Agenda packet — Vernon City Council, June 21, 2022 (part 6 of 7)

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Account Adjustment (TRBAA) to ensure that all transmission revenue credits and other credits flow through to CAISO Tariff and TO Tariff transmission customers.

H. On October 19, 2021, the City Council adopted Resolution No. 2021-33 approving, pursuant to the TO Tariff, the establishment of the City’s revised TRBAA for 2022, and revised Appendix I to the TO Tariff implementing the revised TRBAA for 2022, to be effective on January 1, 2022.

I. The City has determined that its three existing transmission contracts are no longer economically beneficial and has decided to terminate each of them, which results in the need to cancel the City’s TO Tariff on file with FERC, and terminate its participation in the CAISO as a PTO by withdrawing from the TCA.

J. In order to effectuate the City’s termination of participation in the CAISO as a PTO, the City must request FERC approval to cancel its TO Tariff on file with FERC.

Cancellation of the TO Tariff includes termination of the City’s TRR and TRBAA tariff mechanisms.

K. Once the TO Tariff cancellation filing is accepted by FERC, the CAISO has indicated it will submit to FERC an amendment to the TCA withdrawing the City as a signatory.

L. In addition to being a PTO, the City is also a metered subsystem (MSS) in the CAISO. After the City ceases to be a PTO with the CAISO upon cancellation of its TO Tariff and withdrawal from the TCA, the City will continue to operate under the metered subsystem agreement it has with the CAISO. As a non-PTO MSS, the City will be assessed wheeling access charges for transmission service based on wheel-through transactions from or across the CAISO grid. The basis for wheeling access charge assessment by the CAISO will change from the current gross load basis to a net load basis.

M. The Public Utilities Department has recommended the cancellation of the City's TO Tariff. This cancellation will not result in any new or increased service charges or assessments to the City’s ratepayers.

N. The City Council desires to approve the cancellation of the City’s TO Tariff.

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. The City Council of the City of Vernon finds that this action does Resolution No. 2022-21

Page 3 of 3 ends

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not constitute a “project” pursuant to section 15378(b)(2) of the Guidelines to the California Environmental Quality Act (CEQA), because such action constitutes an administrative activity; and even if the adoption of the proposed item did constitute a project, it would be exempt in accordance with CEQA Guidelines section 15061(b)(3), the general rule that CEQA only applies to projects that may have an effect on the environment.

SECTION 4. The City Council of the City of Vernon hereby further finds and determines there are compelling reasons to justify the cancellation of the City’s TO Tariff to be effective October 7, 2022, concurrent with the termination of the City’s existing transmission contracts.

SECTION 5. The City Council of the City of Vernon hereby declares that in no way shall this Resolution affect the City Council’s adoption or determination of any previous Resolution related to the City’s TO Tariff TRR or TRBAA adjustments.

SECTION 6. The City Council of the City of Vernon hereby approves the cancellation of the City’s TO Tariff effective October 7, 2022, as described in the Public Utilities Department Report dated June 21, 2022.

SECTION 7. The City Council of the City of Vernon hereby authorizes outside counsel to submit the City’s TO Tariff Cancellation filing and any necessary supporting documentation, to FERC on behalf of the City of Vernon.

SECTION 8. 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 21st day of June, 2022.
_______________________
LETICIA LOPEZ, Mayor
ATTEST:

LISA POPE, City Clerk
(seal)
APPROVED AS TO FORM:
___________________________
ZAYNAH N. MOUSSA,
Interim City Attorney
WALLACE L. DUNCAN (1937-2008)
EDWARD WEINBERG (1918-1995)
JEFFREY C. GENZER
THOMAS L. RUDEBUSCH
MICHAEL R. POSTAR
LISA S. GAST
PETER J. SCANLON
BHAVEETA K. MODY
KRISTEN CONNOLLY McCULLOUGH
ELLEN L. HILL
GELANE L. DIAMOND**
Of Counsel
ELI D. EILBOTT*
R. KEITH GORDON**
PETER C. KISSEL**
JAMES D. PEMBROKE

ROBERT WEINBERG
California Office
SUITE 1410, 915 L STREET
SACRAMENTO, CA 95814
(916) 498-0121
SEAN M. NEAL
LAUREN M. PERKINS
SYLWIA DAKOWICZ**
Senior Counsel
ROBERT A. LAURIE**
*REGISTERED TO PRACTICE BEFORE
U.S. PATENT AND TRADEMARK OFFICE
** NOT ADMITTED IN D. C.; SUPERVISION

BY PRINCIPALS OF THE FIRM, MEMBERS

OF THE DC BAR
Via Electronic Filing
The Honorable Kimberly D. Bose
Secretary
Federal Energy Regulatory Commission
888 First Street NE
Washington, DC 20426
Re: City of Vernon, California, Docket No. NJ22-___
Notice of Cancellation of Transmission Owner Tariff
Dear Ms. Bose:

The City of Vernon, California (“Vernon” or “the City”) hereby submits and respectfully requests that the Commission accept for filing Vernon’s Notice of Cancellation of its Transmission Owner Tariff (“TO Tariff”) effective October 7, 2022.

As support for its filing, Vernon offers the following:

I. Background
Vernon is currently a Participating Transmission Owner (“PTO”) with the California Independent System Operator Corporation (“CAISO”) by virtue of it having turned over operational control of its three Existing Transmission Contracts (“ETCs”) to the CAISO’s operational control,
1 and executing the CAISO’s Transmission Control
1 Two of the three ETCs are with Southern California Edison Company (“SCE”); the remaining ETC is with Los Angeles Department of Water and Power (“LADWP”). Typically, an entity turns over operational control of transmission assets to the CAISO in becoming a PTO with the CAISO, as well as any ETC Entitlements; Vernon does not own any transmission assets. 1667 K STREET, NW, SUITE 700
WASHINGTON, DC 20006
(202) 467-6370
www.dwgp.com
June 24, 2022
2 Agreement (“TCA”).2 Vernon has no transmission assets other than the ETCs. As the means by which Vernon, as a PTO, has set forth Vernon’s charges for transmission access to the CAISO Controlled Grid, Vernon initially filed its TO Tariff with the Commission in Docket No. EL00-105-000, effective January 1, 2001.

Vernon has determined that its ETCs are no longer economically beneficial, and for that reason has decided to terminate its three ETCs. After termination of its ETCs, Vernon will have no transmission assets or Entitlements under CAISO’s operational control. As Vernon’s TO Tariff merely serves as a mechanism to pass through the costs of its ETCs, without its ETCs Vernon’s TO Tariff will serve no purpose, and accordingly Vernon is filing this Notice of Cancellation of its TO Tariff. Additionally, without any transmission assets or Entitlements under CAISO operational control, Vernon will be terminating its participation with the CAISO as a PTO through withdrawal from the TCA. Vernon will continue to participate in the CAISO markets as a metered subsystem (“MSS”) in the CAISO and will continue to operate under the MSS Agreement, the currently effective version of which is on file with the Commission in Docket No. ER14- 2032.

Vernon has been in close coordination with SCE, LADWP and the CAISO regarding its desire to terminate each of its ETCs, terminate its participation with the CAISO as a PTO and withdraw as a signatory to the TCA, cancel its TO Tariff, and prepare a final accounting of its Transmission Revenue Requirement (“TRR”) and Transmission Revenue Balancing Account (“TRBA”). Each understands Vernon’s intent and has indicated consent.

A. Vernon Is Terminating Its Three ETCs Effective October 7, 2022 As noted above, Vernon has three ETCs which it had turned over to the operational control of the CAISO; two of Vernon’s ETCs are with SCE, the other is with LADWP. Vernon’s ETCs with SCE are:

Southern California Edison Company – City of Vernon Victorville-Lugo Firm Transmission Service Agreement (FERC Rate Schedule No. 360), as amended by the 2009 settlement in FERC Docket Nos. ER08-1343-000, et al.

The 2009 settlement in FERC Docket Nos. ER08-1343-000, et al., allows Vernon to terminate these agreements with eight (8) months’ notice to SCE. After coordination and consultation with SCE as to Vernon’s plan to terminate each of its ETCs and terminate its participation as a PTO with the CAISO, Vernon submitted the required 2 The currently effective version of the TCA, which includes Vernon as a signatory, is on file with the Commission as California Independent System Operator Corporation, FERC Electric Tariff No. 7, Fourth Replacement Transmission Control Agreement (Effective Date: July 3, 2012). 3 formal Notices of Termination to SCE on February 7, 2022, requesting an effective date for termination of the ETCs of October 7, 2022.3 On February 23, 2022, Vernon received confirmation of receipt of the two Notices of Termination by SCE, and confirmation of the requested effective date of October 7, 2022. 4 As these two agreements between SCE and Vernon are FERC-jurisdictional, SCE has confirmed that it will timely file with FERC the notices of termination such that termination of the two ETCs will be effective October 7, 2022.

The third of Vernon’s ETCs is with LADWP:

Los Angeles – Vernon Adelanto – Victorville/Lugo Firm Transmission Service Agreement between the City of Los Angeles Department of Water and Power and the City of Vernon (August 18, 1992)
This ETC provides that termination may occur on a date mutually agreed upon by the Parties. Upon coordination and consultation with LADWP as to Vernon’s plan to terminate each of its ETCs and terminate its participation as a PTO with the CAISO, Vernon submitted a formal Notice of Termination to LADWP on February 7, 2022, seeking agreement to terminate Vernon’s ETC with LADWP concurrent with the termination date of Vernon’s ETCs with SCE, October 7, 2022.5 On March 16, 2022,
Vernon received confirmation of receipt of the Notice of Termination by LADWP, confirming that termination of the ETC will be effective October 7, 2022. 6 As the agreement between LADWP and Vernon is not FERC-jurisdictional, no filing at FERC will be made to effectuate this termination.

B. Vernon Is Withdrawing From the CAISO’s TCA and Terminating Its Participation As a PTO With the CAISO Effective October 7, 2022 Upon coordination and consultation with the CAISO as to Vernon’s plan to terminate each of its ETCs and terminate its participation as a PTO with the CAISO, Vernon sent a letter to the CAISO dated February 7, 2022, indicating its intent to withdraw from the TCA subject to Section 3.3.2 and 4.4.2 of the TCA, through the release of Vernon’s Entitlements to SCE and LADWP.7

On April 22, 2022, CAISO provided its formal Response to Vernon’s Notice of Intent to withdraw from the TCA and cease its participation with the CAISO as a PTO.8 In its Response, CAISO noted that: (1) SCE is currently a PTO with the CAISO while 3 See Attachment 1.
4 See Attachment 2.
5 See Attachment 3.
6 See Attachment 4.
7 See Attachment 5.
8 See Attachment 6.
4 LADWP is not, (2) in accordance with the TCA, the sale, assignment, release, or transfer of an Entitlement to a non-Participating TO shall not occur without written consent from the CAISO, and (3) the CAISO does not oppose the sale, assignment, release or transfer of Vernon’s Entitlements to LADWP, understanding that this will remove the associated capacity on the Adelanto – Victorville/Lugo transmission path from the operational control of the CAISO.

The CAISO also recognized in its Response that Vernon’s withdrawal from the TCA would only be effective following the receipt of all necessary regulatory approvals, including the filing and approval of the instant filing – the Notice of Cancellation of Vernon’s TO Tariff by the Commission. The CAISO noted in its Response its expectation that such a filing at FERC would be made in advance of any necessary amendments to the TCA required to affect Vernon’s withdrawal as a PTO, and that all regulatory approvals would be required to be in effect prior to the effective date of the withdrawal, which the CAISO requires to be the first day of a month.

On May 5, 2022, consistent with the CAISO’s instruction at that time, Vernon submitted its formal Notice of Withdrawal from the TCA, effective November 1, 2022 (the first day of the month following the effective date of the termination of Vernon’s ETCs with SCE and LADWP).9
As required by Section 3.3.4 of the TCA, the CAISO
posted Vernon’s Notice on the CAISO public website and sent a courtesy notice to the listed contacts of all signatories to the TCA on May 17, 2022.10 The CAISO more recently indicated that if FERC accepts Vernon’s filing for acceptance of the cancellation of its’ TO Tariff to be effective October 7, 2022, the CAISO will be able to file an amendment of the TCA to withdraw Vernon as a signatory to the agreement, effective October 7, 2022.11
II. Notice of Cancellation of Vernon’s TO Tariff Effective October 7, 2022 Vernon’s TO Tariff, filed with the Commission in Docket No. EL00-105-000, was made effective January 1, 2001. Vernon’s TO Tariff sets forth Vernon’s TRR for its Entitlements placed under the CAISO’s operational control, as well as terms and conditions relating to transmission expansion of, and interconnection with, any transmission and Entitlements of Vernon placed under CAISO’s operational control.

Vernon’s only Entitlements are the above-described ETCs with SCE and LADWP.

As explained above, Vernon will be terminating its three ETCs, which comprise the only transmission Entitlements Vernon turned over to CAISO operational control, effective October 7, 2022. With the termination of those ETCs, Vernon will have no transmission assets, and therefore no TRR, and Vernon’s TO Tariff becomes 9 See Attachment 7.
10 http://www.caiso.com/Documents/City-of-Vernon-Notice-to-Withdraw-from-Transmission-ControlAgreement-May5-2022.pdf 11 The CAISO has advised Vernon that it would be preferable to align the cancellation of the TO Tariff and the amendment of the TCA to withdraw Vernon as a Participating TO such that both are effective on the same date.
5 meaningless. For this reason, Vernon is requesting that the Commission accept this filing of its Notice of Cancellation of Vernon’s TO Tariff, effective October 7, 2022. Vernon submits as Attachment 8 the Notice of Cancellation of Vernon’s TO Tariff.

III. Vernon Will Make a Filing When CAISO Final Settlement is Known Because several of the components which comprise Vernon’s TRR, as well as the TRBAA, are based on projected amounts subject to true-up when actual costs become available, Vernon commits to submitting a filing to the Commission, consistent with Section 8.3 of Appendix F, Schedule 3 of the CAISO Tariff, accounting for the final settlement of Vernon’s TRR and TRBA between Vernon and the CAISO when such final settlement is known.

IV. Requested Effective Date for Notice of Cancellation of TO Tariff, and Information Regarding Related Filings
A. Effective Date for Notice of Cancellation of TO Tariff Vernon requests the Commission issue an order on Vernon’s Notice of Cancellation of Vernon’s TO Tariff for filing and acceptance no later than August 24, 2022 (60 days after June 24, 2022, the date the instant filing was submitted) with an effective date of October 7, 2022, so that the TO Tariff cancellation effective date will be concurrent with the effective date of the termination of Vernon’s three ETCs.

B. Information Regarding Anticipated Related Filings
Given that there are several interrelated pieces to Vernon’s plans to terminate its three ETCs and terminate its participation as a PTO with the CAISO, including the instant Notice of Cancellation of its TO Tariff, SCE’s anticipated filing of the termination of Vernon’s two FERC-jurisdictional ETCs, and the CAISO’s anticipated filing of an amendment to the TCA to remove Vernon as a signatory to the TCA, Vernon respectfully submits the following for the Commission’s convenience.

SCE has indicated that it will timely file with FERC (no later than August 8, 2022, 60 days before the requested effective date) notices of termination of Vernon’s two FERC-jurisdictional ETCs, requesting an effective date of October 7, 2022.

CAISO has indicated that assuming FERC issues an order approving Vernon’s Notice of Cancellation of Vernon’s TO Tariff no later than the anticipated date of August 24, 2022, CAISO will file an amendment to the TCA to remove Vernon as a signatory no later than August 5, 2022 (60 days before the requested effective date), requesting an effective date of October 7, 2022.
6 V. Preservation of Vernon Positions
Vernon is a municipal electric system that is exempt from Commission jurisdiction under Section 201(f) of the Federal Power Act.12 As Vernon has consistently stated in its Commission filings, while Vernon pledges its continued cooperation in matters relating to its status as a PTO, including this filing which Vernon submits as one element of discontinuing its participation as a PTO, it does not by this filing consent to any Commission jurisdiction or authority other than that provided by the Commission’s existing orders in Docket Nos. EL00-105 and EL08-54.13
VI. Request for Waivers
While Vernon is unaware of any fees applicable to this filing, out of an abundance of caution, Vernon requests that the Commission waive any fees it may otherwise deem applicable to this filing. As a municipality, Vernon is exempt from any filing fee.14 Additionally, Vernon requests that the Commission grant any waivers it may deem necessary to allow the Cancellation of Vernon’s TO Tariff to go into effect on October 7, 2022.

VII. Documents Submitted
The documents submitted with this electronic filing are this Transmittal Letter and the following attachments:

Attachment 1: City of Vernon 2-7-22 Notice of Termination of Southern California Edison Company – City of Vernon Mead Firm Transmission Service Agreement (FERC Rate Schedule No. 207) and Notice of Termination of Southern California Edison Company – City of Vernon Victorville-Lugo Firm Transmission Service Agreement (FERC Rate Schedule No. 360)
Attachment 2: Southern California Edison Company 2-23-22 e-mail confirming receipt of (Attachment 1) Notices of Termination
Attachment 3: City of Vernon 2-7-22 Notice of Termination of Los Angeles – Vernon Adelanto – Victorville/Lugo Firm Transmission Service Agreement Between City of Los Angeles Department of Water and power and the City of Vernon 12 16 U.S.C. § 824(f) (“No provision in this subchapter shall apply to, or be deemed to include . . . a State or any political subdivision of a State . . . or any agency, authority, or instrumentality of any one or more of the foregoing . . . .”).
13 See, e.g., City of Vernon, 124 FERC ¶ 61,005, P 14 (2008) (noting that the Commission “lacks jurisdiction over Vernon’s transmission rates under FPA section 205,” but may nonetheless “review Vernon’s TRR because it is a component of the jurisdictional CAISO [Transmission Access Charge]”). 14 18 C.F.R. § 381.108(a); see also City of Vernon, 166 FERC ¶ 61,086, P 9 (2019) (“[W]e agree that Vernon, as a municipality, is exempt from the payment of any fees associated with this filing.”) (citing 18 C.F.R. 381.108(a)).
7 Attachment 4: Los Angeles Department of Water and Power 3-16-22 Letter confirming receipt of (Attachment 3) Notice of Termination Attachment 5: City of Vernon 2-7-22 Notice of Intent to Withdraw from the Transmission Control Agreement and Request for CAISO Assistance Attachment 6: CAISO 4-22-22 Response to City of Vernon’s Notice of Intent to Withdraw from the Transmission Control Agreement
Attachment 7: City of Vernon 5-5-22 Notice of Withdrawal from the Transmission Control Agreement
Attachment 8: e-Tariff Notice of Cancellation
In addition, the e-Tariff Notice of Cancellation is being provided to the Commission in RTF format with metadata included, as required by the Commission’s electronic tariff filing rules.
15 VIII. Service
An electronic copy of this filing will be served upon all parties to Docket No.

NJ22-2-000 and each person listed as a “Designated Representative” to a CAISO Participating Transmission Owner, as posted on the CAISO’s website on the date of this filing, as well as the CAISO and the California Public Utilities Commission.

IX. Correspondence
Vernon requests that all correspondence, pleadings and other communications concerning this filing be served upon the following individuals:

Abraham Alemu
General Manager of Public Utilities
City of Vernon
4305 Santa Fe Avenue
Vernon, California 90058
Tel: (323) 826-3643
[email protected]
Lisa S. Gast
Peter J. Scanlon
Duncan, Weinberg, Genzer
& Pembroke, P.C.
1667 Street, NW #700
Washington, DC 20006
Tel: (202) 467-6370
[email protected]
[email protected]
15 See Electronic Tariff Filings, Order No. 714, 124 FERC ¶ 61,270 (2008), clarified, Order 714-A, 147 FERC ¶ 61,115 (2014).
8 X. Conclusion
For the foregoing reasons, Vernon respectfully requests that the Commission accept for filing the cancellation of its Transmission Owner Tariff effective October 7, 2022.

Sincerely,
/s/ Lisa S. Gast
Lisa S. Gast
Peter J. Scanlon
Attorneys for City of Vernon,
California
Attachments
cc: Designated Representatives to CAISO Participating Transmission Owners, CAISO, and the California Public Utilities Commission.

Attachment 1
4305 Santa Fe Avenue, Vernon, California 90058
Telephone (323) 583-8811
Exclusively Industrial
February 7, 2022
Flaviu Macavei
Contract Manager
Grid Contract Management | Transmission & Distribution
Southern California Edison Company
2244 Walnut Grove
Rosemead CA 91770
T. 626-302-9845
RE: Notice of Termination of Southern California Edison Company – City of Vernon Mead Firm Transmission Service Agreement (FERC Rate Schedule No. 207) Dear Mr. Macavei:

Pursuant to Section 5.4 of the Southern California Edison Company – City of Vernon Mead Firm Transmission Service Agreement (FERC Rate Schedule No. 207), as amended by the 2009 Settlement in FERC Docket Nos. ER08-1343 and ER08-1353, the City of Vernon hereby provides its Notice of Termination with the required eight (8) months’ notice. Therefore, FERC Rate Schedule No. 207 will terminate effective October 7, 2022.

Please confirm receipt of this Notice of Termination, as well as the effective date of such Termination.

Best,
Abraham Alemu
General Manager
Vernon Public Utilities
cc: Melanie Seader (SCE)
Mark McGregor (SCE)
Ramzi Raufdeen (Vernon)
Lisa Gast (DWGP)
4305 Santa Fe Avenue, Vernon, California 90058
Telephone (323) 583-8811
Exclusively Industrial
February 7, 2022
Flaviu Macavei
Contract Manager
Grid Contract Management | Transmission & Distribution
Southern California Edison Company
2244 Walnut Grove
Rosemead CA 91770
T. 626-302-9845
RE: Notice of Termination of Southern California Edison Company – City of Vernon Victorville-Lugo Firm Transmission Service Agreement (FERC Rate Schedule No. 360) Dear Mr. Macavei:

Pursuant to Section 5.2 of the Southern California Edison Company – City of Vernon Victorville-Lugo Firm Transmission Service Agreement (FERC Rate Schedule No. 360), as amended by the 2009 settlement in FERC Docket Nos. ER08-1343 and ER08-1353, the City of Vernon hereby provides its Notice of Termination with the required eight (8) months’ notice.

Therefore, FERC Rate Schedule No. 360 will terminate effective October 7, 2022.

Please confirm receipt of this Notice of Termination, as well as the effective date of such Termination.

Best,
Abraham Alemu
General Manager
Vernon Public Utilities
cc: Melanie Seader (SCE)
Mark McGregor (SCE)
Ramzi Raufdeen (Vernon)
Lisa Gast (DWGP)
Attachment 2
1 From: Flaviu Macavei <[email protected]>
Sent: Wednesday, February 23, 2022 8:10 PM
To: Lisa Gast
Cc: Peter Scanlon; Alemu, Abraham; Mark McGregor; Melanie A Seader; Raufdeen, Ramzi Subject: RE: (External):RE: Vernon Notices of Termination of ETCs with SCE Thanks for your patience. I have received the Notices of Termination.

Best Regards,
Flaviu Macavei
Contract Manager
Grid Contract Management | Transmission & Distribution
T. 626‐302‐9845| PAX. 29845
2244 Walnut Grove, Rosemead CA 91770; GO1
From: Lisa Gast <[email protected]>
Sent: Friday, February 18, 2022 2:22 PM
To: Flaviu Macavei <[email protected]>
Cc: pjs (dwgp.com) <[email protected]>; Alemu, Abraham <[email protected]>; Mark McGregor <[email protected]>; Melanie A Seader <[email protected]>; Raufdeen, Ramzi <[email protected]>
Subject: (External):RE: Vernon Notices of Termination of ETCs with SCE Flaviu and Melanie:

Please confirm receipt of the Notices of Termination sent on 2/7/22.

Best,
Lisa Gast
Attachment 3
4305 Santa Fe Avenue, Vernon, California 90058
Telephone (323) 583-8811
Exclusively Industrial
February 7, 2022
Department of Water and Power
Of the City of Los Angeles
c/o Assistant General Manager – Power
P.O. Box 111, Room 1155
Los Angeles, California 90051-0100
RE: Notice of Termination of Los Angeles – Vernon Adelanto – Victorville/Lugo Firm Transmission Service Agreement Between City of Los Angeles Department of Water and Power and the City of Vernon To Whom It May Concern:

Pursuant to Section 4.2 (i) of the Los Angeles – Vernon Adelanto – Victorville/Lugo Firm Transmission Service Agreement between the City of Los Angeles Department of Water and Power and the City of Vernon, the City of Vernon hereby provides its Notice of Termination with the required four (4) years prior written notice. Therefore, the Agreement will terminate effective February 7, 2026.

However, Section 4.2 (vi) of the Agreement further provides that termination may occur on a date mutually agreed upon by the Parties. As discussed during our call of January 26, 2022, Vernon is interested in finding a mutually-agreeable date for termination on less than the four years provided in Section 4.2 (i). Specifically, as Vernon’s only other Existing Transmission Contracts, which are with Southern California Edison Company, can terminate upon eight (8) months’ written notice (October 7, 2022), Vernon respectfully requests that LADWP agree to terminate the Agreement as of October 7, 2022.

Please (1) confirm receipt of this Notice of Termination, (2) confirm that pursuant to Section 4.2(i) of the Agreement the effective date of such Termination is February 7, 2026; and (3) let us know if LADWP is able to accommodate Vernon’s requested termination date of October 7, 2022.

Best,
Abraham Alemu
General Manager
Vernon Public Utilities
cc: Syndi Driscoll (LADWP)
Simon Zewdu
Ramzi Raufdeen (Vernon)
Lisa Gast (DWGP)
Attachment 4

Attachment 5
4305 Santa Fe Avenue, Vernon, California 90058
Telephone (323) 583-8811
Exclusively Industrial
February 7, 2022
California Independent System Operator Corporation
Regulatory Contracts
250 Outcropping Way
Folsom, California 95630
[email protected]
T: 916-351-4400
RE: City of Vernon’s Notice of Intent to Withdraw from the Transmission Control Agreement (TCA) and Request for CAISO Assistance
To Whom It May Concern:

As you will recall, the City of Vernon executed the CAISO’s Transmission Control Agreement (TCA) in 2001 and currently is a Participating Transmission Owner (PTO) only by virtue of its three Existing Transmission Contracts (ETCs) which it turned over to the CAISO’s Operational Control as Transmission Entitlements. The three ETCs/Entitlements are as follows:

Southern California Edison Company – City of Vernon Mead Firm Transmission Service Agreement (FERC Rate Schedule No. 207), as amended by the 2009 Settlement in FERC Docket Nos. ER08-1343 and ER08-1353
Southern California Edison Company – City of Vernon Victorville-Lugo Firm Transmission Service Agreement (FERC Rate Schedule No. 360), as amended by the 2009 settlement in FERC Docket Nos. ER08-1343 and ER08-1353
Los Angeles – Vernon Adelanto – Victorville/Lugo Firm Transmission Service Agreement between the City of Los Angeles Department of Water and Power and the City of Vernon Vernon has provided both Southern California Edison Company (SCE) and Los Angeles Department of Water and Power (LADWP) with written notice to terminate each of these ETCs.

With respect to its two ETCs with SCE, termination will be effectuated on eight (8) months written notice, which is October 7, 2022. Pursuant to TCA Section 4.4.2, the CAISO’s written consent is not required for this termination since the Entitlement release is to another Participating TO. With respect to its ETC with LADWP, the agreement provides for four (4) years written notice or as otherwise agreed by the parties, and LADWP has signaled that it will February 7, 2022 Page 2
City of Vernon, 5305 Santa Fe Avenue, Vernon, California 90058 – Telephone (323) 583-8811 likely be able to agree to the same termination date of October 7, 2022. Assuming confirmation of LADWP’s ability to accommodate that termination date, Vernon is, through this letter, seeking the CAISO’s written consent, pursuant to TCA Section 4.4.2, to terminate that ETC/Entitlement.

Upon the termination of these three ETCs/Entitlements, Vernon will have disposed of “all of the … Entitlements that the Participating TO placed under the CAISO’s Operational Control, subject to the requirements of Section 4.4” and wishes to withdraw from the TCA pursuant to TCA Section 3.3.2.

Please let us know if a meeting is needed to discuss Vernon’s intentions as described above, as well as if there are other steps that will need to be taken to dispose of its ETCs/Entitlements and withdraw from the TCA.

Best,
Abraham Alemu
General Manager
Vernon Public Utilities
cc: Ramzi Raufdeen (Vernon)
Lisa Gast (DWGP)
Attachment 6
www.caiso.com │ 250 Outcropping Way, Folsom, CA 95630 │ 916.351.4400 California Independent System Operator Corporation
Abraham Alemu
General Manager
Vernon Public Utilities
4305 Santa Fe Avenue
Vernon, California 90058
[email protected]
T:323-583-8811 extension 250
RE: CAISO Response to City of Vernon’s Notice of Intent to Withdraw from the Transmission Control Agreement (TCA)
Dear Abraham,
The CAISO received your letter dated February 7, 2022, indicating City of Vernon’s (“Vernon”) intent to withdraw from the Transmission Control Agreement (“TCA”), effective as of the expected termination date of your Existing Transmission Contracts (“ETC”) on October 7, 2022 (“Notice”). As detailed in your Notice, Vernon intends to withdraw from the TCA subject to Section 3.3.2 and 4.4.2 of the TCA, through the release of Vernon’s Entitlements to Southern California Edison Company (“SCE”) and Los Angeles Department of Water and Power (“LADWP”). SCE is currently a Participating TO (“PTO”) with the CAISO while LADWP is not. In accordance with the TCA, the sale, assignment, release, or transfer of an Entitlement to a non-Participating TO shall not occur without written consent from the CAISO.

The CAISO does not oppose the sale, assignment, release or transfer of Vernon’s Entitlements to LADWP, understanding that this will remove the associated capacity on the Adelanto – Victorville/Lugo transmission path from the operational control of the CAISO. The CAISO also recognizes that the withdrawal from the TCA shall only be effective following the receipt of all necessary regulatory approvals, including the filing and approval of the termination of Vernon’s Transmission Owner Tariff by the Federal Energy Regulatory Commission (“FERC”). The CAISO expects that such a filing at FERC shall be made in advance of any necessary amendments to the TCA required to affect this withdrawal, and all regulatory approvals shall be required to be in effect prior to the effective date of the withdrawal, which the CAISO requires to be the first day of a month.

Notwithstanding the above, the CAISO has merely completed a preliminary assessment of the impact of removing such entitlements from the CAISO operational control, and will need to perform additional due diligence to assess all necessary implementation steps, to be taken internally, or in conjunction with Vernon and LADWP. The CAISO anticipates and appreciates Vernon’s cooperation in this regard.

Considering the above, the CAISO requests Vernon to submit its formal notice of withdrawal from the TCA, which shall be posted on the CAISO public website in accordance with Section 3.3.4 of the TCA. Moreover, the CAISO recognizes the need for ongoing co-operation among CAISO and Vernon to facilitate the implementation of the withdrawal and change in TAC treatment. Please reach out to Riddhi Ray at [email protected] for any additional questions or concerns.

DocuSign Envelope ID: 7B3AB7A8-7EE1-4CB2-9D99-B3E96B717269 www.caiso.com
California Independent System Operator Corporation
Thank you
Debi Le Vine
Director, Infrastructure Contracts and Management
California Independent System Operator
DocuSign Envelope ID: 7B3AB7A8-7EE1-4CB2-9D99-B3E96B717269 Attachment 7
4305 Santa Fe Avenue, Vernon, California 90058
Telephone (323) 583-8811 Fax (323) 826-1407
Exclusively Industrial
May 5, 2022
California Independent System Operator Corporation
Regulatory Contracts
250 Outcropping Way
Folsom, California 95630
[email protected]
T: 916-351-4400
RE: City of Vernon’s Notice of Withdrawal from the Transmission Control Agreement (TCA) To Whom it may Concern:

Please accept this letter as City of Vernon’s Notice of Withdrawal from the Transmission Control Agreement (TCA), effective November 1, 2022.

The City of Vernon executed the TCA in 2001 and currently is a Participating Transmission Owner (PTO) only by virtue of its three Existing Transmission Contracts (ETCs) which it turned over to the CAISO’s Operational Control as Transmission Entitlements. Vernon intends to withdraw from the TCA subject to Section 3.3.2 and 4.4.2, through the release of Vernon’s Entitlements to Southern California Edison Company and Los Angeles Department of Water and Power as of October 7, 2022.

Vernon recognizes the need for ongoing cooperation among CAISO and Vernon to facilitate the implementation of the withdrawal and change in the TAC treatment. Please feel free to contact me with any additional questions or concerns.

Best,
Abraham Alemu
General Manager
Vernon Public Utilities
cc: Ramzi Raufdeen (Vernon)
Lisa Gast (DWGP)
Attachment 8
E-Tariff
[Notice of Cancellation]
[to be added]
City Council Agenda Item Report
Submitted by: Joanna Moreno
Submitting Department: Public Utilities
Meeting Date: June 21, 2022

SUBJECT
Services Agreement with Hill Brothers Chemical Company for Supply of Aqueous Ammonia for Malburg Generating Station
Recommendation:

A. Approve and authorize the City Administrator to execute a Services Agreement with Hill Brothers Chemical Company, in substantially the same form as submitted, for the supply of 19% aqueous ammonia for a total amount not to exceed $135,800, for a three-year term; and
B. Authorize a contingency amount of $13,500 in the event of price volatility, and grant authority to the City Administrator to amend the total contract value by an amount up to the contingency amount, if necessary.

Background:

On November 16, 2021, City Council adopted Resolution No. 2021-41 approving a Purchase and Sale Agreement (PSA) with Bicent (California) Malburg LLC for the acquisition of the Malburg Generating Station (MGS). Accordingly, the City now owns and operates the MGS power plant. Under the PSA, the City was required to assume or otherwise comply with certain vendor contracts previously entered by Bicent. As such, the City was obligated to assume a short-term contract, for the period of December 15, 2021 through June 30, 2022, for the supply of ammonia needed at MGS.

Ammonia is a critical component in the operation of MGS. It removes nitrogen oxides (NOx) that are produced during combustion. NOx is one of the main ingredients in the formation of ground-level ozone, which can cause respiratory problems, global warming, and other issues.

Thus, ammonia is vital for regulatory compliance of MGS.

On May 16, 2022, the City Administrator authorized the issuance of a Request for Bids (RFB) to seek bids for the Supply of 19% Aqueous Ammonia. In accordance with Vernon Municipal Code (VMC) Section 3.32.070 regarding competitive bidding, staff issued the RFB on May 16, 2022. An RFB notice was published in the local newspaper, the Huntington Park Bulletin. The RFB was also posted on the City’s procurement website, PlanetBids, and staff directly notified five prospective vendors. The Bid Deadline was May 31, 2022 and two bids were received.

The bid results are as follows:

1. Airgas Specialty Products, Inc. - $136,500

2. Hill Brothers Chemical Company (Hill Brothers) - $135,800 Hill Brothers was deemed the lowest and responsible bidder to supply the necessary aqueous ammonia.

Aqueous ammonia is currently a price-volatile commodity. Natural gas is the main input used to produce ammonia; therefore, ammonia prices are highly dependent on natural gas prices, which are also currently unstable. Due to the volatility that ammonia producers and suppliers are currently experiencing, and pursuant to VMC Section 3.32.220(C) regarding Special good governance reform contract terms and procedures, the RFB included a provision to allow for price adjustments based on the most appropriate publicly available index. Due to price volatility, VPU staff proposes a contingency amount of approximately ten percent (10%) of the total contract value.

The proposed agreement has been reviewed and approved as to form by the City Attorney’s Office.

Fiscal Impact:

The fiscal impact of the proposed three-year agreement is $135,800, plus the contingency amount of $13,500, for a total not-to-exceed amount of $149,300. Sufficient funds for procurement of aqueous ammonia are available in VPU Electric Fund Malburg Generating Station Generation Expense Account No. 055.9190.500230 for Fiscal Year (FY) 2022-23 and will be budgeted accordingly for FY 2023-24 and FY 2024-25 during the annual City budget process.

Attachments:

1. Services Agreement with Hill Brothers Chemical Company

SERVICES AGREEMENT BETWEEN THE CITY OF VERNON AND HILL BROTHERS CHEMICAL COMPANY FOR SUPPLY OF 19% AQUEOUS AMMONIA

COVER PAGE
Contractor: Hill Brothers Chemical Company
Responsible Principal of Contractor: Frank Alari, Regional Sales Manager Notice Information - Contractor: Hill Brothers Chemical Company 3000 E. Birch St., Suite 108
Brea, CA, 92821
Attention: Frank Alari, Regional Sales
Manager
Telephone: (714) 579-3333
Notice Information - City: City of Vernon
4305 Santa Fe Avenue
Vernon, CA 90058
Attention: Abraham Alemu,
General Manager of Public Utilities
Telephone: (323) 583-8811 ext. 250
Commencement Date: July 1, 2022
Termination Date: June 30, 2025
Consideration: Total not to exceed $135,800 (includes all applicable sales tax); and more particularly
described in Exhibit B
Records Retention Period Three (3) years, pursuant to Section 11.20

SERVICES AGREEMENT BETWEEN THE CITY OF VERNON AND HILL BROTHERS CHEMICAL COMPANY FOR SUPPLY OF 19% AQUEOUS AMMONIA
This Agreement is made between the City of Vernon, a California charter City and California municipal corporation (“City”), and Hill Brothers Chemical Company, a California corporation (“Contractor”).

The City and Contractor agree as follows:

1.0 EMPLOYMENT OF CONTRACTOR. City agrees to engage Contractor to perform the services as hereinafter set forth as authorized by the City Council on June 21, 2022.

2.0 SCOPE OF SERVICES.

2.1 Contractor shall perform all work necessary to complete the services set forth in the City’s Request for Bids issued on or about May 16, 2022, and titled Request for Bids for Supply of 19% Aqueous Ammonia, and Contractor's bid to the City ("Bid") dated May 26, 2022, Exhibit “A”, a copy which is attached to and incorporated into this Agreement by reference.

2.2 All services shall be performed to the satisfaction of City.

2.3 All services shall be performed in a competent, professional, and satisfactory manner in accordance with the prevailing industry standards for such services.

3.0 PERSONNEL.

3.1 Contractor represents that it employs, or will employ, at its own expense, all personnel required to perform the services under this Agreement.

3.2 Contractor shall not subcontract any services to be performed by it under this Agreement without prior written approval of City.

3.3 All of the services required hereunder will be performed by Contractor or by City approved subcontractors. Contractor, and all personnel engaged in the work, shall be fully qualified and authorized or permitted under State and local law to perform such services and shall be subject to approval by the City.

4.0 TERM. The term of this Agreement shall commence on July 1, 2022, and it shall continue until June 30, 2025, unless terminated at an earlier date pursuant to the provisions thereof.

5.0 COMPENSATION AND FEES.

5.1 Contractor has established rates for the City of Vernon which are comparable to and do not exceed the best rates offered to other governmental entities in and around Los Angeles County for the same services. For satisfactory and timely performance of

the services, the City will pay Contractor in accordance with the payment schedule set forth in Exhibit “B” attached hereto and incorporated herein by reference.

5.2 Contractor's grand total compensation for the entire term of this Agreement, shall not exceed $135,800 without the prior authorization of the City, as appropriate, and written amendment of this Agreement.

5.3 Contractor shall, at its sole cost and expense, furnish all necessary and incidental labor, material, supplies, facilities, equipment, and transportation which may be required for furnishing services pursuant to this Agreement. Materials shall be of the highest quality. The above Agreement fee shall include all staff time and all clerical, administrative, overhead, insurance, reproduction, telephone, air travel, auto rental, subsistence, and all related costs and expenses.

5.4 City shall reimburse Contractor only for those costs or expenses specifically approved in this Agreement, or specifically approved in writing in advance by City.

Unless otherwise approved, such costs shall be limited and include nothing more than the following costs incurred by Contractor:

5.4.1 The actual costs of subcontractors for performance of any of the services that Contractor agrees to render pursuant to this Agreement, which have been approved in advance by City and awarded in accordance with this Agreement.

5.4.2 Approved reproduction charges.

5.4.3 Actual costs and/or other costs and/or payments specifically authorized in advance in writing and incurred by Contractor in the performance of this Agreement.

5.5 Contractor shall not receive any compensation for extra work performed without the prior written authorization of City. As used herein, “extra work” means any work that is determined by City to be necessary for the proper completion of the Project, but which is not included within the Scope of Services and which the parties did not reasonably anticipate would be necessary at the time of execution of this Agreement. Compensation for any authorized extra work shall be paid in accordance with the payment schedule as set forth in Exhibit “B,” if the extra work has been approved by the City.

interest, which may be imposed by law and which arise from or are necessary for the performance of the Services by this Agreement.

6.0 PAYMENT.

6.1 As scheduled services are completed, Contractor shall submit to the City an invoice for the services completed, authorized expenses, and authorized extra work actually performed or incurred according to said schedule.

6.2 Each such invoice shall state the basis for the amount invoiced, including a detailed description of the services completed, the number of hours spent, reimbursable expenses incurred and any extra work performed.

6.3 Contractor shall also submit a progress report with each invoice that describes in reasonable detail the services and the extra work, if any, performed in the immediately preceding calendar month.

6.4 Contractor understands and agrees that invoices which lack sufficient detail to measure performance will be returned and not processed for payment.

6.5 City will pay Contractor the amount invoiced within thirty (30) days after the City approves the invoice.

6.6 Payment of such invoices shall be payment in full for all services, authorized costs, and authorized extra work covered by that invoice.

7.0 CITY'S RESPONSIBILITY. City shall cooperate with Contractor as may be reasonably necessary for Contractor to perform its services; and will give any required decisions as promptly as practicable so as to avoid unreasonable delay in the progress of Contractor's services.

8.0 COORDINATION OF SERVICES. Contractor agrees to work closely with City staff in the performance of Services and shall be available to City’s staff, consultants, and other staff at all reasonable times.

9.0 INDEMNITY. Contractor agrees to indemnify City, its officers, elected officials, employees and agents against, and will hold and save each of them harmless from, any and all actions, suits, claims, damages to persons or property, losses, costs, penalties, obligations, errors, omissions or liabilities (herein “claims or liabilities”), including but not limited to professional negligence, that may be asserted or claimed by any person, firm or entity arising out of or in connection with the work, operations or activities of Contractor, its agents, employees, subcontractors, or invitees, provided for herein, or arising from the acts or omissions of Contractor hereunder, or arising from Contractor’s performance of or failure to perform any term, provision, covenant or condition of this Agreement, except to the extent such

claims or liabilities arise from the gross negligence or willful misconduct of City, its officers, elected officials, agents or employees.

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 Agreement.
(1) 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.
(2) Contractor agrees to subrogate General Liability resulting from performance under this Agreement 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.
iv. Contractors Pollution Liability (CPL) policy limit shall provide coverage of no less than $1,000,000 per claim and in the aggregate. Coverage shall apply to bodily injury; property damage, including loss of use of damaged property or of property that has not been physically inured; cleanup costs; and costs of defense, including costs and expenses incurred in the investigation, defense, or settlement of claims.
(1) Contractor shall obtain, pay for, and maintain for the duration of the Agreement CPL insurance that provides coverage for liability caused by pollution conditions arising out of the operations of the Contractor.

Coverage shall be included on behalf of the insured for covered claims arising out of the actions of independent contractors. If the insured is using Subcontractors, the policy must include work performed “by or on behalf” of the insured.
(2) All activities contemplated in the Agreement shall be specifically scheduled on the CPL policy as “covered operation.” In addition, the policy shall provide coverage for the hauling of waste from the Project site to the final disposal location, including non-owned disposal sites. (3) The policy shall specifically provide for a duty to defend on the part of the insurer. The City of Vernon, its officers, employees and agents shall be added to the policy as additional insureds by endorsement. v. Contractor shall comply with the applicable sections of the California Labor Code concerning workers' compensation for injuries on the job. In addition, Contractor shall require each subcontractor to similarly maintain workers’ compensation insurance in accordance with the laws for California for all of the subcontractor’s employees. Compliance is accomplished in one of the following manners:
(1) Provide copy of permissive self-insurance certificate approved by the State of California; or
(2) 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 Agreement; or
(3) Provide a "waiver" form certifying that no employees subject to the Labor Code's Workers' Compensation provision will be used in performance of this Agreement.

vi. 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. vii. Insurance shall be placed with insurers with a Best's rating of no less than A-VIII. viii. Prior to commencement of performance, Contractor shall furnish City with a certificate of insurance for each policy. Each certificate is to be signed 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. ix. 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 Agreement 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 to Contractor, at City's option; (b) immediately terminate this Agreement and seek damages from the Agreement resulting from said breach; 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 to Contractor.

11.0 GENERAL TERMS AND CONDITIONS.

11.1 INDEPENDENT CONTRACTOR.

11.1.1 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, officer or employee of City and shall furnish such services in its own manner and method except as required by this Agreement, or any applicable statute, rule, or regulation. 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. City assumes no liability for Contractor’s actions and performance, nor assumes responsibility for taxes, bonds, payments, or other commitments, implied or explicit, by or for Contractor. Contractor shall be solely responsible for, and shall indemnify, defend and save City harmless from all matters relating to the payment of its employees, subcontractors and independent contractors, including compliance with social security, withholding and all other wages, salaries, benefits, taxes, exactions, and regulations of any nature whatsoever.

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.

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

11.3 OWNERSHIP OF WORK. All documents and materials furnished by the City to Contractor shall remain the property of the City and shall be returned to the City upon termination of this Agreement. 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 at no additional cost to the City. 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 Agreement. 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.

11.4 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.

11.6 WAIVER. The City's waiver of any term, condition, breach, or default of this Agreement 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. The delay or failure of either party at any time to require performance or compliance by the other of any of its obligations or agreements shall in no way be deemed a waiver of those rights to require such performance or compliance.

No waiver of any provision of this Agreement shall be effective unless in writing and executed by a duly authorized representative of the party against whom enforcement of a waiver is sought.

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

11.8 NO ASSIGNMENT. Contractor shall not assign or transfer this Agreement 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 Agreement. No assignment shall release the original parties from their obligations or otherwise constitute a novation.

11.9 COMPLIANCE WITH LAWS. Contractor shall comply with all Federal, State, County and City laws, ordinances, rules and regulations, which are, as amended from time to time, incorporated herein and applicable to the performance hereof. Violation of any law material to performance of this Agreement shall entitle the City to terminate the Agreement and otherwise pursue its remedies. Further, if the Contractor performs any work knowing it to be contrary to such laws, rules, and regulations Contractor shall be solely responsible for all costs arising therefrom.

11.10 ATTORNEY'S FEES. If any action at law or in equity is brought to enforce or interpret the terms of this Agreement, 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.

11.11 INTERPRETATION.

11.11.1 Applicable Law. This Agreement shall be deemed an agreement and shall be governed by and construed in accordance with the laws of the State of California. Contractor agrees that the State and Federal courts which sit in the State of California shall have exclusive jurisdiction over all controversies and disputes arising hereunder, and submits to the jurisdiction thereof.

11.11.2 Entire Agreement. This Agreement, including any exhibits attached hereto, constitutes the entire agreement 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).

11.11.3 Written Amendment. This Agreement 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 Agreement shall be of no force or effect.

11.11.4 Severability. If any provision in this Agreement is held by any court of competent jurisdiction to be invalid, illegal, void, or unenforceable, such portion shall be deemed severed from this Agreement, 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 Agreement.

11.11.5 Order of Precedence. In case of conflict between the terms of this Agreement and the terms contained in any document attached as an Exhibit or otherwise incorporated by reference, the terms of this Agreement shall strictly prevail. The terms of the City’s Request for Bids shall control over the Contractor’s Bid.

11.11.6 Construction. In the event an ambiguity or question of intent or interpretation arises with respect to this Agreement, this Agreement shall be construed as if drafted jointly by the parties and in accordance with its fair meaning. There shall be no presumption or burden of proof favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.

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

11.13 FORCE MAJEURE. Contractor shall be excused from performance hereunder during the time and to the extent that it is prevented from obtaining, delivering, or performing in the customary manner, by acts of God, fire, flood, earthquake, explosion, war (whether war is declared or not), terrorist threats or acts, riot, or other civil unrest with a direct impact on this Agreement, embargoes or blockades in effect on or after the date of this Agreement and not in effect at the time Contractor submitted its Bid, industry-wide strikes with a direct impact on this Agreement, adverse weather conditions not reasonably anticipatable given the location, loss of transportation facilities, lockout or commandeering of raw materials, products, plants or facilities by the government; provided, however, that Contractor shall use reasonable commercial efforts to avoid or remove such causes of nonperformance, and shall continue performance hereunder with reasonable dispatch whenever such causes are removed.

Contractor’s economic hardship, increases in tariffs, changes in market conditions, jurisdictional disputes, increased fuel costs, broken equipment, and equipment malfunction are not

considered Force Majeure Events. Contractor shall provide City satisfactory evidence that nonperformance is due to cause other than fault or negligence on its part.

11.14 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 Agreement, and its execution of this Agreement has been duly authorized.

11.15 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 Agreement, 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. 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.

11.16 NOTICES. Any notice or demand to be given by one party to the other must 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
Attention: Abraham Alemu, General Manager of Public Utilities 4305 Santa Fe Avenue
Vernon, CA 90058
If to the Contractor:

Hill Brothers Chemical Company
Attention: Frank Alari, Regional Sales Manager
3000 E. Birch St., Suite 108
Brea, CA 92821
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.

11.17 NO THIRD PARTY RIGHTS. This Agreement is entered into for the sole benefit of City and Contractor and no other parties are intended to be direct or incidental beneficiaries of this Agreement and no third party shall have any right or remedy in, under, or to this Agreement.

11.18 TERMINATION FOR CONVENIENCE (Without Cause). City may terminate this Agreement 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 Agreement 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.

11.19 DEFAULT. In the event either party materially defaults in its obligations hereunder, the other party may declare a default and terminate this Agreement by written notice to the defaulting party. The notice shall specify the basis for the default. The Agreement 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. In case of default by Contractor, the City reserves the right to procure the goods or services from other sources and to hold the Contractor responsible for any excess costs occasioned to the City thereby. Contractor shall not be held accountable for additional costs incurred due to delay or default as a result of Force Majeure. Contractor must notify the City immediately upon knowing that non-performance or delay will apply to this Agreement as a result of Force Majeure. At that time Contractor is to submit in writing a Recovery Plan for this Agreement. If the Recovery Plan is not acceptable to the City or not received within 10 days of the necessary notification of Force Majeure default, then the City may cancel this order in its entirety at no cost to the City, owing only for goods and services completed to that point.

11.20 TERMINATION FOR CAUSE. Termination for cause shall relieve the terminating party of further liability or responsibility under this Agreement, 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. If this Agreement is terminated as provided herein, City may require, at no additional cost to City, that Contractor provide all finished or unfinished documents, data, and other information of any kind prepared by Contractor in connection with the performance of Services under this Agreement. Contractor

shall be required to provide such document and other information within fifteen (15) days of the request.

11.20.1 Additional Services. In the event this Agreement is terminated in whole or in part as provided herein, City may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated.

11.21 MAINTENANCE AND INSPECTION OF RECORDS.

The City, or its authorized auditors or representatives, shall have access to and the right to audit and reproduce any of the Contractor's records to the extent the City deems necessary to insure it is receiving all money to which it is entitled under the Agreement and/or is paying only the amounts to which Contractor is properly entitled under the Agreement or for other purposes relating to the Agreement.

The Contractor shall maintain and preserve all such records for a period of at least three (3) years after termination of the Agreement.

Contractor shall, upon request, promptly deliver the records to the City of Vernon.

11.22 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.

11.23 HEADINGS. Paragraphs and subparagraph headings contained in this Agreement are included solely for convenience and are not intended to modify, explain or to be a full or accurate description of the content thereof and shall not in any way affect the meaning or interpretation of this Agreement.

11.24 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 Agreement 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.

11.25 EQUAL EMPLOYMENT OPPORTUNITY PRACTICES. Contractor certifies and represents that, during the performance of this Agreement, it and any other parties with whom it may subcontract shall adhere to equal employment opportunity practices to assure that applicants, employees and recipients of service are treated equally and are not discriminated against because of their race, religion, color, national origin, ancestry, disability, sex, age, medical condition, sexual orientation or 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 “C”. [Signatures Begin on Next Page].

IN WITNESS WHEREOF, the Parties have executed this Agreement 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

Hill Brothers Chemical Company, 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 BID
Since
1923
May 26, 2022
City of Vernon
City Clerk
4305 Santa Fe Ave
Vernon, CA 90058
•
O•
3000 East Birch Street ■Suite 108 ■Brea, CA 92821
714.998.8800 ■fax 714.998.6310 ■ 800.438.81 15 ■ hillbrothers.com To Whom It May Concern:

Hill Brothers would like to thank you for the opportunity to bid to supply chemicals to the City's power plant, Malburg Generating Station (MGS), located at 4963 Soto Street, Vernon, CA 90058.

Our company would like to offer this letter of intent to supply the City with our 19% Aqueous Ammonia of the highest purity. All elements of the Request for Bid have been reviewed and understood.

Hill Brothers Chemical is a Western United States based company that for over ninety years has been supplying a variety of chemical products to both the industrial and construction markets.

Upon award of the business, Hill Brothers agrees to sell and deliver Aqua Ammonia as proposed in Exhibit D Standard Form Agreement.

If you require any further information, please do not hesitate to contact me. ly,
Frank Alari
Regional Sales Manager
Hill Brothers Chemical Company
3000 E Birch St, Suite 108
Brea, CA 92821
[email protected]
(714) 579-3333
Corporate HQ
& International Sales
800.994.880
San Jose
800.257. 1920
So. California
840.438.85 15
Phoenix
602.272.9363
Tucson
520.795.935
North Salt Lake
8a0.336.39
City of Vernon

REQUEST FOR BIDS
SUPPLY OF 19% AQUEOUS AMMONIA

FOR THE

DEPARTMENT OF PUBLIC UTILITIES

CITY OF VERNON, CALIFORNIA
4305 SANTA FE AVENUE
VERNON, CA 90058

NOTICE INVITING BIDS

NOTICE INVITING BIDS
for the
Purchase of 19% Aqueous Ammonia
by the
City of Vernon, California
Bids are to be signed and submitted in TRIPLICATE. ONE ORIGINAL AND TWO COPIES of sealed bids ("Bids" and each, a "Bid") must be received prior to 2:00 p.m., May 31, 2022 ("Bid Deadline"), by the City Clerk, City of Vernon, 4305 Santa Fe Avenue, Venlon, CA 90058.

All Bids shall be enclosed in sealed envelopes, distinctly marked "Bid" with the title of the Bid and the bidder's name and address appearing on the outside (each, a "Bid Package").

Bid Packages should be mailed or delivered in person before 2:00 p.m. on the Bid Deadline.

LATE SUBMITTALS WILL NOT BE ACCEPTED. At the bid opening, the City Clerk shall open Bid Packages and acknowledge the receipt of Bids. Once all Bid Packages are opened and announced, the contents (collectively, the "Completed Bid Forms" and the uncompleted forms, the "Bid Forms") will be made available for public review. Except as set forth in Paragraph 17 ("Public Record"), the Completed Bid Forms, once removed from the Bid Packages by the City Clerk, will be a matter of public record.

The Bids shall be clearly titled. Copies of the Bid Forms are available at no charge at the Public Works Counter, City of Vernon, 4305 Santa Fe Avenue, Vernon, between 7 a.m. and 5:30 p.m., Monday tlu•ough Thursday.

City of Vernon Contact Person: Vernon Public Utilities
Attention: Michael Bonfiglio, Operations Manager
Phone: (323) 583 — 8811 ext. 307
Email: [email protected]
Mandatory Qualifications for Bidder:

A Bid may be rejected as non-responsive if the bidder ("Bidder") fails to meet the essential requirements for qualification.

General Scope:

Bidders shall furnish materials and/or equipment as specified above and under the below conditions:

Other Bidding Information:

Number of Contract days for delivery from date of placement of order: five (5) days.

NOTICE INVITING BIDS

2. Bidding Documents. Bids must be made on the Bid Forms) contained herein.

3. Acceptance or Rejection of Bids. The City reserves the right to reject any and all Bids, to award all or any individual part/item of the Bid, and to waive any infornlalities, irregularities or technical defects in such Bids and determine the lowest responsible Bidder, whichever may be in the best interests of the City. No late Bids will be accepted, nor will any oral, facsimile or electronic Bids be accepted by the City.

4. Bid Irrevocability. Bids shall remain open and valid for ninety (90) calendar days after the Bid Deadline.

Carlos R. Fandino, Jr.

City Administrator
Dated: (Approved as to form by City Attorney)
Published:

NOTICE INVITING BIDS
City of Vernon
Instructions for Bidders
Supply of 19% Aqueous Ammonia
For the Department of Public Utilities
City personnel with whom prospective Bidders will deal with are:

Michael Bonfiglio, Operations Manager, Vernon Public Utilities, 4305 Santa Fe Avenue, Vernon, CA 90058 (323) 583-8811 Ext. 307.

Bid opening date and time: May 31, 2022 at 2:00 p.m. ("Bid Deadline") Bids will be received and opened at the Office of the City Clerk, 4305 Santa Fe Avenue, Vernon, CA 9005 8.

Bids must be received by the City Clerk prior to the time set for Bid opening. A bid received by the City Cleik after the time set for the Bid opening is anon-responsive Bid and shall not be considered. Except as set forth in Paragraph 17 ("Public Record"), the Completed Bid Forms, once removed from the Bid Packages by the City Clerk, will be a matter of public record.

GENERAL BID REQUIREMENTS
To be considered, a Bidder must strictly follow the format for Bids in the specifications. Bids must be binding and firm. Any Bids may be withdrawn before Bid opening, bttt once opened and announced, Bids shall remain open and valid for ninety (90) calendar days after the Bid Deadline.

1. INTERPRETATION OF BIDDING DOCUMENTS AND ADDENDA
A. If any Bidder contemplating submitting a Bid is in doubt as to the true meaning of any part of the Notice Inviting Bids, these Instructions, the Bid Forms, or Addenda (as defined below) (together, the "Bidding Documents"), or who finds discrepancies, errors or omissions therein or who finds variances in any of the Bidding Documents with applicable law, such Bidder shall at once submit a written request for an interpretation or con•ection thereof to the City's representative identified in the Notice Inviting Bids, or other designated individual. All Bidders shall submit such written t•equests to the City not less than ten (10) calendar days prior to the Bid Deadline. The person or entity submitting the request shall be responsible for• its prompt delivery to the City's Contact Person identified in the Notice Inviting Bids.

Any response (i.e., interpretation or correction) will be made only by written addendum ("Addendum") issued by the City and a copy of such Addendum will be delivered to all Interested Bidders (defined below) of record. Any Addenda so issued must be acknowledged in the Bid and the cost of any additional equipment

INSTRUCTION TO BIDDERS
or modification thereto as a result of the Addenda shall be included in the Bid.

Bidder's failure to acknowledge receipt of all Addenda inay result in rejection of the Bid as nonl•esponsive. No person is authorized to render an oral interpretation or correction of any Bidding Documents and no Bidder may rely on any such oral interpretation or correction issued by the City. The City shall not be responsible for any other explanation or interpretation of the Bidding Documents, or for any oral instructions. City reserves the right to extend the Bid Deadline by issuing an Addendum to Interested Bidders no later than 72 hours prior to the Bid Deadline.

Bidders shall use complete sets of Bidding Documents in preparing Bids; City shall not assume responsibility for errors or misinterpretations resulting from the use of incomplete sets of Bidding Documents.

B. Copies of Addenda will be made available for inspection wherever Bidding Documents are on file for that purpose. Each Bidder shall ascertain prior to submitting a Bid that the Bidder has received all Addenda issued and the Bidder shall acknowledge their receipt in the Bid.

2. OBTAINING BIDDING DOCUMENTS
Bidder may secure Bidding Documents only from the location specified in the Notice Inviting Bids. City will maintain a list of persons who obtained a copy of these Bidding Documents ("Interested Bidders"). Only Interested Bidders will receive Addenda, if so issued.

BID FORMS —SUBMITTAL
A. The Bids shall be made on the forms provided herein with all blank spaces properly filled in.

B. The phraseology shall not be changed, and no additions shall be made to the items mentioned herein. Unauthorized conditions, exemptions, limitations, or provisions attached to a Bid will render it informal and may cause its rejection. All forms requiring specific information shall be completed with all applicable information for a Bid to be considered responsive.

C. Include all Bid Forms, properly executed, and intact on forms provided. Enclose the Bid Forms in a sealed envelope; type or print on the envelope "BIDS for" followed by the title and the date and time of the Bid Deadline, and the Bidder's name and address. The envelope may be mailed, hand delivered, or delivered by courier or package delivery service.

D. One Original Bid and two copies shall be mailed, hand delivered, delivered by courier or package delivery service to the City Clerk, City of Vernon, 4305 Santa Fe Avenue, Vernon, CA 90058.

E. Bids received after the Bid Deadline or at any place other than the Office of the City Clerk will not be considered.

INSTRUCTION TO BIDDERS

4. BID FORMS —AUTHORIZED SIGNATURES
A. The full name, business address, zip code, and business telephone number, with area code of the individual, partnership, joint venture, or corporation submitting the Bid shall be typewritten or legibly printed on the Bid Forms. The Bidder shall sign the form with his/her usual wet ink signature.

B. Sole Proprietorship: An individual shall sign.

C. Partnership (General or Limited): A partner shall sign for a partnership; the partner shall give the names and addresses of all partners.

D. Corporation: An officer shall sign for a corporation. The corporate name must be attested by the corporate seal. The names and titles of the president and all officers of the corporation who are authorized to sign the Bid Forms must be listed in an authenticated Incumbency Certificate signed by the corporate secretary. A signature other than a corporate officer's will be accepted only if an authenticated Incumbency Certificate is attached.

E. Joint Venture: Bidders shall use the appropriate sections) listed above in B-D, based on their applicable situation.

BID FORMS —SCHEDULE OF BID PRICES
A. The Bidder shall include in his/her Bid prices) any and all expense or costs that may be necessary to complete the delivery in accordance with the requirements of the Contract. The cost of all mobilization and/or preparatory work for the shipment of equipment and/or supplies 111USt be included in the Bid, and no extra compensation will be paid to Bidder.

B. The Bidder shall state for each item on the Schedule of Bid Prices form, in clearly legible figures, the Base Bid, the alternates, and the unit price and item total or lump SUIll, as the case may be, for which he/she proposes to supply materials and equipment. Bids must not contain any erasures, interlineations, strike-throughs or other corrections unless the same are suitably authenticated by affixing in the margin immediately opposite such erasure or correction the initials of the persons) signing the Bid. If any Bid, or portion thereof, is determined by the City to be illegible, ambiguous or inconsistent, City may reject such a Bid as being nonresponsive.

C. In the case of a unit price item, the amount set forth, as the item total shall be the product of the estimated quantity times the unit price Bid. In the event of a discrepancy between the unit price Bid and the item total, the unit price shall prevail; however, if the unit price is ambiguous, unintelligible, or uncertain for any cause, or is omitted, or is the same amount as the entry for the item total, then the item total shall prevail and shall be divided by the estimated quantity for the item and the price thus obtained shall be the unit price. Where so indicated by the makeup of the Bid Form, sums shall be expressed in both words and figures, and in

INSTRUCTION TO BIDDERS
case of discrepancy between the two, the amount written in words shall govern.

D. All requested Alternates, if any, shall be Bid. See the Schedule of Bid Prices for more information and the list of Bid Alternates, if any. If no change in the Base Bid is required, enter "No Change."
E. For price-volatile commodities, Bidder has the option to submit the indicated Unit Price which shall be the initial or basis price of the commodity at contract start, subject to the provisions herein. Pursuant to Vernon Municipal Code Section 3.32.220 (C), any compensation rates to be paid by the City may not be increased during the term of a contract except where external factors significantly affect costs and rates during the term of the contract, and any such increase must be directly tied to the most appropriate index or cost-ofliving rate or a pass through of increased costs charged to the contractor.

Bidder shall provide a proposed price adjustment calculation based on the United States Department of Labor's Bureau of Labor Statistics, Producer Price Index (PPI), for Chemicals and Allied Products, Industrial Chemicals (WPU061) or other appropriate, publicly available index. It is the City's sole discretion to determine whether any proposed index, other than the one specified herein, is appropriate for price adjustments. If a different index is proposed, the proposed index shall be submitted with the bid. Bidder shall provide an example calculation of applied price adjustment. The data used for any proposed adjustment shall be the most current at the time of proposed adjustment. To be clear, proposed price adjustments can be positive or negative to pricing.

F. Bidder shall indicate the period of proposed price adjustment (e.g., quarterly, yearly, etc.). The period of proposed price adjustment shall not be less than quarterly.

G. Invoices shall include basis price, current indices and the proposed price adjustment calculation. Price adjustments must be mutually agreed upon.

6. BIDDER'S STATEMENTS OF QUALIFICATIONS
A. Each Bidder shall be required to complete, execute and submit with its Bid, the form entitled "Bidder's Statement of Qualifications."
B. A responsible Bidder is a Bidder who has demonstrated the attribute of trustworthiness, as well as quality, fitness, capacity and experience to satisfactorily perform fully the requirements of the contract documents. In selecting the lowest responsible Bidder, consideration will be given not only to the Bidder's financial standing but also to the general competency of the Bidder for the performance of the work covered by the Bid. By submitting a Bid, each Bidder agrees that the City, in determining the successful Bidder and its eligibility for the award, may consider the Bidder's experience with similar types of furnishing and delivery performance under other contracts, financial condition, reputation in the industry, and other

INSTRUCTION TO BIDDERS
factors which could affect the Bidder's fulfillment of the request.

7. BIDDER'S AFFIDAVIT OF NON-COLLUSION
An Affidavit ofNon-Collusion in the form attached to this Notice Inviting Bids as Exhibit A, shall be signed under penalty of perjury, certifying that the Bid is not the result of and has not been influenced by collusion. Bidder shall submit this form with its Bid. Any Bid made without such affidavit, or believed to be made in violation of the requirements set forth in the affidavit form, may be rejected.

8. INSURANCE REQUIREMENTS
The Bidder shall submit to its insurance company or insurance agent the Insurance Requirements in this Specification and the Contract Documents. The insurance company's underwriter or agent must complete the Insurance Requirements documentation which states that the insurer's underwriter or agent will furnish the City with the required insurance documents within fourteen (14) days after the Bidder's having been notified of the Contract's award. The Bidder shall submit this form with its Bid. Any Bid made without this statement, or made with an incomplete statement, may be rejected.

9. PRICES AND PAYMENTS
Approximate quantities
comparing Bids, and no
therein, actual or relative.

INSTRUCTION TO BIDDERS
listed in the Schedule of Bid Prices are estimates given for claim shall be made against the City for excess or deficiency

10. SUBSTITUTIONS
No requests for substitution of any material, device, product, equipment, fixture, form, or type of construction shall be considered by City prior• to award of the Contract. Bidders shall submit all requests for substitution and substantiating data, within five (5) calendar days from the date of the notice awarding the Contract. Authorization of a substitution is solely within the discretion of the City.
(a) Brand Name or Egztal. Specifications may refer one or more brand name products followed by the words "or equal." "Or equal" submissions will not necessarily be rejected because of minor differences in design, construction, or features which do not affect the suitability of the product for its intended use, except in those instances where the product is designated to snatch others in use on a particular itnproveinent either completed or in the course of completion. The burden of proof that the product is equal for the intended use is on the Bidder.
(b) Items Must be New and Current. Unless otherwise specified, the items offered shall all be new and the latest model, make, or manufacture, and free from defects and imperfections.
(c) Bids on Alte~•~Tate Items. When any Bidder offers an alternate item for consideration, the Bidder will give complete specifications, name the brand and demonstrate that the alternate item is equal. The City reserves the right to reject any alternate item which it determines is not equally suitable for the specified purpose. The burden of proof is on the Bidder.

11. RETURN OF IMPROPER BIDS
Bids submitted after the Bid Deadline are non-responsive and shall be returned to the Bidder unopened. Oral, telephonic, telegraphic, facsimile or electronically transmitted Bids shall not be considered unless the Notice Inviting Bids expressly permits such means of transmittal.

12. WITHDRAWAL OF BIDS
Bidder- may withdraw its Bid either personally or by written request any time prior to the scheduled Bid Deadline by notice to the City's Contact Person designated in the Notice Inviting Bids. If such notice is written, it shall be signed by the Bidder and shall be datestainped and time-stamped by the City upon receipt. Withdrawn Bids Inay be resubmitted before the Bid Deadline provided that they are in full conformance with these Instructions to Bidders. Once submitted and opened, all Bids are irrevocable, except as otherwise provided by law. Requests for withdrawal of Bids after the Bid Deadline shall be made only in accordance with California Public Contract Code § 5100, et seg. Bidder agrees by submitting a Bid that such Bid shall remain open, is irrevocable, and may not be modified, withdrawn, or cancelled for a period of ninety (90) days after award of the Contract.

INSTRUCTION TO BIDDERS

13. OPENING AND EVALUATION OF BIDS
A. Bid Opening and Tabulation. The Bids shall be opened and read in public after the Bid Deadline has expired at the time and location listed in the Notice Inviting Bids. A tabulation of all Bids received will be available for public inspection at the Office of the City Clerk, 4305 Santa Fe Avenue, Vernon, CA during regular business hours for a period of not less than thirty (30) calendar days following the Bid Deadline. The City reserves the right to accept or reject any or all Bids and be the sole judge regarding the suitability of the products, services or supplies offered; and/or to waive any in•egularities or informalities in any Bids or in the bidding process. The City further reserves the right to purchase all or fewer than all items or quantities of each item listed in the Bidding Documents. The award of the Contract, if made by the City, shall be to the lowest responsive and responsible Bidder. If Bid Alternate Items are called for, the lowest Bid shall be determined according to Paragraph 15 below.

B. Evaluation of Bids.

1. Mandatory Qualifications. A Bid shall be rejected as non-responsive if the Bidder fails to document in the Bid that Bidder meets the essential requirements for qualification described in the Notice Inviting Bids

2. Responsive Bid. A responsive Bid is a Bid which conforms, in all material respects, to the Bidding Requirements and Bidding Documents.

3. Responsible Bidder. A responsible Bidder is a Bidder who has demonstrated the attribute of trustworthiness, as well as quality, fitness, capacity and experience to satisfactorily perform fully the requirements of the Bidding Documents.

4. Competency of Bidders. In selecting the lowest responsible Bidder, consideration will be given not only to the financial standing but also to the general competency of the Bidder for the delivery of the equipment covered by the Bid including, but not limited to, the experience of the Bidder in supplying and delivery of equipment and materials for public agencies. By submitting a Bid, each Bidder agrees that the City, in determining the successful Bidder and its eligibility for the award, may consider the Bidder's experience with similar types of delivery of equipment or materials, conduct and performance under other contracts, financial condition, reputation in the industry, and other factors which could affect the Bidder's fulfillment of the request.

A. Tie Bids. If two or more Bids meeting the specifications and other requirements of the Bidding Documents are tied for low price, the Bids will be treated as follows:
(i) if there is a significant difference in the responsibility of the

INSTRUCTION TO BIDDERS
Bidders (including ability to deliver in the quantity and at the time required), the award will be made to the Bidder who is deemed to be the most responsible.
(ii) if there is no significant difference in the responsibility of the Bidders, but there is a difference in the quality of the equipment or materials offered, the Bid offering the best quality of services will be accepted.
(iii) if there is no significant difference in the responsibility of the Bidders and no difference in the quality of the items offered, the Bid offering the earliest delivery time will be accepted in any case in which the Bid information specified that the needs of the City require delivery as early as possible. In all other cases, delivery time will not be considered in making awards so long as the Bidder states delivery will occur not later• than the time specified in the Bid information as the latest acceptable delivery time.
(iv) if the Bids quoting the same price are equal in every respect, the award inay be split or made by lot.

14. AWARD OF CONTRACT
The City reserves the right to reject any or all Bids and to waive any or all information or technical defects, as the interest of the City may require. Award of Contract or rejection of Bids will be made by the City within ninety (90) calendar days following the Bid Opening.

15. BASIS OF AWARD
A. A standard form services agreement, attached hereto as Exhibit D, will be awarded to the lowest responsive and responsible Bidder meeting all requirements set forth in these Bidding Documents. Bidders responding to this Notice Inviting Bids are strongly advised to review all the terms and conditions of the Agreement.

B. City reserves the right in its sole discretion to select any, all, or none of the Bid Alternates at the time of award of the Contract, regardless of whether such Bid Alternates were used in the analysis to determine the lowest Bid.

16. EXECUTION OF STANDARD FORM SERVICES AGREEMENT
Within fourteen (14) calendar days after being notified by City that it has been awarded the Agreement, Bidder shall deliver to the City the following documents:

A. Two (2) copies of the Agreement, properly executed by Bidder and, if Bidder is a corporation, evidence of its corporate existence and that the persons signing the Agreement are authorized to do so. City will provide Bidder with the appropriate signature requirements.

INSTRUCTION TO BIDDERS
B. Properly executed policies of all of the following insurance documents pursuant to Section 10 of the standard form services agreement: (a) the Commercial General Liability Insurance, (b) the Automotive Liability Insurance, and (c) Professional Liability, if required, and (e) the corresponding endorsements for each policy in accordance with the requirements set forth in Article 12 of the General Conditions.

In the event that the fourteenth calendar day falls on Saturday, Sunday, a legal holiday for the State of California, or on days when City Hall is closed, the aforesaid documents shall be delivered by the following Working Day.

After receipt of said documents within said time period or any extension thereof granted by the City, the City shall execute the Agreement and return a fully executed copy to Bidder for its files.

17. PUBLIC RECORDS
City seeks to conduct its business openly. Upon opening, all Bids shall become a matter of public record and shall be regarded as public, with the exception of those elements of each Bid that are identified by the Bidder and plainly marked as "trade secret," "confidential," or "proprietary," including any Statement of Qualifications and financial statements submitted by Bidders. Each element of a Bid which a Bidder desires not to be considered a public record must be clearly marked as set forth above, and any blanket statement (i.e. regarding entire pages, documents, or other, non-specific designations) shall not be sufficient and shall not bind the City in any way whatsoever. If City receives a request from a third party to make a Bid available for inspection and copying, the City will notify the Bidder of the request. If a Bidder instructs the City that the information is not to be released, City will withhold the information, provided, the Bidder expeditiously seeks a protective order from a court of competent jurisdiction to prevent such release. If disclosure is required under the California Public Records Act or otherwise by law (despite the Bidder's request for confidentiality), the City shall not in any way be liable or responsible for- the disclosure of any such records or part thereof.

Bidder shall indemnify, defend (including Bidder's providing and paying for legal counsel for City), and hold harmless City, its officers, agents, employees, and representatives from and against all liability, claims, suits, demands, damages, Vines, penalties, costs, or expenses arising out of or alleging City's refusal to publicly disclose one or more records that Bidder identifies as protectable, or asserts is protectable.

18. SPECIAL CITY REQUIREMENTS
Special City forms and their instructions are an integral part of these specifications and failure to submit same may be grounds, in the sole discretion of the City, for rejection of any Bidder.

A. Equal Employment Opportunity in Contracting. The City of Vernon is committed to a policy of equal opportunity in contracting. Qualified firms including small businesses and businesses owned by women, minorities, and disabled persons are encouraged to submit bids or proposals. Bidders expressly agree to comply

INSTRUCTION TO BIDDERS
with the City's ordinances and regulations regarding Equal Opportunity Employment as well as regulations that may be mandated by the source of the funds supporting the Contract. Bidder certifies and represents that during the performance of this Contract, it and any other parties with whom it may subcontract shall adhere to equal employment opportunity practices to assure that applicants, employees and recipients of service are treated equally and are not discriminated against because of their race, religion, religious belief, color, national origin, citizenship, ancestry, disability, sex, age, medical condition, pregnancy, sexual orientation or marital status. Bidder certifies that it will not maintain any segregated facilities.

Bidder shall comply with all applicable Federal and California laws including, but not limited to, the California Fair Etnployment and Housing Act (California Government Code Section 12900, et seq.), California Labor Code Section 1735, and The Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.). Bidder shall require like compliance by all Subcontractors employed on the Work.

19. BID PROTEST PROCEDURES
A. Any Bidder submitting a Bid directly to the City and eligible for award of the Contract inay file a protest if the Bidder complies with all of the following requirements and conditions:

1. The Bid protest is in writing;

2. A protest based upon alleged defects or improprieties in the Bidding Documents is filed with the City prfor to the Bid Deadline;

3. All other protests are to be filed and received by the City no more than eve (5) calendar days following the City's notice of intent to award the Contract; and

4. The written Bid protest sets forth, in detail, all grounds for the Bid protest, including without limitation: all facts, supporting documentation, legal authorities, and argument in support of the grounds for the Bid protest. All factual contentions must be supported by competent, admissible, and credible evidence.

B. Any matters not set forth in the written Bid protest will be deemed waived. Any Bid protest not conforming to the foregoing requirements and conditions will be rejected by the City as invalid.

C. Bid Dispute Indemnification. In the event of a Bid dispute based upon the Bidder's submission of this Bid and the City's acceptance of same, the Bidder shall indemnify, defend (with counsel acceptable to City), and hold harmless the City, its City Council members, employees, and agents from liability, claims, demands, damages, and costs arising therefrom if such dispute or action arises solely upon the award of a Contract in compliance with federal, state, and local laws.

INSTRUCTION TO BIDDERS
[END OF DOCUMENT]

INSTRUCTION TO BIDDERS
Hill Brothers Chemical Company

STATEMENT OF QUALIFICATIONS
Hill Brothers Chemical is a Western United States based company that for over ninety years has been supplying a variety of chemical products to both the industrial and construction markets including Ammonia Products, Calcium Chloride, Magnesium Hydroxide Products, Bleach & Chlorine Products, Acid &Alkali Products, Decking &Sealers on our Desert Brand Product line.

Our Expertise
Hill Brothers Chemical Co. has been committed to the chemical industry since 1923, we know that supporting more than just product supply is what the ammonia industry requires. We provide environmentally safe high quality Pump Out services for bulk containers, storage tanks, and refrigeration systems.

Our Vision
We believe that a caring culture can lead to greater value and make the roads of those we touch smoother today than they were yesterday. Hill Brothers serves to make our part of the world cleaner, healthier, safer, and more pleasant through our quality chemical products, personalized service, and creative solutions in areas where we have, or can develop, leverageable expertise.

Our Team
Every Hill Brothers' employee carries a responsibility for his or her contribution to the overall quality effort. Collectively, our quality goal is total customer satisfaction. How each person performs his or her job directly impacts the satisfaction of our customers. Input of the quality our product can be taken from every perspective, thus keeping our strongest asset, our customer, as our first priority.

AFFIDAVIT OF NON-COLLUSION BY CONTRACTOR

STATE OF CALIFORNIA
ss

COUNTY OF S )
~~!'~tn°Jt.

Patricia Santana ,being first duly sworn deposes
and says that he/she is Corporate Secretary
(Insert "Sole Owner", "Partner", "President, "Secretary", or other proper title) of Hill Brothers Chemical Company
(Insert name of bidder)
who submits herewith to the City of Vernon a bid/proposal; That all statements of fact in such bidlproposal are true; That such bid/proposal was not made in the interest of or on behalf of any undisclosed person, partnership, company, association, organization or corporation; That such bid/proposal is genuine and not collusive or sham; That said bidder has not, directly oz• indirectly by agreement, communication or conference with anyone attempted to induce action prejudicial to the interest of the City of Vernon, or of any other bidder or anyone else interested in the proposed contract; and further That prior to the public opening and reading of bids/proposals, said bidder:
a. Did not directly or• indirectly, induce or solicit anyone else to submit a false or sham bid/proposal;
b. Did not directly or indirectly, collude, conspire, connive or agree with anyone else that said bidder or anyone else would submit a false or sham bid/proposal, or that anyone should refrain from bidding or withdraw his/her bid/proposal;
c. Did not, in any manner, directly or indirectly seek by agreement, communication or conference with anyone to raise or fix the bidlproposal price of said bidder or of anyone else, or to raise or fix any overhead, profit or cost element of hislher bidlproposal price, or of that of anyone else; d. Did not, directly or indirectly, submit his/her bid/proposal price or any breakdown thereof, or the contents thereof, or divulge information or data relative thereto, to any corporation, partnership, company, association, organization, bid depository, or to any member or agent thereof, or to any individual or group of individuals, except the City of Vernon, or to any person or persons who have a partnership or other financial interest with said bidder in his/her business.

I certify ru;uer penalty of perjury that the above information is correct , .

E}~._ ~~-c~k~~, Title: ~ ,v c C~ o c c~~ e_ c c e ~~c
~f •.~ vate:_;~ ~~~ ao as A~tach~d Ca{irorn~~
No~~ry Form
Per C~jli~~~r~ia La~~:~
March 2013

CALIFORNIA JURAT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document, to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA
COUNTY OF o~~~ }
Subscribed and sworn to (or affirmed) before me on this ~ ~~ day of ~1 Date
by ~ C l ~. ~G. ~` t~~
Name of Signers
~~'~
Month Year
proved to me on the basis of satisfactory evidence to be the person) who appeared before me. 5~-~`-.-` Tti ROSS LEE GUiNQON
r j Notary Public -California ~
Z ~ 'c `- ~ Orange County ~
r Commission ~ 2262025
~ `L ' r My Comm. Expires Nov 7, 2022 ~°<t~p4H~ Signature:

Signature of Notary Public
Seal
Place Notary Seal Above
___________moQad000a~000a~oo_____________mao~000~oo ppT10NAL ~~~~~~~~~~a~_____mQQaQaa~QoaQa~Qoaoao~~e___________ Though this section is optional, completing this information can deter alteration of the document or fraudulent attachment of this form to an unintended document.

Description of Attached Docume ~~t
Title or TyNe of Document: 'G~ J r
Document Date: ~ ~"' C~
Number of Pages:

Signers) Other Than Named Above:
~kx► ~ PvCC~J.`~
Since
1923
HILL BROTHER . o.
1675 NORTH MAIN STREET • ORANGE, CALIFORNIA 92867-3499
(714) 998-8$00 FAX: (714) 998-6310
www. h i l l brot hers. co m
I, Thomas F. James, Chairman of the Board of Hill Brothers Chemical Company a Corporation, organized and existing under the laws of the State of California, do hereby certify that, at a meeting of the Board of Directors of said corporation, duly held on the 12th day of December, 2019, at which a quorum was present and acting throughout, the following resolution was adopted:
"Let it be resolved that the Board of Directors is hereby authorized and approved to grant signing and authority to conduct business to any one of the following person(s):

Mr. Adam C. Hill, President and CEO
Mr. Thomas F. James, Chairman and CFO
Ms. Patricia Santana, Corporate Secretary
The foregoing signing and authority granted shall include, but shall not be limited to, the execution of Deeds, powers of attorney, transfers, assignments, contracts, obligations, certificates, and other instruments of whatever nature entered into by this Corporation.

The undersigned hereby certifies that she is the duly elected and qualified Secretary and the custodian of the records and seal of Hill Brothers Chemical Company, Inc. a corporation duly formed pursuant to the laws of the state of California, and that the foregoing is a true record of a resolution duly adopted at a regular meeting of its Board of Directors and that said meeting was held in accordance with state law and the Bylaws of the above-named Corporation on Thursday, December 12, 2019 and that said resolution is now in full force and effect without modification or rescission."
IN WITNESS WHEREOF, I have executed my name as Secretary and have hereunto affixed the corporate seal of the above-named Corporation this 12~' day of December, 2019.

Thomas F, nes
Chairman of the Board
J ~ , ~,~
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133 }1)1)i~~ ~~ ~'>
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Patricia Santana '~;~~ ,~' ~ ~> >> ~
Corporate Secretary ~ ' ~:~'~ '-' ~ ~'' `' ~'~
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SO. CALIFORNIA •SAN JOSE •PHOENIX • TUCSON e NORTH SALT LAKE Client#: 28852 HILLB
ACORD,~., CERTIFICATE OF LIABILITY INSURANCE DATE (MM/DD/YYYY) 5/26/2022
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS

CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.

IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed.

If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer any rights to the certificate holder in lieu of such endorsement(s).

PRODUCER
Allen Lawrence &Assoc. LLC
NAMEACT Veronica Sognalian
P"o"E eXc - g18 710-3420 F'°`X 818 710-3421 : ,vc, No
License OK07568
E-MIAILo
,aooRess: [email protected]
7033 Owensmouth Avenue
Canoga Park, CA 91303-2006
INSURERS) AFFORDING COVERAGE NAIC #
iNsuReR a : Westchester Surplus Lines Ins Co 10172
INSURED iNsuRER s : Berkshire Hathaway Homestate Insurance 20044 Hill Brothers Chemical Company
INSURER C Ace American Ins. Co. 22667
3000 E. Birch St; Suite 108
Brea, CA 92821

INSURER D

INSURER E

INSURER F
COVERAGES CERTIFICATE NUMBER: REVISION NUMBER:

THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS

CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.

INSR
LTR TypE OF INSURANCE ADDL
INSR
SUER

VWD POLICY NUMBER

POLICY EFF

MM/DD/YYYY

POLICY EXP

MM/DD/YYYY LIMITS
A X COMMERCIAL GENERAL LIABILITY G2714598A009 8/01 /2021 08/01 /202 EACH OCCURRENCE $ ~ ~OOO~OOO CLAIMS-MADE a OCCUR PREMISESa oNcur ence 530 ~~~
X BI/PD Ded: MED EXP (Any one person) $ 25,000
PERSONAL 8 ADV INJURY S ~ ,000,OOO
GEN'L AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE S 3~000~000 PROPOLICY X JECT ~ LOC PRODUCTS -COMP/OP AGG S 3~000~000 OTHER: S
(`, AUTOMOBILE LIABILITY H08455582009 08/01 /2021 08/01/202 COMBINED SINGLE LIMIT Ea accident S5,~~~,~~~
X ANY AUTO BODILY INJURY (Per person) S

OWNED SCHEDULED
AUTOS ONLY AUTOS BODILY INJURY (Per accident) $

PROPERTY DAMAGE
X Per accident ~

HIRED NON-OWNED

AUTOS ONLY X AUTOS ONLY
A 627146028009 08/01 /2021 UMBRELLA LIAR X occuR 08/01/202 EACH OCCURRENCE $~ Q ~~~ 000 ~( AGGREGATE $~ O OOO OOO EXCESS LIAR CLAIMS-MADE Excess Over

DED X RETENTION SO GL/POL/WC ONLY S

B WORKERS COMPENSATION

AND EMPLOYERS' LIABILITY
ANY PROPRIETOR/PARTNER/EXECUTIVE Y ~ N
OFFICER/MEMBER EXCLUDED? ~ N I A
HIWC320429 6/01/2022 06/01/2023 X PER OTHE.L. EACH ACCIDENT $~ OOO OOO (Mandatory in NH) E.L. DISEASE - EA EMPLOYEE $~,000,~0~ If yes, describe under
DESCRIPTION OF OPERATIONS below E.L. DISEASE -POLICY LIMIT 5~ ,000,OOO A Contractors G2714598A009 8/01/2021 08/01/2022 $1,000,000 Ea Pollution Pollution Liab Condition
Ded: $10,000 Ea Pol Con
DESCRIPTION OF OPERATIONS /LOCATIONS /VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required) The City of Vernon, its directors, commissioners, officers, employees and volunteers are included as Additional Insured under the General Liability and Automobile policies as their interest may appear, as required by written contract. Waiver of Subrogation applies to the Workers' Compensation policy. ~:tK I Itl(:A I t F1VLUtK (:AN(:tLLA I IUN
City of Vernon
4305 Santa Fe Ave
Los Angeles, CA 90058

SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE

THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS.

AUTHORIZED REPRESENTATIVE
~,~
O 1988-2015 ACORD CORPORATION. All rights reserved.

ACORD 25 (2016/03) 1 of 1 The ACORD name and logo are registered marks of ACORD #S470796/M469659 VLS
CHUBS°
Named Insured Endorsement Number
Hill Brothers Chemical Company
Policy Symbol Policy Number Policy Period Effective Dete of Endorsement G2714598A009 08/01 /202 t~ 08/01 /2022 08/01 /2021
Issued By (Name of Insurance Company)
Westchester Surplus Lines Insurance Company
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

ADDITIONAL INSURED ENDORSEMENT
OWNERS, LESSEES ORCONTRACTORS —SCHEDULED PERSON OR ORGANIZATION This endorsement modifies insurance provided under the following:

COMMERCIAL GENERAL LIABILITY COVERAGE

CONTRACTOR'S POLLUTION LIABILITY COVERAGE
SCHEDULE:

Name of Person or Organization:

Where required by written contract.
(If no entry appears above, information required to complete this endorsement will be shown in the Declarations as applicable to this endorsement.)
A. SECTION II -WHO IS AN INSURED is amended to include as an insured the person or organization shown in the Schedule, but only with respect to liability arising out of your ongoing operations performed for that insured.

B. With respect to the insurance afforded to these additional insureds, the following exclusion is added:

2. Exclusions
This insurance does not apply to bodily injury or property damage occurring af#er:
(1) All work, including materials, parts or equipment furnished in connection with such work, on the project (other than service, maintenance or repairs) io be performed by or on behalf of the additional insured (s) at the site of the covered operations has been completed; or (2) That portion of your work out of which the injury or damage arises has been put to its intended use by any person or organization other than another contractor or subcontractor engaged in performing operations for a principal as a part of the same project.

ENV-3100 (08-04) includes copyrighted material of Insurance Services Office, Inc. with its permission Page 1 of 1 CHUBB~
Named Insured Endcxsomont tJumbOr
Hiil Brothers Chemical Company
Policy SymboV Policy Numbor Policy Period Efloctivo Dato of Endorsement G2714598A009 08/01/2021 t~ 08/01/2022 08/01/2021
Issued By (Npmn of Insure~ce Company)
Westchester Surplus Lines Insurance Company
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

ADDITIONAL INSURED ENDORSEMENT —PRODUCTS-COMPLETED OPERAT[ONS HAZARD THIS ENDORSEMENT MODIFIES INSURANCE PROVIDED UNDER THE FOLLQWING:

COMMERCIAL GENERAL LIABILITY COVERAGE PART

CONTRACTOR'S POLLUTION LIABILITY COVERAGE PART

SCHEDULE
Where required by written contract.
(If no entry appears above, information required to complete this endorsement will be shown in the Declarations as applicable to this endorsement.)
Section II —Who Is An Insured is amended to include as an additional insured the persons) or organ~zation(s) shown in the Schedule, but only with respect to liability for bodily injury or property damage caused, in whole or in part, by your work performed for that additional insured and included in the products-completed operations hazard.

All other terms and conditions remain the same.

AUTOMATIC ADDITIONAL INSURED ENDORSEMENT
Number
Hill Brothers Chemical Company
Policy Symbol Policy Number Policy Period Fff~;ctive Date of ~ndprsement H08455582009 08/01 /2021 t0 08/01 /2022 08/01 /2021
Issued By (Name of Insurance Company)
ACE American Insurance Company
Insert the policy number.. The remainder of the information is to be completed only when this endorsement is issued subsequent to the pceparaGon of the policy THIS ENDQRSEAAENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

This endorsement modifies insurance provided under the following:

BUSINESS AUTO COVERAGE FORM

MOTOR CARRIER COVERAGE FORM
SECTION II -LIABILITY COVERAGE, WHO IS AN INSURED is amended to include as an "insured" any person or organization you are required in a written contract ar agreement to name as an Additional Insured on your policy but only for "bodily injury" or "property damage" to which this insurance applies if the "~ccidenl" is caused by:
1, You, while using a covered "auto" or

2. Any other person, while using a covered "auto" with your permission.

The insurance provided by this endorsement shall be subject to the following additional condition:

1. The Limit of Insurance provided for the Additional Insured shall not be greater than those required by contract and, in no event, shall the policy Limits of Insurance be increased by the contract. 2, All insuring agreements, exclusions, terms and conditions of the policy shall apply to the coverage (s) provided to the Additional Insured, and such coverage shall not be enlarged or expanded by reason of the contract.

3. Coverage provided by this endorsement shall be excess over any other valid and collectible insurance available to the Additional Insured (s) whether primary, excess, con(ingent or on any other basis unless the contract specifically requires that this insurance be primary or you request that it apply on a primary basis prior to loss.

Authorized Representative
DA-6Z04a (06/14) Page 1 of 1
106
WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY WC 00 03 13 (Ed. 4-84)

WAIVER OF OUR RIGHT TO RECOVER FROM OTHERS ENDORSEMENT
We have the right to recover our payments from anyone liable for an injury covered by this policy. We will not enforce our right against the person or organization named in the Schedule. (This agreement applies only to the extent that you perform work under a written contract that requires you to obtain this agreement from us.) This agreement shall not operate directly or indirectly to benefit anyone not named in the Schedule.

Schedule
Blanket Waiver
Person/Organization: Blanket Waiver -Any person or organization for whom the Named Insured has agreed by written contract to furnish this waiver.

Job Description
All Operations
This endorsement changes the policy to which it is attached and is effective on the date issued unless otherwise stated. (The information below is required only when this endorsement is issued subsequent to preparation of the policy.) Endorsement Effective: 06/01/2022 Policy No.: HIWC320429 Endorsement No.:

Insured: Hill Brothers Chemical Company Premium $
Insurance Company: Berkshire Hathaway Homestate Ins Co
WC 00 03 13 Countersigned by
(Ed. 4-84)
O 1983 National Council on Compensation Insurance

SPECIFICATIONS AND SCOPE OF SERVICES

1. General
a. Vendor to provide bulk 19% Ac~ueous Ammonia, transportation, and delivery to the City's power plant, Malburg Generating Station (MGS), located at 4963 Soto Street, Vernon, CA 90058.
b. Nineteen percent (19%) Aqueous Ammonia prices to be quoted per gallon.

Quote shall include itemized freight per trip charge and taxes. Quote shall include a certified analysis of the aqueous ammonia production lot.

2. Specifications
. a. Formula: 19% Aqueous Ammonia (Ammonium Hydroxide)
b. Percent weight: 18.5% to 19.5%
c. Specific gravity at 60 degrees Fahrenheit: 0.9309 to 0.9278 at 60°F d. Appearance: colorless, clear, free from particulate.

Anal sis Result S eci~cation
Ammonia 19% 18.5% — 19.5%
Content/Assa
Appearance Colorless, clear, free Colorless, clear, free from articulate from articulate
Specific Gravity 0.9282 60°F 0.9309 — 0.9278 @
60°F
e. Aqueous ammonia shall contain no substances in quantities capable of producing deleterious effects on the generation equipment when properly applied.
f. Aqueous ammonia shall not contain specific impurities more than the following limits, measured in total (dissolved and non-dissolved) form, and unfiltered.

Im urities Maximum Limit
Residue after i nition 0.002 % 4-ounce sam le
Carbon dioxide CO2 0.002 % 4-ounce sain le
Chloride (C1) 0.5 m
Phos hate PO4 2 m
Total Sulfur (as SOa) 2 ppm
Nitrate NO3 2 m
Heavy metals (as Pb) 0.5 m
Iron Fe 0.2 m
Substance-reducin erman anate To ass test
g. The vendor is responsible for all testing and documentation required to assure that the product delivered meets all specifications. The supplier shall provide the delivery location with a current Safety Data Sheet (SDS) prior to or concurrent with the delivery of the product. The City will not accept any product without proper documentation. The City reserves the right to sample

INSTRUCTION TO BIDDERS
and test all products at time of delivery. Visible signs of contamination at time of delivery will result in the product being rejected. Should laboratory testing determine the delivered product failed to meet specifications, the City shall have the option of having the supplier remove the inadequate chemical from the storage tank and replace with chemical that meets the specifications.

Supplier is responsible for removing non-compliant chemical and replacing it with fresh chemical meeting the specifications.

3. Transportation and Delivery
a. All shipments of Aqueous Ammonia shall conform to US Department of Transportation (DOT) regulations for marking and handling. Transportation and delivery of Aqueous Ammonia shall be performed in accordance with all applicable laws, regulations, and comply with the City's site-specific ammonia delivery safety plans and procedures.
b. As part of the California Energy Commission (CEC) Decision, which oversees various operational requirements of the facility, the selected vendor will be required to utilize the specified and approved delivery route contained therewithin. Condition of Certification Trans-8 states "The City of Vernon shall only use the preferred and alternate truck travel routes for deliveries of aqueous ammonia to the MGS site. The preferred route shall be from Interstate 710, exiting at the Bandini Boulevard. Trucks will then travel west along Bandini Boulevard, south on Soto Avenue, and finally west on 50th Street to the MGS. In the event that conditions are such that the City and CEC determine that the preferred route is not the safest route, the City shall direct aqueous ammonia deliveries to the MGS along the following alternative route.

Delivery trucks shall travel along Interstate 5, exiting at Garfield Avenue.

Trucks will then travel west along Telegraph Road, south on Garfield Avenue, west on Bandini Boulevard, south on Soto Avenue, and finally west on 50th Street to the MGS."
c. Deliveries shall be made between 7:00 a.m. and 5:00 p.m. Mondays through Fridays, excluding holidays, unless agreed upon by both parties in advance of delivery.
d. Upon placement of each order, Aqueous Ammonia shall be delivered to the City within five (5) calendar days, excluding holidays. This product will be used in a highly regulated process. Prompt delivery is required. The supplier of the product must provide prior notification if inconsistencies in delivery times are expected for any reason.
e. The City estimates 15 deliveries per year with an estimated delivery quantity of 3,500 to 4,500 gallons of Aqueous Ammonia per delivery. f. The product must be delivered by equipment that has the capability to safely transfer the product to the facility's Aqueous Ammonia storage tanks. Vendor will provide and connect all hoses for Aqueous Ammonia transfer and storage tank vapor removal.
g. Drivers and delivery personnel must demonstrate safe work practices appropriate to the product they are delivering and are expected to provide their own Personal Protective Equipment (PPE). Delivery personnel must have the

INSTRUCTION TO BIDDERS
ability to inspect the tank before and after delivery to detect any problems with the tank.
h. All delivery personnel shall be trained about the specific properties and hazards of the product and utilize appropriate PPE while at the City's facility. i. Payment will be based on per-gallon-delivered for the Aqueous Ammonia.

INSTRUCTION TO BIDDERS
5~ ._ ~ .~
i,
' (.}~~~:,~ 7~ ~~.~a~:~ u~ ~~cirztc~s~~~r C~t)Jtlll-11~1t1L'~t~ CI:RTIFICAT'E OF ANA1~'Y~1S
Aqua AmmoniA
NATIONAL CEMENT CO. MAY 26, 2022
ti~~lci "('u: t?atr:
5 MILES rAST OF 1.5 bFf HWY 13B 30156-052419
~flt~) ~C~O: ~iAll'~l r:
i..~~~<< ~~~~~: LEBEC, CA 93243 x`t., ~,~#: 104912
t~river : CESAR ACHTMANN Se1~~ # : 25~ 0
~.~~l,~ : 4047 ~~a~ ~ : 2511
•r~•~<<~~~ i.« : A014207 s~~~~ # : 2512
Tzinkci• t,ic ; 4BG 1310
P~tcica,~„e Quaniify
BULK 6,000
This is to certify thHt the above shipment wus produced in com~lianre ~sith current Goad rnan~fi~cturin;; ('r:~cHces (c~;i~7N) end meets ~►r rxcecd+ the sts~nd~rds set forth hcluH. inctudin~ VSi' Standard !~0 sii~d the food Cfiemlcat ('udex standards (ACC) a~lfcn ~onrentrutions ure bet~~•cen 27'% and 30'% anhvdruus ummuuiH. .~. - ~~~ ,~ Aqua Ammonif~ Analysis° Snccificatiun (°/n Ott_, b~- ~~~r.) Assay. "S~ N! t; Uy w~.

19.2 19.0"U min ar 29.45`io (2ti"f3c:) ii~in
S~~c;ci(ic: Gravity, c~~rrc;c4c.~a tc~ (~0,;1; .9~$
p~,~,~aranc~ Clear. Water White
~'arbar~ Dioxide 2~ n~ax ~3Q p~.,m
C"Itil~~ri:fc 0.5 mux •=().i pp~t~
f~ luc~ri~l~ U.S mix • ~U.~ ppm
-I~;~vy Mr~als (a, f'b) U.5 iiiax • ~t).5 n{'m
Irc~t~ 0.2 tnax ~=0? ~~~in
('I~o~~~hatr 2.0 ntex `:~,Q (~f'm
~ulfatc U.S n~ax •-:i).S slim
Rcaicluc un Ibiiitiuii 20 max `~~ hpt~~
SllL~ti(Jtll'C R~(!LlCIIIL I~CC(11i1I1t;811ii1C Piss ~'~~~4 Maxitnutn use ►c~•ct for Amrrtoiiium llydroxide under NSI~/ANSI Slendar<i L~U f 1 Amn►oniuni N,ydroxidc l9`Y~~ Maximum ue+e 26 Ong/L NSE 'lmmoniu:n fiydrvxide 2U`i~ Mex~mum usr 25 m~{/L Amrtioniun~ Hydr~~~icir. ?9.454, ~1~sximu~n nsc 17 mg/L 0 Tested by Htll }iruthCi'S C'hcit~tC~tl (~0.

Arrunonium li,ydro~idc 26'bc h1a.+citnuin usr 17u~;t/L
_._ ..._ _ :
1~~mr~ni~:m I~it~droxidc 2Q.S~s~, ^ hlnximum use 7.0 rn~/1, •:,;t~r~~~:t%, •iVSF rcrtific:iti~>n f+~r 7.•~.S`r:~ r~p~slirs to Agti:a :1n~~notii~ prod~ircd xt tl:i~ Sfir~ .JO,c r il~' only.
('t~. ~I'll)I.:N77~IL: '1'lti,s C't~r1r/icutf- r~~.411cr/j~.ci,~ .ti•/lnulr! c►~~~t' hc~ u.cc~r! jur tfr~~ rtrslr~nre~r'.~~ iulc>>•itul rise. ~l~ AQUA TECH
f h~~ c~ Signature Title
15U l 7 E C1.3rk Ave a C:iiy ot~ li7diistry, C'.aliforni~ 917 5 (8U())-322-~ 1 l9 • 626} 333-2251 •FAQ; (f~?(~) 33(.)-~),'i;ii flttp://hilibrulhc:l~s.coi7~
E~c.v (~. Obi/'?:3/lUl:i

SCHEDULE OF BID PRICES
The estimated quantities indicated in the Schedule of Bid Prices are estimates for bidding purposes only. The City may decrease or increase supply requirements as needed.

Item Description Units of Quantity Unit Price Total
No. Measurement
1 Supply of 19% Aqueous Gallons 70,000 $1.94 $135,800
Ammonia
WRITTEN TOTAL One Hundred Thirty Five Thousand Eight Hundred For price-volatile commodities, the indicated Unit Price shall be the initial or basis price of the commodity at contract start, subject to the provisions herein. Pursuant to Vernon Municipal Code Section 3.32.220(C), any compensation rates to be paid by the City may not be increased during the term of a contract except where external factors significantly affect costs and rates during the term of the contract, and any such increase must be directly tied to the most appropriate index or cost-of-living rate or a bass through of increased costs charged to the contractor. Bidder has the option to submit a proposed price adjustment calculation based on the United States Department of Labor's Bureau of Labor Statistics, Producer Price Index (PPI), for Chemicals and Allied Products, Industrial Chemicals (WPU061) or other appropriate, publicly available index. It is the City's sole discretion to determine whether any proposed index, other than the one specified herein, is appropriate for price adjustments. If a different index is proposed, the proposed index shall be indicated in the bid. An example calculation of price adjustment must be submitted as part of the bid. If an example price adjustment calculation is not provided, the unit price will be assumed to be fixed for the entire contract term. To be clear, price adjustment can be positive or negative to pricing. Bidder shall indicate the period of proposed price adjustments (e.g., quarterly, yearly, etc.). The period of proposed price adjustment shall not be less than quarterly. The data used for any proposed adjustment shall be the most current at the time of proposed adjustment. Price adjustments must be mutually agreed upon.

All other work items, labor, materials, tools, and incidentals which are not specifically listed in the above bid items but are necessary to complete the work, are considered to be included in the above bid items.

In the case of a unit price item, the amount set forth as the item total shall be the product of the estimated quantity multiplied by the unit price bid. In the event of a discrepancy between the unit price bid and the item total, the unit price shall prevail; however, if the unit price is ambiguous, unintelligible, or uncertain for any cause, or is omitted, or is the same amount as the entry for the item total, then the item total shall prevail and shall be divided by the estimated quantity for the item and the price thus obtained shall be the unit price. Incase of discrepancy between the total expressed in figures and the written total, the amount written in words shall govern.

INSTRUCTION TO BIDDERS

EXHIBIT B

SCHEDULE

SCHEDULE OF BID PRICES
The estimated quantities indicated in the Schedule of Bid Prices are estimates for bidding purposes only. The City may decrease or increase supply requirements as needed.

INSTRUCTION TO BIDDERS

EXHIBIT C

EQUAL EMPLOYMENT OPPORTUNITY

PRACTICES PROVISIONS
A. Contractor certifies and represents that, during the performance of this Agreement, 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 Agreement, 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 Agreement shall be construed in any manner as to require or permit any act which is prohibited by law.

City Council Agenda Item Report
Submitted by: Joanna Moreno
Submitting Department: Public Utilities
Meeting Date: June 21, 2022

SUBJECT
Services Agreement with Nalco Water for Chemical Water Treatment Services for Malburg Generating Station
Recommendation:

A. Approve and authorize the City Administrator to execute a Services Agreement with Nalco Water, in substantially the same form as submitted, for Water Treatment Chemical Services for the Malburg Generating Station for a total amount not to exceed $1,124,717, for a three-year term; and
B. Authorize a contingency amount of $112,470 in the event of price volatility, and grant authority to the City Administrator to amend the total contract value by an amount up to the contingency amount, if necessary.

Background:

On November 16, 2021, City Council adopted Resolution No. 2021-41 approving a Purchase and Sale Agreement with Bicent (California) Malburg LLC for the acquisition of the Malburg Generating Station (MGS). Accordingly, the City now owns and operates the MGS power plant. To avoid any damage to crucial equipment, and to avoid any operational disruptions as a result of the transfer of ownership of MGS, Vernon Public Utilities (VPU) identified an urgent need to leverage the services of a contractor with expertise and ability to provide the chemicals and equipment to produce the exact water chemistry required at MGS.

Consequently, on December 15, 2021, City Council approved a short-term agreement, for the period of December 15, 2021 through June 30, 2022 for the procurement of chemical water treatment services at MGS. This provided staff sufficient time to conduct its own analysis to determine how to best meet the needs of the MGS operations in the long-term.

MGS requires chemical water treatment services consisting of chemical supply, chemical program oversight, and staff training. The power plant equipment requires exact water chemistry tailored to MGS. Any adverse changes to the water chemistry can lead to significant deterioration of vital system components. As such, procuring the services of an experienced, competent consultant is crucial to a successful, cost-effective chemical program.

On May 16, 2022, the City Administrator authorized the issuance of a Request for Proposals (RFP) to seek proposals from consulting firms to provide Chemical Water Treatment Services for MGS. In accordance with Vernon Municipal Code Section 3.32.080 regarding competitive selection, staff issued the RFP on May 16, 2022. The RFP was posted on the City’s procurement website, PlanetBids, and staff directly notified five prospective consulting firms.

As a result of the outreach efforts, two proposals were received on the May 26, 2022 deadline.

Proposals from Nalco Water (Nalco) and KAAM Group were thoroughly examined by an Evaluation Committee in which an assessment of each proposal was made based on experience, qualifications, references, responsiveness, and cost.

Based on the evaluation results, Nalco demonstrated the highest competence to provide the necessary chemical water treatment services. Accordingly, staff recommends the Council approve the proposed agreement with Nalco.

Nalco provided two different pricing options for the City’s consideration: (1) higher commodity chemistry base cost with annual adjustments to all pricing elements, and (2) lower commodity chemistry base cost with quarterly adjustment to commodity chemistry pricing and annual adjustments to pricing for specialty chemicals and for services. All adjustments would be based on the most appropriate publicly available indices. VPU staff analyzed the options and determined that option number two is the most cost-effective option. Due to potential volatility in price indices, VPU staff proposes a contingency amount at approximately ten percent (10%) of the total contract value.

The proposed agreement has been reviewed and approved as to form by the City Attorney’s Office.

Fiscal Impact:

The fiscal impact of the proposed three-year agreement is $1,124,717, plus the contingency amount of $112,470, for a total not-to-exceed amount of $1,237,187. Sufficient funds for water treatment chemical services are available in the Electric Fund, Malburg Generating Station Generation Expense Account No. 055.9190.500230 for Fiscal Year (FY) 2022-23. Funds will be appropriately budgeted in FY 2023-24 and FY 2024-25.

Attachments:

1. Services Agreement with Nalco Water

SERVICES AGREEMENT BETWEEN THE CITY OF VERNON AND NALCO

COMPANY LLC FOR CHEMICAL WATER TREATMENT SERVICES FOR THE

MALBURG GENERATING STATION

COVER PAGE
Contractor: Nalco Company LLC
Responsible Principal of Contractor: Ravi Raghavapudi, Vice President Notice Information - Contractor: Nalco Company LLC
1601 West Diehl Rd.

Naperville, Illinois 60563
Attention: Industrial Sector
General Counsel
Notice Information - City: City of Vernon
4305 Santa Fe Avenue
Vernon, CA 90058
Attention: Abraham Alemu,
General Manager of Public
Utilities
Telephone: (323) 583-8811 ext. 250
Commencement Date: July 1, 2022
Termination Date: June 30, 2025
Consideration: Total not to exceed $1,124,717 (includes all applicable sales tax); and more particularly
described in Exhibit C
Records Retention Period Three (3) years, pursuant to Section 11.20

SERVICES AGREEMENT BETWEEN THE CITY OF VERNON AND NALCO

COMPANY LLC FOR CHEMICAL WATER TREATMENT SERVICES FOR THE

MALBURG GENERATING STATION
This Agreement is made between the City of Vernon, a California charter City and California municipal corporation (“City”), and Nalco Company LLC, a Delaware limited liability company (“Contractor”).

The City and Contractor agree as follows:

1.0 EMPLOYMENT OF CONTRACTOR. City agrees to engage Contractor to perform the services as hereinafter set forth as authorized by the City Council on June 21, 2022.

2.0 SCOPE OF SERVICES.

2.1 Contractor shall perform all work necessary to complete the services set forth in the City’s Request for Proposals issued on or about May 16, 2022, and titled Request for Proposals for Chemical Water Treatment Services for the Malburg Generating Station, and Contractor's proposal to the City ("Proposal") dated May 25, 2022, Exhibit “A”, a copy which is attached to and incorporated into this Agreement by reference.

2.2 All services shall be performed to the reasonable satisfaction of City.

2.3 All services shall be performed in a competent, professional, and reasonably satisfactory manner in accordance with the prevailing industry standards for suchservices.

3.0 PERSONNEL.

3.1 Contractor represents that it employs, or will employ, at its own expense, all personnel required to perform the services under this Agreement.

3.2 Contractor shall not subcontract any services to be performed by it under this Agreement without prior written approval of City.

4.0 TERM. The term of this Agreement shall commence on July 1, 2022, and it shall continue until June 30, 2025, unless terminated at an earlier date pursuant to the provisions thereof.

5.0 COMPENSATION AND FEES.

5.1 For timely performance of the services, the City will pay Contractor in accordance with the payment schedule set forth in Exhibit “C” attached hereto and incorporated herein by reference.

5.2 Contractor's grand total compensation for the entire term of this Agreement, shall not exceed $1,124,717 without the prior authorization of the City, as appropriate, and written amendment of this Agreement. Contractor will provide notice to City if the limit is approached. In the event that the parties are not able to agree to amendment to adjusts the limit, Contractor shall be free to cease performing when the limit is reached.

5.4 City shall reimburse Contractor only for those costs or expenses specifically approved in this Agreement, or specifically approved in writing in advance by City.

Unless otherwise approved, such costs shall be limited and include nothing more than the following costs incurred by Contractor:

5.4.2 Approved reproduction charges.

5.4.3 Actual costs and/or other costs and/or payments specifically authorized in advance in writing and incurred by Contractor in the performance of this Agreement.

5.5 Contractor shall not receive any compensation for extra work performed without the prior written authorization of City. As used herein, “extra work” means any work that is determined by City to be necessary for the proper completion of the Project, but which is not included within the Scope of Services. Compensation for any authorized extra work shall be paid in accordance with the payment schedule as set forth in Exhibit “C,” if the extra work has been approved by the City.

5.6 Licenses, Permits, Fees, and Assessments. Contractor shall obtain, at Contractor’s sole cost and expense, such licenses, permits, and approvals as may berequired by law for the performance of the services required by this Agreement. Contractor shall have the sole obligation to pay for any fees, assessments, and taxes (other than sales or use taxes, which will be invoiced as a separate item), plus applicable penalties and interest, which may be imposed by law and which arise from or are necessary for the performance of the Services by this Agreement. Contractor will not be responsible for any licenses or permits associated with the City’s operation of its facilities.

6.0 PAYMENT.

6.2 Each such invoice shall state the basis for the amount invoiced,including a detailed description of the services completed, the number of hours spent, reimbursable expenses incurred and any extra work performed.

6.3 Contractor shall also submit a progress report with each invoice that describes in reasonable detail the services and approved extra work, if any, performed in the immediately preceding calendar month.

6.4 Contractor understands and agrees that invoices which lacksufficient detail to measure performance will be returned and not processed for payment.

6.5 City will pay Contractor the amount invoiced within thirty (30) days after the City approves the invoice.

6.6 Payment of such invoices shall be payment in full for all services, authorized costs, and authorized extra work covered by that invoice.

9.0 INDEMNITY. Contractor agrees to indemnify City, its officers, elected officials, employees and agents against, and will hold and save each of them harmless from, any and all actions, suits, claims, losses, costs, penalties, obligations, errors, omissions or liabilities for injury to persons or damages to tangible property (herein “claims or liabilities”), including but not limited to professional negligence, that are asserted or claimed by any third party to the extent arising out of or in connection with the negligence or willful misconduct in work, operations or activities of Contractor, its agents, employees, subcontractors, or invitees, provided for herein, except to the extent such claims or liabilities arise from the gross negligence or willful misconduct of City, its officers, elected officials, agents or employees.

10.0 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 Agreement, including any extensions thereto. The policies shall state that they afford primary coverage to the extent of the liabilities assumed by Contractor hereunder. i. Automobile Liability with minimum limits of at least $1,000,000 combined single limit, including owned, hired, and non-owned liability coverage. ii. Contractor agrees to subrogate automobile liability resulting from performance under this Agreement 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 Contractor under the performance of the services. iii. General Liability with minimum limits of at least $2,000,000 per occurrence and $4,000,000 aggregate on an occurrence basis. 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 to the extent of the liabilities assumed by Contractor hereunder. (1) 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.
(2) Contractor agrees to subrogate General Liability resulting from performance under this Agreement 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 Contractor under the performance of the services. iv. Professional Errors and Omissions coverage in a sum of at least $1,000,000, 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 Agreement. v. Contractor shall comply with the applicable sections of the California Labor Code concerning workers' compensation for injuries on the job. In addition, Contractor shall require each subcontractor to similarly maintain workers’ compensation insurance in accordance with the laws for California for all of the subcontractor’s employees. Compliance is accomplished in one of the following manners:
(1) Provide copy of permissive self-insurance certificate approved by the State of California; or
(2) 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 Agreement; or
(3) Provide a "waiver" form certifying that no employees subject to the Labor Code's Workers' Compensation provision will be used in performance of this Agreement.
vi. 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 toCity. vii. Insurance shall be placed with insurers reasonably acceptable to the City. viii. Prior to commencement of performance, Contractor shall furnish City with a certificate of insurance for each policy. Each certificate is to be signed by a person authorized by that insurer to bind coverage on its behalf. The certificate(s) must be in a form approved by City, acting reasonably. City may require complete, certified copies of any or all policies in the event of a covered claim.
ix. 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 Agreement 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 to Contractor, at City's option; (b) immediately terminate this Agreement and seek damages from the Agreement resulting from said breach; or (c) selfinsure 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 to Contractor.

11.0 GENERAL TERMS AND CONDITIONS.

11.1 INDEPENDENT CONTRACTOR.

11.1.2 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.

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 Agreement. 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.

11.5 RESPONSIBILITY FOR ERRORS. Contractor shall be responsible for its work and results under this Agreement. Contractor, when requested, shall furnish clarification and/or explanation as may be required by the City, regarding any services rendered under this Agreement at no additional cost to City. In the event that an error or omission attributable to Contractor occurs, then Contractor shall, at no cost to City, provide all necessary design drawings, estimates and other Contractor professional services necessary to rectify and correct the matter to the reasonable satisfaction of City and to participate in any meeting required with regard to the correction. The goods and services do not cover, and Contractor makes no warranties with respect to, water system biohazards from waterborne pathogens, including but not limited to Legionella bacteria. Contractor shall not be liable for any failure caused by City’s failure to follow Contractor’s written instructions. CONTRACTOR DISCLAIMS ALL OTHER

WARRANTIES, EXPRESS OR IMPLIED, AND DISCLAIMS THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

No waiver of any provision of this Agreement shall be effective unless in writing and executed by a duly authorized representative of the party against whom enforcement of a waiver is sought.

11.7 SUCCESSORS. This Agreement shall inure to the benefit of, and shall be binding upon, the parties hereto and their respective heirs, successors, and/orassigns.

11.11 CONSEQUENTIAL DAMAGES DISCLAIMER.

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR

OTHERWISE, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY SPECIAL, CONSEQUENTIAL OR INDIRECT DAMAGES.

11.12 CONTRACTOR-OWNED EQUIPMENT TERMS. The additional terms and conditions applicable to Contractor-owned equipment provided to City on a rental or usage basis and the additional terms applicable to Contractor’s digital programs are set forth in Exhibit E.

11.13 INTERPRETATION.

11.13.1 Applicable Law. This Agreement shall be deemed an agreement and shall be governed by and construed in accordance with the laws of the State of California. Contractor agrees that the State and Federal courts which sit in the State of California shall have exclusive jurisdiction over all controversies and disputes arising hereunder, and submits to the jurisdiction thereof.

11.13.2 Entire Agreement. This Agreement, including any exhibits attached hereto, constitutes the entire agreement 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).

11.13.3 Written Amendment. This Agreement 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 Agreement shall be of no force or effect.

11.13.4 Severability. If any provision in this Agreement is held by any court of competent jurisdiction to be invalid, illegal, void, or unenforceable, such portion shall be deemed severed from this Agreement, 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 Agreement.

11.13.5 Order of Precedence. In case of conflict between the terms of this Agreement and the terms contained in any document attached as an Exhibit or otherwise incorporated by reference, the terms of this Agreement shall strictly prevail. The terms of the City’s Request for Proposals shall control over the Contractor’s Proposal.

11.13.6 Construction. In the event an ambiguity or question of intent or interpretation arises with respect to this Agreement, this Agreement shall be construed as if drafted jointly by the parties and in accordance with its fair meaning. There shall be no presumption or burden of proof favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.

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

11.15 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 Agreement, and its execution of this Agreement has been duly authorized.

11.16 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 Agreement, 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. 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.

11.17 NOTICES. Any notice or demand to be given by one party to the other must 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
Attention: Abraham Alemu, General Manager of Public Utilities 4305 Santa Fe Avenue
Vernon, CA 90058
If to the Contractor:

See the address and contact information on the first page of the Services Agreement.

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.

11.18 NO THIRD PARTY RIGHTS. This Agreement is entered into for the sole benefit of City and Contractor and no other parties are intended to be direct or incidental beneficiaries of this Agreement and no third party shall have any right or remedy in, under, or to this Agreement.

11.19 TERMINATION FOR CONVENIENCE (Without Cause). City may terminate this Agreement in whole or in part at any time, for any cause or without cause, upon thirty (30) calendar days' written notice to Contractor. If the Agreement 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.

11.20 DEFAULT. In the event either party materially defaults in its obligations hereunder, the other party may declare a default and terminate this Agreement by written notice to the defaulting party. The notice shall specify the basis for the default. The Agreement shall terminate unless such default is cured before the effective date of termination stated in such notice, which date shall be no sooner than thirty (30) days after the date of the notice. In case of default by Contractor, the City reserves the right to procure the goods or services from other sources and to hold the Contractor responsible for any excess costs occasioned to the City thereby. Contractor shall not be held accountable for additional costs incurred due to delay or default as a result of Force Majeure. Contractor must notify the City immediately upon knowing that non-performance or delay will apply to this Agreement as a result of Force Majeure.

11.21 TERMINATION FOR CAUSE. Termination for cause shall relieve the terminating party of further liability or responsibility under this Agreement, 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) direct costs incurred by the City in obtaining substitute performance. If this Agreement is terminated as provided herein, City may require, at no additional cost to City, that Contractor provide all finished or unfinished documents, data, and other information of any kind prepared by Contractor in connection with the performance of Services under this Agreement. Contractor shall be required to provide such document and other information within fifteen (15) days of the request.

11.21.1 Additional Services. In the event this Agreement is terminated in whole or in part as provided herein, City may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated.

11.22 MAINTENANCE AND INSPECTION OF RECORDS.

The Contractor shall maintain and preserve all such records for a period of at least three (3) years after termination of the Agreement.

The Contractor shall, upon request, promptly deliver the records to the City of Vernon or reimburse the City for all reasonable and extra costs incurred in conducting the audit at a location other than the City of Vernon.

11.23 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.

11.24 HEADINGS. Paragraphs and subparagraph headings contained in this Agreement are included solely for convenience and are not intended to modify, explain or to be a full or accurate description of the content thereof and shall not in any way affect the meaning or interpretation of this Agreement.

11.25 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 Agreement 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 onecalendar week in violation of the provisions of Sections 1810 through 1815 of the California LaborCode 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.

11.26 EQUAL EMPLOYMENT OPPORTUNITY PRACTICES. Contractor certifies and represents that, during the performance of this Agreement, it and any other parties with whom it may subcontract shall adhere to equal employment opportunity practices to assure that applicants, employees and recipients of service are treated equally and are not discriminated against because of their race, religion, color, national origin, ancestry, disability, sex, age, medical condition, sexual orientation or 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”. [Signatures Begin on Next Page].

IN WITNESS WHEREOF, the Parties have executed this Agreement 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

Nalco Company LLC, a Delaware
Limited Liability Company
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
May 25, 2022
Rich Olsen
City of Vernon
Assistant General Manager of Generation and Operations
4305 Santa Fe Avenue
Vernon, CA 90058
Dear Mr. Olsen,
Nalco is pleased to respond to the City of Vernon’s RFP for chemical water treatment services for the Malburg Generating Station (MGS). Please accept the attached document as Nalco’s proposal for such services.

Nalco is the world leader in specialty water treatment chemistry. As such, Nalco has a rich history of innovation, and expertise in the treatment of power generation systems. MGS has benefited over the years from this level of expertise and the commitment to quality offerings.

Nalco has been servicing the MGS water treatment with excellent results. We believe that the programs in place have proven themselves to be effective via inspections and routine testing. At the same time, Nalco has continued to find ways to further optimize the programs that are in place to assure maximum asset life, compliance with environmental and safety requirements, while minimizing the cost of operations.

Please note that in the proposal, a creative approach has been taken with the pricing of the commodity chemistry. A significant discount can be taken on this part of the business, if quarterly pricing adjustments are allowed based upon the commodity market pricing. This is just one more example of the ways Nalco strives to minimize the total cost of operation without jeopardizing the treatment results.

This pricing and terms of this proposal are good for 90 days from the date of this letter.

On April 1, 2022 Ecolab/Nalco Water implemented a temporary energy surcharge of 8-12% applied to every order. The percentage is linked to the price per barrel of oil over a 30 day period: 8% for $75-100, 10% for $100-125, and 12% for $125-150/barrel of oil.

We hope you will provide Nalco the opportunity to continue to serve the MGS for the next 3 years.

Sincerely,
Karen Murphy
AVP Sales - NW • Global Power
Proposal for Water Treatment
Services and Chemicals

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RFP Response for
Chemical Water Treatment Services
for the City of Vernon,
Malburg Generating Station
Submitted by:

Joel Bugarin Chris Buchholz Scott Isherwood
District Area District
Representative Manager Manager
NALCO Water – An Ecolab Company
May 26, 2022

Proposal for Water Treatment
Services and Chemicals

Page 2 ends

Table of Contents
Page # Section
3 ..................................................................................... Executive Summary/Introduction 4 ....................................................................................... Support Personnel and Service 5 .................................................................... Rationale for Treatment Program Selection 6 .................................................... Summary of Included Specialty Treatment Chemicals 11 ....................................................................... Chemical Treatment Program Summary 13 ............................................................................................. Price Adjustment Formula 14 .................................................................................................. Service Plan Overview 18…………………………………………………………………...…….Emergency Response
Proposal for Water Treatment
Services and Chemicals

Page 3 ends

Executive Summary/Introduction
Nalco Water greatly appreciates the opportunity to provide a proposal for specialty chemicals and services for the City of Vernon’s Malburg Generating Station (MGS).

Nalco’s business model is based on creating and maintaining value (CMV) for our customers.

By focusing on our customer’s Key Business Drivers and aligning our projects and service plans to apply to those key drivers. Every aspect of how we do business, from ensuring the product is properly made, delivered professionally, and used in the most cost-effective manner is done to provide a business partnership with our customers that will EXCEED THEIR EXPECTATIONS.

In the proposal we have summarized the treatment program based on the specifications supplied in the City of Vernon RFP for Chemical Water Treatment Services for the Malburg Generating Station.
 The estimated annual cost for the specialty treatment chemicals as based upon 2020/2021 historical capacity factors, is $100,526. The detailed breakdown of these chemicals for the MGS facility is located in within the report.

 Two different pricing options have been identified within the proposal which estimate the cost of the commodities at either $263,274 or $202,518. See the proposal for details.  Our proposal includes maintaining your existing Next Generation Nalco 3D TRASAR for Cooling controller. The NextGen controller provides connectivity and security, as well as the 24/7 system monitoring, automated reporting, and alarm service you have been using (value $10,000/year) included at no charge. Nalco continues to lead the industry with our 3D TRASAR technology and System Assurance Center. Both are vital to achieving the level of control required to maintain system performance and reliability.  The proposal includes access to the City of Vernon’s unique Ecolab3D web site where Nalco reports, site-specific documentation (Program Administration Manual, etc.), SDS’s, and other information can be found 24/7. This includes the use of Nalco’s webbased Ecolab3D E-data management system for the recording of site water chemistry, inventory, and equipment logs. This service is customized to meet any of your site sampling and logging needs. There is a charge of $300/month for this service.  The estimated annual value of routine offsite analytical testing, including legionella testing is estimated at $7,310. Nalco is proposing to include these tests at no charge to the City of Vernon.

Not only have we provided a very competitive program, but Nalco is also uniquely positioned to continue supporting the City of Vernon with any subsequent design changes/alterations with our broad engineering support and plant modeling capabilities.

We look forward to presenting our capabilities and discussing this proposal with you.

Joel Bugarin Chris Buchholz Scott Isherwood
District Representative Area Manager District Manager
(562) 760-1599 (510) 207-1666 (509) 431-5062
[email protected] [email protected] [email protected] Proposal for Water Treatment
Services and Chemicals

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Support Personnel and Service
The Nalco Representative
We strive to hire and develop the best people. The Nalco Water logo represents a network of employees all focused on helping customers achieve a return on their investment with Nalco.

Following are characteristics of a Nalco representative: professional, problem-solver and problem preventer.

A network of experts in customer service, product development, environmental compliance, analytical and metallurgical testing, process simulation, automation technology, chemical handling, operator training, and more, backs up every Nalco representative.

Local Representatives for the City of Vernon
Following is a summary of team members who have direct responsibility for the successful implementation and operation of the chemical treatment programs for the Malburg Generating Station. These individuals will have support from the entire Nalco organization. Nalco is the largest manufacturer and marketer of specialty water treatment chemicals in the world, with numerous highly trained technical engineers and support personnel.

The professional support you will receive from Nalco is extensive and forms the foundation of water management programs you will receive. The following summaries present information on the primary members of the Nalco Water team.

Primary Account Manager: Joel Bugarin
Residence: Cypress, CA
Current Assignment: District Representative
Training: Nalco
Years with Nalco: 10 years.

Area Manager: Chris Buchholz
Residence: Pleasant Hill, CA
Current Assignment: District Account Manager
Education: University of Washington
Degree: Mechanical Engineering
Years with Nalco: 27 years.

Provided support during the construction and startup of six (6) different plants in the Bay Area.

Currently provides water treatment service to seven (7) different combined cycle plants in the Bay Area
Proposal for Water Treatment
Services and Chemicals

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District Manager: Scott Isherwood
Residence: Bermuda Dunes CA
Current Assignment: Manager
Education: University of Washington
Degree(s): Chemical Engineering
Years with Nalco: 17 years.

Technical Consultant: Derek Roberts
Residence: Fresno, CA
Current Assignment: District Account Manager
Education: US Naval Academy
Degree: Mechanical Engineering
Years with Nalco: 31 years.

Previous Experience: US Navy nuclear power
Nalco Water’s CHEMStaff group is another resource for NCPA. CHEMStaff is the premier consulting firm serving the global power industry, providing a cross discipline approach between Chemistry, Engineering, and Environmental to evaluate and investigate opportunities and technology to optimize chemistry programs to industrybest potential. CHEMStaff has extensive experience optimizing water chemistry and processes in the power industry. Our team comes directly from the utility industry with centuries of experience working in the chemistry departments of some of the leading US utilities. CHEMStaff is unique in that it brings both a broad industry perspective and hands-on experience working directly in the plants and laboratories to the industry fleet.

CHEMStaff consultants are available to the City of Vernon as needed for an additional fee.

Rationale for Treatment Program Selection
Mechanical, Operational, and Chemical Assumptions
All treatment programs for the Malburg Generating Station were based on the information provided RFP, along with several years of experience servicing the facility.

Predictive Models Used: 3D TRASAR Optimizer
This simulation program allows using the Mechanical, Operational and Chemical (MOC) makeup properties to model the tower for acceptable scale, corrosion and microbiological control.

In the Optimizer, operating data is entered & the model selects the optimal treatment program based on French creek and Nalco stability models integrated with Nalco’s product lines, providing scaling and corrosion potentials. This technology is balanced against the historical results that have been seen at the MGS facility.

Proposal for Water Treatment
Services and Chemicals

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Summary of Included Specialty Treatment Chemicals
SDS sheets for all the specified specialty chemicals are on file with the Malburg Generating Station
RO and MicroFiltration Water Treatment
PermaTreat® PC-191T
RO Antiscalant
Description
PermaTreat PC-191T combines the product reliability of PermaTreat PC-191 with patented TRASAR® Technology for advanced monitoring and control. PermaTreat PC191T is a highly effective scale inhibitor whose active components were developed to treat reverse osmosis (RO) systems. PermaTreat PC-191T has shown for over 20 year’s excellent performance against the following scalants: calcium carbonate, calcium sulfate, barium sulfate, strontium sulfate, calcium fluoride, silica and iron.

Rationale for Selection
Nalco’s exclusive 3D TRASAR RO Optimizer Modeling program was used to determine the product and dosage using the supplied base case.

NALCO 7408
Chlorine Scavenger
Description
NALCO 7408 is a fast-acting dechlorination agent used to reduce the levels of residual chlorine in chlorinated water supplies without increasing objectionable chloramines.

NALCO 7408 is a bisulfite-based material that reacts instantaneously with chlorine. It does not include any catalyst and, therefore, reacts more slowly with oxygen. Its primary use is dechlorination of water, feedwater for reverse osmosis (RO), feedwater to ion exchange units, and wastewater.

NALCO 2581
Alkalinity – 25% Diaphragm Grade Sodium Hydroxide, for process optimization NALCO 2B11
Alkalinity – 50% Diaphragm Grade Sodium Hydroxide Used for off-line cleaning to remove organics
NALCO 8344
Iron Removal - 51% Citric Acid used for off-line cleaning for iron removal Proposal for Water Treatment
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Cooling Tower Circulating Water
3D TRASAR® 3DT487
Cooling Water Corrosion Inhibitor and Deposit Inhibitor (Mineral Dispersant) Description
3D TRASAR 3DT487 is a balanced blend of corrosion and scale inhibitors designed for use in open recirculating water systems. 3DT487 contains:
• Dual function phosphonate inhibitor for both cathodic corrosion and calcium carbonate scale. The active material is a patented, proprietary chemical called Phosphinosuccinic Oligomer (PSO).
• Phosphoric acid for anodic (pitting) corrosion inhibition • Organic High Stress Polymer 2 (HSP2) dispersant.

Rationale for Inclusion
Nalco’s exclusive 3D TRASAR Cooling Tower Optimizer Modeling program was used to determine the product and dosage using the supplied base case. 3D TRASAR Control System:

Due to the changing demand of your system Nalco strongly recommends that a Next Generation 3D TRASAR® control unit be used to control product feeds. 3D TRASAR® control helps level the peaks and valleys associated with typical feed and bleed control strategies providing the protection needed and optimizes system performance and program economics. Varying plant loads and the resulting blowdown rates can rapidly change the demand for chemical.

Nalco NALSPERSE 73551 Microbial Dispersant
Cooling Tower Fill Cleaner/Biodetergent
Description
NALSPERSE 73551 is a dispersant and detergent that can be applied to a cooling water system including cooling tower fill, condenser water-side tubes and tube-side heat exchangers. It cleans and prepares cooling systems so that a registered biocide can remove microbiological-based slime and silt deposits. NALSPERSE 73551 can attach to particles in the system changing their charge profiles such that the particles repel each other, avoiding agglomeration, thus keeping them in solution. A properly maintained and cleaned system will allow for optimum performance of heat exchangers and cooling and ventilation equipment.

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Nalco 90005 Non-oxidizing Biocide - Cooling Water Microbiocide Description
90005 is a broad-spectrum, nonoxidizing biocide approved for use in recirculating cooling towers and decorative fountains. 90005 is particularly effective in controlling algae.

Rationale for Inclusion
90005 has been selected based on its historical effectiveness on the cooling tower at this facility and its effectiveness on many other cooling towers throughout the power industry. It is available, if needed or desired, for treatment of the large volume of water in the recirculating cooling water system, often based upon the observation of algae in the system.

Sodium Hypochlorite/Bleach
Description
Sodium Hypochlorite/Bleach is an aqueous 12.5% solution of sodium hypochlorite. It is intended for use in cooling tower, evaporative condenser water, pulp and papermill water, and industrial water systems. Sodium Hypochlorite represents an alternative biocide to gaseous chlorine as a cost effective and safe oxidizing biocide.

Rationale for Inclusion
The sodium hypochlorite is a commodity chemistry but is an integral part of the cooling tower chemical program. By including in the program, Nalco can assist with inventory management of this critical chemistry.

Sulfuric Acid
Description
Sulfuric Acid is 93% concentrated sulfuric acid used for both alkalinity and pH control of the cooling tower. By using acid, the cooling tower can use significantly less water without fouling the tower fill and improves the efficacy of the oxidizing biocide program.

It should be noted that sulfuric acid can be both dangerous to handle and can do significant damage to systems if not properly controlled. Nalco’s NextGen Cooling tower controller not only provides a secondary pH measurement, it also watches for signs of turbidity (due to iron dissolution) and has real time corrosion monitoring, which provides additional security to this program.

Rationale for Inclusion
The sulfuric acid is a commodity chemistry but is an integral part of the cooling tower chemical program. By including in the program, Nalco can assist with inventory management of this critical chemistry.

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Main Steam Cycle
NALCO® 356 Amine (Steam & condensate pH Adjustment)
Description
NALCO 356 is a corrosion inhibitor that contains a low volatility amine designed for use in steam and condensate systems. NALCO 356 provides effective neutralization of acidic gases, such as CO2, throughout a condensate system.

Rationale for Exclusion
Nalco 356 has been used for several years at the Malburg Generating Station. A decision was made to move towards the 5711 product which will have much less impact on the cation conductivity. The 356 will be discontinued upon the inventory depletion.

NALCO® 5711 Amine (Steam & condensate pH Adjustment)
Description
Nalco 5711 is a volatile corrosion inhibitor that contains an aqueous blend of a volatile neutralizing amine and ammonia designed for use in steam and condensate systems.

Nalco 5711 is designed to adjust the pH in the boiler feedwater and to protect metal surfaces from corrosion due to dissolved acids or low pH conditions in initial and extended areas of the steam, and feedwater system.

The combination of low and high distribution ratio components in Nalco 5711 enhances protection in the early condensation zones of the turbine. The blend helps reduce the tendency for Flow Assisted Corrosion (FAC) in HRSGs by maintaining pH throughout all the pressure zones better than ammonia alone. Nalco 5711 enables maintenance of feedwater pH targets with minimal impact on steam cation conductivity measurements.

BT-4000
Internal Boiler Treatment
Description
BT-4000 is a liquid boiler feedwater treatment that provides an excellent scale and deposit control. BT-4000 is specifically designed as a phosphate-pH control program (Na:PO4 ratio of 4:1) for systems with feedwater hardness of less than 20 ppb. The product is formulated to essentially eliminate product ammonia contribution to improve condensate system corrosion control. The suggested operating pressure limit is 2,600 psig.

Power Film 10000
POWERFILM 10000 contains a volatile surface active corrosion inhibitor designed for use in steam and condensate systems that require additional corrosion protection due to cyclic operations. The product is formulated “amine free” to reduce concerns regarding breakdown and handling associated with organic neutralizing amines. POWERFILM 10000 provides a surface-active barrier which shuts down corrosion occurring in breaks, voids and cracks in the oxide layer, limiting further oxidation of the base metal (and the resulting “iron throw” during cycling operations.)
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Closed Loop
NALCO 8338 Closed System Corrosion Inhibitor
Description
NALCO 8338 is a nitrite-based multifunctional chemical treatment used for the control of corrosion and fouling in closed cooling systems with ultra high heat flux and hot water loops.

NALCO 8338 is a liquid product containing a combination of ferrous and nonferrous corrosion inhibitors, a noncarbonate buffer, scale inhibitors, and dispersants. .

Rationale for Inclusion
Nalco 8338 has been selected based on its historical effectiveness at this facility and its effectiveness in similar applications throughout the power industry. This product has been fine for application in the cooling loops and is very cost effective in systems that can tolerate nitrite-based corrosion inhibitors.

NALCO 7330 Non-oxidizing Biocide – Closed Loop Microbiocide Description
NALCO 7330 is a broad-spectrum, nonoxidizing biocide approved for use in recirculating cooling towers, air washers with mist eliminators, pasteurizers, and heat transfer systems. NALCO 7330 is particularly effective in controlling fungi and slime-forming bacteria.

Rationale for Inclusion
Nalco 7330 has been selected based on its historical effectiveness at this facility and its effectiveness in similar applications throughout the power industry.

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Chemical Treatment Program Summary
Program Pricing
Nalco is providing two options for pricing the Treatment Program. One option is to making pricing adjustments annually to both the specialty chemical products of the program, along with the commodity chemical products. This has been the method Nalco has been following at MGS for the last several years.

An alternative program is offered, where the commodity chemical prices are lowered, but they are closely tied to the commodity market pricing. With this program, the prices for the commodity chemicals are adjusted up or down every quarter based upon the commodity market price.

It should be noted that total expenses for the MGS operation are directly tied to the run rates of the power plant operation. In this proposal, the average run rate of 2020 and 2021 were used to calculate expected total cost. If the run rate should be reduced significantly, the City of Vernon should expect the expenses to drop significantly as well.

All other services as described in the Service Plan are included in this offering at no additional cost to the City of Vernon.

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-OR-

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Price Adjustment Policy
In June 2023, and each June following, the product, analytical, and service prices will be reviewed.

Any adjustments will become effective the following July 1st.

The following price adjustment formula will be used for chemicals, with an allowed price adjustment range no higher than 15% and no lower than 2%. Analytical and service prices will be limited to increases of 2% to 15%.
% Price Adjustment = 40% Labor + 60% Chemical, where
Labor = NAICS Employment Cost Index (CIU2010000000000I) Chemical = 55% PCU325 +
20% WPU061 +
15% WPU067905 +
10% WPU061303
In addition to any periodic price adjustment provided for in this Agreement Nalco may increase the prices for the Products or Services if, at any time during the term of this Agreement, an Extraordinary Inflationary Disruption occurs. Extraordinary Inflationary Disruption is defined as an increase in delivered costs beyond the control of Nalco of at least ten (10%) percent and sustained over a three-month period. In case of such an Extraordinary Inflationary Disruption, Nalco may increase the price of the Products up to the full amount of the percent increase in its costs (raw materials, freight, labor or energy) by giving Customer at least thirty (30) days written notice. The baseline for determining such increase shall be on an individual product basis. If Nalco’s costs decline back to a baseline level, Nalco is allowed to maintain product prices at the elevated level for the same period of time Nalco previously maintained pricing prior to the hardship price increase.

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Service Plan Overview
MGS has unique needs for water chemistry engineering and operational support based on the complexity of the water systems, site and environmental design requirements, and the experience and size of the operating staff. Nalco Water recognizes the support needs, and developed a detailed service plan based on the goals and objectives of MGS and the City of Vernon.

Our service will include:
 An Annual Risk Management meeting to review onsite chemicals and the associated personnel and environmental exposure risks.
 Safety, Health, and Environmental communications as required including updating soft copies of SDS and Product Bulletins and the review and update of any other SH&E communications as needed. All site personnel with Ecolab3D accounts have on-line access to the Nalco SDS library.
 Documentation and training of program specifications to ensure safe application of the chemicals provided. Soft copies of product descriptions, proper product dosage, methods to calculate or monitor dosage, and environmental limits will be provided and updated at least annually.
 Emergency response during chemical transit, chemical spills, or other treatment process and uses. No less than two (2) emergency contacts and a 24-hour emergency response number will be provided.
 A System Survey will be provided describing chemical application points, water treatment processes and uses, and water flow diagrams will be provided. This survey will also include a one-line diagram of the whole-plant water system labeling all major equipment and chemical injection points.
 A People Survey will be provided describing plant contacts, responsible reporting parties, and vendor contacts. This list will be updated annually.  A Program Administration Manual (PAM) will be provided that includes an overview for each treatment system, chemical program and product descriptions, feed points, target concentrations, control and troubleshooting guidelines. Both hard and soft copies of the PAM will be provided and updated at least annually. Nalco has worked with site personnel to keep your detailed commissioning program description up to date as we have completed operator training and made program adjustments.  Written personal service reports (PSR) for each site visit will be provided describing services performed, problems found, actions taken, recommendation for the plant, and planned follow-up. For more information see Nalco’s Six Service Standards section below.
 A Service Plan will be provided describing the frequency of site visits, specific services to be performed during each visit, and the frequency of recurring service items.

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NALCO SERVICE PLAN
Service Component Weekly
Daily Monthly Quarterly Yearly As Required Ongoing
Annual Business Review Nalco
Update of People Survey Nalco
Personal Service Reports & Updates Nalco Nalco
Update-Plant Survey & Operations Nalco MGS
Nalco
Program Administration Manual Nalco
Update of Annual Service Plan
MGS
Nalco
Routine Service Calls Nalco
Boiler Water System Testing MGS Nalco
Cooling Water System Testing MGS Nalco
Legionella Testing Nalco Nalco
Deposit Analysis Nalco
Analytical Services/Lab Water Analyses Nalco
Equipment Inspections with
Photographs Nalco
Inspection & Calibration of Feed
Systems Nalco MGS
Inventory of Test Reagents and Test
Kits MGS
Metallographic Analysis Nalco
Operator Training (Chemical Safety) Nalco
Operator Training (System Operation) Nalco
Recommendations for System Control Nalco Nalco
Review of Treatment Logs
MGS
Nalco Nalco MGS
Treatment Chemical Inventory
MGS
Nalco
Microbial Testing Nalco Nalco
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 An annual business review will be conducted documenting the total value of all goods and services consumed, the estimated expenditures for the coming year, a summary of projects completed and supporting data for any cost savings achieved, and technical and financial goals for the coming year. Soft copies of this review will be provided.  Inspection of water and steam system during operation and outages will be provided. A written report detailing equipment status and recommendations will be supplied within 4 weeks of any inspection, but is usually provide the same day as the inspection with pictures and text. Nalco will meet with plant personnel at least monthly to determine the need for inspections in the following month.
 Water and deposit analysis will be performed at Nalco’s analytical laboratory and specified in the RFP and as needed to verify the proper operation of our chemicals and services. Sample containers will be provided, and a written analysis and sample results will be provided within four weeks of the sample date.
 Metallographic analysis can be performed at the Nalco Water Analytical Laboratory to ensure proper operation of the Nalco provided chemistry and services. Written analysis and sample results will be provided within 4 weeks of the sample date.  Laboratory procedure and training will be provided to ensure proper performance of chemical tests required to ensure proper application of Nalco chemicals and services.

Training can be provided annually and will consist of a single pre-scheduled laboratory procedures demonstration where a Nalco representative will meet with available plant operators to perform wet chemistry and demonstrate the proper wet test procedures.

Documentation will be provided showing the persons trained, date, and time. A soft copy of training materials will be provided.
 Visual inspection for each chemical feed, control, and storage system will be provided at least annually. This inspection will identify any necessary repairs or safety issues and that SDS are properly updated for each storage tank. Recommendations will be provided concerning feed and control system improvements. A soft copy of this report will be provided.
 Nalco will provide monitoring, control, and corrective actions for plant water systems.

This service will include a review of log sheets and trends for a plant water streams or systems for data provided. Recommendations for improvement will be provided for any parameter with less than 80% of readings within the target range. A soft copy will be provided.
 Nalco will provide detailed chemistry evaluations and recommendations for each system’s chemical treatment program. Nalco will review the treatment program design, purpose, and efficacy; compare chemical treatment program goals to results; and A soft copy copies will be provided.
 Provide corrosion rate monitoring of recirculating, and closed loop cooling systems.

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available to the plant at least quarterly. Reports shall include both general and pitting corrosion rates. Coupon exposure time shall be approximately 180 days. A soft copy of all reports will be provided.
 In-service inspections of the MGS evaporative cooling tower will be performed at least twice per year. The MGS cooling tower is routinely given a visual inspection during each service visit. Any anomalies will be noted in the service report as a soft copy email to site personnel. As noted, a soft copy of this report will be provided.  Annual training will be provided for operators, supervisors, and managers. It will be provided on basic water chemistry, cooling systems, HRSG systems, and pre-treatment systems. Other topics as determined by site management are also appropriate, including the Nalco on-line E-data system and the on-line eCommerce system. Training will include at least two different training sessions covering the same material to accommodate shift schedules, however we have been most successful when conducting the same training over four (4) successive weeks to reach all four shifts when on their day rotation. Training material and records will be provided in an electronic formats.

Hard copy documents appropriate to the training topic may be provided as a appropriate for each training topic,
 Onsite emergency response during normal working hours: Nalco will provide no less than less than two (2) emergency contacts and a 24-hour emergency response phone number.
 Provide chemistry data trending software capable of importing existing plant data to ensure previous historical data is retained: Nalco’s E-data system has been in service for close to five (5) years for some systems. The E-data logs can be exported to Excel and off-line Excl log sheets generated by E-data can be used to upload off-line data back to E-data.
 Provide recirculating, and closed loop cooling system biological control monitoring including sessile bacteria counts, bacteria metabolic residuals and bacteria speciation analysis at least quarterly. Reports shall include recommendations for improvements, cost analysis of biological treatment programs, and evaluation of current program efficacy. Electronic reports including speciation analysis shall be provided to the plant quarterly.
 Quarterly reporting of all corrosion data will be included in the corresponding monthly report.
 Annual reports will include Business Reviews, chemistry evaluations, and chemical safety audits in the corresponding monthly report.
 Special reports will include outage inspection of water and steam systems, deposit samples, specially requested water samples, metallographic analysis, and training presentations.

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Action Link Emergency Response Team
1 – 800 – 424 – 9300

EMERGENCY NUMBER
24 HOURS/DAY
The Nalco Water ALERT Emergency Response System was created to minimize the human and environmental impact of all incidents involving Nalco Water products, and to work to prevent future incidents. The Distribution Safety Department is responsible for the management of the Nalco Water ALERT System. Distribution Safety is also responsible for responding to all distribution and transportation emergency incidents. * Nalco Environmental Health & Safety Toxicologists respond to all medical exposures involving our products.
*A transportation emergency is any occurrence, which results, or is likely to result, in an uncontrolled release of product while a shipment is loading, in transit, or unloading.

In case of an emergency, a special number is printed on shipping papers, product labels, and Material Safety Data Sheets: 1-800-424-9300. A call to that number activates the ALERT Emergency Response System.

Nalco Customer Delivery Specialists, common carriers and all other parties involved in the management of the distribution channel are instructed to call the emergency number in the event of a leaking container or spill. Notification of an incident to the ALERT System is mandatory regardless of the quantity involved or if the product is hazardous or non-hazardous. (Delivery Specialists are not trained to aggressively stop or clean up major spills; however, if it is safe to do so, they will secure the scene and take limited containment action.)
When a call comes in, the Control Center obtains preliminary information, instructs the caller to stand by, and notifies the Emergency Response Coordinators (ERCs) in Distribution Safety.

ERCs are divided into three groups and are on-call 24 hours a day, seven days a week. In an emergency, the Control Center first pages ERC Group A. If Group A does not respond within five minutes, the Control Center will contact Group B. If the Proposal for Water Treatment
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Control Center is unable to reach Group B within five minutes, they will proceed to Group C, again by telephone contact. Since 1995, ERC Group A has responded to over 2,900 incidents. During that same time period, only two incidents have gone on to be responded to by ERC Group B.

ERCs are the primary decision-makers in an emergency. The methodology used by the ERC is a disciplined approach to minimize the human and environmental impact of the incident. Once the Control Center contacts an ERC, he or she is provided with preliminary information. The ERC then contacts the caller to obtain more details and proceeds to develop an action strategy. When necessary, the ERC coordinates Nalco Water or carrier emergency response teams, contractors, and civil authorities to begin recovery operations. The ERC has cradle-to-grave responsibility for the incident and ensures that all parties involved handle the incident appropriately.

The ERC may also arrange an on-site remediation response if the incident involves the company fleet, if civil authorities request Nalco Water to respond on-site, or if a common carrier is unable to arrange remediation. These efforts may or may not include a Nalco Emergency Response Team (ERT).

Nalco Emergency Response Teams conduct on-site cleanup, remediation and recovery. They are available only at Nalco Water plant locations. The facility manager is responsible for making the final decision on mobilizing an ERT.

If a company ERT is not able to respond to an emergency, the ERC will hire an emergency response contractor. Distribution Safety maintains a special list of contractors for this purpose. The ERC may also contact CHEMTREC (Chemical Transportation Emergency Center), for a referral. CHEMTREC is a service established by the American Chemistry Council (ACC).

Because Nalco Water is also a subscriber to CHEMNET, a CMA mutual aid network, Nalco Water can request assistance from a chemical company that is near the scene.

The ALERT System also processes calls on medical emergencies and customer incidents that involve Nalco Water products.

EXHIBIT B
Legionella Analytical/Testing Services

2.1. Analytical
a) Culturing and testing procedures require up to 14 days for confirmation and reporting of test results.
b) All test samples will be submitted to the Contractor Lab which holds the appropriate certifications for performing analytical services and Legionella culture testing (CDC-ELITE, ISO 9001:2008, QWAS-LGC, UKAS-PHE).
c) Legionella testing will be performed per the International Organization of Standardization ISO method 11731 or an equivalent method.
d) The Lab can detect Legionella at a limit of 0.1 Colony Forming Units per Milliliter (CFU/mL). e) The Lab reserves the right to process a water sample at a different detection limit due to limitations caused by water sample quality such as turbidity or other contaminants that would prevent a sample from being processed at the detection limit requested. f) Analytical results are reported as follows: Total Legionella (all species), Legionella pneumophila Serogroup 1, Legionella pneumophila Serogroups 2-14 (combined), Other Legionella species (all non-pneumophila species), Fluorescent Legionella (reported if detected).

2.2. Sample Submittal
Test samples will be shipped by overnight courier using the Lab provided test kits. The Lab is closed on Saturdays, Sundays, and Holidays. Therefore, test samples cannot be collected/shipped on Fridays or the day before a holiday.

2.3. Test Reports
Analytical results will only be reported electronically via email to designated The City contacts.

2.4. Terms of Service
a) Contractor recommends that Legionella analytical testing be performed and interpreted within the context of a properly designed Legionella or Waterborne Pathogen Water Safety Plan or equivalent.
b) The City understands and acknowledges they have sole responsibility for interpretation of test results and for responding and taking corrective action for any detectable species of Legionella. c) Unless mutually agreed in a separate written service contract signed by authorized Contractor and The City representatives, Contractor is not responsible for any corrective action to remediate or respond to any detectable species of Legionella.

EXHIBIT C

SCHEDULE
Starting June 2023, and each June following, the product, analytical, and service prices will be reviewed. Any adjustments will become effective the following July 1st.

Pursuant to Vernon Municipal Code Section 3.32.220(C), rates to be paid by the City shall not be increased during the term of a contract except where external factors are going to significantly affect costs and rates during the term of the contract, and any such increase is directly tied to the most appropriate index or cost-of-living rate or a pass through of increased costs charged to the Contractor.

Subject to these provisions, the following price adjustment formula will be used for chemicals, with an allowed price adjustment range no higher than 15%. Analytical and service price increases must adhere to the Vernon Municipal Code requirements, and can be no higher than 15%. % Price Adjustment = 40% Labor + 60% Chemical, where
Labor = NAICS Employment Cost Index (CIU2010000000000I) Chemical = 55% PCU325 +
20% WPU061 +
15% WPU067905 +
10% WPU061303
NOTE: The commodity pricing is to be adjusted quarterly indexed to the cost of commodity product Subject to Vernon Municipal Code Section 3.32.220(C), Nalco may request an increase to the prices for the Products or Services if, at any time during the term of this Agreement, an Extraordinary Inflationary Disruption occurs. Extraordinary Inflationary Disruption is defined as an increase in delivered costs beyond the control of Nalco of at least ten (10%) percent and sustained over a three-month period. In case of such an Extraordinary Inflationary Disruption, Nalco may request an increase to the price of the Products up to a pass-through of actual increased costs to the Contractor (raw materials, freight, labor or energy) by giving Customer at least thirty (30) days written notice. The baseline for determining such increase shall be on an individual product basis. If the parties cannot reach an agreement on the proposed price increase, either party may terminate this Agreement under the provisions of Section 11.21 herein.

NOTE: The commodity pricing is to be adjusted quarterly indexed to the cost of commodity product 1) Products, Prices, and Services List

EXHIBIT D

EQUAL EMPLOYMENT OPPORTUNITY

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

EXHIBIT E

CONTRACTOR-OWNED EQUIPMENT TERMS AND DIGITAL PROGRAM TERMS Contractor-Owned Equipment Terms
For equipment (including Porta-Feed units, 3D TRASAR, OMNI, Purate, and Pareto equipment and other proprietary equipment of Contractor and any associated computer hardware or software) furnished to City on a rental or use basis (the “Equipment”), the following terms and conditions shall also apply.

1. Equipment shall remain the sole personal property of Contractor even though City may attach Equipment to realty. Contractor may cause such Equipment to be marked to indicate its ownership, and City agrees to provide reasonable cooperation by executing any financing statements Contractor files with respect to the Equipment. City shall take no action which is inconsistent with Contractor’s title to the Equipment, and shall not move, encumber or alter the Equipment without Contractor’s written authorization. City shall be responsible for any personal property or use taxes associated with the Equipment.

2. City shall not use the Equipment with any materials or products other than those recommended or approved by Contractor. The proper functioning of the Equipment is conditioned upon City operating it in accordance with Contractor’s recommendations.

3. City shall install and provide the utilities necessary for the Equipment, and will provide a suitable location for the Equipment, including but not limited to shelter, tank pads, spill protection, foundations, etc., as appropriate. City shall receive, unload, place and remove Equipment at no cost to Contractor and should be responsible for procuring any necessary permits or licenses for such actions. With respect to Porta-Feed units, City agrees to provide access for a standard truck (min. 40 feet end-toend, 14 feet high) to be driven safely to an area (e.g. loading dock) in the vicinity of the base tank to offload refill units.

4. City shall not alter the Equipment without Contractor’s written authorization. City assumes all risk of loss or liability arising from or pertaining to its possession, operation or use of the Equipment, and shall indemnify, defend and hold Contractor harmless from all losses, claims, damages and expenses arising from City’s possession and use of the Equipment except to the extent damage to the Equipment is caused by Contractor’s negligence or willful misconduct. City shall obtain and maintain for the term of this Contract all risks property insurance against loss or damage to the Equipment.

5. City shall allow Contractor to subcontract portions of work to be performed under this Contract with respect to Equipment including but not limited to data-hosting, transmission of data through internet service providers and use other service providers. Contractor shall have the right to inspect and service Equipment during normal business hours.

6. Upon termination of this Contract by either Contractor or City, City shall return Equipment to Contractor at City’s sole expense in the same condition as received, ordinary wear and tear excepted. In the event Equipment is lost, damaged or destroyed, City shall pay to Contractor the cost of replacement, or of repair at Contractor’s standard charges then in effect. During the term of this Contract, the Equipment will remain the exclusive property of Contractor.

7. City shall promptly notify Contractor of any material change in City’s status, including, but not limited to, change of address, desired Equipment location, close of business.

8. Contractor reserves the right to use non-union labor for supervised, installation, testing and service of Equipment.

9. City agrees to inform Contractor of any special or unusual safety precautions that should be taken because of conditions in City’s plant or process.

10. Notwithstanding anything in any Contract or otherwise to the contrary, all data generated or collected by the Equipment that is transmitted to Contractor (or to a Contractor third-party provider) is owned by City but City hereby grants to Contractor a perpetual, non-exclusive, royalty-free license to use that data (and that license will survive the termination or expiration of this Contract). City agrees to maintain reasonable measures to ensure the security of its information, computer and internet systems, including data security, and will hold Contractor and its affiliates harmless from claims relating thereto including, without limitation, third-party actions in connection therewith, excluding only damages to the extent caused by Contractor’s willful misconduct or fraud.

Digital Program Terms
Customer grants to Nalco Water, and its affiliates, a license to use data provided or made available by Customer to Nalco Water in connection with the Program (“Customer Data”) as necessary to provide the Program to Customer, to incorporate Customer Data into aggregated and anonymized data sets and for the purpose of improving Nalco Water’s and its affiliates goods and services and for creating for its own account any general information or insights that may be derived from Customer Data for any lawful purpose, which license will survive the Program (the “Purpose”). Nalco Water is permitted to utilize subcontractors or other vendors in the performance of the Program with Customer Data provided that such subcontractor or vendor has agreed to use the Customer Data only for the Purpose and to treat Customer Data as confidential information. Customer agrees to maintain reasonable measures to ensure the security of its information, computer and internet systems, including data security, and will hold Nalco Water and its affiliates harmless from claims relating thereto including, without limitation, third party actions in connection therewith, excluding only damages to the extent caused by Nalco Water’s willful misconduct or fraud.

Customer will ensure the security of the passwords and usernames used by Customer personnel to use the Program and is solely responsible for access control maintenance (including access termination) in connection with its use of the Program. The Program is warranted to perform as set forth in the program description and is otherwise provided “as-is” and without warranty that it will be uninterrupted or error free.

In no event shall either party have any liability for indirect or consequential damages related to the Program.

Nalco Water’s liability with respect to the Program shall in no event exceed the annual fees associated with the Digital Program. The Nalco-Owned Equipment Terms above apply to the rental or use of Nalco Waterowned products or other equipment or items (“Equipment”) that are provided in connection with Program.

City Council Agenda Item Report
Submitted by: Javier Valdez
Submitting Department: Finance/Treasury
Meeting Date: June 21, 2022

SUBJECT
Property and Casualty Insurance Placements for Fiscal Year 2022-2023 Recommendation:

Approve and authorize the City Administrator to execute related documents for procurement of necessary annual insurance coverage for Fiscal Year (FY) 2022-23 effective July 1, 2022 to June 30, 2023, with total premiums estimated at approximately $3,765,514 and not-to-exceed $3,980,000.

Background:

The City retained AON Insurance Services (AON) to conduct an analysis to determine appropriate insurance coverages and carriers for the upcoming fiscal year. AON worked diligently with the Finance Department to identify appropriate coverage types, coverage amounts, self-insured retentions (deductibles), and competitive pricing in conjunction with the annual renewal process. AON annually evaluates the marketplace and solicits quotes from insurance carriers to ensure competitive rates are obtained. This year, on certain coverages, up to 20 insurance carriers were solicited. Analysis involved insurance underwriters from the City’s existing insurance carriers and the solicitation of potential carriers. Requisite financial and claims information was provided to insurance carriers to help obtain appropriate coverage for the City at competitive prices and terms.

The insurance negotiation and placement process will conclude on or before June 27, 2022.

This will allow time to bind the insurance placements before July 1, 2022, in time for the City's new fiscal year. The current schedule of coverage and associated estimated premiums for each type of coverage are summarized in the attached FY 2022-23 Insurance Premiums Schedule. The proposed coverages have been determined to be prudent and appropriate to safeguard the City.

Pursuant to Vernon Municipal Code Section 3.32.110 (A)(8), insurance contracts are exempt from the competitive bidding requirements; however, insurance brokers and agents must be assigned through a competitive selection process. AON was retained following a noticed Request for Proposal process in February of 2021.

Fiscal Impact:

The total cost for insurance coverage is budgeted in the FY 2022-23 budget for an estimated amount of $3,765,514. Staff is recommending a not-to-exceed amount of $3,980,000 once the final binding coverage is available. If a small adjustment less than 5% is needed, a mid-year adjustment will be presented to Council. The funds are available in General Fund, Finance Department Insurance Premium Account No. 011.1004.503035 and Vernon Public Utilities Fund, Insurance Premiums Accounts No. 055.9000.503035 and 055.9190.503035.

Attachments:

1. FY 2022-23 Summary of Insurance Permiums
Fiscal Year 2022-23 Insurance Premiums Schedule
Insurance Type Coverage / Deductible Estimate Premium
Property - Power Generating $100 Million Limit,
Various Deductibles
$568,310
Property - Residential $7,950,653 Limit,
$2,500 Deductible
$39,275
Property - Municipal $59,614,930 Limit,
$25,000 Deductible
$84,530
Standalone Terrorism $100 Million Property Terrorism,
$5 Million Terrorism Liability,
$5 Million Active Shooter, $0
Deductible
$50,000
Auto Physical Damage (CE/APP) $10 Million Limit,
$5,000 Deductible
$13,926
Government Crime $1 Million Limit,
$25,000 Deductible
$3,824
Cyber Liability $5 Million Limit,
$100,000 Deductible
$72,000
Premises Pollution/Environmental
Impairment Liability
$5 Million Limit,
$5 Million per claim,
$25,000 Deductible except
$50,000 Deductible (Utility Locs.)
$100,000 Deductible (Natural Gas
Pipeline)
$61,415
1st Excess Liability $5 Million Limit,
$2 Million Deductible except $3
Million Deductible for Law
Enforcement
$160,000
2nd Excess Liability $5 Million Limit excess $5M $215,000 3rd Excess Liability $5 Million Limit excess $10M $110,000 4th Excess Liability $5M Limit excess $15M $60,000
Excess Worker's Compensation $50 Million Limit,
$1 Million Deductible except
$1,500,00 Deductible for
Presumptive Losses
$187,600
Special Event GL $2 Million Limit, $1
Million Each Occurrence
$3,200
Malburg Generating Station
Excess Liability $100 Million Limit $699,064
Property Insurance $200 Million Limit $1,355,735
Commercial Property/EQ and FL $50 Million Limit, $153,038 Workers Compensation $50 Million Limit, $57,538
Environmental $5 Million Limit $57,418
Terrorism $200 Million Limit $26,152
Total Amount $3,978,025
City Council Agenda Item Report
Submitted by: Daniel Wall
Submitting Department: Public Works
Meeting Date: June 21, 2022

SUBJECT
Purchase Contract with Merrimac Energy Group to Procure Fuel Recommendation:

Approve and authorize the issuance of a Purchase Contract with Merrimac Energy Group in an amount not-to-exceed $500,000 to procure fuel for Citywide fleet for Fiscal Year 2022- 2023.

Background:

The Public Works Department (Public Works) purchases the fuel for the City’s entire fleet of vehicles. In order to avoid the higher cost of retail purchases at the pump, it is most advantageous for the City to contract for the delivery of bulk fuel from a licensed vendor that can supply fuel to the City’s fuel tank locations.

Staff is recommending that the City Council award a Purchase Contract to Merrimac Energy Group (Merrimac) for fuel in an amount not-to-exceed $500,000. For the proposed purchase, the City intends to piggyback on a current contract between Merrimac and the City of San Buenaventura (Ventura) (Attachment 1). Per Vernon Municipal Code 3.32.110 (A)(5), the purchase with Merrimac is exempt from competitive bidding, as piggybacking allows the City to leverage the same prices, and terms and conditions for supplies, equipment, or services as in a previous award negotiated by another public agency. The Finance Director has determined that piggybacking for this purchase is advantageous for the City.

Under the contract with Merrimac, the price of red dye diesel, renewable diesel, gasoline fuel, diesel exhaust fluid and lubricants are determined daily by the Oil Price Information Service (OPIS) Early Day “Los Angeles Average,” as published weekly by the United Communications Group. The Contractor’s Customer Service Representative shall monitor the daily pricing and advise the City of potential price increases and/or decreases, enabling the City to secure the most optimal pricing for its fuel purchases.

On average, the City spends about $35,000 per month on fuel. With fuel costs escalating over the past year, the requested amount will ensure that Public Works is able to procure the amount of fuel necessary to operate the City’s fleet for Fiscal Year 2022-2023.

Fiscal Impact:

Sufficient funds for the purchase of fuel are included in the Vehicle Expense Account for each City Department.

Attachments:

1. City of Ventura - Merrimac Agreement FY 2022-23

ATTACHMENT A

City Council Agenda Item Report
Submitted by: Lissette Melendez
Submitting Department: Public Works
Meeting Date: June 21, 2022

SUBJECT
Purchase Contract for City Contract No. CS-1466: City Hall Chiller Condenser Coils Replacement
Recommendation:

A. Find that the proposed action is categorically exempt from California Environmental Quality Act (CEQA) review, in accordance with CEQA Guidelines § 15301, because the project consists of the maintenance, repair or minor alteration of existing equipment and involves negligible or no expansion of an existing use; B. Approve and authorize the issuance of a Purchase Contract with Western Allied Corporation for the replacement of the City Hall Chiller condenser coils for a total amount of $35,990; and
C. Authorize a contingency of $10,000 in the event that additional unforeseen repairs are necessary, and grant authority to the City Administrator to issue change orders for an amount up to the contingency amount, if necessary.

Background:

Recently, the City Hall Chiller stopped working and, during the inspection to determine necessary repairs, the City's contractor discovered a leak deep within the Chiller's condenser coils. In order to resume operation of the Chiller, it is recommended that two coils within the machinery be replaced to stop the leak. The Public Works Department requested quotes from vendors for the repairs since this type of specialized work cannot be completed by City staff.

To minimize the impact on City Hall functions, the contract calls for the repairs to be completed between Friday evening and Sunday.

Pursuant to the City’s Purchasing Guidelines, Staff performed an informal selection process to obtain quotes for the repair project. The informal selection process for contracts valued between $15,000 and $50,000 requires no fewer than five vendor bids. Although staff solicited a total of eight quotes, only two bids were received. The following quotes for the project were received by the deadline indicated of Monday, May 23, 2022, at 2:00 p.m.:

Western Allied $35,990
Complete Thermal Services $36,145
Staff evaluated the quotes received and determined that Western Allied provided the lowest, complete, responsive quote. Performance Bonds and Labor and Materials Bonds are not required for this type of work; however, all necessary insurances will be required.

According to Vernon Municipal Code Section 3.32.030 (B), if in the 12 months preceding the effective date of a proposed new, renewed, or otherwise amended contract, the City has paid or awarded the proposed vendor more than $100,000 pursuant to contracts with the vendor, then the proposed new, renewed, or otherwise amended contract shall be approved only by the City Council. Western Allied has current contracts with the Public Works Department totaling $74,957. With issuance of the proposed purchase contract, the overall expenditures with Western Allied would exceed the $100,000 threshold.

Staff recommends awarding a Purchase Contract to Western Allied in the amount of $35,990; and recommends granting the City Administrator authority to issue change orders for a total amount of up to $10,000 in the event of unexpected changed conditions or to accommodate additional required work, for a potential total cost not to exceed $45,990.

Fiscal Impact:

Sufficient funds for the contract are available in the General Fund for City Buildings, Account No. 011.1049.900000.

Attachments:

1. Western Allied Quote

WESTERN ALLIED CORPORATION
The Building Relationship People
Celebrating 62 Years 1960 - 2022
PO Box 3628 (use PO Box for mail) Santa Fe Springs, CA 90670 12046 E. Florence Avenue 562/944-6341 Fax 562/944-7092
Contractors License No. 198821
Air Conditioning Service, Maintenance, & System Correction May 16, 2022 Proposal # 2268a
City of Vernon
4305 S. Santa Fe Avenue
Vernon, CA 90058
Re: City Hall Main Chiller; Condenser Coil Replacement
Revised for current standard lead time
Attn.: Mr. Kenny Jackson
Dear Kenny:

This letter is to follow up on our recent discovery that one of your primary chiller’s circuits was low on refrigerant. As you know, further investigation found a refrigerant leak in a condenser coil. The leak is at a tube at some point deep within the coil; it is not at an outside tube that we can reach to make the sort of repair that we made on the other coil of this circuit a few years ago. The right solution is to replace the coil.

As you know, the chiller has two circuits. Each circuit has two coils. In this same circuit that now has a leaking coil, the other coil was repaired 3-4 years ago. As noted above, that leak was repairable because the tube that was leaking was an outside tube and we could therefore get to it. The leak this time is in an interior tube, where access is not possible.

Per your requested scope of work, we offer to replace both coils in this circuit, which would include the coil that has been repaired. The scope of work involves removing the top of the chiller and getting a large crane on site for rigging the coils.

Pricing is based upon doing the entire job on overtime, starting Friday evening. It will be necessary to make sure that the culdesac to the south of the building (Furlong Place) has no cars in the northern portion, either along the end circle or parked in the spaces off the circle to the north, the night before the crane lift so the crane will have unimpeded access.

Our price to replace both coils as noted above is $35,990.00.

Lead time is presently quoted by Trane as 10-12 weeks, plus shipping time. The “quicker ship” option at premium pricing is no longer available.

Please let me know if you have any questions. If you wish to proceed, please advise the appropriate purchase order number for the project. Pricing is valid for 30 days from the date of this proposal.

Best Regards,
Mike Gallagher
City Council Agenda Item Report
Submitted by: Joaquin Leon
Submitting Department: Finance/Treasury
Meeting Date: June 21, 2022

SUBJECT
Annual Statement of Investment Policy for Fiscal Year 2022-2023 Recommendation:

Adopt Resolution 2022-22 approving an Annual Statement of Investment Policy for Fiscal Year (FY) 2022-2023 and delegating investment authority to the Director of Finance/City Treasurer.

Background:

The Annual Statement of Investment Policy (Investment Policy) sets forth the course of action necessary to guide the decision-making of the City Council, Director of Finance/City Treasurer, and those authorized to make investment decisions in the administration of the City’s investment portfolio. The existing Investment Policy is in compliance with the California Government Code and is a restatement of relevant sections applying to investment activities.

The Investment Policy is designed to ensure that the administration of surplus funds is performed in accordance with the “prudent investor standard” pursuant to California Government Code Section 53600.3. As such, capital preservation is of paramount importance and, thus, the City does not engage in speculative activities.

Pursuant to California Government Code Section 53646(a)(2), the City Treasurer may annually render to the City Council an Annual Statement of Investment Policy which the City Council shall consider at a public meeting. Staff made no changes to the Investment Policy for FY 2021-2022 approved by Council on June 15, 2021 and proposes the same Investment Policy to be adopted for FY 2022-2023. The proposed Investment Policy conforms with California Law and is to be adhered to and attested by the Independent Certified Public Accounting firm that performs the certified annual audit of the City's financial statements.

Fiscal Impact:

There is no fiscal impact associated with this report.

Attachments:

1. Resolution No. 2022-22
RESOLUTION NO. 2022-22

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON

APPROVING AN ANNUAL STATEMENT OF INVESTMENT POLICY FOR
FISCAL YEAR 2022-2023 AND DELEGATING INVESTMENT

AUTHORITY TO THE DIRECTOR OF FINANCE/CITY TREASURER
SECTION 1. Recitals.

A. Pursuant to California Government Code Section 53646(a)(2), the City Treasurer may annually render to the City Council an Annual Statement of Investment Policy which the City Council shall consider at a public meeting.

B. Pursuant to Resolution No. 2021-20, the City Council approved the Annual Statement of Investment Policy for Fiscal Year 2021-2022, which delegated investment authority to the Director of Finance/City Treasurer, and granted the Director of Finance/City Treasurer express authority, as limited by Section 5.1 of the Policy, to make investments of City funds in securities maturing more than five years from the date of purchase as part of an investment program.

C. The City has continued to follow the Annual Statement of Investment Policy approved by Resolution No. 2021-20 for Fiscal Year 2021-2022.

D. The City Council desires to approve an updated investment policy and approve the Annual Statement of Investment Policy for Fiscal Year 2022-2023.

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. The City Council hereby approves the Annual Statement of Investment Policy (Investment Policy), for Fiscal Year 2022-2023, a copy of which is attached hereto as Exhibit A.

SECTION 4. The City Council hereby delegates to the Director of Finance/City Treasurer, or authorized designee, the authority to implement the Investment Policy and select the instruments for the City’s investment portfolio in accordance with the Investment Policy.

SECTION 5. The City Council hereby grants, as part of the City’s investment program, to the Director of Finance/City Treasurer, and authorized designee, express authority, as limited by Section 5.1 of the Policy, to invest in securities maturing more than five years from the date of purchase, and consistent with Government Code 53601, this Resolution No. 2022-22

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authority shall become effective no less than three months from the effective date of this Resolution.

SECTION 6. If any section or part of this Resolution is found to be unenforceable by operation of law, the remaining sections or parts of this Resolution shall be in full force and effect.

SECTION 7. This Resolution shall become effective July 1, 2022.

SECTION 8. 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 21st day of June, 2022.
________________________
LETICIA LOPEZ, Mayor
ATTEST:

LISA POPE, City Clerk
(seal)
APPROVED AS TO FORM:
_________________________________
ZAYNAH N. MOUSSA,
Interim City Attorney

CITY OF VERNON
ANNUAL

STATEMENT OF

INVESTMENT POLICY
FISCAL YEAR 2022/2023
Scott A. Williams
Director of Finance/City Treasurer
July 1, 2022
Resolution No. 2022-22

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Table of Contents

0.0 PREFACE ............................................................................................................................ - 3 -

1.0 SCOPE ................................................................................................................................. - 3 -

2.0 PURPOSE ............................................................................................................................ - 3 -

3.0 OBJECTIVE ........................................................................................................................ - 4 -

4.0 DELEGATION OF AUTHORITY...................................................................................... - 5 -

5.0 INVESTMENT PROGRAM ............................................................................................... - 6 -

6.0 INSTRUMENTS AUTHORIZED FOR INVESTMENT ................................................... - 6 -

7.0 DESIGNATED ENTITIES FROM WHOM THE CITY MAY PURCHASE AUTHORIZED INVESTMENTS ................................................................................ - 13 -

8.0 PROHIBITED INVESTMENTS .................................................................................. - 13 -

9.0 ALLOWABLE HEDGABLE TRANSACTIONS ........................................................ - 14 -

10.0 STATEMENTS OF INVESTMENT ACTIVITIES ........................................................ - 16 -

11.0 CONFLICT OF INTEREST ............................................................................................ - 16 -

12.0 PUBLIC INQUIRY ......................................................................................................... - 17 -

13.0 ANALYSIS OF PROSPECTIVE INVESTMENTS ....................................................... - 17 -

14.0 SAFEKEEPING ............................................................................................................... - 17 -

15.0 BROKER/DEALER AND DEPOSITORY INSTITUTION RELATIONSHIPS ........... - 17 - Resolution No. 2022-22

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Investment Policy 2022/2023

0.0 PREFACE
This Annual Statement of Investment Policy (the "Investment Policy") sets forth the course of action necessary to guide the decision-making of the City Council, and to the extent authorized under Section 4.0 hereof, City Treasurer and all persons authorized to make investment decisions on behalf of the City of Vernon (the “City”) in the administration of the City's investment portfolio.

While some portions of this Investment Policy are a restatement of the laws of the State of California (the “State”), it is viewed that these restatements are integral to the purpose and flow of this Investment Policy. In most instances the use of future tense throughout this Investment Policy is intended to mean a continued practice or a practice which shall be continued.

The following statements are intended to ensure the achievement of the purpose, the goals and objectives in an orderly and accurate manner. However, there is no guarantee that problems, errors or losses will not arise in the course of administering the investment of idle or surplus funds.

Among the obstacles and deterrents in achieving the goals and objectives of the portfolio are:
unforeseen national or international events or crises, deviation of actual cash flow from forecasted cash flow, unforeseen demands on cash flow, policies made with regard to investment in local depositories, errors in data or advice used to make decisions, as well as any other unanticipated event that may have an effect on local, national or international financial markets, economies or politics which in turn has a decided effect upon the portfolio.

This Investment Policy is designed to achieve, keeping in mind the obstacles and deterrents in pursuing portfolio goals and objective, the safety of the principal of all City funds, consistent with limited risk and prudent investment practices.

1.0 SCOPE
This Investment Policy governs the deposit, safekeeping and investment of the funds of the Treasury, as well as all related transactions and investment activities. The investment of bond proceeds and amounts held under indentures and other security agreements with respect to bonds as provided in Section 6.12 will be governed by the provisions of the relevant bond documents.

2.0 PURPOSE
The purpose of the Investment Policy is to facilitate accomplishment of the goals and objectives of the Treasurer with regard to the investment of surplus funds (funds not required for the immediate needs of the City), to provide a framework within which to carry out the business of administering and investing the surplus funds of the Treasury, and to improve communications at all levels between those involved and those interested in the process of investing and administering the surplus funds of the Treasury.

Resolution No. 2022-22

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Investment Policy 2022/2023

3.0 OBJECTIVE

3.1 Legal Compliance
All investments shall be made in accordance with this Investment Policy, California Government Code Section 53600 et seq., and any forthcoming amendments or additions to the California Government Code in relation to the investment of local agency surplus funds.

3.2 Prudence
The administration of surplus funds of the City Treasurer, as a fiduciary trustee, shall be performed in accordance with the prudent investor standard pursuant to California Government Code Section 53600.3.

The City Treasurer and the City Council of the City and all persons authorized to make investment decisions on behalf of the City are "trustees" and therefore fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee of the City shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the City, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and satisfy the liquidity needs of the City. Within the limitations of this Investment Policy and Section 53600.3 of the California Government Code and considering individual investments as part to an overall strategy, the City Treasurer and all persons authorized to make investment decisions on behalf of the City are authorized to acquire investments as authorized by law.

As prudence shall be applied in the context of portfolio management, investment officers and their advisors, acting in accordance with written procedures and exercising due diligence, shall report deviations from expectation in an individual security’s performance to the Treasurer in a timely fashion evaluate and appropriate action to be taken to control adverse developments.

3.3 Investment Criteria Goals
The Treasurer's primary goals for the investment of surplus funds (in the City's Treasury or monies in a sinking fund) are, in order of priority pursuant to California Government Code Section 53600.5:

3.3.1 Safety -- Safety of capital shall mean the safeguarding of capital through the selection of investments and investing procedures to best protect against loss, whether arising from various investment risks (such as interest rate risk, market risk, counterparty risk, etc.) or from default, fraud, or error.

3.3.2 Liquidity -- The City's portfolio shall be invested so as to always have the ability to convert sufficient securities in the portfolio to cash, with little or no loss in value, to cover cash flow needs of the City to meet contingency needs.

Resolution No. 2022-22

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Investment Policy 2022/2023

3.3.3 Yield -- Yield refers to earning a reasonable rate of return and shall take into consideration current market conditions, the present phase of the market cycle, both present and future cash flow needs, and the other primary goals of Safety and Liquidity.

3.4 Performance Measurement
The investment portfolio will be managed in accordance with the parameters specified within this Investment Policy. The methods of measuring investment performance and performance benchmarks shall be articulated in the internal policies of the City Treasurer's Department.

3.5 Maintenance of Public Trust
As the Treasurer has been entrusted with the safekeeping of public monies received from all sources, the Treasurer, in managing the investment portfolio, shall exercise a high degree of professionalism to ensure and sustain public confidence, remembering that both the investment instruments and the methods of transacting investment business are subject to public review and scrutiny.

4.0 DELEGATION OF AUTHORITY
The management responsibility for the City's investment program is hereby delegated to the City Treasurer in accordance with California Government Code Section 53607. Pursuant to California Government Code Sections 53601, the City Treasurer shall be responsible for the investment of the City's funds (including the purchase, sale, or exchange of securities), the monitoring and reviewing of all investments for consistency under this Investment Policy, and the establishment of a system of controls to regulate the activities of subordinate officials.

The Treasurer shall have the responsibility to execute investment transactions on a day to day basis. When circumstances warrant, the responsibility to execute investment transactions may be delegated to the Deputy City Treasurer or to the City Treasurer's authorized designee. However, each and every transaction must be approved by the City Treasurer.

Any persons authorized to make investment decisions on behalf of the City, shall be subject to daily oversight and monitoring by the City Treasurer or the Treasurer's Office in order to insure full and complete compliance with this Investment Policy and the Government Code of the State of California, relating to the deposit and investment of funds and local agency finances.

NO PERSON MAY ENGAGE IN AN INVESTMENT TRANSACTION EXCEPT AS PROVIDED UNDER THE LIMITS OF THIS POLICY.

Resolution No. 2022-22

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Investment Policy 2022/2023

5.0 INVESTMENT PROGRAM

5.1 Investment in Long Term Securities
The City Treasurer and the authorized designees of the City Treasurer shall actively manage the City's portfolio of investments in order to take advantage of changing economic conditions and to insure that the liquidity needs of the City are satisfied. As part of the City's investment program, the City Treasurer has the express authority to make investments in securities that have a term, or a term remaining to maturity, at the time of investment, in excess of five years, as long as such investments, taken in the aggregate in relation to the City's entire investment portfolio, do not adversely impact the ability to satisfy the liquidity needs of the City and its funds and enterprises.

Notwithstanding anything contained in this Investment Policy to the contrary, it is the policy of the City to limit the investment of money in the Electric Fund, including operating, reserve and surplus funds, in an amount up to one hundred million dollars ($100,000,000), to investments otherwise permitted for such Fund under this Investment Policy which mature no later than five years from the time of such investment.

5.2 Active Portfolio Management
The City Treasurer has the express authority to sell, as he deems prudent, any securities in the City's portfolio of investments prior to the maturity date of the particular security. The City Treasurer has the express authority to invest in, as he deems prudent, any security authorized by this Investment Policy with the objective of selling that same security prior to its maturity date.

The City Treasurer's authority to buy and sell securities for investment on behalf of the City includes the authorization to buy and sell the same security on the same trading day.

6.0 INSTRUMENTS AUTHORIZED FOR INVESTMENT
The City, having money in a sinking fund of, or surplus money in, its treasury not required for the immediate needs of the City may invest any portion of the money that it deems wise or expedient in those investments set forth below. If the City purchases or obtains any securities prescribed in this Section 6.0, in a negotiable, bearer, registered, or nonregistered format, the City shall require delivery of the securities to the City, including those purchased for the City by financial advisors, consultants, or managers using the City's funds, by book entry, physical delivery, or by third party custodial agreement. The transfer of securities to the Counterparty bank's customer book entry account may be used for book entry delivery. For purposes of this Section 6.0, "Counterparty" means the other party to the transaction. A Counterparty bank's trust department or separate safekeeping department may be used for the physical delivery of the security if the security is held in the name of the City.

Investments may be made in any security authorized by this Section 6, and by Section 53601 of the California Government Code, that has at the time of investment, a term, or a term remaining to maturity, in excess of five years, as long as such investment comports with the policies and objectives of this Investment Policy and the provisions of the California Government Code.

Resolution No. 2022-22

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Investment Policy 2022/2023

6.1 Bonds Issued by the City
Bonds issued by the City, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by the City or by a department, board, agency, or authority of the City.

6.2 United States Treasury Bonds
United States Treasury notes, bonds, bills, or certificates of indebtedness, or those for which the faith and credit of the United States are pledged for the payment of principal and interest.

6.3 Bonds of the State of California
Registered State warrants or treasury notes or bonds of the State, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by the State or by a department, board, agency, or authority of the State.

6.4 Bonds of State of California Local Agencies
Bonds, notes, warrants, or other evidences of indebtedness of any local agency within this state, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by the local agency, or by a department, board, agency, or authority of the local agency.

6.5 Obligations Issued by Federal Agency or United States Government - Sponsored Enterprises
Federal agency or United States government-sponsored enterprise obligations, participations, or other instruments, issued by, or fully guaranteed as to principal and interest by federal agencies or United States government-sponsored enterprises.

6.6 Bills of Exchange
Bankers’ acceptances otherwise known as bills of exchange or time drafts that are drawn on and accepted by a commercial bank. Purchases of bankers’ acceptances may not exceed 180 days maturity or 40 percent of the City's surplus money that may be invested pursuant to this Section 6.

However, no more than 30 percent of the City's money may be invested in the bankers’ acceptances of any one commercial bank pursuant to this Investment Policy.

6.7 Commercial Paper
Commercial paper of "prime" quality of the highest ranking or of the highest letter and numerical rating as provided for by Moody's Investors Service, Inc. ("Moody's"), or the Standard & Poor's Corporation ("S&P") or Fitch Financial Services, Inc. ("Fitch"). The corporation that issues the commercial paper shall be organized and operating within the United States, shall have total assets in excess of five hundred million dollars ($500,000,000) and shall issue debt, other than Resolution No. 2022-22

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Investment Policy 2022/2023
commercial paper, if any, that is rated "A" or higher by Moody's, S&P or Fitch. Eligible commercial paper shall have a maximum maturity of 270 days or less. The City may invest no more than 25% of its money in eligible commercial paper. The City may purchase no more than 10 percent of the outstanding commercial paper of any single corporate issue.

6.8 Negotiable Certificates of Deposit
Negotiable certificates of deposit issued by a nationally or state-chartered bank, savings association or a federal association (as defined by Section 5102 of the California Financial Code), a state or federal credit union, or by a state-licensed branch of a foreign bank. Purchases of negotiable certificates of deposit may not exceed 30 percent of the City's money which may be invested pursuant to this Investment Policy. For purposes of this Section 6.8, negotiable certificates of deposit do not come within Article 2 of the California Government Code (commencing with Section 53630), except that the amount so invested shall be subject to the limitations of California Government Code Section 53638 concerning maximum deposits. The City Council of the City and the City Treasurer or other official of the City having legal custody of the money are prohibited from investing City funds, or funds in the custody of the City, in negotiable certificates of deposit issued by a state or federal credit union if a member of the City Council of the City, or any person with investment decision making authority in the City Administrator's Office, Budget-Auditor's Office, Treasurer's Office or Finance Department of the City, also serves on the board of directors, or any committee appointed by the board of directors, or the credit committee or the supervisory committee of the state or federal credit union issuing the negotiable certificates of deposit.

6.9 Repurchase, Reverse Repurchase and Securities Lending Agreements

6.9.1 Investments in repurchase agreements or reverse repurchase agreements or securities lending agreements of any securities authorized by this Section 6, as long as the agreements are subject to this Section 6.9, including, the delivery requirements specified in this Section 6.9.

6.9.2 Investments in repurchase agreements may be made, on any investment authorized in Section 6, when the term of the agreement does not exceed one year. The market value of securities that underlay a repurchase agreement shall be valued at 102 percent or greater of the funds borrowed against those securities and the value shall be adjusted no less than quarterly. Since the market value of the underlying securities is subject to daily market fluctuations, the investments in repurchase agreements shall be in compliance if the value of the underlying securities is brought back up to 102 percent no later than the next business day.

6.9.3 Reverse repurchase agreements or securities lending agreements may be utilized only when all of the following conditions are met:

6.9.3.1 The security to be sold on reverse repurchase agreement or securities lending agreement has been owned and fully paid for by the City for a minimum of 30 days prior to sale.

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6.9.3.2 The total of all reverse repurchase agreements and securities lending agreements on investments owned by the City does not exceed 20 percent of the base value of the portfolio.

6.9.3.3 The agreement does not exceed a term of 92 days, unless the agreement includes a written codicil guaranteeing a minimum earning or spread for the entire period between the sale of a security using a reverse repurchase agreement or securities lending agreement and the final maturity date of the same security.

6.9.3.4 Funds obtained or funds within the pool of an equivalent amount to that obtained from selling a security to a counterparty by way of a reverse repurchase agreement or securities lending agreement, shall not be used to purchase another security with a maturity longer than the maturity of the reverse repurchase agreement or securities lending agreement.

6.9.4 Investments in reverse repurchase agreements, securities lending agreements or similar investments in which the City sells securities prior to purchase with a simultaneous agreement to repurchase the security, may only be made upon prior approval of the City Council of the City and shall only be made with primary dealers of the Federal Reserve Bank of New York or with a nationally or statechartered bank that has or has had a significant banking relationship with the City.

6.9.4.1 For purposes of this Section 6.9, "significant banking relationship" means any of the following activities of a bank:

6.9.4.1.1 Involvement in the creation, sale, purchase, or retirement of the City's bonds, warrants, notes, or other evidence of indebtedness.

6.9.4.1.2 Financing of the City's activities.

6.9.4.1.3 Acceptance of the City's securities or funds as deposits.

6.9.5 Definitions

6.9.5.1 Repurchase Agreement
Repurchase Agreement means a purchase of securities by the City pursuant to an agreement by which the counterparty seller will repurchase the securities on or before a specified date and for a specified amount and the counterparty will deliver the underlying securities to the City by book entry, physical delivery, or by third party custodial agreement. The transfer of underlying securities to the counterparty bank's customer book-entry account may be used for book-entry delivery.

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6.9.5.2 Securities
Securities mean securities of the same issuer, description, issue date, and maturity.

6.9.5.3 Reverse Repurchase Agreement
Reverse Repurchase Agreement means a sale of securities by the City pursuant to an agreement by which the City will repurchase the securities on or before a specified date and includes other comparable agreements.

6.9.5.4 Securities Lending Agreement
Securities Lending Agreement means an agreement under which the City agrees to transfer securities to a borrower who, in turn, agrees to provide collateral to the City. During the term of the agreement, both the securities and the collateral are held by a third party. At the conclusion of the agreement, the securities are transferred back to the City in return for the collateral.

6.9.5.5 Base Value
Base Value of the City's pool portfolio shall be that dollar amount obtained by totaling all cash balances placed in the pool by all pool participants, excluding any amounts obtained through selling securities by way of reverse repurchase agreements or other similar borrowing methods.

6.9.5.6 Spread
Spread means the difference between the cost of funds obtained using the reverse repurchase agreement and the earnings obtained on the reinvestment of the funds.

6.10 Medium-Term Notes
Medium-term notes, defined as all corporate and depository institution debt securities with a maximum remaining maturity of five years or less, issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States. Notes eligible for investment under this Section 6.10 shall be rated "A" or better by a nationally recognized rating service. Purchases of medium-term notes shall not include other instruments authorized by Section 6 and may not exceed 30 percent of the City's surplus money which may be invested.

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6.11 Diversified Management Company Shares

6.11.1 Shares of beneficial interest issued by diversified management companies that invest in the securities and obligations as authorized by Sections 6.1 to 6.10, inclusive, or Sections 6.13 or 6.14 and that comply with the investment restrictions of Article 1 (commencing with Section 53600 of the California Government Code) and Article 2 (commencing with Section 53630 of the California Government Code). However, notwithstanding these restrictions, a counterparty to a reverse repurchase agreement is not required to be a primary dealer of the Federal Reserve Bank of New York if the company's board of directors finds that the counterparty presents a minimal risk of default, and the value of the securities underlying a repurchase agreement may be 100 percent of the sales price if the securities are marked to market daily.

6.11.2 Shares of beneficial interest issued by diversified management companies that are money market funds registered with the Securities and Exchange Commission under the Investment Company Act of 1940 (15 U.S.C. Sec. 80a-l, et seq.).

6.11.3 If investment is in shares issued pursuant to Section 6.11.1, the company shall have met either of the following criteria:

6.11.3.1 Attained the highest ranking or the highest letter and numerical rating provided by not less than two nationally recognized statistical rating organizations; or

6.11.3.2 Retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years' experience investing in the securities and obligations authorized by Sections 6.1 to 6.10, inclusive, or Sections

6.13 or 6.14 and with assets under management in excess of five hundred million dollars ($500,000,000).

6.11.4 If investment is in shares issued pursuant to Section 6.11.2, the company shall have met either of the following criteria:

6.11.4.1 Attained the highest ranking or the highest letter and numerical rating provided by not less than two nationally recognized statistical rating organizations; or

6.11.4.2 Retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years' experience managing money market mutual funds with assets under management in excess of five hundred million dollars ($500,000,000).

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6.11.5 The purchase price of shares of beneficial interest purchased pursuant to this Section 6.11 shall not include any commission that the companies may charge and shall not exceed 20 percent of the City's surplus money that may be invested pursuant to this Section 6. However, no more than 10 percent of the City's surplus funds may be invested in shares of beneficial interest of any one mutual fund pursuant to Section 6.11.1.

6.12 Moneys Pledged to Payment or Security of Bonds of the City Moneys held by a trustee or fiscal agent and pledged to the payment or security of bonds or other indebtedness, or obligations under a lease, installment sale, or other agreement of the City, or certificates of participation in those bonds, indebtedness, or lease installment sale, or other agreements, may be invested in accordance with the statutory provisions governing the issuance of those bonds, indebtedness, or lease installment sale, or other agreement, or to the extent not inconsistent therewith or if there are no specific statutory provisions, in accordance with the ordinance, resolution, indenture, or agreement of the City providing for the issuance.

6.13 Bonds Secured by Government Code Section 53651 Eligible Securities Notes, bonds, or other obligations that are at all times secured by a valid first priority security interest in securities of the types listed by Section 53651 of the California Government Code as eligible securities for the purpose of securing local agency deposits having a market value at least equal to that required by Section 53652 of the California Government Code for the purpose of securing local agency deposits. The securities serving as collateral shall be placed by delivery or book entry into the custody of a trust company or the trust department of a bank which is not affiliated with the issuer of the secured obligation, and the security interest shall be perfected in accordance with the requirements of the Uniform Commercial Code or federal regulations applicable to the types of securities in which the security interest is granted.

6.14 Mortgage Pass-Through Security
Any Mortgage pass-through security, collateralized mortgage obligation, mortgage-backed or other pay-through bond, equipment lease-backed certificate, consumer receivable pass-through certificate, or consumer receivable-backed bond, in each case, of a maximum of five years maturity. Securities eligible for investment under this Section 6.14 shall be issued by an issuer having an "A" or higher rating for the issuer's debt as provided by a nationally recognized rating service and rated in a rating category of "AA" or its equivalent or better by a nationally recognized rating service. Purchase of securities authorized by this Section 6.14 may not exceed 20 percent of the City's surplus money that may be invested pursuant to Section 6.

6.15 Pooled Investment Funds

6.15.1 County Pooled Investment Funds in accordance with the laws and regulations governing those Funds and Section 53684 of the California Government Code.

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6.15.2 State of California pooled “Local Agency Investment Fund” in accordance with the laws and regulations governing those Funds and Section 16429.1 et seq. of the California Government Code.

7.0 DESIGNATED ENTITIES FROM WHOM THE CITY MAY

PURCHASE AUTHORIZED INVESTMENTS
The purchase by the City of any investment authorized pursuant to California Government Code Sections 53601 or 53601.1, not purchased directly from the issuer, shall be purchased either from an institution licensed by the State as a broker-dealer, as defined in Section 25004 of the California Corporations Code, or from a member of a federally regulated securities exchange, from a national or state-chartered bank, from a savings association or federal association (as defined by Section 5102 of the California Financial Code) or from a brokerage firm designated as a primary government dealer by the Federal Reserve Bank.

8.0 PROHIBITED INVESTMENTS

8.1 The City shall not invest any funds pursuant to this Investment Policy or pursuant to California Government Code, Article 2, Deposit of Funds (commencing with Section 53630) in inverse floats, range notes, or mortgage-derived, interest-only strips.

8.2 The City shall not invest any funds pursuant to this Investment Policy or pursuant to California Government Code, Article 2, Deposit of Funds (commencing with Section 53630) in any security that could result in zero interest accrual if held to maturity. However, the City may hold prohibited instruments currently owned by the City until their maturity dates. The limitation in this Section 8.2 shall not apply to City investments in shares of beneficial interest issued by diversified management companies registered under the Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1, and following) that are authorized for investment pursuant to Section 6.11.

8.3 The City is prohibited under this policy from engaging in speculative activities typical to many organizations orientated toward profit maximization. Taking risks in order to arbitrage market opportunities, or risks unrelated to the City’s normal business activities is prohibited.

These include investments in derivatives such as contracts-options, swaps, and futures/forward contracts without a clear, identifiable, justifiable, and effective hedgeable item.

8.4 Prior to entering into an allowable hedgeable transaction, such as a swap agreement, the City shall review legal documentation subject to the transaction to understand the terms of the transaction, the risks taken on by the parties, and the remedies available to them. These documents may include, among others, the ISDA Master Agreement, Schedule, Confirmation and Credit Support Annex. Such documentation will be retained to support the basis of the decision.

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9.0 ALLOWABLE HEDGABLE TRANSACTIONS

9.1 Interest rate swap contract in conjunction with debt issuances shall be reviewed as part of the City‘s overall financial position considering both the potential benefits and potential risks.

Prior to submitting a swap agreement for City Council’s approval, the potential benefits and potential benefits are to be analyzed. The results of the analysis shall be provided to City Council at the time of approval.

9.2 Potential benefits: Accessing the swap market increases the array of options available to the City for hedging risk. Using swaps, can in some circumstances, reduce costs or improve cash flows, thereby increasing resources available for debt service, other public purposes, and contributing to the City’s overall mission. The City shall consider the following benefit factors when determining the applicability as part of different strategies:

9.2.1 Reducing borrowing costs, by using floating-to-fixed rate swaps combined with variable rate bonds to achieve costs lower than those available with fixed-rate bonds, or by using fixed-to-floating rate swaps to create synthetic floating rate debt and achieve lower costs without external liquidity or remarketing support.

9.2.2 Improving cash flows, by using basis swaps where the City expects the payments received from the counterparty to be greater, over time, than the payments made to the counterparty.

9.2.3 Locking in current rates for future transactions, through forward-starting swaps or swaptions.

9.2.4 Matching assets and liabilities, by using a swap contract so that fixed-rate debt is matched with fixed-rate assets and floating-rate debt is matched with floatingrate assets.

9.2.5 The City shall take into account the potential benefits of swap transactions in conjunction with debt issuances by recognizing that in the proper circumstances they can have a positive effect on the City’s financial position.

9.3 Potential Risks: Interest rate swaps involve certain risks that shall be considered when doing an analysis. Prior to submitting a swap agreement to City Council for approval, the potential risk factors will be examined and analyzed. They will be presented as part of the overall staff report in order to provide a full perspective of both the risks and benefits. There are five potential risk factors that encompass ten different separate elements:

9.3.1 Risk Factor No. 1: Cash flows and/or net revenues

9.3.1.1 Basis Risk: The risk that variable rate payments received will be less than variable rate payments they were designed to offset, because the variable rate payments received and the variable rate payments owed are based on different indexes, and the ratio between those indexes changes over time.

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9.3.1.2 Tax Risk: The risk that the City’s costs will raise because federal income tax rates fall, or because the tax exemption for municipal debt is eliminated or is modified in a way that reduces its value.

9.3.1.3 Yield Curve Risk: The risk is that the City’s cash flow will be adversely affected because the slope of the yield curve is not as the City anticipated when entering into the swap. This is an aspect of basis risk that may affect the termination value for swaps contacts.

9.3.1.4 Amortization Mismatch: The risk that the notional amount of the swap and the outstanding principal amount of the debt intended to be hedged will no longer be equal. Such mismatch may be a feature of the transaction at its inception or may be caused by subsequent events, such as redemption of bonds before maturity or termination of the swap before bond maturity.

9.3.2 Risk Factor No. 2: Balance Sheet

9.3.2.1 Termination Risk: The risk that the City will be required to make a payment based on the market value of the swap in connection with an unforeseen termination of the swap, at a time when the market value is negative to the issuer.

9.3.2.2 Collateral Posting Risk: The risk that the City will be required to post collateral, upon a downgrade of its credit rating or other trigger event a time when the market value is negative.

9.3.3 Risk Factor No. 3: Counterparty Risk

9.3.3.1 The risk that the counterparty will no longer perform its obligations under the contract, or that the counterparty’s credit quality will decline to the point where there is uncertainty about its ability to perform.

9.3.4 Risk Factor No. 4: Future Financial Management

9.3.4.1 Market Access Risk: The risk that the City will be unable to obtain derivatives contracts when needed in the future on reasonably favorable terms, including new derivatives upon early or scheduled termination of existing hedges (“Rollover Risk”).

9.3.4.2 Loss of Flexibility: The risk that a swap contract will limit the issuer’s debt management options in the future due to an inability to modify or terminate the swap without cost.

9.3.5 Risk Factor No. 5: Management Complexity

9.3.5.1 The risk that certain swap contracts may add a level of complexity to financial management that will require ongoing commitment of additional resources. The utilization of a financial advisory firm to assist or review transactions prior to entering into an arrangement may be required.

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10.0 STATEMENTS OF INVESTMENT ACTIVITIES

10.1 Annual Statement of Investment Policy
The City Treasurer shall annually render to the City Council a statement of investment policy, which the City shall consider at a public meeting. Any changes in the investment policy shall also be considered by the City Council of the City at a public meeting.

10.2 Quarterly Report of Investments
The City Treasurer shall render a quarterly report to City Council. The quarterly report shall be so submitted within 30 days following the end of the quarter covered by the report. This report shall include the type of investment, issuer, date of maturity par and dollar amount invested on all securities, investments and moneys held by the City and shall additionally include a description of any of the City's funds, investments, or programs that are under the management of contracted parties, including lending programs. With respect to all securities held by the City and under management of any outside party that is not also a local agency or the State of California Local Agency Investment Fund (LAIF), the report shall also include a current market value as of the date of the report, and shall include the source of this same valuation.

For local agency investments that have been placed in the State of California Local Agency Investment Fund (LAIF), in National Credit Union Share Insurance Fund-insured accounts in a credit union, in accounts insured or guaranteed pursuant to Section 14858 of the California Financial Code, or in Federal Deposit Insurance Corporation-insured accounts in a bank or savings and loan association, in a California County investment pool, or any combination of these, the City Treasurer and the Treasurer's Department may supply to the City Council the most recent statements received by the City from these institutions.

The quarterly report shall state compliance of the portfolio to this Investment Policy, or the manner in which the portfolio is not in compliance. The quarterly report shall include a statement denoting the ability of the City to meet its budgeted expenditure requirements for the next six months, or provide an explanation as to why sufficient money shall, or may, not be available. In the quarterly report, a subsidiary ledger of investments may be used in accordance with accepted accounting practices.

10.3 Monthly Investment Transaction Report
The authority of the City Council to invest or to reinvest funds of the City, or to sell or exchange securities so purchased has been delegated for a one-year period by the City Council to the City Treasurer, who shall thereafter assume full responsibility for those transactions and shall make a timely monthly report of those transactions to the City Council.

11.0 CONFLICT OF INTEREST
No City employee shall, outside of regular working hours, engage in any professions, trade, business or occupation which is incompatible or involves a conflict of interest with his/her duties as a City Officer or employee.

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12.0 PUBLIC INQUIRY
The City Treasurer's portfolio and related transactions are a matter of public record. Any member of the public may receive a copy of the portfolio or this Investment Policy by requesting a copy at the Treasurer's Office. The Treasurer may charge a fee for the copy, as allowed by law.

13.0 ANALYSIS OF PROSPECTIVE INVESTMENTS
Due to the complexity of the various investment instruments available and uncertainty of market conditions the Treasurer may seek professional advice in making investment decisions in order to optimize investment selections.

14.0 SAFEKEEPING
As required by California Government Code Section 53601 all investment instruments in a negotiable, bearer, registered, or nonregistered format, shall be delivered to the City's custodial bank by using book entry or physical delivery. The "delivery vs. payment" purchase procedure shall be used.

The City’s custodial bank for safekeeping of the bonds, notes, bills, debentures, obligations, certificates of indebtedness, warrants, or other evidences of indebtedness in which the money of the City is invested pursuant to this policy shall be one of the following: (a) a federal or state association (as defined by Section 5102 of the Financial Code), (b) a trust company or a state or national bank located within California, (c) the Federal Reserve Bank of San Francisco or any branch thereof within California, (d) any Federal Reserve Bank, or (e) with any state or national bank located in any city designated as a reserve city by the Board of Governors of the Federal Reserve System.

15.0 BROKER/DEALER AND DEPOSITORY INSTITUTION

RELATIONSHIPS

15.1 Approved List of Broker/Dealer Institutions
Subject to Section 7.0, the City Treasurer shall approve and maintain a list of broker/dealers and depository institutions authorized to provide investment and other services to the City. All investments must be made with institutions that have been approved by the City Treasurer prior to investing.

15.2 Broker/Dealer Commissions and Fees Chargeable to the City All broker/dealers who transact with the City and buy and sell securities on the City's behalf shall earn a commission or charge a fee not to exceed an amount deemed prudent and reasonable by the Financial Industry Regulatory Authority (“FINRA”) and what is customary in the industry for the types of securities being purchased by the City.

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15.3 Deposit and Investment of Funds of the City
All depository institutions that do business with the City shall be in compliance with the requirements of Article 2, commencing with Section 53630, of the Government Code of the State of California, concerning the deposit of funds, including the overall creditworthiness and credit ratings requirements of the sections of that Article.

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City Council Agenda Item Report
Submitted by: Veronica Petrosyan
Submitting Department: Health and Environmental Control Department Meeting Date: June 21, 2022

SUBJECT
University of Southern California (USC) Keck School of Medicine Internship Affiliation Agreement
Recommendation:

Approve and authorize the City Administrator to execute the Internship Affiliation Agreement with USC Keck School of Medicine in substantially the same form as submitted.

Background:

The USC Master of Public Health (MPH) program offers a rigorous curriculum that attracts dedicated and ambitious professionals with a passion to serve in the public health arena. The program’s core coursework aims to develop key public health competencies and skills using cases and examples from industry, ranging from local to global.

An integral part of the USC MPH program, the university's field internship program is a structured and supervised professional experience with an approved agency for which students receive academic credit. As a working partnership between students and public health agencies, the internship offers students hands-on experience in an area of public health, including city, county, state, federal or community-based agencies. The goal of the internship is to further students’ practical experience while enhancing the work of public health. Through the internship, students have the opportunity to demonstrate an integration of coursework into a real-world setting, preparing them for a professional career in public health.

USC has developed an innovative internship program that will serve as a national model for recruiting and training a diverse pool of MPH students. The proposed internship program partnership provides the City an opportunity to prepare and encourage the next generation of public health professionals, and allows exposure to Vernon's unique operation, potentially motivating students to consider employment with public health departments in underrepresented and underserved communities. Staff recommends the approval of the internship affiliation agreement. The proposed agreement has been reviewed and approved as to form by the City Attorney's Office.

Fiscal Impact:

There is no fiscal impact associated with this report.

Attachments:

1. Internship Affiliation Agreement with USC Keck School of Medicine

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INTERNSHIP AFFILIATION AGREEMENT
This INTERNSHIP AFFILIATION AGREEMENT (“Agreement”) is entered into on the 21st day of June, 2022, by and between the University of Southern California through its Keck School of Medicine, whose principal place of business is 2001 N Soto Street Suite 201D, Los Angeles, CA, 90032 (hereinafter called the “University”), and the City of Vernon, a California charter City and California municipal corporation (hereinafter called the “Facility”), whose principal place of business is 4305 South Santa Fe Avenue, Vernon, CA 90058.

Recitals
WHEREAS, the University has an undergraduate and graduate curriculum in preventive medicine and other public health programs and field experience is a required and integral component of those curricula; and
WHEREAS, the University desires the cooperation of Facility in implementing a field internship program in preventive medicine and other public health programs at Facility and training University students in the practical applications of preventive medicine and other public health programs (“Internship Program”); and
WHEREAS, Facility will benefit from the contributions of the students participating in the Internship Program; and
WHEREAS, Facility wishes to assist the University in implementing an Internship Program.; NOW, THEREFORE, in consideration of the mutual agreements set forth herein, the University and the Facility enter into this Agreement on the terms and conditions set forth below.

The University Rights and Responsibilities

1. To assign students to Facility who meet the University’s requirements and qualifications to participate in the Internship Program.

2. To appoint a University faculty or staff member as “Internship Director” to administer the University’s responsibilities related to the Internship Program and to oversee the students’ field experience at Facility.

3. To establish and maintain ongoing communication with the Field Supervisor, as defined below, regarding the Internship Program.

4. To notify the Field Supervisor, at a time mutually agreed upon, of the University’s planned schedule of students’ assignments, including the names of the students, level of academic preparation, and length and dates of the internship experiences.

5. To inform students that they are to obtain and maintain adequate health insurance coverage during the time that students participate in the Internship Program and to provide evidence of such coverage to Facility, at Facility’s reasonable request.

6. To ensure that all students participating in the Internship Program at Facility will have and maintain professional liability insurance through the University’s insurance coverage in the amounts set forth below.

7. To direct the assigned students to comply with the existing pertinent rules and regulations of the Facility and all reasonable directions given by qualified Facility personnel.

8. To assume responsibility for providing grades to the students in connection with the Internship Program.

9. To inform Facility in the event that a student withdraws from the Internship Program or otherwise is unable to complete the Internship Program.

Internship Affiliation Agreement with USC

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Facility Rights and Responsibilities

1. To provide one (1) qualified Facility supervisor (“Field Supervisor”) for each student enrolled in the Internship Program, such Field Supervisor to be experienced in administering and evaluating public health programs or policies. Selection of Field Supervisors will be mutually agreed upon by the University and the Facility prior to the commencement of the internship. Field Supervisors will be responsible for the supervision of students at all times while students are at the Facility.

The Field Supervisor’s responsibilities include the following:
· Orient the student to the Facility;
· Assist the student in gaining access to information and data required for the project to be completed by student;
· Monitor student’s attendance and meet with student at regular intervals; · Submit a final evaluation report of the student’s activities; and · Any other responsibilities mutually agreed upon by the parties.

2. To complete an application for field placement students and to comply with the Field Internship Learning Contract.

3. To provide field experiences in accordance with the requirements of the University’s curriculum.

On-site visits will be arranged when feasible and/or upon request by the University. Facility shall advise the University of any changes in its personnel, operation or policies which may materially affect the students’ field experiences or the Internship Program at Facility

4. To ensure that students are given duties commensurate with their skills and experience.

5. To provide the physical facilities, resources and equipment necessary to operate the Internship Program at Facility, including use of library facilities, reasonable work and storage space.

6. To determine the number of students which it can accommodate during a given period of time and notify the University promptly prior to the commencement of the Internship Program.

7. To provide the assigned students with a copy of the Facility’s existing pertinent rules and regulations with which the students are expected to comply.

8. To make available, whenever reasonably necessary, emergency health care for the assigned students, the cost of which shall be borne by the students.

9. To request the University to withdraw a student from the Internship Program at Facility when student’s performance is unsatisfactory to Facility or student’s behavior is disruptive to Facility or its patients. Facility shall state its reasons for requesting a student withdrawal in writing to the Internship Director. It is understood that except as set forth in paragraph 10 below, only the University can withdraw a student from the Internship Program at Facility.

10. To immediately remove from the Facility any student who poses an immediate threat or danger to personnel or the quality of services provided at Facility.

11. To comply with all federal, state, and local laws and ordinances concerning the confidentiality of student records.

12. To comply with all federal, state, and local laws and ordinances concerning human subject research if students participate in a research program as part of a research team.

General Provisions

1. Non-discrimination. The parties shall make no distinction or discriminate in any way among students covered by this Agreement on the basis of race, color, sex, creed, age, handicap or Internship Affiliation Agreement with USC

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Vernon City CouncilJune 21, 2022

Vernon City Council
June 21, 2022