed all work required to be done in accordance with the Agreement and First Amendment and has requested acceptance of the public improvements. The City Agenda Item 1.H
April 1, 2025

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Engineer has inspected the completed work and confi rmed that the improvements con form to the Agreement, First Amendment, and City specif ications and plans. Notice of Completion should now be filed by the City Clerk, t o be recorded at San Joaquin County Recorder’s Office.

The pro
ject carries a one-year Warranty Bond f or all public improvements.

ISCAL IMPACT
Al
l improvements we re completed by the Subdivider in accordance with t he Subdivision Im
provement Agreement and there is no f iscal impact. M aintenance will b e covered under the Tr
acy Hills Community Facilities District.

COORDINATION
Pr
oject construction activities were coordinated wi th the City of T racy’s Public Wo rks Department.

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION This project i s in compliance with the Final SEIR ce rtified by C ity Council and no additional study
is required.

STRATEGIC PLAN
This
agenda item is consistent with the Council approved Economic Deve lopment Strategy to ensure physical infrastructure necessary for development.

CTION REQUESTED OF THE CITY COUNCIL
That the City Council, by r esolution, (1) accept p ublic improvements for Tracy Hills Villag e 7B, Tract
3956 as complete, and assume responsibility for the fut ure maintenance and repairs, (2) authorize the City Engineer to rel ease the Subdivider furnished bonds in acco rdance with the Subdi
vision Improvement Agreement and subsequent F irst Amendment, and (3) authorize the Ci
ty Clerk to f ile a Notice of C ompletion with the San Joaquin County Reco rder’s Office.

Prepared by: Miguel Hernandez, Construction Manager
Reviewed by: Sharat Bandugula, Acting Ci ty E ngineer
Sara Cas
tro, Finance Director
Matthew Summers, Interim Assistant City Attorney
Karin Schnaider, Assistant City Manager
Approved
by: Midori Lichtwardt, City Manager
ATTA

CHMENTS
Attac
hment A – Location of Project
Attachment A

APPROVED AS TO FORM AND LEGALITY
________________________
CITY ATTORNEY’S OFFICE

TRACY CITY COUNCIL
RESO
LUTION 2025-_____
(1) ACCEPTING PUBLIC IMPROVEMENTS FOR TRACY HILLS VILLAGE 7B, TRACT 3956, AS COMPLETE AND ASSUME RESPONSIBILITY FOR THE FUTURE MAINTENANCE AND REPAIRS, (2) AUTHORIZING THE CITY

ENGINEER TO RELEASE THE SUBDIVIDER FURNISHED BONDS IN

ACCORDANCE WITH THE SUBDIVISION IMPROVEMENT AGREEMENT, AND SUBSEQUENT FIRST AMENDMENT, AND (3) AUTHORIZING THE CITY

CLERK TO FILE A NOTICE OF COMPLETION WITH THE SAN JOAQUIN COUNTY RECORDER’S OFFICE.

WHEREAS, on April 5, 2016, by Resolution No. 2016-062, City Council certified the Tracy Hills Specific Plan Final Subsequent Environmental Impact Report (Final SEIR) and adopted findings of fact, a statement of overriding considerations, and a mitigation monitoring program for the Tracy Hills Specific Plan Project (Application Numbers GPA10-0001, SPA13- 0001, ZA13-0001, DA13-0001, TSM13-0005, and TSM16-0001); and WHEREAS, on April 5, 2016, by No. Resolution 2016-066, City Council approved a Small-Lot Vesting Tentative Map for Tracy Hills Phase 1A, Application No. TSM13-0005, subject to Conditions of Approval, and found it to be in compliance with the Final SEIR; and WHEREAS, on April 16, 2019, City Council approved a Subdivision Improvement Agreement (Agreement) by Resolution No. 2019-073 with Meritage Homes of California, Inc., a California Corporation (Subdivider), for the construction of public improvements within Tracy Hills
Village 7B, Tract 3956, consisting of 91 single-family residential lots; and WHEREAS, on July 7, 2020, C ity Council approved the subsequent First Amendment to the Subdivision Improvement Agreement (First Amendment) by Resolution No. 2020-114 with Subdivider for the construction of public landscaping improvements within Tracy Hills Village 7B, Tract 3956; and
WHEREAS, the City Engineer has inspected the completed work and recommends acceptance of all the improvements completed in accordance with the Agreement and First Amendment; and
WHEREAS, Subdivider furnished Performance, Payment, and Warranty Bonds assuring completion of the work. The estimated cost of the improvements is as follows:

Cost Breakdown
Roadway Improvements $ 511,610
Water $ 219,395
Storm Drainage $ 81,565
Sanitary Sewer $ 184,993
Street Lighting $ 95,700
Landscaping $ 211,950
Total $ 1,305,213 ; and
Resolution 2025-_____

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WHEREAS, 3.14 acres, valued at $314,000, was dedicated as public right-of-way on the Final Map for Tracy Hills Village 7B, Tract 3956 and accepted by the City Clerk subject to satisfactory completion of improvements; and
WHEREAS, the acceptance of these public improvements for Tracy Hills Village 7B, Tract 3956 by the City is consistent with the certified Tracy Hills Specific Plan Final Subsequent Environmental Impact Report, approved by City Council Resolution No. 2016-062 and no further review is required under the California Environmental Quality Act; now, therefore, be it RESOLVED: That City Council of the City of Tracy hereby accepts the improvements for Tracy Hills Village 7B, Tract 3956 as complete in accordance with the Agreement and First Amendment and assumes responsibility for their future maintenance and repair; and be it FURTHER RESOLVED: That the City Council authorizes the C ity Engineer to release the Developer bonds in accordance with the terms of the Agreement and applicable law; and be it FURTHER RESOLVED: That
the City Council authorizes the City Clerk to file a Notice Of Completion
with San Joaquin County Recorder’s Office for the improvements for Tracy Hills Villa
ge 7B, Tract 3956.
* * * * * * *
* * * * * * *
The foregoing Resolution 2025-_____ was adopted by the Tracy City Council on the 1st day
of April 2025 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

COUNCIL MEMBERS:

COUNCIL MEMBERS:
____________________________

DAN ARRIOLA
Mayor of the City of Tracy, California
ATTEST: ________________________

NECY LOPEZ
Acting City Clerk and Clerk of the
Council of the City of Tracy, California
April 1, 2025
Agenda Item 1.I

RECOMMENDATION
Staff
recommends that the City Council adopt a resolution (1) accepting public improvements for Tracy Hills Village 7A, Tract 3955, as complete, and assume responsibility for the future maintenance and operations, (2) authorizing the City Engineer to release the Subdivider furnished bonds in accordance with the Subdivision Improvement Agreement, and (3) authorizing the City Clerk to file a Notice of Completion with the San Joaquin County Recorder’s Office.

EXECUTIVE SUMMARY
Meritage
Homes of California, Inc., a California Corporation (Subdivider), has completed public improvements for Tracy Hills Village 7A, Tract 3955, containing 91 single-family residential lots, in accordance with the Subdivision Improvement Agreement, project plans, and specifications.

Staff recommends City Council accept the improvements as completed, authorize City Clerk to file a Notice of Completion with the San Joaquin County Recorder’s Office, and authorize the City Engineer to release the Subdivider’s bonds.

BACKGROUND AND LEGISLATIVE HISTORY
On Apri
l 5, 2016, by Resolution 2016-062, City Council certified the Tracy Hills Specific Plan Final Subsequent Environmental Impact Report (Final SEIR) and adopted findings of fact, a statement of overriding considerations, and a mitigation monitoring program for the Tracy Hills Specific Plan Project (Application Numbers GPA 10-0001, SPA 13-0001, ZA 13-0001, DA 13- 0001, TSM 13-0005, and TSM 16-0001).

On Apr
il 5, 2016, by Resolution 2016-066, City Council approved a Small-Lot Vesting Tentative Map for Tracy Hills Phase 1A, Application No. TSM 13-0005, subject to Conditions of Approval, and found it to be in compliance with the Final SEIR.

On July
17, 2018, by Resolution 2018-136, City Council approved an Improvement and Inspection Agreement for Tract 3955, Tracy Village 7A, allowing Subdivider to proceed with construction of public improvements prior to final approval of plans and specifications.

On Septem
ber 4, 2018, by Resolution 2018-176, City Council approved the Subdivision Improvement Agreement (SIA) and Final Subdivision Map for Tracy Hills Village 7A, Tract 3955, a subdivision consisting of 91 single-family residential lots. This subdivision is generally located west of Corral Hollow Road and north of Tracy Hills Drive as shown in Attachment “A”. The SIA required Subdivider to perform the Scope of Work defined in the following plan sets:
“Improv
ement Plans Village 7A – Tract 3955 – Tracy Hills Phase 1A”, consisting of 19 sheets, prepared by Ruggeri-Jensen-Azar.
“Joint
Trench, Integral Communities, LLC, Tracy Hills-Village 7A-Tract 3955”, consisting of seven sheets, prepared by Giacalone Design Services, Inc.

Agenda Item 1.I
April 1, 2025

Page 2 ends

“Public Street Light ing, Integral Communities, LLC Tracy Hills-Village 7A-Tract 3955”, consisting of five sheets, prepared by Giacalone Design Services, Inc.

On February 19, 2019, by Resolution 2019-025, City Council approved th e First Amendment to the SIA for Tract 3955, Tracy Hills Village 7A (First Amendment), requiring Subdivider to perform the Additional Work defined in the following plan sets:
“Tracy Hills Landscape Improvement Plans – Neighborhood 7A – Tract 3955 Phase 1A”, consisting of 30 sheets, prepared by FORMA.

Structural details, consisting of two sheets, prepar ed by Harris and Sloan.

Electrical Plans, consisting of two sheets, prepar ed by Candela Engineering.

Subdivider has completed all the work required to be done in accordance with the Agreement and First Amendment and has requested acceptance of the subdivision's public improvements.

The City Engineer has inspected the completed work and confirmed that the improvements conform to the SIA, First Amendment, and City plans and specifications. The estimated cost of the public improvements is a s f ollows:

Bond Type Agreement First Amendment
Faithful Performance $ 2,415,048 $ 561,681
Labor and Material $ 2,415,048 $ 561,681
Warranty $ 241,505 $ 56,168
Monumentation $ 33,875 $ -
Faithful
Performance Bonds may be released upon acceptance of improvements by the City.

Agenda Item 1.I
April 1, 2025

Page 3 ends

Warranty Bond may be released one year after City acceptance of improvements and warranty work is completed.

M
onumentation Bond may be released upon City receipt of a letter from the project surveyor st
ating full payment has been received for the installation of monumentation, per Government Code Section 66496. City is now in receipt of said letter.

A total of 6.49 acres has been dedicated as public right-of-way on the Final Map for Tracy Hills Villa
ge 7A, Tract 3955, and accepted by the City Clerk, subject to satisfactory completion of the improvements. The land value is estimated at $649,000. Filing of Notice of Completion by the City Clerk will finalize acceptance of public right-of-way per Tracy Municipal Code 12.36.110.

A 3.61-acre park site (also known as Nei ghborhood Park 2) was also dedicated to the City on the Tracy Hills Village 7A, Tract 3955 Final Map, subject to completion of improvements. Park improvements were accepted by the City Manager pursuant to Urgency Ordinance No. 1285, on September 30, 2021.

Subdivider has completed all work required to be done in accordance with the SIA and First Amendment and has requested acceptance of the public improvements. The City Engineer has inspected t he completed work and confirmed that the improvements conform to the SIA, First Amendment, and City specifications and plans. Notice of Completion should now be filed by the City Clerk, to be recorded at the San Joaquin County Recorder’s Office. The project carries a one-year Warranty Bond for all public improvements.

SCAL IMPACT
All improvements were completed by the Subdivider in accordance with t he SIA and there is no fisca
l impact from this item. Maintenance of publ ic improvements will be f unded by the already established Tracy Hills Community Facilities District.

COORDINATION
Project construction activities were coordinated with the City of Tracy Public Works Department.

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) DETERMINATION This project is in compliance with the Final SEIR certified by City Council and no additional study
is required.

STRATEGIC PLAN
This agenda item is consistent wi th the Council approved Economic Deve lopment Strategy to ensure physical infrastructure necessa ry for development.

ACTION REQUESTED OF THE CITY COUNCIL
That the City Council, by resolution, (1) accept p ublic improvements for Tracy Hills Village 7A, Tract 3955, as complete, and assume responsibility for the future maintenance and operations, (2) authorize the City Engineer to release the Subdivider furnished bonds in accordance with the Agenda Item 1.I
April 1, 2025

Page 4 ends

Subdivision Improvement Agreement, and (3) authorize the City Clerk to file a Notice of Completion with the San Joaquin County Recorder’s Office.

P
repared by: Miguel Hernandez, Construction Project Manager Reviewed by: Sara Castro, Finance Director
Kamalpr
eet Gill, Deputy City Attorney
Karin Schnaider, Assistant City Manager
Approved
by: Midori Lichtwardt, City Manager
ATTACHMENTS:

Attac
hment A – Location of Project
Attachment A

APPROVED AS TO FORM AND LEGALITY
________________________
CITY ATTORNEY’S OFFICE

TRACY CITY COUNCIL
RES
OLUTION 2025-_____
(1)
ACCEPTING PUBLIC IMPROVEMENTS FOR TRACY HILLS VILLAGE 7A, TRACT 3955, AS COMPLETE, AND ASSUME RESPONSIBILITY FOR THE FUTURE MAINTENANCE AND OPERATIONS, (2) AUTHORIZING THE CITY

ENGINEER TO RELEASE THE SUBDIVIDER FURNISHED BONDS IN

ACCORDANCE WITH THE SUBDIVISION IMPROVEMENT AGREEMENT, AND (3) AUTHORIZING THE CITY CLERK TO FILE A NOTICE OF COMPLETION WITH THE SAN JOAQUIN COUNTY RECORDER’S OFFICE.

WHERE
AS, on September 4, 2018, City Council approved a Subdivision Improvement Agreement (SIA) by Resolution No. 2018-176 with Meritage Homes of California, Inc., a California Corporation (Subdivider) for the construction of public improvements within Tracy Hills Village 7A, Tract 3955, consisting of 91 single-family residential lots; and WHERE
AS, on February 19, 2019, City Council approved the First Amendment to the Subdivision Improvement Agreement (First Amendment) by Resolution No. 2019-025 with Subdivider for the construction of public landscaping improvements within Tracy Hills Village 7A, Tract 3955; and
WHERE
AS, the City Engineer has inspected the completed work and recommends acceptance of all the improvements completed in accordance with the SIA and First Amendment; and
WHERE
AS, Subdivider furnished Performance, Payment, and Warranty Bonds assuring completion of the work. The estimated cost of the improvements is as follows:

Cost Breakdown
Roadway Improvements $ 694,128
Water $ 393,014
Storm Drainage $ 311,964
Sanitary Sewer $ 374,000
Street Lighting $ 135,300
Landscaping $ 561,681
Total $ 2,470,087
; and
WHERE
AS, a total of 6.49 acres, valued at $649,000, was dedicated as public right-of- way on the Final Map for Tracy Hills Village 7, Tract 3955, and accepted by the City Clerk subject to satisfactory completion of improvements; and WHER
EAS, the acceptance of these public improvements for Tracy Hills Village 7A, Tract 3955 by the City is consistent with the certified Tracy Hills Specific Plan Final Subsequent Resolution 2025-____

Page 2 ends

Environmental Impact Report, approved by City Council Resolution 2016-062 and no further review is required under the California Environmental Quality Act, now, therefore, be it RESOLVED:

That the City Council of the City of Tracy hereby accepts the improvements for Tracy Hills Village 7A, Tract 3955, as complete in accordance with the SIA and First Amendment and assumes responsibility for their future maintenance and operations; and be it

FURTHER RES
OLVED: That the City Council authorizes the City Engineer to release the Developer bonds in accordance with the terms of the SIA and applicable law; and be it

FURTHER RES
OLVED: That City Council authorizes the City Clerk to file a Notice of Completion with the San Joaquin County Recorder’s Office for the improvements for Tracy Hills Village 7A, Tract 3955.
* * * * * * * * * * *
* * *
The foregoing Resolution 2025-_____ was adopted by the Tracy City Council on the 1st day
of April 2025 by the following vote:

AYES:

NOES:

ABSENT
:

ABSTENTION:

COUNCIL MEMBERS:

COUNCIL MEMBERS:
______________________________

DAN ARRIOLA
Mayor of the City of Tracy, California
ATTEST: _________________________

NECY LOPEZ
Acting City Clerk and Clerk of the
Council of the City of Tracy, California
April 1, 2025
Agenda Item 1.J

RECOMMENDATION

Staff recommends that the City Council approve amendment no. 2 to the professional services agreement with The Pun Group, LLP to add cannabis revenue auditing services.

EXECUTIVE SUMMARY

The City is required to have an annual audit of the City’s financial records by a licensed accounting firm. The City typically contracts for auditors for a period of 3 to 5 years with an option to extend the contract. In January 2021, Council approved a Professional Service Agreement with The Pun Group for Professional Auditing Services for an initial term of three years. In August 2024, Amendment 1 was approved under City Manager Authority utilizing the option to extend for an additional three years. As the base agreement already exists, staff is recommending a second amendment to the agreement to reflect the additional scope of work for Cannabis Revenue Auditing Services.

BACKGROUND

The financial records of the City are required to be audited each year by a public accounting firm.

In addition to the audit of City accounts, many grants and federal assistance programs also require a specific audit of these revenues and expenses. The Pun Group, a Certified Public Accounting (CPA) firm is used to complete the City’s audits. This contract has been extended under City Manager authority.

In October, Finance staff completed an informal request proposal for Cannabis Revenue Auditing Services to Conduct an annual Revenue Audit to validate the accuracy of the sales reported to the City by cannabis businesses during the review period. Staff received two qualified proposals.

The proposal from The Pun Group (Attachment A) has been evaluated by the Finance Department in terms of the firm’s experience, abilities, quality of proposal and price.

ANALYSIS
Staff selected the proposal of The Pun Group. This firm has excellent qualifications and their understanding of the scope of the audit was the best fit. This proposal for the additional scope of work for Cannabis Revenue Auditing Services is proposed for $26,000 per year, for two years totaling $52,000. The Pun Group has provided audit services for the City’s annual external audit since 2021 under an initial three-year contract in the amount of $295,330. In August 2024, the City Manager approved amendment number 1 in the amount of $313,407 to extend the services for another three years. With the addition of cannabis revenue auditing services, staff recommends contract amendment number 2 in the amount of $52,000 bringing the total overall contracted amount to $660,737. (Attachment B) Agenda Item 1.J
April 1, 2025

Page 2 ends

FISCAL IMPACT

The fee for additional services proposed by The Pun Group for the Cannabis Revenue Audits is $26,000 per fiscal year for a two-year total of $52,000. The total amount for the amended Agreement will not exceed $660,737 (Attachment B). This is a general fund expense and audit fees are included in the current budget. Receipts from the City’s 6% Cannabis Tax (TMC 6.40.050) offset the expense incurred for auditing services.

The Pun Group Date Amount
Original contract January 2021 $295,330
Amendment No.1 August 2024 $313,407
Amendment No.2 April 2025 $ 52,000
Total $660,737

STRATEGIC PLAN
This agenda item addresses Goal 3 of the Governance Strategy to ensure continued fiscal sustainability.

ACTION REQUESTED OF CITY COUNCIL

Staff recommends that the City Council approve, by resolution, an Amendment to the Professional Services Agreement with The Pun Group, LLP to include Cannabis Revenue Audit Services for the remainder of the three-year extended term at a cost of $52,000 with a total not to exceed amount of $660,737.

Prepared by: Sara Castro, Director of Finance
Reviewed by: Karin Schnaider, Assistant City Manager
Matthew Summers, Interim Assistant City Attorney

Approved by: Midori Lichtwardt, City Manager

ATTACHMENTS
Attachment A: The Pun Group Proposal
Attachment B: Amendment to the Professional Services Agreement (Amend. 2) Attachment C: Original Professional Services Agreement
Attachment D: Amendment to the Professional Services Agreement (Amend. 1)

CITY OF TRACY
Submitted By:

Andrew M. Roth, CPA
Engagement Partner
2121 N. California Blvd., Suite 290
Walnut Creek, CA 94596
(858) 242-5102 I [email protected]
Image Credits: John L.Nelp.com
November 5, 2024

PROPOSAL
Cannabis Revenue Audit Services
ACCOUNTANTS&. ADVISORS
Attachment A

The Pun Gr
oup LLP is recognized for its professionalism, integrity and for providing clients with practical solutions unique to their circumstances and issues. You will receive a superior level of service and a quality audit.

Thank You!
Thank you for allowing us to submit our qualifications to provide you with Cannabis Revenue Audit Services.

The Pun Group LLP
Certified Public Accountants and Business Advisors

WHY CHOOSE
THE PUN GROUP LLP?
 Big firm expert
ise, small firm values
 Personal attention meets technical expertise
 A unique firm culture
 Innovation embraced
 Achievable plans to move your organization forward
The Pun Group’s most
valuable asset is our
people, they and their
deep experience drive our
every interaction with
clients.

“
”
Kenneth H. Pun, CPA, CGMA
Founder & Managing Partner
City of Tracy
Table of Contents
Cover Lett
er ................................................................................................... 1 Understanding and Approach to the Scope of Work ..................................... 3 Experience ..................................................................................................... 8 References ................................................................................................... 16 Let’s Get to Work. ........................................................................................ 20 Appendix A – Firm Current Client List ............................................................ i Appendix B – Available Training ................................................................... iv Appendix C – Certificate of Insurance ........................................................... v

For the 4th consecutive year,
The Pun Group has been honored with the
"Best of Accounting" Award.

The Pun Group LLP is proud to have won 2024’s Best of
Accounting® award from ClearlyRated for consistently
delivering exceptional service to its clients for the fourth consecutive year.

Winners of such awards have proven to be industry leaders in service quality based entirely on ratings provided by their clients. On average, clients of 2024 Best of Accounting winners are 70% more likely to be satisfied than those who work with non-winning firms.

“I am pleased to introduce the 2024 Best of Accounting
winners alongside their validated service ratings on
ClearlyRated.com,” said ClearlyRated’s CEO, Eric Gregg. “These firms have demonstrated a remarkable commitment to delivering amazing experiences despite another year of
upheaval and macroeconomic uncertainty. Hats off to these service leaders - it’s truly an honor to recognize and celebrate their achievements.”

The Pun Group LLP received satisfaction scores of 9 or 10 out of 10 from 94.1% of their clients, significantly higher than the industry’s average of 50%.

Our firm excelled in five key areas: Responsiveness, Quality, Value, Needs Understanding, and Proactive Approach.

About ClearlyRated

Rooted in satisfaction research for professional service firms, ClearlyRated utilizes a Net Promoter® Score survey program to help professional service firms measure their service experience, build an online reputation, and
differentiate on service quality.

For the 2nd consecutive year, INSIDE Public
Accounting has recognized The Pun
Group as one of the Top 500 Firms and one
of the fastest-growing firms.

“We started using Pun Group when the
pandemic first started two years ago so
had a little apprehension about doing
everything remotely with a new firm. But
the audit went very well and was
completed on time without problem.”
Kevin W.

State and Local Government Client

“The Firm has consistently exceeded our
expectations as client.”
Clint O.

State and Local Government Client

“An excellent partner and amazing service.”
Jim T.

Private Sector Client

“Excellent customer service and staff and
partners are expert in their fields.”
Lani H.

State and Local Government Client

2121 North California Blvd., Suite 290
Walnut Creek, California 94596
City of Tracy
Cover Letter
November 5, 2024
City of Tracy
Sara Castro, Direcotr of FInance
333 Civic Center Plaza
Tracy, CA 95376
Re: RFP for Cannabis Revenue Audit Services
Dear Sara Castro:

Please allow us to introduce our Firm and share our qualifications and proposed services plan for the City of Tracy (the “City”) according to your Request for Proposals for Cannabis Revenue Audit Services.

The Pun Group LLP (the “Firm”) has the knowledge and experience necessary to become the City’s next public accounting firm and the work plan to ensure a smooth process.

This letter is an acknowledgment of the Firm’s understanding of the work to be performed. We are offering our commitment to deliver all of the required work, complete the audit, and issue the necessary auditor’s reports within the periods outlined by the City. No subcontractors will be utilized for this engagement.

The Pun Group continues to be the right choice for the City of Tracy because:

We Understand the Demographics and Your Needs. The Pun Group is reputable for its governmental practice. We have been selected to provide services such as compliance audit services, cannabis regulatory compliance inspections, tax audits, and implementation of tax collection and tax audit policies and procedures to several municipalities such as the City of Stockton, City of Salinas, City of San Bernardino, and the City of Chula Vista.

Recognized Leader in the Governmental Industry. We are a small national Firm with licenses in the States of California, Arizona, and Nevada and a proven leader in professional services to the government sector. All key engagement team professionals are licensed to practice as Certified Public Accountants and meet the Continuing Professional Education requirements under US GAO’s Government Auditing Standards to perform the proposed audits. The partners and all employees proposed to perform the requested services do not have a record of substandard audit work nor have any outstanding claim of substandard practice or unsatisfactory performance pending with the State Board of Accountancy or other professional organizations. In addition, we are members of the national AICPA Audit Quality Center.

We strongly believe that part of our success is credited to our professionals’ participation in various industry-leading organizations. Such affiliations are critical to addressing emerging accounting and auditing issues within the industry environment.

City of Tracy
2 | PUNGROUP.CPA
You’ll Wo
rk with a Team that Embraces Innovation and Continuous Improvement. Our Firm is committed to continuous improvement as it relates to service delivery. We embrace innovation and identify areas of technological enhancements in our audit and project management approaches. For example:

Secure Data File Transfer System. In order to improve audit efficiency, workflow management software plays an essential role between your organization and our engagement team. We employ a secure data file transfer system called Suralink. Suralink’s dynamic request list is integrated with our secure file hosting system for seamless document- request coordination, including the upload of large-size files. It means all our requests are in one place, updated in real-time, and accessible by everyone working on the engagement. Not only makes the operation more cost-efficient, but it also enables you and your team to spend your time getting the job done, not reconciling a messy list of outstanding items. In addition, Suralink’s dashboard allows you to visualize the process of document-request fulfillment.

AI Auditor. The Pun Group leverages the technology and research tools required to provide excellent services to its clients. With the usage of Artificial Intelligence ( AI) technology, the Firm is capable of issuing all reports requested faster than other audit firms without exposing the City to unnecessary risks.

Remote Auditing Capability. Remote working arrangements have suddenly become the “new normal” in these trying times. Our Firm has deployed top-notch technology and fully transitioned to “remote auditing,” offering our clients the quality services they deserve while being fully “remote” or operating in a “hybrid” schedule. “On-site” audits are still the Firm’s preferred method, and we’ll continue to offer and promote those as well.

Knowledge is Shared with You. As part of our pledge to keep you updated on new technical accounting and financial issues, we implemented our 2023 Virtual Government Accounting Conference, which qualifies for up to 15 hours of CPE – nearly double what other firms offer. These online sessions are free of charge and part of the service package provided to you. More details and dates can be found on the “Client Training Webinars” topic under this proposal.

The Pun Group is proud of its inclusive values and is an avid promoter of equality and diversity. In addition, the Firm is an equal-opportunity employer and complies with all federal and state hiring requirements. We’re proud of supporting affirmative-action philosophies and work hard to provide opportunities for self-enhancement to members of disadvantaged groups.

This proposal is a fir m and irrevocable offer valid for one hundr ed twenty (120) days following the closing date for the receipt of all proposals.

Finally, we would like to emphasize one additional point: We want to keep your trust and your business! We are confident that the energetic and experienced team we have assembled is the right one for the City.

Our commitment to serving the City of Tracy cannot be adequately conveyed in a letter, and I look forward to continuing the discussion with you. I’m assigned as your primary contact for contract negotiations and stand steadfast to serve as your engagement/lead partner. I’m also authorized to legally bind the Firm. Should you have any questions or wish to discuss this proposal, please do not hesitate to contact me at (858) 242-5102 or by email at [email protected].

Sincerely,
Andrew M. Roth, CPA | Partner | The Pun Group LLP
2121 North California Boulevard, Suite 290, Walnut Creek, CA 94596

City of Tracy
3 | PUNGROUP.CPA
Understanding and Approach to the Scope of Work
Scope
of Work, Audit Approach, and Methodology
The City of Tracy is requesting the Firm to perform Cannabis Revenue Audit Services. The Firm will provide the requested services by:
 Obtaining an understanding of the City’s request
 Utilizing our experience and background in cannabis audit services  Obtaining an understanding of the City’s cannabis tax ordinance and other industry regulations In addition, the Firm will:
 Conduct an annual Revenue Audit to validate the accuracy of the sales reported to the City during the review period. The Revenue audit tasks could include, but are not limited to:
o Review of point-of-sale reports, bank statements, profit and loss statements, and inventory purchases to determine if unrecorded sales might have taken place.
o Review of Sales taxes reported to CDTFA.
 Issue Audit Notification letters, as approved by the City, to each cannabis business.  Provide a draft audit report to the cannabis business, allowing them sufficient time to respond or appeal in accordance with the City ordinance. The firm will review any documentation submitted by the business to dispute the findings and will adjust the tax or fee assessment as necessary before issuing the final report to the City.
 Issue the Final Audit report and include the methodology used to conduct the revenue audit and audit findings.
 Coordinate with the City at the time of each audit.

Approach to Work
In order to deliver the services requested by the City of Tracy, the Firm will perform the following steps:

Cannabis Business
Gross Receipts and
Square Footage
Taxes
 Evalu
ate consistency between gross receipts and other information reported on financial statements to what was reported to the California Department of Tax and Fee Administration for sales and use tax, cannabis excise tax, and/or cultivation tax.  Evaluate consistency between gross receipts reported on financial statements to gross receipts reported to the City.
 Verify the cultivation canopy as compared to the maximum canopy reported on the business license application. Cultivation canopy is measured by the aggregate area of vegetative growth of live marijuana plants on the premises, including the area occupied by vertically and horizontally stacked canopies, in compliance with City’s Code. This will be calculated by measuring the distance of all cultivation canopies in square feet.

Collection and
Audit
of any Cannabis
Tax
 Ensu
re each cannabis facility is complying with applicable portions of the City’s Code and is submitting the true amount of gross receipts and tax.

City of Tracy
4 | PUNGROUP.CPA
Collection and
Audit of any
Cannabis Tax
(Continued)
 Revi
ew business license tax returns submitted by the business and collected by the City and compare to each business’s records for the time period identified by the City to determine the accuracy and timeliness of gross receipts returns filed with the City:
a. Trace and verify the gross receipts reported on the quarterly gross receipts returns prepared by the business to gross receipts recorded in the business’s accounting records to verify that these were in accordance with the City’s regulations; b. Verify compliance with City’s Code.
c. Verify the reasonableness of reported revenues of the cannabis businesses by performing additional procedures necessary to reach a conclusion.  Following the completion of a business license tax audit of each cannabis facility, we will issue all reports to the City in accordance with applicable standards from generally accepted auditing standards (GAAS).
 The report for each cannabis business license tax audit will include the following information:
a. The overall conclusion of whether or not the cannabis business paid all required business license taxes and fees for the time period specified. b. Any exceptions, errors, or areas of noncompliance were identified as a result of the procedures performed. This includes any significant deficiency in the design or operation of the internal control structure, including but not limited to the following areas: cash handling, inventory control, point of sale systems, and any other areas that the auditor deems necessary for purposes of accurately reporting business license taxes due to the City.
c. Express an opinion regarding the taxes remitted to the City by the cannabis business, or state that an opinion cannot be expressed in the auditor’s report. If the Firm concludes, it cannot express an overall opinion. The engagement team will state the reasons, therefore, in the auditor’s report.  Examine records and documentation that demonstrate that all cannabis goods have been obtained from, and are provided to, other licensed cannabis businesses and that details all the revenues and expenses, and assets and liabilities of the business.  Examine books of account, invoices, copies of orders and sales, shipping instructions, bills of lading, weigh bills, bank statem ents, including canceled checks and deposi t slips, and all other records necessary to show all transactions of the cannabis business.

City of Tracy
5 | PUNGROUP.CPA
Methodology and Segmentation of Engagement
Cannabis Tax Audit
Once an audit date has been confirmed with the Licensee, a pre-audit list of documentation we will need in order to perform
our audit will be provided to the Licensee prior to the audit date. Firm dues dates for all documentation will be communicated through the letter.

Below is an example of what documents we will need in order to perform the business license audit:
 Copy of business license.
 Down
load from the Licensee P.O.S or other ERP for all sales transactions for the period under audit.  Obtain a copy of the business license tax remittance under audit.  Detailed general ledger for the period under audit for sales and purchase transactions.  Obtain federal and state tax returns.
 Obtain sales tax returns.
 Cash / safe log or bank statements for the period under audit.

We will conduct an interview with the Licensee to obtain an understanding of their internal controls over cash receipts, rev
enue, sales, purchases, or other identified significant transaction classes to determine what processes and procedures are in place to properly identify and record those transactions. Suppose inadequate controls are not in place; additional procedures or testing samples may be needed.

Our Firm will also use MindBridge AI Auditor to perform financial analysis of 100% of sales and purchase transactions, with zero s
criptings, meaning we can provide greater assurance than ever before. With Ai Auditor, cumbersome CAAT tools are a thing of the past, and with them goes the associated risk of missing errors or fraud that may lurk in financial data. The AI platform is stacked with traditional tests based on domain expertise and business rules. The analysis is also greatly enhanced. Statistical methods like regression and Benford’s Law are applied, as are numerous machine learning algorithms and AI seeded with knowledge from the domain expertise of some of the world’s top CPAs.

We will then calculate the cost of goods sold and evaluate whether the amount is reported accurately to the tax returns
and other reports.

In addition, we will:
 Compare sales data from the general ledger or P.O.S. to the sales tax returns and investigate any significant v
ariances.
 Test sales, purchase, and cash log / safe transactions on a sample basis and obtain the necessary supporting documents related to the transaction to determine the accuracy and whether identified controls are being followed.
 For cultivation facilities, compare the total maximum canopy as indicated on the business license application with the auditor-measured maximum canopy.

City of Tracy
6 | PUNGROUP.CPA
Tasks and Deliverables
 Initial meeting with the City’ dedicated team to determine the competition schedule of the audits of business licenses and finalize the report template.
 We request the City to initially communicate to all licensees that audits will be performed by a third-party auditor within an agreed-upon timeframe.
 Our project team will reach out to licensees to confirm onsite audit dates.  Our project team will also facilitate and assist licensees in gaining access to the secured Suralink portal and walkthrough pre-audit request items to Licensee.
 Engagement team to review all the uploaded documentation prior to the onsite audit and run a detailed general ledger on the MindBridge Ai Auditor software. Also, our team will detail our audit work plan and make sample selections based on the risk analysis identified through the system.  Based on the analysis performed and sample selection, our audit team will perform a site visit and obtain audit evidence in order to complete our audit task.
 After completion of the audit task, a draft custom-tailored report and presented to the City for revi ew.  Upon completion and approval from City officials, we will obtain Management Representation Letter from the Licensee and finalize the report.

Other Specific Tasks
All specific tasks that we will require are clearly communicated and agreed upon at the initial meeting with the City.

We request the City staff to formally communicate a clear timeframe and completion schedule with the Licensee, and the audit task will be completed by the Firm. Our firm’s responsibility is to communicate with the City on the progress and any challenges identified timely.

Our project team will obtain copies of all business license tax remittances for licensees for the period under audit and will perform testing surrounding the completeness of the sales transactions to report any differences between our audit and the tax remittances.

All findings will be communicated to the City and the Licensee upon the completion of our analysis.

City of Tracy
7 | PUNGROUP.CPA
Full-Time Government Auditors
As full-time government auditors, we understand that governmental entities do not operate
independently but in an increasingly complex web of local, state, and federal relationships. We know how these relationships work, what they mean at the local level, and how every public organization’s focus on resource management is critical to success.

Also, while many accounting Firms can provide services, not all can build an exce
llent working relationships with their clients. The Pun Group LLP prides itself on developing lasting, personal relationships with our clients. Our hands-on partner involvement and low personnel turnover are crucial tools to our success and are highly beneficial to the City.

Local Office’s Information Technology (IT) Audit Capabilities The Pun Group LLP continues our efforts to invest in our IT system to enhance our security further and promote audit efficiency.

Top security for your data is the key to our success. When we h ave your data virtualized, our Firm takes all the preventive steps to avoid putting your information at risk. Our In-House IT administrator maintains our server to ensure our IT environment is continuously updated with the latest security fixes. Through VPN and Microsoft Remote Desktop, our In-House network administrator can lock down files and system access from a single point, li miting the ability of remote sites to take data from our server.

Access to systems from anywhere and anytime. With m
ore mobility being the
norm rather than the exception, our engagement team needs robust access to the engagement files when they are working in your office. Accounting and Auditing Software applications are installed in our “Private” server and can be securely accessed through VPN and Microsoft Remote Desktop. The Firm uses CCH ProSystem fx® Engagement for audit documentation, which allows real-time synchronization of the work papers and instant collaboration quality control review.

Suralink’s dynamic request list is integrated with our secure file-hosting system for seamless document-request coordination. It means all our requests are in one place, updated in real-time, and accessible by everyone working on the engagement. As a client, you no longer have to manually maintain a spreadsheet amongst several people, only to repeat the process in a day or two. Not only makes the operation more cost-efficient, but it also enables you and your team to spend your time getting the job done, not reconciling a messy list of outstanding items.

The Suralink dashboard, as shown below, allows you to visualize the process of document-request fulfillment.

BIG FIRM EXPERTISE.

SMALL FIRM VALUES.

Our professional backgrounds at major national
firms showed us how to solve complicated
business and accounting challenges, but the
sense of personal connection was missing.

We launched The Pun Group because we believe
every client deserves to work with experienced
business advisors and CPAs who have the time –
and take the time – to create an authentic
connection. Every client is our top priority!
A UNIQUE CULTURE.
“Personalization” is not just a buzzword – it’s part
of our firm’s culture. We take a personal approach
to everything we do. We collaborate with our
clients, so they’re always part of the process. We
listen to our staff to make sure they have the right
support and resources to do a great job. Getting to
know others and discovering how we can serve
them better is not just a sign of good business
practices; it’s a sign of good people.

INNOVATION EMBRACED.

New ideas keep you ahead of the game. From
leveraging the value of emerging technologies to
further refining trusted processes, we adopt proven
solutions to meet your needs.

WHERE YOU GO, WE GO.

WHERE YOU GROW, WE GROW.

Our success is defined by how you achieve yours.

Partner with accomplished accounting and
financial professionals who are laser-focused on
taking your business to the next level.

City of Tracy

8 | PUNGROUP.CPA
Experience

About the Firm

Established in 2012, The Pun Group, LLP stands as a limited liability partnership comprising a team of sixty dedicated professionals who specialize in providing auditing, accounting, and advisory services.

Our firm, which includes Certified Public Accountants and Business Advisors, has garnered recognition as one of the foremost accounting entities in Orange County, as acknowledged by the Orange County Business Journal. Additionally, we proudly secure a place among the CalCPA Top 150 firms.

Our distinction within the industry lies in the fusion of hands-on experience and pragmatic knowledge demonstrated by our audit professionals. This combination sets our firm apart. We possess a profound grasp of prevailing regulations and issues bolstered by our technical acumen. Furthermore, our commitment to diligence, integrity, and collaborative teamwork is evident in every engagement we undertake, thus contributing to our clients' success.

The Partners’ Group is a distinguished assembly comprising notable professionals such as Kenneth Pun, Frances Kuo, Coley Delaney, Andrew Roth, John G eorger Jr., Jim Fritzsche, and Sophia Kuo. We specialize in providing auditing, accounting, and advisory services to numerous governmental entities across the United States. With a collective experience of over two centuries, we have established ourselves as a trusted business ally and have gained recognition as industry leaders in a rapidly expanding market. Our dedication to the field is evident through our work with nearly 100 government and not-for-profit audit clients, demonstrating our unwavering passion and unparalleled municipal experience.

Moreover, our practices adhere to professional standards embraced nationwide within the United States of America, including the rigorous criteria outlined in the Government Auditing Standards issued by the Comptroller General of the United States.

The Firm’s headquarters are located in Orange County, California, with five branches in San Diego, Walnut Creek, Sacramento (California), Las Vegas (Nevada), and Phoenix (Arizona).

Our Walnut Creek office , located at 2121 North California Blvd., Suite 290, Walnut Creek, CA 94596, will perform the requested services for the City. However, we may assign additional staff from our other offices to the engagement at no extra cost to the City. No subcontractors will be used in this engagement.

Global Capabilities

The Pun Group LLP is an independent member of Allinial Global, an association of over 100 independent accounting and consulting firms. Based in North America, Allinial Global offers international support by connecting its member firms to providers and global networks of accounting firms worldwide.

OUR

AFFILIATIONS

OUR FIRM

AT A GLANCE
65 full-time auditing,
accounting, tax and
advisory professionals
One of the fastest growing
firms serving California,
Nevada and Arizona
6 offices across
3 states
Client retention rate:
90 – 95%
City of Tracy
9 | PUNGROUP.CPA
Our Services
Our partners and seasoned professionals are always available, guiding clients through their periods of rapid growth as well
as difficult times. We are able to do that by offering a portfolio of accounting services that are as diverse as the jurisdictions and entities themselves. The Pun Group LLP has successfully provided professional auditing, accounting, financial reporting, and management advisory/consulting services to a broad spectrum of governmental entities.

ASSURANCE ADVISORY OTHER SERVICES
 Financial statements audits
 Compliance audits
 Performance audits
 Internal audits
 Service organization
controls audits
 Operational reviews/risk
advisory services
 Forensic investigation
 Financial condition
analysis
 Organizational structure
review
 Cash flow analysis
 Debt restructuring
consultation
 Litigation restructuring
consultation
 Assistance with the
preparation and review of the
Annual Comprehensive
Financial Report
 Government property lease
excise tax compliance review
 Sub-recipient monitoring
 Implementation of new GASB
pronouncements
 Audit readiness services
 Contract Finance
Director/Accountant services
Cannabis Compliance Services
Many cities have authorized commercial cannabis to operate within their local jurisdiction.

Compliance issues are common in California’s newly regulated cannabis industry, which is no surprise given the complexity of the state’s regulatory landscape.

The Pun Group
LLP has developed a platform to guide government agencies and commercial enterprises through the new and challenging steps in this emerging market. We have partnered with Simplifya, which has developed a cloud- based government agency/licensee compliance solution. Simplifya, headquartered in Denver, Colorado, and at the forefront since legalization in Colorado, has been an industry leader in commercial cannabis compliance since 2016.

This new software allows government agencies to monitor their licensees at every stage of the approval process, from initial licensing to renewal and continuing disclosure requirements. Your communities demand that these new cannabis businesses operate based on the ordinances that you have passed. We can help ensure businesses are working in compliance, and when they are not, your team receives an immediate notification.

The Pun Group
LLP has proven itself as a leader in the assurance and advisory field in the government arena. With the addition of Simplifya to our service offering, we have strengthened our position as a leading firm to help with your compliance needs and in unconventional areas as they emerge.

Who We Are
The engagement team was carefully selected to provide the City with all the services needed to complete the audit successfully. Your assigned Engagement and Technical Partners will be personally involved in the project, leading a team that has significant experience in governmental auditing. You can be confident that our broad experience and technical capabilities will allow us to provide technical support, interpret findings, and offer practical solutions to any issues that may arise.

Because of the “familiarity threat” under the professional audit and independence standards that may exist in long- term relationships with audit firms, the Firm is committed and has sufficient resources to rotate engagement partners, managers, and or supervisors assigned to the City’ audit with personnel with similar or higher qualifications and experience in order to overcome this threat.

If the Firm changes key personnel, we will provide the City with a written notification. Engagement partners, managers, and specialists will only be changed with the express prior written permission from the City. Audit personnel may be replaced only by those with similar or better qualifications and experience.

City of Tracy

10 | PUNGROUP.CPA
About the Team Assigned to the Project

The engagement team was carefully selected to provide the City with all the services needed to complete the scope of services successfully. They are fully qualified to perform financial accounting services for the City, and their extensive experience will be critical to the process. You can be confident that our broad experience and technical capabilities will allow us to provide technical support, interpret findings, and offer practical solutions to any issues that may arise.

The Pun Group Engagement Team

Andrew M. Roth, CPA │ Engagement/Lead Partner
Andrew Roth holds the position of Partner within the organization and will act as the primary liaison for your team. He possesses an Advanced Certification in Single Audits bestowed by the AICPA (American Institute of Certified Public Accountants). With an extensive decade- long tenure in the realms of government and not-for-profit sectors, Andrew boasts a diverse range of proficiencies.

Mr. Roth will actively serve as the Engagement/Lead Partner, overseeing the Engagement Team, developing the audit plan, reviewing fieldwork for quality, approving final reports, and communicating with the Finance Department. He will also be responsible for the timely delivery of all services to the City.

Masood Yousufzai | Revenue Analyst

Masood Yousufzai, a Manager within the Firm, brings over six years of experience in governmental accounting, with a strong focus on financial reporting, forecasting, and fiscal data analysis. In his role as a Revenue Analyst, he collaborates closely with Mr. Siris, working on key aspects such as ledgers, journals, and comprehensive financial reports.

Mr. Yousufzai’s expertise in policy development, particularly concerning tax remittance and the City’s tax collection capabilities, positions him to provide essential support to the Engagement Manager. He plays a crucial role in planning and executing detailed audit procedures, identifying potential risks unique to the cannabis industry, and ensuring that all audit activities adhere to the highest standards and regulatory requirements. His contributions are vital to delivering precise and insightful analyses that support the City’s compliance and financial objectives.

Christopher Quezada | Senior Auditor
Christopher is a Senior Auditor within the Firm. He will secure the effective implementation of the services approach while assisting in the timely delivery of the requested services.

Mr. Quezada will serve as the primary point of contact for your team and will work to ensure the services are conducted within the deadlines and will provide updates on our team’s progress to the partners and you.

Zeeshan Siddiqui | Advisory Associate

Zeeshan Siddiqui, an Advisory Associate, supports the audit process for City staff, Mr.Roth, and Mr. Yousufzai by assisting in planning, risk identification, and compliance. His expertise helps ensure accurate and thorough audit reports that meet the City's regulatory needs.

He will ensure timely task completion and maintain clear communication between the engagement team and the City.

City of Tracy
Continuing Education and Professional Development
Because of our commitment to providing the highest quality of services to the City, we provide our professionals with technical training to ensure our people stay current on topics within the industry sectors and better equip themselves to serve our clients.

All professionals are required to obtain continuing education that exceeds the requirements of the American Institute of Certified Public Accountants (AICPA) and, where applicable, Government Auditing Standards. Our professionals participate in continuing education programs through the following means:
 Governmental Accounting and Auditing Conference sponsored by AICPA.  Webinar sponsored by AICPA Government Audit Quality Center.  Annual Conference sponsored by California Society Municipal Finance Officers.  Governmental Accounting and Auditing Conference sponsored by CalCPA.  The Pun Group in-house training on government-specific topics, including but not limited to: GASB updates, Government Auditing Standards Revision, Fraud in State and Local Governments, COSO Internal Control- Integrated Framework, Audit of State and Local Governments, Single Audit, and Mindbridge AI Auditors™.

In 2023, our government professionals received an average of 52 hours of continuing professional education, compared with the 40 hours of accounting industry requirement.

By expanding our knowledge through these seminars/conferences, we can provide the right solutions to our clients.

Staff Continuity
The Pun Gr oup LLP is committ ed to mai ntaining staff continuity thr oughout audit engagements, an d we can assure you that the partners assigned to this audit will be involved throughout the entire contract term.

While we cannot guarantee that our staff-level members will stay with the Firm, we encourage loyalty by paying competitive wages, offering opportunities for promotion, using state-of-the-art equipment, and providing excellent working conditions. Also, we offer benefits, including retirement plans, medical plans, profit-sharing programs, and continuing education.

Quality-Control System
Our Firm meticulously monitors the quality and contents of our reports. The Pun Group LLP is 100% committed to providing only the highest grade of work possible for our clients and for those who rely on our audits. The Firm strives to exceed professional industry standards because of the continuing respect for our clients and our emphasis on creating long-lasting relationships. The Pun Group LLP works exclusively with those who share the same moral integrity and values.

Our quality-control system has been crafted with exce llence in mind. It not only meets AICPA sta ndards but also matches our own elevated standards, which include following various professional development activities.

Engagement Team Resumes
The City of Tracy deserve experienced professionals who work as a team. The Pun Group LLP will provide qualified
professionals to perform the audit. No subcontractors will be utilized to perform the requested services. Resumes for key engagement team members are presented as follows:
11 | PUNGROUP.CPA

City of Tracy
12 | PUNGROUP.CPA

EXPERIENCE
Andrew Roth holds the position of Partner at The Pun Group, LLP, bringing to the table a wealth of experience spanning over twelve years in the governmental and not-for-profit sectors. His expertise encompasses a wide array of domains including financial audit and reporting adhering to both governmental and financial accounting standards. Andrew possesses adept skills in assessing internal controls following the principles outlined in the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Integrated Framework. He is also well- versed in conducting Single Audits within the framework of Uniform Guidance, overseeing the subrecipient monitoring process for Federal Grants, managing corporate financial reporting, leveraging data analytics, and navigating through matters of exempt taxation.

His client portfolio is diverse, comprising moderat e to large municipalities encompassing cities and counties, municipal transportation districts, wa ter districts, municipal electric utilities, and not-for-profit organizations driven by a miss ion to build communities. Andrew effectively oversees governmental agency clients with federal grant expenditures ranging from $100 million to $750 million annually.

In his various engagements, Andrew has taken charge of leading service delivery. This has entailed active involvement in planning processes, implementing audit work plans, supervising multiple audit teams, and providing regular team updates on shifts in compliance testing requirements for Single Audits. He has been inst rumental in preparing essential deliverables, including Annual Comprehensive Financial Reports, Single Audits, Compliance Reports, Data Collection Forms, and presentations to City Councils and Boards. Additionally, he has contributed his expertise as a guest speaker, covering topics related to Federal grants such as updates to Yellow Book Standards, Compliance Auditing, and changes in Uniform Guidance Procurement Requirements.

EDUCATION
San Diego State University
B.A. Degree – Accounting

LEADERSHIP & AFFILIATIONS
 Member, American Institute of Certified Public Accountants (AICPA)  Member, California Society of Certified Public Accountants (CalCPA)

RELEVANT EXPERIENCE
 City of Redlands  County of Imperial
 City of Fresno  City of Calexico
 City of San Bernardino  City of Shafter
 San Bernardino County  City of National City

CONTINUING PROFESSIONAL EDUCATION
Various courses offered by the Firm online through Thompson Reuters, AICPA, and CalCPA Education Foundation, including:
 Governmental and Nonprofit Annual Update
 Government Auditing Standards
 GASB Basic Financial Statements for State and Local Governments  Single Audits: Uniform Guidance (formerly OMB Circular A-133)  Financial Accounting Standards Board Annual Updates
 Statement on Standards for Accounting and Review Services Updates Has met/exceeded the current CPE educational requirements to perform audits of governmental agencies.

Andrew M. Roth
CPA
Engagement/
Lead Partner
EMAIL
[email protected]
WEBS
ITE
www.pungroup.cpa
Expertise:

CI TI ES

COUNTI ES

TRANSPO RTATIO N
AG
ENCIES

ENTERPRISE

O PERATIO
NS
HIG H
ER

EDUCATION

NOT-FOR-PROFIT
Licen sed t
o Practice in:

California
Arizona

City of Tracy
13 | PUNGROUP.CPA

EXPERIENCE
Masood Yousufzai is a Supervisor at The Pun Group LLP with more than six years of experience in providing accounting and audit services, internal control and risk evaluation, and business consulting to privately held and public companies with clients in a variety of industries, including large not-for-profits entities, insurance carriers, manufacturing and distribution, and government entities. Mr. Yousufzai worked as an Internal Audit and Special Projects Manager prior to joining the Firm.

Masood has been responsible for managing, planning, and performing financial and regulatory external and internal audits and for developing and conducting internal control procedures and risk assessment evaluations. He has evaluated key processes within companies to determine areas of operating inefficiencies or potential internal control weaknesses and developed findings into recommended courses of action and into report comments and recommendations for resolution.

Mr. Yousufzai has provided accounting support services to local not-for-profits and governments, including financial statement analysis and preparation.

EDUCATION
California State University Bakersfield
B.A. Political Science
California State University Northridge
M.P.A. Degree
– Public Administration
University of California Irvine
Applied Accou
nting Program

LEADERSHIP & AFFILIATIONS
 Member, California Society of Certified Public Accountants (CalCPA)

RELEVANT EXPERIENCE
 City of Bell  City of Gardena
 City of Desert Hot Springs  City of Palm Springs
 City of Seal Beach  City of Phoenix (Subrecipient Monitoring)  City of Corona  City of San Jose (Subrecipient Monitoring)  City of Perris  South Bay Cities Council of Governments

CONTINUING PROFESSIONAL EDUCATION
Various courses are offered by the Firm online through Thompson Reuters, AICPA, and CalCPA Education Foundation, including:
 Governmental and Nonprofit Annual Update
 Government Auditing Standards
 GASB Basic Financial Statements for State and Local Governments  Single Audits: Uniform Guidance (formerly OMB Circular A-133)  Financial Accounting Standards Board Annual Updates
 Statement on Standards for Accounting and Review Services Updates Has met/exceeded the current CPE educational requirements to perform audits of governmental agencies.

Masood Yousufzai
Revenue Analyst
EMAIL
[email protected]
WEBS
ITE
www.pungroup.cpa
Expertise:

CI TI ES

TRANSPORTATIO N
AG
ENCIES

ENTERPRISE

O PERATIO
NS

NOT-FOR-PROFIT

CANNABIS AUDIT
& COM P LI
ANCE

City of Tracy
14 | PUNGROUP.CPA

EXPERIENCE
Christopher Quezada is a Senior Auditor at The Pun Group LLP, with over three years of specialized experience in accounting and auditing. He has a strong track record of successfully performing audits and providing attestation services for a wide range of clients, including governmental agencies, nonprofit organizations, and other entities. His expertise spans financial statement audits, compliance reviews, and internal control assessments, making him well- equipped to handle complex audit engagements with precision and efficiency.

Mr. Quezada holds a Bachelor of Science (B.S.) in Business Administration and Accounting from San Diego State University. His combination of technical expertise and strong communication skills ensures a seamless experience for clients throughout the engagement.

EDUCATION
San Diego State University
Bachelor of Science (B.S.),
Business Administration: Accounting
Candidate for the Uniform CPA Exam

LEADERSHIP & AFFILIATIONS
 Member, California Society of Certified Public Accountants (CalCPA)  Member, American Institute of Certified Public Accountants (AICPA)  Member, Allinial Global (AG Connect)

RELEVANT EXPERIENCE
 City of Fresno  City of Napa
 County of San Bernardino  Family Health Centers of San Diego  San Diego Metropolitan Transit System  Santa Fe Irrigation District  City of Tracy
 City of San Mateo
 City of Calexico
 City of Madera
 City of Redlands
 City of Rohnert Park

CONTINUING PROFESSIONAL EDUCATION
Various courses offered by the Firm, online through Thompson Reuters, AICPA, CalCPA, AG Connect, Education Foundation, including:
 Governmental and Nonprofit Annual Update
 Government Auditing Standards
 GASB Basic Financial Statements for State and Local Governments  Single Audits: Uniform Guidance (formerly OMB Circular A-133)  Financial Accounting Standards Board Annual Updates
 Statement on Standards for Accounting and Review Services Updates  Professional Development
Has met/exceeded the current CPE educational requirements to perform audits of governmental agencies.

Christopher
Quezada
Senior Auditor
EMAIL
[email protected]
WEBS
ITES
www.pungroup.cpa
Expertise:

CI TI ES

TRANSPO RTATIO N
AG
ENCIES

CHIL D CARE

AG ENCI
ES

ENTERPRI SE

O PERATIO
NS

NOT-FOR-PROFIT

SINGLE AUDIT
COM P
LIANCE

CANNABIS AUDIT
& COMP LI
ANCE

City of Tracy
15 | PUNGROUP.CPA

EXPERIENCE
Zeeshan Siddiqui serves as an Audit Associate in The Pun Group, LLP's governmental assurance division. Over his tenure at The Pun Group, LLP, Zeeshan has demonstrated his value as a valuable asset during engagements with governmental and not-for-profit entities.

His experience includes conducting audits and providing attestation services for diverse clients across California. These clients encompass not-for-profits, cities, transportation agencies, enterprise operations, and special districts. Ze eshan plays crucial roles in fieldwork, engaging directly with clients and contributing to the advisory sub-recipient monitoring reports.

EDUCATION
Long Beach State University
B.S. Degree – Business Administration, focus in Accountancy

RELEVANT EXPERIENCE
 City of San Jose sub-recipient monitoring  City of Corona  City of Phoenix sub-recipient monitoring  City of Stockton  City of Gardena  City of Patterson
 City of Palm Springs  City of Placerville
 City of Tracy  City of Desert Hot Springs

CONTINUING PROFESSIONAL EDUCATION
Various courses offered by the Firm, online through Thompson Reuters, AICPA, CalCPA Education Foundation, including:
 Governmental and Nonprofit Annual Update
 Government Auditing Standards
 GASB Basic Financial Statements for State and Local Governments  Single Audits: Uniform Guidance (formerly OMB Circular A-133)  Financial Accounting Standards Board Annual Updates
 Statement on Standards for Accounting and Review Services Updates Has met/exceeded the current CPE educational requirements to perform audits of governmental agencies.

Zeeshan Siddiqui
Adviso
ry
Associate
EMAIL
[email protected]
WEBS
ITE
www.pungroup.cpa
Expertise:

CI TI ES
GR
ANT
COM P
LIANCE

TRANSPO RTATIO N
AG
ENCIES

ENTERPRISE

OPERATIONS
NO

T-FOR-PROFIT

CANNABIS AUDI T
& COM

PLIANCE

City of Tracy
16 | PUNGROUP.CPA
References
The Pun G
roup LLP has performed the following examples of some of the engagements with similar requirements as the City of Tracy’s proposal. Additional references are available upon request. Please feel free to contact these agencies to learn more about their experiences working with us.

City of Cudahy
5220 Santa Ana Street
Cudahy, CA 90201
Mr. Joshua Calhoun, CPA | Finance Director / City Treasurer Phone: (323) 773-5143 ext: 225 | Email: [email protected] Services Provided: Agreed-upon procedures related to the payment of tax, operators, permit – audit/reporting requirement, and access to records and facilities of all licensed cannabis businesses located within the City for the period of January 1, 2023, through December 31, 2023. Services included:
 Obtain and read the City’s Cannabis Business License Tax Ordinance SMC.  Obtain from licensees all quarterly gross receipts reports submitted to the City for the year ended December 31, 2023.
 Obtain from licensees all cannabis business license tax forms submitted to the City for the year ended December 31, 2023.
 Compare the gross sales obtained from licensees' records to the amounts reported to the City for the year ended December 31, 2023.
 Identify all revenues to be included in the tax calculation and recalculate taxes remitted to the City for the year ending December 31, 2023.
 Determine whether the annual business license tax was calculated correctly and if any additional fees are owed to the City for the year ended December 31, 2023.

City of Salinas
City Hall, 200 Lincoln Avenue
Salinas, CA 93901
Megan Hunter, Director of Community Development Department Phone: (831) 758-7387 | Email: [email protected] Services Provided: Agreed-upon procedures related to the payment of tax, operators, permit – audit/reporting requirement, and access to records and facilities of all licensed cannabis businesses located within the City for the period of January 1, 2020, through December 31, 2020, and January 1, 2021 – December 31, 2021. Services included:
 Obtain and read the City’s Cannabis Business License Tax SMC.  Obtain from licensees all quarterly gross receipts reports submitted to the City for the years ende d December 31, 2020, and 2021.
 Obtain from licensees all cannabis business license tax forms submitted to the City for the years ended December 31, 2020, and 2021.
 Compare the gross sales obtained from the Licensee's records to the amounts reported to the City for the years ended December 31, 2020, and 2021.
 Identify all revenues to be included in the tax calculation and recalculate taxes remitted to the City for the years ended December 31, 2020, and 2021.
 Determine whether the annual business license tax was calculated correctly and if any additional fees are owed to the City for the years ended December 31, 2020, and 2021.

City of Tracy
17 | PUNGROUP.CPA
City of Stockton
City Hall, 425 N. El Dorado St.

Stockton, CA 95202
Mr. Matt Paulin, CFO
Phone: (209) 937-8460 | Email: [email protected] Services Provided: Agreed-upon procedures related to the payment of tax, operators, permit – audit/reporting requirement, and access to records and facilities of all licensed cannabis businesses located within the City for the period of January 1, 2018, through December 31, 2018, January 1, 2019 – December 31, 2019, and January 1, 2020 – December 31, 2020. Services included:
 Obtain and read the City’s Cannabis Business License Tax SMC.  Obtain from licensees all quarterly gross receipts reports submitted to the City for the years ended December 31, 2018, and 2019.
 Obtain from licensees all cannabis business license tax forms submitted to the City for the years ended December 31, 2018, and 2019.
 Compare the gross sales obtained from the Licensee's records to the amounts reported to the City for the years ended December 31, 2018, and 2019.
 Identify all revenues to be included in the tax calculation and recalculate taxes remitted to the City for the years ended December 31, 2018, and 2019.
 Determine whether the annual business license tax was calculated correctly and if any additional fees are owed to the City for the years ended December 31, 2018, and 2019.

City of Tracy
18 | PUNGROUP.CPA
Fee Proposal
Certification
We are co
mmitted to the performance of a high-quality audit at the most reasonable fee level possible, both initially and throughout the engagement. Also, our partners will provide advice and consultation as needed at no additional cost to the City of Tracy.

Name of Firm: The Pun Group LLP – Certified Public Accountants and Business Advisors Contact Name: Andrew M. Roth, CPA
Contact Email Address: [email protected]
Authorization to Represent the Firm
I, the undersigned, certify I am duly authorized to represent The Pun Group LLP and am empowered to submit this
bid. In addition, I certify I am authorized to contract with the City of Tracy on behalf of the Firm.

N o v e m b e r 5 , 2 0 2 4
_________________________________________ _______________________________ Andrew M. Roth, CPA | Partner Date
The Pun Group
LLP
Cost Proposal
Our proposed fees for Cannabis Revenue Audit Services are as follows:
*Out-of-poc
ket travel expenses will be billed separately and are estimated to be 4 weeks of travel for two (2) professionals for onsite work during the initiation and data-gathering phase, attendance at meetings, and attendance at budget hearings.
**Price quoted per Business site. The total amount will depend on the number of Business sites being audited each fiscal year.

Work to be performed: Year One
Cannabis Financial Audit Services Price / Business site 6,500$ Cannabis Financial Audit Process Included
Optional Services - Report per businesses verifying ownership Included Optional Services - Review report provided to the CDTFA Included (4 Business sites) Total Price * ** 26,000$

City of Tracy
19 | PUNGROUP.CPA
Rates for Additional Professional Services
Below are the Firm’s hourly billing rates, delineated by staffing levels:

Any supp
lemental reports, audits, or agreed-upon procedures not covered by this proposal may be added to a written agreement prior to commencing audit work. The Firm and the City will discuss and approve the scope and associated costs of these tasks. Any additional work will be performed at the above-quoted hourly rates.

Manner of Payment
Engagement Team members are required to maintain timesheets detailing the date, number of hours, and work performed for every audit task. The Firm will collect these timesheets and bill the City of Tracy at the rates outlined in the Total All-Inclusive Maximum Price section in four stages: (1) at the conclusion of the planning phase, (2) at the conclusion of the interim phase, (3) at the conclusion of the Year-End phase, (4) and after presentation and acceptance of the final audit reports. Interim billings will cover a period not less than a calendar month. The billing amounts generally break down as follows:

Partner(s) 300$
Director(s) 250$
Senior Manager(s) 225$
Manager(s) 200$
Supervisor(s) 175$
Senior Accountant(s) 150$
Staff Accountant(s) 125$
Clerical 100$
Hourly Billing Rates
Work Performed % of Proposal Amount
Planning 10%
Interim 40%
Fieldwork 40%
Presentation and Acceptance of Reports 10%
City of Tracy

20 | PUNGROUP.CPA
Let’s Get to Work.

Benefits of Choosing The Pun Group LLP

The Pun Group LLP is recognized for its professionalism and integrity and for providing clients with practical solutions unique to their circumstances and issues. Our Firm prides itself on being able to provide personalized client services, and with that sentiment in mind, we have carefully chosen our engagement teams. The Pun Group’s primary objective is to give the City of Tracy solutions and directions led by highly experienced and capable partners who can successfully implement the work and produce the results you expect. This philosophy and mindset allow us to provide a superior level of service and a quality audit.

We trust that this proposal has given you the information needed about the Firm, the engagement team members, the overall audit approach, cost-saving measures, and audit fees. We are committed to exceeding your expectations, and we look forward to bringing our experience and expertise to the City of Tracy while providing you with the excellent level of service that you expect and deserve.

Thank You

Thank you for allowing us to submit our qualifications to provide you with Cannabis Revenue Audit Services. Please direct inquiries to:

Andrew M. Roth, CPA
Partner
Email: [email protected]
Phone: (858) 242-5102 | Fax: (949) 777-8850

Sincerely,

The Pun Group
LLP
Certified Public Accountants and Business Advisors

City of Tracy
i | PUNGROUP.CPA
Appendix A – Firm Current Client List
List of Cur
rent Municipal Clients
The Pun Group LLP has performed numerous audits of organizations subject to financial and compliance audits. These audits were performed under auditing standards generally accepted in the United States, Government Auditing Standards, Uniform Guidance (formerly known as OMB Circular A-133), and its Compliance Supplement (when applicable), Office of the State Controller’s Minimum Audit Requirements and Reporting Guidelines.

A representative list of our current clients is as follows:

Municipalities Dates Financial
Audit
Single
Audit
GFOA
Certificate
Total
Hours
City of Adelanto 2021 – Present Yes Yes Yes 700
City of Anderson 2023 – Present Yes Yes N/A 530
City of Arvin 2013 – Present Yes Yes N/A 400
City of Baldwin Park 2022 – Present Yes Yes Yes 700
City of Bell 2018 – Present Yes Yes Yes 520
City of Bradbury 2012 – Present Yes N/A N/A 150
City of Calexico 2007 – Present Yes Yes N/A 750
City of Clovis 2006 – Present Yes Yes Yes 500
City of Coachella 2017 – Present Yes Yes Yes 410
City of Commerce 2023 – Present Yes Yes Yes 570
City of Cottonwood, AZ 2007 – Present Yes Yes Yes 400
City of Corona 2021 – Present Yes Yes Yes 640
City of Cudahy 2023 – Present Yes Yes Yes 500
Town of Corte Madera 2022 – Present Yes Yes N/A 400
Town of Danville 1999 – Present Yes Yes Yes 400
City of Douglas, AZ 2020 – Present Yes Yes Yes 300
City of Desert Hot Springs 2013 – Present Yes N/A N/A 700 City of Encinitas 2024 – Present Yes Yes Yes 600
City of Fresno 2022 – Present Yes Yes Yes 1,450
City of Gardena 2007 – Present Yes Yes Yes 700
City of Gilroy 2020 – Present Yes Yes Yes 640
City of Hercules 2020 – Present Yes Yes Yes 450
City of Indio 2024– Present Yes Yes Yes 708
City of Lake Elsinore 2023 – Present Yes Yes Yes 460
City of Lakewood 2013 – Present Yes Yes Yes 380
City of Tracy

ii | PUNGROUP.CPA
Municipalities Dates Financial
Audit
Single
Audit
GFOA
Certificate
Total
Hours
City of Lynwood 2016 – Present Yes Yes Yes 585
City of Madera 2019 – Present Yes Yes Yes 470
City of Menlo Park 2023 – Present Yes Yes Yes 550
City of Montebello 2022 – Present Yes Yes Yes 600
County of Monterey 2023 – Present Part of the audit & consulting services pool TBD City of Monterey Park 2023 – Present Yes Yes Yes 612
City of Napa 2019 – Present Yes Yes Yes 750
City of National City 2013 – Present Yes Yes Yes 600
City of Newport Beach 2024 – Present Part of the internal audit consulting services TBD City of Palm Springs 2020 – Present Yes Yes Yes 1,000
City of Paramount 2023 – Present Yes Yes Yes 460
City of Patterson 2017 – Present Yes Yes Yes 450
City of Placerville 2008 – Present Yes Yes N/A 400
City of Pleasanton 2024 – Present Yes Yes Yes 700
City of Pinole 2023 – Present Yes Yes Yes 400
City of Redlands 2022 – Present Yes Yes Yes 650
City of Ridgecrest 2009 – Present Yes Yes Yes 300
City of Rohnert Park 2020 – Present Yes Yes Yes 700
City of Salinas 2022 – Present Yes Yes Yes 800
City of San Mateo 2021 – Present Yes Yes Yes 900
City of Santa Clarita 2022 – Present Yes Yes Yes 1,200
City of Santa Cruz 2023 – Present Yes Yes Yes 800
City of Seal Beach 2017 – Present Yes Yes Yes 410
City of Stockton 2012 – Present Yes Yes N/A 3,000
City of Tracy 2021 – Present Yes Yes Yes 960
Town of Tiburon 2022 – Present Yes Yes Yes 452
City of Vernon 2023 – Present Yes Yes Yes 1000
City of Ventura 2024 – Present Yes Yes Yes 960
City of Visalia 2021 – Present Yes Yes Yes 650
Imperial County Transportation
Commission 2020 – Present Yes Yes Yes 600
Nevada County Transportation
Commission 2021 – Present Compliance
Services N/A N/A 450
San Diego Metropolitan Transit
System 2005 – Present Yes Yes Yes 1,850
City of Tracy
iii | PUNGROUP.CPA
Municipalities Dates Financial
Audit
Single
Audit
GFOA
Certificate
Total
Hours
Shasta Regional Transportation
Agency 2015 – Present Yes N/A N/A 400
Carmel Area Wastewater District 2022 – Present Yes Yes N/A 150 CAWD/PBSCD Wastewater
Reclamation Project 2022 – Present Yes N/A N/A 150
Central Basin Water District 2018 – Present Yes Yes N/A 400 Emerald Bay Service District 2024 – Present Yes Yes N/A 225 Helix Water District 2024 – Present Yes Yes Yes 320
Los Angeles County Law Library 2020 – Present Yes N/A N/A 180 Marina Coast Water District 2012 – Present Yes N/A Yes 240 Menlo Park Fire Protection District 2015 – Present Yes Yes Yes 240 NALEO Educational Fund and NALEO 2020 – Present Yes N/A N/A 300 Olivenhain Municipal Water District 2019 – Present Yes Yes Yes 200 Padre Dam Municipal Water District 2020 – Present Yes Yes Yes 250 Rancho Santa Fe Fire Protection
District 2015 – Present Yes N/A N/A 120
San Bernardino County Preschool
Services Department 2020 – Present Yes Yes N/A 150
San Bernardino County Fire Protection
District 2016 – Present Yes N/A N/A 200
San Elijo Joint Powers Authority 2016 – Present Yes N/A N/A 146 Santa Fe Irrigation District 2019 – Present Yes N/A N/A 250 San Mateo County Mosquito & Vector
Control District 2024 – Present Yes N/A N/A 220
Sweetwater Authority 2022 – Present Yes Yes Yes 270
South Bay Cities Council of
Governments 2020 – Present Yes N/A N/A 100
South Orange County Water Authority 2017 – Present Yes Yes Yes 240 South Bay Regional Public
Communications Authority 2015 – Present Yes N/A N/A 100 Southwestern Community College
District 2009 – Present Yes Yes N/A 720
Valley Sanitary District 2015 – Present Yes N/A Yes 140 West Valley Mosquito and Vector
Control District 2016 – Present Yes N/A N/A 100
Zone 7 Water Agency 2020 – Present Yes Yes Yes 400
City of Tracy

iv | PUNGROUP.CPA
Appendix B – Available Training

Strengthen Your Accounting Knowledge: TPG Client Training Webinars

We pride ourselves in leading the governmental auditing profession nationwide and statewide. Members of our team have been assigned to the AICPA and State Government Accounting and Audit committees. Our membership with these two levels of government keeps us current, and such involvement helps our Firm with the constant changes in accounting and auditing standards, laws and regulations, and compliance provisions, which have created an unprecedented complexity in public accounting for state and local governments.

Every year, the Firm hosts a conference to update governmental clients on new technical accounting and financial issues. Since last year, by implementing “Webinars,” we’ve been expanding our horizons and offering our clients 15 hours of Continuing Professional Education (CPE). These sessions are free of charge and part of the service package provided to our clients.

CPE courses we offer:

City of Tracy
v | PUNGROUP.CPA
Appendix C – Certificate of Insurance

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Y Y Y R W P I T Q W R E Q O

Page 1 of 3 ends

Amendment No. 2
To Professional Services Agreement with
The Pun Group, LLP
This Amendment No. 2 (Amendment) to the Professional Services Agreement entered between the City of Tracy, a municipal corporation (City), and The Pun Group, LLP, a Limited Liability Partnership (Consultant) dated January 19, 2021 (Agreement) is entered into as of the date of last signature below. City and Consultant are referred to individually as “Party” and collectively as “Parties.”
Recitals
A. The Agreement was executed pursuant to the authority granted in Resolution No. 2021- 004, approved by the Tracy City Council on January 19, 2021, which granted the City Manager the authority to execute any extensions and to increase compensation up to the contingency amount should the City agree to exercise its option to extend the term for an additional three years with a not to exceed total amount for the agreement of $660,737.

B. On August 19, 2024, the City Manager approved Amendment No. 1 to the agreement , extending the term of the agreement until January 31, 2027.

C. The City desires to add a Cannabis Revenue Audit Service to the original Scope of Work.

D. The City desires to increase the not-to-exceed amount to account for the additional audit service.

E. The term of the original Agreement expires on January 31, 2027.

Now therefore, in consideration of the mutual covenants herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree to amend the Agreement as follows:

1. Terms of Amendment.

A. Section 3.1 of the Agreement is amended to read as follows:

Consultant’s total compensation under this Agreement shall not exceed $660,737.

Consultant’s billing rates shall cover all costs and expenses for Consultant’s performance of this Agreement. No work shall be performed by Consultant in excess of the total compensation amount provided in this section without the City’s prior written approval.

B. Exhibit B of the Agreement is amended to read as follows:

Docusign Envelope ID: 6F8C74BE-FA27-40C9-A519-F873DB784980 Attachment B
City of Tracy – Amendment No._ to Agreement with [Consultant]

Page 2 of 3 ends

2. Incorporation by Reference. This Amendment incorporates by reference all terms set forth in the agreement, unless specifically modified by the Amendment. The terms which are not specifically modified by the Amendment will remain in effect.

3. Effect. The Parties hereto ratify the Agreement and, except as expressly modified by this Amendment, all provisions of the Agreement will remain unchanged and in full force and effect.

4. Entire Agreement. This Amendment represents the entire agreement and understanding of the Parties and shall supersede any prior agreement , written or oral, between the Parties. This Amendment will not be valid and enforceable until executed by all of the Parties hereto. This Amendment may not be modified or altered except through a subsequent writing signed by both Parties.

5. Severability. If any term of this Amendment is held invalid by a court of competent jurisdiction, this Amendment shall be construed as not containing that term, and the remainder of this Amendment shall remain in effect.

5. Signatures. The individuals executing this Amendment represent and warrant that they have the right, power, legal capacity, and authority to enter and to execute this Amendment. This Amendment shall inure to the benefit of and be binding upon the parties and their respective successors and assigns. This Amendment may be executed in one or more counterparts. All counterparts so executed shall constitute one contract, binding on all Parties, even though all Parties are not signatory to the same counterpart.

The Parties agree to the full performance of the terms set forth here.

City of Tracy

By: _________________________
Daniel Arriola

Title: Mayor

Date: ________________________
Consultant

By: ________________________
Andrew Roth, CPA

Title: Partner

Date: ________________________
Service 2020/21 2021/22 2022/23 2023/24
(Optional)
2024/25
(Optional)
2025/26
(Optional) Total
City Audit Report W/ Management Letter 63,000$ 64,260$ 65,545$ 66,856$ 68,193$ 69,557$ 397,411$ Preparation CAFR, including compliance with GFOA Award 2,500$ 2,550$ 2,601$ 2,653$ 2,706$ 2,760$ 15,770$ Single Audit and Related Reports - up to 4 major programs (1) 20,000$ 20,400$ 20,808$ 21,224$ 21,649$ 22,082$ 126,163$ Agreed-upon Procedures Applied to Appropriations Limit Schedule (GANN) 500$ 510$ 520$ 531$ 541$ 552$ 3,154$ National Transit Database (NTD) Reporting 1,500$ 1,530$ 1,561$ 1,592$ 1,624$ 1,656$ 9,463$ Preparation of State Controller's Reports: -$
City of Tracy Annual Report of Financial Transactions 3,000$ 3,060$ 3,121$ 3,184$ 3,247$ 3,312$ 18,924$ Tracy Public Financing Authority (TPFA) 1,500$ 1,530$ 1,561$ 1,592$ 1,624$ 1,656$ 9,463$ Tracy Operating Partnership Joint Powers Authority (TOP JPA) 1,500$ 1,530$ 1,561$ 1,592$ 1,624$ 1,656$ 9,463$ City's Transit Operators Financial Transactions Report for General Services 1,500$ 1,530$ 1,561$ 1,592$ 1,624$ 1,656$ 9,463$ City's Transit Operators Financial Transactions Report for Specialized Services 1,500$ 1,530$ 1,561$ 1,592$ 1,624$ 1,656$ 9,463$ City's Cannabis Revenue Audit Services (4 Business sites) - - - - $ 26,000 26,000$ 52,000$ Total for Fiscal Year (Not to Exceed) 96,500$ 98,430$ 100,400$ 102,408$ 130,456$ 132,543$ 660,737$ Docusign Envelope ID: 6F8C74BE-FA27-40C9-A519-F873DB784980 3/4/2025 | 8:40 AM PST
City of Tracy – Amendment No._ to Agreement with [Consultant]

Page 3 of 3 ends

Attest:

By: ________________________________
Necy Lopez, Deputy City Clerk

Approved as to form.

By: ________________________________
Andrew Shen, Interim City Attorney

Docusign Envelope ID: 6F8C74BE-FA27-40C9-A519-F873DB784980 Attachment C

Page 1 of 2 ends

CITY OF TRACY
AMENDMENT NO. 1 TO

PROFESSIONAL SERVICES AGREEMENT WITH
The Pun Group, LLP
This Amendment No. 1 ( Amendment) to that certain Professional Services Agreement entered between the City of Tracy, a municipal corporation ( City), and The Pun Group, LLP, a Limited Liability Partnership (Consultant), dated January 19, 2021 (Agreement) is entered into as of the last of signature below. City and Consultant are referred to individually as “Party” and collectively as “Parties.”
Recitals
A. The Agreement was executed pursuant to the authority granted in Resolution 2021 -004, approved by the Cit y Council on January 19, 2021 , which granted the City Manager the authority to execute any extensions and to increase compensation up to the contingency amount should the City agree to exercise its option to extend the term for an additional three years with a not to exceed total amount for the Agreement of $608,737.

B. The Agreement had an initial term of three years with a not to exceed total compensation of $295,330 for the three-year term.

C. The term of the original Agreement expired on January 31, 2024.

D. This Amendment is retroactive to February 1, 2024.

1. Option to Extend. Pursuant to Section 2.1.1 of the Agreement, the City hereby extends the Term by three additional years and, accordingly, Section 2.1 of the Agreement is hereby modified to reflect that the Term of the Agreement expires on January 31, 2027.

2. Compensation. Section 3.1 of the Agreement is hereby modi fied to r eflect that Consultant’s total compensation for the additional three -year term, pursuant to Section

2.1, shall not exceed $313,407.

3. Effect. The Parties hereto ratify the Agreement and, except as expressly modified by this Amendment, all provisions of the Agreement will remain unchanged and in full force and effect.

4. Entire Agreement. This Amendment represents the entire agreement and understanding of the Parties and shall supersede any prior agreement —written or oral —between the Parties. This Amendment will not be valid and enforceable until executed by all of the Parties hereto. This Amendment may not be modified or altered excep t through a subsequent writing signed by both Parties.

Docusign Envelope ID: 23742212-3DFE-4712-837A-2B2063648CFB Docusign Envelope ID: 90048369-8774-4A6A-A1A2-6863877E6AFB Attachment D
City of Tracy – Amendment No. 1 to Agreement with The Pun Group, LLP

Page 2 of 2 ends

6. Signatures. The individuals executing this Amendment represent and warrant that they have the right, power, legal capacity, and authority to enter and to execute this Amendment. This Amendment shall inure to the benefit of and be binding upon the parties and their respective successors and assigns. This Amendment may be executed in one or more counterparts. All counterparts so executed shall constitute one contract, binding on all Parties, even though all Parties are not signatory to the same counterpart.

The Parties agree to the full performance of the terms set forth here.

City of Tracy
By:

Midori Lichtwardt
Title: City Manager
Date:

The Pun Group, LLP
By:

Andrew Roth, CPA
Title: Partner
Date:

Attest:

By:

Adrianne Richardson, City Clerk
Approved as to form.

By:

Bijal Patel, City Attorney
Docusign Envelope ID: 23742212-3DFE-4712-837A-2B2063648CFB 8/14/2024 | 9:28 AM PDT
Docusign Envelope ID: 90048369-8774-4A6A-A1A2-6863877E6AFB 8/16/2024 | 10:53 AM PDT
8/19/2024 | 7:04 PM PDT
8/20/2024 | 7:55 AM PDT

APPROVED AS TO FORM AND LEGALITY

CITY ATTORNEY’S OFFICE

TRACY CITY COUNCIL
RESOLUTION NO.

AUTHORIZING A SECOND AMENDMENT TO THE PROFESSIONAL SERVICES

AGREEMENT WITH THE PUN GROUP, LLP TO ADD CANNABIS REVENUE AUDITING

SERVICES

WHEREAS, The financial records of the City are audited each year by a public accounting firm and this CPA firm has been selected for a three-year period. With satisfactory performance, this contract has been extended for an additional three-year period under City Manager authority; and

WHEREAS, In October, Finance staff completed an informal request for proposal for Cannabis Revenue Auditing Services to Conduct an annual Revenue Audit to validate the accuracy of the sales reported to the City by cannabis businesses during the review period; and

WHEREAS, Staff received two qualified proposals. The proposal from The Pun Group has been evaluated by the Finance Department in terms of the firm’s experience; abilities, quality of proposal and price; and
WHEREAS, The Pun Group has proposed a fee for the FY 2020-21 audit of $96,500 and for the subsequent two years of $198,830 for a three-year total of $295,330. The Amendment approving the option to extend for an additional three years was proposed for a total of $608,737; and

WHEREAS, This Amendment proposal for the additional scope of work for Cannabis Revenue Auditing Services is proposed for $52,000 for an overall total of $660,737; now, therefore be it

RESOLVED: That the City Council of the City of Tracy does hereby approve a second Amendment to the Professional Services Agreement with The Pun Group to perform Cannabis Revenue Auditing Services for a period of two years at a cost of $52,000 annually and an overall not to exceed amount of $660,737.

* * * * * * * * * * * * * * * * * * *

Resolution No.

Page 2 ends

The foregoing Resolution 2025- was adopted by the Tracy City Council on April 1, 2025, by the following vote:

AYES:

NOES:

ABSENT:

ABSTENTION:

COUNCIL!MEMBERS:

COUNCIL MEMBERS:

COUNCIL!MEMBERS:

DAN ARRIOLA
Mayor of the City of Tracy, California
ATTEST:

NECY LOPEZ
Acting City Clerk and Clerk of the Council of the
City of Tracy, California
April 1, 2025
Agenda Item 1.K

RECOMMENDATION
Staff recommend that the City Council adopt a resolution approving the execution of a General Services Agreement with Carbon Activated Corporation, a California corporation to remove, dispose, and replace the iron sponge media at the City of Tracy Wastewater Treatment Plant for a not-to-exceed amount of $58,005 and a term ending December 31, 2025.

EXECUTIVE SUMMARY
This agenda item seeks adoption of a resolution by the City Council approving a General Services Agreement (GSA) with Carbon Activated Corporation (Contractor) for the removal, disposal, and replacement of the existing iron sponge media at the City of Tracy Wastewater Treatment Plant (WWTP). The iron sponge media is used to remove hydrogen sulfide (H2S) from the methane gas generated during the treatment process, and the media! must be replaced every four to five years to remain effective. The iron sponge media was last replaced in 2021 and is no longer providing effective removal. The City invited bid proposals to replace the iron sponge media, and this request is for approval to execute the GSA with the selected bidder to provide these services.

BACKGROUND AND LEGISLATIVE HISTORY
The City of Tracy generates methane gas and H2S as byproducts of anaerobic digestion at the WWTP. The City is permitted by the State to use methane gas as a biogas in its boilers which are used to keep loop water at the desired temperature to allow the plant to operate optimally.

H2S, which is extremely corrosive in even small amounts, is removed from the methane gas by a MARCAB scrubber system. This system utilizes iron sponge media, which is a highly porous, powdered or granular form of iron metal. The media reacts with H2S to form a stable compound but becomes less effective over time and typically requires replacement every four or five years.

If the media is not replaced on a routine basis trace amounts of H2S will carry over into the boiler system, which may cause excess build-up in the boilers. This could lead to an increase in maintenance costs and potentially lead to noncompliance with permit requirements. The City has purchased the required iron sponge media but does not have the equipment or experience to perform the replacement task safely. Contracted services are required to remove the old media, replace it with the media on hand, and dispose of the spent media properly.

ANALYSIS
On December 6, 2024, in accordance with the Tracy Municipal Code 2.20.180, the City issued a Notice Inviting Bids for the removal, disposal, and replacement service for the iron sponge media at the City of Tracy Wastewater Treatment Plant and published it on the City’s website. A total of two (2) bid proposals were received by the City, prior to the deadline. The proposals were reviewed by an internal committee of Wastewater Maintenance staff. The committee determined that both vendors were qualified, and their rates were:

Agenda Item 1.K
April 1, 2025

Page 2 ends

Vendor Name Price
Carbon Activated Corporation $58,005.00
MPK Solutions $134,601.89
Carbon Activated Corporation is a qualified and experienced bidder with the lowest cost of services, has good references, and therefore was selected based on these criteria.

After negotiations between the City and Contractor, the parties reached an agreement for the not-to-exceed amount of $58,005 with the term beginning on the date as indicated on the Notice to Proceed and ending on December 31, 2025. If approved, the Contractor will perform the services to remove the old iron sponge media, install the City provided iron sponge media, and properly dispose of the spent iron sponge media.

FISCAL IMPACT

All costs for the services provided by the Contractor will be accounted for in the adopted FY24/25 annual operations and maintenance budget of Wastewater Fund (521) in a not-to- exceed amount of $58,005, and includes the cost of removal, disposal, and replacement services for the iron sponge media provided by the City at the WWTP.

CEQA DETERMINATION

The approval of the bidders in this request or the execution of this contract with Contractor will not result in a physical change in the environment and therefore is not considered as a project as defined by Section 21065 of the Public Resources Code. The approval of this contract and completion of this work is also exempt from CEQA review under CEQA Guidelines Section 15301 as repairs to an existing facility.

STRATEGIC PLAN

This agenda item is consistent with the City’s Quality of Life Strategy and meets the goals to ensure physical infrastructure and systems necessary for the health and safety of the City of Tracy community through improved water quality.

ACTION REQUESTED OF THE CITY COUNCIL

Adopt a resolution approving the execution of a General Services Agreement with Carbon Activated Corporation, a California corporation to remove, dispose, and replace the iron sponge media at the City of Tracy Wastewater Treatment Plant for a not-to-exceed amount of $58,005 and a term ending December 31, 2025.

Agenda Item 1.K
April 1, 2025

Page 3 ends

Prepared by: Jorge Gonzalez, Utilities Maintenance Supervisor Reviewed by: Gordon MacKay, Interim Public Works Director Stephanie Reyna-Hiestand, Assistant Director of Utilities Sara Castro, Director of Finance
Andrew Shen, Interim City Attorney
Karin Schnaider, Assistant City Manager
Approved by: Midori Lichtwardt, City Manager
Attachments:

A - GSA with Carbon Activated Corporation
Attachment A

APPROVED AS TO FORM AND LEGALITY
________________________
CITY
ATTORNEY’S OFFICE

TRACY CIT

Y COUNCIL
RES
OLUTION NO. _______________

APPROVING THE EXECUTION OF A GENERAL SERVICES AGREEMENT

WITH CARBON ACTIVATED CORPORATION, A CALIFORNIA

CORPORATION TO REMOVE, DISPOSE, AND REPLACE THE IRON

SPONGE MEDIA AT THE CITY OF TRACY WASTEWATER TREATMENT
PLANT FOR A NOT-TO-EXCEED AMOUNT OF $58,005 AND A TERM
ENDING DECEMBER 31, 2025.

WHERE
AS, as a part of the treatment process, the MARCAB scrubber system through the iron sponge media removes hydrogen sulfide (H2S) that is generated as a byproduct of anaerobic digestion; and
WHERE
AS, H2S is highly corrosive and must be removed in order to ensure that WWTP is operating efficiently and effectively; and
WHERE
AS, the City is permitted to use methane gas as a biogas in its boiler, which keeps loop water at the desired temperature to allow the WWTP to operate at optimal capacity; and WHERE
AS, the iron sponge media must be replaced every four to five years according to the effectiveness of the media in removal of the H2S; and WHERE
AS, the iron sponge media was last replaced in 2021, therefore has reached its life expectancy and is no longer providing effective removal; and WHERE
AS, without such effectiveness, the maintenance cost may increase as well as the City may not comply with its permit requirement; and WHERE
AS, on December 6, 2024, staff followed established procedures, in accordance with the Tracy Municipal Code, Section 2.20.180, and issued a Notice Inviting Bids (NIB) to retain a Contractor to remove, dispose, and replace the iron sponge media; and WHERE
AS, two (2) bid proposals were submitted on January 15, 2025, one of which was from Carbon Activated Corporation (Contractor); and
WHERE
AS, Contractor was the lowest, most responsive and qualified bidder and has the expertise and experience required to provide the necessary and desired services; and WHERE
AS, staff is requesting that the City Council authorize the execution of the General Services Agreement with the Contractor, in the form attached as Exhibit 1, for the term beginning as indicated on the Notice to Proceed and end ing on December 31, 2025 for the total amount of $58,005 to provide the services required to comply with the permit requirements; and Resolution 2025-

Page 2 ends

WHEREAS, the cost of the services provided by the Contractor will be accounted for in the adopted FY24/25 annual operations and maintenance budget of the Wastewater Fund (521); and
WHEREAS, the approval of the Project will not result in the physical change in the environment; therefore, this action is not considered as a project as defined by Section 21065 of the Public Resources Code; and
NOW, THEREFORE, be it resolved as follows:

RESOLVED: that the above recitals are true and correct; and be it, FURTHER RESOLVED: That the City Council of the City of Tracy, hereby approves the General Services Agreement with Carbon Activated Corporation, attached as Exhibit 1, for the term commencing as indicated on the Notice to Proceed and ending on December 31, 2025; and be it,
FURTHER RESOLVED: That the City Council finds the actions taken herein are not considered as a project as defined by Section 21065 of the Public Resource Code and are exempt from CEQA (California Environment Quality Act) review and are also exempt from CEQA review under CEQA Guidelines Section 15301 as repairs to an existing facility. * * * * * * * * * * * * * *
The foregoing Resolution 2025- was adopted by the Tracy City Council on the 1st day of April, 2025, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ABSTENTION: COUNCIL MEMBERS:

DAN ARRIOLA
Mayor of the City of Tracy, California
ATTEST:

NECY LOPEZ
Acting City Clerk and Clerk of the Council of the
City of Tracy, California
Exhibit 1: GSA with Carbon Activated Corporation
Exhibit 1

April 1, 2025
Agenda Item 1.L

RECOMMENDATION
Staff recommends that the City Council adopt a resolution approving the schedule of towing fees charged by private towing service operators for tow services within the City.

EXECUTIVE SUMMARY
This staff report is to provide the City Council with background information supporting a request to increase the fees that local towing service operators may charge for towing services and daily storage fees. The fees that these towing service operators may charge the owners of vehicles towed and stored were last established on November 15, 2022, pursuant to Resolution No. 2022- 171. Staff recommends the City Council adopt a resolution approving a new schedule of towing fees under Tracy Municipal Code section 3.44.190.

BACKROUND AND LEGISLATIVE HISTORY
Tracy Municipal Code 3.44.190 mandates that City Council regulates the fees that may be charged by towing service operators on the City’s rotational list and establish those fees by resolution. These rates and fees are to be established after a review of rates used in comparable communities and the operating expenses by towing service operators currently on the rotational list. The staff report provided to Council fulfills these requirements.

ANALYSIS
Tracy Police Department staff requested information from all of the local towing service operators to support the request to increase the fees they may charge for rotational list towing and vehicle storage services. The responding towing service operators provided information related to operational costs from 2022-2 024. Listed below is a summary of the information the Police Department received regarding the increases in costs from 2022 to 2024:

1. Worker’s Compensation rates vary between companies but on average, they reported an increase of approximately 8.8%.

2. Salaries increased on average by approximately 7%.

3. During 2022 and 2023 the average cost of a gallon of diesel fuel in California was $5.69 per gallon. In 2024, the average price of a gallon of diesel fuel is $4.93 per gallon, representing an approximate 13.36% decrease.

Source: U.S. Energy Information Administration
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=EMD_EPD2DXL 0_PTE_SCA_DPG&f=M

4. Tow truck maintenance costs varied between the companies, but all reported costs increased on average by approximately 23.4%.

Agenda Item 1.L
April 1, 2025

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5. Vehicle insurance rates have increased on average by approximately 36.8%.

6. Vehicle replacement costs vary depending on the type of equipment purchased but on average, those costs have increased by approximately 16%.

7. DMV fees and rates have increased on average approximately 11%.

8. Reported employee medical benefits cost increased an average of approximately

13.5%.

9. Other operating expenses that were not reported in the survey but should be taken into consideration as increased operational costs are:
a. Facility/property maintenance
b. Utilities and Support Equipment (i.e. gas, electric, phones and water/sewer)
c. Rent/lease agreements
Tracy Police Department staff believes that the fees charged by towing service operators under agreement for rotational tow services should be consistent with what the neighboring city or county law enforcement agencies allow. The neighboring communities of Livermore, Manteca, Lathrop, Ripon, Stockton, and Turlock were polled as to their allowable tow and storage rates. Refer to Attachment B. The average area rate for towing was $267.60 and the average daily storage was $89.58. More significantly the average of the immediate area (Tracy CHP Office), who use many of the same rotational tows as the City of Tracy averages $296.33 for standard towing and $105 for inside storage. The Tracy Area CHP and Stockton Area CHP Office’s were polled, as they are in agreement with multiple area tow service operators.

The proposed rate increase is a reasonable request due to the increased operating expenses for business owners since the last rates were adopted in 2022. Currently, the City of Tracy does not employ its own vehicle tow service and relies only on local, privately owned tow companies to perform all towing and vehicle storage services.

In considering average rates, staff recommends the following proposed rates:

TOW COMPANY SERVICES
Current Rate Proposed Rate

1. Standard Tow $255 $300

2. Heavy Vehicle Towing (Class B) $450 $500

3. Very Large Vehicle Tow (Class C/D) $500 $650

4. Hourly Rate $255 $300

5. City Vehicle (half standard rate) $127.50 $150

6. Storage per Day – Standard Vehicle $90 $105

7. Police Impounds (first 48 hours) $90 $105

8. After Business Hour Release $90 $105

9. Heavy Vehicle Storage (per day) $100 $125
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April 1, 2025

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FISCAL IMPACT
There is no cost to the City of Tracy. Approval of this request would allow privately owned tow companies that agree to provide tow operator services with the City of Tracy to increase their fees for towing services and vehicle storage.

PUBLIC OUTREACH/ INTEREST
This is a routine operational item that is reviewed periodically to ensure fees are up to date.

Tracy Police Department surveyed local tow operators and neighboring law enforcement agencies during this review process.

COORDINATION
Tracy Police Department surveyed local tow operators, neighboring law enforcement agencies and California Highway Patrol during the review of the current tow fee schedule. The proposed increased fees would be comparable and consistent with California Highway Patrol and neighboring law enforcement agencies.

CEQA DETERMINATION
The proposed action is not a “project” under the California Environmental Quality Act. Pursuant to CEQA Guidelines Section 15061(b)(3), there is no possibility that this action will have an effect on the physical environment.

STRATEGIC PLAN
This agenda item relates to the City of Tracy Council Strategic Priorities for 2023-2025, Public Safety, Goal #1 support emergency operations preparedness, response and recovery.

ACTION REQUESTED OF THE CITY COUNCIL
Staff recommends that the City Council adopt a resolution approving increased maximum fees charged by private towing service operators for services rendered to reflect increased operating expenses.

Prepared by:

Reviewed by:

Approved by:

Yordan Coss, Traffic Safety Officer
Brian Wilmshurst, Sergeant
Miguel Contreras, Lieutenant
Beth Lyons-McCarthy, Support Operations Manager
Sekou Millington, Chief of Police
Sara Castro, Finance Director
Karin Schnaider, Assistant City Manager
Matthew Summers, Interim Assistant City Attorney
Midori Lichtwardt, City Manager
Attachments
Attachment A: Proposed Tow Fee Schedule
Attachment B: Local Fees Survey Results
Attachment A
SERVICES Current Rate Proposed Rate

1. Standard Towing $255 $300

2. Heavy Vehicle Towing $450 $500

3. Very Large Vehicle Towing $500 $650

4. Hourly Rate $255 $300

5. City Vehicle (half standard rate) $127.50 $150

6. Storage Per Day – Standard Vehicle $90 $105

7. Police Impounds (1st 48 hours) $90 $105

8. After Business Hour Release $90 $105

9. Heavy Vehicle Storage (per day) $90 $125
Attachment B
Agency Maximum Hourly Rate Daily Storage Fees
Livermore Follows CHP area rate Follows CHP area
rate
Lodi Follows Stockton CHP
rates
Follows Stockton
CHP rates
***Manteca
***Lathrop
$280/hr
$280/hr
$75
$75
Ripon Follows CHP’s rate Follows CHP’s rate
Stockton $229/hr $84.63 Inside
$73.81 Outside
Turlock $220/hr $75 Inside
$65 Outside
$110 Gate fee
*Tracy CHP $296.33 $105 Inside
$102.50 Outside
**Stockton CHP $278.50/hr $100.68 Inside
$88.23 Outside
*Average among 6 towing service operators in agreement for towing services with Tracy Area CHP Office.
**Average among 23 towing service operators in agreement for towing services with Stockton Area CHP Office.
***Rates as of 2022.

APPROVED AS TO FORM AND LEGALITY
CITY ATTORNEY’S OFFICE

TRACY CITY COUNCIL
RESOLUTION NO. 2025-

APPROVING THE SCHEDULE O F TOWING FEES CHARGED BY PRIVATE TOWING SERVICE OPERATORS FOR TOW SERVICES WITHIN THE CITY.

WHEREAS, the City of Tracy’ s Police Department utilizes private towin g and vehicle storage services on a rotational list; and
WHEREAS, Tracy Municipal Code 3.44.190 requires that the City Council, by resolution, regulate and establish the rates and fees that may be charged by private towing service operators on the City’s rotational list; and
WHEREAS, these rates and fees are to be established after a review of rates used in comparable communities and the operating expenses by towing service operators currently on the rotational list; and
WHEREAS, these rates were last increased by Resolution 2022-171, adopted by City Council on November 15, 2022; and
WHEREAS, representatives from the towing service operators have indicated that the cost of doing business for the City of Tracy has continued to increase significantly since 2022, and the increases in rates are necessary to accommodate the increased operating costs, and staff completed a survey of other towing operators and local jurisdictions as required by Tracy Municipal Code section 3.44.190; now, therfore, be it RESOLVED: That City Council does hereby approve a revised schedule of towing fees charged by private towing service operators for tow services within the City, reflecting increased operating expenses, as set forth in Exhibit 1 attached hereto. * * * * * * * * * * * * * * * * * * * *
Resolution 2025-

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The foregoing Resolution 2025- was passed and adopted by the Tracy City Council on April 1, 2025, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ABSTENTION: COUNCIL MEMBERS:

DAN ARRIOLA
Mayor of the City of Tracy, California
ATTEST:

NECY LOPEZ
Acting City Clerk and Clerk of the Council of the
City of Tracy, California
Exhibit 1: Proposed Tow Fee Schedule
Exhibit 1
SERVICES Current Rate Proposed Rate

1. Standard Towing $255 $300

2. Heavy Vehicle Towing $450 $500

3. Very Large Vehicle Towing $500 $650

4. Hourly Rate $255 $300

5. City Vehicle (half standard rate) $127.50 $150

6. Storage Per Day – Standard Vehicle $90 $105

7. Police Impounds (1st 48 hours) $90 $105

8. After Business Hour Release $90 $105

9. Heavy Vehicle Storage (per day) $90 $125
April 1, 2025

Agenda Item 1.M

RECOMMENDATION

Staff recommends that the City Council adopt a resolution 1) making a determination that strict compliance with standard procurement procedures is not in the best interests of the City and disposing these requirements pursuant to Tracy Municipal Code Section 2.20.180 for the purchase, installation, operation, training and maintenance of Peregrine software; and 2) approving the execution of Master Service Agreement with Peregrine Technologies, Inc. for these services for a two- year term and total not to exceed $220,000.

EXECUTIVE SUMMARY
Tracy Police Department (TPD) desire to enter into an agreement with Peregrine Technologies, Inc. for the procurement, implementation, and training associated with their software platform. The Police Department (PD) requires the expertise and technology that Peregrine Technologies, Inc. has to fully implement the Real Time Information Center.

This advanced data integration and aggregation tool is specifically designed to support law enforcement agencies in analytical operations. As Peregrine Technologies, Inc. is the exclusive vendor for the integrated platform software, staff is recommending that the City Council waive the procurement procedure requiring a competitive procurement process pursuant to Tracy Municipal Code 2.20.180(b)(4).

BACKGROUND

The Tracy Police Department is in the process of establishing a Real-Time Information Center (RTIC) this year to revolutionize its approach to public safety and community well- being. The RTIC is designed to provide real-time situational awareness, reduce crime, enhance officer safety, and foster improved collaboration with City partners. As the community grapples with the challenges posed by the opioid epidemic, the RTIC serves as a critical hub for integrating technology and data to deliver innovative solutions.

The City of Tracy received settlement funds through the California Department of Health as a result of several national pharmaceutical lawsuits which provided these settlements back to the states and have been passed to local governments for opioid related programs and activities. The PD is seeking to utilize a portion of the funding for the Master Services Agreement with Peregrine Technologies, Inc. will be through the State of California’s opioid relief distributions. The City received these settlement funds and appropriated them to the PD’s operational budget through Resolution 2025-020 on February 4, 2025.

ANALYSIS

The software will play a vital role in tackling the opioid epidemic, which continues to impact Tracy residents and San Joaquin County. By integrating overdose reports, Narcan usage data, opioid-related calls for service, and locations of high-risk activity, the software will help identify hotspots and emerging trends in real time. This information will allow law enforcement during their response, and our Community Services Division teams like Neighborhood Resource Officers and Familiar Faces to deploy resources more strategically, ensuring timely interventions in the areas where they are needed most.

Agenda Item 1.M
April 1, 2025

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The Peregrine software's predictive capabilities enable the RTIC to take a proactive stance in combating opioid misuse. By analyzing trends and identifying patterns, such as the geographic spread of overdoses or increased opioid-related criminal activity, the RTIC can act as an early warning system. This allows law enforcement and City partners to implement preventative measures, such as conducting outreach in high-risk areas, increasing public awareness about the dangers of opioids, or establishing mobile clinics to provide on-the-spot treatment and support.

Additionally, Peregrine Technologies, Inc. provides a one-stop solution to data integration through their proprietary software that allows personnel to access multiple databases through one useful, actionable, portal. Peregrine will integrate new and archived Computer Aided Dispatch (CAD) data, new and archived Records Management Systems (RMS) data, traffic accident diagrams and reporting, mapping information, body and dash camera footage, automatic license plate reader (ALPR) information, and many other Public Safety data sources. This will create a comprehensive dashboard to easily gain immediate, real- time access, to virtually all Tracy Police Department information systems.

The Tracy Police Department has been combating the misuse of opioids that have led to multiple investigations. The chart below discusses the investigations the Police Department has been involved in during 2023 and 2024.

Agenda Item 1.M
April 1, 2025

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Peregrine Technologies, Inc. has been identified as the sole provider capable of delivering an end-to-end software solution that meets the unique needs of the Tracy Police Department and its Real Time Information Center (RTIC). Their software offers a comprehensive suite of capabilities, including:

• Purpose-built data integrations
• Fully integrated features such as advanced search, mapping, link, analysis, reporting, and dashboards
• Proprietary data duplication algorithms
• A secure collaboration and data sharing functionality • Fully open and interoperable architecture
• End-to-end security, CJIS and CAL DOJ compliance
The software enables the creation of searchable dashboards and automated alerts to monitor and manage officer and staff exposure to opioids and other safety risks. By integrating data from multiple underlying systems, the platform provides comprehensive insights, seamlessly processing unstructured data such as Computer Aided Dispatch (CAD) notes, report narratives, and other data sources from our current systems like Mark43.

Additionally, the system's dashboard functionality can automate the dissemination of critical information and location data to our City partners. This includes updates on Narcan usage, encampment locations, opioid incidents, and overdoses, thereby serving as an early warning system to enhance both officer safety and community response efforts. The early warning system will identify officers who have responded to multiple opioid overdoses or traumatic events. Supervisors will be able to intervene and offer services and support to ensure a healthy and supported workforce. Peregrine Technologies, Inc. will also allow city staff to quickly identify specific areas of the City that need comprehensive support to avoid fatal opioid overdoses and proactively bring in resources to save lives.

Peregrine Technologies, Inc. has provided sole source documentation verifying their unique qualifications to deliver this solution. As Peregrine Technologies, Inc. is the exclusive vendor for an integrated platform software capable of meeting all of the City’s needs for this kind of software system and opioid overdose prevention program, staff is recommending that the City Council waive the procurement procedure requiring a competitive procurement process pursuant to Tracy Municipal Code 2.20.180(b)(4).

FISCAL IMPACT

Funding for the Master Services Agreement with Peregrine Technologies, Inc. will be through the State of California’s opioid relief settlements which have been appropriated to the Police Department's operational budget. The two-year agreement will cost:

Year 1: $110,000
Year 2: $110,000
Total: $220,000

Agenda Item 1.M
April 1, 2025

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PUBLIC OUTREACH/ INTEREST
Through many community engagement activities and proactive policing, residents have many opportunities to meet, interact with department personnel, and discuss issues impacting the community. The community supports the Police Department’s initiatives and goals to promote officer safety and community safety, improve efficiency, and advance department technology.

COORDINATION
The Police Department has coordinated with the City’s Innovation and Technology Department on various aspects of this project including purchasing quotes and infrastructure.

CEQA DETERMINATION
The proposed action is not a “project” under the California Environmental Quality Act.

Pursuant to CEQA Guidelines Section 15061(b)(3), there is no possibility that this action will have an effect on the physical environment.

STRATEGIC PLAN
This agenda item relates to Council’s Strategic Priorities for Public Safety, specifically to continue to strengthen community safety through crime prevention reduction activities and continuing to enhance and implement the use of technology to generate evidence-based intelligence to enhance enforcement efforts.

ACTION REQUESTED OF THE CITY COUNCIL
Staff recommends that the City Council adopt a resolution 1) making a determination that strict compliance with standard procurement procedures is not in the best interests of the City and disposing these requirements pursuant to Tracy Municipal Code Section 2.20.180 for the purchase, installation, operation, training and maintenance of Peregrine software; and 2) approving the execution of Master Service Agreement with Peregrine Technologies, Inc. for these services for a two-year term and total not to exceed $220,000.

Prepared by: Daniel Garcia, Sergeant
Reviewed by: Beth Lyons-McCarthy, Support Operations Manager Sekou Millington, Chief of Police
Sara Castro, Finance Director
Karin Schnaider, Assistant City Manager
Andrew Shen, Interim City Attorney
Approved by: Midori Lichtwardt, City Manager
Attachments
Attachment A: Master Services Agreement, Peregrine Technologies, Inc.

PEREGRINE CUSTOMER ORDER FORM & SCOPE OF SERVICES
Customer Information
Customer Name: Tracy Police Department Contact: Beth Lyons-McCarthy Address: 1000 Civic Center Dr Tracy, CA 93576 Phone: 209-831-6594 Email: [email protected] Fax: N/A
Peregrine Services
Effective Date: April 10, 2025
Initial Term: From the Effective Date through April 9, 2027 (“Initial Term”).

Service Fee: The following fee schedule is available to the Customer if Order Form is signed on or before April 2, 2025. Unless otherwise terminated as set forth in the Terms and Conditions, Customer shall pay Peregrine a service fee of $110,000 annually for the Term as follows:
a. $110,000 within 30 days of the Effective Date
b. $110,000 within 30 days of April 10, 2026
Users: Customer may allow an unlimited number of employees of the Tracy Police Department to access and use the Service.

Onboarding and Training Services: Peregrine will provide Customer with an introductory training session that provides an overview of the Service, background on accessible data sources as of the Effective Date and an introduction to the analytic capabilities of the Service. Peregrine will p rovide additional training, including refresher sessions and advanced training modules, from time to time upon mutual agreement of the parties.

Professional Services: The initial Customer Data sources and systems that Peregrine will integrate with the Service for Customer are: Mark 43 CAD, Mark 43 RMS, A xon BWC , Laserfische, Flock ALPR, Axon Fleet 3, Dronesense, and Crossroads eCitation.

The fee schedule above includes support for up to 75 million annual LPR reads and a 30-day retention of LPR detections.

This agreement provides for an allowance of $5,000 in third -party API or data access fees . The Customer is responsible for any third-party API or data access fees in excess of $5,000.

Any additional data integrations or new functionality shall be subject to mutual written agreement of the parties, including with respect to fees. All additional data integration services or new functionality and corresponding fees will be set forth in a statement of work.

For clarity, Peregrine will provide any other Profes sional Services and additional data integration services in accordance with Section 2.2 of the Terms and Conditions.

Docusign Envelope ID: 2FE0CEF5-F68D-4ED2-866C-C959FE6A1F55 Docusign Envelope ID: 8C930239-2B4A-4DC9-BDD3-A3B741B3274A Attachment A
February 18, 2025
2 Proprietary and Confidential
Peregrine services are provided subject to the terms set forth above on this Order Form together with the attached terms and conditions (the “ Terms and Conditions ,” and together with this Order Form, the “ Agreement”). Any capitalized term used in this Order Form but not defined herein shall have the meaning ascribed to it in the Terms and Conditions. By signing this Order From, Peregrine and Customer each agree to the terms and conditions set forth in this Agreement. In the event of any conflict between this Order Form and the Terms and Conditions, the terms of this Order Form shall govern to the extent of such conflict. This Order Form ma y be executed in counterparts (which may be delivered by electronic mail of .pdf files), each of which counterparts, when so executed and delivered, shall be deemed to be an original, and all of which counterparts, taken together, shall constitute one and the same instrument.

Peregrine Customer
By: By:

Name: Nicholas Noone Name:

Title: President & CEO Title:

Date Signed: Date Signed:

Attest:

Name:

Docusign Envelope ID: 2FE0CEF5-F68D-4ED2-866C-C959FE6A1F55 3/5/2025
Docusign Envelope ID: 8C930239-2B4A-4DC9-BDD3-A3B741B3274A Head of Finance
3/5/2025
Dayton Killian
February 18, 2025
3 Proprietary and Confidential
Peregrine Customer Terms and Conditions
These Peregrine Customer Terms and Conditions govern the provision of the services described on the attached Order Form (“Order Form”) by Peregrine Technologies, Inc. (“Peregrine”) to Tracy Police Department (“Customer”).

By executing an Order Form with Peregrine, Customer agrees to be bound by these Terms and Conditions.

1. Definitions.
“Aggregated Data” has the meaning specified in Section 6.1. “CJIS Security Policy” means the FBI CJIS Security Policy document as published by the FBI CJIS Information Security Officer, currently located at https://www.fbi.gov/services/cjis/cjis-security-policy-resource-center. “Client-Side Software” means any software in source or object code form that Peregrine makes available for use in connection with the Service, including Peregrine’s mobile application(s). “Criminal Justice Information Services Division ” or “ CJIS” means the FBI division responsible for the collection, warehousing, and timely dissemination of relevant criminal justice information to the FBI and to qualified law enforcement, criminal justice, civilian, academic, employment and licensing agencies. “Customer Data” means any of Customer’s data, information, documents or electronic files that are provided to Peregrine via the Service or otherwise in connection with this Agreement, including any databases Customer procures from third party vendors for Peregrine’s integration with the Service; provided that, for purposes of clarity, Customer Data as defined herein does not include Aggregated Data. “Documentation” means the materials supplied b y Peregrine hereunder, in any media, including any and all installer’s, operator’s and user’s manuals, training materials, guides, functional or technical specifications or other materials for use in conjunction with the Service.
“Personal Information” means any information that, individually or in combination, does or can identify a specific individual or by or from which a specific individual may be identified, contacted, or located, including without limitation all data considered “personal data”, “perso nally identifiable information”, or something similar under applicable laws, rules, or regulations relating to data privacy. “Professional Services” has the meaning specified in Section 2.2. “Service” means Peregrine’s proprietary platform that assist s Users with criminal investigations and police leadership decision making, consisting of a hosted web -based interface and the Client -Side Software. For purposes of this Agreement, the Service is exclusive of Professional Services that may be rendered upon mutual agreement of the parties in accordance with Section 2.2.
“SOW” has the meaning specified in Section 2.2.
“Third Party Data ” means any third party databases that Peregrine licenses from third party vendors and makes accessible via the Service. For clarity, Third Party Data does not include any Customer Data. “Third Party Products ” means any third -party products provided with, integrated with, or incorporated into the Service, including Third Party Data.
“Users” means the individuals authorized by Customer to use the Service in accordance with the terms in the Order Form (including number and type of individuals who may access the Service) and that have been supplied user identifications and passwords by Peregrine.

2. Provision of the Service and Additional Services.

2.1. Service. During the Term and subject to the terms and conditions of this Agreement, including payment of the fees set forth on the Order Form, Customer may: (a) access and use the Service for up to the number of Users set forth in the Order Form, (b) download and reproduce the applicable Documentation solely for internal use in association with the Service , and (c) download, install, and u se any Client -Side Software in support of Customer’s use of the Service, in each case on a nonexclusive, non -transferable, and non -sublicensable basis and solely for Docusign Envelope ID: 2FE0CEF5-F68D-4ED2-866C-C959FE6A1F55 Docusign Envelope ID: 8C930239-2B4A-4DC9-BDD3-A3B741B3274A February 18, 2025
4 Proprietary and Confidential
Customer’s internal business purposes . Peregrine shall provide Customer with authenticatio n credentials for individual Users upon written request from authorized personnel of Customer, (ii) onboarding and training services as set forth in the Order Form (“ Onboarding and Training Services ”), and (iii) telephone and standard technical support to Customer during normal business hours (“Technical Support”). Except as set forth herein, Peregrine shall, at its sole cost and expense, provide all facilities and equipment that may be necessary for Peregrine to perform the Services.

2.2. Professional Services . Except as set forth in the Order Form, in the event that Customer requests that Peregrine perform data integration, configuration or implementation services regarding the Service, including integration of Customer Data or Third Party Data and creation of specific modifications to the Service (but excluding any Onboarding and Training Services), Peregrine will discuss the scope and fees for such services and, if agreed, such work will be performed pursuant to a statement of work executed by the parties and referencing this Agreement that describe such scope and fees (an “ SOW,” and such services, the “ Professional Services”). Any fees associated with the Professional Services shall be set forth in the applicable SOW and Customer shall pay such fees in accordance with Section 4.2 below. To the extent the Professional Services result in any software code or other tangible work product (“ Work Product ”), all such Work Product will remain owned solely and exclusively by Peregrine and may be used by Customer solely in connection with Customer’s authorized use of the Service under this Agreement. Customer shall permit Peregrine access to Customer’s offices and any other facilities necessary for Peregrine to provide the Professional Services.

2.3. Access and Policies. Customer will permit Peregrine access to Customer’s offices and any other facilities necessary for Peregrine to provide the Service, Onboarding and Training Services, Technical Support, and any Professional Services. Peregrine agrees to, and cause its personne l to, abide by Customer’s facilities access and use policies as provided by Customer to Peregrine in writing in advance of any on -site visits. Customer will also permit and enable Peregrine to have offsite access to Customer Data and the Customer’s product ion platform for the Service in order to provide the Service, Technical Support and Professional Services. Peregrine agrees to comply with the CJIS Security Policy in connection with its access to Customer Data, including CJIS -defined policies for remote access.

2.4. Compliance with Applicable Laws . Each party and its agents shall comply with all laws applicable to the performance or receipt, as applicable, of the Service hereunder.

2.5. Licenses and Permits. Peregrine and its employees, agents, and any subcontractors have, and will maintain at their sole cost and expense, all licenses, permits, qualifications, and approvals of whatsoever nature that are legally required to practice their respective professions. In addition to the foregoing, Peregrine and any subcontractors shall obtain and maintain during the term of this Agreement valid business licenses from Customer as required by law.

2.6. Nondiscrimination and Equal Opportunity. Peregrine shall not discriminate, on the basis of a person’s race, religion, color, national origin, age, physical or mental handicap or disability, medical condition, genetic information, marital status, sex, sexual orientation, gender or gender identity, against any employee, applicant for employment, subcontractor, bidder for a subcont ract, or participant in, recipient of, or applicant for any services or programs provided by Peregrine under this Agreement. Peregrine shall comply with all applicable federal, state, and local laws, policies, rules, and requirements related to equal oppor tunity and nondiscrimination in employment, contracting, and the provision of any services that are the subject of this Agreement, including but not limited to the satisfaction of any positive obligations required of Peregrine thereby.

2.7. Suspension. Notwith standing anything to the contrary in this Agreement, Peregrine may temporarily suspend Customer’s and any User’s access to any portion or all of the Service if: (a) Peregrine reasonably determines that (i) there is a threat or attack on the Service; (ii) C ustomer’s or any User’s use of the Service disrupts or poses a security risk to the Service or to any other customer or vendor of Peregrine; (iii) Customer, or any User, is using the Service for fraudulent or illegal activities; (iv) subject to applicable law, Customer has ceased to continue its business in the ordinary course, made an assignment for the benefit of creditors or similar disposition of its assets, or become the subject of any bankruptcy, reorganization, liquidation, dissolution, or similar pr oceeding; (v) Peregrine’s provision of the Service to Customer or any User is prohibited by applicable law; or (vi) any Customer Data submitted, Docusign Envelope ID: 2FE0CEF5-F68D-4ED2-866C-C959FE6A1F55 Docusign Envelope ID: 8C930239-2B4A-4DC9-BDD3-A3B741B3274A February 18, 2025
5 Proprietary and Confidential
posted, or otherwise transmitted by or on behalf of Customer or an User through the Service may infringe or otherwise violate any third party’s intellectual property or other rights; (b) any vendor of Peregrine has suspended or terminated Peregrine’s access to or use of any Third Party Products required to enable Customer to access the Service; or (c) if Customer f ails to pay any undisputed fees when due (any such suspension described in subclauses (a), (b), or (c), a “Service Suspension”). Peregrine shall use commercially reasonable efforts to provide written notice of any Service Suspension to Customer and to prov ide updates regarding resumption of access to the Service following any Service Suspension. Peregrine shall use commercially reasonable efforts to resume providing access to the Service as soon as reasonably possible after the event giving rise to the Service Suspension is cured. Peregrine will have no liability for any damage, liabilities, losses (including any loss of data or profits), or any other consequences that Customer or any User may incur as a result of a Service Suspension.

2.8. Third Party Products. Peregrine may from time to time make Third Party Products available to Customer or Peregrine may allow for certain Third Party Products to be integrated with the Service. For purposes of this Agreement, such Third Party Products are subject to their own te rms and conditions. Peregrine is not responsible for the operation of any Third Party Products and makes no representations or warranties of any kind with respect to Third Party Products or their respective providers. If Customer does not agree to abide by the applicable terms for any such Third Party Products, then Customer should not install or use such Third Party Products. By authorizing Peregrine to transmit Customer Data from Third Party Products into the Service, Customer represents and warrants to Peregrine that it has all right, power, and authority to provide such authorization.

2.9. Open Source Components. Certain aspects of the Service, such as the Client-Side Software, may contain or be distributed with open source software code or libraries (“ Open Source Components”). Peregrine will provide a list of Open Source Components for a particular version of any distributed portion of the Service, such as the Client- Side Software, on Customer’s request. To the extent required by the license applicable to suc h Open Source Components: (a) Peregrine will use reasonable efforts to deliver to Customer any notices or other materials (such as source code); and (b) the terms of such licenses will apply to such Open Source Components in lieu of the terms of this Agreement. To the extent the terms of such licenses prohibit any of the restrictions in this Agreement with respect to any particular Open Source Component, such restrictions will not apply to such Open Source Component.

To the extent the terms of such licenses require Peregrine to make an offer to provide source code or related information in connection with the Open Source Component, such offer is hereby made. For purposes of clarity, Open Source Components are Third Party Products.

3. Customer Responsibilities.

3.1. Generally. Customer is responsible for all activities that occur under User accounts. Customer also shall: (a) ensure it has all rights necessary for Peregrine to integrate the Customer Data with the Service; (b) have sole responsibility for the accuracy, quality, integrity, legality, reliability, and appropriateness of all Customer Data; (c) prevent unauthorized access to, or use of, the Service, and notify Peregrine immediately of any unauthorized access or use; (d)_ensure each User has its own unique ac count on the Service and that Users do not share their account credentials with one another or any third party; and (e) comply with all applicable laws in using the Service. Customer agrees to provide its Users with the applications necessary to run the Se rvice as set forth in the Documentation.

3.2. Use Restrictions. Customer shall not use the Service for any purposes beyond the scope of access granted under this Agreement. Without limiting the generality of the foregoing, Customer shall not, and shall ensure U sers do not: (a) license, sublicense, sell, resell, rent, lease, transfer, assign, distribute, time share or otherwise commercially exploit or make the Service available to any third party; (b) send spam or otherwise duplicative or unsolicited messages via the Service; (c) send or store infringing or unlawful material; (d) send or store material containing software viruses, worms, Trojan horses or other harmful computer code, files, scripts, agents or programs; (e) interfere with or disrupt the integrity or performance of the Service or the data contained therein; (f) attempt to gain unauthorized access to the Service or its related systems or networks ; (g) copy, modify, or create derivative works based upon the Service or any component thereof; (h) reverse engineer, disassemble, decompile, decode, adapt, or otherwise attempt to derive or gain access to any software component of the Service or any component thereof; (i) use the Service in any manner or for any purpose that infringes, misappropriates, or otherwise violates any intellectual property or other right of any third party or that violates any applicable law; (j) access or use the Service for purposes of competitive analysis of Peregrine or the Service, the development, Docusign Envelope ID: 2FE0CEF5-F68D-4ED2-866C-C959FE6A1F55 Docusign Envelope ID: 8C930239-2B4A-4DC9-BDD3-A3B741B3274A February 18, 2025
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provision, or use of a competing service or product, or any other purpose that is to Peregrine’s detriment or commercial disadvantage; or (k) input, upload, transmit, or otherwise provide to or through the Service any information or materials, including Customer Data, that are unlawful or injurious in any way

3.3. CJIS Requirements. Customer certifies that it and its Users will comply with the following CJIS requirements:
(a) Customer agrees to use training, policy and procedures to ensure Users use proper handling, processing, storing and c ommunication protocols for Customer Data and any Third Party Data; (b) Customer agrees to protect the Service and any Third Party Data by monitoring and auditing staff user activity to ensure that it is only within the purview of system application development, system maintenance and the support roles assigned; (c) Customer will only provide access to the Service and any Third Party Data through Customer -managed role -based access and applied sharing rules configured by Customer; (d) Customer agrees to creat e and retain activity transaction logs to enable auditing by Peregrine staff, CJIS and any Third Party Data owners; (e) Customer agrees to perform independent employment background screening for its staff at Customer’s own expense; and (f) Customer agrees to reinforce staff policies for creating User accounts with only one Customer domain email address for each User, with exceptions only as granted in writing by Peregrine.

3.4. Operation Restrictions. Under certain circumstances, it may be dangerous to operate a moving vehicle while attempting to operate a laptop, mobile device or other touch screen and any of their applications. Customer agrees that the Users will be instructed to only utilize the interface for the Service at times when it is safe to do so.

Peregrine is not liable for any accident caused by a result of distraction such as from viewing the screen while operating a moving vehicle.

3.5. Customer Logo. Peregrine may use Customer’s name and logo in Peregrine’s lists of customers provided that such use will comply with any standard trademark guidelines provided by Customer to Peregrine.

3.6. Feedback. If Customer or any of its employees or contractors sends or transmits any communications or materials to Peregrine by mail, email, telephone, or otherwise, suggesting or recommending changes to the Service, including without limitation, new features or functionality relating thereto, or any comments, questions, suggestions, or the like (“Feedback”), Peregrine is free to use such Feedback irrespective of any other ob ligation or limitation between the parties governing such Feedback.

4. Fees & Payment.

4.1. Fees. Customer shall pay the fees for the Service as specified in the Order Form and in any SOWs. All fees are non-refundable except to the extent otherwise expressly set forth in this Agreement.

4.2. Payment Terms. Except as set forth on the Order Form, Customer shall pay all fees within thirty (30) days of Peregrine issuing an invoice.

4.3. Taxes. Peregrine’s fees do not include any local, state, federal or foreign taxes, levies or duties of any nature (“Taxes”). Customer is responsible for paying all Taxes, excluding only taxes based on Peregrine’s income. If Peregrine has the legal obligation to pay or collect Taxes for which Customer is responsible under this section, the appropriate amount shall be invoiced to and paid by Customer unless Customer provides Peregrine with a valid tax exemption certificate authorized by the appropriate taxing authority.

5. Proprietary Rights. The “Peregrine Technology “means (a) the Peregrine name, th e Peregrine logo, and other trademarks and service marks; (b) audio and visual information, documents, software and other works of authorship, including training materials; (c) other technology included in the Service, including Client-Side Software, graphical user interfaces, workflows, products, processes, algorithms, know -how and other trade secrets, techniques, designs, inventions and other tangible or intangible technical material or information provided by Peregrine under this Agreement; and (d) the work product or other results of Professional Services. Peregrine owns and shall retain all rights in the Peregrine Technology. Other than as expressly set forth in Section 2.1 above, no license or other rights in or to the Peregrine Technology or rela ted intellectual property rights are granted to Customer or Users, and all such licenses and rights are hereby expressly reserved to Peregrine. For clarity, “Peregrine Technology” does not include Customer Data.

6. Data Access, Sharing and Security.

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6.1. Customer Data. Peregrine may access, reproduce, and use Customer Data to provide the Service, including to provide Technical Support, Onboarding and Training Services and any Professional Services. Customer agrees that Peregrine may generate technical logs, data an d insights about Customer’s usage of the Service (e.g., frequency of logins) (“Peregrine Insights”) and may use the Customer Data in aggregated and anonymized form that does not individually identify any person or entity, including Customer or its Users (“ Aggregated Data ”) for Peregrine’s internal business purposes and to operate and improve Peregrine’s proprietary software and services, and that Peregrine shall own the Peregrine Insights and the Aggregated Data. Peregrine shall destroy Peregrine Insights a nd Aggregated Data on termination of this Agreement. Peregrine may choose to terminate the provision of any Customer Data via the Service if the provision of such data may be harmful to the Service, as determined by Peregrine in its reasonable discretion.

6.2. CJIS Security Policy. Peregrine has implemented procedures to allow for adherence to the CJIS Security Policy. The hosting facility for the Service uses access control technologies that meet or exceed CJIS requirements.

In addition, Peregrine has installed and configured solid network intrusion prevention appliances for adherence to the CJIS Security Policy.

6.3. Third Party Data. Any Third Party Data that Peregrine may provide via the Service is governed by the third party owner’s retention policy. Peregrine does not provide any warranties with respect to any Third Party Data and Peregrine may choose to terminate the provision of any Third Party Data via the Service if Peregrine’s applicable rights to such Third Party Data terminate or the provision of such data may be harmful to the Service, as determined by Peregrine in its reasonable discretion.

6.4. Processing of Personal Information. Peregrine’s rights and obligations with respect to Personal information it collects directly from individuals are set forth in Pere grine’s Privacy Policy <https://peregrine.io/privacy-policy/>.

Personal Information included within Customer Data and processed by Peregrine on behalf of Customer is governed by this Agreement.

6.5. Sensitive Information; Marking Requirements . To the extent Customer provides Customer Data that Customer considers to be sensitive, proprietary, restricted, or otherwise requiring sensitive treatment (“ Sensitive Information”), Customer is solely responsible for providing appropriate markings to desi gnate the applicable Customer Data as Sensitive Information. Customer shall provide Peregrine with documentation and/or instructions in writing with sufficient detail for Peregrine to identify and distinguish content that is Sensitive Information within other provided Customer Data. Customer shall ( a) mark Sensitive Information on its face, ( b) make the appropriate designations for Sensitive Information in document metadata, (c) provide Peregrine with a table or other list of Sensitive Information that cont ains sufficient detail to identify the Sensitive Information ; or (d) identify Sensitive Information to Peregrine in some other mutually agreed upon method. Peregrine shall not be responsible for failure to designate Sensitive Information with specific access control status based on Customer failure to provide sufficient information to identify Sensitive Information.

7. Confidentiality.

7.1. Definition of Confidential Information. The term “ Confidential Information ” means all confidential and proprietary information of a party (“ Disclosing Party”) disclosed to the other party (“ Receiving Party”), whether orally or in writing, that is designated as confidential or that reasonably should be understood to be confidential given the nature of the information and the circu mstances of disclosure, including Customer Data, any Third Party Data, the Service, the Documentation, the Peregrine Technology, business and marketing plans, technology and technical information, product designs, and business processes.

7.2. Confidentiality. The Receiving Party shall not disclose or use any Confidential Information of the Disclosing Party except to perform its obligations or exercise its rights under this Agreement, except with the Disclosing Party’s prior written permission on a case-by-case basis. Each party agrees to protect the confidentiality of the Confidential Information of the other party in the same manner that it protects the confidentiality of its own proprietary and confidential information of like kind, but in no event with less t han reasonable care. If the Receiving Party is compelled by law or a government authority to disclose Confidential Information of the Disclosing Party, it shall provide the Disclosing Party with prior notice of such compelled disclosure (to the extent prac ticable and legally Docusign Envelope ID: 2FE0CEF5-F68D-4ED2-866C-C959FE6A1F55 Docusign Envelope ID: 8C930239-2B4A-4DC9-BDD3-A3B741B3274A February 18, 2025
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permitted) and reasonable assistance, at Disclosing Party’s cost, if the Disclosing Party wishes to contest the disclosure.

7.3. Exceptions. The parties’ obligations in Section 7.2 shall not apply to any information that: (a) is or becomes publicly available without breach of any obligation owed to the Disclosing Party; (b) was known to the Receiving Party prior to its disclosure by the Disclosing Party without breach of any obligation owed to the Disclosing Party; (c) was independently developed by the Receiving Party without breach of any obligation owed to the Disclosing Party; or (d) is received from a third party without breach of any obligation owed to the Disclosing Party.

7.4. Public Records Act s. Peregrine acknowledges that Customer is a p ublic entity and may be governed by applicable laws, rules, or regulations relating to public records (each a “Public Records Act”). Nothing in this Section 7 shall prevent Customer from disclosing Confidential Information for purposes of complying with an applicable Public Records Act to the extent legally required.

7.5. Remedies. If the Receiving Party discloses or uses (or threatens to disclose or use) any Confidential Information of the Disclosing Party in breach of this Section 7, the Disclosing Party shal l have the right, in addition to any other remedies available to it, to seek injunctive relief to enjoin such acts, it being specifically acknowledged by the parties that such unauthorized disclosure or use may cause irreparable harm to the Disclosing Party for which any other available remedies are inadequate.

8. Warranties & Disclaimers.

8.1. Warranties. Each party represents and warrants that it has the legal power and authority to enter into this Agreement. Peregrine represents and warrants that (i) it will provide the Service in a professional manner consistent with the standards observed by a competent practitioner of the profession in which Peregrine is engaged, and (ii) the Service will perform in accordance with and otherwise substantially conform to its associated documentation.

8.2. Disclaimer. EXCEPT AS EXPRESSLY PROVIDED IN SECTION 8.1, PEREGRINE MAKES NO WARRANTY OF ANY

KIND, WHETHER EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE WITH RESPECT TO THE SERVICE, THE PEREGRINE

TECHNOLOGY, ANY THIRD PARTY DATA AND A NY OTHER PRODUCTS OR SERVICES PROVIDED UNDER THIS AGREEMENT. PEREGRINE HEREBY SPECIFICALLY DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING ANY WARRANTY

OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE OR NON -INFRINGEMENT, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW.

9. Indemnification.

9.1. Indemnification by Peregrine. Peregrine shall at its expense defend Customer and its officers, directors, officials, agents, volunteers and employees (“ Customer Indemnified Parties ”) against any claim made or broug ht against any Customer Indemnified Party by a third party alleging that the Service as provided to Customer and when used in accordance with this Agreement infringes any intellectual property rights of a third party (each, a “Customer Claim”), and shall indemnify and hold Customer Indemnified Parties harmless from and against any and all liability, loss, damage, claims, expenses, and costs, including without limitation, attorney’s fees, awarded by a court or agreed to by Peregrine in a settlement with resp ect to such Customer Claim; provided, that Customer (a) promptly gives written notice of the Customer Claim to Peregrine; (b) gives Peregrine sole control of the defense and settlement of the Customer Claim (provided that Peregrine may not agree to any settlement that imposes any liability or obligation on Customer without Customer’s prior written consent, such consent not to be unreasonably withheld, conditioned, or delayed ); and (c) provides to Peregrine, at Peregrine’s cost, all reasonable assistance in the defense and settlement of the Customer Claim. Peregrine shall have no obligation under this Section 9.1 or otherwise regarding claims that arise from or relate to (i) Customer’s use of the Service other than as contemplated by this Agreement, (ii) any modifications to the Service made by any entity other than Peregrine (where the liability would not have arisen but for such modification) , (iii) any combination of the Service with services or technologies not provided by Peregrine (where the liability would not have arisen but for such combination), (iv) Customer’s use of the Service or portion thereof after Peregrine has terminated this Agreement or such portion of the Service in accordance with this Section 9.1, or (v) Third Party Products. If in Peregrine’s opinion a Customer Claim is likely to be made, or if an existing Customer Claim may cause Peregrine liability, Peregrine may in its discretion (x) obtain a license to enable Customer to continue to use the potentially infringing portion of the Servic e, (y) modify the Service to avoid the potential Docusign Envelope ID: 2FE0CEF5-F68D-4ED2-866C-C959FE6A1F55 Docusign Envelope ID: 8C930239-2B4A-4DC9-BDD3-A3B741B3274A February 18, 2025
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infringement, or (z) if the foregoing cannot be achieved after using reasonable commercial efforts, terminate the Agreement or the license to the infringing portion of the Service and refund the amount of an y pre -paid fees applicable to the portion of the terminated Services to be provided after the termination date.

9.2. Indemnification by Customer. To the extent permitted by applicable law, Customer shall at its expense defend Peregrine and its officers, directo rs, officials, agents, volunteers and employees (“ Peregrine Indemnified Parties”) against any claim made or brought against any Peregrine Indemnified Party by a third party based on: (a) Customer’s or any User’s negligence, gross negligence, fraud, or willful misconduct; (b) Customer’s or any User’s use of the Service in a manner not authorized by this Agreement; or (c) Customer Data or Peregrine’s authorized use of such Customer Data (each, a “ Peregrine Claim ”), and shall indemnify and hold Peregrine Indem nified Parties harmless from and against any and all liability, loss, damage, claims, expenses, and costs, including without limitation, attorney’s fees, awarded by a court or agreed to by Customer in a settlement with respect to such Peregrine Claim; provided, that Peregrine (i) promptly gives written notice of the Peregrine Claim to Customer; (ii) gives Customer sole control of the defense and settlement of the Peregrine Claim (provided that Customer may not agree to any settlement that imposes any liabil ity or obligation on Peregrine without Peregrine’s prior written consent, such consent not to be unreasonably withheld, conditioned, or delayed); and (iii) provides to Customer, at Customer’s cost, all reasonable assistance in the defense and settlement of the Peregrine Claim.

9.3. Sole Remedy . THIS SECTION 9 SETS FORTH CUSTOMER’S SOLE REMEDIES AND PEREGRINE’S SOLE

LIABILITY AND OBLIGATION FOR ANY ACTUAL, THREATENED, OR ALLEGED CLAIMS BY THIRD PARTIES RELATING TO THE SERVICE OR ITS USE.

10. Limitation of Liability.

10.1. Exclusion of Consequential and Related Damages. EXCEPT FOR A PARTY’S BREACH OF SECTION 7, A PARTY’S INDEMNIFICATION AND DEFENSE OBLIGATIONS, OR A PARTY’S GROSS NEGLIGENCE, FRAUD, OR WILLFUL

MISCONDUCT, IN NO EVENT SHALL EITHER PARTY HAVE ANY LIABILITY TO THE OTHER PARTY FOR ANY LOST PROFITS,

LOSS OF USE, COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, OR FOR ANY INDIRECT, SPECIAL,

INCIDENTAL, MULTIPLE, EXEMPLARY, PUNITIVE, OR CONSEQUENTIAL DAMAGES HOWEVER CAUSED AND, WHETHER

IN CONTRACT, TORT OR UNDER ANY OTHER THEORY OF LIABILITY, WHETHER OR NOT THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.

10.2. Liability Cap. IN NO EVENT SHALL PEREGRINE’S AGGREGATE LIABILITY ARISING OUT OF OR RELATING TO

THIS AGREEMENT UNDER ANY LEGAL OR EQUITABLE THEORY, INCLUDING BREACH OF CONTRACT, TORT (INCLUDING

NEGLIGENCE), STRICT LIABILITY, OR OTHERWISE, EXCEED THE TOTAL AMOUNTS PAID TO PEREGRINE UNDER THIS AGREEMENT IN THE TWELVE (12) MONTHS IMMEDIATELY PRECEDING THE CLAIM.

11. Term & Termination.

11.1. Term of Agreement. This Agreement commences on the Effective Date and continues for the duration of the term set forth on the Order Form (“ Term”), unless earlier terminated in accordance with the Order Form or Section 11.2

11.2. Termination for Cause. A party may terminate this Agreement for cause upon thirty (30) days written notice of a material breach to the other party if such breach remains uncured at the expiration of such period. Termination shall not relieve Customer of the obligation to pay any fees accrued or payable to Per egrine prior to the effective date of termination.

11.3. Data. Upon expiration or termination of this Agreement, Peregrine shall have no obligation to maintain or provide any Customer Data or Third Party Data. Unless legally prohibited, Peregrine shall delete al l Customer Data in its systems or otherwise in its possession or under its control. Notwithstanding the foregoing or any other provision of this Agreement, Peregrine may use in perpetuity any Aggregated Data.

11.4. Survival. The following provisions shall survi ve termination or expiration of this Agreement: Sections 4, 5,

6.1, 6.3, 7, 8, 9, 10, 11.3, 11.4, and 12.

12. General Provisions.

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12.1. Insurance. Peregrine shall maintain the insurance coverages described on Appendix A: Insurance.

12.2. Relationship of the Parties. This Agreement does not create a partnership, franchise, joint venture, agency, fiduciary or employment relationship between the parties. There are no third-party beneficiaries to this Agreement.

At all times during the term of this Agreement, Peregrine shall be an independent contractor and shall not be an employee of Customer. Except as Customer may specify in writing, Consultant shall have no authority, e xpress or implied, to act on behalf of Customer in any capacity whatsoever as an agent. Peregrine shall have no authority, express or implied, pursuant to this Agreement to bind Customer to any obligation whatsoever.

12.3. Peregrine’s Books and Records. To the extent required by applicable laws, rules, or regulations, Peregrine shall maintain any and all records or documents evidencing or relating to charges for services or expenditures and disbursements charged to the Customer under this Agreement for a minimum of 3 years, or for any longer period required by law, from the date of final payment to Peregrine to this Agreement. All such records shall be maintained in accordance with generally accepted standards and shall be made available for inspection, au dit, and/or copying during regular business hours, upon written request of the Customer.

12.4. Force Majeure. Neither party shall be liable by reason of any failure or delay in performance of its obligations under this Agreement (except for the payment of money) on account of events beyond the reasonable control of such party, which may include Internet denial -of-service attacks, strikes, shortages, riots, insurrection, fires, flood, storm, explosions, acts of God, war, terrorism, governmental action, labor conditions, earthquakes, and material shortages (each, a “ Force Majeure Event ”). Upon the occurrence of a Force Majeure Event, the non - performing party will be excused from any further performance of its obligations affected by the Force Majeure Event for so long as the event continues and such party continues to use commercially reasonable efforts to resume performance.

12.5. Federal Government. Any use, copy or disclosure of the Service by the U.S. Government is subject to restrictions as set forth in this Agreement and as provided by DFARS 227.7202-1(a) and 227.7202-3(a)(1995), DFARS 252.227-7013(c)(1)(ii)(October 1998), FAR 12.212(a)(1995), FAR 52.227-19, or FAR 52.227(ALT III), as applicable.

12.6. Additional Government Terms. Peregrine acknowledges that Customer may be a public entity and, accordingly, certain additional laws, rules, and regulations may take precedence over the terms and conditions of this Agreement (the “ Additional Government Terms ”). The Additional Government Terms, if any, are attached hereto as Error! Reference source not found. , and will govern to the extent of any conflict with any other term of this Agreement.

12.7. Notices. All notices under this Agreement shall be in writing and shall be deemed to have been given upon:
(a) personal delivery; (b) the second business day after mailing; (c) the second business day after sending by confirmed facsimile; or (d) after confirmed receipt of an email. Notices to Peregrine shall be addressed to the attention of Nick Noone, CEO, Peregrine Technologies, [email protected], with a copy to [email protected]. Notices to Customer are to be addressed to the individual identified in the Order Form.

12.8. Waiver; Cumulative Remedies Severability. No failure or delay by either party in exercising any right under this Agreement shall constitute a waiver of that right. Other than as expressly stated herein, the remedies provided herein are in addition to, and not exclusive of, any other remedies of a party at law or in equity. If any provision of this Agreement is held by a court of competent jurisdiction to be contrary to law, the provision shall be modified by the court and interpreted so as best to accomplis h the objectives of the original provision to the fullest extent permitted by law, and the remaining provisions of this Agreement shall remain in effect.

12.9. Assignment. Neither party may assign any of its rights or obligations hereunder, whether by operation of law or otherwise, without the prior express written consent of the other party. Notwithstanding the foregoing, Peregrine may assign this Agreement, together with all rights and obligations hereunder, without consent of Customer, in connection with a merger, acquisition, corporate reorganization, or sale of all or substantially all of its stock or assets that relate to this Agreement. Any attempt by a party to assign its rights or obligations under this Agreement in breach of this section shall be void an d of no effect. Subject to the foregoing, this Agreement shall bind and inure to the benefit of the parties, their respective successors and permitted assigns.

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12.10. Governing Law. This Agreement shall be governed by the laws of California. The state courts located in San Joaquin County, CA or in the United States District Court for the Eastern District of California shall have exclusive jurisdiction to adjudicate any dispute arising out of or relating to this Agreement. Each party hereby consents to the exclusive jurisdiction of such courts provided that nothing in this Section 12.10 prohibits either party from seeking or obtaining in any jurisdiction injunctive or similar relief in connection with the enforcement of this Agreement.

12.11. Construction. The division of this Agreement into Sections and the insertion of captions and headings are for convenience of reference only and will not affect the construction or interpretation of this Agreement. The terms “this Agreement,” “hereof,” “hereunder” and any similar expre ssions refer to this Agreement and not to any particular Section or other portion hereof. The parties hereto agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting party will not be applied in the constru ction or interpretation of this Agreement. As used in this Agreement, the words “include” and “including,” and variations thereof, will be deemed to be followed by the words “without limitation” and “discretion” means sole discretion

12.12. Entire Agreement. This Agreement constitutes the entire agreement between the parties, and supersedes all prior and contemporaneous agreements, proposals or representations, written or oral, concerning its subject matter. No modification, amendment, or waiver of any provision o f this Agreement shall be effective unless in writing and signed by the party against whom the modification, amendment or waiver is to be asserted.

Notwithstanding any language to the contrary therein, no terms or conditions stated in a Customer purchase o rder or in any other Customer order documentation (excluding the Order Form) shall be incorporated into or form any part of this Agreement, and all such terms or conditions are hereby rejected and shall be null and void.

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Appendix A: Insurance
Peregrine, at its own cost and expense, shall procure the types and amounts of insurance specified herein and maintain that insurance throughout the term of the Agreement. The cost of such insurance shall be included in the Peregrine’s bid or proposal. Per egrine shall be fully responsible for the acts and omissions of its subcontractors or other agents.

Workers’ Compensation. Peregrine shall, at its sole cost and expense, maintain Statutory Workers’ Compensation Insurance and Employer’s Liability Insurance for any and all persons employed directly or indirectly by Peregrine in the amount required by applicable law. The requirement to maintain Statutory Workers’ Compensation and Employer’s Liability Insurance may be waived by the Customer upon written verifi cation that Peregrine is a sole proprietor and does not have any employees and will not have any employees during the term of this Agreement.

Commercial General and Automobile Liability Insurance
General requirements. Peregrine, at its own cost and expense, shall maintain commercial general and automobile liability insurance for the term of this Agreement in an amount not less than $1,000,000 per occurrence and $2,000,000 aggregate, combined single limit coverage for risks assoc iated with the work contemplated by this Agreement.

Minimum scope of coverage. Commercial general coverage shall be at least as broad as Insurance Services Office Commercial General Liability occurrence form CG 0001 (most recent edition) covering comprehe nsive General Liability on an “occurrence” basis. Automobile coverage shall be at least as broad as Insurance Services Office Automobile Liability form CA 0001 (most recent edition) covering any auto (Code 1), or if Peregrine has no owned autos, hired (code 8) and non-owned autos (Code 9). No endorsement shall be attached limiting the coverage.

Additional requirements. Each of the following shall be included in the insurance coverage or added as a certified endorsement to the policy:
a. The Commercial General and Automobile Liability Insurance shall cover on an occurrence basis. b. Customer, its officers, officials, employees, agents, and volunteers shall be covered as additional insureds for liability arising out of work or operations on behalf of the Peregrine, including materials, parts, or equipment furnished in connection with such work or operations; or automobiles owned, leased, hired, or borrowed by the Peregrine. Coverage can be provided in the form of an endorsement to the Peregrine’s insurance at least as broad as CG 20 10 11 85, or both CG 20 10 10 01 and CG 20 37 10 01. c. For any claims related to this Agreement or the work hereunder, the Peregrine’s insurance covered shall be primary insurance as respects the Customer, its officers, officials, employees, agents, and volunteers. Any insurance or self-insurance maintained by the Customer, its officers, officials, employees, agents or volunteers shall be excess of the Peregrine’s insurance and non-contributing.
d. The policy shall cover inter -insured suits and include a “separation of Insureds” or “severability” clause which treats each insured separately.
e. Peregrine agrees to give at least 30 days prior written notice to Customer before coverage is canceled or modified as to scope or amount.

Professional Liability Insurance.

General requirements. Peregrine, at its own cost and expense, shall maintain for the period covered by this Agreement professional liability insurance for licensed professionals performing work pursuant to this Agreement in an amount not less than $1,000,000 per occurrence or claim covering the Peregrine’s errors and omissions.

Claims-made limitations. The following provisions shall apply if the professional liability coverage is written on a claims-made form:
a. The retroactive date of the policy must be shown and must be before the date of the Agreement.

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b. Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of the Agreement or the work.
c. If coverage is canceled or not renewed and it is not replaced with another claims -made policy form with a retroactive date that precedes the date of this Agreement, Peregrine must purchase an extended period coverage for a minimum of five (5) years after completion of work under this Agreement. d. A copy of the claim reporting requirements must be submitted to the Customer for review prior to the commencement of any work under this Agreement.

All Policies Requirements.

Submittal Requirements. Peregrine shall submit the following to Customer prior to beginning services:

Certificate of Liability Insurance in the amounts specified in this Agreement; and Additional Insured Endorsement as required for the General Commercial and Automobile Liability Polices.

Acceptability of Insurers. All insurance required by this Agreement is to be placed with insurers with a Bests' rating of no less than A:VII.

Deductibles and Self-Insured Retentions. Insurance obtained by the Peregrine shall have a self-insured retention or deductible of no more than $100,000.

Wasting Policies. No policy required herein shall include a “wasting” policy limit (i.e. limit that is eroded by the cost of defense).

Waiver of Subrogation. Peregrine hereby agrees to waive subrogation which any i nsurer or contractor may require from Peregrine by virtue of the payment of any loss. Peregrine agrees to obtain any endorsements that may be necessary to effect this waiver of subrogation, but this provision applies regardless of whether or not the Customer has received a waiver of subrogation endorsement from the insurer.

The Workers’ Compensation policy shall be endorsed with a waiver of subrogation in favor of the Customer for all work performed by the Peregrine, its employees, agents, and subcontractors.

Subcontractors. Peregrine shall include all subcontractors as insureds under its policies or shall furnish separate certificates and endorsements for each subcontractor. All coverages for subcontractors shall be subject to all of the requirements stated herein, and Peregrine shall ensure that Customer, its officers, officials, employees, agents, and volunteers are covered as additional insured on all coverages.

Excess Insurance. If Peregrine maintains higher insurance limits than the minimums specified herein, Customer shall be entitled to coverage for the higher limits maintained by the Peregrine.

Remedies. In addition to any other remedies Customer may have if Peregrine fails to provide or maintain any insurance policies or pol icy endorsements to the extent and within the time herein required, Customer may, at its sole option, order Peregrine to stop work under this Agreement and withhold any payment that becomes due to Peregrine hereunder until Peregrine demonstrates compliance with the requirements hereof, or terminate this Agreement.

Docusign Envelope ID: 2FE0CEF5-F68D-4ED2-866C-C959FE6A1F55 Docusign Envelope ID: 8C930239-2B4A-4DC9-BDD3-A3B741B3274A February 18, 2025
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Appendix B: Provisions for California Public Entities
Compliance with Applicable California Laws . Peregrine shall, to the extent required by the California Labor Code, pay not less than the latest prevailing wage rates as determined by the California Department of Industrial Relations.

California Public Records Act . Peregrine acknowledges that Customer is a public entity governed by the California Public Records Act and that nothing in this Agr eement shall prevent Customer from disclosing Confidential Information for purposes of complying with the California Public Records Act.

PERS Indemnification by Peregrine . In the event that Peregrine or any employee, agent, or subcontractor of Peregrine p roviding services under this Agreement is determined by a court of competent jurisdiction or the California Public Employees Retirement System (“PERS”) to be eligible for enrollment in PERS as an employee of Customer, at Peregrine shall indemnify, defend, and hold harmless Customer for the payment of any employee and/or employer contributions for PERS benefits on behalf of Peregrine or its employees, agents, or subcontractors, as well as for the payment of any penalties and interest on such contributions, w hich would otherwise be the responsibility of Customer.

Political Reform Act Conflicts . Peregrine may serve other clients, but none whose activities within the corporate limits of Customer or whose business, regardless of location, would place Peregrine in a “conflict of interest,” as that term is defined in the Political Reform Act, codified at California Government Code Section 81000 et seq. No officer or employee of Customer shall have any financial interest in this Agreement that would violate Calif ornia Government Code Sections 1090 et seq.

California State Auditor Requirements . Pursuant to Government Code Section 8546.7, the Agreement may be subject to the examination and audit of the State Auditor for a period of 3 years after final payment under the Agreement.

Docusign Envelope ID: 2FE0CEF5-F68D-4ED2-866C-C959FE6A1F55 Docusign Envelope ID: 8C930239-2B4A-4DC9-BDD3-A3B741B3274A

Tracy Police Department 2/17/25
1000 Civic Center Dr
Tracy, Ca 95376

Thank you for your agency’s interest in Peregrine’s unified data platform (“the Peregrine platform” or “the platform”). The Peregrine platform has been built with law enforcement and public safety agencies in mind, making it uniquely suited to the needs of the Tracy Police Department (TPD). The Peregrine platform is the only end- to-end software available on the market with the following integrated capabilities:
• Purpose-built data integrations Specifically for systems used by TPD. Peregrine offers proven, pre -built connectors that allow for seamless integration with critical existing TPD systems such as Mark 43 CAD, Mark 43 RMS, AXON Body Worn Cameras, FLOCK ALPRs, CROSSROADS eCitation, Fleet 3 ALPR, Laserfische and Dronsense . These pre -built connectors eliminate any requirements for TPD IT to develop and maintain interfaces between Peregrine and TPD source systems and ensure that data available in Peregrine is complete, accurate, and always up -to-date. • Fully Integrated Search, Map, Link Analysis, Reporting, and Dashboarding. Peregrine offers the only solution on the market that offers a fully integrated set of user-facing applications for search, map-based analysis, link analysis, reporting, and dashboarding that allow for seamless movement of data between those applications without the need to export and import data manually. Additionally, Peregrine is the only solution that offers desktop, laptop, tablet, and mobile device accessible versions of those integrated applications so that they can be accessed by authorized users wherever and whenever they are needed.
• Proprietary Data Deduplication Algorithms. Peregrine offers proprietary algorithms that will enable automatic and auditable deduplication and merging of data, such as person records. This will allow the TPD to have automatically clean, reliable information upon which to conduct data searches and compile reporting products without the need to make any changes to the agency’s underlying source systems. • Proprietary Ontology Purpose-Built for Law Enforcement. Peregrine offers the only dynamic ontology capability that has been purpose-built for Law Enforcement data. This allows the TPD to automatically establish connections and relationships between data elements within and across disparate systems that are otherwise likely to be missed.

Additionally, Peregrine’s dynamic ontology allows the TPD to have fully flexibility to change its desired data model over time without needing to build and maintain additional interfaces or make any changes to the agency’s underlying source systems and the way they store or represent information. The Peregrine O ntology has been developed and continuously refined to specifically accommodate law enforcement data and concepts. • Secure Collaboration and Data Sharing . The Peregrine platform’s proprietary integration, ontology, and granular security permissions enable secure sharing within the TPD and between TPD and partner agencies, public and private, that is otherwise not possible. Within the TPD, this will allow secure collaboration across investigations, patrol, custody operations, traffic, analysis and command staff. Additionally, Peregrine will allow the TPD to securely collaborate and share data in a common platform with critical Peregrine customer agencies within San Joaquin County and beyond including, but not limited to Alameda County, Contra Costa County, Stanislaus County and Santa Clara County. All data sharing and collaboration features are automatically synchronized with TPD’s existing user, group, and role security and access policies.
• Fully Open and Interoperable Architecture. Peregrine is the only solution on the market that ensures the TPD will never be at risk of vendor lock- in or issues related to data ownership. Peregrine’s fully open and interoperable architecture is fully vendor-agnostic, allowing Peregrine to integrate data from any current or future TPD solution and allow any such solutions to access data from Peregrine, without limitation, if desired by TPD. A customer retains full and total rights to

2 its data within Peregrine at all times and has the ability to access and export that data in open, standard data formats at any time.
• End-to-end security, CJIS, and CAL DOJ compliance. Peregrine is hosted on the secure, CJIS compliant Amazon Web Services (AWS) Government Cloud region. Peregrine meets or exceeds all standards and controls set forth in the most current CJIS and CAL DOJ security policies. Peregrine has been approved at multiple California agencies to handle sensitive information such as criminal justice information. Additionally, Peregrine offers seamless integration with TPD’s existing single-sign-on and multi-factor authentication services. This allows TPD to avoid any redundancy and duplication in managing user access and permissions and automatically ensure all interactions with sensitive data are compliant with existing agency data and information system security policies.

We look forward to working with TPD in the near future. If there are any additional questions, please do not hesitate to reach out to me directly.

Thank you,

Nick Noone
Co-Founder/CEO
[email protected]

APPROVED AS TO FORM AND LEGALITY
CITY ATTORNEY’S OFFICE

TRACY CITY COUNCIL
RESOLUTION NO.
1) MAKING A DETERMINATION THAT STRICT COMPLIANCE WITH STANDARD

PROCUREMENT PROCEDURES IS NOT IN THE BEST INTEREST OF THE CITY PURSUANT TO TRACY MUINICPAL CODE SECTION 2.20.180(4) AND DISPOSING

THESE REQUIREMENTS FOR THE PURCHASE, INSTALLATION, OPERATION, TRAINING AND MAINTENANCE OF PEREGRINE SOFTWARE; AND
2) APPROVING EXECUTION OF A MASTER SERVICE AGREEMENT WITH PEREGRINE TECHNOLOGIES, INC., FOR SUCH SERVICES FOR A TWO- YEAR TERM AND FOR A TOTAL NOT TO EXCEED AMOUNT OF $220,000.

WHEREAS, the Police Department (PD) requires the expertise and technology that Peregrine Technologies, Inc. has to fully implement the Real Time Information Center; and WHEREAS, this technology will provide real-time situational awareness, enhance officer safety and foster improved collaboration with City partners; and WHEREAS, this software will play a vital role in tackling the opioid epidemic by integrating overdose reports, Narcan usage data, opioid -related calls for service and locations of high -risk activity; and
WHEREAS, this software will disseminate data automatically to police personnel and in response ensuring timely interventions in the areas where they are needed the most; and WHEREAS, The Tracy Municipal Code 2.20.180(b)(4) provision allows the City Council to waive a procurement process when it determines that, compliance with the procedure is not in the best interest of the City for those commodities, equipment or general services the costs of which equal or exceed Fifty Thousand and no/100ths ($50,000.00) Dollars; and WHEREAS, Peregrine Technologies, Inc. (Vendor) has been identified as the sole provider capable of delivering an end-to-end software solution that meets the unique needs of the Tracy Police Department and its Real Time Information Center (RTIC). Their software offers a comprehensive suite of capabilities and they are the only vendor capable of meeting all of the City’s requirements for this software system; and
WHEREAS, staff has negotiated a Master Services Agreement with the Vendor for a two-year term and a total not to exceed amount of $220,000; now, therefore, be it Resolution 2025-

Page 2 ends

RESOLVED: That the City Council hereby makes a determination that strict compliance with standard procurement procedures is not in the best interest of the City and disposes such requirement for the purchase, installation, operation, training and maintenance of Peregrine software; and be it
FURTHER RESOLVED: That the Council hereby approves the execution of the Master Service Agreement with Peregrine Technologies, Inc., attached here to as Exhibit 1, for a two - year term and for a total not to exceed $220,000.
* * * * * * * * * * * * * *
The foregoing Resolution 2025- was adopted by the Tracy City Council on April 1, 2025 by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ABSTENTION: COUNCIL MEMBERS:

DAN ARRIOLA
Mayor of the City of Tracy, California
ATTEST:

NECY LOPEZ
Acting City Clerk and Clerk of the Council of the
City of Tracy, California
EXHIBITS:
(1) Master Services Agreement with Peregrine Technologies, Inc.

The fee schedule above includes support for up to 75 million annual LPR reads and a 30-day retention of LPR detections.

This agreement provides for an allowance of $5,000 in third -party API or data access fees . The Customer is responsible for any third-party API or data access fees in excess of $5,000.

For clarity, Peregrine will provide any other Profes sional Services and additional data integration services in accordance with Section 2.2 of the Terms and Conditions.

Docusign Envelope ID: 2FE0CEF5-F68D-4ED2-866C-C959FE6A1F55 Docusign Envelope ID: 8C930239-2B4A-4DC9-BDD3-A3B741B3274A Exhibit 1
February 18, 2025
2 Proprietary and Confidential
Peregrine services are provided subject to the terms set forth above on this Order Form together with the attached terms and conditions (the “ Terms and Conditions ,” and together with this Order Form, the “ Agreement”). Any capitalized term used in this Order Form but not defined herein shall have the meaning ascribed to it in the Terms and Conditions. By signing this Order From, Peregrine and Customer each agree to the terms and conditions set forth in this Agreement. In the event of any conflict between this Order Form and the Terms and Conditions, the terms of this Order Form shall govern to the extent of such conflict. This Order Form ma y be executed in counterparts (which may be delivered by electronic mail of .pdf files), each of which counterparts, when so executed and delivered, shall be deemed to be an original, and all of which counterparts, taken together, shall constitute one and the same instrument.