Vernon City Council
March 15, 2022

and derivative works thereto, (ii) any software, applications, inventions or other technology developed in connection with Implementation Services or support, (iii) any analytics generated through Customer’s use of the Services, including but not limited to, any data, materials, information, and reports (“Analytics”) and (iv) all intellectual property rights related to any of the foregoing. Company hereby grants Customer a non-exclusive, non-transferable and nonsublicensable license to access and use the Analytics.

3.3 Notwithstanding anything to the contrary, Company shall have the right to collect and analyze data and other information relating to the provision, use and performance of various aspects of the Services and related systems and technologies (including, without limitation, information concerning Customer Data and data derived therefrom), and Company will be free (during and after the term hereof) to: (i) use such information and data to improve and enhance the Services and for other development, diagnostic and corrective purposes in connection with the Services and other Company offerings, (ii) disclose such data solely in aggregate or other de-identified form in connection with its business, and (iii) disclose, share, license, or resell Analytics to third parties for consideration. No rights or licenses are granted except as expressly set forth herein.

4. PAYMENT OF FEES

4.1 Customer will pay Company the then applicable fees described in the Summary of Services and Implementation in accordance with the terms therein (the “Fees”). If Customer’s use of the Services exceeds the Service Capacity set forth in the Summary of Services and Implementation or otherwise requires the payment of additional fees (per the terms of this Agreement), Customer shall be billed for such usage and Customer agrees to pay the additional fees in the manner provided herein. Company reserves the right to change the Fees or applicable charges and to institute new charges and Fees at the end of the Initial Term or then current Renewal Term, upon thirty (30) days prior notice to Customer (which may be sent by email). If Customer believes that Company has billed Customer incorrectly, Customer must contact Company no later than 60 days after the closing date on the first billing statement in which the error or problem appeared, in order to receive an adjustment or credit. Inquiries should be directed to Company’s customer support department.

4.2 Company may choose to bill through an invoice, in which case, full payment for invoices issued in any given month must be received by Company thirty (30) days after the mailing date of the invoice. Unpaid amounts are subject to a finance charge of 5% per month on any outstanding balance, or the maximum permitted by law, whichever is lower, plus all expenses of collection and may result in immediate termination of Service. Customer shall be responsible for all taxes associated with Services other than U.S. taxes based on Company’s net income.

4.3 Services may be provided outside the scope encompassed within the “Summary of Services and Implementation”. Said services may be subject to additional fees, which are set at $600/hour for executive-level work, $425/hour for FSA-level work, $300/hour for ASA-level work, $200/hour for analyst work, and reasonable travel expenses. Said services that are subject to additional fees will not be performed without explicit advance consent from Customer.

4.4 Company may incur business license fees that are mandated by Customer. Customer agrees to reimburse Company for said fees.

5. TERM AND TERMINATION

5.1 Subject to earlier termination as provided below, the Initial Term of this Agreement shall be for a period specified in the Summary of Services and Implementation (the “Initial Term”).

Vernon, CA
Actuarial Services and Technology
Licensing Agreement

5.2 In addition to any other remedies it may have, either party may terminate this Agreement upon thirty (30) days written notice (or without notice in the case of nonpayment), if the other party materially breaches any of the terms or conditions of this Agreement. Customer will pay in full for the Services up to and including the last day on which the Services are provided. All sections of this Agreement which by their nature should survive termination will survive termination, including, without limitation, accrued rights to payment, confidentiality obligations, warranty disclaimers, and limitations of liability.

6. WARRANTY AND DISCLAIMER
Company shall use reasonable efforts consistent with prevailing industry standards to maintain the Services in a manner which minimizes errors and interruptions in the Services and shall perform the Implementation Services in a professional and workmanlike manner as expressed in Exhibit C. Services may be temporarily unavailable for scheduled maintenance or for unscheduled emergency maintenance, either by Company or by third-party providers, or because of other causes beyond Company’s reasonable control, but Company shall use reasonable efforts to provide advance notice in writing or by e-mail of any scheduled service disruption. However, Company does not warrant that the Services will be uninterrupted or error free; nor does it make any warranty as to the results that may be obtained from use of the Services. EXCEPT AS

EXPRESSLY SET FORTH IN THIS SECTION, THE SERVICES, THE ANALYTICS, AND IMPLEMENTATION SERVICES ARE PROVIDED “AS IS” AND COMPANY DISCLAIMS

ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO,

IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT.

7. INDEMNITY
Company shall hold Customer harmless from liability to third parties resulting from infringement by the Service of any United States patent or any copyright or misappropriation of any trade secret, provided Company is promptly notified of any and all threats, claims and proceedings related thereto and given reasonable assistance and the opportunity to assume sole control over defense and settlement; Company will not be responsible for any settlement it does not approve in writing. The foregoing obligations do not apply with respect to portions or components of the Service (i) not supplied by Company, (ii) made in whole or in part in accordance with Customer specifications, (iii) that are modified after delivery by Company, (iv) combined with other products, processes or materials where the alleged infringement relates to such combination, (v) where Customer continues allegedly infringing activity after being notified thereof or after being informed of modifications that would have avoided the alleged infringement, or (vi) where Customer’s use of the Service is not strictly in accordance with this Agreement. If, due to a claim of infringement, the Services are held by a court of competent jurisdiction to be or are believed by Company to be infringing, Company may, at its option and expense (a) replace or modify the Service to be non-infringing provided that such modification or replacement contains substantially similar features and functionality, (b) obtain for Customer a license to continue using the Service, or (c) if neither of the foregoing is commercially practicable, terminate this Agreement and Customer’s rights hereunder and provide Customer a refund of any prepaid, unused fees for the Service.

8. LIMITATION OF LIABILITY

NOTWITHSTANDING ANYTHING TO THE CONTRARY, EXCEPT FOR BODILY INJURY

OF A PERSON, COMPANY AND ITS SUPPLIERS (INCLUDING BUT NOT LIMITED TO

ALL EQUIPMENT AND TECHNOLOGY SUPPLIERS), OFFICERS, AFFILIATES,

REPRESENTATIVES, CONTRACTORS AND EMPLOYEES SHALL NOT BE Vernon, CA
Actuarial Services and Technology
Licensing Agreement

RESPONSIBLE OR LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF THIS

AGREEMENT OR TERMS AND CONDITIONS RELATED THERETO UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER THEORY: (A) FOR ERROR

OR INTERRUPTION OF USE OR FOR LOSS OR INACCURACY OR CORRUPTION OF

DATA OR COST OF PROCUREMENT OF SUBSTITUTE GOODS, SERVICES OR TECHNOLOGY OR LOSS OF BUSINESS; (B) FOR ANY INDIRECT, EXEMPLARY, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES; (C) FOR ANY MATTER BEYOND COMPANY’S REASONABLE CONTROL; OR (D) FOR ANY AMOUNTS THAT,

TOGETHER WITH AMOUNTS ASSOCIATED WITH ALL OTHER CLAIMS, EXCEED THE

FEES PAID BY CUSTOMER TO COMPANY FOR THE SERVICES UNDER THIS AGREEMENT IN THE 12 MONTHS PRIOR TO THE ACT THAT GAVE RISE TO THE

LIABILITY, IN EACH CASE, WHETHER OR NOT COMPANY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

9. MISCELLANEOUS
If any provision of this Agreement is found to be unenforceable or invalid, that provision will be limited or eliminated to the minimum extent necessary so that this Agreement will otherwise remain in full force and effect and enforceable. This Agreement is not assignable, transferable or sublicensable by Customer except with Company’s prior written consent. Company may not transfer or assign any of its rights and obligations under this Agreement without Customer’s prior written consent. This Agreement is the complete and exclusive statement of the mutual understanding of the parties and supersedes and cancels all previous written and oral agreements, communications and other understandings relating to the subject matter of this Agreement, and all waivers and modifications in this Agreement must be in a writing signed by both parties, except as otherwise provided herein. No agency, partnership, joint venture, or employment is created as a result of this Agreement and Customer does not have any authority of any kind to bind Company in any respect whatsoever. In any action or proceeding to enforce rights under this Agreement, the prevailing party will be entitled to recover costs and attorneys’ fees. All notices under this Agreement will be in writing and will be deemed to have been duly given when received, if personally delivered; when receipt is electronically confirmed, if transmitted by facsimile or e-mail; the day after it is sent, if sent for next day delivery by recognized overnight delivery service; and upon receipt, if sent by certified or registered mail, return receipt requested.

This Agreement shall be governed by the laws of the State of California without regard to its conflict of laws provisions. The parties shall work together in good faith to issue at least one mutually agreed upon press release within 90 days of the Effective Date, and Customer otherwise agrees to reasonably cooperate with Company to serve as a reference account upon request.

Vernon, CA
Actuarial Services and Technology
Licensing Agreement

EXHIBIT A
Service Level Terms
The Services shall be available 99% of the time, measured monthly, excluding holidays and weekends and scheduled maintenance. If Customer requests maintenance during these hours, any uptime or downtime calculation will exclude periods affected by such maintenance. Further, any downtime resulting from outages of third party connections or utilities or other reasons beyond Company’s control will also be excluded from any such calculation. Customer's sole and exclusive remedy, and Company's entire liability, in connection with Service availability shall be that for each period of downtime lasting longer than 12 hours, Company will credit Customer 1% of Service Fees for each period of 30 or more consecutive minutes of downtime; provided that no more than one such credit will accrue per day.

Downtime shall begin to accrue as soon as Customer (with notice to Company) recognizes that downtime is taking place, and continues until the availability of the Services is restored. In order to receive downtime credit, Customer must notify Company in writing within 12 hours from the time of downtime, and failure to provide such notice will forfeit the right to receive downtime credit. Such credits may not be redeemed for cash and shall not be cumulative beyond a total of credits for one (1) week of Service Fees in any one (1) calendar month in any event. Company will only apply a credit to the month in which the incident occurred. Company’s blocking of data communications or other Service in accordance with its policies shall not be deemed to be a failure of Company to provide adequate service levels under this Agreement.

Vernon, CA
Actuarial Services and Technology
Licensing Agreement

EXHIBIT B
Support Terms
Company will provide Technical Support to Customer via both telephone and electronic mail on weekdays during the hours of 9:00 a.m. through 5:00 p.m. Pacific Standard Time, with the exclusion of Federal Holidays (“Support Hours”).

Customer may initiate a help desk ticket during Support Hours by calling 310-371-7106 or any time by emailing [email protected].

Company will use commercially reasonable efforts to respond to all help desk tickets within one (1) business day.

Vernon, CA
Actuarial Services and Technology
Licensing Agreement

EXHIBIT C
Disclaimer of Software Analysis
Company will use census data, plan provisions, and actuarial assumptions provided by Customer and/or Customer’s actuary to develop the software for Customer. Company will rely on this information without audit. Company does not set actuarial assumptions.

Company will provide software with financially sound projections and analysis, but does not guarantee compliance with actuarial standards for funding and accounting purposes under Government Accounting Standards Board or Generally Accepted Accounting Principles.

The software will not be prepared in accordance with the actuarial standards of practice or actuarial compliance guidelines as promulgated by the American Academy of Actuaries nor will outputs constitute a Statement of Actuarial Opinion. Software results are not suitable for financial reporting purposes.

While the software is tested against actuarial valuation results, the software results will not match, nor are intended to match actuarial valuation results.

City Council Agenda Item Report
Submitted by: Daniel Wall
Submitting Department: Public Works
Meeting Date: March 15, 2022

SUBJECT
Amendment No. 2 Janitorial Services Agreement with Priority Building Services Recommendation:

A. Find that the approval of the proposed amendment is exempt from California Environmental Quality Act (CEQA) review, as it is an administrative activity that will not result in direct or indirect physical changes in the environment, and therefore is not a “project” as defined by Section 15378 of the CEQA Guidelines; and B. Approve and authorize the City Administrator to execute Amendment No. 2 to Services Agreement with Priority Building Services, LLC, in substantially the same form as submitted, for janitorial services, changing the contract total from $398,307 to $436,006.30.

Background:

The City's three-year services agreement with Priority Building Services, LLC (Priority) for janitorial services recently expired on December 30, 2021. Over the course of the three-year contract there have been authorized expenses for the cleaning of City facilities not originally contemplated in the original agreement. The Public Works Department is currently processing the contract’s final invoice for payment and has determined that the contract's total remaining balance is insufficient to cover the final invoices for services rendered.

The Public Works Department is requesting that $37,699.30 be added to the Agreement to cover the remaining balance. Pursuant to Vernon Municipal Code Chapter 2, Article IV, Sec.

2.17.02(B), City Council approval is required for this Agreement since the City has paid or awarded the contractor more than $100,000 in the twelve months preceding the proposed amendment.

All other terms and conditions of the original contract would remain unchanged. The proposed Amendment No. 2 has been reviewed and approved by the City Attorney's Office.

Fiscal Impact:

Sufficient funds for Amendment No. 2 Janitorial Services Agreement with Priority Building Services are available in Repairs & Maintenance, City Buildings Division Account No. 011.1049.590000.

Attachments:

1. Amendment No. 2 - Priority Building Services
- 1 -
AMENDMENT NO. 2 TO THE SERVICES AGREEMENT BETWEEN THE

CITY OF VERNON AND PRIORITY BUILDING SERVICES, LLC,

FOR JANITORIAL SERVICES
This Amendment (Amendment No. 2) to that certain Agreement for janitorial services dated October 1, 2018, (Agreement), is made as of March 15, 2022, by and between the City of Vernon, a California charter city and municipal corporation (the “City”), and Priority Building Services, LLC (“Contractor”), a California limited liability company.

WHEREAS, the City and Contractor are parties to a written Agreement, dated October 1, 2018, under which Contractor provides janitorial services (Agreement); and WHEREAS, the City and Contractor entered into Amendment No. 1 to extend the Agreement for an additional ninety (90) day period effective October 1, 2021 through December 30, 2021 (Renewal Term), for a total amount not to exceed $30,639.00; and WHEREAS, the City and Contractor desire to amend the Agreement to add an additional $37,699.30 to cover additional expenses incurred through the Renewal Term.

NOW, THEREFORE, the parties to this Amendment No. 2 agree as follows:

1. Contractor’s grand total consideration for the Renewal Term, shall not exceed the amount of Sixty-Eight Thousand Three Hundred Thirty-Eight Dollars and Thirty Cents ($68,338.30), without prior City Council approval and written amendment of the Agreement.

2. Except as expressly modified by this Amendment No. 2, all provisions of the Agreement shall remain in full force and effect.

3. The provisions of this Amendment No. 2 shall constitute the entire agreement of the parties with respect to the subject matter included in this Amendment No. 2 and shall supersede any other agreement, understanding, or arrangement, whether written or oral, between the parties with respect to the subject matter of this Amendment No. 2.

4. The person or persons executing this Amendment No. 2 on behalf of each of the parties warrants and represents that he or she has the authority to execute this Amendment No. 2 on behalf of that party and has the authority to bind that party to the performance of its obligations hereunder.

IN WITNESS WHEREOF, the parties have signed this Amendment No. 2 as of the date stated in the introductory clause.
[SIGNATURES FOLLOW ON NEXT PAGE]
- 2 -
CITY OF VERNON a California charter city
and municipal corporation
By: _______________________________
Carlos Fandino, City Administrator
Priority Building Services, LLC, California limited
liability company
By:

Name:

Title:

ATTEST:
__________________________________
Lisa Pope, City Clerk
By:

Name:

Title:

APPROVED AS TO FORM:
__________________________________
Zaynah N. Moussa,
Interim City Attorney
City Council Agenda Item Report
Submitted by: Daniel Wall
Submitting Department: Public Works
Meeting Date: March 15, 2022

SUBJECT
Supplemental to Purchase Contract No. CS-1363 with Mega Renovation, Inc. for the Remodel of 4328 Furlong Place
Recommendation:

A. Find that the proposed action is categorically exempt under the California Environmental Quality Act (CEQA) in accordance with CEQA Guidelines Section 15301, because the project consists of the maintenance, repair or minor alteration of an existing facility and involves negligible or no expansion of an existing use; and B. Approve and authorize the issuance of a Supplemental to Purchase Contract No. CS1363 with Mega Renovations, Inc. for the Remodel of City-Owned Residential Property Located at 4328 Furlong Place for an amount not to exceed $19,283.95.

Background:

On June 15, 2021, City Council approved a contract with Mega Renovation, Inc. for the remodel of City-owned property located at 4328 Furlong Place. The renovations were completed as of August 2021. Initially, the Public Works Department estimated the total cost of this project would not exceed $50,000 and diligently solicited quotes for the subject work as required by Vernon Municipal Code (VMC) Section 3.32.030 (B).

Based on the Department's estimate, Purchase Contract CS-1363 with Mega Renovation, Inc. was issued in the amount of $50,000. However, due to the sharp and unexpected increase in the cost of materials in 2021, the total cost of the remodel project was higher than anticipated at $69,283.95. The Department is now requesting a Supplemental for the remaining $19,283.95 owed to Mega Renovation, Inc. for the work completed at the City-owned residential property located at 4328 Furlong Place.

Pursuant to VMC Section 3.32.030 (B), City Council approval is required for the Supplemental since the City has paid or awarded the contractor more than $100,000 in the twelve months preceding the proposed amendment for other work also awarded based on competitive quotes received. Staff recommends that $19,283.95 be added to Purchase Contract CS-1363 with Mega Renovation, Inc. increasing the total not to exceed amount of the contract to $69,283.95 to cover the expenses incurred for the renovations completed.

Fiscal Impact:

The fiscal impact of this request for a Supplemental to Contract No. CS-1363 is $19,283.95.

The total fiscal impact of the remodel of 4328 Furlong Place is $69,283.95. Sufficient funds for total cost of the remodel, including the supplemental amount requested, are available in the Capital Outlay, City Housing Division Account No. 011.1048.590000 for Fiscal Year 2021- 2022.

Attachments:

None.

City Council Agenda Item Report
Submitted by: Angela Melgar
Submitting Department: Finance/Treasury
Meeting Date: March 15, 2022

SUBJECT
Fiscal Year 2021-22 Mid-Year Financial Update
Recommendation:

A. Find that approval of the proposed action is exempt from California Environmental Quality Act (CEQA) review, because it is a government fiscal activity that will not result in direct or indirect physical changes in the environment, and therefore does not constitute a “project” as defined by CEQA Guidelines section 15378; and B. Adopt Resolution No. 2022-05 approving Mid-Year Budget Appropriations and amending the Annual Operating and Capital Budget for Fiscal Year 2021-22.

Background:

Finance Department will provide a briefing to the City Council to report budget to actuals for the General Fund and Vernon Public Utilities on the first six months of Fiscal Year 2021-22 and the economic outlook for the near to mid-term.

General Fund
Revenue Trends and Highlights
Most revenue categories are expected to be consistent with projections. However, some revenue categories, such as property and parcel taxes, are primarily collected in the second half of the fiscal year per the disbursement schedule of the County and do not reflect 50% of the fiscal year at December 31st. Sales Tax is expected to exceed budgeted estimates, and the City’s sales tax analytics firm has indicated that this trend is expected to continue. Actual sales and use tax revenues increased by 43.6% compared to the same six-month period last year. Budgeted intergovernmental revenues include $7 million in Federal grants for Public Works; however, these funds have not been received to date. With General Fund revenues at

45.2% as of December 31, 2021 and given the timing of revenues to be collected in the second half of the fiscal year, revenue trends year-to-date are following the budgeted expectations of meeting current year operations.

Expenditure trends
With 50% of the fiscal year elapsed, the General Fund expenditures across all City Departments are at 37.2% of budgeted expenditures. Department Directors continue exercising fiscal discipline and are working to control expenditures in their annual operating budgets, with salaries and benefits for all departments under 50% at mid-year. Maintenance and operations expenses are at 44.3%. Timing for anticipated capital projects and equipment expenses may have been delayed to the second half of the fiscal year as totals for this category are only 3.9% for all General Government departments as of December 31, 2021.

Enterprise Funds
Revenue and Expenditure Trends
As of December 31, 2021, Electric revenues are at 57.6%, Gas is at 71.1%, and charges for services in the Water Fund are at 48%. Fiber Optic revenues are at 35% of budgeted revenue due to the timing of billing. VPU continues to look for opportunities to operate its systems efficiently while at the same time addressing infrastructure needs. As of mid-year, Electric and Water Funds are below 50% of budgeted expenditures. The VPU Credit Program and an increase in the need for system maintenance have brought Gas Fund to 71.1% and Fiber Optic to 95% of expenditures at mid-year. Adjustments are being presented to Council to appropriate funds for these unexpected costs.

Cash Position
Approximately 71% of the City’s cash funds are unrestricted, with the electric utility reserves exceeding 180 days of operating expenditures. The General Fund reserve balance has increased over the last three fiscal years. Deposits with financial institutions are approximately 41% of total funds for day to day operations and activity. The remainder of the funds are invested in money market accounts and mutual funds.

Economic Outlook
Although the City’s economic performance throughout the state of emergency has proven very resilient, the outlook remains one of caution. Global events, such as the Russian war on Ukraine have driven up energy prices which directly impact the City's Enterprise Funds and its customers. Supply chain shocks and inventory shortages have added to the inflationary trends that are likely to continue throughout the calendar year. However, savings from City operations will have a positive impact for the General Fund, such as the long-term savings from the transition of City Fire operations to Los Angeles County, and leveling annual pension payments for savings through Pension Obligation Bonds.

Proposed Budget Adjustments
Due to factors related to the state of emergency and worldwide events, as well as expenditures that were not known or expected at the adoption of the FY 2021-22 Budget, staff recommends adopting a resolution for budget adjustments from City departments and enterprise funds.

Fiscal Impact:

Approved budget adjustments will result in an appropriation for each fund incorporated in the current year budget. Approval of this action would require an appropriation of $660,344 for City Administration, City Clerk, Public Works, and Health and Environmental Control expenditures in various General Fund accounts from available General Fund Unassigned Fund Balance, an appropriation of $30,000 for water treatment costs in Water Department's Account No. 020-1084-500140 from available Water Fund Balance, an appropriation of $2,774,393 for technical professional services and bond interest paid for various Electric Fund accounts from available Electric Fund Balance, an appropriation of $733,952 for overtime and customer rebate costs for various Gas Fund accounts from available Gas Fund Balance, and an appropriation of $358,893 for repairs & maintenance, professional services, and capital outlay costs for various Fiber Optic Fund accounts from available Fiber Optic Fund Balance.

Attachments:

1. Resolution No. 2022-05
RESOLUTION NO. 2022-05

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON

APPROVING MID-YEAR BUDGET APPROPRIATIONS AND AMENDING

THE ANNUAL OPERATING AND CAPITAL BUDGET FOR FISCAL YEAR 2021-2022
SECTION 1. Recitals.

A. On June 1, 2021, the City Council of the City of Vernon adopted Resolution No. 2021-13, approving the annual operating and capital budget for fiscal year 2021-2022.

B. Changes in anticipated expenditures of the City require a revision of the appropriations for fiscal year 2021-2022 and amendment of the budget by the affirmative vote of a majority of the members of the City Council.

C. There are sufficient funds in anticipated revenues and fund balance to cover the proposed budget adjustments.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF VERNON AS FOLLOWS:

SECTION 2. The City Council of the City of Vernon hereby finds and determines that the above recitals are true and correct.

SECTION 3. Pursuant to Chapter 8.5 of the Charter of the City of Vernon, a majority of the members of the City Council hereby approves the mid-year budget appropriations in the table below.

Department GL Account Vendor Description
Adjustment
Amount
City
Administration
011.1002.501010
Salaries -
Regular City of Vernon
Personnel changes
within department

67,000.00
City
Administration
011.1002.502020
Retirement City of Vernon
Personnel changes
within department 1,000.00
City
Administration
011.1002.502060
FICA Taxes City of Vernon
Personnel changes
within department 2,000.00
City Clerk
011.1003.596300
Election Costs Registrar-Recorder
Election Costs for two
special elections

30,000.00
Public Works
011.1040.501020
Salaries - O.T. City of Vernon
Overtime caused by
vacancies and leave of
absence in PW Admin
and Warehouse
departments

11,000.00
Resolution No. 2022-05

_______________________
Department GL Account Vendor Description
Adjustment
Amount
Public Works
011.1041.201020
Salaries - O.T. City of Vernon
Overtime on weekends
for Code Enforcement
Officer due to
unpermitted nightclubs,
etc.

7,000.00
Public Works
011.1043.501020
Salaries - O.T. City of Vernon
Extraordinary OT
expenses due to
homeless
encampments/RR
cleanups

40,000.00
Public Works
011.1043.590000
Repairs &
Maintenance
Bear Electrical
Solutions
Extraordinary Traffic
Signal Repairs due to
unanticipated increases
in traffic collisions

80,000.00
Public Works
011.1043.590000
Repairs &
Maintenance Various
Emergency Sewer
Repairs 150,000.00
Public Works
011.1046.590000
Repairs &
Maintenance Various
Repair and maintenance
of City Vehicle Fleet

80,000.00
Public Works
011.1048.501020
Salaries - O.T. City of Vernon
Overtime due to requests
for repair and
extraordinary
maintenance greater
than anticipated

5,000.00
Public Works
011.1049.590000
Repairs &
Maintenance Priority Janitorial services

32,343.94
Public Works
011.1049.590000
Repairs &
Maintenance Commercial Door
Repairs and
maintenance of City
doors and garages

5,000.00
Public Works
011.1049.590000
Repairs &
Maintenance Western Allied
Repairs and
maintenance of HVAC
systems. Anticipated
repairs will increase total
spending in second half
of FY.

20,000.00
Public Works
011.1049.596200
Professional
Services - Other Various
Building Evaluation,
extraordinary
maintenance 40,000.00
Public Works
011.1049.900000
Capital Outlays Mega Renovation
Cost of materials were
higher than quoted
based on market value. 20,000.00
Health and
Environmental
Control
011.1060.595200
Professional
Services -
Technical
SESPE Consulting
Inc.

Requested to add
additional funding to the
contract the Dept
exceeded the anticipate
service requests from the
contractor 40,000.00
Resolution No. 2022-05

_______________________
Department GL Account Vendor Description
Adjustment
Amount
Health and
Environmental
Control
011.1060.595200
Professional
Services -
Technical Ocean Blue
Payment for
environmental clean-up
services for hazardous
materials spills

30,000.00
General Fund

660,343.94
Water
020.1084.500140
Water Treatment
Waterline
Technologies, Fuller
Engineering
Increase needed due to
price increases as a
result of production
outages and labor
shortages 30,000.00
Electric
055.9000.595200
Professional
Services -
Technical
Morgan, Lewis &
Brockius, LLP Bicent PPA Outage

1,118,403.74
Electric
055.9000.760010
Bond Interest
Paid 2021 Series A Bonds
Interest on 2021 Bonds
less Refunded 2012A
Bond interest

1,655,989.00
Gas
056.5600.501020
Salaries - O.T. City of Vernon Emergency work

2,000.00
Gas
056.5600.596706
VPU Credit
Program
Unable to complete cost
of service study in FY
2021-22 to remove this
customer rebate

731,951.84
Fiber Optics
057.1057.590000
Repairs &
Maintenance Petrelli Electric Co.

Routine Repairs and
Maintenance

174,000.00
Fiber Optics
057.1057.596200
Professional
Services - Other
Millennium UPC,
LLC
Battery Testing - Upon
system audit batteries
needed service
maintenance contract

4,893.08
Fiber Optics
057.1057.900000
Capital Outlay Petrelli Electric Co.

System Enhancement,
Expansion, Upgrades,
and Construction

180,000.00
Vernon Public Utilities

3,897,237.66
23 Citywide

4,557,581.60
SECTION 4. The Annual Operating and Capital Budget for fiscal year 2021-2022, adopted by Resolution No. 2021-13, is hereby amended to include the mid-year budget appropriations.
/ / /
Resolution No. 2022-05

_______________________
SECTION 5. The City Clerk shall certify the passage and adoption of this resolution and enter it into the book of original resolutions.

APPROVED AND ADOPTED this 15th day of March, 2022.
_____________________________
MELISSA YBARRA, Mayor
ATTEST:

LISA POPE, City Clerk
(seal)
APPROVED AS TO FORM:
_________________________________
ZAYNAH N. MOUSSA,
Interim City Attorney
City Council Agenda Item Report
Submitted by: Angela Kimmey
Submitting Department: City Administration
Meeting Date: March 15, 2022

SUBJECT
Reimbursement Agreement for Shelter Beds Within the Salvation Army Bell Shelter Recommendation:

A. Approve and authorize the Mayor to execute a Reimbursement Agreement for shelter beds within the Salvation Army Bell Shelter with the cities of Bell, Bell Gardens, Commerce, Cudahy, Huntington Park, Maywood, and Southgate, collectively referred to as the Local Coordinating Alliance 1 (LCA1) at an estimated cost of $62,415.50 and not to exceed total of $100,000 for a term beginning March 1, 2022 and ending on June 30, 2023.

Background:

Homelessness is a complicated problem that is resistant to localized and uncoordinated solutions. In 2020, nearly one in four of the estimated 570,000 unsheltered homeless individuals in the United States lived in the State of California. Of the 151,000 homeless individuals in California, forty-three percent (43%) were unhoused on the streets of Los Angeles County, roughly 66,000 individuals. Of the 66,000 unsheltered individuals in Los Angeles County in 2020, 41,000 lived on the streets of the City of Los Angeles.

The Los Angeles Homeless Services Authority (LAHSA), a quasi-governmental agency, was formed in 1993 as a joint powers authority of the City of Los Angeles and the County of Los Angeles to coordinate effective delivery of homeless services within the City of Los Angeles and the County of Los Angeles. The cities of Glendale, Long Beach, and Pasadena operate their own local homeless service programs through partnerships with local private and nonprofit actors. The remaining eighty-four (84) cities within Los Angeles County, including Vernon, are served by the regional Continuum of Care (CoC) system that is managed by LAHSA.

Before the formation of LAHSA, homeless services were fragmented and inefficient within the region. Duplicative service delivery led to inefficiencies, there was also a lack of accountability and inconsistent results. Coordination between cities and regional agencies remains an issue today, as does accountability to the public after the passage of Measure H. The current challenge for cities is how to develop local and subregional homelessness service systems that support and add to the efficiency of regional systems while still addressing local needs.

In the United States, homelessness services are provided by a Public-Private Partnership model, where governmental agencies coordinate with private and nonprofit service providers to deliver services. A comprehensive homelessness response system is composed of four parts:

1. Homelessness Prevention – Preserving affordable housing, addressing income insecurity and housing stability, providing mainstream safety net and anti-poverty programs where the responsible parties are cities, counties, and the state.

2. Housing Creation – Building housing for all income levels and investing in permanent supportive housing creation where the responsible parties are cities, counties, and the state.

3. Rehousing Programs – The end-to-end system that focuses on placing homeless individuals and families into temporary and permanent housing. LAHSA is the responsible regional agency in this area.

4. Street Management – Street level efforts to provide services to unhoused individuals through outreach and to ensure public health and safety. The responsible parties are LAHSA for homeless outreach and the cities and the county for public health and safety.

LAHSA does not plan or execute street sanitation cleanups to maintain public health and safety. Cities are responsible for coordinating and completing street sanitation cleanups that include prior notification to unhoused individuals, the removal and safe storage of personal items and effects in compliance with the law, and the cleanup and removal of accumulated human waste and other debris that threatens public health and safety. When a city plans a street sanitation cleanup it notifies LAHSA, which sends outreach workers to the locations before and after cleanups to provide support and to offer temporary housing to people experiencing homelessness.

In 2018, the Ninth Circuit court held in Martin v. Boise that a city cannot prosecute homeless individuals for sleeping in public when there are more unhoused individuals than available shelter beds. As a result, to execute sanitation cleanups and maintain public health and safety, cities need to develop systems of coordination where city staff know when and how many shelter beds are available and have the resources to be able to provide shelter options to unhoused individuals that are affected by sanitation cleanups. In addition, it is critical that public safety agencies know how many shelter beds are available to them, and public safety agencies need access to shelter beds on an emergency basis. If a police officer encounters an individual in need during the night or on the weekend, the opportunity for that person to receive care and shelter, if they are willing to accept shelter, may be lost if the officer does not have access to a shelter bed for that individual. If the willing unhoused individual can be provided a shelter bed, their options to access medical care, mental health care, drug and alcohol counseling, and permanent housing are significantly improved.

The Salvation Army Bell Shelter is located within the city limits of the City of Bell and the shelter receives unhoused residents from the regional Continuum of Care (CoC) system. The Bell Shelter is one of the largest shelters in the nation, and the shelter provides a significant portion of the region’s shelter beds. The Salvation Army Bell Shelter complex provides a variety of supportive services and housing options, shelter beds are only one segment of the critical regional resources that the Salvation Army provides within the City of Bell. The shelter beds at the Salvation Army Bell Shelter are funded through contracts with agencies such as LAHSA, the Veterans Administration, and the Los Angeles County Department of Mental Health (DMH). Existing contracts provide most of the operations revenue for the Salvation Army Bell Shelter, and without these contracts the shelter would not be able to operate. The City of Bell does not currently have a separate contract for shelter beds at the Bell Shelter.

Therefore, the City’s only available resource to serve unhoused individuals is the overburdened CoC system, which limits the City’s ability to directly address local homelessness issues.

DISCUSSION:

The Local Coordinating Alliance 1 (LCA1) cities and unincorporated areas (Bell, Bell Gardens, Commerce, Cudahy, East Los Angeles, Huntington Park, Maywood, South Gate, Vernon, and Walnut Park) surrounding the Salvation Army Bell Shelter face a disproportionate homelessness impact. Unhoused individuals that are transported to the Salvation Army Bell Shelter from the greater Los Angeles County region may not successfully transfer to permanent housing for a variety of reasons, may not accept the mental health or drug and alcohol treatment services provided at the Salvation Army Bell Shelter, or may refuse to conform to the rules necessary for a safe and orderly living environment for residents of the Salvation Army Bell Shelter. As a result of these personal choices, and despite the best efforts of the Salvation Army Bell Shelter staff, these individuals may increase the unhoused population in the LCA1 cities, the surrounding unincorporated communities, and in the adjacent Los Angeles River channel. Thus, improved subregional coordination between the affected Southeast Los Angeles (SELA) area LCA1 communities, Los Angeles County Supervisorial Districts 1 and 4, the Salvation Army Bell Shelter, the Gateway Cities Council of Governments (Gateway COG), and existing regional agencies and nonprofit service providers is necessary to address the complex issue of homelessness in a manner that improves quality of life in the SELA subregion and improves the efficiency and effectiveness of existing regional services for the unhoused.

The Gateway COG provided Measure H Innovation funding in 2020/2021 for the City of Bell to be the lead agency in hiring a shared Homeless Services Liaison for the cities of Bell, Commerce, Cudahy, and Maywood to cooperatively address the disparate homelessness impact in the area. The work of the shared Homeless Services Liaison that is based in the City of Bell Community Services Department has been critical in addressing issues within the four participating communities. However, without an additional inventory of shelter beds to supplement the CoC system, the immediate challenges in the four-city area are difficult to address.

The City of Bell applied for and received $500,000 in Measure H Innovation Funds from the Gateway COG to support this shared shelter bed pilot program and to reduce the cost to the LCA1 cities by fifty percent (50%). The City of Bell has achieved consensus with the LCA1 cities to share costs equally for this innovative pilot program. Los Angeles County Supervisorial District 1 (Solis) and Supervisorial District 4 (Hahn) are in the process of separately contracting with the Salvation Army Bell Shelter to add six (6) additional shelter beds to this coordinated group of thirty-six (36) shelter beds that will result in a total of fortytwo (42) shelter beds coordinated by the Homeless Services Liaison that is based in the City of Bell. The Gateway COG also awarded $182,435 to the City of Bell to continue funding the shared Homeless Services Liaison through June 30, 2023.

REIMBURSEMENT AGREEMENT DETAILS:

Several meetings and discussions occurred with the LCA1 City Managers, Los Angeles County Supervisorial Districts 1 and 4 staff, Gateway COG staff, the Gateway COG Homelessness Technical Advisory Committee, the Chief Executive’s Office of Los Angeles County, the Los Angeles County Homelessness Initiative, and the Salvation Army to develop this Agreement over a period of six months. In total, seven (7) versions of this Agreement were developed: five (5) to reach group consensus and two (2) to add additional terms and metrics to align this program with regional service delivery standards. The issues noted below were debated during development of the Agreement.

Program Costs
The initial cost per bed/per day proposed by the Salvation Army to the City of Bell was sixty dollars ($60) per bed/per day for low barrier crisis shelter beds, the final cost per bed/per day in the Agreement is fifty-seven dollars ($57) per bed/per day for a mix of low barrier crisis shelter beds and bridge shelter beds. The type of shelter bed provided to a resident is based on the acuity or special needs of the resident, with bridge beds providing a higher level of services.

City of Bell staff and the Salvation Army discussed fixed and variable service costs per type of shelter bed, as well as other City contributions that support the Salvation Army Bell Shelter (public safety response, public works response, etc.) in determining the final cost of $57 per day/per bed. This Agreement is also important to the Salvation Army Bell Shelter, as they are sensitive to negative impacts that may occur in the SELA communities around the shelter, and they want to develop improved collaboration with communities near the shelter that may not have the fiscal resources to directly contract with the shelter.

Equal Distribution of Costs
Several meetings of the LCA1 cities discussed how to distribute costs among the agencies, with several cost factors proposed. The LCA1 group looked at the following factors:
population, general fund budget, five-year average of homeless point in time counts, city area in square miles, five-year average of homeless point in time counts by square mile, and equal share.

Based on the difficulty of finding consensus (as many cities preferred the cost factor which resulted in the lowest cost for their city), the need for all cities to be flexible in coordinating the inventory of shelter beds, the availability of funding from the Gateway COG and the American Rescue Act, and the recognition of the LCA1 cities that the success of this innovative pilot program would likely improve local response to homelessness and improve subregional homelessness coordination, the LCA1 cities agreed to share an equal one-eighth (1/8th) cost of the pilot program.

The contribution of Measure H Innovation Grant funds from the Gateway COG was critical in reducing the cost of the program for LCA1 cities with smaller populations and limited general fund resources. It is likely that without the Measure H Innovation Grant funds several of the cities would not be able to participate due to financial constraints and the opportunity to coordinate the SELA subregion would be lost.

Distribution of Shelter Bed Inventory and Shelter Bed Availability The Agreement provides for four (4) shelter beds per LCA1 city, and four (4) shared public safety shelter beds. However, it is impossible to predict exactly how long a specific shelter bed will be occupied, how many unhoused individuals will accept shelter, and what the various demands will be from each of the LCA1 cities.

The LCA1 cities understand that this is a pilot program, and a high degree of flexibility, coordination, and analysis will be necessary to manage the shelter bed inventory in a manner that satisfies every LCA1 party. The Agreement clearly states the need for coordination and flexibility that is required of all participants for the pilot program to be successful.

It is expected that a high level of city, county and agency communication will result from this pilot program. The LCA1 cities will have to work cooperatively to balance their individual needs and ensure that each LCA1 city has access to the shelter beds. There is also a risk that the LCA1 cities may not be able to achieve ninety percent (90%) occupancy of the shelter beds, as many unhoused individuals may choose to not accept shelter. If the LCA1 cities cannot maintain the desired shelter bed occupancy, the available shelter beds may be used by other Service Planning Area 7 (SPA7) cities. This will be an incentive for the LCA1 cities to coordinate the shelter bed inventory so that this valuable resource is not underutilized or wasted.

Metrics and Program Analysis
The success of this pilot program is dependent not just on the flexibility and coordination of the parties, but also on the data that is developed to determine whether a subregional collaboration for homeless services can improve local service delivery and successfully supplement regional homelessness service delivery. The information from this program will be input into the County’s Homeless Management Information System (HMIS) which will allow for analysis and auditing of the pilot program’s effectiveness. The Agreement notes specific metrics and targets for pilot program success. If the parties can effectively coordinate in a manner that improves local homelessness response and supports regional homelessness response without waste or inefficiency, this pilot program can be a model for subregional homeless services that can address the concerns of local communities in a targeted manner.

Termination
This Agreement includes the option for any LCA1 party to terminate for convenience after June 30, 2022, within thirty (30) days of written notice to the City of Bell, and/or upon a termination of the Social Services Collaborator Agreement by the City of Bell or by the Salvation Army pursuant to the terms of the Social Services Collaborator Agreement with the City of Bell. This Agreement also includes provisions for the default of an LCA1 party in Section 6(a). If issues occur with reimbursement from the LCA1 cities, or if the pilot program does not successfully address subregional needs, the pilot program may be terminated.

The proposed Reimbursement Agreement for Shelter Beds within the Salvation Army Bell Shelter with the participating LCA1 parties has been reviewed and approved as to form by the City Attorney's Office.

Fiscal Impact:

The total cost of the agreement to the City of Vernon will be determined by the timing of the execution of the final Reimbursement Agreement for Shelter Beds within the Salvation Army Bell Shelter with the participating LCA1 parties. The maximum estimated cost to the City of Vernon for this agreement is $62,415.50 for a term starting on March 1, 2022 and ending on June 30, 2023 (487 days). This cost is determined based on $500,000 in Measure H Innovation Grant Funds reimbursed from the Gateway Cities Council of Governments, and the approval of the Reimbursement Agreement by the LCA1 cities of Bell Gardens, Commerce, Cudahy, Huntington Park, Maywood, South Gate and Vernon to share remaining costs equally. The total cost and/or term of the agreement may be reduced if delays in program implementation occur due to COVID-19 public health restrictions at the Salvation Army Bell Shelter that may restrict or reduce the initial availability of shelter beds.

For Fiscal Year (FY) 2021/2022 the estimated cost is $15,637.96. For FY 2022/2023, the estimated cost is $46,785.70. The proposed agreement is not budgeted in FY 2021/2022, however, sufficient funds are available in the Community Development Fund Account No. 011.1070.596200 and will be budgeted accordingly for FY 2022/2023.

Attachments:

1. Joint Agency Reimbursement Agreement for Salvation Army Bell Shelter Beds

REIMBURSEMENT AGREEMENT
FOR

SHELTER BEDS WITHIN THE SALVATION ARMY BELL SHELTER
THIS REIMBURSEMENT AGREEMENT (“Agreement”) is entered into as of March ____, 2022 (“Effective Date”) by and among the CITY OF BELL, a California charter city (“Bell”), the CITY OF BELL GARDENS, a California general law city (“Bell Gardens”),the CITY OF COMMERCE, a California general law city (“Commerce”), the CITY OF CUDAHY, a California general law city (“Cudahy”), the CITY OF HUNTINGTON PARK, a California general law city (“Huntington Park”), the CITY OF MAYWOOD, a California general law city (“Maywood”), the CITY OF SOUTH GATE, a California general law city (“South Gate”), and the CITY OF VERNON, a California charter city and municipal corporation (“Vernon”), collectively referred to herein as the “LCA1 Members” and/or the “Parties”.

RECITALS
A. The cities of Bell, Bell Gardens, Commerce, Cudahy, Huntington Park, Maywood, South Gate, and Vernon, are members of a Local Coordinating Alliance 1 (“LCA1”), a cooperative working group of eight (8) entities developed within the Gateway Cities Council of Governments for subregional homeless services coordination in the Southeast Los Angeles subregion of Service Planning Area 7 (“SPA 7”). The LCA1 Members have agreed to coordinate resources and services to address homelessness in the Southeastern Los Angeles region within a provisional pilot program as described / outlined pursuant to the terms in this Agreement.

B. Los Angeles County (First and Fourth Supervisorial Districts) (“County”) will separately participate with The Salvation Army for the same services as set forth herein pursuant to separate agreements directly with the Salvation Army Bell Shelter.

C. A “Shelter Bed” is defined as an occupancy placement within a crisis housing bed or a bridge housing bed within the Salvation Army Bell Shelter located at 5600 Rickenbacker Rd, Bell, CA 9020, for a single adult (age 18 or over) participant referred into a program of comprehensive homeless support services within such shelter. Depending on the service needs of the particular unhoused individual, initial placement may occur in a crisis housing bed that is operated with a low barrier design or in a bridge housing bed. Both crisis and bridge housing beds are intended provide a safe and supportive twenty-four (24) hour residence to individuals experiencing homelessness while enabling assistance for them to obtain permanent housing. A low barrier design program is one in which no participant that is placed within the Salvation Army Bell Shelter shall be required to commit to sobriety, or to commit to an adherence to medications for physical or mental health conditions. Low barrier crisis housing beds are expected to be provided at the Salvation Army Bell Shelter in Building 1E. Bridge housing beds are expected to be provided at the Salvation Army Bell Shelter sober living dormitories in Building 2A/B for participants who prefer to live in a more stable environment. The 01135.0001/536707.2 -2-
number of beds provided in each housing type will be flexible to accommodate the shifting needs of the participants at any time.

D. It is expected that a number of participants entering the pilot program will have significant barriers to employment and housing. The Parties expect that there will be an on-site Salvation Army Bell Shelter employee who will provide group and individual psychotherapy for participants who need an advanced level of support and are open to engaging in behavioral health services.

E. Client level data for this pilot program will be entered into the Los Angeles Homeless Services Authority’s (“LAHSA”) Homeless Management Information System (“HMIS”). HMIS collects participant demographic data, as well as program and service utilization data for auditing, reporting, and to facilitate participant transfer and coordination among available regional homeless services programs.

F. The LCA1 Members currently participate in the Los Angeles County Coordinated Entry System (“County CES”), which provides for placements of individuals experiencing homelessness within occupiable shelter beds in Los Angeles County.

Due to the high demand for shelter beds within Los Angeles County, a shelter bed may not be immediately available to address the needs of the local unhoused population in the Southeast Los Angeles County subregion. Thus, the City of Bell has negotiated an agreement with The Salvation Army to procure the prioritized use of thirty-six (36) shelter beds for the eight (8) participating LCA1 Members, in recognition of the local impacts of homelessness experienced by the LCA1 Members.

G. The LCA1 Members, have collectively designated the City of Bell as the lead agency to coordinate the implementation of the pilot program proposed by this Agreement for the placement of homeless individuals within the Salvation Army Bell Shelter in an effort to address the unhoused population that the LCA1 Members seek to assist.

H. This pilot program will require a great deal of cooperation among the LCA1 Members in order to enable the efficient placement of homeless individuals currently to a Shelter Bed within the Salvation Army Bell Shelter.

I. The Salvation Army Bell Shelter, one of the largest shelters in the nation, is located within the City of Bell in the Southeast Los Angeles County subregion and accepts placements from throughout the Los Angeles County area through the County CES.

The Shelter Beds are contracted by various governmental and nonprofit entities, and the Salvation Army Bell Shelter, in recognition of the homeless housing impacts experienced by the LCA1 Members, has agreed to contract with the City of Bell for thirty-six (36) prioritized Shelter Beds to be allocated to the LCA1 Members’ homeless population, based on certain conditions. 01135.0001/536707.2 -3-
J. The City of Bell will take the lead on behalf of the LCA1 Members plus the County to coordinate the prioritized use of forty-two (42) Shelter Beds within the Salvation Army Shelter through a Homeless Liaison (as such term is defined below), which shall be a designated staff member selected by the City of Bell to implement the pilot program under this Agreement that is separately funded by a Measure H Innovation Fund Grant reimbursement through the Gateway Cities Council of Governments.

K. To this end, the City of Bell and The Salvation Army, a California corporation (“Salvation Army”) have entered into an agreement, dated March ____, 2022, as set forth in Exhibit A (the “Salvation Army Agreement”), whereby the City of Bell, has acquired the prioritized right for thirty-six (36) Shelter Beds within the Salvation Army Bell Shelter, and additional supportive services to serve the LCA1 Members’ homeless housing population.

L. Separately, the City of Bell, as lead agency, applied for and received a $500,000 Measure H Innovation Fund Grant (“Measure H Grant”) from the Gateway Cities Council of Governments, which reduces the total cost of this pilot program to the eight (8) LCA1 Members. With Measure H Grant funds, the total estimated cost of the Salvation Army Agreement to the eight (8) participating LCA1 Members would be reduced by fifty percent (50%) from $999,324 to $499,324. In return for the Measure H Grant award, the LCA1 Members agree that if the thirty-six (36) Shelter Beds cannot be filled by the LCA1 Members, open placements will be made available to other SPA 7 communities with pre-approval of the designated Homeless Liaison. The total number of SPA 7 placements from outside of the eight (8) LCA1 Members may not exceed fifty percent (50%) of the thirty-six (36) Shelter Beds, which is eighteen (18) out of the thirty-six (36) Shelter Beds at any one time. Placements will not be available to other SPA 7 communities through this Agreement until Shelter Bed occupancy drops below ninety percent (90%) occupancy, or thirty-three (33) of the thirty-six (36) Shelter Beds.

M. The City of Bell shall appoint an individual to serve as a liaison to all LCA1 Members and the County (the “Homeless Liaison”), and shall work with the participating LCA1 Members and the County to coordinate the use of the prioritized Shelter Beds within the Salvation Army Bell Shelter in addition to any other beds that are made available through the County CES.

N. The Shelter Beds are designed to provide the LCA1 Members with an additional inventory of homeless shelter beds to address the significant impacts of homelessness the LCA1 Members are experiencing. If any individuals choose to leave a placement at the Salvation Army Bell Shelter, either of their own volition or for violating the rules and policies of the Salvation Army Bell Shelter, they will add to the unhoused population in the communities of the Southeast Los Angeles subregion. Thus, the pilot program proposed by the LCA1 Members is designed to provide an enhanced level of support, resources, and communication in order to ensure any placement of individuals within the Salvation Army Bell Shelter remain for as long as reasonably possible.
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O. The LCA1 Members agree that the costs of this Agreement will be shared equally among all of the LCA1 Members and they shall be required to pay their equal share each month during the term of this Agreement. If a LCA1 Member chooses to withdraw from this Agreement, other cities within the SPA 7 area may be added to this Agreement with priority provided to communities closest to the Salvation Army Bell Shelter (which addition may require an amendment or supplement to this Agreement as determined by the City of Bell). The intent of the LCA1 Members is to retain a minimum of eight (8) participating entities, in order to ensure, i) that the cost of this Agreement is not prohibitive for any one member and, ii) that the Shelter Beds remain ninety percent (90%) occupied during the term of this Agreement.

AGREEMENT
NOW, THEREFORE, in consideration of the preceding recitals and the mutual covenants hereinafter contained, the Parties agree as follows:

Section 1. Incorporation of Recitals. The recitals set forth above are hereby acknowledged and agreed to by the Parties and are incorporated in the terms of this Agreement. Specifically, the City of Bell is acknowledged and agreed to as the lead agency, and its appointed Homeless Liaison is acknowledged and agreed to, for purposes of this Agreement.

Section 2. Term; Termination.
(a) The term of this Agreement will commence on March 1, 2022 and end on June 30, 2023 (the “Term”) for a total of 487 days.
(b) In addition, this Agreement may be terminated after June 30, 2022, (i) at the convenience of any LCA1 Member following thirty (30) days prior written notice to the City of Bell, and/or (ii) upon a termination of the Salvation Army Agreement by the Salvation Army or the City of Bell pursuant to the terms of the Salvation Army Agreement.

The City of Bell, as lead agency, may replace any party that terminates this Agreement with another city within the SPA7 area that executes an acknowledgement and acceptance of the terms of this Agreement (which, at the City of Bell’s discretion, may require an amendment to this Agreement).
(c) In the event of any termination by a LCA1 Member after June 30, 2022, and a replacement SPA 7 city is not immediately available to take such terminating Party’s share of the costs/payments required herein, then the equitable share of costs for this Agreement (along with the allocation of the thirty-six (36) Shelter Beds for all LCA1 Members) provided in Section 3 below shall be adjusted accordingly.

Section 3. Cost and Payment. It is agreed and acknowledged that the Parties will share the costs of this pilot program equally, and that, regardless of any ability of the City of Bell, the Homeless Liaison, and / or the Salvation Army Bell Shelter to actually enable the utilization of any Shelter Bed within the Salvation Army Bell Shelter for any LCA1 Member’s homeless population, each LCA1 Member shall be required to pay the monthly 01135.0001/536707.2 -5-
amount due under this Agreement on the first day of each month of the Term of this Agreement to the City of Bell in order for the City of Bell to pay any and all monthly invoices received from the Salvation Army without delay. If the invoice received by the City of Bell from the Salvation Army for the use of the Shelter Beds in any given month is less than the amount collectively paid by the LCA1 Members for such month, then the City of Bell shall promptly refund any such overcharge to each of the LCA1 Members on an equal basis.

As the City of Bell, as lead agency, was successful in procuring $500,000 in Measure H Grant funds from the Gateway Cities Council of Governments, the total cost for each of the Parties (as set forth below) is proportionally reduced during the term of the Measure H Grant fund term.

Total Agreement Cost
The total cost of the Salvation Army Agreement is $999,324 calculated at thirty-six (36) Shelter Beds per day at a cost of $57 per bed / per day for 487 days.

The City of Bell will invoice the Gateway Cities Council of Governments for $500,000 in Measure H Grant fund reimbursements, which would reduce the total cost of this Agreement to $499,324.

Los Angeles County First Supervisorial District will enter directly into a separate agreement with the Salvation Army Bell Shelter for four (4) additional Shelter Beds at a cost of $117,420. Los Angeles County Fourth Supervisorial District will enter directly into a separate agreement with the Salvation Army Bell Shelter for two (2) additional Shelter Beds at a cost of $58,710, to bring the total number of coordinated Shelter Beds in the Southeast Los Angeles subregion to forty-two (42) under this pilot program.

The eight (8) LCA1 Members will be invoiced monthly by the City of Bell for an equal one-eighth (1/8th) share. Each of the eight (8) LCA1 Members will be billed a maximum of $62,415.50 of the total Agreement of $499,324.

Monthly Invoice
The City of Bell, as lead agency, will submit the monthly invoice it receives from the Salvation Army pursuant to the Salvation Army Agreement, to each LCA1 Member upon five (5) business days of its receipt therefor, with, if applicable, backup documentation and related reports for the thirty-six (36) Shelter Beds.

Section 4. Specifications. The availability and use of the thirty-six (36) Shelter Beds allocated to each LCA1 Member shall be subject to the following specifications. In recognition of the complexity of the daily operations of the Salvation Army Bell Shelter, and the unknown personal, regional, and local factors which affect Shelter Bed availability, the Parties agree that a high level of communication, coordination, and flexibility is necessary to effectively use all available Shelter Beds, and to refrain from submitting Shelter Bed placements when inventory is not available. There is no guarantee that a Shelter Bed is available at any specific time, as the complex and shifting factors that affect 01135.0001/536707.2 -6-
Shelter Bed inventory are beyond the control of the City of Bell and the Salvation Army Bell Shelter. The purpose of this pilot program is to increase coordination and communication on homelessness within the LCA1 subregion, to develop data at a subregional level, and to develop improved and effective partnerships on a subregional level with regional service providers and nonprofit entities. (a) Initial Use of Crisis Housing Bed Inventory. Upon the notice from the Salvation Army of availability of Shelter Beds within the Salvation Army Bell Shelter, ten percent (10%) of the thirty-six (36) beds will be designated as public safety priority beds for emergency use by the public safety agencies of all LCA1 Members, for a total of four (4) beds. The remaining ninety percent (90%), or thirty-two (32) beds, will be prioritized as four (4) general inventory beds per each LCA1 Member. This distribution equals eight (8) LCA1 Members times four (4) beds each for a general inventory of thirtytwo (32) beds. Initial intake into a public safety priority bed shall also require participation from a public safety agency (e.g., Bell Police Department, Bell Gardens Police Department, Los Angeles County Sheriff, South Gate Police Department, Vernon Police Department, etc.). Once the new resident is placed in a public safety bed and completes the facility intake process, they will be rotated from the priority public safety bed into one of the thirtytwo (32) general beds, if a general bed is available. If the LCA1 Members cannot fill the Shelter Bed inventory, and the Shelter Bed occupancy drops below ninety percent (90%), the Homeless Liaison may refer participants from non LCA1 Member SPA 7 cities to ensure that the Shelter Bed inventory is used efficiently up to a maximum of eighteen (18) non LCA1 Member SPA 7 placements at any one time. The LCA1 Members shall use best efforts to efficiently and effectively coordinate the shared use of available Shelter Beds to maintain ninety percent (90%) occupancy and meet their specific local needs depending on bed availability. The Salvation Army has agreed, pursuant to the Salvation Army Agreement to coordinate in good faith to plan transfers of homeless individuals to other available support programs, based on participant eligibility (i.e., Veteran’s Administration program shelter beds, Department of Mental Health program shelter beds, Substance Abuse Prevention and Control program shelter beds) to increase the annual number of participants that can benefit from the forty (40) prioritized Shelter Beds under the Salvation Army Agreement. The LCA1 Members acknowledge and agree that the thirty-six (36) Shelter Beds are not actually reserved or dedicated to the LCA1 Members’ homeless population, but are merely prioritized to them under the Salvation Army Agreement. Each day there shall be an analysis of the occupancy of Shelter Beds and allocations will be made available to each of the LCA1 Members through the Homeless Liaison in coordination with the LCA1 Members. As such, the effectiveness of this pilot program requires cooperation and consistent communication between the LCA1 Members and the Homeless Liaison, given the fluidity of available bed occupancy (and the rotation in and out of such beds by homeless individuals).
(b) Recalculation of Crisis Housing Bed Inventory. In order to ensure the full and efficient use of the thirty-six (36) prioritized Shelter Beds, cooperation and communication between the Parties is essential. Informal analysis and recalculation of Shelter Bed use ratios shall occur every week day during the Term of this Agreement, and as needed, to use the available Shelter Beds efficiently. An initial thirty (30) day use analysis will be provided to the LCA1 Members by the City of Bell and/or the Homeless 01135.0001/536707.2 -7-
Liaison after the Effective Date and a secondary sixty (60) day use analysis will be provided to the LCA1 Members, in order to determine and agree to the most efficient bed use ratios. Thereafter, quarterly reviews will occur to determine the efficient use of the Shelter Beds, and the effectiveness of this pilot program and how it could be improved.

Shelter Bed inventory flexibility is critical in order to effectively address conditions in the field (given the fact that individuals placed within the Salvation Army Bell Shelter will likely be rotating in and out frequently) and in order to assess the success of program participants in receiving housing placement. As this program is a pilot program and requires participant flexibility, all Parties will designate a public safety contact and a staff contact for the Homeless Liaison to coordinate activities and improve communication, each of which are designated on the signature page for each of the Parties below. (c) Shelter Bed Availability Limitations. If the Salvation Army Bell Shelter is experiencing COVID-19 quarantine limits or holds on resident intake upon the execution of the Salvation Army Agreement, the Salvation Army Bell Shelter will not initiate invoicing for Shelter Beds until the beds are available. Limitations on Shelter Bed availability may exist depending on the number of available Shelter Beds in the Salvation Army Bell Shelter’s daily inventory. The Salvation Army Bell Shelter does not provide family shelter resources; thus LCA1 Members must coordinate placement of any such families to other shelters through the Homeless Liaison during business hours or call 211 (www.211la.org) to find suitable shelter or motel options for families in need. The Salvation Army Bell Shelter does not provide a kennel to shelter the pets of unhoused individuals in need. The thirty-six (36) Shelter Beds addressed in this Agreement are merely a supplement to the shelter beds available through the County CES. (d) Intake. New resident intake shall occur during regular business hours of 8:00 AM to 4:00 PM, Monday through Friday. The Salvation Army Bell Shelter provides 24 hour a day, seven day a week staffing, however the shelter has an inventory of four (4) safe rooms for intake and staff are required to perform COVID-19 protocols upon intake that limit the ability of the shelter to perform intake outside of regular business hours.

After hours domestic violence and/or other emergency placements are subject to the availability of an unoccupied safe room at the Salvation Army Bell Shelter. Emergency intake is available after hours, however due to a limited number of available safe rooms and due to COVID-19 protocols, after hours intake should only be for emergency situations. An after-hours call line that operates 24 hours a day will be provided to participating public safety agencies for use in the event of an after-hours emergency. (e) Length of Stay. Each participant will be limited to an initial stay of ninety (90) days. Two (90) day extensions are available upon request for participants actively working on a housing plan, for a maximum stay of 270 days for any individual participant.
(f) COVID-19 Protocols and Processes. The Salvation Army Bell Shelter restarted limited intake of residents into quarantine facilities on August 19, 2021. COVID19 protocols for intake include but are not limited to, i) any incoming participant is tested on the day of or on the day after intake regardless of vaccine status, ii) if an incoming participant is vaccinated, the participant may move into a public safety prioritized bed. If 01135.0001/536707.2 -8-
a participant is not vaccinated, they must remain in quarantine until two negative COVID19 tests are received. The second test occurs seven to eight days after the first, with results generally available within three days. Modular homes located on the greater Salvation Army Bell complex property serve as a first line of intake quarantine and are subject to availability.
(g) Homeless Liaison. The Homeless Liaison will coordinate daily with assigned Salvation Army Bell Shelter staff, in order to determine the daily inventory on weekdays of Shelter Bed availability and the roster of shelter residents, however, it shall not be required to ensure the availability of all thirty-six (36) Shelter Beds since such beds are only prioritized, they are not specifically reserved, and the LCA1 Members must coordinate with the Homeless Liaison in order to ensure allocation of Shelter Beds for proposed participants. The Homeless Liaison will coordinate daily with assigned LCA1 public safety agency assigned staff (as designated on the signature page to this Agreement) to report shelter bed inventory availability and to determine any planned public safety needs. The Homeless Liaison will coordinate daily with designated Salvation Army Bell Shelter staff to determine how many residents can be transferred to general bed inventory or to other programs to maximize Shelter Bed use. The City of Bell and the Homeless Liaison shall have no liability for any failure to ensure a placement of any LCA1 Member’s proposed participant / homeless population within a Shelter Bed. (h) Reporting.
(i) Reporting by Salvation Army Bell Shelter: It is expected that the Salvation Army Bell Shelter will provide, i) daily inventory counts to the Homeless Liaison and, ii) a monthly report and invoice to the City of Bell and the Homeless Liaison. (ii) Reporting by the Homeless Liaison: the Homeless Liaison will reasonably endeavor to provide: i) a monthly report and the Salvation Army Bell Shelter invoice it received to all participating LCA1 cities and, ii) a quarterly report to the LCA1 Members and the Gateway Cities Council of Governments.
(iii) Participant level data will be entered into the LAHSA HMIS system for program reporting and auditing purposes.
(iv) The following metrics and expected outcome measures will be reasonably tracked and reported: i) a minimum of one hundred (100) unduplicated individuals will be served each year during the Term of this Agreement, with a goal of one hundred and fifty (150) unduplicated individuals over the Term of the Agreement, ii) twenty percent (20%) of participants (of those able to work – e.g. not disabled or retired) will be employed by the expected exit date and, iii) thirty percent (30%) of participants will exit to permanent housing and, iv) eighty five percent (85%) of participants will complete a housing plan and, v) ten percent (10%) of participants will exit to another level of care (DMH IHP or other stable housing location). However, there shall be no liability to any of the Parties if such metrics and/or outcome measures are not achieved
01135.0001/536707.2 -9-
Section 6. Defaults and Indemnification Provisions.
(a) Defaults. In the event any of the Parties shall fail to pay its required share of the costs of the Shelter Beds in any given month during the Term of this Agreement (or any extension approved by the Parties), then such party shall be in immediate default under this Agreement, and the City of Bell shall be entitled to, and may sue for, the payment of all such unpaid amounts (and the defaulting party shall pay interest at the lesser of (i) 10% per annum, or (ii), the maximum rate permitted by law) from and after the due date of such monetary payment obligation until payment is actually received. The Parties acknowledge that money damages and remedies at law generally are inadequate and that specific performance is appropriate for the enforcement of this Agreement. Therefore, the remedy of specific performance shall be available to all Parties hereto. This subsection shall not limit any other rights, remedies, or causes of action that any party may have at law or equity.
(b) Indemnity by City of Bell. To the full extent permitted by law, the City of Bell agrees to indemnify, defend and hold harmless each of the other Parties, and their respective officers, employees and agents (“Indemnified Parties”) against, and will hold and save them and each of them harmless from, any and all actions, claim, or liabilities that may be asserted or claimed by the Salvation Army, arising out of or in connection with any defaults or failures asserted under the Salvation Army Agreement against the City of Bell, and/or the City of Bell’s negligent performance of the activities, work, or operations provided under this Agreement, except claims or liabilities occurring as a result of Indemnified Parties’ negligence or willful acts or omissions. The indemnity obligations contained herein shall be binding on successors and assigns of the Parties and shall survive termination of this Agreement.
(c) Indemnity by Parties. To the full extent permitted by law, each of the Parties agree (based on, and only up to, the Parties’ respective proportionate share of the costs due from each party as set forth in Section 3 above) to indemnify, defend and hold harmless the City of Bell and the Homeless Liaison, and their respective officers, employees and agents against, and will hold and save them and each of them harmless from, any and all actions, either judicial, administrative, arbitration or regulatory claims, damages to persons or property, losses, costs, penalties, obligations, errors, omissions or liabilities that may be asserted or claimed by the Salvation Army, or any other person, firm or entity arising out of or in connection with the Shelter Beds, the Salvation Army Agreement, and/or this Agreement, except with respect to the negligent performance of the activities, work, or operations provided by the City of Bell or the Homeless Liaison under the Salvation Army Agreement or herein. In no event shall any party’s aggregate liability exceed the party’s respective proportionate share of the costs due from each party as set forth in Section 3 above. The indemnity obligations contained herein shall be binding on successors and assigns of the Parties and shall survive termination of this Agreement.

Notwithstanding anything to the contrary herein, in the event any of the Parties fail to make any payment due hereunder, which causes the City of Bell to fail to make the payments due under the Salvation Army Agreement, the Parties shall share in any costs, liabilities, or claims that result from the failure of such nonpayment and the City of Bell shall not be 01135.0001/536707.2 -10-
required to make any additional payment to the Salvation Army to cover such unreimbursed amounts.

Section 6. Miscellaneous Provisions.
(a) Notices. All notices or other communications under this Agreement shall be in writing and shall be delivered to the appropriate party at the address set forth below (subject to change from time to time by written notice to all other Parties to this Agreement). All notices, demands or other communications shall be considered as properly given if sent by: (a) electronic mail and regular mail; or (b) overnight express mail, charges prepaid. Notices so sent shall be deemed effective one (1) business day after mailing or the same day as sent for electronic delivery. For purposes of notice, the addresses of the Parties shall be as set forth on the signature pages contained herein. (b) Attorneys’ Fees. If any of the Parties to this Agreement is required to or seeks to initiate or defend litigation against any other party, the prevailing party in such action or proceeding, in addition to any other relief which may be granted, whether legal or equitable, shall be entitled to reasonable attorneys’ fees. (c) Integration; Amendments. This Agreement including the attachments hereto is the entire, complete and exclusive expression of the understanding of the Parties (including the Salvation Army Agreement). It is understood that there are no oral agreements between the Parties hereto affecting this Agreement and this Agreement supersedes and cancels any and all previous negotiations, arrangements, agreements and understandings, if any, between the Parties (other than the Salvation Army Agreement), and none shall be used to interpret this Agreement. No amendment to or modification of this Agreement shall be valid unless made in writing and approved by the City of Bell as the lead agency. The Parties agree that this requirement for written modifications cannot be waived and that any attempted waiver shall be void.
(c) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, and such counterparts shall constitute one and the same instrument. Signatures transmitted electronically shall be deemed originals for all purposes of this Agreement.
(d) Authority. The persons executing this Agreement on behalf of each of the Parties hereto warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Agreement on behalf of said party, (iii) by so executing this Agreement, such party is formally bound to the provisions of this Agreement, and (iv) the entering into this Agreement does not violate any provision of any other agreement to which said party is bound.
[SIGNATURES ON FOLLOWING PAGE]
01135.0001/536707.2 -11-
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the date and year first-above written.

CITY:

CITY OF BELL, a California charter city
____________________________________
Name:

Title:

Address: City Hall; 6330 Pine Ave, Bell, CA
90201
ATTEST:
_________________________________
Angela Bustamante, City Clerk
APPROVED AS TO FORM:

ALESHIRE & WYNDER, LLP
_________________________________
David J. Aleshire, City Attorney
01135.0001/536707.2
CITY:

CITY OF BELL GARDENS,
a California general law city
By: __________________________
Name:

Title:

Address: ______________________
Public Safety Contact:
_________________________________
Staff Contact:
_________________________________
CITY:

CITY OF COMMERCE,
a California general law city
By: __________________________
Name:

Title:

Address: ______________________
Public Safety Contact:
_________________________________
Staff Contact:
_________________________________
CITY:

CITY OF CUDAHY,
a California general law city
By: ____________________________
Name:

Title:

Address: ______________________
Public Safety Contact:
_________________________________
Staff Contact:
01135.0001/536707.2
_________________________________
CITY:

CITY OF HUNTINGTON PARK,
a California general law city
By: __________________________
Name:

Title:

Address: _______________________
Public Safety Contact:
_________________________________
Staff Contact:
_________________________________
CITY:

CITY OF MAYWOOD,
a California general law city
By: ___________________________
Name:

Title:

Address: ________________________
Public Safety Contact:
_________________________________
Staff Contact:
_________________________________
CITY:

CITY OF SOUTH GATE,
a California general law city
By: _____________________________
Name:

Title:
01135.0001/536707.2
Address: _________________________
Public Safety Contact:
_________________________________
Staff Contact:
_________________________________
CITY:

CITY OF VERNON,
a California charter city
By: ____________________________
Name:

Title:

Address: ________________________
Public Safety Contact:
_________________________________
Staff Contact:
_________________________________
City Council Agenda Item Report
Submitted by: Adriana Ramos
Submitting Department: Public Utilities
Meeting Date: March 15, 2022

SUBJECT
Change Order No.16 to the Amended and Restated Services Agreement with Siemens Energy, Inc.

Recommendation:

A. Find that approval of the proposed action is exempt from California Environmental Quality Act (CEQA) review, because it is a government fiscal activity that will not result in direct or indirect physical changes in the environment, and therefore does not constitute a “project” as defined by CEQA Guidelines section 15378; to the extent the Services Agreement with Siemens Energy provides for facility and equipment maintenance or repairs, such work is categorically exempt from CEQA review, in accordance with CEQA Guidelines § 15301, because the project consists of the maintenance, repair or minor alteration of existing structures, facilities, or equipment, and involves negligible or no expansion of an existing use;
B. Approve and authorize the City Administrator to execute Change Order No. 16 to the Amended and Restated Services Agreement with Siemens Energy, Inc., (Siemens Energy) in substantially the same form as submitted, to revise the Payment Schedule and amend the termination date of the agreement; and
C. Approve the issuance of a blanket Purchase Contract in an amount not-to-exceed $450,000 for maintenance services with Siemens Energy for the remainder of fiscal year 2021-2022.

Background:

On November 16, 2021, City Council adopted Resolution No. 2021-41, approving a Purchase and Sale Agreement (PSA) with Bicent (California) Malburg LLC (Bicent) for the acquisition of the Malburg Generating Station (MGS). Under the PSA, the City is required to assume or otherwise comply with certain vendor contracts previously entered by Bicent. As such, the City is obligated to assume the existing Long Term Service Agreement (LTSA) between Bicent and Siemens Energy.

In accordance with Section 2.6(a)(12) of the PSA, at the Closing, Bicent would deliver to the City “an assignment of the LTSA executed by Seller, Purchaser, and Siemens Energy, substantially in the form of Exhibit F.” The referenced ‘Exhibit F’ is the Assignment of the Amended and Restate Services Agreement for MGS executed by Bicent, the City and Siemens Energy.

As assigned, the LTSA was designed for Siemens Energy to provide Program Parts, NonProgram Parts, Miscellaneous Hardware, Inspection Hardware, Generator Parts, Generator Scheduled Outages, Steam Turbine Parts, Steam Turbine Scheduled Outages, Scheduled Outage Services and Program Management Services to Bicent for the ongoing needs of MGS.

The agreement was structured in form and function with consideration to the terms and requirements of the Power Purchase Tolling Agreement (PPTA) between the City and Bicent, dated April 10, 2008. As required by the PSA, the PPTA was terminated.

The acquisition of MGS, concurrent with the termination of the PPTA, renders areas of the LTSA obsolete. In addition, changes in the long-term turbine maintenance marketplace and evolving electric marketplace, suggest the City will benefit financially and operationally by an early termination of the LTSA.

Siemens Energy recently provided Change Order No. 16 to the Amended and Restated Services Agreement. Change Order No. 16 amends the termination date to occur on or around September 30, 2025. City Council approval of Change Order No. 16 will enable a discount to the originally scheduled 2023 and 2024 payments by $750,000 (upon escalation) and will eliminate the scheduled payments for services beyond the June 2024 invoice.

Subsequently, staff will conduct an analysis to determine how to best meet the needs of the MGS operations in the long-term, and work through the City procurement process to secure a vendor with the appropriate competency to maintain proper maintenance at the power plant.

Accordingly, VPU is requesting to amend the LTSA agreement with Siemens in accordance with Change Order No. 16.

Change Order No. 16 has been approved as to form by the City Attorney’s Office and proprietary and confidential information has been redacted.

Staff is also seeking approval of a blanket Purchase Contract in the amount of $450,000 through the remainder of the current fiscal year to cover services needed from Siemens Energy for the Malburg Spring 2022 Outage, scheduled from May 1 through May 26, 2022.

Fiscal Impact:

The total fiscal impact associated with Change Order No. 16 is $10,035,526 and will be included in the FY 2023-24 and FY 2024-25 budgets accordingly. The total fiscal impact of the proposed blanket Purchase Contract for services needed from Siemens for the Spring 2022 Outage is $450,000. Sufficient funds for the Spring 2022 outage services are available in Electric Fund, Resource Planning Division Account No. 055.9200.500180 – Capacity.

Attachments:

1. Change Order 16 - Siemens Energy Inc. - Redacted
Confidential Information
CHANGE ORDER NO. 16 Contract: Amended and Restated Services Agreement, dated as of September 30, 2010
Effective Date: March 15, 2022 Buyer: City of Vernon, CA, as Assignee Seller: Siemens Energy, Inc.

1. Introduction. This Change Order No. 16 (this “Change Order”) is agreed to pursuant to that certain Amended and Restated Services Agreement, dated as of September 30, 2010 (the “Contract”) by and between Siemens Energy, Inc. (“Seller”) and City of Vernon, CA, as Assignee (“Buyer”). Capitalized terms used but not defined herein shall have the meaning given them in the Contract. This Change Order as submitted by one Party to the other shall constitute a request for a Change Order. Upon its countersignature in the space provided below, this Change Order shall constitute a Change Order within the meaning of the Contract.

2. Scope of Change.

The Parties agree to the following:
(1) Delete in its entirety Section 5.1 of the Contract, and any amendments thereto, and replace it with the following Section 5.1 “Term”:

5.1 Term. The Term of the Contract shall commence on the Effective Date and unless terminated early pursuant to Article 12, shall expire on a Combustion Turbine by Combustion Turbine basis, when each Combustion Turbine has reached the earlier of:
(i) accumulates a total EOH reading of 59,999 EOH as counted from the March 2018 Level C Scheduled Outage (Outage 6);
(ii) accumulates 499 EOC from the 2022 Level B Scheduled Outage (Outage 9); or
(iii) September 30, 2025
In the event Buyer reasonably believes that all of the Scheduled Outages planned to be performed in accordance with Exhibit C “Projected Scheduled Outage Plan“ (Rev. 2) will not be completed by the end of the Term, Buyer shall provide notice to Seller no later than twelve (12) months prior to the end of the Term that an extension is required. Promptly upon Seller’s receipt of such notice, the Parties shall negotiate in good faith a Change Order extending the Term by such amount of time that the Parties reasonably believe is necessary to complete all of the Scheduled Outages planned to be performed in accordance with Exhibit C "Projected Schedule Outage Plan"(Rev.2).

For the avoidance of doubt, Seller’s liabilities related to the Steam Turbine as identified in Section 5.4 and Article 8 shall end when the first Combustion Turbine reaches the end of its Term.

Confidential Information
(2) Delete and replace in its entirety the following Exhibits of the Contract, and any amendments thereto:
i. Exhibit C is hereby deleted and replaced with Exhibit C “Projected Schedule Outage Plan” (Rev. 2), attached to this Change Order as Appendix 1. ii. Exhibit E is hereby deleted and replaced by Exhibit E “Payment Scheduled; Taxes” (Rev. 2) attached to this Change Order as Appendix 2. iii. Exhibit G is hereby deleted and replaced by Exhibit G “Cancellation Scheduled” (Rev. 2), attached to this Change Order as Appendix 3. (3) Delete in its entirely ARTICLE 11 of the Contract and replace it with the following:

ARTICLE 11 INSURANCE

11.1 Seller’s Insurance. Seller shall, at its own expense, procure and maintain policies of insurance of types and in the amounts set forth below, for the duration of the Contract, including any extensions thereto and shall provide to Buyer certificates evidencing such coverage. The insurance shall be placed with insurers with a Best's rating of no less than A-/VIII or better (or if lower, otherwise satisfactory to Buyer). Seller shall provide certificates in a form that is reasonably acceptable to Buyer. In the event of an accident or occurrence that could reasonably be believed to give rise to the right of Buyer to make a claim against a policy as an additional insured under Seller’s insurance, Seller shall make available a redacted copy of the applicable policy for Buyer’s review at a time and place designated by Seller.
(a) Professional Errors and Omissions coverage with limits of not less than five million dollars ($5,000,000) per claim and in the aggregate for engineering services. Seller shall maintain such coverage for at least one (1) year after the termination of this Agreement. This coverage may be provided via endorsement to Seller’s Commercial General Liability policy, or through a corporate affiliate located outside of the U.S.
(b) Commercial General Liability insurance, including bodily injury, property damage, products/completed operations, contractual, and personal injury liability, with a combined single limit of two million dollars ($2,000,000) per occurrence with a four million dollars ($4,000,000) annual aggregate.
(c) umbrella excess liability coverage providing excess general liability, automobile liability and employer’s liability with a combined single limit of five million dollars ($5,000,000) per occurrence and in the aggregate. Any umbrella liability policy or excess liability policy will in “following form” and will contain a provision to the effect that, if the underlying aggregate is exhausted, the excess coverage will drop down as primary insurance.
(d) workers’ compensation insurance with statutory limits, and employers liability insurance with limits of not less than one million dollars ($1,000,000) per accident.

Confidential Information
(e) Automobile liability insurance in comprehensive form covering owned, non-owned and hired automobiles for a combined single limit of one million Dollars ($1,000,000) per accident.

Seller agrees to cause its commercial general liability, umbrella excess liability and automobile liability policies/coverages listed in Sections 11.1(b), (c) and (e) to include Buyer, its directors, commissioners, officers, employees, and agents as additional insured to the extent that bodily injury, death or third-party property damage are caused by the negligent acts or omissions of Seller, its agents, suppliers or subcontractors. The coverage afforded to Buyer as an additional insured shall apply on a primary and noncontributory basis for the benefit of Buyer before the Buyer’s own insurance or selfinsurance shall be called upon to protect it as a named insured. Buyer shall be given thirty (30) Days advance notice of cancellation or material change. Except for Professional Liability, all policies furnished by Seller shall include waivers of subrogation rights against Buyer, its directors, commissioners, officers, employees, and agents.

11.2 Buyer’s Insurance.

11.2.1 Without limiting Buyer’s liability under this Contract, Buyer shall maintain in full force and effect during the Term of this Contract with insurance companies having a Best’s Insurance Guide rating of “A-” or better (or otherwise satisfactory to Seller), the insurance described below, with coverage at levels normal in the ordinary course of its business, but at levels no less than the minimums indicated, and shall provide to Seller certificates evidencing such coverages. In the event of an accident or occurrence that could reasonably be believed to give rise to the right of Seller to make a claim against a policy as an additional insured under Buyer’s insurance, Buyer shall make available a redacted copy of the applicable policy for Seller’s review at a time and place designated by Buyer.
(a) Property damage insurance, including boiler and machinery coverage covering all real and personal property of Buyer on a 100% replacement cost basis; (b) commercial general liability insurance, including bodily injury, property damage, products/completed operations, contractual, and personal injury liability, with a combined single limit of one million Dollars ($1,000,000) per occurrence with a two million Dollar ($2,000,000) annual aggregate;
(c) umbrella excess liability coverage providing excess general liability, automobile liability and employer’s liability with a combined single limit of five million Dollars ($5,000,000);
(d) workers’ compensation insurance with statutory limits, and employers liability insurance with limits of not less than one million Dollars ($1,000,000) per accident; and
(e) business automobile liability insurance in comprehensive form covering owned, non-owned and hired automobiles for a combined single limit of one million Dollars ($1,000,000) per accident.

11.2.2 Buyer agrees to cause its commercial general liability, umbrella excess liability and automobile liability policies/coverages listed in Sections 11.2.1(b), (c) and (e) to include Confidential Information
Seller and its affiliates as additional insureds to the extent that bodily injury, death or third party property damage are caused by the negligent acts or omissions of Buyer, its agents, other suppliers or subcontractors. The coverage afforded to Seller as an additional insured shall apply on a primary and non-contributory basis for the benefit of Seller before the Seller’s own insurance or self-insurance shall be called upon to protect it as a named insured. Seller shall be given thirty (30) Days advance notice of cancellation or material change. All policies furnished by Buyer shall include waivers of subrogation rights against Seller and its affiliates.
(4) Delete in its entirety Section 16.14 of the Contract, and replace it with the following Section 16.14 “Notices”:

16.14. Notices. Except as otherwise specified in Section 5.3, any written notice, direction, instruction, request, or other communication required or permitted under this Contract, including payment invoices from Seller to Buyer, shall be deemed to have been duly given on the date of receipt, and shall be either served personally or by facsimile to the Party to whom notice is to be given, or mailed to the Party to whom notice is to be given, by first class registered, nationally recognized courier service or certified mail, return receipt requested, postage prepaid, and addressed to the addressee at the address stated opposite its name below, or at the most recent address specified by written notice given to the other Party in the manner provided in this Section 16.14.

BUYER: City of Vernon 4305 Santa Fe Avenue
Vernon, CA 90058
Attention: Abraham Alemu, General Manager of Public Utilities Tel: (323) 583-8811 ext. 250
Email: [email protected]
With a copy to:

City of Vernon, CA
4305 Santa Fe Avenue
Vernon, CA 90058
Attention: Richard Olsen, Assistant General Manager of Generation and Operation
Tel: (323) 583-8811 ext. 278
Email: [email protected]
SELLER: Siemens Energy, Inc.
4400 Alafaya Trail
Orlando, FL 32826-2399
Attention: Head of IA Long Term Programs
Telephone: (407)701-2036
Email: [email protected]
Confidential Information
With a copy to:

Siemens Energy, Inc.
4400 Alafaya Trail
Orlando, FL 32826-2399
Attention: Legal Department

4. Timing.

This Change Order shall be effective as of the effective date stated above.

5. Other Terms and Conditions.

Except as otherwise specifically provided in this Change Order, all other terms and conditions of the Contract shall remain in full force and effect.

IN WITNESS WHEREOF, the Parties, intending to be legally bound, have caused this Change Order No. 16 to be executed by their duly authorized representatives to be effective as of the date first above written.

SELLER BUYER
SIEMENS ENERGY, INC. CITY OF VERNON, CA
By: By:

Name: Name:

Title: Title:

Date: Date:

SIEMENS ENERGY, INC. ATTEST:

By: Lisa Pope, City Clerk
Name: APPROVED AS TO FORM:

Title: ____________
Zaynah Moussa, Interim City Attorney
______________________________
Date:

Confidential Information
Appendix 1
Exhibit C – Projected Scheduled Outage Plan (Rev. 2)
Scheduled Outages will be performed based on the projected Scheduled Outage plan below, which may be amended from time to time by Seller.

Note 1: L4 generator outage requires generator rotor removal.

Note 2: For purposes of Section 8.6 "Scheduled Outage Duration and Exclusive Remedy" duration shall start from the time the Steam Turbine is off turning gear and Buyer has provided access to Seller's Scheduled Outage personnel to the applicable Program Parts, Miscellaneous Hardware and Inspection Hardware that have been delivered to the Site for such Scheduled Outage
Note 3: Outage 12 is not included in the Contract Term, shown as reference only to show timing of the end of the Term.

Scheduled
Outage No.

Contract
Est. Date
Approx.

Contract
Accured
EOH
CT1
Inspection
Type
CT2
Inspection
Type
ST
Inspection
Type
GT GEN
Inspection
ST GEN
Inspection
Actual
Outage Date
Outage
Duration
in Hours
Outage 01 - 50000 - - - - - March 2012 -
Outage 02 - 60000 - - - - - April 2013 -
Outage 03 - 70000 - - - - - April 2014 -
Outage 04 - 80000 - - - - - Nov. 2015 -
LTP Outage 05 - 90000 - - - - - March 2017 -
Contract Outage 06 - 100000 - - - - - March 2018 -
Outage 07 - 110000 - - - - - May 2019 -
Outage 08 - 120000 - - - - - March 2021 -
Outage 09 May 2022 130000 B B LO L3 L3 456
Outage 10 May 2023 140000 A A ASI L1 L1 72
Outage 11 Nov. 2024 150000 A A ASI L1 L1 72
End of Term Sept. 2025
Outage 12
(not included in
Contract, for
reference only)
Nov. 2025 160000 C C MO L4 L4
Confidential Information
Appendix 2
Exhibit E – Payment Scheduled; Taxes (Rev. 2)

1. Basis for Payment Schedule

1.1 The Payment Schedule set forth in Section 2 below (the "Payment Schedule") is based on the Terms and Conditions of this Contract. The prices provided in the Payment Schedule represent an operating mode based on the EOH used to determine the inspection intervals.

Further, the Payment Schedule is based on the number of Planned Outages set forth on Exhibit C "Projected Scheduled Outage Plan" (Rev. 2) and assumes the total number payments in the Payment Schedule are paid.

1.1.1 Buyer has the option to pre-pay any payment. If Buyer elects to pre-pay any amount under this Contract, the Payment Schedule set forth below shall be restated in its entirety, as discussed and mutually agreed by the Parties, pursuant to a Change Order in accordance with Article 6, to reflect the application of such pre-payment to reduce the payment amount(s) specified by Buyer on a dollar-for-dollar basis.

1.2 The Payment Schedule is based upon Seller invoicing the Buyer for the entire amount due in each year of the Contract Term, unless earlier terminated, in accordance with the Payment Schedule. The Payment Schedule was based on Exhibit C "Projected Scheduled Outage Plan" (Rev. 2). Seller shall present an invoice to the Buyer as specified in Section 2.

2. Payment Schedule
Year Invoice Date Payment
2023 June 10th, 2023 $4,897,589
2024 June 10th, 2024 $5,137,937
All amounts described above shall be escalated pursuant to the Escalation Factor at the time of invoice.

3. Payments for Change Orders
Any Additional Work performed or provided by Seller outside the scope of the Service Program will be purchased through a separate Change Order in accordance with Article

6. Confidential Information

4. Adjustments to Prices

4.1 Escalation Mechanics
All Fees due to Seller under this Contract shall be paid in U.S. Dollars and escalated at the time of invoice according to the Escalation Factor using the calculated rate developed at the beginning of each year.

4.2 Escalation Factor
The annual percentage change (rounded to four (4) decimal places) in the Gross Domestic Product Implicit Price Deflater, as reported in the Survey of Current Business published in February of each subsequent year, and revised thereafter, by the Bureau of Economic Analysis, United States Department of Commerce, Washington, D.C. (the "GDPIPD Index"), will be used for the computation of "Escalation Factor" to be used to determine the applicable escalation amounts due and payable hereunder unless otherwise noted.

In the event an "annual" value is not posted, the arithmetic average of the quarterly or monthly cost indices for the previous year in question will be used.

Fees subject to the Escalation Factor shall be adjusted either up or down by the Escalation Factor at the time of each invoice. Should the indices specified in the formula be discontinued, or should the basis of an index be modified, the Parties shall mutually agree on an appropriate correction factor or substitute index. "Escalation Factor'' means: the net percentage increase or decrease (as the case may be) in the GDPIPD Index over the period from base date of January 1, 2015 ("annual" index value of 108.272) for calendar year 2014 through date of the subject invoice, utilizing the most current "annual" escalation data released for the 12 month period for the previous Calendar year. The Escalation Factor shall be calculated by the following formula:

Escalation Factor = (AF - 108.272) I 108.272, where AF is the latest GDPIPD Index The Escalation Factor shall use the average of the applicable index calculated to the nearest fourth decimal point. If the next succeeding decimal place is five (5) or higher, then the preceding figure shall be raised to the next figure.

The following is a list of Fees that are subjected to this provision for escalation:

1. All Fees described in Exhibit E

5. Change Order Discounts
During the Term of the Contract, all prices paid by Buyer pursuant to a Change Order shall be discounted at the following rates: (a) discount of ten percent (10%) off of the prices set forth in the Domestic Price List with respect to Services; (b) a discount of five percent (5%) off of the Non-Program Parts, Miscellaneous Hardware and Inspection Hardware at the prices set forth in Seller's price quote at the time of supply; and (c) a discount of twenty percent (20%) off of the prices set forth in the Domestic Price List with respect to Program Confidential Information
Parts. The terms and conditions of this Contract shall prevail over any terms and conditions or selling policies specified in the Seller's price lists or in any Seller quote.

6. Tax Allocation
Pursuant to Section 4.2 of this Contract, the Contract Price shall be allocated for Tax purposes, and each invoice delivered by Seller to Buyer pursuant to this Contract shall reflect such allocation, as follows:

Parts: new parts and Miscellaneous Hardware = 35%
Services: repaired parts, field service and project management = 65% Confidential Information
Appendix 3
Exhibit G - Cancellation Schedule (Rev. 2)
Pursuant to Article 12.4 and 12.5 of this Contract, the following cancellation fees shall apply for each Combustion Turbine:

Term Amount per CT
Upon the effective date of Change Order
No. 16
$2,500,000
After 2022 payment up to 2023 payment $3,500,000
After 2023 payment up to 2024 payment $1,000,000
After 2024 payment $250,000
City Council Agenda Item Report
Submitted by: Lisa Pope
Submitting Department: City Clerk
Meeting Date: March 15, 2022

SUBJECT
City Council Appointments to Outside Agencies
Recommendation:

Appoint a delegate and alternate to represent the City at the Southern California Association of Government 2022 Regional Conference and General Assembly.

Background:

Previously the City Council appointed a representative and alternate to the Southern California Association of Governments (SCAG). As such, following the June 1, 2021 Special Municipal Election which created vacancies on the Council, on July 20, 2021, the City Council appointed Council Member Lopez as the representative and Mayor Pro Tem Davis remained as the alternate.

The current delegate and alternate are unable to attend the Conference, therefore, the Council should select a delegate and alternate (if applicable) to represent the City.

Each city Delegate Representative (or Alternate in the absence of the Delegate) will vote on agenda items pertaining to the General Assembly – Business Meeting. Each city Delegate Representative (or Alternate in the absence of the Delegate) will receive a complimentary onenight hotel accommodation at the JW Marriott Resort & Spa for the night of May 5, validated overnight parking and meals during the conference.

The positions are required to file Statement of Economic Interest, Fair Political Practices Form 700. SCAG's recent policy is that only those attending the Annual Conference are required to file a Form 700. Therefore, in the future, the appointments will be made in March or April for the purpose of the Conference.

Fiscal Impact:

There is no fiscal impact associated with this report.

Attachments:

None.

City Council Agenda Item Report
Submitted by: Adriana Ramos
Submitting Department: Public Utilities
Meeting Date: March 15, 2022

SUBJECT
Labor and Materials Contract with Petrelli Electric, Inc. to Provide High Voltage Electric System Service, Maintenance and Utility Support
Recommendation:

A. Approve and authorize the City Administrator to execute a Labor and Materials Contract with Petrelli Electric, Inc. (Petrelli Electric), in substantially the same form as submitted, for a five-year term effective July 18, 2022, with an option to extend for an additional five years after the expiration of the initial term, to provide high voltage electric system service, maintenance, and utility support to Vernon’s Electric and Fiber Optic Systems; and
B. Pursuant to Sections 3.32.220(B) and 3.32.110(B)(3) of the Vernon Municipal Code (VMC), find that it is commercially unreasonable to rebid the proposed contract for high voltage electric system service, maintenance, and utility support every three years due to significant risks to the electric system reliability and responsiveness, as well as added costs to the City and contractor including a steep learning curve in potential frequent transitions in contracted services.

Background:

The City of Vernon has the benefit of having a locally-owned utility, where the focus and priority are serving the customers and community within its 5.2-mile jurisdiction. Vernon Public Utilities (VPU) has a unique customer base where most customers are very large industrial and commercial companies. Vernon’s average electric baseload is 165 megawatts (MW), equivalent to a medium-sized community, similar to the size of Pasadena, Glendale, or Burbank. VPU is the only publicly owned utility in Southern California to offer full utility services of electric, water, natural gas, and fiber optics. Additionally, the majority of VPU’s electric transmission and distribution system consists of high voltage lines, in comparison to most other publicly owned utilities that have a blend of high voltage and low voltage. In order to provide safe, reliable, and high-quality electric utility services at competitive rates, VPU has utilized a hybrid model for its electric operations consisting of in-house staff and contracted services.

Vernon’s business community heavily relies on VPU’s ability to maintain highly reliable and responsive continual electric services ensuring business productivity around the clock. Taking into account the size and the 24/7 operations of many of its customers, VPU currently supplements the electric system maintenance, construction, and emergency restoration services with contracted services. With the current agreement for these services set to expire in July of this year, VPU issued a Request for Qualifications (RFQ) and subsequently a Request for Proposals (RFP) to solicit proposals from various qualified contractors to provide such services. Based on the results of the RFP, staff recommends that the City Council approve the proposed Labor and Materials Contract with Petrelli Electric.

Petrelli Electric is the City’s current contractor and was selected in May 2012 following an RFP process for the City’s electric system maintenance. The current contract was established for a five-year term, with an option to extend another five years upon mutual agreement of the City and Contractor. The five-year extension is set to expire on July 17, 2022. To avoid any lapse in this essential service and in accordance with Vernon Municipal Code (VMC) 3.32.080 regarding competitive selection, staff issued a Request for Qualifications (RFQ) for High Voltage Electric System Service, Maintenance, and Utility Support on November 4, 2021. The pre-qualification package was advertised on the City's website, the Planet Bids platform, and directly notified 90 prospective contractors through Planet Bids. Due to the extensive and comprehensive nature and scope of this work, staff found it prudent to establish a qualified list of contractors before issuing an RFP.

Interested contractors submitted a standard questionnaire and provided supplemental background information to demonstrate that they possessed sufficient experience and the ample resources necessary to work on VPU’s Electric System, including qualified electrical workers trained to work safely and responsively on energized high voltage systems. A total of 26 contractors downloaded the pre-qualification package as prospective proposers, and 4 submitted a complete package. The four submissions received were deemed qualified, based on an evaluation matrix of utility experience, training, and safety records, and were placed on the ‘pre-qualified’ list of contractors. VPU developed the following list of pre-qualified high voltage electric contractors:
• Henkels & McCoy, Inc.
• Hotline Construction, Inc.
• Parkia, Inc. Engineering & Construction
• Petrelli Electric Co.

Accordingly, on December 16, 2021, VPU issued an RFP to solicit proposals to perform High Voltage Electric System Service, Maintenance, and Utility Support to the pre-qualified list of contractors. The scope of work included, but was not limited to, construction of delivery facilities and infrastructure, high voltage switching, routine maintenance, and inspections, as well as emergency restoration and repairs to Vernon’s Electric and Fiber Optic Systems. In addition, VPU staff held outreach efforts, including a pre-proposal meeting with all contractors.

Subsequently, proposal packages were received from each pre-qualified contractor by the February 16, 2022 deadline.

A qualified panel thoroughly examined each proposal utilizing criteria to measure experience, work plan, references, and cost. Petrelli Electric demonstrated the highest competence and most cost-effective approach to assist VPU in service planning, construction, maintenance, and emergency restoration of the Vernon Electric and Fiber Optic Systems. The proposal submitted by Petrelli Electric ranked the highest across the panel and was, therefore, deemed the most qualified. Their proposal was 30% lower than the other bidders, which was significantly more cost-effective than the three other proposals. Petrelli’s labor cost by classification represented the most economical approach to satisfy the scope of work.

Additionally, their proposal demonstrated expertise and experience through a comprehensive approach to the work scope. Petrelli Electric possesses considerable experience in Vernon to perform a wide array of tasks, including system expansion, capital improvements, and emergency outage restoration. As noted within this report, Petrelli Electric is acutely aware of Vernon’s business community and the nature of goods and products produced around the clock. Oxygen and liquid high-pressure containment that serve hospitals throughout the state, recycled glass bottling that relies heavily on consistent temperature throughout the manufacturing process, and cold storage of essential foods imported and exported throughout the world have benefited from Vernon’s 99.99% electric system availability and quick restoration. In addition, Petrelli Electric’s workforce has extensive familiarity and knowledge of the Los Angeles Department of Water and Power (LADWP) and Southern California Edison (SCE) systems, which is critical given that VPU’s Electric system neighbors LADWP and is connected to SCE.

Petrelli Electric has more than 39 years of experience in the electric utility industry, including years of exceptional service to Vernon’s Electric and Fiber Optic System. Petrelli Electric is proven, tested, highly capable, and uniquely qualified to provide the wide-ranging scope of services in a responsive manner that Vernon customers have come to expect. In addition, Petrelli Electric has demonstrated consistency and stability with an outstanding safety record and industry-leading restoration capabilities in the most challenging situations. Petrelli Electric’s proximity to the City allows for timely restoration on average under an hour for sustained outages.

Contracting with Petrelli Electric has resulted in outstanding reliability and restoration metrics for VPU. VPU currently stands at 99.99% electric system availability, an indication of high reliability which means fewer outages and faster response times. These metrics have garnered national recognition for system availability and system improvement. Given that high voltage electric work is considered dangerous and carries significant risks, it is essential that the crews working on the lines are experienced, skilled, and qualified, and have the necessary and up-to-date equipment to safely and efficiently work on maintaining and restoring power.

Petrelli Electric has a proven track record in providing an exceptionally skilled staff and crews working alongside VPU electric operations personnel resulting in a seamless workflow to provide safe and reliable electric service to all VPU’s electric customers. Moreover, contracting for these services also supports the City’s objective to reduce pension obligations while delivering high-quality utility services at competitive rates.

By awarding the proposed contract to Petrelli Electric, VPU can not only continue to serve the community in a very responsive and dependable manner but at an outstanding value as well.

As such, staff recommends that Petrelli Electric, Inc. be awarded the contract to provide high voltage electric system service, maintenance, and utility support based on the RFQ and RFP process results. The proposed Labor and Materials Contract will have a five-year term with an option to extend an additional five years. Pursuant to Sections 3.32.220(B) and 3.32.110(B)(3) of the Vernon Municipal Code (VMC), staff recommends the City Council deem the proposed contract for high voltage electric system service, maintenance, and utility support is commercially unreasonable to rebid every three years due to significant risks to the electric system reliability and responsiveness, as well as added costs to the City and contractor including a steep learning curve in potential frequent transitions in contracted services. The time and effort it takes VPU to work through the process to select a contractor and the commitment of a contractor to provide these services to Vernon are comprised of significant investments in time, personnel, equipment, safety culture, and dedication. The learning curve involved in becoming familiar with the VPU electric system and the risk to customer productivity, system reliability, and prompt response to disturbances involved in a potential transition to a new contractor every three years would be extremely costly.

The proposed contract does not have a fixed financial threshold due to the nature of the work performed. Each fiscal year VPU determines the maintenance, construction, and capital improvement projects that will be completed based on an overall evaluation of the infrastructure as well as projected revenues and expenditures for each fiscal year. The Electric Enterprise revenues and expenditures are affected by market forces, commodity pricing, and volatility each fiscal year. It is unreasonable and impractical to identify a specific amount for the life of the proposed contract based on changing needs and priorities as well as inflation over the course of the initial contract plus potential extension. VPU has learned that forces outside of our control, such as the COVID-19 pandemic, domestic political strife, global supply chain issues, and the prospect of overseas conflict, can significantly impact the cost of supplies and equipment associated with this type of work. VPU also believes that some flexibility is advantageous to help achieve changing priorities and goals such as improved community aesthetics, customer needs, an evolving business and residential landscape, and accelerating State climate goals. The compensation under this proposed contract does not exceed the City Council annually approved and appropriated aggregate amount of the VPU Electric System generation, transmission, distribution, and fiber optic accounts. All work performed by the proposed contractor is pre-scheduled, pre-approved, and closely tracked through a detailed approval and work order system.

The current agreement with Petrelli will expire on July 17, 2022. To avoid a detrimental lapse in service, the new Labor and Materials Contract with Petrelli will begin July 18, 2022. The proposed Labor and Materials Contract has been reviewed and approved as to form by the City Attorney’s Office.

Fiscal Impact:

The proposed Contractor shall not incur costs and expenses exceeding the aggregate amount of the annual Vernon Public Utilities’ Electric System and Fiber Optic Systems budgets approved by the Vernon City Council each fiscal year through the budget process.

Attachments:

1. Petrelli Electric Inc. - Labor and Materials Contract

LABOR AND MATERIALS CONTRACT BETWEEN THE CITY OF VERNON AND PETRELLI ELECTRIC, INC. FOR HIGH VOLTAGE ELECTRIC SYSTEM SERVICE, MAINTENANCE AND

UTILITY SUPPORT

COVER PAGE
Contractor: Petrelli Electric, Inc.

Responsible Principal of Contractor: Cindy Petrelli, President Notice Information - Contractor: Petrelli Electric, Inc. 11615 Davenport Road
Agua Dulce, CA 91390
Attention: Cindy Petrelli, President
Phone: (661) 268-7312
Notice Information - City: City of Vernon
4305 Santa Fe Avenue
Vernon, CA 90058
Attention: Abraham Alemu,
General Manager of Vernon Public Utilities
Telephone: (323) 583-8811 ext. 250
Commencement Date: July 18, 2022
Termination Date: July 17, 2027, with an option to extend an additional five (5) years after the expiration
of the initial term with City Council approval.

Consideration: Notwithstanding anything to the contrary set forth herein, in any year of the Term, the
Contractor shall not incur, costs and
expenses exceeding the aggregate amount
of the annual Vernon Public Utilities overall
electric system and fiber optic system
budgets approved by the Vernon City
Council.

Records Retention Period Three (3) years, pursuant to Section 7.17

LABOR AND MATERIALS CONTRACT BETWEEN THE CITY OF VERNON AND PETRELLI ELECTRIC, INC. FOR HIGH VOLTAGE ELECTRIC SYSTEM SERVICE, MAINTENANCE AND

UTILITY SUPPORT
This Contract is made between the City of Vernon (City), a California charter City and California municipal corporation, and Petrelli Electric, Inc., a California corporation, with headquarters located at 11615 Davenport Road, Agua Dulce, CA 91390 (Contractor).

The City and Contractor agree as follows:

1.0 DEFINITIONS

1.1 Capitalized terms not otherwise defined in this Contract shall have the meanings set forth in this Section 1.1.

DELIVERABLES. Written materials created, written, or developed for the City and delivered to the City in connection with the Services.

ELECTRIC SYSTEM. All electric generation, transmission, and distribution facilities and other electrical infrastructure now owned or hereafter owned by the City that is used for providing electric service in the City, including the 66 kV transmission system, overhead and underground distribution systems, substations, street lighting systems, transformers and service lines.

EMERGENCY. A situation in which a Party reasonably believes immediate action is necessary to prevent regulatory non-compliance, bodily injury, loss of life, interruption in the generation, transmission, or distribution of electricity, or damage to the environment or to property, including the Electric System.

EMERGENCY WORK. The Services required to (i) respond to Emergency calls as set forth in Section 5.2.3.3 and (ii) prevent or mitigate as much as practicable any threatened damage, injury or loss caused by an Emergency affecting the safety or protection of Persons or endangering any property, including the Electric System.

ENVIRONMENTAL LAW. All Laws relating to (i) land use and environmental matters, (ii) the control of any pollutant, or protection of the air, water, or land, (iii) solid, gaseous or liquid waste generation, handling, treatment, storage, disposal or transportation, (iv) exposure to hazardous, toxic or other harmful substances, and (v) the protection and enhancement of the environment.

FERC. The Federal Energy Regulatory Commission, and any successor to the function thereof.

GOOD UTILITY PRACTICES. Any of the practices, methods, standards, and acts engaged in or approved by a significant portion of the electric utility industry during the relevant time period, or any of the practices, methods and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety and expedition. Good Utility Practices is not intended to be any one of a number of the optimum practices, methods, standards or acts to the exclusion of

all others, but rather to be acceptable practices, methods or acts generally accepted in the region.

GOVERNMENTAL APPROVAL. Any authorization, consent, approval, license, ruling, permit, tariff, certification, exemption, filing, variance, order, judgment, decree, declaration or publication of, notices to, or registration by or with any Governmental Authority having jurisdiction over the Electric System.

GOVERNMENTAL AUTHORITY. Any national, state or local government, any political subdivision thereof or any other governmental, judicial, public, or statutory instrumentality, authority, body, agency, bureau or entity or any arbitrator with authority to bind a Party at Law.

LAW. (i) any statute, law, rule, regulation, code, ordinance, judgment, decree, writ, order, concession, grant, franchise, license, agreement, directive, guideline, policy, requirement, mandatory standards or criteria, or other governmental restriction or any similar form of decision of or determination by, or any binding interpretation or administration of any of the foregoing by, any Governmental Authority, whether now or hereafter in effect or (ii) any requirements or conditions on or with respect to the issuance, maintenance or renewal of any Governmental Approval or applications therefor, whether now or hereafter in effect.

NERC. The North American Electricity Reliability Corporation or its successor thereto.

OFF-HOURS. Hours between 3:30 pm and 7:00 am on any Business Day and the hours between 00:00, PPT and 23:00, PPT, on any day other than a Business Day.

PERMITS. Any permits, approvals and authorizations issued by any Governmental Authority to, or obtained by, the City, which are necessary to operate and maintain the Electric System.

ROUTINE WORK. Routine maintenance work, including line patrol, switching, replacement of minor components, minor modifications and additions, and other routine work normally required on electric utility systems, consistent with Good Utility Practices.

WORK ORDER. A Work Order for Routine Work that has been pre-approved and established by Contractor and the City and authorizes Contractor to perform Routine Work thereunder.

2.0 Contractor shall furnish all necessary and incidental labor, material, equipment, transportation and services as described in, and strictly in accordance with, and subject to all terms and conditions set forth in Specifications for High Voltage Electric System Service, Maintenance and Utility Support, as more fully set forth in the City’s Request for Proposals issued on or about December 16, 2021, and titled High Voltage Electric System Service, Maintenance and Utility Support, and Contractor’s proposal to the City dated February 14, 2022, attached hereto and incorporated herein by reference as Exhibit “A”.

3.0 All work shall be done in a manner satisfactory to the City’s General Manager of Vernon Public Utilities (General Manager), or the Director’s designee, in writing, and shall be of highest quality with respect to the contract specifications.

In the event Contractor fails to perform satisfactorily the City shall advise Contractor in writing, and Contractor shall have thirty (30) days to cure such failure to satisfactorily perform. If Contractor fails to so cure its performance within said 30 days, the City may, at its option, terminate this Contract for default without further liability, other than payment to Contractor for work performed satisfactorily prior to the date of termination.

4.0 Contractor shall commence work upon the execution of this contract and shall perform work requested in writing by the General Manager.

5.0 In consideration of satisfactory and timely Performance of requested work pursuant to the Scope and Work set forth in Exhibit “B,” which is attached hereto and incorporated herein by reference, the City shall pay Contractor as follows:

The bid amounts, according to the requested and accepted price set forth in the Contractor’s Fees for Services, attached hereto and incorporated herein by reference as Exhibit “C”.

Notwithstanding anything to the contrary set forth herein, in any year of the Term, the Contractor shall not incur, and the City shall not be liable for, costs and expenses exceeding the aggregate amount of the annual Vernon Public Utilities overall electric system and fiber optic systems budgets approved by the Vernon City Council.

5.1 ENGAGEMENT; WORK ORDERS

5.1.1 General. Subject to the terms and conditions of this Contract, the City hereby engages Contractor, and Contractor hereby accepts such engagement to perform the Services pursuant to the terms of this Contract, as an independent contractor and not as an agent or employee of the City during the Term.

5.1.2 Work Orders. All of the Services shall be performed pursuant to a work order (Work Order), issued by the City from time to time in accordance with the requirements of this Contract. The Work Order shall include, as applicable, the requirements set forth on Exhibit A (Work Order Requirements). Nothing in this Contract shall obligate the City to issue a Work Order. Prior to initiating any Services, other than Emergency Work or Routine Work, Contractor shall obtain written authorization from the City pursuant to a Work Order for the proposed Services. Work Orders shall be issued for the following categories:

5.1.2.1 Major Work. Any major modifications, extensions, additions or improvements to the Electric System, including work that requires structural replacement, such as poles, switches and transformers, and large maintenance jobs estimated to take more than one crew day, (Major Work) shall be performed pursuant to a Work Order for Major Work. As-built documentation identified all Major Work performed and any other deliverables specified in the Work Order shall be provided to the City promptly following completion of the Major Work.

5.1.2.2 Emergency Work. Contractor shall mobilize and
commence Emergency Work in response to emergency calls within one hour of receipt of any call for Emergency Work pursuant to Section 5.2.3.3 and shall seek a written Work Order for such Emergency Work by 9:00 a.m. PPT on the next business day after the Emergency Work is initiated. All other Emergency Work shall be performed by Contractor as soon as possible

following an Emergency. Contractor shall telephonically notify the City of any Emergency discovered by Contractor as soon as practicable following the occurrence thereof and shall seek a written Work Order for such Emergency Work by 9:00 a.m. PPT on the next business day after the Emergency Work is initiated. As-built information shall be provided upon completion of such Emergency Work. Contractor shall not be entitled to payment for performance of Emergency Work, unless such Emergency Work is approved pursuant to a written Work Order obtained as provided above.

5.1.2.3 Routine Work. Routine Work shall include maintenance work, including line patrol, switching, replacement of minor components, minor modifications and additions, and other routine work normally required on electric utility systems, consistent with Good Utility Practices (Routine Work). Routine Work will be completed under Standing Work Orders specifically established for such Routine Work. Contractor and Vendor will collaborate on establishing a process for issuing Standing Work Orders.

5.1.3 Scheduling of Work. A Work Order may be issued by the City or requested by Contractor. If requested by Contractor, Contractor shall provide the City’s representative with a proposed plan for the performance of Services under a proposed Work Order by no later than 9:00 am PPT on Monday of each week. Each proposed Work Order shall contain the Work Order Requirements. The City’s Representative shall review such proposed Work Order and approve or make modifications to such proposed Work Order by no later than 2:00 pm on the day such proposed Work Order is provided. Once the Work Order is approved and/or modified by the City’s representative, Contractor shall be authorized to perform the Services pursuant to and as set forth in the approved Work Order. The timing for submittal of Work Orders and the City’s approval or modification of such Work Orders may be changed by mutual agreement of the Parties.

5.2 DUTIES AND RESPONSIBILITIES

5.2.1 Independent Contractor and Standard of Care.

5.2.1.1 Independent Contractor. Contractor shall perform and execute the provisions of the Contract as an independent contractor to the City and shall not in any respect be deemed or act, or hold itself out, as an agent of the City for any purpose or reason whatsoever. Contractor is an independent contractor, and all of its agents and employees shall be subject solely to the control, supervision, and authority of Contractor. The City and Contractor disclaim any intention to create a partnership or joint venture. Contractor shall not be entitled to act for or have any power or authority to assume any obligation or responsibility on behalf of the City.

5.2.1.2 Compliance Obligations. Contractor shall perform its obligations hereunder in accordance with and in compliance with the following: (a) the City’s construction and operation standards and codes, EOP and GOP, General Orders 95, 128, and 165, National Electric Safety Codes, ordinances, rules, regulations, and operating procedures; (b) the requirements under the insurance policies maintained under this Contract; (c) Good Utility Practices; and (d) all applicable Laws, including Laws promulgated and enforced by NERC and FERC, Governmental Approvals and Permits. Contractor shall use all commercially reasonable efforts, consistent with Good Utility Practices to perform its obligations hereunder in a manner so as to (i) minimize expenses and liabilities of the Electric System; (ii) optimize the useful life of the Electric System; and (iii) minimize downtime and disruption of the Electric System.

5.2.2 Services. Contractor shall provide all services and maintenance to keep the Electric System in a safe and reliable condition, in strict accordance with the terms of this Contract and pursuant to Work Orders issued to Contractor from time to time. Services to include construction and maintenance of the City’s fiber optic cables and network, on an asneeded basis. Such Services shall include, but not be limited to, the following.

5.2.2.1 Work to Electric System. At the direction of the City, and pursuant to a Work Order, all modifications, extensions, additions and improvements in and to the Electric System, as shall from time to time be required or necessary for the Electric System to serve, in a safe and reliable manner, the electric power requirements of the City and its customers, both present and future. Such work shall include: (a) installation of transformers, switches, cutouts, lines and facilities on the 66 kV transmission system and distribution systems as required for repairs, replacements, new customers and system expansion; (b) removal of underground and overhead facilities no longer needed; (c) performance of other work on underground and overhead systems; and (d) Emergency Work.

5.2.2.2 Troubleshooting. At the direction of the City pursuant to a Work Order, carry out troubleshooting activities, including responding to customer calls and complaints, traveling to various sites within the City of Vernon, assessing and estimating failures or damages, safely restoring service as quickly as possible, and reporting on system and equipment status.

5.2.2.3 Maintenance. Contractor shall provide the City with monthly maintenance and inspection schedules identifying the location and circuit name of the equipment inspected. Contractor shall maintain and inspect the Electric System pursuant to the requirements of General Order Nos. 95, 128 and 165. The maintenance and inspection schedule shall include the following: (a) insulator washing (transmission, distribution and substations); (b) street lighting inspection; (c) customer substation inspection; (d) manhole and underground cable inspection; (e) pole inspection and testing; (f) distribution circuit inspection; and (g) transmission system inspection. Contractor shall maintain a system database to track and report inspection results and corresponding repairs/correction. All documented work performed shall meet or exceed the requirements of General Order 165. Contractor must submit reports of all inspections to the City within thirty (30) days of the completion of such inspection.

5.2.2.4 New Facilities. If a new facility is to be constructed by the City, Contractor shall be allowed an opportunity to submit a bid or proposal to construct such facility. the City reserves the right to permit the electric customer requiring such new facility to construct such facility and to negotiate an agreement for the construction of such facility with potential contractors, including Contractor. The City shall not be obligated to use Contractor for the construction of such new facility.

5.2.3 Personnel.

5.2.3.1 Personnel. Contractor shall furnish all labor, personnel and supervision required for the performance of the Services in a safe, productive and efficient manner during the Term, including office and field staff; Contractor shall staff and maintain a construction and operations headquarters within the city limits of the City of Vernon, as shall be required or necessary to meet the needs and requirements of the City and its customers, both present and future. Contractor shall ensure its employees are qualified (and if required,

licensed, certified or registered) and experienced in the functions to which they are assigned. If requested, Contractor shall provide to the City (i) evidence of the competence of such personnel including details of their previous experience and qualifications and (ii) details of the working hours, salary levels and all other matters relating to the employment of Contractor’s employees.

All individuals engaged by Contractor in the performance of the Services shall be the employees of Contractor or its subcontractors, and their working hours, rates of compensation and all other matters relating to their employment shall be determined solely by Contractor or the applicable subcontractors. Contractor shall, at all times during the Term, have full supervision and control over Contractor’s employees and shall at all times maintain appropriate order and discipline among its personnel and shall cause each subcontractor to maintain similar standards with respect to such subcontractor’s employees. Upon the City’s request, Contractor shall provide the City with the qualifications of any or all management personnel employed in connection with the Services.

5.2.3.2 Staffing Levels. Without limiting the foregoing, Contractor shall provide the minimum level of employee staffing set forth in Exhibit C. Such shall be preapproved by Contractor and shall be dedicated to perform Services on the Electric System.

Contractor may supplement this level of staffing with the pre-approval of City’s Representative, to the extent necessary to perform the Services. Contractor shall not increase or decrease this level of staffing by adding or deleting full-time employees without the prior written approval of the City. In the event the City wishes to increase or decrease the staffing level provided for herein, the City shall be permitted to do so upon providing thirty (30) days written notice to Contractor. Contractor may also supplement this level of staffing through the use of subcontractors, if pre-approved by the City, to the extent necessary to perform such Services; provided such subcontractors and subcontracts are approved in advance in writing by the City and meet the requirement. Contractor may bill the City as a straight pass through with no mark up its costs for such prior approved subcontractors and subcontracts.

5.2.3.3 Off-Hour Staffing/Emergencies. Contractor shall keep a minimum of one full crew on standby to respond to Emergency calls, troubleshooting calls, and service calls during Off-Hours. Contractor shall provide a weekly list of the dedicated staff that will be available to respond to such calls. Personnel on standby must respond to the City within one hour of call out from Station A. Contractor shall bill two hours per day “Straight Time” per employee on standby schedule. Contractor shall send a copy of standby call out sheet no later than 08:00 A.M. PPT of each Monday.

5.2.3.4 Training. Contractor shall send all employees that shall be performing Services on the Electric System to J.A.T.C training. Contractor shall be compensated for such training expenses. If any such trained employee leaves Contractor before three years after completing the Journeyman status, Contractor shall reimburse the City the total cost of such J.A.T.C. training incurred for such employee.

5.2.3.4 Subcontractors. Any subcontracting of the Services pursuant to Section 5.2.3.2 shall not relieve Contractor of any of its duties, liabilities or obligations hereunder, relieve Contractor of its responsibility for the performance of Services rendered by any subcontractor, or create any relationship between the City and any subcontractor.

Contractor shall be solely responsible for the payment of any subcontractor and shall be responsible for the acts, omissions and errors and defaults of its subcontractors. Each subcontract shall be in writing and shall contain provisions giving Contractor an unrestricted right to assign the subcontract and all benefits, interest, rights and causes of action arising

under it to the City. At the request of the City, Contractor shall provide the City with copies of all warranties of each subcontractor relating to any of the Services, and Contractor shall comply with any request by the City upon the termination of this Contract to assign the benefit of any subcontractor warranty to the City.

5.3 CITY’S DUTIES AND RESPONSIBILITIES

5.3.1 Use of City Owned Property. The City shall provide Contractor with access to a city-owned building and a storage yard on city-owned property to utilize in connection with the performance of its Services, including for the warehousing of supplies, materials and vehicles. The City shall be responsible for maintenance and upkeep of such facilities, including for the procurement and payment of all utilities.

5.3.2 Materials and Supplies. All materials, supplies, tools, equipment, hardware, uniforms, and personal protective equipment required for the performance of the Services (“Materials and Supplies”), shall be procured by Contractor as follows. Contractor shall first determine whether the Materials and Supplies are available as inventory items from the City. If such Materials and Supplies are available, Contractor shall issue a requisition order in the City’s accounting and reporting EDEN software system. Contractor shall be reimbursed for the costs of such Materials and Supplies as follows: (a) if Contractor is reimbursed by the City within twelve (12) business days of the issuance of the requisition order in the EDEN system, Contractor shall be reimbursed for the direct costs of such Materials and Supplies without additional overhead or mark-up; (b) if Contractor is not reimbursed for such costs within such twelve (12) business day period, Contractor shall be reimbursed the direct costs of such Materials and Supplies, plus a mark-up of ten percent (10%). All Materials and Supplies procured by Contractor shall remain part of inventory of the City and shall be logged into the City’s Eden inventory database and shall be available for purchase. Upon termination of this Contract, Contractor shall return all Materials and Supplies to the City.

5.3.3 Vehicles. The City may provide Contractor with city-owned vehicles for Contractor’s use in connection with performing the Services. If the City does not provide vehicles for Contractor’s use, Contractor shall provide all vehicles required for the performance of the Services and shall bill the City for the use of such vehicles pursuant to the monthly rates agreed upon for such vehicles in the attached Exhibit C. If not provided by the City, all service vehicles reasonably required to fulfill Contractor’s obligations hereunder shall be acquired in an expeditious manner and maintained in accordance with Good Utility Practices. The City shall provide Contractor with all fuel used in such vehicles in connection with Contractor’s performance of the Services.

5.3.4 Authorized Representative. Within thirty (30) days after the Effective Date, the City shall appoint an individual representative (“City’s Representative”) authorized and empowered to act for and on behalf of the City on all matters concerning this Contract and the City’s obligations hereunder, and shall promptly notify Contractor in writing of the identity of the City’s Representative. Whenever this Contract requires the approval, consent or some other action of the City, Contractor may rely on the approval of or consent of, or other action taken by the City’s Representative. Notwithstanding the foregoing, the City’s Representative shall not have the authority to amend any of the provisions of this Contract.

5.4 COMPENSATION

5.4.1 Cost Reimbursement. It is the desire of the City to retain contractors having highly qualified the City shall reimburse Contractor for: (a) Contractor personnel time performing the Services at the rates ranges set forth on Exhibit C allocable to the Contractor personnel who perform Services under this Contract; (b) Materials and Supplies in accordance with Section 5.3.2; (c) the reasonable, direct and documented costs and expenses for rental of equipment not provided by the City at the rates set forth in Exhibit C and; (d) the reasonable, direct and documented costs incurred by Contractor solely and directly related to the performance of the Services. The rates set forth in Exhibit C may only be increased during the Term to the extent Contractor’s costs increase under the “California Outside Line Construction Contract between Western Line Constructors Chapter of N.E.C.A. and Local Union No. 47 AFLCIO International Brotherhood of Electric Workers.” Contractor shall provide the City with evidence to the satisfaction of the City of any such rate changes thirty (30) days prior to the date such rate change becomes effective. All rate changes must be approved by the City Council prior to becoming effective under this Contract. All reimbursable expenses shall, require written receipts, invoices and/or timesheets in detail reasonably acceptable to the City.

Notwithstanding the foregoing, the following costs and expenses shall not be reimbursable and Contractor will not be entitled to recovery with respect to any of the following: Costs incurred, including time spent by Contractor personnel, not directly supporting the work to be provided hereunder (e.g., administering corporate policies, preparation of corporate training materials, internal financial reporting, financial controls, etc.); a. Costs to obtain and/or maintain licenses, certification and other permissions of Governmental Authorities to generally conduct business in California or the City of Vernon or elsewhere; b. Cost of compliance (including attorneys’ fees) with any of Contractor’s indemnification obligations as set forth in this Contract; c. Dispute resolution expenses related to disputes under this Contract; d. Cost of attorney time incurred in relation to amending, negotiating or interpreting this Agreement or resolution of disputes under this Contract;
e. Bonus, incentive compensation, gratuities (except as incurred as a component of proper business travel or relocation expense), or corporate entertainment expense;
f. Costs or payments incurred or owing by Contractor as a result of or in connection with any mistake, action, inaction or omission constituting gross negligence, fraud or willful or wanton misconduct by Contractor, its personnel, its agents or any Contractor personnel as the case may be;
g. Taxes assessed against Contractor for income tax, corporate tax, profit, franchise, business, personal property and other taxes assessed by a Governmental Authority for or on account of any

income or profits accruing to or earned by Contractor in connection with the performance of the services hereunder or any of its operations, or any taxes arising from the employment or independent contractor relationship between Contractor and its personnel; or h. Fines or penalties imposed on Contractor or its subcontractors in connection with the performance of the services hereunder.

5.5.1 Payment of Costs and Expenses. On or before the first Business Day (Monday through Thursday only) of each calendar month, Contractor shall submit a “Maintenance and Administration Bill”, which bill shall contain current inventory accounting reports and Work Order reports, with sufficient supporting data covering activities engaged in and Services performed by Contractor. All accounting shall comply with FERC accounting principles and City’s accounting system. Contractor in consultation with the City shall develop a mutually agreeable form to be used for monthly accounting and reports.

6.0 GENERAL TERMS AND CONDITIONS

6.1 INDEPENDENT CONTRACTOR.

6.1.1 It is understood that in the performance of the services herein provided for, Contractor shall be, and is, an independent contractor, and is not an agent or employee of City and shall furnish such services in its own manner and method except as required by this Contract. Further, Contractor has and shall retain the right to exercise full control over the employment, direction, compensation and discharge of all persons employed by Contractor in the performance of the services hereunder. Contractor shall be solely responsible for, and shall indemnify, defend and save City harmless from all matters relating to the payment of its employees, including compliance with social security, withholding and all other wages, salaries, benefits, taxes, exactions, and regulations of any nature whatsoever.

6.1.2 Contractor acknowledges that Contractor and any subcontractors, agents or employees employed by Contractor shall not, under any circumstances, be considered employees of the City, and that they shall not be entitled to any of the benefits or rights afforded employees of City, including, but not limited to, sick leave, vacation leave, holiday pay, Public Employees Retirement System benefits, or health, life, dental, long-term disability or workers' compensation insurance benefits.

6.2 CONTRACTOR NOT AGENT. Except as the City may authorize in writing, Contractor and its subcontractors, if any, shall have no authority, express or implied, to act on behalf of or bind the City in any capacity whatsoever as agents or otherwise.

6.3 OWNERSHIP OF WORK. All reports, drawings, plans, specifications, computer tapes, floppy disks and printouts, studies, memoranda, computation sheets and other documents prepared by Contractor in furtherance of the work shall be the sole property of City and shall be delivered to City whenever requested. Contractor shall keep such documents and materials on file and available for audit by the City for at least three (3) years after completion or earlier termination of this Contract. Contractor may make duplicate copies of such materials and documents for its own files or for such other purposes as may be authorized in writing by the City.

6.4 CORRECTION OF WORK. Contractor shall promptly correct any defective, inaccurate or incomplete tasks, deliverables, goods, services and other work, without additional cost to the City. The performance or acceptance of services furnished by Contractor shall not relieve the Contractor from the obligation to correct subsequently discovered defects, inaccuracy or incompleteness.

6.5 WAIVER. The City's waiver of any term, condition, breach or default of this Contract shall not be considered to be a waiver of any other term, condition, default or breach, nor of a subsequent breach of the one waived.

6.6 SUCCESSORS. This Contract shall inure to the benefit of, and shall be binding upon, the parties hereto and their respective heirs, successors and/or assigns.

6.7 NO ASSIGNMENT. Contractor shall not assign or transfer this Contract or any rights hereunder without the prior written consent of the City and approval by the City Attorney, which may be withheld in the City's sole discretion. Any unauthorized assignment or transfer shall be null and void and shall constitute a material breach by the Contractor of its obligations under this Contract. No assignment shall release the original parties or otherwise constitute a novation.

6.8 COMPLIANCE WITH LAWS. Contractor shall comply with all Federal, State, County and City laws, ordinances, resolutions, rules and regulations, which are, as amended from time to time, incorporated herein and applicable to the performance hereof.

6.9 ATTORNEY'S FEES. If any action at law or in equity is brought to enforce or interpret the terms of this Contract, the prevailing party shall be entitled to reasonable attorney's fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.

7.0 INTERPRETATION

7.1 APPLICABLE LAW. This Contract, and the rights and duties of the parties hereunder (both procedural and substantive), shall be governed by and construed according to the laws of the State of California, without regards to its conflict of laws rules.

7.2 ENTIRE CONTRACT. This Contract, including any Exhibits attached hereto, constitutes the entire contract and understanding between the parties regarding its subject matter and supersedes all prior or contemporaneous negotiations, representations, understandings, correspondence, documentation and agreements (written or oral).

7.3 WRITTEN AMENDMENT. This Contract may only be changed by written amendment executed by Contractor and the City Administrator or other authorized representative of the City, subject to any requisite authorization by the City Council. Any oral representations or modifications concerning this Contract shall be of no force or effect.

7.4 SEVERABILITY. If any provision in this Contract is held by any court of competent jurisdiction to be invalid, illegal, void, or unenforceable, such portion shall be deemed severed from this Contract, and the remaining provisions shall nevertheless continue in full force

and effect as fully as though such invalid, illegal, or unenforceable portion had never been part of this Contract.

7.5 ORDER OF PRECEDENCE. In case of conflict between the terms of this Contract and the terms contained in any document attached as an Exhibit or otherwise incorporated by reference, the terms of this Contract shall strictly prevail. The terms of the City's Specifications shall control over the Contractor's bid.

7.6 CHOICE OF FORUM. The parties hereby agree that this Contract is to be enforced in accordance with the laws of the State of California, is entered into in the City of Vernon and that all claims or controversies arising out of or related to performance under this Contract shall be submitted to and resolved in a forum within the County of Los Angeles at a place to be determined by the rules of the forum.

7.7 TIME OF ESSENCE. Time is strictly of the essence of this Contract and each and every covenant, term and provision hereof.

7.8 AUTHORITY OF CONTRACTOR. The Contractor hereby represents and warrants to the City that the Contractor has the right, power, legal capacity and authority to enter into and perform its obligations under this Contract, and its execution of this Contract has been duly authorized.

7.9 ARBITRATION OF DISPUTES. Any dispute for under $25,000 arising out of or relating to the negotiation, construction, performance, non-performance, breach or any other aspect of this Contract, shall be settled by binding arbitration in accordance with the Commercial Rules of the American Arbitration Association at Los Angeles, California and judgment upon the award rendered by the Arbitrators may be entered in any court having jurisdiction thereof. This clause shall not preclude the Parties from seeking provisional remedies in aid of arbitration from a court of appropriate jurisdiction. The City does not waive its right to object to the timeliness or sufficiency of any claim filed or required to be filed against the City and reserves the right to conduct full discovery.

7.10 INDEMNITY.

7.10.1 Contractor agrees to indemnify, hold harmless and defend (even if the allegations are false, fraudulent or groundless), to the maximum extent permitted by law, the City, its City Council and each member thereof, and its officers, employees, commission members and representatives, from any and all liability, loss, suits, claims, damages, costs, judgments and expenses (including attorney's fees and costs of litigation) which in whole or in part result from, or arise out of, or are claimed to result from or to arise out of:

A. any activity on or use of City's premises or facilities or any performance under this Contract; or
B. any acts, errors or omissions (including, without limitation, professional negligence) of Contractor, its employees,

representatives, subcontractors, or agents in connection with the performance of this Contract.

7.10.2 This contract to indemnify includes, but is not limited to, personal injury (including death at any time) and property or other damage (including, but without limitation, contract or tort or patent, copyright, trade secret or trademark infringement) sustained by any person or persons (including, but not limited to, companies, or corporations, Contractor and its employees or agents, and members of the general public). The sole negligence and/or active negligence or willful misconduct of City, its employees or agents other than Contractor or Contractor’s subcontractors are excluded from this indemnity contract.

7.11 RELEASE. Contractor agrees to release and covenants not to sue the City, its City Council and each member thereof, and its officers, employees, commission members and representatives for any damage or injury (including death) to itself, its officers, employees, agents and independent contractors damaged or claiming to be damaged from any performance under this Contract.

7.12 INSURANCE. Contractor shall, at its own expense, procure and maintain policies of insurance of the types and in the amounts set forth below, for the duration of the Contract, including any extensions thereto. The policies shall state that they afford primary coverage.

7.12.1 Automobile Liability, including but not limited to, coverage for owned, non-owned and hired automobile with minimum of
$2,000,000 combined single limit covering automobiles used by Contractor in connection with the service and maintenance of the electric system. The policy will be endorsed to name the City, its officers, agents, employees, and volunteers as additional insured, and state that the insurance will be primary and not contribute with any insurance or self-insurance maintained by the City CA 00 01 10 13.
(1) Contractor agrees to subrogate automobile liability resulting from performance under this contract by agreeing to defend, indemnify and hold harmless, the City, and its respective employees, agents, and City Council from and against all claims, liabilities, suits, losses, damages, injuries and expenses, including all costs and reasonable attorney’s fees (“Claims”), which are attributable to any act or omission by the City under the performance of the services.

7.12.2 General Liability with limits of not less than $2,000,000 per occurrence and $5,000,000 in aggregate written on an Insurance Services Office (ISO) Comprehensive General Liability
"occurrence" form or its equivalent for coverage on an occurrence basis. All policies shall expressly include coverage for productscompleted operations hazards with limits of at least $5,000,000

per aggregate limit. Premises/Operations and Personal Injury coverage is required. The City of Vernon, its directors, commissioners, officers, employees, agents and volunteers must be endorsed on the policy as additional insureds as respects liability arising out of the Contractor's performance of this Contract. The insurance will be primary and not contribute with any insurance or self-insurance maintained by the City and shall be at least as broad as CG 20 01 04 13.

A. If Contractor employs other contractors as part of the services rendered, Contractor's Protective Coverage is required.

Contractor may include all subcontractors as insureds under its own policy or shall furnish separate insurance for each subcontractor, meeting the requirements set forth herein.

B. Blanket Contractual Coverage.

C. Products/Completed Operations coverage.

D. Contractor agrees to subrogate General Liability resulting from performance under this contract by agreeing to defend,
indemnify and hold harmless, the City, and its respective employees, agents, and City Council from and against all claims, liabilities, suits, losses, damages, injuries and expenses, including all costs and reasonable attorney’s fees (“Claims”), which are attributable to any act or omission by the City under the performance of the services.

7.12.3 Errors and Omissions coverage with limits of at least $5,000,000 combined single limits, where such risk is applicable. Applicable aggregates must be identified and claims history provided to determine amounts remaining under the aggregate. Contractor shall maintain such coverage for at least one (1) year after the termination of this Contract.

7.12.4 Contractor shall comply with the applicable sections of the California Labor Code concerning workers' compensation for injuries on the job. Compliance is accomplished in one of the following manners:

A. Provide copy of permissive self-insurance certificate approved by the State of California; or
B. Secure and maintain in force a policy of workers'
compensation insurance with statutory limits and Employer's Liability Insurance with a minimal limit of $1,000,000 per accident. The policy shall be endorsed to waive all rights of subrogation against City, its directors, commissioners, officers, employees, and volunteers for losses arising from
performance of this Contract; or

C. Provide a "waiver" form certifying that no employees subject to the Labor Code's Workers' Compensation provision will be used in performance of this Contract.

7.12.5 Excess Coverage – Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and non-contributory basis for the benefit of the City before the City’s own insurance or selfinsurance shall be called upon to project it as a named insured.

Any umbrella liability policy or excess liability policy will in “following form” and will contain a provision to the effect that, if the underlying aggregate is exhausted, the excess coverage will drop down as primary insurance.

Limits of insurance required in this Contract may be satisfied by a combination of primary and umbrella or excess insurance.

7.12.6 Each insurance policy included in this clause shall be endorsed to state that coverage shall not be cancelled except after thirty (30) days' prior written notice to City.

7.12.7 Insurance shall be placed with insurers with a Best's rating of no less than AVIII.

7.12.8 Prior to commencement of performance, Contractor shall furnish City with a certificate of insurance for each policy. Each certificate is to be executed by a person authorized by that insurer to bind coverage on its behalf. The certificate(s) must be in a form approved by City. City may require complete, certified copies of any or all policies at any time.

7.12.9 Failure to maintain required insurance at all times shall constitute a default and material breach. In such event, Contractor shall immediately notify City and cease all performance under this Contract until further directed by the City. In the absence of satisfactory insurance coverage, City may, at its option: (a) procure insurance with collection rights for premiums, attorney's fees and costs against Contractor by way of set-off or recoupment from sums due Contractor, at City's option; (b) immediately terminate this Contract; or (c) self insure the risk, with all damages and costs incurred, by judgment, settlement or otherwise, including attorney's fees and costs, being collectible from Contractor, by way of set-off or recoupment from any sums due Contractor.

7.13 NOTICES. Any notice or demand to be given by one party to the other shall be given in writing and by personal delivery or prepaid first-class, registered or certified mail, addressed as follows. Notice simply to the City of Vernon or any other City department is not adequate notice.

If to the City: City of Vernon
Attn: Abraham Alemu, General Manager of Vernon Public Utilities 4305 Santa Fe Avenue
Vernon, CA 90058
With a Copy to: Carlos R. Fandino, Jr.

City Administrator
City of Vernon
4305 Santa Fe Avenue
Vernon, CA 90058
If to the Contractor: Petrelli Electric, Inc.

Attn: Cindy Petrelli, President
11615 Davenport Road
Agua Dulce, CA 91390
Any such notice shall be deemed to have been given upon delivery, if personally delivered, or, if mailed, upon receipt or upon expiration of three (3) business days from the date of posting, whichever is earlier. Either party may change the address at which it desires to receive notice upon giving written notice of such request to the other party.

7.14 TERMINATION FOR CONVENIENCE (Without Cause). City may terminate this Contract in whole or in part at any time, for any cause or without cause, upon fifteen (15) calendar days' written notice to Contractor. If the Contract is thus terminated by City for reasons other than Contractor's failure to perform its obligations, City shall pay Contractor a prorated amount based on the services satisfactorily completed and accepted prior to the effective date of termination. Such payment shall be Contractor's exclusive remedy for termination without cause.

7.15 DEFAULT. In the event either party materially defaults in its obligations hereunder, the other party may declare a default and terminate this Contract by written notice to the defaulting party. The notice shall specify the basis for the default. The Contract shall terminate unless such default is cured before the effective date of termination stated in such notice, which date shall be no sooner than ten (10) days after the date of the notice.

Termination for cause shall relieve the terminating party of further liability or responsibility under this Contract, including the payment of money, except for payment for services satisfactorily and timely performed prior to the service of the notice of termination, and except for reimbursement of (1) any payments made by the City for service not subsequently performed in a timely and satisfactory manner, and (2) costs incurred by the City in obtaining substitute performance.

7.16 ASSIGNMENT OF ANTITRUST CAUSES OF ACTION. Contractor hereby agrees to assign to the City all rights, title and interest in and to all causes of action it may have under Section 4 of the Clayton Act (15 U.S.C. § 15) or under Chapter 2 of the Cartwright Act (commencing with Section 16700) or part 2 of Division 7 of the California Business and Professions Code, or any similar or successor provisions of Federal or State law, arising from purchases of goods, services or materials pursuant to this Contract or any subcontract. This assignment shall be made and become effective at the time the City tenders final payment to the Contractor, without further acknowledgment by the parties.

7.17 MAINTENANCE OF BOOKS AND RECORDS. Contractor shall maintain service and maintenance records concerning Contractor’s performance of the Services and all other books, records, accounts and bank statements, and such invoices, proofs of payment and other materials as the City may reasonably request as support thereof related to the performance of the Services, which records shall be properly created and maintained in accordance with generally accepted accounting principles (Books and Records). The Books and Records shall include, but not be limited to, the following:
a. Quarterly Report. A quarterly report submitted to the City within fifteen (15) calendar days after the end of each calendar quarter containing sufficient information, detail and documentation as may be requested by the City relating to the Services performed for the preceding calendar quarter. b. Other Reports. Such other reports and/or documentation prepared by Contractor concerning its activities hereunder as may be requested by the City from time to time.

Contractor shall make such Books and Records available for a period of three (3) years following termination or expiration of this Contract upon no less than seventy-two (72) hours’ notice to Contractor, for inspection and audit by the City and/or its designated representative, during normal business hours and at the operations headquarters of Contractor, or other location agreed to by the City and Contractor. Contractor shall cooperate in any audit of such request that the City may undertake. Upon the expiration or termination of this Contract, Contractor shall as soon as practicable, but in no event more than sixty (60) days following the date of such expiration or termination, deliver all of the Books and Records to the City.

8.0 ADDITIONAL ASSURANCES

8.1 EQUAL EMPLOYMENT OPPORTUNITY PRACTICES. Contractor
certifies and represents that, during the performance of this Contract, the Contractor and any other parties with whom it may subcontract shall adhere to equal opportunity employment practices to assure that applicants and employees are treated equally and are not discriminated against because of their race, religion, color, national origin, ancestry, disability, sex, age, medical condition, marital status. Contractor further certifies that it will not maintain any segregated facilities. Contractor further agrees to comply with The Equal Employment Opportunity Practices provisions as set forth in Exhibit “D”.

8.2 VERNON BUSINESS LICENSE. Contractor shall obtain, and pay any and all costs associated therewith, any Vernon Business License which may be required by the Vernon Municipal Code.

8.3 CONFLICT. Contractor hereby represents, warrants and certifies that no member, officer or employee of the Contractor is a director, officer or employee of the City of Vernon, or a member of any of its boards, commissions or committees, except to the extent permitted by law.

8.4 ENFORCEMENT OF WAGE AND HOUR LAWS. Eight hours labor constitutes a legal day's work. The Contractor, or subcontractor, if any, shall forfeit twenty-five dollars ($25) for each worker employed in the execution of this Contract by the respective Contractor or subcontractor for each calendar day during which the worker is required or

permitted to work more than 8 hours in any one calendar day and 40 hours in any one calendar week in violation of the provisions of Sections 1810 through 1815 of the California Labor Code as a penalty paid to the City; provided, however, work performed by employees of contractors in excess of 8 hours per day, and 40 hours during any one week, shall be permitted upon compensation for all hours worked in excess of 8 hours per day at not less than 1½ times the basic rate of pay.

8.5 PREVAILING WAGES. The provisions of California Labor Code 1770, et seq., regarding the payment of prevailing wages on public works, and related regulations, apply to all City contracts. In addition, the selected consultant and/or any subcontractor must be currently registered and qualified (including payment of any required fee) with the State Department of Industrial Relations pursuant to Labor Code section 1725.5. This project is subject to compliance monitoring and enforcement by the State Department of Industrial Relations.
[Signatures Begin on Next Page].

IN WITNESS WHEREOF, the Parties have executed this Contract as of the Commencement Date stated on the cover page.

City of Vernon, a California charter City
and California municipal corporation
By:____________________________
Carlos Fandino, City Administrator
Petrelli Electric, Inc., a California corporation
By:

Name:

Title:

ATTEST:
_______________________________
Lisa Pope, City Clerk
By:

Name:

Title:

APPROVED AS TO FORM:
_______________________________
Zaynah N. Moussa,
Interim City Attorney

EXHIBIT A
CONTRACTOR’S PROPOSAL

Petrelli Electric Inc. • 11615 Davenport Road, Agua Dulce CA 91390 • Direct 661-268-7312 • Fax 661-268-7331 • www.petrellielectric.com

CITY OF VERNON

REQUEST FOR PROPOSAL
(RFP)
FOR

HIGH VOLTAGE ELECTRIC SYSTEM

SERVICE, MAINTENANCE, AND

UTILITY SUPPORT

SUBMITTED BY
PETRELLI ELECTRIC, INC.

Petrelli Electric Inc. • 11615 Davenport Road, Agua Dulce CA 91390 • Direct 661-268-7312 • Fax 661-268-7331 • www.petrellielectric.com Introduction
Petrelli Electric, Inc. began operating in 1983 and has excelled in the electric utility industry since its inception. The mission statement of safety, quality, and service has come to shine time and time again. The company prides itself on an excellent safety record, which is evidenced by its Experience Modification Rate of .62. Its dedicated employees are the primary factor of why Petrelli Electric, Inc. is able to have quality performance through the many years. The employees, along with management’s vision, have created a stable, solid, and dynamic workforce capable of handling and solving problems that arise in a constantly changing utility environment.

The quality of workmanship derives from the best trained International Brotherhood of Electrical Workers (I.B.E.W.) linemen led by foremen who believe in carrying on the Petrelli Electric, Inc. tradition. During its 39 years of serving the electric utility industry, the company’s customers have included the following:
• Burlington Northern Santa Fe Railroad
• City of Vernon Public Utilities
• Southern California Edison
• Los Angeles Department of Water and Power
The company is also certified by the California Public Utilities Supplier Clearinghouse as a Woman Business Enterprise (see attached certificate).

Petrelli Electric Inc. • 11615 Davenport Road, Agua Dulce CA 91390 • Direct 661-268-7312 • Fax 661-268-7331 • www.petrellielectric.com Scope and Work Plan
The scope of work to efficiently run the City of Vernon’s Public Utilities department is vast and complex. Below is a semi-condensed version of its undertaking as currently performed.

1. Provide a stable and competent work force dedicated to running an electric utility department.

2. Provide crews to perform daily tasks, such as switching programs, trouble calls, on-off orders, USA Dig Alert marking, emergency repairs, service work, capital work, as well as engineering services.

3. Provide an on-call crew to respond to emergency call-outs with one hour or less response time seven days a week.

4. Provide company owned line trucks with the latest tools and equipment to perform energized work in a competent and safe manner.

5. Provide City of Vernon Public Utilities with annual inspection reports of the following:
-Annual Pole Inspection Reports, including both Transmission and Distribution. -Annual G.O. 95 Inspections Reports. (including Fiber)
-Annual G.O. 128 Inspections Reports.
-Annual Customer Substation Inspections Reports, including thermal imaging. -Annual Substation Inspections Reports, including thermal imaging. -Annual Underground Vault and Equipment Inspections, including thermal imaging.

Petrelli Electric Inc. • 11615 Davenport Road, Agua Dulce CA 91390 • Direct 661-268-7312 • Fax 661-268-7331 • www.petrellielectric.com -Monthly Street Light Inspections and Repair.
-Implementation of G.O. 165 inspection cycle program.

6. Provide a dedicated crew to manage and maintain the fiber optic system. This crew includes an in-house splicer and completes all repairs, replacements, new customer installations, and assist with system expansion.

7. Provide certified meter technicians to complete new customer installations, upgrades, troubleshooting, repairing, and removing meter facilities.

8. Provide engineers with a vast electrical utility engineering background for competent and practical planning, engineering, including GIS management and coordination.

9. Provide cost efficient and effective engineering for capital improvement infrastructure projects assigned.

10. Provide a detailed and accurate accounting of inventory and actual costs on all aspects of daily operation relating to City of Vernon’s EDEN inventory system, Lucity work order system, fixed assets, reporting, audit support, and bond reimbursement accounting.

Petrelli Electric Inc. • 11615 Davenport Road, Agua Dulce CA 91390 • Direct 661-268-7312 • Fax 661-268-7331 • www.petrellielectric.com Experience
Work Project History
Petrelli Electric, Inc. has the following experience working for its customers:
• Contractor for the City of Vernon Public Utilities Department.  Complete operations and maintenance of the Public Utilities Department on daily basis since 2003.
• Subcontractor for Los Angeles Department of Water and Power.  Overhead and underground crews for distribution and sub-transmission projects since 2013.
• Subcontractor for Southern California Edison.
 Overhead and underground crews for distribution and transmission projects. • Contractor for Burlington Northern Santa Fe Railroad
 Building and maintaining overhead and underground distribution systems since 1986.

Petrelli Electric Inc. • 11615 Davenport Road, Agua Dulce CA 91390 • Direct 661-268-7312 • Fax 661-268-7331 • www.petrellielectric.com Experience
Key Staff
• General Manager: Sal Petrelli
• Account Manager: Christopher Plueger
• General Foremen: William Murray & Ryan Ordelheide
• P.E. Engineer/Service Planner: Ryan Hendrickson
 Sal Petrelli
o Has 39 years industry experience.
o I.B.E.W. Local 47 Journeyman Lineman.
o Currently manages the City of Vernon Public Utilities contract. o Graduate of Loyola Marymount University in 1983 with Bachelor of Arts Degree.  Christopher Plueger
o Certified Public Accountant.
o Currently manages City of Vernon Public Utilities EDEN inventory system, Lucity work order system, fixed assets, reporting, audit support, and bond reimbursement accounting.
o Graduate of California Lutheran University in 2006 Magna Cum Laude with Bachelor of Science Degree in Accounting.

Petrelli Electric Inc. • 11615 Davenport Road, Agua Dulce CA 91390 • Direct 661-268-7312 • Fax 661-268-7331 • www.petrellielectric.com  William Murray
o Has 33 years industry experience.
o I.B.E.W. Local 47 Journeyman Lineman.
o National Cable Splicer Certification.
o Currently oversees line crews for the City of Vernon Public Utilities contract.  Ryan Ordelheide
o Line crew foreman.
o I.B.E.W. Local 47 Journeyman Lineman.
o Has 10 years industry experience.
o Graduate of University of La Verne in 2008 with Bachelor of Arts Degree in Business Administration.
o Graduate of University of La Verne in 2011 with Masters Degree in Business Administration and Leadership.
o National Cable Splicer Certification.
o Currently oversees line crews for City of Vernon Public Utilities contract.  Ryan Hendrickson
o Has 10 years industry experience.
o California licensed Professional Engineer.
o Graduate of San Francisco State University in 2009.
o Currently oversees service planning and engineering for Petrelli Electric, Inc for the City of Vernon Public Utilities contract.

Petrelli Electric Inc. • 11615 Davenport Road, Agua Dulce CA 91390 • Direct 661-268-7312 • Fax 661-268-7331 • www.petrellielectric.com Additional Information
Petrelli Electric, Inc. currently operates the operations and maintenance contract for City of Vernon’s Public Utilities Department. The company has continually met and exceeded challenges and obstacles that utilities face each day. Its customer service record is also exemplary and unmatched. Additionally, the company owns equipment and tools that are well maintained and that few other contractors can equal.

The continual training the company has provided to its work force has produced results that have benefitted Petrelli Electric, Inc.’s customers. The company’s partnerships with the I.B.E.W. and J.A.T.C. have produced some of the best qualified and hardest working linemen in the industry.

This equates to a trusted and caliber of work force that is unsurpassed. Both management and its employees share a commitment for total customer satisfaction.

Petrelli Electric, Inc. believes that its performance throughout its tenure, along with the track record of efficiency and cost savings, hard work, dedication, and loyalty add a dimension that no other contractor can provide.

Exhibit C
Contractor Fees for Services
A. Hourly Labor Rate Per Classification
Classification Quantity Straight Time Double Time
General Manager 1
Account Manager 1
General Foreman 1
Service Planner 1
Line Foreman 2
Lineman 12
Groundman 4
Troubleman 2
Substation Electricians _ 2
Clerk Secretary _ 3
Warehouse _ 1
Warehouse Pre Fabrication _ 1
Mechanic _ 1
Maintenance Worker _ 1
$140.00 $204.00
$118.40 $185.00
$138.90 $202.00
$112.40 $182.00
$124.60 $196.00
$115.80 $184.60
$88.50 $128.90
$115.80 $184.60
$115.80 $184.60
$58.40 $82.90
$88.50 $128.90
$88.50 $128.90
$88.50 $128.90
$88.50 $128.90
B. Monthly Equipment Rates
Vehicle Quantity Monthly Rate
Service Truck ___5__ ___________
Standard Bucket Truck (min 65ft) ___3__ ___________
Digger Derrick (min 60ft) ___2__ ___________
35 Ton Crane ___1__ ___________
Single Man Bucket Truck ___2__ ___________
__________________ ______ ___________
__________________ ______ ___________
__________________ ______ ___________
__________________ ______ ___________
__________________ ______ ___________
__________________ ______ ___________
__________________ ______ ___________
__________________ ______ ___________
__________________ ______ ___________
Equipment Quantity Hourly Rate
Light Tower ___2__ ___________
Sherman Reilly PT3366 Puller ___1__ ___________
Arrow Board ___2__ ___________
Sherman Reilly Duct Dawg
Underground Puller ___1__ ___________
300 KW Generator ___1__ ___________
Bull Wheel Tensioner ___1__ ___________
8 Ton Forklift ___1__ ___________
$1,680.00
$5,120.00
$5,280.00
$6,400.00
$3,200.00
$14.00
$54.90
$12.00
$34.90
$60.50
$32.90
$28.00
each
each
each
each
each
each
__________________ ______ ___________
__________________ ______ ___________
__________________ ______ ___________
__________________ ______ ___________
__________________ ______ ___________
Fuel:

The above monthly rates are based upon the fuel being provided by the City of Vernon.

Tools:

Tools and safety equipment to be included in the equipment monthly rate.

EXHIBIT B

SCOPE AND WORK PLAN
1 Exhibit B
Scope of Work

1. Provide all necessary services as requested by the City and maintain Vernon’s Electric and Fiber Optic System in a safe and reliable condition. Such work shall include, but not be limited to, high voltage switching, performing routine and emergency repairs, and maintenance and construction on Vernon’s Electric and Fiber Optic Systems.

2. Contractor shall respond to emergency calls, troubleshooting calls, or service calls after work hours within one hour after the call is placed by Vernon’s Control Center. Contractor shall provide a weekly list of the dedicated staff that will be available to respond to such calls.

3. At the direction of Vernon Public Utilities (VPU), make all modifications, extensions, additions, and improvements in and to Vernon’s Electric and Fiber Optic Systems, as shall from time to time be required or necessary to serve in a safe and reliable manner, the electric power and fiber optic requirements of Vernon and its customers, both present and future.

4. Furnish all labor, supervision, equipment, tools of whatever kind or nature as necessary to facilitate a safe, productive, and efficient work force as deemed appropriate to maintain the City’s power distribution/ transmission and fiber optic system during the terms of the actual contract.

5. VPU shall provide use of a city-owned building(s), structure(s) and/or a storage yard on city-owned property for use by Contractor in connection with the services performed under the agreement. Contractor shall be responsible for all tenant-type improvements and security in connection with the use of such City-owned property.

6. Contractor will provide all vehicles, tools, and equipment necessary to perform the work.

7. VPU shall normally supply all material and supplies required for major and routine work by Contractor pursuant to the agreement. Contractor shall supply all materials and supplies required by Contractor that are not provided. No markup of subcontractor’s or engineering that may be additionally required will be allowed. Before purchasing materials or supplies, Contractor shall check with the City and obtain approval from the City to assure that such materials or supplies are not available from VPU. VPU shall compensate Contractor for such materials and supplies and only allow a 10% markup. However, if VPU compensates contractor for such materials and supplies within net 10 days, no markup will be allowed.

8. Furnish VPU end of month billing with current inventory accounting reports and work order reports, with sufficient supporting data covering activities engaged in and work performed by Contractor. Such accountings and reports shall be provided every thirty days, on the first business day (Monday through Thursday) of each month throughout the term of the agreement. All such accounting shall comply with the Federal Energy and Regulatory Commission (FERC) accounting principles as well as the City’s accounting system. Contractor in consultation with VPU shall develop a mutually agreeable form to be used for monthly accounting and reports. For reference, the City’s current accounting 2 and reporting software system is EDEN. The City’s current asset management, inventory and work order software platform is CentralSquare Enterprise Asset Management (powered by Lucity).

9. Make electrical measurements and reports as requested by the City to provide operational data on Vernon’s Electric and Fiber Optic System.

10. Install transformers, switches, cutouts, lines, meters, and other facilities on the transmission and distribution systems as required for repairs, replacements, new customers, and system expansion.

11. Install routers, modems, lines, service drops and other facilities on the fiber optic system as required for repairs, replacements, new customers, and system expansion.

12. Install metering facilities for all new customer installs and upgrades. Inspect, maintain, troubleshoot, and repair existing customer metering facilities. Remove metering facilities, as required.

13. Install, remove, and replace substation equipment and material as directed by the City.

Perform maintenance on all substation equipment, as required. Troubleshoot substation related issues and take corrective actions, as required.

14. Remove underground and overhead facilities no longer needed and perform other work on underground and overhead system as required.

15. At the direction of the City, Contractor shall carry out troubleshooting activities including responding to customer calls and complaints, traveling to various sites in Vernon, assessing and estimating failures or damages, safely restoring service as quickly as possible, and reporting on system and equipment status.

16. All work shall be performed in accordance with the City’s construction and operation standards, General Orders No. 95, 128, 165, 174, National Electric Safety Codes, ordinances, rules, regulations, operating procedures, and good utility practice.

17. If a new facility is to be constructed by the City, Contractor shall be allowed an opportunity to submit a proposal to construct any such facility. The City reserves the right to permit the customer to construct any customer facilities and to negotiate agreements with any contractors, including Contractor, if the City is to construct such facility. The City is not obligated to use Contractor for such services.

18. Works Orders: All work, with the exception of emergency work, shall be performed pursuant to approved work order(s) and will be scheduled with VPU. Contractor shall obtain authorization from the City for the proposed work prior to initiating construction and submit as-built documentation identifying the actual work performed after the completion of the changes made to the system. Work orders will fall into the following categories:
a. Major Work: Major modifications, extensions, addition, and improvements, including large maintenance jobs will be accomplished under pre-approved work orders. Large maintenance jobs are defined as those estimated in advance to take more than one crew day.
3 b. Emergency Work: Emergency repairs shall be initiated as soon as possible by Contractor under a pre-assigned work order number. Contractor shall see the City’s approval for the work order at the start of the next business day after the work is initiated and provide as-built information upon completion of the work. Contractor shall mobilize restoration activities in response to emergency calls within one hour of notification.
c. Routine work: Routine maintenance work will be completed under pre-approved standing work orders specifically established for these activities. Routine work will include line patrol, switching, replacement of minor components, minor modifications and additions, and other routine work normally required on electric utility systems. Contractor and Vernon will collaborate in establishing a number of standing work orders.
d. Work orders that require structure replacement such as poles, switches and transformers must be approved by the City prior to scheduling the construction and must be supplemented with as-built documentation after the completion of the work.

19. Contractor shall supply all Service Planning for work on the electric and fiber optic system for approval by the City.

20. Scheduling of Work: Contractor shall provide VPU’s authorized representative, no later than 09:00 a.m. on Monday of each week, with a proposed plan and authorized representative shall approve or make modifications to the proposed plan and schedule no later than 2:00 p.m. on the day that the schedule is provided. Once approved, the plan and schedule shall be contractor’s authorization to perform work during the following week.

The timing of such submittals and meeting may be changed by mutual agreement between the City’s and contractor’s authorized representatives. Concurrent with the submission of its proposed plan and schedule, contractor shall also submit a status report and the as-built documents on the previous week’s work.

21. Maintenance Schedule/Plan.
a. Contractor shall provide VPU a monthly maintenance and inspection schedule identifying the location and circuit name. Contractor shall maintain and inspect the Electric System pursuant to the requirements of General Orders No. 95, 128, 165 and 174. The maintenance and inspection schedule shall include, but not be limited to the following:
i. Insulator washing (transmission, distribution, and substations). ii. Street lighting inspection.
iii. Customer substation inspection.
iv. Manhole and underground cable inspection.
v. Pole inspection and testing.
vi. Distribution system inspection.
vii. Transmission system inspection.
4 viii. Substation inspection.
ix. Meter testing and inspection.
x. Fiber Optics System inspection.
b. Contractor shall maintain a system database to track and report inspection results and corresponding repairs/corrections. All documented work performed shall be equal to or greater than General Order 165. Contractor must submit all inspections and reports to the City within 30 days of said inspections.

22. Staffing Levels: Contractor shall provide a minimum level of employee staffing, dedicated to Vernon’s Electric and Fiber Optic Systems. Contractor to provide a detailed standard rate sheet.

23. Contractor shall not accept or submit a proposal for any work for any of the City’s customers, unless the City provides, in its sole discretion, advance written consent and agrees that such work shall not constitute a conflict of interest.

24. Contractor agrees that it shall provide services and maintain Vernon’s Electric and Fiber Optic System for and on behalf of the City, subject to and in accordance with good utility practice and within the terms and provisions of the Agreement and direction given by Vernon’s authorized representatives. Contractor shall also respond to all inquiries and requests from customers of Vernon’s Electric and Fiber Optic System and shall provide safe, proper, efficient, and reliable services as provided under good utility practice.

25. Contractor understands and will perform the majority of overhead distribution work on the 7KV and 16KV while energized thereby minimizing customer outages. All work performed on the 66KV transmission system will be performed de-energized and with preapproved switching programs. Contractor must have an extensive safety program and all appropriate hot tools to perform all energized work.
5 WORK ORDER REQUIREMENTS
Each Work Order to be performed under the Agreement shall contain the following items, as applicable.

1. The Services authorized to be performed by Contractor.

2. The fees and payment schedule for the Services to be performed in accordance with Exhibit C – Contractor Fees for Services.

3. Identification of all critical path milestone events and target completion dates for each.

4. The Deliverables associated with the Services performed under the applicable Work Order.

5. Detailed description of all activities for the Services to be performed by Contractor and the location of each activity.

6. The number of hours, either estimate or firm, required for each activity

7. Specifications for any Equipment to be delivered under the Work Order.

8. Any other terms and conditions that are specific to the Services under the Work Order, including any modifications requested by Vernon’s Authorized Representative pursuant to Section 4.1.

EXHIBIT C

CONTRACTOR FEES FOR SERVICES
City of Vernon - Labor
Classification Quantity Regular Double
General Manager 1 $ 140.00 $ 204.00
General Foreman 2 $ 138.90 $ 202.00
Account Manager/CPA 1 $ 118.40 $ 185.00
P.E. Engineer 2 $ 112.40 $ 182.00
Associate Engineer 2 $ 104.80 $ 168.50
GIS Coordinator 1 $ 104.80 $ 168.50
Line Crew Foreman 4 $ 124.60 $ 196.00
Substation Foreman 1 $ 138.40 $ 202.00
Meter Foreman 1 $ 124.60 $ 196.00
Fiber Foreman 1 $ 124.60 $ 196.00
Troubleman 1 $ 115.80 $ 184.60
Lineman 12 $ 115.80 $ 184.60
Groundman 4 $ 88.50 $ 128.90
Substation Electrician 2 $ 115.80 $ 184.60
Substation Relay Technician 1 $ 132.40 $ 199.70
Meter Technician 1 $ 115.80 $ 184.60
Fiber Technician/Splicer 1 $ 115.80 $ 184.60
Warehouse 1 $ 88.50 $ 128.90
Warehouse Pre-Fab 1 $ 88.50 $ 128.90
Mechanic Worker 2 $ 88.50 $ 128.90
Maintenance 1 $ 88.50 $ 128.90
Clerk Secretary 2 $ 58.40 $ 82.90
Per New Contract
Exhibit C
City of Vernon - Equipment
Quantity Description Monthly Rate Total
11 SERVICE TRUCK F250/350 $ 1,680.00 $ 18,480.00
4 SERVICE TRUCK F450/550 $ 2,210.00 $ 8,840.00
4 3060 DIGGER DERRICK $ 5,280.00 $ 21,120.00
3 STANDARD BUCKET TRUCK $ 5,120.00 $ 15,360.00
3 SINGLE MAN TROUBLE BUCKET TRUCK $ 3,200.00 $ 9,600.00 2 A-CLASS 80 FT. BUCKET TRUCK $ 11,800.00 $ 23,600.00
1 A-CLASS 105 FT. MATERIAL HANDLER BUCKET TRUCK $ 12,400.00 $ 12,400.00 1 ALTEC 35 TON CRANE $ 6,400.00 $ 6,400.00
1 MANITOU FORKLIFT $ 2,100.00 $ 2,100.00
1 SHERMAN REILLY PT3366 PULLER $ 2,400.00 $ 2,400.00
1 SHERMAN REILLY DUCT DAWG $ 2,400.00 $ 2,400.00
1 INGERSOL RAND COMPRESSOR $ 640.00 $ 640.00
1 300 KW GENERATOR $ 610.00 $ 610.00
1 25 KW GENERATOR $ 260.00 $ 260.00
2 LIGHT TOWER $ 200.00 $ 400.00
3 ARROW BOARD $ 390.00 $ 1,170.00
1 CAT TELEHANDLER $ 2,100.00 $ 2,100.00
1 CAT SCISSOR LIFT $ 400.00 $ 400.00 $ 128,280.00
$ 32.00
$ 265.00
Additional Hourly Equipment:

MECHANIC TRUCK
7600 INT'L TRACTOR TRAILER LOWBED

EXHIBIT D

EQUAL EMPLOYMENT OPPORTUNITY

PRACTICES PROVISIONS
A. Contractor certifies and represents that, during the performance of this Contract, the contractor and each subcontractor shall adhere to equal opportunity employment practices to assure that applicants and employees are treated equally and are not discriminated against because of their race, religious creed, color, national origin, ancestry, handicap, sex, or age. Contractor further certifies that it will not maintain any segregated facilities.

B. Contractor agrees that it shall, in all solicitations or advertisements for applicants for employment placed by or on behalf of Contractor, state that it is an "Equal Opportunity Employer" or that all qualified applicants will receive consideration for employment without regard to their race, religious creed, color, national origin, ancestry, handicap, sex or age.

C. Contractor agrees that it shall, if requested to do so by the City, certify that it has not, in the performance of this Contract, discriminated against applicants or employees because of their membership in a protected class.

D. Contractor agrees to provide the City with access to, and, if requested to do so by City, through its awarding authority, provide copies of all of its records pertaining or relating to its employment practices, except to the extent such records or portions of such records are confidential or privileged under state or federal law.

E. Nothing contained in this Contract shall be construed in any manner as to require or permit any act which is prohibited by law.