Union City City Council
April 12, 2022

January 2018
City Council/RSA Agenda 157 Tuesday, April 12, 2022
Local Assistance Procedures Manual EXHIBIT 10-C
Consultant Contract Reviewers Checklist
B. SOLICITATION DOCUMENTS AND ADVERTISEMENT

1. CONSULTANT SELECTION COMMITTEE AND CONFLICT OF INTEREST a. A consultant selection committee with a minimum of three members is appointed at the beginning of the consultant selection process. The committee reviews materials submitted by consultants, develops a shortlist of qualified consultants, and develops a final ranking of the most qualified proposals.
b. Exhibit 10-T should be completed by all panel members and anyone involved in the procurement process, and include signatures and dates.
c. Completed Exhibit 10-T includes all applicable boxes checked and the contract administrator's signature verifying no conflicts of interest.

2. PROCUREMENT SCHEDULE
Provide an estimated schedule for the procurement process. Establish a submittal deadline for responses to the RFP/RFQ that provides sufficient time for interested consultants to receive notice, prepare, and submit a proposal. Except in unusual circumstances, this deadline shall not be fewer than 14 calendar days from the date of issuance of the RFP/RFQ. A contract procurement schedule must be completed before advertising the contract and included it in the solicitation document, identifying key dates for consultant selection activities.

3. TYPE OF CONTRACT
Specify the anticipated type of contract listed in the solicitation document. Three contract types are typical for A&E consultant services for Federal aid highway projects. Contract type refers to the method in which the contract is structured to cover the work.
a. Project-specific contract: A contract between the contracting agency and consultant for the performance of services and a defined scope of work related to a specific project or projects b. Multi-purpose or Multi-phased contract: A project-specific contract where the defined scope of work is divided into phases that may be negotiated and executed individually as the project progresses.
c. On-call contract: A number of projects, under which task or work orders are issued on an asneeded basis, for an established contract period. An "on-call" typically used when a specialized service of indefinite delivery or indefinite quantity is needed for a number of different projects, such as construction engineering, design, environmental analysis, traffic studies, geotechnical studies, field surveying, etc. Further requirements for on-call contracts:

I. Specify a reasonable maximum length of contract period, including the number and period of any allowable contract extensions, which shall not exceed five years;

2. Specify a maximum total contract dollar amount that may be awarded under a contract;

3. Include a statement of work, requirements, specifications, or other description to define the general scope, complexity, and professional nature of the services; and

4. Indicate if multiple consultants are to be selected and multiple on-call or indefinite delivery/indefinite quantity (IDIQ) contracts will be awarded through a single solicitation for specific services, and if so, how task orders will be issued.

January 2018
City Council/RSA Agenda 158 Tuesday, April 12, 2022
Local Assistance Procedures Manual EXHIBIT 10-C
Consultant Contract Reviewers Checklist

4. METHOD OF PAYMENT
The anticipated method of payment must be specified in the original solicitation, the executed contract and any subsequent modification thereto. Methods of payment are based on the scope of services to be performed:
a. Actual Cost-Plus-Fixed Fee: is appropriate when the extent, scope, complexity, character, or duration of work cannot be precisely predicted. Fixed fees apply to the total direct and indirect costs.
b. Cost Per Unit of Work: is appropriate when the cost per unit of work can be determined with reasonable accuracy in advance and the extent or quantity of the work is indefinite c. Specific Rates of Compensation: should only be used when estimating the extent or the duration of work is not possible at the time of procurement, or estimating costs with any reasonable degree of accuracy.
d. Lump Sum: is appropriate only if the extent, scope, complexity, character, duration, and risk of the work have been sufficiently defined to permit fair compensation to be determined and evaluated by all parties during negotiations.

When the method of payment is other than lump sum, the contract shall specify a maximum amount payable which shall not be exceeded unless adjusted by a contract modification.

5. EVALUATION CRITERIA AND WEIGHTS (EXHIBIT 10-B)
The criteria and relative weights must be included in the RFP/RFQ, and the same criteria and relative weights must be used on the evaluation sheets. See Exhibit 10-B for example criteria. The evaluation criteria MUST have weights in order to properly evaluate the submittals. The criteria MUST be the same as what was listed in the solicitation document. Any changes not made through an addendum render the contract invalid. The combined total of non-technical criteria cannot exceed 10% of the evaluation criteria. Consultants should be initially ranked based on raw data and the final ranking based on the sum of the initial ranking. Please see example iii. Module 3: Evaluation and Selection of Consultant located at:
• http://vvww.dot.ca.gov/hq/LocalPrograms/AE/2016/M3-slides.pdfor • http://www.dot.ca.gov/hq/LocalPrograms/AE/2016/M3-2016-08-31.mp4

6. PROCUREMENT TYPE (RFP vs RFQ)
a. One step RFQ: For services (materials testing, construction inspection, etc.). b. One step RFP: For project specific work (bridge painting, roadway design, etc.). c. The Two-Step RFQ/RFP method may be used when the scope of work is complex or unusual.

This method also may be preferred by local agencies that are inexperienced about negotiations and procedures for establishing compensation. However, the Two-Step RFQ/RFP method is recommended for procurement of multiple on-call contracts, or pre-qualified list, through a single solicitation. This method requires substantially more work and time than the other two methods described above.
d. Length of contract: all contracts must have a duration specified. On-call contracts should not exceed five years (three year contract with options to twice extend an additional year). The type and length of the contract should be listed in the solicitation.

7. DBE UTILIZATION GOAL SETTING (FEDERAL FUNDED ONLY)
DBE goals are required for all Federal-aid contracts including on-call contracts.

January 2018
City Council/RSA Agenda 159 Tuesday, April 12, 2022
Local Assistance Procedures Manual EXHIBIT 10-C
Consultant Contract Reviewers Checklist
a. Exhibit 9-D (DBE Contract Goal Methodology) must be submitted to Caltrans. An agency must have documentation as to how the goal was calculated. Use your independent cost estimate and follow the DBE procedures located at:
http://www.dot.ca.gov/hq/LocalPrograms/lam/forms/chapter9/9d.pdf b. Exhibit 10-I (NOTICE TO PROPOSERS DBE INFORMATION) must be included in the solicitation.
c. Proposals without information regarding, or not meeting, the required DBE utilization goal or without a Good Faith Effort documentation are considered nonresponsive and shall be rejected. d. Zero (no subcontracting opportunities) DBE goals must be verified by the DLAE prior to contract execution. No goal means DBE was not considered in solicitation. e. Exhibit 15-H (DBE Information - Good Faith Efforts) must be approved by LPA.

8. RECORDS OF PUBLICATION FOR RFP OR RFQ
a. List the platform that was used to advertise the RFP/RFQ: A public forum must be used that gives both in-state and out-of-state consultants a fair opportunity to be considered for award.

Acceptable advertisements include, although not limited to: public clearinghouse, Planetbids, Public Purchase, and local agency's website.
b. Advertising must be at least 14 calendar days. Caltrans suggests 21 days minimum.

9. RECORDS OF RESPONSE TO SOLICITATION
a. A minimum of three proposals must be received and evaluated. If only two proposals are received, a justification must be documented to proceed with the procurement; if only one proposal is received, a signed Public Interest Finding (PIF) approved by the DLAE is required. In either case, the re-advertisement of the RFP should be considered as an option. b. The Contract Administrator must evaluate each SOQ/SOP and verify each proposal contains all of the forms and other information required by the solicitation. c. All proposals received should be documented (e.g. log sheet, copies of time-stamped envelopes, etc.), and copies must be kept in agency's files.

C. EVALUATION AND SELECTION

1. DOCUMENTATION OF CONSULTANT SELECTION
a. Documentation of when each proposal was received must be maintained in the project files.

Copies of date stamped envelope covers or box tops are recommended. All supporting documentation must be retained in the project files for the required retention period in the event an audit or review is performed.
b. Evaluation criteria must be the same as in solicitation from which a qualifications based selection was conducted.
c. Original score sheets complete with signatures must be in the file. Spreadsheets alone are not an acceptable method of showing evaluation. Score sheets must be signed and dated by all evaluators.
d. Exhibits 10-01 must be included in the technical proposal or the statement of qualification package provided to the local agency by each (prime consultant) proposer and required to be submitted to the DLAE for federal reimbursement (Federal funded projects only). For calculating goals, refer to:
http://www.dot.ca.gov/hq/LocalPrograms/AE/2016/M2-slides.pdf or http://www.dot.ca.gov/hq/LocalPrograms/AE/2016/M2-2016-09-02.mp4Module 2.

January 2018
City Council/RSA Agenda 160 Tuesday, April 12, 2022
Local Assistance Procedures Manual EXHIBIT 10-C
Consultant Contract Reviewers Checklist
For contracts with no DBE contract goal, Exhibit 10-01 is not necessary. e. Exhibit 10-U must be completed by all consultants in management support role positions and submitted to FHWA for approval through Caltrans HQ prior to contract execution.

2. DEVELOP TOP RANKED CONSULTANTS AND NOTIFY ALL INTERVIEWEES a. Three or more highest ranked consultants (short listed) will be interviewed and a final ranking of the highest ranked consultants must be developed. All consultants that submitted technical proposals must be informed about the final ranking of consultants. Notes should be kept to explain why a particular consultant was not selected if requested. b. Interviews are to be structured and conducted in a formal manner. Each consultant to be interviewed is sent an invitation to the interview, with an agenda and timeline. A copy of the draft proposed contract, defining the standard contract language/boilerplate is also provided.

Reference checks shall be completed and other information gathered before the interviews are conducted. All oral interviews must be evaluated including signatures and dates.

3. COST PROPOSAL
a. All cost proposals need to be in the same format as Exhibit 10-H or equivalent and contain all of the cost components including direct, indirect, other direct, and fee.

See http://www.dot.ca.gov/hq/LocalPrograms/lam/forms/chapter10/10h.pdffor sample form for each method of payment.
b. The method of payment must be specified in cost proposal. Four methods are permitted depending on the scope of services to be performed: Actual Cost-Plus-Fixed Fee; Cost Per Unit of Work; Specific Rates of Compensation; Lump Sum.
c. Cost proposal must identify classifications to be billed. Labor costs must be broken down to direct and indirect.
cI. ICR must be the most currently ended fiscal year (within 18 months of ICR submittal). Please refer to A&I guidance on ICR annual fiscal year determinations. e. All key personnel must be identified in cost proposal. f. Cost proposal must include other direct costs and supporting calculations (EXHIBIT 10-H) g. The determination of the amount of the fixed fee shall take into account the size, complexity, duration, and degree of risk involved in the work. The fixed fee is not adjustable during the life of the contract. Fixed fees in excess of 15% of the total direct labor and indirect costs of the contract may be justified only when exceptional circumstances exist (23 CFR 172.11.b (3) (iii)).

4. AUDIT AND REVIEW DOCUMENTS
For contracts equal to or greater than $150,000, an annual Exhibit 10-K, Consultant Annual Certification of Indirect Cost and Financial Management System of all A&E firms on the contract must be submitted to A&I for review (All prime and sub-consultants) for both federal and state funded contracts. The firm will be listed on A&I's website, if the firm's annual indirect cost rate has been accepted by A&I and shown with the identification number and the applicable fiscal year. a. Proposed indirect cost rate on all contract proposals are subject to review by A&I prior to execution.
b. The review may result in acceptance, adjustment, or denial of proposed ICR. The final cost proposal must be revised if applicable to reflect the adjusted or denied ICR. c. Any findings by A&I need to be resolved prior to contract execution or the contract could be considered ineligible for state and/or federal funding.

January 2018
City Council/RSA Agenda 161 Tuesday, April 12, 2022
Local Assistance Procedures Manual EXHIBIT 10-C
Consultant Contract Reviewers Checklist

5. RECORD OF COST/PROFIT NEGOTIATIONS
a. Selected/best-qualified consultant's cost elements must be analyzed including necessity for and reasonableness (verification of cost or price information not comparing cost or price data). b. At the completion of successful cost negotiations, all remaining concealed "unopened" cost proposals shall be returned to consultants or dispose of in accordance with written policies and procedures approved by FHWA (23 CFR 172.5(c)).
c. Cost analysis, i.e., verifying the cost in the cost proposal from the top-ranked consultant and evaluating the specific elements such as direct salary or wage rates, fixed fee, other direct costs, indirect costs and profits (23 CFR Part 172.11(b)). Cost Analysis is the analysis of the separate cost elements of a service to verify proposed costs are reasonable for the work to be performed and in compliant with Federal cost principles. Cost Analysis is used to verify direct cost in consultant's cost proposal to actual costs of labor, products and services and to determine if the costs are reasonable. Price Analysis (comparisons with previous prices) may be included, provided a cost analysis was performed on the previous prices, reasonableness was determined and the previous contracted work is substantially the same.
d. In accordance with federal guidelines, project record of negotiations of cost/profit shall be kept for at least three (3) years after payment of the final federal or state voucher.

6. MANDATORY FEDERAL FISCAL PROVISIONS (FEDERAL-FUNDED ONLY) a. The 14 articles list in Exhibit 10-R as mandatory and verbatim must be in the contract. b. List provisions that are not verbatim.
c. Exhibits 10-02 must be completed at the conclusion of cost negotiations, incorporated into the final agreement and a copy sent to the DLAE. Refer to:
https://player.vimeo.com/video/127551624or
http://www.dot.ca.gov/hq/LocalPrograms/AE/2016/M2-2016-09-02.mp4 Module 2 for calculating goals.

7. SOLE-SOURCE CONTRACT
Sole-source also known as noncompetitive is defined as the method of procurement of engineering and design related services when it is not feasible to award the contract using competitive negotiation. Sole-source contracts should be used only in very limited circumstances. Document the justification for sole-source in detail. For sole-source contracts, the DLAE must approve and sign the Public Interest Finding (PIF) EXHIBIT 12-F. If the PIF is not approved, the contract is considered invalid and not federally reimbursable. All solesource PIF' s must have an independent cost estimate attached.

8. EVALUATION FACTOR
For A&E contracts, price cannot be used as an evaluation factor (unless using the small purchase procedure).

Price should not be considered until negotiations. Only the consultant chosen for negotiations should have their cost proposal opened (all other proposals should be returned to sender unopened or disposed of according to agency policy after contract execution).

9. POLICY AND PROCEDURES
a. Date adopted Caltrans procedures - Consultant Procurement Manual (CPM) or LAPM Ch. 10.

According to federal regulations, an agency must have an approved procedure or adopt Caltrans. b. If not Caltrans procedures, has local agency's procedure been approved by Caltrans? Local agency can use their own procedures but these must be approved by Caltrans to be considered valid. All agencies must follow LAPM Ch. 10 for consultant contracts in addition to any policies and

January 2018
City Council/RSA Agenda 162 Tuesday, April 12, 2022
Local Assistance Procedures Manual EXHIBIT 10-C
Consultant Contract Reviewers Checklist
procedures they have in place.

10. METHOD OF PAYMENT IN CONTRACT
The method of payment listed in the executed contract should be the same as the solicitation and cost proposal.

11. CONTRACT AWARDED SHOULD MATCH SOLICITATION
The type of contract (Specific, Multi-phased, or On-call) listed in the executed contract must be the same as the solicitation and cost proposal.

D. FOR CONSULTANT CONTRACT AMENDMENT ONLY

1. AMENDMENT NUMBER
Every contract amendment must have an amendment number and that amendment number must be specified in the EXHIBIT 10-C.

2. SPECIFY MAXIMUM LENGTH OF CONTRACT AMENDMENT
Specify a reasonable maximum length of consultant contract amendment period by indicating start date of the amendment and end date of the total new-contract period. For on-call contract, the maximum length of consultant contract amendment period shall not exceed five years in total.

All contract amendments must be fully executed before the ending date of the contract. Failure to amend a contract prior to the ending date will make the subsequent costs ineligible for federal and state reimbursement.

3. TYPE OF ORIGINAL CONTRACT
Specify the original type of contract awarded in a contract amendment. Three contract types which are typical for A&E consultant services for Federal aid highway projects are project-specific, multi-phased, and on-call.

A contract type specified in the contract amendment shall match with the original contract.

4. WAS SMALL PURCHASE USED FOR ORIGINAL PROCUREMENT?
The full amount of any contract modification or amendment that would cause the total contract amount to exceed the federal simplified acquisition threshold (currently established at $150,000) would be ineligible for federal funding. Also, FHWA reserves the right to withdraw all federal-aid funding from a contract if it is modified or amended above the applicable established simplified acquisition threshold. All small purchase contracts shall have a start and end date.

5. WHAT IS A&PS ICR DECISION?
For amended contracts equal to or greater than $150,000, an annual Exhibit 10-K, Consultant Annual Certification of Indirect Cost and Financial Management System of all A&E firms on the contract must be submitted to A&I for review (All prime and sub-consultants) for both federal and state funded contracts. Proposed indirect cost rate on all contract proposals are subject to review by A&I prior to contract execution. The review may result in acceptance, adjustment, or denial of proposed ICR. The final cost proposal must be revised if applicable to reflect the adjusted or denied ICR.

January 2018
City Council/RSA Agenda 163 Tuesday, April 12, 2022
Local Assistance Procedures Manual EXHIBIT 10-C
Consultant Contract Reviewers Checklist

6. TOTAL AMENDED CONTRACT AMOUNT
Specify a maximum total amount of amended contract that may be awarded under the total contract. A&E Consultant Audit and Review Process of LAPM Chapter 10 shall apply to the entire contract and must be completed prior to execution of the contract amendment.

The full amount of any contract modification or amendment that would cause the total contract amount to exceed the federal simplified acquisition threshold (currently established at $150,000) would be ineligible for federal funding.

7. DESCRIPTION OF NEED FOR AMENDMENT
Describe need for amendment of the existing project schedule and objectives: How was the need for an amendment justified? How has the original project been handled and why is it required to be modified? (e.g.:

Extra time, added work, or increased costs). Only work within the original advertised scope of services shall be added by amendment to the contract. The addition of work outside the original advertised scope will make that work ineligible for federal or state reimbursement.

8. HAS THE SCOPE OF WORK CHANGED?
Scope of work and preparation of amendments must be clearly stated in EXHIBIT 10-C and the amendment contract to ensure that any changes to the scope are within the constraints of the original RFP/RFQ.

Only work included within the original advertised scope of services and evaluation criteria of the solicitation from which a consultant was selected based on qualifications to perform may be incorporated into a contract. Necessary or desired services which are outside of the advertised scope from which the qualifications based selection was conducted should be procured under a new advertisement, accomplished with in-house contracting agency staff, or performed under an existing on-call contract which allows for the desired services, necessary qualifications, costs, and schedule.

9. DOES THE REVISED SCOPE OF WORK INCLUDE A CONSULTANT IN MANAGEMENT SUPPORT ROLE?
Indicate if the contract amendment includes a consultant in a management role. Local agency shall fill out EXHIBIT 10-U if they need for a consultant(s) in management support role.

10. WAS EXHIBIT 10-U SUBMITTED IF THERE IS A CONSULTANT IN MANAGEMENT SUPPORT ROLE?
A completed Exhibit 10-U shall be submitted to FHWA for approval prior to execution of the contract amendment for which federal funds are being sought. Local agencies must submit an approved Exhibit 10- U prior to seeking federal reimbursement.

January 2018
City Council/RSA Agenda 164 Tuesday, April 12, 2022
City Council/RSA Agenda 165 Tuesday, April 12, 2022
RESOLUTION NO.

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UNION CITY

AUTHORIZING THE CITY MANAGER TO EXECUTE A CONTRACTUAL

SERVICES AGREEMENT WITH RHYTHM ENGINEERING, LLC, FOR

INNOVATIVE DEPLOYMENTS TO ENHANCE ARTERIALS (IDEA) PASSIVE PEDESTRIAN DETECTION PROJECT, CITY PROJECT NO. 17-27A,
IN THE AMOUNT OF $188,476, AND APPROPRIATING $47,119

FROM THE TRAFFIC SIGNALIZATION FUND
WHEREAS, at its regular meeting on September 25, 2018, the City Council of the City of Union City passed Resolution No. 5391-18 which approved project funding agreements with the Metropolitan Transportation Commission’s (MTC) Innovative Deployments to Enhance Arterials Grant Program (IDEA Grant); and
WHEREAS, the MTC’s IDEA Grant objective to deploy advanced technologies to enhance mobility, sustainability, and safety along major arterials was incorporated into City Project No. 17-27 Traffic Signal Control Upgrades, primarily through implementation of Automated Traffic Signal Performance Measures (ATSPM), Adaptive Signal Control Technology (ASCT) and a new Central Traffic Signal Control System; and WHEREAS, the City Council passed Resolution No. 5636-20 at its regular meeting on August 11, 2020, commencing construction of some of the components of City Project No. 17-27; and
WHEREAS, the remaining components of City Project No. 17-27 to be implemented consist of a passive pedestrian detection system (IDEA Passive Pedestrian Detection Project) that automatically extends walk times across intersection(s) as needed; and WHEREAS, the IDEA Passive Pedestrian Detection Project will automate pedestrian and bicycle detection via sensor technology in cameras capable of classifying objects and pedestrians in real time; and
WHEREAS, the system also improves the level of service by optimizing traffic signal operations for automobiles and transit by automatically extending walk phases to ensure pedestrians are cleared of the intersection, which will improve safety for both pedestrians and bicyclists; and
WHEREAS, passive pedestrian detection technology will be deployed at four (4) intersections in Union City selected by the City and MTC based on heavy crosswalk usage near schools and shopping centers, including: Alvarado Boulevard and Dyer Street; Alvarado-Niles Road and Hop Ranch Road; Alvarado-Niles Road and Royal Ann Drive; and Decoto Road and Meyers Drive; and
WHEREAS, the Engineering Division has, upon due notice, received four (4) proposals for the IDEA Passive Pedestrian Detection Project; and
City Council/RSA Agenda 166 Tuesday, April 12, 2022
WHEREAS, the proposal from Rhythm Engineering, LLC, of Lenexa, Kansas, was determined to be the most qualified to meet the project needs at a total cost of $188,476; and WHEREAS, funding through the IDEA Grant will provide up to $141,357 (75%) towards applicable project construction costs; and
WHEREAS, the City’s source of matching funds of $47,119 (25%) will be provided from the Traffic Signalization Fund (Fund 2610), for which a supplemental appropriation is required.

NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Union City hereby authorizes the City Manager to execute the Contractual Services Agreement with Rhythm Engineering, Inc., in the amount of $188,476, for the Innovative Deployments to Enhance Arterials (IDEA) Passive Pedestrian Detection Project, City Project No. 17-27A; and BE IT FURTHER RESOLVED that the City Council hereby approves an appropriation of $47,119 from the unassigned balance of the Traffic Signalization Fund to Account Number 2610-3199-91727-54111.

PASSED, APPROVED, AND ADOPTED by the City Council of the City of Union City at a regular meeting held on the 12th day of April 2022, by the following vote:

City Council/RSA Agenda 167 Tuesday, April 12, 2022
Agenda Item
DATE: 4/12/2022
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: MARK EVANOFF, DEPUTY CITY MANAGER
SUBJECT: ADOPT A RESOLUTION AUTHORIZING THE FOURTHAMENDMENT TO

THE CONSULTING SERVICES AGREEMENT BETWEEN THE CITYOF

UNION CITYAND HDL COMPANIES FOR CANNABIS APPLICATION

REVIEW AND CONSULTATION
Staff recommends that the City Council adopt a resolution authorizing the Fourth Amendment to the Consulting Services Agreement between the City of Union City and HdL Companies for cannabis application review and consultation.

STRATEGIC PLAN ALIGNMENT
GoalA: Fiscal Stability and Sustainability
Strategy 5. Implement the City's program to attain the anticipated revenue in new revenue with a commitment to adapting where necessary in light of evolving Statewide trends.

BACKGROUND
The City Council adopted Section 5.44 of the Municipal Code in November 2017 that established the regulatory framework for commercial cannabis operators within the City. The City Council adopted a resolution that set the number of permits that could be awarded for each type of cannabis business specifically:

Three cultivation permits
Three manufacturing permits
Three distribution permits
Three retail permits
Three testing permits
HdL Companies (HdL) has served as the City of Union City's cannabis consultant since the inception of the City Council/RSA Agenda 168 Tuesday, April 12, 2022
program. HdL provides ongoing advice related to cannabis. HdL works with staff to prepare cannabis application packages, provides screening services for allcannabis applications to ensure completeness, scores applications, provides a list of all qualified cannabis applications to City staff, and works with staff to prepare interview questions and to conduct interviews of all qualified candidates.

DISCUSSION
Since the establishment of a cannabis program, the City Council has authorized three rounds of cannabis applications and awarded three retail permits, one cultivation permit, one distribution permit, and one manufacturing permit.

Flor East Bay, LLC received a retail permit February 23, 2021. Minimal site work was needed to prepare the site for retail sales and Flor East Bay, LLC opened for business in late June 2021. As of December 31, 2021, Union City received $186,553 in voter-approved cannabis taxes from Flor East Bay, LLC.

Jiva Life, LLC, received a retail permit to open a storefront at 30545 and 30547 Union City Boulevard on February 11, 2019 after completing a process to change locations. Jiva Life, LLC has completed its site work and tenant improvements. Jiva Life, LLC will be requesting an Occupancy Permit and anticipates opening for business in May 2022.

Eden Campus Holdings, LLC received cannabis permits for cultivation, manufacturing, distribution, and retail located at 30540 Union City Boulevard, November 27, 2018. The Eden Campus Holding, LLC location required extensive site work to provide access to the business. It took more than two years for Eden Campus Holdings. LLC to submit an acceptable site plan and tenant improvements.

Eden Campus Holdings, LLC representatives contacted City staff in May 2021 inquiring about the City Council process to authorize transferring a cannabis retail permit to another location. Staff provided the information, but Eden has not identified an alternative location, nor submitted a request to change locations.

Building Division staff notified Eden Campus Holdings, LLC over seven months ago on August 9, 2021 that building permits were available for pickup. Union City Municipal Code Section 5.44.030(F)(2) provides that a commercial cannabis permit that has been abandoned for a period of six months shall automatically expire. The four permits held by Eden Campus Holdings: retail, cultivation, manufacturing, and distribution have expired under the terms of the Municipal Code.

Eden Campus Holdings, LLC also notified City staff March 9, 2022 and stated, "The project is not viable at its current location, under current conditions." Staff has notified Eden in writing that their permits have expired.

Staff will be requesting the City Councilat a future meeting to reopen the cannabis application process and invite cannabis providers to submit applications for the one remaining cannabis retail permit, the three cultivation permits, the three manufacturing permits, the three distribution permits, and the three testing permits.

FISCAL IMPACT
There is not fiscal impact to the General Fund.

The application fee for cannabis permits will pay for the scope of work defined in the Fourth Amendment to Consulting Services Agreement between the City of Union city and HdL Companies.

City Council/RSA Agenda 169 Tuesday, April 12, 2022

RECOMMENDATION
Staff recommends that the City Counciladopt a resolution authorizing the Fourth Amendment to the Consulting Services Agreement between the City of Union City and HdL Companies for cannabis application review and consultation.

Prepared by:

Mark Evanoff, Deputy City Manager
Submitted by:

Mark Evanoff, Deputy City Manager
ATTACHMENTS:

Description Type
Resolution -Authorizing Fourth Amendment to the HdLCompanies Consulting Services Agreement
Resolution
Exhibit A: Fourth Amendment to the HdLCompanies Consulting Services Agreement
Exhibit
Exhibit B: Scope of Work HdLCompanies Consulting Services Agreement
Exhibit
Exhibit C: Cost of Services HdLCompanies Exhibit
City Council/RSA Agenda 170 Tuesday, April 12, 2022
RESOLUTION NO. 2021-XXXX

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UNION CITY

AUTHORIZING THE FOURTH AMENDMENT TO THE CONSULTING SERVICES

AGREEMENT BETWEEN THE CITY OF UNION CITY AND HDL COMPANIES FOR

CANNABIS APPLICATION REVIEW AND CONSULTATION
WHEREAS, the City of Union City (“City”) and HdL Companies (“Consultant”) (together referred to as “Parties”) executed a Consulting Services Agreement (“the Agreement”) June 27, 2017 to provide consulting services related to activating a cannabis permit program in Union City in the amount of Forty-One Thousand Dollars ($41,000); and WHEREAS, the Parties executed a First Amendment (the “First Amendment”) to the Agreement dated August 27, 2018, to add additional services and extend the term to June 30, 2019, and increase Compensation by a maximum of Thirty Thousand Dollars ($30,000); and WHEREAS, the Parties executed a Second Amendment (the “Second Amendment”) to the Agreement effective July 1, 2019, to add additional services and extend the term to June 30, 2020; and
WHEREAS, the Parties executed a Third Amendment (the “Third Amendment”) to the Agreement effective July 1, 2020 to extend the term to June 30, 2021; and WHEREAS, the City Council previously adopted Resolution No. 5795-21 authorizing the City Manager to execute a Fourth Amendment (the “Fourth Amendment”) to the Agreement to increase compensation by a maximum of Twenty-Two Thousand Five Hundred Dollars ($22,500) and extend the term to June 30, 2023; and
WHEREAS, the Fourth Amendment was never executed; and
WHEREAS, the Parties desire to further amend the Agreement and execute a new Fourth Amendment; and
WHEREAS, pursuant to Section 8.3 of the Agreement, the Parties may amend the Agreement only writing signed by all Parties.

NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Union City authorizes the City Manager, or designee, to execute the Fourth Amendment to the Consulting Services Agreement between the City of Union City and HdL Companies attached hereto as Exhibit A, B, and C, or as may be modified in a form approved by the City Attorney, to increase compensation by a maximum of Twenty-Two Thousand Five Hundred Dollars ($22,500), for a total not to exceed amount of Ninety-Three Thousand Five Hundred Dollars ($93,500).

City Council/RSA Agenda 171 Tuesday, April 12, 2022
PASSED AND ADOPTED, by the City Council of the City of Union City at a regular meetingheld this 12
th day of April 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED:
_________________________

CAROL DUTRA-VERNACI
Mayor
ATTESTED APPROVED AS TO FORM:
____________________ ___________________________
ANNA M. BROWN KRISTOPHER J. KOKOTAYLO
City Clerk City Attorney
5085426.1
City Council/RSA Agenda 172 Tuesday, April 12, 2022
[SIGNATURE PAGE FOLLOWS]

FOURTH AMENDMENT TO THE

CONSULTING SERVICES AGREEMENT

BETWEEN THE CITY OF UNION CITY AND

HDL COMPANIES
This Fourth Amendment to the Consulting Services Agreement is entered into effective April 12, 2022, between the City of Union City, a municipal corporation, (“City”) and HdL Companies, a California corporation (“Consultant”) (together sometimes referred to as “Parties”).

RECITALS
WHEREAS, the Parties executed a Consulting Services Agreement (the “Agreement”), effective June 27, 2017, to provide consulting services related to medical cannabis program implementation; and
WHEREAS, the Parties executed a First Amendment (the “First Amendment”) to the Agreement dated August 27, 2018, to add additional services and extend the term to June 30, 2019, and increase Compensation by a maximum of Thirty Thousand dollars ($30,000); and WHEREAS, the Parties executed a Second Amendment (the “Second Amendment”) to the Agreement effective July 1, 2019, to add additional services and extend the term to June 30, 2020; and
WHEREAS, the Parties executed a Third Amendment (the “Third Amendment”) to the Agreement effective July 1, 2020, to add additional services and extend the term to June 30, 2021; and
WHEREAS, the Parties desire to further amend the Agreement to provide for additional compensation and extend the term to June 30, 2023; and
WHEREAS, pursuant to Section 8.3 of the Agreement, the Parties may amend the Agreement only by writing signed by all the Parties.

NOW, THEREFORE, the Parties hereby agree as follows:

1. Section 1.1, Term of Services, of the Agreement is amended to extend the term of the Agreement through June 30, 2023.

2. Section 2, Compensation, of the Agreement is amended to increase the maximum compensation the City agrees to pay Consultant by Twenty-Two Thousand Five Hundred Dollars ($22,500), to a sum not to exceed Ninety-Three Thousand Five Hundred Dollars ($93,500). City shall pay Consultant for the work in accordance with the Exhibit A, attached hereto and incorporated herein by reference.

City Council/RSA Agenda 173 Tuesday, April 12, 2022

3. With the exception of the foregoing, all other terms and conditions in the Agreement as amended by the First Amendment, Second Amendment, and Third Amendment shall remain in force and effect.

CITY OF UNION CITY HdL COMPANIES
________________________ ________________________
Joan Malloy Andrew Nickerson
City Manager President
Attest:
_______________________
Anna Brown
City Clerk
Approved as to Form:
______________________
Kristopher J. Kokotaylo
City Attorney
3788551.2
City Council/RSA Agenda 174 Tuesday, April 12, 2022
120 S. State College Blvd. Suite 200 | Brea, CA 92821 | 714.879.5000 | hdlcompanies.com

EXHIBIT A

SCOPE OF SERVICES
Objective 1: Application Reviews and Interviews
The City shall conduct an initial screening of all applications for completeness based upon an objective checklist of required documentation. This initial screening shall allow for some limited discretion in determining whether submitted documents are substantively complete but shall not otherwise consider the quality of the submissions.

Applications deemed incomplete will be disqualified and those applicants will not be allowed to submit any supplemental information.

Applications which have been deemed complete will move forward for a full review by HdL, including scoring and merit-based ranking. Applicants must provide detailed information on how they plan to meet the required criteria. An applicant’s point score shall be based on their demonstrated ability to meet or exceed minimum requirements in each category.

Reviews shall include narrative comments that identify both strengths and weaknesses of each application as well as any deficiencies or areas of concern. Reviews shall be adequately detailed to inform the subsequent interview process but shall not contain any recommendations for approval or denial, other than a numerical score.

Proposed actions described in the applications shall be considered binding conditions of any resulting permit. Failure to meet or comply with any such requirements after a permit has been granted may subject the applicant to penalties and/or revocation proceedings.

HdL will design and conduct an interview panel for all applicants that receive passing scores. The interview panel shall consist of designated City staff, assisted by a subjectmatter expert from HdL serving as facilitator. Interviews shall be one hour long, with a half hour between to allow for reaction, discussion and note taking by the panel.

Interviews shall be scheduled for successive days, where possible, with 5 interviews per day.

HdL shall compile all scores from both the application review process and the applicant interviews and shall prepare a final report for the City, which shall inform the final determination of which applicants shall be granted permits. The report shall include comments and information derived from reviews and interviews but shall not contain any recommendations for approval or denial, other than a numerical score.

City Council/RSA Agenda 175 Tuesday, April 12, 2022
Objective 2: Background Checks
HdL is qualified to provide background checks of all owners, principals, managers and employees of cannabis businesses. Our background checks supplement the Staterequired Live Scan fingerprint check, which will only disclose Department of Justice (DOJ) records regarding arrests or convictions. California’s licensing agencies are only allowed to consider convictions for certain “red line” offenses such as serious or violent felonies, or certain felonies involving fraud, minors or drug trafficking, as automatic disqualifiers before granting or denying a license.

Our supplemental background checks expand upon the Live Scan information to identify other factors that local governments may wish to consider before granting discretionary business licenses or permits. These considerations may include other felony offenses, misdemeanor convictions, arrest records, civil judgements, restraining orders, the terrorist screening database, the national sex offender registry, delinquent child support payments, bankruptcies, employment and credit records, and more. Our search includes up to 5 variations on the subject’s name and will alert if additional aliases are found which might warrant further investigation.

HdL offers separate rates for owners, principals or managers of cannabis businesses and for regular employees or line staff. We also offer a lower rate for annual renewals after the initial background check has been completed. Our rates include an HdLdesigned employee identification badge with the city or county logo which meets all State regulatory requirements.

HdL provides an online portal for applicants to submit their application and authorization for background checks and all necessary documentation. Applicants provide their payment directly to HdL through the portal, so there is no cost to the City.

Objective 3: Provide Subject Matter Expertise & Technical Support HdL shall provide up to 30 hours of general consulting and subject matter expertise to be utilized on an as-needed basis at the City’s request. Such assistance may include remote attendance and presentation at City Council meetings, monitoring of changes to State laws and regulations, participation in conference calls, responding to staff inquires via phone and email, reviewing staff reports to the City Council, assisting with responses to inquiries from the public, or other issues yet to be determined as requested by the City.

Any travel associated with meeting attendance shall incur an additional $200 charge.

City Council/RSA Agenda 176 Tuesday, April 12, 2022
120 S. State College Blvd. Suite 200 | Brea, CA 92821 | 714.879.5000 | hdlcompanies.com

EXHIBIT B

COST SCHEDULE
The proposed services are broken down into specific line items in the cost table below.

The costs in the table below do not include review of any supplemental materials provided by the applicant to address deficiencies. Any costs associated with such additional services would be billed at HdL’s hourly rate. Once under contract, prices shall be honored for the first full year, with successive years subject to an annual increase based upon the Consumer Price Index for the Los Angeles-Long Beach-Anaheim region.

Scope of Service Objectives Estimated Cost
Objective 1: Application reviews and interviews $3,000
per applicant
Objective 2: Supplemental background checks
Cost paid directly to HdL by the applicant
See Below.

No cost to City
Objective 3: Technical assistance and subject matter expertise Up to 30 hours @ $250/hr
$7,500
TOTAL COST PER APPLICANT1 $3,000
HdL provides an online portal for applicants to submit their application and authorization for background checks and all necessary documentation. Applicants provide their payment directly to HdL through the portal, so there is no cost to the City.

Prices valid as of the date of this proposal and subject to change without notice.

Background Checks Owner, principal
or manager
Employee or
line staff
Initial background check $300 $100
Annual renewal $100 $75
Reissue lost or stolen badge $10 $10
City Council/RSA Agenda 177 Tuesday, April 12, 2022
Agenda Item
DATE: 4/12/2022
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: MARILOU AYUPAN, PUBLIC WORKS DIRECTOR
SUBJECT: ADOPT A RESOLUTION ACCEPTING WORK FOR THE HIGHWAY SAFETY IMPROVEMENT PROGRAM (HSIP) CYCLE 8 TRAFFIC SIGNAL IMPROVEMENTS PROJECT, CITY PROJECT NO. 17-18
Staff recommends that the City Council adopt a resolution accepting the Highway Safety Improvement Program (HSIP) Cycle 8 Traffic Signal Improvements Project, City Project No. 17-18, completed by Brown & Fesler Electric, Inc., in the final project amount of $705,784.

STRATEGIC PLAN ALIGNMENT
This is an efficiency and safety improvement project and is in alignment with the following:

Goal D, Strategy 2: Environmental Sustainability and Infrastructure – Implement the City’s capital improvement plan.

BACKGROUND
On September 8, 2020, at its regular meeting, City Council awarded a contract, in the amount of $625,627, to Brown & Fesler Electric, Inc., of Livermore, California, for the HSIP Cycle 8 Traffic Signal Improvements Project. HSIP is a federal-aid program to help fund safety improvements. The contractor has supplied the City with all required bonding as specified in the contract and has since completed the project in accordance with project plans and specifications.

DISCUSSION
The HSIP Cycle 8 Traffic Signal Improvements Project upgraded existing signalized intersections with the installation of new poles/mast arms, new signal conduits and the elimination of center-median signal poles at the two intersections of Alvarado-Niles Road/Mann Avenue/Union Square and Alvarado Boulevard/Galaxy Drive.

City Council/RSA Agenda 178 Tuesday, April 12, 2022
The project was completed in March 2022 and all final project punch-list items have been resolved with the contractor. The final construction contract cost for the project work is $690,784, which is $65,157 (10.4%) above the original contract amount due to a total of four contract change orders: two change orders involved replacement of wheelchair ramps and relocation of a pedestrian pushbutton for ADA compliance; another change order involved a change in materials to install luminaires and traffic lights consistent with other city intersections; and, finally, the last change order involved the addition of yellow reflective borders on traffic signal heads for improved visibility.

FISCAL IMPACT
Funding for the construction phase of this project has been programmed from a combination of funding from the Federal Highway Safety Improvement Program (HSIP) (Account No. 4100-3199-91718-54111), in the amount of $510,400, and local matching funds from the ACTIA Streets & Roads Fund (Account No. 2542- 3199-91718-54111), in the amount of $230,000.

Project construction-related costs to date are as follows:

Construction Contract Amount $ 625,627.00
Change Orders $ 65,157.00
Estimated Project
Management/Inspection/Administration (City
Staff, Material Testing, etc.)
$ 15,000.00
Total Estimated Construction Phase Cost $ 705,784.00
There are sufficient funds in these sources to fund the remaining project construction costs. There is no impact to the General Fund.

RECOMMENDATION
Staff recommends that the City Council adopt the attached resolution accepting the HSIP Cycle 8 Traffic Signal Improvements Project, City Project No. 17-18, completed by Brown & Fesler Electric, Inc., of Livermore, California, in the final project amount of $705,784.

Prepared by:

Murray Chang, Civil Engineer III
Submitted by:

Marilou Ayupan, Public Works Director
ATTACHMENTS:

Description Type
Attachment 1 - HSIP Cycle 8 Notice of Completion and Acceptance Attachment Resolution Resolution
Exhibit A - Certificate of Completion Exhibit
City Council/RSA Agenda 179 Tuesday, April 12, 2022
[Rev. 02/23/09]
(THIS SPACE FOR RECORDER’S USE ONLY)

NOTICE OF COMPLETION

AND NOTICE OF ACCEPTANCE
General Contract or Assessment Proceedings
TITLE: HSIP CYCLE 8 TRAFFIC SIGNAL IMPROVEMENTS,
FEDERAL PROJECT NO. HSIPL-5354(040), CITY PROJECT NO. 17-18 NOTICE IS HEREBY GIVEN that I, MARILOU AYUPAN, as the Public Works Director of the City of Union City, County of Alameda, California, on the 12th day of April, 2022, did file with the Department of Public Works of said City, the Certificate of Completion of the following described work, the contract for which was heretofore awarded to Brown & Fesler Electric, Inc. 2070 Research Drive, Livermore, CA 94577 and entered into on September 8, 2020 , in accordance with the specifications for said work filed with said Department of Public Works and adopted by the Director of Public Works of said City.

That said work and improvements consist of traffic signal improvements/upgrades and associated improvements at two (2) existing signalized intersections located at Alvarado-Niles Rd/Mann Ave. and Alvarado Blvd./Galaxy Wy.
were actually accepted by the Director of Public Works of the City of Union City on the 12th day of April, 2022, and that the name of the surety on the Contractor's bond for labor and materials on said contract is the Gray Insurance Company.

That the following work has been completed: traffic signal improvements at two (2) intersections located in Union City.

Dated: , 2022. ___________________________________
MARILOU AYUPAN, P.E.

PUBLIC WORKS DIRECTOR

CITY OF UNION CITY

PLEASE COMPLETE THIS INFORMAITON
RECORDING REQUESTED BY:

The City of Union City
And is Exempt from Fee
Per Government Code
Sections 6103 and 27383
WHEN RECORDER MAIL TO:

Public Works Director
The City of Union City
34009 Alvarado Niles Road
Union City, CA 94587
DocuSign Envelope ID: C674C411-7687-489C-BE5F-F7954E870B9E 4/5/2022
City Council/RSA Agenda 180 Tuesday, April 12, 2022
THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION (GOVT. CODE 27361.6 ) (additional recording fee applies)
STATE OF CALIFORNIA ﴿
﴿
COUNTY OF ALAMEDA ﴿
MARILOU AYUPAN, being first duly sworn, deposes and says:

That she is the duly appointed Interim Public Works Director of the City of Union City, California; that she has read the foregoing Notice of Completion and Notice of Acceptance and knows the contents thereof, and that the same is true of her own knowledge except as to the matters therein stated on her own information and belief, and as to those matters that she believes it to be true.

MARILOU AYUPAN, P.E.

PUBLIC WORKS DIRECTOR
Subscribed and sworn to before me
This day of , 2022
CITY CLERK in and for the City of Union City,
County of Alameda, State of California
DocuSign Envelope ID: C674C411-7687-489C-BE5F-F7954E870B9E City Council/RSA Agenda 181 Tuesday, April 12, 2022
RESOLUTION NO.

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UNION CITY ACCEPTING WORK FOR THE HSIP CYCLE 8 TRAFFIC SIGNAL
IMPROVEMENTS PROJECT, CITY PROJECT NO. 17-18
WHEREAS, Brown & Fesler Electric, Inc., of Livermore, California, has successfully completed the improvements for HSIP Cycle 8 Traffic Signal Improvements Project, Federal Project No. HSIPL-5354(040), City Project No. 17-18, per plans and specifications; and
WHEREAS, the work has been completed to the satisfaction of the Public Works Director (Exhibit A); and
WHEREAS, the project upgraded existing signalized intersections with the installation of new poles/mast arms, new signal conduits and the elimination of centermedian signal poles at two (2) intersections including Alvarado-Niles Road/Mann Avenue/Union Square and Alvarado Boulevard/Galaxy Drive; and WHEREAS, said project construction phase is budgeted in the current Caltrans Finance Letter through a combination of funding from Federal Highway Safety Improvement Program (HSIP) funds, in the amount of $510,400, and the local matching funds for this project from ACTIA Streets & Roads Fund (Fund 2542), in the amount of $230,000; and
WHEREAS, there are sufficient funds within said funding sources to cover all construction-related costs.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Union City does hereby accept the work for the final construction contract amount of $690,784; and
BE IT FURTHER RESOLVED that the City Council of the City of Union City does hereby also accept the estimated additional amount of $15,000 for both City staff time and other costs for such activities as inspection, project administration/management, materials testing, and other project-related costs, for a final total project cost of $705,784; and
BE IT FURTHER RESOLVED that the City Clerk of the City of Union City be directed to record the Notice of Completion with the Office of the County Recorder of Alameda County, California; and
BE IT FURTHER RESOLVED that the City Council of the City of Union City does hereby authorize the City to make a final retention payment in the amount of $34,539.20 to Brown & Fesler Electric, Inc., for the completion of work in accordance with City Council/RSA Agenda 182 Tuesday, April 12, 2022
the plans and specifications on file at the Office of the Public Works Director for City Project No. 17-18.

City Council/RSA Agenda 183 Tuesday, April 12, 2022

CERTIFICATE OF COMPLETION
(Sec. 4005 Government Code)
TITLE: HSIP CYCLE 8 TRAFFIC SIGNAL IMPROVEMENTS,
CITY PROJECT NO. 17-18, FEDERAL PROJECT NO. HSIPL-5354(040) I, MARILOU AYUPAN, Public Works Director of the City of Union City, County of Alameda, State of California, do hereby certify as follows:
a. That this project consisted of making traffic signal improvements at two (2) existing signalized intersections (Alvarado-Niles Rd./Mann Ave. & Union Alvarado Blvd. /Galaxy Wy.) in Union City; and
b. That contract agreement was approved by the City Council for the amount of $ 625,627.00; and
c. That the adopted and approved plans and specifications have been changed in the following respects:

CONTRACT CHANGE DESCRIPTION AMOUNT
Original Contract $ 625,627.00
Increase in Quantities $ -
Decrease in Quantities $ -
CCO #1 Wheelchair Ramps and Ped Push Button $ 48,276.00 CCO #2 Add Yellow Reflective Border to Signal Heads $ 7,738.00 CCO #3 CREE Luminaires and GE/Gelcore Change $ 6,038.00 CCO #4 Additional Handicap Ramp at Galaxy Way Intersection $ 3,105.00 Total Construction Contract Cost to City $ 690,784.00
d. That the work performed has been done in accordance with such plans and specifications. e. That Brown & Fesler, Inc. performed the work, at a total cost of $ 690,784.00 including the above noted contract change description.
f. That the Final retention amount of $ 34,539.20 will be released after 35 days of the project’s acceptance.

Dated: , 2022. ___________________________________
MARILOU AYUPAN, P.E.

PUBLIC WORKS DIRECTOR
DocuSign Envelope ID: C674C411-7687-489C-BE5F-F7954E870B9E 4/5/2022
City Council/RSA Agenda 184 Tuesday, April 12, 2022
Agenda Item
DATE: 4/12/2022
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: MARILOU AYUPAN, PUBLIC WORKS DIRECTOR
SUBJECT: ADOPT A RESOLUTION INITIATING PROCEEDINGS FOR THE LEVYAND

COLLECTION OF ASSESSMENTS FOR THE CITY-WIDE LANDSCAPE & LIGHTING DISTRICT NO. 3 FOR FISCALYEAR 2022/23
Staff recommends that the City Council adopt the attached resolution initiating proceedings for the levy and collection of assessments for the Citywide Landscape & Lighting District No. 3 (LLAD No. 3) for Fiscal Year 2022/23.

STRATEGIC PLAN ALIGNMENT
The action is not an identified strategy in the Strategic Plan.

BACKGROUND
In accordance with the Landscape and Lighting Act of 1972 and the California Government Code, the City Council is required to conduct a public hearing process regarding the levy of annualassessments for the upcoming fiscal year. As part of the three-step process, the City Council must initiate proceedings (Step 1), hold a meeting to declare its intent to levy the assessments and accept the annual Engineer's Report (Step 2), and then conduct a public hearing and confirm and levy the assessments (Step 3).

DISCUSSION
The services provided through this assessment district consist of street lighting and signalization, street median and backup landscape maintenance, street tree management, and parks maintenance within the city limits of Union City.

The City’s consultant, NBS of Temecula, California, will assist the staff to prepare the annual Engineer’s Report, calculate the levy amounts and prepare the assessment roll for the 2022/23 fiscal year. The proposed annual Engineer’s Report will be presented to the City Council on May 24, 2022.

City Council/RSA Agenda 185 Tuesday, April 12, 2022

FISCAL IMPACT
There is no fiscal impact for the requested Council Action to initiate the proceeding for the levy and collection of said LLAD No. 3 assessment.

RECOMMENDATION
Staff recommends that the City Council adopt the attached resolution initiating proceedings for the levy and collection of assessments for the Citywide Landscape & Lighting District No. 3 (LLAD No. 3) for Fiscal Year 2022/23.

Prepared by:

Marilou Ayupan, Public Works Director
Submitted by:

Marilou Ayupan, Public Works Director
ATTACHMENTS:

Description Type
Attachment A - LLADLevy Schedule Attachment
Resolution Resolution
City Council/RSA Agenda 186 Tuesday, April 12, 2022
2/15/2022

CITY OF UNION CITY
LANDSCAPE AND LIGHTING ASSESSMENT DISTRICT NO. 3
2022/23 ANNUAL LEVY OF ASSESSMENT SCHEDULE

(Council Meets 2nd & 4th Tuesdays at 7pm)
February 15, 2022 NBS produces and provides the timeline and the Resolution Initiating Proceedings to City Staff.

March 18, 2022 City Staff provides Cost Estimates for Engineer’s Report.

April 12, 2022 Council Meeting – Initiating Proceedings  City Council considers Resolution Initiating
Proceedings.

April 18, 2022 NBS produces and provides to City Staff the draft Engineer’s Report.

April 25, 2022 City Staff provides comments regarding the draft Engineer’s Report.

April 29, 2022 NBS prepares and delivers
 Engineer’s Report
 Resolution Approving Report
 Resolution of Intention
Public Hearing date confirmed.

May 24, 2022 Council Meeting – Intent Meeting
 Council considers Engineer’s Report and Resolution
Approving the Engineer’s Report.
 Council considers Resolution of Intention and sets
date for Public Hearing.

June 3, 2022 NBS prepares and delivers
 Resolution Amending the Engineer’s Report (if
needed)
 Resolution Ordering the Levy and Collection of
Assessments
June 10, 2022 City Clerk arranges for the publication of the Resolution of Intention once in a local newspaper not less than ten days before Public Hearing date.

June 28, 2022 Council Meeting – Public Hearing
 Property owners may ask questions and voice protest
or present written protest.
 Council considers all oral statements and written
protests and may order any changes to the Engineer’s
Report or proposed assessments.
 Council considers the Resolution Amending the
Engineer’s Report (only if amendments are desired)
and the Resolution Ordering the Levy and Collection
of Assessments.

July 1, 2022 City Clerk provides certified Resolutions to NBS for inclusion with levy submittal to County.

August 10, 2022 NBS transmits Resolutions and assessment roll to County and follows up regarding any rejected parcels.

City Council/RSA Agenda 187 Tuesday, April 12, 2022
RESOLUTION NO.

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UNION CITY

INITIATING PROCEEDINGS FOR THE LEVY AND COLLECTION OF
ASSESSMENTS FOR THE CITY-WIDE LANDSCAPE & LIGHTING DISTRICT NO. 3 FOR FISCAL YEAR 2022/23
WHEREAS, the City Council of the City of Union City intends to renew city-wide Landscape & Lighting District No. 3 to fund on-going street lighting and signalization, street median and backup landscape maintenance, street tree maintenance, and parks maintenance within the city limits of Union City; and
WHEREAS, the City Council of the City of Union City previously completed its proceedings in accordance with and pursuant to the Landscape and Lighting Act of 1972, Part 2, Division 15, of the California Streets and Highways Code (commencing with Section 22500) (the “Act”) to establish the City’s Landscape & Lighting District No. 3 (the “District”); and WHEREAS, the City has retained NBS to prepare the annual Engineer’s Report, calculate the levy, and to prepare the assessment roll for the 2022/23 fiscal year; and WHEREAS, the City Council of the City of Union City wishes to initiate proceedings for the levy of assessments for Fiscal Year 2022/23 in order to provide for the necessary costs and expenses pertaining to the maintenance of the improvements within the District.

NOW, THEREFORE BE IT RESOLVED, DETERMINED, AND ORDERED BY THE COUNCIL AS FOLLOWS:

1. Annual Report: The City Council of the City of Union City hereby orders NBS to prepare and file with the City Clerk the annual Engineer’s Report concerning the levy and collection of assessments within the District for the fiscal year commencing July 1, 2022 and ending June 30, 2023.

2. New Improvements or Changes to Existing Improvements: There are no changes to existing improvements nor are there any items added to the list of improvements previously approved at the formation or subsequent annexations to the District.

PASSED, APPROVED, AND ADOPTED by the City Council of the City of Union City at a regular meeting held on April 12, 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED:
________________________________
Carol Dutra-Vernaci
Mayor
City Council/RSA Agenda 188 Tuesday, April 12, 2022
ATTESTED: APPROVED AS TO FORM:
__________________________________ ________________________________ Anna M. Brown Kristopher J. Kokotaylo
City Clerk City Attorney
City Council/RSA Agenda 189 Tuesday, April 12, 2022
Agenda Item
DATE: 4/12/2022
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: JOAN MALLOY, CITY MANAGER
SUBJECT: ADOPT A RESOLUTION IN SUPPORT OF LOCATING A TRAUMA

CENTER IN SOUTHERN ALAMEDA COUNTY AT WASHINGTON
HOSPITAL’S MORRIS HYMAN CRITICAL CARE PAVILION.

Staff recommends that the City Counciladopt a resolution in support of locating a trauma center in southern Alameda County at Washington Hospital’s Morris Hyman Critical Care Pavilion in Fremont, CA.

STRATEGIC PLAN ALIGNMENT
The action is not an identified strategy in the Strategic Plan.

BACKGROUND
The Washington Township Health Care District, dba Washington Hospital Healthcare System (WHHS), was founded in 1948. Voters passed the first bond for $1.25 million in 1952 to build the hospital, which opened on November 24, 1958, to serve southern Alameda County.

WHHS has a publicly elected Board of Directors, which provides governance for this community-owned hospital. WHHS has demonstrated a history of financial stability, responsible stewardship, and provided a wide-ranging collaboration with Alameda County and Emergency Medical Services (EMS) providers.

Local voters have continually approved bond measures for seismic upgrades and facility improvements required by State mandates, and the expansion of emergency and criticalcare services.

WHHS engaged an independent third party from 2018 to 2019 to assess the feasibility of a WHHS trauma center, which, using data provided by Alameda County EMS, projected there is sufficient volume to support a trauma center in the southern portion of the County. During that time, Alameda County Department of Public Health retained Bishop & Associates to assess the demand for and feasibility of additional trauma centers in Alameda County. Within the coming weeks (April – May 2022), Bishop & Associates will release their report to the East Bay Hospital Council, and the Alameda County Health Committee, which will in turn make a recommendation to the Alameda County Board of Supervisors to consider action on changing the Alameda City Council/RSA Agenda 190 Tuesday, April 12, 2022
County trauma network to include a trauma center in the south county region.

DISCUSSION
WHHS is applying for trauma center designation for its Morris Hyman Critical Care Pavilion. First opened in November 2018, the Morris Hyman Critical Care Pavilion is a 224,800 square-foot medical facility that is home to Washington Hospital’s Emergency Department, Critical Care, Telemetry, Intermediate Care and Oncology/Medical-Surgical units. The state-of-the-art, three-story facility is built on the most sophisticated base isolation system, making it one of the most seismically safe structures in the southeast Bay Area.

Located on the first floor, the Pavilion’s Emergency Department (ED) is four times the size of the previous ED and is designed to handle large-scale disasters, with two dedicated resuscitation rooms specifically for trauma care. On the second floor of the pavilion, the Critical Care Unit (also referred to as the Intensive Care Unit), houses 48 patient care rooms, offering more than adequate capacity for trauma cases. Its patient-focused design creates a comfortable and calming atmosphere for patients, visitors, employees, physicians, and volunteers. All rooms in the Pavilion are private and large, which enhances patient comfort, safety, and privacy.

Inpatient rooms have floor-to-ceiling windows for maximum natural light, which encourages healing. Beds can even be wheeled into outdoor spaces for patients to enjoy fresh air and peaceful gardens. In addition, WHHS’s affiliation with UCSF provides residents with access to the advanced specialties of an academic medicalcenter close to home.

Its resuscitation and patient care capacity, as well as its wide array of advanced equipment, make the Morris Hyman Critical Care Pavilion more than qualified for trauma center designation. Currently, ambulance transport to Eden Medical Center and Regional Medical Center for trauma services from Fremont, Newark and Union City can take between 45 minutes to over an hour to arrive, long beyond what is acceptable for trauma response.

As such, the designation of Morris Hyman Critical Care Pavilion as a trauma center will dramatically improve the quality of care for trauma patients in the south county area, which will in turn improve the quality of life for Union City residents. Washington Hospital’s application to become a trauma center is also strongly supported by the medicalcommunity and labor and has vast community support.

FISCAL IMPACT
There are no direct fiscal impacts that would result from adopting this resolution.

RECOMMENDATION
Staff recommends that the City Council adopt a resolution in support of locating a trauma center in southern Alameda County at Washington Hospital’s Morris Hyman Critical Care Pavilion.

Prepared by:

Jonathan Segarra, Management Analyst II
Submitted by:

Jonathan Segarra, Management Analyst II
City Council/RSA Agenda 191 Tuesday, April 12, 2022
ATTACHMENTS:

Description Type
Resolution - Washington Hospital Trauma Center Resolution City Council/RSA Agenda 192 Tuesday, April 12, 2022

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UNION CITY IN

SUPPORT OF LOCATING A TRAUMA CENTER IN SOUTHERN ALAMEDA COUNTY AT WASHINGTON HOSPITAL’S MORRIS HYMAN CRITICAL CARE PAVILION.

WHEREAS, the Washington Township Health Care District, dba Washington Hospital Healthcare System (WHHS) was founded in 1948. Voters passed the first bond for $1.25 million in 1952 to build Washington Hospital, which opened on November 24, 1958, to serve south Alameda County; and
WHEREAS, local voters have continually approved bond measures for seismic upgrades and facility improvements required by State mandates, and the expansion of emergency and critical care services; and
WHEREAS, WHHS has a publicly elected Board of Directors, which provides governance for this community-owned hospital, and has demonstrated a history of financial stability, responsible stewardship, and wide-ranging collaboration with Alameda County and Emergency Medical Services (EMS) providers; and
WHEREAS, WHHS engaged an independent third party from 2018 to 2019 to assess the feasibility of a WHHS trauma center, which, using data provided by Alameda County EMS, projected there is sufficient volume to support a trauma center in the southern portion of the County; and
WHEREAS, Alameda County Department of Public Health retained Bishop & Associates to assess the demand for and feasibility of additional trauma centers in Alameda County. In July 2021, Bishop began working with Washington Hospital, Stanford HealthcareValley Care, Sutter Health Eden Medical Center, Alameda Healthcare System, and UCSF Benioff Children’s Hospital Oakland to assess these needs; and WHEREAS, Bishop & Associates will release their report to the East Bay Hospital Council, and the Alameda County Health Committee in April or May 2022, which will in turn make a recommendation to the Alameda County Board of Supervisors to consider action on changing the Alameda County trauma network; and
WHEREAS, ambulance transport to Eden Medical Center and Regional Medical Center for trauma services from Fremont, Newark and Union City often takes between 45 minutes to over an hour to arrive, long beyond what is acceptable for trauma response; and WHEREAS, in November 2018, WHHS opened the 224,800-square-foot Morris Hyman Critical Care Pavilion, proudly named after Morris Hyman, community leader, visionary, philanthropist, and Fremont Bank founder. The Emergency Department is designed to handle large-scale disasters, with two dedicated resuscitation rooms specifically for trauma care, which allows Washington Hospital to apply for trauma center designation. On the second floor of the pavilion, the Critical Care Unit houses 48 patient care rooms, offering more than adequate City Council/RSA Agenda 193 Tuesday, April 12, 2022
capacity for trauma cases. WHHS’s affiliation with UCSF provides residents with access to the advanced specialties of an academic medical center close to home; and WHEREAS, the designation of the Morris Hyman Critical Care Pavilion as a trauma center will dramatically improve the quality of care for trauma patients in the south county area, which will in turn improve the quality of life for Union City residents; and WHEREAS, Washington Hospital’s application to become a trauma center is strongly supported by the medical community and labor and has vast community support.

NOW, THEREFORE, BE IT RESOLVED, that the City of Union City supports locating a trauma center at Washington Hospital that will provide advanced life-saving medical care and ambulance transport within an acceptable trauma response time; and BE IT FURTHER RESOLVED, that the City of Union City encourages the Alameda County Board of Supervisors to approve a trauma center at Washington Hospital in Southern Alameda County.

PASSED, APPROVED, AND ADOPTED by the City Council of the City of Union City at a regular meeting held on the 12th day of April 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED:

CAROL DUTRA-VERNACI
Mayor
ATTESTED: APPROVED AS TO FORM:
_________________________ ___________________________
ANNA M. BROWN KRISTOPHER J. KOKOTAYLO
City Clerk City Attorney
City Council/RSA Agenda 194 Tuesday, April 12, 2022
Agenda Item
DATE: 4/12/2022
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: JOAN MALLOY, CITY MANAGER
SUBJECT: ADOPT A RESOLUTION APPROVING AN AMENDMENT TO THE CITY’S

COMPENSATION PLAN AND SALARY SCHEDULE FOR

UNREPRESENTED POLICE DEPARTMENT POSITIONS IN

CONFORMANCE WITH CALIFORNIA CODE OF REGULATIONS, TITLE
2, SECTION 570.5
Staff recommends that the City Councilapprove the changes to the City’s Salary Schedule, effective April 25, 2022, for the unrepresented Police Department positions.

STRATEGIC PLAN ALIGNMENT
This action supports Strategy 8 of Goal B, Governance and Organization Effectiveness, by ensuring salaries are competitive in order to recruit, attract and retain talented employees.

BACKGROUND
The unrepresented Police Department positions subject to this proposed revision include: Police Reserve, Police Cadet, and Police Officer Trainee.

The increases to the City’s Compensation Plan and Salary Schedule are consistent with the minimum wage increase for calendar year 2022. In addition, the changes willavoid compaction and provide growth opportunities within the positions.

DISCUSSION
Effective January 1, 2022, the hourly minimum wage increased from $14.00 to $15.00, an increase of approximately 7.14%. Step 1 for the Police Reserve and Police Cadet positions in this group is increased by

7.14%. Additionally, the differential between steps is updated to 5% between each step for consistency, if City Council/RSA Agenda 195 Tuesday, April 12, 2022
applicable. In order to avoid compaction, the Police Officer Trainee position is increased by 7% consistent with the next higher level position Police Officer Recruit. The revised compensation structure for these positions has been developed in order to attract and recruit new candidates retain current employees.

FISCAL IMPACT
The estimated annualcost is $40,275.

RECOMMENDATION
Staff recommends that the City Councilapprove the attached resolution to approve an amendment to the City’s Compensation Plan and Salary Schedule, effective April 25, 2022, for the applicable positions.

Prepared by:

Lilybell Nakamura, Human Resources Director
Submitted by:

Lilybell Nakamura, Human Resources Director
ATTACHMENTS:

Description Type
Resolution For Police Unrepresented Salary ScheduleAdjustment Resolution Desk Item Attachment
City Council/RSA Agenda 196 Tuesday, April 12, 2022
RESOLUTION NO.

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

UNION CITY APPROVING AN AMENDMENT TO THE
CITY’S COMPENSATION PLAN AND SALARY SCHEDULE

FOR UNREPRESENTED POLICE DEPARTMENT POSITIONS

IN CONFORMANCE WITH CALIFORNIA CODE OF
REGULATIONS, TITLE 2, SECTION 570.5
WHEREAS, effective January 1, 2022, the hourly minimum wage in California increased from $14.00 to $15.00, an increase of approximately 7.14%; and WHEREAS, City staff have evaluated the unrepresented seasonal/temporary positions of: Police Reserve, Police Cadet, and Police Officer Trainee (the “Unrepresented Positions”); and
WHEREAS, in order to avoid compaction, City staff recommend that step 1 for each of the Unrepresented Positions increase by 7.14% and include a differential between steps to 5% between each step for consistency; and
WHEREAS, the revised salary and compensation structure for the Unrepresented Positions will allow the City to attract and recruit new candidates and encourage returning employees; and
WHEREAS, the City Council has considered the above and has determined that the amendment to the City’s Compensation Plan and salary schedule for the Unrepresented Positions is appropriate.

NOW, THEREFORE, BE IT RESOLVED that the City Council hereby approves an amendment to the City’s Compensation Plan to amend the following salary schedule for the Unrepresented Positions, effective April 25, 2022:

Step 1 Step 2 Step 3
60120 Police Cadet 15.86 16.65 17.48
60130 Police Reserve 15.00
60150 Police Officer Trainee 41.13
City Council/RSA Agenda 197 Tuesday, April 12, 2022
1 DATE: 04/12/2022
TO: Honorable Mayor and City Council
FROM: Anna M. Brown, City Clerk
SUBJECT: Desk Item – Item 5.h.

The attached staff report and resolution is being provided as a desk item for 5.h. The previously provided staff report and resolution were incorrect.

Correction to Staff Report: Effective date is 4/18/2022, not 4/25/2022 Correction to Resolution: Police Officer trainees are increased 7%, not 7.14% City Council/RSA Agenda 198 Tuesday, April 12, 2022
DATE: 04/12/2022
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: JOAN MALLOY, CITY MANAGER
SUBJECT: ADOPT A RESOLUTION APPROVING AN AMENDMENT TO
THE CITY’S COMPENSATION PLAN AND SALARY SCHEDULE

FOR UNREPRESENTED POLICE DEPARTMENT POSITIONS IN

CONFORMANCE WITH CALIFORNIA CODE OF
REGULATIONS, TITLE 2, SECTION 570.5
Staff recommends that the City Council approve the changes to the City’s Compensation Plan and Salary Schedule, effective April 18, 2022, for the unrepresented Police Department positions.

STRATEGIC PLAN ALIGNMENT
This action supports Strategy 8 of Goal B, Governance and Organization Effectiveness, by ensuring salaries are competitive in order to recruit, attract and retain talented employees.

BACKGROUND
The unrepresented Police Department positions subject to this proposed revision include: Police Reserve, Police Cadet, and Police Officer Trainee.

The increases to the City’s Compensation Plan and Salary Schedule are consistent with the minimum wage increase for calendar year 2022. In addition, the changes will avoid compaction and provide growth opportunities within the positions.

DISCUSSION
Effective January 1, 2022, the hourly minimum wage increased from $14.00 to $15.00, an increase of approximately 7.14%. Step 1 for the Police Reserve and Police Cadet positions in this group is increased by 7.14%. Additionally, the differential between steps is updated to 5% between each step for consistency, if applicable. In order to avoid compaction, the Police Officer Trainee position is increased by 7% consistent with the next higher level position Police Officer Recruit. The revised compensation structure for these positions has been developed in order to attract and recruit new candidates retain current employees.

FISCAL IMPACT
City Council/RSA Agenda 199 Tuesday, April 12, 2022
The estimated annual cost is $40,275.00.

RECOMMENDATION
Staff recommends that the City Council approve the attached resolution to approve an amendment to the City’s Compensation Plan and Salary Schedule, effective April 18, 2022, for the applicable positions.

Prepared by:

Lilybell Nakamura, Human Resources Director
Submitted by:

Lilybell Nakamura, Human Resources Director
ATTACHMENTS:

Resolution
5089362.1
City Council/RSA Agenda 200 Tuesday, April 12, 2022
RESOLUTION NO.

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

UNION CITY APPROVING AN AMENDMENT TO THE
CITY’S COMPENSATION PLAN AND SALARY SCHEDULE

FOR UNREPRESENTED POLICE DEPARTMENT POSITIONS

IN CONFORMANCE WITH CALIFORNIA CODE OF
REGULATIONS, TITLE 2, SECTION 570.5
WHEREAS, effective January 1, 2022, the hourly minimum wage in California increased from $14.00 to $15.00, an increase of approximately 7.14%; and WHEREAS, City staff have evaluated the unrepresented seasonal/temporary positions of: Police Reserve, Police Cadet, and Police Officer Trainee (the “Unrepresented Positions”); and
WHEREAS, in order to avoid compaction, City staff recommend that step 1 for the Police Cadet and Police Reserve increase by 7.14% and include a differential between steps to 5% between each step for consistency; and
WHEREAS, in order to avoid compaction, City staff recommend that step 1 for the Police Officer Trainee increase by 7%; and
WHEREAS, the revised salary and compensation structure for the Unrepresented Positions will allow the City to attract and recruit new candidates and encourage returning employees; and
WHEREAS, the City Council has considered the above and has determined that the amendment to the City’s Compensation Plan and salary schedule for the Unrepresented Positions is appropriate.

NOW, THEREFORE, BE IT RESOLVED that the City Council hereby approves an amendment to the City’s Compensation Plan to amend the following salary schedule for the Unrepresented Positions, effective April 18, 2022:

Step 1 Step 2 Step 3
60120 Police Cadet 15.86 16.65 17.48
60130 Police Reserve 15.00
60150 Police Officer Trainee 41.13
City Council/RSA Agenda 201 Tuesday, April 12, 2022
Agenda Item
DATE: 4/12/2022
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: JACKIE ACOSTA, FINANCE DIRECTOR
SUBJECT: RESOLUTION AUTHORIZING THE CITY TO PARTICIPATE IN A $4

MILLION MASTER LEASE PURCHASE PROGRAM OFFERED BY BANK

OF AMERICA AND APPROVING THE CITY MANAGER TO EXECUTE

THE RELATED CURRENT AND FUTURE LEASE DOCUMENTS, AFTER

APPROVALAS TO FORM BY THE CITYATTORNEY
The City intends to purchase approximately $600,000 in needed Network Infrastructure replacement equipment and services, financed through a lease purchase agreement. In an effort to secure the most favorable financing terms, the City surveyed the leasing market and obtained proposals from three lease companies including the equipment vendor’s leasing company. Bank of America offered the most favorable terms for the Network Infrastructure lease purchase and agreed to preapprove up to $3.4 million in additional lease financing, if needed for future City purchases such as fire trucks or other equipment. There is no obligation or cost if no further financing is obtained from Bank of America. Staff anticipates that the initial lease purchase under the program will be for approximately $600,000 of Network Infrastructure replacement equipment and services, with an estimated total four-year lease cost of $633,822, at an interest rate of 2.47%.

STRATEGIC PLAN ALIGNMENT
This action is not an identified strategy in the Strategic Plan.

BACKGROUND
In order to normalize annual replacement costs for technology and computing equipment, the City began a program in 2008 to move all computer equipment purchases into a lease program. This prevents spiking of costs in any one year and allows the City to remain current in its equipment; thereby lessening maintenance costs on aging items. The City has also used lease purchase programs for other City equipment purchases, such as energy efficiency equipment and fire trucks. However, each lease financing has been negotiated as a stand-alone lease with varying rates and terms.

City Council/RSA Agenda 202 Tuesday, April 12, 2022

DISCUSSION
As there is a current need to purchase Network Infrastructure equipment and services, and there will be a fairly near-term need to replace several large pieces of fire apparatus, staff researched current lease finance options.

Staff received proposals from De Lage Landen Public Finance, Bank of America and NexSeer, a leasing company is Southern California. Bank of America offered the most competitive rate, a rate of 2.47% for a term of four years, or a rate of 2.57% for a term of five years. Additionally, Bank of America offered up to $3.4 million in additional financing which can be accessed at the City’s discretion. The current rate structure proposed by Bank of America in the attached term sheet (Exhibit No. 2) will remain in place for one year.

Each year thereafter, Bank of America will review the lease purchase line of credit and determine if the rate structure will remain the same or will be amended. Again, there is no obligation to borrow additional money and no fees or costs if no additional funds are borrowed.

The terms being offered by Bank of America are very favorable in light of the high inflation environment and staff recommends participating in Bank of America’s lease purchase program by executing a Master Lease Purchase Agreement and authorizing the City Manager to execute the related current and future lease documents after approvalas to form by the City Attorney.

FISCAL IMPACT
Authorization to enter into a Master Lease Purchase Agreement with Bank of America ensures that the City will have the option to use lease purchase financing for future major equipment purchases at favorable interest rates.

The Bank of America terms that will be secured under this program are shown on Exhibit No. 2. There is no immediate fiscal impact of participating as the City is not obligated to utilize the Master Lease Purchase Agreement.

If the first lease is in the amount of $600,000, this is what the lease payment schedule would be:

Period
Ending
Principal Coupon Interest Debt Service
Annual Debt
Service
10/15/2022 71,817.80 2.47% 7,410.00 79,227.80 -
4/15/2023 72,704.75 2.47% 6,523.05 79,227.80 158,455.60 10/15/2023 73,602.66 2.47% 5,625.15 79,227.81 -
4/15/2024 74,511.65 2.47% 4,716.15 79,227.80 158,455.61 10/15/2024 75,431.87 2.47% 3,795.93 79,227.80 -
4/15/2025 76,363.45 2.47% 2,864.35 79,227.80 158,455.60 10/15/2025 77,306.54 2.47% 1,921.26 79,227.80 -
4/15/2026 78,261.28 2.47% 966.53 79,227.81 158,455.61
$ 600,000.00 $ 33,822.42 $ 633,822.42 $ 633,822.42

RECOMMENDATION
Staff recommends that the City Council adopt a Resolution authorizing the City to participate in a $4 million Master Lease Purchase Program offered by Bank of America and approving the City Manager to execute the related current and future lease documents after approvalas to form by the City Attorney.

City Council/RSA Agenda 203 Tuesday, April 12, 2022
Prepared by:

Jackie Acosta, Finance Director
Submitted by:

Jackie Acosta, Finance Director
ATTACHMENTS:

Description Type
Attachment 1 - Master Lease Resolution
Attachment 2 - EscrowAgreement Resolution
Resolution -Authorizing Participation in a $4M Master Lease Purchase Program
Resolution
Exhibit A - TermSheet Resolution
City Council/RSA Agenda 204 Tuesday, April 12, 2022
1 MELPA BAPCC
January 2020

MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT
This Master Equipment Lease/Purchase Agreement (the “Agreement”) dated as of _________________________, and entered into by and between Banc of America Public Capital Corp, a Kansas corporation (together with its successors, assigns and transferees, and as more particularly defined herein, “Lessor”), and ___________________________, a [city] [county] [school district] [special district] [body corporate and politic] existing under the laws of the State of ___________ (“Lessee”).

WITNESSETH:

WHEREAS, Lessee desires to lease and acquire from Lessor certain Equipment described in each Equipment Schedule (as each such term is defined herein), subject to the terms and conditions of and for the purposes set forth in each Lease; and WHEREAS, the relationship between the parties shall be a continuing one and items of equipment and other personal property may be financed pursuant to one or more Leases entered into from time to time in accordance with this Agreement by execution and delivery of additional Equipment Schedules by the parties hereto, subject to the terms and conditions provided herein; and
WHEREAS, Lessee is authorized under the constitution and laws of the State (as such term is defined herein) to enter into this Agreement and each Equipment Schedule for the purposes set forth herein and therein;
NOW, THEREFORE, for good and valuable consideration, receipt and sufficiency of which are hereby acknowledged, and in consideration of the premises hereinafter contained, the parties hereby agree as follows:

ARTICLE I
Section 1.01. Definitions. The following terms will have the meanings indicated below unless the context clearly requires otherwise:
“Acquisition Amount” means, with respect to each Lease, the amount specified in the related Equipment Schedule and represented by Lessee to be sufficient for the purpose of acquiring and installing the Equipment listed in such Lease. “Acquisition Period” means, with respect to each Lease for which an Escrow Account is established, that period identified in the related Equipment Schedule during which the Acquisition Amount attributable to such Lease may be expended on Equipment Costs pursuant to the related Escrow Agreement.

City Council/RSA Agenda 205 Tuesday, April 12, 2022
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January 2020
“Agreement” means this Master Equipment Lease/Purchase Agreement, including the exhibits hereto, together with any amendments and modifications to this Agreement pursuant to Section 13.04.
“Casualty Value” means, with respect to each Lease, the amount that is shown on the Payment Schedule for each Rental Payment Date under the column titled either (i) the Prepayment Price or (ii) the “Casualty Value”, if any.
“Code” means the Internal Revenue Code of 1986, as amended. Each reference to a Section of the Code in this Agreement and a Lease shall be deemed to include the relevant United States Treasury Regulations proposed or in effect thereunder. “Commencement Date” means, for each Lease, the date when Lessee’s obligation to pay rent commences under such Lease, which date shall be the earlier of (a) the date on which the Equipment listed in such Lease is accepted by Lessee in the manner described in Section 5.01, or (b) the date on which the Acquisition Amount is deposited in an Escrow Account for the purpose of acquiring and installing the Equipment listed in such Lease. “Contract Rate” means, with respect to each Lease, the rate identified as such in the related Payment Schedule.
“Disbursement Request” means, with respect to each Lease for which an Escrow Account is established, the disbursement request attached to the applicable Escrow Agreement as Schedule 1 and made a part thereof.
“Equipment” means, with respect to each Lease, the property listed in the related Equipment Schedule and all replacements, repairs, restorations, modifications and improvements thereof or thereto made pursuant to Article V or Section 8.01. Whenever reference is made in this Agreement to Equipment listed in a Lease, such reference shall be deemed to include all such replacements, repairs, restorations, modifications and improvements of or to such Equipment.
“Equipment Costs” means, with respect to each Lease, the total cost of the Equipment listed in the related Equipment Schedule, including related soft costs such as freight, installation and taxes and other capitalizable costs, legal fees, financing costs and other costs necessary to vest full, clear legal title to the Equipment in Lessee, subject to the security interest granted to and retained by Lessor as set forth in each Lease, and other costs incurred in connection with the acquisition, installation and/or financing of the Equipment as provided in the related Lease; provided that (a) any such soft costs on a cumulative basis shall not exceed a percentage approved by Lessor of the total cost of the Equipment subject to such Lease and (b) in no event shall capitalizable delivery costs, installation charges, taxes and similar capitalizable soft costs relating to such Equipment be included without Lessor’s prior consent.

City Council/RSA Agenda 206 Tuesday, April 12, 2022
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January 2020
“Equipment Schedule” means each separately numbered Equipment Schedule, substantially in the form of either Exhibit A-1 (general Equipment) or Exhibit A-2 (energy services Equipment) hereto, together with the related Payment Schedule. “Escrow Account” means, with respect to any Lease, the account established and held by the Escrow Agent pursuant to the related Escrow Agreement. “Escrow Agent” means, with respect to each Lease for which an Escrow Account is established, the Escrow Agent identified in the related Escrow Agreement, and its successors and assigns.
“Escrow Agreement” means, with respect to each Lease for which an Escrow Account is established, an Escrow and Account Control Agreement in form and substance acceptable to and executed by Lessee, Lessor and the Escrow Agent, pursuant to which an Escrow Account is established and administered.
“Event of Default” means an Event of Default described in Section 12.01. “Event of Non-appropriation” means, with respect to a Lease, the failure of Lessee’s governing body to appropriate or otherwise make available funds to pay Rental Payments under such Lease following the Original Term or then current Renewal Term sufficient for the continued performance of such Lease by Lessee.
“Lease” means an Equipment Schedule and the terms and provisions of this Agreement which are incorporated by reference into such Equipment Schedule. “Lease Term” means, with respect to each Lease, the Original Term and all Renewal Terms provided in the related Equipment Schedule.
“Lessee” means the entity referred to as Lessee in the first paragraph of this Agreement. “Lessor” means (a) the entity referred to as Lessor in the first paragraph of this Agreement and its successors or (b) any assignee or transferee pursuant to Section 11.01 of any right, title or interest of Lessor in and to the Equipment under the applicable Lease (including the Rental Payments and other amounts due thereunder), any related Escrow Agreement and Escrow Account, but does not include any entity solely by reason of that entity retaining or assuming any obligation of Lessor to perform hereunder or under such Lease. “Material Adverse Change” means (a) any change in Lessee’s creditworthiness that could have a material adverse effect on (i) the financial condition or operations of Lessee, or (ii) Lessee’s ability to perform its obligations under this Agreement or any Lease or (b) a downgrade in Lessee’s external debt rating from the date of this Agreement of two or more subgrades by either Moody’s Investors Service, Inc. or S&P Global Ratings or any equivalent successor credit rating agency, or any downgrade by either such agency that would cause Lessee’s credit rating to be below investment grade, or, if any such rating agency no longer City Council/RSA Agenda 207 Tuesday, April 12, 2022
4 MELPA BAPCC
January 2020
publishes such ratings at the date of determination, any other nationally recognized statistical rating organization that is selected by Lessee for purposes of such long-term general obligation bond ratings and long-term general fund related bond ratings. “Original Term” means, with respect to each Lease, the period from the Commencement Date identified in the related Equipment Schedule until the end of the fiscal year of Lessee in effect at such Commencement Date.
“Outstanding Balance” means, with respect to each Lease, the amount that is shown for each Rental Payment Date under the column titled “Outstanding Balance” on the Payment Schedule.
“Payment Schedule” means, with respect to each Lease, the Payment Schedule attached to and made a part of the related Equipment Schedule and substantially in the form of Exhibit B attached to this Agreement.
“Prepayment Price” means, with respect to each Lease, the amount that is shown for each Rental Payment Date under the column titled “Prepayment Price” on the Payment Schedule. “Principal Portion” means, with respect to each Lease, the amount that is shown for each Rental Payment Date under the column titled “Principal Portion” on the Payment Schedule. “Related Documents” means, with respect to each Lease, the Lease, this Agreement and, if applicable, the related Escrow Agreement, each as may be amended and supplemented. “Renewal Terms” means, with respect to each Lease, the consecutive renewal terms of such Lease as specified in the related Equipment Schedule, the first of which commences immediately after the end of the Original Term and each having a duration and a term coextensive with each successive fiscal year of Lessee; provided that the final such Renewal Term shall commence on the first day of the last such fiscal year and end on the first business day after the last scheduled Rental Payment Date.
“Rental Payment Date” means, with respect to each Lease, each date on which Lessee is required to make a Rental Payment under such Lease as specified in the related Payment Schedule.
“Rental Payments” means, with respect to each Lease, the basic rental payments payable by Lessee on the Rental Payment Dates and in the amounts as specified in the related Payment Schedule, consisting of a principal component and an interest component, and in all cases sufficient to repay the principal component under such Lease and interest thereon at the applicable Contract Rate (or Taxable Rate if then in effect). “SEC” means the U.S. Securities and Exchange Commission.

City Council/RSA Agenda 208 Tuesday, April 12, 2022
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January 2020
“State” means the State of ___________.
“Taxable Rate” means, with respect to each Lease, for each day that the interest component of Rental Payments is taxable for Federal income tax purposes, an interest rate equal to the Contract Rate plus a rate sufficient such that the total interest to be paid on any Rental Payment Date would, after such interest was reduced by the amount of any Federal, state or local income tax (including any interest, penalties or additions to tax) actually imposed thereon, equal the amount of interest otherwise due to Lessor.
“Vendor” means the manufacturer, installer or supplier of the Equipment listed in an Equipment Schedule or any other person as well as the agents or dealers of the manufacturer, installer or supplier with whom Lessee arranged Lessee’s acquisition, installation, maintenance and/or servicing of the Equipment pursuant to the applicable Lease. “Vendor Agreement” means any contract entered into by Lessee and any Vendor for the acquisition, installation, maintenance and/or servicing of the Equipment under a Lease.

ARTICLE II
Section 2.01. Representations and Covenants of Lessee. Lessee represents, covenants and warrants for the benefit of Lessor on the date hereof and as of the Commencement Date of each Lease as follows:
(a) Lessee is [the State] [a political subdivision of the State within the meaning of Section 103(c) of the Code, duly organized and existing under the constitution and laws of the State], with full power and authority to enter into the Related Documents and the transactions contemplated thereby and to perform all of its obligations thereunder.
(b) Lessee has duly authorized the execution and delivery of the Related Documents by proper action of its governing body at a meeting duly called, regularly convened and attended throughout by the requisite quorum of the members thereof, or by other appropriate official approval, and all requirements have been met and procedures have occurred in order to ensure the validity and enforceability of the Related Documents.
(c) No event or condition that constitutes, or with the giving of notice or the lapse of time or both would constitute, an Event of Default exists at the date hereof. No Event of Non-appropriation has occurred or is threatened with respect to any Lease. (d) Lessee will do or cause to be done all things necessary to preserve and keep in full force and effect its existence as a [city] [county] [school district] [special district] [body corporate and politic] of the State.

City Council/RSA Agenda 209 Tuesday, April 12, 2022
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(e) Lessee has complied with such procurement and public bidding requirements as may be applicable to the Related Documents and the acquisition and installation by Lessee of the Equipment as provided in each Lease. (f) During the Lease Term under each Lease, the Equipment will be used by Lessee only for the purpose of performing essential governmental or proprietary functions of Lessee consistent with the permissible scope of Lessee’s authority. Lessee does not intend to sell or otherwise dispose of the Equipment or any interest therein prior to the last Rental Payment (including all Renewal Terms) scheduled to be paid under the related Lease.
(g) Lessee has kept, and throughout the Lease Term of each Lease shall keep, its books and records in accordance with generally accepted accounting principles and practices consistently applied, and shall deliver to Lessor (i) annual audited financial statements (including (1) a balance sheet, (2) statement of revenues, expenses and changes in fund balances for budget and actual, (3) statement of cash flows, and (4) footnotes, schedules and attachments to the financial statements) within two hundred seventy (270) days after the end of its fiscal year, (ii) such other financial statements and information as Lessor may reasonably request, and (iii) upon Lessor’s request, its annual budget for any prior or current fiscal year or for the following fiscal year when approved but not later than thirty (30) days prior to the end of its current fiscal year. The financial statements described in this subsection (g)(i) shall be accompanied by an unqualified opinion of Lessee’s independent auditor. Credit information relating to Lessee may be disseminated among Lessor and any of its affiliates and any of their respective successors and assigns.
(h) Lessee has an immediate need for the Equipment listed on each Equipment Schedule and expects to make immediate use of the Equipment listed on each Equipment Schedule. Lessee’s need for the Equipment is not temporary and Lessee does not expect the need for any item of the Equipment to diminish during the related Lease Term.
(i) The payment of the Rental Payments or any portion thereof is not (under the terms of any Lease or any underlying arrangement) directly or indirectly (x) secured by any interest in property used or to be used in any activity carried on by any person other than a state or local governmental unit or payments in respect of such property; or (y) on a present value basis, derived from payments (whether or not to Lessee) in respect of property, or borrowed money, used or to be used in any activity carried on by any person other than a state or local governmental unit. The Equipment will not be used, directly or indirectly, in any activity carried on by any person other than a state or local governmental unit. No portion of the Acquisition Amount relating to any Lease will be used, directly or indirectly, to make or finance loans to any person other than Lessee.

Lessee has not entered into any management or other service contract with respect to the use and operation of the Equipment.

City Council/RSA Agenda 210 Tuesday, April 12, 2022
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(j) There is no pending litigation, tax claim, proceeding or dispute that may adversely affect Lessee’s financial condition or impairs its ability to perform its obligations under the Related Documents. Lessee will, at its expense, maintain its legal existence and do any further act and execute, acknowledge, deliver, file, register and record any further documents Lessor may reasonably request in order to protect Lessor’s first priority security interest in the Equipment and the Escrow Account and Lessor’s rights and benefits under each Lease and related Escrow Agreement. (k) Lessee is the fee owner of the real estate where the Equipment under each Lease is and will be located (the “Real Property”) and has good and marketable title thereto, and there exists no mortgage, pledge, lien, security interest, charge or other encumbrance of any nature whatsoever on or with respect to such Real Property. (l) No lease, rental agreement, lease-purchase agreement, payment agreement or contract for purchase to which Lessee has been a party at any time has been terminated by Lessee as a result of insufficient funds being appropriated in any fiscal year. No event has occurred which would constitute an event of default under any debt, revenue bond or obligation which Lessee has issued during the past ten (10) years. (m) In connection with the Lessee’s compliance with any continuing disclosure undertakings (each, a “Continuing Disclosure Agreement”) entered into by the Lessee pursuant to SEC Rule 15c2-12 promulgated pursuant to the Securities and Exchange Act of 1934, as amended (the “Rule”), the Lessee may be required to file with the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access system, or its successor (“EMMA”), notice of its incurrence of its obligations under the Related Documents and notice of any accommodation, waiver, amendment, modification of terms or other similar events reflecting financial difficulties in connection with the Related Documents, in each case including posting a full copy thereof or a description of the material terms thereof (each such posting, an “EMMA Posting”). Except to the extent required by applicable law, including the Rule, the Lessee shall not file or submit or permit the filing or submission of any EMMA Posting that includes the following unredacted confidential information about the Lessor or its affiliates and any Escrow Agent in any portion of such EMMA Posting: address and account information of the Lessor or its affiliates and any Escrow Agent; e-mail addresses telephone numbers, fax numbers, names and signatures of officers, employees and signatories of the Lessor or its affiliates and any Escrow Agent; and the form of Disbursement Request that is attached to the Escrow Agreement.

The Lessee acknowledges and agrees that the Lessor and its affiliates are not responsible for the Lessee’s or any other entity’s (including, but not limited to, any broker-dealer’s) compliance or noncompliance (or any claims, losses or liabilities arising therefrom) with the Rule, any Continuing Disclosure Agreement or any applicable securities or other laws, including but not limited to those relating to the Rule.

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ARTICLE III
Section 3.01. Lease of Equipment. Subject to the terms and conditions of this Agreement, Lessor agrees to provide the funds specified in each Lease to be provided by it for Lessee to acquire the Equipment described in the related Equipment Schedule. Upon the execution and delivery of each Lease, Lessor thereby demises, leases and transfers to Lessee, and Lessee thereby acquires, rents and leases from Lessor, the Equipment as set forth in such Lease and in accordance with the terms thereof. The Lease Term for each Lease may be continued, solely at the option of Lessee, at the end of the Original Term or any Renewal Term for the next succeeding Renewal Term up to the maximum Lease Term set forth in such Lease. At the end of the Original Term and at the end of each Renewal Term until the maximum Lease Term has been completed, Lessee shall be deemed to have exercised its option to continue each Lease for the next Renewal Term unless Lessee shall have terminated such Lease pursuant to Section 3.03 or Section 10.01 of this Agreement. The terms and conditions during any Renewal Term shall be the same as the terms and conditions during the Original Term, except that the Rental Payments shall be as provided in the applicable Lease. Each Equipment Schedule signed and delivered by Lessor and Lessee pursuant to this Agreement shall constitute a separate and independent lease and installment purchase of the Equipment therein described.

Section 3.02. Continuation of Lease Term. Lessee intends, subject to Section 3.03 hereof, to continue the Lease Term of each Lease through the Original Term and all Renewal Terms and to pay the Rental Payments due thereunder. Lessee affirms that sufficient funds are legally available for the current fiscal year, and Lessee reasonably believes that an amount sufficient to make all Rental Payments during the entire Lease Term of each Lease can be obtained from legally available funds of Lessee. Lessee further intends to do all things lawfully within its power to obtain and maintain funds sufficient and available to discharge its obligation to make Rental Payments due under each Lease, including making provision for such payments to the extent necessary in each budget or appropriation request submitted and adopted in accordance with applicable provisions of law. Notwithstanding the foregoing, the decision whether or not to budget and appropriate funds or to extend the Lease Term for any Renewal Term for each Lease is within the sole discretion of the governing body of Lessee.

Section 3.03. Non-appropriation. Lessee is obligated only to pay such Rental Payments under each Lease as may lawfully be made during Lessee’s then current fiscal year from funds budgeted and appropriated for that purpose. Should Lessee fail to budget, appropriate or otherwise make available funds to pay Rental Payments under any Lease following the then current Original Term or Renewal Term, such Lease or Leases shall be deemed terminated at the end of the then current Original Term or Renewal Term thereunder. Lessee agrees to deliver notice to Lessor of such termination promptly after any decision to non-appropriate is made, but failure to give such notice shall not extend the term beyond such Original Term or Renewal Term. If any Lease is terminated in accordance with this Section 3.03, Lessee agrees to cease use of the Equipment thereunder and peaceably remove and deliver to Lessor, at Lessee’s sole expense (from legally available funds), such Equipment to Lessor at the location(s) to be specified by Lessor on or before the end of the applicable Original Term or Renewal Term for which Rental Payments have been appropriated for the applicable Lease (each, a “NonCity Council/RSA Agenda 212 Tuesday, April 12, 2022 9 MELPA BAPCC
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Appropriation Return Date”). Lessor may take whatever action at law or in equity as may be necessary or desirable to enforce Lessee’s obligations in the immediately preceding sentence.

Without limiting or reducing in any way Lessee’s obligations in the second preceding sentence or Lessor’s rights in the immediately preceding sentence, if the Lessee fails to return the Equipment to Lessor on or before the applicable Non-Appropriation Return Date pursuant to this Section 3.03, Lessee shall pay month-to-month rent at the Contract Rate (or the Taxable Rate if then in effect) set forth in the affected Lease for each month or part thereof that Lessee fails to return the Equipment thereunder pursuant to this Section 3.03.

Section 3.04. Conditions to Lessor’s Performance. (a) As a prerequisite to the performance by Lessor of any of its obligations pursuant to any Lease, Lessee shall deliver to Lessor, in form and substance satisfactory to Lessor, the following:
(i) A fully completed Equipment Schedule, executed by Lessee; (ii) If an Escrow Account is to be established with respect to such Lease, an Escrow Agreement substantially in the form attached hereto as Exhibit I, satisfactory to Lessor and executed by Lessee and the Escrow Agent;
(iii) A certified copy of a resolution, ordinance or other official action of Lessee’s governing body, substantially in the form attached hereto as Exhibit C-1A or Exhibit C-1B, as applicable, authorizing the execution and delivery of this Agreement and the applicable Lease and related Escrow Agreement, if any, entered into pursuant hereto and performance by Lessee of its obligations under this Agreement and the applicable Lease and related Escrow Agreement, if any, entered into pursuant hereto; (iv) A Certificate completed and executed by the Clerk or Secretary or other comparable officer of Lessee, substantially in the form attached hereto as Exhibit C-2A or Exhibit C-2B, as applicable, completed to the satisfaction of Lessor; (v) An opinion of counsel to Lessee, substantially in the form attached hereto as Exhibit D, and otherwise satisfactory to Lessor;
(vi) Evidence of insurance as required by Section 7.02 hereof; (vii) All documents, including financing statements, affidavits, notices and similar instruments, which Lessor deems necessary or appropriate at that time pursuant to Section 6.02 hereof;
(viii) A waiver or waivers of interest in the Equipment from any mortgagee or any other party having an interest in the real estate on which the Equipment will be located and/or landlord of the real estate on which the Equipment will be located; (ix) Reserved;
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(x) A copy of the Form 8038-G with respect to the Lease then being entered into, fully completed and executed by Lessee;
(xi) In the event that Lessee is to be reimbursed for expenditures that it has paid more than sixty (60) days prior to the Commencement Date for the Lease then being entered into, evidence of the adoption of a reimbursement resolution or other official action covering the reimbursement from tax exempt proceeds of expenditures incurred not more than sixty (60) days prior to the date of such resolution; (xii) If any items of Equipment are motor vehicles, properly completed certificates of title or certificates of origin (or applications therefor) for such vehicles with Lessor’s interest noted thereon in accordance with the instructions of Lessor; (xiii) Copies of invoices (and proofs of payment of such invoices, if Lessee seeks reimbursement) and bills of sale (if title to Equipment has passed to Lessee), to the extent required by Section 5.01(b) hereof;
(xiv) Wire instructions for payments to be made to Vendors and Form W-9 from each such Vendor; and
(xv) Such other items as are set forth in the related Equipment Schedule or are reasonably required by Lessor.
(b) In addition to satisfaction of the conditions set forth in subsection (a) of this Section 3.04, the performance by Lessor of any of its obligations under the Related Documents shall be subject to: (i) no Material Adverse Change having occurred since the date of this Agreement, (ii) no Event of Default having occurred and then be continuing under any Lease then in effect, (iii) no Event of Non-appropriation under any Lease then in effect having occurred or being threatened, and (iv) no Lease having been terminated as the result of the occurrence of an Event of Default or an Event of Non-appropriation.
(c) Subject to satisfaction of the foregoing, (i) Lessor will pay the Acquisition Amount for Equipment described in an Equipment Schedule to the Vendor or reimburse Lessee for its prior expenditures with respect to such Equipment (subject to satisfaction of Section 3.04(a)(xi) hereof), upon receipt of the documents described in Sections 5.01(a) and (b) hereof; or (ii) if an Escrow Account is being established with respect to the related Lease, Lessor will deposit the Acquisition Amount for Equipment described in the applicable Equipment Schedule with the Escrow Agent to be held and disbursed pursuant to the related Escrow Agreement. (d) This Agreement is not a commitment by Lessor or Lessee to enter into any Lease not currently in existence, and nothing in this Agreement shall be construed to impose any obligation upon Lessor or Lessee to enter into any proposed Lease, it being understood that whether Lessor or Lessee enters into any proposed Lease shall be a decision solely within their respective discretion.

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(e) Lessee will cooperate with Lessor in Lessor’s review of any proposed Lease.

Without limiting the foregoing, Lessee will provide Lessor with any documentation or information Lessor may request in connection with Lessor’s review of any proposed Lease.

Such documentation may include, without limitation, documentation concerning the Equipment and its contemplated use and location and documentation or information concerning the financial status of Lessee and other matters related to Lessee.
(f) In the event of any conflict in terms between an Equipment Schedule and this Agreement, the terms of the Equipment Schedule shall control in the interpretation of the Lease created thereby.

Section 3.05 Evidence of Filing Form 8038-G. As soon as it is available, with respect to each Lease under this Agreement, Lessee shall provide to Lessor evidence that it, or its paid preparer, has filed the Form 8038-G for the applicable Lease with the Internal Revenue Service by delivering to Lessor proof of mailing such Form 8038-G. Notwithstanding anything to the contrary in this Agreement or the applicable Lease, it shall not be an Event of Default hereunder or thereunder if Lessee does not provide to Lessor evidence that it (or its paid preparer) filed the Form 8038-G for the applicable Lease with the Internal Revenue Service.

ARTICLE IV
Section 4.01. Rental Payments. Subject to Section 3.03 of this Agreement, Lessee shall promptly pay Rental Payments, in lawful money of the United States of America, to Lessor on the Rental Payment Dates and in such amounts as provided in each Lease. If any Rental Payment or other amount payable hereunder is not paid within ten (10) days of its due date, Lessee shall pay an administrative late charge of five percent (5%) of the amount not timely paid or the maximum amount permitted by law, whichever is less. Lessee shall not permit the Federal Government to guarantee any Rental Payments under any Lease. Rental Payments consist of principal and interest components as more fully detailed on the Payment Schedule for each Lease, the interest on which begins to accrue as of the Commencement Date for each such Lease.

Section 4.02. Interest and Principal Components. A portion of each Rental Payment is paid as, and represents payment of, interest, and the balance of each Rental Payment is paid as, and represents payment of, principal. Each Lease shall set forth the principal and interest components of each Rental Payment payable thereunder during the applicable Lease Term.

Section 4.03. Rental Payments to Constitute a Current Expense of Lessee. Lessor and Lessee understand and intend that the obligation of Lessee to pay Rental Payments under each Lease shall constitute a current expense of Lessee payable solely from its general fund or other funds that are legally available for that purpose and shall not in any way be construed to be a debt of Lessee in contravention of any applicable constitutional or statutory limitation or requirement concerning the creation of indebtedness by Lessee, nor shall anything contained in City Council/RSA Agenda 215 Tuesday, April 12, 2022
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this Agreement or in any Lease constitute a pledge of the general tax revenues, funds or moneys of Lessee.

Section 4.04. Rental Payments to be Unconditional. Except as provided in Section 3.03 of this Agreement, the obligations of Lessee to make Rental Payments and to perform and observe the other covenants and agreements contained in each Lease shall be absolute and unconditional in all events without abatement, diminution, deduction, set-off or defense, for any reason, including without limitation any failure of the Equipment, disputes with the Lessor or the Vendor of any Equipment, any defects, malfunctions, breakdowns or infirmities in the Equipment or any accident, condemnation or unforeseen circumstances or failure of any Vendor to deliver any Equipment or otherwise perform any of its obligations for whatever reason, including bankruptcy, insolvency, reorganization or any similar event with respect to any Vendor.

Section 4.05 Tax Covenants. Lessee agrees that it will not take any action that would cause the interest component of Rental Payments to be or to become ineligible for the exclusion from gross income of the owner or owners thereof for Federal income tax purposes, nor will it omit to take or cause to be taken, in a timely manner, any action, which omission would cause the interest component of Rental Payments to be or to become ineligible for the exclusion from gross income of the owner or owners thereof for Federal income tax purposes. In connection with the foregoing, Lessee hereby agrees that (a) so long as any Rental Payments under a Lease remain unpaid, moneys on deposit in the Escrow Account under any Escrow Agreement related to such Lease shall not be used in a manner that will cause such Lease to be classified as an “arbitrage bond” within the meaning of Section 148(a) of the Code; and (b) Lessee shall rebate, from funds legally available for the purpose, an amount equal to excess earnings on the Escrow Account under any Escrow Agreement to the Federal Government if required by, and in accordance with, Section 148(f) of the Code, and make the determinations and maintain the records required by the Code.

Section 4.06. Event of Taxability. Upon the occurrence of an Event of Taxability with respect to a Lease, the interest component of Rental Payments under such Lease and any charge on Rental Payments or other amounts payable based on the Contract Rate shall have accrued and be payable at the Taxable Rate applicable to such Lease retroactive to the date as of which the interest component is determined by the Internal Revenue Service to be includible in the gross income of the owner or owners thereof for Federal income tax purposes (which retroactive date for such Lease shall be the earliest date as of which the interest component of any Rental Payment for such Lease is deemed includible in the gross income of the owner or owners thereof for Federal income tax purposes, which may be earlier than the date of delivery of such determination by the Internal Revenue Service), and Lessee will pay such additional amount as will result in the owner receiving the interest component at the Taxable Rate identified in the related Lease.

For purposes of this Section, “Event of Taxability” means the circumstance of the interest component of any Rental Payment paid or payable pursuant to a Lease becoming includible for Federal income tax purposes in an owner’s gross income as a consequence of any act, omission City Council/RSA Agenda 216 Tuesday, April 12, 2022
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or event whatsoever, including but not limited to the matters described in the immediately succeeding sentence, and regardless of whether the same was within or beyond the control of Lessee. An Event of Taxability shall be presumed to have occurred upon (a) the receipt by Lessor or Lessee of an original or a copy of an Internal Revenue Service Technical Advice Memorandum or Statutory Notice of Deficiency or other written correspondence which legally holds that the interest component of any Rental Payment under such Lease is includable in the gross income of the owner thereof; (b) the issuance of any public or private ruling of the Internal Revenue Service that the interest component of any Rental Payment under such Lease is includable in the gross income of the owner thereof; or (c) receipt by Lessor or Lessee of a written opinion of a nationally recognized firm of attorneys experienced in matters pertaining to the tax-exempt status of interest on obligations issued by states and their political subdivisions, selected by Lessor and acceptable to Lessee, to the effect that the interest component of any Rental Payment under a Lease has become includable in the gross income of the owner thereof for Federal income tax purposes. For all purposes of this definition, an Event of Taxability shall be deemed to occur on the date as of which the interest component of any Rental Payment is deemed includable in the gross income of the owner thereof for Federal income tax purposes.

Section 4.07. Mandatory Prepayment. If the Acquisition Amount for a Lease is deposited into an Escrow Account, any funds not applied to Equipment Costs and remaining in such Escrow Account on the earlier of (a) the expiration of the applicable Acquisition Period, (b) the date on which Lessee delivers to the Lessor the executed Disbursement Request to effect the final disbursement to pay (or reimburse) Equipment Costs from such Escrow Account or (c) a termination of the Escrow Account as provided in the Escrow Agreement shall be applied by Lessor on each successive Rental Payment Date thereafter to pay all or a portion of the Rental Payment due and owing in the succeeding twelve (12) months and any remaining amounts shall be applied by Lessor as prepayment to the applicable unpaid Principal Portion of Rental Payments owing under the related Lease in the inverse order of the Rental Payment Dates.

ARTICLE V
Section 5.01. Acquisition, Delivery Installation and Acceptance of Equipment. (a) With respect to each Lease, Lessee shall order the Equipment to be acquired and financed thereunder, cause the Equipment to be delivered and installed at the location specified in such Lease and pay any and all delivery and installation costs and other Equipment Costs in connection therewith.

When the Equipment listed in a Lease has been delivered and installed, Lessee shall promptly accept such Equipment and evidence said acceptance by executing and delivering to Lessor a Final Acceptance Certificate in the form attached hereto as Exhibit E; provided, however, that if an Escrow Account has been established with respect to such Lease as provided in Section 3.04 hereof, Lessee shall execute and deliver Disbursement Requests to the Lessor pursuant to the related Escrow Agreement for the purpose of effecting disbursements from the Escrow Account to pay (or reimburse) Equipment Costs for the Equipment so acquired and installed pursuant to such Lease. In connection with the execution and delivery by Lessee to Lessor of the final Disbursement Request under the applicable Escrow Agreement for a Lease, Lessee shall deliver to Lessor a “Final Acceptance Certificate” in the form attached hereto as Exhibit E.

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(b) (i) With respect to a Lease entered into without an Escrow Agreement, Lessee shall deliver to Lessor copies of invoices (and proof of payment of such invoices if Lessee seeks reimbursement for prior expenditures) and bills of sale (if title to such Equipment has passed to Lessee) relating to each item of Equipment accepted by Lessee. Lessee shall execute and deliver to Lessor an Equipment Schedule pursuant to Section 3.04(a)(i) within 5 business days of receipt from Lessor, subject to satisfaction of the conditions set forth in Section 3.04. (ii) With respect to a Lease entered into with an Escrow Agreement, Lessor shall prepare an Equipment Schedule. In connection with the execution and delivery of the related Escrow Agreement, Lessee shall execute and deliver to Lessor such Equipment Schedule pursuant to Section 3.04(a)(i) within 5 business days of receipt, subject to satisfaction of the conditions set forth in Section 3.04. Lessee shall deliver to Lessor together with each Disbursement Request invoices (and proof of payment of such invoices if Lessee seeks reimbursement for prior expenditures) and bills of sale or other evidence of title transfer to Lessee relating to each item of Equipment accepted by Lessee as evidenced by such Disbursement Request. Once approved, Lessor shall deliver such Disbursement Request to the Escrow Agent for disbursement from the Escrow Account in accordance with the Escrow Agreement.

Section 5.02. Quiet Enjoyment of Equipment. So long as no Event of Default exists under the related Lease, neither Lessor nor any entity claiming by, through or under Lessor, shall interfere with Lessee’s quiet use and enjoyment of the Equipment during the Lease Term under such Lease.

Section 5.03. Location; Inspection. Once installed, no item of the Equipment will be moved or relocated from the location (or the base location with respect to motor vehicles) specified for it in the related Lease without Lessor’s prior written consent, which consent shall not be unreasonably withheld. Lessor shall have the right at all reasonable times during regular business hours to enter into and upon the property where the Equipment is located for the purpose of inspecting the Equipment.

Section 5.04. Use and Maintenance of the Equipment. Lessee shall not install, use, operate or maintain the Equipment (or cause the Equipment to be installed, used, operated or maintained) improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated by the related Lease. Lessee shall provide all permits and licenses, if any, necessary for the installation and operation of the Equipment. In addition, Lessee agrees to comply in all respects with all applicable laws, regulations and rulings of any legislative, executive, administrative or judicial body, including, without limitation, all anti-money laundering laws and regulations; provided that Lessee may contest in good faith the validity or application of any such law, regulation or ruling in any reasonable manner that does not, in the opinion of Lessor, adversely affect the interest of Lessor in and to the Equipment or its interest or rights under the related Lease.

Lessee agrees that it shall maintain, preserve and keep the Equipment in good repair and working order, in a condition comparable to that recommended by the manufacturer. Lessor City Council/RSA Agenda 218 Tuesday, April 12, 2022
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shall have no responsibility to maintain, repair or make improvements or additions to the Equipment. In all cases, Lessee agrees to pay any costs necessary for the manufacturer to re-certify the Equipment as eligible for manufacturer’s maintenance upon the return of the Equipment to Lessor as provided for in Sections 3.03 and 12.02(b) of this Agreement.

Lessee shall not alter any item of Equipment or install any accessory, equipment or device on an item of Equipment if that would impair any applicable warranty, the originally intended function or the value of that Equipment. All repairs, parts, accessories, equipment and devices furnished, affixed to or installed on any Equipment, excluding temporary replacements, shall thereupon become subject to the security interest of Lessor.

ARTICLE VI
Section 6.01. Title to the Equipment. During the Lease Term under each Lease, and so long as Lessee is either not in default under Article XII hereof or an Event of Non-appropriation has not occurred, all right, title and interest in and to each item of the Equipment under the related Lease shall be vested in Lessee immediately upon its acceptance of each item of Equipment, subject to the terms and conditions hereof and under the applicable Lease. Lessee shall at all times protect and defend, at its own cost and expense, its title, and Lessor’s first priority security interest, in and to the Equipment (and Lessor’s other Collateral as defined in Section 6.02 hereof) from and against all claims, liens and legal processes of its creditors, and keep all Equipment (and such other Collateral) free and clear of all such claims, liens and processes. Upon the occurrence of an Event of Default under a Lease or upon termination of a Lease pursuant to Section 3.03 hereof, full and unencumbered legal title to the Equipment shall, at Lessor’s option, pass to Lessor, and Lessee shall have no further interest therein. In addition, upon the occurrence of such an Event of Default or such termination, Lessee shall execute and deliver to Lessor such documents as Lessor may request to evidence the passage of such legal title to Lessor and the termination of Lessee’s interest therein, and upon request by Lessor shall deliver possession of the Equipment to Lessor in accordance with Section 3.03 or 12.02 of this Agreement, as applicable. Upon payment of all amounts due and owing under a Lease by Lessee in accordance with Section 10.01 hereof (including upon payment of all Rental Payments and other amounts payable under such Lease), Lessor’s security interest or other interest in the Equipment under such Lease shall terminate, and Lessor shall execute and deliver to Lessee such documents as Lessee may request to evidence the termination of Lessor’s security interest in the Equipment subject to the related Lease.

Section 6.02. Security Interest. As additional security for the payment and performance of all of Lessee’s obligations under each Lease, upon the execution of such Lease, Lessee hereby grants to Lessor a first priority security interest constituting a first lien on (a) the Equipment subject to such Lease, (b) moneys and investments held from time to time in any related Escrow Account and (c) any and all proceeds of any of the foregoing, including, without limitation, insurance proceeds (collectively, the “Collateral”). Upon the execution of each Lease, Lessee authorizes Lessor to file (and Lessee agrees to execute, if applicable) such notices of assignment, chattel mortgages, financing statements and other documents, in form satisfactory to Lessor, which Lessor deems necessary or appropriate to establish and maintain Lessor’s security interest City Council/RSA Agenda 219 Tuesday, April 12, 2022
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in the Collateral, including, without limitation, such financing statements with respect to personal property and fixtures under Article 9 of the Uniform Commercial Code in effect in the State and treating such Article 9 as applicable to entities such as Lessee.

Section 6.03. Personal Property; No Encumbrances. Lessee agrees that the Equipment is deemed to be and will remain personal property and will not be deemed to be affixed to or a part of the real estate on which it may be situated, notwithstanding that the Equipment or any part thereof may be or hereafter become in any manner physically affixed or attached to real estate or any building thereon. Lessee shall not create, incur, assume or permit to exist any mortgage, pledge, lien, security interest, charge or other encumbrance of any nature whatsoever on any of the real estate where the Equipment under a Lease is or will be located or enter into any agreement to sell or assign or enter into any sale/leaseback arrangement of such real estate without the prior written consent of Lessor; provided, that if Lessor or its assigns is furnished with a waiver of interest in the Equipment under such Lease acceptable to Lessor or its assigns in their respective discretion from any party taking an interest in any such real estate prior to such interest taking effect, such consent shall not be unreasonably withheld.

ARTICLE VII
Section 7.01. Liens, Taxes, Other Governmental Charges and Utility Charges. Lessee shall keep the Equipment under each Lease free of all levies, liens, and encumbrances except those created by such Lease. The parties to this Agreement contemplate that the Equipment under each Lease will be used for a governmental or proprietary purpose of Lessee and that the Equipment will therefore be exempt from all property taxes. If the lease, sale, purchase, operation, use, possession or acquisition of any Equipment is nevertheless determined to be subject to taxation, Lessee shall pay when due all taxes and governmental charges lawfully assessed or levied against or with respect to such Equipment. Lessee shall pay all utility and other charges incurred in the operation, use and maintenance of the Equipment. Lessee shall pay such taxes, assessments or charges as the same may become due; provided that, with respect to any such taxes, assessments or charges that may lawfully be paid in installments over a period of years, Lessee shall be obligated to pay only such installments as accrue during the Lease Term under the affected Lease. During the Lease Term under each Lease, Lessor will not claim ownership of the Equipment thereunder for the purposes of any tax credits, benefits or deductions with respect to such Equipment.

Section 7.02. Insurance. Lessee shall, during the Lease Term under each Lease, maintain or cause to be maintained (a) casualty insurance naming Lessor and its assigns as loss payee and insuring the Equipment against loss or damage by fire and all other risks covered by the standard extended coverage endorsement then in use in the State, and any other risks reasonably required by Lessor, in an amount at least equal to the greater of (i) the then applicable Casualty Value of the Equipment under such Lease or (ii) the replacement cost of such Equipment; (b) liability insurance naming Lessor and its assigns as additional insured that protects Lessor from liability for bodily injury and property damage coverage (i) in such coverage amounts as may be required by Lessor for the applicable Equipment or (ii) in such minimum coverage amounts as may be agreed upon between Lessor and Lessee in connection with the execution and delivery of a City Council/RSA Agenda 220 Tuesday, April 12, 2022
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Lease, and in all events under clauses (a) and (b) issued in form and amount satisfactory to Lessor and by an insurance company that is authorized to do business in the State and having a financial strength rating by A.M. Best Company of “A-” or better; and (c) worker’s compensation coverage as required by the laws of the State. Notwithstanding the foregoing, Lessee may self-insure against the risks described in clauses (a) and/or (b) through a government pooling arrangement, self-funded loss reserves, risk retention program or other self-insurance program, in each case with Lessor’s prior consent (which Lessor may grant, withhold or deny in its sole discretion) and provided that Lessee has delivered to Lessor such information as Lessor may request with respect to the adequacy of such self-insurance to cover the risks proposed to be self-insured and otherwise in form and substance acceptable to Lessor. In the event Lessee is permitted, at Lessor’s sole discretion, to self-insure as provided in this Section 7.02, Lessee shall provide to Lessor a self-insurance letter in substantially the form attached hereto as Exhibit F.

Lessee shall furnish to Lessor evidence of such insurance or self-insurance coverage throughout the Lease Term under each Lease. Lessee shall not cancel or modify such insurance or self-insurance coverage in any way that would affect the interests of Lessor without first giving written notice thereof to Lessor at least thirty (30) days in advance of such cancellation or modification.

Section 7.03. Risk of Loss. Whether or not covered by insurance or self-insurance, Lessee hereby assumes all risk of loss of, or damage to and liability related to injury or damage to any persons or property arising from the Equipment under any Lease from any cause whatsoever, and no such loss of or damage to or liability arising from the Equipment under any Lease shall relieve Lessee of the obligation to make the Rental Payments or to perform any other obligation under any Lease. Whether or not covered by insurance or self-insurance, Lessee hereby agrees to reimburse Lessor (to the fullest extent permitted by applicable law, but only from legally available funds) for any and all liabilities, obligations, losses, costs, claims, taxes or damages suffered or incurred by Lessor, regardless of the cause thereof and all expenses incurred in connection therewith (including, without limitation, counsel fees and expenses, and penalties connected therewith imposed on interest received) arising out of or as a result of (a) entering into this Agreement or any Lease or any of the transactions contemplated hereby or thereby, (b) the ordering, acquisition, ownership, use, operation, condition, purchase, delivery, acceptance, rejection, storage or return of any item of the Equipment under any Lease, (c) any accident in connection with the operation, use, condition, possession, storage or return of any item of the Equipment under any Lease resulting in damage to property or injury to or death to any person, and/or (d) the breach of any covenant of Lessee under or in connection with this Agreement or any Lease or any material misrepresentation provided by Lessee under or in connection with this Agreement or any Lease. The provisions of this Section 7.03 shall continue in full force and effect notwithstanding the full payment of all obligations under any or all Leases or the termination of the Lease Term under any or all Leases for any reason.

Section 7.04. Advances. In the event Lessee shall fail to keep the Equipment in good repair and working order or shall fail to maintain any insurance required by Section 7.02 hereof, Lessor may, but shall be under no obligation to, maintain and repair the Equipment or obtain and maintain any such insurance coverages, as the case may be, and pay the cost thereof. All City Council/RSA Agenda 221 Tuesday, April 12, 2022
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amounts so advanced by Lessor shall constitute additional rent for the then current Original Term or Renewal Term under the affected Lease, and Lessee covenants and agrees to pay such amounts so advanced by Lessor with interest thereon from the due date until paid at a rate equal to the Contract Rate (or the Taxable Rate if then in effect) plus five percent (5%) per annum or the maximum amount permitted by law, whichever is less.

ARTICLE VIII
Section 8.01. Damage, Destruction and Condemnation. If, prior to the termination of the Lease Term under the related Lease, (a) the Equipment or any portion thereof is destroyed, in whole or in part, or is damaged by fire or other casualty or (b) title to, or the temporary use of, the Equipment or any part thereof shall be taken under the exercise or threat of the power of eminent domain by any governmental body or by any person, firm or corporation acting pursuant to governmental authority, (i) Lessee and Lessor will cause the Net Proceeds of any insurance claim or condemnation award or sale under threat of condemnation to be applied to the prompt replacement, repair, restoration, modification or improvement of the Equipment or such part thereof and any balance of the Net Proceeds remaining after such work has been completed shall be paid to Lessee or (ii) Lessee shall exercise its option to prepay the obligations under the affected Lease in accordance with Section 10.01(b) hereof.

If Lessee elects to replace any item of the Equipment (the “Replaced Equipment”) pursuant to this Section 8.01, the replacement equipment (the “Replacement Equipment”) shall be new or of a quality type, utility and condition at least as good as the Replaced Equipment and shall be of equal or greater value than the Replaced Equipment as determined and approved by Lessor in its sole discretion. Lessee shall grant to Lessor a first priority security interest in any such Replacement Equipment. Lessee shall represent, warrant and covenant to Lessor that each item of Replacement Equipment is free and clear of all claims, liens, security interests and encumbrances, excepting only those liens created by or through Lessor, and shall provide to Lessor any and all documents as Lessor may reasonably request in connection with the replacement, including, but not limited to, documentation in form and substance satisfactory to Lessor evidencing Lessor’s security interest in the Replacement Equipment. Lessor and Lessee hereby acknowledge and agree that any Replacement Equipment acquired pursuant to this paragraph shall constitute “Equipment” for purposes of this Agreement and the related Lease.

Lessee shall complete the documentation of Replacement Equipment on or before the next Rental Payment Date after the occurrence of a casualty event, or be required to prepay the obligations under the related Lease with respect to the damaged Equipment for an amount that shall be determined and approved by Lessor in its sole discretion.

For purposes of this Article VIII, the term “Net Proceeds” shall mean the amount remaining from the gross proceeds of any insurance claim or condemnation award or sale under threat of condemnation after deducting all expenses, including attorneys’ fees, incurred in the collection thereof.

Section 8.02. Insufficiency of Net Proceeds. If the Net Proceeds are insufficient to pay in full the cost of any repair, restoration, modification or improvement referred to in Section 8.01, City Council/RSA Agenda 222 Tuesday, April 12, 2022
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Lessee shall either (a) complete such replacement, repair, restoration, modification or improvement and pay any costs thereof in excess of the amount of the Net Proceeds, or (b) pay or cause to be paid to Lessor the amount of the then applicable Casualty Value under the related Lease plus all other amounts then owing thereunder, and, upon such payment, the applicable Lease Term shall terminate and Lessor’s security interest in the Equipment shall terminate as provided in Section 6.01 hereof. The amount of the Net Proceeds remaining, if any, after completing such repair, restoration, modification or improvement or after paying such Casualty Value for such Lease plus all other amounts then owing thereunder shall be retained by Lessee.

If Lessee shall make any payments pursuant to this Section 8.02, Lessee shall not be entitled to any reimbursement therefor from Lessor nor shall Lessee be entitled to any diminution of the amounts payable under Article IV.

ARTICLE IX
Section 9.01. Disclaimer of Warranties. Lessor makes no warranty or representation, either express or implied, as to the value, design, condition, merchantability or fitness for particular purpose or fitness for use of any of the Equipment under each Lease, or any other warranty or representation, express or implied, with respect thereto and, as to Lessor, Lessee’s acquisition of the Equipment under each Lease shall be on an “as is” basis. In no event shall Lessor be liable for any incidental, indirect, special or consequential damage in connection with or arising out of this Agreement, any Lease, any Equipment or the existence, furnishing, functioning or Lessee’s use of any item, product or service provided for in this Agreement or any Lease.

Section 9.02. Vendor Agreements; Warranties. Lessee covenants that it shall not in any material respect amend, modify, rescind or alter any Vendor Agreement for any Lease without the prior written consent of Lessor. Lessor hereby irrevocably appoints Lessee its agent and attorney-in-fact during the Lease Term under each Lease, so long as Lessee shall not be in default under such Lease, to assert from time to time whatever claims and rights (including without limitation warranties) relating to the Equipment that Lessor may have against a Vendor.

Lessee’s sole remedy for the breach of such warranty, indemnification or representation shall be against the applicable Vendor of the Equipment and not against Lessor. Any such matter shall not have any effect whatsoever on the rights and obligations of Lessor with respect to any Lease, including the right to receive full and timely Rental Payments and other payments under each Lease. Lessee expressly acknowledges that Lessor makes, and has made, no representations or warranties whatsoever as to the existence or the availability of such warranties relating to any of the Equipment under each Lease.

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ARTICLE X
Section 10.01. Prepayment; Payment in Full.
(a) Prepayment. Lessee shall have the option to prepay or satisfy all, but not less than all, of its obligations under a Lease, at the following times and upon the following terms:
(i) Optional Prepayment. From and after the date specified (if any) in the applicable Payment Schedule (the “Prepayment Option Commencement Date”), on the Rental Payment Dates specified in such Payment Schedule, upon not less than thirty (30) days prior written notice, and upon payment in full of the sum of all Rental Payments then due under the related Lease plus the then applicable Prepayment Price, which may include a prepayment premium on the unpaid Outstanding Balance as set forth in such Payment Schedule plus all other amounts then owing thereunder; or (ii) Casualty or Condemnation Prepayment. In the event of substantial damage to or destruction or condemnation of substantially all of the Equipment listed in a Lease, on the day specified in Lessee’s notice to Lessor of its exercise of the prepayment option (which shall be the earlier of the next Rental Payment Date or sixty (60) days after the casualty event) upon payment in full to Lessor of (A) in the event such prepayment occurs on a Rental Payment Date, the sum of (i) all Rental Payments then due under such Lease plus (ii) the then applicable Casualty Value for such Lease plus (iii) all other amounts then owing thereunder OR, (B) in the event such prepayment for such Lease occurs on a date other than a Rental Payment Date, the sum of (i) the applicable Casualty Value shown on the Payment Schedule for such Lease for the Rental Payment Date immediately preceding the applicable date of such prepayment (or if the date of such prepayment occurs prior to the first Rental Payment Date for such Lease, the earliest Casualty Value shown on the related Payment Schedule) plus (ii) accrued interest at the Contract Rate (or the Taxable Rate if then in effect) on the Outstanding Balance as of the Rental Payment Date immediately preceding the applicable date of such prepayment from such Rental Payment Date (or if the date of such prepayment occurs prior to the first Rental Payment Date, the Commencement Date for such Lease) to the date of such prepayment plus (iii) all other amounts then owing thereunder. (b) Payment in Full. Upon the expiration of the Lease Term under a Lease, the payment in full of all Rental Payments then due and all other amounts then owing under such Lease by Lessee to Lessor.
(c) Lessor’s security interests in and to the related Equipment under such Lease will be terminated and Lessee will own such Equipment free and clear of Lessor’s security interest in such Equipment after either (i) payment of either (A) the applicable Prepayment Price and all other amounts then owing under a Lease in accordance with Section 10.01(a)(i) of this Agreement or (B) the applicable Casualty Value and all other amounts then owing under a Lease in accordance with Section 10.01(a)(ii) of this Agreement or (ii) upon the expiration of the Lease City Council/RSA Agenda 224 Tuesday, April 12, 2022
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Term of a Lease and payment in full of all Rental Payments then due and all other amounts then owing thereunder in accordance with Section 10.01(b) of this Agreement.

ARTICLE XI
Section 11.01. Assignment by Lessor. (a) Lessor’s right, title and interest in and to the Rental Payments and any other amounts payable by Lessee under any and all of the Leases and the Escrow Agreement relating to any Lease, its security interest in the Equipment subject to the related Lease and in any related Escrow Account, and all proceeds therefrom (collectively, with respect to each Lease and related Escrow Agreement, the “Related Assigned Rights”), may be assigned and reassigned by Lessor at any time, in whole or in part, to one or more assignees or sub-assignees without the necessity of obtaining the consent of Lessee; provided, that any such assignment, transfer or conveyance (i) shall be made only to investors each of whom Lessor reasonably believes is a “qualified institutional buyer” as defined in Rule 144A(a)(1) promulgated under the Securities Act of 1933, as amended, or an “accredited investor” as defined in Section 501(a)(1), (2), (3) or (7) of Regulation D promulgated under the Securities Act of 1933, as amended, and in either case is purchasing the Related Assigned Rights (or any interest therein) for its own account with no present intention to resell or distribute such Related Assigned Rights (or interest therein), subject to each investor’s right at any time to dispose of the Related Assigned Rights (or any interest therein) as it determines to be in its best interests, (ii) shall not result in more than 35 owners of the Related Assigned Rights with respect to a Lease or the creation of any interest in the Related Assigned Rights with respect to a Lease in an aggregate principal component that is less than $100,000 and (iii) shall not require Lessee to make Rental Payments, to send notices or otherwise to deal with respect to matters arising under the Related Assigned Rights with respect to a Lease with or to more than one Lease Servicer (as such term is defined below), and any trust agreement, participation agreement or custodial agreement under which multiple ownership interests in the Related Assigned Rights with respect to a Lease are created shall provide the method by which the owners of such interests shall establish the rights and duties of a single entity, trustee, owner, servicer or other fiduciary or agent acting on behalf of all of the assignees (herein referred to as the “Lease Servicer”) to act on their behalf with respect to the Related Assigned Rights with respect to a Lease, including with respect to the exercise of rights and remedies of Lessor on behalf of such owners upon the occurrence of an Event of Default or an Event of Non-appropriation under the related Lease.

Lessor and Lessee hereby acknowledge and agree that the restrictions and limitations on transfer as provided in this Section 11.01 shall apply to the first and subsequent assignees and sub-assignees of any of the Related Assigned Rights with respect to a Lease (or any interest therein).
(b) Unless to an affiliate controlling, controlled by or under common control with Lessor, no assignment, transfer or conveyance permitted by this Section 11.01 shall be effective as against Lessee until Lessee shall have received a written notice of assignment that discloses the name and address of each such assignee; provided, that if such assignment is made to a bank or trust company as trustee or paying agent for owners of certificates of participation, participation interests, trust certificates or partnership interests with respect to the Rental Payments payable under a Lease, it shall thereafter be sufficient that Lessee receives notice of City Council/RSA Agenda 225 Tuesday, April 12, 2022
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the name and address of the bank, trust company or other entity that acts as the Lease Servicer for such Lease. Notices of assignment provided pursuant to this Section 11.01(b) shall contain a confirmation of compliance with the transfer requirements imposed by Section 11.01(a) hereof.

During the Lease Term under each Lease, Lessee shall keep, or cause to be kept, a complete and accurate record of all such assignments in form necessary to comply with Section 149 of the Code. Lessee shall retain all such notices as a register of all assignees and shall make all payments to the assignee or assignees or Lease Servicer last designated in such register. Lessee shall not have the right to and shall not assert against any assignee any claim, counterclaim or other right Lessee may have against Lessor or any Vendor. Assignments in part may include, without limitation, assignment of all of Lessor’s security interest in and to the Equipment listed in a particular Lease and all rights in, to and under the Lease related to such Equipment and all of Lessor’s security interest in and to the related Escrow Account, or all rights in, to and under the related Escrow Agreement.
(c) If Lessor notifies Lessee of its intent to assign a Lease, Lessee agrees that it shall execute and deliver to Lessor a Notice and Acknowledgement of Assignment with respect to such Lease, substantially in the form of Exhibit H attached hereto, within five (5) business days after its receipt of such request.

Section 11.02. Assignment and Subleasing by Lessee. None of Lessee’s right, title and interest in, to and under this Agreement, any Lease or any portion of the Equipment, any Escrow Agreement or the Escrow Account related thereto may be assigned, encumbered or subleased by Lessee for any reason, and any purported assignment, encumbrance or sublease without Lessor’s prior written consent shall be null and void.

ARTICLE XII
Section 12.01. Events of Default Defined. Any of the following events shall constitute an “Event of Default” under a Lease:
(a) Failure by Lessee to (i) pay any Rental Payment or other payment required to be paid under any Lease within ten (10) days of the date when due as specified therein, (ii) maintain insurance as required under such Lease (including Section 7.02 of this Agreement, which is incorporated therein), or (iii) observe and perform any covenant, condition or agreement on its part to be observed or performed under Section 6.01 or 6.02 hereof for any Lease;
(b) Failure by Lessee to observe and perform any covenant, condition or agreement contained in this Agreement or any Lease on its part to be observed or performed, other than as referred to in subsection (a) above, for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied is given to Lessee by Lessor, unless Lessor shall agree in writing to an extension of such time prior to its expiration; provided that, if the failure stated in the notice cannot be corrected within the applicable period, Lessor will not unreasonably withhold its consent City Council/RSA Agenda 226 Tuesday, April 12, 2022
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to an extension of such time if corrective action is instituted by Lessee within the applicable period and diligently pursued until the default is corrected; (c) Any statement, representation or warranty made by Lessee in or pursuant to this Agreement or any Lease or its execution, delivery or performance shall prove to have been false, incorrect, misleading or breached in any material respect on the date when made;
(d) Any default occurs under any other agreement for borrowing money, lease financing of property or otherwise receiving credit under which Lessee is an obligor, if such default (i) arises under any other agreement for borrowing money, lease financing of property or provision of credit provided by Lessor or any affiliate of Lessor (including, without limitation, the occurrence of any Event of Default under any other Lease), or (ii) arises under any obligation under which there is outstanding, owing or committed an aggregated amount in excess of $100,000.00;
(e) Lessee shall (i) apply for or consent to the appointment of a receiver, trustee, custodian or liquidator of Lessee, or of all or a substantial part of the assets of Lessee, (ii) be unable, fail or admit in writing its inability generally to pay its debts as they become due, (iii) make a general assignment for the benefit of creditors, (iv) have an order for relief entered against it under applicable Federal bankruptcy law, or (v) file a voluntary petition in bankruptcy or a petition or an answer seeking reorganization or an arrangement with creditors or taking advantage of any insolvency law or any answer admitting the material allegations of a petition filed against Lessee in any bankruptcy, reorganization, moratorium or insolvency proceeding; or (f) An order, judgment or decree shall be entered by any court of competent jurisdiction, approving a petition or appointing a receiver, trustee, custodian or liquidator for Lessee or of all or a substantial part of the assets of Lessee, in each case without its application, approval or consent, and such order, judgment or decree shall continue unstayed and in effect for any period of thirty (30) consecutive days.

Section 12.02. Remedies on Default. Whenever any Event of Default exists under any Lease, Lessor shall have the right, at its sole option without any further demand or notice, to take one or any combination of the following remedial steps with respect to any or all Leases with an Event of Default under this Agreement, including those with an Event of Default pursuant to Section 12.01(d) (each a “Defaulted Lease”):
(a) By written notice to Lessee, Lessor may declare all Rental Payments payable by Lessee pursuant to one or more Defaulted Leases and other amounts payable by Lessee under each such Defaulted Lease to the end of the then current Original Term or Renewal Term to be immediately due and payable;
(b) With or without terminating the Lease Term under any one or more Defaulted Leases, Lessor may enter the premises where the Equipment listed in any one City Council/RSA Agenda 227 Tuesday, April 12, 2022
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or more of each such Defaulted Leases is located and retake possession of such Equipment or require Lessee at Lessee’s expense to promptly return any or all of such Equipment to the possession of Lessor at such place within the United States as Lessor shall specify, and sell or lease such Equipment or, for the account of Lessee, sublease such Equipment, continuing to hold Lessee liable, but solely from legally available funds, for the difference between (i) the Rental Payments payable by Lessee pursuant to each such Defaulted Lease and other amounts related to each such Defaulted Lease that are payable by Lessee to the end of the then current Original Term or Renewal Term, as the case may be, and (ii) the net proceeds of any such sale, leasing or subleasing (after deducting all expenses of Lessor in exercising its remedies under each such Defaulted Lease, including without limitation all expenses of taking possession, storing, reconditioning and selling or leasing such Equipment and all brokerage, auctioneer’s and attorney’s fees), subject, however, to the provisions of Section 3.03 of this Agreement.

The exercise of any such remedies respecting any such Event of Default under any such Defaulted Lease shall not relieve Lessee of any other liabilities under each such Defaulted Lease or any other Lease that Lessor determines not to treat as a Defaulted Lease or with respect to the Equipment listed therein;
(c) Lessor may terminate the Escrow Agreement relating to any one or more of such Defaulted Leases and apply any proceeds in each such applicable Escrow Account thereunder to the Rental Payments scheduled to be paid under any one or more of such Defaulted Leases as Lessor shall determine; and/or (d) Lessor may take whatever action at law or in equity as may appear necessary or desirable to enforce its rights under any one or more of such Defaulted Leases or each such Escrow Agreement relating thereto or as a secured party in any or all of the Equipment subject to any one or more of such Defaulted Leases or with respect to the related Escrow Account for one or more of such Defaulted Leases.

Section 12.03. No Remedy Exclusive. No remedy herein conferred upon or reserved to Lessor is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder and/or under any Lease now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right or power may be exercised from time to time and as often as may be deemed expedient. In order to entitle Lessor to exercise any remedy reserved to it in this Article XII it shall not be necessary to give any notice other than such notice as may be required in this Article XII.

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Section 12.04. Application of Moneys. Any net proceeds from the exercise of any remedy under this Agreement, including the application specified in Section 12.02(b)(ii) (after deducting all expenses of Lessor in exercising such remedies including without limitation all expenses of taking possession, storing, reconditioning and selling or leasing Equipment and all brokerage, auctioneer’s or attorney’s fees), shall be applied as follows:
(a) If such remedy is exercised solely with respect to a single Defaulted Lease, Equipment listed in such Defaulted Lease or rights thereunder, then to amounts due pursuant to such Defaulted Lease and to other amounts related to such Defaulted Lease or such Equipment.
(b) If such remedy is exercised with respect to more than one Defaulted Lease, Equipment listed in more than one Defaulted Lease or rights under more than one Defaulted Lease, then to amounts due pursuant to one or more of such Defaulted Leases as Lessor shall determine and distribute on a pro rata basis or on such other basis as Lessor shall determine.

ARTICLE XIII
Section 13.01. Notices. All notices, certificates or other communications under this Agreement or any Lease shall be sufficiently given and shall be deemed given when delivered or mailed by registered mail, postage prepaid, or delivered by overnight courier, or sent by facsimile transmission (with electronic confirmation) to the parties hereto at the addresses immediately after the signatures to this Agreement (or at such other address as either party hereto shall designate in writing to the other for notices to such party) and to any assignee at its address as it appears on the registration books maintained by Lessee.

Section 13.02. Binding Effect. This Agreement and each Lease shall inure to the benefit of and shall be binding upon Lessor and Lessee and their respective successors and assigns.

Section 13.03. Severability. In the event any provision of this Agreement or any Lease shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof or thereof.

Section 13.04. Amendments, Changes and Modifications. This Agreement and each Lease may only be amended by Lessor and Lessee in writing.

Section 13.05. Execution in Counterparts. This Agreement and each Lease may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument; provided that only Counterpart No. 1 of each Lease (including the terms and provisions of this Agreement incorporated therein by reference) shall constitute chattel paper for purposes of the applicable Uniform Commercial Code.

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Section 13.06. Applicable Law; Venue; Waiver of Jury Trial. This Agreement and each Lease shall be governed by and construed in accordance with the laws of the State. The parties hereto consent and submit to the jurisdiction of the State and venue in any state or Federal court of such State for the purposes of any suit, action or other proceeding arising in connection with this Agreement or any Lease, and each party expressly waives any objections that it may have to the venue of such courts. The parties hereto expressly waive any right to trial by jury in any action brought on or with respect to this Agreement or any Lease.

Section 13.07. Captions. The captions or headings in this Agreement and in each Lease are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Agreement or any Lease.

Section 13.08. No Advisory or Fiduciary Relationship. In connection with all aspects of each transaction contemplated by this Agreement and each Lease thereunder (including in connection with any amendment, waiver or other modification hereof or of any other related document), the Lessee acknowledges and agrees that: (a) (i) the transactions regarding this Agreement and each Lease thereunder provided by the Lessor and any affiliate thereof are arm’slength commercial transactions between the Lessee, on the one hand, and the Lessor and its affiliates, on the other hand, (ii) the Lessee has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (iii) the Lessee is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated by this Agreement and each Lease thereunder and by the other related documents; (b) (i) the Lessor and its affiliates each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary, for the Lessee, or any other person and (ii) neither the Lessor nor any of its affiliates has any obligation to the Lessee with respect to the transactions contemplated by this Agreement and each Lease thereunder except those obligations expressly set forth herein and in the other related documents; and (c) the Lessor and its affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Lessee, and neither the Lessor nor any of its affiliates has any obligation to disclose any of such interests to the Lessee. To the fullest extent permitted by law, the Lessee, hereby waives and releases any claims that it may have against the Lessor or any of its affiliates with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transactions contemplated by this Agreement and each Lease thereunder.

Section 13.09. Entire Agreement. The parties agree that this Agreement and each Lease hereunder constitutes the final and entire agreement between the parties superseding all conflicting terms or provisions of any prior proposals, term sheets, solicitation documents, requests for proposals, award notices, approval letters or any other agreements or understandings between the parties.

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[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGE FOLLOWS]
City Council/RSA Agenda 231 Tuesday, April 12, 2022
IN WITNESS WHEREOF, Lessor and Lessee have caused this Master Equipment Lease/Purchase Agreement to be executed in their names by their duly authorized representatives as of the date first above written.

LESSOR: LESSEE:

Banc of America Public Capital Corp _____________________________________ 11333 McCormick Road
Hunt Valley II _____________________________________
M/C MD5-032-07-05
Hunt Valley, MD 21031 Attention: ____________________________ Attention: Contract Administration Fax No.: _____________________________ Fax No.: (443) 541-3057
By:_________________________________ By: _________________________________ Name: ___________________________ Name: ___________________________ Title: ____________________________ Title: ____________________________ Signature Page of Master Equipment Lease/Purchase Agreement City Council/RSA Agenda 232 Tuesday, April 12, 2022

LIST OF EXHIBITS
Exhibit A-1 Form of Equipment Schedule – General Equipment Exhibit A-2 Form of Equipment Schedule – Energy Services Equipment Exhibit B Form of Payment Schedule
Exhibit C-1A Form of Authorizing Resolution (Agreement) Exhibit C-1B Form of Authorizing Resolution (Lease)
Exhibit C-2A Form of Incumbency and Authorization Certificate (Agreement) Exhibit C-2B Form of Incumbency and Authorization Certificate (Lease) Exhibit D Form of Opinion of Counsel to Lessee
Exhibit E Form of Final Acceptance Certificate
Exhibit F Form of Self-Insurance Certificate
Exhibit G Reserved
Exhibit H Form of Notice and Acknowledgement of Assignment Exhibit I Form of Escrow and Account Control Agreement
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EXHIBIT A-1
FORM OF EQUIPMENT SCHEDULE NO. ______ - GENERAL EQUIPMENT Re: Master Equipment Lease/Purchase Agreement, dated as of ____________, between Banc of America Public Capital Corp, a Kansas corporation, as Lessor, and _______________________, as Lessee

1. Defined Terms. All terms used herein have the meanings ascribed to them in the above-referenced Master Equipment Lease/Purchase Agreement (the “Agreement”).

2. Equipment. For purposes of the Lease created hereby, the following items of Equipment are hereby included under this Equipment Schedule together with all attachments, additions, accessions, parts, repairs, improvements, replacements and substitutions thereto as provided in the Agreement.

QUANTITY DESCRIPTION SERIAL NO. MODEL NO. LOCATION

3. Payment Schedule.
(a) Rental Payments; Commencement Date. The Rental Payments shall be in such amounts and payable on such Rental Payment Dates as set forth in the Payment Schedule attached to this Equipment Schedule and incorporated herein by this reference, subject to adjustment upon the occurrence of an Event of Taxability as provided in Section 4.06 of the Agreement. Lessee’s obligation to pay Rental Payments under the Lease created hereby shall commence on the earlier of (i) the date on which the Equipment listed in this Equipment Schedule is accepted by Lessee in the manner described in Section 5.01 of the Agreement, as evidenced by the Final Acceptance Certificate executed by Lessee and substantially in the form of Exhibit E attached to the Agreement, or (ii) the date on which the Acquisition Amount is deposited in an Escrow Account for the purpose of acquiring and installing the Equipment listed in this Equipment Schedule pursuant to Section 3.04(c) of the Agreement (the earlier of such two dates being herein referred to as the “Commencement Date”). (b) Prepayment Price Schedule. The Prepayment Price on each Rental Payment Date shall be the amount set forth for such Rental Payment Date in the “Prepayment Price” column of City Council/RSA Agenda 234 Tuesday, April 12, 2022
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the Payment Schedule attached to this Equipment Schedule plus all Rental Payments then due (including the Rental Payment due on such Rental Payment Date) plus all other amounts then owing under this Equipment Schedule.

4. Representations, Warranties and Covenants. Lessee hereby represents, warrants and covenants that its representations, warranties and covenants set forth in the Agreement (particularly Section 2.01 thereof) are true and correct as though made on the Commencement Date. Lessee further represents and warrants that (a) no Material Adverse Change has occurred since the dated date of the Agreement; (b) no Event of Default has occurred and is continuing under any Lease currently in effect; (c) no Event of Non-appropriation under any Lease currently in effect has occurred or is threatened; (d) no Lease has been terminated as the result of the occurrence of an Event of Default or an Event of Non-appropriation; (e) the governing body of Lessee has authorized the execution and delivery of the Agreement and this Equipment Schedule; (f) the Equipment listed in this Equipment Schedule is essential to the functions of Lessee or to the services Lessee provides its citizens; (g) Lessee has an immediate need for, and expects to make immediate use of, substantially all such Equipment, which will be used by Lessee only for the purpose of performing one or more of Lessee’s governmental or proprietary functions consistent with the permissible scope of its authority; and (h) Lessee expects and anticipates adequate funds to be available for all future payments or rent due after the current budgetary period.

5. The Lease. The terms and provisions of the Agreement (other than to the extent that they relate solely to other Equipment Schedules or Equipment listed on other Equipment Schedules) are hereby incorporated into this Equipment Schedule by reference and made a part hereof.
[OPTION: IF ESCROW AGREEMENT IS USED:

6. Acquisition Amount. The Acquisition Amount that Lessor shall pay to the Escrow Agent for deposit into the Escrow Account in connection with this Equipment Schedule is $____________. It is expected that by [six (6)] [twelve (12)] [eighteen (18)] months from the date of this Equipment Schedule No. ______, Lessee will have taken possession of all items of Equipment shown above and that the Lessee’s final Disbursement Request pursuant to the Escrow Agreement will be signed by Lessee, approved by Lessor and delivered to the Escrow Agent on or before [six (6)] [twelve (12)] [eighteen (18)] months from the date of this Equipment Schedule.

OR IF VENDOR PAID DIRECTLY USE:

6. Acquisition Amount. The Acquisition Amount for the Equipment listed in this Equipment Schedule to be paid to the Vendor (or reimbursed to Lessee) is $ _____________________.]
City Council/RSA Agenda 235 Tuesday, April 12, 2022
4 MELPA BAPCC
January 2020
[OPTION: IF ESCROW AGREEMENT IS USED:

7. Acquisition Period. The Acquisition Period applicable to this Equipment Schedule shall end at the conclusion of the ____ month following the date hereof.] [OPTION: IF ESCROW AGREEMENT IS USED AND A SURETY BOND IS REQUIRED:
[8.] Surety Bonds; Lessee to Pursue Remedies Against Contractors and SubContractors and Their Sureties. Lessee shall secure from each Vendor directly employed by Lessee in connection with the acquisition, construction, installation, improvement or equipping of the Equipment listed in this Equipment Schedule, a payment and performance bond (“Surety Bond”) executed by a surety company authorized to do business in the State, having a financial strength rating by A.M. Best Company of “A-” or better, and otherwise satisfactory to Lessor and naming Lessor as a co-obligee in a sum equal to the entire amount to become payable under each Vendor Agreement. Each bond shall be conditioned on the completion of the work in accordance with the plans and specifications for the Equipment listed in this Equipment Schedule and upon payment of all claims of subcontractors and suppliers. Lessee shall cause the surety company to add Lessor as a co-obligee on each Surety Bond, and shall deliver a certified copy of each Surety Bond to Lessor promptly upon receipt thereof by Lessee. Any proceeds from a Surety Bond shall be applied in accordance with such Surety Bond to the payment and performance of the Vendor’s obligations in accordance with the related Vendor Agreement and, if for whatever reason such proceeds are not so applied, first to amounts due Lessor under this Equipment Schedule, and any remaining amounts shall be payable to Lessee.

In the event of a material default of any Vendor under any Vendor Agreement in connection with the acquisition, construction, maintenance and/or servicing of the Equipment listed in this Equipment Schedule or in the event of a material breach of warranty with respect to any material workmanship or performance guaranty with respect to such Equipment, Lessee will promptly proceed to exhaust its remedies against the Vendor in default. Lessee shall advise Lessor of the steps it intends to take in connection with any such default. Any amounts received by Lessee in respect of damages, refunds, adjustments or otherwise in connection with the foregoing shall be paid to Lessor and applied against Lessee’s obligations under this Equipment Schedule.

As a prerequisite to the performance by Lessor of any of its obligations under this Equipment Schedule, Lessee shall deliver to Lessor, in form and substance satisfactory to Lessor, a certified copy of each Surety Bond satisfying the conditions set forth in this Section ___, or, at Lessor’s sole discretion, such Surety Bonds may be provided after the Commencement Date of this Equipment Schedule, provided however, that no “Disbursement Request” pursuant to the Escrow Agreement for this Equipment Schedule shall be authorized by Lessor until such Surety Bonds satisfying the conditions set forth in this Section _________have been delivered to Lessor. [7][8][9].Lease Term. The Lease Term shall consist of the Original Term and ____ consecutive Renewal Terms, with the final Renewal Term ending on ____________, subject to earlier termination pursuant to the Agreement.

City Council/RSA Agenda 236 Tuesday, April 12, 2022
5 MELPA BAPCC
January 2020
[OPTION: IF MOTOR VEHICLES ARE BEING FINANCED:
[8][9][10]. Registration. Any Equipment that is a motor vehicle is to be registered and titled as follows:
(a) Registered Owner: [____________________]
(b) Lienholder: Banc of America Public Capital Corp
Bank of America Plaza
600 Peachtree Street NE, 11th Floor
Atlanta, GA 30308-2265
Lessee shall be responsible for the correct titling of all Equipment leased hereunder. Lessee will cause the original Certificates of Title to be delivered to Lessor for retention in Lessor’s files throughout the Lease Term of the Lease created hereby.

Dated: _________________
LESSOR: LESSEE:

Banc of America Public Capital Corp ____________________________________ 11333 McCormick Road ____________________________________ Hunt Valley II ____________________________________
M/C MD5-032-07-05 Attention: ____________________________ Hunt Valley, MD 21031
Attention: Contract Administration
Fax No.: (443) 541-3057
By:_________________________________ By: _________________________________ Name: ___________________________ Name: ___________________________ Title: ____________________________ Title: ____________________________ Counterpart No. _____ of _____ manually executed and serially numbered counterparts.

To the extent that the Lease created hereby constitutes chattel paper (as defined in the applicable Uniform Commercial Code), no security or ownership interest herein may be created through the transfer or possession of any Counterpart other than Counterpart No. 1.

City Council/RSA Agenda 237 Tuesday, April 12, 2022
A-1
EXHIBIT A-2
FORM OF EQUIPMENT SCHEDULE NO. ______ - ENERGY SERVICES EQUIPMENT Re: Master Equipment Lease/Purchase Agreement, dated as of ____________, between Banc of America Public Capital Corp, a Kansas corporation, as Lessor, and _______________________, as Lessee

1. Defined Terms. All terms used herein have the meanings ascribed to them in the above-referenced Master Equipment Lease/Purchase Agreement (the “Agreement”).

2. Equipment.
(a) Location of Equipment: For purposes of the Lease created hereby, the location of Equipment is set forth below:
(b) Equipment Description (Scope of Work): For purposes of the Lease created hereby, the description of the Equipment and the scope of work is set forth below:

3. Payment Schedule.
(a) Rental Payments; Commencement Date. The Rental Payments shall be in such amounts and payable on such Rental Payment Dates as set forth in the Payment Schedule attached to this Equipment Schedule and incorporated herein by this reference, subject to adjustment upon the occurrence of an Event of Taxability as provided in Section 4.06 of the Agreement. Lessee’s obligation to pay Rental Payments under the Lease created hereby shall commence on the earlier of (i) the date on which the Equipment listed in this Equipment Schedule is accepted by Lessee in the manner described in Section 5.01 of the Agreement, as evidenced by the Final Acceptance Certificate executed by Lessee and substantially in the form of Exhibit E attached to the Agreement, or (ii) the date on which the Acquisition Amount is deposited in an Escrow Account for the purpose of acquiring and installing the Equipment listed in this Equipment Schedule pursuant to Section 3.04(c) of the Agreement (the earlier of such two dates being herein referred to as the “Commencement Date”). (b) Prepayment Price Schedule. The Prepayment Price on each Rental Payment Date shall be the amount set forth for such Rental Payment Date in the “Prepayment Price” column of the Payment Schedule attached to this Equipment Schedule plus all Rental Payments then due (including the Rental Payment due on such Rental Payment Date) plus all other amounts then owing under this Equipment Schedule.

City Council/RSA Agenda 238 Tuesday, April 12, 2022
A-2

4. Representations, Warranties and Covenants. Lessee hereby represents, warrants and covenants that its representations, warranties and covenants set forth in the Agreement (particularly Section 2.01 thereof) are true and correct as though made on the Commencement Date. Lessee further represents and warrants that (a) no Material Adverse Change has occurred since the dated date of the Agreement; (b) no Event of Default has occurred and is continuing under any Lease currently in effect; (c) no Event of Non-appropriation under any Lease currently in effect has occurred or is threatened; (d) no Lease has been terminated as the result of the occurrence of an Event of Default or an Event of Non-appropriation; (e) the governing body of Lessee has authorized the execution and delivery of the Agreement and this Equipment Schedule; (f) the Equipment listed in this Equipment Schedule is essential to the functions of Lessee or to the services Lessee provides its citizens; (g) Lessee has an immediate need for, and expects to make immediate use of, substantially all such Equipment, which will be used by Lessee only for the purpose of performing one or more of Lessee’s governmental or proprietary functions consistent with the permissible scope of its authority; and (h) Lessee expects and anticipates adequate funds to be available for all future payments or rent due after the current budgetary period.

5. The Lease. The terms and provisions of the Agreement (other than to the extent that they relate solely to other Equipment Schedules or Equipment listed on other Equipment Schedules) are hereby incorporated into this Equipment Schedule by reference and made a part hereof.

6. Acquisition Amount. The Acquisition Amount that Lessor shall pay to the Escrow Agent for deposit into the Escrow Account in connection with this Equipment Schedule is $____________. It is expected that by [six (6)] [twelve (12)] [eighteen (18)] months from the date of this Equipment Schedule No. ______, Lessee will have taken possession of all items of Equipment shown above and that the Lessee’s final Disbursement Request pursuant to the Escrow Agreement will be signed by Lessee, approved by Lessor and delivered to the Escrow Agent on or before [six (6)] [twelve (12)] [eighteen (18)] months from the date of this Equipment Schedule.

7. Acquisition Period. The Acquisition Period applicable to this Equipment Schedule shall end at the conclusion of the ____ month following the date hereof.

8. Additional Representation Regarding the Use and Maintenance of the Equipment; Additional Representation Regarding Damage, Destruction and Condemnation. (a) Lessee agrees that it shall (a) proceed promptly, at its expense, to protect its rights and exercise its remedies under any warranty then in effect with respect to the Equipment under this Equipment Schedule; and (b) replace or rebuild any component of the Equipment under this Equipment Schedule that becomes permanently unfit for normal use or inoperable during the Lease Term of this Equipment Schedule (herein, the “Inoperable Component”) in order to keep the Equipment as a whole in good repair and working order during the Lease Term of this Equipment Schedule. Lessee shall promptly notify Lessor in writing when any component of the Equipment under this Equipment Schedule is reasonably expected within forty-five (45) days to City Council/RSA Agenda 239 Tuesday, April 12, 2022
A-3
become an Inoperable Component. Lessee shall promptly replace or rebuild the Inoperable Component under this Equipment Schedule with a similar component of comparable or improved make and model that has at least the equivalent value and utility of the applicable Inoperable Component, a remaining useful life of no less than the remaining Lease Term under this Equipment Schedule and such replacement or rebuilt component shall be in good operating condition.
(b) If Lessee elects to replace any item of the Equipment with Replacement Equipment pursuant to Section 8.01 of the Agreement, in addition to the other requirements set forth in Section 8.01, the Replacement Equipment shall also provide at least the same level of energy and/or operational savings expected in the aggregate from the Replaced Equipment prior to such casualty, destruction or condemnation.

9. Liability Insurance. Lessee shall, during the Lease Term under this Equipment Schedule, maintain or cause to be maintained liability insurance naming Lessor and its assigns as additional insured that protects Lessor from liability with limits of at least $5,000,000 per occurrence for bodily injury and property damage coverage (such liability insurance coverage may be in a combination of primary general liability and/or excess liability umbrella coverage).

10. Surety Bonds; Lessee to Pursue Remedies Against Contractors and SubContractors and Their Sureties. Lessee shall secure from each Vendor directly employed by Lessee in connection with the acquisition, construction, installation, improvement or equipping of the Equipment listed in this Equipment Schedule, a payment and performance bond (“Surety Bond”) executed by a surety company authorized to do business in the State, having a financial strength rating by A.M. Best Company of “A-” or better, and otherwise satisfactory to Lessor and naming Lessor as a co-obligee in a sum equal to the entire amount to become payable under each Vendor Agreement. Each bond shall be conditioned on the completion of the work in accordance with the plans and specifications for the Equipment listed in this Equipment Schedule and upon payment of all claims of subcontractors and suppliers. Lessee shall cause the surety company to add Lessor as a co-obligee on each Surety Bond, and shall deliver a certified copy of each Surety Bond to Lessor promptly upon receipt thereof by Lessee. Any proceeds from a Surety Bond shall be applied in accordance with such Surety Bond to the payment and performance of the Vendor’s obligations in accordance with the related Vendor Agreement and, if for whatever reason such proceeds are not so applied, first to amounts due Lessor under this Equipment Schedule, and any remaining amounts shall be payable to Lessee.

In the event of a material default of any Vendor under any Vendor Agreement in connection with the acquisition, construction, maintenance and/or servicing of the Equipment listed in this Equipment Schedule or in the event of a material breach of warranty with respect to any material workmanship or performance guaranty with respect to such Equipment, Lessee will promptly proceed to exhaust its remedies against the Vendor in default. Lessee shall advise Lessor of the steps it intends to take in connection with any such default. Any amounts received by Lessee in respect of damages, refunds, adjustments or otherwise in connection with the foregoing shall be paid to Lessor and applied against Lessee’s obligations under this Equipment Schedule.

City Council/RSA Agenda 240 Tuesday, April 12, 2022
A-4
As a prerequisite to the performance by Lessor of any of its obligations under this Equipment Schedule, Lessee shall deliver to Lessor, in form and substance satisfactory to Lessor, a certified copy of each Surety Bond satisfying the conditions set forth in this Section ___, or, at Lessor’s sole discretion, such Surety Bonds may be provided after the Commencement Date of this Equipment Schedule, provided however, that no “Disbursement Request” pursuant to the Escrow Agreement for this Equipment Schedule shall be authorized by Lessor until such Surety Bonds satisfying the conditions set forth in this Section _________have been delivered to Lessor.

11. Lease Term. The Lease Term shall consist of the Original Term and ____ consecutive Renewal Terms, with the final Renewal Term ending on ____________, subject to earlier termination pursuant to the Agreement.

Dated: _________________
LESSOR: LESSEE:

Banc of America Public Capital Corp ____________________________________ 11333 McCormick Road ____________________________________ Hunt Valley II ____________________________________
M/C MD5-032-07-05 Attention: ____________________________ Hunt Valley, MD 21031
Attention: Contract Administration
Fax No.: (443) 541-3057
By:_________________________________ By: _________________________________ Name: ___________________________ Name: ___________________________ Title: ____________________________ Title: ____________________________ Counterpart No. _____ of _____ manually executed and serially numbered counterparts.

To the extent that the Lease created hereby constitutes chattel paper (as defined in the applicable Uniform Commercial Code), no security or ownership interest herein may be created through the transfer or possession of any Counterpart other than Counterpart No. 1.

City Council/RSA Agenda 241 Tuesday, April 12, 2022

EXHIBIT B

FORM OF PAYMENT SCHEDULE
RENTAL

PAYMENT
DATE
RENTAL

PAYMENT
AMOUNT

INTEREST

PORTION

PRINCIPAL

PORTION

OUTSTANDING

BALANCE

PREPAYMENT
PRICE
[including
prepayment
premium; if
applicable]

CASUALTY
VALUE
[including
casualty
premium; if
applicable]
Contract Rate; Taxable Rate. The Contract Rate for this Equipment Schedule is _________% per annum. The Taxable Rate for this Equipment Schedule is _________% per annum.

Prepayment Option Commencement Date. For purposes of Section 10.01 of the Agreement, the Prepayment Option Commencement Date for this Equipment Schedule is _______________.

LESSOR: LESSEE:

Banc of America Public Capital Corp [_______________________] By: ___________________ By: ___________________
Name: Name:

Title: Title:

City Council/RSA Agenda 242 Tuesday, April 12, 2022
EXHIBIT C-1A

FORM OF AUTHORIZING RESOLUTION (AGREEMENT)
A RESOLUTION OF THE GOVERNING BODY OF __________________,

AUTHORIZING THE EXECUTION AND DELIVERY OF A MASTER

EQUIPMENT LEASE/PURCHASE AGREEMENT AND SEPARATE

EQUIPMENT SCHEDULES THERETO FOR THE ACQUISITION,

FINANCING AND LEASING OF CERTAIN EQUIPMENT FOR THE PUBLIC BENEFIT WITHIN THE TERMS HEREIN PROVIDED; AUTHORIZING THE

EXECUTION AND DELIVERY OF OTHER DOCUMENTS REQUIRED IN
CONNECTION THEREWITH; AND AUTHORIZING THE TAKING OF ALL

OTHER ACTIONS NECESSARY TO THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED BY THIS RESOLUTION.

WHEREAS, __________________ (the “Lessee”), a [city] [county] [school district] [special district] [body corporate and politic] duly organized and existing as a political subdivision, municipal corporation or similar public entity of the State/Commonwealth of _________, is authorized by the laws of the State/Commonwealth of _________ to acquire, finance and lease personal property (tangible and intangible) for the benefit of the Lessee and its inhabitants and to enter into contracts with respect thereto; and WHEREAS, the governing body of the Lessee (the “Board”) has determined that a need exists for the acquisition, financing and leasing of certain equipment consisting of ___________________, which constitutes personal property necessary for the Lessee to perform essential governmental functions (collectively, the “Equipment”) on the terms herein provided; and
WHEREAS, in order to acquire such Equipment, the Lessee proposes to enter into that certain Master Equipment Lease/Purchase Agreement (the “Agreement”) with Banc of America Public Capital Corp (or one of its affiliates), as lessor (the “Lessor”), substantially in the proposed form presented to the Board at this meeting, and separate Equipment Schedules thereto substantially in the form attached to the Agreement; and WHEREAS, the Board deems it for the benefit of the Lessee and for the efficient and effective administration thereof to enter into the Agreement and separate Equipment Schedules thereunder and the other documentation relating thereto from time to time as provided in the Agreement for the acquisition, financing and leasing of the Equipment to be therein described on the terms and conditions therein and herein provided;
NOW, THEREFORE, BE IT AND IT IS HEREBY RESOLVED by the governing body of the Lessee as follows:

City Council/RSA Agenda 243 Tuesday, April 12, 2022
Section 1. Findings and Determinations. It is hereby found and determined that the terms of the Agreement (including the form of Equipment Schedule and the form of Payment Schedule, both attached thereto), in the form presented to the Board at this meeting, are in the best interests of the Lessee for the acquisition financing and leasing of the Equipment.

Section 2. Approval of Documents. The form, terms and provisions of the Agreement (including the form of Equipment Schedule and the form of Payment Schedule, both attached thereto) are hereby approved in substantially the forms presented at this meeting, with such insertions, omissions and changes as shall be approved by __________________ [insert title of officials] of the Lessee or other members of the governing body of the Lessee (the “Authorized Officials”) executing the same, the execution of such documents being conclusive evidence of such approval; and the _________________________ of the Lessee is hereby authorized and directed to execute, and the ________________ of the Lessee is hereby authorized and directed to attest, the Agreement and any related Exhibits attached thereto and to deliver the Agreement (including such Exhibits) to the respective parties thereto, and the ________________________ of the Lessee is hereby authorized to affix the seal of the Lessee to such documents. The Authorized Officials are each hereby authorized and directed to sign and deliver on behalf of the Lessee the Agreement, each Equipment Schedule thereto under which a separate Lease (as defined in the Agreement) is created, each Payment Schedule attached thereto, any related Escrow Agreement and any related exhibits attached thereto if and when required; provided, however, that, without further authorization from the governing body of the Lessee, (a) the aggregate principal component of Rental Payments under all Leases entered into pursuant to the Agreement shall not exceed $____________; (b) the maximum term under any Lease entered into pursuant to the Agreement shall not exceed [_________________] years; and (c) the maximum interest rate used to determine the interest component of Rental Payments under each Lease shall not exceed the lesser of the maximum rate permitted by law or [__________ percent (___%)] per annum. The Authorized Officials may sign and deliver Leases to the Lessor on behalf of the Lessee pursuant to the Agreement on such terms and conditions as they shall determine are in the best interests of the Lessee up to the maximum aggregate principal component, maximum term and maximum interest rate provided above. The foregoing authorization shall remain in effect for a period of [two] years from the date hereof during which the Authorized Officials are authorized to sign and deliver Leases pursuant to the Agreement on the terms and conditions herein provided and to be provided in each such Lease.

Section 3. Other Actions Authorized. The officers and employees of the Lessee shall take all action necessary or reasonably required by the parties to the Agreement to carry out, give effect to and consummate the transactions contemplated thereby (including the execution and delivery of Final Acceptance Certificates, Escrow Agreements, Disbursement Requests and any tax certificate and agreement, as contemplated in the Agreement) and to take all action necessary in conformity therewith, including, without limitation, the execution and delivery of any closing and other documents required to be delivered in connection with the Agreement and each Lease.

Section 4. No General Liability. Nothing contained in this Resolution, the Agreement, any Lease, any Escrow Agreement nor any other instrument shall be construed with respect to the Lessee as incurring a pecuniary liability or charge upon the general credit of the Lessee or against its taxing power, nor shall the breach of any agreement contained in this Resolution, the City Council/RSA Agenda 244 Tuesday, April 12, 2022
Agreement, any Lease, any Escrow Agreement or any other instrument or document executed in connection therewith impose any pecuniary liability upon the Lessee or any charge upon its general credit or against its taxing power, except to the extent that the Rental Payments payable under each Lease entered into pursuant to the Agreement are limited obligations of the Lessee, subject to annual appropriation, as provided in the Agreement.

Section 5. Appointment of Authorized Lessee Representatives. The ___________ _____________________ and __________________________ of the Lessee are each hereby designated to act as authorized representatives of the Lessee for purposes of each Lease and related Escrow Agreement until such time as the governing body of the Lessee shall designate any other or different authorized representative for purposes of the Agreement and any Lease or Escrow Agreement.

Section 6. Severability. If any section, paragraph, clause or provision of this Resolution shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this Resolution.

Section 7. Repealer. All bylaws, orders and resolutions or parts thereof, inconsistent herewith, are hereby repealed to the extent only of such inconsistency with respect to this Resolution. This repealer shall not be construed as reviving any bylaw, order, resolution or ordinance or part thereof.

Section 8. Effective Date. This Resolution shall be effective immediately upon its approval and adoption.

ADOPTED AND APPROVED by the governing body of the Lessee this ________ day of _________.
[_________],
as lessee
[SEAL]
By:____________________________________
Printed Name: ___________________________
Title: __________________________________
ATTEST:

By:_________________________________
Printed: Name: _______________________
Title: _______________________________
City Council/RSA Agenda 245 Tuesday, April 12, 2022
The undersigned, a duly elected or appointed and acting __________________ [Secretary] [City Clerk] [County Clerk] of the Lessee identified in the above Resolution No. ___ (the “Resolution”), hereby certifies that the Resolution is a full, true and correct copy of such Resolution as adopted by the governing body of the Lessee on ____________, 20__. The Resolution is in full force and effect on the date hereof and has not been amended, modified or otherwise changed by the governing body of the Lessee since the date of adoption of the Resolution.

DATED this ____ day of ____________, 20__.
_______________________________________
Name:_________________________________
Title:__________________________________
City Council/RSA Agenda 246 Tuesday, April 12, 2022
EXHIBIT C-1B

FORM OF AUTHORIZING RESOLUTION (LEASE)
A RESOLUTION OF THE GOVERNING BODY OF __________________,

AUTHORIZING THE EXECUTION AND DELIVERY OF AN EQUIPMENT

SCHEDULE TO THE MASTER EQUIPMENT LEASE/PURCHASE

AGREEMENT FOR THE ACQUISITION, FINANCING AND LEASING OF

CERTAIN EQUIPMENT FOR THE PUBLIC BENEFIT WITHIN THE TERMS PROVIDED HEREIN; AUTHORIZING THE EXECUTION AND DELIVERY OF OTHER DOCUMENTS REQUIRED IN CONNECTION THEREWITH; AND

AUTHORIZING THE TAKING OF ALL OTHER ACTIONS NECESSARY TO

THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY
THIS RESOLUTION.

WHEREAS, __________________ (the “Lessee”), a [city] [county] [school district] [special district] [body corporate and politic] duly organized and existing as a political subdivision, municipal corporation or similar public entity of the State/Commonwealth of _________, is authorized by the laws of the State/Commonwealth of _________ to acquire, finance and lease personal property (tangible and intangible) for the benefit of the Lessee and its inhabitants and to enter into contracts with respect thereto; and WHEREAS, the governing body of the Lessee (the “Board”) has determined that a need exists for the acquisition, financing and leasing of certain equipment with a cost not to exceed $_____________ and consisting of ___________________, which constitutes personal property necessary for the Lessee to perform essential governmental functions (collectively, the “Equipment”) on the terms herein provided; and
WHEREAS, in order to acquire such Equipment, the Lessee proposes to enter into that certain Equipment Schedule (the “Equipment Schedule”) with Banc of America Public Capital Corp (or one of its affiliates), as lessor (the “Lessor”), substantially in the proposed form presented to the Board at this meeting, which Equipment Schedule incorporates by reference the terms and provisions of that certain Master Equipment Lease/Purchase Agreement dated as of ____________ by and between Lessor and Lessee (the “Agreement”); and WHEREAS, the Board deems it for the benefit of the Lessee and for the efficient and effective administration thereof to enter into the Equipment Schedule and the other documentation relating to the acquisition, financing and leasing of the Equipment to be therein described on the terms and conditions therein and herein provided; NOW, THEREFORE, BE IT AND IT IS HEREBY RESOLVED by the governing body of the Lessee as follows:

City Council/RSA Agenda 247 Tuesday, April 12, 2022
Section 1. Findings and Determinations. It is hereby found and determined that the terms of the Equipment Schedule and the form of Payment Schedule, in the form presented to the Board at this meeting, are in the best interests of the Lessee for the acquisition financing and leasing of the Equipment.

Section 2. Approval of Documents. The form, terms and provisions of the Equipment Schedule and Payment Schedule are hereby approved in substantially the forms presented at this meeting, with such insertions, omissions and changes as shall be approved by __________________ [insert title of officials] ] of the Lessee or other members of the governing body of the Lessee (the “Authorized Officials”) executing the same, the execution of such documents being conclusive evidence of such approval. The Authorized Officials are each hereby authorized and directed to sign and deliver on behalf of the Lessee the Equipment Schedule under which a separate Lease (as defined in the Agreement) is created, the Payment Schedule attached thereto, the Escrow Agreement and any related exhibits attached thereto.

Section 3. Other Actions Authorized. The officers and employees of the Lessee shall take all action necessary or reasonably required by the parties to the Lease to carry out, give effect to and consummate the transactions contemplated thereby (including the execution and delivery of a Final Acceptance Certificate, the Escrow Agreement, Disbursement Requests and any tax certificate and agreement, as contemplated in the Agreement) and to take all action necessary in conformity therewith, including, without limitation, the execution and delivery of any closing and other documents required to be delivered in connection with the Lease.

Section 4. No General Liability. Nothing contained in this Resolution, the Lease, the Escrow Agreement nor any other instrument shall be construed with respect to the Lessee as incurring a pecuniary liability or charge upon the general credit of the Lessee or against its taxing power, nor shall the breach of any agreement contained in this Resolution, the Lease, the Escrow Agreement or any other instrument or document executed in connection therewith impose any pecuniary liability upon the Lessee or any charge upon its general credit or against its taxing power, except to the extent that the Rental Payments payable under the Lease entered into pursuant to the Agreement are limited obligations of the Lessee, subject to annual appropriation, as provided in the Agreement.

Section 5. Appointment of Authorized Lessee Representatives. The ___________ _____________________ and __________________________ of the Lessee are each hereby designated to act as authorized representatives of the Lessee for purposes of the Lease and the Escrow Agreement until such time as the governing body of the Lessee shall designate any other or different authorized representative for purposes of the Lease or the Escrow Agreement.

Section 6. Severability. If any section, paragraph, clause or provision of this Resolution shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this Resolution.

Section 7. Repealer. All bylaws, orders and resolutions or parts thereof, inconsistent herewith, are hereby repealed to the extent only of such inconsistency with respect to this City Council/RSA Agenda 248 Tuesday, April 12, 2022
Resolution. This repealer shall not be construed as reviving any bylaw, order, resolution or ordinance or part thereof.

Section 8. Effective Date. This Resolution shall be effective immediately upon its approval and adoption.

ADOPTED AND APPROVED by the governing body of the Lessee this ________ day of _________.
[_________],
as lessee
[SEAL]
By:____________________________________
Printed Name: ___________________________
Title: __________________________________
ATTEST:

By:_________________________________
Printed: Name: _______________________
Title: _______________________________
City Council/RSA Agenda 249 Tuesday, April 12, 2022
The undersigned, a duly elected or appointed and acting __________________ [Secretary] [City Clerk] [County Clerk] of the Lessee identified in the above Resolution No. ___ (the “Resolution”), hereby certifies that the Resolution is a full, true and correct copy of such Resolution as adopted by the governing body of the Lessee on ____________, 20__. The Resolution is in full force and effect on the date hereof and has not been amended, modified or otherwise changed by the governing body of the Lessee since the date of adoption of the Resolution.

DATED this ____ day of ____________, 20__.
_______________________________________
Name:_________________________________
Title:__________________________________
City Council/RSA Agenda 250 Tuesday, April 12, 2022
EXHIBIT C-2A

FORM OF INCUMBENCY AND AUTHORIZATION CERTIFICATE (AGREEMENT) The undersigned, a duly elected or appointed and acting __________________ [Secretary] [City Clerk] [County Clerk] of ___________________________ (“Lessee”) certifies as follows:

A. The following listed persons are duly elected or appointed and acting officials of Lessee (the “Officials”) in the capacity set forth opposite their respective names below and the facsimile signatures below are true and correct as of the date hereof; and B. THE OFFICIALS ARE DULY AUTHORIZED, ON BEHALF OF LESSEE, TO NEGOTIATE,

EXECUTE AND DELIVER THE MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT DATED AS OF ____________________ (THE “AGREEMENT”) AND SEPARATE EQUIPMENT SCHEDULES RELATING THERETO FROM TIME TO TIME AS PROVIDED IN THE AGREEMENT (COLLECTIVELY, THE “EQUIPMENT SCHEDULES”), EACH BY AND BETWEEN LESSEE AND BANC OF AMERICA PUBLIC CAPITAL CORP (“LESSOR”), [THE ESCROW AND ACCOUNT CONTROL AGREEMENT DATED AS OF _________ BY AND AMONG LESSOR, LESSEE AND ___________ AS ESCROW AGENT,] ALL DOCUMENTS RELATED

THERETO AND DELIVERED IN CONNECTION THEREWITH, AND ANY FUTURE MODIFICATION(S) OR AMENDMENTS THEREOF (COLLECTIVELY, THE “OPERATIVE AGREEMENTS”), AND THE OPERATIVE

AGREEMENTS EACH ARE THE BINDING AND AUTHORIZED AGREEMENTS OF LESSEE, ENFORCEABLE IN ALL RESPECTS IN ACCORDANCE WITH THEIR RESPECTIVE TERMS.

Name of Official Title Signature
__________________ _________________ _____________________ __________________ _________________ _____________________ __________________ _________________ _____________________ DATED: ______________________ BY: ______________________________ NAME: _____________________________
TITLE: ______________________________
(THE SIGNER OF THIS CERTIFICATE CANNOT BE LISTED ABOVE AS AUTHORIZED TO EXECUTE THE OPERATIVE AGREEMENTS.)
City Council/RSA Agenda 251 Tuesday, April 12, 2022
EXHIBIT C-2B

FORM OF INCUMBENCY AND AUTHORIZATION CERTIFICATE (LEASE) The undersigned, a duly elected or appointed and acting __________________ [Secretary] [City Clerk] [County Clerk] of ___________________________ (“Lessee”) certifies as follows:

A. The following listed persons are duly elected or appointed and acting officials of Lessee (the “Officials”) in the capacity set forth opposite their respective names below and the facsimile signatures below are true and correct as of the date hereof; and B. THE OFFICIALS ARE DULY AUTHORIZED, ON BEHALF OF LESSEE, TO NEGOTIATE, EXECUTE AND DELIVER THE EQUIPMENT SCHEDULE NO. ___ DATED AS OF _________(THE “EQUIPMENT SCHEDULE”), WHICH INCORPORATES BY REFERENCE THE TERMS AND PROVISIONS OF THE MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT DATED AS OF ____________________ (THE “AGREEMENT”), EACH BY AND BETWEEN LESSEE AND BANC OF AMERICA PUBLIC CAPITAL CORP (“LESSOR”), [THE ESCROW AND ACCOUNT CONTROL AGREEMENT DATED AS OF _________ BY AND AMONG LESSOR, LESSEE ___________ AS ESCROW AGENT,] AND ALL DOCUMENTS

RELATED THERETO AND DELIVERED IN CONNECTION THEREWITH, AND ANY FUTURE MODIFICATION(S) OR AMENDMENTS THEREOF (COLLECTIVELY, THE “OPERATIVE AGREEMENTS”),

AND THE OPERATIVE AGREEMENTS EACH ARE THE BINDING AND AUTHORIZED AGREEMENTS OF LESSEE, ENFORCEABLE IN ALL RESPECTS IN ACCORDANCE WITH THEIR RESPECTIVE TERMS.

Name of Official Title Signature
__________________ _________________ _____________________ __________________ _________________ _____________________ __________________ _________________ _____________________ DATED: ______________________ BY: ______________________________ NAME: _____________________________
TITLE: ______________________________
(THE SIGNER OF THIS CERTIFICATE CANNOT BE LISTED ABOVE AS AUTHORIZED TO EXECUTE THE OPERATIVE AGREEMENTS.)
City Council/RSA Agenda 252 Tuesday, April 12, 2022
1 EXHIBIT D

FORM OF OPINION OF COUNSEL TO LESSEE
(to be typed on letterhead of counsel)
Banc of America Public Capital Corp
11333 McCormick Road
Hunt Valley II
M/C MD5-032-07-05
Hunt Valley, MD 21031
Attention: Contract Administration
Re: Equipment Schedule No. ______, dated ______________, to Master Equipment Lease/Purchase Agreement, dated as of ______________, by and between Banc of America Public Capital Corp, as Lessor, and ________________________, as Lessee
Ladies and Gentlemen:

As legal counsel to ________________ (“Lessee”), I have examined (a) an executed counterpart of that certain Master Equipment Lease/Purchase Agreement, dated as of ____________________ (the “Agreement”) and Exhibits thereto, by and between Banc of America Public Capital Corp, as lessor (“Lessor”), and Lessee; (b) an executed counterpart of Equipment Schedule No. ______, dated ____________, by and between Lessor and Lessee, which incorporates by reference the terms and provisions of the Agreement (such Equipment Schedule No. ______ together with such incorporated terms and provisions are herein referred to collectively as the “Equipment Schedule”), has attached the Payment Schedule with respect thereto (the “Payment Schedule”) executed by Lessee, and provides for the lease of certain property listed in the Equipment Schedule (the “Equipment”); (c) an executed counterpart of that certain Escrow and Account Control Agreement dated as of ____________ (the “Escrow Agreement”), by and among Lessor, Lessee and _____________, as Escrow Agent; (d) an executed counterpart of the ordinances or resolutions of Lessee with respect to authorization of the transaction contemplated by the Agreement, the Equipment Schedule, the Escrow Agreement and documents related thereto; and (e) such other opinions, documents and matters of law as I have deemed necessary in connection with the following opinions. The Agreement, the Equipment Schedule, including the terms and provisions of the Agreement incorporated therein by reference, the related Payment Schedule, the Escrow Agreement and the documents relating thereto are herein collectively referred to as the “Transaction Documents”.

Based on the foregoing, I am of the following opinions:

1. Lessee is a [city] [county] [school district] [special district] [body corporate and politic], duly organized and existing under the laws of the State, and is a political subdivision of the State within the meaning of Section 103(c) of the Internal Revenue Code of 1986, as amended (the “Code”) and the obligations of Lessee under the City Council/RSA Agenda 253 Tuesday, April 12, 2022
Lease will constitute an obligation of Lessee within the meaning of Section 103(a) of the Code, notwithstanding Section 103(b) of the Code.

2. Lessee has the requisite power and authority to lease and acquire the Equipment and to execute and deliver the Transaction Documents and to perform its obligations under the Transaction Documents.

3. The Transaction Documents have been duly authorized, approved, executed and delivered by and on behalf of Lessee and the Transaction Documents are legal, valid and binding obligations of Lessee, enforceable against Lessee in accordance with their respective terms, except to the extent limited by State and Federal law affecting creditor’s remedies and by bankruptcy, reorganization, moratorium or other laws of general application relating to or affecting the enforcement of creditors’ rights.

4. The authorization, approval, execution and delivery of the Transaction Documents and all other proceedings of Lessee relating to the transactions contemplated thereby have been performed in accordance with all open meeting laws, procurement and public bidding laws and all other applicable State or Federal laws.

5. There is no proceeding pending or threatened in any court or before any governmental authority or arbitration board or tribunal that, if adversely determined, would adversely affect the transactions contemplated by the Transaction Documents or the security interest of Lessor or its assigns, as the case may be, in the Equipment under the Lease, the Escrow Account or other Collateral thereunder. [6. The portion of Rental Payments designated as interest is excluded from Lessor’s gross income for Federal income tax purposes under Section 103 of the Code and is exempt from State of _______________ personal income taxes; and such interest is not a specific item of tax preference for purposes of the Federal alternative minimum tax.1]
[6. The portion of Rental Payments designated as interest or constituting or accruing as original issue discount is excluded from Lessor’s gross income for Federal income tax purposes under Section 103 of the Code and is exempt from State of _______________ personal income taxes; and such interest and original issue discount are not a specific item of tax preference for purposes of the Federal alternative minimum tax.2]
1 Please use this provision if the opinion of counsel will include a tax opinion. 2 Please use this provision if the opinion of counsel will include a tax opinion and there is OID.

City Council/RSA Agenda 254 Tuesday, April 12, 2022
All capitalized terms herein shall have the same meanings as in the Transaction Documents, unless otherwise provided herein. Lessor and its successors and assigns[, and any counsel rendering an opinion on the tax-exempt status of the Rental Payments,3] are entitled to rely on this opinion.

Printed Name: ________________________ Signature: ______________________________ Firm: _______________________________ Dated: _________________________________ Address: ____________________________
Telephone No.: _______________________
3 Please use this provision if bond counsel will be providing a separate tax opinion.

City Council/RSA Agenda 255 Tuesday, April 12, 2022

EXHIBIT E

FORM OF FINAL ACCEPTANCE CERTIFICATE
Banc of America Public Capital Corp
11333 McCormick Road
Hunt Valley II
M/C MD5-032-07-05
Hunt Valley, MD 21031
Attention: Contract Administration
Re: Equipment Schedule No. ______, dated ______________, to Master Equipment Lease/Purchase Agreement, dated as of ______________, by and between Banc of America Public Capital Corp, as Lessor, and ________________________, as Lessee
Ladies and Gentlemen:

In accordance with the above-referenced Master Equipment Lease/Purchase Agreement (the “Agreement”), the undersigned Lessee hereby certifies and represents to, and agrees with, Lessor as follows:

1. All of the Equipment listed in the above-referenced Equipment Schedule (the “Equipment Schedule”) has been delivered, installed and accepted on the date hereof.

2. Lessee has conducted such inspection and/or testing of the Equipment listed in the Equipment Schedule as it deems necessary and appropriate and hereby acknowledges that it accepts the Equipment for all purposes.

3. Lessee is currently maintaining the insurance coverage required by Section 7.02 of the Agreement.

4. Lessee hereby reaffirms that the representations, warranties and covenants contained in the Agreement and incorporated into the Equipment Schedule by reference are true and correct as of the date hereof.

5. (a) No event or condition that constitutes, or with notice or lapse of time, or both, would constitute, an Event of Default exists at the date hereof under any Lease currently in effect; (b) no Material Adverse Change has occurred since the date of the execution and delivery of the Agreement; (c) no Event of Non-appropriation under any Lease currently in effect has occurred or been threatened; and (d) no Lease has been terminated as the result of the occurrence of an Event of Default or an Event of Non-appropriation.

City Council/RSA Agenda 256 Tuesday, April 12, 2022
Capitalized terms used, but not defined, in this Final Acceptance Certificate shall have the same meanings as when such terms are used in the Agreement.

Date: _________________
LESSEE:
______________________________________
By:____________________________________
Name: ______________________________
Title: _______________________________
City Council/RSA Agenda 257 Tuesday, April 12, 2022

EXHIBIT F

FORM OF SELF-INSURANCE CERTIFICATE
Banc of America Public Capital Corp
11333 McCormick Road
Hunt Valley II
M/C MD5-032-07-05
Hunt Valley, MD 21031
Attention: Contract Administration
Re: Equipment Schedule No. ______, dated ____________, to Master Equipment Lease/Purchase Agreement, dated as of ____________, by and between Banc of America Public Capital Corp, as Lessor, and ________________________, as Lessee
In connection with the above-referenced Equipment Schedule (the “Equipment Schedule”), ____________________________ (the “Lessee”) hereby warrants and represents to Banc of America Public Capital Corp the following information. The terms capitalized herein but not defined herein shall have the meanings assigned to them in the above-referenced Master Equipment Lease/Purchase Agreement (the “Agreement”) incorporated into the Equipment Schedule by reference.

1. The Lessee is self-insured for damage or destruction to the Equipment listed in the Equipment Schedule (herein, the “Equipment”). The dollar amount limit for property damage to the Equipment under such self-insurance program is $_________________. [The Lessee maintains an umbrella insurance policy for claims in excess of Lessee’s self-insurance limits for property damage to the Equipment which policy has a dollar limit for property damage to the Equipment under such policy of $__________________.]

2. The Lessee is self-insured for liability for injury or death of any person or damage or loss of property arising out of or relating to the condition or operation of the Equipment. The dollar limit for such liability claims under the Lessee’s self-insurance program is $_________________. [The Lessee maintains an umbrella insurance policy for claims in excess of Lessee’s self-insurance limits for liability which policy has a dollar limit for liabilities for injury and death to persons as well as damage or loss of property arising out of or relating to the condition or operation of the Equipment in the amount of $_________________. [3]. The Lessee maintains a self-insurance fund. Monies in the self-insurance fund [are/are not] subject to annual appropriation. The total amount maintained in the self-insurance fund to cover Lessee’s self-insurance liabilities is $_________________. [Amounts paid from the Lessee’s self-insurance fund are subject to a dollar per claim of $__________________.] City Council/RSA Agenda 258 Tuesday, April 12, 2022
[3]. The Lessee does not maintain a self-insurance fund. The Lessee obtains funds to pay claims for which it has self-insured from the following sources: ______________________.

Amounts payable for claims from such sources are limited as follows: _________________ __________________________________.

4. Attached hereto are copies of certificates of insurance with respect to policies maintained by Lessee.

LESSEE:
_______________________________________
By:____________________________________
Name: ______________________________
Title: _______________________________
City Council/RSA Agenda 259 Tuesday, April 12, 2022

EXHIBIT G

RESERVED
City Council/RSA Agenda 260 Tuesday, April 12, 2022

EXHIBIT H

FORM OF NOTICE AND ACKNOWLEDGEMENT OF ASSIGNMENT
Dated ____________________
BANC OF AMERICA PUBLIC CAPITAL CORP (“Assignor”) hereby gives notice that, as of _________, 20__, it has assigned and sold to _________________________ (“Assignee”) all of Assignor’s right, title and interest in, to and under Equipment Schedule No. ______, dated ____________________ (including the Payment Schedule attached thereto, the “Equipment Schedule”), which incorporates by reference the terms and provisions of that certain Master Equipment Lease/Purchase Agreement dated as of ____________ (the “Agreement”), each by and between Assignor and ____________________ (“Lessee”), together with all exhibits, schedules, riders, addenda and attachments related thereto, and all certifications and other documents delivered in connection therewith, the Rental Payments and other amounts due under the Lease (as such term is hereinafter defined), all of Assignor’s right, title and interest in the Equipment listed in the Equipment Schedule and all of Assignor’s right, title and interest in, to and under the Escrow and Account Control Agreement dated as of ____________, 20__ (the “Escrow Agreement”) by and among Lessee, Assignor and ______________________, as Escrow Agent, together with the Escrow Account related thereto (collectively, the “Assigned Property”).

For purposes of this Notice and Acknowledgment of Assignment (the “Acknowledgment”), “Lease” means collectively the Equipment Schedule and the terms and provisions of the Agreement incorporated therein by reference, together with all exhibits, schedules, riders, addenda and attachments related thereto, and all certifications and other documents delivered in connection therewith. The term “Lease” specifically excludes all other Equipment Schedules entered into under the Agreement and Rental Payments other than with respect to the Equipment Schedule. Each capitalized term used but not defined herein has the meaning set forth in the Agreement.

1. Lessee hereby acknowledges the effect of the assignment of the Assigned Property and absolutely and unconditionally agrees to deliver to Assignee all Rental Payments and other amounts coming due under the Lease in accordance with the terms thereof on and after the date of this Acknowledgment.

2. Lessee hereby agrees that: (i) Assignee shall have all the rights of Lessor under the Lease and all related documents, including, but not limited to, the rights to issue or receive all notices and reports, to give all consents or agreements to modifications thereto, to receive title to the Equipment in accordance with the terms of the Lease, to declare a default and to exercise all rights and remedies thereunder in connection with the occurrence of an Event of Non-appropriation or an Event of Default; and (ii) [except as provided in Section 3.03 of the Agreement,] the obligations of Lessee to make Rental Payments and to perform and observe the City Council/RSA Agenda 261 Tuesday, April 12, 2022
other covenants and agreements contained in the Lease shall be absolute and unconditional in all events without abatement, diminution, deduction, set-off or defense.

3. Lessee agrees that, as of the date of this Notice and Acknowledgment of Assignment (this “Acknowledgement”), the following information about the Lease is true, accurate and complete:

Number of Rental Payments Remaining ________________
Amount of Each Rental Payment $_______________
Total Amount of Rental Payments
Remaining
$_______________
Frequency of Rental Payments ________________
Next Rental Payment Due ________________
Funds Remaining in Escrow Account $_______________

4. The Lease remains in full force and effect, has not been amended, no Event of Default (or event which with the passage of time or the giving of notice or both would constitute a default) has occurred thereunder and no Event of Non-appropriation has occurred or is threatened with respect thereto.

5. Assignor hereby acknowledges the transfer restrictions imposed by Section 11.01 of the Agreement and confirms that the assignment to Assignee has been made in accordance with the provisions of that Section.

6. Any inquiries of Lessee related to the Lease and any requests for disbursements from the Escrow Account, if applicable, and all Rental Payments and other amounts coming due pursuant to the Lease on and after the date of this Acknowledgment should be remitted to Assignee at the following address (or such other address as provided to Lessee in writing from time to time by Assignee):
______________________________
______________________________
______________________________
City Council/RSA Agenda 262 Tuesday, April 12, 2022
ACKNOWLEDGED AND AGREED:

LESSEE: _____________________________
[FOR EXHIBIT PURPOSES ONLY]
By: _________________________________
Name: ___________________________
Title: ____________________________
ASSIGNOR: BANC OF AMERICA PUBLIC CAPITAL CORP
[FOR EXHIBIT PURPOSES ONLY]
By: _________________________________
Name: ___________________________
Title: ____________________________
City Council/RSA Agenda 263 Tuesday, April 12, 2022

EXHIBIT I

ESCROW AND ACCOUNT CONTROL AGREEMENT
City Council/RSA Agenda 264 Tuesday, April 12, 2022
March 2019 1

EXHIBIT I
[Form of] Escrow and Account Control Agreement
This Escrow and Account Control Agreement (this “Agreement”), dated as of ____________________, by and among Banc of America Public Capital Corp, a Kansas corporation (together with its successors and assigns, hereinafter referred to as “Lessor”), ____________________, a [city] [county] [special district] [body corporate and politic] existing under the laws of the State of ____________ (hereinafter referred to as “Lessee”) and Bank of America, National Association, a national banking association organized under the laws of the United States of America (hereinafter referred to as “Escrow Agent”).

Reference is made to that certain Equipment Schedule No. ___ dated as of _______ to Master Equipment Lease/Purchase Agreement dated as of ____________________ between Lessor and Lessee (hereinafter referred to as the “Lease”), covering the acquisition and lease of certain Equipment described therein (the “Equipment”). It is a requirement of the Lease that the Acquisition Amount ($__________________) be deposited into a segregated escrow account under terms satisfactory to Lessor, for the purpose of fully funding the Lease, and providing a mechanism for the application of such amounts to the purchase of and payment for the Equipment.

NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Creation of Escrow Account.
(a) There is hereby created an escrow fund to be known as the “____________________ Escrow Account” (the “Escrow Account”) to be held by the Escrow Agent for the purposes stated herein, for the benefit of Lessor and Lessee, to be held, disbursed and returned in accordance with the terms hereof.
(b) Lessee may, from time to time, provide written instructions for Escrow Agent to use any available cash in the Escrow Account to purchase any money market fund or liquid deposit investment vehicle that Escrow Agent from time to time makes available to the parties hereto. Such written instructions shall be provided via delivery to Escrow Agent of a signed and completed Escrow Account Investment Selection Form (such form available from Escrow Agent upon request). All funds invested by Escrow Agent at the direction of Lessee in such short-term investments (as more particularly described in Escrow Agent's Escrow Account Investment Selection Form) shall be deemed to be part of the Escrow Account and subject to all the terms and conditions of this Agreement. If any cash is received for the Escrow Account after the cut-off time for the designated short-term investment vehicle, the Escrow Agent shall hold such cash uninvested until the next Business Day. In the absence of written instructions from Lessee (on Escrow Agent's Escrow Account Investment Selection Form) designating a shortterm investment of cash in the Escrow Account, cash in the Escrow Account shall remain uninvested and it shall not be collateralized. Escrow Agent shall have no obligation to pay interest on cash in respect of any period during which it remains uninvested. Lessee shall be City Council/RSA Agenda 265 Tuesday, April 12, 2022
March 2019 2
solely responsible for ascertaining that all proposed investments and reinvestments are Qualified Investments and that they comply with federal, state and local laws, regulations and ordinances governing investment of such funds and for providing appropriate notice to the Escrow Agent for the reinvestment of any maturing investment. Accordingly, neither the Escrow Agent nor Lessor shall be responsible for any liability, cost, expense, loss or claim of any kind, directly or indirectly arising out of or related to the investment or reinvestment of all or any portion of the moneys on deposit in the Escrow Account, and Lessee agrees to and does hereby release the Escrow Agent and Lessor from any such liability, cost, expenses, loss or claim. Interest on the Escrow Account shall become part of the Escrow Account, and gains and losses on the investment of the moneys on deposit in the Escrow Account shall be borne by the Lessee. The Escrow Agent shall have no discretion whatsoever with respect to the management, disposition or investment of the Escrow Account. The Escrow Agent shall not be responsible for any market decline in the value of the Escrow Account and has no obligation to notify Lessor and Lessee of any such decline or take any action with respect to the Escrow Account, except upon specific written instructions stated herein. For purposes of this Agreement, “Qualified Investments” means any investments which meet the requirements of [state law citation]. (c) Unless the Escrow Account is earlier terminated in accordance with the provisions of paragraph (d) below, amounts in the Escrow Account shall be disbursed by the Escrow Agent in payment of amounts described in Section 2 hereof upon receipt of written instruction(s) from Lessor, as is more fully described in Section 2 hereof. If the amounts in the Escrow Account are insufficient to pay such amounts, Lessee shall provide any balance of the funds needed to complete the acquisition of the Equipment. Any moneys remaining in the Escrow Account on or after the earlier of (i) the expiration of the Acquisition Period or (ii) the date on which Lessee executes an Acceptance Certificate shall be applied as provided in Section 4 hereof.
(d) The Escrow Account shall be terminated at the earliest of (i) the final distribution of amounts in the Escrow Account, (ii) the date on which Lessee executes a Final Acceptance Certificate or (iii) written notice given by Lessor of the occurrence of an Event of Default under the Lease or termination of the Lease due to an Event of Non-appropriation.

Notwithstanding the foregoing, this Agreement shall not terminate nor shall the Escrow Account be closed until all funds deposited hereunder have been disbursed. (e) The Escrow Agent may act in reliance upon any writing or instrument or signature which it, in good faith, believes to be genuine and may assume the validity and accuracy of any statement or assertion contained in such a writing or instrument. The Escrow Agent shall not be liable in any manner for the sufficiency or correctness as to form, manner of execution, or validity of any instrument nor as to the identity, authority, or right of any person executing the same; and its duties hereunder shall be limited to the receipt of such moneys, instruments or other documents received by it as the Escrow Agent, and for the disposition of the same in accordance herewith. Notwithstanding and without limiting the generality of the foregoing, concurrent with the execution of this Agreement, Lessee and Lessor, respectively, shall deliver to the Escrow Agent an authorized signers form in the form of Exhibit A-1 (Lessee) and Exhibit A-2 (Lessor) attached hereto. Notwithstanding the foregoing sentence, the Escrow Agent is authorized to comply with and rely upon any notices, instructions or other communications believed by it to have been sent or given by the parties or by a person or persons City Council/RSA Agenda 266 Tuesday, April 12, 2022
March 2019 3
authorized by the parties. The Escrow Agent specifically allows for receiving direction by written or electronic transmission from an authorized representative with the following caveat, Lessee and Lessor agree to indemnify and hold harmless the Escrow Agent against any and all claims, losses, damages, liabilities, judgments, costs and expenses (including reasonable attorneys' fees) (collectively, "Losses") incurred or sustained by the Escrow Agent as a result of or in connection with the Escrow Agent’s reliance upon and compliance with instructions or directions given by written or electronic transmission given by each, respectively, provided, however, that such Losses have not arisen from the gross negligence or willful misconduct of the Escrow Agent, it being understood that forbearance on the part of the Escrow Agent to verify or confirm that the person giving the instructions or directions, is, in fact, an authorized person shall not be deemed to constitute gross negligence or willful misconduct.

In the event conflicting instructions as to the disposition of all or any portion of the Escrow Account are at any time given by Lessor and Lessee, the Escrow Agent shall abide by the instructions or entitlement orders given by Lessor without consent of the Lessee. (f) Unless the Escrow Agent is guilty of gross negligence or willful misconduct with regard to its duties hereunder, Lessee agrees to and does hereby release and indemnify the Escrow Agent and hold it harmless from any and all claims, liabilities, losses, actions, suits or proceedings at law or in equity, or any other expense, fees or charges of any character or nature, which it may incur or with which it may be threatened by reason of its acting as Escrow Agent under this Agreement; and in connection therewith, does to the extent permitted by law indemnify the Escrow Agent against any and all expenses; including reasonable attorneys’ fees and the cost of defending any action, suit or proceeding or resisting any claim. (g) If Lessee and Lessor shall be in disagreement about the interpretation of the Lease, or about the rights and obligations, or the propriety of any action contemplated by the Escrow Agent hereunder, the Escrow Agent may, but shall not be required to, file an appropriate civil action including an interpleader action to resolve the disagreement. The Escrow Agent shall be reimbursed by Lessee for all costs, including reasonable attorneys’ fees, in connection with such civil action, and shall be fully protected in suspending all or part of its activities under the Lease until a final judgment in such action is received. (h) The Escrow Agent may consult with counsel of its own choice and shall have full and complete authorization and protection with the opinion of such counsel. The Escrow Agent shall otherwise not be liable for any mistakes of fact or errors of judgment, or for any acts or omissions of any kind unless caused by its willful misconduct. (i) Lessee shall reimburse the Escrow Agent for all reasonable costs and expenses, including those of the Escrow Agent’s attorneys, agents and employees incurred for non-routine administration of the Escrow Account and the performance of the Escrow Agent’s powers and duties hereunder in connection with any Event of Default under the Lease, any termination of the Lease due to an Event of Non-appropriation or in connection with any dispute between Lessor and Lessee concerning the Escrow Account. (j) The Escrow Agent or any successor may at any time resign by giving mailed notice to Lessee and Lessor of its intention to resign and of the proposed date of City Council/RSA Agenda 267 Tuesday, April 12, 2022
March 2019 4
resignation (the “Effective Date”), which shall be a date not less than 60 days after such notice is delivered to an express carrier, charges prepaid, unless an earlier resignation date and the appointment of a successor shall have been approved by the Lessee and Lessor. After the Effective Date, the Escrow Agent shall be under no further obligation except to hold the Escrow Account in accordance with the terms of this Agreement, pending receipt of written instructions from Lessor regarding further disposition of the Escrow Account. (k) The Escrow Agent shall have no responsibilities, obligations or duties other than those expressly set forth in this Agreement and no implied duties responsibilities or obligations shall be read into this Agreement.

2. Acquisition of Property.
(a) Acquisition Contracts. Lessee will arrange for, supervise and provide for, or cause to be supervised and provided for, the acquisition of the Equipment, with moneys available in the Escrow Account. Lessee represents the estimated costs of the Equipment are within the funds estimated to be available therefor, and Lessor makes no warranty or representation with respect thereto. Lessor shall have no liability under any of the acquisition or construction contracts. Lessee shall obtain all necessary permits and approvals, if any, for the acquisition, equipping and installation of the Equipment, and the operation and maintenance thereof. Escrow Agent shall have no duty to monitor or enforce Lessee’s compliance with the foregoing covenant.
(b) Authorized Escrow Account Disbursements. It is agreed as between Lessee and Lessor that disbursements from the Escrow Account shall be made for the purpose of paying (including the reimbursement to Lessee for advances from its own funds to accomplish the purposes hereinafter described) the cost of acquiring the Equipment. (c) Requisition Procedure. No disbursement from the Escrow Account shall be made unless and until Lessor has approved such requisition. Prior to disbursement from the Escrow Account there shall be filed with the Escrow Agent a requisition for such payment in the form of Disbursement Request attached hereto as Schedule 1, stating each amount to be paid and the name of the person, firm or corporation to whom payment thereof is due. All disbursements shall be made by wire transfer. The Escrow Agent is authorized to obtain and rely on confirmation of such Disbursement Request and payment instructions by telephone call-back to the person or persons designated for verifying such requests on Exhibit A-2 (such person verifying the request shall be different than the person initiating the request). The Lessor and Lessee hereby confirm that any call-back performed by Escrow Agent to verify a disbursement instruction pursuant to a Disbursement Request submitted pursuant to this Section 2(c) before release, shall be made to Lessor only and Escrow Agent shall have no obligation to call-back Lessee.

Each such Disbursement Request shall be signed by an authorized representative of Lessee (an “Authorized Representative”) and by Lessor, and shall be subject to the following conditions, which Escrow Agent shall conclusively presume have been satisfied at such time as a requisition executed by Lessee and Lessor is delivered to it:

City Council/RSA Agenda 268 Tuesday, April 12, 2022
March 2019 5

1. Delivery to Lessor of an executed Disbursement Request in the form attached hereto as Schedule 1; and

2. Delivery to Lessor of copies of invoices (and proofs of payment of such invoices, if Lessee seeks reimbursement) and bills of sale (if title to such Equipment has passed to Lessee) therefor as required by Section 3.04 of the Lease and any additional documentation reasonably requested by Lessor.

Lessee and Lessor agree that their execution of the form attached hereto as Schedule 1 and delivery of the executed form to Escrow Agent confirms that all of the requirements and conditions with respect to disbursements set forth in this Section 2 have been satisfied.

3. Deposit to Escrow Account. Upon satisfaction of the conditions specified in Section 3.04 of the Lease, Lessor will cause the Acquisition Amount to be deposited in the Escrow Account. Lessee agrees to pay any costs with respect to the Equipment in excess of amounts available therefor in the Escrow Account.

4. Excessive Escrow Account. Upon receipt of written instructions from Lessor including a representation that one of the following conditions has been satisfied (upon which representation Escrow Agent shall conclusively rely), any funds remaining in the Escrow Account on or after the earlier of (a) the expiration of the Acquisition Period or (b) the date on which Lessee executes an Acceptance Certificate, or upon a termination of the Escrow Account as otherwise provided herein, shall be distributed by the Escrow Agent to the Lessor in order for the Lessor to apply such funds to amounts owed by Lessee under the Lease in accordance with Section 4.07 of the Lease.

5. Security Interest. The Escrow Agent and Lessee acknowledge and agree that the Escrow Account and all proceeds thereof are being held by Escrow Agent for disbursement or return as set forth herein. Lessee hereby grants to Lessor a first priority perfected security interest in the Escrow Account, and all proceeds thereof, and all investments made with any amounts in the Escrow Account. If the Escrow Account, or any part thereof, is converted to investments as set forth in this Agreement, such investments shall be made in the name of Escrow Agent and the Escrow Agent hereby agrees to hold such investments as bailee for Lessor so that Lessor is deemed to have possession of such investments for the purpose of perfecting its security interest.

6. Control of Escrow Account. In order to perfect Lessor’s security interest by means of control in (i) the Escrow Account established hereunder, (ii) all securities entitlements, investment property and other financial assets now or hereafter credited to the Escrow Account, (iii) all of Lessee’s rights in respect of the Escrow Account, such securities entitlements, investment property and other financial assets, and (iv) all products, proceeds and revenues of and from any of the foregoing personal property (collectively, the “Collateral”), Lessor, Lessee and Escrow Agent further agree as follows:

City Council/RSA Agenda 269 Tuesday, April 12, 2022
March 2019 6
(a) All terms used in this Section 6 which are defined in the Commercial Code of the state of _____________________1 (“Commercial Code”) but are not otherwise defined herein shall have the meanings assigned to such terms in the Commercial Code, as in effect on the date of this Agreement.
(b) Escrow Agent will comply with all entitlement orders originated by Lessor with respect to the Collateral, or any portion of the Collateral, without further consent by Lessee. (c) Provided that account investments shall be held in the name of the Escrow Agent, Escrow Agent hereby represents and warrants (a) that the records of Escrow Agent show that Lessee is the sole owner of the Collateral, (b) that Escrow Agent has not been served with any notice of levy or received any notice of any security interest in or other claim to the Collateral, or any portion of the Collateral, other than Lessor’s claim pursuant to this Agreement, and (c) that Escrow Agent is not presently obligated to accept any entitlement order from any person with respect to the Collateral, except for entitlement orders that Escrow Agent is obligated to accept from Lessor under this Agreement and entitlement orders that Escrow Agent, subject to the provisions of paragraph (e) below, is obligated to accept from Lessee. (d) Without the prior written consent of Lessor, Escrow Agent will not enter into any agreement by which Escrow Agent agrees to comply with any entitlement order of any person other than Lessor or, subject to the provisions of paragraph (e) below, Lessee, with respect to any portion or all of the Collateral. Escrow Agent shall promptly notify Lessor if any person requests Escrow Agent to enter into any such agreement or otherwise asserts or seeks to assert a lien, encumbrance or adverse claim against any portion or all of the Collateral. (e) Except as otherwise provided in this paragraph (e) and subject to Section 1(b) hereof, Lessee may effect sales, trades, transfers and exchanges of Collateral within the Escrow Account, but will not, without the prior written consent of Lessor, withdraw any Collateral from the Escrow Account. Escrow Agent acknowledges that Lessor reserves the right, by delivery of written notice to Escrow Agent, to prohibit Lessee from effecting any withdrawals (including withdrawals of ordinary cash dividends and interest income), sales, trades, transfers or exchanges of any Collateral held in the Escrow Account. Further, Escrow Agent hereby agrees to comply with any and all written instructions delivered by Lessor to Escrow Agent (once it has had a reasonable opportunity to comply therewith) and has no obligation to, and will not, investigate the reason for any action taken by Lessor, the amount of any obligations of Lessee to Lessor, the validity of any of Lessor’s claims against or agreements with Lessee, the existence of any defaults under such agreements, or any other matter. (f) Lessee hereby irrevocably authorizes Escrow Agent to comply with all instructions and entitlement orders delivered by Lessor to Escrow Agent. (g) Escrow Agent will not attempt to assert control, and does not claim and will not accept any security or other interest in, any part of the Collateral, and Escrow Agent will not exercise, enforce or attempt to enforce any right of setoff against the Collateral, or otherwise charge or deduct from the Collateral any amount whatsoever. 1 State where lessee is located.

City Council/RSA Agenda 270 Tuesday, April 12, 2022
March 2019 7
(h) Escrow Agent and Lessee hereby agree that any property held in the Escrow Account shall be treated as a financial asset under such section of the Commercial Code as corresponds with Section 8-102 of the Uniform Commercial Code, notwithstanding any contrary provision of any other agreement to which Escrow Agent may be a party. (i) Escrow Agent is hereby authorized and instructed, and hereby agrees, to send to Lessor at its address set forth in Section 8 below, concurrently with the sending thereof to Lessee, duplicate copies of any and all monthly Escrow Account statements or reports issued or sent to Lessee with respect to the Escrow Account.

7. Information Required Under USA PATRIOT ACT. The parties acknowledge that in order to help the United States government fight the funding of terrorism and money laundering activities, pursuant to Federal regulations that became effective on October 1, 2003 (Section 326 of the USA PATRIOT Act) all financial institutions are required to obtain, verify, record and update information that identifies each person establishing a relationship or opening an account. The parties to this Agreement agree that they will provide to the Escrow Agent such information as it may request, from time to time, in order for the Escrow Agent to satisfy the requirements of the USA PATRIOT Act, including but not limited to the name, address, tax identification number and other information that will allow it to identify the individual or entity who is establishing the relationship or opening the account and may also ask for formation documents such as articles of incorporation or other identifying documents to be provided.

8. Miscellaneous. Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Lease. This Agreement may not be amended except in writing signed by all parties hereto. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original instrument and each shall have the force and effect of an original and all of which together constitute, and shall be deemed to constitute, one and the same instrument. Notices hereunder shall be made in writing and shall be deemed to have been duly given when personally delivered or when deposited in the mail, first class postage prepaid, or delivered to an express carrier, charges prepaid, or sent by facsimile with electronic confirmation, addressed to each party at its address below.

Notices and other communications hereunder may be delivered or furnished by electronic mail provided that any formal notice be attached to an email message in PDF format and provided further that any notice or other communication sent to an e-mail address shall be deemed received upon and only upon the sender’s receipt of affirmative acknowledgement or receipt from the intended recipient. For purposes hereof no acknowledgement of receipt generated on an automated basis shall be deemed sufficient for any purpose hereunder or admissible as evidence of receipt.

City Council/RSA Agenda 271 Tuesday, April 12, 2022
March 2019 8
If to Lessor: Banc of America Public Capital Corp
11333 McCormick Road
Mail Code: MD5-032-07-05
Hunt Valley, MD 21031
Attn: Contract Administration
Fax: (443) 541-3057
If to Lessee: ________________________
_________________________
_________________________
Attn: ___________________
Fax: ____________________
If to Escrow Agent
Bank of America, National Association
Global Custody and Agency Services
540 W. Madison Street
Mail Code: IL4-540-21-03
Chicago, Illinois 60661
Attention: GCAS AMRS Escrow Service
Telephone: (312) 992-3272
Fax: (312) 453-4443
Email: [email protected]

9. Lessee and Lessor understand and agree that they are required to provide the Escrow Agent with a properly completed and signed Tax Certification (as defined below) and that the Escrow Agent may not perform its duties hereunder without having been provided with such Tax Certification. As used herein “Tax Certification” shall mean an IRS form W-9 or W-8 as described above. The Escrow Agent will comply with any U.S. tax withholding or backup withholding and reporting requirements that are required by law. With respect to earnings allocable to a foreign person, the Escrow Agent will withhold U.S. tax as required by law and report such earnings and taxes withheld, if any, for the benefit of such foreign person on IRS Form 1042-S (or any other required form), unless such earnings and withheld taxes are exempt from reporting under Treasury Regulation Section 1.1461-1(c)(2)(ii) or under other applicable law. With respect to earnings allocable to a United States person, the Escrow Agent will report such income, if required, on IRS Form 1099 or any other form required by law. The IRS Forms 1099 and/or 1042-S shall show the Escrow Agent as payor and [Lessee] as payee. Escrow Agent shall recognize [Lessee] as the designated party for regulatory reporting purposes.

Lessee and Lessor agree that they are not relieved of their respective obligations, if any, to prepare and file information reports under Code Section 6041, and the Treasury regulations thereunder, with respect to amounts of imputed interest income, as determined pursuant to Code Sections 483 or 1272. The Escrow Agent shall not be responsible for determining or reporting such imputed interest.

10. This Agreement shall be governed by and construed in accordance with the laws of the State of [ ] and the parties hereto consent to jurisdiction in the State of [ ] and venue in any state or Federal court located in the City of [ ].

City Council/RSA Agenda 272 Tuesday, April 12, 2022
March 2019 9

11. Any bank or corporation into which the Escrow Agent may be merged or with which it may be consolidated, or any bank or corporation to whom the Escrow Agent may transfer a substantial amount of its escrow business, shall be the successor to the Escrow Agent without the execution or filing of any paper or any further act on the part of any of the parties, anything herein to the contrary notwithstanding. Any bank or corporation into which the Lessor may be merged or with which it may be consolidated, or any bank or corporation to whom the Lessor may transfer a substantial amount of its business, shall be the successor to the Lessor without the execution or filing of any paper or any further act on the part of any of the parties, anything herein to the contrary notwithstanding.

12. This Agreement may be amended, modified, and/or supplemented only by an instrument in writing executed by all parties hereto.

13. No party hereto shall assign its rights hereunder until its assignee has submitted to the Escrow Agent (i) Patriot Act disclosure materials and the Escrow Agent has determined that on the basis of such materials it may accept such assignee as a customer and (ii) assignee has delivered an IRS Form W-8 or W-9, as appropriate, to the Escrow Agent which the Escrow Agent has determined to have been properly signed and completed.

14. Escrow Agent will treat information related to this Agreement as confidential but, unless prohibited by law, Lessee and Lessor authorize the transfer or disclosure of any information relating to the Agreement to and between the subsidiaries, officers, affiliates and other representatives and advisors of Escrow Agent and third parties selected by any of them, wherever situated, for confidential use in the ordinary course of business, and further acknowledge that Escrow Agent and any such subsidiary, officer, affiliate or third party may transfer or disclose any such information as required by any law, court, regulator or legal process.

Lessor will treat information related to this Agreement as confidential but, unless prohibited by law, Escrow Agent and Lessee authorize the transfer or disclosure of any information relating to the Agreement to and between the subsidiaries, officers, affiliates, other representatives and advisors of Lessor and debt and equity sources and third parties selected by any of them, and to their prospective assignees wherever situated, for confidential use in the ordinary course of business, and further acknowledge that Lessor and any such subsidiary, officer, affiliate, debt and equity source or third party or prospective assignee may transfer or disclose any such information as required by any law, court, regulator or legal process.

Lessee will treat the terms of this Agreement as confidential except on a "need to know" basis to persons within or outside Lessee’s organization (including affiliates of such party), such as attorneys, accountants, bankers, financial advisors, auditors and other consultants of such party and its affiliates, except as required by any law, court, regulator or legal process and except pursuant to the express prior written consent of the other parties, which consent shall not be unreasonably withheld;
City Council/RSA Agenda 273 Tuesday, April 12, 2022
March 2019 10
In Witness Whereof, the parties have executed this Escrow and Account Control Agreement as of the date first above written.

Banc of America Public Capital Corp ________________________________ as Lessor as Lessee
By: By:

Name: Name:

Title: Title:

Bank of America, National Association
As Escrow Agent
By:

Name:

Title:

City Council/RSA Agenda 274 Tuesday, April 12, 2022
SCHEDULE 1
to the Escrow and Account Control Agreement

FORM OF DISBURSEMENT REQUEST
Re: Equipment Schedule No. ___ dated as of _______ to Master Equipment Lease/Purchase Agreement dated as of _________________________ by and between Banc of America Public Capital Corp, as Lessor, and ___________________, as Lessee (the “Lease”) (Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Lease.)
In accordance with the terms of the Escrow and Account Control Agreement, dated as of __________________________ (the “Escrow and Account Control Agreement”) by and among Banc of America Public Capital Corp (“Lessor”), _____________________ (“Lessee”) and Bank of America, National Association, (the “Escrow Agent”), the undersigned hereby requests the Escrow Agent pay the following persons the following amounts from the Escrow Account created under the Escrow and Account Control Agreement for the following purposes:

Disbursement Amounts:

Payee’s Name and Address Invoice Number Dollar Amount Purpose <Payee’s Name>
<Payee Address 1>
<Payee Address 2>
<Payee Address 3>
<Payee Bank Name*>
<Payee Bank ABA/Routing*>
<Payee Bank Account No*>
<Payee Account Name*>
<*Payee Address and Payee Bank
information is required. >
<invoice list OR “see
attached” with a
spreadsheet>
< invoice amount> <general description of
equipment; ex “police cruiser”>
<Payee’s Name>
<Payee Address 1>
<Payee Address 2>
<Payee Address 3>
<Payee Bank Name*>
<Payee Bank ABA/Routing*>
<Payee Bank Account No*>
<Payee Account Name*>
<*Payee Address and Payee Bank
information is required.>
<invoice list OR “see
attached” with a
spreadsheet>
<invoice amount> <general description of
equipment; ex “police cruiser”>
Lessee hereby represents, covenants and warrants for the benefit of Lessor on the date hereof as follows:

City Council/RSA Agenda 275 Tuesday, April 12, 2022
(i) (a) Each obligation specified in the table herein titled as “Disbursement Amounts” has been incurred by Lessee in the stated amount, (b) the same is a proper charge against the Escrow Account for costs relating to the Equipment identified in the Lease, and (c) has not been paid (or has been paid by Lessee and Lessee requests reimbursement thereof).
(ii) Each item of Equipment relating to an obligation specified in the table herein titled as “Disbursement Amounts” has been delivered, installed and accepted by Lessee. Attached hereto is a copy of the invoice with respect to such obligation.
(iii) The undersigned, as Authorized Representative, has no notice of any vendor’s, mechanic’s or other liens or rights to liens, chattel mortgages, conditional sales contracts or security interest which should be satisfied or discharged before such payment is made.
(iv) This requisition contains no item representing payment on account, or any retained percentages which Lessee is, at the date hereof, entitled to retain (except to the extent such amounts represent a reimbursement to Lessee).
(v) The Equipment is insured in accordance with the Lease. (vi) No Event of Default, and no event which with notice or lapse of time, or both, would become an Event of Default, under the Lease has occurred and is continuing at the date hereof. No Event of Non-appropriation has occurred or is threatened with respect to the Lease. (vii) The disbursement shall occur during the Acquisition Period. (viii) The representations, warranties and covenants of Lessee set forth in the Lease are true and correct as of the date hereof.
(ix) No Material Adverse Change has occurred since the date of the execution and delivery of the Lease.
(x) The information in this Disbursement Request regarding each Payee, including their respective name, address and wiring instructions, (collectively, the “Payee Information”) is true and correct, such Payee Information has been verified and confirmed by Lessee and the Lessor can rely on Lessee’s verification and confirmation of the accuracy of such Payee Information. Lessee hereby acknowledges and agrees that any call-back performed by Lessor to verify the disbursement instructions pursuant to this Disbursement Request shall be made to Lessee only and Lessor shall have no obligation to call-back any Payee listed above.

Dated:
________________________________
By:

Name: ______________________________
Title: _______________________________
Disbursement of funds from the Escrow
Account in accordance with the foregoing
Disbursement Request hereby is authorized

BANC OF AMERICA PUBLIC CAPITAL CORP
as Lessor under the Lease
By:

Name:

Title:

City Council/RSA Agenda 276 Tuesday, April 12, 2022
[AN “EXHIBIT A-1” MUST BE COMPLETED AND EXECUTED AT TIME OF EXECUTION OF THE AGREEMENT] EXHIBIT A-1

FORM OF INCUMBENCY AND AUTHORIZATION CERTIFICATE
The undersigned, a duly elected or appointed and acting __________________ [Secretary] [City Clerk] [County Clerk] of _______________________________ (“Lessee”) certifies as follows:

A. The following listed persons are duly elected or appointed and acting officials of Lessee (the “Officials”) in the capacity set forth opposite their respective names below and the facsimile signatures below are true and correct as of the date hereof; B. The Officials are duly authorized, on behalf of Lessee, to negotiate, execute and deliver the Equipment Schedule No. ___ dated as of _______ to Master Equipment Lease/Purchase Agreement dated as of ____________________ by and between Lessee and Banc of America Public Capital Corp (“Lessor”), the Escrow and Account Control Agreement dated as of __________________ by and among Lessor, Lessee and Bank of America, National Association, as Escrow Agent, all documents related thereto and delivered in connection therewith, and any future modification(s) or amendments thereof (collectively, the “Operative Agreements”), and the Operative Agreements each are the binding and authorized agreements of Lessee, enforceable in all respects in accordance with their respective terms.

Name of Official Title Signature
_____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ Dated: By:

Name:

Title:
(The signer of this Certificate cannot be listed above as authorized to execute the Agreements.) City Council/RSA Agenda 277 Tuesday, April 12, 2022
[AN “EXHIBIT A-2” MUST BE COMPLETED AND EXECUTED AT TIME OF EXECUTION OF THE AGREEMENT] EXHIBIT A-2
Escrow and Account Control Agreement dated as of ______________ by and among Banc of America Public Capital Corp, as Lessor, ________________________, as Lessee and Bank of America, National Association, as Escrow Agent
Certificate of Authorized Representatives – [Lessor]
Name: Augustine Reichenbach Name: Jennifer Schlosser
Title: Authorized Agent Title: Authorized Agent
Phone: 443-541-2613 Phone: 443-541-3685
Facsimile: 904-312-6101 Facsimile: 804-662-1781
E-mail: [email protected] E-mail: [email protected] Signature: Signature:

Fund Transfer / Disbursement Authority Level: Fund Transfer / Disbursement Authority Level:
 Initiate  Initiate
 Verify transactions initiated by others  Verify transactions initiated by others Name: Bridgett Arnold Name: Yvette Montalvo-Baron
Title: Authorized Agent Title: Authorized Agent
Phone: 415-765-1867 Phone: 443-765-7371
Facsimile: 415-765-7373 Facsimile: 415-765-7373
E-mail: [email protected] E-mail: [email protected] Signature: Signature:

Fund Transfer / Disbursement Authority Level: Fund Transfer / Disbursement Authority Level:
 Initiate  Initiate
 Verify transactions initiated by others  Verify transactions initiated by others City Council/RSA Agenda 278 Tuesday, April 12, 2022
Name: Eileen Harwell Name:

Title: Authorized Agent Title:

Phone: 415-765-1897 Phone:

Facsimile: 415-343-0531 Facsimile:

E-mail: [email protected] E-mail:

Signature: Signature:

Fund Transfer / Disbursement Authority Level: Fund Transfer / Disbursement Authority Level:
 Initiate  Initiate
 Verify transactions initiated by others  Verify transactions initiated by others The Escrow Agent is authorized to comply with and rely upon any notices, instructions or other communications believed by it to have been sent or given by the person or persons identified above including without limitation, to initiate and verify funds transfers as indicated.

Banc of America Public Capital Corp
By: ____________________________
Name:

Title:

Date: ______________
City Council/RSA Agenda 279 Tuesday, April 12, 2022
RESOLUTION NO.

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UNION CITY AUTHORIZING THE CITY TO PARTICIPATE IN A $4 MILLION MASTER

LEASE PURCHASE PROGRAM OFFERED BY BANK OF AMERICA AND

APPROVING THE CITY MANAGER TO EXECUTE THE RELATED

CURRENT AND FUTURE LEASE DOCUMENTS, AFTER APPROVAL AS

TO FORM BY THE CITY ATTORNEY
WHEREAS, in order to normalize annual replacement costs for technology and computing equipment, the City began a program in 2008 to move all computer equipment purchases into a lease program. This prevents spiking of costs in any one year and allows the City to remain current in its equipment; thereby lessening maintenance costs on aging items; and WHEREAS, the City has also used lease purchase programs for other City equipment purchases, such as energy efficiency equipment and fire trucks. However, each lease financing has been negotiated as a stand-alone lease with varying rates and terms; and WHEREAS, there is a current need to purchase Network Infrastructure equipment and services, and there will be a fairly near-term need to replace several large pieces of fire apparatus, staff researched current lease finance options. Staff received proposals from De Lage Laden Public Finance, Bank of America and from NexSeer, a leasing company is Southern California; and WHEREAS, Bank of America offered the most competitive rate, a rate of 2.47% for a term of four years, or a rate of 2.57% for a term of five years. Bank of America also offered up to $3.4 million in additional financing which can be accessed at the City’s discretion. The current rate structure proposed by Bank of America in the attached term sheet (Exhibit A) will remain in place for one year. There is no obligation to borrow additional money and no fees or costs if no additional funds are borrowed; and
WHEREAS, the terms being offered by Bank of America are favorable in light of increased inflationary pressures and staff recommends participating in Bank of America’s lease purchase program by executing a Master Lease Purchase Agreement and authorizing the City Manager to execute the related current and future lease documents which may be used for the lease purchase of future equipment after approval as to form by the City Attorney; and WHEREAS, authorization to enter into a Master Lease Purchase Agreement with Bank of America ensures that the City will have the option to use lease purchase financing for future major equipment purchases at favorable interest rates.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Union City does hereby authorize the City to participate in a $4 million Master Lease Purchase Program offered by Bank of America and approves the City Manager to execute the related current and future lease documents after approval as to form by the City Attorney.

BE IT FURTHER RESOLVED that the City Manager is authorized to take all actions necessary to effectuate the intent of this Resolution.

City Council/RSA Agenda 280 Tuesday, April 12, 2022
PASSED, APPROVED, AND ADOPTED by the City Council of the City of Union City at a regular meeting held on April 12, 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED:
________________________________
Carol Dutra-Vernaci
Mayor
ATTESTED: APPROVED AS TO FORM:
__________________________________ ________________________________ Anna M. Brown Kristopher J. Kokotaylo
City Clerk City Attorney
5090806.1
City Council/RSA Agenda 281 Tuesday, April 12, 2022
Jill M. Forsyth
Senior Vice President
Global Leasing
14636 N. Scottsdale Road, Suite #200
Scottsdale, AZ 85254
T 480.624.0369 F 415.796.1301
[email protected]
“Bank of America” is the marketing name used by certain Global Banking and Global Markets businesses of Bank of America Corporation. Lending, leasing, equipment finance and other commercial banking activities, and trading in certain financial instruments are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Banc of America Public Capital Corp, a wholly-owned subsidiary of Bank of America, National Association, is not a municipal advisor and is not subject to the fiduciary duty established in Section 15B(c)(1) of the Securities Exchange Act of 1934, as amended, with respect to any municipal financial product or issuance of municipal securities. The information provided in this document is not intended to be and should not be construed as “advice” with the meaning Section 15B of the Securities Exchange Act of 1934 and the municipal advisor rules of the SEC.© 2020 Bank of America Corporation. All rights reserved.

SUMMARY OF TERMS AND CONDITIONS
Date: March 25, 2022
Lessee: City of Union City, CA (“Lessee”)
Lessor: Banc of America Public Capital Corp or Affiliate (“Lessor”) Structure: Privately-Placed Lease Purchase subject to appropriation Amount: Approximately $4MM
Security: Assets being financed, fire apparatus , technology and other assets TBD Interest Rate: The interest rate will be calculated based on the formula below for each schedule. If the City decides to enter into a rate lock for an individual schedule, that can be accommodated.

Union City
Lease Term Payment Mode Index Term
(Avg Life) Index Rate xPercentage of
Index +Spread =Equipment Lease Rate
3YRS Semi-Ann Arrears 2YRS 2.4276% 79.0% 0.3822% 2.3000% 4YRS Semi-Ann Arrears 2YRS 2.4276% 79.0% 0.4822% 2.4000% 5YRS Semi-Ann Arrears 3YRS 2.5235% 79.0% 0.5064% 2.5000% 7YRS Semi-Ann Arrears 4YRS 2.5076% 79.0% 0.6690% 2.6500% 10YRS Semi-Ann Arrears 5YRS 2.4828% 79.0% 0.7386% 2.7000% Indexing Based on 3/25/22 Interest Rate Swaps Index:
*The actual Tax-Exempt Interest Rate for future Schedules will be calculated in accordance with the formula in the above pricing grid and will be based on the then current Swap Index Rate published on the applicable Refinitiv Swaps Index screen page (or such other commercially available source providing such quotations as may be selected by Lender from time to time) on the date pricing is set (no more than 8 business days prior to funding), which the current Swap Index Rate shall not be less than zero (0%).

City Council/RSA Agenda 282 Tuesday, April 12, 2022
Prepayment: Pre-payable in full after half of the term at par Governmental
Entity Lease: The Base Rent installments are calculated on the assumptions, and Lessee will represent, that Lessee is a state or political subdivision of a state within the meaning of Section 103(c) of the Internal Revenue Code (the “Code”), and that this transaction will constitute an obligation of Lessee within the meaning of Section 103(a) of the Code, notwithstanding Section 103(b) of the Code. Lessee shall provide Lessor with such evidence as Lessor may request to substantiate and maintain such tax status. Lessee shall comply with the filing requirements of Section 149(e) of the Code.

End of Term: At the expiration of the Lease Term, Lessee will own the equipment.

Opinion of Counsel: Lessee’s counsel shall deliver a validity opinion to Lessor at closing in form and substance satisfactory to Lessor. The opinion of counsel will cover that counsel has reviewed the documents and examined, approved and attached the text of the enabling resolution of Lessee’s governing body authorizing Lessee to enter into the Lease. A tax opinion will be required for Schedules in excess of $5,000,000.

Documentation: Sample Documents have been sent for review. Also, in the event that payment is required prior to the asset being delivered ( which is customary with assets such as fire apparatus), a performance bond will be required which protects both Lessee and Lessor. This proposal is subject to acceptable negotiation of documents.

Credit: Subject to credit approval but this review and closing can be done timely.

Market
Disruption: Notwithstanding anything contained herein to the contrary, in the event any material change shall occur in the financial markets after the date of this Proposal Letter, including but not limited to any governmental action or other event which materially adversely affects the extension of credit by banks, leasing companies or other lending institutions, the Lessor may modify the indicative pricing described above.

City Council/RSA Agenda 283 Tuesday, April 12, 2022
USA Patriot Act
Compliance: Lessee acknowledges that pursuant to the requirements of the USA Patriot Act, as amended from time to time (including as amended by the USA Freedom Act of 2015) (the "Patriot Act"), Lessor is required to obtain, verify and record information that identifies Lessee, which information includes the name and address of Lessee and other information that will allow Lessor to identify Lessee in accordance with the Patriot Act.

Proposal Expiration:This proposal will expire on June 30, 2022 and may be re-issued at Lessor’s discretion.

This proposal is submitted in response to your Request for Proposals for Lease Purchase Financing of equipment, due June 30, 2022..

The contents of this proposal and any subsequent discussions between us, including any and all information, recommendations, opinions, indicative pricing, quotations and analysis with respect to any municipal financial product or issuance of municipal securities, are provided to you in reliance upon the exemption provided for responses to requests for proposals or qualifications under the municipal advisor rules (the “Rules”) of the Securities and Exchange Commission (240 CFR 15Ba1-1 et seq.).

The Staff of the SEC’s Office of Municipal Securities has issued guidance which provides that, in order for a request for proposals to be consistent with this exemption, it must (a) identify a particular objective, (b) be open for not more than a reasonable period of time (up to six months being generally considered as reasonable), and (c) involve a competitive process (such as by being provided to at least three reasonably competitive market participants) or by being publicly posted to your official website. In submitting this proposal, we have relied upon your compliance with this guidance.

In submitting this proposal, we are not undertaking to act as a “municipal advisor” to you or any other person within the meaning of the Rules. In connection with this proposal and the transactions described herein, we are not subject to, and we hereby disclaim, any fiduciary duty to you or to any other person. We understand that you will consult with and rely on the advice of your own municipal, financial, tax, legal and other advisors as and to the extent you deem necessary in connection with your evaluation of this proposal and the transactions described herein.

City Council/RSA Agenda 284 Tuesday, April 12, 2022
Agenda Item
DATE: 4/12/2022
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: JOAN MALLOY, CITY MANAGER
SUBJECT: ADOPT A RESOLUTION OPPOSING INITIATIVE 21-0042A1, THE

TAXPAYER PROTECTION AND GOVERNMENT ACCOUNTABILITYACT
Staff recommends that the City Counciladopt the attached resolution opposing the Initiative 21-0042A1, Taxpayer Protection and Government Accountability Act that would limit the voters’ input, adopt new and stricter rules for raising taxes and fees, and make it more difficult to hold state and local law violators accountable.

The League of California Cities (Cal Cities) is asking allcities across the state to to adopt a Resolution opposing this measure. The Mayor, through the Alameda County Mayors' Conference, and the Vice Mayor, as the Union City alternate representative to Cal Cities, have both requested this item be brought forth to City Council to adopt a Resolution to oppose the Initiative.

STRATEGIC PLAN ALIGNMENT
This Initiative would directly threaten the City's ability to reach and maintain fiscal sustainability, GoalA.

Without fiscal sustainability, the City will have difficulty providing the employee compensation and training that is necessary to maintain an excellent workforce and reinvest in community facilities and infrastructure. It would also threaten our ability to meet our public safety goals, sustainability goals and community engagement goals.

BACKGROUND
Initiative 21-0042A1, otherwise known as the Taxpayer Protection and Government Accountability Act, would amend the California Constitution to restrict the ability of the state, county, other localagencies (including the City), and the electorate to approve or collect taxes, fees and other revenues. The Initiative would require voter approval of all state taxes, would further restrict local fee authority by limiting it to the “minimum amount necessary" to provide government services, and would require voter approval for local measures such as franchise fees and parking fees. Its provisions would make it easier to challenge local revenue measures by City Council/RSA Agenda 285 Tuesday, April 12, 2022
increasing the burden of proof on localagencies while disallowing an agency’s characterization of a measure from being considered in court.

Cal Cities is leading an effort to oppose this Initiative. Below is a more complete list of impacts that would result should the Initiative be passed:

Limit Voter Authority andAccountability
Prohibit localadvisory measures that allow local voters to provide direction on how local tax dollars should be spent.

Invalidates the Upland court decision that allows a majority of local voters to pass special taxes. The proposed Initiative would require that taxes proposed by local voters are subject to the same rules as taxes placed on the ballot by a city council.

Restrict Local Fee Authority to Provide Local Services
Franchise fees. Sets a new standard for fees and charges paid for the use of local and state government property. The standard may significantly restrict the amount oil companies, utilities, gas companies, railroads, garbage companies, cable companies, and other corporations pay for the use of local public property. Rental and sale of local government property must be “reasonable” which must be proved by “clear and convincing evidence.”
Except for licensing and other regulatory fees, fees and charges may not exceed the “actualcost” of providing the product or service for which the fee is charged. “Actualcost” is the “minimum amount necessary.” The burden to prove the fee or charge does not exceed “actualcost” is changed to “clear and convincing” evidence. This will require additional, detailed analysis of all fees and increase administration costs.

Restrict Authority of State and Local Governments to Issue Fines and Penalties for Violations of Law.

Requires voter approval of fines, penalties, and levies for corporations and property owners that violate state and local laws unless a new, undefined adjudicatory process is used to impose the fines and penalties.

Restrict Local TaxAuthority to Provide Local Services
Expanding existing taxes (e.g., UUT, use tax, TOT) to new territory (e.g., annexation) or expanding the base (e.g., new utility service) requires voter approval.

City charters may not be amended to include a tax or fee.

New taxes can be imposed only for a specific time period.

Taxes adopted after January 1, 2022, that do not comply with the new rules, are void unless reenacted.

All state taxes require voter approval.

Prohibits any surcharge on property tax rate and allocation of property tax to state.

Other Changes
No fee or charge or exaction regulating vehicle miles traveled (VMT) can be imposed as a condition of property development or occupancy. This is in direct conflict with the state that now requires cities analyze new development for VMT. A city could not charge a development fee as a condition to mitigate VMT impacts. The purpose of VMT measurements is to encourage development within urbanized areas and to reduce dependence on automobiles.

City Council/RSA Agenda 286 Tuesday, April 12, 2022
The proposed constitutionalamendment is sponsored by the California Business Round Table (CBRT), an association comprised of the largest corporations in California. According to an article in the Los Angeles Times, the politicalaction committee supporting this effort is funded predominantly by three large realestate interests located in Southern California. Proponents of the initiative have untilApril 29, 2022, to turn in signatures to qualify for the November 2022 ballot.

DISCUSSION
Cal Cities has asked that cities consider adopting a resolution opposing the Initiative. At the Cal Cities meeting of December 8, 2021, the Cal Cities Board of Directors voted unanimously to oppose Attorney General Initiative 21-0026A1 and noted it as deceptively named “Taxpayer Protection and Government Accountability Act.” Cal Cities concluded that the measure would significantly jeopardize cities’ ability to provide necessary services and critical infrastructure to residents. It would impose onerous and undemocratic restrictions on local governments and local voters that would reduce local revenues by billions every year, decimating vital services like fire and emergency response, infrastructure, libraries, parks, sanitation, economic development, and virtually all local services.

As wellas further restricting how fees and taxes are adopted, the Initiative also creates new constitutional loopholes for corporations to pay less than their fair share for the impacts they may have on a community, including local infrastructure, the environment, water quality, air quality, and natural resources. Mitigations for these burdens would be shifted to other taxpayers, or the impacts would go unaddressed.

Staff has reviewed the proposed legislation, the analysis prepared by the State of California's Legislative Analyst's Office, and the Cal Cities analyses. Staff concurs with Cal Cities assessments that the Initiative would have an negative impact on local governments.

A broad coalition of local governments, labor and public safety leaders, and infrastructure advocates oppose the measure, including California Professional Firefighters, California Alliance for Jobs, SEIU, California State Council of Laborers, California State Association of Counties, California Special Districts Association, California Contract Cities Association, among others.

FISCAL IMPACT
There is no immediate fiscal impact as a result of adopting a Resolution to oppose this Initiative. However, should the Initiative pass, it would have far-reaching and yet undefined impacts on local governments. Future funding measures could be imperiled. Fees such as nuisance abatement charges, franchise fees, facility use fees, parking fees, and other fees could be subject to new standards, threats of legalaction, and possibly require voter approval. The ability to collect development impact fees related to VMT would be prohibited.

Establishing fees, adjusting fees, or seeking voter approval for fees, would require additional staff time to administer and oversee.

Overall, the impacts caused by the Initiative would hinder the City’s ability to raise revenue to provide services and would increase the cost of administering fees and taxes.

City Council/RSA Agenda 287 Tuesday, April 12, 2022

RECOMMENDATION
Staff recommends that the City Counciladopt the attached resolution opposing the Initiative 21-0042A1, Taxpayer Protection and Government Accountability Act that would limit the voters’ input, adopt new and stricter rules for raising taxes and fees, and make it more difficult to hold state and local law violators accountable.

Prepared by:

Joan Malloy, City Manager
Submitted by:

Joan Malloy, City Manager
ATTACHMENTS:

Description Type
Attachment 1 - Opposition Fact Sheet Attachment
Attachment 2 - FiscalAnalysis (1-11-22) Attachment
Attachment 3 - Cal Cities LegalAnalysis Attachment
Attachment 4 - California LegislativeAnalyst's Office Summary Resolution Resolution - Opposing Initiative 21-0042A1 Resolution
Power Point Attachment
City Council/RSA Agenda 288 Tuesday, April 12, 2022
Stop the Corporate Loopholes Scheme
Deceptive Proposition Allows Major Corporations to Avoid Paying their Fair Share and Evade Enforcement when they Violate Environmental, Health & Safety Laws An association representing California’s wealthiest corporations — including oil, insurance, banks and drug companies — is behind a deceptive proposition aimed for the November 2022 statewide ballot. Their measure would create major new loopholes that allow corporations to avoid paying their fair share for the impacts they have on our communities; while also allowing corporations to evade enforcement when they violate environmental, health, safety and other state and local laws. Here’s why a broad coalition of local governments, labor and public safety leaders, infrastructure advocates, and businesses oppose the Corporate Loophole Scheme:

Gives Wealthy Corporations a Major Loophole to Avoid Paying their Fair Share - Forcing Local Residents and Taxpayers to Pay More • The measure creates new constitutional loopholes that allow corporations to pay far less than their fair share for the impacts they have on our communities, including local infrastructure, our environment, water quality, air quality, and natural resources – shifting the burden and making individual taxpayers pay more.

Allows Corporations to Dodge Enforcement When They Violate Environmental, Health, Public Safety and Other Laws
• The deceptive scheme creates new loopholes that makes it much more difficult for state and local regulators to issue fines and levies on corporations that violate laws intended to protect our environment, public health and safety, and our neighborhoods.

Jeopardizes Vital Local and State Services
• This far-reaching measure puts at risk billions of dollars currently dedicated to critical state and local services.
• It could force cuts to public schools, fire and emergency response, law enforcement, public health, parks, libraries, affordable housing, services to support homeless residents, mental health services and more. • It would also reduce funding for critical infrastructure like streets and roads, public transportation, drinking water, new schools, sanitation, utilities and more.

Opens the Door for Frivolous Lawsuits, Bureaucracy and Red Tape that Will Cost Taxpayers and Hurt Our Communities
• The measure will encourage frivolous lawsuits, bureaucracy and red tape that will cost local taxpayers millions — while significantly delaying and stopping investments in infrastructure and vital services.

City Council/RSA Agenda 289 Tuesday, April 12, 2022
Undermines Voter Rights, Transparency, and Accountability • This misleading measure changes our constitution to make it more difficult for local voters to pass measures needed to fund local services and local infrastructure.
• It also includes a hidden provision that would retroactively cancel measures that were passed by local voters — effectively undermining the rights of voters to decide for themselves what their communities need.
• It would limit voter input by prohibiting local advisory measures, where voters provide direction to politicians on how they want their local tax dollars spent.

City Council/RSA Agenda 290 Tuesday, April 12, 2022
CaliforniaCityFinance.Com
Fiscal and Program Effects of
Initiative 21-0042A1 on Local Governments
If Initiative 21-0042A1 is placed on the ballot and passed by voters, it will result in:
 Billions of local government fee and charge revenues placed at heightened legal peril. Related public service reductions across virtually every aspect of city, county, special district, and school services especially for transportation, and public facility use.  Hundreds of millions of dollars of annual revenues from dozens of tax and bond measures approved by voters between January 1, 2022 and November 9, 2022 subject to additional voter approval if not in compliance with the initiative.
 Indeterminable legal and administrative burdens and costs on local government from new and more empowered legal challenges, and bureaucratic cost tracking requirements.  The delay and deterrence of municipal annexations and associated impacts on housing and commercial development.
 Service and infrastructure impacts including in fire and emergency response, law enforcement, public health, drinking water, sewer sanitation, parks, libraries, public schools, affordable housing, homelessness prevention and mental health services.

1. Local Government Taxes and Services Threatened
With regard to taxes, Initiative 21-0042A1:
 Prohibits advisory, non-binding measures as to use of tax proceeds on the same ballot. o Voters may be less informed and more likely to vote against measures.  Eliminates the ability of special tax measures proposed by citizen initiative to be enacted by majority voter approval (Upland).
o Because the case law regarding citizen initiative special taxes approved by majority vote (Upland) is so recent, it is unknown how common these sorts of measures might be in the future. This initiative would prohibit such measures after the effective date of the initiative. Any such measures adopted after January 1, 2022 through November 8, 2022 would be void after November 9, 2023.
 Requires that tax measures include a specific duration of time that the tax will be imposed. This seems to require that all tax increases or extensions contain a sunset (end date). o This would require additional tax measures to extend previously approved taxes at additional cost to taxpayers.
 Requires that a tax or bond measure adopted after January 1, 2022 and before the effective date of the initiative (November 9, 2022) that was not adopted in accordance with the measure be readopted in compliance with the measure or will be void twelve months after the effective date of the initiative (November 9, 2023).
o If past election patterns are an indication, dozens of tax and bond measures approving hundreds of millions of annual revenues may not be in compliance and would be subject to reenactment.

Most will be taxes without a specific end date. Because there is no regularly scheduled election within the 12 months following the effective date of the initiative, measures not in compliance would need to be placed on a special election ballot for approval before November 9, 2023 or the tax will be void after that date. General tax measures would require declaration of emergency and unanimous vote of the governing board.
2217 Isle Royale Lane • Davis, CA • 95616-6616
Phone: 530.758.3952 • Fax: 530.758.3952
Rev. January 7, 2022
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 Requires voter approval to expand an existing tax to new territory (annexations). This would require additional tax measures and would deter annexations and land development in cities. o If a tax is "extended" to an annexed area without a vote after January 1, 2022, it will be void 12 months later until brought into compliance. Because there is no regularly scheduled election within the 12 months following the effective date of the initiative, such extensions for general taxes would, under current law, each require unanimous vote of the agency board to be placed on a special election ballot or would be void after November 9, 2023.

1.a. Number of Measures and Value of Local Taxes at Risk1 In 2020, voters in California approved 293 local tax and bond measures for cities, counties, special districts and schools (95 in March and 198 in November). The approved measures enacted $3.85 billion in new annual taxes including $1.3 billion for cities, $302 million for counties, $208 million for special districts (fire, wastewater, open space and transit districts), and $2.037 billion for schools (including for school bonds).

Most tax measures go to the ballot during a presidential or gubernatorial primary or general election in an even year. However, some tax measures are decided at other times. During 2019, there were 45 approved tax and bond measures (24 city, 14 special district, 7 school) adopting $154.0 million in new annual taxes ($124.0 million city, $10.5 million special district and $19.2 million school).

Most tax and bond measures comply with the new rules in Initiative 21-0042Amdt#1 except:
 Dozens of taxes would require end dates. This would require additional measures in future years to extend the taxes further. Very few extensions of existing local taxes fail.  Majority vote general tax measures could not be accompanied on the same ballot with an advisory, non-binding measure as to use of tax proceeds.  Special taxes placed on the ballot via citizen initiative would require two-thirds voter approval.

Bond measures have fixed terms. Historically, about 20 percent of other tax measures have included specific durations (i.e. sunsets). Advisory measures as to use of revenues are uncommon. I do not expect the provisions of 21-0042A1 to have any substantial effect on passage rates. However, some 2022 approved measures would likely have to put back on the ballot.

Based on history, a reasonable estimate of the annualized tax revenues estimated to be approved by 1 Source: Compilation and summary of data from County elections offices.

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voters in 2022 and placed at risk by this initiative is at least $1.5 billion, including $1.0 billion from cities and $500 million from counties and special districts. 2 1.b. Additional Costs and Public Service Effects of the Tax Provisions In addition to service delays and disruption due to new tax revenues placed at greater legal risk, there will be substantial additional costs for legal defense. The deterrence of taxes for annexations will delay and deter municipal annexations.

2. “Exempt Charges” (fees and charges that are not taxes) and Services Threatened With regard to fees and charges adopted after January 1, 2022, Initiative 21-0042A1:
 Subjects new fees and charges for a product or service to a new "actual cost” test defined as “(i) the minimum amount necessary to reimburse the government for the cost of providing the service to the payor, and (ii) where the amount charged is not used by the government for any purpose other than reimbursing that cost. In addition, subjects these same charges to a new, undefined, “reasonable” standard.
 Subjects fees and charges for entrance to local government property; and rental and sale of local government property to a new, undefined, “reasonable” test.  Subjects a challenged fee or charge to new, higher burdens of proof if legally challenged.  Prohibits a levy, charge or exaction regulating or related to vehicle miles traveled, imposed as a condition of property development or occupancy.

2.a. Value on New Local Government Fees and Charges at Risk3 Virtually every city, county, and special district must regularly (e.g., annually) adopt increases to fee rates and charges and revise rate schedules to accommodate new users and activities. Most of these would be subject to new standards and limitations under threat of legal challenge. Based on the current volume of fees and charges imposed by local agencies and increases in those fees simply to accommodate inflation, the amount of local government fee and charge revenue placed at risk is about $1 billion per year including those adopted since January 1, 2022. Of this $1 billion, about $570 million is for special districts, $450 million is cities, and $260 million is counties.4
Major examples of affected fees and charges are:

1. Nuisance abatement charges - such as for weed, rubbish and general nuisance abatement to fund community safety, code enforcement, and neighborhood cleanup programs.

2. Commercial franchise fees.

3. Emergency response fees - such as in connection with DUI.

4. Advanced Life Support (ALS) transport charges.

5. Document processing and duplication fees.

6. Transit fees, tolls, parking fees, public airport and harbor use fees.

7. Facility use charges, fees for parks and recreation services, garbage disposal tipping fees.

In addition to fees and charges, the measure puts fines and penalties assessed for the violation of state and 2 This does not include citizen initiative special tax approved by majority but not two-thirds. Because this approach is new, the number of these measures and amount of revenue involved cannot be estimated. 3 Source: California State Controller Annual Reports of Financial Transactions concerning cities, counties and special districts, summarized with an assumed growth due to fee rate increases (not population) of 2 percent annually. 4 School fees are also affected but the amount is negligible by comparison.

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local law at risk, making them taxes subject to voter approval under certain circumstances.

2.b. Additional Costs and Public Service Effects of the Fee/Charge Provisions In addition to service delays and disruptions due to fee and charge revenues placed at greater legal risk, there would be substantial additional costs for legal defense. The risk to fees and charges will make infrastructure financing more difficult and will deter new residential and commercial development. ***********
mc
City Council/RSA Agenda 294 Tuesday, April 12, 2022
The Taxpayer Protection and Government Accountability Act Initiative No. 21-0042A1
January 21, 2022
Summary: The measure limits the voters’ input, adopts new and stricter rules for raising taxes and fees, and makes it more difficult to hold state and local law violators accountable.

Limiting Voter Authority and Accountability
• Limits voter input. Prohibits local voters from providing direction on how local tax dollars should be spent by prohibiting local advisory measures. • Invalidates Upland decision that allows majority of local voters to pass special taxes. Taxes proposed by the Initiative are subject to the same rules as taxes placed on the ballot by a city council. All measures passed between January 2022 and November 2022 would be invalidated unless reenacted within 12 months.

Restricting Local Fee Authority to Provide Local Services • Franchise fees. Sets new standard for fees and charges paid for the use of local and state government property. The standard may significantly restrict the amount oil companies, utilities, gas companies, railroads, garbage companies, cable companies, and other corporations pay for the use of local public property. Rental and sale of local government property must be “reasonable” which must be proved by “clear and convincing evidence.”
• Except for licensing and other regulatory fees, fees and charges may not exceed the “actual cost” of providing the product or service for which the fee is charged. “Actual cost” is the “minimum amount necessary.” The burden to prove the fee or charge does not exceed “actual cost” is changed to “clear and convincing” evidence.

Restricting Authority of State and Local Governments to Issue Fines and Penalties for Violations of Law.
• Requires voter approval of fines, penalties, and levies for corporations and property owners that violate state and local laws unless a new, undefined adjudicatory process is used to impose the fines and penalties.

City Council/RSA Agenda 295 Tuesday, April 12, 2022
Restricting Local Tax Authority to Provide Local Services • Expanding existing taxes (e.g., UUT, use tax, TOT) to new territory (e.g., annexation) or expanding the base (e.g., new utility service) requires voter approval.
• City charters may not be amended to include a tax or fee. • New taxes can be imposed only for a specific time period. • Taxes adopted after January 1, 2022, that do not comply with the new rules, are void unless reenacted.
• All state taxes require majority voter approval.
• Prohibits any surcharge on property tax rate and allocation of property tax to state.

Other Changes
• No fee or charge or exaction regulating vehicle miles traveled can be imposed as a condition of property development or occupancy.

City Council/RSA Agenda 296 Tuesday, April 12, 2022
Preprinted L ogo will go here
January 19, 2022
Hon. Rob Bonta
Attorney General
1300 I Street, 17th Floor
Sacramento, California 95814
Attention: Ms. Anabel Renteria
Initiative Coordinator
Dear Attorney General Bonta:

Pursuant to Elections Code Section 9005, we have reviewed the proposed constitutional Taxpayer Protection and Government Accountability Act initiative (A.G. File No. 21-0042, Amendment #1).

Background
State Government
Taxes and Fees. This year’s state budget spends over $255 billion in state funds. Over 90 percent of the state budget is funded with revenues from taxes. These include, for example, sales taxes paid on goods and income taxes paid on wages and other sources of income. Much of the rest of the state budget is funded by fees and other charges. Examples include: (1) charges relating to regulatory activities; (2) charges for specific government services or products, like fees charged to drivers to improve roads; (3) charges for entering state property, such as a state park; and (4) judicial fines, penalties, and other charges. The State Constitution requires the state to set fees at a reasonable level, generally reflecting the costs of the services or benefits provided.

The state uses revenue from taxes and fees to fund a variety of programs and services, including education, health care, transportation, and housing and homelessness services.

Current Requirements to Approve Taxes and Fees. Under the State Constitution, state tax increases require approval by two-thirds of each house of the Legislature or a majority vote of the statewide electorate. The Legislature can reduce taxes with a majority vote of each house, provided the change does not result in an increase in taxes paid by any single taxpayer. In many cases, the Legislature has enacted statutes that delegate its authority to adjust fees and other City Council/RSA Agenda 297 Tuesday, April 12, 2022
Hon. Rob Bonta 2 January 19, 2022
charges to administrative entities, like state departments. In these cases, these charges can be increased or changed by the department within certain limits.

Local Government
Taxes and Fees. The largest local government tax is the property tax, which raises roughly $75 billion annually. Other local taxes include sales taxes, utility taxes, and hotel taxes. In addition to these taxes, local governments levy a variety of fees and other charges. Examples include parking meter fees, building permit fees, regulatory fees, and judicial fines and penalties.

In order to be considered a fee, the charge cannot exceed the reasonable costs to the local government of providing the associated product or service. Local governments use revenues from taxes and fees to fund a variety of services, like fire and police, public works, and parks.

Current Requirements to Approve Taxes and Fees. State law requires increases in local taxes to receive approval of the local governing body—for example, a city council or county board of supervisors—as well as approval of voters in that local jurisdiction. Most proposed taxes require a two-thirds vote of the local governing board before being presented to the voters.

Special taxes (those used for a specific purpose) require a two-thirds vote of the electorate while other types of taxes require a majority vote of the electorate. The majority-vote general taxes can be used for any purpose. Recent case law suggests that citizen initiative special taxes may be approved by majority vote, rather than a two-thirds vote. Currently, local governing bodies have the ability to delegate their authority to adjust fees and other charges to administrative entities, like city departments. In these cases, these charges can be increased or changed by the department within certain limits.

Proposal
This measure amends the State Constitution to change the rules for how the state and local governments can impose taxes, fees, and other charges.

State and Local Government Taxes
Expands Definition of Tax. The measure amends the State Constitution to expand the definition of taxes to include some charges that state and local governments currently treat as fees and other charges. For example, certain charges imposed for a benefit or privilege granted to a payer but not granted to those not charged would no longer be considered fees. As a result, the measure could increase the number of revenue proposals subject to the higher state and local vote requirements for taxes discussed below.

Requires Voter Approval for State Taxes. The measure increases the vote requirements for increasing state taxes. Specifically, the measure requires that legislatively proposed tax increases receive approval by two-thirds of each house and a majority vote of the statewide electorate.

Voters would still be able to increase taxes by majority vote of the electorate without legislative action, however. Any state tax approved between January 1, 2022 and the effective date of this measure would be nullified unless it fulfills the requirements of the measure.

Requirements for Approving Local Taxes. Whether sought by the local governing body or the electorate, the measure establishes the same approval requirements for increasing local City Council/RSA Agenda 298 Tuesday, April 12, 2022
Hon. Rob Bonta 3 January 19, 2022
special taxes. Any local tax approved between January 1, 2022 and the effective date of this measure would be nullified unless it fulfills the requirements of the measure.

Allowable Uses and Duration of State and Local Tax Revenues Must Be Specified. The measure requires state and local tax measures to identify the type and amount (or rate) of the tax and the duration of the tax. State and local government general tax measures must state that the revenue can be used for general purposes.

State and Local Government Fees
Requires the Legislature and Local Government Bodies to Impose State and Local Fees.

Fees would have to be imposed by a majority vote of both houses of the Legislature or local governing bodies. The measure would restrict the ability of state and local governments to delegate fee changes to administrative entities. The extent of these restrictions would depend on future court decisions. Any fee approved between January 1, 2022 and the effective date of this measure would be nullified unless it fulfills the requirements of the measure.

Some New State and Local Fees Could Not Exceed Actual Costs. For some categories of fees, if the Legislature or a local governing body wished to impose a new fee or make changes to an existing fee, the measure generally would require that the charge be both reasonable and reflect the actual costs to the state or local government of providing the service. The measure also specifies that actual cost should not exceed “the minimum amount necessary.” In many cases, existing fees already reflect the government’s actual costs. In other cases, some fees would have to more closely approximate the payer’s actual costs in order to remain fees. If a fee payer challenged the charge, the state or local government would need to provide clear and convincing evidence that the fee meets this threshold. State and local governments also would bear the burden of providing clear and convincing evidence that the levy is a fee—which is not subject to a vote by the electorate—and not a tax under the new definition.

Fiscal Effects
Lower State Tax and Fee Revenue. By expanding the definition of a tax, increasing the vote requirements for approving taxes, and restricting administrative changes to fees, the measure makes it harder for the Legislature to increase nearly all types of state revenues. The extent to which revenues would be lower under the measure would depend on various factors, most notably future decisions made by the Legislature and voters. For example, requirements for legislative approval of fee increases currently set administratively could result in lower fee revenues, depending on future votes of the Legislature. That lower revenue could be particularly notable for some state programs largely funded by fees. Due to the uncertainty of these factors, we cannot estimate the amount of reduced state revenue, but it could be substantial.

Lower Local Government Tax and Fee Revenue. Compared to the state, local governments generally face greater restrictions to raising revenue. By expanding the definition of taxes and restricting administrative changes to fees, the measure would make it somewhat harder for local governments to raise revenue. Consequently, future local tax and fee revenue could be lower than they would be otherwise. The extent to which revenues would be lower is unknown, but City Council/RSA Agenda 299 Tuesday, April 12, 2022
Hon. Rob Bonta 4 January 19, 2022
fees could be more impacted. The actual impact on local government revenue would depend on various factors, including future decisions by the courts, local governing bodies, and voters.

Possible Increased State and Local Administrative Costs to Change Some Fee Levels. In some cases, state and local departments would need to develop methods for setting fees to reflect actual costs if the Legislature or local governing bodies wanted to change those fees in the future. Estimating actual costs by program and fee source could involve some added workload for those state and local departments, which likely would be supported by fee revenue. The extent of these administrative costs would depend on (1) whether the state and local governments determine a fee increase is needed in order to maintain their current level of programs and services funded through fee revenue and (2) future court decisions.

Summary of Fiscal Effects. We estimate that this measure would have the following major fiscal effects:
• Lower annual state and local revenues, potentially substantially lower, depending on future actions of the Legislature, local governing bodies, voters, and the courts.

Sincerely,
_____________________________
for Gabriel Petek
Legislative Analyst
_____________________________
for Keely Martin Bosler
Director of Finance
City Council/RSA Agenda 300 Tuesday, April 12, 2022

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UNION CITY OPPOSING INITIATIVE 21-0042A1, THE TAXPAYER PROTECTION AND GOVERNMENT

ACCOUNTAIBLITY ACT
WHEREAS, an association representing California’s wealthiest corporations is behind a deceptive proposition aimed for the November 2022 statewide ballot; and WHEREAS, the measure creates new constitutional loopholes that allow corporations to pay far less than their fair share for the impacts they have on our communities, including local infrastructure, our environment, water quality, air quality, and natural resources; and WHEREAS, the measure includes undemocratic provisions that would make it more difficult for local voters to pass measures needed to fund local services and infrastructure, and would limit voter input by prohibiting local advisory measures where voters provide direction on how they want their local tax dollars spent; and
WHEREAS, the measure makes it much more difficult for state and local regulators to issue fines and levies on corporations that violate laws intended to protect our environment, public health and safety, and our neighborhoods; and
WHEREAS, the measure puts billions of dollars currently dedicated to state and local services at risk, and could force cuts to public schools, fire and emergency response, law enforcement, public health, parks, libraries, affordable housing, services to support homeless residents, mental health services, and more; and
WHEREAS, the measure would also reduce funding for critical infrastructure like streets and roads, public transportation, drinking water, new schools, sanitation, and utilities.

NOW, THEREFORE, BE IT RESOLVED that the City of Union City, opposes Initiative 21- 0042A1.

BE IT FURTHER RESOLVED, that the City of Union City will join the NO on Initiative 21- 0042A1 coalition, a growing coalition of public safety, labor, local government, infrastructure advocates, and other organizations throughout the state.

BE IT FURTHER RESOLVED, the City Council directs staff to email a copy of this adopted resolution to the League of California Cities (Cal Cities) at [email protected].

City Council/RSA Agenda 301 Tuesday, April 12, 2022
PASSED, APPROVED, AND ADOPTED by the City Council of the City of Union City at a regular meeting held on the 12th day of April 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED:
_________________________

CAROL DUTRA-VERNACI
Mayor
ATTESTED: APPROVED AS TO FORM:
_________________________ _________________________
ANNA M. BROWN KRIS KOKOTAYLO
City Clerk City Attorney
City Council/RSA Agenda 302 Tuesday, April 12, 2022
Resolution to Oppose Initiative 21-0042A1,
Taxpayer Protection and
Government Accountability Act
April 12, 2022
Item 7.a.

City Council/RSA Agenda 303 Tuesday, April 12, 2022
2 Initiative Background
• Amend State Constitution – November 2022• Restrict ability to approve or collect taxes, fees, and other revenues
• State, county, local governments and electorate
• League of California Cities – seeking Resolution to oppose• Sponsored by the California Business Roundtable City Council/RSA Agenda 304 Tuesday, April 12, 2022
3 Impact
• Limit Voter Authority and Accountability
• Prohibits advisory measures that allow local voters to provide direction • Invalidates Upland decision that allows local voter-sponsored measures to pass special taxes
• Restricts Local Fee Authority to Provide Local Services • Franchise Fees. Sets new standards for fees and charges for use of government property
• Limits how fees and charges may be determined
• Restricts Authority of State and Local Governments to issues Fines and Penalties
• Requires voters to approve fines, penalties, and levies for corporation and property owners that violate state and local laws, unless a new undefined legal process is imposed City Council/RSA Agenda 305 Tuesday, April 12, 2022
4 Impact
• Restricts Tax Authority to Provide Local Services
• Expanding existing taxes into annexed areas requires voter approval • City charters may not be amended to include a tax or fee• Taxes can only be imposed for a specific timeframe• Taxes adopted after January 1, 2022 that do not comply are void unless readopted – retroactive
• All state taxes require voter approval• Prohibits any surcharge on property tax rate to state • Disallows VMT fees/charges as a condition of development • VMT is a shift in state CEQA guidelines
• Evaluates projects on VMT and no longer LOS
• New development evaluated by VMT to align transportation impacts with state’s greenhouse gas goals
• Encourages development in urbanized areas and reduce automobile use City Council/RSA Agenda 306 Tuesday, April 12, 2022
5 Opposition to Initiative
• Public safety organizations• Labor organizations• Several affiliations of governments • Counties• Special Districts• Contract Cities• League of California Cities • Over 85 California Cities
City Council/RSA Agenda 307 Tuesday, April 12, 2022
6 Recommendation
• Adopt a Resolution opposing the Initiative 21-0042A1, Taxpayer Protection and Government Accountability Act
that would limit the voters’ input, adopt new and stricter rules for raising taxes and fees, and make it more difficult to hold state and local law violators accountable.

City Council/RSA Agenda 308 Tuesday, April 12, 2022
Agenda Item
DATE: 4/12/2022
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: MARK EVANOFF, DEPUTY CITY MANAGER
SUBJECT: INFORMATIONAL REPORT ON THE SOLID WASTE AND RECYCLING COLLECTION SERVICES RATES FOR FISCALYEAR 2022-2023 AND RELATED IMPACT OF SB 1383 COMPLIANCE This is an informational report on the proposed Solid Waste and Recycling collection service rates for FiscalYear 2022-2023 and related impact of SB 1383 compliance.

The City Council is requested to: 1) ask clarifying questions about the proposed collection service rates; 2) provide direction to staff to prepare a Proposition 218 Notice for issuance to all property owners; and, 3) provide direction to staff to prepare an update to the City Council in December 2022 timeframe on SB 1383 compliance, potential recommendations for collection services changes, and details on purchase and deployment of SB 1383 colorcompliant containers.

STRATEGIC PLAN ALIGNMENT
Goal D: Environmental Sustainability and Infrastructure Strategy 12, Explore additional opportunities to exceed State Waste Reduction targets.

BACKGROUND
The City’s Franchise Agreements for solid waste and recycling collection services with Republic Services (Republic) and Tri-City Economic Development Corporation (Tri-CED), prescribe an annualcompensation adjustment process. The compensation adjustment for FY 22-23 results in rate increases effective July 1, 2023. Solid waste fees for residentialcustomers are billed through the property tax rolland commercialcustomers are billed directly by Republic Services. California Constitution Article XIII D § 6(a), commonly referred to as Proposition (Prop) 218 requires written notification to allaffected property owners of the proposed rate increase, and a 45-day period for property owners to submit written protests if they oppose the proposed rate adjustments.

The City’s Franchise Agreements with Republic and Tri-CED specify that solid waste, compost (organics) and recycling rates shall be adjusted annually per the compensation adjustment applications submitted by each company. Residentialand commercial service rates are set to generate sufficient revenue to compensate the two collection service providers.

Staff is nearing completion of its review of the Compensation Adjustment Applications for FY 22-23 submitted by Republic and Tri-CED. The preliminary results are shared in this staff report. The adjustment to contractor’s compensation for FY 22-23 is determined using the cost-based adjustment method which occurs every third year of the current Franchise Agreements. The last cost-based adjustment transpired for FY 18-19.

Staff’s comprehensive review and analysis of the Compensation Adjustment Applications entails verification of the accuracy and reasonableness of all aspects of the contractors' compensation applications. This review applies all necessary corrections, which will be disclosed to the contractors. The contractors and staff willagree upon allchanges.

This is an informational report on the projected compensation adjustment for FY 22-23 and the potential rate impact of pursuing discretionary compliance of regulatory standards prescribed in the SB 1383 (Short-lived Climate Pollutants Act) Regulations. The specific compliance referenced is related to the container color-coding standards in the Regulations which require recycling containers to be blue, compost (organics) containers to be green, and garbage containers to be black. The City’s current gray recycling and blue garbage containers are not in compliance. However, color bin compliance is not mandated until the year 2036.

DISCUSSION
The proposed rates include City franchise fees which contribute to the general fund and compensation for specific City expenses including a vehicle impact fee, a stormwater mitigation compliance fee, an AB 939 fee, a franchise agreement administrative fee, and a SB 1383 fee. The AB 939, SB 1383 and franchise agreement administrative fees are used to pay for staff salaries and related program expenses to ensure the City’s compliance with State and County mandated waste reduction and recycling activities.

City Council/RSA Agenda 309 Tuesday, April 12, 2022
Union City homeowners pay for curbside collection of garbage, compost and recycling by way of specialassessments applied to annual property tax statements issued by the Alameda County Tax Collector. The fees for basic service are based on weekly servicing of a 35-gallon garbage cart, a 64-gallon recycling cart and a 96-gallon organics cart. Commercialand Non-Parcelized Multi-Family customers are billed directly by Republic.

SB 1383 Container Color-Coding Standards
The City’s current color scheme for containers used by residentialand commercialcustomers is not compliant with the new SB 1383 standards. The new color-coding standards require recycling containers to be blue, compost containers to be green, and garbage containers to be black. The City’s residential customers currently have blue garbage containers, gray recycling containers and green compost containers, while commercialcustomers have blue garbage containers, white recycling containers and green compost containers. Therefore, a citywide shift from blue to black for garbage and from gray/white to blue for recycling, is necessary to achieve compliance.

While the new requirements will not be enforced until the year 2036, it potentially befits the City to implement the cart change sooner rather than later for various reasons including:consistency with neighboring jurisdictions; opportunity to leverage Countywide public education efforts; better return on investment of the City’s education efforts by promoting the new color scheme in lieu of one that willeventually become obsolete; and, an increase in diversion associated with the roll-out of new containers citywide. However, purchasing and deploying color-compliant containers is currently discretionary and will require a capitalexpense of approximately $3,300,000 (amortized for ten years, approximately $330,000 annual rate impact). Staff recommends that the consideration of new bins be postponed at this time. Later this year, staff will return to the Council with with an update on SB 1383 compliance, possible recommendations on changes to collection services delivery, and detailed cost and implementation plans to purchase and deploy color-compliant containers.

FY22-23 Preliminary Rate Adjustment With and Without Color Compliant Containers Expense Staff’s preliminary review of the Republic and Tri-CED compensation and rate adjustment applications for FY 22-23 include:

1.55% increase in the compensation paid to Republic Services

6.11% increase in compensation paid to Tri-CED
Tri-CED Recycling Processing Surcharge (RPS) annualadjustment of $437,035 is a separate line item previously approved by the City Counciland will not increase.

These adjustments to compensation result in a rate impact of a 2.76% total increase to residentialcustomers and a 1.55% total decrease for commercialcustomers as illustrated in the upper portion of Table 1 depicted below.

The highlighted (center) section of Table 1 includes the projected capitalexpense of approximately $3,300,000 for deployment of new containers to achieve SB 1383 color-coding compliance as an itemized expense for single family residentialand commercialcustomers. The anticipated rate impact will be an approximate 1.98% rate increase to residentialcustomers and a 0.95% increase for commercialcustomers. This rate impact assumes amortizing these new color-coding compliant containers over ten-years which is feasible despite the current Franchise Agreements only having three years of current term left.

The lower third of Table 1 shows the projected rate increase for commercialand residentialcustomers if the proposed cost-based rate adjustment and the new containers expense were to be authorized together. Rates for single family customers would increase approximately 4.74% with new color compliant carts vs. 2.76% without new carts. Rates for commercialcustomers would increase 2.55% with new color compliant dumpsters vs. 1.55% without new color compliant dumpsters.

TABLE 1
Staff is finalizing its review of the FY 22-23 Compensation Applications submitted by Republic Services and Tri-CED and shall return to Council with recommendations for a rate adjustment at the April 28, 2022 regular Council meeting. The City Council willalso be asked to issue the Proposition 218 City Council/RSA Agenda 310 Tuesday, April 12, 2022
recommendations for a rate adjustment at the April 28, 2022 regular Council meeting. The City Council willalso be asked to issue the Proposition 218 Notice to all property owners disclosing the proposed rate increase for FY 22-23. This is a legal requirement when Solid Waste rates are increased. The Proposition 218 Notice process requires that a 45-day period transpire from the mailing of the Notice to returning to Council to tally the rate increase protest votes and to consider adopting the adjusted compensation and new rates. If the Proposition 218 Notice is mailed soon after the April 28, 2022 meeting as anticipated, Staff will return to Councilat the June 14, 2022 meeting to conclude the rate setting process.

Next Steps
To facilitate the FY 22-23 rate setting process, staff will prepare a Proposition 218 Notice for distribution to all property owners and present it to Councilat the April 28, 2022 Council meeting for consideration to authorize distribution. Staff will then return to Councilat the June 14, 2022 Council meeting to convene a public hearing to tally the Proposition 218 protest votes and seek Council’s approval of the adjustment to compensation and rate increase for FY 22-23.

With Councilconcurrence, staff will return to Council in December with an update on SB 1383 compliance, possible recommendations on changes to collection services delivery, and detailed cost and implementation plans to purchase and deploy color-compliant containers.

FISCAL IMPACT
This is an informational report with no impact on the General Fund.

Funds to cover the expense of preparation, printing and mailing the Public Hearing Notice to 16,000 households and commercialcustomers are available in Solid Waste Management Fund Account #2030-00000-41407. No General Fund monies will be used.

The annualadjustment to contractor’s compensation prescribed in the Franchise Agreement results in an increase in the totalamount of City fees generated.

Projected revenues from City fees in FY 22-23 are $6,740,748 through Republic Services and $727,346 from Tri-CED.

It is important to note that these are unaudited, preliminary revenue figures based on comparisons of proposed past revenues and are therefore subject to change. City Councilapproval of the final rates will become effective July 1, 2022.

RECOMMENDATION
This is an informational report.

The City Council is asked to:

1. Ask clarifying questions about the proposed rate increase.

2. Direct staff to prepare a Proposition 218 Notice for mailing to all property owners disclosing the increase in rates for Council to consider authorizing distribution at the April 28, 2022 Council meeting.

3. Provide direction to staff to return to Council in December 2022 timeframe with an update on SB 1383 compliance, potential recommendations to changes in collection service delivery, and detailed cost and implementation plans to purchase and deploy new color-compliant containers.

Prepared by:

Cliff Feldman, Recycling and Solid Waste Manager
Submitted by:

Cliff Feldman, Recycling and Solid Waste Manager
ATTACHMENTS:

Description Type
Power Point Attachment
City Council/RSA Agenda 311 Tuesday, April 12, 2022
Agenda Item 7b
Informational Report on Solid Waste
and Recycling Collection Rates for
FY 22-23 and Related Impact of SB 1383
Compliance
City Council/RSA Agenda 312 Tuesday, April 12, 2022
2 Solid Waste, Compost and Recycling Collection Services Rates FY 22-23 Franchise Agreements with Republic Services and Tri-CED Tri-CED Recycling Republic Services
• Compensation paid to contractor’s and rates charged to customers are adjusted annually and approved by the City Council.

City Council/RSA Agenda 313 Tuesday, April 12, 2022
3 SB 1383 Container Color-Coding Mandate
SB 1383 Compliant Residential Carts and Commercial Bins • SB 1383 container color-coding requirements:
• Garbage = black (currently blue for residential and commercial) • Recycling = blue (currently gray for residential and white for commercial)
• Compost (Organics) = green (currently compliant)
Solid Waste, Compost and Recycling Collection Services Rates FY 22-23 City Council/RSA Agenda 314 Tuesday, April 12, 2022
4 SB 1383 Container Color-Coding Mandate
SB 1383 Container Color-Coding for Residential Cart
s
Solid Waste, Compost and Recycling Collection Services Rates FY 22-23 City Council/RSA Agenda 315 Tuesday, April 12, 2022
5 FY 22-23 Preliminary Rate Impact
Solid Waste, Compost and Recycling Collection Services Rates FY 22-23 FY 21/22
Approved
FY 22/23
Proposed
Rate
Impact
Rate
Impact
Percent
Tri-CED and Republic Services Combined Single-Family Monthly Rate $54.37 $55.87 $1.50 2.76%Republic Services Commercial Garbage 3cy Bin 1x/wk Monthly Rate $434.94 $441.68 $6.74 1.55%Republic Services Commercial Recycling or Organics 3cy Bin 1x/wk Monthly Rate $260.95 $265.00 $4.05 1.55%Tri-CED & Republic Services Single-Family Combined Monthly Rate $54.37 $55.44 $1.07 1.98%Republic Services Commercial Garbage 3cy Bin 1x/wk Monthly Rate $434.94 $439.05 $4.11 0.95%Republic Services Commercial Recycling or Organics 3cy Bin 1x/wk Monthly Rate $260.95 $263.42 $2.47 0.95% Tri-CED & Republic Services Combined Single-Family Monthly Rate $54.37 $56.94 $2.57 4.74%Republic Services Commercial Garbage 3cy Bin 1x/wk Monthly Rate $434.94 $445.80 $10.86 2.50%Republic Services Commercial Recycling or Organics 3cy Bin 1x/wk Monthly Rate $260.95 $267.46 $6.51 2.50%
Combined Tri-CED and Republic Services Monthly Rates
Proposed
Increase by TriCED & Republic
Without New
Carts
With New Carts
Only
Proposed
Increase by TriCED & Republic
AND New Carts
City Council/RSA Agenda 316 Tuesday, April 12, 2022
6 FY 22-23 Rate Setting and Next Steps
Potential Next Steps• April 26, 2022 - Council consideration to issue Proposition 218 Notice informing property owners of Solid Waste, Compost and Recycling rate increase for FY 22-23 • June 14, 2022 – Council consideration of contractor’s compensation adjustment and rate increase for FY 22-23
• Public Hearing to tally Proposition 218 protest votes• Close public hearing and consider rate increase and changes to Master Fee Schedule • January 2023 – Presentation to Council
• Update on SB 1383 compliance• Possible collection service delivery changes• Detailed expense and plans to purchase and deploy color-compliant containers (carts and bins)
Solid Waste, Compost and Recycling Collection Services Rates FY 22-23 City Council/RSA Agenda 317 Tuesday, April 12, 2022
7 FY 22-23 Rate Setting and Next Steps
RecommendationThe City Council is asked to:• Ask clarifying questions about the proposed rate increase• Direct staff to prepare a Proposition 218 Notice for mailing to all property owners disclosing the proposed rate increase for Council to consider at the April 26, 2022 Council meeting • Provide direction to staff to return to Council in January 2023 with updates regarding:
• SB 1383 compliance• Potential collection service delivery recommendations• Detailed cost and implementation plans to purchase and deploy color-compliant containers
Solid Waste, Compost and Recycling Collection Services Rates FY 22-23 City Council/RSA Agenda 318 Tuesday, April 12, 2022
Agenda Item
DATE: 4/12/2022
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: JACKIE ACOSTA, FINANCE DIRECTOR
SUBJECT: INFORMATIONAL REPORT ON THE FISCALYEAR 2020-2021

PRELIMINARYYEAR-END FINANCIAL RESULTS OF THE GENERAL
FUND;AND ADOPTION OF A RESOLUTION AUTHORIZING THE USE OF FIFTY PERCENT (50%) OF THE GENERAL FUND’S FISCALYEAR 2020- 2021 UNANTICIPATED SAVINGS TO FUND UNFUNDED LIABILITIES

AND AUTHORIZING THE USE OF THE REMAINING FIFTY PERCENT
(50%) FOR REINVESTMENT IN CURRENTLY UNFUNDED, ONE-TIME,

CAPITAL PROJECTS
Staff recommends that the City Council review the FY 2020-2021 preliminary year-end financial results of the General Fund and adopt a resolution authorizing the use of fifty percent (50%) of the unanticipated savings of approximately $5.4 million to fund unfunded liabilities associated with the City’s retirement obligations through CalPERS and/or other post-employment benefits such as retiree medical obligations and use the remaining fifty percent (50%) for reinvestment in currently unfunded, one-time, capital projects, including:

Information Systems technology to update and upgrade the financial, building and planning permit, and human resources information systems software; and also to address deferred maintenance in city facilities.

STRATEGIC PLAN ALIGNMENT
This staff report aligns with GoalA: Financial Stability and Sustainability.

BACKGROUND
The City is exiting an extraordinary two years of impacts on City operations and its finances. In September 2019, the City suffered a ransomware cyberattack that crippled computer systems citywide. The City Council chose to not pay the ransom and instead committed to rebuilding the City’s computer infrastructure. This incident was followed by the defeat at the polls in March 2020 of the Public Safety Parcel Tax renewal, which created a budget shortfall of $4.2 million. Both trials, though, were quickly overshadowed by the event of our lifetime – a global pandemic that took lives and threatened the economy. It is against this backdrop that we City Council/RSA Agenda 319 Tuesday, April 12, 2022
report to the Council on the financial results from
FY 2020-2021.

On an annual basis, staff provides the City Council with a summary of the City’s preliminary year-end financial results. Since the cyberattack in September 2019, Finance has been significantly behind in closing the books each year because it took many months for staff to rebuild the City’s financial records that were lost in the cyberattack. Staff is still in the process of closing the FY 2020-2021 books and preparing for the annualaudit, and there are still financial actions that will be posted, so the exact final year-end amount may change somewhat. However, staff’s recommendation is to comply with our financial policy and use fifty percent (50%) of the unanticipated savings to fund unfunded liabilities associated with the City’s retirement obligations through CalPERS and/or other post-employment benefits such as retiree medical obligations. Staff also recommends using the remaining fifty percent (50%) for reinvestment in currently unfunded, one-time, capital projects, including technology investments.

DISCUSSION
The General Fund actual year-end results, as of today, and unaudited, are summarized in Table 1 below, and show that the City has realized approximate savings of $5,404,644.

Table 1

GENERAL FUND
FY2020-2021

YEAR-END

ACTUALS
REVENUES $60,809,015
EXPENDITURES $55,404,371
SAVINGS $5,404,644
The General Fund savings in FY 2020-2021 are a direct result of the COVID-19 pandemic. Had there not been a worldwide pandemic, the year-end results of the General Fund would have been more closely aligned with the FY 2020-2021 adopted budget which anticipated a $1.2M shortfall. The FY 2020-2021 savings have resulted from salary and benefit savings from the closure of almost all parks and recreation programs, not filling vacant (and non-essential) positions due to the economic uncertainty caused by the pandemic and projects, programs, and contracts that were postponed. A look at the budget to actual numbers for FY 2020-2021, shown in Table 2 below, and an analysis of the major variances will highlight why the City achieved these onetime savings in FY 2020-2021.

Table 2

GENERAL FUND
FY2020-2021
BUDGET
FY2020-2021

YEAR-END

ACTUALS

BUDGET VS

ACTUALS
REVENUES $60,578,153 $60,809,015 $230,862
EXPENDITURES $61,766,402 $55,404,371 $6,362,031
(SHORTFALL)/SAVINGS ($1,188,249) $5,404,644 $6,592,893
The first column entitled FY 2020-2021 Budget is the FY 2020-2021 budget that was adopted on May 26, 2020 (the second year of the biennial budget). The second column entitled FY 2020-2021 Year-End Actuals are the actual revenues and expenditures recorded in the financial system as of April 8, 2022 (pre-close and unaudited). The last column entitled Budget vs Actuals represents the difference between the FY 2020-2021 City Council/RSA Agenda 320 Tuesday, April 12, 2022
Budget and the FY 2020-2021 Year-End Actuals.

When comparing budget to actuals, FY 2020-2021 revenues are approximately $230,862 more than the budget estimates and FY 2020-2021 expenditures are approximately $6.3 million less than the adopted budget.

To understand more clearly why the City has ended Fiscal Year 2020-2021 with $5.4 million in one-time savings, a closer look at the variances between the adopted budget and the actual revenues and expenditures must be taken.

REVENUES:

When combining all budget to actual variances for General Fund revenues, the net result is only a small positive variance of $230,862, However, the reality is that many General Fund revenues performed significantly worse than estimated due to the pandemic, while some revenues performed better than expected. Additionally, the City received some unanticipated revenues authorized by the Federal Government, and distributed by the State, to assist cities during the pandemic. A summary of those positive and negative revenue variances that, when combined, make up the $230,862 positive revenue variance is shown in Table 3:

Table 3
Revenue Source (Under)/Over Estimate
Transient Occupancy Tax (TOT) ($1,492,750)
Cannabis Cultivation ($800,000)
Parking Citations ($380,382)
Parking Meters ($351,817)
Parking Permits ($49,497)
Gym Memberships ($333,480)
Gym Facility Rentals ($64,300)
Property Tax $623,111
Utility Users’ Tax $1,026,166
Gain on Sale of Real Estate $631,299
Encroachment Permits $388,127
Plan Check Fees $451,009
State Coronavirus Relief Fund $1,075,923
Net Other Accounts ($492,547)
Total Budget-to-Actual Variances $230,862
The revenue shortfalls are largely due to the pandemic. Hotel occupancy taxes were down significantly as travel became almost non-existent. Gym memberships and facility rental revenues were down because community centers and recreation programs were closed. Parking citation, parking meter and parking permit revenues were down due to the significant shift to people working from home and not taking public transportation (BART) where the City’s parking lots are located. Additionally, the budgeted revenue from the cannabis cultivation permits did not materialize. What helped to offset these significant revenue losses were the better-than-expected performance of property taxes, encroachment permit fees, plan check fees, the newly-approved utility users’ tax, the sale of City-owned property and the Coronavirus Relief funds provided by the Federal government through the State of California.

EXPENDITURES:

Staff implemented cost cutting measures with an expected $2 million shortfall in revenues from the pandemic and the $4.2 million loss from the Public Safety Parcel Tax that was defeated in March 2020.

In 2020, the City also continued to feel the impacts from the September 2019 cyberattack that required the City Council/RSA Agenda 321 Tuesday, April 12, 2022
rebuilding of the financial systems. Financial data was not complete and audits from previous fiscal years were significantly delayed; hence, the City proceeded cautiously with regards to City finances For example, the City did not contribute towards unfunded retirement liabilities during this difficult period. The last contribution towards our unfunded liabilities was in 2019. The lack of staffing has continued to slow the City’s recovery and the implementation of capital projects and programs. Staff is hopeful that through 2022 the City will fill vacancies and reinvest. However, as the Council is aware, the market for employees is very tight.

A summary of the significant budget-to-actual variances that make up the $6.3 million expenditure savings is shown in Table 4 below. These are one-time savings:

Table 4
Expenditure Category Savings Amount
Full-Time Pay $1,547,544
Part-Time Pay $486,239
CalPERS Retirement $992,614
Health Insurance $388,978
Professional/Consulting Services $453,466
Contractual Services $1,473,015
Vehicle Maintenance $172,403
Utilities $320,320
Travel & Training $258,552
Net Other Accounts $268,900
Total Budget-to-Actual Variance $6,362,031
The stay-at-home order was firmly in place as the City navigated COVID-19 health orders for employees, which included: closing parks and city facilities, staggering public safety employee shifts to minimize possible infections; and having employees work from home. Vacancies for non-essential staff were not filled and seasonal staff were not hired. During the pandemic, some staff retired, moved out of the area, or resigned. For those positions that the City sought to fill, the employment market proved very challenging. As shown above, approximately $3.4 million was saved in personnel costs alone. In 2020, recreation staff who normally supported the recreation services and the community centers were reassigned to support education and social service efforts: programs to support students who could not attend school, food giveaways, senior lunch programs, and outreach to senior residents who were isolated by the stay-at-home order. During the summer, a limited recreation program was provided that supported working families who could not stay home.

Several contracts were put on hold or postponed. In addition, with the imposed stay-at-home order mandated by the Alameda County Health Department, travel and trainings for all staff, including public safety, were suspended; police academies and police programs were canceled; and utility savings were incurred as a result of closed facilities and reduced staffing.

SUMMARY:

The one-time savings of approximately $5,404,644 realized in FY 2020-2021 and shown above are the result of the City’s very cautious approach to spending due to the lack of financial information caused by the cyberattack and the pandemic.

Interestingly, the cutbacks during the pandemic do illustrate what the fiscal impact would be if the half-cent sales tax is not renewed. The City would need to make budget reductions of nearly $7 million dollars in expenditures when the sales tax expires in April 2025. These reductions would be similar to the reduced staffing, reduced services, and lack of reinvestment in City facilities that was felt during FY 2020-2021, except that it would be ongoing. We are now only beginning to return to pre-pandemic and pre-cyberattack levels of City Council/RSA Agenda 322 Tuesday, April 12, 2022
staffing and service.

Based on the estimated, preliminary year-end financial results of approximately $5.4 million in savings, staff is requesting City Council’s approval of staff’s recommended use of these General Fund savings. Per the City’s adopted financial policies, “Unanticipated annual surpluses in the General Fund may be used in the following fiscal year to fund unfunded liabilities associated with the City’s retirement obligations through CalPERS and/or other post-employment benefits such as retiree medical obligations subject to the following:

1. General Fund reserves exceed the minimum reserve policy of 20% of annual operating expenditures, and 2) Limited to 50% of the unanticipated annual surplus.” Following this financial policy, staff recommends that the City use 50% of the finalamount of the
FY 2020-2021 unanticipated savings as an additional deposit to our pension and OPEB trust accounts with PARS. As noted, the last deposit the City made to our pension and OPEB trust funds was in 2019.

Additionally, staff recommends that that the remaining fifty percent (50%) be programmed for reinvestment in currently unfunded, one-time, capital projects, including: Information Systems technology to update and upgrade the financial, building and planning permit, and human resources information systems software and to address deferred maintenance at City facilities.

FISCAL IMPACT
This staff report provides preliminary year-end financial results of the General Fund for FY 2020-2021 and recommends the use of the General Fund’s unanticipated savings for efforts to continue to pay down the City’s unfunded pension and OPEB liabilities, in conformance with the City’s approved financial policies, as wellas for currently unfunded, one-time, capital projects.

RECOMMENDATION
Staff recommends that the City Counciladopt a resolution authorizing the use of fifty percent (50%) of the FY 2020-2021 unanticipated savings of approximately $5.4 million to fund unfunded liabilities associated with the City’s retirement obligations through CalPERS and/or other post-employment benefits such as retiree medical obligations and the use of the remaining fifty percent (50%) for reinvestment in currently unfunded, one-time, capital projects, including: Information Systems technology to update and upgrade the financial, building and planning permit, and human resources information systems software and to address deferred maintenance at City facilities.

Staff will return to Council for authorization prior to any capitalexpenditures more than $75,000.

Prepared by:

Jackie Acosta, Finance Director
Submitted by:

Jackie Acosta, Finance Director
ATTACHMENTS:

Description Type
Resolution approving the use of FY2020-2021 one-time savings in the General Fund
Resolution
City Council/RSA Agenda 323 Tuesday, April 12, 2022
Power Point Attachment
City Council/RSA Agenda 324 Tuesday, April 12, 2022
RESOLUTION NO.

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UNION CITY

ADOPTING A RESOLUTION AUTHORIZING THE USE OF FIFTY
PERCENT (50%) OF THE GENERAL FUND’S FISCAL YEAR 2020-2021

UNANTICIPATED SAVINGS TO FUND UNFUNDED LIABILITIES AND
AUTHORIZING THE USE OF THE REMAINING FIFTY PERCENT (50%)

FOR REINVESTMENT IN CURRENTLY UNFUNDED, ONE-TIME,

CAPITAL PROJECTS
WHEREAS, the City is exiting an extraordinary two years of impacts on City operations and its finances. In September 2019, the City suffered a ransomware cyberattack that crippled computer systems citywide. The City Council chose to not pay the ransom and instead committed to rebuilding the City’s computer infrastructure. This incident was followed by the defeat at the polls in March 2020 of the Public Safety Parcel Tax renewal, which created a budget shortfall of $4.2 million. Both trials, though, were quickly overshadowed by the event of our lifetime – a global pandemic that took lives and threatened the economy; and WHEREAS, on an annual basis, staff provides the City Council with a summary of the City’s preliminary year-end financial results. Since the cyberattack in September 2019, Finance has been significantly behind in closing the books each year because it took many months for staff to rebuild the City’s financial records that were lost in the cyberattack. Staff is still in the process of closing the FY 2020-2021 books and preparing for the annual audit, and there are still financial actions that will be posted, so the exact final year-end savings amount may change somewhat; and WHEREAS, the General Fund actual year-end results, as of today, and unaudited, show that the City has realized approximate savings of $5,404,644; and WHEREAS, the General Fund savings in FY 2020-2021 are a direct result of the COVID-19 pandemic and the City’s very cautious approach to spending due to the lack of financial information caused by the cyberattack and the pandemic. Had there not been a worldwide pandemic, the year-end results of the General Fund would have been more closely aligned with the FY 2020-2021 adopted budget which anticipated a $1.2 million shortfall. The FY 2020-2021 savings have resulted from salary and benefit savings from the closure of almost all parks and recreation programs, not filling vacant (and non-essential) positions due to the economic uncertainty caused by the pandemic and projects, programs, and contracts that were postponed; and
WHEREAS, based on the estimated, preliminary year-end financial results of approximately $5.4 million in savings, staff is requesting City Council’s approval of staff’s recommended use of these General Fund savings. Per the City’s adopted financial policies, “Unanticipated annual surpluses in the General Fund may be used in the following fiscal year to fund unfunded liabilities associated with the City’s retirement obligations through CalPERS and/or other post-employment benefits such as retiree medical obligations subject to the following:
1) General Fund reserves exceed the minimum reserve policy of 20% of annual operating expenditures, and 2) Limited to 50% of the unanticipated annual surplus.” Following this financial policy, staff recommends that the City use 50% of the final amount of the FY 2020-2021 City Council/RSA Agenda 325 Tuesday, April 12, 2022
unanticipated savings as an additional deposit to our pension and OPEB trust accounts with PARS; and
WHEREAS, staff recommends that that the remaining fifty percent (50%) be programmed for reinvestment in currently unfunded, one-time, capital projects, including: Information Systems technology to update and upgrade the financial, building and planning permit, and human resources information systems software and to address deferred maintenance at City facilities.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Union City does hereby adopt a resolution authorizing the use of fifty percent (50%) of the FY 2020- 2021 unanticipated savings of approximately $5.4 million to fund unfunded liabilities associated with the City’s retirement obligations through CalPERS and/or other post-employment benefits such as retiree medical obligations and the use of the remaining fifty percent (50%) for reinvestment in currently unfunded, one-time, capital projects, including: Information Systems technology to update and upgrade the financial, building and planning permit, and human resources information systems software and to address deferred maintenance at City facilities.

PASSED, APPROVED, AND ADOPTED by the City Council of the City of Union City at a regular meeting held on April 12, 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED:
________________________________
Carol Dutra-Vernaci
Mayor
ATTESTED: APPROVED AS TO FORM:
__________________________________ ________________________________ Anna M. Brown Kristopher J. Kokotaylo
City Clerk City Attorney
City Council/RSA Agenda 326 Tuesday, April 12, 2022
Item 7.c
Informational Report on the Fiscal Year 2020-2021
Preliminary Year-End Financial Results of the General Fund and Adoption of a Resolution Authorizing the Use of 50% of the Unanticipated Savings to Fund Unfunded Liabilities and 50% for Reinvestment in One-Time Capital Projects April 12, 2022
City Council/RSA Agenda 327 Tuesday, April 12, 2022
2 FY 2020-2021 Preliminary Year-End Results• Extraordinary challenges:
• Cyberattack in September 2019• Defeat of Public Safety Parcel Tax in March 2020• COVID-19 Pandemic in March 2020 • Shut down businesses and services• Lasted more than two years • Cyberattack:
• Many months to rebuild Finance information• Still significantly behind closing the books each year• Preparing for FY 2020-2021 audit now• Final amounts may change City Council/RSA Agenda 328 Tuesday, April 12, 2022
3 FY 2020-2021 Preliminary Year-End Results
• Unanticipated savings of $5.4 million• Consistent with adopted Finance Principles:
• Staff recommends using 50% of the
unanticipated savings in conformancewith City’s financial policy to fundunfunded liabilities and the remaining50% for one-time capital projects City Council/RSA Agenda 329 Tuesday, April 12, 2022
4 General Fund• The unaudited year-end actual results in the General Fund are as follows:• Unanticipated year-end savings of approximately $5.4 million are a direct result of the COVID-19 pandemic.

FY 2020-2021 Preliminary Year-End Results
General Fund
FY 2020-2021
Year-End
Actuals
Revenues $60,809,015Expenditures $55,404,371Savings $5,404,644 City Council/RSA Agenda 330 Tuesday, April 12, 2022
5 FY 2020-2021 Budget vs Actual:• Revenues were $230,862 more than budgeted (positive variance)• Expenditures were $6,362,031 less than budgeted (positive variance) FY 2020-2021 Preliminary Year-End Results
General Fund FY 2020-2021
Budget
FY 2020-2021
Year-End Actuals
FY 2020-2021
Budget vs Actuals
Revenues $60,578,153 $60,809,015 $230,862Expenditures $61,766,402 $55,404,371 $6,362,031 (Shortfall)/Savings ($1,188,249) $5,404,644 $6,592,893
City Council/RSA Agenda 331 Tuesday, April 12, 2022
6 General Fund Revenue Variances
FY 2020-2021 Preliminary Year-End Results
Revenue Source
(Under)/Over
Budget Estimate
Transient Occupancy Tax (TOT) ($1,492,750)
Cannabis Cultivation ($800,000)Parking Citations ($380,382)Parking Meters ($351,817)Parking Permits ($49,497)Gym Memberships ($333,480)Gym Facility Rentals ($64,300)Property Tax $623,111Utility Users’ Tax $1,026,166Gain on the Sale of Real Estate $631,299Encroachment Permits $388,127Plan Check Fees $451,009State Coronavirus Relief Fund $1,075,923Net Other Accounts ($492,547)Total Budget to Actual Variances $230,862 City Council/RSA Agenda 332 Tuesday, April 12, 2022
7 General Fund Expenditure Variances
FY 2020-2021 Preliminary Year-End Results
Expenditure Category SavingsFull-Time Pay $1,547,544Part-Time Pay $486,239CalPERS Retirement $992,614Health Insurance $388,978Professional/Consulting Services $453,466Contractual Services $1,473,015Vehicle Maintenance $172,403Utilities $320,320Travel & Training $258,552Net Other Accounts $268,900Total Budget to Actual Variances $6,362,031 City Council/RSA Agenda 333 Tuesday, April 12, 2022
8 FY 2020-2021 Preliminary Year-End Results
Summary:•One-time savings of $5.4 million in FY 2020-2021 •Resulting from City’s very cautious approach to spending •Lack of financial information caused by the cyberattack•COVID-19 pandemic •Cutbacks enacted during the pandemic are similar to what will happen if the ½ cent sales tax is not renewed
•City will need to make $7M in permanent cuts
City Council/RSA Agenda 334 Tuesday, April 12, 2022
9 Staff Recommendation:That City Council adopt a resolution authorizing:
1) 50% of the FY 2020-2021 unanticipated savings
be used to fund unfunded liabilities
2) 50% for reinvestment in currently unfunded, onetime, capital projects FY 2020-2021 Preliminary Year-Results
City Council/RSA Agenda 335 Tuesday, April 12, 2022