Agenda packet — Vernon City Council, June 17, 2025 (part 2 of 3)

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CITY OF VERNON
ANNUAL

STATEMENT OF
INVESTMENT POLICY FISCAL YEAR 2025/2026
Alice Hui
Director of Finance/City Treasurer
July 1, 2025
Resolution No. 2025-019

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Exhibit A
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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. 2025-019

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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.

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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.

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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. Each and every transaction must be approved by the City Treasurer. However, the City Council hereby authorizes the Deputy City Treasurer, in the absence of the City Treasurer, to report directly to the City Council, subject to the provisions of the Charter of the City of Vernon, or the Code of the City of Vernon, or as prescribed by the City Council and to assume such other powers, duties and responsibilities of the City Treasurer as necessary concerning investment transactions or any other transaction provided for under the laws of the State of California, the Government Code of the State of California and such other powers and duties as prescribed by resolutions or ordinances adopted by the City Council.

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.

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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.

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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. 2025-019

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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 state- chartered 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 floating- rate 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 45 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.

Resolution No. 2025-019

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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.

Resolution No. 2025-019

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CITY OF VERNON
ANNUAL

STATEMENT OF

INVESTMENT POLICY
FISCAL YEAR 2025/20262024/2025
Alice HuiJoaquin Leon
Director of Finance/City TreasurerDeputy City Treasurer July 1, 20252024
..

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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 - ..

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3.0 OBJECTIVE

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

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5.0 INVESTMENT PROGRAM

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.

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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.

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Investment Policy 2025/2026
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.

6.9 Repurchase, Reverse Repurchase and Securities Lending Agreements

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.

6.9.4 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

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

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.

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6.11 Diversified Management Company Shares

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

6.13 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

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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

8.0 PROHIBITED INVESTMENTS

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

8.4Priortoenteringintoanallowablehedgeabletransaction,suchasaswapagreement,the Cityshall review legal documentationsubjecttothe 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.

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.

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

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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.

9.3.2 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

9.3.4 Risk Factor No. 4: Future Financial Management

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

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10.0 STATEMENTS OF INVESTMENT ACTIVITIES

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15.0 BROKER/DEALER AND DEPOSITORY INSTITUTION

RELATIONSHIPS

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City Council Agenda Report
Meeting Date: June 17, 2025
From: Alice Hui, Director of Finance
Department: Finance
Submitted by: Javier Valdez, Risk Manager
Subject
Property and Casualty Insurance Placements for Fiscal Year 2025-26 Recommendation
Approve and authorize the City Administrator to execute all related documents to procure the City’s annual insurance coverage for Fiscal Year 2025-26, effective July 1, 2025, through June 30, 2026, for a total amount not-to-exceed $5,662,462.

Background
The City retained Aon Risk Insurance Service West, Inc. (Aon) as the City’s insurance broker to evaluate the appropriate insurance coverages and carriers for the upcoming fiscal year. The insurance broker worked diligently with staff to identify suitable coverage types, coverage limits, self-insured retentions (deductibles), and competitive premium rates during the annual renewal process. This included soliciting and evaluating quotes from both existing and prospective insurance carriers, with up to 20 carriers being interviewed for certain coverage types. As part of this process, Aon shared relevant financial and claims data with insurers to obtain competitive pricing and favorable terms. The final placement and coverage negotiation will be completed on or before June 29, 2025, ensuring the policies are bound in time for the July 1, 2025, effective date.

A detailed summary of the proposed coverage types and estimated premiums is provided in the attached FY 2025-26 Insurance Premiums Schedule.

Several factors have contributed to premium increases over the previous fiscal year, such as the devastating wildfires in Los Angeles, inflation, accidents/significant losses, and labor shortage. More details are as follows: • Stand-alone Law Enforcement liability Coverage - Higher premiums driven by significant settlements and high-dollar verdicts in California.
• Accidents – An increase in accident claims, particularly those resulting in fatalities or nuclear verdicts, leads to significant payouts for insurance companies. In California, auto accidents have surpassed law enforcement claims as the most costly settlements. • Excess liability coverage - The most significant factors driving excess liability coverage costs, specifically in California, are automobile and law enforcement liability verdicts, medical inflation, and capacity. The amount of funds carriers can offer to insurance has dramatically decreased.
• Reinsurance Costs – The rising cost of reinsurance used by insurers as backup coverage has been fueled by a surge in billion-dollar property damage events and large liability verdicts, with costs rising more than 60% since the pandemic.

Pursuant to Vernon Municipal Code Section 3.32.110 (A)(8), insurance contracts are exempt from the competitive bidding requirements. ..

Item 10 Page 1 of 3
Fiscal Impact
The fiscal impact is not-to-exceed $5,662,462. Sufficient funds are available in the General Fund, Finance, Insurance – Property/Crime Account No. 011-010-130-520035, Electric Fund, Administration, Insurance – Property/Crime Account No. 055-050-580-520035, and Electric Fund, Malburg Generation Station, Insurance – Property/Crime Account No. 055-050-586- 520035 for FY 2025-26.

Attachments

1. FY 2025-26 Insurance Estimated Premium Schedule ..

Item 10 Page 2 of 3
2025-26

ESTIMATED

PREMIUM
$35,161.28
$134,303.44
$68,311.53
$34,000.32
$2,220.38
$39,075.82
$74,139.27
$464,869.34
$332,186.70
$171,451.20
$120,015.84
$201,643.04
$3,259.57
$1,680,637.73
$1,020,807.82
$721,091.64
$2,091,526.72
$148,397.89
$2,961,016.25
GRAND TOTAL $5,662,461.80
Property Insurance $268,119,700 All Risk / $25,000,000 EQ $100,000,000 Flood & $53,864,503 BI
DIC (Excess EQ) $25 Million Limit
TOTAL

VERNON PUBLIC UTILITIES
Property - Power Generating
$100 Million Limit;
Various Deductibles

MALBURG GENERATING STATION
Excess Liability $100 Million Limit
2nd Excess Liability $5 Million Limit excess $5 Million 3rd Excess Liability $5 Million Limit excess $10 Million 4th Excess Liability $5 Million Limit excess $15 Million Excess Workers Comp
$50 Million Limit;
$1 Million Deductible except
$1,500,000 Deductible for Presumptive Losses
Special Event GL
incl. Spectator Accident
$2 Million Limit;
$1 Million Each Occurrence
TOTAL
Cyber Liability
$5 Million Limit;
$100,000 Deductible
Pollution Liability
$5 Million Limit;
$25,000 Deductible except
$50,000 Deductible (Utility Locations)
$100,000 Deductible (Natural Gas Pipeline)
1st Excess Liability
$5 Million Limit;
$2 Million Deductible except
$3 Million Deductible for Law Enforcement
Standalone Terrorism
and Sabotage
$100 Million Terrorism & Sabotage (Property)
$5 Million Terrorism & Sabotage (Liability)
$5 Million Active Shooter & Malicious Mischief
$0 Deductible
Auto Physical Damage & CE
$10 Million Limit;
$5,000 Deductible
Commercial Crime
$1 Million Limit;
$25,000 Deductible
Property - Municipal
$82,694.280 Limit;
$25,000 Deductible

CITY OF VERNON INSURANCE PREMIUM SCHEDULE

LINE OF COVERAGE COVERAGE / DEDUCTIBLE
Property - Residential
$7,009,890 Limit;
$2,500 Deductible
..

Item 10 Page 3 of 3
City Council Agenda Report
Meeting Date: June 17, 2025
From: Robert Sousa, Chief of Police
Department: Police
Submitted by: Gustavo Herrera, Lieutenant - Services Division Subject
Purchase/Installation of Emergency Equipment for New Patrol Tesla Vehicle Recommendation
A. Approve and authorize issuance of a purchase order with Unplugged Performance for the purchase and installation of an emergency equipment package in a new Tesla patrol vehicle for a total amount not exceed $64,926; and
B. Authorize a contingency amount of ten (10%) percent or $6,492.60, for pricing fluctuations and grant authority to the City Administrator to issue a Change Order for an amount up to the contingency amount, if necessary.

Background
The City recently approved the purchase of a new patrol Tesla vehicle, and as a result, the Police Department (PD) is now seeking approval to have the Tesla vehicle outfitted with the needed emergency equipment (lighting, push bumper, prisoner transport seat & partition, gun racks, consoles, cargo storage system, radio, cameras, window guards, speakers, antennas, etc.). This type of installation requires a unique vendor that is certified in the installation of several products from various manufacturers.

The outfitting requirements for the Tesla patrol vehicles are highly specialized and involve proprietary technologies. Unplugged Performance is the only entity with the capabilities to customize the Tesla vehicle to the PD’s exact specifications without voiding the manufacturer warranty from Tesla. This includes integrating specific technologies, software, safety features, and solutions designed specifically for Tesla vehicles in a law enforcement application. This distinction makes them a sole source one-stop shop should the PD need a warranty service for the various equipment.

The proposed purchase is exempt from competitive bidding per Vernon Municipal Code Section

3.32.110 (A)(2) – Contracts for supplies, equipment, or services available from only one vendor or for unique services, as Unplugged Performance is the only vendor that can meet the PD’s vehicle outfitting requirements without voiding the Tesla’s manufacturer warranty on the vehicle.

Pursuant to VMC Section 3.32.030(B), City Council approval is required if, in the twelve (12) months preceding the effective date of a proposed new, renewed, or otherwise amended contract, the City has paid or awarded the vendor more than $100,000. Within the past twelve (12) months, the City has paid or awarded Unplugged Performance a total of approximately $61,882.38 in contracts. If approved, this purchase would push this vendor over the $100,000 yearly threshold. The quote from Unplugged Performance has been reviewed and approved as to form by the City Attorney.

Fiscal Impact
The fiscal impact is not-to-exceed $71,418.60. Sufficient funds are available in the General Fund Police Department Asset Forfeiture Funds (Equipment), Project No. 00116002-6060-6130, PD Vehicle Expense Account 011-795-300-527000. ..

Item 11 Page 1 of 7
Attachments

1. Unplugged Performance Quote #4983 – Vernon PD ..

Item 11 Page 2 of 7
Vernon Police Department
4305 Santa Fe Ave
Vernon, CA 90058
Other: (323) 587-5171
UP.FIT Patrol Model Y Patrol - Upfit Only
Exterior:
- UP.FIT 18” Forged Police Wheel + Pursuit Rated Tires (Tougher than steel, with better drag-coefficient and increased side-wall for patrol use)
- UP.FIT Pursuit PLUS Package incl. Unplugged Performance 6 piston Big Brake Kit with high temp fluid, upgraded stainless brake lines, thermally upgraded pads, and upgraded rotors
- UP.FIT Ballistics Protection NIJ 3A (IIIA) rated (front driver & passenger doors) - Front-mounted push bar with bumper guards & multi-angle warning lights - Fender-mounted spotlight & wigwag system (remotely operated) - Custom-integrated high & low-frequency siren system
- Roof-mounted, low-profile light bar with color warning lights, + scene lighting/alley lights - Custom-engineered side-skirt color warning lights + scene lighting/alley lights - C-Pillar color warning lights
- Rear-facing hatch warning lights + hatch open warning lights - UP.FIT Base Graphics Package:
- Color printed department seal, die-cut graphics and words (<6" roundel) with 1-2 solid colors, conspicuity markings, door color change options
Interior:
- Patrol-ready center console, with T-rail mounting system - 21 Button & toggle switch lights and siren controller (fully customizable) - Remote fender-spotlight controller
- USB-C accessory charging outlets (x2)
- Motorola Radio preparation (Motorola equipment not included) - High-power radio-ready/compliant & tested
- Laptop/MDT mount installation (customer provides dock and power equipment) - Communication antennas in discreet, non-visible placement - Front driver & passenger area red/white switchable lighting - Front compartment shotgun mount
- Front compartment rifle mount
- Rear seat single prisoner partition
- Replacement rear door cards
- Whelen Core lights & siren computer (including programming) - Rear hatch-mounted cargo area red/white switchable lighting - UP.FIT Wiring package
- UP.FIT #InsomniaMode to keep power systems duty-ready Additional Available Options:
- UP.FIT Custom Graphics Package
- Gradient and multi-layer color designs, additional colors, reflective material, department seal and words (<24" roundel) - Window tint application
- Digital license plate
- UP.FIT Software Suite including vehicle monitoring, data reporting, analytics, anti-theft mode, live map with vehicle location information, ability to distribute "digital" keys wirelessly, and more - Fleet management guidance
- UP.FIT Enhanced Training & EVOC Course, available regionally - UP.FIT Maintenance Training Program to ensure maintenance staff know how to maintain your new next-gen fleet - 1:1 Training for vehicle operation ( offered by UP.FIT at an additional cost ) - Infrastructure/Charging planning and approval support - Sole Source Justification Letter
Unplugged Performance
Tesla Approved Body Shop -
Whelen Certified Installer -
3523 Jack Northrop Ave
Hawthorne, CA 90250
(213) 493-6323
[email protected]
Estimate #4983
Created: 5/13/2025 02:44 PM PDT
Payment Term: On Receipt
Service Writer: Daniel King
5/13/2025 Unplugged Performance
Powered by Shopmonkey.io

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UP.FIT Patrol Model Y Patrol - Upfit Only
- Financial services options for leasing, financing, etc.

Description Price QTY Subtotal
1 Vehicle UP.FIT $43,547.331 $43,547.33
2 UP.FIT Custom Craftsmanship & Labor $15,210.001 $15,210.00 Tax (10.5%): $6,169.52 Total: $64,926.85
MVPA - Vehicle Purchase & Upfitting Agreement

VEHICLE PURCHASE AND UPFITTING AGREEMENT

1. Description of Vehicle and Upfitting Services:

The Seller agrees to sell to the Buyer, and the Buyer agrees to purchase from the Seller, a vehicle and the associated equipment as described in this document (the "Vehicle"). The Seller further agrees to upfit the Vehicle according to the specifications outlined in the vehicle description attached hereto (the "Upfitting Services").

2. Purchase Price:

The total purchase price for the Vehicle and the Upfitting Services shall be specified in the description attached hereto. Payment shall be made by the Buyer to the Seller in accordance with the payment terms specified in this document. Full payment for vehicles, equipment and services is due upon acceptance of the contract unless otherwise stipulated or specified in writing in the invoice details.

3. Delivery:

Delivery of any vehicle must occur directly to Unplugged Performance for the purposes of vehicle upfitting. If the vehicle is new, it must be delivered directly from the manufacturer. Delivery of the vehicle to the buyer will occur after the completion of vehicle upfitting and inspection approval by both the buyer and seller. Additional vehicle logistics are at the additional expense of the Buyer.

4. Inspection and Acceptance:

Upon upfit completion, the Buyer shall have 7 days to inspect the Vehicle and the Upfitting Services. If the Buyer determines that the Upfitting Services do not conform to the specifications outlined in the vehicle description, the Seller shall make reasonable efforts to address any deficiencies. Any adjustments or alterations requested beyond the quoted work to be performed may incur additional costs, subject to mutual agreement between the Buyer and Seller.

5. WARRANTY INFORMATION:

Tesla New Vehicle Limited Warranty: UP.FIT vehicles will maintain the Tesla New Vehicle Limited Warranty and the Battery and Drive Unit Limited Warranty within the scope of the Tesla Terms & Conditions referenced here: https://www.tesla.com/support/vehiclewarranty . As a Tesla Certified Body Shop, Unplugged Performance and UP.FIT have knowledge and training in Tesla vehicle architecture and have devised and validated methods for integrating specialty equipment for the enhancement of Tesla vehicles with specialty use cases, including police vehicle upfitting. Utilizing Tesla schematics, validated components, and technical acumen ensures that the Tesla New Vehicle Limited Warranty and Battery and Drive Unit Limited Warranty are maintained to the highest possible standard.

Additional information regarding the OEM warranty for upgraded vehicles is addressed in The Magnuson–Moss Warranty Act (P.L. 93-637) a United States federal law (15 U.S.C. § 2301 et seq.). Enacted in 1975, this federal statute governs warranties on consumer products.

UP.FIT Warranty:

The Seller warrants that the upfitting work will be performed in a professional manner and that all upfitting components and parts installed by the Seller will be free from defects in materials and workmanship.

For proper care of vehicle wraps and decals, the vehicles are to be washed every two weeks by hand only, using pH-neutral products to promote the longevity of installed graphics and films.

Do not wash vehicles via drive-thru car washes or use the bristle brush at a self-wash station. If using a high pressure washer, it must remain a minimum of 2 feet away from the surface of the vehicle at all times to avoid delamination or damage. Do not use products that contain carnauba or any waterless wash products. Do not use any "California Duster" type of brushes on the surfaces Unplugged Performance
Tesla Approved Body Shop -
Whelen Certified Installer -
3523 Jack Northrop Ave
Hawthorne, CA 90250
(213) 493-6323
[email protected]
Estimate #4983
Created: 5/13/2025 02:44 PM PDT
Payment Term: On Receipt
Service Writer: Daniel King
5/13/2025 Unplugged Performance
Powered by Shopmonkey.io

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MVPA - Vehicle Purchase & Upfitting Agreement
of the vehicle.

Parts Warranty:

Different manufacturers of upfitting subcomponents offer different warranties that vary depending on the use of the warrantied item. The most up-to-date warranty information can be referenced at each individual manufacturer's website. Below are links to warranty information for select manufacturers:
- Whelen: https://www.whelen.com/support-training/whelen-warranty/ - Setina: https://setina.com/
- Unplugged Performance: https://unpluggedperformance.com/terms-and-conditions/

6. Mutual Non-Disclosure Commitment:

The mutual agreement of nondisclosure between the parties ensures the protection of each party's confidential and proprietary information, including but not limited to proprietary installation techniques, equipment, processes, methods, designs, tools, and intellectual property utilized by Unplugged Performance and UP.FIT in their services.

UP.FIT partners closely with vendors and manufacturers. The data and pricing shared between parties may include data that is shared with Unplugged Performance or UP.FIT by those vendors or manufacturers. This non-disclosure clause shall extend to all data that includes any partnership, collaboration, or data we acquire from 3rd party vendors, OEMs, etc.

Both parties agree to:
- Keep all Confidential Information in strict confidence. - Not disclose such information to any third party without prior written consent from the Disclosing Party. - Use the Confidential Information solely for the purpose of the specified business relationship. - Prevent unauthorized use or reproduction of the other party's Confidential Information. - Return or destroy all Confidential Information upon termination of the business relationship or upon request.

This commitment is integral to maintaining the proprietary nature of the services and offerings provided by each party and is effective for 10 years, from the last disclosure of any Confidential Information.

7. Vehicle Procurement and Logistics Process:

Unplugged Performance and UP.FIT have a unique and extensive specialty understanding of the procurement of Electric Vehicles direct from the manufacturer, specifically Tesla vehicles. UP.FIT strongly encourages that vehicle procurement be executed by UP.FIT or Unplugged Performance in order to ensure the most efficient outcomes.

Both the Buyer and Seller must be involved in the OEM vehicle procurement planning and subsequent vehicle logistics to prevent delays or expenses incurred by any party. Effective coordination between the Buyer and Seller is essential to facilitate efficient vehicle procurement and logistics.

8. Training & Customer Education:

Customer agrees to undergo the complimentary training offered by UP.FIT and if applicable, other 3rd party vendors or entities associated with the components or software associated with the vehicle build. This training ensures the proper use and operation of the vehicles and the upgraded equipment and establishes protocols for the safe and reliable use of the final upfitted vehicle. The Customer acknowledges that a decision to forego this training increases the probability of misuse or improper operation of the vehicle and its components. Support provided by UP.FIT for perceived issues that are presented by any end-user that has not received proper training in the specialty use of the upfitted vehicle or specialty equipment .

Buyer acknowledges that they have been offered the training and that acceptance of training is the responsibility of the Buyer.

9. Consigned or Customer- Provided Parts and/or Components or Assets:

Customer acknowledges and agrees to provide any and all agreed upon accessories, radio-equipment, electronics, wiring, antennas, computer power supply, computer cradle-dock, and/or any other additional accessories that are typically self-procured. This includes any necessary artwork or graphics files for decals to be installed on the vehicle, supplied in vector graphic file format.

Graphic design services are available from UP.FIT if existing graphics are not being utilized for replication. All parts should be provided to UP.FIT or Unplugged Performance, prior to the start of production for the project. Transportation of physical parts to UP.FIT or Unplugged Performance is the responsibility of the Customer and shipments must be appropriately packaged and insured against potential damage during shipment.

Timeline Consideration:

Unplugged Performance
Tesla Approved Body Shop -
Whelen Certified Installer -
3523 Jack Northrop Ave
Hawthorne, CA 90250
(213) 493-6323
[email protected]
Estimate #4983
Created: 5/13/2025 02:44 PM PDT
Payment Term: On Receipt
Service Writer: Daniel King
5/13/2025 Unplugged Performance
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Item 11 Page 5 of 7
MVPA - Vehicle Purchase & Upfitting Agreement
Vehicle production delays can occur if all parts, accessories, applicable graphics files, etc. are not provided to UP.FIT before the procurement of the base vehicles and the start of production. Parts and accessories provided by the Customer should be arranged and formatted in a suitable manner for immediate vehicle assembly. If UP.FIT receives parts that do not function or properly adhere to the requirements to enable immediate assembly of the vehicle and its upfitting components, production will not commence and the start of production will be rescheduled. Any time delays caused by the customer that result in rescheduling the start of production may be subject to additional costs or change-orders if modifications, enhancements, or alterations are needed in order to ensure proper and reliable outcomes. If any of the necessary parts for a vehicle build are unavailable or any parts received from any source or supplier do not match the standards and specifications of UP.FIT or Unplugged performance, the Customer will be notified and the project schedule will be revised to ensure that the appropriate project outcomes are achieved. Customer acknowledges that the Seller will make a good faith effort to expedite the completion of projects that must be rescheduled and Customer acknowledges that unforeseen circumstances can cause delays outside of the control of the Seller.

10. Payment Terms & Instructions:
50% deposit is due from the buyer upon acceptance of Estimate with the remaining 50% balance due upon delivery.

Payment Instructions:

BANK WIRE TRANSFER INFORMATION
Bank Name: Bank of America
Bank Phone: 213.605.4920
Location: 1450 W. Redondo Beach Blvd.

Gardena, California 90247, USA
Account Name: Unplugged Performance Inc.

Routing Number: 121000358
Account Number: 325144002319
Swift: BOFAUS3N
Zelle: [email protected]
Company Information:

Unplugged Performance Inc.
3523 Jack Northrop Ave
Hawthorne, CA 90250, USA
Tel: 213-493-6323
Hours: M-F 9:00AM - 5:30PM PST
If making payment via a physical check, please make checks payable to "Unplugged Performance Inc" Unplugged Performance Inc.
3523 Jack Northrop Ave
Hawthorne, CA 90250, USA
Tel: 213-493-6323
Fees associated with wire transfer are the responsibility of the Buyer. Please email the federal wire confirmation number or a copy of the wire transfer receipt to [email protected] for prompt crediting.

11. Change-Orders/Modification Requests
Any request to alter, modify, customize, or otherwise change the original agreed-upon estimate will be considered a change-order request. Any change-order request should be considered within the same parameters as the original estimate and to add the additional cost, production time, and the potential for a request for additional resources from the Customer to accomplish the request set forth in the change-order.

Any changes requested after the Agreement has been executed cannot be accepted unless agreed upon by all parties and all costs associated with a change are appropriately calculated and accounted for.

This Agreement constitutes the entire understanding between the parties concerning the subject matter hereof and supersedes all prior agreements and understandings regarding the same. Any modifications to this Agreement must be in writing and signed by Unplugged Performance
Tesla Approved Body Shop -
Whelen Certified Installer -
3523 Jack Northrop Ave
Hawthorne, CA 90250
(213) 493-6323
[email protected]
Estimate #4983
Created: 5/13/2025 02:44 PM PDT
Payment Term: On Receipt
Service Writer: Daniel King
5/13/2025 Unplugged Performance
Powered by Shopmonkey.io

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Item 11 Page 6 of 7
MVPA - Vehicle Purchase & Upfitting Agreement
both parties.

Description Price QTY Subtotal
1 Acceptance1 $0.00
Total: $0.00
**Estimate Validity:** Unless otherwise indicated above, estimates are approximations and may change due to unforeseen issues, and are valid for 30 days from date listed, unless otherwise stipulated. If listed, an expiration date on pricing should be considered the final date a listed price is valid until. If you approve this estimate, you authorize the outlined repair work and material procurement, including vehicle operation for testing. A revised estimate will be provided for additional repairs upon request if modifications or change orders are requested. **Parts Policy:** All parts are new unless stated otherwise. Deposits for parts orders are non-refundable. No returns or refunds on special order, painted, or electrical parts.

No warranty on used or customer-supplied parts.
**Liability Waiver:** Unplugged Performance is not liable for vehicle loss, damage, or personal items left in the vehicle beyond our control.

Parts ............................................... $58,757.33 Labor ........................................................ $0.00 Subtotal .................................... $58,757.33 Tax .............................................. $6,169.52 Grand Total ................................... $64,926.85 Paid To Date ........................................ ($0.00) REMAINING BALANCE $64,926.85
We are not responsible for delays due to parts availability or shipping. Ensure your vehicle is fully insured during service. **Damage and Repairs:** Report pre-existing damage upon arrival. We are not responsible for pre-existing conditions or cleanliness. Damage claims must be made at pickup; later claims will not be accepted.
**Service Timeframe:** Estimated work times are not guaranteed. We are not liable for scheduling conflicts or costs due to altered timelines. **Payment and Liens:** You agree to pay as estimated. Failure to pay may result in an automotive lien. **Safety and Modifications:** You waive liability for issues arising from ignored safety recommendations or modifications made against our advice.

Unplugged Performance shall not be held liable, for issues that occur outside of our control. **Recommended Services:** A four-wheel alignment is advised for vehicles that are lowered, lifted, or have new wheels and suspension modifications for even tire wear.
**Pricing Adjustments:** Prices may change due to labor rates, tax adjustments, or parts pricing fluctuations. Confirm appointment and pricing details in advance.
**Fleet Customer Notice:** Prices may change based on the estimate date. Customers are responsible for any price differences at contract acceptance or delivery, excluding taxes, fees, and incentives which must be verified by the customer. Unless otherwise stipulated above, estimates should not be considered final, until agreed upon between the Buyer and Seller.

Signature
Unplugged Performance
Tesla Approved Body Shop -
Whelen Certified Installer -
3523 Jack Northrop Ave
Hawthorne, CA 90250
(213) 493-6323
[email protected]
Estimate #4983
Created: 5/13/2025 02:44 PM PDT
Payment Term: On Receipt
Service Writer: Daniel King
5/13/2025 Unplugged Performance
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Item 11 Page 7 of 7
City Council Agenda Report
Meeting Date: June 17, 2025
From: Daniel S. Wall, P.E., Director of Public Works
Department: Public Works
Submitted by: Cynthia Cano, Administrative Secretary
Subject
Blanket Purchase Order with The Home Depot
Recommendation
Approve the issuance of a blanket Purchase Order with The Home Depot in an amount not-toexceed $190,000 to procure supplies for the Public Works Department and Vernon Public Utilities for operational needs and special projects for Fiscal Year (FY) 2025-2026.

Background
The Public Works Department and Vernon Public Utilities (VPU) regularly procure supplies to support their operations. To streamline this process, both departments typically establish blanket purchase orders with vendors at the beginning of each fiscal year.

For FY 2024-25, Public Works initiated several special projects that have required increased expenditures on supplies. These projects include street island improvements, beautification of City Hall, and an enhanced graffiti elimination program—all of which demand significant quantities of paint and related materials. These initiatives are currently ongoing and will continue throughout FY 2025-26. To manage costs effectively, Public Works is prioritizing the use of inhouse staff for these projects in lieu of outsourcing to contractors.

To ensure both departments can efficiently acquire the necessary materials and supplies for ongoing operations and upcoming special projects in FY 2025-26, staff is requesting City Council approval for a blanket purchase order with The Home Depot in an amount not to exceed $190,000.

The Home Depot is the closest major supplier to the City and offers a consistently high level of inventory, a wide selection of product brands, and the breadth of tools, equipment and supplies required by staff. Using alternative vendors for select purchases would increase staff time and travel, thereby reducing efficiency.

This purchase order qualifies for an exemption from competitive bidding in accordance with Vernon Municipal Code (VMC) Section 3.32.110(A)(5)(b), as The Home Depot is a registered participant in the OMNIA Partners cooperative purchasing program. The City’s Director of Finance has determined that it is to the advantage of the City to utilize the OMNIA contract (Contract No. 16154) for this procurement. OMNIA Partners is the nation’s largest cooperative purchasing organization for the public sector, with all contracts competitively solicited and publicly awarded in compliance with relevant procurement laws and regulations.

As the total purchase amount exceeds $100,000, City Council approval is required pursuant to VMC Section 3.32.030(A). ..

Item 12 Page 1 of 2
Fiscal Impact
The fiscal impact is not-to-exceed $190,000. Sufficient funds for the cost of materials and supplies are available in the Supplies and Repairs Account of the Public Works and VPU Departments for FY 2025-26.

Attachments
None.
..

Item 12 Page 2 of 2
City Council Agenda Report
Meeting Date: June 17, 2025
From: Daniel S. Wall, P.E., Director of Public Works
Department: Public Works
Submitted by: Gerard Garcia, Assistant Engineer
Subject
Revocable Encroachment License Agreement No. 442 with Vernon Environmental Response Corporation, not individually but in its capacity as Trustee of the Exide Vernon Environmental Response Trust
Recommendation
A. Find that approval of the proposed action is categorically exempt under the California Environmental Quality Act (CEQA), in accordance with CEQA guidelines 15061(b)(3), the general rule that CEQA only applies to projects which have the potential for causing a significant effect on the environment; and
B. Approve and authorize the Mayor to execute the Revocable Encroachment License Agreement No. 442 (Agreement) between the City of Vernon and the Vernon Environmental Response Corporation (VERC), not individually but in its capacity as Trustee of the Exide Vernon Environmental Response Trust (VERT).

Background
The former Exide facility in Vernon operated as a lead acid battery recycling plant until its oversight agency, the California Department of Toxic Substances Control (DTSC), ordered its closure. DTSC learned that Exide’s management of hazardous waste was unsafe, resulting in contamination of nearby soil and water. Extensive cleanup of Exide contamination started in 2018 and remains ongoing. The Vernon Environmental Response Trust (VERT) was created in October 2020, as part of Exide’s bankruptcy proceedings to handle the cleanup and closure of the former Exide facility. The VERT is overseen by DTSC and the U.S. Environmental Protection Agency (EPA) and is administered by its Trustee, the Vernon Environmental Response Corporation (VERC). DTSC is requiring VERT to install vapor probes to assess whether contamination from its site has spread beyond its property.

Accordingly, VERT has requested the City to issue an Encroachment License Agreement for the installation, construction, maintenance, and sample collection of two (2) vapor probes on Indiana Street between 26th Street and Bandini Boulevard within the City of Vernon. The vapor probes will be 71-foot soil borings created using Cone Penetration Testing (CPT) rig. There will be no soil samples collected for analysis, and all borings will be dual-nested soil vapor probes set at depths of 50 and 70 feet. Furthermore, the proposed vapor probe wells would be drilled directly into the sidewalk on Indiana Street, with each well having a diameter of 6 inches.

The City has prepared an Encroachment License Agreement No. 442 between the City of Vernon and VERC, in its capacity as Trustee of the VERT. The term of this license is for five (5) years from the effective date unless sooner terminated.

VERC has indicated its acceptance of the Encroachment License Agreement by properly executing the document prior to its submission to the City for consideration. The City Attorney’s office has reviewed and approved the Encroachment License Agreement as to form. ..

Item 13 Page 1 of 21
Fiscal Impact
Approval of the Revocable Encroachment License Agreement will result in $10,000 in additional revenue to the General Fund that shall be remitted prior to the issuance of the License. VERC will also pay an annual renewal fee of $642, payable each year during the term of the License on or before the anniversary of the effective date resulting in additional revenue to the General Fund Franchises and Agreements Account No. 011-410-000-410300. The renewal shall be increased annually to account for inflation based on the Consumer Price Index for All Urban Consumers, for the Los Angeles-Long Beach-Anaheim Metropolitan Area, or a similar index, published by the Bureau of Labor Statistics, U.S. Department of Labor, for the period ending April 30th of each year.

Attachments

1. Revocable Encroachment License Agreement No. 442 ..

Item 13 Page 2 of 21

REVOCABLE ENCROACHMENT LICENSE AGREEMENT NO. 442
This Revocable Encroachment License Agreement (License) is entered into on June 17, 2025, (Effective Date), between the City of Vernon, a California charter City and California municipal corporation, as Licensor (City) and Vernon Environmental Response Corporation, not individually but in its capacity as Trustee of the Exide Vernon Environmental Response Trust, a California Corporation, (Licensee) (Party or Parties).

NOW THEREFORE, the Parties do hereby agree to the following terms and conditions:

1.0 Grant of License.

1.1 Subject to the right of City to revoke this License as set forth herein, City hereby grants to Licensee and its employees, contractors, subcontractors, agents, representatives and assigns a License to encroach upon City’s public rights-of-way or property (City Property) for the purpose of the construction, maintenance, sample collection, and repair (Work) of two (2) vapor probes (DVP-9 & DVP-10) (Monitoring Wells) along Indiana Street as described and shown in Exhibit “A,” attached to and incorporated into this License by reference. Licensee hereby certifies that the descriptions and drawings in Exhibit “A” are true, complete and accurate. This License is granted subject to the terms and conditions set forth in Chapter 12.08 of the City of Vernon Municipal Code (VMC), and the acceptance hereof shall evidence Licensee’s agreement to all terms and conditions of the VMC and the additional conditions contained herein.

1.2 The grant of this License shall be further conditioned as set forth in Exhibit “B,” Special Application Requirements and Conditions of Approval – Monitoring Wells, attached to and incorporated into this License by reference.

1.3 Licensee shall not commence any Work under this License until Licensee has first obtained a permit to do so. Permit applications must be submitted in accordance with the provisions of VMC, Section 12.08.010 et seq., and the City’s policies, procedures, and rules.

1.4 Licensee is hereby given notice of existing state law, Sec. 4215 et seq., Chapter 3.1, Division 5, Title 1 of the Government Code, as amended by A.B. 73, effective January 1, 1990, which requires owners of underground facilities to join a regional notification center, e.g. USA which requires contractors to contact such a regional notification center prior to excavation; requires facility owners to mark their underground facilities when notified; and sets civil penalties for failure to comply therewith. Prior to construction, Licensee shall contact DigAlert to verify the location of existing underground facilities.

1.5 This License is valid only for the purposes specified herein.

2.0 Term. The term of this License shall be for a period of five (5) years from the Effective Date unless sooner terminated as provided in this License.

3.0 Fees. ..

Item 13 Page 3 of 21
Vernon Environmental Response Corporation
Revocable Encroachment License Agreement No. 442

Page 2 of 14 ends

______________________

3.1 Licensee shall pay to City a one-time issuance fee of Five Thousand Dollars ($5,000.00) for each monitoring well, prior to the issuance of the License (Issuance Fee).

3.2 Licensee shall also pay to City an annual renewal fee of Six Hundred and Forty-Two Dollars ($642.00) (Annual Renewal Fee) for each monitoring well payable each year during the term of the License on or before the anniversary of the Effective Date.

The Annual Renewal Fee shall be increased annually to account for inflation based on the Consumer Price Index for All Urban Consumers (CPI-U) for the Los Angeles-Long Beach-Anaheim Metropolitan Area, published by the Bureau of Labor Statistics, U.S.

Department of Labor. If, for any reason, the CPI-U is not published or is not available, a similar index may be substituted at the City Administrator’s discretion. The increased fee shall be rounded to the nearest one dollar. Said CPI-U increase shall begin on the first anniversary of the Effective Date of this License provided, however, that notwithstanding any CPI-U, there shall be no reduction in fees by operation of this provision.

4.0 No Interests in City Property.

4.1 No Right, Title or Interest. The permission granted hereunder shall not in any event constitute an easement on nor an encumbrance against the City Property. No right, title or interest in the public right-of-way, or any part thereof, shall vest or accrue in Licensee by reason of this License or the issuance of an excavation permit, encroachment permit or exercise of any privilege given thereby.

4.2 Possessory Interest. The Parties agree that no possessory interest is created by this License. However, to the extent that a possessory interest is deemed created by a governmental entity with taxation authority, Licensee acknowledges that City has given to Licensee notice pursuant to California Revenue and Taxation Code Section 107.6 that the use or occupancy of any public property pursuant to this License may create a possessory interest which may be subject to the payment of property taxes levied upon such interest. Licensee shall be solely liable for, and shall pay and discharge prior to delinquency, any and all possessory interest taxes or other taxes levied against Licensee’s right to possession, occupancy, or use of any public property pursuant to any right of possession, occupancy, or use created by this License.

5.0 Compliance with all Laws. Licensee shall comply with all applicable federal, state and local laws at all times including but not limited to those issued by City. No repair or construction shall be performed except in accordance with the provisions of the VMC pertaining to encroachments to the extent they are not in conflict with any paramount authority of the State or Federal Government.

6.0 Work Standards; Repairs.

6.1 The Work shall be done in a good and skillful manner, subject to the supervision and satisfaction of City. Licensee’s Work shall comply with all standards ..

Item 13 Page 4 of 21
Vernon Environmental Response Corporation
Revocable Encroachment License Agreement No. 442

Page 3 of 14 ends

______________________

imposed by City and be conducted with the least possible hindrance or interference to the City Property.

6.2 Licensee shall promptly repair and restore the City Property as directed by City, at Licensee’s sole cost and expense, any damage to the City Property caused by the Work, including but not limited to subsidence, cracking, erosion, collapse, weakening, or loss of lateral support resulting from excavation, shoring or underpinning.

7.0 Abandonment.

7.1 At City’s request, Licensee shall at its sole expense, properly abandon, without cost or expense to City, any or all of the Facilities, if and when such Facilities may be deemed by City to be detrimental to the public health, safety, or welfare; is/are in conflict vertically and/or horizontally with any proposed City installation; interfere(s) with any City construction project; or made necessary by any abandonment, change of grade, alignment or width of any street, sidewalk or other public facility, including the construction, maintenance, or operation of any other City underground or aboveground facilities including but not limited to any sewer, storm drain, conduits, gas, water, electric or other utility system, or pipes owned by City or any other public agency, provided, however, that Licensee shall not be required to bear the expense of an abandonment requested under this Section 7.1 on behalf of, or for the benefit of, any third party unaffiliated with Licensee.

7.2 If Licensee is required to abandon one or more Facilities pursuant to Section

7.1, City shall cooperate with Licensee to determine a mutually acceptable location on City Property where Licensee may relocate said Facilities. In the event Licensee relocates the Facilities to a new location as set forth in this Section 7.2, the terms of this License will apply to the Work at the relocated Facilities unless the Parties agree otherwise.

7.3 If Licensee is required to abandon one or more Facilities pursuant to Section

7.1, the abandonment shall be completed within sixty (60) days of a written request by City unless exigencies dictate a shorter period for abandonment and/or relocation, and such shorter period is stated in the written request. Such shorter time period shall be no less than fifteen (15) days. If Licensee has not complied with such written request for abandonment within said sixty (60) days or other longer time limit as provided by City, then City may cause the abandoning work to be done at Licensee’s own cost and expense.

7.4 In the event Licensee abandons one or more Facilities, it shall be abandoned consistent with all requirements of the VMC as it may be amended from time to time. Currently the VMC requirements for abandoning an encroachment are listed in VMC, Section 12.08.460 – Relocation or abandonment of encroachment. In addition to meeting the requirements of the VMC then existing, Licensee shall also comply with any requirements specific to any Facilities to be abandoned, as directed by the Director of Public Works. ..

Item 13 Page 5 of 21
Vernon Environmental Response Corporation
Revocable Encroachment License Agreement No. 442

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______________________

7.5 In the event of an emergency, City may abandon Facilities at Licensee’s own cost and expense without prior notice to Licensee, provided City makes an effort to notify Licensee first, and City notifies Licensee within a reasonable period thereafter.

7.6 In the event Licensee fails to perform any of its obligations under this License within a reasonable period after delivery of written notice of such failure and City performs any work including, but not limited to, repairing or maintaining the street improvements, City shall only be obligated to perform such work in a manner consistent with the standard practices of City in performing street work and construction. City shall not be obligated to repair or replace any materials or improvements in a form or manner consistent with Exhibit “A,” or any plans and specifications, and City shall not be responsible for any damages to Licensee as a result of City performing such work, including, but not limited to, severance damages.

8.0 Termination, Abandonment, Default.

8.1 Either Party may terminate this License at any time by thirty (30) days written notice of said termination to the other Party.

8.2 In the event that Licensee fails to utilize the City Property under this License for a consecutive period of six months from the date of this License, regardless of whether Facilities have been installed, City may notify Licensee in writing of its intent to terminate the License due to abandonment. If Licensee does not respond to said notice within thirty (30) days, City shall have the right, at its sole discretion, to declare this License terminated by abandonment.

8.3 In the event Licensee defaults, or fails to keep, fulfill or perform any of the terms or conditions of this License and fails to remedy such default within a reasonable period after delivery of written notice from City of such default or failure, City may declare this License terminated. Upon such a declaration of termination and failure to remedy such default, this License shall be cancelled, and all of the rights and privileges of Licensee under this License shall be surrendered.

8.4 Upon termination for any reason, City may require Licensee to abandon Licensee’s Facilities and restore the City Property according to the requirements of Licensee’s permit and the VMC, or if City so elects, Licensee shall abandon the Monitoring Wells to the ownership of City without the payment of any compensation. Any abandonment conducted by Licensee under this Section 8.4 shall be completed within sixty (60) days of the effective termination date of this License. Should Licensee neglect to restore the City Property in accordance with this Section 8.4, City may perform such work or have such work performed, and Licensee shall reimburse City for all costs of the work so performed upon receipt of a statement therefor.

9.0 Performance Bond. ..

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Vernon Environmental Response Corporation
Revocable Encroachment License Agreement No. 442

Page 5 of 14 ends

______________________

9.1 The grant of this License is effective only upon further consideration that Licensee shall file with and shall thereafter at all times during the remaining term of the Licenses keep on file with the City a faithful performance bond payable to the City in the sum of Five Thousand Dollars ($5,000.00), with a good and sufficient corporate surety approved by the City, and upon conditions that Licensee shall well and truly observe, fulfill, and perform each term and condition of this License and that in case of any breach of conditions of this License, the whole amount of the penal sum therein named shall be deemed to be liquidated damages, and shall be recoverable from the principal and sureties upon the bond. The amount of said bond may be subject to an increase in accordance with the CPI-U cited in Section 3.2 herein, and Licensee shall provide the revised bond amount within 60 days of receipt of notice from the City that it shall do so.

Notwithstanding the foregoing, if City does not notify Licensee of its duty to provide an increased bond within any particular five-year period, and within 90 days of the end of the five-year period the City did not expressly waive in writing the duty to provide an increased bond, Licensee shall provide City with bond(s) for the full amount after increases.

9.2 Such bond shall be accompanied by a power of attorney from the surety company authorizing the person executing the bond to sign on behalf of the company. If the bond is executed outside the State of California, all copies of the bonds must be countersigned by a California representative of the surety. The signature of the person executing the bond shall be acknowledged by a Notary Public as the signature of the person designated in the power of attorney.

9.3 The surety on the bond furnished must be satisfactory to the City and must:
(i) be an admitted surety insurer under the laws of the State of California; (ii) hold a certificate of Authority from the U.S. Secretary of the Treasury under 31 U.S.C. as an acceptable surety on federal bonds; (iii) be listed in the latest edition of U.S. Department of Treasury Circular 570; and (iv) issue the bond within the surety’s bonding limitations as set forth in Circular 570. Exception: A bond from a California admitted surety that is not listed in Treasury Circular 570 may be accepted by City provided said bond is accompanied by all of the documents enumerated in California Code of Civil Procedure Section 995.660(a), as it may be amended from time to time.

10.0 Indemnification.

10.1 Licensee shall defend, indemnify and hold City, its officers, agents, employees, and representatives harmless from all suits and causes of action, claims, charges, damages, demands, judgments, civil fines, costs and expenses including reasonable attorneys’ fees, and penalties or losses of any kind or nature whatsoever, arising out of this License.

10.2 This indemnification shall include without limitation: (1) claims for injury to or death of any person; (2) property damage; (3) performance or failure to perform the obligations in this License by Licensee, or its contractors, subcontractors, agents, employees, or other persons acting on Licensee’s behalf; (4) the design, placement, maintenance, repair, or condition of any Licensee Facilities; (5) all claims, demands, ..

Item 13 Page 7 of 21
Vernon Environmental Response Corporation
Revocable Encroachment License Agreement No. 442

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______________________

damage, causes of action, proceedings, loss, liability, costs and expenses (including reasonable attorney fees) of any kind alleging injury to or death of persons or damage to public or private property including environmental damage that arises from or is directly attributable to, any Licensee Facilities or any release of hazardous materials or contaminants from any Licensee Facilities during operations and/or after abandonment; and (6) all other claims of any nature whatsoever which may arise directly or indirectly from the Work, except and to the extent caused by City’s active negligence, willful misconduct or criminal acts.

10.3 In the event that City or any of its officers, agents, employees or representatives shall be made a party to any action due to Licensee’s violation of this License or any federal, state or local laws including but not limited to Section 5 of this License, Licensee shall indemnify, defend and hold City harmless from any and all such claims.

10.4 The provisions of this Section 10 shall apply regardless of whether City prepared, supplied, or approved plans or specifications or inspected any of the Work or improvements installed and constructed pursuant to this License.

11.0 Hazardous Materials. At all times during the term of this License and thereafter, Licensee shall be absolutely liable without regard to fault (unless one or more third parties have already made City whole) for any damages, including but not limited to remediation and cleanup costs, caused by any release of hazardous materials or contaminants from Licensee’s Facilities that may have occurred during Licensee’s operations and/or after abandonment. To the greatest extent of the law, Licensee shall defend, indemnify, and hold harmless City, its officers, agents, and employees from and against all claims, demands, damage, causes of action, proceedings, loss, liability, costs and expenses (including reasonable attorney fees) of any kind alleging injury to or death of persons or damage to public or private property including environmental damage claims, and that such injury, death or damage arises from, is directly attributable to, or caused by the Licensee’s Facilities during operations and/or after abandonment.

12.0 Limits of City Liability.

12.1 In no event shall City be liable under any theory to Licensee for any damage to any of Licensee’s Facilities caused by any excavation or work performed by any other persons or by City at or near the location of such Facilities except and to the extent caused by City’s active negligence, willful misconduct or criminal acts. City shall not be liable, under any theory, to Licensee for any indirect, special punitive or consequential damages including, but not limited to, any claim for loss of services.

12.2 Nothing in this License shall be deemed to make City or any officer or employee of City responsible or liable to Licensee or any other person by reason of City’s approval of plans for the Work or by reason of any inspections of the Facilities conducted by City, except and to the extent caused by City’s active negligence, willful misconduct or criminal acts. ..

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Vernon Environmental Response Corporation
Revocable Encroachment License Agreement No. 442

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13.0 Insurance.

13.1 Licensee shall assume all responsibility for damages to property or injuries to persons, including accidental death, which may arise from or be caused by Licensee’s performance under this License, or by anyone Licensee has directly or indirectly employed, and whether such damage or injury shall accrue or be discovered before or after termination of this License.

13.2 Prior to the issuance of this License, Licensee shall be required to secure and keep in full force and effect at all times during the term of this License, a policy or policies of commercial general liability and automobile liability insurance written by a company or companies authorized to do business within the state of California and approved by City. Said policies shall name the City of Vernon, its officers, agents, and employees as additional insureds, under the policies in the following amounts which may be adjusted from time to time to reflect changes of circumstances and the rate of inflation:
(a) Commercial General Liability Insurance. Licensee shall carry General Liability Insurance covering all operations performed by or on behalf of the Licensee providing coverage for bodily and property damage with a single limit of no less than One Million Dollars ($1,000,000) per occurrence and Two Million Dollars ($2,000,000) general aggregate limit written on an Insurance Services Office (ISO) Comprehensive General Liability “occurrence” Form CG 00 01 or its equivalent for coverage on an occurrence basis; and
(b) Automobile Liability Insurance. Primary insurance coverage shall be written on ISO Business Auto coverage form for all owned, hired, and non-owned automobiles or any auto. The policy shall have a combined single limit of at least Two Million Dollars ($2,000,000) per occurrence for personal injuries, including accidental death, to any one person; and for property damage.

13.3 If Licensee maintains broader coverage and/or higher limits than the minimums shown above, City requires and shall be entitled to the broader coverage and/or higher limits maintained by the Licensee. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City.

13.4 All policies shall contain a “Severability of Interest” clause and a “Primary Non-Contributory Coverage” clause for any loss arising from or caused in whole by Licensee’s performance under this License. In addition, all policies shall contain a statement of obligation on the carrier's part to notify City at least thirty (30) days in advance of any policy cancellation, termination, or reduction in the amount of coverage.

13.5 Prior to the issuance of this License and on an annual basis, Licensee shall furnish City with a “certificate of insurance” and an “additional insured endorsement,” both documents countersigned by the insurance carrier or its authorized representative, on ..

Item 13 Page 9 of 21
Vernon Environmental Response Corporation
Revocable Encroachment License Agreement No. 442

Page 8 of 14 ends

______________________

forms satisfactory to the Department of Risk Management, which set forth the above provisions. The countersigned certificate, along with the additional insured endorsement, shall state: The City of Vernon, its officers, agents, and employees are named as additional insureds under this policy. This insurance is primary to the coverage of the City. Neither the City nor any of its insurers shall be required to contribute to any loss.

This policy contains a severability of interest clause. The issuing company shall mail to the City a thirty (30) days advance notice of any policy cancellation, termination, or reduction in the amount of coverage.”

LICENSEE SHALL FURNISH THE REQUIRED CERTIFICATE(S) OF INSURANCE AND ENDORSEMENT(S) BEFORE CITY ISSUES THIS LICENSE.

13.6 Licensee shall secure and maintain at all times during the term of this License workers’ compensation insurance with statutory limits and employer’s liability insurance, as required by state law, but at least in an amount not less than One Million Dollars ($1,000,000) per accident. Licensee shall furnish the City with a certificate showing proof of coverage.

13.7 In the event Licensee employs contractors or subcontractors as part of the work covered by this License, it shall be the responsibility of Licensee to ensure that all contractors or subcontractors comply with substantially similar insurance requirements that are stated in this License; provided, however, that under no circumstance shall any contractor or subcontractor have insurance policies with limits less that those required of Licensee under Section 13.2(a), 13.2(b) and 13.6.

14.0 General Conditions.

14.1 Any right or power conferred, or duty imposed upon any officer, employee, department or board of City, shall be subject to transfer by operation of law to any other officer, employee, department or board of City.

14.2 This License is non-exclusive. The granting of this License or any of the terms or conditions contained herein shall not be construed to prevent City from granting over the route herein specified or elsewhere any identical, similar or other type of license or franchise to any person, firm or corporation other than Licensee.

14.3 Time is declared to be of the essence in implementing and enforcing the terms of this License.

14.4 This License is not intended for any third party's benefit and cannot be enforced by any third party.

14.5 The Parties understand and agree that execution and performance of this License does not constitute, and shall not be construed as, an admission of liability, fault, or responsibility of any Party. ..

Item 13 Page 10 of 21
Vernon Environmental Response Corporation
Revocable Encroachment License Agreement No. 442

Page 9 of 14 ends

______________________

14.6 If any action at law or in equity is brought to enforce or interpret the provisions of this License, the prevailing Party shall be entitled to reasonable attorney’s fees in addition to any other relief to which he, she or it may be entitled.

14.7 The validity of this License and of any of its terms or provisions, as well as the rights and duties of the Parties hereunder, shall be governed by the laws of the State of California, without regard to such state’s conflict of laws rules.

14.8 No provision herein made for the purpose of securing performance of the terms and conditions of this License shall be deemed an exclusive remedy, or to afford the exclusive procedure for the enforcement of this License’s terms and conditions, but the remedies and procedures herein provided, in addition to those provided by law, shall be deemed to be cumulative.

14.9 This License is not transferable. Licensee shall not sell, transfer, assign or lease this License, or any part hereof, or any of the rights or privileges granted hereby.

Licensee may not assign its duties hereunder, and may not assign its rights hereunder to any person or firm.

14.10 A waiver by City of any breach of any term covenant, or condition contained in this License shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant, or condition contained in this License whether of the same or different character.

14.11 All notices herein must be in writing and, unless otherwise provided herein, shall be deemed validly given on the date either personally delivered to the address indicated below; or on the third (3rd) business day following deposit, postage prepaid, using certified mail, return receipt requested, in any U.S. Postal mailbox or at any U.S.

Post Office; or when sent via email to a Party at the email address set forth below. Should City or Licensee have a change of address, the other Party shall immediately be notified in writing of such change, provided, however, that each address for notice must include a street address and not merely a post office box. All notices, demands or requests between the Parties shall be given to the other Party addressed as follows:

City: Licensee:

City of Vernon Vernon Environmental Response Corporation Attention: Public Works Department One World Trade Center, 8th Floor 4305 Santa Fe Avenue Long Beach, CA 90831
Vernon, CA 90058-1714
Email: [email protected] Email: [email protected] [Signatures Begin on Next Page].
..

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Item 13 Page 14 of 21
Vernon Environmental Response Corporation
Revocable Encroachment License Agreement No. 442

Page 13 of 14 ends

______________________

EXHIBIT A
Description and Map of Work
..

Item 13 Page 15 of 21

FACILITY
1 Project No.: CM2116810G
0 1,000 2,000
Approximate Scale in Feet Figure
By: MWW Date: 1/7/2025
Date: 1/7/2025 Printed by: USMW719917Path: Y:\CM2116810E_(Exide Battery)\esri\Data_Gap-2024\01_Site_Location_Map.mxd "

FACILITY

LOCATION

FACILITY LOCATION MAP
Former Exide Facility
2717 South Indiana Street
Vernon, California
Basemap modified from Street Map provided by Esri, HERE, DeLorme, USGS, Intermap, increment P Corp.,
© OpenStreetMap contributors, and the GIS User Community. ..

Item 13 Page 16 of 21
West Yard
South Yard
North Yard
South Indiana Street E 26th Street
Bandini Boulevard
0 75 150
Approximate Scale in Feet

FACILITY VICINITY AND PLAN MAP
Former Exide Facility
2717 South Indiana Street
Vernon, California
2 Project No.:CM2116810G
Figure
By: MWW Date: 12/2/2024
Date: 12/2/2024 Printed by: USMW719917Path: Y:\CM2116810E_(Exide Battery)\esri\Data_Gap-2024\02_Site-Vicinity-Map.mxd Basemap modfied from aerial photo provided by National
Agricutural Imagery Program, dated 2022.

Explanation
Segment area
Facility boundary
Vernon Plant (former manufacturing area) boundary
Exide Administration Building
Former Finished
Lead Storage Building
Open Flood Control Channel
West Yard
Truck Wash (87)
Former Mobile Equipment
Wash Station (35)
BNSF Railyard
Railroad Right-of-Way (ROW) Former Engineering Building Operating
WWTP
Former West Container
Storage Building #1 (2)
Former Desulfurization
Area/Mud Tank Building
Former Oxidation
Tank Building
Notes

1. Select former and existing facility buildings
and operations are called out in their
general locations along with their
associated Interim Status (IS) Unit number
in brackets, where applicable.

2. WWTP = Wastewater Treatment Plant.

3. RMPS = Raw Materials Processing System.

Los Angeles River
Former West Container
Storage Building #2 (3)
Revolution Company
Former BESS Buiding
Former North Yard
Scale House
Former Scale
Former Blue Lead
Warehouse Building
BNSF
Facility
Former
Scale
Former
West Yard
Scale House
Former Garage
(Mobile Maintenance Building)
Former Employee Facilities
Former Warehouse
Building
Baker Commodities (East) -
Former Honeywell
Baker Commodities (South)
Former Rendering Plant
Former Machine
Shop Building
Former Maintenance
Storage Building Rehrig Pacific
Company
Former
Cooling Tower
Former RMPS
Building
Former Smelter
Building
Former Blast
Furnace Feed
Room (34)
Former Furnace
Reverb Feed
Room (33)
Former
Baghouse
Building
Central
Container Storage
Building (1)
Drop-Out
System Area
Former Trailer
Staging
Area (103)
Surface
Impoundment (78)
Segment 3
Segment 1
Segment 2
Baker Commodities (South)
Former Water
Softening Building
Former Motor
Control Center
..

Item 13 Page 17 of 21
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West Yard
South Yard
North Yard
CB1W01
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CB1S02 CB1E04
CB103N03
ED+0+27
IND.ST
SI-4
TB-66I
TB-68I
TB-118S
TB-132S
VP-03
MW-26D MW-26
RFI-SB-06
RFI-SV-08
RFI-SV-09
CPT-02A
CPT-13
CB-5
MW-14
DVP-13
DGSY-TSA-01
DGSY-CPT-02
DGSY-CCSB-02
DGSY-WH-04
DGSY-WH-05
DGSY-WH-01
DGSY-WH-03
DGSY-WH-02
DGSY-CCSB-01
DG-BB-05
DGSY-SW-02
DGSY-SW-03
DGSY-EF-01
DGSY-EF-02
DGSY-EB-02
DGSY-EB-01
DGSY-EF-03
DGSY-EF-04
DGSY-EF-05
DGSY-CT-01
DG-AB-01
DG-AB-02
DG-AB-03
DG-AB-04
DG-AB-05
DG-AB-06
DVP-07
DVP-10
DVP-09
SVP-07
DVP-08
SVP-08
DVP-11
SVP-09
DVP-12
0 37.5 75
Approximate Scale in Feet

PROPOSED SAMPLING LOCATIONS

SOUTH YARD AND

ADMINISTRATION BUILDING PROPERTY
Former Exide Facility
2717 South Indiana Street
Vernon, California
4 Project No.:CM2116810G
Figure
By: MWW Date: 2/14/2025
Date: 2/14/2025 Printed by: USMW719917Path: Y:\CM2116810E_(Exide Battery)\esri\Data_Gap-2024\10_SY_Prop_Locs.mxd Basemap modfied from survey drawings provided by DTSC,
2024 Phase 1 Closure Survey (Cal Vada 4/16/2024), and SVE Pilot Test Survey (6/13/2024).

Explanation !( Soil boring (proposed) !< Soil boring and vapor probe (proposed) "/ Soil vapor probe (proposed)
!( Existing soil location
Area of Concern (AOC)
Solid Waste Management Unit (SWMU)
Yard specific define area
Soil Vapor Extraction (SVE) Pilot Test Area
Solid Waste Mangement Unit (SWMU) 11
Process units
Sump
Facility boundary
Vernon Plant (former manufacturing area) boundary
Existing on or off-site building or facility feature
Former building or facility feature
Railroad
Stormwater inlet
South Indiana Street
Former West Container
Storage Building #2 (3)
Former West Container
Storage Building #1 (2)
Former Warehouse
Building
Drop-Out
System Area
Former Engineering Building
Bandini Boulevard
Open Flood Control Channel
Rialroad Right of Way (ROW)
Administration Building
Former Employee Facilities
Former
Cooling Tower
Former Water
Softening Building
Inlet E
Inlet D
Inlet D1
Central Container
Storage Building (1)
Formere Trailer
Staging Area (103)
Geoprobe
Sonic
CPT
Hollow stem
..

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Vernon Environmental Response Corporation
Revocable Encroachment License Agreement No. 442

Page 14 of 14 ends

______________________

EXHIBIT B
Special Application Requirements and
Conditions of Approval
..

Item 13 Page 19 of 21
1 Special Application Requirements and
Conditions of Approval — Monitoring Wells
A fully executed License is required before commencing any monitoring well activity including but not limited to: drilling, digging, excavating, boring, or deepening a monitoring well for any purposes including but not limited to groundwater sampling, vapor extraction, water level monitoring, general maintenance, new well installation, modification, abandonment or destruction. An annual monitoring well encroachment permit must be issued for ongoing monitoring well operations, maintenance, and repairs.

Application Requirements.

Applicant shall provide the following with its application for a Revocable Encroachment License:
(1) A letter from the lead government agency that is overseeing the monitoring well project.

The letter shall state: (a) the purpose for the monitoring well activities proposed, (b) the activities are required by the agency, and (c) the monitoring well activities within the public right-of-way are required. Examples of such lead government agencies include, but are not limited to, the Regional Water Quality Control Board (RWQCB), State Department of Toxic Substances Control (DTSC), and the United States Environmental Protection Agency (EPA). (2) The lead government agency’s case number or project identification number for the monitoring well project.
(3) Full contact information of the lead government agency’s project manager which shall include but not be limited to said project manager’s full name, address, phone number, fax number, and email address.
(4) Total well depth(s) and diameter(s).
(5) The average depth of the water table below ground surface. (6) Site map detailing all well and boring locations for the entire project. (7) Traffic control plan, if required by City.
(8) Applicable technical reports describing the monitoring project, including the purpose, the work to be done using the well, and how long the well will remain in place. (9) A vertical shaft design specification. If the vertical shaft is temporary, also provide well destruction procedure or backfill procedure.
(10) Any other permits and documents issued by other governmental agencies applicable to the monitoring project. ..

Item 13 Page 20 of 21
2 Conditions of Approval
(1) Written notification shall be provided to property owners within 300 feet of proposed well, indicating the nature of the activity to be conducted at the proposed well site. A copy of said notification shall be submitted to City prior to obtaining a permit for construction of the well(s).
(2) Licensee shall notify City’s inspection unit at least 24 hours prior to excavation and again 24 hours prior to installation of final A.C. hot patch, if required. Any work undertaken without benefit of inspection will be subject to removal and reinstallation at Licensee’s expense. (3) All monitoring wells shall have a durable identification tag secured onto the well cap and interior of the well to provide at a minimum the following:
a. Name and phone number of firm maintaining the well(s). b. Designation of well(s).
c. Date of installation of well(s).
d. Ownership of well(s).
e. Emergency contact information.
(4) Licensee shall ensure that the monitoring well(s) has the proper sanitary seal and lid. (5) Licensee shall provide a minimum of five (5) feet horizontal clearance from any water or sanitary sewer lines.
(6) The installation or destruction of the monitoring well shall be done by a licensed well contractor.

(7) For long-term monitoring wells, an Annual Encroachment Permit will be required. The Annual Permit is renewable at the anniversary of the permit. Permit renewal must be filed before the current permit is expired. The reason for the renewal should be stated in the permit application.
(8) Upon termination or at the end of the well monitoring period, Licensee shall properly destroy or seal all monitoring wells and fully restore the City Property in accordance with City specifications. Prior to destruction of a well(s), a City permit shall be obtained, ensuring that street repair shall be in accordance with City standards. (9) Licensee shall submit the final report of the monitoring program to the City Water Department. ..

Item 13 Page 21 of 21
City Council Agenda Report
Meeting Date: June 17, 2025
From: Todd Dusenberry, General Manager of Public Utilities Department: Public Utilities
Submitted by: Adriana Ramos, Senior Management Analyst
Subject
Services Agreement with Hill Brothers Chemical Company
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 $179,010 for a three-year term; and B. Authorize a contingency amount of ten percent (10%) or $17,901 in the event of unforeseen expenses, including price volatility, and grant authority to the City Administrator to approve and execute amendments up to the contingency amount, if necessary.

Background
Ammonia plays an essential role in the functioning of the Malburg Generating Station (MGS), by eliminating nitrogen oxides (NOx) that are produced as a byproduct during combustion. NOx significantly contributes to the formation of ground-level ozone, which can lead to respiratory issues, global warming, and other environmental issues. Therefore, ammonia is critical for maintaining regulatory compliance for MGS.

Following a competitive bidding process, on June 21, 2022, the City Council approved a threeyear Services Agreement with Hill Brothers for the supply of 19% aqueous ammonia. The current agreement is set to expire on June 30, 2025. With the contract expiration date approaching, on or about April 17, 2025, staff issued a Request for Bids (RFB) to solicit bids for the purchase of 19% aqueous ammonia, as required per Vernon Municipal Code (VMC) Section 3.32.070. The RFB was advertised on the City’s Planet Bids platform. Bids were received from two firms by the May 7, 2025 deadline.

The bid results are as follows:

1. KAAM Group - $181,496.25

2. Hill Brothers Chemical Company - $179,010
Hill Brothers was deemed the lowest responsive and responsible bidder for supplying the required aqueous ammonia. Accordingly, staff recommends that the City Council approve a Services Agreement with Hill Brothers for the supply of 19% aqueous ammonia for a total amount not-to-exceed $179,010, which includes estimated sales taxes of $17,010. Additionally, staff recommends a contingency amount of ten percent (10%) or $17,901 in the event of unforeseen expenses, including price volatility, for a combined total not-to-exceed of $196,911.

VMC Section 3.32.220(C) allows rate increases during the term of the contract as long as increases are tied to an appropriate index. Aqueous Ammonia is a price-volatile commodity, as natural gas, the primary input for ammonia production, experiences frequent price fluctuations.

Due to the volatility that ammonia producers and suppliers experience, the published RFB included a provision to allow for price adjustments based on the most appropriate publicly available index. Pursuant to VMC Section 3.32.030(A), City Council approval is required for the proposed agreement, as the total value of the contract exceeds $100,000. ..

Item 14 Page 1 of 50
The proposed Services Agreement has been reviewed and approved as to form by the City Attorney’s Office.

Fiscal Impact
The fiscal impact is not-to-exceed $196,911. Sufficient funds are available in Electric Fund budget, Malburg Generating Station, Chemicals, Account No. 055-050-586-520235 for FY 2025- 26, and will be budgeted in subsequent years.

Attachments

1. Services Agreement with Hill Brothers Chemical Company ..

Item 14 Page 2 of 50

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: Luis Cervantes, III, District Representative
Notice Information - Contractor: Hill Brothers Chemical Company 3000 E. Birch St, Suite 108
Brea, CA 92821
Attention: Luis Cervantes, III, District
Representative
Telephone: (714-579-3333
Notice Information - City: City of Vernon
4305 Santa Fe Avenue
Vernon, CA 90058
Attention: Todd Dusenberry,
General Manager
Telephone: (323) 583-8811 ext.579
Commencement Date: July 1, 2025
Termination Date: June 30, 2028
Consideration: Total not to exceed $179,010 (includes
all applicable sales tax); and more
particularly described in Exhibit B
Records Retention Period Three (3) years, pursuant to Section

11.20 ..

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Hill Brothers Chemical Company
Services Agreement

Page 2 of 21 ends

______________________

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 Brother 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 17, 2025.

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 April 17, 2025, and titled RFB for Supply of 19% Aqueous Ammonia, and Contractor's proposal to the City ("Proposal") dated May 1, 2025, 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. ..

Item 14 Page 4 of 50
Hill Brothers Chemical Company
Services Agreement

Page 3 of 21 ends

______________________

4.0 TERM. The term of this Agreement shall commence on July 1, 2025, and it shall continue until June 30, 2028 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 $179,010 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. ..

Item 14 Page 5 of 50
Hill Brothers Chemical Company
Services Agreement

Page 4 of 21 ends

______________________

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.

5.6 Licenses, Permits, Fees, and Assessments. Contractor shall obtain, at Contractor’s sole cost and expense, such licenses, permits, and approvals as may be required 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, 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.

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, ..

Item 14 Page 6 of 50
Hill Brothers Chemical Company
Services Agreement

Page 5 of 21 ends

______________________

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.

10.0 INSURANCE. Contractor shall procure and maintain for the duration of the Agreement insurance against claims for injuries to persons or damage to property that may arise from or in connection with the performance of the work hereunder by the Contractor, its agents, representative, or employees. The policies shall state that they afford primary coverage.

10.1 Automobile Liability Insurance – Primary insurance coverage shall be written on ISO Business Auto coverage form for all owned, hired, and non-owned automobiles or any auto. The policy shall have a combined single limit of not less than one million dollars ($1,000,000). If Contractor is transporting one or more nonemployee passengers in the performance of the services, the automobile liability policy ..

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shall have a combined single limit of two million dollars ($2,000,000). If Contractor owns no autos, a hired, non-owned auto endorsement to the General Liability policy is acceptable.

10.1.1 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. The City of Vernon, its directors, commissioners, officers, employees, agents, and volunteers must be endorsed on the policy as additional insureds and, under the Contractors’ policy, there shall be a waiver of subrogation, and the policy shall be primary and non-contributory and will not seek contribution from the City’s insurance.

10.2 Commercial General Liability Insurance – Contractor shall carry General Liability Insurance covering all operations performed by or on behalf of the Contractor providing coverage for bodily injury and property damage with a single limit of not less than two million dollars ($2,000,000) per occurrence and four million dollars ($4,000,000) general aggregate limit written on an Insurance Services Office (ISO) Comprehensive General Liability "occurrence" Form CG 00 01 or its equivalent for coverage on an occurrence basis. The City of Vernon, its directors, commissioners, officers, employees, agents, and volunteers must be endorsed on the policy as additional insureds with respect to liability arising out of the Contractor's performance of this Agreement. The additional insured coverage under the Contractor’s policy shall be primary and non-contributory and will not seek contribution from the City’s insurance.

The policy shall be endorsed to include a waiver of subrogation.

10.2.1 If Contractor intends to employ other contractors as part of the services rendered, the City must approve and will establish the ..

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appropriate insurance requirements.

10.2.2 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.

10.3 Environmental Pollution Liability – The 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 injured; cleanup costs; and costs of defense, including costs and expenses incurred in the investigation, defense, or settlement of claims.

10.3.1 Contractor shall obtain, pay for, and maintain for the duration of the Contract EPL 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.

10.3.2 All activities contemplated in the Contract shall be specifically scheduled on the EPL 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.

10.3.3 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.
..

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10.4 Umbrella Liability Insurance – An umbrella (over primary) may be used to comply with limits or other primary coverage requirements. When used, the umbrella policy shall apply to bodily injury/property damage and personal injury/advertising injury and shall include a “dropdown” provision providing primary coverage for any liability not covered by the primary policy. The umbrella policy shall have no additional exclusion or coverage difference from the primary policy. The coverage shall also apply to automobile liability.

10.5 Workers’ Compensation/Employers Liability - Contractor shall comply with the applicable sections of the California Labor Code concerning workers' compensation for injuries on the job. Compliance is accomplished in one of the following manners:

10.5.1 Provide a copy of the permissive self-insurance certificate approved by the State of California; or

10.5.2 Secure and maintain in force a policy of workers' compensation insurance with statutory limits and Employer's Liability Insurance with a limit of one million dollars ($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

10.5.3 If Contractor has no employees, it may certify or warrant to the City that it does not currently have any employees or individuals who are defined as “employees” under the Labor Code, and the requirement for Workers’ Compensation coverage will be waived by completing the waiver form provided by the City.

10.6 If Contractor maintains broader coverage and/or higher limits than the minimums shown above, City requires and shall be entitled to the broader coverage and/or the higher limits maintained by the Contractor. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City.

10.7 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 ..

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City.

10.8 Insurance shall be placed with insurers with an A.M. Best rating of no less than A-VIII. Any self-insured retention or deductible in excess of $25,000 must be approved in advance by the City. Any policies written on a claims-based basis must include a minimum of a 3-year tail.

10.9 Prior to the 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 evidence 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 upon request.

10.10 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, ..

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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.

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.

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. ..

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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 sole satisfaction of City and to participate in any meeting required with regard to the correction.

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 ..

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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 ..

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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.

11.11.6 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 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.

11.14 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.

11.15 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: Todd Dusenberry, General Manager
4305 Santa Fe Avenue
Vernon, CA 90058 ..

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If to the Contractor:

Hill Brothers Chemical Company
Attention: Luis Cervantes, III, District Representative 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.

11.16 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.

11.17 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.

11.18 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 ..

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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.

11.19 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.

11.19.1 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.

11.20 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. ..

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The Contractor shall maintain all such records in the City of Vernon.

If not, 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, including, but not limited to, such additional (out of the City) expenses for personnel, salaries, private auditors, travel, lodging, meals, and overhead.

11.21 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.

11.22 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.

11.23 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.

11.24 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 ..

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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].
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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: ____________________________
Brian Saeki, City Administrator

Hill Brothers Chemical Company, a
California corporation
By:

Name:

Title:

ATTEST:
_______________________________
Genoveva Rocha, City Clerk
By:

Name:

Title:

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

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EXHIBIT A

CONTRACTOR'S PROPOSAL
..

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•
O•
Sll~]C8
1923
May 1, 2025
City of Vernon
City Clerk
4305 Santa Fe Ave
Vernon, CA 90058
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 one hundred 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 B Standard Form Services Agreement.

If you require any further information, please do not hesitate to contact me.

Sincerely,
~ ~ s CerE~antes, III
District Representative
Hill Brothers Chemical Company
3000 E Birch St, Suite 108
Brea, CA 92821
lui s @hi llbrothers . com
(714) 579-3333
Corporate HQ
& International Sales
San Jose
8Q0.257. 1920
So. California
800.438.85 15
Phoenix
602.272.9363
Tucson
520.795.935
North Salt Lake
800.336.391
800.994.880 ..

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Hill Brothers Chemical Company

STATEMENT OF QUALIFICATIONS
Hill Brothers Chemical is a Western United States based company that for over one hundred 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.

Hill Brothers Chemical meets the requirements of the mandatory specifications described in this Request for Bids and agrees to deliver five (5) days from date of placement of order.

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. ..

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MANDATORY SPECIFICATIONS
General
a. Vendor to provide bulk 19% Aqueous 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 (Ammonia 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
Analysis Result Specification
Ammonia 19% 18.5% - 19.5%
Content/Assay
Appearance Colorless, clear, free Colorless, clear, free from particulate from particulate
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.

Impurities Maximum Limit
Residue after ignition 0.002 %
4-ounce sample
Carbon dioxide (CO2) 0.002 %
4-ounce sample
Chloride (CI) 0.5 ppm
P osp a e P 4 2 ppm
Total Sul ur as SO4 2 ppm
Ni ra e N 3 2 ppm
Heavy metals (as Pb) 0.5 ppm
Iron (Fe) 0.2 ppm
Substance-reducing
erman anate
To pass test
..

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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 and test all products at time of delivery. Visible signs of contamination at the 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 chemicals 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 there within. 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. ..

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e. The city estimates 8-10 deliveries per year with an estimated delivery quantity of 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 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.

All of the above statements submitted in conjunction with the proposal, as a part thereof, and the truthfulness and accuracy of the information is guaranteed by the Bidder.
hereby certify under penalty of perjury under the laws of the state of California that the representation made herein are true and correct. ~—
Signature of Bidder
Luis Cervantes, III District Representative
Print Name and Title ..

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BID FORMS

SCHEDULE OF BID PRICES
PROJECT. Suppiv of 19% Aaueous Ammonia
BIDDER'S NAME: Hill Brothers Chemical Company

BASE BID
Pursuant to and in compliance with your Request for Bids and Agreement Documents relating to this Project including ail Addenda (attach signed copies), Bidder, having become thoroughly familiar with the terms and conditions of the Agreement Documents and with local conditions affecting the performance c~nd the costs of furnishing the materials and equipment, hereby proposes and agrees to fully deliver the materials and equipment within the time stated in strict accordance with the Agreement Documents (including the furnishing of any and all labor, materials, tools, expendable equipment, and utility and transportation services necessary to fully furnish the materials and equipment in a workmanlike manner) for the total Base Bid sum of:

One Dollar and 20/100 Dollars ($
1~ 20 }
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
No.

Description Units Quantity Unit
Cost
Amount

1. 19% Aqueous Ammonia all n 45.000
annual) $1.20 $54,000

2. 3.

B{D TOTAL
54, 000

WRITTEN
AMOUNT Fifty Four Thousand Dollars and 001100
For price-volatile commodities, the indicated Unit Price shall be the initial or basis price of the commodity at the Agreement 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 fhe term of the Agreement except where external factors significantly affect costs and rates during the term ..

Item 14 Page 27 of 50
of the Agreement, and any such increase must be directly tied to the most appropriate index or cost-of-living rote or a pass 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 (PPIJ, for Chemicals and Allied Products, Industrial Chemicals (WPU063) 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 Agreement 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 ad}ustment shall not be less than quarterly. The data used for any proposed adjustment shakl be the most current at the time of proposed adjustment. Price adjustments must be mutually agreed upon, in writing by both parties.

All other work items, labor, materials, tools and incidentals which are not specifically listed in the above bid items, bit are necessary to complete the project per specifications, and all other applicable standards and codes are considered to be included in the above bid items.

If there is a discrepancy between (1) the "Grand Total" shown immediately above, (2) any of the "total costs" shown in the far right column above, or (3~ the individual Unit Price, then the Unit price shall control over the Iota{ cost, and the total cost shall control over the total. If, however, 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. ..

Item 14 Page 28 of 50

AFFIDAVIT OF NON-COLLUSION BY CONTRACTOR

STATE OF CALIFORNIA )
Oran e ) ss

COUNTY OF )
Patricia Santana
and says that he/she is Corporate Secretary
of Hill Brothers Chemical Co
(Insert name of bidder)
being first duly sworn deposes
(Insert "Sole Owner", "Partner", "President, "Secretary", or other proper title) who submits herewith to the City of Vernon a bid/proposal; That all statements of fact in such bid/proposal are true; That such bid/proposal was not made in the interest of or on behalf of any undisclosed person, partnership, company, association, organizarion or corporation; That such bid/proposal is genuine and not collusive or sham; That said bidder has not, directly or 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 bid/proposal price of said bidder or of anyone else, or to raise or fix any overhead, profit or cost element of his/her bid/proposal 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 under penalty of perjury that the above information is correct ' ~ C1 ,~-----_,
By: 0':~n ~~~- ~.-._s~.~ Title: Corporate Secretary
Date: ~ ~ 1r~J ~~
CA. Notary Form Attached
Per California Law
Identification Provided
March 2013
..

Item 14 Page 29 of 50

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 C~~~~
Subscribed and sworn to (or affirmed) before me on this I ~"~ day of /"`~` 2~2~ Date Month Year
by ~~'F Ir' ` ~ ~ ~ ~ G.h'~"~.h 0~
Name of Signers
proved to me on the basis of satisfactory evidence to be the persons) who appeared before me. ..::
~5~,~ of ;,,f ETHAN J. BOCKEI,MAN
Signature: ~ ~ ~~
N~~ 0 an
be~
Counlifornia
Q ~~
S d C ~ ~ ~ Signature of Notary Public Y ~~. ~ Commission # 2482559 C,l~Fa0.~`* My Comm. Expires Feb 20, 1028
$ep~
Place Notary Seal Above
___o_______________________.._________emd~~a000~=o~a ppTIONAL -~a~~wp~~~~~~~~~m______________moQ«~=~o~~~4m______ 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 Document
Title or Type of Document:

Document Date:

Number of Pages:

Signers) Other Than Named Above: ..

Item 14 Page 30 of 50
HILL BROTHER }
_~„~'
C)ver Z~ Ye~-~rs o~ ~~u,~to~~ C.~c~s~i;itu~~~b

CERTIFICATE OF ANALYSIS
A ua Ammonia
NATIONAL CEMENT COMPANY APRIL 28, 2OZJ c
Sold To: Date:

Ship To:
5 MILES EAST OF I-5, OFF HWY 138
Batch #: 105512-042519
LEBEC CA 93243 136718 Location: Ref / PO#:

CESAR ACHTMANN Driver : Seal # : 8971
4047 8972 cD~,# : seal# :
9H 11770 8973 Tractor Lic : seat # :
4BG 1310 Tanker Lic :

Package
BULK
Quantity
5,200
This is to certify that the above shipment was produced in compliance with current Good manufacturing Practices (cGMP) and meets or exceeds the standards set forth below, including NSF/ANSI Standard 60, ANSI/AWWA B306-15 standards, and the Food Chemical Codex standards (FCC) when concentrations are between 27% and 30% anhydrous ammonia.

Aqua Ammonia Analysis° Specification (% NH3 by wt.)
Assay, % NH3 by wt. ~ 9.30 19.0% min oY• 29.45% (26°Be) min Specific Gravity, corrected to 60°F
Appearance
Carbon Dioxide
Chloride
Fluoride
Heavy Metals (as Pb)
Iron
Phosphate
Sulfate
Residue on Ignition
Substance Reducing Permanganate
• •. •
Clear, Water White
< 20 ppm
<0.5 pptn
<0.5 ppm
<0.5 ppm
<0.2 ppm
<2.0 ppm
<0.5 ppm
<20 ppm
Pass
Maximum use level for Ammonium H}~droxide under NSF/ANSI/CAN N Standard 60 ~~ Ammonium Hydroxide 19% Maximum use 26 mg/L Ammonium Hydroxide 20% Maximum use 25 mg/L 0 Tested by Hill Brothers Chemical Co.

Ammonium Hydroxide 29.45% Maximum use 17 mg/L
Ammonium Hydroxide 26°be Maximum use
*Maximum
17mg/L
Ammonium COf forms !O Hydroxide 24.5% use 20 mg/L
~'~~0 NSF/ANSUCAN 80 *NSF certification for 24.5%applies to Aqua Ammonia produced at the San ANSI/AYi~WA 8306-IS Jose facility only.

CONFIDENTIAL: This Certificate of Analysis should only be atsed fot' tylG' CtfSlOIf1C'1~'S IY11C'i•nal use.

JOSE RAMIREZ PRODUCTION
Authorized Signature Title
15017 E Clark Ave •City of Industry, California 91745
(800)-322-4119 • (626) 333-2251 •FAX: (626) 330-9557
http: / /hillbrothers.com
. Rev 8. 10/02/24 .

Item 14 Page 31 of 50
ACORO~ `~ CERTIFICATE OF LIABILITY INSURANCE DATE (MM/DDIYYYY) 5/1/2025
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 rights to the certificate holder in lieu of such endorsement(s).

PRODUCER
Acrisure Southwest Partners Insurance Services, LLC
4000 Westerly Place
Suite 110

CONTACT
NAME:

PHONE FAX
E ac "°
A DRIESS: SWC21tS acrisure.com
Newport Beach CA 92660 INSURER S AFFORDING COVERAGE NAIC # License#: BR-1801370 INSURERA: Westchester Sur lus Lines Insurance Com an 10172 INSURED HILLBRO-01
Hill Brothers Chemical Company
3000 E. Birch St; Suite 108
INSURER B :ACE American Insurance Com an 22667
iNsuReR c :Berkshire Hathawa Homestate Insurance Com an 20044 Brea CA 92821 INSURER D

INSURER E

INSURER F
COVERAGES CERTIFICATE NUMBER: 1181355958 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 NpE OF INSURANCE ADDL SUER

POLICY NUMBER

POLICY EFF

MMIDD/YYYY

POLICY EXP

MM/DD/YYYY LIMITS
A X COMMERCIAL GENERAL LIABILITY G2714598A012 8/1/2024 8/1/2025 Ep,CHOCCURRENCE $1,000,000 CLAIMS-MADE ~ OCCUR
A G O
PREMISES Ea occuRence $ 300,000
MED EXP (My one person) $ 25,000
PERSONAL 8 ADV INJURY $ 1,000,000
GEN'L AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE $ 3,000,000 POLICY ~ jE ~ ~ LOC PRODUCTS -COMP/OP AGG $ 3,000,000
OTHER: $
B AUTOMOBILE LIABILITY H08455582012 8/1/2024 8/1/2025 COMBINED SINGLE LIMIT Ea accident $ 5,000,000
X ANY AUTO BODILY INJURY (Per person) $

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

PROPERTY DAMAGE
Per accident
X HIRED X NON-OWNED $

AUTOS ONLY AUTOS ONLY
A UMBRELI.ALIA6 X OCCUR 627146028012 8/1/2024 8/1/2025 EgCH OCCURRENCE $10,000,000 X AGGREGATE $ 10,000,000 EXCESS LIAB CLAIMS-MADE
DED X RETENTION $ Excess Over GL/POL/WC $

C WORKERS COMPENSATION

AND EMPLOYERS' LIABILITY Y / N
HIWC524308 6/1/2024 6/1/2025 X STATUTE ER
H
ANYPROPRIETOR/PARTNER/EXECUTIVE E.L. EACH ACCIDENT $1,000,000 OFFICER/MEMBER EXCLUDED?
~ NSA
(Mandatory In NH) E.L. DISEASE - EA EMPLOYEE $ 1,000,000 If yes, describe under
DESCRIPTION OF OPERATIONS below E.L. DISEASE -POLICY LIMIT $ 1,000,000 A Contractors Pollution Liab G2714598A012 8/1/2024 8/1/2025 Deductible $10,000 $1,000,000 DESCRIPTION OF OPERATIONS /LOCATIONS /VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required) The City of Vernon, its director, commissioners, officers, employees, agents and volunteers are included as Additional Insured under the General Liability and Automobile policies as their interest may appear, as required by written contract. This insurance is primary insurance as respects to coverage to the additional insured person or organization, where the written contract or written agreement requires that this insurance be primary and non-contributory. Waiver of Subrogation applies to the Workers' Compensation policy. in favor of the City of Vernon, its director, commissioners, officers, employees, agents and volunteers.

CERTIFICATE HOLDER CANCELLATION

SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE

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

ACORD 25 (2016103) The ACORD name and logo are registered marks of ACORD ..

Item 14 Page 32 of 50

AUTOMATIC ADDITIONAL INSURED ENDORSEMENT
Named insured Hill Brothers Chemical Company I Endorsement Number Policy Symbol Policy Number Policy Period Effective Date of Endorsement CAL H08455582 08/01 /2024 70 08/01 /2025 08/01 /2024
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 preparation of the policy.

THIS ENDORSEMENT 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 or 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 "accident" 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, contingent 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
145
..

Item 14 Page 33 of 50
POLICY NUMBER: G2714598A 012 COMMERCIAL GENERAL LIABILITY CG 20100413
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

ADDITIONAL INSURED -OWNERS, LESSEES OR

CONTRACTORS -SCHEDULED PERSON OR

ORGANIZATION
This endorsement modifies insurance provided under the following:

COMMERCIAL GENERAL LIABILITY COVERAGE PART

SCHEDULE
Name Of Additional Insured Persons)
Or Or anization s Locations Of Covered O erations
As required by written contract or agreement signed As required by written contract or agreement signed by both parties prior to a loss to which this insurance by both parties prior to a loss to which this insurance applies. applies.

Information re uired to com lete this Schedule, if not shown above, will be shown in the Declarations.

1. Your acts or omissions; or

2. The acts or omissions of those acting on your
behalf;
in the performance of your ongoing operations for
the additional insureds) at the locations)
designated above.

However:

1. The insurance afforded to such additional
insured only applies to the extent permitted by
law; and

2. If coverage provided to the additional insured is
required by a contract or agreement, the
insurance afforded to such additional insured
will not be broader than that which you are
required by the contract or agreement to
provide for such additional insured.

B. With respect to the insurance afforded to these
additional insureds, the following additional
exclusions apply:

This insurance does not apply to "bodily injury" or
"property damage" occurring after:

1. All work, including materials, parts or
equipment furnished in connection with such
work, on the project (other than service,
maintenance or repairs) to be performed by or
on behalf of the additional insureds) at the
location 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.

C. With respect to the insurance afforded to these
additional insureds, the following is added to
Section III —Limits Of Insurance:

If coverage provided to the additional insured is
required by a contract or agreement, the most we
will pay on behalf of the additional insured is the
amount of insurance:

1. Required by the contract or agreement; or

2. Available under the applicable Limits of
Insurance shown in the Declarations;
whichever is less.

This endorsement shall not increase the
applicable Limits of Insurance shown in the
Declarations.

CG 20 10 04 13 O Insurance Services Office, Inc., 2012 Page 1 of 1 ..

Item 14 Page 34 of 50
POLICY NUMBER: G2714598A 012

COMMERCIAL GENERAL LIABILITY
CG 20 37 04 13
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

ADDITIONAL INSURED -OWNERS, LESSEES OR

CONTRACTORS -COMPLETED OPERATIONS
This endorsement modifies insurance provided under the following:

COMMERCIAL GENERAL LIABILITY COVERAGE PART

PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART

SCHEDULE
Name Of Additional Insured Persons)
Or Organizations) Location And Description Of Completed Operations As required by written contract or agreement signed by
both parties prior to a loss to which this insurance
applies.

As required by written contract or agreement signed by
both parties prior to a loss to which this insurance
applies.

Information required to complete this Schedule, if not shown above, will be shown in the Declarations.

A. Section II —Who Is An Insured is amended to
include as an additional insured the persons) or
organizations) 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" at the location designated and
described in the Schedule of this endorsement
performed for that additional insured and
included in the "products-completed operations
hazard".

However:

1. The insurance afforded to such additional
insured only applies to the extent permitted
by law; and

2. If coverage provided to the additional insured
is required by a contract or agreement, the
insurance afforded to such additional insured
will not be broader than that which you are
required by the contract or agreement to provide
for such additional insured.

B. With respect to the insurance afforded to these
additional insureds, the following is added to
Section III —Limits Of Insurance:

If coverage provided to the additional insured is
required by a contract or agreement, the most we
will pay on behalf of the additional insured is the
amount of insurance:

1. Required by the contract or agreement; or

2. Available under the applicable Limits of
Insurance shown in the Declarations;
whichever is less.

This endorsement shall not increase the applicable
Limits of Insurance shown in the Declarations.

CG 20 37 04 13 O Insurance Services Office, Inc., 2012 Page 1 of 1 ..

Item 14 Page 35 of 50
CHUBB~'
Named Insured Endorsement Number
Hill Brothers Chemical Company 009
Policy Symbol Policy Number Policy Period Effective Date of Endorsement PPL G2714598A 012 08/01 /2024 to 08/01 /2025 2/05/2025
Issued By (Name of Insurance Company)
Westchester Surplus Lines Insurance Company
Insert the policy number. The remainder of the information is to be completed only when this endorsement is issued subsequent to the preparation of the policy.

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

NOTICE OF CANCELLATION TO SPECIFIC PARTIES ENDORSEMENT
Helix Water District
R.M. Levy Water Treatment Plant
9550 Lake Jennings Park Rd
Lakeside, CA 92040 M-I, LLC, a Schlumberger Company
5950 North Course Drive
Houston, TX 77072
City of Laguna Beach
c/o David Shissler, Director of Water Quality
505 Forest Avenue
Laguna Beach, CA 92651
City of Tucson
Department of Procurement
P.O. Box 27210
Tucson, AZ 85726
City of Redding
Risk Management
777 Cypress Avenue
Redding, CA 96001
City of Oxnard
Insurance Compliance
Reference No. 10573
P.O. Box 100085 — OX
Duluth, GA 30096
Kiewit Power Constructors Co.

Attn: Scattergood Unit 3 Repowering Project
9401 Renner Bivd.

Lenexa, KS 66219
The City of Santa Clara
c/o Insurance Data Services Insurance Compliance
PO Box 100085-S2
Duluth, GA 30096
ENV-3126 (08-04) ..

Item 14 Page 36 of 50
City of San Buenaventura
501 Poli St.

Ventura, CA 93001
City of Pasadena
100 N. Garfield Ave
Pasadena, CA 91109
Las Vegas Valley Water District
Attn: Risk Management
1001 South Valley View Blvd. M/S 380
Las Vegas, NV 89153
City of Long Beach, the Board of Water Commissioners, and their officials, employees and agents 2950 Redondo Ave.

Long Beach, CA 90806
United States Cold Storage, Inc.

Attn: Insurance Department
2 Aquarium Dr, Ste 400
Camden, NJ 08103
Univar
Data Management Staff
P.O. Box 34325
Seattle, WA 98124-1325
City of Brentwood Public Works Operations
2201 Elkins Way
Brentwood, CA 94513
OCSD
10844 Ellis Avenue
Fountain Valley, CA 92708-7018
The City of Roseville - Insurance Compliance
P.O. Box 100085-R1
Duluth, GA 30096
PepsiCo, Inc.
700 Anderson Hill Road
Purchase, NY 10577
Central Coast Water Authority
255 Industrial Way
Buellton, CA 93427-9565
Roche Holdings Inc; Including all divisions and subsidiaries 1 DNA Way
South San Francisco, CA 94080
City of Inglewood
City Hall
1 Manchester Blvd.

Inglewood, CA 90301
Applied Process Cooling Corporation (APCCO)
4812 Enterprise Way
Modesto, CA 95356
ENV-3126 (08-04) ..

Item 14 Page 37 of 50
Rancho California Water District Insurance Compliance
PO Box 10085-RW
Duluth, GA 30096
Airgas Dry Ice
9810 Jordan Circle
Santa Fe Springs, CA 90670
Shields, Harper & Co
4591 Pacheco Boulevard
Martinez, CA 94553
City of Tempe Contract Administrator
PO Box 5002
Tempe, AZ 85281
Water Replenishment District of Southern California
4040 Paramount Blvd
Lakewood, CA 90712
Dublin San Ramon Services District
7051 Dublin Blvd
Dublin, CA 94568
City of Poway
Public Works Department
13325 Civic Center Drive
Poway, CA 92064
Sweetwater Authority
505 Garrett Ave
Chula Vista, CA 91910
Nevada Cement Company LLC
P.O. Box 100085-EA
Duluth, GA 30096
City of Palo Alto
P.O. Box 10250
Palo Alto, CA 94303
Dole Fresh Vegetables, Inc.

Attn: Purchasing Department
P.O. Box 2018
Monterey, CA 93942
Berkshire Hathaway Energy Company
Attn: Insurance Services
P.O. Box 657
Des Moines, IA 50306-0657
Jones Lang LaSalle
c/o Avetta
P.O. Box 51387
Irvine, CA 92619
Ormat Technologies Inc. and/or all subsidiaries and/or affiliated companies. 6140 Plumas Street
Reno, NV 89519
ENV-3126 (08-04) ..

Item 14 Page 38 of 50
City of Galt
495 Industrial Drive
Galt, CA 95632
Mesa Water District
1965 Placentia Ave
Costa Mesa, CA 92627
Elsinore Valley Municip<
31315 Chaney St.

Lake Elsinore, CA 9253
Santa Fe Irrigation Distr
R.E. Badger Filtration P
18535 Aliso Canyon Ro
Rancho Santa Fe, CA 9;
Metropolitan Water Disti
P.O. Box 54153
Los Angeles, CA 90054
Alameda County Water
ATTN: Purchasing Divis
P.O. Box 5110
Fremont, CA 94537
United Dairymen of Ariz
2008 S. Hardy Dr
Tempe, AZ 85282
City of Roseville
311 Vernon St
Roseville, CA 95678
The State of Arizona
Dept of Emergency and
5645 East McDowell Rd
Phoenix, AZ 85008-349
Hydrite Chemical Co.
300 N. Patrick Blvd, Dra
Brookfield, WI 53008-09
Jackson Family Wines,
425 Aviation Blvd
Santa Rosa, CA 95403
Nucor Steel Kingman LL
3000 West Old Hwy 66
Kingman, AZ 86413
Infineon Technologies A
101 N. Pacific Coast Hic
EI Segundo, California ~
Walnut Valley Water Dis
27 S. Brea Canyon Roa
Walnut, CA 91789
ENV-3126 (08-04) ..

Item 14 Page 39 of 50
Turlock Irrigation District
P.O. Box 949
Turlock, CA 95381-0949
City of Prescott
Public Works Director
433 N. Virginia St
Prescott, AZ 86301
City of Flagstaff
211 W. Aspen Ave
Flagstaff, AZ 86001
Lineage Logistics and its Subsidia
17911 Von Karman Ave, Suite 40~
Irvine, CA 92614
City of San Jose —Finance Depart
Risk &Insurance
200 East Santa Clara St, 14th Floc
San Jose, CA 95113-1905
California Water Service Company
1720 N. 1st Street
San Jose, CA 95112
City of Torrance
Public Works
20500 Madrona Ave
Torrance, CA 90503
Contra Costa Water District
1075 Broad Ripple Ave
Suite 313
Indianapolis, IN 46220
City of Camarillo
Sanitary District
601 Carmen Drive
Camarillo, CA 93010
Alameda County Water District
ATTN: Purchasing Division
P.O. Box 5110
Fremont, CA 94537
City of Escondido
201 N. Broadway
Escondido, CA 92026
City of Vernon
4305 Santa Fe Ave
Los Angeles, CA 90058
Santa Clara Valley Water District
Contact Administrator
5750 Almaden Expressway
San Jose, CA 95118
ENV-3126 (08-04) ..

Item 14 Page 40 of 50
City of Burbank Purchasing Division
300 E. Olive Ave, Suite 305
Burbank, CA 91502
Arizona Water Company
P.O. Box 29006
Phoenix, AZ 85038-9006
Grosvenor Donner Associates
1600 Donner Ave
San Francisco, CA 94124
City of Beverly Hills
Public Works &Transportation Dept.
345 North Foothill Rd
Beverly Hills, CA 90210
City of San Diego, its officers, officials, employees and volunteers 1200 Third Ave., Suite 200
San Diego, CA 92101-4195
Strategic Mechanical, Inc
4661 East Commerce Avenue
Fresno, CA 93725
East Bay Municipal Utility District (EBMUD)
P.O. Box 24055
Oakland, CA 94623-1055
Bay Area Clean Water Agencies (BACWA)
PO Box 24055, MS 702
Oakland, CA 94623
Western Oilfields Supply Co DBA Rain for Rent
3404 State Road
Bakersfield, CA 93308
City of Tracy
3900 Holly Drive
Tracy, CA 95304
Process Cooling International
Applied Process Cooling Corporation
APCCO
4812 Enterprise Way
Modesto, CA 95356
City of Thousand Oaks
9600 Santa Rosa Rd
Camarillo, CA 93012
C&L Refrigeration Corporation
P.O. Box 2319
Brea, CA 92822
Precision Shooting Equipment, Inc.

P.O. Box 5487
Tucson, AZ 85703
ENV-3126 (08-04) ..

Item 14 Page 41 of 50
Arizona Grand Resort, LLC
8000 S. Arizona Grand Pkwy
Phoenix, AZ 85044
Cinnabar Industrial 410, LLC
P.O. Box 71
San Clemente, CA 92674-0074

SSJID WTP
P.O. Box 747
Ripon, CA 95366
City of Phoenix
251 W. Washington St, 8th Floor
Phoenix, AZ 85003
Exyte U.S., Inc
201 Fuller Road, Suite 401
Albany, NY 12203
Ergon Asphalt &Emulsions, Inc
P.O. Box 1639
Jackson, MS 39215-1639
Eastern Municipal Water District
2770 Trumble Road
P.O. Box 8300
Perris, CA 92572-8300
Chino Basin Desalter Authority
3550 E. Philadelphia Street, Suite 170
Ontario, California 91761
Los Angeles County Sanitation Districts
Insurance Compliance
P.O. Box 100085 — L J
Duluth, GA 30096

LONG BEACH UTILITIES DEPARTMENT
1800 East Wardlow Road,
Long Beach, CA 90807
City of Los Angeles
Department of Water &Power
111 N. Hope Street, JFB465
Los Angeles, CA 90012
City of Chandler
Attn: Purchasing Clerk
P.O. Box 4008
MS 901
Chandler, AZ 85225
Arizona Department of Corrections, Rehabilitation, and Reentry 701 E. Jefferson St
M/C 55302
Phoenix, AZ 85034
ENV-3126 (08-04) ..

Item 14 Page 42 of 50
Northern California Power Agency
651 Commerce Drive
Roseville, CA 95678
Pima County
Finance &Risk Management
97 E. Congress Street
Tucson, AZ 85701
City of Riverside
3900 Main Street
Riverside, CA 92522
Bay Area Clean Water
Agencies (BACWA)
P.O. Box 24055
M S 702
Oakland, CA 94623
City of Tucson
Procurement Division
P.O. Box 27210
Tucson, AZ 85726
Albertsons Companies, Inc and its subsidiaries
Legal Dept-Commercial Contracts
250 E. Parkcenter Blvd
Boise, I D 83706
If we decide to cancel this policy on or before the expiration date shown on the Declarations Page, we will mail to the persons) or organizations) shown in the Schedule above, written notice of cancellation not less than 30 days prior to cancellation or 10 days for non-payment of premium.

ENV-3126 (08-04) ..

Item 14 Page 43 of 50
Westchester
A Chubb Company
PRIMARY AND NONCONTRIBUTORY —OTHER INSURANCE CONDITION
Named Insured
Hill Brothers Chemical Company
Endorsement Number
Policy Symbol Policy Number Policy Period Effective Date of Endorsement PPL G2~14598A o12 08/0/2024 TO o8/oi/2o25 08/01/2024
Issued By (Name of Insurance Company)
Westchester Surplus Lines Insurance Company
Insert the policy number. The remainder of the information is to be completed only when this endorsement is issued subsequent to the preparation of the policy.

THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

THIS ENDORSEMENT MODIFIES INSURANCE PROVIDED UNDER THE FOLLOWING:

COMMERCIAL GENERAL LIABILITY COVERAGE PART
CONTR.ACTOR'S POLLUTION LIABILITY COVERAGE PART
The following is added to the Other Insurance Condition and supersedes any provision to the contrary:

Primary and Noncontributory Insurance
This policy is primary to, and will not seek contribution from, any other insurance available to an additional insured under this policy, provided that:
a. The additional insured is a named insured under such other insurance; and b. You have agreed in a written contract or agreement that this insurance would:
(i) act as primary insurance; and
(2) would not seek contribution from any other insurance available to the additional insured.

All other terms and conditions of this policy remain unchanged.

CNV-3252 (12-18) Includes copyrighted material of Insurance Services Office, Inc. with its permission Page 1 of i (266562.1) ..

Item 14 Page 44 of 50
WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY WC 99 04 10 C (Ed. 01-19)

WAIVER OF OUR RIGHT TO RECOVER FROM OTHERS ENDORSEMENT-CALIFORNIA

BLANKET BASIS
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.) The additional premium for this endorsement shall be calculated by applying a factor of 2% to the total manual premium, with a minimum initial charge of $350, then applying all other pricing factors for the policy to this calculated charge to derive the final cost of this endorsement.

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 Waiver Premium (prior to adjustments)
All CA Operations 5660.00
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: 06/01/2024 PolicyNo.: HIWC524308 Endorsement No.:

Insured: Premium $
Insurance Company: Berkshire Hathaway Homestate Ins Co
Countersigned by
WC990410C
(Ed. 01-19) ..

Item 14 Page 45 of 50
Hill Brothers Chemical Company
Services Agreement

Page 20 of 21 ends

______________________

EXHIBIT B

SCHEDULE
..

Item 14 Page 46 of 50

BID FORMS

SCHEDULE OF BID PRICES
PROJECT. Suppiv of 19% Aaueous Ammonia
BIDDER'S NAME: Hill Brothers Chemical Company

Item
No.

Description Units Quantity Unit
Cost
Amount

1. 19% Aqueous Ammonia all n 45.000
annual) $1.20 $54,000

2. 3.

B{D TOTAL
54, 000

Item 14 Page 47 of 50
of the Agreement, and any such increase must be directly tied to the most appropriate index or cost-of-living rote or a pass 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 (PPIJ, for Chemicals and Allied Products, Industrial Chemicals (WPU063) 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 Agreement 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 ad}ustment shall not be less than quarterly. The data used for any proposed adjustment shakl be the most current at the time of proposed adjustment. Price adjustments must be mutually agreed upon, in writing by both parties.

Item 14 Page 48 of 50
1 Peregrina, Efren
From: Luis D. Cervantes III <[email protected]>
Sent: Friday, May 9, 2025 8:48 AM
To: Peregrina, Efren
Subject: Re: RFB - Supply of 19% Aqueous Ammonia
Efren,
I hope all is well. Per our conversation yesterday and in the interest of expediency, this email is meant to confirm that the Aqueous Ammonia 19% bid pricing submitted by Hill Brothers Chemical Company for Option Year 1 will be the same for Option Year 2 and Option Year 3. If you have any questions, please do not hesitate to contact me.

Sincerely,
Luis D. Cervantes III
Territory Manager
Southern CA Sales
Office: (714) 579-3333 x3293 Cell: (714) 323-4526
Customer Care: (800) 322-4119
Email: [email protected] Website: www.hillbrothers.com Order Desk: [email protected]
We Value Your Feedback!
Please take a moment to complete our short 5-minute survey and help us improve. Click the link below to get started and thank you for your time and support!
Hill Brothers Survey
Go Paperless! Please contact [email protected] to sign up for invoices via email.

From: Peregrina, Efren <[email protected]>
Date: Thursday, May 8, 2025 at 5:37 PM
To: Luis D. Cervantes III <[email protected]>
Subject: RFB - Supply of 19% Aqueous Ammonia
Good afternoon Luis,
This is a follow-up to the conversation that we had today 5/8/25.

The City is requesting projected annual fee schedules for Year 2 and Year 3 for the Supply of 19% Aqueous Ammonia.

The same request will be extended to the other vendor that submitted a bid.

Thank you ..

Item 14 Page 49 of 50
Hill Brothers Chemical Company
Services Agreement

Page 21 of 21 ends

______________________

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.
..

Item 14 Page 50 of 50
City Council Agenda Report
Meeting Date: June 17, 2025
From: Brian Saeki, City Administrator
Department: City Administration
Submitted by: Angela Kimmey, Deputy City Administrator
Subject
Metro Link Union Station (Link US) Project Update
Recommendation
Receive and file the Metro Link US Project Update.

While the focus of the Project is Union Station, the Project will have significant impacts within the City of Vernon due to proposed infrastructure changes designed to optimize Burlington Northern Santa Fe (BNSF) Railway operations and expand rail car storage at the BNSF Malabar Rail Storage Yard, located in Vernon. Malabar Yard railroad modifications in the City of Vernon are intended to offset the loss of storage track capacity at the BNSF West Bank Yard that will be acquired by Metro in support of high-speed rail. The 49th Street Closure in Vernon is proposed to accommodate approximately 3,350 track feet of storage capacity at the BNSF Malabar Yard, and the 46th Street Connector would provide a dedicated connection for freight trains to travel between BNSF’s Malabar Yard and BNSF’s Los Angeles Junction.

On August 6, 2024, following a detailed review of the Draft Environmental Impact Statement/Supplemental Environmental Impact Report (Draft EIS/SEIR), the Vernon City Council formally opposed the project due to concerns about impacts to air quality from increased train traffic and idling vehicles, public safety response times, and operational and physical impacts to businesses (Attachment 2). The City expressed its opposition in written comment submitted during the Draft EIS/SEIR comment period that included a letter from the Mayor detailing the City’s concerns (Attachment 3) and a technical comment letter from staff (Attachment 4).

Since then, Metro Link US Project team engagement has included approximately 10 meetings with City staff, 12 meetings with Vernon property owners, one Open House community meeting (on March 26, 2025), and one meeting with members of the Vernon Chamber of Commerce.

These meetings have served as opportunities to further discuss the concerns raised by the City, property owners and business community and to identify potential mitigation measures. The Metro Link US Project team will provide a presentation to Council on June 17, 2025 to share updates on their stakeholder outreach, new data on train activity, and proposed mitigation measures.

Fiscal Impact
There is no fiscal impact associated with this report. ..

Item 15 Page 1 of 88
Attachments

1. Metro Link US - Draft Presentation for Vernon City Council

2. August 6, 2024 Council Agenda Report - Metro Link US Opposition

3. Vernon Mayor Comment Letter Regarding Metro Link US EIR 6-6-2024

4. Vernon Technical Comment Letter Regarding Metro Link US EIR 6-6-2024 ..

Item 15 Page 2 of 88
Link Union Station
(Link US) Project
City of Vernon
City Council Presentation
June 17, 2025 ..

Item 15 Page 3 of 88
Meeting Agenda

1. Introductions

2. Meeting Purpose

3. Project Overview

4. What Will Happen in Vernon

5. Additional Community Mitigation

5. Questions & Next Steps ..

Item 15 Page 4 of 88
Nine Months of Collaboration with Vernon
Working to Support the City's Long-term Vision
JUNE 2024
Draft EIS/SEIR published
29 Mitigation Measures
Required by Draft EIS/SEIR
SEPTEMBER 2024
– FEBRUARY 2025
Collaboration with Vernon 9 Workshops
with City of Vernon
12 Vernon Property
Owner Meetings
90 comments and 8 key
areas of concern
identified / addressed
AUGUST 2024
Vernon Mayor and Director
of Public Works submit
comment letters
104 Additional
Community Mitigation
Measures
over $100k per resident & over $13k per business
$24,564,000 worth of improvements to the City Of Vernon Total Additional Community Mitigation Measures
FEBRUARY 2025
Metro Offers 22 Additional
Community Mitigation
Vernon requests 82 more
Additional Community
Mitigation Measures
..

Item 15 Page 5 of 88
Meeting Purpose:

Provide an update on the Link US Project and how it
would improve citywide circulation and support
Vernon’s goals for economic vitality and future growth ..

Item 15 Page 6 of 88
Project Improves Citywide Circulation

3.5 fewer
Fewer Daily
Train Movements
30-minute
improvement
Reduced Train
Blockage 5-minute
improvement
Faster Emergency
Response
..

Item 15 Page 7 of 88
Additional Community Mitigation
A. Train Detection Cameras
B. Quiet Zone Infrastructure
(Overhead Cantilevered
Signals)
C. Quiet Zone Infrastructure
(Detectable Warning Strips)
D. Mid-block Crosswalk
(with Cool Pavement)
E. Bus Shelter
F. PTZ Smart Camera
G. Mobile Emergency
Operations Center ..

Item 15 Page 8 of 88
Project Overview
..

Item 15 Page 9 of 88
Project Location & Major Components
N. Main St. safety
improvements
6 new lead tracks
New Vignes St. & Cesar
Chavez Ave. Bridges a
Elevated rail yard with new
platforms & canopies
Expanded passageway
Up to 10 new run-through tracks
Common rail infrastructure
(LAUS to First St.)
Permanent removal of 5,500 ft. of
storage track capacity
Dedicated lead tracks for BNSF
freight trains & Amtrak trains
46th St. Connector
49th St. Closure b c de f g h i j k
North of LAUS
At LAUS
LEGEND
South of LAUS
Vernon
BNSF WEST BANK YARD BNSF MALABAR YARD abc de fghi jk ..

Item 15 Page 10 of 88
Mitigation Sites Considered
Malabar Yard is the only site that meets operational requirements to support national goods movement and has sufficient space SIX Mitigation Sites Evaluated:

Hobart Yard
Commerce Yard
Malabar Yard
Los Angeles Junction
Pico Rivera Yard
Eastern BNSF Facilities 123456
Link US Project
..

Item 15 Page 11 of 88
BNSF Malabar Yard Improvements in Vernon
46TH STREET CONNECTOR
1,000 ft. track between Pacific Blvd. &
Seville Ave., connecting Malabar Yard
and Los Angeles Junction
49TH STREET CLOSURE
Closure of at-grade railroad crossing,
resulting in an additional 3,350 ft. of
storage track capacity at Malabar Yard
..

Item 15 Page 12 of 88
Improved Citywide Circulation
..

Item 15 Page 13 of 88
Train Redistribution Reduces Train Movements
Current Daily Trains
Length of trains in existing & proposed condition would be up to 3,000 feet long ..

Item 15 Page 14 of 88
Train Redistribution Reduces Train Movements
Fewer Daily Trains
Length of trains in existing & proposed condition would be up to 3,000 feet long

MALABAR YARD
Used for storage of
empty train chassis
Ex:

LAJ YARD
Used for all train
building for Vernon
customers
Reduces intersection
blockage
..

Item 15 Page 15 of 88
Train Observations in Response to Community Concerns
Vernon Train Observations
Background:

Cameras recorded 24/7 train activity (April 19-25, 2025) Objectives:

Identify current daily train counts and times in the City of Vernon Determine intersection blockages due to current daily train activity Report intersection blockages that would result from the proposed Malabar Yard modifications
..

Item 15 Page 16 of 88
“Through Train” – Serves East Vernon Businesses
LAJ/Downey Road - Existing ..

Item 15 Page 17 of 88
“Through Train” at Pacific Blvd. – Serves West Vernon Businesses Malabar Yard - Existing ..

Item 15 Page 18 of 88
“Yard Train” at Pacific Blvd. – Train Building Process
MALABAR YARD - EXISTING ..

Item 15 Page 19 of 88
NOW
101
minutes of
blockage daily
Existing Intersection Blockages without Project
Train Observation Results
Minutes: 0-5 5-10 10-15 15-20 20+
..

Item 15 Page 20 of 88
NOW
101
minutes
blocked daily

WITH LINK US
Future Intersection Blockages with Project
Train Observation Results
Minutes: 0-5 5-10 10-15 15-20 20+
Daily Blockage
Reduced by
30 minutes
..

Item 15 Page 21 of 88
Intersection Blockages
Potential Intersection Blockages – Camera Observations
Intersection Blockages (Daily Total)
Location Existing Routes
(Camera-Observed Trains)
Proposed Routes
(Redistributed Trains)
Change in
Minutes Per
Day
West Vernon (-45 minutes)
26th Street 4 min 1 min -3 min
37th Street and 38th Street 21 min 13 min -8 min
Vernon Avenue 30 min 14 min -16 min
Pacific Boulevard North 36 min 14 min -22 min
Pacific Blvd East 2 min 6 min +4 min
East Vernon (+6 minutes)
Downey Road 3 min 9 min +6 min
Central Vernon (+8 minutes)
Seville Street 2 min 4 min +2 min
46th Street 2 min 6 min +4 min
Soto Street 1 min 3 min +2 min
Total
Peak Period 9 min 15 min +6 min
Non-Peak Period 92 min 56 min -36 min
30-Minute Improvement
..

Item 15 Page 22 of 88
Intersection Blockages
Potential Intersection Blockages – 3,000 ft. Trains
Intersection Blockages (Daily Total)
Location Existing Route Proposed Route Estimated Change in Minutes Per Day
West Vernon (-222 minutes)
26th Street 18 min 2 min -16 min
37th Street and 38th Street 45 min 30 min -15 min
Vernon Avenue 112 min 30 min -82 min
Pacific Boulevard North 112 min 30 min -82 min
Pacific Blvd East 45 min 18 min -27 min
East Vernon (85 min minutes)
Downey Road 9 min 94 min 85 min
Central Vernon (54 minutes)
Seville Street 9 min 27 min 18 min
46th Street 9 min 27 min 18 min
Soto Street 9 min 27 min 18 min
Total
Peak Period 9 min 9 min 0 min
Non-Peak Period 359 min 276 min -83 min
83-Minute Improvement
..

Item 15 Page 23 of 88
Additional Community Mitigation
..

Item 15 Page 24 of 88
Vernon Benefits & Additional Mitigation
Optimized
emergency response
time & routing
4 locations
with train detection cameras
for at-grade crossings
Upgraded
communications &
radio-systems
New
mobile Emergency
Operations Center
Expanded Emergency
Response System
High visibility crosswalk
at Vernon Elementary
7 crosswalks
improved for visibility
25 new
bus shelters
Quiet Zone support
near planned development
Grant support
for Metro Transit
Oriented Communities
Enhanced Community
Features
Fewer
daily trains
Decreased
local emissions
Minimized
traffic delays
Reduced
Train Impacts
Road restriping
to maintain traffic flow
AI-based
traffic control system
5 locations
with pan-tilt-zoom
smart cameras,
software & screens
Improved
Traffic Control
..

Item 15 Page 25 of 88
Additional Community Mitigation Measures
Train Detection Cameras – 4 locations

1. 37th Street

2. 38th Street

3. Pacific Boulevard

4. Vernon Avenue *
Mobile Emergency Operations Center (EOC) *
Mobile EOC to be used during emergencies or if
central EOC is shut down
Communications & Radio-Systems Upgrade *
New cameras, dispatch, radios & antennae
enables ability for all departments to
communicate (PD, PUD, PW LA County Fire)
AI-Based Traffic Control System (Traffic Upgrades) *
47 transportation controllers
(locations specified by City)
PTZ Smart Cameras, Software & Screens – 5 locations

1. Downey Road at Bandini Boulevard *

2. 25th Street at Santa Fe Avenue *

3. Fruitland Avenue at Malabar Street *

4. Vernon Avenue at Santa Fe Avenue *

5. Pacific Boulevard at Santa Fe Avenue *
Bus Shelters – 25 locations

1. 5 locations

2. 20 additional locations *
High Visibility Crosswalk – 1 location

1. Santa Fe Avenue (Vernon City School)
Cool Street Paving *
Crosswalk Improvements (Restriping) – 7 locations

1. Santa Fe Avenue/37th Street

2. Santa Fe Avenue/38th Street

3. Santa Fe Avenue/Vernon Avenue

4. Santa Fe Avenue/Pacific Boulevard

5. Santa Fe Avenue/Fruitland Avenue

6. 46th Street/Pacific Boulevard

7. 46th Street/Seville Avenue
Cool Street Paving (7 locations) *
Quiet Zone Infrastructure – 5 locations

1. 37th Street

2. 38th Street

3. Vernon Avenue

4. Pacific Boulevard

5. 49th Street
MOU to support regulatory process *
Metro Transit-Oriented Communities (TOC) Program Support

1. Technical Assistance

2. Grant Writing Assistance
* Additional Community Mitigation Measures requested by City of Vernon ..

Item 15 Page 26 of 88
Additional Community Mitigation Measures ..

Item 15 Page 27 of 88
Questions & Next Steps
..

Item 15 Page 28 of 88
Project Schedule
Final EIS/SEIR
Ongoing Stakeholder Engagement within each Project Development Phase Final Design
Right-of-Way
Construction
Final EIS/SEIR
(September 2025)
We are here
12 Property Owner/
Tenant Meetings
(December 2024 –
February 2025)
10 City of Vernon
Workshops
(September 2024 –
March 2025)
Draft EIS/SEIR
Public Comment
Period
(June 21, 2024 –
August 9, 2024) ..

Item 15 Page 29 of 88
Link US Contact Information
Questions
213.922.2524
[email protected]
www.metro.net/linkus
facebook.com/losangelesmetro
Scott McConnell, P.E., Metro Project Manager
Carlos J. Montez, Metro Environmental Lead
Danielle Valentino, Metro Community Relations Manager ..

Item 15 Page 30 of 88
Thank You
Questions/Comments? ..

Item 15 Page 31 of 88
City Council Agenda Report
Meeting Date: August 6, 2024
From: Daniel Calleros, Interim City Administrator
Department: City Administration
Submitted by: Lilia Hernandez, Assistant to the City Administrator Subject
Opposition to Metro Link Union Station (Link US) Project Recommendation
Oppose the Metro Link US Project based on concerns about its potential negative effects on the City and surrounding communities that include, but are not limited to, public safety, air quality, traffic, transportation, economic/financial, and socioeconomic impacts.

Background
The Los Angeles County Metropolitan Transportation Authority (Metro), as the owner of the Los Angeles Union Station (LAUS), is proposing the Link Union Station (Link US) Project to address capacity constraints at LAUS and to prepare LAUS for future high-speed rail service. The Link US Project proposes the integration of new run-through tracks on an elevated rail yard to improve operational flexibility and expand capacity at LAUS. While the focus of the Project is Union Station, the Project will have significant impacts within the City of Vernon due to proposed infrastructure changes designed to optimize BNSF Railway operations and expand rail car storage at the BNSF Malabar Rail Storage Yard, located in Vernon. Malabar Yard railroad modifications in the City of Vernon are intended to offset the loss of storage track capacity at the BNSF West Bank Yard that will be acquired by Metro in support of high-speed rail. The 49th Street Closure in Vernon is proposed to accommodate approximately 3,350 track feet of storage capacity at the BNSF Malabar Yard, and the 46th Street Connector would provide a dedicated connection for freight trains to travel between BNSF’s Malabar Yard and BNSF’s Los Angeles Junction.

At the May 9, 2024 Vernon Business and Industry Commission (BIC) meeting, Metro staff provided a presentation to the BIC on the Metro Link US Project and upcoming opportunity for public review and comment anticipated with the pending release of the Draft Environmental Impact Statement/Supplemental Environmental Impact Report (Draft EIS/SEIR). During the meeting, the BIC, and the Vernon Chamber of Commerce and business/property owners in attendance expressed concerns with the logistical impacts that the proposed road closure would have on business operations, traffic congestion, and public safety response times. Following the BIC meeting, City staff also met with Metro to discuss the Project and reiterated Vernon’s concerns.

On June 21, 2024, the California High-Speed Rail Authority (CHSRA) and Metro released the Draft EIS/SEIR to the public and provided for a comment period beginning on June 21 and ending on August 9, 2024. CHSRA is the lead agency for complying with the National Environmental Policy Act (NEPA) and other federal environmental laws for the Project. Metro is the joint lead agency under NEPA, a project sponsor and lead agency under the California Environmental Quality Act (CEQA). The Draft EIS/SEIR was prepared by CHSRA (as the NEPA lead agency) and Metro (as the CEQA lead agency) to analyze the potential environmental effects of the Project and to identify mitigation measures that would avoid, minimize, or mitigate for potential adverse effects. ..

Item 15 Page 32 of 88
The Draft EIS/SEIR includes analyses for the following environmental resource areas: Land Use & Planning, Transportation, Visual Quality & Aesthetics, Air Quality & Global Climate Change, Noise & Vibration, Biological & Wetland Resources, Floodplains, Hydrology, & Water Quality, Geology, Soils, & Seismicity, Hazardous Waste & Materials, Public Utilities & Energy, Cultural & Paleontological Resources, Economic & Fiscal Impacts, Safety & Security, Socioeconomics & Communities Affected, and Environmental Justice.

Since the release of the Draft EIS/SEIR, City staff have carefully reviewed the documents (over 2,000 pages) to analyze and evaluate the environmental impact study and to identify potential impacts to the City of Vernon. In short, staff have ascertained that there is a lack of qualified, accurate data used in many of the Metro Link US Project analyses that conclude that the Project bears little to no foreseen environmental effects on the City and surrounding Southeast Los Angeles Area (SELA) communities. For example, traffic volume during the COVID-19 pandemic is not reflective of normal traffic conditions. The analyses do not consider the City’s mixed-use zoning and residents in close proximity to the Malabar Yard. Additionally, emissions in Vernon were considered mitigated based on emissions reductions anticipated in other areas (not Vernon or SELA).

Based on the information contained within the Draft EIS/SEIR staff has determined the Project would result in the following adverse impacts:

Air Quality and Increased Emissions
The proposed modifications to BNSF’s Malabar Rail Yard to increase storage capacity will lead to an increase in freight railcar traffic within the City of Vernon. This increase in railcars will also cause vehicles to idle longer while waiting for trains to pass. Consequently, this will result in higher emissions of pollutants such as nitrogen oxides (NOx), particulate matter (PM), and other harmful air pollutants.

Public Safety Response Times and Emergency Vehicle Access The increase in freight traffic will directly impact the response times of emergency vehicles in the City of Vernon. The Vernon Police Department, which prides itself on a swift three-minute response time, is situated on the west side of the rail crossings. If a freight train is passing through, officers must drive south into Huntington Park to circumvent the train, delaying their arrival at critical incidents. Such delays can also impede fire and medical emergency services, and in urgent situations, even a few minutes can mean the difference between life and death.

The proposed project does not adequately address how these potential delays will be mitigated to ensure the safety and well-being of Vernon's residents and workforce.

The closure of 49th Street alone will create additional blockages on: Pacific Avenue (two locations), East bound traffic on 46th Street, Seville Avenue, Soto Street, 44th Street, Boyle Street, Alcoa Avenue, and South Downey Road. These traffic delays are expected to have a cascading effect on the overall transportation network in Vernon, negatively impacting the daily operations and productivity of local businesses and the quality of life for residents. ..

Item 15 Page 33 of 88
Operational and Physical Impacts to Businesses
The proposed expansion and modifications at the Malabar Yard will also have detrimental operational and physical impacts on at least 21 businesses in the vicinity. Metro proposes several design options that include full demolition of several business buildings. The potential use of business properties for the expansion could result in the displacement of established businesses, loss of jobs, and economic instability in the area. Additionally, operational disruptions caused by increased freight traffic and construction activities can hinder the day-to-day activities of local businesses, leading to financial losses and forcing several businesses to shut down.

Staff recommends that Council take a position opposing the Metro Link US Project based on the negative impacts to the City of Vernon, its businesses and residents, and surrounding communities. Staff is preparing written comments to be submitted to Metro by their August 9, 2024 public comment deadline.

Fiscal Impact
There is no fiscal impact associated with this report.

Attachments
None.
..

Item 15 Page 34 of 88
Office of the Mayor
4305 Santa Fe Avenue, Vernon, CA 90058
CityofVernon.org
August 6, 2024
Metro
Attn: Carlos J. Montez
Deputy Executive Director
One Gateway Plaza, MS 99-18-2
Los Angeles, CA 90012
RE: Link US– Draft EIS/SEIR
Mr. Montez,
Thank you for the opportunity to provide comments on the Environmental Impact Statement/Supplemental Environmental Impact Report (EIS/SEIR) for the Metro Link US Project. I am writing to convey the City of Vernon's opposition to the Malabar Yard Mitigation. This “mitigation” proposes modification and closure to two streets in Vernon, and to facilitate the expansion of the Malabar Rail Yard, owned by BNSF, as a “mitigation” to the Metro Link Union Station Project. While we understand the goal is to address capacity constraints at LAUnion Station and to prepare Union Station for future high-speed rail service, the negative impacts on the city of Vernon and surrounding southeast Los Angeles (SELA) Environmental Justice (EJ) communities are significant and should not be overlooked. These impacts would be eliminated if, in accordance with Metro’s Relocation Assistance Program and the California Relocation Assistance Act, BNSF were paid for the use of its storage tracks rather than relocating its storage operations to Vernon.

The Los Angeles County Metropolitan Transportation Authority (Metro), as the owner of the Los Angeles Union Station (LAUS), is proposing the Link Union Station (Link US) Project to address capacity constraints at LAUS and to prepare LAUS for future high-speed rail service. While the focus of the Project is Union Station, the Project will have significant impacts within the City of Vernon due to proposed infrastructure changes designed to optimize BNSF Railway operations and expand rail car storage at the BNSF Malabar Rail Storage Yard, located in Vernon and approximately two city blocks north of the border with the City of Huntington Park. As currently proposed, the project would require theclosure of 49th Street to accommodate approximately 3,350 track feet of storage capacity at the BNSF-owned Malabar Yard and a “Connector” at 46th Street to create a dedicated connection for freight trains to travel between BNSF’s Malabar Yard and BNSF’s Los Angeles Junction.

Vernon is home to a working population of over 50,000 people. Over the past several years, the City of Vernon has worked to implement environmental reforms to improve air quality and mitigate its industrial impacts on SELA’s Environmental Justice communities, including restrictions on the development of large warehouses to improve traffic and reduce vehicle emissions, attracting clean commerce through incentivizing green and tech industries, adopting zoning changes for more balanced land-uses, facilitating the development of housing, and growing ..

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Vernon’s residential population. These efforts have been crucial in safeguarding our residents and workforce. Unfortunately, Metro’s proposed modifications on behalf of BNSF threaten to undermine these hard-won gains and put an immediate halt to much-needed housing developments occurring in the project area.

Since the release of the Draft EIS/SEIR, City staff have carefully reviewed the documents to provide separate technical comments in response to the Link US Environmental Evaluation of Malabar Yard Mitigation (Appendix Q of the Link US Draft EIS/EIR). In summary, the Link US Project would result in adverse impacts to the following areas:

Public Safety Response Times and Emergency Vehicle Access The Malabar Yard Mitigation provides for an increase in BNSF’s freight train length to up to 60 Rail Cars – 4,000 feet, almost a mile in length. This will directly impact the response times of emergency vehicles in the City of Vernon. The Vernon Police Department, which prides itself on a swift three-minute response time, is situated on the west side of the rail crossings. If a freight train is passing through, officers must drive south into the City of Huntington Park to circumvent the train, delaying their arrival at critical incidents. Such delays can also impede fire and medical emergency services, and in urgent situations, even a few minutes can mean the difference between life and death. The proposed project does not adequately address how these potential delays will be mitigated to ensure the safety and well-being of the local community.

Traffic Impact with Street Modifications
The proposed closure of 49th Street and the 46th Street Connector, will cause significant traffic impacts. These two streets are heavily used by surrounding businesses and the closure/modifications will result in issues with traffic patterns, private parking, and access to loading docks, leading to congestion and delays for commuters and local businesses. The closure of 49th Street alone will create additional blockages on: Pacific Avenue (two locations), East bound traffic on 46th Street, Seville Avenue, Soto Street, 44th Street, Boyle Street, Alcoa Avenue, and South Downey Road. These traffic delays are expected to have a cascading effect on the overall transportation network in Vernon, negatively impacting the daily operations and productivity of local businesses and the quality of life for residents, in addition to pushing traffic into surrounding communities.

Operational and Physical Impacts to Businesses
The proposed expansion and modifications at the Malabar Yard will also have detrimental operational and physical impacts on at least 21 businesses in the vicinity. Metro proposes several design options that include the full demolition of several business buildings. The potential use of business properties for the expansion of BNSF operations could result in the displacement of established businesses, loss of jobs, and economic instability in the area. Additionally, operational ..

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disruptions caused by increased freight traffic and construction activities can hinder the day-to- day activities of local businesses, leading to financial losses and forcing several businesses to shut down.

Appendix Q Analysis
The analysis in Appendix Q is flawed in several ways, including references to policies for the City of Vernon, British Columbia in the nation of Canada. The analysis also relies on data and traffic studies performed during the COVID pandemic that are not representative of typical traffic conditions, current ordinances, or residential zoning in Vernon, California, USA.

Another fundamental flaw is that the analysis focuses on the 49th Street closure and the track extension on 46th Street, without examining the impacts that the change in rail operations facilitated by the Malabar Yard Mitigation will have on sensitive receptors in the immediate area.

Focusing on 49th and 46th Streets, not the expanded Malabar Rail Yard results in the exclusion of the Vernon City Elementary School, Holy Angels Church of the Deaf, new housing developments in Vernon, and residents on E 53rd Street in Huntington Park from the Study Area. This minimizes the unavoidable adverse impacts of the Malabar Yard Mitigation. These impacts to Vernon and the SELA community would be eliminated if, in accordance with Metro’s Relocation Assistance Program and the California Relocation Assistance Act, BNSF were paid for the use of its storage tracks rather than relocating its storage operations to Vernon.

In conclusion, while the goals of the Metro Link Union Station Project are admirable, we ask that you consider the negative impacts on the City of Vernon and surrounding communities, particularly concerning air quality, public safety, traffic congestion, housing developments, and the well-being of local businesses and the jobs they provide for the community.

I urge Metro to act in accordance with its Relocation Assistance Program and California’s Relocation Assistance Act and pay BNSF for the use of its storage tracks rather than facilitating BNSF's relocation of its storage operations to Vernon.

Sincerely,
Judith Merlo
Mayor
City of Vernon ..

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Department o
f Public Works
4305 Santa Fe Avenue, Vernon, CA 90058
CityofVernon.org
August6, 2024
Metro
Attn: Carlos J. Montez
Deputy Executive Director
One Gateway Plaza, MS 99-18-2
Los Angeles, CA 90012
RE: Link US – Draft EIS/SEIR
Mr. Montez,
This comment letter focuses on the Link US Environmental Evaluation of Malabar Yard Mitigation (Appendix Q of the Link US Draft EIS/EIR). Generally, finding replacement track for BNSF is not an environmental mitigation. The Link US project is displacing businesses other than BNSF, and those businesses are not being relocated by Metro but are instead being paid monetary compensation in accordance with Metro’s Relocation Assistance Program and the California Relocation Assistance Act. In fact, the Malabar Yard Mitigation will itself displace businesses and those businesses are not being physically relocated but are instead being paid monetary compensation in accordance with Metro’s Relocation Assistance Program and the California Relocation Assistance Act. BNSF’s displacement should be treated no differently. A payment to BNSF to compensate for the taking of its property would eliminate the adverse impacts the Malabar Yard Mitigation would have on the environment and the surrounding community.

The analysis in Appendix Q is fundamentally flawed in that it focuses on the 49th Street closure and on the track extension on 46th Street, without examining the impacts that the change in rail operations facilitated by the Malabar Yard Mitigation will have on the entire Vernon community.

This includes the impacts to air quality, both from the train engines, and from the traffic that will be delayed at rail crossings throughout the city. While the analysis in Appendix Q has many flaws which minimize the unavoidable adverse impacts of the Malabar Yard Mitigation, the following adverse impacts were identified: • Transportation- Operations. Implementation of the Malabar Yard railroad improvements would cause a potential roadway hazard due to queuing which may also impede access for emergency responders, increase response times, cause schedule delays to transit services, or disrupt pedestrian and bicycle access.
• Safety and Security- Operations. Potential increased response times for emergency service providers and roadway hazard due to queuing.
• Socioeconomics and Communities Affected- Operations. Potential access restrictions to Stacy Medical Center.

These impacts to the Vernon community would be eliminated if, in accordance with Metro’s Relocation Assistance Program and the California Relocation Assistance Act, BNSF were paid ..

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for the use of its storage tracks rather than relocated its storage operations to Vernon. The following are specific comments on the Link US Environmental Evaluation of Malabar Yard Mitigation (Appendix Q of the Link US Draft EIS/EIR):

1. Page ES-1 “The Los Angeles County Metropolitan Transportation Authority (Metro), as the owner of Los Angeles Union Station (LAUS), is proposing infrastructure improvements in the vicinity of LAUS as part of the Link Union Station (Link US) Project (Project or proposed action) to address existing capacity constraints at LAUS.” Union Station is approximately 3.9 miles from the Malabar Yard. This is arguably not in the vicinity of LAUS, but rather transfers the impacts of the project to the environmental justic e
communities in southeast Los Angeles
.

2. Page ES-1 “The California High-Speed Rail Authority (CHSRA) and Metro have identified railroad improvements to the BNSF Malabar Yard in the City of Vernon to offset the loss of storage track capacity at the BNSF West Bank Yard.” Other businesses being forced to relocate by the Link US project are being paid as compensation. Why is BNSF’s relocation being treated differently? A payment to BNSF would eliminate the adverse effects that the expansion of the Malabar Yard would have on th e
environment.

3. Page ES-1 “BNSF’s Malabar Yard is approximately 8 acres located on the Harbor Subdivision approximately 3 miles south of LAUS in the City of Vernon, California.” The distance is approximately 3.9 miles, not the 3 miles stated.

4. Page ES-3 “Environmental Justice Determination”
The Vernon City School is a public elementary school at the corner of Santa Fe Avenue and Vernon Avenue and serves EJ communities. The school is located within 850’ of the Malabar Yard, as is Holy Angels Church of the Deaf. The environmental impacts to the EJ Communities dependent upon the services provided by these institutions was not addressed in the Draft Environmental Analysis.

5. Page 1-5 “Due to the loss of storage capacity at the BNSF West Bank Yard (and subsequent impacts to BNSF’s existing optimized operations), it was necessary for CHSRA and Metro to identify a suitable location for a replacement site to offset the loss of empty intermodal railcar storage capacity and maintain BNSF’s existing operational efficiencies.” Instead of offsetting the impacts to a private company’s (BNSF) optimized operations through monetary compensation, as is being done for the small businesses being displaced by the Link US
Project, Metro is choosing to offset those impacts and even enhance BNSF’s operations at the environmental cost to the residents, workers and businesses that will be impacted by the Malabar Yard Project. ..

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6. Page 1-5 “BNSF Malabar Yard: BNSF Malabar Yard is located in the City of Vernon, west of BNSF Hobart/Commerce Intermodal Yards, between Pacific Boulevard to the north and Fruitland Avenue to the south. BNSF Malabar Yard is surrounded by industrial land uses to the west and east and is currently used to store local merchant trains and serve local customers on existing spur lines in the western portion of the City of Vernon” The land uses to the west and the north of the Malabar Yard include mixed-use residential. (See City of Vernon Zoning Map, Adopted August 2023) Additionally, two city blocks south of the Malabar Yard are multifamily residential housing on E 53rd Street in the city of Huntington Park.

7. Pages 1-11 through 1-14 “Secondary Screening”
Each of the alternatives to the Malabar Yard were eliminated because of a lack of capacity due to a lack of land. These alternatives could be made to work through the acquisition of adjacent property. Similarly, the Malabar Yard also lacks capacity without the closure and vacation of 49th Street. The acquisition of 49th Street through its closure and vacation comes at a public cost to the area in terms of: • increased air pollution due both to the increased frequency of diesel -powered freight trains
and due to the increased idling of vehicles in the traffic delays caused by the increases in freight trains blocking intersections.
• increased travel times through the area due to the closure of 49th Street, the new rail traffic along 46th Street, and the increased time of intersections being blocked by freight trains. • the impact on emergency services response times due to the closure of 49th Street, the new rail traffic along 46th Street, and the increased time of intersections being blocked by freight trains.
• the impact of noise and vibration on existing and future residents along Santa Fe, along Pacific and along E 53rd Street.
•the impacts on existing and future business uses in the project area that have operations and/or processes that are sensitive to noise and vibration.

8. Page 1-14 Section 1.2 “The Malabar Yard study area is primarily industrial” This mischaracterizes the area. The area is zoned for residential uses and includes a public elementary school and a church for the deaf.

9. Page 2-2 “Malabar Yard railroad improvements would not be implemented using a mix-and- match approach.”
This is an arbitrary approach that ignores the possibility of the least impactful project could be some combination of the two design options.

10. Page 2-3 “South Entrance - Trains do not enter Malabar Yard from the south, but the south entrance at Fruitland Avenue is utilized to perform “head-end moves.” These moves can occupy track southwest of BNSF Malabar Yard to the 2nd Street crossing in the vicinity of Slauson Avenue.” This description is ambiguous and does not describe what “head-end moves” are, what their frequency is, impacts on traffic, etc. making it impossible to compare existing impacts with ..

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future impacts.

11. Page 2-4 “North Entrance” “The foreseeable length of future trains operating on the 46th Street Connector could range from 2,000 feet to 4,000 feet. To serve customers on the existing spur line track east of Pacific Boulevard and south of 46th Street, the Pacific Boulevard and Vernon Avenue at grade crossings could be occupied for “head-end moves” as necessary to facilitate continued freight operations on the existing spur line.” The rail operations made possible by blocking 49th Street will also block: • Pacific Avenue at two locations, • East bound traffic on 46th Street • Seville Avenue • Soto Street • 44th Street • Boyle Street • Alcoa Avenue, and • South Downey Road As these very long trains travel from the Malabar Yard to LA Junction, they effectively cut off traffic going in all directions through much of the city for extended periods of time. Adding turning lines will not mitigate the impact on first responder response times nor will they mitigate the extended idling time for traffic, nor the local air pollution generated by the extended idling of vehicles blocked by trains. The streets with rail crossings are not the only streets impacted by the trains. This will also impact north and south bound traffic along Santa Fe as vehicles stuck at the rail crossings queue through the intersections. These are significant impacts to everyone that lives, works, and drives through the City. The proposed traffic mitigation has not been modeled and will likely be inadequate.

12. Page 2-27 46th Street Connector “Building Demolition” – This is the first mention of building demolition in the Environmental Evaluation for the Malabar Yard. Building Demolition is not mentioned in the project description. Why does this project create a business winner (BNSF) at the cost of business losers (the businesses being impacted by the building demolition and property taking for the expansion of BNSF’s Malabar Yard)? Why isn’t BNSF (a private entity) just being provided with monetary relocation assistance instead of Metro taking both public and private land on BNSF’s behalf for the expansion of its Malabar Yard? The so-called Malabar Yard Mitigation is not an environmental mitigation and is not required by CEQA. For consistency, BNSF should receive compensation for its property in the same manner that other businesses losing property for the Link US project are being compensated … with money.

13. Page 3.1-4 “3.10, Hazardous Waste and Materials”
The Malabar Yard is currently minimally used due to 49th Street bisecting it. The Malabar Yard study area used in the analysis focuses only on the closing of 49th Street and the 46th Street rail extension and does not include the foreseeable significant increase in rail traffic, the ..

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construction of rail improvements to support that increased rail traffic, etc. that would come with the taking of 49th Street and the other private properties being taken for this project. The Vernon City School, a public elementary school owned and operated by the Los Angeles Unified School District, serves disadvantaged communities in the area and is located less than 850 feet from the Malabar Yard. The analysis does not address the impacts to the students and employees at Vernon City School. The increased rail operations and the track improvement construction required to accommodate that increased rail traffic, because they are conveniently just outside of the boundary for the Malabar Yard study area.

14. Page 3.2-2 “Local” “City of Vernon General Plan Land Use Element (2007)” This reference is out of date. The City of Vernon amended its General Plan including the Land Use Element on July 18, 2023. The amendments include allowing residential uses in much of the Malabar Yard study area. Considering these changes in land use, impacts from the Malabar Yard project should be re-examined.

15. Page 3.2-2 “Local” “City of Vernon General Municipal Code Chapter 26 Zoning (2016)” This reference is out of date. The City of Vernon significantly amended its Zoning Code on September 5, 2023. The amendments include changing the Municipal Code Chapter 26 to Title 17, changing the zoning map to reflect changes in the General Plan Land Use Element, and allowing residential uses and retail uses in the much of the Malabar Yard study area (https://ecode360.com/44472551). Considering these changes in zoning, impacts from the Malabar Yard project should be re-examined.

16. Page 3.2-3 “Methodology”
The methodology is flawed in that it relied upon old versions of the General Plan and Zoning Code and does not reflect current allowed and planned land uses.

17. Page 3.2-4 Existing Land Uses “Roadways in the vicinity of the Malabar Yard railroad improvements include Pacific Boulevard, Seville Avenue, 46th Street, and 49th Street.” This public outreach did not include Santa Fe Avenue, a street whose businesses back up to the Malabar Yard, a street whose traffic will be significantly impacted by the closure of 49th Street and the increase in rail activity at grade crossings. Businesses on other streets including those in the vicinity of rail crossings at: • Pacific Avenue at two locations, • East bound traffic on 46th Street • Seville Avenue • Soto Street • 44th Street • Boyle Street • Alcoa Avenue, and • South Downey Road ..

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Businesses on these streets should have been contacted because of the significant impact to due to the very long trains traveling from the Malabar Yard to LA Junction, effectively cutting off traffic going in all directions through much of the city for extended periods of time and in so doing limiting access in or out of these properties.

18. Page 3.2-4 “General Plan Land Use Designations”
“As depicted on Figure 3.2-1, the General Plan land use designation for the entirety of the Malabar Yard study area is Industrial with some portions of the study area are traversed by a Commercial overlay.”
This is incorrect. The current General Plan designates much of the Malabar Yard Study Area as Mixed-Use (MU) in part to meet HCAD’s mandate to provide housing in the region.

19. Page 3.2-4 “Zoning Classifications”
This section ignores the Mixed-Use zoning along Santa Fe and portions of Pacific, allowing residential and other uses in much of the Malabar Yard Study Area.

20. Page 3.2-10 Design Option 1 “Design Option 1 for the 49th Street Closure would also require potential modification to 11 parking spaces on one privately owned property.” In general, there is a lack of available parking in Vernon. The loss of any parking space in Vernon is significant, as the size of buildings, by zoning code, are in large part determined by the amount of available parking. Coupled with the loss of on-street parking as part of the 49th Street closure, could significantly impact employees and customers of businesses in the area. A lack of available on-street parking could also impact the development of future mixed-use residential development.

Additionally, while the closure of 49th Street alters circulation patterns, the impact is magnified by the new and increased Malabar Yard operations that will block surrounding streets while mile long trains are being made up at the storage yard and travelling to the LA Junction.

21. Page 3.2-17 Design Option 2 “Similar to Design Option 1, loss of parking on privately owned property, APN 6308-011-010, would still occur, along with modified access and connectivity to surrounding properties, and alterations to existing circulation patterns” In general, there is a lack of available parking in Vernon. The loss of any parking space in Vernon is significant, as the size of buildings, by zoning code, are in large part determined by the amount of available parking. Coupled with the loss of on-street parking as part of the 49th Street closure could significantly impact employees and customers of businesses in the area. A lack of available on-street parking could also impact the development of future mixed-use residential development.

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22. Pages 3.2-17 through 3.2-18“46th Street Connector Design Option 1” This design calls for the full demolition of two business buildings and the partial demolition of a third building but concludes that no adverse effects would occur because the properties would still be usable after implementation of the railroad project. The demolition of existing buildings used by businesses has an impact on the lives of the workers, their employers, and their customers.

Additionally, the reduced size and shape of the parcels, i.e. the remaining portion of the demolished buildings may render them unfit for future uses in accordance with the Vernon Zoning Code.

23. Page 3.2-18 through 3.2-19“46th Street Connector Design Option 2” This design calls for the full demolition of one business building and partial demolition of parking on another parcel to accommodate establishment of the new railroad ROW, but concludes that no adverse effects would occur because the properties would still be usable after implementation of the railroad project.

The demolition of existing buildings used by businesses has an impact on the lives of the workers, their employers, and their customers. Additionally, the reduced size and shape of the parcels, i.e. the remaining portion of the demolished buildings may render them unfit for future uses in accordance with the Vernon Zoning Code.

24. Page 3.2-19 “Indirect Effects – Construction and Operations. Future redevelopment in the Malabar Yard study area would not be precluded following construction of any combination of design options for the Malabar Yard railroad improvements.” • The traffic impacts of rail operations including mile long trains traveling at slow speeds crossing Pacific Ave to 46th Street as well as the impacts created by those same trains crossing Seville Avenue, Soto Street, 44th Street, Boyle Street, Alcoa Avenue, and South Downey Road while traveling from the Malabar Yard to the LA Junction has been completely ignored in this section. • The traffic impacts of rail operations including mile long trains traveling at slow speeds along a narrow heavily traveled street in addition to increased rail car crossings on that street has been completely ignored in this section.
• The elimination of parking and/or the reduction in parcel size may immediately make these properties non-conforming with the Vernon Zoning Code and would preclude or seriously impede future redevelopment
• The closure of driveways and/or trains blocking driveways that serve as the only means of access to impacted properties would hamper the ability of workers, customers, and suppliers to access those properties, and limit future redevelopment. • The closure of driveways and/or trains blocking driveways would interfere with police and fire response to emergencies on those properties, and limit future redevelopment.

The conclusionary statement “No indirect adverse effect would occur during construction and operation” is false. ..

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25. Page 3.2-33 “Direct Effects – Construction. Upon implementation of Malabar Yard Mitigation Measure TR-1, temporary land use incompatibilities would be minimized, and no direct adverse effect would occur during construction.”
Minimizing an impact does not eliminate the impact, therefore the above statement is incorrect and direct adverse effects will occur during construction.

26. Page 3.2-33 “Direct Effects – Operations The proposed Malabar Yard railroad improvements are transportation-related uses and would be compatible with land uses due to the presence of already-existing transportation infrastructure. No direct adverse effect would occur during operation.”
The increased level of rail operations at the Malabar Yard and the increases in vehicle traffic delays due to the increase in rail cars blocking streets will have a significant impact on the residential developments on Santa Fe Avenue and on Pacific Avenue. These projects are currently in construction plan check.

27. Page 3.2-33 “Indirect Effects – Construction and Operations. Long-term access to adjacent properties would be maintained in coordination with the City of Vernon and nearby business and/or property owners. No indirect adverse effect would occur.” Private rail crossings such as those proposed to access driveways on 46th Street do not run with the land and are instead licensed by the railroad to the property owner and must be renewed when property changes ownership. These licenses are subject to cancellation and may require future rail safety upgrades at the property owner’s cost. This is an adverse impact.

Access to adjacent properties in coordination with the City of Vernon and/or nearby property owners creates an adverse impact on the City, adjacent property owners and directly impacted property owners.

The creation of landlocked parcels that are without direct access to a public street creates an adverse impact on those properties. The creation of landlocked parcels is not allowed in Vernon.

28. Pages 3.2-33 through 3.2-34 “Topics 3.2-C Physical division of an established community” The closure of 49th Street and the increased rail traffic crossing Pacific will isolate the Mixed-use Districts on Santa Fe from the Mixed-use District on Pacific as well as essentially dividing the City of Vernon into West Vernon and East Vernon by gridlocking traffic while trains of rail cars stored in Malabar Yard are being made, and blocking Pacific Avenue as they make their way to LA Junction.

29. Page 3.2-35“4900 Santa Fe Avenue”- “…the parcel may currently be out of compliance relating to parking requirements, as the parcel is required to provide 196 parking spaces, but currently provides only 146 spaces. This parcel meets the definition of Legal Nonconforming Building or Standards as defined by the City of Vernon’s 2017 Comprehensive Zoning Ordinance… No direct adverse effect would occur.” ..

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The City of Vernon’s Comprehensive Zoning Ordinance states:
§ 17.64.020 Restrictions on nonconforming buildings and uses.

D. There shall be no decrease in the parking, loading, or maneuvering capacities as they exist as of the effective date of the ordinance codified in this title if such decrease would either make conforming capacities non-conforming or would decrease capacities of an already nonconforming lot.

The 21-foot building setback is a requirement to provide a safe distance between buildings and utility infrastructure.

The proposed permanent loss of parking spaces, the reduction in maneuvering capacities, and the reduction in building setback from the required 21-feet to 10-feet from this parcel are not allowed under Vernon’s Comprehensive Zoning Ordinance and would therefore create direct adverse impacts.

30. Page 3.2-36 through page 3.2-37 “The closure of 49th Street in a hammerhead cul-de-sac configuration would result in conversion of a portion of four industrial-zoned properties and modified building setbacks and reduced parking spaces for current businesses…” “No direct adverse effect would occur.”
The 21-foot building setback is a requirement to provide a safe distance between buildings and utility infrastructure.

31. Page 3.2-40 “The railroad improvements at 2665 Leonis Boulevard would result in setbacks less than the required 21 feet.”
The 21-foot building setback is a requirement of Vernon’s Comprehensive Zoning Ordinance to provide a safe distance between buildings and utility infrastructure.

32. Page 3.2-40 “Consistent. Any combination of design options for the Malabar Yard railroad improvements would provide for efficient rail service that minimizes impacts on the local street system.”
There is no evidence to support this statement. The Malabar Yard will bring in empty freight cars to be stored for transportation to a different location. These freight cars are not currently stored at the Malabar Yard or any other location in the City of Vernon. These freight cars will not directly pick up or deliver goods or materials from Vernon businesses. The additional rail traffic, the changes in traffic patterns caused by the closure of 49th Street and the rail extension on 46th Street, will all contribute to increased congestion on the local street system leading to, among other impacts, increased air pollution. ..

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Vernon City CouncilJune 17, 2025

Vernon City Council
June 17, 2025